Q3 2020 Vonage Holdings Corp Earnings Call
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Okay.
Greetings and welcome to the Vonage third quarter 2020, <unk> earnings Conference call.
At this time all participants are in a listen only mode.
A brief question and answer session will follow the formal presentation.
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As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host.
I'm sure Blankenbaker VP of Investor Relations. Thank you you may be get thank.
Thank you operator, and good morning, and welcome to our third quarter 2020 earnings Conference call.
Speaking on our call. This morning is Walter Reed, Chief Executive Officer, and Tim Shaughnessy.
Interim CFO.
Also joining us is Omar is your <unk> president of the <unk> platform.
And Rodolfo carbon neutral head of unified communications and contact center applications.
Rory will discuss our strategy and third quarter results and.
Tim will provide a more detailed view on our third quarter results and fourth quarter and full year guidance.
Slides that accompany todays discussion are.
Available on the IR web site.
At the conclusion of our prepared remarks will.
We'll be happy to take your questions.
As referenced on slide two.
I would like to remind everyone that statements made during this call may be forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These forward looking statements are based on management's expectations.
Depend on assumptions that maybe incorrect or imprecise and are.
Subject to risks and uncertainties that could cause actual results to differ materially.
More information about those risks and uncertainties is highlighted on the second page of the slides and contained in our SEC filings.
We caution listeners not to rely on duly on these statements and disclaim any intent or obligation to update them.
During this call, we will be referring to non-GAAP financial measures.
A reconciliation to GAAP is available in the third quarter earnings press release.
For the third quarter earnings slides posted on the IR website.
Additionally, during prepared remarks today, all comparisons to prior periods are year over year, unless otherwise noted as sequential.
So with that I will turn the call over to Rory.
Thanks Hunter and thank you to everyone for joining us this morning.
Hope you and your families are staying safe and healthy.
I have now been advantage for four months.
I would like to start by thanking our team members for their support my Onboarding.
And for their passion and commitment to our customers, particularly during these unprecedented times.
I've been in the technology space for a long time advantage has some of the best talent I have seen in my career, including some of the most innovative engineers and technologists in the industry today.
It is a truly interesting time to take the helm, although cloud technology company like Vonage and it has been rewarding to see how the power and reach of our global communication solutions help so many customers digitally transform their businesses and engage with their customers.
And team members in new ways.
As I, how quickly focused on getting to know our business and our customers. We have been reviewing our business execution and performance and gathering feedback from customers partners and team members from across the world.
We are analyzing operational data and metrics to understand the efficiency and effectiveness of our business, our product competitiveness and fit the speed and quality of our innovation engine and the power and reach of our sales and marketing initiatives.
We are doing many things well, but we have also identified key areas, where we can improve our execution and results.
On today's call I'll focus my comments on two areas, one our third quarter results, which reflect solid performance and to the business optimization and alignment project My team and I have been working on to improve efficiency and execution, while defining our strategy.
Operating plans and investment areas to accelerate future growth and profitability.
First turning to results, we executed well in the third quarter. The Vonage Communications platform business total revenues were $234 million with service revenues of $218 million, a 19% year over year increase.
Within this result, Apiay revenues grew 35% year over year highlighted by high value, a pie and another record quarter of new customer additions, our unified communications and contact Center application service revenue grew 7% slight.
Lee ahead of expectations.
On a consolidated basis, Vonage communication platform business and consumer revenues totaled $317 million and we delivered adjusted EBITDA of $42 million.
Looking at our product categories in more detail.
Revenue strength was driven by high value, a pie, which grew 143%.
Its were down single digits year over year underscoring the opportunity for improvement.
Now I would like to focus on our business optimization and alignment project. This is a multi quarter initiative with two main objectives. The first is to review and optimize our business operations by streamlining our processes and efficiently aligning our talent.
And assets.
Our strategic investments.
In parallel we have been working on this strategy and operating plans for the next two to three years with a key focus of using a portion of these operational savings to make strategic investments in areas, where we can win a disproportionate share of the market and where our communication platforms.
Elutions best fit the needs of our customers.
