Welcome to the Crexendo Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A 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. Please note that this conference is being recorded. I will now turn the conference over to your host, Jeff Korn. You may begin. Thank you, Mike, and good afternoon, everyone. Welcome to the Crexendo Q3 2023 conference call. On the call with me today are Doug Gaylor, our President and COO, Ron Vincent, our CFO, Jon Brinton, our CRO, and Anand Buch, our CSO. In a moment, Jon will read our safe harbor statement. After that, I'll give some brief comments on our performance for the quarter. Ron will then provide more detail on the numbers before handing over the call to Doug to provide a business and sales update. After that, we'll open the call to questions. Jon, would you please read the Safe Harbor? Yes. Thank you, Jeff. I want to take this opportunity to remind listeners that this call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. All statements made in this conference call, other than statements of historical fact, are forward-looking statements. Forward-looking statements include, but are not limited to, words like believe, expect, anticipate, estimate, will, and other similar statements of expectation identifying forward-looking statements. Investors should be aware that any forward-looking statements are based on assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in the company's filings with the Securities and Exchange Commission, including the Form 10-K for fiscal year ended December 31, 2022, and the Forms 10-Qs filed. Crexendo does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. I'd now like to turn the call back to Jeff. Jeff? Thank you, Jeff. I think by now, most of you know I'm pretty direct, and I don't intend to change that, but this is one of the times where it works very well. This was an excellent quarter across the board. We exceeded my expectations, we exceeded the team's expectations, and we exceeded external expectations. As a matter of fact, last quarter, I was asked if I thought we might reach GAAP profitability anytime during 2023, and I said I did not believe so. I've never been happier to be wrong. In the third quarter, we continued to drive strong growth with a sustained focus on executing against our long-term strategic roadmap. Consolidated total revenue for the quarter was $13.9 million, a 52% increase over the prior year period. Year to date, our revenues have increased 49% to $39 million, compared to $26.1 million in the same nine-month period last year. This is really an amazing turnaround from how we started the year. In addition to the increases in revenue, we importantly achieved GAAP profitability in the third quarter. This has been a key focus of ours for a long time and is a significant milestone for the organization. For several quarters, we have discussed our growth strategy, cost management initiatives, and operational efficiencies, and this achievement serves as validation to much of the work and strategy that we have put together. Furthermore, we now stand on an increasingly sound financial footing, especially after the successful sale of our building. As we have previously discussed, we're not bogged down by debt on our balance sheet, which allows us to remain opportunistic in the capital markets rather than being forced into transactions out of necessity. This prudent approach not only sets us apart from most of our competitors, but also ensures that we make decisions that align with our long-term goals and maximizes value for our shareholders. Organizationally, in the third quarter, we continued to make remarkable progress in reorganizing, integrating, and streamlining our companies to more efficiently operate as one cohesive unit. Additionally, throughout the integration process, we've remained committed to installing a company culture that enhances the collective spirit among our team members, and we continue to prioritize employee satisfaction as our teams join forces. On the sales front, we continue to see significant growth from our dealer and partner channels, which has increased the scope of our sales opportunities and our network of resellers. Anecdotally, we recently held our annual user group meeting, which included our licensees and vendors from five continents and was the largest and most dynamic partner gathering in the history of the platform user group meetings. It was great to see our ecosystem come together in person, and we're already looking forward to next year's event. In a similar vein, during the third quarter, we also continued with the accelerated migration of customers off our Crexendo Classic system to our industry-leading VIP platform. I'm happy to say the end is now in sight for this consolidation, which will ensure that our customers are hosted on one single superior platform, in turn, reducing costs substantially on our end as we sunset the legacy platform and transition valuable engineering and support staff to other parts of the business. With our teams now functioning properly, our top and bottom line results delivering on levels that we expect, and our balance sheet continuing to provide us with increased operating leverage, our focus will remain on three key items moving forward. First, aggressively