Q2 2023 Matterport Inc Earnings Call
Good day and welcome to the medical incorporated fiscal 2023 second quarter results Conference call.
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I would now like to turn the conference over to Mr. Mike Knapp, Vice President of Investor Relations. Please go ahead.
Thanks, and welcome to matter Port second quarter, 2023 financial results conference call.
After the market closed today matter Port released results for the quarter ended June 30th 2023.
The release is available on the company's website at investors don't matter for Dot com.
This call is being recorded and webcast live and a link to the recording can be found on the Investor Relations section of our website.
Before we begin I'd like to remind you that today's call contains forward looking statements within the meaning of federal securities laws, including but not limited to statements regarding matter ports future financial results and management expectations and plans for the business.
These forward looking statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those discussed on today's call <unk>.
Additional information regarding the risks and uncertainties can be found in our filings with the SEC.
All forward looking statements are made as of the date of this call and matter Port assumes no obligation to update or revise them, except as required by law.
In addition financial references on this call will be on a non-GAAP basis, unless otherwise indicated these measures should be considered as a supplement to and not a substitute for GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure can be found in today's earnings slides, which are available on the company's website.
Hosting todays call are RJ, Pittman, Chairman and Chief Executive Officer, and J D Fay Chief Financial Officer.
And with that I'd like to turn it over to RJ to begin.
Thanks, Mike Good afternoon, everyone and thank you for joining us today.
Our second quarter execution was pivotal for the company this year.
We delivered record subscription and services revenue, while doubling down on our efficiency initiatives to deliver step function productivity gains in the second half of 2023.
Total revenue for the quarter grew to nearly $40 million fueled by strong enterprise adoption and steady improvements with our small and medium sized businesses.
Our key metrics set new records with spaces under management, hitting $10 5 million and our subscriber base expanding to 827000.
Reflecting steady growth in digital twin adoption.
Our leading spatial data library has rapidly expanded 33 billion square feet of physical space managed as customers are capturing larger spaces than ever with our pro three camera.
Businesses of all sizes continue to embrace our digital twin platform across the vertical markets we serve.
Increasingly they are achieving significant productivity gains by employing matter port software for facilities management space planning and utilization by reducing the need for onsite travel and promoting efficient digital collaboration.
This widespread adoption has propelled our subscription revenue to a record $29 million in Q2 at the high end of our guidance range for the quarter.
Our continued growth in revenue and our focus on operating efficiency has resulted in another quarter of strong outperformance on the bottom line with net loss per share of seven cents.
More than a 40% improvement from a year ago.
Moreover, our strategic partnerships continued to drive pipeline.
Nick just to large industry ecosystems opened new distribution channels and help us enhance our platform's functionality for customers.
Our unmatched digital twin platform eclipse customers with crucial tools for managing and marketing their properties and facilities.
By harnessing our extensive spatial data library, we expect our new AI solutions will generate breakthrough customer value and bolster our subscription revenue per accounts more on that in a moment.
In Q2, and early Q3, we implemented strategic changes across the organization to bolster execution of our company plan and fast track profitability.
These changes included a significant modernization of our subscription and pricing structure to enable us to more effectively capture SaaS revenue, while providing our customers with more value and flexibility.
Next we introduced Genesis, a companywide initiative to focus our AI efforts and push matter court further to the forefront of the digital transformation of the built world.
And in July , we announced a restructuring to accelerate our path to profitability, while creating a leaner and faster moving organization.
Each of these important steps accrue to our long term strategy, which I've discussed previously and I would like to elaborate on further.
In the quarter, we rolled out updated subscription plans and pricing designed to unlock more value and provide better flexibility for our customers.
Since we first introduced our subscription plans for matter Port digital twins in 2019, our customer base has experienced enormous growth to encompass diverse industries that use our platform and new and exciting ways.
This is fueled rapid evolution of our cloud based technology platform and expanded the functionality of every digital twin created retroactively.
To keep pace, we announced new subscription plans that offer increased flexibility and encourage customers to grow their use of our digital twins, while utilizing the rich features and functionality, we continuously add to our technology platform.
We've carefully updated our plants so customers can find the right subscriptions that fit their needs and budget.
As a result of these updates prices have increased across our standard subscription plans by approximately 7% to 11%.
Feedback from customers. Following this update in may have been very encouraging and we expect the pricing changes to begin to have a positive impact on subscription revenue over the coming months and carry into 2024.
Turning to technology we.
