Good morning, ladies and gentlemen. Welcome to the Kinaxis Inc. Fiscal 2023 Fourth Quarter 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, Thursday, February 29th, 2024. I will now turn the call over to Rick Wadsworth, Vice President of Investor Relations at Kinaxis Inc. Please go ahead, Mr. Wadsworth. Thanks, Operator. Good morning and welcome to the Kinaxis earnings call. Today we will be discussing our fourth quarter and year-end 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 on this call is based on information as of today, February 29, 2024, and contains forward-looking statements that involve risks and uncertainty. Actual results may differ materially from those set forth in such statements. For discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in the earnings press release as well as in our SEDAR files. 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 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 Investor Relations section of our website. Neither this call nor the webcast archive may be rerecorded or otherwise reproduced or distributed without prior written permission from Kinaxis. To begin our call, John will discuss the highlights of our quarter and year 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 or our website. We'll let you know when to change slides. I'll 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. Let me start by saying how proud I am of the Kinaxis team. We delivered a very strong annual SaaS growth of 24%, balanced with profitability that came in above expectations. Our Adjusted EBITDA margin for the full year was 18%, and we had record free cash flow of over $75 million, more than 70% higher than ever before. In Q4, we experienced SaaS revenue growth of 19% and an Adjusted EBITDA margin of 18%, which allowed us to finish the year within all our updated guidance targets. We had a huge quarter for renewals, a testament to the incredible value our customers derive from leveraging our unique concurrency approach to managing supply chains. As one noteworthy example, iconic consumer products company Bosch was both a renewal in the quarter and a source of significant new ARR thanks to expansion activity. Bosch confirmed their longer-term commitment to Kinaxis as the platform of choice for supply chain planning. Together, our net customer wins, expansion into the base, and renewals activity fueled a record RPO level, both in total and for the SaaS element alone. SaaS RPO grew 28% from the end of Q3, and its three-year CAGR is a healthy 26%, demonstrating our exciting growth over a period of time. Now, moving to slide five, I'm thrilled to say that we won a record number of new customers, both in Q4 and for the full year. This is an impressive accomplishment that reflects, in part, our success across some key growth strategies that I've talked about before. For example, we won a record number of mid-market customers, a growth strategy we initiated just over three years ago and has now become a meaningful part of our business today and is creating great expansion opportunities for our future. We also won a record number of small customers through our value-added reseller channel, which is just over a year old and ramping up quickly. In all, over 40% of our new wins this year came from our mid-market or smaller customers, including through VARs. As we've mentioned in the past, we've continued our efforts to move in customers into the public cloud infrastructure, and I'm happy to report that we deployed the majority of our new customers in the public cloud through 2023. In fact, in Q3 and Q4, almost all our new customers were launched from either GCP or Microsoft Azure. Given the economic backdrop in 2023, our focus was to simply win the customer, and I'm extremely pleased we did that at a record pace. On previous calls in 2023, we talked about adding customers like ExxonMobil, Volvo, and HAVI, who was trusted by the world's largest quick-service restaurants to handle their supply chain management needs. To that impressive list, you can now add global names like performance running leader Brooks Running, Switzerland-based global agricultural technology giant Syngenta, which has over $30 billion in sales, France-based global pharmaceutical group Servier, whose 20,000+ employees make critical cardiology, oncology, and other drugs, Italian cosmetics leader Intercos, who provides behind-the-scenes research and innovation for some of the world's biggest makeup lines, NORMA Group, who creates the clamps and connectors and systems that keep water and other vital fluids flowing smoothly for industries and for society globally, and finally, KIK Consumer Products, a leading North American private brand manufacturer delivering top-tier national brand equivalent cleaners, bleach, laundry, and dish care products. Our gross customer retention rate remained at an elite level in 2023, solidly in the 95%-100% range that we target, and our win rate against our top three competitors remained very strong, closing over 60% of the deals we pursued against them in 2023, and none of the three had a winning record against us. Even with this success, I do see room for improvement as recent additions to our sales team continue to gain tenure with Kinaxis and as we continue to offer more value through RapidResponse. I'm on slide six. Today, we are a global leader in supply chain management, empowering businesses of all sizes to orchestrate their end-to-end supply chain network, from multi-tier strategic planning down to the second execution and last-mile delivery. New offerings that we have recently launched, like supply chain execution, enterprise scheduling, sustainable supply chain, and Planning.AI, offer an additional opportunity for growth in 2024 and ahead. In January, we launched AI and ML-powered capabilities tailored to help retailers manage the complexity of their operations on a massive scale, including tens of thousands of locations, countless SKUs, constant promotions, and complicated inventory variables. These innovations include a brand new replenishment planning capability for optimal restocking, as well as retail-specific enhancements to Demand.AI and demand planning. The retail market is the largest of any we serve in terms of number of potential customers, and we're excited to further penetrate this underserved vertical. All these innovations will help us win new customers and expand within our installed base, where we now have a dedicated team focused on driving results. In 2023, additions to our annual recurring revenue were