Manhattan Associates Inc (MANH) 2024 Q2 法說會逐字稿

Good afternoon. My name is Alicia, and I'll be your conference facilitator today. This time, I would like to welcome everyone to the Manhattan Associates Q2 2024 conference call. (Operator Instructions)

As a reminder, ladies and gentlemen, this call is being recorded today, July 23, 2024. I would now like to introduce you to your host, Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, you may begin your conference.

Great. Thanks, Alicia, and good afternoon, everyone. Welcome to Manhattan Associates' 2024 second-quarter earnings call. I will review our cautionary language and then turn the call Eddie Capel, our CEO. During this call, including the question-and-answer session, we may make forward-looking statements regarding future events or the future financial performance of Manhattan Associates.

Your caution that these forward-looking statements involve risks and uncertainties are not guarantees of future performance and that actual results may differ materially from those projections we could contain our forward-looking statements.

I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly our annual report on Form 10-K for fiscal year 2023, and the risk factors discussion in that report, as well as any risk factor updates to provide our subsequent Form 10-Q's.

We note the turbulent global macro environment could impact our performance and cause actual results to differ materially from our projections. We're under no obligation to update these statements. In addition, our comments include certain non-GAAP financial measures to provide additional information to investors.

We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules. You'll find reconciliation schedules in the Form 8-K we submitted to the SEC earlier today and on our website at manh.com. Now I'll turn the call over to Eddie.

Al right. Thanks, Mike. Good afternoon, everyone, and thanks for joining us as we review our second quarter results and discuss our increased full year financial 2024 outlook. Manhattan delivered record Q2 and first half results. For the quarter, total revenue increased 15% to $265 million, adjusted earnings per share increased 34% to $1.18, both exceeding our expectations.

Driving the top line performance and earnings leverage was 35% growth in cloud revenue and 10% growth in services revenue.

This encompasses double digit top-line growth across all of our geographies as our global teams continue to execute very well for our customers. While the global macro environment certainly remains volatile, Manhattan's business was solid and we're very optimistic about our business opportunity. Demand for our solutions are robust, customer satisfaction is high and investment in R&D and our associates continue to widen that segment of technological leadership across our supply chain planning, execution and omnichannel retail offerings.

The audio, the leading indicator of our growth increased 29% to just over $1.6 billion demand for our mission critical client solutions remains strong and resilient across all of our product portfolio.

From a vertical perspective, retail, manufacturing, and wholesale continued to drive more than 80% of our bookings in the quarter. And across our solutions the sub verticals, a pretty diverse. For example, in the quarter deals one include a global apparel and home fashions, retailer of global developer and manufacturer of construction equipment, a grocery chain, a global manufacturer of HVC and refrigeration price. It's a global supply chain management company, a beauty and wellness retailer as well as the number of others.

Overall competitive win rates remained solid at about 75%, 20% of our Q2 new bookings were generated from net new logos, and we continue to have a healthy mix of conversions, upsells and cross-sells. While the timing of large deals and bookings mix will certainly vary on a quarterly basis, we believe our sales breadth exemplifies the many and varied opportunities for sustainable future growth.

The key to this growth and steady execution is unparalleled combination of industry-leading solutions and world-class service that we provide to our customers, our best of breed cloud native platform and solutions provide continuous access to innovation and a key component of our customer success. These mission critical solutions help our clients strengthen their relationships with their end customers drive more revenue and improve efficiency.

These powerful benefits are translating into record solutions pipeline for us with new potential customers representing about 35% of the demand as solid product demand is also fueling opportunities for growth of our internal service organization as well as growing the growing roster of Manhattan value points.

Unlike the last few quarters, our global services team completed over 100 go-lives in Q2 and continue to perform very well for our customers. While we remain appropriately cautious on the global economy, we continue to invest to drive growth from our numerous opportunities. This includes monetizing strategic investments in industry-leading innovation, further enablement of our customer success and the expansion of our addressable market.

From a hiring perspective, we've hired just over 100 new team members year to date and plan on continuing our hiring posture for the remainder of the year.

Turning now to just a few updates on our products. Before I cover the important new product announcements we made in May at our momentum customer conference, I'd like to highlight some recent external validation of the innovation that we've been delivering within applications.

It certainly well, the most important validation we get is from our customers, and it was also gratifying to see our products recognized by some of these third parties. So first, we had two of our applications named Innovation of the Year by two industry publications. The first recipient was our recently released fulfillment experience, insight dashboard, part of Manhattan Active Omni. This new capability allows a Manhattan Active Omni customers to benchmark that omnichannel fulfillment performance against a group of peers.

