Q3 2022 Workiva Inc Earnings Call
Events and financial performance, including guidance for the fourth quarter and full fiscal year 2022.
These forward looking statements are subject to known and unknown risks and uncertainties.
<unk> cautions that these statements are not guarantees of future performance.
All forward looking statements made today reflect our current expectations only and we undertake no obligation to update any statement to reflect the events that occur after this call.
Please refer to the Companys annual report on Form 10-K, and subsequent filings for factors that could cause our actual results to differ materially from any forward looking statements.
Also during the course of today's call we.
We will refer to certain non-GAAP financial measures.
Reconciliations of non-GAAP to GAAP measures and certain additional information are also included in today's press release.
With that we'll begin by turning the call over to our CEO Marty Vanderploeg.
Hello.
And thank you for joining today's call. We are pleased with our Q3 results delivering revenue growth near the high end of our quarterly guidance.
Q3 subscription and support revenue grew by 19, 9%.
Total revenue grew 17, 9%, even after a one 9% negative impact from foreign currency for.
For the full year 2022, we are targeting a total revenue growth of 20%.
The strategic investments, we've made in our platform and solutions over the past year are paying off.
For the quarter, we showed continued bookings growth in multiple solution areas led by ESG.
Global Stat delivered a strong quarter with the signing of both new logos and account expansion deals.
CRC also continued to deliver on year over year growth.
Demand for our ESG solution exceeded expectations. The market is investing in ESG well ahead of regulations to manage the disclosures for multiple stakeholders.
During the quarter, we signed several landmark ESG accounts.
A big three auto company purchased our ESG solution to complement their current SEC and management reporting solutions.
This opportunity was sourced by a big four advisory firm.
A big box retailer expanded their use of our platform to modernize their ESG disclosure.
This opportunity was sourced by a top 10 accounting firm it was influenced and will be delivered by one of the big four.
And one of the world's largest energy companies added our ESG solution with the influence from both an ESG technology partner and a big four advisory firm the.
The advisory firm will be doing the implementation.
We were also pleased with the continued growth in DRC.
We have seen significant wins as customers recognize the value of our platform.
As an example, a European based global Telecommunications company purchased our audit and controls management solutions.
This opportunity was influenced and will be implemented by a global technology consulting partner.
And a global investment management firm purchased lower Kiva platform for operational risk management to address expanded <unk> requirements.
The addition of op risk complements our existing use of lower Kiva GIC platform.
The continued focus on driving multi solution adoption propelled our growth.
As organizations face increased macro uncertainty and cost challenges the relevance of our platform becomes increasingly important.
Our 5500 customers Trust that we will provide an innovative cloud platform fit for purpose solutions and customer support to solve their most complex reporting and assurance challenges.
Market demand and customer loyalty continued to improve in Q3, our organic revenue retention rate remains best in class at 98, 1%.
We continue to capitalize on our substantial growth opportunity outside of North America.
In EMEA, our centralization efforts and focus on multi solution selling produced strong bookings growth in the third quarter building off the momentum reported in Q2.
Last month, we hosted our first ever hybrid customer user conference.
We welcome to where kiva amplify over 5500, virtual and 1700 in person attendees.
It was great to spend time in person with our customers and partners.
Over 2500 companies participated in this year's event.
Many of them new prospects.
During the event, we showcased where <unk> innovative platform and solutions.
We also shared the stage with many of our customers who spoke about their successes with our platform and the value we bring to their organizations.
39 partners participated in a session speakers in 'twenty partners, where conference sponsors.
We also held another successful partner summit and recognized our 2022 were Kibbeh partner Award winners.
Deloitte was recognized as our global partner of the year for their innovation solution extensions and delivery of clients reporting transformation.
Pwc U S was recognized with the partner Innovation Award Pwc continually invest in new platform innovations and accelerates the success of their global customers.
And in managed services KPMG was recognized as the Americas managed service partner of the year.
KPMG has built and delivered industry, leading service lines leveraging the <unk> platform.
It was also nice to see many of you who joined US in person at our Investor Day.
We appreciate you taking the time to attend and learn from our customers partners and employees.
Some of the key themes that were communicated at our Investor day include that we believe that the demand for regulatory software is consistent and durable.
We continue to invest in key platform capabilities and our growth solutions.
We have entered into a new phase in our operating lifecycle, increasing our focus on operating leverage.
