Q4 2024 NICE Ltd Earnings Call
Speaker Change: Mind you. This conference is being recorded February the 20th 2025, I would now like to turn this call over to Mr. Marty Cohen, Vice President Investor Relations at Nice. Please go ahead.
Speaker Change: Thank you operator with me on the call today are Scott Russell, Chief Executive Officer, and Beth sketch that best Gaspar <unk>, Chief Financial Officer before we start I would like to point out that some of the statements made on this call will constitute forward looking statements.
Speaker Change: In accordance with the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995, please be advised that the company's actual results could differ materially from these forward looking statements.
Speaker Change: Regarding the factors that could cause actual results or performance of the company to differ materially is contained in the section entitled risk factors in item three of the company's 2023 annual report on form 20-F as filed with the Securities and Exchange Commission on March 27 2024.
Speaker Change: During today's call, we will present, a more detailed discussion of fourth quarter and full year 2024 results and the company's guidance for the first quarter and full year 2025.
Speaker Change: You can find our press release as well as Pdfs other financial results on <unk> Investor Relations website.
Speaker Change: Following our comments there will be an opportunity for questions.
Let me remind you that unless otherwise noted on this call we will be commenting on our adjusted results of operations, which differ in certain respects from generally accounted generally accepted accounting principles as reflected mainly in accounting for share based compensation amortization of acquired intangible assets acquisition related and other expenses amortization of <unk>.
Speaker Change: Discount on debt and loss from extinguishment extinguishment of debt and the tax effect of the non-GAAP adjustments.
Speaker Change: The differences between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release <unk>.
Speaker Change: The information in some of our comments discussed on this call may contain forward looking statements that are subject to risks uncertainties and assumptions.
Scott: I'll now turn the call over to Scott.
Scott: Thank you Marty and welcome everyone I'm excited to be talking to you today for the first time.
Scott: Oh of NAS before we dive into good ice cold I want to take a moment to acknowledge Barack strong leadership brought not to where it is today.
Scott: It is an honor to lead a company where now for its relentless innovation customer Centricity and operational excellence.
Scott: Nice for its undisputed leadership.
Scott: And for it to meet the potential for growth.
Scott: With a strong financial foundation industry, leading solutions and 9000, plus dedicated losses all around the world. We are poised to drive <unk> into the next era of growth.
Scott: On today's call I want to focus on two key themes.
Scott: First <unk> is the undisputed leader in customer service, we continue to redefine what's possible with the most advanced and comprehensive AI platform in the industry purpose built for speed agility and Skype.
Scott: Welcome to a number of customers and partners already and the feedback is unanimous enterprises turned into us because they trust that our AI platform <unk> won empower delivers real measurable outcomes, we're improving customer experiences for hundreds of millions of people worldwide.
Scott: Managing over $3 5 billion II interactions annually, while driving tangible value for our clients simply put we are leading this market and we are doing so decisively.
Scott: Second the opportunity ahead is extraordinary.
Scott: <unk> is reshaping industry at an unprecedented pace and we see it as one empower we are already ahead of this tectonic shift.
Scott: Our AI powered at GMT automation is setting the new standard combining cutting edge technology with that deep CX domain expertise, especially in the large enterprise market.
Scott: Our financial strength.
Scott: Innovation and international expansion uniquely positions us to capitalize on the opportunity ahead and accelerate into the future.
Scott: Let me build upon my first point is undisputed leadership, which is exemplified by our outstanding fourth quarter and finish to the.
Scott: For the full year 2024, we exceeded the high end of our revenue guidance and came in at the high end of the range for EPS.
Scott: Q4 cloud revenue grew 24% to $534 million, which is the highest cloud growth on the largest cloud revenue bikes in our industry.
Scott: Moreover, that quarter to quarter cloud growth from Q3 to Q4 accelerated to six 8%.
Scott: This excellent cloud revenue growth drove a healthy year over year increase in total revenue and reflects as strength at the high end of the market as we reached a milestone of over 400 enterprise class customers with over $1 million in IRR.
Scott: Our leadership also flows to the bottom line.
Scott: Our exceptional profitability continues to set us apart from the rest of the industry.
