Good day. Thank you for standing by. Welcome to the second quarter 2023 FranklinCovey earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Derek Hatch, Corporate Controller. Thank you. Good afternoon, everyone. On behalf of FranklinCovey, I wanna welcome you to our earnings call for the second quarter of fiscal 2023, and wanna hope that you and your families are enjoying some nice warm west spring weather on today as well. Before we begin, we'd like to remind everybody that this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon management's current expectations and are subject to various risks and uncertainties, including, but not limited to, the ability of the company to stabilize and grow revenues, the acceptance of and renewal rates of our subscription offerings, including the All Access Pass and Leader in Me memberships, the duration and recovery from the COVID-19 pandemic, the ability of the company to hire productive sales professionals, general economic conditions, competition in the company's targeted marketplace, market acceptance of new offerings or services and marketing strategies, changes in the company's market share, changes in the size of the overall market for the company's product, changes in the marketing and the training and spending policies of the company's clients and other factors identified and discussed in the company's most recent annual report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. Many of these conditions are beyond our control or influence, any one of which may cause future results to differ materially from the company's current expectations, and there can be no assurance the company's actual future performance will meet management's expectations. These forward-looking statements are based upon management's current expectations, and we undertake no obligation to update or revise these forward-looking statements to reflect events or circumstances after the date of today's presentation, except as required by law. With that out of the way, we'd like to turn the time over to Mr. Paul Walker, our Chief Executive Officer. Paul? Thank you, Derek. Hello, everyone. Thanks for joining us today. I too hope you're doing well. I'm joined here today by Steve Young, our CFO, Jen Colosimo, President of our Enterprise division, Sean Covey, President of our Education division, and several members of our executive team. We're happy to have Colleen Dom here, our Head of Operations as well. We're also happy to have Bob Whitman, our Executive Chairman, with us also. In the midst of an increasingly uncertain economic environment, we're pleased to report that our second quarter revenue was $61.8 million or 9% higher than prior year. In constant currency, our second quarter revenue grew approximately 11% to $62.7 million even after lower than anticipated sales in China and the decrease in rental income, which combined made up an additional $1.1 million of impact. We're also pleased to report that Adjusted EBITDA for the fourth quarter was $8.2 million. In constant currency, Adjusted EBITDA for the quarter was $8.4 million and would have been even higher if not for China and the absence of the rental income. The current economic environment obviously continues to be a challenging one for both companies and investors. Everyone is hiking in deeper snow now than they were even 90 days ago. Based on the strength of the quarter and year-to-date results and our confidence in the strength of our pipelines, even in this environment, we're pleased to be able to reiterate our full year Adjusted EBITDA guidance in constant currency of between $47 million and $49 million. As to revenue, compared to our estimate at the beginning of the year of $294 million, we expect revenue to be impacted by approximately $3.5 million due to FX, an additional $2.5 million because of slower than expected recovery of sales in China and Japan, and by an additional $4 million to reflect the expected impact of the deeper snow through which our clients are now hiking. Importantly, as you know, FranklinCovey's strategy, business model, and approach were really developed and refined with times like these in mind. Specifically, five key elements of FranklinCovey's strategy and business model were each designed, on one hand, to allow us to take advantage of opportunities, the kinds of opportunities we continue to see, and on the other hand, to build in resilience and to enable us to achieve strong growth in revenue, Adjusted EBITDA and cash flow, even in challenging economic circumstances. The individual and collective strength of these five strategic elements, which you can see shown in slide four, is being reflected in our second quarter year to date and latest 12-month results. These five elements of our strategy and business model are as follows. The first is that we've chosen to help clients. The types of challenges we've chosen to help clients address are mission-critical and extremely durable. As you know, we help organizations and schools achieve the kinds of results that require the collective action of significant numbers of people. These kinds of challenges are mission-critical and extremely durable, and they don't become less important or easier when the external environment becomes more difficult. In fact, quite the opposite. As a result, a number of what are now among our largest client relationships were first established during and immediately after the great financial crisis. A key metric which shows both potential clients' ongoing desire to address these challenges and their trust in selecting us as their partner is our ability to win new clients or new logos in both good and more challenging times. We're pleased that our contracted new logo revenue in the second quarter, year to date, and for the latest 12 months has remained very strong. A second key element of our strategic strength is the effectiveness of our solutions in helping clients address these challenges. This builds tremendous client commitment and loyalty, which in turn results in achieving strong growth in subscription and subscription services revenue, having a significant% of clients who enter into multi-year contracts, achieving strong levels of contracted revenue and high levels of revenue retention, and having clients purchase significant amounts of services to help them achieve their objectives. We're pleased that even in the current economic environment, all four of these metrics remain strong in the second quarter, year to date, and for the latest 12 month periods. First, subscription revenue remained very strong in the second quarter, year to date, and for the latest 12 months. As shown in Slide 6, total company subscription and subscription services revenue grew 15% in the second quarter, has grown 18% year to date, and 22% for the latest 12 months. With All Access Pass subscription and subscription services revenue growing 11% in the second quarter, which was on top of 29% growth in the second quarter of last year, 15% year to date, which was on top of 28% growth year to date through the second quarter of last year, and 22% in the latest 12 months. In our education business, a Leader in Me, subscription and subscription services revenue grew 30% in the second quarter, 27% year to date, and 23% in the