Good day, ladies and gentlemen, welcome to the Agilysys Fiscal 2024 First Quarter Conference Call. As a reminder, today's conference may be recorded. I would now like to turn the conference over to Jessica Hennessy, Senior Director of Corporate Strategy and Investor Relations at Agilysys. You may begin. Thank you, Lisa, and good afternoon, everybody. Thank you for joining the Agilysys Fiscal 2024 First Quarter Conference Call. We will get started in just a minute with management's comments, but before doing so, let me read the Safe Harbor language. Some statements made on today's call will be predictive and are intended to be made as forward-looking within the Safe Harbor protections of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial guidance. Although the company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause results to differ materially. Important factors that could cause actual results to vary materially from these forward-looking statements include the effects of global economic factors on our business, our ability to increase profitability, our ability to improve services, implementation efficiencies, and the risks set forth in the company's reports on Form 10-K and 10-Q, and other reports filed with the Securities and Exchange Commission. As a reminder, any references to record, financial, and business levels during this call refer only to the time period after Agilysys made the transformation to an entirely hospitality-focused software solutions company in fiscal year 2014. With that, I'd now like to turn the call over to Mr. Ramesh Srinivasan, President and CEO of Agilysys. Ramesh, please go ahead. Thank you, Jess. Good evening. Welcome to our fiscal 2024 first quarter earnings call. Joining Jess and me on the call today is Dave Wood, CFO, and we are at the new Alpharetta, Atlanta headquarters we moved into a couple of weeks ago. As has become the norm during our last several earnings calls, we will cover sales first before moving on to revenue and other details. All sales numbers discussed in this and other calls are measured in annual contract value terms. The current stretch of increased sales success, which started around August last year, has kept up its momentum during the past few months as well. The state-of-the-art cloud-native technology, breadth and depth of the functionality feature sets we have built in the end-to-end hospitality-focused ecosystem of software solutions, are making our sales value propositions compelling for prospective customers. Fiscal 2024 first quarter sales was the highest we have seen during any April through June period. This was our best sales quarter in APAC in about three and a half years, That was the top highlight of the quarter with respect to selling success. It was also another excellent sales quarter for the US HRC, hotels, resorts, and cruise ships sales team. Other sales verticals also kept up their recent progress, rounding out another excellent sales quarter. With respect to sales across product categories, software, subscription, and services sales during Q1 were respectively 46% and 28 higher than the comparable quarter last fiscal year. The other highlight was services implementation efficiency, picking up during the quarter to match the pace of sales success, resulting in total backlog across product, services, and recurring revenue, decreasing slightly, which is a positive for the business. Services backlog by itself remained flat from the sequentially preceding Q4 fiscal 2023 quarter end, while product and recurring revenue backlog reduced slightly, thanks to the improved pace of project delivery during the quarter. Total backlog across product, services, and recurring revenue as of June 30th, at the end of Q1, was at 96% of record levels, reached at the end of the sequentially previous quarter, and 46% higher than at the end of Q1 last fiscal year. With respect to sales deals won during Q1 fiscal 2024, April to June, we added 20 new customers, 18 of whom signed full subscription SaaS agreements. There was an average of about three products or modules licensed per new customer during the quarter. We also added 74 new properties, which did not have any of our products before, but the parent company was already our customer. Of the 94 new properties added during the quarter across new and current customers, about 85% were either partially or fully subscription software license-based. In addition, there were 91 instances of selling at least one additional product to properties which already had one or more of our other products. These 91 new product sales instances included a total of 199 new products sold. Our quota-carrying sales team strength has increased steadily over the past couple of years. While the average Agilysys tenure of sales personnel is about seven and a half years across the entire team, close to half the team members have been with us for only two and a half years or less. The value of sales deals closed, one, by them, represented only 6% of total sales during full fiscal year 2023, and it's already three times higher at 19% through the first quarter of fiscal 2024. During the first 3 months of fiscal 2024, the total value of deals closed by this half of the team, who have been with us for 2 and a half years or less, is already at about 72% of the total value of sales closed by this team during all of fiscal 2023. Sales productivity is another growing strength in our business now. On to revenue. Fiscal 2024 Q1 revenue of $56.1 million was a record for the sixth consecutive quarter, and 18% higher than the comparable prior year quarter. This was a best-ever record quarter for all four major revenue categories: subscription revenue, overall recurring revenue, product, and services