Q3 2020 Alteryx Inc Earnings Call
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Okay.
These statements are not guarantees of future performance they are subject to a variety of risks and uncertainties.
Our actual results could differ materially from expectations reflected in any forward looking statements.
For a discussion of the material risks and other important factors that could affect our actual results. Please refer to our SEC filings available on the Ccs website in the Investor Relations section of our web site as well as the risks and other important factors discussed in today's earnings release.
It remains extremely strong with just under $1 billion of cash and equivalents.
Im proud what the team has delivered in Q3 as they adjusted to evolving customer buying habits may also impressed with how the team engages with customers by proactively sharing best practices and helping impacted people departments companies and governments harness the power of the data that's excluding all around them and deliver improved business outcome.
Yes.
Loud and clear at our very first C suite Executive Advisory Forum and event, we hosted virtually a few weeks ago.
This included approximately 30 C level executives from global 2000 customers around the world turns.
Turning a forum each customer shared their vision for transformation and detailed how integral our platform is to these efforts.
I'd like for me was hearing Jonas prising, the CEO of Manpowergroup speak to how important we are to his company and have progressively they're managing their data to put 600000 people or more to work every single day. It was humbling. Please.
These businesses are not only upskilling knowledge workers to become citizen data scientists.
But they are also increasingly leveraging analytics and automation to run smarter.
They specifically called out these three trends.
Wholesaler expanded their use of the ultramax platform across over 10 business lines, including pricing sales operation tax and finance.
They are using the alter its ultra IX platform to eliminate manual processes and drive critical business decisions around product profitability lifecycle and sales territory optimization.
At all tricks is incredible their legacy as innovators in this space is unrivaled Tim.
I am incredibly honored to step in as CEO to guide the company through the next few phases of our growth.
Building and scaling world class teams and evolving organizations to align with market trends and increasing customer demand to something that im not only passionate about but it squarely leverages my experience in.
As a result, we are raising guidance for the year.
That said among the trends we continue to see include a higher level of scrutiny on spend which has led to longer sales cycles smaller deal sizes and less favorable linearity relative to historical levels.
And based on what we see today much uncertainty remains in the market for 2021.
Now turning back to the numbers as mentioned we ended the quarter with approximately $450 million and they are up 38% year over year.
Based on feedback from investors. This quarter, we have provided historical EMR by quarter from Q1 2019 to present.
These amounts are included in today's earnings release.
Finally in our enterprise segment remains strong we continue to see elevated churn levels, among smaller customers and those with small alter X deployments.
The next phase of our growth given are strong product markets that significant market opportunity powerful business model and are strong financial position with nearly 1 billion of cash on the balance sheet.
As Mark mentioned, we are focused on simplifying and streamlining our organization, including how we serve our customers and deliver innovation.
We will continue to focus our investments on growth, while being mindful of profitability.
Don to kinda elevate this this business and how do you how do you see that split between investing your time and product and versus kind of go to market.
Hey, Brett Thanks, very much for the well wishes I really appreciate it and great talking to you again.
You know listen I've been on the board here for couple of years Bellatrix and it certainly had a level of intimacy with the business, but being here for the last 30 days I can I can tell you that.
It's.
It's just much more exciting than I imagine that it would be it's an incredible business. The tool is unbelievable and the joy that people have.
When they're in the tool is world class and I think you know as I look around the business just reflecting back in my experiences of long term sustained hypergrowth.
I see a lot of the same qualities here that I saw that five and Palo Alto networks, because we really do have.
That incredible product experience and we're going to build and continue to evolve a really smart business around this amazing innovation.
So for me that means you are constantly tweaking as you know over the years and long term sustained growth.
You are always evolving and changing because customers demand more the more relevant you get to them and so I'll definitely be spending time on the product side looking at.
How are we.
It's over time.
I think it's premature for me to speculate.
What it would mean for 2021, though.
And.
Is there any correlation between our PEO and air are kind of growth trends or is that tough because of how.
