Q2 2022 Ooma Inc Earnings Call
Good day, and thank you for standing by welcome to the earnings call.
This time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone keypad. If you require any further assistance. Please press star zero. Thank you and I would like to hand the conference over.
To your first speaker for today, Mr. Matt Robinson. Thank you. Please go ahead.
Thank you Donna and good day, everyone and welcome to the second quarter of fiscal year 2022 earnings call of Humana, Inc. My name is Matt Robison, who is director of IR and corporate development on the call with me today are CEO, Eric Stang, and interim CFO and controller Dorado, so for a while.
After the market closed today <unk> issued its second quarter fiscal 2022 earnings press release as well as the press release announcing the appointment of Shake Hamamatsu, Who's Vice President CFO and Treasurer Affective next Tuesday September 7th.
The business where.
These releases are also available on the company's website at <unk> Dot com.
All is being webcast live and is accessible from a link on the events and presentations page of the Investor Relations section of our website.
We will be active for replay of this call for at least one year.
Faruk replay will also be available for a week starting this evening about eight P. M. Eastern time dialing information for it is included in today's press release.
During today's presentation, our executives will make forward looking statements within the meaning of the federal securities laws forward looking statements generally relate to future events or future financial or operating performance.
Our expectations and beliefs regarding these matters may not materialize and actual results are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
These risks include those set forth in the press release, we issued earlier today and those risks more fully described in our filings with the Securities and Exchange Commission.
The forward looking statements in this presentation are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward looking statements, except as required by law.
Please note that other than revenue or otherwise stated the financial measures to be disclosed on this call will be on a non-GAAP basis. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP a discussion of why we present non-GAAP financial measures and a reconciliation of the non-GAAP financial.
As discussed in this call to the most directly comparable GAAP financial measures.
Included in our financial and our earnings press release, which is available on our website on this call. We will give guidance for third quarter and full year fiscal 'twenty 'twenty two on a non-GAAP basis.
So in addition to our press release and 8-K filings the overview page and events and presentations page of investments and then the investors section of our website as well as a results page.
Financial Info section of our website includes links to information about costs and expenses not included in our non-GAAP values and key metrics of our subscription businesses.
These are titled supplemental financial disclosure.
And supplemental financial disclosure two additionally, our investor presentation slides include GAAP to non-GAAP reconciliation that also provides resolution of GAAP expenses that are excluded from non-GAAP metrics now.
Now I will handle the call handle the call over to CEO, Eric Stang.
Thank you, Matt Hi, everyone welcome to whom as Q2 fiscal year 'twenty 'twenty two earnings call. Thank you for joining US today I'm excited to review our progress and results for Q2 and to update our outlook for the balance of the year.
First of all I'm pleased to report strong growth for fiscal Q2 total revenue for the quarter was $48.0 million, which was above our guidance and represents 14% year over year growth.
Revenue growth for business customers increased sequentially in Q2 to 26% year over year and revenue growth for residential customers held approximately steady at 4% year over year.
With the progress we are making we remain on track to cross over to more than 50% of our subscription and services revenue coming from business customers before the end of this fiscal year.
I'm also pleased to report Q2, net income and EBITDA also exceeded our expectations.
EBITDA for fiscal Q2 was a record $5.0 million.
This allowed us to end the quarter with over $30 million in cash up from a low point of $26.0 million just a few quarters ago.
Overall, we believe the business is performing well and we have good momentum going into the back half of this fiscal year.
Our primary growth initiatives centered on driving growth in small business customers expanding.
Expanding sales through channel partners.
Developing our enterprise business solutions and expanding internationally.
We are making good progress on each of these initiatives and they will continue to be our focus for growth.
As we've discussed previously small businesses have unique needs and represent a large and relatively untapped segment of the ucas market.
We believe at least two thirds of small businesses have yet to convert to a cloud ucas solution.
In addition, there are indications that small business formation is currently at a record high.
We believe <unk> is the leader in serving small business customers with our room office and home office Pro solutions.
Our premium price to office pro solution introduced about one and a half years ago now was adopted by 45% of our new office users in Q2, an increase versus Q1.
