Q1 2022 Everbridge Inc Earnings Call
Good evening and welcome to the ever Bridge, Inc. First quarter 2022 earnings conference call.
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I would now like to turn the conference over to Patrick Brickley, Chief Financial Officer, and Cole C. E O O F. A bridge Inc.
Please go ahead Sir.
Thank you good afternoon, and welcome to ever Bridges earnings conference call for the first quarter of 2022.
This is Patrick Brickley, Executive Vice President and Chief Financial Officer.
And interim co CEO with me on today's call is Vernon Irvin Executive Vice President Chief revenue Officer, and interim co CEO .
After the market closed we issued our earnings release, which can be accessed on the Investor Relations section of our website at IR at <unk> Dot Com. This call is being recorded and a replay of the teleconference will be available on our IR website at the conclusion of today's spot.
During today's call, we will make forward looking statements regarding future events or the financial performance of the company that involve certain risks and uncertainties. The company's actual results may differ materially from the projections described in such statements factors that might cause such differences include but are not limited to those discussed in our forms 10-Q, and 10-K as well as other.
Filings with the SEC.
Information provided on this call reflects our perspective only as of today and should not be considered representative of our views as of any subsequent date.
We explicitly disclaim any obligation to update any forward looking statements or outlook.
Also during today's call, we will refer to certain non-GAAP financial measures.
Conciliation of our GAAP to non-GAAP financial measures is included in our press release.
Okay.
On today's call Vernon will review our business highlights.
And I will provide more details on the financial results and outlook and then we will open up the call to Q&A.
With that let me turn the call over to Vernon.
Yeah.
Thank you Patrick and thanks to all of you for joining us today.
Looking at first quarter, we delivered solid results that exceeded the high end of our guidance in revenue and profitability.
Revenue of $104 million, which represents an increase of 22% from a year ago.
Adjusted EBITDA was $2 $6 million.
The results serve as a positive indication.
Which validate our strategy to better focus and align our organization to meet the multibillion dollar opportunity we are pursuing.
To quickly recap last quarter, we outlined three strategic actions that we're taking to significantly simplify our go to market process and drive higher productivity.
Enhanced.
Sustainable growth over time.
First we simplified our product offerings moving from several dozen individual point products to focus on four strategic see Yum bundles.
Are you targeting a specific buyer persona with unique and differentiated technology solution.
These four pillars are senior for digital operations.
Senior from business operations.
Four people resilience.
For Smart security.
We believe this will both simplify buying choices for our customers and simplifying streamline our sales processes for our team.
Second in the public warning market.
We are continuing to leverage our industry, leading win rates to drive land and expand opportunities as well as apply increased focus towards driving network effects. The multiply the opportunity inside of the region.
Once we start to penetrate it.
We have over 6000, private and public warning customers.
Significant opportunity here to sell into our broader suite.
And third we are pausing material new M&A.
Stead prioritizing development efforts to focus on accelerating product integrations across our existing acquired assets.
In addition, as Patrick will discuss in greater and greater depth.
Today, we are announcing that our board and management team have implemented a plan strategically realign our resources in order to accelerate and grow our investments in our largest growth opportunities.
While making our operations more efficient.
We anticipate this will both produce material improvements in profitability and support sustainable growth.
During the quarter, we saw early evidence that our focus on strategic realignment is resonating with our customers, which validates our strategy and gives us increased confidence as we continue to execute on our plans.
We also saw positive traction with our partners as evidenced by an increase in the mix of our deals which came through partnerships.
Our partners have responded well to our simplification strategy and we're helping to drive high velocity deals.
During the quarter, our resiliency and business continuity remains top of mind.
For our global 2000 organizations.
Ongoing effects of the COVID-19, pandemic and the impacts on both natural and manmade critical events, such as natural disasters and cyber attacks are causing organizations globally to evaluate their business continuity plans and accelerate their response to disruptions.
Of course recently the unfortunate events in the Ukraine have been at the forefront of the world's news.
And we are honored to be able to help customers in impacted areas.
By providing a risk intelligence and other technologies to protect their people.
And assets.
While this backdrop in the first quarter, we continue to see strong demand for interest in critical event management and public safety technology.
As evidenced by healthy year over year growth in our trailing 12 months of ASP.
And the number of deals larger than $100000.
Let me now turn to some examples from the first quarter that illustrate the demand we're seeing for our critical event management.
In public safety.
Pursuing him we've closed 12, new growth deals around the world in the quarter.
In particular, we landed a number of deals which illustrate the four strategic solutions, we identify as focus errors.
For example theme.
<unk> for digital operations solves for incidents.
Incidents and cyber security problems across both digital.
