[Foreign Language] Good morning, everyone and thanks for joining us for our Q4 fiscal 2021 results call. What a year we had.

We'll return to the results we filed yesterday in a moment but first I want to take a bit of time to tell you about MDF Commerce and the state of our operations. Our mission at MDF commerce is to enable the flow of commerce and we do so by developing and providing our commerce technology solutions to our clients.

Our three platforms Unified Commerce, Strategic Sourcing and E-marketplace and power businesses around the world, allowing them to generate billions of dollars in transactions on an annual basis and this includes over 300,000 end-user companies mostly in North America. This past year marks the first of our five year strategic plan that we embarked on a year and half ago.

At the heart of this plan is our transformation into a high-growth cloud-based SaaS company. During an unprecedented global health and economy crisis brought on by the COVID pandemic, we remain focused on delivering on the needs of our clients and creating value for our stakeholders.

Our success is driven by our employees and we celebrate their many accomplishments during that first year of our transformational journey. The management team is confident that our talented team will meet new challenges as we move forward into the second year of our strategic plan.

I invite you to turn to Slide 5, which shows a diagram -- a high-level diagram of that front line. This strategic plan was developed to guide the corporation effectively competing in two significant and growing software markets that enabled the flow of commerce, unified commerce which includes e-commerce and supply chain collaboration and strategic sourcing.

For Q4 2021, total revenue was $22 million, which represents the growth of 16.5% from the same quarter year-over-year and our annual revenue for fiscal '21 was $84.7 million, which is up 12.3% over the previous year. This is the highest level of annual growth recorded for any of the past five years.

When we embarked on this strategic plan, the biggest challenge was to join with growth and we've got accomplished that significantly and you can also see that that growth keeps increasing quarter after quarter. So our year average is 12.3% but fourth quarter was 16%.

So certainly trending in the right direction. What's particularly noteworthy is when we look at the revenue growth of our strategic focus, namely e-commerce and the U.S.

portion of our strategic sourcing, revenue from the e-commerce solution has grown 107%. That's massive and our U.S.

strapline sourcing grew by 20.8%, again, quite massive. So our global growth is certainly fueled by our strategic initiatives, but of course, we still have some older places -- older pieces that are not growing as fast and we'll discuss this a bit later.

Overall, we're pleased with all that was accomplished during the last year and we continue to make excellent progress in transforming MDF Commerce into a high growth fast digital company. So to effectively compete in these two growth markets, our strategy is focused on five transformational pillars and here is how we've progressed in the past 12 months.

The first pillar was do unite and becoming a single SAS company. Over the past year, we have rebranded, we've elevated our profile.

Look at how many press releases we've published in the last 12 months compared to the last five years. We've greatly simplified and unified how we present our solutions.

We've revised our brand architecture. It's now uniform our internal services, our technologies, our reporting and our planning.

I've also been realigned to favor operational unity and efficiency. The second pillar is accelerating product development and innovation.

We did that by adding new senior product strategists. It resources that have considerable impact on accelerating our development cycles, strengthening our product innovation and further monetizing existing assets.

All these improvements have been extremely well received by our customers. We have new versions, our e-commerce solutions as well as multiple innovations in our strategic sourcing platforms, which helps explain the growth.

MDF commerce remains committed to investing in product development that maintains our competitive edge and improves our ability to convert our pipeline. Thirdly, it was the scaling of customer acquisitions.

Considerable efforts were put into developing our sales resources and processes, new sales, leadership, ongoing sales training. The past year we've won major accounts, such as Aldi, Indigo, the Canning group, the Government of Newfoundland and Labrador, among others.

We've on boarded over 92,000 suppliers for strategic sourcing and approximately 600 SMBs to our unified commerce solutions. Sales leadership dedicated to our high growth platform is driving the implementation of our organic growth plan, which is focused on further strengthening our sales culture and leveraging cross selling opportunities to be between our different platforms.

Our fourth pillar is ongoing mergers and acquisitions and integration, which is our key elements to our transformational plan. Our acquisition strategy revolves around the specific goals of expanding our geographic footprint and strengthening our product offering.

We entered fiscal 2021, just having completed the integration of E-commerce and that since acquired an integrated vendor registry, which added 70,000 new suppliers, 400 buying agencies and increased our coverage to 14 additional States in the U. S.

These are two very good examples of executing our strategy, strengthening our product offering for unified commerce and expanding our geographical reach for strep sourcing with the end goal of further consolidating a very fragmented market. Looking ahead, our M&A roadmap is robust.

We have targets for both unified commerce and strategic sourcing in our pipeline that we will be executing on it. And last but not least actually probably the most important one, cultivating the culture of talent and productivity.

As a software company, the main driver of our success is our people, our talent and our culture. Over the past year, considerable efforts have been made to bring life to a set of values that empower our teams to innovate accelerate sales effort, ensured better operational efficiency, better governance, diversity inclusion.

As the tech resource crunch intensifies in Canada and internationally, we've implemented multiple strategies and campaigns across Canada, in the U S and parts of Europe to source the new talent required to support our accelerate, accelerating growth projectory. This is just anecdotal, but our hyper-local recruiting campaign and our partnership in Ukraine.

I was informed earlier this morning that we've actually recruited our two first candidates from these campaigns. It's starting to work as we exit fiscal 2021 with the fastest growth projectory experienced by MDF commerce.

In several years, management has identified a few foundational elements that needs to be addressed in order to scale more efficiently in the future. Accelerated growth revealed that there are opportunities to improve efficiencies and margin by upgrading some technology in key areas.

As we increase the number of large deployment, this require us, it requires us to invest in cloud transformation to improve metrics such as usage and transaction volume as it increases for our e-commerce solutions. At the end of year one, one of the most exciting aspects of our efforts is the marked growth acceleration in our areas of strategic focus.

E-Commerce, US-based strategic sourcing. As I mentioned earlier, we believe these results are good indicator of the potential for our growth strategy.

Not only did we transform our operations, but we also strengthened our leadership team. We added three new members to our Board of Directors.

[Indiscernible] from California, [indiscernible] well known in Quebec in Canada and more recently, Mary Ann Bell, a great leader. With all the leaders, we also added to the management team, our new Chief Financial Officer, Deborah, our new Chief Legal Officer [indiscernible] our new VP of Human Resources, Judy [ph] as well are strengthening our team in e-commerce.

It's been an extraordinary year. And with this, I will turn over the call to Deborah to discuss our Q4 and fiscal 2021 financial results.

Thanks Luc, you could turn to slide six; we're all start with the annual fiscal '21 results. Total revenue, as Luc mentioned with $84.7 million, that compares to $75 million reported in the previous year, an annual growth rate of 12.3% and as Luc mentioned, the highest level of annual growth recorded in the past five years.

We look at our revenues under three strategic platforms. Unified Commerce represents about 44% of our revenue, Strategic Sourcing, 39% and the Marketplace is about 17%.

Unified Commerce platform, which includes our supply chain collaboration and our e-commerce solution generated $37.3 million for fiscal 2021, an increase of $11 million, almost $12 million at 47% compared to our revenues of the previous year at $25.5 million. The strategic sourcing platform generated $32.7 million an increase of 7.8 compared to $30.3 million.

