Good morning, ladies and gentlemen. Welcome to the Kinaxis Inc. Fiscal 2021 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. I'd like to remind everyone that this call is being recorded today, Wednesday, May 5th, 2021. I will now turn the call over to Rick Wadsworth, Vice President of Investor Relations at Kinaxis Inc. Please go ahead, Mr. Wadsworth. Thanks, operator. Good morning, and welcome to the Kinaxis earnings call. Today we will be discussing our first quarter results, which we issued after close of markets yesterday. With me on the call are John Sicard, our President and Chief Executive Officer, Richard Monkman, our Chief Financial Officer, and Blaine Fitzgerald, our Executive Vice President of Finance. Before we get started, I wanna emphasize that some of the information discussed on this call is based on information as of today, May 5, 2021, and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in the earnings press release, as well as in our SEDAR filings. During this call, we will discuss IFRS results and non-IFRS financial measures. The reconciliation between IFRS results and non-IFRS financial measures is available in our earnings press release and in our MD&A, both of which can be found on the investor relations section of our website, kinaxis.com, and on SEDAR. Participants are advised that the webcast is live and is also being recorded for playback purposes. An archive of the webcast will be made available on the IR section of our website. Neither this call nor the webcast archive may be re-recorded or otherwise reproduced or distributed without prior written permission from Kinaxis. To begin our call, John will discuss the highlights of our quarter, as well as recent business developments, followed by Richard and Blaine, who will review our financial results and outlook. Finally, John will be making some closing statements before opening up the line for questions. We have a presentation to accompany today's call, which can be downloaded from the Investor Relations homepage of our website, kinaxis.com. We will let you know when to change slides. I'll now turn the call over to John. Thank you, Rick. Good morning, and thank you for joining us today. First, as always, I hope you and your loved ones remain healthy. Nothing matters more. In particular, I'd like to let our fantastic team in India know that all of us at Kinaxis are thinking about you as you battle the very worst of this horrible pandemic under extremely difficult conditions. Wherever you are in the world, I encourage you to get vaccinated as soon as possible so we can all see each other face-to-face once again, something I dearly miss. We remain forever grateful to our frontline workers everywhere, especially those in supply chain, keeping our necessities flowing and continuing to extend our sympathies to families that have been deeply affected. I'm also forever amazed by and thankful for the resilience of our Kinaxis employees as we remain in this prolonged work-from-home condition. Turning to slide three. I'm pleased to report a strong start to our year, including SaaS revenue growth of 19% to $40.6 million, total revenue of $57.7 million, and an adjusted EBITDA margin of 16%. Turning to slide four. While COVID-related delays are not fully behind us, the environment for booking new business, which started to show signs of improvement in the fourth quarter of 2020, has continued to return to a more normal state. We won a record number of new customers for a first quarter, which, together with project expansions, resulted in record first quarter incremental subscription bookings. These positive first quarter results, coupled with a continuing healthy pipeline of opportunities, reinforces our outlook for 2021. Assuming these trends continue, we remain even more confident in a return to higher SaaS revenue growth rates in 2022 and beyond. We continue to see momentum in life sciences and pharmaceuticals, adding in this quarter Sweden-based Mölnlycke, which has been in business for 172 years and has operations in more than 100 countries. Mölnlycke designs and supplies surgical and wound care products from the operating room to our homes. Alvogen is another win for us, a global pharmaceutical company focused on developing, manufacturing, and selling generic, branded, and over-the-counter products for patients around the world. The company has commercial operations in 20 countries with 1,700 employees. As we mentioned on our last earnings call, during Q1, we also won biopharmaceutical maker MorphoSys and a global engineering and technology solutions company, Cyient. I'm also thrilled to share a win with a distribution company, a nascent vertical for Kinaxis. L&R Distributors has been a leading national distributor within the supermarket, drug, independent, and mass class trade across the U.S. for over 60 years. A number of these wins involve our RapidStart delivery program, which is an offering that takes full advantage of our knowledge of the industry best practices to set customers on the path to supply chain transformation in as little as 12 weeks. We continue to see the value proposition for strong and fast ROI resonating very well amongst our prospects. Our RapidResponse platform strategy is beginning to pay dividends. I'm very pleased to report that we have made initial sales of Transportation Load Optimizer, a solution developed on our platform by 4flow, as well as Production Scheduling, a solution developed by PlanetTogether. These are just two examples of how our new solution extension partners can leverage our platform for mutual gain. The pipeline of opportunities for all such partners continues to grow. Is a strong