Good afternoon. Welcome to Model N's third quarter fiscal 2021 earnings call.

This is Carolyn Bass, Investor Relations for Model N. With me on the call today are Jason Blessing, Model N's Chief Executive Officer; John Ederer, Chief Financial Officer; and Cathy Lewis, Chief Accounting 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 third quarter of fiscal 2021 performance and offer a financial outlook for our fourth quarter and fiscal year ending September 30, 2021.

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 representing our views as of any subsequent 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 filed with the SEC. In addition, during today's call, we will discuss some non-GAAP financial measures.

These non-GAAP financial measures should be considered in addition to, not as a substitute for or an 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 third quarter fiscal 2021 press release, periodic SEC reports, and the webcast replay of this call. Finally, unless otherwise stated, all financial comparisons in this call will be to our fiscal year 2020 results.

And with that, let me turn the call over to Jason.

Thanks, Carolyn. And good afternoon everyone and thank you for joining our call.

Our third quarter results outperformed across the board, exceeding all of our guidance metrics. We saw a nice revenue upside for both subscription and professional services including accelerating organic growth in our core model and business.

Our bottom line over-performance was driven by improved gross margins, accelerated cost synergies from the integration of the acquired Deloitte Business Services Group, and overall disciplined expense management. We've returned to double-digit profitability sooner than expected after the Business Services acquisition and we remain focused on driving profitable growth as we close out this fiscal year and look to the future.

Turning to the business; our success this quarter was driven by a healthy contribution all of our growth levers. We signed five new logos, four SaaS transitions including one of the world's largest pharma companies, numerous customer-base expansions, and we also enjoyed strong renewals across the board.

This quarter was also one of the best total deal counts for us with contributions from Life Sciences and High Tech. In recent quarters, we've talked about a strong pipeline and an increase in sales activity and it's encouraging this quarter to see that trend continue and result in a high number of closed deals.

On our last call, I shared that we were accelerating the integration of Deloitte Business Services into our sales and delivery teams so that we could capture both economies of scale and go-to-market synergies. In particular, we felt that enabling our entire sales organization to sell business services would allow us to better capitalize on the TAM expansion that this acquisition gives us.

Combining teams also allows us to sell the best revenue management solution depending on a customer-specific requirements. I'm pleased to report that this approach is in fact allowing us to realize the value of this acquisition ahead of plan.

We are capturing cost synergies sooner than expected, particularly on hosting costs and contractors spend, which helped to drive sequential gross margin improvement in Q3. But more importantly, this combination is proving its strategic value by helping us to secure new customer wins.

Case in point, during Q3, we added two new Business Services customers, MorphoSys and Mayne Pharmaceutical. The win at Mayne is particularly interesting because they want to start their revenue management journey leveraging Business Services, but also want the flexibility to bring certain business processes in-house in the future without changing their revenue management partner.

Mayne concluded that Model N is the only company to provide this flexibility while supporting their growth today and into the future. Mayne is also one of the largest Business Services deals signed to date and illustrates model and strength of selling to enterprise class companies.

Finally, I want to set expectations that we do not plan to specifically break out Business Services new logos in the future, but I did feel it was important to share some color this quarter to illustrate the strategic importance of this acquisition. During the quarter, we also signed Viatris, a new company that was created through the combination of Mylan and Pfizer's spin-off of its Upjohn division.

This new global company, now one of the top 20 largest pharma companies in the world is delivering increased access to affordable quality medicines for patients around the world. We are excited to partner with Viatris as they're cloud revenue management provider of choice.

Q3 was also an important quarter for SaaS transitions. Most notably, as I previously mentioned, one of the largest global pharma companies committed to a long-term contract to move to the Model N Revenue Cloud and also expanded their product footprint.

This company is also a Business Services customer and showcases how Model N is uniquely positioned to support global pharma customers with our broad portfolio of products and services. During the quarter, we also signed a significant SaaS transition deals with Grifols and Akorn.

Turning to High Tech, we continue to see improved traction in this part of the business. During the quarter, our sales team signed two new logos, including Creston, a $2 billion workplace technology manufacturer.

Our High Tech team also renewed our long-term relationship with California Eastern Labs by signing a SaaS transition. Moving to our cloud offering will allow California Eastern Labs to access our latest innovations in Deal and Channel Management while lowering their total cost of ownership.