Contracts are structured and assay six and six accounting.
Yes, I mean, unfortunately, theres theres really no.
No connection between the two exactly for for your point, I mean, ARPO and contract gas that are just all just a function of.
Of bookings duration and Rev Rec mechanics.
And as you know a R.R. is more just a function of the accumulation of ACB overtime.
Got it several well that's all I had thank you.
Thanks, Thanks, a lot Brad.
Thank you. Your next question comes from Tyler Radke at Citi. Please go ahead.
Hey, Thank you.
I had one question for Mark and one for Kevin.
Mark I am curious as you look at the pipeline heading into Q4.
You know, maybe what won't give us a sense for what you're seeing I think and you.
You know the <unk>.
In the second quarter, there was a lot of activity with trial based licenses and you know that some customers that weren't quite ready to fully commit to the full purchase price, but curious if you know you you are more confident in the ability to potentially convert those into kind of full paying customers and just give us the.
The puts and takes for what you're expecting in Q4.
That's super helpful. I guess my my question, Kevin is just trying to reconcile what what what appears to be you know pretty.
Strong revenue growth that at 25% year over year relative to you know calculated bookings actually declined 10% on on our P. O understanding there's there's a there's a duration headwind there, but I guess you know the duration.
Headwind one would think that would also show up in revenue because revenue is is recognized as a percentage of the total contract value so duration shorter.
That would impact revenue, but just help us understand the the relative strength and and the revenue versus the bookings and and even on a R. R. It looked like the sequential add of a R. R was less in Q3 than it was in Q2, so help us understand that and and maybe if there's any other variables, whether it's product mix that kind of K.
Outside the range that you were expecting that that would drive that thank you.
Yeah, Thanks, Tyler and hope you will look so you know each of the different dynamics that that you kind of ran through revenue bookings. You know are are there all driven in some respects by you know the each of their own components and so you know revenue certainly would have a similar impact to our P O and contract out.
Relative.
Duration, but you know timing of of subscription contracts and things of that nature also plays a factor in and that was a bit favorable for us in Q3 Uhm a R. R. You know look we I think we've always said that you know Q3 is is seasonally one of our you know kind of typically flat cute cute.
Two Q3, given some of the some of the geographical seasonality, we see specifically in Europe, and so that that ultimately plays a factor as we think sequentially. So anyway I hope that hopefully that answers your question.
Got it and just just that if I could clarify one one final point on that so is a a R. R represents the the kind of active contract. So you know for instance, if you booked a deal and Q3 that had a start date and in queue for that wouldn't show up in a R. R.
Until until Q4.
If we are under contract in a subscription agreement at the end of the quarter that is in a R. R.
And.
And learn what the customers are expecting from resources at all tricks and then just over time like every high Tech company does that's growing lot we're constantly refining.
Sales processes, making tweaks to comp plans I mean do you know when you work in a.
And on long term sustained marathon around hyper growth you realize you're always tinkering and making changes just to make sure you're delivering the right topline in the REIT bottom line.
Targets.
So for me.
Simplifying is it I think about from the customer's perspective, how do we be it would be simple to work with.
And what does that construct look like now.
Yes, even eight months ago, and I think so and we're just thinking about making it easier to do business with us having.
Okay people that have specialties in certain areas like with major accounts living in the same towns as as their customers calling on your.
You are calling and trying to drive business outcomes that are prioritized for them on the.
On the there is a financial question that you asked as well there towards the end ill pass it over to Kevin Yes, Thanks, Eric So with respect to hiring look.
As I mentioned in the call I mean, we are constant cautiously optimistic with the momentum we're seeing and I think as we've demonstrated in the past as we build confidence in being able to continue to invest in the appropriate areas of the business, you'll see hiring ramp.
Okay, and maybe to follow up Kevin.
Last quarter, we talked about the shift towards adoption licenses.
Could you just touch on what the impact that the customer engagement has been maybe it's probably early but how these deals are kind of converted an expanded.