Segments in mobility.
Any channel capabilities and expanding our addressable market at.
Additionally, we're focusing investments on go to market initiatives to strengthen our channel presence effectively read all customer segments and increase our cross sell and upsell opportunities.
Now to optimize our business operations and improve our executions. We expect you will see this progress beginning this quarter and across 2021.
True power of this improved efficiency and execution is our ability to strategically invest to capture faster growth and better profitability.
Down $7 million.
Within VCP Apiay revenues, all of which are service were $108 million in the third quarter up 35% and ahead of expectations.
This outperformance was primarily driven by high value.
Which grew 143% year over year.
With particular strength in video and IP messaging.
Hi value.
Now represent roughly 20% of total API revenues.
Unified Communications and contact Center service revenues were $110 million in the third quarter up.
Up 7%.
Moving to slide 10.
VCP revenue churn increased 30 basis points sequentially to 1.2% as expected primarily due to two unique customer circumstances.
Monthly service revenue per customer increased 17% to $527 due to increases in average customer size across the DCP platform.
Moving to slide 11.
Consumer segment revenues were $83 million.
We ended the quarter with approximately 1 million consumer subscriber lines.
Two year, plus tenured customers now represent 96% of our consumer base.
And five year plus customers are 80%.
Which have churn rates of 1.7 and 1.6% respectively.
From slide 12 consumers average monthly revenue per line.
Was $28.31 up 75 cents, reflecting higher USS fees and targeted price increases that we implemented earlier this year.
Churn of 1.8% was stable compared to the prior year quarter, though.
Although up 30 basis points sequentially.
It's.
As well as executive costs that we paid in the quarter.
We ended Q3 with $537 million of net debt.
Resulting in 3.2 times net debt to last 12 months adjusted EBITDA.
We did reduce net debt by $5 million sequentially in the third quarter and we.
We expect to reduce it further in Q4.
Moving on to guidance on slide 18.
For the fourth quarter, we expect Vonage communication platform revenues in the range of $236 million to $239 million.
Including $6 million of Usfour revenues.
And I just did EBITDA margin a 14% at.
At the midpoint of total revenues.
We expect 2020 total vantage communication platform revenues in the range of 906 to nine $9 million.
Consumer we expect 2020 revenues and the $332 million area.
Total consolidated revenues are expected to be in the range of 1239.
124 $2 billion.
We expect full year of 2020 adjusted EBITDA in the 167 million dollar area.
This represents a substantial increase in 2020 revenues and adjusted EBITDA guidance to reflect the solid third quarter and the fourth quarter above hour prior outlook and the initial impact of our business optimization and alignment project.
With that I'll turn it over to the operator to initiate Q&A.
Thank you we will now be conducting an answer and question sorry question and answer session. You would like to ask a question. Please press star one on your telephone keypad.
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We ask that you. Please let me yourself to one question and one follow up question.
One moment, please while we pull for your questions.
Our first question was coming from the line of Tim around of Oppenheimer. Please proceed with your questions.
Thanks, So much where he can you elaborate a little bit more than what you're thinking on a strategy. At this point you know both product go to market and kind of where you fit in in the overall market. Thank you.
Sure. Thanks, Tim Hey, Tim I I think the key.
Go to build on this concept of the vantage communication platform, which is truly powered on a global basis. We have your exit then amazing setup customers across the globe, they're going to leverage or a P. I threw a bed into there.
Workflows their enterprise application, they're gonna use those purpose built applications around unified communications in contact center.
We're starting to see movement in the pipeline around cross valid upsell across all parts of the vantage communication platform.
So it's clear that the strategy is continue doing best and differentiation around the product where you tackled you know some of the efficiency and operational effectiveness of the company to free up dollars not only to improve our profitability, but most importantly, too and that will continue.
To invest for growth with balanced profitability that investment will tackle innovation around product differentiation as I mentioned, and then can make or go to market more effective. There's no question, we can target and meet our customers needs in a more efficient way and target or.
Products, where they have a opportunity habits disproportional amount of share gay Sarah strategies really straightforward, Tim let's make ourselves a fishing effective streamlined invest in our future around innovation product differentiation get or go to market.
