Q1 2021 Domo Inc Earnings Call
Welcome to damage first quarter was 21 earnings call at this time, all participants I know that send all new mode. After the speaker presentation. There will be a question and answer session ask a question. During this session you'll need to cut star one on your telephone. Please be advised that today's conference is being recorded.
If you acquire any further questions. Please press star zero.
And with that I will hand, the call over to Peter Lowry, Thomas Vice President of Investor Relations.
Good afternoon welcome on the call today, we have Josh games are founder and CEO.
Our CFO and Julie keel or Chief Communications Officer, Julie will be done for their safe Harbor statement, and then onto the call Julie.
Our press release was issued after the market close and it's close to the best Relations section of our website, where this call is also being webcast statements made on this call include forward looking statements related to work, there's nothing federal security laws, including statements about financial projection the plans and expectations for go to market strategy works.
Like patients for sales and new business initiatives.
Impacted cobot 19 on our business and our financial condition.
These statements are subject to a variety of risks uncertainties and assumptions.
For a discussion of these risks and uncertainties. Please refer to documents we filed with the FCC in particular today's press release and most recently filed annual report on form 10-K.
And our most recently filed quarterly report on form 10-Q.
These documents contain and identify important risk factors and other information that may cause our actual results could differ materially from those contained in our forward looking statements.
In addition, todays during today's call, we will discuss non-GAAP financial measures, which we believe are useful supplemental measures of dumbest performance.
Then revenue unless otherwise stated when we'll be discussing our results of operations on a non-GAAP basis.
These non-GAAP measures should be considered in addition to lend not as a substitute for ordinary selections from GAAP result.
Refer to the tables in our earnings press release, a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measure would that have been handed over to Josh Josh.
Thank you Julie.
Hello, everyone. Thanks for joining us for the call.
Before I begin discussing the quarter I want to express that the safety of our employees their families and our customers has been a top priority as we operate traditional crisis our.
Our people have been working from home in a fully distributed fashion since mid March I'm incredibly proud of how quickly they have adopted especially as a great care they've shown are customers and the rapid delivery solutions for the new challenges are customers are facing.
Many of the challenges at the moment have highlighted the unique strengths of our platform.
I'm very pleased with our Q1 results, particularly given the backdrop.
In Q1, we posted a 23% increased in subscription revenue.
19% year over year increase in total revenue and much better than expected billings and cash flow and mostly I'm excited about the guidance into position it puts us in for the future.
On the call today, I'm going to focus on a few items.
Brief update of our positioning in a cobot 19 environment.
Q1 highlights, including how we were hoping or new and existing customers navigate the current environment.
An update on our current excuse me an update on our cost reduction plan in recent industry recognition.
In terms of our relevance in the corporate banking environment or any environment, where speed and rapid response become important.
Our core value proposition of B. I, leveraging cloud scale in record time, well positions us to benefit from the digital transformation turned a general and specifically the rapid pace of change that told at 19 required.
Greetings and the automated workflow well create new capabilities.
Our positive position is reinforced by our ability to support work from home initiatives and by the value, we provide to a well diversified customer base.
Do you I leverage being unleashing all the data within an organization without having to rip out existing infrastructure and getting more value from those investments.
In many cases, the dealer customers need now to manage how they operate is different than what they needed before this pandemic.
Integrating this data and making an actionable is one of our core strengths.
We also think the being cloud based it's certainly a tailwind in a work from home environment.
Clubs scale mean significantly greater data capacity.
Something that differentiates us from are mostly on premise competitors.
Call. It also means simplicity in adoption.
And expansion.
For new and existing customers.
Also doles platform can scale to support the growing needs of our customers inelastic manner.
In record time means that because of our integrated platform. Our initial time to value with a customer can be measured in days or weeks instead of quarters or years.
And our ability to deliver value in new projects with existing customers can be minutes for hours.
Total was built for a broadly distributed remotes and digitally connected workforce.
Almost supports distributed work in a collaborative way, which is critical in times like this are mobile first solution provides businesses.
Business users the build trend data they need to make timely affected decisions and allows teams and cross functional units to collaborate around idea.
In an unparalleled way our platform also allows for the rapid development of intelligent applications that leverage data to automate workflows and modernize business processes.
These intelligent applications are one of our key points of differentiation against any other player in the space.
They bring data to life in a way that transforms the experience users have interacting with the data.
This can be a simple is one put connection to massive amounts of data via our connector apps.
To rapidly automate and modernize workflows.
Whether they be existing business processes, such as order entry to completely new processes like P. P. P. Sorry, P.P. inventory management personal protective equipment inventory management contract Tracy.
Temperature scanning and auditing wellness employees.
All enabled by the don't will platform.
Now, we'll talk about some of the highlights for the quarter, including how we were helping our customers navigate the current environment.
One of the highlights was our new initiative to help state governments manage their response to cover 19.
This initiatives demonstrates our platform's ability to help customers quickly adapt.
We started or covert 19 response by having our rapid response team create over the weekend.
Three public facing global Cobot 19 tracking out.
It's been repeated by many should be the best including Jim Cramer, who said it was a vastly superior much more real time sign about coated and others that are publicly available.
Taps into a vast set of published data sources and while we made the stryker free to everyone more than 700 existing customers of ours have embedded data from it into their own docomo dashboards demonstrating the importance of these new data sources in helping our customers understand how to operate in this environment.
