Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Softchoice Q3 2022 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for a question. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded on Thursday, November 9th, 2022. I would now like to turn the conference over to Mr. Tim Foran, Investor Relations. Please go ahead. Thank you, Julie, and good morning everyone. Welcome to Softchoice's Q3 2022 conference call for the period ended September 30th, 2022. A reminder that for purposes of the recording, today is Thursday, November 10th, 2022. I'm joined today by Vince De Palma, Softchoice's President and CEO, Andrew Caprara, COO, and Yota Skederidis, Interim CFO. 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 are 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 U.S. dollars, all amounts discussed today are in U.S. dollars unless otherwise indicated. With that, I will now turn the call over to Vince. Thank you, Tim, and welcome everybody. In today's call, I'll start by providing highlights of the third quarter and an overview of the current operating environment. Andrew will then provide an update on how our go-to-market strategy provides an opportunity for us to provide additional value to customers in the current economic environment. He'll turn it back to me, and I'll provide an update on progress against our growth strategy before turning it to Yota for a deeper dive on our financial performance and outlook. After that, we will open it up to analyst Q&A. I will start on slide four of the presentation for those following online. We recorded strong financial results in the quarter, including another quarter of double-digit growth in gross profit, with the natural operating leverage in our business model, driving adjusted EBITDA margin expansion and offsetting the impact of growth investments we have made over the past year. During the quarter, we returned capital to shareholders through our regular quarterly dividend, and we continued to execute on our share buyback program. In terms of the demand environment for IT solutions, our double-digit organic growth continues to be driven by our software and cloud solutions, notably in our strategic focus areas, including multi-public cloud consumption and SaaS workplace software with our solutions underpinned by cybersecurity solutions. In Q3, software and cloud comprised 87% of the growth in our gross profit as organizations continue to both adapt to hybrid work environments and leverage the cloud. Within our sales channels, customer demand remained strong across the board in the third quarter. We recorded double-digit growth in gross sales and gross profit in each of our SMB, commercial, and enterprise channels. Our people and our insights-based go-to-market strategy continue to drive customer success and expanded relationships. In the third quarter, a combination of strong customer retention and increasing wallet share delivered record revenue retention rate of 116%. Finally, we continued to make solid progress on our growth strategy. The growth investments we have made over the past two years in sales support and technical experts have enabled us to both broaden and deepen our engagements with customers as they navigate an increasingly complex IT environment. In the third quarter, that contributed to a new record gross profit per customer. This growth within our existing customer base was complemented by contribution from another net increase in new customers, which is a positive trend stemming from the ramp in our sales force we have made over the past year. In Q3, we continued to add new account executives who are the frontline sales force that quarterback relationships with existing customers and seek new customers. As these new account executives ramp up the productivity curve, the investments we are making in them in 2022 positions us well for future growth. Additionally, we remain on track to realize the net benefits from Project Monarch, as discussed in detail on past calls. All in all, a very solid third quarter. Turning to slide five, we'll look at our current operating environment. We have experienced sustained demand for our solutions in recent quarters. As it is well known, global macroeconomic conditions have resulted in rising inflation and interest rates, and therefore higher costs. In terms of what that means to us, I'll first note that we have not been impacted significantly by wage increases outside of a few pockets of our business, notably in strategic technical positions. Additionally, price increases by our technology partners do not materially impact our gross profit, as we have the ability to pass through those increases to customers. However, such increases can contribute to higher customer costs, who we all know are already facing higher costs in other areas of their business, as well as uncertainty around a potentially deteriorating economy. As a result, some organizations are responding to the economic uncertainty by looking at ways to cut or avoid costs, including pursuing efficiencies in their IT budgets. Now, that can present near-term pressure on our gross profit and EBITDA margins as some customers seek ways to reduce their spending or avoid costs. However, this also presents an opportunity for Softchoice, which Andrew will address. Andrew, over to you. Great. Thanks, Vince. Good morning, everybody. In terms of the operating environment that Vince described, we believe we can not only mitigate any potential near-term risk, but also treat it as an opportunity to actually increase our value to customers. This is for a few reasons. First, IT environments are very different than they were 15 years ago. We've not had a downturn or recession in the digital era, an era where technology is now