Good morning. My name is Miranda, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Softchoice Q3 2021 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session for the analysts. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press star, then the number two. Thank you. Mr. Tim Foran from Investor Relations, you may begin your conference. Thank you, operator, and good morning, everyone. Welcome to Softchoice's Q3 2021 conference call for the period ended 30 September 2021. A reminder that for purpose of the recording, today is Friday, 12 November 2021. Joining us today are Vince De Palma, Softchoice's President and CEO, Bryan Rocco, CFO, and Andrew Caprara, COO. After prepared remarks, we will open it up for analyst questions. The company will make forward-looking statements on our call today that are based on assumptions and therefore subject to risks and uncertainties that could cause the actual results to differ materially from those projected. The company undertakes no obligation to update these statements except as required by law. You can read about these risks and uncertainties in our earnings press release today, as well as in our filings with Canadian securities and regulatory authorities. Also, our commentary today will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Reconciliations between the two and relevant disclaimers can be found in the company's MD&A, which is available on our website. Finally, please note that because the company reports in US dollars, all amounts discussed today are in US dollars, unless otherwise indicated. With that, I will now turn the call over to Vince. Thanks, Tim, and welcome everybody. Thank you for joining us today. I am pleased to report on a strong quarter of progress for Softchoice in Q3, including first, strong customer engagement for our IT solutions, and that was reflected in our 108% net revenue retention, as well as gross profit per customer rising 15% to $57,000 over the last 12 months. Secondly, we recorded sales force productivity, one of the highest that we've had in certainly the five years I've been here, and maybe in our history, with gross profit per account executive increasing 17% to $694,000 over the same time frame. We also continued to make growth investments in our technical resources and sales productivity, as well as our Cloud strategy, and continued realization of the benefits of Project Monarch, notably in our top-line gross profit. Bryan will provide a deeper dive on our financial results, but I will go over some highlights. Gross profit, which is how we and others in our industry measure top-line performance, increased 24% over Q3 2020 to $65 million, driven by double-digit growth across all of our sales channels. Within our IT solutions, the increase in gross profit was led by 25% growth in our software and Cloud Solutions, and 23% growth in our services offerings. Our key focus areas as they align with some of the fastest-growing sectors within the IT industry. Software, Cloud, and services comprised approximately 72% of our gross profit in Q3. Our increase in gross profit was driven by a 21% increase in our gross sales to $426 million, which we believe is a better measure of customer volumes than net sales. This was led by a 34% increase in software and Cloud gross sales. Adjusted EBITDA declined 14% due to the impact of foreign exchange, as well as increased operating expenses stemming from our ramp of sales productivity investments to drive growth and certain non-recurring professional fees incurred to support the implementation of a new digital workflow platform for our managed services offering. Additionally, in Q3 of 2020, we received $3.7 million in government wage subsidies, which offset reported expenses versus none received in Q3 of 2021. We continued to benefit from strong adjusted free cash flow, which was 88% of our adjusted EBITDA over the past year. Given our strong financial position and free cash flow generation, we were pleased to pay our first quarterly dividend dividend on 15 October 2021. Our continued double-digit growth in 2021 has been driven by our clear strategic focus on hybrid multi-Cloud, digital workplace and collaboration, and software asset management solutions, all underpinned by security. During Q3, we continued to execute on this strategy through an insight-driven go-to-market strategy that drove increased customer engagement and net revenue retention. We also made more investments to bolster our technical and sales capabilities. This execution enabled us to capitalize on ongoing trends in the IT industry, which include the accelerating adoption of the Cloud, the increase in remote work, and a higher demand for seamlessly integrated software applications and security solutions due to the increasing complexity of IT environments and the proliferation of workloads across connected devices. Now let me give you an update on our growth strategy and our four organic growth levers that enable us to sustainably grow our gross profit double digits on an organic basis. Our first growth pillar is our two-pronged approach to grow our sales force and improve sales force productivity. In Q3, our LTM sales force productivity reached historically high levels of $694,000 of gross profit per account executive, and that represented a 17% increase compared to the prior LTM period. The increase is the combined result of secular trends driving growth in our solutions, measures we have initiated through Project Monarch to improve the customer and employee experience, and investments in our technical resources, sales productivity, and our Cloud strategies. These include investments in our hybrid IT specialty sellers, Cloud technical experts, and managed services, including our managed Cloud practice. Turning to our sales force growth, we saw an expected 5% decline in the average LTM account executives to 384 AEs versus the prior LTM period, and that was driven by two primary factors. First, at the onset of the pandemic in 2020 and the uncertainty that the pandemic presented at that time, we made a decision to hold our AE headcount relatively flat. By the end of 2020, the economy and our results were improving, but things were obviously still uncertain. However, with increasing demand from our existing customers in the first half of 2021, we made the decision to focus our 2021 investments on driving sales force productivity rather than adding selling capacity, and during 2021, we held off on increasing our AE headcount. With that said, though, our customer spending has remained strong, and we have recently increased hiring new AEs to increase our sales force headcount and are continuing our investments in sales