Martello Technologies Group Inc

XTSX:MTLO

Earnings Call Transcript 2022-Q4

[Operator]

Thank you for standing by. This is the conference operator. Welcome to the Martello Technologies Group Fourth Quarter and Full Year Fiscal 2022 Investor Conference Call. Today's call will provide information and commentary on financial results for the 3 months ended March 31, 2022. We will hear from John Proctor, President, and CEO of Martello; and Jim Clark, Martello's Chief Financial Officer. Following these remarks, John and Jim will take questions from analysts. If you have questions following the call, you can reach Martello at [e-mail].

First, here are a couple of housekeeping notices. [Operator Instructions] This call is being recorded, and we expect the recording will be available on Martello's website today. We remind you that today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please see the reader advisory at the bottom of Martello's news release, which is on the website and on SEDAR. The company's actual performance could differ materially from these statements. We will begin with Martello's CEO, John Proctor. John?

[John Proctor, executive]

Thank you. Good morning, everyone, and thank you for joining us. I hope you and your families are all keeping well. I am joined this morning by Jim Clark in his first quarterly earnings call as Marcelo CFO, and I'm very grateful for Jim joining us. Jim brings to Martello over 25 years of senior financial and operational roles at some of the leading names in the tech industry. Welcome, Jim.

Before turning to my recap of Q4 and the 2022 fiscal year, I wanted to briefly reiterate the 3 core components of our growth strategy. First, we aim to strengthen Marcelo's competitive advantage with expansion of our Vantage DX, Modern Workplace Optimization Solutions Suite, which was only launched last fall. Second, we plan to expand sales channels for Vantage DX, including Microsoft Operating Connect partners such as their Orange Business Systems, large global system integrators and value-added resellers. And finally, we will continue to deliver Mitel Performance Analytics, or MPA, to Mitel. I'll speak a bit more about this in a few minutes and the recent extension of our contract with them as well. Since I spoke to you last in February, we've seen a number of important developments. And on this call, I want to follow up on a number of these, including the progress we are making with Microsoft and Orange partnerships.

First, a brief for a very relevant history. About 18 months ago, we made a strategic decision to focus the company and move aggressively into digital experience monitoring. We made our largest acquisition to date of GSX, a company that specialize in enterprise-grade digital experience monitoring to Microsoft. We believe that by combining this technology with some of our existing products and capabilities, we can build a comprehensive single-platform sat solution for CIOs to monitor and manage the digital experience employees using cloud business solutions anywhere. And we started with the biggest Microsoft. Vantage DX is the result. It is now one of the only solutions of its kind on the market and the only solution recommended by Microsoft to its customers, and I want to reinforce that. We are the only solution recommended by Microsoft to optimize the Microsoft modern workplace. The market responded positively to the launch and our early indicators show that there is demand for this solution. This early advantage to momentum is now accelerating.

In March 2022, the number of users in Martello pipeline have doubled to 1 million and more than 200,000 users will underpay subscription. This is a mix of new customers and upgrades, but over half of the users currently in trial represent brand-new customers to Martello. This gives us confidence that the solution has broad appeal. Our focus, as we begin fiscal '23 is on increasing the velocity of trials converting to pay subscriptions. And we've taken a key action with the hiring of Jim as our CFO. Jim brings a strong track cord of operational strength and excellence that will help us mature operations going forward. I will speak more about our outlook shortly after Jim provides a more detailed review of our financial performance in the fourth quarter and the 2022 fiscal year. Over to you, Jim.

[Jim Clark, executive]

Thanks, John. I'm delighted to be here with you this morning for my first earnings conference call as Martello's CFO. I will review the Q4 and full year fiscal 2020 financials in some depth in a moment. But first, I want to comment on my focus and perspective 2 months into the role. I am confident that Martello has brought to market a high-demand product that will drive optimization of the user experience in the $270 million user and growing Microsoft Teams addressable audience. Management is currently constructing plans to increase the velocity and growth trajectory of recurring revenue. Concurrently, we are optimizing our cost base to enhance focus on operational excellence and accelerating time to positive cash flow. We will accelerate the conversion to revenue through a deep analysis of all functions within our valve chain. Together, these actions will generate the opportunity for our clients and end-users to realize optimal Microsoft 365 and Teams value.