In physical assets.
During the quarter one of the world's largest credit card processors expanded its use of EVAR British digital operations product and platform across an entire enterprise, providing resiliency for its <unk>.
In operations.
Along with visibility at the company's CTO level.
Before ever bridge, they relied on a variety of unintegrated tools, which led to errors and inefficient manual effort.
We're seeing M for digital operations, they were able to streamline data flow and insights across their tool sets producing valuable efficiency.
Efficiency gains.
This significant growth still in Q1 continues to reinforce the value of our ex matters integration into our suite of products.
C N for business operations includes <unk> 911, and travel risks components to focus on enterprise resilience.
For chief risk officers.
During the quarter.
We expanded our relationship with kindred a spinoff of Ibm's infrastructure service business there.
Designs builds and manages and develops large scale information systems.
Kingdom selected ever birds over our competitors due to our ability to drive operational improvements.
For example, we.
We estimate every bridge will reduce their mean time to communicate during critical Vince by over 80%.
And drive operational efficiencies of at least $5 million over three years.
Also harbor freight tools, a leading tool and equipment.
Retailer headquartered in California, you expand it to see him in the quarter.
As a current ever <unk> mass notification customer harbor freight tools upgraded to their CGM business operations solutions package to enable enterprise resilience.
The single pane of glass offering that cm affords them the biggest driving force behind their selection River bridge.
Our factors include the full automation of notifying their contacts in stores when they are in harm's way of danger, whether in other situations.
And the ability to give their internal team teams is on safety and operational situations.
Mediately.
Additionally, we expanded our <unk> from one of the five largest banks in the United States.
And we are honored to now provide them with CGM for safety and continuity.
As well as the crisis management capability.
They chose ever British due to the breadth of our senior and platform and its ability to handle all aspects of doing with critical events.
Oh.
Platform.
As well as the ability to scale to the needs of a large organization.
Medium for people resilient serves the need to chief security officers.
And their duty of care concerns for on site remote.
Field employees.
In Q1, we're excited to have won a new deal with surge on one of the largest open pit coal export mining operations in the world.
This deal.
That was one with one of our strategic partners control risks.
Straining the effectiveness of our partners and extending our reach Sir John I was looking forward to looking to protect their corporate and mining personnel and it shows ever breads due to the completeness of our platform.
And our local presence in Latin America.
This is the first time CGM deal in Latin America, and we are optimistic that we will be able to open up many many more opportunities for us in that region.
And lastly, senior for Smart security helps Cio's NCI Soc.
Cure government and enterprise Iot assets to protect their people and facilities.
In a quarter, we entered into a contract to support the Saudi Arabias future plan Smart city named Neil.
The deal leverage our smart security capabilities to key Saudi Arabia residents visitors and assets safe in the face of potential threats.
This was aided by the network effects of having already won Saudi Arabias countrywide public warning system.
Turning to public safety market, we continue to leverage our industry, leading win rates to drive land and expand opportunities as well as to apply increased focus towards driving network effects that multiply the opportunity inside our region. Once we start to penetrate it for.
For example, during a quarter during the quarter two of the largest mobile network operators in Germany selected ever bridge to deliver their cell broadcast emergency alerting capabilities to power their German governments nation wide public warning system.
Wide scale flooding in west Western Germany in July of 2021 was the major trigger for Germany.
To implement our sell brass casting technology to reach the entire populations across Germany.
And will serve as an enhancement to the country's emergency response.
Every bridge now powers to National public warning system for nine European countries.
And over 20 governments worldwide.
More than any other provider.
In India the <unk>.
Work effects from public warning contracts in.
In four states led to the fifth Street state wind during the quarter with the government of <unk> the.
The second most populous state in India.
The state of my roster I was looking for public safety incident response system to manage critical events and disasters, such as cycle, such as cycles, which regularly strikes the Indian coast.
No mater after chose ever bridge to provide that platform.
And thirdly, the city and county of Denver, Colorado added ever bridges resident connection feature to its mass notification system to maximize the reach of critical system that alerts.
Allowing public safety officials to notify a higher percentage.
Other residents in the event of public health risk and disasters such as wildfires.
Every bridge already serves more than 150 customers across the state of California.
And this deal is an additional demonstration of successful network effects.
Of our solution in a state of Gulf, Colorado.
These examples of powerful network effects.
Illustrate why we remain optimistic that we can expand our public safety business globally, and driving enormous strategic value from it.
We remain confident that we will see a continuation of our high win rates for key public warning opportunities.
And just as if not more importantly, we will continue to benefit from network effect opportunities that expand our global presence in Europe and around the globe.
