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Good morning, everyone, and welcome to Q4's First Quarter 2023 Earnings Call. My name is Edward Miller, and I am the new Head of Investor Relations at Q4. I am joined this morning by Darrell Heaps, our CEO; and Donna de Winter, our CFO, to review our first quarter results. Please note, a copy of today's presentation will be availale on our website. Please be aware today's prepared remarks are being hosted live on Monday, May 15th, 2023 at 9:30 a.m. Following the prepared remarks, Darrelll and Donna will host a live video Q&A session with the analysts. And for those in our virtual audience, you can use the webcast Q&A button to submit a question in real time. We need to remind participants that certain information discussed on today's call may be forward-looking in nature. Such information reflects the company's views with respect to future events. Any such information is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those projected in the forward-looking statements.For more information on the assumptions related to the forward-looking statements, please refer to Q4's public filings available on SEDAR. During the call, we will reference certain non-IFRS financial measures.Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized use under IFRS.Please see our MD&A for additional information regarding our financial measures, including for reconciliations to the nearest IFRS measures. Please note that unless otherwise stated, all figures are in U.S. dollars. I will now pass it over to our CEO, Darrell Heaps.
Thank you for your interest in joining us for our first quarter 2023 earnings call. During Q1, we successfully executed against our plan to expand our wallet share with existing clients, driving efficiencies and effectively managing cash.Despite a macro backdrop, which remains challenging across the capital markets. I'm extremely proud of how our team has performed during the first three months of 2023. We remain laser-focused on what we can control, optimizing our operations while continuing to deliver organic growth. Q1 represents another step on our path to profitability. And as these improvements take hold across the business, new opportunities to accelerate additional efficiencies are uncovered. This morning, I'd like to review where we are against our plan, demonstrating this progress, leveraging proof points from our Q1 results as well as the future opportunities they are helping to create. Today, we are better positioned than ever in our history, strategically, operationally and financially to capitalize on improving market conditions, but we are not trying to time this turn or waiting for it to happen. First and foremost, we never lose sight of our clients and their needs from consistent world-class execution and service to the latest technology that powers our solutions and the highest levels of security and reliability across our infrastructure. During our first quarter, we stayed heads down on optimizing our operations. Well over half of our bookings were expansions with existing clients. We launched several new products in Q1, creating opportunities to reintroduce the full Q4 portfolio to customers around the world. As a result, we are expanding relationships with new data-driven modules that are being added to their Q4 stack. Offerings such as engagement analytics, CRM and ESG add-ons are seeing notable traction and widespread interest.We continue to build relationships with new and notable customers, including Alphabet, Macy's, Caesars Entertainment, Bombardier and the Bank of Nova Scotia. These world-renowned brands are entrusting Q4 to support their investor engagement. From the most critical and visible disclosure events, ensuring hundreds of thousands of live earnings call participants have a flawless experience every quarter. This scale, this level of scale, reach and data exhaust translates to the highest quality engagement analytics and market insights. This is a key competitive differentiator that we believe investors will value over time. In other words, this is the moat of the Q4 story. Our gross margin expansion strategy is something that we set out to accomplish during our IPO. We predicted entering this fiscal year with gross margins in the mid-60s. We ended Q1 with gross margins ahead of target, reaching 65.4%. This accomplishment is due to our execution on our virtual events platform, our fixed data contracts, the adoption of our web management app on Capital Connect and the continued buildup of our LATAM operations. These structural changes are permanent and sustainable and will have a lasting impact for a continued margin expansion through 2023 to end this year in the mid-70s. The Q4 platform continues to provide us with opportunities to deliver valuable experiences for our clients. With increased levels of platform adoption, clients will gain greater insight into investor activity and engagement. As client adoption scales our ability to deliver access to more robust analytics increases exponentially. Our platform approach is integral to our product-led growth strategy and is the foundation for delivering a unified client experience. I'll now take a few minutes to provide an update on some recent product innovations. We made significant enhancements to the web management application, providing a faster and more secure way for thousands of our clients to manage their IR website. In today's fast-moving markets, we know that all IR teams need the ability to update their IR websites with speed and accuracy.Through the most innovative IR website management technology, clients will experience a streamlined process that allows them to access previews and publish their changes immediately, enabling IROs with a more efficient way to make accurate updates to their