Good morning, and thank you for participating in today's call. Now I'll turn the call over to Chief Legal Officer, Mr. Bob Chamness. Sir, please proceed.

Thank you, and welcome to our Q3 conference call. Riley McCormack, our CEO; and Charles Beck, our CFO, are with me on the call. I'm also pleased to introduce Niall Murphy, the CEO and Co-Founder of EVRYTHNG, who will be available for questions during the course of the call. We are hosting this call from London, England at the corporate headquarters of EVRYTHNG. On the call today, we will provide an overview of the EVRYTHNG acquisition, and our path forward as a combined company. We will also discuss Q3 financial results and provide a business update. This will be followed by a question-and-answer forum. We have posted our prepared remarks in the Investor Relations section of our website and will archive this webcast there. Before we begin, let me remind everyone that today's discussions contain forward-looking statements that have risks and uncertainties. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially. Charles will now comment on our Q3 financial results and discuss the financial aspects of the EVRYTHNG acquisition.

Thank you, Bob, and hello, everyone. Today is a monumental day for the company as we join forces with the amazing team at EVRYTHNG. Before I get into that, I want to provide a quick summary of Q3 financial results. Revenue for the third quarter was $6.4 million, up 12% from $5.8 million in Q3 last year. Service revenue increased 17% from $3.4 million to $3.9 million, reflecting higher commercial services related to HolyGrail 2.0 Projects. Subscription revenue increased 4% from $2.4 million to $2.5 million, reflecting higher revenue from commercial customers. Total commercial bookings were $3 million, up 60% from $1.8 million in Q3 last year. Operating expenses for the quarter were $12.2 million, flat with Q3 last year, reflecting higher consulting and recruiting costs, offset by severance costs incurred in Q3 last year for organizational changes we made in July 2020. In September, we received confirmation from our lender that our Paycheck Protection Program loan was forgiven. This resulted in a $5.1 million gain in other income in Q3 upon forgiveness of the loan. Net loss for Q3 was $2.9 million or $0.17 per common share versus a net loss of $8.4 million or $0.68 per common share in Q3 last year. Excluding the $5.1 million gain from the forgiveness of our PPP loan, the net loss for Q3 was $8 million or $0.48 per common share. We ended the quarter with $52.5 million in cash and investments. We used $8.6 million of cash and investments during the quarter, of which $7.5 million was from operating activities and capital expenditures. For further discussion of our financial results and risks and prospects for our business, please see our Form 10-Q that we will file shortly. Now back to the EVRYTHNG transaction. I want to first highlight a few important deal terms summarized in the 8-K we filed this morning to provide more context. First off, this is a stock deal, with the consideration split into 2 tranches. The initial consideration will be issued at closing, which we expect to occur in January 2022, and the second tranche of consideration, if any, will be issued in September 2022. The initial consideration in January amounts to $50 million of common stock and warrants as adjusted for EVRYTHNG’s cash, debt, working capital and transaction expenses at closing. We estimate that we will need to fund approximately $7.9 million at closing in order to cover EVRYTHNG’s closing costs and other repayment obligations. We expect this cash expense to be offset largely, if not completely, by proceeds from the exercise of the warrants that we will issue to the sellers at closing. The number of shares to be issued at closing is based on a fixed value of $47.48 per share, which represents the volume-weighted average price for the last 20 trading days. We have estimated the number of shares to be issued at closing at approximately 785,000 common shares and 215,000 warrants. The exercise price of the warrants will be calculated as described in the 8-K. We expect that the exercise price will represent a substantial discount to our current share price. The warrants will be issued to provide EVRYTHNG shareholders the opportunity to cover their cash closing costs and thus received the full number of shares they would have received without those closing costs. The exercise price was set low to provide them extra cushion to do so. To offset this lower exercise price, the amount of shares we are withholding is higher. While I encourage you all to read more details in the 8-K, the net of this is, EVRYTHNG shareholders exercise their warrants, they get the number of shares they would have received at the $47.48 price prior to adjustment. If they do not exercise their warrants, than the total shares issued at closing will have been reduced by 30% of the cash closing cost amount that Digimarc funds. The additional