Trial relative to expectations and then I guess is this a dynamic since Q fours.
A kind of big renewal big quarter for you I mean, if there's a higher mix of these adoption licenses is that something you've contemplated that may impact seasonality versus past Q fours.
That's it for me thanks.
Thanks, Derek look as I said last quarter adoption licenses.
They're essentially a paid trial and they are just one tool in a sales persons tool box and it is a flexible licensing arrangement that allows customers that are interested in trailing large populations of licenses with with specific outcomes in mind.
It is a tool weve used for a number of years certainly.
There's still a bit of uncertainty in the market and that's certainly is playing a factor as as we establish guidance.
The other thing just to keep in mind I mean, we had a very strong queue for last year. So as we look at the year over year carpet.
It's a little bit more more challenging and when you put on top of that the fact that we do think contract duration is going to be a headwind relative to what we saw last Q4.
It just makes it a little bit more difficult when you look at on a revenue basis now if you look on an AOR basis, I mean, we're guiding for the full year over 30% year over year growth and IRR, which I think is more indicative of what you're seeing underlying the business in terms of kind of a normalized growth rate finally with respect to the adoption license again.
And I just want to emphasize that is one feature that that we offer customers and very select.
Pieces that could be helpful. As they consider evaluating all tricks and certainly they are short term in nature. They expire on their own terms and I think as we mentioned on the call last year, our last quarter, we tend to see very good conversion of adoptions and I don't expect that right of adoption conversion to change.
Yeah, it's hard to work here, if I could just tech.
If I could just add on.
Certainly I think you'll see adoption license continue to be a part of our go to market, but I think a much stronger part is working with partners like Pwc and the big consulting firms big accounting firms because they are working large transformation projects and Pwc's example, they're actually they're actually using the ultra X platform.
To leave behind within their engagements and so.
<unk> got well over 100000 people.
That our users of all fixed within the company and we're looking forward to that partnership in anymore.
Very good maybe a follow up for you Mark.
As you think about next year.
And we feel running through I guess, the virtual hallways over the company right now before you're moving to.
The real ones, but hell.
Helped me understand how you think about.
Compensation.
Incentives do you anticipate much into way of change.
Now that's a P a K.
A platform kind of vision has been rolled out and intelligence Sweet is available how do you think about.
Tweaking potentially calm in order to drive the appropriate adoption.
And maybe it'll also you can tell some of the initial feedback from customers on intelligence wait to have you seen any adoption of this that that would be great to hear.
Okay. Thanks, anti so in terms of on the comp side as you know I've always been a big believer in paying for performance and over.
Overpaying, the farmers and underpaying, the Underperformers and so in addition to I would say a pretty disciplined talent management.
Framework that will be rolling out here.
We're going to continue to want to pay people for driving the right outcomes for customers and.
I mean that across the entire associate sweet and Ultra X I think we're thinking about.
What we want to be when we grow up as a company as as we enter this new phase with with me as the leader in.
Certainly we have designs on becoming.
Mission critical to the notion of transformation for enterprise.
As far as.
The customer response from Apta.
I can tell you haven't had more than a dozen conversations with customers that are involved the framework and I think people are starting to understand it I think that maybe the bigger picture is you're going to hear us to a much better job in the future of really outlining why customers need all tricks and.
Why do you need us now and be very prescriptive about the outcomes because I think that's what customers are demanding these days so I think.
The customers.
Zoom back out again, and say 30, or 40 customers that I've spoken to in the past 30 days.
I would say people are leaning in on using advanced analytics and the the HVA platform that we have to.
Really deliver benefit for their company, whether it's a company that's doing really well and we have many customers that are.
Getting tailwind because of covid or whether it's Conversely, whether it's somebody that is having a tough time like the airline I gave in like my pre read it was a.
We're seeing that quite a bit. So we believe this is important we want to evangelize and inform and educate the market on on how and why and so you're going to hear a lot more of that.
Down the future.
And we will give you a lot more detail.
