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Edited Transcript of AMBR earnings conference call or presentation 10-May-18 9:00pm GMT

Q1 2018 Amber Road Inc Earnings Call

East Rutherford May 16, 2018 (Thomson StreetEvents) -- Edited Transcript of Amber Road Inc earnings conference call or presentation Thursday, May 10, 2018 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* James W. Preuninger

Amber Road, Inc. - CEO & Director

* Staci Mortenson

* Thomas E. Conway

Amber Road, Inc. - CFO

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Conference Call Participants

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* Glenn George Mattson

Ladenburg Thalmann & Co. Inc., Research Division - VP of Equity Research

* Monika Garg

KeyBanc Capital Markets Inc., Research Division - Research Analyst

* Peter Marc Levine

Needham & Company, LLC, Research Division - Research Associate

* Thomas Michael Roderick

Stifel, Nicolaus & Company, Incorporated, Research Division - MD

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Presentation

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Operator [1]

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Good day, and welcome to the Amber Road First Quarter 2018 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Staci Mortenson, Investor Relations. Please go ahead.

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Staci Mortenson, [2]

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Thank you, operator, and thank you for joining us on Amber Road's First Quarter 2018 Earnings Conference Call. As a reminder, today's conference call is being broadcast live via webcast. In addition, a replay of the call will be available on our website following the call.

By now you should have received a copy of our press release that was distributed this afternoon. If you have not, it's available on our Investor Relations section of our website.

Before we begin, I would like to remind you that during today's call, we will be making forward-looking statements regarding future events and financial performance, including growth from our bookings and sales pipeline, client deployments, continued product demand and our guidance for our second quarter and full fiscal year 2018. We caution you that such statements reflect our best judgment based on factors currently known to us and that the actual result -- events or results could differ materially. Please refer to the documents we file from time to time with the SEC, in particular our Form 10-K, 10-Q and our Form 8-K filed today with our press release. These documents contain and identify important risks and other factors that may cause our actual results to differ from those contained in our forward-looking statements.

Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information.

We disclaim any obligation to update or revise any forward-looking statements. We will provide guidance on today's call, but will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.

During the call, we will also discuss our non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the GAAP and non-GAAP results is provided in today's press release.

The projections that we provide today exclude stock-based compensation, which cannot be determined at this time and, therefore, are not reconciled in today's press release.

With that, I'll turn the call over to our CEO, Jim Preuninger.

Jim?

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James W. Preuninger, Amber Road, Inc. - CEO & Director [3]

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Thank you. Yes, thank you, Staci.

Q1 was a very nice start to our year. We closed a range of deals with both new and existing customers and exited the quarter with larger pipelines, which improves our ability to meet our growth objectives for the full year.

Total revenues in the quarter were at the very high end of our guidance range, coming in at $20.1 million. Adjusted EBITDA was strong and ahead of our expectations at $548,000. And we generated $1.4 million in cash flow from operations.

We continue to meet our revenue goals while delivering sustainable levels of profit and cash flow. This marks the third quarter in a row that Amber Road has produced positive adjusted EBITDA.

We're operating in a time of increasingly complex global trade regulations, new and ever-changing free trade agreements and growing anxiety amongst industry participants concerning trade policy by leading nations. Consequently, importers and exporters have a far more difficult task today of managing global suppliers and adjusting to supply chain shifts than ever before. Just listen to the news regarding tariff changes or the seesaw negotiations between nations for free trade agreements, and you start to understand that the level of complexity and the velocity of change are at a level that we have never experienced on a global basis before.

In a typical year, Amber Road might make between 12 million and 13 million changes to our Global Knowledge database, which is our proprietary knowledge base comprised of a vast library of rules, regulations, schedules, rates and other information and requirements that enables our customers to automate global trade functions across more than 150 countries.

To demonstrate how frenzied the world of trade has become, so far this year, we have made 6.5 million updates to Global Knowledge, and we don't see this pace of change slowing down anytime soon. Amber Road is completely unmatched in our ability to integrate software with trade content on this scale. The conclusion is customers need us more than ever.

We see continued demand for automating free trade agreements, which remains a growing part of our business. By automating free trade agreements, our customers can reliably comply with government regulations and save millions of dollars in reduced taxes and duties. We now support more than 170 free trade agreements, and we expect that number to continue growing. We are today the only GTM vendor in the marketplace with this level of FTA support by a long-shot.