Our investment thesis is stronger than ever.
Our Tam is intact and insignificant.
Our platform is ready for these times.
Our strategy is driving clear results.
Our customer base is right for expansion.
And our partner ecosystem is expanding and strengthening.
Julian I are aligned that achieving the proper balance between growth and operating leverage will lead to future margin improvement.
We expect to return to a quarterly operating profit on a non-GAAP basis in the latter half of 2023.
We remain confident that we will become a billion dollar revenue company and have the platform and the team to deliver on that goal.
In closing I'd like to thank our global team of dedicated employees, who continue to execute on our strategy take care of our customers and each other and live by our company values.
With that I will now turn the call over to Jill.
Thank you Marty.
Today I will review, our Q3 operating results and provide Q4 and full year 2020 guidance before opening the line for questions.
As Mike discussed we have delivered another solid quarter highlighted by healthy be on or off.
Operating margin.
We beat Q3, 2022 revenue guidance at the midpoint and we would have exceeded the top end guidance if exchange rates had a constant.
We beat guidance on Q3 operating results at the midpoint by $4 $1 million.
Now, let's go through some key results and highlights for Q3.
We generated total revenue in the third quarter of $132 8 million showing growth of 17, 9% from Q3 2021.
Subscription and support revenue was $118 $6 million up 19, 9% from Q3 2021.
New logos and new solutions, both helps drive strong revenue growth in Q3 2022.
66% of the increase in <unk> revenue in Q3 came from new customers added in the last 12 months.
Professional services revenue was $14 $3 million in Q3, 2022 up three 5% from the same quarter last year to.
The increase was driven by higher ex BRL services revenue.
We added 160 net new customers in Q3 for a total customer count to 5521.
The growth of 1395 customers from Q3 2021.
Our total customer count includes 895 <unk> customers.
As Marty mentioned, our subscription and support revenue retention rate was the best in class 98, 1% for the third quarter of 2022.
An increase compared to 96, 5% for the same period last year.
With that on our subscription and support revenue retention rate declined 107% for the third quarter of 2022 compared to 111, 1% in Q3 2021.
We discussed during our Q2 call. This metric is being impacted by the lifecycle of our customers who purchased our capital market solution during 2021 the hub.
Transition to a lower cost ongoing ACB in the Q3 2020 to your calculation.
Excluding the impact of capital markets. This metric would be about three points higher this quarter.
Please note that customers will not be included in our retention calculation until we have a full year comparable data.
The number of larger subscription contracts continues to show growth.
March willing 2021 due to COVID-19.
We posted an operating loss of $8.4 million in Q3, 2022 compared to an operating profit of $5 million in Q3 2021.
At September 30th 2022, cash cash equivalents and marketable securities totaled $433 million, an increase of $4 million compared to the balance at June 30th 2022.
Cash flow from operating activities in Q3, 2022 totaled $4.9 million compared with an increase in cache of $16.3 million in the same quarter a year ago.
Now turning to our guide.
Our current 2022 guidance assumptions are dependent on a variety of factors that are subject to change, including the challenging macro environment.
We continue to believe our assumptions are appropriately prudent for the current conditions.
For the fourth quarter of 2022, we expect total revenue to range from 139 million to $140 million.
We expect non-GAAP operating loss to range from 5.7 million to $4.7 million.
Loss of 10 cents to eight cents on a per share basis.
Our share account will be approximately 53.3 million weighted average shares.
We expect operating cash flow to be negative in queue for due to the timing of the payment of certain annual cash bonuses.
For the full year 2022, we expect total revenue to range from 533 million to $534 million.
We are improving our guidance for non-GAAP operating loss to range from 23.5 million to $22.5 million or a net loss of 47 to 45 cents on a per share basis.
Our share account will be approximately 53 million weighted average shares.
And for the full year 2022, we expect to post positive free cash flow for the sixth consecutive year.
In summary, where kibbeh posted another strong quarter, even with the challenges that we are seeing in the world. Today, we are confident in the opportunity ahead.
We continue to experience broadbase demand for our solutions and we remain committed to our strategy and are focused on capitalizing on our market opportunity.
We will now take your questions operator, we are ready to begin the Q&A session.
Thank you.
If you would like to ask a question that perhaps star then the number one on your telephone keypad.
If you wish to withdraw your question simply press Star one once again and.
And will password just a moment to compile the Q&A roster.