On our last earnings call, we announced targets Targus as a new customer, and I am pleased to share that they are already live on our channel data management platform. This quick implementation is a result of the investments our professional services team has made to ensure that we deliver rapid time to value for our new customers.

Targus is also a great example of how our land and expand sales motion sets us up for additional expansion opportunities in the future. With rapid successful go-lives, we were able to showcase our value proposition and demonstrate ROI quickly, which leads to future up-sell and cross-sell opportunities.

Speaking of professional services, the entire team continues to perform at very high levels as they lead our customers to the cloud and deliver on the new deals that we have sold over the past year. In Q3, we set a new record for the number of go-lives, including key projects at J&J, Japan; Boston Scientific, and Western Digital.

Our services team also continues to deliver over 90% of projects on time, on budget, and at best-in-class margins. I continue to be amazed by what this team is accomplishing given the volume of projects and the shift to remote work during the pandemic.

I also expect strength to continue in our Professional Services business as the team has built a substantial backlog through the year, which bodes well for fiscal year 2022. Turning to product innovation.

Our R&D team continues to deliver on our product roadmap and has not missed a beat during the pandemic. In Q3, we introduced a new product Deal Management for Life Sciences.

This new offering streamlines customer sales processes by connecting pricing information stored in Model N with actual purchase history that usually resides in their ERP. Combining these two datasets allows the system to do pre-deal analysis and identify the best suited product or solution for a prospect.

It also recommends a quote that complies with the customer's business practices, is profitable and results in sales reps being more responsive to their customers and prospects. This product was built in collaboration with some of our largest med tech customers and showcases the power and leverage that we get out of our R&D investment as we move our customers to the cloud and leverage our platform.

In closing, I want to underscore how pleased I am with our Q3 performance. I want to thank the entire Model N team who executed at a high level to deliver these results and I'd also like to thank our customers for your continued support.

Our financial results highlight our commitment to driving double-digit subscription revenue growth combined with double-digit adjusted EBITDA margins. We believe that our strategy is resonating within the market and I believe we will end this year as a stronger company with momentum that will carry in the fiscal year 2022.

Now, I will turn the call over to John, to discuss our Q3 financial results and provide an update on our guidance. John?

Thank you, Jason, and good afternoon to everyone on the call. As Jason mentioned, the company performed very well in the third quarter as we exceeded our guidance on all metrics.

Revenue upside was driven by both subscription revenue and professional services revenue as our services team had an exceptional quarter. We were also particularly pleased by our adjusted EBITDA performance this quarter as we were able to return to strong double-digit margins sooner than we anticipated following the acquisition of Business Services.

Looking specifically at our results for the third quarter, total revenue grew 24% to $51 million including $6 million of revenue from Business Services, subscription revenue grew 26% to $36.9 million, and professional services revenue grew by 19% to $14.1 million. All of these results exceeded our expectations for Q3.

You might note that Business Services revenue was down slightly on a sequential basis versus Q2. This is the result of a new multi-year transaction with a large pharma company that Jason discussed earlier.

This is a joint customer of Business Services and Model N that is transitioning to the Model N Revenue Cloud. Adjusting for the transition of this customer, our Q3 Business Services revenue would have had a slight uptick on a sequential basis.

One of the key drivers to our subscription growth has been the fact that Model N provides a high ROI to our customers as evidenced by our strong renewal rates. During the 12 months ended June 30, 2021, our dollar based net retention rate for subscription revenue was 115%.

Over the past several quarters, this rolling metric has been consistently in the 110% to 115% range, that has improved over the last few years as a result of the strategic sales realignment we put in place. Turning now to profitability for the third quarter.

Non-GAAP gross profit was $30.7 million or a gross margin of 60% versus 64% in Q3 last year. Non-GAAP gross margin for subscription revenue was 68% versus 74% in Q3 last year, again reflecting the mix of revenue from Business Services.

Non-GAAP gross margin for professional services revenue was 41% versus 40% in Q3 last year. As we've noted on previous calls, the mix of revenue from Business Services has had a dampening effect on our overall gross margins compared to last year.

However, I would note the solid sequential improvement on gross margins from Q2 to Q3 of this year for both subscription and professional services. Our organic Model N non-GAAP subscription gross margin remains at comparable levels to last year in the mid-70% range.