As we discussed last quarter, 1 of our key 2018 objectives is to continue to invest in product innovation to take advantage of new trends and invest alongside key customers. Our Global Knowledge and free trade agreements are an important part of that, and I just talked to those initiatives. We're also working to bring new modules and content plug-ins to market through several large projects that are sponsored by key customers.

Lastly, blockchain is a very important trend and an area that we have been investing in with a few key industry partners. We firmly believe that this technology applied to the global supply chain market will be a significant disruptor that will benefit Amber Road and our customers over time. This effort is still in the R&D stage as we are working in our labs to integrate our GTM functions with blockchain technology.

As we look to expand our solution footprint, we're also investing to extend our market reach in key verticals. I'm pleased to announce that we just released the focused solution of our export compliance software for universities and research groups. Amber Road's Export On-Demand University & Research Edition is specifically designed to help colleges and universities with scientific research programs, foreign visiting researchers, foreign students, international research collaborations and overseas campuses to manage their export and deemed export compliance programs, license requirements and product classification. Supported by Global Knowledge database, this solution will help improve operational efficiency, enhance regulatory compliance and reduce export risk that colleges and universities face. These risks include substantial fines, the loss of critical funding for projects and damage to an institution's reputation. We're now delivering a product that is tailor-made to the unique needs of this vertical, and we believe that will open the door for Amber Road to over 1,000 universities.

Each quarter, I share with you a selection of new or expanding customer relationships and the value proposition we deliver to them. I'd like to share a few more that are relevant in showing our ability to serve customers across many industry verticals and geographies.

Deckers Brands is a footwear designer and distributor based in California. Their portfolio of brands includes UGG, Teva, Sanuk, HOKA ONE and Ahnu. Deckers products are sold in more than 50 countries and territories through select department and specialty stores, 138 company-owned and operated retail stores and select online stores including company-owned websites. Deckers recently subscribed to our supply chain collaboration solution to gain improved visibility and control with their Tier 1 and Tier 2 suppliers. Specifically, they wish to track and manage raw material purchase orders issued by their Tier 1 manufacturing facilities with Tier 2 material suppliers to ensure that each raw material supplier has appropriate capacity to support Deckers' needs. Through our technology, Deckers will reduce their raw material spend, manage exceptions on a more timely basis, improve product quality and increase their profitability.

Chico's, FAS, Inc. is a leading omnichannel specialty retailer of women's private branded, sophisticated, casual-to-dressy apparel, intimates and complementary accessories. They operate under brand names that include Chico's, White House, Black Market and Soma. Chico's operates 1,460 stores, that's across 46 states, and sells merchandise through 94 franchise locations in Mexico. This new customer selected Amber Road to digitize and automate their supply chain. They will be implementing our supply chain collaboration suite to optimize global sourcing and to automate the flow of orders with suppliers, factories, agents and logistics service providers. They'll also implement our Supply Chain Visibility solution to track inbound shipments. With Amber Road, Chico's hopes to improve fill rates, increase their gross margins, lower transportation costs, reduce cycle stock inventory and cut cycle times.

3M is an American multinational conglomerate corporation who subscribed to our trade automation platform to ensure their export operations comply with ever-changing global regulations, including restricted party screening, export license determination and shipment document generation. Their payback on this investment will be achieved by eliminating manual processes.

Finally, GEODIS Contract Logistics is a division of GEODIS, an existing customer for Amber Road in France, that already subscribes to 4 of our solutions. Our work with this division of GEODIS provides another good example of our ability to grow with our installed base. GEODIS Contract Logistics runs the global shipping services for eBay and Amazon, including cross-European express delivery for e-commerce orders. Currently, GEODIS struggles with a host of issues concerning a legacy solution, which requires considerable manual interventions for customer onboarding, data cleansing, process monitoring and reporting. To solve these problems, GEODIS Contract Logistics will subscribe and implement our Supply Chain Visibility solution to manage delivery of more than 20 million packages on an annual basis.

I'm pleased with the start of our year, and I firmly believe we are building a business that can meet our revenue goals while delivering sustainable levels of profit and cash flow.

With that, let me turn the call over to Tom.

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Thomas E. Conway, Amber Road, Inc. - CFO [4]

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Thanks, Jim.

I'll start with a detailed overview of our first quarter 2018 financial performance and then provide some commentary on our second quarter and full year 2018 outlook. Following my closing remarks, we will open up the call to questions.

