Q1 2020 Earnings Call

Ladies and gentlemen, thank you for your patience you were holding for today's Sharpsprings first quarter 2020 earnings conference call. At this time, we are gathering additional participants and we'll begin momentarily. We appreciate your patience. It asked that you. Please continue to hold.

[music].

Good afternoon, welcome to Sharpsprings first quarter 2020 earnings conference call joining us today, our Sharpsprings CEO, Rick Carlson and CFO Michael power. Following their remarks, we will open the call for your questions. Then before we conclude all provide the necessary cautions regarding forward looking statements made by management during this call.

I would like to remind everyone that this call will be recorded and made available for replay via a link available in the Investor Relations section of the company's website at investors Dot Sharpspring Dotcom now I would like to turn the call over to Sharpsprings CEO Rick Carlson.

Please proceed.

Welcome everyone and thank you for joining us today after the market close we issued a press release announcing our results for the first quarter ended March 31st 2020.

A copy of the press releases are available in the Investor Relations section of our website.

Before we get and begin I would also like to note that a few weeks ago, we published a letter to our shareholders, providing an update on their business and detailing our efforts in response to cope with 90 that letter is also available in the Investor Relations section of our website and I would encourage all interested parties to read it well some of the information discussed in the uptake.

Oh, we'll also be reiterated here.

We do not playing on repeating everything mentioned at the Investor letter. So reading it is likely worth your time.

Finally, I would also like to take us trying to publicly thank our front line workers in the central service providers for keeping a safe and healthy tree that's trying time.

Moving now to our results.

In Q1, we delivered a strong start to the year in the face of bolt and uncertain economic environment. That's what was a major transition how work is being conducted.

Actually we recorded our 12 straight period of record revenue, reflecting three years worth of consistent top line improvement in demonstrating our resilience against the initial onset of cold in 19.

And in total we added another 321 accounts, representing an additional 2.3 million in first year annual recurring revenue.

To date Sharpspring now accounts for approximately 2000 agency customers 500 direct customers and over 8500 total businesses using our marketing automation platform.

Well, we recorded a temporary blip in a few areas as a result is virus impact on the whole we remain well positioned to whether the current conditions, we've taken steps to safeguard or operations against.

Future potential.

Since.

I will elaborate further on both of these points in a few minutes now before I go into any further details I'm going to turn the call over to our CFO, Michael power will walk us through our financial results for the quarter Michael.

Thank you Rick.

Good afternoon, everyone on the call turning to our financial results in the first quarter ended March 31st 2024 channel revenue in the first quarter increased 32% to a record 7.1 million from 5.3 million in Q1 of last year.

Margin for the first quarter 2020 decreased to 66% from 71% last year in dollar terms gross profit increased 24% to 4.7 million in 3.8 million in Q1 of last year.

In Q1, we experienced continued margin compression due to expected in temporary low.

Contribution margin body.

Workshops for investment margins were 71% you want.

It's more in line with more gross margins in Q1 last year, beginning in March and continuing since that time, probably bodies margins have increased meaningfully with the exploration shared service contract you had previously employees as we transition to business from Marin and integrating its hard on operations long term, we believe the overall sharpspring <unk>.

<unk> has a capacity to expand above 8%.

Turning to our operating expenses for the first quarter 2020, or operating expenses increased 9% to 7.2 million from 6.6 million in Q1 of last year, increasing finally due to increase in sales and marketing research and development general and administrative costs to support our future break.

Along with this increase and intangible asset amortization.

Our GAAP net loss for the first quarter totaled 980000 or nine cents per share compared to GAAP net loss of 2.9 million or 33 cents per share in Q1 2019.

On the balance sheet, we had 11.6 million attached to the ended the quarter compared to 11.9 million at the end apart.

Our Q.

Q1, 2020 past position reflects a 1.9 million roll down more revolver.

On a pro forma basis, including additional funds. Some yes, the a payroll protection program as well as an accelerated tax refund or contrast position is north of 16 million.

Looking at our non-GAAP measures, our adjusted EBITDA loss for the quarter, which reconciled in our earnings release totaled 1.8 million.

