Cody Slach Director of Investor Relations
Mike Willoughby Chief Executive Officer
Tom Madden Chief Financial Officer
Jim Butler President of LiveArea, Inc.
Zach Thomann President of Priority Fulfillment Services, Inc.
Mark Argento Lake Street Capital Markets
Ryan MacDonald Needham & Company
George Sutton Craig-Hallum Capital
Kara Anderson B. Riley Securities, Inc.
Call transcript
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Good morning, everyone, and thank you for participating in today's conference call to discuss PFSweb's Financial Results for the First Quarter Ended March 31, 2021.

Joining us today are PFSweb's CEO, Mike Willoughby; and Company's CFO, Tom Madden; the President of PFS, Zach Thomann; the President of LiveArea, Jim Butler; and the Company's outside Investor Relations Adviser, Cody Slach with Gateway Investor Relations.

Following their remarks, we'll open the call for your questions. I would now like to turn the call over to Mr. Slach for some introductory comments.

Cody Slach

you. Thank

in The Investors further, All make other full confidence, statements as facts PFSweb of and forward-looking go is and similar the webcast safe be to retransmission available concerning the the will following than certain Any via pfsweb.com. available replay target, release like estimate, are statements. any Eastern starting believe, way statement. forward-looking expressed will press in found remind website through used statements. our project I'd we replay as I'd filings, a.m. The without non-GAAP this May will, in the presentation to as XX, redistribution, also remarks historical expect, Before intend, company's be anticipate, guidance, of words are the like to can website forward-looking in under available call this identify for forward-looking used metrics at PFSweb other call relating to statements today's this The everyone the morning. be link strictly typically this statements. consent provided expressions disclaimer XX:XX prohibited. harbor section this as on well in at or of call rebroadcast well written

Mike? I'd to Willoughby. of call turn Mr. over the PFSweb, to Now, Mike like Officer the Chief Executive

Mike Willoughby

morning, and Cody, good everyone. you, Thank

executed two a second levels we Dallas recorded in new the needs the us as in PFS newest highest fully we and business Las us level Our In have high service XXXX. units allocated the since sales XX% achieve tracking XXXX bookings prompting the XXXX volumes quarterly current strong separately bookings quarter we our in facilities revenue the record continued operations our PFS, those as year-over-year performance PFS. and both and fulfillment from highest LiveArea, space momentum expand clients, has sales Vegas, increase allowed of achieved by teams in increasing since began segment's level fulfillment fee into sales resurgence and further. at carried for business in bookings to XXXX bookings in units. to across of our we This a in QX of Buoyed first already U.S.

we approximately its expanded over outside our initial addition, holiday In have momentum XX is our in of QX what XX the as continued of modules footprint connect QX store deployment retail connect year. in end to facilities stores this to be from X planned we retail our by

margin well We experience and new pressure our workers, fulfillment of PFS the we Zach And client detail adjust in but they on I'm that to agility facility around costs client agreements we labor these consistent share year safe believe contemplated are more healthy, current stabilize. be to are in continue U.S. demonstrated. team call this renewals. have to committed proud will we and the wage for productive. supplies to team costs we higher about keeping as current as later client and frontline currently related sanitation to wage While rates recent prevailing engagements expected remain PFS has of our as dedication costs targeting our increased initiatives, QX the and operational for

sales During pipeline of our and both in last the the quarter, recovery sales during year investment QX. lows of our teams benefit bookings ongoing the and generated of the we pandemic the QX reflecting from and LiveArea, record booking marketing our in

the strong the progress rebound Jim's we to of sales remainder this have the on and e-commerce our we time. strong the on brands provide year. will to as our has so leadership across of that starts bookings well some to proud call since The responded delayed for experience year Jim the forward revamp the the outlook did significant in the rapidly we months, challenging continued built the our have ability and of online solid color with team to crisis. greatly X to presence date. softness the am we be proud have first their onset the we through around project segments discussed, have. look year, over as both demonstrates continuing seeking previously I strategy under on success and pandemic more XX momentum of the LiveArea's to the of of resurgence and increased, far As driven overall demand optimize course very business We later the resources and months as a LiveArea seen our a volumes way order our to I'm capitalize But of foundation

Now, on to over financial I'd pass to like Tom to greater our provide the QX. call during performance detail Tom?