driving organic growth through securing larger SMB and certain enterprise deals. Secondly, more intensely evaluating potentially accretive acquisition targets, and third, transitioning a significant portion of our software solutions revenue to MRC rather than perpetual license. In conclusion, we are very encouraged by the third quarter results. We acknowledge that our vision of what this organization can do, and it's still a far cry from where we are today. We will continue to work hard on our targets and look forward to what future quarters will hold. With that, I'll turn the call over to Ron for more details on our numbers. Ron? Thank you, Jeff. Good afternoon, everyone. Financial highlights for the third quarter are as follows: Total revenue for the third quarter increased 52% to $13.8 million, compared to $9.1 million for the third quarter of the prior year. Service revenue for the third quarter increased 68% to $7.5 million, compared to $4.5 million for the prior year. Software solutions revenue for the third quarter increased 21% to $4.7 million, compared to $3.9 million for the third quarter of the prior year, and our product revenue increased 119% to $1.6 million, compared to $760,000 for the third quarter of the prior year. We also had strong margins for the quarter. Telecom services came in flat with the prior quarter of Q2 of this year at 58%. Software solutions margins expanded from 67% in Q2 2023 to 72% for the third quarter. Our product margins improved from 38% in Q2 of 2023 to 45% for the third quarter of this year. Overall growth margin expansion to 61% from 58% in Q2 of this year. Operating expenses for the third quarter increased 40% or $3.8 million- $13.5 million, compared to $9.7 million for the prior year. The company reported net income of $1.7 million for the quarter, or $0.07 per basic and $0.06 per diluted common share, compared to a net loss of $696,000 or $0.03 loss per basic and diluted share for the third quarter of the prior year. Non-GAAP net income for the quarter of $3.3 million. That's $0.13 per basic and $0.12 per diluted share, compared to non-GAAP net income of $713,000 or $0.03 per basic and diluted common share for the third quarter of the prior year. Excuse me. EBITDA for the third quarter came in at $1.2 million, compared to $79,000 for the third quarter of the prior year. Adjusted EBITDA increased to $2.1 million, compared to $938,000 for the third quarter of the prior year. A few highlights on the nine months ended September thirtieth. Year to date, total revenue increased 49% to $12.9 million—or from $12.9 million- $39 million, compared to $26.1 million. Service revenue increased 64% to $21.9 million, compared to $13.4 million. Software solutions revenue increased 19% to $12.7 million, compared to $10.7 million, and product revenue increased 122% to $4.3 million, compared to $1.9 million. Operating expenses for the nine-month period increased 42% to $40.8 million, compared to $28.9 million in the prior year. Year to date, the company reported a net loss of only $423,000 for the nine-month period or $0.02 loss per basic and diluted common share, compared to a net loss of $2.8 million or $0.13 loss per basic and diluted common share for the same period of the prior year. Year to date, non-GAAP net income was $5.1 million. That's $0.20 per basic and $0.18 per diluted common share, compared to non-GAAP net income of $1.6 million, or $0.07 per basic and $0.06 per diluted common share for the same period of the prior year. Year to date, EBITDA of $968,000, compared to a loss of $927,000 for the same period of the prior year, and adjusted EBITDA for the nine-month period of $4.1 million, compared to $1.9 million for the same period of the prior year. Our cash balance at September 30 was $7.7 million, compared to $5.5 million at December 31, 2022. Our cash provided by operating activities for the nine-month period was $887,000, compared to $2.7 million used for the same period as the prior year. The third quarter had positive operating cash flows of $1,560,000, compared to negative cash flows of $673,000 for the first two quarters of 2023. Cash provided by investing activities for the nine-month period of $3.7 million, compared to $192,000 used for the same period of the prior year. As we mentioned on the last earnings call, we sold our building in August of this year, and we received $3,792,000 in proceeds from the sale of the building, net of commissions. That's compared to $92,000 used for the purchase of property and equipment for the first two quarters. So that's how we get to the $3.7 million for the nine-month period. Cash used for financing activities for the nine-month period of $2.3 million, compared to cash used of $36,000 for the same period of the prior year. During the quarter, we utilized $1,838,000 for financing activities. $1,872,000 of that was for the repayment of the note payable on our building. I've used up my voice, so I'm going to turn it over to Doug for some highlights on business and sales. Thanks, Ron. It was a great quarter for Crexendo. As both Jeff and Ron have discussed, our 52% revenue increase to $13.87 million for the quarter was driven by impressive performances throughout several segments of the business, all of which I will discuss