And we will take our first question from Andrew Gasperi with Baron Berg. Your line is open.
Thanks for taking my question I guess.
Totally understandable in terms of the guidance for the year I was just wondering if you could maybe elaborate a little more what you see in the fourth quarter, so far and.
Might be mistaken, but if I remember last year, you did issue a <unk>.
Guidance for the next year I was just wondering is is the macro environment still relatively I'm certainly got Y one hasn't been issued.
Yeah. Thanks for that question.
How often in the room these days.
First off what we're seeing in queue for you asked about I mean, Q4 is going well, we'll see in the.
Better performance in Q3.
<unk> at this point in time.
And you know we feel very good about the numbers, we put out there.
So you know all things considered especially since cat Margaret's would signal represents some of our gross each quarter is is pretty much dead right now in the creation of new companies is pretty much does so.
I'm really pleased with where we're at in queue for all our other solutions are picking up the pace and.
Keeping us in a good place so I'm happy about that we are seeing some macro things going on.
Fill in queue for.
Once a week I hear about some places.
<unk>.
New spend and so we're seeing some of that and that plays into.
Why we're being cautious on 2023.
We're going to give that soft guidance next quarter, but.
We just wanted to see when when.
Well you are in tune with at all to write what inflation is going to be what the fed is going to say over the next couple of months.
And I think that once things turn it off.
Who knows when that will be but we will see some.
Some firming up in the markets.
And spend Luckily.
We're in a compliance area and.
And we're a solution that is still you know.
Center on on what people do it's still.
Very very important that you really can't do it.
But you know we have seen some tightening of budgets that slows decision processes and things like that we haven't lost deals because of lack of budget slowing so.
Relatively speaking we are in a really good place being a.
Sort of mission critical compliance platform for all different types of reporting so.
We remain optimistic and as soon as we feel.
Things have solidified and we're starting to we're at the bottom so to speak and we're starting up and I think we'll be able to give a lot more.
Pertinent guidance.
My rule of thumb is [laughter], we give guidance and we miss it at all you guys cut our heads off and rightly. So so we're just going to be real careful and gift.
Give guidance when we're confident and not give guidance win.
We're just we just can't tell what's going on it's not anything internal either it's all macro stuff. So sorry for the long answer, but I knew that would that would be one of the <unk>.
Biggest questions of the day so.
And just to clarify Andrew So we did reiterate that.
John profit that we do expect is Mardi et cetera earlier.
Return to that quarterly operating profit on non-GAAP basis later half of 2023 now <unk>.
Reiterating that from what we talked about it or email it today.
That's helpful. In jail, maybe in terms of the preferred Noncurrent part I had noticed a sequential uptick I was just wondering is this just a function of more longer term contracts being signed or is there anything else that we should be aware of.
Four billings is that what you're asking about.
Yeah, sorry, I missed the question the <unk> the <unk>.
Current differed.
Okay, Yeah. The RPM yeah. So that one is just related to exactly like you're saying, we didn't have been moving towards more of those longterm contracts three three ones. We talked about the side effects were resigning tree your deal their annual pay that doesn't pack.
At long term or a P O number.
Great. Thanks, Yeah.
Mmm.
We will take our next question from Alex Sklar with Raymond James Your line is open.
Great. Thanks familiar Marty a lot of talk in the apartment influence deals in the prepared remarks, I'm curious about backdrop, if there's any opportunity to scale your own sales and marketing Vaseline you previously anticipated.
I didn't quite get the question you said a lot of talk about partners, but are we also going to scale or direct team is that what you asked.
Yeah, sorry, losing my voice, a little bit here, but yeah, but I'll I'll.
All the wind you mentioned that had seemed to have.
Level of partner influence. So I was asking if there's any opportunity to scale your own sales and marketing costs faster.
Scaling back.
Yeah or grow them or grow them by a slower amounts and kind of <unk>.
I mean, I think when you when you get to this scale.
And you try to look for operating leverage partners become a very important part of it.
And.
Partners bring leads the the the.
The cost of securing new customer goes down and the size of the deal goes up.
We are definitely putting more focus on partners that was the whole intent of those.
Those examples.
And yeah, I think over time, we'll see a trend where we see.
More and more coming from partners and less and less from our direct sales force I will say this I've never seen a real successful SaaS company to date in the way we're.
Partners could do it all alone you always have to have a balance and.
