AMSWA - Earnings call transcript Q4 2024 | Logility Supply Chain Solutions, Inc.

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Operator

Good day, everyone, and welcome to today's fourth quarter and fiscal year 2024 Earnings Results Call. [Operator Instructions] Please note, this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Vince Klinges. Please go ahead, sir.

Vincent Klinges

Thank you, Travis. Good afternoon, everyone, and welcome to American Software's Fourth Quarter Fiscal 2024 Earnings Call.

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

H. Dow

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

us Although for the of proven challenging was American a XXXX our moving chain forward. from year focus through an rating software singular core the divestitures supply method leaving economic a Software. solutions, transformed pivotal with standpoint, on fiscal business transportation company Strategically, our we in

important client Logility leader and Logility, supply ticker in our a as Magic the for evident already Logility become plan will year solutions. as by and symbol is was to chain community under existing brand our company more Gartner to is transformation trade latest And This planning that the known the prospects. Quadrant recognized we LGTY. Most this rename later

road the with our competition, change this from Garvis. XXXX with brand. To ourselves distance AI will map we fiscal So our significantly the of further accelerated align in acquisition the company

with As we will early client shared the last indications suggest upgrades of pace quarter, community forecasting. the cloud existing benefit shifts demand rebranded of lift our the addition and X generation of capabilities to and to Garvis that us the clients accelerated on of and fronts: have existing DemandAI+ and been logos this new client cloud to products next new

Given demand intelligence available DemandAI+ platform is our that that to our we cloud, informed further will years. We innovation be over the this no new our represents next next-generation in conversion of fees maintenance available believe only recently and longer catalyze will revenue is the clients several on-premise. the subscription

Even we bolstered we utilizing in platform as continue fully capital stock via to M&A, quarterly remaining many the usual years, to repurchased our dividend. our through market time of shareholders first in we And return authorization. amounts open the prior the for our our

will come. a with the B taken year create aggregate, our value agreement years approval, Class significant Jim will our In shareholder reached we actions Edenfield, which we Finally, definitive the over to the shareholder, subject structure. believe in have eliminate we dual-class shareholder founder to past and

midway to results year our were we XXXX. but phases through initiatives, guidance some revised over multiple over remain staged the and start prospects and for clients our expected that cases, year, engaged persistent have macroeconomic Turning the dates, to meet to transformational or delayed pleased past the fourth were in approvals on Similar largely headwinds. we the quarter, as supply experience our amid the and chain full provided fiscal commitments

reflecting as both the remain our deals strong process. an Our the closed that new we pipeline, in again, in levels capabilities in AI late-stage increase grew from saw the as quarter, well improved in interest third

InventoryAI+, in the start was fiscal to and fiscal interest partially signed to to norms, historic our quarter. Contributing below AI in in sequential fourth was year. insights DAI+, in our their AI enhanced Although chains. We're Garvis around backlog in releasing bottlenecks recently, more remains Command a also the capabilities spring we expanding of growth upgrading into our the that value resulting pipeline contracts conversions across of clients backlog a late improvement move by in clients continuous uptick number that and with that our such the network most continue the clients generative Center. clients driven announced on to acceleration as of which traction relative from optimization in we of the the see our new footprint broadly AI-based the the quarter capabilities Decision supply decision-making to enhancing capabilities, cloud the approach among pilot the expand cloud, and enterprise their our greater capabilities by the forecasting the forefront from provide with on-prem for navigating the desire to

the ahead. year We on have for horizon solutions groundbreaking other the

encouraged forward fiscal the level experienced we're XXXX. throughout of As latter current growth by the pipeline we to year, the fiscal look half of

our for the $XXX into of will million will for total revenue between decisions to around I includes million financial initial outlook $XX to $XX million the of all timing to we bookings conservative our We time, this uncertainties are late the million. At poised and Vince, in revenue subscription cloud period. time, economic soon into believe million, rate accelerate. At higher XXXX growth the to recurring and to spending assumptions invest we subside same ahead any the the $XX.X XXXX grow of remains and revenue million of the timing client and delayed the over $XXX can and impact our initial fiscal provide accelerating year, fiscal adjusted large of $XX and a revenue this from impact predict guidance see closures, exiting bookings. Taking pressures call Thus, meaningfully pipeline given as growth the particularly difficult deal reflects should at our translate recognize consideration, of fee as and we results. details to turn the transactions EBITDA conversion starts who while year

Vincent Klinges

Thanks, Allan.