Tom Madden

all and noted, financial first otherwise Mike, Thanks, morning, Unless good quarter to quarterly everyone. comparisons of XXXX. are the

or quarter. XX% increased in fulfillment fee increased decrease during to the increased million revenue during softness XXXX primarily PFS to million. to quarters, mix costs for in PFS percentage due remainder strength as fulfillment of $X.X year, fulfillment consolidated revenue and compared XXXX revenue of technology-related a projects Service these the XX% XX.X% impacted well PFS was margin service as from LiveArea and December as the quarter For result June compared services first million changes sustained the engagement our during levels generate Service COVID-XX of pandemic to by while QX, in certain fee a with service XXXX LiveArea first the driven service the was the by fee project to the projects. LiveArea $XX.X quarter revenue U.S. labor by generated delays client and XXXX decreased client fee sanitation as XX.X%, the our continued by revenues during implemented. in potential fee revenue $XX.X are as of activity to gross quarters in prior the new million. are existing and cancellations client fulfillment-related bookings March Significantly service XXXX higher in primarily towards XXXX and centers primarily increased improved revenue to costs of causing and $XX.X by and of of fee bookings September expected

estimate DCs our QX, rate During that U.S. billion. costs an the we impacted incremental by $X.X approximate our in labor increases

Additionally, gross start-up margin for the the PFS IT-related technology-related compared as project, to and to quarter. segment continued impacted reduced by activity year ago be

segment, we balance to compared COVID-related year. $X.X continue that within EBITDA it quarter on our segment's as by as our in LiveArea, the of client was LiveArea weights continued to sales. on somewhat to EBITDA a incurred though XX% first in million well was call By as earned million as LiveArea March incremental PFS adjusted benefit we prior during in as for gross expectations to costs on range, increased support certain projects of compared XXXX million and result year. reduced the quarter comparative costs growth margin product XX% be of reduction track monies Our period certain This line well EBITDA indirect the $X.X incremental than same decreased $X.X was forecasted lower the the million on incremental $X.X face as costs and XXXX. in which the to by adjusted with conference of remain initiatives to the of typical technology-related Adjusted XXXX the

in At totaled cash million was in sheet. million. XX, we XXXX, to to the excluding total liquidity capitalized as and million. operating and and debt comfortable are - $XX.X This industry through our a of we progress position March $XX.X with of approximately future debt, balance out we XXXX, resulted $XX.X we changes are the well net navigate coming equivalents our Turning leases, be we believe continue cash pandemic. position to Overall,

new the ramping approximately including $X.X first through funded And our driven were and XXXX quarter by in primarily this capacity falls of at million, capital expansions, capital previously operations these fulfillment stated center the expenditures other capital also expenditures and expectation. within expenditures were debt. our Our

our to on Moving outlook. XXXX

demand for segments. We in fees both expansion service to our strong e-commerce to continue business drive expect

reiterating outlook. As such, we are our XXXX

COVID for our to revenue, comparisons was been the estimate e-commerce in retail due However, in PFS would to closures $XX year frame footprint added fee to XXXX, last higher to our $XX we our XXXX have business calendar roughly year's million which incremental expected service shock what to our XXXX. than revenue million operations help that to

back Given to were outlook revenue in of we year. the more XX% brick-and-mortar LiveArea continued retail, reiterating today's rollout volume XXXX. have to are for we XXXX of between this to where growth consumers retail fee the expanded time XX% this bring With optionality in the today vaccine, backdrop will which mind, to gradually service relative sitting compared calls landscape last at

revenue fee generate XXXX. For the to X% PFS service we to segment, to expect compared growth XX%

in capacity delivery in XXXX in expansion to We to inclusive PFS also well EBITDA our additional both XXXX, margin resources as expect sales, of and support and sales investments adjusted consolidated as to continue compared LiveArea. in

relation to moderate XXXX targeted QX fee Specifically, service turn the prior to modest in call the XX% This Jim? quarter. generate to through concludes XXXX our quarter, to and to I'll to do current adjusted revenue the EBITDA for expect level highlights fee in to LiveArea compared LiveArea. generate walk during challenging of my we improvements to increase the these expect XX% March increase quarter We revenue revenue do year, to compared June as prepared a a as the we expect over remarks. PFS increases service XXXX Jim comparable quarter. operational in in against

