Q4 2020 Earnings Call

Presentation there will be an opportunity to ask questions to ask a question. You may press * then one on your telephone keypad to withdraw your question, please press * then two. Please note. This event is being recorded. I would now like to turn the conference over to Dominic, please. Go ahead. Thank you, Gary and good afternoon everyone. Welcome to juice quarter and full-year for 2020 conference calls with me today are Howard Berman founder and CEO of yes.

after today's

Speed Cakebread CFO and Jim Steele President Chief Revenue officer. Before we We Begin I'd like to remind everyone that this call may contain forward-looking statements include statements about revenue and non-gaap net income guidance cash flow retention rate Market opportunities business performance and other non-historical statements for the described in our press release. These forward-looking statements are subject to certain risks uncertainties and assumptions including those related to growth evolution of our industry products moment and success including with answers and general Economic and Business conditions such as the impact of coronavirus these statements reflect the company's current expectations based on age beliefs assumptions and information is currently available to it. Although we believe these expectations are reasonable. We undertake no obligation to provide any statements to reflect changes dead.

after this call descriptions of these and other risks that could

Pause actual results to differ materially from these forward-looking statements are discussed in our reports filed with the SEC including our most recent quarterly and annual report and our press release that was issued this afternoon during the call. We also refer to non-gaap financial measures reconciliations with the most comparable gaap measures are also available in the press release which is is on investor with that. I will turn the call over to Howard. Thank you. Hello everyone and Welcome to our fourth quarter and full-year 2020 earnings call. We had a great we had great sales in Q4. We launched successful products in Q4 and we executed Bowen Q4. Let's start with sales rep do you for it was the best quarter in the history of the company Revenue came in at eighty one point four million 28% over the fourth quarter of last year revenue for the full fiscal year was to 9 a.m.

8.8 million growing 31% over fiscal 1900 Revenue was 176.8 million dollars growing at 30% year-over-year.

Number of structured fax an indication of Engagement usage exceeded $277 million which group 49% from the year-ago quarter and during the quarter. We signed the largest International Enterprise deal in the history of the company with the core hotels the single largest hospitality company in Europe and sixth largest worldwide with more than 4,800 hotels during Q4. We also offer contracts with leading Brands like First Citizens Bank Goodyear Tire the Vanguard group and we expand and renewed contracts and amazing Brands like Great Clips in Hilton. I'm Wendy Thursday. We had some major product highlights with our breakthrough new site search product. Yes answers. We officially launched answers on the last day of. Onward. Nineteen Q for was our first home, of course on this brand new product and we sold twenty nine new answers deals for more than 1.5 million a new AC D. These are very impressive results from just our first selling quarter in a brand new birth.

category and so far the feed

Back from customers has been overwhelmingly positive. Iha one of our first answers customers has been live for a little bit more than three months and has seen expected and unexpected positive results. According to Iha depending on the month. They typically see between four and seven per-cent of their visitors to their online appointment scheduling tool make it to the visiting confirmation page the package information page for the traffic that is Jay has seen referred from the X dancers and pages that rate is between 24 and 28% for the past 3 months representing a 400% increase in online appointment conversions. Take a look at another example BBVA USA director of digital platform. Steve Carell said that being part of the answer is beta was a no-brainer given bbva's focus on using technologies that key competitive Advantage answers provides BBVA customers with details on over 50,000 ATMs 600 branches and much more wage.

Also said answers will help the bank.

Reduce the call volume that's customer service team receives with the resulting impact being increased net promoter score decreased cost of support and more satisfied customers. Now, some people have said quote no one uses site search, but the number of searches we're seeing come through. Our platform is stunning with only a limited set of early clients answers customers are already achieving an annual rate of more than eleven million searches per year. And remember these queries are all commercial. It's a user or a consumer asking a business a question and getting a correct answer in the past site search gave back junkie results of the use word bounce back to Google and the brand would lose control of the customer Journey but answers uses NLP natural natural language processing fee to meet the consumer's expectation with an answer from our clients Knowledge Graph now the best prophecy for whether the answer is correct is whether the user engaged with the answer.

