AMSWA - Earnings call 3 2024 | Logility Supply Chain Solutions, Inc.

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Operator

Hello, and welcome to the Third Quarter Fiscal Year 2024 Earnings Results Conference. [Operator Instructions] Please note that this call is being recorded, and I will be standing by should you need anything. I would now like to turn the conference over to Vince Klinges, CFO of American Software. Please begin.

Vincent Klinges

Thank you, and good afternoon, everyone, and welcome to American Software's Third Quarter Fiscal 2024 Earnings Call. call Dow, the of and on Software. American me is President Allan CEO With some and opening review provide will Allan remarks, the then numbers. will I

may only statements But forward-looking growth our strategy. our safe forward-looking statement. this and conference first, statements such speak harbor business strategy statements, of among regarding, call including Any other as things, This contain cannot quantified risks on subject to are are These date. and some control. expectations uncertainties, our forward-looking or statements are and be of our beyond which number and based of predicted largely a

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

for this remarks. At to like the to time, I'd opening over turn call Allan

H. Dow

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

the particularly we last one calendar of the years, entered Our year. periods as new busiest seen was third in we've quarter into the X.X

we with larger works we chain provided fiscal transformational are in on prospects delays in have on in deals, environment experience appears guidance some results third And year deliver track last to the . Against continue while the and Our line be this demand improving. the time. remain our expectations, been some clients XXXX our supply were initiatives backdrop, for quarter that to to and quarter. reengaging the we

Before to intelligence on third as integration we've results represents I demand next-generation more in update which of an rebranded I'd Garvis, like review the the platform. quarter DemandAI+ the detail, and provide

been our have sales to new road a collaborating go-to-market map. integrated, actively access we've accounts. on leverage gain teams both and opportunities Our pilots we're product fully perspective, continued to and to strategic From

emphasis use full rapid prospects our towards into primary the existing community DemandAI+ as deployment with However, client as both production new is to of quickly and possible. drive

in in from engagements fourth previous winding to We deployments. pilot resulted with long-term broader the expect longer-term close quarter, which production to down the engagements several converting them contracts

generative addition, of shifts AI client our community. our increased use of continue the native to dramatically first to AI chain awareness across streamline decision-making and production pipeline capabilities has and for supply worthy drive demand lift of capabilities we forecasting planning as In our

in cost-effective we've some DAI+ existing them spikes demand that fact, experience profitably highly the line. a they growing seen U.S.-based rapid grow brand ] product promotions solution promoted with already DemandAI+. [ manage better One determine In a adopt The and to help their is will coffee often company. agility most the accounts

our will this migration years. DemandAI+ coming to and the We that the success existing critical in role encouraged play a cloud in early are believe the of by clients

clients sequential quarter third began our uptick ] as our to prospects [ stockpiled back to reengage pleased another results. and We're initiatives. on our Turning backlog to previously in see

holiday utilization and in largely our note that revenues respectively, and maintenance the periods. by internal of divestiture but transportation declines during our tracked expectations, group the were lower revenues, service exacerbated we our the Our the

additions on EBITDA the the of development quarter inclusion Garvis' margin adjusted and a standpoint, some team. profit a expenses full sequential for our despite From held our steady basis product to

improvement of environment. signs see to in continue we the Demand Overall,

have robust for fiscal our leaving for strong year. to us poised a finish entering We pipeline QX, a

Our fiscal $XX revenue and million between to revenue see between million. we and unchanged, total million, $XX expect and recurring continue million between to $XXX to XXXX adjusted remains EBITDA million million guidance $XX.X $XXX for and $XX

reaching performance the to though, our midpoint ranges. respective Given date, guidance we these at anticipate least on

the that Finally, now I update remaining under and prior $X on other authorization. an in provide want to We stock have been over the million of shares all bought repurchased initiatives discussed previously. have back quarter our during third

we'll company, Edenfield, only the Executive of from role a Jim's years Chairman steadfast for his a appreciate Board Co-Founder, the was to leadership Yesterday, well willingness the over we announced adviser company, for and he and an to as company's as to me. a not Jim as our Board visionary XX also of as was our our as but retired that We continue Jim whole. which After our Treasurer, leader be grateful forever Treasurer. industry

structure, his with through Jim us Miller, initiatives members previously since Chairman other out. who previously regards retirement along Furthermore, frame to various has B class had accepted that work. guide been for has announced Board as will to Jim's the dual in time laid and our our consider XXXX impact we shareholder remain no Class our strategic engaged with options. Board we on role member the

