Good afternoon, ladies and gentlemen, and welcome to The Descartes Systems Group quarterly results conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, March 1, 2023. I would now like to turn the conference over to Scott Pagan. Please go ahead. Thanks, and good afternoon, everyone. Joining me remotely on the call today are Ed Ryan, CEO, and Allan Brett, CFO. We trust that everyone has received a copy of our financial results press release that was issued earlier today. Portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of those laws. These forward-looking statements include statements related to our assessment of the current and future impact of geopolitical and economic uncertainty on our business and financial condition. Descartes' operating performance, financial results and condition, Descartes' gross and operating margins, and any variation in those margins, cash flow and use of cash, business outlook, baseline revenues, baseline operating expenses and baseline calibration, anticipated and potential revenue losses and gains, anticipated recognition and expensing of specific revenues and expenses, potential acquisitions and acquisition strategy, cost reduction and integration initiatives and other matters that may constitute forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Descartes to differ materially from the anticipated results, performance or achievements implied by such forward-looking statements. These factors are outlined in the press release and in the section entitled Certain Factors That May Affect Future Results in documents filed and furnished with the SEC, the OSC, and other securities commissions across Canada, including our management's discussion and analysis filed today. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. You're cautioned that such information may not be appropriate for other purposes. We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based, except as required by law. With that, let me turn the call over to Ed. Hey, great. Thanks, Scott, and welcome everyone to the call. We had an excellent fourth quarter and year with record financial results. We've also made some significant investments in the business. We're excited to go over those with you and give you some perspective about the business environment we see right now. First, let me give you a roadmap for this call. I'll start with highlighting some aspects of our financial results, how our business performed in the last quarter, and some investments we've made. I'll hand the call over to Allan, who will go over the Q4 and annual financial results in more detail. I'll come back and provide an update on the current business environment and how our business is calibrated, and we'll then open it up to the operator to coordinate the Q&A portion of the call. Let's get started by looking at our year. Key metrics we monitor include revenues to profits to cash flow from operations and return on investment. For this past year, we had record performance in each of those areas. Total revenues were up 14% in the year, with services revenues up 15%. Net income and earnings per share were both up%, while adjusted EBITDA was up 16%. We generated almost $200 million in cash from operations, representing 89% of adjusted EBITDA, 92% if you exclude the acquisition earn-out payments we made during the year that went through cash from operations. A good headwind to have considering how well the acquisitions performed and contributed to our businesses. The year ended strongly for us as well. We had record Q4 quarterly revenues, with services revenues up 14%. We had record profits of almost $30 million in net income and $55 million of adjusted EBITDA. We generated more than $50 million in cash from operations, representing 91% of our adjusted EBITDA. We used that cash flow and our balance sheet to make further investments in our business. A very strong financial quarter and year for us. These results happened in a very challenging foreign exchange environment. Our annual revenues would have been $14 million higher if we'd used last year's FX rates, and our quarterly revenues would have been $3 million higher. While we're fairly naturally hedged, we still face some foreign exchange headwinds to adjusted EBITDA. Alan will go into this in more detail later. However, strong results that might have been even stronger in a different foreign exchange environment. At the end of the year, we had $276 million in cash and were debt-free, with an undrawn $350 million line of credit that we just extended the term on. We used some of that cash after the year to buy GroundCloud, which I'll discuss in a few minutes. We remain well-capitalized, cash generating, debt-free and ready to continue to invest in our business. We believe a company like ours is well-positioned to continue to thrive in market conditions like these. There are some areas in our business that were very strong in the fourth quarter. Our data content businesses continue to have high demand, particularly in denied party screening, as companies continue to deal with complying with the myriad of new sanctions that have come out relating to the conflict in the Ukraine. Our transportation management businesses saw strong growth with demand for MacroPoint's real-time visibility to shipments across all modes leading the way. We saw a good seasonal bump in e-commerce volumes to end the year. Transportation volumes were otherwise as we would expect in our business to end the year, given seasonality. Descartes was able to deliver superior financial performance last year while continuing to invest in our business. We continued our approach of making both organic and acquisition investments. On the organic side, the improvement we saw this past year in organic growth was helped by the customer facing investments we made in our business in the year and in the prior fiscal years. We expanded our sales and marketing groups. We created a pillar focused on internal management oversight structure. We established and expanded a customer success group designed to improve the customer experience and identify additional ways our customers can get value from using our solutions and consequently improve our revenue and customer retention. These investments were made while balancing achieving our immediate financial targets and positioning the company even better for the future. This FY 2023 was no exception to that organic investment. We organically added more than 150 people to our business this year. Many of those roles were designed to help us with future organic growth, with sales, customer success and development continuing to be a focus area for hires. We believe we built a resilient business that our customers can rely on for their needs today and tomorrow, and that's a key reason we continue to invest for not just the business we have today, but the business we'll have in the near future. We take that same customer centric approach to considering acquisition investments in our business. Last fiscal year, we brought 4 new businesses into Descartes, with our customers continuing to see e-commerce as a growth and focus area. We combined with NetCHB in February 2022 to strengthen our e-commerce customs filing capabilities. As our customers expressed interest in enhanced routing and scheduling solutions that leveraged artificial intelligence and machine learning, we combined with Foxtrot in April, and