Good afternoon, and Welcome to Quisitive's Q2 2022 Earnings Conference Call. Joining us for today's call are Quisitive Chief Executive Officer Mike Reinhart and Chief Financial Officer Scott Meriwether. Following their remarks, we will open the call for your questions. Before we begin today, I'd like to remind everyone that during the conference call, management will be making statements that contain forward-looking statements within the meaning of applicable Canadian securities legislation. Please refer to the company's forward-looking information disclaimer statement, which can be found on the notice for this call, our website, and the Q2 2022 earnings release. Now, I will turn the call over to Mike Reinhart. Please go ahead, sir. Thank you, operator, and good afternoon, everyone. We appreciate you taking the time to join our Q2 2022 earnings call. We've successfully achieved another record mark for top-line revenue of $47.6 million, up 107% year-over-year, coupled by the strength of our adjusted EBITDA metrics from both a dollar and percentage basis coming in at $6.9 million and 14.4% respectively. Both our payments and cloud solution segments contributed greatly to these results, highlighting the efficacy of our dual business model. In particular, the recent activation of the Catapult business and the ramp-up of cross-sell and upsell opportunities have begun to play a significant role in our growth trajectory. These consistent quarters of growth are a testament to the hard work and dedication of our management team has put forth on delivering on our stated thesis of generating transformational impact with immense value to our stakeholders. To quickly touch on the broad market at play and its potential effects on Quisitive, we're fortunate to say that we've maintained resilience and flexibility to the macroeconomic headwinds affecting many corporations of the international economy. A key indicator we focus on at this time is Microsoft's reported growth in their cloud business, as this is a proxy for Quisitive's potential. Microsoft CEO, Satya Nadella, reiterated again on their most recent earnings call that they project growth at 40% in that field, lending credence to the multi-trillion-dollar total addressable market statistics frequently mentioned and associated with global cloud market. Our cloud solutions demand continues to remain strongly in line with Satya's comments. Our cloud solutions business is specifically designed with flexibility and structure and diversity in services to continue to deliver value to customers despite market changes. We continue to remain well-diversified from a customer, industry, and platform perspective, offering a multitude of services for digital infrastructure, and analytics optimization, spreading horizontally across healthcare, manufacturing, retail, and a multitude of other industries. With industry leaders continuing to forecast strong performance in the cloud solutions field, including IT investments as a protective factor against macroeconomic headwinds, Quisitive remains focused on playing the role of trusted advisor for our clients, aligning their technology investments with strategic business goals. We continue to anticipate strong performance and expansion of our market footprint across cloud solutions. Our cloud solutions platform has successfully grown sequentially and year-over-year from an EBITDA and revenue basis. Quisitive has again delivered on its thesis of harnessing Microsoft's cloud platforms to provide solutions to midsize and enterprise organizations to help customers achieve their goals of digital transformation. Our investment in the front half of this year on integration efforts with Catapult have resulted in advancements in cross-selling and organic growth across the cloud solutions segment. Central to our M&A strategy is the thesis that when we acquire a cloud solutions organization, it generates cross-sell opportunities that create lift and organic growth. With Catapult, this thesis has proven spot on. In H1, we expanded 15 Quisitive customer accounts by selling complementary Catapult services and solutions. Recurring revenue was a primary component of these contracts, including managed services for Azure and our Spyglass security solution. Because of the unique IP and recurring revenue streams that Catapult has brought to Quisitive, these cross-selling motions have both expanded key accounts as well as an intentional focus to diversify our revenue mix by increasing recurring revenue year over year. On the other side of the coin, we have leveraged Quisitive's blended resource model across onshore, nearshore, and offshore to accelerate the IP development for Catapult's Azure managed services offering, EverWatch, and also scale our managed services solutions to customers with 24-hour support capabilities. Furthermore, Catapult delivered strong additions to our marketing organization, driven through campaigns aimed at our combined customers. As a result, Quisitive has experienced increased momentum in our marketing efforts that has generated significant uptick in our solution assessment pipeline as we head into the back half of the year. The Catapult business has now officially completed a rebrand as Quisitive. In addition to the public rebrand, in Q2, we have consolidated our teams into a singular structure and are now focused on integrating back-office systems expected to be completed in early 2023. These integration efforts afford us the ability to go to market as a singular industry-leading brand, enhancing our value proposition to customer, and accelerating customer acquisition. On the partnerships front, by committing to our strategic partnership with Microsoft, Quisitive has differentiated itself in the market and even from fellow Microsoft partners, namely due to our continued reception of partner awards. For consecutive years, Quisitive was the recipient of multiple awards as we recently announced receiving both the Microsoft United States Health and Life Sciences Partner of the Year, as well as being mentioned as a finalist for the Microsoft Global Healthcare Partner of the Year. As I have previously stated, the relationship with Microsoft not