Welcome to the Hackett Group Second Quarter Earnings Conference Call. Your lines have been placed on a listen-only mode until the question-and-answer session. Please be advised the conference is being recorded. Hosting tonight's call are Mr. Ted Fernandez, Chairman and CEO; and Mr. Rob Ramirez, Chief Financial Officer. Mr. Ramirez, you may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us to discuss Hackett Group Second Quarter results. Speaking on the call today and to answer your questions are Ted Fernandez, Chairman and CEO of Hackett Group; and myself, Robert Ramirez, Chief Financial Officer. A press announcement was released over the wires at 4:15 p.m. Eastern Time. For a copy of the release, please visit our website at www.thehackettgroup.com. We will also place any additional financial or statistical data discussed on this call that is not contained in the release on the Investor Relations page of our website. Before we begin, I would like to remind you that in the following comments and in the question-and-answer session, we will be making statements about expected future results which may be forward-looking statements for the purposes of the federal securities laws. These statements relate to our current expectations, estimates, and projections and are not a guarantee of future performance. They involve risks, uncertainties, and assumptions that are difficult to predict and which may not be accurate, especially in light of COVID-19. Actual results may vary. These forward-looking statements should be considered only in conjunction with the detailed information, particularly the risk factors contained in our SEC filings. At this point, I would like to turn it over to Ted.

Thank you, Rob, and welcome, everyone, to our second quarter earnings call. As we normally do, I will open the call with some overview comments on the quarter. I will then turn it back over to Rob to review our detailed operating results, cash flow, and also provide our quarterly guidance. We will then review our market and strategy-related comments, after which we will open it up to Q&A. Consistent with the momentum we experienced through last year, strong demand for all of our services continued into the second quarter of 2022. Correspondingly, this afternoon, we reported total revenues of $75.9 million and revenues before reimbursement of $74.8 million and adjusted earnings per share of $0.38, above our quarterly guidance and up strongly on a year-over-year basis when you exclude the nonrecurring SAP software sales, which we highlighted on our second-quarter earnings call last year. Our results were driven by a 24.5% revenue growth from our S&BT Group, which also resulted in a significant year-over-year margin expansion of over 450 basis points. The margin expansion was driven by our strong SBT consulting performance and by the growth and increasing revenue mix of our higher-margin research advisory and IP data service offering. This highlights the reasons why we have accelerated our investments in our IP service area. Of special note, in June, we finalized a three-year multimillion-dollar agreement with one of our IPaaS relationships that we have been working on for quite a while. This contract will ramp up throughout the balance of the year until we reach our targeted contract volumes. We believe this relationship is transformative in many ways. It demonstrates our ability to support a global partner efficiently and in many ways on a self-service basis, utilizing our market-leading benchmarking, benefit case and value realization IP, which are critical components of our Quantum Leap and our Digital Transformation Platforms. It also expands our data capture, the industry-served segments we serve and our global reach beyond our market-leading capabilities. All are very valuable to our long-term revenue growth and profitability. It's also worth noting that we continue to be actively engaged in contracts and pilot discussions with several large software and services companies to bolster their business as case development and value selling as well as value realization efforts. Our research and intelligence programs are highly complementary to our IPS service offerings to partners that desire to license our IP and brand permission. They leverage our IP and platforms and also result in strong downstream opportunities for our digital transformation services. The SBT Group revenue growth rate was partially offset by the results of our EEA group, which grew 2.5% in the quarter, excluding the software sale transaction. The EBITDA growth was impacted by the pipeline we built in our historically high-performing SAP offering. The EEA group has a tougher comp in Q3 and is forecasted to be down on a year-over-year basis, before we expect it to level off in Q4 and resume its year-over-year growth thereafter. Our international group, which was down in the quarter, is expected to be up in Q3 consistent with adjusting the European market conditions. In summary, large SBT engagements, along with increasing leverage of our higher-margin IP-based benchmarking research advisory and software, as well as the efficiencies from our virtual sales and delivery business model are favorably impacting our performance. We expect the accelerated growth of our IP offerings to continue, which should allow us to perform at the higher end of our long-term growth and profitability targets for the year. It is clear that the investments that we made to fully digest the development of our digital platforms, which include our global benchmarking platform and our proprietary Hackett Digital Transformation Platform, or DTP, are starting to pay off. These platforms are allowing us to develop new relationships with software and services providers across the enterprise. On the balance sheet side, our ability to generate strong cash flow from operations has allowed us to increase our dividend in our buyback program. We have discussed in the last few calls that we continue to plan to be more aggressive with our balance sheet and expand our current credit facility to fund acquisitions and buy back stock while continuing to invest in our business. With that said, let me ask Rob to provide details on our operating results, cash flow and also comment on the outlook. I will make additional comments on strategy and market-related conditions following Rob's comments.

