AMSWA - Earnings call 2 2024 | Logility Supply Chain Solutions, Inc.

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Operator

Good day, everyone, and welcome to today's Second Quarter Fiscal Year 2024 Preliminary Earnings Results Call. [Operator Instructions] Please note that this call is being recorded, and that I will be standing by should you need any assistance.

It is now my pleasure to turn today's program over to Vincent Klinges, CFO of American Software.

Vincent Klinges

Thank you, Chelsea, and good afternoon, everyone, and welcome to American Software's Second Quarter of Fiscal 2024 Earnings Call.

On the call with me is Allan Dow, President and CEO of American Software. opening then some numbers. overview provide will remarks, I'll and the Allan

predicted business and strategy. first, This only our are statements largely a statements, things, uncertainties, statement. safe materially as set regarding, some results cannot on the be and call other and But These control. harbor based forward-looking differ of conference and this of beyond forward-looking our forward-looking are developments risks statements are such or number subject Any forward-looking from and may date. contain among of our forth strategy speak growth actual by statements including to could in, statements. Future quantified or which those contemplated underlying expectations

availability actual these There made are economic rate not in no and results and forward-looking market competitive by be acceptance of the those conditions, will this revenues. risks services, light and other materially can on limited and the uncertainty there for growth our unpredictable a include, statements accurate. anticipated from to, number differ of but and cause general Such the of could the pressures to irregular factors competitive In products call. and market are services, and pricing of pattern products these effect assurance of to the that uncertainties, be the timely changes factors and of information products that and prove

remarks. will turn time, I over Allan our At call this to for the opening

H. Dow

joining today. Good Thank everyone, for afternoon, you, us and you thank Vince.

term. for expansion foundation respects, quarter believe was laid we over sustained the and second in growth many margin and Our transformative the long we've

generative of developed system, AI-native an demand disruptive startup the and SaaS leveraging we enrich a First Garvis, to experience. completed user acquisition forecasting foremost, the AI that

has have the Demand Logility the product platform. rebranded which the AI+, Garvis Demand replaced current within as We

already platform statistical we Plus that believe deployments the next-generation supply decades that know, intelligence of XX forecasting the invented chain Demand is the over new world. implementations, of planning. validated a of chain many package consumer companies paradigm As AI technology with Demand you including largest supply X goods been has will some Logility launch ago and at in The

our completed Demand of customers, existing the contracts acquisition, to upgrading we is signed With particularly strategic DAI a expect client at clients now large AI who new of the cloud our Plus, and for account DAI to deployments we our acquisition to of conversions of the Since dozen increase inclusion the pace of within existing accelerate we've community. level, Plus, including new cloud one Plus.

to were making. and the pleased Subsequent sale business, second services have we transportation In IT consulting we quarters, opportunities the fit of strategic sold our find to benefit we the While from focused existing supply assets chain also planning for evaluated several intently are investments we and the on we mid-September. extend our of we Proven business. Method we've fully a our for capabilities identifying the to and also quarter ensure breadth the can end, depth to past in our quarter, staffing completed

These and growth supply enhancing while margin results, profile. being and divestitures the our chain in our reduce on pure-play leader focus will our a align volatility software

QX active provide shareholder value, on Vince some As implemented repurchase in actions with this create we're details we've we success. taken commentary. believe further will share back will program, substantial buying the his significant and a in we during also shares

the current our outlook quarter for Next, and year. update I'd results an like on to review our second provide

as Our reflected slower second quarter results experienced the past over we year. activity

strength more we fiscal resulting the delayed the akin in prior our However, bookings year. we're across encouraged the to to of fourth line, see several finally in opportunities saw performance quarter previously finish

reported our the economic our improvement late the our remain apparent closed results for that reflected sequential optimistic deals uptick is of quarter, We our the in in adapting headwinds cautiously delayed not but building are seasonally half. backlog. many this QX we quarter second to investments upon As their in is prospects and and in forward readily that our clients during the in have progress look our to the past stronger technology year, over

to pipeline Our expanded solution. as we has and solid remains our market AI new continue awareness of increase demand

we uncertainty first back As we start in on ongoing economic to our look the to slow usual our the performance, half had due year seasonality. a

the QX, in but recognize. closures expected sales improved revenue cadence Our of the limited deal the as to expected timing we

our outlook half of on guidance actual revised divestitures, real acquisition X the XXXX, run and Our fiscal the for rate the results. of Garvis business impact based first combined reflects therefore, the

fiscal now million, be between our we between adjusted and million and $XX between recurring million total XXXX, to $XX to and be to be $XX million expect and revenue EBITDA million For $XXX $XX.X revenue million. $XXX

update provide Finally, our brief other discussed I call. quarter's a wanted on to during we last initiatives

increase market longer market the interest estate has property. in real in the dampened that we the revisit a buyer of once headquarters the high, stabilize. topic are and Although rates commercial sale our We'll interest conditions no pursuing was

previously dual-class various B end options engaged our to by goal the Finally, we stated. shareholder remain regarding with consider of of process completing the our structure, with Class fiscal year, this our as