website, alleviate stress, saves time and assures them that they are supported by a trusted partner who maintains a 90%-plus 5-star rated experience. The Q4 Virtual Events platform is designed to elevate the investor event experience and delivers over 4,400 investor events annually across North America and Europe, with a market-leading reliability rate. We continue to solidify our position in the virtual event space with major brands such as Amazon and Meda reporting on our platform this past quarter.Our proprietary platform seamlessly integrates with enterprise tools such as Zoom or Microsoft Teams to directly bring video to our clients' earnings calls through familiar technology. This integration is the most recent enhancement to our platform following features such as the ability to customize webcast branding, easily jump to Q&A, speaker bios and Q4 account integration. The addition of these innovative features to the platform is a major part of our product-led growth strategy in 2023. These enhancements, coupled with our unprecedented platform reliability rate position us to be the capital markets leader for earnings calls and corporate reporting. We continue to iterate Q4 desktop, responding to our clients' request for additional CRM functionality when it comes to integrated e-mail automation and a mobile CRM experience. Designed to ensure deliverability, our e-mail integration enables IROs to track every touch point and nurture relationships like never before. Q4 Go, our mobile app delivers access to key CRM workflows that are fully integrated into Q4 desktop, including identifying contacts, advanced search capabilities and meeting management.This mobile application is built from the same unified data and insights found on the Q4 platform, ensuring its scalability in the future and the potential to interface with other critical workflows like events or analytics. Latest innovation in Q4 engagement analytics is benchmarking and investor targeting. Engagement benchmarking aggregates millions of digital investor interactions that take place on the Q4 platform, including website visits, e-mail opens and event attendance. While institutional targeting provides clients with insights into the investors who are engaging within their sector across the Q4 platform. EA is the only solution in the market that enables IR teams to compare the performance of their IR program with that of their peers, sector and the overall market.The ability to target investors based on their online interactions has never been possible before, and we're proud to have pioneered this innovation that provides our clients with actionable and quantifiable data to make informed decisions regarding their IR strategy. We've already witnessed the positive impact that these enhancements are having on our clients' investor relations efforts and are eager to continue expanding these analytics to provide even more value to our clients. At the end of Q1 '23, there were 286,000 investors with Q4 accounts. This feature enables investors to easily sign into events without the need to register each time. Q4 accounts continue to expand the Investor Relations experience across the platform, enabling connections between investors and corporate IR departments. In regards to generative AI, first off, I'm just incredibly excited about what's happening here, both with us and in tech in general. We are working hard to integrate AI capabilities not only into our products and services, but our everyday lives to improve efficiency. In fact, we recently held an AI Hackathon to challenge ourselves and push the boundaries when it comes to applying AI to IR.As a result, we walked away with some innovative and impressively creative ideas that we have already started to implement. We're using AI to unlock these opportunities for our clients so they can really benefit from our proprietary data and real-time analytics. Our teams are able to accomplish much more at faster rates with AI in our corner, and I'm looking forward to the new experiences that will bring for our clients. We are working on these new products right now, and I'm very excited to share more when they're ready for launch. Our partnership strategy is to identify and integrate only those partners that bring value to our client relationships and to the ecosystem as a whole, extending this end-to-end value proposition to Q4 clients deepens engagement and loyalty over time.We recently announced a strategic partnership with Novisto, a leading ESG data management software company that will enable companies to build their ESG narrative to be delivered through Q4's innovative platform. Our partnership with Novisto will enable our clients to evolve their ESG metrics and integrate sustainability into their corporate strategy.I'm pleased with the recent appointment of Keith Reed as Q4's new Chief Operating Officer. Keith brings a wealth of experience in aligning large complex teams to expand revenue channels, improve operational efficiency and drive growth. Another 2023 priority is to engage more actively with our investors. As a part of that, I'm pleased to welcome Ed Miller as Head of Investor Relations to the Q4 team. I've known Ed as an active member of the IR community for over 15 years, including several as a client IRO of Q4. I look forward to working with Ed on the evolution of our own Investor Relations program. Lastly, Q4 ranked on Globe and Mail's Women Lead Here Benchmark Of Executive Gender Diversity, identifying Canadian businesses with the highest executive gender diversity. I'm honored to work alongside a talented group of women on the Q4 executive team who are driving innovation, inspiring change and empowering the next generation of female leaders.And with that, I'll now pass it over to Donna to take us through the Q1 financial results.
