Wishpond Technologies Ltd. (WISH) Earnings Call Transcript & Summary

Thank you, everyone, for joining us today, and welcome to Wishpond's 2021 Fiscal Fourth Quarter and Full Year 2021 Financial Results Conference Call. Joining me on the call today are Ali Tajskandar, Chairman, Founder and CEO of Wishpond; and David Pais, the company's CFO. This call is being recorded. [Operator Instructions] I trust that everyone who has received a copy of our financial results press release that was issued earlier today. Listeners are also encouraged to a download a copy of our quarterly financial statements and management discussion and analysis from sedar.com. Please note, a portion of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor bridges of these laws. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside of Wishpond's control that may cause actual results, performance or achievements to differ materially from the anticipated results, performance or achievements implied by such forward-looking statements. These factors are further outlined in today's press rate and in our management discussion analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans going into future. We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in expectations or any change in conditions, assumptions or circumstances on which any such statement is based, except as is required by law. We use gross profit, gross margin and adjusted EBITDA on this conference, which are non-IFRS and non-GAAP measures. For more information on how we define gross profit, gross margin and adjusted EBITDA, please refer the definition set out in our management discussion and analysis. And with that, let me turn the call over to Mr. Ali Tajskandar, Chairman and CEO of Wishpond.

Pardeep, good day, everyone. I'm very excited to be here, and thanks for making the time. We hope that you're all keeping safe and healthy. We truly appreciate you for joining today. Before we begin, I'd like to recognize that this is our first conference call with David Pais as the company's CFO. David joined Wishpond in January of this year and brings with him previous M&A and public company experience. We welcome David to Wishpond team and to this call today. On today's call, I will first provide some general commentary and an update on the quarter, followed by our CFO, David Pais, who will provide the financial summary of the results. I will then come back and provide some commentary on our outlook. Turning to our financial results. 2021 was a monumental year for Wishpond, as we accomplished record financial results in our first year as a public company on the TSX Venture Exchange. We set an aggressive pace in the first quarter of 2021 that we maintained throughout the year with organic and inorganic growth, culminating in record revenue for the year and a record fourth quarter. We achieved 87% revenue growth in 2021. Approximately half of which came from organic growth and half of it from acquisitions. Fourth quarter 2021 was another outstanding quarter for Wishpond, as we once again achieved record quarterly revenue with 107% year-over-year growth. Wishpond's revenue growth was driven by the success of our experienced sales team, new product introductions and our acquisitions. We are very pleased to report record adjusted EBITDA in the fourth quarter of CAD 491,000. We believe that the investments made earlier in 2021 in our product development and sales teams paid off for the company in our Q4 revenue and adjusted EBITDA growth. Last year, we completed 4 acquisitions, namely Invigo Media, PersistIQ, Brax and the last one Winback was completed on December 31, 2021. We announced our fifth acquisition and first acquisition of 2022, Viral Loops, on April 1st. We are very pleased with the progress we've made with all of our acquisitions. Our acquisition strategy has been to do tuck-in acquisitions or marketing technology companies that offer complementary product solutions to small, medium sized businesses. All our acquisitions have been cash flow generating companies that can benefit from our sales and marketing expertise and their products and solutions offer great cross-selling opportunities to our core Wishpond customers. We are spending a lot of thought and effort on integrating these products with our platform and developing pricing plans that bring the most value for our customers. We believe that both our existing customers as well as the acquired customers will benefit from the range of online marketing options that they can avail of under one roof. Our acquisition strategy has worked to date and have complemented the company's organic growth very nicely. I will go into our outlook later in this call today. But first, I would like to turn the call over to our CFO, David, who will review the financials for the quarter and the full year. David?

