Good morning, ladies and gentlemen, and welcome to the Kinaxis Incorporated Fiscal 2023 Third Quarter Results Conference Call. Currently, all participants are in a listen mode only. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at the time for you to queue up your questions. I'd like to remind everyone that this call is being recorded today, Thursday, November 2, 2023. I would now turn the call over to Rick Wadsworth, Vice President of Investor Relations at Kinaxis Incorporated. Please go ahead, Mr. Wadsworth. Thanks, operator. Good morning, and welcome to the Kinaxis earnings call. Today, we will be discussing our third quarter results, which we issued after close of markets yesterday. With me on the call are John Sicard, our President and CEO, and Blaine Fitzgerald, our CFO. Before we get started, I want to emphasize that some of the information discussed on this call is based on information as of today, November 2, 2023, and contains forward-looking statements, including with respect to our recently announced share buyback, 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. 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 IR 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 the 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 IR homepage of our website. We will let you know when to change slides. I'll now turn the call over to John. Thank you, Rick. Good morning, everyone, and thank you for joining us today. I'll be starting with slide four. I'd like to highlight some key points for this call, all of which Blaine and I will explore in more detail. First, Q3 financial results were strong, with SaaS revenue growth of 26%, total revenue growth of 21%, and a healthy adjusted EBITDA of 21%. I'm very pleased with the team's execution, despite various challenging macro conditions around the world. Second, we are providing updated annual guidance that, notwithstanding an unavoidable shift in revenue classification between SaaS and subscription term license, would be in line with our original estimates at the start of this calendar year and continues to deliver Rule of 40+ performance for 2023, with an increase in profitability. Third, the last quarter of every year is typically our strongest for building ARR, and we expect it to be as usual this year. We are actively working on some major expansions and some exciting net new additions we hope to be able to share with you very soon. Fourth, management and the board is pleased to have announced a buyback of up to 5% of our shares starting this Monday, the earliest possible date. At current valuations, this investment is an easy decision, a good use of capital, and in the best interest of the company. Fifth, and most exciting for me, we continue to see compelling evidence that supply chain management market remains very robust. Our pipeline remains very healthy, and our ability to serve it is stronger than ever. Let me expand my comments on this last point, and I'll ask Blaine to go deeper on the rest very shortly. Turning to slide five. With respect to market activity, our pipeline is larger now than it was at this time last year and remains very near record levels. Our business development team, which builds pipeline in its earliest stages, booked a record number of meetings for our account executives in Q3, with an over 40% year-over-year increase. This is an encouraging sign and evidence of accelerated interest in supply chain transformation. We have invested heavily in expanding our sales team, now over 30% larger than it was at the start of 2022, and ready to execute on these new opportunities as they mature. I should also note that we are not slowing down our investments in sales and marketing, but rather will continue to expand in both areas through Q4 and through 2024 to ensure coverage of an expanding market. Our win rate against key competition so far this year continues to be strong, and we're pleased to be able to name a sample of our recent customer wins, including: in the automotive sector, we added innovator Volvo Cars. In our industrial vertical, we welcome Ecolab, a global sustainability leader offering water, hygiene, and infection prevention solutions and services that protect people and the resources vital for life. In life sciences and pharmaceuticals, we welcome several new customers. Cooper, a European leader in self-care, including non-prescription medicines, food supplements, and medical devices. Fertin Pharma, a Philip Morris company, which develops and manufactures innovative systems for delivering oral pharmaceuticals. Finally, FIS in Italy, one of Europe's leading private manufacturers of active ingredients for the pharmaceutical industry. I'm also pleased to share that the vast majority of new deployments occurring within our public cloud are occurring within our public cloud partners, Microsoft and Google. As I've mentioned in the past, this is an important strategy that will help us scale as we accelerate into the future, and ultimately will become our standard method of delivery. In recent periods, we talked about several long-term strategies to expand our addressable market, notably with more focus on targeting small- to medium-sized businesses. I'm pleased with our progress to date. For example, just over half of the new customers added this quarter and year to date have been mid-market or smaller companies, and the year-to-date total is higher than in the same period in 2022. In the third quarter, our value-added resellers, or VARs, who sell to smaller companies, contributed a record number of wins, and we are anticipating a strong fourth quarter as well. Serving this much broader market increases both our growth opportunities and business resilience. Now, moving to slide six, we launched several new and exciting applications earlier this year, all of which attract new subscription revenue. Our supply chain execution application is targeting a market that a recent industry report sized at over $12 billion in 2023, and that's expected to grow roughly 20% through 2030. Our new enterprise scheduling application is highly differentiated as the first and only tool on the market to allow companies to create and manage a globally integrated production scheduling strategy. Our sustainable supply chain solution allows companies to embed emission factors in supply chain decisions, just as requirements around corporate disclosures of GHG emissions are being mandated globally. And finally, Demand.AI leverages cutting-edge AI to provide highly accurate demand forecasts based on insights that human observation alone wouldn't be able to uncover. This offering has been instrumental as our entry point to the quick service restaurant segment of retail, where we are serving one of the world's most recognized brands and will be key in penetrating the broader retail vertical for years to come. I'll now turn the call over to Blaine to cover more details on our financial results. 