Q2 2022 Walkme Ltd Earnings Call

August 11, 2022

[music].

Good day and welcome to the walk me third quarter earnings call Today's conference is being recorded.

At this time I would like to turn the conference over to Mr. John Stripper.

Please go ahead Sir.

Hello, and thank you for joining our second quarter 2022 earnings call I'm, John Strep I'm head of Investor Relations at Walk me and today I'm joined by Dan <unk>, CEO and cofounder Rafi swearing President and co founder Scott Little Chief revenue Officer, and Andrew Casey, Our Chief financial.

Officer certain statements, we make today may constitute forward looking statements and information within the meaning of section 27, a of the Securities Act from 1933 section 21 E of the Securities Exchange Act of 1934 in the Safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1095 that relate to our current expectation.

And views of future events. These forward looking statements are subjects to risks uncertainties and assumptions some of which are beyond our control actual outcomes may differ materially from the information contained in the forward looking statements as a result of a number of factors, including those set forth in the section titled risk factors in our annual report on form <unk>.

20-F filed with the Securities and Exchange Commission on March 24th 2022, and other documents filed with or furnished to the SEC.

See our press release dated August 11th 2022 for additional information.

In addition, certain metrics, we will discuss today are non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP we.

We use these non-GAAP financial measures for financial and operational decision, making and as a means to evaluate period to period comparisons. We believe that these measures provide useful information about operating results and enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key.

<unk> used by management in its financial and operational decision, making.

Further throughout this call we provided a number of key performance indicators used by our management and often used by competitors in our industry for more information on the non-GAAP financial measures and key performance indicators, including the reconciliation tables see our press release dated August 11th 2022.

That I would like to hand, it off to Dan.

Thank you John and good morning, everyone I'm proud to be hearing our Tel Aviv office with all the global management team to date.

Excited to share our second quarter results.

Executing against our strategy, leaving our fully digital adoption platform, leading global enterprises.

<unk> from DAP customer is growing 60% year over year by driving expansion use cases, and adding product lines like the newly launched workstation or centralized digital employee hub.

Im thrilled with the progress we made over the last two years from selling single application use cases to now having 142 customers deploying walk me at growth for more application or within EMEA now accounting for over 100 million of FRE or are these progress is what's driving us to move faster in our transition focusing on larger enterprises with complex.

Workflow.

Overall, <unk> is in 29% growth year over year, and surpassed $245 million or enterprise and large enterprise customers are seeing the value of stop in this complex environment and seen growth expanding these accounts focusing on achieving digital transformation success with a focus on digital employee experience.

I am happy to share with you that in this quarter. We've closed our biggest deal in the company history, and we've seen three or four 1 million boehner IRR account extend by millions or more this is a huge testament to the growing demand of digital adoption and value realization by our customer our biggest customers are good.

Getting bigger these customers the innovators that are driving digital strategies forward and focusing on new ways of work as.

As we continue to deliver value and expand within these accounts, we're also prioritizing or strategy focusing on the right segments and the right product offering to lead our business to improve operational efficiency we.

We are driving our business to improve our efficiency and pushing to improve our margin and free cash flow from quarter to quarter, we improved our non-GAAP operating loss from Q1 by nearly $2 million showing the underlying leveraging our operating model.

We have moved fast and better prioritizing our strategic priorities, leading to this leverage and expect to see continued improvement in our margin going forward.

We are growing the market category and the transition of our customers to our completely digital adoption platform, we are better aligning our offering including our product and data action and experience with increased focus on our go to market engine of enterprise and large enterprise customer.

With our large customers. We are also moving our conversation to higher levels within the organization driving more strategic discussions with tio.

In the near term macro headwinds and budget consideration are lengthening sales cycle.

Longer term strategic discussion with Cio's and business leader is a positive for our business as we become more essential in our customers' digital transformation effort. We are encouraged to see our pipeline continue to show robust growth.

Namely expansions with our enterprise and large enterprise customers and our partner ecosystem, which we believe will be more durable.

On the operational side, we are prioritizing our investments then with an intense focus on our strategic growth drivers of expanding our market category driving growth in our partner ecosystem and investing in areas of competitive advantage such as our federal business.

As a leadership team we're pleased with the improvements we saw in the operating margins and free cash flow and we will continue to focus on profitability as we drive towards the rule of 40% that we laid out in our Investor day in May we believe that our technology and the ROI that we deliver positioned us well in the value focused software spending environment.

Our ability to deliver greater value is being driven by the flexibility of our digital adoption platform, which can be deployed across an entire organization to add employees in completing their unique workflows.

As we work toward general availability for workstation, our newest product designed to be a central hub for employees to start to workflows, we're thrilled to see some of our largest customers deployed through their entire workforce.

First major product that complements our platform, but also provided an additional revenue stream.

Great example of deploying workstation that scale gives us one of the largest U S based appropriately and casualty insurance provider a fortune 50 company with over 55000 employees, who we add the strong expansion with us this quarter.

<unk> seen huge success using walking workstation to driving mission critical change management initiatives streamlining processes and ensuring team members completed specific regulatory requirements on the tight timeline.

Resulting in significant hard cost savings.

They've partnered closely with walk me to establish a center of excellence that enable each business unit to develop solution and design efficient user experiences across the enterprises application.

From HR to sales.

These customer digital adoption program has ushered in a new way to distribute information across the enterprise changing how employee learning and work and will continue to partner with them as they deployed on more systems.

Proving value is important to us and to our customers.

We invested in our pre sales team to improve the efforts and demonstrate this value to our customers.

Nothing can beat the live AB testing by our customers.

Net cash is Australia's leading wholesaler and distributor supplying and supporting more than 100000 businesses across the network of independent retailers and businesses in the food liquor and hardware industry Matt.

<unk> developed a self service product management system supplier and training team.

<unk> was deployed for a supplier facing Carlo compared to traditional change management and enablement approaches where you for eternity.

<unk> seamlessly migrated over 5000 suppliers to the new system and less than 25%.

To migrate their far smaller internal team appointed or the user with welcoming guidance for the self service portal suppliers can add new products and update offering quickly.

These enable met cashes network of independent grocers, Nico stores and hardware stores to purchase goods and get them under show and into customers' hands.

As a result of this real World AB Test experiment Medicus introduced walk me through their internal users of the system.

Mexico is now rolling out walk me enterprise wide for your employee facing application as well as their customer and supplier facing portal and website.

Another Great example, WL Gore and associate and global materials Company, which uses walk me to enable its global sales force of over 2200 people with cohesive adjusting timeframe relevant to each user's role.

Providing the right information and the right time with the appropriate context of each person function has led to an 83% reduction in training time with faster feature adoption, resulting in sales leader and sellers saving hundreds of hours a year.

We continue to invest in our product.

July product release, we released new functionality and enhancements related to data governance, multi language integration security and more notably we introduced our newest version of workstation to our customers.

Workstation changes how employees indirectly software through a desktop base hub that brings workflow automation and enterprise search to the employees and simplify employee interaction with software.

In addition to workstation, we introduced digital transformation intelligent DPI for short to a select group of beta customers DTI, either observer ability platform for digital transformation, allowing <unk>, an executive to gain full insight into their software stack, including discovery and analytics.

Not just on the usage level heading into the business processes and end to end workflow to truly measure how software is being used in our business processes are being completed.

<unk> would it be able to use DTI to focus their digital transformation effort and combined with our action and experienced product it will be able to target and deliver experiences that allows the employees to be more efficient accurate and has.

Now transitioning to a category yesterday, what can be regained the findings of our second annual state of digital adoption report in which we surveyed nearly 1500 senior business leaders from enterprise across 10 countries.

The research helps us take the pulse of organizations digital transformation challenges and where are the gaps the light when it comes to digital adoption.

Some of the most compelling findings include 60% of decision makers are concerned about the effect of four employee technology adoption unexpected softer ROI dispatch.

This past year on average enterprises have only mix, 41% of their digital project API.

60% of enterprises say change management programs are no longer fit for purpose.

63% of enterprise sales the one size fits all approach to technology support and training even applicable.

So this is clearly a gap in what we can help these organizations solve these issues.

According to the survey the top five consequences of full digital adoptions include increased security risk operational inefficiencies and waste resources per employee retention failing to adapt to industry changes and losing a competitive edge. The survey shows that the organization increasingly realize that without effective.

As you told adoption strategy business processes improvements will fit.

Another facet will including the report with the growing community of walked me dot professionals.

The number of Linkedin profile the phase welcome yard.

Grew by nearly 40% from 'twenty, one to 'twenty two to more than 4600.

I'm wondering did that profession walk through recently registered the last Thursday July at the international that professionals.

Celebrating individuals who are advancing the use of digital technologies within their organization.

In recognition of this date, we took the opportunity to officially announce the date of our annual Dot professional event, which is taking place on October 25th 27, both virtually and in person.

And just as that community continues to grow.

<unk> seen growth in the category itself intermodal extended application of technology.

In the recent Gartner report titled Innovation insight for digitally enabled diversity equity and inclusion that being cited as a D technology for the equity use case mentioning walk me as a sample provider. We believe this is more evidence of how that really levels the playing field.

Employees from all different backgrounds generation and experiences.

Another example of category growth.

<unk> was included in a recent Forrester report titled adopt anywhere work strategy to compete in the future that labor market.

<unk> mentioned walk me as an example for technology that can complement the current workforce to increase the productivity of the overall labor strategy.

Our category continues to expand from our end users to professional and we have been working to scale our partner ecosystem to continue to drive this forward in the past, we recognize our increased partnership with Deloitte Accenture ACL and others.

In this quarter, we continued to expand our relationship with these partners and geographies and executing against our combined go to market plan.