with our customers moving more and more small parcel goods, particularly in e-commerce, we teamed up with XPS in June of 2022. Our last deal of the FY 2023 was in January when we combined with Supply Vision. Our logistics service provider customers are in the midst of a big push to digitize their operations, both internal and customer facing. We've made several historical investments to help them out, including Kontainers, Portrix, and QuestaWeb. With Supply Vision, we're adding to that arsenal of tools to help logistics service providers better manage the life cycle of shipments for their customers. It's a comprehensive digital system that helps them quote, route, and book shipments through to final delivery. And when combined with our real time shipment visibility solutions like MacroPoint, it provides comprehensive end-to-end solution for them. We can also link Supply Vision into the Global Logistics Network, giving Supply Vision customers broad access to a community of trading partners and services that can enhance their own business. While there was less than a month of Supply Vision in our Q4 results, we're thrilled with the early returns and excited to have the Supply Vision team on board. Welcome to them all. In the end of the FY 2023, we ended up closing one of the larger acquisitions we've done, like the previous acquisitions I've described, this one was very much guided by customer demand and input. Starting from even before the pandemic, final mile delivery to homes and businesses has become a critical part of the logistics cycle. There are tens of thousands of independent final mile delivery specialists and carriers in North America alone. Before you even consider all the private fleets also making these deliveries. With the increased delivery volumes, our customers have been eager for more help to make these delivery operations more efficient, reliable, and safe. GroundCloud is the perfect fit for this market. It provides a robust solution that helps independent final mile delivery companies manage their operations with particular specialization for service providers who are performing the bulk of their deliveries for large transportation brands such as FedEx, Amazon, or Front Door Collective. The platform lets them receive delivery orders, plan and execute the routes, train and monitor driver performance, manage their assets and resources, and analyze their operating efficiency. GroundCloud is also integrated to video telematics solutions to provide driving event detection and verification, combining with reactive coaching solutions to improve driver safety. It's a great solution for the market and an excellent complement to our investment in ShipTrack for the carrier market. GroundCloud is a well-run and profitable business with lots of room for future growth with independent last mile delivery companies. What really distinguishes GroundCloud is its specialization and attention to driver safety. They've done an excellent job of creating and providing easily digestible driver training video content deliverable to drivers' mobile devices. We've seen increased attention to driver and worker safety through our broader customer base, particularly in private fleet. This is often driven by environmental, social, and governance views of having safer roads for our communities and safer work environments, but also for economic reasons due to the high cost of accidents, litigation, and resulting insurance impact. We believe that GroundCloud safety and driver training solutions can be very helpful to our private fleet clients in having safer businesses at a meaningful impact on their communities. We're very excited to have GroundCloud as part of Descartes. Welcome to the whole team. We look forward to being able to report back on what we've been able to accomplish together in the near future. With that, let me just summarize with a hand over to Alan to give the full financial details on the year and quarter. We had record financial results. The business performed well. We believe that's a good reflection of the value that our customers continue to get from our solutions and the hard work that our team continues to put in for our customers. Even with broader economic challenges last year, including big foreign exchange headwinds, we were able to achieve our targets, and we did it while continuing to invest in our business to drive our longer-term growth. We continued to make internal investments in customer-facing roles to drive future organic growth. We also invested in four acquisitions to address areas where our customers continue to see growth. We end the year in a great financial shape with a large customer roster and a high percentage of recurring revenues. We ended the year with $276 million in cash, $350 million in available credit, and a market opportunity where we can continue to grow the business for our customers, both organically and through acquisition. Following the year, we used some of that cash to complete one of the largest acquisitions to date. We remain focused on profitable growth so that we can continue to ensure that our customers have a secure, stable, and growing technology partner that can help them with their challenges well into the future. My thanks to all Descartes team members for everything they've done to contribute to a great year and continuing to have our business in an enviable position for future success. I'll now turn the call over to Alan to go through our annual and Q4 financial results in more detail. Alan? Okay, Ed. As indicated, I'm gonna walk you through our financial highlights for our fourth quarter and year-ended January 31st. We are pleased to report record quarterly revenues of $125.1 million this quarter, an increase of 11% from revenues of $112.4 million in Q4 of last year. This revenue growth was achieved despite the continued headwind from FX resulting from a strong US dollar. On an FX-neutral basis, our revenue growth would have been over $3 million higher in Q4, meaning that our revenue growth year-over-year would have been over 14% for Q4. Our revenue mix in the quarter continued to be very strong, with services revenue increasing 14% to $113.4 million, up from $99.5 million in the fourth quarter last year. With services revenue increasing to 91% of total revenue this quarter, up from 89% of total revenue in Q4 last year. Removing the impact of both the recent acquisitions as well as the negative impacts from FX that we had mentioned, on a like-for-like basis, we would estimate that our growth in services revenue from new and existing customers would have been approximately 9.5% this quarter when compared to the same quarter last year. Professional services and other revenue, including hardware revenue, came in at $10.0 million or 8% of revenue, down slightly from $11.7 million or 10% of revenue as a result of lower hardware revenue, as well as a decrease in professional service as more of our solution sales require less implementation or configuration work, which is certainly consistent with our long-term plans. In addition, license revenue came in at $1.7 million compared to $1.2 million last year in the fourth quarter, consistent at just 1% of revenue. For the year, revenue was a record $486.0 million, up 14.4% from revenue of $424.7 million in the previous year. The foreign exchange headwinds on revenue were significant all of last year, with a negative