Thank you, Donna. Good morning, everyone.

Welcome to the Q1 call. As you know, we go directly to questions.

So, Donna is going to instruct you now on how to line up for those. Donna?

Mark, in the President's letter, you talk about the increased competition from private equity and Constellation lookalikes. Yet despite that, you've been reasonably successful with your capital deployment so far this year, at least I think relative to what many of us were expecting.

And so can you help us reconcile that? Is that perhaps reflective of the success you've had in expanding the universe of employees that are involved in finding and sourcing M&A opportunities?

Yes, I believe so. I think that's the major reason.

They are roughly double the amount of full-time M&A people at this point in the year that there were at this point last year. And so that's a primary reason.

Okay. Turning to the maintenance revenue.

The maintenance revenue keeps increasing as a proportion of the overall mix, which, of course, isn't a surprise given that that's the revenue line that you're most focused on growing. As you look across your business units, is there a specific ceiling you've encountered in terms of how high that maintenance mix can become or does that ceiling vary tremendously across the various verticals?

When I was writing about that in the President's Letter, Jamal sort of bridled and said, "Well, what if you buy a company that's got high Professional Services? Your mix is going to drop dramatically in that particular business unit, at least for a while."

And so I think the issue comes down to the fact that big customers with big budgets would much rather have a custom solution that's suited to their needs. And so if you cater solely to those kind of clients, you're going to have very high Professional Services and much lower maintenance.

Whereas, if you have many small clients, you're much more likely to have a SaaS-like model with very low PS or no PS, and almost entirely recurring revenues. So those are the 2 sort of ends of the spectrum, and obviously, some of our business units are much more like the former and some are much more like the latter.

So I would say, it varies a lot based on the client base you're serving.

Okay. And finally, a year ago, you said that you're going to place more focus on public company investments.

It doesn't seem like you've been terribly active on that front other than your involvement with Redknee, has that been due to a lack of opportunity in terms of public market valuations or are public company investments always going to be more of an ad hoc and opportunistic endeavor?

I think the ad hoc/opportunistic is the right way to view it. The announcement a year ago was just that we were getting back into the business after having been out of the business for a number of years.

It's an ancillary business for us. It's never going to dominate what we do.

There will be points in time when markets aren't happy, and there will be lots of investment opportunities. But the competing investment opportunities will be the chance to buy companies for the long haul that are not public at the same time.

And so it's -- I don't think it will ever be a big part of our business. I just think it's a nice byproduct business.

Mark, maybe you can talk just a bit about the cash growth and the pace of the cash growth. I guess the question that comes to mind is how much is too much in terms of being able to fully deploy it.

It obviously built at a rapid pace over the last few quarters. How should we think about that?

I know you touched on it a little bit in the letter.

What do they call those? First world problems?

You'd obviously like to be patient and wait for your opportunities, and the issue is, if it's sitting around doing nothing, it isn't earning returns for your shareholders, and you could return it to them, and let them invest it. And -- so I think I've categorized it previously as the amount of embarrassment that the board is willing to put up with as we sit on cash and people start clamoring for it to be distributed either via dividends or share buybacks.

And I think you know my views on most share buybacks. So my preference would be to hang onto the cash.

We seem to be ramping our M&A activities, and to some extent, it seems to be paying off. And so rather than returning it to shareholders, I'd rather hang onto it at least for the time being and see if perhaps we can't deploy it.

Okay. That makes sense.

Just one quick follow-up either for you or Jamal. The deals in the quarter.

You did a sizable amount more that seemed to be regular or full on, full acquisitions of businesses that came with a bunch more working capital versus asset purchases. I'm not sure if there's anything in particular that sort of drove that.

But it just sort of stood out to us that there was a big jump in working capital. Anything specific there?

Because I know you seem to historically sort of prefer the latter.

I mean, nothing is jumping out to the 2 of us as we look at each other in a slightly dazed fashion. But we have a strong preference for asset purchases for tax reasons.

If you can buy them in a tax advantage way, you can write them off and that helps. As you know, our cash tax rate has been climbing and is up considerably from a couple of years ago and it's just one of the things we try to manage.

So our preference would be to do asset purchases, but at the same time, many vendors would prefer to sell shares. And so we end up with a mix of those too, depending upon whose need is greatest.

Plus, I think it was a telecom acquisition that had like, I think, $10 million of WIP that we acquired. I'm not sure if you're referring to...

That's where we were heading. So okay.