validation of our strategy to open up RapidResponse as a development platform. You can expect us to name more partners in the program this coming year. Overall, we continue to see a heightened level of interest from companies looking to drive hyper-agility in their supply chain through our unique end-to-end concurrent planning approach. I'll now ask Richard and Blaine to discuss results for Q1. Thank you, John, and good morning. As a reminder, unless noted otherwise, all figures reported on today's call are in U.S. dollars under IFRS. Looking at slide five, you'll see the total revenue in the first quarter was up 9% to $57.7 million, as healthy growth in SaaS and professional services revenue was offset by a normal cyclical decrease in subscription term license revenue. SaaS revenues grew 19% to $40.6 million, driven by new customer wins, as well as the expansion of existing customer subscriptions. Subscription term license revenue was $2.1 million, down 58% from the comparable period. This revenue item is linked to the normal renewal cycle of our customer-hosted software subscriptions. Our professional services revenue activity was strong again, resulting in $12 million revenue or 13% growth over the corresponding quarter of 2020. As previously noted, this revenue will vary from quarter to quarter based on the number, size, and timing of customer projects underway, as well as the proportion of work assumed by our partners. Maintenance and support revenue for the quarter was $3.1 million, largely in line with the result in Q1 2020. We continue to be pleased with the diversity and strength of our total revenue base. For the quarter, our 10 largest customers accounted for 27% of total revenues, with no individual customer accounting for greater than 10% of total revenues. Gross profit increased by 1% to $37.2 million, representing a gross margin of 64% compared to 70% in Q1 2020. The change in margin reflects a few items. First, the lower proportion of subscription term license revenue, which contributes nearly 100% gross margin. We also made important strategic investments in our direct costs throughout 2020 and Q1, and that's reflected in these new costs. These investments will help Kinaxis support our ever-increasing base of customers. Adjusted EBITDA margin in Q1 was 16% compared to 29% in the first quarter last year. Again, this reflects the impact of the natural cycle of subscription term license revenue and important investments in all our operating teams across the organization globally. These investment initiatives will help create a scalable base to support much higher revenue for Kinaxis in the future. We had a loss of $1.5 million in the quarter compared to $5.6 million profit in Q1 2020, largely due to the factors I just mentioned. Q1 cash flow from operating activities was $20.6 million, compared to $21 million in the first quarter of 2020. At March 31st, 2020, cash equivalents, and short-term investments totaled $229.3 million, compared to $213.1 million at the end of 2020. We remain pleased with our outstanding track record of cash generation. I will now turn the call over to Blaine. Thanks, Richard. In the enterprise software space, Q1 is often a slower quarter for booking new business. We are very pleased that we had a record first quarter for winning incremental business and for new customer wins. As a result, our minimum contracted revenue backlog remains very strong. Backlog grew by 11% compared to March 31, 2020, to $384 million. This amount includes $360.8 million of SaaS revenue backlog, which represents a 16% increase from a year ago. Backlog details can be found in the revenue note to our financials. The backlog will be recognized over the following periods. $129.5 million will be recognized in 2021, of which $119.8 million relates to SaaS business. $127 million will be recognized in 2022, of which $118.6 million relates to SaaS business. $127.5 million will be recognized in fiscal 2023 and later, of which $122.4 million relates to SaaS business. Total bookings in Q1 were $48.5 million, of which SaaS bookings were $47.9 million, representing 40% growth compared to Q1 2020. These bookings figures represent the difference in opening and closing quarter-end backlog, adjusted for revenue recognized in the period, and includes bookings of both incremental and non-incremental business. Moving on to slide seven. The strong start to the year and ongoing positive outlook continues to give us confidence in our guidance for fiscal 2021. To reiterate, we expect total annual revenue for 2021 to be in the range of $242 million-$247 million, and expect 2021 SaaS revenue growth to be between 17%-20%. Based on the normal cycle of customer-hosted subscription renewals, we expect subscription term license revenue to be between $3 million-$5 million in 2021. We continue to expect an adjusted EBITDA margin of 11%-14% for 2021, though given the 16% result in Q1, we will continue to monitor and update. While the impacts of COVID are still not fully behind us, we still anticipate that 2021 will be a much better year than 2020 for signing incremental business and winning new customers. As a result, we continue to see 23%-25% SaaS revenue growth as a sustainable target over the midterm, including for 2022. We will give specific annual guidance on our usual cadence. Thank you for your continued support of Kinaxis. With that, I will turn the call back over to John. Thank you, Blaine. We're pleased with our positive start to the year and continue to see a heightened level of interest from companies looking to drive hyper-agility in their supply chain. Ongoing major disruptions in supply chain, whether microchip