Coveo Solutions Inc. (CVO) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Coveo's 2023 Annual General Meeting of Shareholders. [Foreign Language], and I'm the Chairman and CEO of the company. Speaking to you from San Francisco, where I'm meeting with key customers and partners all week. With me here on this virtual AGM are Brandon Nussey, the Chief Financial Officer of Coveo; Nick Goode, the Chief Business Officer of Coveo; and Jeremie Ste-Marie, the Senior Director, Corporate Legal Affairs of Coveo as well as a few other folks in listen-in mode. As you now know, the company has decided this year again to conduct the meeting virtually by way of a live webcast to maximize shareholder attendance for those who would be unable to attend the meeting in person. By holding the meeting virtually, all shareholders, regardless of their geographic location, have an equal opportunity to participate in real-time and vote at the meeting. Fiscal 2023 was another record year and a pivotal one for Coveo for a number of reasons. First and foremost, as most of you know, during fiscal 2023, we launched our Relevance Generative Answering capability, which is now live across Coveo's own customer self-serve experiences. Coveo Relevance Generative Answering brings large language model technology on top of the secure unified indexing and relevance capabilities of Coveo Relevance Cloud AI Platform. This makes Generative Answering using large language models possible for enterprises, where security, privacy, factuality, real-time sources of truth, relevance and the ability to access multiple sources of content are all key imperatives. In addition to our Relevance Generative Answering capability, we introduced and delivered a number of other customer-centric product features, mainly in our e-commerce and service lines of business. In fiscal 2023, we also made the important announcement that Coveo's AI Search and Recommendations Platform for SAP Commerce Cloud became an SAP Endorsed App. This is very significant for Coveo given the global reach of SAP and enterprise business to business and business to consumer commerce. In terms of financial results, fiscal '23 was a record year for Coveo. In short, we met or exceeded top line and bottom line guidance for all 4 quarters of fiscal 2023 and significantly improved our operating efficiency. We also recently announced that we would achieve positive operating cash flow during fiscal '25, all while continuing to grow our revenue despite the challenging macroeconomic environment. As far as recognition goes, I am proud to say that this year was a banner year for Coveo. Among others, we were named a Salesforce Commerce Cloud Partner of the Year, a Champion in SoftwareReviews 2022 Enterprise Search Report, a 2022 Leader in Gartner's Magic Quadrant, a Champion in the Enterprise Search Data Quadrant of [ SoftwareReviews ] 2023 Report, the Best Large Language Model Application for 2023 by the Breakthrough Awards for our Smart Snippets feature and recently, the Best Enterprise Search Vendor in SoftwareReviews 2023 Emotional Footprint Report based among other things on customer reviews. Lastly, we completed a number of strategic projects during fiscal 2023 and in the current fiscal year. Among others, we obtained our ISO 27001 certification, launched Coveo Services in the Amazon Web Services Canada region, launched and completed a CAD 31.5 million substantial issuer bid, launched a normal course issuer bid, and we also continued to use our company to make a significant impact in the communities we serve, including through our first round of donations of equity, time and technology post IPO following our Pledge 1% and the number of other community partnerships. As you can all tell by now, fiscal '23 was an exciting year for Coveo. But we are even more excited for what's ahead. We're grateful to have you as shareholders to stand by our side as we continue to meticulously scale the business. Now for the formal part of the meeting, I would like to make a motion to have Brandon Nussey, our CFO, act as Chairperson of this AGM in accordance with Section 11.8 of our general bylaws. This motion has already been seconded by Nick Goode, our Chief Business Officer, who is also a shareholder of the company. Any question of oppositions, I will pause for 40 seconds. Great. I can now confirm that Brandon Nussey will act as the Chairperson of this meeting. Brandon, over to you.

