Good morning, ladies and gentlemen. Welcome to the Kinaxis Inc. Fiscal 2022 Q2 results conference call. Currently, 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, August 10th, 2022. I'll 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 Q2 results, which we issued after closing markets yesterday. With me on the call are John Sicard, our President and Chief Executive Officer, and Blaine Fitzgerald, our Chief Financial Officer. Before we get started, I want to emphasize that some of the information discussed in this call is based on information as of today, August 10, 2022, and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For a 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, including adjusted EBITDA and constant currency results and metrics. A reconciliation between adjusted EBITDA and the corresponding IFRS result 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 investor relations section of our website. Neither this call nor the website 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 Blaine, who will review our financial results and outlook. Finally, John will make some closing statements before opening 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'll 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. I'll be starting with slide four. Our Q2 results demonstrate the momentum we continue to experience in our business. While foreign exchange fluctuations are a headwind to reported results for global SaaS companies right now, our constant currency results pierce through that to reflect the very strong underlying fundamentals in our market. For the Q2, in constant currency, we saw a SaaS revenue growth of 27%, total revenue growth of 42%, and adjusted EBITDA margin of 15%. Our constant currency ARR grew by 25% in the quarter, a record level for this important indicator of growth in our subscription business. Blaine will provide all the specific details on reported and constant currency results momentarily. Turning to slide five. Our momentum winning new customers continued in the Q2. We've seen well over 50% growth in new customer wins so far this year compared to the first half of 2021, which itself was a period that saw strong growth over 2020. Simply put, more companies than ever are replacing inflexible, legacy, cascaded planning techniques in favor of a more agile concurrent planning approach. As always, we're honored to be selected by a growing number of global companies that put their trust and confidence in Kinaxis and RapidResponse to bring about transformative improvement in supply chain planning performance. For example, in Q2, we won innovative pharmaceutical companies like EQRx and Pharmathen, high-tech companies like test and measurement leader NI, formerly National Instruments, and control equipment manufacturer IDEC, consumer products companies like ekaterra, which makes many of the tea brands we drink every day, and OraFarm Supply, who provide many over-the-counter health products. In our industrial vertical, a specialty chemicals company, Infineum USA, who focuses on sustainability in their engine fuels and oil products. You'd have also seen our news release in the Q2 announcing that Castolin Eutectic, a welding, brazing, and coating leader, is also now a Kinaxis customer. For the first half of 2022, amongst our new customers, roughly 60% have been enterprise class and 40% from the mid-market or smaller. We're thrilled with our ability to serve such a broad universe of companies and verticals with a single SaaS offering and continue to appreciate the support and influence our partners have on the vast majority of our wins. I am happy to report that momentum in the business has not let up. Leading indicators of demand remained robust. Our June 30th Q4 rolling pipeline continued to grow nicely over the comparable period of 2021, and we saw another sharp increase in the number of unsolicited inbound leads after experiencing the same dynamic last quarter. Both these indicators are at an all-time high level. We view these trends as distinct signs of ongoing momentum in the business. Moving to slide 6. Certainly, part of the reason we generated a lot of interest in Q2 was the May release of the latest Gartner Magic Quadrant for supply chain planning solutions. For the eighth consecutive time, we were named a leader. Of the 22 vendors evaluated, Gartner positioned Kinaxis furthest on the completeness of vision axis. In all, our financial results and the other metrics from the Q2 provide us with the confidence to increase our annual total revenue guidance, subscription term license revenue guidance, and introduce a 2022 SaaS revenue growth outlook of 25%-27% in constant currency. I'll now ask Blaine to discuss results for the Q2 and share more details about our guidance for 2022. Blaine. Thank you, John, and good morning. As a reminder, unless noted otherwise, all figures reported on today's call are in US dollars under IFRS. As has been widely reported, foreign exchange fluctuations in 2022 have been a universal headwind to the reported results of SaaS companies that report in US dollars and sell their products globally. While the majority of our revenue is