latest 12 month period. Second, as shown in Slide 7, the percent of our North America All Access Pass subscription contract value, represented by multiyear contracts of at least two years, has increased significantly from 47% in last year's second quarter to 55% in this year's second quarter. This reflects our clients' long-term commitment to address their big opportunities and challenges utilizing our solutions. Third, we also achieved strong levels of invoice revenue and high revenue retention. Again, we're pleased with the significant levels of revenue that we contracted during the second quarter and in the year to date in latest 12 month periods. As shown in Slide 8, invoice revenue in the education division grew 30% or $1.8 million in the second quarter, 29% year to date, and 19% for the latest 12 months. Our balance of deferred education revenue increased $3.1 million or 18% to $20.2 million. As shown in Slide 9, invoice revenue in our international licensee partner operations grew 13%, with some partners operating well above pre-pandemic levels, while others whose economies were harder hit are working their way back to pre-pandemic levels. Invoice revenue in China and Japan continued to be below prior year, but is expected to improve in the back half of this year. As shown in Slide 10, in the enterprise division, in last year's second quarter, we established a new high watermark for a second quarter for the total amount of All Access Pass amounts invoiced, with invoiced amounts increasing 25% or $5.6 million to $28.5 million, which was somewhat benefited by comparing to the prior year's pandemic-impacted result. We're pleased that even against this high watermark and in a more difficult environment, we were able to further increase the total amount of All Access Pass amounts invoiced in this year's second quarter, and for the year to date in latest twelve-month periods. Invoiced amounts grew 4% or $1.2 million to $29.8 million in the second quarter, 8% or $3.4 million year to date, and 11% or $9.7 million for the latest 12 month period. We're pleased with the ongoing strength of the total amounts we invoiced during the second quarter and the fact that this growth rate was less than last year's second quarter primarily reflects two factors. First, that we were comping against the magnitude of last year's 25% growth. Second, that in this environment, while the number of All Access Pass clients who renewed or expanded their All Access Pass in this year's second quarter increased, these increases were somewhat offset by an increase in the average size of the All Access Pass contracts not able to renew in the second quarter. Importantly, as shown in Slide 11, for the entire company, our balance of billed and unbilled deferred revenue at the end of the quarter was $145.8 million, reflecting growth of $26.5 million or 22% versus last year. Of this $26.5 million increase in total deferred revenue, $5.8 million was growth in deferred subscription revenue, representing growth of 8%, with the other $20.7 million reflecting 42% growth in unbilled deferred revenue, which has not yet been invoiced, but which will be invoiced with 100% surety in the coming quarters. This growth in unbilled deferred increases visibility and predictability into future revenue and provides a meaningful tailwind for growth in our invoiced amounts in the coming quarters. Fourth, as shown in Slide 12, purchases of All Access Pass subscription services also grew in the quarter. The amount of All Access Pass subscription services revenue in the enterprise division has grown significantly over the years, increasing from 44% of total subscription sales in fiscal 2020 to 52% in fiscal 2021. It then increases significantly to 62% of subscription sales in fiscal 2022, which again was somewhat benefited by it comping against the prior year's pandemic-impacted results. It's remained at this high level through this year's second quarter. In last year's second quarter, sales of subscription services in the quarter grew a very significant $3.9 million or 53%. We're pleased that even against this difficult comp and in a more difficult environment, we were able to achieve growth in the amount of services purchased in this year's second quarter of $200,000 or 2%. This reflects the ongoing commitment of our clients have in solving their must-win challenges even in this difficult environment. The third element of our strategy is the significant diversity in our base of clients in the industries and segments in which we operate in the Enterprise Division, our Education Division serves a completely different market. This diversity provides a strong foundation for growth and can limit the extent of concentrated impact of economic storms that may occur. No individual client accounts for more than 2% of our revenue, and as you can see on slide 14, we have no significant concentration of revenue in any particular industry. Fourth, the strength of our subscription business model is driving strong growth in revenue, Adjusted EBITDA and cash flow. Three key factors underlie the strength and growth of our subscription business and its ability to drive strong growth in Adjusted EBITDA and cash flow. First, is that the lifetime customer value of a typical subscription contract is large and growing. For example, as shown in slide 16, and as we showed last quarter, the typical All Access Pass contract with its relatively large initial value, high annual revenue retention, strong growth margins, and significant amount of recurring All Access Pass subscription services, ultimately becomes an asset worth hundreds of thousands of dollars. Second, that the increasing duration of our subscription contracts further increases their durability and their value. Third, the third point is that our constant, our cost of acquiring a new All Access Pass subscription is not only much less than the contract's lifetime value, but even less than a client's first year All Access Pass spend. The combination of these factors allows for the achievement of significant growth in All Access Pass and Leader in Me revenue, with high flow-through of incremental revenue to increases in Adjusted EBITDA and cash flow. Finally, our significant liquidity provides us the flexibility to take advantage of opportunities for accelerated growth. Over the years, we've built up and maintained significant liquidity and have no net debt. As a result, subject to rigorous budgeting and investment processes, we've been able to consistently make investments in three important areas. First, we've always been able to make significant ongoing investments in growing our business through organic investments, in growing our sales force, building our client-facing teams, and investing in content and technology. Second, we've also utilized our liquidity to make a series of tuck-in acquisitions that have provided us with key strategic capabilities. At the same time, over the years, we've returned almost $200 million to shareholders in the form of stock repurchases. We're pleased that even after investing $25 million of excess liquidity for stock repurchases in the last four quarters, which includes approximately $3.8 million of stock repurchases in the second quarter, we ended the second quarter with $55.1 million in cash, and with our full $15 million revolving credit facility undrawn. During the second quarter, our board of directors both replenished our stock repurchase authorization and increased it to $50 million. In addition, subsequent to the end of the quarter, we entered into a new credit facility at an attractive rate that increases our revolving credit amount from $15 million to $62.5 million, providing us with significant flexibility for both repurchasing stock and making strategic acquisitions. The individual and collective power of these five key elements has been very evident in the strength of our business over the past years, and in our continuing strength in the second quarter, year to date, and latest twelve-month periods. As a result of this ongoing strength, as we'll discuss in our guidance section in a few minutes, we expect to generate Adjusted EBITDA between $47 million and $49 million in constant currency in FY2023, and in constant currency to be able to achieve our targets of $57 million in Adjusted EBITDA in FY2024, and $67 million in FY2025. I'd now like to ask Steve to share us some headlines on key revenue and profitability metrics and to review our performance for the quarter and year-to-date periods. Thank you, Paul. Good afternoon, everyone. It's nice to be with you. As Paul said, I'd like to start by sharing some headlines regarding our revenue. As Paul mentioned, as you can also see in slide 18, our revenue growth in the second quarter continued to be strong, with revenue increasing 9% to $61.8 million compared to the $56.6 million in last year's second quarter. In constant currency, our revenue grew an even more rapid 11%, even after lower than anticipated sales in China and a decrease in rental income, which combined made up an additional $1.1 million impact. As also shown, our revenue growth year to date through the second quarter was 11%, with growth of 14% in constant currency. For the last 12 months through the second quarter, revenue grew 12% and grew 15% in constant currency. Our subscription and subscription services revenue grew even more rapidly. As you can also see in slide 18, total subscription and subscription services revenue grew 15% in the second quarter, 18% year to date, and 22% in the last 12 month period, with All Access Pass subscription and subscription revenue growing 11% in the second quarter. As Paul mentioned, on top of 29% growth last year, and growing 15% year to date, on top of 28% of year to date growth last year, and growing 22% in the last 12 months. Leader in Me subscription and subscription services revenue-Growing 30% in the second quarter, 27% year-to-date, and 23% in the latest 12 month period. Durability of our revenue is also continuing to increase and our visibility into future revenue growth continued to expand. As also shown in slide 18, our balance of deferred subscription revenue billed and unbilled at the end of the second quarter increased $26.5 million, or 22% to $145.8 million. Finally, as also shown in slide 18, for the last 12 months through the second quarter in our North America enterprise operations, the percentage of our total All Access Pass invoiced revenue represented by multi-year contracts of at least two years increased to 55%, up from 47% last year. I'd also like to share some headline profitability metrics. As shown in slide 19, our gross margin percentage in the second quarter remained very strong at 76.4%, representing the combination of 46 basis point increase in gross margin in the Enterprise Division and 150 basis point decrease in gross margin overall. Primarily reflecting an approximately 500 basis point decline in Education Division gross margin percentage, resulting primarily from conducting several large in-person marketing events during the quarter. The 150 basis point decrease in gross margin in the quarter is consistent with the year-to-date gross margin decrease of 159 basis points and the 163 basis point decrease for the latest 12 months. Operating SG&A as a percentage of sales continued to improve in the second quarter, decreasing another 54 basis points to 63.2% compared to 63.5% in last year's second quarter, and improving 133 basis points to 61.2% year-to-date and for 242 basis points for the latest twelve-month period to 60.2%. Adjusted EBITDA in last year's second quarter increased $2.9 million or 57% to a record $8 million. We are pleased that even after significantly increasing our investment in hiring new salespeople at the end of last year and expanding our other client-facing teams and making significant investments in completing the development of our Impact Platform, as expected, Adjusted EBITDA in this year's second quarter increased further from $8 million to $8.2 million, which is $8.4 million in constant currency. Year to date, Adjusted EBITDA increased $1.7 million or 9% to $19.7 million, and in constant currency increased $2.7 million or 15% to $20.6 million. For the latest 12 months, Adjusted EBITDA grew $6.8 million or 18% to $43.9 million, and in constant currency grew 24% to $46 million. Our cash provided by operating activities during the first half of this year was $11.2 million compared with $23.2 million in the first two quarters last year. The difference was primarily attributable to changes in working capital during the year related to more cash used to pay accounts payable and accrued liabilities, plus changes in the growth of deferred revenue compared to the prior year. During the first two quarters of FY2023, our collection of accounts receivable remained strong and provided the necessary cash to support our operations, pay our obligations and make critical investments. We expect our cash flow from operating activities in the back half of the year to be strong and even stronger than the back half of last year. As Paul noted, even after investing $25 million of our excess liquidity for stock repurchases in the last four quarters, including $3.8 million in stock repurchases in the second quarter, we ended the quarter with $55.1 million in cash and with our full $15 million revolving credit facility undrawn. Our strong and increasing liquidity adds FranklinCovey optionality as we continue to invest in our business, evaluate potential acquisition opportunities, and continue to look at ways to further enhance shareholder value. Finally, to provide a little more detail on the factors underlying this strong performance, focusing on the results of key areas of our company. Specifically in our enterprise business in North America, in our enterprise business internationally, both in our direct offices and international licensee partner operations and in our education business, almost all of which is in North America. First, as shown in slide 20, results in our enterprise business in North America were strong in the second quarter year-to-date and in the latest 12 months. Revenue in North America, which accounts for about 73% of total Enterprise Division revenue, grew 8% in the second quarter, 12% year-to-date, and 15% in the latest 12 month period. Our U.S.