Q4 2020 Docebo Inc Earnings Call
Good morning, everyone and welcome to the del Cable, Inc. Fourth quarter 'twenty 'twenty earnings call.
All participants are currently in a listen only mode.
Following the presentation, we will open the line for a question and answer session for analysts.
Instructions will be provided at that time for research analysts to ask questions.
We ask that analysts please limit themselves to two questions and return to the queue for any follow ups.
I would now like to turn the call over to Doug <unk> Investor Relations Dennis Fung. Please go ahead Dennis.
Thank you operator before we begin the table would like to remind listeners that certain information discussed today may be.
Forward looking in nature.
Such forward looking information reflects the company's views with respect to future events.
Any such information is subject to risks uncertainties and assumptions that could cause actual results to differ materially from those projected in the forward looking statements.
For more information on the risks uncertainties and assumptions related to forward looking statements. Please refer to you to achieve those public filings, which are available on SEDAR and on Edgar.
During the call, we will reference certain non <unk> financial measures.
Although we believe that these measures provide useful supplemental information about our financial performance.
They're not recognized measures and do not have standardized meanings under Ifr S.
Please see our MD&A for additional information regarding our non <unk> financial measures.
For reconciliations to the nearest ifr S measures.
Please note that unless otherwise stated all references to any financial figures are in U S dollars.
Now I'd like to turn the call over to Don Cheadle CEO Claudio Airbus.
Okay.
Does that mean.
And good morning to everyone and thank you for joining us on our fourth quarter earnings call with me today is our chief financial Officer, and others have bought.
Well, what cheaper every wall concerned, although the bulkier manner and Amy well many challenges.
All work out and the global economy, but won't be airplane doesn't marriage that did you you don't pull me for training these accelerating at Arlington.
The Crazy Guy. So I'm wondering why are you calling for it if you know what I mean program you'd be alibi, which manage training daily body debate of the stable I'm asking what we showed at the end.
One of the premium solution on the market.
In the third quarter, we continued to see strong momentum across our business.
We also gained than they used to break out a new logo.
Yeah.
This was driven by broad base of demand as we are the one before.
Before menu gossip man from the third quarter of 'twenty plenty and the end of the fourth quarter 2179 got summit.
Tom's going to ban you grew both quarter over quarter and year, it'll vary up to $34000 and yes. It has gone through a bedroom for Newcastle matters in the fourth quarter was over 40000 dollar. In addition in the fourth quarter approximately 80.
Yeah, Yeah well.
Northern Gossamer expansion by you were far more E. M C L showing the data that's in there I mean is it.
What I'll walk out somewhat.
Got to let them fight them and train them get he's one of our favorite He's got somebody you gave me, but we are also winning a lot of numbers are we setting up training.
So at some point in the fourth quarter, where.
We the NBC universal media and you'd be salt M.
NBC Universal American media and entertainment conglomerate, well these oh, vanilla math that will simply and especially with our board, but they are reporting requirement. They storybook tables to ground damage that was done on waste money they get on training courses and badly and to provide them with a dynamic learning.
Oh, that's nice to me between the Bel brazing requirement.
You'll be felt the price basis video gaming company with more than 18000 employees.
These deals around the world that has it begun to create a learning environment.
This allows Arkansas consistent killinger, who highly qualified team did you start experiencing no vertical sunny days. They are trained and getting married a compliance requirement that you'll be stopped buying and we've been stable introducing social learning and collaborative element with a global workforce and providing them.
With exciting new learning opportunity.
No one has been a land and expand and in the fourth point that when we signed with cosmetics based agreement with the physical and the hard to talk.
Cisco has been is if you look out another 50018, when they acquire a broad scope.
Global voice over IP and unified communication provider, that's begun using the table I'm asking 2016. Please go ahead with paying for expanded adoption of off the table.
There most of that I assume that the diesel all the way back in the fourth quarter it'll probably play.
Or there's no foundation, we began using the second quarter of 2020.
What do we provide the reuse of the tablecloth or no money to support this but anything else. There. During this time of remote working pretty good by Covid in Q4 up there I think that if they buy it all what I'm learning platform. They've also shown findings with the cable and telephone day learning.
Experienced through the organization.
And third as possible in all of our growth is all all OEM business, which continues to outperform and there has been the largest single contributor where you are sounding like walk there.
What was the game Oh, yeah. The revenue increases at all if at all this quarter both in absolute dollars and there's a bit of friends, but no. One thought does it show up in here. These are I mean embedded in Charlotte Charlotte, We're all and we have an active pipeline of OEM opportunities that we hope to convert.
<unk>.