In the previous year. When we look at our eMarketplaces platform, it generated $14.7 million for fiscal '21.

That's down 25.3 compared to revenues of the previous year of 19.7. If we focus on our two growth platforms, the unified commerce, which we saw the growth at 47 year 47% year-over-year and specifically our US-based strategic sourcing, these are the areas we see the highest growth potential.

First for Unified Commerce, which includes our again supply chain and our e-commerce solutions. On the e-commerce lever, we have two solutions Orchestra, which is our larger enterprise solution and it contributed $7.1 million of the year-over-year increase and the increase in revenue in our orchestra sluicing is really around organic growth, new clients and increased transaction based revenues year-over-year.

In e-commerce, which we acquired in December, 2019, we strengthened our e-commerce solution offering and it contributed $5.4 million to the year-over-year, increasing revenue combined the two e-commerce solution generated a year-over-year revenue growth of an impressive 107%. Our e-commerce our solutions often generates professional services revenue, primarily from implementation services and large deployment contracts either typically are lower margin revenue streams.

They're lower margin than the recurring revenue from right of use licensing or our typical size revenue. We introduce the partner strategy to decrease our focus on implementation services in favor of focusing on higher margin style revenue in our supply chain collaboration, a decrease in your, in your year-over-year revenue of $0.6 million MIS around certain retailers, which were negatively impacted due to the COVID pack.

COVID-19 pandemic is this is really a lower volume business and where we saw lower transactions and volumes that is driving that revenue down over year-over-year. If we turn to strategic sourcing, this is a solution where the public service sector is that the heart of the value proposition and represent some of our highest quality and most efficient right revenue streams this year in the US-based strategic sourcing solutions that we saw the highest year-over-year growth and that was 20%, 28%.

The acquisition of vendor registry in fiscal '21. Then our us strategic sourcing, geography, yeah, geography and our footprint there.

We believe that the US-based government infrastructure spending will provide us a wonderful opportunity for pipeline and conversion turning to the yeah. Market platform, where we saw revenue for the year of 14.7, but an overall decrease in growth of 2,500, 3% here.

This is a marketplace which has many different types of business and with the pandemic never negatively impacted our eMarketplaces solutions specifically in areas such as automotive line parts like our [indiscernible] business, electronic components, which is our broker forum and of course, diamonds and jewelry and polygon and even, yeah, boom. In the early days of the year where we saw online recruitment slowed down.

Now, ironically has been discussed in a few minutes. The global job market and related recruitment activity has completely turned around as we exit 2021 and we're seeing unforeseen demand for top talent.

Overall, we expect the market place revenues will continue to have less of an impact on the corporation in the future. As we focused on our higher growth collusion, namely the strategic sourcing and unified commerce platform.

If you turn to slide seven, we'll sorry, just before that, I covered the year-over-year results in terms of net loss for the year with 7.6 and that represents $0.38 per share and adjusted EBITDA for the year with $5.7 million and that composes to $10.3 million of the full year, last year. We mentioned in the early part of the call that we did amend our adjusted our definition of adjusted EBITDA to adjust for acquisition costs and restructuring costs and we exclude the excludes, excuse me, exclude these, include these having trouble.

Because we don't believe that they're representative of our core business and we adjust them. So that periods will be comparative from one to the other overall adjusted EBITDA declined year-over-year due to increased foundational investments and operations, sales and marketing R&D and professional services that support our implementation and strategic initiatives and our overall transformation plan, foundational investments are expected to improve scalability and efficiency over time.

Now we can turn to slide seven for the Q4 2021 results. Total revenue was 22 million again, representing a nice growth quarter over quarter at 16.5% and that's up from $18.9 million in the previous year, the corporation unified commerce and strategic sourcing saw again, the highest growth in the fourth quarter while eMarketplaces was stable or declining in some of the marketplaces a quarter over quarter in unified commerce platform where we saw $9.7 million that represented growth of $29.5 million and again, in e-commerce solutions, that is part of Orckestra and k-eCommerce.

We saw an increase of revenues of 2.4 million together compared to the same quarter of fiscal 2020 K commerce, which was acquired by the corporation in December, 2019, contributed $2.2 million in revenues in the fourth quarter compared to 1.6 in the quarter before that story, the Q4 of the previous year, but increase demand for e-commerce services, which accelerated in the context of COVID-19 has resulted in higher rate of revenues, higher professional services, revenues that are supporting large customer deployments. For strategic sourcing, the revenue for the quarter was $8.7 million or 15.4 over the previous Q4 revenue increased 1.4, essentially over the Q4 this year versus Q4 last year.

Again, we saw that the corporations, you bet US-based solution bid net contributed the majority of the revenue quarter-over-quarter in, in including the corporation's acquisition of vendor registry, which was in November, 2020. Again, we stayed at the US-based strategic sourcing solutions are really benefiting for from organic growth in revenues driven mainly by new buying agencies, which are driving up an increase in the number of paying suppliers and an overall increase in revenues compared to 2020.

In marketplace, eMarketplaces, we saw revenues at $3.6 million, a slight decline over the prior year, representing 6.7%. Overall, we see in the marketplace as platform slightly negatively impacted by the COVID-19 pandemic, as most of the solutions experienced lower memberships or lower transaction volumes in their respective industries.

Turning our attention to our margins, Gross margins were about six 20, 61% compared to the prior year at 67%. The decrease in gross margin percentage is mainly due to professional field fees, revenues that yield lower margins and this relates to large customer deployment, mostly in e-commerce.

We also saw higher costs of hosting and licensing from our cloud-based solution. We expect that gross margin percentages will remain compressed temporarily until the ongoing deployments in, in Congress are delivered operating expenses were a $16.7 million and this compares to $14.9 million and fourth quarter of 2020, an increase of about 12%.

The increase in operating expenses is primarily due to higher salaries and related expenses due to higher head count and the cost of labor Q4 salary expenses were offset by $0.7 million of wage subsidies from the Canadian government. That's the Canadian emergency wage subsidy program and for the year that amount was the subsidy amount was $3.4 million.

Concluding on Q4 with net loss, which was $2.9 million or $0.12 per share, basic and diluted and this compares to a loss of $6.8 million or $0.45 loss per share basic and diluted for the same quarter of fiscal 2020. Adjusted EBITDA was 200,000 for the fourth quarter of fiscal '21, compared to 700,000 reported in Q4 of 2020.

The adjusted EBITDA decline year-over-year is mainly due to increased foundational investments where we saw operations, sales and marketing R&D and again, professional services that were required to support the corporation in implementing its strategic initiative, transformation plan and large customer deployments. We believe that as deployments accelerate over the coming quarter’s personnel and professional service expenses will remain elevated and we expect to continue to make foundational investments to improve our scalability, as we grow.

Margins might continue to be compressed as we make the required investments to improve our scalability. A few words on our balance sheet, in March, this year we completed a bought deal offering and raised $80 million of gross proceeds.

