Q4 2019 Earnings Call
At this time all participants are any additional my mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session. You want me to press Star one on your telephone please be advised to today's call is being recorded pure acquire any further assistance. Please press star zero or no.
Hi, I'm a conference over to your speaker today, Marc Cabi. Thank you. Please go ahead Sir.
Thanks, Jason Good afternoon, everybody and thanks for joining us today welcome to our fourth quarter and for your 2019 earnings call.
We're pleased to report our results joining me on the call today, our Mikkel Svane founder CEO.
Ensure the board and Elena Gomez, our Chief Financial Financial Officer. During the course of today's call. We may take forward looking statements such as statements regarding our future financial performance product development growth prospects ability to attract retain customers and ability to compete effectively.
The assumptions risks and factors that could affect our actual results are contained in our earnings press release and into risk factor section of our prior subsequent filings with the Securities and Exchange Commission, including our quarter. We report on form 10-Q, four the quarter ended September 32019.
And our upcoming annual report on form 10-K for the year ended December 31, 2018, we undertake no obligation to update these statements after todays presentation or to conform. These statements the actual results or to changes in our expectations, except as required by law. Please refer to todays earnings release.
At least for more information regarding forward looking statements.
During this call we will present, both GAAP and non-GAAP financial measures. The non-GAAP financial measures should be considered in addition to not as a substitute for or in isolation from our GAAP financial information you can find additional.
Disclosures regarding these non-GAAP financial measures, including reconciliations with comparable GAAP financial measures in today's earnings press release shareholder letter and for certain non-GAAP financial measures for prior periods in the earnings press releases of those periods all of which are available on our website.
With this brief introduction.
I would like to turn the call over Demichele [laughter]. Thank you. Thank you for that answer, though [laughter] why do you think smog and and.
Good afternoon, everyone. We are entering 2020 in a strong position to become a multibillion dollar revenue comedy. We ended the fourth 2019 with 36% revenue growth.
And we saw strong demand continue across helping business we.
Well on our way to crossing the 1 billion dollar revenue Mark this year.
We feel confident that I'll leadership, and CRM innovation is fueling our growth globally. In 2019, we saw strong demand for this and this suite.
Which is our omni channel customer service solution. While we also grew footprint in sales with our new send desk cell product and in the broader CRM and customer experience markets our Sunshine platform.
We consider ourselves exports in making business software easy to try.
He sees <unk> and easy to use and we are bringing that expertise waterworld CRM and customer experience as we become a service first CRM comedy.
2020.
We plan to continue our investments in CRM innovation with a focus on powering every quarter.
Some of facing conversation that every customer facing touch point for customers and helping businesses keep up with rapidly changing customer expectations.
We are proud of our momentum in the enterprise and all of our large business outside of the U.S. and our teams have celebrate it.
Achievements in both areas, but we also believe havent, even bigger opportunity ahead of us. So thank you all across the most things or partners. Thank you to the Senate teams for an amazing 2019, I am Super do we're excited to shift our biggest launches an all new stuff.
The 2020 doing how sandisk relate user conference in Miami next months under the Sun and I hope to see all of you there too so with that Lena, but what's the U.S. She had much more about a results sounds good. Thanks, Michael a working 2020 with momentum given our strong.
It's a 29 team and our accomplishments that extended our leadership in serum innovation.
For the full year 2019, we delivered 860 million of revenue, which reflects 36% growth year over year.
We also delivered full year non-GAAP operating margin improvement of 270 basis points. These results reflect.
Their commitment to driving high growth its scale, while investing in long term growth initiatives.
Our growth over the past couple of years has been driven by favorable market dynamics strong adoption of our omni channel solutions and our continued move up market.
At the end of 2019 or percentage of <unk> or from 100 seats from 100 plus agency.
A proxy for enterprise was up 43% was up was 43% up three points year over year or P.O. at the end of 2019 was up 57% year over year with current RPL up 40% and long term RPL up 132% year over year.
