Copperleaf Technologies Inc

TSX:CPLF

Earnings Call Transcript

[Operator]

Good afternoon, and welcome to Copperleaf's First Quarter 2020 Results Conference Call. [Operator Instructions] This call is being recorded on Thursday, May 9, 2024. Your host today are Paul Sakrzewski, Chief Executive Officer of Copperleaf; and Chris Allen, the company's Chief Financial Officer and Chief Operating Officer. Before we begin, I'm required to provide the following statements respecting forward-looking information. During the call today, the company will make forward-looking statements that are based on assumptions and therefore, subject to risks and uncertainties that could cause actual results to differ materially from those projected. The company undertakes no obligation to undertake these statements except as required by law. You can read about these risks and uncertainties and regulatory filings that were filed earlier today. Also, the commentary today will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Reconciliations between the 2 can be found in the company's regulatory documents, which are available on sedarplus.ca or on our website. In addition, commentary today will include key performance indicators that help elevate the business, measure performance, identity trends affecting the business, formulate business plans and make strategic decisions, such key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies. And with that, I'd like to turn the conference over to Paul Sakrzewski. Please go ahead.

[Paul Sakrzewski, executive]

Thanks very much, Andrew, and good afternoon, everyone. Thanks for joining us to discuss Copperleaf's 2024 first quarter results. I'm excited to provide an update of our performance since our last call and share some of our plans for the future. As is our usual format, I'll make opening remarks before passing it over to Chris to provide a detailed review of the financial results. Following our prepared remarks, we'll open the call to questions. During the first quarter, Copperleaf performed well across all of our key metrics. This was highlighted by a 32% year-over-year increase in annual recurring revenue and a 32% growth in our backlog, which reached a record $145.5 million at the end of March. Our robust ARR growth highlights our success expanding our client base and adding to our existing clients and provides us with visibility for a consistent and predictable growth of our cash flows. I'd remind listeners that as we become a predominantly SaaS company, an increasing percentage of our expected annual revenue is recognized from contracts that are already in place at the beginning of the year. Further to that point, of our Q1 closing backlog of $145.5 million, $79.5 million will be realized within the next 12 months. This gives us confidence in our accelerating revenue growth for the year. First quarter revenue increased 29% year-over-year to $25.8 million. This revenue growth was driven by a 32% growth in subscription revenue, 27% growth in services revenue and 20% growth in our perpetual and term-based license revenue. Results from the first quarter highlight the benefits of the operating model refresh we implemented in 2023, supported by continuing industry demand for the solutions we provide. Throughout the first quarter, we actively expanded our presence in core sectors while gaining momentum in new sectors, creating opportunities for future growth. We reinforced beachheads in established markets by adding to our footprint in transportation and upstream oil and gas, while further globalizing our client base in the water sector. In March, we announced that EDP had selected Copperleaf for asset investment planning for 2 of its distribution businesses operating in Portugal and Spain. Like many energy companies, EDP must overcome a number of critical business challenges to achieve net zero carbon goals. We believe that the Copperleaf's solution will support these 2 operators to take a proactive approach, not only to decarbonization, but also to embedding best-in-class risk management and will provide the agility they need to plan for an uncertain future with confidence. As transportation emerges as an important and relatively new sector for Copperleaf, we announced during the quarter that Vancouver International Airport has selected Copperleaf portfolio to optimize their asset investment planning. By utilizing Copperleaf software, way we are will be better positioned to understand where, when and what to invest in, to appropriately mitigate risk and most importantly, achieve their ambitious strategic goals in the most resource effective manner. In Q1, we expanded our growing global energy practice with the addition of European energy infrastructure company, Gasunie, a leading energy network company operating in the Netherlands and in Northern Germany. Gasunie launched a European public tender in late 2023 for a risk-based asset management software solution. And following a thorough competitive evaluation, Copperleaf's portfolio for risk-based asset management emerged as the most suitable choice to meet the company's requirements. Gasunie joins a growing list of European gas transmission system operators using Copperleaf to make risk-based asset management decisions