Innodata Inc Q3 FY2021 Earnings Call

Good day, and welcome to the Innodata Third Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Amy Agress. Please go ahead.

Thank you, Shelby. Good morning, everyone. Thank you for joining us today. Our speakers today are Jack Abuhoff, CEO of Innodata; and Mark Spelker, our CFO. We'll hear from Jack first, who will provide perspective about the business, and then Mark will follow with a review of our results for the third quarter. We'll then take your questions. First, let me qualify the forward-looking statements that are made during the call. These statements are being made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 as amended and Section 27A of the Securities Act of 1933 as amended. Forward-looking statements include, without limitation, any statements that may predict, forecast, indicate or imply future results, performance or achievements. These statements are based on management's current expectations, assumptions and estimates, and are subject to a number of risks and uncertainties, including without limitation, the expected or potential effects of the novel coronavirus, COVID-19, pandemic and the responses of governments, the general population, our clients and the company thereto; that contracts may be terminated by clients, projected or committed volumes of work may not materialize, acceptance of our new capabilities, continuing Digital Data Solutions segment reliance on project-based work and the primarily at-will nature of such contracts and the ability of these clients to reduce, delay or cancel projects; the likelihood of continued development of the market, particularly new and emerging markets that our services and solutions support continuing Digital Data Solutions segment revenue concentration in a limited number of clients; potential inability to replace projects that are completed, canceled or reduced; our dependency on content providers in our Agility segment, a continued downturn in or depressed market conditions, whether as a result of the COVID-19 pandemic or otherwise; changes in external market factors; the ability and willingness of our clients and prospective clients to execute business plans that give rise to requirements for our services and solutions; difficulty in integrating and deriving synergies from acquisitions, joint ventures and strategic investments; potential undiscovered liabilities of companies and businesses that we may acquire; potential impairment of the carrying value of goodwill and other acquired intangible assets of companies and businesses that we acquire; changes in our business or growth strategy; the emergence of new or growth in existing competitors; our use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, client, employee or company information or service interruptions and various other competitive and technological factors and other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission, including our most recent reports on Form 10-K, 10-Q and 8-K and any amendments thereto. We undertake no obligation to update forward-looking information or to announce revisions to any forward-looking statements except as required by federal securities laws, and actual results could differ materially from our current expectations. Thank you. I will now turn the call over to Jack.

