eGain Corp (EGAN) 2023 Q4 法說會逐字稿

Good day, and welcome to the eGain Fiscal 2023 Fourth Quarter and Full Year Financial Results Conference Call. (Operator Instructions) Please note this event is being recorded.

美好的一天，歡迎參加 eGain 2023 財年第四季和全年財務業績電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to Jim Byers with MKR Investor Relations. Please go ahead.

我現在想將會議轉交給 MKR 投資者關係部的吉姆·拜爾斯 (Jim Byers)。請繼續。

Thank you, operator, and good afternoon, everyone. Welcome to eGain's Fiscal 2023 Fourth Quarter and Full Year Financial Results Conference Call. On the call today are eGain's Chief Executive Officer, Ashu Roy; and Chief Financial Officer, Eric Smit.

謝謝接線員，大家下午好。歡迎參加 eGain 2023 財年第四季和全年財務業績電話會議。今天參加電話會議的是 eGain 執行長 Ashu Roy；和首席財務官埃里克·斯密特。

Before we begin, I would like to remind everyone that during this conference call, management will make certain forward-looking statements, which convey management's expectations, beliefs, plans and objectives regarding future financial and operational performance. Forward-looking statements are generally preceded by words such as believe, plan, intend, expect, anticipate or similar expressions and forward-looking statements are protected by safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a wide range of risks and uncertainties that could cause actual results to differ in material respects. Information on various factors that could affect eGain's results are detailed in the company's reports filed with the Securities and Exchange Commission.

在開始之前，我想提醒大家，在本次電話會議中，管理層將做出某些前瞻性聲明，這些聲明傳達了管理層對未來財務和營運績效的期望、信念、計劃和目標。前瞻性陳述之前通常帶有“相信”、“計劃”、“打算”、“期望”、“預期”或類似表達等詞語，並且前瞻性陳述受到1995 年《私人證券訴訟改革法案》中包含的安全港條款的保護。這些前瞻性陳述面臨廣泛的風險和不確定性，可能導致實際結果在重大方面有所不同。有關可能影響 eGain 業績的各種因素的信息，請參閱該公司向美國證券交易委員會提交的報告。

eGain, is making these statements as of today, September 14, 2023, and assumes no obligation to publicly update or revise any of the forward-looking information in this conference call. In addition to GAAP results, we will also discuss certain non-GAAP financial measures such as non-GAAP operating income. The tables included with the earnings press release include reconciliation of the historical non-GAAP financial measures to the most directly comparable GAAP financial measures.

eGain 自今天（2023 年 9 月 14 日）起發表這些聲明，並沒有義務公開更新或修改本次電話會議中的任何前瞻性資訊。除了 GAAP 業績外，我們還將討論某些非 GAAP 財務指標，例如非 GAAP 營業收入。收益新聞稿中包含的表格包括歷史非 GAAP 財務指標與最直接可比較的 GAAP 財務指標的調整表。

In addition, eGain's earnings press release can be found by clicking the press release link on the Investor Relations page of eGain's website at egain.com. And along with the earnings release, we will post an updated investor presentation to the Investor Relations page of eGain's website. And lastly, a phone replay of this conference call will be available for 1 week.

此外，可以透過點擊 eGain 網站 egain.com 投資者關係頁面上的新聞稿連結找到 eGain 的收益新聞稿。隨著收益發布，我們將在 eGain 網站的投資者關係頁面上發布更新的投資者簡報。最後，本次電話會議的電話重播將持續 1 週。

And now with that said, I'd like to turn the call over to eGain's CEO, Ashu Roy.

話雖如此，我想將電話轉給 eGain 的執行長 Ashu Roy。

Thank you, Jim, and hello, everyone. We've had a solid year despite a difficult economic environment through the fiscal year. Our total revenue for fiscal 2023 grew 7% year-over-year to $98 million. Our non-GAAP net income was $8.4 million or $0.25 per diluted share. And we bought back $5.8 million of our own stock, while we're still generating good cash flow from operations for the year of $4.6 million, growing our cash balance to just above $73 million at the end of the fiscal year.

謝謝吉姆，大家好。儘管整個財政年度經濟環境困難，但我們還是度過了堅實的一年。我們 2023 財年的總營收年增 7%，達到 9,800 萬美元。我們的非 GAAP 淨利潤為 840 萬美元，即稀釋後每股收益 0.25 美元。我們回購了 580 萬美元的自有股票，同時我們仍然從本年度的營運中產生了 460 萬美元的良好現金流，使我們的現金餘額在本財年結束時增加到略高於 7,300 萬美元。

Looking at the fourth quarter, both our top and bottom line results were ahead of our guidance and [street] consensus. We saw good renewals from our existing customers during the quarter, including several big ones, multimillion dollar [real] clients. At the same time, new logo acquisition continued to be challenging in the quarter, as decisions continue to get pushed out.