in further detail. First, I'd like to start by highlighting the organic growth of our telecom services segment, which saw an impressive 11% increase year-over-year, and that growth was fueled by a record number of installations generated by our partner and direct channels. Similarly, our software solutions segment for platform sales demonstrated exceptional results with organic growth of 21%, driven by new logos as well as upgrades from our growing licensee community. Our software solutions segment also witnessed nice improvements in gross margins, as Ron highlighted, which increased from 67%- 72% quarter-over-quarter, as we continue to manage costs and optimize our offerings. Gross margins on the combined telecom services segment for service remained relatively flat at 58% and includes our Allegiant acquisition. Taking out the Allegiant revenue contribution, our classic Crexendo telecom services gross margin was 68% for the quarter. We also saw a nice improvement on the telecom services product gross margin, increasing from 38% in Q2 to 45% in Q3, as we put more focus on the product offering margins for our Allegiant group and our product offerings. Our Allegiant acquisition just celebrated its one-year anniversary last week, and we continue to see nice growth from that group as we saw organic growth in that division of 17% over their standalone third quarter last year. Echoing Jeff's commentary, we have successfully integrated Allegiant into our legacy business, creating synergies that have opened up a wide range of exciting cross-utilization and cross-selling opportunities. Our backlog number, which, to remind you, is the sum of the remaining contract values of our telecom services and our software solutions customers that will be recognized on a sliding scale over the next 60 months, increased by a whopping 46% to $63.4 million year-over-year, and that's a 24% increase from just last quarter. The backlog number includes the Allegiant customer contracts as well. Our backlog number provides a locked-in, robust future revenue stream and solidifies our confidence in reliable future growth. As it relates to sales updates for the quarter, we continue to receive outstanding contributions from our resellers and witnessed impressive growth through our master agent channels, which saw a 25% increase in sales orders from last quarter, and we continue to see great momentum from this sector of the channel. These partnerships have played a pivotal role in expanding our market reach and driving growth. Our reseller channel has continued to perform nicely as we are seeing strong contributions from our partners and seeing large-sized sales opportunities coming through this process. We continue to build on our roster of reseller partners and look forward to working with a growing number of companies as the program continues to scale. We're also continuing to see record elevated demand for our software solutions platform and are seeing strong momentum in that segment of the business. Last quarter, we talked about a large Cisco BroadSoft licensee that is leaving Cisco to launch their Crexendo platform. This quarter, we just landed a large Microsoft Metaswitch platform licensee to move over to Crexendo. We're seeing great opportunities to move licensees from the number one and number two platform providers, respectively, to Crexendo's platform, which is number three and also the fastest-growing platform in the U.S. Some of our competitors have talked of slowing sales due to economic headwinds, yet we have seen strong demand in both segments of our business, and it shows in our results. As an aside, that we have previously mentioned in the past, in the event of a significant downturn economically, I believe that recessionary times actually benefit our industry as businesses look for ways to cut costs and improve efficiencies and productivity, and that's exactly what our solutions offer. As we've previously mentioned, the majority of business customers in the U.S. still have not migrated over to the cloud. It's not a matter of if they move, but when they move and make that migration. We see that continued momentum happening, with our customers and our prospects out there, and that shows in our numbers. Internationally, our sales efforts have continued to gain traction as we address the growing demands of overseas markets, and our commitment to the international expansion is driven by our belief in the transformative power of our solutions on a global scale, and we'll continue to execute both domestically and internationally in future quarters. Operationally, we have achieved yet another quarter of record installations, which demonstrates our ability to efficiently meet growing customer demands at higher levels of volume. Furthermore, our focus on customer satisfaction continues to yield positive results, and customer satisfaction remains at an all-time high, with continued strong reviews on G2.com, which is the technology industry's leading independent review website. On top of the great customer reviews that we continue to get, we were also blessed with multiple customer-selected industry awards that we received for our VoIP solutions, our UCaaS solutions, and our CCaaS offerings during the quarter, including the Product of the