productivity. We therefore expect to end 2021 with more account executives than the 383 we started with at the beginning of the year, and we remain on track to add 40-50 new AEs from the end of 2020 to the end of 2022. Our second growth pillar is focused on our customer base. We have a similar two-pronged approach here to driving double-digit organic growth. We have seen customer spending increase in 2021 and increases in wallet share of our customers. Our gross profit per customer, measured on an LTM basis, reached $57,000, a 15% increase over the prior LTM period. This growth has been driven by our investments in sales productivity that I mentioned earlier and increasing adoption of the Cloud, remote work and collaboration, software asset management, and security solutions. As you'll hear from Bryan in a bit, we have seen growth in gross profit from all three of our customer segments in 2021. This has offset a natural 3% dip, which we expect to be temporary, in our customers stemming from declines driven during the pandemic. What that means in real terms is we've had a small number of customers that have reduced spending, and though they often remain an active account with us, their spending fell below our threshold of what we categorize as a customer. We expect to get back to growth in our customer base in future periods as we ramp up hiring of our sales force in Q4 of 2021 and into 2022 and beyond. The third pillar of our growth strategy is expanding our relationships with our technology partners. We have been on a journey to strategically shift our business to becoming a trusted IT solutions provider to all our customers. This means that we are delivering more advanced solutions and/or assisting customers with strategic technology transformations like the adoption of public Cloud. We have built very strong partnerships with almost all of the major tech companies, including Microsoft, Google, Amazon Web Services, VMware, Veeam, Cisco, and IBM, to name just a few, as well as emerging and disruptive technology partners. We have also built co-investment strategies with some of those critical partners, particularly in our high-growth solution areas like public Cloud, where these partners co-invest to build our capabilities or expand our capacity. In fact, last month, we announced a multiyear agreement with Amazon Web Services, or AWS, to build on Softchoice's Cloud expertise and develop new capabilities so that organizations can transform and innovate in the Cloud. AWS has seen the deep capabilities that we can bring to customers in the Cloud and has chosen us to be part of an exclusive group of partners to help drive significant growth in the coming years. Working together, Softchoice and AWS will create solutions for organizations to launch, migrate, modernize, and scale workloads on AWS even faster and fully realize the value of the Cloud. Through this collaboration, we will rapidly scale our AWS services-oriented team of solution architects to help customers design and optimize their AWS environments. Additionally, we will grow our team of AWS sales specialists and our operations and service delivery team members who will help customers properly implement and manage business-critical AWS solutions with speed and agility. The fourth and final pillar of our growth strategy is Project Monarch. As we discussed on our Q2 earnings call, Project Monarch was an initiative where we re-engineered our business processes and redesigned our technology architecture and invested nearly $50 million in our business from late 2018 to the early part of this year. Our redesign is anticipated to result in a broad set of benefits, equating to $25 million of EBITDA uplift in 2022, primarily related to top line gross profit uplift, but also from some OpEx savings. These benefits fall primarily into three categories. First, through improved and much greater use of data analytics and through a new Configure Price Quote tool, we've given our sellers much better information to maximize gross profit percentage by aligning pricing among our sales force. Year to date, we are performing better than we planned in gross profit uplift from better pricing. Second is procurement savings. Again, through better data analytics and better tools, we're able to lower our cost of goods sold, particularly purchases through distributors. We are projecting these savings to be on plan for 2021. Finally, process streamlining and automation is anticipated to result in certain net operating expense savings, most of which will accrue to us in 2022. These benefits will offset certain incremental costs related to Project Monarch that were added to support the business, including a new master data team, a deal desk, an enhanced strategic sourcing team, and contract specialists. The project remains on track, and we remain confident in our ability to realize the total anticipated net benefits of Project Monarch in 2022. At this point, let me turn it over to Bryan to take a deeper dive through our financial results and our outlook. Great. Thank you, Vince. I'll start with our top line measurement, gross profit, which has returned to double-digit growth in each quarter of 2021. In Q3 2021, gross profit increased 24% compared to Q3 of 2020, with broad-based strong performance across all our solution types and channels. By IT solution type, the increase in gross profit was led by software and Cloud, which increased by 25%, reflecting increasing customer consumption of Cloud Solutions. Software and Cloud comprised 61% of our total gross profit during the quarter, which is a 40 basis point increase over Q3 of 2020. Gross profit from our managed and professional services grew more than 23%, driven by increased project activity and margins. Services was over 10% of our total company GP in Q3. Finally, gross profit from hardware increased more than 22% and was over 28% of total company GP. The increase was primarily a result of an increase in average sales margins due to mix of sales by channel. Gross profit also grew across all of our sales channels. On an absolute basis, growth was primarily driven by the commercial channel, which increased by more than 28% in Q3 of 2021 and represented 55% of our total company gross profit. Gross profit in the SMB channel increased by 20% and was 22% of our total company GP. Finally, gross profit from enterprise customers increased by more than 17% i t was 23% of our total company GP. I will note that the faster rate of growth in our gross profit in Q3 compared to the 13% we recorded in the first half of the year was partially due to a weaker than usual Q3 of 2020, which was impacted by the pandemic, as well as the anticipated