Good afternoon, and welcome to the Vocera Communications conference call. My name is Elaine, and I will be your coordinator for today. [Operator Instructions]. I would now like to turn the presentation over to your host for today's call, Sue Dooley of Vocera, Investor Relations. Please proceed. .

Thank you. Hello, everyone. Welcome to Vocera's conference call to discuss our fourth quarter fiscal 2019 earnings. Joining me today are our CEO, Brent Lang; and Justin Spencer, our CFO. Earlier this afternoon, we distributed a press release detailing our quarterly results.

The release is posted on our website at investors.vocera.com and is also available from normal news sources. This conference call is being webcast live on the Investor Relations page of our website where a replay will be archived.

Before we begin our prepared remarks, I'd like to take this opportunity to remind you that during the course of this call, we will make forward-looking statements regarding projected operating results and anticipated market opportunities.

This forward-looking information is subject to risks and uncertainties described in Vocera's filings with the SEC, and actual results or events may differ materially. Except as required by law, we undertake no obligation to update or revise these forward-looking statements. On this call, we will refer to both GAAP and non-GAAP financial measures.

A reconciliation of GAAP to non-GAAP financial measures is provided in our posted earnings release. With that, I'd like to now turn the call over to Brent..

"Hey, Vocera, send a text message." triggering an interaction that converts their voice into a text message via their Smartbadge, and of course, we believe our number of integrations and workflows into clinical systems will continue to grow.

Moving forward, we are continuing to look for ways to expand our offering across the healthcare continuum by building, buying or partnering to enable frictionless patient journeys.

While healthcare remains our primary focus, we also plan to continue pursuing market opportunities outside of healthcare, in luxury hotels and high-end retail, to name a few areas of recent success. We are investing incrementally in this space by adding a few experienced sales reps, and we intend to capitalize on the opportunities that are out there.

While we're on this topic, I'd like to talk about an exciting new initiative in school safety where we now have some active pilots. It's still early for this opportunity but school safety fits well within our overall mission and our team is eagerly exploring the opportunity.

We are building relationships to inform, educate school systems navigate funding dynamics and prove our value in what we believe is a pressing and crucial use of our solution. Overall I'm happy with how we ended the year, and I'm excited by the opportunity that lies in front of us.

With that, I'd like to give our CFO, Justin, a chance to cover the financial details around our Q4 results, and then we'll discuss our guidance.

Justin?.

Thanks, Brent. Hello, everyone. Our Q4 results represented a strong finish to the year and put us in a position to begin 2020 with good momentum. I'll summarize our Q4 results and then turn to guidance for 2020.

Total revenue in Q4 grew to $49.7 million fueled primarily by double-digit growth of our device business and continued expansion of our recurring software maintenance revenue. For the full year, total revenue was $180.5 million, up slightly from 2018. Product revenue in the quarter was $26.9 million similar to last year.

Device revenue was robust, growing 15% compared to last year as a result of shipments to several new customers, some large badge refreshes and continued strength of our recurring supplies business. We shipped a record number of badges and Smartbadges in 2019, reflecting the continued appeal of our wearable hands-free devices.

Our Q4 device revenue also included a shipment of third-party smartphones to Houston Methodist, who had purchased messaging licenses a few quarters ago.

While software revenue was lower in Q4 and 2019, software and software maintenance revenue combined, which we view holistically as our software business, was 55% of total revenue for the full year consistent with the prior year.

And we have record software backlog as we begin 2020, which gives us confidence that we'll once again have strong growth in this category. Services revenue in the fourth quarter was $22.7 million, up 5% from last year.

Our professional services revenue was down year-over-year as we have transitioned to a more streamlined implementation process and lower cost for our customers. With a large backlog of deployments already scheduled, we expect professional services to grow again in 2020.

And with a larger customer base this year and a renewal rate well above 95%, our software maintenance and support revenue was up again in Q4. This has been a consistent recurring revenue engine driving our growth and directly reflects the enhanced value and functionality our customers receive from our software.

As our software revenue increases again in 2020, our software maintenance growth should also expand accordingly. Now I'd like to comment briefly on our backlog and deferred revenue. This combined balance at the end of the year was $136.3 million, up 13% compared to the end of 2018.

This is the most significant increase in a few years and gives us confidence in the long-term health of our business. In the short term, it also enhances our revenue visibility, which I'll touch on a bit more when I discuss guidance. Turning to profitability. In Q4, we achieved adjusted EBITDA of $6.9 million.