As a reminder, we adopted ASC 606, revenue from contracts with customers, on a modified retrospective basis with an effective date of January 1, 2018.

With that in mind, regarding the first quarter results. Beginning with the statement of operations, we generated GAAP revenue in the quarter of $20.1 million compared to $18.6 million in the first quarter of 2017. Subscription revenue was $15.1 million, an increase of 9% compared to $13.9 million in the prior year period. Our professional services revenue was $5 million, which compares to $4.7 million in the same period a year ago.

Our trailing 12 months recurring revenue retention rate for the first quarter of 2018 was 103%, again reflecting the long-term value of our customer relationships and giving us a high level of revenue and billings visibility.

On a GAAP basis, our gross profit was $10.6 million or 53% of total revenue compared to $9.2 million or 49% of total revenue in the prior year period. Subscription gross profit was $9.9 million or 65% of subscription revenue compared to $8.5 million or 61% of subscription revenue in the first quarter of 2017. Our gross profit on professional services was $716,000 or 14% of professional services revenue and was impacted by the timing of some projects in the first quarter. This amount compares to $632,000 or 14% of professional services revenue in the same period last year. Our expectation is that our professional services margins will approach 20% in the second quarter and remain at that level for the entirety of fiscal 2018.

I'll now discuss our Q1 operating expenses. On a GAAP basis, total operating expenses were $13.3 million compared to $13.1 million in the first quarter of 2017. Along with our revenue growth, this expense level resulted in first quarter GAAP operating loss of $2.7 million compared to a GAAP operating loss of $4 million in the first quarter of last year. On a non-GAAP basis, our Q1 operating loss was $736,000, an improvement compared to an operating loss of $2.7 million in the year-ago period.

Non-GAAP operating loss for the first quarter of 2018 excludes stock-based compensation. Our GAAP net loss was $3.2 million for the first quarter of 2018. This compares to a GAAP net loss of $4.4 million in the prior year period. GAAP net loss per share was $0.11 in the first quarter of 2018 compared to a net loss per share of $0.16 in the first quarter of 2017. These per share amounts are based on 27.6 million and 27.2 million shares outstanding, respectively. On a non-GAAP basis, net loss improved to $1.2 million for the first quarter of 2018. This compares to non-GAAP net loss of $3.2 million in the prior year period. Non-GAAP net loss per share was $0.04 in the first quarter of 2018 compared to a net loss per share of $0.12 in the prior year period. These per-share amounts are based on 27.6 million and 27.2 million shares outstanding, respectively.

We're pleased to report another quarter of positive adjusted EBITDA, with the first quarter coming in at a positive $548,000, an improvement compared to an adjusted EBITDA loss of $1.2 million in the same period last year.

Turning attention to the balance sheet. As of March 31, 2018, we had cash and cash equivalents of $9.3 million compared to $9.4 million as of December 31, 2017. Our deferred revenue was $36 million, down 9% sequentially and down 4% year-over-year. Our deferred revenue was negatively impacted by a $3.2 million reduction due to ASC 606. Cash flow from operations in the first quarter of 2018 was $1.4 million, an improvement compared to $793,000 in Q1 of 2017.

Turning to guidance. I would like to note that our guidance is based on the modified retrospective adoption of ASC 606. Our expectations of non-GAAP loss from operations and non-GAAP loss per basic share for the second quarter and full year excludes stock-based compensation. I'll start with our thoughts on the second quarter of 2018. Total revenue in the second quarter of 2018 is expected to be in the range of $20.4 million to $21 million.

Non-GAAP adjusted operating loss is expected to be in the range of $1.8 million to $1.2 million. Non-GAAP adjusted net loss per share is expected to be in the range of $0.08 to $0.06. These per-share amounts assume 28 million basic shares outstanding. From a 2018 full year perspective, we continue to expect total revenue in the range of $84 million to $87 million. We now expect non-GAAP adjusted operating loss to improve and be in the range of $5.3 million to $2.3 million. Non-GAAP adjusted net loss per share is now expected to be in the range of $0.26 to $0.15, assuming 28.5 million basic shares outstanding. We also expect to continue to generate positive cash flow from operations in 2018.

Our full year revenue guidance at the midpoint assumes double-digit subscription revenue growth of around 10%. This guidance also reaffirms our commitment to managing the business for stronger revenue growth while generating positive cash flow from operations and adjusted EBITDA and continuing on a path toward non-GAAP profitability.