During the quarter. We also were pleased that ever bridge was recognized by Frost <unk> Sullivan for its innovative leadership by earning the top spot in a frost radar command and control software for critical national infrastructure, where C&I.
Airports.
Safe cities.
Global for 2021.
According to Frost <unk> Sullivan Global command and control software spending for airports safe cities.
And the C&I market will reach 537 billion in 2030.
And in selected ever bridge as a market, leading innovator in the market and the market.
Viewed as a whole we believe these notable customer wins and industry recognition serve as affirmation of our decision to simplify our products and go to market.
Pivot, our four strategic <unk> bundles.
Turning to some specific business metrics for the quarter.
We added 89 net new enterprise customers in the first quarter ending the quarter with 6220 for enterprise customers.
The decline in net adds from the trends recent trends was anticipated as we begin to wind down non core applications.
With approximately 45 existing customers choosing not to renew our noncore applications during the quarter.
As I mentioned 12 customers, either selected or expanded to our CDN platform.
A number of <unk> customers to 204.
That's up 47% from a year ago.
Our momentum with large transactions. This year continue in Q1, resulting in trailing 12 month Isps.
That were again above $100000.
Contributing to this ESP growth was 56 deals worth more than $100000 per year.
Up from 45 deals a year ago.
From a product mix perspective, 67% of the new gross sales over the last four quarters came from CDM related solutions beyond simply our core mass notification.
Our international revenue mix was 28% in the quarter and we continue to expand in every major region of the world.
Our revenue mix by vertical remains relatively consistent.
Was 69% from our corporate <unk>.
Countrywide governments and 8% from healthcare reflect reflecting a strong growth in corporate market with increasing post vaccine use cases.
As always we remind you that quarterly metrics can fluctuate.
The longer term trends continue to reflect our overall business growth.
Another focus area. This year is realizing the leverage that is inherent in our business model. Our first quarter results with positive adjusted EBITDA and exceed that exceeded our guidance range is an example of this.
We are optimistic that our strategic realignment of resources will drive attractive growth of sustainable revenue, while yielding adjusted EBITDA margins that were reached double digits.
Year end, and which will continue to grow.
Looking ahead, we are encouraged that we are seeing a return to a more face to face meetings as we emerge from COVID-19 pandemic.
We remain confident that our bundled solutions, which offer a path for growing levels of engagement can make it easier for existing customers to expand what they are seeing in bundles over time demonstrating.
Demonstrating the effectiveness of our land and expand strategy.
We are optimistic that strong.
Industry tailwind signs of customer Reengagement.
And our simplified strategy.
Should translate to further opportunities as demonstrated.
By our guidance increase.
Overall, we delivered solid first quarter financial results driven by continued success of our core strategic market of CGM.
We believe the actions we have taken to pause material M&A.
And to streamline.
Integrate and reduced complexity will drive attractive sustainable revenue growth with a meaningful increase in profitability and positive cash flow.
Now allow me to turn the call over to Patrick for more details on our financial results as well as our guidance for Q2 and for 2022 Patrick.
Patrick over to you.
Sure.
Thanks, Brian .
I am pleased to see strong execution that produced revenue and adjusted EBITDA that were above our guidance ranges revenue in the first quarter was $104 million up 22% from a year ago our net.
Retention rate continues to track at or above 110%, reflecting continued customer satisfaction combined with demand for additional ever bridge technology to expand within the existing customer base.
As we have previously discussed as we deemphasize noncore technology products, we may see a small impact on gross retention this year, but we expect the impact to normalize by next year.
Looking at the details of our P&L unless otherwise indicated I will be discussing income statement metrics on a non-GAAP basis.
A reconciliation of GAAP to non-GAAP measures has been provided in the earnings release, we issued earlier today.
Gross margin was 72, 2% compared to 73, 6% a year ago with efficiencies from greater scale offset by the short term impact of acquisition and integration costs.
Total operating expenses in the quarter were $74 1 million, an increase of 27% from a year ago, reflecting continued investments in our platform and our go to market strategy as well as the expensive impacts from acquisitions made in the past 12 months.
Adjusted EBITDA was $2 $6 million, marking our eighth consecutive quarter of positive adjusted EBITDA and coming in at well above the high end of our guidance range due primarily to the revenue upside in the corner.
And operating leverage in our model.
Net loss in the first quarter was zero point $6 million or <unk> <unk> per diluted share compared to net income of $8 million or <unk> 18 per share a year ago.
On a GAAP basis, our net loss was $19 1 million.
Our balance sheet continues to be very healthy we ended Q1 with $495 million in cash cash equivalents and restricted cash with our nearest debt maturity at the end of 2024.