impact on revenue of $14 million from FX. As a result, revenue growth was closer to 18% on a currency-neutral basis. For the year, services revenue came in at $435.7 million, up 15% from $378.7 million in Q4 last year. Gross margin increased to 77% of revenue for the fourth quarter and the year, up from gross margin of 76% for the fourth quarter and the entire period last year. This slight improvement in gross margin is consistent with the operating leverage that we would expect to achieve as a result of the continued growth in our business. Operating expenses in the fourth quarter and the year-end of January 31st increased primarily related to the impact of recent acquisitions. Also as a result of additional investments that we've made in our business over the past year, primarily, as Ed said, in the areas of marketing, sales, product development, and network security. Adjusted EBITDA came in at a record $55.4 million in the fourth quarter, up 11% from adjusted EBITDA of $50.1 million in the fourth quarter last year. While we continue to be fairly naturally hedged to foreign exchange rates, our adjusted EBITDA would have also been higher if it were not for the negative impact from FX this quarter. Simply put, the euro and British Pound were weaker to the US dollar than the Canadian dollar in this period, resulting in this loss on the adjusted EBITDA line. Looking at the annual results. As a result of the revenue growth and gross margin expansion from continued leverage that we described earlier, we continue to see strong adjusted EBITDA growth to a record $215.2 million or 44.3% of revenue for the year, up 15.9% from $185.7 million or 43.7% of revenue last year. We should note that for the fifth year in a row, as a percentage of revenue, our adjusted EBITDA continued to increase as we benefit from the operating margin sorry, the operating leverage as we grow the business. With these solid operating results, cash flow generated from operations came in at $50.6 million or 91% of adjusted EBITDA in the fourth quarter this year, up 11% from operating cash flow of $45.5 million or 91% of adjusted EBITDA in Q4 last year. For the year, cash flow from operations was $192.4 million or 98% of adjusted EBITDA, up from $176.1 million or 95% of adjusted EBITDA last year. In addition, we should note that as a result of the stronger than expected results on the past acquisitions of both ShipTrack and Kontainers, we ended up paying an additional $5.6 million in earnouts compared to our original estimates were made at the time of those acquisitions. As a result, those additional cash payments went through our cash flow from operations this year. Excluding the impact of those additional earnout payments, cash flow from operations would have been approximately 92% of adjusted EBITDA for the year. Going forward, we expect to continue to see strong operating cash flow conversion in the range of 85%-90% of our adjusted EBITDA for the years ahead. Of course, subject to unusual events and quarterly fluctuations. From a GAAP earnings perspective, net income for the fourth quarter came in at $29.8 million, up 55% from net income of $19.2 million in the fourth quarter last year. For the year, net income was $102.2 million, or $1.18 per diluted common share, up 18.4% from $86.3 million, or $1 per diluted common share last year. Overall, as Ed mentioned earlier, we're certainly pleased with our operating results for fiscal 2023, as our continued revenue growth allowed us to invest in several areas of our business while still allowing us to achieve 15.9% growth in adjusted EBITDA, expand our adjusted EBITDA margin to 44.3% of revenue, and achieve growth in our cash flow from operations for the year. If we look at the balance sheet, our cash balances totaled $276.4 million at the end of January, and we did not have any borrowings under our credit facility at the end of the year. As Ed mentioned, subsequent to year-end, on February 14th, we announced we used approximately $138 million of our existing cash balances to complete the GroundCloud acquisition, which Ed described in detail a little earlier. As a result, we still have approximately $138 million in cash balances, as well as $350 million available to us to draw under our credit facility for future acquisitions. Clearly, we continue to be well-capitalized to allow us to consider all acquisition opportunities in our market consistent with our business plan. As we look to the current year, our fiscal 2024, we should note the following. After incurring approximately $6.1 million in additional capital additions this past year, we expect to incur approximately $5 million-$7 million in additional CapEx this coming year. We expect amortization expense will be approximately $15 million for fiscal 2024, with this figure being subject to adjustment for foreign exchange rates, foreign exchange rate changes, and any future acquisitions. Our income tax rate in the fourth quarter came in at approximately 17.5% of pre-tax income, resulting in a tax rate for the year of approximately 24%, which is slightly lower than our statutory tax rate, mainly as a result of the reversal of certain uncertain tax positions that we recorded in Q4 of this year. Looking at FY 2024, we would currently expect that our tax rate could be slightly lower than our statutory tax rate if certain other uncertain tax positions are released. As a result, we're expecting the tax rate to be in the range of 22% to 27% of our pre-tax income in our fiscal 2024. As always, we should add that our tax rate may fluctuate from quarter to quarter from one-time tax items that may arise as we operate internationally across multiple countries. Finally, we currently expect stock compensation to be approximately $10 million to $11 million for fiscal 2024, subject to any future equity grants as well as any future forfeitures of stock options or share units. With that, I'll turn it back over to Ed to wrap up with our baseline calibration. Hey, thanks, Alan. We're already a month into our new fiscal year and quarter. We've already been busy by completing the acquisition of GroundCloud. We're excited about the upcoming year and our business. We remain cautious about the broader economic circumstances that are out there. There's high interest rates, higher inflation, a pervasive conflict in Ukraine that's into its second year, and the various recessionary pressures and economic discussion. We've seen some companies taking actions to ready their business for what may come. For us, we will be cautious in the face of uncertainty. Supply chain and logistics continues to be a critical business function for our customers, regardless of the economic circumstances. I wanted to share some areas that our customers are monitoring and that shape the market that we're currently operating in. The first is, U.S. ocean container imports are at pre-pandemic levels. Based on public data available through our Datamyne service, it's clear that there was a pullback in ocean imports over the past six months, starting in August. Current volumes are 15% to 20% lower than the pandemic highs, but are consistent with the levels we saw in 2019 and 2020. There's less impact from COVID delays in China. Part of the reason for the pullback in ocean imports was China's approach to zero COVID, with many businesses critical to the international logistics and supply chains either shuttered or