Good day, and thank you for standing by. Welcome to the Quorum Information Technologies Inc. third quarter 2021 results conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to turn the conference over to your speaker today, Maury Marks, President and CEO. Please go ahead. Thank you, Jerome. Good morning, and thank you for attending Quorum Information Technologies' Q3 2021 results conference call and concurrent webcast. Joining me on the call today is our Chief Financial Officer, Marilyn Bown. Quorum is a SaaS software and services company that provides essential software to vehicle dealerships of all types and OEMs throughout North America. Our clients rely on our software for their operations from sales through to service. Our software is deployed to 1,032 dealerships across the continent, which is one of our KPIs. We refer to an individual dealership as a rooftop. This quarter, we have attained 1,032 rooftops, an increase of 2% over the total rooftops deployed in the third quarter last year. As of this quarter, approximately 97% of our total revenue is recurring revenue. This is up from 96% of total revenue last year. Another primary KPI is monthly recurring revenue per rooftop, or MRR PU. This quarter, our SaaS MRR PU was CAD 2,116, an increase of 9% from CAD 1,950 reported last year. This implies that our current annual SaaS recurring revenue per rooftop is approximately CAD 25,400. For Quorum, recurring revenue comes from both software and services. Approximately 71% of recurring revenue is SaaS, while 26% of our revenue comes from services. The recurring services revenue is from our BDC, a centralized call center that our clients rely on to primarily generate and manage service appointments. The gross margin for our SaaS recurring revenue is approximately 65%, while the gross margin for BDC is around 13%. BDC is an important service because it acts as a lead generator for our software. Every dollar of BDC revenue generates an additional CAD 0.40 of software revenue. We are pleased that organic growth in our SaaS software business has remained strong year to date. In a few moments, when Marilyn reviews our quarter in detail, this trend will become clear in our gross margin percentages and gross margin totals. After our prepared remarks, we will open the floor to your questions. Marilyn, please go ahead. Thank you, Maury, and good day, everybody. Thank you for being here with us today. I would like to remind everyone that certain statements in this presentation and on our call are forward-looking in nature. These include statements involving known and unknown risks, such as the continued risks related to COVID-19, uncertainties and other factors outside of management's control that could cause actual results to differ materially from those expressed in the forward-looking statements. Quorum does not assume any responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligations to publicly revise these forward-looking statements to reflect subsequent events or circumstances. For additional information on possible risks, including risks related to COVID-19, please refer to our annual MD&A dated December 31st, 2020 on the SEDAR website. We are happy to report that our revenue figures were again the highest in Quorum's history. Total revenue for Q3 2021 was CAD 9.2 million, a 14% increase compared to CAD 8.1 million in Q3 2020. Our SaaS revenues were also a record, reflecting continued high organic growth rate in that segment. SaaS revenue totaled CAD 6.6 million, an increase of 11% from CAD 5.9 million in Q3 2020. Total recurring services revenue, which is our BDC segment, was CAD 2.4 million, an increase of 30% from CAD 1.9 million in Q3 2020. Together, our SaaS and BDC recurring revenue streams made up 97% of our Q3 revenue, with SaaS representing 71% and BDC 26% of total revenue. Our gross margin percentage increased to 47%, up from 45% reported in Q3 2020. Gross margin totals of CAD 4.3 million in Q3 2021 increased by 16% compared to CAD 3.7 million in Q3 2020. The increase in gross margin percentage and total gross margin was due to scaling the business and also due to the high organic growth rate in the SaaS software segment compared to services, which resulted in more favorable product mix towards SaaS revenue in the quarter. SaaS gross margin was 65%, coming in at CAD 4.3 million in Q3 2021, compared to 62% and CAD 3.7 million in Q3 2020. BDC gross margin decreased to 13% or CAD 321,000 in Q3 2021, compared to 14% or CAD 262,000 in Q3 2020. Additional Q3 2021 highlights include the following. Adjusted EBITDA was CAD 1.5 million, consistent with CAD 1.5 million in Q3 2020. We want to note that adjusted EBITDA in Q3 2020 was positively impacted by temporary pandemic-related government assistance benefits of half a million CAD. Adjusted cash income was CAD 0.73 million, a decrease of 24% as compared to CAD 0.96 million in Q3 2020. At September 30, 2021, Quorum had a cash balance of CAD 7.5 