LifeSpeak Inc
TSX:LSPK
Earnings Call Analysis
Q4-2023 Analysis
LifeSpeak Inc
LifeSpeak's fiscal year 2023 marked the third year of strong revenue growth, highlighting the success of their customer expansion and acquisition strategy. The management displayed confidence in the company's continued growth and operational management, backed by a steady revenue base and cost structure well in line with long-term objectives. Major clients added in Q4, like Canada Goose and Virtusa Corporation, underscore the company's ability to attract distinguished customers and cross-sell their comprehensive suite of well-being services.
In the fourth quarter, LifeSpeak reported revenues of $12.9 million, a modest dip from the previous year's corresponding quarter but an uptick from Q3 of 2023. The fiscal year 2023 closed with a total revenue of $52.4 million, representing an 11% increase year-over-year, evidencing a healthy trajectory of growing top-line numbers.
LifeSpeak's Annual Recurring Revenue (ARR) reached $51 million, with a global footprint, as about 66% of the quarter's ARR was derived from international markets outside of Canada. This reflects a slight decrease on a constant currency basis from the previous year but points to stability and potential for growth in a diversified client base.
Adjusted EBITDA for Q4 was reported at $2.7 million with a margin of 21%, a decrease compared to Q4 of the previous year, but this is attributed to one-time revenue and cost adjustments from that period. The company highlighted consistent EBITDA margins, around 25% for the fiscal year, pointing to careful cost management even as they aim for revenue growth later in the year.
LifeSpeak reported a net loss of $17.7 million in Q4, an improvement over a net loss of $24.5 million in the same period the prior year. The company saw a healthy net dollar retention (NDR) rate of 87%, up significantly from 78% the previous year, and a logo retention rate of 79%. These rates are indicative of strong client relationships and the company's ability to maintain a solid customer foundation.
LifeSpeak has a solid capital structure with $3.9 million cash on hand, ongoing compliance with debt covenants, and a strategic use of private placement proceeds to repay senior debt—a move expected to reduce the amortization payments moving forward. Looking to Q1 of 2024, the company expects modest results, with a projection for ARR growth to pick up starting Q2, possibly leading to a second-half reacceleration. Expenses are forecasted to align more with Q3 of 2023 than the somewhat higher incurred costs in Q4.
LifeSpeak's management underscores a commitment to operating leverage and responsible cost management. By targeting stable operating costs and making strategic hires for critical roles, the company sees an opportunity to maintain their cost structure without the need for a significant scaling in workforce to achieve growth objectives.
Efforts are ongoing to integrate the platforms acquired by LifeSpeak, with expectations set between 6 to 12 months for completion of the first integration stage. This initiative holds promise for cost synergies and efficiencies, aligning with the company's overall strategy for steady cost control and building on their ability to offer multi-product solutions to both new and existing customers.
LifeSpeak's working capital requirements are carefully managed considering their annual payment contract structure with many clients. The company emphasizes the importance of stewarding capital responsibly and balancing investments with cost rationalization to support the business's operational needs and future growth without compromising financial stability.
You don't have any saved screeners yet
Good morning and welcome to the LifeSpeak Fourth Quarter 2023 and Fiscal 2023 Results Conference Call. [Operator Instructions] Before we start, we would like to remind you that all amounts discussed on this call are denominated in Canadian dollars unless otherwise indicated. Please note that the statements made during this call may include forward-looking statements and information and future oriented financial information regarding LifeSpeak and its business and disclosure regarding possible events, conditions or results that are based on information currently available to management, which include management's expectation of future growth, result of operations, business performance and business prospects and opportunities.Such statements are made as of this date hereof and LifeSpeak assumes no obligation to update or revise them to reflect events, disclosures or circumstances except as required by applicable security laws. Such statements involve significant risk and uncertainties and are not a guarantee of future performance or results. A number of these risks and uncertainties could cause results to differ materially from the results discussed today. Given these risks and uncertainties, one should not place undue reliance on these statements and information. Please refer to the forward-looking statements and information and future oriented financial information section of the company's public filing, which include, without limitation, LifeSpeak MD&A and its earnings press release issued today for additional information.At this time, I would like to turn the call over to Michael Held, Chief Executive Officer of LifeSpeak. Please go ahead, sir.
