Q4 2020 eGain Corp Earnings Call
Good day and welcome to the Egain fiscal 2024th quarter in full year financial results Conference call. Today's conference is being recorded.
At this time I would like to turn the conference over to Jim Byers of MK, Our Investor Relations. Please go ahead Sir.
Thank you operator, good afternoon, everyone welcome the games Cisco's, 2024th quarter and full year financial results Conference call.
On the call today are you gain Chief Executive Officer, Ashu, Roy and Chief Financial Officer, Eric Smith.
Before we begin I would like to remind everyone that during this conference call management will make certain forward looking statements, which convey management's expectations beliefs plans and objectives regarding future financial and operational performance.
Forward looking statements are generally preceded by words, such as the lead plan intend expect anticipate or similar expressions forward looking statements are protected by Safe Harbor provisions contained in the private Securities Litigation Reform Act of 1995.
These forward looking statements are subject to a wide range of risks and uncertainties that could cause actual results may differ materially respects information on various factors that could affect you gains results are detailed on the company's reports filed with the Securities and Exchange Commission.
Again as making these statements as it today September 2nd 2020.
And assumes no obligation to publicly update or revise any forward looking information in this conference call.
In addition to GAAP results, we will discuss certain non-GAAP financial measures such as non-GAAP operating income our earnings press release can be found on the news release link on the Investor Relations page and he games website.
You W.W. you gained dot com.
Tables included with the earnings press release include reconciliation of the historical non-GAAP financial measures measures to the most directly comparable GAAP financial measures.
And lastly, a replay of this conference call will also be available at the Investor Relations section of the games website.
Now with that said I'd like to turn call over to you games CEO Ashu Roy.
Thank you.
Hello, everyone.
We're pleased to report strong financial performance across the board.
I'll, just keep 2020 fourth quarter and full year.
In summary, our system Twentytwenty full year performance exceeded our guidance.
The top and bottom line results are ahead, though street consensus.
We also saw a healthy increase in bookings year over year, and we generated strong profits and record cash flow filters you.
That's been a good Europe business performance in addition.
We exited fourth quarter, Oh, that's good 2020 with our SaaS business revenue, which is.
Got it somewhere else shops revenue plus professional services.
SaaS business revenue is now looking over 90% off our bookings revenue for the fourth quarter.
As you all know we have targeted to get to this 90% plus level off the top business revenue.
December Twentytwenty corridor, which is two quarters somehow have.
We have reached a milestone.
Two quarters early which is good momentum.
Turning to the evolving business climate and the ongoing pandemic.
So far do you, especially new logos that slipped in March have since closed while some remain engaged.
Despite can business that you saw from customers looking to deflect more phone interactions to digital during the early months depending on me.
How does that since pulling back a little wouldn't even though.
As I mentioned during the last calls many of our clients.
Successfully how good.
Customer contact surgical solutions driving more digital self service.
Enabling their contracts tend to work force with our knowledge and solutions.
So when customers have also activator dollar virtual assistant for conversational automation did use pressured on the contractors.
These customers I've seen opt to 80% deflection and specific contract types, even as customer sentiment.
This is contrary to what we hear from the broader marketplace. As you. All may have seen we recently issued a press release, where we got sponsored a comprehensive consumer sounds great enrich chat box survived that last in customer satisfaction across all digital service options.
The reason, we believe is that our virtual assistant solution.
Smart and connected to the rest off the channels and two core knowledge and they are automatically solving customer issues.
Interest in our recently announced you getting messaging hub.
I wouldn't novel bring your own bought architecture has been strong.
We announced stopped so.
A couple of months ago.
So basically prospects are attracted to our unified approach that harmonize isn't connect.
Oh that multiple messaging channel divorce bought technologies multitude of Bakken systems in effect automating the engagement with common.
Proven.
Hi, knowledge and analytic capability.
Oh solution is unique and proven and just forgot.
Having said that.
Given the macro uncertainty brought about by the covert situation, we do anticipate some negative impact in the short term has investment decisions can be played.
Great that's keeping these placed under Nichols.
Looking at our business performance in the fourth quarter.
We saw healthy new bookings with a mixture of new logos on expansion.