I'll details Vince, time, the our provide to who results. will on this turn At financial over call

Vincent Klinges

Allan. Thanks,

note Method Method, IT that our our the want Proven of as to detail, operations. the statements unit, to show business financial due recast I our been discuss consulting have divestiture the to results Before discontinued I in more Proven

sale million closing for in the of it and revenue of to quarter generated $X.X generated in $X.X of the of EBITDA EBITDA. 'XX, second the adjusted Method million the In million $X.X Proven $XX,XXX half the and year And first year 'XX, September. revenue prior in adjusted in fiscal the in

periods on point. Our discussion and will continuing of the comparable from current operations this our only focus

period of revenues the to million same same total decreased last the million $XX.X to in So year. $XX.X period X% compared

revenue approximately reoccur in Recall quarter. we in contributed that from decrease sequential from prior increased Our X% along the with QX, catch-up million not fees. $XX.X That, declined churn, quarterly that subscription benefited but fees did in in QX. a our subscription normal million year-over-year to to slightly $X.X

much our closing in performance unable the it. improved the in QX many much with was quarter with bookings mentioned, the to revenue prior were associated late we Allan recognize As however, the of deals quarter, of from

see We our growth sequential this expect subscription fees to in quarter.

Our to license fee came the revenue in $X.X $X.X year in million million at period. compared prior

sales services our the other SI over we ago million Our revenues a and professional the as partners. reflecting year experienced more to services past cycles $X.X conscious year XX% million to and from $X decreased to period, longer offload that's and in decision

rate X% a falloff revenue Our maintenance declined this reflecting quarter. year-over-year $X.X to million, normal

of and fees XX% of period maintenance total compares revenues subscription quarter, recurring in year. total that second XX% represented in revenues last same Our to the the comprised and

it for the to the margin, gross prior Looking period. XX% current compared at XX% period year was in

subscription the Our $XXX,XXX in prior intangibles the margin margin include year to you the current fee the XX% was prior and for in gross of period. XX% the period. period in both was But noncash the if current XX% current period year the compared amortization quarter,

to period We to the revenues. had decreased was XX% in $XXX,XXX XX% XX% margin amortization year. fee the of cap in in last software compared period to from and due year. lower same Services last License the last period again XX% of margin same

and for XX% XX% was margin to compares quarter, prior period. the current in maintenance Our that year the

XX% year that of to compares down total that year Sales quarter, from current the for period, expenses compares was XX% and XX% spend prior year prior were and and is of and for current expenses were the for XX% the revenues period. the to current the of R&D revenues in that quarter, in Gross period. last in XX% G&A period. marketing total XX% revenues the

costs. charges So per compared basis, and primarily or acquisition, year $X.X compared to ago, our in and that's of last net costs to $X.X diluted $X.XX was due which million income related earnings million the share onetime Garvis lower operating on in $X.X same amortization to were income million of or $X.X year. Net quarter the quarter a million $X.XX million to income $X.X revenues to this and earnings compared GAAP was million of a $X.X of intangible

noncash to same which Adjusted million the to from X.X% X.X% and XX% to same last intangible basis, decreased decreased EBITDA year. adjusted expenses year. last period of an compensation quarter stock-based amortization operating $X.X the in On income XX% to in excludes compared million expense, adjusted acquisitions related $X.X

note EBITDA nonrecurring I as adjusted We and by year that the in income the operating which, to acquisition reduced quarter Gara our adjusted million second this $XXX,XXX relates transaction costs. of of of mentioned, approximately $XXX

of million in adjusted net last or decreased adjusted share and diluted quarter, the for $X.X earnings to earnings net year. of per period adjusted that So diluted the adjusted $X.XX million share or compares income second to of X% $X.XX same $X.X income

from which was pleased see X% XX% slowdown the to remaining we this past year last RPO year, over obligation quarter We quarter we a as in performance are period, approximately was RPO of International the activity total to this or backlog down quarter. the total return due revenues backlog our of refer exited million, XX% $XXX to while prior compared growth sequential revenues and bookings to to this with year. for

stock the during for of stock purchased Also, of million. under quarter, the to for a buyback our $X.X $X.X of we repurchased total another as quarter, approximately shares million end XXX,XXX authorization Subsequent Allan XXX,XXX the cash. shares mentioned, the we

stock remaining buyback have So the we approximately on XXX,XXX shares program.