And Manhattan yard management was also recognized as an innovation of the year as part of our Manhattan Active supply chain execution platform and the solution unifies distribution and logistics where they come together in the physical world.

And a quick mention of the most recently published Gartner Magic Quadrants for warehouse management and transportation management. For the 16th consecutive year, Manhattan was the definitive leader in the WMS Magic Quadrant for the sixth consecutive year. Manhattan was amongst a small group of vendors in the leaders category in the TMS Magic Quadrant. And we are certainly very appreciative of Gartner's recognition of US cereal investment in innovation.

Now let's turn to a couple of important product updates.

First, let's talk about generative AI, as I've mentioned on prior calls, since the initial availability of generative AI models. Our engineers have been hard at work, designing and building and testing. Of course, generative AI based capabilities.

At momentum, we announced the first of these capabilities in the form of a new product called Manhattan Active Maven part of our Manhattan Active Omni platform. The Manhattan Active movement is a gen AI powered application, which provides both best-in-class consumer-facing chat bots and a powerful set of capabilities to assist contact center agents.

Generative AI technologies provided they've been trained on the right underlying data, particularly well-suited to automating customer service tasks because of their ability to answer it very wide range of questions and leveraging on the underlying data is where the Manhattan Active platform really shines.

Because from day one, we built the Manhattan Active platform applications as API first. Literally, everything in our applications and everything our applications do is available via an API. And this approach gives Manhattan a major advantage when it comes to leveraging generative AI. Our API first approach is one of the key reasons Manhattan Active Maven is proving to be so very powerful.

Going far beyond answering the basic questions of where's my order. Maybe you can answer detailed questions about payments, check inventory at local stores or even changed delivery methods for orders that are already being processed when active move, also provides power efficiency and efficiency enhancing capabilities for call center agents as well.

Manhattan Active Maven makes his debut this month, like all Manhattan Active platform applications will get better and better and better each quarter thereafter. At Manhattan, we also announced [Manhattan assist] and gen AI powered feature available across all Manhattan Active applications.

Manhattan assists first set of capabilities focus on helping our customers get maximum value from their investments in that platform applications.

Our users can now ask assist detailed questions about the best way to achieve a particular business objective, how to configure a specific behavior and then be guided directly the relevant configuration screen.

And last but certainly not least of I'd like to spend a few minutes talking about the biggest announcement that we made a few months back at Manhattan. Coming this fall, we'll be releasing Manhattan Active supply chain planning, the combination of but a decade of investment to move our enterprise applications to an industry-leading cloud-native platform. The release of Manhattan Active supply chain planning will complete our work to fully transform our solution portfolio to being cloud-first.

And just as importantly, we'll make the first will be the first and only vendor to enable a unified cloud native offering spanning both supply chain planning and supply chain execution and consistent with the vision that we brought to market with Manhattan Active Omni and active supply chain execution. Manhattan Active supply chain planning customers will benefit substantially from the power of unification.

In this case, unification works at several levels. First, via composable set of APIs, we use to unify demand, forecasting allocation and replenishment all into a single application. The vast majority of businesses you see distribute and sell both allocated and replenish products. And today, this due inventory flow method really necessitate either using two disparate systems or the enterprise or planning one pool of item without systemic support for all of them now for the first time customers that can be able to use a single demand forecast to drive both allocated and replenish products.

It is actually the second larger form of unification, which is proving to be the most exciting and interesting to our customers. So far, we call this next level of unification unified business planning because it enables our customers to drive their inventory, labor and transportation forecasts from a single demand forecasts in order projection.

Now as supply chain practitioners are going to be able to see everything from a transportation forecasts on a particular ad buying transit lane six months out to a required picking associate forecast 26 hours out and everything in between and this detailed operational forecast enables much more effective labor planning and ensuring that adequate labor capacity to meet customer demand and orders is driven without expensive overtime.

On the transportation front, the ability for our customers to collaborate with strategic carriers using detailed transportation capacity forecasts ensure that they've got the exact capacity they need at the best available rates limiting how often they have to go out to the spot market.

But beyond forecast visibility, Manhattan, active supply chain planning is going to enable dynamic collaboration between planning and execution, whether it's turning an inbound purchase order quantity to enable the more efficient transportation or dynamically changing the quantities of inflight store replenishment orders based upon the very latest sales data.