I'm pleased by our first quarter results as we execute our profitable growth plan and navigate the challenging capital markets. In particular, to highlight that year-over-year, our gross margin improved by 802 basis points to 65.4% and ARPA expanded 11%. Across the business, we continue executing on multiple levers that will compress the time line of our long-term growth strategy. The company is on plan to achieve profitability late in 2023. We are confident in this statement because we have taken the actions that are expected to lower annual operating expenses by at least $6 million, with improvements expected to surface in Q2 and continue throughout the second half of 2023. To protect our clients through their most critical season of February through mid-May, we executed the next steps in our profitable growth plan at a time when it would not inject risk upon their businesses. I will take this time to dive further into the first quarter results, following which Darrell will provide a perspective on the road ahead and updates on the 2023 initiatives. Please keep in mind that all figures are in U.S. dollars. Let's start with revenue. Total revenue for the first quarter was $14.5 million, a 4% year-over-year increase compared to $13.9 million in the first quarter of the previous year. The upward trend can be primarily attributed to new and existing clients adopting Capital Connect platform to utilize web management services to access engagement analytics, to experience our events platform and for clients purchasing additional value-added services. In the first quarter, the Capital Markets platform revenue grew 2.5% to $13.2 million from the comparable quarter last year. Platform Services expanded by 22.1% year-over-year to $1.3 million for the first quarter, and that's driven in large part by the increased demand for website services. As committed, we continue to execute our gross margin expansion strategy, targeting several initiatives. I am pleased to report that our gross margin for the first quarter was 65.4%, and 802 basis points expansion. Significant on its own, it also conveys the importance of the actions taken in 2022 to position ourselves for future profitable growth. The 100% adoption of the virtual events platform and creation of our Latin America operating center were the key pillars driving the first quarter gross margin improvements.On the Virtual Events business, we are now running all earnings events on our proprietary platform. We anticipate additional margin improvements in 2023 as we benefit from a whole year of full client migration to our platform. Our Latin America operating center has surpassed all our expectations, giving us the ability to leverage a new strong employee talent pool while maintaining anticipated cost improvements. `We remain confident that we will still see all five gross margin pillars contributing to the incremental improvements as well as the benefits of these initiatives for a full year in operations. We are committed to significantly lowering our operating expenses, improving our visibility to both positive EBITDA and cash flow in 2023. In the first quarter, adjusted operating expenses, excluding depreciation and amortization, foreign exchange loans, stock-based compensation and other nonrecurring expenses totaled $14 million, down from $14.8 million year-over-year. Cost reduction initiatives executed in May will reduce the operating expenses for Q2 compared to Q2 2022 and more significantly impact future quarters. Sales and marketing costs were $4.7 million or 32% of revenue, down year-over-year from $5.1 million or 37% of revenue. We expect it to remain in the low 30s as a percentage of revenue in the near term and decrease further as a percentage of revenue in the second half of 2023.Research and development was $4.2 million or 29% of revenue. In the quarter, we continued to invest in the Capital Connect platform as the critical component of our strategy to connect all sides of the capital markets. We expect to retain normalized levels of R&D as a percentage of revenue in the low 20s as we accelerate profitable growth in the second half of 2023. G&A for the quarter was $5.1 million or 35% of revenue, down year-over-year from $5.6 million or 40% of revenue. Our efforts will continue to reduce G&A, and we expect a gradual decrease as a percentage of revenue through 2023 to attain a mid-20s level.We are confident that we will deliver positive EBITDA in the fourth quarter through revenue growth and expense management. The groundwork has been laid and we are on plan. Our adjusted EBITDA was negative $4.5 million for the quarter, a significant improvement compared with negative $7.1 million in Q1 of 2022. Earnings per share were negative $0.18 when compared to negative $0.17 in the first quarter of 2022. On an adjusted EBITDA basis, earnings per share is negative $0.11 compared to negative $0.18 year-over-year. Critical to our revenue growth are the two components of ARR and ARPA. Our strategies are intended to grow our subscription revenue with new clients and into our client base. ARR was up 5.3% year-over-year