closing consideration payable in September will range anywhere from $0 to $50 million of common stock. There are 2 features that could reduce the closing consideration from the maximum of $50 million. First, there's a traditional earn-out based on a product annual recurring revenue target. If EVRYTHNG meets or exceeds $10 million of product ARR as of the end of February 2022 then there is no reduction. If EVRYTHNG does not meet the $10 million product ARR target, then the closing consideration payable in September is reduced by 10 times the amount of the dollar shortfall in product ARR. Second, there's a reduction of the closing consideration if Digimarc stock appreciates above the $47.48 price used in determining the initial consideration. As measured during the 20 trading day period prior, ending on September 22, 2022. For example, if Digimarc’s stock were to double as of September 2022, there would be 0 additional closing consideration irrespective of EVRYTHNG’s product ARR results. While we are super excited by the future combined company, as you will hear Riley talk about in a bit, we are reticent to part with the single share of Digimarc stock even at almost $50 per share. And so we structured the deal with that in mind. The structure of the transaction is intended to provide us 2 levels of downside protection with 1 upside kicker. If EVRYTHNG does not meet the product ARR target, the closing consideration is reduced by 10 times the dollar shortfall. In addition, if Digimarc stock is below the $47.48 price as measured during the 20 trading day period prior ending on September 22, 2022, any consideration owed in the second tranche is calculated using the $47.48 lower. Meanwhile, we get full credit for any stock appreciation between now and the second tranche, which, in essence, allows us to benefit from a signed deal today, but significantly limit the dilution if our stock is appreciably higher by September of next year. The structure is intended to result in a valuation of EVRYTHNG of between 5 times and 10 times product ARR with the ultimate valuation depending on the February 2022 product ARR and our stock price. For high-growth, high-margin SaaS business, even before considering all of the strategic and synergistic value we expect this transaction to provide us, this is a really attractive valuation. This headline valuation multiple is a testament to the vision of the EVRYTHNG shareholders as they see something, which you will hear us say many times in the future. We are just simply better together. More on that in Riley's remarks, but I want to first provide some more financial context. The financial figures I'm about to discuss have been prepared by EVRYTHNG’s management and have not been audited. Note that EVRYTHNG prepares its financial statements in according with FRS 102, also known as U.S. GAAP -- or U.K. GAAP, sorry. These financial figures have not been reconciled to U.S. GAAP. EVRYTHNG uses the financial metrics annual contract value, or ACV, and product ARR as leading indicators of future top line growth. While ACV is very similar to the financial metric we used for the same purpose bookings, they're not the exact thing. For the first half of 2021, EVRYTHNG’s AVC -- ACV was $3.2 million compared to ACV of $2.5 million during the first half of 2020, growth of 29% year-over-year. For the first half of 2021, total revenue was $2.5 million, of which product subscription revenue was $2.2 million and the rest was service revenue. Product subscription revenue for the same period in 2020 was $1.8 million or growth of 21% year-over-year. As of September 30, 2021, product ARR was $4.9 million. We believe product ARR is the best indicator of the next 12 months of subscription revenue, but it may be conservative as it does not reflect revenue growth from new customers or expansion with existing customers. It is simply an annualized snapshot of the current product subscription revenue line item. Thus, annualizing the first half of 2021s $2.2 million in product subscription revenue, comparing that to the most recently finalized product ARR number of $4.9 million and then looking out to EVRYTHNG’s projected February 2022 product ARR at a target of $10 million should give you a sense of the current growth rate and near-term prospects of this incredible business. Subscription gross margins are in the low 70% before any revenue share payments from deals brought in by EVRYTHNG’s robust partner network. While this is all preliminary, we believe we can optimize their cost of sales and get subscription gross margins into the high 70s at existing revenue levels with expected revenue growth, subscription gross margin shipper expand. EVRYTHNG is currently using around $2 million a quarter to fund its business. They're able to increase their product ARR, the cash usage should decline significantly given the just mentioned high subscription gross margins Riley will now provide a business update and further details on the strategy behind the EVRYTHNG acquisition.