Thank you, operator, and welcome, everyone, to the LifeSpeak fourth quarter 2023 results conference call. I am pleased to report that fiscal 2023 marks the third consecutive year of strong revenue growth for LifeSpeak. Our ability to add new customers along with increased revenue through our growth through acquisition strategy over the past 24 months have been the key drivers. As demonstrated by the participation of our senior management team and Board members in our recent $5 million private placement, confidence in the business we have built is strong as we sharpen our focus on LifeSpeak's growth moving forward.Our collective confidence is attributable to the fact that our leading physical well-being, caregiving and substance use tools combined with our digital mental health education platform continue to successfully address the well-being needs of employers, health plans and other organizations both internationally and domestically. The breadth and depth of our product suite has helped us grow into a comprehensive service provider for organizations that need preventative digital education and human expertise to support their employees and end users. With this holistic approach, we were able to add a number of new customers in our fourth quarter, diversify our revenue base and deliver significant value for existing clients.Notable enterprise client additions for the fourth quarter included Canada Goose, Virtusa Corporation and TravelBrands. Subsequent to quarter end, the company added Accenture, Knitwell and Ascena Retail as new clients. Cross-selling initiatives progressed through the fourth quarter of 2023 highlighted by the new multi-product sales with Grant Thornton LLP and the successful cross-sell with existing client, Amazon Canada post quarter. These client additions helped drive financial results that demonstrate that we have established a consistent revenue base for our business and a well-managed cost structure. Overall, we are very excited about the opportunity that lies ahead of us and believe that we are making important progress.I will now pass the call to our Executive Chairman, Nolan Bederman, who will provide more color on the quarter. Nolan?
Thanks, Mike. We remain confident about LifeSpeak's position in the marketplace and our ability to capitalize on new business opportunities. Our core business remains strong and while we're in a macro environment in which corporate spending has been under pressure, we believe a real need continues to exist for the high value services we provide and we are seeing early signs of improving activity. We focused on strengthening our operations and go-to-market teams over the fourth quarter and into 2024 taking advantage of the opportunity by also repositioning internal resources to enhance the effectiveness of our sales and marketing groups. The sales and marketing function is grounded by a strong strategy in analytics and our teams now have a far more diverse suite of products that offer new prospective customers. These potential customers in turn have shown a greater desire for partnership opportunities with LifeSpeak.At the end of the day, we believe we are well positioned for growth when the market for our services solidifies. Given current discussions with a deep set of strong customers on potentially larger deals, we believe this is beginning to happen. The quality of our sales discussions has been escalating for a number of months now and that has resulted in tangible progress as evidenced by the fact that for the third consecutive quarter, our sales teams are seeing larger customer contract wins in the enterprise segment. In addition, the ability to offer customers more effective solutions by way of multi-product sales has created a number of opportunities that would not have been possible prior to the completion and integration of our targeted M&A. Overall our enterprise pipeline, the number of deals and size of partnerships remains compelling and continues to expand and we're seeing more strategic potential in our embedded solutions pipeline. We're looking forward to updating you on our progress in the coming weeks and months.I'll now turn the call over to Mike McKenna, who will walk us through our detailed financials. Mike?
