Quest Resource Holding Corp (QRHC) 2024 Q1 法說會逐字稿

Good day, everyone, and welcome to the Quest Resource Holding Corp. first-quarter 2024 earnings call. (Operator Instructions) It is now my pleasure to turn today's conference over to Dave Mossberg, Investor Relations.

大家好，歡迎參加 Quest Resource Holding Corp. 2024 年第一季財報電話會議。（操作員說明） 現在，我很高興將今天的會議交給投資者關係部門的戴夫·莫斯伯格 (Dave Mossberg)。

Thank you, David. And thank you, everyone, for joining us on the call. Before we begin, I'd like to remind everyone that this call may contain predictions, estimates, and other forward-looking statements regarding future events and future performance of Quest. Use of the words like, anticipate, project, estimate, expect, intend, believe, and other similar expressions are intended to identify those forward-looking statements. Such forward-looking statements are based on Quest's current expectations, estimates, projections, beliefs, and assumptions and involve certain significant risks and uncertainties. Actual events or Quest's results could differ materially from those discussed in the forward-looking statements as a result of various factors which are discussed in greater detail in Quest's filings with the Securities and Exchange Commission.

謝謝你，大衛。感謝大家加入我們的電話會議。在開始之前，我想提醒大家，本次電話會議可能包含有關 Quest 未來事件和未來業績的預測、估計和其他前瞻性陳述。使用「預期」、「預測」、「估計」、「期望」、「打算」、「相信」等詞語和其他類似表達方式旨在識別這些前瞻性陳述。此類前瞻性陳述是基於 Quest 目前的預期、估計、預測、信念和假設，並涉及某些重大風險和不確定性。由於各種因素的影響，實際事件或 Quest 的結果可能與前瞻性聲明中討論的結果有重大差異，這些因素在 Quest 向美國證券交易委員會提交的文件中進行了更詳細的討論。

You are cautioned not to place undue reliance on such statements and to consult our SEC filings for additional risks and uncertainties. Quest's forward-looking statements are presented as of the date made, and we disclaim any duty to update such statements unless required to do so by law.

請您注意不要過度依賴此類聲明，並請查閱我們向 SEC 提交的文件以了解其他風險和不確定性。Quest 的前瞻性聲明截至作出之日提供，我們不承擔更新此類陳述的義務，除非法律要求這樣做。

In addition, in this call, we may include industry and market data and other statistical information as well as Quest's observations about industry conditions and developments. The data and information are based on Quest's estimates, independent publications, government publications, and reports by market research firms and other sources.

此外，在本次電話會議中，我們可能會納入產業和市場數據以及其他統計資料以及 Quest 對產業狀況和發展的觀察。這些數據和資訊是基於 Quest 的估計、獨立出版物、政府出版物以及市場研究公司和其他來源的報告。

Although Quest believes these sources are reliable and the data and information are accurate, we caution that Quest has not independently verified the reliability of the sources of the accuracy or the information. Certain non-GAAP financial measures will be discussed during this call. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance.

儘管 Quest 認為這些來源可靠且數據和資訊準確，但我們提醒大家，Quest 尚未獨立驗證準確性或資訊來源的可靠性。本次電話會議將討論某些非公認會計準則財務指標。管理階層使用這些非公認會計原則衡量標準來制定策略決策、預測未來績效並評估公司目前績效。

Management believes the presentation of these non-GAAP financial measures is useful to investors' understanding and the assessment of the company's ongoing core operations and prospects for the future. Unless it is otherwise stated, it should be assumed that any financials discussed in this call will be on a non-GAAP basis. Full reconciliations of non-GAAP to GAAP financial measures are included in today's earnings release. With all that said, I'll now turn the call over to Ray Hatch President and Chief Executive Officer.

管理層認為，這些非公認會計準則財務指標的呈現有助於投資者了解和評估公司正在進行的核心業務和未來前景。除非另有說明，否則應假設本次電話會議中討論的任何財務數據均基於非公認會計原則。今天的收益報告中包含了非公認會計原則與公認會計原則財務指標的全面調節。話雖如此，我現在將把電話轉給雷哈奇 (Ray Hatch) 總裁兼執行長。

Thank you, Dave, and thank you for joining us on today's call. We have strong momentum across our business to start the year. One area to highlight is organic growth of new clients. We previously discussed six new client wins last quarter and one large new win early in the second. To put those achievements in perspective in the past couple of years, we've been averaging approximately one new client win per quarter.

謝謝戴夫，也謝謝您參加我們今天的電話會議。今年伊始，我們的業務勢頭強勁。值得強調的一個領域是新客戶的有機成長。我們之前討論過上季的六項新客戶勝利和第二季初期的一場大型新勝利。為了正確看待過去幾年的這些成就，我們平均每季贏得約一個新客戶。

We also have strong momentum with our existing client base. I'll talk about this a bit later. But to summarize, we are seeing strong growth within our existing client base and continue to uncover significant opportunities to expand services even further.

我們現有的客戶群也擁有強勁的發展動能。我稍後再談這個。但總而言之，我們看到現有客戶群的強勁成長，並繼續發現進一步擴展服務的重大機會。

We're also having success adding new end markets, having added two in the past couple of quarters. These areas have significant growth potential, and we're well positioned to add additional new clients in these markets as well as new service lines where there is a crossover of services within our existing client base.

我們還成功地增加了新的終端市場，在過去幾個季度中增加了兩個。這些領域具有巨大的成長潛力，我們處於有利位置，可以在這些市場中增加更多新客戶，並在我們現有客戶群中提供交叉服務的新服務線。

I will also note that our pipeline of opportunities with new and existing clients has grown and momentum appears to be durable, which bodes well for the next few years. Size momentum seen during the first quarter, we began to see the benefits from the investments we've made and continue to make in scalability and efficiency of our technology platform and process improvements, increasing operating efficiencies. This is showing up in a number of ways.

我還要指出的是，我們與新客戶和現有客戶的機會管道已經增加，而且勢頭似乎很持久，這對未來幾年來說是個好兆頭。從第一季看到的規模動能來看，我們開始看到我們在技術平台的可擴展性和效率以及流程改進方面所做的投資和繼續進行的投資所帶來的好處，從而提高了營運效率。這體現在很多方面。

First is the accelerated pace of adding new business from both existing and new clients through our ability to quote more accurately, more completely, and more timely. Second is the increased efficiency in which we are operating waste programs. We're driving cost down, which benefits our customers and our vendor partners as well as our own business in the form of lower cost of sales.

首先是透過我們提供更準確、更完整、更及時的報價的能力，加快了從現有客戶和新客戶增加新業務的步伐。其次是提高了我們營運廢棄物處理計劃的效率。我們正在降低成本，這有利於我們的客戶、供應商合作夥伴以及我們自己的業務，從而降低銷售成本。

And third, platform investments and process improvements are beginning to deliver operating leverage so that we can significantly scale the business without a correlated increase in overhead costs. For example, during the first quarter, we grew EBITDA at more than twice the pace of gross profit dollars. We expect to demonstrate more and more of that operating of leverage in the coming quarters. I'll now turn the call over to our CFO, Brett Johnston.