that maintain the safety of the network, achieved strategic goals and maximize value. The Copperleaf solution will enable Gasunie to face the energy transition with confidence and ensure the reliability of their network. In addition to new client acquisitions, our client success management team continues to play a crucial role in shaping the client journey and identifying opportunities for material expansion within our installed base to drive even more value for our existing clients. These efforts resulted in expansion in our net revenue retention rate to 113% in Q1. We are a vital part of our business and ensure that we understand the unique needs and goals of our individual clients and proactively address any challenges they may encounter, further reducing risk, enhancing client satisfaction and driving lifetime value. Our partner ecosystem continued to gain traction in the first quarter. Partners played significant roles in wins across all regions and led to increased lead generation, client satisfaction and accelerated adoption. Our partnerships with SAP and Accenture continued to progress deal maturation and build additional pipeline in Q1. As we announced on our Q4 call, we worked with Accenture to secure the Alianda deal, which along with Gasunie, the latest in a growing list of successful joint projects with Accenture. Although it's still relatively early days, we believe our partnership with SAP is on track and showing good momentum. To reiterate previous messaging on this topic with our traditional enterprise software sales cycles, commercial success in 2024 with SAP would be a strong indicator of the potential of the relationship to accelerate adoption of Copperleaf solution. Our most recent partnership with Siemens was announced in Q4 of 2023. Under this agreement, Copperleaf and Siemens will integrate technical planning with value-based investment optimization to help utilities make investment decisions that accelerate the modernization of electricity grids to deliver on the increasing demand for decarbonized energy at greater capacity while maintaining reliability. Expansion and improvement of the electricity infrastructure is essential to address energy security and fulfill the rising supply needs resulting from the electrification of transport, buildings and industrial sectors. New clean power increasingly integrated and modernized grids and other related infrastructure must be deployed at unprecedented speed and scale to meet these challenges. This problem presents as an ideal application for Copperleaf and in partnership with Siemens, we're actively working together with some of our mutual clients to develop solutions that combine our value-based decision solutions with market-leading technoanalytics. The Copperleaf community was active in Q1 with the continued rollout of our successful and popular Copperleaf AIPM Forum series in Italy, the Netherlands and Japan. These events again saw strong participation from both existing clients and new prospects. Thought leaders from the gas transmission, electricity transmission and distribution, manufacturing and rail transportation sectors gathered to discuss best practices, explore innovative use cases and gain a deeper understanding of how portfolio optimization and value-based decision-making help businesses maximize capital efficiency, manage risk and achieve strategic goals. At the AIPM Forum in Italy, Societe Gastite di Italia whose implementation only really quite recently went live, we're eager to share their journey so far and the business value they're enjoying using Cobol. Implementing our software has enabled SGI to assess the health data of their assets, practically identify optimum intervention type and dates based on clear value criteria and then model and monitor how risk may evolve over time. Innovation remains at the core of our business. During Q1, Copperleaf released an updated version of its product suite with numerous new features, including enhanced enterprise reporting functionality that leverages cloud needed services, generative AI, online health functionality, and enhancements to the company's geospatial offering, allowing mass-based visualization of asset portfolio hierarchies. Overall, our strong performance in Q1 underscores the effectiveness of our refreshed go-to-market model, which has sharpened our direct sales execution and increased partner engagement. Overall, our results speak to the significant value we provide to our clients and the growing need for the solution that Copperleaf provides. We anticipate continued robust growth in ARR and pipeline development throughout 2024 with our traditional Q4 waiting. These factors, combined with accelerating revenue growth and ongoing disciplined approach to managing costs position us for significant progress back towards profitability this year. We have a great team, the right investments in place and we remain focused on prudently managing cash and innovating across our entire business with the aim of driving execution in the near to medium term and at that same time, laying down a sustainable global foundation for future profitable scaling and growth. I'll now turn the call over to Chris to review our financial results in more detail. Thanks, Chris.

