Hey, good morning, everyone. My name is Brian Peterson. I'm the application software analyst at Raymond James. We're very happy to have the team from Model N here. John Ederer, Chief Financial Officer, and Chris Lyon, Chief Revenue Officer. So John, why don't you kick us off, maybe for a little intro, and what you guys are doing on Model N? Yeah, happy to. Thanks for having us. We always appreciate the opportunity to be here. So for those of you that may not know us as well, we're Model N, and we provide revenue management for life sciences and high-tech companies. In essence, what we do is tame the complexity of the supply chains and the delivery chains for these industries. We do this in a cloud offering. Today, we serve 16 of the top 20 global pharmaceutical businesses and 14 of the top 20 semiconductor companies. And so we consider ourselves a leader in the space. Part of that value proposition that we provide is really two-pronged in nature. One is we help customers tame the complexity of their delivery chains. The second piece of it, and this is really more on the life sciences side, is around compliance. And so we carry a value prop that helps deliver revenue to our customers, but also keeps them in compliance and out of jail, frankly. Yeah. Well, that's, yeah. Yeah. That is important. So maybe just to highlight what you just reported in the fiscal fourth quarter. I know you've had a lot of traction on the subscription side, but we'd love to get kind of a brief rundown of what you guys just reported. Yeah. You know, the fourth quarter was another solid quarter for us. One of the themes that you'll hear quite a bit from us is profitable growth, and I would say that, fiscal 2023 was another, excellent year in that regard. We grew revenue by 14%, we grew adjusted EBITDA by 34%, and we grew our earnings per share by 54%. And so, you know, as we look at the business, even in the midst of this transition that we're undertaking with our business model, we continue to drive profitable growth. We're going to invest for growth. We're going to try and drive top-line revenue, but we're also going to make sure that we drop incremental benefit to the bottom line. Just, I know you mentioned the SaaS transition. I know that's been an effort for you guys- Yeah O ver the last several years. But remind me where we are in that and how we should think about, you know, the implementations versus the customer bookings. Any perspective there? Yeah. We're making great progress on this, and so, this has been a journey. These SaaS transitions are never easy. You know, it often starts, of course, with a cloud product, but that's not really the ending, that's the beginning. Mm-hmm. And the hard work is really getting the customer base transitioned over, and so we've been at that for the last several years. At the end of fiscal 2022, we announced that we had about 70% of our life sciences customers moved across. At the end of fiscal 2023, which for us was September, we were up to 85%, and so we're into the last cohort now. We have an end-of-life date for on-premise support of December thirty-first, so coming up at the end of this month. We probably won't have everybody transitioned over by the end of the month, but I think we're going to make great progress, and I do think that we'll finish it out by the end of fiscal 2024. And so what happens. Maybe this is a good question for Chris. Yeah. Once you're fully transitioned, how does the buying behavior or the customer conversation change a little bit once they've kind of gone through that effort? Yeah, Brian, what we're starting to see is once they're in the cloud, there's a technology platform that allows them to adopt technologies a lot easier, right? As we continue to innovate, they can manage up to two updates a year, right? In the past, believe it or not, we saw customers not upgrading for five, 10 years. Wow I n some instances, right? So now that they're in the cloud, they can tap into the pace of innovation that we're pushing. And we're seeing that starting to happen with some of the requirements that are coming at the state level around SPTM and, believe it or not, still 340B. So how, fully transitioned, you know, hopefully we'll get there by the end of next year. Where do you see the most white space, and where are customers coming to you and saying, "Hey, we have an opportunity to expand with Model N now they're post-transition? Yeah, there's a couple things happening that we're seeing, globally. For example, they're leveraging the footprint they currently have with Model N, and they're expanding into other, geos. Mm-hmm. That's number one. Number two, we're starting to see them adopt technologies that they didn't have the opportunity because they weren't on a standard platform or a common platform, right? So they can now adopt those technologies. And then third, as we continue to innovate with our updates twice a year, in the spring and the fall, they can adopt those new technologies. So we have early adopters or Design Partners that help give us feedback real-time into our technology. And so, you know, those are really the three segments we're starting to see across the customer base. What are you finding that you're displacing, or is it that maybe the inertia or the competition that you would see in some of those deals? I'd love to get some perspective on that. Yeah, I'll give you one example that John and I have been pretty close to, and that's around this requirement. There's 22 states around tracking the changes in pricing, right? So we call that State Price Transparency Management, where before, they might have one or two people managing that. Some of the large pharma customers, they have up to 16-40 individuals, and we can come in and mitigate that risk and those human errors that could transpire, right? So we're seeing that as one