As our efforts around the partner ecosystem continues to expand we're seeing more significant deals being impacted by our partner our partner ecosystem contribution in the first half of 2022 has already eclipsed all of 2021.

We saw numerous deal with making a meaningful contribution to our net new <unk> in Q2, including two global 2000 customer with six figure net <unk>.

One new customer and one in expansion.

Part of developing our partner ecosystem is delighting them as customers and our partners are investing in their own talent to deliver walk me through the internal employees as well as your customers or partners already has hundreds of their employees certified walkman or in the process and we expect that the trend to continue to grow as we outlined.

Our Investor day, our partner ecosystem enable us to extend the reach of our platform to some of the largest organization undergoing digital transformation. We expect this focus to continue to contribute meaningfully in 2022 and further in 2023 as we laid out previously.

Lastly, our work on fed ramp certification continues to progress.

We've invested in building out the team capability and technological infrastructure to support the public sector business.

Last week, Georgia Secretary of state and non significant enhancement to Georgia as my voter base, including the addition of walked me as part of a comprehensive plan to ensure voter axis in the upcoming umbrella.

In addition, we're in the process of pursuing federal and state status and are pleased with the progress we've made so far.

While undergoing certification, we continued to gain new public sector customers, including the city of Chandler, Arizona and large transportation customer.

Our investment in our federal practice, these and adjusting our go to market strategy, but does help us overall, our entire technical infrastructure of our solution.

This investment driven by our goal of being able to serve the large federal segment.

To drive greater efficiencies across our entire business and the more nimble approach to the structure and deployment of our products going forward.

Last quarter, we noted that we had assigned our new Chief revenue officer, and I'm pleased to be joined today by Scott <unk>, We started a few weeks ago.

Additionally earlier this week, we announced that we admire that real Sanchez, Chief marketing officer, with thrilled to reunite cotton and drill and have them join us to help drive greater focus on our strategic priorities in their line by driving increased focus on strong execution.

I'd like to invite Scott to say a few words Scott.

Thank you Dan I am thrilled to be here today.

I joined walk me, because I saw firsthand some of the largest digital transformations in the global 2000, as well as the money being invested in process discovery and optimization to support those transformations.

Software solutions are a key ingredient to the success of these kinds of projects whether that is an overhaul of existing deployments for new fit for purpose applications.

And often underappreciated aspect of these digital transformations is the change management element related to the adoption of new systems and processes.

<unk> brings a nimble cost effective way to drive adoption of both new and existing applications as well as a flexible platform to deliver lightweight process changes that can drive material outcomes and in the end customers want good outcomes from their investments.

These large digital transformation and process optimization projects are never implemented completely in house by our clients partners play a huge role in their success, whether that is a software partner like <unk> or SAP.

Or a GSI partner like Accenture Deloitte.

These partners understand that the most valuable business processes live in multiple organizations across multiple applications, our largest clients with the most complex workflow environments realize the greatest return on their software portfolio investment when they deploy the walkman platform across their tier one applications.

Our partners are a critical part of our ability to deliver good outcomes in these large clients.

Successful projects and happy clients turn into repeat business.

Since joining in July are taking the time to meet with employees from across the world and I'm very excited to work with the smart talented and driven people. The people that have joined recently have come from some of the best software companies in the world as I look at my organization today, we've grown fast and we're not immune to the problems that come with rapid growth.

What I plan.

To provide the structure and processes that can help this organization continued to scale and grow in a repeatable and effective way.

Thanks, again, and now I'll hand, it back to Dan. Thank.

Thank you Scott I'm really pleased with our progress this quarter. Thank you to all our partners investors employees and customers. We are continuing our journey to fulfill that vision that we kicked off four years ago.

That offering has grown to over $100 million in IRR, we have an expanding ecosystem with over 4600 that professional dumped.

Top tier analyst firms are recognizing the category and our customers are expanding with us by realizing true value and signing multimillion dollar contracts with us.

With that I will hand, it over to Andrew.

Thank you Dan our second quarter was driven by strong expansions with our global 2000 customers, who continue to invest and expand their relationships with us.

As Dan highlighted we saw the biggest deal in company history, but we also saw broad expansion from some of our largest customers as evidenced by the increase in IRR of our DAP customers, which grew 60% year over year and our average contract duration for the quarter was nearly 24 months highlighting the strategic nature of these agreements.

We also focused on our organization on improving our operating efficiencies by utilizing walk me internally driving greater savings in our software costs, improving our core processes and aligning our people with our long term strategic vision that we laid out in our Investor day.

I am pleased with the operating margin improvements we saw in the second quarter compared to the first and it's a direct reflection of our customer focus and many of the initiatives, we outlined to drive scale in our operations.

Benefits from these initiatives will enable us to achieve greater operational efficiencies in the coming quarters.

Improvements in our sales efficiency is one of these initiatives and Thats why we are excited to welcome Scott as our Chief revenue Officer, and Andrea as our first Chief marketing Officer.

I think both of them to our executive team will drive greater alignment and our focus execution, we need to take our business to the next level.

Our biggest customers continuing to invest and deploy walk me across the organizations impressively in the quarter. We had 30 expansions that were greater than 100000 from customers, who already pay us over 100000 in IRR.

Nearly one third of our $1 million customers expanded within the quarter and we had three expansions of more than $1 million and we are all of this is validation of our shift in our go to market to focus on enterprise and large enterprise customers.

We now have 490 customers, who are paying us over 100000 in IRR in 31 customers paying us over $1 million in Iraq in both cases, the average IRR per customer increased year over year, 12% and 24% respectively.

<unk> grew to $245 7 million up 29% year over year expansion as being the largest driver in the quarter.

Total revenue for the quarter was $59 9 million up 28% year over year, while subscription revenue was $54 2 million up 28% year over year.

Remaining performance obligations or RVO ended the quarter at $346 million, representing a growth of 33% year over year.

Current RVO, which the contracted subscription revenue expected to be recognized over the next 12 months grew 28% year over year to $193 million.

Long term, our beer, which was contracted subscription revenue expected to be recognized after the next 12 months grew 39% year over year to $153 million.

The momentum in large enterprise continues AOR growth from customers with more than 500 employees continues to outpace the rest of our business growing 31% year over year after accounting for the customer maintenance undergone in the fourth quarter of 2021.

Our dollar based net retention for customers over 500 employees was 120% for the trailing four quarters compared to 117% in the second quarter last year.

While im pleased with the progress of our investments and our partner ecosystem and public sector. We've also taken steps to improve our operational efficiencies, which will enable us to continue improvement on both the margin and dollar loss basis sequentially throughout 2022, making the first quarter a high watermark for our loss.

As a result of the improved non-GAAP operating margins, we now expect to achieve positive free cash flow during 2023.

Before turning to gross margins expenses and profitability I would like to note that I'll be discussing non-GAAP results going forward.

In the second quarter of 2022 gross margin was 78% up 8% from the first quarter.

Gross profit was $47 million up 31% year over year we've.

We've seen improvements in our gross margin due to a revenue mix shift towards subscription and improved hosting capabilities as we move to a multi cloud strategy.

We expect our overall gross margin will continue to improve due to the positive mix of subscription versus services revenue and optimization of our hosting operations and an improved services engagement model leveraging partners where feasible.

Turning now to operating expenses, we are increasingly focused on our strategic growth drivers of category expansion growth in our partner ecosystem and prioritizing our go to market strategy to enterprise and large enterprise across the globe.

Sales and marketing expenses in the second quarter of 2022 was $38 5 million compared to $28 1 million in the second quarter of last year.

This represents 64% of total revenue in the second quarter compared to 67% last quarter and 60% in the second quarter of last year.

R&D expense in the second quarter of 2022, it was 14 million compared to $10 7 million in second quarter last year. This represents 23% of total revenue versus 23% in the same period last year.

We continue to make investments in our platform to drive innovation and increase our flexibility for deployment.

We will continue to invest in R&D as we extend our product and invest in our ecosystem in 2022.

G&A expense was $11 1 million for the second quarter of 2022 compared to $8 8 million in second quarter last year.

G&A was 19% of revenue in the second quarter versus 19% in second quarter of last year.

We are investing in the infrastructure of our business and continue to drive long term scale in our business.

Going forward the primary areas of investment for us will be in R&D and sales and marketing as we look to continue to capture the growing market opportunity for our products.

We've made progress in the second quarter driving greater efficiencies in our operating model, which drove our operating loss lower than our initial plan for the quarter.

<unk> focus on driving towards cash flow breakeven and operating profitability showing increasing leverage in our business model operating loss in the second quarter of 2022 was $16 7 million compared to a loss of $18 6 million last quarter and $11 7 million last year.

Operating margin of negative, 28% compared to negative 32% last quarter and in the same period last year of negative 25% net.

Net loss per share in the second quarter of 2022 was 19 excuse me $84 7 million weighted average shares outstanding.

Free cash flow was negative $12 $2 million in second quarter of 2022 compared to negative $23 million last quarter and negative $7 4 million in the second quarter of last year.

Free cash flow margin in the second quarter 2022 was negative 20% down from negative, 36% last quarter and 16% for the second quarter of last year, which is a reflection of our improved operational efficiencies.

Turning to the balance sheet, we ended the quarter with $317 9 million in cash cash equivalents and short term deposits given our sizable cash balance and the expectation of improving operating margins throughout 2022, and 'twenty. Three we are well capitalized to continue to support our growth goals.

Turning now to guidance.

While we were pleased with our performance in the second quarter, we are taking a more conservative approach to remainder of the year. In addition to the more uncertain macroeconomic environment, we are doubling down our focus of greater than 500 employer customers and expect increasing churn from our small customers, which currently represent around 7% of our total Iraq.

With that in mind, the macroeconomic and SMB impacts are factored into our revenue guidance.