Tailored to each of the customer cigarettes micro small mid enterprise and then allow us to effectively market. We spent a lotta time breaking apart are marketing investments.
To understand where the return what we now can better target and dry better leads and closure rate. That's what we Wanna do and the strategy ultimately is to improve over two to three year period. The performance advantage communication platform, our strategic business.
In terms of bold steady increases and growth N.
Continued performance on the bottom line of profitability does that helped him.
Great color just one quick follow up so what what's the point timing on when you think you're really integrated from a product perspective, and and go to market perspective.
Sure from a go to market perspective, I think we're we're doing a very good job of that already we're sharing leads across all of the product areas. We've seen Windsor crossed that what we're trying to do is on a global basis across all of the vantage communication platform, it's really have that understanding each week.
Week to look at those leads to look at those opportunities as we're developing enjoy courses marketing airy, making sure that we're applying our marketing investments of dollars that enhanced and we're seeing progress I like the amount of U C and C. C cross-sell Uhm, Oh I wouldn't say.
That I understand it but we really had to spend the first three four months to really get underneath the data put the operational discipline in place to understand what was working on why and then weve taken feedback on the product analysis to understand where is our strength what do customers like about it.
Where do they see our gaps and where we understand that much better.
Say approximately $600 million cash.
Cash flow over the next five years and potentially a couple hundred million more after that so it's valuable we'll make the decision and what's the best return for our shareholders. We've got an inbound interest for sure and we're going through the marketing of the <unk>.
Process this month and will go through the full process.
It's safe to say there's death, there's interest in it but we have to make sure we really understand they understand the business to really put the proper value on it I think that'll come through the process.
Alright.
That's very helpful. Thank you alright. Thank you Sir appreciate a rich.
Operator next question. Please. Thank you. Our next question is coming from the line of Ryan Mac Williams with Stephen Zinc. Please proceed with your questions.
Stan.
We are optimizing our transactional processes and you'll see the benefit of that in our gene a functions and then finally worry comments and I think I meant made a remark as well about our real estate model.
Both because of.
The acquisitions that we have done and the the locations of our global workforce. We are re looking at where we have real estate and where we need real estate going forward and we'll be looking at making some changes in that regard. So it's a cross a number of functions and across a number of different income statement lines and this work will continue.
We talked about that business optimization project and a a couple of year project, but frankly.
Running a business in a disciplined fashion requires you do this every day. So this is going to be an ongoing effort.
I Hope I answered your question and that was helpful. Thank you and right Brian I just to again emphasize here, we're looking to improve steadily over a two three year period and that that's really where we come from you asked the question about the 50 million.
Probably makes the most sense in terms of the structure.
Retaining technology elements, so that probably makes some sense, but that sales structure, we have some flexibility on and let's see how we go through the process. We'll give you information as it goes back as it goes we go through it and look for more at the next earnings call. Thanks Ryan.
I appreciate the color. Thanks a.
Of course, Alright, operator next question please.
Thank you. Our next question is coming from the line of George Sutton of Craig Hallum. Please proceed with your questions.
Thank you. This is Adam on for George ROI on your initial call. You suggested this was a rare and bigger opportunity than people thought I was hoping today you could give us a little more detail that we should have more time to see.
Sure Adam.
Let's see eight is that people have always talked about the pure place in this industry, but I think all of the industry is moving to try and look more like bondage.
Then they're gonna try and look like a pure play over time I think the power of a full function you know communications platform with those capabilities knitted together I think that's where everyone's gonna try and now we have a headstart, it's our job to execute.
Better more efficiently understand our marketing and our customers better build better channel relationships more on a more efficient business. So we can make those investments in engineering and go to market to go out.
That's what we're gonna do and I'm gonna apply my experience in business transformation and operational execution to work with the leadership team in the board to make a difference in the other cool thing about it that I don't think people appreciate at them as the talent.
There are some of the smartest technologist, an engineering and sales and passionate people about changing the world and change in the industry here advantage. That's something you can't you can't under nest estimate the power power of it and it's it's been those I think are the key areas.
