Good afternoon and welcome to the SPS Commerce Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's remarks, there will be an opportunity to ask questions. [Operator Instructions] Please note, that this event is being recorded. I would now like to turn the call over to Irmina Blaszczyk, Investor Relations for SPS Commerce. Please go ahead.

Thank you, Cole. Good afternoon, everyone, and thank you for joining us on the SPS Commerce third quarter 2024 conference call. We will make certain statements today, including with respect to our expected financial results, go to market strategy and efforts designed to increase our traction and penetration with retailers and other customers. These statements are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to our SEC filings, specifically our Form 10-K, as well as our financial results press release for a more detailed description of the risk factors that may affect our results. These documents are available at our website, spscommerce.com and at the SEC's website, sec.gov. In addition, we are providing a historical data sheet for easy reference on the Investor Relations section of our website, spscommerce.com. During our call today, we will discuss adjusted EBITDA financial measures and non-GAAP income per share. In our press release and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP financial measures, including reconciliations of these measures with comparable GAAP measures. And with that, I will turn the call over to Chad.

Thanks Irmina and good afternoon, everyone. Thank you for joining us today. We delivered a strong third quarter, revenue grew 21% to $163.7 million. Recurring revenue also grew 21%. It's been a year since I joined SPS Commerce. I've now come to fully appreciate the power of SPS' go-to-market strategy, network effect and unique ability to improve collaboration and data accuracy, to optimize supply-chain operations. As the retail industry continues to increase in complexity, naturally, SPS' role in automating trading partner relationships continues to evolve. We are in the process of evaluating the expanded opportunity ahead of us, and we look forward to sharing our updated view of our addressable markets. The acquisitions we have completed in the past year exemplify SPS' growing TAM, and our commitment to delivering a comprehensive suite of solutions, to help retailers and suppliers improve collaboration. Last month marked the one-year anniversary of closing the TIE Kinetix's acquisition. We are pleased with our progress of the post-merger integration, and remain enthusiastic about the long-term potential. As a reminder, we acquired TIE Kinetix to add e-invoicing capability to our product portfolio, establish a go-to-market beachhead in Europe for a fulfillment product, and strengthen our position in the U.S. market, by adding the U.S. portion of the TIE Kinetix's business to our U.S. operations. E-invoicing capability is a frequent requirement for customers implementing fulfillment outside of the U.S. in countries, where there is an e-invoicing mandate. With this capability integrated into our fulfillment product, we can now address the needs of these customers. We appreciate the differences between North America and European retail markets, but with access to the experience and knowledge of the TIE Kinetix team, we are optimistic about the success and long-term potential of our opportunity in Europe. This year, we continued to be…

Thanks Chad. We had a great third quarter of 2024. Revenue was $163.7 million, a 21% increase over Q3 of last year. Recurring revenue also grew 21% year-over-year. The total number of recurring revenue customers increased 2% year-over-year to approximately 45,200, and wallet share increased 18% to approximately 13,700. As a reminder, in August we closed the acquisition of SupplyPike, at which time we said we expect the acquisition to add approximately 200 customers to our network, and increase wallet share by approximately 350. For the quarter, adjusted EBITDA grew 19% to $48.4 million, compared to $40.5 million in Q3 of last year. We ended the quarter, with total cash and investments of $206 million. Now, turning to guidance, for the fourth quarter of 2024, we expect revenue to be in the range of $168.5 million to $169.5 million, which represents approximately 16% to 17% year-over-year growth. We expect adjusted EBITDA to be in the range of $48 million to $48.7 million. We expect fully diluted earnings per share to be in the range of $0.46 to $0.47, with fully diluted weighted average shares outstanding of approximately 38.1 million shares. We expect non-GAAP diluted income per share, to be in the range of $0.83 to $0.84, with stock-based compensation expense of approximately $12.8 million, depreciation expense of approximately $5.1 million, and amortization expense of approximately $7.2 million. For the full year 2024, we expect revenue to be in the range of $635.4 million to $636.4 million, representing approximately 18% to 19% growth over 2023. We expect adjusted EBITDA to be in the range of $185 million to 185.7 million, representing growth of approximately 17% to 18% over 2023. We expect fully diluted earnings per share, to be in the range of $2.03 to $2.04 with fully diluted weighted average shares…

Thank you. [Operator Instructions] And our first question today will come from Scott Berg with Needham. Please go ahead.