Combined we expect this to be a $4 million to $5 million headwind for the revenue and are totally or for the second half of 2022.

We are driving more efficiencies with our operating model, while aligning our strategic priorities as a result, we expect to see improved operating margin sequentially in the third and fourth quarter on a non-GAAP basis, and we are improving our operating loss guidance. Despite the revenue headwinds mentioned previously.

With that said for the third quarter of 2022, we expect revenue in the range of 62, 5% to $63 5 million representing growth of 24% to 25% year over year.

non-GAAP operating loss in the range of $15 5 million to $16 5 million.

For the full year of 2022, we are lowering our top line revenue guidance and lowering our expected operating loss range.

We expect revenue in the range of $246 million to $249 million, representing growth of 27% to 29% year over year non-GAAP operating loss in the range of 68% to $65 million, reflecting a gradual improvement and operating leverage in the second half of 2022 as we continued to see returns from our investments.

With that Dan Rafi, Scott and I will take your questions.

Thank you.

I would like to ask a question. Please signal by pressing star one on your telephone keypad.

If you are using a speaker phone. Please make sure your mute function is turned off.

So, allowing a signal to reach our statements again press star one to ask a question.

Pause for just a moment to allow everyone an opportunity to signal for questions.

We will take our first question from Michael <unk> from Keybanc. Your line is open. Please go ahead.

Hey, guys.

Congrats on the on the.

On the good numbers and expansion rate for those large customers could good to see that.

Good to see those.

Enterprise focus can you talk a little bit more about the fed opportunity and how close you are getting there and then also.

Talk a bit about the move to free cash flow breakeven next year I assume that's just on a one quarter basis, how sustainable is that and when do you think we can actually get to that free cash flow breakeven on a full year basis.

Hey, Michael It's Andrew I'll take I'll take the first two and then Dan can back me up on that do you have more specific questions, but I'd tell you, we're making progress in line with our expectations on a certification that teams are very focused and I expect that we'll be showcasing our progress on that front with greater detail on the coming weeks.

So we're very pleased with the progress there on a free cash flow basis, I would tell you there's a couple of it.

Whenever you drive big operational improvements was many factors, which contributed to improving most importantly for US is we're very proud of the fact, we're using our own product internally are walking for walking program, we're driving process efficiencies improvements in how we operate and that's showing up in a real way in our in our operating expenses. So very proud of the progress the team has made there.

And in the areas, we focus which is really in every major operational units. The other thing that I would tell you is.

When you get when you get the teams really focused on executing on our singular goal and that singular ago highlights and efficiencies in other areas all work towards where all work together towards making sure that we're optimizing every dollar we spend and I will tell you that when we talked about that at our analyst day. The response from our employees was tremendous and Ed.

Everybody was given this new ways in which we can drive efficiencies in our model.

It's all it's not about major major improvements, although our sales and marketing areas, where we have to drive some efficiencies. That's all these little things that come together. When you work is when you work as a <unk> of unit that makes the mix improvements palatable and so you are right.

We're talking about in terms of hitting free.

Free cash flow positive position in 2023, and I do think that given the strength of our model and our framework and our unit economics that we'll continue to do that on a sustainable basis.

Thanks, Andrew and I think we're going to discuss that fed rate was add on.

Well I would say the fed the fed progress has been going great for us.

We're well on pace for meeting our objectives and I expect that we'll be showcasing our progress on the certification in the coming weeks.

Okay. Thanks.

Yes.

And we'll take our next question from Scott Berg from Needham. Your line is open. Please go ahead.

Hi, everyone.

Congrats on the sales in the quarter. Thanks for taking my questions.

I guess I've got a.

Couple of things here first of all I wanted to start with the new Chief revenue Officer welcome to the call Thats in.

Wanted to try to maybe get some commentary I understand.

What new process efficiencies or changes in the sales organization. We can maybe expect over the next I don't know 12 18 months. Thank you.

Thank you and I'm glad to be aboard.

Expect significant organizational changes per se I think they are in pretty good shape from that perspective, but there are some discipline and efficiencies I think we can drive in the way in which we manage pipeline and the way in which we manage aging maturity.

Just things, which as you would expect for the company to mature itself that you would see in the sales organization. So there's no magic here just good sales discipline and approach.

Got it helpful and then Andrew on your guidance here for the second half.

Can obviously back into the fourth quarter guidance and your guidance assumes a little acceleration in revenue growth rate from Q3 to Q4 I wanted to try to understand where the confidence in that guidance comes from and this is something I don't know if sales cycles or deals that moved from Q2 into Q3 that that's helping that but any color there would be.

Thank you.

So certainly and Scott you remember that when we talked about the Q2 earnings we just talked about.

A few opportunities that we had slipped from the quarter and then move into into Q3 and I would certainly tell you that we did a great job in closing almost all of those that had slipped in one of our major area. So we're pretty pleased with the linearity.

In the quarter on <unk>.

Especially with respect to those deals as well.

When you look at our history, our revenue profile for Q4 is always our strongest period throughout the year and it's a reflection of the fact that how we actually go through our selling process and frankly, how our revenues lineup too.

On a quarterly basis as well, so it's really more linearity than anything else, but.

The thing that despite the macroeconomic headwinds that.

We're all talking about and are well documented I will tell you that I'm really pleased with how well our pipelines are lining up to align to our <unk> and our enterprise large enterprise.

<unk>.

We made that is a focus and the teams reacted and the pipeline is really shifting.

Material way towards the right customers I talked about that are on our site is really about focus on the right customers that can expand with us and have the problems with which we can solve the only thing I would tell you is that the pipelines are exhibiting more and more expansion opportunities and it is a reflection of the sales efforts and our sales motions were driving when you don't.

Have to go sign up a new client with a with a new contract and go through all the DPA and the security reviews. It makes the sales cycles easier and so that weighs a little bit in our optimism with respect to how we would operate in Q4 so.

I want to be prudent about how we're actually setting guidance with respect to the broader macro environment, but for us the levers we've pulled in the ones. We highlighted are starting to show up in a material way and it feels like we're just positioning the company very well for our long term growth.

Great Super helpful. Thank you for taking my questions.

Okay.

We will take our first question from Kevin Kumar from Goldman Sachs. Your line is open. Please go ahead.

Hi, Thanks for taking my question.

One on the updated guide given the increased profitability expectation how much of that is influenced in any sales rep productivity and are there any changes in terms of sales capacity investments in the back half of the year.

So I'll take that one and I'll, let Scott maybe comment if he wants to on sales capacity I would tell you.

Recall that we hire most of our sales capacity at the beginning of the year and so we made those investments with the expectation that they could get more and more productive as we go throughout the year and certainly in certain markets and certain segments, we're seeing that productivity as we expected and that certainly given us a lot of confidence that the investments. We made we can continue to drive that focus.

<unk> deficiency I also told you at the analyst day that we are focusing our efforts on specific market segments and specific opportunities and in other areas, where we are deemphasizing, we're not spending as much time and effort investment and that's allowing us to drive greater efficiencies overall.

Amazingly you start focusing on the types of customers that gives you the greatest profit how much you convince our teams are doing the right activities and so.

That's really kind of all of that buildup.

And it's one that I think we can continue to execute and grow our business with the sales teams that we have in place I don't think we have to have materially greater hires in order to reach our growth goals, we need to do is drive greater efficiencies in the investments we've made.

And I guess this is Scott I would add to that it's not just a combination of greater efficiency in the sales organization and the right deployment of a rep resources, It's also greater efficiency and better communication with the marketing side of the house right. So I think we're going to get a lift out of both of those going forward and with an expectation.

But I don't see a significant increase in sales and marketing expenditure to achieve the growth that we need.

Super helpful. Thank you and then one on <unk>.

On the <unk> partnership I think it's been a couple of months since that was announced.

Curious if you're starting to see customers leverage the combination that surround us and walk me and is that accelerating I would say the identification of technology gaps and time to value for customers. Thank you.

Hey, this is Dan so we are seeing the pipeline the growing and there is a lot of interest, especially with the larger enterprise and we have a lot of CIO was asking about it.

Joining a lot of calls.

That was our first obviously integration with them so.

So we are looking gained in next quarter to have at least one or two big customers to try it out and so we're pleased with that by.

The interest is just keep growing and growing and obviously, we're working on phase two with them to deepen the technology partnerships.

Great. Thank you.

We will take our next question from Daniel Srinivas from Barclays. Your line is open. Please go ahead.

Hi, Thanks for taking my question.

Wanted to talk a little bit about your kind of revenue growth versus free cash flow profitability philosophy, given that you've moved up.

Free cash flow goal by that one two years can you just talk about the formula for reaching the rule of 40 now and do you still expect to get there by 2024.

So the short answer there is yes, we do and I think that we still we still fancy ourselves as a company that can still drive 30 plus percent revenue growth year over year, given the market opportunity we see in front of US now having said that the guidance were giving is is the guidance and it's based upon what we see in front of us and some of the macroeconomic.

Headwinds, we're all experiencing but.

But I do believe that the short term and certainly.

We're thinking about increasingly.

Second half of this year and into 2023, there's not a lot of more it is not a lot more incremental investments we need to make in order to really drive the revenue growth that we see so that's that's really the basic formula We've got a lot of little different initiatives on every major line to go drive improvements in our operating leverage and the actions we've taken and some of them date back.

Year or two we're starting to see the benefits of those actions now in our operating model. So.

Magic is just it's just hard work.

And.

We heard the market and the feedback from when we rolled out our initial investments at the beginning of the year and we doubled down on our focus on operational efficiencies and targeting the right customers and that really helps get the whole company aligned on the outcome of driving towards free cash flow positive position.