requirement. We're also seeing some of the global pricing starting to change, right? A lot of the customers that we have are putting their products out to tender. They're putting their products out to competitive bids around pricing, and then they're also trying to potentially adopt some of the technologies that we've rolled out here in the U.S., so that's our own provider. So there's a lot of different things that are starting to happen- Mm-hmm T hat we're in a good spot to take advantage of. So how do you address that from a go-to-market perspective, right? I know in a vertical software model, you kind of boil the ocean with sales reps, right? So there's efficiency, but there's also a big opportunity. So how are you thinking about the go-to-market and attacking that opportunity? So prior to what John just shared around where we're at with SaaS transitions, we've been planning for sales capacity, and we've been making those investments to focus on the four segments. Segment number one is life sciences around pharma. Segment two is around life sciences for Medt ech. Segment three is around high-tech for semiconductor. Mm-hmm. The fourth segment is high-tech around, we call high-tech manufacturers, component manufacturers, right? And so the way we've gone to market, both for customer base and net new acquisitions, is having individuals only focused on that. Mm-hmm. Right? Where, when five years ago, we had everybody selling everything. And so we've really taken that segmentation to focus, and then allowing us to really have those plays by those four segments. How do you think about. Is there an opportunity with some channel partners or leverage or, you know, how do you think about maybe working with some other partners to expand the reach? Is that something on the roadmap or no? Yeah, I come from that background where you can tap into partners to help penetrate the marketplace. We see that, but, we're kind of, we're kind of a unique vertical solution, where we do all the implementations and the delivery and the time-to-value achievements that we get to the customer. So we'll tap into the large three, four to help drive change management, alignment, and then we do have a couple mid-market-type partners that help us on the fulfillment side or staff a ug. But, you know, we're really having that, that coverage within, within our sales team. So maybe taking a step back, Rainmaker user conference, record attendance last year. You know, I'd love to kind of unpack some of the themes and maybe some of the customer feedback out of the conference. What were some big takeaways from your end? Yeah, I'm sure you've been to a lot of different- I've been to a few. Yeah. One of the things that's interesting about this last Rainmaker, our CEO, Jason, John, and I were talking about: What did this. Why did this feel different? Mm-hmm. What really felt different about it? It wasn't a user conference. It wasn't talking about technologies and what's happening, or how to use the technologies, or how to get better use of the technology. It really was more of a group of customers and prospective customers, analysts, investors coming together and really talking about the market and where it's going across life sciences and high tech. And people are leaning in, trying to achieve different things, and that was one of the takeaways. The other takeaway that we shared is around where we're going with some of our innovations around data and leveraging some of the new platforms around AI. So the feedback was great. That's what they want. Like I said, we have these design partners. We're an instant feedback loop with these customers. They give us real-time feedback, and I think, you know, now that the SaaS transitions are nearly behind us, it's gonna accelerate some of our innovations. You mentioned AI. Obviously, that's a, that's a key buzzword- Yeah We're talking about this year. You know, unpack that a little bit, and how does AI kind of overplay or play into the model and value proposition? Yeah. You know, I've been in the enterprise software business now for a while since 1993, and we've seen all these buzzwords come and go, and I'm still trying to figure out AI a little bit. But I think where we're at with AI, it's like: Where can you get the quickest bang? Mm-hmm. We're starting to see that probably at the provider level. Mm-hmm. And we're also seeing that on the pricing and contract side of the manufacturers, where it helps be more predictable. And that's kind of where we're going with our first segmentation. John, is there any opportunity to use AI internally? Is that something, you know, as you're thinking about the development of the products? I mean, is that something that you guys have explored? Yeah, I would say. Well, from an R&D standpoint, yes, I think there's some opportunity there. And I think more broadly in terms of the products that we deliver. Mm-hmm O ur focus has been much more on the segment of data and analytics together. So not necessarily AI specifically as a technology, but what can we do with our platform to help our customers understand their data better? Yeah. And you think about some of the things that run through our system today, in terms of revenue management, we're getting down to the script level on the life sciences side, and so that transactional data has real value for our customers. And so we've been working on things that unlock that. And what, what have you guys said in terms of, like, the scope of all that, right? I mean, you're touching a lot of the large pharma companies, like Med Tech. So, like, you know, in terms of the size and everything of what you're able to have in the system, any sense of scope of, of, of what you guys are, what you guys have on the platform? Yeah, I mean, so from a, I guess, like, a TAM standpoint, it's a very significant opportunity. I