All in all of the best debate has been on the back of the train one core product the table on that.
Yeah, we have spent the ballgame does that triple class.
He left for Vishal you solved the looming challenge is the old thumb.
Of the largest and most progressive companies in the world.
But today in order to take advantage of the demise of the learning.
I wanted to cancel them as need to turn to multiple bands with yellow matters being job. One piece of this will ensure our customers are looking for solutions to address the golden creation measure learning effectiveness and drive insights from learning going on all.
All the while the core LMS by no means the Liberty also continues to evolve. It is all along that that would be on the table to be able to provide you got somebody within a single coherent blocks Baltimore.
The old days of solution and he hasn't really working toward achieving these goals or the path.
Well I'm very happy to be able to tell you that we have started to pick out a perfect. Maybe go along this journey. We have started with very simple out of nursing impostor, they're learning effectiveness tool, which we are required by other formations as well.
Okay.
This will be far more later in the year, but did you book shape, our AI based content creation tool.
Other tools and features are expected to fall Lloyd's Barry's point over the next 18 months.
Of course, we look forward to being able to cross sell new products to our existing LMS calculus, but many of them as a standalone product that will be also be made available to gossamer using our platforms.
Platforms in the coming months, we will be sharing more with you on our long term vision and upcoming bra that allows users to claims. Thank you.
Lastly, I want to touch on our activities since our IPO in December when we raise of the process.
155 million units.
Oh are you I really think it has been another great milestone in just your own progression as the leading player in global investing.
And does that apply to raise our profile with prospective customers and employees. We are actually ask the investment talent to the organization and he's embankment is a key focus for our leadership team as we put a part of those J before the next one I'm gonna amazingly of revenues growing beyond.
In line with your thinking I wanted to take a minimum a moment to welcome right. What are you supposed to Mcdonald's the change wasn't independent data I saw further increasing the diversity and experience for our board.
Currently the Chief product officer at the global Cloud banking leader Encino, and we look forward to thrive.
Drawing down.
And wealth of knowledge in software as a service finance that says this is technology as we continue on our go John.
Somebody just trends are all complement pipeline upcoming your product then that's fine.
We can provide with our industry has increased our confidence as we enter plenty plenty. One will consist of little guys. They are wrote over 50% in 'twenty, but I mean, why is that I used in your adjusted EBITDA breakeven with any of our financial performance.
Can you spell out the real ballpark with growing publicly traded company.
But with that I will now pass the call too young to speak to that playing out.
Okay.
Thank you Claudio and good morning, everyone.
As usual I'll remind everyone that you can find a detailed breakdown of our financial results for the three months ended December 31st 2020 in our press release, our MD&A and financial statements, which are now made available on our website and have also been filed on SEDAR and Edgar.
We also have a slide deck accompanying our earnings call discussion that was made available on our Investor <unk> Investor Relations website. This morning for those who want to follow along and I'm going to start my remarks with slide four.
As most of you are aware in January 'twenty 'twenty, one in cooperation with the major shareholder Don Chappel facilitated a secondary offering on the NASDAQ exchange in conjunction with the offering we released early guidance results for the fourth quarter for 2020 for several key metrics, including.
Revenue a R R and average contract value or a C D.
The ranges provided or 18.25 to $18 75 million core revenue $73 million to $74 million for a R. R and 33.5 to $33 95000 for a C D.
Today I am pleased that we were able to report final results either close to or above the high end of each of these ranges.
Total revenue grew to $18 8 million, an increase of 53% from the prior year.
Scripture and revenues grew 49% from the prior year period, and were $16 7 million or nearly 89% of total revenue for the quarter.
Professional services revenue in the fourth quarter was $2 million, an increase of 94% from the prior year.
A R. R is the driver behind subscription revenue growth and we're reporting 74 million and they are already ended the fourth quarter, an increase of 57% from the $47 2 million and they are are that we reported at the end of the fourth quarter of 2019.
Of particular note the growth in E. R are the fourth quarter was broadly based there were no large outlying deals to skew the results either to the good or bad.
When compared to the third quarter of 2020, the 9.4 million increase in a R. R represented a new high what a new high watermark for Don Chappel.
In considering this performance, it's worth emphasizing that our a R. Our growth.
Is all truly organic and does not reflect the benefit of any M&A as the revenue from core mattress is not currently categorized as a R. R.
Professional services revenue increased substantially period to period.
Unlike subscription revenue, which is highly predictable professional services revenue can vary significantly even between what would otherwise be highly comparable contracts in the near to medium term. We expect our professional services revenue will continue to represent approximately 7% to 8% of total Rev.
Revenue.