Year presented by Internet Telephony. From a product and software standpoint, we have made significant strides in enhancing our, our offerings. At our recent user group meeting, which Jeff referenced, which had record attendance and tremendous energy and electricity at the conference, we unveiled new CPaaS, which is programmable communication capabilities on a call processing as a service type platform. We announced new capabilities via our API 2.0 release to empower our customers with advanced features and functionalities. We also introduced new generative AI technology features that are powered by ChatGPT and the company's contact center solution that will lead us and our partners into new opportunities and solutions for our customers. These investments set the stage for future releases, ensuring that we remain at the forefront of technological innovation within the industry. In summary, this quarter has been an exceptional step in the right direction for our company as we hit record levels across the board. We've experienced remarkable organic growth, our sales efforts have been fruitful, both domestically and internationally, and we continue to witness increased demand for our solutions. As we look to the future, we're eager to continue building on our momentum to realize future success within the organization. Now, I'll now turn it over back to Jeff for any future comments. Thank you, Doug, and I don't have anything more to say at this point. So Mike, why don't you turn this open to questions? At this time, we will 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 keys. One moment please, while we poll for questions. Our first questioner is Vivek Palani from Northland Capital. Hi, I'm Vivek on for Mike Latimore. Yeah, I'm great. How about you? We're wonderful, thank you. Yeah. I'm on for Mike Latimore of Northland Capital. So I have a couple of questions here. The first one is: Do you typically see seasonality in the fourth quarter? If so, is it positive or negative? We've seen some seasonality in the fourth quarter, and frankly, I'll let Doug give a little more detail, but it depends on the year. We've seen certain years when buying decisions are deferred from Q4 to Q1, as people are trying to keep money in their year-end balance. But we've seen that a couple of years, and we've seen that with years where it doesn't happen. So it's not completely seasonable, but Doug may be able to give you a little more detail on sales. Yeah. I like to always use the reference that every business has got a phone system, and most of them need our services out there. And so it's not as seasonal as you would see in other industries. So, we're fairly consistent. We do see a little bit of a bump in Q4, typically, because we have our user group meeting, which adds to a little bit of a revenue pop. That is a one-time event that we have each year in the fourth quarter. But aside from that, you know, our business is fairly consistent across the board. Great. My next question is: What about the levels of cross sales you are seeing with Allegiant? Yeah. So Allegiant is a great component of our business today, and so, they have their UCaaS offering, which is very similar to what we have on the telecom services side of the house. But they also have managed services offerings and data services offerings that are unique to that division of our company, and we're expanding that and cross-selling opportunities to our direct sales team as we speak. So, that initiative is just getting underway, and we anticipate that having a nice impact on our direct sales offerings across the board. Yeah. That's it. Thank you. Have a nice day. Thank you, sir. You have a great day, too. We now hear from Tony Felling with Lake Street Capital. Hey, guys. Congratulations on a great quarter. Thank you, Tony. Good to hear from you. So filling in from Eric Martinuzzi, new here, but, was there anything kind of one time in the quarter where, you know, or is this kind of just the new run rate we should think about going forward? I know you guys aren't giving guidance, but you're taking a nice stair step up here. I won't promise you that this is the run rate. I certainly hope it will be, and we're going to steer for that to be. But there were no one-time events here. This was just, business as usual, and we just hit, we fired on all cylinders. Yeah. I think it was good execution on all sides of the equation. So as I mentioned in my comments, you know, we saw strong increases organically from all divisions of the business. So, you know, I think when you have a good product and, customers need that, solution, you know, it's a perfect fit for what we're offering out there right now. That's great. I know you talked about, you know, obviously, for the future accretive M&A targets. Is there anything near term M&A that you can talk about, or give us some insights on what you're looking at? As you may recall, when I took over, I put the brakes on looking at acquisitions because I thought it was imperative that we fix what we have, get all the synergies out of the business, and stop the burn, which we were having at the beginning of the year. We've righted the ship, and we're now in a position where we're gonna start to look. We don't have anything immediately on the horizon, but