embedded in how an organization operates. There's also a different buying process for this technology now, which results in us having what I believe is a much more resilient business model. Think back to 2008, most customers were still buying perpetual software, and they ran their own data centers. In a recession, they just forego upgrading that new version of that software or upgrading their servers. It was lights on only. Now, SaaS licenses and cloud consumption are pervasive, which means that customers must continue to buy those in any environment. They may cut back a bit, but there's now much more spend that can't be cut in software and cloud than there was in the past. Second, companies have been, in recent years, leveraging IT and notably the cloud as a real business driver and not just a cost center. They've been using technology to increase the flexibility, agility, and security of their businesses and deliver digital experiences that their customers and their own people are demanding. However, they're also now seeking new ways to utilize IT to digitally transform portions of their business and realize operational efficiencies in this kind of economy. Third, the current environment provides an opportunity for us to really utilize our differentiated capabilities and our unique insight-driven go-to-market approach, or what we call the Softchoice ROI, to help customers reduce, optimize, and innovate their technology investments. With this approach, we typically lead with software and cloud, for example, by managing large enterprise agreements, but then drive deeper engagement by illustrating our value as a real trusted advisor. That all starts with reducing their costs. We go in and reduce unnecessary spend using our software asset management approach. This is foundational to what we do, and we've built this capability up over 30+ years of leading and winning with software solutions. Enterprise software licensing is evolving faster than ever. With highly integrated applications residing both in the cloud and in their data centers, it's really easy for IT teams to fall behind on the changes that are being announced on an almost daily basis, especially when you think about the fact that they have hundreds of software titles to manage across hundreds or thousands of users. With our enterprise lifecycle management or ELM framework, we help customers get more value from these investments. We eliminate that compliance risk on the contract, and we introduce them to new technology that can even better help them achieve their goals. Our team of experts and our proprietary tools can scan the customer's entire environment, identify cost-saving opportunities, like when they've got overlapping capabilities of two different software titles. Where we help them look at current usage levels of their software to see where there's features that can be saved on because they're just not being used, or where there's areas where we can drive even better adoption because they already own and are paying for features that they should be using. At the end of the day, our customers know that we're sitting on the same side of the table as them, and we're actively looking for ways to save them money. That's what builds the trust to have them assign Softchoice with even more of their technology needs and opens up the opportunity for us to support them with these more transformational services and solutions. that's where our go-to-market shifts to optimizing their overall IT environment. We bring in our team of technical resources to properly implement these modern solutions. We do things such as migrating applications from on-premise data centers to the cloud when they can operate them more effectively or efficiently in that environment. We eliminate disparate collaboration tools used in an environment by consolidating under one provider, which can again, reduce costs and increase efficiency. We could look at implementing virtual desktops to enable easier access in remote work. These are just a few of the solutions that we can bring to our customers. Once we've optimized, then finally, we really focus on innovation and enabling our customers' digital transformation. As I noted, digital transformation cannot only be a revenue driver for companies, but also a way to find efficiency in the back office through automation. For example, it may involve helping design a new hybrid cloud solution that consolidates information and data currently housed in dozens of different physical data centers in one modern solution. Not only would this provide a much more agile platform for their development team to build new customer-facing features, but it would also significantly save on OpEx spend in operating those different environments. In a period of tight budgets, it could provide very significant CapEx cost avoidance if their current data center is nearing end of life. This opportunity to help customers reduce or avoid costs does not reside only with new customers, but notably within our existing customer base, where we already have that seat at the table as a trusted advisor. As we've noted in past calls, our average customer tenure is now almost 10 years. For those customers utilizing our broader set of IT solutions, our logo retention has been almost 100%. As you see on slide six, our revenue retention is now running at 116%. That comes first from our commitment to always doing the right thing for our customers. Saving them money on a contract may have them spend a bit less today, but it pays back in the lifetime of our relationship. Second, from the talent investments that we've made that allows us to bring an amazing team of resources to our customers when they need us to go deeper and deeper into solving their