Thanks, Charles. I want to use the bulk of my prepared remarks to discuss the EVRYTHNG acquisition and the results of our first annual product strategy meeting because both events have set our company on a different trajectory. And while we realize that it might only be through the passage of time in the marking of business travel that the true delta will be fully appreciated. I cannot stress enough how wonderfully impactful we believe these events will prove to be. As we say internally, we are not going through a transition for the transformation. For those of you who have followed the Digimarc’s story for a while, EVRYTHNG is a company you likely know well. They have been a valuable go-to-market partner for 5 years, and we share multiple customers who have realized themselves something we are today permanently [indiscernible]. Our 2 companies just make so much sense together. For those of you not as familiar with EVRYTHNG, they pioneered and are the market leader in the category out of the product Cloud. At its core, the product Cloud provides a cloud-based digital twin for any physical item. From birth to rebirth, this digital twin or active digital identity records an analog item's journey, allowing a tremendous amount of knowledge and insights to be gained. Data heretofore uncaptured is now easily accessible, analyzable and actionable, powering true digital transformation. And items ADI allows an analog item to be born digital enabling it to enjoy all the informational and business transformational advantages that digital items have enjoyed for years. Today, some of the world's most respected companies are using the EVRYTHNG product cloud to gather and applied data from and about their products as these items move through the supply chain, powering solutions such as traceability, product authentication and consumer engagement. As adoption of the product cloud increases, not only with the features within these 3 applications get more robust, but the number of applications will grow. Similar to how the utility of the internet has grown as more people have connected and more minds are focused on unlocking value from the original Cloud. Digimarc, as you all well know, provides a unique means by which to provide the same analog item as well as digital items, a deterministic identity. We separate ourselves from other means of identification by waterfall of 3 attributes: a, we are covert; b, because we are covert, we can be ubiquitous; and c, because we can be ubiquitous, we are redundant. For solutions that require 1, 2 or 3 of these characteristics, we will either be the best or in many cases, the only solution. The synergies and logic of this combination are obvious. Today, we are combining a unique and advanced means of identification with the pioneer and most advanced supplier of traceability business intelligence to any means of auto identification. While we will always have customers that will want one or the other, either solutions built upon our unique means of identifying an item or our product cloud with a non-watermark product identifier. For those that want both, which we believe will be a large part of the Venn diagram, we are eliminating the hassle of having to stitch together their own solution. We will have done that integration work ourselves, making our customers' business problems that much easier to solve and thus our value to those customers that are much greater. Importantly, this isn't just a thesis. As I mentioned before, we already have shared customers that have beat us to the punch. For those visionaries, we look forward to optimizing our combined solutions, making what you bought separately, even that much better now that we are one. For our future customers, we look forward to saving on the hassle of having to do this integration work yourself. And to both groups, just wait until you see where we're taking our combined road map. Now that a single company is taking ownership of that much more of your business problem, our ability to make your business better has increased dramatically. More specifically, the rationale for this deal is as follows. First and foremost is the people. EVRYTHNG pioneered the private cloud market. They nimbly turned an idea into a product, convincingly evangelize the need for this product and then succeeded in making converts of some of the world's most respected companies. They are collaborative. They are curious, they are courageous, and we are thrilled to form 1 team with our new colleagues. So much so, in fact, all the rest of the benefits I'm about to list are pure upside. If all we were gaining in this deal were these incredible like-minded teammates, that alone would have been rationale enough. The second rationale for the deal is the product. As I mentioned before, EVRYTHNG isn't just a pioneer. They are the market leader in the product Cloud. We are still in the very early stages of the world's inevitable march to true digital transformation, and there is a need for a powerful product graph to enable this movement. If the last 2 decades saw the building of the human graph as one of the most dominant tech trends, we strongly believe one of the defining