Q1 2023 Zuora Inc Earnings Call
Good afternoon, and welcome to <unk> first quarter fiscal 2023 earnings conference call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session.
If you'd like to ask a question at that time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question again press Star one thank you.
I would like to turn the call over to Solana walk head of Investor Relations for introductory remarks.
Good afternoon, and welcome to <unk> first quarter fiscal 'twenty 'twenty earnings Conference call.
On the call today, we have seen though north founder and Chief Executive Officer, and Todd Mcelhatton, North Chief Financial Officer.
Bobby trauma, our president and Chief revenue Officer will also be joining us for the Q&A session.
On today's call, we will make statements that represent our expectations and beliefs concerning future events that may be considered forward looking under federal Securities law.
These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent page.
We disclaim any obligation to update any forward looking statements or outlook. These statements are subject to several risks and uncertainties that could cause actual results to differ materially from expectations.
For further discussion of the material risks and other important factors that could affect our financial results. Please refer to our filings with the SEC.
And finally, our discussion today includes non-GAAP financial measures you can find a detailed in today's press release, which includes a reconciliation table of selected GAAP to non-GAAP measures.
The adjustments made to both the current and prior year's results. Our results press release and a replay of today's call can be found on Investor Relations website at Investor, That's where our dot com and with that I'll turn the call over to Eugene. Thank.
Thank you Anna and thank you everyone for joining us today welcome to <unk> first quarter fiscal 2023 earnings call.
Q1 was another solid quarter and yet another proof point of our consistent execution the trends at the subscription economy is built on transcend any near term macro level uncertainty.
The biggest and best companies in the World continue to invest in creating and growing recurring revenue streams. Our technology continues to lead the market.
Execution structure, we put in place over 18 months ago continues to deliver consistent results.
First some highlights.
Q1, we exceeded guidance again for total revenue and subscription revenue while closing the quarter at the high end of guidance for non-GAAP operating loss.
In Q1, our dollar based retention rate was 110%.
Significantly from 103% year over year.
112% plus goal for this year remains intact.
In Q1, our AUR growth.
20% up from 14% in Q1 of last year and subscription revenue growth came in at 21% up from 14% in Q1 of last year.
I'm proud to say that zoro is now a carbon neutral company, which we announced in our new ESG impact reports and we'll talk more about later on the call.
As usual, let me share some observations from the quarter on our market our product and our go to market execution.
First we continue to see a large opportunity in the subscription economy companies continue to see that when the rest of the world faces volatility.
Subscription economy can provide predictability such is the power of the recurring revenue model.
And we are seeing this trend play out in our customer base.
Some examples.
Bloomberg our customer grew its subscription revenue by 58% in 2021 compared to 2020.
Gopro another one of our customers just announced on their latest earnings call earlier. This month that their subscription and service revenues are up 73% year over year.
In June our customer is now five times bigger than they were before the pandemic today the company mix over a billion dollars a quarter or two years ago. The company was making roughly $200 million a quarter.
In fact, we continue to see durable demand as more companies in industry to embrace the recurring revenue model to navigate the current environment.
Our focus on the enterprise segments gives us additional stability in these times of uncertainty, allowing us to land new large customers across multiple industries.
For example, this quarter in publishing we signed up the New York Times.
In manufacturing, we signed a multi national electronics manufacturer with more than $2 $5 billion in revenue known for its audio and video equipment.
In financial services, we signed one of the largest and technology forward U S banks with more than $30 billion in revenue.
These companies are turning to <unk>, because our products can help give them the agility they need to adapt their services as markets change.
To manage the complete quote to cash and revenue recognition processes at scale.
Orchestrate the experiences their customers are having with neat new services.
In fact companies are finding.
We have the most complete monetization platform that spans quoting billing collections and revenue recognition.
And in Q1.
This was a big differentiator in.
In Q1, we saw more than half of our new logos buying more than one product.
Quarter buying the entire zora suites for.
For example, BMC software a global leader in software solutions for the autonomous digital enterprise turned ozora to be part of their quote to cash and revenue recognition transformation.
<unk> will support the company's ability to deliver their SaaS offerings as a central source of all of Bmc's order management and revenue recognition.
In addition, our multi product footprint continues to fuel our land and expand strategy. In Q1, we saw three expansion wins with upsell deals valued at $500000 or more.
Customers like Siemens.
In Q1 expanded their work with zoro to power new recurring revenue streams across additional divisions of their business.