Notable deals included a large government organization in the U.S., leading healthcare insurance in the U.S.
National Telecom.
In addition, we had several large renewals in the quarter.
Moving to U.S. Federal agency large PMT insurance in the U.S.
Hey, logical itself is buying.
So all in all balanced.
Good booking in one.
Well, I think love field and our partners.
At the beginning of this calendar year, we announced our OEM agreement with awhile.
This was followed by the announcement jungle availability of the probably to March.
Oh, we are on the go to market runway jointly executing our plan to train the a lot has failed.
That's work.
We also closed off we're dealing with a buyout right. After the until the fourth quarter was sold at the beginning of the current quarter, which is the first quarter.
Fiscal 21.
Oh really pipeline growth is encouraging.
So we expect our via partnership to favorably impact on topline interest from 21.
Speaking of partnerships.
We recently welcomed by Mike Taylor, and you're going along as our new head of business developments reporting for me.
Just on new channel partnerships and building out our developer ecosystem.
Mike brings a wealth of relevant experience. Most recently have told it's now what he built the partnerships with global service providers that size.
I'm excited to have like back on board so as he.
Tying is now for us to rapidly increase on markets each through complimentary partnerships, that's what he's focused on building up.
Looking ahead to fiscal 21.
We are quite bullish about our business. Despite the short on probably don't certainty.
Digital platform is increasingly before by enterprises looking for smart automation.
Automation is not just about digital connection with customers even go doctors they critical first step.
It's about smartly solving the problems she wants connector.
I was hoping we could do we as possible and finally, it's a bunch of rapidly optimizing the experience for all stakeholders.
Associates.
Business customers.
So we see that connecting solving optimizing.
All working together lead to.
Customer engagement automation.
I want us to research and the recent digital first customer service wave.
We are you getting number one in kind of product offerings partner in the recent critical capabilities report, we'd see gain as the number one digital plus knowledge management provider.
Much of what analysts consider vision for tomorrow, we're going to look back.
But now with strong business performance, consistent 20, and a healthy balance sheet, we have increasing on investment until that mark.
Our installed base of hundred 50 fast customers presents a significant opportunity girls so investing about.
On the new Labour from investing more in digital marketing and expanded partner support.
And finally, we are aggressively continuing to core our legacy customers to migrate them to be in club as quickly as possible.
The market's put out solutions is huge and horizontal.
This year, we will strategically focused on pretax customer acquisition.
But how partnering developer ecosystem.
And continued product innovation.
We believe that we can be the leading customer engagement automation company over the next three to five years, leading customer engagement automation company.
This is the goal we're committing to.
With that allosteric Smith, our chief financial officer to add more color and.
Financial operations.
Great. Thanks, so shoe and thanks, everybody for joining us today.
It's actually you know toots.
We're pleased to report strong financial performance across the board throughout fiscal twitchy, 24th quarter in food Yeah.
Let me start by sharing some financial highlights from the courtroom the full yeah.
We grew assessed revenue by.
So do you, 4% for the quarter and 27% for the year compared to the same period a year ago.
Oh assess and professional services revenue was says business.
It was 30% for the quarter and 22% for the yeah.
Oh says business comprised.
So she said she wants to sense with total revenue for the quarter.
And again two courses to hit the targets it fits sit at the beginning of the yet to achieve the 90% of revenue by the end of calendar Twentytwenty.
Oh says snicks retention rates for the for the year was up 114% up from 806% in fiscal 2019.
Oh GAAP net income was up significantly 300 and person.
At quarter end up 50% from the Oregon courtship.
Oh pretty catch the margins were 29% for the quarter and 19% for the yeah.
And what's the strong cash flow we ended.
Yeah, with 47 million in cash and no debt.
Looking at <unk> quarterly results in more detail first the revenue components such revenue was 15.5 million was 34%.
Cool.
34% year over year.
I can see revenue was 1.8 million down 50% from did you ever go.
Driven by the combined migration of our legacy customers to the cloud and the sunsetting of all the biggest seemed on cloud offering.
Professional services revenue was 1.7 billion for the quarter up 3% from Q4 last year.
Then accounted for 90% about total revenue in Q4.
