Greetings and welcome to the Park City Group Fiscal Third Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeff Stanlis with FNK IR. Mr. Stanlis, you may begin.

Thank you, operator. Good afternoon, everyone. Thank you for joining us today for Park City Group's Fiscal third quarter earnings call. Hosting the call today are Randy Fields, Park City Group's Chairman and CEO; and John Merrill, Park City Group's CFO. Before we begin, I would like to remind everyone that this call could contain forward-looking statements about Park City Group within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based -- are statements that are not subject to historical facts. Such forward-looking statements are based on current beliefs and expectations. Park City Group remarks are subject to risks and uncertainties which actual results may differ materially. Such risks are discussed fully in the company's filings with the Securities and Exchange Commission. The information set forth herein should be considered in light of such risks. Park City Group does not assume any obligation to update information contained in this conference call. Shortly after the market closed today, the company issued a press release overviewing the financial results that we will discuss on today's call. Investors can visit the Investor Relations section of the company's website at parkcitygroup.com to access this press release. With all that said, I would now like to turn the call over to John Merrill. John, the call is yours.

Thanks, Jeff and good afternoon, everyone. We continue to deliver strong results in the quarter, wherein both total and recurring revenue, growing net income and growing EPS even faster. We generated significant cash flow, returning capital to shareholders and, once again, strengthening our balance sheet even more. We are achieving this performance despite necessary and strategic de-emphasis on certain high-touch noncore revenue, creating a modest headwind for revenues in the short term. We are achieving this despite investments in traceability, investments in expanding the depth of our sales force and automation, with only minimal revenue contribution at this point. Simply put, our core business, our compliance and supply chain businesses are an efficient, profitable and well-run machine. The proof is in the numbers. While our core business is solid, growing and profitable, we are positioning the company for the next major growth phase traceability and it is coming faster than we expected. I'll let Randy speak to that in a few minutes. Jumping right into the numbers. Total revenue was up 6% year-over-year for the March quarter. Recurring revenue increased 6%. Even with significant investments in our ReposiTrak Traceability Network, or RTN, our SG&A cost declined. Put another way, $260,000 in incremental revenue against $252,000 less in costs, even as we invest in our largest opportunity to date. GAAP net income increased 53% to $1.7 million. GAAP net income to common shareholders increased 61% to $1.5 million. Earnings per share increased 67% from $0.05 per share to $0.08. Year-to-date cash from operations increased 75% to $7 million. And we bought back 74,000 common shares at an average share price of $5.79 per share, paid off our bank debt entirely and have $22.9 million of cash in the bank. As we've said, our profitability and cash flow is and will continue…

Thanks, John. The results clearly show that our battle is working. In fact, that's pretty much an understatement. We're doing more with less, increasing our investment and our use of in-house-developed AI automation tools and solutions to improve our own operational efficiency. We can't emphasize enough how this creates a long-term structural advantage for us. And that enables us to grow revenue while continuing to shrink our fixed cost as a percentage of revenue. We've been doing that now for a number of years and I think the next few years are going to even be more dramatic. There's actually, from what we can see, 4 main ways for a SaaS company to grow. First, we can develop new products like our ReposiTrak Traceability Network, or RTN as we call it and that's already gathering steam. More on that in a minute. And there's another potentially large new product suite in our product road map and we're pretty excited about that as well. So let's put a checkmark next to, we have new products. Second, we can add new customers. Our traceability is definitely going to be adding net new names to our book of business. We've added 1 very large new wholesaler to our list this quarter. Even better, our expanded sales team has a pipeline that is deep and growing. Many of our prospects, in fact, are new names. So let's put a checkmark next to growth by adding new customers. Third, we can expand our penetration with the existing customers with their existing or current services. Let’s say, adding new vendors, for example, to a compliance customer of ours or scan-based trading new vendors, for example. This method is actually the best and we're seeing some nice acceleration currently. Each area of the business has seen additions…

[Operator Instructions] Our first question is coming from the line of Thomas Forte with D.A. Davidson.

I have few questions. I'll ask them both at the same time. So Randy you kind of teased this in your prepared remarks but can you give a little more details on how you might leverage AI to operate your business more efficiently? And then, John, you definitely talked about this in your prepared remarks. I'm just going to ask specifically for your current thoughts on capital allocation as it pertains to potential strategic M&A.

Okay, me first. We've been using -- we call them, productivity tools. It goes back 5 years. We had something called 10x which meant we wanted to increase the productivity of a particular group of our staff by 10x. We did that. We're really good, in my view, prejudice, of course, at thinking about what's the appropriate sort of tool, including artificial intelligence to improve the productivity of people that we have. You're going to read more and more about companies thinking about how do I get rid of middle management and things like that. That's not the issue we're facing. We're already on the management side, although we beefed it up significantly in the last few months, interestingly. We're not heavy there. Where we're able to find great productivity growth is in the kind of work that almost everyone in the company does. I call it administrivia, meaning people spend time finding stuff. Is it that -- is it easy to get to? Is it the right information? Do I have to open some other application to find it? We're really good and we've developed some highly specialized tools that, in fact, we'll be selling to our customers. We've already sold it to one. In the very near future, the idea is, let the system make decisions that enable people to spend more time with a customer. An example and if you wanted a vision of what it looks like, think GPS. Most of the world, in a sense, still runs their business with paper maps, if you will. And we're already into the early stages of what GPS can do. Our version of GPS, it's not how to get to a destination. It's how do you take better care of a customer. What kinds of things should you…

As far as the capital allocation strategy, your question was about M&A. I think that we saw that bank debt, with interest rates rising and we paid off that, I personally believe our stock is undervalued. So we're buying back there -- the stock back. So that helps EPS and all shareholders. As far as M&A, I mean, Randy will correct me but I think that anyone who touches or prepares food across the globe really is, to some capacity, has a FSMA 204 problem. So that's also quick-service restaurants, hospitals, schools, so on and so forth and the supply chain along the way. So if they have a service that we can bolt on or they have customers that we can buy more certainly have an appetite for M&A, if you look back 1 to 2 years with the multiples we had seen were 14x sales, we're not going to chase that. But I think that as capital becomes more constrained and the economy has more uncertainty that we're in a position that if that were one of the levers we wanted to pull at that time, we would definitely do so.

[Operator Instructions] Thank you. It appears we have no additional questions at this time. So I'd like to pass the floor back over to Mr. Fields for any additional closing remarks.

Thank you, operator. Thank you, John. Thank you, Jeff and thank all of you who took time this afternoon to listen to our earnings report. I think if I were to summarize it, we feel very, very good about where we are. We will become the dominant player in traceability and we think that's just the beginning of a series of things that will enable our business to look quite different over the next several years. So thanks for the support. And if you have questions, you guys know how to reach us. Thank you. Thanks, operator. Bye-bye.

Thank you. Bye, bye.

Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.