Good morning. Welcome to the Converge Technology Solutions Corp first quarter 2023 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star then number one on your telephone keypad. If you would like to withdraw your question, simply press star then number two. Before we begin, I am required to provide the forward-looking statement respecting forward-looking information which is made on behalf of Converge and all of its representatives that are on this call. All statements made on this call will contain forward-looking information. The actual results could differ materially from conclusion, forecast, or production in the forward-looking information. Certain material factors or assumptions are applied in drawing a conclusion or making a forecast or a projection as reflected in the forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast, or projection in the forward-looking information and material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information are contained in Converge filings with the Canadian Provincial Securities Regulators. Converge does not undertake to update any forward-looking statements. Such statements only speak as date made. Today's discussion may also refer to gross revenue, adjusted EBITDA, organic growth and adjusted free cash flow and adjusted free cash flow conversion, which are non-IFRS measures and has no standardized meaning. Please refer to the Converge filing of Canadian Provincial Securities Regulators for an explanation and reconciliation to IFRS measures. I would like to turn the meeting over to Shaun Maine, Group CEO. Please go ahead, sir. Thank you, Sylvie. Good morning, everyone, and good afternoon to those listening overseas. Thank you for attending today's Q1 earnings call. For those of you who recently participated on the 2022 full year financial results call, we discussed being well-positioned for a strong Q1 that would be comparable to Q4, despite typically being 20%-25% sequentially lighter seasonally than Q4, which is traditionally our strongest quarter of the year. We are now pleased to deliver these record first quarter results to you today, where we achieved gross sales of CAD 965.3 million, gross profits of CAD 171.6 million, growing by CAD 8.5 million and CAD 3.4 million respectively from our reported Q4 numbers. We also demonstrated very strong cash from operations, generating $28.8 million from operations compared to using $30.2 million last year, a change of $59 million, and pointing to very strong cash generation in 2023. Despite current macroeconomic uncertainties and recent disruptions in the market that some believe may point to declining IT spend in certain sectors, our Q1 performance demonstrates the resiliency of our business model and the continued strong demand we are witnessing from our mid-market customers. We are confident that Converge continues to be well-positioned to navigate current market conditions, and we generally expect to outpace market growth rates for hardware, software and services powered by our cross-sell strategy and strength and breadth of our practice areas and capabilities. Before I continue expanding on the quarter and outlining the remaining roadmap of our 2023 corporate objectives, I'd like to pass the call to Thomas Volk to make a statement on behalf of the board of directors. Thank you, Shaun. Good morning, everybody. Over the recent six months, the dedicated Special Committee has been working deliberately through the different strategic alternatives for the company. While there was no shortage of interest, all different alternatives were reviewed and several transaction opportunities were evaluated. Finally, the Special Committee concluded none of these alternatives offered a valuation for the company which reflects our true potential. In cooperation with the financial advisors, the Special Committee recommended to the Board to have the company continue to execute the business plan, demonstrating the operating leverage afforded by the full integration of all acquisitions, prioritizing organic growth, improving our cash-generating ability. Based on this recommendation, the Board endorsed the conclusion of the Special Committee and approved the termination of the strategic review process and hence dissolved the Special Committee. The board of directors is fully supportive and confident in management's ability to deliver this plan successfully for the benefit of the company and its shareholders. I will now pass back the call to Shaun Maine. Thank you. Thank you, Thomas. With the special committee process concluding, I wanted to provide some commentary and outline a few corporate objectives our management team is now able to pursue over the upcoming fiscal year that we believe will help create value for our shareholders. After acquiring approximately CAD 1.2 billion of gross sales through 10 acquisitions last year, I paused to focus on integration, cross-sell, and cash generation. Listening to our quarterly business reviews last Friday, it is clear that the strategy is working, but it's also clear from our stock price that the value we are creating is not currently reflected in the market. Our board and management team have decided to prioritize organic growth over acquisitions in the short term to really highlight the success we are having in growing, particularly our gross profit organically, while continuing to gain efficiencies through integration. Our integration team has completed over 20 integration projects in Q1, with 23 of our 30 non-Portage companies being fully integrated, and we are targeting to have all integrations complete by the end of the year. The combination of the growth of our services and managed services, combined with the operational efficiencies, result in strong cash flow. As stated in our earnings press release, we plan on returning capital to shareholders in two main ways. The board of directors has authorized a quarterly dividend, starting with a first quarter dividend of CAD 0.01 per share. Additionally, the company will resume purchases under the NCIB and actively buy back our own stock, with Converge being the strongest acquisition the company can make today, especially with our stock price at its current levels. Joining us to assist with these matters, I would like to officially welcome Abhijit Kamboj back to the Converge team as our new Chief Financial Officer. Abhijit is well known by many from his time at Dye & Durham, and we are pleased he is returning to Converge for the next stage of our evolution. Some of you may not know that