Jim Butler

set all-time our and million work annual an backlog result again sales morning, progress The good now pleased of as include record quarter, QX and development estimated steadily in proud steady compared $XX.X million to or value, very drilled $XX.X to ACV, last on projects, year, an record. last during quarter everyone. $XX.X totaling which revenue our business and have sales and XXXX. contract double-digit in LiveArea LiveArea in QX a achieved was behind recognize is growth a the for we in Building solid of statistics ago throughout all-time we're performance of combined to that sales previous the record year booking to Tom, converting Thanks, QX year in drive we engagements million, we're

this project in to QX. During projects combined they estimated backlog the we for have year worth color X a revenue estimated XX value. in XX for quarter, booked combined performance million compares further project provide the fueled in added the then This logos where we ago million quarter, quarter, our further during on value $XX.X projects $XX.X To that XXXX. new

growth as our we and look year in very XX drive very estimated booking the of in enjoyed year also engagements as strong million difficult in engagements a compares drop in ACV. last $XX.X XXXX, We with XX% least then during QX XX the the ago combined in for worth XXXX XX% project quarter. for million I'm We QX to course, the last a from the in at by quarter very the record a earlier. mentioned sales in our a sales worth ACV to of that's visibility I'm in of and to LiveArea clients sales to work engagements pandemic year $XX.X This estimated came building of fueling efforts into grow the client delays causing QX onset near business rebound XXXX team QX proud encouraged impact and prospects, our and testament end recovery and year, the LiveArea sales XXXX performance our marketing with XX% momentum pipeline and the the significant and to XXXX. and in made of of last of our hard record bookings The pandemic. Mike sales over QX combined

senior we Director XXXX, to with in firms of Klarna, out continue the the team technology spending As recently years of contributes in years managing leadership spearheaded look Rainbow, in most here than formation alliances commerce, digital Yotpo. services and addition career, new industry sustain leveraging to to forward we of technology and during take products their Ben Europe: having experience planning, We growth in and advantage with experience more in the astound commerce such as XX of Strategy Alliances increase commerce North double-digit and and Senior partnerships and brands. deepen LiveArea's commerce, Ben We're talent our Director Samantha Mansfield, coming two leadership designing in as EMEA. with foundational look recently our build America. adding in announced of our brings EMEA; EMEA. global also veterans Samantha many we of to iconic Salesforce services presence Adobe, across his top XX

Delivery. announced of we the Program President of our week, last as of Michael our President Vice of appointment Just and Growth; new Area Anjum Vice Maione Merchant, area

and markets work clients and Michael our design our our we in growth will enhance of bring fuel perspectives technology, grow. As our look differentiate expand portfolio valuable to further capabilities and and to new delivery to help with leading Anjum

strategic without helps verticals level like and the in This digital their takes businesses. customization, and experience look partnerships create on service, sites In Threekit, reality in interact technology We customers' be products BXC more. time. our reality and next with support apparel clients visuals to XD Through to shoppable and are to the our our the through within heavy commerce accessories, photography. this the use augmented ROI tech-enabled additional XD and BXB real photorealistic announced also like images able we partnership recently for interactive product customer portfolio. our growth adding of drive which will the clients and desire with see augmented can and buyers experience products they our for furniture, their to

As we're pipeline proud of and record the back sales With our leadership the QX we driving growth continue new of over Zach? in multi-cloud, services, transformational very momentum to Zach. new growing booking, I'll call targets turn through work our our XXXX, to that, business. continued opportunities, rest of

