Q2 2022 Workiva Inc Earnings Call
Okay.
Good afternoon, ladies and gentlemen, my name is Brian and I will be your host operator on this call.
After the prepared comments, we will conduct a question and answer session.
Instructions will be provided at that time.
If at any time during the conference you need to reach an operator. Please press star followed by the number zero. Please.
Please note that this call is being recorded on August nine 2000.
22 at five P M eastern time.
I would now like turn the meeting over to your host for today's call, Mike Ross Senior Vice President of corporate development and Investor Relations at <unk>. Please go ahead.
Good afternoon, and thank you for joining us for what he was second quarter conference call.
During today's call, we will review, our second quarter 2022 results and discuss our guidance for the third quarter and full year 2022.
Today's call has been prerecorded and will include comments from our Chief Executive Officer, Marty Vanderploeg, followed by our Chief Financial Officer, Joe Quint.
We will then open the call up for a live Q&A session.
Julie is cole, our president and Chief operating Officer is also on the call.
A replay of this webcast will be available until August 16th 2022.
Information to access the replay is listed in today's press release, which is available on our website under the Investor Relations section.
Before we begin I would like to remind everyone that during today's call, we will be making forward looking statements regarding future events and financial performance, including guidance for the third quarter and full fiscal year 2022.
These forward looking statements are subject to known and unknown risks and uncertainties.
<unk> cautions that these statements are not guarantees of future performance.
All forward looking statements made today reflect our current expectations only and we undertake no obligation to update any statement to reflect the events that occur after this call.
Please refer to the company's annual report on Form 10-K, and subsequent filings for factors that could cause our actual results to differ materially from any forward looking statements.
Also during the course of today's call, we will refer to certain non-GAAP financial measures.
Reconciliations of non-GAAP to GAAP measures and certain additional information are also included in today's press release.
With that well begin by turning the call over to our CEO Marty Vanderploeg.
Hello, and thank you for joining today's call.
We are pleased with our Q2 results despite the challenging macroeconomic environment.
Our SNS and total revenue have exceeded market expectations and once again beat the high end of our guidance in revenue and operating results.
Q2 subscription and support revenue grew 24, 3% and total revenue grew 24, 6%.
These growth numbers include the impact of the Q2 acquisition of par support.
For the quarter, we saw continued bookings growth in multiple solution areas, including our DRC and ESG solutions.
Our organic revenue retention rate of 97 nine.
Is the highest we have reported as a public company.
This strong quarterly performance was driven by the strategic investments, we have made and the work Iva platform purpose built solutions.
And partner and customer success.
We believe that the demand for regulatory software is consistent and durable and we will continue to invest in key platform capabilities and our ESG opportunity.
However, we expect that near term growth may be influenced by broader market conditions, including the possibility of lengthened sales cycles. The.
Despite the potential.
Some market noise in the near term our confidence remains strong in the long term opportunity across our wide Tam.
At the same time, particularly given macro conditions, we have increased our focus on achieving greater operating leverage and have slowed our hiring plans for the balance of 2022.
Across the business, we continue to carefully review, our spend inefficiency to balance achieving our growth targets and at the same time, improving our margin profile.
We do not plan to slow down or reduce strategic investments in ESG or key platform capabilities.
These initiatives, we believe will drive long term growth and widen our competitive moat.
This balance between growth and operating leverage will lead to future margin improvement.
We believe that we will return to a quarterly operating profit on a non-GAAP basis in the latter half of 2023.
Following our Q1 earnings call. There was a lot of discussions surrounding our capital market solution to be clear, we have factored the impact of this downturn into our full year guidance and are not projecting a rebound in IPO activity in the second half of 2022.
Looking beyond 2022, we remain confident we will become a billion dollar revenue company and have the Tam the platform and the team to deliver on that goal, we believe that the market opportunity surrounding ESG JRC and the broader regulatory reporting environment will drive our durable growth.
We continue to be optimistic about our business opportunities in the ESG market during the quarter, we signed several ESG contracts, including a top five global bank a prominent U S consumer products company and a large global technology company.
Our ESG solution complements our other solutions, making it a seamless process for customers to report their nonfinancial data combined with their financial data.
We are also very pleased with the growth of our governance risk and compliance business.
Our key this industry leadership and significant investment in CRC has positioned us well for continued success in this growing market.