Got it no. That's helpful. And then can you just talk a little bit about kind of the cadence of demand through the quarter given that you report a little bit later than some other on cycle companies and kind of did it trends from later in June continue through July into early August and then I guess, a quick follow up on that.

You talked about how Amit <unk> pay customers.

Make up maybe about six I think there are about 60 of them that are DAP customers can you talk about how some of those customers specifically performed versus the overall base. Thank you.

So I'll take the second part first I think that one of the one of the reasons why we're very optimistic that the things that we're doing are the right things is that the DAP customers. We added during the quarter were <unk> UK customers in a couple of cases and in those cases, the GTK customers that were already that were the ones that we're expanding with us so well.

We're showcasing our technology to the largest companies in the world and they are seeing the benefits associated with broad adoption.

When they do that they are able to improve their business processes in a meaningful way and and Thats really buoyed our optimism that we have done the right things as focusing our organization. So.

No major change in that focus I think we're not just seeing the benefits of it you'll see it in our in our DAP customer number I think on a go forward basis continue to see that progression and you're going to remember I talked about <unk> and the progressions are reminded told everybody at that point in time, we had.

Over 380, <unk> customers of those <unk> customers. We only had 59 that were that were down and thats. The real opportunity is taking those GTK customers and showcasing our technology capability, and making them down and and and.

And so the more DAP customers, we can drive the better better off we'll be really driving our growth and if you do the basic math, but I'd shared before it's a $200 million plus opportunity for us just focusing on our existing customers, making them into a DAP customer.

Regarding the unit economy adopt specific average deal size grew.

$725 540, so the deals themselves also.

The average deal size.

No that's helpful. Thanks.

Thanks.

And just on that the demand part of the question.

Yes, so I wouldn't say that.

<unk>.

I wouldn't say that the demand profile is a substantially change for us I think we are like every other major enterprise software company that has.

Back end loaded quarter from a linearity perspective.

Certainly our thought processes. When every other company is talking about demand headwinds and the lengthening sales cycles caused us to really reflect on.

What the right position was for us on guidance as we shift up market and talk to larger and larger clients.

What happens as you get into longer than than prior sales cycles, and we want to be prudent about how we approach that and make sure we're being clear with our teams and with our investors that as we do that there may be some short term impacts longer term is absolutely the right strategy. It's absolutely the right focus that we're seeing in our core metrics another great thing.

You see in our demand metrics is an increase from the partners more demand driven by partners and that's another significant thing and department deals that are coming are larger in there.

Alright, Thank you I appreciate that color.

We will take our next question from Michael <unk> from Wells Fargo Securities. Your line is open. Please go ahead.

Hey, Thanks, Good morning, I. Appreciate you taking the question I think maybe just taking a step back it would be helpful. If you could just spend some time on what youre learning around selling the DAP space in the current environment, you mentioned landing the largest deal ever during the quarter.

Also it sounds clear there was a more measured stance in framing targets for the back half of the year. So just how much of the shift in outlook comes from the continued de emphasis of smaller customers and impacts you're expecting there and then on the larger customer side are there ROI or efficiency gains youre, finding yourself able to lean into in the current environment to help.

Offsetting some of that elongation are just constrained environment that we're hearing more broadly across software.

Hey, Matt I'll start so as I mentioned that.

Just now on the call in the quarter, we signed our largest deal.

Ever in our history and that was an expansion.

So what we're seeing is that our larger customers are continued to increase the spend with us because they are seeing the gains and the ROI from deploying of digital adoption platform.

And it's clear to them that they need to go enterprise wide or to start deploying walk me on more and more and more application. So we're seeing it across all of our customers. This is why the average.

<unk>.

For a customer went up two 7% to.

725.

And they're deploying it we absolutely think that in today's economic and walk me in DAP in general will help them a lot one saving money on software increased productivity and just gain more ROI from their current investment. So we are soon to be the solution to help <unk>.

Musician utilize their their spend on software. So we're happy to see it and we're seeing more and more and more for our customers expanding with us and as I mentioned on the call three of our customers paying us over 1 million increased by more than 1 million.

That was a big sign for us if we're doing the right thing.

That's all helpful. Maybe just as a quick follow on Andrew in terms of what's assumed in the outlook for the rest of the year is it just big picture. What you are seeing currently holds throughout the rest of the year or are you, allowing for additional impacts where those to surface or how do you approach framing targets given a bit more uncertainty here.

Just how much visibility do you have into targets between now and end of year. Thank you.

So I think we've got we've got good visibility on our pipeline and as Scott said, he is doing more and more to drive discipline in how we frame those pipelines and how many mature of them.

So that part's really positive I will tell you that we were very intentional with our guidance with respect to the less than 500 employee accounts, that's where we've shifted away our focus and I do expect that when you shift to where your focus away from roughly 7% of our IRR theres going to be some headwinds there that may accelerate and bad <unk>.

<unk> definitely into.

Softening of our revenue guidance, it's a little bit nuanced now we're doing some shifts away from the less than 500, but theres also the larger impact from macroeconomic on small medium sized business clients. When we when we entered into we had the slowdown associated with Covid back in 2020 of the biggest customer segment impact.

Small medium sized business clients, so as we we.

Look out and see and expect that theres going to be some headwinds that's the market segment for us that will be hit naturally.

By a slowdown so.

It's a little bit nuance on trying to split hairs between what is more macroeconomic versus intentional on our part to shift away from less than 500, but.

It does weigh heavily on our thought process on what the second half guidance is going to be.

Thank you.

We'll take our next question from Tyler Radke Citi.

Your line is open. Please go ahead.

Alright, thank you.

Good morning, I appreciate the question.

I wanted to ask you just about the million dollars customers. It looks like you haven't added a new customer in Q1 or Q2, you added about seven in the first half of last year, you are talking about some pretty good expansions within $1 million customers. So could you just help us understand.

Your outlook there were some of those new million dollar customers part of the the slipped deals you referenced that closed in Q3 or was there any churn from that existing cohort that just kind of makes that metric.

Look flat over the last couple of quarters. Thank you.

Yes, so let's start with the and we have absolutely zero churn in that in that cohort.

Really there are just expanding I would say is we are a new category and we're entering an organization we need to prove our value so to get a customer to the first million.

That's the goal and Thats harder on.

On the fleet side, when we are getting to a union. We are seeing those customer increasing so we didn't add new $1 million customers, but we added more than $1 million with those existing customers and signed our biggest deal in the company history, adding another over $3 million or adjusting one account.

We are seeing that trend.

Our goal is obviously to continue to adopt deployment and.

See more and more and more customers and will time and lead time, it would get to more 1 million <unk> customers. The good signs as I said as I mentioned is the existing customers are continuing to expand.

The other thing I would add to that Dan is that we did see good good increases in the number of customers greater than 100000.

Virtually all of those customers that are new to rub $100 million, where expenses. They grew over a period of time, yes, so as we're adding more and more customers even in the great 100, K, they're expanding to the average IRR for that cohort grew.

38%.

Overall value and quarter over.

Year over year grew the average IRR grew at 12% so as those customers those customers continue to extend those graduate into million dollar customers and we go back to where our focus is if we've got a lot of opportunities to go drive expansions of the clients you can bet.

The future will see more and more graduate.

Okay.

Helpful.

Maybe a follow up just on the outlook.

Excuse me in the full year.

Or are you just thinking about.

Kind of your revisions to maybe your your IRR forecast I know you took revenue down and anything we should keep in mind in terms of seasonality I know Q3 is typically a bit softer for you guys because of summer and typical Q3 seasonality, but it did seem like maybe this year you do have the benefit of some slip deals so maybe.

Frame for us, how we should be thinking about a.

Seasonality for Q3 and Q4, thank you.

So thanks for that I. Appreciate the question I think youre absolutely right.

Typically you see a little softness in the year.

Theater around this time as well I would say look this is also the time when we're seeing some of the initial churn from the SMB clients. So it is going to be something in the line.

What we saw in Q2, but in Q4 is typically where we see our largest.

Contribution so we're going to see that same type of seasonality. Obviously there is there is a lot of things at play with respect to that but I wouldn't expect huge.

<unk> growth in Q2 in Q3.

0.2 to those same types of linearity, we saw last year to try and come up with your <unk>.

Your thought processes on how you are looking in the second half, where we really did have some softness last year in Q3 <unk>.

But we more than made up for that in Q4.

Thank you.

Okay.

We'll take our next question from Josh bands coming up Waldmann Stanley. Your line is open. Please go ahead.

Great. Thanks for the question.

So clearly some some great expansion trends that we're seeing and talked about strong pipelines.

At the same time, we have this.

The macro backdrop and.

And I guess some commentary on slip deals. So just wanted to get a better sense for <unk>.

Sales cycles, and how your conversations with customers are going in light of this macro maybe both from the perspective of existing customer existing large customers and then also for new potential customers.

Yes, so I'll start with.

On whenever you're moving your focus and segment upmarket youre going to see that the overall average deal cycle time, we extend a bit I mean, just natural naturally as we ship more and more of our focus on large customers.

You'd see that extension.

The good thing is the focus in the pipeline. We've got is weighted more towards expansion was not trying to capture a lot of new clients. However.

I also would tell you I don't want to over rotate too much I'll just focus on our expenses, we still focusing going after new clients as well.

Objected to go capture a lot of new <unk> and those are in our pipeline too.

And I would add two things one as you know when we started.

Welcome you 10 years ago, we're very much focused on the use case base. So we still have walking into your product what mist for Salesforce walking for workday now as we're expanding the category and we're seeing massive demand.

For digital adoption platform, obviously those conversation are much more wider so when we're talking with CIO or close within companies were talking on a much bigger deployment.