Hi Chad and Kim, really nice quarter here. Chad, I wanted to ask about the kind of demand environment that you're seeing out there, and how that maybe the quarter progressed versus your expectations. I know this has been a big year of selling back and enabling existing customers with regards to some retailer needs out there. But how are you thinking about the net new business opportunity out there, and how that will evolve maybe over the next couple of quarters, as you start moving on from those kind of internally focused enablement items that you've been working on? Thank you.

Yes thanks, Scott. Yes. As you mentioned, and as we discussed quite a bit in the last earnings call, although all year long we've seen a very healthy pipeline in terms of our community enablement programs, both in terms of the number of programs as well as the number of suppliers are in those programs. One dynamic that we did see in the programs in the first half of the year, and we expected to see a little bit in the second half as well. Is that a higher proportion of those programs, were areas where we expected to find existing customers, usually driven by a very healthy and strategic relationship with the retailer that just over time has led to a high penetration within those particular customers. As we look out now to the fourth quarter, and we have some pipeline visibility even into a little bit of 2025, that trend of strong pipeline of community programs continues, both in terms of number of programs and suppliers in those programs. Maybe what we see a little less of, is the higher concentration of existing customers within those programs, and that comment is probably a little bit more for the fourth quarter. It gets a little hard for us as we look further, out not to see the health of the pipeline, but to know the specific contents in terms of existing customers, non-existing customers as we get a couple quarters out. So overall, I'd say the demand environment looks positive and we are of course, a little subject to the mix of existing customers within those programs. But overall, I would say the health of the programs continues. And I would just add that that growth has shown up this year more in the wallet share side. And I would expect that, as the product portfolio grows and we have more and more to upsell and cross-sell the customers. That we will see a lot of the growth coming in on wallet share, which is just natural as the product portfolio expands, and we have more to cross-sell and upsell.

Got it, very helpful. And then, Kim, you mentioned not giving '25 guidance until the fourth quarter call. I understand a lot of moving parts around some of the recent acquisitions and whatnot, but as you're starting to think about calendar '25, should we think about any of your investments, whether it's in product or sales and marketing, and that cadence differing than maybe what we've seen over the last couple of years, or the philosophy there probably be relatively the same.

Sure. So, we're going to continue to invest in both the short-term, mediums and long-term as we see appropriate for our existing customers, and the opportunity ahead of us. That being said, we have reiterated our view of EBITDA growth anywhere between sort of that 15% to 25%. What I would say is, the primary reason why we made that comment about 2025 guidance providing it in - our next earnings call Q4. Is we do think that it actually is more comprehensive, and better to investors when we can provide our information on revenue as well as EBITDA, and the other metrics. Over the last few years, we've given purely an EBITDA number. And so, our practice going forward is to be more comprehensive, and provide the full spectrum of the guidance to investors, which naturally then leads to the Q4 earnings call.

Got it. Helpful. Congrats on a good quarter. Thanks for taking the questions.

And our next question will come from George Kurosawa with Citi. Please go ahead.

Thanks for taking the questions. I wanted to ask about the recent acquisition SupplyPike and Traverse. I mean, thinking in particular about Traverse, it seems like maybe there's some opportunity to synergize with some of these other add-ons, I think about score carding visibility helping us kind of a carrot for analytics adoption, or maybe helping identify underperforming suppliers. You can then go help with something like a SupplyPike, for invoice deduction management. And maybe if you could just talk about kind of the strategy - as you start to become like a true multiproduct platform, how you see some of these products playing with each other?

Yes. Yes, absolutely, George. So, we're really excited about Traverse; one, just in terms of the way we're executing on the integration of it into our business, but also the reception that we've had, as we've had the opportunity to meet with more Traverse customers, and help them understand what we do to digitize their suppliers using our community enablement program. And then, also the inverse of that where we've introduced the Traverse platform, to some of our long-term and strategic SPS retail customers. And I think here, really, what we're doing is really trying to help retailers and suppliers, be more efficient overall in their supply-chain. And a lot of times, the reasons for those inefficiencies are lack of visibility, or lack of performance measurements. And that's really what Traverse gets to, in that you can pull a lot of supply-chain data in and produce the scorecard for your suppliers, and help improve that. And then that does lead obviously, to more ways that we can work with suppliers than to help them with their performance. The key to a lot of this is having the digital connection, between the retailer and the supplier. And that's obviously our core offering that has been for years. But then when that supply chain performance isn't there, that could come across in the form of penalty, or invoice deduction levied by the retailer. And we can then help with the technology we got from SupplyPike, help on the supplier side, those suppliers deal with those, either dispute them. Because they're incorrect, or probably more toward to this whole ecosystem help those suppliers identify the root cause, of those supply-chain problems that led to the deduction in the first place, and get those issues resolved. So, we can take overall friction out of the supply-chain, between the retailer and the supplier.