This has fueled a multiple quarters of AUR growth and strong dollar base retention rate.
Now within our portfolio of products Zora revenue continues to shine, we're seeing drug revenue deals grow even bigger with a continued strong pipeline.
For example in Q1.
<unk> networking social media platform with more than 800 million members.
Cap store to better manage their entire revenue recognition process.
We continue to see success in our ability to cross sell zoro revenue into our installed base such as with fast growing disruptors like in Volcker and car gurus.
You saw how critical it was to orchestrate their quote to cash and revenue recognition processes.
As we help these companies scale and billing becomes more complex.
Revenue recognition is a natural upsell opportunity.
Now we're pleased with the progress we've made on the product front, but we're equally proud of how our.
Go to market strategy is also delivering.
As we said we believe the sweet spot in the market for US lies with large enterprises and we see this playing out in our deals in Q1, we closed six deals with ECB of $500000.
We're more.
And two with ACB of $1 million or more.
The year over year, our average sales price for new logos has more than doubled.
Now these enterprises are turning to <unk> because of our technology, but it's also because of our unique expertise.
Depth of our customer base is truly remarkable and a few years ago, we created our subscribed institute to tap into the collective intelligence. This unique assets. We created the journey to user ship blueprint built off a 15 plus years of experience to guide companies through the process from launching.
Two leading in new digital services and this is turning out to be a big big differentiator for us.
It is also a key factor in attracting more system integration partners to our ecosystem and this quarter was no exception.
In Q1, we saw our partner strategy continue to deliver for our business. Our partners continued to influence over 70% of all new business transactions in Q1, and our partner sourced pipeline continues to grow.
In Q1, we reached a big milestone and our partners certification efforts. We now have more than 450 globally certified consultants with our Si partners. This represents over three X growth compared to this time last year.
Our strong relationship with partners continues to gain momentum.
I am truly excited to share that at Deloitte Digital recent alliance summit, we learned <unk> is now the voice digital fastest growing emerging partner globally deployed.
Deloitte digital is also dedicating resources to help even more enterprises transform their business by monetizing new digital services with us in this new Zora factory.
Finally onto accompany initiative, that's been very close to me personally.
<unk>.
On ESG.
From day, one we believed that a world subscribed could be a place where subscriptions and recurring revenue models can provide broader access to goods and services to increase inclusion in equity and prioritize sustainability.
These principles are deeply ingrained at zoro earlier this month, we formalized and committed to <unk> efforts with our first ESG impact report, which highlights the accomplishments that I am especially proud of.
First as I mentioned earlier on the call as of fiscal year 2022.
<unk> has officially carbon neutral.
We are committed to maintaining carbon neutrality going forward.
We also released our diversity statistics as of the end of fiscal 2022, demonstrating the strength of our diverse and inclusive workforce.
41% <unk>.
Employees, 60% of our executive team and over half of our board of directors are members of underrepresented groups.
And we donated more than $1 million this past fiscal year to impact driven organizations across the globe through our <unk> for good impact fund.
In closing.
Our strategy is working and we continue to deliver according to our plan.
There are certainly external factors beyond our control affecting the market.
But we're focused on building a successful long term company, delivering durable and profitable growth for years to come.
I for one continued to be excited about the future.
Thank you <unk> as always for another successful quarter and for making our accomplishments possible.
Now I'll turn the call over to Todd.
To review our financials. Thank.
Thank you team and everyone for joining us today.
Q1 was a solid financial quarter across the board with key growth and profitability metrics meeting or exceeding our expectations entering the quarter.
We are pleased with our results given the current macroeconomic environment and the headwinds we are seeing with exchange rates.
Let me start with topline results.
Subscription revenue ended at $78 5 million.
<unk>, 21% year over year and exceeding the high end of our guide.
This was driven by continued improvement in our go to market execution and market demand, especially in North America.
Professional services revenue was $14 7 million at.
A decline of 3% year over year.
This aligns with our strategy to drive more implementation work to our system integrator partners, which support our plan to improve our mix towards healthier total gross margin.
I will provide more color on our progress with these system integrators later in the call.
Total revenue also ended above the high end of our guide at $93 2 million up 16% year over year on a constant currency basis total revenue grew 17%.
non-GAAP subscription gross margin was 79% a 90 basis points improvement over prior year.
non-GAAP professional services gross margin was 1% consistent with our plans to run services at or near breakeven as Tim mentioned, we grew our partner certified consultants threefold. This past year to over 450 consultants, which fueled contributions from partner sourced and influenced deals.