-Canada area of business grew at a strong 11% in the quarter, but was tempered by an 11% softening in our government revenue. Subscription and subscription services revenue in North America grew 7% in the quarter, 13% year-to-date, and 19% for the latest 12 months. Our balance of deferred revenue billed and unbilled in North America grew 22% compared to last year's second quarter balance. The percentage of North America's All Access Pass invoiced re-revenue represented by multiyear contracts increased to 55% for the latest 12 months, as we said before in the second quarter, up from 47% last year. Second, as shown in slide 21, revenue growth was strong in our offices in the U.K., Ireland, Germany, Austria, Switzerland, and Australia, countries which together make up approximately 48% of total international sales and where All Access Pass makes up a substantial portion of those sales. Revenue in these offices grew 8% in the second quarter, 10% year-to-date, and 20% in the latest 12 month period. All Access Pass subscription and subscription services sales, which make up approximately 83% of total sales in these countries, grew 4% in the quarter, 9% year-to-date, and 22% for the latest 12 month period. In our offices in China and Japan, which account for approximately 52% of total international sales, widespread COVID-related lockdowns in China over the past 18 months, which started to loosen in the second quarter, together with a very cautious and slow return to normalcy post-COVID in Japan and the negative impact of FX impacted results in these two countries as revenue declined by 17% in the second quarter, 12% year-to-date, and 23% in the latest 12 month period. Our strong overall company results were after absorbing these impacts in China and Japan. These pressures appear to be easing, and we are expecting growth in these countries in the third quarter and beyond. As also shown in slide 21, our international licensee partner revenue increased 13% in the second quarter, 11% year-to-date, and 16% in the last 12 months. Our licensee partners' operations continue to strengthen despite world economic conditions. Finally, as shown in slide 22, the results of our education business, which account for approximately 24% of the total company revenues, were very strong, with education revenue growing 28% or $3.1 million in the second quarter. Excluding approximately $600,000 of low-margin symposium marketing revenue, where our clients and prospective clients gather to hear best practices and techniques surrounding the Leader in Me process, revenue still grew $2.5 million or 23%. Education revenue increased 25% year-to-date and 20% in the last 12 months. Education subscription and subscription services revenue growth was very strong, increasing 30% in the second quarter, 27% year-to-date, and 23% in the last 12 months. Education's balance of deferred subscription revenue grew 18% in the second quarter, and our year-over-year retention of Leader in Me schools remained very high at approximately 90% for the latest 12 months. Paul, turn the time back to you. Thank you, Steve. Thanks for taking us through that. Maybe just stepping back for just a minute before we move to guidance and outlook. In this environment, we're often asked a couple of questions. First, whether organizations and schools are still engaging us on major behavioral change initiatives. Second, how we're thinking about the ongoing growth of our revenue-generating client-facing roles, including client partners. The answer to the first question, whether organizations or schools are still engaging us on major behavioral change initiatives, is an emphatic yes. While it's true that some organizations are hunkering down, as occurred during the early stages of the pandemic, many others see this as a critical time to strengthen their organizations by putting extraordinary focus on major strategic objectives, increasing the capability of their leaders, by building more strength into their culture, and by increasing the effectiveness of every individual to narrow focus to the most important organizational priorities. Last week, we convened a group of chief human resource officers and chief learning officers from 17 of the largest companies in the country. Collectively, they employ more than two million people. We spent the entire day discussing the areas in which they and their CEOs are most focused, how they're organizing to drive collective action on their most important objectives. Over and over, we heard these leaders discuss the high correlation between leadership capability and financial performance, the importance of culture, and the power of focusing and aligning organizations to improve execution. FranklinCovey is a trusted partner to our clients in each of these areas. As shown on slide 23, I'd like to briefly touch on a few recent client wins that illustrate the type of positive momentum we're seeing across the majority of our client base right now. First is a recent new client win with a large organization who's engaging us on a major sales transformation initiative that will touch more than 5,000 of their sales professionals around the world. This is a five-year All Access Pass contract. A second is a large multinational information technology consultancy whose All Access Pass actually expired six months ago, resulting in a non-renewal at that time as the client wrestled with what was an uncertain economy and what that might mean for their business. However, in the second quarter just ended, we won this client back for a new three-year contract with significant subscription services attached. A third is a large transportation company that expanded their All Access Pass seats from 1,500 to 9,000 in the second quarter, so that we can now help them address the entirety of their leadership population globally. Maybe just one more from our Enterprise Division, a leading global food and beverage company renewed their pass in the second quarter, and at the same time expanded their All Access Pass seats so that they can scale our project management, unconscious bias, and 7 Habits solutions further into their organization. Also importantly, in our Education Division, where the team has successfully been pivoting from selling Leader in Me not only to individual schools, but also to entire districts and states, we won our second state-funded contract and have closed district-wide sales with more than two times the number of districts this year than we had at the same point last year. To answer the second question, how are we thinking about the ongoing growth of our revenue-generating, client-facing sales roles, including client partners? The answer is that we continue to see this as a significant piece of our overall growth strategy. As you can see shown in the chart on slide 24, since the end of fiscal 2012 through the end of fiscal 2022, we've grown the size of our sales force by 250%, from 120 client partners to 300 client partners. Of these additions, at least a third have been added in just the past four years, meaning we have a significant portion of our sales force who are still in ramp, many of whom are in the early stages of that ramp. These ramping client partners represent a significant source of future revenue growth as the embedded future revenue from these from the successful ramp of these new client partners represents tens of millions of dollars of future revenue growth. This growth in the number of new client