Hi, I'm Destiny Jackson, and I'm on the Healthcare Technology and Distribution team here at J.P. Morgan, and we are thrilled to have Consensus Cloud Solutions here with us today. Here we have CEO Scott Turicchi, SVP of Finance Adam Varon, and CRO Johnny Hecker. So we'll begin with a brief presentation, followed by Q&A. So with that, I'll hand it over to Scott.
Thank you, Destiny, and thank you to J.P. Morgan for inviting us. As Destiny mentioned, we'll go through a couple handful of slides because not everyone may be familiar with our company, as we're still relatively new in the public markets, having spun out of a former parent known as J2 Global at the time, a little over two years ago. And that's all the legal stuff there for those in the room. Happy to address any of those. As Destiny mentioned, with me today is Johnny Hecker, our Chief Revenue Officer. He joined the company for the second time, about 16 months ago, and so all revenue runs through him. And then Adam is our SVP of Finance.
He'll be addressing, at a very high level, the financial profile of the company, and particularly our debt structure and actions we're taking to reduce debt over the next several years. So in terms of the mission and what it is we really do, we move really important, primarily in the healthcare space, but not exclusively, information around the networks. And so our goal is to be that trusted global source for not just the movement of the information, but its transformation and enhancement. And some of this will become clearer as Johnny goes through some of the products, particularly products like Clarity. So this slide is an amalgamation of sort of where we've come from on the right-hand side, and our offering service sets and what makes them important on the left-hand side.
So we do, and we've been doing for a number of years, providing through a variety of services, best known for our cloud fax platform, generally under the brand of eFax, but not exclusively, the movement of important information. And our roots really started in other regulated industries, primarily the legal industry and the finance industry, broadly defined, many different elements in the finance. So that's where our roots came from. We began to approach the healthcare space, really about six years ago from a technology standpoint, and about four and a half , five years ago from a go-to-market standpoint. So we like these regulated industries where security and data privacy is highly valued.
Also, where real-time communications is important, so high speed, reliable, and to be trusted because of the nature of the underlying information is either contractual or it is very important in terms of the care of the patient. As a result, we have services that are not only HIPAA compliant, but our fax, and now I'm proud to announce our digital signature, are HITRUST certified. We also have regional data sovereignty, and our FedRAMP High certification is in progress and expected in the Q1 of this year. We also have a stream of revenue, which we refer to as the small office, home office or the SOHO. Those are generally individuals.
We'll talk a little bit about the differentiation between what we call our corporate channel of revenue, which is where most of our healthcare activity takes place, versus the SOHO, which is a very broad base of individual users that cut across every kind of industry you can imagine within our economy. Now, as I mentioned, on the right-hand side, our roots are in the cloud fax space. So in 2010, we were primarily selling almost exclusively cloud fax under the brand eFax Corporate and eFax. As we started to look at the challenges in the healthcare space for the movement of information and the lack of interoperability, we came up with a roadmap and developed several new services. I'll touch on them very briefly because Johnny's gonna go into greater detail.
But Unite is a bundled service that takes several HIPAA-compliant protocols and bundles them together so that the client has the choice to choose the protocol that is most appropriate for the communication of either that document or that information. jSign was designed to be part of the workflow in the healthcare system, and as I just mentioned, has become HITRUST certified. It is a digital signature. Clarity is an extraction technology. A fax is an image. It's not the only kind of image that is passed around in the healthcare sector, but it is one that is most predominant.
We all like to have structured data, so Clarity, as a platform, allows the documents to be read and for data to be extracted. We have two specific applications that we sell today. One is for prior authorizations, and one is for clinical documentation.
Harmony is a little bit farther out in the future, but it's the amalgamation of these technologies that allows us really to be at the center of communications within healthcare and allow any kind of document or information to come in, in any format, transform it into the format the recipient would like, and then send it out. That's to come. There are pieces of that that are actually in beta right now, but the full release of Harmony is still out in the future. We've invested about $26 million in the interoperable solutions just over the last, really three years. A little bit more than half of that is organic. The other piece was an M&A deal we did in February of 2022.