This was the third deal equity financing in fiscal 2021, combined with a new credit facility that based on monthly recurring revenue and having paid down our long-term debt in Q3, we really strengthened our balance sheet and our overall financial position. In March, at the end of March, we had $110 million in cash and cash equivalent on the balance sheet.

This capital will allow us to implement the key components of our transformation plan, including our M&A strategy and while remaining focused on maximizing return on invested capital. As we move into fiscal 2022, a key challenge is the scarcity of tech challenge at -- tech talent, sorry and the growing costs of labor to put things in perspective.

Adjusted EBITDA, which I mentioned was 5.7, It represented margins of 6.8 for the current year and this compares to $10.3 million of adjusted EBITDA and 13% and percent margins for the prior year. The demand for programmers and developers has accelerated exponentially reaching unparalleled levels at a time where businesses are seeking to accelerate the digital transformation and their e-commerce capabilities.

The competition for resources is global driving up the costs for tech labor to unforeseen levels over the past fiscal year. The impact of this extraordinary demand for talent has already contributed to a compression of our margins, which may experience some fluctuation quarter-over-quarter.

As we move forward. Our challenge will be distract the right balance between managing our salary costs and staying in the race to capitalize on the window of opportunity brought on by this market activity.

As the tech crunch intensifies in Canada and internationally, we've implemented multiple strategies and campaigns across Canada in the U S and also in Europe to help us in our growth track trajectory, including the expansion of development capabilities in Ukraine. And as Luc mentioned earlier, it's already starting to at least gain some intention and hopefully some success with that.

I turn it over to Luc.

Thanks, Deborah. So let's go over to slide 8, where it, the times are really extraordinary.

It has been another quarter of significant progress in building a solid foundation for accelerated growth. In the quarter, we added approximately 92,000 suppliers to the Scott sourcing platform with hundreds of new active procuring entities, approximately 650 SMEs and three enterprise level mandates that were added to our Unified Commerce platform.

A great indicator of the potential of our strap line is the tremendous growth generated by our e-commerce solution and US-based Strat sourcing, which is the focus of all of our efforts based on our growing sales pipeline. Management believes that much of the acceleration for e-commerce caused by the COVID-19 pandemic will be permanent.

This is reflected in the growth trajectories that we reported this quarter and we plan to exploit the market trends to accelerate future growth of recurring revenue. Additionally, with the infrastructure build on the way we, we anticipate an increase in federal and other public sector agency spending across North America.

Over the next several years, which will all be done through various procurement processes and platforms at all levels of government. Our strap sourcing platform, which really is central to public procurement, is extremely well positioned to capitalize on the uptick in government spending throughout North America.

From an M&A perspective, our strong balance sheet allows us to become more aggressive in the execution of our strategies. Our targets pipeline is strong for both unified commerce and strapped sourcing and we're actively working towards strategic outcomes.

Very soon as we exit fiscal 2021 with the fastest growth trajectory experienced by MDF commerce. In several years, we have identified a few foundational elements that still needs to be addressed in order to more efficiently in the future accelerated growth revealed that there are opportunities to improve efficiencies and margins by upgrading technology in certain key areas.

As we increase the number of these large deployments, I believe in the end, I have never been in a stronger position, both in terms of market position and financial strength to capitalize on the tremendous opportunities presented to us. We would like to thank all of our clients, all of our employees and all of our shareholders for being part of this amazing transformational journey and with that, I'll hand over the call back to Claudia, our operator to open the line for questions.

Good morning. This is so Mondrian on behalf of Agostino.

Thank you for taking my questions. So Luc, my first question is basically about what Deborah was talking about in the end about the Tech Talent Crunch.

So what is that? There are a slew of job openings on MDF websites.

So are those job openings to fill new roles are to backfill. All those are set differently because of the tight labor market.

Are you having issues, both finding as well as retaining existing employees?

Well thank you for that question and it, it certainly is a challenge that seems to be across all the tech sector. We're in touch with, many peers and the demand for basically digital experts and programmers has, has just elevated exponentially.

I'd say probably starting around a little bit before Christmas. So the growth that you see in our numbers is obviously requires additional talent and we still have quite a few job openings and we have went outside of our usual ways of recruiting in order to fill the positions that we have so we can deliver the various systems to the clients.

We went into a very you may have noticed a very hyper-local recruiting campaign where we're targeting specific, I would say low density areas around for example, in Quebec, around the city of Sherbrooke in and around Lex St. John.

We've also been very active in the kitchen of Waterloo area. We've been active in Tennessee where we already have a base with the vendor registry and we've recently signed a partnership with a company in Ukraine, which is helping us put together a fairly large development center and as I mentioned, anecdotally, although we just signed this a week ago we're already seeing some input of new talent at a reasonable cost.

But it is a unforeseen activity, which we're feeling both from, that the cost of the new people that we recruit are asking for sometimes salaries, which are quite higher than what we would have expected and we even see it in our job boom platform, which quite interestingly is itself seeing a level of demand that is, is beating records from five, six years ago. So definitely the job market is a challenge that we are undertaking, but we took various solutions to address this and I'm very confident that we will be able to fill those positions in the appropriate time and be able to deliver on our customer's orders because our, our, our pipeline is absolutely full and this seems to be the case in, in many different sectors.

Okay. That's very helpful and of course, you just mentioned the partnership with Ukraine as well.

We're seeing that that started to gain some momentum. Are you expecting any potential cost savings?

Others lot from that partnership

Still experimenting a little bit the cost of resources as from what we can see is less than, than a similar person would cost in North America and with the success that we've been having for the last year and a half about all the working remote. It really we expect the same level of productivity.

We don't expect any issues and I have to mention, we already had about a dozen people in Ukraine and have had them for a long time. So this isn't completely new to us.

We just increased the level of effort and made the conscious decision to, to look to grow that development since center significantly.

Got it and my next question is about vendor registry. So, so was the revenue in the quarter from vendor registry in line with expectations that were set at the time of acquisition?

Not only was it in line, it was better than the business Gates that we had built. We're, having an incredible success at integrating vendor registries clients into our global network and that allows us to maintain that very strong, organic growth in the U.S.

If you would look at how it's been, you can, you can almost not, not distinguish the vendor registry teams from their straps sourcing peers now, because we've really integrated completely the business, not just from a financial perspective. But from an operations perspective or process perspective and it's going extremely well and as I mentioned, multiple times before we feel that that strap sourcing market is a highly fragmented market and we wanted to develop this very strong recipe about integrating additional buying agencies and additional suppliers to our network, which gives us an immense amount of strength and with the various stimulus programs that are coming out, those in the U.S.

and in Canada and probably everywhere in the world we think strapped sourcing growth will be very strong. And as Debra mentioned, it is the highest quality revenue that we have.

It's and it's very, very distributed no customer concentration. So we're very, very active on that strep sourcing front.

If I could add that in that particular strategic sourcing, it's easier to adjust pricing by offering different packages. So we are benefiting from some increased in prices without necessarily just increasing prices.

We're doing it through increased functionality and ability to effectively use the platform from a client experience. So it's allowed us to increase in pricing, which is helping also,

Good morning. Thanks for taking the questions.

