Q3 2021 Docebo Inc Earnings Call
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Good morning, everyone and welcome to the Dutch able Inc. Third quarter 2021 earnings call. Today's conference is being recorded all participants are currently in a listen only mode. Following the presentation. We will open the line for a Q&A session for analyst instructions will be provided at that time.
I am for research analyst to ask questions.
We ask that analysts please limit themselves to two questions and return to the queue for any follow ups.
I'd now like to turn the conference over to Dr. Evil's Investor Relations Dennis Fong. Please go ahead Dennis.
Thank you operator before we begin the achiever would like to remind listeners that certain information discussed today, maybe forward looking in nature such forward looking information reflects the company's current views with respect to future events and.
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 the tables public filings, which are available on SEDAR and Edgar.
During the call, we will reference certain non <unk> financial measures.
Although we believe these measures provide useful supplemental information about our financial performance, they're not recognized measures and do not have standardized meanings under IRS. Please see our MD&A for additional information regarding our non <unk> financial measures, including reconciliations to the nearest <unk> 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 Joe Chang CEO All Europe.
So everybody and thank you for joining jobs on our third quarter 2020 was earning call with me today is that I tell people, our president and CFO and I'm happy to be welcoming she's gotta make that our acting CFO, while his first earning call.
Over the past year, we haven't seen good momentum in our business accelerate and you got into the third quarter and then.
I'm excited to report another quarter of 60 plus percent revenue and they are ours.
Despite the summer holiday in Europe, well, which engendered all he's been a headwind for us we have what I call the net.
Diesel, but he doesn't buy it I called in your local safe and strong upsell and cross sell performance.
Bear in mind that we have made and I worked out from that experience and success team has opened up.
To build and support a strong pipeline of enterprise customers that have driven substantial growth in the average contract value.
We added 151 net new customers in the third quarter, why our growth remains balanced and broad based across customer verticals. The frequency of the larger enterprise deals as increase it is more leading organizations are turning to the table to solve their employee count.
And part of their training needs.
And in the quarter LIBOR environment.
Where there is a war on talent or skill workers, yeah. The math has become an important tool to improve employee irritation.
In the third quarter alone. We saw you keeping senior because me more new deals with that are greater than 100000 U S dollar compared to the second quarter I'll tell you 'twenty one in fact nearly half of new logo wins.
This quarter came from contracts to over $1000 in ALR. Our success this quarter that have not been tied to a handful of large contract wins, but it doesn't organization adopt the table, even if they put them into.
Level, they generally have loved to have use cases.
He's been with our go to market strategy. We continue to work organization. So bookings are willing to spend on use cases, demonstrating that escaped this goes above and beyond industry standards that it goes the arbiter of diesel at a nice.
Consistent with the previous quarters that are greater than the high school, what you'll see in Q3, well extend the hybrid use cases.
My favorite example, in the third quarter are you in agreement, we signed with the Zoom video communications.
It is an integral part of our water day to day lives. Some selected the chamber as their trusted provider to create personalize it.
With the ability to obviously scale and service employee partners and Gospel under a single platform.
And obviously these partnership will support there I think to meet growing customer base and continue to create an impossible alert in Germany for their audiences.
We are also seeing continued success in the retail industry, where there is a need that we believe are consistent training experiences across a lot of it.
Workforce.
Three we were delighted to partner with numerous Barclays. There are many countries a luxury department store was there to provide the best in class.
Talk accelerate their digital transformation project.
Another matter because that has been strong for us has been the biotech and the health care sector. We have established a new cost a little this quarter, including an agreement with medical a leading global motherfucker edibles speciality medical devices.
Medical also embeds any the wiser.
We just said I fell off the table.
Upselling Cross sell what also is don't contribute to our growth in the third quarter, we expanded our partnership with anybody who the girl to grow the number of their.
Yeah.
We're also tapping into the white label learning suite by introducing a new way to develop content using the triple shape and to measure the effectiveness of their learning problems.
Why are you benchmarking against the other companies that using the table there.
You may feel our platform also allows us to expand to other.
The bottom end, so we did it organization.
