Good afternoon, and welcome to Model N fourth quarter 2023 earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, today's conference is being recorded. I would now like to turn the conference over to Carolyn Bass, Investor Relations. Please go ahead. Good afternoon. Welcome to Model N's fourth quarter and fiscal 2023 year-end earnings call. This is Carolyn Bass, Investor Relations for Model N. With me on the call today are Jason Blessing, Model N's President and Chief Executive Officer, and John Ederer, Chief Financial Officer. Our earnings press release was issued at the close of market and is posted on our website. The primary purpose of today's call is to provide you with information regarding our fourth quarter performance and to offer a financial outlook for our first quarter and fiscal year ending September 30, 2024. The commentary made on this call may include forward-looking statements. These forward-looking statements are based on management's current views and expectations as of today, and should not be relied upon as of representing our views as of any subsequent quote date. We disclaim any obligation to update any forward-looking statements or outlook. Actual results may differ materially. Please refer to the risk factors in our most recent Form 10-Q and 10-K filed with the SEC. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, GAAP results. Reconciliations of the non-GAAP metrics to the nearest GAAP metrics are included in the earnings release issued today, which is available on our website. I encourage you to visit our Investor Relations website at investor.modeln.com to access our fourth quarter and fiscal 2023 year-end press release, periodic SEC reports, the webcast replay of this call, and a supplemental Investor Relations deck for Q4, which includes some additional disclosures that John will review later on in the call. Finally, unless otherwise stated, all financial comparisons in this call will be made to our fiscal year 2022 results. With that, let me turn the call over to Jason. Thank you, Carolyn, and welcome to our call today. I am pleased to report that our fourth quarter results exceeded guidance for total revenue, subscription revenue, and professional services revenue. We were in line with our quarterly guidance on Adjusted EBITDA. Overall, Q4 was a strong quarter and demonstrates our commitment to driving profitable growth. Our Q4 SaaS metrics were also strong, driven by SaaS ARR, which grew by 20% year-over-year, while SaaS net dollar retention was 118%. Our strong SaaS ARR growth and improving profitability are proof points that we are building a durable SaaS business. 2023 was a pivotal year in our business model transition as we continued to successfully move our on-premise customers to the cloud. We closed out the year with approximately 85% of our life sciences customers either live or in the process of moving to the cloud, up from 70% a year ago. As you know, we have announced end of life for our on-premise solution on December thirty-first, 2023. I do expect that we will have a few customers that will need one or two more quarters to sequence their SaaS transitions into their IT roadmap, but I continue to believe that we will convert substantially all of our customers. This is a truly remarkable accomplishment by our team, given the complexity and mission-critical nature of our applications. To help put this accomplishment into context, I thought it would be worth a quick recap of the business model transformation that we have driven. Over the last three years, both our annual SaaS revenue and adjusted EBITDA have doubled. This clearly demonstrates the leverage in our model and our philosophy of delivering profitable growth to shareholders. We have built a great SaaS franchise that provides mission-critical products to our customers. This is a great foundation for future profitable growth as we collaborate with customers to build new products and add new customers to the Model N family. Next, I'd like to share some business highlights from the quarter. We delivered strong results that were powered by our key growth drivers of SaaS transition, selling back to the customer base, and signing new logos. So let me share some examples. First, SaaS transition. As I've said on past calls, we wanted to take our time with the final SaaS transition to make sure that we ended up with mutually favorable agreements with customers. This approach is paying off, and in Q4, we signed five new SaaS transitions. First, we signed a SaaS transition with Bausch Health Companies, a global diversified pharmaceutical company whose mission is to improve people's lives with their healthcare products. This deal builds upon a 20-year relationship between our two companies and sets the stage for the next decade. Moving to our cloud will allow Bausch to more efficiently take advantage of innovations and performance improvements while also staying compliant with the evolving regulatory landscape.... We also kicked off the SaaS transition with another long-time customer, who is one of the largest producers of generic drugs in the world and employs over 20,000 people across more than 30 companies. This customer will move their nine-country footprint to the cloud and will eventually deploy 20 additional countries over the next five years. During the quarter, we also signed two additional long-time large pharma customers to SaaS transitions. Like other customers that have transitioned, these two customers are looking forward to quicker access to innovation, improved performance, more predictable costs, and of course, easier access to new regulatory enhancements. We also continued to see SaaS transitions pay dividends by setting up additional customer base sales as we build out multiyear roadmaps. During Q4, we saw this pattern repeat at one of our major customers, where they will start with a SaaS transition, as well as add new products, including Validata, Advanced Membership Management, and Ngage. This example is particularly encouraging because Advanced Membership Management