These metrics highlight our success moving up.
Market as we get larger more strategic and longer term engagements with our customers.
We expect market factors to continue to drive high demand for our customer experience solutions as organizations transform their businesses to serve their customers better.
Over the past two years, both enterprise companies and partners have been gravitating to work with US. We believe this is apart.
We believe this is in part of results of our newly introduced platform capabilities, which enable companies.
Build modern customer experience, so solutions natively on Zendesk and 2020, we're growing or investment to foster our move up market with some key investments being made in our Sunshine CRM platform Sunshine conversations and.
Rise motions in 2020, we intend to broaden our work with valued partners. These investments in turn should allow should grow at assist that sustained high growth rate over the next several years.
Now onto guidance in 2020, we expect to exceed our previously stated goal of 1 billion of revenue, we're providing full year 2020 guidance of one.
0.0, 5 billion to 1.07 billion, which reflects 30% growth year over year at the midpoint, we're committed to delivering scale, while investing for growth with our guidance for full year 2020, non-GAAP operating income, reflecting approximately 125 basis points of margin improvement year over year at the midpoint.
Longer term as Michael said, we're building to be a multibillion dollar revenue company and excited to be on this journey with you our customers our partners and all of our employees.
Thank you and I'll turn the call back over to Mark Thanks, Wayne and we're excited about our position as we enter 2020 with momentum we're leading in CRM innovation.
As a service first company.
CRM company and we're building zendesk to become a multibillion dollar revenue company over that long term.
On March March 4th the Miami as Bill stated, we're hosting our investor and analyst event as part of relate.
It is our annual user conference.
This event, you'll be able to learn more about.
Our customer experience solutions and our vision for the future. We hope you can make it and please be sure to register for this event if you have not already.
Or feel free to watch it a watch out through our website. If you can't make it I'd also like to spend a moment, specifically talking about our full year 2020 free cash flow.
Guidance that range is $40 million to $50 million for the year embedded in this guidance is a plan to revise how we invoice customers. The invoice cadence that we'll have a onetime impact of delaying cash collections by up to one month and a similar impact to billings.
And with that.
I'll turn the call back over to Jason who will set us up for acuity.
At this time, if he would like to ask your question. Please press star.
The one on your telephone keypad, we'll pause for just a moment chicken barbecue and air roster.
[noise]. Your first question comes from a line of Phil Winslow.
From Wells Fargo. Your line is open.
Alright, Thanks, guys for taking my question Congrats on the close the year actually just wanted to focus on that last comment there that you made mark about the change in.
Oh, and I guess billing billings terms is going to affect.
Billings I guess receivables to could you just sort of walk us through the mechanics of.
Sort of what's changing how that's going to do the fact that affect items on just one follow up to that.
So from the early days is then desk, we invoice customers 30 days prior to the ended their subscription renewal, which is has in our view creative friction with customers around exactly when they renew.
To create a better customer experience, we will be notifying or customers that 30 days that their subscription will renew and then actually invoice them on the they have their renewal and so that will slide or collections, presumably by up to 30 days as.
As a result of that.
And this is kind of a consistent with industry practice and what most people are used to when they subscribe to assess types of software.
Got it and then just.
One follow up to that in terms of you clearly doubling down until the new initiatives here. It sounds like particular on the go to market side. What are you could just walk us through sort of.
20 in sort of that growth versus.
Terminal margin expansion. Your framework. So you talked about last may sort of what's a little different about about 2020 that because quite doesn't fit in that and that old framework. Thanks.
Yeah, I'll take that so essentially as we as we so we always use our framework just Phil.
So you know as a starting point to begin the dialogue, but we're constantly balancing.
Growth and profitability as you know and as we are reflecting on 2020 thinking about our launch of Sunshine last year, a more formally focusing on enterprise. If you will partners gravitating to us we felt like.