disruption to our sales from the launch of our Project Monarch back in Q3 of 2020. The launch of Monarch in Q3 of 2020 required us to train our workforce on the new technology, tools, and processes we had implemented. However, this was a critical investment that has benefited us this year and a s Vince outlined, Monarch is anticipated to deliver significant returns in future years. Currency fluctuations, primarily related to a strengthened Canadian dollar, also had a positive impact on our gross profit, though this was offset at the expense line, as I will discuss in a moment. On a year-to-date basis, gross profit is up more than 16%, driven primarily by the same factors as Q3. Now turning to our gross sales, which is essentially the gross amount billed to customers as well as referral fees and adjusted for amounts deferred or accrued. It does not include imputed revenue. We believe gross sales is a useful alternative financial metric to the IFRS measure of net sales, as it better reflects volume fluctuations. Gross sales increased by 21% in Q3, driving the gross profit increase that I just described. On an absolute basis, the increase was primarily due to software and Cloud sales, which grew 34%. Software and Cloud comprised approximately 2/3 of our total growth sales in Q3. Services growth sales increased by 14% and comprised approximately 6% of total company growth sales. Finally, hardware growth sales increased by 1%, with sales continuing to be negatively impacted by global supply chain shortages that have persisted through the majority of the year. As demand continues to outweigh supply, it's expected that supply constraints will continue in the near term. Hardware was approximately 28% of our total gross sales in the quarter. On a year-to-date basis, gross sales have increased 13%, driven by a 20% increase in software and Cloud sales. Software and Cloud comprise approximately 67% of total gross sales thus far in 2021 compared to 63% in the same period in 2020. The increase of software and Cloud within our mix of business is a positive for us and the focus of our strategy. However, due to the netting down impact under IFRS on our software and Cloud gross sales, it has resulted in net sales growing at a slower rate than gross sales and gross profit. Net sales increased 17% in Q3 and 7% year-to-date. It also skews the relative weightings of our solutions at the net sales line. For example, software and Cloud comprised only 37% of total net sales in Q3, whereas it was more than 60% of our gross sales and gross profit, which in our view is a more accurate reflection of the contribution to our business. For those of you new to Softchoice, I provided a detailed overview of the impact of netting down on our Q2 earnings call webcast, which is available on our IR website. A slide in our appendix to today's webcast presentation also has an overview of this. Of course, all of this is accounting and has no impact on our ultimate gross profit, and this is one of the reasons why we measure our top-line performance by gross profit rather than net sales. Okay, shifting gears to our operating profitability. Adjusted EBITDA declined by $1.8 million in Q3 due to an increase in operating expenses for the reasons Vince noted earlier, including FX, our investments, and non-recurring costs. As a reminder, we received $3.7 million of government wage subsidies in Q3 of 2020 versus nil in Q3 of 2021. Adjusted net income increased by 40% to $5.6 million from $4 million in Q3 of 2020, as the prior year included a higher income tax expense due to timing differences. Net loss increased by $1.3 million to $2.2 million in Q3 of 2021 as growth in our operating income was offset by an increase in non-operating expenses, including a $3.9 million unrealized loss on FX. I will note that reconciliations of our non-IFRS measures are available in our MD&A. As for our cash flows, we review adjusted free cash flow on an LTM basis. Over the past 12 months, adjusted free cash flow increased 21% over the prior LTM period to approximately $60 million or 88% of our LTM adjusted EBITDA. Now turning to our balance sheet. Our net leverage at September 30 was 1.9 x our LTM adjusted EBITDA compared to approximately 2.9 x at the end of 2020. The increase in our net leverage compared to 30 June was due to timing related working capital movements offsetting positive operating cash flows during Q3. We benefit from a negative working capital profile and continue to expect that we will see a healthy working capital inflow for the full year 2021. As we typically use cash as it comes in to pay down our revolver, we therefore expect to see a reduction in our total debt and net leverage by the end of this year as well. We have significant liquidity, and we expect to use our positive free cash flow to fund our growth, notably our investments in our sales force and sales productivity resources, as well as pay our dividend and repay debt. In terms of non-recurring cash commitments, just a reminder that we will have a one-time cash payment of approximately $14 million in Q2 of 2022 related to our pre-IPO phantom shares. Subsequent to quarter end, we completed a bought deal offering of common shares, primarily comprised of a secondary offering. This did not result in a material increase in our fully diluted shares of approximately $64 million. However, it did result in a significant increase in our free float market cap calculation used by S&P and others to determine inclusion in various indices. Now looking ahead to Q4, our target remains to achieve double-digit year-over-year growth in gross profit. We expect seasonality to remain relatively consistent with historical periods, with Q2 and Q4 being our largest quarters, with Q4 generally being a little over 27% of our full-year gross profit. In terms of expenses, adjusted cash OpEx in Q3 2021 was $54 million h owever, about $1 million of that related to non-recurring costs related to the implementation of a new digital workflow platform for our managed services business, which has now gone live. As noted on the last call, full year 2021 EBITDA margins and operating leverage will not be representative of our normal business model t his is for a few reasons. First of all, the flushing out of CEWS subsidies received last year, which offset expenses, including the $3.7 million I noted in Q3 of 2020, and there was also $10.3 million in Q4 of 2020. Secondly, non-recurring investments in our managed services platform in 2021. Number three, the reigniting of investments in 2021 following a pause during the pandemic. Given our strong performance year to date, today, we reiterated our 2022 outlook. This outlook reflects the