Thank you, Louis. Good morning, everyone. This is Brandon Nussey, Chief Financial Officer of the company. [Foreign Language] Before we start the formal portion of the meeting, I would like to make a motion to have Jeremie Ste-Marie, our Senior Director of Corporate Legal Affairs act as Secretary of this AGM also in accordance with Section 11.8 of our general bylaws. This motion has already been seconded by Nick Goode, our Chief Business Officer, who is also a shareholder of the company. Any questions or opposition? Great. I can now confirm that Jeremie Ste-Marie will act as Secretary of this meeting. Before we begin with the formal portion of the meeting, I will hand it over to Jeremie, who will quickly go through the meeting's rules. Jeremie?

Thanks, Brandon. Good morning, everyone. [Foreign Language] To ensure that the meeting proceeds in an orderly fashion, we wanted to communicate with you some information regarding the conduct of the meeting. First, today's meeting will be conducted in English, and the management presentation at the end of the meeting will also be given in English as our shareholder base is diverse and shareholders and proxy holders are attending the meeting from all around the world. As you can see, for convenience, a live France translation is being provided. Copies of all the documents related to today's meeting in both English or French are available on our SEDAR+ profile at www.sedar+.ca and on our IR website. Questions may be asked in English or French throughout the meeting. Second, as this meeting is being held online, here are a few rules governing today's meeting. All registered shareholders and duly appointed proxy holders that have completed all prerequisite steps to enter this meeting as such will be able to ask questions and communicate with each other during the meeting via the chat function of the meeting platform. Questions submitted during the formal portion of the meeting may be addressed by the appropriate person during the relevant order of business if appropriate or if deemed more appropriate at the formal Q&A session of the meeting, which will occur after the management presentation. Following adjournment of the formal business of the meeting, management will give a presentation about the company's business and activities. At the conclusion of the presentation, the company will hold a live Q&A session to address general questions submitted during the meeting if any. We have allocated a certain amount of time for today's AGM as a whole, and we'll answer as many questions as we can in that period of time. In order to allow the company to answer as many questions as possible from shareholders, please ensure your questions are succinct and cover only one topic per question. Questions from multiple shareholders on the same topic or that are otherwise related may be group summarized or answered together. Follow-up questions will only be addressed via e-mail to [email protected]. The Chair of the meeting, Brandon Nussey, reserves the right to edit or reject questions he deems inappropriate or to limit the number of questions per shareholder or duly appointed proxy holder in order to ensure that as many persons as possible have the opportunity to ask questions. The Chair of the meeting has broad authority to conduct the meeting in an orderly manner to ensure the meeting is conducted in the manner that is fair to all shareholders, the Chair may exercise broad discretion in the order in which questions are asked and the amount of time devoted to any one question. The company does not intend to address during the meeting any questions that are either irrelevant to the business of the company or the business of the meeting related to material nonpublic information that are of a personal nature, including any question related to personal grievances, derogatory references to individuals that are otherwise bad in taste, hostile or otherwise disruptive to the orderly conduct of the meeting out of order or not suitable for the conduct of the meeting, each as determined by the Chair of the meeting in his reasonable judgment. [ Coveo rep ] will contact you after the meeting if your question is of a personal nature and best address privately. Today's votes on the items of business will be conducted via electronic ballots and you will be required to vote on each item of business in real-time. Voting will open upon commencement of the formal portion of the meeting and remain open for you to vote at any time until the polls are closed. You may choose to vote on each resolution immediately or wait until the conclusion discussion on all resolutions prior to casting your vote. When you are asked to vote, you will receive a message within the online interface requiring you to register your votes. If you have already submitted your voting instructions or have already voted prior to today's meeting, you are not required to vote again. If you decide to vote again today, you will be revoking your previous voting instructions. Finally, we want to remind shareholders and duly appointed proxy holders that in the event of a technical function or other significant problem that disrupts the meeting, the Chair of the meeting may adjourn, recess or expedite the meeting or take such other action as he determines appropriate considering the circumstances. Okay. Thank you all for listening to these rules. With that, let's call the meeting to order. Brandon, over to you.

