Tribe Property Technologies Inc. (TRBE) Earnings Call Transcript & Summary

Welcome to the Tribe Property Technologies Third Quarter 2022 Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Shobana Williams, Vice President, Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Thank you all for joining us today. On our call, we have Tribe's CEO, Joseph Nakhla; and our CFO, Jim Defer. Today after market closed, Tribe issued a news release announcing our financial results for our third quarter of 2022. This news release is available on Tribe's website under Investor tab and is filed on our SEDAR profile. Before we begin, I would like to remind you that our discussion will include forward-looking statements that are based on management's current views and assumptions, and that this discussion is qualified in its entirety by the cautionary note regarding forward-looking statements that is appended to our news release. Please review our press release and Tribe's reports filed on SEDAR for various factors that could cause actual results to differ materially from the projections. In addition, reconciliations between any non-IFRS measures to their closest reported IFRS measures are included in our earnings release to the Canadian securities regulators. Please note that all financial information is provided in Canadian dollars unless otherwise noted. Following prepared remarks by Joseph and Jim, we will conduct a Q&A session, during which questions will be taken from analysts. With that, I'd like to turn the call over to Jim, who will review our Q3 financial results. Jim, please go ahead.

Thank you, Shobana, and good afternoon, everyone. Despite the market challenges, Tribe once again delivered a strong financial performance in the third quarter. In the third quarter, we delivered a strong comparative quarterly revenue growth. Q3 2022 revenue increased by 10.9% compared to the comparative quarter in 2021, coming in at approximately CAD 4.5 million. Margins and profitability, however, continue to be challenged by revenue growth in our no-margin property maintenance division of the company, headcount growth in advance of integration and optimization of acquisitions, increased staffing and product development related to Tribe Marketplace launched just 3 weeks ago, salary increases and higher than average labor turnover given COVID and post-COVID market conditions and alignment of compensation policies from acquired business units. In terms of adjusted EBITDA, we believe adjusted EBITDA to be a more reflective measure of the company's cash flows. Adjusted EBITDA was an outflow of CAD 2.2 million compared to an outflow of CAD 1.1 million for the third quarter of 2021. Our company has increased costs associated with being a public company and continue to invest in building out its technology platforms and our people to prepare for anticipated organic and acquired growth. Please refer to the company's discussion of operations in its MD&A filed on SEDAR and our press release today for further details on our calculation of adjusted EBITDA. There is a growth. Tribe's acquisition and integration teams continues to be very active. We have commenced the integration of Southview Property Management we bought midyear. We also, in the quarter, completed the acquisition of the Strata Management portfolio from a privately held property management firm. And after quarter-end, we just announced another asset acquisition deal. We've been very busy. Also during the quarter, we appointed our first COO, Mr. Drew Keddy, who recently served as President of Sutton Group Realty Services. Drew's initial focuses will be on margin improvements, cost efficiencies and market development. Also during the quarter, we entered into another partnership, this one with Hytec Water Management Limited to better equip communities against pinhole leaks and water corrosion about building systems overall. Updated [capital]. As of today, we have 21,210,516 common shares outstanding. Please refer to our updated corporate presentation and our website for further details. Joseph, I'll now pass the call over to you.