trends in the next 2 decades will be the building of the product graph. Compared to its human equivalent, the product graph will be factors larger. Just as CRM and ERP data clouds have become core business platforms, so to the product data cloud as the data from the products themselves has a large role to play in providing transparency, business integrity, operational efficiency and sustainability impact measurement and responses. The size and utility of the product cloud is still in its infancy. Today, we are combining with the market leader. The opportunity ahead of us is enormous. The third rationale is about -- the third rationale is the value our combination will bring to our customers, partners and prospects. The best determinant of a technology products' true value is how much of the customer's problem that can solve as full ownership of the business problem is what enables a product to become a solution. By providing an analyzed item with the unique means of deterministic identification, using that identification to connect the item to its digital twin, applying an ever-increasing amount of business logic, both programmed and predictive to that digital twin and then allowing for easy access to that business logic, we not only provide a complete solution to a customer's problem, but began to unlock solves to additional problems due to that item residing at the nexus of our dual platforms. We will now not only be able to solve for the problems that brought the customers to our door, but also provide an easy solve to problems the customer wasn't contemplating solving when their journey with us began. The fourth rationale rests on the edges of the above-described solution. As I mentioned earlier, EVRYTHNG is plenty of customers where today, another form of ID works perfectly well as a bridge to a digital twin. Meanwhile, we have plenty of customers where today they don't need a product cloud to benefit from our unique form of deterministic identification and solution which these IDs drive. And while we will happily support customers and partners who don't see the need for our combined solution, having those close relationships across our newly combined company allows for future cross-selling, be it today or in the future. Fifth, one of the many ways our 2 companies are complementary in geographic presence. EVRYTHNG is a European company finding much success in North America. Digimarc is a North American company with plenty of opportunities in Europe. Both companies just instantly built their international presence, staffed by A plus plus talent steeped in the same culture. There are additional benefits from this combination to numerous dimension, strategic as well as tactical, but I want to add one last thought before we pick this back up during Q&A. Of all the wonderful and synergistic logic for the deal, the one that does not factor in at all is headcount reductions. Both companies are aggressively hiring in front of the massive opportunities ahead of them. As a result of this deal, those opportunities are only going to be larger and more numerous. And now that we and our customers can begin to imagine where we will take our combined solution, there will be even more urgency from both sides to get there. So I want to be very clear. There is room on this bus for both teams. And in fact, during and even post full integration, we're still going to be in hiring mode. I want to end this part in my prepared remarks by going back to the first and most important rationale for this deal, while speaking directly to all of my teammates, both old and new. Today, we are beginning our 1 team story. While everything about this combination excites me, it is a combination of these 2 teams into 1 team that excites me the most. Outside of our newly enlarged 4 walls, I don't expect this to be as fully appreciated as it is by all of us because I don't know how anyone outside of our newly and large 4 walls are fully fed and where we will go, let's go show them. Turning now to the results of our first annual -- our first ever annual product strategy. I'm thrilled to share with you the output, which cements our seminal pivot to being a product-led company. This is the first checkpoint in the journey we discussed on the Q1 call in late April. When we talked about the importance of owning our own future instead of allowing anyone with a logo and a small check to consume our valuable engineering resources by having us build the bespoke solutions not supported by proactive market research. Most technology companies start by identifying a problem and then work backwards to provide a solution to that problem. That is so much easier than the alternative, which is what we did, starting with the technology of almost unlimited applicability and incredibly wide moats and deciding what problem to attack first. But while the former is easier, I'd rather have the latter, because it means our ultimate opportunity set is virtually unlimited, whereas a limited scope means a limited ultimate price. Thus, starting where we started is, by far, the preferred option, with a very important disclaimer as long as you bring your own discipline because