A big surprise when you pace of professional services during the quarter doubling year on year, especially with the UK early in the quarter under lockdown. Can you maybe give us a bit of an update on the ID implementation then as well, maybe give us color on how the first batch of stores fared during the quarter.

Thanks for that. Obviously the professional services to do some, some of these large deployments is a, I would say, as a temporary solution that we had to use because of the tech talent crunch that we were talking about.

So it's not a permanent thing where, where we, we actively got into different recruiting strategies. So we, we hope to have to see that lower gradually over time.

That's where the Aldi implementation things are going very well. We now have added a significant number of stores in Ireland.

We're still working with the Aldi folks to optimize the complete operation as you indicated the UK was, was locked down and locked down is even weak where they was, it was completely shut for most of January to March and this created some very good demand to the store. The number of stores that are still active, we would have wanted to and Aldi would have also wanted to, to deploy or to continue to deploy faster.

But we still need to make sure that we finished the optimization and the optimization is not just about the actual ordering and the, the digital software that we supply, but it's about the whole operation. The fact that the stores are in very highly dense population areas, they're typically quite small from a square footage perspective, very packed and the picking of the articles and the store still requires some optimization, the temporary storage to put the goods while people come and pick it up, or while we, we, we have them delivered is sometimes I would say a significant issue that needs to be dealt with the availability of labor to do that pick the picking in the stores.

It's something we need to further optimize. So we're still experimenting with various I would say strategies in order before we do the complete rollout but things are going well.

The relationships with the customer is very good. Our recurring revenue has substantially increased from those stores.

The demand for online groceries is still very strong. It hasn't come down any significantly.

Once a UK started to reopen. So things are good but going, I have to be honest, a little slow.

Title: MDF Commerce Inc.. (OTCPK:MECVF) CEO Luc Filiatreault on Q1 2021 Results - Earnings Call Transcript Symbol: MECVF Call Start: 08:30 Call End: MDF Commerce Inc.

(OTCPK:MECVF) Q1 2021 Earnings Conference Call June 10, 2021, 08:30 AM ET

[Foreign Language] Good morning, everyone and thanks for joining us for our Q4 fiscal 2021 results call. What a year we had.

We'll return to the results we filed yesterday in a moment but first I want to take a bit of time to tell you about MDF Commerce and the state of our operations. Our mission at MDF commerce is to enable the flow of commerce and we do so by developing and providing our commerce technology solutions to our clients.

Our three platforms Unified Commerce, Strategic Sourcing and E-marketplace and power businesses around the world, allowing them to generate billions of dollars in transactions on an annual basis and this includes over 300,000 end-user companies mostly in North America. This past year marks the first of our five year strategic plan that we embarked on a year and half ago.

At the heart of this plan is our transformation into a high-growth cloud-based SaaS company. During an unprecedented global health and economy crisis brought on by the COVID pandemic, we remain focused on delivering on the needs of our clients and creating value for our stakeholders.

Our success is driven by our employees and we celebrate their many accomplishments during that first year of our transformational journey. The management team is confident that our talented team will meet new challenges as we move forward into the second year of our strategic plan.

I invite you to turn to Slide 5, which shows a diagram -- a high-level diagram of that front line. This strategic plan was developed to guide the corporation effectively competing in two significant and growing software markets that enabled the flow of commerce, unified Commerce which includes e-commerce and supply chain collaboration and strategic sourcing.

For Q4 2021, total revenue was $22 million, which represents the growth of 16.5% from the same quarter year-over-year and our annual revenue for fiscal '21 was $84.7 million, which is up 12.3% over the previous year. This is the highest level of annual growth recorded for any of the past five years.

When we embarked on this strategic plan, the biggest challenge was to join with growth and we've accomplished that significantly and you can also see that that growth keeps increasing quarter after quarter. So our year average is 12% and 12.3%, but fourth quarter was 16%.

So certainly trending in the right direction. What's particularly noteworthy is when we look at the revenue growth of our strategic focus, namely e-commerce and the U.S.

portion of our strategic sourcing. Revenue from the e-commerce solution has grown 107%.

That's massive and our U.S. strapline sourcing grew by 20.8%, again, quite massive.

So our global growth is certainly fueled by our strategic initiatives, but of course, we still have some older places -- older pieces that are not growing as fast and we'll discuss this a bit later. Overall, we're pleased with all that was accomplished during the last year and we continue to make excellent progress in transforming MDF commerce into a high growth fast digital company.

So to effectively compete in these two growth markets, our strategy is focused on five transformational pillars and here is how we've progressed in the past 12 months. The first pillar was do unite and becoming a single SAS company.

Over the past year, we have rebranded, we've elevated our profile. Look at how many press releases we've published in the last 12 months compared to the last five years.

We've greatly simplified and unified how we present our solutions. We've revised our brand architecture.

It's now uniform our internal services, our technologies, our reporting and our planning. I've also been realigned to favor operational unity and efficiency.

The second pillar is accelerating product development and innovation. We did that by adding new senior product strategists.

It resources that have considerable impact on accelerating our development cycles, strengthening our product innovation and further monetizing existing assets. All these improvements have been extremely well received by our customers.

We have new versions, our e-commerce solutions as well as multiple innovations in our strategic sourcing platforms, which helps explain the growth. MDF commerce remains committed to investing in product development that maintains our competitive edge and improves our ability to convert our pipeline.

Thirdly, it was the scaling of customer acquisitions. Considerable efforts were put into developing our sales resources and processes, new sales, leadership, ongoing sales training.

The past year we've won major accounts, such as Aldi, Indigo, the Canning group, the Government of Newfoundland and Labrador, among others. We've on boarded over 92,000 suppliers for strategic sourcing and approximately 600 SMBs to our unified commerce solutions.

Sales leadership dedicated to our high growth platform is driving the implementation of our organic growth plan, which is focused on further strengthening our sales culture and leveraging cross selling opportunities to be between our different platforms. Our fourth pillar is ongoing mergers and acquisitions and integration, which is our key elements to our transformational plan.

Our acquisition strategy revolves around the specific goals of expanding our geographic footprint and strengthening our product offering. We entered fiscal 2021, just having completed the integration of E-commerce and that since acquired an integrated vendor registry, which added 70,000 new suppliers, 400 buying agencies and increased our coverage to 14 additional States in the U.

S. These are two very good examples of executing our strategy, strengthening our product offering for unified commerce and expanding our geographical reach for strep sourcing with the end goal of further consolidating a very fragmented market.

Looking ahead, our M&A roadmap is robust. We have targets for both unified commerce and strategic sourcing in our pipeline that we will be executing on it.

And last but not least actually probably the most important one, cultivating the culture of talent and productivity. As a software company, the main driver of our success is our people, our talent and our culture.

Over the past year, considerable efforts have been made to bring life to a set of values that empower our teams to innovate accelerate sales effort, ensured better operational efficiency, better governance, diversity inclusion. As the tech resource crunch intensifies in Canada and internationally, we've implemented multiple strategies and campaigns across Canada, in the U S and parts of Europe to source the new talent required to support our accelerate, accelerating growth projectory.