[Chris Allen, executive]

Thanks, Paul. Good afternoon, everyone. We are pleased to report that our first quarter results continued to deliver growth across all of our key financial metrics. Revenue for the quarter ended March 31st, 2024, was $25.8 million, an increase of 29% compared to $20 million in the comparative period, and this growth was driven by the continued addition of new clients and the expansion of existing clients. Our subscription revenue was $14.9 million for the quarter, an increase of 32% from the prior year, representing 58% of Q1 revenue as compared to 56% of revenue in Q1 2023. Professional services revenue for the first quarter was $8.8 million, an increase of 27% compared to $6.9 million in the prior year. This segment represented 34% of Q1 2024 revenue. And finally, we signed a large perpetual deal in Japan in the first quarter of 2024, bringing our total perpetual revenue for the quarter to $2.1 million, a 20% increase compared to $1.8 million in the prior year, and this segment represented 8% of Q1 2024 revenue. Over time, we expect to see a decrease in perpetual license revenue as perpetual as a percentage of total revenue as we continue our transition to becoming a SaaS-only company. Annual recurring revenue at March 31st, 2024, was $64.6 million, a 32% year-over-year increase compared to $49.1 million at March 31st, 2023. Our net revenue retention rate was 113% at the end of the first quarter, reflecting expansion within our client base on our strong renewal history. As Paul mentioned, revenue backlog was a record $145.5 million at March 31, 2024, a 32% increase from $110.5 million as of March 31, 2023. Gross profit was $18.9 million, representing a gross margin of 73%, a 38% increase from $13.7 million and a gross margin of 68% in Q1 2023. Gross margin increased due to an increase in subscription, professional services and perpetual license revenue and improved utilization of our professional services team, partially offset by an increase in headcount and the cost to support our growing client base. We reported an adjusted EBITDA loss of $3.3 million compared to an adjusted EBITDA loss of $10 million in the prior year. Net loss for the quarter ended March 31, 2024, was $2.6 million or a loss of $0.04 per basic and diluted share compared to a net loss of $11.8 million or a loss of $0.17 per basic and diluted share in the prior year. The decrease in net loss was primarily due to an increase in revenue and a decrease in headcount when compared to Q1 2023. We finished the quarter with a strong balance sheet with $33.5 million in cash and equivalents and $96 million in short and long-term investments, placing us in a strong financial position to build on our advantage and further penetrate the investment planning and decision analytics market. In conclusion, with a strong balance sheet, a refreshed operating model, improving partner traction and solid unit economics, Copperleaf is well positioned to drive growth through 2024 and beyond. As we continue to build on our advantage and further penetrate the decision analytics market, we're confident that our focus on operational excellence will drive best-in-class margins and accelerate our path to profitability. That concludes our prepared remarks. I'll now hand the call back over to the operator and open it up for questions.

[Operator]

[Operator Instructions] Your first question comes from Gavin Fairweather from Cormark.

[Gavin Fairweather, analyst]

Maybe you can just start on the upsell, is the uptick in net dollar retention rate this quarter. Curious what you would attribute that to. Are budget constraints easing a little bit in the client base? Or have you made some changes to customer success Molsons, which have led to better execution?

[Paul Sakrzewski, executive]

Look, I think we're seeing the market conditions is more or less equivalent. I don't think we're seeing directionally things improving or getting worse one way or the other. I do think that we're getting better at executing on not only bringing in new logos into the fold, but also working with our clients to identify new opportunities. And that's exactly what this was. We put in place a dedicated CSM team and they're doing a good job. So we're starting to see some of that operating model benefit.

[Gavin Fairweather, analyst]

And you referenced the momentum in the partner selling motions. I think the general expectation, we've spoken in recent quarters that would build later in the year. So curious if you would characterize us as seeing tracks and maybe earlier than expected?

[Paul Sakrzewski, executive]

No. I think we're seeing that evolve as we hoped it would. So all of the ingoing leading indicators are looking positive for us. If we do see something show up early, that would be nice, but we're still in the position where we think that we should start to see actual results show up, I think, at the end of this year and then into next year.