In the third quarter, we were pleased to be awarded in agreement with the New Division with one of our largest you called medicine cloud computing customers.
These are here, we allowed them to triple our new suite of products and began selling the triple learning impact in the first quarter and shape of learning analytics in the third quarter. Although we are now successfully selling at each of the new products that we are feeling theyre only gave them do Jeremy.
And I expect the demand for our work on the block.
We remain the primary driver of growth in the coming quarters.
You never Miss Colbert, we were excited that were large island and host our annual inspire user conference you signed it will be a floor and we have more than 150 gospeller pardon the pun.
Posada joined US for two days of live streaming content and insight from learning and development expert that I went to work.
During the conference we launched the two new novelty balls who's got extended the capabilities of our core LMS the simple call that into Chipotle.
The typical Nash is a powerful tool that allows crestor no matter, our technically ski Linda to manage the doctor imports exports.
Import export process from their LMS.
Across their enterprise, but using more than 400 pre built integrations to a low code no code interface.
The typical flow because of the power of the corn learned their lessons learned and getting the workflow within their software is vital.
So they can get the contextual knowledge, they need when and where they need it.
Both products are a great example of how we can debate swipe organization go next go to the core of the business. He said.
Saturday multiple audiences and use cases like gossip education sales enablement and frontline training and compliance we can see that all I'm learning software building blocks to integrate with every other salt.
In the enterprise Tech stack.
I'll give you an approach sets us apart and there's been a fundamental driver.
Does anybody have knowledge and training is a revenue enabler for many companies and they'll want Oh, yeah and partnership for all of them are designed to enable this capability.
Yesterday, we have announced six new agreements and expanded the partnership we have ever had with the water and in the chart. That's one sign gonna be plug and play.
As we have consistently stated in the past working with all our partner keeping them up and bring solutions to the market takes time, but we know from our experience with our proof OEM partner that the returns can become meaningful M. HR, where we are in 2020 is now in the process of ramping that would be coming in.
Let me give you a completely stopped.
Through our OEM partner business, we expect that at all.
More of our lesson partner to large commercial all studies starting in 2022.
We believe this will be an exciting rolled back some of what I was going to be you have to come and we are.
I didn't really know what anybody would like to expand our partnership program part there and we've got more of the states in the coming quarters.
Lastly, when we spoke last quarter I thought you, though some of our invitation and therefore that our own DSG and this is a journey that we are very possibly go moving forward I'm on all of that.
Cable was recognized in the third quarter 40.
I saw a quarter with a 2021.
Award from the US trade news for empowering woman technology, we'd grow opportunity.
Instilling a culture of caring is extremely important to our organization and he is also an important part in how we attract and retain the best talent.
We have a number of internal initiatives underway, including the table getting in basketball to placebo fried chicken Wamus Elia webinar for inclusion and diversity recognition award mental Lal D and the deal.
Integration among just a few.
<unk> thousand 13, airports and bringing their vitamin diversity equality and inclusion to the forefront of all what I thought is a company with that I will now pass the call to some gone to speak today play to us.
Thank you Claudio and good morning, everyone for those interested a detailed breakdown of our financial results for the three and nine months ended September 30th 2021 can be found in our press release MD&A and on.
And financial statements, which are now available on our website and also filed on SEDAR and Edgar.
The slide deck accompanying this earnings call was made available on our Investor Relations website. This morning.
For those who want to follow along I'm, starting my remarks on five Paul.
The strong momentum that we demonstrated in the first half of the year continued in the third quarter with total revenue for the period growing to $27 1 million, an increase of 68% from the prior year.
Ascription revenue were $25 1 million, representing 93% of total revenue for the quarter and up 66% from the prior year same quarter.
Professional services revenue in the third quarter were $2 million, an increase of 102% from the prior year period.
I saw you noted the $10 2 million net yeah are added in the third quarter was the highest ever for the table and continued the robust trend of quarterly net additions as shown in slide four.
At the end of the third quarter, we had $103 5 million in a or an increase of 60% over the $64 6 million in air or at the end of third quarter of 2020.
With 2646 customers at the end of the third quarter of 2021 our company wide average contract value or <unk> increased to $39000 up.