severely understaffed. Recently, China has eased up on that policy, our customers anticipate goods may start to flow more freely. The next is port transit delays have improved. As volumes came off a bit, the backlog that had been seen at many ports has begun to work through. We're no longer seeing ocean ports with long lines of ships offshore and containers that are otherwise starting to move through the ground system more efficiently. The next is U.S. ocean imports have shifted to East Coast ports. There's been a recent trend where volumes have shifted to East Coast ports. That's likely in part due to continued labor challenges on the West Coast. There still isn't a contract in place with the dock workers and new regulations impacting truck drivers being classified as employees rather than independent contractors in California. Our customers are mindful of this import flow change when making their decisions. Ocean freight rates are expected to come down. During the pandemic, ocean rates surged almost $20,000 a container from pre-pandemic $2,000-$3,000 levels. The spring period is when many shippers and carriers negotiate their freight rates for the upcoming year. Our customers are expecting that rates will come down, that may be a catalyst for volumes to increase over time. Our customers anticipate that shipment volumes may increase as the year progresses. Prior to this past holiday season, many retailers had excess inventory accordingly didn't order or ship as much to replenish inventory. That we're through the holiday period, we're hearing retailers are mindful of the broader economic circumstances, but are cautiously looking to replenish inventories. That may have retailer-driven shipment volumes increase as the year progresses. Final mile delivery is still key. During the pandemic, e-commerce volumes grew at unprecedented rates. We're still seeing growth in e-commerce, just not as strong as during the pandemic. E-commerce growth has in part contributed to a continued focus on the importance of last mile delivery. Gone are the days of a home delivery of anything being a novelty. Recently, Target announced that it was investing $100 million into its network to improve next-day and final-mile delivery. Amazon just announced it's enhancing its delivery options. Final mile is still a big topic for retailers. Our recent acquisition investments reflect that feedback. The next is ESG focus impacts supply chain and logistics. Environmental, social, and governance discussions in boardrooms are having a meaningful impact on supply chain and logistics decisions. Our customers are looking for detailed information from their trading partners. They can meet and report on their own ESG goals. Our customers need this information to show their compliance with existing and pending regulations addressing such issues as use of forced labor, environmental impact of operations, and trading with restricted parties. We've recently seen several countries roll out additional sanctions on entities and people connected with the Ukraine conflict, we anticipate compliance and ESG reporting solutions will continue to get mind share with our customers. Those are some of the things we're hearing from our customers and seeing in our business, things that also inform our calibration for the quarter. Our business is designed to be predictable and consistent. We believe that stability and reliability are valuable to our customers, employees, and our broader stakeholders. To deliver this consistency, we continue to operate from the following principles. Our long-term plan is for our business to grow adjusted EBITDA 10%-15% annually. We grow through a combination of organic growth and acquisitions. We take a neutral party approach to building and operating solutions on our Global Logistics Network. We don't favor any particular party. We run our business for all supply chain participants, connecting shippers, carriers, logistics service providers, and customs authorities. When we overperform, we try to reinvest that overperformance back into our business. We focus on recurring revenues and establishing relationships with customers for life. Finally, we thrive on operating a predictable business that allows us forward visibility to our revenues and investment paybacks. In our annual report, we've provided a comprehensive description of baseline revenues, baseline calibration, and their limitations. We typically provide calibration as of the first day of the fiscal period. However, with the GroundCloud acquisition happening on February 14th, 2023 we've updated calibration to that date and included those aspects of GroundCloud for which we feel we have sufficient visibility to at this point. As of February 14, 2023, using a foreign exchange rate of $0.75 to the Canadian dollar, 1.07 to the EUR and 1.21 to the GBP, we estimate that our baseline revenues for the first quarter of 2024 are approximately $117 million, and our baseline operating expenses are approximately $74 million. We consider this to be our baseline adjusted EBITDA calibration of approximately $43 million for the first quarter of 2024, or approximately 37% of our baseline revenues as at February 14, 2023. Last quarter, we indicated that our targeted adjusted EBITDA operating margin range was 40% to 45%. Last year in Q1 and Q2, we were at 44%, in Q3 we were at 45%, and in Q4 we were at 44%. We're maintaining that same 40% to 45% for this fiscal year. As we've indicated in the past, we anticipate that our margin will vary in that range given such things as foreign exchange movements and completing larger acquisitions that are operating below our aggregate margin at the time of acquisition. GroundCloud is a profitable, cash-generating business and one of the larger acquisitions we've ever done. GroundCloud currently operates at a lower margin than Descartes' target aggregate adjusted EBITDA margin, primarily as a result of its revenue mix with higher professional services from in-person safety training courses that complement the software platform. We anticipate that forQ1, our adjusted EBITDA operating margin could be lower than Q4 by between 1 and 2 percentage points as we work on integrating this business into Descartes. We've included that margin impact into our consideration in providing our Q1 calibration. We've got lots of exciting things planned for our business this year. We've already completed some exciting acquisitions and other investments that we believe will be a big benefit to our customers. It remains an uncertain, broader economic environment while we believe our proven track record of execution, solid capital structure, and customer focus will serve us well to have a great fiscal year. Thanks to everyone for joining us on the call today. As always, we're available to talk to you about our business in whatever manner is most convenient for you. With that, I'll turn the call over to the operator to handle the Q&A portion of the call. Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session. If you have a question, please press star followed by one on your touch tone phone. You will hear a one tone prompt acknowledging your request. One moment please for your first question. Your first question comes from the line of Matt Pfau from William Blair. Your line is now open. Hey, great. Thanks for taking my questions. Ed, just circling back to all the macro comments that you made, maybe just help us understand what the impact you're seeing on your business from those comments is. Are you seeing any impact on either transactions or deal closures as a result of some of the items you called out? Minor, you know, there's some parts of our business that are really doing well right now. I think I called a few of those out during the call and, you know, while our ocean business was being impacted, you know, minor way by shipment volumes being down, we had other parts of the business booming. I think that's why you see the results you saw today. Okay, great. In terms of acquisitions, you know, I think larger acquisitions is an area that you called out where there was perhaps a bigger discrepancy between, you know, valuations you were willing to pay and where valuation expectations were. You made a larger acquisition with GroundCloud. Does that sort of signal that that market's opening back up? Or maybe just some comments in terms of what you're seeing there. Yeah. We're seeing a healthy market for that. I mean the prices can be all over the place depending on the company and who's selling them and what banks representing them and things like that. We're certainly seeing lots of opportunity out there and you can see we just pulled off two acquisitions in the past couple months. We certainly see a market that's open for business. Okay, great. Thank you. Thanks, Matt. As a reminder, it is star one to ask a question. Your next question comes from the line of Paul Treiber from RBC Capital Markets. Your line is now open. Thanks very much, and good afternoon. Just hoping that you could elaborate on some of the financial details for GroundCloud. Specifically, you mentioned the mix of professional services is higher than your business. You know, how should we think about the mix there? Any additional comments you could provide on the company's, you know, revenue or growth, or the magnitude of profitability that's different than Descartes. Okay. Yeah. Let me handle that at a high level, and I'll see if Alan has any other comments. If you think about their business, they're providing training services to customers. A lot of it's based on driver feedback on telematics devices, where they're seeing drivers do certain things during the day, and then they're recommending them for video-based training at night when they're maybe in their cab or before they go to work the next morning. At the same time, when they start those businesses off, when they start new customers off, they go through a comprehensive training program that involves on-site training. That's why you see a little higher professional services rates in those businesses than maybe Descartes' accustomed to. Normally, we say in our business we would like it if there was no professional services because that would mean the products were all easy to install and no one had to get them anything complicated to get them in. There's obviously products even in our business that are more sophisticated and take a little while to put in. GroundCloud's kind of the same. You know, when they get a new customer, as part of the process, they provide a comprehensive training program for all the drivers and then specific behavior-based training, as the drivers driving routes during each business day, and they're seeing errors being made, and they're recommending them based on those errors for videos that they might watch at night. I don't know if you have anything to add to that, Alan, but... Yeah. Not a lot. I think from a revenue perspective, it still fits the mold of what we wanna buy, which is predominantly a recurring revenue business. In this case, yes, the professional service and other category will be higher than Descartes', than Descartes' number. We were at 8%, 9%. It'll probably be double that%. It still fits the exact mold of what you want, which is very predictable, subscription-based business recurring. Okay, that's helpful. It puts it in the ballpark. That's helpful. How do you see it integrating with the remainder or complementing the remainder of your existing mobile routing and telematics business? If you think about it, we're helping these same types of companies plan routes every day. It's a very similar customer base. We do business with a lot of delivery companies that are doing, you know, daily route plans in our routing software to deliver to the home, and that's a, you know, a great customer base to sell this into. A lot of the companies that we've bought, you know, they have a certain type of customer they go after, and they have a couple hundred of them or a couple thousand of them, whatever it is, and we have a couple hundred or a couple thousand more than that. We're able to go out and quickly bring our solutions to a much broader audience, and that's a, you know, a big advantage for us when we buy a company like GroundCloud. Okay. Just one last one. Just you know, can you speak to the impact of inflation on your business? You know, to what degree or not, you know, have you know, updated pricing for inflation? How do we think about it from a cost point of view? We've had some impact from all of it. You know, you've probably heard us say in the past that we typically only raise prices in the areas where our costs are going up directly. We have avoided in the past, you know, inflation-based price increases for, on our network and the transaction type businesses. That changed when the, you know, the inflation rates went up to 7%, 8% and maybe higher around the world over the last twi years. You know, we started to make some adjustments to customer prices, minor compared to maybe what some other companies were doing. I would say it was fairly well received for a price increase within our customer base. It was probably seen as fair. You know, on the cost side, we've certainly seen some of it, you know, we had certainly have some cost increase in some of our numbers. Our costs are going up maybe a little faster than they might have otherwise. We're more than making up for that with the growth in our business. Thanks for taking my questions. Hey, thanks, Paul. Your next question comes from the line of Justin Long from Stephens. Your line is now open. Thanks. Following up on the GroundCloud acquisition, is there anything you can share on what financial targets need to be achieved in order for that earn-out to be paid? Out of the gate, anything you can, help us, or could you help us with the kinda year one revenue contribution we should be expecting from this business? Let me start with that at least. without getting into the specifics because I don't wanna provide competitive information out there to people that might not be on our side. Suffice it to say, like every acquisition we've done, when we have an earn-out, we are more than happy to pay it. In other words, if they can get the growth that's set forth in the earn-out, it's great for our business. Let's, you know, let's hope that that happens in this one as well. Suffice it to say, because you can see it's a fairly significant number in the GroundCloud acquisition that, you know, it's some substantial growth for them to get there. Let's see what happens. We would hope that that does happen, and be more than happy to pay the earn-out if we got there. Alan, I don't know if you have any more detail you wanna provide. No, just generally the way we build out, those acquisitions, any time we have an earn-out, we