This was an opportunity for us to Lennane and invest so that's really why we departed from that but there's no debate that we will continue to drive operating margin and always that's a starting point. So that's all say about that.
[noise].
Your next question comes from the line of Kirk mature enough from Evercore ISI. Your line is open.
Oh, yes second thanks, very much I think each of you actually mentioned word momentum in your prepared comments. So I was wondering if you get help maybe translate that into to what you're seeing in.
Pipeline that makes you feel good about the momentum that is carried through after a a really solid fourth quarter or whether that's the size and shape deals the nature of our multi product deals. If there's anything you just want to call out on that side might be might be helpful. Just put some context around the those comments. Thanks.
So I'll start I.
What we're seeing is that our products and mature to a point, where we're seeing acceptance by both enterprise customers as well as interest from partners to do work with those especially as we create the platform capabilities to behind Sunshine.
Where you can build natively on some of those endesa capabilities.
Great that's better customer experiences.
We've seen growing interest there.
We're very pleased with that and then as you know we meet our acquisition of Smooch last year.
And we think we're at the forefront of a new messaging paradigm.
Our Sunshine conversations messaging platform capabilities are being highly demanded and also within.
In our existing products messaging capabilities are being instituted which our customers are reacting positively too.
You want anything no differently like we've seen seeing strong momentum across the board Buffy liking that's a lot of hedging around the world. These days.
The with the different things going on in the macro.
As far as like it will be sold off.
We saw a lot of great commitments great deals.
In Swiss around all new platform initiatives, along with new products and we feel that we have body that the body that moment in some of that interest into Q1 in 2020.
Great and then just one follow up.
Europe you guys made some changes in leadership in Europe last year.
As we head into 2020, I guess, how do you see that market for you all shaping up just in terms of demand and then sort of the go to market operations said that you have set up to <unk> to kind of go after that thanks.
So I just wanted to see I'll find here that I'm. So proud of our team in Europe like they've done some amazing things at a great corner and we can all really celebrate a lot of achievements.
From the park water and like we talked last year about us identifying some unevenness and all in all regions.
We started focusing.
On that and then and we feel a lot bit about our progress that we still feel that we have work to do but I think thats on suggest an indicator of the opportunity than we have rather than anything else.
Thanks very much.
Your next question comes from a line of Chris Merwin, though.
From Goldman Sachs. Your line is open.
Hi, Thanks, very much for taking my question.
Yes, I know last quarter, you called out some deals that slipped out of Q3.
And I just wanted to ask can extend.
All of those deals closed in the fourth quarter and it sounded like they were some pretty large enterprise deals as well so anything.
You could you could say, but order of magnitude there would be helpful. Thanks, Yeah sure. Yes. So we did talk about that and in fact those deals did close actually early in the quarter. So you saw that through our billing reacceleration in Q4.
So we're pleased to see that kudos to the sales team for really.
Making that happen early in the quarter as you know that's important to us so.
Yes, really really probably the team.
That's great. Thanks, and then maybe just a follow up what did ask about explore and sell I mean I'll see these products have been out in the market now a while in and I know there's a more.
But enterprise focus now with these products anything you can say about further traction there to what degree that benefited net expansion looks like that metric was pretty stable in the quarter, but I'm just curious any color you could share on those two products. Thanks.
Well I first and foremost is very very very very satisfied with.
So the.
Both.
Adaptation that kind of the attachment to deals for analytics product explore a lagging small is a true differentiate us from us in the market. The ease of use for this product is unprecedented and.
Making a huge defense customers.
Why be.
An incredibly powerful platform. So we're very excited about oh and the adoption.
External.
And you can expect to see more on that front next year this year sorry.
Yes, we have continued to invest in that product and like all of our initial kind of view.
It would send has been really really fun and interesting I would say we've done a lot of different things while of course working on all the Bakken integrations that sets us up small building, even more stuff cost to sales and customer service organizations and be it just very excited about that have a lot more to talk about it really isn't much yeah would sell weve.