Thank you, Nolan. We believe our fourth quarter and fiscal 2023 financial results demonstrate the consistency of our business and provide us with confidence that there is a path for the business to return to growth. For the fourth quarter of 2023, revenue came in at $12.9 million. This was slightly lower when compared to the same quarter of 2022, however, did increase slightly over the third quarter of 2023. Fiscal 2023 revenue was $52.4 million. This is an increase of 11% when compared to reported revenue of $47.4 million for fiscal 2022. Of note, the Wellbeats acquisition was completed at the end of February 2022 so the comparative period does not include a full year of revenue. Our annual recurring revenue or ARR came in at $51 million. This number is slightly down when compared to the same quarter in 2022 on a constant currency basis.As a reminder, we report our ARR on a constant currency basis for comparative purposes using a U.S. dollar to CAD exchange rate of 1.3. Given our overall exposure to the U.S. dollar and the movements in rates through the quarter and the year, we think it is helpful to note that our ARR would have been approximately $51.6 million as of December 31, 2023 when using a U.S. dollar to CAD exchange rate of 1.3226. To provide further detail into the $51 million of ARR, approximately $43 million of ARR came from our 942 enterprise clients. The remaining $7.6 million came from the embedded segment and other verticals. With respect to the geographic split, we remain consistent with approximately 66% of this quarter's ARR originating from markets outside of Canada. Importantly, no clients accounted for more than 5% of ARR as of December 31, 2023 continuing to show the diversification of the business.Both our Q4 financial results press release and the fiscal 2023 MD&A provide further detail on the breakdown of ARR for the quarter and on a historical basis for comparative purposes. Moving on to adjusted EBITDA. Our ongoing focus on operational efficiencies provided the company with an adjusted EBITDA of $2.7 million in the quarter. While this is compared to $4.8 million in the fourth quarter of 2022, the decrease is largely attributable to a significant amount of onetime revenue and cost adjustments that were recognized in Q4 of 2022. This positively impacted our financial results for the quarter and we highlighted at the time that the EBITDA contribution and margin were high for a quarterly period. Adjusted EBITDA margin for the fourth quarter of 2023 was 21%. This is a decrease compared to the Q4 2022 adjusted EBITDA margin.But again, the impact of onetime revenue recognized in Q4 of 2022 and the cost adjustments related to Q4 of 2022 had a significant impact on the comparative adjusted EBITDA margin for the quarter. Adjusted EBITDA for the fiscal year of 2023 was very strong at 25% versus 23% for fiscal 2022, a more representative comparison for the financial results of the year. The strong adjusted EBITDA margin demonstrates the continued results of our expense rationalization, responsible management of the business and strong focus on building the business on a profitable fashion. Moving on to net loss for the year. For the fourth quarter, our net loss was $17.7 million. This compares favorably to a net loss of $24.5 million in the same period of 2022. The decrease in net loss for the 3 months ended December 31, 2023 is primarily due to lower impairments recognized in this period.In addition to the previously mentioned metrics, we also track other KPIs to help us evaluate the strength of our business. The first is net dollar retention. Net dollar retention rate or NDR provides a consolidated measure by which we can monitor the percentage of ARR retained from our existing clients. NDR as at December 31, 2023 was 87%. This compares favorably to an NDR in the comparable period of 78% as at December 31, 2022. Logo retention rate, which is measured on an LTM basis, was 79% for the quarter. This is approximately 6% lower than reported at Q4 of 2022. However, this decrease is predominantly due to the loss of a smaller subset of clients following our period of acquisitions. Importantly, despite the relatively high number of logos lost in the period, net new logos are on average larger on an ARR basis than logos that have left the platform.This is a trend that we identified on a quarterly basis through 2023 and remains intact through Q4. Capital structure. With respect to our capital structure as of December 31, 2023, the company had approximately $3.9 million of cash on hand and was in compliance with all debt covenants. The company continues to be in compliance with all such covenants as of today. We also believe that the company's financial position is now significantly stronger following the closing of the $5 million private placement previously announced earlier this month. The proceeds of the private placement were directly used to repay outstanding senior indebtedness. The company anticipates that amortization of senior indebtedness moving forward will be approximately $1.8 million per quarter for 2024 as we have previously discussed.Importantly, it should be noted that the company is generating more than enough cash flow from operations to manage interest costs and upcoming amortization payments. The funds from the capital raise were used directly to repay principal of the senior debt facility bringing the total amount outstanding to $66.4 million. Proceeds of the equity raise were not required, needed or used to cover interest payments. On to our outlook for Q1 of 2024. Based on the current sales pipeline visibility referenced by both Michael and Nolan earlier in our call today and the continued implementation of our business strategy, we expect opportunities to grow ARR during Q2 and onwards this year. For Q1 specifically, results are likely to continue to be somewhat range bound. Expenses will be generally more in line with Q3 of 2023 than Q4, which will aid in EBITDA performance. Recognized revenue though may continue to have some variability due to the timing of the start of new revenue opportunities that have been noted within the robust pipeline.With that, I'd like to thank everyone for your participation in the call this morning and we'll now open up the call to questions. Operator?