看看第四季度，我們的頂線和底線結果都領先於我們的指導和[街頭]共識。本季我們看到現有客戶的續約情況良好，其中包括幾家價值數百萬美元的大客戶。同時，由於決策不斷被推遲，本季新商標的取得仍然面臨挑戰。

Stepping back, as I look at the year, I want to share what I see as market trends and that impact how we are planning to operate in fiscal 2024. As you all know, in late 2022 calendar, the ChatGPT announcement, definitely ended up impacting our new logo acquisition plans in an already challenging macroeconomic environment when businesses were retrenching and they were scrutinizing their technology investments. Many of our active enterprise opportunities paused to assess how ChatGPT and more broadly, generative AI would impact their customer engagement investments going forward.

回顧這一年，我想分享我所看到的市場趨勢，以及這些趨勢對我們計劃在 2024 財年的運作方式的影響。眾所周知，在 2022 年末，ChatGPT 的公告肯定以在本已充滿挑戰的在宏觀經濟環境中，當企業緊縮開支並審查其技術投資時，這對我們的新商標收購計劃產生了影響。我們許多活躍的企業機會都停下來評估 ChatGPT 以及更廣泛的生成式人工智慧將如何影響他們未來的客戶參與投資。

Now interestingly, over the last couple of months, we are seeing that businesses seem to have mostly run through their initial assessment exercise. And several of them we see are again prioritizing a Knowledge Hub, which would serve as a reliable and compliance ready source of content for generative AI tools to learn from and contribute to. Specifically, we are now seeing enterprises looking for these modern knowledge of platforms where they can plug and play their generative AI IP that they seem to be working on internally. At the same time, we are seeing some businesses with legacy knowledge systems, which cannot take advantage of these generative AI capabilities as well, those businesses seem to be looking to re-platform.

有趣的是，在過去的幾個月裡，我們看到企業似乎完成了初步的評估工作。我們看到其中一些公司再次優先考慮知識中心，該中心將作為生成人工智慧工具學習和貢獻的可靠且合規的內容來源。具體來說，我們現在看到企業正在尋找這些現代知識的平台，在這些平台上他們可以即插即用他們似乎正在內部開發的生成式人工智慧IP。同時，我們看到一些擁有遺留知識系統的企業也無法利用這些生成式人工智慧功能，這些企業似乎正在尋求重新建構平台。

And so these 2 trends, they're resulting in the volume of increased RFP and pilot activity for us, which has ramped up nicely in the last 2, 2.5 months, essentially this current quarter. What seems to us is that generative AI is elevating the importance of and rejuvenating the demand for Knowledge Hubs. Businesses are looking to optimize their business experience and drive productivity with AI-powered automation, and customer engagement seems to be a [popular each head] to start that.

因此，這兩種趨勢導致我們的 RFP 和試點活動數量增加，在過去 2、2.5 個月（尤其是本季）中，數量大幅增加。在我們看來，生成式人工智慧正在提升知識中心的重要性並重振對知識中心的需求。企業希望透過人工智慧驅動的自動化來優化其業務體驗並提高生產力，而客戶參與似乎是一個[受歡迎的每個人]的開始。

Looking at our clients, we continue to do very well with us. Our client satisfaction levels are at an all-time high, inching up to about 4.8 on a scale of 5 on the Gartner Peer reviews website. Our clients are looking to invest more in implementing their knowledge strategies to drive more automation across all customer touch points, both agent-assisted as well as self-service.

看看我們的客戶，我們繼續做得很好。我們的客戶滿意度處於歷史最高水平，在 Gartner 同行評審網站上，我們的客戶滿意度逐漸升至 4.8 分（滿分 5 分）。我們的客戶希望在實施知識策略方面進行更多投資，以推動所有客戶接觸點（包括座席協助服務和自助服務）的自動化程度更高。

Turning to business outlook for fiscal 2024. We are optimistic about the demand trend, as I mentioned, it's jumped up in the last 2.5 months compared to the first half of calendar 2023. We see reengagement from several opportunities that have stored in our pipeline. And we see new ones coming in, and I'm talking about Fortune 500 companies here. So we do believe that we will see new logo momentum improving in fiscal 2024. However, we believe it's prudent to remain cautious from a planning and forecasting perspective because the macroeconomic environment continues to be somewhat uncertain.

談到2024 財年的業務前景。正如我所提到的，我們對需求趨勢感到樂觀，與2023 年上半年相比，過去2.5 個月的需求趨勢有所上升。我們看到我們儲備中的幾個機會重新出現。我們看到新的公司進來，我在這裡談論的是財富 500 強公司。因此，我們確實相信，我們將在2024 財年看到新標誌的勢頭有所改善。不過，我們認為，從規劃和預測的角度來看，保持謹慎是明智的做法，因為宏觀經濟環境仍然存在一定的不確定性。

Over the past couple of quarters, we have made the necessary adjustments to reflect our caution and align our business operation to an environment where we can still continue to invest in product innovation and customer success as well as prosecute these sales opportunities effectively, but do it with a view that we are still navigating through what seems like the back half of the market slowdown.

