Greetings. Welcome to the Skillsoft Corp First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] And please note that this conference is being recorded.

I will now turn the conference over to Eric Boyer, SVP of Investor Relations. Thank you sir, you may begin..

Good afternoon and welcome to Skillsoft's first quarter fiscal 2023 earnings call. After the market closed, we issued our Q1 earnings press release and post the supplemental materials to the Skillsoft Investor Relations website.

Today's call will contain forward-looking statements about the company's business outlook and expectations including statements concerning financial and business trends, our expected future business and financial performance, financial condition and outlook.

These forward-looking statements and all statements that are not historical facts reflect management's beliefs and predictions as of today, and therefore are subject to risks and uncertainties that could cause actual results to differ materially from expectations.

For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks described in the safe harbor discussion found in the company's SEC filings.

During the call, we will also discuss certain non-GAAP financial measures, which are not prepared in accordance with Generally Accepted Accounting Principles.

GAAP requires accounting periods before and after the merger and de-SPAC on June 11 2021 to be separated into predecessor and successor periods to reflect the change in ownership and lack of comparability between periods due to different ownership and investment basis.

In addition, Global Knowledge activity is only reflected in the GAAP financial statements after June 11th. References on this call to combined GAAP results reflect a combination of the predecessor period before June 11th that excludes Global Knowledge with the successor period after June 11th.

For all non-GAAP measures in the supplemental materials and in today's commentary, the Company is providing normalized results as if Skillsoft and Global Knowledge had been combined for all periods presented, which we believe is useful to investors to show the trends of the go-forward Company.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as how we define these metrics and other metrics is included in our earnings press release, which has been furnished to the SEC, and is also available on our website.

After our prepared remarks, Jeff Tarr, CEO and Gary Ferrera, CFO, will be available to take questions. With that, it's my pleasure to turn the call over to Jeff..

Thanks, Eric. Good afternoon, and thank you for joining us. I'm very pleased to report that in Q1 we grew bookings in our Skillsoft content segment by 22%.

This is the four consecutive quarter of growth in this segment and the first quarter of double-digit growth under the leadership of our new management team, which stepped in with our return to public markets a year ago. It’s particularly noteworthy and that it follow seven straight years of declines.

These results are due to new organically developed and acquired capabilities; early success in our go-to-market strategy; and strong demand for the transformative learning experiences we offer organizations and their employees.

The Skillsoft content segment, which includes the Percipio platform is almost entirely subscription in nature and high margin and we expect it to be the main driver of future value creation for the company.

The strength of the content segment was offset in the quarter by a decline in our lower margin transactional instructor-led training business and in sum total due to a loss of a large customer for the Company's payroll solution.

On this call, I'll discuss the acquisition of Codecademy, which greatly enhances our tech and dev offering and a number of important product enhancements made in the quarter.

Finally, I'll talk to actions we are taking to improve our global knowledge instructor-led training business and our longer-term strategy to further transition the business to subscription revenue. Let's start with the Codecademy acquisition, which closed in April.

This combination nearly doubles our reach, creating one of the world's largest communities of learners, totaling more than 90 million people across more than 160 countries.

When combined with Skillsoft’s existing tech and dev offerings enterprise customer reach and Percipio learning platform, we have created an industry leader in tech and dev and an important driver of future growth. We see a long runway for cross-selling Codecademy into our large enterprise customer base.

We've already completed a light integration of the Codecademy platform into Percipio. We've also developed sales enablement programs and have begun working with more than 50 enterprise customers, who have expressed interest in Codecademy, including some of the world's largest banks, health care companies and professional services firms.

Moving on to product enhancements in the quarter. As employees make new demands on their employers, labor and skills gaps have emerged as the number one threat to business according the fortunes recently released survey of Fortune 500 CEOs. This threat ranked higher than inflation, recession, geopolitics and cyber security.

Skillsoft is uniquely positioned to help organizations address this enormous challenge, while others approach learning from a primarily consumer perspective we've long operated at the intersection across the organization and its employees, propelling organizations and people to grow together through transformative learning experiences.

Experiences that are absorbing trusted, connected and they deliver exponential results to our 17,000 business customers and community of 90 million learners. Our recent product enhancements advance these objectives, contributing to increases in customers learners and usage. Let me share a few notable examples.

