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Hi, welcome to the Evolve technologies first quarter earnings results. At this time all participants are in listen only mode. Later there'll be a question and answer session. Instructions will be given at that time. Please limit yourself to one question and one follow up. If you need assistance during the call, please press star than zero. As a reminder, this conference is being recorded. I'd like now to turn the conference over to our host, Brian Morris, Vice President of Investor Relations for evolve technologies. Please go ahead, Dan. Good afternoon, everyone. And welcome to the call. I'm joined here today by Peter George, our chief executive officer in Monterey levels our chief financial officer and chief risk officer. afternoon after the market closed, we issued a press release announcing our first quarter results in our business outlook 22 press releases available on all major news outlets as well as on the IR section of our website. During today's call, we will make forward looking statements within the meaning of section 27 A of the Securities Act of 1933 section 21 E of the Securities and Exchange Act of 1934. And the safe harbor provisions of the US private securities litigation Reform Act of 1995 that relate to our current expectations and views of future events, including but not limited to statements regarding our ability to meet our business outlook for revenue and profitability. Our forward looking statements are subject to material risks, uncertainties and assumptions, some of which are beyond our control. actual events or financial results may differ materially from those simply from these forward looking statements as a result of a number of risks and uncertainties including without limitation. The risk factors set forth under the caption risk factors of our annual report on form 10k for the year ended December 31 2021 as filed with the SEC on March 28 2022. And another documents filed with or furnished to the SEC from time to time. forward looking statements made today represent our views as of May 11 2022. Will be believed that the expectations reflected in the forward looking statements are reasonable. We cannot guarantee that future results levels of activity performance and events and circumstances reflected in those forward looking statements will be achieved or will occur except as may be required by applicable law. We disclaim any obligation to update them to reflect future events or circumstances. Our commentary today will also include certain non GAAP financial measures including adjusted gross profit, adjusted gross margin, adjusted EBITDA and adjusted earnings, which we believe provides additional insight for investors in evaluating ongoing operating results and trends. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. reconciliations between GAAP and non GAAP metrics for our reported results can be found in our press release issued today. Please note that our definition of these measures may differ from similarly titled metrics presented by other companies.

Before I turn things over to Peter, let me briefly highlight a few of our upcoming investor relations activities. On Wednesday, June 1, will be in New York for the talent Technology Conference. And on Tuesday, June 7 will be at the steeple investor conference in Boston. If you are planning to attend either event, and are interested in meeting with the management team, please let me know that I'd like to turn the call over to Peter. Peter. Thanks, Brian. And thank you everyone for joining us today. Pleased to share the highlights from the first quarter as well as the trends we're seeing in our business. As the leader in AI based weapons detection. We continue on our important mission of making everywhere and everyone safer every day. We're redefining how people think about security, and we are enabling our customers to create a safe and frictionless experience for all those gathering again, the secular trends that demand that new kinds of security has become the urgent need for our society today. Evolve exists to meet that need and moment we find ourselves now in we started the year with a strong first quarter results which we believe position us well to deliver on our full year growth plans. The key takeaways are as follows. Revenue was 8.7 million in the first quarter of 27% sequentially, and 118% year over year, primarily driven by strong demand and our key verticals, an increase in purchase subscription deals, and a continuing momentum with our channel partners. We added over 40 new customers in q1, a new company record including key wins at the Charlotte Mecklenburg School District in North Carolina, the AON Arena in the UK, Dollywood theme park and hard rock International and the New England Patriots of the NFL our total contract value of orders both were TC V 19 point 2 million in the first quarter of 7% sequentially, and 128% year over year. As we shared on our last earnings call. q1 got off to a slower start due to the surge of COVID 19 cases from the Omicron variant. And it's lingering impact on both sales and installation activity. That said, we began to see signs of improving conditions in March and we now believe the headwind caused by Omicron is behind us, though we're keeping a close eye on any for further evolving stuff. Barians. We deployed 207 units and other company record in the first quarter, which drove an increase in the number of subscriptions of Evolve Express from 703 at December 31 2021 to 910 at the end of the first quarter. The strong activation activity reflected our ability to catch up and operationalize the unusually high installation backlog that we had as of December the 31st. Then it would not surprise us to see installation activity. We see it a bit here in q2. But we believe we're tracking well to our goal of 1400 to 1500 subscription by the end of the year, which would further strengthen our market moat. Our primary focus continues to be on the US based facility operators. I'm pleased to report that 50% of our bookings activity in the first quarter came from our international markets and area which we are starting to

