Greetings, and welcome to the Avaya first quarter fiscal year 2022 earnings conference call. At this time, all participants are in a listen only mode. A brief question- and- answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike McCarthy. Thank you, Mike. You may begin. Thank you, Paul. Welcome to Avaya's fiscal 2022 first quarter investor call. Jim Chirico, our President and CEO, and Kieran McGrath, our EVP and CFO, will lead this morning's call and share with you some prepared remarks before taking your questions. Joining them this morning will be Stephen Spears, our Chief Revenue Officer, Todd Zerbe, our Senior Vice President of Engineering, and Dennis Kozak, Senior Vice President of Strategic Operations. The earnings release and investor slides, which include highlights of our ESG initiatives and performance referenced on this morning's call, are accessible on the investor page of our website, as well as in the 8-K filed today with the SEC. These should aid in your understanding of Avaya's financial results. All financial metrics referenced on this call are non-GAAP, with the exception of revenue. We have included a reconciliation of such non-GAAP metrics to GAAP in the earnings release and investor slides. We may make forward-looking statements that are based on current expectations, forecasts, and assumptions, which remain subject to risks and uncertainties that could cause actual results to differ materially. In particular, the global economy continues to be impacted by COVID-19, and the extent of its continued impact on our business will depend on a number of factors that include, but may not be limited to, the virus's severity and duration, the emergence of new variants, changes in infection rates, the vaccine participation rate, the effectiveness of vaccines, and the speed with which the vaccine can be distributed, as well as regulations and requirements impacting the return to our offices and our ability to visit customer sites and actions taken or not taken by governments, businesses, and consumers in response to the pandemic, all of which continue to evolve and remain uncertain at this time. Information about risks and uncertainties may be found in our most recent filings with the SEC, including our Form 10-K and our Form 10-Q. It is Avaya's policy not to reiterate guidance, and we undertake no obligations to update or revise forward-looking statements in the event facts or circumstances change, except as otherwise required by law. I'll now turn the call over to Jim. Thanks, Mike. Good morning, everyone, and thank you for joining today's call. This last year was an important one for Avaya. If I take a step back to reflect, I would characterize it as a continuation of a multi-year journey and one of accelerated transformation for the business. It's clear that we are in a stronger position than when we started. I give our team a lot of credit as they have executed on the company's three value drivers and have remained focused on solidifying our business for our long-term success. Entering this fiscal year, we have successfully navigated a period that is best characterized by high volatility and unpredictability. Despite this extremely dynamic business environment, we've made steady progress on our objectives and strategy. Over the last two years, we've gained new insights about our customers, their needs, and seen their expectations and behaviors evolve. The future is clearly moving in our direction, and we are fortunate to have so many assets to leverage. Overall, I could not be more pleased with the momentum of our business. When I look at our first quarter results, while we made progress on our key cloud objectives, which I'm quite proud of, our top line results and profitability were below our expectations, primarily pressured by two temporary dynamics. First, the mix of content and the final deal terms of some contracts did result in a delay of revenue recognition. One example was a significant multi-year Avaya OneCloud public CCaaS contract we won with a large global financial services company. This deal is roughly $400 million over a seven-year life of the agreement. It is significant, not just because of the size of the deal, one of the largest in the history of the company, but also because it leverages a significant number of our latest innovations, including AI, biometric security, and advanced analytics, and represents a displacement of several incumbent competitors. Because of the nature of the CCaaS deal, we were unable to recognize revenue we had assumed would be realized in Q1, which will now materialize beginning in the second half of FY 2022. Second, with respect to the environment, there is no doubt it caused a pause. The fact is that many of our customers, especially in the U.S. and Western Europe, were in lockdown, and commercial activity simply slowed at the end of the quarter. As a result, the necessary approvals and contracting activities with many of our customers stalled. What's important to note is that these deals were not lost and projects have not been canceled. We did see a number of deals slip by a few weeks, many of which have since been closed. While it is not unusual to see deals push and pull at any given quarter, the magnitude in Q1 was amplified. It is clear that demand remains extremely strong, as evidenced by our continued traction with new logos, where we signed over 1,400 this quarter. Success with large deals where we signed over 100 greater than $1 million TCV for the seventh consecutive quarter. Importantly, with the increase in Avaya Cloud bookings for private and public solutions, which grew 31% year-over-year. These are proof points that the underlying fundamentals of our business remain strong, and I am more pleased with the progress on the key KPIs for our business, including OneCloud ARR, cloud revenue, hybrid subscription growth, and continued enterprise