[noise] integration partners are delivering data solutions to their customers you using dongles cobot 19 data as well as the done what platform. The coordinating trackers also great illustration.
Oh, how domoic sells at conducting massive amounts of disparate data into a consumable package to help executives understand their environment in real time.
So they can make better decisions about what to do next.
In many cases, we would see reports on CNN from Johns Hopkins do we knew were not as up to date as they could be and it demonstrates when you have big businesses are large amounts of money or critical supply chain information or license stake.
You really should be using demo.
After our success with our public facing site.
We were asked my other leaders to take the expertise would bring to the world's largest companies and to create a cobot 19 crisis Command center for the state of Utah.
And by the way again.
Our team to rack is we delivered it.
They delivered an initial be one in 72 hours over the weekend.
So this crisis command center gives the governor and other executives.
Real time information to help them managers Swift and coordinated response from key metrics, such as testing and tracking data.
Steve entry data from Department of Transportation State entry into the state.
P.P. inventory and current hot spots for active cases.
We also delivered a series of apps, including a governors apt to deliver the metrics features about most so just transmission rates infection stats and testing capacity right to his phone or ipod and governor whiskeys.
Given the success of Utah's deployment, we also signed command center contracts with the states of Nebraska.
And Iowa.
And governors are now asking us to expand the daily in their command centers to include economic insights.
Such as SB eight loan in unemployment data.
And also other health data and state lab Dina.
The feedback we've received from the states has been amazing.
We believe that the successful launches in Iowa, Nebraska in Utah position us further for growth in those government contracts and the government contracts market.
Moving to the next phase of this pandemic decisions. The private sector is now fixed with is how to execute and maintain a safe return to the office, bringing together new inferior do you types orchestrating new processes and maintaining consistent communication with employees.
So with that.
We've introduced a get back to work solution.
Kind of all around the future work, which includes apps that can be rapidly deployed to give the private sector customers.
The ability to gather.
He and act on all the new information they need to build trust with their employees as the orchestrate safe returned to the office.
The apps delivered value for both the employer and the employee.
Almost get back to work solution includes capabilities for a company to monitor temperature scanning and contact tracing as well as a CEO out to give top leadership real time understanding of the state intercompany and employees with regard to the pandemic impact.
Absolutely see hone in on employee experience are designed to instill confidence in returning to the workplace.
These apps alone place yourself assessments.
And also provide a dedicated communication channel between themselves and management.
These and other apps such as apps for training and compliance and workforce credit productivity are all possible because of the double platform's ability to create leverage from any data source and make it make it easily accessible in action actionable in record time.
Our company was built for this time.
Our platform delivers real time data and cloud scale in record time.
So when hours and days matter.
There is no solution like tomo and.
And we invite you to go in check out these new apps and this new initiative.
Get back to work Dot com.
Our platform delivers real time data and cloud scale in record time.
This platform got us into global coated 19 tracking over a weekend it got us into states with command Center apps also over a weekend.
And we crushed it because the state's needed to handle large and complicated data from so many sources distributed to everyone inside their state organization and all of their citizens.
Crop cloud scale and they needed it of course in record time over the weekend.
And our platform enabled us to build into liver P.P.E. out and the governor.
This platform also got us into this get back to work and even bigger speaks the future work that again is characterized by massive volumes of data in massive amounts of people.
We're cloud scale is imperative to.
The data that is needed from so many new sources and so many new types. The platform connected device Stena in systems and spreadsheets and then makes it easy to distribute that dina to users for transparency.
The platform enables all of that.
These apps are not a diversion.
There are door openers to the entire platform and they show in demonstrate the power of the entire platform.
Another highlight for us in the quarter, we're seeing our customers use docomo to rapidly respond to the changes.
For their own operating environment due to covert 19th.
One example is herman's, an upscale grocery supermarket chain here in Utah.
In mid March Harman saw <unk> spam, yes that span spam and other items that usually don't show up on inventory reports were flying off the shelves.
Now using domo Harmans was able to quickly request from its major national distributor. The then current 4000, most important items to harmans customers earlier than any other grocery store ensuring inventory.
Harmans was also able to give a local bread supplier access to a dashboard. So they could understand in real time, what was selling and what was being thrown away and keep harman stores well stocked.
These moves allow departments to get a jump on the supply chain and again secure the right inventory that would allow it to serve its customers better than the competition.
Another example of how we're seeing increased usage. During this time you can't travel a corporate travel management company gets credited don't look for helping minimize any major disruptions to its own business just covert 19 hit the broader travel industry, obviously very hard.
Because they'll move automates many critical tasks get was already operating without the extra head count required for manual processes that many have too many have to do such as client reporting.
So it didn't need to make a dramatic cuts to its workforce.
Again also been using doubles embedded analytics product to deliver on flight services that suddenly became more valuable to its customers in this environment as cash preservation became king.
Can't was able to deliver real time insights into the status and value of unused tickets refunds and number of uncanny reservations across currencies and through rapidly changing policies, we traveled winters.
One difficult decision that we had to make in the quarter was to significantly reduce our operating expenses.
We recognize the potential impact over 19 could happen or business and at our analyst briefing a dual medusa.
We announced that we had reduced operating expenses by $5 million with plans in place.
Based on economic downturn comparable to the one in 2008 2009.
For an additional 30 million dollar cut.