Thank you, Jim. Good afternoon, everyone, and good evening for some of you that are out East. We've had a great quarter, incredibly busy. Our team has been working really hard despite some of the challenges that were addressed earlier, and I'm happy to walk you through our activities for the past quarter. To orient everybody, and those of you that are not as familiar with our company, we are a one-stop shop, alternative traditional property management company. Really, our goal is to be the go-to company for all activities associated with managing condos and/or institutional rental communities. We obviously are a tech-back services company, we start with all of our technologies that are built in-house. We provide digital owner engagement platform. These are apps and platforms and portals available for our homeowners whereby they can interface directly with their own assets, with their own homes, along with all the activities associated with the home as well as the building and all activities associated with the building; very, very important, especially in the condo environment that's becoming a lot more complex and highly regulated. We also perform a AI-driven benchmarking that really measures all of our communities and looks at every single spending line item in comparison to comparable buildings in the neighborhood just to see if anything is out of the traditional lines and can be attached to ensure that these communities are well managed from a capital expenditure and a capital spending point of view. And we do digitize all of our communities and make digital services available, shared service available for our homeowners. If you want to look our amenities, if you live in a rental building with [indiscernible] or not you can actually interface directly with the ecosystem that's in the community through our platforms. And obviously, at the end of the day, we still are the licensed property management company on record for all your needs, both condo and rental. Just again, by way of orienting everybody, in January 2018, the slide would have been a bunch of zeros. Since then, we have almost CAD 20 billion of assets under management. We have 110,000-plus homes utilizing our technology and for communities that are fully managing our -- that are fully utilizing our management services and our technology, we have almost 100,000 residents living in them right across the country. We manage approximately CAD 212 million of annual budgets on behalf of these condo communities. And another interesting number for everybody to be aware of is we have almost 0.5 billion data points about the home, the communities, the spend, the square footage, I can go on about all the homes that we manage incredibly important for us to help these communities make good decisions for themselves as well as allowing us opportunities to leverage the data to further monetize the population. We make money through 3 different revenue pillars. The first is our software and service revenue. That is the largest bucket of revenue that we have. I think it is a very, very sticky business. It's monthly recurring revenue charge to other developers building brand-new communities, condo corporations, in the case of condos or the REITs and landlords in the case of institutional rental that is usually -- we don't really tend to have any receivable issues. We kind of bill it first of the month and we pay ourselves first of the month. Our transaction revenue is a large bucket with tens of items in it. That essentially as I also referenced it as in-app transactions, think of homeowners and/or condo corporations interfacing either with the communities to building and/or with us, the property management company, if you're selling or you're purchasing a home, you'll need some data. You'll need some information forms, documentation from the platform. That's just a basic example. This will also include processing and transaction revenue associated with people paying the rent online and/or the maintenance fees and a long list of other items. And then our youngest and very important third bucket of revenue is digital services and partnership revenue. Jim just alluded to the fact in a couple of weeks or 2, 3 weeks ago, we announced the launch of our Tribe Marketplace. Tribe Marketplace essentially is a 2-way marketplace that ticks over from our beta platform that we were running for about 3 quarters. And that platform really allows us to be able to put in front of our homeowners and condo corporations and tenants, products and services that make sense to them. So we needed to build a robust platform that allows us to curate these services, but also to be smart enough to put the right products in front of you. So if you do have pets, we will put products and services with a pet relationship or pet service provider relationship that would make sense for you. But if you don't have any, that may not show up on your platform. So we've been busy in the last 2.5 quarters building that platform, and we're very, very pleased with the fact that we've launched it. In the case of those partnerships, we generate revenue from them. If you bought insurance on the platform, we generate revenue, plus we disclosed that revenue to the homeowners and the condo corporation and/or the tenant and we make different ways of revenue through there, sometimes their affiliation partnerships, sometimes the transaction revenue and so on and so forth. We've been busy, as alluded to earlier. We're very pleased with breaking the CAD 4.5 million line of revenue for the first time. We're also pleased with the significant amount of recurring nature of that business. We have added Drew Keddy as the CEO. He's been with us for a few weeks now. He has done a great job. Very pleased with his experience. Drew, not only was the President of Sutton Canada for a number of years, but prior to that, he was C-suite leader at Colliers International, led a lot of their M&A and operations and a lot of significant experience that was accumulated there is very relevant to our business. We've also been very, very busy with partnerships. We've added 10 partnerships to our platform, including Hytec Water Management and there's a number of additional -- really interesting