Thank you, Ali. I'm pleased to report that we had a -- we had a very strong annual and full quarter results for the year and 3 months ended December 31, 2021. Here are some financial highlights for fiscal 2021. Wishpond achieved record annual revenue of CAD 14.8 million during fiscal 2021 compared to CAD 7.9 million in fiscal 2020, an increase of 87%. Revenue growth was primarily driven by an increase in sales and marketing activities, new product introductions and acquisitions completed in 2021. Wishpond achieved gross profit of CAD 10 million in fiscal 2021 compared to CAD 5.3 million last year, representing a 91% increase from fiscal 2020, driven by an increase in overall revenue and with execution. The gross margin percentage was 68% during fiscal 2021 compared to 66% in fiscal 2020. Wishpond achieved adjusted EBITDA of CAD 56,000 in fiscal 2021 compared to CAD 495,000 in 2020. The decline in annual adjusted EBITDA was primarily due to public company costs, which we didn't have in 2020, and increased investments in our sales and marketing and R&D teams in order to accelerate growth. The United States remains the largest and fastest-growing market, generating 78% of total revenue in the year, and we achieved an 87% year-over-year revenue growth in the U.S. market. Our fourth quarter financial results are as follows: Wishpond achieved record quarterly revenue of CAD 4.7 million during Q4 2021 compared to revenue of CAD 2.3 million generated during Q4 2020, an increase of 107%. Revenue growth in Q4 2021 was positively impacted by seasonality in Wishpond's acquired businesses. In addition, an increase in the size of the company's sales and business allotment team during the year resulted in higher sales in the fourth quarter. Wishpond achieved gross profit of CAD 3.2 million compared to CAD 1.5 million during Q4 2020, representing an increase of 119%, driven by an increase in overall revenue. Wishpond's gross margin percentage in Q4 2021 was 68% compared to 65% in Q4 2020. With 68% gross margin in Q4 2021, was on the higher end of historical ranges between 65% and 70%. During Q4 2020, Wishpond had an operating loss of CAD 399,000 compared to an operating loss of CAD 4,000 in Q4 2020. During Q4 2021, Wishpond achieved positive cash flow from operations of CAD 599,000 compared to CAD 2.1 million in Q4 2020. During Q4 2021, Wishpond achieved record adjusted EBITDA of CAD 491,000 compared to an adjusted EBITDA of CAD 121,000 in Q4 2020. Adjusted EBITDA margin was 11% for Q4 2021 compared to 5% in Q4 2020. The increase in adjusted EBITDA is attributable to positive EBITDA contribution from Wishpond's acquired subsidiaries and the higher gross profit in the quarter. Just to comment on headcount. At the end of 2021, we had 327 -- sorry, 237 full-time employees and consultants compared to 124 full-time employees and consultants on December 31, 2020. The increase in headcount is attributable to the addition of Invigo, PersistIQ and Brax employees, as well as an increase in the size of our sales, customer support and R&D teams. We continue to have a clean and healthy balance sheet. As of December 31, 2021, Wishpond had $6.2 million in cash and cash equivalents, and the company has no debt as of December 31, 2021. On September 29, 2021, the company entered into a new credit facility with the National Bank of Canada for a CAD 6 million secured revolving operating line. The credit facility remains undrawn as of this date. In summary, Wishpond has a very strong financial position with a healthy balance sheet, strong monthly recurring revenue and a very good visibility on revenue cash flow for the current year. Wishpond is able to continue to grow comfortably with its cash flow from operations. I will now provide an update on our normal course issuer bid. On June 7, 2021, the TSX Venture Exchange accepted the notice of the company's retention to commence a normal course issuer bid, or NCIB, for its common shares. Since the approval of the NCIB on June 7 through December 31, 2021, the company purchased a total of 248,800 common shares for cancellation at an average price of CAD 1.28 per share. The Board of Directors of the company believes that the recent market prices of the company's common shares do not properly reflect the underlying value of such shares and that the purchase of the shares would be a desirable use of corporate funds in the best interest of the company and its shareholders. As such, the company plans to renew the NCIB on its anniversary date. As of the end of the fourth quarter on December 31, 2021, the company had 55,954,115 million fully diluted securities issued and outstanding. This concludes my financial update, and I will turn the call back to Ali.