Scott: Not just the outstanding profitability metrics speak for themselves operating income increased by 22% to $227 million driving further expansion in our operating margin by 150 basis points to 31, 5%.
Scott: This in turn fueled an impressive 28% surge in EPS compared to the same quarter last year, reaching $3 <unk> for Q4.
Scott: We delivered stellar cash flow generating $250 million in operating cash flow in Q4, bringing our total to $833 million for 2020 for a remarkable nearly 50% over the prior year.
Scott: Further extending our strong track record of accelerating cash flow year after year.
Scott: These exceptional results reinforce our position as the industry leader.
Scott: I'd like to elaborate further on our AI leadership.
Scott: <unk> won empower ease revolutionizing the why AI powered customer service. It is the only platform in the market that delights, the consumer experience with speed and accuracy from maintained to fulfillment.
Scott: It does this through seamless orchestration of old voice digital and AI interactions.
Scott: <unk> won empower boost productivity of both human and AI agent with a smart workforce augmentation.
Scott: At the heart of CX, one empower is a <unk> II acting with autonomy, but continually learning and making intelligent decisions to enhance customer interactions in real time.
Scott: CH one empower is a game changer in meeting customer needs at scale.
<unk> the largest repository of CF label data knowledge and thousands of AI models in one platform.
Scott: <unk> won empower is setting a new industry standard.
Scott: We are undeniably winning in the era of Egencia.
Scott: We go beyond the slide way.
Scott: Delivering real results in 2020 for our advanced AI solutions were included in 97% about large enterprise CX, one empower deals over $1 million.
Scott: In one such seven digit ICB deal one of the largest retailers in the world who are already relying on north to handle 75 million interactions annually.
Scott: They chose CX, one empowered to differentiate so advanced AI capabilities supporting their immediate and growing consumer needs.
Scott: Im very large university and a seven digit <unk> deal is going all in on AI with not after a diligent competitive process.
Scott: <unk> won empower, including what I pilot and copilot to significantly improve the student experience and expecting 30% ROI.
Scott: In another seven digit ICB deal a large managed care organization decided to modernize and simplify their multi Linda text deck and Ed at advance CX AI capabilities to enhance the customer service.
Scott: After being presented with generic IRI from the CRM incumbents I quickly realized that the only path forward with CX one impact.
Scott: We signed a seven digit ICD deal with one of the nation's leading university medical centers.
Scott: Driven by our strong commitment to maximize ROI from the CX operations and elevate the patient experience. They chose <unk> empower to consolidate onto a single platform.
Scott: These are just a few examples of enterprises repeatedly choosing us because of <unk> ability to scale and unmatched levels deliver proven innovation.
Scott: Women I complexity, a fragmented multi vendor solutions and provide seamless consumer experience across all channels.
Scott: Other examples including include seven digit ICB deals with a large furniture retailer a well known U S Regional bank and a leading healthcare outsourcing.
Scott: I open today's call discussing our proven leadership in AI and the immense growth opportunity in front of us.
Scott: As I look to the future the opportunity is clear and let me explain why.
Scott: Firstly, our market is growing.
Scott: According to Gartner by 28 2020, 33% of enterprise software applications will include a <unk> up from less than 1% in 2020 for.
Scott: This bodes very well for not since one of the most impactful used cases for Egencia KR is in customer service, where it's revolutionizing interactions and efficiency.
Scott: We are at the forefront of this industry wide transformation uniquely positioned to drive and benefit from this shift with.
Scott: With that cutting edge platform seamless integration about human and collaboration we are setting the standard for the future of customer experience.
Scott: Secondly, alongside the tremendous market opportunity.
Scott: <unk> unique strengths position us for unparalleled success.
Scott: Without CX specialized II, our industry, leading platforms and unwavering financial strength, we have all the assets needed to drive both organic and inorganic growth.
Scott: Proven profitability and rock solid balance sheet gives us the confidence to be bold move fast disrupt the status quo and think bigger than ever before.
Scott: Now is the time to seize the moment and lead the future of CX with innovation and ambition.