Now on to the financials. Revenues in fiscal 2020 reached $17.5 million, a 4% increase compared to $16.8 million in fiscal 2021. Q4 fiscal 2022 revenues decreased by 5% to $4.3 million from $4.5 million in the comparative period. On a constant currency basis, fiscal 2022 revenue grew by 10% compared to fiscal 2021. While Q4 fiscal 2022 revenue decreased 1% over the comparative period. Q4 growth in Martello's Microsoft digital experience monitoring revenue was offset by a decrease in Martello Performance Analytics subscriptions and an expected decrease in revenue from 2 sunsetting legacy products and unfavorable currency exchange translation. Revenue quality was consistently high throughout fiscal 2022. Gross margin was 91% compared to 93% in fiscal '21. The recurring portion of fiscal 2022 total revenue remained strong at 98% compared to 97% in fiscal 2021.

In Q4 of fiscal 2022, the average monthly recurring revenue, or MRR, was $1.41 million compared to $1.47 million. The minor decline is attributable to unfavorable foreign currency conversion and decreased maintenance and support revenue on legacy products. The exit rate for MRR on a constant currency basis was $1.43 million, representing a 3% year-over-year increase. MRR, as a reminder, is a non-IFRS measure and represents an average monthly recurring revenue earned in the fiscal quarter. Microsoft digital experience monitoring is now Martello's dominant revenue stream, making up 47% of total revenues in fiscal 2022, up from 41% in fiscal 2021, driven in part by the launch of Vantage DX in the third quarter of 2022. The remaining portions of total revenue in fiscal 2022 are Martello Performance Analytics, which represent 41% and legacy products sitting at 12%.

Operating expenses of $5.36 million in Q4 of fiscal 2020 declined 10% compared to 5.96% reported in Q4 of fiscal 2021. In fiscal 2022, total operating expenses were $21.72 million, an increase of $1.3 million or 6% compared to fiscal 2021. The -- the increase is related to the reversal of previously implemented wage cuts, headcount increases in R&D and sales and spend on marketing events. The Q4 fiscal 2022 net loss of $2.16 million compared to a net loss of $1.9 million in Q4 of fiscal 2021 is due to a reduction in tax recoveries. Fiscal 2020 net loss of $8.22 million compared to $6.37 million in fiscal 2021. The increased net loss is due to higher operating expenses, hosting costs and unfavorable foreign currency conversion. Adjusted EBITDA, a non-IFRS measure loss in Q4 2022 decreased to $830,000 compared to a loss of $985,000 in Q4 of fiscal 2021. This related to share-based compensation. The fiscal 2022 adjusted EBITDA loss was $2.86 million compared to a loss of $740,000 in fiscal 2021 for the items I've just identified.

The company's cash and short-term investments balance was $5.0 million at March 31, 2022, compared to $8.52 million at March 31, 2021. The reduction in cash is primarily attributable to cash consumed in operations and the buyer of the warrants on the [indiscernible]. Net working capital was $2.27 million, March 31, 2022, compared to $4.5 million at March 31, 2021. The number of Microsoft users on Martello's digital experience monitoring platform increased year-over-year to 2.76 million compared to 2.67 million in Q4 of fiscal 2021. More than 200,000 of these users are Vantage DX subscribers. The company is focusing on driving Microsoft user growth through sales of Vantage DX. This includes upgrading Microsoft 365 monitoring customers and converting trials to paid subscriptions. I'll now hand it back to John to close with his perspective on Martello's outlook. John?

[John Proctor, executive]

Thanks, Jim. As I said a few minutes ago, we're just a few quarters since the launch of Vantage DX and seeing good momentum behind our Microsoft modern workplace optimization [indiscernible] with growth in paid users and trials and strong go-to-market and sales support from Microsoft. I have mentioned the 3 core components of our growth strategy earlier, and I want to provide my perspective on our progress and outlook for each. First, our partnership with Microsoft.

Martello is a highly engaged and fast-moving partner within the Microsoft ecosystem. We are helping Microsoft drive teams adoption with Vantage DX, which is an absolute strategic priority for them. Working as one of the world's largest companies can take time even for us, the most enthusiastic partner, but we are beginning to see results from our focus and drive to maximize the partnership. Engagement and activity with Microsoft have increased significantly in Q1 with new Microsoft contact engaging with Martello every month, more [indiscernible] on average each week, joint marketing activity, and a strong pipeline of sales opportunities. There are even 2 Microsoft partner development managers dedicated to Martello to make this relationship work.