One 3% from $32000 at the end of the third quarter of 2020.
This quarter a T V from new customers grew to approximately 59000 compared to approximately 46000 in the second quarter.
Nearly 80% of our new logo and cross sell contract were multiyear deals.
One of the underlying trends that we were excited to see this quarter was the broad based growth and enterprise deals.
Almost half of the ear are generated for new logos. This quarter came from deals over $100000 and there were no deal.
Seven figure in value.
To further emphasize the breadth of our enterprise wins.
Onto the deals signed valued over $100000, Indiana are well almost double when compared to the second quarter.
Overall, we are very pleased with the direction that our kpis are trending reflecting the continued progress in executing our growth strategy.
Okay.
Moving on to slide five.
The gross profit margin for the third quarter was 79% of revenue, which compares to 80% for the second quarter.
The slight reduction in gross profit margin is the result of the investments we've made this year and our customer success and professional services team to facilitate the rollout of our multi product strategy and to further enhance customer support.
To be clear these costs, primarily relate to stopping and we expect to gain leverage on these investments as our revenue scales.
We expect to return to low 80%, 85% gross profit margin level in the next several quarters.
On slide six you can see a summary of our operating expense line.
Total operating expense for the third quarter increased to $19 9 million compared to $13 9 million for the prior year period.
Included in the $19 9 million of operating expenses is a foreign exchange gain of $4 8 million relates primarily to the cash on our balance sheet and is therefore for the most part unrealized.
Operating costs, excluding the gain were $24 7 million slightly higher than the $23 6 million in operating costs reported on a comparable basis in the second quarter of 2021.
G&A expense of $6 8 million declined as a percentage of revenue from 27% for the second quarter to 25, 2% for the third quarter as we realized some further efficiencies from increased scale.
Compared to the second quarter sales and marketing expense increased slightly as a percentage of revenue to 41, 2% from 48%.
R&D expense as a percentage of revenue revenue remained unchanged at 22% compared to 24% for the second quarter.
Yeah.
Heading into 2022 we will continue to invest in sales and marketing, but with a long term expectation of maintaining expenses as a percentage of total revenue in the range of 35% to 40%.
We have always been efficient and the level of capital, we deploy to generate organic growth.
This will continue to be our approach.
Leading with innovation remains core to our DNA and R&D expenses should remain near our expectations of 20% of revenue.
We reported an adjusted EBITDA loss of 2 million for the third quarter of 2021 compared to income of <unk> 6 million in the prior year period.
We reported a net profit of <unk> 7 million for the third quarter of 2021 compared to $1 2 million net loss for the prior year period.
As already noted the net profit for the third quarter reflects an unrealized foreign exchange gain of $4 8 million finally free cash flow was negative $1 million in the third quarter and we continue to have a very healthy balance sheet with net cash and cash equivalent of $216 million.
Last quarter, we noted that we were finally getting to the point, where we expect to begin to realize greater benefits from scale and I think we started to see this on the G&A line in Q3.
We think we will continue to see operating leverage in G&A next year.
As we finalize our 2022 budget our focus is to continue investing to organically grow revenue as fast as we responsibly can.
Our sales pipeline remains very strong and we think is the best use of invested capital given our low customer acquisition costs, which we believe is amongst the best in class into SaaS industry.
With that I'll turn it over to the operator now to take some questions from the analyst.
Thank you.
I would like to ask a question. Please press star one on your telephone keypad. Please ensure the mute function on your phone is switched off till now your signal to reach our equipment.
If you find that your question has already been answered you may remove yourself from the queue by pressing star two.
A reminder, we ask that analysts please limit themselves to two questions and return to the queue for any follow ups.
Again, its star one to ask a question.
Yeah.
We will take the first question from Stephanie price from CIBC.
Hi, good morning.
It sounds like the.
Good morning, it sounds like the average a C D on new deals in the quarter was obviously much higher than that the total H D D.
It sounds like enterprises, driving that growth just hoping you could break that down a little bit more for us in terms of what you're seeing from enterprise this quarter versus prior quarters.