This has also contributed to our increased average selling price. We are very pleased with the traction we are seeing especially in the enterprise space.
As we grow our partnerships with system integrators are non-GAAP blended gross margins saw an improvement of 330 basis points year over year, ending the quarter at 67%.
non-GAAP operating loss was <unk> 2 million compared to an operating loss of $2 4 million in the prior year.
This was driven by our continuous top line growth and closely managing our investment in the business. This resulted in a non-GAAP operating margin of negative 2% an improvement of 280 basis points compared to Q1 of last year.
Our fully diluted share count at the end of the quarter was approximately 147 million shares using the treasury stock and if converted method.
Moving to some other key metrics for the quarter in.
In Q1, we maintained our dollar based retention rate of 110% despite foreign exchange headwinds.
This was a strong improvement of seven points year over year.
Illustrates the resiliency of our recurring revenue streams, especially during times of uncertainty.
At the end of Q1 customers that spend at or above $100000 ACB continue to represent 94% of our business and we ended the quarter was 746 customers a decrease of one sequentially.
More importantly, we are pleased with the growth of our average selling price.
Our new logo average ASP.
More than doubled year over year, our strong customer expansion is clear evidence of the success of our multi product strategy.
Large enterprises continue to turn to <unk> for a complete monetization platform.
In Q1, we closed six deals with ACB of $500000 or above up one from last year.
Two of these deals had HCV are greater than $1 million.
The differentiation of our product portfolio is fueling larger and longer duration deals. This is evident in our total remaining performance obligations, which grew 29% year over year.
Turning to billing transaction volume our systems process $21 billion of volume this quarter, representing 21% growth year over year.
As we've noted before process billing transaction volume is not indicative of our revenue growth because our customers gain cost efficiencies as they scale.
This metric is helpful. As it highlights the level of the scale, we offer our customers another key differentiator for our solutions in the enterprise space.
And now looking at <unk> and free cash flow.
This quarter, we will disclose the absolute dollar value of IRR.
<unk> is defined as the annualized recurring value at the time of booking or contract modification for all active subscription contracts at the end of the reporting period.
<unk> excludes the value of nonrecurring revenue such as professional services as well as contracts with new customers with a term of less than one year.
At the end of Q1, <unk> was $326 3 million and grew 20% year over year.
We believe this additional disclosure provides investors with further insights into our performance.
Free cash flow was $3 7 million for the quarter as a reminder.
Free cash flow may fluctuate on a quarterly basis due to the timing of cash collections. We believe it's best to assess our cash flow performance over a longer term, we will continue to invest in the business to foster sustainable growth, while driving towards our rule of 40 by fiscal 2025 as a reminder, the rule of 40.
<unk> is defined as the sum of our year over year subscription revenue growth plus free cash flow margin.
Total capex for the quarter was $3 3 million.
Turning to the balance sheet, we ended the quarter with $453 million in cash and cash equivalents, an increase of $237 million over the prior quarter, mostly driven by the silver Lake investment, which closed in Q1.
Q1 was another solid quarter and demonstrates continued execution, while we have not seen a meaningful impact to the business given the current macro environment and the ongoing war in Europe will continue to be vigilant to monitor and monitor the situation.
Our fiscal 2023 outlook assumes that these factors do not have a material negative impact on our business and are based on the prevailing foreign exchange rates now, let's turn to our financial outlook. You'll note that the full year EPS and cash flow ranges have been revised to reflect the silver Lake investment, which closed this quarter.
The proceeds will impact interest expense interest income and free cash flow.
Each quarter, we will also have an adjustment to the fair value of the warrant liability. This is a noncash item driven by changes in our stock price and market volatility we will exclude this impact from our non-GAAP guidance due to the potential wide variability.
For the full year, we expect net income to decrease by $13 $3 million. The go forward quarterly impact will be approximately $3 8 million.
We also expect a reduction on free cash flow of approximately $8 million for the full year from the previous guide of $14 million to $17 million.
Turning to our outlook for Q2 as a reminder, Q2 of last year included a one time top line benefit which create a tougher compare this year.
For Q2, we currently expect total revenue of 96, five to $98 5 million subscription revenue of $82 million to $83 million non-GAAP operating loss of $2 million to $1 million non-GAAP net loss per share of <unk> <unk> to <unk>.
Per share assuming a weighted shares outstanding of approximately $130 2 million.