to $55.6 million. And this ARR expansion was driven by client subscription growth this quarter with 170 new subscriptions, 114 from existing clients and 56 from new clients. ARR has been impacted by uncontrollable churn, which has been averaging 50% of our churn for the last four quarters. With our large client base, one of the many ways to fuel ARR and revenue growth is sales of additional products into the base. The power of the platform is exponential when additional products are added. Our efforts to ramp this revenue source is gaining momentum. Annual recurring revenue per account, ARPA, was up 11% year-over-year to 20.4000 driven primarily by 114 existing clients adding new subscriptions. We are excited to be expanding our relationships with so many of our clients. In addition to our upsell success, our pricing strategies and new sales bundled at higher ARR values are increasing ARPA. We are focused on accelerating the upward trend in 2023 with our unique Capital Connect platform that enables all existing clients to adopt new products and new clients to subscribe for a full IR suite.We focus with intent on value creation with our clients in the functionality of our platform to promote client retention and adoption. This quarter, our clients with more than two products increased to 67.3% of our ARR. This represents a steady growth of clients who are maximizing the benefit of a unified platform and data.The expansion sales growth initiative is a primary focus of our sales and client service teams, ensuring our clients understand how our offerings meet their IR needs, and that they understand the unique value proposition of Capital Connect to tie all of the functionality together.Adding new ARR clients and ARR to existing clients works to grow revenue, but only in the presence of strong client retention. Controllable logo retention remained strong at 94% at the end of Q1 2023, consistent with historical rates.The ongoing pressure from uncontrollable churn continued in Q1 due to withdrawn IPOs, M&A activity and to a lesser degree, delistings. Our quarter ended with 2,603 clients on our platform who are using more of our products and spending more with us annually in both subscriptions and value-added services.On to the balance sheet. As of March 31st, 2023, we had $46.3 million in available liquidity, which included $23.8 million in cash, cash equivalents and short-term investments and $22.5 million of availability in an undrawn credit facility. I would like to add that we have no outstanding debt. In the first quarter, we had negative operating cash flow of $6 million compared to the first quarter of 2022 of negative $7.6 million, an improvement of $1.6 million. The company renewed its normal course issuer bid on March 29th, which provides flexibility to repurchase up to 2.1 million shares over the next 12 months. During the previous NCIB, which expired on March 24th, the company repurchased and canceled 379,400 shares at an average price of $2.52. Our core working capital metrics remain solid, ending with a working capital balance of $21.2 million as of March 31st. We remain committed to operating with a strong balance sheet and to be good stewards of capital. And with that, I will turn it over to Darrell for his closing remarks on our focus for the remainder of 2023.
To wrap up, I'm sure it's quite clear that we're pleased with these results. By focusing on what we're able to control, we have made significant progress over the last couple of quarters despite weak capital markets activity. Q2 will be focused on accelerating actions that will further improve both our top line revenue growth and operating leverage. Doing so will ensure the attainment of our objectives by year-end. Looking forward, we will continue to demonstrate the resiliency of the Q4 model through the economic cycle, better positioning the company strategically, operationally and financially to seize a greater share of new opportunities as momentum returns to the capital markets. I feel strongly about the value of this business, how we are executing and the future potential I just described. And that in time, the market will reward us for our execution. That's why we continue buying Q4 stock. Our conviction is further deepened by new signs of demand and a more robust IPO pipeline, coupled with additional cross-sell opportunities. We are embarking on one of the most exciting product cycles in our history. Our offerings will unlock tremendous new opportunities for our clients to benefit from the unmatched richness and scale of our proprietary data with generative AI. The result for our clients is simply better Investor Relations and better insights for our investment banking and equity capital markets clients. When combining this operating leverage with our focus on efficiency, we are convinced investors will take notice and reward valuation as we break through to profitability. And with that, we want to thank our shareholders, clients and employees for their continued support and loyalty. Thank you, everyone, for listening in on today's call. All right. Let's go to questions.