Overall, 17% of our office users have now stepped up to our pro tier.
We are investing to make our pro tier even more attractive to customers.
To this end in Q2, we announced a video remote control, which allows users of our video meetings the control remote screens.
And we also announced caller info match, which we discussed on our last conference call.
We're also investing in new breakthrough features that will enable us in the future the launch a new higher priced tier above office pro.
These efforts are part of our leadership strategy in the small business segment.
For Uber office, our small business solution, our largest new customer in Q2 was a 127 user implementation for a restaurant establishment with about 20 locations.
Other notable home office customer wins in Q2 included 40, plus user implementations at several companies, including a trucking company a real tier company in an industrial business.
We added 20 locations with a national entity, where we now serve over 100 locations, including with Uber connect Internet service at some of those locations.
And we added an additional approximately 150 locations with a large national brand, where we now serve over 1500 of their locations.
We're excited by the expanded market potential serving larger size businesses that we see from office pro with its advanced features.
As you know we have a long term strategy to expand our channel partners and sales through resellers, which we feel is a large opportunity given our historical concentration on direct and retail sales.
In Q2, we grew to 46% of our business sales through resellers, our highest level yet.
We also announced our new partnership with App smart to offer business phone and unified communication services to <unk>.
Smarts extensive technology advisor network.
Our contract with smart opens the door for us to build relationships with App Smart network of advisors.
Finally during Q2, we completed much of the customization work needed to support a new private label channel partner, who we mentioned a quarter ago, we see potential with this partner to onboard several thousand users over the balance of this year.
We continue to expand our ummah enterprise feature set and target select opportunities, where we can provide a differentiated solution.
One such area is hospitality.
Where are we secured several new hotel customers, including some very well respected names in the industry.
As part of this strategy, we announced a new partnership with jazz, where which offers hotel management solutions and other services.
Together.
And jazz, where can now offer jazz, whereas hospitality applications and universal connection middleware using the ummah enterprise Ucas platform connecting hotel premise and contact centers to the public switched telephone network.
This is one example of Illumina enterprise strategy to provide customized solutions meeting customers' unique needs.
We also announced a new partnership with huge yet.
You May now offers an integrated solution combining my enterprise with you Jets, leading omnichannel contact center solution.
In addition, you chat will deliver referrals to Houma, when you check clients or prospects are in need of Ucas services.
We are already seeing new sales opportunities coming from this partnership.
Finally, we are investing this year in international expansion driven by the opportunity to serve our largest customer in new countries across Europe and other parts of the world.
The effort to accomplish this progressed well in Q2, we.
We are currently bringing up a number of locations newly established by this customer across a number of countries.
We are poised to begin a more extensive rollout of services in Q3.
In Q2, we also began collaborating on some new initiatives with this customer, which we're excited about though our focus of course remains on rolling out our current services. Further this fall when the customer is ready to proceed.
On the residential front, our business remains solid and we once again grew revenues in line with expectations.
Our supply chain is in relatively good shape, we expect to be able to meet the demand we anticipate in the back half of this year.
Turning to the pandemic, we noted in the past that it creates challenges for direct customer engagement and hiring Nonetheless, our organization is stable and we have the right people in place across our business to execute our growth plans.
And lastly, I'm very pleased to welcome Chick Hamamatsu, who will be starting on September 7th assume as new CFO hiring.
Hiring Schick is the result of an extensive search process and we are thrilled that he will be joining whom and next week. He brings deep financial understanding and experience both as an auditor and as a public company CFO and has a demonstrated track record of leadership and strategic business development.
Look forward to partnering with Schick to drive <unk> growth and I Hope you will join me and warmly welcoming into Ma.
I will now turn the call over to nominate a sabra wall, our acting CFO to discuss our results and outlook in more detail and then return with some closing remarks.
Thank you.
Good afternoon, everyone I will begin with a view of our second quarter financial results.
The outlook for the third quarter and full year fiscal 2022.
We achieved record.
Total revenues of 47.1 Malone Mitchell.