impact of the strategic investments we're making in 2021 as well as the meaningful benefits from Project Monarch. We anticipate over 12% CAGR in gross profit growth between 2020 and 2022, which will result in gross profit exceeding $300 million in 2022. We expect our adjusted EBITDA to gross profit margin will increase to around 30% in 2022, resulting in our adjusted EBITDA outlook of between $90 to 100 million. This margin improvement is anticipated to be driven by the operating leverage in our business model as well as the realization of expected Project Monarch benefits of approximately $25 million. Consistent with recent years, we expect to achieve a very high, adjusted free cash flow conversion rate of approximately 90%. In closing, we're quite pleased with our performance thus far this year, with 16% growth in our gross profit, enabling significant sales productivity investments to drive growth in 2022 and beyond. Our focus going forward is on a few things. Number one, continued execution. Number two, investments in additional account executives and sales productivity resources to drive double-digit top line growth. Finally, realizing the full benefits from Project Monarch to accelerate our growth and margins. With that, I will turn it over to the operator for Q&A. Operator? Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch tone phone. You will hear a 3-tone prompt acknowledging your request, and questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by the number two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. Your first question today will be coming from David Kwan from TD. Please go ahead. Morning, guys. Hey, David. Hey, Vince. So you've seen a nice acceleration here in the gross profits year-to-date i think it was 11% in Q1, 15% last quarter, and 24% now this quarter. How much of that, I guess, for at least this quarter, do you think is driven by kind of the strong demand you're seeing in some of your key end markets like hybrid multi-Cloud versus maybe possibly, you know, seeing some of the realized benefits from Project Monarch following the launch last year? And also maybe how much of that was maybe coming from the stronger Canadian dollar? Yeah. Hey, David. It's Bryan here. Yeah, I would say, you know, the majority of the growth is driven by the underlying fundamentals so y ou know, we're a software and Cloud-focused IT solutions provider, and we are investing, and we have made, you know, we've doubled down our investment this year in sales productivity to drive continued growth in those areas. The majority of that is just continued execution against our strategy and y ou're right, the growth has accelerated as you look at the quarters going from 11% to 15% to 24%. Gave a little bit of indication of, you know, what seasonality would look like for the year t he 24% did benefit from, you know, what was a weaker Q3 of last year. In terms of the other components that you mentioned, you know, Project Monarch, Vince went through in the script and w e still are on track, and we've seen some great progress in many of the areas, including the areas driving gross profit increases. We aren't giving specific metrics on kind of how much that contributed to the growth this quarter, but all I will say is we're on track there. In terms of FX, so you gotta look at it two ways s o at the GP line, you know, we do benefit from a strengthened Canadian dollar, so around, you know, call it 40% to 45% of our net sales, depending on what period you look at, are from Canada. A strengthened Canadian dollar kind of helps increase the gross profit. In the quarter, that was around, you know, $1 million or so. It ends up being around 2 points on gross profit. However, overall, it did hurt us at the EBITDA line, as you know, our headquarters and many of our costs are based here in Canada. Overall, you know, at the EBITDA line, FX hurt us by a little under $1 million. David, the only thing I would add to that, this is Vince, is yeah, we are seeing customer demand just continue to increase around the major solution areas we're focused on, particularly around adoption of the Cloud, digital workplace and collaboration, and software asset management, and of course, security. The secular trends in our industry are helping. As Bryan pointed out, our execution with our sales force and all the technical resources that support our sales force and all the other people that support all of them has been very strong and w e are seeing benefits from Project Monarch in our gross profit uplift for sure. That's very helpful in terms of the color there. Bryan, you kind of preempted my next question, which is on the EBITDA side. You talked about, I guess, on the FX and the impact there. Then just to confirm that I heard it correctly, just the non-recurring professional fees related to managed services, it sounded like that was $1 million. Then can you quantify, I guess, just some of these increased investments that you're making to help drive kind of stronger growth, probably particularly in hybrid multi-Cloud? Yeah. The non-recurring charges, it primarily relates to professional fees in our managed service platform investment y ou got the number, right. It was a little less than $1 million in the quarter, and we've now gone live with that project. In terms of the investments this year-to-date, the investments have focused on sales productivity or sales enablement. Those include things like, you know, Hybrid Cloud SEs. They're partners with our account executives who go in to customers and look at kind of what the customer's Cloud strategies are and how do we, you know, help drive adoption of the Cloud. They're partners to the AE t hey don't get included in our AE headcount. Where you see the benefit of that is at the sales productivity level and so Vince noted earlier that GP per AE reached $694,000 on an LTM basis, which is a record high for us. That's where you're seeing kind of the benefits of those investments. Yeah. Again, the only thing I'll add there, David, is as Bryan said, we've been making investments in sales productivity enablement through those type of resources, including journey architects and others, and our sales specialists, like the hybrid Cloud specialists. As I alluded to in our discussion here, we have resumed ramping of our sales force and so w e do expect to end the year at a higher place than we started the year, and we are still targeting to have 40-50 more AEs by the end of 2022 than we had in 2020. That's another investment because, you know, it does take salespeople time to ramp. We're now starting to do that again. Would you say that the investments that you were making, I guess, not at the