[Operator Instructions] Our first question comes from Doug Taylor from Canaccord Genuity.
You'd spoken last quarter to an anticipated return to ARR growth in Q4, which did not yet come to pass in the quarter. So I guess I just want to gauge your confidence level in this inflection here, which you're speaking about in Q2 versus Q1 and maybe what has delayed that objective.
Doug, thanks for the question. I'll start and then I think Michael and Nolan can probably add some interesting thoughts around just where the market is and some of the things that we're seeing in a positive fashion. One of the things that is always challenging and has been challenging for our business unfortunately since we've been public is just timing of some of these larger starts. I think we noted that the pipeline is robust. I think we noted that there's some very interesting opportunities in there. Certainly some things are getting pushed out from a timing perspective and not pushed away, but I mean pushed out just in the sense that it seems to take a little bit longer to kick off maybe. So I think the opportunities are still there and the opportunities are still in discussion and/or moving forward. There's a little bit of issue with timing and sometimes that happens with the larger companies that we may be dealing with just in terms of how long things take to be implemented. But I think generally speaking, we're still seeing the same trends or favorability in the pipeline. So maybe, Michael, you might want to be a bit more specific on a couple of those points. But I think generally, Doug, the tone remains the same.
Yes. I think it's fair to say just the B2B spend in the economy has dragged a little bit. But in terms of getting to the heart which is our confidence, Doug, all of the metrics that we would be looking for that indicate growth are improving so increased pipeline, increased activity, the tone of the conversations are different. So even those that haven't spent yet are speaking in a lighter tone and taking meetings because they know it's changing and planning forward versus last year there were times where people were like there's no point meeting, there's nothing going to happen for a while. So everything that would make us feel good about the growth we're seeing and certainly on the much larger opportunities in our adjacent world like that, all of the major deals that we've been focusing on continue to move forward. So we feel great. And obviously as evidenced by the fact that the management team invested a lot into the financing shows that it's not just me and Nolan, it's a much broader group. So hopefully, that provides a bit more context.
Yes. That's helpful and good to see. The gross churn trends in the quarter, maybe we can just flesh that out a bit more. You spoke to this being a subset of smaller clients. I guess I'd like to better understand what proportion of the remaining ARR and customer base falls into the category of potentially more at risk due to their size or any other color you can provide for that?
Doug, it's Mike again. Look, I think at the end of the day, we've got a very broad customer base and customer list, over 950 enterprise customers and there's always going to be at risk and potential churn within that group. So we've got a very focused and active team working through trying to ensure that we are managing that day-to-day, month-to-month. There is still going to be probably some additional again churn in that sort of lower end. And look, part of this is like it's a challenging transition to go from a group of if you want to call it 5 customer lists to 1, let's call it, multi-product solution and ultimately that doesn't happen overnight; that happens over time. The reality is for our business, the cost to service the smaller customers or smaller logos is actually higher frankly than the larger customers. You can see that in our numbers and you understand that part of the economics.So again we never want to lose a customer, but in the end we have to also make sure that from the perspective of operations and management, we're focused on the income statement as well and the fact that we can manage the cost of our larger customers at a same similar [ accidentally ] less cost in some cases than some of the very small customers. And I'm talking like smaller customers that might pay $5,000 a year. Again there's nothing negative about having them on the platform. It's just from a cost of servicing that revenue, we would much rather be -- we're much better suited to servicing a customer of $100,000 a year. So while I think you can see that the retention number is necessarily not where we want to be today, we are managing it much better and I think we're very focused again on retention of the larger customers where the cost to service those logos is much more reasonable for the business that we're building.
