Q2 2024 Simulations Plus Inc Earnings Call

Participants

Lisa Fortuna; Investor Relations; Financial Profiles Inc

Shawn O’Connor; Chief Executive Officer; Simulation Plus Inc

Will Frederick; Chief Financial Officer; Simulations Plus Inc

Matt Hewitt; Analyst; Craig-Hallum Capital Group LLC

David Larsen; Analyst; BTIG LLC

François Brisebois; Analyst; Oppenheimer & Co Inc

Presentation

Operator

Greetings, and welcome to the Simulations Plus second-quarter fiscal 2024 financial results conference call. (Operator Instructions)
It is now my pleasure to introduce Lisa Fortuna from Financial Profiles. You may now begin.

Lisa Fortuna

Good afternoon, everyone. Welcome to the Simulations Plus Second Quarter Fiscal 2024 financial results conference call. With me today are Shawn O'Connor, Chief Executive Officer; and Will Frederick, Chief Financial Officer and Chief Operating Officer of Simulations Plus.
Please note that we updated our quarterly earnings presentation, which will serve as a supplement to today's prepared remarks. You can access the presentation on our Investor Relations website at www.simulationsplus.com.
After management's commentary, we will open the call for questions. As a reminder, the information discussed today may include forward-looking statements that include that involve risks and uncertainties. Words like: believe, expect, and anticipate refer to our best estimates as of this call. There can be no assurances that actual future results could differ significantly from these statements. Further information on the company's risk factors is contained in the company's quarterly and annual reports and filed with the Securities and Exchange Commission.
With that said, I'll now turn the call over to Sean O'Connor. Sean?

Shawn O’Connor

Thank you, Lisa. Good afternoon, everyone, and thank you for joining our second-quarter fiscal 2024 conference call results for the second quarter of fiscal 2024 played out. As expected, our team delivered solid revenue growth of 16%, with strong performance in both our software and services segments, and reported diluted earnings per share of $0.2.
Given our strong first half results, we are confident we will meet our full-year guidance. Our market continues to show encouraging signs of strength in the first calendar quarter of 2024. Biotech funding has been strong, especially for companies that have drug candidates in the clinic. Biotech companies of this profile can benefit from our full portfolio of modeling and simulation capabilities for large pharmaceutical companies.
Funding continues to vary depending on their near-term direction, drug programs, stability, and business outlook, but the waivers, formulations, products, and services will continue to gain momentum as market conditions improve.
Before turning to our segment performance, I want to spend a few minutes on our topic of artificial intelligence as it relates to drug discovery and development. As I've noted previously, Simulations Plus was an earlier developer of a technology and tools to optimize our predictive technologies.
As AI technologies continued to develop, w e keep pace by improving our use of AI technology to enhance our modeling and simulation solutions. Additionally, AI accuracy is only as good as the data sets used for training and our access to act accurate public and private data as a treatment arms.
Our long-standing partnerships and collaborations, with both industry leaders and regulatory agencies have granted us significant access to both private and public data potential for protecting and refining predictive algorithms. This access to key data is critical to advancing our capabilities in AI-enabled bio simulation well into the future.
When you look broadly at the digital economy, our business rooted in science and data stands to meaningfully benefit from about evolving AI applications.
Moving on to our software segment. Software revenues increased 11% in the second quarter and were up 16% for the six-month period with good renewals, upsells, and new logo activity. Overall, we are seeing solid demand in our key markets.
Except for Asia, we continued to lag the overall market growth or cheminformatics business unit delivered 14% revenue growth in the second quarter, and 10% for the fiscal year to date. This quarter's growth was due to higher revenues from admin predictor, which continued to gain adoption and added another new AI biotech cut-and-sew customer.
Fully baked business had a modest 2% revenue increase in the second quarter, and 11% for the fiscal year to date. The PBPK business unit added six new customers and booked nine upsells for existing customers. Momentum is strong for GastroPlus, and our expectations for full-year growth is strong. Our clinical pharmacology and pharmaco metrics, or CPP business unit delivered the strongest performance with revenue growth of 38% for the quarter and 21% for the fiscal year to date.
Monolithics continues to take market share from its primary competitor and saw another large pharma client commit to transition to the platform. During the quarter, we added seven new customers and had 10 customer upsells revenue in our quantitative systems. Pharmacology or QSP business unit decreased 6% for the quarter and increased 77% for the fiscal year to date. As a reminder, quarterly results can be lumpy for QSP based on the high price per license and a small pool of end users.
Turning to our services segment. Revenues increased 20% for the six-month period was solid bookings and a healthy pipeline of active opportunities. Plants are being cautious about spending, but we're seeing a pickup in RFPs, which is a positive sign. There's still lingering volatility associated with start and stop decisions on drug programs and data delivery disruptions related to the completion of clinical trials. But we are managing through this volatility quite well to maintain a steady flow of projects, activities, and utilization of our scientific staff.
Total backlog at the end of the second quarter was $18 million, which is strong as we enter the second half of our fiscal year. Services revenue in our CPP business unit were solid, up 10% in the second quarter and 11% for the full fiscal year, d espite the impact of volatility volatility in our QSP business unit service revenues grew 78% in the second quarter and 89% for the full our fiscal year, benefiting from immunology and cancer model projects.
Services revenue in our PBPK business unit increased 39% for the second quarter and 11% for the full fiscal year, delivering strong growth after a sluggish first quarter performance. And with that, I'll turn the call over to Will.