No ongoing assessment was that it was prudent to prudent to prepare for a downturn to protect our balance sheet.
And so we announced the additional 30 million dollar expense reduction.
Well that's scenario was based.
Upon us preparing for a downside scenario for our new business to potentially be 20% less than what our original plan was.
And our expense reductions remain in place and we expect to meet our 35% for sorry, I was 35 million dollar reduction target.
Now, it's always hard to cut heads because of the human toil. It has on individuals and their families and we're doing everything we can to mitigate the negative impact on them.
We now have 25% of those folks who already have jobs and we provided outplacement services to assist those impacted through the hiring of dedicated recruiters.
Creating a job referral network and providing one to one coaching for recent for resonate writing an interview skills.
We also let employees of course keep their laptops as a tool to make it easier in the job search.
I'm proud of our team.
We're pivoting to produce a very successful 100% online docomo palooza in under two weeks.
As the first B to B conference to go completely digital we set a high bar.
More than 9000 people pre registered in more than 12000 beauty that within 24 hours of the life show.
No. This was a this was four to five times increase in the engagement overarching vehicle in person conference.
We were in many things, we will be able to incorporate into future in person doing whose purpose is to make them more productive experiences with much larger and a more augmented reach.
At this year's don't lose we also announced new product features and enhancements to bring additional increased capabilities to the demo business club and help unlock the value of an organization start data, but making it more consumable usable and actionable skill.
These announcements included ubiquitous machine learning and more powerful data management tools and no code low code drag and drop development environment to empower data driven out creation.
And so forth for Adas, you SH maker autopilot to drive machine learning insights for everyone in the business.
We continue to receive a wave of third party recognition, which is validation for our platform, particularly in this environment were speed and business agility, our imperative for customers.
Some of these awards included business intelligence solution of the year in the 2020 data breakthrough awards the number one vendor ranking for the fourth consecutive year.
Let's say that again.
The number one vendor reaching for the fourth consecutive year in the Dresdner Advisory services 2020, cloud computing and business intelligence Mark Marcon study.
As well as the number one vendor ranking in their 2020 markets study for self service business intelligence.
And for the third consecutive year.
Trustradius gave Docomo top rated awards based on customer reviews.
For both be I tools, as well as David discovery and visual visualization platforms.
And lastly, we were named to the women Tech councils 2020 shattered lists for helping Blake break the glass ceiling in technology.
I was pleased to announce the quarter. The addition of a public company CIO Joy Driscoll drilling of event to our board of directors.
As CIO of a domain customer pretty insights will be value invaluable as we look to our next phase of growth.
I'd also like the highlight that since taking the parity pledge that we helped create in 2017, we have increased the number of women leaders on our board from zero to three.
Used to be all venture capital investors and now we have three women leaders on our board.
This diversity of thought inexperienced makes us a stronger company.
As we all know diversity inclusion is not just about gender.
We stand with the black community free quality and Justice.
In October 2017, I appointed a director of diversity to help don't will build a welcoming culture for everywhere.
In early this year, we initiated an internship program with H.B.C. use to welcome black students into tech.
As the events of the past weekend days have shown us we have a long way to go as a country and we're committed to doing our part to help advance meaningful conversation.
And change at Docomo and in our communities.
Black lives matter.
So in closing I'd, just like to reiterate how proud I am of our employees, who have not pause for a moment in delivering the value of our platform.
To help our customers operate most effectively in a challenging environment and with that I'll turn it over to the Bruce.
Thank you Josh.
We had a strong Q1, continuing the momentum that we experienced in Q3 and Q4 of last year.
I'll now review the details behind her performance followed by providing second quarter in fiscal 2021 full year guidance.
Our Q1 billings of 46.5 million a year over year increase of over 13%, what's driven by our ability to quickly adjust I go to market efforts toward companies and a healthier sectors of the economy.
Related Lee we were able to in a matter of a few days.
Adapt our product to respond to governments in need of data to manage the crisis.
Specifically to our government response, we were able to close 4.5 million of recurring new business.
Selling Ur Cobot 19 crisis command center during the quarter.
At the same time, we generally benefited by having a low percentage of our business from very small company.
At Salesforce already condition to primarily selling via the phone.
And then installed base that has a considerable amount of white space for us to further expand into it.
In addition.
Our renewal rates were above 85% and they seasonally they slow quarter and given the economic environment were pleased with this outcome.
We had 57% of our customers under multiyear contract at the end of Q1.
Our remaining performance obligations or RP, Oh grew 17% compared to the same quarter last year.
Q1 revenue was 48.6 million.
A year over year increase up 19%.
Scripture revenue represented 87% a total revenue, reflecting our focus on specifically growing recurring revenue.
International revenue in the quarter represented 24% of total revenue compared to 25% in Q4.
Our subscription gross margin was 79% up more than two percentage points from 77% in Q1 of last year rapidly approaching important 80% milestone.
We were able to make that progress against a 60 plus percent.
Annualized spike in customer usage volume that we have experienced since the pandemic began.
Nevertheless, we plan to obtain additional leverage out of our subscription cost of revenue overtime as we continue to effectively manage our data center operations to finding efficiencies better utilization of certain services and optimizing how our software performs and data centers.
In Q1 operating expenses decreased by 9% from last year, even though revenue increased by 19% year over year.
In fact, looking even further back our quarterly Opex is about $15 million lower than two years ago. When the company at a much smaller scale of revenue.