The high end of Opdivo <unk> issued guidance range of 46 to 46 point open the lung Donnie.
On a year over year basis, total revenue increased 14% driven by well my business, which grew 26% year over year.
Well my business now accounts for 48% of total revenue compared to 43 per phone on the prior year quarter.
Net income for the second quarter 2020.
<unk> was two point team alone, which exceeded our previously issued guidance range of one 9 million to $40 million.
This was largely driven by higher subscription and services revenue.
Overall gross margins.
Now some details on our Q2 revenue results.
<unk> services revenue.
2%.
Yes, there were $48.0 million well Mt business subscription and services revenue growing 25% year over year and 5% sequentially from Q1.
Subscription and services revenue as a percentage of total revenue was 92% similar to the prior year quarter.
Subscription and services revenue grew 3% year over year.
Rather than other revenue for the second quarter was $8.0 million up from two 9 million for the prior year quarter.
Now some details on our key customer metrics, we ended the second quarter with 1.091 million core users.
Up from 1 million to 53000 users at the edge.
End of the second quarter last year.
This was driven by continued growth on business use it so sales and marketing activities.
Total business users grew 19% from a year ago, and we now have 293000 business users.
The end of the second quarter, 27% of our total core users what business users.
Year over year from 23%.
Average monthly subscription and services revenue vertical to use it or alcohol increased 10% year over year to $13.01, which is due to an increasing mix of office pro users in the second quarter of fiscal 2022, 45% of new office users.
Opted for office brutal service.
Which was up significantly from 25% in the prior year quarter.
Annual exit recurring revenue increased $270 million going towards 8% year over year.
Net dollar subscription retention rate for the second quarter was 98%.
Sequentially and improved from 95% in the prior year quarter.
Now some perspective on gross margins.
Absorption in services gross margin for the second quarter with 72% up from 71% for the same period last year.
The higher gross margins were driven in part by the growth in business customers with Hyatt.
Overall economies of scale.
Rather than other gross margin for the second quarter was negative 52% compared to a negative 45% at St. Pete It last year.
Klein is directly attributable to the write down charge, a $400000 related to some excess inventory that does not expect it to be functional on the legacy Sprint network under T mobile.
On an overall basis total gross margins increased 63% up from 62% in the prior year quarter.
Now onto updating expensive.
<unk> expenses for the second quarter was $30.0 million up $8.0 million or 15% year over year.
Sales and marketing expenses were $19.0 million or 29% of total revenue.
$2.5 million or 22% year over year increase.
Driven by the growth of marketing and channel development activities Oh My business.
Research and development expenses were $11.0 million or 18% of total revenue.
$400000 or 4% year over year.
We continue to develop and add new features.
C J.
G&A expenses were $9.0 million or 10% of brokerage revenue compared to $12.0 million for the prior year quarter.
This is due to an increase in professional services fees related to our international expansion efforts.
Net income for Q2 was $6.0 million and diluted earnings per share of taking certain.
Compared to a net income of $3.0 million.
Total bullshit and the prior year quarter.
Adjusted EBITDA for the second quarter was $5.0 million on 9% of Goldman's revenue.
Back to $9.0 million on 9% in the prior year quarter.
We ended Q2 with total cash and investments of $30 million with no debt.
Cash generated from operations for the second quarter of fiscal 2022 was $8.0 million compared to $7.0 million during the prior year quarter.
This was our fifth consecutive quarter of positive cash flow from operations.
Notably we achieved positive operating cash flow of $3 million in the first half of fiscal 'twenty 'twenty two compared to cash used in operations of $300000 in the first half of fiscal.
Fiscal 2021.
We ended the second quarter with 977 employees and contractors up from 934 same quarter last year.
Now onto our third quarter and full year fiscal 'twenty 'twenty two guidance again, our guidance is non-GAAP and has been adjusted for expenses, such as stock based compensation and amortization of intangibles.
We expect total revenue for third quarter of fiscal 'twenty 'twenty two to be in the range of 47.8 million to $53.0 million.
We expect third quarter non-GAAP net income to be in the range of 2 million to $10.0 million.