Okay. Maybe 1 last question for me. Embedded opportunities, it's an area that's been a bit de-emphasized over the last couple of years. You're speaking in your prepared remarks to some more potential for those types of opportunities. So maybe can I get you to expand a bit on what these look like and the timetable to potentially getting those up and running?
Why don't I suggest that Michael or Nolan tackle that one, Doug, just in the sense that it's more of a revenue-based question than it is about the financial results themselves.
Sure. This is Michael. Why don't I take that? There is a lot of activity endorsed at a very high level, many from the CEO level, at these large players that would be embedded. Examples are insurance companies, HCM, payroll, LMS like learning platforms where our solutions fit in really nicely. So some have been starting -- started to open up in August once we had our integrated platform and company so people are more receptive. They like what they see. A lot of these new opportunities started in early January. But based on the timetables that -- because we're being embedded into offerings that are being put out by these companies, our timetable is set by when they are launching their offerings and so we're seeing anywhere from some of these launching in June to October and some will obviously go into 2025. But this is I mean not near-term launches as in the next 2 months, but this year for sure. Doug, does that answer your question?
Yes, that's helpful. I'll pass the line. Thank you.
Our next question comes from Jeff Martin from ROTH MKM.
I was wondering if you could speak to some of the changes in the sales organization that have been made. I believe the Chief Revenue Officer, there was a transition there towards the end of the year. What specifically has transpired since and is there any change to the go-to-market strategy overall?
It's Nolan. I can give you a quick answer there. So the changes that we made at that time really were part of an evolution of a longer refocus and rebuild of our sales organization at the top. So all sort of planned and put in the works almost a year-ago to have a senior leader managing the direct business and a senior leader managing the partner side of the business. Some of the embedded work is a team of senior executives at this point so that's sort of a third component. That change has allowed a further level of professionalization integration. I think we talked about this maybe 2 or 3 quarters ago where the biggest objective for us was to take a sales force or many sales forces that were used to selling single product and build a comprehensive sales force that can sell a complex product suite and that evolution mirrored the changes we made at the executive level. So that's been going very well. We're seeing the right activity. Obviously as Michael mentioned earlier, still in a market that everybody faces. But the activity level of the professionalism, the engagement and the focus continues to dramatically improve and we'll continue to make more minor changes within that structure. That structure works well for us as we consolidate sort of the go-to-market efforts along the lines of who the customer base is and not along the lines of our own product offering.
Could you give us a sense of the gross additions to the client base maybe in the fourth quarter and full year? Trying to get a sense of how quickly ARR might rebound if you do see an uptick in the lower retention rate.
Jeff, it's Mike. I'll take that and we're happy to give you a bit of follow-up as well just in terms of some of the specific numbers. But I think the reality is and I think we have to sort of take from the conversation today where the opportunity set is. I think consistency in the enterprise segment with us trying to get that number from, if you want to call it, 956 today to sort of north of 1,000. That's ultimately the goal there. We've been sort of in that range through the year. But as we talked about, a lot of those were on the smaller end. So we don't need another 1,000 customers. It's another 50 or 100 with the right ACV or a higher ACV than what's coming off the ledger so to speak and we've been able to manage that quarter-to-quarter through this year. So ultimately as some of this transition in the smaller customers is finished, that's going to have much larger impact.The other thing is some of these opportunities that Michael and Nolan have been discussing today, these change the ARR role significantly because they are 5x or 10x an ACV of an enterprise customer as a potential example. Don't get me wrong. I'm not going to suggest to you that like next week we're going to have a $10 million customer. That's not the sort of picture I'm trying to paint here. But I think, Jeff, as you think through adds on the enterprise side and then some enhancements of those adds with some of the significant opportunities Michael spoke about, that's where you see real opportunity to increase the ARR role when those 2 things are combined together. So I think that's really the game plan and it's going to be really around quarter to quarter to -quarter execution, which I think is really important for the business.