denominated in US dollars, the portion that is contracted in euro, Japanese yen, and British pound were dramatically impacted by the weakening of those currencies against the US dollar. As a result, for certain key metrics, I'll be sharing non-IFRS constant currency results, which eliminate the impact of such fluctuations and better demonstrate the ongoing underlying momentum in our business. We intend to share this information only as long as we deem it to be truly relevant to the interpretation of our results. Take a look at slide 7. Total revenue in the Q1 was up 35% to $80.8 million, and up 42% on a constant currency basis to $85.3 million. SaaS revenue grew 21% to $51.1 million. More significantly, it was up an impressive 27% on a constant currency basis to $53.5 million. The steadily increasing growth in our ARR metric is flowing through to SaaS revenue growth on a constant currency basis as you would expect. Subscription term license revenue was $0.4 million versus $0.6 million in Q2 2021. You'll recall that we expected roughly two-thirds of the annual amount for this revenue to be recognized in the Q1, just less than one-quarter of the amount in Q3, and the remainder in Q4. The modest revenue in Q2 is consistent with that previous commentary. As always, fluctuations in this revenue item are largely tied to the normal renewal cycle of our customer-hosted software subscriptions and vary period to period as a result. Our professional services activity was strong again, resulting in $25.4 million in revenue or 81% growth over the corresponding quarter of 2021. The rapid growth is consistent with and reflects our recent acceleration in new customer wins. Generally, this revenue item varies from quarter to quarter based on the number, size, and timing of customer projects underway, as well as the proportion of work assumed by partners. Maintenance and support revenue for the quarter was $3.9 million, up 25% from Q2 2021, reflecting recent growth in the subscription business with a small group of customers who have chosen to deploy RapidResponse on-premise or who maintain the option to do so. We continue to be pleased with the diversity and strength of our total revenue base. For the quarter, our 10 largest customers accounted for 23% of our total revenues versus 27% in the comparable period, with no customer accounting for greater than 10% of total revenues. Q2 gross profit increased by 24% to $49.8 million, largely as a result of revenue growth. Gross margin in the quarter was 62% compared to 67% in Q2 2021, largely reflecting a higher proportion of lower margin professional services revenue in the mix, the impact of foreign exchange fluctuations on revenue, and recent strategic investments in related teams. Adjusted EBITDA was up 45% to $10.4 million, for a margin of 13% compared to 12% in the Q2 last year. On a constant currency basis, our adjusted EBITDA was $13.1 million or 15% of revenue. Our loss in the quarter was $2.6 million compared to a profit of $3.1 million in Q2 2021. As a result of the focused investment to drive future SaaS growth even higher, we remain very excited about our market and how our planned investments will help us continue to take share. Q2 cash flow from operating activities was $8.4 million, down from $15 million in the comparable period, largely reflecting the lower profit resulting from our strategic investments. At June 30, 2022, cash equivalents, and short-term investments totaled $258.1 million compared to $233.4 million at the end of 2021. We remain pleased with our outstanding track record of cash generation. I'd like to highlight our year-to-date performance on some key items, all on a constant currency basis. SaaS revenue grew 26%, total revenue grew 58%, and our adjusted EBITDA margin is at 26% of revenue. All of these results show us tracking very well against our plans for the year. Moving on to slide 8. Turning to some key metrics, our annual recurring revenue grew 21% to $241 million, including currency impacts. Currency movements masked even stronger underlying growth. In constant currency, our ARR grew 25% year-over-year to $249 million. This record level of growth reflects the unprecedented strength we have recently experienced winning new accounts and of success winning incremental business from our installed base. I'll remind you that the growth rate for the SaaS portion of ARR is higher than for total ARR. On slide nine, our remaining performance obligation continues to be strong at $494.8 million, up 30% from June 30th, 2021. Of that total, $459.6 million relates to SaaS business, which is up 28% year-over-year. $101.5 million of the SaaS amount will be recognized as revenue within 2022. Given the impact of renewal cycles on RPO, we look at growth in the metric over longer periods, and we are pleased that our 3-year CAGR for total RPO sits at 26%. Now further details on our RPO can be found in the revenue note to our financials. Go on to slide 10. With respect to our outlook, we are pleased to be able to provide you with increased guidance for fiscal 2022. We now expect total revenue for 2022 to be between $355 million and $365 million, largely due to an improved