We had 2179 customers at the end of the fourth quarter, and our average contract value or <unk> increased to approximately 34000 up.
24% from the 27000 at the end of the fourth quarter last year.
Historically, we have reported net dollar retention rate or N D. R. R, that's being greater than 100%.
This year, we're providing a more precise net dollar retention rate with our 2020 year end reporting and we will continue to provide N D. R. R annually on this basis going forward.
N D. R. R measures the relative increase or decrease in revenue from our consistent cohort of customers period to period and provides insight into the net effect of upsells and churn and an underlying portfolio of customers.
In 2020 and D. R. R was 108%, which compares favorably to the 105% which was actually realized in 2019.
We are particularly pleased by the year over year improvement in this metric in the context of the pandemic that we experienced during the year and.
And the consequential higher rates of churn, which have now.
Now been normalized.
Okay.
This slide shows gross profit for the fourth quarter as a percentage of revenue gross profit margin was 84, 1% of sales an increase from 81, 2% of sales in the prior year.
Gross margin this quarter benefited from lower fees with our hosting provider.
And while we will continuously work with our providers to further optimize this agreement our long term expectation for gross margin as it is for it to normalize in the 82% to 85% range.
On slide six you can see a summary of our operating expense lines total operating expenses for the fourth quarter increased to $19 9 million as compared to $13 1 million for the prior year.
Included in the $19 9 million, there's a foreign exchange loss of $3 4 million, which relates primarily to the cash held on our balance sheet at year end and is therefore for the most part unrealized.
Operating costs, excluding this loss were $16 5 million and compared to the $13 4 million in operating costs also excluding foreign exchange impacts that we reported in the third quarter of 2020.
The primary drivers of the increase in operating expenses from the third quarter were higher G&A and sales and marketing expenses.
G&A expense growth came as a result of higher salaries benefits and recruitment fees in support of our growing operations as well as the increased cost of compliance associated with our NASDAQ listing.
Including increased accounting legal and directors and officers insurance expenses.
On a go forward basis, we estimate our U S listing will add approximately 5 million of annual recurring costs as compared to only being listed on the T. S X.
D&O insurance is the principal component of this increase.
Sales and marketing expense increased on an absolute dollar basis from $5 8 million to $6 5 million in the quarter, but declined as a percentage of revenue to 34, 4%.
As compared to the 36% for the third quarter of 2020.
To some extent, we're playing catch up on personnel investments, we had postponed earlier in the year. So we expect sales and marketing expense as a percentage of revenue to continue to increase both absolutely as well as a percent of revenue in the near term.
Our medium term expectation for sales and marketing expense as a percentage of total revenue continues to be in the 35% to 45% range and it will remain there for so long as our growth trajectory continues at or close to its current level.
We.
Adjusted EBITDA of 0.5 million for the fourth quarter of 2020 compared to a loss of 1 million in the prior year. We also reported a net loss of $3 7 million for.
For the quarter as compared to $3 3 million net loss for the prior year.
As already noted the net loss for the fourth quarter reflects a $3 4 million foreign exchange loss.
In the fourth quarter, we generated positive free cash flow of $6 5 million.
Driven by 7 million and positive cash flow from operations largely as a result of our strong performance in the accounts receivable collection.
Our balance sheet today is very healthy given our free cash flow profile and the proceeds we realized from recent equity financing.
With an additional 155 million in net proceeds from the U S. IPO in December cash at the end of the fourth quarter was approximately $220 million and we carry no debt.
In 2020, one our focus will be to invest to maximize organic revenue growth and it will continue to be such so long as our LTV to CAC remains attractive as we believe this was the best use of our capital.
We will continue to look at M&A opportunistically to advance our objective to offer a complete suite of learning products and provide more cross sell opportunities.
Although this may mean expense growth accelerating faster than revenue growth in the near term.
We believe it sets the stage for higher growth and profitability over the longer term.
With that I'll turn it over to the operator now to take some questions from the analysts.
Thank you ladies and gentlemen, we will now take questions from research analysts should you have a question. Please press the star followed by the one on your Touchtone phone you are here today, Tom prompt acknowledging our quest aspira.
As a reminder, please limit yourself to two questions and re queue for any follow ups.
First question comes from Robert Young at Canaccord. Please go ahead.
Hi, good morning.
Thanks for the disclosure on.
The retention, maybe I'd like to ask a question there the increase.
From 105% to 108% you already highlighted.
Thanks.
Sure.
Beginning of the year, which is expected to be higher and it's improved since then but I'd like to better understand the increase is it more driven by expansions of existing customers or is it driven by better churn.