split roughly 60/40 between new customers and expansion with existing customers. We have a massive opportunity to penetrate this rapidly growing group further, and I am pleased to see early success from this team. On to slide seven. I mentioned last quarter that our business development team indicated a record number of initial meetings with prospects, a stage in the funnel development prior to our pipeline. I'm pleased to say that the team hit another all-time high in Q4, helping to drive a new all-time high for our four-quarter rolling pipeline, which has reaccelerated for the first time since early 2023. We're mindful of ongoing uncertainty in the macro environment, but we're encouraged by these green shoots of improvement. As mentioned on our last call, we have been intensifying our focus on profitability and are in great shape to do that. In 2022 and in 2023, we made important investments in sales and other functions that put Kinaxis in a much stronger position across our business. In 2024, we will take advantage of ongoing operating leverage to continue to market towards our midterm goal of 25%+ Adjusted EBITDA. I'll now turn the call over to Blaine to review the financials for the quarter and year and discuss our outlook in detail. I'll conclude with a few remarks after that. Blaine? 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 8, I'm pleased to report fourth-quarter results that delivered on our performance goals for the year. Total revenue in the fourth quarter was up 14% to $112 million, which is affected by the normal subscription term license revenue cycle. Our SaaS revenue grew 19% to $69.9 million, and our subscription term license revenue was $2.9 million versus $9.1 million in Q4 of 2022. Subscription term licenses largely follow the normal cadence of renewals. Among our small group of on-premise customers are those that have the option to move their deployments on-premise. Professional services activity resulted in $34.3 million in revenue for 31% growth over Q4 of 2022, a reflection of the record number of customer wins in the quarter and year. We remain focused on being partner-first when it comes to delivering professional services, but obviously, we're very pleased with this result. Maintenance and support revenue for the quarter was $4.9 million, up 12%. Fourth-quarter gross profit increased 12% to $68.9 million. Gross margin in the quarter was 62%, the same as the comparative period. Software gross margin was 76% compared to 80% in the comparative period, reflecting both the lower subscription term license level and the duplicative costs related to our public cloud transition. Shortly, I'll talk about normalized results that adjust for these two factors. Professional services gross margin was extremely strong, at 29% compared to 13% in Q4 of 2022 due to a favorable pricing environment and ongoing efficiencies in delivering projects. Adjusted EBITDA was $19.7 million for an 18% margin compared to 21% in the fourth quarter last year. Our profit in the quarter was $4 million or $0.14 per diluted share compared to $0.30 in Q4 last year. Again, these results were affected by the two factors I just mentioned. Cash flow from operating activities was $28 million compared to negative $2.3 million in Q4 of 2022. Cash equivalents and short-term investments grew to $293 million from $225.8 million at the end of 2022 and even up from $209 million last quarter, despite significant investments in a share buyback program, which I'll discuss momentarily. Our record free cash flow for the year was $77.1 million, up from $6.3 million in 2022 and more than 70% or $30 million higher than in any previous year. The free cash flow margin was just over 18% and slightly higher than our Adjusted EBITDA margin in 2023. Our goal is to deliver a trailing 12-month free cash flow margin that more closely mirrors our adjusted EBITDA margin, so we are pleased with this progress. We remain highly focused on being a strongly cash-generative business. On slide nine, our annual recurring revenue, or ARR, grew to $322 million, an increase of $18 million over Q3, which is over 60% higher than additions in any other quarter this year. Year-over-year, the ARR balance grew by 18%, which was less than its full potential given cautious spending in the uncertain macro environment throughout 2023, as we've discussed throughout the year. Significantly, roughly 60% of our annual growth in ARR came from new customers. Many software and supply chain peers rely much more on upsell activity for growth than we currently do, and that's a huge opportunity for us ahead. Moving to slide 10, at quarter-end, our total remaining performance obligations, or RPO, leapt 25% over the Q3 balance to a record $741 million and gained 24% from the year-ago period. Of the RPO in total, $701 million relates to SaaS business, up 28% sequentially and 27% year-over-year. The three-year CAGR, or total RPO, is 25% and 26% for our SaaS RPO. I encourage you to focus on these excellent longer-term results as quarterly results fluctuate significantly with normal renewal cycles. Our fourth quarter was characterized by both strong ARR additions as well as very strong renewals. Of the year-end SaaS RPO amount, $274 million converts to revenue in 2024, representing roughly 88% coverage of our full-year SaaS guidance at the midpoint. Further details on our RPO can be found in the revenue note to our financials. I will leave it to you to review our full-year 2023 results in greater detail, but let me just reiterate what John said about our very strong performance. Our SaaS growth of 24% is a standout result in an unusual year, and even after making important investments, we delivered an adjusted EBITDA margin of 18%, or 4 percentage points above the midpoint of our initial guidance for the year. We also achieved record free cash flow in the year, won a record number of new customers with a 60%+ win rate against key competitors, and maintained 95%-100% gross customer retention. I'd like to thank the whole Kinaxis team for such an exceptional result. As we move to slide 11, we are initiating our 2024 guidance. By far, the biggest determinant of annual SaaS growth is the ARR growth rate in terms of the year. As you know, we publish ARR precisely to give you a good leading indicator of our future SaaS growth trend. For example, we ended 2022 with 24% ARR growth and grew SaaS revenue 24% in 2023. Of course, the relationship is not always one-to-one like this, but ARR growth and its directional momentum is by far the most important