Thank you very much, Jeremie. The meeting will now come to order and per the powers vested in me by our bylaws, I appoint Francine Beausejour and [ Jenny Concam ] of TSX Trust Company here with us today in listen-in mode to act as scrutineers for the meeting. I wish to note that in addition to folks at TSX Trust Company, we have a few other people here with us in listen-only mode today, including certain executives of the company, our director nominees and our external auditors, PricewaterhouseCoopers. The Secretary has confirmed that the meeting notice, the notice of availability of materials or management proxy circular, our annual report, including our annual financial statements and the corresponding MD&A and all other required meeting materials were made available to all shareholders. As -- all such materials can be found under the company's profile on SEDAR+ at www.sedar+.ca and on our Investor Relations website. The Secretary has further confirmed that the notice of the meeting, the notice of availability of materials and a form of proxy and/or a VIF as applicable were mailed on August 15, 2023 to all shareholders of record as of August 2, 2023, as evidenced by an affidavit of mailing provided to us by the company's transfer agent, TSX Trust Company. The affidavit of mailing is available for inspection by any shareholder. I ask that the Secretary of the meeting file a copy of such affidavit with the minutes of today's meeting. We've also been advised by the transfer agent and the meeting scrutineers that the holders of at least 25% of the aggregate number of votes attached to all of the company's shares entitled to vote at this meeting are virtually present or represented by proxy, and at least 2 persons entitled to vote at this meeting are virtually present or represented by proxy, such that we have a quorum for the meeting per the company's bylaws. I ask the Secretary of this meeting to file a copy of the scrutineer's report with the minutes of today's meeting. Therefore, I declare this Annual General Meeting to be regularly called and properly constituted for the transaction of business. The voting polls will now be open for all resolutions. They will close approximately 1 minute after the last item of business. Each item of business to be considered today requires that a majority of the votes cast be voted in favor of the item of business in order for the corresponding resolution to be passed. I wish to inform each and every one of you that we have been informed by the transfer agent and scrutineers that management appointees have the right to exercise an aggregate of -- Jeremie, do you have that number? Give us one second here. Our apologies.

Thank you very much, Brandon. I have been advised by our scrutineers that all of the motions today are expected to be carried at 99% voting in favor of all resolutions. Absent any contrary votes today or any registered shareholder connected today revoking their votes, the motions presented before you today are each expected to be carried.

Thank you, Jeremie. Finally, I note that given today's meeting format, our President and CTO, Laurent Simoneau and our Chief Business Officer, Nick Goode, both of whom are shareholders of the company have agreed as shareholders in advance of the meeting to move and second all motions presented to you today in an effort to be as efficient as possible and to allow as much time as possible for questions at the end of the meeting. As such, all motions presented before you today are considered and deemed to have been moved and seconded. If you have any questions on motions presented before you today, please let us know by writing in the chat function of the meeting platform, and we will address such questions at the appropriate time. Today's first order of business is to receive the company's consolidated financial statements for the fiscal year ended March 31, 2023, and the auditor's report thereon. First, I submit the company's consolidated financial statements for the fiscal year ended March 31, 2023, and the auditor's report thereon to this meeting. These statements have been reviewed and approved by the company's Audit Committee and Board of Directors. The company's annual report comprising the company's financial statements for fiscal year 2023 was made available to shareholders in accordance with the applicable laws and exemptions therefrom. Having considered the length of time needed to read all pages of our financial statements, I have moved that the requirement to present and read the financial statements for the fiscal year ended March 31, 2023, and the auditor's report thereon be waived, and I now place the company's consolidated financial statements for fiscal 2023 and the auditor's report thereon before the shareholders. Are there any questions? As there are no relevant questions on this item of business, I declare that the company's financial statements for fiscal 2023 and the auditor's report thereon have been duly presented and received. The next item of business is the election of the Directors of Coveo for the ensuing year or until their successors are duly elected or appointed as applicable. As required by applicable securities laws, we will be nominating and approving Directors individually