With that, operator, please open the line for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We will take our first question from Tom Roderick with Stifel.

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Thomas Michael Roderick, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [2]

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So I guess I'll start with a high-level picture which you -- it seems you can't discuss global trade right now without discussing perhaps the impact of a looming trade war with China and what that might mean for global trade. How do you guys think about the puts and takes of that for your business? Any impact yet that you can see or any impact to the pipeline? I'd love to hear your thoughts on that.

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James W. Preuninger, Amber Road, Inc. - CEO & Director [3]

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Our pipeline has grown so far this year. So we continue to see some larger opportunities coming into the pipeline and really across the geographies and industries we serve. So it doesn't seem to be negatively impacting pipeline development, and we had a good bookings quarter and our expectation, our forecast for Q2 is really good. That said, I spoke in my script about, I think, the level of change and the level of uncertainty, and it's driving a lot of conversations and making for a lot of anxiety with folks that maybe thought they had trade understood. And so now they're asking more questions. And we think with that over time, they start to understand that they need help. And automation, our Global Knowledge database, our experience level and understanding in automating some of these things, I think, is the help that they need. So long term, this thing plays out really well for us. I think in the near term, there are probably some puts and takes, but we're going to manage through that.

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Thomas Michael Roderick, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [4]

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Fair enough. That's helpful. And then second question here for you, Jim. Just following up on your last quarter call, you talked about the idea of being able to roll out blockchain-based solutions, and you had mentioned briefly there's an opportunity here more in the near term to start integrating your solutions with blockchain. Can you talk a little bit more about what does that mean? What -- technically, what does that mean to integrate with blockchain? What do you have to do? Is that a pretty expensive type of proposition? And how lengthy do you think that could be before you get something to market?

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James W. Preuninger, Amber Road, Inc. - CEO & Director [5]

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Well, Tom, thanks for that question. There are 10 projects really under way. And what we're looking to do is to have a stream of deliverables that would come out over time. We'll start small. We'll start with something that will have broad appeal, hopefully quick adoption, and something that we, once established, there's a foundation we can start to build on, right. It will be a change for some people, but I think if we make it easy, we make it affordable, if we have, I think, the right partners and the right kind of global reach for this type of solution, that in time it could really take off for us. But we're being cautious about setting expectations, and we haven't, of course, baked any of this into any of our bookings or revenue forecasts for 2018. But we're spending a fair bit of time in the labs with our engineers and our product managers working through the issues that you have with development. Now we're not building new products from the ground up. I mean, we're really taking existing capability we have with our trade solutions and finding ways of breaking them down into some smaller bite-size chunks and then integrating them securely into a blockchain. So it's more focused. I think it's less risky. It's less expensive. And it's something that we can do a little faster.

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Thomas Michael Roderick, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [6]

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Great. Tom, I've got a real quick one for you, a fun 606 question. You mentioned the deferred gets a $3.2 million reduction due to ASC 606. Is that largely services revenue or services deferred that was held on the balance sheet? Maybe you could talk a little bit more about why that is. And then for the rest of the year, the impact of 606, it seemed pretty minimal, particularly to the revenue, but really not much there on the margin front either. How should we think about how it impacts the rest of your year with respect to your guidance?

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Thomas E. Conway, Amber Road, Inc. - CFO [7]

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Yes. Thanks, Tom. So a couple things. The deferred revenue impact for Amber Road is almost entirely professional services related. So we had professional services that the billings were being amortized over a subscription term, which, in Amber Road's case, could be multiyear, right. So -- and with the change to ASC 606, that went away and was part of our opening adjustment on January 1, 2018. So throughout the quarter, with the puts and takes on losing amortization of revenue, deferred revenue gets written off and it's a $3.2 million impact. What we'd like to do going forward is just simply keep everybody on a 606 basis. We're going to guide to 606. In our 10-Q, there will be a reconciliation to what 605 would have been. But we prefer -- and I think folks in your seat understand hopefully enough about 606, I believe you do, that we can just talk in 606 terms going forward.

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Thomas Michael Roderick, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [8]

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And just to be clear on that amortization schedule that goes away, that's your opening adjustment for the year, that $3.2 million that would have otherwise been recognized as revenue, that will not be. So over time, whether it's multiyear or not, that $3.2 million just goes away, but it won't all be this year, correct?