Thanks, Amy. Good morning, everyone. We're very happy to be here today with you this morning, and I thank you for joining us. Today, we're pleased to announce that we achieved 20% revenue growth in Q3. More importantly, we anticipate this growth to accelerate in Q4 as well as next year. Our confidence stems from the new deals we're signing, the traction we're getting in the market with both existing and new capabilities. The productivity ramp-up we're anticipating from our expanding sales force and current expansions and anticipated further expansion of several of our new key customer relationships. Q3 represented our fifth straight quarter of year-over-year growth. Our incremental revenue growth has been highly profitable. 71% of our incremental revenue in Q4 flowed through directly to our gross margins, thanks to strong operating leverage on fixed costs and effective cost control. We're essentially funneling this incremental gross margin back into the business in some very exciting ways that we believe will accelerate growth while at the same time, we're carefully managing free cash flow. I liken our business to a flywheel. A flywheel starts with a bunch of small turns, but as it gains momentum, the flywheel builds on itself and produces more and more positive results. We believe that's the effect we're seeing in our business. We believe one of the best investments for our internally generated cash is organic growth in our business. We anticipate that the growth expenditures will continue to be funded through internally generated cash flow and internal resources. It's worth pointing out that even with significant growth expenditures, our cash has increased to almost $21 million at the close of Q3, up from $17.6 million at the end of last year. On our Q2 earnings call, we said that we anticipated announcing important new wins and important new capabilities. Indeed, we announced the 5-year data and SaaS software subscription deal that we anticipate will yield $11 million of revenue with one of the world's largest banks, who is our charter customer for a new SaaS software product. We also announced the $3.8 million win with new customers supporting its AI predictive model development around medical information. We're seeing opportunities to expand both of these relationships further over the next several months. These deals represent both important new wins and important new capabilities. On top of these wins, we announced that we are now firmly engaged with the second large Silicon Valley tech company, having quickly won engagements that we anticipate will yield approximately $1.8 million of revenue around content moderation, intelligent document understanding, computer vision, and health records management, again, with opportunities for expansion. We believe these large tech companies often spend tens of millions of dollars, some even over $100 million on AI initiatives. So getting our foot in the door opens up significant opportunities for expansion. Lastly, we announced that Agility, our AI-driven SaaS industry platform for corporate communications professionals had been named Momentum leader in the $4.5 billion PR software market. We launched an exciting new Agility release that features several innovative AI-enabled workflows. I have never seen this kind of momentum in our business. AI is increasingly seen as strategic by companies across verticals and as a result, our services are increasingly relevant. Here's the key. Every AI initiative begins and ends with data. AI applications are trained with large quantities of data, not programmed in the traditional sense. So when they perform well, it's because they were trained with high-quality data. So whether we're creating high-quality AI training data for data science teams at large Silicon Valley tech companies or building and managing AI algorithms for financial services companies or offering AI-enabled SaaS platforms to subscribers, the core ingredient, the sine qua non, if you will, is high-quality data which is what we've built a 30-year reputation on. To capitalize on the significant opportunity, we're focusing our investments on sales force expansion and new product development. This year, we've been executing a plan to expand our sales force from 19 sales executives at the beginning of the year to 110 at the end of the year. This is close to a 6x expansion. As of October 1, we were at 82 sales executives. So we're well on our way. Even though it's a tight labor market, we're finding some very high-quality people out there. Of the 91 heads we've added or are planning to add to the sales force, 85 are to be assigned to sell our Agility platform, which is now ranked as Momentum leader in the $4.5 billion PR software market. We have about $12 million of Agility annual recurring subscription revenue presently and a 94% net retention that we believe is likely to improve. We go to market with both direct sales as well as channel sales. Our channel partners consume our data feed within their products, white label our product or resell our product. We anticipate aggressive growth from our sales force as it ramps up. Additionally, we're focusing growth from our channels, both from existing channel partners and new channel partners we're bringing in. You can expect to hear news from us about new channel partners within the next few months. Our Agility SaaS platform has allowed us to build a core capability in SaaS sales and marketing as well as SaaS enterprise software development and product management. To capitalize on this expertise, we plan to launch 4 additional SaaS platforms in the market, all our own IP, all built on our proprietary Golden Gate AI technology, and all designed to yield high-quality recurring revenue. We announced just this week, the general availability of one of these new platforms, our new data annotation SaaS platform, which we believe will serve needs we've identified in today's marketplace. In addition, we are developing a SaaS platform to help companies deploy and productionize AI models. We expect general availability of this platform in the first half of 2022. Taken together, we believe these 2 new subscription platforms, one for AI data annotation and one for AI model management and deployment, will extend and complement our fast-growing AI managed services. Apart from these 2 new platforms, we're also building a SaaS industry platform that will initially serve the financial services industry. In September, we announced a large win with a multinational bank that has become a paying customer for this new platform. Tentatively, we're planning general release of this platform late in the second half of 2022. The fourth new SaaS platform currently in development is an industry platform designed around medical data analytics. We're targeting general release of this platform in the second half of next year as well. We believe these 4 new platforms will significantly expand our core value proposition of accelerating and simplifying the adoption of AI and will help to further diversify and differentiate our products and services that are designed to help companies obtain the benefits of AI. Of this quarter's $17.4 million of quarterly revenue, we regard about $15.8 million or 91% as recurring revenue with significant lifetime customer value. We believe we will be able to grow our recurring revenue as a result of expanding relationships with the large technology companies we're signing, landing new customers for our AI services and solutions, growing our Agility SaaS platform direct and indirect subscriber bases, and over time growing subscribers to our new SaaS platforms. Our pipeline is robust and it's growing. We're working with an expanded assortment of large enterprises as well as early-stage companies with many opportunities in late stages. It is worth mentioning that on top of the 2 large Silicon Valley tech companies we've announced, we're getting off the ground with a third. Once we build a bit more momentum with this third company, which we are expecting to do, we'll get a formal announcement out. In addition, we have discussions continuing with a couple of other large techs as well. When we reflect on the cloud and the AI work Innodata is doing with its customers, it becomes clear that AI is destined to be in everything that we do and everything that we use. We're working on AI implementations designed to help organizations modernize or streamline processes, AI implementations that deliver deeper more insightful analytics, and AI implementations that promise fundamentally new experiences. It is interesting to observe that many of these initiatives are harnessing the technology to address current macro events such as labor shortages and supply chain challenges.