view on professional services and subscription term license revenue. Including the headwinds of foreign currency fluctuations, fiscal year 2022, SaaS revenue is now expected to grow between 21% and 23% over our 2021 level. Significantly, though we see SaaS revenue growing between 25% and 27% over the 2021 level on a constant currency basis, we now expect subscription term license revenue to be higher, between $34 million and $36 million for the year. Our adjusted EBITDA margin guidance remains at 16%-19%. While our higher revenue guidance does mean that a result at the upper end of the range is more achievable, I'll remind you that our priority remains on making strategic investments to position us for the growing opportunity ahead of us. Overall, while FX fluctuations have been a headwind to reported results, our constant currency results clearly demonstrate the ongoing steady improvement in the demand environment in our business. We remain excited to be investing into this significant developing opportunity. With that, I'll turn the call back to John. Thank you, Blaine. Along with a strong financial quarter, we also had some exciting developments on the product front. We introduced Planning.AI, which enhances RapidResponse by automatically detecting and fusing the best combinations of heuristics, optimization, and machine learning to provide highly accurate solutions to supply chain challenges and opportunities, both on the demand and supply side, in the fastest time possible. Companies no longer have to manage the trade-offs between speed and accuracy when choosing between different planning algorithms. We are thrilled to have won the 2022 Digital Innovation Award for this new product presented by Ventana Research in the category of operations and supply chain. We also continued to enhance the capabilities of our product through the addition of two more global extension partners, Wahupa and Blume Global. Wahupa brings probabilistic multi-echelon inventory optimization, or MEIO, to RapidResponse, which helps calculate optimal inventory targets and safety stock settings so companies can reach their goals while removing waste. With Blume Global, RapidResponse will be connected to their logistics visibility and transportation management system capabilities. The result will be better alignment between supply chain planning and execution, enabling companies to quickly remedy or even avoid freight transportation disruptions. The ability to connect our unique concurrent planning capabilities across more aspects of the supply chain remains a core focus for our development, partnerships, and acquisition strategies. Overall, we're very pleased with the financial results and the business developments in our Q2. Despite a challenging economic backdrop, concurrent planning continues to gain momentum in its march towards becoming a critical capability for leading brands globally. We're looking forward to a very exciting back half of 2022. As always, thank you for taking the time to join us on this call. With that, I'll turn the line over to the operator for Q&A. Thank you. If you'd like to ask a question, please press star then one on your telephone keypad. Our first question is from Richard Tse with National Bank Financial. Your line is open. Yes, thank you. John, like, we're hearing a lot of talk from our names about elongated sales cycles, elevated signing authorities. You're obviously very confident in the outlook. Are you hearing anything on that front, or is it, you know, something unique to Kinaxis given, you know, the market that you play in? You know, Richard, we're actually seeing the opposite effect. We've been tracking, you know, I would say our average cycle time, as you've heard us say, has been closer to the 18-month mark. I'd say we're closer to the 12 now than we are 18. I think it's a sign and, you know, an acknowledgment that the pandemic was just the start of some pretty wild disruption. We're seeing more and more now, our customers asking us to run scenarios around inflation, recovery. I mean, inflation is hitting different parts of the world at different rates and recovering at different rates, and obviously that has a pretty pronounced impact on profitability for a lot of companies and cash. I would say it's had a little bit of the opposite effect. You know, that is also manifested in the growing pipeline, which has basically not been at a higher point than it is at this stage. A pretty remarkable increase in unsolicited inbound leads, which I attribute largely to the Gartner MQ. More so I think it's a recognition that supply chain isn't one of those nice-to-have applications. It's becoming a critical competence for survival. I think I might have said this on previous calls, every board is asking every CEO, "What are you going to do next time?" Of course, the CEOs are turning their chairs and asking their chief supply chain officers, "What are we going to do next time?" Because clearly, the methods that govern supply chain in the past will not survive the future. Okay, that's great. In regards to professional services, it's obviously been a very robust part of, you know, the results here. How do you balance what you take on versus your partners? 