mean, you know, it could you know, over time potentially double the size of our TAM. And it's a significant opportunity for us. We're just getting started. We're getting started in, I think, a very practical way. Mm-hmm. So we're looking at some specific applications, Jason talked a lot about this at Rainmaker, where we can get some initial wins. We've got Design Partners that we're working with to put these products out and get early traction, and so I think that we're going about it the right way. Mm-hmm. I think it ultimately could be a very huge opportunity for us. Well, well, it's nice to have all the strategic relationships in place. Yeah. So you did mention on the last call that services is been a little cyclical. Mm-hmm. Maybe talk about what you're seeing in terms of, you know, demand for services, and is that maybe different at the higher end of the market with large customers or some smaller customers? Yeah. Maybe unpack that a bit. Yeah, so if I look back over our last couple of earnings calls, we've talked a little bit about the macro environment overall. And we're not seeing so much impact at the high end of the market with our larger pharmaceutical customers, but where we are seeing some impact is more at the early stage or mid-market. And for that part of the market, we have a solution offering that we call business services that we use to target that end of the market, and we have seen a little bit more impact from the macro there, and hence some of the comments we've made about a little bit of slowing in that part of our business. Mm-hmm. I would say over the September quarter, it was really more status quo. Okay. So not real, not really any changes from, from the summer. Didn't get any, didn't get any better, but didn't get any worse either. And how do you kind of, as you think about fiscal year 2024, you know, thoughts on that, you know, staying the same, getting better, getting worse, how do you kind of handicap that? Yeah, I think if you take a look at our guidance and some of the comments that we made on the Q4 call in September, that would suggest that we, you know, we expect it to impact that piece of our business next year. Mm-hmm. And when you look at our business in total, and the guidance that we provide in particular, we're still seeing strong growth on the SaaS side of our business. A little bit of slowdown on the subscription services piece, and then we're obviously still dealing with the downdraft of maintenance and term licenses. So that's the part of the business model that we're transitioning over to SaaS. As you kind of think about it, I know you touched on fiscal 2024 a little bit, but you also gave some midterm targets. Mm-hmm. Maybe outline what those are and how you kind of think about fiscal year 2024. Yeah And get into the midterm targets. Yeah. No, we did a couple of things on our Q4 call to help investors understand what's going on. So when you're a business that's in transition, there's sometimes a lot of moving parts. And so we put two charts out there that are on our website. One is the historical view of our subscription revenue, and so we broke it down into those three buckets I just described- Mm-hmm T he SaaS piece, the subscription services, and maintenance and term licenses. So SaaS and subscription service will be the ongoing business of the company. The maintenance and term licenses are the piece that's going away. It's the legacy on-premise business that we're actively transitioning over. And so in FY 2024, we frankly have some challenges with the math because we have a big downdraft still in maintenance and term licenses coming out of the model. And so when you look at the growth on the SaaS side, it is overcoming the maintenance and term licenses, but that maintenance piece has a dampening effect out on the overall number for FY 2024. If we look out a few years, and once we get through this transition on the maintenance side of things, and that goes to zero, then the growth in SaaS and the growth in subscription services can carry the overall number. And so when we look at our midterm model, we see a path to back, a path back to double-digit subscription growth. And how should we think about. And I know it's kind of tough 'cause customers will do what they'll do- Mm But just on the maintenance decline, I mean, when any sense for when we could be through that? And I don't know is fine. I'm just curious, how are you- Yeah T hinking about it? Yeah. No, we're gonna have another big, stairstep down in FY 2024. Okay. And we talked on our last call that we expect maintenance and term licenses to be down by another 50% or more in FY 2024. Then you're starting to get down to some smaller numbers. So by definition, I guess, if we only drop 50% in FY 2024, there's still a little bit to go in FY 2025, but you're starting to get down to smaller and smaller numbers, where the impact is less and less. So the midterm targets, we'll get through the maintenance decline. Yeah. What do you see as kind of the big key drivers of the growth algorithm post that transition, right? So if we're talking about the subscription side, like. Yeah W hat gets you guys really excited? Actually, and John, I'd love to put the way out. Yeah. I'll let Chris jump in. Yeah. Thanks, John. Well, there's a lot that gets me excited. If I look at, you know, this journey, I'm used to being at early-stage software companies, where you're disruptive, right? You come in, and you help define the marketplace. We had an opportunity five years ago to do that, and we disrupted ourselves. And so the SaaS transition is. It's always hard 'cause customers have their, their own customizations. You have to take some of those customizations 'cause we all have a one-to-many model, right? So we have to consume those and then make sure the customers can use those. Fast forward, we can