Q3 2020 Workiva Inc Earnings Call
Good afternoon, ladies and gentleman gentlemen.
Gentlemen, my name is Angela and I will be your host operator on this call.
The prepared comments, we will conduct a question and answer session.
And it will be provided at that time.
If at any time during the conference you need to reach an operator, Please press star followed by zero.
Please note that this call is being recorded on October four 2020 at five o'clock pm Eastern.
I'd like to turn the meeting over to your host for today's call Adam Drees director of corporate development and Investor Relations of recalls.
Go ahead.
Good afternoon, and thank you for joining us Workiva third quarter 2020 conference call.
This call has been prerecorded call.
Comments for our Chief Executive Officer, Marty Vanderploeg.
Our Chief Financial Officer, Stuart Miller, well, then open the call up for life, Q and a session Joe.
But our Chief Accounting Officer is also on the call.
A replay of this webcast will be available in November 11 information to access. The replay is listed in todays press release.
On our web site under the Investor Relations section.
Before we begin I would like to remind everyone that during today's call, we'll be making forward looking statements regarding future guidance.
[laughter], putting guidance fourth quarter, its full fiscal year 2020.
These forward looking statements are subject to known and unknown risks and uncertainties.
Cautions that these statements are not guarantees of future performance.
All forward looking statements made today.
Our current expectation only we undertake no obligation to update any statement to reflect the events that occur after this call.
Please refer to the Companys annual report on form 10-K, and subsequent filings for factors that could cause our actual results to differ materially any forward looking statement.
Also during the course of today's call, we will refer to certain non-GAAP financial measures reconciliations.
Reconciliations of non-GAAP to GAAP measures and certain additional information are also included in today's press release.
With that well begin by turning the call over to our CEO Marty basketball.
Hello, everyone and thank you for joining todays call.
We made great progress in our third quarter.
The global trends of online collaboration and remote work continue to benefit Workiva.
Customers use our cloud platform to simplify their complex work like connecting data and teams and by automating and streamlining processes.
Financially, we exceeded guidance for revenue and operating income, we delivered more than 20% growth in subscription revenue and generated record bookings.
In particular, we saw strong bookings and global statutory reporting management reporting and capital markets.
As a result, we are raising guidance for the fourth quarter Stuart will provide details later in the call.
In Q3, we continued to upgrade customers for next generation platform.
Customers accounting for over 90% of our annual contract values are now utilizing our new platform.
The next generation or keep a platform is a key enabler for our growth strategy, our new platform is more open intuitive and scalable.
We can now more quickly build and deliver new fit for purpose solutions that solve.
Perfect business problems.
We believe delivering new platform extending solutions will continue to drive our success.
Our virtual marketing events continue to produce positive results in terms of record attendance global reach and targeted sales leads.
In September 6000 customers prospects and partners from over 60 countries participated and amplify our annual user conference.
Our virtual specialists focused on solving universal challenges around data.
Work flow and complex reporting and last month 76 key technology and advisory partners joined Us for our annual partner summit.
Our summit address how partners can better leverage our platform of their deep domain expertise to develop high value solutions.
We expect our partners to drive an increasingly higher percentage of our future revenue growth.
I would like to take this opportunity to thank our employees for.
Supporting our customers in upholding our values based culture.
Even in the face of a challenging 2020, they delivered our nexgen platform.
Right at our customers and generated strong sales growth.
In closing we remain confident in our ability to capitalize on our new platform as enterprises continue to move to the cloud.
With that I will turn the call over to Stuart Miller.
Thank you Marty.
As mentioned on our last call, we began to see a more predictable cadence you closing deals at the end of the second quarter, suggesting that our customers and prospects, we're settling into a new normal.
That pace accelerated in the third quarter across a broad range of our solution.
Particularly global statutory reporting management reporting and capital markets.
Both transaction volumes and average deal size came in above our expectations in the third quarter.
Doing so with almost no help from price optimization.
As a result, we are raising guidance for Q4, which I will discuss later.