Scott: To capitalize on this market opportunity and Liberty gas strengths, we will unleash our market leadership by putting CH one empower in front of every organization possible to expand down markedly and set the benchmark for excellence.
Scott: We will lead the CX AI Revolution.
Scott: <unk> is out to Paypal and we are embedding it in everything that we do maximizing our innovation age and reinforcing our position as the undisputed leader in AI driven solutions.
Scott: We will scale, we have powerful ecosystem by aggressively expanding strategic partnerships from technology partners to global systems integrators, turning collaboration into a force multiplier that accelerates growth and amplifies our impact worldwide.
Scott: Finally.
Scott: <unk> and precision matters as you can see we have the industry leadership.
Scott: <unk> assets and amazing market opportunity to capitalize on and we will move even faster with laser focus to win and invest for growth in 2025.
Scott: The energy across northeast Deniable, then we are all dedicated to driving our vision forward.
Scott: We are finalizing our updated growth plan and I'm looking forward to sharing more details with you in the near future.
Scott: After 50 days as CEO I'm, even more excited about our potential and the journey ahead.
Beth: I'll now turn the call over to Beth.
Beth: Thank you Scott I'm proud to report a strong finish to the year with full year 2024 revenue exceeding the high end of our guidance range and EPS coming in at the high end, our industry, leading cloud AI platforms and exceptional financial strength set us apart in the market, we delivered and the ultimate try.
Beth: Sector profitable growth at scale and ironclad balance sheet and best in class free cash flow generation, Let me now share the details of our results that demonstrated this impressive performance.
Beth: In Q4, our total revenue accelerated sequentially to 16% growth year over year on the largest revenue base in our market and we generated a record $733 million in free cash flow for 2024 easily exceeding our $700 million target that we shared in June of <unk>.
Beth: Last year.
Beth: Hurdle revenue in Q4 was a record $722 million, increasing 16% year over year, primarily driven by the strength of our cloud revenue and from strong product revenue performance and the financial crimes segment.
Beth: Our CX one empower platform is being rapidly adopted by our customers and this success is reflected in our strong cloud revenue performance in the fourth quarter, we achieved a record $534 million in cloud revenue delivering outstanding 24% year over year growth. Additionally.
Beth: Cloud revenue represented a record 74% of our total revenue. This milestone combined with strong product revenue growth showcases the exceptional fourth quarter performance of our business across all areas.
Beth: Our cloud revenue mix is increasingly shifting towards large enterprise customers, who show a strong preference for our comprehensive suite of AI solutions on our platform.
Beth: We continue to see an increase in average deal size, reflecting the breadth of our portfolio along with our strength and domain expertise in the large enterprise market as we highlighted last quarter. It's important to note that large enterprise cloud deals typically take longer to fully ramp up and be recognized in revenue we may.
Beth: <unk> some short term delays in revenue recognition, but this sets us up for stronger long term growth and profitability from our loyal and sticky customer base.
Beth: Our services revenue continued to fuel our cloud revenue as our customers increasingly migrate to our cloud AI platforms.
Beth: We anticipated our services revenue, which is comprised primarily of maintenance decreased year over year to $150 million with this ongoing transition of our large enterprise on premise customers to the cloud.
Beth: Across all our business segments, our customers overwhelmingly prefer our cloud platform as demonstrated by our strong cloud revenue mix and robust pipelines in the fourth quarter. In addition to our outstanding cloud growth. We also achieved excellent products revenue growth driven by the success of our on premise.
Beth: <unk> in our financial crime and compliance segment product revenue, which represented 5% of total revenue in the quarter grew 19% year over year as a result of several large FCC term deals.
Beth: From a geographic breakdown, the Americas region, which represented 85% of total revenue in Q4 grew 17% year over year. The Americas region has continued to excel in both of our business segments, and we are seeing great wins with new enterprise customers as well as expansion from within our large customer base.
The EMEA region, which represented 10% of our total revenue increased 11% year over year, driven by strong cloud revenue growth.
Beth: APAC region, which represented 5% of our total revenue delivered robust cloud revenue growth, which was partially offset by a decrease in the on premise business, resulting in an increase of 4% year over year.