Relatively unchanged from an adjusted EBITDA loss of 1.8 million same period.

No.

Core net loss for the first quarter, which was also reconciling the earnings release totaled 785 no.

For seven cents core net loss per share compared from core net loss of 2.1 billion or 23 cents core net loss per share in Q1 of last year.

For more details on our just even coordinating our metrics, we see the reconciliation of GAAP turns including supplementary tables of today's earnings release.

Moving to some of our other metrics during Q1 or Costco card posted another approximately 8750, which was the sequential decrease from 9900 recorded during the fourth quarter 2019.

As a reminder, we definitely customer acquisition cost that's the some of our all in sales and marketing costs from Q4 2019 divided by new wins from Q1 2020, it's important to mention that discount that we shouldn't impart because it does not take into account the marketing spend in one quarter.

Longtail continues to impact yields that we went in future quarters.

Just want to tomer basis, we see lower CAC and what is reported numbers you flat.

No we do experience fluctuations these metrics quarter corner your partner that we can see just the acquired Austin historically tracking all in rate that will deliver significant lifetime value to our business in the future.

Our lifetime value calculation, which are long term include estimates for future performance continued indicate EG customers would be worth approximately 45 to 50000.

The business when average average long term value reflects benefits to the company wanting fully just kind of basis after reducing for gross margin costs to support the customers on the platform.

Turning to our financial financial year, ending December 31st 2020, you're reaffirming reaffirming our previous disclose revenue forecast. We expect total revenue to range between 30 million, a 31 billion, which will represent approximately increased 32.

37%, respectively compared to prior year.

Our guidance is based on recurring revenue from our current customers based on performance itself tracked in April this year.

These expectations also include anticipated impact I'm, hoping 19 global pandemic based on information available as you'd be this report.

This completes my financial summary, I like it.

Turn call back to our over direct for additional insights into our operational progress in Q1 as well the outlook for 20 Twond right.

Thanks, Michael.

Before I get a into our updates for the quarter I'd like to provide a general outlined that explains why we think we're well positioned and have reduced exposure in the face of the current economic environment.

First we are a deeply embedded embedded technology.

For customers that use many of our features we're deeply ingrained in their business.

Oh platform is integrated into their web sites in countless ways, including forms landing pages dynamic content and automated triggers and workflows.

Our platform houses all their email list and every email template and email they used to communicate with our customers.

We are generally either integrated with the shopping cart third party CRM.

On a P.I., where they're using are built in CRM capability oftentimes they are using more than one of these services in short we are integrated into their entire sales and marketing process.

Second weird essential technology. This is different than simply being embedded are deeply rooted as I just covered.

They did plainly we allow businesses to be vastly more effective that operating their sales and marketing functions, which needless to say has become even more essential as companies face difficult economic times.

Put another way Sharpspring is a must have rather than a nice to have software platform.

Third is our competitive positioning.

Sharpspring has always been then remains the best value in the sales and marketing automation space I.

Hi, he is a highly regarded and yet lowest cost provider, we expect that customers looking to save costs associated with far more expensive solutions will continue to turn to sharpspring as economic conditions Titan.

In many cases, we can be as little as 110th the cost of our major competitors, we're actively pursuing the market with its value proposition.

Another differentiator as with our customer base, our customer base is mostly geared towards small and medium sized businesses are smbs. Often this is seen as a less stable segment of customers when compared to larger enterprises fortune 500 accounts, but there are several characteristics about our.

User base that we think speech at a relatively low attrition levels. We've observed since the outbreak and that give us hope that this solid performance will continue into the coming months.

First the vast majority of our customers are be to be focused organizations that is they generally use a sales team to target other businesses.

With their products and services. In contrast, we generally do not service micro hyper local or consumer oriented businesses.

These are the kinds of businesses that often have a brick and mortar location and door could sell directly to consumers and have been most affected by the corona virus and associated changes in consumer behavior.

In fact, we estimate that less than 2% of our user base would fall into this category.

Instead, our b to B oriented businesses generally conduct larger transactions via then it and internal sales team and have the wherewithal to hire a digital marketing agency to grow their sales.