Thank you, Jack. Good morning, everyone. Revenue for the quarter ended September 30, 2021, was $17.5 million, up 20% year-over-year. Net loss for the quarter ended September 30, 2021, was $0.8 million or $0.03 per basic and diluted share versus a net income of $0.2 million or $0.01 per basic and diluted share in the year ago quarter. Revenue for the 9 months of 2021 was $50.5 million, up 18% from the year ago period. Net loss for the first 9 months of 2021 was $0.5 million or $0.02 per basic and diluted share versus a net loss of $0.6 million, also $0.02 per basic and diluted share in the year ago period. Cash and cash equivalents were $20.9 million at September 30, 2021, up from $17.6 million at December 31, 2020. Thank you. And operator, we are now ready for questions.

Our first question comes from Dana Buska with Feltl.

Congratulations on your wonderful quarter. It seems to me that you had a very nice cadence of new contracts coming in this quarter. And I was wondering if, with these new contracts, is it a strategy of landing and expanding with these contracts?

So great question, Dana. Absolutely, that's the strategy. And with a couple of these contracts, you're seeing something that's even going beyond that. A couple of these contracts are essentially charter customer contracts with new capabilities and new platforms. The idea is we hone what we're doing, we perfect it, we make sure we're tightly aligned to the customers' requirements, we send our product managers out to verify that the market requirements are reflective of the customer requirements and then we throw sales and marketing behind it. That's the formula we're working on. I was thrilled that we got essentially new requirements and new capabilities to two very large contracts in the market that we announced and I'm really looking forward to productionizing those and scaling those and getting our sales and marketing team working on them.

Excellent. That sounds just wonderful. I have another question, and this one has to do with your new data annotation platform that you announced. Could you talk a little bit about how you anticipate marketing this? And are you anticipating this to be its own profit center? And I know you talked about other SaaS applications. Are they going to be also like their own profit center assigned with like product management and all that capacity around that?

Yes. Let me address the point you made about product management, which is indeed very important. Each product will have a dedicated product manager. Their role is to ensure that what we develop is not merely a product of our invention but is aligned with market needs, identifying opportunities where we can create products to meet those demands. Traditionally, we have been a managed services company, and our Agility initiative marked our initial step into new territory. However, as we move forward, particularly in this larger market we are targeting, we are noticing gaps. Despite the number of companies developing tools and platforms for this sector, significant gaps still exist. We possess the technologies from our managed services that can be integrated into new products and launched in the market. Additionally, we have new capabilities for enhancing our sales and marketing efforts for SaaS platforms, along with improved product management and engineering for these new SaaS solutions. In my view, this signifies an exciting new chapter in our growth journey.

Our next question comes from Tim Clarkson with Van Clemens Capital.

Jack, Mark, great quarter. I guess, I'll get a real big picture question first, and then we'll go into a few details. I noticed that you haven't sold any shares, and I was talking with Nick, the Chairman, he hasn't sold any shares. I'm in the same situation. I own a lot of shares. So the way I look at it is we're kind of maybe starting the second inning with this AI stuff. Maybe you might want to talk about where we are and the potential going into the fourth quarter next year and what should develop?

Sure, Tim. The key factor that drives us is the significance of AI, and we believe we are just at the beginning stages of this journey. We’re currently collaborating with customers who have been utilizing these technologies for years, and we are finding our relevance and ability to support them in overcoming challenges. Additionally, we are engaging with large companies that are beginning to define their strategies regarding their needs, such as whether they have data science teams or require assistance with model management and deployment. Some may even be looking for fully integrated solutions that package AI into applications they can start using right away. We believe we are well-positioned to tackle this emerging market comprehensively, and we are very enthusiastic about it. At our core, we have always been focused on data. With the developments in AI, we see our market as being wide open, which is truly exciting.

Right. Okay. A couple of more specifics here. Do you have any expectations in general in terms of revenue per salesman on a forward basis? I mean, how much do they need to generate to be useful to Innodata?

Yes, that's a very good question. The answer varies depending on the specific business we're discussing. In our solutions and services business, salespeople have much higher quotas compared to those in managed services. In the platform business, where the average revenue per customer is lower, the quotas for salespeople are also smaller. This reflects a different kind of sales approach. A significant portion of our ramp-up this year is focused on that business. We can hire fewer salespeople for services and solutions while still achieving a strong impact. Additionally, next year we intend to increase our sales team for the service and solutions sector. As I mentioned to Dana, I am also starting to enhance our sales capabilities for these new platforms.