only enables aligned sales and marketing motions that accelerate customer acquisition and drive revenue, but also has established Quisitive as a premier solution provider in the ecosystem, providing enhanced opportunities for acquisition of other Microsoft partners and a reputation as a talent destination for Microsoft technologists. That said, I'd like to share some of our recent wins on the cloud business. Recently, Quisitive won an engagement with one of the largest global manufacturers to upgrade their ERP system from Microsoft Dynamics AX to Dynamics 365. This client's legacy implementation of Dynamics AX was one of Microsoft's largest ERP implementation, and the customer has now chosen Quisitive as their partner for their migration to Dynamics 365 ERP. Our introductory engagement with this customer was implementing our Quisitive ShopFloor IP solution for manufacturers and aligned to our strategy to accelerate impact and validate technical acumen via IP, then expand to strategic cloud services. We have now gained the trust of this customer to globally update their ERP system. Additionally, our strength in healthcare vertical continues to be proven. Of note is our recent contract to implement MazikCare's suite of revenue cycle management tools for a pharmacy care services subsidiary of a major US healthcare insurance company. In this case, revenue cycle management is a complicated process for healthcare organizations, as many payees are stakeholders in a single transaction. The customer selected MazikCare because in comparison to the largest incumbents in the marketplace, MazikCare was designed for quality end-user experiences that limit user errors in addition to maximizing revenue. The contract revenue associated with this customer is split roughly 50% service fees and 50% recurring revenue from IP, and it will be completed on an accelerated timeline. With the customer being just one of a number of subsidiaries of the larger firm, we look to demonstrate our success as a partner and become the revenue cycle management vendor of choice for the organization at large. With that, let's transition to the payment segment. As you are aware, the payment solution segment includes the merchant payment processing services and the LedgerPay payment platform, the latter being a major differentiator for our global payment solutions team from our competitors. When taking a step back, we're encouraged to see extensive progress on both fronts, including the successful completion of the certification process for LedgerPay direct processing on the Visa network, a key milestone by our team that brings us one step closer to commercial utilization of the LedgerPay platform. In parallel with the Mastercard certification announcement, the completion of the Visa certification expands our network and positions us to begin to onboard merchants to LedgerPay. At this time, we're still in the process of completing the additional certifications with American Express and Discover, and look forward to updating you further on those developments. Building on the significant progress LedgerPay has made with the card associations, we continue to progress on our stated plan to onboard our first merchant that will transact on the LedgerPay platform later this quarter. This first merchant will be the start of the migration process of BankCard USA merchants that will accelerate in 2023. Despite the broader status of the economy, we have been encouraged by some of the companies within our sector, such as Mastercard, American Express, and Visa, to name a few, as they've all experienced volume growth within their respective ecosystems. The pattern and trends they are currently seeing on brand with what our team is witnessing, which makes us hopeful for the future ahead. Our merchant services group, the arm of our payment solutions business that focuses on payment processing, recognized over $1.1 billion in payment volumes in the quarter, which is an increase from $962 million in the same year ago period, and $12.2 million in average daily payment volume, which is an increase from $10.6 million in the same year ago period. As we touched on in the previous call, seasonality plays a role in the quarter-over-quarter performance of this division. Generally speaking, the first and Q2s of any calendar year are primarily our strengths in volume metrics and revenue, while the latter parts of Q3 into Q4 see a slight tapering due to seasonal effect. This is predominantly due to the product sales mix of consumer purchases for our merchants, coupled with the strong wave of renewals we see from our customers who bill for membership services via annual fee structures they have in place, which are processed in the Q2. All that is to say, the increasing improvement we've seen on volume is encouraging, one that we intend to continue growing going forward. To date, our M&A strategy has allowed us to grow sales capabilities, expand geographic presence, and facilitate the expansion of our products and services portfolio. Due to the success we've garnered and because our expressed goal is to continue to deliver value to our shareholders, remain on the lookout to find the right opportunities to drive our inorganic growth strategy. However, there is no material update to share at this time. We remain diligent and will keep you all apprised of anything material going forward. Looking ahead, we continue to see strong demand for our cloud solutions business as well as the payments business and expect to meet the previously published consensus revenue and EBITDA targets for the business. In closing, our cloud solution segment has the foundation needed to go to market and achieve the holistic cloud services value proposition that is central to our mission. Additionally, the continued growth momentum in the payments business and ongoing advancement of LedgerPay position the company for growth in the coming quarters. While we continue to work to refine our back-office processes and support the realization of our full vision, this is an exciting time to be part of the Quisitive story as we continue to make significant progress on our growth initiatives across the organization. Thank you all for