Non-GAAP diluted earnings per share is expected to be between eight cents to 11.
We have assumed $28.0 million weighted average basic shares and $33.0 million weighted average diluted shares outstanding for Q T.
For the full year fiscal 'twenty 'twenty two guidance, we expect total revenue to be in the range of 188.5 million $290 million an increase from the previously issued guidance range of $185 million $287 million.
We now expect.
Non-GAAP net income for fiscal 'twenty 'twenty two to be in the range of 10 million to $16.0 million.
This is an increase from our previously issued guidance range of $12.0 million to $14.0 million $14.0 million.
Non-GAAP diluted earnings per share is expected to be in the range of 40 to 46 cents. We have $28.0 million weighted average basic shares and 25 million weighted average diluted shares outstanding for fiscal 2022.
With that I'll pass it back to Eric for some closing remarks.
Thank you and first of all number of thought I want to thank you for stepping into the CFO role. These past few months, we've been in good hands and I greatly appreciate the extra effort you have made to get us through this transition period okay.
Summing up our strong results for the first half of the year combined with the many growth initiatives, we have underway across the business give us confidence as we look forward.
We're pleased to increase our guidance once again for fiscal 2022, and look forward to Q3 and the balance of the fiscal year.
Thank you well now take questions.
Again as a reminder to ask a question. Please press star one on your phone's keypad.
Thats Star one on your phone's keypad, we'll pause for just a moment to compile the Q&A roster.
Okay.
Yeah.
Thank you and your first question comes from the line of Matt Stotler from William Blair I'm.
I'm sorry.
Matt Stotler from William Blair. Your line is now open.
Yeah.
Hi, This is Sean.
My last one.
Washington gas to market.
Congratulations on the crazy as well.
I have two questions.
The first one is on death. This is John Group office.
I was just in sort of lift and just Walter on the second question is how is the pipeline is building for the market.
Tom.
Okay.
I'm, sorry, you're a little bit hard to understand but I think you asked how is the business churn rate and how is the pipeline for business because that's the two questions.
Yes, that's right.
Terrific.
The churn rate on business has been.
Uh huh.
Say the words the right way it's been good it's not been high it's been the churn rate has been well under control and.
Has improved from where it went from last year when it when it went up with the Covid time, So we're feeling pretty good about.
Where we're at on that I think our overall churn rate as a company is around 10% and obviously business blends into that along with residential.
But no we're seeing.
We believe we're doing well on that front in terms of pipeline.
A lot of our business on the office side selling to small business customers is not really pipeline based we tend to close customers in the months that they.
That they are that we generate a dialog with them.
But the pipeline on the on the enterprise side of our business continues to grow.
As do the number of resellers and agents that we have.
Representing us out in the field and so.
I don't think there's anything special to note there other than things are in good shape and in improving the way, we'd like to see them.
Okay. Thank you.
Thank you.
Thank you your next question.
It comes from the line of Matthew Harrigan from Benchmark. Your line is now open.
Congratulations on the numbers as well I was just curious on the new business formation. There was an interesting study I guess at the University of Maryland, It really talks about the consumer facing startups, there was cory by Shopify and stripe really demand customizable solutions.
Which is obviously something houma.
Is the wheelhouse for.
Would you think thats adequate characterization I mean, it felt like your commentary is a little bit.
Different from what one of your very large competitors that recently.
Reported.
That company also sounded like they were really.
Hello, Dan.
And the number of enterprise customers and we're really not all that energetic.
Yes.
Segment that you are emphasizing.
Emphasizing.
Steve.
Yes.
I apologize for the background noise.
Oh go ahead.
Oh God I wish just apologize for the background noise.
Their phone to shrink.
Go ahead, Eric I'm sorry.
Hi, Matthew.
Gosh I don't think it's a it's a choose one choose the other ones.
Bad ones. Good I mean, as you know we're trying to serve both the small business segment and the larger what we call enterprise segment with different solutions. We think the needs of each segment are different we think one size does not fit all and our vision of the small business customer as they as they care about getting a lot of powerful.