'Cause obviously your partner network has expanded considerably as well over the past few years. We continue to have a partner-first approach for professional services. You know, frankly, we talk about this a lot. Obviously professional services coming in very strong, it is absolutely the side effect of a compounding success. Every quarter, we're seeing a pretty dramatic increase in net new accounts. As you know, professional services is a transient kind of a revenue stream. You know, you sign a 3-year commitment subscription agreement, and professional services are getting the projects underway. It could take anywhere from 3 to 9 months, and so that revenue ends up being transient. Well, we're seeing the compounding effects of record net new customer wins, and that's what's driving professional services revenues, not only for us, but for our partners. It is extremely hot, I would say, right now, the whole project space. As you would expect, you know, in the current conditions, manufacturers aren't looking for perfection, they're looking for speed, right? You know, they're looking for an inoculation to the pain they're in. Project timelines are extremely aggressive, and that is what we're seeing in the field. But I will tell you, the vast majority of net new accounts are partner-influenced, and we still have a partner-first approach. We continue to sign new partners and new VARs every single quarter. That's great. Thank you. The next question is from Daniel Chan with TD Securities. Your line is open. Hi, good morning. Congrats on the strong results. With the uncertainty in the macro backdrop potentially having a higher impact on SMBs and large enterprises, are you planning to continue your SMB strategy, or do you take the foot off the pedal there a bit? Just wondering if you're seeing any change in your pipeline mix shift just given the macro backdrop? Actually, you know, I think we're seeing an increase in the pipeline as a result of the macroeconomic conditions, inflation, supply disruption, the war, you know, transportation lane challenges, the lack of cargo containers. I can go on and on about the disruptions. It used to be all about the pandemic, and now it is absolutely a multidimensional problem. You know, we're thrilled, in fact, with our broader approach because we think that the supply chain pain is not just one for enterprise class customers. You know, this is a challenge being felt across all, any size company in all the verticals. Our TAM, in fact, has gone. You might have recalled us talking about our TAM being in the sort of 3,000 or so. It'. Closer to 20 when we added the SMB market. We're gonna continue along both. We've proven that the technology fits. We've proven that the economics work for both parties. I think it's an absolute win-win-win. Great. Thanks, John. Maybe one for Blaine. Just on the margin guidance, it's unchanged despite the higher term licenses mix. Is that just from the higher mix of ProServ, or is there something else in there? How do we think about how the FX impact EBITDA margin? Thank you. Yeah. Good questions. I can say that if we had provided an outlook on constant currency for just the EBITDA, that number would be higher. We are having a little bit of headwind on FX on the bottom line, but we are really proud to be able to keep our profitability range in the same ballpark as what we've shown in the past. As we look at the mix, ProServ is gonna be a big part of why we're growing so fast on the revenue side, which obviously brings along a lower margin alongside it. We're also showing a little bit of increase on the subscription term license revenues. As all of you know, that's 100% margins that we get to have from that. More importantly, we are very direct in what I've been saying for the last little while. We see a huge opportunity right now. We've seen our TAM grow quite a bit over the last couple of years. We are seeing our pipeline grow extremely fast, and so we don't wanna take our foot off the pedal. At this stage, you know, one of the things everyone is seeing right now, there are all these tech layoffs that are happening around Canada and the U.S., and it's unfortunate for all those companies that are going through this. The exact opposite's happening. I'm looking forward to when the media starts talking about the success stories that are out there, despite some of the headwinds that other companies are seeing and some of the macroeconomic factors that are impacting other companies. We're one of the success stories, and because of that opportunity that we see, we have to keep on investing and keep that pedal down and accelerating into what we see as a huge opportunity in front of us. Thank you. The next question is from Stephanie Price with CIBC. Your line is open. Thanks. Good morning. Just following up on that comment, wondering if you can give a bit of an update on talent attrition and talent attraction and attrition here, and just wonder if it's improved a bit just given the macro environment and the tech layoffs we're seeing at other company? Yeah, thank you for that question. There's never a day we're not hiring, I