Q2 2021 Domo Inc Earnings Call
[music].
Fiscal year 2021 earnings conference call.
I'm all participants are in listen only mode. After the speakers presentation they'll be a question answer session to asked a question drug, especially the press star one on your telephone if you require further assistance. Please first starts and zero and with that I'll hand, the call over to Peter Lowry doubles, Vice President Investor Relations.
Good afternoon, and welcome on the call today, we have Josh games, our founder and CEO resell, our CFO and Julie <unk>, Our Chief Communications Officer.
Surely will lead off with our Safe Harbor statement and then on the call Julie.
Thanks Pete.
Press release was issued after the close of market posted in the Investor Relations section of our website, where this call is also being webcast statements made on this call include forward looking statements related to our business under federal Securities laws, including statements about financial projection the plans and expectations for our go to market strategy, our expectations for our sales.
The new business initiatives, the impact of Cobot 19 on our business and our financial condition.
These statements are subject to a variety of risks uncertainties assumptions.
For a discussion of these risks and uncertainties. Please refer to documents we filed with the FCC in particular today's press release, our 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 to differ materially and that's contained in our forward looking statements. In addition, during today's call. We will discuss non-GAAP financial measures, which we believe are useful supplemental measures up don't must performance.
Then revenue unless otherwise stated we will be discussing our results of operations on a non-GAAP basis.
These non-GAAP measures should be considered in addition to witness not and not as a substitute for or in isolation from GAAP results. Please refer to the tables in our earnings press release for a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measure with that let me hand, it over to Josh Josh.
Thank you Julie Hello, everyone. Thanks for joining the call.
Let me start off by saying I Hope all of you and your loved ones are healthy and safe in what continues to be a challenging environment.
I remain incredibly proud of our team has adopted.
And the Greek care, they continue to show or customers.
Obama was made for this new world of work, we're business agility is imperative to surviving and thriving.
In Q2.
We posted 23% billings grew.
27% subscription revenue growth, 23% total revenue growth and better than expected cash flow.
I'm very pleased with our Q2 results in our consistently strong execution against our plan.
Thank you really given the current backdrop.
Since our IPO, we have been relentlessly focused on growing our business while at the same time, making our growth more efficient and driving to cash flow breakeven with the cash we haven't or balance sheet.
In Q2, we once again continued to make great progress on this front.
As we have committed time and time again to you since the IPO.
Now I'm very proud and very excited to say that at this point.
Achieving cash flow breakeven is at our discretion.
So on the call today I'm going to focus on a few items.
One how dumb was position in the future of work, which is being re imagined based on the current pandemic.
Two how domain was hoping companies with the related digital transformation initiatives and transforming data into more value for businesses their partners and customers.
Three I'll talk about Q2 highlights, including exciting new business across a variety of industries and geographies exciting new partners.
And how that demonstrates our domain was extremely well positioned for current market trends.
I will touch on some recent industry recognition.
There's been significant attention to the future of work and what that means for organizations companies across the border being forced to reimagine, how they do business and how the empowered and more efficient and often distributed workforce to can operate in a more digital and agile fashion.
Prior to coated many companies had started digital transformation initiatives.
And the current environment is only accelerate in the timeline for these critical projects.
Oh business processes and legacy technologies, just aren't sustainable and companies are being forced to adapt much more quickly than most and plant.
If you recall, we founded don't want to be a different kind of company to solve the challenges of running a modern business through better leverage of all have been organizations data anywhere on any device.
We are a different kind of company and we've always had a great product. They pandemic is highlighting some of our platforms most important strings.
Particularly in building intelligent data ecosystems that improve internal data utilization and grow the value of data externally.
Our problem was designed to solve the complex strategic data challenges that are holding companies digital transformation initiatives back did challenges the traditional tools just were not able to solve.
On the backend we hope some of the world's largest companies solve one of the most common yet complex and time consuming barriers to digital transformation that is breaking down data silos to make data usable regardless of where it lives even that 80% of enterprise data that isn't being used because.
Was connected to it is so difficult.
We hope company has transformed to start data into more value for their business more value for their partners and more value for their customers.
No. The front end Domo empowers every line of business to make more agile well informed decisions through well governed self service B. I and analytics delivered into the hands. The business users at every level in departments, such as marketing finance sales and operations.
Our cloud based mobile first design makes life data accessible to anyone.
Anywhere.
Create truly data driven organizations at a speed that our customers tell us they've never seen.
They are using the embedded in extended analytics of what we call domain everywhere. Many of our large customers are confidently extending the value of their data with internal and external partners.
With the platforms underpinnings of data governance security and advanced analytics in a cloud based environment.
They are collaborating with external stakeholders, and making fast and even automated decisions around the data, creating new business value and new revenue streams.
All in an easy to use mobile interface.
Through intelligent applications built on the dual platform in a low code no code environment.
Customers are modernizing business processes that unbelievable speed, leveraging artificial intelligence and automate automating workflows.