Features but they want them to be simple and easy to use and they want them to be kind of just what they need and not a lot of complexity beyond that and we think with our room office Newmar office Pro solutions, we've kind of hit the sweet spot.
For what they need now those solutions are very powerful there.
You know absent contact our call center capabilities and integrations, there's pretty much a complete ucas solution, but.
You know with everything from mobile apps, the effects in conferencing and video and Paul reporting and a whole bunch of other features but nonetheless, it's delivered in a way that small business can really make the most out of it most of our small business customers tell us they didn't realize they could get such a powerful solution.
And what they're switching away from is really much less.
Capable usually it's just a few phone lines and maybe a ring group, perhaps provided from a cable provider or a local telco. So we think we architected the complete solution for that small business customer.
Cost savings being another key driver of their decision, making along with simplicity and ease of use.
And when we look at that segment its high plus million businesses in North America, one to 20 employees.
I talked about a study at the end of my you know a quarter or two ago that said that more than two thirds of these businesses have yet to move to the <unk> solution. We offer. So we think it's a huge untapped opportunity that isn't to say that enterprise isn't also very.
Interesting to us and also a great opportunity for growth and but there you know our strategy is more targeted we're focused on certain verticals, we're focused on customers who need some special customization to their solution, our largest customer which is over 25000 seats today.
This is actually a blended these two platforms.
Where we're able to bring the power of each together for them in a way that that really met their needs uniquely.
So we're just bullish on the market in general and.
I don't really try to make a big distinction between the two although it is it is certainly true that our heritage started at the small business level in most of our sales and marketing effort today is still at that level as we build out our enterprise solution to be more and more capable.
I, probably should've frame the question a little bit better.
I guess, firstly are you seeing a real change in the composition.
Small enterprise I'm, sorry, small business customers coming on again, just looking at where the.
Business activity formation in the U S has changed.
And again I mean, you've made it clear in your opening remarks that you are making a lot of progress on the enterprise side I'd probably.
My question, you probably didn't reflect that but do you get the sense that some of your larger competitors.
Are you still neglectful.
SMB and maybe even overly focused on.
The global <unk>.
2000, and if you would.
Well I'll take your second question first.
I don't think anybody in our industry as neglectful.
Every every.
Every player in the industry has their areas, where they focus and where they target.
And I think we brought more focus to the small business space than anyone I also thank our growth rates there are faster than others.
And where.
We're very.
Excited about the potential for the segment now you asked are things changing for us.
I highlighted the change in my in my opening remarks, which is with the advances we've made with office pro.
Not just getting the 125.10 person businesses. We're also getting the 2040.5100 person businesses because office pro has gotten.
Pretty complete and what what what it can do.
And so our.
Our mix is changing a little bit in that I think we're getting.
We're having more success at larger sized small businesses, but no we still get a lot of customers who.
Take one or two seats and that's it and are just getting started or just have a very small business and.
I want to.
As we say sound and it looked like a big business at a small business price.
As what we think of them office is all about.
Great answers thank you Sir.
Absolutely.
Thank you. Your next question comes from the line of Matt Stotler from William Blair. Your line is now open.
Yeah, Hey, guys. Thank you for taking the questions.
First off maybe one on <unk> I know, obviously, a pretty strong growth on a year over year and sequential basis. There and you noted that I think it was almost 20% of.
Office user usage and our approach is a pretty rapid expansion I think it was kind of 10% earlier this year of 5% towards the end of last year. So clearly some some rapid adoption on that front.
Is that kind of the primary driver as we look at this kind of <unk> expansion and the growth Youre seeing there is there anything else that you can call out whether it's I know that connect obviously has some some potentially solid asps.
Contact center as well as enterprise anything else to call out there in the <unk> front.
Well I think you've pretty much hit it.
It's <unk>.
Moving more of our customers up to office Pro It's also just.
Mixing growth because or ARPA numbers, a blend of our entire business customer base and as we grow on the business side those customers naturally have a higher revenue per user so that blends in as well.
But no I think you hit the nail on the head in and that's why.
We're also excited I talked to my opening remarks about.