Yes, and when I followed up with the subs on that, it was a cyclical type of business and it's a WIP balance that they expect to grow -- drop down. So just happened to be that there were large implementations into that 1 acquisition, but I wouldn't say it's a shift or anything in terms of what we're buying.

Just reflecting a little bit. I mean, WIP is one of the things I worry about a lot.

Some businesses structurally have big work-in-process, assets on the books, and you always worry obviously about the collectability of those. And so we do age WIP to try and keep a handle on it and review it on a regular basis.

Next caller?

Could you talk a bit about employee retention? You mentioned more Constellation-like PE firms emerging.

And how do you keep employees, and how do you think about employee retention here?

I think in verticals that vertical-specific experience is very, very important. So down in the ranks of the business units, there are probably 2 or 3 competitors that each of those business unit has.

They're usually in a different geography. And so the mobility of those managers of vertical-specific isn't huge, and they generally have to uproot their families if they wanted to take a job elsewhere.

So I don't worry too much about those people being poached other than to a local business that isn't in the same vertical. So it's not a function of competitors stealing those people, it's just them being -- becoming dissatisfied with their job and seeking another IT job, which is, there's lots of those available.

And so we've recognized that and know that we have to be competitive. In terms of CSI lookalikes trying to poach more senior people, they can wave around very large checks and make great promises.

If you've ever dealt with venture capitalists, there will be firms, they talk a great story at the front-end, but if you ever get down into the contract, that's where the rubber meets the road. And I'm hoping that our guys who are being courted are sufficiently sophisticated to examine those offers that they receive very carefully.

On the other side, the way you keep people is by making sure that their current needs are satisfied and their dreams and aspirations are provided for. And what we can offer is a degree of autonomy that people don't tend to get inside of PE companies.

And the opportunity for mastery of their craft that they probably don't get inside of most PE companies. If you're focused on a playbook that requires you to, in a 2 to 3-year period, make dramatic improvements to profitability, then settle it down for a year or 2 and then flog it to some unsuspecting buyer, which seems to me the PE model.

You're not going to be learning how to invest for the long haul, learning how to build a team for the long haul. It becomes a much more short-term oriented endeavor.

And I think a number of our key employees are focused on building great businesses for the long haul and surrounding themselves with great teams. And so I think we have certain natural advantages versus those firms that are trying to come and get some of our accomplished employees.

But at the end of the day, if they put enough cash on the table and make enough promises about autonomy, they may be able to lure some of those people away.

Okay. Fair enough.

Can you talk a bit about M&A from a geographic perspective as well? It seems like you're going a little bit outside the kind of typical North America and Europe profile with the Japanese JV last quarter, and then the Telepin customer base this quarter?

We have been expanding geographic coverage for a long period of time. If you look at our lead generation, it's still North America dominated, but Europe is a strong and relatively stable component of what we do.

And for the first time, as we look at our lead gen, the Japanese leads are showing up visibly. So we're making a little bit of progress there.

We're increasingly having employees in some far-flung places and when you got employees, then you tend to get opportunities and leads. Ultimately, it's our employees that find the best opportunities for us.

Mark, just on -- further on the Japanese venture or Japanese market, if you will. What's it looking like there in terms of deals done so far, and how fast you think that business could ramp up on the one hand?

On the other hand, what is the PE competition look like for deals in Japan?

We've done 0 deals so far. And the PE competition arrived long before we did.

I don't know them intimately. I'm going to be there in a few weeks' time, and I'm going to visit with some of the local VCs and PE firms.

We do get a portion of our acquisitions from PEs and VCs, and I'll know more then, so maybe bring up the question next time around, Blair.

Okay, okay. Also, just on the hardware side of things.

Obviously, hardware is, I know, it bounces around. And I'm just wondering, you do get very good margins on the hardware you do have.

Is it -- do you think the hardware will grow with the business over time or do you think that if you're given the choice between 2 companies in front of you to buy, would you not take the hardware 1, because of volatility in the margin structure?

If it's proprietary hardware, I take it every time.

Okay. And then Jamal, just on the tax rate.

Do you have a view on the tax rate for this year, as it came in a little bit higher this quarter than we've been looking for?

I believe it's in line with what I have been saying, so it was around 17%, 18% last year. I was saying it was going to ramp up towards 24% over a couple of years.

So it seems to be coming in around 20%, 21% this year, which is what I was expecting.

Okay, Donna, thank you very much for hosting the call. We have our AGM kicking off at 10:30, and we'd welcome any of you to join us.

And we'll have the operating group general managers and most of the board there. And we'd welcome questions for those people during the course of the AGM.

So hope to see a number of you quite soon. Bye-bye now.