revenue. We are off to a good start this fiscal year and have put ourselves in a good position to achieve our full fiscal year revenue and other annual goals. Recurring revenue during Q1 FY 2024 grew to $32.1 million, about 16% higher year-over-year, driven by a 27.4% increase in subscription revenue. Subscription revenue constituted 52.2% of total recurring revenue. Subscription revenue from add-on experience enhancer software modules, most of which were developed in our R&D labs during the past few years, constituted 17% of total subscription revenue this quarter, compared to 15% during Q1 last year. Our ability to provide end-to-end solutions continues to be a significant competitive strength, keeping sales win-loss ratio at impressive high levels. One-time revenue, consisting of product and services revenue, added up to $23.9 million, close to 21% higher than the comparable prior year quarter. Services revenue was $11.2 million, the first time we have crossed the $11 million mark during a quarter, 27.7% higher than Q1 last year. Many of our recently hired services personnel were in a ramp-up mode during the quarter, causing services margins to be lower than the sequentially preceding Q4 fiscal 2023 quarter. We continue to expect services margins for full fiscal year 2024 to be around 25%, with higher margins expected during the second half of the year. Services implementations increasing in volume and efficiency was another good sign of improving business momentum and has helped our increased confidence in the annual revenue guidance provided. Given the extent of reengineering efforts, new software modules development, product integration initiatives completed, and the dramatic improvements in product innovation undertaken during the last few years, virtually all the implementations we are carrying out in the field today involve software developed, most of them in-house, during the past few years. That is both a strength and a challenge. The most encouraging aspect of this April to June quarter was all these products and modules becoming progressively easier to implement and support and settling down well in the field. That paves the way for growing improvements in our future ability to scale up and keep improving customer satisfaction levels. That was true this quarter, especially on the PMS side of our business, that's property management systems. We are now involved in more property management systems, PMS sales opportunities, than ever before, and are encouraged by the PMS credibility we are building with prospective customers. Our competitive positioning against the major, very well-established PMS providers is far better today than it was a year ago. We expect core PMS products, along with all the add-on experience enhancer PMS software modules we have integrated the core products with, to make increasingly bigger contributions to our short- and long-term growth. Adjusted EBITDA for the quarter was $6.3 million and 11.2% of revenue, slightly ahead of our expectations, but still the lowest EBITDA of revenue percentage during a quarter in about three years. As discussed during the last couple of earnings calls, this decline in profitability was caused by recent increases in cost investments in preparation for major business growth opportunities we are making good progress with, along with the fact that the first half of each fiscal year tends to be more challenging for us with respect to costs and cash management. The timing of incentive bonus payments, trade shows, professional fees, and several other cash and cost elements, and incoming annual maintenance payments, the majority of which tend to come in during the second half of the fiscal year, makes the first half relatively more challenging for us for cash management and profitability. Free cash flow during the past couple of quarters have been affected by increased CapEx pertaining to our move into new offices in our 2 main U.S. locations, Atlanta and Las Vegas, and the fact our India Development Center is also in the process of moving into a single building. We are currently distributed across multiple buildings, which are within 1 world-class campus in Chennai, but are not contiguous. Profitability during the next sequential quarter, Q2 FY 2024, will also remain compressed due to many of the recent cost increases now becoming applicable for the entire quarter. We expect profitability to then return to our normal previous levels during the second half of the fiscal year. We continue to expect EBITDA by revenue percentage to be around 13% for full fiscal year 2024, and expect the Q4 exit rate percentage to be higher than the corresponding prior year's Q4 exit. As during previous fiscal years, we expect free cash flow to approximate to Adjusted EBITDA minus capital expenditures on an annual basis, with the unfavorable first half being compensated by the second half of the fiscal year. With that, let me hand the call over to Dave for more color on the financial and other business details. Thank you, Ramesh. Taking a look at our financial results, beginning with the income statement. First quarter FY 2024 revenue was a quarterly record $56.1 million, an 18% increase from total net revenue of $47.5 million in the comparable prior year period. All three product lines increased compared to the prior year period, with product revenue up 15.7% and professional services up 27.7% due to a strong sales quarter, with sales up 21% over Q1 FY 2023. Recurring revenue was also up 15.9%, with subscription up 27.4% over the prior year period. The backlog remains strong and on track for the FY 2024 plan. Q1 FY 2024 exit total backlog across product, recurring revenue and services decreased slightly as we deployed more products and