Operating cash flow was an inflow of $7 $7 million and free cash flow was an inflow of $1 $5 million.
Total deferred revenue was $245 $8 million at the end of the quarter, an increase of 33% from a year ago.
As we know every quarter, our deferred revenue balance at the end of any given quarter can vary due to a number of factors, including the timing of significant new contracts and the timing of annual billings for new and existing customers.
The change in deferred revenue in any given quarter is not an accurate indicator of the underlying momentum in our business we.
We believe our trailing 12 months performance is much more indicative of our overall business trends and our longer term performance continues to support our growth objectives.
Now I'll turn to our guidance for the second quarter and full year.
As Bernie mentioned today, we are disclosing that our board of directors has approved a program to strategically realign our resources in order to accelerate our investments in our largest growth opportunities.
While making our operations more efficient.
This program supports the 2022 strategic initiatives to simplify our business and accelerate the integration of recent acquisitions.
And we will help drive our financial objectives of sustainable growth combined with improved profitability and cash flow.
The details of this program include a targeted realignment and reduction of head count facilities and other third party spend.
Further details are provided in the 8-K, which we filed today after market close.
While many of the actions within this program will take immediate effect some of them will carry into 2023.
We anticipate that these actions will drive annualized savings of between 13 and $18 million.
With near term charges of 13% to $21 million.
The positive financial impact of these actions is reflected in our guidance for the second quarter and full year.
For the second quarter, we anticipate revenue of between 101, eight and $102 2 million.
Representing growth of 17%, 18% year over year.
Adjusted EBITDA will be between negative $1 million and breakeven.
And we anticipate our non-GAAP net loss of between five 2% and $4 2 million or.
Or a loss of between $13 11 per share.
Our full year guidance reflects our first quarter outperformance and our continued business momentum.
We now anticipate revenue to be in the range of $428 two to $432 $8 million representing.
Representing growth of 16% to 17%.
We anticipate adjusted EBITDA will be in the range of $33 five to $35 5 million.
Representing an adjusted EBITDA margin of 8%.
We expect non-GAAP net income of between $10, seven and $12 7 million.
Or between 23, and 2007 cents per share based on 47 million diluted weighted average shares outstanding.
In summary, we delivered a strong performance in the first quarter as.
As we progressed through 2022, we are very focused on execution driving sustainable growth and maximizing return on our investments.
Looking further we believe we can deliver sustainable topline growth with improving profitability and positive cash flow.
Which can generate significant long term value for all of our stakeholders.
Now operator.
We are ready to open the call for questions.
Thank you.
We'll now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Yeah.
Our first question comes from the line of Matt Stotler with William Blair. Please go ahead Sir.
Hey, guys. Thank you for taking the questions.
I guess first one just on the I guess, the strategic initiatives, obviously, the strategic strategic alignment.
Wed like to get some more color on the timeline for I guess the broader initiatives initiatives you have going on right. I think you just said that for the alignment you. Just noted you'll have some of that fall into this year some of that falling through unfortunately, three but I would like to.
Maybe just expand on that a little bit and they get some update on from a broader perspective on.
And rationalize the product portfolio of any new bundles, obviously, it sounds like you're already in the market selling with these these new bundles and.
Some capacity, but when you think about.
Ramping the sales force internally to full productivity with this new structure as well as enabling partners.
With this new structure, what's the remaining timeline on that side as well.
Sure Thanks, Matt running.
Brian and I will probably tag team. This one.
I'll jump in.
With regards to the strategic alignment.
<unk>.
We've already kicked off the program. So we're already beginning to incur costs.
And you'll.
You'll see that in our earnings release and the details of our guidance.
It's a combination of head wind facilities.
Some additional spend that we're taking out of the business and it's in line with what we said we were going to do back in February .
Simplifying the business simplifying our go to market bundling our products deemphasizing non core products. This is this is really just an.
And execution steps, along the way, where we sorted out a number of details and now we're taking actions.
On.
On a number of things so.
Cost have already begun they'll still continue into next year.
The annualized savings from those we anticipate will be anywhere from $13 million to $18 million.
And Vernon I'll hand, it over to you I guess about the sort of the topline.
Outlook or progress on.
The strategic initiatives.
Yes, Thank you Patrick.
Matt as I as we talked about it in the prepared remarks, there are four.
Core fee bundles business operations people resilience.
Digital operations and smart security.
As you.
Communism.
We have three.
Customer journey bundles that reside under each of the product solutions.
So on existing customer call it.
<unk> mass notification customer.
Kim also add risk, our risks and our capability and now being a central.
Level customer for instance for business operations.
But the way that bundles are built they can vary.
Simply be able to graduate for up to a senior for safety and continuity.