technology and business needs. While none of us knows exactly what's to come in the months ahead, we believe that we have the solutions and the talented people that will be in demand by customers in any macro environment. With that, I'll now turn it back over to Vince for an update on our growth drivers. Okay. Thank you, Andrew. As Andrew notes, the expanded relationships with our existing customers has been key to driving our record gross profit per customer of $66,000 over the LTM period, as noted on slide seven. Our customer base also continued to modestly increase in Q3 following pandemic-driven declines, and is up quite nicely from year-end 2021. In future years, as I have previously noted, our strategy is to drive gross profit growth through a healthy mix of contributions from new customers and expanded relationships with existing customers as it was pre-pandemic. Similarly, from an internal viewpoint, our growth strategy is based on contributions from both an expanded sales force and increased sales force productivity, which we measure as gross profit per account executive. Over the LTM period, we generated gross profit per account executive of $761,000, which represents a 10% increase over the prior LTM period, as can be seen on Slide 8. Over the same period, we had on average 410 account executives, which is about 7% more than the prior LTM period. We ended Q3 with 452 AEs. We have surpassed our hiring target for 2022 already, which was to reach 423-433 by the end of the year. With some natural attrition, I expect the current number will come down a bit, but we are comfortable staying above our target as it positions us well for 2023. This healthy increase in account executives naturally reduced gross profit per account executive on a sequential basis in Q3 as we continue to onboard them. We expect it to increase in future periods as they move up the productivity curve. With that, let me turn the call over to Yota Skederidis. Thank you, Vince, and good morning, everyone. I'll start on slide nine with a look at our top-line gross profit and year-over-year growth. In Q3, overall gross profit increased 16% or by $11 million, driven by more than $9 million of growth in our software and cloud solutions, primarily as a result of higher gross sales volume. In terms of overall business mix, software and cloud represented 65% of our gross profit in Q3 2022 versus 61% in Q3 2021. Excluding the impact of FX fluctuations, gross profit growth would have been approximately 18%. Hardware also contributed to gross profit growth to a lesser extent, increasing by about $3 million due to higher sales volumes, compounded by the impact of multiple enterprise and commercial customers executing on large company-wide hardware refreshes. As we have noted previously, the ongoing supply chain constraints that impacted hardware sales have stabilized. Though we don't foresee our supply constraint backlog reversing in 2022. However, that amount is relatively modest due to the predominance of software and cloud within our mix of business. Finally, services gross profit declined by under $2 million despite growth in sales volumes due to an increase in cost of sales as a result of increased variable compensation costs for delivery resources, compounded by an increase in headcount investments, which are recorded in cost of sales rather than in operating expenses. However, demand for services continued to be very strong in Q3, and we've recently aligned our cost structure so that delivery costs will be more in line with project volumes in the future. We therefore expect gross profit growth to more closely align with sales growth going forward. By sales channel, Q3 growth was fueled by double-digit growth in each of our sales channels. Gross profit in Q3 benefited from a few million in orders we originally anticipated to come through in Q4, including some large orders in the commercial and enterprise channels. As seen on Slide 10, our growth in gross profit was driven by a 28% increase in our gross sales, which reflects the gross amount billed to customers, adjusted for amounts deferred or accrued. Similar to prior periods, growth was driven by our software and cloud solutions. Gross sales growth was higher than gross profit in Q3 due to the mix of solutions sold and mix of customers sold to. However, on an annualized basis, gross sales and gross profit growth are more closely aligned. Over the last 12 months, for example, gross sales increased 18% over the prior LTM period, and gross proit 17%. Turning to slide 11, our double-digit growth in gross profit has enabled us to make growth investments in our sales and technical teams. As noted by Andrew and Vince, these talent investments have contributed to our record gross profit per customer over the last 12 months. The increase in our adjusted cash operating expenses was in line with the projections we provided in our Q2 call and is due to higher personnel costs from the talent investments we have made. However, as can be seen on slide 12, despite these investments, the natural operating leverage within our business drove a 35% increase in adjusted EBITDA in Q3. FX had an immaterial impact on adjusted EBITDA as the reduction in our reported gross profit was essentially matched by a reduction in our adjusted cash operating expenses. Adjusted net income increased 60%, driven by the increase in adjusted EBITDA. Turning to slide 13, adjusted free cash flow over the LTM period was 89% of adjusted EBITDA or approximately $68 million. Over the past year, after cash interest and taxes and certain non-recurring costs, free cash flow was used to initiate and then increase our quarterly dividend to shareholders. Dividends paid equated to approximately 24% of adjusted