In the second quarter, many of our DRC wins were multi solution opportunities are.
Our clients saw the value of our platform and invested in our internal controls internal audit risk management and policy management solutions.
During Q2, our advisory and technology partners continued to help drive growth across our global footprint by sourcing and influencing multi solution deals.
The percent of new business sourced and influenced by our partners continues to increase.
A few large partner related wins in Q2 include the following.
In North America, a regional consulting firm sourced a mid six figure DRC win with a large financial services company.
In APAC, our big four partner source, a multi solution opportunity with a large energy company for annual reporting and global statutory reporting.
And in Europe , a big four partner sourced a multi solution opportunity at a large financial services company for ESF Global Stat bank risk and corporate reporting.
Our team in EMEA produced its highest quarterly bookings number ever for the region.
This is a result of a number of operational changes we initiated in Q2.
There is more to come in this area as we work to maximize our substantial growth opportunities outside of North America.
In April we acquired Denmark, based parse part and EXPAREL conversion software company the acquisition strengthened our EXPAREL leadership position across Europe .
It grew our employee base of strong talent and is accretive to revenue profit and growth.
Joel will provide further detail on the go forward financial impact of parse part later in the call.
We will host our annual Investor day on Tuesday September 13th as part of the work Kiva Amplify conference.
We hope you will join us either in person at the MGM Grand in Las Vegas or via webcast.
Julie Joe Mike and I will update you on where key the strategy and operating model.
In summary, we remain confident in the resiliency of our business. The continued demand for our regulatory financial and ESG reporting products, the uniqueness of our cloud platform.
And our ability to expand and our large and relatively unaddressed Tam.
Notwithstanding the current macro challenges, we remain committed to balancing our growth strategy and achieving operating leverage from our investments.
I would like to thank our global team of dedicated employees, who continue to execute on our strategy take care of our customers and each other and live by our values.
With that I will now turn the call over to Jill.
Thank you Marty and good afternoon, everyone.
Today I will review our Q2 operating results highlight the impact of the acquisition.
And provide Q3 and full year 2022 guidance before opening the lines for questions.
As always I will talk about our results and guidance on a non-GAAP basis. Please.
Please refer to our press release for details of our Q2 results and a reconciliation of our non-GAAP and GAAP results and guidance.
Otherwise stated all results discussed today are inclusive of our prior square acquisition.
We had another solid quarter exceeding our guidance.
Q2, 2022 revenue guidance midpoint by $5 $5 million.
Our international services revenue combined with harsh part results contributed to the over performance.
We beat guidance on our Q2 operating results, our midpoint by $4 $2 million due to the strong Q2 revenue previously mentioned.
We acquired SPRI software provider <unk>.
April 1st of this year and are pleased with the early results.
Hi, Bill this class a few data points highlight how passport and attract keeps your results and how we will report on the price contribution to the business going forward.
We will report revenue on an aggregated basis.
This reporting cycle, we are disclosing quarterly parts, CT revenue and deferred revenue balance with your model.
The revenue contribution from price in Q2 was one $7 million, which included $500000 from services.
As we look to future quarters, we do not expect the parse quite bookings trend to be linear.
History has shown seasonality weighted to a majority of bookings in Q4 and Q1.
The deferred revenue balance to parse part at the end of Q2 with $2 5 million.
All of which we expect to record as revenue in the next 12 months.
We will report customer counts for both of our <unk> platform and on a consolidated total base.
<unk> has a significantly lower deal size that Arbor Kita platform.
Which would reflect a much lower average deal size when looking at our numbers in aggregate.
The total customer count is now inclusive of 850 ESF customers from a prior square acquisition.
We plan to provide a prior sport Isa customer count at each earnings release.
Now, let's go through some key highlights for Q2.
We generated total revenue in the second quarter with $131 $5 million showing growth of 24, 6% from Q2 2021.
Subscription and support revenue was $113 $4 million at 24, 3% from Q2 2021.
These are guys nice submissions and parse part helps drive strong revenue growth in Q2 2022.
60% of the increase in SaaS revenue in Q2 came from new customers added in the last 12 months.
Professional services revenue was $18 $2 million in Q2, 2022 up 26, 5% from the same quarter last year.
Primary driver of the increase of higher X BRL services revenue and completing some of those services ahead of schedule.
For our Rachida platform, we added 123 net new customers for a total customer count to 4531.