and Ngage are new products that we've released over the last couple of years. Validata is not a new product, but it is one of our more popular products that sets up future upselling, like 340B Vigilance. This example is a clear testament to our ability to sell new products to our SaaS customers. Turning to business services, during the quarter, we signed several customer extensions and a new logo, Haleon. Haleon decided to move from their current provider to take advantage of improved service levels around processing chargebacks, membership administration, and Medicaid processing. Haleon was seeking a partner with an organization that could provide improved client interaction and processing using industry best practices and technology. We had a good quarter in high tech, and this segment continues to show steady improvement. In Q4, Cirrus Logic, an innovator in low-power mixed-signal technology for top mobile and consumer applications, selected Model N as their Revenue Cloud platform of choice. Cirrus Logic has been leveraging some of our on-premise solutions and will now move all of their processing to our cloud. This move will allow them to streamline their processes, make it easier to collaborate with their partners, and consume new releases. Also in Q4, Model N was selected as the Vendor of Choice for Deal Management at Allegro MicroSystems, a global manufacturer of sensor-integrated circuits used by the automotive and industrial markets. Allegro has a goal of reducing technology platforms while automating inefficient manual processes with channel partners. Deal Management will replace multiple homegrown systems and help Allegro better manage global pricing, automate quoting, and discount controls. Turning to professional services, our team exceeded expectations with another strong quarter. The results of our professional services organization symbolize the strong demand for our mission-critical solutions as companies seek to drive top and bottom-line improvements. Our professional services team continues to do a terrific job of getting new customers live on time and on budget. One project in particular that I'd like to call out is J&J and their successful cloud go-live to support their pharma business. J&J is a long-standing Model N customer, and this project required the team to ensure success in two key areas: J&J's complex integrations with their downstream IT infrastructure, as well as a custom reporting system. We were able to meet the needs of the customer, and we were also able to pull the go-live forward by one full month to accommodate J&J's quarter-end requirements. As we focus on the future, we continue to build new products in collaboration with our customers. Two recent examples that launched in Q4 are Channel Collaboration and Medicaid Automated Invoice Retrieval. Channel Collaboration is a new portal that allows our high-tech customers to collaborate in real time with trading partners around sales and incentive data. Historically, this business process was done manually in email and was fraught with errors. Our Channel Collaboration portal will allow customers to more accurately pay their partners, which will drive efficiencies in channel costs and improve overall channel partner satisfaction. Also during Q4, we started to deploy Medicaid Automated Invoice Retrieval with our design partners, including one of our top five global pharma customers. This new product is a robotic process automation-enabled service that automates acquisition and ingestion of quarterly Medicaid invoices, which has historically been done manually and is error-prone. Manufacturers using this offering can expect significant productivity and cost improvements each year. We expect to make this product generally available this quarter. In closing, I am extremely pleased with another year of driving profitable growth. Our fiscal 2023 results reflect the strong collective efforts of Model Ners around the world. As I outlined at the start of the call, our successful SaaS transition is clearly showcased by the leverage we've demonstrated in our model in a very short period of time. Both our annual SaaS revenue and adjusted EBITDA have doubled in just three years. Looking ahead, our objective is to continue to deliver value to our customers while driving growth and improving profitability. With that, I'll turn the call over to John to discuss our Q4 financial results and offer our outlook for Q1 and fiscal 2024. John? Thank you, Jason, and good afternoon to everyone on the call today. As Jason noted, we delivered another good quarter in Q4, and we closed out fiscal 2023 with every metric, total revenue, subscription revenue, professional services revenue, adjusted EBITDA, and earnings per share, all exceeding the high end of the guidance range that we set at the beginning of the fiscal year. I was particularly pleased by our profit performance, with adjusted EBITDA growing by 34% in fiscal 2023, and non-GAAP earnings per share up 54% for the year. As Jason also described, we are working through the final cohort of SaaS transitions, and we'll talk a little more about the impact to our business model in a few minutes. Looking specifically at our financial results for the fourth quarter, total revenue grew 10% to $64 million, which exceeded the top end of our guidance. Subscription revenue increased by 8% to $46.4 million, also exceeding the upper end of our guidance range. Lastly, professional services revenue grew by 15% to $17.5 million, which was above the high end of our guidance as the team continued to run at high utilization rates. In terms of our profitability, please keep in mind that we'll be discussing non-GAAP numbers, and a full reconciliation of our results is provided in our earnings release. For the fourth quarter, total non-GAAP gross profit was $39.6 million, representing a gross margin of 61.9% and up slightly on a sequential basis from Q3. Total, non-GAAP subscription gross margin was 69.2%, which was flat sequentially from Q3, and non-GAAP professional services gross margin