And for the full year, our adjusted EBITDA was $16.9 million. As we look forward to 2020, we expect our profitability to improve again with operating leverage from higher revenue and more software.

With that as some context, let me get into some more detail on our non-GAAP gross margins and operating expenses, including a comment on what we expect in 2020 for each of these areas. Non-GAAP gross margin in Q4 was 64%.

Product margin decreased from last year, primarily as a result of lower software revenue and the third-party devices we shipped to Houston Methodist.

Although the margins we achieved from reselling smartphones are less than those of our own badges, we provide them to customers who are looking to leverage our software with a complete solution from a single vendor. Our services gross margin increased compared to last year as we continued to drive leverage in all parts of that business.

As we now look forward, we expect our overall non-GAAP gross margin percentage to increase in 2020. As our software growth returns, and we realize even greater leverage from growth on the fixed cost in our services business.

And with our normal pattern of revenue seasonality expected again in 2020, we expect our gross margin percentage to be in the low 60s in Q1 and then improve in the subsequent quarters as revenue increases. Non-GAAP operating expenses were $25.9 million in Q4 similar to last year as we continue to focus our spending on growth.

Given the market opportunity we see ahead for us, we are investing to drive long-term growth, particularly in sales and product development. As a result, we expect our operating expenses to increase this year. We expect our non-GAAP operating expenses to be roughly 58% of revenue with spending at a fairly similar level in each of the 4 quarters.

Now I'd like to make a few comments about our cash flow and balance sheet. We added $9 million of cash to our balance sheet in Q4 as a result of our profitability and working capital management. For the full year, our operating cash flow increased to $15.8 million, and we expect this to be even higher in 2020.

Our CapEx is expected to be around $5 million this year or roughly 3% of revenue. Our balance sheet positions us well to capitalize on new growth opportunities. Turning now to guidance.

Brent spoke earlier about the market dynamics we expect this year, and we have touched on the good progress we are making in evolving our sales capability to align with the ongoing changes in the market.

The sales reps that we have added in the last 12 months are relatively early in their ramp, but we expect them to contribute to our success this year. Additionally, the higher level of backlog and deferred revenue increases our confidence and provide better visibility to our revenue than we had entering 2019.

We expect our revenue seasonality in 2020 to be similar to our historic pattern with roughly 45% in the first half and 55% in the second half. With that as background for 2020, we expect revenue to be between $186 million and $196 million. With this annual revenue growth, we also expect to improve profitability.

In 2020, we expect adjusted EBITDA to be between $15.5 million and $20.5 million.

In the current year, our profitability will be closely tied to our revenue pattern, so we expect adjusted EBITDA to be the lowest in Q1 and then expand as top line increases through the year, reflecting higher profitability and progress toward our target operating model.

For the first quarter, we expect revenue to be between $36 million and $39 million. Adjusted EBITDA is expected to be between negative $5 million and negative $2.5 million. We now look forward to 2020 with a lot of optimism.

We continue to see a large opportunity ahead of us and feel we are making the right moves to align the organization and drive long-term growth and enhanced profitability. I'll now turn it back to Brent..

Thanks, Justin. Overall, I believe 2019 was a year of great accomplishment for us. We finished the year strong, and we believe we have made the right strategic bets to address the long-term opportunity.

It's still early days in the evolution of hospital communications away from pagers, loudspeakers and wireless phones, the functionality and scalability of our differentiated software platform is unmatched in the marketplace. And our solution provides a compelling value proposition for hospitals of all sizes.

We had a great year for large system wins and the large expansions underscore the strategic importance our customers see in our products. Our differentiated technology and our large greenfield opportunity inspire us to pursue the goals we set out to achieve. You may know that 2020 is the Year of the Nurse.

And I'd like to take a moment to highlight something really important to me. The "Why" that drives our mission at Vocera? Our mission is to transform healthcare by improving the lives of patients and caregivers.

We have a long track record of providing nurses with tools to improve resiliency, reduced toil and burnout and return a sense of joy back of their time with patients. I'm proud of our lasting connection with nurses and the broader hospital staff, and we look forward to celebrating the Year of the Nurse.

I'd also like to thank our employees who dedicate their talents to developing our solutions extending our reach into the market, delivering thought leadership and contributing to our unique culture.

In 2019, Vocera and our employees made meaningful charitable contributions of both time and money to our local communities, deciding together where to donate those dollars and working side-by-side volunteering in our communities.