traction. Improvements to these areas validates that the investments we are making in transitioning to cloud and SaaS are yielding the desired outcomes. Let me expand on our progress in each of these key areas. Avaya OneCloud ARR is our most significant metric and represents the combination of our entire hybrid, private, and public cloud portfolio. We added another $90 million to ARR during the quarter, up 17% sequentially and 137% year-over-year, ending at $620 million. We remain well on track to meet our $1 billion ARR target at the end of calendar 2022, and Kieran will take you through our increased ARR guidance. The growth in ARR is driven by several factors. First is our Contact Center business, which continues to represent approximately 60% of total ARR and grew nearly 130% year-over-year. Further proof of our leadership in CC. Second is the underlying momentum from our Enterprise segment, which comprises 95% of our total ARR. Third is the adoption of innovation by our customers. The bundling of additional value into hybrid cloud subscription offers through adding innovation such as Avaya Spaces, Cloud Contact Center AI, Avaya Conversational Intelligence, and our Cloud Notification Service, among others, is helping to fuel our ARR growth. In fact, if you take a step back and look at our hybrid subscription deals, on average, we are seeing a 20% uplift in total contract value as we migrate customers off their maintenance models. Our investments in innovation will remain strong. We have invested a lot, and we are not slowing down because our customers are looking to Avaya to help them improve their customer workforce experience. Our technology, along with the scale at which we can operate, is a competitive advantage for us, and the investments we have made are clearly showing dividends in the form of ARR growth, up from $262 million- $620 million in just one year. Kieran will provide additional color on our financial performance and outlook in just a few moments. Before I turn it over, let me share some highlights from the quarter. Our strength in the enterprise sets us apart from all others in our peer group, and overall large deal volume remained consistent with the prior six quarters. We signed 108 deals greater than $1 million TCV. Nine deals were greater than $5 million, six greater than $10 million, and we had 2 over $25 million TCV. To us, these deal sizes emphasize that customers are voting with their wallets, committing to large, strategic, multi-year contracts that align their business needs with Avaya's technology roadmap. In addition, we once again signed a significant number of new logos, well over 1,400, reinforcing the competitiveness, differentiation, and value of our solutions. Turning to subscription hybrid. Within our ARR and CAPS KPI, our Avaya OneCloud Hybrid subscription remains one of the most effective on-ramp to a cloud-native model for enterprise customers. Since launching two years ago, we just passed the $1.5 billion TCV mark last quarter, making this the most successful solution offering in the company's recent history. Not only are we converting current customers, but in Q1, we signed nearly 200 hybrid subscription deals with new customers, our highest contribution from new logos since launch. Customers are committing to our cloud vision with 3+ year contracts. They are making these commitments based on the deliberate and compelling roadmaps we have laid out. This is validation of the value our solutions can drive for our customers, their customers, and of course, our shareholders. An example of one of these customers is Ascension Health, the largest nonprofit hospital system in the U.S. They signed a five-year contract to standardize on Avaya across 110 hospitals with options to include clinics and professional offices in the future. Turning to CCaaS. This quarter, we grew seats at a rate and pace faster than the previous four quarters combined. Equally notable is the funnel growth hit an all-time high. We continued to invest, materially increasing the number of primary quota carriers, digital sales, and pre-sales for our CCaaS offering. OneCloud channel partner network of distributors and agents has grown into the thousands, and we are expanding our CCaaS geographic availability to 100 countries by the end of the calendar year. We offer a fully integrated platform, and that differentiation is helping us grow the size and quality of our funnel, even in the highly competitive mid-market segment and below. Cupola Teleservices, one of the Middle East's largest BPOs and outsourced contact center service providers, chose Avaya OneCloud CCaaS and Avaya Spaces as the basis for their new customer onboarding and agent training. We beat out Genesys to win a three-year deal that significantly improved user and customer experience for Cupola's customers. In Ontario, Canada, McMaster University, with over 35,000 students and 10,000 staff, chose Avaya OneCloud to extend our long-running partnership for a future five years. McMaster selected our cloud solution to address the challenges of increasing digital engagement across seven unique contact centers, reducing handling times, and improving analytics and workforce agility. Avaya Cloud Office traction remains solid. We continue to add specific Avaya capabilities to the platform that differentiate our offering, including integration with our own CCaaS. One example of the importance of bringing Avaya content into the ACO platform is a recent win. Medical West Hospital Authority, an affiliate of UAB Health System, they're a long-time Avaya customer through our partner AT&T. They selected Avaya Cloud Office for 1,400 staff members at their hospital and off-campus locations. Key features such as faxing, video conferencing, and integration with Office 365 helped tick every box Medical West had on their list. ACO channel partner enablement efforts continue to yield