I hope that helps.
Certainly one quick follow up for me can you give us just a little more detail as well on the go to market with respect to your partner such as Salesforce answers now.
Sure I'm Gonna pass that turned off on just a second but.
There's a couple of things do you need to think about go to market before you Taylor ago to market you must understand the customer the product and your marketing and sales effectiveness. That's only we've been working out in the past four four months data if you understand the data and you probably.
That's a cute it properly it will come that we need to understand directly from our partners and our customers how effective it is and we need to make sure that we understand our sales effectiveness and market. We're starting to see some really good ideas and make sure that we get those things done so there.
That people can make that that we can make that kind of improvement anyway, let me pass it to rodolfo to add a little bit of specifics around Salesforce and service now for docile.
Sure. Thank you've already and thanks for the question of course, we have a long long that experienced saying partnership with a sales force in a week continue to have that for the C. R. M market in a C. K S. S solutions, we're expanding that from a port 40 perspective and from a goat market perspective to service now and Microsoft.
Microsoft we have two up partnerships, one up with a Microsoft dynamics for to see cast and wonder with Microsoft The team support a ucas, where where you know the customer has the opportunity to to have the single pane of glass, but my both are solutions, India applications. So what we are doing is extending or go to market partnership <unk>.
Experienced no problem why do we have a widow salesforce now with a service now and Microsoft dynamics, and Microsoft teams expanding to Tam expanding the opportunities for our solutions.
Thanks, Thanks for docile operated linked to the next question Oh, sorry was that sometimes someone thing.
Operator, let's go to the next question please.
Thank you. Our next question has come up with a line of Alice Kurtz with Keybanc capital markets. Please proceed with your questions.
Yep. Thanks, Thanks for taking the questions and good morning, everyone got to be the sell the consumer business Marie It seems like you're you're putting up a soft a line in the sand for for Q1 I guess my my first question is.
Question, we often get it from investors and I don't know if you really gone to a framework on this but.
What is the remaining profitability of a V C P and.
Yeah can we can we get to a starting point for investors to think that this is a breakeven business. Excluding consumer I think that'd be helpful. For people is a really is it gets really close to happening.
Yeah. Thanks, Alex So two things that I think you need to think about I think you as I mentioned in the prepared remarks will provide b E C. P.
Details around the revenue growth and adjusted EBITDA performance and the next earnings cool and that we felt no that we expect the V. C. P business to be slightly negative in the fourth quarter and to be profitable in this we expect.
<unk> to be profitable and the second half of 21.
Saint follow up on that.
Yeah, it's just.
I guess the the follow up I wanted to ask on that is.
If you look at the U C N C C business.
Uhm.
That the competitors that you're you're you're <unk>, you know going after them and.
Seeing and bake option Rfps are.
Spending a lot of money on on their platforms and I guess, you know back to the longer term profitability of the stand alone B C. P business <unk> you feel like.
You.
You can invest in the platform.
Uhm competitively compete against the Standalone companies that are out there that are public.
Uhm.
And it's still hit those those targets you just mentioned or you think there there might be another kind of layer of investment needed posted to the divestiture.
No. So I think that they I I I I think that those businesses all fit together, well and again I think that the power and breath of our portfolio with NASA. There's those cloud based solution to the new C. N T C. They're very effective they're effective.
<unk> and understanding what use cases, and what market segments to they really sing where do we get that disproportional road. That's how you have to tailor that go to market and then build out the marketing and then expand your your Tam opportunity by targeting certain.
Hansman some feature functions that you know that cloud business generates strong profitability. It's it's a competitive product, it's making sure. We don't have to be everything to everybody in that space, we need to know exactly where it plays and how it when did.
Disproportional sure I think we have much better data on that over the past four months. Then we had before so I think that's a really important piece of that discussion you should not anticipate I need to make some kind of linear or difference in terms of sales right no.
Oh, I know and justman, an investment level I think we have the right I think we can be more efficient and produce better growth and better profitability at the same time, leveraging but we have more efficiently.
That's how you should think about it and you should look for that steady progress.