The speed at which applications can be developed and deployed.
Is truly a competitive differentiator that helps us when deals and is definitely working this new environment.
Last quarter over a matter of days.
We built a series of applications to help state governments manage the cobot crisis.
Feedback continues to be very positive from these customers and in fact this quarter Weve already extend your contract with the state of Iowa State of Iowa buy cheap by two years.
And at the same time significantly expanded the contract as well.
In June following on the crisis Command Center solution, we launched or get back to work collection of applications.
Did you have locations reinforce our ability to quickly leveraged any data source to initiate new workflows in response to rapidly changing environments.
If this agility and ability to scale in parch that is helping us win deals and positions us well for the future work, because we're able to move at a pace and scale that other technology stacks just cannot.
So no we talk about some of the significant recent wins, we've had across a variety of industries and geographies.
These deals are exciting because the highlight that the market is now skating to where tomo has always been headed and they're not just opportunistic deals that were bending into.
This quarter, we want to significant expansion.
With a global manufacturer that had been using don't offer a fairly traditional b. I use case.
The initially chose Docomo few years ago based on our ability to better meet their internal analytics requirements compared to a variety of traditional vendors.
This recent expansion was for our unique offering for distributing data outside of the organization. Our extended analytic solution called done, we'll publish which is a part of doing everywhere.
Like most large organizations this customer had several b. I tools in used throughout the organization.
As the normal situation for Docomo, but docomo was selected on the recommendation of the company's CIO and CTO and our superior ability to scale self service capabilities are interoperable interoperability with existing technologies, our governance and our cloud based architecture.
We're also seeing significant international wins as well.
For a fortune global 500 retail conglomerates.
Early in this quarter early in Q3.
We had a seven figure per year upsell that we won based on our outperformance in speed and scale.
Don't was chosen to help the organization get massive volumes of data out of its existing systems without replacing or re architecting down.
So that business decision makers could understand critical time sensitive business metrics.
One of the key factors in our selection was not just accessing data brought but our ability to provide data governance at scale.
Our ability to provide new apps at scale.
And again like most large organizations this customer has multiple daily technologies in years.
But none of them were built to perform it cloud scale and in record time Mcdonnell.
We beat out well entrenched competitors and all the usual suspects had contracts there before we won the business.
It's also worth noting that this deal was one with notable support from one of our major consultant partners.
Now among new international business for the quarter. We also won an annual six figure new logo deal with a global pharmaceutical company based in Germany.
An annual six figure new over deal with a leading integrator based in Japan.
And.
Our multi multi year annual six figure expansion deal with a real services operator based in Australia.
And demonstrating the need for Docomo in any environment, we signed significant new customers in what would be considered distressed industries. For example, we closed an annual six figure new logo deal with a fitness chain operator to migrate their legacy B. I system to the cloud with don't was more modern scalable and easier to use platform.
Almost bringing together internal metrics as well as external data to help the customer determine when it makes sense to reopen their facilities in different markets.
Now we also signed a six figure new logo.
Deal with a manufacturer that had closed all their stores as a result of the pandemic and is leveraging don't want to optimize the pricing strategy further online business model.
We also recently closed an expansion deal with a cruise line operator to improve their real time marketing analytics as they try to figure out how to try and their marketing campaigns in this new world.
We're also chopping partners to expand in new markets in the U.S. Federal space for instance, we leveraged a partner relationship to close early in Q3.
An almost seven figure annual contract to power a public facing website that gives taxpayers the ability to see unexplored data related to pandemic funding grants.
We believe this relationship has great potential to open doors to additional opportunities.
He loves seeing the progress with our partners in several of these very large deals.
So now let me talk about some of our recent rins industry recognition.
And continues reset this received accolades that reflect our commitment to product innovation customer success and our corporate culture.
Most recently domain was named in overall leader in the Dresdner Advisory services 2020 industry Excellence awards for the fourth consecutive year.
Recognition was based on consistently high customer ratings and confidence in product quality value delivered and sales and service.
Additionally, constellation research recognize docomo on its 2020 short list for Beinn analytic solutions.
And we were also recognize for our commitment to building a diverse inclusive and welcoming workplace.
Parity Dot award named US the 2020 parity doesn't work best companies for women to advance list.
And with diversity being more than gender.
He became a founding member of a new parity pledge to help us increase racial diversity across our entire organization.
It feels good to report there we're seeing results.
As of July 1st 45% of all open positions of which we've had north of 20.
I have been filled by qualified women and underrepresented underrepresented in minority candidates. This progress has been made possible by our company wide commitment to expand our networks to create a more diverse slate of qualified talent.
In closing, we've made tremendous strides in improving our operations.
Across all aspects of the business.
To become much more efficient and to improve our go to market motion.
We have better sales leadership and sales operation rigor than we've ever had.
We brought our cash burn for more than $36 million a quarter two years ago.