Well keep it platform.
Gross of 582 from Q2 2021.
Increasing the power sport, we added 973, new customers in Q2 for a total customer count of 5381 gross at 1432 customers from Q2 2021.
As Manny mentioned, our subscription and support revenue retention rate was 97, 9% for the second quarter of 2022.
Increase compared to 96% for the same period last year.
With that ons, our subscription and support revenue retention rate declined to 108% for the second quarter of 2022 compared to 111, 6% in Q2 2021.
As we discussed during our Q1 call. This metric is being impacted by the lifecycle of our customers who purchased our capital market's submission during 2021 that a transition to a lower cost ongoing annual contract value in the Q2 calculation.
Excluding the impact of capital markets with metrics would be about three points higher this quarter.
Please note that customers will not be included in our retention calculation until we have a full year comparable data.
The number of larger subscription contracts continues to show growth.
In the second quarter of 2022, we had 1186 contracts valued at over $100000 per year of 25% from Q2 to prior year.
The number of contracts valued at over $150000 totaled 642 customers in the second quarter of.
28% from Q2 2021.
The number of contracts valued over $300000 totaled 194 up 22% from Q2 2021.
Gross profit totaled $108 million in Q2 at 22, 9% from the same quarter a year ago.
Holiday to gross margin with 76, 6% in the latest quarter versus 77, 7% in Q2, 2021 and that decline of 110 basis points.
Operating expenses increased 42, 2% from Q2 2021.
<unk> investment in sales and R&D hiring in person events and return to travel.
We posted an operating loss of $8 $3 million in Q2, 2022 compared to an operating profit of $5 $3 million in Q2 2021.
At June 32022, cash cash equivalents and marketable securities totaled $429 million, a decrease of $94 $6 million compared to the balance at March 31 2022.
This decrease was due to the closing of our 100 million dollar per square acquisition.
Cash flows from operating activities in Q2, 2022 totaled $8 $7 million compared with cash provided of 12 $8 million in the same quarter a year ago.
Now turning to our guidance.
Our current 2022 guidance assumptions are dependent on a variety of factors that are subject to change including ever changing.
Yes.
We continue to believe our assumptions are appropriately prudent to the current environment.
For the third quarter of 2022, we expect total revenue to range from $132 million $133 million.
We expect subscription revenue will grow at a faster rate than services revenue in Q3.
We expect non-GAAP operating loss to range from 13 million to $12 million and net loss of 27 to 25 cents on a per share basis.
Our share count will be approximately $53 1 million weighted average shares.
For the full year 2022, we expect total revenue to range from 534 million to $536 million.
We are improving our guidance for non-GAAP operating loss to range from 27 million to $25 million or a net loss of 57 to 53 cents per share basis.
Our share count will be approximately 53 million weighted average shares.
And in 2022, we expect to post positive free cash flow for the fifth consecutive year.
In closing we are pleased with our Q2 results.
I want to Echo Marty's, thanks to all of our employees you are an amazing team and I am proud to be working beside you.
For the analysts investors listening to our call today I look forward seeing you next month at our Investor Day event.
We will now take your questions operator, we are ready to begin the Q&A session.
At this time, if you would like to ask a question press star followed by the number one on your telephone keypad.
Your first question comes from Alex Sklar with Raymond James Your line is open.
Great. Thank you Joe I guess just for starters can you just provide some additional context on what you are factoring in the second half growth assumptions either from an FX standpoint are or what the sales cycle impact might be to numbers. It looks like a fairly notable step down.
Versus kind of the strong <unk>. So just wanted to see if there is any other detail there. Thanks.
So we definitely had some impact some currency impact in the first half and.
We're cognizant that that could come to fruition second half as well, but I think more than anything it's back to some of the comments that Marty had made around just being really careful about the current macro environment and how we're building out the plan through the end of the year.
We don't want to get ahead of ourselves, we want to be really careful with.
The expectations that we can have.
For how quickly we can close deals.
It just didn't make sense at this time to get too far ahead.
Already or is there anything else you wanted to add there.
Well, yes, as I mentioned it thanks, Joe as I mentioned in the script, we've taken capital markets any recovery and capital market side of the equation.
And it's not a big part of our bookings, but it's significant.
We're planning careful because.
No one quite knows how the macro stuff is going on.
Unwind, so we wanted to reduce risk in our forecast.
