Agilysys Inc (AGYS) 2023 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Agilysys Fiscal 2023 Second Quarter Conference Call. As a reminder, today's conference call may be recorded. I would now like to turn the conference over to Jessica Hennessy, Senior Director of Corporate Strategy and Investor Relations at Agilysys. You may begin.

女士們先生們，美好的一天，歡迎參加 Agilysys 2023 財年第二季度電話會議。提醒一下，今天的電話會議可能會被錄音。我現在想將會議轉交給 Agilysys 公司戰略和投資者關係高級總監 Jessica Hennessy。你可以開始了。

Thank you, Justin, and good afternoon, everybody. Thank you for joining the Agilysys Fiscal 2023 Second Quarter Conference Call. We will get started in just a minute with management's comments, but before doing so, let me read the safe harbor language. Some statements made on today's call will be predictive and are intended to be made as forward-looking within the safe harbor protection of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial guidance.

謝謝賈斯汀，大家下午好。感謝您參加 Agilysys 2023 財年第二季度電話會議。我們將在一分鐘內開始管理層的評論，但在此之前，讓我閱讀安全港語言。在今天的電話會議上發表的一些聲明將是預測性的，旨在在 1995 年《私人證券訴訟改革法案》的安全港保護範圍內作為前瞻性聲明，包括有關我們財務指導的聲明。

Although the company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause results to differ materially. Important factors that could cause actual results to vary materially from these forward-looking statements include the continued effects of the COVID-19 pandemic and other global economic factors on our business, our ability to continue profitable growth and the risks set forth in the company's reports on Form 10-K and 10-Q and other reports filed within the Securities and Exchange Commission.

儘管公司認為其前瞻性陳述是基於合理的假設，但此類陳述存在可能導致結果出現重大差異的風險和不確定性。可能導致實際結果與這些前瞻性陳述產生重大差異的重要因素包括 COVID-19 大流行和其他全球經濟因素對我們業務的持續影響、我們持續盈利增長的能力以及公司報告中提出的風險在證券交易委員會提交的 10-K 和 10-Q 表格以及其他報告中。

As a reminder, any references to record financial and business levels during this call were for only to the time period after Agilysys made the transformation to an entirely hospitality focused software solutions company in fiscal year 2014.

提醒一下，在本次電話會議中提及創紀錄的財務和業務水平僅適用於 Agilysys 在 2014 財年轉型為一家完全以酒店為中心的軟件解決方案公司之後的時間段。

With that, I'd now like to turn the call over to Mr. Ramesh Srinivasan, President and CEO of Agilysys. Ramesh, please go ahead.

有了這個，我現在想把電話轉給 Agilysys 總裁兼首席執行官 Ramesh Srinivasan 先生。拉梅什，請繼續。

Thank you, Jess. Good evening. Welcome to the fiscal 2023 Second Quarter Earnings Call. Joining Jess and me on the call today at our Atlanta headquarters is Dave Wood, our CFO. Let me first cover sales and what we are seeing in the overall market before moving to revenue and other details. We measure sales or selling success based on annual contract value of sales agreements won and signed. After five consecutive quarters of solid good sales quarters as reported during the previous earnings call, this July to September Q2 of fiscal 2023 was a great sales quarter, possibly representing the first phase of growth breakthrough we have been building towards for a while now. Despite a slow start in July, Q2 was our highest sales quarter in more than six years. This good sales momentum has carried into October as well. While the gaming casinos and Europe, EMEA, sales verticals set new quarter sales records, we also saw good momentum in other verticals with the exception of Asia. Though fiscal Q2 was again slow with respect to Asia sales, the number of prospective customers, meetings and product demo requests have increased significantly in Asia as well during the month of October.

謝謝你，傑斯。晚上好。歡迎來到 2023 財年第二季度財報電話會議。今天在我們亞特蘭大總部與 Jess 和我一起參加電話會議的是我們的首席財務官 Dave Wood。在談到收入和其他細節之前，讓我先介紹一下銷售額和我們在整個市場上看到的情況。我們根據贏得和簽署的銷售協議的年度合同價值來衡量銷售或銷售成功。在上一次財報電話會議上報告的連續五個季度的良好銷售季度之後，2023 財年 7 月至 9 月的第二季度是一個偉大的銷售季度，可能代表我們一段時間以來一直在努力實現的增長突破的第一階段。儘管 7 月份開局緩慢，但第二季度是我們六年多來銷量最高的季度。這種良好的銷售勢頭也延續到了 10 月份。雖然博彩賭場和歐洲、EMEA、銷售垂直市場創造了新的季度銷售記錄，但我們也看到了除亞洲以外的其他垂直市場的良好勢頭。儘管第二財季亞洲銷售再次放緩，但亞洲的潛在客戶、會議和產品演示請求數量在 10 月份顯著增加。

Our general sales trends have picked up significantly since the beginning of August. We have not seen any noticeable effects of the negative macroeconomic headlines during the past few months. From our window, we are seeing ample evidence that the shifting demands and compelling hospitality industry needs for technology solutions will thrive and expand despite the macroeconomic challenges.

自 8 月初以來，我們的總體銷售趨勢顯著回升。在過去的幾個月裡，我們沒有看到宏觀經濟負面消息的任何明顯影響。從我們的窗口中，我們看到充分的證據表明，儘管面臨宏觀經濟挑戰，但不斷變化的需求和酒店業對技術解決方案的迫切需求將蓬勃發展。

We think this industry has been underserved for a long time from technology and functional innovation standpoints. It is seeing that opportunity that drove us to make the kind of research and develop investments that we did during the past five-plus years. Hospitality customers need now more than ever before, world-class, cloud-native, integrated, configurable, innovative software solutions to make operational management easier for their team members and create memorable experiences for their guests even when they are short of staff. Given the current and growing status of our state-of-the-art software solutions, which have been carefully crafted to fulfill the real and immediate needs of this industry, we are cautiously optimistic that our current sales momentum can be maintained and improved upon even if the economic headlines don't lend a helping hand during the short and medium term.

我們認為，從技術和功能創新的角度來看，這個行業長期以來一直服務不足。正是看到了這個機會，促使我們進行了過去五年多來所做的那種研究和開發投資。酒店客戶現在比以往任何時候都更需要世界一流的、雲原生的、集成的、可配置的、創新的軟件解決方案，以簡化團隊成員的運營管理，並為他們的客人創造難忘的體驗，即使他們缺少員工。鑑於我們最先進的軟件解決方案的當前和不斷發展的狀態，這些解決方案經過精心設計以滿足該行業的實際和即時需求，我們對我們目前的銷售勢頭能夠保持和改善持謹慎樂觀態度如果經濟頭條新聞在短期和中期沒有提供幫助。

Our total addressable market remains huge relative to our size, and that should also help serve as an adequate shock absorber to possible upcoming macroeconomic bumps in the road. We continue to increase sales and marketing investments, as you can see in the GAAP P&L statement, operating expenses stable in the earnings announcement. Q2 sales and marketing expenses increased 55% year-over-year compared to Q2 last fiscal year. We are in the process of opening a Middle East office and have hired a local sales leader in Dubai recently. We see good medium-term potential in the Middle East region, which is already a big hospitality market and is gearing up for another major expansion. We have had [precious] little presence there until now. Many big prospective customers in the Middle East region are eager for good world-class technology provider alternatives after relying on only a couple of vendors for several decades.