Doing the investments today to at some point in the future be able to offer even another tier that goes beyond office growth.
Hopefully to drive a little bit more value.
An opportunity with our customer base.
Got it Thats helpful.
And then maybe just one more on the on the contact center opportunity obviously.
Some.
At least one very large combination announcement from a competitor in the quarter and you had a nice announcement on your side from the partner standpoint, with UGG that you touched on.
Obviously, it seems to be kind of a.
More of a trend of bundle UC and contact center, especially moving into larger deals.
Any thoughts on.
When you think ahead.
Medium to long term.
How much of that.
Your you think theres value to partner with how much of that you think you should bring internal overtime.
To get your thoughts on that contact center opportunity and what fits best for OMA.
Sure.
So, yes, you're right, we've announced a new partnership with huge yet I'm very excited about.
And what they're doing they have a.
A leading solution for particularly mobile.
Based businesses, where you want it in fact embed an SDK so to speak into our mobile App and have your users.
Contact you through that kind of means they also.
Have a number of other features and capabilities and very strong security with their platform.
We.
Yeah.
And we work together well with them and we're integrated with them now and we can we can we can sell a customer a combined solution on our paper so to speak and they can they can do the same.
So but in terms of our outlook vis vis contact center, we focus on call center today, and we have a number of customers who use our call center capabilities and we think they are pretty strong.
All the major features that you'd want to see in a call center capability. We we we have on our enterprise platform.
But we don't have plans today to extend that into contact center in omni channel and some of the other more.
Advanced things that are going on today, we think partnering with it is a very effective way for us to do it.
Yeah.
So far that's been working well for us.
Great. Thanks, Ken.
Sure.
Thank you. Your next question comes from the line of Josh Nichols from B Riley. Your line is now open Sir.
Yes, Thanks for taking my question and then.
Eric clearly a lot of momentum here headed into the second half I kind of was curious if you could help us how would you kind of rank order some of the opportunities you have international.
International expansion with your largest customer.
Growing reseller channel.
Office Pro and what do you think the company's biggest opportunities are over the next six to 12 months.
Yeah.
Well as you know, we're pretty transparent and we talked about four major areas for growth in our in my Premier I did in my prepared remarks, and really those are the areas that we're focused on today.
We haven't yet seen a lot of impact from the international expansion from our largest customer that has taken some time to roll out and particularly on their side and some things they need to do to make it happen.
So if you look at the next six to nine months.
I'm expecting some pretty significant developments from from that.
And then you look across our business growing resellers and channel partners that is kind of a steady.
Execution related effort resellers and channel partners need to get to know you and they need to have experience with you and understand how you bring.
<unk> capability in the market and that's something I think we do well and with.
Our partnership now with App Smart apps Smart has about 5000 technology advisers in their in their network that's a huge.
Opportunity for us to target and get to know, but it'll take time, so that's kind of a steady developing.
Ramp for us.
Within the enterprise we have a.
Strong growth plan in place, but there's always the bluebird opportunities there to land a very large customer.
Which for us at our size is still meaningful and.
We're always on cultivating those kinds of opportunities and looking at what we might.
But what we might be able to achieve and then finally, just office and office pro and at some point here over the next.
Quarters.
Here above office pro.
The market is just so vast that it comes down to the amount of sales and marketing effort, we can make and.
And just driving the execution and the growth and that's also something we've been doing for years and we're going to continue to do each quarter, we expand it.
In the last two quarters, we have not grown our team substantially.
And we would like to.
Accelerate our hiring and move faster and we've got programs in place to do that but.
But I think all of them are are.
Our good drivers for us in reasons why I said at the end of the prepared remarks that we have confidence as we look forward.
Thanks, and then just as a follow up.
You hit on it really briefly I'm not sure how much youre able to divulge at this moment, but anything you could kind of talk about about this new.
Higher tier offering that youre looking to do that's even a notch above.
Office pro as far as when it might be released or or who you're really trying to target for that market in terms of features and functionality.
Not much more I can really say at this point.
We hope to have it out by this time next year, if not you know.
Sooner than that in earlier next year.
And it will bring.