Second, our partnership with a range and focus on Microsoft Operator Connect partners. Through our long-standing partnership with Mitel, Martello developed [active feed] in managing the performance of [voice ports]. This has created a competitive differentiator for us as the popularity of Team's phone calls and Microsoft Operator Connect Partners for providing the service. We are developing partnerships with operator connect partners like Orange, one of the world's largest telecom companies, and building unique capability to Vantage DX such as support for session border controllers to address this specific market.

Finally, as many of you noticed recently, we signed a 3-year extension with Mitel. [indiscernible] is important for Mitel solution because it delivers simplified monitoring and performance management of the real-time communication networks, Mitel's customers rely on every day, and it forms a solid $7 million annual recurring base upon which we can build further by driving more NPA adoption and finding opportunities for Vantage DX [cross-selling]. While we are seeing solid progress in all 3 pillars of our growth strategy, our Q4 performance was below our expectations.

The sales cycle for new software product that is sold in large enterprises is longer than other SaaS solutions. Though we have a healthy pipeline of companies trialing Vantex DX, the time to revenue is taking longer than expected, something we are actively working to address spear-headed with the hiring of Jim as CFO in May. The 40% year-over-year revenue growth in Microsoft DEM revenue, resulting from our investment in this segment and the launch of Vantage DX have been offset by the expected decline in our 2 legacy products. As a result, top line growth in trial conversions may be delayed by a few quarters.

On the positive side, the extension to our contract with Mitel suggests that these revenues could pick up some of that slack as Vantage DX momentum continues to grow. As Jim mentioned, management will focus on optimizing our cost base and accelerating time to positive cash flow. We want to ensure investors and analysts that we are laser-focused on achieving the operational excellence efficiencies that will ensure we can exploit the demand of Vantage DX to scale our revenue. We have an installed base of 2.77 million Microsoft users, and based on the demand that I explained earlier, we are on track to reach 3.5 million users over the next few quarters. This timeline will be impacted by progress on accelerating our trials.

In closing, I want to leave you with 4 key reasons that underpin our covenants. First, our increasing alignment with Microsoft. Second, the competitive differentiator we have in Microsoft Teams Voice and the large global operator connect partners such as Orange already engaged with us. Third, a growing DX sales pipeline and an operational focus on accelerating diversion rates to pay subscription. And finally, our stable continued relationship with Mitel supporting the $7 million recurring revenue base. All of our indicators tell us that the market needs Vantage GX, and we are well-positioned for this growth. Jim and I are now here to answer your questions. And operator, would you please facilitate the Q&A part of this call.

[Operator]

[Operator Instructions] Our first question comes from Kiran Sritharan of Eight Capital.

[Kiran Sritharan, analyst]

What are the cut off by asking about the decrease in the Microsoft [user] is this quarter? Would you account that to [churn]? Or was there something else to call out here?

[John Proctor, executive]

So yes, I mean, we've seen some of these legacy decreases. The growth really we're looking at is in the Vantage space, which is where, as I mentioned, those are the metrics that I'm really focused -- laser-focused on tracking right now is Vantage DX -- do we see some of our legacy pieces still declining? Sure, but not in Vantage. And I think the key here also is we've got some clients who are transitioning from the legacy to Vantage, which is [indiscernible] the numbers, but others are declining the opportunity to renew, which is in a tough economic time and is not unexpected. But the nice thing also is we're seeing the Vantage pickup from not just Gizmo, which is what I expected.

I was fairly confident we get the Gizmo transitions. But we've got trouble coming from both the legacy Live Maps and even from Dominos, which is almost a different part of the business. So again, it's kind of nice in those pieces come across. But yes, we're seeing a little bit of a decline because of legacy. But the number -- the number that really I think we will show the growth advantage will be the numbers we see picking up into the new Vantage model, which really is what Microsoft is pitching, right? They're not interested in any of our sort of legacy pieces. They're really pitching Vantage piece, which is where we'll see the growth.

[Kiran Sritharan, analyst]

That's helpful. And on that, actually, last quarter, you mentioned how Microsoft introduce you to 3 telcos enterprises. If possible, can you give us more color on how these conversations have been going? And if there's any further developments with that global managed partnership? And also was the relationship with Orange as a result of the Central?