With a clicker conversion and these seem early customers are already seeing an annualized run rate of nearly seven million klicks. He's and best of all since the user had their expectations.

Okay support costs are lowered. They're more likely to come back directly to the Brand's website when they have more questions.

A large Fortune 500 telecommunications company was one of the latest customers live on the answers and on a Sunday. They sought more than 16,000 searches with more than ten thousand clicks off. Anyways, that'd be more than 5 million searches in three million klicks.

We had some other product features in the fourth quarter. We lost our conversion tracking feature a toddler this let's our customers see the specific sales and transactions. They're getting from the service experience cloud from their listings pages and answers. It makes it simple to see the stunning Roi VX and give us customers great insights into which intense our highest for their business.

Thus far 460 customers have turned on conversion tracking including Church's Chicken Massage Envy in Earl Enterprises. And the results are nothing short of phenomenal Massage Envy Palm estimated 17/7 million dollars of Revenue in the first 30 days flow-through X, and that's nearly eighty five million dollars annualized.

Great.

Sales great product traction pre-execution looking for we are excited about the fact that we hit our hiring goal. We ended Q4 of nearly two hundred fifty foot of curing sales rep that said approximately 42% year-over-year and in addition to starting our next fiscal year with the largest sales organization in our history. It is also by far the most experienced intention of reps we've ever had and that's important because we're pioneering a new category with an expanding platform and becoming viewed as an increasingly strategic marketing technology partner with our customers. We have a hit new product and a huge and growing Market. We're competing in a more than 20 billion dollar category including digital experience platforms RDX p as the search experience Cloud company. Our customers are seeing extraordinary success with the platform and our customers account now exceeds nineteen. Yep.

up $38

said your rear

to date we stand at a pivotal time in the future of the internet trust is at stake. People are distrustful the information they find online and meanwhile there have been significant technical breakthroughs in life that make it possible for computers to understand humans and give answers but the computers are being fed a bunch of garbage from people like Todd munyon the character from our brand campaign is powerful but garbage in garbage out. Yep founding principles that the authority on facts about a business is the business itself and twelve years later with that exact principle still holds for the past decade. We've been helping Brands put more truth online, which is enabled them to build more trust and drive more business with their customer today that matters more than ever now before I hand the call over to Jim. I want to talk about something on everyone's mind. That's Cove in nineteen or the Coronavirus.

we are closely monitoring the situation and focus on two things first on our

We safety at 2nd on customer continuity as the search experience Cloud company, we handle millions of searches and sort of pages for tens of millions of searches for thousands of hospitals and doctors around the globe UC Health Care is our second biggest category and over the past 72 hours. We've seen a spike in Cove in nineteen related Search terms people asking questions. Like I have a slight cough do I have coronavirus or here's another one schedule a flu shot to protect me from coronavirus now, it would not be good if people started flooding hospitals unnecessarily or asking questions that could be answered digitally. So we've created a special group to help our Healthcare customers and all of our customers answer questions about this month virus every time our product provides an answer. We free up resources for someone in need which relieves the burden on Health Care Systems in the United States and around the world.

Our guiding principle and during this in any crisis.

Just to ensure that when people have questions, our customers can answer them.

We had a great Q4 crisp execution a strong initial quarter with answers record sales to talk more about our record sales. I'm going to turn the call over to our president and CEO Jim Steele. Thanks Howard as you just heard we plan to help our customers in our unique way during this uncertain time. We also know that every vertical not just Health Care will undoubtedly see an uptick in customer seeking answers about their businesses at as it pertains to the coronavirus and were armed and ready to help them deliver that information Acura and swiftly.

Now Switching gears to the business at hand as Howard said we had a great Q4. It was the best quarter that I've experienced at Yaks in my 3 and 1/2 years with the next week, closed 236 deals with at least a hundred thousand dollars in total contract value vs. 169 the same period last year that's 40% more money including twenty-five deals that resulted in at least 1 million of total contract value, including new logos and renewals of existing customers. The total number of customers increased 35% year-over-year to now over 1,900. This excludes rsmv in third-party reseller customers demand for us products was strong across-the-board wage customers are really starting to see the value of our multi-product platform offerings.