and not by slate. The number of Directors to be elected at today's meeting has been fixed by the Board of Directors at 9. All Directors currently sitting on the Board of Directors of the company are standing for reelection at the meeting. In addition, Ms. Jill Denham is standing for election as Director for the first time in replacement of Mr. Sumit Pande, who resigned from the Board on March 31, 2023. Ms. Denham is independent per applicable securities laws, and it is proposed that she sits on the Audit Committee of the Board in replacement of Mr. Alberto Yepez if she is elected. Jill has over 20 years of experience in business and financial services, and she brings a diverse skill set to the Board of Directors. Among her past roles, she was Head of the Retail Bank at CIBC. She had responsibility for the European business of CIBC. And before that, she was President, Merchant Banking at CIBC. She has also been a Director of the Ontario Teacher’s Pension Plan Board and National Bank of Canada. Ms. Denham is a former Chair of the Board of LifeWorks, which is formerly Morneau Shepell, a former Lead Director of Canaccord Genuity and is a Board member of Canadian Pacific Kansas City Limited and Kinaxis. We are very happy to have her standing for election today and are convinced that she will be a great addition to our Board. Further information on Ms. Denham and the other 8 Directors standing for election today is set forth in the company's management proxy circular, a copy of which is available on our IR website and our SEDAR+. I confirm that all nominees are eligible for election and have accepted to serve as Directors of the company should they be elected. As previously mentioned, all motions have been pre-moved and pre-seconded. So I here -- I hereby confirm that each of the 9 persons nominated to be elected as Directors as set forth in our management proxy circular are up for election to hold office until the next Annual Meeting of Shareholders or until a successor is duly elected or appointed as applicable. Are there any questions? As there are no relevant questions on this item of business, I now call for a vote on the election of each individuals standing for election on Coveo's Board of Directors. Would all shareholders and duly appointed proxy holders, please enter their votes. We will give you 1 minute to do so and then continue to the next item of business. The carrying of all motions presented before you today will be formally confirmed at the end of the formal portion of the meeting. Thank you all for your votes. The last item of business today is the appointment of our current auditors, PricewaterhouseCoopers LLP, Chartered Professional Accountants as auditors of the company for the ensuing year and authorizing the Board of Directors to fix their remuneration. PwC have been auditors of the company since its incorporation in 2004. As previously mentioned, all motions have been pre-moved and pre-seconded. So I hereby confirm that a vote can be taken on the appointment of our current auditors, PricewaterhouseCoopers LLP as auditors of the company for the ensuing year and the authorization of the Board of Directors to fix their remuneration. Are there any questions? As there are no relevant questions on this item of business, I now call for a vote as regards the appointment of our auditors and the authorization of the Board of Directors to fix their remuneration. Would all shareholders and duly appointed proxy holders, please enter their votes. We will give you 90 seconds to do so and to complete any other missing votes and then officially close the votes for this year's meeting. The carrying of all motions presented before you today will be subsequently formally confirmed. Thank you all for your votes. The polls are now closed. We will now take a brief recess for our scrutineers to compile the votes, and we will be back with preliminary results and announcements regarding the carrying of the motions presented before you today. Thank you all for your patience. The scrutineers have provided me with their preliminary report of voting results as regards the motions presented before you today. It is my pleasure to confirm that all resolutions presented before you today have been formally carried and adopted with a substantial majority of votes cast in favor of each resolution. As such, the Secretary and I hereby confirm that the 9 Directors standing for election as set forth in our management proxy circular have been duly elected, and that PricewaterhouseCoopers have been appointed as auditors of the company, and the Board is authorized to fix their remuneration. Final voting results will be published today in a press release and a report of voting results will both be filed under our SEDAR+ profile. As there is no further business to be brought before the meeting, I hereby declare the formal portion of this meeting to be concluded. I will now turn it over to Nick Goode, our Chief Business Officer, who will present together with myself on the business and the activities of the company and talk about the year ahead. I wish to remind shareholders that questions submitted during the meeting that did not specifically pertain to an item of business will be addressed at the end of our presentation.