was 42.3% in Q4, which once again, was exceptional performance by the team. Operating expenses for Q4 were higher than expected due to roughly $2 million of non-recurring G&A expenses related to a corporate development initiative that we are no longer pursuing. We expect another $1 million of expense related to this in Q1 of FY 2024. As a result, adjusted EBITDA was $11 million, an increase of 34% from the fourth quarter of fiscal 2022, but at the low end of our guidance range for the quarter. Adjusted EBITDA margin improved to 17.2%, compared to 14.1% for the fourth quarter last year. Finally, non-GAAP income for Q4 was $12.2 million, up 59% year over year, and non-GAAP earnings per share were $0.31, which was at the high end of our guidance. For the full year of fiscal 2023, total revenue grew 14% to $249.5 million, with subscription revenue increasing by 14% to $181.4 million, and professional services revenue up 15% to $68.1 million. Gross profit grew to $152.6 million, representing a gross margin of 61%. Adjusted EBITDA grew by 34% to $42.9 million, representing an EBITDA margin of 17.2% versus 14.6% last year, and non-GAAP earnings per share grew by 54% to $1.11 versus $0.72 last year. Turning to our SaaS metrics for Q4, our SaaS ARR reached $131.2 million, which was an increase of $21.8 million or 20% versus Q4 of last year. In addition, trailing 12-month SaaS net retention was 118% in Q4. Earlier this year, our SaaS ARR growth rate and net retention metrics partially benefited from SaaS transition activity, reaching a peak in our fiscal Q2 this year. The Q4 results were right in line with our target. In terms of the balance sheet, we ended fiscal 2023 with $301.4 million in cash and equivalents, which was up $108 million from the end of fiscal 2022. Approximately $80 million of the increase in cash was due to the refinancing of our convertible debt in the second quarter, with the remainder coming primarily from operations. Turning to remaining performance obligations, our total RPO for Q4 was $344.6 million, which was up 3% on a year-over-year basis. The current portion of our RPO balance was up to $148.3 million, representing growth of 12% year-over-year. As I noted last quarter, our total RPO has been impacted by SaaS transition activity over the last year or so. We had a period of outsized growth last year due to a number of long-term SaaS transition deals, often with contract lengths well in excess of three years. These longer-term commitments added extra years to the total contract value reflected in our RPO. As renewals and other non-SaaS transition bookings become a bigger proportion of the total, we are seeing our average contract length in RPO return to a more normalized level. Before we get into the details of our guidance for next year, we recognize that it can be difficult to understand some of the underlying trends in the business during the transition. A strong growth in SaaS revenue has been partially offset by declines in maintenance and term license revenue. A few years ago, we introduced SaaS ARR and net retention metrics to provide insight into the rapidly growing SaaS business that is embedded within our subscription revenue line. Today, we are providing more detail on the three components of our total subscription revenue: one, SaaS revenue, two, subscription services revenue,... and three, maintenance and term license revenue. The first two, SaaS and subscription services, represent the go-forward subscription revenue of the company, which was up 22% on a combined basis in FY 2023, with SaaS growth at 30% and subscription services growth at 2%. The third is our legacy maintenance and term license revenue, which declined by 35% in FY 2023, as we have been actively converting those customers to SaaS. You can find the detail for the last three years on page 12 of the investor overview deck that is posted on our website, and we will disclose these components annually going forward. As we look ahead to fiscal 2024, it will be another year of transition, and we expect solid growth in SaaS to again be partially offset by declines in maintenance and term licenses. More specifically, we continue to set a goal of, for SaaS ARR growth of 20%, but the comparisons to last year will be very difficult, especially over the first two to three quarters, where we expect growth rates to be in the mid-teens. For our subscription services business, we noted last quarter that we have seen some slowdown in growth for these offerings due to the general macro environment, and we would expect flat to low single-digit revenue growth for this segment again next year. Finally, we expect the combination of maintenance and term licenses to decline even more rapidly in FY 2024, dropping by more than 50% as we approach the end of this revenue stream. In summary, for FY 2024, we expect total revenue to be in the range of $260 million-$263 million. We expect subscription revenue to be in the range of $193 million-$195 million, representing growth of 6%-8% and right in line with the preliminary outlook that we provided on our Q3 earnings call. Finally, we expect professional services revenue in the range of $67 million-$68 million, which would be about flat with last year. I would note that professional services revenue exceeded our expectations in FY 2023, making for a very difficult comparison in FY 2024. We expect adjusted EBITDA for the year to be in the range of $48 million-$51 million, representing continued margin improvement. And finally, for non-GAAP EPS, we expect a range of $1.25-$1.32 per share, based on a fully diluted share count of approximately 40.1 million shares. For Q1 fiscal 2024, we expect total revenue to be in the range of $61.5 million-$62.5 million, with subscription revenue in the range of $46.5 million-$47 million, and professional services revenue in the range of $15 million-$15.5 million. We expect adjusted EBITDA to be in the range of $8.5 million-$9.5 million, and non-GAAP EPS to be in the range of $0.29-$0.31 per share, based on a fully diluted share count