As already mentioned, we recently completed the first phase of the technical integration of Codecademy into Percipio, our immersive AI-driven learning platform. This is an important enabler to cross-selling Codecademy to our enterprise customers to helping them address critical skills gaps and programming and data science.

As we advance our integration, we are blending Skillsoft micro videos, Codecademy hands on learning, the coaching solution we acquired with Pluma and instructor-led training from Global Knowledge to create more absorbing an immersive learning journeys.

During the quarter, we also launched Skills benchmarks, which is objective standards to officially profile learners knowledge in particular areas and recommend personalized AI curated learning journeys.

By giving both the organization and the learner a clear understanding of the point of departure from a Skills perspective and the clear path forward we deliver an exponential return on investment. We've already released 125 Skills benchmarks and expect to launch 500 by year-end.

We've also made our transformative learning experiences more absorbing with gamification features, including our recently launched digital flash cards that reinforce learning and recall on the go.

We've made our learning experiences more connected with new social features, including the addition of shared playlists and we've kept a sharp focus on enhancing customer ROI with the addition of goals and reminders, propelling organizations and their learners forward towards a set of shared learning objectives.

These new features combined with a $120 million investment in new content over the last four years content that's trusted and designed for the way people learn online have contributed to the growth of our subscription business.

Our migration to Percipio has also been a big driver of this transition to growth, lifting our content dollar retention rate above 101%, a 10 percentage point increase over last year. I'm proud that we're winning more new major accounts including PayPal and Sacks in Q1.

And that we are seeing a number of encouraging metrics, including 31% growth in new business, a 13% increase in new logos and a 16% increase in average deal size. In Q1 our strong subscription growth was offset by declines in Global Knowledge.

Global Knowledge is transactional in nature and more sensitive to macroeconomic headwinds, including customer investment in new major IT projects; investment from our partners and training their customers; and our ability to maintain full staffing and entry level inside sales. It's also a lower margin and has lower impact on adjusted EBITDA.

We are working on initiatives that we believe will help improve the performance of this segment in the back half of the year.

For example, we've launched new products and initiatives with our technology partners to train their customers, supplemented hard to fill inside sales positions with outside resources and implemented targeted increases and go-to-market spend.

We're also taking important steps to shift this transactional revenue to our higher margin subscription offerings consistent with our longer-term strategy. We are embedding instructor-led training into subscriptions and cross-selling both Skillsoft and Codecademy to Global Knowledge customers.

An exciting example is a recently launched subscription that offers comprehensive training on a wide range of Microsoft products such as Azure and Dynamics, combined with important competencies such as agile and devops. We've also been cross training a subset of Global Knowledge salespeople to sell both Skillsoft and Codecademy subscriptions.

We believe proactively increasing our percentage of subscription revenue is the right strategic decision that will accrete to growth in margin and create a more valuable company.

Before I turn it over to Gary, I want to briefly speak about our engagement with two great causes that align with our deep commitment to opening doors to new possibilities through learning. We recently announced initiative with iamtheCODE, whose mission is to train 1 million young women and girls and marginalized communities to code by 2030.

iamtheCODE will be launching its digital learning platform powered by Skillsoft’s Percipio and some of Africa's largest refugee camps where 10s of thousands will have access to the curriculum.

We're also partnering with our longstanding customer Adecco to help train Ukrainian refugees much needed soft skills, so if they can find new jobs as they rebuild their lives. We're proud to be a partner with these great causes.

In summary, we're pleased with the progress we've made, putting our higher margin content subscription business on a solid growth trajectory. We’re committed to improving the performance of Global Knowledge and will accelerate our transition towards even more subscription revenue for the long-term. And with that, I'll now turn the call over to Gary..

Thanks, Jeff. I will now begin with the summary of our Q1 results before turning to our thoughts and the remainder of the year. As I described our results they will be presented as if Skillsoft and Global Knowledge had been combined and their fiscal quarters had been aligned end on January 31st 2021.

In addition for comparability the results that I described will include approximately 1 month of Codecademy in both Q1 FY ‘23 and Q1 FY ’22. Bookings for the total company for the first quarter were $125 million, down 5%, compared to the prior year. Bookings were flat year-over-year, when excluding the sum total segment.

This was driven by significant growth in the content segment of 22% offset by a 15% decline in the Global Knowledge segment, which is the larger of the two segments in Q1. Turning to revenue, combined GAAP revenue was $164 million in the quarter. Adjusted revenue in the quarter was $170 million, up 1% over the prior year.