<unk> after quarter year after year I'm, a longterm investment Vester I'm here for X years be part of this look for that progress over 2021 and 2022.
Alright. Thank you thanks, Alex <unk>.
<unk> our next question please.
Thank you. Our next question is coming from the line of some on some on it with Jeffries. Please proceed with your questions.
Hi, Good morning, everybody I appreciate all the the color on the long term and I think some of the changes, but if I could maybe kind of recalibrate onto three Q.
And I'm, just curious how bookings growth for a mid market and enterprise how it went from growth in the second quarter to if I heard correctly down slightly ear every year in the third quarter.
I guess, we're just trying to understand with all the positive commentary on the technology, what drove that bookings number, especially in the upmarket to to to be down in the third quarter.
Well I believe what we said was that it is sequentially, we saw improvements and that that bookings tread and you've seen that trend for a period of time in the mid mid market and enterprise. It grew and I think we talked about that in the prepared remarks and.
Terms of the numbers and what was up in the teens kind of level I think that's an important kind of <unk> and hire but what we want to do is willing to see the whole.
Uhm co heart, all segment growing and what tempered the bookings gross or trends was some of the focus around defocus around micro in small so we've seen good progress around the around the mid market and enterprise and I think that's reflected.
And then a comment but we need to make sure that we're balancing that with you know the micro and there was this previous decision to kind of deemphasize that I I I think baking sure that we do that effectively and then the historical V b.
<unk>, there's no I don't want to leave you with the impression that we're not seeing momentum and mid an enterprise because we definitely are but we have to have a balance across all those people all those segments.
Great No problem, Yeah I appreciate the clarification on that I I Must've, just misheard and then I guess just as a follow up you know as I think about for customers. Obviously, there's a there's a lot of at least changes being discussed and I'm curious if you're how customers you're responding to maybe some of the changes that are going on it.
<unk>, and how that's either improving or or whether it's having an impact or not on sale cycles.
Sure from a customer standpoint, I'd, probably led Omar just add a comment on it on the a P. I side a lot of momentum customer see the power of our a P. I as in our a P. I platform and they continue to see that and they appreciate the investment and focus to to grow that capability I knew C and C T.
<unk>.
<unk> <unk> I think they're seeing a more tailored set of messaging Ah clarity around her execution, but that's just beginning so why don't I pass it the o'meara if you could add a little color about how customers are reacting to you know our vantage a P I trends and what we're doing homework.
Homer.
Oh, sorry, I was on mute, thanks, [laughter], great either a crushing their space that is that's the.
Go ahead, yeah. That's the thing of 2020 I'm on mute [laughter] great question. Some odd so what we to Ruiz point, what we saw what we've been seeing really all year [noise].
Is is the bookings growing so we've had we've had really strong sales growth. A couple of things that are also have been happening throughout the year is that the sales cycle has shortened we saw that we saw that sort of at its apex in queue too, but we.
Still see.
We still see sort of shorter than average sales cycles.
Then we've seen historically so that that's a that's a positive trend I think [laughter].
We've seen as others have seen in this space, particularly in a P. I is that there is has been an acceleration.
In digital transformation projects and digital digital transformation investments.
And our customers and and our prospects.
Thyroid homage my questions have a great day of course, Thank you you too mm Darryl how about we go to the next question. Please.
<unk>. Our next question is coming from the line of.
And that a martial with Morgan Stanley. Please proceed with your questions.
Hi team. This is Eric I'm for me to thanks for taking our questions and congrats on the corner, maybe just kind of penciling back in on the API business understand with a different type of buyer from kind of a few C. N C C, but I'm looking at video being the driver there like how are you thinking about cross sell her up so opportunities into those customer.
<unk> are they naturally more product by product focused in volume growth is more of the driver do you see an opportunity to also position. Additional features are a P I isn't to that base.
Yeah, I can have omari I got a little bit of color in a second but Eric there's no question that getting that introduction with video is opening up clearly the opportunity to sell multiple a P eyes as they have experience with vantage when we see lots of cross-sell and up.