在過去的幾個季度中，我們進行了必要的調整，以反映我們的謹慎態度，並使我們的業務運營適應這樣一個環境：我們仍然可以繼續投資於產品創新和客戶成功，並有效地抓住這些銷售機會，但要做到這一點我們認為，我們仍在經歷市場放緩的後半段。

On the sales and marketing front, we are very excited about our upcoming annual customer conference. eGain Solve '23, which we are holding in London, this is -- on September 25. Conference registrations are at an all-time high for us for this event, which includes clients, prospects, partners. We'll have clients, many, actually 6 of them, sharing customer stories and successes and journeys with eGain the innovation. And we, eGain, will be announcing and demonstrating some new exciting capabilities at the conference as well.

在銷售和行銷方面，我們對即將舉行的年度客戶會議感到非常興奮。 eGain Solve '23 將於 9 月 25 日在倫敦舉行。本次活動的會議註冊量達到歷史最高水平，其中包括客戶、潛在客戶和合作夥伴。我們將有很多客戶，實際上是 6 個客戶，分享客戶故事、成功經驗以及 eGain 創新之旅。我們 eGain 也將在會議上宣布並展示一些令人興奮的新功能。

To conclude, based on our recent improved pipeline activity, we believe that the market for Knowledge Hubs is perking back up. As I mentioned, we are now engaged in more RFPs and pilots. In fact, more than we have ever been in the last 12 months. However, we continue to be cautious and mindful of the broader economic uncertainty. And so with the operational adjustments in place that we have made, we feel that we can continue to invest in product innovation and customer success while pursuing these enterprise opportunities that have reengaged with us and the new ones that are coming in.

總而言之，根據我們最近改進的管道活動，我們相信知識中心的市場正在復甦。正如我所提到的，我們現在正在進行更多的 RFP 和試點。事實上，這比過去 12 個月的任何時候都要多。然而，我們仍然對更廣泛的經濟不確定性保持謹慎和關注。因此，透過我們所做的營運調整，我們認為我們可以繼續投資於產品創新和客戶成功，同時抓住這些重新吸引我們的企業機會以及即將到來的新機會。

Finally, we are super excited about Solve '23, and we invite you to join us at this event in London, if you can, on September 25.

最後，我們對 Solve '23 感到非常興奮，如果可以的話，我們邀請您參加 9 月 25 日在倫敦舉行的這次活動。

With that, I'll ask Eric Smit, our Chief Financial Officer, will add more color around our financial operations. Eric?

接下來，我將要求我們的財務長 Eric Smit為我們的財務營運增添更多色彩。艾瑞克？

Thanks, Ashu, and thanks, everyone, for joining us today. Let me share some financial highlights for the quarter and full year before getting into our outlook and guidance for fiscal 2024. Total revenue for the fourth quarter was $24.6 million, up 5% year-over-year and up 7% sequentially. Contribution from Cisco OEM was positive this quarter and helped drive revenue above our guidance. Tax revenue for Q4 was $22.7 million, up 10% year-over-year. And for the full year, total revenue was $98 million, up 7% year-over-year or up 9% in constant currency. SaaS revenue for the full year was $89.6 million or up 11% year-over-year or up 13% in constant currency and legacy revenue in Q4 was down to just $99,000.

謝謝阿舒，謝謝大家今天加入我們。在介紹我們對 2024 財年的展望和指導之前，讓我先分享本季和全年的一些財務亮點。第四季的總收入為 2,460 萬美元，同比增長 5%，環比增長 7%。思科 OEM 本季的貢獻是正面的，有助於推動收入高於我們的指導。第四季稅收為 2,270 萬美元，年增 10%。全年總收入為 9,800 萬美元，年增 7%，以固定匯率計算成長 9%。全年 SaaS 營收為 8,960 萬美元，年增 11%，以固定匯率計算成長 13%，而第四季的傳統營收降至 99,000 美元。

When looking at revenue by region in Q4, North America accounted for 80% of total revenue this quarter, up from 74% in the year ago quarter. For the full year, North America accounted for 78% of total revenue, up from 73% in the prior year. In Q4, total revenue from North America was $19.6 million up 13% year-over-year, where in contrast, total revenue from Europe was $5 million, a decrease of 19% year-over-year.

從第四季按地區劃分的收入來看，北美地區佔本季總收入的 80%，高於去年同期的 74%。全年來看，北美地區佔總營收的 78%，高於前一年的 73%。第四季度，北美地區總營收為 1,960 萬美元，較去年同期成長 13%，而歐洲總營收為 500 萬美元，較去年同期下降 19%。

Looking at non-GAAP gross profits and gross margins. Gross profit for the fourth quarter was $18.2 million, up 3% year-over-year for a gross margin of 74% compared to 75% for the prior year quarter but up from 69% last quarter. For fiscal 2023, gross profit was $72.2 million or a gross margin of 74% compared to a gross margin of 77% and for the prior year.