Will Frederick

Thank you, Sean. To recap our strong second-quarter performance, t otal revenue increased 16% to $18.3 million. Software revenue increased 11%, representing 63% of total revenue. Services revenue increased 27%. O n a trailing 12-month basis, software revenue increased 22% and services revenue increased 14%.
As we communicated last quarter, the business unit reorganization we implemented in the first quarter to improve our focus on customers also allowed us to evaluate our departmental structure with a focus on continuing to improve operational performance and profitability while providing our investors improved visibility to our progress.
As a result, we moved all services personnel into cost of revenue departments. This has no impact on our total cost or net income, but does impact the services gross margin trend compared to prior periods. Accordingly, Q2 total gross margin was 72% compared to 83% last year, with software gross margin at 88% versus 92% versus 56%. Approximately $1.3 million of the increase in cost of revenues corresponds to a $1.3 million decrease in G&A expenses.
Turning to software revenue contribution by business unit for the quarter, PBPK was 54%, CPP was 24%. Cheminformatics was 18% in QSP was 4%. For the trailing 12 months, PBPK contribution was 55%. CPP was 20%. Cheminformatics was 19% and QSP. was 6%.
For the trailing 12 months, our customer renewal rate increased to 93% based on fees and increased to 84% based on accounts. For the trailing 12 months, average revenue per customer increased to $95,000.
Shifting to our services revenue contribution by business unit for the quarter, CPP was 43%, QSP was 27%, PBPK was 25%, and RIG was 5%. For the trailing 12 months, CPP contribution was 43%. QSP was 30%. PBPK was 22%, and RIG was 5%.
Total services projects worked on during the quarter was 176, slight decrease from 183 last year and quarter end. Backlog increased to $18 million compared to $15.4 million last year. Anticipated revenue from backlog within 12 months increased to approximately 90%.
Turning to our consolidated income statement for the quarter, R&D expense was 7% of revenue compared to 8% last year. Sales and marketing expense was 11% of revenue, same as last year, and G&A expense was 30% of revenue compared to 38% last year.
Total operating expenses were 48% of revenue, compared to 58% last year. Income from operations was 24% of revenue compared to 26% last year. And income before income taxes was 29% of revenue compared to 32% last year.
Year-over-year e xpenses increases were primarily due to the acquisition of Immunetics compensation related increases due to headcount additions, increases in stock compensation and general annual salary adjustments for existing employees. Other income was $0.8 million this quarter compared to $1 million last year, some of $0.4 million, partially offset by an increase in the fair value adjustment of the Immunetics earn-out liability of $0.4 million.
Net income for the second quarter was $4 million or 22% of revenue, compared to $4.2 million or 27% of revenue last year. Diluted earnings per share was the same as last year at $0.2, reflecting a decrease in diluted shares outstanding as a result of last year.
Share repurchase second-quarter adjusted EBITDA increased to $7.1 million compared to $6.2 million last year and both were 39% of revenue. We calculate adjusted EBITDA by adding back interest, taxes, depreciation and amortization, stock-based compensation gain or loss on currency exchange, any acquisition or financial transaction related expenses, any asset impairment charges and any tax provisions or benefits related to these items.
The reconciliation of this non-GAAP metric to net income, the relevant GAAP metric is in our earnings release and on our website. Income tax expense for the second quarter was $1.2 million compared to 0.9 million last year. And our effective tax rate increased to 23% from 18% last year. The increased tax rate was primarily the result of changes in prior year estimated taxes and foreign tax related differences as we benefited from last year.
Now that we're halfway through our fiscal year, our current effective tax rate estimate for the full fiscal year is 20% to 23%.
Finally, turning to our balance sheet. We ended the quarter with $117.5 million in cash and investments. We remain committed to our capital allocation strategy and corporate development initiative, as we continue to seek opportunities for strategic acquisitions, invest shipments and partnerships. I'll now turn the call back to Shawn.