Just as I, just said about workstation, which is an employee of the seats on every employee desktop. This is much different deployment, which much greater value than just overlaying walk me on your on your sales force or CRM or HCM. So obviously it takes a little bit more time, because the value is bigger the deployment these months.

Much deeper.

But the value of the contract is way higher.

That's the focus that's what we're seeing that's working and.

And obviously that.

Our mission and our promise.

Companies with their digital transformation.

Growth and Kpis and this is not just the pure up deployment. This is a full enterprise deployment that we can touch every employee every technology every business process.

I hope it answered your question.

Yes. Thank you.

We will take our next question from Pat <unk> from JMP Securities. Your line is open. Please go ahead.

Oh, great. Thank you and congrats on all the progress.

So.

I guess may began and Andrew I'm not sure but.

I would love your perspective. This is a very big picture I'd Love Your perspective on where walk me and digital adoption.

Fits in strategically with what other players are doing so you have a partnership with the logos alone has started as process mining now theyre positioned himself.

Execution management software.

Integrate with service now, which is where Andrew work before.

And they have their creative workflows and that <unk> include the low code and RPI I think it is.

Really confusing for investors, how do all these pieces fit together and where do you fit in.

Sure. So I would start then I would go to the specific examples that you just mentioned along with an in service now so so long as doing backend.

Business mining business process mining right Theyre, taking all your transactions from from the database from the logs, but they don't have anything on the front end like what the user how users are interacting with software. So that's one on the service now is they have great inspiration obviously to be the work were asked or something like.

But reality is that companies are deploying a lot of software just Justin sale. They are using eight to 12 different application not mentioning HR benefits payroll and so on so reality that the employees are not using one vendor or not using one application you are using multiple we're talking about 2030.

In some cases much much more thinking about the organizations <unk> organizations are thinking acquisition, they have four or five different CRM from different vendors that can be Oracle salesforce. Microsoft you name. It at the end of the day the employee needs to be productive they need to complete a process and this is exactly where we were sitting on.

Every employee front end R&D application or on the desktop and we helping them execute business processes being more efficient data validation, ensuring that theyre doing their job correctly onboarding a lot of features but at the end of the day. We are the last mine from the employees integrations that we have.

To service now or just alone is just making our customer getting more out of what work. We can do so for example, our integration with so long as we're allowing <unk> to activate automation and action on the user or desktop based on their data right. So they have this amid.

<unk> data, but what's now how we can actually make the user taken action. So Salome trigger walk me by Ipi and then walk me box on the screen.

You have service now thinking about how many different processes you need to do and not all of them is on service now sometimes you need to go through your SCM update details then goes to service now Dan go to Salesforce Denver to another application you don't want it to be break or you don't you don't want the employee to be confused just because they need to go to one other solution with <unk>.

Under.

Piece of software and obviously walk me is orchestrating all of it so I hope it answer the question I would be happy to do that.

All up if you have.

That's great. Thank you.

Okay.

It appears there are no further questions at this time, Mr. Doug Chaffin.

Conference, Matt do you finding additional or closing remarks.

Yes, I want to thank everyone our team our customers our investors and analysts to everyone on the call and thank you for being with us today.

Okay.

Today's call sorry, if I Miss sufficient you may now disconnect.

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Good day and welcome to the walk me third quarter earnings call Today's conference is being recorded.

At this time I would like to turn the conference over to Mr. John Chappell.

Please go ahead Sir.

Hello, and thank you for joining our second quarter 2022 earnings call I'm, John <unk> head of Investor Relations at Walkman today, I'm joined by Dan <unk>, CEO and co founder Rafi <unk>, President and co founder Scott Little Chief revenue Officer, and Andrew Casey Our chief.

Financial officer certain statements, we make today may constitute forward looking statements and information within the meaning of section 27, a of the Securities Act of 1033 section 21 E of the Securities Exchange Act of $19 34 in the Safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1095 that relate to our current.

Patients and views of future events. These forward looking statements are subject to risks uncertainties and assumptions some of which are beyond our control actual outcomes may differ materially from the information contained in the forward looking statements as a result of a number of factors, including those set forth in the section titled risk factors in our annual report on.

Form 20-F filed with the Securities and Exchange Commission on March 24, 2022, and in other documents filed with or furnished to the SEC.

Our press release dated August 11th 2022 for additional information.

<unk> used by management in its financial and operational decision, making.

With that I'd like to hand, it off to Dan.

Thank you John and good morning, everyone I'm proud to be hearing our Tel Aviv office with all the global management team to date.

Excited to share our second quarter results were.

We are executing against our strategy, leaving our full digital adoption platform two leading global enterprises.

Our from deep customer is growing 60% year over year by driving expansion use cases, and adding product lines like the newly launched workstation or centralized digital employee hub.

The progress we've made over the last two years from selling single application use cases to now having 142 customers deploying walk me across forum or application or within EMEA now accounting for over $100 million for IRR.

This progress is what is driving us to move faster in our transition focusing on larger enterprises with complex workflows.

Overall, IRR is in 29% growth year over year, and surpassed $245 million or enterprise and large enterprise customers are seeing the value of stop in this complex business environment and seen growth expanding these accounts focusing on achieving digital transformation success with a focus on digital employee experience.

I am happy to share with you that in this quarter. We've closed our biggest deal in the company history, and we've seen three or four $1 million on our IRR account extent by millions of more this is a huge testament to the growing demand of digital adoption and value realisation by our customers our biggest customers are.

Bigger these customers the innovators that are driving digital strategies forward and focusing on new ways of work as.

As we continue to deliver value and expand within these accounts. We're also prioritizing our strategy focusing on the right segments and the right product offering to lead our business to improve operational efficiency.

We are driving our business to improve our efficiency and pushing to improve our margin and free cash flow from quarter to quarter, we improve our non-GAAP operating loss from Q1 by nearly $2 million showing the underlying leveraging our operating model, we have moved fast and better prioritizing our strategic priorities leading to this leverage and expect to see continued improvement in our margin.

Going forward.

With our large customers. We are also moving our conversation to higher levels within the organization driving more strategic discussion with Tio.

In the near term macro headwinds and budgets going through duration are lengthening sales cycle.

Longer term strategic discussion with CIO and business leader is a positive for our business as we become more essential in our customers' digital transformation effort. We are encouraged to see our pipeline continue to show robust growth.

Namely expansions with our enterprise and large enterprise customers and our partner ecosystem, which we believe will be more durable.

On the operational side, we are prioritizing our investment spend with an intense focus on our strategic growth drivers of expanding our market category driving growth in our partner ecosystem and investing in the areas of competitive advantage such as our federal business as.

As a leadership team we were pleased with the improvements we saw in the operating margins and free cash flow and we will continue to focus on profitability as we drive towards the rule of 40% that we laid out in our Investor day in May.

We believe that our technology and the ROI that we deliver position us well in a value focused software spend environment.

As we work toward general availability for workstation, our newest product designed to be a central hub for employees to start to workflows.

We're thrilled to see some of our largest customers deployed through their entire workforce. It's our first major product that complements our platform, but also provided an additional revenue stream.

A great example of deploying workstation that scale is with one of the largest U S based appropriately and casualty insurance provider. Unfortunately, 50 company with over 55000 employees, who we have a strong expansion with us this quarter.

<unk> seen huge success using working workstation to driving mission critical change management initiatives streamlining processes and ensuring team members completed specific regulatory requirements when the tide timeline, resulting in significant hard cost savings.

Partnering closely with walk me to establish a center of excellence that enable each business unit to develop solution and design efficient user experiences across the enterprises application ecosystem from HR to sales.

Proving value is important to us and to our customers we invested in our <unk> to improve the efforts and demonstrate its value to our customers.

Nothing can beat the live AB testing by our customers.

Net cash is Australia's leading wholesaler and distributor supplying and supporting more than 100000 businesses across the network with the independent retailer.

And businesses in the food liquor and hardware industry Matt.

<unk> developed a self service product management system supplier and training team.

<unk> was deployed for a supplier facing Carlo compared to traditional change management and enablement approaches were used for internal team.

<unk> seamlessly migrated over 5000 suppliers to the new system and less than 25% of the time it took to.

Migrate their forests monitoring internal team of 100 for the users.

With welcoming guidance for the self service portal suppliers can add new product and update offering quickly.

These enable met caching network of independent grocers, Nico stores and hardware stores to purchase goods and get them under show and into customers' hands.

As a result of this green World AB Test experiment medication produced walk me through the internal users on the system.

Mexico is now rolling out walk me enterprise wide for your employee facing application as well as their customer and supplier facing portal and website.

Another Great example, the WL Gore and associate and global materials Company. We choose is walk me to enable its global sales force of over 2200 people with cohesive adjusting time training relevant to each user's role.

Providing the right information and the right time with the appropriate context. Each person function has led to an 83% reduction in training time with faster feature adoption, resulting in sales leaders and center saving hundreds of hours a year.

We continued to invest in our product.

<unk> changes how employees indirectly software through a desktop base hub that brings workflow automation and enterprise search to the employees and simplify employee interaction with software.

In addition to workstation, we introduced digital transformation intelligent DPI for short too.

Select group of beta customers DTI, either mobility platform for digital transformation.

<unk>, an executive to gain full insight into their software stack, including discovery and analytics.

Just on the usage level heading into the business processes and end to end workflow to truly measure how software is being used in our business processes are being completed.

Would it be able to use DTI to focus their digital transformation efforts and combined with our action and experienced product it will be able to target and deliver experiences that allows the employees to be more efficient accurate and accurate.

Now transitioning to a category yesterday, what can be redeemed the findings of our second annual state with digital adoption report in which we surveyed nearly 1500 senior business leaders from enterprise across 10 countries.