[Gavin Fairweather, analyst]

And then just lastly, coming on services, nice acceleration in Q1 after a tougher 2023. Can you just speak to the level of the services backlog, which you have now and whether this level of billings can generally be maintained over the course of this year?

[Chris Allen, executive]

So certainly, as we've discussed actually at the end of the year, entering the year with a good backlog. And so we were pleased to see that materialize in revenue in Q1. I guess, generally speaking, yes, I'd say that's probably in the rough order of run rate as we could expect, I guess, for the year, recognizing that it does fluctuate period to period. Clearly, we often tend to see slowdowns in the summer months, but I think that's a good run rate for the year.

[Operator]

Your next question comes from Thanos from BMO Capital Markets.

[Thanos Moschopoulos, analyst]

OpEx came in a fair bit lower than we were expecting. Can you provide some color in terms of the OpEx trajectory that we should see going forward through the balance of the year?

[Chris Allen, executive]

Yes, sure. So definitely a tick up on both R&D and G&A coming off Q4. And I think both of those are good run rate numbers for the year basically. As we've discussed on prior calls, we are carefully managing our costs. That includes, for us, the majority of our expenses headcount and largely aiming to hold those 2 departments fairly flat for the year. So I would expect those to be decent run rate numbers. on both cost of revenues of COGS and sales and marketing. Again, we've been careful on hiring and will be through the first half just as we see our deals show up. So again, as we've indicated in prior calls, we expect to add capacity for both billable services, resources and sales capacity through the back half of the year. So we will see those tick up through the year, not only for the head count, but on the cost of goods side, with the projects and support of a growing customer base and on the sales side, commissions and related expenses for that as well.

[Thanos Moschopoulos, analyst]

Paul, can you expand on your progress in the transportation vertical? Obviously, some good wins there recently and it sounds like you have a growing pipeline in that sector. So maybe give us a bit of an update in terms of the traction you're seeing there?

[Paul Sakrzewski, executive]

Yes. Some of the things we've been able to announce and some obviously remain in background and some of these have been expansion wins in organizations that we've previously announced. And we saw Houston Metro come through at the end of last year in Copenhagen Metro as well. Those installations are now live and starting to be good references for us. And like I said, we signed up why we are. Again, that was a win that we've been able to announce during Q1, and that is now live. And so as we build the first 1, 2, 3 references in each one of the flavors in the transportation sector, those start to become good references for us. They come to our conferences. They speak well of us as the system goes live, and they start to generate value from them. So we're starting to enjoy the benefit of that acceleration. One thing I will say is that we, as a company, I think, again, just from an execution point of view, we've gotten better at going from the first client that we see in the new sector packaging that up properly publishing the less and turning that into a reference and moving into the second, third and fourth sale more quickly than we had as a traditional business. So we're seeing that nice acceleration, the transportation sector is a good sector for us. There's a lot of near assets in there, the contiguous assets that we have some specialist software around. So it's a very good adjacency and the problem sets up very well for Copperleaf's adoption is accelerating.

[Thanos Moschopoulos, analyst]

Outside of facilities, would you characterize that as being the sector with the most opportunity as you look at the pipeline over the next 12 to 18 months?

[Paul Sakrzewski, executive]

It's certainly one of our positive sectors. I'd say probably yes, but oil and gas holds a lot of promise for us as well. So it's neck and neck with a couple of other things. But yes, it's definitely one of the ones that we're most excited about.

[Operator]

Your next question comes from Dylan Becker from William Blair.

[Dylan Becker, analyst]

I guess I want to double-click on the electrification opportunity here. We're seeing a lot of capital flow into the market. So it seems like it's a pretty high stake from a decisioning standpoint. I'm just curious if you could add in some color on what you're hearing from customers about this transition? And if any region you're looking to transition quicker than others or what this overall opportunity can mean for you guys?

