Model N, Inc. (NYSE:MODN) Q1 2023 Earnings Call Transcript

Jason Blessing: Thanks Joe.

Operator: We have time for one last question. Our next question comes from the line of Brian Peterson with Raymond James. Please proceed with your question.

Johnathan McCary: Hey, this is Johnathan McCary on for Brian. Thanks for taking the question. So with the SaaS transition driving a lot of the recent growth, I’m just kind of curious qualitatively how you see that trending after the sunsetting of on-premise solutions. Do you guys anticipate investing more into sales and marketing post that transition narrative? Or how are you thinking about balancing margins and growth there? Thanks.

Jason Blessing: Yes. Thanks for the question, Johnathan. I mean, there’s a couple of things I would say there. As we reported throughout the balance of last year, we have hit a tipping point where the majority of our bookings are actually coming from things other than SaaS transitions, and it’s really reflective of two things. One, the strong product portfolio we have and the white space opportunity to sell more broadly into a customer who has gone through a SaaS conversion; and then, of course, the new logo opportunities. So we really have seen that. I would argue that tipping point really hit last year. And then as John noted in one of the answers to the prior questions, we have been selectively investing in sales and marketing for life after SaaS transitions. And when you put that with the product component that I just talked about, that really is what’s driving the business today.

Johnathan McCary: Got it. Thanks.

Jason Blessing: Thank you.

Operator: That concludes our question-and-answer session. I’d like to turn the call back over to Jason Blessing for closing remarks.

Jason Blessing: Thank you, operator, and thank you to everyone for joining us today. As we discussed on today’s call, Model N started our fiscal year 2023 with a good quarter and once again delivered strong profitable growth. John and I are going to be out on the road at several investor events this quarter and look forward to seeing many of you in person. Thanks again for joining today, and have a great night.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time. And have a wonderful day.