shortages, a container ship blocking the Suez Canal, or of course, COVID-19 and its variants, continue to hit the news and shine a light on our unique differentiated technique. Add to these the omnipresent and more mundane disruptions that impact supply chains daily, from delayed delivery trucks, issues on the manufacturing line, or large purchase orders that customers want to accelerate, and you start to see how invaluable concurrent planning is for our customers. The weakness of rigid legacy cascaded techniques that introduce latency in planning and follow a functionally siloed approach are being exposed every day, and I am confident that Kinaxis has never been in a better position to serve our markets. As always, thank you all for taking the time to join us on this call. With that, I'll turn the line over to the operator for Q&A. At this time, if you would like to ask a question, please press star followed by the number 1 on your telephone keypad. Again, it is star one. We'll pause for just a moment. You have a question from the line of Daniel Chan with TD Securities. Hi, good morning. You commented that you saw record Q1 incremental bookings from new customers and expansions, and I just want to drill into this a bit more. Given what sounds like a heightened sense of urgency to modernize supply chains in the current environment, has there been a change in the size of these initial deals that you're seeing, and has the pace of expansions also changed compared to what you saw before the pandemic? It's a great question and the answer is yes, in that our prospects are looking for a much more RapidS tart to their transformations, rather than looking at it at the beginning in a wholesome way. We're really pleased with the uptake last quarter and in Q1 with RapidStart initiatives. That I think is an indicator, and we're seeing it with both very large enterprises and mid-market as well, both. That's how I would describe perhaps the change that COVID has brought on. It's really customers looking for a much more urgent and rapid return on their initial investments. Okay, thanks. That's helpful. Can you comment on how customer activity has trended so far into Q2? Well, we continue to see a return to more normal, I'd say, conditions. We're still early in the quarter, but I would say that the quarter started strong, as did Q1. The pipeline of business continues to look very strong. I see the pipeline strengthening in every vertical and every geography. I don't see necessarily a concentration problem at all. Yeah, I would say we're cautiously optimistic. Every day you read the news and COVID's not behind us. We're cautiously optimistic that we're closer to the end of it than we are the beginning, and we're certainly seeing a trend right now towards a more normal operating environment. Thank you. You have a question from the line of Richard Tse with National Financial Bank. Yeah, thank you. Sort of a similar question to Dan, it's nice to see that you had the record number of new customers following on the record last quarter. How many of those new customers are RapidStart customers? Not a specific number, is it like a half of that base? Is it a quarter? Just trying to get a sense of what that is. Yeah. Obviously we don't disclose the details of every deal or the customer counts in a given quarter, but I could tell you that it's roughly double that of the same quarter last year in terms of net new customers. I will also tell you, as we described last quarter, we're seeing more activity from the mid-market. I think that is also reflective of, I'd say, the recognition of the potency behind concurrency and the fact that mid-market companies can step into this new world, this new transformation, in 12 weeks or less. In Q1, we certainly saw a continuation of progress in the mid-market space. Again, great question, Richard. I'd classify it as roughly double the number of customers added in Q1 as the same period last year. Is it fair to say that given RapidStart is kind of like a RapidResponse light version, so to speak, that the value of that contract is really a fraction of what a full deployment would be? As you get those conversions with these full deployments, you're obviously going to get a certain bit of a pickup. The question is that what's sort of the relative ratio of RapidStart versus RapidResponse? Is it a quarter or a tenth of what a full deployment value of a contract would be? Yeah. Well, every one of these is a little different because the size of these organizations are different. It's difficult to necessarily describe it as it's exactly X amount. I will say, it is less risk for a prospect to begin, because we're doing this inside of a 12-week window. It is a prescription. It is not a light version of RapidResponse. Just for clarity, it's RapidResponse. It is concurrent planning, but it is based on templatized best practices, and it is the first step that a customer will take. Think of it as a patient who has a severe fever, and they're looking to lower their fever before they can work on the cure, okay? They're looking for the, call it a supply chain inoculation. That's how I often describe it. We're the doctor, you're the patient. We're going to come in here, 12 weeks or less. You're going to feel an awful lot better. When you feel better, you can now start to strengthen and cure the underlying governance model. Okay, great. Just one last quick one for me. It's been around a year since you acquired Rubikloud, and can maybe you give us an update on the progress? I can't really tell, but I'm just wondering how much it's really sort of contributed to the business. To the extent that you can provide any color