We have steadily expanded our AI first strategy with cortex, AI and property intelligence, leveraging our proprietary dataset, the world's largest library of digitize physical space.
Last quarter, we talked about property intelligence, our newest capability that documents and provides insight about the truth of his space as it exists today.
Such as providing automatic measurements or assessing the condition of the space or type of material.
This fully automated offering generates powerful property insights to enable clients to easily manage their properties online and discover new operational efficiency.
It eliminates the need for multiple site visits and automates previously lengthy or manual workflows.
Enabling our customers to make better decisions more quickly from anywhere in the world.
Property intelligence is the first product offering on our data vacation roadmap.
And is currently being piloted with select customers.
We expect to announce general availability later this year.
In June we shared a first look at Genesis and exciting new initiative that will combine property intelligence with generative AI and our spatial data library to offer a unique AI solution to the built world.
Genesis will leverage our 33 billion square feet of digitized space to create one of the most powerful spatial computing platforms in the world for homeowners and property managers alike.
Genesis is designed to automate interior design.
Planning property management, and so much more for the spaces in which we live work and play.
We plan to integrate Genesis across our digital twin platform with our first preview release expected by the end of the year.
This defines a new generation of intelligent digital twins that harness AI to better understand and describe the space as it exists today and envision how a space could look and operate in the future.
Matter Port is the only digital twin platform that can deliver a breakthrough at this magnitude thanks to our decade long expertise in artificial intelligence and our market, leading three D spatial data library.
Next up is efficiency as mentioned, we accelerated our profitability timeline and enhanced efficiency through a workforce reorganization and reduction.
The recent these changes have already improved our focus execution speed and our aim to fast track, our operational cash flow profitability to 'twenty 'twenty four.
A year ahead of our previous plans.
As highlighted by our Q2 results our core business remains strong and our diverse end markets are demonstrating the resilience of our business model and the challenging real estate market.
While challenging and especially difficult for those impacted by these actions.
The decisive steps, we've taken underscore our commitment and dedication to achieving profitability and fostering growth through any market conditions.
Before I hand, it over to J D faith to discuss our financials I'd like to spend a few minutes updating you on the state of the industry and the incredible impact of our partnerships that are driving revenue growth and expanding our customer base.
Over the past few quarters, we've discussed important integrations with Amazon's AWS Iot twin maker.
Which enables enterprise customers to seamlessly connect data into our digital twins.
Our relationship with AWS is a significant validation of the value of our digital twin platform brings to our shared customers like John Deere and in Vista.
Amazon is also a valued channel partner and drives a significant volume of our hardware sale.
In fact, this summer as Amazon Prime day promotion set a single day record for matter Port camera sales for Axis Pro two and our newest camera in the lineup pro three.
Our long standing trusted relationship with Amazon, a global leader in cloud services and E. Commerce continues to create valuable opportunities for our business and our customers.
Matter ports strategic partnerships with leading enterprise software providers like AWS Autodesk P. T C Pro Corp, and many others are kicking into high gear generating a strong pipeline exiting the second quarter.
This expands our presence in larger ecosystems, creating new distribution paths for our solutions, while improving our platforms versatility and value for users.
Fueling our subscription revenue growth.
Our strategic integrations offer customers easy connections to top tier software apps and services.
<unk> workflows and reducing duplicate task.
These integrations automate data thinking saving time, and enabling a focus on creative rather than administrative tasks.
In the AUC industry for instance, our integration with building information modeling software or Bim helps.
Helps streamline renovations and facilities management I connecting real world conditions with design processes.
The technology landscape is fast changing.
And matter port stays nimble by integrating with mission critical software and platforms. This strategy keeps us attuned to the industry trends and transforms how customers use spatial data across various sectors and applications.
We're also expanding our global reach by partnering with major distributors like confused to Lucio nays.
In Latin America, and Equinox technologies in the Middle East Africa, and Asia Pacific.
Mexico's industrial market boasts over 900 million square feet of building space with construction, reaching 2022 peak of 43 million square feet.
While real estate projects in the Gulf Cooperation Council countries amount to 1.4 trillion dollars this year.
These fast regions presents immense opportunities for us are new distributors will supply enterprises, and small to medium sized businesses with matter ports top tier digital twin platform and pro three and pro two cameras.
Canceling their global operational efficiency.
Recently, we also extended our long term relationship with idealistic.
Southern Europe's largest online real estate platform through a multi year agreement.
A strong testament to our partnership and commitment to keeping the European real estate industry moving forward amidst challenging property market conditions worldwide.