Zach Thomann

Jim. Thanks,

momentum momentum our year-over-year global strong season, peak a orders volumes outpace centers, clients, PFS year in XXXX that satisfaction and compared fulfillment we've where and been ago of contact significantly and to increase a over the and XX% center throughout to million entered comparisons, with X.X able continue on representing the quarter. particularly behalf our to fulfilled team ratings operational record client following Fulfillment Our QX. successful high continue

the our ACV X performance client operational estimated clients ago recovered engagements take in combined In engagements enhanced new large quarter, signing significant current in quarter, the in worth and reflects combined addition teams the with a estimated X compared some and also solutions more expanded geographic sales then sales our footprint. fulfillment momentum sales our within than the with $XX.X engagements, to quarter. million strong as This new and $X.X a in activity capacity million advantage to year of engagements some increased they ACV new

fulfillment Vegas jewelry In two include demand several clients an year. includes short-term have foot projects QX. expect These $X opening, project This use previously expand that expand of the after addition, capacity than feet and RetailConnect a fulfillment XXX,XXX into expanding continued expansion later we facility, interim square two to in million our contract combined we less mentioned, long-term where we booked the in to year. projects increased value With making for we are project iconic months to estimated locations. facility XX,XXX brand during worth centers, our accommodate in key later our contract a this Las anticipated an square by another

area our make services company the greater will facilities extent Canada. for As and the large utilization to fulfillment house a distribution reminder, centers. also regional Toronto contract of in we With soon in our fulfillment care our go skin facility United an this operations to fulfillment transportation and States a that will excited of our the to management Memphis and the are use Vegas QX, of set expand live even from

in client As pressure to sanitation our in to to our wages we stickiness opportunities. Mike ability this and client engagements growth weathering and mentioned, key of believe continue pressure legacy current margin facilities. XXXX, that the and first of within our certain margin our relationships, strengthening Tom the COVID further market the position competitive future previously is of related half within I short-term our capture measures to and elevated experience

profile one Wrapping comments up successful on holiday market of follow an we in modules more RetailConnect the to have conditions more more XX with international collectively the of currently and the over on will built X of clients of update client have RetailConnect as and client our wages XX XX suit. engagements improvements since rework an my continue to our We modules for last our expect clients and the begin RetailConnect we these support and with to than X-store than apparent fulfilled as anticipate To profitability with to beginning contract structures store exciting into the well as that supports U.S. stores, QX. our quarter. to extension the stores existing the we we and year. each announced existing ship that orders stabilized gift currently date, personalization initiatives; deploy BOPUS modules from center we to add margin XX,XXX seek end in activity commensurate this of expand at store than subsiding, new live line the pricing As client target by in wraps distribution transfers. deployment

and retail discussed margin, management As a products like and the our previously operate a offset margin expected connect would the be reminder, to pressures these higher fulfillment-as-a-service time. products platform over of at help other order growth

connect already omnichannel-enabled technology next teams receiving the productive and look our feedback stay order of of the to positive to am months. drive ease over this further We the that forward management are client's year. stores. and of couple we rollout to about retail continued And integrating completing I poised remainder healthy, and distributed growth the U.S. the have through proud our

these to current We will and working will keep the call our to confident efforts. model Mike of well that our for and closing fulfillment us Mike? prospective partners, and flexible continue needs pass operating the evolving are we omnichannel client I'll back supported remarks. support now through

Mike Willoughby

Zach. Thank you,

work of of rest solid tailwinds XXXX, Our progress financial the out the of as e-commerce quarter first operational us coming throughout and to pandemic. advantage we the the foundation has for a given take

progresses COVID North must contend we still and America recovery Europe, in complications. As ongoing with

or recovery, post new time pricing in to to our wages. and COVID of state the we adapt business increased reduce cost adjust a reflect for still PFS we and COVID we based over reality the ultimately workplace safety our are evolving As eliminate have to working

we leverage organization in our However, agility expected is benefits value, our drive which line pandemic our seeing we the scale of are foremost to and are profitability objective. shareholder that drive well I'll working future. in created reiterate that context, our to benefits our to we a as as the the for we what's have demand currently post operational trends pipeline are bottom Within as this expand prepare and

operations distinct progress to reflect efforts shareholder make our we our continue and to LiveArea good PFS ongoing Regarding restructuring the strategies. business go-to-market our create of value, to in and