[John Proctor, executive]

Okay. So it is a multiheaded. So yes, I mean, we -- I mean, I'll put some color on that. So for example, one of the big sort of Canadian telcos had a very specific request for information around what we do, which we obviously obliged to at the speed of a telco, it's -- we're now on the third group of people we need to talk to within the telco to move that through. So it is a little bit frustrating that these telcos do not move rapidly. So that's [indiscernible] for us. Along with our own, Microsoft supported it. And I will also add color there, which is Microsoft is now supporting those calls into telcos.

So we're having access into the telcos we didn't have before, which I'm hoping might accelerate those conversations. There was a Microsoft gentleman who was one of our -- who was on a recent webinar of ours, who's very pro -- he's a Microsoft employee, but he's working on with a number of the telcos on the Operator Connect side. He has a huge supporter of ours and is helping facilitate a number of these conversations. The orange one, Orange was one we already had in the pipe, but certainly having Microsoft backing literally help grease some of those conversations and got that going. So we're quite pleased with that.

And the other piece here is the Orange machine isn't even turning yet, right? We literally just -- we're just bolting that engine onto the airplane that is Martello's. So we haven't done any marketing with them yet. We haven't -- we've got one deal in flight with them, which is great. But really, the engine is only just getting bolted on. So much is where it is sort of -- we've got the Microsoft engine spinning up. The rolling engine is bolted on, and we haven't even started yet. So has more to do there. And again, we are pushing as fast as we can, but these are big, big organizations. And as I kind of said in the call, with this really enthusiastic small company, we're going as fast as they will let us in many circumstances.

[Kiran Sritharan, analyst]

And finally, here, R&D and S&M was down sequentially. Would you call this more cost control efforts? Or can we use Q4 as a run rate for the year?

[John Proctor, executive]

Our R&D in terms of our run rate, I would say, at this time, we're probably at the right run rate. There were some integration activities late last year on R&D. And I think that's got mixed into a more efficient cost base.

[Operator]

[Operator Instructions] Our next question comes from Daniel Rosenberg of Paradigm Capital.

[Daniel Rosenberg, analyst]

I just wanted to clarify on the $3.5 million user target. So is that the reiteration of previous statements around hitting the mark in the first half? Or is that something that may extend into the second half of the year? Kind of what's kind of the exact target?

[John Proctor, executive]

Let's make this as a restatement of what we've said before, right? This is what we expect to hit this year. If we can accelerate some of these trials, we'll get there faster, but I'm comfortable we're on track to get that this year. If I look at sort of where we are this year, and it's funny, we were sort of reflecting that sort of a couple of financial years. Where we are this year, we've got the biggest funnel we've ever had in Martello's life. We've got more people in trial than we've ever had in our life. We've got this relationship with Microsoft is now at a stage that's accelerating.

I mentioned Orange hasn't taken off yet, so I'll focus on the Microsoft piece with accelerating we renewed Mitel. We're probably in a better position than we've been in the last couple of years. Revenue is up, it is not hugely, I guess, but it's up. But certainly, from a perspective, with the funnel, the pipeline in that respect, the relationship is good. So that's why I'm comfortable coming down to say, this is something we said we'll do before, and I'm very comfortable that we're going to do it. I just want to do it faster, and that's what we're going to push on heading into FY '23.

[Daniel Rosenberg, analyst]

And then I missed the beginning of the call, but I just wanted to revisit the user growth as it stands today. Were there any onetime impacts or seasonal implications that kind of affected your user growth as it stands today kind of sequentially?

[John Proctor, executive]

Yes. I mean, interesting question. I mean we don't see much seasonal. What is interesting, and again, it sort of comes back to is the number of companies coming to us, and you'll -- I think you've seen -- there's a case study out, which is the [indiscernible] case study we pushed out, then there was Vitrolife, which is another case study. What happened there, and again, it's kind of -- if I look at seasonal, I'll use sort of the modern workplace as a sort of seasonal as people are coming back to the office, I know that's seasonal because I know in Toronto, people are heading out of the office again because it's the summer. But certainly, from a seasonal effective, when people are coming back to the office, the companies are finding that Microsoft Office wasn't running as productive as they wanted it to do. So this is where they're putting us in and I would urge everyone on the call that sort of if they get the chance to look at those recent case studies or even go onto the website and look at our use cases. And those use takes are absolutely based on client experiences. We didn't make those up. Those are based on that.