the market instead of forcing that discipline upon you will do the exact opposite and try to pull you in 100 different directions. Discipline requires first spending the time to thoroughly research all the potential problems we could solve in order to understand, among other things, the market size and growth, the competitive set, both current and future, our ability to provide a differentiated solution of full understanding of the market readiness and the dependencies which we cannot control and gaps in our offering and how best we can close them. Discipline, then, requires taking all that research and applying an overlay to determine how to prioritize this sequence among potential opportunities, and then even more importantly than that, having the guts to say no, whether that is a hard no or simply a not yet. Or said a lot more directly, discipline requires taking the time to plan and having the fortitude to say no, both of which are the result of having the mental clarity to realize the best way to get to everything is to start with some things where you run the real risk of delivering nothing. This is the why behind ABS, the realization we must move with purpose to build our own solutions and thus build our own future. Now let's get to the wire. The criteria by which we measure and will measure all potential solution candidates are as follows: first, as a solution target a large and quickly growing market. Second, will our solution be high margin and scalable? and third, does our technology provide a differentiated unlock? This last one is key, and in some ways, is a reiteration of the 7 criteria. Just addressing a big and fast-growing market isn't enough. Our technology must provide an incredibly wide moat as from that mode will come our ability to achieve high margins and shorter sales cycles. We also added a nice to have, something without which we will not roll out a solution candidate but instead provides a tool for prioritization between viable candidates. Does the solution candidate build out our network effect and augment our race to ubiquity. With that as our guide, coupled with the prodigious amount of work for both our product and engineering teams, we have settled on our first solutions: one, product authentication anti-counterfeit or pack; two, online brand protection or OBP; three, recycling; and four, Product Cloud. To be clear, this is where we are starting, not stopping. For example, in addition to these we have one solution we hope to be able to talk about in the not-too-distant future but are not yet ready to publicly disclose. Moreover, we have and always will have a pipeline of solution candidates. And it is very likely that one of the strongest sources of solution candidates will always be the market itself. To that end, as important as deciding what businesses we are in today, we have also formalized a process with which we will handle inbound interest. As this can be a wonderful source of idea generation if managed appropriately. Inbound request scoped correctly, brings 3 clear benefits. The first is generation of revenue from customers or partners willing to work with our existing tools, instead of our finished solutions. Understanding clearly, they will have to make do without any support from our engineering team, who is busy building our future. They're not theirs. The second is a learning the product team to an area of potential market interest and thus acting as a source of for-profit market research; and the third is providing research and introduction to a paying partner, if there are things on their 2 research lists, this inquiry would allow them to cross off. To be clear, there are all sorts of checkpoints in place where any inbound interest can be shut down. As we stated on that April call, our engineers and their road maps are not for rent. The listening to prospects instead of turning off that voice of customer is a real key advantage of the almost universal applicability of our technology will always provide. In fact, the solutions above -- in addition to this solution, which we are not yet ready to disclose all came about by means of customer in gray or in the case of product cloud by means of customer actions. This wonderful trend of having prospects provide the starting point for our market research process should continue for years because the number of people who have thought about how our technology can make their company and their industry better is probably measured in the single-digit millions, that leaves 7.7 billion people yet to approach us with the problems they would like us to apply a generationally transformational technology to solve. Looking out years into the future, I don't know what our final solution count will be. But one thing that is clear to us is that our product, go-to-market and technology strategies must be aligned to enable our customers to seamlessly take the next step in their journey with us, regardless of where they began. One of our key points of both differentiation and value is that there will always be additional steps available for our customers to take. Exiting our first-ever APS, it is clear what we must and will do. We will make