Fine moved into the main Salesforce now so that was a new change we made starting this month.
So that's good I mean that that really gets more people selling selling more people filling some of our flagship product. So.
Sure. Thank you.
Your next question comes.
From a line of Ken Wong from Guggenheim Securities. Your line is open.
Great. Thanks for taking my question guys.
The first question for a for a laying out when I look at your revenue ranges I guess for the year and for Q1, it looks a little wider than I guess, we're used to just wondering if there was a kind of anything behind that that we should be aware.
Uh huh.
No I mean, it was really just a reflection of us I'm turning the page to be a billion dollar company. If you sort of look at our size and scale now we just needed to widen that range, but our guidance philosophy hasn't changed in the way we think about how we guide hasn't change. It was just no felt like it with the right.
Time to do that given that were a much larger scale now.
Got it and then as a follow up but as we think about billings next year, obviously, though was a bit of a slip from three to.
Q3 to Q4 should.
Should we expect that returns to kind of maybe what we saw more an 80.
I mean or how any any color there would be great.
Yes, Ken.
So calculated billings for us is more difficult thing quarter to quarter because.
Not only about half of our customers invoicing annually, the rest are monthly or quarterly.
And so in any one quarter.
Quarter, there will be variability, but in Q3 of last year, we specifically called out the some deals closed in early October.
That's why we commented on billings, but normally.
Within a range that will continue do occur.
Current RPM growth and long term RPL growth are.
Hey, good indicators.
Of our contractual opportunities in obligations, we entered into with our customers. So I'd really ask everyone to look at a combination of current our peer growth and calculated billings together, but not in isolation from each other.
Great. Thanks, Thanks, Thanks for the hip.
Sure.
Your next question comes from the line of Gerry Ford from Cowen and company. Your line is open.
[noise], everyone and congrats on a good quarter, I guess kind of a high level question I mean, given some of the unevenness you saw last year in some of the sales leadership structural.
And just you made up what sides have you seen or the impact on productivity is as you went through Q4 I guess how are you feeling about how these structural changes set the stage for more consistent execution at 2020.
Yeah, So I'm not sure the structural actually I guess.
That's right as we talked about the the.
Velocity change and we're excited about that actually that's created by the focus that's where the cell team has been integrated I think that's what you're referencing so yeah. We're encouraged by the productivity out of the gate.
So I think we feel good about that I also think that.
Along in addition to those changes Michael talked about it just we still have some work to do in terms of leadership and that's all around the globe. So we still got plenty of work to do but we were encouraged by what we're seeing.
Okay, and it does sound like part of the a more aggressive investment.
20 is leaning into the channel should we expect to see larger sized start to formalize practices around zendesk or is that something we can see a 2020 or is that something to think about more as a 2021 event.
So I think.
We'll have more to see as we go through the year I will say that.
We've already made some progress with channel partners in with a as size, including you know the big ones like Accenture, we those relationships takes some time to build.
They have more things that they can use as part of their offerings to their customers now that we have platform capabilities.
To offer.
You know people like Accenture, and we pro and others to two.
To to build on so we're pretty excited about the in the early interest they've shown in this year will be I think we said this before this is a year where.
By the fourth quarter, we'd expect to see some contribution from the partners.
Thank you.
Your next question comes from a line of Stan Zlotsky from Morgan Stanley. Your line is open.
Perfect. Thank you so much guys.
A couple of questions from my end first one and I realized the imperfect nature of.
Things, but for what it's worth it.
Investors you focus on it so.
When when we see that when we think about.
The free cash flow of all the rather the the changes to invoicing and I'm, especially of the though that would presumably had a little bit more in.
Towards the back half of the you know when you have a lot of the enterprise invoicing happening in cash collections.
Should we think about the delta between revenue growth and billings growth next year as a result of these Oh God collection changes.
Yes. So I think you have to think about it has.