With this in mind it makes sense that sharpspring is relatively well insulated from the current economic impacts hitting the smallest business is the hardest.

Finally, we are extremely well diversified I don't need to tell the people on this call about the value of different diversification when it comes to mitigating risk and Sharpsprings case, where effect, we effectively have two levels of diversification built into our business model.

First we have more than 2000 agency customers and none represents more than a single percentage point I've read the news and most.

Only a fraction of a percentage point.

Further to that each of these agencies had their own customers using sharpspring underneath them, adding a second layer revenue diversification for us.

Well, we consider it a loss whenever a business meets our platform and we worked hard to support each of our agency partners every way that we can when an agency loses a customer it does not necessarily lead to a direct revenue impact for Sharpspring. So long as the agency remains a customer.

The second older diversification is a powerful component of our business model and allows agencies to transition struggling clients out and new clients in without negatively impacting sharpsprings revenue in the meantime.

Summarizing all these points, we are both a deeply embedded and must have technology and waste, we survey highly diversified and compare comparatively stable b to b customer base.

Offering them a best in the business value proposition that our competitors simply can't match.

For all of these reasons, we believe we can weather the storm and continue to grow even in the face of these strong economic headwinds.

To be fair, though there's still a lot of uncertainty and that no one really knows the ultimate impacted the corona.

Hi, rich that the Corona there's may have.

This uncertainty is why we've acted aggressively and sought to protect our business in the event of a greater downside scenario.

Financially we've taken decisive action to ensure the long term viability of our operations across the company, we've reduced our expense base by more than 20%, which should result in over $6 million in cost savings for the remainder of 2020 and should also allow us to meet our tech or target cash usage.

For the year at under 4.5 million.

Through a handful of other transactions. We've also increased our available funds by roughly 7 million.

Raising our pro forma balanced over 16 million.

With these cash reserves should any of the points in our growth thesis come under duress.

We had the financial infrastructure to respond.

With that out of the wed like to provide an update on our operations for the quarter.

Let me begin with perfect audience.

A reminder, we acquired perfect audience back in November from Berlin software.

As a business focused entirely on re targeting digital advertising, we believe perfect audience isn't a great is a great compliment to our core sharpspring marketing automation solution.

The integration process remains ongoing we're already seeing benefits.

In the first quarter, we recorded a 23% increase from a number of paid to advertisers compared to the end of year.

AD impressions are also increasing and March was the single highest revenue month since the acquisition, which even includes a minor impacts can cope in 19.

Another benefit from perfect audience started experiences is a much quicker faster than our core sharpspring business in processing higher volume lower feed transactions were able to recycle our marketing dollars much faster expediting the learning curve as we continue to align our two businesses.

Initial integration process has been successfully completed and we're now looking to complete a second phase in the middle of this year that when it will include automatic campaign attribution CRM contact Retargeting and seamless look alike the audience building.

As of today, despite the headwinds Workover 19, and because of the number of operational improvements we've made to the business perfect audience is tracking according to plan for the second quarter.

We've been able to realize meaningful contribution margin expansion through the automated procedures, we've implemented as well as the official expiration of our shared services contract with Moran in March.

In the past few months, we've significantly reduced customer acquisition cost of nursing, the LTV to CAC ratio trend upward.

We believe retargeting represent some of the lowest hanging fruit on the internet and we're making investments to capitalize on that opportunity.

With a growing leave database of over 100000 contacts we have been holding webinars posing timely content and providing other tools or in a regular marketing cadence.

Moving next to our newest feature releases in the last few months, we've launched a number of tools features an update but to have really stood out were specifically with our new chat pod and video calling features we're providing end demand and essential tools that are in direct response to the current environment.

A recently launched chat, but has now become one of the most quickly adopted features and Sharpspring history. In fact more than 1500 Chatbots were configured within the first few weeks after launch in early March.

Businesses that use chat bots, often see a large percentage increase in both engagement and lead generation from their web sites.

We've included this powerful feature to the platform and given it to our customers without additional charge.