Finally, before opening up the call for your questions, I'd like to personally invite all of you to our investor breakfast at HIMSS on March 11. Feel free to contact Sue if you have any questions about this event, and please stop by our booth at HIMSS, where you'll be able to experience our solutions firsthand.

With that, we're ready to conclude our formal remarks. Thank you for listening today. Operator, we're ready to open up the line for questions..

[Operator Instructions]. And your first question comes from the line of Sean Dodge from RBC Capital Markets..

Maybe just starting with the revenue guide. Your targets implied 6% growth for the first quarter, and about 6% growth for the full year. So it looks like it will be pretty flat growth trajectory over the course of the year.

I would have thought, Brent, given the comments around bookings and being backlog and deferred revenue, you'd be expecting revenue growth to accelerate over the course of the year.

So maybe you can just help square that for me?.

Yes. So I do think we feel good about coming into the year. We -- as you know, we tend to set our guidance on the conservative end of the spectrum. So we'd love to be towards the top end of that range. And I think we're still in the early stages of understanding really the market growth dynamics and so we don't really want to get ahead of ourselves.

But I think it's fair to say that we're feeling good about where we ended the year and about the momentum that we have and the backlog that we have in the business..

Okay. And then the 10% bookings growth for the full year, you said the fourth quarter wins were substantially higher year-on-year.

Can you give us a sense of just how much higher fourth quarter was? I guess, with most of the growth for the year generated in this most recent quarter?.

Yes, I think that's fair. We had a really strong fourth quarter after relatively mild growth in the previous quarters. And several of the large deals that I talked about, obviously, helped drive that. But overall, I think the sales team is feeling strong momentum right now. And it was a great way to finish the year..

And your next question comes from the line of Vikram Kesavabhotla from Guggenheim Securities..

I just want to talk about the sales force comments for a moment. I appreciate your commentary on how that's been evolving.

Maybe if you can just talk about how far along you are in that transformation overall and maybe what the key changes are that you expect to make throughout 2020? And from a high level, how you characterize the productivity level of the sales force today relative to what you had throughout 2019?.

Yes. So there's sort of two components to the changes we made in the sales force. The one was trying to upgrade to people that had more enterprise selling capabilities to be able to sell the C-suite with these larger more complex deals. And the second piece was to grow the absent number.

So we're actually growing the size of our quota-carrying sales force to address the growing larger market opportunity that we see in front of us, both domestically and internationally. And those hires took place during the course of 2019, it sort of spread through Q2, Q3 and Q4.

There's a few remaining that are still in the process of occurring, but the vast majority of the hiring has been completed. And then the corresponding sales ramp, obviously, is -- corresponds to when their start date was. So we typically expect to see someone ramp to full speed within about 6 months of their hire date.

And so some of those folks are now fully ramped and others are still in the process. But I think as we look into 2020, we expect the vast majority of them to be fully ramped for the full year. I came from our sales kickoff meeting last week in Dallas, and we have the whole group together and it was a really exciting meeting for me.

And it was great to meet the new reps, a lot of great capabilities from folks who have been selling enterprise solutions, many of them for much larger organizations, into the C-suite and really understand that complex deal dynamic.

So I think it was great to see them and meet them, and it really increased my level of confidence in their ability to succeed this year..

Okay. Great. And maybe just as a quick follow-up to that. On the Smartbadge, if you can just give us an update on how the adoption trends have been and the associated attach rates with that and what you've embedded in the assumptions in the outlook for 2020? That would be great..

Yes, our progress continues there. The -- we highlighted a few of the larger deals that had Smartbadges attached to them. And so we continue to kind of work through the dynamics of new customers versus existing customers.

We're finding that existing customers are going to likely adopt the Smartbadge at natural points of refresh or large badge purchases. Well, it's a little bit easier for new customers to adopt because they're not as particularly tied to a previous technology. But overall, we're pleased with the progress. We've made some enhancements to the product.

Brent talked about the wake word addition, which we're really excited about that we think just continues to enhance that hands-free experience for the Smartbadge. And then in terms of our assumptions for continued ramp of the product in 2020. They're relatively modest. The way we look at our device business is we look at it as a portfolio.

And so our objective is to grow the overall device revenue category, which can come from a mix of B3000n and the original Vocera badge, the Smartbadge and now complemented by the 2 smartphone offerings that we have.