We're we're making great progress, we're still going to get a lot more of our partners and we are now. So there is some leverage to be had there for sure.
And we're seeing that so we're very optimistic and the partners thing that excites me as the partners.
Can see the opportunity now they can really see the opportunity they get two or three bucks at least from every dollar we get.
Usually more than that and so.
That's the real encouraging thing and we're seeing a lot of uptick from them and jewelry has done a fantastic job of pushing that so.
I think you will see a lot more leverage.
Okay, Great and I appreciate the comments about the strong ESG bookings, even without the formal rules and I'm curious kind of alright. So are you seeing any pause from kind of customer behavior with kind of the the FCC going back to comment period or any color broadly on what you're hearing as far as the timeline for formal.
Rules around the S T.
You know that.
When formal rules come out it's going to be the way, we look at and how we model and look at the world is going to be.
Upside for us so to speak.
But that being said I sort of sudden the first question I mean, we are continuing to see solid and.
Interest in demand for Es are ESG tool. It's surprise me after just one year of selling how well we're doing in that product line.
The resolve of customers is coming from different places I think regulation is going to be the last driving factor frankly.
Think.
They realize that.
Customers.
Who buy their products care now.
Capital flow, obviously cares the flow of capital and the owners of their company ultimately.
And.
And the boards the boards care and I can't tell you how many times I've heard someone say well our board said, we have to do X y Z. So.
I think that regulation will sort of be the cherry on top when that comes for us, but I really see most of that demand being driven out of the different constituents I just mentioned the customers.
Who actually buy the products the capital flow and then ultimately the boards and.
My purchases are based a lot on corporate behavior, now and I think that's only going to accelerate and I think most companies agree with that that is going to be what happens.
Okay. Thanks for the color.
We'll take our next question from Jo mirrors with Truest. Your line is open.
Great. Thanks for taking the question.
<unk> if you guys are seeing any benefit.
Vendor consolidation in the current environment, given the breath of your platform and.
But it is coming under some pressure here.
Sure when you say <unk>.
Any benefits from vendor consolidation tell me, what you mean by that.
Just buyers going from using a bunch of different individual needs.
Oh, Yeah I'm sorry.
I'm sorry.
Yeah, absolutely I mean.
We live that every day, we [laughter] I think we picked out over 200, SAS apps and are small.
In our small company and so we're really trying to <unk>.
Choose the winters in terms of providing platforms and.
I don't know exactly what the drive is I think that's one of them because I feel it.
And colleagues I talked to feel it too but.
We're seeing a lot of resonating with platform.
And we're we're transitioning everything we do to platform selling now we've been <unk>.
Application or solutions seller for quite a while and we're in the midst of that and it's resonating customers want to have one platform to do reporting and assurance and all sorts of reporting financial ESG multiple entity wishes. The GSR and then they Wanna share all those and make sure that.
They have all the different assurance <unk>.
Controls management audit all those on the same platform and that is definitely resonating.
Is it partially because of the vendor consolidation, probably I can't tie it to that for sure, but we are definitely seeing more interest in platform less interest in buying abscess. That's how we're behaving too so I see it internally in our own company.
That's really helpful. And then just from the product side I think you guys had launched a mobile solution somewhat recently and some of the customers who spoke with an amplifier. We're pretty excited about that because see sweet you know they come into a meeting and they wanted to look at stuff on there on her iPad. So I'm just curious what you're seeing any.
And your initial traction.
Yeah, I'll <unk> I'll, let Julie answer that.
We we had a mobile app over the years and it it it.
It wasn't something that our customer base, Billy embrace and utilize but we did do a reboot of it and we so digit amplify and we're putting in the hands of the customer so little early on the reception, but we do see the demand for it and requirements for it coming in far stronger than they have in the past year. So we're very.
<unk> is the aspect that rolling it out in the capabilities that they'll have and you have to.
For the customers.
Great. Thanks, a lot and I would just say julie's really push that with the product team to.
We are so proud of our modern platform in a modern platform better have a.
Better have that component.
So.
She has done a great job of getting that product to a really good place.
Great. Thank you.
And we will take our next question from Patrick Shaw with Bird Your line is open.
Hey, guys, congrats on and get a quarter.
You touched on the multi solution strength quite a bit in your opening remarks could you just provide some additional color on the trends you are seeing in light of the current macro environment are you seeing a better uptake in multi solution deals from your larger customer cohorts or is this pretty broad based across all customers and.