60% of our corporate revenues is healthcare, 75% of our new wins are healthcare, and 70% of our bookings are in this interoperable area. We service over 2,000 enterprise organizations, although, as Johnny's gonna show you, we cover the individual customer all the way up through the enterprise... however, we're becoming more and more focused over time on the medium to large enterprise and strategic customer, agencies of the federal government, state government, et cetera. As I just mentioned, 75% of our new sales come from the healthcare sector.
Our business model is one of a subscription model. Now, depending on where we are in the continuum, it is either more or less fixed versus variable. Think of smaller customers having a very high fixed component. Very little of the revenue stream comes from their underlying usage.
As you move up and you go to the very largest accounts, it inverts, where substantially, if not all the revenue, comes from the actual traffic that is being processed, and very little, if any, is fixed. 26% of our bookings come from the advanced products, so we're showing some traction in those interoperable solutions that are outside of the core fax space. Been servicing the corporate marketplace for 20 years, and because of the subscription-based model, it also helps very much with our corporate revenue retention, which is right around 100%. I'll now invite Johnny to come up, and he'll take you on a deeper dive through the history of the company and our services.
Yeah. Thank you, Scott, and hello, everyone. I'm gonna take you through probably three slides, focusing on the one hand on the market and our interoperable solutions, our products, and then also our go-to-market approach and our customer continuum, as Scott has mentioned. On this slide, you really see, and I'm gonna start at the bottom here, you see a timeline of the Twenty-First Century Cures Act and how it develops into the TEFCA framework that is now being implemented. We're often asked about queue hints and how all of these things behave and impact our business. You can see this discussion has been going on for quite a few years, and it continues to go on.
In my humble opinion, it's a very academic discussion because what we actually see in the market is fax volume is continuing to grow, and other protocols are picking up as well, but they're not replacing what we're offering. So it's actually overall, communication volume is increasing among all the players. The players, as we view the market here on the top left of this slide, is not only providers. Oftentimes you have healthcare IT companies that deliver services very specific for one segment of the healthcare industry. For us, the healthcare industry is a lot broader. It's providers, it's physicians, but it's also Pharma Rx, right? It's payers, and oftentimes we have, let's call them channel partners, like other healthcare IT companies, that service those specific healthcare players that we also include in that larger mix.
They all have the need for interoperability to communicate and exchange documents. These documents, on the right side, you can see, are what we call the use cases, are on the one hand, referrals, but it can also be claims, prior authorization, pharmacy communication, results, diagnostics, lab results, all those kind of things. It's all about larger record sharing. Now, let me take you through the product suite in a little bit more detail. Again, starting at the bottom of this slide, you see eFax Corporate, and eFax is really by far, still the largest contributor to our revenue, to our top line. We're selling a lot of fax, we're providing a lot of the services, and it's still growing significantly in volume.
In the late teens, when we started to focus more on the healthcare industry, we looked at this product and said: "Well, what are we doing with it, and what are our customers doing with the documents that they're receiving?" And we said we wanted to extend that delivery mechanism and go deeper into their workflows. So we've added more healthcare-specific services and products to our just basic fax services at the beginning. The first one was really Unite, which is and Scott has spoken a little bit about the protocols that it services, but it's a workflow tool for smaller clinics, smaller physician offices, where they can, on the one hand, use all of those interoperable solutions, but they also have a little bit of a smoother way of handling the faxes.
It can integrate with an EHR, so it's a more healthcare-specific user interface and product. And we added, as the next step, a product we call jSign, which has now, as Scott said, been HITRUST certified, and it's the only and the first HITRUST certified e-signature solution in the market, very specifically for that vertical, which is a digital e-signature solution. So a lot of times, doctors have to sign documents. We don't know exactly what the percentage is that they have to sign, but we think it's more than half of the documents that they receive and send need some kind of signature. So that is why we have positioned this product, and we're integrating and bundling that more and more with our existing product suite.