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. Starting on slide seven, total revenue in the third quarter was up 21% to $108.1 million, and our key SaaS revenue result grew 26% to $67.9 million. Subscription term license revenue was $2.5 million versus $5.8 million in Q3 2022. This item largely follows the normal cadence of renewals among our small group of on-premise customers or those that have the option to move their deployment on-premise. Our professional services activity resulted in $32.9 million in revenue, or 28% growth over Q3 2022. 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 $4.8 million, up 18%. Third quarter gross profit increased by 19% to $65.3 million. Gross margin in the quarter was 60%, compared to 62% in Q3 2022. Our software gross margin was 74%, compared to 80% in the comparative period, with the biggest factor in this change being our transition to public cloud hosting arrangements. We continue to be ahead of plan in this transition, which is positive for our business, and expect related costs to normalize by the beginning of 2025. Professional services gross margin was extremely strong at 29%, compared to 17% in Q3 2022, mainly due to significantly lower use of third-party contractors in delivering projects. We still foresee a total annual gross margin in the 60%-62% range. As a result of the growth in our revenue and gross profit, Adjusted EBITDA was up 54% to $22.8 million, with a margin of 21%, compared to 17% in the third quarter last year. Our profit in the quarter increased by over 350% to $7.4 million, or 25 cents per diluted share, compared to $1.6 million in Q3 2022. Cash flow use in operating activities was $1.5 million, compared to $3.6 million in the prior year period. For the year to date, cash flow generated from operating activities was $51.4 million versus $26.8 million in the comparable period. At September 30th, 2023, cash, cash equivalents, and short-term investments grew to $290 million from $225.8 million at the end of 2022. As always, we remain focused on being a strong cash generative business. On to slide eight. As John mentioned, and as our Q3 results demonstrate, we've been sharpening our focus on profitability, and I want to provide an example. As you know, we continue to make investments in our sales organization to capture the large and growing opportunity ahead, but we have simultaneously been gaining leverage in our R&D and G&A lines. Slide 8 shows we are steadily spending less on these operating expense items as a percent of total revenue or normalized revenue, which averages out our lumpy subscription term license revenue over a three-year period. We are very pleased with the progress and fully anticipate more ahead. Overall, IFRS results in Q3 were very solid. Moving to slide nine, our annual recurring revenue, or ARR, grew 18% over the third quarter of 2022 to $304 million, reflecting a couple of factors. First, economic uncertainty has obviously been a challenge for the software industry all year. Although our ARR growth rate is strong compared to many, it has grown slower than our ambitious expectations. After ARR growth peaked in Q3 last year, we started to see macro impacts, so the comparative figure is a challenging one this quarter. As usual, we expect the fourth quarter will be our strongest for winning new business and growing ARR. Secondly, Q3 is the first quarter that we don't benefit from the inorganic ARR growth related to our acquisition of MPO. If you look at ARR excluding MPO, as depicted on slide nine, it only declined by 1 percentage point this quarter. As we only recently launched the integrated supply chain execution product, we fully expect that aspect, that aspect of ARR to grow over the next year. Finally, to echo John's comments, given strong underlying demand, a larger sales team just coming into higher efficiency, a strong competitive win rate, and multiple early-stage growth strategies that are showing progress, I'm fully confident in ARR acceleration as these strategies mature and as the macro environment improves. On slide 10, at quarter end, our remaining performance obligation, or RPO, was $591 million, up 8% from Q3 2022. Of that total, $547 million relates to the SaaS business, up 12% year-over-year. Of the SaaS amount, roughly $67.9 million converts to revenue next quarter. By far, the biggest aspect to slower RPO growth relates to a year-to-date 48% decrease in the amount of renewals versus the same time last year, strictly related to the normal renewal cycle. Q3 2023 was at a relatively low point in the normal renewal cycle as well. In other words, there simply hasn't been as much business scheduled for renewal this year. Further details on our RPO can be found in the revenue note to our financials. Turning to s lide 11, we are updating our 2023 guidance while still focusing on Rule of 40 performance. We anticipate stronger profitability in subscription term license revenue and slightly tempered SaaS growth that still demonstrates acceleration over last year's IFRS results, an impressive accomplishment. We are very pleased to affirm our total revenue outlook, which remains unchanged at $425 million to $435 million. With respect to some of the components of total revenue, it can be difficult to accurately forecast which direction new customers will go when choosing to host our solution. We generally assume that new customers will be hosted in our environment and are therefore recognized as SaaS revenue. However, in 2023, certain customers decided to host or have the option to host our solution on-premise, which is recognized as subscription term license revenue. Year to date, this result has resulted in just over $3 million in lower SaaS revenue, or between 1 and 2 percentage points of growth, while simultaneously increasing our subscription term license revenue. As a