Fell across Api's, whether they come in through S. M. S for a higher function messaging or email or video, where we're seeing a lot of expansion on that and we'll see what we want to do is to get that cross sell it up so they tend to be yeah lots of different.
Styles of customers in terms of small mid an enterprise level. So there's lots of different opportunities and what we're doing is making sure. We're sharing those opportunities with our unified communication experts and R. C. C. Experts. He is then they see the whole breath and we.
Seen some really interesting traction I wouldn't say again that we have that code completely cracked yet, but we're gathering the data to understand it Omar a little color there.
Thanks for it Hi, Eric on the first part of your question about Byers, you're right I think the if you look at all of our different product lines [noise].
What is unique about a P. I is generally our economic fire is their developers right that could be developers as it already has pointed out.
The the the kind of the proverbial two kids in a garage right. The the small developer or the large enterprise developers and we have all of those you may remember we have the second largest developer ecosystem in the communications API space, we have over a million developers. So we have a lot of small developers but.
We have a lot of large developers now specifically with video we have seen a lot of digital natives.
And that's historically been a very strong part of our business. So these are these are companies typically new entrants are disruptors [laughter], but we've also seen in the last really in the last two years and it's growing a lot of incumbent enterprise.
Enterprise type companies that are getting into space as they are investing in digital transformation is there also.
Trying to become nimble right like like these digital natives.
Now specifically with video we do see video actually is our strongest product in terms of cross selanne and up so.
In particular, we have a lot of good attach with video on enterprise service plans.
And then as already mentioned with other follow on products be at S. M. S voice verify which is a two factor authentication product. Those typically go very very well if they are not bundled with the sale. They typically follow shortly after that.
Did that answer your question Eric Yeah, that's very helpful. Thank you HM.
Mmm, Thanks, Eric Let's go to the next question operators. So we can try and get the last few in here before we finish up.
Thank you. Our next question is coming from the line of Willpower with Bird proceed with your questions.
Alright, thanks for thanks for filling me putting me in I guess, a couple of quick questions for you first I I'd love to try and get a little more color on the higher revenue churn you're allergic to in an application services segment I think you'd noted a couple of contact center customers that may have <unk>.
<unk>. So I'm just trying to understand you know how isolated that is versus any brought her expectations that are going forward a fire chart.
Sure Tim do you Wanna take that one yeah.
Yeah. Thank you let me jump in well. Thanks for the question Yeah will do the two incidents of turn that I referenced a really unique client situations. One of them was a function of an acquisition that had been done and they will consolidate in the activity under under the acquisition and then the second client was going through a consult.
The nation of the various partners that they use so I I'm not I'm, not particularly disturbed by that I think that they were truly anomalies I I I think we are in a very stable very stable position.
Thanks, Okay, well, how about right. Thanks anything else. We went ahead or are you good.
Yeah, no that'd be great I I'd love to kind of circle back on the a P. I business and you know if there's any other color that can be provided with respect to different geographic trends, what the growth rate to look like across the the different G. O. As in then I guess as you look.
Further out we're already talked about go to market for the App services business, but what are you thinking about in terms of investment opportunities to maybe or at least sustained about accelerate a P. I grow with both in terms of potential go to market and product breath are there is there a line of sight on other a P. I that would be natural additions to what you're focused on today.
<unk>.
Sure I think from and a P. I product perspective continued enhance the capabilities that we have in differentiate extender video leadership, that's key and upfront keep the differentiation flowing into the other high value, but definitely add different messaging <unk>.
Lucian continue to create more flexibility and the all the programmable are configurable a P. I type solutions will have a strategy here that every technology, whether it's built for unified communication or contact center. It's built this in a P. I.
That architectural apply that way, we can use it and apply it into our purpose build applications and then sell it across the a P. I E O system I think that's that's that's key and as I, we emphasize through the prepared remarks and question the whole idea about bin.
This optimization alignment is to understand the opportunity and M desk for the gross that I'll transfer and the company with balance improve profitability, but this takes a period of time, it's at two to three year journey steady progress cause that's what we're gonna go do.
So I appreciate it well why don't we go operator Darryl to the next question.