explore. We just surpassed 250 million visitors screen. We are now screening more than 500,000 people every single day. And every one of those scans enriches our product capabilities and analytics and underscores our technological lead in the market. We again saw increasing vertical market adoption of Evolve Express. We continue to see signs of accelerating demand in education and healthcare and professional sports as evidenced by a higher volume of opportunities and higher volume of seven figure opportunities. nearly 30% of our TCV came from the K through 12 education market, our single largest market in terms of Tam and addressable facilities. We secured 10 educational related customers, including the Charlotte Mecklenburg School District in North Carolina, one of the largest school districts in the country. I think they're ranked number 18 With nearly 150,000 enrolled students. We closed that opportunity in q1 and completed the deployment of 50 platforms within just a few weeks. Then a few days later on our second day in use, revolve Express platform was able to identify a student attempted to enter the district's very Academy of Technology with a fully loaded handgun. The student was stopped and arrested. And thankfully, a potential tragedy was avoided. All the students and staff at the school were saved and the school was not evacuated or placed on a lockdown. That's like this have unfortunately become commonplace in the United States. K through 12 education activity, partner development and funnel are accelerating as more school boards and school districts are asking to digitally transform their security operations and accelerate how they keep their students safe. We saw continued growth in the hotel and casino market, which represented about 17% of our TCD closed the large seven figure deal in Mexico. And this was one of the largest 20 unit deals in the company history. We closed this deal with Stanley security solutions. We also secured hard rock International and three regional casino operators. We're seeing more casinos returning to full pre pandemic operations and rolling out solutions that can enhance visitor security and visitor experience. Tourism and performing arts represented about 10% of PCB for the quarter, including a key win at the AON Arena in the UK, the same venue where in 2017 A terrorist detonated an explosive device killing 22 people attending an Ariana Grande concert. We're proud to be the new touchless security screening provider for that arena, which is one of the busiest venues in the world and the largest indoor arena in all of Europe. The win is consistent with our global marketplace. securing an iconic venue in a geography then leveraging that as the beachhead for the future expansion in that market. healthcare market which includes hospitals and clinics represented nearly 10% of our TCV as we welcome nearly two dozen customers who deploy us to provide patient and safe security. Finally, just in time for the summer vacation period, we were excited to welcome several new theme parks, including Dollywood, the biggest ticketed tourist attraction in Tennessee. And Kennywood, a century old theme park in Pennsylvania. Combined, these two theme parks welcome more than 5 million visitors annually.