For Manhattan, active supply chain planning uses dynamic always-on optimization to process and adjust the plan in real-time based on sales and operating data is truly the first-of-a-kind, and we're very excited to debut this and in the fall of this year.

And this concludes my business update. Dennis is going to provide you with an update on our recent financial performance and outlook, and then I'll close our prepared remarks with a brief summary before we move to Q&A. So, Dennis.

Thank Eddie. Our Manhattan global teams continue to execute well in a challenging macro environment. For the quarter, we delivered a strong balance financial performance across top line growth, operating margin and cash flow. This includes posting record results across RPO, revenue, operating income and adjusted earnings per share.

On an as-reported basis, our Q2 results came in at the Rule of 50. And if our revenue growth is normalized for our cloud transition, which excludes license and maintenance revenue results exceeded the Rule of 50. FX did not have a meaningful impact, RPO or revenue in the quarter.

Also in reviewing our financial performance, growth rates are on a year-over-year basis unless otherwise stated. So clearly for the quarter, total revenue was $265 million, up 15% at the double digits. Excluding license and maintenance revenue, which removes the compression driven by our cloud transition.

Our total revenue was up 19%. Filed revenue totaled $82 million, up 35%. We ended the quarter with RPO of $1.6 billion, up 29% compared to the prior year and up 6% sequentially. This solid performance was driven by a healthy mix of [sales] from both new and existing customers and transactions from across our Manhattan Active suite of products.

Growth was partially offset by some deals pushing into future periods at quarter end. On an FX adjusted basis, our first half RPO results track towards the high end of our RPO guidance. And as Eddie highlighted, we are entering the second half of 2024 with a record pipeline and are confident in our ability to hit our bookings goals.

Our global services teams delivered record revenue totaling $137 million, up 10%. This was in line with our expectations as cloud sales continue to fuel services revenue growth for Manhattan, adjusted operating profit was $93 million, up 36%, with adjusted operating margin of 35%, this is up 540 basis points year over year. Our performance was driven by strong cloud and services revenue growth, combined with operating leverage as our cloud business continues to scale.

Importantly, as Eddie discussed, we are very optimistic on our business opportunity and continue to invest in innovation to drive sustainable will long term growth. Turning to our earnings per share, we delivered Q2 adjusted earnings per share of $1.18, up 34% and GAAP earnings per share of $0.85, up 35%. Moving the cash. Q2 operating cash flow increased 81% to a solid $73 million.

This resulted in 27% free cash flow margin and 36% adjusted EBITDA margin differences due to $35 million in cash taxes paid in the quarter. Year to date, our operating cash flow is up 29% to $128 million. Regarding the balance sheet, total deferred revenue increased 14% to $260 million.

We ended the quarter with $203 million in cash and zero debt. Accordingly, we leveraged our strong cash position and invested $75 million in share repurchases in the quarter, resulting in $148 million in buybacks year to date.

Also, our Board has approved the replenishment of our $75 million share repurchase authority. So that covers the Q2 summary, which our associates delivered 13 double digit returns on key metrics in the quarter.

Now on to our updated 2024 guidance has consistently mentioned, our financial objective is to deliver sustainable double-digit top-line growth and top quartile operating margins benchmarked against enterprise SaaS comps.

These are important drivers to our best in class return on invested capital as we maintain a balanced investment approach to growth and profitability. With our solid first half performance, we are again raising our 2020 for revenue and operating margin and earnings per share guidance, which can be found in today's earnings release.

We are also reiterating our 2024 RPO target range and midpoint of $1.78 billion. As noted on prior earnings calls, our objective is to update our RPO outlook on an annual basis. And lastly, on RPO. As previously noted, our bookings performance was impacted by the number and relative value of large deals we closed in any quarter, which can potentially cause lumpiness or nonlinear your bookings throughout the year.

With that, for the full year 2024, we expect total revenue of $1.036 billion to $1.044 billion with a $1.04 billion midpoint comparing favorably to our prior outlook and representing 17% growth excluding license and maintenance and 12% all in

For Q3, we are targeting total revenue of $261 million to $265 million, accounting for retail peak seasonality. For Q4, we are targeting a midpoint of $257 million, for adjusted operating margin. We are increasing the midpoint to 32.1% from our prior midpoint of 29.8%, which includes a 120 basis points headwind from our license and maintenance revenue attrition in the cloud. And as Eddie highlighted, given the combination of our demand and size of our opportunity, we continue to invest in our business.