Stephanie Good morning, I'll ask just speaking.
You're correct, we continue to see strength in our enterprise segment as a result of investments, but also a recognition that our product is a much sure scalable and stronger and satisfies the needs of larger donations.
When it comes to breaking down the wide signed it I'd say, but are there.
There is one primary contributing factor Stephanie and bodies.
Our product has proven to be able to solve.
For multiple use.
Use cases altogether, we referred to that in our language and in the script is hybrid use cases, but when it comes down to realize the Hawaii also is is producing higher.
Ear on revenue, it's simply we're addressing different users populations you know organization, we're helping organizations routine or people are asking about the organization's them keep their customers' experience.
You know a high customers educated there when when you're able to do that on a frequent basis the end users.
The average contract or hot and their resulting in all your a city that is the biggest trend. We're seeing there is there is certainly a positive momentum from very thoroughly adoption of new products, which we are getting better and better at including at all conversations and despite it being early days, where most of these products.
We're very satisfied with the initial response of the market.
Great and maybe on that that learning suite, maybe you could talk a little bit about sales approach for the full suite and whether you're leading with the learning suite or the core modules and any color on growth the customers that are signing up for more than one product would be appreciated.
100% there.
There are several ways to look at the customer journey and the simplest way that I can pass it all I think he is looking at the first the isolation of let's say the new logo.
Posture of the company and then at the continued expansion of our customers we've been clear that our approach to Hum are.
Driving the athletes alerting C or not to sell the suite.
I'll call the active stage, while meaning a new logo. We are we would much rather win the trust of our customers and then continue to do an excellent job and continue to solve problems for them rather than squeezing as much as we can upfront.
Having said that the.
The capability of selling the suite and the way we approach. It is still very learn the breathe them. Then we believe our flagship product to learn there is the strongest in the market to satisfy enterprises need of hybrid and it becomes very natural again to Ben.
Open up the conversation to the other.
Two other products on the on the upsell from too.
As long as we do an excellent job at creating a intimacy and coverage at the field level of our customers, which we're extremely focused on.
We we have an opportunity not only upsell, but also cross sell across the entire customer 360 environment.
I hope that answers Stephanie.
It does thanks, so much.
Thank you.
We'll now take the next question from Daniel Chan from TD Securities.
Hi, Good morning, just wondering if you can give us more color on the cross sell the great work that our e-commerce and cloud computing customer what will they be doing for you and what is the agreement struck down in other words is it like a revenue share model any color would be appreciated.
Hey, Dan.
You I'm sure you understand that when we were not.
Public about actual you know logo names that are certain restrictions that were subject to as to what we can share.
So.
I appreciate the question I'd say.
Along with what Stephanie just off that success in that agreement reflects empower your strategy when we sign a organization and particularly true with organizations that are all the very large magnitude geography.
When they have multiple businesses one of our jobs is dedicating the strategic account management with two map and understand the opportunity that we have across the organization. This this success with this organization is a reflection of that and we have a good understanding deep understanding of our customers' potential.
And in this case with this e-commerce and cloud provider. We you know we were granted the opportunity to serve them and other business. So for <unk> to address their needs and once again I would love to give you all the color in the world the but but there are certain terms that were bound to and and I hope you.
Understand thank you yeah, but that is Claudio speaking.
The the way, we expand that through cross selling if godmother on every industry.
I mean in this case, the ease and e-commerce vendor.
Can't imagine another pretty cool.
Companies across the world.
Worse.
And they buy most people do <unk>.
For every five at let's see.
As a company and you could call more use cases, expanding a lot all the best to Kelly.
You know having more users who are buying more products from the same entity or the same department or expand the horizontally buying multiple LMS is the or expanding that to the extent the enterprise which of the modules.
More use cases towards seeing barilla mass, but multiple departmental before giving each of them.
Multiple companies, it's very common for us.
Thanks for that it's very helpful. And then just customer wins continue to be really good I'm, just wondering whether you're still displacing incumbents or whether these are mostly greenfield opportunities. Thank you.
Hum.
So.
Uh huh.
You know the displacement is the pattern.