What is becoming very close to cash flow breakeven.
We are running sales plays that are working including good traction with the technical audiences of ITC MBI.
We have an ability to tell Adidas story for CIO shows in cheap data officers that puts them in a position of transformation agent, while leveraging and not needing to replace their existing in back and investments.
We have wonderful Referenceable large enterprise customers with 19, now paying us more than a million dollars a year.
We have a very very bright future.
And we're doing this in the middle of a pandemic.
It has increased our focus accelerated both our innovation and that of our customers and proved that our value.
And proved that our value proposition.
We have great customers, who were standardizing on us and loving us.
And I'd like to reiterate how proud I am of our employees, who continue to excel in execution and helping our customer our customers operate most effectively in this new environment.
So with that I'll now turn it over to the Bruce Bruce.
Thank you, Josh we had a strong Q2.
Urging the look back on the path fourth quarter and see the momentum driven by steady execution.
The macro environment is driving the need for digitizing business process.
And specifically the need for real time data and analytics.
And a portion of IP budget allocated the modernizing.
Function is increasing.
We believe we are benefiting from this trend as we offer a modern.
Bob.
Yes, and multiple solutia.
And we also believe me well continue beyond the pandemic.
I'll now review the details behind our performance followed by providing third quarter fiscal 2021 full year guidance.
Our Q2 billings of 47.6 million a year over year increase of over 23% was driven by wins across a number of industry.
An expansion with the state of Iowa.
Renewal rate.
Hey, consistent execution across the business.
Particularly in our enterprise customer base.
Our renewal rate.
Yeah.
The next point better than last quarter.
Our net retention rates remained above 100%.
We have 60% of our customers under multi year contract at the end of Q2.
Our remaining performance obligation.
Our our PEO grew 16% compared the same quarter last year.
Q2 revenue was 51.1 million a year over year increase of 23%.
Subscription revenue grew 27% year over year and represented 87% of total revenue.
Celebrating from 23% growth in the first quarter.
Reflecting our focus on specifically growing new recurring revenue and improving our retention rate.
International revenue in the quarter represented 24% of total revenue.
Q1.
Our subscription gross margin was about 80% or the first time.
More than five percentage points from 75% Q2 up last year.
This is a very important milestones.
And a goal that was that many years ago, because we believe it is one of the key driver for long term profitability.
We are optimistic we can drive our subscription margin even higher overtime as we continue to find leverage point in our data center operation.
In Q2 operating expenses decreased by 10% from last year, even though revenue increased by 23%.
In fact, our subscription revenue per head.
Has grown in excess.
40% over Q2 of last year.
The net effect of increased revenue.
On managing costs.
Allowed us to improve our operating margin by 41 percentage point from the same quarter last year.
Our net loss.
Net loss was 10.7 million.
And our net loss per share what 37 cents.
This is based on 29 million weighted average shares outstanding.
Basic and diluted.
Since our IPO, we have been disappointed about managing our costs.
While building a base of recurring revenue.
To make.
Progress toward achieving a cash flow positive.
Earlier this year because the co bid like many other companies.
We prepared for a significant decrease in our new business.
But as our Q1 Q2 results show that decrease has not materialized.
In fact.
Pretty much on track to our original topline plan.
As result of our cost discipline.
Our strong topline growth.
Secularly and recurring revenue.
We have reduced our net cash used in operations from 18.7 million in Q2 fiscal Courtney.
4.8 million in Q2.
Fiscal 21.
74% reduction compared to Q2 of last year.
And then recruitment of 4.5 million over last quarter.
We also recently that the maturity of our existing debt with Blackrock to April 2025 from October 2022.
They are substantially the same term as our existing agreement.
Net cash flow outperformance.
Coupled with over 180 million.
Our our.
That's right that term.
Not only significantly reduce our risk profile.
But now provide additional financial degrees of freedom.
The progress we have made over the last few quarters demonstrates why we believe.
We're on track become cash flow positive.
Turning now to our balance sheet as of July 31, we had cash cash equivalents and short term investment of approximately 83 million.
That's it that's got sold we expect in Q3 and all year.
For Q3, we are modeling.
Of about 48.5 million.
If you recall in Q3 of last year.
We had billing outperformance driven by large enterprise transaction with standard billings terms.
We have assume.
And our model this will not repeat itself for the Q3.
Specifically, we are not modeling the same number large deal we closed last year.
And at the same time.
Because of the economic environment, we are assuming more non annual and advanced billing terms.
Relative to last year for the deals we do quote.
However.
Even against those assumptions.
At this point in time.
Expect experienced year over year growth a vote.
Track that annual recurring revenue.
Our.
And year over year growth Yep subscription revenue.
Oh that lead 20%.
In Q3.
That expectation is supported by the observation.
We are off to a good start in Q3.
Our outperformance in the first half of the year.
Rouse us to increase our billing outlook for the year.
Q2 hundred and 8 million.
From 197 million.