Looking at our sheet. balance

of investments and the $XX.X million strong remains the position financial of quarter. Our at end cash approximately with

quarter, X.X. for the approximately we shares cash acquired and in $X.X XXX,XXX paid total Garvis dividends cost During a in million and $XX for repurchased million of

same year. days compares period, Our XX outstanding the days was that in sales and last for current period approximately to days XX the

fiscal the to 'XX Turning outlook.

operations. our original We that the Our margin discontinuing outlook guidance revenue included our note million year for and EBITDA only mid-single-digit now assumed $XX in for reflects continuing the operations.

adjusted revenue fiscal anticipate revenue for of million to $XX million, million $XX.X So recurring to or range of we $XX $XX 'XX, million. we year And the EBITDA, $XXX including for of million. anticipate $XXX a range million in

anticipate remainder offsets the for outlook sale acquisition of we largely assumes similar contribution on adjusted our of our EBITDA the QX the impact year. to remain revised the transportation solutions level Garvis. And the recent Our to revenue Garvis' of from

to accretive continue next expect to the We in XX be months. Garvis

this to At like questions. any I'd over the time, call turn to

Operator

Instructions] And [Operator come our Pfau. will from question Matt first

Unknown Analyst

for It's Karen Matt. on

have color impact any the to divestitures can on macro you add guidance and the change some may from First, expectations that changed? versus

H. Dow

particularly adjustment, year, an as divestitures, divestitures. is is earnings half the quarter, on first on that the impact the but big slight good piece to the majority macro, as material there The adjustment from of a not the the fairly the that. The a impact first of and -- of obviously early revenue a the related was had

reflected we we forward in So the make sure to got wanted that look.

Unknown Analyst

budgets then about sales in And Got are thinking you for did how customers it. worsening any XXXX? see And cycles?

H. Dow

good really the together. feel mixed results, budgets We about Karen. you. It's Thank Great question. coming

budgets course, and the for that X a funds spend. to Of to as they release One approach first project. in don't is start anticipated spend process. get and that to budget layers get mean There's the off place kick to then actual

of amount is Pipeline But in. coming the we're activity encouraged looking more next there, of that's projects year. by that are out for the budgeting number robust

think lot of in still space. sentiment consumer the of I goods is industries many there a the around

in Let's the ends kind We're now. that season see how year of sentiment.

kicked Of have sales week. be off. Black next course, Friday will the

Within spend X sense what's the weeks, see a But anticipated X in year. happening and we're start that. encouraged next companies get of the will to next or for real

good that. about feel So

a projects time some get to the make seen they then after and some not to to have where cycles, know holidays. and of sales accelerated, get the those a bit They get the the actually is surprise in a full this projects season in they areas, change frame. We've get they're seen investments, was need material which swing kick prepared. just into organized, going started, We

done. part of work it into you make by into chain then, supply the it's it's December. past of store the kind up almost not The wrapping in it to If The chain store. get going supply after is is

So supply energy then. chain teams can refocus their

Karen. the So mixed outlook but for question. future, Great environment, positive

Operator

question come will Zach Cummins. our [Operator Instructions] next from And

Zach Cummins

guidance assumptions the revenue you closings you other year? little contribution that timing and more can Is into insight we're to at going just the of that revenue you're so Allan any be the Vince, gave the helpful. impacting provide more there into recurring baking that for that's would see? a deal Or

H. Dow

prepared bit. last and We year, the finish anxious process They loaded. bringing now little anxious. busy were the right were process but in of quarter Yes. the They ground. the really up projects few a early projects second that we're the actually, bit in. those very to back-end a We It is our was kicked We've those off. mostly were days and even very, were them though the delayed the line, from the quarter, teams legal procurement hit

out first on In we were happen. street making of those November, fact, the projects

up So positive in impact quarter see real is third now. the revenue to flowing a results. We're that going and on our

full for the those us. deals coming see of You'll impact together

So We're a quarter. in third see. uplift we'll anticipating real strong

Zach Cummins

And to helpful. like your you've you customers some your base. some into of could product existing That's out go little great pretty Understood. and in a to It you've acquired the some gotten the the accelerate really deeper it since rolling from the seems started Garvis cloud. of of to customers transition on-premise feedback

migrations of So you're how so tool feedback curious the base? that a the thinking and just as using for far about within existing