First Citizens

Year with both platform feels Chuck-E-Cheese purchased listings and Pages Edible Arrangements are listings product while Vanguard Investments purchase pages and answers. We enter q1 with a strong pipeline across the organization. We also had several significant annualized renewals that exceeded 1 million dollars during the quarter investing Advanced Auto Parts Dunkin Brands McDonald's T-Mobile and Verizon strong execution on our land and expand strategy and continued demand for the X platform resulted expanded relationships with Chipotle Cox Great Clips Hilton Sephora and Wendy's as Howard noted. We hit our hiring goal for quota carrying sales tax. We ended the year with nearly 250 quoted caring sales reps and increase of 42% from the year ago. This puts us in a really great position to start the year.

We we all.

Go see great growth in our Europe business. We close the largest Enterprise deal in the history of yaks internationally with accor hotels is Howard mentioned. We also added logos such as life for Fendi Lavazza Societe generale and monclaire in significant expansions at luxottica Chanel and Gucci. Japan's most impactful deal is quarter where tepco and Agassi brothers and we continue to see strong growth in our Enterprise opportunity there as we invest in Japan. We have also seen strong momentum in our customer success offerings into the leadership of Mary Fred or row supporting our retention up-sell and cross-sell efforts are Professional Services revenue for FY twenty grew 83% year-over-year from 8.8 million to 16.2 million and now accounts for approximately 5% of our total revenue.

We have a platform of solid products Marketing sales enablement and most tenured sales team in history to realize their full potential. So now I'll turn the call over to Steve the walk through the quarter more detail. Excuse me. Thanks Jim. We had a great fourth quarter our fourth quarter Revenue grew 28% to eighty one point four million dollars that Revenue excluding small business customers grew 30.4% continuing to highlight the increasing role of our Enterprise and mid-market Investments for the full year fiscal year 20 our rep to 298.8 million dollars an increase of 31% from last year our fourth-quarter International Revenue grew 53% to $15,000 and our full-year fiscal year 20 International Revenue grew 72% to fifty three million dollars and now accounts for 18% of our full-year Revenue.

unearned Revenue

Increase 30% from a year ago. To 176.8 million dollars and as of January 31st, we had 328 million in remaining performance applications are RPO but keep in mind is customers with longer contracts kind of come up for Renewal. RPO will naturally decline until they renew again as an example and making them a simple if we had a customer with a large five year contract worth fifty million dollars first year. Our PO is 50 million dollars. The next year is $40 a month and subsequent years declined ten million in RPO every year until the contract comes to renew again. So we've said we would provide rather than discuss calculated billing any further so that that end annual recurring Revenue. They are are at the end of the fourth quarter fiscal year 20 amounted to more than $326 billion dollars wage.

That's growing approximately $29.

Sent your over your from approximately $250 million dollars at the end of the fourth quarter fiscal year nineteen Arnett dollar based retention which excludes our small business customer was a hundred and 6% and our net dollar based retention for what we now refer to as our direct Enterprise which excludes SMB and direct partner reseller customers was $1,000 and 8% because it's a trailing-twelve-month number some mergers and changes to direct sales the resellers continue to impact this number as well as some downsizing of our direct customers is this restructure operations gross margins were 74.3% this quarter compared to 75.5% in the fourth quarter last year, and the full-year margin was 74.22% and compared to 74.9% last year.

The change and gross margin was driven in part by hiring in our services organization and as we've described least expenses for the fourth quarter and full fiscal year total op-ex increase 64.3 million dollars in the fourth quarter last year to $91 this quarter. The primary drivers of this increase was the overall growth and headcount including the increase of older Kerry in sales reps along with the new leases in New York District of Columbia and London are objects for the full year increased 39.8% from the last fiscal year off and keep in mind will be incurring double these expense in New York until our 1 Madison Avenue lease expires in December 2020. Specifically, the annual run rate for our lease at 1 Madison Avenue is 4.8 million dollars per year while the annual run rate at 61 Ninth Avenue is 10.3 million dollars between the two. It's a 15 Point 1 million dollar expense for 5 a.m.

So you're twenty-one.