Thanks, Brandon. Make sure the clicker is working here. So first of all, great to be with all of you for our second Annual General -- our second AGM or Annual General Meeting. And a big thank you to all of our customers, employees and investors for their continued support over the last year, certainly, our investors for putting their faith and confidence in us to continue to grow the business, our employees for hard work and dedication and our customers for their partnership and trust in Coveo to deliver great outcomes and to help them optimize business outcomes. I think the last 12 months has really seen a lot of exciting changes in the markets that we play in. And we've been talking about AI for the better part of a decade at this point, and you go back to the last AGM, we were talking about AI. And this little thing called ChatGPT came out in January, February of 2023. And I think that's been a catalyst for this fundamental change in digital expectations and digital experience expectations. And it's true for customers and for people visiting websites, this expectation that I'm going to receive a personalized interaction every single time I go to a website. This expectation that we're going to be able to link a journey across not just a website, but into maybe an in-product experience or a mobile app or you name it. But there's just this brand-new kind of waking up, if you will, around the benefits of AI. And what that means is that now the old way of doing things, i.e., we're just going to serve you up a bunch of links and you're going to have to go find whatever you're looking for in those links, that's no longer what we believe customers and users are looking for. And the one-to-one personalization that I was talking about can really only be achieved by using AI. And if you think about our typical customer and the markets that we focus on, it's enterprise customers. And so these are folks that have tons of content in a bunch of different sources in a bunch of different places. They're serving very large audiences and groups of people oftentimes in different geographies, in different locations. And then you need to bring both of those together and doing it in a way where it's going to optimize the business outcome, whether that's for somebody in commerce, where you might want to optimize revenue or profitability or whether that's for somebody in the customer service space where they're looking to drive case deflection and basically save money and then also make their agents if somebody does have to log a case more proficient. And again, I talked about ChatGPT already, but I think really what it did is it's shown a light on this market that we're in -- that we participate in today and this whole notion of AI. And really, what we believe is that either companies are going to use AI to compete and to differentiate what they're doing and to provide great digital experiences or they're going to compete and lose against folks that do. And ChatGPT, I think really for the first time since we've been a public company and really in the history of Coveo, suddenly AI is a C-level conversation. And it's something where this is now a Board-level discussion and something where companies are getting pressured by their Boards to have an answer for how they're going to use AI to compete and to be successful in the market. AI is not a new concept, right? And we talked about how we've been using AI for over a decade. And I think what we've seen as we talk about how digital experiences have evolved going back to 2008, we've gone from this notion of very basic search. If I type in red dress and there's a product that's tagged with a red dress, I'm going to see red dresses. If we go back a year ago, we were using LLMs, but really, it was more around this [ 1:1 ] personalization construct. And the idea that if Brandon and myself are going to a website and we search for different things and we might have different intents when we go to a website, Brandon and I shouldn't see the same thing. We should see different things, and we should see things based on what our intents are and what we are actually looking for at the website. And the latest and greatest here is around generative AI. And this notion of instead of having to go and click on a link and search through a document or a YouTube video or you pick the source of content to find an answer, it's now about serving up right away that response to whatever the question is. Now there might be situations where you do want to go and browse through documents. So you might want to just get additional information on the topic and not have a specific question. You still want that one-to-one personalized search results in rankings, but then there might be times where you want that actual written response to a specific question. And again, when we talk about ChatGPT like I have already, it's really, really cool when you're just a person searching for something like, hey, what is a great recipe using these 4 ingredients or a factual historical question. There's one on this slide that says what happened to rents during the Franco era in Barcelona. Very, very cool for that purpose. But the question becomes, how do you bring this into an enterprise use case for customers like ours. And I think what we've seen is there's this conversational capability that you have with ChatGPT, but there's this convergence of what ChatGPT is doing and what LLMs are doing in the classic search paradigm. And so what we believe is that it's going from a search box to an intent box. And like I said previously, there might be times where you want to just go browse for content. There might be times where you have a specific question. And so it's this convergence of the conversational box and the search box into an intent box where we -- obviously, it would be silly to have a separate place for both of those. So you need that one