factor. We expect that the connection between these two metrics will only become tighter as SaaS business is an ever-increasing portion of ARR. We exited 2023 with 18% ARR growth, and accordingly, expect SaaS revenue growth of 17%-19% in 2024. As John pointed out, we're seeing some encouraging green shoots of improvement in the environment, and this could start to benefit ARR growth in 2024. We expect total revenue of $483 million-$495 million, or 13%-16% growth. This reflects 2024 as the lowest part of our normal subscription term license revenue cycle, for which we expect 9 million- 11 million in the year. Roughly 60% of the amount is expected in Q1, 10% in Q2, and the remainder split relatively evenly over the back half of the year. Looking further ahead, subscription term licenses should roughly double from 2024 to 2025 and then increase approximately another third from there in 2026. We expect a gross margin of 60%-62% and an adjusted EBITDA margin of 16%-18%. Both margin results are affected by the normal low point of the cycle for subscription term license revenue, which carries near 100% margin, and the duplicative costs related to our public cloud transition. With respect to CapEx in 2024, we expect to invest approximately $10 million-$11 million, including approximately $8 million for our private hosting infrastructure. We would expect to invest significantly less in our data centers in 2025 as we continue to work towards a public cloud-first model. Moving to slide 12, as we discussed last call, we've been gaining operating leverage and intensifying our focus on profitability. As you can see, that trend continued throughout 2023. As operating expenses continue to decline as a percentage of normalized revenue, normalized revenue averages our Subscription Term License revenue over a rolling four-year period to approximate related contract terms. In 2024, we expect this trend to continue directionally. Our investment allocation will shift somewhat as we absorb previous investments in our sales force and focus new investment into exciting R&D initiatives, including AI. I'll now take a few minutes to walk through the impact on 2023 results and 2024 guidance of the normal Subscription Term License revenue cycle and our public cloud transition. Turning to slide 13, as you know, due to accounting rules, our reported subscription term license revenue is highly variable between periods despite a very stable underlying business. Averaging that revenue over a four year rolling time frame, as I described a moment ago, provides a better view of normalized software gross margin and Adjusted EBITDA margin. Our use of public cloud started modestly in 2022, accelerated in 2023, and will continue to expand rapidly throughout 2024 and 2025 to become our default hosting choice, with a small amount of private hosting remaining. In the meantime, we are incurring certain public cloud migration costs and significant duplicative costs of supporting two infrastructures, including public hosting fees that aren't added back to EBITDA through depreciation, as the servers in our private cloud are. The analysis on this slide estimates an apples-to-apples view that allows you to better compare our margin achievement with past performance. On this basis, for 2023, normalized Adjusted EBITDA was 21.5%, and you can see the separate term license and public cloud transition impacts. Our normalized software gross margin for 2023 was 77.8%. For 2024, we expect our normalized Adjusted EBITDA margin guidance would be 24%-26%, including a normalized software gross margin of 78%-80%. In short, both our software gross margin and Adjusted EBITDA are moving in the right direction on this apples-to-apples basis. We are confident that in the next one to three years under our public cloud-first model, we will achieve our midterm Adjusted EBITDA margin target of 25%+. This target is based on normalized revenue to remove the year-to-year volatility of subscription term licenses. On slide 14, since our Q3 results call, we have been very active on our normal course issuer bid, which allows us to purchase up to 5% of our stock or approximately 1.4 million shares. During the 3 months ended December 31st, 2023, we repurchased approximately 329,000 shares for a total investment of roughly $36.6 million. We are pleased with these investments. As I reflect on my four year anniversary at Kinaxis, I'm extremely proud to be able to say that our customer base, revenue, free cash flow, RPO, and pipeline have all more than doubled over that time, and it feels like we're only getting started. Our market is in early stages and in excellent shape. We have an excellent competitive win rate and elite customer retention rate. We are addressing companies of all sizes in more verticals than ever, with more products than ever to sell. These are the fuels of our long-term growth engine, and we are fully focused on reaccelerating growth as we move forward, even as we improve profitability. The last four years have been fun, but I can't wait to see what happens over the next four. I'm looking forward to kicking it off in 2024. With that, I'll turn the call back to John. Thank you, Blaine. Moving to Slide 15, as you'll remember, in 2023, Kinaxis was recognized by Gartner in the very top right corner of their Magic Quadrant, positioned furthest in completeness of vision and, perhaps even more importantly for our customers and prospects, highest in our ability to execute. We were the first and only vendor to ever achieve that distinction. It was the ninth consecutive time we were named a leader in the Magic Quadrant, and it goes a long way to explaining the strong win rates and retention rates I mentioned earlier. On slide 16, while we are clearly an established leader, it's also true that our opportunity is just beginning. We have more than doubled our customer base in just the past three years, with 2023 being the biggest contributor yet. Today, we serve companies that help keep more than 100 billion teeth clean each year, ensure more than 35 million pets are fed nutritious meals each year. We help caffeinate over 85% of Canadians through quick-serve coffee. We help supply 75% of all tofu products in the U.S. We help support historic human journeys into space and so much more. The market for supply chain management is in excellent shape, and I believe its renaissance will continue for many years to come. Efficient and resilient supply chains require concurrency as a foundation, and as reflected through our many new patents, our advancements in