相對於我們的規模，我們的總目標市場仍然很大，這也應該有助於充分減震，以應對即將到來的宏觀經濟顛簸。我們繼續增加銷售和營銷投資，正如您在 GAAP 損益表中看到的那樣，收益公告中的運營費用穩定。與上一財年第二季度相比，第二季度銷售和營銷費用同比增長 55%。我們正在開設中東辦事處，最近在迪拜聘請了當地的銷售主管。我們在中東地區看到了良好的中期潛力，該地區已經是一個龐大的酒店市場，並正準備進行另一次重大擴張。直到現在，我們在那裡的[珍貴]很少。在幾十年僅依賴幾家供應商之後，中東地區的許多潛在大客戶都渴望獲得優秀的世界級技術供應商替代方案。

Our participation in the June HITEC show in Orlando, the recent G2E gaming show in Las Vegas, the No Vacancy show in Australia and Hospitality Stakeholder conference in Dubai. The last two involved our attendance for the first time ever. And the customer responses to our recent innovations at these shows has given us further confidence that our current sales momentum can be sustained and improved further. Modernized Visual One Hotel Property Management System, PMS, which we have rebranded as Versa is now live across seven customer sites. Visual One PMS has had a presence among hundreds of multi-[amenity] resorts for several decades. We took it up for a complete ground-up rewrite three to four years ago and completed this major task earlier this calendar year. The V in the new name Versa is a nod to the heritage of the old V1 or Visual One name. While the inspiration for the name Versa comes from this Cloud-native products current versatility to support both Cloud SaaS and on-premise implementations of a single code base.

我們參加了 6 月在奧蘭多舉行的 HITEC 展會、最近在拉斯維加斯舉行的 G2E 遊戲展、澳大利亞的 No Vacancy 展會和迪拜的酒店業利益相關者會議。最後兩個涉及我們有史以來第一次出席。客戶對我們最近在這些展會上的創新的反應讓我們更加相信，我們目前的銷售勢頭可以持續並進一步提高。現代化的 Visual One 酒店物業管理系統 (PMS)，我們已更名為 Versa，現已在七個客戶站點上運行。數十年來，Visual One PMS 已在數百家綜合[設施]度假村中佔有一席之地。三到四年前，我們著手徹底重寫它，並在今年早些時候完成了這項重大任務。新名稱 Versa 中的 V 是對舊 V1 或 Visual One 名稱的傳承。雖然 Versa 這個名字的靈感來自於這種雲原生產品當前的多功能性，以支持雲 SaaS 和單個代碼庫的本地實現。

After not being one of the leading players in the PMS space for a long time, it feels good to launch ourselves in the huge PMS global marketplace with not just one but two Cloud-native world-class solutions; Stay, which is a Cloud-only product and Versa, which can support both Cloud and on-premise installations of the same code base. This, of course, is in addition to LMS, which continues to stay strong in the domestic market, especially among bigger gaming casino hotels. All the 20-plus PMS add-on experience enhancer software modules are already or will be soon integrated with all these three core PMS products.

在很長一段時間內都不是 PMS 領域的領先者之一之後，能夠憑藉一個而不是兩個雲原生世界級解決方案進入龐大的 PMS 全球市場感覺很好； Stay 是純雲產品，而 Versa 可以支持相同代碼庫的雲和本地安裝。當然，這還不包括 LMS，後者在國內市場繼續保持強勁勢頭，尤其是在較大的博彩賭場酒店中。所有 20 多個 PMS 附加體驗增強軟件模塊已經或即將與所有這三個核心 PMS 產品集成。

During Q2 fiscal 2023, July to September, we added 13 new customers, of which 12 were fully subscription deals. The deal size per new customer during Q2 was almost twice as big as the previous quarter. We also added 70 new properties, which did not have any of our products before, but the parent company was already our customer. The total number of current parent customers, additional properties added during the past two quarters, has been at the fastest pace since the start of the pandemic about 2.5 years ago. Business levels and the pace of technology decisions among multi-property bigger customers are improving. Of the 83 new properties added during the quarter across new customers and new properties of current parent customers, more than 85% were either partially or fully subscription based. With respect to new product sales, there were 75 instances of selling at least one additional product to properties which already had at least one of our other products. These 75 instances actually involved a total of 186 new products sold to current customer properties, meaning some of these new product sales instances involve selling multiple products. So, an average of 186 divided by 75, about 2.5 new products sold per new product sales instance. The average deal size this quarter across these 75 instances of new product sales is among the highest we have seen. In annual contract value terms, this was our best quarter in three years for total value of new customers, new properties and new product sales combined. The number of new products installed per customer property site has grown from about 1.6 to about 2.1% during the past two years. With about 25 additional software modules available in our sales toolbox now, we obviously have a long runway of growth available to us just based on our current customer properties.

在 2023 財年第二季度，即 7 月至 9 月，我們增加了 13 個新客戶，其中 12 個是完全訂閱交易。第二季度每個新客戶的交易規模幾乎是上一季度的兩倍。我們還增加了70個新物業，這些物業以前沒有我們的產品，但母公司已經是我們的客戶。目前的母公司客戶總數，以及過去兩個季度新增的物業數量，一直處於自大約 2.5 年前大流行開始以來的最快速度。多資產大客戶的業務水平和技術決策步伐正在提高。在本季度新增的 83 個新客戶和現有母客戶的新物業中，超過 85% 是部分或完全基於訂閱的。在新產品銷售方面，有 75 次向已經擁有至少一種其他產品的物業出售至少一種額外產品。這 75 個實例實際上涉及向現有客戶財產銷售的總共 186 個新產品，這意味著其中一些新產品銷售實例涉及銷售多種產品。因此，平均 186 除以 75，每個新產品銷售實例約售出 2.5 個新產品。本季度這 75 個新產品銷售實例的平均交易規模是我們所見過的最高之一。就年度合同價值而言，這是我們三年來新客戶、新物業和新產品銷售總價值的最佳季度。在過去兩年中，每個客戶物業站點安裝的新產品數量從大約 1.6% 增長到大約 2.1%。現在我們的銷售工具箱中有大約 25 個額外的軟件模塊可用，顯然，僅根據我們當前的客戶屬性，我們就有很長的增長空間。

One other interesting detail for you. The number of properties currently using four or more of our software modules has more than doubled during the last 1.5 years. So, one slight negative about sales this quarter was the addition of only five core PMS customer properties. We are not losing sleep over that though. We are only beginning to scratch the surface of the PMS addressable market in front of us. This quarter, fiscal 2023 Q2 was our best quarter in more than six years in terms of sales measured annual contract value of PMS and related add-on attachment modules. The state-of-the-art PMS solutions are in the early stages of establishing themselves, and we are clearly moving in the right direction. We are now competing with our PMS products in more multi-property bigger opportunities than ever before. As the number of reference customers on the newer state-of-the-art core PMS products and additional software modules increases, our success rate with such opportunities will improve significantly. Increasing PMS sales will also help us sell more additional software modules because there are just more of them available for PMS than for POS. Across all products combined, Q2 fiscal 2023 was our highest quarter ever with respect to subscription sales bookings measured in annual contract value terms. And it was about 15% higher than the previous best quarter, which was Q2 last fiscal year.