One final comment on gross margins is that the Professional Services team did a remarkable job this quarter, delivering a non-GAAP gross margin of 41%, even including the Business Services team. While this team can continue to operate well above industry averages, we do not expect that we can sustain an extraordinary level reached in Q3 as we head into a seasonally slower quarter and you'll see that reflected in our Q4 guidance.

Operating expenses for Q3 were lower than expected due to accelerated synergies from the acquisition, good cost management overall, and the timing of smart deinvestments. As a result, adjusted EBITDA for the quarter was $7.4 million, representing growth of 16% year-over-year and was well ahead of the high end of our guidance of $2.5 million.

Adjusted EBITDA margin hit 14% in Q3, which is getting back to the levels we were at prior to the acquisition of Business Services. While we still have some work to do to sustain this level, we are pleased to see EBITDA margins back at strong double-digits in Q3.

Finally, non-GAAP net income was $5.7 million or $0.16 per share versus the high end of our guidance of $0.02 per share. Looking at the balance sheet and cash flow, we ended the quarter with $153.8 million of cash and equivalents, which was up $5.4 million from the end of March.

Cash flow from operations during Q3 was $6.6 million, up from $3.8 million in Q3 last year. And current deferred revenue was $53.6 million, down $1.7 million from the end of March.

While current deferred revenue declined sequentially, primarily due to the timing of a few transactions, it was up 18% year-over-year versus Q3. Turning to RPO or remaining performance obligations, the total balance was $220.5 million, representing an increase of 41% year-over-year.

Current RPO totaled $105.1 million, an increase of 29% year-over-year. While RPO metrics may fluctuate on a quarterly basis due to contract lengths or the timing of renewals, overall we have seen strong growth in RPO, which provides for better visibility on future revenue.

I'd now like to provide you with guidance for the fourth quarter and update our outlook for the year. We are increasing our guidance for the year, which reflects the over-performance in Q3 and an improved outlook for Q4.

For the fourth quarter, we do expect adjusted EBITDA margin to be down sequentially, but remain in the low double-digit range. Our outlook reflects our improved cost structure overall, but a lower contribution from Professional Services due to seasonally lower utilization levels as well as some additional planned R&D investments in Q4.

In summary, for the fourth quarter, we expect total revenue to be in the range of $50.5 million to $51 million, subscription revenue to be in the range of $37 million to $37.5 million, non-GAAP operating income to be in the range of $4.8 million to $5.3 million, and non-GAAP EPS to be in the range of $0.09 to $0.11 per share based on a fully diluted share count of approximately 37 million shares. Finally, adjusted EBITDA is expected to be in the range of $5 to $5.5 million.

For the full fiscal year 2021, we are raising our guidance and now expect total revenue in the range of $192.5 million to $193 million, subscription revenue in the range of $141.3 million to $141.8 million, non-GAAP operating income in the range of $22.3 million to $22.88 million, and non-GAAP income per share in the range of $0.45 to $0.07 based on a fully diluted share count of approximately 36.7 million shares. For the year, adjusted EBITDA is expected to be in the range of $23.1 million to $23.6 million.

As we close out this fiscal year, we are beginning to fine-tune our forecast for next year. The prevailing strategy will be one of profitable growth, which you are seeing in our financial results and guidance today.

Overall, for fiscal year '22, we are comfortable with where the current consensus expectations are for total revenue and adjusted EBITDA. Further, we would expect the mix of revenue between subscription and professional services to be comparable to where we are closing out this year.

We will provide more formal guidance on our normal cadence following the Q4 results. To summarize, we are executing very well on SaaS transitions with many of our largest customers now making the move and we're setting ourselves up for long-term subscription revenue growth.

I'll now turn the call over to the operator for any questions. Operator?

Yes, good afternoon, everyone. Nice job in the quarter.

Thanks for taking my questions here. Really a strong progress on continuing to get more customers and signup for SaaS migrations, so great to see on that level.

Maybe kind of a two-part question. Maybe Jason, first, do you have any customers that are still kind of putting off the discussion, and if so, kind of what is the sticking point or are we now in a case where it's just a matter of planning out a multi-year project and when you're going to make those migrations?

