Greetings, and welcome to Vertex, Inc.'s first quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'd like to turn the conference over to your host, Ankit Hira, with investor relations at Vertex. Please go ahead. Thank you. Good morning, everyone, and thank you for joining us for Vertex's financial results conference call for the first quarter ending March 31, 2022. On the call today, we have Vertex CEO, David DeStefano, and CFO, John Schwab. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results for our company and are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings. Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release. This conference call will be available for replay via webcast through Vertex's investor relations website at ir.vertexinc.com. With that, I'll now turn the call over to David. Thanks, Ankit. Welcome, everyone. 2022 has started off incredibly well at Vertex, with solid growth and positive progression across many dimensions of our business, resulting in total revenues of $115 million, up 17% year-over-year. Our teams continue to execute well and drive momentum in the markets we serve, accelerating ARR growth to 18.9% in the first quarter, while maintaining strong EBITDA margins of 16.6%. We're seeing strong adoption persist from both new and existing customers. Our NRR grew to 110% this quarter, which speaks to the efficacy of our increased go-to-market investments and our ability to build trusted, lasting relationships through a differentiated customer experience. These are cornerstones of our sustained success. Our first quarter results also demonstrate the progression of our cloud revenues and the expansion of our install base, whether that is through regional expansion, product cross-sell, sustained platform migrations, and increased transaction volumes. Cloud revenues continue to increase as a percent of total software subscription revenues from both new and existing customers. In Q1, 96% of our new logos were cloud, and overall, cloud now represents approximately 40% of total subscription revenues. Overall, I'm excited about our strong performance out of the gate and how well it sets us up for the remainder of the year. First, our core enterprise segment remains healthy and continues to widen. These are the most dynamic companies in the world spanning every industry. They are at the heart of global commerce growth, and their performance durability is proven even in the most challenging of economic conditions. Second, we consistently leverage our market-leading position by providing a mission-critical service in a large and growing global market. Now, we are replicating our formula for enterprise market success into Europe by combining strong partnerships, fit-for-purpose solutions, and customer referenceability. We are extending the power of our platform by delivering enhanced capabilities and expanding the breadth of our tax content. The market is responding well to our accelerated investments. Throughout the quarter, we experienced strong interest in our new Edge and exemption management solutions. We've made huge investments in our content database, in turn, expanding our differentiation. In fact, since our IPO, we have doubled the size and scale of our content database from 350 million in effective rates and rules to over 700 million today. This includes expanded verticals as well as global support and expansion in areas like Europe and Brazil. Our content now supports tax determination in 195 countries around the world. The strategic investments we have made over the past 18 months are allowing us to extend both our addressable market and the value we can deliver to our customers. With the acquisition of LCR-Dixon, we have the most complete and differentiated tax automation solution for SAP. Again this quarter, we saw how this acquisition is paying off by helping to increase our win rates and revenues tied to SAP deals. We have a vision to accelerate global commerce. To achieve this, it will take a community of talented and aligned partners who come together as a seamless network focused on customer experience. It's why we're building our solutions into all the major platforms powering global commerce, backed by the largest community network of tax technology experts and partners. In the first quarter, we continued to see momentum and energy building in our go-to-market motions, thanks to our focused approach with key partners. We continue to see tremendous market opportunity, and we believe Vertex is in a unique position to connect business and government seamlessly across the entire fabric of global commerce. Our first quarter results underscore the durability of our business, the strength of our customer and partner relationships, as well as our ability to deliver sustainable, profitable growth. I am thrilled with how our strategy is coming together. As cross-border transactions and real-time compliance become more the course of business, the adoption rates of multi-cloud strategy are on the rise for complex organizations, and the convergence of payments and tax is accelerating, which will expand our addressable market even further. All of this takes scale, a proven track record, and an end-to-end platform. We are delivering intelligent automation with end-to-end capabilities, content and insights to enable trusted transactions and confident decisions. I'd