applying artificial intelligence, machine learning, and generative AI to that foundation is the path to what I believe will be the new gold standard. More importantly, this new gold standard will be accessible to all manufacturers, from small size to enterprise, and eventually for all market verticals. Our TAM is growing, and we are working hard to serve every last opportunity that presents itself. Thank you for your ongoing interest in Kinaxis. I'll turn the line over to the operator for Q&A. If you would like to ask a question, press star followed by the number one on your telephone keypad. If you would like to remove your question, press star one again. Your first question comes from the line of Daniel Chan with TD Cowen. Your line is open. Hi, good morning. Really good bookings this quarter, but as you highlighted in the prepared remarks, it also implies that the SaaS RPO is 88% of the 2024 SaaS guide. I guess that implies a lower proportion of deals are expected to close in 2024 than historically. I guess we would have expected more deals closing as the pipeline matures. You talked about the sales team moving up the learning curve this year, and I believe you revised your sales cycle to 12 months in the filings, down from 18 months. So how do we reconcile the implied lower deal closings when these dynamics would suggest otherwise? Yeah, thanks, Daniel. And good question. Obviously, you're referring to the fact that we have committed RPO for SaaS around 88% against what we're guided to right now. Past year was about 86%. And we obviously don't include the termination clauses, so any options there for termination clause or any renewals that are in that number that may come in as well. So we don't think that there should be a slowdown in 2024. We do think that they'll continue to accelerate. We see a lot of opportunities. Our pipeline, as we mentioned, is at an all-time high. So right now, it's just a matter of us executing the way that we know how to in 2024. Okay, thanks. Maybe some more details on the different geographies as well. If we look to APAC, revenue declined by 17% in Q4. I think it was also down 18% in Q3. U.S. growth seemed to slow to 6%. Are these due to one-time revenues in the comparable periods, or was there any change in customer churn? Any color would be appreciated. Thank you. Overall, I think every year we have different areas that grow faster and slower versus other areas. I think the main thing that we've seen is EMEA did extremely well in 2023. It was probably one of our strongest years that we've ever seen with EMEA. North America, I think, was a solid year. It's our largest region by far, and so we don't see as much variance from that area. And in APAC, we're continuing to grow our presence there. We have a new leader, which we are very excited about, some of the opportunities that we have in front of us right now. Thank you. Your next question comes from the line of Thanos Moschopoulos with BMO Capital Markets. Your line is open. Hi, good morning. Just given that mid-market has been ramping and the reseller channel has been ramping, I guess the implication is that enterprise growth has been subdued. So if you could expand on that, I guess some of it's macro and, as you're alluding to, maybe better environment. But I mean, are expansions from existing customers unfolding at the pace you would expect? In In terms of new initial wins, are sales cycles starting to look better, or are they getting worse? Just any color in the enterprise dynamic would be helpful. Thanks. Yeah, so in 2023, I'd say the enterprise customer wins were roughly identical, I'd say, to sort of small to medium size. So certainly, we saw an uptick in small to medium size as it relates to our work with VARs. The enterprise market is still a massive opportunity for us. We mentioned before ExxonMobil, HAVI, Volvo in the past. We had the biggest deal was an enterprise account expansion in Q4. That was the biggest that we had for the year. So it's still extremely healthy. On the energy sector, we've talked about ExxonMobil. I want to say we have three, maybe four of the top five in the world. So we're just getting started there. And these are companies that turn over roughly $400 billion in revenue. So they've got quite complex supply chains. We're not slowing down there by any stretch. To answer your question, Thanos, I wouldn't say there's anything peculiar about enterprise in the market today. Maybe I'll add into this because we have obviously two segments that we look at: enterprise, there's enterprise, and there's what we consider large enterprise. Year-over-year, we have seen the large enterprise slow down compared to what we saw in 2022. And that was particularly because of the sales cycle we have attached to those particular size of companies. As you mentioned really well, the mid-market is on fire right now, and it grew extremely well year-over-year. Enterprise grew year-over-year. But large enterprise, those really, really big guys, it's taking a lot longer getting them over the line on some of the deals. Just to clarify, if we look at maybe the discrepancy between the growth you're guiding for SaaS revenue this year versus what you've done historically and versus your 30% long-term aspiration, would it be primarily that very large enterprise that would be the main factor? Then just directionally, has that gotten any better or worse in recent weeks? Yeah, so overall, we were going to have a different mix than we anticipated to get toward our we need our mid-market. We need our SMB to grow faster than enterprise and large enterprise just because of the nature of how many customers we have or the customer profiles we have right now for those size of customers. But large enterprise, we expect it to keep coming. They're still in our pipeline. It's just a matter of they've been sitting in our pipeline longer than we had seen in 2022. All right. I'll pass the line. Thanks. Your next question comes from the line of Doug Taylor with Canaccord Genuity. Your line is open. Yeah, thank you. Good morning. I appreciate the detail you provided on slide 13 with respect to the normalization of your costs. Blaine, a couple of questions here on the public cloud transition. I believe last time you'd said you were ahead of schedule. Can you update us on the status of the migration and perhaps speak to when, if at all, over the course of this year, we're going to see the pressure from those duplicate costs start abating, if at all? Yeah, good question. So overall, I think we're on track. And you're