products. Perhaps one of the most exciting ones is the one we announced just last week about EnerSavings partnership that will really bring some really interesting IoT products that are relevant to all of our condo corporations and rental buildings, whereby we can lower the carbon footprint, bring in some really unique EV solutions to the marketplace as well as even LED conversion solutions. All the products and services we're bringing in, obviously, required capital expenditure on behalf of this building, but one of the most unique thing about this partnership we're bringing is that we actually will be delivering these services, offering new services to these communities at no upfront cost and the savings that are driven -- or that they're derived from the installation of the equipment and the IoT products that we will put in there will actually offset the cost of this equipment. And obviously, we monetize that through the process. Also extended our M&A funnel. We have a very active M&A team that's working on both identifying opportunities, performing due diligence and obviously integrating deals at close, and we have announced a couple. Subsequent to the quarter -- Q3, we also announced closing of a transaction with the Warrington PCI Management. So we continue to be very active in both acquiring full company with the share purchase agreement as well as asset purchases. We've got 2 different streams running for those. Obviously, asset purchases require much quicker integration into our operations, and I'm very proud of the team and the work that they're doing. On the accolade side, I suppose we're very humbled and proud to have been recognized as a Fast 50 Technology Company by Deloitte as well as Fast 500 for North America. And then finally, as I mentioned earlier, we've been working on our digital marketplace that was [indiscernible] product that are working on lighting up essentially that marketplace very exclusive to us and our communities. And it is now up and running deployed in all of our communities. All we got to do now is really populate it with as many relevant offers that really can save a lot of money for our homeowners and also generate revenue for us. So really, obviously, the financials are posted, but you'll see a significant growth in our revenue for the quarter, hitting the 4.5%. Significant amount of that is very sticky recurring business, I will be going to microeconomics in a second. The chart on the right is important. If you've seen me presented before, I think it's a really critical one. It speaks to our ability to generate more revenue per customer. And you'll see those dips. This is the average revenue per customer. That's what those black lines are and the yellow lines represent the number of building potentially we call them buildings or customers of ours. And you see every time we move the number of customers up, you'll see slightly dip of that revenue. That's just the way operation works. We go out, we buy companies, or we buy contract that tend to be generating less revenue per customer than we do in our population, well-served population. And the business is to essentially buy these contracts, bringing these customers on board, impress them with our service delivery and unlock revenue streams that allow us to generate more revenue per customer as you have seen we have a great track record of doing. Our M&A, nothing really has changed other than the way we're approaching our priorities on M&A as we are now fully national. Perhaps the priority itself is slightly different in the context of we are looking for more cash-generating businesses. We still like all assets that really add value to the business, but needless to say with the outlook and what we're all experiencing and seeing for '23, my goal is to really turn us into a lot more leaner company that is able to move quicker on these transactions. Obviously, a great way of doing that would be prioritizing some of the cash-generating businesses or ones that deliver value to the bottom line a lot quicker. But nothing has changed in terms of buying right and the way we structure those deals. And our team, for those that are not as familiar with us as an organization, we've made more than, I think, 10-plus transactions and those transactions of traditional profit management company seem to be running at a lower gross margin. We bring them in. We install our technology within them. We put in IT infrastructure as well, digitize all the assets and all the buildings that they're managing, improve the profit margins and obviously, rebrand this company and all the activities around this company to a Tribe brand. And our business model is still the same. We want to be in as many homes serving as many customers as humanly possible. And if we do that right, our bread and butter business will thrive. And because we digitize all the assets and we get to really build into that relationship directly digital, relationship directly with our homeowners, and residents, we have the ability to put in front of them trusted products and services that they can transact with and we continue to see growth in all those lines of business. Our organic growth, this is building that are out and about that we all drive by that are being managed by competing companies or traditional property management company. We've had another great quarter in lead generation. You'll see here our price per lead is still very, very cost effective. We still win. We even improved our winning percentage quarter-over-quarter, and you'll see as well sort of year-over-year and you will see as well that our average lifetime community value is really high, and that's mainly driven by the fact that we have a very high retention rate. Our churn numbers are quite low. Macroeconomics. I'm going to spend a little bit of time on this just to kind of orient everybody. So again, a lot of the companies that we purchased are running at about 30% gross margin tend to be doing about CAD 20 per home revenue, per home per month. This is all MRR, monthly recurring revenue. They tend to deal about CAD 2 operational transactions. These are not only the companies that we buy, but we also know this is the average [indiscernible] the churn tend to be between 10% to 