As we know the U S residential real estate market is experiencing lower than typical existing home sales volume.
Existing home sales were lower by 18% in the second quarter on a seasonally adjusted annual basis.
Despite this matter Port has continued to show strength with nearly 660000, new digital twins on our platform in the quarter.
The majority of which are related to residential real estate.
Our new digital probe all in one content marketing package continues to be well received as well with over 100% sequential growth from the last quarter when it was launched.
Moreover, real estate brokerages and agents are increasingly convinced of the value of using matter port with their listings.
74% of real estate agents report that they win more listings when they offer matter port digital twins.
Which is important in today's market have low inventory and heightened agent competition for those listings.
Matter of ports precision digital twins increase engagement with potential buyers boosting online interactions by 300%.
Two separate studies found that homes sell up to 31% faster with a matter port digital twin and the lifting.
We anticipate that AI tools like property intelligence, we'll introduce new subscription revenue opportunities in real estate and other sectors, such as construction and facilities management.
These tools enable customers to gain insights from data obtained from current or future imagined matter Port digital twins.
Finally showed inflation and interest rates begin to improve U.
U S existing home sales volume is expected to increase by 17% next year.
And we're well placed to drive rapid growth in this market with all of our innovative new offerings in the lineup.
I would now like to turn it over to J D fade to discuss our financial performance for the second quarter and the outlook for Q3 and the full year 2023.
Thank you RJ.
Second quarter, we delivered 39% total revenue growth year over year, reaching $39 $6 million, which was at the high end of our guidance range.
The strength in our revenue was across subscription services and product categories with subscription and services revenue, both achieving new records in the quarter.
Subscription revenue rose to $29 million in the quarter, which was up 13% from the year ago period also at the high end of our guidance range.
In addition, our annual recurring revenue grew to $83 $5 million.
We saw growth in both enterprise and small to medium business customers and in all three of our geographic operating regions with double digit growth in Europe , the middle East and Asia.
Of a record 827000 subscribers at the end of the second quarter, we had 758000 free subscribers and 69000 paid subscribers.
Free subscribers grew by 37% and paid subscribers grew by 11% compared to the year ago period.
These growth rates were roughly equal to the average of our growth rates over the past year.
Our net dollar expansion rate was 100% in Q2.
The net dollar expansion rate for SMB customers grew sequentially, while the enterprise cohort was impacted by a large contract with a public sector customer that was completed in the quarter.
Absent this impact the net dollar expansion rate for the quarter would've been flat sequentially at 103%.
Approximately 50% of our subscription revenue is derived from non real estate customers. We continued to see strong double digit growth in markets like construction travel and hospitality facilities management and insurance balanced with modest growth in real estate.
Services revenue for the second quarter was $10 $7 million, a new record and more than double in the year ago period.
Customers continue to embrace capture services, where we performed the capture and Onboarding of digital twins into subscription accounts for the customer.
In addition, we saw continued adoption of our add on services, including our Bim and floor plan offerings, our true plan offering for insurance adjusting as well as growth in our digital property marketing solutions.
Our product revenue was $8 million in the second quarter up 58% from the year ago period. This was primarily driven by continued demand for our new pro three camera.
Moving onto gross margin our total gross margin for the second quarter was 47% compared to 48% in the year ago period.
Our subscription gross margin was 75% up from 72% in the year ago period.
This increase was the result of efficiency related investments that we made over the past year relating to customer support and the processing and hosting of customer data on our cloud platform, which we are now realizing.
Product gross margin was 2% in the second quarter up from negative 37% in the year ago period.
The improvement was primarily the result of the resolution of the supply chain challenges that we experienced last year.
Product gross margin would have been 14% without additions to our <unk> reserve, we recorded in the quarter.
We expect that product gross margin will improve to the mid teens for the balance of 2023.
Turning to operating expenses research and development was $10 $6 million down 20% from the year ago period.
This change in R&D resulted from rigorous evaluation and reduction of spending.
Towards offerings that we expect will yield the highest returns reflecting our commitment to operate more efficiently as we continue to drive innovation in our technology platform.
SG&A expenses for Q2 were $31 $9 million down 10% from the year ago period.
This reduction in spending was primarily related to lower sales and marketing expenses as we instill further efficiency and discipline across our operations.
The result is a second quarter non-GAAP net loss of $21 $5 million and non-GAAP loss per share of seven cents.
One above the midpoint of our guidance range.