Thank you, Ted. As I typically do, I'll cover the following topics during this portion of the call. I'll cover an overview of our 2022 second quarter results, along with an overview of our related key operating statistics. I'll cover an overview of our cash activities during the quarter, and I will then conclude with a discussion on our financial outlook for the third quarter of 2022. For purposes of this call, I will comment separately regarding the revenues of our Strategy and Business Transformation Group, S&BT, our ERP, EPM, Analytics Solutions Group called EEA; our International Group; and the total company. Our Strategy Group includes the results of North America IP service offerings, our research advisory programs and benchmarking services and our business transformation groups. Our EEA Solutions group includes the results of our North America, Oracle, SAP solutions, and OneStream offerings. Our International Group includes the results of our S&BT and our EEA resources that are based primarily in Europe. Please note that we will be referencing revenues before reimbursements in our discussion. Reimbursable expenses are primarily project, travel, and expenses passed through to our clients that have no associated impact on our profitability. Through our call today, we'll also reference certain non-GAAP financial measures, which we believe provides useful information to investors. We included reconciliations of GAAP to non-GAAP financial measures in our press release filed earlier today and will post additional reconciliations based on the discussions from this call to the Investor Relations page of the company's website. Before I move to our second quarter results, I would like to remind everyone that the second quarter of the prior year benefited on a GAAP and non-GAAP basis from a nonrecurring $5.3 million or $0.09 per diluted share software sales transaction. We highlighted the impact of this transaction on the results during our prior year second quarter call and in my comments today, I'll provide financial information with and without the software sales transaction. For the second quarter of 2022, total revenues were $75.9 million, up 4% when compared to the prior year and up 12% when excluding the prior year software sales transaction. Our revenues before reimbursements increased to $74.8 million, up 2% when compared to the prior year and up 10% when excluding the prior year software sales transaction. This is above the high end of our revenue guidance range as we continue to see strong demand for our services throughout the quarter. The second quarter 2022 reimbursable expense ratio on revenues before reimbursements was 1.6% as compared to 0.7% in the prior quarter and 0.3% when compared to the prior year. We've experienced increased chronic permitted travel since the transition to our month-over-month model, but we do not expect this to return to pre-COVID levels. Our U.S. operations, which represented 92% of our revenues before reimbursements in the second quarter of 2022 were up 3% when compared to the second quarter of the prior year and up 12% when excluding the prior year software sales transaction. Revenues before reimbursements for our S&BT Group were $32.9 million, an increase of 24.5% when compared to the same period in the prior year, reflecting the continued growth since the second quarter of fiscal 2020. Revenues before reimbursements for our EEA Solutions group were $36.1 million, a decrease of 11% when compared to the same period in the prior year, but an increase of 2.5% when excluding the prior year nonrecurring software sales transaction. The year-over-year increase when excluding the software sales transaction was driven by large ERP and EPM, Oracle engagements and continued growth of our one implementation offerings, partially offset by the year-over-year decline of our SAP offerings, which are coming off strong 2021 results and continues to rebuild our pipeline leading to the completion of several large SAP engagements. Revenues before reimbursements for our International Group were $5.7 million, a decrease of 5% on a year-over-year basis. Company international revenues before reimbursement accounted for 8% of total company revenues before reimbursements in both the second quarter of 2022 and 2021. Approximately 20% of our total company revenues before reimbursements consists of recurring and subscription-based revenues, which include our research advisory, IP-as-a-service, multiyear benchmarks, and application-managed service contracts. Total company adjusted cost of sales, which excludes reimbursable expenses and non-cash stock compensation expense, totaled $43.2 million or 57.8% of revenues before reimbursements in the second quarter of 2022. This is compared to $41.4 million or 56.8% of revenue before reimbursements or 6.1% when excluding the impact of the prior year software sales transaction. Total company consultant headcount was 1,131 at the end of the second quarter of 2022 as compared to total company consultant headcount of 1,141 in the previous quarter and 1,037 at the end of the second quarter of 2021. The year-over-year increase was primarily the result of higher activities and increased utilization for contractors. Total company adjusted gross margin on revenues before reimbursements was 42.2% in the second quarter of 2022 as compared to the prior year of 43.2% or 38.9% when excluding the impact of the prior year software sales transaction. The year-over-year gross margin improvement on revenues before reimbursements in S&BT, as Ted mentioned, was over 450 basis points. This is a combination of the strong performance from the transformation, consulting, and our IP-based offerings. This group now represents 44% of our total company revenues before reimbursements as compared to 39% in the second quarter of the prior year when excluding the nonrecurring software sales transaction. Adjusted SG&A was $14.8 million or 19.7% of revenues before reimbursements in the second quarter of 2022. This is compared to $14.4 million or 19.7% in the prior year. Excluding the impact of the prior year software sales transaction, SG&A in the second quarter of the prior year was $13.3 million or 19.6% of revenues before reimbursements. The year-over-year absolute dollar increase is primarily due to our increased investment in research advisory sales and product development and marketing costs in the current year. Adjusted EBITDA was $17.6 million or 23.6% of revenues before reimbursements in the second quarter as compared to $18 million or 24.6% of revenue performing business in the prior year. Excluding the prior year second-quarter software sales transaction, EBITDA for the prior year was $13.9 million or 20.5% of revenues before reimbursements. GAAP diluted net income per common share was $0.32 for the second quarter of both 2022 and the second quarter of 2021. Adjusted net income for the second quarter of 2022 totaled $12.1 million for adjusted diluted net income per common share of $0.38, which is above the high end of our earnings guidance range. Excluding the prior year software sales transaction, this represents a year-over-year increase of 27%. Our adjusted net income for the second quarter was favorably impacted by approximately $1.5 million due to foreign currency movements in the quarter, but was negatively impacted by $0.01 due to the utilization of a GAAP effective tax rate on adjusted earnings, which was 27.5% as compared to the 25% that was utilized for the second quarter guidance. We've decided to move to a GAAP effective tax rate for adjusted net income reported purposes, and we utilized the GAAP effective tax rate in the first quarter of 2022. If our reported adjusted net income for the first quarter would have increased by $0.01. This compares to adjusted net income of $12.7 million or adjusted diluted net income per common share of $0.39 in the second quarter of the prior year. Adjusted net income for the prior year included an effective tax rate of 25.7% on a GAAP basis and was favorably impacted, as already discussed, by $0.09 per share due to the software sales transaction already mentioned. The company's cash balances were $61.7 million at the end of the second quarter of 2022 as compared to $47.8 million at the end of the previous quarter. Net cash provided by operating activities in the quarter was $18.2 million, primarily driven by an income adjusted for non-cash activity, increases in accrued expenses and income tax liabilities, and decreases in prepaid assets, partially offset by decreases in accounts payable and contract liabilities. Our DSO or day sales outstanding at the end of the quarter was 59 days as compared to 61 days at the end of the previous quarter. Our remaining stock repurchase authorization at the end of the quarter was $10.6 million. At its most recent meeting, the company's Board of Directors declared that the third quarter dividend of $0.11 per share for shareholders of record on September 23, 2022, to be paid on October 7, 2022. I'll now discuss our outlook and guidance for the third quarter, consistent with seasonal third quarter trends, we expect the impact of the additional U.S. holiday and the typical increase in time-off due to summer vacation in the U.S. and even more meaningfully in Europe to unfavorably impact available days by approximately 3% on a sequential basis. The company estimates total revenue before reimbursements for the third quarter of 2022 to be in the range of $70.5 million to $72.5 million. On a sequential basis, we expect S&BT and international to be up and EEA to be down as it continues to rebuild backlog from the transition of several large engagements. We estimate adjusted diluted net income per common share in the third quarter of 2022 to be in the range of $0.34 to $0.36, which assumes an effective GAAP tax rate on adjusted earnings of 28%. The impact of moving to a GAAP effective tax rate for the third quarter is approximately $1.5 million. We expect adjusted gross margin on revenues before reimbursements to be approximately 42% to 43%. We expect adjusted SG&A and interest expense for the third quarter to be approximately $15 million. We expect third quarter adjusted EBITDA on revenues before reimbursements to be in the range of approximately 23% to 24%. We expect cash balances, excluding the impact of share buyback activity, to be up on a sequential basis. At this point, I'd like to turn it back over to Ted to review our market outlook and strategic priorities for the coming months.