positive results. Well over 700 partners globally have now sold ACO seats. Overall, seat growth was up 14%, and the number of new customers was up 16%, both from the prior quarter. If I had to sum it up, the fundamentals of the business remain strong. As I said, we have already seen a number of deals that have moved out of book in January, and the team's execution remains steady and focused, and as a result, we remain committed on delivering the full-year guidance for revenue that we previously communicated. With that, let me turn it over to Kieran to take you through the numbers. Thank you, Jim. Good morning, everyone. As a reminder, all figures mentioned on this call are as reported unless otherwise indicated in constant currency. We are pleased in the progress made in Q1 in continuing to expand our ratable revenue base. We added $90 million of new ARR, ending the quarter with a balance of $620 million. Further, we had very strong OneCloud signings and bookings in the quarter, highlighted by the signing of a multi-hundred million dollar CCaaS contract with a very large global financial institution. This is the largest Avaya OneCloud signing since the introduction of Avaya OneCloud and is one of the largest Avaya wins in our history. Q1 revenue at $713 million was below our guidance, driven by two primary issues. Firstly, current quarter revenue contribution, primarily related to signed OneCloud subscription hybrid contracts, was lower than guidance expectations. This resulted in approximately $20 million of revenue to be recognized in future periods upon the delivery of specific contract milestones and deliverables. This revenue was not lost, but rather will be earned in future periods. Secondly, as Jim mentioned, several large deals valued at just over $10 million stalled very late in their closing stages at the end of December due to key personnel being unavailable to finalize contracts and approve and release POs. While the top line during a transition can experience some choppiness, the true measure of our transition is seen in ARR growth, and that has continued to rapidly expand in Q1. Our OneCloud ARR metric exited the quarter at $620 million, which represents 17% in sequential growth and is up 137% year-over-year. This quarter, we note the especially strong contribution internationally through increased demand and adoption. We continue to see a strong contribution from our contact center within ARR, with that portion of our business contributing about 60% of total ARR. Our status as enterprise leaders is further demonstrated in the number of customers paying greater than $5 million in ARR, and in particular, a growing number of customers paying greater than $10 million annually. Similarly, customers paying greater than $1 million represents approximately 60% of total ARR. Getting deeper into the numbers. For the first quarter of our Fiscal 2022, revenue was $713 million, down 4% as reported and in constant currency against the $743 million in the year-ago period. Revenue contribution from CAPS, or Cloud Alliance Partner and Subscription, another indicator of the transformation of our business, represented 44% of total revenue, flat sequentially and up from 34% in the year-ago period. For our first fiscal quarter, recurring revenue accounted for 66% of total revenue, in line with recent levels. Meanwhile, Software and Services revenue represented 86% of total revenue. Hardware revenue at 14% of total revenue is relatively flat in revenue dollar terms versus the fourth quarter of fiscal 2021, reflecting continued strong demand for devices that accompany our software offerings. Subsequently, Software revenue, our newest KPI, as a percent of total revenue, came in at 62% in Q1. Turning to our gross profit metrics, non-GAAP gross margin was 57.6% in the first quarter compared to 61.8% in the year-ago period and 60.4% sequentially. This was impacted by two key factors. First, the lower level of contribution from Software revenue due to less high-margin point-in-time in-quarter revenue recognized from our OneCloud subscription hybrid deals. A handful of SaaS slipped software deals that I referenced above. Second, the stronger hardware contribution mix within the product segment. Additionally, Hardware gross margins were significantly impacted due to industry-wide elevated supply chain costs. Turning to total profitability, margin, and cash flow metrics for the quarter. First quarter non-GAAP operating margin was $102 million, representing a non-GAAP operating margin of 14%, down 760 basis points year-on-year. Adjusted EBITDA was $129 million, representing an adjusted EBITDA margin of 18%, down 750 basis points year-on-year due to the revenue and gross margin impacts referenced, as well as the increased cloud investments in R&D and go-to-market. Non-GAAP EPS was $0.42 in the first quarter compared to $0.90 in the year ago period, and $0.77 sequentially. Cash flow from operations was - $111 million, or - 16% of total revenue, contributing to a first quarter ending cash balance of $354 million. As discussed in our last earnings call, a large negative CFFO was expected during the quarter due to payments of our annual incentive plan and large commission payments due to our sales reps for Fiscal 2021 results. This quarter's CFFO was further impacted by a single large collection worth nearly $40 million related to a federal government contractor, which was pushed out of the quarter. This receivable is on track to be collected in Q2. As discussed at Investor Day, contract assets, which largely reflects deferred billings, continues to grow from $606 million at the end of Q4 of Fiscal 2021 to $664 million at the end of Q1. This represents a strong pool of future cash collections for Avaya. Now turning to guidance. Please note that all year-over-year revenue changes are expressed on a constant currency basis and all revenue amounts