started to implement some of our larger projects. The total backlog remained 46% higher than a year ago when comparing Q1 FY 2023 exit levels. Product revenue increased 15.7% over the prior fiscal year to a record $12.8 million. At our current sales levels, $12.8 million in Q1 FY 2024 product revenue should be the high mark for the year. We expect product revenue to level out and remain around $12 million per quarter for the remainder of the year. Professional services increased 27.7% over the comparable prior fiscal year quarter to a record $11.2 million. We are also pleased to see our professional services backlog remain about the same as the last sequential quarter exit, as we ramped up the resource strength in the services team and the pace of deployment stayed in sync with sales velocity during the quarter. We expect professional services revenue to continue to increase sequentially through the year and should grow north of 30% for the full fiscal year. Total recurring revenue represented 57.3% of total net revenue for the fiscal first quarter, compared to 58.4% of total net revenue in the first quarter of fiscal 2023. Recurring revenue, as a percentage of total revenue, remained around the same level, despite a 21% increase in one-time revenue. Like we said on the last call, we expect FY 2024 recurring revenue as a total percentage of revenue, to remain the same or slightly decrease as we perform professional services for larger customers prior to realizing corresponding subscription revenue growth in subsequent fiscal years. Subscription revenue grew at 27.4% for the first quarter of fiscal 2024. Subscription revenue now comprises over 50% of total recurring revenue at 52.2%, compared to 47.4% of total recurring revenue in the first quarter of fiscal 2023. Subscription revenue increased sequentially by $0.9 million and in line with our FY 2024 plan. Subscription sales and backlog levels remain comfortably in line with our FY 2024 plans. We expect subscription revenue to continue to increase between $0.9 million and $1.2 million sequentially through the year, depending on timing of go lives in any given quarter. Moving down the income statement. Gross profit was $33.1 million, compared to $28.5 million in the first quarter of fiscal 2023. Gross profit margin was 59%, compared to 60% in the first quarter of fiscal 2023. As expected, gross margin percentage will remain lower in the first half of the year as we continue to ramp up our services team. The second half gross margin should return to the low 60% range. Combined, the three main operating expense line items, product development, sales and marketing, and general and administrative expenses, excluding stock-based compensation, were 47.8% of revenue, compared to 46% of revenue in the prior year quarter. Product development range remained about the same at 20.9%, compared to 21.1% of revenue in the prior fiscal year first quarter. General and administrative expenses have remained about the same as well, from 14% to 14.3% of revenue. Sales and marketing have increased from 10.8% of revenue to 12.7%, mostly due to the increased number of quota-carrying sales reps and timing of trade shows and other expenses, which tend to be higher during the first half of the year. Operating income for the first quarter of $1 million, net income of $1.1 million, and gain per diluted share of $0.04 were all less than the prior year first quarter gain of $3 million, $2.6 million, and $0.10. Adjusted net income, normalizing for certain non-cash and non-recurring charges of $4.6 million, was less than adjusted net income of $5.2 million in the prior year first quarter, and adjusted diluted earnings per share of $0.18 was less than $0.21 reported in the prior year period. Fiscal 2024 first quarter Adjusted EBITDA was $6.3 million, compared to $6.7 million in the year ago quarter. Adjusted EBITDA in Q1 FY 2024 was 11.2% of revenue. Profitability for the quarter was slightly better than the previous guidance of high single digits, largely due to higher than expected Q1 revenue performance. Profitability levels remain on track for our FY 2024 guidance of Adjusted EBITDA as a percentage of revenue of 13%. Moving to the balance sheet and cash flow statement. Cash and marketable securities as of June 30, 2023, was $107.1 million, compared to $112.8 million on March 31, 2023. We remain comfortable with our current levels of cash. Free cash flow in the quarter was a loss of $3 million, compared to breakeven in the prior year quarter. For the year, we still believe Adjusted EBITDA, less CapEx, is a good proxy for free cash flow. Q1 free cash flow was negative due to working capital adjustments, which are typical in the first half of the year. For fiscal year 2024, we remain comfortably in our expected revenue range of $230 million-$235 million. In closing, we are pleased with the strong start to the fiscal year and remain on plan for fiscal year 2024. With that, I will now turn the call back over to Ramesh. Thank you, Dave. In summary, we are pleased with the Q1, April to June quarter results, which have given us an excellent start towards reaching our fiscal 2024 financial and other targets. Across several measures, including sales success measured in annual contract value terms, this is the best start we have enjoyed to a fiscal year. While selling success across our traditional strongholds, like gaming casinos and food service management, performed well during the quarter, we were particularly pleased to see APAC sales having a good sales quarter, and sales in the U.S. hotels, resorts, and cruise ships vertically, where our market shares are not great currently, continue its excellent progress. All those were increasing aspects of business during Q1 