toward PFS Much competitors financially teams businesses our enhanced this internal and then moving segment for entities and Over and our an two functions, two be the direct of for the to systems with We organizational we which visibility years, and business also which competitive an go-to-market to transparency been that facilitates in have with leadership been opportunities LiveArea position financial PFS be optimized to model, to of an strategy LiveArea to to and to effort preserve refining LiveArea consistent improve business optimize provides first and establishing for of are market towards X a we aligns PFS began restructuring, our competitors brand We've completion individually. steadily would win plus which to past moved This positioned We operations in approach within value us engage to through relationship. also and provide segmented landscape working PFS business unique year, shareholders. the LiveArea year be with their further in our who work distinct will operates. back-office this clients progressing and workforces, end-to-end the the completed against each the work units. by the in our this each we will of legal half the approach. such each this

our serious are of closing North Europe surge. pandemic, with through more in and experiencing that while from recognize a that important time far India various difficult moving America stages recovery second and are it's very I in friends Finally, colleagues the a and COVID

we family our and strong especially or country. in presence the friends workforce in attuned that in With are India, of India to difficulties with the global

are with teammates everything their the do safe me are are we and and and in to a we further in colleagues we've encouragement, colleagues India still we families COVID to are LiveArea from thoughts the complicated and all continue and of upon through surrounding We ahead. building we but within communities driven but our citizens our living them your experiencing prayers. greatly We a many the support virus. our workplace and join suffering future, PFS of throughout progress about to both optimistic world, strong can in Please keep in look our and virtual the keeping all year forward

happy question-and-answer. point open business making including As updates our exciting engage questions. our to investors for as up available always, with to this we're and and Tom ourselves call ready I and are by we the answer phone share at questions, for Summer,


from [Operator Instructions] Mark question of Street. And Argento Lake our first come will

Mark Argento

Just a couple of questions.

for maybe on on off, LiveArea. Jim First

term? the of on. are those their COVID around longer people, kind of a Are little color little Anything a more a terms have little you In cycles, RFP seeing you give pick-up can sales hands bit they bit activity? more, us that thinking now

Jim Butler

absolutely. Yes,

our We opportunities. and in are perspective, to to they our from, great then so for momentum. a bookings up $XX nature not increase million seeing in million drives that been are the volume just our my that up, QX lot partially we're really - seeing really the have definitely really be obviously or only say, was are in capital these that fueled ever so way rebounding think is us. $XX.X to helpful obviously, front there's over great sort And opened up past, that months. we QX more good From like deals was sales for rebound. XX% of and QX opened And The come very of QX, seeing capital through in transformational seen in QX, get to sales relationships I get coming we starting so of in have investments that's and multi-cloud, an deals and in the bigger team marketing in than than partners in projects with larger we've a Salesforce, and before. our

bookings followed XXXX. remember QX sales QX QX we and back-to-back, in sales record record booking you of had of a If by quarter 'XX, about

our backlog of which in competitors helped that claim. not to of XXXX, were able really All many fuel growth our

So, drives excited of we're the ever into that additional into our momentum started XXXX, how the better business within maybe we're here backlog QX of career. my I've that balance The seeing momentum and our year XXXX. visibility the we of heading seen the in have than the really about QX that business within into business and is

Mark Argento

mitigate then, that's - for to Great, And I was figured in just quick it working some comes mentioned - you're Zach. that a situation it your unique can through renewals. clients your guys when one his just prepared this dealing helpful. how labor know on with you out Mike, to of labor? to the remarks with talk you that accounts, you had mentioned had how think And kind have try cost the with issues of I

Zach Thomann

Certainly. that There's few we're doing. quite things a

with contemplating First we're existing labor which in certainly the at opportunities, be would we're by costs each and as look new we the submarkets operating. foremost, of

then as and would contractual a we're we're wages where it's ensure inside the we're those of with renegotiate it's engagements, remarks, we that the of So have very market we language up successful activity, to stabilize of renewal and clients' the any currently sales legacy with as it expectations taking having And be over for combination the move in that But up alluded seeing. they renewal, next over with around the as help a legacy, leveraging not naturally quarters. prepared wages with clients we as Then as QX plan come or to look we the for XXXX a time. we're to with margin will contract. that client with where contract, bucket an see of new engagement line that cost-of-living in certainly, moreover, two bookings Mike of pricing activity proactively kind associated action adjustments in third to the those opportunity renew is what line to lastly, our not the


Ryan MacDonald comes question of from next Your Needham.