reflecting rates as of January 31st, 2022. In terms of our forward-looking OneCloud ARR metric, we are increasing our guidance for the full year and now expect to exit fiscal year 2022 between $900 million-$920 million. At the midpoint, this represents growth of 72% year-over-year. This expectation reaffirms the previously committed target of exiting 2022 calendar year with OneCloud ARR at or above $1 billion. Turning to revenue, we are reaffirming full- year revenue guidance. As such, we continue to expect the full- year revenue to be between $2.975 billion-$3.025 billion. This has year-on-year revenue growing between 0% and 2% on an as-reported basis, and 1%-2% on a constant currency basis. We note that a continuing strengthening of the U.S. dollar in 2022 beyond current levels would pose a headwind to our guided revenue. For the second quarter of our fiscal year 2022, we anticipate revenues of $730 million-$745 million, which at the midpoint represents constant currency growth of about 1% and flat on an as-reported basis. We expect full- year adjusted EBITDA to be between $680 million and $700 million. The reduction from our prior full- year adjusted EBITDA guidance of $700 million-$720 million reflects the impact of higher supply chain costs. At the midpoint, this implies a 23% adjusted EBITDA margin. We expect non-GAAP operating margin for the fiscal year to be approximately 19%. For the second quarter, non-GAAP operating margin is expected to be between approximately 17% and 18% and our adjusted EBITDA to be between $155 million and $165 million or between 21% and 22% of revenue. We expect non-GAAP EPS for the full- year to be between $2.72 and $2.88. This compares to $3.16 in the prior year period. For the quarter, we expect non-GAAP EPS to be between $0.58 and $0.66. This compares to non-GAAP EPS of $0.74 in the year ago period. For the full fiscal year, we continue to expect CFFO as a percent of revenue to be approximately 1% or unchanged from prior guidance. Before I turn the call back to Jim, I want to announce that Mike McCarthy will be leaving Avaya to pursue another career opportunity, so this will be his last earnings cycle with Avaya. Mike and I joined Avaya within six weeks of each other, and we've worked very closely over these past three years. We will miss him and wish him the best of luck in his new role. Replacing Mike as VP of Investor Relations will be Nandan Amladi. Nandan is known to many of you already from his time as an Equity Analyst before he joined Avaya and is a member of the Avaya team since June of 2020. With that, I would now like to turn the call back to Jim. Jim? Thank you, Kieran. Last year was a year of continued transformation for our business. I'm optimistic about how we're positioned entering 2022, and I have high confidence not only in the strategy we laid out, but most importantly in our global team and their ability to continue executing to it. It's important to recognize the magnitude of the changes we have made over the past few years. As we now move along the inflection point of our business model transformation, we will continue to generate additional successes, and there have been many, but there's always more work ahead. We remain focused on solidifying our business for long-term success, and the lessons we've learned and implemented will help us do just that. Long- term, the markets we address are robust, growing, and as we move forward, our performance will accelerate, and we believe there is significant opportunity in front of us to drive sustainable growth. Finally, I'd like to thank the over 8,000 Avayans, along with our 4,000+ partners around the globe for their tireless efforts and focus on driving value for our customers. I especially want to thank those same customers for their commitment and trust in Avaya. With that, operator, please open it up for questions. Thank you. We will now be conducting a question- and- answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. In the interest of time, we ask the participants limit themselves to one question and one follow-up. One moment, please, while we poll for questions. Thank you. Our first question comes from Ryan MacWilliams with Barclays. Please proceed with your question. Thanks for taking the question, and congrats to Mike McCarthy. He will be missed, but he leaves you guys in good hands for sure. Kieran, you know, I appreciate your color in the prepared remarks. Just on revenue coming in lower than guidance in this quarter, can you expand upon the puts and takes there? Like, should we expect the majority of that $20 million revs to come the next quarter? And then were these push deals the reason that you maintained the full-year rev guide in light of this print? Thanks. Yeah. Hey, Ryan, this is Jim. I think I'll start now and turn it over to Kieran to add a little bit more color. First, as we stated in our prepared remarks, you know, we had a really strong Avaya OneCloud signing and bookings in the quarter and clearly highlighted by the largest deal in the history of the company with that multi-hundred million dollar CCaaS contract. Once again, you know, we've added $90 million of ARR. As I pointed out, you know, we're now up to $620 million. If you take a look at Q1, kind of summing up, our signings were actually quite strong and largely in line with expectations. One of the important notes, however, and we sort of touched on that in our remarks, is the fact that customers are accelerating to cloud. In fact, we saw a number of our customers choose private and public instead of what we had originally modeled in as subscription. You know, this is obviously very important. It's in line with our strategy, and that is to moving customers to the cloud. You know, that obviously had a, what I'll say, an impact on short-term revenue. It really solidifies our position not only in cloud, but also to be a strategic partner