Thank you, Rob. As we look forward, let me share our thoughts on the near and long-term demand environment and on the growth opportunity it offers for our organization. As I've mentioned many times in the last four to six quarters, although the pandemic created unprecedented demand disruption, it also created heightened awareness that accelerated demand for digital transformation initiatives. This means that digital innovation and enterprise cloud applications, analytics and infrastructure, workflow automation, and process mining are dramatically influencing the way businesses compete and deliver their services. Digital transformation is redefining all activities at an accelerated pace, forcing organizations to fundamentally change and adopt these capabilities in order to remain competitive. We also believe digital transformation will be critical for organizations to realize productivity improvement initiatives that may result from economic deceleration created by inflationary supply chain or geopolitical challenges in our client space. Organizations recognize the need to embrace digital transformation as the requirement to remain competitive, driving strong activity to technology-enabled transformation engagements, which requires a broad array of our capabilities. The increased digital transformation demand is also resulting in increased competition for experienced talent unlike we've ever seen in a very long time, and it clearly continued into the second quarter. We believe the emerging work-from-remote service delivery model should help us address our short-term recruiting and retention concerns as we hope to be able to attract associates from a broader pool of global candidates. Long term, we believe we are now on a path to our next normal results in a highly engaged client base with a remote sales and delivery model, which provides our clients and our associates with great personal flexibility to perform their deploying responsibilities. This will allow us to attract and retain talent that we have struggled to retain because of the demanding historical travel requirements of our industry. Strategically, we are accelerating our focus on our recurring high-margin IP-related services by increasing our sales and marketing and investment resources dedicated to this area. We have also started to launch a suite of new market intelligence programs that will help us effect and highlight the unique capabilities of software services providers across selected categories. Our goal is to launch three or four programs by year-end and further accelerate the number of new programs launched in 2023. We are absorbing these increased costs in our current results, but we believe that they have great potential to add high-margin recurring revenue. To this point, we expect our annualized contract values from recurring high-margin, research, and market intelligent high-class clients to increase by approximately 28% by year end. We have also seen increasing downstream revenues from current programs to our consulting services. So not only are they recurring and higher margin, but we're seeing great downstream activity from the research advisory and IP clients. With over 40% of our consulting services coming from our research advisory and benchmark offerings, simply put organizations who rely on our IP, research, and benchmarking services are also more likely to utilize our consulting services. We are also exploring strategic partnerships that will allow us to sophisticate our IP through new channels that will allow us to reach significantly beyond our current Global 1000 focus in a very efficient manner. We expect to launch the first of these relationships, which will result in new recurring high-margin revenue prior to the end of the year. We also will continue to redefine our global benchmarking leadership through the enhancements in Quantum Leap, our digital benchmark software-as-a-service solution, along with our digital transformation platform. These platforms allow us to deliver more information with significantly less client effort. It also allows clients to leverage our IP to create compelling benefit case assessments, accelerate process loan software configuration decisions, and track transformation initiatives through the life of their respective efforts. As I've said repeatedly, we believe that there are no comparable IP-led platforms in the market. As I've been mentioning on our calls, we have added a 20-minute demo to our Investor Relations page on our website so that investors can become more familiar with the capabilities of our platforms. Lastly, even though we believe we have the client base and the offers to grow our business, we continue to look for acquisitions and alliances that strategically leverage our IP and add growth, scale, and capability which can accelerate our growth. The example that I raised around syndicating research beyond Global 1000 is a perfect example of those pursuits. As always, let me close by congratulating our associates on our performance and by thanking them for their tireless efforts, and always urge them to stay highly focused on our clients and our people, no matter what challenges we may encounter. Those conclude my comments. Let me turn it over to our operator, and let us move on to the Q&A section of our call.