This is just anecdotal, but our hyper-local recruiting campaign and our partnership in Ukraine. I was informed earlier this morning that we've actually recruited our two first candidates from these campaigns.

It's starting to work as we exit fiscal 2021 with the fastest growth projectory experienced by MDF commerce. In several years, management has identified a few foundational elements that needs to be addressed in order to scale more efficiently in the future.

Accelerated growth revealed that there are opportunities to improve efficiencies and margin by upgrading some technology in key areas as we increase the number of large deployment. This require us -- it requires us to invest in cloud transformation to improve metrics such as usage and transaction volume, as it increases for our e-commerce solutions.

At the end of year one, one of the most exciting aspects of our efforts is the marked growth acceleration in our areas of strategic focus; E-Commerce, US-based strategic sourcing. As I mentioned earlier, we believe these results are good indicator of the potential for our growth strategy.

Not only did we transform our operations, but we also strengthened our leadership team. We added three new members to our Board of Directors.

[indiscernible] from California, well known in Quebec in Canada and more recently, Mary Ann Bell, the great leader. With all the leaders, we also added to the management team, our new Chief Financial Officer, Deborah, our new Chief Legal Officer, [indiscernible] our new VP of Human Resources, Judy [ph] as well are strengthening our team in e-commerce.

It's been an extraordinary year and with this, I will turn over the call to Deborah to discuss our Q4 and fiscal 2021 financial results.

Thanks Luc, you could turn to Slide six; we're all start with the annual fiscal '21 results. Total revenue, as Luc mentioned with $84.7 million, that compares to $75 million reported in the previous year, an annual growth rate of 12.3% and as Luc mentioned, the highest level of annual growth recorded in the past five years.

We look at our revenues under three strategic platforms. Unified Commerce represents about 44% of our revenue, Strategic Sourcing, 39% and the Marketplace is about 17%.

Unified Commerce platform, which includes our supply chain collaboration and our e-commerce solution generated $37.3 million for fiscal 2021, an increase of $11 million, almost $12 million at 47% compared to our revenues of the previous year at $25.5 million. The strategic sourcing platform generated $32.7 million an increase of 7.8 compared to $30.3 million.

In the previous year. When we look at our eMarketplaces platform, it generated $14.7 million for fiscal '21.

That's down 25.3 compared to revenues of the previous year of 19.7. If we focus on our two growth platforms, the unified commerce, which we saw the growth at 47 year 47% year-over-year and specifically our US-based strategic sourcing, these are the areas we see the highest growth potential.

First for Unified Commerce, which includes our again supply chain and our e-commerce solutions. On the e-commerce lever, we have two solutions Orchestra, which is our larger enterprise solution and it contributed $7.1 million of the year-over-year increase and the increase in revenue in our orchestra sluicing is really around organic growth, new clients and increased transaction based revenues year-over-year.

In e-commerce, which we acquired in December, 2019, we strengthened our e-commerce solution offering and it contributed $5.4 million to the year-over-year, increasing revenue combined the two e-commerce solution generated a year-over-year revenue growth of an impressive 107%. Our e-commerce our solutions often generates professional services revenue, primarily from implementation services and large deployment contracts either typically are lower margin revenue streams.

They're lower margin than the recurring revenue from right of use licensing or our typical size revenue. We introduce the partner strategy to decrease our focus on implementation services in favor of focusing on higher margin style revenue in our supply chain collaboration, a decrease in your, in your year-over-year revenue of $0.6 million MIS around certain retailers, which were negatively impacted due to the COVID pack.

COVID-19 pandemic is this is really a lower volume business and where we saw lower transactions and volumes that is driving that revenue down over year-over-year. If we turn to strategic sourcing, this is a solution where the public service sector is that the heart of the value proposition and represent some of our highest quality and most efficient right revenue streams this year in the US-based strategic sourcing solutions that we saw the highest year-over-year growth and that was 20%, 28%.

The acquisition of vendor registry in fiscal '21. Then our us strategic sourcing, geography, yeah, geography and our footprint there.

We believe that the US-based government infrastructure spending will provide us a wonderful opportunity for pipeline and conversion turning to the yeah. Market platform, where we saw revenue for the year of 14.7, but an overall decrease in growth of 2,500, 3% here.

This is a marketplace which has many different types of business and with the pandemic never negatively impacted our eMarketplaces solutions specifically in areas such as automotive line parts like our [indiscernible] business, electronic components, which is our broker forum and of course, diamonds and jewelry and polygon and even, yeah, boom. In the early days of the year where we saw online recruitment slowed down.

Now, ironically has been discussed in a few minutes. The global job market and related recruitment activity has completely turned around as we exit 2021 and we're seeing unforeseen demand for top talent.

Overall, we expect the market place revenues will continue to have less of an impact on the corporation in the future. As we focused on our higher growth collusion, namely the strategic sourcing and unified commerce platform.

If you turn to slide seven, we'll sorry, just before that, I covered the year-over-year results in terms of net loss for the year with 7.6 and that represents $0.38 per share and adjusted EBITDA for the year with $5.7 million and that composes to $10.3 million of the full year, last year. We mentioned in the early part of the call that we did amend our adjusted our definition of adjusted EBITDA to adjust for acquisition costs and restructuring costs and we exclude the excludes, excuse me, exclude these, include these having trouble.

Because we don't believe that they're representative of our core business and we adjust them. So that periods will be comparative from one to the other overall adjusted EBITDA declined year-over-year due to increased foundational investments and operations, sales and marketing R&D and professional services that support our implementation and strategic initiatives and our overall transformation plan, foundational investments are expected to improve scalability and efficiency over time.

Now we can turn to slide seven for the Q4 2021 results. Total revenue was 22 million again, representing a nice growth quarter over quarter at 16.5% and that's up from $18.9 million in the previous year, the corporation unified commerce and strategic sourcing saw again, the highest growth in the fourth quarter while eMarketplaces was stable or declining in some of the marketplaces a quarter over quarter in unified commerce platform where we saw $9.7 million that represented growth of $29.5 million and again, in e-commerce solutions, that is part of Orckestra and k-eCommerce.

We saw an increase of revenues of 2.4 million together compared to the same quarter of fiscal 2020 K commerce, which was acquired by the corporation in December, 2019, contributed $2.2 million in revenues in the fourth quarter compared to 1.6 in the quarter before that story, the Q4 of the previous year, but increase demand for e-commerce services, which accelerated in the context of COVID-19 has resulted in higher rate of revenues, higher professional services, revenues that are supporting large customer deployments. For strategic sourcing, the revenue for the quarter was $8.7 million or 15.4 over the previous Q4 revenue increased 1.4, essentially over the Q4 this year versus Q4 last year.

Again, we saw that the corporations, you bet US-based solution bid net contributed the majority of the revenue quarter-over-quarter in, in including the corporation's acquisition of vendor registry, which was in November, 2020. Again, we stayed at the US-based strategic sourcing solutions are really benefiting for from organic growth in revenues driven mainly by new buying agencies, which are driving up an increase in the number of paying suppliers and an overall increase in revenues compared to 2020.