to a number of our large enterprises, our customers. In fairness, I'd make that trade-off and that deal, you know, each and every time. You know, the overall goal of the company is to continue to move to a cloud model. It's continuing to build out our ARR and long relationships and success with our customers. I'll turn it over to Kieran to add a little bit more. Yeah. Ryan, specifically to your question. I break the revenue under guidance by into two forms. First, roughly about $20 million, what I'll call, was really pushed out of this quarter. The deal was signed and inked. What we thought we would get from those deals in terms of point-in-time revenue in the quarter is gonna be different. That will come back to us. Some of it will come back this year, roughly about $5 million, you know, over the next couple of quarters. I would say the bulk of it, probably more like 15-ish of that $20 million will come at us, you know, over the next couple of years. Why is that? It's really because of, you know, the unique, the final terms, the flexibility that we might give to the customer as they sign the deal, any of the future deliverables. You know, that's all what can drive rev, you know, revenue variability in the quarter. As I say, it doesn't affect the size of the overall deal, the signings, but it can affect the end point. I would say we get about five of that back this year. The rest comes over time. Related, as Jim talked about, of the roughly $10 million of deals that slipped, you know, we expect those deals here in Q2, and in fact, several of them already in-house. You know, you think about these deals. These are large, you know, complex deals with TCVs well over $1 million. You know, as you can imagine, they go through approval cycles many times from the CEO down, but certainly from C-suite down. I would tell you, I've been at this for 40 years, and it was highly unusual at the end of the year that we saw several companies, you know, literally going to a shutdown with key personnel just simply not available to finalize either issue a PO or to finalize. It's really not a reflection of demand, and I've got good confidence that that $10 million comes back to us here in Q2. Understood, and glad to hear you're prioritizing the cloud versus subscription wins. Just on profitability in the quarter, it looks like it stepped down with lower EBITDA and free cash flow. I know things can be messy as you transition to subscription. You mentioned kind of a one-time item. How do you feel about your cash position as we get closer to your minimum cash balance range, and your long-term targets? Right. As you know, we've said before that, you know, we like to have optimally $400 million on hand, but really that provides us with liquidity to support You know, incremental flexibility such as doing tuck-in acquisitions. I'm quite confident that the team is able to operate at a cash balance of about $250 million, without having to draw on any revolving credit facility. You know, very, very comfortable at the levels that we're at. As you know, we do maintain the revolving ABL facility, and that has about $100 million+ of availability, you know, based on AR and on-hand inventory balances. Honestly don't foresee any need to utilize that in the near- term. As we've talked about, you know, towards the back end of this year, we begin to see the swing now as we start to level out in terms of the, you know, the new signings and the new ARR and the other stuff, you know, coming off of, expiring. I think we start to hit more of a steady state in the back half of this year. That's why I'm comfortable with the 1% guidance still for this year. Okay. Next question, Paul. Thank you. Our next question comes from George Sutton with Craig-Hallum Capital Group. Please proceed with your question. Thank you. Guys, I'm particularly interested in the competitive dynamics on the $400 million win that you had. You mentioned several vendor takeaways. I'm curious, was this a previous customer of yours that moved forward with you? Obviously, the message that this makes on your public cloud capabilities is obvious, but I'm curious if you could just address that as well. Yeah. Hey, George. Jim, thanks for the question. Yeah, first and foremost, we were one of many providers for this customer, and basically what they did is they consolidated their footprint. You know, this deal is unique and really highlights the differentiation and relevance we bring to the market because it's not what I would call your traditional CCaaS, UCaaS deal. It's really one that we are driving a true business transformation via integrating digital technology across their complete enterprise. You know, we are reimagining, for lack of a better term, their entire customer experience journey. We're starting initially with 20,000 agents, but we will be expanding to north of 40,000 agents in the next five years or so. You know, it's a combination, if you will, of our platform capability, the ecosystem, the innovation we're bringing, and really the competency that Avaya has that others simply do not in designing, building, in developing, you know, apps, machine learning, automation, all of sort of those innovative capabilities, really to build out stronger sort of functionalities for the customer. You know, the other interesting note is this is the first that we believe in line with 12-18 other large enterprises that we're currently working with within the market today. May not be as large as this, but you know, but we are the only provider that can really manage the complexity. I'll call customer sensitivity, compliance, regulatory measures, and provide this sort of personalized complex business use cases. We're winning these projects not solely because we have the right technology, but we have a strong innovative roadmap. You know, we're the right partner to manage the sort of complete management system domain