Abhijit was already a key member of our leadership team during the initial phase of our growth as a private company in 2017 and 2018. I will work closely with him in his new role as we transform our finance organization and processes as we look to align to best-in-class reporting, forecasting, and disclosure. Abhijit will assume overall responsibility for finance, accounting, tax, financial planning, and analysis, along with investor relations, which I look forward to partnering with him on to further Converge along its growth and value creation path. Turning the conversation back to our earnings results, I'd like to discuss the supporting details that helped secure such strong first quarter results and substantial year-over-year growth. We've tried to provide transparency about our backlog management as our teams continue to create and seize opportunities to land and then expand into a global client base. As stated on our Q4 call, Converge witnessed strong demand in Q1, particularly for its managed and professional services as mid-market customers continued to invest in their cloud and hybrid IT journeys. After receiving over 90% of our Q4 backlog invoice in Q1, new product orders that did not invoice in Q1 added CAD 479 million to our Q1 backlog for a total of CAD 527 million in our product backlog entering Q2. Given that CAD 234 million of orders that came in Q1 invoice in Q1, this means we received CAD 713 million in new orders in Q1, showing the strength of demand from our mid-market customers for our analytics, cybersecurity, cloud, and managed service, and digital infrastructure, and digital workplace offerings. Based on this backlog, at this point in the quarter, Q2 is looking very similar to Q4, with a similar net down since Q2 and Q4 traditionally have a higher mix of software compared to Q1 and Q3 under the new IFRS 15 guidelines. Backlogs have improved with some product categories like endpoint devices normalizing, network gear and some high-end computing platforms still have not normalized, and we conservatively suggest that backlog levels will remain elevated for the remainder of the year. The key to our resiliency truly derives from our ability to constantly be bringing scarce capabilities to mid-market customers. The best technologies, the best advice and solutions, and the highest level of service excellence. That's what builds loyalty, and we will continue to support profitable organic growth for Converge. Today, we service a diverse global and balanced customer base, as demonstrated by the makeup of our Q1 revenues, with 22% from healthcare, 16 from technology, 19% from government, 12 from financial services, and the balance 31% spread across various other industries such as manufacturing, retail, and automotive. Government was the least prepared for the work from anywhere movement during the pandemic, they invested heavily, particularly in endpoint devices throughout. Although require services like managed and end user security, the refresh cycle for these devices is in the future, resulting in government hardware spend being down year-over-year. Endpoint devices tend to be lower margin, we have maintained strong growth profit through services into this sector. However, this is being offset on the commercial side with particular strength in the healthcare sector, and we have seen broad mid-market demand for our hybrid IT services across all sectors. Notably, our financial sector has remained strong as we have not had exposure to companies affected by the recent regional bank difficulties in the U.S. It is an important differentiator and central to our strategy to understand the key profile differences of the mid-market customers. The reason we highlight how many practice areas our sales personnel are achieving is because it demonstrates strong cross-selling through over 90% of our sales reps selling more than 1 practice area and over 50% of them are selling four or more of our practice areas. Traditional VARs do not have these capabilities, especially around AI, security, and managed services. Mid-market customers are really struggling as they try to train their internal IT teams to implement these projects, which are often unsuccessful. As a byproduct of our positioning, we have consistently displayed strong net new logo growth on a quarterly basis once again, and having 103 net new logos this quarter. I would now like to pass the call over to Matt Smith to discuss our financial results in further detail. Thank you, Shaun. As Shaun highlighted, Converge continues to see robust demand for its products and services, which has translated to strong year-over-year revenue, gross profit and adjusted EBITDA growth. Beginning with our revenues, Q1 gross sales was CAD 965.3 million, growing 43% from Q1 last year, which was driven both by acquisitions and organically from companies we've owned in the current and prior periods. In dollar terms, gross sales organic growth contributed CAD 45.7 million to our Q1 results, equating to 6.8% year-over-year organic growth. On a net revenue basis, the company reported CAD 678.2 million for Q1 2023, increasing by CAD 184.2 million or 37% from 2022. Q1 product revenue, which includes hardware and software, increased 35% to CAD 536.7 million from Q1 last year. Q1 professional and other services, which includes the net revenue from public cloud resale and product support, increased 51% to CAD 106.1 million over Q1 last year, reflecting the benefit of our ongoing investment in our key consulting practice areas including analytics, cloud, and cybersecurity. Managed services revenue increased 34% to CAD 35.4 million from Q1 last year, implying annual recurring net revenue today of CAD 141.6 million. Including all third-party maintenance and cloud services, our pure services business for Q1 was CAD 117.2 million in revenue terms. We are poised to continue growing this organically in 2023. Looking at our gross profit. Gross profit performance was strong in Q1, growing by 57% from Q1 last year. While our acquisition strategy was a key driver behind reported GP growth, organic GP growth was a significant contributor as well, with organic growth of 16.5% in Q1 behind strong software and services growth, meaning that our existing portfolio of companies has generated an incremental CAD 17.9 million of GP compared to prior year. Reported gross margin increased to 25.3% compared to a margin of 22.1% in Q1 last year, largely driven by a decrease in device sales to the Canadian government, which are high volume but low margin, that