now like to provide a closer look at the progress we're making in these areas and share a few examples from the quarter. In our last call, I announced the release of O Series Edge. This next-generation solution moves tax content and applications to the edge of the cloud and beyond. Our solution enables a frictionless customer experience regardless of where and when a transaction occurs. Already in the quarter, O Series Edge is creating a buzz with companies looking for next-generation solutions to support business growth. In fact, our first win emerged out of a conversation in an industry forum where a current customer recommended us and our solutions to a prospect. The result was a seven-figure net new logo win with one of the largest healthcare retailers in the U.S.. This Fortune 25 company was reimagining their in-store technology infrastructure. They saw value in moving away from their homegrown system to our tax engine and Edge solution to ensure accurate tax calculation as well as up-to-date rates and rules. I think this deal reflects the incredible growth potential that still exists with enterprise and Fortune 500 companies. Many still maintain manual processes, which up until now have been good enough, but with increasing complexity, gives us additional white space to further penetrate this highly valued area of our addressable market. I'm also proud of this win because it exemplifies why we put so much emphasis on delivering an exceptional customer experience. We know it sets us apart, and moreover, it's not easy to replicate. These relationships and this level of trust are not built overnight and must be earned continually. It requires people who get tax and technology and care enough to make it work in our customers' environments. This is what the talented Vertex team bring to the table each and every day. When it comes to tax compliance, complexity is rapidly emerging from multiple angles for our customers. Not only are they having to keep up with changing regulations, but as companies undergo business and digital transformations, they also are contending with complex IT systems. That's why tax technology is growing in value and demand. The ability to address tax automation across multi-cloud and multi-tax type environments is where Vertex excels, and it's showing up in new logo and customer expansion deals. We saw this in Q1 with a global data analytics and technology company. Our ability to support multi-system integration, multi-region, and multi-tax type requirements will enable one source of truth for their business across North America, EMEA, and AsiaPac. Key to this win was our cross-application capability connecting their Salesforce and Workday solutions to one central tax engine. We also enjoyed a great competitive takeaway with one of our existing customers. With a heavy M&A strategy, the company was managing 10 entities across multiple ERPs, and because of the various acquisitions, they were running three competitive tax solutions along with ours. It was our ability to support multi-system environments which made the decision to standardize with Vertex easy. This savvy enterprise software provider truly understands tax complexity and saw Vertex as the best solution to support their business growth. Because in fact, we are the gold standard of the enterprise market. Enterprise customers also greatly value our vertical expertise to support the complex tax nuances specific to their industries. Looking at key verticals across the S&P 500, we have a dominant position in the manufacturing sector broadly as well as technology, retail, and wholesale. We also furthered our leadership in our leasing and telecom verticals in the first quarter with a handful of key wins. The depth of our tax content, the expertise of our teams, and our end-to-end tax automation capabilities were a powerful combination for these customers. We had a large Q1 win in oil and gas, where we significantly expanded our content database. Beyond the content, what stands out for me in this deal is the tight collaboration with the SAP go-to-market team and our alliance partner. By working in concert with their sales team, we're able to unlock increased value for our customers. This is just one example of how we are taking our partner ecosystem to the next level. Let me now pivot to our ecosystem growth. We've expanded our global footprint with Oracle Cloud Infrastructure to provide increased support to meet data requirements outside of the U.S. As a result, we're seeing increased interest and solid growth with both Oracle and NetSuite. I've highlighted some of the work we are doing with SAP. I'm also proud to share that we were recognized as an SAP Pinnacle Award finalist for being one of the top three ISV partners in terms of driving revenue and opportunities through the SAP Store. In Q1, our retail solution was approved as a solution for the SAP Industry Cloud for retail and has been added to the SAP Store listings. Combining our ecosystem-specific offerings with the continued adoption of both OCI and S/4HANA platforms has created sustained opportunity for us to grow our addressable market within their ecosystems. Now through closer alignment with their sales teams, we are able to provide increased value for customers. We continue to invest in expanding our mid-market share as tax complexity is not limited to the largest