I noticed that your gross margins for this quarter were almost 50% compared to 40% last year. How high can these margins go in the future?

I think it's going to depend on the mix of the business. When we look at contribution margins in SaaS businesses, you can be talking about over 80% contribution margins quite clearly. In services and solutions, it's a bit lower than that. So depending upon the mix, that will determine the gross margins. We do think that there is room to continue expanding the gross margins for sure.

And I think as our revenue hopefully continues to increase, with certain levels of fixed costs, as Jack mentioned in his comments, we will leverage those fixed costs, and that will result in higher margins and a more significant portion of our revenue dropping right to the gross profit line.

Right, right. Now this is just a quick and dirty analysis on my part, but I'm thinking that somewhere above $20 million, $22 million that you start to become profitable, and maybe $25 million, you start netting 10% and $30 million, you start netting 20%, without holding you to anything? I mean are those reasonable kinds of ideas in terms of understanding what Innodata's future profitability can be?

Right now, we're deep into planning 2022, and we're making decisions about investment. We think the opportunities for the company are so compelling that we're aggressively investing in new capabilities, as you see. You see the kinds of new contracts we're landing with new capabilities. You see the ambition that we've got to make a bigger foray into SaaS. And we're doing this through deploying the incremental gross margins and supporting it with our balance sheet. But at the same time, we're maintaining that balance sheet. So we think that, that's a great strategy. It protects equity really well, and we think it will do great for us. To help investors understand the profitability of the business and the increased profitability of the business, we're going to keep looking at that gross margin line. We're going to keep looking at what is the incremental available contribution on that gross margin? How much of our revenue dollars are flowing to gross margin? We're going to continue, I believe, to see an acceleration in that. What we do with the money, where we deploy it? Well, I think the best way to deploy it now is in the investments that we're now talking about.

Sure, when you mentioned quality of data earlier, were you referring to the increased accuracy of Innodata? I understand that's a significant aspect, but is there more to it than just accuracy?

So there is more to it than accuracy. When you're talking about training AI models, it's a very complex space. It involves lots of mathematics, looking at not just the quality of data, but looking at edge cases, being able to identify edge cases, being able to address edge cases, sometimes with synthetic data capabilities like we've discussed. It's a complex area. But at its core is quality, whether you're measuring that quality in terms of accuracy or ability to identify problematic data, ability to address confidence level issues, ability to build technologies that automate much of that. All of these things that we're doing now. All of those challenges are things that in some form or fashion we've addressed for many, many years. This is a new use case. It's a bit different than the old use cases for sure. But it stands on the shoulders of that. And that's what gives us a significant competitive advantage that is being recognized by the customers that we're winning. I've always believed that, well, with the new customer, you get your foot in the door and you take on a small amount of work and then you scale. One of the contracts that we announced in the last several weeks with a new customer, close to $4 million of commitment there. And as I said in my prepared remarks, I think that that's going to expand over the next couple of months. So something is going real well. I think what it is, is that we've got the chops to address market challenges that are significant now.

Right. Now in terms of what you would perceive as your competitive advantage, is it more about the experience and skill of the people? Or is it more of some of the AI tools that you use to augment that?

I think it's a combination. I don't like to deprecate people. So even when it is the technology, our technology is operating very, very well. Well, the technology came from somewhere. It's proprietary to us. It came from our people. We've got a really great team right now. We've got a team that's firing on all cylinders. I think that the work that they do collectively and the technologies that they're developing are proving themselves out in the market.

Sure. One last question. I mean, at what capacity or what level of revenues, $25 million or $30 million, do you have to hire more people to be able to just do the volume of work?

So it depends on the business. There are aspects of our business that are more dependent upon and linear with labor, and there are aspects of it that are not at all. I think generally speaking, we're seeing less dependency on labor. We're seeing more criticality, more importance given to automation and the kinds of technology automation that we can bring to the table. In SaaS platforms, of course, there's a complete disconnect. There isn't a labor component that's required to invest on the increment. So I hope that helps.

We'll take our next question from Tim Madey with White Pine Capital.

Nice quarter, guys. I had just a couple of questions here. One is, maybe you could talk just a little bit about the capacity you have in the sales force now bringing people online?

Sure. Tim, we'd be happy to. Is there a specific question you've got?

Well, yes, I'm thinking about you've hired a number of new sales reps, and you've done it while still being cash flow positive, but I'm thinking about the potential and the ramp of those sales reps and for what period of time they reach quota? And as I think about it maybe in an aggregate on average, where they are in that progression now?