看看非公認會計準則毛利和毛利率。第四季毛利為 1,820 萬美元，年增 3%，毛利率為 74%，去年同期為 75%，但高於上一季的 69%。 2023 財年，毛利為 7,220 萬美元，毛利率為 74%，而前一年的毛利率為 77%。

Now turning to operations. Non-GAAP operating costs for the fourth quarter came in at $14.9 million, down 12% from $16.9 million in the year ago quarter, reflecting the expense controls we have implemented. Looking at our bottom line for Q4. Non-GAAP operating income for the fourth quarter was $3.3 million or an operating margin of 13% and up significantly from 3% in the year ago quarter and 4% last quarter. Non-GAAP net income for Q4 was $3.6 million or $0.11 per share. This compares to non-GAAP net income of $893,000 or $0.03 per diluted share in the year ago quarter.

現在轉向營運。第四季非 GAAP 營運成本為 1,490 萬美元，比去年同期的 1,690 萬美元下降 12%，反映了我們實施的費用控制。看看我們第四季的底線。第四季非 GAAP 營業收入為 330 萬美元，營業利潤率為 13%，顯著高於去年同期的 3% 和上季的 4%。第四季非 GAAP 淨利為 360 萬美元，即每股 0.11 美元。相比之下，去年同期的非 GAAP 淨利潤為 893,000 美元，即稀釋後每股收益 0.03 美元。

Adjusted EBITDA margin for the quarter was 16% compared to 4% in the year ago quarter. For the full fiscal year, non-GAAP operating income for the fiscal year was $7.6 million or an operating margin of 8% compared to an operating margin of 10% for the prior year. Non-GAAP net income was $8.4 million or $0.26 per share on a basic basis and $0.25 per share on a diluted basis. This compares to non-GAAP net income of $8.9 million or $0.28 per share on a basic and $0.27 per share on a diluted basis in the prior fiscal year. Adjusted EBITDA margin for the fiscal year was 9% compared to 11% in the prior fiscal year.

本季調整後 EBITDA 利潤率為 16%，而去年同期為 4%。整個財年，本財年的非 GAAP 營業收入為 760 萬美元，營業利益率為 8%，而前一年的營業利潤率為 10%。非 GAAP 淨利潤為 840 萬美元，即基本每股收益 0.26 美元，稀釋每股收益 0.25 美元。相比之下，上一財年的非 GAAP 淨利潤為 890 萬美元，即基本每股收益 0.28 美元，稀釋每股收益 0.27 美元。本財年調整後 EBITDA 利潤率為 9%，上一財年為 11%。

Turning to our balance sheet and cash flows. We continue to generate good cash flows from operations while buying back shares of our stock. For the full fiscal year, cash flow from operations was $4.6 million or a 5% operating cash flow margin. During FY '23, under our share repurchase program, we purchased approximately 786,000 shares totaling $5.8 million. Of the $20 million authorized, $14.2 million remain available under the program at the end of the fiscal year. Our balance sheet remains strong. Total cash and cash equivalents at the end of the fiscal year was $73.2 million, up from $72.2 million a year ago.

轉向我們的資產負債表和現金流。我們在回購股票的同時，繼續從營運中產生良好的現金流。整個財年，營運現金流為 460 萬美元，營運現金流利潤率為 5%。 23 財年期間，根據我們的股票回購計劃，我們購買了約 786,000 股股票，總計 580 萬美元。在授權的 2000 萬美元中，到本財年結束時該計劃仍有 1420 萬美元可供使用。我們的資產負債表仍然強勁。本財年末現金和現金等價物總額為 7,320 萬美元，高於一年前的 7,220 萬美元。

Now turning to our customer metrics. We saw strong renewals from our existing customer base with over $20 million in ARR renewing during the quarter. And as I've mentioned on previous calls, given our increased focus on North American market, I will share some additional customer metrics on a regional basis. LTM dollar-based SaaS net retention for North America customers was 106%, while EMEA customers retention continued below 100% due to the churn we have discussed on previous calls, resulting in our total net retention rates dropping to 100% compared to 105% a year ago. That ARR for North America customers increased 8% year-over-year, while total SaaS ARR increased 3%.

現在轉向我們的客戶指標。我們看到現有客戶群的強勁續訂，本季 ARR 續訂超過 2,000 萬美元。正如我在之前的電話會議中提到的，鑑於我們越來越關注北美市場，我將在區域基礎上分享一些額外的客戶指標。北美客戶以LTM 美元計算的SaaS 淨保留率為106%，而EMEA 客戶保留率繼續低於100%，原因是我們在之前的電話會議中討論過的客戶流失情況，導致我們的總淨保留率從105% 下降至100%。一年前。北美客戶的 ARR 年成長 8%，而 SaaS 總 ARR 成長 3%。

And looking at ARR by product hub, Knowledge now makes up 47% of total SaaS ARR as Knowledge deals have accounted for 2/3 of new bookings in the last 12 months. Number of million-dollar ARR customers remained relatively constant year-over-year. Looking at our RPO. Total RPO decreased 3% year-over-year to $97.3 million increased 11% sequentially with the strong renewals closed in the quarter. And our short-term RPO was $66.7 million, up 6% year-over-year, but up 28% sequentially and again due to the strong renewals in the quarter.