In 2023, or late 2022, in 2023, we officially launched the Clarity platform, which on the one hand, and we're gonna speak a little about AI probably later on, but on the one hand, is an AI application that extracts data and turns these unstructured, really, images that what a fax is, and extracts certain pieces into structured data, so it can be processed more easily and faster within the provider's environment or a payer's environment, depending on what application you use. But it's really also a way of bridging these technologies, and it's true interoperability. So we're not forcing anyone with any or we're not trying to incentivize anyone with payments, or we're forcing them by applying a certain technology.
What we're really doing is we're providing these services so these two sides of a communication can adopt at the pace that they want to adopt to a new technology. All of this will eventually come together in what we call our platform, Harmony, where then providers or whoever is part of our network, whoever has a node in our network, can actually connect to, and then use these services on a per-use cases as they, as they need it. But that is a vision. That is what we're working on. We're having the first POC out there, where we're actually having a customer who's receiving faxes. We're turning that into a Direct Secure Message and deliver it to the other side as a Direct Secure Message. So it's the first POC of this transition that is, has gone live.
On this slide, and I can talk for an hour about this, but I'm gonna try to keep it short. We're showing what we call our continuum of customers. It's really our go-to-market approach. So the analysts and to our investors, we still report two business streams. One is the SoHo business, and the other one is the corporate business. And in the past, we did a realignment of our entire go-to-market earlier in 2023, in late Q1 and early Q2. But in the past, we really also had almost different business units internally on our go-to-market. So we had a marketing team specifically for SoHo, and a marketing very specifically focused on corporate. Our sales teams and our sales channels were completely separated.
But what we noticed was that customers are not using those sales channels anymore. They're actually moving from the corporate space into e-commerce and want to buy our products online, even though they're corporate customers. The same thing happened to us. We had a very focused SMB inside sales team that was like a call center, inbound, taking orders, and more in the area of, you know, 40, 50, up to, like, 200, maybe 300 ARPA. And we noticed that larger customers were calling into that sales line as well and buying the service at multiple $1,000 a month. And we saw customers don't have the need for us to travel. In during COVID, it wasn't even possible, right?
So the procurement processes and the buying motion of our customers evolved and changed, and we had to adjust our go-to-market to meet them how they want to buy the product. So the way we set our go-to-market up is, on the one hand, we have an e-commerce channel, where since 2023 we launched that in late 2023 with our first corporate product on the e-commerce channel. We're now also providing these services online to our corporate customers, and we're gonna extend that journey throughout 2024, and offer more sophisticated, more secure, and higher priced product on our e-commerce channel. The SMB and what we call here, the large accounts, are really coming more and more together, which is our, you know, inside sales team.
It has a portion, field sales, to it where needed, but, it's growing more together on that. And then we've carved out a named account list of our most strategic and largest customers, some of them, you know, a few hundred thousand dollars, per year, up into millions of dollars per year, that they, that they generate revenue with us. And the federal government is in that, you know, dedicated sales team for the strategic accounts. Now, why is this important? Because on all of the things that you see on the left-hand side, these different e- customer groups behave differently. On the sales motion, on the lead sources, very much so in the sales cycle, right? The online customer, it's one click, and they basically bought the product. It's a few seconds that they buy it.
The SMB has a sales cycle of 1-2 weeks. But then once you get into the large accounts or strategic accounts, oftentimes there are RFPs, RFIs involved. Sales cycle can be many months, up to years. The same thing on what you see on the ramp to revenue cycle. You know, an online customer starts using the service immediately, while these other customers might take weeks, months, sometimes years to ramp. As we can see with the example of the VA, that was a contract or a deal that we worked on for two and a half years until we closed it, and ever since we've been ramping it. It's been ramping, we're rolling it out, but it's a multiyear process to actually roll out our service into the entire VA.