partners has been occurring, we've also been growing two additional important client-facing revenue-generating roles: our All Access Pass implementation strategists and our Leader in Me coaches. These two groups play a critical part of our account management strategy. They partner with our client partners to expand, add services, and ensure the successful renewal of each of our All Access Pass and Leader in Me clients. As you can see shown in the chart on slide 25, the number of people hired for these roles has also grown steadily since the launch of our subscription business, more than doubling from 70 in FY2016 to 149 at the end of FY2022. We continue to focus on hiring aggressively to match the magnitude of the big opportunity before us, there's enormous value to making sure each one of these people ramps successfully. Both generally and particularly in this more difficult environment, we're going to spread the hiring of this and future year's hirings a little more evenly rather than bunching them all up at year-end. This will allow us to ensure each of these people receives the right amount of ramp support, both in the current environment and thereafter. We're pleased that because of our strong solutions and their ability to address must-win objectives for our clients, our compelling subscription business and our strong business model, we're able to make these ongoing investments to accelerate our growth in revenue, while at the same time accelerating our growth in Adjusted EBITDA and cash flow. I wanna express my huge appreciation to our amazing clients and to our teams of amazingly talented and committed people who serve them. They make the impact we're having possible. I'd now like to turn some of the time to Steve to review our guidance and multi-year outlook. Steve? Thank you again, Paul. Everyone might want to refer to slide 26. Driven by the continued strength, strategic durability, and future vis- ability provided by our All Access Pass and Leader in Me membership subscriptions, which due to their high revenue retention, high lifetime customer value, and their being highly attractive to new customers, have resulted in accelerated growth over the past year. They have also driven strong performance through the first 2 quarters of this year. Based upon that primarily, we're affirming our previously announced guidance that Adjusted EBITDA for fiscal 2023 will increase to between $47 million and $49 million in constant currency compared with the $42.2 million in Adjusted EBITDA achieved in fiscal 2022. We expect to achieve this growth even after continuing to make increased investments to add new client partners, other personnel, and investments in delivery portals and content, and absorbing potentially challenging macroeconomic circumstances. This guidance also assumes that China and Japan will begin their post COVID-19 recovery in the second half of the year and does include the loss of approximately $1.4 million of Adjusted EBITDA related to the loss in Q2 of a large tenant at our corporate campus. We remain confident in the strength of the All Access Pass and the Leader in Me membership subscriptions, which have driven FranklinCovey's growth across recent years and which are expected to drive continued growth in FY2023 and in subsequent years. Consistent with our overall guidance of Adjusted EBITDA going to the $47 million-$49 million in constant currency, we expect Adjusted EBITDA in the third quarter to be between $9.5 million and $10.5 million in constant currency. We feel very good about achieving this result, particularly given that last year's Q3 Adjusted EBITDA result of $10.9 million was itself $2.3 million or 27% higher than the year before, making this year's Q3 Adjusted EBITDA quarter our second-largest Q3 ever, even after absorbing the $500,000 reduction in EBITDA from the loss of the tenant that we mentioned. As to revenue, compared to our estimate at the beginning of the year of approximately $294 million, we expect revenue for the year to be impacted by approximately $3.5 million due to FX, an additional $2.5 million because of the slower than expected recovery of sales in China and Japan, and by an additional $4 million to reflect the expected impact of the deeper snow through which our clients are hiking. We expect revenue in the third quarter to be approximately $70 million in constant currency, reflecting the factors just mentioned, and in line with our full year revenue expectation of approximately $284 million. In line with our expectation of $47 million-$49 million of Adjusted EBITDA in constant currency in FY2023, our Adjusted EBITDA targets for FY2024 and FY2025 remain unchanged at approximately $57 million and $67 million, respectively. While changes in the world economy and many other factors could impact our expectations, these are our current targets. Paul, back to you. Great. Thank you, Steve. We feel great about our continued momentum and are looking forward to accelerating growth. With that, I think we ought to open up to your questions. Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from Nehal Chokshi with Northland Capital Markets. You may proceed. Oh, yeah. Nehal. Thank you. Hey. Just a little clarification on the EBITDA guidance. The slides are specifying on a constant currency basis, and in the quarter bill period, that did not specify on a constant currency basis. Are we going from an as is to a constant currency outlook here? For, for Adjusted EBITDA? Yes. Is that your question? Specifically. Yes. We That was probably a miss on our part in the slide last quarter. We've typically always tried to give our guidance in constant currency. Okay, excellent. I think what you guys are trying to communicate here is that over the last three months, you have seen incremental headwinds to EBITDA, and you're absorbing those incremental headwinds. Can you quantify exactly those incremental headwinds on an EBITDA basis as opposed to a revenue basis that you have already provided? Nehal, we really haven't talked about a number that the headwinds related to revenue have flown to Adjusted EBITDA, but it would be at a pretty high flow through rate. Meaning that if we had, you know, pick whatever your number is, $2 million, $3 million, $4 million of additional revenue, that would have flown through at a very high rate to Adjusted EBITDA. Got it. Okay, great. Two other quick questions here. Bookings in the quarter is up only 2% year-over-year, although the All Access Pass invoicing is up 55% year-over-year. That's versus mid-teens prior four quarters and 23% in November quarter. A pretty significant deceleration in your bookings. What's the narrative behind that deceleration there? Yeah, it's a good question. I think, you know, so stepping back for just a second, as we looked at the quarter, and as we talked about just a minute ago, there were a number of actual positive things really happened in the quarter relative to bookings. We had the number of clients who expanded, renewed and expanded their All Access Pass was greater in the second quarter than it was a year ago. It wasn't that. We had more clients sign multi-year contracts this year than did a year ago, so we felt great about that. New logo sales continued to be strong in the quarter for the year