joining us as shareholders and supporters. I'll turn it over now to our CFO, Scott Meriwether, to discuss our Q2 2022 financial results. Scott? Thanks, Mike, and thank you to all who are joining us for today's call. Our momentum continued through our fiscal year as we set a new quarterly revenue high watermark for the company, as Mike previously noted. Revenues for the Q2 ended in June increased 107% to $47.6 million from $23.0 million for Q2 2021, driven both by our acquisitions and our healthy organic growth. Gross margin increased 133% to $19.3 million in Q2 of 2022 over $8.3 million in Q2 of 2021. Our gross margin as a percentage of revenue was 40.6%, continuing our sequential quarter-over-quarter trend of increases. For comparison, our Q2 2021 gross margin percentage was 36.1%. We will continue to focus on increasing our gross margin percentage as we integrate our acquisitions and focus on cross-selling activities. In particular, we will focus on increasing our sales of our first-party IP within our cloud services segment. SaaS offerings in general tend to have higher gross margin profiles, and we would expect our SaaS and recurring revenue growth would blend towards higher overall gross margins over time. The activation of LedgerPay will also drive increased gross margins in the future within our payment segment, though we do not expect LedgerPay to make a meaningful impact to fiscal year 2022. Adjusted EBITDA increased 90% to $6.9 million for Q2 of 2022 from $3.6 million for Q2 of 2021. Adjusted EBITDA as a percentage of revenues was 14.4% for Q2 of 2022, similar to last quarter. Our EBITDA margin within our cloud services segment increased from 13.3% in Q1, that was our first full quarter with Catapult, to 13.8% in Q2. This increase in EBITDA margins within our cloud services segment was partially offset by lower margins within our payments division as we continue to invest on our LedgerPay platform as it nears market readiness and customer number one. We'll now move to discussing the specific performance of our segments. Revenue in our global cloud solutions segment increased 107% to another new record of $35.3 million for Q2 of 2022 from $17.0 million for Q2 of 2021, driven by the Catapult acquisition and reflecting organic growth. Professional service revenue and managed services have grown significantly with the addition of Catapult. We acquired Mazik last year, effective April first, so that acquisition has fully lapped in our Q2 results when you look at quarterly comparative results. This segment's adjusted EBITDA improved 105% to $4.9 million for Q2 of 2022 from $2.4 million for Q2 of 2021. Our EBITDA margin within our cloud services segment increased incrementally to 13.8% for Q2 of 2022. Our EBITDA margin has been inching up sequentially over the last several quarters after the Catapult acquisition. We anticipate this pattern continuing for the next few quarters. As Mike alluded to, the response to our transition to a one Quisitive brand, both internally with employees and externally with customers, furthers our confidence in cross-selling and continuing our growth pace. We've also seen strong response to our first-party IP and believe these products will help open doors and drive revenue of both product and services going forward. Revenue for our global payment segment also set a quarterly record, increasing to $12.4 million for Q2 of 2022 from $6.0 million for Q2 of 2021. Substantially all of the Q2 2022 revenue was from our BankCard acquisition. Mike has already discussed the seasonality in the business, and Q2 experiences the highest payment volume of the year. Looking at the remainder of fiscal year 2022, we expect the BankCard volume to continue to grow at its historical growth rate when compared to the same quarter in the prior year. Adjusted EBITDA for our global payment solutions segment increased to $2.0 million in Q2 of 2022 from $1.2 million for Q2 of 2021. BankCard contributed record EBITDA results in the quarter, which were partially offset by spending on the LedgerPay platform. We noted on our last call that operating costs related to LedgerPay would continue to modestly increase throughout 2022 as we reach market readiness in the launch of the platform. We've seen this trend over the last three quarters. We will continue to invest in LedgerPay's commercialization throughout this fiscal year as we prepare for more meaningful impacts from the product in fiscal year 2023. Moving to the balance sheet, at June 30th, we had $75.6 million of term loans outstanding and $9.2 million of cash on hand. As of June 30, our total leverage ratio was 2.93x. As a reminder, our leverage ratio covenant stepped down to 3.0x at June 30. In our August fourth press release, we announced an amendment to our credit facility subsequent to the quarter. After reported earnings, we will exercise a portion of the accordion feature within our credit facility, and we'll use this borrowing and cash on hand to fund the earn-out payments on our CRG and BankCard acquisitions. We view this expansion to our credit facility as our cheapest source of capital in today's market environment. As part of the amendment to our credit facility, our leverage ratio covenant will increase to 3.25x for the next two quarters. We are essentially returning to the leverage profile we had after the BankCard and Catapult acquisitions, and we have demonstrated the ability to scale up our leverage ratio and then pay down debt. After this borrowing, our quarterly debt pay downs will increase from CAD 2 million per quarter to approximately CAD 2.5 million. As a result of this credit facility expansion, we will keep more cash in the balance sheet, which will allow us to invest in the launch of LedgerPay, and it provides some ammunition for modest M&A activity if we find the right target. Keeping more cash on the balance sheet is also prudent should we begin to enter a greater recessionary environment. However, we want to stress that is not our current motivation as we do not see demand slowing within our pipeline. Some of you may have noted that we filed a shelf offering within the past few weeks. Our prior shelf expired on July twelfth, and this was