In marketplace, eMarketplaces, we saw revenues at $3.6 million, a slight decline over the prior year, representing 6.7%. Overall, we see in the marketplace as platform slightly negatively impacted by the COVID-19 pandemic, as most of the solutions experienced lower memberships or lower transaction volumes in their respective industries.

Turning our attention to our margins, Gross margins were about six 20, 61% compared to the prior year at 67%. The decrease in gross margin percentage is mainly due to professional field fees, revenues that yield lower margins and this relates to large customer deployment, mostly in e-commerce.

We also saw higher costs of hosting and licensing from our cloud-based solution. We expect that gross margin percentages will remain compressed temporarily until the ongoing deployments in, in Congress are delivered operating expenses were a $16.7 million and this compares to $14.9 million and fourth quarter of 2020, an increase of about 12%.

The increase in operating expenses is primarily due to higher salaries and related expenses due to higher head count and the cost of labor Q4 salary expenses were offset by $0.7 million of wage subsidies from the Canadian government. That's the Canadian emergency wage subsidy program and for the year that amount was the subsidy amount was $3.4 million.

Concluding on Q4 with net loss, which was $2.9 million or $0.12 per share, basic and diluted and this compares to a loss of $6.8 million or $0.45 loss per share basic and diluted for the same quarter of fiscal 2020. Adjusted EBITDA was 200,000 for the fourth quarter of fiscal '21, compared to 700,000 reported in Q4 of 2020.

The adjusted EBITDA decline year-over-year is mainly due to increased foundational investments where we saw operations, sales and marketing R&D and again, professional services that were required to support the corporation in implementing its strategic initiative, transformation plan and large customer deployments. We believe that as deployments accelerate over the coming quarter’s personnel and professional service expenses will remain elevated and we expect to continue to make foundational investments to improve our scalability, as we grow.

Margins might continue to be compressed as we make the required investments to improve our scalability. A few words on our balance sheet, in March, this year we completed a bought deal offering and raised $80 million of gross proceeds.

This was the third deal equity financing in fiscal 2021, combined with a new credit facility that based on monthly recurring revenue and having paid down our long-term debt in Q3, we really strengthened our balance sheet and our overall financial position. In March, at the end of March, we had $110 million in cash and cash equivalent on the balance sheet.

This capital will allow us to implement the key components of our transformation plan, including our M&A strategy and while remaining focused on maximizing return on invested capital. As we move into fiscal 2022, a key challenge is the scarcity of tech challenge at -- tech talent, sorry and the growing costs of labor to put things in perspective.

Adjusted EBITDA, which I mentioned was 5.7, It represented margins of 6.8 for the current year and this compares to $10.3 million of adjusted EBITDA and 13% and percent margins for the prior year. The demand for programmers and developers has accelerated exponentially reaching unparalleled levels at a time where businesses are seeking to accelerate the digital transformation and their e-commerce capabilities.

The competition for resources is global driving up the costs for tech labor to unforeseen levels over the past fiscal year. The impact of this extraordinary demand for talent has already contributed to a compression of our margins, which may experience some fluctuation quarter-over-quarter.

As we move forward. Our challenge will be distract the right balance between managing our salary costs and staying in the race to capitalize on the window of opportunity brought on by this market activity.

As the tech crunch intensifies in Canada and internationally, we've implemented multiple strategies and campaigns across Canada in the U S and also in Europe to help us in our growth track trajectory, including the expansion of development capabilities in Ukraine. And as Luc mentioned earlier, it's already starting to at least gain some intention and hopefully some success with that.

I turn it over to Luc.

Thanks, Deborah. So let's go over to slide 8, where it, the times are really extraordinary.

It has been another quarter of significant progress in building a solid foundation for accelerated growth. In the quarter, we added approximately 92,000 suppliers to the Scott sourcing platform with hundreds of new active procuring entities, approximately 650 SMEs and three enterprise level mandates that were added to our Unified Commerce platform.

A great indicator of the potential of our strap line is the tremendous growth generated by our e-commerce solution and US-based Strat sourcing, which is the focus of all of our efforts based on our growing sales pipeline. Management believes that much of the acceleration for e-commerce caused by the COVID-19 pandemic will be permanent.

This is reflected in the growth trajectories that we reported this quarter and we plan to exploit the market trends to accelerate future growth of recurring revenue. Additionally, with the infrastructure build on the way we, we anticipate an increase in federal and other public sector agency spending across North America.

Over the next several years, which will all be done through various procurement processes and platforms at all levels of government. Our strap sourcing platform, which really is central to public procurement, is extremely well positioned to capitalize on the uptick in government spending throughout North America.

From an M&A perspective, our strong balance sheet allows us to become more aggressive in the execution of our strategies. Our targets pipeline is strong for both unified commerce and strapped sourcing and we're actively working towards strategic outcomes.

Very soon as we exit fiscal 2021 with the fastest growth trajectory experienced by MDF Commerce. In several years, we have identified a few foundational elements that still needs to be addressed in order to more efficiently in the future accelerated growth revealed that there are opportunities to improve efficiencies and margins by upgrading technology in certain key areas.

As we increase the number of these large deployments, I believe in the end, I have never been in a stronger position, both in terms of market position and financial strength to capitalize on the tremendous opportunities presented to us. We would like to thank all of our clients, all of our employees and all of our shareholders for being part of this amazing transformational journey.

And with that, I'll hand over the call back to Claudia, our operator to open the line for questions.

Good morning. This is so Mondrian on behalf of Nick Agostino.

Thank you for taking my questions. So Luc, my first question is basically about what Deborah was talking about in the end about the tech talent crunch.

So what is that? There are a slew of job openings on MDF websites.

So are those job openings to fill new roles are to backfill. All those are set differently because of the tight labor market.

Are you having issues, both finding as well as retaining existing employees?

Well thank you for that question and it, it certainly is a challenge that seems to be across all the tech sector. We're in touch with, many peers and the demand for basically digital experts and programmers has, has just elevated exponentially.

I'd say probably starting around a little bit before Christmas. So the growth that you see in our numbers is obviously requires additional talent and we still have quite a few job openings and we have went outside of our usual ways of recruiting in order to fill the positions that we have so we can deliver the various systems to the clients.

We went into a very you may have noticed a very hyper-local recruiting campaign where we're targeting specific, I would say low density areas around for example, in Quebec, around the city of Sherbrooke in and around Lex St. John.

We've also been very active in the kitchen of Waterloo area. We've been active in Tennessee where we already have a base with the vendor registry and we've recently signed a partnership with a company in Ukraine, which is helping us put together a fairly large development center and as I mentioned, anecdotally, although we just signed this a week ago we're already seeing some input of new talent at a reasonable cost.

But it is a unforeseen activity, which we're feeling both from, that the cost of the new people that we recruit are asking for sometimes salaries, which are quite higher than what we would have expected and we even see it in our job boom platform, which quite interestingly is itself seeing a level of demand that is, is beating records from five, six years ago. So definitely the job market is a challenge that we are undertaking, but we took various solutions to address this and I'm very confident that we will be able to fill those positions in the appropriate time and be able to deliver on our customer's orders because our, our, our pipeline is absolutely full and this seems to be the case in, in many different sectors.