第三，平台投資和流程改善開始提供營運槓桿，以便我們可以大幅擴展業務，而不會導致管理成本的相關增加。例如，在第一季度，我們的 EBITDA 成長速度是毛利成長速度的兩倍以上。我們預計在未來幾季將展示越來越多的槓桿操作。現在我將把電話轉給我們的財務長 Brett Johnston。

Thanks, Ray, and good afternoon, everyone. We had strong first quarter results with double-digit growth in gross profit dollars and demonstrated operating leverage with the bottom line growing at an even faster pace. Revenue was $72.7 million versus $74.1 million a year ago, which is a 2% decrease year over year and a 5% increase sequentially from the fourth quarter. The year-over-year decrease was primarily related to a customer that had been acquired during the third quarter of 2023.

謝謝，雷，大家下午好。我們第一季業績強勁，毛利達到兩位數成長，並展示了營運槓桿，利潤成長速度更快。營收為 7,270 萬美元，而去年同期為 7,410 萬美元，年減 2%，較上季成長 5%。年比下降主要與 2023 年第三季獲得的客戶有關。

As we discussed in our previous quarterly calls, the company that acquired this client manages waste disposal internally and decided to manage our client in the same way. In addition, we have lower activity levels with a couple of accounts. On average, these accounts typically have produced lower overall margins.

正如我們在先前的季度電話會議中討論的那樣，收購該客戶的公司在內部管理廢物處理，並決定以同樣的方式管理我們的客戶。此外，我們的幾個帳戶的活動水平較低。平均而言，這些帳戶的整體利潤率通常較低。

The year-over-year comparison was partially offset by growth from existing and new customers with more attractive gross margin profiles. I will note that we began onboarding most of the new client wins on April 1. So new client wins secured during the first quarter did not affect first-quarter revenue comparisons.

年比比較被毛利率更具吸引力的現有客戶和新客戶的成長部分抵銷。我要指出的是，我們從 4 月 1 日開始吸引大部分新客戶。因此，第一季獲得的新客戶並沒有影響第一季的營收比較。

During the first quarter, gross profit dollars were $14 million, an increase of 11.1% versus last year. Almost all of this increase came from program optimization and expanding business with our existing clients. Looking at gross profit dollars for the second quarter and the remainder of 2024, we are encouraged by the record number of new customer wins Ray mentioned earlier, we expect sequential growth in gross profit dollars during the second quarter and anticipate that new client wins and growth with existing clients will increasingly add to our year-over-year gross profit dollar growth throughout the course of the year.

第一季毛利為 1,400 萬美元，比去年同期成長 11.1%。幾乎所有的成長都來自於計劃優化和與現有客戶的業務擴展。看看第二季度和 2024 年剩餘時間的毛利，我們對 Ray 前面提到的創紀錄的新客戶贏得數量感到鼓舞，我們預計第二季度毛利將連續增長，並預計新客戶贏得和增長與現有客戶的合作將越來越多地促進我們全年毛利的成長。

Moving on to SG&A, which was $9.8 million during the fourth quarter, up approximately $400,000 from the same period last year and in line with our expectations. Looking forward, we expect lower integration costs and to gain efficiencies from the investments we made in our platform and through process improvements.

接下來是 SG&A，第四季的 SG&A 為 980 萬美元，比去年同期增加約 40 萬美元，符合我們的預期。展望未來，我們期望降低整合成本，並透過我們在平台上的投資和流程改進來提高效率。

We expect the savings from efficiency gains to be partially offset by continued investment in growth and other initiatives. And we expect SG&A will grow at a slower pace than gross profit dollars. As a result, we expect SG&A will be about $10 million in the second quarter.

我們預期效率提升帶來的節省將被對成長和其他措施的持續投資所部分抵銷。我們預計 SG&A 的成長速度將低於毛利的成長速度。因此，我們預計第二季的 SG&A 約為 1000 萬美元。

Moving on to a review of the cash flows and balance sheet. Our liquidity is in good shape, and we've increased our borrowing capacity and availability. On April first, we announced that we had extended the maturities on our debt with Monroe until October of 2026 and extended the maturity of our credit line with PNC until April of 2026, which gives us added runway to continue our process of evaluating alternative long-term debt financing structures. That will help us lower borrowing costs and preserve the ability to maximize growth.

接下來檢視現金流量和資產負債表。我們的流動性狀況良好，並且我們增加了借貸能力和可用性。4 月 1 日，我們宣布將 Monroe 的債務期限延長至 2026 年 10 月，並將 PNC 的信貸額度期限延長至 2026 年 4 月，這為我們繼續評估替代長期貸款的流程提供了更多途徑。債務融資結構。這將幫助我們降低借貸成本並保持最大限度成長的能力。

Based on the momentum we have had to date and how we expect to finish this year, we expect to attract lenders with competitive pricing and attractive terms. We are already hearing from prospective lenders and advisors that lenders are more willing to sacrifice margin to submit more competitively priced lending options.

根據我們迄今為止的勢頭以及我們今年的預期，我們希望以具有競爭力的價格和有吸引力的條款來吸引貸方。我們已經從潛在的貸款人和顧問那裡得知，貸款人更願意犧牲保證金來提供價格更具競爭力的貸款選擇。

Regarding the increase in our borrowing capacity, we also announced that we have increased the size of the borrowing line with PNC to $35 million from $25 million and added an incremental equipment term-loan facility to finance up to $5 million of equipment purchases. At the end of the quarter, we had $17.5 million drawn on our $35 million operating borrowing line and nothing drawn on the$ 5 million term loan facility. This compares to $13.2 million drawn on our line with PNC at the beginning of the year.

關於提高借款能力，我們也宣布已將 PNC 的借款額度從 2,500 萬美元增加到 3,500 萬美元，並增加了增量設備定期貸款設施，為最多 500 萬美元的設備採購提供資金。截至本季末，我們從 3,500 萬美元的營運借款額度中提取了 1,750 萬美元，而 500 萬美元的定期貸款融資中沒有提取任何內容。相比之下，今年年初我們從 PNC 提取了 1,320 萬美元。

In this interest rate environment, we have been actively looking to reduce interest expense by optimizing cash management, carrying less cash and minimizing borrowings on the line of credit. Thus, our cash balance was $581,000 at the end of the first quarter. For the quarter, we used $1.7 million to fund operations, which included $1 million of acquisition related earn-out payments. This was the final payment of that transaction.

在這種利率環境下，我們一直在積極尋求透過優化現金管理、減少現金攜帶和盡量減少信用額度借款來降低利息支出。因此，第一季末我們的現金餘額為 581,000 美元。本季度，我們使用了 170 萬美元來資助運營，其中包括 100 萬美元的收購相關盈利付款。這是該交易的最終付款。

At the end of the quarter, receivables remained elevated from our average range with DSOs at 75 days. During the quarter, we partially resolved slow payments from several of our largest customers that we described on last quarter's call. Also, I am happy with the continued progress made subsequent to the end of the quarter and expect to return to more normalized levels in the mid 60s by the end of the second quarter.