Well, once our lease at 1 Madison expires at the end of December 2020 our run rate from New York police will drop to ten point three million annually.

For fiscal 2020. It was a rebuild. It was a building you're in terms of putting physical infrastructure in sales capacity in place. We expect to realize normal operating leverages as we make our business office more efficient and scale going forward.

For the fourth quarter net loss increased from 15.5 million a year ago to Thirty point six million this quarter on the basis of our 115.2 million weighted average basic shares outstanding net loss per share of $0.27. This quarter compares to a $0.15 loss a year ago on the basis of 101.4 million weighted average basic shares outstanding last year for full year 2020 net loss increased from 74.8 Million last year to a loss of a hundred twenty one point five million this year on the basis of our 111.8 million weighted average basic shares outstanding our net loss per share of a dollar ninety cents compares to 76% loss last year on the basis of 98.4 million weighted average basic shares outstanding.

On a non-gaap net loss.

Basis excluding stock-based compensation that increased from 3.2 million a year ago to 13.7 million this quarter and our non-gaap net loss of $0.12 per share this quarter compared to $0.03 in the year-ago quarter on a full-year non-gaap net loss. Excluding stock-based, was 53.8 Million compared to Thirty point six million in fiscal year, 29 volt. Sorry 2019. Our non-gaap net loss of $0.48 per share this year compares to 31 cents in fiscal year 2019. So, please refer to the Presley release we issued this afternoon for a Reconciliation of gaap to non-gaap cash and cash equivalents were two hundred fifty six point 1 million dollars as of January 30th, 2028 net cash provided by operations for the fourth quarter was a positive eleven point seven million dollars as compared to net cash provided by operations of 30.8 million. Yep.

Year ago.

Get cash used in operations for the full year was 30.8 Million as compared to net cash provided by operations of 5.2 million last year.

We've been cash flow positive for three quarters over the last eight quarters and we're cash flow positive for the full year of fiscal nineteen physical year 21 will be impacted by Lisa's office in hiring, but we're continuing to drive towards cash flow break-even.

Turning to Guidance the guidance. We're providing assumes business as usual for the coming year keeping in mind. This is our first guidance for fiscal year 21 pack of our bookings occur in the second half. It does not consider the unknown impacts that we might experience given the Cove in nineteen virus. We're monitoring the various countries. We do business in Iraq and have started contingency planning to protect our employees and our business should the virus become significantly worse. So as to guidance in the first quarter, we expect them to be between 85 million and 87 million.

in the same. We

Anticipate non-gaap loss per share of between 14 and 11 cents which reflects the impact of a loss of $0.01 from our Legacy lease agreements in New York and DC this month. So assumed a weighted average basic share count of approximately 116.7 million shares turning to the full year. We expect $378 billion to $382 billion dollars in Revenue.

Our non-gaap loss per share range is expected to be in the range of fifty cents to $0.45 keeping in mind. This includes four cents per share loss from the impact of our Legacy Lisa grew up in New York and DC. This is assuming a basic weighted average share count of approximately 119.5 million shares with that. Let me turn the call back to Howard. Thank you Steve for we open up for your questions. I wanted to take a minute to welcome Seth. Well as the newest member of the board of directors Seth is an incredible leader. He steered iconic walk-ins from the PGA of America to two of the world's largest banks Deutsche Bank and Merrill Lynch is a man and as a managing director at Silver Lake we are proud to welcome Seth our board of directors and our newest member of the audit committee.

Thank you Howard.

Can we please open the questions we will now begin the question-and-answer session to ask a question. You may press * then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press star then to our first question comes from Mark Murphy with JPMorgan Chase. Go ahead. Yes. Thank you very much on a very nice rebound and strong finish to the year Howard as well as Jim wanted to ask you if the success continues to grow with the answers product. Do you have any estimate of what percentage of Revenue it could be called a few years down the road and how may I direct your attention rates if it is driving Revenue generating traffic that we described well, thanks. Thanks Mark.