Maybe you would have expected at the beginning of the year because it looks like that would have a pause.
<unk> significantly to get a an increased.
Retention.
Charlie can I have your speaking.
Before.
The answers to me and I just want to see Chow.
So how do you think can get.
Sure.
It was a combination of factors Rob.
We started implementing some better controls on churn and an internal processes on customer management.
In late 2019.
And it was fortuitous timing because obviously the the environment changed through 2020, so our ability to manage our customers has been improving.
That was coupled with a better performance on the on the up sell cross sell right.
It was it was both.
And so that's one of the areas that you've been investing in is the upsell.
Better support organization better ability to drive that land and expand and so would.
Would it be fair to say that you are.
Your performance there and expenses move forward significantly in 2020, and that's gonna stay as is the case here in 2020, we're just getting better.
Oh, Oh, I'll say, yes to that but probably best to have a less yield maybe talk a little bit about our performance on the upsell side.
A rather a good good morning.
We're pleased with seeing.
That.
Tactics and activities.
And retention improvement.
We're paying back or Youre right. When you say that there is focus on the expansion. We we continue to win department, so very large organizations and when that happens it leads itself to the possibility of continuing to win business within the same business or across.
So the ecosystem of those companies.
It is no secret that we have continued to invest in them are empowering. This engine upsell expansion engine, we think that even.
Even net of any new product that there is tremendous opportunity and as we continue to successfully.
Successfully launch.
Products like the Trimble urging games that opportunity increases even further so we think we're very well positioned to maintain high put a four months in India, our and I would just not to make a statement that he will be either or a shared related or upsell related because our.
So really what we're executing is improving both.
Alright, thank you.
One quick one on I think a quarter ago or two quarters ago, you highlighted Q ESR.
Expansion that was going to fall into Q1, I would just you didnt update anything on that in the release I was wondering if that's still something you expect to happen in Q1 and I'll pass the line.
Yes. It is.
Okay.
Thank you the next question.
Thank you. The next question comes from Stephanie price at CIBC. Please go ahead.
Hi, good morning.
I just wanted to follow up on Rob's question on the customer expansions, obviously, you've had some very strong wins, including Cisco this quarter in Walmart in the past I'm just curious about the sales process and how you kind of look to expand within these existing customers and whether you've ramped up that sales team at all.
Yes, Stephanie cloud just speaking.
Good to meet you and I will leave the honest.
Answer the question.
Yeah.
Stephanie Good morning, Great question, I could I could probably speak to you about this for the next 15 to 20 minutes, but I'll give you the short version of our strategy and upsell.
Number one.
Good up sell strategy starts with the happy customer base are number one effort is to continue to create products that lead them.
Our customers to adoption and happiness that that's really the foundation of any good upsell engine, having said that there's a there's really a companywide effort and I really mean that we are investing proportionally in empowering our professional services.
Organization.
Lament fostered him better what we're investing in our support organization to provide customers with the support they need to solve the issues at the right time that that creates the premises.
For the customer experience and account management team to continue winning business I understand that your question is on the sales motion so at a high level when we.
When we winning new customer in your organization.
There is a there's a team of account managers and customer experience specialists to support these customers. When we look at these customers. We we try and think what means the opportunity size across the customer and not only within the organization itself, but around the ecosystem of sister companies in such of these.
Customers and and we activate them you know I'll call. It development motions to understand what are the different buyer personas across the companies.
And I'd say you know, we like to say that every customer we land that there is another.
Six to eight buyers within the customers that we could reach out to them and we execute towards that at a high level. I think this is what you're asking Stefan easily satisfactory yeah no absolutely that's great color. Thank you.
And maybe a completely unrelated question just you're in form of trees I'm just curious about how the integration is growing going and how customers are responding to the expanded offering.
Yeah.
Claudio you're on mute.
Sorry.
Before answering the specific sort of maintenance question, Stephanie I wanted to reiterate what I'll anticipate does that mean the chamber.
As always the beam has been seeded lighting products company, where the product at.
Our main asset most of actually our sales organization over time and especially during the last year.
Came in a little strategic asset for the table and just announce it we can.
The new product to the market, let's say that the first product that can be sold at wawa customer, but also to new customers.
The Florida medical the matrix product and now they need maybe in which you believe.
And when we add the more.
The logic that.
Imagine that even in Italy, but you need an assessment tool.
The quality of the learning that you believe.
Can you believe that and using these data to leave.
It won't be giant.
Some part of the learning strategy that Darwin this even not back Steve.
Yes.
The real loss trends, although chamber in Boston.
Let's say that every new product, we are building and expect some news in the future.
Building that re leasing or selling the schools.