was replaced by higher margin software and service revenue in the quarter. In the near term, gross margin still reflects the impact of recent acquisitions that sell proportionally more hardware when we acquire them. As we go forward and they execute on cross-selling higher margin services, we expect to see margin expansion. Adjusted EBITDA as a percentage of reported net revenue was 6.1% in Q1 compared to 6% last year. Adjusted EBITDA as a percentage of GP, which removes the noise of the net down of certain software and services, which we believe is a more meaningful measure of how effectively we turn gross profit into bottom-line profit, was 24% for Q1 as compared to 27.2% last year. As a reminder, between Q4 and Q1, we've executed on cost takeout that will result in approximately CAD 50 million in annualized SG&A savings, with the benefits to be realized throughout 2023. Despite these significant savings, in the interim, this metric also reflects the investments made in our services organization, which we expect will yield higher margins in future quarters as we grow revenue organically and services makes up a greater portion of our overall revenue. Finally, looking at our balance sheet, we finished Q1 with a strong cash position of CAD 139 million. In February, we announced the exercise of our accordion feature under existing credit terms, increasing our revolver credit facility by CAD 100 million for a total borrowing capacity of CAD 600 million. As a result, with our cash on hand plus excess capacity on our revolver, we exited Q1 with approximately CAD 280 million in available funds. In terms of cash flow, we generated cash from operations of $28.8 million in Q1, increasing from cash used in operations of $30.2 million in Q1 last year, representing an increase of $59 million year-over-year. In what is seasonally a lower cash from working capital quarter, we are pleased with the fact that cash from working capital sources increased $46 million from Q1 2022 on the strength of especially strong cash collection from our U.S. companies. We noted on our Q4 call that we expect cash from operating activities to revert closer to levels we saw in 2021. As expected, our Q1 results reinforce that we're on track to do so. With that, I'll turn the call back over to Shaun. Thank you, Matt. As promised last quarter, we have broken out financial information on Portage CyberTech to offer a better indication to investors of its scale, its rapid growth trajectory, and ultimately, the untapped value of this asset gem. To illustrate, its Q1 revenues are $4.7 million on track for its next phase of rapid growth. Portage exited Q1 with $16.6 million annualized recurring revenue, up from $15.2 million at the end of Q4, an increase of 9% in one quarter. Portage has been helping Canadian municipal and provincial government organizations responsibly accelerate digital services to citizens across Canada, and it looks forward to expanding these services to the U.S. during its expansion phase. In this regard, Converge will be an excellent channel partner for a growing product company like Portage. Portage targets at least 25% annual recurring revenue growth. As many of you are aware, we concluded 2022 with strong run rate financials on a pro forma basis and delivered Q1 as predicted. We will continue to integrate and gain efficiencies as we focus on organically growing by helping mid-market customers on their digital transformation journey. With the conclusion of the special process, I look forward to engaging with investors at our upcoming Investor Day and our annual general meeting. To provide further details on the success we are having with our strategy and our plans to reward shareholders based on operating cash flow. In particular, I will aim to expand on our integration achievements and outline the ESG roadmap opportunities that lie ahead of us. I will now open the floor up to questions. Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw from the question queue, please press star followed by two. If using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and press star one now if you do have any questions. Your first question will be from Robert Young at Canaccord. Please go ahead. Hi, good morning. In the release and the comments, you said you received a number of proposals for transactions through the strategic process. I understand you may not be able to divulge any specific bids or that sort of thing, but any color here would be helpful. You could give us a sense of where the interest was coming from, what type of valuations, you know, what was the range of multiples that they were looking at, what type of investor was it? Any type of color, you know, to give investors a better understanding of what happened through this process. I'll pass that one over to Thomas. Good morning, Rob. How are you? Good morning. As we stated, we have had several interested parties from the beginning. We also had several proposals from interested parties with different type of alternatives in terms of how we wanna move and structure the company going forward. Based on those proposals and then the evaluation the strategic committee went through together with the financial advisors, it actually led to this conclusion as we described, that we believe the company has a better potential going forward as a public company. Getting to your question in terms of, you know, we can't give you ranges or obviously, data points 'cause it's all confidential, but we can clearly state that we went through an exhaustive process, which included, you know, different ways of analyzing the proposals versus the potential of the company. We also had obviously feedback from several shareholders on their expectations. At the same time, as we all know, the microeconomic environment created some challenges also for the interested parties, especially the financial crisis in North America, with some of the banks and also with our stock price being under so much pressure. Obviously, that also was not helping in the overall process of getting proposals in at the level where we wanted or where shareholders wanted to see that. Based on that, we came to the conclusion that at this point, it's the best interest of all stakeholders that we continue as a public company, that we execute our plans. I think what you saw with the Q1 results and the way how much cash we generate now and how we actually are able to turn our business plan into success, we feel that we evaluated and came to the conclusion that this is in the best interest of