[Paul Sakrzewski, executive]

Yes. Thanks, Seth. We see it as being a big opportunity, and I think it's really only just getting going. Electric utilities are reasonably traditional business. They are used to growing their networks over time and growing their capacity over time. there's a huge inflection point as transportation, electrifies and indeed buildings and also manufacturing. So economic growth is largely predicated on the provision of energy and reincreasingly, that's down to the power company. So they have to make the most out of the network that they have, which sometimes involves nonwire solutions, just being more efficient in the way that they use their network. But the estimates are that most countries will need to react the capacity of their grids and at the same time, they're trying to decarbonize. All of those implied investments to get from point A, which is the current status quo to a future 3x capacity decarbonized grid, all of those different implied investments that need to be made are a perfect use case sequencer use case for Copperleaf. And I think this is one of the really exciting things, our relationship with Siemens is very exciting. They model the current grid and the future grid and we help to close the gap between point A and point B with the most efficient use of investment. So we're very excited about the energy transition.

[Dylan Becker, analyst]

If I could squeeze another one in quickly. Just can you provide maybe a little bit color on the overall pipeline? You've talked about record backlog and the strength you're seeing in water globalization, transportation, oil and gas, is there any way you can break out maybe this backlog between the more core markets, any growing contribution from these emerging markets, or how should we think about that?

[Paul Sakrzewski, executive]

Look, every time we break into a new sector, it opens up a huge amount of new pipeline. And we're increasing our sales coverage all the time. We're a little bit careful about bringing on new pipeline. We don't want things just sitting in the pipeline for the sake of it or a pipeline expansion for the sake of it. We need to bring new pipeline in when we've got the resources to execute on it in the geography where it exists. So the TAM is huge. We published at the time of the IPO. What we thought was a quite realistic $12 billion TAM. We're still a relatively small company. It's all white space. So we need to be fairly programmatic at that bringing pipeline on. But the pipeline grows all the time as we embed our geographic footprint and get more industries in stream. So I don't know that it's meaningful to break it out in terms of the pipeline associated with core industries and emerging industries. Well, our near-term pipeline, just to make it a bit more nuanced is more heavily weighted towards our core industries, but we're careful about making sure that we've got the future pipeline balanced across those emerging industries so that we can continue to generate rapid growth. So we're being quite planful about what the near term and the long-term pipeline looks like.

[Operator]

Your next question comes from John Shaw from National Bank.

[John Shaw, analyst]

Regarding the new verticals, such as transportation and upstream oil and gas, once you get into those verticals, how long does it usually take to scale your presence there? Any time line we may think about?

[Paul Sakrzewski, executive]

Yes. That's what I was getting to before. It's hard to say exactly how long that is, but I think directionally, we're getting faster going from the first reference that we bring into a new vertical in the second and third. And that is because we have dedicated resources and a process associated with it. We have our global growth team, part of the global growth team as an industry's team. They are largely responsible for breaking up into new industries and then packaging up the way we broke into those new industries and packaging up the stories into good reference cases that we can use to execute on the rest of the pipeline that comes behind those first 1 or 2 references. So planfully and directionally, we're getting better and faster at it. That's what I would say. And I think that it will continue to accelerate.

[John Shaw, analyst]

And the PS revenue is quite strong this quarter. When I think about the relationship between PS and SaaS, so how much is the PS revenue leading indicator for the rest of the business?

[Paul Sakrzewski, executive]

So I'm not sure that it would necessarily be a leading indicator basically. The vast majority of our professional services are implementation services and effectively, our contracts start generating revenues on day 1 of the license transfer. So I don't know how much you can necessarily read into that as much as looking at the backlog at the end of the year and just the next 12 months, kind of looking at it that way.

[Operator]

Your next question comes from Paul Treiber from RBC Capital Markets.

[Paul Treiber, analyst]

Just when you look at ARR, ARR growth, obviously quite strong this quarter, net new ARR, I think, is the second highest level in the last 3 years or so. So very good momentum coming off a strong quarter last quarter. Was there anything unusual about this quarter that maybe helped that may not continue or does it just reflect the strength in the overall business coming through this quarter?