Last quarter.
And from an initial outlook of about 190 million.
Based on our Kobin 19 downside case.
That we used for reducing costs.
Our expense on expenses were planning on our Q3 operating expenses to increase modestly from Q2 level.
We expect Q3 adjusted net cash used in operations of approximately 4.5 million.
And expect full year adjusted net cash used in operations of approximately 23 million.
Now to formal guidance.
Third quarter fiscal year 21.
We expect GAAP revenue to be in the range.
51.2 million to 52.2 million.
We expect non-GAAP net loss per share basic and diluted.
42 cents.
46 cents.
This assumes 49.6 million weighted average shares outstanding.
Basic and diluted.
For the full year of physical 21, we expect got revenue to be in the range of.
202.5 million.
Do.
206.5 million.
Representing year over year growth.
17% to 19%.
We expect non-GAAP net loss per share.
Basic and diluted.
$1.83 to $1.91.
This assumes 29.3 million weighted average shares outstanding basic and diluted.
In closing, we're pleased with our execution to Q2.
We're optimistic about the underlying trends in the business.
As we head into the second half of the year.
With that well open up the call for questions.
Operator.
Thank you as a reminder to ask a question you'll need to press Star then one on your Touchstone telephone to withdraw your question from the Q. Please press the pound key.
Please standby will be compiled the Q in a roster.
Our first question comes on subject Sanjit Singh with Morgan Stanley. Your line is now open.
Thank you for taking the questions. It congrats the team on on a on a really strong.
She to set of results.
Maybe start with your Bruce.
Yes. It was just phenomenal performance across the board.
So our congrats on the guidance assumptions Bruce can you just you know you've been using a pretty consistent framework for the bouts of for most of this year.
Bedded within your second half guidance, how are you thinking about new business trajectory you. This this performance both in Q3 in Q4, it sounds like we're up against a difficult comp.
Going into next quarter, but at the same time it sounds like we just got off to a good start so just sort of walk through your framework, an update that framework for us that'd be helpful.
Sure and plan to kind of providing guidance, we give or take all the information we have.
And.
A lot of it a lot of it is pipeline review.
Forecast.
Our pacing.
And then we compare it to everything that happened at the same time the prior year.
And the day, the big Big item that pointed out last year was just the volume at the large deal.
And we do have large deals in the pipeline.
You know have as we've mentioned time and time again, maybe.
Like Devry Enterprise software company getting the timing of those right isn't very difficult.
Fanned out how hard that was in Q2 of last year.
So we're just we're just the filming.
We will have the same level success at least in terms of providing guidance. Our hope however, as you might imagine.
Just to see if we can get some of those deals to close.
But we are optimistic as we sit here Nevertheless on the fact that.
We're trending really well.
In Q3, so the first month of the quarter was just a very strong month.
So we're very happy about that and we don't by telling you that but at the end of the day, it's what happens at the very ended the quarter on a large deals and so we're just saying I think reasonably cautious Andy and quite open about.
Our thinking about.
The number and of course, yeah, we hope we get.
Large deals to close but we just don't want to guide to it.
Sit here today, so thats the thinking behind guidance.
Super helpful, Bruce and it's Josh for you.
Think about like where your unit economics are today, certainly improving more resilient, 85% retention rates and then net retention rates above 100.
You've done a lot of things on the Salesforce, you're talking about tilting more efficient what do you see the opportunity to get those gross retentions up to sort of.
That's right up to 90% and then maybe expansion rate that starts to improve with a better economy and continued efficiency on the place but on the field playbook. So that we're looking at a net expansion rate of 110 plus.
No stuff you get the timing right on that but how are you speaking about driving to the dose level metrics.
Good.
Yes, I think a great question.
I think we're closer to 90 than we already 85.
I came or the exact words, we put in there, but I think intimated that and we've seen within enterprise above 90 and.
I think we can get I think we can get enterprise 90 to 95 is not.
Business 90 to 95, but right now we feel like we're getting pretty close to 90 and that's it really help you spot to be.
So that's our first goal and.
We're really starting to.
Focus on all the things that we can do to make sure that we're retaining those customers.
The other thing that we're seeing is.
In terms of that.
Net retention, we're seeing bigger and bigger upsells. So we're more prepared than ever in terms of the way that we can talk that chief data officer is and the way that we can shop talk to chief information officers in getting you really big extensions at the enterprise and strategic level. So I think that's going to be something that's going to continue to do.
Drive an accelerator business forward.
I appreciate it just thanks.
Thank you and our next question comes from Brad Zelnick with Credit Suisse. Your line is now open.
Awesome. Thank you so much guys.
And congrats these really are fantastic results and congrats to you on the call, but that's the whole domo team because I know it takes takes a lot of folks to make this all happened to make the magic come together. Thank you.
No, but here so thanks for the shadow.
For sure and that's where I started but maybe forgive me for a question that reflects a little bit and the rear view mirror.