will tell you that. You know, we are seeing pretty strong retention in our business. I think a lot of that has to do with the culture, the mission that we are on. You know, I've always said supply chain is about saving humanity while doing the least amount of harm to the planet, and obviously, a lot of people resonate with that mission. You know, at the same time, you know, to meet the demands, we are perpetually hiring. You know, we're roughly around that 1,400 or so mark today, but I will tell you, we're under our targets, so we're very aggressively looking to increase staff to meet the demands. Hopefully that answers your question, Stephanie. It does. Thanks. On the 2022 guidance, the revenue guide was increased overall, which is great to see, but the SaaS growth expectations were down slightly in real dollars. Just curious if there's a geographic mix difference between SaaS and the rest of the revenue lines here. Yeah. So I'll start off by saying we're not disclosing the exact percentages that we have, but definitely the Japanese yen and euro are the top two biggest additional currencies that we have, where we have billing in those currencies. GBP is third, and then we obviously have a couple of other smaller currencies. The majority is U.S. dollars. We're seeing the effects that a lot of other companies are seeing. I mean, I was looking at the numbers over the last couple of days, and right now, the Japanese yen has dropped 15% since year-end. Euro has dropped 10%, and GBP has dropped 11%. We are doing the best we can with those headwinds. More importantly for us is that we believe the FX will come back, and it'll eventually even itself out. Because we have these long-term contracts, we're gonna be in a great position to see that grow quite hopefully rapidly in the future, which is a good sign for us. At this stage, I would say the majority of our contracts are in U.S. dollars, but there's a healthy amount that comes from Japanese yen, euro, and I guess the third one is GBP. Okay, thank you. The next question is from Thanos Moschopoulos with BMO Capital Markets. Your line is open. Hi, good morning. John, just going back to the strong professional services growth and the ongoing expansion to the partner ecosystem, have you been able to scale it up to meet demand sufficiently? Like, at this point, are there any constraints to SaaS growth with respect to implementation capacity, or have you been able to scale it as needed? We've been able to scale it as needed. We work very, very closely. Conrad Mandala, who runs our global alliance team, is in lockstep with our partners. Obviously we have quite a lot of, I'd say, foresight in what is coming in. It's not like, you know, deals are manifesting and closing inside of a few days. That's not the case. We have a very, very robust point of view on the current state and the current stages of every deal. There's a lot of planning that goes into it. As you heard prior, one of the what I might have called existential threats to scale was data center capacity, and we've signed an agreement with Microsoft to provide us with that public cloud offering. We're not going to be subject, let's just say, to any capacity constraints as it relates to data center hardware and such. So far, Thanos, we've seen, you know, we've been able to absorb the rate of success, I will say. Again, a lot of that is great planning, lots of visibility in what's to come. It's giving us tremendous amount of confidence in what we're guiding, obviously, because of that visibility and the strong partners that we've signed already, and working very, very closely with them. Great. As far as RapidStart, does the ratio of RapidStart deals continue to increase? Now that you've been selling it for a while. If we look at kind of the initial cohorts of RapidStart customers, are those expansions kind of proceeding as you would have expected or any surprises there? Yeah, RapidStart has become, you know, I would say one of our leading differentiators. Many of the prospects we speak to, you know, their first intuition is how can you go live in just 12 weeks? I'd say two-thirds of our accounts will start at some point with RapidStart even though they have expansion opportunities. It is progressing exactly as we have anticipated it to. Again, it gives us a tremendous competitive advantage in the sales cycle. I will tell you that, uniformly it's not where people stop. You know, think of it as it's the initial inoculation, and it, you know, it gets. It brings the fever down, as I like to say, for many of these manufacturers, and it makes them healthy enough to take on subsequent phases of the project. It's, we're seeing great adoption. Great. Thanks, Jonathan. The next question is from Paul Treiber with RBC Capital Markets. Your line is open. Thanks very much, and good morning. I just wanted to ask about the growth in mid-market. You mentioned that 40% of new customers are mid-market. You know, how should we think about the contribution to either, you know, SaaS revenue or ARR from mid-market, or at least, the growth there? Maybe another way to look at it is how do we think about the average deal size in mid-market as opposed