He built a.
So they're not only to the table and en masse users. Thus can be larger in size or their learning management system that can benefit from the learning.
So not at least also this document are not using the table nuomi modular system.
Okay, that's great color. Thanks, so much.
Yeah.
Thank you. The next question comes from Daniel Chan at TD. Please go ahead.
Hi, Good morning, just wanted to touch on the OEM sales those continued to be strong and you mentioned it was record performance can you provide any insight on how the attach rates of your partner solutions are going and any feedback youre getting from them.
I'm, sorry about the bad debt trends.
Great and then I will.
Let answer that saved I wanted to say that I'm very happy and excited on the technology. We have built for the OEM and the pipeline we have let's say.
I'm going to answer.
Good question.
Sure.
I mean, then we.
We've never commented on on our penetration within any particular Oems and I think that's probably.
The way we're gonna proceed in.
In the future so I can't respond to definitively.
I will say, though that to the extent that our OEM business is.
Is driven by HCM platforms, which I think it's fair to say that today.
It is.
The HCM are historically very strong in the fourth quarter and as a consequence.
A strong performance but.
Our strong performance in the courts in the fourth quarter was related to that.
[noise] Alessi L. A are there any others that general observations are there that are worth.
It's making.
With regards to.
Perfect.
With regards to the OEM performance.
With regards to Orient performance that's.
It's absolutely correct and I would reiterate what we have said in the past that the wall H C. M leads itself to being a primary target for us for the OEM relationships. We we've widen that connected to other sectors and other types of organizations that are showing interest, but you know that.
That's just.
Ah the protocols of the maturity of our OEM product itself, but with regard to the attachment rates, specifically I would I would confirm what you said yet.
Okay. That's helpful. And then maybe can you comment on the relative size of deals one from OEM.
Sales relative to your direct sales.
Unless you want.
Yeah.
Jan do you want to touch on that or.
My line was was that the question that you didn't come through clearly I apologize about that could you again I'll repeat it unless you're sure Jack.
The relative size of deals for OEM sales do do they how do they compare to sales made from your direct sales.
Yeah, Yeah well.
The nature of the sale of an OEM organization is at all.
Whereas a the nature of the sale of our direct team that is a is the primary product that is himself an ease at the most.
Music hunting and notable difference now when you look at add on sale.
Just like we as adults on our sides are the.
The beauty of it is that they.
They can be very powerful in sales execution or both segments.
And in the base so.
We like partnering with organizations.
It has a large installed base.
Because with proper execution of the upsell and sales expansion that base is very fertile territory for add on at the.
The average deal size is in.
In itself smaller.
And that depends also on the segment that they sell into.
Bought but the velocity of those deals that tends to be much faster and.
So in in a short and brief recap smaller deals.
As a part of an add on strategy.
Okay. That's very helpful. Thank you and then maybe related to deal size, you're HCV continues to grow.
Can you comment on whether that's volume driven or whether they are customers are taking a more modules and if it's the latter which modules have been very popular.
Yeah.
Yeah. So.
It's a it's a mix of both.
And and the reality is that we.
We continue to work with larger organizations yeah. That's that's a fact.
They're buying more products and modules that's a fact.
And and we're getting better at positioning.
Certain capabilities.
And winning business from and displacing the.
Our competitors are.
And that are very strong in the enterprise segment. So we're very happy with our results in the enterprise and major segments that are really are our target market. So I wouldn't attribute growths in HCV to again, a specific factor around there it's a mixture of combined efforts.
Yes.
Thank you. The next question comes from Richard Tse at National Bank. Please go ahead.
Yes. Thank you just for modeling purposes, I was curious to get your perspective, no doubt if you look at sort of the full year you guys had some incredible growth certainly relative to a lot of names at 54% in terms of.
The subscription part.
No doubt some of that probably had to do with the shift to remote learning. So as we look out into 2021 and 2022 should we expect that to moderate a little bit to sort of reflect a hopefully a return to a normal life year or shouldn't do we sort of assume it's going to be sustained given the.
Initiatives that you're putting in place here going forward.
Yeah.
Okay.
I think that.
You have to imagine that the.
Adoption of our learning management system as a software as a strategic move.
Is it not a one on one to one correlation them two different <unk> I mean, if you come back to the office.
Not using zoom or Florida working against your peers and with your colleagues. So there is a direct reduction.
What we are seeing.
<unk> three is actually that there is an awareness.
There is a tool that we choose.
The system and online learning in general that will not lab, but it gives us a fee.
Efficiently lie.
Can be done so now the costs are more aware that they have this tool and you will not see the way because it does not have a direct correlation between employees with coming back today.