Thank you.

Thank you. Nice job on Q2. I wanted to talk a little bit about Q3, if we could. Traditionally, not necessarily a big change seasonally from Q2, obviously, last year was very unusual because of the one-time software sale. Can you talk about what's falling out? And I think Rob had suggested there were some large SAP pieces of business that we're finishing up. Can you just walk through that dynamic?

Yeah, George, there were a couple of scenarios. I'll speak with both separately. But one, as Rob mentioned, we have 3% fewer available days as you move from Q2 to Q3. But that's not really what's impacting the transition of our Oracle and SAP practices. Our SAP practice simply had, as you know, has been on a tear, and it's probably the highest performing group of our company over the last four to five years. But it did see a slowdown or I would just say some deals that started to light up with Q1 and that we expected to have in Q2, by the time we started Q3, they seem to be all coming to fruition in Q3 and will favorably impact the latter part of Q3, Q4, and that's why we speak to the fact that we believe some of that activity is leveling off. All those slightly different also had an outstanding Q1. We were working on a very, very significant engagement, which took a lot of time and attention from that group. I think to some extent, there was a little bit of distraction from it, but it happened. We absorbed that in our Q2 performance. It impacts Q3 because we're up against a tougher comp. But again, the overall activity of both of these groups is very strong, and we expect them both to be able to level off as we go into Q4 and then grow on a year-over-year basis thereafter. Obviously, George, we don't want to see that EEA performance offset any of the great success we're having in SBT.