And then in relation to the partner channel you seeing these partner led deals have an impact on the mix of multi solution deals.
Yeah, I'll, let let Julia answer that one <unk> right in the thick of it every day so.
On the multi solution there are some patterns I mean, we tend to see certainly with our Trc Sweet Escalations, we see multi solutions. There we have a number of capabilities and their controls on it <unk>.
So we do see multi solution there and then the trend in the market around controls CRC with other capabilities.
<unk> E S E.
Something where we're working towards so we we do see those in in the market.
Certainly one of the compelling reasons to work so tightly with our partners is to go hiring organizations got brought her in organizations they bring us in their digital and financial Okay transformation.
<unk> with their customers. So absolutely that is the goal of getting sore steals and continued to sell broader multi solutions with our partners.
Excellent. Thank you and then just.
Regarding year of Empire for a little bit can you just talk about the current demand environment missing in Europe , and if there are any noticeable intraquarter trends you want to call out and then just powersport specifically can you just provide some additional color on the crosstown upsell opportunity you have especially in light of the current macro.
Well the.
First off.
The first part acquisition. We are there are three primary driver as one you reference that is the cross sell and we're just starting to ramp that now and we've we've had some success already moving some of those accounts.
And in terms of macro in Europe .
The word on everyone's talking is worse in Europe than here in places hire all that stuff we have not seen.
A larger downturn there than we have in the states in the one in the states is not that great yet two.
2023 will be interesting to see how the budgets look.
But we are seeing similar.
Not widespread but some some slowing down of deals in both markets and that's roughly the same we don't see it any harsher, but like I said earlier, where mission critical and a regulatory.
In Europe , they're even more regulatory then so.
I think we're sort of being.
Little immune from that in some ways, but.
So not a lot of difference there and then.
Powersport the European.
Mandate for ESF as an annual mandate. So we haven't really seen a lot of uptick in new selling their we're just getting into that season now. It's just starving. So I'll be able to report back later, but we have done a nice job of dealing with our existing customers there because they need new capabilities for the new.
Firemen, there's no requirements for the next several years.
And so we're seeing a lot of goodness there in terms of dealing with partners to sell them new capabilities and we're starting to the beginning of the cross sell so we're still very pleased with that acquisition great team great product.
It's going to broadly serve the low end anytime someone at the tag of PDF is the perfect thing to.
Just grab it and tag it and for all the history report small companies will have to do and it's really got along.
Long tail on the benefits for us.
Great. Thank you guys so much.
Thank you.
As a reminder to start one if you would like to ask a question and.
And we will take our next question from George Karasawa with Citibank. Your line is open.
Hi, Thank you Jordan.
First question.
Swelling your cycle that anchored to concrete last quarter curious if you could just compare contrast, what we're seeing incentive trend would you say things.
Deteriorated slightly or is this kind of that.
More of the same.
Hi, George Yeah, [laughter] I know, you're trying to compile a view from talking to a lot of people and I'll say this is.
It's really anecdotal so far and it's here and there.
I, if it's gotten worse between Q3 and Q4 its just marginal isn't a big change.
I think people's budgets, they have intact now and some are being pulled back a little bit, but I think the real test will be in 2023, when we see what the new budget look like.
For our for our our customers and.
And when we do our job selling and we explain and convince customers will actually save money using our solution. They.
They just have to get up that that transition home buying implementing them to see the return a little later so.
We are still optimistic in 2023, but between Q3 and Q4 not not a ton of difference now.
Got it. Thank you and then a quick follow up uhm, thanks to impact Tucker, 2% headline.
Presumably at some headwind built into the guide Alrighty I just.
Kind of the amount of fat incrementally.
Thank you.
Yeah. So we did have you know you always have that plan per cent amount. They I think you're saying this properly from the line that accompanies that keeps you did have a pretty significant impact in.
And so as we talk about in the call.
<unk> repeat likelihood upbeat and hanging a dark items had it not been for the currency impact.
Oh.
Got it thanks for taking the question.
You're welcome thank you.
And we will take our next question from Adam Hotchkiss with Goldman Sachs. Your line is open.
Good afternoon, and thanks very much for the questions Marty great to see the progress on ESG could you give us a sense for how you're thinking has evolved around the go to market for the product given your early demand signals just wanted to give us get a sense for channel performance across new lands versus cross sell is while his partner channel versus direct.