are thrilled to pay the entire earn-out. It will meet our financial metrics if it grows to the levels that will require us to pay the earn-out. That's just... This business is entirely consistent with that. We'd be happy to pay that earn-out. Okay. When you say meet your financial objectives, are you saying that it would be within that target margin range if the revenue objectives are achieved? I'm more speaking to getting our payback on our acquisitions. When we deploy that capital, we're looking to get our money back in five to, you know, five to seven years of 15% to 20% return. We think we can achieve that if, you know, at any level within that earn-out with zero or whether we hit that earn-out. That's what I'm- Well, maybe I can add to that, Justin. Our earn-outs are almost always, in fact, any time I can think of, they're based on revenue, getting to revenue targets. We take it on ourselves to manage the cost in the business and help make it more profitable over time. The targets are usually not anything more than growth and revenue. Understood. Alan, I think you mentioned earlier that excluding FX, organic growth was about 9.5%. Anything you can share on the impact from transactional volumes within that number? Then, I guess on the 150 organic headcount adds this year, what are you assuming for organic growth going forward as you make that investment? I'll take the first one, and Ed, if you wanna talk to headcounts. As far as the organic growth, that's our estimated growth within the services category. You know, you know our services are split between transactional and subscription. For the most part, both are growing. Our subscriptions tend to be some of the higher growth areas of the business. but, you know, growth a little bit slanted towards subscription, but both growing, adding up to that 9.5%. Ed, on headcounts, did you wanna make a comment? Yeah, sure. I mean, you know, it's a full year ahead of us, so we obviously reserve the right to adjust course depending on what happens in the business. You probably saw that last year. I don't think we planned on having that many last year, just the business started performing very well, and we needed more people and went out and got them. I think roughly our plans are maybe for an increase of half that, but I wouldn't read too much into that. If things go well, we could see us increasing that. If the economy stalls more, you know, we would probably reduce that just to be prudent operators of the business. You probably heard me say in the past couple quarters, you know, hey, you know, there's a lot of economic uncertainty. We were starting to remove our pedal or foot from the gas pedal and kinda not press the brake like you may have seen a lot of other technology companies do, but certainly cover it just to make sure we don't get ourselves into any trouble. Starting to seem to come out of that right now with the headlines I'm reading in the newspapers. We'll see what happens. You know, for the most part, we've planned for about half the growth that you saw in headcount organically last year, in the coming year, and we'll adjust accordingly as we see how the business performs. Okay. Got it. Thanks for the time. Hey, thank you, Justin. Your next question comes from the line of Daniel Chan from TD. Your line is now open. Yes, thanks. Ed, you talked about GroundCloud having a higher mix of professional services driving a lower EBITDA margin. Just wondering whether for you to get their EBITDA margin more in line with your target, whether you have to change their business model to reduce that PS mix? If so, how do you do that? How long will it take for you to get those margins up to where you want it to be? Certainly we have some thoughts about how to do it. You know, they were providing one-on-one training classes for individual companies. We could see ourselves doing more of that virtually and with larger audiences, that may end up having us over time, you know, have a much more profitable professional services or training mix. You know, one of the big things in any software company is just selling more of the stuff, right? You know, when you You know, if you have 100 customers and you're providing software and writing software for those 100 customers, if you make it 200 customers, invariably that company's gonna be more profitable. You're writing the same piece of code for now double the amount of people. If they're all paying a fair price, your profits go up. You know, which has, you know, been a big part of our growth in EBITDA over the past 10 years as we get a bigger and bigger customer base and therefore have a bigger and bigger group of people to go sell our next acquisition into. I think we might see the same from GroundCloud over time. That makes sense. Thanks for that. Then shifting gears a bit, just wonder if there's any impact from the Windsor Framework that just got passed. You know, we're still analyzing it. You know, they've established a green lane and a red lane, much like you see in passenger traffic. We understand that both lanes are gonna continue to have a filing. You know, at first blush, my gut is that there's not gonna be a ton of impact to our business, negative or positive. Okay, great. Thank you. Thank you. Your next question comes from the line of Robert Young from Canaccord Genuity. Your line is now open. Hi, good evening. The couple of the macro comments and questions around the transactions. I get the sense that maybe that was a minor headwind. If you could clarify that and then maybe just give a refresher on how minimum contracts protect that or if that's still in place. Maybe just a refresher there. I mean, I called out the ocean business and it actually, if I look at the Datamyne stats, it's actually starting to recover in January and into early February. I'm expecting that if you hear me kind of mention that the China effect, you know, kind of easing up in, you know, right after Christmas. I kind of suspect that's what we're seeing right now. Truck and air were still pretty strong, and I see an air getting even stronger in the last couple of weeks based on the Datamyne stats. You know, we'll see. Impact in this past quarter was minor. I mean, we had plenty of stuff that made up for it or more than made up for it. You know, had us kind of beating our projections for the last quarter because 'cause a bunch of businesses were firing on all, you know, full cylinders and, you know, we had an ocean business that was only down slightly. All in all, pretty good news for us. Okay, you touched on my second question around China. There's a lot of news about the reopening and the impact. Maybe it's more on air travel. Is that not having a more positive impact? Yeah, I think it is. That's what I was just kind of mentioning, in the ocean space, that we're starting to see a pickup, in the stats we get from governments over the past, you know, month or so. I think that's exactly what's going on. Their zero COVID policy ended, I think, you know, mid-December or something like that. people started to get back to work, and eventually factories get reopened and start producing more stuff and retailers get through Christmas and, as I mentioned, that we thought a lot of retailers were selling stuff that they had ordered pretty early last Christmas. As the shelves, you know, emptied out, they're now looking to replenish those things, you know, now that a bunch