to enterprise? Yeah. We license RapidResponse, you know, through number of users and sites obviously, and mid-market companies are likely to have fewer users and fewer sites. You know, right now we're seeing mid-market deals, you know, they'll often start at roughly half of that of an enterprise account, just because of size and the overall capacity. But it's still early days, you know. Many, you know, in many ways, as I said, they suffer exactly the same challenges as the enterprise customers. But the value to Kinaxis is less the starting point and more that it adds 17,000 accounts to go after. You know, that's where, you know, we're extremely excited to be able to offer RapidResponse in its current state, where the technology fits small- to medium-sized businesses and the economics work for both parties. This is not some loss leader in any way, shape, or form. These are still very, very profitable accounts for us. That's where our strategy, I think, for the long term is really gonna pay off as we, you know, as we get to our aspirational goals of a significantly accelerated business. Thanks. That's helpful. Just in regards to public cloud, yeah, I imagine it's probably too early to be coming up in bookings for Q2. Could you just speak to, like, the interest that you've seen from customers in considering public cloud as a deployment strategy? When do you think you'd start seeing that show up in bookings and in customer deployments? Yeah, that's a great question. We're proceeding as planned as it relates to public cloud and our Microsoft Azure partnership. We're still on track to be able to host new customers on that platform in the Q3. That's the target, and things are on track for that. I think it's best for Kinaxis and our customers to be able to host from anywhere, you know, whether it's our own environments or current or public cloud, regardless of where you are geographically. We're well on our way to achieve that. Stay tuned. This next quarter is where we anticipate seeing the first customer stood up in that environment. Okay, great. I'll pass the line. The next question is from Christian Sgro with Eight Capital. Your line is open. Hi. Good morning, and thanks for taking my questions. The first one I'll ask is on the guidance. Now, when we think about, you know, being motivated to raise the guidance two quarters in a row here, I'm wondering from your view how you would split that between conversations with new customers year to date, or maybe it's more related to sales cycles that have moved, you know, quicker than expected. You know, are those the two main factors, or is there a split, or is there anything else, has increased your confidence through the year? Sure. Well, I'll start on a subscription term license revenue because that one's an easy one. As you're aware, the majority of our new customers come on and they have on-demand hosting of RapidResponse, and so they end up on the SaaS line. Every once in a while we have an anomaly that occurs, and in this case, we will have an anomaly happening in Q3, where we have a new customer, which we'll be hopefully very excited to be able to say the name at some point. They have added, they've chosen to do or took the option at least to have on-premise. As a result, that was an easy reason why we've increased that guidance. On total revenue, yeah, I mean, we had a discussion the other day. We were in an executive meeting, and we started realizing, like. We are gonna have to start talking about records every single quarter, and we have been talking about records every single quarter for like the last, I think we're back to six or seven quarters in a row now. That increase in new name account is really driving the tip of the spear for professional services, which as you can imagine, they need to come in and be able to deploy our RapidResponse solution to these new customers, to a vast majority of them, and share that with the partners that we have on board. Every quarter it seems like we're getting these records which are pushing us above the forecasting that we expected. The SaaS revenue is doing, I think, quite well considering the FX headwinds, and so we're maintaining a fairly healthy revenue number on the SaaS revenue side to support professional services as well as subscription term license revenue, which are doing phenomenally well right now. You know, I hope I continue to keep doing these raises every single quarter. It's. I like the surprises that we're getting from the business that we're continuing to outperform. That's all helpful color. For my second question here, I'll poke into the subscription term license line. It's a little bit mechanical, but maybe two questions. First, you mentioned it's a new customer coming on board Q3. My first question is, you know, what motivates someone to stay on-prem? Is it a public sector customer, for example? You know, what the motivation would be. Then my follow on there is, you know, worth understanding just if there's any economic difference, you know, big economic difference to Kinaxis, you know, when it's on-prem or SaaS. I understand it trickles through accounting quite differently, but the way you guys see