unified area where users can go and either search and browse or they can get an actual response to whatever their question may be. And finally, the last thing that I'll talk about for enterprise purposes here as we think about the market, ChatGPT, like I said, great for consumers. However, for enterprise use cases, this is really complicated. And for CIOs, there's a ton of things running through their heads in terms of how they turn this from what's really something that's out in the wild and consumer-facing into something that can be trained on and leverage content from behind their own firewall. If you think about that ChatGPT, ChatGPT is only using public information and publicly available information. What about if I'm a tech customer and I've got information on an internal knowledge base or behind my firewall, an LLM is not going to be using that information. So the CIOs that we've spoken with have these kind of 5 concerns here, if you will. So number one is content, and I mentioned that. There's content behind their firewalls that an LLM will not have been trained on that they need to for sure have that LLM drawing from. And usually, it's not in one place. It's in a bunch of different places. It's not just one type of document. It's multiple types of content and just generally a very disparate array of content that needs to be leveraged by an LLM to generate written responses. Number two, which is also [ non-trivial ] security. So certainly don't want people to have access to documents that they're not permissioned to have access to. And on top of that, I certainly wouldn't want an LLM like ChatGPT to be training and getting smarter based on documents and information that's behind my firewall. And so the information that goes into these LLMs cannot leave the home environment, cannot be trained and used to make those LLMs smarter. Accuracy is absolutely paramount. And the crazy thing about ChatGPT, it will hallucinate with so much confidence that you'll think it's right. If I'm an engineer at Boeing fixing an engine on a Dreamliner and I get a wrong answer from an LLM, that's a big, big problem, and that cannot happen and can be incredibly costly. And so for our customers that are enterprise customers, they're relying on the LLM that they're using and the generative AI solution that they're using to be factual, no matter what, would rather give no answer than a wrong answer, and then on top of that, have the ability to go back and see the source of that answer, what specific document is that pulling from? Cost is another huge issue. And I'm sure folks are aware of the cost of something like ChatGPT. It is very, very expensive. It's priced based on tokens, which is a very opaque pricing mechanism where the cost of an A character is different than the cost of a D or something like that. And it can be 100x to 1,000x more expensive than what our typical QPM cost would be. So there needs to be a way to try and rein in those costs and to make it from an ROI standpoint, be worth it, the costs can't be 100x what it is today. And then finally, the digital experience. Again, I talked about this intent box, but the ability to bring that relevancy in that one-to-one personalization, that contextualization into the response from an LLM is absolutely critical. And I think this is where Coveo really comes in and where we think we have a pretty unique solution here, where -- and I don't want to oversimplify this, but effectively, the difference between what we were doing 12 months ago and what we're doing now with LLMs, we're effectively doing the same thing around indexing, content unification, contextualization and one-to-one personalization, and then we're feeding some of that content to an LLM to provide a written response and then giving you the in-line citations, and I'll show that in a second. But it's not like we had to go and do a total [ 180 ] shift here and totally rethink our platform or anything like that or come up with a new product. It's really just an additional application and kind of the next step as we think about it in terms of the evolution of what we're doing. So the great thing about our solution here is that you still get that contextualization, right? You still get those search results, the same classic Coveo experience, but you also get a written response so you don't have to go look through some of that documentation to find the answer, it's just given to you right away. And I'm happy to say, Coveo is live with the solution as Customer Zero today. So we're live with it within our own support portal, within our community and then also in product. And you can see here on the slide, on the left side, you have the classic Coveo facets. You've got the classic search results down below. But then you have this nifty little generated response with references and in-line documentation and citations. So this is really, really exciting. I think even more exciting is the fact that we were able to announce this in March of 2023 and come out with something that's functional and live within about 6 months. And we have an exciting number of customers that I'll talk about in a little bit that are already getting access to this product. If you think about kind of where we see the market going here, and I don't think this is anything new for many of you that are shareholders and that have been shareholders. Do we kind of see this need for this final AI capability? And if you think about the ability to bring a bunch of content together and then feed it to some of these engagement apps like we've talked about like with Salesforce and Adobe and SAP, you need that ability to bring that content together and then to use machine learning to create that contextualization. And that's what Coveo does. And I think the only addition here is this generative AI piece. So we believe across the entire customer experience or user experience, there's