MODN - Earnings call 4 2023

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Operator

Good afternoon, and welcome to Model N Fourth Quarter 2023 Earnings Conference. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the conference over to Carolyn Bass, Investor Relations. Please go ahead.

Carolyn Bass

Good afternoon. Welcome to Model N's Fourth Quarter and Fiscal 2023 Year-end Earnings Call. Investor Model Bass, Carolyn is Relations N. for This today Blessing, Officer; Model me John on President Jason call the Officer. Executive With N's are and Chief Financial Ederer, and Chief

the for earnings performance offer close on Our fiscal and website. purpose you to to primary our a and call The was our with release issued information our of and regarding first is press quarter market posted is provide outlook today's commentary and made as These should financial The this at fourth of ending call based any statements. XXXX. year relied representing September and include on forward-looking of as on subsequent may XX, upon today views be not management's expectations, date. are our statements current quarter views as

obligation filed statements results forward-looking any the disclaim in or refer the any XX-K update differ may most risk to and with Actual our XX-Q to factors Please materially. SEC. Form outlook. recent We

non-GAAP financial today's during a call, addition, These from not or to, in substitute In should GAAP discuss for as in we non-GAAP be addition isolation considered measures. financial results. will measures

is disclosures includes additional call of and supplemental quarter some reports, in SEC John Investor QX, fiscal the XXXX our Reconciliations on encourage investor.modeln.com the non-GAAP metrics later year-end which metrics website. and fourth on a this which GAAP included our deck to periodic the webcast Investor visit Relations the our replay earnings website will Press the call. issued you access Release, today, Relations nearest to in review I release for of are to available at that

results. And call that, our this Jason. call over fiscal let comparisons me unless Finally, year be will in the financial made all to turn otherwise to with XXXX stated,

Jason Blessing

were and quarter a adjusted exceeded driving quarterly for We commitment I and welcome our professional Thank line results QX to revenue, that report pleased am was with strong our EBITDA. Overall, you, profitable our services guidance total subscription revenue. guidance on fourth in and our growth. quarter today. revenue to call demonstrates Carolyn, to

by SaaS QX dollar XX% Our retention while year-over-year, SaaS SaaS XXX%. metrics by grew which also ARR, driven strong, net were was

or on-premise customers a model a approximately year process strong growth to building was closed either live Life successfully in of Our in customers, ARR points, our cloud. up year pivotal XXXX a improving that as from are year SaaS the move to durable prove XX% we the We out ago. with the continue business. Sciences XX% the business and of or we transition, our our moving to cloud, SaaS profitability

driven. have XX, SaaS their more believe our X to on-premise all the I end-of-life we given of announced need a complexity substantially expect few is on applications. To we This transitions mission-critical nature IT context, truly it customers a and continue will worth by into transformation customers. help map, convert their or into our but have know, remarkable the that for solutions do I quick that our road model December this will quarters we accomplishment a accomplishment put be to that business X you recap of our would will As thought XXXX. team, that of we I have sequence

profitable the revenue years, our X leverage EBITDA SaaS doubled. last the annual clearly to This our growth and shareholders. delivering of adjusted our philosophy have Over both and demonstrates model in

that franchise, We provides products to mission-critical our customers. have built a great SaaS

profitable to foundation collaborate products for we great Model N with customers build future, family. add as new a growth to the new is and This customers

signing selling customer from We some business share new growth base back the of to that logos. drivers delivered strong key highlights like and I'd the powered by Next, transition, were results, quarter. our SaaS to

some share examples. me let So

First, SaaS transition.

mutually make sure SaaS we favorable we signed the agreements paying final up As customers. with new approach QX, SaaS with time our calls, we take transitions. to I've to wanted five This in with past transition off. said ended is on And that

Bausch SaaS Health globally set care a relationship two builds lives upon our transition pharmaceutical stage products. diversified signed people's decade. the we their Companies, This First, a the is company, a deal with XX-year health with next to companies between whose improve and for mission

the cloud, more to allow landscape. while our Moving staying we'll take advantage innovation compliant improvements, to also and Bausch of efficiently performance regulatory with evolving

in is kicked will the over XX people and employs customer, deploy the of over their to with X of than who We eventually country generic customer transition ]. off largest [ XX one X countries, more the next another and XX,XXX cloud years. removed long-time footprint across drugs also the producers the companies This SaaS world additional

customers During costs and, of two course, pharma to that transition. additional more are transitioned, SaaS looking signed the the to performance, also quicker these customers other quarter, innovation, access access predictable enhancements. two large Like new for customers improve regulatory long-time to have we easier

we pay as sales, out multiyear by additional up transitions dividends We customer continue see roadmaps. also setting SaaS build a to base

During Vigilance. transition, sell sets the product, is as and a like at Advanced well of up to QX, start over couple Membership it that Ngage. that to example SaaS new because This add Validata our ability is [indiscernible] upsell Advanced major are example Ngage new not products, customers. SaaS to a as they with that products, and one more new one new saw we will Management, a popular our products products but Membership of Management this released particularly last clear our our This testament XXXB peak Validata, future encouraging customers is we've is years. of including

services. business to Turning

to the Haleon around their Medicaid new take improved of improved Haleon client could organization [ and extensions, we and advantage drive decided logo a move processing processing using several service industry partner best current Haleon interactions with that ]. from During administration membership technology. a levels to was and and provider seeking an quarter, chargebacks, practices customer signed processing.

In of in technology now signal new mobile mixed as N for platform Cloud an leveraging Model processing Tech, High in improvement. good a our segment QX, make Logic, steady show with solutions move this top on-premise applications, quarter continues to of selected move and to been of some low-power innovator Revenue choice. to had Cirrus Logic Cirrus their consumer releases. cloud. allow it their our processes, partners and This their will consume easier and streamline will all collaborate their to them We has

Deal with integrated was MicroSystems, automotive Allegro multiple by in discount a Model selected Allegro reducing has of global Vendor while be and used of to the a industrial automated partners. goal management circuits, at channel homegrown markets. N Also loading manage global QX, and of replace automating Choice, as a sensors, manufacturer inefficient Allegro prices, manual and processes help controls. will technology better platforms, systems management

Turning to Services. Professional

The bottom our team demand Professional results exceeded Services line top for the mission-critical as solutions, drive strong another expectations symbolized quarter. Organization improvements. Our to with and companies our of strong seek

job X I'd Model J&J team the a do getting like live, live pharma terrific customer, N out time cloud were as areas: forward team accommodate continues IT is to to J&J with the complex projects well and also services able a We needs able J&J's downstream the call customers business. professional month to integrations on requirements. reporting to J&J's and their to two to full budget. One their system. required Our and pull success ensure successful long-standing the as by this is meet particular, we on quarter-end of go infrastructure, of and new go-live customer, to key a customer in that in were project support their

allows Medicaid our collaboration customers. with invoice continue collaboration automated on future, to products As new [indiscernible] done this time build Two are via business we a we around process that examples in new was theirs. the with customers QX manually with collaborations email focus Channel High and portal and partners launched is retrieval. incentive sales real our in Tech to channel recent and in that collaborate data. Historically, training

manually which to customers and a allow top offering significant drive is invoice our Medicaid service of with partner accurately of efficiencies will improve more cost started Medicaid and each X design and automation will ]. robotic year. one Manufacturer and we automates acquisition expect process from done using pharma enabled partners, productivity which [ there global new partners, portal invoices, automated customers. QX, been collaboration retrieval improvements and deploy our channel satisfaction. Also that channel this pay This quarterly costs historically overall can during was product including channel ingestion to their are Our

expect We year quarter. In another product generally this available driving of closing, this to pleased extremely make I with growth. profitable am

Our strong results XXXX Model around efforts the world. the of fiscal Ns collective reflect

in cloud of model annual time. Both our in EBITDA, short have start the the SaaS our showcased at just a we've leverage outlined years. the call, transition our is adjusted of doubled period by very successful I X clearly and in revenue demonstrated As

our to value ahead, objective growth our to improving driving deliver is and profitability. continue to while Looking customers,

fiscal our to QX I'll John call John? offer outlook turn the QX that, financial and discuss results in XXXX. our With over to for

John Ederer

Thank you the Jason to afternoon everyone call today. good and on

As EBITDA adjusted the high delivered the with we and growing profit we set year. with range, EBITDA fiscal share XX% earnings non-GAAP by the the adjusted per good Jason end fiscal revenue, and year. I revenue, XX% metric, fiscal QX, noted, XXXX was guidance pleased by particularly per earnings quarter all in closed that and services every the we out XXXX up revenue, share, performance in our subscription exceeding professional another at total of beginning for of

a the we more cohort final SaaS described, the little our And model impact through As talk about business few Jason in also of are of we'll working minutes. a transition.

grew financial Looking of also Subscription upper the range. quarter. exceeding top million, the which our $XX.X by specifically end revenue at to XX% million, fourth of X% for Total guidance. exceeded $XX our revenue guidance increased results our to the end

was run end utilization to professional team high XX% $XX.X as by high revenue Lastly, of continued above the our the to guidance, which rates. million, at services

provided earnings non-GAAP keep our we'll of our a our In of be discussing in profitability, full results and please in numbers that is mind reconciliation terms release.

the in quarter, fourth $XX.X G&A sequentially longer was of to gross QX. margin basis no again higher sequential we of XX.X%, initiative And up was margin million, the which corporate margin performance QX. subscription gross XX.X% QX expected, than gross total a are a once non-GAAP non-GAAP exceptional by and to pursuing. $X development XX.X% on QX, from for that was was nonrecurring due million a expenses were which related team. Operating Total roughly gross representing was expenses, flat profit professional from slightly For non-GAAP services

to expect related of $X 'XX. expense We another this of in QX million FY

adjusted compared was quarter result, the low for the quarter the a but XX.X% of to for margin XX% to $XX our improved range guidance XXXX, of of XX.X% at end EBITDA EBITDA fiscal increase fourth year. million, last from the fourth Adjusted an As quarter.

XX% $XX.X Finally, non-GAAP year-over-year high was at which $X.XX, QX were end and income share guidance. was non-GAAP million, per for the our up earnings of

an revenue increasing million to subscription of to gross XX% of grew For XX%. last million, representing grew grew year representing versus and by revenue year, to Services a by margin last $XX.X XX% million. Gross XX% fiscal to EBITDA XX.X% XX.X% margin Professional non-GAAP the to full Adjusted up $XXX.X by $XX.X XX% million, revenue grew earnings total XX% EBITDA $X.XX $XXX.X per share versus XXXX, $X.XX $XXX.X year. profit million, to and

metrics QX XX% versus an to million, year. QX, ARR was our $XXX.X $XX.X SaaS increase Turning our for or which of of last SaaS reached million

from In a were addition, in fiscal partially our activity, line year. The retention target. Earlier XXX% results QX this reaching in year, with our XX-month our trailing growth in peak retention net rate SaaS ARR right and benefited SaaS SaaS was net this QX QX. metrics transition

quarter in fiscal ended remainder our from cash in we coming convertible of the refinancing $XXX sheet, of XXXX fiscal with $XX operations. to balance due the and debt XXXX. million million Approximately equivalents, with end up in $XXX.X million cash which increase the of was the terms the second was from primarily the In

obligations. to remaining Turning performance

total million, was $XXX.X was up year-over-year. $XXX.X of The was of representing Our up our portion on RPO year-over-year RPO a XX% for growth million, X% current basis. balance which QX to

due the As of total RPO last extra last our transition years. We had I period year These of SaaS well SaaS outsized activity, long-term X year a in to commitments noted been quarter, contract added by growth excess a impacted last has often over or years value our deals, contract longer-term reflected transition to in the total lengths, with number of RPO. so.

normalized bigger a our As total, become return a are we more RPO, contract level. in to of length seeing renewals and bookings the other non-SaaS transition average proportion

in We partially get year. into of can of guidance during in recognize difficult the the some growth we SaaS trends been declines Before strong maintenance A it be understand underlying in next that offset details term to revenue. for by business our and revenue the license the has transition.

on three, the rapidly of ARR subscription subscription details providing revenue. we SaaS provide revenue, are SaaS total insight retention three subscription introduced and embedded SaaS components term revenue; business ago, into our and our line. growing maintenance is more and years within one, few metrics, A the two, net revenue services Today, license revenue; that

The which first revenue of basis of in FY represent was XX% subscription the on with XX% SaaS the subscriptions up go-forward and 'XX of and two, subscription services services, growth growth SaaS combined a X%. company,

The revenue, in which term third license is FY legacy and by 'XX. our maintenance XX% declined

been actively have those to converting we customers SaaS. As

the You on for components years our disclose can investor will XX these deck, that is detail we annually last find forward. of on going the X the website, posted Page and overview

of term transition, to More another to As will in again it look ahead and declines partially maintenance licenses. will quarters, expect the growth by and especially X we the to growth SaaS year expect difficult, we where but ARR be very in be we over offset of SaaS the be specifically, we mid-teens. growth to XX% last for continue solid goal fiscal be 'XX, to in a rates to X year comparisons first set

last these flat due offerings, to our have environment, segment to For low macro the services seen noted and year. quarter business, would subscription growth we growth single-digit we some in this revenue that next expect again slowdown for for general we

the licenses than FY rapidly 'XX, more of term stream. the we combination to revenue even Finally, maintenance this decline in dropping and more XX%, approach by we as end expect of

range be FY to of total In million. 'XX, in expect $XXX for revenue summary, million $XXX we the to

in $XXX preliminary that million X% on QX earnings of growth the of X% outlook line $XXX in be We right range provided to and revenue representing to subscription million, with expect to the call. our we

making services services last the $XX flat in professional very would $XX professional I revenue our expectations million Finally, in FY revenue note difficult with of that would year. exceeded a to FY in for which 'XX, be expect range we comparison million, 'XX. about

year of range to improvement. of a for shares. We share diluted margin the share, to to be million representing range XX.X of $XX expect in EPS, non-GAAP the on fully continued for expect finally, adjusted EBITDA million, count $XX $X.XX based million And approximately per $X.XX a we

and of expect revenue the $XX.X $XX.X services professional total be of of to revenue revenue For subscription we million QX to million $XX.X fiscal the XXXX, million $XX range in in $XX million, range to range in the $XX.X with to million million.

million. to be of count be share We based $X.X diluted million non-GAAP in expect the to And of adjusted $X.X EPS XX.X the on to EBITDA of a range share, million to $X.XX in shares. range fully approximately $X.XX per

also view deck. in Relations on the we've business Finally, Investor Page included XX, a midterm

As continuing return transitions, contemplate into business to revenue believe we total post look and double-digit EBITDA model adjusted years can improve we while few forward growth, normalized a that to we mid-XXs. subscription a the margins

SaaS improve term by once improving in maintaining term growth to growth working be While expect maintenance range against range, summary, starts year-over-year the total maintenance through in of eliminating XX% to to declines downdraft we XX% would the rate slightly it and is license revenue FY math we the us licenses. In in 'XX, the get revenue, growth subscription subscription and range. blended from to for to and XX% mid-single-digit the XX% the services

growth. Combining profitable profitability focus steady mid-XXs side, the drive XX margin. a growth into EBITDA business our on the revenue and to we can the performance and based adjusted EBITDA path elements, of continuing these on believe can to a On by adjusted subscription over see we low midterm, margins Rule we two

call turn over Operator? the questions. any With for operator that, to I'll

Operator

Goldman question comes [Operator Adam Hotchkiss Instructions] first from Sachs. with And you

Adam Hotchkiss

those us quarter would guidance, John, just little thinking that bit out license on last you're beginning a know had what you relative quarter, couple ARR. to growth you're services fiscal relative I mid-teens expectations line, breaking in SaaS provided relative about of the guess, the you the about the a soft to useful. us way maintenance down pieces be guidance your be mentioned could just term Great. provided the quarter. And and there you quarters across for next in 'XX then XX% last three business and the might there to really break more I last the thinking you of just any how

John Ederer

Yes. Adam. Sure,

I but prepared in reiterate comments these think we I'll things. the a remarks, some just made of maybe few

I of subscription the think, off, total growth that we the terms call. with in rate line first in outlook right and number that on QX the is provided

in But the of some are the going do pretty to And be that growth on I components continue XX%. last SaaS quarters. of so, over the we X to look X first set year to SaaS comparisons challenging, goal ARR when especially a at for to particular, the ARR of

And so it, we be expect let's mid-teens. quarters half year, to first, call of first over X in rates the the growth to would

those the again, other comments In in as of we terms the out elements, laid well.

and FY decline to low business maintenance next flat growth subscription and expecting again for term So see we're single-digit includes piece, expect than then to XX% services the services that 'XX, And year. dropping on by license there, revenue, more probably next which pretty again we significantly year. services, to application in

Adam Hotchkiss

Okay. Jason, a I to on the launched you've call number then had there had conversations anything a That's you recent regulation. on through regulatory have Rainmaker, helpful. number side. of really in And relation and of are would products customer know just, out

going? that any on updates how are momentum that and Just is how customers responding to

Jason Blessing

Yes.

acted is one state now price last products So best-selling we've the transparency cross the in with was X -- in been that X, right into terms laws, year market over last of our That have customers. to actually of deal got products some of selling years.

customers. how is there state right you to price So I think important that tells transparency

released supplying XXXB program that therapies really to build that pipeline nice customers And with community. Vigilance, there called just to continue we've been last of product lighthouse year into purchasing recently our product. enhance a working the and have our also a low-income helps or couple deal and We've with customers seen XXXB,

So yesterday, show then, it to lay to groundwork Act. for was those us, regulatory just press have been wasn't definitely Reduction going 'XX today for it release, of mind, a Life that's start the issued that some Inflation two and we on fall release, is and top stars of our Sciences if the

and focus And round customers. of therapies by be impacted on the the There's our the produced by companies government going are are roughly of XX all to pharma by therapies of that that. first those virtually

to Reduction functionality Act in Inflation starting we're well. layer as So

one a Adam, a great it's So part question. of every conversations. our of it's

Operator

Your next question comes from the line Needham. with Ryan MacDonald of

Ryan MacDonald

particularly quarter. be Sciences Jason, vendor I'd had services year. you contemplated guidance in and for spending Nice curious, of think they as lowered based I'm discretionary services another as called less business the Life about in companies, services curious today, what growth the here side about and year, to see space next sort of out the over professional the look on more out business, from as of -- next the their off what's the

seeing for much guidance in contemplated you're impact 'XX? sort the if updated curious of or of all Just that any at how

Jason Blessing

then on bucket. and I the provide but especially that might is in the Yes. have to last enhanced services, that service we've customers. bucket offerings, QX services talked think quarters, so call. we have in Ryan. of vendors as a we And referencing, QX, Yes. about subscription I seen talked about And that our business some you're we mean other that couple I

two. on impact macro those some seen have We

well published has biotech that the capital. been of emerging markets financial constricting to availability impacted the segment lack and by and mid-market It's pharma been

then companies looking bit is we those application which times, are business of market drugs fewer and as as all a as are they're services, impact and their -- at are can the little So scale that there services, on services, certainly sizes things see of to in tightening enhanced see the belts, segment. And approved companies fewer discretionary. in

reflected model. segments, macro So just the it provided, it was midterm guide we there's pressure in that those bit of us, as in is a little for and as our well two

John Ederer

has bit I'll into carrying John. call It's team. the last 'XX. project to which years, different is FY doing this extremely implementation Ryan, services, backlog professional a a over dynamic been distinction little there. of of of well just couple our The bit and a team a still they're is quite

overperformance some However, FY in comparisons. setting the with up pretty difficult it's for 'XX,

harder that be year. And of so it grow to will piece the business for next

Ryan MacDonald

maybe and I the for see some appreciate midterm you. targets of through color some that providing And a as and follow-up Great walking of to for additional there, thanks those us there. John. math

OpEx, we to margin think Are P&L get adjusted talk about years? more as to already at the on level, the more Or across as you the you which the shifts over you about gross in sort next of can leverage? much targets runs Just you do can squeeze sort how expect think mix of most XX% midterm, where margin the few XX% revenue you pretty curious, out the efficient? the seeing EBITDA

John Ederer

questions. I a Yes. say No, it's And would thank Good you. few areas.

So continuous we've first dedication think a steady just growth. of profitable to very and I all, had

And so it's part culture frankly. of the here,

drive growth And year, we aim bottom targets, as our so drive incremental profit to the to also each we but line. set

some In down up line. that areas is we and P&L. leverage terms of the gross One the see on of margin the

helps our helps. there. So and help One, having mix also few business to cloud spread revenue there's dedicated us. across things different elements a The just becoming resources fully a not that

So subscription than portion the SaaS services. of is the more some profitable

and And we've total, been the as don't line. drive of marketing on to the out pick there. also R&D support have leverage some opportunity leverage as on side, able see the where so well. And operating we to many things, been margins, we And as is side some on G&A percent gross up for that where to investing expense helps increases in as our bookings a sales that growth, we've then the of products

Operator

with Craig question Stanley. next of comes Morgan Your Hettenbach

Unknown Analyst

kind QX, billings know you of of as much about going we up for anything the a anything versus coming far and this on bit how good about as on a McCoy of is to just the Can kind just about think on renewals It's as you cross-sell? And kind maybe and throughout I guidance. forward? XXXX then there think upsell quarter, customers assumes Craig.Congrats little should think John, in that talk quarter. in new XXXX, are season? about about

John Ederer

Yes.

terms remain In the you them, same. largely but on growth the of the I of overall the, kind key composition the of guess, growth, hit drivers

So bit opportunities, work new and still we're space where top as as cross-sell cross-sell, of logos work to seeing get opportunities activity activity, those internally are well transition new we done will doing upsell. Increasingly, focusing more and a more from SaaS identify, in have quite the growth focus really and And around accounts on with and upsell. we've some on XXX organized existing white two of customers. quite a to our bit the logo

be all that's And and so will 'XX again. key continue. drivers that will been work And those FY for we've

In 'XX. that terms little in we year. the of of expect billings last a larger bit some we'll with did variability SaaS would some bit FY of see and the more those again see of deals. anniversary a billings little And of Particularly cycles, I transition

Operator

with And your RBC. comes of from question next Jaluria the line Rishi

Rishi Jaluria

I the follow SaaS you're expansions up we to thinking of year, benefit through want First, next for transition, about the thinking SaaS year, some NDR, SaaS in starting I of from kind with so maybe follow-up. about off quick to the some taper NDR understand completely as be kind the terms of I've then you get as as get a still next well of you'll longer maybe both transition. And got year. How term, should next

John Ederer

with one. Sure. start that I'll

talked then in for it's metric, proceeded XXX% to the So retention a first we introduced net I this XXX% we range when each about that, beat range. think quarter. we And interesting to

benefit year gotten SaaS We last over have the transitions. from

has then target And so If I same rate XX% be net net the expect I our new look back longer to logo from points think and the as a XX% thing. metric done mid-teens In would you've seen that of revenue. target, ramp to the retention growth at and rate with X our SaaS coming growth to for remaining the up down maybe term ARR activity. in scenario, SaaS retention come

Rishi Jaluria

to then delta should on kind I flow. thinking helpful. margins between That's to you're And touch would maybe cash we And I cash conversion time? EBITDA cash of that flow? showing How be adjusted bridging it. continue Got love EBITDA over about mean kind of and free expand.

John Ederer

a to EBITDA Yes. would No, it's a flow 'XX. that, bit was And cash say in adjusted fiscal the question. off I good relative little

bit was came you If DSO our unfortunately, at actually big a it piece little up metric, large and year-over-year. A in our receivable, that September X, of a that, October look a on XX. of crept receivable accounts receivable instead

neighborhood to that have us closer do for expect think the that not results There's both in somewhere we the said expense. cash we changed forward, when Having flow. a look terms free adjusted in would So much and cash of below would expense, I that, for DSO be in $X to flow of EBITDA. capital million really we year that capital

EBITDA cash over flow free should time. adjusted trend so your to And

Operator

the line Mattiacci with of from question next Craig-Hallum. comes Nick Your

Nicholas Mattiacci

on for Chad Nick Bennett. is This

or could to about to if if the So N's fundamentally talk place? needs your view what compliance a Jason, great Model about right more regulatory there's happen just it just of little it opportunity sales would about be internationally. bit you infrastructure you anything Can talk outside is just U.S. and those from capture maybe standpoint? a about different the markets, marketing this Or in getting opportunity? And of

Jason Blessing

A little everything on, touched Nick. you bit of

really So that government U.S. level pharma how of unique. It's involvement. only this of are has the companies regulated market market the complexity and the in all, is and first world

are like as through ministries look bought in tendering Europe and products health basically pricing five they're example, where pharma a a through we agreements it, pharma willing central of, The the Europe, call little price in auction. countries a process, bit As is be lot of in an to also different in pay countries, we'll companies, average them. the negotiate might that the look

and state that in advancement care their similar similar are So health of GDP systems.

is priced different. side. plugging then that products pricing -- reference vertically, bespoke the are price they're described. they're country-based functionally of and we that the as would I how that And are helps complex two describe manage specific have pharma do into I a pricing, bought, procurement global So how tender for pharma the And that actually product tailored all complete management

great team products. been but services, And headquartered some And very team products might Europe, operations selectively over we servicing teams in account a do that then last collaborates strong pharma products, we measured product see in our with the So and in we've that U.S. being about global professional investment, years, we that, as company and be have also talked sells. some in consulting, invest It's this, have a sales with our started of even solution those people team capacity, of theater. in to couple terms that Europe.

So excited and about there, operation. Europe. selectively team we got that invest excited as mighty us about yes, a move theater I our of to I'm see there. products we've forward, in to continue small but continuing I'm And

Nicholas Mattiacci

it. vertical. And any what on in seeing Tech High comments then just the you're Got

macro Just just expansion, for as or that performing expectations? logo far how call as deal activity, relative either to any impacts is to And new your vertical? out that

Jason Blessing

seen products that. often when about in tangible I line will that top kind said, and -- bottom that High combat issues, the and projects Yes. leaders, between some have and and our market of talked we've existing I customer excuse our me, in mean supply inflation leaders pressure, COVID the interest as over rates and in do years results, to of or have their then aperture widening couple last look Tech, talked segment. That chain we've and line inflation, about we market rising rising at invest that

our last thoughtfully years. of invest over the couple base So customer we've seen

at attendance saw we've encouraging in started see nice been Sciences me really to on Life have event Tech from a frankly, new what's pipeline. We impact, and our think a both year Tech. to logo, High new pickup I in is had Rainmaker, we and logo that nice this High

new I'm see as 'XX, as green to fiscal well. come pretty into So we the It's our excited in been general. in High about pickup Tech logo encouraging in shoots a

Operator

Your VanVliet BTIG. next question the line from comes Matt with of

Matthew VanVliet

those get sort move that just the the couple look upsell over but experiencing you're next to quarters? there? -- kind to cross-sell pretty the the I holding of guess sell you far you here to cloud, customers as how do generally, any of fatigue at for a SaaS of like pipeline through Maybe off opportunities along gone activity any maybe you feel into have you process on arduous base. the existing would from some expansion go pretty or the transition, back in of Are

Jason Blessing

really We've good Matt. of talked to a a where transition. a I've We've on take little honest. they'll both earnings customers. calls, be SaaS seen bit these their perfectly That's question, about products part examples of as new some of seen

so many products take customers and worked entire effectively year, to some actually that's in I'm building are about going basically transitions projects. new us base excited sell I us. that products slower me, well the us shelf new potentially ready sell to quarters we've space, for today because customer gives new have the so geographies of back last up sell over go. a to to go certainly into that next are products wrapping our and the we mean, been couple our had why the And for to steady so and They've and through that's that in allows on respects, We in both divisions, state. And to SaaS white

it's bring and to I products new new think getting base I our question, and SaaS and described the innovation know of going I'm customer great the value. compete it, to So not having about, to transitions with and I see where customers, back as some they're really excited an insightful those really

Matthew VanVliet

two the One, there. areas. And go-to-market leaning migrate of spaces add in any as sort more need on team, into people terms can you sort the some can All there count. certain then of those side, support moving in you And SaaS fill wind then do of right. type over-all leverage R&D parts or on secondarily, Very forward that feel helpful. of type how guess capacity transition, down forward? and on you like you head in the I to role you

Jason Blessing

I'll Yes, one that's a question. that great take well. as

XX%. about So sales as growing at marketing and has we've continued to revenue been hold

the early the was that have on, particularly over the customer and base. feather that really early And had we count go-to-market transition implied initiatives, of given on in side. The COVID, last on, hiring the focus that focus in is new the couple to years, in head continued SaaS we on so

And I started last really, that. of market really buyer's us hiring into bias drive team new folks allowed good to couple talent mean ramped. year, rotate what's say, about capable would nicely excited got team. the more that's logo we think and team. exit we really our the logo. on of that's some towards early years. Starting SaaS that on year with I advantage, transitions over it's sell to and very I a And think cross year, We took the new last I'm a I in

sit on go we say, would today, market. as we to I here properly So resource

flat, transitions, second But is your and engineering. products then been been And yet, seasonal engineering. supporting great flattish on on also and releasing SaaS question part a releases new products. And the building we've one essentially of we've new also

that exclusively two a of year, all couple as year, new code engineering a seasonal well from capacity capacity coming repurposing, so as ability And of legacy supporting and historically. lines products releases build was to almost a do our that on-prem is

Operator

comes line Samad question next Jefferies. Your with Instructions] from [Operator the of Samana

Unknown Analyst

incrementally actually Maybe back factors ] discussed quarter is way then and for a macro the calendar step from quarter And that now that quarter. remarks, season, heard how on called through and good impacts. kind was again. you third elongated earnings I your Billy them [ big discussed last macro Samad. we're know it In cycles. companies of of fourth have macro of picture lot sales worsened fiscal a in factors This taking the have prepared going Fitzsimmons out a or we've some

factors, for lot we've for if to macro for has at, of curious So it is get couple call trying incrementally what changed deteriorated had you. And different a anything, are them and of reasons. there, I'm thoughts companies a your

specific SMB some verticals some So seeing calling are out are weakness, got weaker.

Some Model and are seeing very N an specific some obviously company new are enterprise-oriented with verticals. lower is logo seeing sales activity, elongated cycles,

by be incrementally you can from of minimal, trying weeks in curious current If the just get in hearing those sense on environment you macro have So if your customers to months. been comment largest guys' chance and changes then things. recent what you're seeing or

Jason Blessing

Yes. It's Billy. good question, a

potentially customers about on discretionary So especially followed spend things macro bit think QX, be making could perceived year, headwinds again, that as I things didn't some more back talked not I we potentially up where on little QX, in reflect remember about QX the the -- talked QX. that vertical sit a a here I the the I discretionary that scrutiny, And if company, today, QX as you on is getting and asked which are big lots of to big say about got they're continuing we've -- pharma, And gone largest and invest. QX to going our see as part deteriorated, that revenue now, in from our with similar cut QX, of QX budgets. But on a was to of we can you as customers, on in our little thing. -- with correctly, We've had margin. same trend projects is professional would call. I I think If right a we services

to our that part yes, healthy. be So seems of ultimately constituents is which pretty core market, the

are of customers to and nice response deals prospects in are in to attend the market little existing about in we talked Rainmaker And progress see we seeing I As to did High our pickup forward in be continued a of a that group a Tech, bit those question, as leaders investing. High seem have last the Tech pipeline.

I others mean we these trends look it. as our I'm in our excited fiscal 'XX, pretty forward have I of have it's So some But think stabilized, that certainly seen into business, yes, about we reported.

