Financial Data and Key Metrics Changes - Revenue for Q2 2026 was $51.5 million, reflecting a sequential growth of 1.2% and a 2% decrease year-over-year on a like-for-like basis after excluding $6.4 million from the divested VoIP Supply [21] - Adjusted EBITDA was $8.3 million, maintaining a margin of 16%, with a strong conversion rate of adjusted EBITDA to operating cash flow at over 120% [6][18] - Free cash flow improved sequentially to $8 million, or $0.24 per diluted share, with a total debt reduction to $37.6 million from $60.4 million a year ago [19][20] Business Line Data and Key Metrics Changes - Service revenue, which constitutes 92% of total revenue, grew 1% sequentially, driven by higher cloud services revenue [21] - Monthly Recurring Revenue (MRR) bookings grew significantly, up 67% sequentially and 60% year-over-year, indicating strong momentum in the mid-market strategy [7][13] - The churn rate improved to just under 1%, reflecting stability in the recurring revenue base [7][21] Market Data and Key Metrics Changes - The starting backlog for Q3 is up approximately 125% compared to the start of Q2, providing strong visibility into the second half of the year [18] - The company is seeing increased engagement with larger, more complex mid-market opportunities, which is expected to lead to higher long-term value and stronger recurring revenue [8][10] Company Strategy and Development Direction - The company is focusing on scaling its go-to-market engine and investing in pipeline development, customer acquisitions, and partner enablement [9][10] - There is a strategic shift towards fewer vendors and more integrated solutions, with an emphasis on serving the mid-market [10][11] - The company is committed to maintaining a balanced approach to capital allocation, reducing debt, and pursuing selective M&A opportunities aligned with its strategy [9][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, highlighting the effectiveness of the go-to-market execution and the quality of the pipeline [13][18] - The company anticipates returning to year-over-year organic growth in Q3 and Q4, excluding the impact of the VoIP Supply divestiture [21][54] - Management is focused on reducing churn and enhancing customer retention as part of its revenue strategy [48] Other Important Information - The company has committed approximately $2 million in incremental SG&A to accelerate growth initiatives [9] - The gross margin improved to 74%, up from 72% in Q1 and 68% in the prior year, indicating a favorable revenue mix [21] Q&A Session Summary Question: What are the key drivers behind the 67% quarter-over-quarter growth in MRR bookings? - Management attributed the growth to larger strategic deals and a healthy partner program that is effectively targeting larger logos [24][25] Question: Is the 67% growth sustainable, or is it a special quarter? - Management indicated that the growth is part of a transition into a growth phase, with expectations for continued growth in the booking pipeline [26][28] Question: Can you elaborate on the wholesale activity and its potential for growth? - Management discussed the wholesale channel's role in monetizing large ecosystems, emphasizing the integration of services for larger clients [29][30] Question: How is the partner ecosystem performing in terms of bookings growth? - Management noted that the majority of revenue is partner-driven, with a focus on strategic partners and the effectiveness of bundled solutions [68] Question: What is the outlook for the on-prem component of the pipeline? - Management reported strong momentum in the on-prem business, particularly in small to medium-sized businesses, with expectations for continued growth [71][72] Question: How does the company plan to convert bookings to revenue? - Management explained that larger deals take time to roll out, but they have established a disciplined project management process to ensure timely revenue recognition [75][76]

Financial Data and Key Metrics Changes - The company reported a 6% growth in top line revenue, with volume growth across all segments: retail up 5%, foodservice up 7%, and international up 6% [4] - Despite the top line growth, the bottom line was negatively impacted by escalating cost pressures that exceeded expectations [5] - The company anticipates continued pressure on the bottom line for Q4, with a similar outlook as Q3 [6] Business Line Data and Key Metrics Changes - Retail segment experienced a 5% growth, foodservice segment grew by 7%, and international segment saw a 6% increase [4] - The company is focusing on strategic pricing actions in response to commodity cost pressures, particularly in the foodservice and retail segments [10][14] Market Data and Key Metrics Changes - The foodservice industry is facing traffic pressure, with consumers not visiting channels like QSRs and convenience stores as frequently [36] - Retail consumers are trading down to lower-priced alternatives, leading to significant growth in private label products [37] Company Strategy and Development Direction - The company is focused on modernizing its portfolio and operations through the Transform and Modernize initiative, which aims to yield efficiencies and savings [32][56] - There is an emphasis on strategic pricing actions to manage commodity inflation while maintaining consumer engagement [14][39] - The company aims to leverage its unique protein-centric portfolio to meet evolving consumer demands for convenience and value [30][42] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer sentiment remains low due to inflationary pressures, leading to cautious consumer behavior [35] - The company is optimistic about its ability to drive both top line and bottom line growth by 2026, with ongoing initiatives to improve operational efficiency [6][70] Other Important Information - The company is reviewing its SG&A spending, which has increased significantly without corresponding sales growth, indicating potential areas for cost optimization [25][26] - The Transform and Modernize initiative is expected to deliver benefits beyond the initial three-year target, with a focus on long-term growth [56][58] Q&A Session Summary Question: What are the key focuses for the interim CEO and President moving forward? - The interim CEO emphasized the importance of achieving net sales growth of 2-3% and operating income growth of 5-7%, while also focusing on the building blocks for a successful 2026 [24][25] Question: How is the company addressing pricing challenges in different segments? - The company is implementing strategic pricing actions in both foodservice and retail segments, with a focus on understanding consumer elasticity and brand strength [12][14] Question: What is the current status of the Transform and Modernize initiative? - The initiative is on track, with 90 projects executed in Q3 alone, and is expected to continue delivering value and efficiencies [56][58] Question: What are the capital allocation priorities for the company? - The company prioritizes increasing dividends, strategic M&A opportunities, and expanding its global footprint, while being disciplined in its capital allocation strategy [62][64]