AE level, kind of the support that helps drive the productivity, was that elevated this quarter versus prior quarters, or was there anything unusual from that standpoint? I would say nothing unusual from quarter-to-quarter. It's sort of a steady ramp. I mean, there could be minor differences quarter-to-quarter. You know, again, what I would say is, you know, our sales model, our account executives, they're the quarterback, right? They own the account relationship with our customers, but then they leverage the sales specialists when the conversations get deeper- -around these very technical solutions then w e bring in even more technical people, whether they be journey architects or principal architects or engineers. The ramping of all those resources occurs sort of as a steady motion as we see demand increasing quarter-to-quarter. Hey, David, it's Andrew Caprara here. I'll just quickly add, you remember the conversation we had earlier in the year about some of these investments, like our investments in Google Cloud and Cloud services more broadly, a nd those were accelerating growth investment that we approved coming in 2021. As you can imagine, we started hiring at the beginning of the year, and those people were hired as time went on. You know, what we can tell you is that we've got more of them in Q3 than we had in Q2, and more of them in Q2 than Q1, just as we started to ramp those teams on specialty sales and these Cloud specialists that support our sales organization support our customers. No, it's great color t hanks, Andrew. Just last question. Just given the ongoing IT supply chain issues, that seem like they're gonna persist here for probably much of the next year, potentially longer than that, are you hearing from customers that this may be playing a role in their plans to accelerate their Cloud migration plans? Yeah. I'll take that one too, David. Absolutely. I think what you're finding is a few different things. One is when customers are thinking about resiliency coming out of the pandemic, right? A lot of the conversation around resiliency is how do I make sure that I have consistent operations? When you're thinking about having consistent operations and backing up your environment, in the old world, a lot of times that was in the data center. I think that is one of the most fundamental shifts we're seeing now towards Cloud, is that these solutions are almost always being looked at as a public Cloud solution. The reason is twofold. One is the hardware constraints, but secondarily, it just makes more sense. We've all learned our lesson that, you know, when nobody can go to the office, having your backup in an office is probably not the best idea. I think that's one of the trends that we're seeing around the adoption of public Cloud, particularly in more of the SMB and commercial segments where they didn't already have that i think you get up in enterprise, a lot of those sophisticated solutions were already there. The second thing is, you are seeing customers making this decision now, right? They've got hardware in the data center that is coming up for end of life, and they're having to make a decision on whether to try to find new hardware or to start looking at the Cloud and c ertainly the supply chain constraints are forcing the conversation to be had more aggressively about which applications and workloads can be run in a public Cloud, where you've got availability to do that almost instantly. You know, I think that's been a very positive for us with the consumption of public Cloud Solutions. We've seen really, you know, nice growth in our public Cloud services, so professional and managed services as more and more organizations need the help to do that. That's great color. Thanks, Andrew. That's it for me. Your next question will come from Paul Treiber with RBC Capital. Please go ahead. Thanks very much, and good morning. Just wanted to follow up on the question in regards to the supply chain environment. Have you seen, you know, lead times on hardware products push out or increase? You know, what's your sense on, you know, how long that would persist? You know, while it is driving, you know, a long term, I guess, adoption of the Cloud, what is it? Are there any impacts in the short term to, you know, demand spending that you're seeing from customers? Yes. Hey, Paul, it's Bryan. Good question. We definitely have seen, you know. As a reminder, you know 70% of our business is software Cloud services, 30% is hardware. We're not as, we're not immune from it, but we're not as susceptible as some of the other peers out there with more hardware focus. We definitely w ith that said, we definitely did see an impact in Q3, where, you know, lead times were pushed out. It's in the papers almost every day, so I think customers know about it, expect it t hey're trying to plan for it because they still do need devices, and they have become accustomed to expecting longer lead times. Demand is still strong. What has happened is, you know, we've seen kind of shipments being pushed out and w e did have that impact in Q2 as well, where I think on the call we talked about it was, you know, a $2 million impact on GP. In Q3, it would've been similar. That was a bit of a headwind for us in the quarter i f we're in a normal supply chain environment, our GP would've likely been higher by $2 million. With that said, it is all just timing, and you know, those devices supply chain issues will be resolved at one point. I don't have a crystal ball, so I don't know exactly when it'll be. We're not planning for everything to get back to normal in Q4 this year, for example. Everything we're seeing and hearing is that it'll flow through into next year. Have you seen an impact on bundled offerings? or do customers buy things on a bundled basis? If the hardware is delayed, they end up effectively pushing out the software purchase as well. I'll take that one, Paul. It's Andrew. Not really. I think what we're seeing on the customer behavior side is them getting more thoughtful and planning ahead more where they do need the hardware? I think you're seeing them acknowledge that there will be constraints and buying things further ahead than they had probably done in the past just to ensure that they get it around the right timeline. Typically we're not seeing whole projects slow down because typically you know there's movement on a strategic initiative that the customer needs to make, or they've got a compelling event or a deadline, like a need to do something with end of life and end of support hardware, where you know you're taking a big security risk if you just punt that project down the road. It's really not resulting in