Now looking at our non-GAAP gross profit some gross margins gross profit for the fourth quarter was 14.1 billion or gross margin of 74% up from a gross profit of 11.2 billion for gross margin of 67% year ago.
The 700 basis points improvement year over year reflects a combination of the benefits. We are starting to see if the scale inefficiencies around dark cloud operations and the growth in Ohio margins such revenue.
We.
<unk> gross margin was 81% in Q4 up from 72% in Q4 last year.
Professional services gross margin was 7% to Q4, although down from 15% from Q4 last year, which was up sequentially, where we had a negative margin in Q3 fiscal twin tea.
Now turning to operations non-GAAP operating costs for the fourth quarter came in at 11 million compared to 9.9 million into you ever go quarter.
Non-GAAP operating income in the fourth quarter was 3.1 billion.
<unk> operating margin of 16%.
Pit to an operating margin of 8% into your good quarter.
Looking at net income non-GAAP net income for the fourth quarter was 2.7 million or nine cents per share on the basic an eight cents per share on the diluted basis. This compares to non-GAAP net income.
659004, two cents per ship.
In the year ago quota.
GAAP net income for the fourth quarter was 2.2 billion or seven cents per share compared to GAAP net income of 166001 cents per share in the year ago quota.
Now looking at a financial results for fiscal Twentytwenty.
Just revenue was 56.8 million.
87% year over year.
28% in constant currency.
And to hit about guidance.
Oh sets business was 63.4 million, 22% year over year.
Comprised 87% to of total revenue.
Total revenue.
72.7 million up 8% year over year were 9% in constant currency also ahead of our guidance.
Legacy revenue was 9.3 billion down 39% from 15.2 billion in fiscal Twitchy 19.
And professional services revenue was 6.6 million nights right person to total revenue compared to 7.2 billion or 11% to total revenue did you ever go.
Now looking at all.
Non-GAAP gross profits in gross margins for fiscal Twentytwenty gross profit was 52.1 billion or gross margin of 72% compared to a gross profit for 46 million or gross margin of 68% you ever go.
Oh subscription gross margin improved to 79% compared to 76% for the prior year.
And professional services gross margin was 2% compared to 9% for the prior yet.
Now turning to operations non-GAAP operating costs for the fiscal <unk>.
Switching twitchy came in at 42.6 million.
7% from 38 million in the prior fiscal year.
Reflecting our increased investments in sales and product innovation.
Non-GAAP operating income improved to 9.5 million or an operating margin of 13% compared to 7.6 million for margin of 11% in the prior fiscal year.
Looking at a bottom line non-GAAP net income was 9.3 billion or 30 cents per share on the basic and 29 cents per share on a diluted basis.
This compares to non-GAAP net income.
6.2 billion.
For 22 cents per share when they basic and 21 cents per share on a diluted basis for fiscal 2019.
GAAP net income was 7.2 billion or 24 cents per share on the basic and 23 cents when it dilutes basis compared to GAAP net income of 4.2 billion well 15 cents per share on a basic and 14 cents per share when that dilutes basis for fiscal twitchy Nike.
Turning to our balance sheet and cash flows.
Total cash and cash equivalents.
As of June 30th Twentytwenty was 46.6 million compared to 31.9 billion at June 30th 29 team.
During the year, we generated record cash flow from operations of 14.1 billion, 800% increase from 7 billion in fiscal 2019.
And that translates into an operating cash flow margin of 19% up from 10% margin in fiscal 2019.
No one two out guidance given the investments we are continuing to make enough business to drive growth.
As well as the continued level of uncertainty around to cope with 19 pandemic and its impact on the current business environment. We are electing to only provide quarterly guidance for the time Big we'll revisit this as they get progress is.
Well the fiscal 2021 first quarter ended September so to Twentytwenty.
We expect service revenue of between 15.5 million to 16.
Million, which would represent between 25% to 29%.
Growth year over year.
That said professional services revenue of between 17 billion and 17.6 million, which would represent growth of between 21% in 25% year of yeah.
Total revenue of 18.6 million to 19.3 billion, which would represent growth between eight and 12% year over year.