<unk> added features that go beyond what we do today with office pro and there'll be things that some customer appeal to some customers and not others generally I think they will be featured in keeping those it'll appeal to a little bit larger customers and it'll just fit in again to our strategy of.
Expanding our addressable market and.
Growing our <unk> will also put us in a position of having a good better best offering.
And I don't know, but.
I know a lot of times when I.
When customers look at that they kind of gravitate to the middle of a little bit.
If that gravitates, a little bit more to office pro.
Which will be in the middle now I think that'd be a good thing for us.
But.
No.
We'll give more color on this.
Our next conference call and.
And then at the end of the year.
Okay.
Thanks, and then last question for me is.
A lot of traction here numerous we sell our partnerships announced in that's getting close to 50% of sales is that expected to continue to take some significant share how should we think about it.
The sales allocation between direct versus indirect if we kind of think 12 to 18 months out from now.
Well, if we think 12 to 18 months out I would like to see resellers and channel partners have a higher percentage than where we're at today.
We've nominally said for lack of a better estimate that wed like to be around 50.50 with each channel.
And I don't see anything stopping us from getting there.
Each quarter, we look at this metric, but in any particular quarter. It isn't as instructive because it can bounce around a little bit based on just the nature of our business in the quarter, but I think.
From a steady one.
Longer term perspective, you can see the growth I think a year ago, we were at about 37% of a.
Sales through channel and reseller partners. So you can see how we how we're moving up over the last 12 months.
It's a big untapped opportunity for us.
<unk>.
Because it's not something we've traditionally.
It wasn't in our heritage early on as a company as we were developing <unk> and.
It's just such a vast network of <unk>.
Potential we've talked about one new relationship with App Smart apps marks one of many master agents in the channel today and they alone.
Though that one of the big ones. They alone can represent 5000 advisors. So.
You can get a sense of the potential here as more people get to know us.
Okay.
Thanks, that's it for me.
Sure.
Thank you and your next question comes from the line of Brian <unk> from Alliance Global Partners. Your line is now open.
Hi, This is Jacob on for Brian Thanks for taking my questions.
The number of business subscribers choosing them office promos, I think 45% this quarter and Thats roughly in line with the past few quarters can we expect you to maintain the pace and how is the recent offerings improved your ability to sell them office pro.
Well you can certainly expect us to maintain the pace.
When we launched office pro we didn't know.
How how far we could go with it and we thought 2025% of our new customers, taking it would be a good result, so we're thrilled that at 45.
And.
We have.
I think accelerated some of our efforts to also introduce it to our installed base and I think that's also helped to drive the 17% or so that we said of our entire base that now take home office pro so.
It's just a.
It's for the one or two person company, often they arent going to step up to this tier but for companies that have.
Our need for what's in pro it's a great value and a great opportunity now with office pro some of the biggest capabilities. There are on call recording video meetings.
He smelled transcription.
I'm going to forget because like a dozen things in it but those are some of the big reasons that.
Our customers.
<unk> also called blocking.
Which can help save a business from unwanted spam calls, which we all desperately.
<unk>.
So it's.
It's a great solution and.
I think it just fits right for the small business customer.
They get something they can operate themselves customize but their own greetings in use the IV or <unk>.
Connect out of the office on the mobile apps that were terrific.
Our mobile apps are very extensive today and.
Just just get what they need and I think that's one reason why our churn is so low even though we're serving small business customers, our churn and I don't think is any.
Any higher than what I see with others in the industry and so.
That's a testament to the.
That office is doing for our customers.
I hope that helps a little bit on what you were asking.
Yeah. Thank you.
That's all for me.
Thank you again to ask a question. Please press star one on your phone's keypad.
Again Thats star one.
There are no further questions at this time I would like to turn the call over to Eric Stang CEO of Umar Inc. For closing remarks.
Thank you and thanks, everyone for listening today.
Everyone on the team's working hard and we're we're pleased with our results this past quarter, but we're also excited as we look forward and.
Really appreciate everyone's support and confidence as we as we build the business. So thank you everyone Goodbye.
Yeah.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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