of approximately 39.2 million shares. Finally, we've also included a midterm view of our business on page 16 in the Investor Relations deck. As we look forward a few years and contemplate a normalized business model post-transitions, we believe that we can return to double-digit total subscription revenue growth while continuing to improve adjusted EBITDA margins into the mid-20s. While the math is working against us in FY 2024, it starts to improve once we get through the downdraft of maintenance and term licenses. In summary, by maintaining SaaS growth in the 15%-20% range, slightly improving subscription services growth to the mid-single-digit range, and eliminating the year-over-year declines from maintenance and term license revenue, we would expect the blended growth rate for total subscription revenue to be in the 10%-15% range. On the profitability side, we believe that we can drive adjusted EBITDA margins into the low- to mid-20s by continuing our steady performance and focus on profitable growth. Combining these two elements, we can see a path to a Rule of 40 business over the midterm based on subscription revenue growth and Adjusted EBITDA margin. With that, I'll turn the call over to the operator for any questions. Operator? Thank you. If you would like to register a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge that request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. Once again, to register for a question, is one four on your telephone keypad. Your first question comes from the line of Adam Hotchkiss with Goldman Sachs. Your line is open. Great, thanks for taking the questions. I guess, John, could you just break out the pieces a little bit more for us, on the fiscal 2024 guidance relative to what you provided us last quarter in your soft guidance? You know, how you're thinking about SaaS ARR. I know you mentioned that, you know, there might be a mid-teens growth there in the beginning of the next couple of quarters relative to the 20% you had provided last quarter. And then just any way you're thinking about maintenance and term license and the business services line relative to last quarter. Just breaking down the expectations across those three would be really useful. Yeah, sure, Adam. I think we made, you know, some of these comments in the, in the prepared remarks, but maybe I'll just, reiterate a few things. I think first off, in terms of the total subscription number and the, and the growth rate, that is, right in line with the outlook that we provided on the Q3 call. And so when I look at some of the components of that, on the SaaS ARR in particular, we do continue to set a goal for SaaS ARR growth of 20%, but the comparisons to last year are going to be pretty challenging, especially over the first two to three quarters. And so over the first, you know, let's call it first half to three quarters of the year, we would expect growth rates to be in the mid-teens. In terms of the other elements, again, we laid those out in the comments as well. So for maintenance and term license revenue, we expect that to decline pretty significantly again in FY 2024, probably dropping by more than 50% next year. And then on the subscription services piece, which includes application services and business services, we're expecting to see flat to low single-digit growth again next year. Okay. Thank you. That, that's really helpful. And then just Jason, anything you would call out on the, on the regulatory side? I know there are a number of products you've had, launched, through Rainmaker and have had a number of customer conversations on in relation to recent regulation. Just any updates on, on how customers are responding to that and how that momentum is going? Yeah. So we've got products in market right now to deal with some of the State Price Transparency laws that have been enacted over the last three to four years. That is actually last year was one of our best-selling products in terms of cross-selling into customers. So I think that tells you right there how important State Price Transparency is to customers. We've also just recently, over the last year, released a 340B product called 340B Vigilance that helps customers deal with that purchasing program and supplying therapies into low-income communities. And we've really seen nice pipeline build there and have been working with a couple of our lighthouse customers to continue to enhance the product. So those have been definitely two stars for us that show regulatory is top of mind. And then, we just issued a press release. If it wasn't yesterday, it was today, on our Life Sciences Fall 2023 release, and that's gonna start to lay some of the groundwork for the Inflation Reduction Act. And of the pharma companies that are gonna be impacted by that, there's roughly 10 therapies on the first round of focus by the government, and virtually all of those therapies are produced by our customers. So, we're starting to layer in Inflation Reduction Act functionality as well. So it's a part of every one of our conversations, Adam. It's a great question. Great. Thanks for taking the questions, Jason and John. Sure. Thanks, Adam. Your next question comes from the line of Ryan MacDonald with Needham. Your line is open. Thanks for taking my question, and congrats on a nice quarter. Jason, I'm curious, as you think about the professional services and the business services side of the business, I'd be curious to hear more about what's contemplated in the growth rate for next year, particularly as today another vendor in this space had called out and had lowered their guidance based off of sort of less discretionary spending on services from life sciences companies, as they look out over the next year. Just curious if you're seeing any impact at all, or how much of that's sort of contemplated in the updated guidance for 2024. Yeah, I might have seen that other vendor that you're referencing, Ryan. Yeah, I mean, as we've talked about the last couple of quarters, so we have a subscription services bucket, and in that bucket