Thank you. Our next question is coming from the line of Catherine <unk> call. Your security. Please proceed with your questions well. Thank you for fitting man mine is around your channel. He really didn't discuss the performance of the channel on the call and could you discuss or parts for us more actions, you're taking to make that more.
Effective and then how are you working with the channel versus competing maybe also like your Microsoft that service now relationships all thank you.
Sure. Thank Catherine the point about the channel is a couple of things first hire the right people that understand it I've been spending a disproportionate amount of time understanding the channel I met and spoken with many of the key channel partners to understand what works for them and I.
A couple of things you're gonna see that are fundamentally different one we need to enable the channel pass out right and not only identify leads to us that I think was applaud strategies I think <unk> I think we're dollar co can add some color about how we're tailoring our solution.
<unk> and support in our channel program cannot only drive leads but to enable them to truly.
You know and a much more efficient way Sal and deliver the product. So R. C read off or would you like to add a little color.
Yeah. Thank you alrighty and fix that for the question Yep, Yeah. It it it's about having more people sending more and more frequently frequency. It's important with a channel how we support the channel you know <unk> doing the sales process is important we cannot only got the the lead and I leave the channel and yellow on them you know.
With a blind you all that instructor there. So we're gonna be bashing destructor your bathroom technology to support a channel from you'll that lead to cash perspective give the channel more visibility on on the business that they have with US that's why the channel at all these asking yes. They wanted to more visibility they want a more engagement we.
<unk> and then we're gonna support them from a technology perspective from a process M. Golfing US a perspective of giving up Yana. The focus here is on channel success. He's not only you know like getting <unk>. The the the referral and move away from the channel, but making sure that we are you bashing in our channel success that's.
From a matrix from a golf berneice target and support perspective afford a channel.
Yeah, and Catherine I'd like Oh, we will go ahead Catherine. Please I would expect then that you will part of your strategy then would be update to pour it all put together probably better tools for quoting coke to cash system that type of activity.
Exactly.
Exactly we both agree on that one Rudolph Oh, 100% think about this is the process, we're going through understand the customer understand the partner understand the product get the data and metrics and then structurally and fundamentally just you're spot on on how you look at a Kathryn.
Operator next and final question. Please.
Thank you alright, our final questions come from the liner Sterling Audi with J P. Morgan. Please proceed with your questions.
Hey, this is true on your styling I'm just wondering if you could provide some more color on the segmentation of your success in the market across the product curious now and which segment of the market are you, having an a success and unified communications Hershey's contact center versus a P. I as in how does that differ.
Sure. So I think through what what's important to think about is again as we.
Gone through the data and understand the data there's areas, where the products and each product I think a P. I.
Are a powerful set of offering they play anywhere in the market anywhere on the globe and we see that in terms of its breath across all three regions and we see that from small digital emerging natives all the way up through enterprise you know pig.
This thing big firm. So we're seeing interested in all those areas. When you go into unified communications that space or particularly strong small mid market. Those areas I think there's a lot of opportunity and that space I think it's a bit under.
Served and I think we can make some hay on the on the.
Digital side of that we've wanted some really amazing enterprise customers with some specific use cases, particularly distributed enterprise models. That's a powerful offering you know there are companies that you probably stopped into over the last week that we're supporting in that space there.
Big enterprises, but they're on a more of a digital digital a distributed model and then when you looked at contact center, it's really around C. R M and around that collaboration but I think the ultimate power of that is the combination of these three capabilities the breath of or a P.
I platform transform in the business and how we leverage that architecture and blow it to each piece and then the cross selling upsell on unified communication in contact Center, you know, there's a lot of opportunity, particularly in mid market through specialize use cases or <unk>.
Taylor do use cases, and enterprise and then even into small so I I think that would be how I would get the color group.
Got it thank you.
Thank you hey, everyone I appreciate that I'll pass it to a hunter to close up the call Hunter and your final Comber comments.
No I think that's it.
I appreciate everyone's participation look forward to speaking throughout the quarter.
Thank you that does conclude today's call you may disconnect. Your lines at this time. Thank you for your participation and have a great day.
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