For the full year, we are adjusting our revenue mix outlook. As you know we are targeting professional service revenue to be 15% of our overall revenue by fiscal 2025.
As we continue to leverage our growing relationships with our system integrator partners. We are accelerating this during the current year. We currently expect total revenue to remain at $400 million to $406 million subscription revenue to increase to 339 to 341 million.
non-GAAP operating loss of $2 million to breakeven non-GAAP net loss per share of <unk> 19 to <unk> 15 per share assuming a weighted average shares outstanding of approximately 131 8 million.
For the full year, we also expect <unk>.
Our base retention rate of 112% or better.
A growth of 21% or better and as I mentioned earlier, we are adjusting our free cash flow outlook due to the impact of the silver Lake investment.
We now expect to generate free cash flow in the range of $6 million to $9 million to close off Q1 was yet another proof point that our strategy is working our market leading product portfolio allows customers to automate complete business processes from quote to cash to revenue recognition.
Our system integrator partners continue to grow those or practices. This is a testament to the level of customer demand. They are seeing in the market for our enterprise grade solutions.
With that teen Robby and I are happy to take your questions and we'll turn it over to the operator.
At this time I would like to remind everyone in order to ask a question press star followed by the number one on your telephone keypad. Your first question comes from the line of Brent Thill with Jefferies. Your line is open.
Hey, <unk>, Hey, Todd Hey, Ravi This is love soda on for Brent Thill.
For taking my question and thank you for the incremental they are <unk>.
<unk>.
Maybe to start out with.
Teen at a high level could you talk a little bit about the resilience of the business model.
If we do enter a potential downturn.
Could you maybe talk a little bit about the volume based component of your pricing.
Yeah, absolutely love I mean, we saw.
You saw this two years ago.
In the first half of 2020, specifically Q1, and we snapped back and it's been two years I know People's memories are short, but that downturn had significantly greater uncertainty.
And turmoil and what we saw then is what we're seeing now is that subscription business model is resilient.
When you have a recurring revenue model and Youre not chasing every single dollar of revenue every single quarter.
Let you start practically at the finish line.
And you've got a product and services indispensable that customers that creates a level of customer loyalty. Those are simply much better business system managed when you look at US we have a double layer subscriptions, where we ourselves are a subscription model, obviously and our customers are a subscription model and so it's hard to know what's going to happen.
In the year.
Certainly you see lots of forecasts out there regardless of what it is we like the business model that we have we know that the macro level trends shift to subscription economy continued to be strong.
And we know the business model itself is fairly resilient and so we're feeling pretty good about it.
With respect to pricing right.
We tweaked our pricing and you're constantly seen a sweeping up but I think that really is minimal effects on what's going on right now.
To sign longer term contracts, we tend to grow in our customers' growth.
But I would say at a macro level, we feel good about where we are.
The only thing maybe I would add to that team as far as the mix goes as we've talked over the last several quarters. We are seeing a much greater impact from a standpoint of the new add on products that are coming out and so volume is becoming a smaller part of our overall mix and the same thing with revenue as that product continues to grow. So we are less and less dependent upon volume to draw.
<unk> growth, but I don't think that has a material impact for us for the year also love.
Got it that's helpful. That's helpful commentary.
Maybe one for Todd.
On one of the interesting comments was that new logo asps have doubled and so I guess as we think of the longer term trajectory of the net dollar retention.
Could there be a leveling off at the 115% level.
How do you think of that.
That over the longer term thank you.
I believe what we're seeing is we're selling into enterprises and there's more opportunities in there we still feel really good about what our dollar based retention looks like like we said this year, we expect it to grow to 112% or better and we absolutely feel that by the time of year at fiscal 2025% at $1 12 to $1 15 is the right.
Range. So I think as we're moving upmarket and enterprise. We should just think about that those are bigger ponds for a sufficient those are companies that are used to spending more and we're benefiting from that focus that we have on that rather than being focused on the low end.
Got it thank you.
Your next question is from the line of Joshua Reilly with Needham Your line is open.
Hi, everyone. This is Michael Rackers I'm on for Josh today. Thanks, a lot for taking my question.
I guess as we look at international revenue, which is roughly 35% to 40% of your revenue how should we think about the impact of the Ukraine situation to demand over the last three months and then how are you factoring these macro challenges in to your guidance.
So I'll go ahead and take that.
Michael So first of all.
<unk> share today, our guidance does take into account where current FX rates are at this particular point we have.
No revenue exposure in either Russia, Ukraine, we do have a few people.