I'm sorry in our guidance.
That's why you see what you see.
Okay.
And then Marty I guess on ESG reporting specifically.
I know youre kind of still continuing the investments there are you seeing any kind of macro impact on that solution in particular.
And how that's kind of playing out versus your expectations and I know you've only owned <unk> for a few months now, but how is the awareness amongst those customers around your ESG reporting solution.
Okay.
There were two questions there, we havent seen a macro effect on ESG yet.
I think that.
Even in <unk>.
In lieu of having an FCC mandate, which.
Everybody thinks is coming in the fall, but theres not certainty there even.
Even in lieu of that we've been doing well in North America.
On the ESG solution and so we haven't seen that much macro effect on that.
<unk>.
The second question about pars support.
Yes, we do there is awareness and their customer base that ESG is coming.
We're also in the midst of making them aware of that will keep a platform in our ESG solution.
They can do ESG on our platform, which is obviously the the thing we'd like to do with a much higher.
Value and higher priced product. They can also do ESG with Pars board.
In terms of right at the very end just tag there their final documents. So we have a way to cover all of those customers, but we are starting the process of trying to upsell those 850 customers that number continues to grow.
And.
And upsell them onto our platform.
A large percentage of a pretty big company. So we feel that's a real opportunity.
Okay, great color. Thank you all.
Your next question is from the line of Daniel Jester with BMO capital markets. Your line is open.
Great. Thanks for taking my question, maybe just first on NGL appreciate the context around par support in the quarter did you provide context and how much <unk> is going to be included in the full year revenue guide.
No we didn't give that kind of detail I would say, though that.
I had mentioned that the deferred revenue balance that without standing at the end of Q2 will be recognized over the next 12 months.
Wed expect to see more bookings from then in Q4 of 2022 in Q1 of 2023 and so.
Leading to that I would say that.
You can use those metrics to try and guide towards increasing revenues more sales from higher score later in the year and into 2023.
Great. Thanks, that's helpful. And then I just wanted to clarify so it was like the.
The words being used about the sales cycle. It sounds like you've said potential a lot and so I just wanted to be really clear are you actually seeing today as of August any of these macroeconomic factors or is your guidance for the rest of the year.
Conservative, but you're not actually seeing these issues. Thank you.
Yeah. This is Marty I will just say that we have seen.
Sales cycles extend.
We've had more deals push.
Recently than we traditionally see.
So we are seeing that.
Bulk of our issue.
To put it in context is still the disappearance of cap markets.
So we are seeing some the.
The rest of our solutions.
<unk> solutions have been continuing to grow and do well.
We just.
Chunk out of cap markets, we're slowly filling that with other solutions, but it takes time. So we are seeing some macro stuff theres no doubt.
It's not profound yet on our other solutions other than cap markets, which was very profound so.
We're starting to see that.
I don't know if its going to get worse over time. These things will go longer term.
Put more pressure on us.
Type of companies that are our customers, but we'll see.
Okay I appreciate the context. Thank you.
Your next question is from the line of Rob Oliver with Baird. Your line is open.
Great. Thank you good evening. Thanks for taking my question Marty first one for you just your comments relative to EMEA.
Fairly positive.
Albeit you're acknowledging that it's a tough environment over there right now and.
So I guess, maybe a follow up to Alex's question earlier, just as you look at those 100 850 customers from par support.
Any sense that they are at all contributing.
Now are starting to contribute to some of that.
Sort of you know.
<unk>.
Good activity Youre seeing over there in Europe amidst what otherwise is a tough environment in terms of cross selling upsell or is it just too early and then maybe you can talk about some of the early learnings in terms of appetite for that but we're keeping our platform would that would that cohort.
Well.
To answer the first part of your question no.
The par support team has not really started to contribute from a dollars point of view on moving the <unk> platform.
The performance we saw this year, which we are this quarter I'm sorry, we were pleased with for new bookings. It was a nice step up but we have a way to go and EMEA. There is no doubt and we.
We talked about structural changes we've made there and.
And we're optimistic we're seeing things improve.
In terms of par support customers. We are just starting out when you when you integrate a new company like that.
You have to be careful they were also finishing out their busiest time of the year and their last logo grab for the year, it's a very cyclic business.
They have because it's a once a year report so.
We didn't really want to touch on and now we're just starting that reach out to customers of theirs to get meetings. So that is all yet to come in terms of upside. So what you saw on the improvement this quarter was all from the traditional where key but EMEA folks.