organizations. As mid-market companies increase their digital presence, complexity comes with it. Our solutions are helping companies of all sizes access new markets and reduce the friction between commerce and compliance. These companies are turning to Vertex to ensure a single platform for tax calculation that tightly connects into a multitude of systems from front office applications like billing and CRM and extending through back-office ERP and procurement systems, as well as e-commerce platforms. Another area I'm excited to highlight is the performance we experienced in Europe this quarter. The strength of our capabilities with SAP and the depth of our global content enabled a six-figure deal with a European chemical leader looking to streamline their tax process. Our cloud solution, coupled with the SAP accelerator and the LCR tools, gave this new customer the confidence to automate tax calculation. The beauty for us in competitive deals like this one is that no one comes close to the breadth of our solutions for businesses running on SAP. We've been making disciplined investments to propel our growth in Europe and through digital commerce platforms, and we continue to build momentum around our acquired Taxamo solutions with digital natives and e-commerce companies in rapidly growing sectors like gaming, fitness, and education. Just as we are focused on building strong and lasting relationships with our customers and partners, we are also focused as an organization on strengthening our communities. This support is more important than ever as we continue to face the global humanitarian crisis in Ukraine. The people of Ukraine are demonstrating incredible courage, and our hearts go out to all who are affected. The Vertex team stands united with the global community in protecting our fundamental human rights. It is core to who we are and what we value, guided by a deep respect for all people. As I close out my comments today, I could not be prouder of the contributions of our global Vertex team. We remain laser-focused on our strategy. We continue to accelerate our go-to-market motions and bring product enhancements to market with speed and scale. We never lose sight of the importance of delivering exceptional value to our customers and continuously innovating for the future. We are on course for another strong year, and I'm incredibly encouraged by the opportunity we see for continued growth. Now I'd like to hand the call over to John for a look at this exciting quarter by the numbers. Thank you, David, and good morning, everyone. Today I'm going to review our first quarter 2022 financial results and provide second quarter 2022 and full year 2022 guidance. Total first quarter revenues grew 17% year-over-year to reach $115 million, exceeding the upper end of our quarterly guidance by $1.5 million. Our subscription revenues increased 16.6% period-over-period to $97.1 million. Services revenues grew 19.4% period-over-period to $17.9 million. Our annual recurring revenues, or ARR, grew to $380.6 million at March 31, 2022, representing approximately 18.9% growth over the comparable 2021 period. Excluding the acquisitions of Taxamo and LCR-Dixon that were made during 2021, our ARR grew at 17.1%, which is an increase from 15.1% that we reported in the fourth quarter of 2021. Our net revenue retention rate, or NRR, was 110% at March 31, 2022, growing from 105% for the comparable 2021 period and from 108% in the fourth quarter of 2021, demonstrating our customers' ongoing commitment to our software and solutions. For purposes of clarification, NRR only includes those customers that were with us at the beginning of the measurement period, so these amounts do not include the Taxamo or LCR-Dixon results. Our gross revenue retention rate, or GRR, was 95.6% at quarter end, which excludes internal migrations by customers to our cloud solutions, which were approximately 3%. This is consistent with our prior performance, which has averaged between 94%-95%. In addition to the ARR growth as mentioned above, our returns processing managed services business generated recurring services revenue of over $6 million in the first quarter of 2022 as compared to $4.9 million for the comparable prior year period. This service is a competitive differentiator and is a significant component of recurring revenue, which is not included in our ARR. At March 31st, we had 4,242 customers, reflecting a 30-customer decline, mostly at the lower end of the market. We view this as noise that we are not concerned with relative to the success of our strategy. Keep in mind that our GRR continues to grow, and our AARPC has grown from $86,700 at December 31st to $89,700 at March 31st, 2022. With the success of our one-to-many strategy, where we utilize channel partners to sell and service smaller customers, beginning in the second quarter, we plan to include those customers in our total customer count. These customers will have a similar profile to those that we have lost at the lower end. We expect that this change will increase our total customers by more than 200. We continue to see strong year-over-year growth in our cloud-based solutions among both existing and new customers. Period-over-period revenues from cloud-based solutions grew to $38.3 million, an increase of 42%. Excluding acquisitions, cloud growth was 38% year-over-year. In discussing