Before covering our Q3 financials I want to provide an update on a regulatory matter.
On October 21st the European Union granted its member states the option to delay compliance with the Isa mandates for one year.
To help companies free up resources for more urgent pandemic related matters.
We expect Oh, you member states to exercise the option so.
The one year delay has had no material impact on our outlook for EMEA.
Turning now to our financials as always I will talk about our results and guidance on a non-GAAP basis for.
Refer to our press release for a reconciliation of our non-GAAP and GAAP results and guidance.
I'll address our performance against Q3 guidance first.
We beat Q3, 2020 revenue guidance at the midpoint by three and a half million dollars.
Higher subscription revenue accounted for most of the B.
We succeeded in collecting a high percentage of the receivables that we had held in reserve at the end of Q2.
The pandemic had less of an impact on collections and we had anticipated in June.
In addition, we closed more deals early in the quarter and we sold and delivered some capital markets deals within the quarter.
We beat guidance on Q3 operating income by more than $9 million.
The revenue beat I, just mentioned and accounted for just over a third of the swing.
The remainder of the beat relative to guidance included lower travel and entertainment costs.
Reduced expenses from shifting marketing and internal events to a virtual format.
Recovery of bad debt expense.
Higher P.T.O. usage.
And decreased occupancy costs.
Now turning to a comparison of Q3 2020 to Q3 last year.
We generated total revenue in the third quarter of $88.1 million, an increase of 18.8% from Q3 2019.
Breaking out revenue by reporting line item.
Subscription and support revenue was $75.9 million up 20.4% from Q3 2019.
New logos and new solutions helped drive strong revenue growth in Q3 2012.
51% of the increase in SMS revenue in Q3 came from new customers added in the last 12 months.
The balance of the increase came from companies who've been our customers for more than a year.
Professional services revenue was $12.2 million in Q3, 2020, an increase of 9.8% from the same quarter last year.
Consulting accounted for the gross.
Turning to our supplemental metrics.
We finished Q3 with 3583 customers.
Net increase of 129 customers from Q3, 2019, and a net increase of 71 customers from Q2 2020.
New customers subscribing to an E stuff solution.
Accounted for 20% of the gross number of new logos in the quarter.
Our revenue retention rates remained strong our.
Our subscription and support revenue retention rate was 94.9% for the third quarter of 2020 compared to 94, and a half or sat for the same period last year.
Consistent with our experience over the long term almost half of the attrition in the quarter came from M&A de listings and bankruptcies.
With add ons, our subscription and support revenue retention rate was 110% for the third quarter of 2020 compared to 112.8% in Q3, 2019 and 107.9% in Q2 2020.
The number of larger subscription contracts continues to increase.
In the third quarter of 2020.
We counted 785 contracts valued at over $100000 per year up 28% from Q3, the prior year then.
The number of contracts valued at over $150000 totaled 383 customers in the third quarter up 47% from Q3 2019 results moving down the piano.
Gross profit totaled $66.9 billion in Q3.
25.6% in the same quarter a year ago.
Consolidated gross margin was 75.9% in the latest quarter versus 71.8% in Q3 2019.
Net expansion of 410 basis points.
Breaking out gross profit.
Subscription and support gross profit totaled $64.3 million equating to a gross margin of 84.7% on SMS revenue and expansion of 140 basis points compared to Q3 2019.
Professional services gross profit in the third quarter was $2.6 million equating to a 21.6% gross margin compared to 7% in Q3 2019.
Research and development expense in Q3 totaled $21.8 million up 5.6% from Q3 2019.
R&D expense as a percentage of revenue improved 24.7% in Q3, 2020 or 27.8% in Q3 20 Nike.
Sales and marketing expense for the quarter increased six and a half a percent from Q3 2019.
$32.8 million.
Savings on T., any and our shift to virtual marketing events.
Partially offset higher expenses from head count growth and our sales team.
General and administrative expenses totaled $8.7 million in Q3.