另一個有趣的細節。在過去 1.5 年中，目前使用我們四個或更多軟件模塊的酒店數量增加了一倍以上。因此，本季度銷售額的一個輕微負面因素是僅增加了五個核心 PMS 客戶資產。不過，我們並沒有因此失眠。我們才剛剛開始觸及擺在我們面前的 PMS 可尋址市場的表面。本季度，即 2023 財年第二季度，就 PMS 和相關附加附件模塊的銷售衡量年度合同價值而言，是我們六年多來最好的一個季度。最先進的 PMS 解決方案正處於建立自己的早期階段，我們顯然正朝著正確的方向前進。我們現在正在與我們的 PMS 產品競爭更多的多屬性，比以往任何時候都有更大的機會。隨著使用更新的最先進核心 PMS 產品和附加軟件模塊的參考客戶數量的增加，我們利用此類機會的成功率將顯著提高。增加 PMS 銷量也將幫助我們銷售更多附加軟件模塊，因為 PMS 可用的軟件模塊多於 POS。在所有產品中，2023 財年第二季度是我們以年度合同價值衡量的訂閱銷售預訂量有史以來最高的一個季度。它比上一個最好的季度高出約 15%，即上一財年的第二季度。

Now on to revenue. Fiscal 2023 Q2 revenue was a record $47.7 million, the third consecutive record revenue quarter, close to 26% higher than the comparable prior year quarters, but sequentially only slightly higher than Q1. We remain well on track to achieve our full fiscal year revenue targets. Onetime product and services revenue combined at $18.7 million was 35% higher than the comparable prior year period, but down compared to the sequentially preceding Q1 fiscal 2023 quarter. We expect onetime revenue consisting of product and services revenue to remain in the $19 million to $20 million range each quarter for a few more quarters, in line with our expectations going into the fiscal year that the overall revenue guidance was based on.

現在談談收入。 2023 財年第二季度收入達到創紀錄的 4770 萬美元，這是連續第三個創紀錄的收入季度，比去年同期同期高出近 26%，但僅略高於第一季度。我們仍然有望實現我們整個財政年度的收入目標。一次性產品和服務收入合計為 1870 萬美元，比去年同期增長 35%，但與 2023 財年第一季度相比有所下降。我們預計，包括產品和服務收入在內的一次性收入將在每個季度保持在 1900 萬美元至 2000 萬美元的範圍內，並持續幾個季度，這與我們對整體收入指引所依據的財政年度的預期一致。

Having said that, services revenue and margin levels were disappointing this quarter. Services cost levels remained at the same level or slightly less than the sequentially preceding quarter, but services revenue was close to $600,000 less; disappointing, yes, but concerning no. We are currently working through a tough transformation period, transforming from an older technology on-premise-based software provider to one which is based on an innovation-driven subscription license model, which as all of us know, is among the toughest transitions for an enterprise software organization to go through.

話雖如此，本季度的服務收入和利潤率水平令人失望。服務成本水平與上一季度持平或略有下降，但服務收入減少近 600,000 美元；令人失望，是的，但關於否。我們目前正在經歷一個艱難的轉型期，從一家基於內部部署的舊技術軟件供應商轉變為一個基於創新驅動的訂閱許可模式的供應商，眾所周知，這是最艱難的轉型之一企業軟件組織要經過。

In addition, we are also transforming from a one or two product installed services project management unit to one that handles complex multiproduct integrated implementations routinely while also dealing with far higher customer expectations. We also experienced a slower start to the quarter for project implementations. All that added up to a lower-than-expected fiscal 2023 Q2 services revenue and services margin levels. We expect both those metrics to improve gradually during the medium to long term.

此外，我們還從一個或兩個產品安裝服務項目管理部門轉變為一個日常處理複雜多產品集成實施的部門，同時還要處理更高的客戶期望。我們在項目實施方面也經歷了本季度較慢的開局。所有這些加起來導致 2023 財年第二季度的服務收入和服務利潤率水平低於預期。我們預計這兩個指標在中長期內都會逐漸改善。

One other interesting services related detail for you. This fiscal 2023 second quarter was our highest quarter with respect to services sales bookings apart from one quarter in calendar 2019 before the pandemic. Fiscal 2023 Q2 recurring revenue grew to $29 million, driven by just under 29% year-over-year subscription revenue increase over the comparable prior year quarter. In percentage terms, the 21% year-over-year total recurring revenue growth from Q2 of fiscal 2022 to Q2 of fiscal 2023 is also the highest such percentage increase in more than six years.

另一個有趣的服務相關細節。 2023 財年第二季度是我們在服務銷售預訂方面的最高季度，與大流行之前的 2019 日曆年的一個季度不同。 2023 財年第二季度的經常性收入增長至 2900 萬美元，這得益於訂閱收入較上年同期增長略低於 29%。按百分比計算，從 2022 財年第二季度到 2023 財年第二季度，經常性總收入同比增長 21%，這也是六年來最高的此類百分比增幅。

Quarter subscription revenue has now grown to 49% of total recurring revenue. Subscription revenue generated from add-on software modules, most of which were developed ground up during the past few years, constituted 16% of total subscription revenue this quarter compared to 11% during the full previous year fiscal 2022 and 10% during the fiscal 2022 second quarter. Each of these innovative additional software modules, which are becoming increasingly better integrated with the core point of sales, property management and inventory procurement systems has now stabilized in at least a handful of customer sites and providing good value.

季度訂閱收入現已增長到經常性總收入的 49%。附加軟件模塊產生的訂閱收入佔本季度總訂閱收入的 16%，而 2022 財年全年為 11%，2022 財年為 10%第二季度。這些創新的附加軟件模塊中的每一個都越來越好地與核心銷售點、物業管理和庫存採購系統集成，現在至少已經在少數幾個客戶站點中穩定下來並提供了良好的價值。

Feedback on these additional attachment experience enhancement modules has been positive, particularly the reduced need for the customers to manage complex integrations across multiple software providers, increased operational efficiencies and incremental revenue generation opportunities enabled by these modules. Overall, recurring revenue was 5% sequentially higher than the previous quarter and about 20% higher than the comparable prior year quarter. We have added more than $1 million in recurring revenue sequentially quarter-over-quarter for the fourth consecutive quarter. There were only two such quarters in our software solutions for hospitality history before.

對這些附加附件體驗增強模塊的反饋是積極的，特別是減少了客戶管理跨多個軟件提供商的複雜集成的需求，提高了運營效率，並增加了這些模塊帶來的創收機會。總體而言，經常性收入比上一季度高出 5%，比去年同期高出約 20%。連續第四個季度，我們的經常性收入環比增加了超過 100 萬美元。以前我們的酒店軟件解決方案歷史上只有兩個這樣的季度。

Adjusted EBITDA for the quarter was $7.4 million and 15.5% of revenue, a slight improvement over the sequential Q1 quarter and in line with our expectations for the first half of fiscal 2023. Our overall profitability levels continue to be challenged by the current need to carry dual costs across R&D, services and support for supporting our previous generation older products and the newer state-of-the-art technology innovations, which we are currently implementing across the globe. We expect our profitability levels to improve in the medium to long term as we make progress with this difficult transition and the need to support older product versions diminishes.

本季度調整後的 EBITDA 為 740 萬美元，佔收入的 15.5%，比第一季度略有改善，符合我們對 2023 財年上半年的預期。我們的整體盈利水平繼續受到當前需要攜帶的挑戰研發、服務和支持的雙重成本，以支持我們目前在全球範圍內實施的上一代舊產品和更新的最先進技術創新。我們預計我們的盈利水平在中長期內會提高，因為我們在這一艱難的過渡中取得了進展，並且支持舊產品版本的需求減少了。

Free cash flow for the period was $2.3 million, slightly lower than the comparable prior year quarter of $3.2 million. Consistent with the normal pattern of our business, we expect free cash flow during the second half of each fiscal year to be better than the first half. Cash collections remain strong and at record levels. Capital expenditures will increase during the second half of the fiscal year, which is unusual for us. We planned before the pandemic to move to a world-class high-tech facility in Las Vegas, our largest single geographic market, and we expect to make that move sometime before mid-calendar 2023. We will be working through the [outset] process for this facility the rest of this fiscal year, costing onetime additional capital expenditures.