million, net working capital of CAD 7.6 million, and a current ratio of 2.7. Total debt was CAD 8.9 million, which included the CAD 7.4 million secured portion drawn on our CAD 15 million BDC Capital debt financing facility and the CAD 1.4 million unsecured with the Atlantic Canada Opportunities Agency. With that, I'd like to pass it back to Maury. Thank you, Marilyn. As I mentioned in my earlier remarks, we are pleased with the progress that we are making in organic SaaS revenue growth. It is a balance between adding new rooftops and increasing monthly recurring revenue from the clients that we already have. Our ongoing focus on growth has four pillars. One, increasing rooftops. As mentioned, over the past year, we have increased our rooftop coverage to 1,032. With the pandemic receding, dealerships are now facing complex market conditions that makes our product suite appealing for dealers attempting to protect their competitive position and to maximize profits. We have 28% market penetration in Canada and 1% penetration in the U.S. We continue to allocate sales resources, expanding our reach in both the Canadian market, where we have strong brand recognition, and in the U.S. market, where the TAM is large. Two, we have been gaining some momentum cross-selling our product suite to our existing customer base. The cross-selling opportunity that we have is CAD 5,000 MARPU, which is 2.4x our existing MARPU of CAD 2,116. Three, from a product development perspective, we are introducing more capabilities to allow our clients to compete for customers in new digital channels. Our consumer direct digital products, including both MyDeal and PowerLane, are gaining interest among our client base. Number four, in partnership with AutoCanada, Quorum has entered the collision center market with our BDC services solution. We continue to look for new ways to leverage our BDC services to improve dealership lead generation and also help Quorum sell more SaaS solutions. Current market conditions are compelling dealers everywhere to modernize and streamline their operations to better compete in a dynamic marketplace. Quorum Software and Services has breadth and flexibility that allows our clients to thrive in these conditions. The four pillars of activity I just outlined, combined with current market conditions, should help to propel growth in the up and coming quarters. The company has worked hard to provide a product and services strategy that would resonate with dealer groups across North America. We would not have been able to achieve this without our amazing employees that are the driving force behind our strong results and their continued innovation, which ensures Quorum has a product suite and services offering prepared for the future of automotive. We are looking forward to continued strong growth in both SaaS and BDC revenue through 2021 as auto dealerships continue to modernize their operations. Operator, I'd now like to open the conference to any questions from our audience. Thank you. Ladies and gentlemen, at this time, I would like to remind everyone in order to ask a question, please press star one on your telephone keypad, and to withdraw your question, press the pound key. Your first question comes from Gavin Fairweather with Cormark. Your line's open. Oh, hey, Maury. Good morning. Gavin, good morning. Good afternoon, I guess for you. For us, yeah. Hey, I thought I'd start out on kind of the sales environment that you saw in the summer there. Obviously, we saw the SaaS ARR organic growth accelerated to the double digits, you know, this year on a year-over-year basis. I guess sequentially, maybe it was a little bit of a slower sales quarter versus Q2. Do you tend to see some seasonality in that sales environment there? Was this year any different from maybe normal? Yeah. We do see some seasonality. It's just a little harder in Q3 to get to be able to install products with vacations, and we tend to work around them. As I think everybody realizes, there was a lot of pent-up vacation demand out there across almost every company. It was, you know, maybe it was a little more challenging than we've seen in the past. Yeah, there's a bit of seasonality to it. Gotcha. Obviously, you'll be in the busier kind of sales quarter now. You're seeing that activity coming back and things moving nicely through kind of pipeline into contracting here in Q4? Yeah. We are seeing sales activity quite brisk. Do recognize that one of the headwinds that we're up against still in this market is just the lack of inventory for dealerships. Where we see a lot of the sales demand for our products is more in the service and parts side of the business as opposed to the sales side. Now, after having said that, I mean, dealerships still realize that they have to modernize, they have to go to a digital retailing as well. There's that element on the sales side that's weighing on them and we're trying to, of course, make sure that our products are front