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

Vincent Klinges

Thanks, Allan.

of as have the detail, the I second statements in discuss the everyone due that with want financial staffing method proven divestiture Method, IT to operations. been Proven to our recast to results more I our show business Before our discontinuing quarter the in remind unit,

So and at from due to X% in total point of current came the a and year, for on discussion primarily the from that's periods maintenance. revenues services quarter third million, period from last decrease professional this same million . The of $XX.X will comparable operations $XX.X focus lower revenues and only our the on. continuing

$XX.X period subscription same $XX from year. million Our increased to in million fees year-over-year last X% the

was the that to prior compares and license year million software revenue Our $X.X $X period. million in

$X.X utilization our reflecting period holiday from to Our million decision our million our SI more and other revenues to services of same ago, to that's year and $X.X a the professional during lower services partners. offload period XX% and decreased

falloff million, well declined Our for revenues the our year-over-year revenues for quarter quarter. as reduced maintenance group, rate the normal $XXX,XXX transportation divestiture XX% to as our the approximately which maintenance by of reflecting $X.X

recurring of represented the for last period revenues our total both comprised total and fees, Our same in maintenance third XX% up revenues and XX% of quarter, the subscription that's from year.

current margin gross the year. XX% Our for period was last in the XX% compared same period to

both XX% was margin of our $X.X period. the in $XXX,XXX expense subscription year period the last current prior and fee noncash million, compared year. same amortization intangible expense subscription in the Our The margin same period was if the you of to But in gross last period amortization of intangible XX% current was exclude the XX% year. in

last same the License fee compared XX% was year. XX% to margin in period

Our to from period this last year. gross holiday XX% to decreased services margins due revenues lower XX% quieter dramatically year primarily a for from

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

Our Garvis. revenues period gross of acquisition of a we year XX% and filled R&D open to roles expenses full as quarter our for were in the period, the during current the expenses same of total compares and from last XX% that quarter had

last for compares were year. to Our marketing that the of period in and period, revenues same the XX% XX% sales expenses current and

$X.X compares primarily Garvis Our XX% and million G&A to related to the current year, million basis, also this year. in expenses last and that the On revenues quarter, $X.X revenues last compared XX% to were for to total for period income same the our GAAP a the quarter of costs due was operating acquisition. lower

per to or net million net transportation $X.XX gain $X.X of compared of related compares acquisitions group. our or $X.XX period earnings $X.X stock-based was million, to $X.X intangible sale Our and income $X.X operating that basis, noncash the income to million an a including million related compensation diluted diluted $X.X million net expenses same was excludes and our year. income On of share expense, share, amortization expenses adjusted adjusted last which of to of

or the that adjusted $X.XX $X.X in that million last was to Our the million $X.X And $X.XX year. period quarter, million for net third $X income adjusted $X.X and last share or income diluted earnings same period of of same compares adjusted million, net adjusted of and EBITDA year. to compares

Looking at revenues. international

This year. XX% revenues. was of from that's last up -- XX% quarter That approximately compares

with Our million. what the or remaining quarter of backlog call as performance obligation, $XXX we RPO we exited

balance our at sheet. Looking

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

at we the quarter, in total paid cost shares During $X.X $X.X a of million million. million over repurchased dividends X.X and

days end same that Our days the and of year. XX outstanding sales at January XXXX, days, XXX XX, is period last from was the down

XXXX Turning to outlook. the

reflects said, the scenario most Allan guidance ranges our and we given unchanged And our of remains will Our achieve believe continuing likely -- performance. the is we these operation. only guidance year-to-date midpoint our as remains