該期間的自由現金流為 230 萬美元，略低於去年同期的 320 萬美元。與我們業務的正常模式一致，我們預計每個財政年度下半年的自由現金流將好於上半年。現金收款保持強勁並處於創紀錄水平。資本支出將在本財年下半年增加，這對我們來說是不尋常的。我們計劃在大流行之前搬到拉斯維加斯的世界級高科技設施，這是我們最大的單一地理市場，我們預計將在 2023 年日曆中期之前的某個時間進行搬遷。我們將完成 [開始] 過程在本財政年度的剩餘時間裡，該設施將花費一次額外的資本支出。

With that, let me hand the call over to Dave. Dave?

有了這個，讓我把電話交給戴夫。戴夫？

Thank you, Ramesh. Taking a look at our financial results, beginning with the income statement. Second quarter fiscal 2023 revenue was a quarterly record of $47.7 million, a 26% increase from total net revenue of $37.9 million in the comparable prior year period. All three product lines increased compared to the prior year period, with product revenue up 44.5% and professional services revenue up 24.2% over the prior year. Recurring revenue was also up 20.8% with subscription up 28.6% over the prior year period.

謝謝你，拉梅什。看看我們的財務業績，從損益表開始。 2023 財年第二季度收入為 4770 萬美元，創下季度紀錄，比去年同期的淨收入總額 3790 萬美元增長 26%。三大產品線均同比增長，產品收入同比增長 44.5%，專業服務收入同比增長 24.2%。經常性收入也增長了 20.8%，訂閱量比上年同期增長了 28.6%。

Sales in fiscal 2023 Q2 are our highest for a single quarter in well over six years and included record subscription sales. Q2 FY 2023 sales were 13% over Q2 fiscal year 2022, which was our highest sales quarter in the previous fiscal year. While up significantly over the previous year, onetime revenue consisting of products and professional services declined sequentially. Product revenue declined slightly, mostly due to timing of delivery related to new sales.

2023 財年第二季度的銷售額是我們六年來最高的單季度銷售額，其中包括創紀錄的訂閱銷售額。 2023 財年第二季度銷售額比 2022 財年第二季度增長 13%，這是我們上一財年銷售額最高的季度。雖然與上一年相比有顯著增長，但由產品和專業服務組成的一次性收入環比下降。產品收入略有下降，主要是由於與新銷售相關的交貨時間。

The product backlog increased 17% compared to last quarter and is north of 80% of record levels. Professional services revenue declined sequentially due to remaining implementation challenges because of the breadth of our multiproduct installs as well as some delays in projects during July as a result of our extremely busy customer sites. August through October have resumed to a normal implementation schedule. We continue to staff the team in order to meet higher revenue levels and decreasing our backlog as customers go live with multiproduct installations. Professional services sales increased by more than 25% compared to last quarter. And this increase, along with the decline in services revenue drove services backlog back to new record levels.

與上一季度相比，產品積壓增加了 17%，高於創紀錄水平的 80%。專業服務收入環比下降，原因是由於我們的多產品安裝範圍廣以及 7 月份由於客戶站點極其繁忙導致項目出現一些延遲，因此仍然存在實施挑戰。 8 月至 10 月已恢復正常的實施計劃。我們繼續為團隊配備人員，以滿足更高的收入水平，並隨著客戶開始使用多產品安裝來減少我們的積壓。與上一季度相比，專業服務銷售額增長超過 25%。這種增長以及服務收入的下降推動服務積壓回到新的記錄水平。

Total recurring revenue represented 60.8% of total net revenue for the fiscal second quarter compared to 63.4% of total net revenue in the second quarter of fiscal 2022. Increased revenue from professional services implementations and product revenue coming back into the business drove the change in revenue mix compared to the prior fiscal year. We are also happy with our subscription revenue growth, which grew 28.6% during the second quarter of fiscal 2022. Subscription revenue comprised around 49% of total quarter recurring revenue compared to about 46% of total recurring revenue in the second quarter of fiscal 2022. Add-on software modules comprised 16% of subscription revenue in Q2 fiscal year 2023 compared to 10% in the comparable prior year quarter and continue to be a meaningful contributor to subscription revenue.

經常性總收入佔第二財季淨收入總額的 60.8%，而 2022 財年第二季度占淨收入總額的 63.4%。專業服務實施收入的增加和產品收入的增加推動了收入的變化與上一財年相比的組合。我們也對我們的訂閱收入增長感到滿意，該收入在 2022 財年第二季度增長了 28.6%。訂閱收入佔季度經常性收入總額的 49% 左右，而 2022 財年第二季度佔經常性收入總額的 46% 左右。附加軟件模塊佔 2023 財年第二季度訂閱收入的 16%，而去年同期為 10%，並且繼續對訂閱收入做出重要貢獻。

As Ramesh mentioned, the penetration level of our add-on software modules still has significant room for growth within our existing customer base. Moving down the income statement. Gross profit was $29.4 million compared to $24.3 million in the second quarter of fiscal 2022. Gross profit margin decreased to 61.5% compared to 64% in the second quarter of fiscal 2022. The gross profit margin decrease was primarily due to product and professional services revenue coming back into the business, causing a shift in revenue mix.

正如 Ramesh 所提到的，我們的附加軟件模塊的滲透水平在我們現有的客戶群中仍有很大的增長空間。向下移動損益表。毛利潤為 2940 萬美元，而 2022 財年第二季度為 2430 萬美元。毛利率下降至 61.5%，而 2022 財年第二季度為 64%。毛利率下降主要是由於產品和專業服務收入重新投入業務，導致收入結構發生變化。

Combined, the three main operating expense loans, product development, sales and marketing and general and administrative expenses, excluding stock-based compensation, were 46% of revenue, consistent with the prior quarter and in line with our FY 2023 plan. As a reminder, share-based compensation should remain in the 6% to 9% of total revenue for the entire fiscal year of 2023. Operating income for the second quarter of $2.9 million, net income of $3.6 million and gained per diluted share of $0.12, all compared favorably to the prior year's second quarter gain of $1.1 million, $1 million and $0.02 per diluted share, respectively. Adjusted net income, normalizing for certain noncash and nonrecurring charges of $6.3 million and adjusted diluted earnings per share of $0.24 compared favorably to adjusted net income of $4.6 million and diluted earnings per share of $0.18 in the prior year second quarter.

合併後，三項主要運營費用貸款、產品開發、銷售和營銷以及一般和行政費用（不包括基於股票的補償）佔收入的 46%，與上一季度一致，符合我們 2023 財年的計劃。提醒一下，2023 年整個財年，基於股份的薪酬應保持在總收入的 6% 至 9%。第二季度營業收入為 290 萬美元，淨收入為 360 萬美元，攤薄後每股收益為 0.12 美元，均優於去年第二季度每股攤薄收益 110 萬美元、100 萬美元和 0.02 美元。調整後的淨收入，將某些非現金和非經常性費用標準化為 630 萬美元，調整後的稀釋每股收益為 0.24 美元，而去年第二季度的調整後淨收入為 460 萬美元，稀釋後每股收益為 0.18 美元。

Fiscal 2023 second quarter adjusted EBITDA was $7.4 million compared to $6.3 million in the year ago quarter. As we discussed on the last call, we expect the adjusted EBITDA would be lower in the first half of the fiscal year. Adjusted EBITDA during the first half came in slightly ahead of plan at 14.8% of revenue. Adjusted EBITDA this quarter was 15.5% of revenue.