It's super interesting. And then I did want to kind of as a follow-up to that, with more of a multiproduct story of growing portfolio. Any updated thoughts on pricing and packaging approach?

Yes. We are still working through the details of that as we work through the post-merger integration of these projects. But obviously, it's our objective to have a higher penetration of these products in our customers, and to the extent that those customers can get that in a single package that's priced right, it makes it easy for them to adopt. We would, of course, implement those strategies.

Got it. And then, if I could sneak in one follow-up. Kim, you gave some target numbers for SupplyPike and Traverse in terms of revenue and EBITDA. How did those come in, in the quarter? And any change to the outlook for '25?

Sure. So when we announced both of those acquisitions at that point in time, we gave a view of what our expectations were for top line, as well as bottom line for this year as well as next year. In the - I'd say in the quarter, they performed a little bit better than expectations, but we stand by what we have as our expectations, at the time we announced those acquisitions.

Great. Thanks for taking the questions.

And our next question will come from Dylan Becker with William Blair. Please go ahead.

Hi, Chad. Hi, Kim. Nice job here. I guess maybe sticking with the idea of the enablement campaigns. When you guys understand the platform continues to evolve and expand, and we'll have more to sell. But as you guys go in with a retailer with those initiatives, are the connections you're selling to suppliers, is that landing wall-to-wall? Or is there kind of incremental opportunities to go back with those retailers over time, and sell more touch points. I guess the question is kind of how should we think about the durability of the expansion motion, and the momentum we've seen even if we move more to a kind of balanced mix of net new and expansion, if that makes sense?

Yes. Yes, that's a good point, Dylan. It doesn't - it is not a very binary activity. So when we work with the retailer to digitize their suppliers that's really at a point in time, and we're extremely effective at getting almost all their order volume digitally connected at that point in time. But as you know, in retail, the merchandise assortment is always changing suppliers are always changing. And what typically happens with retailers is maybe the work we did got it to 98%, then that assortment changes and the suppliers change and their internal vendor management capability, isn't able to stay on top of that. And we will go back then, and work with other retailers to sort of do a catch-up, and we catch up to make sure that, that same high percentage of the order volume is digitally connected. So, we have a couple of modes of doing that. We can do those catch-up programs in some of the more strategic relationships we have. We're actually built into the vendor management and vendor onboarding process of the retailer, and we kind of catch those new suppliers as they come in. But it is a pretty fluid environment, as suppliers come and go. And I think in the end, that creates sort of a continuous flow of leads into our organization, through those community programs that then we can go out, and capture and establish those digital connections as those suppliers join our network.

Okay. Great. Yes, that makes sense. That's really helpful. Maybe as we think about to the network here, obviously, we've had a handful of kind of somewhat larger transactions, if you will. But thinking about kind of that network dynamic, and how that plays into your buy-and-build effort, you obviously get a lot of access to data. You see a lot of incremental processes that I'm sure you'd like to expand the network off of. How do you think about kind of that road map from a buy versus build perspective and organic versus organic, et cetera? Thank you.

Yes. So as we - really kind of all as we look at product expansion opportunity starts with the customer, and we're really working with that customer and understanding their business process. And then exactly like you mentioned, understanding where we could solve the problem with maybe data we have in the network, maybe we need to build a solution that leverages data in the network. Or even in the case of these recent product acquisitions, where we've decided that time to market was fastest, and getting an installed customer base was beneficial. And so, those made sense to be acquisitions. There's still quite a bit of benefit from the network data itself. So both with Traverse and SupplyPike as we integrate those products in. We're finding quite a bit of benefit by being able to feed those application platforms, with data in the network and get that more integrated into the network. So, the power of the data that we have in the network, we expect to be very applicable and additive to future acquisitions, or new products that we launch as well.

Great. Thanks, Chad. Appreciate it.

Our next question will come from Lachlan Brown with Redburn Atlantic. Please go ahead.

Hi, Chad, Kim, Irmina. Thanks for taking my questions. Just interested in what you're seeing in terms of the channel sales funnel. I mean obviously, the community enablement campaigns, have been largely focused on the existing customer base. But what is the channel sales been seeing in terms of the sales environment for new logos?