result, we are increasing our subscription term license revenue outlook for the year to $18 million to $20 million and updating our SaaS revenue to grow between 24% and 25% over our 2022 levels. Absent this shift in the various accounting revenue components, there would have been no change to SaaS guidance. Finally, we are increasing our adjusted EBITDA margin guidance to 16%-18% for the year, reflecting operating leverage that's led to increased profitability. We have managed to bring costs in lower than initially planned across several functional areas, while also absorbing the additional public cloud expense compared to the amortization of our private data centers in previous years. In the current environment, we will remain even more diligent around profitability and our balanced approach to performance, while still making key investments to fuel top-line growth. Turning to slide 12, as we announced last night, we have instituted a normal course issuer bid for up to 5% of our stock. We can start buying Monday. We are an acknowledged leader in an exciting market, and few companies offer our growth and profitability profile. At current valuations, this investment is an easy decision, a good use of capital, and in the best interest of the company. The NCIB provides the opportunity to more than cover issuances made to date under the expanded stock-based compensation plan we rolled out in 2022. Given our strong cash generation over time and a robust current cash balance, we will also have more than enough capital to simultaneously pursue growth strategies. With that, I'll turn the call back to John. Thank you, Blaine. Over the last few years, the world has witnessed and survived several global business disruptions, and today, we continue to see challenges affecting supply chains across every vertical in every geography. It has become obvious to most that legacy techniques are no longer fit for use in supporting the demands of a modern supply chain practice. CEOs and boards can't unsee what they've been exposed to, and there, and there continues to be a push towards new and better ways to absorb continuous volatility. I continue to have more discussions than ever with practitioners of leading companies looking for our help, and I continue to believe that powering supply chain excellence will require the fusion between machine learning and AI, with concurrent planning and execution. That is the value Kinaxis can and will deliver to all who need it. On behalf of the Kinaxis team, thank you for your support. I'll turn the line over to the operator now for Q&A. If you'd like to ask any questions, please press star and number one on your telephone keypad. That's star and number one on your telephone keypad. We got our first question from Doug Taylor from Canaccord Genuity. Your line is now open. Yes, thank you, and good morning, everyone. First question's for Blaine. Last quarter, on the conference call, you spoke to a couple of large expansion opportunities that you expected would hit Q3 or Q4. Sounds like, from the prepared remarks, that a few of those are still on the come here in Q4. Maybe you could speak to your execution against those opportunities, and if you did observe any slippage from Q3 into future periods. Yeah, good, good catch there, Doug. We obviously did have some slippage into Q4. Probably our most significant expansion is right now; it was supposed to be Q3. It's looking like it'll be November at this stage. We are still working through that deal, but yeah, there's some extremely big expansions that are slated for Q4 at this point that were supposed to be in Q3. All right. That's helpful. You know, professional services margins obviously stand out here as particularly strong in the quarter. You've said in your prepared remarks, you expect, you know, that to be revert to the mean here. I guess my question here on this is, you know, the degree to which you expect the shifting mix of third party versus in-house delivery, you know, can be a positive benefit in years ahead, as you continue to optimize that. Yeah. Yeah, you know, that 29% gross margin for professional services, number one, it's a record, and when it first came in, I obviously told my team: "Can you double and triple-check that number?" Because we've never seen a margin that high. But it reaffirms the power that we have with our pricing right now for professional services, and we are trying to push as much to our partners. Our professional services team is doing extremely well on their side at winning these deals and doing quite well at making our customers very, very happy with the deployments that they're receiving. But again, what you're seeing right now with those margins is, in large part, due to the power that we have with our pricing around professional services, based on how successful we've been over the last little while. I might just add, just from a commentary perspective, I recently had two conversations, one with a CEO, one of our largest partners, and another, who basically leads the practice of an extremely large SI, and both have told me that they are at record-level revenue for Kinaxis-related work year to date. So it's, I think, a reflection of a lot of project starts that have occurred over the last four quarters. One last question from me for you, John. I wanted to ask a question on competition. I think we've all seen some of the noise related to E2open. I recognize that's pretty recent. E2open is not directly competitive with your entire portfolio, but I thought it might be a good time to revisit the competitive environment. You've quoted very strong win rates. Just to ask you, John, how you see the competition evolving as you expand your own product portfolio across the, you know, supply chain management surface area? Yeah. So SAP continues to be omnipresent. Let's just say they're almost always the incumbent. You know, I would say between 60% and 70% of our enterprise accounts are very large SAP shops, and so we tend to hit that wall first. And then subsequent, we might see Blue Yonder and perhaps o9. E2open, almost never. I can't even remember actually the last time. I simply can't remember the last time we were in the ring with them. And I think, you know, I would point back to the Gartner MQ as being a great representation of our strengths and weaknesses, quite honestly. I think they're extremely balanced in their approach, and