H. Dow

relief, AI. "You It's go supply and exceptionally us -- of they and CFOs for CEOs It's all the and find a is, a our what on find it couple and It's whatever to got don't one, it. of of buzz chain to with that of some that, a some is." telling but around have They know native we've AI go clients got our are strong. generative phenomenal, been And client been out teams, fronts. actually, it bit Number the has reception been AI really.

marketplace. base and so the is it to it's we and get have and upgrade And the an the And cloud, are the for easy "Thank can inside our at platform today." maybe for, I make expansion client and with lift bring and a it that for because our me shift you helping leadership now to we it what team asking can supporters saying,

into results been now of The XX%, of which to phenomenal. we're millions a savings. The XX% have results clients dollars forecast in for improvement seeing accuracy, XX% our translates

we'll phenomenal. been anything our with. Excel to it's marketplace, comparison to toe applications, stand in competitors' And the prior toe So that's spreadsheets, our in prior applications,

for with been achieving insights the itself It's get application, interaction are has the have the from particularly system clients So results the The to that to for blown the of exciting they about kind supply human user with direction and away. executives. AI, directly for ability able our the need self-serve generative has the to to phenomenal. of make the But eye-opening, been and absolutely application, chain, fun the decisions insights be community. the the them executives get firsthand has

who platform? help adopt, that's drive help come executive this just want together wanting out across us. to and to the raising. They Who to wildly at they to executives is an at exciting got user hand that's want not team really us to the the a We've executive leadership level. the and proliferate wants Just universal help there us continue capability level,

us. available And up less we that runway less we during a contract and of the was as quarter it to of I comments, that started contract lot the dozen earlier to signed a from ended than a my had mentioned we quarter, have didn't time with we In quarter. half onboard in the signed than

was exciting. that very So

been an the really got lift-and-shift down has and X interest we've nailed upgrade the and forefront the many We got that the on already application, conversions. even more that So reception marketplace of opportunities in stimulating strong and demand. for just the

If a that forecast pays lift itself as you goes. get XX% improvement, can far and for shift as error the

shift so and but that. a to now, pricey, going really it's lift value-oriented And accelerate it's bit is little

you question. But that than Zach, one. It much answer, question. a expected probably good you thank for So the longer maybe a on was

Zach Cummins

And is that start proven Allan, that million guidance, your you also to just X the year. assumed the color to related the the as Always well? said more when most I incremental think to recent $XX clarifying and was method? of Is divestiture questions. Vince, it the appreciate it, Or all there. just comes

Vincent Klinges

was permanent. just That There $X additional actually $X.X was the an million, million.

Zach Cummins

about is, Got it. final of obviously, slight it. for next a it. me drag Got is then helpful. margins Helpful. on now? margin And margin just But That's quarters. right Got gross here to business Garvis for question for the potential way couple EBITDA just profile really be the adjusted your profile and should the the business, what's think the remaining what remaining

Vincent Klinges

going translate by incremental we margin. a there that view, up subscription little margins decline half see improving of a of that gross of back into operating subscription end XX%, bit. on year, EBITDA should the to of by see improve a Right point from margin the which the XX%, But little do the mitigate bit after in start hit in gross improvement XX%, XX%. too, has XX%, in that we the the gross year. EBITDA, going fees, gross should XX%, should we'll tick the to but the somewhere now, with a been margin start overall And means then From around services the it's to about up overall margin, adjusted see

Zach Cummins

with That's Got of helpful. of rest the the quarter. it. luck Best

H. Dow

Thank you, Zach.