Thank you very much, David. I would now like to talk a little bit about our acquisitions. We are very pleased with the progress made with all of our acquisitions. Previously, on these calls I've talked about our Invigo and PersistIQ acquisitions. So today, I would like to focus on our recent acquisitions of Brax, Winback and Viral Loops. We completed the acquisition of Brax in September of 2021. Brax is a software-as-a-Service or SaaS-based business that offers an advertising management platform for the rule-based optimization of digital ads across multiple sources. I'm extremely pleased to see the progress we've made with Brax. We've integrated Brax across all of Wishpond's departments and channels, increased the size of Brax sales team and Brax has adopted Wishpond's outbound sales strategies, all of which are positioning Brax for aggressive expansion in 2022. We are excited to see early traction from Brax's outbound sales system is already starting to pay off. We completed the acquisition of Winback on December 31, 2021. Winback provides an automated short message service or SMS marketing platform for small and medium-sized businesses, including a shopping cart abandonment app for Shopify merchants. Thus far, Winback is performing better than expected. Winback now integrated across all Wishpond's departments and sales channels, and the number of Winback customer installations is increasing. Since the beginning of this year, Winback has increased its number of clients by over 50%, including more than 180 Wishpond clients who are now trialing to filing the platform under promotional pricing plans. Winback offers many great opportunities for e-commerce stores to grow their revenue. Winback's abandoned Cart SMS marketing is a powerful marketing tool. Hence, we've had tremendous success in introducing Winback to our existing Wishpond clients. Our most recent acquisition is Viral Loops, which we completed on April 1, 2022. Viral Loops enables businesses to launch, monitor and manage referral campaigns to create viral demand for their products. Viral Loops has a strong sales growth of more than 700 customers, is EBITDA positive and is expected to be immediately accreted to Wishpond. Besides growing Viral Loops as a stand-alone business, we believe there are tremendous cross-sell opportunities for offering referral marketing solutions to Wishpond's existing customer base of small to medium-sized businesses. The integration of Viral Loops is proceeding well. We are thrilled to welcome the Viral Loops team to the growing Wishpond family. The acquisitions of Brax, Winback and Viral Loops have broadened our portfolio of products and services for small to medium-sized businesses and offer tremendous cross-selling opportunities into our existing customer base. We are now beginning to witness the synergistic benefits of these acquisitions. These acquisitions are key components to our continued growth. I would like to discuss the goals and outlook for this year now. Wishpond is on track to achieve its goal for fiscal 2022, which are as follows: Number 1, increase the company's customer base and monthly recurring revenue or MRR. We expect MRR to continue to grow in 2022 through both organic and inorganic means. Number 2, accelerate the company's organic growth profile with investments in sales and marketing. Last year, we doubled the size of our sales team from 12 account executives to 24 by the end of 2021. Our goal this year is to nearly double the size of the sales team again. And we have already started ramping up the size of our sales team, which currently sits at around 35 account executives. Number 3, achieve positive annual adjusted EBITDA in 2022 at levels exceeding 2021 results. The increase in the size of the sales team will initially have a negative impact on our profitability in the first half of 2022, but will result in higher revenue and EBITDA in the second half of the year. Despite the increase in expenses due to inflationary impacts, we still expect to increase our annual adjusted EBITDA this year compared to last year. Number 4, follow a disciplined acquisition and capital allocation plan. We are very pleased with the 5 acquisitions we have completed thus far, as they are all proving to be accretive to Wishpond's financial profile. We have a strong balance sheet to execute on additional acquisitions and we have a robust pipeline of target acquisition opportunities. However, we are also very aware of the current global and macroeconomic conditions with increasing inflation and higher interest rates. Hence, we expect the pace of acquisition this year to be slower than last year. We are being very diligent in our pursuit of future target acquisitions and making acquisitions and our cash flow generating is also extremely important in this current environment. Number 5, invest in research and development to expand the company's product offerings and intellectual property. Our R&D and product teams have been doing a tremendous job of launching new products and services and expanding the company's intellectual property. We anticipate launching several exciting new product enhancements and features in the coming quarters. In terms of our outlook, our outlook remains positive for the entire year. We are expecting to show a strong revenue growth in 2022, driven by increased capacity in the company's sales team, positive contribution from its acquisitions and new product-related revenues. For Q1 2022, we are expecting strong year-over-year growth, but a slight decline in revenue from Q4 2021 to Q1 2022, primarily due to seasonality. We are already experiencing our revenue bouncing back in Q2 2022, and we expect it to accelerate in Q3 and Q4 2022. The second half of the year is also when we expect to generate our greatest EBITDA. The fourth quarter is Wishpond's strongest seasonal quarter, while the first quarter is the weakest quarter seasonally. Revenue in the fourth quarter benefited from seasonality as our small and medium-sized business customers invested in various online marketing campaigns, contests and promotions, to maximize the revenue from the increase in a larger number of new customers in the fourth quarter, increasing the customer spending during the holiday season, consequently the company signed up a larger number of new customers in the fourth quarter of 2021. Seasonality in Wishpond's business has become more pronounced over the past year due to the acquired businesses having greater seasonality effects than Wishpond's incumbent business. The acquired businesses offer products and services that can be tailored to special marketing campaigns that boost demand around various holidays and special occasions, such as Thanksgiving and Christmas, which results in higher seasonal revenue in Q4 and a decline in seasonal revenue in Q1. In addition, in Q1 of this year, we also experienced 1 key PersistIQ customer and 1 larger Brax customer did not with new year contracts. As with any acquisition, there usually is some expected customer turnover. Unfortunately, both these customers happen to occur in the same quarter, resulting in a slightly negative impact in Q1. We fully expect our increased sales activity will offset this minor decline in coming quarters. Despite some seasonality in Q1 2022, Wishpond expects healthy year-over-year revenue growth in 2022. The company expects revenue and earnings growth to accelerate in the second half of 2022, with the completed integration of the recent acquisitions and expanded sales team and an increase in the cross-selling opportunities between products and solutions offered across its product lines. In closing, I want to thank all the employees at Wishpond whose hard work continues to elevate the company to higher levels. We want to thank our customers who rely on us to help them with their digital marketing needs. Also, I'd like to thank all of you for joining us on this call today. The capital markets have been very supportive of our vision and have provided us with the funding needed to pursue our goals. We look forward to providing an update next quarter. Thank you. I will now hand it back to Pardeep.