At the midpoint, we are targeting to three adjusted operating margin of 31.5% and accounting for retail peak seasonality of 38.5% in Q4. Our full year adjusted earnings per share is increasing by $0.36 to $4.26, up 9% from our prior midpoint of $3.90. On a quarterly basis, we are targeting Q3 earnings per share of $1.6 and accounting for retail peak seasonality of $1 in Q4. Similarly for GAAP, earnings per share midpoint increases by $0.3 to $3.12.

For Q3, we are targeting GAAP earnings per share of $0.74. Here are some additional details on our 2024 outlook. We are increasing our cloud revenue midpoint to $334.5 million, representing 31% growth on a quarterly basis. We are targeting $85 million in Q3 and $89 million in Q4.

Due to the timing of project go lives and several deal pushes, we are tweaking our services forecast slightly lower by $4 million to $535 million to $539 million with the $537 million midpoint, representing 10% growth.

On a quarterly basis. We are targeting Q3 services revenue of $136 million and accounts for retail peak seasonality, $130 million in Q4. For maintenance, our midpoint upticks to $134 million, which represents a 7% decline on a quarterly basis.

We are targeting $34 million in Q3 and $30 million in Q4. Consolidated subscription, maintenance and services margin. We are targeting 140 basis points of margin improvement for the year. Finally, we expect our tax rate to be 21.5% for Q3 and Q4, and our diluted share count to be 62.2 million shares, which assumes no buyback activity. So that covers the financial update.

I'll turn it back to Eddie.

Okay. Thanks, Dennis, terrific. We're certainly very pleased with our second quarter and first half results. Of course, we continue to be appropriately cautious on the micro conditions right there. So that we experienced more of the more choppiness this quarter than we usually do.

But clearly, our business fundamentals are very solid. We continue to be very optimistic about expanding our market opportunity, and we enter the second half of 2024 from certainly from a position of strength. So we thank everybody for joining the call, and thank you to our global team. Really great work that they're doing for our customers, out there in the field.

So that concludes our prepared remarks. And Alicia, we'd be happy to take any questions.

(Operator Instructions) Terry Tillman, Truist Securities.

Hey, good afternoon, Eddie, Dennis and Mike, thanks for taking my questions. And I guess I would say congratulations, especially on the operating margin and the operating profit, it's very impressive.

I'm going to go a little bit different here and ask maybe 2.5 questions versus 2 questions. So hopefully that's okay. But maybe the first question for you, Eddie, is you have a large WMS installed base? I think I asked last quarter or the quarter prior as well, just where are we now in the cycle in terms of folks somewhere in the journey kicking off and move to cloud WMS.

So whether they've signed deals, they're in flight or they're fully up and running, just whether it's sites or percentage of the installed base, would love to get an update on that. And then I had, like I said, a maybe 1.5 other question?

Sure. Certainly, Terry. In terms of migrating our existing customers to the cloud, we're up by 15% through the journey. Now I've said that we think the journey is about a six or seven year journey. Now to be clear, I've been saying it's a six to seven year journey for about a 1.5 year now.

It does seem to sort of extend that a little bit. But I still think that horizon is about what we're looking at. Maybe there'll be a couple of stragglers at the end of it, but to specifically ask your question, within a couple of decimal places, we're about 15% through the migration.

Got it. Thank you. That's helpful, Eddie. And I guess maybe the second question and then I ask one more follow-up. If we look at demand, so whether it's WMS or other SKUs, how does it feel from a geo perspective across the different geographies you're in. You talked about a couple of large deals or deals that slipped, but overall it sounded pretty good. But what are you seeing? Is it pretty balanced across yields? Or do you see any kind of interesting patterns across geos? And then I had a follow up.

Yeah, it's pretty balanced Terry across geos and across products. I would say that, given we focus mostly on finished goods less on manufacturing and with the little bit of tension between the US and China. Chinese market is probably a little flatter, but it's a very small piece of our business to begin with. So honestly, the flatness there, you don't really see it's not terribly consequential to the overall top line.

Got it. And then just the last question for you, Dennis. I mean the 27%, if I have this right, free cash flow margin is pretty strong. And that's I guess with $35 million or so in cash taxes. Can you share whether it's in third quarter or the second half? Is it about the same level of cash taxes you're assuming or do you get a little bit of benefits in the second half or less of a headwind? Thank you.