As a 30 day delay in both our billings as well as cash collections versus our book of business, that's kind of how I made my assumptions.
Remember, we have some monthly customers in there so those customers aren't impacted because they are on credit card, but that's kind of how you should think about building.
Model.
Got it and when when we look at net revenue retention on it stayed flat at a 116% which has a slightly slightly above your the kind of the midpoint of your.
Yeah expected range for net revenue retention.
I have one.
And 220.
How are you thinking about that as we go through 2020.
Oh that range is still valid for next year, one tend to 120.
Okay perfect alright, thanks, guys.
Your next question comes from the line of Brent Bracelin from Piper similar your line.
There's often.
Thank you I had one question and one follow up the question really here is around the Zendesk suite and if I look at.
Ah that adoption 6000, plus customers in the first kind of 18 months here, that's still a relatively small portion of the installed base.
Base now that you kind of have some data behind you what are the things you're doing in 2020 to try to accelerate kind of cross sell.
Any color there and that again, one quick follow up.
I just wanted to say I don't.
I believe that's a relatively small Todd [noise] like this is.
Like these customers are going on and on the customer experience in like that takes courage and it takes like.
It takes a you know and it takes more efforts and just like going in a single channel. So these are customers that are really you know forward thinking.
Hit on the curve and I'm, bringing all of these channels.
Into that customer service and customer experience operations. So we actually I actually believe we've been like the adoption has been we're very excited about the adoption, let me put like that and that Doesnt mean, we still have a tremendous amount of opportunity and this is on something where we believe we have a lot more innovation to bring to the table.
And we'll talk a lot more about it also in March under the Sun in Miami and wish we look very much phones.
The only thing I would add is that we continued to start with that as far as our I'm kinda opening you know, it's what the sales team defaults to first.
And we're continuing to see a lot of.
It's early early success in that the average deal size. Obviously, there is much higher so even though it may appear like it's a small number is really driving some growth for us.
And then just a follow up if I look at the growth trends by Geo certainly very encouraging.
She the reacceleration in AMEA, but that said of impact did get actually even softer this quarter than last quarter, you anything to call out there that.
Could drive some improvement in 2020 and any color on a pack and what happened there would be helpful. Thanks.
No I mean I think.
Nickel said it earlier, there's nothing more to say there other than that we're going to continue to drive a focus on getting the right leadership in both of our regions and I think.
In both EMEA and APAC, there's always going to be.
In a portfolio of countries some countries that do better than others, but theres nothing.
Alarming there at the moment.
Maybe just want to have that like even though that number's doesn't move maybe that grateful for the quarter.
The they did achieve some very important things laws that bode very well how this it up so Q1 and 2020.
Okay.
Thank you.
Your next question comes from the line of David Hynes from Canaccord. Your line is open.
Hey, Thanks, guys. Congrats on the results I've two questions one for Mcmullen one for Atlanta, So maybe first from a call when it like when I think of these customer experience our voice or the.
Customer platforms right firms like medallion qual trucks, and the like it seems like a naturally adjacent effort to what you provide right. It's you guys get access to tons of copper.
Customer experience data. So a few quick questions. There for so first do you agree with that view second what are those vendors do that you can.
And third is that an area that makes sense for zendesk to have formalized products at some point.
[laughter] well, yeah, it's like it's Super interesting like I think that.
And like a big part of the customer experience and providing great customer experience is kind of getting all these data points about like.
Patients and actual experience and like sentiment and all these different things like of course, we assume we're interested in it a lot about customers already kind of doing it out of these things around this and this platform and to ensure that the beep help them get all these data points in so and we do have integration with them out of the.
As in the market I'm working with none of them. So yes, we definitely it's definitely super interesting for US and you know we do some things around these things is basically a bomb issuing [noise].
Yes, et cetera, et cetera, as we have various.
In Poland has embedded as part of this solution, but this isn't cautionary we continue to be.