free cash flow on an LTM basis. Since Q2 2022, we have also used free cash to undertake our ongoing share buyback program, being opportunistic in light of the downturn in the equity markets and lower valuations. In Q3, we repurchased and canceled approximately 645,000 shares under our NCIB, and we continued that in October, repurchasing approximately 218,000 shares. We ended Q3 2022 in strong financial condition with approximately $129 million in available funds from cash on hand and through our $275 million revolving credit facility. Including internally generated cash flows, the company anticipates having significant resources with which to pursue growth opportunities and enhance shareholder return. Net debt increased in Q3 due to timing-related working capital outflows, but that is expected to reduce in Q4 again as we anticipate working capital inflows. Specifically, we ended Q3 with approximately $146 million on our revolver outstanding. Net debt equating to loans and borrowings plus lease liabilities less cash on hand was $164 million at the end of Q3 2022. The quarter-end ratio of net debt to adjusted EBITDA for the trailing twelve months ending September 13th, 2022, was 2.1x compared with 1.3x at June 13th, 2022. However, as I noted, this increase is primarily timing related. Specifically, we recorded non-cash working capital outflow of $61 million in Q3 2022. This was largely the result of the timing between collections on trade receivables, due in part to the Canadian banking holiday on September thirtieth, and payments on trade payables driven by the typical seasonality of our business. Turning to our outlook on slide 14, we reiterated our financial outlook for the fiscal year ending December 31, 2022, based on our results for the nine months ended September 30, 2022, and current expectations. Our guidance was initially provided March 4th, 2022, and revised August 12th, 2022, and assumes an average U.S. dollar to Canadian dollar exchange rate of 0.79 in fiscal 2022. Our outlook on gross profit for fiscal 2022 is for over $320 million in gross profit, assuming the 0.79 exchange rate, equating to greater than 11.5% organic growth over fiscal 2021 on a constant currency basis. While not impacting underlying growth on a constant currency basis, the strengthened U.S. dollar compared to the $0.79 assumed in our guidance, if sustained through the fourth quarter, is anticipated to have a negative impact on our reported gross profit results as approximately 45% of our revenues are generated in Canada. However, as we have natural hedges in place, we expect a similar reduction in operating expenses and therefore anticipate an immaterial impact on adjusted EBITDA as a percentage of gross profit and adjusted free cash flow conversion. For the fourth quarter of 2022, due to the pull forward of some spend in Q3, as I noted, we currently expect upper single-digit growth in gross profit on a constant currency basis and mid- to upper-teen growth in adjusted EBITDA. To sum up, we continue to drive strong organic growth with margin expansion. Our talent investments are positively impacting our customers and our business, and we are confident in our organization's ongoing ability to continue driving sustained, profitable growth. 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 the star followed by the one on your touchtone phone. If you'd like to withdraw your request, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from David Kwan from TD Securities. Please go ahead. Morning. Congratulations on the quarter and the year guidance, which is good to see. I was curious just on the guidance. You know, you comment on it itself in the press release, just related to the impact of the stronger U.S. dollar, such that although I guess in constant currency, gross profit is still expected to be over 11.5% for the year. It sounds like reported growth could be still below that just due to, again, the stronger U.S. dollar. But I'm just wondering the commentary about the gross profit dollars still being north of $320 million. Is that still the case then, I guess, if the U.S. dollar stays at current levels b ecause I think year to date it still represents about a 2% headwind, at least the FX rate you're assuming. Yeah. Hi, David. It's Yota here. I would say that we are not providing guidance on the reported U.S. dollar gross profit. I will say that it will depend on what the FX rate does through the rest of Q4. If the current USD to Canadian rate persists through Q4, then the reported gross profit could fall below $300 million, though we are still anticipating 11.5% growth on a constant currency basis. We're not guiding the reported gross profit at this time because it does depend on our mix of gross profit from Canada versus the U.S., and it does tend to fluctuate quarter-over-quarter. As I said, our growth on a constant currency basis has not changed. We are still expecting 11.5% growth. Thanks for the clarification, Yota. Last quarter, you had seen some headwinds from a handful of enterprise customers kind of significantly declining their spend for company-specific reasons. We saw a nice growth this quarter. I was wondering, have those customers returned or was it kind of more strength from other enterprise customers that drove the growth this quarter? Hey, David, it's Vince. Yeah, you're right. Enterprise had a strong quarter of results in Q3, and that was driven by volume increases as we've seen organizations continue to adapt to their hybrid work environments and pursue opportunities to leverage the cloud. That was compounded in this period, Q3, by multiple enterprise customers as well as some commercial customers executing on large company-wide hardware refreshes. As Yota noted, there was a little