it easy for customers to begin to realize value with us. We will create long-standing relationships that provide our customers exponential value by constantly providing additional solutions and thus constantly addressing more of our customers' problems, and we will always be there to guide our customers on the best way to achieve that latent exponential growth value. Tying together these 2 seminal events, a few points are worth making. EVRYTHNG’s focus on product authentication will make our pack offering that much stronger and vice versa. We are now able to augment the unique benefits of our existing solutions with a programmatic and importantly for this area, predictive logic EVRYTHNG is built into its authenticate module. Overnight, 2 differentiated offerings just put another lap between themselves and the competition. Over time, even more space will be opened as we combine our solution road maps. The same synergy holds true for recycling. Consumer education and engagement is a big part of solving for higher recycling rates and EVRYTHNG through its amplified module. It’s a thought leader in automating business rules to optimize its engagement for both the consumer as well as the brand. In addition, to meet the diverse needs of all stakeholders, brands and retailers, sorters and recyclers, PROs and regulators, among others, it is clear that a terministic sortation system must be dynamically updatable via the cloud. It is the only way to build a system that is dynamic enough to accommodate the unknown requirements of the future while at the same time is robust enough to handle the inevitable supply chain mistakes at the present. In addition, it is the only way to provide real-time improvements to both the efficiency and efficacy of the entire system. Just like it will be true for all of our solutions, our recycling solution will not only benefit from the synergies unlocked by a joint road map, but perhaps most importantly, for those that want our combined solution, the friction of adoption will be reduced as we handle the integration work ourselves, instead of forcing this integration work on our customers and partners. Moreover, until today, the minds behind the largest and most trusted product cloud and existence have been absent from the cross-value chain collaboration that is HolyGrail 2.0. We believe whenever form and structure the recycling cloud ends up taking, having EVRYTHNG’s input and experience, not to mention thought leadership and trusted relationships, as part of the process will benefit not just HolyGrail 2.0 but also the industry and that's ultimately the planet. The 2 seminal events we are announcing today are forming 1 team with a long value go-to-market partner and Digimarc's transformation to a product-led company are not only each important in their own right. They are also additive to each other. I'm sure you all have plenty of questions, so we want to get to Q&A shortly. But before we do, I would like to spend a few minutes on recycling. As is obvious to anyone in any form of social media, HolyGrail 2.0 is gaining more and more visibility. However, our focus extends beyond a successful trial to driving widespread adoption is only through cross-value chain mass adoption can circularity be achieved and recycling rate targets and pledges be met. That is why we were working with all states you convince them now is the time to pivot their thinking. Due to the hard work of a lot of brilliant and dedicated people inside our 4 walls, but importantly outside as well. It is becoming obvious that our technology works and if adopted, can help turn the tide of the plastics tsunami. As we continue to fully support this project and are appreciative of the impact it is having on opening eyes across the value chain. For both an industry and a regulatory perspective, we believe the time is right to focus on how the value chain begins to move to adoption. In addition, we are still focused on opening additional fronts for introducing the benefits to come with the adoption of digital watermarking, especially outside of Europe. We believe friction will be reduced once the first domino falls and the necessity of additional programs will [indiscernible] to zero. Until we are there, however, we are selectively pursuing other opportunities that will lead to the delivery of additional obvious proof points. We will race through the finish line of global adoption. The stakes for our planet are just too high for us to do otherwise. We all realize the world is watching to ensure words and tests will turn into actions, solvent for the end-of-life problem with plastics is a global imperative, and we are firm in our belief that in digital watermarking, the industry now has a valuable solution to this problem. It has been wonderful to see more and more stakeholders also come to that realization. We are trying to convey a sense of prudent urgency because every day of delay between here and eventual adoption comes at the price of real environmental harm without the benefits of any true value-added additional proof. This is where our heads are and the message we are carrying. Operator, we are now ready for the Q&A session.