Before quarter The Proven IT to show prior operation. second of divestiture the I'd to due like Proven business considered to Method, material from statements noncore as I operations unit, everyone comparisons the for results to that have ratings not as operations. year financial our reflected a were enough the in our discuss Method the and for Transportation quarter, remind recast recast discontinuing been our the discontinued Results solutions The still on continuing are staffing

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

$XX.X decreased that's same professional license the fourth for to total revenues from So million X% period from due our and the revenues and were maintenance. lower $XX.X year, million, and services fees in quarter, primarily our last

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

million, on period, $X.X to same last and primarily our compares to efforts a in Our year. Professional and ago direct software to the million services that due period our $X.X from to services and year bookings other $X.X license $X.X more the also to revenues million and XX% million year revenues were SI lower decreased in that's earlier partners.

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

from total represented So our fourth last that and XX% fees the maintenance and the total of of year. that's period recurring for in XX% compares quarter, revenue the comprised up same subscription revenues --

XX% the was period year. margin up for XX% gross the current period, in same last from Our

fee subscription quarter for Our prior XX% margin period. current the year and was

last same amortization the XX% period our that's and of Excluding in the to the $XXX,XXX, XX% noncash of in margin was intangibles year. compared gross subscription period, current

The expense amortization X amortization of intangible period the expense in noncash in same to compared the amortization from prior year technology the was change year. from most to X period last the period life acquisition in years. Garvis $XXX,XXX recent decline the The reflects

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

the Our period, maintenance were decreased XX% to year. last gross margin XX% the margin XX% period year. from our and for in services was for XX% to up last compared that's -- same current And

total XX% and the Garvis the related and dollars. in compares compares expenses prior year marketing XX% due Sales in period, expenses current current were that primarily the to that and but virtually of revenues and period, costs the prior gross acquisition. to unchanged revenues to period, Our activities XX% marketing R&D of were absolute in XX% for for the quarter, year were to increased

were The increase XX% year. revenues XX% for due to inclusion Our the was our of G&A total current expenses the approximately last to compares $XXX,XXX quarter, of plan of dual-class that expenses to related and structure. elimination onetime of

share million total quarter to period Net was diluted the revenues year. International per as and RPO, per So exited the to EBITDA million per quarter $X adjusted adjusted net year. revenues $X.XX was in the or expense, year million to $X.X income to and intangible we income this excludes basis, stock-based which and per million last quarter, operating that of year. income last the $X.X same $X.XX to of for refer year. On income adjusted acquisitions earnings share with of costs or related in to diluted $X.X of compared net of last and or net period sequentially class And in $X.X to X.X%, $X.X year-over-year million related period same amortization and increase million our primarily which XX% earnings lower compares quarter expenses last performance to the was revenues noncash an a $XXX $X.X our nonrecurring million B was in also million, share Garvis quarter of is increase. adjusted million compared to and We XX% fourth compared adjusted X% of our of diluted earnings $X.XX X% Adjusted $X.X were an compared adjusted acquisition remaining due approximately operating structure. obligations, the $X.X share million or and year. income same fourth was $X.XX the backlog to about expense-related income last last compares this of diluted compensation that which

balance Looking at our sheet.

cash Our million the dividends. of financial investments remains with paid strong $XX.X of we the the million end $X.X And during position quarter, in quarter. at

increased due of January -- days is for to days XX of timing to at end billings and the was May outstanding subsequently our XX compared was that's majority current DSO collected And days. were XX the Our current end quarter, the of days at sales 'XX last of the as which the me, year. April XX same in excuse XXX period period of

year to our weighted will fiscal As our half more related the the seasonality, assumes our Allan of year towards guidance latter consistent with the heavily our 'XX guidance, for fiscal mentioned to bookings 'XX. relative be usual

We see the years. conversions than of which, client increase an TRS the we to in existing decline in result in will sale combined past cloud, maintenance expect greater in seen the to with have

to an our typically we cloud. see reminder, when of lift the a and uplift As to clients Xx Xx shift revenue

accelerate will growth this fee So we subscription anticipate exiting year. our

for of So the to the $XXX providing to and revenue of adjusted $XX $XXX million to million we to million. At I'd million, $XX range in a we guidance time, revenue we're call anticipate fiscal anticipate questions. EBITDA range million to like $XX of million the over recurring 'XX, turn $XX.X this including