按產品中心查看 ARR，Knowledge 目前佔 SaaS ARR 總額的 47%，因為 Knowledge 交易占過去 12 個月新預訂的 2/3。百萬美元 ARR 客戶數量比去年同期保持相對穩定。看看我們的 RPO。 RPO 總額年減 3%，至 9,730 萬美元，隨著本季強勁續訂的結束，季增 11%。我們的短期 RPO 為 6,670 萬美元，年成長 6%，但由於本季的強勁續訂，季增 28%。

Now turning to our guidance. For the first quarter of fiscal 2024, we expect total revenue of between $23.5 million to $24 million. Turning to the bottom line. For Q1, we expect GAAP net income of $500,000 to $1 million or $0.02 to $0.03 per share, which includes stock-based compensation expense of approximately $1.2 million and depreciation and amortization of approximately $120,000. We expect non-GAAP net income of $1.7 million to $2.2 million or $0.05 to $0.07 per share.

現在轉向我們的指導。 2024 財年第一季，我們預計總營收在 2,350 萬美元至 2,400 萬美元之間。轉向底線。對於第一季度，我們預計 GAAP 淨利潤為 50 萬至 100 萬美元，即每股 0.02 至 0.03 美元，其中包括約 120 萬美元的股票補償費用以及約 12 萬美元的折舊和攤提。我們預計非 GAAP 淨利潤為 170 萬美元至 220 萬美元，即每股 0.05 美元至 0.07 美元。

Looking at the fiscal 2024 full year ending June 30, 2024, we expect total revenue of between $96 million to $98 million; non-GAAP net income of [$11.8 million to $12.3 million or $0.37 to $0.38 per share] (sic, see press release, "$10.8 million to $11.3 million, or $0.33 to $0.35 per share) and GAAP net income of [$7.6 million to $8.1 million or $0.24 to $0.25 per share] (sic, see press release, "$6.6 million to $7.1 million, $0.20 to $0.22 per share), where we estimate share-based compensation expense of approximately $4.2 million and depreciation and amortization of approximately $500,000.

縱觀截至 2024 年 6 月 30 日的 2024 財年全年，我們預計總收入在 9,600 萬美元至 9,800 萬美元之間；非GAAP 淨利潤為[1,180 萬美元至1,230 萬美元，或每股0.37 至0.38 美元]（原文如此，請參閱新聞稿，「1,080 萬美元至1,130 萬美元，或每股0.33 美元至0.35 美元）， GAAP 淨利潤為[760 萬美元至8.1 美元”百萬美元或每股0.24 至0.25 美元]（原文如此，請參閱新聞稿，“660 萬美元至710 萬美元，每股0.20 美元至0.22 美元），我們估計基於股份的補償費用約為420 萬美元，折舊和攤提約為50 萬美元。

Looking at weighted average shares outstanding, we expect approximately 32.2 million for the first quarter [and for the full fiscal year, of '24] (sic, see press release, "and 32.3 million for the full fiscal year of '24). So in summary, we have adjusted our business operations to a level where we can operate profitably in the current environment, our sales and marketing investments are at the right level, and we are seeing more opportunities develop in the pipeline. Overall, our existing business is doing well, as evidenced by the healthy renewals we booked in the quarter. Innovation is on track with some exciting announcements to come at our Solve '23 customer events in London later this month.

從加權平均流通股來看，我們預計第一季 [以及 24 年整個財年] 約為 3,220 萬股（原文如此，請參閱新聞稿，「24 年整個財年為 3,230 萬股）。因此總而言之，我們已經將業務運營調整到了在當前環境下可以盈利的水平，我們的銷售和營銷投資處於正確的水平，並且我們看到更多的機會正在醞釀之中。總體而言，我們現有的業務是表現良好，正如我們在本季度預訂的健康續訂所證明的那樣。創新正在步入正軌，本月晚些時候我們在倫敦舉行的Solve '23 客戶活動上將發布一些令人興奮的公告。

We implemented a share repurchase program that we plan to continue in fiscal '24. And the opportunity for eGain is significant. We remain well positioned to capitalize on our expanding market opportunity and with our strong balance sheet and cash flow generation.

我們實施了一項股票回購計劃，計劃在 2024 財政年度繼續實施。 eGain 的機會是巨大的。我們仍然處於有利地位，可以充分利用不斷擴大的市場機會以及強勁的資產負債表和現金流。

Lastly, on the Investor Relations calendar, eGain will be meeting with investors at the 12th Annual ROTH New York Conference on November 15 and the Annual Craig-Hallum Alpha Select Conference also in New York on November 16. We hope to see some of you there in person. This concludes our prepared remarks.