on that'd be helpful. Thanks. Sure, Richard. As I think we described this in the last quarter, that we had been successful in, what I'd say, cross-selling their value proposition into our base and into the CPG arena and the CPG vertical, which was the first motivation for the acquisition. The second motivation was strengthening our machine learning and AI bench. We're thrilled with the talent that we've been able to add in that area and have that talent implicated in RapidResponse and the rest of our ML and AI roadmap. The last element has been focused on retail. This calendar year, we're focused on merging in all of that technology into RapidResponse and getting it ready for the market. Okay, that's great. Thank you. You have a question from the line of Thanos Moschopoulos with BMO Capital Markets. Good morning. In terms of the traction you're seeing in the mid-market, can you clarify, are you targeting the mid-markets through the same sales teams and partners, or do you have an overlay focusing on mid-market specifically with dedicated sales people? It's a great question, Thanos, I describe it this way. It's a little bit of both. We have seen also as a result of the Gartner MQ being published in Q1, a record number of unsolicited inbound leads. These are people ringing our doorbell and asking to come into the store. We're thrilled to see that, obviously there's a larger proportion of those that we're seeing now in mid-market as we start to see success. In some cases, we have mid-market companies coming to us with their free will. In other cases, we have partners bringing them to us. Again, in this quarter, the vast majority of net new business was influenced by our partner ecosystem. It's a bit of both. Okay. Would you characterize that across all geographies, or is mid-market traction kind of more geographically focused in certain regions? No, all geographies. In Asia, Europe, and the North American market. From a product perspective, back at the user conference, you had introduced some pretty neat AI capabilities with respect to suggesting scenarios and then implementing scenarios. Just curious if that's been launched and whether that's something that's a factor in terms of deal wins or whether that's now being adopted by clients or is it early days for that? It's still early days. We're obviously thrilled with the innovations of last year, especially around Command & Control Center. That's been picking up some traction and a tremendous amount of interest with prospects. Still early days to highlight any significant contribution. Okay. I'll pass for now. Thanks. You have a question from the line of Paul Steep with Scotiabank. Good morning. John, maybe talk about the partner solutions and maybe the genesis. We know you launched a new transportation planning app on the App Warehouse yesterday. Can you talk to where that's at this point? Yeah. It's just an extremely exciting time for Kinaxis and a long time coming. Getting RapidResponse exposed to third-party developers so that they can build intellectual property on top of RapidResponse. That, by definition, eliminates our own development teams from being a bottleneck in delivering net new value to customers. I couldn't be more thrilled. It's been a great quarter, and that's been one of the greatest highlights, is having a third party, 4flow, successful, as well as PlanetTogether, in selling their extensions on top of RapidResponse. We have several other development projects in the works with several other solution extension partners. Throughout this year, I'm very confident you're going to be seeing more unique applications being posted on our warehouse and more press releases of successes and solution extension partners. It's just an absolutely thrilling time for us, and for our customers, quite frankly. Great. I guess then, maybe the quick follow-up on that, one last one. How should we think about maybe the evolution of this app ecosystem that, it's been a number of years in the works. We're here. Apps are launching. What are you seeing in terms of customer interest and uptake? Obviously, you just launched now the third one and more to come. What's sort of the customer response so far? Then I've got one quick follow-up. Thanks. Yeah. It's been really good. We're demonstrating these applications together with these partners. The integrations are completely seamless, extremely tight, and for our customers, they feel like they're still working with RapidResponse, and they're still getting benefits of concurrency. I think it's still early days. As excited as I am, we're seeing the initial successes for our investments here. We're seeing a lot of interest from solution extension partners. As I said, we have several other projects in the works at various stages. As they become certified, we have a formal certification process that all of them go through. Once they become certified, they're pushed up to the App Warehouse. I think it's early days, but for sure, I liken it to what happened when Salesforce announced Force.com, where whether it's third parties or even customers themselves, having a safe way to extend the platform and add your own intellectual property, and have it safe from upgrades. That's the holy grail, in my opinion. We haven't really invented this technique. I often quote the Force.com type of analogy. I think our customers are going to love it. We're already seeing evidence of that. There's already a strong pipeline of business in three short months for some of these applications that we're just talking about. Great. The last quick follow-up here for Blaine or Richard, maybe on the margin. Was there anything noteworthy, guys, that you'd