Beth: We are extremely pleased with the outstanding performance of our CX International business in 2020 for achieving a record year and CX, one empower new bookings and corresponding growth are exceptional.
Beth: Performance is driving strong growth in our international cloud revenue with increasingly higher recurring revenue.
Beth: Our international cloud revenue from the combined EMEA and APAC regions now exceeds $230 million and are in these two regions continued to represent excellent growth opportunities with impressive pipelines.
Beth: Turning to our business segments, we delivered strong results in both customer engagement and financial crime and compliance in the fourth quarter customer engagement revenues, which represented 83% of our total revenue in Q4 were a record $596 million, increasing 14% year over year as a result of a blend.
Beth: Of much higher cloud revenue growth combined with the expected decline in our on premise business the growth in customer engagement was driven by the growth in our CX one empower platform.
Beth: Revenues from financial crime, and compliance, which represented 17% of our total revenue in Q4 and totaled a record $125 million.
Beth: <unk> increased 24% year over year, driven primarily by strong in quarter premise based sales. Additionally, we continue to see strong cloud revenue growth and increasing demand for and adoption of our <unk> cloud platforms.
Beth: Moving to profitability, our cloud gross margin totaled an expected 76% in Q4 as we continue to strategically invest in international expansion and the scaling of our cloud business and the financial crime and compliance segments. These markets are still in the very early stages of cloud adoption.
Beth: And while they present significant growth opportunities. The <unk> initial investments have led to a short term impact on our margins are.
Beth: Our top line outperformance carried through to our bottom line as evidenced by the strength of our operating income our operating income in Q4 increased 22% year over year to a record $227 million and our healthy operating margin expanded 150 basis points year over year.
Beth: <unk> to 31, 5% the sixth consecutive quarter over 30% I.
Beth: I am excited to share that we achieved both our annual operating income target of $850 million for the full year 2024, and our operating margin target of over 31%.
Beth: Given our strong profitability performance in the quarter combined with the smart management of our investment portfolio earnings per share for the fourth quarter were $3 and <unk>, an impressive 28% increase compared to Q4 last year cash.
Beth: Cash flow from operations in Q4 with $250 million, an increase of 38% year over year for the full year 2024, we have generated free cash flow of $733 million, surpassing our free cash flow target of $700 million set out in Q2, yielding an exceptional.
Beth: Free cash flow margin of 27% a level unrivaled in our industry.
Beth: Our financial strength provides us with a powerful tailwind to see the opportunity in front of US further our positive and growing free cash flow enables us to reinvest in our future growth acquire strategic assets rapidly and reward our shareholders with our expanded buyback program, all while maintaining a rock solid.
Beth: <unk> Financial Foundation.
Beth: In Q4, we repurchased shares totaling $95 million and $369 million for the full year 2024, an increase of 28% year over year, we will continue executing our current $500 million share repurchase program throughout this year.
Beth: Total cash and investments at the end of December totaled $1 billion and $622 million, our debt stands at $450 million, resulting in net cash and investments of $1 2 billion our debt matures in mid September of this year at this time, our expectation is to repay the debt on maturity.
Beth: Therefore, we expect less investment income to be generated in the second half of 2025.
Beth: Before I turn to guidance I'd like to connect our plans to invest for growth translate into financial expectations for this year as Scott shared we have a tremendous growth opportunity ahead of us in 2025, we will continue to invest in expanding our AI innovation and cloud platform capabilities.
Beth: While further broadening our ecosystem as a result, we expect our strong cloud gross margin to remain flattish in the near term and we expect a modest 50 basis point expansion in our operating margin in 2025 the.
Beth: The underlying financial strength of our business provides us with great flexibility and the shift to advanced investment into our business are expected to be achieved while delivering leverage in our model, resulting in a double digit growth expectation in EPS.
Beth: Now I'll close with our total revenue and non-GAAP EPS guidance for the first quarter and full year 2025 for the first quarter of 2025, we expect total revenue to be in the range of $693 million to $703 million, representing 6% year over year growth at the midpoint we.