Want to shift and share some key trends we're seeing in our business. First, we continue to see strong momentum with our channel partners, which is enabling us to extend our vertical and geographic reach. Over 60% of our q1 PCV came through our channel partners, which is up significantly from the back half of 2021 that involvement is most pronounced in health care, education and professional sports. We're seeing broad activity across three dozen authorized channel partners and several strategic global partners in Motorola Solutions, Johnson Controls and standard the number of qualified partner involved opportunity has never ever been higher. We're also seeing strong growth in the number of ABAB Express certified professionals among our partners, which is a result of the work we've done to activate and enable partners over the last several quarters. These are partner professionals will be able to sell, install and support express in the field. Again, on the supply chain front continue to feel the impact of higher hardware costs connected to COVID related challenges over the last 12 to 18 months. We're addressing these challenges by pre buying hard to find parts, which helps us to ensure product availability while helping protect against the risk of rising inflation. We feel confident about both our inventory levels and our product availability. Third, on the competitive front, continuing to see more attention being paid to the space, which is not surprising given the size of the market. Opportunity and the compelling economics. They'll see up to 90% of our opportunities going uncontested. We do bump into others in the marketplace. It's generally a provider of legacy legacy walkthrough metal detectors, and we tend to do very well with those head to head competitions. As that technology has been around for decades. We continue to stay relentlessly focused on improving the coverage, productivity and predictability of our Salesforce. Mainly, we're seeing increasing acknowledgement of our detection and performance capabilities by universal testing bodies. On March 31 2020, the end of the quarter 2022 we announced that we had were awarded the US Department of Homeland Security Safety Act designation for evolve Express platform. If the ACT designation provides significant federal liability limitations for those using or deploying evolve express to protect their visitors. The Safety Act is recognized as an important standard by which security technologies are judged. And our designation status validates the Express platform as a high throughput touchless weapons detection screening system worthy of the very high DHS performance standard. DHS is application process involves significant review of the technology. Its use in the field results from field testing and customer feedback and testimonials on its performance. Several of our customers submitted their performance evaluation and testing in support of our applications. Were also recently recognized by the National Center for spectator sports, safety and security or NCS for which tested the effectiveness of the Evolve Express platform results of that testing were very positive. We earned a score of 2.84 On a scale of zero to three, the highest among the high throughput touchless weapons detection screening system. DHS Safety Act designation and positive NCS for testing results are important acknowledgments for the company, our customers and our partners and provide further validation of a technological and market lead.

So that's an update on our progress in q1 the trends we're seeing in the business off to a solid start here in 2022. And we believe we're well positioned to meet our full year top line growth plans. We remain well capitalized and we remain confident that we have the appropriate resources to get to cash breakeven without any additional capital raising efforts. None of this would be possible without the trust of our customers put in evolve every day to keep their venues and people in them safe. All my years in the security business, much of that in cybersecurity. I've never seen such a deep trusted relationship develop between a company and its customers and mutual devotion to keeping students, employees, visitors and fans safe is something we cherish here and of all that let me turn things over to Mario, who will take us to our financial results and our outlook for 2022. Thanks, Peter. Good afternoon everyone. Want to review our first quarter results in more detail and then share some thoughts on how we're thinking about the rest of the year. We ended the first quarter with 910 active subscriptions, up 29% sequentially, and 227% year over year. We had a very strong start of the year adding 207 subscriptions in the first quarter of 2022 Compared to 136 in the fourth quarter of 2021 and 64 in the first quarter of last year. Some of these were part of the installation backlog. We discussed at the end of 2021. Peter mentioned revenue in the first quarter was 8.7 million 27% sequentially in 180% year over year. We ended the first quarter with annual recurring revenue or arr. of 16 point 6 million reflecting growth of 29% sequentially 207% year over year. As a reminder, we define ARR as the period ending monthly subscription revenue and the recurring service revenue related to purchase subscriptions normalized to a one year period. School District transaction that Peter described led to a strong contribution from our purchase subscription pricing model in the first quarter. In addition to higher mix of purchase subscription sales, also had a greater percentage of equipment sales in smaller, less expensive one lane systems driving down average revenue per unit. The school district transaction comprised primarily of single lane configurations remaining performing performance obligation Excuse me What RPO was 50 point 5 million at the end of the first quarter 26% sequentially and 186% year over year. Reminder RPO reflects the difference between contract value and revenue that has already been recognized for units deployed as of the end of the quarter. In addition to RPO we ended the quarter with another 13 point 2 million of contracted revenue associated with units that had not yet been installed as of March 31 2022. So in total, we had about 63 point 8 million of RPO plus contracted revenue and backlog. You know the first quarter was represented growth of approximately 24% sequentially. Gross margin was 19% in the first quarter compared to 26% in the first quarter of last year. Lower Margin reflects the higher percentage of purchase subscription sales, where equipment revenue and costs are recognized the front impact was more pronounced because of the higher portion of one lane system so as part of those purchase subscriptions exclude excluding depreciation and amortization and scrap costs. Gross margin was 31% in the first quarter compared to 37% in the year ago period. Our product gross margin was negative 7% In the first quarter, and as we mentioned, was impacted by an unusually high level of competitively priced single rank configurations in the quarter, including the Charlotte Mecklenburg school district transaction or private product gross margin was also impacted by $175,000. A one time scrap charges.