We will kick off our Q&A session with questions from our live research analyst audience. Then based on time available, we will take a few submitted webcast questions. With that, the first question comes in from Kevin McVeigh from Credit Suisse.
Last quarter you talked about some potential Green Shoots. Maybe you can talk about that a little bit, just within the context of -- it seems like some really nice momentum in terms of incremental cost. If I have that right, it sounds like there's an incremental $6 million. Maybe help us try to understand Green Shoots and then the incremental cost benefits. There's a way to think about that over the course of '23.
On the revenue side or in terms of Green Shoots in the market, I would say that we continue to see an improvement in the -- a minor improvement in the activity in the capital markets, particularly around IPOs. The thing to keep in mind is that we are a leading indicator of IPO activity because companies that are planning to go public will purchase our solutions three to six months ahead of them actually pricing. We did see an uptick in terms of activity. Last quarter, I talked about the -- we saw the market starting to thaw. I would describe it that we are starting to see some water trickling there. And so there is some improvement that we are benefiting from. The other aspect, I think, in terms of the green shoots for us, which is more a comment on our execution versus the overall market activity is just the impact of our expansion selling. The focus on our platform and working with our clients and driving that adoption is certainly having an impact. And as I mentioned, kind of 2/3 of our growth now is coming from expansion. We see that we're in a good position to drive -- and we put this strategy in place really in kind of the fourth quarter last year. We're starting to see that impact things going forward. We expect revenue to be impacted positively over the coming quarters through to year-end.
And then over on the expense side, Kevin, as we noted in May, in the first 11 days of May, we executed on some labor reductions that have allowed approximately a $6 million annualized savings. It will be experienced partly in May, June, but then more fully in Q3 and Q4. The associated activity with this is the expansion of the LATAM operating center and can't express enough the ability to find talent there and to execute on that strategy without disruption to the clients. And we were very cautious during February through mid-May. We understand reporting on the fourth quarter and reporting on the first quarter and that compression of time and the intensity of the clients' needs. And so even in the face of volumes being lower than we have seen in, say, '21, we still took the time to wait through that cycle and then take action into May.
Is the impact of the generative AI part of that? Or is that even more leverage to the model as you think about both on the revenue and on the expense side? I know it's something you've been out on the forefront of, but that does that even help kind of scale a process that much more?
I think we certainly see it having a significant impact over the coming quarters. However, we have not priced that in into any of our forecasting or our budgets. I think the key thing to comment on in regards to generative AI is what we see as the advantage overall, are those firms that have access to proprietary data in a world where AI is ubiquitous and everyone has access to these similar tools. But we'll separate those that can provide distinct and true value are those that have proprietary data that these models can be trained on. And that's something that we feel like we're incredibly well positioned in terms of how we're going to apply AI to the products that we deliver to our customers. And then just like all software companies, we will benefit greatly from the efficiencies that come from using these tools, both internally from a development standpoint and also the various different applications of AI across the business. We see a huge impact coming. However, we're not pricing that in per se at the moment.
Our next question comes from Stephanie Price from CIBC.
I was hoping you could talk a little bit about the ARPA increase of 11% year-over-year. Just curious about the breakdown between the upsell versus price increases and what solutions here are seeing the biggest upsell opportunities?
On the ARPA front, we've seen subscriptions primarily in the virtual events platform and the engagement analytics offering. Those are the two primary. I'd say secondary to that would be our ESG offering and our accessibility offerings on the website side. And those would be the primary drivers.