just good corporate housekeeping. We currently have no appetite to raise equity at today's prices, so it felt like the best time to file the shelf was in this market, so it would be obvious we are not signaling any kind of imminent capital raise. As a note to better understand our working capital position, at June 30, we had $15.7 million of projected earnout payments and short-term liabilities on the balance sheet, along with $2.1 million of projected earnout compensation within accrued liabilities. All of these amounts should be paid out during the Q3 using funds from the credit facility expansion, $5 million of equity as contractually required by an acquisition agreement, and cash on hand. Our working capital deficit at June 30 is arguably overstated, as it includes a $5 million non-cash item, which is the earnout amount that will be paid with equity. Overall, working capital will look much different when we report our Q3 2022 results because the earnout payments that we will make this quarter. The current interest rates on our loan, on our term loans is approximately 5.25%. We currently convert over half of our adjusted EBITDA into free cash flow, which can either be used for acquisitions or debt repayment. We define free cash flows are as adjusted EBITDA minus capital expenditures, internal capitalized software, cash interest, and cash taxes. On par with what Mike mentioned, as we look into the remainder of the year, we remain confident in our ability to deliver strong results. We currently see indicators of a slowdown in tech spending, and we like our position in the market. We are very pleased with the first half of 2022, and we are excited about the rest of the year. This concludes our prepared remarks. Thank you all for your time this afternoon. We look forward to updating you on our progress going forward, and we're now ready to open the call for your questions. Operator? Thank you. At this time, we will be conducting a question-and-answer session. Our first question from the line of Christian Sgro with Eight Capital. Please proceed with your question. Hi, good afternoon, and thanks for taking my questions. Maybe for the two questions today, I'll dig into the cloud side of the business. You know, first, you guys echoed some of the good commentary out of Microsoft on the demand environment. Maybe my question here is, one, you know, how your pipeline looks, you know, just broadly where you stand today. Then as a second part there, like which areas of the cloud solutions do you think will be most resilient, whether it's analytics or broader infrastructure, you know, where you're seeing no slowdown in demand? Yeah. In general pipeline, we have a very strong pipeline continuing to expand and grow. As we mentioned in the comments, we did full integration of our businesses across the last acquisition. We'd already integrated the other components and then with Catapult now having a single organization focused around both the, what we call our cloud services and applications segment as well as the business applications. As we look at pipeline expansion, it's really kind of happening across both sides. As it relates to the areas of focus, some of which were highlighted in the customer wins, we're seeing this value proposition of industry acumen and IP that we're bringing to market on SaaS offerings in complement with Microsoft's Dynamics platforms is a really strong pipeline driver for us, so continue to see great momentum there. On the cloud services and applications, obviously the managed services around security and Azure and the co-sell and things like that are really a big part of that, as well as all the work we're doing to really continue to see strong momentum in data and analytics and bringing those capabilities to customers as they continue to deal with all these silos of data that they can't aggregate and derive insights from. Using our expertise, us leveraging Microsoft's Azure capabilities for data and bringing that data into a common model and structure and then layering on top of it the Power Platform and other tools to be able to derive insights from it are the areas we're seeing the most momentum today. Okay. That's helpful. It looks like some broad-based strengths. The second question I'd ask, still on the cloud business. With the back-office integration that you spoke about, Mike, looks like it'll, you know, be finalized early 2022 as the timeline you gave. But is that gonna be something that'll help with the joint sales efforts, some of the coordination sort of offensively that way, or do you see that as being, you know, a cost optimization tool as well, one or both of those? Yeah, it's a few different things, right? One, we've done a lot of steps already on sales integration. We, as might not be a surprise to you, leverage Microsoft's Dynamics CE platform for sales automation. So we've done a bunch of that already, and we're continuing to enhance that, incorporating custom workflows and other kinds of things to align to our shared business processes we're putting in place. The bigger initiative is really around the core in a services-based business, all of our project time capture, billing systems and having consolidated. Certainly one element of it is bringing that all together. That's gonna give us really integrated KPIs internally across the business, which today we have still some disconnect. We have KPIs by segment, but then have to do some manual efforts to pull those together. That'll give us a streamlined way to see forecast, to see booked backlog and be able to, you know, look at pipeline conversion metrics both forward-looking and backward-looking in a way that we didn't have before. We've chosen, you know, one of the industry-leading products, it's called Kantata. It's a, you know, former Mavenlink product, which is the industry-leading product in that space. It'll all be deployed, fully integrated with our Dynamics 365 CRM CE platform, as well as our Dynamics 365 financial ERP platform. We have a really integrated platform across the entire business to be able to run and operate it. Got it. That's all helpful, Mike Reinhart. Thanks for taking my questions, and I'll pass the line. Thanks, Christian. Our