In all of the enterprise segment Theres no doubt.
There was a target for that.
That is.
So when we talked about addressing the needs of hybrid of customer workforce will be improving the experience of the customers of our customers. We find that in many instances even larger organizations I'm not addressing that problem. Yet. So there is a if you will.
In spades within the.
An environment, where that I've already been but the vendors that are more legacy crops and they were used for compliance and internal training. We're not addressing what we believe is the form the scope of the digital learning experience again internal and external.
<unk>.
On the smaller markets again, we're very fortunate we operate horizontally across multiple industries and we are adopted by companies of all different sizes as a mid sized enterprises. Both in the smaller size of our customer base and for sure we find deals that organizations no.
Not always equipped to be the best in class LMS or they are the very first I get Asian, they outgrow and when they do old girl later it is our time to set the NMM because once again, the same sort of scale architecture experience and recognition in the market we helped them get.
Stefan has in whatsapp through out there.
Great. Thank you.
We'll take the next question from Gavin Fairweather from Cormack.
Oh, Hey, there good morning.
Good morning, just just on the enterprise deals.
Curious you know what what's driving the pick up are you seeing more deals entering your funnel or a greater win rate or both.
Win rates remain.
Oh Fantastic we were very pleased with it we believe that is a product of the many factors and for sure that he's.
A element.
The recognition in the market because when you have the.
I think the funnel consistent of enterprises. Your brand also gets recognized as the leader and we believe that is the case with all of them.
There is also the truth that there'll be intentionality, we have been.
Investing in the enterprise segment as we continue to mature our capabilities to satisfy the needs of enterprises. We were more conservative if you will in that segment years ago, but as we continue to win a very large organization. Our strategy has been to drive the more enterprise success.
And finally, I would say that our customers grow without that's the beauty of our business.
Hey.
The customers that have entered in our she will sales funnel and became part of our family.
What you will see the mid market customer then over time due to adoption, including expansion of entering into our enterprise book of business.
Those are the sides grow to maturity. So overall, our posture towards enterprises is very intentional where Stephanie organization to be really good at it but we remain in a result, the company that serves multiple industry and and and the multiple sizes of enterprises.
Thank you for that that's very helpful and just secondly for me I've been hearing from some other companies that there was a bit of a slower than normal summer with elevated vacations and the like obviously you didn't see any slowdown in your sales production.
That's for your general take on the operating environment that we saw in Q3.
Well, we we we know seasonality.
We understand the sort of the market motions.
From geographies that could be the need for a month and this year was a it was no different frankly.
We've seen it but it was a huge return a tool of getting out of the house and adding a normalizing in many places.
Seeing as the reflection, but again, our ability to deliver a record or that caught you off for four months and continued to grow strong pipeline. We believe is a testament to all solid that we are and how their style. Our offering is there any you regardless of the environment whether people are in <unk>.
It's all of the remote.
Yeah.
Satisfies both the scenarios and we've seen that in the numbers.
Great Congrats on the strong results. Thank you.
Thank you.
We will now take the next question from Richard <unk> from National Bank financial.
Yes. Thank you.
In regards to these are enterprise wins.
Guests and is this just a guess is that the absolute dollars to acquire those customers, there's probably a higher but.
On a relative basis, you know, let's say you know on a per dollar of air or are they higher or lower or about the same as the remaining base.
Yeah.
Hi, Richard I would say in terms of the dollar acquisition for the higher enterprise customers I don't think Theres a significant jump in if you. If you kind of do the math around our CAC ratio, you're looking at the sales and marketing expense over the air or they'll be out of the quarter.
That's tracking relatively.
And so I think part of part of the story that Alessio spoke to earlier is we continue to you know what.
One of the ways, we continue to expand the ACB is landing and expanding that book of business within the customer base and so we've been very efficient in doing that but in overall landing enterprise customers.
Relatively efficient and our CAC ratios and so I wouldn't I wouldn't say, there's a much higher cost to acquire those customers.
Okay, and I guess the reason.
Probably there is also probably a factor.
Sales organization maturity.
We have onboard and then we've invested a lot in sales and marketing over the past year and now these the incredible talent, which we have in the organization.