It's kind of hard to peel apart. What is an answer is only deal because customers typically purchased platform. We see what we're starting to see our answers lead deals remember customers now for the first time if you don't have locations or stores you can buy our answers product and so any any business with a website can purchase answers and so a lot of times what happens what we're seeing is that a customer purchase answers put that a CV on the SKU, but it'll also come along with a purchase of the rest of our platform including pages. So we look kind of not just at the number of answers the page the answers influence deals and overtime. I think you'll see a a majority of our customer deals including answers if I can just hey Mark, this is Jim Steele just say add to that. We are starting to see a very high attach rate. It's not just answer is only but it Pages as well comes along with answers what we're seeing is company. Yep.

I think we talked about this company 16 Handles and in Q3. It's a yogurt.

Company with like thirty stores in New York and they they use Pages basically or pages to attract the customers to their website to find the discoverability and uh interest in in their products and services and then they use pages are sorry answers to basically capture that transaction on their website. So it's really that we're seeing both of those products kind of hand-in-hand with many of our customers.

Thank you for that as well. I noticed it. I think Dominic had added coronavirus to the risk factors at the start of the call Steve you acknowledge that as well and Howard. I understand. You also laid out how it seems like it's a positive Catalyst in a in a positive driver in some cases. I'm curious just how long you expect the spread of the virus to have an adverse impact at all on consumer Behavior, you know, if people are travelling less maybe they're staying inside working from home. Is there any reason to think that they would do less searching, you know for for physical store locations or you know the hours of operation or something like that. I mean, I'm in the unfortunate event, you know, if if we end up with stores being closed or or malls being closed if it gets to that point.

Well first off we're not.

Biologists were not pandemic Global experts what we can say is how we see our customers using our platform and giving our unique positioning as search experience Cloud company, we can see what people are searching for life. I said, we've already seen a spike in searches for Coronavirus Cove in nineteen does the flu shot protect against this people? Remember Healthcare is our second largest category page. So where do people turn when they have questions about a virus? Well, it's often to their hospital system or to their doctor to the extent that we can help facilitate the answer any of those questions off intention here is the to to to use our platform in a way that benefits the global health system during this time of Crisis or potential crisis. So we actually were holding a a call on Friday with our customers are Healthcare customers. We're going to be helping create a custom Knowledge Graph that's based off of answers from the CDC that will appear and Healthcare accounts customers will be able to add that at home.

charge if they want to be able to answer these questions by the way to your question about are there going to be store closings or they're going to be stockpiling of things like masks once they

Yeah, and you might see the X platform used to help communicate these types of things. So I don't think you're going to see any degradation of people searching for things. In fact, I would argue that it's possible wage. People are going to have more questions in wherever the consumer has a question. We want to be there to help provide that answer for our customers.

Thank you very much. Thank you. The next question is from David Kahn with SunTrust, please go ahead. Yeah, I think a lot and congrats on the quarter a few questions. So I'm just kind of rewinding the tape a little bit. So I think you guys have some issues with you know with the launch Van Sales kind of affecting the sales cycle. Is it fully resolved? Do you think their scope for more impact on the sales cycle? And then just on the answer the tax rate? Maybe can you shed some light on what kind of attached you saw in the in the new and there is new sales in the renewals in the in the last month and then I have a follow-up.

So at this point I think in Q3, we said that answers slowed down because we took reps off the field. We you know, we disrupted deal Cycles where customers were along a purchased pattern and then we come up with a new phone and they may want to delay their purchase and get that included at this point. We feel that our deal cycles and sales Cycles are back on track. I think the results in Q4 that we should that we showed project that and then you asked what the attach rates were. We haven't disclosed that specifically, although I think we did say that we closed 29 new answers deals for more than a million and a half dollars of New Jersey. This is our first quarter in this new category. It's a pretty exciting category to be in and over time. We're going to start to see I believe in increased attach rate of answers with answers lead deals to are searching Samsung Cloud platform.

And in terms of just the the comment are you seeing a kind of a meaningful left in the TV with the answers included versus 9 a.m.

Yeah, hang about Jim Steele. We are seeing especially in mid-market. We're seeing a sizable increase in the deal size and actually a shortened sales cycle answer is is very compelling.