截至本季末，應收帳款仍高於我們的平均範圍，DSO 期限為 75 天。在本季度，我們部分解決了我們在上季度電話會議中描述的幾個最大客戶的緩慢付款問題。此外，我對本季末之後的持續進展感到高興，並預計到第二季末將恢復到 60 年代中期更正常化的水平。

I will note that the increased DSOs are temporary. We have great relationships with these customers and slower than expected payments is not related to collectability. Also in the future, due to the timing of onboarding new large clients, it is possible that we will see fluctuations in the DSOs from quarter to quarter.

我要指出的是，增加的 DSO 是暫時的。我們與這些客戶有著良好的關係，付款速度低於預期與可收回性無關。同樣在未來，由於新大客戶的加入時間，我們可能會看到 DSO 逐季度出現波動。

CapEx for the quarter was $1.9 million, which is more than we normally spend during any given quarter. $1.6 million of the CapEx was related to the contactors that we were able to opportunistically purchase at an attractive price. Subsequent to the end of the first quarter, we have spent another $1.5 million, adding additional contactors as part of this purchase.

本季的資本支出為 190 萬美元，高於我們在任何特定季度的正常支出。 160 萬美元的資本支出與我們能夠以有吸引力的價格機會購買的接觸器有關。第一季末後，我們又花了 150 萬美元，並增加了額外的接觸器作為此採購的一部分。

We will opportunistically be looking for other compactors but do not anticipate significant spending in the next few quarters unless we run across another attractive opportunity. Ray will cover the rationale for this in his remarks. But in summary, it made more sense to own these compactors instead of renting them, both from a financial and strategic perspective.

我們將機會主義地尋找其他壓實商，但預計未來幾季不會有大量支出，除非我們遇到另一個有吸引力的機會。雷將在他的演講中闡述這樣做的理由。但總而言之，從財務和策略角度來看，擁有這些壓實機比租賃它們更有意義。

At the end of the quarter, we had $71.8 million in notes payable versus $67.8 million at the beginning of the year. The increase primarily reflects that growth and borrowing on our line with PNC to fund working capital and the assets purchase that I described earlier. At this time, I'll turn the call back to Ray.

截至本季末，我們的應付票據為 7,180 萬美元，而年初為 6,780 萬美元。這一成長主要反映了我們與 PNC 的成長和借款，為我之前描述的營運資金和資產購買提供資金。這時，我會把電話轉回給雷。

Thank you, Brett. We had a strong start to the year with solid financial performance in Q1 and significant ramp in adding business from both new and existing clients. We also began to see some benefits from the investments we've made -- they have been making in our technology platform and process improvements.

謝謝你，布雷特。我們今年開局強勁，第一季財務表現穩健，新客戶和現有客戶的業務成長顯著。我們也開始從我們所做的投資中看到一些好處——他們在我們的技術平台和流程改進方面進行了投資。

I'll start off by covering new client wins. We are seeing the results of the hard work of our team over the last two years to develop our go-to-market sales efforts. We covered a lot of detail with the six new business wins during our last earnings call, so I won't go into a lot more detail covering those. However, I will tell you that we began to onboard most of these new client wins in the beginning of the second quarter and expect to see a nice step up in sequential gross profit dollar growth.

我將首先介紹新客戶的勝利。我們看到了我們團隊過去兩年辛勤工作的成果，以發展我們的市場銷售工作。在上次財報電話會議上，我們介紹了有關六項新業務的許多細節，因此我不會詳細介紹這些內容。然而，我要告訴你的是，我們在第二季初開始贏得大部分新客戶，並預期毛利將持續成長。

I will also give you a little more color on the win we secured early in the second quarter. We refer to this new client win in a press release in late April when we announced the date for our earnings call. This is a market leader in the grocery sector and is expected to produce eight figures in annual revenue and offer incremental growth opportunities. We won the client in a competitive process, and we were chosen based on our reputation, cost effectiveness, customer alignment with sustainability goals, and the ability for us to provide added visibility from our data portal and platform.

我還將為您介紹我們在第二節初的勝利。我們在四月下旬宣布財報電話會議日期時的新聞稿中提到了這位新客戶的勝利。這是雜貨業的市場領導者，預計年收入將達到八位數，並提供增量成長機會。我們在競爭過程中贏得了客戶，我們被選中是基於我們的聲譽、成本效益、客戶與永續發展目標的一致性，以及我們透過資料入口網站和平台提供更高視覺性的能力。

In addition to closing several deals in recent months, we've continued to see a noticeable uptick in not only number, but also the size of opportunities in our pipeline. Given the success we are having with new client wins, we plan to accelerate our investment in organic growth initiatives, including investments in marketing and sales during 2024, reinvesting some of the profit gains generated in the business.

除了近幾個月完成的幾筆交易外，我們還看到我們的管道中的機會不僅數量顯著增加，而且規模也顯著增加。鑑於我們在贏得新客戶方面取得的成功，我們計劃加快對有機成長計畫的投資，包括 2024 年對行銷和銷售的投資，並將業務中產生的部分利潤收益進行再投資。

I want to comment on the growth from existing clients. We have long said there is a great deal of opportunity with our existing client base. And that is still very much the case. We've done a good job over the last several years of adding new business with existing clients, which has been a stable source of growth for our company. However, I believe we're just beginning to scratch the surface of what we can do for our existing clients.

我想評論一下現有客戶的成長。我們長期以來一直表示，我們現有的客戶群存在大量機會。情況仍然如此。過去幾年我們在與現有客戶增加新業務方面做得很好，這一直是我們公司穩定的成長源。然而，我相信我們才剛開始觸及我們能為現有客戶做的事情的表面。

During the last several quarters that we've demonstrated our capabilities. Several of our largest clients are coming to us and asking us to do more. They have seen the value of our platform and give the corporate level, not only greater visibility into their spend at the local level, but also auditable data that allows them to confirm that waste is being handled according to local, regional, and national regulations as well as their own corporate level specifications.

在過去的幾個季度中，我們展示了我們的能力。我們的幾個最大的客戶來找我們並要求我們做更多的事情。他們已經看到了我們平台的價值，並為企業層面提供了不僅可以更清楚地了解他們在地方層面的支出，還可以提供可審計的數據，使他們能夠確認廢物是否按照當地、區域和國家法規進行處理：以及他們自己的企業級規範。

It's very rewarding that customers are coming to us and asking for solutions, and it shows how well we are regarded. As a result of this interest, we plan to take a more proactive approach to working directly with our clients. We are creating dedicated project teams to work with our larger clients to identify issues and help them understand how we can help. For example, we have been working with a large customer and uncovered more than 50 potential projects where we can help them improve waste management.