$600000 compared to Q3 2018.
Gee, they expenses as a percentage of revenue improved 110 basis points to 9.8%.
We posted an operating profit of $3.6 million in Q3, 2020 compared to an operating loss of $6.3 million in Q3 2019.
Turning to our balance sheet and cash flow statement.
At September 32020.
Cash cash equivalents and marketable securities totaled $524 million.
An increase of $15.3 million compared to the balance at June 32012.
Net cash provided from operating activities in Q3, 2020 totaled $7.8 million compared with cash provided a $4.7 million in the same quarter a year ago.
At September 32020, we classified $5.2 million of receivables to a credit reserve account up from $4 million of receivables at September 32019. This.
This reserve account reduced deferred revenue by an equal amount and therefore, it reduced billing at the end of the quarter.
Remaining performance obligations on subscription contracts continue to vary from deferred revenue as we implement multi year contracts with annual billing terms for some customers.
Turning to our guidance.
We are factoring in the expected impact of the COVID-19 pandemic on our business and results of operations based on information available to us today.
For the fourth quarter of 2020.
We expect total revenue to range from $90.2 million to $90.7 million.
We expect subscription revenue to grow at a faster rate in services revenue in Q4.
As a reminder, in Q4 2019, we posted a one time increase of $2.5 million in professional services revenue due to a regulatory change.
We expect non-GAAP operating income to range from $500000 to $1 billion in Q4.
For the full year 2020.
We expect total revenue to range from 348 to 348 and a half million dollars.
We expect non-GAAP operating income to range from three to three and a half million dollars.
Turning to 2021.
On a preliminary basis, we expect total revenue to exceed $401 million in 2021.
We expect the growth rate of subscription and support revenue to continue to outpace the growth rate of professional services revenue.
We expect non-GAAP operating loss as a percentage of revenue to be a low single digit and 2021.
We plan to offer detailed guidance on our outlook for 2021 on our next call.
We will now take your questions operator, we are ready to begin the Q and a session.
As a reminder to ask a question you need to press star one on your telephone kind of drive your question past abandon or Heskey. Please stand by a week, a barbecue and era.
And your first question is from the line of Terry Tillman with Truth. Please go ahead.
Hey, good afternoon, gentlemen, can you hear me okay.
No we're going to be in.
Yeah, well congrats on the improving trends, it's really good to see some of these capabilities and the billings and RPL. My first question just relates maybe it's just a little bit of an education for me or just an update but you called out global statutory reporting and management reporting and capital markets activity can you maybe try to stock rank those in terms of.
Are there any notable differences typically in the deal sizes for those use cases.
And do those are those prominently kind of positioned in your guide for next year or is there anything else that kind of comes online. That's notable next year beyond these three items that you called out and then a follow up.
Stuart.
So Jerry I'd say.
Global Stat is.
You know in most of those deals are six figure so middle six or high six figures for sure.
Management reporting has got a pretty.
Wide range, depending on the U.S.
Use case, the size of the customer and so forth.
And then.
Capital markets is sort of typically low low six figures there.
There we got good contribution from.
Integrated risk and and a number of other.
Use cases, and we expect that to continue into next year, we just called those out in particular, because they were performing above expectation for the quarter.
Okay, and just it takes that Stuart I guess, a follow up question I don't know if this is for you or Marty, but seeing the big federal sector deal.
You know this past quarter I'd like to hear more in terms of how that kind of came about what factored into kind of the decision to go with you guys, there and how the federal sector in public sector looking in general and thank you.
Well I would I would say that.
You know the thing that has really changed for us and we alluded to that as you know we we spent four years right.
Architecting our platform, we have a true platform now and so when we go into something you know something like a department of Justice. We talk about all the different uses the platform, but being financial reporting internal controls are.
All sorts of different things that they have to do and so they really view it as buying a platform for a lot of different function and you know they really don't now almost all the government agencies. We've run into are still using word excel. So it's a pretty natural sell the <unk> outlook is you know [laughter].