expertise with our services organization and helping really guide these large, complex enterprises through this very complex transformation journey. A very exciting win, not just on the value, but really how it's positioning us in really solidifying the work that we've really been focusing on for the last three years around our public CCaaS journey. Gotcha. If I could just ask one from a follow-up perspective coming off of your Analyst Day. The big differentiator that I took away was the MPC. Is that starting to make its way into your marketing message? Is that proving to be a differentiator as it certainly sounded like to us? The answer is yes, but I'll turn it over to either Ahmed or Todd to provide a little additional color to give you an update on exactly where we are in rolling that out into the marketplace. Media Processing Core anchors- Todd? Yes. Go ahead, Todd. Can you guys hear me? Yep. Can hear you. Media Processing Core is the technology that anchors all of our media. We use it in our Spaces product today, and it will be available in our CCaaS public cloud mid this year. It's a next-generation cloud architecture with global scale, 50 ms failover. It has 80% lower bandwidth utilization. It offers features like AI noise reduction, and it really is a next-generation cloud architecture we feel puts us at least two years ahead of ou`r competition. Really, it demonstrates Avaya's ability to lead in cloud. It's a technology that we are going pretty heavily to the market with knowing that it's something that we've already released and we've demonstrated with our Spaces product, and it is something that's gonna be providing additional value into our public CCaaS. Thank you. Our next question comes from Lance Vitanza with Cowen and Company. Please proceed with your question. Hi guys. Thanks for taking my question. I have a follow-up as well, but let me start with just on the OneCloud ARR. Great work. That metric continues to outperform our expectations. Could you discuss whether the metric itself is inflated, perhaps by virtue of larger upfront payments you receive or upfront revenue that you recognize, or do you guys control for that when you report that metric? Hey, Lance, it's Kieran. That's a great question. Have you asked it? What we essentially do is we take the annual contract value, right, of the metric. The ARR is nothing more than the total TCV divided by the duration. It has really nothing to do with when we recognize the revenue. Okay. No, no impact from rev rec. Okay, great. Thanks. Just my follow-up is the 1,400 new logos that you added in the quarter, and I apologize if I missed this, but could you give us at least a rough sense for how many of those new logos are taking OneCloud ARR services? Well, essentially just by, you know, just looking at it's well over 60% are actually going for either cloud or a subscription hybrid offering. Okay, great. Thank you. Our next question comes from Catharine Trebnick with Colliers. Please proceed with your question. Hey, Catharine. Thank you. Our next question comes from Rod Hall with Goldman Sachs. Please proceed with your question. Hi. Thanks for taking my question. This is Bala in for Rod. If I look at the full year guidance, looks like you are implying a significant ramp in second half, not just in revenue, but also more significantly so in operating margins in the second half. I just want to better understand what is driving that better margin guidance particularly. I got- Sure. Well, obviously. Hi, Bala, it's Kieran. I mean, clearly, as you continue to sell high margin software in the form of cloud, you know, that drives a great deal of profit right to the bottom line. You know that we've been ramping up our investment from both an R&D and a go-to-market perspective for quite some time. You know, what literally impacted us in Q1 was just the absence of that very high margin revenue. As we look out into the back half of the year, you know, we see our revenue, you know, bouncing back and continuing to start to ramp now with many of the cloud, you know, the public and private cloud dealings that we booked. And that starts to generate revenue. Some of that cost was sitting, you know, already in our numbers in the first and second quarter. Without the revenue, and as that revenue starts to ramp now, it absorbs all of that cost and the margins start to get significantly better in the back half of the year as well. Yeah, maybe I'll just add a little bit to Kieran. If you take a look at the profile, obviously with our move to our move to cloud, you can imagine based on the size and the complexity of these deals, they take anywhere between, say, 3-6 months to design, scope, agree on a full execution plan with customers, and actually begin to activate. As I mentioned in my script on CCaaS, we did more last quarter than we did the previous 4 quarters combined. We will start to deploy those and roll those out in the second half of the year. Same, frankly, with our Private Cloud Solutions. Thirdly is the fact, as I mentioned, that large deal will start to realize revenue on that in the second half of the year. Then, you know, the success that we've had with our subscription hybrid offer, where we're able to claim, you know, roughly 60% or so point-in-time revenue, that residual 40% continues to build ratably quarter after quarter- after- quarter. There's obviously a significant backlog, and that's the point about how we're sort of reaching this inflection point now with recurring revenues, which now are 66% of our overall revenue, really starting to yield in the second half of the year, consistent, frankly, with our overall strategy. As we continue to win these large deals and now we're activating and then monetizing, as we roll through the balance of this year and into 2023, you know, is why we're confident on point that we mentioned, the fact that we didn't lose any of the