right. I would say in Q2, we got a little bit ahead of our skis, and we're migrating faster than even what we would plan and what we wanted. Obviously, there's an optimal time to do the transition and to do the migration so that we can offload some of our costs at the right time that come from the private cloud and then obviously turn it up on the public cloud side. But there's also the optimization that you have from the cost that you have with either GCP or Azure that we are going through, obviously, a process of decreasing that unit cost and the unit economics over time. What we've done is we've obviously looked at it region by region, and we have the first region that should be 100% migrated over will happen in 2024, and that will be probably the APAC region. From there, we're obviously looking at EMEA and North America to come online as well. But what we're trying to do, as much as possible, is make sure the economics make sense for this migration so that we can obviously reduce the duplicative costs but also make sure that we do that in an optimized fashion. Okay, so in that, are you saying then that even with the 6% public cloud normalization that we see here for fiscal 2024, that is inclusive of some relief to some degree by the end of the year? Yeah, there should be some relief. Some of the one-time migration costs that we're seeing right now will be alleviated, I think, by the end of this year. There will be all the APAC duplicative costs that will be removed. It doesn't mean that we're not still migrating North America and EMEA. We're just not doing 100% of it at this stage. Part of the reason we're doing that is because of technical capabilities, and part of the reason is because of cost-effectiveness. But by the end of this year, we should see some reduction in that duplicative cost segment. Okay, and let me just ask a question on the professional services organization. Two parts. One, you once again had a pretty impressive margin result there, almost 30%. I think you referred to it as extremely strong. So I'll reiterate, the question is to the sustainability of those kinds of levels in the near and medium term. And then the second part, I think from your guidance here, would suggest ongoing growth of your professional services kind of in line with the SaaS revenue growth for this year. I just want to gauge your ability and willingness to continue to expand at that same pace here in the coming years. Yeah, again, a good point. We are trying to move more and more towards partner-first. I think we've been saying it for the last number of years. We're trying to. I would say that we've got some exciting developments on some of the partner side that I think will help accelerate this over the next year, things that we can't talk about at this stage. But we do believe that there is a path forward to start to reduce the amount of professional services that we're taking on and to, again, put that in the hands of our partners before ourselves as we move forward. Just to double back on the margin question for professional services, and then I'll pass the line. Sure. Yeah, on margins, yeah, we're extremely happy coming close to 30% or hitting, I guess, 29% for our quarter growth. It's opening our eyes to, again, the pricing strength that we have in place as well as the utilization of our team to make sure that we're getting the most out of them as possible. I'd always said that I think the ultimate place for us to land is around an 80/20 where we have 80% margins on the subscription side and 20% on the PS side. But at the same time, we're starting to open our eyes to thinking that there might be more margin available on the professional services. So we do think that there's still some expansion. The full year is around 22%, and I think there's some expansion on top of that. We are planning right now for a little bit higher margins on that front going forward. Thank you. Your next question comes from the line of Paul Treiber with RBC Capital Markets. Your line is open. Thanks very much. Good morning. Just wanted to hone in on renewals. You commented in the prepared remarks that renewals are really strong. We saw it in RPO. What trends are you seeing across the board in terms of renewals? Is expansion typically included in it? Any change in duration? And then are you benefiting also from any pricing changes? Yeah, so on the renewal front, a couple of considerations. One, it is not uncommon to hit a renewal period that has an expansion component to it. We certainly track that. And then in the fourth quarter, we had a rather large seven year renewal with big expansion, which is really a testament of a company who absolutely is doubling down on our approach and basically baking in their next seven years with us. So we are seeing those types of negotiations. As I mentioned earlier as well, our churn is very low. Our renewals is north of 95%, 95%-100%, what we target. And I consider that to be, if not best in class, near best in class, an elite performance. Now, the fourth quarter, in terms of that particular renewal, we saw it coming. We didn't necessarily see the, I'd say, the magnitude of the expansion and the number of years is not common. To go for seven years is not common, and it's more common to see three to five. Your next question comes from the line of Stephanie Price with CIBC. Your line is open. Hi, good morning. You mentioned in your prepared remarks that the pipeline exited Q4 at an all-time high with growth reaccelerating. Just hoping you can dig into that statement a little bit. When you think about the ARR growth in the quarter, which was kind of flat sequentially in what's typically a seasonally strong quarter, how do you think about that pipeline converting into ARR growth and ARR growth accelerating from here? Well, we're certainly feeling pretty good about our win rates against our top three competitors. We've been tracking that. We have what I might call repaired a few failed deployments in the process and taken some business back from those competitors. And so that, I think, is boding well for the pipeline as we move forward. We're also tracking very strong sales experience as we enter 2024 as well. And based on what we see and, of course, we're listening to other vendors and what they're saying about macroeconomics and the condition out there, certainly, it's not what I would call predictable. But the facts that we're looking at is that we have doubled the number of our accounts in three years. We've just had two years in a row with record-breaking net new