everybody. Okay. Thanks for that color. Maybe if, you know, if there's, if you're gonna pause M&A for a longer period, I think you said short term, Shaun, so maybe give us a sense of what that is. Then, you know, what does a slowdown in M&A imply on your longer term targets and, you know, what are your plans for the cash balance going to be if you're not doing M&A? Yeah. With our stock at these prices, the only acquisition that makes sense is buying our own stock. It doesn't make sense for us to look at any other M&A targets with our stock price here. We've been definitely investing in our own organic growth. That's something that was already in place, and we'll be focusing, prioritizing that organic growth, and we'll aggressively buy our own stock back. What does short term mean? Like a pause. I mean, are you just gonna evaluate in the context of the market or- Yeah. Are you setting a frame? Oh, no, no. Absolutely is if our stock price was materially to change, we would reevaluate those decisions. We're exceptional at buying and integrating and cross-selling with companies. At the stock price, it makes no sense to do that. The cash, are you going to pay down debt in addition to buyback, or would you consider a large one-time buyback or a SIB? Like there's more cash here, I think, than your NCIB would have. Again, the first step is to continue on the NCIB that we had paused previously. Obviously, with such a strong cash generation, we'll be looking at how we can provide benefits back to shareholders. Also, there's the Portage asset that we have as well that can also contribute to that. Definitely we're gonna be focusing on you've got a small dividend, which allows access to the income investor. We'll be executing the NCIB then look for other ways of giving back to shareholders. Okay, thanks. I'll pass along. Thank you. Next question will be from Christian Sgro at Eight Capital. Please go ahead. Hi, good morning. I see the enterprise part of the market, you know, peers have called out more bureaucracy or red tape, maybe in purchasing decisions. You've expressed some confidence in what you're seeing in the mid-market. Is there any commentary you could offer on, you know, their buying habits, who's making the decisions there? It sounds like you're seeing no slowdown or uphill battle this year so far, which is good. What you see in the. When I say enterprise, I'm really speaking to Fortune 500. The way that they purchase is not in the mid-market, you're buying through the business. In large enterprise, you buy into procurement, and they have a network procurement group. They have a storage procurement group. They've got a services procurement group. It's done, you're one of the three into procurement. It's a very different buying environment that you go versus the mid-market, where they're looking for solutions. We have multiple areas, all part of one solution. When you're decoupled like that in the large enterprise, in the Fortune 500. They make decisions to slow down spending. They'll have refresh rates or projects that during tougher economic times, they'll slow down. A three-year renewal will make it to a one-year renewal. There's different ways, and when you have customer concentration, that's a real issue. Our, you know, top 10 customers make up less than 20% of our revenue. Most of our customers are 1 million to 10 million in size. That's kind of our sweet spot. You really that well-diversified customer base, by sector as well, really kind of it insulated us during the pandemic, and you really see that's where the strength is coming from. These mid-market companies are really struggling to deal with these new technologies. They can't find the resources in cybersecurity that CBI has provided to us or in the 5 analytics companies we bought. These are resources. They send their internal IT staff on courses. Then we'll come by with a Red Hat workshop where they're coming to see our you know, our experts in the field. They're like, "Why are we trying to do this ourselves? Why don't we let Converge help us with these problems?" That's where our success has really come, and really the structure that Greg's put into place around the practice areas and embedding the solution specialists into the regions, we're seeing tremendous success with. Both as they move to the cloud and then realize, wait, some of those workloads might come back from the cloud, but in those journeys and being their partner to the business as opposed to the large enterprise to procurement. Okay, perfect. One more question from my end. On the Q2, you called out it'll be similar to the Q4, and those are the two strong software quarters. Just wondering what other color you could provide around, you know, maybe how it'll be similar in terms of, you know, revenue and margin composition. On the product backlog, you gave some good color in the opening remarks, but no crystal ball. It's hard to say how it unwinds, but do you see all of this giving good visibility into the June quarter end here? First off, I was too optimistic last year about the supply chain normalizing, so I wanna be really cautious when we look forward. What I see at this point in the quarter, and realize this is much earlier in the quarter than last quarter, we had did a call in March where you're pretty, you know, near the end of the quarter. It's not about demand, it's about timing of shipment and things like that. When I say it's looking like Q4, I mean from both a revenue perspective and a net down perspective. You will see our revenue in Q4 and Q1 were remarkably similar. The net down was very different because now under the new IFRS 15 guidelines, we had, I think it was $30 million more of net revenue in Q1 than we did in Q4, even though gross revenue only was up by $8 million. The net down in Q4, we see similar revenue levels to Q4 with the net down being more similar and similar gross profit and EBITDA. That's a general indication of what we see at this point in the quarter. That's all very helpful, Sean. Thanks very much for taking my questions this morning. Thanks, Christian. Okay. Next question will be from Deepak Kaushal at BMO Capital Markets. Please go ahead. Hi. Good morning. Thanks for taking my questions. I've got a couple, if I may. First on the M&A environment, I know that you're pausing M&A, and you've said that for a while. But I know, you guys have relationships throughout the industry with lots of, with lots of companies, and you were actively looking in Europe. What are you seeing in terms of private company