and center. Right. When you think about, I mean, when I think about the two kind of big organic growth products, that you have in the market right now, I mean, one of them will be MyDeal, and one of them will be, you know, PowerLane. Maybe, you know, PowerLane is a little bit of an easier sell right now, but maybe you can give us a bit of an update on both. Yeah. Well, and that, and that's correct. PowerLane, our DealerMine CRM service CRM products, our online scheduling, our product suite that you know really focused on the service and parts operations are all an easier sell at this moment. Our MyDeal, which is a digital retailing solution that lets you buy a car online, you know, our desking, menuing products, our sales CRM products on the sales side of the business are just a bit tougher of a sell right now. But after having said that, right, digital retailing and MyDeal are where dealerships need to move to, and they know that. You know, despite the fact that they might be challenged in terms of having vehicle inventory, they still realize they need to make investments in the sales side. Maybe just shifting gears to XSellerator. Obviously, you piloted on Azure. I guess a few questions on how that changes the unit economics. Can you speak to if there's any notable difference in the cost to implement and whether you know that becomes a little bit easier in a pure SaaS world? Maybe just touch on the gross margin impact as well. Yeah. It does make things easier for us from an implementations perspective. It allows us to sort of reduce implementation cycles in terms of time duration to implement. It takes, you know, a fairly significant lift out of the equation in terms of getting infrastructure, network infrastructure in place within the dealership. It's helpful from that perspective. In addition to that, what we're also doing is we've just started going to our existing customers who might be on servers that are end of life and talking to them about the move to Azure as well. As we convert more of them longer term, that will help us with cost of goods sold because it'll just be a much lower support requirement for the organization. Right. I mean, I know historically your strategy has been to not make money on implementation services so that you can get the recurring revenue. Do you see that changing at all? Like maybe you'll be able to kind of break even on it going forward? Like, how should we think about the gross margin going forward? Yeah. I would think we may be able to move the gross margin a little bit, but I don't think we'll get to a breakeven point. What we're just finding in the marketplace as a whole is that you know, upfront and training for us is. It's an opportunity for us to negotiate on those and really try to accelerate our SaaS and BDC sales from doing that. Yeah, will we see a few points difference from you know, services and one-time revenue in terms of a little bit less loss? We anticipate over time we will, but yeah, I don't believe we'll get to breakeven. Okay. Maybe just lastly from me, I know you've been you know putting a lot of effort into BDC and installed some new leadership there. Can you just maybe provide us with a bit of an update on that business and how things are tracking and how we should think about maybe the timeline toward you know the gross margin to move back toward 20% where they were historically? That's it for me. Thank you. You bet. In the BDC, last time we talked, I did talk about new leadership and how we were focused on expanding our gross margins on the BDC business. Since that call, we've the leader that we put in place has left us, moved on to a different opportunity. We now have a new leader in place. We still have, we've gone through a change there, which has delayed our gross margin expansion work that we were doing, but we're still very focused on that and still want to continue to track to improve gross margins on the BDC and have a good plan for doing that. The change in leadership caused us a little bit of a delay. Okay. Understood. Thank you. You bet. Once again, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from Gabriel Leung with Beacon Securities. Your line's open. Hi, sir. Thanks for taking my questions, and congrats on all the progress. Thank you. Maury, you're welcome. I just want to follow up on the BDC question. You've obviously made a lot of investments in that area. I'm just curious, you know, where does that division stand now in terms of utilization rate? I'm just curious how much more revenues you think you can garner out of the existing infrastructure. I would say our latest utilization rates were probably in the 70%-80% range. I don't know 100% the exact number right off the top of my head. We're in that particular range. We believe there's still opportunities to improve upon that. We've actually got a few opportunities, Gabe. That's one. I mean, we talked about in previous calls, workforce management and doing a better job