It's about same level, Terry. So it will be in the neighborhood of $35 million to $38 million in the second half.

In the second half? Not per quarter, second half?

That's right.

Okay. Thank you all. Congrats.

Basically we'll spread it across the second half.

Got it. All right. Thank you.

Pretty good. Thank you, Terry.

Joe Vruwink. Baird.

Great. Thanks for taking my questions. I wanted to start by asking about the opportunity created within SAP's installed base by needing to migrate off legacy on-prem versions of their WM and ERP, I think Manhattan has already signed customers that initiated RFPs because of these migration events. Do you think this is starting to register more prominently in your pipeline activity? Or could it actually become bigger as end-of-life states approach. I think there's one next year and then also in 2027.

Yeah, it's a good question, Joe. I mean, it's certainly not anything that we're banking on to be perfectly honest with you. But it is a I would say sort of a growing trend. We've seen some customers being quite public about it, frankly, they're moving from on-prem to S4, HANA move into the cloud with SAP, it's a like-for-like move for them.

And the customers that we have concluded that they need to innovate in the supply chain area and fortunately have chosen us to be able to do that. They tend to be the larger global players. So the decision making process is not super-fast or anything, but it's very strategic for us.

And I think there's more of it to come, it's not going to be, hundreds of customers or anything or anything like that I don't think, but it will be a strategic advantage for us to be able to provide that immediate access to innovation in areas that they need it.

Okay. That's great. And then maybe another strategic advantage for you. So your qualitative comments, Eddie, about just the deals signed in the quarter, you mentioned a number of global customers and brands. I don't quite remember the global descriptor as often as this quarter, I guess, are these bigger deals by virtue of being with global accounts and is the global scope is something that is maybe a bit new relative to the demand you've seen so far.

I'd love to tell you, it was something new, but we've got a lot of global customers, Joe, there was a nice spread this quarter. There's no question that both across vertical and across geo. But honestly it wasn't typically -- particularly unusual this quarter.

Okay. Fair enough. I'll leave it there. Thanks.

Okay. Thank you, Joe.

Brian Peterson, Raymond James.

Hi, gentlemen, thanks for taking the question. So any -- you had a lot of product innovation. You mentioned a lot of momentum, a lot of new products that are coming to market later this year. I'd be curious as we think about maybe the next 12 to 18 months in that cross-sell opportunity. What are you most excited about?

Well, that's a great question. That's [incredible] question. I'm excited about a lot of things are really I am, I mean, certainly supply chain planning that we announced a momentum a couple of months ago. It launches right at the end of Q3 -- this quarter for us is very exciting.

It's a journey, frankly, and that's something that supply chain, software industry has been chasing for decades now to bring together supply chain planning and supply chain execution on a truly unified our platform. And we're the first ones to get there and so forth. And obviously, we're excited. We're excited about the opportunity, and we're excited for the first mover opportunity.

I would tell you that I continue to be very excited about our opportunity in point of sale of retail store systems before you ask, we didn't actually close any point-of-sale deals in Q2, but that does not diced my enthusiasm at all. The pipeline is a pretty straight for us. Continue to have very encouraging conversations, both with existing customers and new prospects in that area.

And making what we think is really good progress. We did have some nice new go-lives in the quarter with customers that we signed in prior quarters going live for the first time with point of sale in Q2. But listen, let us not lose our focus on warehouse management. It continues to be, a very important part of our portfolio.

We've got a terrific pipeline for WMS as well, so I'm pretty much go into the product portfolio telling you, I am excited about everything we're doing. But the I suppose in the near term, the true release of supply chain planning in the fall will have to be top of the list at the moment.

Great color. Thanks, Eddie. And Dennis, maybe a follow-up for you. If I'm looking at gross margins for subscription, to maintenance and services that was much higher than we had modeled up north of 300 basis points year over year. Anything you'd call out that's driving that. Thanks, guys.

Just a positive mix between services and cloud and the gross margin.

Okay. So just on the mix of the revenue components.

Yep.

Got it. Thanks, guys. Appreciate it.

Thank you, Brian.

Dylan Becker, William Blair.

Thank you for taking questions here. Maybe Eddie, starting with you. I feel a lot of the retailers and businesses you're talking to are looking to operate more efficiently. I think labor constraints are a big component of that.

So I wonder how are your conversations trending as you think about kind of the opportunity for a modern platform and point of sale is a key enabler of driving not only like efficiency upskilling, obviously, employee retention tied to that kind of tangible ROI and how that's maybe helping continue to kind of contribute to some of the resiliency or decisioning that you're seeing today?