call out in the quarter that maybe had either investment or spend sort of push out in a year? Should we think that that cost base, apart from normal seasonality, reflects where you're sort of at this point? Thank you. I would love to give a more exciting answer, but everything's gone according to plan for Q1. As you know, our cost profile is non-linear. The things such as Kinexions and marketing programs, they're going to ramp up throughout the year. Kinexions is back half of the year that it usually hits. That's something that's allowing our margin to be a little bit higher at the beginning of Q1 than we potentially will see at the end of the year. Right now, we're pretty comfortable with our guidance. We think that if we normalize the full year impact, that we're comfortably in that 11%-14% guidance range. Thank you. You have a question from the line of Stephanie Price with CIBC. Good morning. With Panasonic announcing the acquisition of Blue Yonder, just wondering if you can comment a bit on the competitive environment, and if you see any implications from that acquisition. Well, first I would say when any company is acquired, it drives disruption. There's no doubt about that. There's got to be some disruption. To the extent that a competitor is being disrupted and focusing on other things, well, that's a good thing. That's a good thing for us. Last quarter and this quarter, we continue to be successful in winning business in this arena. Obviously that's the way we look at it. We wish the disruption to continue, and we look forward to competing in good faith as the year progresses. All right, thanks. In terms of the distributor vertical, you mentioned a new contract win there. Just curious how we should think about the potential in that vertical and the potential for it to become one of your core verticals. Yeah. We announced that on purpose, obviously. It's a new vertical for us. We have some additional opportunities in the pipeline, which gave me some confidence, frankly, in sharing that bit of news. As you know from our history, we're extremely deliberate when we enter a new vertical and look to establish some good momentum and wins and proof. It's still very early days. When you look at how we grew life sciences, for example, it was a six-year run to get to the point where we are right now. Right now, life science continues to be our number 1 vertical. Just slightly ahead of high tech. We're always thrilled to enter a new vertical because it increases the TAM and increases our value, increases the leverage of our R&D spend because they get to leverage RapidResponse. The same technology is used for aerospace and defense, automotive, industrial equipment, life sciences, high tech, and consumer packaged goods. It's just a great leverage point for us. Great. Just one final one from me. Just given Rubikloud's one-year anniversary here, just wondering how you're thinking about M&A at this juncture. Yeah, we continue to be very thoughtful about it, in fact. We've increased our muscle, I would say, in evaluating potential accelerations to cover off some white space. I would say there are certain areas that have some interest. I wouldn't say there's anything imminent at the moment. If you see anything during the year, it would probably be categorized more as a tuck-in than anything grand or large or disruptive. I will say different from, say, a year ago. Even during COVID, we went through two acquisitions successfully, and as a result, developed a stronger muscle around that function. It is a topic which we discuss as a management team. It's an active, I'd say, portfolio of work. Great. Thank you very much. Thanks, Stephanie. You have a question from the line of Deepak Kaushal with Stifel GMP. Oh, hi, guys. Good morning. Just a couple of follow-up questions from me. I think it was just building on Thanos' question around the mid-market strategy. Beyond RapidStart, John, what do you have to do differently from a sales product or even pricing strategy to fully penetrate the mid-market? Do you see that you don't have to do anything different at all? Just thoughts on longer-term strategies for penetrating that market fully. Yeah. What we've realized is that it's not just mid-market. I think maybe this pandemic has been the catalyst to get supply chain as a global craft to rethink the governance model. It's that grand. It's not like, "Oh, we just need better technology." No. Mid-market, large enterprise, they're looking at changing the governance model. There has been studies now published on how companies that leverage concurrency over a cascaded planning, how have they fared during COVID versus companies that have not leveraged concurrency. The reports are overwhelming, quite frankly. It's quite obvious that those companies that have already adopted concurrency as a governance model, as an underpinning for planning, have fared better during this pandemic than those who have not. That proof point now allows mid-market players to say, Hey, I'll have what they're having, to quote a famous line. I'll have what they're having. What RapidStart does is it eliminates a lot of the risk because we're coming in and saying, Hey, you're inoculated, if you will, in 12 weeks or less. We have successfully deployed in 12 weeks or less for mid-market companies. That gives us a lot of confidence. In terms of doing anything differently, certainly, these companies, they're looking for reduced amount of risk and an earlier start. I think as Thanos mentioned, the net effect of this strategy is we fully anticipate an increase in that, I'd say the expansion opportunity, because we know, hey, we're just getting started. This is like step