15%, 10% out west, 15% out east, probably more of a function of regulation. There's less regulation in the east, although that is changing as we speak in the last couple of quarters, a lot more regulation has shown up on the Ontario market, and it has been reflected in a lot of even M&A activities that we're looking at in terms of the targets, they are now starting to live with the world that we've been living with for years out at west. And these are things around regulation, around licensing, your property managers around disclosure, auditing your trust accounts and a long list of other items. I welcome that. I welcome it as a consumer. I welcome it as a homeowner, I welcome it as a father of 3 that would be buying condos maybe one day and living in them because I think it provides the homeowners with a peace of mind and a lot more accountability on the property management company. As a businessman that happens to lead a property management company coming out from the west, I really welcome it simply because we've been living with these high regulations. A lot of our technology really solve a lot of these problems. So we're seeing a lot more appetite and I would argue a frustration by a lot of the operators in the Ontario market simply because they can't catch-up with the regulation, and now they're a lot more interested in having conversation about how our technology solves the problem and how we can potentially be active in acquiring them. On the right-hand side is usually what I would call the state of the nation of our microeconomics. You'll see we're still at the CAD 31 per home with about CAD 5 operational transaction. Again, very, very strong performance per unit. Our digital partnership revenues is on top of that, it's still very young in terms of the revenue line item, but we're seeing growth, and you'll see more activity and announcements around that in the next quarter. 39% gross margin. I think this is an important point, and I want to speak to it. We are a company that treats its cost of goods in the most traditional way. In our cost of goods, we're growing all of our national compliance and local compliance, we are growing all of our licensed property managers, property accountants, all of our hosting services, all of our digitization services. And the reason we do that isn't is simply because we use these metrics internally as well. So there's no point of being on the street telling everybody we're running at 70% or 80% or 90% gross margin business and throwing everything in the G&A. We want to be able to really use metrics internally and externally, that means something to us. So one of the challenges we've read into in the last -- and I spoke to that last quarter and I am pleased to see signals of Q4 from what we've seen, it's turning around. But we've seen in Q2 and Q3 a real slowdown in the ability of real estate developers to complete and hand over brand new construction condos and that's a long list of reasons. Supply chain is probably the number one reason, but it's also an element of finding trade has been a bit of a problem as well as believe it or not, the inability for cities and counties to actually give the thumbs-up and what we call the occupancy permit to these buildings due to lack of resources. So a lot of these buildings are complete, ready to go. They could be missing something technical. They could be missing some simple product. It could be in some cases, we've seen CAD 5,000 part. And it could be also missing the city given it the thumbs up. What happens in that situation is Tribe will hire. So these buildings are contracted to us. We will hire the resources required for this building to be managed. We will digitize that building. We've already licensed our software developer and digitized it, but we can't recognize any of that revenue until the MRR kicks in when people move in. So in many cases, these things have been pushed back by 60 days, 90 days. We're actually, in some cases, looking at 2 quarters now behind. Good news is November was a very active month with some of these communities from behind are catching up. I'm going to anticipate December is going to be a very quiet month as I speak to you here from Vancouver. We're starting to get a lot of snow. And that alone, I think, is going to slow things down. But I do expect December to be very quiet, but all indications that we're seeing show that January and February are going to be very, very active about settlement being delivered. So the effect of that is we don't get to see the MRR revenue that's contracted to us, but we do throw-in all these additional resources that we hired to ensure that we can manage those buildings. So that really affect our gross margin. And that's why you're seeing them pull down. The other aspect of our gross margin pull down tends to be when we buy companies that are running at lower gross margin. And the more homes you're buying at lower gross margin, obviously, that impacts your total population average. Our digital marketplace for owners, I won't speak too much more about it other than I can tell you that think of it as if you're familiar with a lot of the apps for your home solutions where you log in and you look on the categories and it sort of knows where you are and it tells you products and services that really can help you leverage the group buying power that's within your neighborhood. Often, it's difficult for them to do that because they're so spread out, these applications. We've really built that and another big component of that particular technical build was our ability as an organization to bring in these offers and deals without having to go back to a technical resource to be able to onboard that offer. So think of it from this context. Fewer, we're starting to contract a lot of master client community. So this could be completely -- it's a complete -- think of it as village essentially, it could be as much as 5,000 or 6,000 or 7,000 homes the developers build, some are rental, mostly condo, some are high-end, some are not. And we're in the platform as well as the full property manager solution, the one-stop shopper, this whole community, there will be retail players in that community. And those retail players could be