Yes. Great question. And our channel sales program is a great contributor of leads for us. And these also do tend to be more kind of full replacement cycle. So typically, when somebody is implementing a new ERP system, especially when they're going to cloud-based ERP system, it's a good time for them to change out the whole infrastructure they have for all their digital connections. And we've seen really healthy activity in this area and with ERP change-outs in volume, would more of that, though, I would say, coming more in more of the smaller side, most of this happens for us in the SMB area. I'd say - we've been really healthy in the small side. Maybe at the kind of more mid-market or the higher end of SMB, maybe a little bit slower to see some of these ERP change outs. But when you put those two together, sort of total volume of leads coming from channels, has been quite healthy for us this year.

Okay. That makes sense. I mean, that's interesting in terms of the smaller side of things. Given the channel so the channel is focused on also medium to large enterprises. We've heard that there's been some level of difficulty getting availability with system integrators at the moment, given they're quite tied up with the SAP migration. Have you seen this play out at all?

Yes. We have not seen that connection directly to SAP. A lot of the value-added resellers that we're working with tend to focus on the SMB area. I would just say maybe some of the uncertainty in the environment overall with interest rates, consumer spending, the election in the U.S., may have kind of slowed down a little bit of this ERP expenditure kind of at the higher end of the mid-market. Now, I know there's a lot of information out there that would lead people, to believe that there's going to be a big replacement cycle in, say, at sort of the higher end of the enterprise. We would expect to get some benefit from that, but probably a little bit measured for us, since we're more in the SMB side of the ERP market, which is - a lead channel driver for us.

That's very clear. Thanks for your time.

And our next question will come from Parker Lane with Stifel. Please go ahead.

Hi Chad. Hi Kim, thanks for taking the questions here. Congrats on the quarter. Chad, you mentioned it's been about a year since the TIE Kinetix deal. It would be great future assessment of how of how the go-to-market landscape for you all has changed in the European market in particular. And other than having more of a physical presence there, what are some of the initiatives you put in place to promote better efficiencies there and drive better performance?

Yes. So a couple of points just to remind everybody about the TIE Kinetix acquisition kind of three main things that are: one, that the e-invoicing capability that TIE Kinetix had that we didn't have. We felt was going to be a key product capability that we needed for international expansion. Then we wanted that, we were selling our analytics product with active go-to-market in Europe. But we didn't really have an active go-to-market for fulfillment in Europe. So, we thought it could be a foundation for that. And then, there was some U.S. business as well, that we've now integrated into our U.S. operations. A couple of things that have - as we work through the product strategy and the go-to-market strategy, one, e-invoicing, we now bundle that in with our fulfillment product. So we no longer have that barrier. We do think that the right go-to-market is e-invoicing coupled with fulfillment. And the e-invoicing piece is definitely a requirement that, we see in many of the countries in Europe to adopt fulfillment. The second piece would be a lot of the network itself, and the network technology can be used in Europe, and we've sort of proved that out with the product strategy. And then we have early signals that a lot of the go-to-market techniques that we've used quite well in North America, specifically the channel relationships and the community go-to-market should be applicable in Europe. Now all that said, I think we're early innings, if you will, on building out that go-to-market for Europe. And I think there are a few unique challenges in Europe, around the regional nature of the way the business is done there. The power balance is a little bit different between the retailers and suppliers who tend to have a lot of region-specific, or even country-specific retailers, where in the U.S., you have country-specific retailers, but it's a lot bigger market for them, so they control a lot more power over their suppliers. So, those types of dynamics we'll need to work through. But we're pretty optimistic that some of these things from a product strategy standpoint, as well as a go-to-market approach that have worked quite well for us in North America, our transferable euro.

Got it. Very helpful. And then you mentioned doing an evaluation to get an updated view on the addressable market. The messaging has been very stable on the addressable market in this business' history. Is that assessment purely a reflection of all the additional product you've put to market recently, or is there anything else we should read into there?

Yes. So I'd say the work we previously shared with you on addressable market is a bit dated at this point. And the product portfolio, as you mentioned, has expanded. So, we are doing some work internally, to just refresh that a bit. To account for kind of the current look at the market, as well as incorporate some of the product line expansions, and we're optimistic that we'll be able to share some of that in more detail here in 2025.

Great. Congrats again on the quarter. Thank you.

And our next question will come from Joe Vruwink with Baird. Please go ahead.