Shawn O’Connor

Thank you, Will. Through our second-quarter results reflected strong performance in both our software and services segments. Market conditions have improved, but these changes require time before they translate into actual bookings and revenue.
We remain cautiously optimistic with our strong first half performance conversions in our stated fiscal 2024 guidance targets, which include total revenue between [$86 million] and $69 million year over year, revenue growth in the range of 10% to 15%, software mix between 55% and 60%.
Services mix between 40% and 45%, diluted earnings per share of $0.66 to $0.68 year over year. Diluted earnings per share growth of 35% to 39%.
Before turning to the Q&A, I'd like to take the opportunity to reinforce key differentiators of our story. We are clear leader in software and consulting services in a large and growing biosimulation market Simulations Plus is a leader in biosimulation technology, leveraging AI tools since the company's inception to optimize drug discovery and clinical development through to and beyond r egulatory approval.
'We have a compelling customer value proposition and strong competitive position with high barriers to entry. We have an attractive financial profile with a strong balance sheet and no debt. And finally, we have a seasoned man, seasoned management team with scientific leadership and significant expertise in modeling and simulation. Thank you for your time today.
And with that, I'll turn the call over to the operator for questions.

Question and Answer Session

Operator

(Operator Instructions) Matt Hewitt, Craig-Hallum.

Matt Hewitt

Good afternoon. Congratulations on the second half. Good quarter here in a row. Some maybe first up of to follow up a little bit on the macro environment. We obviously are starting to see some improvement on the biotech side. You commented on that. I'm wondering on the large pharma side, how much of that as a funding versus kind of some of the reprioritization and some of the market or past few quarters? Is it more just that or is there maybe some funding on the large pharma side as well?

Shawn O’Connor

I think that, yes, you answered during the last couple of years as the environment, the biotech versus pharma has been a little different. So circling funding the issue on the biotech side on pharma side that spend less funding as it has done circumstances related to the individual company, our outlook in terms of patent exposure on revenue streams, resorting their drug programs and investments there, their access or acquisition, I should say, of new programs have created a churn there.
You've got a wide range of scenarios from Novo Nordisk Skip. So there are one extreme and other companies, a Pfizer, as an example, that's announced significant cutbacks this year. So most everyone has obviously in between those two extremes, but there's still a lot of churn and cautiousness and the sorting other programs that are going to be invested in are bothered us to them. Capital funding of those companies has been more or less of a less of an issue in terms of their situation.

Matt Hewitt

Got it. And then regarding the biotech funding, obviously on it has been I think everyone's kind of seen that the strong start to the year. But how quickly do you start to see that on that from a bookings perspective? I mean, is it pretty quickly or is there a little bit of a lag? So what or So seeing the IPOs and secondaries hit? Is there a quarter or two like historically? Or does that help sharpen your revenues right away?

Shawn O’Connor

Yes, we'll see. I mean, it's anecdotal different depending on where their drug candidates are when they get a funding, where where are those candidates in terms of the cycle of drug, good drug development. I hope the typical sales cycles in our industry can range to I need a new seats and I need it tomorrow. I just hired somebody to prolonged and budgetary activities.
So I know I'm dancing around an answer to your question, because I can't give you a two month, three month sort of sort of lag. It's across regions across the spectrum in terms of timing, but certainly within within the first quarter or or thereabouts of funding activity, you're not going to see a quick term in terms of Mark Mark, the volume of but the six to nine-month range, I would anticipate to many you're going to be advancing their candidates, especially those that are getting funding with drugs in the clinic.
Looking to go to the next level, close their protocol on the next clinical trial. Those are decision point for drug purchasing decisions.

Matt Hewitt

Got it. And then maybe one more from me and I'll hop back in the queue. But the obviously a big pop and add, Matt, I think you quadruple the number of customers versus last quarter. How the new wins, I should say your upsells were up three times versus last quarter. Maybe a little bit more color on what drove the strong comp there?