local shops will have you. Using our technology now, they can actually directly promote themselves to the residents of that neighborhood and beyond, they can put offers on. They can say from 3 to 5, if you live in one of our buildings around this, you can come in and get a 2 for 1 or what have you, that requires a lot of technology built and I'm very, very proud of the work that has been done, not completely, like all software products, it's never complete, but I'm very pleased to a point where we've actually pushed it out across all of our population. And this is going to be really the crux of that revenue growth pillar that's going to really help the gross margin moving forward. There's some examples. Every quarter, I tend to give you a little bit of an update on how we're doing with some of our products. We've got a lot more products now starting to pop-up. But I still think the most obvious example for why what we're doing here makes a lot of sense for a resident is continue to look at our growth with our condo insurance sales. And now our conversion rates are almost 40%. 40% of people on our platform that will ask, in this case, our digital partner, APOLLO, to give them a quote, will firm-up that quote, which is an incredible close rate. And obviously, we continue to grow our revenue. We do recognize something about our revenue for this product. It tends to be a slam dunk for brand-new construction because you're moving into this brand-new building and you need to get insurance. We haven't delivered a whole lot of new construction in the last couple of quarters due to the reasons I just mentioned in the last 5 minutes. So this number will even be -- will move even further ahead, especially with other products like Triple Play with our partnership with Talos and others. So you'll see more and more relevant products and services, especially with the new construction that we're hoping to be -- we're hoping the developers are able to hand over to the homeowners in the next couple of quarters here. And you'll see on the left-hand side, a lot of activities around partnership. Not really major changes to our cap table. We still have the same number of -- we had no activities at all in the public markets in the last quarter. The ownership structure in terms of the largest shareholders are still there and the same. And obviously, some great analysts have opened and started coverage on us in both through Stifel and Laurentian Bank. So what are we really focused on moving forward with catalyst, our M&A funnel. We are active and we'll continue to be active. And I'm very, very, very pleased with the deal structures that we've done so far, how we're buying and the deal structures moving forward, really like our funnel like the assets that are in the funnel and keep an eye on those announcements. Our digital marketplace as it gets off the ground is really a massive opportunity for this company. It is direct gross margin beneficiary. I mean, I mentioned earlier, not a big fan of saying oh, 90%, 95% gross margin businesses. I can tell you those product lines are exactly that. The cost of goods are practically zero. And those are wonderful line items even if you generate CAD 1, CAD 2 per home per month. It really adds up to big numbers, especially with the number of homes that we continue to add. And essentially usually gives a bit of an industry outlook and just to give everybody a bit of a view on it. A lot of the people on the call are smart enough to understand we're entering into it. Some will argue is some sort of a recession. I certainly do not like to stack political elements of that. I will say that it's pretty evident that inflation is coming down slower than it needs to. Our business is not affected. Our business still continues to be robust. We're again recession-proof pandemic-proof. The seasonality of the business is not really reflected. Even though a number of transactions, the number of real estate transactions that are occurring are slowing down significantly, it really does not affect us. Is it better when the transactions are quicker? Yes. But if anything, what's happening in the market right now, which is kind of slowing down the number of transactions slowing down and condos being on the market a little bit longer before they sell is really forcing the hand of condo corporation and homeowners to really recognize and realize maybe I need to be a little bit more involved and a little bit more at peace with the health of my building. When condos just keep going up CAD 50,000 to CAD 100,000 year-over-year, while I'm sure it's great for the asset owner. Really is not a reflection of how healthy the building is. When the market slows down, as I think we're entering into the cycle and we've experienced in the last couple of quarters, all of a sudden really how well you're building is managed goes a long way, which also opens up a massive opportunity for some of the partnerships we're bringing in because I genuinely believe and keep an eye on some announcement. We can make a massive difference in the capital expenditure and the expenses of these buildings. And you'll see more and more tease a little bit of the announcements earlier, but you'll see activities around -- in the new year, whereby we will be able to sit with condo corporation based on the data that we have over the consumption. I ensure them directly how not only can they lower their monthly expenses but also the carbon footprint. And I think there's a massive opportunity to even allow some of these communities to trade this government footprint in the right reputable market and actually get more value for their buildings. So to really lower their carbon offset as well as lower their monthly expenses. And I think I'll be frank, a lot of companies have been talking about being able to move the needle for the last 10 years and very, very little has been done on that. I anticipate Tribe will be a company that will be able to point to dollars and cents and illustrate that we can actually make that difference in real genuine, not just high-end lead certified communities in any community operating anywhere in Canada and beyond. I will pause here and see if there's any questions, and I'm happy to take them.