Okay great.
That's helpful color, Thanks, Marty and then.
My follow up is for Julia Scout.
Julie it's tempting to ask a question that would potentially front run September so I won't do that but I guess, what I'll say is Marty called out.
A.
Really nice partner contribution in the quarter I know that's been one of your goals. So just curious when you look at some of the big deals. The EMEA deal that was cited I think it was a European bank.
Are there is there are there any common common DNA to those deals that are.
Representative of improvements you guys have made or in what's driving that increased deal activity. Thanks.
Absolutely and you you mentioned partners and.
In EMEA that is one of our core tenants of growth there as well as in APAC and it's hit the numbers and the percentage growth of our deals that are <unk>.
<unk> generated by partners and delivered by partners is increasing globally. So we're absolutely seeing that is it a trend across.
Third world.
Okay. Thank you I would just to add a comment I would say that.
<unk> to Julie's credit Theyre starting to understand that.
They can really build practices with our platform.
And her team has done a tremendous job of.
Educating partners. So they realize they can build really nice practices around this and I think that awareness has motivated them to learn.
What types of problems. They can solve and then go out and solve them. So that's really.
What julie's team has been successful doing in terms of accelerating this.
We're definitely seeing like I said in the script, a nice growth in terms of the percentage of deals that have partners involved one way or another.
Your next question comes from the line of Joseph Mirrors with <unk> Securities. Your line is open.
Great. Thanks for taking the question guys nice job on the quarter.
Just a little longer term question.
$430 billion of inflation reduction office just passed in the Senate can you guys see any of that.
Money being directly.
Helpful to your model over the next couple of years.
I really can't.
I really cant I haven't dug into the details of that thing Im still a bit of a shock that it went through so.
I think it's good for the country, that's for sure, but how it's going to affect our business I can say for sure.
Again, we have to dig into the details.
We are seeing movement in D C on data standards.
And we're very optimistic that the continued push for structured data and consistent.
Frameworks to report the financial data or other.
Other nonfinancial data is definitely getting momentum in D. C. So.
I think that.
I think that we see promise there from a regulatory point of view, but I'm not quite sure on the others.
On the new Bill.
Okay, well just consider it to be upside down.
Any recent customer feedback on either the ESG explorer framework management or the GSE enhancements to data management tied to that you spoke about recently.
Thanks for taking the question I appreciate it.
Yes.
On the ESG.
There is a high rate of change in our product right now because we're investing now as I've talked about a lot. So we interact with a lot of customers.
And we get a lot of feedback and we're incorporating into the product at a very high rate.
And the explore tool, we're improving and that's gotten very positive feedback some of the other features that we're just launching in the last two or three months are also getting positive feedback, but we have a long ways to go in and really get them mature but.
But the customers are so engaged with us.
And we have such a good team and these are just the type of customers you want engage those big companies mid market companies all vertical I mean from all the different as I mentioned.
You have energy or or consumer products, our retail we're getting we're getting input from all of those people. So and we are also generating a lot of interest from.
Technical partners partners, who specialize in carbon or other things and so it's really coming together nicely and we're getting positive feedback, but most importantly, the customers are really highly engaged in helping us fine tune the product.
Appreciate the answers.
And then on.
I guess you had a IR can you repeat the IR question again please.
The second part was just yeah, just I think you'd also spoken about GSE enhancements for data management data management connectivity just curious if you're hearing.
Uh huh.
Sure and our <unk> product, what's interesting we've been investing in that for a long time, because we always felt assurance was important for reporting knowing that whats youre reporting is correct and repeatable.
<unk>.
But it takes a long time to build a robust <unk> platform.
And over the years, we've kept investing and all of a sudden we're getting close to.
Having a product that actually serves a broad swath of JRC needs, we're really getting to critical mass.
And how that's manifesting itself in our customer base, we keep talking about the improvement there is we're seeing.
A lot of multi solution deals much higher dollars and we're getting higher level people involved in those decisions.
And I think thats, mainly a reflection of how much more serious people are taking assurance and risk management.
It's sort of protects your house, if you will and these organizations so.
Really good things, we're seeing there and it's all been around just the continued development of the platform.
Some specific features for IR, but.
We're really optimistic about it.
Thanks again.
Okay.