2023 財年第二季度調整後的 EBITDA 為 740 萬美元，而去年同期為 630 萬美元。正如我們在上次電話會議上討論的那樣，我們預計本財年上半年調整後的 EBITDA 會更低。上半年調整後的 EBITDA 略高於計劃，佔收入的 14.8%。本季度調整後的 EBITDA 佔收入的 15.5%。

Moving to the balance sheet and cash flow statements. Cash and marketable securities as of September 30, 2022, was $96.2 million compared to $97 million on March 31, 2022. The primary reason for the cash balance decrease compared to the beginning of this fiscal year despite our profitability levels were due to the timing of payments in Q1 related to bonus, dividend and inventory payments, which came due during the April to June time frame. However, we generated roughly $1.3 million in cash during the second fiscal quarter. Free cash flow in the quarter was $2.3 million compared to $3.2 million in the prior year quarter. As we stated in the past, free cash flow in the first half of the year is significantly impacted by working capital fluctuations, mainly due to amortization of our calendar year annual maintenance invoices, timing of bonus payment, along with paying down accounts payable as a result of higher inventory levels.

轉到資產負債表和現金流量表。截至 2022 年 9 月 30 日，現金和有價證券為 9620 萬美元，而 2022 年 3 月 31 日為 9700 萬美元。儘管我們的盈利水平很高，但與本財年年初相比，現金餘額減少的主要原因是由於第一季度的付款與獎金、股息和存貨付款有關，這些付款是在 4 月至 6 月的時間範圍內到期的。然而，我們在第二財季產生了大約 130 萬美元的現金。本季度的自由現金流為 230 萬美元，而去年同期為 320 萬美元。正如我們過去所說，上半年的自由現金流量受到營運資金波動的顯著影響，主要是由於我們日曆年年度維護髮票的攤銷、獎金支付的時間以及支付應付賬款作為較高庫存水平的結果。

In closing, we are pleased with our second quarter financial results and remain comfortably on track to meet our FY 2023 financial plan. With that, I will now turn the call back over to Ramesh.

最後，我們對第二季度的財務業績感到滿意，並繼續順利地實現我們的 2023 財年財務計劃。有了這個，我現在將把電話轉回 Ramesh。

Thank you, Dave. In summary, overall, we are pleased with our continued business progress. We think that there is a high probability that the significant increases in selling success we have enjoyed during the past close to three months, marks the first phase of the growth breakthrough we have been building towards. This sales surge also drove the combined product recurring revenue and services backlog to close to peak record levels, giving us increased confidence and comfort in the revenue guidance provided at the beginning of the fiscal year.

謝謝你，戴夫。總之，總的來說，我們對我們持續的業務進展感到滿意。我們認為，在過去近三個月中，我們所享有的銷售成功顯著增加的可能性很大，這標誌著我們一直在努力實現的增長突破的第一階段。這種銷售激增還推動合併的產品經常性收入和服務積壓接近歷史最高水平，使我們對本財年年初提供的收入指導更有信心和安慰。

We continue to expect fiscal 2023 annual revenue to be in the range of $190 million to $195 million, driven by year-over-year subscription revenue growth of approximately 30%. We also continue to expect EBITDA levels for the full year to be better than 15% of revenue despite the first half of fiscal 2023 being less than that level. We are continuing to invest in increasing our sales and marketing efforts to keep the current sales momentum going and to move it up to the next year. While our increased marketing efforts, both in terms of quality and quantity, will take a bit more time to show measurable increased sales results, we are already seeing positive responses to the improved messaging, more focused market development, higher quality public relations efforts and more frequent attendance in trade shows. Some of them are seeing us participate for the very first time.

在訂閱收入同比增長約 30% 的推動下，我們繼續預計 2023 財年的年收入將在 1.9 億美元至 1.95 億美元之間。我們還繼續預計全年的 EBITDA 水平將超過收入的 15%，儘管 2023 財年上半年低於該水平。我們將繼續投資以增加我們的銷售和營銷力度，以保持當前的銷售勢頭並將其推向明年。雖然我們在質量和數量方面加大營銷力度，需要更多時間才能顯示可衡量的銷售增長結果，但我們已經看到對改進的消息傳遞、更集中的市場開發、更高質量的公共關係工作等的積極響應經常參加貿易展覽。他們中的一些人是第一次看到我們參加。

Despite all the pressures, the current transformation causes and need to maintain increased cost levels to support the old and invest in and grow the new, we remain a disciplined growth business unit that will not get too far ahead of its key at any point in time. We will continue to remain proficient at walking and chewing gum at the same time. With that, let?s open up the call for questions. Justin?

儘管存在各種壓力，但當前的轉型導致並需要維持增加的成本水平以支持舊的並投資和發展新的，我們仍然是一個紀律嚴明的增長業務部門，在任何時候都不會超過其關鍵點.我們將繼續同時精通走路和嚼口香糖。有了這個，讓我們開始提問。賈斯汀？

Thank you. (Operator Instructions.] Please stand by while we compile the Q&A roster. And one moment for our first question. And our first question comes from Matthew VanVliet from BTIG.

謝謝你。 （操作員說明。] 在我們編制問答名單時請稍等。請稍等一下我們的第一個問題。我們的第一個問題來自 BTIG 的 Matthew VanVliet。

Nice job on the quarter. I guess, first off, I would be curious to hear how the launch of -- and sort of rebranding of the Versa PMS platform is progressing out there? Do you feel like you have some customers kind of waiting to see that fully deployed and get kind of proof of concept at other properties? Or is it just sort of the pent-up demand taking time to work its way through the sales cycle? And then any kind of next level or, I guess, layer deeper extra detail in terms of any geographic dispersion in terms of U.S. versus Europe versus APAC in terms of performance of that product?

本季度幹得好。我想，首先，我很想知道 Versa PMS 平台的發布和品牌重塑進展如何？您是否覺得您有一些客戶在等待看到完全部署並在其他屬性上獲得某種概念證明？或者它只是某種被壓抑的需求需要時間來完成銷售週期？然後是任何一種下一級，或者，我想，就該產品的性能而言，在美國、歐洲和亞太地區的任何地理分佈方面，分層更深入的額外細節？

Matthew, before I answer the question on Versa, one thing I want to confirm with you is the reception for stay, the demand for stay, our Cloud-PMS product also remains good. But let me focus, since your question was about Versa, let me answer that. So Versa, I would say, is ahead of schedule, Matthew. There are about seven customer resorts who have gone live and have all settled down quite well during the last six months or so. So, from the beginning of this calendar year, we have been installing that product. And it has settled down quite well.

Matthew，在我回答關於 Versa 的問題之前，我想和你確認的一件事是住宿的接待，住宿的需求，我們的 Cloud-PMS 產品也保持良好。但是讓我集中註意力，因為你的問題是關於 Versa 的，所以讓我來回答一下。所以 Versa，我想說，提前了，馬修。在過去六個月左右的時間裡，大約有七個客戶度假村已經上線並且都安定下來。因此，從本日曆年開始，我們就一直在安裝該產品。它已經安定下來了。

Just to give you a snippet of information for you, if you take our [V1]/Versa sales and we always measure sales in annual contract value, like you know, this is our best sales quarter for that in 3.5 years for just that product alone. So, the reception is good, and we are now getting some reference customers as well because seven of them have gone live and about half of them are now referenceable because they have settled down well. And there are a couple of pretty interesting global big PMS sales deals we are working on, where Versa is the product being looked at. That is across APAC and across U.S. as well.