Great. Hi Kim, Hi Chad. Yes, I know you're still talking about a balanced growth algorithm. But just given the source of growth year-to-date, and the focus of recent acquisitions. Do you think there could come a time in the near future where you find yourself maybe just updating your sense of how you grow going forward? And I certainly don't ask the question, meaning to say that logo count stops growing, but just given the size and magnitude of trading relationships. You already help manage it does seem to be the case that just monetizing those relationships, is a pretty credible path to growing for a long time. And does that just become more of your focus, as opposed to kind of the balanced algo that you've been running up into this point?

Yes. Joe, I think that's a good observation. I mean we are confident that due to the way the market works, with the suppliers how much we're penetrated in that today, that certainly new customers is going to be a continued element in our growth algorithm. Now that said, now that we have over 45,000 customers and a broader product portfolio and some things that most likely we will do over time in terms of expanding that product portfolio both organically and through M&A. I think it is logical to conclude that expanding the wallet share on those customers with a broader product portfolio will also be a lever. And I think, it's a little difficult to predict historically in the business, those have grown fairly linearly. I think as the product portfolio gets bigger and there's a bigger base of customers to cross-sell, it might be logical to conclude that, that wallet share might start growing at a little bit faster rate than - the specific customer count.

And that would be, I would say, on the revenue side that Chad is referring to. I think your question was on revenue, but I just want to clarify, we also talk about balance. We talk about balance, meaning, we have the ability to grow the top line nicely. We also have the ability to drive the bottom line nicely, as well as margin expansion over time. So that balanced approach between sort of top line and bottom line, we believe, based on our business model, we have the opportunity to continue to deliver on that. That's on the overall financial picture. Specific on the revenue side, Chad certainly did answer that, but there's different sort of metrics that ultimately drive to that top line growth. And those components in there, as our product portfolio expand certainly gives reason of why that wallet share component, may continue to be strong going forward. But I just wanted to clarify on the balance, there's also our view of sort of top line and bottom line.

Yes, thanks, Kim that makes sense. Just on the customer trends, and obviously it's been well covered what's been happening with the enablement campaigns. I guess I wanted to ask, when you think about adding, I think its 150 customers organically year-to-date. Do you self-audit that result and come away with a view that ultimately, it might be reflecting maybe a tougher retail macro, or as you think about your customers, they've shifted their IT priorities. So it's maybe systems that could eventually lead to setting up the connection, but that follows maybe the area of focus, that's happening for customers this year. Just trying to get a sense of that number stands out, because certainly enablement campaigns while they're a big feeder of your customer growth, they're not the only feeder of your customer growth?

Yes. No, Joe, we don't hold that view that it's sort of driven by the macro environment, or kind of a change in the need for our types of solutions as we really looked into this, it really does come down to the mix of types of community programs that we've run this year. The overall number of programs and the suppliers in those programs has been quite strong. As we mentioned earlier in the call, the pipeline going forward for that looks quite strong. It is really just the mix, where we've run some campaigns this year with retailers. We have been quite successful historically and therefore, finding a higher percentage of existing SPS customers within those campaigns.

Okay. Great. Thank you.

Our next question will come from Jeff Van Rhee with Craig-Hallum. Please go ahead.

Great. Hi guys, thanks. Nice quarter. Just to follow-on to the last question, kind of a variation of that, because we think about the TAM. You've got 45,200 recurring customers. And I know you've talked about 200,000 in the TAM. And with a lot of the enablement campaigns being with people that are already with you, is there something - do you consider with respect to the go-to-market that you pursue enablement campaigns potentially with retailers of a type that don't have supplier bases - suppliers that are already in your customer count? I mean how would you get at the remaining 150,000 of 200,000 potential recurring customers?

Yes, Jeff, good question. And I've mentioned on previous calls, I believe that historically and even currently, our focus with that retail sales force is to get as many of these enablement programs with as many suppliers as we can sort of through the door, and that has worked quite well. And I would point out, even these campaigns that we have run and encountered a higher proportion of existing customers have been quite successful, both for the customer and for us in terms of monetizing those campaigns. And your point about potentially going to some other areas, maybe kind of hunting some other ground, where there might be a lower penetration of existing SPS customers, may be a tactic that we'll have to use in terms of pointing that retail sales force in some different directions. Historically, we have not had to be too discriminating and where we pointed that team, and it's led to lots of success. But as things play out in the future, we may need to focus them, and we certainly have an eye on that. And if that was what was required, we find ways to do that.