solutions being delayed i think you're seeing things done maybe, you know, we're putting together these solutions a little more in pieces, but where the, you know, some of the development in public Cloud side might start earlier, whereas we'll plan for implementing the hardware part of that solution, you know, three, four, five months down the road b ut I think customers are starting to get smarter at planning ahead on their hardware purchases. Thanks. That's helpful. Just a last one from me. Could you speak to the services business, in particular utilization and pricing? And I imagine with the demand environment, both utilization is up. Are you able to push through pricing increases there? And then how do you think about capacity in light of the tight labor market? Yeah. It's Vince. Thank you, Paul. You know, in terms of the services business, the demand has been incredibly robust. We have seen a real spike in the demand for both our professional services and our managed services, particularly around managed Cloud and the associated implementation of Cloud Solutions, which affects our professional service engineers who help our customers with that migration. That business is very robust. We're very pleased with our utilization. You know, what we're able to do is we have, you know, Softchoice team members who are members of our team on the professional services team or the managed service team, but we will supplement our professional services with other partners when we see demand spike, and we need to bring in more resources quickly, and then we will slowly ramp our own resources up over time so w e do a mix of our own internal resources supplemented by partners, to meet the customer demand. It's been, it was a good quarter, and it's been a good year in that regard. Okay. Thank you for taking my question. Your next question will be coming from John Shao from National Bank Financial. Please go ahead. Hey, guys. Just have a quick question on the modeling c an I say the $46 million personnel expense to be a normalized run rate, assuming there's no further headcount increase? I know there will be, but I'm just trying to get a sense of the normalized run rate and to what extent should I model? or if I should model any pressure from the wage inflation. Hey, John. Good question. For Q3, our run rate for adjusted cash OpEx, you know, we disclosed $54 million of total adjusted cash OpEx, and that includes the SG&A part, and there was around $1 million of non-recurring professional fees in the SG&A part. Looking at Q3, I would say, you know, on the personnel side, it's a pretty good run rate to use for the personnel for Q4. Okay. On the wage inflation. Oh, sorry o n wage inflation, you know, Vince can speak to this better than me. You know, overall, I think we've done a really good job on kind of retaining our talent, and we haven't seen like huge wage inflation this year. You know, again, looking at the run rate, personnel costs, I'd say, you know, for Q4 and beyond, I wouldn't. I think the run rate in Q3 is pretty reflective. Okay, thanks. I think you mentioned the managed services offering in the press release and also in an earnings call. Could you just give us a bit more color on how we should look at the growth trajectory of that managed service business? In terms of the capability to perform that services, are you looking to just build that capacity in-house or potentially acquire it from outside? Yeah, there's a couple of different parts to that question, John, so I'll try and dissect it a bit. You know, as I said in response to Paul's question, you know, the demand for services, both professional and managed, and I'll focus on managed, has been very strong, particularly our managed Cloud Solutions w e also have other advanced solutions around the data center that will get married with that, and we have advanced solutions around collaboration and things like Office 365 and user helpdesk and other things. Demand has been very strong for managed services, and we are meeting that demand with our own resources so w e increase our team members' size in our managed services business as demand increases, as necessary. We're also getting the benefit of scaling that business a s it grows, you know, hope the GP is growing at a faster rate than the OpEx that we're adding to that business. In terms of the acquisition side of that question, you know, we have nothing material to report on that front w e continue to look for opportunities, where we could add advanced capabilities to our business, particularly around the Cloud, particularly around AWS, GCP and Azure. Those types of acquisitions could be advanced capabilities, where you're getting really advanced people to do data modernization, application modernization, application development, and things of that nature, and you're buying technical talent so t hat could be something we do down the road, and that would be a use of all the cash we generate o bviously, the first thing we're doing is paying down our debt and paying our dividend, but that could be another use of cash somewhere down the road. Okay. Thank you so much for the help and great colors. Thanks. Talk along. Your next question comes from Martin Toner with ATB Capital Markets. Please go ahead. Hi, guys. Thanks for taking the question, and congrats on a good quarter. First question is, given where the growth is, mostly software, is the percentage of your business that one could think of as recurring or near recurring, going up? Absolutely. In the marketing materials from the IPO, we disclose recurring plus recurring revenue. Some of the commentary around that is, I think we took a very conservative approach on how we came to that 55% recurring plus recurring revenue. Software and services are the two biggest drivers of that a s you continue to see our software mix grow, that is a recurring part of our business, and that mix of recurring plus recurring would also grow. That's a strategic focus of our business as well. Great. Next question is on customers. Commercial customers kinda came back with the most ferocity? Can you comment on just the other two customers and where you kinda see them in terms of returning to normal spending levels as we come out of COVID? Yeah. Martin, it's Andrew. I'd say we did see the commercial one come back, as you say, and lead at 28%, but we still saw 20% growth in SMB and 17% in enterprise so w e really saw, you know, great growth across all three of our major customer segments. I'd say, you know, each of them has come back at this point t hey're focused on slightly different things. I think as you're in the lower end of SMB and commercial, you'll see a lot of organizations