<unk> on the the Amnesty that we're going to have in the spring.
Fantastic Good luck.
Thanks, very much then you up.
Thank you. Your next question comes from Gladhill told America place.
Hi, This is sherry well on their bad thanks for taking a question I just had a quick one for you Uhm are you seeing any changes in a competitive environment at all thanks again.
Yeah sure Sherry.
I've only got a 30 day window in on this.
As in terms of digging really deep on the competitive side of things and ensure there is competition because it's a 49 billion dollar market and we think there's over a trillion dollars a year that's going to be spent on infrastructure applications.
Around digital transformation. So there's a lot to go for here.
But I look at the the complimentary players to us that are in the cloud or.
The big.
The big the Big cloud players, we expect the really strong partnerships with them to drive.
Drive demand in the marketplace, but to prosecute that demand as well.
Got it thank God.
Thanks, a lot Gary.
Okay.
Thank you. Your next question comes from Tad should Chellsie from Guggenheim Partners. Please go ahead.
Hey, guys essential.
Congrats on the new role I have a couple of questions. Kevin you mentioned that the turned was.
Still high of the commercial side of the business can you give us some more color what the mix of the commercial customer says.
Yeah, Thanks to as.
And then totally sure.
What you're getting at I mean.
Our commercial businesses is pretty consistent to most in terms of small and medium sized businesses, we've talked to in the past.
We obviously have seen that segment.
Specific to churn be most impacted in kind of a higher risk verticals those verticals that.
More obviously impacted by the Covid pandemic.
And I would say, it's pretty geographically consistent.
Got it and then one follow up if I, if I got that almost right. It looks like there's a huge gap into grove.
You saw domestically versus international can you maybe go down a bit on what what the difference between domestic business and crash with what it looked like it had pretty okay. I'll try the U S for the U S growth was was it a single bed itself.
Why why such a big difference and grow up the customer demand behavior.
Wow, so much better outside of the U S versus versus U S.
Yeah, I mean, I think it's really two main factors first of all.
We still.
Still continue to see kind of mixed results.
In the North American market.
And I think that is a function of kind of what's been going on with covid in the pandemic.
On the other side in terms of international we have seen relative strengthen EMEA APEC as I mentioned.
Those geography's at least for the third quarter I think we're less impacted by the pandemic and that certainly helped us and the growth rates are obviously off of smaller basis for that region as well.
Had one one last one I'll I'll, let you guys go up back in the adoption licenses I know we're all.
Expecting a lot for new also convergent happening in queue for from an option licenses can you quantify.
Ah revenues today in Iraq today, reflecting the other option license and all that not being counted and those metrics for.
Four Q3.
Yes, so get again, just as a refresher adoption licenses. They are they are for fee.
And they are short term in nature, we do charge and that is considered a revenue and <unk> in that respect to the extent that it's still outstanding at the end of the period and then those will come up for for renewal, if you will or for conversion at the end of the adoption period and.
And as I mentioned, they tend to convert quite well, but they are just one tool in the toolbox and so I would just caution the emphasis.
Alright, but but the the question of the I mean, the question that I had was if somebody has an adoption license today they'll already be counted the deer or when they can wardrobe to a full fledged.
Agreement, it's not <unk> are all right because they're already.
They are already a paying customer you can look it doesn't really cause there any upside to revenues or Iraq.
Well no that is not the case I mean, if somebody buys a 25000 dollar adoption.
In April and that adoption comes due in October and they convert that adoption to a much larger contract when we measure IRR at the end of the year. It will be representative of the nature of the contract that's in place at the end of the year.
Got it thank you.
Thank you.
Thanks, a lot test.
Your next question comes from Patrick Walraven from Cheyenne pay.
Oh, great. Thank you.
One for each of you. So mark first of all you mentioned the cloud a couple of times now.
So I guess, what what's the opportunity. There you said, we expect really strong partnerships with a big cloud players, so who and how might those partnerships work.
Yes.
First of all nice to meet you looking forward to working with you and thanks for the question.