it as a customer win, just broadly. Sure. So the customers that are sitting right now in subscription term license or have chosen on-prem hosting are. The biggest category is aerospace and defense. I will say that this customer is not falling under that category. Every once in a while we had this last year in I believe it was Q3, maybe Q4 last year as well. We do get the surprises where a customer comes in and says, "Hey, we want you to do the hosting, but we want the option to be able to do this on-premise at some point in the future if we need to." This particular customer is falling more under that category. It's a situation where we have to give the option sometimes to a customer if that's what they need to get over the line and to be comfortable with our agreements, and it's as simple as that. Now, as far as the economics, the on-prem deals that come on that are pure on-prem, it's 100% margin for us. Those are great agreements that we can provide our solution at the same pricing that we would for on-demand and very little cost that hits us. We do have some support costs that will come in, but very little cost compared to an on-demand. That's all helpful color. Thanks for taking my questions. The next question is from Suthan Sukumar with Stifel. Your line is open. Good morning, guys, and congrats on the quarter. The first question I had was just wondering if you guys could actually share some color on your go-to-market strategy in the mid-market, and how it differs from the enterprise and really what are the key drivers of your pipeline there in the mid-market? It's a great question and the thing that I've come to appreciate and realize, as I said, is the challenges being felt by the largest companies in the world are equally being felt by the smallest. In some cases, the smaller you are, the more acute the challenges they face because they don't have a lot of buffer, if you will, for the smaller companies. In the end, I would say that the thing that unites all manufacturers right now is this belief that the methods they used to govern supply chain over the last 30 years won't survive the next 3. They realize that there's a new competence required in order to survive all of this turmoil in the world. You're certainly not gonna harness all of this chaos. We're using precisely the same pitch. This isn't about technology, it's about technique. The flawed techniques of the last 30 years will not survive the next 3, and there's an appreciation for that. The competence that the small to medium-sized companies are looking for is hyper agility, just like the large enterprises are looking for. You know, again, we're just absolutely thrilled to be able to, you know, run a sales process with the same messaging, with the exact same product. There's, you know, I would say, the economics model for us and them continue to fit the business. This is what's given us so much. We're just so excited for, quite frankly, the next 5 years. I think we're living through a renaissance. It's, you know, this is not a enterprise class customer problem only. This is a global supply chain challenge. That's why I believe we're going to be living through this renaissance for many years to come. Gotcha. Thank you. My second question. How should we think about your investment priorities for the remainder of the year? On the hiring front, where's the catch-up most needed? Is it on the pro services side, or on the go-to-market side, or on R&D? Yeah. We continue to as I said earlier, there's never a day that we're not hiring. Obviously, professional services experiences the first wave as sales brings in success, they're the first to experience the wave. Of course, we're working with our partners and filling in gaps ourselves where our partners run out of capacity. Obviously, they're hiring as quickly as they can as well. We continue to hire in sales. Again, as you heard from Blaine, the prognosis here out many years to come, we see a tremendous opportunity. The pipeline continues to maintain its robustness and grow quarter after quarter. Unsolicited inbound leads continues to grow quarter after quarter. We had another record this last quarter. We're not letting up on the sales engine either. Now at the same time, you know, when I think about the sales engine, it's not just feet on the street. We're investing heavily in our partner alliance group and our support of VARs, value-added resellers, and in onboarding, VARs and preparing them for success. You know, we're investing heavily in what I would call the partner enablement program here, because we recognize that in order for us to absorb the success we believe is in front of us, we can't do it alone. We have to do it with partner support, an army of people outside of Kinaxis. We're investing heavily on that side as well. You okay? Great. Thank you for taking my questions. I'll pass along. The next question is from Nick Agostino with Laurentian Bank Securities. Your line is open. Yes. Good morning, everybody. John, just a quick question for you, just thinking about verticals in general. You mentioned earlier, obviously, the macro environment, the challenges that businesses are seeing, the conditions, and