And then last one for me is EBITDA margin. As we look into your forecast for the year, I know you're not guiding for the year, but should we anticipate EBITDA margins to be similar to 2023, a little bit above, a little bit below? What factors might we consider in how we look at the EBITDA margin for this year?
Jeff, good question. I think a couple of things to point out there. The 2022 annual number 23%, frankly that was impacted on a positive end a little bit through some of those onetime things I mentioned about the comparative period a year ago in Q4 of 2022. We've been pretty consistent this year sort of in and around the 25% range, plus or minus a little bit in Q1 and then again in Q4. Our expenses were a little higher in Q4, some of that just comes down to some year-end stuff that needs to be recognized. Ultimately that gave us 25% margin for this year with a decreasing revenue profile. So I think we're talking here today about opportunities to increase revenue probably not going to come in Q1, but sort of later on in the year. So to be able to maintain that 25% margin, I think very much similar overall. And obviously I think without guiding too far, I mean that's generally a good target for us is where we finished out the year and I mean not in Q4, but for the annual period of 2023 here.
Our next question comes from David Kwan from TD Securities.
Just touching on that last question on the margin side so it sounds like probably kind of flattish type margins expected this year. Is it just an acceleration in ARR revenue growth that would help get margins hopefully into the higher 20%s and I don't know whether 30% is too much of a stretch? But is it just higher revenue growth just given the operating leverage you've got in your business?
David, it's Mike. Thanks for the question. And I think the last sort of part of your question there frankly is really the answer in the sense that this business is very well set up for operating leverage. If you take a look back quarter to quarter between sales and marketing and G&A costs been pretty consistent plus or minus in each quarter. And so ultimately I think that shows that we've got a very steady and stable cost base. We're making some investments in people in certain spots, which is going to impact our cost a little bit. But this is not 100 more new hires. This is in really important tactical situations for the business. So when we think about that, when we think about very steady and stable cost base for frankly the last 5 quarters; you can sort of think then about okay, well, where is the increased margin income from? Well, there's tremendous operating leverage in the business.If some of these larger opportunities hit in ARR this year, that's going to translate into good recognized revenue in the back half of the year. So that really is it. The business is set up very, very well now for increased margin just because of the operating leverage. And look, the commitment to managing the cost base of this business is company-wide. It's important also to note though that we're still investing in the product. So I think as we talk about cost management and cost rationalization and operating leverage, I think it's also very important to note that we're still investing in the product and you can see that through the content cost and product development cost, which have also been very consistent going back 6 or 8 quarters as well. So we're still investing as we want to grow and set ourselves up for this growth. But in terms of the overall cost base, we're trying to make sure that we're managing that in a very responsible, let's call it, run rate type fashion.
Yes. I'll add only 1 thing, it's Nolan, that some of the executives we've hired and in combination with the next wave of our integration, which is truly integrating the technology components of our offering so that ultimately our customer base has the ability to in essence pick and choose products with a single platform, which doesn't really exist in the industry. Those 2 things will allow us to get even more efficient on the cost side. We're bringing in different technology applications to be able to do that and some streamlining internally. So to Mike's point, the bulk of our supercharged margins will come from growth, but there are opportunities as we advance our integration and continue to upgrade our technology and operational components to actually drive some extra cost savings there. That's not going to come, as Mike said, in a quarter or 2; but that is definitely the midterm objective to be able to continue to invest in our business and do it at an increasing rate probably even holding those costs steady or even lowering them from where we are. So we can do more with less as we move forward.
That color is helpful, Nolan. I guess on that note then, can you talk about where you are with the integration of the various platforms that you've acquired and when you expect that work to be completed and hopefully at that point start to realize some of these cost synergies or cost efficiencies?