Who are supporting our business and <unk> been actually able to continue to support us some of them have relocated with their with their third party provider to other countries and so from that standpoint, we've been able to manage through any of the operational risks, but from a demand perspective, and maybe I'll, let Ravi talk about demand, but at this time you know, we're certainly monitoring it but our.
Demand signals continue to be strong.
Thanks, and I know you guys as we think about going off annualized recurring revenue business models are absolutely key and I'm going to see that continue in terms of how.
The enterprises are coming to us and the way that we're walking across size.
Great. Thank you and then just one more from me.
Howard Salesforce productivity trending this year, thus far.
And then how are your partners contributing versus I guess your expectations at the beginning of the year. Thank you.
Okay.
Our languages on the auto side I'll start that.
We're seeing our partners growing over 450 certified consultants that are working very closely with Austin.
<unk>.
Involved in the bookings that we're doing as a third of our bookings were actually with our partners as well, so let's say greater mom right partnering on that aspect.
The competitive side of it I think it is the same that we have.
Oaken about before we're seeing a need for both billings and revenue we sit on one platform overall.
The thing is that the overall.
Our players in this space are not having the ability to tie in the same way.
Great. Thank you.
Your next question comes from the line of Joe <unk> with Canaccord Genuity. Your line is open.
Thanks. This is danny on behalf of <unk>.
It's great to see another quarter of solid execution.
My first question is.
It's on the pipeline, maybe you can offer a little more color.
On how the macro environment is playing into the discussions you are having.
The potential customers and in technology media and manufacturing and other emerging industry that you're targeting.
And how would you characterize your pipeline today versus <unk>.
Maybe three to six months ago.
So when you look overall, we're monitoring what's going on in the world right now.
I would say.
Poke about enterprises, absolutely key to us.
Item, we still see people going across the board.
<unk> and revenue applications sitting on one platform, which is something that we offer overall.
So from that perspective, the demand, we're seeing keeps coming through and it is as strong and as good in place that we're seeing it now.
So far we have not seen a decline in pipeline.
That's great to hear thank you.
And.
Any update on your capital allocation priorities on the Q4 call you mentioned that M&A will be a big focus for you any comment on the pipeline valuations are your criteria there would be helpful. Thanks.
Sure. This is tod so first of all now in its current environment. It's fantastic to have such a strong balance sheet and to be able to use that dry powder as we see fit we have a very active program. We're talking to numerous different constituencies, we've gotten a lot of feedback from our customers and our partners.
On places and that quote to cash space, where we can help our customers solve problems that others aren't.
And so at this time, we don't have anything to announce but as soon as we have any type of update we'll be sure to share it with you.
Yeah, and just to remind folks we.
Our numbers and our projections this year our business plan. This year did not call for any.
Acquisitions, obviously, we entered into a transaction with silverlake because we.
I thought there might be opportunities in the marketplace in the latter half of the year those thoughts are proving to be somewhat prescient.
I would like Todd said this is something we're working on and progress and nothing to report at this moment.
Okay. Thanks for taking the questions.
Your next question is from the line of Andrew de Gasperi with Bergen Aaron Berg. Your line is open.
Hi, Thanks for taking my question, maybe first Ken just as a follow up to the last question.
I guess as the market conditions right now in terms of the valuations of some of the private companies out there factor and why you might potentially be delaying some M&A.
Or maybe the focus on margins right now.
So I wouldn't say, we're delaying M&A I would say if anything in many markets. It looks more promising to me certainly after a silver lake's announcement went through.
We're starting to get cost Hudson bankers with.
Things they want to sell but we're going to be smart about it. We certainly the macro level picture is this is a whole new business model companies need new set of technologies that really drive the success of this business model. We are the clear leader in the market is realizing that billing is not enough you have to have billing and revenue recognition is becoming an important differentiator.
<unk> for us that being said, we also said, we see an insatiable appetite for our customers for more and more of these new capabilities.
We're going as fast as we can in terms of organic development of innovations incredibly proud of the innovations that we're releasing.
Especially ever since we took over.
But we believe there will be things out there that we will see that can help us accelerate delivery capabilities to our customers and we want to be.
Positioned to take advantage of that and I would say the devaluation shrinking actually make us more interested in picking up.
Good technologies than otherwise.
Got it.
Maybe in terms of the partnerships I think first.
Can you give us maybe an update on the partnership with Microsoft in terms of where you are right now and then secondly, I do believe you mentioned you were looking for other tech partnerships in the future just wondering what what do you what do you think it looks appealing right now.