Maybe one last thing on this slide that I want to talk to you before I hand it over to Adam is the layers of opportunity. As we're deploying and launching more and more services and products in our interoperability, I think on the very low end, you know, they're usually a single product customer, right? They buy the fax services, what they use, they buy jSign online. This is what they use as their signature solution. But as we go up market and these customers become bigger, we have more opportunity to upsell-
... that more of a single service, because they might have multi locations. As they get bigger, they go through M&A. So we're trying to replace existing solutions that come in through mergers and those kind of things, and we can also cross-sell. This is where Clarity becomes a topic. This is where we can bundle products, and this is where we will eventually bring those customers on the Harmony platform. This was a little bit of an overview on our go-to-market, and with that, I'll hand it over to Adam.
Thank you. Thank you, Johnny. All right, I'm going to do a quick overview of our financial profile. I'll be talking about a couple of different things with regard to our debt structure, as well as cash and free cash flow. Since we're in a quiet period, we'll be talking about through Q3 of 2023, either on a LTM basis or a year-to-date basis. From our reporting in Q3, we had a record cash balance of $156 million, roughly. That's versus about $104 million the prior year and comparable quarter. Our excess cash is invested in money market funds, earning the going rate, and we earned about $1.6 million in the quarter on our money.
When it comes to free cash flow, Q3 was a record post-spin full fiscal quarter, about $50 million in free cash flow versus $29.8 million, roughly $30 million in the prior year's quarter of Q3 2022. That's with an increase in CapEx as well of $2.7 million. I will note that Q1 and Q3 are high earning free cash flow quarters because we don't have our debt interest payment, which is in Q2 and Q4, in April and October, respectively. When we look at this on a year-to-date basis, in Q3 of 2023, we're at about $83 million and change, versus the prior year, where we were at about $68.2 million. Again, with an increase in CapEx to $28.7 million from $21.1 million. Moving on to an overview of three years' worth of revenue.
We have 2021 versus 2022, and 2022 versus the LTM Q3 of 2023, so the last twelve months. You can see that we've broken it out between SoHo and corporate. And really, what's happening is our growth has slowed in corporate. You can see that amid slower corporate decision cycles, particularly in healthcare, how we've articulated in our earnings calls over the last several quarters. The decision cycles have slowed due to labor and IT resources within our largest installations, and it takes a longer time to ramp, as Johnny had mentioned. So our year-over-year in 2021 to 2022 for corporate, went from roughly $170 million to $192 million and change, which was like a 13.2% increase, and that has slowed to 3% from 2022, $192 million to $198 million in the LTM Q3 2023 period.
So, you know, the takeaway here is we still are experiencing a strong pipeline in the corporate channel. We have strong cash generation, but our operational performance is impacted by these slow decision cycles and delayed implementations. Going to the final slide, this talks about our leverage, leverage ratios. In the spin-off transaction, we were levered by $805 million, two tranches, five-year non-callable, two years, which is now in the callable period, because that's October of 2023. I'm sorry, it's executable, I should say. $305 million. Then we have seven-year notes, non-call, five years at $500 million, for a total of $805 million. With a hundred and fifty-six million, roughly, in cash, our net debt is about $649 million.
So when you look at the credit stats of the LTM, you know, adjusted EBITDA of $188 million at 9/30/2023, our gross debt to EBITDA leverage ratio is 4.27, and our net is 3.44. Now, we have announced a $300 million bond repurchase program that was authorized by the board. It was in our release for Q3. And, you know, the cash generation in the future, we're gonna manage our EBITDA. I know it's probably a question that's gonna come, but managing EBITDA and free cash flow to maximize the potential to delever to roughly a guided area. We would like to be at, like two—between 2 and 3 times, levered.
So that bond repurchase program and the company's cash generation will definitely favorably affect our leverage in the future. With that, I will hand it to Destiny.