Yeah.
And for instance, better.
Employee communications to the bundle.
All the way up to a full set of solutions to help with risk alert critical communications.
True <unk> capability.
So we've made it really have simplified our go to market that particular bundle around business operation is ideally suited for a risk manager or CLO organization.
Now there is again, a tiered structure to be able to graduate from a basic immune customer all the way up to full <unk>.
And as we noted earlier, we've got over 6000 customers of which a significant percentage of them are enterprise customers that we can know land and expand and grow.
Largely the work that we did.
Late last year at the beginning of this year around the bundles and around the solutions. We've put in a marketplace that work is completed the solutions are in the marketplace leveraging.
Some of our core solutions. So that's sort of the momentum that we're starting to see that I spoke about in my prepared comments.
That's very helpful. Thanks for the color.
And then I guess just a quick follow up you mentioned control risks as a partner that was involved in one of those wins, we'd love to get a broader update on the I guess the partner ecosystem in general right and I guess the expansion initiatives you have there how that layers into the strategic priorities that youre working through.
And I guess how the.
I guess rethinking of the portfolio in terms of bundles is impacting those conversations if thats resonating with the partner ecosystem at this point.
Patrick I'll take that one if you don't mind.
Important.
Our partner in infrastructure and ecosystem, we've put in place also in the case of sure John that we announced in the prepared remarks in Latin America.
Ideally suited because it was a.
One of our RCM bundles that we partnered there with with.
And with control risk so control risk who is a partner that we signed over a year ago had a significant presence there in the marketplace and as I said in our prepared remarks. They have we have a dedicated staff of Av.
Engineers and sales team that are based on Latin America partnering with folks.
Folks control risk.
We're able to go in and help them control risk provides.
The necessary infrastructure and strategy for Nox Sox that sort of thing, but it's our applications and solutions are sort of power of those things for those <unk> and so it's a combination of being able to work with them on a go to market perspective.
With their reach around their consultative solutions.
Bridge applications <unk> applications is a nice.
Sort of one to approach to that particular marketplace.
Where do you think about partnerships with price Waterhouse Cooper or Deloitte.
Same principle sort of how do you leverage the relationships that some of these particular strategic partners, whether they be alliances or.
Size.
In the marketplace, either for <unk> or for people resilience.
But don't have if you will the software platform to help accelerate the pace that our customers need in terms of responding to duty of care for their employees and managing the assets and so the consultative approach managed with our capabilities may asps and working directly with our direct sales team.
As I think another thing that we can attribute to some of the momentum.
That's good to hear thanks again.
Thanks, Matt.
Thank you.
Ladies and gentlemen, it's a request that the limit yourself to one question and one follow up question.
Our next question comes from the line of Ryan Macwilliams with Barclays. Please go ahead Sir.
Hey, guys. Thanks for taking the question just on the lower net new customer adds compared to historical quarters in this first quarter Wednesday.
One is in your core business in line with past quarters and in particular were there any like specific noncore applications that contributed to the bulk 45 existing customers not renewing thanks.
Thanks.
Yes at a high level, Hey, Ryan I had a high level.
Already mentioned it was about 45 customers.
On a single non core platform.
That that chose not to renew so you add that back to the 89 that we reported in your back in the ballpark of where we would normally land for net adds.
This is.
These are customers that tended to pay us on average around $3000 a year.
The result of an acquisition that we did.
<unk> of years ago.
<unk>.
That was an acquisition that came with great core technology and customers.
<unk> and talent and we've integrated.
What we want to from that end.
And we are deemphasizing.
The rest of what came with that.
Acquisition, and we're doing that sort of across the board in line with what we said back in February that we'd be doing so you should anticipate to see a little bit more of this but as it happens we'll call it out for you.
I appreciate that color.
Then just looking for an update on the potential CEO search like is there a way to think about maybe where we are in that process or has any thinking involved there I appreciate tomorrow.
You want to if you remember I'm sure Martin.
Happy to take that one.
Thanks for the question.
As we stated.
And last quarter there is a.
Let's see you enact a CEO search.
That is ongoing.
We have selected a.
In the first quarter.
Search organization.
Focus on SaaS based technology Ceos.
And we're working through that process with a number of candidates.
I think we also referenced that both Patrick and I are candidates for from an internal growth perspective.
Our board of directors.
That's sort of better managing that process and we'll continue to report progress as we make it but.
That is still an ongoing process right.
Good color thanks, guys.
You bet.
Okay.
Our next question comes from the line of Scott books with Needham. Please go ahead.
Okay.
Hi, everyone.
Thanks for taking my questions here I've got two.
Patrick I wanted to see if you can help us with.