只是給你一小段信息，如果你拿我們的 [V1]/Versa 銷售，我們總是用年度合同價值來衡量銷售額，就像你知道的那樣，這是我們 3.5 年來最好的銷售季度。獨自的。所以，反響很好，我們現在也有一些參考客戶，因為其中有七個已經上線了，其中大約一半現在可以參考，因為他們已經很好地落戶了。我們正在處理一些非常有趣的全球大型 PMS 銷售交易，其中 Versa 是正在研究的產品。這在整個亞太地區和美國也是如此。

So, I would say the short answer to your question, Versa is ahead of schedule. We are happy with the way it is progressed with the current installs. And for example, this sales quarter was our best V1 versa sales quarter in about 3.5 years. So, it continues to go well but it is still a young product. It is only less than a year old. So, we are focused on settling it down and improving it further.

所以，我想簡短回答你的問題，Versa 提前了。我們對當前安裝的進展方式感到滿意。例如，這個銷售季度是我們 3.5 年來最好的 V1 versa 銷售季度。因此，它繼續順利，但它仍然是一個年輕的產品。它只有不到一歲。因此，我們專注於解決它並進一步改進它。

Very helpful color. And then as you look at the, I guess, sort of like chain hotel or maybe urban hotel locations that were seemingly sort of most impacted by the pandemic. Curious how you're seeing progress there? Are they looking to make investments now that business travel has picked up quite a bit, by staring the macro headwinds potentially impacting their business and getting a little skittish on future investments. Just curious how that segment of the business has been performing over the last couple of months.

很有幫助的顏色。然後，當您查看似乎受大流行影響最大的連鎖酒店或城市酒店地點時，我猜。好奇你在那裡看到的進展如何？既然商務旅行已經有了很大的回升，他們是否希望通過盯著可能影響他們業務的宏觀逆風並對未來的投資有點不安來進行投資。只是好奇這部分業務在過去幾個月中的表現如何。

It's been performing well, Matthew. I wouldn't say it's back to pre-pandemic calendar 2019 levels, but it is definitely at the best level that we have seen it be since the start of the pandemic. So, the business from the hotel chains were already our customer, and a couple of similar customers has picked up and was one of the big contributors to us having our best sales quarters in six-plus years. So, the business from such change has improved now, not yet back to calendar 2019 levels.

它一直表現良好，馬修。我不會說它回到了 2019 年大流行前的日曆水平，但它絕對是自大流行開始以來我們所看到的最好水平。因此，來自連鎖酒店的業務已經是我們的客戶，一些類似的客戶已經接手，並且是我們在六年多的時間裡取得最佳銷售季度的主要貢獻者之一。因此，這種變化帶來的業務現在有所改善，尚未回到 2019 年的水平。

And then maybe one last one, if I could. Adding to the leadership team over the last year plus, I think a lot of effort and you highlighted the sales and marketing expenses going up, but curious how you feel like the additions to the marketing team and just sort of the overall branding and visibility of the company out there is going so far? How much more work do you have to do? Or is it now about execution on the sales front that you've gotten that better visibility in the market?

然後也許是最後一個，如果可以的話。在過去的一年裡增加了領導團隊，我認為付出了很多努力，你強調了銷售和營銷費用的上升，但很好奇你對營銷團隊的補充以及整體品牌和知名度的感覺如何那裡的公司能走這麼遠嗎？你還有多少工作要做？或者現在是關於銷售方面的執行，您已經在市場上獲得了更好的知名度？

Thank you, Matthew. It's going very well. I mean the addition of Terrie O'Hanlon and the team that she's brought in in marketing is doing terrific work, right? The kind of quality work that we have never had before, to be honest with you. As far as this company is concerned, we have focused so much on the product part of it. We have just not paid enough attention to marketing at all, and Terrie and the team have made a dramatic difference. And all the new sales staff and our new VP of HRC Sales, [Andrea Fitz], have made a big difference. And HRC also had that is hotel resorts, cruise ships, the vertical that we call HRC, also had a very good quarter in terms of sales this quarter.

謝謝你，馬修。進展順利。我的意思是 Terrie O'Hanlon 的加入和她在營銷方面帶來的團隊做得非常好，對吧？老實說，我們以前從未有過這種高質量的工作。就這家公司而言，我們非常關注它的產品部分。我們根本沒有對營銷給予足夠的重視，而特里和她的團隊做出了巨大的改變。所有新的銷售人員和我們新的 HRC 銷售副總裁 [Andrea Fitz] 都產生了很大的變化。 HRC 還有酒店度假村、遊輪，我們稱之為 HRC 的垂直領域，本季度的銷售額也非常好。

So, to address your question, the way growth always happens is you invest more, and we've made a big investment in sales and marketing when you compare Q2 to Q2, fiscal 2022 to fiscal 2023. Our sales and marketing costs have gone up by 55%. So, we have done the investment. Now it's a matter of executing for the level of investments we have done and that is going very well. Once we reach the next stage of growth, we obviously will invest more in sales and marketing as well. So, now it is a matter of executing on what we have invested, which is going well, and once we reach the next level of quantum growth, we will think about investing more in sales and marketing as well.

所以，為了解決你的問題，增長總是發生的方式是你投資更多，當你將第二季度與第二季度、2022 財年與 2023 財年進行比較時，我們在銷售和營銷方面進行了大量投資。我們的銷售和營銷成本上升了55%。所以，我們已經完成了投資。現在是執行我們已經完成的投資水平的問題，而且進展順利。一旦我們進入下一增長階段，我們顯然也會在銷售和營銷方面投入更多。因此，現在的問題是如何執行我們的投資，一切進展順利，一旦我們達到下一個量子增長水平，我們也會考慮在銷售和營銷方面進行更多投資。

Some of the things that we have done, the top of the funnel that you measure in marketing, the marketing qualified leads and what we call sales accepted opportunities, ASOs, the top of the funnel is really doing well. The top of the funnel now is bigger than it has been before. But ultimately, it's all about final sales results. This quarter, the sales that we saw, I would attribute it a bit more towards the product improvements that we have done, if I have to give credit. And also, to the increased sales presence, the increased number of sales personnel we have, our increased participation in trade shows, not just in the U.S., in APAC and EMEA as well, and market development outbound efforts, which have been more targeted; both marketing campaigns and market development efforts have been very targeted. So, we think it's a culmination of all that, that we have seen a real pickup since August.

我們所做的一些事情，您在營銷中衡量的漏斗頂部，營銷合格的潛在客戶以及我們稱之為銷售接受的機會，ASO，漏斗的頂部確實做得很好。現在漏斗的頂部比以前大了。但最終，一切都與最終銷售結果有關。本季度，我們看到的銷售額，如果我必須給予讚揚的話，我會將其更多地歸因於我們所做的產品改進。此外，由於銷售量增加，我們擁有的銷售人員數量增加，我們不僅在美國，而且在亞太地區和歐洲、中東和非洲的貿易展覽中的參與度增加，以及更有針對性的市場開發工作；營銷活動和市場開發工作都非常有針對性。所以，我們認為這是所有這些的高潮，我們看到自 8 月以來真正的回升。

The rest of the brand image changes us really presenting ourselves as a more modern company, which was long overdue. Those positive effects will take a bit more time to show up really in our results. So currently, our focus is -- our sales marketing efforts are going better than ever before. Our demos today are really -- I mean, orders of magnitude better than we have ever had before. Now it's a matter of also focusing on implementations, making sure those go better, having more reference customers for our newer products, and then the growth cycle will kick in. And then we will continue investing in sales and marketing more as well. That's a long-winded answer to you, Matthew.