最後，在投資者關係日曆上，eGain 將於11 月15 日在紐約舉行的第12 屆年度ROTH 年度會議以及11 月16 日在紐約舉行的年度Craig-Hallum Alpha Select 會議上與投資者會面。我們希望在那裡見到你們中的一些人親自。我們準備好的演講到此結束。

Operator, we will now open the call for questions.

接線員，我們現在開始提問。

(Operator Instructions) Our first question comes from Richard Baldry with ROTH MKM.

（操作員說明）我們的第一個問題來自 ROTH MKM 的 Richard Baldry。

When you talk about the RFP pipeline starting to accelerate, stop pausing whenever I think about it. Are the RFPs that are coming back explicitly talking about AI functionality, either included or capable via APIs, sort of some demonstration of the ability to interact with the new Regenerative AI engines. Is that sort of one of the signals that's telling you that, that people are sort of getting through there analysis process?

當你談到 RFP 管道開始加速時，每當我想到它時就停止暫停。傳回的 RFP 是否明確討論了人工智慧功能（包括或透過 API 實現），這在某種程度上證明了與新的再生人工智慧引擎互動的能力。這是告訴你人們正在經歷分析過程的訊號之一嗎？

That's exactly right, Richard. So what we are seeing is those RFPs, in some cases, have been reissued, in other cases, they have not issued any RFP because people were still kind of deciding whether they're going to invest or not, right? There were lots of conversations, but no structure in RFP yet. But I would say pretty much every single RFP now in the last 2 months that we have been working with have generative AI in one of those 3 integrations or asking what all can you do, right? Do you have inbuilt generative in your Knowledge platform? Do you have it as an option that I can plug in? Or is there something else that you do that is different? So those sort of 3 questions come up.

完全正確，理查德。所以我們看到的是，這些 RFP 在某些情況下已經重新發布，在其他情況下，他們沒有發布任何 RFP，因為人們仍在決定是否要投資，對吧？有很多對話，但 RFP 中還沒有結構。但我想說，在過去 2 個月裡，我們一直在處理的幾乎每一個 RFP 都在這 3 個整合之一中包含了生成式 AI，或者問你能做什麼，對嗎？您的知識平台內建生成功能嗎？你們有我可以插入的選項嗎？或者您還做了其他不同的事情嗎？所以就出現了這 3 個問題。

And with the pace of RFPs coming back and you recently streamlined some of your costs in the sales and marketing side, do you feel like you're appropriately staffed to handle it for now? What kind of signals or growth in the RFP volume would you need to see to say maybe we should go back and start adding headcounts given it takes some time to get them up and running?

隨著 RFP 的節奏恢復，並且您最近在銷售和行銷方面精簡了一些成本，您覺得目前是否有適當的人員來處理它？您需要看到什麼樣的訊號或 RFP 數量的成長，才能說也許我們應該回去並開始增加人員數量，因為需要一些時間來啟動和運行它們？

Yes. Yes. So this time around, we are sort of staying close to our knitting, which is the large opportunities. And so that gives us good headroom at this time, I would say, for the next couple of quarters, I don't think that we'll need to add more headcount. So maybe in the fiscal fourth quarter, assuming things continue to ramp that would be the time to look at additional headcount.

是的。是的。所以這次，我們會繼續關注我們的針織業務，這是一個巨大的機會。因此，這給了我們很大的空間，我想說，在接下來的幾個季度裡，我認為我們不需要增加更多的員工人數。因此，也許在第四財季，假設情況繼續好轉，那將是考慮增加員工人數的時候了。

And you've been active in the buyback. Can you maybe talk about -- do you have a theory since your profitability stepped up how much of cash flow should be allocated to that return of capital? Is it dependent on M&A opportunities you might see? How do we think about how to expect that buyback to deploy?

而且你一直在積極參與回購。您能否談談—自從您的獲利能力提高以來，您是否有一個理論，應該將多少現金流分配給資本回報？這是否取決於您可能看到的併購機會？我們如何看待如何部署回購？

Good question. I mean I think that's exactly the way we're evaluating it. I think, certainly, in this environment, exploring inorganic opportunities is an area that we will likely pay closer attention to. I think given our strong balance sheet and the challenges that others are having in the marketplace, we certainly want to have funds available, and we'll look to more carefully at this than we've done in the past. But with that said, given our current sort of, I would say, sort of optimized cost structure given the current run rate, we certainly feel comfortable about continuing to execute to the plan at the rate we've done and hopefully accelerate it if possible, given sort of where the current stock price is.

好問題。我的意思是，我認為這正是我們評估它的方式。我認為，當然，在這種環境下，探索無機機會是我們可能會更加關注的領域。我認為，鑑於我們強大的資產負債表以及其他公司在市場上面臨的挑戰，我們當然希望擁有可用資金，並且我們將比過去更仔細地考慮這一點。但話雖這麼說，考慮到我們目前的某種優化成本結構，考慮到當前的運行速度，我們當然對繼續以我們已經完成的速度執行計劃感到放心，並希望在可能的情況下加速它，給定目前股價的位置。

And last for me would be, when you think about the AI functionality that customers are looking for -- how much of that do you think is important to be able to do or provide in-house sort of bespoke versus being able to use APIs, whatever, to plug into sort of best-of-breed whichever the customer wants to work with externally? And if you were to look at the M&A side of the table, would it be something in around the AI world you'd be looking at? Or are there other things that be interesting?