I would point out that the vast majority of our 35 million physical 21 cost reductions, which are reductions against our original plan.
Well be realized in Q2 through Q4 and the impact of those reductions in Q1 was minimal.
The net effect of increased revenue, while effectively managing costs allowed us to improve our operating margins by 34 percentage points from the same quarter last year.
Our net loss was 18 point fourmillion and that loss per share was 65 cents. This.
This is based on 28.5.
No again weighted average shares outstanding basic and diluted.
Turning now to our balance sheet as of April Thirtyth, we had cash cash equivalents and short term investment.
Approximately 88 million.
To reiterate what we've told you numerous times since going public we're confident we can and will be cash flow positive with plenty of cash remaining on the balance sheet when that occurs.
We continue to look for ways to further reduce our Casper and our discipline around this effort is firm.
Our adjusted net cash used in operations was 9.3 million.
An improvement of six melia over the prior quarter, and a 58% reduction compared to Q1 of the prior year.
Adjusted cash flow from operations excludes the impact.
Of 3.7 million.
Share purchases under our employee stock purchase plan.
The amount is included as a positive them out and our GAAP cash flow from financing section of our cash flow statement and an offsetting negative them out and our GAAP cash flow from operation section, but no net effect on our cash balance.
Note that there will not be a share purchase on their employee stock purchase plan in Q2.
Now to discuss what we expect in Q2 and for the full year.
Like many other public companies have communicated to you over the last few months the uncertain economic environment makes it difficult the guide beyond the current quarter because of the wide variety of factors and possible economic scenarios, so rather than a problem guide for the rest of the year will provide an update to our covert.
19, downside case that we used the core reducing costs.
Our cost cutting purposes, we modeled a 20% downturn and our new business compared to last year and an 80% we know right.
That led to a billings number for cost cutting purposes of about 190 million for the year.
Since then we have over performed in Q1, where by Q1, new business actually grew over last year.
Yes.
We realized an above 85% Reno right.
Versus our 80% model.
The combination of these two factors led to a total billings to be relative to our model in Q1 alone of about 7 million.
Adding that 7 million billings outperformance in Q1 to our previous down 20% off for the year of approximately 190 million of billings now points to billings for the year to be around 197 million.
If we can exceed our 40 million due to billings number and that model, we can improve that annual outlook.
As of right now we're tracking above the 40 million. However, we cannot predict with certainty how the rest of the quarter, where the belt. So we suggest you think gets 40 million for Q2 billings planning.
40 million number does not include the closing of any new crisis Command center deals because the focus on requirements of states are constantly changing and selling into that changing set of needs is very hard to predict.
Having said that we're responding to me evolving needs of government and at the same time, focusing on the needs of commercial entities and this environment. So we're hopeful that yield some positive contribution in Q2.
On expenses were planning on our Q2 operating expenses decreased by about two to 3 million.
Q1 levels.
I remain close to that level of Opex for the rest of the quarters. This year.
We expect Q2 adjusted net cash used in operations of approximately 7 million.
And expect full year adjusted net cash used in operations of approximately 30 million.
We believe we'll be able to exit this year with quarterly cash burn rate that is low enough to provide confidence we will comfortably read self funding sustainability.
Now the formal guidance for the second quarter fiscal 2001, we expect got revenue to be in the range of 48.
Point 5 million to 49.5 million, we expect non-GAAP net loss per share basic and diluted.
48 cents to 52 cents.
That's a sense 29 million weighted average shares outstanding basic and diluted.
For the full year fiscal 21, we expect GAAP revenue to be in the range of 194 million to 200 million representing year over year growth of 12% to 15%.
We expect non-GAAP net loss per share basic hit the looted of $1.96 to $2 and six that.
That's a 29.2 million weighted average shares outstanding basic and diluted.
In closing, we're pleased with our results for Q1 and fill prepare to successfully navigate through these uncertain times with that we'll open up the call for questions.
Operator.
Thank you as a reminder to ask a question you would need to press star one on your telephone to withdraw your question impressed upon key please standby when we compare the candy roster.
My first question comes from Sangita Singh with Morgan Stanley. Your line is now open.
Hi, This is actually Chris on Firstenergy. Thank you for the question and congratulations on a really good solid quarter and really appreciate the detail.
I'm sure you've been disclosing behind the guidance can you maybe talk about.
And the progression of did this in demand trends throughout the quarter, especially as we do in maybe on the from early April at quarter end and than what you've seen sense in may and through early June have you really helpful. Thanks.
Yes, so the question Chris.
Oh, I'll Oh answered just briefly Bruce and then let you give a lot of details I mean I think.
You know from from last quarter.
No at the beginning things were things were looking good and you know we gave the guidance that we gave we felt pretty good about things and then as it became apparent that cobot was going to have a meaningful impact on.
On the World and.
And accordingly on our business, what kind of went into panic mode for a minute certainly and it was all hands on deck you know if our.
Travel customers, and and finance customers and other customers or or something business, what are they buying and it became a pretty apparent quickly that with our platform and the ability to pull data from all kinds of sources and.
To be able to give people access to data in real time, when these moments certainly when days or mattering.
It's it was it presented itself you know an opportunity to us and and I started with that tracker that created and then it really went into these dipping states and you were talking to a lot of different states at different times, and we were hoping with our state we were I brought in.
