Q3 2020 ServiceSource International Inc Earnings Call
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Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby and thank you for your patience.
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Ladies and gentlemen, thank you for standing by and welcome to the surface. So its third quarter 2020 earnings conference call.
At this time, all participants on a listen only mode. After the speakers presentation. It will be a question and answer session.
Ask the question do under section you will need to press Star then one when your telephone please.
Please be advised that todays conference is being recorded if you acquire any further assistance. Please press Star then zero I would now like to hand, the conference over to your speaker for today.
Cadnine head of Investor Relations, Sir you may begin.
[laughter].
Thank you operator, we appreciate everyone joining us today and welcome to silver resources third quarter earnings call to discuss the results for the quarter ended September Thirtyth 2020, <unk> on the call today are gearing more services.
Chairman and CEO enrich Walker our CFO.
As a reminder, our FCC filings in the earnings release, we issued yesterday after market close are available on our website at www Dot IR Dot Servicesource Dot Com. In addition, we have posted earnings slides to accompany our comments today.
Shortly after this call we will post an audio replay of this call and a copy of our prepared remarks to our website.
Before we begin I would like to remind you that during the call we will make projections or forward looking statements that involve risks related to future events or.
All statements made during the call reflect our views as of today October 29, 2020 and are based upon information currently available to us.
All projections and forward looking statements should be considered in conjunction with the cautionary statement in the earnings press release and the risk factors included in our SEC filings, including our report on form 10-Q.
These documents contain and identify important factors that could cause actual events or results to materially differ from those contained in our projections and forward looking statements and we disclaim any duty to revise or update any forward looking statements.
In addition, during the call. We will also be discussing certain non-GAAP financial measures, which we believe provides additional information to enhance the understanding of how management assesses the operating performance of the business.
Reconciliations to GAAP and non-GAAP measures can be found in the earnings release and accompanying this call.
With that I'll turn the call over to Gary.
Thank you Chad and welcome everyone to our earnings conference call the third quarter 2020.
We demonstrated operational resilience and financial discipline in a minute.
Challenging and dynamic macro environment in the quarter.
Although the headline revenue numbers reflect a tough year over year comparable I am encouraged by the progress we continue to make throughout the organization.
We won new business on both the new logo and installed base client profit.
Are doing a better job executing on our brand promise and are moving forward well with our virtual first operating model, we improved profitability sequentially from Q2 generating free cash flow of $3.4 million.
Be leveraged as the balance sheet further and accreted net cash in the quarter looking forward I.
I have conviction that we are aligned to attractive long term market opportunity with multiple avenues for us to accelerate our strategy enhanced our growth and profitability metrics and transform our valuation profile.
We recently hosted a virtual executive roundtable with more than a dozen of executives from market, leading technology companies, including in a mix of current clients and those with whom we are working to partner the discussion with these leaders with representative of what we've been seeing and hearing into May.
Market more generally.
Regardless of whether a company is selling hardware or software delivering on premise or through the cloud, we're monetizing through licenses towards subscription and consumption based billing the challenges and opportunities are the same.
Go to market transformation and customer centric initiatives are at the top of the C suite agenda.
The unifying priority for these companies and their leaders as they focus on delivering a better experience through out the pre and post sales customer journey.
They need sales representatives that are technically savvy and digitally enabled they need customer success managers that are product experts and outcome oriented they need renewals representative that are consultative and growth focus and underpinning all of these roles they need data.
Processes analytics and insights that make every single interaction with their customers more efficient and effective.
Commentary from experts at leaving strategy and consulting firm validate these needs.
In a recent article from Bain and company the headline was.
In enterprise software renewals and retention have never been more important.
And then in October Mckenzie and company thought leadership piece on Cobi nineteens impact going to be the big sales organization.
Identifies that more than three quarters of between the buyers and sellers now prefer remotes human action interactions and digitally enabled sales have now become the next normal.
These things are at the core of what we do at service source every day and we are the market leader in terms of our scale and global presence, our solution scope and capabilities and our client results and impact.
Allow me to share some recent examples of where our strategic differentiation has resulted in success in the market in the third quarter, we secured our fourth new client logo win of the year to support a leading provider of software related services.
For the 94 billion dollar health and fitness industry operating in a competitive environment and facing market disruption caused by COVID-19, the company saw an opportunity to accelerate their go to market activities by leveraging surface sources demand generation and conversion capabilities.