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Thomas E. Conway, Amber Road, Inc. - CFO [9]

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Right. If you recall, when we did our prior earnings call and press release in February, we detailed out that $2 million of that $3.2 million roughly would have come through here in 2018. The balance would have been in '19 and even a tail end to 2020.

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Operator [10]

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And we'll take our next question from Scott Berg with Needham Investments.

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Peter Marc Levine, Needham & Company, LLC, Research Division - Research Associate [11]

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This is Peter Levin in for Scott. First question, Tom, so you kept -- on guidance, so you kept the revenue basically flat, but you've increased your profitability. Can you kind of talk about where those kind -- where that leverage is coming from?

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Thomas E. Conway, Amber Road, Inc. - CFO [12]

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Yes. Thanks, Peter. So we saw good leverage in a number of our expense lines. But as you know, our subscription margins sequentially and year-over-year continue to improve. And that's really -- the benefit is coming from things like our Global Knowledge database Jim talked about in his comments, the amount of updates in that database. But as you know, it's more of a fixed cost for us, and the ability to resell those wonderful free trade agreements and other components of the Global Knowledge database are helping us on the sequential and year-over-year margin in subscriptions. And also, we're seeing other benefits in our hosting arrangements, in our support operations and just really seeing the levers kick in.

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Peter Marc Levine, Needham & Company, LLC, Research Division - Research Associate [13]

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Should we expect kind of a high 66, 66-plus for the remaining of the year?

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Thomas E. Conway, Amber Road, Inc. - CFO [14]

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Yes, that sounds -- on subscriptions, yes, that sounds right.

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Peter Marc Levine, Needham & Company, LLC, Research Division - Research Associate [15]

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And Jim...

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Thomas E. Conway, Amber Road, Inc. - CFO [16]

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We do have -- if -- we don't really guide for transactional revenue. But if we have that, that could impact it to the positive, so.

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Peter Marc Levine, Needham & Company, LLC, Research Division - Research Associate [17]

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Okay. And then, Jim, I think last quarter, you talked about investing in kind of a broader sales distribution channel with partners here in '18. Can you kind of talk about some of the progress? And if there's any traction, are you having any of that kind of baked into guidance? Or would that just kind of be upside?

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James W. Preuninger, Amber Road, Inc. - CEO & Director [18]

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No, no. That -- these are -- this is a project we have this year to establish some new channels in Asia, in some markets that we occasionally sell new customers into, but we don't have a direct presence for. So it's a project to find some of the right partners that can help us resell or support some new customers in those geographies. And I think it's something that we'll bake into our '19 plan, but we don't have anything in our '18 plan other than the work to go out and identify and establish these relationships. And we're under way with that. It's not -- we're not starting from a cold start, if you will, but it's -- it takes a while. I think, well, just like hiring new sales folks, it takes a while to identify the people, get them trained, get marketing programs in that geography and get them productive. So we're going to do the legwork this year and see the benefits next.

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Peter Marc Levine, Needham & Company, LLC, Research Division - Research Associate [19]

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Great. And just a quick one, final. I think it's been a couple of quarters since we talked about it, but any updates on the U.S. Postal deal?

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James W. Preuninger, Amber Road, Inc. - CEO & Director [20]

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The deadline for their compliance with some new regulations continues to be extended, and with it, so is our work and projects with them. So it's not something that's a big line item in our '18 plan right now.

We do -- beyond U.S. Postal, I mean, you should know we have, I think, 6 or 7 other postal groups around the globe that we've signed up with. But they're all kind of marching to that same slow drum, right. We're happy to support. Now over the long term, I think this is -- it's going to be interesting for us, but it's not a big mover for us in 2018.

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Operator [21]

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We will take our next question from Monika Garg with KeyBanc.

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Monika Garg, KeyBanc Capital Markets Inc., Research Division - Research Analyst [22]

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Just first on the guidance. If I look at your Q2 guidance, it looks like subscription growth first half of this year is about 8%, 9%., but in the back half, to get to 10% growth, it probably has to go to like low teens percentage. Could you talk about the confidence level in some increase in subscription growth here from first half to second half?

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Thomas E. Conway, Amber Road, Inc. - CFO [23]

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Yes, thanks, Monika. So our ability to close on business in the first half is really what gives us a large part of that confidence for the full year. And we had a good year, a good quarter in Q1. We have good visibility in Q2 on our pipeline and backlog as to what we're going to close. Those 2 quarters are obviously going to contribute the large -- the lion's share of the revenue from new bookings. We continue to maintain our customers at 103% recurring revenue retention. So again, the visibility on the installed base is very high for us. So when we put those 2 together, that gives us the confidence to say that we should be in that 10% range on a full year basis.