is business services and then some enhanced service offerings that we provide to our customers. And as I think we talked about on Q2, but especially on the Q3 call, we have seen some macro impact on those two. It's been well published that the emerging biotech and mid-market pharma segment has been impacted by the constricting financial markets and lack of availability to capital. So then we see a little bit of impact there in business services as fewer drugs are approved and fewer companies are looking to scale in that market segment. And then certainly on the application services, which is the enhanced services, you know, those are things that companies of all sizes, as they're tightening their belts, can at times see as discretionary. So, if there was a little bit of macro pressure for us, it was in those two segments, and it is reflected in the guide that we just provided, as well as our midterm model. Ryan, this is John. I'll just call a distinction to professional services, which is our implementation team, and it's a little bit of a different dynamic there. The team has been doing extremely well over the last couple of years, and they're still carrying quite a bit of project backlog into FY 2024. However, with the overperformance in FY 2023, it's setting up for some pretty difficult comparisons, and so it'll be harder for that piece of the business to grow next year. Appreciate that additional color there, John. Maybe as a follow-up for you, you know, great to see and thanks for providing sort of those midterm targets and walking us through some of the math there. You know, just curious, as we think about the 23%-26% adjusted EBITDA margin targets in the midterm, you know, can you talk about sort of where you expect across the P&L to get the most leverage? Are you seeing more at the gross margin level as revenue mix shifts over the next few years? Or how much do you think more you can squeeze out of sort of the OpEx, which already runs pretty efficient? Thanks. Yeah. No, thank you. Good, good questions. And I would say it's a few areas. So, first of all, you know, I think we've just had a very steady and continuous dedication to profitable growth, and so it's part of the culture here, frankly. And so each year, as we set our targets, we aim to drive growth, but also drive incremental profit to the bottom line. In terms of some of the areas that we see leverage up and down the P&L, one is on the gross margin line. So there's a few things that help there. One, just becoming a fully dedicated cloud business and not having to spread our resources across different elements helps us. The revenue mix also helps. So the SaaS portion is more profitable than some of the subscription services, and so as that increases as a percent of the total, that helps our gross margins as well. And then on the operating expense side of things, we've been investing in sales and marketing to drive bookings growth, where we've been able to pick up some leverage is on the R&D side, where we don't have to support as many products out there. We also see some opportunity for leverage on the G&A line. Appreciate it. Thanks for taking my questions. Sure. Thanks, Ryan. Your next question comes from a line of Craig Hettenbach with Morgan Stanley. Your line is open. Hey, it's McCoy on for Craig. Thanks for taking the question, and congrats on a good quarter. John, as you think about kind of the 2024 guidance, can you talk about a little bit about how much that assumes new customers versus kind of upsell and cross-sell? And then, just on 2024, is there anything we should think about as far as billings throughout the season? I know kind of renewals are coming up in this quarter and maybe in Q1. Just anything to think about going forward? Thanks. Yeah. In terms of the, I guess, the composition of the overall growth, you kind of hit on them, but the, the key growth drivers remain largely the same. So we will still have some growth from SaaS transition activity, as well as new logos and cross-sell, upsell. Increasingly, we're seeing more and more focus on new logo activity and the cross-sell, upsell, and we've done quite a bit of work internally to get organized around those two opportunities, focusing in on top 100 accounts and really doing quite a bit of work to identify where the white space opportunities are with our existing customers. And so that's all work that we've been doing and will continue, and those will be key drivers for FY 2024 again. In terms of the billings and some of those cycles, we did see a little bit more variability last year, particularly with some of the anniversary billings of larger SaaS transition deals, and I would expect we'll see a little bit of that again in FY 2024. Got it. Thank you. That's all. I'll hop back in the queue. Thanks. Thanks, McCoy. Your next question comes from a line of Rishi Jaluria with RBC. Your line is- Wonderful. Thanks so much for taking my questions. First, maybe I want to follow up in terms of thinking about expansions for next year. So I understand with the SaaS NDR, you're starting to, you know, kind of taper off some of the benefits from the SaaS transition. You'll still get some next year. How should we be thinking about kind of NDR, both next year, as well as maybe longer term as you know get completely through the SaaS transition? I've got a quick follow-up. Sure. I'll start with that one. So you know, it's interesting, when we first introduced this metric, we talked about a range for net retention in the 110%-115% range, and then we proceeded to beat that, I think, each and every quarter. We have gotten benefit over the last year from SaaS transitions, and so as you've seen our SaaS ARR growth rate ramp up, and then come back down to the target rate, our net retention metric has done the same thing. If I think longer term and look at a 15%-20% target rate for SaaS revenue, in that scenario, I would expect net retention to be in the mid-teens with maybe, you know, the remaining 5 points of growth coming from new logo activity. Got it. Thank