And then it comes to that to our virtual first operating model our focus on moving with greater speed and agility, we were able to go from contract signing.
Two being live in production with a remote we hired and trained team within 30 days, we are thrilled to welcome another new client to our software and SaaS vertical and look forward to supporting their ambitious growth objective.
And another third quarter success, we were very pleased to extend and expand our multiyear partnership with click a provider of an end to end real time data integration and analytics cloud platform.
It's 2016, we've played an integral role in supporting clicks customer growth and retention initiatives. We have managed to holistic global program across a variety of customer success motion to allow flick to achieve a more predictable and on time renewal rate. In addition, our partner.
Ship has driven continuous innovation promoting deeper customer insights and higher end user satisfaction.
It is this consistent performance co innovation mindset and strong partnership alignment that allowed us to renew our agreement with click for another three year term.
We're thankful for their ongoing partnership and are excited to continue to deliver results that will accelerate their strong momentum.
The last story Im going to share is evidence of our land and expand strategy and our ability to grow with our installed based clients. In this case, we already managed and then.
Approximately $1.5 billion of annual revenue for one of our clients through a large scale global renewals management program.
This cloud and software company has experienced strong organic growth rates and they have further complemented there.
Their growth with strategic acquisitions, given our multi year relationship and consistently strong performance in their core business. This client turned to us to launch a new program for one of their recent acquisitions, a cyber security company growing in excess of 30% annually.
We designed and implemented a solution and launched a remote team of professionals that went live within weeks across North America, Europe and Asia.
Our client can now focus their internal resources aren't larger enterprise deals knowing that they have a trusted partner in service source to enhance the renewal rate and lifetime value of the acquired company small and mid sized customers.
These wins and expansions highlight how we are well positioned to address a variety of client business challenges looking forward, we can't speculate on how the pandemic will play out or exactly when the economy will return to a more normalized environment. However, fixed.
Stories like the ones I shared and viewpoints from third party expert underpin our conviction that our strategy solutions and capabilities are strongly aligned to current and emerging market opportunities.
Before I turn the call over to rich to cover our financial results.
I want to personally convey my heartfelt, thanks, and appreciation to him for a job well done as we announced yesterday afternoon.
Rich has decided to step down as CFO and as of November Onest will pass the baton to Childline with many of you know personally and who is on the call with us today.
Two years ago rents excepted to requests from our board that fill the vacancy in the CFO C.
Since that time, he's been a trusted business partner and a tremendous asset to the company together with other members of my leadership team, we moved some heavy rocks and strengthen the business and made important strides on our long term transformation rich it's been a great pleasure having you at.
Hi side for these two years and I am thrilled that you will continue to be involved as a board member.
With that let's turn to the financials.
Thank you for the kind words, Gary and good day to everyone before.
Before I jump into the financials, let me just share some thoughts on the transition to Chad.
Though I will be leaving my day to day role with Servicesource My conviction in the company's strategy and my commitment to its success have never been stronger.
As I began contemplating possible changes that would allow me to spend more time with my wife and pursue some other areas of interest I took great comfort knowing that we already had a robust board reviewed succession plan in place.
Chad brings more than two decades of broad based finance experience and more than four years as an executive leader at Servicesource, including the last two where I've had the pleasure of working closely with him on many key initiatives.
I have no doubt that Chad is the right person to now take the reins and I'm delighted that our world class Finance and accounting organization will be led by someone with his character and expertise.
As Gary covered in his opening remarks, we saw ongoing progress financially and operationally in the third quarter like other companies in the technology industry, our expectations entering the year has been time shifted out by several quarters due to covert nineteens global impact.
In Oldham, although the markets and clients. We serve are not out of the woods yet in terms of the challenges posed by the pandemic on balance we do see more encouraging signs compared to when we last spoke with you on our second quarter call.
Turning to our topline results in the third quarter, we generated revenue of 45.8 million down $7.6 million or 14.2% year over year more.
More than 70% of this year over year contraction is tied to churned or proactively rationalized accounts.
As we continue to roll this revenue off the overhang will persist for a while until we lap the tougher compare.
Looking at our largest clients over a multi quarter horizon, we had revenue growth with four of our top 10 logos on a trailing 12 month basis, we continue to face pressure from a large client we mentioned on our August call, who is adapting to some market challenges that causes it to weigh on.