of factories are open in China. My guess is, you know, maybe it's a little better than most, but still, I don't know exactly what's gonna happen. I think I'm starting to see the in the past couple of weeks, the impact of that and increased trade volumes. Okay. Last question, just a little clarification. In the press release, the 40% to 45% adjusted EBITDA range, I think the quote, from you, Alan, maybe the way I read it seemed to suggest it was inclusive of M&A forward. I just wanna make sure I'm not reading that incorrectly. The 40-45 doesn't include any anticipated future M&A. That's just up to this point? Well, yeah, just remember that it's an EBITDA margin range. You know, barring us buying something massive, and you can see here with GroundCloud, it has a bit of a negative impact on our overall margins because we bought a company that makes less money as a percentage of revenue than we do, but still, you know, only a point or two. And that was a fairly large acquisition for us. Yeah, no, I think we are trying to say we'll be in that 40%-45% margin range. If we did something gigantic, sure, it could go outside of that. If it was way more profitable than us, it would move up. If it's less profitable than us, it moves down. You know, net-net, I'd be surprised if it changed outside of that range, 40%-45%. Understood. Thank you. Based on acquisitions. All right. Thank you, Rob. Your next question comes from the line of Kevin Krishnaratne from Scotiabank. Your line is now open. Hey, guys, good evening. Question for you just on competition or potential competition. You know, understanding you cover, several areas in the broader logistics ecosystem. Just curious, you know, given the momentum that we're seeing in the space, are there any particular areas where you're seeing new competitors or outsized funding from, you know, private equity or anything in that regard? You know, areas that are hot. I'm curious, you know, what you're seeing and how well you may be positioned, in these areas, you know, are these areas you may be willing to direct more of your attention to from an M&A perspective. Yeah, thanks. Thanks, Kevin. Over the last several years, we're seeing a lot more money coming into this space, which I think is good news. I mean, you're talking about in terms of it being competitive, but understand they're also potential acquisition candidates for us, which is as much how we think of it as competition. Competitors come up with new ideas, and they, you know, we watch 10 of them get started and, you know, we get to see who's the best one or two guys out there, and maybe one day we'll end up buying one of the companies. And that tends to be more the way we think about it. Yeah, it's absolutely. There's been a ton more investment in the space, and I think that's great news. Yeah, is it just pretty widespread? I'm just curious if there's any particular. Well- You know, areas that are popping up. Well, you can see the supply chain visibility space is hot. You know, we were the first mover in that space buying MacroPoint. MacroPoint has some competitors that have also attracted a ton of investment. There's more people popping up in that space all the time. They're also potential customers of ours, right? They need access to the data that we have because we do business with most of the freight brokers in North America. We tend to have more data than any of our competitors in that space and are able to sell that to other people who are building their own supply chain visibility tools, but don't have access to a network like ours. That's been great for us. You can see all these IoT devices that you're starting to see come out. I suspect we're just at the beginning of this. People are making smaller and smaller things to put in packages, to put in pallets, to put in planes and trucks and containers and everything else. I'll tell you what's happening to your product while it's moving, where it is, what temperature it's at. Did it get a, you know, hard bounce? all kinds of stuff like that, so that you can eventually build software around that to help the big manufacturers and retailers make better decisions about what's going on in their supply chain based on these IoT devices that are out there. I think we're at the beginning of that right now. There's gonna be, you know, hundreds if not thousands of companies that start up based on that. We're really excited about it because that's all information that we could use to help our customers get better results. Got it. Appreciate those comments. Maybe to continue on the M&A theme. I know it's definitely been picking up a bit, assets getting a little bit bigger. It's been a while, I think. The last several acquisitions you made have been all cash. I know in the past even MacroPoint did include some stock. I'm just curious about your philosophy on purchase, you know, price for acquisitions, your decision on, you know, mix of cash and equity. Any thoughts there? I mean, we try to be cash buyers. When you see stock getting priced in a deal, it's usually because the people that own the business have asked for some component of it to be in Descartes' stock. Oftentimes they go, "Hey," you know, we're buying some company for, say, $50 million, and they're going, "All right, I'll take 40 of it in cash and 10 of it in stock." If they request it from us, you know, that's good news for us. We're not really looking for reasons to dilute our shareholders. If the owner of a business says, "Hey, I want you to buy the company. I wanna pick you guys to be the buyer, and I wanna take back some Descartes stock," we look at that as, you know, something that we should do, right? Now, now I have an owner in that business that's probably gonna still work here and probably gonna be very vested in our success. That's something we'll almost always say yes to. Okay. Got it. Got it. Got it. Thanks for that. Maybe just the last one for me, just a question on the sort of your marketing spend and efforts. I think it was just over a year ago when you kinda talked about more meaningfully stepping up the efforts there, the customer success team, the new digital marketing initiatives. I'm just wondering how that's been progressing. Are you happy with the ROI? Is there anything you could share there in terms of, you know, net retention, share of wallet increases? Anything, you know, that you're seeing or that you're willing to share in terms of, you know, the return on that step up that you've been going through? Yeah. We're very happy with it. I don't know that I wanna release any more retention stats than we already do. We think it's been very helpful for us. We've had enough success with it in the last year that we're starting to roll it out now in Europe as well. We think it's, you know, as our business gets bigger, we need to do things like that to stay as close to the customers as we were when we were a small company. We think investments like this are the smart thing to do. You know, the good news is we went and did it over the last two years and it really worked well, and we're doing more of it as a result. Understood. Thanks a lot. I'll pass the line. Hey, thanks, Tim. Your next question comes from the line of Steven Li from Raymond James. Your line is now open. Hey, thank you. Maybe a question for Alan to start. Can I check with you? The, the overall organic growth is around 7.5% at constant currency, Alan? In