For our customers. This is a huge value add for Sharpspring. This is yet another way to become embedded into the customer sales and marketing operations.

Another essential product, we're now providing to our customers integrated video calling.

Hi, This is solution built to help marketing agencies and businesses connect with their lease contacts and clients directly from the CRM.

We've included this first of its kind functionality into our platform free of charge. We built this solution specifically in response to cope with my team and our agency partners and their customers are both express their appreciation and the and have adopted this feature in large numbers.

Looking ahead on our product road map, we have a bevy of new features that we plan on rolling out over the next few quarters, but should continue to make our platform more functional and further embed ourselves into our customers operations in the coming quarters. For example, we're looking forward to providing integrations with Facebook lead Ed did yard and spot.

Moving now to some updates on our internal processes.

Beginning in the second quarter, we're now operating on a team based account management concept. What this means is that are in addition to still having a primary account manager Sharpspring partners will now have access to a full team for support.

The team based structure ensures that customers will always have access to account management services, even if the primary account managers not available.

In our account management teams. We've also further specialized our approach like roofing customers into three buckets, we've identified as high expansion stable or high risk.

Depending on the partner profile, we will be assigning teams that focus on meeting their needs.

Making sure we're maximizing expansion reducing attrition depending on the situation.

As a general comment on attrition when factoring in our price increase at the beginning of year, coupled with the initial impact from Cobot night team beginning March in March we did see a temporary spike in this area as is always the case, it's worth noting that the vast majority of these lost accounts, where we're from.

Lesser contributors, meaning agencies that have not reached expansion revenue and therefore have smaller than average EMR.

Further we've already seen or returned to normal levels in April and through the first half of may as well.

Another new <unk> initiative that we think we'll have a positive impact on our customer acquisition costs involves our lead Gen practices as Michael mentioned earlier in Q1, our cost to acquire a customer sequentially decreased but we still think we can be doing a much better job using our sales and marketing spend more effectively.

For context, historically marketing has owned 100% of our lead generation activities as well as our budget.

Plan moving forward is to reduce a portion of our marketing budget and reallocate. These funds to outbound business development right pressure or BD ours.

We've seen that we've seen positive results with our BD our efforts and think this new approach will result.

Well efficient overall lead Gen process overtime, we believe it will have both a pronounced impact on our customer acquisition costs as well as our cash payback period.

As evidence of the effectiveness of this new approach and for some additional color on our pre and post Corona virus performance.

We didn't see a slowdown in sales in the back half of March as our prospective clients went into locked down but saw new client sales rebound and gets stronger each week in April such that our new client adds an April were flat year over year, that's compared to 2018.

In summary, our sales team has done a great job of scheduling demos in converting them to sales by explaining the benefits of marketing automation software in this environment and this execution was accomplished with reduced marketing spend and in part as a result of our new BDR led lead generation activities.

Looking ahead, we're keeping a watchful eye on the latest update from the C.D.C. The World Health organization and other regulatory authorities to determine the best course of action for our employees in our business.

We continued to maintain an open dialogue with our workforce to ensure that everyone is from any healthy in safe.

Because of the fact that our teams have mostly worked and in a distributed manner and the tools. We use as an organization are all cloud based we're able to support remote option operations quite effectively.

As I've said, a few times like other businesses were not immune to the effects of the macroeconomic slowdown. However, we are confident that we've taken the necessary cost saving steps secured additional cash reserves and have a number of factors within our business model working in our favor that will allow us to continue to operate and grow effectively.

Both during and after this unprecedented period.

We've taken proactive in aggressive measures to guarantee our business continuity in the long term health of our organization and we're well positioned moving forward. We hope you in your family's remain safe and healthy during this challenging time.

And with that we're ready to open the calls for questions. Operator, please provide the appropriate instructions.

Thank you ladies and gentlemen, the floor is now open for questions.

If you do have a question. Please press star one in your telephone keypad at this time, if you're using a speaker phone we asked well posing your question you pick up your handset to provide the best sound quality again, ladies and gentlemen, if you do have a question or comment. Please press star one and your telephone keypad at this time.