Sure, we'll get into and two invested.
Yeah, Okay access.
And then Atlanta, so [laughter].
[laughter] short term RPL exiting 2018 gave you about 40% coverage into 2019 revenue if I do the same mapping the midpoint of 2020 guidance I get about 43% coverage today.
Which leads me I believe there is some cushion in the guidance what are the factors that would cause that ratio to change.
Yeah, we really haven't a I would just start by saying, we haven't really changed our our guidance philosophy and we tend to be as you know backend loaded on enterprise. So we don't.
I used that as sort of my my room for upside down the road a in Q1 tends to be a.
And the oriented a quarter, so nothing's really changed I think it's really about.
Just being thoughtful about the guidance there.
Yep perfect. Okay. Thanks, guys.
Your next question comes from a line of broad cells from Bank of America. Your line is open.
Oh, Hey, guys. Thanks for taking my question.
Just one on the the focus on partners and go to market is is this primarily if if all goes well.
Oh, no indications are that it will in developing the global aside channel is this more of a play to kind of get those bigger expansion deals.
You know <unk> or is it more about Sunshine and getting partners kind of built some pre built solutions that could be repeatable.
I assume it's probably both but any color on just kind of where you could.
I see some real success as you invest more in the other partner channel.
[noise] itself.
Yes, [laughter] I think like I think about it from from a non buff different angles here life and like top of mind for me is like you know helping heavy.
Body. It was part of the equation here being most successful making sure they get the full value of the products educated and could really well and it really kind of get value from the from the product can work with us as we work with across most side.
You know at the same time it it's it's really about it it's really about us getting.
A small bandwidth in the market you know.
Than having to face all across most ourselves we can go and as it goes to a tremendous amount of profitability and especially in the markets. When it's already working really well for us like we had validation on that it's a bit to complete a different playful. So that I would say from my perspective. These are the two things online.
Yes, yes, no I think I think you're right I also think that they can bring us into deals that we may be otherwise wouldn't have known because they're working with a bunch of customers and with Sunshine. It just gives us an opportunity to extend.
Someone said it earlier create a practice around send us which is a kind of where we're headed.
Got it thanks, and then just just to clarify in some of the comments on Europe and Asia on the international subsidiaries. It sounds like that's still a focus on.
Getting some more senior folks and there could could we see those geographies outpace North America. If all goes well there how are you how are you thinking about that.
Yeah I want to.
Well the ball on on but obviously, we leave you international broadly as a tremendous opportunity and frankly as an advantage for us right half of our footprint continues to be outside the U.S. and continuing to grow so I won't individually a call that but it is an opportunity for us.
Great. Thanks, guys.
Your next question comes from a line of Alex Zukin <unk> from RBC. Your line is <unk>.
Hey, guys. Thanks for taking my question. So just maybe two quick two quick ones from me. So you saw some really strong current RPL and current RPL bookings growth and those growth rates were both ahead of.
Billings and revenue growth. So maybe can you talk about the performance in the quarter of the velocity business versus the enterprise business and also if youve Sac did you could stack rank from a growth perspective biggest drivers you see for Tailwinds in 2020 between called sell Sunshine.
And and conversations.
Yes, I think if you were to look at the differential in growth rates for current ARPU versus calculated billings.
Part of it comes from the fact that our SMB customers that maybe month to month, our transactional customers that may be month to month don't really participate in the ARPU number and so that there is.
<unk> differential there between our accounts served by our territory model, where their growth rates are a little bit faster than our SMB business, but it's not a huge difference, but there are differences in growth rates between those two businesses.
And obviously the enterprise has an opportunity to grow faster as we continue to get larger.
Drew larger deals then the second part of your question sacrifice problem No stink record products you know from my point of view I'd say, we have lots of opportunities around continuing to move our core products up market, but then platform and Sunshine conversations are two big ones. So I started conversations the platform.