Beth: The first quarter 2025 fully diluted earnings per share to be in a range of $2 78 to $2 88, representing 10% year over year growth at the midpoint.
Beth: Full year 2025 total revenue is expected to be in a range of $2 billion and $918 million to $2 billion and $938 million, which represents an increase of 7% at the midpoint. Our full year 2025 cloud revenue is expected to increase 12% year over year.
Beth: We expect our effective tax rate throughout 2025 to be in the range of 19% to 20%.
Beth: Full year 2025 fully diluted earnings per share is expected to be in a range of $12 13 to $12 33.
Beth: Which represents an increase of 10% at the midpoint.
Beth: I'll now turn the call over to the operator for questions operator.
Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad will pause for a moment to compile the Q&A roster.
Speaker Change: Your first question comes from the line of meta Marshall with Morgan Stanley.
Meta Marshall: Great. Thanks.
Meta Marshall: Can you just maybe give a little bit of background and just kind of what went into the consideration of kind of the cloud growth rate and just if there's any way to kind of differentiate either kind of what lifelock has become in organic is as a headwind would just be helpful. Thanks.
Meta Marshall: Joe.
Meta Marshall: So first of all.
Speaker Change: Thank you for the question I do want to reiterate as I spoke to earlier and as bespoke.
Meta Marshall: We are very positive about the market.
Meta Marshall: And in northeast uniquely positioned to seize on that opportunity with.
Meta Marshall: We're providing a prudent guidance at this time of year.
Meta Marshall: And we will continue to monitor as the year progresses.
Speaker Change: As I stepped into the leadership of notch. It is also my desire to increase the transparency for our investors.
Speaker Change: A bit and I was looking at the best way to enhance our financial disclosures and I look forward to sharing more details as I mentioned earlier, but maybe if you can share more detail on those expectations of course, yes. Thank you Scott and thanks for the question meta. So let me address your question a bit more and try to also help bridge from where our performance.
Speaker Change: <unk> been in the last quarter as well as full year 2020 forward to what we're guiding for the current year.
Speaker Change: First I would start off by saying, we're very pleased we had a tremendous fourth quarter and full year in the cloud last year. So we're quite proud of the accomplishment. We just stepped away from as we step into 2025, Scott highlighted first of all that it is still early in the year and so of course, we are considering a prudent at this.
Speaker Change: This point in the year.
Speaker Change: There are there are several factors that we have taken into consideration as we set this guidance I think first of all even going into last quarter. We had highlighted that we expected and we're seeing some positive seasonality in the fourth quarter, which played out but certainly seasonality is not something that you can always be.
Speaker Change: Confident around and so we have taken that into consideration and have not assumed that we will have the same level of.
Speaker Change: Seasonality in the back half of this year given that it's still early in the year.
Speaker Change: The second thing that I would call out in that Scott also highlighted in his remarks earlier today is that we do know that we are seeing more and more large enterprise deals and these deals are taking us longer to deploy.
In the fourth quarter, we actually saw an improvement in the deployment time, but of course, it's something that we're continuing to be focused on and need to be confident that that will be a recurring event.
Speaker Change: And then you mentioned <unk> as well so I think if we look back to last year, we had given some indication of what our expectations were for live ops, which they match and actually outperformed slightly as we looked in the end of the year, but to your point, we've known that.
Speaker Change: The live ops.
Speaker Change: Growth rate does come with a bit of headwinds and <unk>.
Speaker Change: Of course, we are have that factored into the guidance as well. So I would say all of those are a combination of things that were considered as we thought about the guidance of the 12% on cloud for this year.
Speaker Change: Great I'll pass it on thanks.
Speaker Change: Your next question comes from the line of.
Savannah: So mad Savannah with Jefferies.
Somad Savannah: Hi, Good morning, Thanks for taking my questions and Scott welcome.
Savannah: Congrats on your new role, maybe we'll start with.
Savannah: A big picture question I understand more large enterprises adopting <unk> widen more full platform deals I will say you guys have made a pretty strong pipeline for most of 2024 is that we can understand when that phenomenon thats starting to delaying the Rev. Rec started.
Savannah: Could that trend reverse.