valuations? What are those management teams saying, and how has that environment changed in Q1 with the macro? We've got a very robust pipeline of acquisitions. There's no shortage of companies to buy. Right now the prices of those acquisitions make no sense compared to our stock price. Yeah, we're very good. I think we've done a wonderful job in the last five and a half years of showing how we can grow through acquisition. We believe the market will reward us more if we focus on organic growth, and the best acquisition we can make is our own stock. All the acquisitions that are out there in a very fragmented market don't make sense for us right now. Is that to say that the valuations of private companies haven't changed in the last six months? They definitely have. You have seen some trends there, but we are not, we're never gonna be the top bidder. I don't wanna say we're the consolation of the VAR world, but we're not far off. When we go in, we usually do not take part in processes. These are people we know that are, we're kind of negotiating one-on-one and we buy more hardware centric VARs, we're buying them for customers and we add the capabilities to turn them into cloud and hybrid IT providers. When we buy for capabilities, that's a different kind of story. This hasn't been something that we've been a part of a lot of processes. I can talk about how those are running. Again, we haven't done any acquisitions for us, that's a long time since Q4. Yeah, we've maintained discussions. When we go around to industry conferences, we constantly are seeing, you know, companies that are in the space and, you know, always have very good relationships with them. At some point, if it does make sense, we absolutely have the capabilities to go back on that trail. At these stock levels, that doesn't make sense. Okay. Okay, thanks for that color. I appreciate it. Then I know in your prepared remarks, you called out resilience in the financial services vertical, through this regional banking crisis. When you step back and you talk to your SMB customers as a whole across the board, what are they saying about the regional banking crisis? Are they concerned about rising credit constraints? What are your expectations here on the impact of that through the balance of the year beyond Q2? Yeah. Deepak, wanna be careful about how we define what SMB is. We're selling into mid-market, which are not the smaller guys. Mid-market kind of for us in the U.S. goes from 500 to 10,000 seats. We went and asked this to all... We did the QBRs last Friday. We asked all the regional sales leaders, "Have you seen an exposure impact?" The answer is no. Got it. Okay. I just wanted to clarify, if I may, one last question maybe for Matt. What was the targeted annualized cost savings in SG&A this year? What can we expect from non-recurring costs, you know, the cash drag on that for the calendar year for the fiscal year this year? Just to set out our EBITDA versus cash flow expectation. Yeah. Deepak, you saw some non-recurring costs in Q1 in our special charges related to the amending our credit facility in Q1. Obviously some costs associated with buying back 25% of REDNET. You will see the non-recurring costs kind of taper off in Q2 to Q4 as we focus on organic growth. We did realize savings from the SG&A takeout in Q1. Some of that is offset, as I mentioned in my remarks, with the investment in our services organization. You will see that savings kind of spread out through the balance of the year. Okay. Did you say in your prepared remarks, CAD 50 million in annualized SG&A savings, to target? CAD 15 million cumulatively between Q4 takeout and Q1 takeout. Okay. That's 50, right? 15. 15, sorry. 15. Okay. Sorry. Apologies. I'm mishearing everything this morning. I appreciate you taking my questions, and I'll pass along. Thank you, guys. Thank you. Next question will be from Rob Goff at Echelon. Please go ahead. Thank you very much, and good morning. My question would be, given your focus on organic growth, how might that influence your capital allocation perspective? In turn, how does that impact your outlook on dividends or potential or prospective share repurchases beyond the current NCIB? First, maybe Avjeet, can you handle, just our philosophy on the dividend? Absolutely. Maybe I'll just talk about the capital allocation as well. I think what you're hearing about the acquisitions that the company is really playing to its strengths. What we're good at and what our skill set is, we're great capital allocators. We're making the capital decisions based on what we see in the market. As Shaun mentioned, the best allocation of our capital today is organic growth, so investing in ourselves and investing in our shareholders, and that's where you're seeing the dividends come in. There's a few reasons for the dividend we initiated. One was to provide some return back to the shareholders, Number two was to enlarge and, or broaden our investor base for value investors or investment investors that only invest in dividend stocks. As we move forward, as we prove out our cash flow from our operating activities to prove out our organic growth, we will continue to evaluate growth of our dividend as well. Capital allocation from our perspective is not a set in stone decision today. We will continue to evaluate where our best capital is sitting and where it's invested. Thank you. As a follow-up, you did discuss the CAD 15 million of annualized savings. How should we look at the Q-on-Q progression of net savings as we go through the year? To what extent should the integration onto one platform realize additional savings? As we've mentioned, we've got 23 of our 30 non-Portage acquisitions that are fully integrated. We've got some big ones that we acquired last year that are still to be integrated. As we go through and have that completed before the end of the year, that will provide additional synergies. Again, as Matt Smith mentioned in his remarks, we've also invested in our services. Going to a growth model where you're adding salespeople and more particularly engineers, means you're making those investments. We now have growth reps, whereas before we basically buy companies for the salespeople and engineers. You're buying sales reps. Now we're looking at a growth model for there and both through our services organization. There is some offsets. Part of the not buying additional companies means it provides much more clarity on that cross-sell and growth. There is the synergies you're getting from your integration and then the