And our goal is to offer our customers a true Device of Choice option and allow them to select the best set of devices that work the best with the software platform and that are best for their environment. So our assumptions for 2020 as it relates to the Smartbadge are quite modest..

And your next question comes from Ryan Daniels from William Blair..

Yes, just another one, Justin, for you on the guidance. You indicated that you have better visibility entering the year.

Does that indicate a change in the philosophy of how you're providing guidance as it relates to bookings and backlog and then regards to the kind of percentage of revenue you think is locked up at least early on in the year versus maybe how you would report that or guide in the past?.

Yes. Ryan, I'd say that 2020 kind of represents the return to our historical norm or -- 2019 was a bit unusual because we had anticipated that there would be a bit more ramp in the second half that didn't quite materialize as we expected. And so 2020 is more similar in pattern to the years before that where we don't have as much of a back-end ramp.

So for example, we expect our revenue to follow a seasonal curve of roughly 45% in the first half and then 55% in the second half. And that's spot on with where we were in 2018, 2017 and before that.

The second thing is that because of the strength of our bookings, particularly at the end of the year, it allowed us to build a reasonably healthy amount of backlog and deferred revenue, and so we go into the year with a level of visibility that we didn't have at the beginning of last year and that, again, is more similar to where we were in in prior years.

And so as a result of that, we just feel better about where our guidance is. We try generally to be conservative with our guidance. The framework itself has not changed. We look at the amount of revenue we expect from our backlog and deferred revenue, the amount of supply that we expect, which has been very consistent and steady.

And those two elements added together represent the amount of revenue that is visible to us at the beginning of the year. And I'd say we're in a better position now than we were at this point last year..

Okay. That's helpful. And then just a follow-up, if I could. I know we're only supposed to have one. But EBITDA, it looks like the midpoint of guidance would be 9.4% EBITDA margins. This year, I think you reported 9.4%.

But throughout your script, you indicated that gross margins would increase this year and profitability would increase and op expenses would be relatively similar it looks like year-over-year.

So why wouldn't EBITDA be a little bit stronger from a percent margin basis on a year-over-year, with the organic growth returning?.

We expect -- with the organic revenue growth, we do expect our gross margins to increase. But we're also investing in our business. So operating expenses will increase a bit in 2020. The areas of investment, as we talked about, are primarily in sales and new product development.

We're trying to kind of focus our spending -- manage our spending in other areas so that we can direct as much as we can to those -- essentially revenue generating or innovation-related areas. So we'll see our operating expenses increase. That's what creates kind of near term, a little bit less leverage.

But in the long run, those investments are going to allow us to re-catalyze the profitability having said all that, we try to guide pretty conservatively with our EBITDA, and we're always targeting the higher end of the range.

And so it's -- we think about kind of where we're targeting that would be our expectation to try and align with that at the higher end of the range..

And your next question comes from Sean Weiland from Piper Sandler..

Hey, Vocera. To ask Ryan's question a slightly different way, if we applied the same ratio of backlog to deferred revenue to forward 12-month revenue that you had last year as we're doing this year, it would suggest a number slightly higher than the high end of your range.

So I want to understand are there specific mechanical issues or things that you see in that calculation that is different? Or is it just, be it, dialed up the conservatism a little bit..

Sean, we -- certainly, we're trying to be a bit more conservative where we can. I think probably the factor that I'd point to there, though, is there are several large deals in our backlog and they each have a little bit different timing.

And so that can move -- if you're looking at a ratio like that, which is a good one to look at, but we also have to kind of factor in the timing of specific deals. We had a record quarter in terms of the size and impact of these larger deals on our bookings.

And so they're -- most of those are now teed up to be delivered in 2020, and some will carry forward into even 2021, just because they're large projects. So that's probably the single most determinant of kind of how the timing of that unfolds. But overall, we feel like we're in a much better position from a backlog and deferred revenue standpoint..

Okay.

And then specifically on the OpEx, the R&D increase, can you call out maybe 1 or 2 big projects that you're spending the money on?.

one, is around the overall Voice experience. When we originally created Vocera, we were very much mavericks in the use of voice as a user interface. And it's an area where we feel like we've got lots of competitive differentiation. Speech recognition has become much more mainstream, and there's a lot more things we can do with it now.

And so we're expanding -- what we're going to be offering in terms of that Voice user interface. And you and I talked about some of those things in the past are now becoming more of a reality.