Right now of course, everything locked up but the outlook is it looks good but it's very lumpy. It's a lumpy business and also you know that.
And the September Spike every year, so it's up but we're very optimistic about it.
And your next question is from the line of Chris Merwin with Goldman Sachs. Please go ahead.
Okay. Thank you so much for taking my question I wanted to ask about I guess that you mentioned on the call. There is it the delay.
With that he that compliance for about a year, but the same time, we saw 20% of new logos come from customers adopting any SAP solution. So as we think about the impact of this how would you say it impacts pipeline build it perhaps even in a positive way or deal close rates.
That region in the coming quarters, just trying to get a sense. If this actually helps you in some way by being able to initiate more more conversations or.
How how best would you describe the impact thank you.
You know the you know Stuart this is Marty by the way Stewart did say it didn't affect our outlook for EMEA next year.
What we're seeing is that companies are they realize they still have to do this you said, it's been delayed one year, because a cold, but that's a sort of a story.
And they know they have to do with their part way down the path of due diligence and learning what they have to do and we really you know we've been continuing to close these deals even after the announcement so.
We really don't see that as changing our trajectory I think if anything you know the type of competitors. We have there are very small companies that were more or less starting for this business and that's going to hurt anyone's going to hurt them more than others, but I think it is true we will be able to have more conversations it will be less rush and so I think in general.
It certainly is neutral and that could potentially be positive.
Okay, great. Thank you and maybe just a quick follow up on that the billings number obviously super impressive in the quarter and there's a big build up in deferred that we saw in the balance sheet. So yeah. We.
Was there anything abnormal there in terms of pull forwards or anything like that or is it just a really healthy execution.
In terms of in terms of closing of business.
It was as Marty indicated in his talk it was a record quarter for bookings and.
It was it was strong throughout the quarter and so there was really nothing unusual going on other than just really good execution.
Great. Thank you.
Your next question is from the line of Stan Zlotsky with Morgan Stanley. Please go ahead.
Perfect. Thank you so much guys in congratulations on a very strong quarters, maybe just following up on 'em on Chris' question. The the strength of the quarter I mean, I think it really surprised a lot of people to the to the upside is mainly manifesting in billings.
And you mentioned that you you had a lot of deals closing in the beginning of the quarter was there some <unk> some essentially up maybe pent up demand.
From a the the in the Q1 and Q2 delays that ended up closing early in Q3 and driving some of the deferred revenue build.
Stuart go ahead, yes.
So I'm definitely stand there was some we think there was some pent up demand.
We were heartened shows that the the pipeline weve been carrying a big pipeline all year and we were seeing the pipeline continuing to build and we were bringing a big pipeline into the fourth quarter or so.
That's that's why we're optimistic.
Okay, perfect and maybe a quick follow up you. Obviously, we all saw the very strong capital markets activity all that so many IPO is coming public in your then through the summer and into the early fall can you help us characterize you know how much of that if at all.
Sure ill helped Q3 and maybe your your outlook for the rest of this year.
And you know how are you thinking about that activity going into 2021.
Sure. So I think that it's fair to say that.
Companies going public are increasingly seeing.
Seeing the value of our platform.
And you know part of that is the fact that they're they're working remotely and trying to do deals remotely and.
Certainly some of the more progressive law firms are embracing it which is good thing.
You know it we had a very strong IPO market in in Q3 and.
Well, we'll see what kind of impact if any this.
Election has on Q4, you know it's not.
Percentage wise it was a big but it but is that in terms of dollar contribution.
For deals that were sold and delivered within the quarter not not a big number.
Got it. Thank you so much guys didn't like less than a million dollars.
Thank you I will.
I just.
That oh.
All of our solutions.
Saw increased strength I mean this this was across the board execution I would say so it wasn't any one one anomaly.
Right and then that makes a lot of sense all right. Thank you so much.
Your next question is from the line of Tom Roderick with Stifel. Please go ahead.