zero. We've already had expansion occur after a RapidStart. That's already happened. You get to the 12-week window, and they go, Okay, we're thrilled. We're feeling so much better. Our fever is gone, and we'd like to take step one. Okay. They start to expand further from that point. I think over time, it's early days, obviously, but over time, I'm looking for those indicators over the next 18-24 months, where we'll start to see some potential for an increase in expansion of subscription as a result of RapidStart. Okay, great. That's helpful. Just to follow up on, I think it was Richard's question about Rubikloud. There's been a rapid adoption of e-commerce in retail. Are you starting to see that move the needle for your business, either with Rubikloud or organically? Is this something that we should still expect to come as the integration matures? I guess, what inning are we in, and how would you evaluate your penetration of the e-commerce segment of the retail market today? I'd say we're in the first quarter of the game here, and we've been successful with pillar number one, which was our prime motive, right? Can we leverage this technology in the CPG space? We have been successful there, and we're thrilled with that output. At the same time, it's a long game for us. We have our eye on the prize, and that's entering the retail space. This calendar year is all about preparing to do that. I'd say substantive return will happen once we get their technology fully integrated into RapidResponse. Okay. That's helpful for me. I will pause the line at this point. Thanks, Deepak. You have a question from the line of Robert Young with Canaccord Genuity. Hi, good morning. A couple clarifications for me. In the past, I've always seen you as a company that's very intentional in where you shift your resources. I think, maybe different than, adding on some of the questions on the mid-market, it's always seemed to me as the mid-market's been out there, just Kinaxis has been unwilling to put the resources there. I think that some elements of your sales organization would probably love to go after the mid-market. I think if I look at this from a different point of view that says that the mid-market's there, is Kinaxis now saying that it's going to go after the mid-market? Yeah. Great question, Rob, you're right. Those who follow us closely would see press releases and say, Yeah, that's a mid-market company that they just closed there. I'd say that we would be more opportunistic, not necessarily targeting mid-market in our past life. Whereas today, it is definitely more deliberate. It is definitely more deliberate. Part of that is in the pricing, packaging, and the promotion of RapidResponse and how we target. I think you're gonna continue to see more success in the mid-market. The other thing that I'd say we're drafting, to use a cycling term, we're drafting off of proof points. We're drafting off of some of the greatest companies on the planet adopting concurrency as an underlying governance model and recognizing just how powerful that is. I've had 40-plus interviews with chief supply chain officers in the last six months. The one thing I'm hearing, which is quite uniform, is incrementalism is dead. People are looking for a breakthrough. They're recognizing that the past 30 years won't survive the next three. I think the mid-market is looking at how the greatest supply chains in the world have governed themselves, and they're just saying, I'll have what they're having. The proof is there. I think our technology has matured also with that. The opening of the platform has matured. Our integration processes have matured and we are now capable of deploying RapidResponse in all its glory in 12 weeks or less. Perhaps, years ago, when you and I first met, I wouldn't have been able to say that. I think that's what's really fueling our deliberate approach here. The distributor, the new vertical you're talking about. You said specifically that it expands the TAM. When I look at this, it looks like it might just be an element of retail and CPG. It sounds like you're breaking it out as a brand new vertical. Is there any size around the TAM that you would think of, or would it largely fall underneath retail CPG at first? Yeah. Retail CPG Well, CPG itself is a collection of verticals. It is so large. yeah, you're right to think of it that way. when we think of CPG, there's food and beverage, there's- You have a question from the line of Paul Treiber with RBC Capital Markets. Oh, thanks very much, and good morning. John's line, I think it got cut off in the last part. I just want to make sure John is there before I start. Operator, it's Rick Wadsworth here. Are you seeing if John's line is available? Paul's line is still connected. Yes, I'm here. Sorry, Paul, and I think the rest of the audience is here, I'm referring to our main speaker line. One moment. I think they're gonna have to redial in. Paul, if you want, while they're doing that, I could address your initial question. Hopefully they'll be back momentarily, Spring. Sure. On the growth of the pipeline, I know last quarter, the company indicated the pipeline was up 40% year-over-year. How should we think about the growth going into Q1? Is that momentum sustained, accelerating? How should we think about it relative to that 40% metric you put out last quarter? Yeah. When we introduced or talked about that metric, it's not something we're expecting to give a number every quarter. Really, we thought that was a good time to talk about that underlying growth, given the situation and the timing. We can certainly say that, I'd say the trend is continuing. This is not a one-off phenomenon. In