But overall our relationship with Microsoft Paragon strongly.
We're very focused on a process that and as more comes out through the year, we will absolutely lagging them all of that.
Some of the other strategic.
Partnerships, we're looking holistically at Lowe's and again more information as they come up we have.
Partnerships don't happen overnight, we wanted to signal, where we are going right now the primary focus continues to be the system integration partners you've seen the progress we've made on that front. So thats been a two year journey.
And we're right now we're also focused beyond assistant recruiters and Microsoft and we will hope we have more things to talk about later this year, but.
But right now.
The part of the partnerships are having the biggest impact continues to be the system integrators.
Okay. That's helpful. And then lastly for me I just had a question on <unk>.
Some of the other software companies that reported before you.
First of all we stated that they had our time hiring hitting Derrick I guess hiring targets.
Can you maybe mentioned why maybe <unk>, where it's a little different.
And why that Hasnt been an issue for you so far.
I think we've made a lot of course corrections last year.
Given what we're seeing the hiring market I think overall, we're doing well.
The one part of the business, where it's Todd talked about that we've seen.
Hiring challenges not just with us and our partners is on the implementation consultants and what we decided strategically to do as we've always had this target of 15% of our business should be system integration.
Work for our consulting professional services work and we're going to accelerate.
Our goal is to get to that point.
Really saying look it's going to be a lot easier to give this work to our partners and certify them and train them than necessarily to hire somebody in that group. So we continue to hire than our group we continue to grow but we're pretty bullish about our ability to to give more of that worked our implementation partners is something we're pretty excited about.
Great. Thank you.
Again, if you would like to ask a question press star followed by the number one on your telephone keypad.
Next question is from the line of Chad Bennett with Craig Hallum. Your line is open.
Great. Thanks for fitting me in.
So Todd maybe a question just on on dollar based net net expansion in our revenue retention.
Its been stabilizing here at 110, I think for three quarters.
As we're we're kind of lopping off I'd say kind of more challenging net expansion quarters off of the trailing four.
Is there any more color just in kind of the puts and takes there in getting to that $1 12 for the year.
Obviously, we.
And you're confident in that number it sounds like we need to see some acceleration in obviously.
At above $1 12 that at some point.
Kind of whats is there any color kind of under the Hood there you can share.
Yes, Chad I think as you said, we are up year over year seven points and as you think about that we made some tremendous strides last year as we move forward. This year, we feel very good about being at that 112, plus I think one of the things that makes me feel good about that is when I take a look at the <unk>.
Innovation, that's coming out new products that we have things that our customers are specifically asking us for and if you take a look last year. Some of the product innovation that came out we did a nice job of being able to up sell that again revenue has been a nice driver. We think we've got a nice opportunity within the installed base to drive increased penetration there. So.
Overall, we're up over where we were a year ago. We still believe we'll finish this year at $1 12, plus and as you said as we have new products coming out and customers, adding on we absolutely believe there is the opportunity for us to be at that $1 15 at the high end of the range by the time, we get to 2025.
Got it and then.
The you mentioned how much deal sizes are increasing especially in on new deals, but that also obviously cross sells and up sells are getting larger also.
If we see that type of.
If that's a trend I should say in the ASP increase that you think is going to continue.
It seems like volume of deals also is.
Just doing better from a north of 100, K deal standpoint, and whatnot should we expect <unk> volumes to two volume of deal or deal activity volume two to change at all despite seeing pretty massive increases in asps.
I think you got to be careful with that unit enterprise business, you always have ebbs and flows this quarter. We had a couple of especially large deals that came in and impact us when I take a look at the pipeline next quarter I think we've got a really good deal flow not only with larger enterprise customers, but just total number of logos that we're looking at so I think.
That's always going to ebb and flow by quarter.
Got it alright, thanks, nice job on the quarter.
Thanks, Chad.
There are no further questions at this time I will now turn the call back over to 10-Q for closing remarks.
Well I want to thank everybody.
Tuesday.
For the call just to recap we had a great quarter.
And I feel really good about where we're going we're in a good position our marketplace is growing we continue to execute our products are differentiated.
Biggest and best companies in the World continue to come to us to help guide them through this journey into the subscription economy and I appreciate the call and Dr.
Talk to you next quarter. Thank you.
Ladies and gentlemen, thank you for your participation. This concludes today's conference call you may now disconnect.
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