We're very happy to report that we continue to grow our subscription gross margin reached 65% In the first quarter of 2022 Compared to 60% in the fourth quarter of 2021. And compared to 54% in the first quarter of last year. Improvement reflects the benefits of scaling our operations just as important our subscription cash gross margin, excluding stock based compensation and depreciation and amortization. was 91% in the first quarter, compared to 86% in the first quarter of last year. Finally, services gross margin which is a much smaller component of our gross profit was 11% Compared to 36% in the first quarter of last year. This number is subject to fluctuations in our service costs on any given quarter given its size. Total operating expenses were 27 point 5 million in the first quarter, compared to 22 point 3 million in the fourth quarter of 2021. For specific drivers to this 5.2 million sequential increase in our backs, a large portion of which will one time or out of period expenses. The biggest reason for the increase in expense was due due to 2.5 million in non recurring expenses, including 1 million in stock base out of out of period expense segments in connection with the departure of a senior executive and other smaller items. We also had an increase of 2.1 million in payroll related expenses, primarily reflecting the growth that had gotten in the fourth quarter of 2021 and first quarter of 2020 to also be impacted first quarter payroll taxes. We exited the first quarter with 196 employees compared to 176 at the end of 2021. So a net add 20 employees expect headcount work slowed down for the remainder of this year, unless sales volumes continued to accelerate. Another portion of the increase was due to a one time benefit we realized in the fourth quarter of 2021. For our catch up benefit related to the capitalization of prior periods r&d expenses. This effectively lowered r&d expenses in the fourth quarter and the absence of that benefit, the absence of that benefit total $800,000 Finally, we saw a $500,000 increase in marketing expenses, like reflecting the timing of certain trade shows, which helped to drive a significant increase in unit sales in the quarter. From operations was 25 point 9 million in the first quarter 183% year over year. Adjusted loss from operations which exclude stock based compensation and the one time items 19 point 2 million in the first quarter compared to 8.1 million in the first quarter of last year. Just a bit that was negative 18 point 2 million in the first quarter, compared to a negative 7.6 million in the fourth quarter of last year. Let's discuss the balance sheet and our cash burn, which we're very focused on ended the quarter with approximately 271 million in cash and cash equivalents down about 37 million from the fourth quarter of 2021. Approximately 29 of the q1 cash burn was due to cash operating loss. Expect our quarterly cash losses increased throughout the year as we grow the ployment and lead limit expenses. So any given quarter maybe worse due to the timing of expenses. But let's review the remaining 17 million of cash burn in the first quarter, which is comprised primarily of working capital items. Seven of the 70 million was cash consumed by inventory in the quarter an amount comparable to the inventory amount consumed into for this enable us to meet the growing demand for evolve Express million dollars which was a prepayment deposit contract manufacturer in the quarter to fund an additional purchase order for inventory are likely to make additional cash deposits with our contract manufacturer. Ensure access to raw material and mitigate risk of inflation. Point 3 million was due to the timing of annual bonuses paid in connection with our employee compensation plan. Obviously incentive compensation bonuses will not make cash outflow for the remainder of 2022.

Were a few other timing related working capital items that consumed about 2 million in cash in the quarter, including the activation of our new NetSuite ERP on April 1 drove us to prepay some expenses prior to quarter end, as well as the general timing of installations which was a slanted towards the back half of the quarter. You had an impact in Billings and subsequent collections. Again, I want to emphasize that about 79 of the cashews in the quarter was working capital items, some of which are due to timing. addition we expect the 29 and cash operating losses to decrease as we ramp up subscriptions throughout the year. We are We are encouraged by our start to the year and are continue to drive growth higher while staying very vigilant on expenses and cash flow based on what we know today or look for the years consistent with the outlook we issued just eight weeks ago. Specifically, we continue to expect full year revenue to be between 29 to $31 million to reflect the growth of about 25% year over year. We're happy with our strong first quarter performance, you continue to feel very confident about the remainder of the year. However, we have seen that deployments can be impacted from quarter to quarter by large deals, clients willingness to deploy on a timely basis. Such we are maintaining our current revenue guidance. Continue to expect adjusted ebit.to range between negative 65 and 67 million in 2020 to reflect our expectation for sequential revenue growth gather was slower Express growth which should improve profitability over the last three quarters. We continue to expect to end 2022 The Platinum jewelry and 20 to 239 in cash to reflect increased inventory buildup in deposits and materials to support our growth plans in 23. May deploy more of our cash to pay for raw materials and mitigate pricing pressures, which would be would have a significant short term that John given the inflationary environment. With that I'll turn it back over to Brian