bit of a pull forward of a few million dollars of orders that came through in Q3 as opposed to Q4. You're right, we noted on the last earnings call that while demand was strong generally in enterprise customer base in H1, we were impacted by a few handful of customers that were going through corporate changes that impacted their IT spend in the first half of the year. As you're pointing out, we typically generate increased sales from existing customers and have very high customer retention. We do expect to return to growth with those customers over time, and that is what we did see in Q3. There can always be volatility in any given quarter. We typically expect growth across all our sales channels, driven by same-store sales, as it were, with existing customers, but new customer acquisitions. We saw a nice rebound in Q3 and in our enterprise segment. We look forward to ongoing performance in that group going forward. Thanks for that. I guess the last question I've got is, I guess there's been a notable deceleration in the growth of the hyperscalers, I guess most notably AWS and Azure, over the last few quarters here, even on a constant currency basis. I guess workload optimization's been one of the key factors as it relates to that. Have you seen a similar dynamic in your cloud business? It sounds like you're also helping customers with workload optimization. Are you guys getting incentivized by the cloud vendors to do this work? 'Cause obviously, it would be kind of a negative impact on near-term revenue and gross profit. It sounded like from the vendors, Microsoft, Amazon, and the like, that they were actually somewhat compensating both their internal sales but also channel partners for that. Yeah. Hey, David, it's Andrew. I think I'll tackle your last part first, and then I'll come back. The short answer is there absolutely is still service incentives out there in the marketplace for us from the hyperscalers to do this kind of work for customers. I think all of them, to their credit, are taking a very long-term view of customer value here, and they're thinking about the fact that this is a very nice recurring revenue business. Even if you were to optimize 5% or 10% off customer spend right now, it really over the long run pays off, you know, pays off nicely. The return on that investment would be well worth it. We've certainly seen that in our business, and we've really done a lot to advance our capabilities on things like FinOps. We've had a number of engagements around cloud cost optimization and FinOps implementation across North America, even up to some of our biggest enterprise customers with very sophisticated IT teams because they just lack that specific capability to dig into that level of detail. That's part of the investments we made earlier, we talked about earlier this year in our advanced services and digital acceleration capabilities. This is a great opportunity for us. I think the thing we all need to remember about the hyperscaler market is, you know, we're still talking about a market that is tens of billions of dollars, and they're talking about it decelerating into the, you know, 20%s and 30% growth rate range, which is still a pretty fantastic business, particularly when you think about the fact that so many of these customers are still paying on a credit card and going direct and not getting the kind of support that they really need in this kind of environment. For us, we still think there's an unbelievable opportunity in front of us to continue winning new customers in the cloud, helping them optimize if they've already got an environment, sure, but still helping them think through how they can better use this to avoid potential future capital costs on a big data center refresh or to maybe run applications more efficiently in this economy. You know, I don't look at this as a huge concern for us at this point, to be honest. I think the fact that customers are needing to optimize their environment actually plays very well into our go-to-market approach, that I mentioned earlier, and that is our first motion, is that reduce and then optimize and innovate. We think we're well suited to be there to help to support them. That's great. Thanks, Andrew. That's all for me. Your next question comes from Paul Treiber from RBC Capital Markets. Please go ahead. Oh, thanks very much, and good morning. Just in terms of the macro environment and the demand that you're seeing and the moving parts there, you know, how do we think about the magnitude of growth going into 2023? I know obviously you're not giving guidance, but how do we think about it just from a high-level perspective in terms of all the moving parts? Yeah. Hey, Paul, it's Vince. As we noted on the call, we have seen sustained demand for our solutions throughout the course of 2022. I'll say we remain vigilant should the situation change in the future. As Andrew noted, we are seeking to leverage our go-to-market strategy to be opportunistic in the current market environment and assist customers looking to reduce or avoid costs. We'll get more visibility on the success of those efforts through the remainder of this year as end of year IT spend is important to us. We'll enter 2023. As you noted, we're not giving 2023 guidance at this point. We wanna see how this year ends. We wanna see what goes on in the macro environment. I would say in general, over the long term, we remain optimistic as a company about being able to drive sustained double-digit organic growth on our gross profit. That's helpful. Just to dig into a little bit more into your comments on macro and, you know, feedback from customers, have you had any signs, you know, one way or another on customers', you know, willingness to purchase or, you