I guess the math around the strategic alignments. Your adjusted EBIT guidance is effectively unchanged for the year, but you're already starting to move forward with some of these initiatives I guess where are these already built into your guidance at the beginning of the year or are they not going to be one time down how should we think about them.
Flowing through because I would have figured that we'd start to see some of those savings and maybe an improvement on that adjusted EBITDA right away if you're starting today. Thanks.
Thanks.
Yes, it was effectively thanks for the question Scott It was effectively.
Reflected in our original guidance and just over the past couple of months we have.
We've shored up the details and we're executing on it.
Got it thank you and then from a.
Questions for Vernon you had talked about I think you mentioned a higher mix of deals through partners in the quarter.
I guess is there any commonality or similarity between the deals that youre that youre able to drive through partners in the current quarter and is that something you feel that can be repeatable going forward.
Yes, I think we preview.
Previous.
Reviews discussed that we think the partner our indirect strategy.
As an important part of our business.
And so I think simplification of the bundles.
Is resonating very well with our customers and with our partners.
So we should expect to see continued.
Involvement with our partners around the four bundled business operations people resilience and in digital.
Operations and smart security.
I think the partner.
<unk> strategy is.
Early but showing evidence that again, the simplification of the integration work that.
Patrick and I talked about last quarter is starting to get some momentum.
Great. Thanks for taking my questions.
Our next question comes from the line of.
Tillman with Truest. Please go ahead.
Hey, guys. This is Joe Meares on for Terry Thanks for taking the questions.
Just wondering if there if there's been any change in the last 90 days and either the contraction of international public warning contract sizes or the elongated implemented implementation times you spoke about.
Our timelines to elongate and stable or are coming in.
Yeah.
Hi, This is Patrick.
I'll jump in on that one.
We're still seeing a similar market conditions.
Whether that.
Thompson compression or timing.
Timing to implement.
This is a really strategic opportunity for us.
We anticipate that we'll continue to win more than our fair share of deals we're really excited about.
The two wins in Germany, and look forward to building on that within Germany, and landing more and more business.
Yeah.
And.
We have not.
Explicitly put that when into our guidance for the back half of the year because it's.
The delivery timelines on these projects are still.
Unpredictable.
That's really helpful. I appreciate it and then just as a follow up with.
With the continuing rebound in business travel I'm wondering if the outlook for the Anvil business has improved over the last 90 days and if youre seeing any benefits from CDM suite deals there.
Thanks, so much.
Yes, maybe we'll tag team this one.
<unk>.
We envision.
An important new part of the business very strategic for us.
Travel risk management is something that our customers have asked us for and certainly return to business travel will be will help that business grow and for any can talk about the trends in that in Q1, we were excited.
Honored as Brian described earlier.
To be able to leverage.
Travel risk management to assist the number of our customers, who had people or assets in Ukraine, and help them the vacuum maintenance people and to our assets and.
We take that as a proof point.
For customers wanting.
Multiple different capabilities from one vendor on one platform.
We'll look forward to continue.
Continuing to pursue that strategy, but vernon anything else to add there.
Yeah, Patrick the only thing I would add is.
We think that the travel risk.
<unk>.
Business is.
I think as you pointed out Joe.
We'll benefit from.
Companies starting to travel again.
We think about travel risk management as part of the <unk>.
<unk> people resilience.
Solution.
Ideally fit for <unk> CFO .
And one of the things that we're working on rapidly here is as further integration of the CRM Anvil CRM capability.
Aligning it as part of the bundles that inside of the people resilience.
Integration work is completed.
Our people resilience bundle will get stronger.
Allowing a single pane of glass.
And the integration of obviously.
But more specifically.
Being able to make sure we can protect employees that are traveling so making good progress there and more to come.
Appreciate the detailed answers thanks again guys.
You bet.
Okay.
Our next question comes from the line of Brian Peterson with Raymond James. Please go ahead.
Hi, Thanks for taking the question so Patrick O'brien I, just wanted to clarify on some of the changes.
I know the international opportunity has been big for you I'm curious how much of the changes in our go to market side are kind of domestic versus international I, just love to get some clarity there and how does the partner channels, they kind of fit into that maybe domestic versus international.
I'll take a run at the public warning question and the partnership part of the question.
The <unk>.
When an.
In Maharashtra that we spoke about.
The German when both had partners.
That assisted in both those those deals so the partner.
Strategy is very active as it relates to public warning.
And in those major countries.
Wins.
And our partner strategy as a global partner strategy in fact, as I mentioned the surgery on win in Latin America was with control risk in Latin America.
But we are starting to see that activity pick up as well here in what I call the Americas, particularly in North America or the U S.