the remainder of the income statement, please note that unless otherwise stated, all references to our expenses, operating results, and per share results are on a non-GAAP basis. All non-GAAP financial measures are detailed and reconciled to our GAAP results in the earnings press release that was issued this morning. On an overall basis, gross profit for the first quarter was $80.7 million, representing a 70.2% gross margin. This compares with gross profit of $68.4 million and a 69.7% gross margin in the same period last year. From a subscription software standpoint, our gross margin was 76.6% as compared to 77%. Gross margin on services revenues increased to 35.3% from 28.1% due to increased utilization. Our first quarter research and development spend, which includes our capitalized software development costs and cloud-based customer solutions, was $19.8 million, representing 17.2% of revenues. This reflects ongoing substantial investments in our cloud solutions, integration of acquired technologies, and ongoing expansion of connectors and APIs to continue the integration of Vertex's capabilities into customer software platforms. The spend reflects increases in development personnel through a more efficient and balanced use of our global development team, positioning us well for R&D growth in capacity as well as capability. First quarter selling and marketing expense was $25.6 million or 22.3% of total revenues, an increase of $6.9 million and approximately 36.5% from the prior year period. This increase is due to ongoing funding of expanded go-to-market activities to drive future revenue growth. We intend to continue to make additional investments in sales and marketing capacity to drive this growth. First quarter general and administrative expenses was $26.2 million or 22.8% of total revenues, an increase of $5.6 million from the prior year period. This increase is primarily driven by planned strategic investments in our information technology infrastructure, business process reengineering, integration costs, and other initiatives to drive future operating leverage. Adjusted EBITDA was $19.1 million for the first quarter of 2022, an increase of $1 million over the prior year comparable period, and it exceeded the upper end of our quarterly guidance by $2.1 million, primarily due to our revenue performance and spend initiatives that shifted into the second quarter. Adjusted EBITDA margin for the first quarter of 2022 was 16.6%, a 187 basis point decrease versus the prior year comparable period, primarily due to our investments in go-to-market activities and strategic investments to drive our operating leverage. During the first quarter of 2022, we consumed $14.2 million in free cash flow, reflecting our ongoing investments in research and development and infrastructure modernization initiatives to support future revenue growth and operating leverage. First quarter free cash flow represents a decrease of $2.8 million from the comparable prior year period as a result of our increased investments in these areas. Historically, our cash flows in the first quarter are lower than the remaining calendar quarters as they are heavily influenced by variable compensation payments. Turning to our liquidity, we ended the first quarter with over $97.3 million in unrestricted cash and cash equivalents and $50 million in indebtedness. As previously discussed, we amended our $100 million credit facility in March with a new five-year, $250 million facility consisting of a $50 million term loan and a $200 million line of credit. We expect to utilize the facility primarily to fund working capital expenditures, and permitted acquisitions and general corporate purposes. Turning now to guidance. For the second quarter of 2022, we currently expect total revenues in the range of $116 million-$117.5 million, representing growth of 11%-12% from the second quarter of 2021. Adjusted EBITDA in the range of $16 million-$18 million, representing a decrease of $1.2 million-$3.2 million from the second quarter of 2021. For the full year 2022, the company continues to expect total revenue in the range of $479 million-$483 million, representing annual growth of 13%-14% from the full year of 2021. Adjusted EBITDA in the range of $72 million-$75 million, reflecting our ongoing investments in acquisition integration, as well as continued spend in research and development and sales and marketing expense to pursue opportunities for growth. We continue to anticipate that cloud revenue for 2022 will grow by 33% over 2021. As a reminder, in the second quarter of 2021, we recorded cloud-based revenues of $2.1 million from a tier-based subscription amendment to a cloud customer that we had highlighted at the time. We do not anticipate a similar adjustment in 2022. We are very pleased with the solid fundamentals of our business, which delivered strong quarterly performance in revenues and EBITDA and fueled strong first quarter ARR, NRR, and GRR performance. With that, we'll open the call up for questions. Thank you. At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we poll for questions. As a reminder, we request to limit to one question and one follow-up. We have a first question from the line of Matt Stotler with William Blair. Please go ahead. Hey, good morning, guys. Thank you for taking the questions. Maybe just wanted to start off from a high