Your next question is from the line of not Stotler with William Blair. Your line is open.
Hey, everybody. Thanks for taking the questions I think I'll just.
First one just to follow up on the ESG product, obviously, you've mentioned that the high rate of change there, let's just get an update on how youre thinking about the I guess, the overall readiness of that product or I both for me.
Development functionality perspective, but also on the go to market front, and then any sort of how you're thinking about timelines maturity, there and obviously that early interest here, but when you'll kind of be at a place where you think it's.
Mature and ready to go.
Well.
I don't know that there's ever a day, where you say we cross this line, but it's getting better every day the customer we have some very good.
Customers, who are serving as references who actually generated their ESG report using the tool and are managing the whole process using the platform. So it's already robust it's already providing value.
And.
And we're continuing to see progress in sales. So I think it is ready to go now we don't have unhappy customers by any means so we have customers that want to make it better but not unhappy.
I think.
In terms of if there is a critical mass line thats, probably somewhere near the end of the year.
I think that we will have some really nice functionality in there and we will still be improving it obviously, but.
In terms of go to market I think we are having success now it will only get better.
Over the remainder of 2022.
Got it that's helpful.
And then maybe just a follow up on the.
The <unk> opportunity.
Obviously, we've talked about it quite a bit I think.
That is those regulations are effectively in place at this point.
Those requirements are alive.
You acquired <unk> Port as a you know an interesting way to kind of have another kind of avenue to get into those customers.
I'd Love just given that we're you know that.
Those regulations have gone into effect and you got this.
Kind of a multi pronged strategy. If you will we'd love to get an update on your thoughts about kind of what youre seeing in terms of first of all leads and conversions and then how you think that that opportunity is going to layer into the model going forward.
Well, we're at the beginning of the process frankly much of the SEC.
You say the regulations are in place that's true, but they step up every year and what they are required to tag and provide so.
Just like the U S. They did it the same way the served at first it was just basically <unk>.
Face statement and it was block and then it was detailed note.
Rail tagging so.
The ESF mandate has a similar scale up and next year they have to block tag for instance, and so.
The other thing is that most of them have only done at one time.
And <unk>.
After they go through that onetime cycle, they feel pain I mean, they feel a lot of pain and.
Getting getting to the point, where they're ready to do the tagging. So it's there's a lot of similar to the semi market.
Bolt ons had the majority of the market and the FCC space. When we started were kiva.
And now we have a very commanding market share lead. So I expect the same thing I've been consistent in saying, it's going to take a few years.
And I think we'll have a very strong market share in EMEA.
I also think that with all of the EXPAREL mandates coming all over the world and ESG coming to a large number of.
Organizations initially in EMEA, but other places over time, the pars port solution in and of itself will be very valuable to grab market share in those markets and then go in later and sell platform. So it's definitely part of our go to market strategy for companies, who just want to start with a less X.
<unk> bolt ons solutions so.
Again, it's we're very happy with where we're at our deal size is much higher for the platform much higher than the bolt on and we're still converting customers and still signing customers. So were about the same place we were in the SEC in terms of market share right now and so we're very optimistic.
Great. Thanks, again for taking the questions.
Your next question is from the line of Mike Grondahl with Northland Capital markets. Your line is open.
Hi, This is Mike with you John from Micron <unk>. Thanks for taking the question maybe.
Maybe first just on <unk>.
100000, ATV segment, it looks like there's kind of a nice reacceleration there from last quarter, so anything to call out there that mortgage did timing and catch up from <unk>.
It is generally this tends to be as we add.
Add more solutions on to existing customers sell more multi solution deals anytime you see that growth. It really is it tends to be.
Showing the progress against our getting more solutions into the existing customer base.
Yes, I mean, I I will add to that I mean jewelry has been really good at defining metrics and really pushing to improve them and.
Our multi solution deals are up 17% in the first half of the year compared to last year and we're seeing the same type of thing in the column expansion. So.
That manifests itself in bigger initial deals are different or bigger total account spends.
So what Youre seeing there also include the fact that.
Look at the wind reports every day, we're just seeing more and more six figure deals compared to the past. So I think thats part of what Youre seeing.
Got it and then just on par support on the 850 customers. There do you have what that number was year over year.
We don't have that as an upbeat today.
Yeah.
Got it thanks.
Okay.
Your next question comes from the line of Andrew de Gasperi with Baron Berg. Your line is open.