Savannah: That is the baseline going forward.
Savannah: What I'm trying to understand is there risk to that 12% and enterprises further delay go lives.
Savannah: The size and scope of deals it's helpful to understand how much conservatism baked into that.
Savannah: So first of all thank you for the welcome and thank you for the question. Let me, let me start by saying I've got.
Savannah: I've got a lot of experience in large enterprise.
Savannah: Large transformation large scale deals.
In my past experience and the one thing I know is that as you increase the capability. The solutions all saw that often results in.
Savannah: In the short term longer lead times, and being able to deploy to be able to take advantage to be able to use the adoption and ultimately for our customers to benefit.
Savannah: We all know the benefits of DIY capability of <unk> won empower and as you rightly point out.
Savannah: The majority of our large deals are all with the embedded AI capability did see X one impala brands, but what it also means is that our customers are.
Savannah: Figuring out how to best exploit that capability expanded deploy and use it in the most effective ways with us. So I see a short term opportunity to be able to accelerate that theres no doubt that in 2020 for the team here have already worked on ways to accelerate the ability to time to revenue.
Savannah: When we sign these deals when they are able to utilize the value that will continue we will look at further ways to be able to accelerate it but we also recognize the potential of an AI platform is.
Speaker Change: Is exciting and it means that you need to be constantly focused on the customers outcome delivering the excellence that die needs delivering the customer service sufficiency are expecting but also delighting the consumer experience and I think sometimes that's.
Speaker Change: Underappreciated, because ultimately <unk> together with our human agents will make the consumer experience, even more effective and businesses of shop about this I want to make sure that when they are deploying this that it's going to work, it's going to scale its going to work in real time and so they are considered in that with partnership with it.
Speaker Change: I.
Speaker Change: I see a short term effect on on the concern around the deployment, we will get better we will get faster we will get more.
Speaker Change: <unk> as we do that as we scale this business and the good news easier customers will then get the benefit from that and I'm not sure. If this is there anything to add yeah, no I wouldn't add much I think you've described it quite well Scott the only other thing, bringing it back more to where we've been with it I think this module hurt us.
Speaker Change: Announce each and every quarter, probably more and more large seven digit ACB deals.
Speaker Change: So it's kind of been a.
Speaker Change: We're succeeding in that part of the market and therefore, we're having more of those deals that need to be deployed at the same time, so as Scott said.
Speaker Change: I understand the challenges, we're certainly focused on broadening our capacity in terms of our deployment partners in our ecosystem.
Speaker Change: So we will tackle that but it is something that we're not yet over and so of course again, we have taken that into consideration as we look to the full year and of course, we will continue to provide updates as we show improvement throughout the year.
Speaker Change: Understood and maybe just a follow up on the <unk> guide if I think about kind of the midpoint it implies a modest decline quarter over quarter.
Speaker Change: <unk> side, you guys had a quarter over quarter to pilot in margins.
Speaker Change: If I, if I'm looking correctly, but just what what's changing there I know you mentioned some of the.
Speaker Change: The seasonality in the prior question as well.
Speaker Change: Can you just help us think about maybe within the different line items is there something in particular, that's driving that quarter over quarter decline.
Speaker Change: That's been atypical in recent years.
Speaker Change: Contextualize that first quarter guidance, 6%.
Speaker Change: Sure and it's exactly what you highlighted which is its predominantly seasonality we had some very healthy seasonality that we just came off of in the fourth quarter.
Speaker Change: When we looked across our verticals, we know our retail customers had strong usage that we saw uptick.
Speaker Change: In the fourth quarter.
Speaker Change: And some of that is is quite seasonal lessons retail sector. Its in some of the health care sector, especially with benefits renewals and things like that.
Speaker Change: We are again, taking that into consideration, we don't want to be overly.
Speaker Change: Overly assertive with an expectation around seasonality.
Speaker Change: So that is baked into the expectation in the first quarter.
Speaker Change: Your next question comes from the line of Cte <unk> with Mizuho Securities.
Cte <unk>: Thank you and Scott Congratulations on your role as CEO and look forward to working with you.