I think they represent, you know, a good. Well, a good description of how each of the competitors play out. And indeed, we've been monitoring, and I've been very, very happy with our win rates, you know, with our key competitors, in all those cases, and, you know, the vast majority, we tend to, we tend to win. We don't win them all. We're not, we're not batting a thousand. But we are, you know, well above average, let's just say. I'm pretty happy with the results. That's great, color. I'll pass the line. Thank you. Our next question comes from David Weiss from Scotiabank. Your line is now open. Hi, this is David Weiss. I'm on for Kevin Krishnaraj from Scotiabank. So thanks for taking my questions. Can you talk about demand and interest for your supply chain execution and scheduling solutions? How do we think about the potential near-term revenue opportunity? What are customers saying, and how are you positioned, competitively? Yeah, so two comments I'll make on that. First, the enterprise scheduler, I believe it to be the first of its kind. You know, scheduling factories has always been, you know, reserved for boutique software companies. There's very few companies that have made a living strictly on scheduling and achieved the type of size of a Kinaxis or greater. And we've taken the approach that. Well, frankly, we believe that we could build an enterprise scheduler where one ring rules them all. And more than that, we believe that we can schedule multiple factories simultaneously. And so we have run several proof of concepts with actual customers. We've gotten lots of amazing feedback from some of our larger enterprise customers. There's a tremendous amount of interest in that. We've just launched it. We think it will be, we believe it'll be a winner product, because scheduling, you know, I consider scheduling to be the boundary between planning and execution, which is why I started talking about scheduling first. And so once you solve for scheduling, connected to and connected to our current platform, it leads to supply chain execution, which was the thesis around MPO. And then during COVID, when you couldn't find a container to save your life, and even if you could, it was probably 10x the cost it was before, you know, transportation risk became omnipresent for a lot of our customers. So they were the ones who really came to us and said, "You really have to find a way to fuse in supply chain execution with the planning side." So, you know, if something happens where material is at risk while it's in motion, we need to know the moment that happens. We can't wait until it's too late to respond to that, and that's really the thesis behind our acquisition with MPO. Now, we've been hard at work integrating those technologies. I think we're going to see some acceleration and pickup of that splicing execution as we enter 2024. Okay, great. Thanks. Last one for me. Is there. Are there any particular verticals that stand out in terms of gaining better traction or sales with some of your newer products outside of Rapid Response, such as MPO and the scheduling that you just discussed? I think every vertical has its own, interesting, volatility formula. You know, in the automotive sector, for example, you know, first, a lot of automotive companies are starting to realize they're in the mobility business. They're not in the car manufacturing, they're into mobility, and they're becoming computers with some mechanics around it. And so, you know, they're having to deal with chip shortages across the board. And so, you know, it becomes a supply, kind of a disruption that affects them, and that's where Supply.AI has been extremely valuable to customers. You know, in some cases, it's a demand profile volatility that drives the need for concurrency. And when I say demand profile, there's two main occurrences that we're seeing. There are some manufacturers that are telling us, "We're going to sell 100% of what we manufacture. We're going to manufacture 100% of what we can. There's more demand for our products than we have supply, and we have to make decisions about allocation." And that process is a continuous volatility challenge, you know, for many, and that's where we'll see a lot of Demand.AI type of usage. On the scheduling side, I think it's on. If you still manufacture, if you're a company that manufactures your own goods, then then our, our scheduling solution, our enterprise scheduler, is going to fit. It's going. There will be a fit for use. Now, we do have some companies out there, especially some that are in the high-tech electronic space, that are big brands, but they don't manufacture a thing. Everything is done through contract manufacturing. In those cases, things like enterprise scheduling will not be a fit for use for them. They simply don't manufacture anything. And so, now, mentioning the contract manufacturers like Flextronics and or Flex, I guess, they're called now. They've been a customer for so long that I've always known them as Flextronics. But anyway, companies like that, talking to their CIO, Gus Shahin, you know, there's a lot of interest in enterprise scheduling because they have over 100 factories to schedule simultaneously. So there's going to be a lot of interest from the contract manufacturing space. Thank you. Our next question comes from Thanos, from BMO Capital Markets. Your line is now open. Hi, good morning. John, can you expand on the macro? So if we look at conditions now versus, say, three months ago, is it status quo, or have things gotten incrementally worse? Are customers showing any signs of increasing caution versus earlier in the year? Yeah, I think it might be a little worse than it was last quarter in terms of signing authorities that we're seeing, where, you know, delays are now getting pushed to board meetings, and board meetings are happening, as you know, once a quarter. And in some cases, those have protracted. And so that's one of the things that we're seeing mostly on the enterprise side, less so on the mid-market, small to mid-market side. The other thing that is, you know, I'd say status quo is that accounts are starting smaller, which is fine with us. You know, I get it. You know, we still have companies coming to us saying, "Can you please get me live in three months or less than six months?" And, you know, the value of the solution will help pave the way for expansion. And so