Probably about 10 million different pieces and P. P E.
That type facilitated and and you know the state procure and we were just right in the middle of these conversations and because of that it became apparent that they needed data and they need and answers the needed no. It was going on there were making decisions blindly. They didn't know if they should open stage close states when they get back to work et cetera, and they were really struggling that's they weren't built.
Do that and so we were able to say, yes, we can help you out.
And thankfully there were some contracts that we were able to get and we did such a good job.
With Utah, they were calling other governors for us and introducing us and our team it was quite amazing.
The effort that they put in we when we normally have a company meetings where.
We will highlight a few employees and say you know this is here's here's the few employees that really stood out this quarter and we had a zoom virtual company meeting.
And highlighted about 80 people that had pulled multiple nighters instead of the usual eight or 10 people. They get highlighted we said, we enjoy pool and multiple all nighters they need to be highlighted and it just showed like everyone was was was ready and willing and wanted to help and we did some masterful.
Service for for these customers and it changed the course of how they responded.
Q2, things and help them save lives, which was really kind of cool.
And the process you know they had money and we're willing to pay for it and we need to be paid because instead of selling other types of solutions. We were selling solutions. We're focused on the command center. So.
That was that was kind of how that stuff all evolved and then.
It was really interesting to see different parts of a b world respond different ways in Japan was.
Close down early and working from home early and they were still closing deals and Japan did really well for us. So a lot of really interesting news, but mostly it was it was you know a quarter that really highlighted the power of the platform that we have and if you can do it for a large fortune 500 companies and Ceos and Fortune 500 companies that Cxos a fortune 500.
Companies you can certainly do it for governors and any any federal employees as well. So we were extremely excited how much that it shined a a great line on on the technology in the platform that we have.
<unk>.
Yes, and the belt on that you know in March when we were at our user conference.
Our customer conference and we said, we haven't seen anything yet but were pair to cut costs incentives. We do and then as you know we decided to cut costs.
Anyway.
And that was just for the abundance of caution.
Then we went into April and March finished out fine. We went to April and we had some of the fastest sale cycles. We've ever had with these correct command centers. So April was strong.
And now we're into May well, we finished may and I can tell you that may was off to a good start.
So we we are pleased with our performance.
You know at the beginning of Q2.
And we like everybody else is still worried about what may happen in the economy, how may impact our customers out might impact does.
But were happy to be here today, just saying that.
The pacing is good and may close out.
Oh that well, so I think that puts and so and it's going to position as you know you can be just given the economic environment.
Yeah, and then I would add that you know what this I talked about lewinton prepared remarks, but what this.
Command Center allowed us to do is to be right in the middle of the conversation a very important conversation now that's not just she's state governments, but.
But.
It's every single company in the world's trying to figure out how to get back to work.
And it leads to a whole set of questions that they've never had to answer before they've never been prepared to answer before and so because we're in the middle of with the cobot tracker and with all the success we've had with.
With our state command centers, we're getting asked how can we get back to work how can we do contact racing. How can we understand that are facilities are being clean how how can we be transparent to our employees and give them confidence that they can come in how what kinda tools and systems to our facilities managers need and then how do we expose all of this too.
Our executives in real time, so if someone get sick.
That they can easily see what kind of what kind of information we have we need it now in real time, and then as we start opening back up and you need to go visit a customer we've got customers that they're they're out in their cars and trucks visiting their customers, they're flying to see their customers and you find all of sudden.
That was a hotspot that you went to where before you go you want to check it it's a hot spot well, we have that data in our customers 700 of our customers are using that data. So it's a you know get back to work is a real initiative that we are extremely prepared for relative to any other company that we've seen because of this platform that we.
Out of when the in the rapid ability to create a solutions and applications to answer your questions. That's all based on data that's coming from hundreds or thousands of sources. That's what we do so we're really excited about our ability actually provide great value to our customers right now and we think it should benefit our business.
Got it that's really helpful. I'm correct tag on a follow up question. So I think you mentioned early in the script $4.5 million a recurring business from the crisis Command center at the same time, you have less headcount now, but you slightly raised the revenue for your revenue guidance.
This more a function of.
Longer than anticipated contribution from deals like the crisis Command center or are you kind of embedding assumptions around improved sales force productivity.
Thanks.
Well I would say that one is.
Without the correct Man center the.
Core business that was within guidance.
So we're happy with that right.
The renewal rate the renewal string that really had none of this in there also performed better than last year.
The May result in.
Renewal rates are even coming in stronger.
And then in the new business comment upheld.
We're off to get started Medicaid.
Not clue does not include than it would probably.
So I would say that where you know we're happy that we'll call you know the before we had the opportunity of new products, we still had a business.
That was a strong inappropriate and valuable to the market and and you know in this environment. We just happened also had the benefit of.
Not a lot of exposure to the troubles industries.
You know not an incredible amount of you know business coming from very very small company.
Uh huh.
You know they set on the call also gets the benefit of being able to being used to very well condition to selling over the telephone.
I think all these are just contributing factor, though helping us.
Finish the quarter strong and getting off to a good start in the near quarter.
Well I think that's the thing that you've talked about before Bruce is that a this doesn't include guidance doesn't include is a big deals. So there's big deals out there are two they may or may not come through we don't put them in our projections.
You know there's more state deals that were talking to they may or may not come through like Bruce said in his prepared remarks, not including those in our projections, but then you know in terms of how you know we're feeling.