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James W. Preuninger, Amber Road, Inc. - CEO & Director [24]

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But you're right, Monika, it will grow faster in the second half of the year, and a lot of that is some visibility we have not just with the bookings but some prior business that was booked with some deferred start date. So it's a good plan for us.

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Monika Garg, KeyBanc Capital Markets Inc., Research Division - Research Analyst [25]

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All right. Then Tom, just a housekeeping question here. Subscription margins were slightly lower Q-over-Q. Could you just help me understand those?

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Thomas E. Conway, Amber Road, Inc. - CFO [26]

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Yes. So we can -- as I said in one of the prior calls, if we have some transactional revenue or depending on how material it is, that can impact the gross margins because it truly is a 100% margin. And I think that's what we saw quarter-over-quarter sequential.

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Monika Garg, KeyBanc Capital Markets Inc., Research Division - Research Analyst [27]

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All right. Then the last one here. Jim, you talked about complexities, uncertainties with global trade. And that, of course, keeps on increasing. So why are we not seeing kind of faster growth because of more complexity, uncertainties in the global trade environment?

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James W. Preuninger, Amber Road, Inc. - CEO & Director [28]

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Well, Monika, I think we are increasing our bookings and revenue growth on the subs line. It's a measured pace. We're selling to very large companies that have processes that they go through to make these kinds of changes. They're substantial. They reorganize their business. They changed the way the interface with their suppliers, where they manage their supply chain. They're very careful about it. So I think people are excited about the value props that we can demonstrate with installed customers. I think there is anxiety about how to manage supply chains given what's going on in the world. But people don't rush to make mistakes. They take their time to do it right. And I think over the long term, that's good for us because we'll have good customers with prudent ideas, with good expectations, with appropriate budgets. And in a fast world, it's important that we get everybody up and live, productive and happy so that we ensure that 103% recurring revenue retention rate. And so it's really a balancing act between all of those factors, Monika.

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Operator [29]

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We will take our next question from Glenn Mattson with Ladenburg Thalmann.

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Glenn George Mattson, Ladenburg Thalmann & Co. Inc., Research Division - VP of Equity Research [30]

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Most of my questions have been asked. But Tom, I missed what you said perhaps with regards to profitability being a little bit better than expected. The one line that stood out to me was R&D kind of down year-over-year and sequentially. Was there any headcount reduction there? Or what's going on with that number?

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Thomas E. Conway, Amber Road, Inc. - CFO [31]

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No, I think our true checkbook spend in R&D is pretty consistent to slightly up year-over-year. I think what you may have seen is a little bit more of what -- sweet spot on a lot of the things we're building in -- on our road map. So the capitalized development was a bit higher. But I like to add those 2 numbers together when I truly want to look at what my R&D spend is. So I pick up the P&L component and the cash flow component.

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Glenn George Mattson, Ladenburg Thalmann & Co. Inc., Research Division - VP of Equity Research [32]

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Right. Okay, that makes sense. And then, Jim, was 3M a new customer or existing?

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James W. Preuninger, Amber Road, Inc. - CEO & Director [33]

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It's a new customer.

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Glenn George Mattson, Ladenburg Thalmann & Co. Inc., Research Division - VP of Equity Research [34]

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And you did mention -- you mentioned them, but you didn't call it out as like a big win. But given the size of that customer, I imagine this is perhaps an early-stage win with a hope for up-sell over time?

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James W. Preuninger, Amber Road, Inc. - CEO & Director [35]

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It's a single-module deal, which you know in the enterprise is somewhat rare for us. Usually, when we're selling to folks, we're getting out of the gate with 3, 4, 5 modules at a time now. So I think there's probably plenty of opportunity.

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Operator [36]

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At this time, there are no further questions. Mr. Preuninger, I will turn the conference back over to you, sir, for any closing comments.

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James W. Preuninger, Amber Road, Inc. - CEO & Director [37]

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Well, thank you, operator.

In closing, I'd just like to express my appreciation for your support, and I look forward to speaking with everyone again. And we'll close the call with that.

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Operator [38]

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Ladies and gentlemen, this will conclude today's conference call. We thank you for your participation, and you may disconnect at this time.