Thank you, Ali and David. For questions, just a reminder, the Q&A button at the bottom and you can assimilate your questions that way. We will start off with the analysts first. First question from Gabriel Leung from Beacon Securities. On a full year basis, what percentage of revenues would you characterize as being seasonal or discretionary in nature?

I don't have the exact number to give you, but I would say my closest guess would be around 10% would be seasonally affected or usage-based affected.

The second question of Gabriel is, is there anything unusual in churn rates across the business?

Overall, I would say no, but heading into the holiday season and shortly after, especially January, we did experience higher churn numbers, especially as the small businesses cut back on the spending after the holiday season. And looking at churn and retention as of right now, it is back to the low levels, industry-leading levels that we have seen in the past.

Last question for Gabriel. Outside of increasing sales rep count this year, do you expect any other notable increases in expenses?

Very good question. Currently, we do not -- even though we're going to spend a little bit more on product development as well. But one of the priorities that we have for this year is to really double down and focus on cash flow improvement and not at the expense of growth. We actually plan to continue growth quite aggressively, in certain areas even accelerate growth as well as keep costs under control in certain parts of it, even gain efficiencies, and we've done some of that already. So I think sales expansion is going to be one of the major investment areas in terms of cash flow. In other areas, we're going to keep it more or less under stable conditions.

Next set of questions from Kris Thompson of PI Financial. First question, as Shopify competition continues to accelerate, can you give us an idea of your revenue exposure to the Shopify Appstore and our customer base?

So, majority of our e-commerce clients that we have on Wishpond are actually not signing up to the app marketplace. Through our app on sales, we're reaching out to them and signing them up and then because we have the deep integration with Shopify, they end up using our integration as well. So the app marketplace itself does not play a significant role. The other point that I would like to make is that even though currently a lot of the e-commerce clients that we have are from Shopify, that is not the only e-commerce platform we serve. We serve e-commerce, we serve big commerce, we serve a variety of other e-commerce solutions as well. And we haven't seen a slowdown in terms of our customer growth when it comes to Shopify. Having said that, we also have opportunities elsewhere that we are pursing.

Next question, looks like more of a David question. What's the total headcount after the Viral Loops acquisition? And what do you expect in the headcount sort of the end of the year, assuming no more acquisitions from here to the end of the year?

So as I mentioned, we have about 237 headcounts at the end of the year 2022 -- 2021. We're currently have about 260 people. So that includes some organic growth that Ali mentioned, both for the sales team and so on as well as the growth of the number of headcount that was brought in by Viral Loops.

And then the next question from Kris also looks like a bit of a David question. The earn-out obligations for 2022, what can we expect?

So the earnouts that we had in the fourth quarter of 2021 was in the region of about CAD 800,000. Earnout payments to us are -- you can look at it as a good news, bad news story. The bad news might be hated with some cash that's being paid out, but I should actually highlight that all the earnouts that we have, it's in our option that its paid out in cash or stock. So that's just a comment I put out there. But having said that, the higher the earnout payments that we make, that actually means the higher revenue that we're generating from the acquisition. So to us, we're actually happy to pay the earnouts because they go up. We kind of think the earnouts in 2022 will be similar to what we pay in 2021.

All right. The next set of questions, Daniel Rosenberg, analysts at Paradigm. Can you comment on the gross margin improvement? Any thoughts around the drivers around this improvement and long-term sort of where you see the gross margin percentage?