you. That's, that's helpful. And then, would love to touch on kind of cash flow. I mean, you're showing, you know, EBITDA margins continue to expand. How should we be thinking about cash conversion over time and, and maybe kind of bridging that delta between adjusted EBITDA and free cash flow? Thank you. Yeah. No, it's a good question. I would say that the cash flow relative to Adjusted EBITDA was a little bit off in fiscal 2023. If you look at our accounts receivable and our DSO metric, it actually crept up a little bit year-over-year. A big piece of that, unfortunately, was a large receivable that came in on October 2 instead of September 30. So that would have changed the results for us for both DSO and free cash flow. Having said that, I think when we look forward, we would expect cash flow to be closer to Adjusted EBITDA. There's really not much below that in terms of capital expense. We do somewhere in the neighborhood of $1 million a year in capital expense, and so your Adjusted EBITDA should trend to free cash flow over time. Perfect. Thank you so much. Yep. Your next question comes from the line of Nick Mattiacci with Craig-Hallum. Your line is open. Hi, this is Nick on for Chad Bennett. Thanks for taking our questions. So, Jason, it would be great if you could just talk a little bit about your view of Model N's opportunity internationally. Can you just talk about what needs to happen outside of the U.S. to capture this opportunity? And if there's anything fundamentally different about those markets, maybe from a compliance or regulatory standpoint, or is it more about just getting the right sales and marketing infrastructure in place? A little bit of everything you've touched on, Nick. So first of all, the U.S. market and how pharma companies are regulated is unique. It's really the only market in the world that has this level of complexity and government involvement. As we look in Europe, as an example, a lot of pharma products are bought through central health ministries and through a tendering process, basically an auction. The pricing in Europe is also a little bit different in that countries will negotiate agreements with pharma companies, where the price they're willing to pay might be the average of, call it five, five countries that look like them, so that are, you know, similar GDP and similar state of advancement in their healthcare systems. So how they're bought, how they're priced are different, and we actually do have two products that are, I would describe as functionally complete, Global Price Management, that helps manage all of the complex reference pricing, the country-based pricing that I described. And then, a product that is bespoke, vertically tailored for pharma procurement and plugging into the pharma-specific tender site. So, we have great products, and we have over the last couple of years, we've talked about this, started to selectively invest in our team in Europe in terms of some sales capacity, solution consulting, and some professional services, and even some product people in theater. It's been a measured investment, but, you know, we do see those products as being very strong products that that team sells. And that team also collaborates with our global account teams that might be servicing a U.S.-headquartered pharma company with operations in Europe. So yeah, I'm excited about Europe. I'm excited about our products there, and we've got a small but mighty team in that theater of operation. And as we continue to move forward, you know, I see us continuing to selectively invest there. Got it. And then just any comments on what you're seeing in the high-tech vertical, just as far as deal activity, either new logo or expansion, just how is that performing relative to your expectations, and any macro impacts to call out for that vertical? Yeah, I mean, as we've talked about it, kind of widening the aperture over the last couple of years between COVID and supply chain issues, and the rising inflation, or excuse me, rising interest rates to combat inflation, you know, we have seen some pressure, and we've talked about that in that segment. You know, that said, when I look at our existing customers in high-tech, they're market leaders, and market leaders, you know, will often invest in projects that have tangible top line and bottom line results, and our products do that. So we've seen our customer base thoughtfully invest over the last couple of years. I think what's been encouraging to me this year is we've started to see a pickup in new logo in our pipeline. We had nice attendance from high-tech at Rainmaker, and we saw that event have a really nice impact on, frankly, new logo, both life sciences and high-tech. So as we come into our fiscal 2024, I'm pretty excited about new logo in general, and it's been encouraging to see a pickup in the green shoots in high-tech as well. Got it. Appreciate you taking the questions. Thanks, Nick. Your next question comes from line of Matt VanVliet with BTIG. Your line is open. Yeah, great. Thanks for taking the questions. I guess as you get pretty far along here in the SaaS transition, but go to sort of sell back into the existing base, do you feel like you're experiencing any kind of fatigue from some of those customers that have, you know, gone through a pretty arduous process to move to the cloud, maybe holding off on any expansion or upsell opportunities there? Or maybe just generally, how would you look at the pipeline for the cross-sell activity over the next couple of quarters? That's a really good question, Matt. We've seen a little bit of both, to be perfectly honest. We've seen customers. I talked, I've talked about some of these examples on earnings calls where, you know, they'll take new products as a part of their SaaS transition. And so that's worked well for us. We certainly have, though, over the last year. I mean, in some respects, you know, we've had so many of our customers actually going through projects. They've been potentially slower to take new products than in a steady state. For me, that's