as Doug likes to talk about, we have the integrated fishing pond where we could first start looking, and we have other people who reached out to us from time to time, but nothing specific immediately on target, but we're now ready to start looking again. Gotcha. That's great. Well, congrats again. Appreciate you taking my call. Thank you, sir. Our next questioner is Chris Sakai with Singular Research. Hi, good afternoon. Just a question. What was this $1.459 gain on sale of property and equipment in the quarter? Yeah. So, last quarter, we announced that we had a contract to sell our building, and we sold it the day before the earnings call. Last quarter, we sold our corporate headquarters building for $4 million. It generated $1,459,000 gain on the sale. Okay. What looks like service revenue gross margin lowered from about 70% - 58% year-over-year. What was the reason for that? Yeah. So when we made the acquisition of Allegiant in November of last year, so it wasn't in our first nine months of the year. So our traditional telecom services gross margins were typically between 68% and 71%, depending on which quarter you were looking at. If you were to carve out, we did the acquisition of Allegiant, so that's skewing the numbers because they have lower margins, given that their service offerings bundled in with all their additional IT services. And so if you look at them independently, our gross margins for the quarter for their Crexendo Business Solutions telecom services is 68% for the quarter. And the last quarter was 69%. So if you carve out that, but Allegiant took, came in at 42% for the quarter, so that was a drag on our margins. Can you talk about your international opportunity? What were your best performing regions? You want to take that, Doug? Sure. I mean, excuse me one. Yeah, I think a lot of the growth that's coming out as a percentage is actually coming out of the Australia region. Obviously, we have numerous partners in the U.K., but our biggest partner acquisition here over the last couple of quarters has been in Australia, as we talked about at the last earnings call. Okay. And then I guess last for me, would you guys ever consider reinstituting the dividend? That is very low on my list of things I would consider, but I'll never say never. Yeah. Right now, we're looking at reinvesting back into the business, Chris. And I mean, I think that you can see that over the last couple of quarters, is that by reinvesting back into the business, you're seeing a nice spike in the revenue growth and the bottom line. And so, you know, that's really our focus right now, is to reinvest back in the business. We simply have better uses of the money by investing and doing acquisitions. Okay, great. Well, thanks. Thank you, sir. Our next questioner is Maj Soueidan with Geo Investing. Hello. Hi, Maj, how are you, sir? Hi, Jeff. How you doing? Hi, Doug. I got a quick question, and it's kind of on the acquisition front, really. I'm just curious what you're seeing out there in terms of pricing of some of maybe some candidates you might be looking for, and what areas you might be looking to to kind of acquire companies into. I noticed that Ooma recently made an acquisition. Here on October 23rd, they bought a company, I guess, called 2600Hz. I don't know much about the company, but it seemed they paid, like, 5x revenue, which I thought was interesting compared to what you guys are trading at today. I was wondering if you could talk about what they bought. I don't know. Is there any kind of comparison to what you guys do, so we can- Well, Maj, let me answer your second question first. And there is a lot of a similarity in that they are a platform provider, as are we, and I obviously am very excited that a platform provider with falling revenues and not nearly as fast-growing as we are, we are the fastest growing platform in the country, the third largest, which is feature-rich and best of breed. So if a falling revenue platform provider can get four times five revenue, it's obviously exciting to me. Nonetheless, obviously, we're not sitting here licking our chops. We're here doing our best job every day to go ahead. But if that's a precursor of what our value would be, that would be very exciting. But at this point, we really don't know if it's one-off or that's what the value of the platform is. But again, our job here is to continue to make this company best every day, continue to improve the platform, continue to improve the revenues, and continue to keep it the fastest growing. And that obviously will increase our value no matter what outside values are. And to your- I'm sorry. Go ahead. I'm sorry. Go ahead. I just remember on your first conference call, you talked about, I think someone asked you what would not make you sleep at night, and you had said someone coming in acquiring you for a price you think you're much less than you're worth at, right? So I thought that was interesting. It is interesting in that, you know, until the stock reaches a level that we all think it believes to, that still does keep me up at night. But, the 4.5x revenue on the platform, forward, does... Will probably let me get a little better sleep, this coming quarter. Yeah, I think if you saw that press release, Maj, it highlighted that 