On our overall results excluding their impact we had trailing 12 month revenue growth of nearly 5% across the other nine largest clients and on the retention front year to date through Q3, we renewed or extended approximately 87% of the.
Contract value that was up for renewal.
Shifting to cost of revenue and gross profit.
Our non-GAAP cost of revenue was 31.7 million.
Favorably down 5 million or 13.6% year over year.
We prudently managed our capacity in line with our revenue trends, while ensuring we continue to invest in client growth areas and new logos ramps.
Average head count in the quarter was down more than 15% year over year and our revenue per employee metric was up modestly.
Non-GAAP gross profit margins of 30.8% of revenue were down approximately 50 basis points year over year, but were up approximately 60 basis points sequentially compared to Q2, despite a lower revenue base.
Continuing to walk down the TNL non-GAAP operating expenses of 15.8 million were favorably down $1.5 million or 8%, 8.6% year over year.
We continued to reduce or reallocate spin from lower return areas to allow us to focus our investments on areas of opportunity that aligned to our strategic priorities and long term growth objectives.
The bottom line adjusted EBITDA was negative $200000 down approximately 1.3 million year over year, but slightly improved sequentially from our Q2 results.
Turning to the balance sheet and cash flow highlights we.
We had very strong execution in the quarter and bolstered an already solid balance sheet.
Dsos came in at a record low of 66 days, a reduction of eight days year over year and.
And down even more impressive 10 days sequentially from Q2.
Cash flow from operations in Q3 was positive at $5.9 million up markedly from $500000 in the same period last year.
Combined with the $600000 year over year reduction in Capex inclusive of capitalized internally developed software we generated positive free cash flow of 3.4 million in Q3 compared to negative free cash flow of $2.6 million in the year ago.
Period.
With our improvements in free cash flow, we took the opportunity to reduce the amount outstanding on our revolving line of credit by $5 million.
With 15 million outstanding on the line and a cash balance, including cash equivalents and restricted cash of $41.5 million. We ended Q3 with a net cash position of 26.5 million an increase of 3.3 million from Q2.
Before I hand, the call back to Gary.
I would just like to share my appreciation to all the employees at service source that I've had the pleasure of working with for the past two years.
That has been an incredibly rewarding and meaningful period in my career.
Although a lot has been accomplished I look forward to the progress that will be made in the quarters and years to come.
And with this being my last call I'd be remiss to not think the stock holders on the phone with US who have supported our ongoing transformation journey.
Gary back over to you.
Thank you for that rich in summary, we continue to perform and execute well admits.
What remains a challenging macro economic environment, we are making important strides to strengthen our financial profile. While also investing wisely for the future. We are winning in the market with new clients, while also delivering compelling value and securing expansions with many of our exists.
Shifting client.
And we are committed to making near term progress throughout the business, while keeping a sharp focus on our longer term opportunity and objectives.
With that operator, please open the call for questions.
Thank you.
Ladies and gentlemen, as a reminder to ask the question I need to press Star then one on your telephone.
To withdraw your question press the pound key.
Again at Star one to ask the question. Please.
Please stand by while we compile the culinary roster.
Our first question comes from a lot of Josh Vogel with Sidoti Your line is open.
Thank you good morning, everyone I have a couple of questions here, but before doing so rich I would like to wish you. Good luck on your future endeavors and Chad congratulations on the transition to CFO.
But first question, you've always had a pretty impressive renewal rates and 87% to certainly impressive in this environment.
Im curious about the other 13%.
That wasn't renewed it.
Whether it's a it was churned or I'm just curious if in some cases decisions are being delayed given the macro environment.
Yes, Hey, Josh. Thank you for that this is Gary.
So the actually year over year that churn has improved pretty significantly and.
Most of the churn that we see are are some some tail off from prior quarters, but.
In the quarter.
From a revenue point of view, but the churn within the quarter was primarily driven by one of the large clients. We have that we've mentioned before that that continues to do.
Some shifting based on their own.
Priorities and transformation that are trying to do so we're trying to get back into that sweet spot is applied to 15%, we're making progress there but.
Again.
Some degree code, it's not helping that because people are trying to protect their own internal team more than what they had before so it just means we had to sell harder relative to the ROI that we can deliver and deliver.
Hopefully that helps Josh yes. It does thank you and.