We'll take our first question today from Darren Aftahi with Roth Capital Partners. Please go ahead, Sir [laughter].

Hi, everybody. Thanks for taking my questions, Okay, as well see if I may Rick you touched a little bit on some trends I'm just kind of curious overall you know on your business and appreciate you guys, giving guidance still but can you maybe talk about the cadence of your business sort of March April and you know about how.

Half way through May those kind of three months kinda JUXTAPID towards them.

Got a client behavior or what's kind of been encouraging what's kind of been discouraging.

Second question do you mind quantifying what the perfectly today its revenue was in the quarter and then on the 6 million in cost savings for the remainder of the year.

Do we think about that is 2 million per quarter or something different and where those mostly kinda concentrated in thank you.

Oh, you're showing a lot of faith in me asking a three part question and so we'll see you know how I do with that.

Let me, let yes, sure I'm I'm sort of excited to give you a little bit of color on.

The first part of your question was really behavior over the I think pre and post Corona virus.

Timeframe. So let me give you some rough numbers here I think January and February we did about 120 sales new sales.

I'm rounding a in each of those two months so very what we take it was a very strong start to the year March books right on track and then sort of mid didn't sell a thing for the rest of the month and we ended up with March right around 80, or so sales.

And that's that's how you get to your 321 April we saw sort of bounced back and I know, we're not in Q2, but I'll, let you know that April.

We ended up you know in the high or the I'm going to say that.

Mid Ninetys in April so well, we really saw was a temporary I think blip and then there was similar trends going on with the things that you know the precursors to our sales the lead flow that that turns into demo requested demos and were seeing a I think.

He darn good.

We're feeling good right now about what's going on with our our lead flow the number of demos and you know how we're feeling about Q about Q2. So it really felt a lot like a a like the world paused in March, but got but sort of quickly recover I think the same is true.

On the attrition side, we saw sort of our normal attrition rates I'm on the logo basis. That's you know hovering around 3% in March we saw that number go to 5%.

That five was actually driven by our.

By our mainly by our country partners, who are up at like eight 9%. These are very small deals, but on the logo basis, they really in a shot through the roof there.

And.

So and then we saw that return back down to normal levels in April already I mean entirely normal levels. So so march was an anomaly in bulk of sales and the attrition side, we're happy to see things sort of returned to normal and in April of course, I gave you the logo numbers the net revenue.

Attrition numbers were much lower than that because again, we lose low value clients when when we lose clients the decline, but don't get expansion with regard to the P.A. revenue, we were right around 620, K or so six six right in that range.

And yeah I blew it what was the third part of your question.

A third part was on the cost reduction more ral yet to save millions of <unk> savings that linear across within the last three quarters.

Oh I, we think it would be real close to linear it's a ah yes. It is a.

Function of us.

Doing a 10% a reduction in in a base salary across the across the company.

We reduced bonuses, so managers are sort of leading the way here in terms of the reduction in a in compensation.

And we and I alluded to this in my comments, we think we've gotten Luckily we think we got a little bit smarter in terms of our customer acquisition strategy right around the same time all of this was.

What's happening and so.

We feel like the marketing spend in our new processes mid I mean that maybe a permanent efficiency change on our side as well and this is <unk> to be specific I'm talking about our moves to a sort of a sales driven organization in terms of lead gen.

Entirely dependent on on on marketing to generate leads and so.

So yes, although all those factors that should be linear over the over the last three quarters.

Great. Thank you.

Yeah. Thanks, so much appreciate it there.

Our next question comes from David Hynes with Canaccord. Please go ahead Sir.

Hey, David.

Hey, Thanks, a lot like how are we doing.

Well well if you were well good luck.

Yeah. Thanks so.

First question what percent of your 2000 agencies are paying you subscription fees above the minimum threshold.

I guess I'm trying to assess the risk of.

You know partial churn if an agency loses and user.

Yes, good question.

This is I don't know this number off the top of my head, but I am I would bet, it's 25% give or take 5%.

Maybe maybe maybe a little bit higher than that.

But in that range.

Okay. That's helpful.

