American Software, Inc. (NASDAQ:AMSWA) Q2 2023 Earnings Call Transcript

Vince Klinges: Yes, Zach. Yes, sometimes there are some investments on the hosting business that we have to make with Azure to kind of step up the environment. And that €“ sometimes that €“ the timing of that doesn’t correlate to when we start taking revenue on those customers. So there’s a little short-term kind of adjustment that goes on there. So we anticipate that the margins will start to tick up in the subsequent quarters.

Zach Cummins: Got it. That’s helpful. Best of luck here for the rest of the year.

Allan Dow: Thanks, Zach. Thanks for joining us.

Operator: And our last question comes from Anja Soderstrom.

Anja Soderstrom: Some of them have been addressed already. But I’m just curious, you’re talking about delaying projects, but do you also see a moderation in the size of the projects? Or is it just a matter of a delay at this point?

Allan Dow: No. Anja, thank you for joining us. No material change in the size of the projects or the scope, the relative rate of pay in that. We actually have contracts in the backlog that are under contract and slated to start in January. So that was part of the impact that we had on the subscription revenue. So those will formally kick off and get running coming in the new year. So it’s really — it’s a timing topic, not so much a size or scale.

Anja Soderstrom: Okay. And then in terms of CapEx, it picked up a bit in the first half. What have you been investing in? And how should we think about that for the remainder of the year?

Vince Klinges: Yes. Anja, this is Vince. We have 2 things. We’re actually building out our sixth floor to get ready to move our R&D folks up there to give them a better working environment. So that’s one of the things we’re investing in. And the other thing is we’re working with Microsoft to kind of restructure some of the relationship as far as how we pay for some of the services they do, where we actually did a CapEx spend and bought some licenses as opposed to having the cost in the cloud. So that’s what we did. That’s — we did that in the first quarter. So that’s — those 2 events are pretty much one-offs. So going forward, I would anticipate the CapEx spending to go down significantly.

Operator: And it appears we have no further questions at this time. I will now turn the program back over to our speakers for any additional or closing remarks.

Allan Dow : Well, thank you, everyone, for joining us. We appreciate the time this afternoon, and we look forward to speaking with you again in a few months. Have a good evening.

Operator: Thank you, ladies and gentlemen. This concludes today’s conference. You may now disconnect.