I think that were.
As well positioned is just about any company to do well in this kind of environment and Bruce talked about that a lot to but we're seeing it you know work from home Oh, that's what we do Oh, that's what we enable Oh you need come any data to every employee Oh, that's what we enable.
So we're having customers call, it's quite a bit and saying Hey, we need you guys. You do this additional item for us as well. So we think that we can do really well in this environment.
Got it thank you congrats again.
Thank you.
Your next question comes from Brad I met with Credit Suisse. Your line is now open.
Hey, it's mark along the line for Brad Zelnick, Congrats on the quarter I just wanted to ask again just about the command center, it's great to hear some of the state wins that you had in the quarter can you talk about just the opportunity that you see there going forward and even as we start to exit the pandemic is that something that there's a potential for.
Account expansion in thanks.
Yes. So I think it's you know it's one of these situations where they have a real problem right now we can fix it right now and we can fix fast and provide some tremendous value.
The moment that we got in there, though you know all of our all of our.
Our Swat teams that are in there helping these customers.
There are number one initiated besides solve the current need is what's getting more data in there let's get other additional items in there so that when it comes time to renewal weren't a fantastic position to not only renew it but you know potentially even upsell them to some other products and services and we're already seeing I mean, you've governors are very very happy.
It would be.
You should you know would be happy to encourage you to talk to a any governors you can get hold of that are using our product because their teams are excited they are genuinely excited.
The you know when Bruce as follow up calls with somebody investors aren't you should ask for seem to quote to the things that our customers you're saying.
But it's transforming the way that these governments are running it's not just about the pandemic.
But so the pandemic comes along and the like Oh, Okay. What about PPP loans, how are we doing on that front well, there's a whole new set of data a whole new set of constituents and then we're talking to state lapse and they're like okay. Here's the state lab data for for coated.
What we have 20 other things that we're tracking can we get that data out as well and then a state comes to us and says.
Is there anyway, we can just break up the stated distributed by county, So each county Health Department can see what's going on.
Oh, yeah with something called everywhere, that's what we do.
And you know these customers. These these states are kind of in some cases lapping thinking about what the county Health Department leaders are going to say when they get data for their own county, and it's not it's they've never had it in the first place. The fact that you would get it and it's real time for tests that are taking place the day before it's it's just my.
Bob them to them. So we didn't there's some real opportunities here, we've got three fantastic flagship customers and I think that we're going to have that you know a decent opportunity to build it really cool government business out of this.
Thanks, that's helpful and just as a follow up I wanted to ask if you could provide any comment on a its progress since he transition to the role of us zero.
Yeah, I think we're really excited about Ian we've been we've been <unk>, we had the advantage of being able to watch him a run Europe and watching interact with the with the executive team and you know challenge different people on the executive team be included.
And you know have very strong opinions about.
The weighted things should be run he's he's brought a tremendous amount of.
Follow through and organization, which is something that we needed more if certainly and both Ian and John Miller of really partner together to say what are the where can we get more efficiency, what's working what's not working how could we doubled down on the places where we're getting the response that we need how can we hold.
People accountable, let's get the right managers, there and we'll just keep continuing to optimize and actually we we've continued to see the pipeline grow with the pipelines doing great. It's just a question of winter customers Wednesday environment going to be that customers are closing at rates that we've seen historically, but if that's the case you know there weren't a great position. So yeah, we've been very very very please.
With the and then I hope he doesn't use us against new privately, but yeah. He's been doing a great job.
Thanks, and congrats again.
Thank you. Thank you.
Our next question comes from Jennifer Lowe with U.P.S. Your line is now open.
Great Thanks, and congrats on the quarter's guys.
Maybe just to start I. So it sounds like you're seeing a lot of momentum around these I used cases that are very cater to the current environment I'm. Just curious if you look in your pipeline you know how meaningful is things like returned to work in terms of this deal volumes, you're seeing relative to more traditional business and what do the sales cycles and they you know new versus existing.
Mix look like for that relative to historical mix.
Yeah, I think you know when we give guidance, it's not based on its having a big chunk of our opportunities coming from this these these new these new opportunities for these new initiatives.
They're they're based on selling or platform and.
Because we can predict that we've got you know.
Quarters in quarters, two look kind of history to see how these things close in to know what those conversations feel like and we look to to Ian and the sales organization to tell us whats going to close and so that's what we've handicapped.
Any in addition to that you know any big deals or any of these new initiatives would all be greedy.
And so we're excited about you know we're really excited about them. The sales cycles. They are faster people are trying to figure out how to get to work now and we look at the conversations that we're having.
On get back to work and we can be talking to you know world renowned.
You know as size consulting organizations or fortune 500 companies and we see based on the read on the repeats conversations and followed conversations that we're having a how well equipped and organized and how much knowledge frankly that we have in the space given given that we've done so.
Such in this space already from the Cobot tracker to helping new sneaks I mean, we're talking about you know Satan, putting together a whole army of organization.
And helping a steep figure out how to respond to how to open and which county should open and where do they need more testing and how to organize P.P.E. and people you. Having you know thousands of people that are donating P.P.E. and then they're buying p. from all kinds of different distributors and then they've got all these constituents that they need to hand that out you whether its.
Care homes or hospitals.
Or you know frontline responders those are big complicated problems that we have solved.