I think what you've seen with Wishpond has been the gross margin -- gross margins have been in the range of 65% to 70%, sometimes slightly below, sometimes slightly higher. We expect at least in the coming year to be within that range also. The improvements in gross margins, some of them are from increased efficiency, some of them are we're expanding into higher LTV customers. The cost of sales remains more or less constant in those. Just the commission would slightly go up. And because of that, over time, we expect gross margins to creep up. But at least for this current year, I expect it to be within the same historic range that we've seen.

Okay. Follow-up question on Daniel Rosenberg, can you share any trends that you're seeing on retention and spending per customer?

Yes, 2 trends. Well, one that I already spoke about that the churn numbers have been more or less other than the holiday season stable and at the same rate. But the second element that we're actually pursuing now is some of the larger clients more in the B2B space that we are now pursuing where the average spending for them would go from, let's say to $500 that we've seen historically to some of them $ 2,000, $3,000 a month. So the LTV immediately will go up, and a lot of these businesses are more established and stickier product offering that we have for them as well as the success rate is higher. So the stickiness also increases. So those 2 I would say, would be the trends to watch out for and what we're pushing towards. And they're very, very exciting opportunities for us and for our sales team and our account management teams.

Last question from Daniel. With regards to your NCIB or share buyback, any thoughts on priorities for uses of capital, I guess, and if you're asking along the lines of NCIB versus increasing sales or reinvesting in the business or bring acquisitions? Maybe just add some thoughts on that.

Yes, I mean, when you look at the use of NCIB and the buyback we've done over the past 3 quarters, it doesn't really amount to a significant amount. It hasn't been a large part of the daily volume or monthly volume. It has been there mostly for a level of support as well as we sometimes feel like it can be a good use of funds in the benefit of our shareholders. But it has not been an aggressive part. But having said that, I think in the coming year, it is very important for us to look at cash preservation quite seriously and balance our needs in terms of investing in sales, keeping cash around, as well -- versus buying back our shares. Now I cannot say we have definitive plans to do more or less or stop any of that in terms of NCIB, we plan to renew the plan -- the program when it expires I think in June. But those are some of the considerations that we will have, looking at cash flow, cash preservation as well as the use of funds. Yes, one on the next one, Christian Sgro of Eight Capital. How have churn metrics trended in 2022 in the core business versus that are acquired businesses? I mean I think you've already commented quite a bit in terms of impact and the seasonality. I think the question is more along the lines of the core business versus the acquired business. I think maybe you can comment on that part of it. I think interestingly, for most part they're similar. Having said that, some of the acquired businesses have more elements of self-serve month-to-month subscriptions, we now buy our loops, a lot of clients might sign up to launch a campaign for a month or 2 and then leave and then they come back. The growth is very aggressive, but some of the churns could be on some of those sales or plans higher. As we've discussed before, our fully managed packages where we are involved helping our clients achieved the highest success with the accounts, churn would be lower. So we do see that, and there's a little bit of difference on that. As we invest into rolling out similar packages for our acquired business and we expect them to trend to similar ranges. But it's not the same across all the companies. For example, on the other side we see PersistIQ business is growing really solid. And the churn, given the focus on the B2B business is quite low, even lower than the incumbent business that we've had.

Next question from Christian Sgro, your revenue split between software fully managed in the last year has been about 50-50, 50%. Can you -- given the several acquisitions that you've done, how is this mix expected to change over the next year?

The acquisitions we've made have been more self-serve or also served, right? So there would be initially some movement towards the self-serve. But most of the outcome sales strategy is focused on the larger managed packages where it is a hybrid of software platform and the services that we provide. So I think for the balance of 2022, even though initially there is a push a little bit towards the self-serve, I think it will end up balancing the same 50-50 mix that we saw last year.

All right. Last question from Christian. Just getting a little bit of sense of where the Wishpond exposure seasonality with regards to its businesses. Can you provide additional color around different businesses and how they're impacted by seasonality?

Yes, for example, Brax's ad management, right? So during the holidays there's larger spending on ads. The ad revenue is not part of Brax's revenue. Having said that, there are 2 components to the revenue on Brax. One is the subscription revenue. One is revenue share with some of the ad platforms that the ads are running towards through where some percentage beyond certain spending would come back. So depending on what the total spending on ads are, that second usage-based amount could go up and down and fluctuate from 1 month to another. So in Q4, that amount was significantly higher, in Q1 is significantly lower, in Q2 is making a comeback to be similar to what we had seen before. And in fact, the other comment that I would make is that even though we expect seasonality to affect us negatively in Q1 and affect us positively in Q4. Now in Q2, already we're seeing that we made up the dip that we experienced and made new grounds and achieving record MRR numbers. So we are on really solid trajectory going forward into Q2.