This is a 42% improvement in bottom line performance from the year ago quarter.
I'm very pleased with the significant progress on the bottom line is we are actively driving the company to achieve profitability.
Our weighted average share count was 298 million shares.
Moving onto the balance sheet, we ended the quarter with $446 million in cash and investments down just 2% from the prior quarter and we remain debt free.
Our cash used in operations improved to $12 $4 million in the second quarter, which is a 62% improvement from the year ago period.
Annualized in our Q2 run rate would allow for nearly a decade of operations, but we are not stopping there we are driving further improvements to achieve profitability in 2024.
Today, we are introducing financial guidance for the third quarter and providing our current view of full year 2023 financial guidance.
We remain on track to deliver another record year for the company as we grow the top line and improve profitability metrics.
Strong customer adoption outside of real estate and our increasing focus on profitability has resulted in an improving outlook for non-GAAP net loss per share for both the third quarter and full year of 2023.
With respect to our restructuring initiatives, we expect to incur charges of $4 million to $5 million on a GAAP basis.
With the majority of these charges incurred in the third and fourth quarters.
Importantly, this initiatives pulls our operating cash flow breakeven targets forward by one year to 2024.
Our subscription revenue remains healthy and our expectations for growth for this line item are unchanged.
We continue to experience strong demand in vertical markets, including construction travel and hospitality facilities management and insurance.
We are also demonstrating that we can grow in residential real estate. We expect however, continuing softness in the U S residential real estate market generally through the remainder of this year.
Modestly impacting our estimates for product and services revenue.
Accordingly for the third quarter, we expect total revenue to be in the range of $38 million to $40 million.
And subscription revenue to be in the range of $21.8 million to $22 million.
This represents 15% annual growth at the midpoint of the range for subscription revenue.
We expect the balance of revenue to be split roughly evenly between the services and product revenue line.
We anticipate third quarter non-GAAP loss per share to be in the range of 5% to 7%.
We have also tightened our full year 2023 total revenue range.
It is now $155 million to $159 million.
We have tightened our expectations for full year 2023 subscription revenue.
To be in the range of $85 million to $86 million.
This represents 16% annual growth at the midpoint of the range for subscription revenue.
For the full year of 2023, we expect a 24 to 28 non-GAAP loss per share.
This represents an improvement of three cents at the midpoint compared to the guidance, we articulated last quarter and a 37% improvement from 2022.
We have taken specific and measurable actions to sharpen our strategic focus and accelerate our path to profitability.
We have dramatically improved our cash flow from operations and Theres more to come.
At the same time, we will continue to execute on our plan to grow revenue by helping customers increase productivity reduce their costs and get work done faster and more efficiently.
With more valuable matter port solutions centered around AI, driven data insights and digital twins for the built world.
Now I would like to turn the call back over to RJ.
Thanks, J D a.
A robust Q2 results reflect the rising demand for our innovative digital twin platform solution.
<unk> the challenges in the residential and commercial real estate markets.
From small businesses to fortune 1000 companies our platform is crucial for delivering cost savings and enhancing operational efficiency and productivity.
The digital transformation of the built world is unfolding now that matter port providing instant ROI by automating some of the costliest and least efficient on location management tasks.
The responsive operational changes, we've recently enacted a matter part though challenging.
Firm, our commitment to fostering a sustainable business centered on long term growth and profitability.
Matter part has proven to be an indispensable tool to help drive real estate, even when the markets are down.
It's a tough time fine.
If you were using a speaker phone please pick up your handset before pressing the case.
If it anytime your question has been addressed and you would like to withdraw your question. Please press start then too.
At this time, we will paused momentarily to assemble that roster.
The first question comes from.
<unk> from Deutsche Bank.
Please go ahead.
Great. Thanks for taking my questions just wanted to connect circle back on that most pricing packaging changes that you guys can announce.
A month ago can you just elaborate a little bit more on the customer reception you've seen there have you seen any changes to retention of churn rates customers Kenneth moving over to the annual plan and just any way to size.
Of these changes and what that might be to your current air base over the next several quarters. Thanks, so much.
Thanks for the question.
I'll start N J D can can follow up with some of the financial detail.
First and foremost this is a project that has been many quarters in the making and and something that we enlisted the participation in support of some of our longest standing customers.
And that's a very important principle here it matter port customer Centricity and as.
As we mentioned on the call <unk>.
Pricing changes.
Alright, delicate an important thing to get right and in our case. It was very clear that pricing changes had to be commensurate with bringing at least as much incremental value.