[Paul Sakrzewski, executive]

I couldn't point to any specific thing that necessarily made this quarter anomalous. I think we are getting better at executing on the opportunity in front of us. We're well organized. We've got the resources that we need to maintain sustained attention on all of those accounts. we've been careful about focusing on executing pipeline, just making sure that we have enough pipeline, but it's at the right quality, and it's progressing with the right kind of velocity that things can become a little bit more predictable. But I wouldn't point to any macroeconomic factor or any one deal or anything like that, that would make Q1 a normal.

[Paul Treiber, analyst]

And you called out like the operating model refresh as you're seeing the returns on that ARR growth has accelerated. When you look at the operating model refresh, can you point to the biggest factors that are really driving the improved either conversion of pipeline or does the ability to close deals here?

[Paul Sakrzewski, executive]

No, I think that's actually the key to it, Paul. It's not any one thing. It's the whole model working in concept and just making sure that you're focused on the right things and you've got dedicated resources focused on those highest value things to do and make sure that everything works in concert. I really couldn't call out any one particular thing. Aside from the operating model refresh, I think part of it is tenure as well. We've got people now who have been in place for some time. We've been able to get out and have some face-to-face meetings with them. We're face-to-face with clients again. So some of that is just naturally going to accelerate things. But I think the field team is doing well and they're clear about what they're doing and their pipeline is high quality and and the velocity is good. I think the Global Growth Office is doing a good job. Value engineering is clearly having an impact industry specialists having an impact. I think we're getting good at positioning our products. The partner network is working well. Again, just going back to the operating model for those who have been following closely, we formulated the global field services organization last year. And in the beginning of the year, we executed this year instead of a sales kickoff meeting, we had a field kickoff meeting where we brought the entire field, including professional services into Vancouver and got everybody together so that we're talking together about how we seamlessly go from discovery of new opportunities through the sales process straight into execution and then into future phases. So that end-to-end process, I think, is improving as well. So I think it's a suite of different things. I'd hate to point to any one specific thing and say that's the solution.

[Paul Treiber, analyst]

Just lastly for me. It does sound like there's more confidence on the path to profitability this year. How do we think about that? Like is it greater confidence on the revenue line, driving operating leverage or are you seeing more visibility to cost in the near term?

[Paul Sakrzewski, executive]

Yes. Look, it's always a combination of both. It feels a bit funny to me to hear you say that we're more confident in our path back towards profitability. We've always been confident in getting back to profitability. It's easy to forget that prior to the IPO, we grew 50% CAGR off our balance sheet for nearly a decade at breakeven or slightly one side or the other of it. So our unit economics of our deals are still what they were in those days. We invested ahead of the curve to grow some capacity and put in place our global footprint. We knew we were going to run some losses in a couple of years, and we forecast that. And now we're on our way back to profitability, writing those good deal economics back to where we always used to live. So we've always been confident in getting there. It's just a matter of timing. Macroeconomic conditions probably pushes back just a little bit. But in the end, it's always a top and bottom. It's growing the revenue, containing the costs and let's remember that we're a growth business. We're not going to save our way to success here. We've got a huge TAM in front of us, and we should be growing at good rates. And that's what leads to profitability.

[Operator]

Your next question comes from Todd Coupland from CIBC.

[Thomas Ingham, analyst]

I had a couple of questions. The first one, following on the electrical grid question. There's been a lot of discussion in the U.S. about not having the capacity to support hyperscaler growth and generative AI demands and what are the utilities going to do about that. Is that impacting your pipeline and business and possibilities in that market? Just talk about that a little bit.