[Operator Instruction] Your first question comes from the line of Harvey Mordka with -- he's a private investor.

Can you discuss the patents that are coming with EVRYTHNG?

Niall, do you want to take that?

EVRYTHNG has a small portfolio of patents pertaining to the redirection of digital content from physical identities on products and various aspects of digital authentication, utilizing data science methods. These patterns, we believe, are very complementary with the identification methodologies that Digimarc already has, and it's a substantial portfolio.

Also, are reaching any new contracts with a Walmart or Procter & Gamble, Wegmans? I haven't seen anything that indicates some new additional cash flow.

You are considering 60% growth in bookings anything, Hardy for the quarter.

I guess I'm not saying it.

I realized that, there's not a whole lot we can share with names and logos. I think that goes for almost every company in the world, so.

[Operator Instructions] Your next question comes from the line of Robin Knipp with Janney Montgomery.

I’ve been on a number of webinars of late all involving digital watermarks. So I must confess, I cannot remember which one it was that I've heard this, but Riley, can you talk a little bit about how digital watermarking can be incorporated with artificial intelligence? And where this most recent acquisition may take us in that capacity?

So depending -- so artificial intelligence is a big area. What artificial intelligence is trying to do is take inputs and come up to an answer, right? We have a deterministic input. So we can make any artificial intelligence system better by providing as opposed to looking for 3 or 5 or 7 probabilistic inputs, we provide deterministic. We allow artificial intelligence to be easy when we're present. There's also an application of our technology because one of the areas of artificial intelligence -- one of the difficulties of building artificial intelligence system is training that system, right? A lot of the time that's done through human means actually looking at 10,000 photos of an item and trying to determine what it is. We can provide that easy mechanism for training artificial intelligence. And I'm going to turn it over to Niall to talk a little bit about machine learning and the predictive business intelligence that EVRYTHNG brings to us.

Thanks, Riley. So yes, the product cloud is able to collect data points from physical items using the deterministic identities on those item as they move through a value chain, for example, and then apply real-time analytical technologies, including machine learning methods with those data points to derive application conclusions. And the combination of trustable input data points from the tracking of items with the predictive or analytical analysis of those elements in real time is able to create powerful application benefits. From current application point of view, EVRYTHNG is in a preproduction mode and a variety of predictor methods, specifically applying traceability data points in the supply chain, where one gains partial data samples from a subset of products in the supply chain, for example, to build predictions of a potential, for example, integrity threats for parallel trade within a supply chain. And so these techniques are currently in test mode, not in production mode.

Yes. But if you think about that, obviously, there's a lot that programmatic learning can do in supply chain. But when you're dealing, for example, bad actors, product authentication predictive, staying ahead of what they might be coming up with next is huge. And that's just -- I mean, if I were to list every single complementary overlap between these 2 companies, it would be a 5-hour conference call, Robin, but this is just another area where it's as we were both digging into each other like outlook another fit. It's amazing.

Your next question comes from the line of Jeff Bernstein with Cowen.

Can you just talk, Riley, about both the PAC and FOBP offerings? And give a little color around why those are ones that you're particularly interested, the level of customer interest or the problems to be solved that are at the forefront, et cetera? Any color you can add.

Sure. So I mean, as I mentioned, all of our solutions were things that -- ideas generated by the customers and we then did the research. We're going to have a lot more on this as we begin to start marketing the solution. So Jeff, I'm going to ask you to bear with us to get our product market research out and out of the world and show them why we are this a valuable solution here. But both of these were areas where customers came to us. I think I mentioned this on the April call, where customers would come to us and say, "I think if I understanding your technology, this could be an unlock for us." And we have multiple customers on this front that have already started, they haven't waited. I mean, what's amazing about this, we're pre-version 1.0. We're still in beta, I guess, you could call it. We have paying customers. Fortune very high up. I'm not going to get into specifics, but very large customers who have come to us and said, you guys have a differentiated solve here. And what we've done is said, you know what, yes, you're right, we do. And let's go productize this and we'll make solution out of this, let's go to this market. It is a large market. I mean it's in the billions of dollars per year. The area in which we play is growing, I believe, from these numbers, 30%, 40%. But all of that market research, I take with a little bit of grain of salt because it's sort of like what was the online book market before Amazon got into it, right? We are a differentiated solved by ourselves. Us plus EVRYTHNG is a double differentiated solve. So whatever the market research numbers, and we'll share all these with you when again as we get our marketing behind all this out, Take it with a grain of salt because I think we're going to be adding -- we are going to be growing the market simply by our presence.

And then just on EVRYTHNG. So I'm just assuming this is a cloud-native capability, elastic, et cetera, et cetera.

Niall here. Absolutely. Yes, cloud-based platform, we operate multiple cloud infrastructures on a completely dynamic basis around the world to meet our global customer needs and handle a pretty large volume of variable transactional data.

[Operator Instructions] Your next question comes from the line of Jeff Van Rhee with Craig Hallum Capital.