Speaker Change: I have a big Big Big picture question, I would certainly agree that AI.
Cte <unk>: He is a massive opportunity.
Speaker Change: How do you see you.
Speaker Change: In this changing environment right now about investing more to capture this market at this point versus driving profitability.
Sidney: Thank you Sidney and look forward to working with you also.
Speaker Change: So I think there's a few variables to consider.
Speaker Change: One is we are we in the industry.
Speaker Change: We are leaving we are leaving with II has always been for decades and generations, whereas the realities.
Speaker Change: <unk> II and the capabilities and what is the potential it brings its still very much an exploration mode and takes voice remote from customers, but also from the providers in the market and so that gives me a.
Speaker Change: Confidence that when you think about customer service.
Speaker Change: And you think about the needs of customer service. These two critical things that we're trying to provide for one is delight the consumer they want to interact with our single platform no matter what channel. They use no matter, how that indirect loan and they want it real time I really want to highlight this real time.
Speaker Change: And that is some of the <unk> and the Iot applications out there in the enterprise place are very much on our systems of record basis, we don't leave in that World. We live in the real time world when a consumer interacts with our platform.
Speaker Change: Got to work and so our focus is making sure that that seamless.
Speaker Change: Responsive with speed, they're able to get fulfillment with speed and we see the AI capability combined with our existing strengths of voice.
And workforce management as well as our digital and analytical stack are being the prerequisite to be able to take advantage of the <unk> possibility. Because you then can have a real time experience to filling the customer's need in a seamless and as synchronous asynchronous wide.
Speaker Change: So the first is we're looking at it very much from investment of how we can make that consumer experience. The most positive the most benefit and they fulfilled at speed.
Speaker Change: The second piece is.
Speaker Change: When you look at then the orchestration and the fulfillment of it Theres a lot of different data points and so we want to be the centerpiece of how we fulfill the consumers need and automate that drive efficiency. So you can rely more on II less on human agent, but it's not going to be a replacement completely it's the interaction between.
Speaker Change: And then a deeper fulfillment through the back office, and that's where partnerships and when I think about our ability to be able to deliver that we will deliver the front ourselves, but we will obviously work with the technology partners, which I highlighted earlier to be able to ensure that the customer gets the aimed to outcome, which gets Aaron.
Speaker Change: Innovation together with our partners to fulfill the best response, the last but not least.
Speaker Change: I'm sorry, if I just finished up the last thing that I would say is this a.
Speaker Change: <unk> II platform is not new for Noche, I actually joined and I spent a lot of time researching the capability that we have we've got a proven platform already and we've been investing in it for many years credit to Barack can the team. So we're not starting from zero, we're starting from a mature platform already now.
Speaker Change: There is more to do when we want to invest further, but we can invest in profitable growth.
Scott: That's super helpful. Scott.
Speaker Change: Bring lot of experience enterprise go to market how are you thinking about that.
Speaker Change: Youre going to bring to you in the go to market side and specifically on the partnership side or changes. So you can see and especially if you can talk about some of the partners Malcolm and not cutting into concrete data or how are you going to address those.
Speaker Change: Sure.
Speaker Change: For the question and look I do have a lot of experience.
Speaker Change: I've got a lot of experience in my background of being able to take a strong asset being able to leverage partnerships together with a really really strong go to market capability and being able to turn that into value for customers and growth for the company and we will do that to answer your question explicitly Theres no doubt.
Speaker Change: The systems integrators technology partners and I would also highlight strategic advisors.
Speaker Change: They are a force multiplier when you're part of well.
Speaker Change: Strategic partnerships used the word that I would like to highlight is not partnerships with everyone. Because we already partner really well to date, it's really zeroing in on the strategic partnerships that will be able to expand the aim to win value proposition for our customer.
Speaker Change: To be able to give them the best outcome and that means the reach of global systems integrators is important because they have the expertise the industry domain around the world. It means technology partnerships, because we know what were really strong that but we also know who we need to work with to be able to give you an duane solution for our customers and the advil.
Speaker Change: <unk> is more about what are the trends what is coming and how do we then take advantage of that to give more value to our customers. So you can expect a lot of emphasis around strategic partnerships in the in the in the short term because I do see it as a real opportunity for us to expand our reach and deliver to a wider customer base.