$XX to in of $XXX anticipate to including million we $XX in $XX million, revenues million EBITDA million of million we of So the recurring to and range revenue anticipate $XXX $XX.X range million. adjusted the

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

Operator

question first Miller. our Willow And Instructions] comes [Operator from

Willow Miller

I'm Matt Willow Miller Pfau. on for

So cycles last starting thinking are are like budget similar there XXXX? date? And off, how It to sounds how to quarter. customers year changes improving they're about any on sales are for

H. Dow

on thank us, It's in seeing the thank beyond start years break where budgets were cycles now. Willow, The we and you past. they for scrutiny you are whatnot, them joining questions. sales are really to for extended the and but loose still

little the sales running time people -- as the trying we say, ago. we'll seeing coming as growth now. on and up as that. holiday the activity up, we're into many seen them and a the of has because and anticipating now than bit summer, encouraging. later have into that spring excited already the were the we to going up about to have are close to we're in of market get pipeline Much with those the those passed that now now this energy that on in quite more regards in big months start very right as our the X we're moving Things time more move So and result projects, a season, we're But forward, cycles get quickly. In picked we period really into budget,

really the trend for positive future. So a

Willow Miller

last one just And question.

Gen month, to this agility. release earlier about a press So you adding capabilities released AI

just there's wanted goal competitive? customers? Is So that technology? value to to with enough it what to monetize stay here? term to date the up is Or longer added it I if Keep to know is

H. Dow

to sort generative thing. specifically AI, similar At more and It's at when production-ready AI. or stages, technology. what phone It's its maybe a to many generative tremendous planning. We value-add to were of around first talk capabilities applying of with car, We're are brings it's insights, generative The our us level, AI a we that is more it community. the our to supply quickly And to talk lowest familiar get actually. leapfrog. market chain broader a directions beginning its

So to come make as decisions faster the of result it. a ability

pounding by to much and the keyboard, get much Some capable you through more of much that get on intuitive, could the the same method, insights a same the up broader system audience. opens our it's can but information you through are easier, it

the around inclusive more made decision-making, strategic it's need decisions applications. So the to that around be

generative at AI look We X phases. in

are phase helps. people The arms get kind be first in phase, X really that's into activity. of it. platform where to starting activity we're Phase that will to and introduce directed Directed We're now, the around the starting today. their

Now issue where can command a user request it action. or an -- a

After that, autonomous to we capabilities. move more

autonomous starting capabilities user generative the and many interaction. directed through today, more through automate ultimately things have to AI We but capabilities really

Stage be would that so And X.

little Stage horizon to come is And play. Stage to coming marketplace, the really starting X, X X Stage available into today. oriented. X and is

technology breakthrough the So people chain will supply a use it will applications. radically be that planning way change

Operator

from next question Matthew Galinko. comes Our

Matthew Galinko

Congrats on the quarter.

touched on again. move to you beginning think transformational deals I

to more across can -- along? So you and moving to they're the whether quickly bit a get next just the on quarters? what you color And again? add Or them think contributed you starting to finish and -- little do in line expect specifically to those how X move

H. Dow

Yes.

Matthew, -- you thank confidence the for question. think I

of it stabilize is down, is to clients, in the and day confidence seeing our hearing wake But up. the way our improvement interest go talk going . all, or then going talk Every swings about, are First going they're we're other, to up, one stabilizing. economy you overall, and a going what business prospects, continued stabilization what people around their we're they're -- forward. rates about,

tackle a anxious for The what's something bigger but transformational put nervousness to their willingness at kind resources their really need of that. about changed really table commit to the it very to takes accomplish is investment they to more the willing a that, project stimulating. more about investment, hasn't So like to were

So the pace slowed. had

to quarters, going. yes, certainly, projects, over and see started fruition an So and we're they'll and projects get X on of We more the more those we implementing seeing more coming that that uptick. we'll activity of come those next anticipate pipeline. the into start them And get

shift in add-ons, us capability. So lift and on, several long capabilities, then a projects nice but will as kicking transformational well. nice help the Nice term ones these going in