And it comes back to your point of saying as they're coming back to the office, they're finding the office environment network is not configured correctly for Office 365, and we can find that for them very quickly and help them maintain and monitor that and optimize that. So I think, I like the word your term seasonal. I think as we watch sort of how people return to office, will there be another cold spike, I don't know. But as we see the sort of this people call it flexible workspace or hybrid workspace.

There's an expectation that people want the same Office365 experience, be it Share Point, Teams or whatever, and that's not necessarily happening, and that's where they're coming to us. And we've got a number of folks like that, that are doing trials at the moment. And to your seasonality point, do we watch the summer? Yes, we will. We'll see what the summer happens because most of -- we've got sort of big things in flight in Europe. But most people know that's part of Europe shut down at different stages over the summer, so we'll watch that. But overall, I think we will continue to see the growth, and we'll continue to see that our overall user count growth.

[Daniel Rosenberg, analyst]

And so, maybe could you speak to the on-prem users? Are you seeing the acceleration and kind of churn that's going on there?

[John Proctor, executive]

Daniel, I do like to talk to you because you have some very interesting questions here. So that's -- if I look at both the Office 365 and even Mitel, the -- and I'll do the Mitel piece first and come back to Office 365. What is interesting in [Indiscernible] Mitel having sold their cloud business and now focus on the on-prem business. And what is interesting, we just won the Canadian part of an international retailer with Mitel. And they deliberately chose Mitel because they're on-prem. And their reasoning was as we got resiliency and redundancy if there's any network issues, we can still operate as a retailer because the phones will work.

So when we look at that saying, when I look at the on-prem business, everyone I remember being on these calls at the start of pandemic and then goes you have tightened Martello, you have tightened Mitel, nobody wants on-prem phones, the sky is falling. And the answer is, Mitel got that, they understood it and they rationalized, sold off their cloud business and now they're going to dominate the on-prem business, which I think they can do extremely well and will be along to support them in doing that.

And then the other side of the Office 365, the one thing we're looking at is we effect have an on-prem version and a cloud version of Vantage. What we're looking at is the cloud version has a higher number of features. Just by the way, it's developed and what we can do with it in the cloud, the on-prem version doesn't have as many features and it actually takes a bit more work. So we actually are starting to price the on-prem version differently and it comes with slightly less features. The idea also is to convince customers to look at the cloud version as their priority. Some won't and they will accept slightly less features and they will let us fly a higher price because they want the sort of -- they're demanding on-prem version. And that's fine. Just obviously, there's a development cost for us, which we need to make sure we are tracking between the 2 slightly different versions, although not completely different, but there are always nuances in that. Does that help, Daniel?

[Daniel Rosenberg, analyst]

Somewhat. But effectively, driving at here is sequentially, if I'm not mistaken, it looks like user growth declined for the second quarter in a row. So I'm just trying to understand what are the drivers behind that?

[John Proctor, executive]

Yes. Again, that's -- the legacy issues there is one thing. And again, as people sort of -- as I said, there are some on-prem versions of our product with users that people didn't renew. And a lot of it is they didn't go for a competitor either, right? Some of these people are sort of -- we're seeing these pieces where people are saying, no, my IP is too tight. I've been told to rationalize what I'm spending. And I don't have some of the concerns that I think I've been solving with your tool. The irony of some of them will come back to us as well and say, actually, now I can't see what I'm doing.

We'd like to have a trial -- Vantage trial. So that is also what we're seeing as part of the economy is some of the IT teams out there are starting to sort of tighten their budget, and that's the consequence. And I know we're not the only software firm feeling that. We are doing it to our own suppliers as well. So I think that's part of this as well. But I do see as we move the cloud, and I do see as Microsoft push is up ready to connect. That will be where we will see the build. But we've always -- again -- and you and I have talked about this before, we have always expected some of these legacy pieces will continue to decline. But the key for us is, and we will be sort of making sure we are reporting very clearly on what the Vantage DX numbers are is that's the piece that Microsoft is pulling into the market, and that's effectively where we will see the growth coming.

[Daniel Rosenberg, analyst]

Okay, that was messaged and understood. And so lastly, when you think about the dynamics, you mentioned kind of a record pipeline. You saw -- you have a couple of very strong channel partners here. So the dynamic between legacy users and these potentials in the pipeline, when do you think the inflection point comes that will return to user growth? Is that going to be immediate in the next quarter? Or it might be lumpy as we look to the next 4 quarters?