The research helps us take the pulse of organization digital transformation challenges and where the gaps the light when it comes to digital adoption some of.

The most compelling findings.

60% of decision makers are concerned about the effect of four employee technology adoption unexpected softer ROI.

This past year on average enterprises have only mix, 41%, Okay digital project API.

60% of enterprising say change management programs are no longer fit for purpose.

63% of enterprise say, it's a one size fits all approach to technology support and training even the <unk> book.

So this is purely accounting and walk me can help these organizations solve these issues.

According to the survey the top five consequences and digital adoption include increased security risk operational inefficiencies and waste resources for employee retention failing to adapt to industry changes and losing a competitive edge. The survey shows that organization increasingly realize that without effective.

<unk> adoption strategy business processes improvements will fit.

Another facet when including the report was the growing community of walked me that professional.

The number of Linkedin profile the phase welcome Yadkin grew by nearly 40% from 'twenty, one to 'twenty two to more than 4600.

Two honoring did that profession walk through recently registered the last Thursday July as international dock proficient with denim.

Celebrating individuals who are advancing the use of digital technologies within their organization.

In recognition of this date, we took the opportunity to efficiently announced the date of elevate our annual Dot professional event, which is taking place on October 25, 2007, both virtually and in person.

And just as that community continues to grow we've also seen growth into that category itself internal extended application of technology.

In the recent Gartner report titled Innovation insight for digitally enabled diversity equity and inclusion that being cited as a D. I technology for the equity use case mentioning welcome me as a sample provider. We believe this is more evidence of how that really levels the playing field for.

Our employees from all different backgrounds generation and experiences.

Another example of category growth.

<unk> was included in a recent Forrester report titled adopt anywhere work strategy to compete in the future that labor market.

<unk> mentioned walk me as an example for technology that can complement the current workforce to increase the productivity of the overall labor strategy.

Our category continues to expand from our end users to dot profession, and we've been working to scale our partner ecosystem to continue to drive this forward in the past we recognize our increased partnership with Deloitte Accenture ACL in laundry.

In this quarter, we continued to expand our relationship with these partners and geographies and executing against our combined go to market plan.

We saw numerous deals make a meaningful contribution to our net new <unk> in Q2, including two global 2000 customer with six figure net <unk>.

One new customer and one in expansion.

Part of developing our partner ecosystem is delighting them as customers and our partners are investing in their own talented and he will walk you through the internal employees as well as your customers or partners already and hundreds of their employees certified walkman or in the process and we expect that the trend to continue to grow as we outlined.

At our Investor day, our partner ecosystem enable us to extend the reach of our platform to some of the largest organization undergoing digital transformation. We expect this focus to continue to contribute meaningfully in 2022 and skinny further in 2023 as we laid out previously.

Lastly, our work on federal certification continues to progress.

We've invested in building out the team capability and technological infrastructure to support the public sector business.

Last week, Georgia Secretary of State announced significant enhancements to Georgia as my voter base, including the addition of <unk> as part of a comprehensive plan to ensure voter access in the upcoming November election.

In addition, we're in the process of pursuing federal and state status and are pleased with the progress we made so far.

While undergoing certification, we continued to gain new public sector customers, including the city of Chandler, Arizona and large transportation customer.

Our investment in their federal practice, these and adjusting our go to market strategy.

Help us overall, our entire technical infrastructure of our solution.

This investment driven by our goal of being able to serve the large head around segment will drive greater efficiencies across our entire business and they're more nimble approach to the structure and deployment of our product going forward.

Last quarter, we noted that we added signed our new Chief revenue officer and pleased to be joined today by Scott Toledo, We started a few weeks ago.

Additionally earlier this week, we announced that we had higher than <unk>, chief marketing officer with shrink to reunite with them and drill and have them join us to help drive greater focus on our strategic priorities and the line by driving increased focus on strong execution.

I would like to invite Scott to say few words Scott.

Thank you Dan I am thrilled to be here today.

Software solutions are a key ingredient to the success of these kinds of projects whether that is an overhaul of existing deployments or new fit for purpose applications.

And often underappreciated aspect of these digital transformations is the change management element related to the adoption of new systems and processes.

Walk me brings a nimble cost effective way to drive adoption of both new and existing applications as well as a flexible platform to deliver lightweight process changes that can drive material outcomes and in the end customers want good outcomes from their investments.

Or a GSI partner like Accenture Deloitte these.

These partners understand that the most valuable business processes live in multiple organizations and cross multiple applications, our largest clients with the most complex workflow environments realize the greatest return on their software portfolio investment when they deploy the walk me platform across their tier one applications are partners are critical.

Part of our ability to deliver good outcomes in these large clients.

Successful projects and happy clients turn into repeat business.

<unk>, what I plan to provide the structure and processes that can help this organization continued to scale and grow in a repeatable and effective way.

Thanks, again, and now I'll hand, it back to Dan. Thank.

Thank you Scott I'm really pleased with our progress this quarter. Thank you to all our partners investors employees and customers. We are continuing our journey to confirm that the vision that we kicked off four years ago.

That offering has grown to over $100 million in IRR, we have an expanding ecosystem with over 4600 that professional dumped.

Top tier analyst firms are recognizing the category and our customers are expanding with us by realizing true value and signing multimillion dollar contracts with us.

With that I will hand, it over to Andrew.

Thank you Dan our second quarter was driven by strong expansions with our global 2000 customers, who continue to invest and expand their relationships with us.

We also focused on our organization on improving our operating efficiencies are utilizing walk me internally driving greater savings in our software costs, improving our core processes and in aligning our people with our long term strategic vision that we laid out in our investor deck.

Benefits from these initiatives will enable us to achieve greater operational efficiencies in the coming quarters.

Improvements in our sales efficiency is one of these initiatives and that's why we're excited to welcome Scott as our Chief revenue Officer, and Andrea as our first Chief marketing Officer.

Adding both of them to our executive team will drive greater alignment and our focus execution, we need to take our business to the next level.

Our biggest customers continue to invest and deploy walk me across their organizations impressively in the quarter. We had 30 expansions that were greater than 100000 from customers, who already pay us over 100000 in IRR.

We now have 490 customers, who are paying us over 100000, an IRR and 31 customers paying us over $1 million in Iraq in both cases, the average IRR per customer increased year over year, 12% and 24% respectively.

<unk> grew to $245 7 million up 29% year over year with expansions being the largest driver in the quarter.

<unk> revenue for the quarter was $59 9 million up 28% year over year, while subscription revenue was $54 2 million up 28% year over year.

Remaining performance obligations or RVO ended the quarter at $346 million, representing a growth of 33% year over year and current Rps, which the contracted subscription revenue expected to be recognized over the next 12 months grew 28% year over year to $193 million.

Long term our beer wishes contracted subscription revenue expected to be recognized after the next 12 months grew 39% year over year to $153 million.

Our dollar based net retention for customers over 500 employees was 120% for the trailing four quarters compared to 117% in the second quarter last year.

While im pleased with the progress of our investments and our partner ecosystem and public sector. We've also taken steps to improve our operational efficiencies, which will enable us to continue improvement on both the margin and dollars loss space and sequentially throughout 2022, making the first quarter a high watermark for our loss.

As a result of improved non-GAAP operating margins.

Now expect to achieve positive free cash flow during 2023.

Before turning to gross margins expenses and profitability I would like to note that I will be discussing non-GAAP results going forward.

In the second quarter of 2022 gross margin was 78% up 8% from the first quarter.

Gross profit was $47 million up 31% year over year.

We've seen improvements in our gross margin due to a revenue mix shift towards subscription and improved hosting capabilities as we move to a multi cloud strategy.

Sales and marketing expenses in the second quarter of 2022 was $38 5 million compared to $28 1 million in the second quarter of last year.

This represents 64% of total revenue in the second quarter compared to 67% last quarter and 60% in the second quarter of last year.

R&D expense in the second quarter of 2022 was $14 million compared to $10 7 million in second quarter last year. This represents 23% of total revenue versus 23% in the same period last year.

We continue to make investments in our platform to drive innovation and increase our flexibility for deployment.

We will continue to invest in R&D as we extend our product and invest in our ecosystem in 2022.

G&A expense was $11 1 million for the second quarter of 2022 compared to $8 8 million in second quarter last year.

G&A was 19% of revenue in the second quarter versus 19% in second quarter of last year.

We are investing in the infrastructure of our business and continue to drive long term scale in our business.

Going forward the primary areas of investment for us will be in R&D sales and marketing as we look to continue to capture the growing market opportunity for our products.

We've made progress in the second quarter driving greater efficiencies in our operating model, which drove our operating loss lower than our initial plan for the quarter.

Operating margin of negative, 28% compared to negative 32% last quarter and in the same period last year of negative 25% net.

Net loss per share in the second quarter of 2022 was 19, Susan $84 7 million weighted average shares outstanding.

Free cash flow was negative $12 2 million in the second quarter of 2022 compared to negative $23 million last quarter and negative $7 4 million in the second quarter of last year.

Free cash flow margin in the second quarter of 2022 was negative 20% down from negative, 36% last quarter and 16% for the second quarter of last year, which is a reflection of our improved operational efficiencies.

Turning now to guidance.

While we were pleased with our performance in the second quarter, we are taking a more conservative approach to the remainder of the year. In addition to the more uncertain macroeconomic environment, we are doubling down our focus of greater than 500 employer customers and expect increasing churn from our small customers, which currently represent around 7% of our total error.

With that in mind, the macroeconomic and SMB impacts are factored into our revenue guidance combined we expect this to be a $4 million to $5 million headwind for the revenue and are totally or for the second half of 2022.

We are driving more efficiencies with our operating model, while aligning our strategic priorities as a result, we expect to see improved operating margins sequentially in the third and fourth quarter on a non-GAAP basis, and we are improving our operating loss guidance. Despite the revenue headwinds mentioned previously.