Matthew Galinko

follow-up, is your of your that and cloud? native customers a mentioned I lift shift is asset opportunities to you of cloud partially in? Again, it AI and as think accelerated. more just confidence Just premise and kind element said to sort And to maybe you back a in some coming shift, legacy that. that talk little Or about bit just new approach of there opening

H. Dow

only of market, the in capabilities There's The really including now. Yes. that brought capabilities they cloud. DemandAI+, are new are things the it is predominance DAI+, bringing driving X it the to right available new we that

more say to and clients incentive time. So more that that's for it's at an and look been

probably are available, capabilities the generative capabilities that's the half available growth, representing that AI in that of new the only So just cloud.

remaining the to to but some about. new now that another access just have an XX% technology, to update. they funds. People wanted get the move, is of They have wanted we XX%, budget wanted to -- Out get they talked now the

stimulate that's -- of probably helped another X/X growth. pipeline overall the to So

continued The data other from exposure own their risk environment. quarter in the is housing our in applications that clients the have coming to

a lot against come number IT in applications, them have shocking necessarily quite center, those data It's not the incidents about a but marketplace, heartburn. of gave that their which of in our directly

stay We date. to clients And basically where demand are table more a and management, business. to out to need better robust so administration now coming center, data that's more be saying, and this we some that stimulating have up as is well. more need of -- professional of of to And better the

Operator

next from Anja question comes Our Soderstrom.

Anja Soderstrom

are by XXXX have I'm quarter. fiscal longer. How starting terms should saying that? deals the Congratulations with growth you of helped the the think we lose -- large coming expect the deals Should up, taking deals those could progress revenue in curious in about to the say you're -- we and or... been on accelerate beyond just we through but to larger

H. Dow

same for It's that now. people only it's clients Yes. after the for a starts us, that Anja. thing, May for in But -- are seeing up. the We're budgets serious and We're in but anticipating early Many phase about calendar We're are out another 'XX, are XX February, runs that. that fiscal it. on we're freeing seeing year.

kicking now are which calendar year they them the launching anticipation fiscal our access spending getting in XXXX, starting So predominantly just into to those projects year and and XXXX. fall off budgets of in would

it. to us. and as that busy is into are anticipated we're summer around So think the a coming year, about spring robust we forward quite bullish looking momentum the for a the of ahead and We year very

Anja Soderstrom

you of out phases. in that to in Do think And and wants a how in terms see customer the pans wait your terms before of that any X that you into phase there they make decisions? out going of second we're or the kind be said cycle sales roadblock the the of Gen AI, first might

H. Dow

so. I think No, don't

and of So the clamoring concern. it's such bit is a a a anyway. we're capability seeing excitement, it. unique people in progression for that novel fear with little It's the What natural that marketplace and there's are

any -- put to world. coming a factors wrapper or going sort the very to exposing application to of surfing their that of worldwide in outside is with around the AI give out not and up successfully that way our we've data to things . is web generative done risky be the it them assurance One our within around thing

that. clients around confidence our So we've given

want feel started. they momentum get to next They for take this the to trust, want build and what credibility a and Build to Now willing and means. be get step. then

the of to people and and technology in the and So understand going trust ability the the really lockstep. it absorb is for evolution appreciate and build it

of because technology in delay any anticipate don't we evolution So of this deals the now.

Anja Soderstrom

mentioned are you how about program. Or approve new you said to you exhausted you you thinking that one? approved? you the expect but if going authorized forward? Or Sorry buybacks buyback Did be this, do a

H. Dow

We what as the availability We had haven't for now. do wrapped any to next. up that made and that coming been make that many decision approved buyback had completed together just We about to were the last right holidays years the happen. one

So new we'll take all that up the in and possibilities. fiscal consider year

the $XX to As sheet about year, we make short some just you on decisions sitting in of said, will available, best million. cash new -- we're still deploy how year, fiscal balance a healthy a that. with new And we'll

Anja Soderstrom

market you And see main do the in I suppose what that, now? after

H. Dow

interested. market. now things There's market. still on We're eye out not have move. some some that, we Interesting find to. still It's an would this We've right there. about when announcements what's get We're the specific time. any exited around a next interesting engaged. that don't And take mixed we announcements we agreement right of and thing at . kind of that we'll make But mutual