We are not providing guidance on the gross margin.
We are happy that now.
The buyer are becoming a more and more sophisticated let's say I don't like.
Giving you more color on the.
On the direct question you raised it.
Okay.
Sure.
The.
As everyone knows we don't provide guidance, but the way that I tried to respond because I know the appetite is insatiable.
But the way that I've tried to respond in the past is is to say that.
<unk>.
We.
We obviously monitor momentum in our business and at.
At this point.
Even though our business is slightly seasonal there is there is nothing as I've said historically, there's nothing that we see that would suggest there's going to be a change.
In.
And the momentum in our business.
Due to the downside.
No.
You know.
I'm I'm not an expert on how businesses are are are operating in in the U S.
But a lot of the U S is is.
It's more functionally normal than than what we see here in Canada.
And.
You know.
The concern or evidence.
A significant.
Headwind.
As as Covid starts to diminish.
We have not seen as of yet.
Any indication that that's going to be the case.
Okay. That's totally fair just kind of curious as to get that perspective, no. No look we are we understand it and we watch her final daily.
To try to figure that out.
Right Okay.
As far as my second question goes obviously, you guys have done an incredible job on the OE side as well.
Beyond kind of the HCM, there probably is some meaningful opportunities in other sort of segments, you know, notably like ERP and such.
What's the plan or is there a plan to sort of expand kind of the Oems over the next 12 months are into some of those other areas.
Great Great question.
Yes, we have made no.
I was muted as yes, yes, sorry Allen brothers.
So those guys speaking the year.
Excuse me.
So we we really said we have built.
Super Great technology, because it's ugly I'll speak on this software interface.
These are phase two week.
So we OEM.
Let's say that.
It just makes it all the fantasy.
And when we can fly the <unk> M y because.
E S Binning Andrew.
Every phase of all the good work.
Sure.
Certainly when you are inside your CRM you are married.
I mean, when you are into your bottom line across all systems. So we got one technology, we have kept them both to be slightly under <unk>.
They're seeing better because Australia, but needless to provide learning, but don't have the capability to build their own LMS.
Learning technology, because don't forget the Gucci was becoming a multi product suite, let's say that you find yet to identify EMEA proposed unit is also based on feedback on the beta testing of new Oriental models that we are leaving and then.
Thinking about the.
So again, some good shape on the demand side of the web page.
I can say that the bottom is born.
Interesting because usually department for South east, providing training inside the farm their portal to de bottleneck Nashville, So partner portal salt.
Solid demand argument as software only and so yeah I can say also maybe some CRM.
Great.
Community is bought out.
And I repeat myself.
The chipotle and as the product is agnostic.
Let's say that.
One insider all the technologies.
Hum.
Hum.
Okay. Thank you.
Thank you. The next question comes from Gavin Fairweather at Crummack Securities. Please go ahead.
Hey, there good morning, good afternoon, Claudio just under 150, new logo additions in the quarter, that's up from kind of 100 and in the past few quarters I guess I'm just curious person attribution on that would you tie that to higher inbound leads are higher win rates or maybe a bit above.
Yeah.
Got it.
Yes.
Oh I'm sorry.
Sorry, it's okay Alexia.
I can comment on this one quickly it was two things.
Yeah.
Two things one you know when when we look at our logo additions, it's always on a net basis and we we've said in the past that we have a historical.
Historical.
Component of our customer base that are a very small a small pieces of our revenue pie.
Still still folks who pay us $1000 a year.
As that.
<unk> did.
Diminishes then the fall off.
But we have that acts against our new logo ads also starts to diminish right and and so that's that's one thing that happened in the quarter the other aspect though.
The more important news.
First of all the dollar the gross dollar AD was very significant and there were no really big wins included in the in that Ed.
So.
They were basically all singles it might've been one or two doubles, but there were no grand slabs in the quarter.
Okay.
Okay. Yeah, I guess I was just curious if you if you wanted to comment on a break in particular and whether those are moved around but an awful lucky or would have any comments on that.
Sorry, you're breaking up there.
Oh, Okay I'll pass the line. Thank you.
Yeah.
The next question comes from Martin Toner at ATB capital markets. Please go ahead.
Good morning, and thanks for taking my call and congrats on a great year.
Thank you Martin good morning, nice to have you with us.
So you mentioned higher profile as a function of the NASDAQ listening listing and I mean that sounds pretty positive for our revenue growth prospects going forward can you talk a little bit about that.
Mhm.
Sure I mean look me.
Being listed on the NASDAQ is.
It's an expensive undertaking.