With that said for the third quarter of 2022, we expect revenue in the range of 62, 5% to $63 5 million representing growth of 24% to 25% year over year.

non-GAAP operating loss in the range of $15 5 million to $16 5 billion.

For the full year of 2022, we are lowering our topline revenue guidance and lowering our expected operating loss range.

We expect revenue in the range of 246% to $249 million representing growth of 27% to 29% year over year non-GAAP operating loss in the range of 68% to $65 million, reflecting a gradual improvement and operating leverage in the second half of 2022 as we continued to see returns from our investments.

With that Dan Rafi, Scott and I will take your questions.

Thank you.

I would like to ask a question. Please signal by pressing star one on your telephone keypad.

If you're using a speaker phone. Please make sure your mute function is turned off.

To allow your signal to reach our statements again press star one to ask a question the pause for just a moment to allow everyone an opportunity to signal for questions.

We will take our first question from Michael <unk> from.

From Keybanc. Your line is open. Please go ahead.

Hey, guys.

Congrats on the on the.

On the good numbers and expansion rate for those large customers could see that.

Good to see those.

Enterprise focus can you talk a little bit more about the fed opportunity and how close you get in there and then also.

I'll talk a bit about the move to free cash flow breakeven next year I assume that's just on a one quarter basis, how sustainable is that and when do you think we can actually get to that free cash flow breakeven on a full year basis.

Hey, Michael It's Andrew I'll take I'll take the first two and let Dan can back me up on the fed do you have more specific questions, but I'd tell you, we're making progress in line with our expectations on the certification that teams are very focused and I expect that we'll be showcasing our progress on that front with greater detail on the coming weeks.

So we're very pleased with the progress there on a free cash flow basis, I would tell you there's a couple of it.

Whenever you drive big operational improvements was many factors, which contributed to improving most importantly for US is we're very proud of the fact, we're using our own product internally are walking for watchman program, we're driving process efficiencies improvements in how we operate and that's showing up in a real way in our in our operating expenses. So very proud of the progress the team has made there.

And the areas, we focus which is really in every major operational units. The other thing that I would tell you is.

When you get when you get the teams really focused on executing on our singular goal and that singular ago highlights inefficiencies in other areas all work towards where all work together towards making sure that we're optimizing every dollar spent and I will tell you that when we talked about that at our analyst day. The response from our employees was tremendous and Ed.

He was giving us new ways in which we can drive efficiencies in our model.

It's all it's not about major major improvements, although our sales and marketing areas, where we have to drive some efficiencies. That's all these are all things that come together. When you work is when you work as a <unk> of unit that makes the mix improvements palatable and so you are right that the.

We're talking about in terms of hitting free.

Free cash flow positive position in 2023, and I do think that given the strength of our model and our framework and our unit economics that we'll continue to do that on a sustainable basis.

Thanks, Andrew I think we're going to discuss the fed rate was add on.

Well I can say the fed the fed progress has been going great for us.

We're well on pace for meeting our objectives and I expect that we'll be showcasing our progress on the certification in the coming weeks.

Okay. Thanks.

Yep.

And we'll take our next question from Scott Berg from Needham. Your line is open. Please go ahead.

Hi, everyone.

Congrats on the sales in the quarter. Thanks for taking my questions.

I guess I've got a.

Couple of things here first of all I wanted to start with the new Chief revenue Officer welcome to the call Thats in.

Wanted to try to maybe get some commentary I understand.

What new process efficiencies or changes in the sales organization. We can maybe expect over the next I don't know 12 18 months. Thank you.

Thank you and I'm glad to be aboard.

I don't expect significant organizational changes per se I think they are in pretty good shape from that perspective, but there are some discipline and efficiencies I think we can drive in the way in which we manage pipeline and the way in which we manage aging maturity.

Just things such as you would expect for the company to mature itself that you would see in the sales organization. So there's no magic here just good sales discipline and approach.

Got it helpful and then Andrew on your guidance here for the second half.

Can obviously back into the fourth quarter guidance and your guidance assumes a little acceleration in revenue growth rate from Q3, Q4, I wanted to try to understand where the confidence in that guidance comes from and this is something I don't know if sales cycles or deals that moved from Q2 into Q3 that that's helping that but any color there would be.

Thank you.

So certainly and Scott you remember that when we talked about the Q2 earnings we just talked about.

Well in the quarter on <unk>.

Especially with respect to those deals as well.

When you look at our history and our revenue profile for Q4 is always our strongest period throughout the year and it's a reflection of the fact that how we actually go through our selling process and frankly, how our revenues lineup too.

On a quarterly basis as well, so it's really more linearity than anything else, but.

The thing that despite the macroeconomic headwinds that.

We're all talking about and are well documented I will tell you that I'm really pleased with how well our pipelines are lining up to align to our <unk> and our enterprise large enterprise.

<unk>.

We made that is a focus and the teams reacted and the pipeline is really shifting.

Material way towards the right customers I talked about that around so it's really about focus on the right customers that can expand with us and have the problems with which we can solve the other thing I would tell you is that the pipelines are exhibiting more and more expansion opportunities and it is a reflection of the sales efforts in the sales motions were driving when you don't.

I want to be prudent about how we're actually setting guidance with respect to the broader macro environment, but for us the levers we've pulled in the ones. We highlighted are starting to show up in our mature and it feels like we're just positioning the company very well for our long term growth.

Great Super helpful. Thank you for taking my questions.

Okay.

We will take our first question from Kevin Kumar from Goldman Sachs. Your line is open. Please go ahead.

Hi, Thanks for taking my question.

One on the updated guide given the increased profitability expectation how much of that is in permits maybe sales rep productivity and are there any changes in terms of sales capacity investments in the back half of the year.

So I'll take that one and I'll, let Scott maybe comment if he wants to on sales capacity I would tell you that you may recall that we hire most of our sales capacity at the beginning of the year and so we made those investments with the expectation that they could get more and more productive as we go throughout the year and certainly in certain markets and certain segments, we're seeing that productivity.

We expect it and that certainly given us a lot of confidence that the investments. We made we can continue to drive that focus on sales efficiency. I also told you at the analyst day that we are focusing our efforts on specific market segments and specific opportunities and in other areas, where we are deemphasizing, we're not spending as much time and effort investment and that's.

Allowing us to drive greater efficiencies overall.

And when you start focusing on the types of customers that gives you the greatest profit how much you convince local teams are doing the right activities and so.

That's really kind of all of that buildup.

That I don't see a significant increase in sales and marketing expenditure to achieve the growth that we need.

Super helpful. Thank you and then one on.

On the <unk> partnership I think it's been a couple of months since that was announced and curious if you're starting to see customers leverage the combination is wellness and locked in and is that accelerating.

Say that identification of technology gaps and time to value for customers. Thank you.

Hey, this is Dan so we are seeing the pipeline the growing and there is a lot of interest, especially with the larger enterprise.

A lot of CIO was asking about it we are joining a lot of calls.

And that was our first obviously integration with them.

So we are looking gained in next quarter to have at least one or two big customers to try it out and so we're pleased with that.

The interest is just keep growing and growing and obviously, we're working on phase two with them to deepen the technology partnership.

Great. Thank you.

We will take our next question from Daniel Srinivasan from Barclays. Your line is open. Please go ahead.

Hi, Thanks for taking my question.

Wanted to talk a little bit about your kind of revenue growth versus free cash flow profitability philosophy, given that youre even moved up.

Free cash flow goal by that one two years can you just talk about the formula for reaching the rule of 40 now and do you still expect to get there by 2024.

Headwinds, we're all experiencing but.

But I do believe that the short term and certainly.

We're thinking about increasingly.

Second half of this year and into 2023, there's not a lot of more theres not a lot more incremental investments we need to make in order to really drive the revenue growth that we see so that's that's really the basic formula We've got a lot of little different initiatives on every major line to go drive improvements in our operating leverage and the actions we've taken and some of them date back.

Year or two we're starting to see the benefits of those actions now in our operating model. So.

It's not magic, it's just it's just hard work and.

We heard the market and the feedback from when we rollout our initial investments at the beginning of the year and we doubled down on our focus on operational efficiencies and targeting the right customers and that really helps get the whole company aligned on the outcome of driving towards free cash flow positive position.

Got it no. That's helpful. And then can you just talk a little bit about kind of the cadence of demand through the quarter given that you do report a little bit later than some other on cycle companies and kind of did it trends from later in June continue through July into early August and then I guess, a quick follow up on that.

You talked about.

<unk> pay customers.

Make up maybe about six I think there are about 60 of them that our DAP customers can you talk about how some of those customers specifically performed versus the overall base. Thank you.

A couple of cases and in those cases, the even the GTK customers that were already that were the ones that we're expanding with us. So we're showcasing our technology to the largest companies in the world and they are seeing the benefits associated with broad adoption.

When they do that.

Able to improve their business processes in a meaningful way and and Thats really buoyed our optimism that we have done the right things as focusing our organization. So no major change in that focus I think we're not just seeing the benefits of it you'll see it in our in our DAP customer number I think on a go forward basis within <unk> can you see that progression and you want to.

Remember I talked about <unk> and the progression there reminded told everybody at that point in time, we had.

Our growth and if you do the basic math that I've shared before it's a $200 million plus opportunity for us just focusing on our existing customers.

<unk> them into a DAP customer.

Regarding the unit economy.

Specific average deal he grew to $725 540, so the deals themselves also Paul.

The average results.

No that's helpful. Thank you.

And just on that the demand part of the question.

Yes, so I wouldn't say that.

I wouldn't say that the demand profile is substantially change for us I think we are like every other major enterprise software company that has a backend loaded quarter from a linearity perspective.