Operator

Cummins. from Our question next Zach comes

Zach Cummins

Allan, I DemandAI+, longer-term pilots? substantial it initial with upsizes strategy rebranded contracts. like was can talk you of your are going of verge the curious these in mean, pretty as Garvis to sounds go-to-market and on terms these now committing progression And about the of I through some just of

you a of full some DemandAI you can So kind sense longer-term see get can sign a the able new with with of contract to if these uplift potential you're prospects? of

H. Dow

Yes.

those seeing They of actively opportunities to the convert proof building of or long long we matured where and already the manage line pilot something those upside many is the division that of of a a start-up strategy, in are product effective book lines the entire in point and nature. or the term with team substantial pilots getting because a we're we the enterprise. maybe Garvis, acquisition very those term, point product a really from area successfully of using or few very weren't finalizing were regional contracts a in standpoint. maybe at that built to product points when marketplace the pilots business to pretty or clients the have a engaged So was the segment, What momentum for of a

quarter. coming significant. on first completed the anticipate you More we'll is So of coming have that of upside the those as them quarter. our we that in Zach, transactions of some heels quite about, fourth said, it, And on the in

complex, are those negotiate Some to can be of substantial, clients difficult contracts with.

really at just -- our with we them last of the So the got calendar year beginning beginning engaged year sleeves in. and at end the and rolling year, of diving this up

excited retained We or Many see particularly ERP that. quite companies in model. new enterprise we're like something have So about significant maybe that quite any We've in. that to larger hesitant an that effective. bring it like are applications SAP clients, investments

be good build penetrate to points, within. So to model grow the a momentum and this account, proving is get proof then some from into it

we so for pilots long-term there's the model, like business when in doing So develop extended running opportunity clear only a of a an but of We're not relationship. time. are to the we period

as So we're looking really that strategy. a

we've team model never that in advantages So came and in market whole some that new go-to-market a that from us, something But learned seeing from keeping that place. we've approach yes, market, and to we're done the we for and in see Garvis, before. as channel

Zach Cummins

of just us lift completely really new versus us ago around And within understanding engagements give you Can of of maybe into where mix the were of versus bit me, give opportunities of and the this for that pipeline? is sense pipeline. little of you kind a Allan, size year the shift a pipeline question point? going the Final a

H. Dow

that are is that opportunities say really the X/X shift that would referenced. coming the the about the there's lift representing It's well, -- pipeline. I driving One the areas X growth we Yes. into of and are pipeline. new

with The other the existing is relationship to extend clients.

that to are lines, product communities, So regions, that the along new expanding that adding nature. new we're new new cloud those in user something already those -- along functionality,

So it's currently an of extension have. what we

existing an mentioned DemandAI+ in talk, I earlier that sold to we my example, was had client in already As the for cloud.

footprint. to lift their a And opportunities to or extension course, shift. the new clients are an are add-on factor that typically of Xx in. an our and Those was then, it by of So larger coming X

those So those take lot -- the of doesn't add to pipeline. to it a

equal pipeline. X are roughly it's us build parts but -- So that helping

at year, time pipeline last look XX%. we're we we up If this our where about over were

pretty So substantial. it's

and in months month -- a after growth pipeline that it's seeing our So X been after seeing month last the month. for or we're We've X now.

and that. grow it's wasn't It march encouraging. running we as we're month to pop one quite forward. every So It's of off continuing just then

Operator

no any to for There like at to Instructions] time. closing turn additional are questions now [Operator presenters it I'd remarks. back this our

H. Dow

all you thank the today. really joining spent for appreciate Well, us We with you right. All us. time

look and to questions. again those afternoon. the Thank future. a someday good Have great near with Some well, you we for you as in forward chatting

Operator

Thank gentlemen, you. and this today's concludes Ladies presentation.

You may disconnect. now

Logility Supply Chain Solutions (LGTY) 22 Feb 242024 Q3 Earnings call transcript