volume in the first quarter. It was pushed, for lack of a better term, or value moving more from subscription to recurring. That's why we know guidance is actually the same and why we're confident in our ability to make sure that we obviously come in and meet the guidance range. Got it. Thanks, Kieran. Also, I want to touch upon the slowdown in commercial deal activity. Could you maybe expand on that a little bit more, Jim? I think you mentioned I think I heard Kieran say lack of personnel might have caused that. But I just want to better understand what really caused that. Like, what was the unexpected surprise that really drove this push out on deals? Yeah, I mean, listen, deals push and, you know, come into the quarter and go out of the quarter all the time. You know, we're used to that. We had a handful of deals that were, we were pretty much rock solid on that, quite frankly, at the end of the quarter. Mostly in North America, there was just nobody there. I mean, they did not. They stopped engaging in terms of finalizing it and getting the contracts over the line and issuing the POs. Highly unusual, right? Again, I do think there was obviously, you know, an impact that many customers and many people felt, you know, from the Omicron in Q4. Not saying that was it or not, but these folks, they just literally were not there the last several days of the quarter to close on deals. That is highly unusual, even in Q4s. Thank you. Our next question comes from Catharine Trebnick with Colliers. Please proceed with your question. Thank you. Let's hope I don't get dropped again in the middle of the question. Mike, sad to see you go. Congratulations. My question has to do with the product revenue. You came in at $231 million. Can you parse that between the Hardware, the perpetual license? If the perpetual licenses were light, did that affect the growth margins as well? Thanks. Sure. Catherine, you're spot on. Our Hardware was actually in at about $97 million, relatively flat for where we were in Q4. We continued to see a lot of, like, sort of pent-up demand for devices. Therefore, that was pretty consistent. That hardware is generally, you know, more in the 40%-60% margins historically. That's gonna have an impact on in-period margin. In addition to that, we actually saw, you know, volume-adjusted, about $10 million worth of incremental supply chain costs, roughly about $7 million from a commodity perspective, which was in the base manufacturing cost, and about $3 million with incremental shipping and freight costs in the quarter. Now, that's something we expect will probably continue a little bit here in Q2, but what we've been, you know, hearing from some, we're expecting that starts to ease in the second half of the year. So there is definitely a margin. You know, if I was to look at our margins overall on a year-on-year basis, clearly, even though hardware was relatively flat, it had a larger percentage of the total that impacted margin. The supply chain margin, it was also about a point of increase. Lower software product revenue that's, you know, north of 90% gross margin clearly has a very large impact on margin as well. Although remember, we would have expected some of that to shift away from product and into services as part of subscription as we move and migrate customers away from the traditional CapEx buying to subscription, hybrid sales. All right. Thanks. Thank you. Our next question is from Samik Chatterjee with JP Morgan. Please proceed with your question. Hi, this is Joe Cardoso on for Samik. Just one question from you guys. You know, as we look at your updated ARR guide and the activity that you're seeing in the first two months of the year, just curious to hear how you're thinking about the dynamics between, you know, penetration of your existing install base, new customer wins, as well as content increases, and whether you're seeing any changes between those dynamics versus, let's say, like last quarter. Thank you. I guess what I would say is, in general, you know, the vast predominance of the dollars continue to be driven by the migration of our existing customers. As we said last quarter, over the last couple of quarters, we started to see a big step up in the number of new logos from a subscription hybrid perspective. This quarter at almost 200 was the biggest that we had seen so far. In all candor, those are relatively small landing points, right? They go into the traditional land-and-expand model, right? We land it, and expand it out to renew over time. That's not having as big an effect on the overall dollars. I would say migration, you know, continues to be the engine behind most of it, albeit supplemented with some that, as I talked about earlier, over 60% of our new logos are coming from cloud and subscription hybrid. I'll maybe just say a little bit to Kieran. First of all, ARR is really important to us. ARR is driven by, you know, our innovation that we're bringing to the market. You know, over the last 12 months, we've added over 6,000 new customers. We've added now seven consecutive quarters of roughly over 100 deals greater than $1 million of TCV. We're starting to see a real acceleration from our subscription hybrid to now more private and public cloud. Demonstrating continued value with what we're bringing as far as technology into the marketplace. That technology, be it around new AI capabilities, social media management platforms, video and voice capabilities, the list goes on and on. Really driving a higher degree of relevance. The successful implementation of the plan, with our lens, really, on really focusing in and recognizing the importance of building ARR, I think is really starting to take hold and right in line with our long-term strategy. You know, it's important for us to make sure that we keep this disciplined approach, which we're doing. It's important for us as we continue this