This is Aaron on for Jeff. Just a few questions here for us. So first, on the EVRYTHNG deal. So just kind of curious to get a sense of the visibility to the growth rate acceleration. I think you mentioned kind of the 20% to 25% range over the first half of the year, obviously, assuming that, that goes materially higher. So what's the conviction and confidence there?

From our side or from EVRYTHNG side? So I will tell you, Aaron, that we have done customer diligence calls. We have gone through the pipeline, what the ultimate close rate is, I guess, the future will tell us. But this is a high-growing business that is growing, that is inflecting. What that ultimate rate ends up being, we will see. And I would say I think that I don't want to speak for Niall, but this is a target that they set as an ARR. And so they have -- again, it's impossible to predict close rate, Aaron, and it's the world's messier that's just on a spreadsheet trying to forecast these things out, but obviously, you have some comfort in getting there. And we validated that by going through their pipeline and talking to the customers. Niall, do you want to take about it?

Yes. And I'll second your comments, Riley. I think that the market space for digitization of physical items, global consumer brands appetite to be able to build this competence into their operating models is only accelerating, and we certainly see a healthy level of demand in the pipeline. The uncertainty factors are rate of conversion. And I guess we'll see, but we feel good about our outlook.

Yes. And we share -- this is -- look, acquisitions are risky, right? It's -- you're acquiring another business. I can tell you that -- as I mentioned, we've been a go-to-market partner with EVRYTHNG for 5 years. We have plenty of shared customers. We know where the trajectory for those businesses are, I mean they're sharing with both of us independently. Now I guess they're sharing with us together or once the acquisition closes. The customer calls that we did with EVRYTHNG’s customers glowing. I mean it was incredible to hear these well-respected gigantic companies talking about what EVRYTHNG team has done. So we shall see. And I guess not just what they've done but also the increasing need they have for more of what EVRYTHNG’s done.

And then on the bookings number, obviously, material acceleration sequentially and year-over-year. Just any more color you can give on kind of use cases where the strength is in those booking numbers?

Sure. Yes. Probably the biggest component there is the work that we're doing with HolyGrail, so that work continues to increase. And then we're also seeing, as Riley had indicated, some increased interest in the PAC area, the product authentication. Those are the 2 primary contributors to the growth.

Which is, again, just highlighting that. I mean we haven't even officially launched Version 1.0 PAC. We're beta and it's already seeing inflection.

And then last for us. Any update on thermal that been deployed and you're still looking to move ahead with package marketing speed checkout?

I assume you meant -- you mean Walmart?

Yes, just the thermal [indiscernible]

Is that what you're talking about when you talk about thermal, in general? I'm sorry?

Yes. It's just largely that product offering.

Yes. So you heard thermal was not one of the product solutions that we talked about going forward. Now so we have -- with the Walmart as was originally said in that original contract, thermal was part of that contract. They have what they need if they want to roll it out. Of course, for all of our existing customers we will support everything that we have sold them. What's wonderful about all of the work in our existing customers for all the products at our existing customers have, they are all synergistic with where we were going. So we will standardize for -- when we're talking about going forward, the post APS is where we're focused going forward, our go-to-market strategy going forward. And so thermal is not an area that we are going to be proactively selling going forward. We will support any customers who have our current customers in that area. And like I said, this is -- what we are building going forward, our solutions are really just different ways of putting together our tools. We need to advance our tools for all of our existing go-forward solutions. So any existing customer will be brought along because we'll continue to do that work. But thermal is not an area we're focused on going forward, go-to-market strategy.

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Riley McCormack. Sir, please proceed.

Well, thank you, everybody. I know this is a different day and a different time slot than we normally do these calls, but we had a couple of things we had to get signed before we could do our call, so we appreciate you guys bearing with us. But hopefully, you guys share the excitement that hopefully you heard from us today. I think these -- both the APS but also this combination with EVRYTHNG is truly transformative, and we can't wait to show you guys the results of that. So thanks, everybody. Have a great rest of your day.

This concludes today's call. Thank you, ladies and gentlemen, for joining us today for our presentation. You may now disconnect.