George Sutton: Perfect. Thank you.
Operator: Thank you. One moment for our next question. Once again, one moment for our next question. All right, and our next question will come from the line of Brian Schwartz from Oppenheimer. Your line is open.
Ari Friedman: Hi, this is Ari Friedman sitting in for Brian Schwartz. Thanks for taking my question, and congrats on the quarter. I remember speaking about management companies — mid-size management companies, and the opportunity there. And I was wondering what’s like the usual product or module that they land with, and how does this compare to, say, like, your other customers you currently have, and where do you see the opportunity ahead there?
Ramesh Srinivasan: Yes, hi, Ari. So as far as mid-size management companies, that is one area we continue to make good progress. I would say a good majority of the sales deals we are involved in with such companies tends to be on the point of sale, POS side. And they tend to use the PMS that is suggested or recommended by the various brand names whose brand name tends to be used in those properties. So the best way I would describe it is our progress with midsize management companies continues to improve. We are talking to more and more of them who are keen on looking at our latest product versions. It tends to be more on the POS side at the moment, and the PMS side continues to improve.
Ari Friedman: Got it, thanks. And then I guess like one other question is, you guys talked about strength in POS as well this quarter and last. I was wondering if you could like compare it to like maybe like a baseball analogy. What inning would you say we are in terms of like the growth and how much is left for POS?
Ramesh Srinivasan: Oh yeah, I mean there’s a lot of growth, Ari, left for POS. We are doing well with POS. The competitive advantages of POS have been established with all the rewriting and reengineering we have done. We seems to be — we seem to be ahead of the competitors as far as POS is concerned because we’ve had a long track record with it, well established product, lot of good stories in the field. So POS has been a strength of ours and it continues to improve, but market share wise, our POS market share is still very low in many areas. So there’s just a lot of growth ahead on the POS side, though we are a bit more mature in how we compete in the market. On the PMS side, all the product re-engineering work is done. We’ve also created like 20 additional modules that are adding a lot of value, but we still have more field work to get done.
The product work is done, but as far as establishing the PMS products in the field, having more customers sing the praises of the products, that I would say we are very early in the baseball game. We are in the first or second inning there and that still has to improve. POS were well established, high competitive strength, but still low market share in many areas, both geographical and sales verticals. PMS, all the product work is done. We are in the early stages of establishing ourselves in the field.
Ari Friedman: Awesome. Thank you so much.
Ramesh Srinivasan: Thank you, Ari.
Operator: One moment for our next question. And our next question comes from the line of Nehal Chokshi from Northland Capital Markets. Your line is open.
Nehal Chokshi: Thank you. And a great quarter. Nice to see this big revenue and a big guidance uptick. It sounds like this is being driven by an earlier and expected turn on of some large implementations rather than better-than-expected ACV in the September quarter. Is that correct?
Ramesh Srinivasan: No, Nehal. I would not say that it’s correct. The subscription revenue growth was driven by a couple of large projects that went live and our revenue recognition, we only recognize the revenue after they go live. But that has got nothing to do with the sales progress we talked about. The sales progress has been broad-based. It has been particularly high in the resorts and cruise ships and hotels, that space, but gaming casinos continues to do very well. FSM continues to improve, and we had our best half of sales internationally ever before — than ever before. So sales is broad-based across all our verticals, but subscription revenue growth, the sequential growth this quarter, was driven by a couple of large implementations that went live that we have been working on for quite some time.
Nehal Chokshi: Okay, so to be clear, the main reason why you’re raising guidance is because you did have a really strong ACV bookings quarter within the September quarter?
Dave Wood: Yeah, Nehal, we have a strong sales quarter and even despite the large revenue increase, I mean, keep in mind our backlog is still at near record levels. I mean, it’s for most of our product lines, it’s within the, it’s either number one, two, or three as far as record level. So despite the good revenue quarter, there wasn’t a depletion in the backlog, which sales has gone really well as well.
Nehal Chokshi: Okay. So maybe an additional factor is that the rate of implementation has improved better than expected and that’s also a factor in the rate guidance?
Ramesh Srinivasan: Yeah. In the revenue doing well, subscription revenue doing well, recurring revenue doing well, the fact that implementation efficiencies are increasing, Nehal, because we had a lot of new products to establish on the field, we are getting more fluent with implementing those new products. We are also getting more adept at dealing with multi-product complex implementations. So yes, all that is contributing to recurring revenue. But us increasing the guidance of revenue also has to do with our sales doing very well and winning new opportunities at a faster pace.