wins. 2022 is a record-breaker in net new adds, and 2023 beat that number. And so we're feeling pretty good about the health of the pipeline. We're feeling good about not seeing any, what I'd say, concentration problems in the pipeline. It's healthy in all geographies and all variables. Thanks for the color. Then, Blaine, maybe one for you just on a little bit more details around that cloud normalization. And thanks for the color in the slide there. Just want to dig into it a little bit more. So if you think about fiscal 2025, should we expect the overall public cloud cost to come down or other costs related to the North America and EMEA transition that could offset the end of the APAC transition? And maybe related, can you just touch on that private cloud CapEx you mentioned in fiscal 2024? Sure. So public cloud costs across the board is going to go up. I think that's a definite that's going to happen. In North America, APAC and EMEA, we still have a growing footprint in EMEA and APAC. If we haven't gotten 100%, we still have a significant percentage that has moved over. So we should see that go up. But I think what you might be asking for, you're looking at, is the duplicative cost. Is that percentage going to be as big as it was in 2025? And the answer is no. That should shrink specifically because of APAC, but also because of some of the optimization things that we're doing with the, I guess, across the globe with public cloud on the unit economics, which we expect to decrease significantly over the next year. In terms of CapEx, so we mentioned that we're investing or we should be putting around $8 million of CapEx that are related to private cloud in 2024. One of the reasons is that we've always had this belief that we want to have a hybrid environment. We have, obviously, the environment with GCP. We have the environment with Microsoft Azure. But we will also have that private hosting element as well because there are going to be some situations, particularly because of essentially security and some of our aerospace and defense that don't want to be on a public cloud environment where we're going to have to keep it on our own private cloud. And so we do have some investments that we have to maintain over time. It just so happens that it's coming due in 2024. I expect there will probably be a smaller portion in 2025, but it'll be something that we'll have to maintain going forward. But as a percentage of our total revenue, it'll be a smaller portion as we grow. Okay, thanks for the color. Your next question comes from the line of Kevin Krishnaratne with Scotiabank. Your line is open. Hey there. Good morning. Again, on the ARR, if I actually look at it on an ex-FX basis, it looks like it ticked up slightly from 17%- 18%. It's sort of what drove that. And then more bigger picture question, actually. I know that that ARR growth does sort of blend in the term and the SaaS. So if you did 18% at the end of the year on ARR, can you give us a sense of what the SaaS ARR growth would have been? Yeah, you're right. It has picked up a little bit, in fact. If you look closely, it is a slight record in our net ARR that you would see in terms of what we had in Q4. It almost looks like it's the same as what we had in Q3 of 2022, but technically, we're slightly ahead. But we don't break out the SaaS portion versus the term license portion of ARR. But I can tell you that the term license is a much smaller piece of that total amount, less than 10%. Sorry, it's less than 10% of your ARR? Yeah. Yeah. Got it. So it's probably pacing a bit higher. I'm just trying to think about how do we think about sort of the SaaS revenue setpoint sort of as we head into Q1? I know you've given us the guide for 17- 19 for the year, but just thoughts on the starting point for us Q1? We don't give guidance for the quarter. Yeah, we don't provide guidance for Q1. We're feeling confident in the full year and that we should be able to achieve our guidance. Okay, got it. No, fair enough. Just another one for me, just on the competitive win rates, you mentioned 60%. Has that gotten better? How's that trending? And if you are losing against those three, what are sort of some of the key reasons for why that may be the case? Yeah, it is getting better, I think. As I just recently mentioned, in fact, we've been engaged in repairing some challenges with our competitors and coming in to repair those deployments. We've been doing quite well in the win rate as well. In some cases, we are in a situation where we might be in a vertical that Blue Yonder has a stronger presence in. We're not all equally strong in every market vertical. We're not equally strong with every use case. So I'd say if there is any challenge and again, our win rates have been north of 60%. If there isn't a challenge, we might see it in a market segment where it's a little more nascent for us, and it's a little more mature for them. The same could be true in situations where use cases are a little more nascent for us and very mature for a particular competitor. As it relates to SAP, they've been omnipresent for as long as I've been here, and it's been decades. They're the incumbent. And so the other side of the equation that we will see is losing to do nothing where somebody says, "I'm just going to stay the course with what I own and not make any further investments this year." Interestingly, though, even in the current pipeline, we're seeing a very similar situation where somebody made that choice in the life sciences space three years ago and are now coming back to us. And much of that is, I think, the reflection that continuing to leverage legacy approaches. While one might say that's economically sound, it's certainly a challenge as it relates to building, I'd say, a sustainable and efficient and resilient supply chain. But that's how I would provide color on that question. In some cases, competitors that are stronger in a particular vertical. In some cases, more so SAP where we'll see an account do nothing. Got it. No, thanks for that. I just want to slip one last one in. I didn't see it in the deck, but are you guys still committed to the 30% SaaS growth outlook longer term and 35% EBITDA margin? Thanks. Yeah, so, let's go back to. I think you said longer term. We gave midterm outlook for SaaS growth of 30% last year, and we also gave the 25% EBITDA margin. So let's talk about the 30% first. At this stage, I will say that the math has changed because of 2023 and that we don't see it in our next two years. But as you rightly point out, is that