And I just want to confirm, the $6 million in cost savings, that's in line with what you were expecting last quarter? Or are there additional savings here? And just curious if there's additional opportunities within LATAM, it sounds like that's going well?
It is in line with what we expected coming into the year. When we spoke of path to profitability and getting to the fourth quarter with positive EBITDA. We did anticipate that we would be making these changes if volume had not presented itself and that these changes would happen sometime in May or into June, again, if those Green Shoots had not converted to real momentum in the marketplace. And so if we think about sizing the year, they should be side. They're already sized inside. And the only incremental ones that would not be sized as well are the AI benefits that Darrell just spoke about.
Our next question comes from Doug Taylor at Canaccord Genuity.
Let me ask another question or two about the cost savings you've identified. First of all, just to be crystal clear, you say this is primarily in OpEx. Is there any of this that's captured in the projected gross margin improvements? Or is this completely additive to those anticipated benefits?
It was priced in. We had spoken last year about certain functions transitioning to our Mexico operating center over the course of 2023. And so that is the completion of that task and those margin improvements are priced in there. We look everywhere across the business. to both look at where technology can intervene and create efficiency and reduce labor costs, but also then where Mexico has a strong talent base and that we can leverage on that base in other functional areas.But primarily, it was priced into the gross margin.
I mean, again, to be clear on that, there is an OpEx reduction part of this?
It was priced into the gross margin. I think you had two questions. One was related to was the gross margin improvement? Is this additive to the gross margin improvement? And no, the parts that were gross margin, the functions that were being transitioned are in our gross margin projections. The rest of it and the large majority of it was OpEx and it was coming R&D sales marketing and into G&A as well across all three functions, but heavily in the G&A category.
Next question comes from Richard Tse at National Bank Financial.
Just a couple of questions here. If you sort of look at the sort of current OpEx target that you plan on exiting this year, how much incremental revenue do you think you could support going forward? I'm trying to just understand like the scale of operating leverage that's being built into the model.
On the OpEx side, so we have not cut -- I think that the phrase would be we've not cut into muscle, Richard. We are able to -- both with the technology advancements, the AI advancements and more clients with it being ARPA growth, it's more clients onto the same base. Your operating expenses associated with the same clients doing more with you is less than new clients coming in. And so we feel like we're sized appropriately for the 2023 forecast of revenue growth and maintaining the operating expense base.
Maybe what I'll add to that as well is that when looking at the focus on expansion selling is we see now 2/3 of our growth coming from selling into the client base that's inherently more efficient in terms of our ability to drive revenue without having to spend kind of additional dollars externally from a sales and marketing perspective. We have a lot of leverage that's coming from our new operating model. The other aspect is we've mentioned through the comments, the prepared comments around product-led growth. And that's another aspect where we see a great deal of efficiency.When we have the almost 2,000 clients now navigating through Capital Connect as they remain interface with us, gives us a lot of opportunity to effectively promote and position new products and new extensions to those clients, and we're seeing that that's also bringing efficiency to in terms of how we're selling and growing the business from a revenue standpoint. But then finally, on that, from an efficiency standpoint, we've been spending a ton of time and we've mentioned the web management app and other aspects, the more that we have clients that are executing and using our technology to execute all their interactions with us, it allows us to operate with essentially a smaller team. And that's something which is also inherently scalable. We see these changes as not just being reductions from a headcount perspective, but this is about us really delivering on the efficiencies that come from our technology platform and how we've been executing that over the last three or four quarters as really having that impact from a scalability going forward.
Our next question comes from Maxim Matushansky from RBC Dominion Securities.
[Audio Gap] [indiscernible]
Maxim you came through a little choppy there on the audio. Could you just ask the question again, please?
[indiscernible] or whether we should expect a similar quarterly both cadence for the rest of the year in Q1 or if there's any seasonality in Q1 particularly that drove kind of the strong growth?
I believe Maxim was asking about the strong ARPA growth in Q1. Maybe, Donna, would you like to take that in terms of our expectations for the balance of the year.