this need to bring all of that information together, and as you maybe go from a commerce website into the support portal to be able to follow your journey to understand you as the user and then using AI to serve you up with whatever you're looking for, and that's where we think Coveo comes in here. I've talked about the integrations. And so certainly, Salesforce, I'm sure folks are familiar with. SAP, as Brandon, I think and Louis alluded to earlier is the really exciting one. And so we became an Endorsed App back in March of 2023. We are one of the small handful of Endorsed Apps in the SAP CX ecosystem and the only one for Search and Recommendations. That is very exciting. SAP is the largest commerce platform by GMV in the world. And so we're very excited with the momentum that we've seen there. Obviously, Salesforce continues to be a big partner of ours, and we love what we're seeing with Adobe on the website front. If you think about our customers and what they use Coveo for, it's really around optimizing business outcomes. And you can see here the business outcomes by a line of business that we're focused on. Commerce, it's revenue and profitability and loyalty more broadly, service, it's case deflection and then faster time to first case resolution, more broadly, agent proficiency with websites just a better website experience and then workplace, it's all around employee proficiency and self-service. These are the reasons why our customers at the end of the day buy the Coveo platform and subscribe to the innovation that we're putting into the platform because they believe in the ROI that we can deliver. And obviously, for us it's all about making sure that we do deliver that ROI. And you can see here the great group of customers that have put their trust in partnering with Coveo over 650 with a focus in technology, health care, manufacturing, financial services and retail. But we're very excited by these customers. And obviously, it's a great group of enterprise customers that continue to work with us across multiple lines of business and multiple use cases. And when we come back to generative AI and our Relevance Generative Answering beta program, very excited about the progress here and the customers where we're giving them product access. So we have 20 in the Design Partner Program, including some of the brands that you see here, 25 in our advisory group. And obviously, this is an incremental upsell for us. This is not something we're giving away for free. We've announced the early adoption pricing of an additional 40% of ACV or $150,000, whichever is greater. But we have started to give folks product access beginning last month and into this month. More will continue to get product access, and we're really exciting about -- we're really excited about the early results there and some of the traction that we're seeing with these customers and the value that we think Relevance Generative Answering can deliver to those customers. Obviously, our TAM, we continue to believe is very large and continues to be very underserved overall. And it's a lot of greenfield here. We think service -- everything around Generative Answering is a very exciting new piece of service and a new exciting opportunity within service. But we think we have a lot of room to grow within our existing TAM. And certainly, I think we're just scratching the surface in terms of our penetration of it. In terms of where we're going from here and the growth levers that we see, grow existing customers, grow in existing markets and develop new markets. So certainly, within the existing customer base, a lot of this is Relevance Generative Answering and generative AI. We believe that upwards of 50% of our installed base is potentially addressable with an upsell of generative AI and of Relevance Generative Answering. And so certainly, it's on us to go and execute on that opportunity. But in addition to that, there's still relatively low penetration of our overall customer base in terms of using all of the potential solutions and applications of our platform that they could. So continuing to work on attacking that white space, but there's definitely room for us to grow within our installed base. When we talk about our existing markets, I mentioned SAP. SAP is a big deal. And we believe that for our commerce line of business, that's a very, very exciting opportunity. But in addition to that, it's leveraging our new capabilities around Relevance Generative Answering to go and land new customers across service, workplace and websites. I mean, we think that that's a true differentiated capability that will allow us to land additional new customers. And then finally, when we talk about new markets, certainly, there are new platform integrations that we're exploring. And I think geographically, we talked about EMEA and ANZ in the past, but there's still more to do there and more opportunity for us to expand in both of those geographies. And lastly, with M&A, we continue to be very, very disciplined on the M&A front. There are more opportunities out there than there were at the last AGM. And we continue to believe that there can be some exciting ways to bolt on additional technological capabilities and add some market share through M&A. The last thing I'll leave you with is the Pledge 1%. And so obviously, we were one of the first companies in Canada to join the Pledge 1% movement. Very excited about the progress here. We did make our first 1% equity donation this past year since the last AGM. And so really, really excited about the progress there, continuing to -- continuing to dedicate time and ultimately, product as well in furtherance of social good and of social change. So very excited about that and look forward to continuing to watch the progress there over the next 12 months. So with that, I will turn it over to Brandon to go through the financial highlights.