And if we didn't think that they were positive associated with it obviously, we wouldnt, we wouldnt have going forward, but the.
The profile that that we believe that it provides us is multifaceted.
It's.
And Nio almost wouldnt want to wait any of these as being dramatically more important than the other but where.
We're obviously from an investor perspective to the extent they can trade our stock in the home currency on a home exchange. It it makes it better for U S investors.
Or or or just more natural for U S investors.
But as I said equally important for us is.
Is given our.
Our hiring requirements being being listed on the NASDAQ exchange and having compensation programs that that can reflect stock and incentive plans associated with the NASDAQ listing.
It is also important it's a competitive world out there and and and that's something that.
That has already proven to be beneficial for us and then the last thing of course is our is is with our customers. There's there's an element of being a grown up company Ah in that in the listing on the NASDAQ.
Candidly.
Yeah.
I think it's fair to say and Alessio you may want to comment on this but I think it's fair to say that the days, where we used to fight the battle with our customers.
Or we are we real are big enough to service a large company.
I think those days are to all intents and purposes behind us at this point.
But alessio why don't you take that.
I, Yeah I agree on on on that last comment.
There's two factors that contribute to that perception are evolving and changing one is.
Certainly NASDAQ odds of a level all the procedure to the organization and with customers and prospects appreciate that and they understand what it comes with an end and secondly, as we continue to win.
Large logos and partner with organizations in in in the degree.
Degree of maturity and success of the AWS and Walmart.
There is a recommendation that that doesn't happen randomly and ER and that those are statements to the growth of the company on on top of the NASDAQ listing so yeah. We.
We're pleased with it.
Yeah.
Super Thanks, very much a broken out a follow on.
Why does inform mattress revenue go into <unk> and will that change going forward or will you consider a change to the revenue model that will allow it to go into air.
Yeah, It's a great question.
Candidly, it's it's a technicality and and we did struggle a little bit and decided to take the high road.
The structure of their contracts today.
If you if you were to take that structure and compare it to our M. S. S. A it's it's just different.
And.
And we.
We will be working with their customer base to put them onto paper, that's structured like ours and and that's why in our remarks I said you know the R. R. R. R revenue.
<unk> is not currently classified as a R. R. As we convert those contracts into as I said, you know as we convert those contracts onto our paper. Then then we will start to classify them as they are.
Okay Super Thank you very much.
The next question comes from Suzanne Sarcoma at eight capital. Please go ahead.
Yeah.
Good morning, Jeff and.
Congrats on the strong results good to see this trung from momentum in the business continue.
Wanted to touch on some.
Some of the strength, you're seeing in new customer wins here, what can you share on the profiles of these new customers coming on board and how much of these are net new to learning versus a competitive displacements.
Yeah.
Chip good morning, and thank you for the kind words.
What can we share on the makeup of the new customers well.
Couple of things I think it was in the script that it was a it was a record quarter not only for new logo, but also for upsell and when we think upsell that we don't think that just the upsell to the St upset about curbside at within the customer organization and I think that's important is to answer your question and give context.
With regards to the new customers that we're signing.
No.
Net new specific trend Sudan, we continue to excel in the industries and sectors in which we have shared that our great stories in the past I also believe it wasn't a script, but to add more color just to be very clear we haven't incur.
Incorporated in the quota for results really large it so to speak whale deals are well above the.
The standard tickets.
We have in fact that distribute it it's across a multitude of customers primarily.
And in in software and technology and the manufacturing financial services retail those are some of the sectors in which we.
We.
It continues to see strong momentum a displacement factor.
These is it primary the primary case.
The ideal customer profile of the table is not any more at first time adopter used to be.
This is the ideal customer of the table as.
A competitor in a house or a homegrown solution, but I wouldn't say that 90% of the instances, we displace a either a large HCM or in other LMS at point solution and.
And we're seeing a trend where H C M or talent management suite displacement.
Hopkins most frequently in the enterprise segment, that's where we win them.
The bigger deals from the Darling.
LMS combined type of solutions.
Great.
Pretty helpful.
Secondly, I wanted to touch on the competitive landscape.
I'm curious if you guys are seeing any notable changes in the competitive backdrop now versus kind of recent quarters I mean, we saw.
Microsoft launched lots Veeva I'm wondering what you're seeing from somebody from your some of the existing competitors in this space and if theres any emergence of new entrants here as you know as the market opportunity for learning will be explained here.
Yeah, So I'll just speaking.
I think that.
The industry is changing and the probe market neither to change very.
Very fast to keep up to go well.
I'm going I mean these are these are it collapsed all of us.
Functions.