2600Hz. Again, you're correct. I think they're acquired at 4.7x or 4.8x revenue. But they were doing, they've got about 500,000 or 600,000 licensees on their platform. We've got 3.5 million+ licensees on our platform. So, you know, as we look at being the third largest and fastest growing platform out there, you know, as Jeff said, you know, it was interesting to see such a high valuation. We feel like we're extremely undervalued and that, you know, that hopefully maybe resets the bar a little bit out there in the industry. But we know that, you know, we're gonna continue growing and, you know, we're really focused on our growth and not what's going on out there in the space. But that's a very good comp for us to be able to refer to. When it comes to our acquisitions of licensees or other opportunities, you know, the Allegiant acquisition was a great opportunity for us. You know, we acquired that for less than 1x revenue. And I think, you know, if you look at just an ongoing revenue stream without a technology play, you know, that's probably where the valuations still come in at from a potential acquisition strategy. You know, we feel like our technology suite is pretty strong right now, so, you know, our acquisition strategy would really be focusing on gaining customers and revenue stream. With that said, Maj, valuation depends upon what we're looking at, what technology they may have and what the value of the customers are. So it's hard to give a straight answer, but obviously we don't want to pay more than market value, but we want to acquire good customers and good technology, and some of that may be worth a premium, but we don't have anything on the table at the moment, so it's hard for me to give you a serious answer as to what we would pay for something. Okay. And can I ask two more questions, or should I go back in the queue? No, go ahead. No, go ahead. Yeah. So, I think you've also talked about, you know, both you and Doug, in the past, about how some of the bigger competitors, like RingCentral, for example, have to change the way that they compete in terms of how they comp their sales reps, where they were paying them aggressive sales comps, you know, when we had a low rate environment, I mean, and then, you know, they levered up to do that, which, and there was a long ROI on some of that, on some of that investment. And I'm wondering if, are you seeing that change now, where they can't do that anymore? 'Cause they, you know, as it's maybe harder to borrow money to do that and, you know, and finance that, those kind of costs. So are you seeing any of that benefit, any of that going on? Is it benefiting you guys at all? It... I'll let Doug answer, but it is helping us some, and I wouldn't—can't, wouldn't be the verb I would have used. I would have used shouldn't, because. Okay. Some of our competitors were paying spiffs that made it unprofitable to take the business, but they had dreams of acquiring revenue, and they paid an unreasonable amount for it, thinking it was going to get a multiple of five, six, seven. At multiples of one or two on valuation, it doesn't make sense. So I think the market has rationalized and stabilized. But I'll let Doug give a little more detail on that. We still see a lot of those extremely unprofitable spiffs out there from our competitors. You know, sometimes it just boggles the mind at what some of these guys are offering to try and gain a new customer. I think our model has been very consistent, and I think our partners appreciate that and the fact that, you know, we do a good job for the customer, and our customers are extremely happy after the fact. So, you know, I think a lot of the competitive challenges out there are still there, but I think it's making a lot of our bigger competitors reevaluate. You know, RingCentral, in their most recent comments, said that they're gonna start focusing on the SMB market as opposed to the enterprise market. You know, that's where our sweet spot has always been. So I think we're doing things right out there and people are starting to take notice. Okay. That's all I got. Thanks. Thanks, Maj. Yep. Bye. Our next questioner is Kat Knop with B. Riley. Hi, Kat. Hi there. On for Josh today. So I just wanna go back to the international expansion a little bit here. So I know on the last call, last quarter's call, you talked about having maybe 20 or so international service providers. Has that improved at all? And if you could talk a little bit more about maybe some more tangible data points you're seeing from the international expansion. Sure. I'm gonna let Anand answer that. Yeah. So let me speak to that. I think as a function, I think, Doug has mentioned, if you look at all of our licensees as a whole, you know, we're at 200+. And so if you look at the international market as a percentage, and as we're growing, it's obviously a market that we started expanding into only a couple of years ago. So to answer your question, yeah, you know, do we see the increase of one or two additional every quarter? That's typically kind of where we see, and you can kind of look at the numbers. Now, specifically, if you look at what's happening in a lot of the international markets, if I speak from a macro perspective, they are actually behind the curve when it comes