then obviously there's just an acceleration of disruptions in the overall marketplace, something that I don't think we've seen in, you know, a very, very long time. Just given that whole environment, given the fact that you guys are introducing the public cloud now in Q3, you're seeing tightening sales cycle, and I guess my question is at the end of the day, and what are you seeing any dormant verticals from where maybe guys that were a little bit less active in the past? Are you seeing them waking up to the environment just even over the last six months, and the fact that you guys are introducing Planning.ai and the public cloud? Are you seeing any verticals that are waking up to that? Are you seeing any verticals that maybe were scratching the surface and aren't really part of your six or seven verticals that you're focusing on today, but just because of what's happening, you're seeing more and more conversation that's really starting to, you know, wake people up as a result? Oh, Nick, thank you for that question. Yes. I think you've probably heard me say while we target you know the traditional seven verticals that we talk about but I've always said we're in more verticals than that, and it's more exploratory for us until we're confident that we can serve that particular market. I will tell you, maybe even just this earnings call where we mentioned specialty chemical that's not the first one. You know, the oil and gas sector might be one that I might highlight as exceptionally interesting for us. You know, I won't necessarily call them you know dormant, but as it relates to supply chain and the energy sector, that one has you know that one might be gaining some momentum, I'll just say. I'll You know, we'll share more as things progress here. That would be one that we might see. The other, I'll tell you, has more to do with the geographies that we're tackling. We've traditionally been, you know, sort of North America, Asia, largely Japan, and Europe-focused. Through the VARs, it's getting us in every geography that we're not in, quite frankly, and that's been very exciting. I don't think that our VAR, the VAR contribution, and tackling the markets that they have some access to that we don't. I don't think we'll see a major contribution in 2022, but 2023 and 2024, we will. I really do think we're gonna start to see some significant contributions from our VAR program. Back to your question, which I love, is the energy sort of oil and gas sector. Okay. Thank you for that. The next question, excuse me, the next question is from Martin Toner with ATB Capital Markets. Your line is open. Hey, everyone. Thanks so much for taking my question. Congrats on some great numbers. My question is around Planning.ai. How is that being received? To what extent is it contributing to winning new customers, growing with existing customers? Maybe can we end with the acquisition there of Rubikloud last year? You know, it's been a year or so, well actually maybe a little more. Yeah. of the success of that deal. Yeah. No, absolutely. Planning.ai, obviously we're thrilled to have won that award even though it was released very recently. It was released, you know, while we were piloting Planning.ai with existing customers. It wasn't just a, you know, a release with a hope that this would fit some use cases. We worked very closely with a few of our customers, and so, you know, we're in that process right now of deploying Planning.ai with a subset of our customers. Stay tuned. Obviously, we're pretty excited. This is extremely innovative. You know, the fusing together of heuristics optimization and machine learning within an existing, you know, one holistic brain, if you will, is quite unique. If you recall, one of the thesis around Rubikloud was increasing our bench strength around machine learning. That's you know definitely played a role in our acceleration on that particular front. Obviously with Planning.ai, there's a sizable machine learning component to it. Okay. Super. Can you comment on your strength in the retail vertical? Yes. You know, we continue to maintain, you know, the relationships in retail that were adopted. We've won some additional accounts in retail. Obviously, you know, some we're very much looking forward to announcing soon. We're working on one particular one at the moment. Hopefully in the next short while we'll be able to announce. We continue to see some progress there. You know, obviously leveraging our investments in demand sensing for the retail market as well as moving into replenishment. You know, this is, you know, this is going to be a thesis that will yield another very strong vertical for us. Fantastic. I appreciate the color, and all my other questions have been answered. Thank you. We have no further questions at this time. We'll turn it over to Mr. Wadsworth for any closing comments. Great. Thanks operator. Thanks everyone for participating on today's call. We appreciate your questions as always and your ongoing interest and support of Kinaxis. We look forward to speaking with you again when we report our Q3 results. Thanks very much. Bye-bye. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.