Great Hi, gentlemen, thank you for taking my questions Gracie great to hear from you.
I would love to go back to Christys question earlier, just around Europe, and appreciating that 20% story you. It's out of the new logos are coming from sorry. He SAP related can we just take a step back in Europe and I don't know if this is a better question for you or from already but I'd love to just hear a little little bit more holistic discussion of whats.
Going on in Europe relative to market awareness of the W. desks solution.
How many customers are coming to you simply because of the SAP readiness versus just broader awareness of the of the overall solution base and he and I guess the third part of that is just where are you at with regards to hiring the sales team over their go to market.
How fast do you need to build that I know that a lot in there, but maybe the profit or question is just talk to us a little bit about Europe, what's happening aside from just Lisa.
Sure. This is Marty I would just to touch on a few of those.
First off you know, we built up the EMEA sales team in the.
In the last two quarters.
2019 in the first quarter of this year.
And you know, we're able to fill the positions we needed that Phil.
They are now maturing and getting into more productivity.
So we're we're very pleased with.
That growth aspect. So we've gotten the sales team we need there for the near term.
In terms of awareness in Europe.
It's really important understand Stewart has been very consistent saying, yes, if there's upside in terms of how we think about things.
You know.
We sell annual reporting we sell a.
Management reporting we sell integrated risk there.
We sell some other regulatory things for banks very large banking customers in Europe.
And so we're definitely getting to the point, where people know who we are they.
There's still a tremendous amount of opportunity there because it's still a small revenue number and as you know that you as close to the same GDP is the U.S. So.
It really is a big opportunity for us and the east up you know the nice thing body Sip was it did drive platform conversations.
But we're still seeing that happen I mean, when people understand that we're sort of the premium end of that and that we have not only the ability to produce the U.S. So you know regulatory document you have to submit but we have the entire platform to pull the data out of your systems of record.
You know Coleto Creek, the report and an output of that that's really what's driving our success or not the fact that we can file a document I would say this though that you know that has enhanced our conversations but the top end of that market. The top more than half you know this is something they know they're going to have to do their look.
For a solution that has legs and it's going to be around for a while and helps them with the entire problems. So.
Youssef is not really that big an issue for us there in terms of the delay.
Yeah, that's good color and Marty if I could just stay on sort of go to market and sales execution I suppose it would be a little bit tempting to look at the last couple of quarters, where you've had great bookings a you know a great commentary on the broader market and say okay. Good the market has recovered and the environment has recovered but.
But on the other hand, it seems like you know, perhaps your sales execution has improved and knowing that you handed the reins over to Julie on that front, a couple of quarters ago would love to just hear a little bit more about any changes that Julie made with respect to go to markets or what you're seeing on a sales execution perspective, and what that means in the future.
Well I think you're spot on I think that.
Obviously, the the our customers have adapted to the new normal as Stuart said, but also.
We have gotten much more focus julie's brought us a lot of discipline in terms of using metrics not just in sales across the whole organization to really understand how we're optimizing all of our teams.
And then we did change out sales management sheep, we you know we promoted insider to take over a north American sales.
And he's been doing a fantastic job, so there's a little bit of everything there but.
In terms of optimizing everything in the company, but you know certainly.
Words point about we have a strong pipeline that's continuing to grow is why we have the optimism we do it. This this isn't a onetime catch a thing we really do see strengthen our pipeline and strength in terms of larger deals, which is a reflection of the fact, we actually have a modern platform now that we can do a lot.
A lot of different things with and customers are standard and partners understand that so not all of those things fuel. The fact that we're seeing bigger deal sizes and a stronger player.
Yes wonderful really helpful commentary appreciate it congratulations.
Thanks [noise].
Your next question is from the line of Brian Peterson with Raymond James. Please go ahead.
Hi, good evening, gentlemen, and congrats on the strong results. So I wanted to dig into the booking strength a little bit I know you've had a lot of build up and expanded relationships with the partner channel or any commentary on how the partner channel ramp this year or contribution to the quarter or any color on that.