Sure. So I wanted to talk about the IPaaS deal and potentially get some details on that. Is this the same customer that you had a pilot with previously? Can you just give us a sense of how they'll be using your IP?

The answer is we did have somewhat of a pilot. We have licensed our data, really static information across industries and across certain areas of the business over a two-year period, which allowed this organization to really validate the strength of taking the Hackett information and brand permission to market. It's clearly influenced the credibility of the benefit cases that they were presenting to their clients. And that, if you want to call it pilot with them ended, we were nearing the completion and launching of both our quantum leap and DTP capabilities, but not only the kind of the initial versions, but we were moving on to be able to take many of the capabilities of those platforms and be able to allow clients to use them commercially on a self-service basis. That led to lengthy negotiations with them as to specifically what capabilities within our platforms they wanted to use, and what kind of support they wanted. It's a very significant engagement. As I said, it expanded the industry coverage that we previously had in place based on the demand that they wanted to serve their very large global client base. But at the end of the day, they're utilizing our data and our benefit case assessments and Quantum Leap products to create, I'll call it value propositions for clients, leveraging our branded capabilities number one. Number two, they're leveraging our solutioning capability within DTP to then be able to actually prioritize exactly what kind of work needs to be done and how, which is another capability that's inside of our DTP platform. It also includes the utilization of the improvement monitor capabilities we have in our platform that allows clients to load their – once they've identified the performance initiatives that they believe they want to realize, they can load all of that information into our improvement monitor and use this project tracking with what we believe is very unique capabilities to be able to validate the value realization or value proposition they presented to their clients. It also includes access to our research and advisors so that they can come in and also stay very current with any of the issues that are being dealt across all of the executive advisory programs that we have. So very extensive, very significant. That's why I labeled it transformative.

Got you. One of the things for me, you mentioned that you're looking to work with someone who could syndicate your IP through new channels. Can you just give us a little better picture of what that might look like?

Yes. We were approached by a current firm that has a pretty unique platform, which provides market intelligence to its clients on a global scale with kind of a significant emphasis on the companies beyond the Global 1000. So we now have tried to identify the same capabilities across more of our IP. But in this scenario, we were offered an opportunity to simply license our data for a certain amount. And what we hope to be able to achieve with this relationship is to do something where we would do more revenue or profitability sharing. There's still a lot of work in that relationship that needs to be done, but it's clearly something that simply tells us something very significant, which is we do not need to limit ourselves to the clients that we're able to touch. And number two, we can use other channels that really value our brands and our capabilities to augment their capabilities and allow them to take our IP to market through those channels and for us to profit from it. So let's see if we're successful in launching that before the end of the year, that's our plan.

That was great. Thanks, guys.

Thanks, George.

Thank you. Our next question is from Jeff Martin with ROTH Capital Partners. You may go ahead.

Ted, could you provide us with some insight into what the profit growth implications for 2023 might be given the traction you're seeing with the IP-as-a-Service offering? Additionally, could you share your broader outlook regarding your long-term growth and profit profile for next year?

The transactions we are having can vary in size. They may not all be as significant as the largest we have, but we are engaged in discussions that I believe are comparable, regardless of whether they ultimately materialize. These discussions involve complex transactions, and their outcomes are uncertain. We've been in talks with several companies for a while now, and the capabilities we've developed to support our recently launched contract have bolstered our credibility and made our services more distinctive. I hope for continued success in this area. These engagements not only provide recurring revenue but also lead to multi-year contracts with high margins, as we are essentially licensing intellectual property and platform capabilities intended for limited support. While I can't provide specific guidance, I can say that each of these transactions is significant for our performance and positively impacts our gross margin. We also see the same potential with the upcoming market intelligence programs we plan to roll out, which include software and services intelligence initiatives mentioned in our last call. We expect to launch three or four of these programs by year-end and have enhanced the sales capabilities of that group, which we will continue to develop. Currently, we are bearing the costs, but the demand for our brand, its capabilities, and our database is strong. We are assessing the most effective ways to bring these offerings to market. Market intelligence programs represent one opportunity, and our IP-as-a-Service is unique to Hackett, as few others offer sales acceleration, value realization, and measurement tracking like we do. We are also exploring opportunities to syndicate research and design sales capabilities elsewhere, sharing contextualized IP and revenues from those endeavors. This appears to be a logical strategy for continuing the growth we've seen in our gross margin into 2023 as we expand these opportunities and launch new products. While I don't have a specific answer regarding IP or IPaaS as a service, I can say that each deal is meaningful. Additionally, last year, 40% of our consulting opportunities came from clients seeking research advisory or benchmarking services. Our goal is to grow the IP side and the programs we offer, which should structurally benefit our business and, ideally, drive positive effects in our consulting services as well. That's the combined approach we're aiming for as we move forward.