Gaining confidence.
Training also thanks to the table to sell our products serve two piece correctly positioned correctly to densify customer.
So it's a mix of all that.
So.
Out of this lockdown all the investment that we made and we are making to strengthen our team and our organization.
Okay, Great and then a second question you know relative to serve growth I don't know if you want to use or.
A C V or anything.
Annual recurring revenue, but if you look at the growth can you maybe share with us.
The split in terms of the contribution of that growth, where it's coming from whether it's new or from existing expansions here.
Yeah, I mean, I think if you look at the C V. Richard I would say the primary driver for the growth in east even if it is in the numbers you would've seen on the new book has gone up from 40 $46000 within the quarter to almost $60000 I would say the primary driver for.
For the continuation of growth in HCV is the size of use case for our disabled learn product and whether it's a department level our organization level. What we're seeing is the complexity and the hybrid application of our platform.
In solving our customers' needs is really what's driving the increase in HCV and maybe a bit more color as I think I'll. Let you spoke about the new products you know some of the products have just been launched in the past few weeks in the past quarter.
They haven't been a big driver in Q3, and I think we need to bear that in mind, our cause because as they ever been launched very recently, but we certainly think we're better off we're positive on those launches and we have a strategy that unless you alluded to at the start of the call and so.
We will factor that Ah report any progress on that as we kind of get some more data on that in the near future.
Yeah.
I appreciate that thank you.
We will now take the next question from Paul steep from Scotia capital.
Great. Good morning could you maybe just talk to how much of that enterprise channel has been driven by either OEM partners or has it been.
Iraq, when you've been picking up these wins in that.
Maybe the second part of this.
We've talked lots about it but I guess I'm just trying to understand why now what what's driven this change that sort of lifted hybrid obviously, you're getting multi department or bigger wins is it just simply profile or has there been another any other changes you may be made.
Two even a year ago that you're now seeing the fruits of thanks.
Oh, Thank you great great questions on the OEM front.
First as director and director remains our largest largest contributor contributor in terms of revenue Oh, We M is the business or do we start the building and we have some incredible partnerships that continue to bear fruit. So they are according to our.
Our expectations and we have plans to continue to grow that business again, the biggest contributor but more of them more than 50% is a is the direct channel in the form of new logo and upsell expansions both.
When it comes to the why now why why are these organizations.
Organizations coming to the table with more need them.
It is not now a trend Paul we believe this trend has been an underlying trend largely underserved for a long time the table started selling it in fact did their first initial what we would call hybrid today, our customers you know.
Five six years ago, but the market wasn't it wasn't quite there yet.
And we've continued to invest in this technology, we've become over time, we've got gained a competitive edge over auditors and our technology is now designed to satisfy that use case with a degree of flexibility in depth.
Other vendors are not there.
We think that Theres a market posture that is also reinforced by the Haynesville organization to do a better job better at getting their employees. We leave in the grid resignation World. The company has to do extra work to keep their people happy trained motivated enough skilled and on the flip side, we believe in it.
Ascription economy, and when that office you'd need to do the same exact thing that you do with your employees with your customers that our technology is prime for both of those scenarios and enterprises across all verticals are understanding that so we believe that fundamentally we're seeing just the maturity of a trend and initiated a long time ago.
With our technology capabilities that anything in ballroom and.
The one of the market because it just supports the need for that yeah.
Yeah and the.
Not take for granted.
All the industry understands.
That training.
Not only internal training.
Hey.
Chuck.
Because most of the organization and that's what we are learning speaking, we may be a strategic vendor.
So that kind of conversation is a good day.
This is the thing that learning is sharpening.
You too.
Make training for compliance so skills and language training.
Theyre not there are companies with quarter over quarter.
Hi.
It'll be a map of our online learning of training.
What was the old school.
And these are helping us because we are reaching a different story.
And Paul I'll, just add one point to it I think if you think about the environment out there from a labor market perspective, and I'll, let you touched upon this.
Art.