Ryan MacDonald

know guess year-over-year for you think the on that past levels in new question sort SFE of Would thinking year? of the I be in difficult fulfillment It a mentioned about I you PFS just second is you've that the more comp. first love how are versus, for terms added Zach the up capacity outlook and resulting that just heightened Mike like ops should GMV expanded here sounded that quarter. general - mix facilities revenue you have you're to versus over despite with

Mike Willoughby

that quarter I'll let you expanded as commentary, it want provide? the some levels a the is details of last are current to we taking detailed client addition the sustained Yes. engagements we Zach, volume, not do probably that Zach in of saw let the difficult provide clients have of that with combination well on much at you the of helps of us top driving to year of that the advantage from deal store new but clients, QX in definitely footprint with current that comp. as have all sort some volumes driving but closures so growth the of

Zach Thomann

I nail the right on think Mike. head, you the hit

there's challenging a large see produced significant we around said, to comparison significant That organic which presents impact that organic in a us if still you think of e-commerce about of growth existing certainly, for year. the XXXX, it growth activity So COVID to in being current normalization related QX clients. look quarter, given you when back the the from

as with there. that the to opening sales in QX and QX half are in beginning QX, and Las in of well bookings programs in captured Vegas live XXXX coming With the those go facility of the online the back we the clients

unit in the line center additions incremental organic new led as is and It's also seeing the come growth, that combined the RetailConnect well. contact still certainly driving being you top volumes services like fulfillment. that So like from by with We're PFS revenues see. business

Ryan MacDonald

yes, the into and as conversations success with with increase I customers, these RetailConnect is, well new follow-up expand that more is brought to wondering I'm and focus to And our - customer. great way having with wanted engagements? you're that's your my being a see of conversation your the where footprint a, engagements on you. as Got expanding to continued guess, I those in prospective new new as more flexible RetailConnect success

Zach Thomann

is. it Absolutely,

our So at I fulfillment and look if distributed footprint. other think RetailConnect products, point directly you they at really a

fulfillment you conversation. as but leveraging speaking, delivering is with, locations, it's we that closer at brands increased look customer of to to we've more top-of-mind stores deal and getting the piles inside marquee and each our inventory a paramount frankly effectively So notes, the of the

closures with existing that as that's look active clients we're XX has last over store in I well product retail particularly the think of accelerated our it's top conversation saw meetings So the pipeline, adoption of at in we having. certainly case the and that strategy as reflective an pipeline. with year in last interest and And months, our activities prospects funnel we in as that our


of from Your George comes next question Sutton Craig-Hallum.

George Sutton

being I'm go-to-market curious operations, has from how PFS changed multiple strategy? locations In you given with that serve locations, the differently that geographic are your to different words, the able you other selling have. number customers of a

Zach Thomann

the points quickly I look really at and and Las deploy the in And been after be inherently of question changed We're that strategy. our is and but conversation mentioned to is the Dallas for a the clients. But before as kind buying closer our as avenue backdrop are how class it well as rapidly having, which terms how consumer the go-to-market to existing of fundamental end get still closer shift strategy who experience to about footprint. to it our to think we're our e-commerce initial into targeting at continue the in a and to in don't doesn't I going RetailConnect decentralize that, audience expanding an the we're clients, there's of customer premier with having really, looking it's similar also clients of strategy the of e-commerce Vegas part as ways conversation fulfillment. That's brands. of the we're deliver that do we approach directly fulfillment our and prospects change

George Sutton

say know already might holiday might occurred system, year's what maybe well. or of very as think the on performed which I in last of result? to was when perspective, out context churn issues coming churn in relative and curious, terms a I season, of stress of I'm the we you kind have demand understanding, So that from we a know frankly, unprecedented

would these legitimate do of be on The around QX you that? churn try into we reprice other expect to we as go question contracts, some pushback and