next question comes from the line of Rob Goff with Echelon. Please proceed with your question. Thank you very much, and congratulations on the quarter. Great numbers coming today. Thanks. In broad buckets, could you talk to the pro forma organic growth that you are seeing across both the cloud side and on the bank card side of things? Yeah. You know, as we've talked about all along, it's staying consistent with what we've talked about, you know, running in that 15%-20% organic growth on the cloud side and, you know, continuing to maintain at 20% organic growth relative to the merchant services, the former bank card business that we talk about, merchant services. You know, we're seeing and continuing to see that. You see it in the volume metrics we talk about, you see it in the revenue recognition we talk about. So we're seeing those continue all of that in advance of LedgerPay being a contributor on an organic basis as we go forward. Thank you. Scott made reference to building up sales capabilities ahead of the commercialization. When we hear that comment, when we look on your career section and we see the number of open positions, how should we look at the drains you are currently carrying associated with that pre-commercialization and how they may change going forward? Yeah. There's a series of things. Certainly, sales and marketing investments are some of the things you're seeing in there as we incrementally do that. We'll continue to add organic headcount into the system to do that. We'll start making investments in marketing events and things like that. Secondarily, you know, as we start to onboard customers, we'll make investments to scale our operations capabilities. We'll leverage BankCard resources from risk and underwriting, customer service, and things like that, but we'll need to be expanding that footprint, 24/7 coverage, other kinds of things that we'll be doing. From that perspective, it's that kind of the motion you'll see. We're stepping into that as we move through a quarter. You'll see it in the near term continue at the levels over the last couple of quarters as you've seen increases. As we move into 2023, we'll look to see that grow and expand. Some of that'll be driven by pipeline volume that we see from customers. The more we start to see movement, onboarding, and all those things, the more we'll have to accelerate that spend in order to you know, make sure that we have the operational footprint in front of that volume growth. Very good. Thank you. Thanks, Rob. Our next question comes from the line of Robert Young with Canaccord. Please proceed with your question. Hi, good evening. My question, my 1st one will be maybe an extension of Rob's last question there. I'm just if we step back a bit and look at the business. You had said that EBITDA margin's inching up sequentially the last couple quarters, and looks like that's gonna continue. But operating costs in LedgerPay is gonna go up as seasonality worsens. If we just back up off of that, when revenue starts to come in in 2023, I mean, how do you think of the margin structure of the payments business? 'Cause it's already quite high relative to the corporate margins. And then where do the corporate margins go over the, you know, next couple of years? Whatever you're willing to share. From a payments perspective, the legacy what we're experiencing right now from gross margins, we would expect that to increase as LedgerPay begins to activate. Our goal as well is to get LedgerPay into a more what we would call closer to a break-even status, where it's less of an investment and we begin to have gross margin that begins to recover our operating costs. We fully recognize there's gonna be a period where we will need to continue to invest ahead of what we would consider a break-even status. From just, like, overall corporate expenses perspective, we expect continued growth both between our cloud and payment side. My goal is that overall, from a corporate expense perspective, that as a percentage of overall corporate expenses will begin to decrease, which would overall drive our consolidated margin up over time. You know, the goal in the very near term is, you know, as we're activating, to the point the investments we're making, as we're activating revenue from LedgerPay, is that we keep EBITDA percentages in line with current environments. Then as we scale and grow, you know, we're not looking for margin expansion at the EBITDA level, from the payments contributions. We look for opportunity to do that on the cloud side as we go forward. We're not looking for that in the near term on the payment side. Okay, great. That's really helpful. 2nd question. Maybe a two-parter. Just looking at some of the partner pieces, Microsoft's year-end just ended, and so does that change any of the cadence of their engagement with you? You know, heard from Cisco that they're seeing stabilization in supply chain. I'm just curious if there's any impact that you see on your business related to supply chain, you know, on the services business and if you see any, you know, ability to expand, the delivery on the demand you see. Your first question centered around Microsoft and that partnership. The new fiscal year always brings, you know, some realignment. We do a really good job, I think. Microsoft has a whole set of sales plays that we align our plays to. I think we're better positioned than ever with the depth and breadth of plays that we can do. To get back to what we talked about, Microsoft continues to go fewer, deeper, and look at partners who can, across their, you know, 15, 20 sales plays, represent most, if not all of them, as they activate within their territories, by industry as well as their horizontal. We think we're uniquely positioned there and have great momentum with them and joint selling is expanding as we speak. You know, relative to, you know, looking at some of the other components of the business, we're not really seeing, you know, bringing forward that partnership and driving new opportunities is a big part of it. Our direct marketing and selling motion is actually also really amplifying. One of the other benefits I mentioned just a little bit in