As a reminder, our outlook is based on adjusted gross revenue. You will notice that this quarter as with Q4, there was a much smaller difference between adjusted revenue and GAAP revenue. This relates to our adoption of a new accounting standard ASU 2021-08 accounting for contract assets and contract liabilities.

Non-GAAP revenue adjustments are expected to be significantly smaller, due to this change. Our GAAP net loss was $22 million for the quarter. Q1 adjusted EBITDA was $3 million down $4 million, a decrease of 12%, compared to last year. Adjusted EBITDA margin for the quarter was 19%.

As I mentioned on the last call, when comparing adjusted EBITDA year-over-year you need to also consider the increases in public company costs as we move through the first full-year as a public company. In addition, Q1 adjusted EBITDA and margin significantly outperform the expectations we provided on our last call.

This was partially due to slightly higher revenue than anticipated, but primarily driven by the fact that our higher margin content segment outperformed expectations, while the lower margin Global Knowledge segment underperformed expectations. Public company costs and hiring also ramped more slowly than anticipated in the first quarter.

We ended the quarter with $76 million in cash versus $155 million at year-end. The decrease in cash balance was due to the acquisition of Codecademy at the beginning of the quarter, as well as the $47 million decrease in borrowings on our accounts receivable facility.

At quarter end, net leverage was 4.1 times, due to the lower cash balance and EBITDA from this quarter was below prior year Q1 EBITDA, due to increased public company costs, as well as the inclusion of the Codecademy acquisition. Let's now move to the individual segments.

Bookings for the Content segment in Q1 were $51 million, an increase of $9 million or 22% year-over-year. This growth was driven by contributions from the Pluma acquisition, new customers and DRR or dollar retention rate of 101% versus 91% in the year ago period. Codecademy performed as expected with bookings growth of 24%.

We are also very encouraged by the pipeline has been built within our enterprise customer base since our acquisition of Codecademy in early April. Adjusted revenue for Skillsoft content in Q1 was $90 million, up $5 million or 5% year-over-year. This increase was driven by new business and growth in prior year bookings.

Bookings for Global Knowledge in Q1 were $56 million, a decrease of $10 million or 15% year-over-year. This decline was due to its more transactional nature and its greater sensitivity to macroeconomic headwinds including investment levels in IT spending and open sales positions due to the tight labor market.

Q1 adjusted revenue for Global Knowledge was $51 million, a decrease of $3 million or 6% year-over-year. The decline was largely due to lower in quarter bookings, which typically convert to revenue within two quarters. Now turning to sum total.

Q1 bookings were $19 million, a decrease of $7 million or 26%, due mainly to a large contract loss in the legacy payroll business. Adjusted revenue for the quarter was $29 million flat year-over-year. In terms of outlook, we continue to feel good about our content subscription segment performing well throughout the remainder of the year.

However, we are now tracking towards the low end of our bookings and revenue outlook, due to the primarily transactional Global Knowledge segment, which is starting off the year slower-than-planned. We are taking actions on multiple fronts that we believe can positively impact the second half of the year.

If the macro environment worsens or these efforts do not take hold Global Knowledge could further weigh on the overall bookings and revenue outlook for the year. However, we are also taking actions to deliver our adjusted EBITDA outlook of approximately $167 million, even if Global Knowledge does not see improving results in the second half.

This is in part aided by the strength within our higher margin content business and Global Knowledge being our lowest margin business and therefore, having a smaller impact on total company profitability.

Now focusing on the more immediate future, while we are very pleased with the 22% growth in the Content segment in Q1, it is by far the smallest quarter of the year for content bookings. We do not anticipate reporting that level of percentage growth as we continue throughout the year.

In addition, Q2 last year was our strongest growth quarter with total bookings growth of 18% and Content bookings growth of 9%, making it a tough comp.

More specifically for Q2 we would expect bookings and revenue to approximate or be slightly down to prior year, as the continued growth in the content segment in Q2 is not expected to make up for the near-term decline in Global Knowledge segment. We expect EBITDA to be up on a sequential basis from Q1 fiscal year ‘23 with margins approximating 20%.

With that, I'll turn it back over to Jeff..

Thank you, Gary. Before opening the call for questions, I'd like to take a moment to thank our dedicated team members. Bringing the company public, forming a new management team, completing three acquisitions and returning our subscription business to growth as required tremendous dedication and sacrifice from our more than 3,000 employees.