And then secondarily, as we get more of them coming through the pipeline, should we expect there to be a little bit of a headwind on EBITDA margins, just given some of the ramp structures for those deals or are we kind of past that initial bump down and it's just sort of building on top of each other? Thanks.

Yes, Matt, both are good questions. In terms of timing, as it is with any technology adoption cycle, you've got the early adopters and I would say we're kind of in the middle of the cycle right now and have really good visibility with our customers over the next 2 to 3 years on their migration timing.

So, I think we've got good visibility there and I think the exciting part of it is with all of the success that we've had with past SaaS transition as well as some of the new innovation that's going into the product, there's a lot of excitement to get current and take advantage of all of that new innovation. So yes, good visibility over the next couple of years and very engaged with our top 20 customers including our big 10 customers as we've referred to them in the past, our top 10 customers specifically.

And then in terms of deal ramps, interestingly enough in the quarter deal ramps were actually a little bit below where they were pre-pandemic, so we've talked about them being about a third of deals pre-pandemic and of course that stepped up to about 50% and it was back down to less than a third as we went through this quarter. So, we're encouraged by that trend and as we've talked about in the past, management is not incented to ramp deals, so we'll continue to do everything we can to keep that at a manageable level.

Great. And then on the High Tech side, how much of the general supply chain constraints that we're hearing about from all types of products has really driven demand, especially for the Channel Management program where they're trying to squeeze every, every last day and how are they gaining [ph] off the supply chain?

You mentioned a big deal that you landed there, but is that really driving some of the conversations across High Tech or do you see other areas that are equally strong and driving the strong results here? Thanks.

Yes. In High-Tech, in particular, we continue to see nice traction; obviously had two new deals in the quarter including a SaaS transition in High Tech.

To your point on where the demand is, we continue to see very strong demand in semiconductors, which is really kind of our heritage of where we started, and we're also seeing more component manufacturers come into our pipeline as well and demand in both of those sub-sectors is in part being driven by the strong global demand and wanting to make sure that these companies enable their best channel partners to distribute their scarce product while they catch up. So, it is, I would say, a little bit of a tailwind for us and we certainly have noticed more activity in those two sub-segments.

All right, great. To jump in execution is always good to see.

We will jump back in queue, thanks.

Thanks, Matt.

Great. Thanks for taking my questions, guys.

John, as we look out to '22, you mentioned being comfortable where consensus numbers are, just curious what the implied contribution or maybe growth rate from the Business Services, business might look like versus your legacy organic Model N?

Thanks, Jackson. We probably won't get that granular today in terms of the outlook for '22, but I think if you look at it in the aggregate, you're looking at top line growth in the low double-digit range as well as EBITDA margin in the low double-digit range.

And so, we're looking at a balanced approach as we head out to next year. In terms of the splits between subscription and services overall, we talked about those trending in the direction is where we're landing this year.

And then from the perspective of the core software business versus business services, I think there're opportunities on both sides and we're seeing a nice blending of that business as evidenced by some of the deals this quarter, Mayne Pharma, in particular.

Okay, all right. Thanks.

And then Jason, follow-up for you. Allowing everybody in the company to sell kind of everything that the company offers with Business Services going to be entire model on sales force, just curious is there any kind of reciprocal selling going on as well where Business Services kind of sales also is having some success selling Model N into those existing customers?

Yes. Thanks for the question, Jackson.

So the sales team that we inherited from Deloitte was a fairly small team and they've been playing an enablement role and an overlay role to make sure that the rest of the sales team gets up to speed and understands how to sell that service, and I think our Q2 results speak for themselves with a couple of new logos. And, we are now starting to go back into some of the Business Services accounts and looking for cross-sell opportunities of heritage Model N products that just didn't exist in the Business Services portfolio, so the obvious ones there are Global Tender Management and Global Pricing really products that are aimed at Europe.

And so, all of the Business Services accounts have been parceled up and assigned out to Model N reps so they can - they can go in and talk about the value proposition and look for those opportunities.

Okay, cool; blocking and tackling. Thank you.

Thanks, Jackson.

Great. Hi, everyone.

Jason, just several interesting developments are in the quarter, so kind of normalization and ramp deals, but below normal at those points. The fact that it does seem like the pace of sales migration, those picking up at least the number of announced transactions is higher this quarter than it was in previous quarters.

I guess at a high level, what's your take on all of those? Obviously, Model N has been executing along the strategy.