FY 2024, probably the best news was the improvement in services implementations efficiency, which is a good indicator that the recently created products are settling down well in the field, and our transformation to a cloud subscription-based business unit built on solid, state-of-the-art technology-based solutions, is making great progress. This kind of major transition of an organization of our size is not an easy task, and we continue to make excellent progress while managing well the balance between continuing good short-term results and setting things up well for the medium and long term. We are not sure if the so-called J-curve pertaining to such transformations can be managed any better than this. We are confident the profitability dips in this quarter, as we do the needful and make the necessary cost investments to ensure we take advantage of the significant growth opportunities currently in our grasp, is temporary and should last at a little less than this level, perhaps, for only one more quarter. We are being included now in an increasing number of RFP processes, especially property management system, PMS RFPs, and are currently in the midst of several major exciting sales opportunities across both PMS and POS. From our vantage point, the pace of technology investment decisions and intent to move legacy applications to the cloud remain at a healthy pace in this industry, with no sign of any notable slowdown. The momentum that started around August of last year in selling success has continued unabated, regardless of the uncertainties seen in the macroeconomic headlines. Backlog levels across products, recurring revenue, and services are at near record levels. All that adds up to our continuing confidence in the fiscal 2024 guidance levels provided across subscription revenue growth, overall revenue range, and profitability. The overall business is in excellent shape and well positioned for all-around progress and growth. With that, Lisa, let's open up the call for questions. Thank you. Thank you. At this time, if you would like to ask a question, please press star one one on your telephone. One moment while we compile the Q&A roster, and as well, please state your name to be announced before you proceed with your question. One moment, please. Our first question will be coming from Matt VanVliet of BTIG. Your line is open. Thank you. Good afternoon. Appreciate you taking the question. Ramesh, wanted to maybe dig in a little bit more and see if you could offer a little bit more commentary, around the comment that you made around the especially the PMS side of the pipeline, from a sales activity perspective. You know, are you being able to pursue, or are you involved in, you know, some larger deals there that might include, you know, more standardization across an entire hotel chain, for instance, or things of that nature? Maybe just help us understand kind of what's building through that PMS pipeline and how you're going to approach it over the next several quarters? Yes, Matt. Overall, not only PMS, Matt, across POS, point of sale as well, there are several significant sizable deals that are cooking and where we are making great progress with, but need not necessarily equate to hotel chains all the time, Matt. There are many large multi-property, multi-site opportunities across the landscape of hospitality, not necessarily always in hotel chains, and several of them are progressing well for us. We are very encouraged by the number of larger sized RFPs that we are currently getting included in, especially on the PMS side. The only correction I would make, Matt, is please don't equate them always to hotel chains. There are several large opportunities building up even outside of the hotel chains, and they're all multi-property across multiple sites. Okay. Very helpful. I appreciate that. On the professional services team, wonder if you could give us a little more detail in terms of the amount of headcount added during the quarter, potentially, you know, more open recs that you might have, or how much hiring you're anticipating the rest of the year, as the backlog continues to be high, but good to hear that you're sort of keeping up on the implementation side, this quarter. you know, I think a lot of us wanna see, you know, just a little bit more capacity potentially as you continue to have success on the sales side. Yes, Matt. As far as services is concerned, it's a profit center. In terms of managing headcount, profit centers are always easier to manage or easier for decision-making compared to cost centers. Because cost centers, you're always worried about what is the right level of cost to support the kind of revenue growth we want. When you look at profit centers, it's quite easy, right? As the profits go up, as there is more work, you keep hiring. To answer your question on services, and without getting into the exact headcount numbers, when we started the fiscal year, around the March, April timeframe, we had a target that we needed to hire before June in order to make sure that we have the headcount necessary for the financial plan we had, and that recruitment has gone well. We are pretty much there, give or take 2 employees. The target that we started with for hiring in services, we've done a good job of doing that hiring, and we are pretty much there, almost to the number. We are happy with our services strength now. Now, we didn't realize the full potential of that because there is always a ramp-up period involved when the services person will become more familiar with our products, with the integration steps required and all that. That part of it has gone well. Now, as far as how it will go for the rest of the fiscal year, it just depends on how our sales