On the ARPA growth, we have talked about it being quarter-over-quarter or year-over-year, same quarters looking at double-digit growth in and around what we delivered on Q1. There isn't seasonality really to it. I think what you're seeing is the strength of the machine -- of the expansion machine and the focus on that, the product-led growth that's available, but also the relationships with the clients and the offerings, in particular, engagement analytics, all of that supporting Q1, we would expect at a minimum to see that kind of ARPA growth going forward through the balance of 2023.
And just as a follow-up, has there been any changes in the competitive environment that you've seen, particularly in the webcast or analytics part of the business as you've started to push more heavily there? Have you noticed any changes in the competitive environment?
The short answer is we have not seen a real change in terms of the competitive environment. What we have seen is that the -- our positioning in terms of how we connect not only the workflow of our products, but the data and analytics is really resonating.The value proposition around if you run one product with us, say that's the investor website, the value that the client receives if they also run their events and they run a large number of their events through our platform, and they had all their e-mail distribution also is handled by us. Our ability to deliver that holistic view of all their investor interactions through engagement analytics is something that is truly unique in the market, and that continues to be allowing us to be incredibly well positioned against competitors. We haven't seen any sort of dynamic change there, if not actually improving as we scale this out even further.
We have a follow-up question from Doug Taylor from Canaccord Genuity.
A couple more questions on the cost reductions. First of all, is there some onetime costs we should anticipate as part of achieving the $6 million in savings initiatives in the coming quarters?
There is a onetime cost that should be expected, Doug.
You want to provide any more color on that?
It will relate to restructuring costs.
And then just to summarize your path to profitability, if we take Q1 EBITDA loss of $4.5 million as a baseline, you're signaling $1.5 million quarterly pickup from OpEx. I think your gross margin expansion gets you a further $1.5 million per quarter in rough numbers.And then the remaining $1.5 million or so you'd expect to come from revenue growth through either account or revenue per account expansion. Am I missing anything there? Does that summarize it well?
It's a great summary, but there's also some expenses that are annual in nature that we are targeting on reductions as well. Some of our operating costs that are nonlabor-related that have definitely have room for decreasing that will also augment. That will be a supplement too.
We have a follow-up question from Richard Tse from National Bank Financial.
I have a question on sort of the former competitive question. Can you maybe talk about sort of your win rates? I know you think that hasn't really changed over the course of the past little while. But typically, when you go up for bids, like how is the win rate pan-out to over the course of the past couple of years.
It varies across different products and different geographies. But in general, I would say that we target around a 30% win rate from opportunity to win. And that's something that is an important balance for us that when we see that percentage start to creep up, we typically look at pricing to make sure that we're fully optimizing pricing in market. Although it does ebb and flow depending upon the region and products, the way to understand it is about a 30% win rate. And so that's where we think that as the market conditions do change and improvement we see more IPOs coming to market, we see more financings coming. We see the demand environment will change, and that will help us bring more new logos into the business. But the key thing for us is to really never take our eye off the benefits that's coming from expense and selling in the platform strategy. But the win rate, without mentioning that 30% is really the new logo side, not on the expansion. Expansion, it's actually much, much higher.
What's sort of the cadence that you're kind of looking for in the back half of the year to sort of meet your target of kind of exiting at a certain EBITDA level? Are you kind of expecting a fairly meaningful pickup in terms of the revenue side to capture that operating leverage that's being built in?
Richard, when we previously spoken about revenue for 2023, we've said we expect in the low double digits for the year, but accelerating as we move into the back half of the year. I think we remain on that path of lower growth rates in the front half of 2023 and higher growth rates in the back half, delivering something in the low double-digit range.
That concludes our questions portion of today's call. I will now pass this over to Darrell Heaps.
Wonderful. Well, thank you, Ed, and thank you to all the analysts that joined us today and all of those very thoughtful questions. And just a final thank you to my partner on the webcast here today, Donna. Thank you very much. And have a great day, everyone. We look forward to speaking again next quarter. Cheers.