Yeah. Thank you first of all.
I want I want to reiterate that one of the things that I've been proud of being on the board at all tricks for the last two years is just how focused on customers. We are and I think we listen to our customers and of course, we care, where our customers are putting their data and more and more overtime certainly over the next decade, we're going to put more and more of their data on someone else's premises whether.
That's in.
Amazon's cloud datacenters or Microsoft about data centers, they're going to they're going to evolve to put it there overtime.
We think data is going to be everywhere for a very long time, and that's part of the complexity of.
Getting insights out of all of that data.
Partnerships like like <unk>.
AWS partnerships like Microsoft partnerships with we've got hundreds of customers with snowflake on on the snowflakes side of things and we really feel that this is an important market to.
To represent will share our deeper technical strategy in the spring at the analysts day, but I would expect that.
Over the next couple of years Ultra X customers will be able to manipulate data anywhere and be able to do all the amazing things that they can do with it with our signature ease of use dragging and dropping in and hearing.
That.
That's where we're going in and we haven't really released too many details about about the specifics, but we will certainly in the spring.
Okay. That's super helpful and then Kevin you know.
Stepping back for a moment I mean, not too many people are comfortable guiding for 2021 in this environment and you told us that you expect 25% and our our growth I'm not sure where the street is but that's higher than what I had.
So what what gives me that confidence.
Yeah, Thanks, Pat and hope you did well.
There's a few things I mean, we obviously have very longstanding customer relationships in.
I understand the nature of those are obviously informing us we've had very strong net expansion rates for quite some time.
124% over the customer base this quarter and a 135% and the global 2000, and then if you just stepping back I mean, this is a $49 billion Tam and there's just a massive opportunity or so.
Have a nation of all of those things certainly gives me confidence.
Great. Thank you.
Thanks, very much fat.
Thank you. Your next question comes from a yoga Kim.
Capital markets. Please go ahead.
Thank you Hey, Mike first congrats on the appointment I know you only have you only been there for about a month, but can you just talk about some other corner market.
That you might you might have princess.
Two vertical education.
You know you talked about automation.
Remarks quite a bit.
Do you feel that you need to Verticalizing solutions more to better penetrate the global 2000.
And then also obviously you could do that and do you need to also Taylor your sales and go to market efforts.
More around more I've already colonization. Thanks.
Yes, Great question, you and thank you and looking forward to work with you as well.
But first of all I want to go to market side again, it is only 30 days.
But I mentioned streamlining and simplifying it what happens is with a company that is growing as fast as we have over the last 23 years.
Is.
Especially when you have.
The kind of quality leader and Dean Stoker.
<unk>.
The company tends to grow up.
You had resources as quickly as you grow and sometimes looking back those resources resources were placed in the right areas and really that's all I'm talking about and again I do this every year I've done. This every year and every job is making sure we have the right seats.
On the bus and then we have the right butts in the right seats on the bus and it's pretty simple for me so.
More specifically what that means is we're going to have people, calling on major strategic accounts that have experienced calling on big strategically complex accounts.
And key vertical as like finance and healthcare ones that have a real <unk>.
Data challenges in particular I think.
We haven't sort of invested in specific verticalizing those teams because I don't like all the overheads. It comes along with Verticalizing, but what we've done is is what we're going to continue to do is put subject matter expertise around these key verticals KOLO.
Co located out in the field. So if there's a big deal at Citigroup, we'll have somebody that's pfs's high specialists working on it or if it's a big tax transformation deal in technology or and healthcare.
We'll pull one of those levers in terms of subject matter expert resources and we will be.
We'll be building out those over the next year, regardless of the sales structure without question, we're going to be focused on high impact specific customer business outcomes that that we we earn the right to hear about and we earn the right to go and help themselves.
In terms of tailoring the team.
Very strong theme certainly in my early discussions with the team is really focusing on the cohort of verticals and customers that have the highest predisposition to need our innovation.