[Paul Sakrzewski, executive]

Yes. I'm sure it is, but it's just part of the overall demand situation that's placing such pressure on the electric grid. And it's a double flip with a twist. They have to maintain their reliability. Nobody wants the lights to go out. They have to 3 or 4x in some cases, their capacity, and they have to decarbonize all at the same time and in a rapid period. So some of the increased demand is definitely coming out of the data centers. Generative AI has a huge requirement for electric energy. But it's just one of the things, the electrification of transport. And when that gets to road transportation in terms of transportation of goods and trucking, that will put another element on top of that and on top of the general passenger transport electrification. And it's worth remembering that downstream of that once battery energy density gets to the right level, we'll be seeing aviation take the same part. So this is a path that will not slow down. It's just going to accelerate and the requirements around generative AI and data centers and hyperscalers is just a part of it.

[Thomas Ingham, analyst]

Do you see any existing customers respond to it in the short term, meaning in the U.S., could this yield uptick? Is it significant enough to where it could yield upticks in your net dollar retention or is it a lot?

[Paul Sakrzewski, executive]

I'm not sure it's an NRR thing. I think it's across the installed base, but also it's very, very difficult for electric utilities to map out with the constrained resources they've got, whether that be financial or the supply of the materials and componentry in the network, whatever their capacity is, it's very difficult for them to navigate their way through all of those different choices and permutations to play their cards in the right order within the constrained resources that they have without software support. So the ones that have our software are using it for more and more use cases, the ones that don't have it almost have to adopt something like Copperleaf or something like us in order to navigate this transition, and that is just accelerating.

[Thomas Ingham, analyst]

I forget which customer this was, but you referenced it in your prepared remarks where you went through a rigorous vendor selection process. Wait for you to call out like who else you're seeing in the market and why you got selected?

[Paul Sakrzewski, executive]

So when it's vendor assessment, some of these clients will cast a broad net, and we see unusual people sort of come in and they're interested in the RFP response. Sometimes it's tools that someone has built because they're using that to support a consulting approach. Sometimes it's a combination of a couple of different things, but largely what we still replace at the client is Excel. We're not seeing really competitive head-to-head competition yet. So it's really hard to identify one specific competitor that's showing up consistently in all of these bids across all of the global footprint that we occupy and say that's competition. It relies a little bit on what the RFP looks like and what the functional specs look like it depends a little bit on those, who shows up. But it could be a combination of one of the ERP companies, plus one of the consulting companies, and it's very dependent on which country the RFP comes out in. A lot of the people that are approaching these RFPs are either local vendors or they're local consulting companies. So it's hard to see a concerted opposition to us globally in the way that we approach the market.

[Thomas Ingham, analyst]

Just on that point, do you feel your global sales effort partners, is that unique in the market?

[Paul Sakrzewski, executive]

I'd say so. We're a first mover. We're best-in-class. I think it's reasonable to say in the space as we define it. We are absolutely humble in that and our heads on the level looking around for competition all the time and seeing whether we can see patterns in the type of competition that show up in these RFPs. But we're just not seeing anybody with the consistency and the global footprint that we have in our space.

[Thomas Ingham, analyst]

I had a couple of financial questions. So if I look at the revenue in the quarter, subscription revenue was in line with FactSet a little bit stronger, and then professional services and perpetual was a lot stronger than expected. And I heard the answer before on professional services, so that's going to ebb and flow, but this is a good run rate. But that perpetual line was quite a bit higher than I think what's in FactSet. Can you just comment on whether that is repeatable or is that just going to land when it lands?

[Chris Allen, executive]

Yes. Far from repeatable, as you know, that's been the bane of our existence, and that's one of the big pushes for moving toward becoming a SaaS-only the company. So that was a pull forward basically of a large client in Japan. And as we've said in the past, those are very, very difficult to predict, and we don't foresee any more of those in the pipeline.

[Operator]

And I see we have no further questions. So Paul, I'll turn it back to you for closing remarks.

[Paul Sakrzewski, executive]

I will just close by thanking everybody for joining us today. We look forward to reporting on our progress as we execute on the priorities that we outlined and good will be great to see everybody when we come back to report on our Q2 financial results. Thank you very much, everyone.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.