You made a comment Josh about feeling good about the go to market and the leadership at you now have there can you just remind us of the changes in the sales process from 12 or 18 months ago, and why you have the confidence that you've now got it right and that we shouldn't come back in a quarter or two and I'd be disappointed from an execution perspective.
Yes for sure and I'll have but you can jump in here as well we've got him on the line He's our chief revenue officer about Oh off I think.
I think a couple of things.
For one.
You know it must I'd like to to be about one person bring one person and everything magically improves.
Not the case you can bring one person in and have everything.
Had much better execution much better leadership much better strategy, but the other thing that we have going for us is kind of Lisa you called that everybody.
And there has been for a long time now.
We've been working on this platform, we've been working with customers, we've been retaining customers and we now have a bunch of referenceable customers and we called out one on the call today, one of the largest retailers in the world I'm, sorry largest apparel retailers in the world.
And they are you know every single person under the Sun within their had contracts.
And we beat them all out and it was a long protracted.
Everyone would you NPL sees or had contracts.
And.
No we had two.
We had Ceos the biggest tech companies.
In the world, calling in trying to save their business.
And our team our product our platform just continued to show will that that weekend at scale.
In a mobile environment in a cobot environment.
Really help the largest smartest companies in the world get data in way, they've never been able to see it before and help to manage the business in ways that never been able to be before in when you know timing is so critical.
So.
That's one thing that we really have going for us so I feel like.
We're going to do well, it's going to be up into the right no matter what.
It then it's just a question of how long does that take and how many bumps in the roll out there along the way and that's where having the chance the seating in over there running Europe.
And.
He hasn't been a he had been a global CRM before but he circles, where he lived really but it's certainly been handling of business and handle these customers and helping them along the way and helping expand contracts and so we felt like this might not be the obvious pick when you sit there and look at resumes, but when you look at resumes and then look at performance and look at performance.
Here doing what we do it was a no brainer and so we're really excited SDN and we've been even more excited since he has been running that team and excited to have NB partner with John So I'll, let you can take a few minutes and and to answer your question.
Great. Thanks, Josh appreciate that unlike right. So I think I think there's a couple of things that we continue to focus so and we do everything that we do around really driving customer body and Nike show that our customers really see how we can have the might decision he drunk business whether that be.
She before and the customers more than capable of doing that so it's really being a couple of things we just refocused on.
Outside be law, and we would have the teams in so I think John Miller myself and the coach market sellers plays are resonating well with the Gen is working well Mark I understand more and more who we are in their body that we can bring and then we've just underpinned that of course alluded organizations, we've really strong operational rigor.
And cadence that drives a behavior and we just feel comfortable about where we are and how we're looking forward.
Thank you for that he and I really appreciate it maybe if I may just follow up with another one for you Josh Josh.
Your visionary by just about any definition I think most of US agree you know your your your view of what the world needed and what you built with Docomo you were very early.
But if we fast forward to today you know there are other cloud data analytics platforms out there.
One which comes to mind, which I think is on file for you know for public offering, but but to what extent are they competing or you guys competing with these other platforms versus complementing because I think I remembered at one point talking about opportunities, where you might actually be the mobile front end too.
Another data warehousing type solution or data pipeline.
These other companies out there are competitors or even possible partners for you.
Yes, I guess, probably view more as possible partners I mean.
You know when you look at.
And again I'll use the.
Several million dollars deal that we just closed with one of the largest reach or one of our apparel retailers in the world.
You look at them.
And.
They didnt rip out everything else everything else had its place, but in terms of true digital transformation and the ability for.
The executives to get data way that they needed to ceded to build apps on top of that data.
To accomplish other tasks they havent had their organization to take processes that today.
May take hundreds of hours to put together in our manual processes and slow.
If you want to automate those processes and automate your ability to compete and make it much faster well then you have to have all of that data in one place you need to be able to connect to all the different systems that you have and then you need to be able to have that data available in real time, no matter how large scale is.
There's just no one else it does that like us Powerbuoy I falls down Tablo fall down first.
So I sense is good for tiny company.
But you know in terms mean click is you know old.
So it really comes down to how are you going to play with the snowflakes of the world and how are you going to help people their strategy, but how they're throwing their data ADW asked and how are you going to help them they've got a little group that has 18 people that love using tableau were like great keep using tableau.
A little bit of visualization for those folks, but if you want truly a platform that brings all your data together to allow you to be nimble as a large organization. There's just nothing like Docomo and you know visionary.
I get it backhanded compliment.
But I get all the time.
I think over time, you know if we'd been up into the right. The whole time that I wouldn't take it was backend.
That's okay overtime it will prove out and you know would have been easier. It would just said hey, let's just make something that a little bit better than tablo, but you're you're kind of right. We didn't want to do that we wanted to be a little visionary. We wanted to say here's what the world need and has taken a while for it to prove out.
But we are relentless in our.