innovate differently. We can innovate in a way that the feedback loop is quicker, and when it's quicker, you can bring those technologies to the customers. They can consume them quicker. Mm-hmm. I'm even trying to challenge our teams to push this out real time, so they get access to it, so we, we truncate the time to value on the implementation side. So there's a lot of cool things we can do differently now that we've been through this first doorway of this transition. Have you seen, for the customers that have transitioned earlier, have they been able to get benefits on the platform that, that you can show to some of the people that are maybe going through it now or starting it next year? Any color there? Yeah. So we've had a couple use cases where that's exactly what's happened, where they go through a significant SaaS transition, and now they're like, "Oh, now we can leverage that platform. Mm-hmm. So they can leverage our Validata, our 340B. They've leveraged our SPTM. Mm. They've expanded, like we've talked about, in other countries. They've rolled out their Global Pricing, our Tender product. So we're seeing that attach rate accelerate a lot quicker once they're in the cloud. If you remember, when we first started this, we had multiple versions of the truth- Yeah O ut in the wild. Mm-hmm. Now we can bring that back in, and we can help control that innovation. Maybe just from a margin perspective, as everyone kind of. Yeah M ultiple versions of the truth, as that goes away, what does that mean from a margin perspective in terms of how you're having to support all these customers? Yeah, it's a big driver for us. You know, if you look frankly up and down the P&L, there are a lot of benefits from moving to the cloud and being a cloud-only business. And so today, we still have to effectively support two businesses, the on-premise world and the cloud world, and in the not-too-distant future, we're just supporting the cloud side of the business. And so on the support line, for starters, in cost of revenue, we get to focus those resources on cloud, and we should pick up some leverage and scale there. On the R&D line, that's another area where same dynamic at play. Today, our R&D team still has to support legacy products. They're even supporting customers going through transitions. In the future, they get to move those resources over and focus on new product innovation. So you can actually already start to see that a little bit in our P&L. If you look at the R&D line the last couple of years, we've been increasing the dollar spend but able to decrease it as a percentage of revenue. So the spend on innovation and that R&D number- Mm-hmm T hat should increase. Yeah, yeah. How are we thinking about, you know, post that? I know you gave the midterm parts, but just if we're wrapping it all up in terms of growth and margins, how do you think about that framework? Yeah. And so we've again, we've taken an approach of profitable growth. I mean, it's a bit of a mindset or even a mantra for us. And we've been dedicated to it, and we're gonna continue to be dedicated to it. And so in the midterm targets that we laid out, we talked about a path back to double-digit subscription growth. The other piece of it was really on the margin side. Today, we're in the, you know, mid- to high teens. In that midterm target, we talk about getting to the mid-twenties, and that's through continued steady progression of investing for growth, but also dropping incremental benefit to the bottom line. I'll open it up to the audience. There's any questions? All right, so maybe one on high-tech. I don't feel like it gets a lot of, yeah, I mean, just given the revenue split. Yeah I t's a smaller part of the business. But having gone to Rainmaker over the years- Mm-hmm T here's some very high-profile customers that send, you know, six-12 people there. It's clearly a strategic investment. Yeah. So, you know, talk about what you've seen in that end market, and as you guys maybe focus on just different areas of tech. Yeah W hat does that opportunity look like? Yeah, I, I'll start off with it, then I'll invite Chris to chime in as well. So, you know, on the high-tech side of the business, if I go back a few years ago, during the pandemic, we actually saw a little bit more impact on our on the high-tech side of our business during that period. A little bit of a slowdown in the pipeline and the overall activity, but coming out of the pandemic, we've started to see a nice rebound in that business and good traction at Rainmaker and elsewhere, as you've described. Chris, you want to talk a little bit from the customer standpoint? Yeah. We're starting to see some of the customers. There's probably a small handful of customers that are adopting into the cloud. And we're also seeing quite a bit of demand around our CDM product, which is a channel tool that allows our customers to manage all the complexities around their revenue streams, their pricing, the way they go to market. They get full visibility into their channel, right? So if you have very complex go-to-market strategies, like Sonos, for example, they have multiple retail locations, and they have to see the health of that real time. So we're seeing that demand around CDM. In addition to that, we still see the growth around semi and, believe it or not, some additional focus around energy companies. It's good to see that technology companies still are valuing our products. You know, we have a focus group, a go-to-market team, so still aligned to that. So, maybe there's not as much of a regulatory dynamic like- That's correct T here would be in pharma, but I would assume that there's a pretty big gross margin impact, right? In terms of, like, their ability to price and- Mm-hmm. So, what have you seen from some of the, you know, maybe semi customers that have used it for