Sure I'll give you some color [laughter] search.
Certainly partner contribution is becoming meaningful I mean, it's actually becoming a meaningful part of.
Our go to market, our new sales remember Weve talked about the fact that were behind the normal lifecycle.
Have a partner involvement for a company our size, mainly because we just rebuilt our platform.
And now they're platforms rebuilt they have many more opportunities to make money our partners can see all the different ways and all different solutions and they're starting to bring solutions to us our partners are saying, we could use it for this solution. They help us build it out and then they take it to bear to their or their client base. So we're seeing good.
Progress obviously.
We want to see partners involved as much as possible not only to accelerate and grow the size of deals, but also to deliver them and you know we're definitely looking to have partners would be the primary means of delivery for our solutions and you know of course, if they if there if they're going to take us into other markets markets they're more.
Familiar with that you know a very cost effective way for us to move in certain markets. There will be certain markets, where we don't go unless we have a partner so we're.
We're making good progress we have a long way to go I think there's a lot of upside in terms of you know a partner development for the company, but we're making good progress.
Good to hear and Marty maybe a follow up I just I know you referenced that the platform I guess as you're thinking about future R&D investments or how are you thinking about adding to that maybe from an organic or inorganic investment. Thank you.
Well, you know I would say that.
Now that our platform has been delivered and we have you know.
I want you know, it's really important for me, 90% of our you know Rick.
Recurring revenue.
The the <unk>.
The annual contract value.
Has moved to our new platform that was a huge speed I mean, we.
You talked to companies, who move customers from one platform to another and actually our retention rate was higher than a year ago. So you.
That's really a substantial accomplishment.
And.
You know on top of that.
It's enabling us just to do bigger deals to build the pipe and and to you know really involve our partners.
Great. Thanks, one part of your question give me <unk> what was that.
Oh, I see great to hear but no go ahead.
No I I forgot the second part of your question two part question.
Oh, no I guess I'm trying to think about it.
Okay Aart I.
I apologize the R&D investments.
Because we delivered the platform. We're now in a really great place to develop fit for use solution, but I alluded to that and every time, we bring a new fit you know specific you know solution to a a market.
Gives our sales team a whole new vein of potential new bookings and so we're going to use a significant amount of our R&D dollars to develop those new applications now most of that money when we develop new applications also builds on our platform.
So it really helps not only the you know having.
Good for you solutions that our salespeople can sell but it also continues to expand.
And create more value in our core platform. So that that's how we're to optimize the use of that R&D going forward.
Great. Thank you, let me jump in brine because you asked specifically about inorganic or M&A as it related to R&D and you know.
It's certainly an important screen for us when we're looking at acquisition opportunities about.
How well the technology could integrate with our platform and that naturally leads us to a a buy versus build.
Analysis.
But as Marty indicated that the new platform is is in great shape and is.
Much much.
Much improved in terms of its ability to integrate with new software. So it's you know, it's given us broader latitude, but by the same token. It's also easier for us to build on so it's a it's a higher bar to Chen when it comes to build versus buy.
Good color thanks sure Yep.
Your next question is from the line of Rob Oliver with Baird. Please go ahead.
Hi, Good evening gentlemen, thanks for taking my question.
Marty one for you and then Stuart I had a follow up for you I on just on the platform. There's been a lot of discussion of it in it it really sounds as if you don't [laughter]. Some customers are really waking up to <unk> to what they can do with the platform.
And that that's resulting in.
You know nice spike in the outlook that we saw this quarter and I.
Our checks are certainly been positive on it so I'd love to hear in particular on the extensibility comment that you made I know you guys have talked a bit about the FERC and some other markets. Just was wondering if we can get an update and you talked a little bit about some of the R&D dollars going that way, but perhaps an update on the FERC opportunity and any other opportunities that you guys might might be eyeballing right now.