客戶向我們尋求解決方案是非常值得的，這表明了我們受到的重視。由於這種興趣，我們計劃採取更積極主動的方式直接與客戶合作。我們正在組建專門的專案團隊，與我們的大客戶合作，找出問題並幫助他們了解我們如何提供協助。例如，我們一直在與一家大客戶合作，發現了 50 多個潛在項目，我們可以幫助他們改善廢棄物管理。

There are large and small projects that range from the tens of thousands of dollars to eight figures and almost all of these projects have recurring waste management services once the initial projects are completed.

大大小小的專案從數萬美元到八位數不等，幾乎所有這些專案在初始專案完成後都會提供經常性的廢棄物管理服務。

Now, I want to cover the rationale behind investing in compactors that Brett mentioned in his remarks. I don't want anyone to take away from this commentary that we're changing our business model. We very much remain primarily an asset-light business. We don't plan on owning trucks, landfills or similar hard assets.

現在，我想談談布雷特在演講中提到的投資壓實機背後的理由。我不希望任何人從這個評論中看出我們正在改變我們的商業模式。我們基本上仍然主要是一家輕資產企業。我們不打算擁有卡車、垃圾掩埋場或類似的硬資產。

Compactors are a highly adjacent business and a very important part of the service offering in a number of sectors like retail and real estate. They offer significant complementary economics, and we're not competing with our vendor partners by owning compactors.

壓實機是一個高度相關的行業，也是零售和房地產等許多行業提供的服務的非常重要的一部分。它們提供了重要的互補經濟效益，我們不會透過擁有壓實機來與我們的供應商合作夥伴競爭。

We were looking at increasing the number of compactors that we own when it makes sense. In fact, prior to this recent purchase, we already owned about 200 compactors. We regularly buy them in lower quantities to meet customer needs. Once in place at a customer location, compactors are seldom moved. They require limited maintenance, and their utilization is typically in the high 90% range.

我們正在考慮在合理的情況下增加我們擁有的壓實機的數量。事實上，在最近購買之前，我們已經擁有大約 200 台壓實機。我們定期少量購買以滿足客戶需求。一旦到達客戶所在地，壓實機就很少移動。它們需要有限的維護，並且利用率通常在 90% 左右。

Compactors produced an attractive recurring revenue stream with attractive margin and a high return on capital. In addition to attractive financial metrics, that help us create more lasting relationships with clients.

壓實機產生了有吸引力的經常性收入來源，具有有吸引力的利潤和高資本回報率。除了有吸引力的財務指標外，這還有助於我們與客戶建立更持久的關係。

As part of this opportunistic purchase for approximately $3.1 million, we added about 200 compactors that were already under existing contract. As Brett said, $1.6 million was paid in the first quarter and $1.5 million in the second quarter. With this transaction we doubled the size of our fleet and gained scale that makes this a much more attractive business, all without having to add more G&A.

作為這次價值約 310 萬美元的機會性採購的一部分，我們增加了現有合約中已有的約 200 台壓實機。正如布雷特所說，第一季支付了 160 萬美元，第二季支付了 150 萬美元。透過這筆交易，我們的機隊規模擴大了一倍，規模也擴大了，這使得這項業務更具吸引力，而且無需增加更多的一般管理費用。

I now reveal the investments we're making in technology. Over the years, we've built a technology platform that will be able to scale to the size of a much larger enterprise. The technology platform has been a key deciding factor for several competitive wins and has helped us maintain enduring client relationships due to the incremental value we provide. We are actively introducing additional technology improvements in 2024.

我現在透露我們在技術方面的投資。多年來，我們已經建立了一個能夠擴展到更大企業規模的技術平台。該技術平台是多次競爭勝利的關鍵決定因素，並且由於我們提供的增量價值而幫助我們維持持久的客戶關係。我們將在 2024 年積極引入更多技術改進。

In past calls, we've discussed the vendor sourcing tool, which is helping us to accelerate our quoting and onboarding processes. More recently, we have begun rolling out an AP automation solution that utilizes artificial intelligence to further automate the processing of vendor invoices. As of today, approximately half our invoices are being processed through our new AP automation platform, half of which require no human interaction or what we call zero-touch.

在過去的電話會議中，我們討論了供應商採購工具，該工具可幫助我們加快報價和入職流程。最近，我們開始推出 AP 自動化解決方案，利用人工智慧進一步自動化供應商發票的處理。截至今天，我們大約一半的發票是透過我們新的 AP 自動化平台處理的，其中一半不需要人工互動或我們所說的零接觸。

We provide hundreds of thousands of invoices every year, and this is part of our goal to reach 100% zero-touch invoice processing. Automating invoice processing helps us ensure payments are made for services delivered and help us eliminate exceptions. Exceptions, require manpower to resolving and can cause delays, which in some cases can degrade customer service levels and vendor relationships. By automating invoice processing, along with other technology enhancements, we are lowering costs continuously improving client and vendor value, providing major enhancements to our ability to scale, and expanding our margins.

我們每年提供數十萬張發票，這是我們實現 100% 零接觸發票處理目標的一部分。自動化發票處理有助於我們確保對所提供的服務進行付款，並幫助我們消除例外情況。異常情況需要人力來解決，並可能導致延誤，在某些情況下可能會降低客戶服務水準和供應商關係。透過自動化發票處理以及其他技術改進，我們正在降低成本，不斷提高客戶和供應商的價值，大大增強我們的擴展能力，並擴大我們的利潤。

Regarding our outlook, I want to emphasize my conviction on our trajectory and the overall outlook for the company in 2024 and beyond. We have made tremendous progress during the last several years, and I've never been more confident in our outlook for continued double-digit growth. I feel very good about organic growth that we have in front of us. Pressure to improve sustainability, expanding regulation, increasing cost of landfills, they all continue to lower the bar for the adoption of recycling services.

關於我們的前景，我想強調我對我們的發展軌跡以及公司 2024 年及以後的整體前景的信心。過去幾年我們取得了巨大進步，我對我們持續兩位數成長的前景充滿信心。我對我們面前的有機成長感到非常滿意。提高永續性的壓力、擴大監管、增加垃圾掩埋場的成本，這些都在持續降低採用回收服務的門檻。

We have multiple sources of organic growth from expanding with our existing clients to ramping up recent wins and a growing pipeline of new business. I want to reiterate that we have a large opportunity to drive gross profit dollar growth on the cost side by optimizing the business we have in hand. As we bring revenue onto our platform, we've proven our ability to optimize cost of service through vendor relations and procurement management that drives our continued growth in gross profit dollars.

我們擁有多種有機成長來源，從現有客戶的擴張到增加最近的勝利和不斷增長的新業務管道。我想重申，我們有很大的機會透過優化我們手頭上的業務來推動成本方面毛利的成長。當我們為我們的平台帶來收入時，我們已經證明了我們有能力透過供應商關係和採購管理來優化服務成本，從而推動我們毛利的持續成長。

In the same way, we have multiple ways of improving efficiency by utilizing the technology investments we've made over the last several years driving improved operating performance and expanding EBITDA margins. The work we have done is centered on building a consistent and sustainable business focused on providing valued service to our client.