Okay. That's very helpful and of course, you just mentioned the partnership with Ukraine as well.

We're seeing that that started to gain some momentum. Are you expecting any potential cost savings?

Others lot from that partnership

Still experimenting a little bit the cost of resources as from what we can see is less than, than a similar person would cost in North America and with the success that we've been having for the last year and a half about all the working remote. It really we expect the same level of productivity.

We don't expect any issues and I have to mention, we already had about a dozen people in Ukraine and have had them for a long time. So this isn't completely new to us.

We just increased the level of effort and made the conscious decision to, to look to grow that development since center significantly.

Got it and my next question is about vendor registry. So, so was the revenue in the quarter from vendor registry in line with expectations that were set at the time of acquisition?

Not only was it in line, it was better than the business Gates that we had built. We're, having an incredible success at integrating vendor registries clients into our global network and that allows us to maintain that very strong, organic growth in the U.S.

If you would look at how it's been, you can, you can almost not, not distinguish the vendor registry teams from their straps sourcing peers now, because we've really integrated completely the business, not just from a financial perspective. But from an operations perspective or process perspective and it's going extremely well and as I mentioned, multiple times before we feel that that strap sourcing market is a highly fragmented market and we wanted to develop this very strong recipe about integrating additional buying agencies and additional suppliers to our network, which gives us an immense amount of strength and with the various stimulus programs that are coming out, those in the U.S.

and in Canada and probably everywhere in the world we think strapped sourcing growth will be very strong. And as Debra mentioned, it is the highest quality revenue that we have.

It's and it's very, very distributed no customer concentration. So we're very, very active on that strep sourcing front.

If I could add that in that particular strategic sourcing, it's easier to adjust pricing by offering different packages. So we are benefiting from some increased in prices without necessarily just increasing prices.

We're doing it through increased functionality and ability to effectively use the platform from a client experience. So it's allowed us to increase in pricing, which is helping also,

Good morning. Thanks for taking the questions.

A big surprise when you pace of professional services during the quarter doubling year on year, especially with the UK early in the quarter under lockdown. Can you maybe give us a bit of an update on the ID implementation then as well, maybe give us color on how the first batch of stores fared during the quarter.

Thanks for that. Obviously the professional services to do some, some of these large deployments is a, I would say, as a temporary solution that we had to use because of the tech talent crunch that we were talking about.

So it's not a permanent thing where, where we, we actively got into different recruiting strategies. So we, we hope to have to see that lower gradually over time.

That's where the Aldi implementation things are going very well. We now have added a significant number of stores in Ireland.

We're still working with the Aldi folks to optimize the complete operation as you indicated the UK was, was locked down and locked down is even weak where they was, it was completely shut for most of January to March and this created some very good demand to the store. The number of stores that are still active, we would have wanted to and Aldi would have also wanted to, to deploy or to continue to deploy faster.

But we still need to make sure that we finished the optimization and the optimization is not just about the actual ordering and the, the digital software that we supply, but it's about the whole operation. The fact that the stores are in very highly dense population areas, they're typically quite small from a square footage perspective, very packed and the picking of the articles and the store still requires some optimization, the temporary storage to put the goods while people come and pick it up, or while we, we, we have them delivered is sometimes I would say a significant issue that needs to be dealt with the availability of labor to do that pick the picking in the stores.

It's something we need to further optimize. So we're still experimenting with various I would say strategies in order before we do the complete rollout but things are going well.

The relationships with the customer is very good. Our recurring revenue has substantially increased from those stores.

The demand for online groceries is still very strong. It hasn't come down any significantly.

Once a UK started to reopen. So things are good but going, I have to be honest, a little slower than we expected,

But we did Ireland in the quarters. So yeah,

Ireland is now on and then they're also they've got their first few stores and a little bit of optimization and the rollout to happen in the second half of the year.

So are you guys like delaying, I guess, like rollout plans or do you still feel that you could get to, I guess like at a high level, you said like a thousand stores, like by year end, is that still a good estimate?

It's certainly the information that we have currently. It's but it's something we obviously do in collaboration with, with the client.

Right. But ultimately we, we have the capacity and you saw that in what is it that the third quarter last year was deployed within about three months, we deployed a little over 250 stores successfully.

So our capacity to deploy from a it perspective, it's very fast. But the logistics and the, human impacts are significant for the Aldi operations.

So it's in collaboration and it has to be timed. We basically put more software in the cloud.

It's pretty easy to do but they need to put seat feet on the street, then the acquire and do some construction hire people, et cetera. So I think the pace is, is obviously controlled by our clients.

And much of it is nothing to do with digital, but something a lot still to do with operations and getting the goods to the customers. I made it, this isn't a digital product.

You can't buy grow, you can buy grocery online, but somebody needs to handle the product to bring it to a consumption. It's not like music.

It would be a lot easier.

I understand. That's good color.

Just back on the staffing I guess I could record revenue quarter, but I'm just wondering how, how much is lack of staffing constraining your growth? Can you put like numbers around that, especially when I'm looking at fiscal '22, is that revenue number until you guys are able to staff like more aggressively?

Or how do I think about that?

You you've touched on some key points. Amr, you are, you're very good at reading all this stuff.

You're right. we could have grown faster in probably the last couple of quarters, if we would have had let's call it normal access to recruiting because of the crunch.

And we did recruit by the way, a little over 200 people during the year which was phenomenal because let's face it. We never could have imagined to recruit that many people without ever seeing them.

Right. We completely have to readapt our processes, but we still have a significant amount of open positions.

And there comes a point where with the customers that we're assigning, we're adjusting pricing because it's no longer about cost it's about how fast and how fast depends on the number of people you can you can make those you can get those implementations done. Yeah.

And it's not about software. it's not our software per say, that requires all that work.

It's the integration with the other customer systems we typically sell in LA. I like to make the comparison with some other quite well-known e-commerce suppliers in Canada.

And most of our customers are our, even the SME ones are much, much larger and they require integration with their ERP, with their financial systems, with their warehousing systems, with their inventories. Many of them are B2B operations, so they have complete different offering for various customers and all that requires some data input, et cetera.

And that requires people to do it pays off significantly in the recurring amount, but until the is completely installed, well, it can almost it doesn't generate a lot of heat growing revenue. So we're sort of, I'm trying to find the best, the most efficient balance between either increasing our, our staffing costs to a point where yeah, we will capture the demand, but it'll be hard on the margins and slowing down to, or sorry, letting ourselves be desired a bit more and trying to get our customers to wait up a little longer yeah.

To get their implementation. And okay.

In doing that, we were hoping to keep a little more healthier margins. So we're still looking for that right balance.

But the various recruiting initiatives that we undertook yeah. Probably last two, three months are starting and to work.

It's, it's definitely an unforeseen problem. And I have to say I've been in ID business for a long time and talent was always the most difficult challenge you had, but it's now to a point that I've never seen before.