to date for the latest 12 months. You know, those were all positives. Weighing against that were, as we mentioned, there were while about the same percentage of clients who don't renew in any given quarter didn't renew, there were some larger clients in there who didn't renew this quarter, and that weighed to the point where it almost mostly offset the gains on the other side. I think that's what happened in the quarter. There was, it was some really positive things. We did have those clients who were a little bit larger, who facing their own headwinds, didn't renew. We hope that we'll win them back. From a growth standpoint, you know, the other point we made is we're comping against what was our largest percentage growth quarter last year in the second quarter that we've had in our subscription business, which itself was a little bit benefited by the comp last year being a little bit easier over the COVID impact. We're up against that and comping there as well. Generally speaking, we feel like the level of execution, what we're seeing happening with our clients, apart from those who were a little bit larger and weren't able to renew, is still quite consistent with what we were seeing, a year ago. My last question is, can you explain to me what you guys mean by deeper snow? You know, so in Utah it's a little funny. It's been snowing like crazy in Utah, so we were trying to think of what would be a good metaphor that, you know. If a year ago. By the way, a year ago, it wasn't like the economy was all roses either. We're starting to be some signs, and there were starting to be some concern and maybe a little bit of pullback. We're seeing, you know, we see a little bit more of that now from our clients, where if, you know, there was not a lot of snow on the ground a year ago, there is a bit more snow on the ground. While, you know, the same unit of effort doesn't yield the same miles hiked per day for some of our clients. As they're facing that, the little bit more headwind and a little bit deeper snow on their end, you know, that does have some spillover back into us. I think we saw that with those clients who, while about the same percent that don't renew in a typical quarter, some of them are a little bit larger, reflective of that. You know, more headwinds for them or deeper snow for them. Okay, thank you. I'll cede the floor here. Thanks, Nehal. Thank you. Our next question comes from Jeff Martin with Roth MKM. You may proceed. Thanks. Good evening, guys. Hi, Jeff. Thanks for all the detail. Very helpful. Hi. Hi, Paul. Paul, I wanted to dive into the industry mix a little bit, and ask if you're seeing any particular trends by some of your larger industry, categories, manufacturing, financial services, government, tech. Just in terms of client renewals, is there a pattern from within the larger pieces of the pie, even though none of them is, you know, overwhelmingly large? Yeah, it's a great question. Maybe I'll ask, I'll just make a quick comment and have Jen Colosimo speak to that specifically. In short answer, it doesn't vary much by industry. Jen, I know your team's been kind of really digging into that. Any thoughts you have? Jen might be trying to come off mute. I came off mute. There you go. There you go. Hey, Jen. Thanks, thanks for the question, Jeff. The simplest way to answer that is no. We are not seeing a trend by industry. I, the best way I could explain it is based on the challenges that we address with our clients, particularly as you think about leadership culture, executing on strategy, many of our clients are reinvesting in that, even if they may be having a smaller workforce. Even if they have a smaller workforce, they're reinvesting with those that remain. As we look at it, as you might expect in this economy, decision-making often moves up. In my case, you know, making a case to Steve Young, you need to make more of an economic case, and we have clients that are making that economic case. We have some that it is delaying decision-making. It's frankly just an uncertain environment where many of the things that Paul said. We have all of these great things happening and in fact, the same percentage renewing. To your question, even within industry, it's just that we had a few that were larger revenue amounts that did not, and we hope to win them back. There just isn't an industry trend. Yeah, Jeff. Good to hear. Yep. Yeah, Jeff, maybe, you know, we did report that government was down the results of North America down just a little bit in the quarter. I think that has been a slightly softer, but I don't expect that's a long-term trend. It's just kind of a due to one particular client, actually, one agency. That would just be one thing to note. I was intrigued by your wording where clients were, quote, "not able to renew" rather than, you know, chose not to renew. Is there something in particular that stands out and led you to phrase the statement that way? No. Trying to remember where I said that. You said it. Okay, well, let me just ask a, you know, a second part to that question. It's noticeable that your unbilled deferred revenue growth, you know, far outsized your deferred subscription build in the quarter. You know, that suggests that the longer-term contracts are overwhelmingly, you know, outpacing the shorter-term contracts. That, to me, says your more loyal, higher value clients are renewing at multiyear and past expansion levels relative to maybe some of the shorter-term clients. Maybe you could comment with respect to some of the shorter-term clients and are those, you know, traditionally your more valued clients, or is there much of a difference between those that purchase longer-term subscriptions? Yeah. Yeah. Gray, I think maybe the not able to renew. Oftentimes when clients are very committed to us and very committed to what they're trying to achieve. You know, oftentimes that discussion is like the one I shared the example of the one that did not renew in the fourth quarter and came back and renewed. Oftentimes, if you were in those discussions, you'd hear the client say something like, "Hey, we're not able to do this for this reason at this moment, but that's not gonna be the long-term permanent state here." There are just some times where the environment for the client. That's not just a Q2 thing, that happens, you know, every company goes into. Not every company, but it's not uncommon for a company to go through a period where things get more difficult for them. It usually is a, "Hey, we're not able to do this at this point," not a, "Hey, we're leaving you guys forever," kind of thing. Maybe that colored my language a little bit. To your question, we've been really pleased for a number of years now at the continued steady growth in those clients who want to enter into multi-year contracts. We've reported on past calls that typically it'll be upon the renewal of their first year or even their second or their third year, where they'll step across and add multiple years. It's usually in that, you know, after year one going into year two. I think that's happening because of the nature of the problems that we're solving. We're dealing with the kinds of issues and challenges and topics that are important and don't get solved in one quarter or even in 12 