know, just in terms of approvals in regards to, you know, sales cycles or any, you know, deferrals or of purchases or pull forwards of purchases maybe in the past? Yeah. You know, I'd say, Paul, we, you know, in any given customer situation could be very unique, but when you look across the thousands of customers we have, we're not seeing any degradation in demand. Demand remains robust. We're very fortunate that in our SMB, our commercial, and our enterprise businesses all are continuing to grow double digits. You know, but I would say that, you know, let's say the economy gets a little softer and customers look to reduce cost, where are they gonna look, right? They typically would look. Expenses they can defer, which would be maybe hardware purchases and/or deferring some projects that they could hold on for a time being. It's very hard for them to cut back, as Andrew noted, in this environment on their software and their cloud spend. Sure, they can do some things, and we can help them optimize and reduce their spend. But in general, that's a really resilient part of the business. So the shift in the business model, the SaaS and cloud consumption, as Andrew noted, as opposed to perpetual licenses and pure hardware data centers, means software and cloud spend should be more resilient. That, as you know, has been the primary contributor to our growth, and there was strong demand for that in Q3. We did have good demand in hardware in Q3, and as I noted, that was compounded in the period by multiple enterprise customers as well as commercial customers executing our large company-wide software refreshes. Bottom line is we're not seeing anything in terms of customers reducing their desire to drive IT transformation initiatives, or their desire to improve their customer experience, to improve their employee experience. Certainly, they look to reduce cost. As Andrew noted, that's the first part of our go-to-market ROI model. Overall, we remain optimistic about demand in the marketplace. Thanks. That's helpful. Just lastly, in terms of professional services, could you just elaborate on, you know, how you've aligned costs to be more in line with project volumes and revenues? You know, and maybe, you know, why wasn't that the case previously, o r what was different, you know, previously? Yeah. It's Vince again, Paul. We had good demand in our services business, but we have been making investments through the course of the year in our capabilities there. Our costs were a little bit heavier than the demand that we had. Demand was up, but our costs were up higher. Through the course of Q3, we made some minor adjustments in our cost structure. We undertook a small reduction in force in certain non-core areas of our business, as well as within our services division. We've been able to right-size that, and we are more optimistic going forward about the services business net direct contribution being more in line with their gross profit growth. Thank you. I'll pass on. Your next question comes from Divya Goyal from Scotiabank. Please go ahead. Good morning, guys. Good quarter here. Vince, I just wanted to get some color on your comment around the pass-through of the wage inflation in terms of the client when you're billing the client. I was wondering, how sustainable is that given the sort of recessionary trends out there, and when do you expect to start seeing some sort of gaps or pushbacks getting implemented on that? Hey, Divya. I would say, as we've noted on this call and past calls, we watch this very closely in terms of what kind of pressure we're seeing on wages, because that does represent the biggest part of our cost structure. We have not seen a real increase in that aspect of our business. There are certain pockets, as I've noted on this call and past calls, particularly in some of the more advanced technical areas, where we've seen some modest wage inflation. But when you look at the company overall across our 2,000+ team members, we're not seeing anything that is outside of sort of normal merit increases and normal salary adjustments as a result of promotion. We're not seeing that. Second aspect of it, as Andrew noted, is that, you know, if a technology partner increases the cost of their software solution or their hardware solution, we pass that through to our customers. It would increase our gross sales, and it would modestly increase our gross profit. We pass that along to customers. It doesn't affect our gross profit yield, typically. Now the implications of that is customers are saying, "Hmm, my costs are going up. I have a certain IT budget. Cost went up. How do I manage within my IT budget?" That's when we initiate on an ongoing basis our enterprise lifecycle management solution to help customers reduce costs, reduce unnecessary spend, eliminate redundancies, reduce licenses where maybe certain features aren't being used. We're not seeing any impact materially on our wage, overall wage cost structure, and we're not seeing any increase in prices affecting demand in any serious way. That's a very good color. Thank you for that. I just wanted to get some additional color on the increase in the AE count, and you've obviously talked about your increase in AEs and reduction in certain areas as well. 452 AEs at the time when, you know, there are recessionary trends, and I understand that the software and cloud is seeing an uptake, but with hardware and services obviously slightly getting impacted. Are your new AEs helping you expand in newer markets or newer industries? And what are the material benefits that you see with that level of AE increase given the macroeconomic situation out there? I gotta hand it to our team, doing an amazing job on both retaining our people and attracting