Our learnings, Sweden, and our platform is one of the most cost effective ways to engage employees improve their efficiency, but most and one of the most important problems out there is to decrease attrition and what we're seeing out there in the in the market. So that is also something to be factored in as our customers think about solving the engagement there.
Our employees as well as the customer needs.
Alright, one last very quick one I promise just.
If we think about moving because you've highlighted that you didn't get large any sort of whale deals in the quarter should we now be thinking that the time to full deployment in an enterprise has materially shrunk that like you're going in with larger deals and that we now should see full deployments more.
Faster than we might have thought about thank you.
Every every customer as it is on the use case.
And every use case is unique.
So there is no eh.
C B.
Ooh.
Frank that some deployment is faster or some deployment is longer and what we are seeing is that.
The more.
Yes.
The integrated inside of the enterprise the software stack.
The more we need to integrate that say that we are working to add.
<unk> got some metal to integrate the better.
Table with other stuff and this caused a realignment that you book a neck.
Which is a pre built integrations containing probably more than 400, the we call. It the RAC fees, there's a pre built integrations with many other software but.
These are this is not shortening materially.
Deployment, the Onboarding and the launch of the project.
The increase in the data that we can trade them.
Inside and outside the table, thanks to integration that gateway.
And Paul I would just add to that we were extremely pleased with the increase.
In my remarks, I noted the fact that almost half the internet or add this quarter were deals over six figures and if you look at the quantity. It gives us the consistency and and we're penetrating into the next level in a nice fashion I think we are extremely pleased to continue to build on that success.
Yeah.
Thank you.
Okay.
Right.
We'll now take the next question from Martin <unk> from <unk> capital markets. Please go ahead.
Thanks, all for taking the question and congrats on the good numbers guys.
Question is are you guys.
Air our incremental ore was around 10 million for the second quarter in a row is there any reason why that the ceiling or are as you know are the are the pieces in place for you guys to continue to increase incremental IRR.
Quarter over quarter.
Yeah.
Hum Martin Thank you for your compliments first of all in and we you know conceptually we are we see no ceilings. We believe we are designing the organization to continue to perform and perform but.
Altogether, we have plans and the results where we're.
Bringing to the table are consistent with our plans.
Our plans are to continue to grow the topline and got our <unk>.
And Hum our plans are to continue to succeed him along the lines of what we just discussed we don't believe there is a.
The reason why we shouldn't be seeing that 10 million number okay.
To grow in the future.
I'm not trying to be cautious in any way, but I would say just that.
This is not a.
This is a reflection of what you get plans today and we'll continue to plan for improved performance in the future.
Yeah.
On top of that.
We really believe that the consistency is one of our keys that you. So I go like spikes I don't like 10, 30 and mine planning.
I like 10 11.
So let's say that.
We internally, we do have a pretty elaborate three pillar two.
Kris.
One is our comfort zone, our lull, but which is all one element.
Which is leaving with my 17 year so.
My second son.
I have a daughter in that.
Let's say that the second is the OEM.
Oh yeah.
Crazy ball.
Product.
And we are working to get more partners working on all year, but also different ways to pitch, though again don't forget that we allowed to say.
No, which is another way to ask the table bad debt everywhere.
There is a standard terminology, which is learning in the flow of work.
The third one are the new cells and those cells, we have which are our new products.
Learning analytics.
Hey.
Impact.
And then the new ideas, we are working on so the.
The future for the table is an execution oven.
The mix of the strategy and not making one bet on our comfort zone.
All in one basket.
Innovation that needs to meet the two groups, but they are working on now and Martin I lied one more too cloudy of what that is that the other area that we continue to work on as you know is the geographical expansion.
And so as we think about you know.
We acquired our matches Eco now got momentum in France, We have opened an office in Germany, and built up from ground up and there are areas in the world that we haven't tapped yet and that will be another area of focus from growth perspective.
Okay.
Great guys. Thank you very much for that that's all for me.
We will now take my question.
We will now take our next question from Robert Young from Canaccord Genuity. Please go ahead.
So in the case that you got it.
Our artist growing going forward do you see that you need to expand your feel function by.
Clearly or do.
Do you see your current sales function as a sufficient to kind of grow at disorder.
Yeah.