level. Obviously, there's a lot of different factors impacting the business environment right now. You know, increased inflation, concerns around that, you know, geopolitical impacts in Europe, tight labor markets, et cetera. You know, Q1, I mean, clearly the results were positive, right? Acceleration in key metrics, uptick in NRR, strong GRR. Would love to just get your, I guess, your observations, your thoughts around some of those macro factors, anything that you're seeing in the market and any thoughts on those on a go-forward basis. Thank you for the question, Matt. I appreciate the comments on the quarter. You know, I think as of this point in time, we are not experiencing any slowdown in pipeline activity. I think the complexity that are the tailwinds of our industry continue to drive demand, and it's not getting any easier for them because businesses are in a continual search for more growth, and the regulators are desperate to find ways to collect their money. We're certainly seeing some audit pressure pick up in certain areas, which is, again, good for us because it ultimately fuels demand. And there's still a steady march of good activity as companies like SAP and Oracle have reported around their activity on the cloud. That is certainly fueling some of the differentiated relationships we enjoy. They are driving some of our continued pipeline views. Got it. That's helpful. Then maybe one on cloud growth. Obviously, continuing to see some pretty robust growth in that segment of the business. Any update on the contribution that you're seeing there from kinda new versus existing on-premise customers migrating over? Obviously, it sounds like it's a great engine for bringing in new customers. Would love some thoughts on the install base migration path going forward as well. Yeah. Matt, you know, one of the things we're finding is, and that's part of the strategy about bringing out new products, is the more we start to surround our existing customers with new cloud-based solutions, like our Edge solution that we launched at the beginning of the year, it will drive more migration opportunities for us. I think we continue to bring out new products that are all cloud first in what we're building, it will continue to pull the customer base along. We haven't seen any fundamental shift in that trajectory that we've been talking about, but I do. Part of our strategy with what we're bringing forward is to pull them into that space moving forward as the year and years progress. Got it. That's helpful. Thanks again. Thank you, Matt. Thank you. We have next question from the line of Joshua Reilly with Needham. Please go ahead. Hey, guys. Thanks for taking my questions. Nice job on the quarter here. I know Europe is a small business for you guys currently, but you've been expanding your presence in the region there. Have you seen any divergence between demand in that region versus the United States since the Ukraine conflict has begun? And are you still adding sales heads at the same pace as last quarter in that region? Yeah. Josh, we are still adding go-to-market activity, and really what's driving it is a couple of things. One, the acquisition we made in Taxamo is giving us a differentiated conversation opportunity there, and we're certainly seeing that as we continue to integrate that product into our broader suite. The second is the relationships we've been talking about with SAP. Because of where we are in the SAP Store and how we're working now in parallel with their sales reps to do account planning, that is driving demand opportunities for us more so than any of the offset that might be because of some of the political or economic uncertainty at this point in time. We continue to wanna bring more capacity to market on the go-to-market side because we're seeing a good uptick in activity. Again, SAP being the dominant platform of large enterprise, it aligns perfectly to our strategy. I, you know, I still am bullish on what we're trying to accomplish there. You touched on it a bit on the increasing enforcement for the marketplace rules that were put into effect last July in the EU. Can you just give us an update, you know, how much more enforcement are you seeing? Is it beginning to drive incremental customer interest? It absolutely is. Yeah. I think enforcement is still at a fairly quiet level, candidly. I think the recognition that the enforcement is coming has clearly surfaced in the dialogues we're having, and we're seeing a different nature of exploration of the merged Vertex Taxamo assets than we were in the past. Got it. Thanks, guys. Thank you, Josh. Thank you. We have next question from the line of Andrew DeGasperi with Berenberg. Please go ahead. Thanks for taking my question. On first on the customer count, you mentioned the loss of 30. Just maybe if you can expand on that. I mean, I would have thought it would have affected your gross retention rate, but it didn't. I guess first, maybe can you give us an idea of how, you know, what's the typical contract size for these customers? And also, you mentioned the 200 or so that you're gonna add in the next quarter. Should we assume those are kind of customers that might be at risk of churning off, or are you just trying to sort of size what the activity is going in that pipeline? Yeah. Andrew, thanks for the question. This is John. I'll start with that, and