同樣，我們有多種方法可以利用過去幾年進行的技術投資來提高效率，從而提高營運績效並擴大 EBITDA 利潤率。我們所做的工作集中在建立一致且可持續的業務，專注於為客戶提供有價值的服務。

The foundation is set for continued success and to build value for our shareholders. We expect our momentum to carry through this year and beyond, and I couldn't be more excited about what's to come. I look forward to keeping you updated on our progress. We now like the operator provide instructions on how listeners can queue up for questions. Operator?

為持續成功並為股東創造價值奠定了基礎。我們預計我們的勢頭將持續到今年及以後，我對即將發生的事情感到非常興奮。我期待著向您通報我們的最新進展。現在，我們希望接線員提供有關聽眾如何排隊提問的說明。操作員？

Aaron Spychalla, Craig-Hallum. Please go ahead. Your line is open.

亞倫·斯皮查拉，克雷格·哈勒姆。請繼續。您的線路已開通。

Yeah, good afternoon, Ray and Brad. Thanks for taking the questions. First, on the rollout of the process improvements and technology improvements, are those largely all in place now? Just trying to get a sense of the really nice progress we've seen on new customers, but it also seems like we might be still in the early innings of really having sales focus on hunting and closing and kind of seeing that flywheel effect of just more wins, leading to more volumes, and helping you kind of reduce costs there, and then further maybe close on that pipeline, too. So if you could just elaborate on that a little bit there would be great.

是的，下午好，雷和布拉德。感謝您提出問題。首先，關於流程改善和技術改進的推出，現在基本上都到位了嗎？只是想了解我們在新客戶身上看到的真正好的進展，但似乎我們可能仍處於真正將銷售重點放在狩獵和關閉上的早期階段，並且看到了飛輪效應更多的勝利，帶來更多的銷量，並幫助您降低那裡的成本，然後也可能進一步關閉該管道。因此，如果您能詳細說明一下那就太好了。

Hey, this is Brett. I'll take that piece. We've certainly made a lot of improvements and a lot of progress on the many different initiatives we have across the different departments in our organization. As you mentioned, I think the most impactful to date have been more on the operational side as it's allowed us to procure a little bit quicker and maybe expedite the sales process a little bit more and given us some efficiencies there.

嘿，這是布雷特。我要拿走那塊。當然，我們在組織不同部門的許多不同措施上取得了許多改進和進步。正如您所提到的，我認為迄今為止最有影響力的是營運方面，因為它使我們能夠更快地採購，也許還能加快銷售流程，並提高我們的效率。

In terms of administrative, we've made some progress. But as Ray mentioned, we're only about halfway there on terms of the AP processing. Automation, I think, is going to be one of the bigger impactful rollouts that we do. So we're about halfway there and about the half -- 50% of invoices we have going through there, we're only at about 40% to 50% optimization.

在行政方面，我們已經取得了一些進展。但正如 Ray 所提到的，我們在 AP 處理方面只完成了一半。我認為，自動化將成為我們所做的最有影響力的推廣之一。所以我們大約已經完成了一半，大約有一半——50% 的發票我們已經在那裡處理過，我們只進行了大約 40% 到 50% 的優化。

We've got really good runway to about 80% near term. And the last 20% of zero touch will be a little bit harder, but you'll see that as we get through the back half of the year. So we're taking a very deliberate approach to this, making sure we're not trying to take on too much and overload the system and the groups.

我們的跑道非常好，近期可達 80% 左右。最後 20% 的零接觸會有點困難，但當我們度過今年下半年時，你就會看到這一點。因此，我們正在採取非常審慎的方法來解決這個問題，確保我們不會試圖承擔過多的任務並使系統和團隊超載。

So a lot of work there. We did talk that SG&A will be up a little bit in Q2. So to that -- Q3, Q4 is where we'll start seeing the impacts of that. We'll get passed. We'll get to a critical mass in the back half of the year where we're able to demonstrate much better operating leverage, and you'll be able to see the numbers.

所以那裡有很多工作。我們確實說過，SG&A 將在第二季度略有上升。因此，我們將在第三季、第四季開始看到其影響。我們會過去的。我們將在今年下半年達到臨界點，屆時我們將能夠展示更好的營運槓桿，您將能夠看到這些數字。

All right. Thanks for that? And then maybe second, you talked a little bit, but just could you maybe expand a little bit on the kind of land and expand strategy with the existing clients? Can you maybe touch on some of the services that you're seeing there, and then any way to quantify whether dollars are kind of percentage -- just kind of the potential for growth that you see from that?

好的。謝謝你嗎？然後也許第二，你談了一點，但你能否在這種土地上擴大一點，並與現有客戶擴大策略？你能否談談你在那裡看到的一些服務，然後有什麼方法可以量化美元是否是百分比——只是你從中看到的成長潛力？

Well, I'll speak to the land and describe. Thanks for your question there. The land-and-expand story really isn't any different than it has been it's just continued to grow and accelerate. I think that's natural. Considering the clients we've added, we have more clients to expand with I guess. So we've added that the clients need basically.

好吧，我將與土地交談並描述。謝謝你的提問。土地擴張的故事實際上與以往沒有任何不同，只是繼續增長和加速。我認為這是自然的。考慮到我們已經新增的客戶，我想我們還有更多的客戶需要擴展。所以我們補充說，客戶基本上需要。

Quest's core DNA is we're problem-solving company. We address client pain points. And as they bring them to us, we try to develop something that'll do exactly that. And that's where a lot of our new service lines come from.

Quest 的核心 DNA 是我們是一家解決問題的公司。我們解決客戶的痛點。當他們把它們帶給我們時，我們嘗試開發一些能夠做到這一點的東西。這就是我們許多新服務線的來源。

We don't typically greenfield by adding a service line and go out and hope that somebody will buy it. We typically add services when there's already an existing demand within our clients. And so mostly that's been in the industrial side with some of those really gritty kind of stuff like pond, cleanings and stuff like that.

我們通常不會透過添加服務線來進行開發，然後出去希望有人會購買它。當我們的客戶已有需求時，我們通常會添加服務。所以大部分都是在工業方面，有一些非常棘手的東西，像是池塘、清潔之類的東西。

It's stuff that's not traditional waste, but it's really a pain point for clients. And I think we mentioned in my remarks, one of the advantages we have for these large corporate clients is we help them get consistent compliance and execution on a lot of these activities because we're able to do them centrally for them and report back centrally. And then they make sure that they know that these -- that's why it's a pain point typically, right because it's not being done that way. And we have the ability to do that, and it's been helpful.

這些東西不是傳統的浪費，但對顧客來說確實是個痛點。我想我們在發言中提到，我們為這些大型企業客戶提供的優勢之一是我們幫助他們在許多此類活動中獲得一致的合規性和執行力，因為我們能夠集中為他們完成這些活動並集中報告。然後他們確保他們知道這些——這就是為什麼它通常是一個痛點，因為它沒有這樣做。我們有能力做到這一點，而且這很有幫助。

As far as the percentage goes, I think we talked about a percentage in the past of growth on the single --

就百分比而言，我認為我們過去討論過單一增長的百分比--

Mid-single digits.