transformation and transition to think about steady progress, which obviously we believe we're doing quite well on. You may have fluctuations. In movement in, you know, deals days to weeks or product preference to product preference. The most important thing is continued growth, steady progress. I think equally important, which sort of differentiate us from many others, is the skill set and expertise that we have and the number of years that we've been doing UC and CC, the technology we bring, our customer base and our global capabilities. You know, we believe we are, quote, are very robust in these areas, and, you know, you're starting to see it take hold. Again, you may get a sway one way or another, but the long-term strategy is stronger than ever. You know, this move that we're seeing now to more of cloud is exciting for us because it's driving long-term value with our customer base, and it's obviously reflective in ARR. You know, as I said, a year ago, we were $262. You know, at the end of this year, we're gonna be $1 billion. That's significant growth in just a two-year period of time. Thank you. Our next question comes from Asiya Merchant with Citigroup. Please proceed with your question. Great. Thank you, and congrats, Mike, on the new opportunity. We'll definitely miss you, and thank you for all the help that you've provided. Most of my questions have been answered, but I did have a question on something that you guys talked about, and maybe you can talk about, you know, any updates to that. You talked about at your Analyst Day about the monthly recurring revenue that you were seeing. If you can just talk about, you know, during the quarter or as you guys kind of think about how that's progressing, you know, relative to the kind of model that you guys put out, the current monthly recurring revenue that you referenced at your Analyst event was a little bit lower relative to the potential that CC and UCC could generate. If you could, you know, talk about what you're seeing in those areas, that would be great. Thank you. Hey, Asiya, it's Kieran. I think what you're talking about, obviously, you know, MRR is just a divided by 12 from our ARR, right? We obviously continue to build on our existing base of recurring revenues in aggregate. That really hasn't changed. You are obviously correct that just given the revenue recognition around the subscription hybrid portion of that, you know, we did see a blip in the last quarter just because of some of that point in time versus over time. We continue to actually, you know, build off a good base of recurring revenue and more and more of it, as we said, in our Analyst Day. You know, we would expect that right now it's about 80/20 between subscription hybrid and cloud, and we expect that will, as we go through time, will continue to move towards a 50/50 and beyond for cloud. What you don't see represented in our ARR or our recurring revenue yet, because we don't start counting it until we start billing it, are some of these rather large, you know, enterprise complex deals like the one that Jim referenced. We'll start to see that contribute to our MRR and ARR on an ongoing basis once we start billing that towards the second half of the year. You know, quite honestly, we were very pleased within our $90 million of ARR that we recognized this quarter to see a nice distribution across all facets between cloud and subscription hybrid. In addition to that, starting to generate some pretty significant backlog, if you will. Now, let me just spend one moment on that. We have pretty conservative booking. We are pretty conservative in our overall booking. This multi-hundred million dollar deal that we booked for this large global financial enterprise, you know, we only actually booked a little less than 10% of that in the most recent quarter. That's because we really do base our bookings based upon committed milestones. We would expect that we will add on that as we achieve milestones as we go through the year. Again, that's backlog that we have that we're not necessarily representing yet in our RPO that we publish in our Q. Okay, great. Thank you. Thank you. Our next question comes from Hamed Khorsand with BWS Financial. Please proceed with your question. Hey, good morning. I just wanted to see, with the lockdowns that happened, what happened to the sales funnel? Did the sales team just stop and have to restart everything over again? I'm sorry, I missed the first part of your question. This is Jim. About sales funnel. No, I mean. No. No, no, far from it. I mean, in fact, these were deals that were inked, you know, early either in January or it'll be done here in February. Listen, I mean, the world of reality is procurement teams will always take another bite at the apple if they can, right? I mean, that's a given. No, the deals were there. They were there to be done, and they're gonna close this quarter, those sort of deals. Again, it's worth about $10 million in total. My other question was, how much of the expenses related to this $400 million deal were recognized in the December quarter? You know, we're early days. We're starting to staff, obviously. We'll staff. This is gonna be a pretty large, you know, service delivery and hosting, and that would be relatively small. Obviously, we have some ongoing, you know, infrastructure that we have to stand up already to give, you know, proof of concepts to our customers, et cetera. That is in our number, but that's gonna be small in comparison to the size of this multi-hundred million dollar deal. Thank you. There are no further questions at this time. I would like to turn the floor back over to Mike McCarthy for any closing comments. Thanks, Paul, and thanks everyone for joining us this morning for the December quarter conference call. We'll look forward to speaking with you soon. Have a good week. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.