Shawn O’Connor

Yes, some of the technology is is getting more acceptance in the marketplace in terms of what we're doing the questions. And those companies were focused on new generation of AI solutions. The recognition that the that which is an admin Predictor and the comfort local contributions we make there are not displace, but many of the new technologies that are being brought to the breadth of the market, and we're extremely pleased yet another AI startup biotech company licensed our admin predictor tool to supplement to what they are building separately.
And that endorses that, I mean, over not being displaced or replaced in terms of many of these technology builds a technology builds and the value of what we've built and brought to the market for many years here and continue to enhance and improve has its place in value in the fleet optimization process.

Matt Hewitt

Well, congratulations again on the strong quarter.

Shawn O’Connor

Thanks, Matt.

Operator

David Larsen, BTIG.

David Larsen

Hey, congrats on a very good quarter. Can you talk a little bit about the sequential increase in GastroPlus on revenue? I mean it looked very good to me, especially given that you have the harmonization process on last year. So any more color or thoughts around that would be great.

Shawn O’Connor

Yes, your growth in the specific quarter here year over year comparison was not not tremendous, but this was our stepped-up quarter as the harmonization process, but completed last year set in motion. A little bit different dose seasonality pattern to the year first quarter to second quarter jump was it was an even larger chunk sequentially for us. And the decibels performing quite well harmonization front-end licenses that slipped from one quarter to another quarter based upon their their closure at the end of the order when we get from quarter and what content, so that we had some some impact from that referenced in the prepared comments.
So with regard to softness in the Asian market, where we're seeing, especially in China, some pullback in terms of spending related to a well known issues that taking place there. And so momentum is very good on GastroPlus were performing to our expectations for the year. I'll move on to look for that to continue to grow at a steady pace and contribute to the withdrawal well levels.

David Larsen

Okay. And then I caveat in their research business, they showed tremendous growth. It was, I think, one of their one of their best quarters ever printed like I think it was the second one, maybe third best for Akebia, kind of seeing a very good increase year over year in model mix. I mean, is there any correlation to that? I mean how tied is model mix suite to clinical trial activity candidate create like virtual clinical trials? Or is there I guess what drove that h uge increase there?

Shawn O’Connor

Over 30% year over year, 38% year-over-year growth. I'm Alex is doing quite well, made it through its harmonization process last year since our acquisition of that product line in 2020 has been aimed at a fast grower, our fastest growing software platform. These last few years, loan to continues to perform nicely in the marketplace, displacing the incumbent, the leading market share grow the core of this past quarter. We had yet another large pharma company that made the commitment to displace entirely or the competitive product and go under percent to a use of modeling for their needs there.
So it's a momentum and progress continues quite strong i nto the future. It's tied to clinical trial activity? Yes, not quite so directly, hey, we've got 10 clinical trials this quarter. We need an extra copy of Monolithics. B ut generally, there is a strong and direct correlation between development programs, clinical trials, and the amount of modeling and sim elation work that has been performed and therefore leads to a growing staff and our clients to the monolines on on their desktop.
But it's not quite so the immediate term and in the quarter to quarter of our customers came in at $113,000. That's up from $79,000 in 1Q mean that looked very good to me on the fee retention. So from 94%, I mean, you had a great quarter, but it was down from 1%.
And one, c an you just anything going on there on what's what sort of driving that? And we've more typically operated at a mid 90s level, 95, 96% in terms of fees. Our performance I know last quarter was quite extraordinary until up to be complaint that I'm complaining about it, but that's created a peak for which we will always be compared to the dog. So the revenue renewal rate base and say this quarter was kind of that kind of the norm even though, as I mentioned, there were a couple of renewals that slipped out of Q2. So I think we're in good shape, very good shape there.
The components of legal, the number of accounts that are renewing the stickiness of our pricing increase has implemented. All of those seem to be performing well at this point.

David Larsen

Okay, great. And then, you recently announced a new our corporate development effort on. Can maybe just talk a little bit about what that is? Have you actually made any investments yet? And it's my understanding that this may enable you to capture some of the upside. If you work with us pharma client and you help them launch a successful drug, you could potentially capture some of that very significant revenue stream long term. Is that how it works? Just any color there would be great. Thanks.

