MD&A: Turning point, return to growth expected:"OUTLOOK The growth in Q3 2023 revenues over the prior year may represent a turning point in the underlying economic conditions so many of our clients have been facing. Total revenues are down year to date due to a sizeable non-recurring contract completed in Q2 2022.
The change in revenue mix for Q3 has meant a decline in margins to 51.7% in Q3 compared to the same period in 2022. However, year-to-date gross margins were 51.7% compared to 51.0% year-to-date in 2022, as the non-recurring data collection project completed in Q2 of 2022 had lower than standard margins.
As we look towards the end of the year, we have just completed the acquisition of Alta360 Research, Inc (Alta) and its sister company, a new venture, Ardent Retail Services Inc (Ardent). The Alta customer experience measurement services revenues will bolster existing recurring services revenues. We are currently in the throes of integrating Alta’s highly experienced workforce and getting acquainted with their client programs. We have already identified several opportunities for future growth. In addition, we are excited about the prospects that Ardent, a field services company, will bring. Looking towards the future, we are returning the organizational focus towards growth. We will leverage the Alta opportunity and lean forward on the Ardent business, which was purchased as a start-up. The Ardent business leverages the existing Intouch client base and has the potential for significant customer contracts in the seven and eight figure range. Ardent will allow us to leverage our industry and field services expertise to deliver new service offerings, albeit with different contract lengths, margins, and methods used to resource them. Due to the size of the agreements, Ardent revenue will deliver a lower margin than the traditional Intouch product lines. However, the business is expected to be a significant contributor in not only revenue but EBITDA, income and cash flow as well. While we still need visibility to the full Ardent revenue timing or potential, we have started to see revenues from the business unit in Q4.
In addition to leveraging our most recent acquisition, we are focused on organic growth, as seen in our selling expenses, which increased through 2023 as we lay a foundation for additional account acquisition. We are currently engaged with more brands from within our target industries than ever before as we continue to focus on thought leadership and adding real value within those industries. With the pandemic behind us and the economy starting to recover, Intouch is committed to finding pathways to deliver significant revenue growth.
Should Ardent revenues become significant, we expect pressure on margin percentages but increasing contributions towards the bottom line. There will also be short-term financial pressures as we integrate Alta and continue investing to prepare the organization for future growth. As always, we continue to monitor economic pressures to ensure we are spending wisely and are ready to react to both positive and negative pressures. We remain committed to managing the business carefully balancing growth and fiscal diligence."