going through what we talked about earlier, was the resiliency phase, right? They're looking at security t hey're looking at resiliency in their operations. As you talk about some of the larger organizations, what you're seeing is a lot more of the more advanced application work. How do they start to leverage the public Cloud to actually use it for innovation? I had a conversation just the other day with a very senior application owner at a 70,000-person organization. He's got an amazing development team in-house, but they're inexperienced with how to leverage the public Cloud to build an application that's Cloud native, how to secure it, how to govern it, so that the costs don't get out of control, and best practices for how to run that application on a Cloud environment for their customers who need to access it. These are the kinds of services and solutions that we can provide to those kinds of customers in this environment. Overall, you know, great progress across all the segments, slightly different nuances in the kinds of conversations that we're having, but really all centered on how do they start to secure and transform their businesses in this new environment. A lot fewer conversations we're having now about, you know, how do you help us survive? We're really moving into that innovation and growth phase of the conversation. Great. Thank you very much. Last thing. Why did the AE LTM number go down a bit sequentially? Yeah. Martin, it basically, as I said, you know, when COVID hit in March 2020, none of us knew what that was gonna mean for customer demand, w e ended up putting a lot of the investments we intended to make in the business on hold. We just hit the pause button, right? To be judicious until we really got a better understanding as 2020 played out what it meant for customer demand. Part of that was we paused on the ramping of our sales force, and we essentially held our sales force headcount flat through 2020 so y ou know, the average number for 2020, I believe, was 404 AEs, but we actually ended the year with 383 account executives. We saw demand from customers start to increase in Q4 of last year, and that continued through the first three quarters of this year. In the early part of 2021, we made the decision that rather than step on the accelerator and ramping sales headcount, where we were gonna make our investments was on the sales productivity and enablement resources, which are the specialty sellers that work with our AEs and the journey architects that work with our AEs to have these conversations with our customers. We essentially earlier this year made the decision, let's hold sales headcount relatively flat, which we have, and let's put our investments in the support resources that help improve sales force productivity. More recently, given how strong demand has been, we have made the decision to begin ramping our sales force headcount, and so we do expect to end this year higher than we began the year. As we've said, our goal is to add 40 to 50 more AEs by the end of 2022 than we had in 2020. Perfect. How long does it take to ramp AE hiring? Doesn't sound like it takes that long. Not really. We do not have issues in hiring sales or technical support resources 'cause for a number of reasons. You know, we have a great talent acquisition team that is always, you know, in recruiting mode, and we really have that proven blueprint for finding, attracting, hiring, training, developing, and retaining our people. Secondly, we do have a great reputation in the marketplace, as can be attested to many of the awards we've won around Great Place to Work for numerous awards and other awards we won, so we have a fabulous reputation. Because of the investments that we make in our people, that helps us as well with what we would say is team member or employee retention. We do not have major issues or challenges in hiring, and we're very confident in our ability to ramp our sales force and increase our sales force headcount, as well as continue to invest in sales support resources. Okay. Thanks for confirming that. Appreciate it. That's all for me. Okay. Thanks, Martin. Your next question will come from Gavin Fairweather with Cormark. Please go ahead. Oh, hey, good morning. I thought we'd start out on the new AWS agreement. Obviously, you have an existing kind of AWS business that kind of predates this new agreement. You know, you're ramping your technical investments and sales resources kinda tied to AWS. I guess I'm curious, you know, what's changing from the AWS side in terms of marketing programs or leads, and whether you view, you know, this new agreement or partnership, as something which can lead to an acceleration in your AWS growth. Yeah. I'll take that, Gavin. It's Andrew. You know, I think you're right. We've had an AWS practice for six years now, and I think what we've seen is that we've done a nice job there, but really over the last 18 months, the partnership has started to really reinvigorate itself and t hat's through joint alignment between our team and the AWS team. I think as AWS moves more into you know the sweet spot of where we help a lot of organizations get a handle on their IT infrastructure and application owner management and data management, that's the area where it really starts to hit our sweet spot so w e've really started to make some traction over the last 12 months with our AWS business. Now this is an opportunity for us to jointly double down. To your point, this isn't just an investment program, right, to go hire a few more people. This is a real, you know, it's called a Strategic Collaboration Agreement, and it really is a strong agreement between our two organizations that we see a great opportunity to help customers better with this solution. We see it on our side, and obviously, AWS sees it in Softchoice and what we've already done in the market. It will include ramping our delivery and pre-sales organization around AWS so that we can go and serve more customers. But you will also see more joint marketing initiatives and joint collaboration with the AWS team and Softchoice teams going forward. More to come on that in terms of details, but you're thinking about it the right way, that this is a bigger program. This, in a lot of ways, is not the only one w e launched that one a month ago, but we've also been doing similar kinds of efforts with Microsoft over the last couple of years. Obviously, our strength in Microsoft and in Azure, we talked about a lot as we were going through the IPO process. We still remain one of the largest Azure partners in North America. The strength we've got in Canada obviously is- -is top-notch w e've done a lot going jointly to market