Operator

from Instructions] Cummins. comes [Operator Zach first Our question

Zach Cummins

wanted around move just point, to It just some buying like of this hesitation at sounds start I how you they from project customers Allan, trying ask seeing you're current forward the with your time. environment. some grapple to

curious how X what ago those seeing months versus or you conversations have just So maybe of were evolved X

H. Dow

obviously since marketplace think, And interest the and all, dates. we deferred know into an Yes, hasn't we improving. long-term break question. earlier and year we last relative economic to Well, of the was translated to rate as in signed together, occurred drop, some for when thanks Great met, have the by the all actually the in were start afternoon, good us. got although of projects prospects then, first able has really were I projects. continued and loose. of a few encouraged environment, A the economy Zach, anticipating everyone We that stall see. That we joining projects

the So we're to not were contract. doing we though any even able activity execute

one this not revenue on projects. decision to bites, they with continues. here speak, the So capture first case, going nor breaking that in even we a are for will quarter people able were in the is the direct up an impact but increased in that reflection fourth to much RPO trying so smaller be as the to They're in make they quarter. And guess, that get -- something the how proceed to conservative, done, year they unwind want continues, to want the some things just keep II, calendar to but Phase as see year we powder dry

pace itself So less slower that you time the approval much than period. we'd earlier conversation going is a that we experiencing were the Zach, related selection about of approval amount being same gotten question selected, time much you running funding and Once very on you evaluation and the very period conservative on. What's has conservative approach, the of then to to give energy interesting, budget working is seen evidence posed, probably is cycle or and this really contracts get start you getting and that really longer. that's invested, through which historically from

So that's the we part cycle difficult. see the more the sales gotten much that's of that

answer will clarity hopefully I on that than longer Zach, right a the marketplace but think a probably So seeing little were you what provide we're in now. anticipating,

Zach Cummins

activity Absolutely. to always phrase, was customer conversion a of to you moving within the a could in accelerate have bit around in Allan, seen sand, activity drawn And of the conversion question to forward. the had some appreciate little the where we've I your incremental color. the seems that use base. shift really on-premise the line it I follow-up past like what A

curious that expectation So feedback terms really business? customers from giving of of kind cloud to side to notice? had of you starting people of since the if over the in what's And any kind just your move

H. Dow

really It's behind multifold. Yes. it feedback. mix The been rationale was

deliver become foremost, really far us in the of depth of for development and our that it's just all cloud. and given the difficult is being on-prem, First development more around hinged to

we've decided gotten today, that seen, higher. all sense. also as risks didn't in So world that, the we've the We've make cyber have experienced

one to are actually way. incentive and many So able and make behind own In the the it we in effective some protect they their anxious because data do able available being a receptive momentum more have them of our were much that to to They're their pleased gave their They're comfortable about the and message systems them to to clients we -- more on the that environment. that partners more move cases, it. very been cloud. our delivered

with encouraging. And be able other with them help We've continued deliver we're share it. not then we're to who them through We're that of to new not going on them those that's to So the functionality, just that spectrum, the dialogue been by frustrated going side we're them. abandoning to and process. and any

actually move it the project reality putting circumstances. and they've to an in of comfortable the to transformation a time bit the adequate time after have gotten and maybe shock in and on of them overreaction, we the initial chain comfortable their with get way place facilitate a So risk cloud budgets ample without to do supply more getting and over the

who takes market and that negatively, So haven't anybody it a little more probably conversation to react just those think initially away yelling the reference in a strong today. That's screaming. I that. with but been reality the also ran had And we that's

Zach Cummins

for making baseline sort but Understood. a from a customers. initial Vince, be given conversions But sense that And greatly it's incremental appreciated. one the final of revenue you're just of us trickier on-prem revenue question can recognition some you of little around accelerating towards would the of you're maybe maybe give a know assumptions standpoint, that color for geared your year? guidance I recurring this

Vincent Klinges

cautious you SaaS. approach Yes. a of to be be the a might lower little close We the little to seeing half we to a -- bookings start the to want happening Yes, wanted because were lower on the take until to side. incremental it's that Zach, trying the conservative we We of adding be deals in year. the first thinking

it why SaaS So would second in more the the that's of of related bookings modeled to half so the year the we've be kind of like area.