Morrill operator at this time we'd like to open the call up for q&a We're going to ask participants to limit themselves to one question and one follow up. chance if we could open the call. That'd be great. Yes, thank you. Ladies and gentlemen, if you have a question please press one on your touchtone phone acknowledged that that you may remove yourself from code anytime by pressing one and zero again. Ladies and gentlemen, if you do have a question at this time, please press one and zero on your phone. Our first question is going to come line of shot I'll go ahead Hi, this is

Hugh odd for shallow guys. First of all, congratulations on a solid quarter. And second you know it's always good to hear when you have successes like stopping that gun in the school in any event center to get a question. So the first thing I want to ask is in terms of product versus subscription, what impact did that bounce this quarter and I remember you know, last quarter, we talked about some customers

preferring to for

budgetary reasons or other reasons preferring to buy machines instead of entering into Subscriptions. And then the second question is, are you getting a feedback from customers? Right now about

sort of add on capabilities

that that you may have for ticketing and etc. Thanks

Yeah, on the on the impact was you know when you saw the revenue on the purchase subscription side, we recognize the entire product revenue upfront. And so as a result, because we're not collecting that over time, product revenue increases significantly if we're selling a lot more purchase subscriptions compared to the prior quarter and that's exactly what happened. If you go back to the third quarter, a similar phenomenon we had a higher mix of purchase subscriptions and our revenues actually impacted positively because of that and in the in the fourth quarter that came back to a more normal mix. level. So you know, when you when you track the product revenue line, that mix component can can make a big impact in any given quarter is that I apologize if I didn't answer your question cut out a little bit. So let me know if you need to follow up on. Yeah, sorry about that. Let me try to

get closer here. The real question was about the customers and their preferences for machines versus subscriptions. And I recall some sports teams had this sort of preference for buying the Express machine because of budgetary reasons instead of entering into a subscription. Are you seeing any change in that trend? Just sort of looking forward to sort of looking for what to expect.

I can add on to what Mario has already said. So first of all, you thank you for your comment about that school. I'm going to come back to that specifically as it relates to purchases scription. Remember you all of our customers get a screen in from us. Every one of them, some of them choose to buy the platform and get a subscription and some choose just to get a full subscription. We had in the plan for this year for 75% of our customers to be both subscription and 25% to buy the hardware and then get a subscription in q1 as Mario mentioned, more of our customers chose purchases gription primarily because we were replacing metal detectors they were used to using to buy it and in this case with Charlotte Mecklenburg. They got grant money and wanted to spend all the money upfront and pay us upfront and they use their their capex budget to do it. So that's weighed the quarter a bit, but we believe long term meaning the rest of the year that will normalize back to the 7525. And as I said, everyone will get a subscription from it. Make sense?

Yeah, I get that. I was just kind of thinking if you're going to see that phenomenon a lot going forward where people because of budgetary we are organizations because of budgetary reasons, like the school or a sports team say, Hey, we're gonna go ahead and buy the machine and pay and enter into a lower cost subscription. versing customers going to a larger cost subscription without buying the machine but I get what you're saying. The second question was just about any feedback on potential add ons. You know, like ticketing and things we talked about in the past, taking temperature, etc.