So that would be certainly one area; another area that I mentioned is the continuation of some of the integrations and really revitalizing and expanding integrations with other additional clinical systems and scaling the platform to be able to support these larger and larger system wins.

2019, was a lot of, what I'll call, sort of new product introductions of new platforms, both the Smartbadge and Vina. 2020 is more about scaling those to really address the needs of these very, very large customer deployments and the complexities of the integrations and workflows that they're wanting us to capture for them..

And your question comes from Matthew Gillmor from Baird..

This is probably related to Sean's first question, but I just wanted to ask specifically on the elongation of the sales process? And I know, obviously, that's a trend to you. Talks a lot about the last 2 quarters, and the fourth quarter bookings would obviously indicate maybe that's improving a little bit.

I'm sure you don't want to declare a victory yet, but I was curious if you had any updated perspective on the elongation of the sales process and kind of how you're factoring that into guidance.

Is that different than I think you were kind of calling out some lumpiness with deals with Sean, is this the same thing? Or is it -- would you characterize it as sort of a different dynamic? And how has that dynamic been trending?.

So I think we're right in the middle of it. The trend line is certainly continuing towards these larger deals, the difference between where we are today versus where we were a year ago or two years ago is that we've had a longer period of time in this period of larger deals and longer sales cycles. And so eventually, sort of steady state that out.

I'll just give you one interesting data point. I talked about the Norton deal $7.4 million win. This was a deal where we were awarded Vendor of Choice in 2018.

And actually, when we came into 2019, had a high degree of confidence that it was going to book early in the year and actually planned to recognize the vast majority of the revenue associated with that deal in 2019.

And in reality, even though we were -- been working on the deal for years and had been awarded Vendor of Choice two years ago, we just received that booking in Q4, and the revenue is now going to be in 2020 and beyond. And so this is the new normal. I think it's taken some time for us to get used to that.

But now that we have deals that are in various stages of closing within our pipeline, we have a much better understanding of what it takes to close these larger deals, and therefore, we can factor that into our forecasting methodology and evaluate both the pipeline and the backlog as it relates to revenue.

So I don't think it's going to be a continuing slowing force on our business because we're now in a state where we've got various deals in various stages of closing, but we are definitely much more aware of what some of these deals take to close. Each one of them has kind of its own story..

Got it. Fair enough. And then, yes, I think you called out some third-party device revenue that came through. And I was curious if Justin could quantify that so we could understand how that influenced revenue in the quarter..

Matt, we don't break it out specifically, but I can tell you that a meaningful portion of the device growth was attributed to the Houston Methodist shipment. We do -- we provide the smartphone to Zebra smartphones and now the Spectralink Versity phones as a way to -- for the customer to essentially receive a combined solution from us.

It's convenient for them. And they're able to work with one partner for the whole solution bundled with the software. We also, though, in the quarter, even absent that we also had growth in badges as well. So -- but the majority of the growth in device category did come from the Houstin Methodist smartphones..

And your next question comes from the line of Gene Mannheimer from Dougherty & Company?.

I want to ask the guidance question, a different way, cut it another way. If you had -- it sounds like you're drawing more of your guidance off backlog, right, than you did a year ago.

So if you have 70% visibility into your midpoint today, how much visibility did you have a year ago when you gave guidance?.

Gene, we're probably not going to be in a position to share the exact numbers, but I can just tell you it's significantly better and so that's why we just feel like we're in a better situation. The backlog and deferred revenue we have more software backlog, which we think is going to yield better growth in 2020.

And overall, as we look at the combination of our supplies and then the backlog and deferred that we expect to convert we're just in a much stronger position as it relates to the overall revenue target for the year..

That makes good sense. And follow-up with respect to the Smartbadge adoption that you're seeing, the product's been out now about a year.

Is it still the dynamic that customers are piloting these in small phases or departments? Or when might we start to see that change and see more full house wide deployments of the Smartbadge?.

I think we're well beyond the pilot stage, Gene. As I mentioned in my prepared remarks, we've got customers that are ordering hundreds of these Smartbadges at this point and particularly newer customers that are looking to standardize right out of the gate. They're going with the Smartbadge upfront.

I mentioned the 2 deals in the Middle East that went Smartbadges house wide with their initial deployments. And even some of the existing customers are starting to roll out larger numbers. So it's definitely beyond the pilot stage.

I think what we're seeing is that there continues to be a strong demand for this Device of Choice variability, and they're seeing specific use cases tied to the various devices that we offer, whether it be the badge, the Smartbadge or the smartphone for different groups of workers within the hospital.