H. Dow

to the date. say the to start going bookings was just was tied the revenue I contract Yes,

to the and end revenue revenue a the of having less have in So the time we out results. with reflection move capture financial year, back the number really to the just as the associated you bookings

Zach Cummins

best And sense. Makes the Understood. quarter. luck the with rest of

Operator

Our next Galinko. Matthew comes from question

Matthew Galinko

prolonging are a little I expecting maybe kind us Is expect the forward that down the environment could was or hoping the rate and is move down happens? color headwinds operate and where cycle? customers a the didn't, to approval of the freights we of need higher you that around in do forward? kind more were fact they'll see what and interest could tone cause sort the maybe expectations give the of progress of real it rates to come come you bit it but as to reset something Or before

H. Dow

Yes.

all, the are thank Much space. not consumer our for of First -- their environment of primarily many where is and Matthew, staple products joining a in one in those you thanks of an good a for to It's us, goods. community explore the here. clients are question. those goods client bit

inventories clients those a are will, the more interest direct having. obviously, and eat. on have are clients where doesn't the There in community reflection really those strong suffering investing. in going level forward. all also on So that We we and those are impact good to impact some we're staple clients their are still goods, things. We're staple is rates spending they're very marketplace, money the are what's have are that their the are channel. revenue The not of the just strong. necessarily our really a the although we're seeing things those that's have of a in -- in have and to to energy that at seeing still most. I the sales going clients' but all impact spend the still on that goods don't consumer clothing. of have subjective. are and that seeing They're on that's We the business, seeing Discretionary they're anticipate of some bloated

on -- in pandemic. back And end of So started they kind off slow. the into as all been the of of sales has sudden inventory then backlogged to as the back based a inventory the channel the coming brought flow of they

rates at what news, do the about interest the same actually will have as economic And that can under impact of an experiencing. look what they're things we the consumer to that So covers they're anxious you consumer will on much and the the see spending.

they're their As result staff on side. cutting of a that, also

they're kicking what to levels, investments and staying cutting off right have So they're about a when you're the when little staff, staffing kind see making anxious course now just projects of they happens. limited

really that's hearing we're from what So them.

excited old help that in take know and the them get they them moving quickly just need is barriers They help help to the supply we CFO to to new going. let and them they ways. the pace a their document the making, decisions traditional to They're sign down to market -- of capabilities release invest. a that the can However, the more with got that their accelerate ability the know desk operate the chain won't about them there reach making effectively. more and short has expenditure But the capital out big funds and arms, decision

We're marketplace. see kind we're that's break Matthew, need what think why we done that think if we the project, seeing So they've this readied rather evaluations, we can in conditions the of acceleration we that's get a projects. also -- do, they might what the macroeconomic because in in know a they've to they rapid

Matthew Galinko

logos if groups if shifting sort of And kind also color. great under bit potential are customers. those relative cloud new already primarily deals. new between relatively guess a and Or a of demand they the the That's related, within of and I of but they're group me scrutiny think existing to maintenance understand Are kind those functionality? outlined or contracts? prospective X buckets -- follow-up bit differences under you conversion conversions of Help I little guess more cloud logos my of amenable the and I as there's intense but new same little

H. Dow

Yes. easier moving. great are on They that to get perspective one.

uplift made. between an our from also to we to there and somewhere an us. offset X have cyber now out, is of what get they they that see, typically so can said, easier. investment, stay needs because quite the pointed offsetting a Vince as as over it new makes investment However, oftentimes and offset environment enhanced There is current be standpoint risk even they it But perspective, they're greater expenses. Vince get internally, easy making can functionality, with When security, and current a that safer spend from they becomes spend capabilities, X

they it sort said, a get have Now requires is to that with -- of flow project a that that thing. cash still and still

they're and So scrap to lot than there's It's easier spend and because really more get today? the for it's start lifting touched just we're there. is we over going these expenditure offset wait we saying have it easy we larger those be of that's a approved. easy, I some lower we hands a doing with months?", big through. Overall, on stay to Do and we're got. the whole an the as one today bit "Can't bit shifts done say, are to work a not couple money to just what little well. mean everything that to but project, as and easier Can a it transformation whereas a as eyes the little -- get to get project not larger a

that on year. And in pretty counting we're fiscal of up us So the a portion make our material will bookings. anticipated accelerate new to for continuing