GAAP net income of 1.1 billion to 2.1 billion was three cents to six cents per diluted share and non-GAAP net income of 1.6 million to two point sixmillion well five to eight cents per diluted share.
Assuming a diluted share count to 31.9 billion for this first fiscal quarter.
Before closing just a couple of Investor relations updates.
We will be participating into virtual investor conferences. Later this month next week will be participating in the D.A. Davidson soft when instead virtual conference on September nine.
We will also be participating in the Jefferies software virtual conference on September 15th we hope to see some of your virtually at these conferences.
This concludes our prepared remarks, operator, we'll now open the call for questions.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you were using a speakerphone. Please make sure. Your mute function is turned off to wind down your signal to reach our equipment.
Again press Star one to ask a question well pause for just a moment to allow everyone an opportunity to signal for questions.
Well take our first question from Ryan Macdonald with Needham and company.
Yes, good afternoon, Ashwin Erica thanks for taking my questions and congrats on a great quarter.
Sure I guess the first for you you know, we're obviously now getting into the final month or about the first quarter here well just wants to hear what you're you're hearing from sort of your customer conversations what you're seeing from a pipeline perspective.
As we look out for physical 21, and and I guess, you know maybe some of the moving parts that that make you cautious I guess still one on providing that for your outlook.
Yes sure thing around so what we are seeing is.
The engagement level in these.
Conversations and deal this is high.
People are working interacting closely oh progressing the opportunity.
The part that we want to make sure off and that's about the nervousness the bulk of habit, whether the decisions and the signature can be done in time.
Classically even in the South Florida, the enterprise, we all know.
Due to find toward the end Oh corporate mostly.
Lets say slip from one to the next so that's the part that we still kind of watching closely a other than about the engagement level is hot.
About that gives us a couple.
That's helpful and I guess as we've seen sort of this a shift in sort of work from home and adoption of alternative channels for sort of customer interaction can you talk about how that's been framing the conversations you're having with prospective customers around things like the messaging hub in their virtual assistant.
Yeah. So I think the park, which is the two credits which have.
Accelerated.
Yeah, no surprise, but it doesn't affect us positively in our business. One is just more digital back we are seeing that messaging how pool in that regard more more migration into digital more investment into digital and the second thing you're seeing is more.
Knowledge and guidance requirements idle for self service automation as well as for engine supports and the agent side, we're seeing an interesting thing where because of the dislocation on the workforce a lot of these agents are now working from home some from different offices and so they're not quite.
In a position where they can just ask their coworkers oh when they have a question. So access to knowledge system than Biden systems, we are seeing more interest because of that.
As well.
Excellent I just one last follow up for me you know you talked about for this fiscal year sort of strategic focus on customer acquisition and building out that partner developer ecosystem can you talk about sort of the magnitude you're expecting in terms of sort of sales head count additions there and then perhaps what types of partner as you're looking forward to add and <unk>.
We continue to build out that ecosystem. Thanks.
Sure.
So I mean that to areas, where we are investing on the partner side, one is existing partners, which all of those partner team members are part of Cogs organization, who runs our worldwide sales and so increasing.
Investment in that area and the secondary guys Mikes, which is the new area. When he's building out a team to begin with probably I would say three to four people and.
Yes, we're gonna be.
Targeting which we ought to be working on our some of the CRM and I might be.
Helpdesk ecosystem to see how we can get into complimentary partnerships and those areas. We have certified integrations, but the question is can be developed more.
Mutually.
Beneficial go to market strategies, and those partnerships and then the other areas and system integrators and global service providers. So those are the it is a clear looking to expand into outcome a partner standpoint.
Excellent Thanks, a lot.
Thank you.
Thank you we'll take our next question from Koji Ikeda with Oppenheimer.
Great. Thanks for taking my question Congrats on the nice quarter question on billings and deferred revenue.
Granted both metrics that a little bit all over the place over the past several quarters.
And maintenance revenue, but I noticed this quarter was particularly strong.
I guess what are some of the puts and takes there that we're driving the billings deferred revenue strains on is there any changes to contract durations or seasonality, we should be thinking about any true ups from previous custom really programs. These are any of that going on there is really just good execution in the fourth quarter.