And really the power of the platform is the interoperability and the seamless communication between those different form factors. And I think it represents a really nice portfolio of products that allows the customer to get the device that's most appropriate for each style of worker..

[Operator Instructions]. And your next question comes from David Windley from Jefferies..

I wanted to come at the operating expenses from a slightly different way. You've talked about incremental margin in the 30% to 40% range, I think, under normal circumstances, this guidance that you're giving today is more like 10%. So call it, $2 million to $3 million of additional operating expense investment.

And I think you've pointed at some of the sales investments and some product development, R&D type investments. And then you've also said that the sales kind of top-grading is largely done.

I guess, I wanted to understand a little bit of cadence, but I think I understand that reasonably well, but it sounds like the step function of operating expense is kind of already in place at the beginning of the year, is that right? And then do you think that beyond 2020, you'd get back to that 30% to 40% incremental margin algorithm?.

Hi, Dave. Yes, we continue to have what we believe is a very attractive financial model. And as we've been able to demonstrate in the company's history, we do have inherently operating leverage in that kind of a range. We actually are going -- we're targeting leverage. It's a little bit higher than what you stated.

But what I would just say is that as we think about the transition now to 2020, as Brent touched on in his prepared remarks, we've made a significant portion of the sales investments that already we've made those in the back half of the year. And to some extent, also the R&D.

So our actual amount of new hiring, if you will, in 2020, is relatively modest. We put the people in place, really at the end of the year. And so what happens is you have kind of a full year effect. So as you look now to our first quarter operating expenses, there will be likely a step-up from Q4, just as a result of the full year effect.

And then it will remain relatively constant because we're not going to be adding significantly more heads at the year -- as the year progresses.

And then from there as we get to the back half of the year and then hopefully looking into 2021, we'll be in a really strong position to get back to the kind of leverage that we've been more accustomed to over the last several years..

Great. And if I can ask a slightly different question. Brent, I think in your comments, you commented about some prod development investment strategies, which connotes that you want to build some things, I guess, I wanted to gauge your appetite for buying technology, buying acquisitions.

And if you're leaning more toward building, would you entertain the possibility of deploying some of your capital into your stock?.

So it's definitely a combination of both building and buying. We have an appetite for doing both. And we haven't made an acquisition in a couple of years, but we remain active in looking at deals. And we put a couple of term sheets forward on deals that we've found to be strategically important to us.

But in a couple of cases, we're outbid by private equity firms that pay prices on these deals that we just didn't feel were appropriate. And so in some cases, we decided to go ahead and invest the R&D to build that capability in-house. And in other cases, we'll continue to look for future acquisition opportunities.

With regard to the last part of your question, we don't have plans at this point to evaluate any kind of stock buyback. We think a better use of capital is to invest it in the business either through internal organic development or through the inorganic activities that we're pursuing..

And your last question comes from the line of Matt Hewitt from Craig-Hallum Capital..

I apologize, I jumped on a little bit late, so if these were answered or addressed in your prepared remarks, I apologize. But regarding [indiscernible] in the United Arab Emirates. In the most recent press release, you mentioned 11 additional hospitals coming on board.

Is there a timing set for those? I mean, how should we be thinking about those coming on board? Is that over the course of '20? Does it extend into '21?.

Yes. So we don't really have a specific time line associated with that. What that is, is really an agreement a purchasing vehicle, the outline that we've been named as their kind of Vendor of Choice.

And when you're dealing with the Middle East, the exact time frame for when those POs and bookings and ultimate deployments will occur is a little bit hard to know. We're encouraged by the activity that's going on there, but I can't give you any more detail in terms of specific timing..

Okay. And then, I guess, the last one here. A lot of discussion about the additions to the sales force over the back half of last year, and it sounds like you're pretty much complete.

What does that headcount sit at today relative to last year? And maybe a little bit -- digging a little bit deeper, how many of your existing sales force would you say are new over the past 6 months?.

So rough numbers, I think, about 20 of the quota-carriers are new. And the new number is -- and we're constantly cycling. So there's -- there continues to be swap out some of those are replacement of existing people and some of those were incremental hires. I think the total quota-carriers is around 80..

And I'm showing no further questions at this time. I'll turn it back over to the leader for closing remarks..

Thank you, and appreciate everyone's time today and look forward to catching up with you and seeing you again..

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect..