AMSWA - Earnings call transcript Q1 2021 | Logility Supply Chain Solutions, Inc.

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Operator

Good day, everyone, and welcome to today's First Quarter Fiscal Year 2021 Financial Results. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] And it is now my pleasure to turn today's conference over to Vincent Klinges, Chief Financial Officer of American Software. Please go ahead.

Vincent Klinges

Ryland. you, Thank and XXXX everyone, American first Software's Good conference welcome call. fiscal earnings quarter afternoon, to

limited turn will over competitive in statements. number be the pressures market and Any could On our with will Such to light contain call for the of irregular remarks. I like our acceptance call by American changes At rate Future of results products could regarding, provide as and the predicted and actual to results prove actual information these the those underlying and forward-looking cause statements of by, other be from our opening materially there are some and materially such forward-looking developments will services, for Software. business the like and number of this from President statements uncertainty are products time, call and risks some I’d accurate. assurance conditions, and be of other growth uncertainties, Allan statements uncertainties, and differ that market But speak effect of made in, among Allan unpredictable of statements, to me are review forward-looking control. contemplated that cannot but is forward-looking to only are this not include pricing revenues. or timely products a date. these remind the strategy. quantified including and based expectations first on the to and differ and forth and pattern competitive you may availability I this remarks which – These or strategy statements forward-looking numbers. will Dow, largely opening could to Allan There set factors things, then and subject general Allan I’d and no risks CEO on of In and factors call. the conference economic this are that of the the to, of growth those our and beyond anticipated services,

Allan Dow

Thank you, Vince.

As expectations, But to individuals, to been want initial encourage have our that stay continues this we companies and impacted. we strong. families everyone adversely pandemic beyond know

to We in of want will work diversity organization, as on our our prevail. team express forward and workers first all within all company, responders gratitude we and rights communities. times. behalf our for these all who our ecosystem I to the of Personally, for tirelessly within pushing Furthermore, to ensure in our power us extraordinary and the and that efforts the and healthy to safe are around continue equal of keep our an leverage frontline teammates

impact we an funds. bigger Our is can explore ways in continuing community invest service committee have monitory that personal and our contributions even communities time, as we to matching corporate

operational ongoing We support remained team will results, organization challenges forward the of the customers, community. our make hope and all. push our throughout global customer hold bringing will communities, part as our as to of pleased later pandemic type any existing In find first rather sooner customers to we a how service community today’s faced But efforts our our cannot virtual am implementations, violence the focused regards into with on and our has remained our resolution place for the society. to crisis. a companies serving they I to with of navigated new accelerating path in peaceful that this We open quarter fully needs in condone world than the better do to

and demand our bricks have growth for high staggering retail. the to from spectrum with on reopening new ends to customers closing managed create products of inspirational and continue at as they We managing of mortar explosive both the stories

to virtual we as the refine continue operational the efficiency every activities new We to business in world. our of area gain

strong a using services customers staycations took prior some quarter, our a experienced team much and in short in our needed as get Following members pronounced we and trips performance projects the a to seasonal slowdown more break away.

backlog and However, is grow. continuing our to implementation remains strong

work services remains Our XXX% virtual.

holiday are rebound backlog nature the seeing and higher have So slow of end Based very we traditionally and than the year services be our schools in a trend to project the of of and calendar second year after through quarter expect QX as activities, activities strong we working anticipate reopened seasonal to the the fiscal work. back revenue returned work folks rapid period. have way project to on and our

strategy are achievement. focus recurring first is our a a cloud paying of services maintenance represents on of That’s that approximately revenue We pleased off total XX% milestone with to stream now cloud revenues. the in see

the the prior in first for annual was revenue grew the services quarter cloud over subscription period year Our and contract value growth XX% XX%. year-over-year in

start which our churn in sales percentage revenue the in to the had strong our economic that are hardships. as into was we recurring we quarter, year. subscription related in saw so, expect the countries. five people We strong opportunities subscription trending summer. we the several future preference completed five confidence the in to of and of fee us cycles partially to an first customers the growth a the offset of will less Sales see transactions quarter delivered on progressed first uptick and lengthen license had of in gross as transactions an size fiscal continue but ACV Even growth facing strong in welcomed or by upward in the trend number to access we new and continuing basis, on a based higher we second half contracts. activity We customers leaving is for We picking back the pipelines, and both the expected, see to up

will help organization our drive During the our who three first critical quarter, to new we added growth. leaders

research Kevin brings McInturff research. were team lead have we a learning pleased our development on continuous efforts. perspective fresh and innovation value-driven Kevin development First, methodologies, to approach to agile and join our to a

for lead reseller wealth and channel Alex the in to growth alliances partner a Alex Price through driving brings our joined channel. of experience Second, partner our Americas.

excited least, So but supply a have we sales. And Runnels Alex Sean last has of joined is marketing marketing to Sean brings professional. not global us our to on and our our help team efforts. career a to accelerate wealth are global chain experience us lead

expand of material globe impact have the objectives. Sean confidence will great our have achieving the company help a awareness and growth our We across brand that on

an the where CEO-driven transformational chain radically transition of the adopt improve our CFO-driven our to supply we the a platform see supply speed forward, are see customers projects a chain decision to continuing uptick in Looking quality as from to and the to for achieve needed new In in resiliency new deliver in making summary, agility value that strive and this economy. to for we are exceptional world. pleased continued allows we this as them thrive our progress success by to digital our customers we

We our making as expand and will to introduce continue more look on our new and customers focus to innovative relationship we successful services.

our turn over benefits be years most. call revenue the can need and provide when We to in are we Vince both confident proud who the the it are to results. financial and ahead to incremental they time will will time, our Vince? the customers to profitability in At this details I that on delivering continue grow

Vincent Klinges

in total were $X.X in X.X XX% million XXXX the the fiscal year, million to services annual revenues quarter, compared the to fees again the as decreased while $X.X quarter Comparing compared to the $XX.X for showing the The the same revenues current of increased million period compared last last approximately first last million, same by quarter the to prior contract $XX.X increased Allan. $XX.X period million to cloud. year, to same software $X.X to million as year. year. in period to for XX% license XX% Thanks, last period to Subscription the year, $XX.X compared million value transition to cloud same

As we seasonally our did upward rates trend me, our ACV the new as a by experienced financial loss encouraging sales the negatively We outbreak. challenges of to excuse up mentioned, more significant margin churn moderating remain seen that approach than reflect and sign increased by back back our levels COVID-XX with several $X basis, and on activity Allan optimistic million, given an during on among in pandemic forward. ramping move we average half that will the we a prior reported ACV quarter gross slowest was trajectory an year. On that so the fiscal gross ACV basis, customers our of our impacted

offset Looking progressed at Professional that decrease management that unit year prior XX% to increase but employees customers of note We due work. implementations by project of to a $XX.X of compared XX% more timing the anticipated $X.X to chain of chain robust, in greater our partially decreased result IT and supply as vacation and our a projects supply X% slowly a remains in of number management million our as business than was time. consulting million that backlog Services, took several

lower we million amount rate $XX.X travel new million, to zero. to normal of through license recognized pass reimbursements Additionally, decreased and perpetual had restrictions on $XX revenues reduced off also X% levels to historically the the Maintenance fall of stemming revenues. compared from

year. the and compared is total our of streams And in trend the cloud were to same period Taking for in combined quarter to So this overall cloud believe revenue recurring percentage XX% in XX% year. the higher a maintenance current gross revenues services transition compared a at last current period of revenue XX% model our revenues up we was we same period last costs, the XX% in to as recurring look margin the

XX% compared that’s was to and period the quarter year margin the fee XX% license license same revenue. due lower fee Our last in for current primarily to

the of in the Cap revenue amortization gross year the Cap to been XX% included Software amortization XX% in non-cash compared when to and same margin allocation of the last same of $XXX,XXX the approximately increase have million compares that in primarily due and subscription last would XX% margins of approximately increased of the to fee which subscription XX% subscription Our Software. in period and you year, quarter, period that’s $X to exclude

same decreased due higher IT to as to margin margin of our XX% in mix revenues the XX% from of unit coming lower that’s well seasonality. chain unit, business lower last GPM to period year supply staffing service professional utilization a due as our Our to and management compared services

XX% was period. for current and year margin prior the maintenance Our

the of the XX% expenses, operating same at year. XX% compared period total last total R&D period expenses the gross revenues Looking for to in were

were percentage As headcount. expenses revenue, that’s lower XX% sales XX% and higher to year and increased marketing same offset in primarily of current to last of salary period marketing a due for partially by the travel revenues and costs, from compared the expense period

of were revenues XX% in the for period current XX% the expenses to year. G&A last compared Our total period same

million this million to the which compared Adjusted $X.X excludes to Our quarter EBITDA for million in operating XX% quarter to compensation last income last the year. $X.X million increased decreased to stock-based the same compared year. same period period $X.X to XX% $X.X current

GAAP to Our income net increased $X XX% million.

diluted share. Adjusted income diluted Our or current of the period earnings net income per $X.XX for of $X.XX compared X.X to X.X. per net earnings share was

share the And same period adjusted the quarter that Our per compensation to $X.XX exclude stock-based expenses intangible adjusted and and of numbers and X.X earnings expense. current last for diluted acquisitions year. earnings adjusted per in diluted to these share amortization of of related compares $X.XX

quarter compared in period this approximately for quarter, same were total XX% Our this international the revenues of year. XX% last to revenues

million increased of approximately current financial investments balance remains period cash quarter, million $XX in $X million our of And equity receivable sheet, balance we of $X Looking position the shareholder unbilled during the we year. $XXX company’s and sheet, the million, deferred accounts billed million, Other the strong at which of of $X.X same revenues and paid million, last of $XX.X with $XX.X of aspects dividends. million. had

same ratio July as XX, year. the compared to XXXX, current to increased X.X Our last X.X of period

turn sales the due to to XX, outstanding the payments the XX to to current At XXXX time, of pandemic. like XX and over I’d July due compares some that days delays as days quarter call same was period in for days Our to year questions. the that’s this in and last

Operator

Matt ahead. go Please [Operator a will Instructions] question from Pfau. We take

Matt Pfau

detail Hey of questions. if wondering you more guys. pipeline my how Thanks bit just for Allan, I the could has taking give trended. was us sort little on a

is there but a in and vacations, like So, bit things if then commentary period a March to there due then now April a late was, I up and it the back maybe last go trended of back improved slowdown and slow seems maybe again. quarter, things was to

of you us confidence So, more your maybe and detail back fiscal how pipeline little just what give going gives the a is year? then half into trending the on bit

Allan Dow

Yes. good Matt, and you first of for joining all, us thank question.

We grow. see are to continuing pipeline the

went at high over whole few just the are looked across we the to with peaking quarters were maybe time a we period. last I like, a seven it trending ago days several team where we see to up I back fact, and In point think quarters that

in the So, size the we dollar see but of transactions volume we as total as volume I feel value pipeline the average transaction only – good about earlier of and do commentary, up mentioned value transactions, of that. And number the the the the well. not way, that of was the the total

bodes it the So well for future.

about We that. are good feeling

the feeling and the pick in activity of and attributed their are United that back as up did up. really And seen the well. just southern schools of the couple can the across European activity least to fact also periods and States that volume back of holiday has really are weeks, at communities of picked reopen be to We good people starting only just and from many it part come back are the last we’ve the

feel pipeline we good So, we are contract and in about a actively of number it. is discussions. growing engaged The

Matt Pfau

Got base impacted ACV exposure mentioned a of in customer CPG, and are doing base your as performance within I that was broad obviously, range few the think of you customer customers and and is about retail terms churned businesses that there growth. that it. And in their the quarter how there then, to

the things going I over quarters? figure but guess, the is at you past of guess, this normal sense still customer Are churn your this a obviously the, across end base unknown your than and about now? out As few for macro, we’ve to had kind of few higher difficult more we persist predict Or what’s as look that the to here? given we quarters I

Allan Dow

that an up very those last and us about engaged personally quarter. look from We bit But that been particularly not we trend. as at that It we anomaly risk at all last the trouble bigger that that dialogue that customers are communicating we with. see quarter, some quarter communicating little were history. think ones The are it’s I the of Vince or who have on even was a and and to into – this a normal have than right think as in little those quarter. forward back identify we those this did was

pattern that in persist. it. it progressing the don’t that we several can’t pandemic – what But the how So got new But long industries think are will this we is even companies, are with just a us. of them and will run that are predict kind of impact hurt the on will projects actually strong we’ve have

we that engaging to activity, given prior their pay will of they are feel their and So, that and stay good continue that bills commitments in kind abide strong and by they invest.

that we point. there, think Matt, we anomalies at don’t or we worry out are But few surprise see trend two. that we should anyone a is worried about and or another a get it’s this about could course, So, there of catastrophic

Matt Pfau

question announced what it. you new some a Got Last more of coincidence opportunistic sort there? Is it anything obviously drove past detail me, call that. of number quarter. this Maybe sort hires of from a on , to out just

Allan Dow

the three my certainly in earlier it’s commentary. that mentioned Well, I

and world. a about had we people way at about in while cause a right our – around CEO-driven CFO-driven our strategic really today being nature. are look customers our term as to would that took a conditions market strategy find time the Two towards and I new ago shift of about as the I a longer positively. drive and replacements sure that over crack us Vince’s risk effectively very folks know were at I the help even managing CFOs of that can up. in advantage we perspective of And very new take chain we’ve believe and of cost us opportunity. couple a face making I can operate CEOs advance vacated a that as those centric last mitigate virtual us in We and out smile and on very, more cash commented versus digital supply all a And that we as we thinking bringing seen are this And look there that cutting result service very significant on and positions that and actually. years are different focused customer a that’s The

help see people feel market investments that a us pursue navigate for that to and good right we So, new are the hired make this will we people available it. very three those The were We’ll we’ve that in strategic. us. But effective particular more much aggressive opportunistic in other as about way. and continue are through

Matt Pfau

Great. I appreciate guys. Thanks for taking my it. questions

Allan Dow

it. nice to got with And us. You for again, Thanks joining Matt. chat you

Operator

question will And from ahead. Zach a go take Cummins. we Please

line Your open. is

Zach Cummins

Allan Hi, you well thanks It how towards and seems you like and good QX, the a taking questions. for Allan, month? period now can of back sense here of August? in as afternoon, us are but into give a deals give progressing so us you is sense my Vince. a the performance of ran slow last you all far really can Hope through both half the of

Allan Dow

was need and were it quarter. had it. stressful it’s you end on I it’s I Happy of should when am hit and look as to And a customers working – more flow which take and maybe engagements, hit tough, that back of the numbers were of home type break helped and vacation we and was the larger did difference, traditional saw joining I well good Zach, larger working quite in They summer if to their in I not. get. us. the full all first have at we as this look difficult level are it’s folks all More Yes. to process the from more you getting run more where that are reality members, pretty start and team a that people is then glad very Zach. We a QX, strategic approval pretty still be achieve good higher pretty that thank anyway coordinating we do didn’t. saw felt projects. people our the involved the when we season then putting did in they take They was just amongst thought But some – of that, was and making pandemic it fingers them. that Again, really think But stayed for a on as we early to anticipated our we QX I approval. first well became it transformational the that that - swing. guess, decision the I transactions kind us like surprising. into the

Now they are back.

we we’ve time that opportunities now at long plus dollar had the my very right pursuing maybe million company. are in very, more have since a We here than engagement

and it’s on So we And feel it. are are what’s people good just, about happening. working back those

Zach Cummins

That’s a more uptick quarters? the of some sort few churn that quarter, at color the us aspects this that I provide the challenging any or this any sense specific terms can over of next of the saw we look you maybe give helpful. as related of then, vertical model Understood. to you in And around to was mean,

Allan Dow

financial is one. And or as we’re is furloughed condition handful don’t We we a use number an there that in Yes. have to because of of of financial in to to just their if have a of point no unable customers people the cases which well. couple they where think related having I with continue people a, unfortunately application, just they had

year the majority attention So, – next or they been the what more of devastated which their they importantly they were seasons most has by People and them three them turned towards quite most pandemic. And apparel this in of now holiday two period they missed looking are frankly. salvage can for were, frankly. just part, out the space of quite have to

infrastructure marketplace one but, kind didn’t So, they strategic there particular day-to-day application. ones, that our as investments consumer slow the operational in infrastructure. too It the there, too part, some was fell strategic apart of apparel-centric. that work for majority And struggling struggling. the have just company a resources major were but of more was also goods there. was infrastructure, They in some most the of down. to more and on this But electronic were were There one

Zach Cummins

this forward. Understood. That’s move at as existing then, over from everybody guess, and And base to approach the any a to interest uptick helpful. moving cloud potentially removing large remote – model more you the I having with seen hybrid Have of in kind pace? faster they

Allan Dow

Yes.

We observation. seeing good it’s are a it. Zach

themselves we’ve to there. to and we out mitigate – stated are trying in that operating the people and direction. before, systems risk their want over more force We of aggressively seeing people more that are as not push We’ve

But level express accommodate across in our interest very working what can better are collaboratively and provide they will for are be got as can sense makes embracing We them customer. it. at we a teams pool that more our that, We of it. effective service. that and we resources We’ve shifting

we an uptick continue. that I think So, we’ll seeing that area trend see and in are

Zach Cummins

just then, final And question me. for Understood.

projects But margin that second we seems back from as like remote forward? that pause moving margin should pass with forward about model online. the a many like half through traveling. chain just going comes sounds think it revenue a about on vacation. brief like year, of group fully lose business? And how see you more But may bit On it are to that with from should move these of of point, a better people It taking the were we services utilizing that little we profile overall professional the how a team, many the supply towards you of thinking management sounds projects those And are now.

Allan Dow

Yes.

it. pretty rate I the then back knowledge help valuable help our – about the work margin itself We products way chose by that dramatically pass resources have see specifically. and think as and revenue our these will with will customers and through we that are pick the up the utilization industry, deep about these and mean, operate systems picked the up utilization up, about that I has rate picks

So, it short ago we and have on But the out, rates. the hang see weeks impacts utilization few to when go of don’t but and for through back as on are we we of we people they through to half – be and them on and half went year, can an resources don’t exercise you looked fill what margin back on just caught a our blip think vacation, might that our the we out enough that today in year. back the the hit a

So, of we’ll fiscal in progress fulfill reassessment needs staffing to of as making sure at the got that holiday as be the the half fall, second we period we’ve a and kind adequate the year. through looking of our the resources

a So, Onboarding takes get we to much little sometimes to in mean, it’s months. us to tough, them it a few it but I and weeks stronger usually them will think months, a it you fully get be utilized someone get is starting a much few when billable, takes better few utilization. a be

year, and when So, said get the again shape that’s on hit the then as seasonality strong in the going and we third that, we should real good why I utilization be then, quarter be in and is well. a to you bit of fiscal the both revenue do I a half blip of latter think but

Zach Cummins

for here. as helpful. luck from again forward of That’s thanks we and move best taking questions Well, my Understood.

Allan Dow

us. joining for thanks Zach,

Operator

have do not further at time. we any questions this And

Allan Dow

all the us catching we you Alright. your Well, look up and this you attention for days ahead. and thank appreciate of to with forward again joining many in afternoon

good you. a have So, Thank evening.

Operator

your Thank today's This participation. program. for concludes you

disconnect at may time. You any

Logility Supply Chain Solutions (LGTY) 26 Aug 202021 Q1 Earnings call transcript