Unknown Analyst

sneak I one more. And could Great. if in

Looking in ahead? monetizing years think at product and enhancements, quarters some new of the and newer release, these guys couple highlighted press you path releases the how we about to should a of the solutions

Jason Blessing

Yes.

that is pipeline because trying Inflation existing this interest, know enhance it star to going we've and of us has where Reduction to impact that's fully terms that's the earlier, in another about talked the product for eventually they our questions to mean, in and there. one customers drives that in develop. still I So year. We're there's the been with And working people one actually the compliant. products as one to been have assess Act, to a be door but, a of response to a I they're market further XXXB few of new in

our that talked front then portal, Tech So demand lot for on side High and the for certainly customers is a drives Channel about of the that and us. And prospects. center we definitely Collaboration

things excited about new just people products on really So our last not but we've are the over response road it. to the those built that releases, and that the the and there, are year map,

it's work on of our out being of out partner SaaS side the to see great things Rainmaker, coming new with able coming of the Model and think us I is heard customer I one and products to Really other with us consistent build from innovate. transitions. to N

these road map some we're of things excited new the I'm So products. the about hearing on and customers

Operator

line Your with Peterson of next from question comes Brian the Raymond James.

Johnathan McCary

for This McCary on is Brian. Johnathan

are existing be a Reduction about you kind question. do it's obviously I'm can of you So soon trying you just regulation? like in out I legislation. related you understand, come Or help to that sweeping that Act, SKUs of last kind me to kind think and integrating to just think just to there? And could you that the then platform that maybe come just the suggested Thinking -- functionality, expecting come is of of Inflation any then revenue? how the to additional contributor customers simply meaningful door like

Jason Blessing

see is contemplate thing to being between to to government changes existing you the -- has as have of to going new belief that's probably the new get manufacturer so going to calculation for some that's how some implementing been think is release. made current that least that's we as engine with the enhancements And because how Well, and address with to understand catalyst customers Inflation to the release now, now and exactly Where our product's terms going still core negotiations seen, Inflation And of of Act that worked the at and model have track. The driving certainly major out right we this some the Act, functionality just Cloud Reduction further fields, in Model we get compliance latest we the now largest are of a some to our data issue. major how Reduction our functionality. What calculations in enhancements core the and to N data work. it's Act It's the be the latest shipped, to implemented. the the functionality. pretty that we to this we're it's going is, And work. it

first top are Act top sellers in XX really going version the the at is Reduction U.S. that sellers of to targeted The therapies maybe Inflation be XX

be industry tend going wide views sweeping some but definitely start, be definition, And me, just overall the it's to demand drives excuse for I companies, to much of a more us. which wide ranging, -- as eventually the so by those, this and think larger pharma

Operator

of Your with next Walravens question Patrick comes from Securities. the line JMP

Patrick Walravens

Great. And transition, it's this the end really Jason. of to that getting great you're

sales your quarter, So overall, I meet forces to was you attainment things point the realize quarter trying strong? -- just But strong. described of a sales it there's going mean I'm this a being expectations? of ton view, from Or as I production the on.

Jason Blessing

as of of had SaaS combination some end to these year, as contribution out It good closing relative logos, from a did. and cross-sell, quarter We well a the year. overall, transitions especially a upsell, the nice new full saw we to

I the So with happy was the team ended how year. yes,

Patrick Walravens

Okay. Great. John, for because getting this And Great. then, you just maybe I'm question.

were dynamic good, was why below sales were And What's there? RPO the so why team expecting? billings people the if is an what yes, -- the

John Ederer

guess might in for RPO... to me models. at total of some and the people's So that to expectations But look hard were have if speak it's there you our I out been what

Patrick Walravens

the just mean consensus... I

John Ederer

Yes.

and on that if a that basis, are difficult occurred some you sequentially, of more look facing to you that reflect some did the When transition at of activity some year-over-year at up comparisons last Jason just the year. move SaaS So activity you the sales they of due it look those, would end at described.

Patrick Walravens

this development in of your you million of mentioned I quarter then $X a and script, then to corporate money. $X Okay. next million it's quarter a lot initiative? expenses related And mean

us what you tell about this? So can

John Ederer

guidance of for call some particular. willing variance EBITDA whole well but just the in we're terms did as not want stands on around to a unfortunately, there's to we that to providing more as, context that, Well, the adjusted in it guidance, lot disclose where out QX QX

So a that lot talk unfortunately, on we about that there's not one. can more whole

Operator

no Thank there for turn And very remarks. you questions. further the to much. I'll back Jason closing Blessing are call

Jason Blessing

and clearly once thank execution, operator, everyone, our thank which SaaS post customers us to are is everyone illustrated today. solid looking today. joining like for this to you to joining partnership and world, thank our you, our transition QX. again their value you, in thank for Thank by employees also really performance together. for hard I'd forward who work us and where Have I'd a And can to we great innovate again, like night.

Operator

for that We your And today. the does disconnect conclude thank your call conference you you please and for lines. that participation ask

Model N (MODN) 9 Nov 232023 Q4 Earnings call transcript