品牌形象的其餘部分改變了我們，真正將自己展示為一家早就應該出現的更現代化的公司。這些積極影響需要更多時間才能真正體現在我們的結果中。所以目前，我們的重點是——我們的銷售營銷工作比以往任何時候都更好。我們今天的演示真的——我的意思是，比以往任何時候都好幾個數量級。現在的問題是還要關注實施，確保實施得更好，為我們的新產品擁有更多的參考客戶，然後增長周期就會開始。然後我們也會繼續加大對銷售和營銷的投資。馬修，這是對你的冗長回答。

And our next question comes from George Sutton from Craig-Hallum.

我們的下一個問題來自 Craig-Hallum 的 George Sutton。

Nice results. So, I wondered, Ramesh, if you could just give us some -- quantitative numbers relative to the quota-carrying reps that you have relative to where you were. Any sense on the number of (inaudible)? You mentioned a bigger funnel. Any update on your win rates? Are they consistent in that 70% ballpark? Just curious if you can give us some more numbers around the growth.

不錯的結果。所以，我想知道，Ramesh，你是否可以給我們一些 - 相對於你所處位置的配額攜帶代表的定量數字。對（聽不清）的數量有任何意義嗎？你提到了一個更大的漏斗。你的勝率有更新嗎？他們在 70% 的範圍內是否一致？只是好奇您是否可以為我們提供更多有關增長的數字。

I don't know if we have exact numbers on that, George. I can only give you a qualitative answer about the number of sales accepted opportunities and marketing qualified leads increasing. We have not yet evolved to a stage where we can share those exact numbers with you outside. But to answer the second part of your question, our win-loss ratios continue to be good. So, when you look at all our competitive wins, that is new customers, new products and new properties, it still remains at -- we win the majority of those deals. And if you just take new customers alone, we win a very good portion of those deals also as long as we can get them to the demo stage, right? Once they reach the demo stage and they take a look at the products, the end-to-end functionality that we offer that is tough to compete against us now, once we get them to that stage, our win loss ratio continues to be very good.

我不知道我們是否有確切的數字，喬治。我只能給你一個定性的答案，關於銷售接受機會的數量和營銷合格線索的增加。我們還沒有發展到可以與外界分享這些確切數字的階段。但要回答你問題的第二部分，我們的盈虧率仍然很好。因此，當您查看我們所有的競爭優勢時，即新客戶、新產品和新資產，它仍然存在——我們贏得了大部分交易。如果你只接受新客戶，只要我們能讓他們進入演示階段，我們也會贏得這些交易的很大一部分，對吧？一旦他們到達演示階段並查看產品，我們提供的端到端功能現在很難與我們競爭，一旦我們讓他們進入那個階段，我們的輸贏率仍然非常高好的。

I was particularly interested in what you said about Asia, given how challenging Asia has been for you. You mentioned that's picked up in October. Can you just give us a more specific sense of what you meant by that pickup?

考慮到亞洲對你來說充滿挑戰，我對你所說的關於亞洲的內容特別感興趣。你提到這是在 10 月份開始的。你能更具體地告訴我們你所說的皮卡是什麼意思嗎？

Yes. There are two things that I was trying to convey that I did not say explicitly. Number one, George, is the quality of the Asia sales team has improved dramatically. Some of -- several of the recent sales leadership additions we have made, we may not have announced it publicly, a sales leader in Singapore, a sales leader in Australia and then sales engineering strengths that we have added to Asia, they've all been excellent recruitment pickups for us. So, number one, is a very strong sales team there. And I would say the first time since I've been here that the Asia sales team is really full of high quality. That's number one.

是的。我想表達的有兩件事我沒有明確說明。第一，喬治，亞洲銷售團隊的素質有了顯著提高。我們最近增加了一些銷售領導，我們可能沒有公開宣布，新加坡的銷售領導，澳大利亞的銷售領導，然後是我們在亞洲增加的銷售工程力量，他們都對我們來說是優秀的招聘人員。所以，第一，那裡有一支非常強大的銷售團隊。自從我來這里以來，我第一次說亞洲銷售團隊真的是高素質。這是第一。

Number two, what we have noticed in October and probably including September as well is the activity in Asia has really picked up. And there are at least a couple of reasonably big interesting opportunities that we are working on now that we feel we have a reasonable chance of winning are in Asia. And the number of opportunities, the demos, the conversations we have with new customers, prospective customers has increased significantly in the last couple of months compared to the previous months since the start of the pandemic. So that activity level has increased, and we are hoping very soon you will -- we will see it in the sales numbers as well.

第二，我們在 10 月份（可能也包括 9 月份）注意到的是亞洲的活動確實有所回升。我們現在至少有幾個相當大的有趣機會，我們認為我們有合理的獲勝機會在亞洲。與大流行開始以來的前幾個月相比，過去幾個月我們與新客戶、潛在客戶的機會、演示、對話數量顯著增加。因此，活動水平有所提高，我們希望您很快就會 - 我們也會在銷售數字中看到它。

Okay. Just one other question, and this would be for Dave, who's been too quiet on the Q&A. And I wonder when we talk about the need to support older versions of the product, can you just talk about what that means? Are you going to see step function reductions in costs over time as those fall off? Or is it going to be a more gradually lower expense base over time?

好的。還有一個問題，這是給 Dave 的，他在問答環節太安靜了。我想知道當我們談論支持舊版本產品的必要性時，您能談談這意味著什麼嗎？隨著時間的推移，您是否會看到成本隨著時間的推移而降低？或者隨著時間的推移，費用基數會逐漸降低嗎？

Yes. I think it's -- I mean, it's consistent to what we've said in the past. I mean, R&D as a percentage of revenue will stay in the 26% to 28%. And starting next year, you'll see a real gradual decline. So, we kind of topped out around the 30% of revenue for R&D expense coming down into the 26%, 28%. I don't think you'll see any kind of big step or clip. It will just incrementally get better as revenue grows. And keep in mind, we've also said we can handle another $50 million to $100 million of revenue on this team. So, it will be a real, real gradual step down.

是的。我認為它 - 我的意思是，它與我們過去所說的一致。我的意思是，研發佔收入的百分比將保持在 26% 到 28% 之間。從明年開始，你會看到真正的逐漸下降。因此，我們的研發費用佔收入的 30% 左右下降到了 26%、28%。我不認為你會看到任何大的步驟或剪輯。隨著收入的增長，它只會逐漸變得更好。請記住，我們還說過我們可以在這個團隊中再處理 5000 萬到 1 億美元的收入。所以，這將是一個真正的、真正的逐步下台。

And our next question comes from Nehal Chokshi from Northland Capital Markets.

我們的下一個問題來自 Northland Capital Markets 的 Nehal Chokshi。

Congratulations on moving from good to great sales quarters. I know you addressed this in the investment scop, think I just missed it, so apologies. Could you just walk through again why the service business has not performed the way you had expected to in terms of the delivery of the mutations?

祝賀您從良好的銷售部門轉變為出色的銷售部門。我知道你在投資範圍內提到了這個，我想我只是錯過了，所以很抱歉。您能否再次說明為什麼服務業務在交付突變方面沒有按照您預期的方式執行？

Yes. So, I mean it's just -- a lot of it is just taking longer for these multiproduct implementations and -- and kind of a secondary factor was July was just generally a little bit slower of a month. I mean we said on the call that August through October have kind of returned back to normal. But the multiproduct implementations are more challenging, and we remain staffed to do a lot more billable work than we do today. But we pretty much just got a slow start to the quarter and July revenue was a little bit lower than expected.

是的。所以，我的意思是，對於這些多產品實施來說，其中很多只是花費了更長的時間，而且 - 一個次要因素是 7 月通常比一個月慢一點。我的意思是我們在電話中說 8 月到 10 月已經恢復正常。但是多產品實施更具挑戰性，而且我們仍然配備人員來完成比今天更多的計費工作。但我們本季度的開局幾乎很緩慢，7 月份的收入略低於預期。

I see. Okay. And is this effectively the reason why you're only reiterating guidance as opposed to raising guidance given that you have gone from good to great in terms of sales/booking quarters?