And then second question just help me the philosophy of new features being paid for additions versus bundle them for free right. It seems like you've rolled out some pretty interesting stuff that's been pretty widely adopted.

Granted it's on the heels of a significant price increase so you know clients feel like they're getting value for paying more but just on a go forward basis.

Do you continue to innovate how do you think about what's going to be paid for and what is going to be a bundled in as part of a basic description.

Yeah.

It's a it's not clear answers. So we're looking at the features and we really look at the features.

Oh, whether or not the added.

Weakness of the platform for example, this chat but feature is yet another thing that builds and you know configured it takes some time to configure it you might wired into various you know parts of of your your process and so forth and so to the extent that we have somebody using the chat, but that's a really.

Good thing for us from a churn perspective, and so we sort of Wade.

Selling that as an extra feature and yes, you know there's revenue that shows right right up you know and ER.

You know on the books versus the anticipated impact at reducing churn.

I'll tell you we even after our price increase we remain one of the best Damn values, you know out there and we're going to continue to do that so we're we're sort of looking at the opportunity to what would a sales and adoption curve might look like in the revenue there and weighing that against.

What we think that the offset would be in terms of its ability to lower age attrition and send up competitors et cetera et cetera. So that's roughly what we're doing when we think about these features.

We think there's plenty of opportunity to add paid for features.

But and those would be the card to features we might add or.

That you know we look at it and we say this isn't going to save anybody from from leaving US. It's not a sticky feature if you will but it adds a lot of value that would be the type of a decision we might make to to say charge for that feature.

Yeah, Okay that makes sense I'll hop back in the queue. Thanks, guys.

Hey, thanks, so much take care.

Our next question comes from Eric Martinuzzi with Lake Street Capital. Please go ahead Sir.

Question about the competitive landscape I know.

Some of your agency his or her sharpspring trueblue, but some of your agencies actually work with more than one marking automation providers have you seen any increase maybe in accounts looking to step away from a higher priced marketing automation solution and moving over to you guys.

As or is that really just kind of noise level.

In the prospect pipeline.

So there's certainly a lot of anecdotal.

Evidence of that we we hear that happening all the time I don't know that it raises above.

You know I don't know that it's there's some strong signal I can report here the switching costs on these platforms. As we spent some time talking about as you know fairly high and we think that there's.

There's the potential for that to start happening to the extent that the you know economic situation problems deep and and people are really looking to to cut costs over the long term I mean, we are the solution for that and and so that would only move in our direction 100.

First time at the time people would never leave Sharpspring to go elsewhere, but they would come to Sharpspring and so it does it feels like forever I'm sure for everybody on the call, but what are we've been doing this now eight weeks or so and so we've not seen a mass exodus or.

Toward us, but but certainly that happens that we've heard of it happening and we clearly encourage it and remind our agencies would have value we are so.

Hopefully that's a thorough answer the question.

Okay.

So you guys had an incentive program out there and it sounds like.

It would be a discussion on the margin potential positive okay. Yeah no.

Go ahead.

All right I was just Gonna stadium.

[laughter] or we did that thing right now you go ahead or Eric I'm, a quiet now finished and Saddam shifting gears.

All right well, let me Jive in with the.

A layer deeper than on the.

The revenue forecast here, you've got a 30 to 31 million for the year.

We do have historically perfect audience is it's going into right direction. Historically, we see about two or $300000 sequential increase any reason to believe that would not be the case here Q2 versus Q1.

I don't think so no.

Okay, and then on the operating expense.

You know, we kind of we've been here in a perfect audience for a full quarter now, but you did the cost cuts.

I understand the 6 million of savings, but just kind of take me to a number do you have a opex number it was good opex number to use for Q2.

I'm going to I think I'm going to defer to Michael on that.

On that question.

Or in general.

Cooper.

Total total all in.

For Q2, probably around.

5 million.

Okay. So that's the cash opex number that you're talking about yeah.

Okay that covers my questions. Thanks, guys.

Thanks, a bunch our take care.

Our next question comes from Chad Bennett with Craig Hallum. Please go ahead Sir.