Willingness to continue to be diligent and work hard and we see what's happening with our biggest customers and if you want to figure out where the world going go look at our biggest customers and how they use our products. There's nothing else that comes close to what we're doing because we we put so much into the platform and I think it finally, starting to play out and cobot might accelerate that.
Thank you for that Josh if somebody wants shared with me know tree gross straight to Heaven and.
I think this is definitely of any of the quarters you guys have printed since your public company. This is a proof point of moving into right direction and doing really well. So congrats to you in the team once again, thanks for taking my questions.
Thanks, Brad Mike Mike My favorite New thing Thank you.
Thank you and next question comes from Jennifer Lowe with TBS. Your line is now open.
Great. Thank you.
I wanted to touch on sales productivity and I think back a couple years ago that was an area of focus I think gosh. It embry here about sort of dissatisfied with where that was relative to your experiences in other organizations and then she benchmarks clearly the efficiency the business improved pretty significantly that since then so I'm just curious.
Where do you how do you feel about the level of productivity you're seeing in the sales force at this point and.
How much more do you think you can get out existing footprint.
Yeah, Hi, Jennifer Yes. It was it was super strong this quarter.
In mind it at a record.
It.
Did get through at level overall that we thought that we think is.
In the ballpark of what should be expected from an enterprise sales force.
Particularly on the enterprise side, so we're very happy with that.
We at this point.
The at this point, we're focused on well continuing to.
In truth that because there are parts of the business that.
At least relative the benchmarks, we think we can do better.
But at the same time are all right.
Right headcount down over year over year.
So we wanted to continue to build out the private activity, but we're also we also had hiring mode right now.
So even over the last few weeks, we've really stepped it up.
We feel good about the results we feel good about where we are in the market the kind of transactions were getting down.
Some incredible brands are.
Really so unique that we really do want to make sure we.
Going under cover the opportunity here, we're very worried about it at the beginning of years Cobot head. We just didnt know, how it's going to play out but now that we've had a couple of quarters.
Success, and then you know again Q3 off to a very good start we really want to start building up the salesforce again so.
Do both and hopefully the.
Combined effect at least over the long running will be very good for growth for Elmo.
And maybe just expanding on that point.
I think Josh in your prepared remarks, he used the word discretion.
Timing of free cash flow profitability at this point and Bruce you kind of pointed out all the improvements that you've had so far around the margin front relative to to the revenue growth and and you mentioned three the push out of the debt timeline, giving you a bit more flexibility.
I read between the lines. There is the message that we should come away with that you feel pretty good about where you are currently in the level of burn and we shouldn't expect that trajectory of improvement that we seem to continue as we head into next year given.
Given the productivity gains you've seen and all the opportunity in the pipeline. Currently is that is at the right way to sort of contextualize, what we see today relative to what seems like a good opportunity to maybe inched up a little bit more on the spending again.
Yes, the wed think about it is.
We wanted to get to zero as quickly as possible when we went public.
We saw circle Q3, I was hoping that we'd be able to get to cash flow positive in Q3.
We gave the guidance that we gave because that's the appropriate guidance to give but certainly it's been a goal for long time to to be able to be cash flow positive in Q3 and once we're there were standard so we're not gonna for something we can't maintain.
And I think we've got a really good track record now since we've been public bringing down the cash burn every single quarter. It it sequentially come down and.
Same thing going forward, we want to get to zero as quickly as possible.
And keep it there and it might inch up positive slowly because.
We'll be looking for opportunities.
To invest assuming that we're getting the productivity gains that we that weve.
Been getting that we can maintain those and slightly improve those and we'd be in a really happy place that we want to be able to invest going forward. We're not looking at drop in as much cash at the bottom line as we have been sequentially improvements.
But want to get it to zeros quit Mccann and then and then keep it there and and then find ways to really start playing offense and like Bruce that maintain that productivity and then also increased the number of head that are producing.
Great. Thank you.
Thank you our next question cousin, Derrick Wood with Cowen Your line is now open.
Thanks, and I'll Echo my congratulations really impressive to see.
20% plus growth and billions in this environment no doubt.
Thanks.
Sure. So Josh you mentioned the state of Iowa expansion, and obviously you've touched on for state antigen. Yes. It's interesting that they are signing up for a multiyear agreement and it goes to show that they want to work with delo not just in the near term, but really in a much longer fashion subs.
How should we think about the opportunities with other stage or maybe other federal or local government at this point in time.
Yeah, I think its I think it's a real opportunity I mean, we've seen that once we get into places you know these big enterprise organizations, whether it's a state government or federal government or.
Fortune 500 global Global Fortune company.
We do really well and with bio in particular.
And with all the states actually that we have signed up the number one goal we've had with all of them. The people that we have managing those is let's do everything we can to a retain this customer and be transition to other thing. Besides togut. So thats been there.
They're charger and we've seen it play out really effectively because.
As you are getting data so efficiently and so quickly from all types of different systems that they have internally the different county health system.