Thank you. Okay, I'd like to begin with the demand environment. As we follow recent commentary from the four publicly traded hospital systems, it seems that labor costs are normalizing and operating margins are improving. However, this hasn't yet translated to healthcare IT demand. Can you speak a bit about the demand environment and what you're seeing there?
... Yeah, I think a couple of things. One is, as Johnny pointed out, our go-to-market is broader than just say, the provider category.
Mm-hmm.
So we see things in different pockets. But I think the premise of your question is correct. We've been saying for about Q4 OR Q5 now that the tight labor market has extended decision-making cycles and implementation. That remains true.
Mm-hmm.
We've seen some relief in that in the more recent past, but it's not yet clear how that's translating into an accelerated decision-making time frame. What I would just note to everybody is, as Johnny pointed out on that slide, where there's the continuum, particularly on the larger accounts, even if they were to be one today, they would probably have very modest impact on 2024 revenues. They would be more of a 2025 event because it takes even on an expedited viewpoint, a few weeks to sign those contracts, 'cause at the very large end, they tend to be customized. They're not off the shelf. And then there's the implementation, and the implementation is very hard to size up.
He had a very wide range in there because implementation is a function of how many different physical facilities you have, what is the infrastructure you have, how is the service being integrated into them, what various APIs do you need? So there's not a generic answer that you can say, "Well, if you're fully staffed, it'll only take 3 months. If you're partially staffed, it'll take 6. If you're not staffed, who knows?" It's not that simple. Each one is somewhat bespoke. But I would say that it has become better from a pipeline bill in a conversation than it was 6 months ago.
Mm-hmm.
But we're still looking for more... what I'll call more relief, because the labor market still remains fairly tight. We know the margins, while better, are still not where they would ideally like to be, and we also know that they're allocating some of those marginal dollars more to point of care than they are to IT.
Yeah.
These are all kind of the factors that we take into play, specifically as it relates to the hospitals.
Mm-hmm. So going off of that, can you talk about your go-to-market strategy with healthcare customers as they navigate this challenging environment?
Yeah. I'll turn it over to Johnny, because that's his, that's his job.
Yeah. Yeah, and I've talked a little bit about it in my presentation. Like I said, we're really dividing up the healthcare market into the segments providers, and then we have pharma Rx, we have the payers, very important for us as well, and then healthcare IT as a channel, and everything that is in between. So there's companies that are very specialized on revenue cycle management or just prior authorization, clearing houses and those kind of... So we're segmenting those, and we're approaching them differently. We have one team, for example, that's very focused just on providers because they just function differently than payers. Payers are insurance companies, right? They behave like a financial services institution. A provider behaves very differently. And then IT, healthcare IT or EHR vendors, for example, they... I mean, they're IT companies, right?
So we talk to different constituents, different buying persona in those, in those customers. So we're making sure that we address them separately in our marketing, in our go-to-market approach, but also with our sales teams. And then the other thing that I showed on the customer continuum slide is we have very different sizes of customers, right? So we have a ton of customers that are, you know, single physician offices, physical therapists, right? Like, very like, just like, yoga teachers in that area. All kinds of stuff.
There are single SoHo customers, SMB, maybe 2, 3 locations, dentist offices, those kind of things. And then it goes all the way to, through smaller clinics, smaller hospitals, all the way up to the large, like, academic, medical centers, integrated networks, and the largest payers that, that are presenting here, as well.
There's a lot of customers here at the conference, but this is really our go-to-market approach.
Thanks.
So, there's multiple go-to-market approaches, just to be clear, because they're different in customers.
Yeah.
I think that's, you know, it's one of the things that differentiates us from other companies is, to Johnny's point, and you could debate it, whether it's good or bad, they tend to focus either on a specific protocol or a specific end user customer. A lot of it is, you know, we inherited... Even though our focus on healthcare was refined and the investment was accelerated in the late teens, and certainly that's been true post-spin of October 2021, we actually had healthcare customers predating that. I call them the accidental customers. They were customers that would come in, and it was true of other sectors as well, that we had not customized a solution for or focused on, but yet they came knocking on our door, and we were able to cut a deal and service them.