investments leading to the higher growth. Particularly, you see that strength in the higher gross profit growth, and then you see the synergies happen later on in the year as those resources become fully utilized. Thank you very much. Good luck. Thanks. Next question will be from Jerome Dubreuil at Desjardins. Please go ahead. Yes, thanks. Good morning, everyone. Just to continue on this CAD 15 million synergy savings, how should we approach that? I'm guessing it's not just taking the current SG&A, annualize it, then do minus 15. Is this some sort of same percentage throughout the year and then removing CAD 15 million just so we take into account the growing scale of the business? If you can just walk us through the mechanic of the CAD 15 million. Yeah. That is headcount savings that you've seen in that reduction, based on the synergies from our integration efforts. You'll continue to see those, but I think we'll fully elaborate these more on the Investor Day and at the AGM, where we can provide a more robust model because you say there are a lot of moving parts, and we like to provide more clarity on that. If you give us a chance to come back to you, it is just first day as well. Maybe just to help you from a modeling perspective, as Matt and both Shaun mentioned their remarks, we did have CAD 15 million annualized savings, but that was offset by investments we're making in our internal capabilities. As we realize the benefits from these from a modeling perspective, I think you should model them starting in Q4 as we really start seeing the benefit. Yep, absolutely. Thanks. Second question. You know, we used to talk a lot about how our revenues from the managed services operation were trending. Is this a renewed focus with the change in terms of the strategy or we're focusing on what we used to do? No, no, absolutely. Managed service is a key focus, as is our services and managed services. Why we point so heavily to 53% of our reps in North America are selling four or more practice areas, including managed services. That recurring revenue, the high-margin recurring revenue, is of highest value to us, and it's very differentiating. One of the reasons we also went after education and healthcare customers last year with more logistics operations is because those multiple touch points is either to transition to additional managed services. Absolutely, managed services is a key part and growth and focus for us. Really what we've added, we've added a lot. What used to happen in 2020 is pretty well quarter-over-quarter, you know, our gross profit got over 27% in Q3 of 2020. I think EBITDA got to 8% in Q4. It takes longer when you buy CAD 1.2 billion of revenue to make those adjustments, that's where you'll see it happen over this year, but it's not as much quarter-over-quarter. We need a little bit more time. The other thing I'll mention is when you think about our investor day, right, we will focus on our AIM strategy. We talked about this on the last call, our ability to advise, implement, and manage. It's not just about managed services. You have to look at it holistically as professional and managed services 'cause we're driving those high-value services with our clients, and that's gonna touch all three components there. Jerome, that's Greg Berard. We'll see him. Yeah. One last one, just because the strategic shift is significant from what I can understand. It also gives you an opportunity to look more at your own business, and you touched on the integration on Rob's question. Is there maybe examples you can provide on what there was room for improvement for in terms of maybe the cross-sell, some products that are not well sold across all the acquisitions you've made, and maybe in terms of financial dashboard, maybe improvement that you can see going forward? All of the above, right. When you integrate companies, until you get great reporting, it makes the cross-sell harder. The thing that really stood out to me at our QBRs last Friday was what a great job, Greg and the team have done in embedding the security architects into the region, the CBI acquisition, and how well that's worked. Where that's the model that we need to perfect, around managed services in all the different practice areas where we've been so effective in cross-selling all of those high-end, cybersecurity services around those A-accounts, and the reps are doing a great job of it, and just making sure the rest of the groups have that as well. Definitely, when you buy... Again, we bought some, a lot of companies last year, a lot of revenue. Getting that right will make it more effective to do these things. You see the success already, and it's just driving more of that success into those accounts. Great. Thank you. Thanks, Jerome. Thank you. Next question will be from Gavin Fairweather at Cormark. Please go ahead. Oh, hey, good morning. Just going back to the mid-market, what are you hearing from customers on overall budget levels this year versus 2022? Yeah, that's the weird part. Again, Greg was really focusing on that with all the regional sales managers. In the U.S., we have not heard about eroding IT budgets in the mid-market. They have all these projects that they've are behind on moving to the cloud, move to hybrid IT environments that they still need help. I mean, there's still scarce resources. Again, not SMB, not Fortune 500, but in the mid-market, we have not seen shrinking IT budgets in the U.S. Got it. Good to hear. Just secondly, you've mentioned a few times the investment in managed services and professional services capacity. Can you give us a sense of the magnitude of the organic investments that you're making, the number of heads that you're adding, and how should we think about kind of what's been added in recent quarters versus what you're gonna add over the balance of 2023? Part of this, and we'll really expand on this in the investor day, is when you have the regions identified that you have to have local pre-sales support and architects in regions to effectively get the cross-sell. In the U.S., we have five regions and one in Canada. Embedding those practice areas. You buy a CBI, you need to make sure that those are all represented in the region. Especially on the sales enablement side and those pre-sales architects which are partially billable, they really need to be in region. You're adding those people, but we'll provide more of the quantum of that in the investor day. Where I didn't presume. Sorry, go ahead. I was just gonna say, one of the things to think about, right, is the