Yep. So So absolutely. So we have a big r&d development effort going on this year, not only to continue to increase the efficacy of our software, make our systems more accurate. And effective, but also to do lots of integrations. So we've announced integrations with most of the major leaders in in video management systems. We're excited about that mass notification system. So integrating into the existing ecosystem and infrastructure of our customers already there is really, really important, because we're a digital platform, we can do that. No other companies can. So that's a competitive advantage for us that we like to exploit above and beyond that, because it's easy and we're a software platform, we can add new applications. Right now we're looking at either integrating or adding things like biometrics license plate reading, lots of other capabilities to create that experience that you've heard us talk about before. The safe, frictionless informed experience from the approach when people come to the parking lot or enter outside of the venue through the threshold where we are in the entryway and then operating freely inside the venue. So yes, we're we're working on both developing ourselves and partnering for adding new applications to the platform. This one will probably be in biometric. Thank you so much. We're gonna go to Line of Mike Lattimore from Northland capital markets. Please go ahead. Thanks. Yeah. Congrats on the strong results here. Real real strong and we're getting bookings there. I guess on the end, I think you said 60% of bookings came from partners that I believe that's well ahead of your expectations, maybe a little bit on either strength through partners, and then does that give you some flexibility to maybe spend a little bit less on internal, you know, sales so we are planned for this year was the end the year about 50%, direct and 50% through channel partners. You may remember last year was more like 70 3070 direct and 30 channel 30% and channel partners, but we made a big investment last year in hiring worldclass channel people and to enable our channel partners. And that investment has started to pay off in earnest, even faster than we expected in q1. So we were really thrilled to see our pipeline growing dramatically and those deals translate into some of the PCB we talked about. And as we look out at the pipeline for the rest of the year, that trend continues. So the investment we were making there is starting to pay off early and it does allow us to not make as many direct investments we have enough direct people today on our Salesforce to make our our guidance number for the year. So we have people in place to do that. But with this acceleration from the channel, we're excited about it. And we look forward to you know what the next couple of quarters are going to bring with the channel and then you start on gross margin. Can you give a little maybe just you know, guidance there should subscription gross margin keep sort of trending up here and then on product gross margin is that's going to be naturally kind of, you know, a little variable according to the quarterly basis. Yeah, it's the product gross margin. It will be quite variable in this quarter, for example, because we took a lot of single lane systems, the margin was probably a little lower than it had been. So that that top I would expect that to revert back to where our averages were on the subscription, our expectations for that to continue to climb. I think originally we had said, you know, upper 70s, low 80s of subscription margin. I think ultimately we'll get there you know, but it obviously we're very happy with the progression. And you know, I don't think we'll continue to have the same leaps quarter of a quarter, but but we do believe that it'll continue to improve as we scale ranks by one line of red ribbon

from excuse me, great, thanks very much. I think during the prepared remarks, you talked about the gross margin of the Charlotte school district being negative on that sale. Number one was that correct? And number two, what was the thought process if that is correct? In given that thanks. We didn't say it was negative. We said it was the majority of the unit so in that contract, we're single lane, which typically have a lower price point. They have a lower cost as well. We didn't disclose how profitable non profit it was. But, Brad, but we did. We did talk about that from a per unit revenue, it was typically a lower deal than we've seen from others. Okay, and then maybe just from a high level, strategically, you mentioned competition, some on this and I understand there are aspects of the market that are fairly competitive. You're so early on in the process, and you're somewhat supply constrained, given the supply chain issues. Why bother with those opportunities? Why not focus time and effort on the most profitable business that you can get in any given period? So we're, if you remember, this is a $20 billion Tam. 2 billion is regulated and that's where the existing antiquated metal detector technology is, specifically professional sports. So we have a sports team dedicated to that. The rest of the organization is focused on the $18 billion Greenfield so think about schools. Hospitals, performing arts, venues, distribution warehouses, tourist sites, houses of worship, that's exactly where our team's going. And I think some of the acceleration with the channel is our channel partners. Many of them have deep, long standing relationships with all those places and they're able to get us into those companies very, very quickly. So that's exactly where we're focusing in financially Brad, just keep in mind that contracts are very, very favorable. You know, in a purchase subscription. Sometimes it looks like the margins on the equipment. quite tight or negative. That's not a reason not to put them on because that subscription revenue stream is highly, highly profitable as we're showing. So it is, you know, obviously, I get why you're asking and I understand the point that the large contracts, even if we don't make a ton of money on the equipment, we're making a lot of great margin on the subscription. Even more importantly, we're making almost 100% margin on cash, cash margins. So that's why we're very eager to sign those deals on. A lot of sense. Thanks very much. Thanks. Brian. During the line, and Brian Ruttenberg from imperial capital, please go ahead. Yes, thank you very much. First question is visibility on cash breakeven. And you already went over kind of why the cash was burned so high in the period, but can you talk a little bit about timing to cash breakeven, is that a 2023 of them? You know, we talked about that at the end of the year. I'm not I'm not gonna go into it other than you know, we're really feel great about where the business is heading. We're not going to change kind of the breakeven timing, which we talked about, I think we said 2025 Or maybe 2024. So, Brian, I think, from from our standpoint, we're really kind of focusing on 2022 Right now we get why you guys are asking but as Peter mentioned, we're very comfortable we'll get to get to break even without needing any additional financing. We have lots of levers to pull including third party financing of equipment, which we are just starting to look into. So you know, whether that's 2524 We don't know we're committed to getting there quickly as quickly as possible. And, you know, we're also committed to if we can have an opportunity to deploy cash, smartly in the near term, to accelerate that or to get a great return. We'll do that. But but it has the long term prospects, I think is unchanged from what we talked about at the end of the year. Right. Then as a follow up real quick is has there been a change to sales incentives in this first quarter, and can you talk a little bit about that has there been a push, you know, to incentivize the Salesforce more towards subscription versus product? You know, how do they get paid and where's the incentive structure?