And John John Appreciate the question and just offer a little more commentary to what what Gary mentioned, if you look back in terms of where we were last year Q.
Q3 year to date, we're at about a 75% renewal and retention rate. So do feel good about the progress here Q3 year to date this year being in the 87% and again you do see good progress. Despite the challenges of Covidien. We did talk about the the click renewal of the three year renewal that we were able to secure in Q3, so are delivering value to the cloud.
Science.
And do you have a good focus on that we'll continue to drive that focused on through the balance of the year.
All right I appreciate the insights there guys.
Looking at some operating expenses, you've done a decent job and caring sales and marketing.
When I look at GSK, it's been fairly stable I would say about 10 million a quarter and I'm curious about where you've been coating on the GNS line as your presentation mentioned you've reallocated.
It's been the reallocation of spend from lower return areas in America am I right to assume that that's being offset by investments in perhaps like the virtual first operating model.
Yes, I can go ahead and take that one as well. So you know we are pleased with some of the progress that we continue to make not just in this quarter, but over a multiyear horizon throughout our operating expenses again. This year, we're down about a million and a half year over year and even on a sequential basis down about point $6 million.
On a non-GAAP basis compared to where we were Q2.
Clear, we're not cutting for the sake of cutting it is about reprioritizing spend to higher return areas. You mentioned the virtual first operating model. So continuing into two invest there to make sure that we've got the technology and capabilities to recruit to train to deliver and enable people to work in a 100% work from home environment on stuff's been going well with 100% of our.
Workforce delivering in that model since since mid to late late March and are continuing to see progress. There. If you look back from from that time from when the pandemic was declared we've recruited hired and trained and Onboarded in equipped so.
Several hundred people item or 300 people since that timeframe to deliver results for our clients and continue to see great productivity. Our clients are pleased with the results so to be a key part of our operating model going forward in terms of where weve rebalanced some of that that spend out of its got to be areas weren't driving return just that we see greater opportunity to continue.
Investments in our marketing initiatives some of our strict strategic licensing partnership ecosystem and other things, where we again, we're pointing towards that longer term target model target model opportunity, where we see greater greater value being created down the road.
Josh It's rich deep you only investment Weve made per se in the virtual first model is a little capex, we're refreshing our laptop in enhancing our mobility environment to support the virtual first.
If you kind of work through that and that's for the year maybe.
A million dollars that would already have been part of our.
IP infrastructure refresh anyway.
I think the real important thing to keep in mind is as we continue on news and as we get into mid to longer term that operating model is going to have more opportunity in the form of physical facilities and infrastructure that we have.
His occupied historically and that takes time to move out of those leases or sublet space, but that's currently in the piano and will change overtime.
I appreciate the insights there as well guys.
You had a pretty a pretty strong quarter, you're generating free cash flow.
Kind of a two prong question I'm curious if you. If there is any government stimulus plans you are interested in that help at all there and then.
Can you just talk a little bit about your capital allocation strategy today.
Yes, I'll take that one and then Richard Verdi. Please jump in as well so really pleased to take strong execution throughout the business from a Rev. Rec teams to our client engagement team the global account managers et cetera. So we're really pleased just with the progress that we've made from eight dsos standpoint.
Dsos this quarter were 66 days down from 76 in in Q2 revenue.
We would have eight days year over year, So continued focus and rigor around that and expect to continue that to drive great results. There because the impact that it does have to your point on free cash flow this quarter being positive 3.4 million.
I feel really good about the cash flow performance about the balance sheet, the health and strength of the balance sheet.
As of 930, we had about $53 million liquidity. So feel good about where were positioned from from that standpoint, I think the other part of your question was in respect to to government stimulus. So within that most of our markets. No. We did not participate in any of the stimulus that was related to the pandemic specifically, we did have a small.
Grant it's disclosed in our Q with respect to Singapore, where they had been incenting companies. It's part of the pandemic response to maintain employment.
As the.
The area went into locked down and so we did have a bit of a benefit a year to date through that through that stimulus.
Got to carry forward for the next quarter quarter two.
Thank you Chad I actually.
Yes, you did mentioned the Dsos and it's a pretty impressive improvement year over year.
I'm just curious is some of that timing are you just seeing more favorable payment terms because.
Other companies in this environment, there being more lenient to their clients. So I'm surprised to see such a year to year improvement.
Hey, Josh this is Gary.