Operator

question will Soderstrom. from come Our next Anja

Anja Soderstrom

end that quarter has were So of you very busy the How the so towards quarter. far? trended the in third second

H. Dow

Well, pretty only we've in quarter traditionally far, from We a but the strongest second -- third spillover in got Anja. some already. XX a early of so had this given progress actually nice our We we've the quarter. got into bit that days quarter quarter, third we're is the quarter, already. It's little

X essentially closing events, We have milestones.

to have are is money get now kicked year available, where people the the projects -- budget scrambling of have off. so if We end calendar right they we want

with fiscal have coming year. money We year, calendar lining new new up available fiscal in a the

always signed fiscal And thing end that done January. have software the the then that the early always is unnatural of have the get contracts you at quarter. we the So companies -- business

So the of for at end us. January that comes

that on you here, if we always normal been every go Almost And of so and but for seeing strong resulted majority the the a for in going the year, not some quarter It's see back that's best. year's year, of quarter have third around years is now. the trend. XX I we're -- So right us. Vince every kicking third that

we going. been One, we've pipeline impact overall a know We're get quite from just had a had pretty in that's the spilled we then just from start. our measures X projects uptick the we seeing third. and added overall it. we for spilled has the Garvis the a quarter quarter second might over pipeline seen And And those healthy closable acquisition, have bit that on in have It's we -- that thought think, year into new aspects. an

up over increase were our we a quarter a where probably overall we're pipeline where year ago double-digit last in in So this and were we the pipeline. growth XX%-plus over time at

So up pretty projects strengthen the healthy on these it's the to put But a sitting environment rolling. need and to now and economy we're in. people we'll willing up, get shore we money table,

Operator

Our will Galinko. from come next Matthew question

Matthew Galinko

the the kind investment and about? thinking you're in future? you this the maybe about of allocation foreseeable you Given repurchase, through some balance announced can thinking are your something the Or the of for is still priority M&A acquisition the year, just revisit of capital particularly quarter buybacks

H. Dow

the we're to -- rest project year, Christmas, pretty the by for the allowing out we'll going of current pace. to exhausted the quickly. We're have One, to going could Well, we runway run authorization. calendar the continue at of we're buyback plan current that

the next close week. out, until late that we're couldn't We play take for going an on that. So action to finish it sure. anyway We're on line to let one so

out. So will play one that

got on going the X for the we market still with in in but had quarter. consumed past transactions are we acquisitions, quite We the

valuation. think very we advanced that haven't some we in immediate the interesting, works have an would But anything So early-stage things we be that are move.

haven't yet. up we given on So acquisitions

wouldn't one, time anything given complete until to line But spring. the I the anticipate

and get action months, months before that. the that. the far looking this on a we've as And would We'll dividend allocation, on that. rest as capital X talking we're -- then continue forward point, now completion no the to of So at X we taken with

it and back recent discussion now, about point, a the we leave it right it. some should had as in But put have is. a talk was table We that at on conscious to place decision that

going got acquisitions, continue make tuck-in next capital with we out to kind finish search what continue recaps nice dividend we and of that as So probably. for acquisitions on sometime could the is the whole allocation, in the X that months,

Matthew Galinko

assumptions full to And right. follow-up just year want my building is, your recurring understand in guidance. All

of and through constructing How the Just activity seeing and acquired particularly the given about recurring do of you guide? the think half assets. you're year you're traction in first the with activity the that second full late seeing the year quarter some

Vincent Klinges

Vince. Yes, Matthew, this is

that I bookings think of we the year. bit in the real fact issue soft the beginning the was had

So year, even bookings you though the take a don't of seeing the we're half in that back revenue. the pickup much in get as to strong the of --

to the the revenue So that's be that to why recurring bit more little a on side. -- we're adjusting conservative

Matthew Galinko

Yes, had what you the through upside way recur of we'd sure. saying guess, the to scenarios of -- I No, just the next similar in end X.X -- that those a the you quarters. so, understand But is other an you the at that component. -- activity Or range that very be have understand something range have the to place get that quarter I you territory? end past above the this or lines? along trying is quarter, what of Or

Vincent Klinges

have conservative the Absolutely. bookings We're a yes, last If upside we to be range. then this of the quarter. week trying on at some earlier lot Yes. have because the than just of bookings came we we indicated, we anticipate, could the as

the next quarter. revenue that in won't able third if those we of quarter, So for be the deals any happens to take

bookings quarter when. fourth no have impact, regardless of The almost

days get them they You course, billing late, in quarter impact. less way. of And any fourth or early much than them, them get have get has don't

that So a has impact. nominal

Operator

you. are questions the queue. Thank this at there And no further in time,

H. Dow

We participating for evening all for and thank And appreciate time All joining today. hosting this for Chelsea, call. right. earnings Well, our us. for us the thank you you

again evening, a have good all and talk soon. we'll You

Operator

your This you, participation. gentlemen. we program, and concludes and appreciate Thank today's ladies

You may disconnect any at time.

Logility Supply Chain Solutions (LGTY) 16 Nov 232024 Q2 Earnings call transcript