success works out. Does it go according to plan? Does it go better than planned? If it goes better than planned, then we will do the appropriate hiring and services. Services hiring is not a complex decision-making process, Matt. The short answer is, whatever we planned for at the beginning of the fiscal year, we are there now. We are almost exactly where we wanted to be end of June. How much more hiring we do, it just depends on how our sales plan works out. If we feel that we are going ahead of plan, we will continue hiring more into that team. It's a reasonable assumption, Matt, that I expect the services team to be significantly higher at the end of this fiscal year than it is today. If I could squeeze one last more in. On the Marriott deal, kind of build out of that project, maybe any updates on additional milestones from either the product development side or the staffing side that might be helpful just to make sure that, you know, that continues to progress and you're doing everything from your end that you can. Thank you. Yeah, sure. Thank you, Matt. Starting from the last part of that question, the hiring has gone well. As far as services is concerned, we are pretty much at the strength we needed to be with respect to the services team. As far as the R&D teams are concerned, where we were the product development teams, where we were adding resources, we are just about there. We are now in the last 10% or so of the hiring we needed to do for that. That's gone more or less according to plan. If anything, slightly behind plan as far as product development hiring is concerned. We are more or less there. We are now doing the last 10% or so of that hiring. Hiring has gone well. With respect to the deliveries, they have gone well. Our portion of the deliveries, we are more or less in range, give or take a few weeks, and we are a critical requirement for the overall Marriott project, but we are not on the critical path, if you know what I mean. Our deliverables are going, you know, as according to plan. There's always a few weeks difference between the plan and reality, but there's no concern there. The project, there's no further update on it, and everything is moving along as mentioned before, and there's no change in that. All the deliverables so far have worked out reasonably well. The one thing to note, Matt, is many of the enhancements to the product, since it's a cloud-native product and since everything, all the additional enhancements are being built within the product, it is not a customization of the product. Many of the enhancements for Marriott is already in production, that can be used by other customers if they require it. Overall, the short summary is going according to plan, give or take a few weeks. We are not on the critical path. There are much bigger things that have to happen in the project within Marriott. Far, all good. No further updates, and everything is going according to plan. All right. Great to hear. Thanks for the answers. Appreciate it. Thank you, Matt. Thank you. One moment while we prepare for our next question. Our next question will be coming from Brian Schwartz of Oppenheimer. Your line is open. Hi, thanks for taking my questions. Ramesh, you mentioned in the introductory comments that you had a record sales quarter. I think your commentary suggested that this was in both upselling as well as landing with more products with the new logos. You know, my question is: Are you doing anything different with the go-to-market to make this happen, or is this mostly just a strengthening of the end-market demand? Yeah. Hi, Brian. This was a sales record, Brian, for the April through June quarter. This is the best Q1 quarter that we have ever had in sales. That was an excellent sales quarter for us. Like it always tends to happen in our sales, the sales success came from both current customers and from new customers. Of course, the new opportunities we divide into 3 parts. One is brand new customers who have never used our product before. One is new sites, which we have, these are current customers, but that particular property has not seen our product before. Of course, a big part of it is new product, which is a current property, has a product, and now they are buying more products from us. That's how we divide it. This Q1 sales success was almost equally divided between those two. We had excellent success with new products, new properties, and new customers. Our deal size for new customers is among the highest levels it's been at, and a lot of current customers also expanded their sales business with us. It was a combination of all of that, which is how it tends to be for us, Brian. Our current customers are so happy that we have invested and innovated and done so much with our products, so they continue to invest more and more with us, which is great for us because obviously, there, the sales acquisition costs are very low. New customers, especially the bigger, the sizable opportunities, are increasingly more and more last year and this year, so that is also increasing. Now, in terms of go-to-market, we have expanded our sales. The last 15 months have been excellent for us as far as marketing is concerned. In fact, digital marketing, in terms of greater reach out to prospective customers, it cannot be any better than what we have done in the last 15 months, especially compared to our past. The marketing activities have gone well. We are participating more in trade shows, which tends to be one of the best mechanisms where, by which new customers get in touch with us. Also, we have expanded our sales force, you know, which is a major driver for us. Like, the data that I gave you, during the prepared remarks, if you divide our sales force into two