American Software, Inc. (NASDAQ:AMSWA) Q4 2023 Earnings Call Transcript

Matt Pfau: Got it. One last one for me. You mentioned that you are hoping to see an increase in conversions this next year. How — what’s driving that, how do you anticipate increasing the number of conversions that you are going to do over the next year?

Allan Dow: Yeah. We put a conservative effort into that initiative. We have a few folks working on it. We have partnered with Microsoft to get some benefits that we can share down the line with our clients to help move that forward. So we got a few incentives on the table to make that happen. We are also just seeing a migration right now where there’s an acceleration of companies realizing they should not be in the IT services business that we as a software supplier, subscription supplier are much better served at doping so. So we are seeing a natural demand lift on their side as well as their willingness to move forward. So it’s a combination of market momentum and some good hard work from our team and a few incentives we are putting on the table with our partners to try to accelerate that process.

Matt Pfau: Okay. Got it. Thanks for taking my questions. Appreciate it.

Allan Dow: You are welcome. Thank you for joining us, Matt.

Operator: [Operator Instructions] We will take our next question from Zach Cummins. Your line is open.

Zach Cummins: Great. Hi. Thanks. Allan and Vince, I appreciate you are taking my question. Allan, can you just talk about what sort of assumptions you are making for the recurring revenue side of the business going into this year, it still seems like a little bit of uncertainty around closing cycles. So just curious of how you are thinking about the guidance that was set and the assumptions that were made?

Allan Dow: Yeah. In particular, our greatest uncertainty is in the short-term and I think if you listen to the economics minds that are out there that probably know better than we do. We think the most pressure will be here in the shorter term, the remainder of this calendar year. I have been through enough of these cycles. This is my sixth one, Zachary, since I have been here and what we have learned over those time periods of thrashing through those time and time again is that the Supply Chain market is an early indicator of a slowdown and they are also an accelerator out of a slowdown. So I have a belief, we have a belief that things will stabilize and really probably just get back to normal as we get into or past the Christmas selling season this year and for us in the Supply Chain space.

That precedes us going out shopping for our presence. They are putting that product on the shelf. Our brand owners are putting those products on the shelf in the late fall and ahead of the Thanksgiving season. So we feel much better about the back end of the year than we do the front end. We haven’t given up on the front end. There are good active projects going on. There are many companies and a number of segments that realize that they are in an inflection point in their Supply Chain and recognizing the need for Supply Chain Planning capabilities more than ever because inflection points cause uncertainty in how they should staff their inventory, hold their inventory, move their inventory, what products to get, what’s going to sell. So they need all the help they can and they are moving forward on these projects.