These around messaging I bigger be are going to be an area of focus in 2020 for us and lots of customer demand to learn more about how they incorporate messaging into their business models.
Got it and then maybe just on a financial question can you.
Maybe just give us a quantification on the.
Magnitude of impact on free cash flow.
From from some of the changes and.
In contracting terms like whatever here is that a 20 million $30 million kind of headwind in terms of the way that you could give guidance for the for the year.
So you know I think that it's a about you know we will lose about.
30 days' worth it most 30 days' worth of collections. So I mean, I ask you guys into your math based on the book of business, we have but that's kind of how you should think about it.
Got it thank you guys.
Your next question comes from a line of Koji eye care from Oppenheimer. Your line is open.
Oh, Thanks for taking my questions a nice quarter how to question here on Sunshine. So it sounds like the platform is becoming more and more of the customer conversation, especially in the up market I guess could you talk a little bit about the customer reference ability of the Sunshine platform today versus maybe a year ago and given that.
Two of the floor pieces of the Sunshine platform Archstone early access are you seeing some pent up demand building for the full platform among the customers and prospects out or just maybe just waiting for those last two pieces to become GA.
And it's like it's like it's been a it's been an amazing if a us on.
Ill Sunshine journey here.
Jim and I think you're touching on something with everything Europe, you mentioned here.
That's also why we have very excited to talk a lot more [laughter]. This when we get under the Sun in Miami and modest because we have.
Most for about at that point around.
But it's been it's I would just want to say, it's been a remarkable year.
Jim It's a it's a true.
Transition for the company is the new chapter for US and we are excited to talk much more about it and all of the what we've been doing with customers over the last year I just went up a one emphasis on that comment you said, where it's a movie of sub market. It's also walls.
Also serving our midmarket customers as well and where you'll see some of the examples of that it relates so companies in the mid market size range are really finding value from our platform capabilities.
Great. Thanks for taking my questions.
Your next question comes from the line of.
Dave Koning from what Bush Securities. Your line is open.
Hi, Great Hey, Thanks for taking my questions I'll add my congratulations on the quarter as well just my first question I realize the old metrics don't really works out well with suite.
I'm wondering with regards to Sweden, so are there any.
Appliance or evidence you can give us you know it's up to kind of gauge your progress into turning to become this purpose the surface for CRM provider.
Yeah, I think our customer retention rates or a good a good example of why.
Our efforts through successful.
We've seen you know kind of customers that sign on what the sweet customers that have adopted omni channel become strong advocates of that method of doing business with their customers and they become sticky customers. As a result, so I think that's the proof point for me is that.
If a customer is really.
Interested in building better customer experience adopting omni channel, making sure. All these relevant channels are connected with their end consumer.
We provide a really good outcome for them and so that's kind of how do I would view the proof point.
Yeah, I don't think we have kind of created data point no data.
Yeah, you know.
Okay.
Okay.
Thanks for the follow up maybe just can you give us some more specifics on how you're going to spend the ramp in investments the lean in Atlanta was talking about.
Yeah, I mean, I think it's a it's all the things that we.
Lined up on the script, but it was it's really around Sunshine and Sunshine conversations investment in enterprise investment in partners.
You know continuing to innovate and you'll hear more about some of our products in Miami.
But broadly speaking definitely a big focus on go to market.
Okay, great. Thank you very much.
Your next question comes from the line of Jeff Van Rhee from Craig Hallum. Your line is open.
Great. Thanks, guys, just one as you could sort of move you know sort of the the higher into the market in the push up market what are the keys to improving your relevance and <unk>.
Competitive positioning specifically up market.
I'm thinking of you sort of how do you prioritize the things that are usually can be most impactful to push to improving your position up market would there be the partners slashed distribution, whether its product features capabilities, just specifically, maybe a little focused on up market competitive positioning and where you're going to really push.
I think you touched a little on Sunshine, but emphasize that wasn't just up markets I'm, just specifically asking about market.