So we've seen early evidence that the strategy is.
Yes.
Working and we can we can point to examples of that in the Latin America and announcements, we made as well as the two public warning.
Wins that we had in Germany, and India and as I said I think.
We will see some favorable.
News that we're working on here in the United States as well, but.
It's a global strategy and it's early and we're going to continue to.
Take full advantage of that.
Thanks, Mark and maybe Patrick just a follow up for you on retention I know you mentioned some non core customers that kind of moved off I'm curious how has the core customer retention compared versus your expectation. So far this year. Thanks guys.
Yeah.
Thanks, Brian .
It's been at in its usual range we.
We have had some isolated attrition.
Which we had a we had mentioned back in February that we anticipate seeing.
Within the core but otherwise.
Customers have expressed to us.
And enthusiasm that we're really focusing on integrating the acquisition so that we can help them.
To adopt and expand and deliver more value to them.
While we pause future.
And our material M&A so.
Customers are liking this we remained very sticky.
And.
And that should help us continue to propel our ability to expand.
Expand into the base as we simplify the bundles and the go to market strategy.
Okay.
Thanks, Patrick.
Our next question comes from the line of Michael children with Wells Fargo. Please go ahead.
Hi, This is Michael Berg on for Michael turn team. Thanks for taking the question I want to double click on the strategic initiatives once again.
Not to belabor the point, but with the company, taking a number of cost.
Both in short term and long term how can we think about.
Levels of durable growth over both the near term in fiscal 'twenty, two and longer term.
And the next several years.
Yeah.
Well so.
Thanks for the question this is Patrick.
<unk>.
Coming back to that.
To the overall program that were.
Running.
We're simplifying.
Our business to focus on the core and our largest growth opportunities.
And as we do that.
We anticipate we'll be able to drive sustainable growth.
And operate much more efficiently, which will drive more profitability and as we exit this year, we still anticipate.
For example, Q4 adjusted EBITDA margins in sort of the mid teens.
And that's our exit run rate as we head into next year, while continuing to focus on revenue growth where growth first company. We've got a great market opportunity. We're the leader in the space, we're very differentiated with continuing to widen the moat.
And.
So we're investing in growth, we're continuing to hire but it's much more targeted now it's much more focused on our largest growth opportunities while at the same time, we're deemphasizing non core products. So.
We haven't we haven't spoken.
About growth expectations for the out years, we are staying focused on 2022 and getting through this.
This evolution.
We think that we're making progress on it and building some momentum in the right direction.
Thanks, and a quick follow up you guys have about 28% of your business in international markets.
What can you give us some color on the impacts of FX movements and how that's impacted either the results in the quarter or the rest of the year guide.
Well.
We're still at roughly breakeven.
Profitability outside of the U S. So any any FX.
Its both top and bottom line and therefore, no no news there and in terms of peer topline, we just don't see enough.
To make it worthy of calling out.
Certainly in the math and part of our outlook, but we.
We didn't think it was material enough to call out.
Yeah.
Operator, I think we can move.
Sure.
Sure.
Our next question comes from the line of Koji Ikeda with Bank of America. Please go ahead.
Hey, Patrick and Vernon. Thanks for taking my questions. Just a couple of me from me wanted to ask you kind of a churn question, but more from an employee's employee standpoint, as you're kicking off the strategic initiatives.
Should we be thinking about employee retention.
Specifically on sales capacity, how should we think about.
QBR retention and where do you stand on overall capacity from a sales perspective.
Bernie do you want to take that.
Yes sure.
Sure Mike.
Like a lot of companies.
We are certainly part of the great resignation as a lot of the high tech companies are experiencing.
And we've just recently saw a benchmark study from our from the Gartner Group. This is that we are below what the market attrition is experiencing which is good news from our perspective.
But we are actively.
Doing things like career, pathing and retention strategies and certain.
Helps to have a strong quarter.
People like winning and.
We're staying very focused on.
Patrick and I Havent early and often communications whether were the team on a global basis.
And we're doing things that I think allow.
Allowing our workforce.
Being flexible from a work from home perspective.
We're keeping a very close eye on making sure that the people part of the mission is not just for our customers, but for our employees as well.
Got it and maybe one follow up for Patrick I know you guys mentioned quarterly billings.
Maybe not the best metric, but looking at our model. It looks like Q1 was about about 12%.
Is there anything to call out in that number.
Should we be thinking about it and I guess, maybe what are you seeing in terms of the pipeline or bookings trends or any any sort of demand out there that's giving you the confidence in that 16% to 17% growth because that does imply somewhat of a second quarter billings reacceleration. So thanks for taking my question guys.