Amazingly well and so now when you want to talk about getting back to work well guess Susan first in the whole conversation.
Hundreds of people that my company are are well versed in this conversation. So it's put us in a position to to know a lot and then on top of that this platform is just so well versed at responding rapidly for rapid development to create a solution that sits on top of something where you need to have this leverage of all the data.
In business intelligence do you have you need to habit at cloud scale massive scale.
Not just in terms of data, but in terms of people.
And then you need to habit and rapid time, you know, Iowa has hundreds of thousands of people that are looking at their data in real time all of their citizens are coming to the site and looking at what's going on so it's really been a monumental achievement that I don't think should be a you know underrepresented it anyway and.
It's putting us in a great position to get some additional upside from get back to work, which is going to help us talk about the future work as a whole and all of that would be greatly to the numbers that we gave you.
Let me just one last one for me I think probably for Bruce I'm looking at through the cost cutting a it sounds like the cost cuts were predicated on a sort of a downside scenario. So far it that downside scenario hasn't quite played out as as as it could have and it sounds like getting a bit better. So if you think about sort of that split and.
That might look like in a few quarters, if there's an expectation that that the cuts are made and maybe you kept the profitability of that faster if the revenues come in better than the downside case or could we see start spending again, how should we think about the time rise in there.
Well we.
You know, we're gonna be I'm cautious about adding back end.
And then we get more clarity on maybe how the macro environment develop.
So in the short run most overperformance is going to help our cash position.
At some point as we get clarity on you know how the macro it's going to play out and.
And we get responses to.
These offering.
You know that may very well suggest to us that we ought to be leaning into little bit more.
Well, what we likely with doing that cases, we'll be adding.
Capacity first.
Don't think idea across the board spending, but that's coming after the might be smart.
Place to put the investment.
To be prepared for next year, if we're able to kind of gray will that continue to navigate the tobacco well.
But we don't want to be caught to flat footed when they come out of it.
But in a short round a lot of that falls to the bottom line.
The longer in the medium term.
As we look to next year with everyone, a doubling capacity, but it won't be a dramatic increase in costs I think we'll do it cautiously and.
And if we do really feel like this incredible.
Traction and pipeline building that requires more feet on the street right now yeah, we'll do that but I don't think they'll be.
That dramatic to the net cash flow position that the company at least not this year.
Great. Thank you.
Thank you.
Next question comes from Pat Walravens JMP Securities. Your line is open.
Oh, great. Thank you and congratulations Josh and Bruce on on the quarter. So.
Josh it sort of re winding a little bit.
We the co bid 19 crisis it felt like the major areas of focus were.
Running some focus sales plays that that maillard come up with which is like sales operations marketing operations.
Chantal operations, and then I'm really improving the partnership motion and in particular, you guys were talking about.
The Snowflake partnership in the Microsoft partnership.
So has has has covidien 18 work from home Command center completely changed those focuses for the entire salesforce.
And also can you update us on the status of those partnerships.
Oh.
Got it needed so hey, Josh.
Oh, sorry, yeah.
I would say no it's been the opposite out it's the sales plays are performing really well and our.
Our our salespeople now or are all trained up and running these plays and we're seeing performance out of these plays we are gravitating to the ones that are the most effective.
And the partnerships as well yeah, we said another sales training on Snowflake, we've got additional announcements with them and we're also seeing with our ability to respond so rapidly in the marketplace.
We're getting a lot more phone calls from partner so partner network isn't.
Isn't massively moving the Dow first yet, but there's a lot of things going on but I think you know I think we'll move the dial and we're certainly becoming more relevant.
In that in that world.
Okay, great. Thank you and then boost we just drill down a little bit on more on on the retention rate.
<unk> in particular, what are you seeing sort of SMB versus enterprise and and what are you doing in terms of concessions for customers and how does that fit in.
Yeah retention rate there there hasn't really been significant difference between enterprise and corporate.
Mostly because corporate act that a lot like enterprise them into deal sizes are 50000, plus and the company size its own vote on the larger side.
So and we're also I mean, as where as we're into the new corridor.
Our renewal rates are up to where we want them to be do you want usually seasonally slow, but right now they're tracking at the kind of rates that we're really happy about that blended corporate and enterprise.
And then on on your other question, Yes, we have had the that's basically the smaller businesses and the most troubled industry.
I've asked for concessions.
And we have a common day that.
Short term requests.
I would say to the tune of about a million dollars.
That we've already absorbed in the quarter.
But we have preserved if not increase.
The total contract value in those cases, so we feel like we've done the right thing to really help customers than me, but we have not really administer the value of that stream to us.
So that's the magnitude of what we had have had to address so far.
Okay. That's super helpful. Thank you.
You're welcome.
Yeah and next question comes from deck, what with Cowen and company. Your line is now open.
Great. Thanks, It's Andrew Sherman on for dark Congrats on a great quarter, you mentioned the strength in grocery and the quick shift the reps made another strong sectors, maybe what other sectors are you seeing such strength from and what is your mix of those in total.
Well, we have a we have a extremely diversified.
Industry distribution.
And fundamentally unless it's really a challenging industry, which is a.
You know a minority of our.
Of our kind of exposure and even with and things like retail.
Groceries are strong, but specialty retail might not be those they have great ecommerce presence I think are still reasonably strong.
We're we're finding I'm all the other industries are.