So.
First and foremost like I think it's a lot of different things like that's a lot of different areas as the business where our execution.
Pardon a as.
With that home services with our.
Innovation extend it makes it up hotness system, where like that like I've, I've, where we need to execute well to continue our success in the answer but I do want to say that like a lot about differentiation is in the agility and ease of use with the product here that we can help our customers get results really really quick that we can help them changed really really quick that.
We can that nothing that they put in funds that they put in front of themselves that we cannot solve and help them get results I think that's still incredibly important part questions because the all live in an area where customer expectations changing so quickly so the agility them maternity off the platform.
That's a new.
That's a new pad foam sunshine, the Anthony Ws, where they are already moving replatforming fall, where the Jews all the all the development tools that is needed accessible their lives on them that you said really strong arguments for kind of the modern CIO for the modern enterprise today that want to that want to move fast that don't want like.
Bode anca off like the big legacy enterprise system that slowed them down and make every change take five or so that's a big part of a DNA. This big part of what we are and that's a big part of why we waiting in the enterprise.
Okay. Thank you.
Your next question comes.
From a line of Tom Roderick from Stifel. Your line is open.
Hi, It's actually Parker Lane in for Tom. Thanks for taking my question. So of in your prepared remarks, you referenced a lot of the developments in your self service capabilities, whether it be guide or answer bothered gather just wondering if you could talk about the penetration rates of those of the self.
Service tools today, and how the demand really compares amongst the SMB mid market customers versus enterprise customers for the solutions today. Thanks.
And I don't have anything in my I don't have any data points of kind of enterprises Midmarket was animates isn't the adoption of these things I do want to see.
That like ourselves of this product to guide product.
So the answer broad capabilities all of these things are incredibly successful.
And like.
Have become content and so what we're doing.
It is and if you look at ourselves is is it is how we want to get the service ultimately by helping.
Being ourselves and so like thinking self service assets as a whole.
As a as an equal citizen in your.
And your hobby thinking about your customer experience is is critically important for business today and then.
Well, yeah, I mean, I think the one way you.
Size. It is two three years ago, we would have told you that 90% of our revenues or slightly above 90% of our revenues were coming from support today, that's come down to you know the seventies.
And things like guide and answer bought in some of the other products that we've launched have filled in that a broader.
For two new revenues, so its I would say that those product categories are growing faster than the average as a result.
Thank you.
Your next question comes from the line of Jennifer Lowe from you've yes. Your line is open.
Hi, this is that a catch more sitting.
In fact again low.
It seems like that a lot more new products that are being funded nothing that's pretty from Goldman's then best product as well so over some time conversations.
Blackhawk, you think or instincts are trained and I've got to be allowed in a broad basket and.
Oh, So do you have any specialist at all or live or some of the newer products.
Yeah. So we definitely invest a lot in enablement of our sales reps every year and you're right and murky, but data point about how we've evolved from a single product company. The Multiproduct company, so with that comes a different.
Level of enablement.
In some cases, we'll we'll use a specialist.
But it's not as common because we believe that.
You know that the right training as enablement weaken penetrate and still have healthy expansion rates, but to the extent we find ourselves.
As in situations, where there's more complex piece cases, we may consider that.
Great.
I've a follow up up and 2020, there was a greater focus on broadening the platform and increasing the monetization of black from.
And Mark just talked about on 30% of though revenue comes from other products outside of the call or.
So should we expect anybody the contribution from the platform and 20 point.
You know I will that we'll talk more about the platform in Miami, but definitely it's considered in our guidance here. So it will we will begin to monetize sunshine in 2020.
Got it thank you.
There are no further questions. If I was talking about drama called back to the presenters.
[noise] well, we'd like to thank you for joining us for our 2019 Q4 call.
Hopefully, we'll see in Miami, if not we'll see you on our next call in 90 days group.
Thank you.
That concludes today's conference call you may now disconnect.
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