with Azure. We've really started to get traction with Google over the last 12 months, and I think you can expect more to come there in the coming quarters, now taking that next step with AWS. This really is the next step in cementing us as that true multi-Cloud solution provider and our aspiration of being the preeminent one across these three Clouds in North America. That's great. Just secondly, for me, I'm kinda going back to your prospectus and go public materials i 'm kinda thinking that, you know, the ratio between your AEs and your technical or specialty sales bench was roughly kinda 50/50 i might be a little bit off there. Do you see that ratio kinda changing going forward? Can you provide any detail in terms of the, you know, the change in size of your technical or specialty sales bench? Yeah. Well, what I would tell you is, as we sell more services, we are gonna continue to hire professional services engineers and technical resources. We're gonna do that at the rate at which we can meet the customer demand for these kinds of services. You know, we've talked about adding 40 to 50 more AEs by the end of 2022. I can't tell you. I hope that we add more technical resources than that because that means that our professional services and managed services business is really booming and taking off, as obviously those are utilization-based businesses and t he resource deployment on those is done very methodically and in line with customer demand and w e really are trying to drive that outsized customer demand in our services, particularly around Cloud. I don't have a great answer for you. We don't have a model for that one that can perfectly predict whether that's gonna be one-to-one. But you know, if it's not, it's because we're doing so well on our services business that we just need more and more engineers to serve our customers. Great. That's it for me. Thank you. As a reminder, ladies and gentlemen, should you have a question, please press star followed by the number one. Your next question would be coming from Nick Agostino from Laurentian Bank Securities. Please go ahead. Yes, good morning. I guess a couple questions for me. First, when you look at your business overall, you know, I guess year to date, considering the partner influences, you know, obviously we know Microsoft is a strong partner for you guys. You've mentioned Google, AWS, Azure. But just thinking about all of your IT solutions that you provide, are there any other customers worth or sorry, partners that are worth commenting where you're starting to get more and more wallet share and doing more and more business with them? If that's the case, you know, just the reasons why there might be standouts. Yeah. Hey, Nick. I'll say, obviously, you've covered the ones that there's been a lot of focus on. You know, the other part of our Cloud solution is the hybrid part of the Hybrid Cloud, right? It's not just about the public Cloud hyperscalers w e're also helping customers integrate all of that because we know that pretty much every organization still has an on-premise part of that solution. Within that, I would say we've been very focused on expanding our partnership with VMware as the centerpiece of that solution. Because, you know, some of the VMware Cloud Foundations and Cloud Solutions really act as that conduit for customers to be able to take the applications that they've got currently in a data center and more easily move it w e're starting to see some great success with migrating applications in a simple way with the VMware solution. Really great partnership that we have with VMware as well and w e've been doing some of the similar, you know, joint go-to-market and joint investments in growing our capabilities with VMware, similar to what we've done with the hyperscalers. You know, beyond that, I would say, you know, obviously we've got, you know, hundreds of other partners, but there's probably, you know, the other, the regular other partners that you think about on the software side, you know, the folks like Red Hat, Adobe, and others like that we've got really great strategic relationships with. On the hardware side, certainly we've got, you know, amazing relationships with our friends at Cisco, right? The Cisco solution is an interesting one as they evolve more to a software motion because of the fact that that really moves right into our sweet spot and i think, you know, Cisco's recently talked about, you know, roughly half of their business is moving towards enterprise agreements. They're getting just about half. You know, particularly as you think about what we're great at, we've got Cisco as one of our strongest partners on the hardware side and r eally over the last couple years, the growth that we've seen with Cisco on the collaboration, the security, and the EA and package software-related services from Cisco has been fantastic. We're really excited about the relationship that we've got there and the continued investment in that partnership. Yeah, that's great color. Just one last one for me, just back on the hardware side of things and the whole supply chain issues. Obviously the demand side of the equation, I think, with the supply chain is not going to disappear. I think you guys have already said it's just getting deferred and you know more so into 2022. Question is, are there any concerns that because of those deferrals, are any of your customers maybe sourcing hardware from other competitors where the relationships with those partners might be tighter? Is there any risk of sales loss on the hardware side because of that? I'll leave it there. Thanks. Not at this point. I mean, we're not seeing anybody get any competitor of ours getting you know jumping the queue and getting direct access. I think that would be a very detrimental blow to partnerships from these technology providers who have to handle managing relationships with hundreds of us i f they start prioritizing a couple of partners, that's obviously not gonna be you know in their best interests. I think at this point, we're all facing the same supply chain constraints. Obviously, distribution plays such a role in actually managing the delivery of all of this hardware. At this point, we're not seeing anyone able to jump the queue, and so therefore we're not seeing any shift in customer behavior from one partner to another because of availability. Thank you. There are no further questions at this time. Tim, you can please go ahead. Thanks very much for joining us today. We appreciate the ongoing support for Softchoice, and we look forward to updating you on our next conference call next year. Thanks. Bye. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.