Thank you, Nick. So we'll start with the business model. For those of you who are less familiar with it, it is one of the strengths of the business, for sure, is the revenue model [ underneath ]. Subscription-based revenue model, contractually committed volumes from customers, meaning it's not consumption based. We don't have variability in the revenue line. This is subscription revenue that gives us good line of sight, good reliable ongoing revenue stream. Our customers will sign typically 3-year contracts with us, which we bill annually upfront. And as Nick highlighted, we serve enterprise customers, which on the average results in good ACV, annual contract value per customer of around $170,000 and growing. Our revenue model is land and expand, meaning we will typically land customers and start with a single use case around, say, commerce or service or workplace or website and then look to grow that account over time either through incremental usage of that use case or cross-selling incremental use cases altogether. So that is the business model. If we transition now into our financial highlights. This is from our most recent quarter, Q1 of our fiscal '24. We reported $31 million of overall revenue. The all-important SaaS subscription revenue line, and I say all-important because it's the recurring, reliable and most profitable revenue line grew 20% on a constant currency basis. While total revenue, which includes our professional services revenue stream grew 16% on a constant currency basis. And as I mentioned, 93% of our total though does come from that SaaS subscription revenue line, which is the line we encourage you all to track most closely. 109%, if I focus on the metric on the bottom middle, net expansion rate, meaning our customer cohorts do grow over time. That nets out churn and looks at are we growing those cohorts and at 109% in our most recent quarter, pleased with our progress. And we now serve over 650 customers with our software solutions. Just looking at the SaaS subscription revenue line, as you'd expect, given the reliable revenue model we have and strong retention rates, good steady growth here, as I mentioned, 20% in our most recent quarter, where we reported $28.5 million in total revenue. And of course, we are very focused on our path to profitability. To me, the most important long-term indicator of the profitability of our model is on the left around our gross margins. 82% gross margin for SaaS subscription revenue in our most recent quarter, 78% overall. Those are wonderful numbers. We're making good progress there. We're really pleased with that overall outcome, and as I said, speaks to the long-term profitability of the model. On the right is our adjusted operating loss. You can tell that, that has been improving considerably, loss of $2.8 million in our most recent quarter, where we actually generated positive cash flow from operations of $1 million. We are committed to reaching cash flow positivity in our upcoming fiscal year, fiscal '25. It's a commitment we stand behind and are confident we are on track for. We did announce guidance for the year and for the second quarter in our most recent call. For the year, we now expect $118 million to $120 million of overall SaaS subscription revenue, $127 million to $129 million in total revenue with adjusted operating loss of $11.5 million to $13.5 million. As I mentioned, cash used in operations, we expect to be less than $10 million this year, and we expect that to move into positivity as we move into our next fiscal year. So with that, that will wrap up our presentation and we can move on to the Q&A portion of the meeting.

All right, folks. This is Jeremie Ste-Marie, Senior Director of Corporate Legal and Secretary of the meeting. Before we conclude the meeting, as Brandon mentioned, we would be pleased to answer your questions received from shareholders during the meeting and the presentation that were not yet addressed. For each question we answer, I will read out the question as well as the name of the person who asked the question and one of the people here with me today will answer it. We will now give shareholders an additional 30 seconds to ask questions through the chat function of the meeting. Okay. Thank you, all. It seems like there are no questions at this time. As such, this concludes this year's Annual General Meeting of Shareholders, and I am hereby formally declaring the meeting closed. Thank you all very much for joining us today. We are looking forward to seeing you next year.