It's good to hear. So the follow-up question I had was just around the the head count. So it looks like between Q3 and Q4 hiring slowed a bit. How are you thinking about heading down? You know for twenty Twenty-One and what's the right way to think about this? Well, I think we're you know part of like you for always does slow down the actually cuz we get busy and trying to close deals. We also in the team start to look at performance and and what we need for next year. So that's not surprising at all. We definitely have the capacity to get us through the week and into next into the following fiscal year. So that's part of it. I think you know as we said, we're still seeing good strong business, but we're also watching the global economy am seeing what we're doing there, but we are still hiring people primarily salespeople and Developers.

Great. Thank you.

The next question is from Mark. Mahaney with RBC, please go ahead. I think I'll just stick with the answers product and Howard just your thoughts on the need further develop plans for answers. What else would you like to do or needs to be done with the product? And then I just want to make sure I understand how your quantifying the success of answers to date you're saying they're 29 deals that you've signed one with answers for more than that worth more than one and half million and how does that compare? This must? I don't think it's Apples to Apples with the $29.25 million. I'm sorry, the 25 million dollars plus deals that you've done in the quarter. You just just quantify again the traction you've had with answers that must have misheard it.

That's right. So we've sold 29 answers deals that are more than a million and a half dollars of new TV some of this exciting. This is that all of a sudden we now have a ton of new accounts that we can go after that never could have purchased our listings product, but now can purchase our answers product. We estimate that the introduction of the answers has roughly doubled our tan. It's certainly roughly doubled the number of customers that we can potentially go after for example in the cpg vertical where you have a brand like Campbell Soup. They never had physical store locations, but they still do want to be able to answer the questions that people have about their soups on their website. And so as you get into these new Industries and verticals that the Tam the ability to go after this stuff is much bigger. You also Mark asked I think about what we want to do next. Gosh. We one of the coolest things like I said, I've got now a real-time view into what people are searching for around the world numbering in the the millions of searches that we see coming through which is how we were able to quickly see these searches for Coronavirus at the same time.

A huge part of what we want to do is be a global company and right now answers is only available in English. So we've got to get answers ready for Primetime and our European markets and our Japanese Market where the demands strong in the

Questions are still being asked and we want to be there to provide the answer.

And the length of time it takes to localize answers to into local languages Japanese German or whatever to start with. How long does that take? Well, you'd start with the romance languages first, then we get the Japanese and German after you've tackled French and Spanish. I think we're a couple of quarters out from having romance ready to Bata. I'm sorry ready to go. I think we're closer to that than uh closer than two quarters to having it in beta we launched answers in beta in the UK last year at Explorer where we signed up some early customers. The idea would hopefully be to do the same thing and romance sometime in the spring and then maybe get it to fall and then Japan and Germany with all after that. Okay. Thank you Howard.

The next question is from Tom white with d a Davidson, please go ahead.

Great. Thanks for taking my question. Just first off on the comments about coronavirus coronavirus. It sounds like the pipeline is Renee strong entering the quarter. But Steve maybe you can just clarify kind of what if anything is kind of contemplated, uh in in kind of the first quarter Outlook or the full-year Outlook and have you guys seen any kind of weakening or softening uh interest from from prospects to take meetings that sort of thing. Um, and and what do you have factored in and that's just the comment about Massage Envy and you said seven million of of incremental revenues in the first 30 days you just give a little bit more color on um, you know, exactly what's driving that curious if you know massage these kind of you know, what learnings are they are they taking from the product how they optimizing to kind of you know, maximize that incremental Revenue lift likes. Do you want to start with massaging you do the job?

How's your main? And I'll do the do the encoding 19?

Okay. Well, you know look Massage Envy is using our full platform to search experience Cloud on our pages and our answers and like we Quantified for the conversion rates. Do you see from J? When users get the right answers to the questions that they're asking they're more likely to stick and transact and so given our conversion tracking product a customer can now see the exact tract actions probably in the case of Massage Envy. It's appointments booked for massages and they know what that's worth and they're able to see what they got prior to using the X platform. They put us lived and then they can look at the number of appointments to get after it and track the incremental revenue flowing through right cuz we added a new feature this quarter in terms of conversion tracking. So it's really going to help people laugh and be understand the results of the searches that they're getting onto guidance and contemplation as you well know cover 19 is coming out as fairly quickly our guidance for Thursday.