最後對我來說，當你考慮客戶正在尋找的人工智慧功能時，你認為能夠做或提供內部客製化的功能與能夠使用 API 相比有多少重要，無論如何，插入客戶想要與外部合作的最佳品種？如果你要看看表格中的併購方面，你會關注人工智慧世界中的一些東西嗎？或是有其他有趣的事情嗎？

Right. So I would say, Rich, except for the very, very high end of the market, there are -- most companies, I believe, will look for all-in-one solutions around generative capability, but not necessarily the core technology of generative being different, but the way it is applied and the way you fine tune it, those things we intend to do ourselves, but not the core technology, which clearly is not our [very weak,] and we don't think that's our place to invest in innovation. But how we connect the dots and compose the solutions, absolutely, how we take advantage of all the loops of improvement and optimization, absolutely. Those are going to be the place we invest in.

正確的。所以我想說，Rich，除了非常非常高端的市場之外，我相信大多數公司都會尋找圍繞生成能力的一體化解決方案，但不一定是生成的核心技術是不同的，但是它的應用方式和微調方式，我們打算自己做的那些事情，但不是核心技術，這顯然不是我們的[非常弱，]而且我們不認為那是我們的位置投資於創新。但是我們如何將各個點連結起來並組成解決方案，絕對是，我們如何充分利用所有改進和最佳化的循環。這些將是我們投資的地方。

And then the -- we have several of these larger prospects who clearly want to have their own generative capability, but they want to plug it into our Knowledge platform very tightly so that they can get the best of both worlds. So that's the level we are playing at. So I think we'll have our own with fine-tuning and contextual optimization as the way to differentiate. And then have the ability to compose and connect into someone who may have their own generative capability.

然後，我們有幾個更大的潛在客戶，他們顯然希望擁有自己的生成能力，但他們希望將其緊密地插入我們的知識平台，以便他們可以兩全其美。這就是我們現在的水平。所以我認為我們將擁有自己的微調和上下文優化作為差異化的方式。然後有能力創造並與可能有自己的生成能力的人建立聯繫。

Maybe one last one, if I could. The recurring revenue line sequentially was up quite strongly. Was there any onetime oriented sort of impacts inside of that, that we need to be careful about when we're modeling looking forward?

如果可以的話，也許最後一件事。經常性收入連續成長相當強勁。其中是否有任何一次性的影響，我們在建模時需要小心？

I think sort of as I pointed out. And if you recall on the previous call, we do see some variability from quarter-to-quarter on the Cisco OEM. So last quarter, it came in below the number and resulted in the decline. Where on the flip side and as we sort of had expected to some extent sort of given the commentary we've heard, that business generally has been positive that's what we saw this quarter was a healthy uptick in that. So there's definitely that fluctuation that comes from that Cisco OEM business that we would be mindful of not necessarily repeating again in the coming quarter. So that's the one callout I would make.

我認為有點像我指出的那樣。如果您還記得之前的電話會議，我們確實看到思科 OEM 的季度與季度之間存在一些變化。所以上個季度，它低於這個數字並導致下降。另一方面，正如我們在某種程度上預期的那樣，考慮到我們聽到的評論，業務總體上是積極的，這就是我們本季看到的健康成長。因此，思科 OEM 業務肯定會出現波動，我們會注意，在下個季度不一定會再次出現這種波動。這就是我要提出的一個標註。

Our next question comes from Jeff Van Rhee with Craig Hallum.

我們的下一個問題來自 Jeff Van Rhee 和 Craig Hallum。

So on the annual guide, talk to me about what else you might be seeing that's giving you the caution. I mean you commented that the pipeline in many respects, pilots, et cetera, are really breaking out to the positive, yet the forward guide, essentially guides for flat sequentials for a while. Talk beyond what you can see in your pipeline that's causing you not to put any of it really through into the guide because it's obviously well below the street.

因此，在年度指南中，請與我談談您可能會看到的其他內容會給您帶來警告。我的意思是，您評論說，管道在許多方面、試點等方面確實都在積極突破，但前向指南基本上在一段時間內為扁平序列提供了指南。談論超出您在管道中可以看到的內容，這導致您無法將任何內容真正放入指南中，因為它顯然遠低於街道。

Yes. This is -- so Jeff to bring as timing of closing those deals is where we need more evidence to have closed some big deals in the -- this quarter and next to say, okay, the cadence is starting to be more predictable on the close, right? So we have several opportunities where we deepen the discussion and agreement and everything is fine, but the question is when are they going to sign and that process is still seems a little bit macroeconomic influence, right? So that's the -- that's the challenge we are trying to navigate with this question.