Thanks for taking my question I.
I guess first on the comments you made on balancing growth and margins.
Profitability back half of next year.
Definitely.
You had mentioned that youre going to continue to strategic investments in products like ESG, but can you maybe elaborate on why youre potentially stabilizing investment in and also indirectly how should we think about how this affects your growth plans.
Or will that just be on the margins.
Well, obviously our goal is that it's on the margins.
You never know for sure, but that's our goal and we think we can achieve that.
Disappointed our history you know.
In 2018, when I when I took over.
We changed over a lot of our management team and we have a really strong team and.
And they deserve some credit I mean prior to this year they had.
<unk> increased our margin year over year for four years.
We had one little hiccup in 2020, because we had such an awful second quarter around COVID-19, but for the most part just a nice steady improvement in growth and Meanwhile are nice.
Improvement in margin. So the team is really good at what they do and they know what our goals are we want to maintain that 20% growth and improve margins. So they've been doing that the last four years up until we announced that we needed to invest because of ESG, which we.
We still believe is a generational opportunity.
I have a lot of confidence that you know.
They're going to be able to throttle back a little.
I was consistent before saying that we are investing one year and after that we would start to work on margins as a focus.
I just didn't want to miss the ESG opportunity, which we think is really significant and it's already showing as I mentioned in terms of our success in the marketplace. So.
I'm very confident that they can.
They can improve efficiency through just a lot of rigor.
And managing end and still maintain our growth rate for the most part.
The investment thing this year was really important to ensure long term growth and we always invest for two reasons. One is to make the product better and more differentiation bigger moats around the product and better customer satisfaction, but also it's a tam expansion thing where.
We're always looking at Tam expansion and boy, we've expanded our Tam with ESG, we've expanded our Tam with.
To be more of a GR solution than just a SaaS solution and so those investments are paying off in terms of durable growth I'm not the last thing I'm worried about is bumping our head on our Tam. So I really want everyone to understand that we're very thoughtful in how we manage the business in this this.
Don't want to be viewed as.
Spending crazy like we're crazy. This is the first year, we've ever made a significant investment like this and we were very clear to everybody and I think as we planned we're going to come out of it this year and go back to managing both simultaneously, but we just felt it was so important to get this ESG get the leadership position in that.
Okay. That's.
That's helpful. And then maybe I don't know if this question's better suited for Julie but on the product roadmap I know amplify.
Amplify is around the corner.
Curious to know if your focus right now is just enhancing existing products we have.
Or are you potentially planning any new use cases.
To rollout maybe later this year.
So the development.
We don't talk about those new use cases, and incubation there'll be contingently half our growth team focused on.
Looking at Whats fair to capture additional Tam.
We are focused not just on our existing solutions best of course, a lot of capability on the platform, which brings all of our solutions at so you'll hear all about edit to amplify.
Looking forward to it thank you.
Yeah.
Again, if you would like to ask a question press star followed by the number one on your telephone keypad.
Next question is from Brad Reback with Stifel. Your line is open.
Oh, Hey, great Marty as we look forward.
Do you think has to happen for you guys to get back to 20% sustainable growth.
Thanks.
Okay.
I mean.
I think we're going to be in.
In the ballpark even in the existing environment, it's not going to be easy, but I think we'll be in the ballpark as soon as any capital markets activity I mean any returns.
That will make it easy for us to be above 20% grower. So it's really.
I mentioned, the Tam thing about not bumping our head the only solution that we have significant market penetration now is the SEC market cap markets, we're barely penetrated single digit.
And all these other even IR where single digit in terms of <unk>. So there is a lot of stuff for us to sell and Thats not the problem. So I think in time as these other solutions continued to improve which they are I mentioned that our solutions are still growing even if cap market doesn't come back.
We'll be there the other thing I would say is that you know.
We invested in the cap markets team at exactly the wrong time, so we have a lot more sellers, but they are out there building relationships with attorneys they're building relationships with the young private companies, who are going to go public and we have a magnificent longer term pipeline opportunities for cap markets. So when <unk> does come back we're going to have a more.
Much more.
A much more significant go to market activity around that so.
All of those things come together eventually and we're very confident that we'll see good growth.
That's great thanks very much.
There are no further questions at this time, ladies and gentlemen, thank you for participating. This concludes today's conference call you may now disconnect.
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