months. You know, to change an entire culture or change the level of productivity of an entire team or department is a longer-term kind of thing. I think we see that in clients generally deciding to make the commitment to multi-year more and more, and we certainly saw that in the second quarter. Yeah, where you do see your, to the extent that there is greater churn, you see that with those clients, you know, after their 1st year. As those cohorts become more and more established, it's like laying down road base where you get these very mature cohorts that now have very little churn or very little transition eight years later that have been there all those years. The most noise and the most chop is actually on the, those that have, you know, that are coming out of their first year as we're still, you know, getting to know them and work with them, and then oftentimes they'll go multi-year. Great. I know in the, in the past couple of quarters, you've talked about revenue growth acceleration. Obviously, in the current environment, that's gonna take a bit of a pause. Just maybe give us a sense of your degree of confidence if it's, if it, if it's shifted or if it changed at all relative to some of the targets that Gio previously outlined, you know, getting to the mid-teens and ultimately upper teens revenue growth once the economy kinda, you know, is back in stable growth mode? Great. Maybe first point that's slightly related but not exactly the answer to that is that we've built a business model that generates significant increases in Adjusted EBITDA and cash flow independent of whether when and whether we get up to the mid-teens and then all the way to the high teens. It's a. The business model continues to be what you've always recognized it to be, which is a great business model. To your specific question related to growth rates, we also have these two powerful subscription engines that have been driving more and more growth, faster and faster growth. It's absolutely still our view that this is a business that's on its way to low teens, mid-teens, and then eventually high teens, like we've said. The current environment means that, you know, the timing of when we get there might be a little bit more elongated, we're still very excited and pleased with what we're seeing and the way the subscription businesses are behaving in both divisions. I think you alluded to it, Jeff. I think there's a timing thing there, given kind of the current economic environment that might slow slightly the pace at which we move to low, mid, and then high. I strongly suspect that's where we're headed. Great. Thanks. I'll yield the floor. Thanks. Thanks, Jeff. Thank you. Our next question comes from David Storms with Stonegate. You may proceed. Perfect. evening, everyone, and thanks for taking my call. Hi, Dave. My first question. How's it going? My first question is coming from slide 16. You know, Paul, you had mentioned the deeper snow that a lot of your clients are seeing. Would we expect that, you know, average annual client spend to be greater than the $77,000 going forward still? Will that number come down as clients, you know, pare back the scope of what they're asking from you guys? Yeah. Yeah, great question. I think that has a number, that is a number, and we went into quite a bit of detail last quarter on this, that has increased quite significantly over the years. We would, I think we would expect that number to continue to increase as. The reasons for that are, one, as we mentioned a minute ago, even in the second quarter, more clients expanded, more clients added multi-year. We still, you know, even on the tougher comp, we still grew services over the prior year. I think all those things point to clients deepening their relationship with us, expanding. Our whole model is built, as you know, to land and expand. I think another, you know, another vector on that is just the relatively still low client penetration rate that we have. As great as we're doing and as much expansion has occurred, at that number of 77,000, it wasn't that long ago that it was in the 40,000s. As much as that has grown, there's still a tremendous amount of headroom, even in the clients we have today, where we're still just addressing, you know, roughly 10% of the addressable population. I think we saw that expansion in the second quarter. We have a lot of headroom to grow and would expect that that will continue to inch its way up. That's very helpful. Thank you. My second question, and Steve touched on this, but with operating SG&A, you know, steadily growing slower than revenue, which is a great sign, is there anything specific to highlight what's driving this? Or is that just more product of economies of scale and general increased efficiencies? I think there are efficiencies we hope in many places in the company, that decrease can be driven significantly by the fact that a lot of our costs are either fixed costs or grow at a rate slower than our revenue growth and expected revenue growth. Areas that are not client-facing, like central overhead, you know, all of those types of costs, we expect to grow at a rate slower than revenue for quite some time. We would expect to have our client-facing costs in SG&A grow at a rate, you know, pretty similar to our revenue growth as we support that, as we support the growth and look for accelerating growth that Paul just talked about. Again, a lot of the back-end operations, we believe are able to grow at a slower rate, and that will decrease the% of SG&A versus revenue as time goes on. That's very helpful. Thank you, Steve. One more for me, if I could. In fact- Oh, go ahead. No, in fact, I would say that as we go, as our Adjusted EBITDA, we expect to grow, you know, up into the targets that we've talked about in future years, that growth is primarily the relationship of the fixed cost to revenue. I think what you're also seeing, Dave Storms, in here is that our cost to acquire a customer is actually not only less than the lifetime value of that customer, but even less than the first year value of that customer. As we're acquiring more customers, that revenue is growing faster than the cost to even acquire them. You know, I think the combination of all those factors is maybe back to Nehal's question, is why also while revenue could be at one level and Adjusted EBITDA can still be growing at the levels that we originally projected for the year-end in the future. Really it's just a hodgepodge of strong execution. That's great. Okay. One more if I could. I know, Paul, you mentioned that you're spacing out, you know, bringing on new client partners throughout the year, so it's not as backloaded. Have you guys discussed or would you be willing to give us a target on what, you know, number of new client partners would look like by the end of the year? I don't have a number for you today. We've got, as you know, we bulked up the number of recruiters a year ago so that we could get more, we could be more on top of hiring and hiring more people. We've made meaningful adds to our sales enablement capability, to our management structure to support more client partners. Over time, we've gone from adding 10 a year to 20 a year to 30 a year. We're expecting to continue to grow that. I don't know