a while? What have been the benefits to them of using the platform? Yeah, I think, I think the, what we've seen over the last couple of years since the pandemic is their, their readiness to change quickly. Mm-hmm. They have that visibility, right? If they don't have our technologies, it's really hard to change their pricing in real time. Obviously, we can't help control some of the distribution and the supply chain areas, but. Mm-hmm T hey have that visibility real time. That's probably one of the things that we've pride ourselves on, is giving our customers that, that visibility. Yeah. Yeah, I think, I mean, it does parallel life sciences in that regard on the revenue side of things, right? You think about the complexity in those different channels. And on the high-tech side, especially, with a product like Channel Data Management, where you've got customers that have hundreds and hundreds of partners. Mm-hmm A ll with different contractual relationships, right? Depending and there's volume constraints that go into these contracts and everything else, and so our software, in essence, helps you tame that mess. Yeah. And helps you make sure that you're getting full value for the contracts that you have in place with your partners, and hence, more revenue. Maybe pivoting a bit, obviously, the regulatory environment for pharma, fluid. Yeah W e don't know what's gonna happen. What does that typically mean for customers in your business? You know, I'd love to. Obviously, I think you're helping them tackle that, right? Yeah. We mentioned the. Yeah S tate pricing initiatives, but, you know, I'd love to understand what you guys are seeing from a regulatory perspective and how that's impacting the business. Yeah. Yeah, with the IRA, we're constantly monitoring that, and if anything does come out of that, you know, change in the administration, we have two updates a year, you know, the spring and the fall, to help push those out into the customers. In Med Tech and high-tech, we don't have that much. Yeah R egulatory, but when it comes to pharma, that's something that we've definitely been able to stay ahead of, right? Yeah. You know? The updates are- Yeah A re really helpful in making sure that. That's right C ustomers are compliant, but. Yeah, it, and it's, and it works in a couple of ways. I mean, so regulatory changes create the need for new products and new product innovation. So we saw that most recently, as an example, with State Price Transparency Management, right? And that was something that happened obviously at the state level, not the federal level, but same implications. Changes in regulation, the customers have to react, and we have the ability to put a product together to help them do that. And so that can help us from a product development standpoint. It also helps us, I would say, from a little bit from a demand standpoint. So there's a little bit of fear out there, right? Mm-hmm. So when the IRA comes out, and you're not exactly sure how it's going to impact your business, you wanna make sure that you're compliant with everything that comes out of it. Again, we handle that compliance end of it for the customer. And so, you know, there's a number, a number of examples on the customer side, where, you know, the IRA coming out and starting to understand what it's going to do has driven, you know, the desire to make sure they're updated onto the cloud. I know we're coming up on time here, so maybe just to wrap up, you know, as we think about some of your key strategic priorities into fiscal year 2024, you know, what are the top two or three priorities from your perspective? Yeah, I think that, you know, from our standpoint, when I take a look at what we've been doing with the business, obviously, there's been a lot of focus on SaaS transitions and getting the business model transitioned over. You know, but for us, we started to put that in the rearview mirror a few years ago. We obviously have to execute and complete it. But to the point Chris made earlier, we've, we've started to invest for life after SaaS transitions. Mm-hmm. From a go-to-market perspective, we've put additional resources on our new logo team and our customer base team. We've focused those resources on top 100 accounts for new logos and on the White Space opportunity with our existing customers. We've put a lot of work into what happens next, and those are the things that will ultimately drive growth. The other area that we talked a little bit about, and I think I'm personally most excited about, is data and analytics. I just think that there's tremendous potential for us there in terms of some of the proprietary nature of our products today, and some of the data that we capture on behalf of our customers, and I think our ability to ultimately capture and package that for customers going forward will add tremendous value. So I think that's one area and kind of the third leg of our strategy that I think has a lot of untapped potential still. The other thing that I'm excited about, I guess, more from the CFO standpoint, frankly, is the improvements that we continue to make on profitability. I think that that has gone, I won't maybe say unnoticed, but it's certainly been overshadowed, the last couple of quarters. There's been a lot of focus on SaaS transitions. There's been a lot of focus on the subscription growth rate and the transitioning of the model and all of that. But if you take a look just underneath that, you'll see that we've made tremendous progress on adjusted EBITDA, and we had great quarters in Q3 and Q4. Our year-over-year improvement in profitability, 2023 to 2022, was really strong, and our, and our guidance would suggest that we can, we can make good improvement again in, in FY 2024. That's great to see on the margin. Thanks. All right, guys. Thank you so much. Thank you. Thanks, Brian.