my notes is, you know, Catapult actually had a really strong marketing team, much bigger. And then when complemented with our Quisitive team, we now actually have, you know, one of the best-in-class Microsoft partner marketing engines that's driving direct marketing leads and doing things from that perspective that we think is really a key expansion for us as well. You know, feeling good about that momentum and continuing that as we go forward. Certainly, on the supply chain side, you know, relative to directly to us, there's fundamentally no impact. The place where I'll talk about supply chain that aligns to us is labor. You know, we've talked a lot about the labor force challenges and those kinds of things in the industry, and those continue, but they are lessening as some of the, you know, the big fintechs and other tech companies have scaled back hiring and doing some of those things. You actually are seeing now that some of that pressure is lessening, but we continue to have growth needs and hiring needs. That's really the only supply chain side. The rest of it, you know, certainly we have to monitor any customer of ours that might have supply chain issues, but more often than not, they're engaging us to help them optimize their supply chain, maybe move where they get supply from and modernize and do things, so. Other than that, we don't see a lot of impact. Thanks, Robert. Our next question comes from the line of Gavin Fairweather with Cormark. Please proceed with your question. Well, hey, good afternoon. Good to hear that you're seeing, you know, continued strong demand on the cloud solutions side. Can you just speak to the capacity utilization of that business as you look to fulfill on the pipeline that you have here in the back half? Our utilization is high. The metrics vary across business line. You know, the whole idea about utilization metrics is an interesting one. People, you know, we used to use those as metrics in the past. The problem is that's a staff augmentation metric. Utilization applies in certain segments, but when you're doing managed services and SaaS and all those kinds of things, utilization is not a good metric. As we look across it, we really think about it in different ways. We are allocating resource to the different revenue sources that we're trying to build within the cloud business. There's the professional services side. You'll see those utilizations running in that mid-70s% to upper 70s% range that you might otherwise see across the globe, leveraging, you know, all the capabilities we have there. That continues to perform well, along with adding headcount. When you start to look at managed services and other things, our goal there is to continue to incorporate, in addition to labor support costs, IP and methodology and things. The Spyglass IP and some of the things we're doing there that we talked a little bit about, you know, the Health Watch and other kinds of things that we're doing. Those kinds of capabilities help us, you know, derive value with customers without labor. Then lastly, on, you know, the SaaS offerings that we're building, obviously, we have investments in, capitalized investments to some degree in development and expansion of those products. You have operational expenses and resource allocation across the different folks doing support and maintenance and other kinds of things in those products that are OpEx related. We're balancing our resourcing mix across that. In some periods, we'll shift. You know, if we have high demand, that we need to, you know, allocate additional resource capacity to, customer demand and things like that, we can do that. Again, all of that's part of the process of creating scale that's really important to optimize utilization of resource. Resource capacity has been highly utilized, and we've hired, I think at last count it was nearly 100 people in the organization this year. That's great. Just on Catapult, can you just talk about the margin profile of that business? Obviously, a big initiative after the acquisition was kind of transitioning those margins towards your kind of overall average within kind of cloud solutions. Can you speak about the levers there and how much progress you've made? Yeah. The gross margins are running, you know, similar to the broader footprint, 40% or so. You know, we've talked about this a little bit, you know, on the professional services side, margins are a little, you know, less, but on the IP recurring side, they're closer to 50% margins. As those mix changes, we'll see the impact of that. In particular on their EBITDA margins, we're starting to see some of that lift be realized as we do some back-office integration. Some of the back-office systems things and other kinds of things that we're doing will start to enhance that as we get further in the future. The good news is, as we build growth for them, and do that independently, the incremental variable cost on an OpEx basis doesn't have to scale anywhere near the growth. On a growth margin basis, we don't see that moving dramatically within the Catapult kind of footprint. We think there's certainly some room there. As we create scale with them, we think, EBITDA margin contribution is where we'll get the expansion based on, again, classic models of scale and needing to be able to, you know, not having to invest as much, on that side, whether it's from system security, benefits costs, all the things that as you get scale and bring things together, we'll start to realize. We'll start to see that expansion occur. We've seen some momentum on it, as we go forward, and that's part of the lift you're starting to see in the incremental steps, not only with Catapult, but with each of the businesses as we synthesize them together. Got it. Congrats on the strong numbers. I'll pass the line. Thanks, Kevin. Our next question comes from the line of David Pierce with Raymond James. Please proceed with your question. Good afternoon, everyone. Hoping you can chat a bit about the company's covenant agreements. You increased the leverage ratio requirement recently, added another $9 million in debt, I think, to help fund some of the earn-outs. If I'm correct in saying you said