Fair enough. Just one last from me. As you look at the SupplyPike customer base, obviously, you've got some nice overlap and obvious synergies there. In the SupplyPike base that is not using SPSC, any observations on who they were using and any surprises in that respect, I'm talking about for fulfillment?

Yes. So SupplyPike customer base does tend to skew a little bit larger. So there is really good overlap and a very similar ideal customer profile. I'd say the SupplyPike customer tends to be kind of at the larger end of what the historic fulfillment customer is. And what we still do find in that larger end of the consumer products companies, is they invested in on-premise software and their own staff. To manage these types of digital connections way back before there were SaaS platforms to do this for them. And so that changeover cycle is a little bit slower in those larger customers. And so, we got to wait for the right point in time. It typically comes as those companies move to kind of full on into the cloud, and really want a cloud-based approach, or as they come to some conclusion. That it really does make sense to go forward, with a managed network rather than having their own staff that needs to go manage all these connections point-to-point. So, we're confident in the long-term that these are great customers that are likely to come over to SPS, because they're already SPS customers via SupplyPike, it's just the adoption may take some time.

Sounds good. Thanks for taking my questions.

And our next question will come from Mark Schappel with Loop Capital Markets. Please go ahead.

Thank you for taking my question. Chad, analytics growth appears to have settled in the mid-single-digit range over the past few quarters. Is -- should we think of this as the new normal for analytics growth, or do you expect a solution to get back up to more of a low kind of double-digit growth rate?

Yes. So, we have had a couple of quarters now of analytics growth coming in sort of right about 6%. We would expect for the year analytics growth to probably come in maybe not quite double-digits, but certainly the high-single-digits. And say, over the midterm, we would expect to get double-digit growth out of the analytics product. I would just point out that the analytics product a couple of things, it's not quite as addressable in our customer base as fulfillment. We do tend to do well in certain sort of sub-segments of retail or product categories. We're much stronger in analytics, whereas fulfillment is very addressable across all of retail. And the other point I would make on analytics is unlike fulfillment, where it's very sticky, very mission-critical, the analytics can tend to be a little bit more discretionary. And so, what we can see is if a particular set of suppliers, is feeling maybe a little bit more cost pressure, it's a little easier for them to turn on or off the analytics piece, versus the fulfillment piece. But overall, I know this quarter was a little bit lower growth. We do think that analytics can be a double-digit grower for us.

Thank you.

[Operator Instructions] Our next question will come from Nehal Chokshi with Northland Capital Markets. Please go ahead.

Yes. Thank you. I know we've talked about this before, but I think it's worthwhile to refresh. Of the 200,000 target customers that make up their $5 billion opportunity, what percent do you guys believe that is North America base?

So, what I would say is when we initially put that information together, and granted, it's quite dated, which is why we're in the process of updating, and we'll be in a position to provide that update at some point in 2025. But going back to when we initially put that together, that expectation was about, call it, half U.S. and then half outside of the U.S. I would say since we put that together, we obviously have even stronger results in the United States than we probably envisioned we would have had at that point in time. So again, at that point in time, U.S. was half, everything outside of U.S. was the other half, but I would say we see more opportunity in the U.S. probably than we thought when we initially put that together. Again, at some point in 2025, we expect to be able to provide a more comprehensive update to our view of TAM.

Great. And then Chad, you mentioned that go-to-market techniques in North America should be applicable in Europe. What are the risks that make you say should instead of will?

Yes. I mean we haven't done it yet. I mean so I think we do need to prove that. And I think there are certain things that make that a little easier in the U.S. One is retailers tend to have quite a bit of power over their suppliers. And so, when we get the mandate for digital connections coming from the retailer, in the U.S. that definitely catches the attention of their supplier, and then they look to join our network. I think the balance of that power is a little bit different in Europe, because the retailers tend to be a little smaller, a little bit more regional or country specific. The other dynamic is when we execute say, a community enablement program. We're doing all that primarily with our sales team located here in Minneapolis, and we can reach the whole, the world's largest economy, all in one language, all from one location. There'll certainly be regional differences that can add a little bit of complexity, to running a program like that in Europe. So, those would be the factors that I think we're optimistic that we can execute these programs there. But it may be a little bit more nuanced than, how we've done it in the North America market.

Great. Thank you.

And this will conclude our question-and-answer session, also concluding today's call. We'd like to thank you for attending today's presentation. And at this time, you may now disconnect your lines. Thank you.