Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What is driving the acceleration in platform bookings for 2025 compared to last year? A: Dan Burton, CEO, explained that the improvement in the end market, with operating margins approaching pre-pandemic levels, is a significant factor. Additionally, the Ignite platform's modularity and lower price point compared to DOS, along with the ability to cross-sell to over 900 app clients, are contributing to the acceleration. The sales cycle is also shorter, and they have already added six platform clients in Q1 2025, on pace for ten by the end of the quarter.
Q: How does the Ignite platform differ from DOS in terms of pricing and dollar-based retention? A: Dan Burton, CEO, noted that Ignite contracts typically have more modest annual escalators compared to DOS, which had larger ones. The modularity of Ignite allows for a more consumption-based pricing model, which can lead to increased pricing if clients increase their usage. This model is expected to be a tailwind for future growth. The transition to Ignite may temporarily impact dollar-based retention rates, but this is expected to subside by mid-2026.
Q: Can you control the pace of migrations to Ignite to manage revenue impact? A: Dan Burton, CEO, stated that they are working closely with clients to manage the migration pace responsibly. They aim to complete the majority of migrations by mid-2026, balancing incremental costs and retention benefits. They anticipate seeing improvements in tech gross margins as they progress through the migrations.
Q: What is the focus for M&A in 2025, and are there plans for additional acquisitions? A: Dan Burton, CEO, mentioned that the focus for 2025 is on realizing returns from recent acquisitions rather than pursuing new ones. They are seeing early signs of progress and have increased their adjusted EBITDA target due to successful integration efforts. While they remain open to opportunities, the primary focus is on maximizing returns from existing investments.
Q: How does the sales strategy prioritize different monetization opportunities with Ignite? A: Dan Burton, CEO, emphasized that the primary focus is on new client growth, particularly converting existing app clients to platform clients using Ignite. The sales team is also focused on nurturing existing platform-client relationships, ensuring they receive measurable improvements and ROI, and expanding app usage. The modularity of Ignite facilitates easier expansion into adjacent app opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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