Basically no question based with that and keep in mind everybody's working from home they all need the data the run the business.
They're getting very used to.
You know doing it electronically or.
Where mobile where fast where scale, we're very self service.
And all that just plays really nicely, but its environment I mean, I don't know who's gonna be installing software and servers.
I just don't think any of that is going on so we are we have though we have a great profile for companies that just have to get their hands on data.
And the perfect profile for somebody that need to right now real time and have to bring together multiple data sources really quickly and frankly, that's just the universal need and we think businesses in general are looking in that area.
At least not really cutting and some of them just by by necessity are.
Our are really lenient through it I mean, I I mean, I just heard today of Oh.
They are they furniture store and North Carolina, who literal who had shut down.
For up to now about their reopened.
And we're about to do a deal with them.
And why well they just have to have the data.
Really managed the business, even more aggressively as they reopen.
So that that's a that's kind of response or getting you know across all there all the industry. So there.
Not really significant difference I think between industries I think they just all have that general Nick.
Great. Thanks, maybe for Josh you've done a lot of Webinars with C level executives over the past few months you pick the light bulb, there's finally going off and that this environment can be the catalyst for change that they needed to get to realize that they need a real time solution. Thanks.
Yeah for sure and I think you know just digital transformation a its initiative that a lot of times some of the cxos. They wait for from other people that are responsible for it but this is really forced them to no real time information about their people about there.
Business and you know when you open back up there's going to be changes and the data is going to change that day and they want to understand what's going on that day.
And so it's really open their eyes I in many cases, it's especially in cases, where we're already in a customer and we have big upsells on the table, it's helping to create a lot more opportunities a big upsell opportunities. So we're excited about that for us as well.
And all that does have some of those up the opportunities are replacing just plain old tools. You know the whole set that you had mentioned that said who might be in the market same market does that.
Its becoming quite obvious they cannot rise to the challenge of today and so some of these are just outright replacements, even though that's not what we're in the mission to do but that's what our customers are.
Telling us.
Awesome. Thanks.
You're welcome.
Thank you. My next question comes from Bhavan, Suri with William Blair. Your line is now open.
Hey, guys. Thanks for squeezing me in here at the end I.
Yes, Josh Ella I want just really quickly and by the congrats nice nice job here and thank you for all supported doing so what's happened with children.
Yeah. The out the last year, you outlined kind of the or this or your fiscal 2002 on sales playbook focused efforts on the five specific persona is within the organization.
Updating a love of traction you're having with that new playbook model and hasn't been any changes because obviously the dramatic change the togut. The persona model was very compelling as you think about the broad swath of what you office are trying understand like how is that playing out or do you guys playing to that.
[noise], Yeah, why don't we look to Ian can you turn into line on and led to an answer that question.
Operator rooster well.
His line now open.
They go ahead in.
And you might be needed.
On your own phone.
I just looked to assess risk the question all answer [laughter] boost the question [laughter].
I'll answer that question the name can pile on but we.
We think it's extremely.
Helpful and important to narrow or the focus toward persona is that.
Can really move the needle for and the benefit of doing that as we can put a lot of resources behind.
The more narrow claim.
And get a lot of intelligence about the state and how these departments work.
And it's kinda necessary when you have a platform like what we do that can be applied anywhere and everywhere that themselves. So my question because it could.
You've tried department without this motion that's exactly it just a question because you've tried to sometimes motion multiple times right should we are just sell viral you should we go enterprise retail commercial should we define it by saying Hey, if I go to lots company you can pick pieces like that's why I'm asking question, which is like how has that new messaging and it puts on emotion resonated.
I think you've gotten just sorry.
Bearish yeah.
Yes, we can hear you go ahead in pace right yeah.
Sure about I'm not sure what happened with the earlier attempt for me to answer yes, absolutely its resonated really well for a sweet definitely have seen with the so it was plays and the work that we're doing with Joe met a rule and the.
Way that we distribute the information that we have to wait that we contact customers the way that we engage the language the using the plays in the first started shipping really great on several several fronts. One for the since that we are coming in and we are working and we have used cases value propositions that so its business challenges.
That they aren't able to.
So on the second point you then works the same way that Josh mentioned, which we do then had this fire weldment, where once people see what we do and how quickly we can do it. We certainly have spent all use space weve inside the existing customers that we have as well. So the focus helps us to ticketing and then the far radically hoaxes move outs in going to two other use cases.
Well.
Great that was helpful on that and then one quick one and maybe units for you or for Josh but on pricing.
You pivoted and we've talked about this in past calls about from traditional sea based pricing to like the platform model.
Idea of providing a much broader suite and let's just get people using it and that will drive growth and as you said expansion just how is that resonating that playing out as we thought or is that still a process that's pretty early stage [noise].
[noise] depressed and we're very pleased with the way that so keeping their operating in the way that the motorways executing for us. So we have see some great traction with the enterprise accounts strategic accounts were seeing pricing certainly with the value that we bring being less of a challenge for us and I think net.
<unk> well placed back to the fact with the south place, we execute well we show the value for the business shoes, and we provide a return to the organizations I should we demonstrate the return to the organizations there's less pressure on this with regards to the coastal the pricing model that we have.
Gotcha, Thanks, taking my questions guys pushing threats.
Thank you discuss the question and answer session, Ladies and gentlemen, today's conference is now over thinking about participating you may now disconnect.
Thank you everybody.
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