pre-sales solution architects and the solution specialists in region, and then also some of the investments we're making around some of the solutions we've built, like IP4G, like IBM Guardium Data Protection solution. Not only are we making investments in resources, but also in building out the technology and the solutions that our clients are driving, right? We're seeing the momentum behind some of those solutions that we announced in the second half of last year really take hold now, and the pipeline has grown significantly. Think of it as an investment in resources in region. We align with the account execs that have the strategic relationships with our clients, but then also building out the solutions we've built, and we'll talk more about that at the investment day. You know, you need to think about not only investment in resources, but also investment in solutions and building some of those out to drive deeper capabilities across our portfolio. Got it. Thanks so much. So- Thank you. Next question will be from David Kwan at TD Securities. Please go ahead. Good morning. I guess I'm happy to hear that you guys are increasing focus on buying back your shares, but as well kind of pushing out the acquisition activity, I guess at least if the shares remain at current levels here. you know, I think the extended pause in this M&A activity should help you drive stronger margins. Maybe can you talk about how we should think about your adjusted EBITDA margins here, as we progress throughout the year? Kinda what kind of margin expansion do you think you can achieve this year? Yeah. I think, again, one of these things that we'll have to do is kind of go through it in more detail at the investor day. The timing of this, again, we ask you to be more patient in the transitions, whereas in 2020 you saw it happen, all happen in a quarter, whereas some of these things, the longer sales cycle around managed services means like the investments we made even in Q1 in IP4G here in Canada, it will take by Q3 or Q4 to really see the impact of those. Say it'll happen throughout the year. You'll see the improvement. To really model it out, I think at the investor day we'll spend more time on that. Okay. Thanks, Shaun, for that. You talked about some of these in organic investments that you're making, some of these growth sales reps, et cetera. Can you talk about the labor markets and how easy it is to try to find these type of people? At some point, I know you talked about from an M&A perspective, particularly in North America, that you might look to acquisitions, maybe not these share levels, but do you feel that you can meet the customer demand across your various IT solutions just by organic hiring, or do you feel at some point maybe you might need to make an acquisition? Yes, I think this is a very different labor market. Again, it's amazing how in the last three years you've had different labor markets. This is one where you can find people. Also I think one of the things that really attracts high talented, especially in the engineering side, is our teams of existing people that are very specialized and the culture that you create for them. Retention, it's not just about money, it's way more about culture. This is a people business, and how you retain talent, a lot of times when we've been in partnering and acquiring with some of the services partners, a lot of it is around culture. How you attract and retain talent, I'd say a lot of it is culture but this environment as well has changed. None of these resources around cyber or analytics or managed services, these resources don't grow on trees. These are specialized resources, people from these spaces know other good people. What you don't wanna be is the only smart person in a group who has to then do all the work. Smart people attract other smart people. They love working on cool projects. Again, with over 100 solutions, engineers in each one of our practice areas, we have a critical mass in all of them where we can really make a real impact. Greg, anything to add to that? The only other thing I would add is, you know, when you think about it from a sales perspective and the portfolio we have, right? It's easy for us to recruit high-end sales specialists because they wanna drive the portfolio and value with their clients, right? Shaun touched on it. You know, the good thing for us is we have the ability to train these architects and train these technical resources across multiple practices, so it gives them the growth opportunity as well from a career perspective. Between the portfolio we have for our sellers and the deep tech capabilities we have across the solutions, it gives us the opportunity to recruit on both ends. Thanks, Greg. Shaun, last question here. Just on Portage, can you just maybe talk about what you're looking at doing in terms of monetizing your 51% stake there? Like, are you running a formal sales process? What types of transactions are you contemplating? Originally we had planned on going public. The markets have not been conducive to that. We are exploring several various options to continue Portage in its journey. It's done a super job in, you know, responsibly enabling digital services to governments in Canada and the services they provide to citizens. It's really how do we best support them, and we're looking at a range of options. This market is not one of the best markets to look at alternatives, but we keep them all open. We're progressing down that path. We'll keep you updated as we make progress. All right. Thanks, guys. Thanks. Next question is from Divya Goyal at Scotiabank. Please go ahead. Good morning, everyone. Thanks a lot for all the color thus far. I wanted to understand, working capital this quarter was a very important driver for the overall cash flows. Could you help us understand the sustainability of the numbers? We understand this quarter it was the government contracts or the short order of the government contracts, how can we model those in on a go-forward basis given NCIB dividends, everything else is dependent on that. Hey, Divya, it's Abhijit here. From a working capital perspective, our strategy and our goal has always been to keep working capital either slightly negative or positive. Ultimately, the goal is to keep it at zero level. From a go-forward modeling perspective, I would say starting from Q3 onwards, that's how we should model it. That's great color. On the European expansion, Shaun, if you could provide a little bit more color on what are some of the regions where you're