So we spent the first chunk of time and I think we've talked about this before making sure that from a customer standpoint, product look and feel the same, can work together, interoperate. What we are now shifting into is the true integration of the technology such that it ultimately has shared database and abilities to have truly connected workflow, which again is something that I think it's novel for this part of the industry anyway. And that's at least 6 months to a year away from completion, but we're on to that project and that's really the next push that the product will -- well, we're constantly evolving the way the product looks and feels so that goes without saying, but that's independent of this.This is really a functionality build that really allows the vision being if you're a client, you could actually pick and choose the number of products you have and then you can actually allow at the micro level your users to pick which function they actually choose. So we have 5 products for example and you purchase one, any user can choose which one. That's a holy grail. That will take us some time before we get there, but it's a pretty interesting vision and one that I call it almost a pull. Clients when they hear that, they're pretty blown away. So that's really our mission. So it's not years, it's months; but my best guess is somewhere between 6 months and 12 months to get to that first version of that. That's in addition to we need to evolve each of the components. Did that help you?
No, no, that does. I know you guys had kind of completed the front-end integration and a lot of work was on the back end and that tends to take longer. So I'm just kind of curious where you were from that standpoint. So that was helpful. I apologize if I missed it. Just on the cost side in Q4 just the higher expenses that you had seen. Was it related to just kind of like year-end true-ups or was there anything in particular that you wanted to point out?
David, it's Mike again. Nothing in particular and in fact if you look at the cost sort of through January and February, they return to sort of more in line with the Q3 level. It doesn't mean they're going to be exactly that way every quarter through the balance of the year. But there was nothing specific that you should be concerned about from the perspective of a run rate if we want to call it that in Q4. And as you mentioned, just some stuff about year-end.
Our next question comes from Mike Moriyama from RBC Capital Markets.
It's Mike Moriyama on for Paul Treiber this morning. I just wanted to turn to the balance sheet here. How are you guys thinking about the balance sheet going forward? I think the term loan matures in February of next year, obviously the mandatory debt payments are going up in Q1. Can you touch on the recent private placement? What other options do you guys have to further deleverage from here?
Mike, it's Mike. I'll take this question. I think I tried to be pretty specific like through the prepared remarks about this. The reality is we have an amortization schedule with our lenders through the balance of the year, $1.8 million per quarter that we're going to be able to meet that with performance of the business. Obviously we're thinking about refinancing in that date in that refinancing window. Those conversations with our lenders have frankly been going on for some time. We note that in our financial statements as well. So from the perspective of sort of where we are, obviously we're committed to maintaining that amortization schedule and then ultimately through the course of the next while here looking at refinancing.Outside of the private placement, is there a specific need today to make further repayments to the lenders outside of the amortization schedule? The answer is no or we would have raised essentially more dollars to do so. So I think always we've got a very good strong committed group of investors as you could see from the private placement and obviously supportive of the business. But if there was a specific need at the time of doing that private placement to repay additional dollars to the lenders, obviously we would have tried to tap the market or our investor base for more dollars. So I think the reality is we're going to stay committed to the amortization schedule as I mentioned and I think we've got a plan in place that will allow for refinancing at the time of maturity.
Great. And just on the working capital requirements for the upcoming year, how should we think about the cadence or maybe the seasonality of working capital through fiscal '24?
Yes. It's Mike. I'll take this one again. I mean look, we do have a bunch -- we might have a significant number of customers that they are on multiyear contracts and they pay once annually. So we do tend to typically get some cash in advance. So when you think about that overall in the broad context of working capital, we are oftentimes getting paid for a year in advance. And so I think that does, if you think of it from an accounting perspective, also create quite a working capital deficit. But the reality is from a business operations perspective, it's not impacting it in that same sense. So I think importantly, we have to be responsible stewards of our own capital and responsible to manage the dollars as they come in the door and that's why ultimately we're very committed on the expense side and on a cost rationalization perspective. But that's really got to be the focus versus being too concerned about the working capital eventually because the reality is it's just the nature of the business that we're in and how the contracts are set up that create a little bit of that from an accounting perspective.