Operator

next question Soderstrom. from Our Anja comes

Anja Soderstrom

expecting back-end the -- Just a half. follow-up on be were the the loaded in bookings to you on second the

of impactful should in the XXXX return terms fiscal then So pretty revenue? that then on for be

H. Dow

you Anja. joining thank for Again, Yes, absolutely, us. Yes.

the In that exactly point. fact, is

of typically So see November But started us, first beginning of year say after or month that at of we'll As Usually could the that of that little good a then, get is demand. the December. usually even calendar signs often end causes X -- we for stimulate is, a beginning they delay. the bit end the thing holidays." "And or of the someone

maybe pick April. and we February, those signed January, at in worth bookings. But we months X, even of up level, on -- you So anything revenue X that get March

you always nothing. get a basically is get or month April so. fiscal It's might March, 'XX. you

But just yes, it's it. fiscal cascades of 'XX. the immediately beginnings So it then into

uplift bigger into So end. we're back the a anticipating

Anja Soderstrom

but been do conversion historical numbers what magnitude levels, Okay. it's of has that have And levels terms of improving. any And it's you the in been been to below below how been around pipeline, it's historical and sort the improving? the then

H. Dow

seeing conversion see to Yes. that. continuing is troubled pent-up it's we're rates demand. of in -- overall pipeline. But our We're The double-digit part the growth

So conditions, revenue and that and every hoping break the through see economic we the we to -- that in breakthrough we it growth a can pipeline convert to again, burn our we're in think see if can continue really hard we to have is pipeline the We conversions. through do to the anyway. really work build to to pipeline, in But yes, day which exciting. need growth

Anja Soderstrom

Okay. about And the what's been thoughts that? I'm rebranding, curious around and also your driving that

H. Dow

that to for we're We've right had Yes. the assets. mind the time, in divest point. commitment we trigger for the made 'XX, nonstrategic in and some looking in the fiscal year earlier

We're of became carries be share We've the it sense a waiting We'll good under of for new made go. work now a that we're it time. reserved We've and final got ticker So structure. which to with ready, the it's registration and It us. the this work. few And lot the to -- going paper approval. with recapitalization symbol. get behind

known company. known "Who's the as business ask, motivation the as and the American American From the brand the brand to But just figured the be company, we and logical to there, we most to we're Logility it try the primarily, the dispense opposed to clients as company time "What's we're community, says, fact registered with Software. out parent community to is with an and investment we from put the one. align Logility?" a that and and align investment do, solutions it's approach the that community, rebrand behind so the Software?" from is

motivation. that's So the

the We're well very known is in industry well as in Logility the known a industry. brand

and we just that, bringing less So we're table. excited on, lot the clarity about quite the work if that to a whole follow there's path we're

Anja Soderstrom

the perceived in think investors? the you lot going are for going And of to how by more is them stock, terms of Do Okay. elimination be hurdle dual-class And currently? see you of big now? a interest sort to that's that

H. Dow

the with call on Well, of Yes. afternoon. are them us lot this a

be have been to for what day see generally, and we've say. they a this about when we'll would So But the while chatting right.

maybe it structure. is right lot gives -- So positive is completely the companies window. that is Maybe known, class just in across the expectation well them have investment making for entire of also investments always the who a representation not to the thing. It a known. forbids It even There's which charter thing are investors up do. a their it's doesn't well opens -- It's dual community, growth right.

So we think will community, company always is open the the even broader well. it for up an as good which investors to current investment

in reception their the to So on filings preparation we'll we'll August. be of this elsewhere, and or express we're we'll wrap that in we're that shareholders vote What be is positive a now, for the through making into are work but that up quite excited transition. either the asking all The us month support August, done. really their and some desires we firmly believing in about it that meeting, be for shareholder which happens will all

Operator

We at further have questions this time. no

H. Dow

day, for if Well, Travis, and to participating today. you good not to the call we certainly thank the at of much again. all helping with attention end, late We your quarter appreciate for next forward you all us speaking so sooner. look in Thank you Have and a once afternoon. the

Operator

This does conclude today's program. you for Thank participation. your

at may any You time. disconnect

Logility Supply Chain Solutions (LGTY) 6 Jun 242024 Q4 Earnings call transcript