that's been, I'd say, status quo. Great. And then if we look at the ARR growth rates you've had over the last couple of quarters, just very superficially, it seems like it might be a challenge to sustain a mid-twenties SaaS growth rate next year. Although you obviously suggested you're looking at strong bookings in Q4, and as you just alluded to, maybe some of the customers you're signing today will have expansions next year as they roll out. Maybe it's too early to talk about it, but just at this point, are there any broad goalposts you'd be willing to share regarding, say, a minimum level of SaaS growth you'd hope to achieve next year? Yeah, thanks, John. I'll, I'll take this one. Yeah, obviously, it's too early on to talk about what we're gonna do for 2024. I think that we are still gonna have strong SaaS growth. We are still gonna be growing at an elite level compared to many of our peers. We have a ton of things that we're excited about. We are growing our sales team. So we have a significant amount of that sales team cohort that's getting to what we would say are more efficient level based on the maturity they've had within the organization. We haven't been an organization that is focused on expand until this year. And so some of our peers that have reported recently are the exact opposite, where they're focused more on the expansion side than the new name account side. So we're very fortunate to be growing that team and to see how strong we can be on the expansion side of our business. VARs, as John mentioned in the call, we hit new records. I was kinda looking at our VAR numbers, and I'm starting to look back just only like three or four years and realize our VAR business is now basically what we used to have as an organic business or a direct organic business not too long ago. And so that's getting pretty exciting. SMB is still something that we're penetrating more and more. We just came out with a wider margin of new SKUs that we can monetize on in the nearest future. I think oil and gas, QSR, two very exciting verticals that we're starting to expand into. So if nothing, we haven't given our numbers for 2024 yet, and we will wait another quarter to do that as we go through our investment planning. But we're extremely excited with where we are right now. We think we've been doing a lot of the heavy lifting over the past couple of years, and we're just getting ready to reap some of those rewards. And it's a situation where it's hard to sometimes apologize for getting 26% SaaS revenue growth and 21% EBITDA margins. Those are a rule of 47, which I don't think there's that many companies out there that can, that can brag about that. So, we're trying to do this with deference and with, with being humble as, as part of this, but at the same time, we have to kind of stick our chest out and realize we've done an amazing job up to this point. Yeah, I would add, Thanos, also, you know, some people might wonder whether supply chain excellence and supply chain transformation is temporary. I mean, we see no signs of that. I mean, we, you know, we and you've known us quite some time. You know exactly who we were three years ago. We've doubled, more than doubled the number of customers in three years, more than doubled, in three years. And, and it's. You know, think of it as taking us 25 years to get to a point, then three years to double it. We've been a Rule of 40, I wanna say, for at least eight years in a row, which is a sign of great resilience and growth. And, and as, Blaine said, you know, we know the conversations we're having. We know the deals we're working on. There's some pretty exciting stuff in the pipeline there. And as you know, as Blaine says, very difficult to predict what's happening in the micro, and macro-level economy around the world, and so we're monitoring all of that. But notwithstanding, you know, we operate the business, you know, with great responsibility, I'd say, and great insight. So if there's opportunity, we're certainly not gonna waste it. That's excellent color. I'll leave it there. Thanks. Our next question comes from Suthan Sukumar from Stifel. Your line is now open. Good morning, gents. First question for me is, you know, really on the product engagement side with respect to some of your newer product offerings like Planning.AI and so forth. How products been influencing win rates and deal sizes for you guys? Just wondering if it's, you know, it's been a catalyst for new business, or are they more of value on the expansion side? Well, the answer is really both. You know, you know, when we meet a brand-new prospect, the first thing I say, it might sound odd coming from not only a software engineer, but coming from a CEO of a software company, the first thing out of my mouth is, "Software doesn't matter." You have to bond on technique first. And, you know, I drive the conversation above software on purpose. Obviously, I have. You know, there's a method, perhaps, to the madness. You know, and so people are coming to us, not because of one particular module that we happen to offer. It's not like my algorithm is better than your algorithm. That's absurd. I will say that the techniques, the techniques that Kinaxis offers around concurrency are vastly superior than anything else on the market. I fundamentally believe that in my heart and in my head, and so we start there. Now, as it relates to things like enterprise scheduling, well, that's an expansion of concurrency. What makes that most valuable is the fact that it's inextricably connected to everything else. And certainly that benefits expansion for sure, because customers that already use us, as I mentioned, around enterprise scheduling and then contract manufacturing space, there's tremendous interest there. One of our confectionery customers, very, very interested, because they have many factories that can manufacture the same goodies, you know, in the same way. And so being able to schedule across factories is unique. Those things just don't exist otherwise. And again, built on top of a concurrent engine, that's what gets the industry excited. That's what I think will power the future supply chain, and that will power future supply chain excellence. So, now, you mentioned Demand.ai, and I do want to touch on that one, because that, in the space of retail, has been, really, really potent, where we are disrupting. We are disrupting systems