And so I really think about think about think about it that way. There's one company that's got the highest pre.
Predispose need prioritization and then there's maybe a 15000.
Customer out there or target out there and we're going to make sure that we've got proper coverage.
With the right expertise to prosecute all of that opportunity and as Kevin and I've I've tried to maintain there's a ton of opportunity out there for us.
Okay, Great and then.
Mark on that front, obviously, you cut out.
Focus on that but at least in the near term.
Are you thinking more tactically and navy shifting more of your attention.
Attention and focus and resources around the smaller deals even potentially.
Breaking breaking up some of the larger do you think Tony.
Instead of smaller too if I could close today.
What I what I found you in is is.
We tend not to fuck.
Think it's a smart thing these days to focus on a deal I think you want to focus on the customer their business and what we can do with our innovation to help them and so.
Oftentimes when we when we identify a target that we think has a predisposition to need of renovation.
We'll make sure we put the right resources in front of the target whether it's.
Phone call for me or a meeting with Kevin and Ed and often that first deal is a small one.
Once we've got that permission, we go in and while them with the implementation make sure they've consumed our innovation and then we earned permission to go back and expand and I think you'll find.
As we start thinking a little more about customer lifetime value in their journey with all tricks we think.
<unk>.
Reflect back in the pre IPR roadshow that I did at Palo Alto networks.
I think a favorite slide of all the analysts was the one that showed all the tiles and the ratio of lending two expansion revenue overtime and I think our biggest customers.
We're going to build long term relate relationships with them with the right people across the account.
I mean, I'm looking for looking forward to that slide eight in the coming years.
Hey, Kevin will click on the growth out of the international region.
What's that new customer ass or just.
Strang Cindy expansion deals with existing customers.
Yes. Thank you look as as as is the case with all of our regions.
We tend to land small and.
85% plus or minus of what we recorded in the period is from existing customers. So by by definition of by the nature.
When we look at revenue growth.
'cause of our existing customers.
And UN it's Mark you just one other thing Scott Jones, our president and sorrow in the last year hired a couple of really good senior leaders to run EMEA and Asia pack.
And I couldn't think of two better people to run those businesses. So I'm looking forward to supporting them.
Traveled starts to again a little easier.
Okay, great. Thank you so much.
Thank you very much.
Okay. Thank you. Your next question comes from dropping sorry from William player. Please go ahead.
Hey, Thanks for taking my question Mark welcome and.
Look forward to working with you.
I wanted to start off and slightly high level and again I know, it's been 30 days.
You said that multiple times, but but.
So it's a little unfair, but strategically when you think about analytics in a downturn in a tough environment. They typically are under prioritize no one's hiring more analysts no one's hiring more people to do price elasticity type work, even though they are actually should right because you can optimize profitability or whatever but you have seen.
An uptick coming out of down to 2008, whether it's tableau attorneys or others too.
2000, and others picking up great traction coming out when people said, okay. Now, we should invest in analytics, and optimizing drive promotions or segmentation or whatever.
Yes, I asked this question is being a little while ago.
And he said.
We just aren't seeing it yet this quarter suggest you might be seeing some of it but as you look out over the next few your do you believe that acceleration should play out given the things you've commented on Tam and then the quality of the product just trying to send how you think about that idea because even when you were Palo Alto you guys chose to invest analytic nominal mix during various types of that.
Companies 10 years, so I'm just trying to think how you think about that and what you might see what the company might see as we come out of this.
Yeah, I think I think it goes back Bob and and thanks for the question by the way.
I think it goes back to you.
What did we earned with the customer.
Invested the time to understand their business and invested time to thoughtfully come up with some.
Some areas, we can help them and if we earn the right to do that I think when we have.
Found that there has frankly been the opposite when it comes to customers that have been affected by by this impact, perhaps they're chopping people but.
I would submit their chopping the people that have lived miserable life that one like an XL analysts lid.
Hang in there hesitate call, they're cutting those people out there patching up.
The patching up the drywall and.