And for the full year right now just as soon as business as usual, there's no significant impacts that we're seeing at the moment on our business. Our pipelines have been strong that said, you know

We all like you watch the news look at um tracking in terms of case outbreak Etc. So we're watching it. But right now we're not seeing any impact from our business on a particular set of issues. But we're also not naive to believe that we're you know, things aren't going to happen. So suffice it to say as I said in my introduction to the guidance, this is business as usual for us right now, but will certainly keep you posted if things start to change the next question is from with Oppenheimer, please go ahead. Hi. Thanks take thanks for taking my questions questions here on answers now that it's been out in the market for a couple of months in the sales organization has had some time to digest the demands for the product. I guess. What's the right way to think about the sales cycles for an answer is only deal both from an Enterprise perspective and a mid-market perspective and then maybe from a customer that is looking to pick up the incorrect.

Search experience Cloud Sure. Hey, Koji, Jim Steele. So I

I use another example Vanguard Investments of Vanguard was not really even a prospect of ours or an opportunity for ours in the past. They they have call centers Thursday Robo advisors. They don't have locations that people go to but they have amazing services that they want the world to know about like life events, you know saving for college buying a second home wedding planning, you know, and they they track like market trends things like trade Wars and elections all the things that people do searches on so they they they contacted us and said Hey What Can you guys do to help us here? And in a relatively short sales cycle for an Enterprise deal which typically, you know could be many many months. They saw the value of leveraging first the pages kind of what I was talking about before I was sixteen handles but pages to drive Discovery and and birth

recognition and then answer is once they

Land on the website to to actually convert them and that that was a a huge win for us and one that was outside of home, you know any opportunity that we had up until answers. So the answers we how it's talked about it. I think we talked about the size of the Tam basically doubling right since since we announced that answers and it's companies like that and Campbell's and the cpg space that give us a lot of a lot of energy and that we're excited about right now with Salesforce going after it and it's it's such a compelling demo when you show customers what happens on their site search. It's really it can be very embarrassing. We try not to embarrass their clubs. But we we talked about the opportunity. It's so obvious. We say this really the the experience you want and that's leads right into the the search experience cloud.

Market that we're going after now it's it's so exciting because the

Because no one's really solved this problem for our customers. They've done a lot of other things in marketing. They haven't fixed the site search and this is what we're now all over with with answers and and page is because the combination of listings pages and answers gives them a lift and their business that they've never seen before.

Thanks, Jimmy. Just one follow-up here on answers. You know, when you're selling it. Are you finding that the buyer needs to find new budget for the product or is it a shift of the you know shift of budget that's usually good enough to get that process is going and then just you know, one question here on the go-to-market strategy, especially with the coronavirus and especially with the Reps that are out there in the field. How should we thinking about any disruption there, you know, especially if there are any international travel restrictions for those reps right now. Thank you for taking my questions sure on answers. First of all, it is a whole it can be a a different home buyer within the the customer the CMOS care a lot about their brand image and their website and they spend a lot of money on it. They they want it to be perfect and they had lots of lots of focus on it. So we're now in front of CMOS because we're now talked to them about their website and how we can improve the performance of the website and the discoverability dead.

and most importantly the conversion once once you attract

You know a prospect your website. You want to you want to schedule a an appointment you want to have them transact you want them to to move forward and pay money. So we are with a different audience and also because it affects their website. It's a it's an on-premise you have a solution for them. They they want to involve the it organization. So now we're talking to see and that was not always the case before so but because it we can point out the the challenges that they're having in the office to generate more business. They tend to move it pretty quickly through the sales take once you actually get to those c-level Executives. They make very fast decisions and we met Cloisters very rapidly. So yes, we're seeing definitely a different buyer different budgets, but but based on the results so far. We're seeing a very dead.

fast sales cycle

Oh, I forgot the second part was this the second question was the total Market. Yeah, I mean obviously, you know, we're not we don't want to be spending a lot of time traveling around the country and around the world with with some of the challenges. So we're definitely getting creative with our Samsung themes and getting to their customers through video-conferencing and you know through through phone calls rather than direct visit. So I mean this is really only a week or so that we've imposed some of these restrictions. So it's hard to tell but customers seem to appreciate the opportunity to interact with us over videoconferencing versus a space to face given the some of the the risks involved there. Yeah. I mean Kochi, let's be honest. We're we're doing that with investors at this point. So

I think it's a broad spectrum.