halves, Brian, the top half consists of veterans who've been with us for a long time, then the second half consists of people who have been with us for a maximum of two and a half years. The second half only contributed 6% of sales all of last fiscal year, so far they are already contributing close to 20%, 19%-20%. When you take the second half of the sales team, whatever total sales they did all of last year, they've already done close to 75% of that already in the first three months, 72% or so. The second half of our sales team is also beginning to contribute a lot, and that has a lot to do with the fact that these new products that the industry really needs is now settling down in the field, which means we have more and more reference customers. The customer satisfaction levels are increasing, and for us, there is nothing greater go-to-market than having more referenceable customers. All the momentum across marketing and increased sales team, the second half of the sales team contributing a lot more now, which means sales productivity is picking up. All the new products we developed in the last 3, 4 years are settling well in the field, so we are getting more references from there. All across, the momentum is really increasing well, Brian. Thank you, Ramesh. If I could just dig into again, how you think about pricing in the market. You know, you've had commentaries, it sounds like the products are doing well, the newer products are settling down. Talked about the referenceability. If I think about what's happening in the market this year on price increases, it seems like it's happening almost ubiquitously across software companies. It looks like it's visible in your end market in the RevPAR data, too. Can you talk about the desire to kind of pull that pricing and packaging lever to keep pace with some of the market increases that we've been seeing out this year, versus maybe just keeping price as is, and then using it as a marketing tool against your competitors, and just to take market share faster in the hospitality space? I have one follow-up for David. Thanks. Yeah, sure, Brian. I'm not sure if I'm appreciating your question exactly. Let me get started with the answer. Please stop and correct me if I'm on the wrong path. When you look at our pricing levels, Brian, the two main words or phrases I would use, is we remain competitive, that's number one. Number two, we are not the lowest vendor. Every RFP, every competitive sales opportunity position we get into, we generally tend to be either equal or the highest pricing vendor. We have never compromised on that, because we invest, like you know, a lot of money in R&D, and we are not here to be desperate to win low-margin deals, because all customers take a lot of services effort, and then take a lot of support effort. Then we have such a big R&D engine that's going to give them value for the recurring revenue they pay us with future software versions. We are never the lowest vendor. We are, in fact, in almost every opportunity, we are the highest vendor, and we are competitive pricing-wise, because we don't want to lose deals either, right? We are competitive, but on the higher side already. That's one. Number two is when you sell a package of products, when you sell a combination of products, you have core products, and then you have the experience enhancer add-on modules, our pricing tends to hold up quite well without us doing anything artificial. When you think about our competitors, there are different competitors who have strengths in different geographical and other areas, but there is practically no one providing this end-to-end ecosystem of software solutions. When you are practically the only vendor providing that kind of end-to-end solutions, we are able to hold our pricing at pretty decent, good levels. We don't want to become too greedy with our pricing. We want to be competitive. We are happy with where our pricing levels are, Brian. Thanks, Ramesh. You definitely answered the question. David, the one question I just wanted to ask you was just on the, your thoughts on the guidance, the annual guidance. You reiterated it this morning, this afternoon, instead of flowing through the upside that you had in Q1. That's matched with all your commentary, it sounds like you have very good predictability in terms of that guidance. You know, my question for you is: Did any revenue get pulled forward, either from Q2, maybe into Q1, from faster implementations, as a cause of holding back on increasing that guidance? Did your view change at all on your expectations for the next three quarters, just based on the business and what you've been seeing, over the last three months? Thanks, Dave. Yeah. Thanks, Brian. Yeah, I think we're still on track for the year. I mean, obviously, the revenue, was a lot stronger in Q1 than we expected, and a lot of the pull forward, like we talked about in the commentary, was starting to level out the velocity between our services team and our sales team. I think we were originally expecting that to happen in Q2 or Q3, so happening in Q1 helped us pull forward some of the products revenue. It also made the professional service number a little bit better than expected. I think that's why you'll see the product revenue, you know, dip slightly in Q2 through Q4, because there was a little bit of a catch up with the professional services team doing better than expected. Thank you for taking my questions. Thank you, Brian. Thank you. One moment while we prepare for our next question. Our next question today will be coming from George Sutton of Craig-Hallum. Your line is open. Thank you. I wondered if you could address the concept that you announced the Marriott deal in December, and this was the first