To the amount of heart platform for our customers and in fact going beyond that and we have worked really hard over the last several years to do so and we've added so much value to the platform without any changes to pricing and the last four to five years.
That we have some room to move here and buy them and lifting the support of our customers in the process. We really think we hit the bull's eye. The response has been very positive.
<unk> you know early trends and we're in the early days of minutes are also exceeding our expectations, including great strength and customers moving up to the annual plan because they are seeing the value and the value proposition equation now uhm that we've incorporated into the new modern design the plans.
<unk> continued value add that we're bringing it to the platform and which were not John do it right, we will be bringing more value to the platform into the subscription holders drop this year and the years ahead. So you know out of the gates I couldn't be more pleased with how the team has managed this deployment.
And really really stay in close to our customers along the way J do you want to add to that.
Yeah. Thanks, Okay, yeah in terms of kind of the behavior.
Customers in response to the new pricey retention has been very good.
And then within our expectations and tech slightly better than our expectations, we expected a slight uptick in churn which did occur.
But that was actually offset by more customers than we'd expected converting the annual plants.
In response to the pricing updates.
And then of course those conversions to annual plans are in that positive it lowers volatility in M. R. R.
And of course, it accelerates cash because they are prepaid.
So overall, it's it's gone.
As well or better than our expectations and feedback it's Audrey mentioned, it's been it's been good.
The longer term as we go into 2024 I can see this adding.
About a million dollars a quarter just as a result of the price change to the M. R line, which we've included in our our guidance alrighty.
Got it that's helpful and I Wanna, just make sure I understand it sounds like your current Guy authority incorporate some of those pricing impact, but that's still a letter in overtime as well right. So the million dollar quarter should start smaller an entire later into the model.
Over the next four quarters plus is that the best way to think about it.
Yeah, that's a good way to think about it.
Awesome just a quick follow up just in terms of your your your total revenue guidance. It seems like your subscription it's almost kind of unchanged in terms of the the delta you're saying from what you guys are getting previously it sounds like it's more on the services and products that can you just help us understand exactly what you're seeing in those areas and in one impacts are saying just submitted that.
Residential market.
Okay. Thanks.
Sure glad J D, but I can yeah, I can start on that one and in terms of the the guidance right first the subscription revenue estimates are unchanged that line remains healthy cause we've talked about.
On the prepared remarks.
We've tightened ranges as we normally do is we get towards the back half of the year and that's 16% 16% year over year increase at that Guy.
Oh, you're right good services and product revenue or where the changes besides that they're actually quite small very modest just 3% from the mid point of our previous guidance. So it is almost immaterial, but we did updated in light of some of the activity. We're seeing here now and in Q3 and that's.
Driven largely from two areas. One is of course as we've talked about there is some influence from your U S residential real estate market.
On those line items, but also we of course implemented a pretty significant restructuring that we had talked about.
And while this allows us to go faster and be more efficient.
It does reduce to some degree our capacity and so we reflected in our guidance those adjustments ultimately it drives faster faster path to profitability. It improves our bottom line, which we see here today in the queue to results and that's gonna keep going so we think it's the right change to have me.
<unk>.
In light of the macro as well as where the opportunities are ahead of us. So it's a slight change on the services and product line just 3%.
It really doesn't change the overall trajectory of his business, nor the fact that we can deliver another record year this year.
It makes complete sense to me congrats on the success.
My question.
Thanks Bye bye.
Thank you.
Your next question comes from young Kim from Luke capital market.
Please go ahead.
Thank you congrats on a solid color or J J D.
First RJ high level strategic question for you currently your business model.
By number of page basis for your subscription business.
But that doesn't necessarily account for the true value of your proprietary data so in a few days Jan.
What date are you feeling oil what are some other ways that you can't start.
The value of your data fee on the number of pay status I know you already have products that amount of time on the data.
Sierra insights and obviously the Genesis, but if it can you just explain what are some of the new wave that you were thinking about my fault the amount of fighting the data.
[noise]. Thank you I appreciate the question and you're right you know as we've said for many years now.
The long term strategy and vision for the company.
Is come for the digital twin and stay for the property insights and the more digital twins that we capture and bring onto our platform. The more data, we have from which to analyze and apply emerging AI technologies towards.
To create.
New insights for properties and for customers that were not previously even thought possible.
And yes, you've heard about some of the early opportunities with property intelligence.
And right off the bat, that's going to be you know a very powerful step in that direction per monetization.