to their evolution to convert to the cloud. You know, the way business is done in those markets is a little bit different from the types of channels that we have. And so what we're doing is we're grabbing partnerships, just like the one in Australia, for example, of additional players that are taking a channel strategy to market, so we can leverage that given the size of our team. In general, you'll kind of continue to see that ebb and flow, but keep in mind that, you know, relative to obviously when we started the original footprint in North America, the evolution or the customer journey is kind of trailing that path. Okay. Helpful there. Thank you. And then can you—so I know one of your new focus, probably existing, but also you, you highlighted it early on in today's call, focus on winning larger businesses and larger enterprises here. So, can you just share a little bit more about what you've seen in the quarter in terms of winning larger business and kind of, a roadmap for the future? Sure. I'll pass that on to Jon. Jon? Hi, Kat. So on the, you know, on the two parts of the business, we're seeing a larger customer or a larger potential licensee. So I'll take the telecom services side of the business first, where we have seen growth overall, continuing to trend up on our average customer size, and part of that is, you know, a few months ago, we introduced an omni-channel CCaaS offer, which helps us expand better into a medium and large size market. Part of it is the growth in our distribution through master agents, as Doug mentioned earlier, which is helping us also speak to a larger customer, and we continue to see really good growth in that funnel. Sometimes those opportunities take a little longer to close than the pure SMB stuff, so, we're working those through the funnel as they close, but we're continuing to see good expansion there, across our retail offers. On the licensee side of the business for software solutions, we are seeing larger service providers turning to us than we would have seen before, partly because of things, trends we've talked about before with the Cisco BroadSoft acquisition now being several years old, and Microsoft's Metaswitch acquisition being several years old. In beginning to... We're getting converts from people that have been in their larger service providers, that have been in their partner base, that are licensing our platform to deploy it as part of their UCaaS offers, as a competitive alternative to the offers from Cisco and Microsoft. We've talked a bit about some of the key wins publicly. Last quarter, we also had a nice new add from a Microsoft Metaswitch partner who chose to license our platform for their UCaaS offering. So in that part of the business as well, we continue to see growth into a market segment that we hadn't worked in before. Okay, great. That was helpful. And then just one more from me. So I know in the past you've talked about renegotiating rates with vendors and suppliers to reduce costs further, as a part of, like, your, your guys' greater plan. Can you talk about any updates you've seen on that front? Yeah, Kat, that's an ongoing process. We look at all of the contracts from the individual companies, we're individual companies, and we combine them and renegotiate prices with one vendor to get a lower price. I, I can't give you... I don't wanna give you specific examples, but it's an ongoing process, and we do it regularly, and we look at every expense every quarter, and where we see duplication, we seek to avoid it. Okay, great. Thanks. Our next question- Thank you, Kat. is Michael Kaufman with MK Investments. Hi, Michael, how are you, sir? If you would like to ask a final question, then please press star one on your phone. Congratulations on an incredible quarter. Thank you, Michael. More importantly, the fact that you're cash flow positive when many of your major competitors are drowning in debt. So, I believe you're truly a diamond in the rough, and I guess a mention was made of the Ooma acquisition. I believe that you'll start seeing more coverage on the company and that the valuations will start to improve commensurate with the good work that you guys are doing. So, just keep up the great work and stay with the basic, fundamental finance propositions, and you'll be going to the diamond in the sky. Well, thank you, Michael. And I guarantee you there's nobody in this room who does not believe that the business should be managed based upon fundamental business principles. We all do that. We're doing that carefully, and I think the results we have seen since Q1 reflect that. But your support is greatly appreciated, and I certainly hope the analysts who are listening to you will start to agree, and we'll see the valuations grow up. But thank you, Michael. Take care. We have reached the end of our question and answer session. Do our hosts have any closing remarks? No, sir. Mike, I appreciate you taking the call, and I genuinely appreciate everybody who called in, listened, and asked questions. As I said before, we're very, very excited about the future, and I'm excited for us all to speak with you again in March, when we disclose Q4 results. So until then, take good care. Bye. Thanks, everybody. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.