and replacing systems that have been in place for 30 years, and we are stepping in with a system of solution and environment that runs not only faster, but is more superior as it relates to forecast accuracy. And so that, you know, around machine learning and AI, we have a very, very strong bench, exceptionally gifted, engineers. I wanna say we have 50-ish patents in play at the moment, the vast majority of which are associated with machine learning and AI. So we're. You know, this, what I talked about, this fusion of ML/AI on top of a concurrent engine, I think is where excellence is gonna live in the future. Great. Thank you for that color. A second question from me is really on the land and expand opportunity. It's good to hear that you guys are doubling down on your expansion efforts. Is there anything that you would flag, you know, with respect to the nature of the expansion activity that you're seeing now that may be different than you've seen in prior years? Just wondering if there's, you know, something, you know, related to the pace or the size of these opportunities. And ultimately, does that sort of drive any change to what you've seen from the medium-term outlook that you guys have talked about previously? Yeah, so I'll start and then maybe ask Blaine to add further color. But one of the things that we did very recently is build a dedicated team to focus strictly on the install base, and, you know, with a leader. And that happened earlier in 2023, so we are taking a very, let's just say, focused approach at addressing the base and addressing expansion. I'd say at the moment, roughly 50%, I wanna say, and again, I'm looking at Blaine to keep me honest here, roughly 50% of our ARR, at least this quarter, was in the expansion versus net new. It's close enough anyway, let's just say. And so, you know, we continue to stay very close with the base, and again, as I mentioned just earlier, we doubled the size of our customer base inside of a three-year period. And so that is giving us a great sort of internal market to go after with net new products. Blaine, do you want to add anything to that commentary? Well, maybe it's to jump into the last part of your comment. You talked about midterm guidance, and we expected that we would be asking questions around that. We obviously talked about 30% year-over-year SaaS growth and 25% adjusted EBITDA. We're not changing from that. We've still seen it as the midterm. We're barely in, not even at one year from when we first announced that midterm guidance. So, we still think it's gonna be there. I would say, the only thing that's probably shifted is that, the SaaS revenue growth, we had foreseen it to be in the, the short term, and I wish I could have been sitting here today and saying, "We've already knocked it out of the park." But we do still see it in, in that midterm projections at this stage. Great. Thank you. Pass to line. Our next question comes from Mark Schappel, from Capital Markets. Your line is now open. Hi, thank you for taking my question. John, in the prepared remarks, it was noted that, you know, Q4 is typically a big AR, ARR quarter for the company. And given the more challenging macro environment, maybe just talk a little bit about what gives you confidence that you're gonna bring in the ARR this year in Q4? Well, there, there's a couple of things. One, we know what we're negotiating. And so when we have pens in hand and lawyers assigned, doesn't mean anything is guaranteed, I assure you, because of the macro conditions and often, you know, getting signatures and getting ink to dry, getting board members, in some cases, to sign, you know, are things that we're continuously monitoring and questioning and doing all of those things to make sure that we're not just, quote, guessing on what's gonna happen. We certainly know what's in play. And you know, we know exactly what expansions we're working on, as Blaine mentioned. There's a rather large expansion that slipped out of the quarter, which now looks like it'll be a November timeframe. And so, we're feeling pretty confident that all of that is in good standing. And, and third, we know what the pipeline is, you know, ahead of us, and, and that's what's giving us that, that level of confidence. Now, obviously, the thing we can't predict is exactly, what is happening to these macro conditions, on a moment's notice. And, and so, you know, we'll be able to comment, you know, at the next call when we know exactly what history you know, what history ultimately looks like. But that's what's really driving our confidence. We know what's in front of us, we know what we're working, we have pens in hand, we have some rather exciting accounts that we're working. And, yeah, that's, that's what's fueling our confidence. Great. Thank you. Our next question comes from Erin Kyle from CIBC. Your line is now open. Hi, good morning. It's Erin Kyle on for Stephanie Price here. Maybe if I could ask one question on the professional services growth. You know, in the prior few quarters, we saw professional services growth fall below subscription growth, and then this quarter we saw it tick back up again at 28%. So could you talk a bit about what drove the higher growth this quarter? And maybe just how we should think about professional services growth looking into 2024. Good question, and I will just say that, that I have credits to the team, that the team's doing extremely well at executing with what's in front of them right now. Their bookings number, which we don't disclose, hit an all-time high this past quarter. The year-over-year growth on that side is phenomenal. We're using third-party contractors less and less. But saying all that, we do wanna be partner first. We do wanna push as much of our professional services work in their direction. And we are having, you know, executive discussions on trying to figure out how to achieve that going forward, even more than we are right now. Training enablement is obviously one of the biggest factors that you have out there, but we want our partners to be able to step in and have the exact same level of service that our team is doing right now. The issue we have is that our team is so good, and it's a testament to the strong retention that we have in place. I can say right now, this year, we have less than a handful of customers that we've lost, which is. I don't know how many companies of