Chad rich jump in but I think the work that's been done over the last year and a half that that rich mentioned that Chad just now underscored is driving a lot of that we become.
Rich we call it a real machine relative to everyone in the company focused on this.
Gary we started entity.
Almost two years ago now to really improve that have discipline and I think everyone understands how important.
Revenue in that number down is so.
With that I don't believe that we have done anything other than negotiate and try to hold firm on what we what we'd like to see in our new contracts relative to payment terms.
Chat or rich you want to add anything.
No you covered it Gary.
Alright, great and then if I could just sneak in one more I. Appreciate you taking all my questions kind of a general business question.
Just curious you know who you sell mostly to at a client is it is it a company executive or is it usually someone under them and has just shifted at all during the pandemic with maybe executives wanting to.
There has more involved in making these decisions and working with the partners such as yourself, just just any general commentary that.
Yes, so again Gus this is Gary I think.
We sell to as many people within the company as we have to typically that involves if there is a cheap.
Customer officer Weve.
We partner very closely with the head of sales.
Sometimes at the same person, but sometimes it's two different people.
We act as an extension of the of the sales team. So the sales leadership within companies.
Typically.
The people that we go after to show our value proposition to ensure them, where they are at and how we can improve that.
But the relationships that we try to drive start.
At the CEO level and down because it's a big big thing that clients are our clients are giving to us to do and thats to manage their customers and so you need those multiple relationships that the selling goes to the business owner as well as the.
Sales.
Great well, thank you guys taking my questions.
Thank you you're welcome.
As a reminder, ladies and gentlemen that star one to ask the question.
Our next question comes from the line of Jim Kennedy with Marathon capital. Your line is open.
Hi, guys.
Yes.
Congratulations on the good operational progress and congratulations Chad and rich.
Just wanted to start with fewer new logo, you said, it's in the health and fitness category.
Is that the first time, you've had a client in this area and what drove that decision. What what are they can you tell us a little bit about what they were doing and what they want to accomplish by bringing you won and is that logo now a top 10 logo for it.
So thanks, Jim This is Gary.
It's not a top 10 logo, yet, but it has the potential to get there over time.
And Thats part of our strategy.
It it.
The company provide software and cloud based solutions is to think about it as club management and billing for Jim's health clubs and fitness studios.
They are a a PE backed from.
They have.
15000, plus customers. So they have a broad base of client or customers.
It's a single year contract. It is live as we mentioned during the call and.
It's.
I think our what we're doing there is providing digital sales services converting the marketing qualified leads and converting them to sales qualified leads and then converting those leads.
Closing the sale so the very front end of what we do and I think that gives us an opportunity.
As we perform and get this ramped up to to expand our opportunity there Jim.
Gary what convinced them to choose you versus what they were doing are you saw implementing an internal marketing sales effort organization well, what we're doing is working very well and therefore, we're going to turn it over to you for year.
No I think I think cove. It had some impact we were talking to them before covis.
And obviously coated.
Slowed things down a bit but I think as time went on and we didnt give up on this I think we were able to demonstrate that that given the pressures. They are under we can actually help accelerate.
Converting finding and qualifying and closing.
Additional business form so it's a value add in my opinion.
That that they said, okay, you guys can help us here.
Supplement what we are doing so it's a it's a true partnership from that perspective, it's early days, but I believe I believe fully that as time goes on they will can.
Well their services are now.
Really aimed at.
A wide market here I think.
Im recalling this numbers on top of my head, but like a 78 billion dollar market.
So people don't understand typically how big that market isn't and I believe it is the first time, we've signed a health and fitness.
Software company so.
We're excited about it and we've got the 81 it.
In terms of your virtual first operating model.
What percentage of your employees are actually back in a call center globally now or are they still at home or.
Mix looks like today.
Yes, so a 100% are still at home we have.
People that go into an office every once in a while we are in.
In the middle of making our plans relative to.
You know that the work from home, but a virtual first is here to stay that's not going to change.
Given the recent spike not just in the U.S., but in other countries, where we have offices.
We don't see putting people back in the office until probably after Q1 or Q2 of next year, we'll make that final decision based on a lot of factors not the least of which is vaccine, but we do have a plan.
That allow new teams have come together to create some work spaces, where we can have social distancing the.
The clean and all the things that go with that and we've had.
You know the team that we put in place.