Sure.
Yeah, any individual quarters calculations won't.
Be incredibly helpful. They won't necessarily capture.
The exact underlying trends, we would point for anyone who is going to look at billings, we would point to our trailing 12, we'd also point to current RP O N.
And overall I think we're we feel along with the team that we are we're making steps, we're making progress in the right direction.
Through this evolution and as we really focus the business and change some of the ways that we that we go to market and focus on acquisition integration, whether it's from partners or customers as already mentioned or from the team.
We're doing the right things here, it's going to take time.
And we anticipate continuing to see indications of progress throughout the year.
Hum.
As you see for the second half of this year, our revenue guidance is sort of mid teens, and we feel comfortable and confident that we're on track for that and more to come as we go.
Thanks, guys. Thanks for taking my questions.
Thank you Angie.
Our next question comes from the line of Parker Lane with Stifel. Please go ahead.
Hi, This is Matthew kicker for Parker, Thanks for taking my questions first I'll start off.
E mandate deadline approaches what does the pipeline for new deals looking like internationally are there any countries in the EU is still looking for implementation or is your focus kind of shifted to the expand part of our strategy.
Looking at Corporation deals.
Well.
I think it's both but I'll hand, it over to you to provide any more color.
Yes sure.
So we've.
<unk> seen some sector success, obviously with the EU mandate with the.
With the addition of the <unk>.
Carriers are in Germany.
Well I will tell you that we are still in pursuit.
Are there opportunities that remain there in the pipeline.
And will actively continue to do that in that number.
<unk>.
In the low teens.
And the other thing that we're looking very closely at as well.
A lot of it.
Countries have selected.
Either in <unk> or in cell broadcast technology.
Technology.
Or front end. So I think there is still an opportunity to upsell cross sell some of the additional public warning capabilities to those existing customers and so we will keep a close eye of where there's some growth opportunities on our land and expand and network effects.
As well as continue to pursue a pipeline of.
Other countries that are part of the European.
Country expansion as well as around the world as we mentioned.
The win in India.
So I would say that.
We still have opportunities again pursue the land and expand with existing public warning customers.
Europe as well as <unk>.
<unk> to pursue it globally with other countries as well.
Okay.
Our next question comes from the line of Charlie Ehrlich with Baird. Please go ahead Sir.
Hey, Thanks for taking the question guys.
I just wanted to ask about the comment Vernon I think you made on Latin America and that being.
Im saying opportunity you had that big late in the quarter and you said something about using that wind to create more wins in that area could you just talk a little bit about that.
Sure obviously you know about.
Peru.
When for public warning and now Theres still.
We have a small team of direct sellers that are in the region.
And they are pursuing opportunities.
Leveraging our demand Gen and go to market to pursue opportunities in the region. We think that Latam is a strategic part of what we call the Americas, which is Canada U S and Latin America.
And I think we will continue to pursue opportunities both for public.
Yeah.
Safety.
Customers as well as our enterprise customers so.
I don't expect it to be a large part of our business, but we do have a presence in Latin America, and we're going to continue to pursue opportunities both with our direct and indirect channels.
Okay. Thanks, a lot.
Our next question comes from the line of Brian Colley with Stephens. Please go ahead Sir.
Hey, guys. Thanks for taking the questions.
I was curious.
Some color on the timing and magnitude of the revenue youre expecting from the public warning wins in Germany.
I know you guys previously mentioned that pricing was competitive and youre going to.
I'm trying to say price discipline, there so I'm kind of curious is.
That deal was less competitive or.
Just how the competitive aspect played into that specific deal.
Okay.
Yes.
Okay go ahead.
Got it alright.
Well I was just going to say pricing price competition continues to apply.
It's a very strategic opportunity for us we've been.
Building, our customer presence in Germany, but.
Okay.
Found in other geographies that these types of wins can be really impactful to opening doors for us for additional business and so we're very excited about these but the price compression really does apply in terms of.
Of getting.
The technology turned on.
Yeah.
We want to be.
Cautious and.
Talking about when we're going to be able to turn them into revenue.
And at the moment are not considering it in our 2022 guide.
Got it and can you remind us may be aware the on invoice backlog stands today and kind of how that compares to last quarter.
Yes, it's still a sort of low eight digits millions of dollars.
Okay got it I'll leave it there thanks for.
Taking my questions.
You bet.
Ladies and gentlemen, this concludes our question and answer session.
I would like to turn the conference back over to Patrick Brickley for any closing remarks.
Thanks, operator, and thank you all for joining our call today, we look forward to further advancing our position in the market in 2022, and we look forward to speaking with you again bye bye.
Okay.
Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.