Hum.
Great question on on growth of the sales function.
Yeah.
We will continue to grow the company organically across the board from.
Engineering products and services and for sure there's consideration about continue to invest and grow in sales notwithstanding that every time, we add a.
Sales function, we contextually.
So our demand capabilities, but you know you know our focus really is we believe that we've reported the other needs 1600 customers. It is it is really important for us to continue to delight our customers to make sure that our customers have the best service in the industry, we really think about that day and night and.
And tried to implement the strategies to lead to that happening and those are not in sales alone there across the board and the company really now when we think about growth and what Pablo said.
We're just now in the prior question as you know we're distributing our success across a few growth vectors and in one of those if you will it's also our ability to continue to grow our customer penetration in order to do that any investment, which we believe will be accelerated.
He is validated by our learnings and needs to continue to increase our share of wallet in our base.
We believe our installed base, our existing customers that deserve more coverage, which will in turn allow was as well as the more if you will.
So the field that's sorting capability.
In in in our base, but because of the because we have the most studies the data that we have.
Now with more problems, we can solve with great technology and it would be it would be a.
We'd get PT knocked them, taking that opportunity and therefore, we're planning accordingly, so absolute more coverage in debate the at all levels.
So for the customer experience is what we aim for.
Okay. That's really helpful. Thank you and just on the second question I was just wondering if you know the inbound or are you seeing from enterprise customers and the overall demand for L. M. S. N learning how is the velocity of cross sell kind of increase have you seen that.
The chasm too you know cross selling the modules in your model yeah at the most.
Have you seen that sales cycle come up with that kind of a relief.
Yeah, we would what it is it is true across the board every upsell or cross sell our sales cycle has the huge benefit of having a much.
Higher velocity when compare to a new logo cycle look it is no secret you're not gonna go in most instances through a new contract.
<unk> that our terms of pre established that there is already a customer that is giving you face and if theyre interested in buying more if they already have whereas when you first meet somebody you have to win the trust and faith. So that our psychological elements are resulting to that and the facts and the numbers confirm your hypothesis.
Pauses as an integration so we love the up sell cross sell business also because of the velocity element.
Which is again, though are a result of our investments in customer experience and I continue to underscore that because you know our desire is for our customers to rave about it publicly and say that was the best of what we do and we're working very hard to accomplish that.
That's very helpful. Thanks for taking my questions.
We will now take the next question from Philip status from Barnbrook capital market.
Good morning, guys can you provide some more color on how the OEM partnerships are performing how much of the revenue for the quarter came from the Oems, how ceridian, forming and how does the pace of the HR ramp compared to the earlier days of Ceridian.
Thanks.
Thanks morning, Philip a clicker in here you all I'll speak to the overall OEM. So when we when you think about ceridian and firstly I'll start with Ceridian.
You need it to be very pleased with how we're performing with trading in.
It's a meaningful contributor to our growth story, but when I think about the other OEM and I would call. It an alliance partners that we signed in the past few quarters I'll start with them, which are we sign them a chart I think probably a year or so ago now and as you kind of continue to say, it's the same story around <unk> with patients and working with.
Our partners and implementing the solution.
They provide to their customers that patients overtime pays dividends and we're seeing that an immature which is now becoming a meaningful contributor towards the growth in our E. R and when I think about the or the alliances and Oems have you signed in the past few quarters.
That patients and those dividends.
Patients will see some of those dividends come through in the next in the early part of next year is what we think.
All that said I think the other factor that we also still see today is that you know our solutions solve for multiple multiple verticals multiple use cases and so it's not just from an HCM perspective as you know we signed an I T service managed provider and other and sales enablement providers, we actually do see as a really.
Our pipeline of future alliances and Oems that we can partner with so we are optimistic in this area.
Thank you.
As there are no further questions I would like to hand, the call back to <unk> for any closing remarks.
Thank you guys for staying with us for another quarter let.
Let's meet the Q4.
And the nice.
Z.
Because I think that's the next one will be off the grid.
The other day one.
Thank you that will conclude today's conference call. Thank you for your participation ladies and gentlemen, you may now disconnect.
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