We have to tell customers that we can't start their projects until six months or months and it's the reality and it seems to be happening in every sector in this post pandemic thing, go try to find a plumber to fix your household stuff. Then it's the same types of problems that we see.

I hear you. Okay.

you spoke to okay. Staffing obviously and like the increased professional services, like impacting your margins.

But I'm just wondering how far are we in the process of reinvesting in the business? So when I, when I'm looking at EBITDA margins for fiscal '22, okay.

I get the message probably can press for two, three quarters, but do we start to see an uptick maybe by the end of fiscal '22, is that fair?

That's with the information that we have, it seems quite fair. I'm not uncomfortable with what you're seeing.

Obviously I mean the big dependency here is that the success that we will have in, in obtaining tech talent at reasonable pricing and that's a factor that seems to vary significantly. And right now, I see it as somewhat unpredictable and that's why we came up with these alternate solutions.

I think offshore development is going to become a pretty popular. And I we, we have to put a lid on these things because that's the big factor.

That's very hard to I'd say predict in advance, but from our operational constraints from our investments that we're making are most of it is quite in line with our expectations. So your you're bang on.

Okay. Maybe one last one.

Can you give us an update on capital deployment? You ended the quarter, obviously with a very large cast position and we're seeing platforms in your verticals get taken out called 15 to 25x revenues.

How are you guys like competing in such an environments and in light of what you guys spoke about in the prepared remarks of RYC and being focused on RYC?

Two things, right. We we're, looking at two large let's say strategies for our M&A and what you mentioned with the acquisitions we saw from our multi offerings that Lightspeed they're acquiring platforms in our case right now acquiring platform in e-commerce is a, is not very synergistic with us.

It's hard to integrate and we already have a platform that addresses large clients in, in very many different spaces like retail, grocery, B2B and we also have a platform that addresses smaller companies, mostly in B2B and manufacturing. We don't feel we need other platforms.

We right now are successful at winning new business implementing new businesses is a little slower than we'd like, but we, we could use a certain, I would say, add on functionality that we could acquire, which do not go for those multiples, which we obviously would not want to invest our capital at 15 to 25x sales or certainly not until we trade at that level. In Strat Sourcing, you saw that we acquired a Vendor Registry at about a 5x multiple.

You saw that Negometrix was acquired by Marcel. If I'm not mistaken, it was about a four and a half multiple and unfortunately they, they got it.

So we're looking at the, like we mentioned before many opportunity to also instruct sourcing where we feel multiples, although are on the rise are still a bit more reasonable. And as we mentioned before, the quality of business there is very high.

It's very recurring revenue. It's not dependent on large customers, a lot less dependent on staffing because it is a network.

So we're very active also on the strategic sourcing front to look at a pipeline and we feel that there are integration capabilities really makes the difference. And although we're not trading at those multiples the integration strategy like we did with vendor registry really creates a very strong return on the capital invested.

So we're looking at both but we're being prudent and patient about what we offer in order to complete the M&A strategy, very happy to have a strong balance sheet because it allows us to, to really be much more active than some of our competitors which don't have that facility for. Now.

Hi guys. I just have one quick question.

You mentioned multiple times about updating technology. Can you just kind of quantify the magnitude or should we expect some large CapEx from next year or some idea of what that will cost and that's my question.

Thank you.

Thanks Ben for that question. We’re not expecting large amounts of capital expenditure.

We're probably in similar levels that we were in prior years. A lot of those I would say optimizations are from having moved some of our technology in the cloud.

As you're aware the cloud offers multiple optimization possibilities but we run some systems on AWS and some others on Azure and they work somewhat differently. And the great thing about the cloud is that you can scale up almost instantaneously sorry.

But if you do that, your cost of cloud become too high. So there needs to be some optimization in terms of how much CPU you use, how much memory you use and that type of thing, which was -- which is the type of work that we need to do.

So it's really optimizing micro servicing or, sorry, wrapping are certain of our systems in microservices, so that when we scale and we do see large spikes of scaling. We have to make sure that our cloud costs stay in line with our expectations.

So that's, that's mostly that type of work, which is done with our existing staff for now.

Hi, this is Gerald [ph] calling in for Richard. So thanks for taking my question.

So I just wanted to touch a bit on the gross margins. So I know you guys have been saying that gross margin is being pressured by the professional services.

Just wondering once that stabilizes what do you expect gross margins to be?

So the gross margins and remembering, we're talking about the sort of cost of sales margin, the professional fees we are being paid for the professional fees. So typically there's revenue and an expense for our staff.

So those are where the margins are more compressed. When we get back into the more typical size revenue, then it's a licensing fee and really the cost of sales aren't really aren't there.

When we look at the adjusted EBITDA type of margin that's where the biggest fluctuation is going to be the timing of salaries cost. So as we look to accelerate, bring on clients, we need to have a talent in place.

We know that the top of the talent cost is increasing. So that's where it's harder to predict where we're going on the EBITDA margin.

But certainly from the cost of sales type gross margins, then we feel comfortable that those will improve just naturally as we finished deployments and get back into the size revenue.

Okay. So, sorry, just to clarify.

So would it go back to about like mid to high sixties level, is that kind of what the aim would be?

Yeah, so could click. Yeah, for sure.

So I before we were getting into these very, very large implementations, which we do have healthy, positive margins on, they're just a lower margin than the size revenue. So when we think about our, our year, we had professional services revenue of about $12 million in that going to be just that slightly lower margin than we would have had, or that we would have on a pure recurring revenue.

So for sure once we get past now, in another sense, we hope that we're going to continue to do new client wins and therefore we will have deployments. So that could be a good news story going forward.

So but for existing clients, then for sure those margins will start to increase as stores it, for example I'll be your other clients where the implementations are complete and we get back into doing our, our main business of size type revenue.

Okay. Thanks for that and then just one last question.

So I know you guys mentioned there was some weakness in the supply chain solutions, just wondering as a, the U.S. has opened up a bit.

Are you guys seeing any trends there that are notable in terms of that picking up again?

Definitely, what's happening in supply chain is unfortunately there are some suppliers that didn't make it through were gaining new suppliers for our large ecosystems. And they're coming on board, we see consumption, we see the amount of traffic increasing and you, you see a, a flat little bit declining revenue but there's, there's a lot of additional new clients new suppliers who are using the systems and what's happening is that although it's slapped declining it's actually a mixture of those suppliers that just went off because they shut down or they closed that are being replaced.

So we've replenished significantly the supply chain line business.

They had a lot of our Luxury business, luxury retail in there. So that slowed down obviously in the current year, but then other things think of the client, like something like Indigo where now there's, there's a lot going at the volumes and picking up it's a new client.

So we think that the pandemic did have impact there and hopefully we'll see some return to the normal or an increase.

Okay. Thanks so much for that color.

I'll pop the line.

Well thank you very much for being with us this morning. [Foreign Language] Thanks to all of our staff, our clients and our investors for supporting us.

And we're excited to continue the journey that we're on then looking forward to meeting some of you in person hopefully soon. Have a great rest of the day.

Guys.[Foreign Language]