Being able to distribute data out to the different county health departments that they've never been able to do.
When the CIO the state fee that.
As they have other problems, whether the or other diseases like whatever it is we're so excited to say you bet. We can help you with that and then.
Let's start going on internally that Oh, Wow, these guys really truly be or data platform.
To help us grow for the future probably the things that we're trying to accomplish and you're going to see.
Deals that were coming out with.
Southerners speaking about us in talking about how they're able to manage their states now with that so it probably get I did all also have the John Miller kind of pipe in here and and add a few comments about our opportunities there.
Sure. Thank you. Thank you Josh and thanks Derek.
Yeah, we we've seen we've seen good traction with the with the state than I think that you know that value proposition in our mind as just a really good validation point for the flexibility of Elmo platform and the fact that we were able to create these applications in such a quick turnaround and really just even in the case at the state.
We were able to get this this system up and live with them within 72 hours. It's just an amazing proof point of what what Dalmo can do can deliver in these states circumstances or even in the transformation, that's being accelerated and enterprises today I'll just plays to our strengths really well.
Okay. Thanks for that color I guess as kind of a follow up that what else is.
Shown the power of the platform as your ability to go build these back to work applications and I'm just curious.
That.
Should we think of that as a meaningful new revenue driver or is that something that just opens the doors that creates new conversations great smarketing awareness top of funnel, how should we think about the opportunity there.
Yes, I would say more on the ladder.
And I think the real proof point in the real lights that went off for us with this whole cobot situation as when we couldn't walk in the door with an application.
That we can rapidly put together because of the power for the Extensiveness of our platform it isn't entirely different.
Selling situation relative to competition.
No one else offers what we offer in that kind of the situation. So it helps us get in their established relationship established a paying relationship and then expanding out from there. So that's what really went off I think for us in terms of an epiphany as well we were able to do something here in a week was hard work, but it caught the attention of a lot of people.
And now we're having conversations that we weren't having before because they need to solution and we have the ability to build these solutions in pretty rapid form. So we're looking at what we're doing with our customers were taking those.
There's a where there's a vein that has a group of 20 or 30 customers. During the same thing that we can turn into an App and then go take that and run that play those the types of sales plays that teams running now and I think it just transforms that first sales motion for us.
Great Congrats again.
Thank you.
Thank you and our next question comes from Avant surgery with William Blair. Your line is now open.
Hey, guys I think say my question and phenomenal job there.
I wanted to dive into.
Your your very large win.
As an example.
At the apparel retailer.
You know we've talked about this in the past about sort of displacing everything argument the opposite the CIO and things here with this is what we can address so what I love to incentives like as you think about these large enterprises, where do you land in that stack is it. The connector piece is the state of storage piece is that the mobile app visualization piece.
And then and then how do you think about expanding and sort of growing the tentacled everything you've built in the platform to maybe overtime, replacing some of those components that up piecemeal put together how should we think about.
Well you landmines motion of how about expansion works from a technology stack perspective.
You bet build on thanks, a lot for does the comments in the question I'm out into to answer this one because he was pretty intimately involved with.
With this deal or give us a fantastic deal and really representative of everything that.
We can do it all the possibilities and upside that we have but I think it'd be great for end to touch on that so we please go ahead.
Yes. Thanks reflective on this is really an exciting some cool all we're able to deliver it the done my platform. We originally started working with this company they had a particularly business challenges they required that they were struggling with executing across the platforms that they had and I had the old platform wins ranging from the.
Each show to the storage to the analysis to the to the delivery. So they really struck with them I believe you saw in as well and then the larger challenge they had to speed that.
Organizations that size stays I lots of data and lot of people took about big data, but it's almost like a terminal to seize referring to data. The these people had big big data on the areas that they wanted to focus on which is very specific use cases that particular, Brian that we need to draw I can execute quicker than they could do at this point in time because.
I couldn't get into a place that Ben can build the analyses to drive the business decisions.
So we landed a month across the organization the organization I suppose a dime or land they loved it they would spike most which happens if I could do they found that they could gets market quicker. They found that that could find information quicker fixed up be proactive in the work that they were looking at a nice talking to the other brands in the central I T team and said Hey, this is.
I think that we think could be used to the larger organization.
So we went to larger organization they naturally.
They haven't been defined they had everything right they had big across the SEC.
We very quickly starting to demonstrate the true scale, how much state to weaken taking how quickly we can take that transform it moving into something that's usable and then deliver out to that business EUSA, where you get adoption.
And of all the things that we talk about adoption is the thing that Sony excitement didn't my platform. We tried to do actually so when I've had the starting out to the in store workers. So they can see stock levels and returns no information that I haven't seen before it's all based on the fundamental premise that the dimer platform is designed to take data from multiple sources.
Across on premise in the cloud wherever it might happen to be not care how much you have.