Thanks, Scourging, Yeah I think.
Probably a combination of those items certainly there's the eye. The good execution I think the bookings were good but you know as we've stated on previous calls, but just sort of given the nature of our business and the timing of renewals and.
The sort of sold a relative lumpiness of the with the timing of the bigger deals occurring that.
This metric does tend to sort of move across.
As opposed to having some consistent movements. So obviously, we're pleased to see the up the positive movement this quarter, but.
Okay and.
I think it's.
Probably a combination of those factors is what's driving it.
Okay. Thanks, Eric maybe a follow up for you.
Just thinking about operating margin in the quarter. It really good operating margin. There I think it's the most you've had in a really long time definitely as far as our model goes back up but the guidance for the first first quarter implied it should be coming down a bit from where it ended up in the fiscal fourth quarter. So how should we be thinking about any incremental investments or upside.
I thought we saw the fourth quarter being reinvested into business and the first quarter.
And is there anything seasonal into first quarter in terms of expense side that we should be thinking about.
Eric you want to starts with an eye catching up to that.
No. It sounds good. Thanks, Aart you. So I think sort of one point worth noting that just from a seasonal timing standpoint is.
The.
No we do see.
It appears to be kick off the fiscal year, there's an element of finalizing the budgets and sort of looking into headcounts and so she can talk little bit to it but you know we actually as we've talked about you know plans ought to ramp.
Investment to gain more market share and so I think the execution around continuing to to bring those people on.
It's something that certainly plays into it I think from me.
Seasonal standpoint.
No, we well still I mean, not specifically seasonal but I think because the business, we still adjusting to.
The the new operations with.
You know we had scheduled to have on you know physical like events from a marketing side. So you know there was clearly money saved.
From those on premise events that Didnt happen I think no which would adjusting to though is increasing the digital spends and looking at other ways to increase that's been so yeah I think it's.
A matter of as we transition into this new way of doing business and increasing the headcount. So yeah. It was what you're looking to to drive that increased investment, but maybe actually can add a little more color to that.
Sure Yeah. So everything you said Medicare that's that's correct. So cushing from our standpoint, the headcount increased investments in the idea as we mentioned that is underway.
The marketing that Eric mentioned, yeah, he's right and the fourth quarter fiscal 2025, because we did not hold this big event. We do we do one in UK U.S. and wanting UK. So we did not do the one which normally gets done in the UK and the calendar Q2, so that's kind of save them money.
But but you'll see that digital marketing spend is gonna be up I've been overall, but marketing bucket.
Q1 fiscal beyond so so I think that overall dot net sales and marketing investments will be up in Q1, and then all in Q2 as well.
Got it thanks to the color appreciate it and one last one for me and I'll jump back into queue or so about 1.8 million legacy maintenance revenue I'm sitting here I guess, it's well ahead of the target for the end of calendar 2020, where do you see legacy maintenance revenues stable.
Lighting as we kind of thinking about the end of calendar 2020, and how should we be thinking about and you've run off from there in that legacy revenue legacy maintenance revenue line. Thanks for taking my question guys.
So I I'll go first care, just kinda give my fencing and I.
I think we haven't Keating, though and nail that down and on a public basis to say, where we wanted to be but I would I wouldn't like to see that percentage be in the 5% area by the end of fiscal 2020.
Back would be my.
My hope and that's what we are kind of gone into word but.
Eric do you have any targets in mind gifts point or.
Well I think just too just to clarify fiscal 21 boats as our shoes. So funny, one I'm sorry, yes, yes, so basically get from though yeah. I think yes sort of I think just to add to that to think though that weve.
Sort of caught post this milestone that we had sets I think we're continuing to be more aggressive in.
Encouraging.
Her many customers and and really looking at opportunities that we can to two drives him.
Overall I think in the early days.
When we began the the transition we were very sensitive and.
Working closely with customers more near terms, but as we get down to the final stages I think we can you move.
Aggressive in Oh approach towards.
Moving these final customers. So hopefully thrushes point, we can get that closer to that 5% cringe because you ended the fiscal 21.
Got it thanks, everyone. Thanks for taking my questions.
Thank you won't take our next question from Richard Baldry with Roth Capital Partners.