Great. Next set of questions is from Neil Bakshi of Canaccord. From the last earnings call, you suggested there's room to scale pricing increases as customers ad features, is that still the case? And just wondering how management is thinking about managing inflation impacts.

Yes, I mean, one of the things that we've seen is that, for example, on an average the starting prices that you're quoting by our sales team have gone up by about 10%. And that doesn't really come at an expense of closing rate at all. Our prices are low enough already that there's plenty of room to play with that. That's one element that we've already done and we continue to do. The other element is what I was talking about, which is, now, imagine, for example, let's say there's a B2B client who wants to use Wishpond and by B2B, let's say, is a property management company or IT consulting or something like that. And now we can say, here's everything we can do for you for marketing, that is going to be Wishpond. Then there's some kind of referral marketing as part of that, that is now adding elements from Viral Loops and we can charge extra for that. But in addition to that, we can also help you with your online sales. And those are elements that we can also provide to you using the Brax team and software. So some of those packages we're recently seeing that are going as high as CAD 5,000 a month. So as pricing increase on one end, but complementing the offering and adding more elements to it than we had in the past, and that is being quite well received by clients.

All right. Next question from Neil Bakshi again. On the M&A side, just wondering how management is assessing the current valuation environment for targets as it seems to have cooled further? How has this changed the pipeline at all in terms of deal size or structure preferences and valuations?

For most part, we'll try to make acquisitions that are quite profitable, mostly recurring revenue and that we wouldn't overpay for them. And for most part, their valuation multiples should be lower than our valuation multiples. In the current market, unfortunately we're not trading at the multiples that we think we should be trading at. The valuations across the board in the tech industry and growth stocks have been low, and that definitely affects the conversations we have in terms of the multiples and the valuations we're willing to pay for acquisitions. So we are being very opportunistic. We're looking at the opportunities that are more cash flow generating and then we won't have to overpay for them. And that's the criteria that we have. Fortunately, the size of the pipeline is quite great. Last year, we talked to 350 to 400 different M&A candidates. This year, so far in the same case, we've had a lot of conversations. So there are a lot of parties in the pipeline that we can still go back to at different times, execute on. But going back to the earlier comment that I made in the earnings, I would say we are being more careful and the pace of acquisitions is going to be slower than last year because cash preservation, producing more free cash flow, and acquiring companies that fit the bill even more than the previous acquisition is going to be a priority for us.

Okay. We have a follow-on question from Kris Thompson of PI Financial. The medical e-commerce partnership in Mexico, if you're able to give some color on that. LaLeo has more than 300,000 customers in Latin America. If you can just comment on how that -- how you see that opportunity.

Yes, it's a very good opportunity for us. So LaLeo is a leader in providing e-commerce products and equipment and medical textbooks to doctors and medical students in Latin America, serving more than 300,000 users. Now one of the things that has been a focus for them was how do they expand their offering from providing those products and equipment and selling them to something that would be more long term as part of the SaaS solution for these doctors and medical clinics. And that partnership was something that we looked at it, and then they were very excited and we are very excited about it. The work has already begun. The 2 technology teams have already met, exchanged a lot of different resources. And the LaLeo team is busy localizing and making certain changes to areas that would be important for them to make it applicable to their base, and that work is continuing. And I expect in the coming quarters for us to be able to roll it out and start seeing revenue benefits from it.

Great. I've got a question here from Mike Stevens of Echelon. He's asking about getting further insight around customer concentration. You have one major customer that's over 10% of total revenues. If you can just provide some more color on that agency, I guess.

Yes, it's really a client that is acting on behalf of several clients. So it's more of an agency kind of client. There is a revenue concentration there as overall size of the business, which one is growing, it is becoming a smaller percentage. At some point, it was close to 20% and now it's closer to 10%. But it is an important client for us. We work very closely with them. We've actually rolled out a few different features benefiting them to make sure we have a good relationship with them, and they're with us for long term and they're spending increases with us. And currently that is on track to continue.

Great. There are no further questions, Ali, so I'll turn it over to you now.

Great. Thank you very much, everyone. I appreciate you being here. Thanks for joining us for this call. Thank you, the analysts for their questions. I appreciate it. Everyone, please stay safe and healthy, and we look forward to providing you with more updates this year. Have a wonderful day. Thank you.