Is it just a function of time and kind of maturity of this strategy or are there other things that your customers are becoming mindful of as they think about planning their business strategies out for the next few years?

Yes. It's a great question, Joe.

I know there's been some discussion around when SaaS transitions at Model N actually started. But at least in my mind, I think the clock is starting in 2018 when our very first customer transition and that was Gilead and then if you fast forward now, two plus years later, we've got about a dozen of successful SaaS transitions completed and roughly another dozen or so projects in flight and have really now started to break into that big 10, top 20 cohort of customers.

And I think there're few things happening. One, these projects are happening and they're happening successfully and on time and customers are talking about the increased benefit of performance in our cloud and the increased value of the products that they have access to by being on our cloud platform.

So, there are a couple of elements there. And then the regulatory landscape continues to be very fluid and as we've said to our customers we're going to support everyone, but we are going to make any updates and changes more quickly in our cloud environment.

And so, I think it's been this confluence of execution, organic product build on our side plus some of these macro tailwinds that just continues to drive momentum here.

Okay, that's great. And then, at a high level [indiscernible] some time in fiscal '22, but if the pace of sales migrations is picking up, what we kind of expect behind the scenes to see the maintenance - legacy maintenance related revenues?

The pace of declines accelerate there and so when we expect low-double digit all in growth next year and kind of constant mix? Assuming subscriptions are growing at that rate, what is really happening is kind of your pure SaaS revenues of core Model N is actually in the midst of accelerating, but there is some mitigating factors in the full year number?

Yes, Joe. Thanks for the question and I appreciate the focus on next year.

What I would say is that directionally I think you're statements are on, so we do continue to have a mix in the model of the growth on the subscription side somewhat mitigated by the decline in maintenance. The maintenance has been, I would say, fairly consistent this year; so we've been declining on an average in the 5% to 10% range, and I would expect that to continue to be a consistent pace there.

And then as you noted, the overall growth that we're talking about for next year is a blend of the two.

Okay, helpful. Thank you very much.

Thanks, Joe.

Hi, this is Alex Narum on for Ryan. Congratulations on the quarter, and I was just hoping to ask Jason a question.

You introduced Deal Management for life science towards the end of the third quarter. While I understand it's early days, I'd be curious to your initial customer feedback on the solution and its potential impact to the pipeline?

Yes, it's a great question, Alex. Generally, I have to say I'm really proud of how our product team is executing, particularly in this distributed work environment.

It's less than ideal of an environment to build products, but we continue to do a great job delivering new releases and new enhancements and modules that really deepen our competitive mode, specifically on the deal management side of things. In this statement, you can generalize to all of the new products we work on, are really developed in conjunction with our customers and it makes it a lot easier to do joint development with customers as they get current and everyone is on the same platform.

So Deal Management in particular was co-developed with some of our largest med tech customers where they have fairly complex bundling of products and some of the products in that bundle tend to be their high margin and some can be commodities, and so how they bundle and price those products is really important. The other thing I would say is just kind of a more general statement as well.

Some of the new products that we've been building, whether it's Deal Management, Advanced Membership Management, Global Tender Management Enhancements, and so forth, all of these products help enhance the value proposition to entice our customers to move to SaaS. So, it is important driving those transitions and then driving associated cross-sell and up-sell and you really see that thesis playing out in the net dollar retention statistic that we disclosed on the call today.

Great. And then, what was the mix of growth inorganic versus organic?

On the - for Q3 on the total revenue side, we reported $51 million; the total growth would have been 24%, the organic growth was 9%.

Great, thank you.

Yes.

Hey guys, this is Joe [ph] on for Terry. Thanks for taking the question.

I think you actually kind of just alluded to this, but I was just wondering if you could comment on customer transition to the cloud and their propensity to add more modules versus in the past when they were on premise?

Yes, it's - again, it's a great question. All of the new innovation that we're building and all of the new products that we're building require a customer to be current and in the cloud, but SaaS transitions open up access to a broader portfolio of products and services for customers and it is increasingly becoming the norm for customers as they move to the cloud to add services and products.

So, we already talked about some of the products on the call, but we have different levels of enhanced support that we can also charge in a recurring revenue model on top of our subscription. So, the cloud really does offer us a lot of additional things that we can sell customers and the uptake has been accelerating as we move customers to the cloud.