still a target for us? Absolutely. We think that we can get there. For all the reasons that we talked about on the call, that great retention rate, the fact that we have these loyal customers that are driving a committed RPO that's the highest it's ever been, we think that we are in a position that with our new modules, with the new verticals we're going into, that it is something that we have to have as a target out there because we know it's capable. But I will say in the next two years, I don't have a sight to 30% at this stage. And the 25% adjusted EBITDA, absolutely, we think that we're on that path. We think we're going to do it in the next one to three years and that it'll be sustainable over a long term. After that, I think, as you mentioned, do we think we can get up to 30% and 35%? We do think that's a long-term target similar to where we're putting that SaaS revenue growth number at 30% as well. Okay, thanks. Appreciate the color. Your next question comes from the line of Richard Tse with National Bank Financial. Your line is open. Yes, thanks. I was just wondering if you guys could elaborate a bit more in terms of what's holding back these large enterprise deals. Is it just macro, or is there some other reason? Mainly because I think you talked about sort of, it's the last question, sort of seeing a course towards sort of accelerating growth. And now that seems to be the culprit in terms of the moderating growth. So just really trying to understand what's happening on that large enterprise side. Yeah, so Richard, I'd say a couple of things. One, I'm going to reiterate what I've said in past calls, and we continue to see this. One of the larger deals in the fourth quarter, which felt quite assured, was delayed as a result of CEO and board-level signatures that were required. Those types of delays, it appears that large enterprise, that is more common. We're seeing that more common for the larger and extremely large enterprises. I can maybe surmise that's cash preservation reaction, let's just say, by those accounts. Certainly, there's competition for dollars in large enterprise. So that's one of the challenges we're seeing. The other is less so a situation where we're not getting those deals across the line, but they're getting smaller. People are taking bite-sized chunks and paying for their journey as they go. That's another trend that we've seen even in what I'd say the ultra-high enterprise. Now, interestingly, and this has happened multiple times, it happened in Q4 where following very successful deployments with extremely large enterprise, the expansion comes in at the size that we would have expected in whole in the past. So in some cases, we're seeing a delay in the expansion. People are starting their projects in a much smaller footprint, proving it out. And if we get to that proof point, the expansions bring those enterprises back to their, what I'll call, full potential. Okay. When it comes to the pipeline, can you maybe comment about the mix between large and then mid-market versus small? It hasn't really changed that much as it relates to our win rates. Approximately 50% of our wins were large enterprise and 50% were small and medium. Our VAR program now has 30, I believe, 30 partners. Don't quote me on precisely that number, but it's close enough. Approximately 30, and we're adding more. These are third-party resellers in geographies that we're not in, serving a TAM that we're not going after directly. So I think we'll see, as a mix of net new wins, we'll be grabbing land. We'll be grabbing land through those mechanisms. But we still have a very healthy pipeline of enterprise deals that you'll hear about throughout the year. Okay. Just one last one for me. You've made a lot of organizational changes, I think, over the past, call it 12 months, especially on the sales side. When it comes collectively to those changes, where do you think you are in terms of your peak productivity or in terms of where you want that group to be? Are you three-quarters of the way there, 90% there? Just trying to understand what point of scale you're at there? Well, like any business, I'm always looking for operational efficiency. In some cases, we have individuals that have planned retirements and things of that nature. So that's not uncommon. And certainly, we look at organizational structure. For me anyway, I think about the next three to five years and make adjustments based on that thesis. So I don't think there's anything really to call out other than normal course business operations. Okay. Richard, maybe a little bit of extra color on that. I think one of the other things you were asking about is so we had around 29% year-over-year growth from sales and marketing. A large reason for that was because we increased our headcount on the sales team at the back half of 2022 and the first half of 2023. What we're seeing, obviously, is getting to that 18-month range, which is where our account execs get extremely productive. They're 3.5x more productive than someone who's less than 12 months, as an example. We've gone through a process of maturing and getting that tenured AE in place over the past year. We're expecting to see higher productivity from that team as we go into 2024, as more and more of them reach that 18-month range. Okay, got it. Thank you. Your next question comes from the line of Christian Sgro with Eight Capital. Your line is open. Hi, good morning. Could you comment on the typical expansion motion with a newer customer? Sometimes they sign on maybe for less than they would have in the past to get going. So are you upselling capabilities, new sites or geographies over time? How does that expansion effort look on average? Yeah, the most typical is geographies. Especially for large enterprises, it's not uncommon for them to tackle a use case, focus on a geography, excuse me, build a blueprint and then rinse and repeat. And so for us, that geographic expansion leads to both two dimensions' worth of growth, let's just say, but certainly on user counts and things of that nature. And so I would say that's the most typical that we would see. It is also for companies that are more mature geographically, where they have a foundation across their entire enterprise, then they'll look to expand different use cases. They may start with sales and operations planning, for example, and start moving into inventory optimization or other components of the business after the fact. So it's a bit of a mixed bag there with the one caveat that most of it is geographic. Okay, that's