And also to that point, what the profile of customers who are moving more quickly on this typically look like.
Okay I'll try to get all those [laughter], if I forget one Adam let me know.
You know I would say that the.
The deal sizes are coming in larger than we anticipated.
And that's in theirs partners involved in a lot of these deals the partners you've heard all the public announcements from the partners about.
Jumping headfirst into the ESG arena, and they view us as really a premier starting point so we're getting.
A lot of selling from from partners I would also say initially.
We've really targeted our customer base because.
We wanted to get the biggest footprint as quickly as we could since we really do this as a land grab a local grabbed but I think we're being successful there. We're we're getting a lot of deals in our customer base.
And we're going to be able to use those references and those numbers as we expand into other areas.
To be justifiably be the number one liter of ESG reporting, which we believe we already are but that will only continue.
And then.
I think you asked geographic but we're ahead in North America, just because it takes longer to hire in Europe . It takes a lot longer to hire sellers there, but they are coming up the speed and we're starting to see a lot more activity this quarter in Europe actually and getting some nice deals out of there too so it's.
It's really a mix of direct and partner.
We are a few months ahead in North America, just because of what I alluded to but we're seeing.
Europe is going to be a strong market as the U S. Just based on the fact that the he was taking this whole thing a lot a lot more seriously so.
Yeah that that's Super helpful. Thanks Party and then just a quick follow up for Jill when you think about the margin ramp and how that's progressing I think profit was a little bit better this quarter than we expected what were the drivers. There is there any impact on hiring are expensive plans given the current macro thanks.
Sure.
And when we came into this year, we talked about the fact that you are making you can vaccinate typically around at execution on our strategy.
But that we were giving it fit here and so coming into the end of the year, we are swelling hiring and and listening to the market and.
We have you all care more about a question that the margins as opposed to suggest Apple Cassandra. Please Taylor, we're balancing that gross margin Hicks sure.
And making sure that we're making decisions now that allow it to be.
Successful in reaching.
And achieving the guidance that we've given all ready for 2023 around getting that quarterly profitability towards the end of next year.
Great and I was I was mistaken.
Just add that.
I realize.
Indications takes a lot of repetition, but to echo what Jill said.
This has been our plan all along.
Invest in 2022.
And we were clear that mainly for ESG, but also some for cap markets. The cap markets investment, even though it didn't hasn't shown a return yet we're making great strides in law firms and companies that will go public. Some days. So we're building backlog already with that investment. These were things and we've also said way back.
Then that we would shift back to leverage in 2023, So we really haven't changed much except we did at the end of this year's reduce a little a little of the investment we did sort of cut the end of it off a little bit.
Because of the pressures on the market.
I'm still a big believer in growth because and SAS companies you can cut the cash flow and margin anytime you want.
But I'd rather do that when we're bigger so we're still focused primarily on growth, but we're going to be very.
Very thoughtful on.
On our ability to perform.
And.
And also maintain improved margin as we go forward. That's why we made the commitment for the end of the year. So.
Really helpful. Thanks, Marty Thanks Jill.
And we will take our next question from Brad read back with Stifel. Your line is open.
Thanks, very much Marty may be following up on that last series with commentary what if anything would make you move faster on the profitability side.
You mean it.
Externally or internally.
What if anything did you are too.
Well I mean, if the macro gotten a lot lot worse, but you know.
Our retention is very high.
When we see a downturn like this we see a reduction in growth, we don't see our revenues shrink.
So we're still going to post a healthy increase in revenues this year and next year.
And so that's our main focus.
We do think it's a net worth of natural size now with some of the things I've alluded to partners maturing of the platform. There's a whole bunch of things going on in our life cycle is going to make.
Creating leverage.
Very feasible very attainable and at the right time in our in our growth cycle the ESG.
Like I've always said as a generational opportunity for this company, we had the bite the bullet one year and spend money and.
I would not change that decision at all but in general you know from our quarters before that we were always showing profits and reinvest thing a lot of it but some of the prophet putting to the bottom line and that's the way it will will move forward over time.
But we will be focused on operational leverage.
And but are still our primary focus is growth we want to get to a 1 billion as quick as we can because then if someone wants cash flow. We can produce a whole lot of cash flow insured or twice, what we could produce now so to speak so anyway.