exactly what the number will be at year-end, but consistent with what we've said in the past, we'll add a significant number of client partners between now and the end of the year and into next fiscal year as well. We think in this environment that there's an opportunity to get really great salespeople. We're doing well. We're making investments in our business. We think that we can attract and win some really good talent. We wanna make sure we get the best talent. Once we get that best talent, we wanna make sure that our system of supporting and ramping them gives them the very best chance at being really successful here. just wanna match that up as well as we can over the back half of this year, and that might extend a little bit into the first part of next year as well. That's perfect. Thank you very much. Thank you. Our next question comes from Samir Patel with Sylebra Capital Management. You may proceed. Hey, I wanted to ask a little bit about the new credit facility. you know, $70 million is a pretty big amount, especially when combined with the cash on your balance sheet. Your largest acquisition to date, I think was, you know, Strive, which wasn't really, that big, you know, compared to that facility. I was wondering, Paul, if you could just dive a little bit deeper into how you think about capital allocation over the next few years, whether that facility is just sort of there as a, you know, nice to have in case or if there's actually something you kind of intend to use it for. Yeah. Hey, Samir, good to hear from you. First of all, big thanks to Derek Hatch for getting all that put in place. We didn't just go for an increase in our credit facility to have-- I mean, we expect to generate a lot of cash, as you know, and weren't just looking for a larger credit facility just to have the comfort of having a larger credit facility. We think that there's a opportunity in this, in this environment, to be potentially more inquisitive. Of course, we have a great organic growth story and strategy, I believe. A lot-- You know, the numbers we're talking about that we believe we can achieve wouldn't-- we don't think really require a lot of M&A. At the same time, there could be some opportunities to do some things that could be exciting and could really be accelerants to what we're doing. We wanted to get ready so that things are in place if and when we were to find and discuss some things like that. Then we also we're grateful to our board that we're able to replenish our authorization to repurchase shares. We've done a decent amount of that over the last four quarters as well, and would expect that we would continue to use our cash, you know, wisely for that, for M&A, and also just to fund operations to make sure we're making all the best decisions possible to grow revenue. Nothing to share with you today other than we're glad we have that in place, and hopefully have more to talk about in future. Okay. I don't think. I'm sure you're gonna disclose it in a filing. Steve, do you have the spreads of SOFR on that facility? Those will be out on our 8-K tomorrow. Yeah, the 8-K is coming out tomorrow on that. It's a varying amount depending on some of the covenants. It's like we're gonna be like the $175-$185. It's like we start out at SOFR +150. That's where we anticipate being, and then it goes based on our leverage ratio, it will go up from there, like SOFR plus 175 to SOFR plus two. We will start at SOFR +150. Okay, thanks. That makes sense. Paul, going back to the M&A comment, I mean, how do you think about sort of financial guardrails if you're gonna spend, that much capital on M&A, right? I mean, you know, I think you guys have talked about this, but if you, if you run a DCF on your stock, it should be worth $8,000, something like that. obviously, there's a tremendous amount of accretion to be had just by buying back your stock. You know, I kind of understand the rationale of doing strategic deals like Strive. You know, just going back to the size of that credit facility kinda relative to the size of acquisitions you've made, you know, I mean, that just seems like a lot of money, right? Like, I'm just curious how you think about sort of the returns from, like, what your hurdle rates are or, you know, how you think about the financial aspect of M&A. Yeah. Yeah, great question. Yeah, sorry if my earlier response... Not trying to leave the impression that we're going to go out and do some major, you know, multi-hundreds of millions of dollars acquisition or anything like that. I think more likely, you would see us do things that are more consistent with what we've done with Strive and others, where we're adding an important piece of capability to our clients or maybe adding some content here or there. Even to add content, we don't necessarily need to acquire, we can license a lot of that. I think, you know, having access to that additional liquidity, we think is a good thing. We're able to get that. We don't necessarily intend to use all of that. it gives us the maximum amount of flexibility to pursue any number of different avenues that we think would be valuable to our shareholders. Could be in the form of some tuck-in M&A or strategic M&A. It could also be in the form of, you know, expanded share repurchases in the quarters ahead. I don't think we. No, that makes- I don't think we're intending to go out and, you know, lever up or do anything significant. That makes sense. I know the details are gonna come out tomorrow, you know, I know one of your previous facilities had some restrictions on returning capital to shareholders. I'm just gonna assume, given that you just authorized $50 million and you put that in place, that at the current time, you wouldn't see that facility having any restrictions as long as you stay within the kinda, you know, EBITDA covenants, things like that. Yeah. This particular, one of the things, that was one of the things with our old covenants, we could actually break the covenants by purchasing shares of stock with $50 million of cash in the bank. One of the things when we were going out to negotiate a new deal was we wanted some flexibility to be able to use our capital without breaking covenants. You're right. This particular credit agreement does have some restrictions on distributions that you'll see. However, it has a great amount of flexibility. As long as our leverage ratio is below 2.0 to one, we don't have to count purchases of treasury stock as part of our distributions in that distribution. We don't anticipate our leverage ratio getting above 2.0. That gives us a huge amount of flexibility to buy shares as we see fit without breaking our debt covenants. Sameer, you're always very perspective. The last agreement, as you know, we're able to buy a lot of shares under that agreement, and this agreement is, gives us more flexibility, to acquire larger amounts. Yep. Perfect. Thank you, guys. Thanks, Samir. Thank you. This concludes the Q&A session. I'd now like to turn the call back over to Paul for any closing remarks. Well, thank you. Thanks everybody for your time today. We appreciate you. Thanks for tuning in. Thanks for your great questions, we look forward to talking again soon. Have a good evening. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.