About seven months ago, a continuing to look at that we talk to our employees a lot of a number of employees who.
And function from home, we have a number of employees, who you know.
Just given where they are at and where they live would prefer to be able to go back into an office when it's safe to do so but our priority right now continues to be the health and safety of our employees, making sure that we can deliver for our clients and we are doing things the mechanism easy as possible and to.
Support our employees are working from home.
Good idea.
Read into that to potentially next year or maybe in 2022 that some of your leases, maybe potentially may not need to be renewed or maybe a smaller footprint.
Yes, I think you can you can read into that and Richard.
Rich just talked about it before I don't I don't know that we will get into specifics here, but but we have identified and have already made some changes we've we've.
Sublet.
Two two.
Two pieces of property if you will.
We have reduced the number of floors in a couple of locations, where we had the ability to do that based on those leases coming up and we have laid out.
Within that actual several several years, what our plan would be relative to that and again as we understand better how.
How much space, we need host coded.
We'll continue to make that optimization of the facilities.
Original whether you want to add anything to that or not Jim its rich I.
I made the point that Gary alluded to even before Cove. It I think we had put in motion to a very deep inspection of our operating in delivery model.
Looking really at the global footprint.
As we came into the cobot environment and were quickly able to transition 100% remote.
It's become a pronounced catalyst to accelerating that that migration and remain optimistic and as you alluded to some of them are contractually bound by the terms of the leases others.
We can be more vigilant in the continuum ranges from lease expiration to possibly subletting.
To possibly negotiating a fair and equitable.
Transition so we're exploring all of those and we'll continue to do so.
Great Great and then just following up on the last call or in terms of Greig.
Great job on the free cash flow.
Can you speak to see free cash flow or your net cash position relative to seasonality was there anything unusual in this quarter.
And how how should we look at that.
Say for the next four quarters is there seasonality in your ability to generate that cash.
Yes, Hey, Jim Thanks for the thanks for the question here. This is Chad I know from a from a revenue standpoint, theres clearly seasonality in the business, you know, where I, where Q4 does tend to be one of our strongest quarters generally, but specifically to your question in terms of the cash flow so nothing abnormal that.
What really drove the benefit this quarter other than the the rigor and the focus that Gary and rich and I mentioned mentioned previously and it's all about the teams in the hopes that they apply to make sure that we're getting the the invoices and the reconciliations in the book engine for small that kind of stuff out in a timely timely manner and orderly fashion to the declines campaign with.
In the within the terms or ship sooner than that.
With the terms of our contracts so just a lot of.
Lot of vigilance throughout the organization nothing we're focused on doing what we can to maintain that not going to guide or say, whether we can maintain the 66 days going forward, but are clearly focused on it throughout the business.
From a capex standpoint, there is some seasonality there on a quarter to quarter basis Rich mentioned some of the capex that we incurred to deploy some of the the updated laptops.
To enable the virtual first operating model, but again not significant or material you think about Q3 relative to any other quarters.
Got you very good.
Just switching gears real quickly over into kind of some growth initiatives.
Larry we're coming up on I guess, the beginning of somewhere next year or the beginning of year, three and industry position I know the first year or so as you. As you said you had to move a lot of rocks lot of heavy lifting.
What is the current pipeline look like.
In general.
I think in general my answer would be.
The pipeline is a lot healthier than it was.
A couple of years CECO, Bob Gwin, when we started the transformation work that were doing relative to 2019 I think.
The.
Okay.
Talk about what's in the pipeline from a.
Ah named client base or potential client base.
And I always say, it's never fully now, but I will tell you that the discipline, we have relative to what's in the pipeline and measuring that every week.
And sometimes more often than every week, but I set through the weekly reviews.
The senior team we also.
Accelerate those things we've got a lot of work relative to.
Driving virtual our ability to do virtual edc's.
And really put together some.
At some events, we mentioned I mentioned the benefits that we hosted over a dozen current and potential clients Denzel and I hosted in a couple of weeks ago, we actually had to clients that led the panel discussion and talked about the importance of the full customer journey experienced.
And why it that starts on the very front end of that with the very first part of the of the sales.
Cycle, where you're actually closing business to really enhance our ability.
Our clients ability to to get those results I think in terms of.
As I look at the pipeline.
Closing.
The business that we do we closed new logo in Q1, we close to in Q2, and we're close to another one in Q3.