the prepared comments, we mentioned 9.5% growth in services revenue. We did see a slight drop in professional service and other revenue. It was, you know, partly hardware, a little bit on the PM side. When you blend those together for the fourth quarter, we are somewhere in that 7.5%-8% range. Most important for us is going to be that long-term growth in services, which is highly recurring revenue for us. 9.5 on services coming down to sort of that 7.5-8 on the total revenue. Got it. I was curious, given the higher PS mix with GroundCloud, does that not mean that the services organic growth going forward is gonna miss those PS organic growth from GroundCloud? Is it better to look at the overall organic growth? Sorry, I didn't catch your question. Because you I believe your services organic growth, you exclude PS revenues from that, right? I was asking, given your recent acquisition, GroundCloud, a lot of while a higher mix of their revenues is PS, would looking at services organic growth, would we be missing the organic growth coming from those PS revenue streams from GroundCloud? Yeah, listen, we're obviously gonna try to grow that business both on the on the subscription side for the software as well as the P.F. side. I mean, realistically for us, the subscription piece should grow faster if we execute to our plan. You know, we'll continue to focus on both elements, but and we'll just disclose to you as we go. I mean, we're disclosing services revenue growth 'cause that's the most relevant number for us in the long-term piece of the business. Both will be important, and we'll just message it accordingly. Got it. Thanks. Ed, just given your comments there, so shipment volumes on one side and then but other parts booming, would this organic growth like 7%, 8% high single digit, would it be a good base for this year, or we can do better than that? Well I mean, we think we're gonna be in that, in that range. I mean, we always kinda plan to run our business in the 4% to 6% organic revenue growth range and trying to get 10% to 15% EBITDA growth out of that. We've seen us do much better than that in the past years. You know, the economy kind of went into a boom period there for a year or two, and it started to come back down. We're pretty happy being in that 9% range right now and, you know, just think that came from quality of acquisitions growth that we've quality of acquisitions that we've brought on in the past. A little bit of it from customers thinking that supply chains and logistics is a lot more important than they thought it was pre-pandemic. I'm hopeful that, you know, that range stays up in that 8%-9%, but we'll just have to see. Got it. Ed, also your comment, you said shipping volumes may increase through the year. Does that mean maybe we see a slower first half and then a better second half in terms of organic growth as well? Yeah. I mean, I don't wanna make predictions a year out, but If our customers do well like that, yeah, I would expect our business to continue to do better and better over time. Got it. Couple questions on your recent acquisitions. GroundCloud, what has been their growth profile in recent years, and was it all organic? Thanks. It was. They're a fast-growing company, and it was all organic. Sorry, did you say double digit in terms of growth, Ed? I didn't call out a specific digit. It's a fast-growing company. It's one of the reasons we wanted to buy it. We think we have an opportunity to expose it to a lot more customers and as a result, you know, maybe continue that growth into the future. Got it. Maybe an update on the XPS. I remember the earn out there was sizable. How are they doing so far? Would you expect them to be hitting their earn out targets this year? I don't know if I can speak to the earn out targets, but yes, they're doing very well since they've gotten here. It's been a great business for us, and we're real happy we bought it. You know, I'm not gonna comment on the earn out until they get there. We're very happy with the acquisition so far, let's put it that way. All right. Thanks, guys. Hey, thanks. You too. Your next question comes from the line of Scott Group from Wolfe. Your line is now open. Hey, thanks. Afternoon. Is there much seasonality to the revenue at GroundCloud? Should we take like the bump in the baseline for Q1 and annualize that? I'm just trying to figure out the right way to try and ballpark full year revenue. It's a fairly consistent performing business. Yes. It's not a ton of seasonality. Is it a kind of business where you would expect the actual revenue to sort of outperform the baseline like we see in the rest of the business? I don't know the exact numbers, but yes, we're, you know, with most of our business, we're expecting, you know, a baseline and then, you know, quarter to quarter there'll be some increase in the business as we get the actual results in. I think GroundCloud would probably be no different. Okay. I know it's obviously the very beginning of the year. You always talk about 10%-15%, but I think you've pretty much get there to the high end or exceed it every year. I know it's early, but what's the visibility to repeating that again this year? We don't take our bonuses if we don't get to 15. We're all planning on getting to 15. I think we've beaten it 15 years in a row, Scott. I, you know, I obviously can't make a promise about it, but that's certainly our intention is to be a 15 or better. We say 10 to 15. We do our damage to get to 15. Okay. Good stuff. Thank you, guys. Appreciate it. Hey, thank you, Scott. Your next question comes from the line of Raimo Lenschow from Barclays. Your line is now open. Great. Thank you. This is Jeremy on for Raimo. I was just wondering if you could share a bit more detail on how the e-commerce business is trending. Would you say like it's reached more of a steady state post deceleration from the pandemic? Really any color you can share there would be helpful. Thanks. Sure. Thanks, Jeremy. You know, we had massive growth coming out of the pandemic in end of 2020 and 2021 like a lot of e-commerce companies had. I think we ended up in a different circumstance soon thereafter. A lot of e-commerce companies that we saw went flat. That's not what happened to us. We kinda went back to our normal, you know, low double digit growth coming out of that, and we continue to see that be the case right now. It's a, it's a very nice business for us. It continues to grow at a, at a nice pace every quarter. Yeah, we're still seeing. I don't wanna use the word flat because it's... The growth rates are flat, but it's still growing nicely every quarter and every year coming out of that big blip in the beginning of the pandemic. When I read the newspapers about some other e-commerce results, I don't think we're subject to the same things that they are. Maybe because we're selling a lot more new customers, so we continue to get growth even if e-commerce sales are flat for a quarter or so. Got it. Thank you. Thank you. There are no further questions at this time. Ed Ryan, please proceed. Hey, thanks, everyone. Appreciate all your time today, and hope to see you as we're out on the road in the coming weeks. Otherwise, look forward to reporting back to you next quarter. Have a great night, and thanks for your time. Ladies and gentlemen, this completes today's conference call. Thank you for your participation. You may now disconnect.