Certainly our thought processes. When every other company is talking about demand headwinds lengthening sales cycles caused us to really reflect on now.

What the right position was for us on guidance as we shift up market and talk to larger and larger clients.

<unk> seen our demand metrics is an increase from the partners more demand driven by partners in that.

Another significant thing in the partner deals that are coming are larger in the ASC.

Alright, Thank you I appreciate that color.

We will take our next question is from Michael <unk> from Wells Fargo Securities. Your line is open. Please go ahead.

Hey, Thanks, Good morning, I. Appreciate you taking the question I think maybe it's just taking a step back it would be helpful. If you could just spend some time on what youre learning around selling the DAP space in the current environment, you mentioned landing the largest deal ever during the quarter.

Also it sounds clear theres, a more measured stance in framing targets for the back half of the year. So just how much of the shift in outlook comes from the continued de emphasis of smaller customers and impacts you're expecting there and then on the larger customer side are there ROI or efficiency gains youre, finding yourself able to lean into in the current environment to help offset.

Some of that elongation are just constrained environment that we're hearing more broadly across software.

Hey, Matt I'll start so as I mentioned just.

Just now on the call in the quarter, we signed our largest deal.

Ever in our history and that was an expansion.

So what we're seeing is that our larger customers are continued to increase the spend with us because they are seeing the gains and the ROI from deploying of digital adoption platform.

And it's clear to them that they need to go enterprise wide or too sorry, deploying walk me on more and more and more application. So we're seeing it across all of our customers. This is why the average.

Rich.

For a customer went up two 7% to.

725.

And they're deploying it we absolutely think that thing today economic and walk me in DAP in general we will help them a lot one saving money on software increased productivity and just gain more ROI from their current investment. So we are soon to be the solution to help organ.

That was a big sign for us if we're doing the right thing.

That's all helpful. Maybe just as a quick follow on Andrew in terms of what's assumed in the outlook for the rest of the year is it just big picture. What you are seeing currently holds throughout the rest of the year are you, allowing for additional impacts where the surface or how do you approach framing targets given a bit more uncertainty here.

Just how much visibility do you have into targets between now and end of year. Thank you.

So I think we've got we've got good visibility on our pipeline and as Scott said, he is doing more and more to drive discipline in how we frame those pipelines and how we mature of them.

So that part's really positive I will tell you that we were very intentional with our guidance with respect to the less than 500 employee accounts, that's where we've shifted away our focus and I do expect that when you're shifting your focus away from roughly 7% of our IRR theres going to be some headwinds there that may accelerate.

And that factor definitely into.

Those business lines, so as we look out and see and expect that theres going to be some headwinds that's the market segment for us it will be hit naturally.

By a slowdown so.

It's a little bit nuance on trying to split hairs between what is more macroeconomic versus intentional on our part to shift away from less than 500.

It does weigh heavily on our thought process on what the second half guidance is going to be.

Thank you.

We will take our next question from Tyler Radke Citi.

Your line is open. Please go ahead.

Alright, thank you.

Good morning, I appreciate the question.

I wanted to ask you just about the million dollar customers. It looks like you haven't added a new customer in Q1 or Q2, you added about 7 million in the first half of last year.

Yet you are talking about some pretty good expansion within $1 million customers. So could you just help us understand.

Your outlook there were some of those new million dollar customers part of the slipped deals you referenced that closed in Q3 or was there any churn from from that existing cohort that just kind of makes that metric.

Look flat over the last couple of quarters. Thank you.

Yes, so I'll start with the and we have absolutely zero return in that in that cohort.

Really they are just expanding I would say is we are a new category and we're entering an organization we need to prove our value so to get a customer to the first million.

That's the goal and Thats harder on.

On the fleet side, when we are getting to a million dollars. We are seeing those customer increasing so we didn't add new $1 million customers, but we added more than $1 million with those existing customers and signed our biggest deal in the company history, adding another over $3 million or adjusting one account.

We are seeing that trend.

Our goal is obviously to continue to adopt deployment and see more and more and more customers and will time and lead time, it would get to more 1 million <unk> customers. The good signs as I said as I mentioned is the existing customers are continuing to expand.

So the other thing I would add to that Dan is that we did see good good increases in the number of customers greater than 100000.

Virtually all of those customers that are each rep ultimate where expenses. They grew over a period of time, yes, so as we're adding more and more customers even in the greater 100, K, they're expanding to the average IRR for that cohort grew.

38%.

Overall value and quarter over quarter year over year grew the average IRR grew 12% so as those customers those customers continue to extend those graduate into million dollar customers and we go back to where our focus is if we've got a lot of opportunities to go drive expansions of the clients you can bet that.

Future, we'll see more and more graduate.

That's helpful.

Great.

Maybe a follow up just on the outlook.

Excuse me the full year.

Are you just thinking about.

Typical Q3 seasonality, but it did seem like maybe this year you do have the benefit of some slip deals. So maybe just frame for us how we should be thinking about.

Our seasonality for Q3 and Q4, thank you.

So thanks for that I. Appreciate the question I think youre absolutely right.

Typically you see a little softness in the year.

So you're around this time as well I would say look this is also the time when we're seeing some of the initial churn from the SMB clients. So it is going to be something in the line.

With what we saw in Q2, but in Q4 is typically where we see our largest.

Contribution so we're going to see that same type of seasonality. Obviously, there is theres a lot of things at play with respect to that but I wouldn't expect huge.

<unk> growth in Q2 in.

Q3.

I point you to those same types of linearity you saw last year to try and come up with your <unk>.

Processes on how you are looking in the second half, where we really did have some softness last year in Q3 <unk>.

But we more than made up for that in Q4.

Thank you.

Okay.

We'll take our next question from Josh ban on that Morgan Stanley . Your line is open. Please go ahead.

Great. Thanks for the question.

Clearly some some great expansion trends that we're seeing and talked about strong pipelines.

At the same time, we have this macro backdrop and.

And I guess some commentary on slip deals. So just wanted to get a better sense for <unk>.

Sales cycles, and how your conversations with customers are.

Our going in light of this macro maybe both from the perspective of existing customer existing large customers and then also for new potential customers.

Yes, so I'll start with.

On whenever you're moving your focus and segment upmarket youre going to see that the overall average deal cycle time, we extended that I mean, just natural naturally as we ship more and more of our focus on the large customers.

You'd see that extension.

The good thing is the focus in the pipeline. We've got is weighted more towards expansions with not trying to capture a lot of new clients. However, I.

I also tell you I don't want to over rotate too much on just focusing on expansion, we're still focusing on going after some clients as well.

Objectives to go capture a lot of new <unk> and those are in our pipeline too.

And I would add two things one as you know when we started.

Welcome Me 10 years ago.

We're very much focused on the use case base. So we sort of walk me through your product what mist for Salesforce walking for Workday now as we're expanding into that category and we're seeing massive demand.

For digital adoption platform, obviously, those conversations are much more wider so when we're talking with CIO or COO within companies were talking on a much bigger deployment.

Much deeper.

But the value of the contract is way higher.

The focus that's what we're seeing that's working and obviously that that's our mission and our promise.

To help companies with their digital transformation.

Growth and Kpis and this is not just the pure up deployment. This is a full enterprise deployment that we can touch every employee every technology every business process I.

I hope it answered your question.

Yes. Thank you.

We will take our next question from Pat Walraven from JMP Securities. Your line is open. Please go ahead.

Oh, great. Thank you and congrats on all the progress.

So.

I guess, maybe Dan and Andrew I'm not sure but.

I'd Love your perspective. This is a very big picture I'd Love your perspective on where walk me and digital adoption.

Fits in strategically with what other players are doing so you have a partnership with the logos alone has started as process mining now there theyre positioned himself.

Execution management software.

Integrate with service now, which is where Andrew work before.

And they have their creative workflows and that <unk> include the low code and RPE I think it's really confusing for investors how do all these pieces fit together and where do you fit in.

Sure. So I would start then I would go to the specific examples that you just mentioned so long as an in service now.

So so long as doing backend.

Business mining business process mining right Theyre, taking all your transactions from from the database from the law, but you don't have anything on the front end like widely user how users are interacting with software. So that's one on the service now if they are a great inspiration obviously to be the work were asked or something like.

But reality is that companies are deploying a lot of software just Justin sales. They are using eight to 12 different application not mentioning HR benefits payroll and so on so reality that the employees are not using one vendor or not using one application you are using multiple we're talking about 2030.

In some cases much much more thinking about organizations big organizations that thinking acquisitions, they have four or five different CRM from different vendor if it can be Oracle Salesforce. Microsoft you name. It at the end of the day the employee needs to be productive they need to complete a process and this is exactly where we sit we're sitting on.

Foodservice now or just along at just making our customer getting more out of what work. We can do so for example, our integration with so long as we're allowing <unk> to activate automation and action on the user or desktop based on their data right. So they have this amid.

<unk> data, but what's now how we can actually make the user taken action. So Salome trigger walk me by Ipi and then walk me bumps on the screen.

You have service now thinking about how many different processes you need to do and not all of them is on the service now sometimes you need to go through your ATM update details then goes to service now Dan go to Salesforce. Then go to another application you don't want it to be break or you don't you don't want the employee to be confused just because they need to go to one other solution with <unk>.

Under.

Piece of software and obviously welcome is orchestrating all of it so I hope it answered the question there would be happy to do that.

All up if you have.

That's great. Thank you.

Okay.

It appears there are no further questions at this time, Mr. Doug Chaffin Executive conference back to you financially.

Yes, I want to thank everyone our team our customers our investors and analysts to everyone on the call and thank you for being with us today.

Q2 2022 Walkme Ltd Earnings Call

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