those earn-outs are $10 million in cash that are expected to come off the balance sheet in Q3. Can you give some color as to where you'll be sitting in terms of covenants, taking into account those distributions? Could we expect that leverage ratio to tick up slightly from current levels? I think it was 2.93 you mentioned at the end of Q2. Yeah. We were at 2.93 at June 30, and we'll borrow some on this accordion feature shortly. We expect that we will eclipse three. We'll have a covenant of 3.25. We're just picking up just a quarter turn from a covenant limit perspective. We anticipate we'll, you know, in September 30th of that quarter will be slightly above three. Just, it's the nature of just borrowing that amount. But we've shown the ability to pay down, and we think we'll quickly be back under three, and close to it by the end of the year, and definitely by March 31st. We will set back down to three from a covenant limit perspective as of March 31st. All of our internal forecasts, but we have no concerns about that structure. Okay. There's no material risk that, say, you might have to scale back some of your LedgerPay investments, for instance, to stay on site. You don't see that as any sort of concern. The way we're looking, just operating the company status quo and at the current level of investment, we're very comfortable with the covenants that we've set for ourselves with the bank. Great. Thank you. Very helpful. Our next question. Thanks, David. comes from the line of Divya Goyal with Scotiabank. Please proceed with your question. Good afternoon, gentlemen, and congratulations on the quarter. I just wanted to talk a little bit about LedgerPay. Could you provide some color on how is LedgerPay's marketing and growth plans progressing in general? How has Microsoft's co-sell team been helping you in terms of progressing those efforts? Also, could you provide color in terms of your outreach to some of the larger customers that you've stated in the past? Yeah. Multifaceted there. We've been having ongoing conversations. We've had sales team in place doing all kinds of discussions, in some cases, demand generation, but in many cases about customer feedback. As you're doing things like we're doing on the payment side, that's pretty straightforward. Even there, we've had an ISO advisory group that as we start to think about building the kinds of capabilities that we wanna embed into the offerings as we take these to market for the ISO and ISV community, we've had our sales team playing an active role with them discussing certainly the sale and positioning of it, but also using them as a sounding board to talk about if we address onboarding in this way, and if we provide residual residuals management capabilities and chargebacks, like, really using that as a sounding board. That's actually been a big part of our sales motion over the last year. The value to that is twofold. Obviously, we get great feedback in advance of some of these features even being in market. More importantly, they've got some buy-in now to the fact that we're building something that's gonna be tightly aligned to their core needs. That's one element of it. As we go forward, we've been having conversations. We have several conversations direct with customers. We've been doing some light marketing. You'll see us in, you know, some different trade magazines. We've done articles. We've had, you know, been attending conferences and shows and things like that, not in, you know, a big bang way, but just being a participant, meeting with and discussing in industry segments and others. As we work with Microsoft, what we're focused on there is really starting again to talk to them about territory planning and account planning, and positioning where the targets that we think will be the most effective for us to go drive and work together to go do that. We've got that motion in flight. We've had some ongoing discussions internally as well as positioning with their teams. Then the customers that we've been talking with, we're continuing to have some, you know, very meaningful proof of concept discussions with, you know, some of the major retailers that really have validated for us conceptually the model that we're bringing to market around data and insights and the value it can bring to them. As they talk about, you know, this blind spot that they have in an omni-channel, brick-and-mortar environment where, you know, they have low participation from a loyalty side. In many cases, they're trying to buy aftermarket data and do all these things that, you know, when we talk to these guys, say, you know, they can maybe see 30%-40% observable behavior in and after the market and no ability to do real time. If we can help them move that from 30% or 35% to 40% or 45%, 50%, you know, they're talking about it having $ billions of value to them, in that process. We're working with them to ideate ways to do proof of concepts. You know, to activate it in a real-time fashion requires us to be connected into the payment flow, and that's gonna take some time. That's just not something you go jump in and start doing. From a proof of concept side, we're doing some things. We're getting data models and things like that and going through those processes and continue to get great validation, from them that the concept and the models and the things that we're doing are valuable to them. Now it's about, you know, we gotta get the product implemented. We gotta demonstrate that we can do it at scale. Those are the works in progress in parallel as we go forward. That was great color, Mike, thank you for that. My 2nd question is on the Global Cloud Solutions business. You did mention that you have engaged some of the new enterprise customers. Recently across the markets, we have heard some of the enterprise customers pulling back or canceling contracts, shortening contracts, and sort of wait and watch tactics there. What's your feedback or input on that side of things? I don't think they're doing it in IT services. Now again, there may be some industries where there's some stress or something, I don't know, but we're not seeing that. We've had a couple of customers who have taken a shorter