是的。這是 - 所以傑夫提出，作為完成這些交易的時間，我們需要更多的證據來完成本季度和下一個季度的一些大型交易，好吧，結束時的節奏開始變得更加可預測， 正確的？因此，我們有幾次機會加深討論和達成協議，一切都很好，但問題是他們什麼時候簽署，這個過程似乎仍然有點宏觀經濟影響，對嗎？這就是我們試圖解決這個問題的挑戰。

Okay. That's helpful. And then -- the AI deals, you mentioned kind of GPT came out for those things. A lot of people took a look at it, went away, some came back. Of the ones that didn't come back, what did you learn? I mean, what do they choose to do? And how do you react to that to potentially make yourself more attractive to those customers as well?

好的。這很有幫助。然後，人工智慧交易，你提到了 GPT 的出現。很多人看了一眼，就走了，也有一些人回來了。在那些沒有回來的人當中，你學到了什麼？我的意思是，他們選擇做什麼？您對此有何反應，以使自己對這些客戶更具吸引力？

It's a good question. My sense is that -- to be honest, I don't know the exact answer. But what we are seeing is that some companies have decided that they could apply GPT or broadly generative capability on existing content stores that they have. right? And so that -- there is a school of thought there. We don't believe that works with quality and compliance and cost effectiveness. But that's always been one of the things that is the substitute is that you have SharePoint. And if I just put GPT on it, will it solve the problem? So that's kind of the -- I think there's going to be crossovers on that line, both ways over time.

這是一個好問題。我的感覺是——說實話，我不知道確切的答案。但我們看到的是，一些公司已經決定他們可以在他們現有的內容商店上應用 GPT 或廣泛的生成能力。正確的？所以——那裡有一個思想流派。我們認為這與品質、合規性和成本效益無關。但這一直是替代品之一，那就是擁有 SharePoint。如果我直接把GPT放在上面，能解決問題嗎？所以這就是——我認為隨著時間的推移，這條線上將會出現交叉。

Yes. Helpful. And then last just for me, the partners. I think you touched on Cisco kind of ebbing and flowing, you've got a lot of key relationships, maybe spend a second just talking about both your outlook on Cisco for the year, how you feel about that and why? And then the other key 2 or 3 that either are showing traction or are they calling out?

是的。有幫助。最後只為我，即合作夥伴。我想你談到了思科的興衰，你有很多重要的關係，也許花一點時間談談你對思科今年的展望，你對此有何看法以及為什麼？然後另一個關鍵 2 或 3 要么表現出牽引力，要么正在呼喚？

Yes. So on Cisco, I think it's kind of flat to modest upside, I would say. I wouldn't say anything more than that, probably flat. But Eric, what you say?

是的。因此，我認為思科的上漲空間是持平或適度的。除此之外我不會再說什麼，可能很平淡。但是埃里克，你說什麼？

Yes. I think that is consistent.

是的。我認為這是一致的。

Yes. because we've seen that year-over-year. So that would probably be the outlook there. But with other partners, which is -- yes, you're right, we have invested in some of the larger SIs, they are equally challenged at this time. Many of the large projects are kind of not getting the big engagements and investments that clients had stalled on over the last few quarters. So in fact, I think that we are starting to see more engagement. Maybe we are not deep into that. We don't have visibility into their pipeline as much. So I couldn't really comment on that.

是的。因為我們年復一年地看到了這一點。這可能就是那裡的前景。但對於其他合作夥伴來說，是的，你是對的，我們投資了一些較大的系統整合商，他們此時同樣面臨挑戰。許多大型專案都沒有獲得客戶在過去幾季停滯不前的大量參與和投資。事實上，我認為我們開始看到更多的參與。也許我們對此還沒有深入了解。我們對他們的管道沒有太多了解。所以我無法對此發表評論。

But I do think that the system integration partners seem quite interesting to us, especially in financial services. Some of the partnerships we were talking to prospects who are banks and insurance companies who have been working with these partners. And those seem to be working back up as well.

但我確實認為系統整合合作夥伴對我們來說似乎很有趣，尤其是在金融服務領域。我們正在與潛在客戶交談的一些合作夥伴是一直與這些合作夥伴合作的銀行和保險公司。這些似乎也開始發揮作用。

As I show no further questions at this time. I would like to turn the call back over to the management for any closing remarks.

因為我現在沒有進一步的問題。我想將電話轉回給管理階層，讓他們發表結束語。

Thanks, operator, and thanks, everyone, for joining the call today. We look forward to hopefully seeing some of you at the customer event in London and in the upcoming investor conferences, and we'll be providing an update once we close out our Q1. Thanks very much.

謝謝接線員，也謝謝大家今天加入通話。我們期待在倫敦的客戶活動和即將舉行的投資者會議上見到你們中的一些人，我們將在第一季結束後提供最新情況。非常感謝。

Thank you.

謝謝。

This concludes the conference today. Thank you for attending today's presentation. You may all now disconnect.

今天的會議到此結束。感謝您參加今天的演講。你們現在可以斷開連結了。