Great. That's helpful. And congratulations on the multiyear win there. The other question I had was on availability and retention capabilities of the consultants. SBT is growing very rapidly right now. It looks like that may take a little bit of a breather in Q3. But how are you balancing demand versus talent availability and how client or employee retention efforts going so far this year?

We have been dealing with above-average turnover for about six quarters now. While that's not ideal, the positive takeaway is that this turnover has allowed us to improve our capabilities in several areas. There are still some gaps in talent we want to fill, particularly in the EEA space. However, this situation has enabled us to significantly enhance our offshore leverage, especially in EEA, which has benefited our margins. Additionally, because we’re not requiring travel from Monday to Thursday, we can attract new associates from a wider talent pool, and we’ve had great success with this approach. Despite the increased turnover, I believe we’ve managed it effectively, which has provided us with more offshore leverage and facilitated the introduction of new capabilities to the organization. We're seeing more talent become available to us since we’ve relaxed travel demands compared to pre-COVID times.

Great. Thank you, Ted.

Thank you. The next question is from Vincent Colicchio with Barrington Research. You may go ahead.

Yes. Ted, any signs of economic headwinds in the EEA business, such as changes in sales cycles or less strength in pricing, things of that nature?

Well, I commented that the activity proposal of those groups remains strong. The impact that we had with SAP were really kind of pushes that you really can't correlate that to anything that was happening. It would have simply been too early. So I can't correlate it to that. And then the Oracle issues have been different. So our activity is strong. And look, we just need to close and start some of the deals and rebuild the pipeline, given that large momentum that we had coming off of the end of the year for SAP in Q1 with Oracle. So nothing that I can directly point to that is directly related to, I'll call it, the expected slowing of the economy. Obviously, that's required to avoid a recession.

And can you remind us, I apologize if I missed it, my connection is quite poor, what your priorities are in acquisitions?

The priorities have shifted somewhat. Given the focus on the IP-related area, I have dedicated much more time to it in the first half of this year compared to 2021. I would say that the focus has been on SBT. However, there are opportunities in EEA where, under the right circumstances and in the appropriate market, we would definitely consider what is presented to us.

And again, I apologize for my connection. Did you mention your pipeline of IP deals you're close to in terms of number of landing?

Yes. I think the point that I wanted to make, I don't want to say that they're close to landing, but we clearly are having more meaningful discussions with larger providers that have been engaged with us now for a while, some of which have left some earlier discussions in returned, and some who have been talking with us throughout the year. So we like to get some of those opportunities. So that was just the point that I'm making. I'm making that the pipeline for IPaaS opportunities is strong. That's probably the point I was trying to make.

And it sounds like you're seeing stronger than it's been in the past. Is that right?

What I'm trying to emphasize is the scale of the company. It is doing well with businesses that are likely to pursue larger deals. That’s how I would describe it.

Okay. And do you think that's just timing or competitive pressures are compelling them to move in that direction?

Well, it's not competitive pressure because I'm not sure someone has the capabilities that we're offering to these clients. So it's leverage up or start from scratch or build or leverage what you currently have in place. That's what we're seeing as the alternatives. So they just take time. You're getting involved and affecting the way somebody goes to market. So I hate to speak the time, especially since I was embarrassed that it took me so long to sign the one we just signed, which was significant and complex.

Okay. Thank you.

Thank you. At this time, I show no further questions. I would now turn the call back over to Mr. Fernandez.

I'd like to thank everyone for participating in our second-quarter earnings call and look forward to updating everyone again when we report the third quarter. Thank you.

Thank you. That does conclude today's conference. Thank you all for participating. You may disconnect at this time.