David, maybe you can add to it. I think, you know, as we thought about the customer—we looked at the customer activity, what we've seen and what we continue to see is some noise there. Again, we had a 30 customer decrease, but it's at the very low end of the market. Again, it's customers that aren't necessarily, you know, very profitable in terms of that perspective. Again, it's at the very small end that we've had for a period of time. You're not seeing any degradation in any of our GRR or AARPC or anything else because of the size of the customers that we're losing. Again, what we're gaining is far in excess of the things that we're losing. We're talking under $10,000 annual customers, you know, that really aren't our target market. What we've done is we've put in place that one to many strategy that we've talked about a number of months ago to really find others that can help us sell and service at that lower end. They'll be handling not only the initial customer contacts, but follow-up contacts to assist with that, to give them the care that they need to grow their businesses. That's our approach at that level, and that's what's gonna help us kinda move through. Again, largely, it's a very similar client to those that are turning off, but we have a different approach to being able to better manage them. Got it. Then maybe when we think about the enterprise contribution, I mean, SAP, OCI, would you say that they've grown sequentially relative to Q4? You know, is the contribution from this new relationship with SAP, I mean, how meaningful? Have you seen a definite material increase in terms of activity from that pipeline? Yeah, no, absolutely. The SAP, when you combine the investment in new products like the Chain Flow Accelerator that we brought to market and our global compliance product, and then you add in the SAP relationship that we form with their sales teams and the LCR-Dixon acquisition. When you look at the triumvirate of those three things, we are definitely seeing a differentiated conversation with the SAP community that has us very excited because we know where we are within the SAP online store in terms of our success there. Now we're able to continue to drive more customer value through the product and the relationships with the sales reps. Yeah, we're definitely in a very different place with SAP, which is partially the reason I'm addressing the other question that was asked by Josh around Europe. We continue to see that given the primary platform that they are, why it is supporting our enterprise strategy. Thank you. Thank you. We have next question from the line of Samad Samana with Jefferies. Please go ahead. Hey, good morning. Thanks for taking my questions. Maybe first one, John, subscription revenue was quite strong in the first quarter. I'm just curious, was that more a function of seasonal strength and maybe price increases resetting, or was that a function of new bookings that you guys talked about in fourth quarter coming online? Just help me understand that kind of $4 million quarter-over-quarter increase versus last year where it was kind of flattish from December to March. How should we think about maybe the seasonality for the rest of the year with that in mind? Yeah. Thanks for the question, Samad. I think when we think about sort of what that growth looked like in Q1, it was a couple of dimensions to it. You know, again, largely we had a nice Q4, and that Q4 rollover into the first quarter certainly carried things in. You know, again, typically Q4 is our strongest quarter in terms of kind of sales and booking activity that occurs, and then it softens up in Q1 and starts to build throughout the year. I think that's that same shape we're anticipating to still, you know, stick with us. We are, as you well know, making investments in sales and marketing, go-to-market activities to really, you know, continue to try to increase the opportunity as David's talked about. Hopefully we'll continue to see that growth and hope even to a greater extent as we progress throughout the year. I wouldn't necessarily pin a lot of it to big price increases. As you know, we do have a regular kind of price increase kind of activity in motion as we've been in business for such a long time. I would say the activity from 2021 into 2022 isn't dramatically different than that because a lot of our price increases get set at the very end or at the middle to the end of the prior year. That stuff was sort of locked in, so I don't see that contributing any more than it has in the prior periods. Hopefully, that's helpful. Definitely. Maybe just stepping back in terms of the investment initiatives, and I'm not sure if I heard it correctly, but it sounded like maybe some of the spend may have slipped out of 1Q into 2Q. Just what was maybe the reason behind that? Is it just the hiring environment? Is it within a certain part of the company's OpEx structure? Just what are you guys thinking as far as spending initiatives that went into 2Q instead of 1Q, and how should we think about kind of where that was, whether it's sales and marketing or R&D? Samad, it was largely hiring driven. We certainly have been aggressive in the market with capacity additions, both in R&D and sales and marketing and continue to be. You're right, it is a tighter labor market, and we did have a little bit of what we had planned didn't