That is one thing on the bonds, but they all the schools in China, which is a which is great. I mean, the unification of all the activity is important but we think that the new integration, we did table with Microsoft team, which we.
Which in which we have released recently, even more important especially to support them during most of work Uh huh.
You're still continuing and will continue at least the.
At the end of each one in North America, and probably a little bit longer everywhere else in the world.
Let's say that.
Okay.
Classic and thank you to answer all of them.
Our growing because 11, you've been growing and we know what scares me is what I do know and mainly <unk> no.
Nothing in the workflow the Skus Seaspan enablement platform like Sage enablement is an outcome. If you can imagine neither army.
That can happen inside of every single one of them. So we need to be ready to bring the learning of what the loopnet easier and not only pretending dilutive manner, even inside the elements and that's why we are working.
Yeah.
Okay great.
That's good color.
Thank you Claudio.
Is it from me guys I'll pass the line.
Yeah.
Thank you and the last question comes from Nick Agostino at lunch and Bank. Please go ahead.
Oh excuse me sorry, yeah. Good good day, all I guess, just coming back to the OEM question. If you guys could comment on when you look at the the revenue growth from the Oems driven recognizing the relative proportions of your OEM partners.
Partners was it driven by one OEM or was it.
Equally proportional again, recognizing there were out of proportion.
Is it equally proportional in terms of their their contributions and a second part of that question is what regions. If there was any where these Oems were getting a greater attraction.
Yeah.
You want me to take that Alexia.
Sure.
Sure go ahead, let me know if you want me to chime in afterwards, Okay, Hey, thanks. Thanks for the question and great to have you with us so.
[laughter].
When when we started our our work with Ceridian It took us a long time like over two years to two.
Be in a position, where we could support them and.
And I think everyone's familiar with with that story.
Uh huh.
It still though even though.
We are now capable of responding very quickly and being integrated within an OEM platform.
Working with an OEM.
It's still a a critical strategic decision for them and so.
We have a put a team together that over the past year has built the pipeline.
To to add to our stable of OEM partners have.
Having said that.
You know the the vast majority of our OEM revenue still comes from our original partner.
And that's why when I look at our at our business over the next five years.
And think about the kind of companies that we can partner with and shouldn't be partnering with and and.
Our in our it's in our pipeline that's why I get excited so to answer your very specific question the vast majority.
Or the very material majority of our OEM revenues still a single customer related.
Okay.
And then on that same St topic, if we look at Ceridian and we look at MRI <unk>. You you spoke about it took two years probably get some good adoption with ceridian when you overlay the.
The traction of those two Oems would you say that moh is ahead of or on par with <unk>.
Or or or behind where ceridian would've been at the same point in time, just trying to understand the penetration you're getting as you might bring on other Oems.
Alessio why don't I, let you talk to that.
Yeah.
Yep.
Yeah.
So with without.
Yep Yep.
Okay.
So.
Look we.
We know the potential of.
The relationship with Ceridian we.
We're close partners and we've been in this like he has said for a while so our visibility on the model there is.
It's certainly more mature I'm HR.
Started ramping late 2020, so it's early days.
With that said.
Ceresian remains a a.
We plan on them to continue to be a significant driver, but what do we look at M HR and beyond.
Opportunities that we are we haven't found the we think that over the next two years the curve, but that he is primarily attributable to two ceridian.
Ah well will you know flattening away and distributed more evenly it's hard to say today exactly when and how but what we know it well I think one important note.
And M. HR is from a regional standpoint, which I think was in your initial question is very U K focused.
Whereas ceridian despite.
Despite the incredible EF 14 acquisitions also is a much it's a much more global player with footprint in North America, our our strategy and our goal and what we're executing is continuing to partner with organizations that cover the entire world without focusing or precluding any single geography.
So we're looking carefully at each and every market the two OEM or with companies.
From Northern Europe to APAC, and so on and so forth. So we're actively pursuing every opportunity and in regions are a consideration in our in.
In our hunting strategy.
Okay. Thank you.
Yeah.
Thank you there are no further questions I will now turn the call back over to Claudio ARPA for closing comments.
Yeah.
<unk>.
It was a pleasure having jewelry airport. Our first goal are first earning call.
Together with the effects of non Gotcha, I felt depression and.
I really hope to have you in the next earnings call, which will be probably in may so not not longer and probably I'm, not saying who will be in a vaccine bloomsburg immune against scenarios.
We'd be more would be more or less in any way you guys. Thank you. So much if there has been a pleasure. Thank you.
Ladies and gentlemen, this concludes your conference call for today.
Thank you for participating and we ask that you. Please disconnect your lines.
Okay.