With that, operator, please open the call for questions..

Thank you, sir. At this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Raimo Lenschow with Barclays. Please proceed with your question..

Thank you. Couple of questions if I may.

First, Jeff is good to see the progress in Content where we get probably most of the question from investors will be more on the Global Knowledge side and some total? And can you speak up little bit too, I know its transaction focus, but since we're going back like some companies in our space have said is like no impact and there is a little bit impacted and some other impact and a little bit of impact in Europe.

You're showing a little bit more already. Could you speak to that like in terms of how that kind of showing up for you? And that's the first question. Second question is on some total and obviously that was kind of something that's kind of impacted that lots of they have won a contract impacted the quarter.

But what confidence in terms of like holding the line here for the rest of the year? And then the third question is on Codecademy, you've talked about a little bit of the -- a little bit around the cross-sell opportunity into enterprise.

Could you speak to that in terms of like how clients are taking that up is that like a blanket contract to enable people, what's the -- and what's the cadence in terms of uptick that you're expecting them. Sorry for the three questions, but thank you..

Okay. Raimo, that's great. Thank you.

So first of all Global Knowledge is I think a transactional business we sell seats in virtual classes and in actual physical classrooms and I think, I understood your question, so how does the macro effect Global Knowledge? It's in a few ways, first of all, Global Knowledge is sold in bulk when customers undertake new big IT projects.

So if new big IT projects start that's when you need to start training your employees, and when those get move to the right by customers purchases of Global Knowledge slowdown. Secondly, we help our large partners, the largest IT hardware and software vendors in the world train their customers.

And so when their growth slows they're spending on training their customers slows. And then finally, this is a business that has more exposure to Europe relative to the rest of our business and that shows up both in demand and in our ForEx impact. So that's why we believe we've got off to a slow start in this business.

And then as I mentioned there is the fact that we've had a harder time maintaining full staffing levels in our inside sales organization.

Those jobs are just harder to go in this environment and we're taking action to supplement that by both ramping up our recruiting and also engaged couple of outsourced services firms to help us with that and we're launching a number of new products with our customers to again ramp Global Knowledge in the back half.

Your second question was on sum total. Sum total as we’ve said in the past about 80% of sum total historically at least last year was the -- is the Learning Management System or LMS business and that part of the business is performing well and continues to perform well.

Last year 20% of the business was in the Legacy Human Capital Management modules, payroll being one of them, time management being another, those are core to the learning management system part of the business.

Their subscale relative to competitors in that space and we lost one large customer that takes that percentage of the business down for about 20% down to about 15%. So that helps you size the pressure that we could see over time that pressure which show up in the legacy business, but the Learning Management the LMS business is actually quite slow.

And then your final question was on Codecademy in the cross-sell opportunity you have or selling it. We are selling Codecademy for business. But in terms of -- it's an add-on to our subscription product, so it's add an additional charge.

It addresses really critical Skills gaps in the enterprise in the area of data science and coding and while it's early at the end of the quarter, we were only one month end, we're seeing really strong interest from our customers in the Codecademy offering as we expected..

Okay. Perfect, very clear. Thanks, Jeff..

Thank you, Raimo..

Thank you. Our next question comes from the line of Robert Simmons with DA Davidson. Please proceed with your question..

Hey, thanks for taking the question. I guess, first off, you sort of answered this, but where would you say the Global content -- I'm sorry, the Global Knowledge reaching was focused, you said those European exposure for sure.

But was it also industry and then what is your exposure to -- directly to the war of impacted areas?.

Yes. So first of all I can say we're not impacted significantly directly by the war, we really have negligible exposure to Ukraine and Russia, it's more in Europe about ForEx and the economy in general.

And globally, it's really just about I guess some of the pressure we've all seen as some of the large hardware and software vendors have reported that we're just not seeing as much growth as we were seeing in IT spending. I think the other key factor to keep in mind is the first half was very strong in Global Knowledge, last year.

We had really strong bounce back from COVID, we also -- we believe in hindsight benefited from some delayed spending in IT, as the world started to open back up. So really tough compares in the first half of Global Knowledge..

Got it. And then where are you in the process of buying out some of the executive or working high level roles that you need to as a public company. Like, you said that some of that hiring delay in the quarter.

Are you [Technical Difficulty] done with the, kind of, the most important hires that you need to make?.

I think you're asking -- are you asking about leadership team hires?.