new talent to Softchoice. We hoped, as you know, to be somewhere between 423 and 433 AEs by the end of the year. I think we're at 424 at the end of Q2, and here we sit at 452 at the end of Q3. We've done an amazing job of talent retention, an amazing job of talent acquisition, which is a real testament to the leadership we have in this company and this great culture we have here. As I mentioned on the call, we would expect that 452 to naturally come down through the course of the remaining month and a half of the year. Of course, that 452 is a September thirtieth number, so through the remaining three months of the year. We're very comfortable operating above that guidance, even the upper end of the guidance we gave, which was 433. I don't know exactly where we'll end this year, but my guess is we'll end above the upper end of that guidance. The great news about that is by hiring ahead of the curve, those people have more time to ramp. If we hired and got up to 452 by September 30th, that gives our new people more time to ramp, and that should bode well for 2023. We're very comfortable operating at this higher level of AEs. Of course, you know, you're pointing out if there's, you know, economic uncertainty, we're not managing the business assuming there's a recession gonna be hitting. If something happened in the economy, a soft landing or a hard landing, we have natural operating levers in this business where we can pause on our hiring if need be, very similar to what we did when the global pandemic hit in March of 2020, where we basically pared back on hiring and held our head count relatively flat through the course of 2020. That's not where we are today. We see robust demand. We're ramping our sales force, we're ramping our technical experts, and we're very excited about the future. If I could add. You know, Divya, the thing I'd add to that conversation is that we are seeing an acceleration in our account growth, which is an important part of this equation as well, because despite what happens in the environment, we think our go-to-market model is well suited to help any of these customers. We're still talking about a $300-ish billion a year industry right now. As long as we continue to grow the customer base, and we're sitting at 4,700 at the end of the quarter, and that's going up, and that's across 450 AEs. You can do the math, it's around 10 per. Those are 10 customers that we could really serve deeply by having these AEs focused on them. There's another few thousand customers a year that we serve every year that just don't meet the threshold of materiality of spend that they would show up on this chart. You know, we have eight or so 1,000 opportunities in customers who do business with Softchoice to help them reduce, optimize, and innovate their spend in this environment. As long as we continue to grow the account base, and that's often driven by the reach of having more AEs, we think the potential is there for this to really pay off nicely for us. That's very helpful. I'll pass the line. Thanks, guys. Your next question comes from John Shao from National Bank. Please go ahead. Thanks, good morning. Congratulations on the strong quarter. I just wanted to revisit the macro here and how it impacts the spending. I understand overall spending right now is still strong, but if I look at your customer by sales channel, you know, SMBs, commercial, and enterprise, do you think they're gonna have a different spending pattern in the new year? Hey, John. I wish I had a perfect crystal ball. No one does. We've seen robust demand among SMB, commercial, and enterprise. Interesting, but if you go back to March of 2020 when the pandemic hit and there was that mad scramble in March, April, and May for everyone to take their workforces remote and make sure they had the proper collaboration tools and hardware so their workforce could work remotely. After that was done, you know, demand lessened to a certain extent. We actually thought back then that SMB would be hit the hardest, more so than commercial and more so than enterprise customers. Enterprise customers having greater wherewithal in terms of their capital structure and their operating ability. We didn't see that back in 2020. We were predicting a real cutback in spending on SMB customers in 2020 due to the global pandemic once they took their workforces remote. Lo and behold, our crystal ball was a little foggy, and we didn't get that right. SMB customer demand certainly wasn't as strong as it was pre-pandemic, but it didn't get as weak as we would have anticipated it to be. At this point, given everything we've seen through the course of the first three quarters of this year with strong demand across all three segments, SMB, commercial, and enterprise, we're not expecting anything different through the remainder of this year or into 2023. Again, you know, if a recession occurs, whether that be a soft landing or, God forbid, a hard landing, then, you know, time will tell. It's really hard to predict how that will impact demand specifically by each and every customer segment. Okay, thanks. That's great color. In terms of the supply chain, do you think the issue is largely behind us, and we're gonna see continued improvement of Q3 and eventually the issue to normalize by mid-2023? Is that a right understanding? Hi, it's Yota. I would say that our constraints have stabilized. They haven't gotten worse, and they haven't gotten better. We are also not anticipating for that backlog to subside in 2022. It'll probably carry on into early 2023. Okay. That sounds good. I would say that it is modest. You know, there is a modest backlog. Okay, sounds good. I'll pass along. Thanks. Thanks. Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the one. Your next question comes from Martin Toner from ATB Capital. Please go ahead. Hello, everyone. Thanks for taking my question. Apologies, I was on another call, so if these questions have been addressed, I apologize. Can you talk a little bit to how currency does not positively or does not negatively impact adjusted EBITDA? Is that purely a function of where your people are in general, or are there other elements involved there? And then, also, can you just touch on the ability to take price? Like, what percentage of your business do you think you have the ability to take price on in response to your costs going up as opposed to seeing vendors push through cost increases on you? Hi. Sure, I could take your first question. It's Yota regarding the FX impact on our business. We essentially view ourselves as naturally hedged. Any negative impact we see on our top line and gross profit is essentially offset by benefits that we see in FX on our operating expenses. That's due to the fact that a lot of our costs, a lot of our people, are here in Canada. From an adjusted EBITDA perspective, we would expect a modest, if anything, uptick to adjusted EBITDA due to FX. That would be true if the Canadian dollar went the other way, right? You know, we're at 0,79 was our assumption through all our guidance. If it strengthened, you know, you'd see the same thing, right? You'd see we'd get a lift on GP, but adjusted EBITDA would be hedged because our OpEx would go up. It's not material impact on adjusted EBITDA when the FX occurs, but it does obviously affect our GP growth rate, as Yota pointed out. The second part of your question was we did address it earlier, but I'll try to hit the highlights of it. The ability to take price and the percent of our business that can take price on. Basically, if our technology partners raise the price of their software solution or their hardware solution or whatever, we are able to pass that along to our customers, period, end of statement. Our gross sales would go up, and our GP would go up accordingly. It does, of course, as we pointed out during the earnings call in the subsequent questions, it does increase the cost to the customer, so they start to get sensitive, right? Because they have a IT budget for the year, and if costs go up, they're gonna have constraints. That could cause them to wanna reduce spend. The great news for us, Andrew described our go-to-market approach, which we call ROI, reduce, optimize, innovate. The first motion we do with customers is always to help them reduce unnecessary spend. In a period like this, where IT executives are looking to find savings in their budget, we just put even greater emphasis on the R part of our ROI model. We are certainly helping customers with the optimization and innovation part of it, of their journey as well. We have a great ability here to help them find savings by eliminating redundancies, by eliminating features that aren't being used, to consolidate data centers into one modern solution. There's a whole bunch of ways we help customers reduce cost, which really earns us tremendous trust and credibility with our clients and positions us well for more of the innovative types of projects we would do with our customers. Thanks so much, Vince. You had a nice beat on gross profit and EBITDA relative to consensus. Just wondering why you didn't take guidance up. Yeah. As we mentioned on the call, we did see a few million dollars of orders push forward into Q3, and that we benefited from that in Q3. We feel comfortable with what our guidance levels are at this time with 11.5% constant currency GP growth. I would add to that, Martin, that, you know, Q4 is a much bigger quarter. It's the biggest quarter of the year for us, given year-end. Q3 is probably the third biggest quarter. You know, Q4 is our biggest quarter. Q2 is our second biggest quarter, followed by Q3 and Q1. You know, we feel it's prudent to maintain guidance, given the current macroeconomic environment and despite the very strong Q3 that we had. That sounds like it makes sense. Thank you. Now last quarter, you talked about investing into the opportunity that you see in front of you, and that's why margin guidance was reduced a little bit. Is that still the plan? You're well ahead on AEs for the year. Are you gonna keep pressing from here? Yeah. There's both the AE side of things and then the technical resources. We are very well positioned on our AE headcount, ending Q3 at 452 AEs. That, as I pointed out, will probably modestly come down through the remaining months of the year. We're anticipating we will end the year probably above the upper end of the guidance we gave, which was 433 AEs. We're very comfortable doing that because it positions us well for 2023. We've been ramping technical headcount as well to work with our account executives in driving the discussions on these more advanced solutions. We have been investing in our business, in our people, in our talent, in our capabilities. We will continue to do so 'cause we're in this for the long haul, and we're looking to drive consistent double-digit organic growth in the years in front of us, and we do that by ramping our sales force and ramping the technical talent that supports our sellers. Well, that's it for me. Thank you very much. Presenters, there are no further questions at this time. Please proceed. Well, that's great. Thank you everybody for joining the call, and we look forward to talking to you again in the March timeframe when we'll be re-reviewing our Q4 and full year 2022 results. Have a great rest of your day and a great weekend, everybody. Thank you. Ladies and gentlemen, this concludes your conference call for today. 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