中個位數。

Mid-single digits. As a percentage, we anticipate at least that on a go-forward basis. It could be more. We're hopeful. But the runway looks pretty good for us, Aaron, on that expansion with those existing clients.

中個位數。從百分比來看，我們至少預期未來會出現這種情況。還可以更多。我們充滿希望。但對於我們亞倫來說，在與現有客戶的擴張方面，跑道看起來相當不錯。

Great. That's good to hear. Thanks for the color, guys. I'll turn it over.

偉大的。很高興聽到這個消息。謝謝你們的顏色。我會把它翻過來。

Thank you, Aaron.

謝謝你，亞倫。

Greg Kitt, Pinnacle Fund Services.

格雷格·基特（Greg Kitt），Pinnacle 基金服務公司。

Hi Ray and Brett. Congratulations on a good quarter. Just on the six new wins that you announced on the Q4 earnings call, it sounds like they all are onboarded now and will start contributing in the second quarter but didn't contribute in the first quarter. Was that right?

嗨，雷和布雷特。恭喜您度過了一個美好的季度。就您在第四季度財報電話會議上宣布的六項新勝利而言，聽起來他們現在都已加入，並將在第二季度開始做出貢獻，但在第一季沒有做出貢獻。是這樣嗎？

Hey, Greg, this is Brett. I'll take that. Yeah, most of them or we have won that won't be onboarded until Q3, of the Q4 wins that you mentioned. Yeah. We talked about them being Q1 wins subsequent to Q4?

嘿，格雷格，這是布雷特。我會接受的。是的，他們中的大多數或我們已經獲勝，直到第三季度，你提到的第四季度的勝利才會加入。是的。我們討論過他們是 Q4 之後 Q1 的勝利？

Yeah, in the Q4 call.

是的，在第四季的電話會議中。

Yeah.

是的。

Okay, great. And is that one customer, the eight-figure customer or is that one of the smaller five?

好的，太好了。那是一位客戶、八位數的客戶還是較小的五個客戶之一？

It's one of the smaller five.

它是較小的五個之一。

Okay, great. And then as we think about the other customer win that you announced after the Q4 earnings call, is that customer -- can you help us understand how to think about that onboarding?

好的，太好了。然後，當我們想到您在第四季度財報電話會議後宣布的另一個客戶勝利時，您能否幫助我們了解如何考慮該客戶入職？

That's kind of the beginning of Q3.

這就是第三季的開始。

Mid-Q3.

第三季中期。

Mid Q3 on that one, Greg. It's not going to be a ramp so much. The good news is that it should start pretty much full bore. The bad news is it just takes a while to get it all the obligations taken care of and start generating the revenue.

格雷格，第三季中期。它不會是一個坡道那麼多。好消息是它應該幾乎全速啟動。壞消息是，需要一段時間才能履行所有義務並開始產生收入。

Great. Thank you very much. Maybe you can help me understand how to think about some of the investments that you're making in bringing on all of these customers. You talked about some of that. But winning all these customers is one thing you've done a great job. And how confident are you in your ability to get all these customers onboarded? And why are you so confident if you are -- that you're going to get everybody onboarded and provide a really good service?

偉大的。非常感謝。也許您可以幫助我了解如何考慮您為吸引所有這些客戶所做的一些投資。你談到了其中一些。但贏得所有這些客戶是您做得很好的一件事。您對吸引所有這些客戶加入的能力有多大信心？如果您願意讓每個人都加入並提供真正優質的服務，為什麼您如此有信心？

Yes, I'll take that, Greg. I will tell you. It's an excellent question, and it's a year or so ago. I might have had a more difficult time answering o. Be honest, we've made some really good investments structurally in bringing on some talent that is very experienced and primarily focused on onboarding implementation of programs with existing and new clients. So we have an expansion there.

是的，我會接受的，格雷格。我會告訴你。這是一個很好的問題，而且是大約一年前的事了。我可能很難回答o。老實說，我們在結構上進行了一些非常好的投資，引進了一些經驗豐富的人才，主要專注於為現有和新客戶實施專案。所以我們在那裡進行了擴張。

And then also it coincided -- it is coinciding with in advancing in some of our tech technology and our ability internally with our systems development. So when you combine the human capital and technology advancement, we're in a much, much better position to be able to onboard significant clients today than we would have been a couple of years ago.

然後它也重合了——它與我們的一些技術技術和我們內部系統開發能力的進步相一致。因此，當你將人力資本和技術進步結合起來時，我們今天能夠比幾年前更好地吸引重要客戶。

So that's kind of the investment we made, and the timing has been good. And it's the time were growing; it's the time were best equipped to handle the growth. So that's kind of where we are.

這就是我們所做的投資，而且時機很好。正是我們成長的時刻；現在是我們最好準備好應對成長的時候了。這就是我們現在的處境。

Thank you. My last question. Sometimes I feel like the public market can be what have you done for me lately. And so you went six customers in Q1, and hey, guess what it's like to 45 days later? You won one more customer. You are going to win five more shortly.

謝謝。我的最後一個問題。有時我覺得公共市場就像你最近為我所做的那樣。因此，您在第一季吸引了 6 位客戶，嘿，猜猜 45 天後會是什麼樣子？您又贏得了一位客戶。很快您還將贏得另外五場比賽。

I think Q1 was an unusual amount of wins in your onboarding all of the known. So we should start to see the fruit of those customer relationships starting in Q2 and over the rest of the year. You talked about the pipeline being strong. Maybe help us understand how you think about where the pipeline is today versus a year ago. I heard increase in number, but also quality and size. How do you feel about your ability to close additional new customers over the rest of the year?

我認為第一季在所有已知的入職中取得了不同尋常的勝利。因此，我們應該從第二季開始以及今年剩餘時間開始看到這些客戶關係的成果。您談到管道很強大。也許可以幫助我們了解您如何看待今天與一年前的管道狀況。我聽說數量有所增加，但品質和規模也有所增加。您對今年剩餘時間內吸引更多新客戶的能力有何看法？

Hi. Thanks. I appreciate that. I feel really good about it, but I want to address your first remark to exist so on target. We've talked a lot about the sales cycle in this space. We're a small company that sells to large companies. And this is typically long sales cycles.

你好。謝謝。我很欣賞這一點。我對此感覺非常好，但我想解決你的第一句話，因為它是存在的。我們已經討論了很多關於這個領域的銷售週期的問題。我們是一家向大公司銷售產品的小公司。這通常是很長的銷售週期。

So if anybody's just extrapolating by the week or the day or the month of the hour on new account, that's probably not the way to calculate. So I appreciate their recognition. So really what we do is we tried as best as we can to take that pipeline and move it down the funnel. So if there's an inherent lumpiness in bringing new accounts on board, I know that you guys have been with us will understand that.