[noise]. Thanks, you know kind of getting back into the booking site again can you talk about the linear <unk> through the quarter, yeah with it up and deferred Rev up 10 million sequentially, which looks like a pretty strong number sort of curious how that played out through how was it pretty tough in the early months and then kind of picked up pace.
Or or was it more more linear than I would've expected me.
It was definitely more linear those courses goes so we definitely saw some.
Hi, good deals close earlier in the quarter as opposed to being completely back loaded which is more from the case.
And I think that need to add to that trust sorry, just one more thing. So it's it's not so much that that's the pattern in every quarter, but just the fact that we had been cooking some of these larger deal.
The fiscal year, and that's sort of resulted in the study.
Let me attitude that.
Got it comes at a point.
Okay. Yeah, then I mean building off of that how about you know aside from the first if the ideal you talked about to close early this quarter, maybe how and how's the trend continued <unk> early in a first quarter versus last quarter.
I would say that we are.
In the usual quarter pattern, which as you know you do get some business in the first half, but you get more business and the second half of the quarter.
That's how pipelines Q4 was an aberration and it correctly pointed that out.
So that's that's how we see it right now.
Okay and in in terms of absolute dollars the recurring cost to goods actually fell sequentially, while the revenues keep climbing there anything unusual in there are one time oriented in there.
Reversal or something or I can you talk about efficiency, but seeing the dollars call is not necessarily happen, we usually count on.
How do we think about that on a run rate maybe our go forward.
Eric you want to take that.
Sure. So I think that you know what we've.
He is I think the team is doing a good job in working with the the platform providers, so continuing to find ways.
To sort of drive that.
Average cost of.
Sets revenue down when it comes down to that direct cost and then I think Oh. So that's really was a big element I think we saw some renegotiation of some contracts will be swore pick up.
There may have been some.
Catch up in the previous quarter, but that's.
Contributed to the decline but.
It wasn't as if there was anything out of line in this particular quarter that drove the lower number.
I think the combination of those two factors your rich one is the continuing automation and efficiency gains and so as you know since our architecture of the new cloud that we have had lost definitely or is it uses.
Yeah, I do I tend to show that the infrastructure to the service. So we keep optimizing back in terms of how we use those resources. That's the first one and that efficiency came kind of helps us and the second one I do think that there were some catch up items that just end of your in terms of contract negotiations, which helped as well.
[noise] it last to be you know it if you have sort of a general view that cloud based communication is going to pick up in demand side, especially as People's ban what sort of figures from the earliest headwinds from coal that.
How do you feel about sort of your direct sale head count.
And this transition to virtual selling are they the capacity.
She sees you've got so far I'm like can you keep up to it if the demand side accelerates like a lot of people think thanks.
And so good question, maybe we are expanding our direct sales.
<unk>.
So it's an overlay models so.
Model from enterprise sales team.
Hardly a field element that right now it's all virtual as you said.
It does any oddity and that kind of domain expertise, we certainly see as the price.
So here, we are increasing our investment in that area.
Whether we have the capacity to fulfill.
I think we're hiring a quite aggressively so we believe we will have the capacity, but how we'll see how things have all that as we get more and more demand generally could both from direct to and from our.
Partners.
Thanks.
Okay. Thank you we'll take our next question from Jeff Van Rhee with Craig Hallum.
Great. Thanks for taking my questions. A few for me I think just just going back I think when we started definitely 20. The the original modeling outlook was 30 or 30 to Incent them 24 to 26 and R&D.
As you look it up like 21, I realize you don't want to get into the annulus gives you more concerned on the revenue flow, but conceptually kinda that degression to get you ended those ranges is that mindset any cheap you changed at all I can I realize cobiz cheech seems a bit on the revenue.
But if that beats here is that seeking still intact.
Oh, Yeah, absolutely I think if anything just given the way the bulk of is accelerating to us.
Yeah, we're looking at Uh huh.
Obviously prudently doing so but continuing to ramp that spend.
To really capitalize on the opportunities so I.
I think.
Kevin.
The strong cash flow and the balance sheet position that puts us in that I think that that's just gives us for the confidence in.