why I'm so excited about, you know, effectively wrapping up SaaS transitions in the next couple of quarters, because that basically gives our entire customer base back to us and allows us to go sell to new divisions, sell to new geographies, and sell into the white space-white space, both products that we you know are building today and products that are on the shelf and ready to go. So I think it's an insightful question, and I'm really excited about, as I described it, getting the customer base back and not having to compete with SaaS transitions and really bring some of this new innovation and the new products to our customers, where I know they're going to see great value. All right. Very helpful. And then in terms of overall headcount, I guess two parts there. One, on the go-to-market team, do you feel like you need to fill in any spaces there or add capacity in certain areas? And then secondarily, as you sort of wind down on the SaaS transition on the R&D side, can you, you know, sort of migrate some of those support-type people into a more forward-leaning type role, and how you can leverage that moving forward? Yeah, that's a great question. I'll, I'll take that one as well. So, you know, we've continued to hold sales and marketing as revenue's been growing at about 16%. And so implied in that is over the last couple of years, we have continued to, to feather in, new headcount on the go-to-market side. The focus early on, particularly given COVID and the, SaaS transition, initiatives that we had, the early on, the focus really was on hiring in, in the customer base. I think that's what's allowed us to drive, SaaS transitions and, and cross-sell, upsell, nicely over the last couple of years. Starting last year, early in the year, we started to, rotate our bias on hiring more towards new logo, and, I'm excited about that. I mean, we exit the year with a new logo team that's really ramped, and I think it's a very capable team. You know, we took advantage, I would say, of a buyer's market on talent and got some really, really good folks into that team. So I would say as we sit here today, we're properly resourced on go-to-market. And then the second part of your question is also a great one on engineering, and we've essentially been flat, flat-ish on engineering, but yet we've been supporting SaaS transitions, seasonal releases, and also building new products and releasing new products. All of that capacity and our ability to do two seasonal releases a year, as well as build a couple new products a year, is coming almost exclusively from repurposing engineering capacity that was supporting legacy on-prem code lines, historically. All right, great. Thank you. Thanks, Matt. As a brief reminder to all, to register for a question, it is one, four on your telephone keypad. Your next question comes from the line of Samad Samana with Jefferies. Your line is open. Hey, guys, this is actually Billy Fitzsimmons on for Samad. Maybe taking a step back and going big picture again. In the prepared remarks, you discussed macro impacts, and I know last quarter it was discussed how macro factors have elongated sales cycles. And now that we're kind of a good way through earnings season, we've heard from a lot of companies, and some of them have called out that macro factors incrementally worsened in the third calendar quarter or your fiscal fourth quarter. So curious for your thoughts there, if anything incrementally has changed for you. And what I'm trying to get at is, you know, we've had a couple companies call it deteriorating macro factors, and a lot of them are for different reasons. So some are seeing SMB weakness, some are calling out specific verticals got weaker, some are seeing lower new logo activity, some are seeing elongated sales cycles. And Model N is obviously an enterprise-oriented company with very specific verticals. So, trying to get your guys' sense of those things, and if by chance, changes have been incrementally minimal, then just be curious if you can comment on what you're seeing or hearing from your largest customers amidst the current macro environment in recent weeks and months. Yeah, it's a good question, Billy. So if I reflect back on the year, we talked a little bit about macro headwinds in Q2, especially on some of the things that could be potentially perceived as discretionary, and followed that up with a similar trend in Q3, where, again, discretionary spend was getting a little more scrutiny, potentially, you know, not making the cut on budgets. But on our Q3 call, if I remember correctly, I talked about I didn't think things had deteriorated as we'd gone from Q1 to Q2 to Q3. And as we sit here today, I would say the same thing. And I think part of that is that we are a vertical company. You know, big pharma, which is, you know, you ask about our largest customers, they're continuing to invest. We've got lots of projects going on with big customers right now, as you can see in our professional services revenue and margin. So yeah, that part of the market, which is ultimately our core constituent, seems to be pretty healthy. As I talked about in response to the last question, we seem to be seeing a little bit of a pickup in high tech as our existing customers that are market leaders are investing. And we did see a nice group of prospects in high tech attend Rainmaker, and those deals have continued to progress forward in the pipeline. So yeah, I mean, we have seen some of these trends that others have reported. But I think it's stabilized certainly in our business. As we look forward into our fiscal 2024, I'm pretty excited about it. Great. And if I could sneak in one more. Looking at the press release, you guys highlighted a couple new product releases and enhancements. How should we think about the path to monetizing some of these newer solutions in the quarters and years ahead? Yeah. So, I mean, there's a few new products in there. 