因此，如果有人只是根據新帳戶的一周、一天或一個月的時間進行推斷，那麼這可能不是計算方法。所以我很感謝他們的認可。因此，我們真正要做的就是盡最大努力將這條管道移至漏斗中。因此，如果在引入新客戶方面存在固有的障礙，我知道你們一直在我們身邊會理解這一點。

As far as the pipeline goes, it's significantly larger today than it was a year ago. And I think the quality goes two ways. So I said larger in size and in quality. There're two aspects of quality that I think are important. One is really the type of customer itself. This is the kind of customer that's aligned with our with our goals and our targets. Two is how aligned -- well it is the alignment.

就管道而言，今天的管道規模比一年前大得多。我認為品質有兩個面向。所以我說尺寸更大、質量更大。我認為品質有兩個方面很重要。一是客戶本身的類型。這種客戶與我們的目標和目標一致。二是如何對齊——嗯，就是對齊。

Two is, how close are they and how valuable are they as a client themselves. And so I guess it's a -- I feel in a comparison. I think on both sides, we've got more of them, and we think that they're very strong. And the thing about high quality clients, Greg, is a lot of people want -- lot of companies want those guys. They're not out there just hoping somebody will call on them.

二是，他們與客戶的關係有多密切，以及他們作為客戶本身的價值有多大。所以我想這是一個——我覺得在比較中。我認為雙方都有更多的人，而且我們認為他們非常強大。格雷格，關於高品質客戶的事情是很多人想要的——很多公司都想要這些人。他們並不是只是希望有人來拜訪他們。

So there's a lot of competition for those. And I feel like we're better equipped to date to be able to meet those needs and win those clients than we have been in the past.

因此，這些領域的競爭非常激烈。我覺得我們迄今為止比過去更有能力滿足這些需求並贏得這些客戶。

Thank you. If I can sneak one more in. You were able to discuss -- disclose UNFI is a customer win. And then this most recent customer wins sounds like it was in grocery, if I heard you correctly. Can you help us understand, is there an immediate opportunity for Proganics with that new customer or is that kind of similar to UNFI that that's an opportunity over time?

謝謝。如果我能再偷偷溜進去一次就好了。你們能夠討論——披露 UNFI 是客戶的勝利。如果我沒聽錯的話，最近這位顧客的勝利聽起來就像是在雜貨店。您能否幫助我們了解一下，Proganics 是否有立即與該新客戶合作的機會，或者與 UNFI 類似，隨著時間的推移，這是一個機會？

There's an existing, what we would call, a more traditional food waste program going on with that existing customer. So the opportunity for Proganics is to be implemented in that organization and expand the existing program. So It won't really be a growth of volume or revenue by bringing in, but an improvement or enhancement of the program.

有一個現有的，我們稱之為，一個更傳統的食物浪費計劃正在與現有客戶一起進行。因此，Proganics 的機會是在該組織中實施並擴展現有計劃。因此，引入並不是真正帶來銷售或收入的成長，而是對專案的改進或增強。

What I'm saying is they're already very, very strong company and food diversions. But they don't have the advantage that program. We think it's going to be really helpful for on a go forward basis. And what was your other question relative to that? I'm sorry.

我想說的是，他們已經是非常非常強大的公司和食品轉移。但他們不具備該計劃的優勢。我們認為這對未來的發展非常有幫助。與此相關的其他問題是什麼？對不起。

I think it was just around the opportunity for is Proganics going to turn on now and or is that more of a longer term opportunity? So I think you answered it.

我認為這正是 Proganics 現在啟動的機會，或者這更像是一個長期機會？所以我想你已經回答了。

Yes, it's an enhancement to an existing one. I wanted to make sure that I was clear there. With UNFI, I guess what I'm saying is that we're already -- we're going to start with all the business. Proganics will be an implementation that would enhance an existing food waste program for them.

是的，這是對現有產品的增強。我想確保我在那裡很清楚。對於 UNFI，我想我想說的是，我們已經——我們將從所有業務開始。Proganics 將是一項增強現有食物浪費計畫的實施方案。

Thank you very much and thanks for your hard work.

非常感謝並感謝您的辛勤工作。

Thank you.

謝謝。

Nelson Obus, Wynnefield Capital.

納爾遜·奧布斯，溫尼菲爾德資本。

Hi there. I'm curious, what percentage in terms of the clients you have is itemization of exactly how you recycle so the client can use that for ESG purposes. Is that the normal part or is this just something you're adding as we move forward?As a

你好呀。我很好奇，您所擁有的客戶中，有多少比例是詳細列出您的回收方式，以便客戶可以將其用於 ESG 目的。這是正常的部分還是這只是您在我們前進過程中添加的內容？一個

When you say itemization, you mean the data reporting for them.

當您說逐項列出時，您指的是他們的數據報告。

Is that exactly -- the data of where their waste wound up that they can utilize in terms of the sustainable. Is that a normal part of the contractor or an add-on?

這正是他們可以可持續利用的廢棄物最終去向的數據嗎？這是承包商的正常部分還是附加組件？

It's part of our sales pitch, Nelson, to be honest with you because we think it's a differentiator for us. And I think a lot of our prospects and clients don't even know it's available until we share it with them. So it's an enhancement. And we offer it high every time because it's a differentiator. So we have a lot of usage. And as we bring our new clients, we find that the demand for it is more. So every year than it was a year before.

尼爾森，老實說，這是我們銷售宣傳的一部分，因為我們認為這對我們來說是一個差異化因素。我認為我們的許多潛在客戶和客戶甚至不知道它是可用的，直到我們與他們分享。所以這是一個增強。我們每次都提供很高的價格，因為它是一個差異化因素。所以我們有很多用途。當我們帶來新客戶時，我們發現對其的需求更多。所以每年都比前一年好。

Okay. So it's trending basically.

好的。所以基本上是趨勢。

Yeah, it's trending up for sure.

是的，趨勢肯定是上升的。

I'm a little confused in the compacted world. Now that you've got what seems to be a growing number of compactors, is this something that is a separate revenue stream or is it part and parcel of the contract that you signed with the individual customers?

我對這個緊湊的世界有點困惑。現在您擁有的壓實機數量似乎不斷增加，這是一個單獨的收入來源還是您與個人客戶簽署的合約的重要組成部分？

It's. A separate revenue stream, Nelson and the contract has different terms. Typically, it's a longer term because you're putting a capital asset on the ground to go do that. So the economics -- that's part of the economics, longevity. When these things hit a contract, the renewal rates are extremely high. They retain typically for multiple renewals on a five-year agreement, is the traditional terms for these. So that's separate from the waste contract in and of itself.

它是。獨立的收入來源，尼爾森和合約有不同的條款。通常，這是一個較長的期限，因為你必須投入資本資產來做到這一點。所以經濟學——這是經濟學的一部分，長壽。當這些東西簽訂合約時，續約率非常高。他們通常保留五年協議的多次續約，這是這些協議的傳統條款。因此，這與廢物合約本身是分開的。

So it seems like you're approaching 300 compactors. At what point will be a differentiator in terms of the P&L.