我懂了。好的。考慮到您在銷售/預訂季度方面從好到好，這是否是您只重申指導而不是提高指導的有效原因？

Yes. So, Nehal, as far as the guidance is concerned, the fiscal year is going exactly as we planned, as we thought it would, and it is proceeding towards whatever assumptions we made when we initially provided the guidance, those assumptions are working out. And it is gradually improving, and we are beginning to do well. And we are confident now. We've just had two, three good sales months, and we are hoping that trend continues and that this is a start of a new trend for us. And we are comfortable. We are confident about the guidance provided and we are always realistic with whatever guidance we provide. This fiscal year is going along exactly the way we thought it would. It is building up nicely for us.

是的。因此，Nehal，就指導而言，本財政年度完全按照我們的計劃進行，正如我們所想的那樣，並且它正在朝著我們最初提供指導時所做的任何假設進行，這些假設正在發揮作用。而且它正在逐漸改善，我們開始做得很好。我們現在有信心。我們剛剛度過了兩個、三個良好的銷售月，我們希望這種趨勢繼續下去，這對我們來說是一個新趨勢的開始。我們很舒服。我們對所提供的指導充滿信心，並且無論我們提供什麼指導，我們始終是現實的。本財政年度的進展完全符合我們的預期。它正在為我們建立良好的基礎。

Okay. So presumably, in order to make this guidance, you don't need to build additional backlog here, you'd like to see it get drained as you go through the fiscal year, correct?

好的。所以大概，為了做出這個指導，你不需要在這裡建立額外的積壓，你希望看到它在你經歷財政年度時被耗盡，對嗎？

Yes. I mean we feel really comfortable with where our backlog sits today and the visibility it gives us into the second half of the year. And the way to look at the second half is products and professional services kind of goes up and down amongst the quarter, but it will remain, in the second half, about $38 million, and then subscription will keep incrementally going up quarter-to-quarter. So, the simple way to look at the second half is onetime revenue being product and professional services will remain in that $37 million to $38 million range and recurring revenue will go up by about $4 million.

是的。我的意思是，我們對今天的積壓情況以及它給我們下半年的可見性感到非常滿意。看待下半年的方式是產品和專業服務在本季度有所起伏，但在下半年仍將保持在 3800 萬美元左右，然後訂閱將繼續逐季上升 -四分之一。因此，看待下半年的簡單方法是，產品和專業服務的一次性收入將保持在 3700 萬至 3800 萬美元的範圍內，經常性收入將增加約 400 萬美元。

And we have to continue to add to the backlog, Nehal. It's a continuing story. Both increased consumption of the backlog and adding to the backlog are both important functions. So, we have to keep our focus and just continuing doing more of what we are doing well.

我們必須繼續增加積壓工作，Nehal。這是一個持續的故事。增加積壓的消耗和增加積壓都是重要的功能。因此，我們必須保持專注，繼續做更多我們做得好的事情。

Okay. Understood. And I think you already sort of spoke to this a little bit, but you've added a lot of capacity and you talked about going from good to great sales quarters. Does this mean though that the productivity of the new sales reps is now at mature levels already? Or is there still a lot more ramping up to go here?

好的。明白了。而且我認為您已經對此進行了一些討論，但是您已經增加了很多容量，並且談到了從良好的銷售季度到良好的銷售季度。這是否意味著新銷售代表的生產力現在已經達到成熟水平？或者還有更多的地方可以去這裡嗎？

I think if you measure it in terms of sales success, right, not just in terms of sales activities, yes, the productivity levels are mature and they're all contributing. But in terms of sales success, right, how much each of them actually closes, depends not only on the sales team, but on the rest of us as well. And that, we are focused on improving the number of reference customers we have on the new state-of-the-art products. All of them have been implemented, but we have to build a number of properties that use those products. And then you have to increase customers being delighted with them and willing to talk about that. So that part has to increase as well. That, in turn, will increase sales productivity in terms of how much sales is closed. So, I wouldn't call that close to the peak. But the activity level is very good, and we are very happy with how the sales team is progressing now.

我認為，如果您根據銷售成功來衡量它，對，而不僅僅是根據銷售活動，是的，生產力水平已經成熟並且他們都在做出貢獻。但就銷售成功而言，正確的是，他們每個人實際關閉了多少，不僅取決於銷售團隊，還取決於我們其他人。而且，我們專注於提高我們在新的最先進產品上的參考客戶數量。所有這些都已實施，但我們必須構建許多使用這些產品的屬性。然後你必須增加客戶對他們的滿意度並願意談論這一點。所以這部分也必須增加。反過來，這將提高銷售量方面的銷售效率。所以，我不會稱之為接近頂峰。但是活動水平非常好，我們對銷售團隊現在的進展感到非常滿意。

But to be clear, when you say the closing of the sales rate -- Sorry, yes. No, I cut out for a second. The question was ?

但需要明確的是，當你說銷售率結束時——抱歉，是的。不，我停了一下。問題是？

So, let me pick it up from there, Nehal, and help you out. We can sell more with the current level of sales staff we have and the current level of sales and marketing spend. I think that's where you?re going towards. That is a matter of us implementing better, increasing the number of reference customers and just making the current state-of-the-art modern technology solutions we have, more spread out in the space so that more people come to know about it. So, with the current sales staff, if that is your question, yes, we can sell, close, more deals. And once that reaches the peak, we will add more to our sales teams as well.

所以，讓我從那裡接起它，Nehal，並幫助你。以我們現有的銷售人員水平以及當前的銷售和營銷支出水平，我們可以銷售更多產品。我想這就是你要去的地方。這是我們更好地實施、增加參考客戶數量以及使我們擁有的當前最先進的現代技術解決方案在該領域更廣泛傳播的問題，以便更多的人了解它。所以，對於目前的銷售人員，如果這是你的問題，是的，我們可以出售、完成更多交易。一旦達到頂峰，我們也會增加更多的銷售團隊。

Got it. And I now remember exactly where I was trying to go. The close rates remain good. It's just that the increased number of assets that you have generated hasn't gone through the full life cycle of the pipeline yet, and that's more or less what you're waiting to see if that close rate that your mature sales teams have had translates with the new sales team. Is that correct?

知道了。我現在清楚地記得我想去的地方。收盤價保持良好。只是您生成的資產數量增加還沒有經歷管道的整個生命週期，這或多或少就是您在等著看您成熟的銷售團隊所擁有的關閉率是否轉化為與新的銷售團隊。那是對的嗎？

That is correct. The additional sales members are also beginning to contribute well. And we need to increase ad backs and the more successful implementations we have with the new products, the more [advance] will come.

那是對的。額外的銷售成員也開始有所貢獻。我們需要增加廣告支持，我們對新產品的實施越成功，就會有更多 [advance] 出現。

And I'm showing no further questions. I would now like to turn the call back over to Ramesh for closing remarks.

我沒有再提出任何問題。我現在想將電話轉回 Ramesh 以作結束語。

Thank you, Justin. Thank you all for your interest and attention. Please enjoy the holiday season and have wonderful travels. We look forward to talking to you again in about three months from now when we will report on fiscal 2023 third quarter results towards the end of January. Thank you.

謝謝你，賈斯汀。感謝大家的關注和關注。請享受假期，享受美好的旅行。我們期待在大約三個月後再次與您交談，屆時我們將在 1 月底報告 2023 財年第三季度的業績。謝謝你。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。