Yeah. I mean, it's true in the retail stores, efficiency is important. Obviously, revenue generation is the key factor in stores. But you quickly mentioned a quick point that, the retention of team members in stores being able to have them or enable them with modern technology, both from an efficiency and a retention perspective is super important.

But also the labor component inside distribution centers. Hard to find, hard to keep, the need to be flexible and so forth is very, very important. And the level of automation that customers are putting into distribution centers is continuing to increase because of that lack of availability of labor and the need to improve efficiency.

And we thrive in environments that are complex in that nature, highly automated and the need for a great deal of velocity and throughput from those distribution centers. We think that the innovation that we've built over the last 10 years, meet those market needs and is definitely a differentiator for us.

Okay. That's great. That's helpful. Maybe switching over to you, Dennis, and sticking with the gross margin theme, obviously that favorable mix shift is going to continue. But how much -- how should we think about kind of the opportunity for further leverage maybe even more towards kind of a steady-state dynamic as we think about where the cloud business sits today, leverage and efficiencies as that continues to scale, paired with the opportunity of that becoming a larger share of the business here over the next three to five years or so?

Yeah, early. I mean, early days, we'll give more commentary in the Q3 call on our outlook for next year, not trying to push you off there, but we feel real good around our margin profiles and very confident.

All right. That's great. Thanks guys.

Thank you, Dylan.

George Kurosawa, Citi.

Hi, thanks for taking the questions and congrats on a good result here in a choppy environment. I wanted to touch on the deal push-outs.

Any kind of commonalities between those deals, those situations where they signed in the first few weeks here of July or maybe there's kind of budgetary situations those might kind of push out till later in the year.

No particular comment to -- no commonality, excuse me there, George, they spanned geographies, they spanned industries, they spanned product offerings and proposals that we had out there. So we'd love to point at something and tell you it was funds being put towards GenAI or whatever some thread, but it really wasn't -- there wasn't anything specific there. I'm not going to go into a ton of details this early in the quarter.

Yes, a couple of them have closed. So that's been helpful. The good news is across all of that is that win rates for a 75%, so they weren't losses. They would just sort of stutter steps for a variety of reasons across the board.

Okay. That's helpful. And then on services, I think there's a common commentary about kind of retaining your hiring posture. Maybe just kind of to double-click on what exactly you meant there in terms of does that imply kind of hiring for replacement or maybe expanding by let’s say another hundred heads in that kind of back half, yeah, just any color would be helpful.

Yeah, we plan to continue to hire. The good news is that our attrition rate is for this year is lower than we had forecasted so that helps in all kinds of different ways, not at least of which on efficiency, margin, customer satisfaction and so forth. But lower attrition does mean -- potentially a little bit less hiring, but we do definitely plan to expand the team in the second half of the year for sure. And those hires will be largely in customer facing and services rose.

That's helpful. Thanks for taking the question.

Certainly, our pleasure, George. Thank you.

Mark Schappel, Loop Capital Markets.

Hey, guys. Thanks for taking my question here and nice job on the quarter. Most of my questions have been answered, but I just have one here with respect to active supply chain planning.

I'm just wondering, if you can you just talk a little bit about whether that solution is designed to go head to head with some of the more established supply chain planning systems out there like from Blue Yonder or Kinaxis.

Well, yes, from probably not so much Kinaxis because it's a low, little further down market and a little more manufacturing focus. But yes, it certainly is obviously we -- Mark, as you know, we're not focused on the manufacturing side of planning. So it's certainly in the finished goods side of the world and so forth.

But the answer to that is yes. But of course, we're taking a quite a different approach with this being not a batch based solution as they traditionally have been for the last several decades, number one.

Continuous planning and inventory optimization, integrated and unified with supply chain execution systems. So definitely the Holy Grail of the things that we've been -- the world is and market's been chasing for quite some time now.

Great. Thank you. That's all from me.

Thank you, Mark.

Thank you. There are no further questions at this time. I would like to turn the floor back over to Eddie for closing comments..

Okay. Well, thank you, Alicia, and thank you, everybody, for joining the call. We're excited about where we are. We're excited about the results for the first half, even more excited about the second half of 2024 and beyond. So thanks a ton for joining the call, and we'll speak to you in about three months from now with the Q3 update. Thanks a lot, bye, bye.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.