Yes, like kind of that..

Yes, yes. We haven’t -- I feel great about our leadership team that was a key effort in the first phase of the new Skillsoft was staffing that leadership team and that team is now working really well together to grow the business. And I think you see the impact of that on the subscription business, which is really performing very strongly.

It's the highest margin part of our business, it's where we placed a lot of focus, because we see it as the most important part of our future, not that the other components aren't important, but we are trying to migrate the business to subscriptions as we talked about with Global Knowledge, we see -- we've been moving some of that content into subscription offerings.

We've been cross-selling subscriptions and that is the result of that. The leadership team that we put in place and the people that they returned higher. And then our 3,000 team members across the organization that are working really hard to grow this business..

You’re right, that the hire you were talking about was the inside sales team and people like that where it was slower and we had been --.

Yes, it's very focused, it's the inside sales for Global Knowledge in particular..

Got it.

And then with your Workday adjustment, how quickly do you expect that cohort of legacy customers to migrate to Percipio? And then also how big is it?.

So in terms of Workday there are important learning management system provider or human capital management system providers are having that, that connector in general availability is really important to our customers.

In terms of the migration to Percipio, we feel really good about the progress, I think you see that in the retention rate that's now over 100%. We've got approximately 10% of our revenue base sitting on SkillPort.

And what we're actually seeing is the retention rates on SkillPort are way up, and the reason for that is the customers who are still on SkillPort are really sticky. I mean these are customers who in many cases have really deep integrations into their software, they are resellers, they are government customers.

And so they're going to take a little longer to move. But as you can see it's not holding back our dollar retention rates materially as it had in past years with DRR up 10 percentage points year-over-year..

Got it. Great, thank you very much..

Thank you..

Thank you. [Operator Instructions] Our next question comes from the line of Raj Sharma with B. Riley. Please proceed with your question..

Hi, thank you for taking my questions. Cal I go back to -- can we go back to the Global Knowledge, the decline in revenues year-on-year and sort of the outlook is impacting your guidance.

Is this COVID pandemic-related or is it sort of any economic slowdown here? Or is it just one-off of project that didn't come through? And then if you can give more color on that, I know you said that industries or geographies were equally impacted or and also, how are you feeling confident that you this -- that you'd be able to reverse this Global Knowledge decline, and then I have a couple of more questions..

Okay, super. Thank you. So in terms of quantifying Raj, how much of the Global Knowledge shortfall is macro. I -- we've quantified it as about 50% macro and that's multiple large projects, that's not just one large project and about 50% of it, we believe is due to staffing in our inside sales organization.

So logically that the staffing piece of it is easier to address the economy is not obviously not in our control, although we are working to launch new products with partners that are better suited to the market that we're in today.

In terms of industry, geography, last year our business in Europe delivered very strong growth in GK as it bounced back from Europe. And bounce back in COVID and this year we're not seeing Europe as a driver of growth, at least so far in the year. So that's what we see the single biggest change in trend.

And then in terms of [Technical Difficulty] going forward, I'm confident that we're going to be able to stack up the inside sales organization and supplement that with third-party resource. But I have less visibility into IT spending, customer spending, end-products that's why we're pointing people to the lower end of our guidance..

Got it. And then going to the Skillsoft part and the content. Was there organic growth? I know that it includes one month of Codecademy. I wanted to understand if you were not going to break out the Codecademy revenues going forward. And they are going to be larger in context. So is that sort of the right way to look at the business.

Just wanted to understand the organic growth versus the additions from Codecademy..

Yes. The addition from Codecademy was minimal. And it's not even a full month, so we're talking less than $1 million in the numbers. And when you look at the pro forma numbers it's half-half, it’s growing from that by 24%, but its impact in the content business that 22% would basically 22% whether code was in there or not..

Right. And then are you going to break out the Codecademy numbers going forward or they going to be lumped up -- lumped in into --.

The plan is to have it in content, we’ll give color when it makes sense. But the way it's being sold everything, it’s just part of the content business..

Great.

And then the last part, I want to understand the engagement in the platform, engagement levels in the Percipio platform, have they changed? I see that the retention rates are higher, I wanted to understand the engagement? And then also on the digital adoption by federal agencies, where is that tracking with your FedRAMP certification last quarter?.

Yes. So first of all that we are seeing increases in usage on the platform. So this quarter was all-time high in terms of usage on Percipio and that's to be expected. It's a very high engagement platform and we continue to add features and functionality.