Great. Thanks for taking my questions, Hey, Rick So nice job executing and in a tough environment. It's great to see the the guide reiterated so kudos. So a couple of things are kind of piggybacking on some previous questions. So I.

I guess you know on on the guide for the year you indicated perfect audience is on track for the second quarter. I guess have you changed your view on the annual number four perfect audience embedded in that overall revenue guide.

No we haven't I mean, I think we're expecting so far the numbers for perfect audience.

Are you know, we're sort of making improvements to the business as the economy is doing its thing and and that is that is maintaining that's getting us to the our budget numbers were keeping up with with our internal expectations.

Around around perfect audience, so a pretty excited about that but good to hear and then just circling back on the attrition you pointed out.

Yep, it's great color on the on the logo versus dollars, which is good color for us, but I assume none of this attrition or any attrition you have seen to date has you believe has come from the price increase is that fair.

That's correct a price increase was done in January.

We saw no noticeable and I actually I as I.

Honestly as I read it I realize I would've tweaked one of the sentences that we that we perhaps but no. The logo attrition that we saw was not a tied to the price increase we provided so much value with that price increase I mean, nobody's nobody is sending me.

Hours when we when we.

When we do a price increase but by and large every one of our partners recognises what a value there isn't sharpspring and ER and so we did not see any material.

Attrition due to the price increase.

Got it and so it's kind of goes hand in hand, but net revenue retention improved.

Again pretty decently actually which is.

Good in this environment are remarkable in this environment. So I I know you've been targeting.

No getting that over 100% has has anything changed in your mind.

Of getting to that 100% bogey and you know can we get there maybe even this quarter.

Oh potentially yeah. The I think the Corona virus stole it from me here with our with our extra blip of attrition in March or where are we would have been able to you know report on that number being north of 100%, which would have been <unk> a lot of fun, but we'll take 99.6 for right now you know we see that.

We see that trend continuing I've talked a lot about our user base the with each passing year in our business, we get a larger percentage of our user base that we would count as mature customers I think it was cheap DJ you asked the question about how many of our agencies have actually hit expansion and I gave a number that was less.

50% as those customers expand on the platform and grow that's where we see incremental steps towards you know north of 100% revenue retention. So I would expect this coming quarter.

For sure and you know I I think that's right and then over the long term.

You know I would think we could.

We could work to stay there.

Great. Thanks for taking my questions nice job guys.

Hey, Thank you so much good good to have you on the call I think it your personal and.

At this time. This concludes our question and answer session I'd now like to turn the call back over to Mr. Carlson for his closing remark.

Yeah, Needless to say in these times, especially I want to thank our employees, who have been fantastic we've switched to a work from home environment. They have been executing like the team that they are want to thank our partners and investors for their continued support and we wish everybody on the.

This call you and your families and friends all the a health and happiness that you can but you can muster. So thank you so much for spend some time with us take care.

Operator.

Before we conclude today's call I'd like to provide sharpsprings. It safe Harbor statement that includes important cautions regarding forward looking statements made during this call. During today's call. There were forward looking statements made regarding future events, including Sharpsprings future financial performance.

These statements reflect the company's current views with respect to future events. These forward looking statements involve known and unknown risks uncertainties and other factors, including those discussed under the heading risk factors and elsewhere in the company's latest annual report on form 10-K, and quarterly reports on form 10-Q that may actually.

That may cause actual results performance or achievements to be materially different from any future results the performance or achievements anticipated or implied by these forward looking statements.

The company does not undertake any responsibility to revise any forward looking statements to reflect future events or circumstances.

Also note that during this conference call, we may make reference to adjusted EBITDA core net income or loss and core net income or loss per share, which are non-GAAP financial measures presented a supplemental measures of the company's performance.

A reconciliation of net income or loss to non-GAAP measures is included for your reference in the financial section of the earnings press release and made available on the company's website.

Finally, I would like to remind everyone that a recording of today's call will be available for replay via a link available any investor section of the company's website. Thank you for joining us today for Sharpsprings. The first quarter Twentytwenty earnings Conference call you may now disconnect.

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