[Operator Instructions] Our first question is from Suthan Sukumar with Stifel.

Want to touch on your M&A strategy first. Obviously, you talked about your M&A strategy remaining intact and you talked a little bit about an expanding funnel. Could you share a bit more color in terms of what you're seeing in the acquisition environment today with respect to valuations and seller expectations? Are larger deals becoming more attractive now or are smaller deals looking to move faster? Just curious what you're seeing there.

Yes, the M&A activities are interesting. I will say that the last people that hear about challenges in the market tend to be the seller. So it takes a little bit of time for sellers to recognize the conditions of the market they're in. And sometimes, actually, it's helpful for a company like us. So if we're looking at assets operating and as I alluded to earlier, in Ontario, for example, they're starting to recognize that a lot of further -- it's very expensive to run under the regulated environment regulation and the new environment that's been presented there. So this, as we speak, are being processed by a lot of those sellers, and we're seeing activities in that market. And we welcome that because it really puts us at the right table. We're not really necessarily seeing any major adjustments in valuations. The big adjustments we've looked at internally is how we structure these deals. And obviously, it's no surprise to anybody that the micro cap, we feel our stock has been seriously undervalued and especially with the performance of the business. So I frankly do not want to be giving away a lot of our stock at these prices. So how we structure these deals, the release of the stock, the pricing of the stock is adding further conversations. And I welcome the conversation because it really illustrates to me and shows me some of the sellers that may get the hands of some of our shares to see and understand the big picture or not. So I would say from a valuation point of view, we're not seeing any big changes. We've been buying really, really well. We continue to buy with good value. We keep adding great assets, and we have a well-oiled machine that allow us to continue to improve the gross margin of these assets coming on-board. And activities, I mean the market is -- one of the interesting thing about the industry is obviously incredibly fragmented. But we're also -- every day that goes by, somebody is getting older without a succession plan. And I'd like to think we're good people and you pick up the phone and talk to anybody, any of the sellers, whether they're still involved with us operationally or not. And I'd like to think there's nothing but great things to say about the way we've dignified the transaction and dealt with them. But they tend to be a little bit of a slower transaction. In terms of size, we like the bigger transactions. We think the sophistication of the seller goes a long way. We think aggregation of geography goes a long way because it allows us to get in and digitize a lot quicker. So you'll see us be a little bit more active into that mid-sized range for our industry.

I want to touch on organic growth next. Now aside from the opportunity that you have with M&A, how are you thinking about the sources for organic growth in the near term. Just wondering if it will be more driven by maybe a catch-up on the new builds going online? Is it more competitive displacements or is it more driven by the marketplace opportunity. Just wondering how you're looking at that mix of organic growth really over the next 12 months?