And so you, over time, ended up with all of these different endpoints in different pieces or different industries of the healthcare sector. That's kind of how we ended up where we are today and why we're not a company that is only focused on hospitals or only focused on payers.
Mm-hmm. Okay. So we spoke a bit about AI and interoperability in our Fireside Chat early last year, which I really enjoyed. So since then, have you seen any new developments in AI in the healthcare industry?
You want to take it?
Yeah. Yeah, I'm happy to take that. I think there's... You know, AI has been around in healthcare for a while, right?
Mm-hmm.
It's been used in diagnostics and where it's allowed from a regulatory perspective, it is being deployed, and it's being tested. But I think there's also a huge hype around generative AI.
Mm-hmm.
What we are hearing our customers, or what we're seeing from them is, like, they're interested in the material, but they're awaiting regulation. They're a little scared of the hallucination piece of generative AI. So you don't want your doctor's notes to like, you know, come up with some like imaginary stuff and put that into. So what we're really focusing on is also a large language model approach, but not from generating it, but actually from an extractive AI perspective. That's where we're getting traction.
That's where we're seeing customers being very interested because it's like I mentioned in my presentation, it's providing true interoperability, and it's helping, especially starting at those mid-size, small to mid-size hospitals all the way into the larger provider space and also in the prior authorization area with payers and so on. It's actually providing a true benefit on productivity. So they're able to reduce the manual labor on those documents, and they're able to process them a lot faster and get them to where they matter a lot faster. So we're seeing a lot of interest from customers. We're in the first POCs. We've deployed a couple of customers in the past, so we're very excited about it.
That's good. With the recent December thirty-one deadline for export capabilities, can you talk about the Twenty-First Century Cures Act and what the implications are there and how you guys are preparing to benefit from that?
Yeah, and I think, you know, Johnny, on one of the slides, we probably should get the clicker and go back to it.
Yeah.
He gave you that timeline that talked about the, you know, the passing of legislation in 2016. Here we are now in 2024-
Yeah
Seven+ years later. So it moves slowly, and there are obviously good reasons for that. It's healthcare. There's a lot of regulation around it. I think for us, the most valuable piece that came out of that legislation has to do with the information blocking or the prevention of information blocking. And if you look at the services that we have built in the interoperable space, but I would argue including the fax service, they are all in the aid of that accelerated movement of information, ideally as you want it and in whatever format you want.
Mm-hmm.
Now, I wouldn't say that we necessarily developed the services in anticipation of the act or as a result of the act. It was, to us, more obvious that this was a problem in the late teens, and there needed to be solutions around it, and that not everybody would have access to the most current, robust technologies. It's not in this deck. I would encourage you, if you're interested, to go to our website. It's on another webinar we did. I think it was the AI presentation. But we talk about the concentric circles of healthcare.
Mm-hmm.
I think this is really important because Johnny mentioned, you know, you've got sort of at the center core, major hospitals, academic research centers. They tend to have the most robust technology and strong, deep IT staffs. So they have all the latest things from EHRs to various protocols for transmission. But as you start to go out into some of those other sectors, think of ambulatory care, think of SNFs, they don't. Many of them were not subsidized in that period. They don't have access to EHRs. They have, you know, more rudimentary and limited technology and technology staffs.
Mm-hmm.
So it makes the interoperability challenge very real. How do you move this information around? So to us, that emphasis—we'd like to see maybe more enforcement on it—but that emphasis on not blocking information, whether it's direct or indirect, that to us is the biggest takeaway from the Cures Act and how we've responded to it, and do believe that over time, it will be an accelerant for us. But as Johnny's mentioned, things move slowly-
Yeah
... both regulatorily and at the customer point. So, you know, we manage both of those things. We actually keep in contact with CMS and ONC as they think about the regulation and tweaks to it and how they might continue to evolve it. We're part of that process.