Purchase in sub second an and deliver after the market space and as we went through the process people just fell more and more in love with lateral and that's what we're seeing in our enterprise deals and to jockeys point, if if we get into an organization and began to fall Petra that within more frequently with doing it with a higher than that land, we can expand them into a great.
Organization that utilizes if I might platform to deliver no two states IP ultra application and ultimately business value that we reference when we've spoken about some of the focus that we have on our sales organization.
So you know I'm going to my fault, but you're going to stick to this for a second here.
So it seems like you're right it with the whole platform in one use case area, where it was the connectors the data everything and then sort of expanded broadly, but but if we go back and again not not not too much or if you remember, but that's sort of saying to someone like let's pick a large company that might have turned it on t. there that might have a detail from informatics and things like that typically saying, that's replacing hasn't worked.
You said lets solve a pinpoint when it's holding up your point is that a platform sale or is that a sale of one piece of the domo stack and the expansion because this particular case sounded like it was a platform. Several one use case that extended broadly and I'm. Just wondering if that's still the case you still for example, it showing of the front end will connect your teradata system and well connect yourself, but just.
Or will use informatica for little bit or whatever what other tried replacing them or are you seeing sort of these platform approaches resonate more where you're actually okay. We'll probably do the whole thing upfront that that's what I'm trying to gauge a little bit Isle sort of you know the piecemeal approach, which was something that was working a little bit say 612 months ago versus the platform approach, which is kind of what you've just.
Outlined so so just trying to stem that initial enhanced bring up thank you.
No. That's a great question a great clarification. So so it was bugs.
Laying but what I mean by that it was the ability of the platform to be positive ecosystem. That's already in place. If we generally I would actually getting the organization because we were independent we would you want to use some of the LCD till you somebody actually CTO, if you're a big I'm sure you can never NFC is provided you ever analyses provider, we'd have we don't mind.
So we entered into the organization, we've been very open minded about Warsaw ROE would be the end result was about getting a massive tighter into place and the actual deliveries of the business user. So there is possible platform were originally we went in and they would say, yes, we might you something else to start with that and that's falling by house, we have plenty of customers who use us to do.
The the date for injection site, the normalization that like the songs and then we push outs or something else is actually do that.
The standard visualize action pop.
And this one it starts you didn't they started to see that we could actually themselves consolidate they have some legacy vendors that were pretty pretty expensive on premise providers because they wanted to see if they could sell its change right and that's the platform Santee. This way through the process isn't evaluation. They realize that there's some things that they want to keep some things that they wants to double down on time.
But ultimately this particularly used cases now so talking about execution.
Got it Oh, that's really helpful. Thank you guys and yeah I couldn't everyones congratulations.
Thank you. Thank you.
Thank you. Our next question comes from Pat Walravens with JMP Securities. Your line is now open.
Oh, great. Thank you and.
Gosh Bruce anyway.
Congratulations its terrific. So Josh if my question I've asked a bunch of other Ceos its questions I'd love to hear your thoughts.
How do you make docomo the best place to work.
Everybody is working from home.
And if you didn't throw in like a specific little example, it's something you're doing that would be great too.
Yeah, I mean, I think the most important thing honestly is.
Heavy everyone feel like they're part of something.
And.
When work from home started obviously there was a rally point.
You know how do we make sure that we can thrive in this environment. We unfortunately had to had to lessen people go.
As we were just worried.
And I think everyone rallied together and so making sure that your teams in your managers are.
Staying connected to people that.
Whether you're doing using assumed calls to have happy hour on Fridays or your teams are getting together or theyre getting together outside and doing.
Remote.
Remote meetings.
I think the most important thing is that you're staying connected that your understanding how your people are feeling.
And that there are part of something that that is exciting and so for domain right now that's been from Hey, Black glass matter start, let's let's get to you know our employees color and lets get them on a call. So everyone can hear from them and that's a way to bring everyone together and you could become closer and to understand people.
You didn't understand before and it's it's a family and it provides that connection that frankly would have been more difficult to do.
In an environment, where we were just in the office.
So I think you know it's kinda leveraging these technologies in these tools and situations that we're in.
In a way that we might not have been able to before this work from home situation.
But then of course, what's the mission and making sure that everyone's focused on that mission that you've got leaders that are staying connected to their people and I think we have that right now and we're also trying to show that we care I heard onetime I was on a call. It a bunch of Ceos and everyone is trying to talk about best practices and.
Someone said.
Yes, probably important right now that when if you have a team together in one of its sitting there and you're trying to all be serious on zoom and as a kid walks in.
They don't feel awkward about it.
And that maybe they see your kids walk in.
And just you know this is just a new environment. So.
Embracing it understand the it making sure people to loved and cared for and then making sure that mission is Paramount that's how it answer the question.
Awesome. Thank you.
Thank you and.
That does conclude acumen, a portion for today's call and as well concludes our call for today, ladies and gentlemen, Thank you for your participation on today's conference. This does conclude your program and you may now disconnect.
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