And one of the metrics I'm super pleased with is the number of blockchain-based digital badges that we issued, its press -- it's pushing up against 30 million blockchain based digital badges that's a huge number and really important, because those digital badges are transferable, they are portable they move with the learner.

So we feel really good about the usage and the uptake in Percipio. The second part of your question, if you could just remind me what that -- you're looking at --.

Yes, just the federal agencies that you were looking to it at some point, right the adoption by federal agencies to be -- to ramp up significantly, I think your overall to 100%, yes..

That's all in flight as we know, the U.S. government doesn't move all of that fast for good reason on IT projects. So we're still early, we just received FedRAMP certification a quarter ago. So no updates there..

Yes. Got it. I'll take it offline. Thank you so much for answering our questions. Thanks..

Thank you..

Thank you. And our next question comes from Arvind Ramnani with Piper Sandler. Please proceed with your question..

Hi, hey thanks for taking my questions.

I just wanted to double-click on the Codecademy and Global Knowledge integration you've certainly provide some color as part of the prepared remarks, but if you can clarify, how do you expect these two basically offerings to combine? And then the follow-up to that would -- for the Codecademy like users would they experience anything different like how does the user experience change for each of these consumers?.

So let me start with the latter of the Codecademy experience hasn't changed for Codecademy customers. There they continue to enjoy the same service that they've always enjoyed.

The single biggest -- the only real change is that users of Percipio can now access Codecademy through Percipio, and that's an important first step in cross-selling Codecademy to our enterprise customers. And I believe we're off to a very good start with that.

In terms of integration, I think it's a -- I can start by sharing first of all Codecademy runs as a Zach -- Zach Sims reports directly to me running the Codecademy business, so that hasn't changed.

From an enterprise sales perspective, we brought enterprise sales for Global Knowledge, Skillsoft tech and dev and Codecademy together under one leader, it's focused on tech and dev sales globally.

Now within that there are individual teams, there's enterprise teams that are focused on enterprise customers and for the most part the enterprise teams sell the full suite of offerings. Then there are inside sales teams that are dedicated generally to specific product.

So that inside sales team selling Global Knowledge is dedicated to Global Knowledge, and so that's how we integrated sales for our tech and dev offerings..

Great, great. And then just kind of you know as you look out over the next, I guess, 18-months or two years.

Would you expect, kind of, from a secular perspective Global Knowledge to kind of continue to become a sort of an insignificant portion of revenue or how should we be thinking of the Global Knowledge business? I don't know, maybe not even in two years maybe in three or four years..

Yes. The way first I think about it is -- think about us continuing to drive strong growth in our subscription business. That includes Skillsoft -- and the Skillsoft business that sits on Percipio, it includes Codecademy, which is entirely subscription and that's what we're seeing the growth.

So then on the transaction side Global Knowledge look to us to take capabilities from Global Knowledge and increasingly embed those and subscription offerings.

And look for our sales teams, who are dealing with our enterprise customers, supporting our enterprise customers look for them, so move dollars from transaction business to subscription business, which is where the margin is and where we believe the value creation set.

So over time I look to -- for that subscription business to grow faster than transaction and that should drive transaction say, below 20% as a percentage of revenue. I think there is a place for transaction, no revenue in our business, it just should be a smaller percentage there is today..

Great. And just one last question from what I recall, you know, Global Knowledge acquisition was done maybe right before, kind of, of these SPAC transaction. And given that it's relatively new is this sort of like, you know, have things played out as per your expectation.

When you do that acquisition or has some of the decline come as a surprise?.

I would say, so first of all the acquisition was closed essentially simultaneously to the de-SPAC transaction. It outperformed our expectations last year and while we're early in the year at this point, I'd say it's underperformed our expectations this year.

I'd say that what's offsetting that is that so far this year the subscription business is over-performing our expectations. So that's, I think that would be a complete picture of performance relative to expectations..

Thank you for answering my questions..

My pleasure..

Thank you..

Thank you. [Operator Instructions] Okay, at this time, I'm not seeing any questions coming in. Jeff, I'd like to pass it back over to you for any closing remarks..

Well, thanks everyone for participating in the call and we'll certainly keep you updated as we advanced through the year. Thank you..

Thank you, everyone. This does conclude today's conference call. You may disconnect your lines at this time. Thank you for your participation and have a great day..