come in quite as soon. We had a couple of projects where we intentionally just looking at all the different moving parts of activity, we slowed down a little bit, and those are now just from an overall prioritization falling more into Q2 and beyond. Those expenses will catch up. Great. Thanks, guys. Thank you. We have next question from the line of Pat Walravens with JMP. Please go ahead. Oh, great. Thank you so much. This is Joey Marincek, I'm for Pat. Just following up on that last question, I mean, how are you feeling about sort of your ability to attract or retain talent in this environment? I have a follow-up. Thank you so much. Yeah, Joey, you know, I think two things that are playing well for us in the R&D side, some of the technology that we're starting to leverage more and more is pretty exciting to some of the folks that we're talking to in the R&D community. I think that has played well to attract the kind of talent that we're looking to add. On the sales and marketing side, again, I think some of the differentiated relationships that we enjoy. We're able to talk to the community that are out there, whether they be in our industry or related software sales industry, about how we're able to bring them a differentiated go-to-market opportunity when they're talking to, you know, pursuing new customers, given things like the Oracle and SAP relationships. I think the conversations actually play pretty well for us. It's just as you know, it is a tight labor market in general to find the quality that you want. I think when we get in those conversations, we've got really good stories on both the R&D front and the sales and marketing front that serve us well to secure the talent we're looking for. That's really helpful. Thank you so much. You know, just on the continued investments in the mid-market, how are you feeling about your overall progress there? Can you remind us of sort of your expansion strategy in that segment? Thank you, guys. Yeah. Mid-market remains, you know, twenty percent of our customers come from the mid-market already. It is something we're looking to continue to expand. I think we saw some and are seeing some good traction in areas like Salesforce and Workday. Been very encouraged by some of the progress we've made there. It's motivating us to accelerate some of our investment in the sales and marketing and channel area. When we think about Europe, it's largely an enterprise strategy. Mid-market will play in there because SAP goes down to a level and we're gonna sort of follow the SAP roadmap, largely in the Europe mid-market. Do you have any further questions, sir? Thank you so much. Thanks, Joey. We have next question from the line of Brad Reback with Stifel. Please go ahead. Great. Thanks very much. David, as we think about the acceleration and investment, in the business on the OpEx side, should we be thinking that success would be a return to 20% ARR growth or something different than that? Thanks. Brad, I think we've been consistent. We believe that, you know, with the investment we're making in both sales and marketing, customer success management, and R&D and our content databases, we continue to invest in those areas. We believe absolutely, the durable growth rate of this company should be in that 20% range with margins that will start to come back higher. You know, certainly we've talked about as our cloud continues to gain scale, and we continue to leverage more of our content investment, we would expect gross margin will help accelerate, which will serve ultimately driving the EBITDA margin as well. That's great. John, on the IT investments, when should we expect to start seeing leverage and, you know, operational efficiencies from those? Yeah. I mean, we're gonna continue to, you know, invest in those areas. You know, it'll take us a little bit of time to get those investments in there and start seeing them show up in some of the numbers and some of the events. So I think that's really, you know, pushed out. You know, it takes a little bit of time to start realizing that. So we're still in the investment phase. The realization phase is probably, you know, follows 12 months and then a little bit into the future, certainly as you continue to perfect and get better as you drive. That's great. Thanks very much. Yep. Thanks, Brad. Thank you. A reminder to participants, if you wish to ask a question, please press star one on your touchtone phone now. We have next question from the line of Daniel Jester with BMO. Please go ahead. Hey, good morning, everyone. Just on the guidance, you know, obviously the first quarter came in above plan and the commentary around demand seems pretty good, but you left the full year revenue guidance unchanged. Can you help us think about sort of what's going on in the back half of the year, or are you just being conservative given the macro? Thanks. Yeah, Dan, thanks for the question. I'll start with this. I think, you know, you're right. We had a real nice quarter. We're pleased with the results that we have, and we still think there's very good opportunity in the business. You know, consistent with what we did last year, you know, the first quarter is good, but we wanna make sure that we've got, you know, a real good view on kind of how things are developing and how things are moving. You know, we think it makes sense to wait until the second quarter