No, there was no extra incentive in q1. Remember, every one of our sales is a subscription. And our our salespeople do what's best for the customer. So we don't try to steer them in any direction. And we had a we had a record march in every dimension, right? I mentioned we got off to a slow start. With the Omni kromm hangover and it's seasonally q1 can be quiet, but boy, everything changed in March and we broke every record for a month in the company and it wasn't a thing we did with the sales guys. They were bringing in the deals that they had been working on for a while, and everyone started opening up again, right and our customers were willing to accept the systems that they ordered. And you know, we obviously took advantage of that. So we feel really good about how we finished the quarter and feel really good about the momentum we have starting this quarter because it's continued. And the outlook looks quite good.

But I will say, Brian, that compared to last year, we've been much more aggressive in pushing sales quotas higher because we're seeing the

success of saying well, we've got we've doubled quotas for our sales guys, so they have to sell twice as much this year as they did last year. Their subscription neutral because everything we sell a subscription, and you know, they're having great success out there. And as you know, because we've talked to you before about our channel strategy, they're also channel neutral. So whether they sell it direct or they sell it through the channel, and they we can get tremendous operational leverage from all the channel people they have in their territory, and that force multiplier is translating into our business. Great, thank you. Thank you for your questions, and I'd like to turn it back over to Peter. George, please go ahead. Thank you. So I just wanted to finish off with hopefully the key messages that everybody got from the call today. The first is we got off to a really strong start in 2022. We're really happy with our results in the quarter and really confident in what the rest of the year looks like. Some of those highlights getting 40 new customers in the quarter was huge, not just the number but also some of the key customers in the not getting 200 systems deployed in a quarter that was very backend loaded was a challenge for the company, but we met the challenge. I mentioned that Mecklenburg deployment. It was a record for us, right the deal was a $4.2 million deal. It was 52 systems. And we got those systems deployed in three weeks and got those kids safe going to school. 150,000 of them in the district are really, really happy about that. I mentioned the data that we're collecting 250 million scan. Nobody in the industry has that kind of data and it's making our technology and efficacy better every day because the system gets smarter every day. And then finally that partner momentum is translating into the business at an accelerated rate and we expect that to continue so we're excited about it. So we look forward to seeing you in July. When we have the next earnings call. We thank you all for attending. Thank you very much, everyone. Thank you ladies and gentlemen, that will conclude our conference for today. Thanks for your participation. Using ATT Event Services. You may now disconnect Sorry, your conference is ending now. Please hang up Jessica gone.