And they're and they're leveraging citizen data scientists or advanced knowledge workers that can do so much more with the information and by the way I think the data challenges, they're increasing not decreasing right. So I think the the explosion of data and especially especially as companies digitize everything because you don't.
When you digitize everything you don't just yes.
You have to re imagine that you have to deconstruct all the the workflows and people and rolls and then reconstruct them digitally.
Do that with a tool like El tricks right. So that's why we talk about it instrument in.
The transformation in digital transformation journeys, our customers are going through.
I think the long term opportunity remains the same postcode without question I think we've all woken up and realize hey, wait a minute everyone's in inside sales person and and lots of other different things about our business that we have to.
We have to really take advantage and use the data as no more like a ninja skill.
Four analytics as opposed to just just.
Just plain surfacing some numbers.
Yeah, Yeah fair enough I appreciate that and then a little more talking to maybe for you made for Kevin.
Just the pricing environment, you increase in list by server, 35% beginning year and obviously is just a reflection of also to the increased capabilities you've added but.
But you haven't changed over pricing part of that since maybe IPL and so I suspect there hasn't been much push mark that would be great. If you just give us a quick update on customer response that price increase and just what you're seeing broadly in the pricing environment.
Yeah. Thanks provide I appreciate and hope you are well.
We talked a little bit last quarter about the fact that we hadn't seen much pushback.
From server pricing and consent continue to be pleased with the momentum of the product that was the same in Q3 I think to your point, we have significantly increased the capabilities of server over the years and had.
Hadn't raised that price.
Certainly since IPO and I think it goes back earlier than that so.
Look at it as a key feature in a key driver of the HVA platform and.
Fully customers understand and appreciate the value of the offers.
Yeah, Yeah. It's helpful. Great. Thanks, guys Mark look forward to it and I. Appreciate you guys, taking the time to answer my questions.
Thanks pattern I appreciate a man.
Thank you go next question comes from Mark Murphy J P. Morgan. Please go ahead.
Hi, guys Adam version around for Mike matching you. Thanks for taking my question, So last quarter and I guess this corner you mentioned that you don't really expect conditions to improve too much for the remainder of 2020 and but during queue for you sort of mentioned and shook quarter that revenues were going to be higher than expected and then the guy that range.
Q too is there any color you can provide on like gave you that confidence and check quarter and then maybe it wasn't like a big deal that kind of gave you that signal.
Yeah. Thanks for the question appreciate it look.
Look I think you know as we provide guidance I mean, it's it's based on all the information we have available to us.
In my prepared remarks, we talked about the fact that we are cautiously optimistic that we are seeing improvements in some of the customer activity.
That's certainly baked into guidance as we provided for Q4.
I wouldn't signaller indicated was the function of one or more specific fields.
[laughter].
Got it. Thank you for that and then just as a quick follow up on the net expansion has been taking down presumably because it's elevated Chang and Ah there anytime guideposts, you can provide on where that might shop out.
Thank you.
Thanks look at me and gave been going back to IPO I think we indicated with with a degree of confidence that we believe this business over the long term.
Be able to sustain.
Above 120% in that expansion and we're still notably above that especially in the global 2000, so beyond that I.
I don't know that there is any other other guidepost I mean as as we get bigger certainly that puts pressure on net expansion, but still incredibly pleased with.
What we've seen and I would just remind you of it.
Still such an early.
Time in this very large opportunity and so plenty of room to run.
Yes, Thank you for taking my questions.
Thank you very much have a great day.
Thank you that concludes our question and answer session I would now like to head back to Mark Anderson for closing remarks.
Thank you very much operator, and thank you all for joining us on today's call.
Just to get them Super excited about the opportunity. That's ahead of US all of your associates here at all tricks all of our partners.
As we instrument the digital transformation journey for the customers that matter to us and look forward to discussing our progress with you on the queue for earnings call in the Meanwhile, have a great quarter.
Ladies and gentlemen, thank you for participating you might know disconnect your lines.
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