our size could actually brag with that. But that's a large, large part is because of how strong that professional services team. So that's a long way of saying that we're growing that revenue base still pretty quick, quicker than we would like, but we need to get our partner organization at the level of service to ensure that they have the trust from our customers and our prospects to go with them first before going with us. Thank you. That's, that's helpful color there. And then maybe I could just ask one more here on the, on the license revenue in the quarter, and I appreciate you, you kind of alluded to this in your prepared remarks. But last quarter, you did speak about a term license customer that you were in the process of determining how that contract revenue should be recognized and when it would come in. And then this quarter, we did see that the higher expected license revenue came through, and then you did note with your guidance that, yeah, excluding that, the SaaS guidance revenue would have been unchanged. So was that related to the term license customer that you alluded to last quarter? And then maybe as a follow-on, do you, do you have any more of these contracts in the pipeline that could cause a similar situation? Yeah. So, that one, so I'll, I'll answer first. The answer is no, it's not related to that one, customer. That customer, we are still, in negotiations. We are, we believe it will fall into 2024, but, there is a chance it could still come in for 2023, in terms of where we have the majority of that revenue hitting. So it's a good sign that we have some, some extra revenue just sitting out there waiting to be recognized relating to that customer. But, no, it doesn't have anything to do with the, how we did in, Q3 at this stage. Okay. Thank you very much. I'll pass the line. Our next question comes from Richard Tse from NBF. Your line is now open. Hi, this is Amir calling in for Richard. Congrats again on the quarter. Just wondering if you could talk about how the HAVI partnership is tracking. We're frankly thrilled with it. I was very recently on stage with Rodney Brown, their Chief Supply Chain Officer, at a Zero100 event. Anybody who tracks Rodney on LinkedIn would have seen. A great photo of, of him and I on stage, chatting about not only the partnership, but the value that we're delivering this, this, iconic brand. So we're really, really happy with, with that partnership. We're happy with the work that we're doing with them. We believe that, well, frankly, I think H- Javi, they're trailblazing, a new standard for quick service restaurant, as it relates to supply chain excellence, not only on the demand side, but the simultaneous replenishment side. And that's what has us very excited, it has them excited. You know, serving one brand is just the first step. They obviously have, many, many other brands that they serve and that they're talking to. And, and so, stay tuned for more, exciting news as it relates to that partnership. Maybe I'll just add in. I was fortunate enough to talk with Javi last week, and we were talking a little bit more about what our go-to-market, our co- go-to-market strategy looks like in the foreseeable future. There's a lot of exciting things. We talk about QSR, but there's more verticals besides QSR that we potentially could move into with them, and we're having those discussions as well. Okay, thanks for that. And then just one follow-up. I guess, Blaine, this one's more for you, but you talked about the software margins and how the transition to cloud is basically kind of compressing them. So over the next few quarters, should we still expect software margins to contract, or have we bottomed there? I think we're pretty close to where we expect. I mean, it could go a couple percentage points a little bit lower, but I don't think we're expecting it to go much more. We are spending a lot of time to make sure that we optimize that migration as much as possible. But you're absolutely right. Like, we don't see a rebound for the next at least the next four quarters as a result of the duplicative cost that we have with public cloud. We're doing our best, and one of the hardest things that we're doing is that we're ahead of schedule, and we have more customers on public cloud than we expected this time, which then that adds up to more and more duplicative cost that we have at this stage. So, we're happy that we're being so successful right now with those migrations, but we know that it doesn't really help our margin profile at this stage. Okay. Thanks so much for that, Colin. I'll pass along. Before we move on to the next question, as a reminder, if you would like to ask a question, please press star number one on your telephone keypad. Our next question comes from Kiran from Eight Capital. Your line is now open. Morning, all. On for Christian here. Now to start, you called out strength with VARs. Can you talk about the maturity of this channel and some of the targets you're setting for them? May, I'll start and let John jump in. So, it's still very immature. We're excited that we're getting new records with the VARs and that it's growing. We have over 40 VARs that we have in place, but we're also trying to make sure that they are appropriately performing at the levels that we want. And so there'll be an assessment of how they do as we go forward. We have some that are just already hitting the ground running and doing extremely well. It's interesting just seeing the number of new geographies that we're entering into that we would have never imagined before. But we are seeing that. I hate using hockey sticks, even though I'm Canadian, but we are starting to see a little bit of a hockey stick situation with VARs because they are now getting to the level of maturity that they need to execute, and they need to win over some new engagements. So, yeah, we're extremely excited about where this could go. The pipeline is way bigger than we had a year ago, and excited to see where this heads, and I think this could be a very strong piece of our business that has grown very fast in the recent periods. Yeah, the only color I will add, and, you know, I wouldn't want this to be lost on investors, the notion that Kinaxis has produced a solution that not only is what I might call revolutionary as it relates to, the technique that it supports, the notion of concurrency. But we're serving