[John Proctor, executive]

I think, again, if you look at what Microsoft is taking us, it's into very large enterprise. So that always tends to, a company of our size makes it a bit lumpy. And I think that's one of the issues at the moment is we've got to start -- there's a focus now with us, and we're already on it of saying we've got to fill those sort of those in between the lumps with a smaller enterprise. And I think this is where we're having these conversations with Microsoft -- the -- as you can imagine, when we start working with Microsoft, the first thing they want to do is put us into -- get us into any of their flagship accounts that are having sort of productivity issues with Office 365, right? Not surprising, but those are big accounts where, again, we will see lumpy user count jumps, but they take time. As we start to get these relationships going and starting to have more in-person contact with Microsoft, it means we started get in contact with smaller accounts that will fill the gap.

So I think it will smooth out throughout the quarter over the next -- this year. But certainly, I think you'll see a little bit of lumpiness with the large enterprises, which is where our focus is at the moment, thanks to Microsoft. But then we'll start to fill those in as the quarter and smooth that out. So that means go back to your sort of original question. Yes, I think you'll see that sort of inflection point towards the middle of this financial year. And then you'll see that growth advantage. And as I said, we want to accelerate that as much as possible, and we're watching that very closely. And maybe lastly for me, is there any numbers you could put around that pipeline like the average enterprise customer, what that could mean for you?

Are these kind of 10,000 user accounts or 50,000. How would you categorize that pipeline? Yes. I mean if I look at the user account, you're probably -- it's around sort of average, if I look at that sort of 30,000 to 35,000 is kind of our average user account -- at the moment. We do have a base price, right? If you're a small company, and we -- I mean, we've got a couple of those and some of the use cases are those smaller companies, which we went with quick. But we have a ceiling price we can go be over on hosting costs and also of things. And they will tolerate that, right? That's the market will bear that we have a ceiling price we can't go below. They will still pay it because it still gives them the value they want into their environment. So that's the part where we think we can focus a bit more.

The other thing with those smaller accounts is some of them don't want to go to trial, they're willing to go straight into -- they see a demonstration. They're willing to go straight into purchase. So the time to revenue is much quicker for those guys. The bigger guys often want us to go through a trial period. They're much more complex. They've got to hold on to different applications running in there, security aspects, et cetera, et cetera, which just sort of we have to fight through that noise to close the deal. So I think as we move that forward, we will see sort of that user count probably stay there, mainly because Microsoft is going to push on that. But I think I want to be a bigger funnel as a smaller size just because they will go quicker. But yes, you're seeing, as I said, average around 30,000 to 35,000 is our sort of average user account. We do go below it, but then there's a ceiling price that in price that we don't go below.

[Daniel Rosenberg, analyst]

Okay. And maybe I'll sneak one last one here for Jim as we should hear have a question for him. On the balance sheet, so the cash position, you ended around $5 million. So in terms of managing burn rate versus working capital needs, just what's your characterization of the balance sheet and ability to meet your operational needs with the balance sheet as it stands?

[Jim Clark, executive]

Yes, Daniel, good question and definitely a high-focus area for myself, John, and the business. In my communication, we have an absolute focus on this. We're working, obviously, with our primary lender. We have like a facility in the wings. And we're going to be diving into operational excellence and really driving what we call positive cash flow. So we have an absolute focus on getting to positive cash flow. As John mentioned, we need to accelerate the cycle through the bookings, and we need to look at our internal processes and make sure that we're very, very efficient. So great question. Feeling confident that we have the resources required to meet the growth aspirations of the business. And -- and it's certainly in progress.

[Daniel Rosenberg, analyst]

Okay.

[Operator]

This concludes the question-and-answer session. I would like to turn the conference back over to John Proctor for closing remarks.

[John Proctor, executive]

Thank you. And I just want to reiterate, as we said in our press release, the end of '22 fiscal year marked an inflection point for Martello towards an absolute focus on becoming a Microsoft modern workplace optimization leader. And as I said earlier on this call, we have never been in the stronger position to do that. We have higher revenues, bigger funnel, bigger pipeline. We've got stronger relationships with both Microsoft and to certainly be Mitel than we've ever had. So I'm very confident in what we are doing and confident in FY '23.

As mentioned earlier, you can register to receive our upcoming newsletter in the Investors section of our website, and a recording of today's call will be available on our website later today. You can reach out to our Investor Relations any time by e-mail at [e-mail]. Thank you for your time today and appreciate everyone attending the call. Thank you.

[Operator]

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.