horizon on some of their contracts instead of, you know, doing something that's a year long, they might do something six months, but nothing major, and certainly not canceling. We're not seeing any of those kinds of things at all. In general, volume continues to be higher than it's been in the last 12-15 months, and we're not seeing at any level, enterprise or other. We don't participate in small customers, so, you know, that part of the business, I suspect, has a little more stress to it. That small, medium business side is not really a key market focus for us. We're not, you know, I don't really have a good lens into that universe. In that mid-market and, you know, enterprise level, again, we're not working, in too many cases, with the what I'll call the majors, those, you know, really big guys. In the US, that mid-market space, those $1 billion-$5 or $6 billion- revenue businesses are making significant investments in IT services and digital transformation. That's great. Thanks, Mike. I'll pass the line. Thanks, Divya. Our next question comes from the line of Gabriel Leung with Beacon Securities. Please proceed with your question. Good afternoon, thanks for taking my questions. Mike, obviously, you guys are gonna be busy with a whole bunch of organic initiatives over Quisitive, but on the inorganic side, I'm curious to hear your thoughts, specifically around the solution side of the business, you know, verticals or technology capabilities that you feel might be lacking within your current portfolio, which you might be thinking about bulking up over the next several quarters. Yeah. Obviously nothing immediately. At the, to Scott's point, we've got some headroom on the balance sheet to do some small tuck-in kinds of things that wouldn't require any kind of equity raise, and those would be the only things that we would consider at this point in time. The real, as we look at it, there's a variety of things we can go to market to do. Obviously, there's still some scale capabilities. There's certainly some niche areas that we need to complement. From an industry side, we see some really interesting opportunities in the retail space. As we start to think about the intersection of cloud and payments coming together, in our motion with our payments business and the data and things, we see that intersection, and the combined value coming together. Certainly even with our existing capabilities, but there's things around e-commerce and things around retail that we think would really be complementary, and there's some interesting partners in the ecosystem that, you know, that's a focal point for them. I believe that would be a great opportunity for us that would create value to the business on both elements of our business segments, but more importantly, be more directionally aligned to where we see the future of this business. Those two worlds coming together at the intersection of the customer, unlocking data from payments in the context of merchants or retailers, combining it under a common data model with their other capabilities that, they're trying to derive from store operations and things like that. We think it's one of the reasons why the two businesses together are so powerful and are going to really unlock value together in the future. That's one area. The healthcare space, we continue to see opportunity to both build, buy, and potentially partner. The growth opportunity there is enormous for digital transformation, whereas other industries are maybe in the third or fourth inning in some of the cases, healthcare is still very, very early. We have a unique position there. Our brand rights to play with, you know, the awards from Microsoft, the IP and things. We think there's other areas there that we could acquire skill and capability to bring value to that on the cloud side. Further to Mike's point, from an inorganic perspective, especially on cloud, we have grown significantly as a Microsoft scale partner. As we are moving up with our customer base, we do anticipate there will be opportunities to scale geographically as we follow our customers. You know, case in point, one of those could be over into Europe at some point in time. Again, nothing imminent there. Beyond just the product acquisition and rounding out teams, we do think there will be opportunity for geographic expansion as we continue to grow within the overall Microsoft ecosystem. Well, thanks for that. Just for my second question, maybe another follow-up on the M&A side. I'm curious what you guys are seeing out there in terms of private valuations. You know, have the sellers sort of adjusted their expectations yet, or are we still looking at, you know, valuation from earlier on? Well, sellers always have too high an expectation, so I'm gonna start with that. They're always at least one or two turns more than what buyers want. I'll tell you that generally speaking, in payments and in cloud, there's a significant amount of private money active in that marketplace. The valuations in general have not come off where they were over the last, you know, 18 months or so. Certainly, there are some extremes that you have to discount out. There's an interesting Global Payments Inc. on the payment side, for example, just announced an acquisition of a large-scale ISO, but nonetheless an ISO, EVO Payments, Inc. That was an 18 times EBITDA transaction. You know, that's a public marker that kind of gives you a reference point on that side. On both sides, we're seeing multiples in line with what you would have expected over the last 18 months or so. Gotcha. Thanks for all the feedback and, congrats on all the progress. Thanks, Gabriel. Appreciate your support. Thank you. At this time, we have reached the end of the question and answer session, and I will now turn the call back over to Mike for any closing remarks. Thank you. Thanks everyone for joining us today. Especially wanna thank our employees, partners, investors, and our customers for their support. We appreciate your continued interest, Quisitive, and look forward to updating all of you on our next call. Thank you. Operator, I'll turn it back to you. Thank you, sir. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.