Again, if you have a question, please press * then 1 the next question is from Britain with berenberg capital markets, please. Go ahead. Yes. Thanks for taking my question. I guess the first ones really on maybe the pace of hiring has to be, you know, go into FY 2021. Would you expect maybe something similar to this year or a deceleration as you kind of feel like you got the qcs in place you that you guys need?

Well, we do have the quota carrying head count in place, but we're going to as I said in the previous answers, we're going to continue to hire developers and we're going to continue to hire quite accurate headcount, but I do think that we're seeing over this big push Hub. And so some of the focuses on productivity and scaling and and that's and it starts now. I mean, we've got an opportunity to do that. We have the base case wage clearly, you know gyms answer and the question about traveling and all that. It's great. We still have cities we have to be in though, and we need to be in there. So we're looking at distribution and territory management wage, but I don't think you'll see the major pushes that we've had before and we're looking at the business in terms of future impact on virus stuff. So all of that plays in we feel really comfortable about the headcount that we have right now. In fact that I can get us through this year easily and into next year but hiring quota carrying reps and hiring Rd people are still a priority for us along with efficiency.

Okay, now it's helpful and then maybe just on the you know, the deal Cycles you guys mentioned a bit that you're seeing shorter deal Cycles with answers. I guess, you know, is there anything in particular that's driving it is just you know.

Easier to kind of show an example of this is what your website looks like. Now. This is what it could look like with answers and you know, it's maybe a more of a compelling pitch going that route.

First off. It's an existing thing that most companies have so there's a budget for it that's sitting there. It's on a customer's website. You can see how good it is quite frankly if it's not yet. It probably sucks so we can change them that and then we can give them something amazing increasingly. We have customers on the record with success stories that are already out there talking about the increased list in conversion that they're seeing you you heard the same story that they have more than tripled or quadrupled their conversion rate right off of that. And by the way, this is the first time in ever that has been possible for a company to put up a site search box walk-ins action can happen right off of a search think back to what certain sites are used to look like before you actually answers. It was 10 Blue Links on the page that often were junkie results that were that were just document search but now when you run a search, it's a Google like experience for your own website and a consumer can transact they can book an appointment. They can buy a product. They can make a phone call. They can ask directions it it's like Google

Your own website and the amount of services that we're seeing is going up to we're seeing like I said already millions of of searches a year and the best measure for Success are the quicksand conversion off of those searches wage. I think we said seven million a year annualized already off of the folks that we've sort of put live.

Already, so the success that customers are seeing is really powerful. It's easy to quantify and it's an existing market and existing space and answers tends to lead deals for things like pages off ultimately this all comes down to our platform. Ultimately this all comes down to the X knowledge graph. The knowledge graph is the foundation for everything. We've done it Powers listings it Powers pages and now it powers and non-structured knowledge is the future of the internet people have questions computers can understand those questions and and the consumer expectations has been set off to expect an answer and all comes from the knowledge graph. So I think we said now that we grew the number of facts in our knowledge in the collective knowledge graphs to everybody to 277 million the number of the structured facts and all the knowledge graphs. That's the number I watch closely that went up 49% year-over-year indicating. The number of structured fax customers are putting into our birth.

Our platforms as they can answer questions. Okay. Thanks. Thanks. Thank you, Brian. This guy a question-and-answer session. I would like to turn the conference back over to Dominic package. Any closing remarks? Awesome. Thank you Gary. We appreciate everyone tuning in today. Obviously. We're going to be a little bit more virtual over the next 30 to 60 days. So we encourage you guys to reach out to us and we're happy to get on the phone or video conference with you guys. Thank you for taking the time today by the conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Dead dead dead dead.

Dead dead dead.