340 B is a product that's actually in the market that we've been working with existing customers to enhance and further develop. And as I talked about in response to one of the questions earlier, in terms of pipeline and interest, that one's been a star for us this year. You know, we're still trying to fully assess the impact of the Inflation Reduction Act, but that's another one where it drives people to our door because they know eventually they're gonna have to be compliant. So that certainly drives demand for us. And then, the Channel Collaboration portal that we talked about on the high-tech side is definitely front and center for a lot of our customers and prospects. So the response to those releases, and not just the new products that we've built there, but over the last year and the things that are on our roadmap, people are really excited about it. I think coming out of Rainmaker, one of the consistent things I heard from our customers is it's great to see Model N coming out on the other side of SaaS transitions and really being able to work with us and partner with us to build new products and innovate. So I'm excited about the roadmap and some of the things we're hearing from customers on these new products. Perfect. Thank you very much. Thanks, Billy. Your next question comes from the line of Brian Peterson with Raymond James. Your line is open. Hey, thanks. This is Johnathan McCary on for Brian. So I think just kind of relating to that last question, thinking about the Inflation Reduction Act, it's obviously sweeping legislation, and I'm just trying to, maybe you can help me understand: Are you expecting, like, any SKUs to come out of that regulation, or is that simply additional functionality you just kind of integrate into the existing platform, and then customers come to you, kind of come in the door, like you just suggested there? And then how soon do you think that could be a meaningful contributor to revenue? Well, for now, at least as we understand the Act, Inflation Reduction Act now and how we think it's going to be implemented, it's gonna be major enhancements to core Model N functionality. And in the latest release that shipped, we made some pretty major changes to the products data model to contemplate some of the new data fields that we have to track. The thing that's still being worked out is exactly how the negotiations between the government and the manufacturers is gonna work and how some of the calculations are gonna work. And it's our belief right now that that's probably just gonna further enhancements to our core calculation engine and some of the existing functionality. What we have certainly seen, in terms of a catalyst with the Inflation Reduction Act, is it has been driving our largest customers to get to the cloud and get current, because that's, you know, as you see with this latest release, where we're implementing the new functionality to address this compliance issue. You know, first version of the Inflation Reduction Act is really gonna be targeted at therapies that are top 10 sellers, maybe top 20 sellers in the U.S. And so those, by definition, tend to be some of the larger pharma companies. But I think the industry views this as just a start, and it's eventually gonna be much more wide sweeping, wide-ranging, excuse me, which definitely drives overall demand for us. Okay, thanks. Thank you, Johnathan. Your next question comes from the line of Patrick Walravens with JMP Securities. Your line is open. Oh, great. Thank you. And it's really great that you're getting to the end of this transition, Jason. So overall, you described the quarter as being strong. I'm just trying to... I mean, I realize there's a ton of things going on, but from a sales attainment point of view, this quarter, was it strong? Were you-- did the sales forces, you know, production meet your expectations? It did. We had a good quarter overall, especially relative to the full year, and we saw a nice contribution from a combination of new logos, cross-sell, upsell, as well as closing some of these SaaS transitions to end out the year. So yeah, I was happy with how the team ended the year. Okay, great. Great. And then, John, maybe for you, because I'm just getting this question. And so, yeah, if the sales team was good, why is it—why were billings and RPO below what people were expecting? What's the dynamic there? So, I guess it's hard for me to speak to some of the expectations that might have been out there and what were in people's models. But, if you look at our total RPO- I mean, just the consensus. And current RPO. Yeah. Yeah. If you look at those, they did move up sequentially, and that would reflect some of the sales activity that Jason just described. When you look at it on a year-over-year basis, you are facing some more difficult comparisons due to some of the SaaS transition activity that occurred at the end of last year. Okay. And then you mentioned in your, in your script, $2 million this quarter and then $1 million next quarter of expenses related to a corporate development initiative. It's a lot of money, so what, what can you tell us about this? Well, unfortunately, there's not a whole lot more that we're willing to disclose on that, but we did wanna call it out just in terms of the variance to our Q4 guidance, as well as, providing some context around where the Q1 guidance stands for Adjusted EBITDA in particular. So, unfortunately, there's not a whole lot more that we can talk about on that one. Okay. Thank you. Thanks, Pat. There are no further questions. I'll turn the call back to Jason Blessing for closing remarks. Thank you very much. Thank you, operator, and thank you everyone for joining us today. I'd like to once again thank our employees for their hard work and solid execution, which is clearly illustrated by our performance in Q4. I'd also like to thank our customers. We really value your partnership and are looking forward to this post-SaaS transition world, where we can innovate together. And, again, thank you to everyone for joining us today. Have a great night. That does conclude the conference call for today. 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