Great question. So let me think about that relative to where we're going as opposed to where we are. I mentioned to you that we're at 82 now, our plan calls for 110 by the end of the year. I think we're going to fall probably a little bit short of that plan. But if we do, we'll catch up within the next few weeks, like 2 to 3 weeks after the close of the year. So we're in good shape. What does that mean? When we take the solutions and services business, where we're going from what was about 9 people at the start of the year to 15 people at the end of the year. Those people carry quotas depending upon who they are and exactly what business they're assigned and what accounts they're assigned to, but it's probably about $1.5 million of quota-carrying potential that represents. We're planning on scaling that part of the sales force aggressively next year, by the way. Most of the headcount that we've hired is in our Agility business. It's a SaaS subscription business. A lot of the 95 people that we're scheduled to have by the end of the year are in enablement roles, are in channel roles, are sales managers, sales directors. So we've got some headcount there. There are some account managers who carry quota as well. There are some BDR people who are lead generation folks. Of the 95, probably about 50 of them are account executives. Our account executives in that business carry quotas of probably around about $450,000 each.

Let me just get the last part of that. In terms of ramp-up, we target an 8-month ramp-up, and that includes about 1.5 months of heads-down training and then mentorship, during which they ramp up to become progressively more capable, more productive. They're closing more deals per month. We're bringing people in and we've accelerated bringing people in just in the last couple of months. So that ramp-up is going to continue into next year. The good news is that we're seeing that people are tracking pretty well to their ramp-ups, meaning the ramp-up that we modeled against, they're not disappointing us particularly. They seem to be tracking well to that. We've built our overall models for the business around that. So that's the good news. We think we have to just continue to execute very, very well. Tom Perchinsky, our Chief Sales Officer, is doing a wonderful job at best. He's scaled sales of SaaS organizations before successfully, he knows what he's doing. We're just watching those numbers really, really carefully and making sure that as we grow this aggressively at an individual level, they're tracking to that normative ramp-up that we've built our models around.

I appreciate the color. I'm just thinking about another comment you made about $15.8 million of your revenue you consider recurring. I can see that nice growth on the Agility line as well as the DDS line north of probably 20%. If you could help us with the margin structures maybe of your recurring revenue component versus your nonrecurring revenue perhaps? And am I right about that growth rate?

Let me try to parse that question. I may have lost a piece of it somewhere. I think you were asking about whether margins at an engagement level are different for recurring versus nonrecurring work. The answer to that is they are not. They're similar. I mean product margins can differ from one project or one engagement to another, but we don't see a correlation between whether it's recurring or nonrecurring and margins. There is, of course, correlation relative to business models; we're selling SaaS software, incremental margins are higher than they are if you're selling managed services. You mentioned that we're seeing good growth in DDS and Agility. And that's certainly true. On the Synodex side, I just want to mention, too, that we're projecting very, very solid, very exciting growth coming from that platform as well for next year. In fact, we already have enough business book kind of in the bag to probably close to triple that revenue in Q1. So very good things going on there. That's not to be dismissed by any measure.

On the Agility product line, you've mentioned 4 new products that you're introducing. What is the product that's driving the growth now?

The product currently driving Agility's growth is the Agility PR platform, which has been acknowledged as a market leader, and this is very exciting for us. The other platforms are at different stages of development with charter customers. However, we will most likely not report revenue from those in the Agility segment.

How would you characterize if you look at Agility alone on that margin structure?

The margin structure indicates that there is essentially no cost to add another subscription in Agility. The only costs incurred are related to sales and marketing. Consequently, the incremental margins are significantly higher than what is typically expected from a SaaS business.

Great. And I think you've answered this in a number of different ways, but I was wondering if you could just summarize or unpack a little more of your flywheel comment from a technology perspective as well as maybe a sales momentum perspective?

Yes. We believe it's an excellent metaphor that encompasses a lot. On one side, there's confidence and enthusiasm that build upon themselves. When we engage a new customer and deliver quality work, we often secure additional business and expand effectively due to our strong performance in one area. This leads to further opportunities; for instance, completing two projects can lead to four. This principle extends beyond just that. When I consider the new talent we're bringing into the company, I wonder why they choose to join us. I'm consistently approached by senior executives from reputable companies wanting to work at Innodata. The reason is clear: they recognize our achievements and want to contribute to our continued success. This metaphor really captures our journey. Initially, there was considerable resistance to overcome, and years of investment have led us to this point. Now, as our momentum grows, we can accelerate our progress as we engage more clients and meet significant market needs, attracting new team members eager to help us advance. All of this contributes to an accelerating effect.