And working towards I think that's invest those investments.
So let's take those ranges wouldn't be off the table almost the same if the market bears out where you think it is.
That's right.
Okay from a from a usage or realized models not primarily usage based model certainly saw spikes in surges in a lot of different kinds of different digital channels in consumptions to be clear any.
Notable Ah Ah revenue impact from usage related streams.
Well there was I think.
You know definitely not as much as the previous quarter, but.
No. It's it's an area that.
We we obviously still seeing the uptick from many of <unk>.
Customers that.
So a spike in their own interactions in the.
More so in the early part of the quarter. So you know there was.
Has the exact amount, but you know there was definitely an element of.
Overage seasonality, if you will driven by the.
The environment. So that's that's I would say sort of tapered off some though.
Got it and then along the lines of the pipeline. It at this point, if you kind of dissect that pipeline a little more precisely what's changed with respect to to two aspects new versus existing and type prospects and then also that the use cases, you're seeing really drive to fight.
Oh this is actually going to just say yet to come it's one is.
We're seeing more in our pipeline over the last two three to four months I'm more new logos in the pipeline Ah. So that's a that's a welcome change.
On a lot of quick that's driven by the new partner channel, which was good.
In the second piece around.
Whether we are seeing particular areas of demand like I said, one as the messaging aereo messaging on virtual assistant sort of go hand in hand.
Small around digital connectivity and automation and self service, so we see that because one bucket.
And that's continues to be strong and the second area, we see increased and sustained demand out his knowledge and they are you can contact centers. So aegion facing knowledge, a we're seeing more sustained.
Increase.
On the incoming interest on that.
Sounds good appreciate it.
Sure.
Thank you we'll take our next question from Mark Schappel with benchmark.
Hi, Thank you for taking my question and congratulations on the corner building on earlier question with respect to your sales capacity could you just discuss your plans for adding new quota carriers. During this coming fiscal year, what we can expect as far as numbers.
So we haven't quite a talked about the numbers in terms of headcount, but what we are and we are.
During the so he can share with you at which has as a percentage of high revenue, we are kind of dropping our sales and marketing investment to the 35% level, whether we get there.
In six months or we get that in 12 months, that's something we'll have to monitor quarterly because of that nature of where we are on the economy, but that's kind of where we want to take it to are subject to obviously, bringing the cohorts and making sure. The they are being able to deliver too early.
Milestones.
Great and then I should <unk> with respect to the a volume partner deals signed early in fiscal once you I was wondering if you could just give a few details about how that a that deal kind of developing came together.
Sure. So if it happens to be a large large BPL climbed to provider.
They had been a trying out some other solutions.
And once the.
Oh vial branded solution, which as you get solution, but a lot of wrong that we yeah.
I was.
Was launched.
You know the general available to people that March we closed the deal in mid July so not a very long sales cycle that happened to just be dopes situation, where they needed to get into some client off there's where they needed to deliver digital capabilities. So it wasn't really a competitive.
[noise] environment.
[laughter] to us it so it's a stark oh, what you're seeing is there's a lot of pent up demand in the via installed base, particularly around the elite customers you know.
Yes.
[laughter] via while does that ER.
Ah challenges it on the Allied our customer base in terms of other new wage competitors, but there was also a lot of.
Ah reliability I'm confident somebody about installed base to look at Hawaii solutions, if they could make sense. So we feel like it's a it's a good.
It between our solution and it can get deployed extremely quickly because it's a cloud based solution, which is what we have done so for this plant or they just going like imminently now.
So you're talking about six me.
Deployment cycles. So all in all looking encouraging and based on that small or lead deals because it's a large BP or we do expect I couldn't be more expansion.
Great. Thank you.
Thank you. That's a final reminder, if you would like to ask a question. Please press star one now.
At this time I show no questions in queue I'd like to turn it back to Egain management for closing remarks.
Great well, thanks, everybody I appreciate you, taking the time to listen to and we look forward to updating you.
When we put out of Q1 results and again hopefully.
Hey, good books, you into checked with so some of you at the upcoming virtual though.
Investor events, which were at a later this month. Thank you.
This concludes todays call. Thank you for your participation you may now disconnect.
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