companies that do under $100 million in revenue and companies that do over $150 billion in revenue. We could serve them all. Whether you make tofu, jet engines, automotive, pharmaceuticals, shampoo, you know, on and on, it goes. Industrial equipment, you know, again, with exactly the same software. We're doing that around the world. The notion of VARs, you know, for us, as Blaine says, not only providing an arm, a sales arm in geographies for which we are not in, it is an arm that is going after SMB, the small to medium-sized businesses, on our behalf. And, and so that's the other thing that we're quite excited about, where we'll, you know, the expectation is to see some acceleration in net new wins. Small companies become medium companies. Medium companies become enterprises. We. So we love this. I think this is what builds resilience in a business. Thanks, guys. That's helpful color. And so I click on here. Were there reasons outside the conference that influenced OpEx sequentially? How do you think about the run rate for OpEx? Yeah, so I guess you just going on that, what we have for the quarter. This, I think very few times in my history that I've seen a company that's growing and being successful have OpEx that's quarter-over-quarter lower. And you're seeing sales and marketing, and you're seeing R&D and G&A a little bit lower. Obviously, I talked about operating leverage. We had our big conference in Q2, which is obviously not something we repeat every quarter, and so that helped us out with our sales and marketing numbers going down. But we are being very thoughtful about the investment we have in our teams. We're in a fortunate position that we have been thoughtful, and we don't have to worry about changes and that a lot of, I think, our competitors and our peers that have gone through, especially in this current environment. So we've been looking at this for a long time. We've been trying to make sure that we are growing at the right rate, that we're gonna get to the profitability that we want to. This is a long-term plan that we've been building forward. And I think that we are set up right now for success to get even more operating leverage in the future. I think those numbers, where we see that on a normalized revenue for R&D and G&A, still have room to come down, but we're gonna not do it all at once. We're gonna continue to take baby steps along the way. Appreciate that, Blaine. I'll pass the line. Our next question comes from Martin Toner from ATB Capital Markets. Your line is now open. Thanks so much for the question. Just wanted a little more detail on the improvement in professional services, EBITDA margins, or sorry, gross margins. How sustainable are those? And then a second question, can you talk about the STL strength and likelihood that it will continue into next year, like, relative to the normal cycle? Sure. So professional services margins, again, I did mention we're very happy with the pricing power. We are utilizing that pricing at our disposal right now, and the 29% margins caught me by surprise. It caught a lot of people by surprise. We didn't expect it to come in that high. Our utilization rates are right on track to what we expected. Obviously, the big impact was the use of partners or third-party contractors. That came down significantly during that period of time. We obviously don't give any guidance as to PS margins, but we do think that we are starting to learn a little bit more about the margins that we can expect going forward. So, I don't want to say we're gonna be 29% forever going forward, but I don't see why we can't either. Okay, super. Yeah. How about Subscription Term License? So, subscription term license at the beginning of the year, we said that it would be lower next year. So we gave a little bit more of an insight into where we saw the next three years. Next year is a lower period, and we know that, just based on renewals, that is the case. We have one deal that, again, I think I mentioned, that we are trying to track to figure out if it's gonna be either 2024 or late 2023. But otherwise, we should expect the subscription term license will be a lower year next year, and then pop back up to somewhere around the range where we are this year. Great. Thank you very much. Our next question comes from John Shutter from RBC. Your line is now open. Hi, it's John on for Paul Treiber. Just a question on your sales investments that you're- you've been making, and I know you've talked in the past about how the teams are ramping. So just wanted to know if there's any updates there on, you know, what proportion of your sales teams are fully ramped, and what proportion of wins are coming through more recent sales hires, as opposed to more tenured hires? Thanks. Yeah, it's a great question, and something we've been spending a little bit of time on. We look at cohorts of our sales team between zero and 12 months of experience, 12 to 18 months, and then 18 months plus. And there is a significant difference for that 18-month plus versus the other two cohorts. Obviously, as you can imagine, the lot more experience they have, the higher productivity they will have. But there is a number of multiples that you get when you have over 18 months. And that's generally just, we go back to our sales cycle, which is now somewhere sitting around 12 months. It's ensuring they have that sales cycle to run through, plus a little bit of ramping period to ensure they understand what Kinaxis is all about. So, we are pretty happy with how they're ramping. As of right now, we've gone through, I'd say, the last six quarters, where we had a decreasing amount of those 18-month+ account execs. That's about to switch, I think it's. Well, this quarter is the first kind of step progression that we have for some increased AEs that are getting over the 18-month area. So, a higher proportion is seen right now, but generally, you can roughly expect somewhere around two-thirds are supposed to be at 18-month+, and then the one-third is developing over time. Great. Thanks. This now concludes the Q&A session. We'd now like to hand back over the call to Rick Wadsworth. Thank you. Thanks, operator, and thank you everyone for participating on today's call. We appreciate your questions and your ongoing support and interest in Kinaxis. We look forward to speaking with you again when we report our annual results. Thanks very much. Bye.