I've often heard the flywheel characterization synonymous with the AI technology itself too. Could you elaborate on that a bit?

Yes. Absolutely. Excellent point. So the way the neural networks work that are fundamental to AI is they've learned by examples. If you show them a few examples, they learn something. If you show them more examples, they learn more. The more examples that you're feeding into them, the higher they perform. That's a gross simplification of how it works, but I think it's good enough for this discussion. The result of that is that as you're training your algorithms and as the AI is performing progressively better, the number of different use cases that you can address with those algorithms increases. There may be things that you can do where it performs so-so, maybe it's like 80% accurate, but then you can put some rules-based technologies on top of that and it's good enough for some analytics. You keep going and you're feeding more data into it, you're training it with more data, engineering it progressively better. Then it's performing at 90% or 95%. The 95% accurate data then allows for other use cases that become actionable and create more market opportunity. So what's very exciting is that we've created an AI platform that we've trained with a lot of data. We're a data company. We've got a lot of data. We've trained our algorithms to perform very well. We're building those algorithms. We're embedding them into many of our platforms, all of our new platforms for sure. We're deploying those as accelerators for many of our existing clients, enabling them to get better results and more accurate results. Just like you say, as we keep going down that journey, our performance only gets better. As it gets better, our customers like us more. As they like us more, they give us new work to do. As the algorithms perform better, that creates more market opportunity.

It's almost like a flywheel, I keep coming up with more questions. Just 2 more questions, if you wouldn't mind. One is I'm thinking about your second Silicon Valley win. And I think you mentioned content modulation and health record work, all with the same customer. Is that correct?

Yes, that's correct.

And what did you mean by content modulation?

Content moderation. Identifying content that violates terms of service, identifying toxic content and things that a platform doesn't tolerate presented within its platform.

Right. But then on the health record side, how would the client use the product there?

On the health record side, we have a number of different initiatives there. What's common in all of the initiatives is people are looking at vast volumes of information, looking to make very quick clinical assessments, or looking to perform analytics around risks that pertain to health.

Okay. And are there any details you can share or perhaps you did on the length and size of that scope of that contract?

Yes, I think, on the one that we announced, we talked about it being a $3 million contract with another piece to it, which would be $800,000 recurring. The $3 million piece would likely be onetime. The $800,000 piece would be recurring. In today's remarks, I talked about how there's likely going to be some expansion within that as well.

Okay. Last question, I promise. Channel partners, what types of channel partners would you use to resell products?

So we're using other companies that are competitive with us in geographies that we don't do work. That's one big one. There's some level of infighting, too. We're looking at channel relationships with people who are somewhat competitive with us. There are several varieties. We're providing a data feed. One of the components of our Agility service is a very large database that's probably the most pristine database of influencers out there. We've put a lot into keeping that very, very accurate, and that becomes an interesting channel relationship. We can port that to other people on a white label basis. The other thing we're doing is we're doing pure white labeling, where we take our products and we put someone's logo on it and let them go sell it in other jurisdictions. In addition, we have resellers. We have people who have complementary businesses, who have complementary client bases, and they don't have a product that does what ours does; they can resell our product.

That concludes today's question-and-answer session. At this time, I will turn the conference back over to Jack for any additional or closing remarks.

Thanks, operator. To quickly recap, we're planning for accelerating growth in Q4 as well as next year. Our expanding sales force will become progressively more productive. We're going to close late-stage deals. We're planning on expanding programs with new customers and all of that will help drive that acceleration. We remain very optimistic about our ability to penetrate a very substantial opportunity over the long term. We talked about our SaaS initiatives. We're very enthusiastic about the new SaaS data annotation platform and about the other platforms that are now in the works. We see this truly as heralding a new chapter in our story. I really don't think Innodata has ever had better execution, a stronger management team, greater momentum and fundamentally a more entrepreneurial spirit. Thank you for joining us. Thank you for your interest. We look forward to being with you next time.

Today's conference is available for replay from 2:00 p.m. Eastern Time today to December 4, 2021, at 2:00 p.m. Eastern Time. You may access the recording by dialing 719-457-0820 or 1-888-203-1112 using passcode 5102285. Again, the numbers are 719-457-0820 or 1-888-203-1112, passcode 510-2285. This concludes today's conference. You may now disconnect.