fact, the pipeline's been growing steadily through 2020, and we'd characterize it as still on a positive trend here. Won't provide a pipeline growth metric quarterly, but yeah. Everything that John mentions that's going on in the world, whether it's COVID, Suez Canal, all the disruptions, as well as the daily ones, and all of our success being able to name new customers is helping here. He also mentioned the Gartner report and how that alone resulted in the highest number of inbound inquiries that we've ever had. There's a lot of good tailwinds behind us at this point. Okay. Okay. Can you guys hear me back now? Welcome back, friend. All right. Sorry about that. I guess I just got bounced. I could hear you, but you couldn't hear me. Sorry about that. Hearing loud and clear now. Just a couple questions on the supply side in terms of managing your business. I asked Rick on the demand side, but for supply, can you speak about the ability to hire new employees in this environment? Are you finding that you can source the talent in the Ottawa region? Or are you beginning to broaden that out with remote work? Are you actively sourcing outside of Ottawa than perhaps what you've done in the past? Yeah, it's a great question. As we said last call, in 2020, during the pandemic, we grew our workforce by north of 50%. Very aggressive hiring, that was worldwide, North America, here in Ottawa, Europe, in Asia, and in India. We've continued to hire in Q1, not to the same pace, but to the expected pace. I'd say the work-from-home global workforce certainly provides opportunity to find talent anywhere in the world. At the same time, I think it is not necessarily conducive to building careers for young people. It sounds great at the beginning, and then they realize, "Huh, how do I build my career if I'm never physically with anyone?" I'm not a buyer of work from home perpetually. I'm just not a buyer of that. I think ultimately, culture will erode. You will forego culture as a result. I think there's a reason why people are stronger together. I think there's a reason why communities are stronger when they lock arms. Our approach going forward will be hybrid. This is what we're hearing from our employee base. They prefer a hybrid approach, but they are all looking forward to seeing each other once again. We're continuing our work on our new global headquarters, which we're still on target to move in in Q1 of 2022. It will be a magnet. We're going to magnetize that place, and it will be a place employees will want to be. At the same time, we're not going to rush. We're not going to put safety behind us here. We have to be safe first and foremost. We're never going to put employees in harm's way. We're building a phenomenal culture. Our people matter here culture resonates really well globally, all around the world. We haven't had, I'd say, a systemic challenge in finding talent. Last one from me, also on the supply side. The MD&A called out the data center expansion in Montreal, which is starting in January. How is that progressing despite the restrictions? Then also in regards to just the supply of the technology hardware, which is quite tight. How should we think about the capacity of your existing data centers and the need to expand that capacity, and how do you think about mitigating risk if there are delays on the expansion side? Well, good question, Paul. Just to clarify, it's ongoing expansion of our Montreal data center. What drives our data center growth is really twofold. First, the growth of our customers, both from a new name expansion as well as expansion. Secondly, we develop in the cloud, so it's the engineering team as well. It's something whereby we always invest, again, ahead of the curve, what we want to do is make sure that we have appropriate additional capacity so that we can expand Whether it's driven by our customers' increased usage or by that expanded R&D team. It is with purpose, it is planned. It's part of our CapEx plan for the year, and it's proceeding as anticipated. Okay, thank you. I'll pass the line. You have a question from the line of Suthan Sukumar with Eight Capital. Good morning, gents. Good morning. When looking at your recent wins, how much of that is being driven through the Rapid Direct model versus traditional RapidResponse model, and how much of a role do partners versus direct sales play in kind of driving new deals to this new program? It's about the same, actually. I wouldn't say that we've shifted our practice or our sales protocols. We haven't shifted our approach to leveraging partner influence and involvement. We haven't shifted away from having partners more and more become prime on deployments. I wouldn't say there's been any shift at all in that regard. Okay, great. Are you guys seeing any learnings from RapidStart that you can take back into your traditional deployments to maybe improve overall the launch time frames? Okay. If I understand you correctly, when you say RapidStart, you're meaning what we call RapidStart, which is that a program? Sure, yeah. Okay. Well, in that case, we're definitely seeing a shift in more customers now than same time last year, looking at RapidStart as their first step. It's too early to say this out loud as something that is systemic, but we have experienced faster sales cycles as a result of RapidStart. As you would imagine, we're dramatically reducing the amount of risk that a prospect has to take to get started. Early days, we're monitoring that very closely. As we've always said, when we look at our cohorts of deals, they tend to be in that 18-month range in terms of sales cycle. With RapidStart, there's the potential to basically lower