helpful. And then plenty of cash on the balance sheet, buybacks or use capital this year. But what are your thoughts on M&A, your appetite for M&A as you look at your outlook for 2024? Yeah, under the right circumstances, M&A is open. We have a new head of corporate development who's been here with us for about a year now. Obviously, we have a healthy pipeline of opportunities that we've been looking for. But hopefully, as any good and thoughtful company, we're very picky about what we want. It needs to meet the needs of our product, and we don't want to have something that we're requiring technical debt, obviously. We're also a company that is trying to grow our profitability. So I don't want to have anything that's going to stand in the way of us getting to that 25% Adjusted EBITDA midterm target. We know we can achieve it in the next one to three years. So if there's going to be something that's going to disrupt that, it's something that we're not going to be looking at. But to put it directly, that cash will be used for now one of two ways. We're going to continue to look for M&A opportunities that make sense for us. But also, we have a normal course issuer bid that we are going to continue to buy stock when it makes sense. And we think we have a lot of room to do that. And the nice thing about that, I think, for all the investors listening on is that 2023, we actually covered all of our stock-based compensation we had with our employees based on that buyback that we had in place. We're going to continue to do that, and we think we're healthily using our capital in place the best we can. That's all helpful color. Thank you for taking my questions. Due to time constraints, we will need to limit the questions to one each. Your next question comes from the line of Suthan Sukumar with Stifel. Your line is open. Good morning, and thanks for taking my question. I just wanted to touch on expansions. Just given the record number of customer wins to date, how much of the expansion opportunity you see ahead in the near term, is contractual versus not? And how do you see the bookings mix of expansions versus net new evolving in the coming quarters? Just curious if it's going to get to a 50/50 ratio or may skew to expansions over time. Yeah, yeah. So obviously, we're at a 60/40 ratio right now, which I would love to stay at that 60/40 ratio as long as we can, as long as the total number keeps on growing. I think it will start trending towards a 50/50, as you mentioned, over the next year or so. Obviously, a lot of opportunities we see that come in from expansion deals have a much shorter sales cycle, and they flow through a lot quicker, obviously, because we're not generally going through a situation where we're against a competitor. But when we look at our peers that we go against, a lot of them have 2/3 of their new deals are coming through expansion. I kind of look at them almost enviously because I know how the impact is on our bottom line, and I know that's something that's in our future. We are trying to be as patient as possible by making sure that we get as much land as we can. That doesn't stop us from saying we need to start that role of getting as many of our install-based customers expanding and upselling and cross-selling in any fashion we can to get them in the door and to help them out, really, and to drive the value they need within their own supply chains. Your next question comes from the line of Mark Schappel with Loop Capital Markets. Your line is open. Hi, thank you for taking my question. John, just building on an earlier question, about 18-24 months ago, the company expanded on or expanded sales capacity pretty meaningfully to drive further growth. Given the moderating ARR growth and SaaS revenue growth, I was wondering if you could just kind of comment on what your plans are with respect to sales capacity in the coming year or so. Yeah. Two things I would say. When I think about expansion, I think about it two ways. Obviously, fantastic if you can get both. There's certainly the SaaS revenue growth that we're looking for, but there's also net new accounts to make sure that we're building a strong base to expand in. As I said in the script, 2023 was about winning customers, eliminating all friction. The way I describe it to sales is you have to make it irresponsible for someone to choose anyone but us and create the conditions where that can be true. Knowing in advance what happens when you win a logo, great things. As Blaine said, you have an account that you can upsell into much simpler than landing it for the first time. And so part of our investment in sales and the training and everything that we've done over the last couple of years, well, they've yielded exactly what I might have hoped. Sure, more SaaS revenue would have been phenomenal. But we've more than doubled the number of counts. We've had two record-breaking years in a row of net new names that we can now farm into. One of the investments we made in sales was to build out a team and an executive that is solely responsible for serving the base. So I'm feeling pretty good about the decisions that we made in the past about sales. As Blaine just said, I think when we do our work here in the next couple of years, you'll see a move to perhaps more of a 50/50 split between net new and what is being farmed from the net new accounts that we're winning every year. Your next question comes from the line of Martin Toner with ATB Capital Markets. Your line is open. Thanks so much. Good morning, gentlemen. Quick question on 2025 and the STL cycle. You're pointing out in slide 13 that EBITDA margins are being impacted by public cloud normalization. Can we expect a normal cadence for STL in 2025, which would and will that create a shot in the arm for margins? Yeah, 2025, as I talked about in the script, we're expecting it to double. So STL should go from, we obviously mentioned, 9-11. We expect it to double in 2025 and then increase approximately another third in 2026. And so that should put us closer to the normalized total revenue that we would expect. And we'll obviously see if we had that same slide that I had in the presentation that shows the normalized EBITDA, you should expect the STL line to be closer to zero. There are no further questions at this time. I will now turn the call back over to Rick Wadsworth for closing remarks. Great. Thank you, operator. Thank you, 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 first quarter results. Bye for now. This concludes today's call. You may now disconnect.