Shawn O’Connor

Yes, Dave, yes, down some program this year, and certainly looking at a number of opportunities as we speak here. It was really born out of our acquisition strategy, which remains first and foremost, number one priority in terms of the use of our capital in terms of identifying additional acquisitions to add to the Simulations Plus a product and service portfolio.
But in that effort to we encounter a number of situations with companies that have good technology capabilities of both of them for a whole host of reasons, may not be acquisition candidates at this stage of the game and yet their technology that sort of very poor positive go-to-market strategies, technological linkage, integration into our existing technology, all of that -- all things that we can get benefit from more quickly as opposed to waiting for them to mature and become an acquisition target down the road.
And so a number of those opportunities are being assessed as we speak and hope to have claims on candidates to make our first investments of this nature. Yes. I mean, one, a profile of investment in these companies may be companies that their use of our technology there of the charge mentioned may be includes drug development processes by which our investment in them would allow us to have no and play in the success of their programs as well.
Our first and foremost sort of filter, though, will be the technology and its value in terms of our business model, which would be no software license revenue and our service revenue. But it does present an interesting scenario where we might be able to benefit from their drug development program success in the long term.

David Larsen

Okay, great. Congrats on a good quarter. I'll hop back into queue.

Shawn O’Connor

Thanks, Dave.

Operator

François Brisebois, Oppenheimer.

François Brisebois

Thanks for the question. I was just wondering, has there been a little bit of a misunderstanding maybe of what differentiates you from these kind of newer AI drug development plays. And in terms of data, is this -- do you guys have been around for a while and you have a strong data, the algorithms on that it has evolved, but is that something that anyone else could kind of short or accelerate the path to getting to product?
Or is it always going to be an edge for you guys? Just based on some of the time that you guys have been in business?

Shawn O’Connor

I think question, Frank -- I mean, we always get question in terms of the impact of some of the new AI technology ventures in the marketplace that have garnered the attention and funding. And so the question is about and of course, effective here at this one in which the hit we participated in the development of AI technology for some time or ourself, very focused with our ad in the proper direction. And I think that we've got the best of class product out there for that purpose.
The technology ventures that have received this spotlight and funding very focused and other areas, biomarker identification, lead generation of some some nature. And as I mentioned before, I'm quite pleased to endorsing our perspective. We are best-of-breed and overdue doing enough to being displaced by these other investments in technology development is the fact that yet another one of them became a customer this quarter and are using our best-in-class property production tool as a supplement to what their development.
So we are in the context of AI certainly feel comfortable with our position and the success we have and will have in our in our focus to use of that technology. In t erms of data to our second part of your question, yes, we've obviously been at the end game for an extended period of time. Public and private data are the obvious sources. And the public data has improved tremendously, both in terms of its volume and accessibility b ut it's a curation is still a challenge.
So we've got a no leading edge in terms of years are developing a means to curate that data into our lean coal format that can be used in terms of the work that we do. On the private data side, we've got some years are working with collaborative clients and or partnerships with regulatory agencies that are a lot of us access into data that is not readily available out there to anyone.
Others can make partnerships, others can improve it. The duration, t here is always a need on our part to stay a running hard in terms of keeping our advantage in this regard. And I believe we have the capability to do that. And again, I come back to where we apply that data in terms of growth or predictive capability and add the predictors of ongoing evidence of our ability to stay ahead of the curve there.

François Brisebois

And then maybe lastly, in terms of it's been talked about a little bit by a previous question here. But in terms of large pharma versus biotech delever from to biotech from large pharma, just because studies patent cliffs coming and so much of the revenue generation in a selection of growth with large pharma comes from acquisitions of these biotechs, I'm just wondering if for them when they're looking at biotechs?
If you would help them with the biotech was actually using this software as well to compare notes or has that ever happened w here large pharma helps out with biotech clients? Or are they really really separate pieces here?

Shawn O’Connor

I'm searching, for example, where it's not a separate therapies. There aren't they never been introduced and started armed and to a biotech as a result of a large pharma relationship, our Towables may be being used internally or large pharma in assessing some of them in their due diligence process and assessment of their acquisition targets that could be happening out there.
We occasionally get involved in evaluating investment opportunities, but it's not a great frequency. I'm not I don't know that there's a lot of leverage. Probably the biggest impact is, as funding goes ends of the biotech companies, t hey look to hire people. They hire people from large pharma, but our pre-existing as our crude likely see other, whereas they are hiring of a sort of an individual and they're not hiring that, it leads to a knock on our door in terms of filling just toolkit to undertake the upper.
So internally to new biotech, newly funded post-tax.