看來您的壓實機數量已接近 300 台。什麼時候將成為損益表的差異化因素。

Well, that's a good question. We just acquired, it's actually closer to 400, I think, at this point.

嗯，這是個好問題。我們剛剛收購，我認為此時實際上已經接近 400 家了。

Okay.

好的。

And the most recent acquisition really doesn't really start impacting until, well, Q2. So as a differentiator, you should start seeing it, and what mostly you'll see it on the back half of the year, Q3 and Q4 based on when we implemented.

最近的收購直到第二季才真正開始產生影響。因此，作為一個差異化因素，您應該開始看到它，並且您將在今年下半年、第三季和第四季看到它，具體取決於我們實施的時間。

Now you don't have a lot of bad debt expense, but it was up meaningfully in the quarter. I'm just -- what are your thoughts about that? And how do you -- I know you build people a month in advance, but the DSOs go beyond that, but either flag that you look for to make sure that people come across with what they owe?

現在你沒有太多的壞帳費用，但它在本季度大幅上升。我只是──你對此有何看法？我知道你會提前一個月培養人員，但 DSO 的範圍遠不止於此，但你要尋找任何一個標誌來確保人們得到他們所欠的東西？

Hey, Nelson. This is Brett. I'll take that one. Yeah, bad debt was up, mostly related to just the fact that AR was up year over year. We do have a couple of things we're reserve and a little bit more for, bu nothing significant. Most of it's just formulaic.

嘿，納爾遜。這是布雷特。我會接受那個。是的，壞帳增加了，主要與 AR 逐年增加有關。我們確實有一些保留的東西，還有更多的東西，但沒什麼重要的。大部分只是公式化的。

In terms of just DSOs in general, as we mentioned on the call -- in the prepared portion, we didn't finish the quarter as strongly as we would have liked. We've done a lot early in the year, and unfortunately, it didn't quite materialize. I'm excited about while we're already a month into Q2, but we've made some organizational changes to realign focus there.

就一般 DSO 而言，正如我們在電話會議中提到的那樣，在準備部分中，我們沒有像我們希望的那樣強勁地完成本季。我們在今年年初做了很多工作，但不幸的是，它並沒有完全實現。我很興奮，雖然第二季已經過去一個月了，但我們已經進行了一些組織變革以重新調整重點。

We've enhanced some reporting, increased visibility, driving some more accountability there. So I'm really excited about the progress we've made. It didn't quite show up in the Q1 numbers, but I think I'm excited about what we're going to be able to produce in Q2.

我們加強了一些報告，提高了可見性，推動了更多的問責制。所以我對我們所取得的進展感到非常興奮。它並沒有完全體現在第一季的數據中，但我想我對我們在第二季能夠生產的產品感到興奮。

Fine. Last question. In the past you've quantified some of the SG&A savings that would flow from IT enhancement. I'm just curious, the SG&A is moving up a little bit, not a lot. But do you -- how much of this is capitalized and how much is expense as we move forward.

美好的。最後一個問題。過去，您已經量化了 IT 增強帶來的一些 SG&A 節省。我只是好奇，SG&A 上漲了一點，而不是很多。但是，隨著我們的前進，其中有多少是資本化的，有多少是費用。

In terms of the IT spend?

就 IT 支出而言？

Yeah.

是的。

Yeah, as we go forward, we'll have less and less capitalized that will just be ongoing maintenance. So we've talked, we're pretty close to having a lot of this stuff fully ramped up. So those expenses will be coming down.

是的，隨著我們的前進，我們的資本將越來越少，而這只是持續的維護。所以我們已經討論過，我們非常接近讓很多這樣的東西全面啟動。所以這些費用將會下降。

And as you mentioned, Q2, we're expecting a little bit of increased SG&A as -- we've got to build some additional expenses to support the growth the new wins. But when we get into Q3 and Q4, we'll be in a better position to talk about the savings that we're expecting. We're certainly excited about that portion.

正如您所提到的，第二季度，我們預計 SG&A 會增加，因為我們必須增加一些額外費用來支持新勝利的成長。但當我們進入第三季和第四季時，我們將能夠更好地談論我們預期的節省。我們當然對這部分感到興奮。

And I would assume by fiscal '25, the rate of change will be lower if any depending on how you grow. Is that fair?

我假設到 25 財年，變化率將會更低（如果有的話），具體取決於您的成長方式。這樣公平嗎？

In terms of flow-through rates? Absolutely on flow-through rates. Continue to improve, especially into next year as we've got a full year of all of these initiatives and savings.

就流通率而言？絕對取決於流通率。繼續改進，尤其是明年，因為我們已經完成了所有這些舉措和節省了一整年。

Yes, go ahead. That's all I have.

是的，繼續吧。這就是我所擁有的一切。

And there are no further questions on the line at this time. I'll turn the call to Ray Hatch for any closing comments.

目前線路上沒有其他問題。我會將電話轉給雷‧哈奇 (Ray Hatch)，徵求結案意見。

Thank you, operator. And most importantly, thanks to all you out there and your interest in Quest and taking the time to be on the call and hear our story. I always, I make note to remind myself, I want to thank the Quest team.

謝謝你，接線生。最重要的是，感謝大家對 Quest 的興趣，並抽空接聽我們的故事。我總是記下提醒自己，我要感謝 Quest 團隊。

I know a number of you are on the call, all of these folks who have continued to work diligently and help us execute in our plan to be much better supplier to our customers. And it's just tremendous to watch them do that. And I'm greatly appreciative.

我知道你們中的許多人都在電話中，所有這些人都在繼續努力工作，幫助我們執行我們的計劃，成為我們客戶更好的供應商。看到他們這樣做真是太棒了。我非常感激。

The initiatives that we've been in place, some of these initiatives over the course of years are starting to really show the traction. And I think we're at, the operative word is inflection point. I'm really excited as to the progress we've shown now, but mostly and more importantly, it's what we have in front of us.

我們多年來一直採取的舉措，其中一些舉措已經開始真正顯示出吸引力。我認為我們正處於一個關鍵字，那就是轉折點。我對我們現在所取得的進展感到非常興奮，但最重要的是，這就是我們面前的一切。

It's tremendous to scale. The scalable leverage piece that we're building along with the ability to provide new clients along with the ability that the team is putting together with new service lines to grow with existing clients, it's all pointing forward and the momentum is great. So I just look forward to keeping all of you up to date on the quarters to come. And again, thank you for your faith and interest in Quest.

其規模是巨大的。我們正在建立的可擴展槓桿部分，以及為新客戶提供服務的能力，以及團隊與新服務線結合起來以與現有客戶一起成長的能力，這一切都指向未來，而且勢頭強勁。因此，我期待著向大家通報未來幾季的最新情況。再次感謝您對 Quest 的信任與興趣。

This does conclude today's program. Thank you for your participation, and you may now disconnect.

今天的節目到此結束。感謝您的參與，您現在可以斷開連接。