Yes. I mean, I've kind of categorized [indiscernible] have one work them for the years. And 2021 was the year we arrived nationally, but the word was national. 2022 was the year to fully integrate and let Tribe kind of be the brand known across the country and 2023 is the year of [indiscernible]. And I've already spoken to all of our leaders about this, and we're -- despite the fact that we're going to be cheering for our national team in the World Cup, we're pretty busy thinking about how we're going to be ready in 2023 with this. And to answer your question very specifically, we think the market is very underserved. The products and services that we have are desperately needed by a lot of people, the problems, a lot of people don't know that they exist. So really, you'll see an investment in our lead generation activities around again, more and more of our solutions available right across Ontario, even east from there right through the country. I still think a lot of people don't know about us, and that's something that we're working really hard to do. [indiscernible] activities around existing what we call transition buildings coming our way. We also continue to receive growing marks in our institutional rental and in terms of the performance of our team. And I think you're also going to see a little bit more of us being very active in asking a lot of our REITs to start trying to markets where they haven't tried us before. So you'll see a lot of activities around that in '23. And then our partnership team, we beefed it up, and it is very, very active. We've got 30-plus partnerships on the docket. A lot of them are within the context of being sold directly to the landlord and to the developer landlord and/or condo corporation. And again, we're just cutting our teeth on that. We still haven't even got a cadence of taking 1 or 2 products a month to our condo corporations. We're just starting to do that, and we're starting to see results. So this is very young, but we won't be taking our foot off the gas. 2023 is that year.

And just last question from me is, when you think about your operating leverage here, I know it's still early days in your growth and you guys have made strategic investments over the past little while. You've added some new executive talent to your management roster. What are some of the other more strategic investment areas that you'll be focusing on in the near to mid-term here? And in terms of balancing that, you touched on a view on sort of profitability here. What leverage do you have for margin improvement and for reducing cash burn?

Yes. I mean in the most obvious way, I would tell you, I wish a lot of that revenue that was slated to come in, in the last 2 quarters came through the door in the construction, that would have really affected the burn. That being said, we did make significant investments in the engineering team as well as other -- frankly, other departments as well, especially on the integration, transition and M&A side. So those activities are there. They tend to be fixed once you start buying things that are generating a lot more cash or at least we start realizing the cash generation, we just haven't had the time yet because a lot of the transactions we've just done have just been literally integrated. Even one of the slides I shared with you today, we even had the whole quarter results on it, so we could have normalized it. We had to show the September numbers because we didn't even have those assets in there. So you'll see us take some significant steps towards -- they've really taken our burn down to a much, much more -- what is an alignment of what the conditions of the market are as well as the traditional operating of our business. I do think the marketplace can play a massive role, especially if you secure some of these deals. And I do want people to understand something. And I think it may be obvious to everybody, but I just really want to make sure that I emphasize that. A lot of the asset -- brand new construction that was supposed to be delivered the last couple of quarters have been pushed out must be delivered. These are not buildings where, oh, it's too bad. They're not going to come on board, they're going somewhere else. They have to be completed. They have to be managed. So really, this MRR isn't going away. This MRR, we're just waiting for it to be launched. So I think in Q1, I'll be speaking to the Street about a more specific strategy around our path to profitability. Those of you that have been with us from day one, and I thank you, especially the institutional investments and all investors that have been with us from day one. You know that we don't like to just talk the talk. We'd like to point to specific facts. And I think that we'll be able to communicate that in the next couple of months.

[Operator Instructions] As there appear to be no further questions, I'd like to turn the conference back over to Joseph Nakhla for any closing remarks.

Well, thank you all for taking interest and attending the call today. It's been overall an incredibly great year for our company. We live in an interesting time, and we're heading into holiday season here. So on a personal level, I want to thank all of you both on the shareholder side, on the coverage side as well as our executive team and our staff for really just having faith in our vision. At the end of the day, of course, we are here to continue to create great shareholder value for our investors, but we feel good about the fact that you didn't only just invest in a company that's pretty darn good, but I think we feel good about the fact that we're really helping hundreds of thousands of Canadians have a better life every day, and I'm really, really, really proud of that as well. So with that being said, have a wonderful holidays, and I thank you all for being on the call with us today.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant evening.