that number and start to see a faster rate of close than we have in the past. Hopefully, I answered the question you asked, but that's for sure the most significant thing that we're watching right now is the sales cycle. Does something like RapidStart as a vehicle reduce the time to close? Great. No, thanks. Due to the limit of time, we will be limiting questions to one question. You have a question from the line of Nick Agostino with Laurentian Bank Securities. Yes, good morning. I guess, my one question, looking at professional services, obviously second largest revenue component for you guys. In your press release in MD&A, you talk about, I guess, more revenues coming from expanded service offerings. I know, John, in the past, you talked about introducing services and being able to bill for them. I'm just wondering what type of service offerings, I guess, make up that comment about the expanded service offerings, and more importantly, can you maybe provide a split between how much of your professional services is tied to the implementation work to get a customer onboarded versus services being offered in the aftermarket, and how much of professional services overall can we maybe quantify, if possible, as being recurring in nature? That's it. Thanks, Nick. I mean, first and foremost, we've always viewed and continue to view the primary role of professional services as subscription enablement. We're pleased to see that actually our extended partner network's actually generating significantly more collective revenue than we are. What we've done is just to continue that connection with our customers, and primarily through our Prana acquisition last year, is also now being able to cost effectively introduce what we call sustainment services. This is after that subscription enablement is the ongoing connection and helping them better use and leverage and expand their usage of RapidResponse. Primarily, though, the professional services are still focused, though, on either the initial subscription enablement or further expansion of that subscription enablement. Any comment on, is that sustainment services, is that a recurring revenue stream, or is that one time in nature as well? No, it's recurring because it's living with our customers and living with their RapidResponse experiences. It is absolutely sustained. We continue to expand our strong team in India. The skill set there is amazing. We have 20 years of experience building that, and they're a very focused, knowledgeable team and have developed a rapport with our customers. That's an ongoing relationship. Okay. You have a question from the line of Martin Toner with ATB Capital Markets. Good morning, guys. Thanks for taking my question. Is it fair to say that customers looking for a more rapid return on their ROI results in shorter lead times, smaller initial contracts, and then higher NRR over time? That's the thesis for sure. Exactly in that order, right? I would expect reducing the risk, increasing the return on initial investment, and providing a path, providing a journey, to transform their governance model will yield those outcomes, right? Now, it's too early to say. We absolutely have seen some cases where sales cycles are radically reduced, and in some cases, they continue to be exactly as we have been seeing for 25 years. We're going to monitor it very closely. We're obviously very pleased coming off of a record Q4 2020, and then breaking records in Q1 again, and some of that, the result of RapidStart. We're going to continue to monitor that and see if that becomes a trend. It's a logical thesis. Super. Thanks for that. Congrats on a good quarter. I will leave it there. Thank you so much. You have a question from the line of Robert Young with Canaccord Genuity. Hi. You cut me off before. I guess you're letting me back in the queue here for a last question, maybe just a quick one. The chip shortage, the impact on the automotive sector seems tailor-made for what you guys are doing. Maybe if you could just use that as an example of maybe how the automotive sector is seeing your tool set in a different way, then I'll just let you off the hook. Yeah. It's another classic major disruption that you can't plan around. The old techniques, the old governance models, don't know what to do when such disruptions occur. You're right, it's a perfect use of concurrency, and scenario planning, and trade-offs, and so on. We've certainly done very well in high tech, and I might even say more so in the sub-segment in chip manufacturing. The customers involved in that space for us are certainly leveraging our technology as a result. There's no doubt about it. It's just one example. As I talk to other chief supply chain officers, whether it's a stuck boat, a plant fire, a COVID pandemic, or material failing inspection upon arrival at a factory. All of these things are unplanned events, and all of these things require hyper-agility to absorb. You can't plan your way around it. This is where concurrency works best. Okay, thanks. There appears to be no more questions in queue. We'll return the call back over to Richard Monkman for closing remarks. Thank you, operator. As you know, we announced my retirement in March, with Blaine transitioning to CFO on August 1st. Consequently, this is my 28th and final earnings call. I want to take this opportunity to thank the analysts, investors, and other listeners for your support over the years. It has been an absolute privilege to be part of the Kinaxis team and to share our story. Thank you and goodbye. Ladies and gentlemen, this does conclude today's conference call. You may now all disconnect. Thank you for your participation.