François Brisebois

No, that makes sense. And if I could just squeeze a last one. And you see the funding was tough for a long time with biotech and starting to turn definitely with the start of this year. But do you ever see, ultimately, if your guys' is one of the big advantages with your software is to cut costs?

Shawn O’Connor

And in our Liko program, I don't necessarily have a good chance of success ultimately, do you expect lower funding if this was to happen in the future could not really impact you at all because the thesis is to actually cut costs or is this now down to five new further distant future here? I guess, you're getting pretty far out in the columns on the spreadsheet of predicting AI.
I don't know -- efficiency will lead to less funding the funding ratio between funding and successful drug programs. I think it's still remaining somewhat and somewhat static, hopefully improves in the long run. And I'll certainly take any lead and how I look into the linkage that to occur that you're describing.
Yes, I just meant like, less dependent on the funding environment, sort of thing for future, maybe downtime or whatnot. But now, we can certainly have impact in terms of the more efficient spend on the funding that takes place more efficient spend of that. But I mean, on the drug program on depending on the circumstances of the identity may or may not require even even efficient spend may lead to more funding for further development.

François Brisebois

Thank you.

Shawn O’Connor

Thanks.

Operator

David Larsen.

David Larsen

I wanted to ask well a question about who's who's new sort of expanded role, I think of Chief Operating Officer. Just, Will, what are you seeing from that perspective? And maybe can you talk a little bit about the reclassification of some G&A costs up into COGS? Why did you do that? Just any color would be very h elpful.

Will Frederick

Thank you. Sure happy happy to do that. I think one of the thing is definitely allowed us to do as a company has looked across the entire organization at the way that we're running our operations of VoLTE services, operations and software operation breast, since we've done the acquisitions, we've always tried to have a one company focus.
So call it, that drives further synergies, leverages best practices throughout the organization. And this was one more step in addition to the most recent ones were sales and marketing consolidation.
Certainly that reclass that we did this year, as I mentioned, no impact on our total costs and the way that we've reported them, but gives a little bit more clarity. And we've tried to incorporate that into the script on our costs as a percentage of revenue and really looking at what's what's our services organization costs in US, where can we improve in utilization rates or allocations of effort to development, sales, and marketing, what's our sales and marketing expenses as a percentage of revenue or what's our G&A spend.
So really, really helping the company focus on areas that we can drive future profitability, get the leverage out of the business.
And most importantly, I mean, we continue to have a focus on future M&A. So having this infrastructure in place that allows us to bring in new companies and keep layering on that infrastructure should hopefully allow us to see some nice synergies in the future.

David Larsen

Fantastic. What I just heard you say it was you had a better look at the earnings per individual in each department in the organization. And that's exactly what I like to hear quite frankly.
And then just last one, can you just talk a little bit about your sales organization? How many on FTEs you have in sales? How many are our quota carrying on? And then you mentioned integration of sales force who is integrated into what was it immune metrics? Or were there other integrations that happened recently? Just any sort of color there would be helpful.

Will Frederick

Sales is obviously very important. Sir, you want to take that one signing? Well, let me kick off. You go forward. All right.
So certainly with the Immunomedics acquisition, yes, we do have that earn out. So there are certain constraints within where we can fully integrate it. But we've made strides in this direction to you've heard us talk about the cross-selling, where can we leverage our customers that we have to sell services software. The different business units continue to work up that value chain within the organization, higher decision makers. We still got about the same amount of sales and marketing folks.
So there's only about 12 sales people quota carrying about six or seven phone; folks that are in marketing and certainly a great addition. Just recently this last quarter with Daniel Szot as our Chief Revenue Officer, China, [I missed that sounds good]. The consolidation process really started a couple of years ago. And at that time before any metrics was pulling resources from the divisions that the time the previous acquisitions and consolidating them together into one, Oregon, one on one sales in March, picketing organization that internally create some efficiencies.
But more importantly, it was a focus in terms of our go to market presentation to our clients as one company, all of athletes to support to upsells and cross selling across platforms and across services to our existing customers. And so that's been accruing benefits here for a while.

David Larsen

All right. Fantastic. Thanks. Like, congrats on good quarter. Thank you.

Operator

There are no further questions in the queue. I'd like to hand it back to Mr. O'Connor for closing remarks.

Shawn O’Connor

Very good. Well, I appreciate everyone's attention today and hope always well one on your side, and look forward to speaking again soon. Take care.

Operator

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day. Tha nks.