Sure. The the the FERC opportunity is is really a good opportunity for us for two reasons. One is that we got to do almost no modifications to the platform rather than put a different taxonomy in it for the XBRL. So it was a really natural market to go to.
Second off it gives us entry into a whole bunch of.
New companies that are private and we haven't had as much exposure to so we.
We view it as you know, it's it's obviously oh.
Substantial amount of potential revenue for us, but more importantly, it's a good example of how the platform can be used with almost no R&D investment and then it also gets us into a whole another set of of companies mainly private energy companies that we didnt have access to before in terms of some opening offer.
During so yeah FERC has been a really good example, the best example that you know we're.
We feel comfortable talking about now is global stats for reporting.
That has been just a wonderful experience we put it through Oh.
Very structured incubation program, we learned how to sell it before we invested we figured out who the competitors were did the whole you know a whole incubation process and now we're.
And obviously the result was very positive when we went to market, we knew how to message how to sell it and what the price points should be what the willingness to pay was and it was very successful now we have several other solutions in that same incubation process I really don't like to talk about them and phone number one we verify we're going after them and number two I don't want to alert.
Competitors.
But the fact that we've built a more structured incubation program and the success we've seen in the global statutory reporting really really bodes well for us in the future.
Great. That's that's very helpful color I appreciate that and in store you you made a comment about you know some higher sales headcount in the quarter and I think that wasn't Europe or was that the tailwind of Europe hiring or were you guys already done and if not you know anything.
Anything about that that we could flush out what's in North America and will will there I know the general sales force will it sounds like they'll be the ones going after these are more specialized opportunities that come from the extensibility of the network, but you know would you add on a you know vertical sales people in some instances as well as well if needed.
Thanks, very much gentlemen.
Sure. So as Marty indicated we started the hiring of quote ahead.
In in EMEA, and beating third quarter last year, and then carried it through.
The second quarter of this year. So it took us about a year and so that the comparing third quarter. This year to third quarter last year, we have higher head count or is this all to that because we just didnt have those heads on on our books third quarter last year, there have been some hiring in the U.S.
Yes, as well so that I think that answers that particular question in terms of you know selling the extensibility I think thats the responsibility of all of our sales teams. We have some that are specialized on.
Particular solutions, but our account owners.
Our trained to sell to sell the broader platform.
Thanks again.
And your final question is on the line of Mike Grondahl with Northland Securities. Please go ahead Sir.
Thanks. This is Mike go on for Mike Thanks, taking the questions maybe.
Maybe just on a pack is there anything new to call out there. The last couple of quarters. It I know, it's still early but any color there.
It's early or you know, we're getting some wins there and we're you know we're slowly building up a team much like we did in EMEA several years ago, we want to get some reference.
Customers are use cases polished up or would want to do their developed the partner relationships, but that's going really well and like you said its very early days, but we're accomplishing what we wanted to do there so it's not a.
The new platform has localization for some of the more local languages.
Languages. So that's you know enabled us to really get serious about it but up till now we are pretty much on track.
I would add one thing which is that the focus on distribution in a Pac has really been around partner enablement. That's that's really where we are.
Been focusing our sales efforts, there's certainly partner enablement in EMEA too, but there is also a big direct sales team in EMEA.
Got it that's helpful. Thanks, and then just in the <unk>.
In the Q under kind of the industry breakdown, so anything to call out there were some of the harder hit industries, where that's.
Commercial real estate or hotel travel type stuff or is it pretty broad based where you're going to see much of an impact.
So.
We're obviously not selling a lot to airlines these days or to the to the hotel companies, but we did we do tend to skew on larger.
Well you know among our customers.
Some of the retail receipts have also been hit but it is really not translated into any meaningful impact on our financials.
Got it thanks.
And there are no further questions at this time I would like to turn the call back to management for closing remarks.
Just like to thank everybody for joining and remind the group that we have a investor day scheduled for.
November 19th and hope to see you there.
Thank you gentlemen.
Ladies and gentlemen, this does conclude today's conference call. Thank you for participating you may now disconnect.
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