And compare that the last year, we had through the total for the year, but.
Other thing and we're really focused here and the investments we've made with global account managers.
And the executive sponsors then the quarterly business reviews is really driving some wins within our installed base. So we continued to see the right focus.
Relative to last year's a reorganization.
Ramping some new hires the marketing.
We brought in some people.
Some new sales leaders as well as beefed up the marketing team as well as move some people.
Ends of sales from other parts of our business to really strengthen that so.
Most companies were adapting and navigating the covid related stuff and dealing with that as it comes up but.
It's never over until it's over and I think that that when that we mentioned as one where they had pulled back and said you know just giving covid, we're not going to do anything for awhile and we kept after it and that's the attitude here now everybody sales customers for life and just.
Driving the top line.
Most important thing we can do from a from a company point of view is to figure out how to grow in this environment how to continue to provide value to our clients and keep the clients that we haven't grow that.
Contrary, given given all of that Gary.
Do you think that the pipeline is more robust going into 21 than it was going into 20.
I think it's.
It's clear to me when we went into came in that <unk>, we had.
Made a lot of progress on the pipeline.
What we didn't anticipate was some of those would pull back because the covid.
Some of them would.
Actually get consolidated and some of them would just take longer to get close. So I think we're we're out today.
Still a concern covid is still.
Jim You know me well enough to know that I don't I don't use anything as a crutch, we have to figure out how to win and how to drive this but covid keeps throw in different things out there.
That make.
Make some of our.
Prospects want to hold back and take longer to close so as.
As rich mentioned in his his conversations or his hips opening today, we've seen some stuck time shift, but we're not given up on it.
Tell you that I'm very happy with a couple of months.
A much larger.
Opportunities that we haven't Highflying and we're really focused on trying to get those closed.
Equity.
As we go into next year.
Okay that last one for me guys and I'll, let you know.
In terms of the the whole sales force IRG health.
Do you have anybody live at this point, we in some trials with folks can you comment at all on on that effort.
Yeah. So.
We've invested in a team of about a half a dozen people to build and drive alliances and partnerships.
Think we can.
Can ultimately drive.
It's going to be something not not this next year necessarily but but.
My hope and my the planning here would be that eventually this could grow into film work close to 10% of our total revenue so.
I haven't given up on it.
We're still in the early days and candidly the progress as I've said to you before.
Where I'd like to see it but.
The.
Team is really focused here I think as we look at the alliances in the ecosystem we're building.
That's that's really.
Taking hold and it's a force multiplier two or go to market strategy, it's really going to help us.
Have better reach and a stronger portfolio.
From some of the solution partnerships were gone so we have the alliances protect.
Particularly around the Salesforce, one that that we call organizational health management.
We do have.
And transition some of those early pilots, but they're not really big enough Jim to to talk about when we get when we get the first big one.
I will not told the team I will talk about it.
Because I think once we get the first big one and really can demonstrate the solution in a partnership that we have with sales force and their partners.
That will be.
A thing that could open up a lot of acceleration but.
This point, we don't have it.
We have signed it to add onto that a number of partnerships.
And they're solid partnerships companies like clever bridge, an asset gracq data actual and and we're working on joining account planning I said three one.
Probably two weeks ago with one of these partners with their head of sales with our head of alliances and denzel.
And we've come up with.
Think a pretty good way of looking at how we can work better together and accelerates these things, but it's taken time and.
Certainly taken more time that I would be happy with normally but there have been some some.
Things like Covid, it has slowed things down as well well it sounds it sounds like the groundwork as a foundation as being late so that's good okay guys. Thanks for your time today.
You bet. Thanks, Jim.
I'm not I'm not sure if there's other questions and how much time, we have but.
Let's go ahead on any further questions.
Okay, Alright to wanted to thank you and let me just close out with everyone. That's still look on the call.
We feel.
As I mentioned very confident.
That we're on the right track that we're still in a very.
Big market opportunity.
Certainly the the.
Co Big impact has slowed things down, but we still believe that that.
I'm more confident and I'll, just say it that way I'm more confident now that even in the face of some of the revenue headwind in the compare for this quarter we are driving.
The right areas in the right areas of investment and.
Taking care of our people and our clients so that at some point will translate into the kind of growth that.
All of US are looking for in the value of the company so with that.
All closed up the call. Thank you.
Thank you.
Close today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
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