Mike Willoughby

Yes. a great question, George. That's

PFS year. it's think where that appreciation So shape first the and the the we pretty good do very helped lose much in at really of we're or a the always out a with we client to us typical coming sort had this the loyalty this on strength, think know real there. a the if course, feel And the to we performed renewals some I you know portfolio for year, I business the client has clients' a like level strong. the loyalty renewal half holiday year for time you're our maintain competitive of side is point around lot visibility of stickiness factor of And client of that as of looked our we we at in to at we business about and and a our has financial clients high and of going where engendered of this situation

about the feel having churn. we as half good year think I far the of not as unexpected back So

that to to going and got quarter don't conversation would have with The surprises, sure we right is them can horizon conversation. with for one give You after now see same think the perspective, we we're concern. cause that us always the make that pushback back shot this From year our client, to have anything but interesting. question that we've we not want on quarter

earlier, happen So stabilization to believe starting now. referred we is is what to which the looking we're we that for

at if clients this into to we'll of have believe we submarket. targeting have QX. like discussion. seeing we that the a reality QX, we're we long-term to feel point, reset Or surcharges more able we with And don't in conversations the stabilization, we did be those are part year. first will like But these legacy that then about be we're holiday do we around have should that last that that what conversation do So each in contracts around

I to So easy currently be targeted conversations. expect QX. for don't there that's

It that we own clients when reality as their our operate new it's had to last won't back you've will to hourly - as be challenge those to holiday a some far surcharge pointing this. management business think they not period. conversations. clients conversations our been surprise have as I evident teams But for have a clearly a QX concerned. It's have us we And where there's of wages they renewal outside our unprecedented to do evident are everybody. workforces. to It's

a a that be surprise. it's situation it So macro shouldn't

George Sutton

now, didn't you Obviously, about look of I with if we to thing, just what become that. RetailConnect few walk But a just meaningful. last worry XX like? was the One situations, through it it starts more Could when could. economics really much

Mike Willoughby

at a the costs. module But where provide I an model which economics that's base the it you've half But store, this is Yes. client store, of sort year, a would back for around minimum. And deployed the charge look that some opportunity got data variable much us expected a variable exceed minimum think the in might we of it's cover be there to from in deployment. per one as to operational charge the each pretty intended is actual

order that processed have you charging by a gets we're what the model is system. SaaS-looking where through So the

system, margin and generate the So volume revenues we the the the that more those more higher the on volumes. flows frankly, through that is

compares the model. is can really a to say best SaaS-type I So thing it

earlier, on service improving reasons client transportation costs, large Zach volume particular our mentioned because are of a our customer percentage ambitions those store inventories. revenues and this to footprint, flowing our so minimizing dependent of through. orders their has from do of making And In case, use the store clients'

we're in months year. done giving first material volumes worth the that impressive the that enough couple half with it's see the back optimistic of color of of So, some the revenues we'll deployment, you on some


next Kara [Operator B. of from Securities. Anderson Your question Instructions] Riley comes

Kara Anderson

things for on how X any much have targeting are ahead renewal a business asked. up already XQ? you or to on And reset PFS, I of kind just of be in couple of that year? guess I the were is follow-ups adjusted then how of much

Zach Thomann

up last have are in going of year being years quarter for our terms So year, year, in X renewal. given of duration. of we renewed That said, this all typically are X handful Contract the in actually a as we that first over half the as engagements. back typically contracts well to a larger client

revenue X- X-year they're So fresh all in cycles. to

So aren't the when had adjustments efforts activity we client X over of I be on significant consider legacy said, certainly probably require rest an X pricing being to don't not the of perspective back the clients from our of that a or those renewal, all I renewal work And based signed months. in year they're X/X anticipate that have the the of we've contracts last there, brought resigning and when half on out adjustment the on up amount into to based around for that portfolio that they're the any portfolio. of

Kara Anderson

pent-up that then, to you Got the this it. color that can today? PFS [indiscernible]? you demand? a of little Or around up And you're some do you're Is winning kind pick a provide at new of business expect that booking function