time you were presenting at HITEC since that point. Now, you're telling us that your PMS opportunities are greater than they've ever been. Can you just walk through sort of, the response you're getting from, potential customers, post this Marriott win and directly what you're hearing at HITEC? Hi, George. Yes. The best way I would describe it, George, is our PMS credibility, though it's in its initial phase, is what we are happy with now. Given that Of the three products, two of them are cloud-native SaaS products. One of them is about 2.5 years or so, really in the field at a mass level, and one of them is about 1.5 years old. Those products have settled down well. When you think about why is it that we now have PMS credibility, where customers feel compelled to include us, and once we are included and they see a guest journey demo, which is an end-to-end demo of all the modules and the core PMS, we got a good shot at winning the deal. What is giving us the PMS credibility now? One of the reasons is the Marriott deal, but I wouldn't put anything there or the Marriott announcement. That has given us PMS credibility. "Hey, we have to take these guys seriously there." Remember, we are competing against some very well-entrenched competitors who have been sort of dominating the space for well more than a decade. That has given us credibility, but what has also given us credibility is the fact that these products are settling down well in the field. There are more and more customers who are now realizing the benefits of that. When it comes to end-to-end PMS functionality, there is really nobody who can compete as a single vendor. They have to bring multiple vendors together to provide the value, that contributes as well. All these together are giving us the kind of credibility we've always wanted in the property management system phase. That gets us to the demo stage, that gets us to the inclusion and RFP stage, and thereafter, the products and our services teams and the quality of our professionals all take over from there. Compared to where we are, where we were one year ago, we have credibility. We are getting more inclusions in opportunities. We are being included a lot more often, and that is leading to some pretty good-sized deals that we are currently working through. Great. If I could move over to Asia. You have suggested that is a challenging, competitive market for you, and it sounds like you had a surprisingly strong Q1 in Asia. Can you give us a bigger picture of kind of where you see your competitive set today, where the longer-term Asia opportunities are? Yes, George. The Asia competitive market continues to be very tough because, again, very well-entrenched competitors who have done well there for multiple decades, 10, 15, 20 years. They have done well there. Those competitors in APAC are also not shy to go low in pricing. There are two battles we fight in APAC. Number 1, well-entrenched competitors, and number 2, very often low pricing. Now, for the last few quarters, we've seen good sales pipeline in APAC. There have been quite a few good opportunities we were working on, but we found the decision-making process to be a bit slow and frustrating because customers had not yet reached the stage where they were willing to pull the plug on the opportunities. It appeared for a while that they were clearly leaning towards us because of the quality of the products and the end-to-end ecosystem and all that, but they were not ready to pull the plug yet. Of course, they were getting much lower price propositions from our competitors as well. This quarter, it looked like we at least partially crossed the bridge. A couple of decisions were made that led us to good sales numbers in APAC. What was slowing us down for the last couple of quarters in terms of decision-making speed, seems to have picked up in APAC, so we are getting a bit bullish about APAC going forward this fiscal year. Great. Finally, if I could just get a little better sense of your less tenured group and the success that they're seeing. Can you give us a sense of how is this less tenured group structured? Are they pointed at specific verticals, specific geographies, or specific customer sizes? The quick answer is no, George. They are all part of our sales vertical teams. Like, we have an APAC team, we have an EMEA team, and in the U.S., we have a team that focuses on gaming casinos, a team that focuses on hotel resorts, cruise ships, a team that focuses on food service management, and a couple of other teams that focus on specific, certain big customers. That's the way it has always been structured. Within each of the teams, you have the long-tenured salespeople who always tend to do very well every year. You have the second half of those teams, where we have expanded during the last 2.5 years. It is not as if we take the less tenured sales personnel and focus them on certain areas. They probably handle a less number of customers, current customers than prospective customers, but each team contains a combination of them, and the second half of the team is really beginning to contribute very well now, and the senior half of the team has always done well year after year after year. Okay, good stuff. Thanks for the answers. Thanks, George. Thank you. One moment while we prepare for the final question of the day. Thank you. Our question will be coming from Nehal Chokshi of Northland. Thank you. Yeah, hey, great quarter. Sounds like you had a great ACV bookings quarter. I think you specifically called out the subscription ACV was up 46% and product ACV was up 27% year-over-year, booking spaces. Those seem like very strong numbers. Can you just verify that was indeed above plan? Nehal, the backlog was up 46%. Sales