Because some of the value will be inherent in the base platform, but many of these will manifest in the form of premium features.
And add ons add ons to your subscription revenue that allow you to take much more control of your digital twin.
First is being able to automatically understand much more about the digital twin then you get today for a matter of course, let our software do the analysis for Ya.
And you'll see more of this as as property intelligence comes out in beta later, this year and ultimately to full <unk>.
General relief.
And we're Genesis goes is a step further give us a base digital twin and then let software.
Artificial intelligence and automation.
Allow you to now do things that you would ordinarily hire professionals for interior design.
Based planning.
Ah virtually stage of property.
For marketing or re imagine the layout and even create an addition, or an extension to an existing property all in software and the way that that becomes possible is by training. Your software training your machine learning a deep learning technologies and engines.
A rich set of data.
And there are very few companies out there that have the kind of spatial data that matter courthouse in the library.
Talk about the 33 billion square feet of space, It's literally trillions of three D data points and it is an enormous amount of property data.
Of property types of spaces of all kinds and sizes from factories the commercial spaces.
And of course every type of residential property on the planet.
Now covering nearly 180 countries in the world that dataset represents a tremendous proving ground for us that is going to be lasting because the technology curve that we are on today with data science and AI is still in its infancy.
And so this is gonna provide a very robust longterm roadmap a value added features to come.
And Ah property intelligence is right on the doorstep slated for 2023 and Genesis.
Fueled by generative AI and some of the most emerging cutting edge capabilities for 2024.
That's gonna create a compounding effect of software only additions to the digital twin you already have so you're gonna property that you might've scanned and Digitised for about five years ago is in line could benefit from all of these technologies that we're gonna build in the coming years.
So we're really excited about this it creates a very high margin expansion story and growth story for the company.
Okay <unk>. Thanks for the very thorough answer R. J. So another question for you with the recent Rip has there been any material change to you'll go to market, especially around your enterprise that says for instance are you focusing on any printing.
Taking a vertical more given the current environment or let's let's.
Okay. So certain political if given the current environment and also like to comment on the overall attractions are you happy with the technology partners like Autodesk and.
So W. At.
Sure first and foremost Dakota market we.
We have done you know much more than just a restructuring we are rewiring. The go to market rewiring Ah execution at matter court for focus and speed and.
In one of those areas is how we attack the enterprise opportunity in the global theater in a more consistent way.
Sweet combined efforts, we've put together our enterprise teams in our go to market teams under a consolidated roof.
So that we're gonna be running a largely a unified playbook and we're going to be using best practices, where our techniques for going to market and getting the fastest most efficient market share has work best for us and we're gonna use that playbook as we've done in the past, but now we're going to do it universally we're gonna do.
Globally.
With a team that has come together to work on this.
As one unit is one global group there will be teams can of course, continuing with boots on the ground.
Supporting our customers, where they are and our three regions of Europe Asia and the Americas.
But we're gonna do it now with tremendous efficiency and also again with a singular playbook that's been proven to work we've been holding it here in the U S. Over the last couple of years, and we're really ready to take it to market in this new fashion. So that's number one.
To related to the partnerships that we are building. These are critical for us because companies like Autodesk and Amazon and pro core P. T C and many others.
We we built over the years have been a key source of generating our enterprise and mid market customer pipeline as you've heard us talk about before we've got now more than 25 per cent of the fortune 1000, but many many more enterprises and midmarket customers than that and that's been the result.
At a building these partnerships over many years that is in <unk> in these industries like H E C. The retail industry, the insurance category and the like that takes definitely a number of.
Challenges off the table of marketing and selling directly to those customers.
And rather capitalizing on the channels that have been established by these much larger companies ahead of US we've been seeing great pipeline growth missed you know a challenging.
Market environment, and I've been absolutely due to the strength of obnoxious the partnerships, but the kind of innovation that we're bringing to both of them, enabling platforms like auto task and Amazon to go further and offer value proposition to their customers that were just never possible before with a very.
Easy very quick to integrate solution.
Okay, great. Thank you so much R J.
Thank you.
Once again, if you would like to ask a question. Please first than one.
Is there are no further questions. This concludes our question and answer session at this time.
Now like to turn the conference back to Mister Macaroni closing remarks.
Great. Thanks, everyone for joining us today, it's always we appreciate your interest in matter Port and we look forward to speaking with you on our next door neighbors called.
And goodbye.
The conference has now concluded. Thank you for attending today's presentation. You may may have disconnect.
[noise].