to evaluate whether we need to move that. I mean, again, we had a real nice beat in Q1. A couple of percentage points was terrific. you know, again, we wanna be thoughtful, conservative, and mindful of some of the, you know, economic uncertainty that's in the economy now before we start moving things and changing them around. Okay, great. Appreciate the context on the Edge solution and the win in the quarter. Can you just remind us, like, what is the catalyst that's gonna get customers to come to that product, and how different is it going to be relative to sort of the more traditional Vertex offerings? Is it gonna be around sort of omni-channel refresh? Or like how do we think about sort of the catalyst that are gonna get people to engage you on that one? Thank you very much. Yeah, you know, it's really the evolution of business complexity where businesses are pushing growth to the edge, meaning they're looking to have transactions happen on a cell phone or an iPad or via a sensor, and the regulators wanna make sure they're able to bring tax at that level as well. So at that point of need, we've been able to now shrink the footprint of our O Series capability via the O Series Edge to that exact point of need. That differentiation really serves the retail community exceptionally well because that's a very common form, and we've certainly seen a growth backlog as e-commerce slows down, a little more in-store activity, and that will drive demand drivers. We're also seeing some interesting businesses that are not directly in retail that are looking for endpoint solutions as well, across their operations. I think it's business model complexity, and wanting because the regulators are taxing at the point of transaction, wanting to have that accuracy, built in is gonna be the demand drivers for those offerings. Great. Thank you very much. Thank you, Dan. Thank you. We have next question from the line of Pat Walravens with JMP. Please go ahead. Oh, great. Thank you. Yes, as I was listening, David, I just wanted to drill down more. On SAP, three things. Number one, what other options do people have for tax calculations if they're running SAP? Number two, how does this SAP store work? Then number three, I mean, I'm hearing the same thing about people are, you know, moving to S/4HANA, especially big companies, but it is kinda counterintuitive, right, given the macro. Why is this happening now when there's so much uncertainty? Thanks a lot. Yeah. Certainly consistent with whether it be sales and use tax or VAT, the manual or in-house solutions have been developed, and they have been good enough, and so that's historically using either SAP native VAT functionality or the manual process they built around it have been the demand drivers of the past, or they've been the good enough solution in the past. The demand driver now, Pat, is that really their complexities in the regulations and the complexity of the business models can't be served by those capabilities anymore. That's been the tipping point, where now we are able to work with their sales team and actually go in and deliver a differentiated customer value. That is the first driver, and that's what's different for us. It's no different candidly than any other Oracle relationship from the perspective of how they were solving it to now what they're looking for is a third-party solution. As far as the online store, what it gives us is a more direct access to the SAP customer base, where they're able to go in and explore our product in a differentiated way. And then the sales team knows because of our status within the online store, it's a capability for them to promote to their customers. I think that's what's helping us, again, fuel more demand, opportunities and more pipeline activity. As far as the S/4 migration, I can't speak to what are the demand drivers. We partner with them after they've made those decisions. We're certainly seeing good activity and have good visibility to a lot of dialogue. I think it's consistent with the thesis you often ask about us, like how's our cloud migration going. I think as more and more companies continue to wanna move their infrastructure to the cloud, it is, they are still continuing on that journey. These, again, are the largest enterprises in the world who have the durability to get through some of these economic, the noise of some of this, the economic conditions that I think obviously smaller companies are gonna be more conservative than the larger companies. The last thing I would just add that supports that is, I think during the pandemic, we saw a real slowdown in some of this activity because IT functions of these large organizations had to focus on sustaining just operations. Now they're getting back to, because they know they can sustain on a remote basis, they're now getting back to the investments they need to be making in their business. I think that again serves us well for, you know, a durable tail here. Okay, super helpful. Thank you. Yeah, sure. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I'd like to turn the call back to David DeStefano for closing remarks. Over to you, sir. Well, thank you everybody for joining our call today. I look forward to coming back this summer to share more about the advancements we are already making. Take care. Thank you. Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.