Yeah. Digging in on interoperability, how would you say you are differentiated from other interoperability solutions in the marketplace?
You go? Yeah, that's a very good question. I think most of the interoperability providers that offer technology are very... They're evangelizing a single protocol or maybe a couple of newer protocols. They're very much focused on, "Hey, we have to exchange everything as structured data." That has nothing to do with reality, right? Of course, there's a prescription. Maybe there is a lab report, and that's when it really ends with structured data in healthcare, right? Because there are doctor's notes we're doing with our Clarity solution. We're able to extract handwriting because doctors love to write stuff on documents. They do corrections, and then they fax it. So we view interoperability a lot broader.
We think, our digital cloud fax technology is probably the lowest common denominator of interoperability, and this is where we differentiate ourselves significantly. We have built over many years a large network, a communication network with, like, you can view it as a lot of end nodes where providers and all the players of the healthcare industry are connected and communicate through. So we have a broad customer base that we can up and cross-sell into.
Mm-hmm.
Whereas a lot of the providers that come and and just evangelize a single technology, they still have to build their their customer base. So I think we're taking more of that approach of, you know, let's deploy the technology, and I mentioned that in my presentation, at the pace of the customer and not force them into a technology. And with communication, it's tricky because you always have two sides, right? And maybe one wants to use one technology, and the other one wants to use a different one, and we're building that bridge.
Mm-hmm. So as we're wrapping up here, I'd like to know, what would you say is most misunderstood by investors relating to your company? And also, what are you guys most excited for in 2024?
Yeah, I think, I think that the fact that a large percentage of revenue come from fax. Many people don't differentiate between cloud fax, digital fax, on-prem fax, meaning it comes from a machine or a server. It's just all a blur to them because many people don't use fax as a communications protocol on a regular basis. It is really geared for specific regulated industries and use cases primarily. So if you dig into those, you'll find where the use cases reside. But I think there's a natural... particularly from a younger audience standpoint, I don't know. I don't, I don't use this technology, who uses it and why? I think that's the primary core misunderstanding. There is today, thankfully, more independent research than there has been, but it's still not voluminous.
Mm-hmm.
So if you wanna go and do your own research, yes, you can find some reports that'll try to quantify the space, try to quantify how much is in the on-prem market versus the cloud. A lot of it is guesstimation, because a lot of the numbers, quite frankly, are not, are not well known.
Yeah.
They're not even those that you would think would or should know. They're either unwilling to report or they haven't monitored it closely enough to know. So there is that somewhat opaque element that exists from a gathering of the data and an understanding of where fax has a either meaningful or predominant role within certain industries. And it is, you know, 95% roughly of our revenue. So I think that at the-- is the core of it.
Mm-hmm.
In terms of the second piece of the... I mean, we could add more stuff, but that's probably the core of it.
Yeah.
In terms of what we're excited about for 2024, certainly all this technology that we've been investing in and the seeds that we've planted, it's as those start to turn into customers. Now, how much revenue it will generate, come back on our earnings call, third week of February, and we'll have full guidance for the year. But seeing the evolution of those interoperable solutions, is something that's exciting for us, and also the roll out of the VA contract. As Johnny mentioned, these things can take years, and it's been slow to date, but we're finally starting to see where there's opportunities that it's gonna contribute, you know, meaningful revenue. It's gonna finally hit his chart towards the upper element of his customer continuum.
The VA's been down at the lower quadrant most of this year, in part because they wanted to do a test to roll out the solution, see how it was being adopted. I understand that. We've now cleared that. We're still waiting for them to give us the final go ahead on exactly how they wanna roll out in the future on a more accelerated basis.
Okay. So thank you. It's always a pleasure speaking with you all, and we hope to see you next year.
Thank you. Appreciate it.
Thanks for having us.
Thank you so much.