I appreciate it. Thanks for the color.

Thanks, Joe.

Great, thank you. John, I want to ask about the margin outperformance in the quarter.

And with strong bookings activity, how we should think about the growth investments for fourth quarter and beyond? I think we heard incremental R&D, but I know you've been investing in new logo team.

I'm just curious if some of the other big buckets you're looking to put more investment dollars into? Thank you.

Yes. Thanks, Alex.

So first off on Q3, I would say that the margin performance was really driven across the board and so we had upside on the revenue, both the subscription side and the services side. We did better on gross margins.

You saw the sequential improvement in gross margin in Q3. And then we did a little bit better than expected across the operating expense lines and so all of that rolled up into the strong EBITDA performance that we saw in Q3.

When I look at Q4, I think there're probably two factors that vary a little bit from where we landed in Q3. One is just on the professional services side; it's a seasonally slower quarter with the August summer month there.

And so it's a little bit tougher to get that same level of utilization in Q4. The other area where we're having a little bit of an uptick in investment is on the R&D side, and so we're seeing some product opportunities and taking advantage of those, and so those are probably the two call-outs that I would make between Q3 and Q4.

You did allude to the new logo team that is an investment that we have made and are looking at frankly capitalizing on at this point and we've given that team more to sell by integrating the Business Services solution offerings into that team also.

Okay, great color. Just one quick follow-up; this kind of goes back to Matt and Jackson's question earlier on the deal ramps and then the visibility.

I appreciate the color on the 2022 kind of consensus, I'm just curious on the decision to kind of give that color this quarter. Do you actually have more visibility into or out year growth than you, otherwise, would have just given the level of kind of deal ramps that happened over the last 12 to 18 months?

Yes. I would say that visibility in general is improving, and so as we transition more and more of the business to a subscription model and we have more recurring revenue, it does get a little bit easier and that's I would say supported as well by the RPO and some of the other metrics that we track.

It gives us better visibility than we had a year ago and probably even a couple of years ago, so that's one of the benefits of the model.

Okay, great. Thank you.

Hi, guys. Thank you so much for taking my question.

John, are you able to share what the organic SaaS portion of subscription revenue was with the growth rate there?

Yes. Joe, happy to talk about that.

In Q3, that number was 14%. So that was - that was up nicely on a sequential basis from the 8% that we talked about in Q2.

The one thing I would note as I noted last quarter that given the mix of our business, our subscription business now includes Business Services. We're going to reevaluate that metric going forward, and so I think there'll be some other things that we can point to that will be a little bit more relevant to the go-forward business and we'll talk about that one on the next call.

Understood, thank you for that. And then just another quick one.

On the Business Services revenue that had the sequential step down due to the transition with that customer, should we expect that to sequentially grow in 3Q or I guess how are you thinking about the contribution for this current quarter? Any color there [ph]?

Thank you.

I guess - sorry, Joe, were you referring to our fourth quarter?

Correct, yes, for Business Services.

Yes. So we don't provide guidance on that separately but the vast majority of that business is a subscription business and so we would expect it to behave as such.

Okay. Thank you.

Hi, this is Nick Mattiacci on for Chad Bennett. Thanks for taking our question.

Just again on the acquired Deloitte Business, you guys mentioned at the time of acquisition about how it expands your TAM to include pre-revenue life science companies. I'm just curious on if you can talk about new logo or pipeline generation and that segment since the acquisition.

Thank you.

Yes, thanks, Nick. I'll take that one.

So, I think the fact that Business Services helped to contribute to both large SaaS transition and new logos in the quarter, is certainly a marker for the health of that business and a strategic contribution to Model N in long-term. Pipeline is certainly growing in that area as we've allowed the rest of the sales organization to sell it.

It does continue to be primarily a new logo sales play in the enterprise segment, so both MorphoSys and Mayne Pharma are both roughly $500 million revenue companies, publicly traded, and growing and have a nice pipeline of therapies that they're bringing to market. And so the Business Services model really resonated with them and I think we'll continue to see that momentum as we get the go-to-market teams integrated and can get the value proposition in front of more and more customers.

Got it. Thank you.

Thank you, operator, and thank you for everyone attending the call. We really appreciate your time today and look forward to speaking with all of you throughout the quarter.

Thank you and have a great evening.