looking to expand and some of the industries. The company already has good presence in the education sector, and we talked about it. If you could help us understand where things are going from a broader European expansion standpoint, and how are you seeing the markets react overall? Yeah. Obviously, we're very, very strong. If you go back to our phase one strategy, Red Hat and VMware were clearly differentiated in ways of getting into the commercial sector, and we have incredibly strong relationships. You know, John Teltsch, he's from channel from IBM, has great relationships there as well. That's the same as we move from education into the commercial sector, we're able to do that based on a lot of the solutions and successes we had in North America, in both Germany and the UK. We will be focusing more on organically than originally it had been planned to do it on M&A. The same type of strategy just happens when you're doing it organically, it takes a little longer to do. Going from education, you've got a base and management, then you're really investing in from the kind of the hybrid IT skills and software into the commercial space in Europe. Should we expect, if anything, should we expect to see M&A in Europe more than in North America, given that's gonna be one of the regions of expansion? Do you have any targets in pipeline which might not materialize now but towards the later part of the year? We absolutely have targets in pipeline, but as I mentioned, no acquisition makes sense with our stock at these prices. We wouldn't do them now. Absolutely, we have a long list of targets of things that we give, we will prioritize based on our capital allocation strategy. Maybe I just to clarify on the capital allocation, obviously our goal is to buy back our shares as much as we can at these prices. Second would be continuing investing in our organic growth. Third would be looking at external M&A or repaying our debt. That's helpful. Thanks, guys. Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star followed by one. Your next question will be from Stephanie Price at CIBC. Please go ahead. Hi, good morning. Hey. Hey. You mentioned that Q2 should look a lot like Q4. Just hoping you can dig into that a little bit. Were you talking strictly about revenue growth there, or were you talking about margins or how should we think about that comment? Yeah, I think all of the above. I think it's a good model to view it as a heavier software quarter. With the backlog being where it is, I think looking very much like Q4 would be a good guidance to give. Okay, that's helpful. Then hopefully you can dig a little bit more into the growth you're seeing in the managed services business and how you're thinking about ARR targets for the year. I think in the past you've provided some. We're not providing targets, but we are investing heavily in the growth. The real investments we've made around IP4G, we're seeing that development. That's something in the Investor Day as well to pay particular attention to is the IP4G and how that very specialized solution allows us to get into customers and then land and expand around those managed services. These are customers and yet when you provide very specialized solutions that others don't, it's again, working in Europe as well where we have the IP4G data centers there and providing customer solutions they cannot get from other people. From there going and cross-selling the other parts of the solution stack. I think we're using this differentiator. Our net promoter score remains high over 50. These are key parts of having these managed services customers that are happy that we upsell. The big difference is the sales cycle is much longer around these deals than it is for our traditional, either product business, hardware, software, or our services business. The pipeline is what we're kinda. We need to have a better way of communicating that to you so you can better gauge how to look at that. It's an area we are investing heavily into, and we'll talk about more about that at the Investor Day. Greg, yeah. One other thing I'll comment is we talked a lot about investment regionally, right? Within the managed services team, we've invested with solution specialists in each region. We also instituted a client success manager program in 2022, going after our current install. We're seeing our upsell, cross-sell within our managed services portfolio grow. We've seen our overall managed services pipeline grow 60% year-over-year from Q1 last year. We're really seeing the team start to work together and drive more and more transactions across not just IP4G, but the entire managed services portfolio. That CSM team will help us drive more upselling, cross-sell across the teams as well. Okay, great. That's helpful color. Just one more for me, just on the Investor Day. I'm not sure I saw a date on that. Has that been announced yet, or how are you thinking about the timing there? We have not announced the date yet, Stephanie. We will in short order as soon as we. We wanna do it at Git more than one day before we announce it but. Fair. Thank you very much. Thank you. Next question will be from Steven Li at Raymond James. Please go ahead. Hey, Shaun. I heard you say you wanted to be a little bit more conservative. Are you comfortable with consensus at that CAD 191 for the year or you'd rather it be a little bit conservative? The reason I'm asking is because based on what you said for Q2, your first half will be that's gonna be about CAD 84. That would imply CAD 107 in the second half. Second half would be up 27% from the first half. Is that okay? Thanks. I think as of right now, we're probably in that ballpark, but I think for your modeling purposes, I would be a bit conservative. All right. Thanks. It's primarily driven by all the internal investments we're gonna be making. As we've talked about, we're investing in more and more people internally. That's going to drive our SG&A a little bit higher, and those benefits may start, will likely start paying off in Q4. For the full year, we might not be at the 190 mark. I think from a modeling perspective, it's, if it's a bit conservative, I think that'd be better. That's great. Thank you. Thank you. At this time, gentlemen, we have no further questions registered. Please proceed with closing remarks. Just wanted to thank everyone today for participating on our call. We look forward to updating you at both our Investor Day and our AGM. Thanks, all. Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines. Have a great day.