Okay. That makes sense. And maybe just a quick last one here from me. You guys might have touched on it briefly already. But when you guys see maybe a reacceleration in growth in the second half of this year, what might be some of the OpEx or investments required to drive that reaccelerating growth if any at all? Anything there?
Yes. I'll continue on with this one as well. I mean I think we've got the business in a very good consistent operating cost mode and I think that's really, really important. I mentioned a little bit about some strategic hires and some investments and we may see some movement quarter-to-quarter, slight movement in our costs because of some additional people coming on board. But the flip side of that, as Nolan mentioned, as we add some strategic people to our team, more senior people, there may be other opportunities that we find to further rationalize cost. So I don't think that there's a situation here where we're going to see a 5%, 10%, X percent; whatever you want to do to sort of fill in the number there of increased costs quarter-over-quarter to accelerate growth. We don't need to go and hire as an example another 20 salespeople. It's not really the sort of nature of the business or the sales process cadence especially when we're dealing with partners. So I think from that perspective, it probably gives you a bit of an understanding of some of the nuances quarter-to-quarter, but at the same time understanding that there's not going to necessarily be a big uptick in costs here.
The next question comes from Justin Keywood from Stifel.
Just on the mention of cross-selling activities, is this expanding wallet with additional customers or is it more just to keep the existing customers and offering them more service?
Justin, it's Mike. I'll start briefly and then Michael and Nolan can add some additional points on this one. The reality is it's both. So on a go-to-market strategy now, the business is set up to go to market on a multi-product platform. If you think about this business when we IPO-ed, that opportunity wasn't available to us because it was a single product offering. So there's the go-to-market strategy. And then in addition when we think about that customer list and again the 950 customers, there is opportunity within a subsection of that customer base to add additional products. When I spoke earlier about some of those smaller customers, if you want to call it churning off the platform, falling off the platform or falling off the customer list. Those typically aren't going to be customers we'd be selling multiple products to anyway. So what we're focused on in the customer base that we have is places where their ACV is a decent size and their employee base is of a decent size that they would be a good potential partner for multi-product. So that's more like the technical answer. Michael and Nolan probably would be happy to provide some more thoughts on just where the market is from a sales perspective.
I would agree, Mike, that it's definitely both. The only thing I'd add as well is that our significant reseller partners who have been selling 1 or 2 of our solutions are adding more to the suite. So as they go out and sell multiple products at the same time, so that should definitely increase our cross-selling or bundling more solutions to new clients. And it's very good to see our original thesis of bringing all these companies together paying off as large partners in our ecosystem don't want to deal with 20 point solutions. They want to deal with 1 company that they trust and can work with and can meet their needs from a solutions perspective. So I believe we'll see a very good uptick in terms of this over the course of this year.
And then just 1 quick one. On the content creator cost, I noticed it was down in the quarter. Anything specific there? Is this a good level to assume going forward?
Justin, it's Mike again. Good level to assume. There's always going to be quarter to quarter a bit of movement up or down and again in a very small band in that cost online simply because of timing of film shoots. So this being Q4, probably less than maybe Q1. But I think when you think about it broadly over the course of the year, it's a pretty consistent number if you think through 2023 and then even if you look back to Q2, Q3 and Q4 of 2022. So there will always be a little bit of timing there, but again that's just largely due to when content is being done. And thinking about December is probably the slower month of the year for content shoots, pick back up a little bit in the new year. So Q1 probably be a little bit higher. But again when you're thinking about on average through the course of the year, it's a pretty consistent number.
We currently have no further questions. I will hand back over to Nolan Bederman to conclude.
Thanks, Sarah. Well, thanks, everyone, for listening. We appreciate the questions. We appreciate the audience. And we look forward to talking to you all again in the next quarter. Thank you very much.
This concludes today's call. Thank you for joining. You may now disconnect your lines.