That's that's super helpful. And then maybe a more strategic collection, obviously late in the quarter. There was a a bloomberg story that you potentially had been approached by some P firms how do you balance the need to stay public versus the potential optionality that she could have been private.
Well.
This is my G. C. Answering now [laughter] you know, we really we really can't can't comment on rumours, but I'll say this.
We're a great company.
And.
I think in general we think we are.
On the upswing, we don't think we're broken.
And typically you cpe's to make their model they have to buy companies cheaper than what they're really good companies are trading for so we.
We think we have a ton of upside as a public company.
Especially where we're trading now.
We're going to continue to grow around that plus or minus 20% mark and that in and of itself provides.
Hefty return for investors and then.
If our multiple increases there's more there so.
We're really bullish on our future.
And you know it doesn't surprise me <unk> are all over we talk to them all the time I learn a lot of good stuff from bees, but.
I don't.
Rumors are are going to circulate when the prices are down on SaaS companies and we've seen a lot getting taken out but we think we're a very healthy company with a lot of upside so that gives us our optimism in our drive to continue.
Awesome, Thanks very much.
We will take our next question from mapped out there with William Blair. Your line is open.
Hi, there. Thank you for taking the questions. Maybe first question here on on how you're seeing I guess, the renewal pipelines that X 12 18 months.
If we go back 2019, 2020th at the time when you were.
Moving people to the new pricing model.
You were moving our customers new platform.
Would love to get some color on kind of the average duration of those contracts and did you think about anyone on a three to five year contract renewing in the coming years, you know any thoughts on the ability to.
Just pricing or you upsell. It are two different things that you could see as a potential opportunity as you kind of move through that period.
Well again, I'm, a I'm a big lifecycle of company Guy.
Do things when when when you're mature enough and good at it and certainly.
Renewables have never been.
Hard for us, but then we've never really taken advantage of them as we should.
And I think this year one of the initiatives we have is too.
Always engaged renewal sooner than later and have a very structured program in terms of how you price things, even what the price increase would look like compared to adding a new solution for instance.
Giving them leverage in that decision and we started doing that in a limited basis and we've had some success. So we're going to roll it out and really.
As we mature as a company you keep bringing in these types of programs. So.
I'm optimistic that renewals is going to be a driver for us now that we've sort of taken a different approach to it and.
Most of them I think roughly half our contracts are three year contracts and thats going up every year and.
And.
So we prefer three year contracts, just because of the workload and the lack of.
Buying decision opportunity for customers and then engage them early and and help them get more value out of our platform. So yes.
We're getting in a good place on using that as a lever.
That's helpful and.
Maybe just a another follow up on the international markets, obviously, you've got to talk about some of the sales changes you are making their any updates in terms of how it is progressing forward, whether that's I guess, what you are seeing it is resonating with.
With customers in terms of the approach and kind of how you expect that to to the wrestling into 2023.
Yeah, I'm really bullshot EMEA in 2023, obviously, we have to fight the macro issue so that might slow it down some but huge opportunity there. The centralization efforts Julie did have really paid off we've really got a good strategy good.
Execution cadence there.
And you know.
We have a lot of.
Well I shouldn't say a lot we have several very significant solutions, we're going to market there with.
I R solution.
Also our financial reporting solution.
And ESF and so and ESG. So it's not just visa, but there is there is.
Almost as much opportunity there is in the states and it's more greenfield ton of white space. There. So we're very optimistic with the internal changes we've made in.
And I'm just I just see that is just.
One of our bigger opportunities moving forward frankly.
Great good to hear thank you again.
Thank you.
And we will take our next question from Mike Grondahl with Northland Capital market. Your line is open.
This is my <unk>, John from Mike Ronald Thanks for taking the question.
Maybe first just done forest part I think last quarter. You mentioned that was 179 revenue in 500000 services you have those.
Those numbers were in this quarter.
L for for Q3, <unk> revenue weighs $1.4 million for those 895 customers you have fewer services and <unk>.
That is that correct.
Quarter over quarter.
Got it and just a reminder on that it's going.
Going to be more seasonally strong fourth quarter first quarter of that.
For their customers and that kind of wrapping.
Certainly they tend to have more and more activity around filing so as companies are thinking about doing those those finally.
And for the <unk> four and then as the actual activity is happening Q1 Q2 timeframe.
There's the seasonality accurate information.
Got it thanks.
Mmm, ladies and gentlemen, this concludes today's conference call and we thank you for your participation you may now disconnect.