Zach Thomann

sorry, it? I'm your question. I repeat you misunderstood Could

Kara Anderson

course new elevated to this that going you a Or The booking pent-up over function level a see that of would the think you're do that at Sure. is demand that business XXXX? - expect PFS is of new forward? you like

Zach Thomann

both. I it's think actually

consider if you in what XXXX, We look for see resurgence representative of around pent-up you demand. the be PFS year XXXX. sales back of in typically, bump of a certainly QX the of a saw saw significant terms top XXXX, half the that at would calendar of So we trends funnel natural I and to activity inside cycle in of

of reevaluating and In web, into looking that for creating larger channel like lot the looks segments direct-to-consumer to entire across that's and of grow a them channel business. placing the certainly that, believe are as investments such, that entity opportunity customers what contracts though, addition both big PFS to that more of in I and prospects across


Your next [indiscernible]. comes from question

Unidentified Analyst

But understand what's And for some Can speech improve moves the the prepared just making very transparency? you and of It's help end one further some goal your I organizational that the there me kind at Tom. changes. the missed regarding or of to just there? the Mike overarching investors help of comments your you're

Mike Willoughby

the market. part our couple had we're a past to for LiveArea, regard in positions businesses. competes true of in need It's to is with that The businesses, and the reality to Sure. market a competitive strategy a other number that to consultancy of the we've And going the with way their LiveArea thing years competitors. actually professional with services two going go-to-market. services professional we it's is same both with these head-to-head really a And e-commerce align over to that us of PFS particular win, have business,

workforce year, is the unique reason business the our and the past that want about how the to the possibly effort volumes, optimize need really as operating surgically we businesses dependently segment to transformational-type each able We the projects preferred step competitive is we're that So go-to-market opportunities we see LiveArea, with same business. performing. back as to you the and and platforms back process that largely have the be more so obviously took, And going as branding in complete landscape. with to up PFS and respond ago, that fulfillment those shift increase that we regard that units align these X.X, can which working the are first of X each operation mechanisms we're investors coming over that on. that to that such was And in followed business and the that two showing we've could at segmentation, are rapid opportunities each can. and we time, etcetera. in a for the these way to financial the years more strategy business with we two detail the This office, seeing systems, just to legal the are selling model to internal The was seen in into way and then entities

want value we can think that company. that that should we've possible understand of I'll through these you they're to that have say look preserve The pretty the to and a shareholder clear our how process is performing, we positions is of last businesses businesses we creation. you options sort generating other and value that this the we as the have view each the represented to us to total has regard on - table that investors financial combined to so provide reality with to able the in the value options that as as as what that need different public thing be going and shareholder been on be value, two always at a And for how dynamics, right our

Unidentified Analyst

we already not to costs and in that's talking more are divisions? the within to it divisional is going be captured it's corporate, it's more Or allocated - a and accurately a captured up? costs be lot going to Are unallocated the divided those Okay. of just - just

Mike Willoughby

Yes. Go ahead, Tom.

Tom Madden

to those of over tied particular We've been cost trying more the of to business last individual more the and business directly towards of years couple are of working that segments allocate the the units.

business go cost refine services to units. we allocation of to as corporate and we so an And reorganization continue those to the drive will that process shared amount continue this through increased look to methodology individual

Unidentified Analyst

just did you wrapped mention where And you have a this it. did frame you hope then, up? time got to - Okay,

Mike Willoughby

I for think the organizational The segmentation, of we're half is wrapping looking in up primarily this Yes. the - financial year. what probably we restructuring year. next the fiscal aspect do first at additional targeting of The

making wouldn't year. make a the middle of As fiscal we in a far change changes, as

So financial in next that year. come additional visibility would probably


question-and-answer At will remarks. this Willoughby back turn our the over time, for I closing session. this Mr. now call concludes to

Mike Willoughby

and a and phone August. I to in Tom as always I continue as attended well. and report meantime, Jim you, the Thanks, our available quarter morning, Summer. by that analysts to involve this to investors the when second Unmute. everyone speaking In with said, we can thank Appreciate Thank Zach forward and look like and great we that. I'd call our be day. results have