of utilizing our team, and improving their utilization. That's one aspect for us. There's all sorts of other smaller opportunities, and then there's one more big one. One of the big ones has to do with customers that were some of our first BDC customers, and really going back and negotiating a new deal with them. We have that as an opportunity for us as well. It's sort of the combination of those things that you know we believe will help propel our BDC gross margins up. It sounds like it's really just trying to get more out of the existing crew versus not necessarily just signing more business to drive that gross margin higher, I guess. Well, as new business comes in, that's gonna help us with gross margins. I mean, it's like any business, right? When you start, and you do a bunch of deals with your first customers out there's all kinds of different deals struck. Over time, you get smarter and smarter about how you should structure deals and how you should negotiate them. We've done the same thing with the BDC. The deals that we would write today, I'm not suggesting the deals we write today were significantly higher gross margin deals. They're just structured better and structured smarter so that we don't have extra incurred costs that would eat into our gross margins that would be a surprise to us. We've just gotten smarter over time on how we structure deals, just to ensure that we get, you know, a better, a reasonable gross margin out of those deals. Gotcha. Sorry, I might have missed if this question was already asked, but just in terms of some of the overall inflation we're seeing, you know, obviously it's on the pre-owned side, you know, we're seeing some, you know, extraordinary prices on the pre-owned market for vehicles. I'm curious if you've seen any sort of inflation in terms of your own operating expense base and whether or not you expect some of that might price increases with your customers over the next 12-24 months. Yeah. We have. I did talk about this a little bit last time on the call. I mean, obviously with and especially in the North American market being, there just being a lot more opportunities with people working from home or working a hybrid model, there's opportunities for, as we know, there's lots of transition that's going on out there. Different roles within Quorum, we've had to make some adjustments to those. From our perspective, to your point, we, you know, what can we do from a price increase perspective in terms of passing price increases through to our customer base? I think I've talked in the past about how we've done a reasonable job of that on the Autovance side, and an okay job on the DealerMine side, and we haven't done much on the Automate side, so we're looking at a much more comprehensive sort of price increase policy going across the company, and we plan to execute on that in 2022. Gotcha. One last question, just, you know, following on sort of investments in the company. You know, obviously there's been a lot of R&D initiatives conducted over the last little while. It's resulted in a number of new products for you. I'm curious, looking over the next 12, 24 months, you know, where are the priorities from an R&D perspective? Is it maybe enhancing the existing platform? Is it maybe trying to get some more OEM integration in place? Most of the investments are gonna be made on our existing platform. We would have a significant number of those investments, especially on our digital side of our platform. The MyDeal, the PowerLane and any other elements where we can help dealerships compete in that digital world. That'd be a significant piece of our investment. To your other point, that investment as opposed to bringing new products into the product suite. We will have some smaller new products that we'll add to the product suite, from an innovation perspective, but there'll be a little less emphasis on that in 2022. Of course, the other emphasis that you mentioned on is just continued OEM integration. Not only OEM integration from the perspective of DMS integration, but the other one that has become quite significant for us is making sure that we're certifying products like MyDeal and PowerLane and our service CRM and our online scheduling and different tools like that, making sure they're certified with the OEMs as well. Gotcha. Okay, that's great. Thanks for the feedback and congrats on all the progress. Right on. Thanks, Gabe. Once again, if you would like to ask a question, please press star one on your telephone keypad. All right. We don't have any further questions in queue. I'll hand the call back to Maury Marks. Well, thank you. Thank you, everyone, on the call today. We look forward to providing you with our next update, which will be our annual and Q4 2020 results that we'll release in April. Thanks once again for joining us today. Thank you. That concludes Quorum Information Technologies Inc. third quarter 2021 results conference call. You may now disconnect.