was up 21% over last year. It was the backlog that was up 46%. Gotcha. That's subscription ACV, sales that was up 21% year-over-year. Overall sales. Yes, overall sales. Overall sales. Total sales. Gotcha. Yeah. Backlog was up 46% year-over-year on an overall basis or subscription basis? Total. Got it. Okay. Got it. Okay. I guess, the bottom line is your ACV bookings, was that above your plan or not above plan? I would say it was in sync with the plan, and if anything, it was slightly above, but it was in sync with the plan. The reason why, Nehal, we have kept the guidance, we've reiterated the guidance, is that everything seems to be going according to plan. If anything, slightly ahead of plan, right? Whatever the sales we were expecting for the year, we are well on our way towards achieving it, is how it seems like now, based on the Q1 start here. Yeah. We think of plans on an annual basis, Nehal. That's how we think. We don't, you know, try to predict quarter after quarter, because, you know, that can go a little bit up and down. When you think about our annual plan, good start to the year. We're comfortable with the start we've made. Just remind me, what is the current lag, average lag between when you book an ACV dollar to when it actually starts, especially on the recurring revenue line? Yeah, that could vary from project to project, Nehal. Like, you know, the large project we have talked about, that's gonna take, you know, a year or two. Sometimes we go live. We generally revenue recognize, or we recognize revenue after it is implemented on site. That is how we normally do it. Hardware, of course, you recognize when you ship it, and it has reached them. Software, you recognize it when it's shipped them. The recurring revenue, we recognize it only after the go-lives get done, and those implementations can vary. Some projects could happen in a matter of weeks, some project could take 2, 3 months, and sometimes it could take 6 months. It just depends, Nehal. A lot of the implementations we are working through now are what has been sold in the previous quarter, and so on and so forth, right? That could vary from project to project, Nehal. Yep. Okay, great. What sort of threshold in ACV bookings do you guys have to hit in terms of year-over-year growth in the upcoming next two quarters, in order for you guys to say, "Hey, we now see our revenue being above current guidance, or for it being below the current guidance? Yeah. When you look at the sales this year, how it has gone in Q1 so far, it's a good start. If anything, it's a little bit better than what we were bargaining for. It's a good start. We feel comfortable about the revenue guidance we have given now. If it continues to go according to plan, I would say we will stay in sync with the revenue guidance we have given. If it does much better than what we are bargaining for for the year, then, you know, we will see. We will cross that bridge when we come to it. Okay, got it. Then, you talked about a big increase of contribution to ACV bookings for representatives less than two and a half years in tenure. Why are you using a two and a half year tenure cutoff for this metric? No particular reason, Nehal. We keep track of sales productivity across our whole sales team, and the way it sort of works out is when you look at our quota-carrying salespeople across the world, You have to draw the line somewhere. When we looked at about the top half of the team, They are long tenured with us, like 7, 8, 10 years, 15 years, kind of tenure they have with us. Then we just drew the line at about half the team size, and that's where we came up with the 2 and a half years. After COVID, in terms of expansion of the sales teams, started happening a couple of years ago. That is why we drew the line there. No particular, you know, scientific sanctity to that, but it's a pretty good indication, right? We have a set of salespeople, about half the team, that have been with us for a prolonged long time, and who always tend to contribute a huge majority of the sales. In terms of our sales success increasing, we were also focusing on the second half of the team, which is a little bit less, lot less tenured with us than Agilysys. It's just one of those cutoffs, no particular scientific reason behind that, Nehal. For the reps that are less than 2.5 years, are you seeing differentiation in terms of their ramp in productivity, in terms of maturity within that 2.5-year period? Yeah, it always is true, Nehal, that, you know, some portions of the group is, are doing better than the others. Overall, when you take them as a group, we are extremely happy with how they are doing this fiscal year. I mean, last year, like we told you, they contributed 6% of total sales, and now they are at a run rate of 19%-20% of what they contributed, of the total sales. The biggest stat that we gave you is if you take their total sales last year, they've already done about 72% of it in the first 3-4 months. That's incredibly good. As a group, they are doing far better, and that is great for us, because that means the sales productivity is continuing to increase quite significantly. Yep. Okay, great. Thank you for taking my questions. Thank you, Nehal. Yeah. Thank you. This concludes the Q&A session today. I would like to go ahead and turn the call back over to Manish for closing remarks. Please go ahead. Thank you, Lisa. Hey, thank you for all your interest and attention. Please enjoy the rest of this super hot summer. We look forward to talking to you again in about three months from now, when we will report on fiscal 2024, second quarter results towards the end of October. Thank you. Thank you for joining today's conference call. You may all disconnect and have a great day.