Speaker Change: When we do today.
Richie Deloria: Your next question comes from the line of Richie Deloria with RBC capital markets.
Richie Deloria: Alright wonderful. Thanks, so much for taking my questions out looking forward to working with you in the new role.
Speaker Change: Maybe two for me first.
Richie Deloria: Wanted to start by thinking about.
Richie Deloria: Just kind of VX, one bookings what are they seeing I know theres been a little bit of discussion about kind of ramped Rev rec, but in prior quarters you've talked about.
Richie Deloria: Record <unk> bookings to my <unk>.
Richie Deloria: College I didn't hear that comment again on the prepared remarks, maybe you can just give us some color in terms of what youre seeing in terms of overall <unk> bookings and then I've got a follow up.
Richie Deloria: So first of all Rajeev, great to connect and thank you for the question.
Richie Deloria: As you rightly point out <unk> mentioned, even today's call a number of seven digit <unk> empower deals.
Richie Deloria: The majority of our large deals as I talked about the 1 million IRR plus are embedded with CX one empower so the.
Richie Deloria: The growth and the expansion of the platform that not only includes <unk> by the way. It includes your KOL capabilities to be able to provide the contact center the customer service at scale for our customers and that is growing and that was reflected I believe in 2024, where we'd mentioned several.
Richie Deloria: Times about strong bookings performance and growth.
Richie Deloria: In that area my expectation as we continue on that trained and I see obviously a potential for even further expansion.
Speaker Change: And look forward to sharing those details as the progressive how we exploit the opportunity and drive that into not only bookings growth, but ultimately turn into revenue growth as we look to the future. Beth is there anything to add on the guidance I think that you've highlighted you know the strength, we saw in and we've talked as I highlighted earlier.
Speaker Change: Many quarters about the number of large enterprise deals, we're winning as well as tremendous day year in international with with record growth there and you know the the record largest international deal that we announced in the second quarter of last year.
Speaker Change: Alright wonderful and then Pat on your prepared remarks, you talked about cloud gross margins being relatively flat in 2025. It is maybe what are you contemplating in terms of the impact of Gen. AI because we all know these gen AI workloads can be really compute and resource intensive and so if you are.
Speaker Change: Landing all these large deals with AI, what sort of impact is that having on your overall growth cloud gross margins this year and maybe even in the medium term as we think about uptake of AI, what what should we be thinking about that impacted their gross margins. Thanks.
Yeah sure. So let me first explain a bit more about you know my comment around flattish gross margins. This year and I would say you've seen a little bit of that playing out in 2024 as well.
Speaker Change: This was less related to AI and more about our investments that we've talked about both internationally on the CX empower platforms as well as in the FCC business, where they're still less mature we have some fixed costs and we're still scaling and ramping up the customers and the revenue on the other side of that so that's really the nature of.
Speaker Change: My remarks, as it pertains to really the more current in a year as we look forward. However, we know we all are seeing that you know that AI is becoming more cost effective as well as compute specifically.
Speaker Change: So we expect that to play out in our margins regardless of the flattish tone for the current year that is due to investment and we certainly remain highly confident in our ability to gain scale to continually to expand our cloud gross margin and of course, the cost of compute and AI, specifically will help us.
Speaker Change: Drive that even at a greater clip.
Speaker Change: Yes.
Speaker Change: Your next question comes from the line of Tyler Radke with Citi.
Speaker Change: Hi, This is Kelly on for Tyler.
Speaker Change: Thanks for taking the question.
Speaker Change: All saw good product beat this quarter can you talk about why customers may be choosing to stay on premise for a longer and what are your embedded assumptions around conversions and migrations for 2025, and how does that compare with 24.
Speaker Change: And I have one follow up.
Speaker Change: Yeah. Thanks currently I'll I'll start with that I think with respect to product if.
Speaker Change: If you looked on our performance in 2024, and notably in the fourth quarter as well and what we're seeing is that there are certain segments in our business, which tend to be financial crime and compliance and sometimes our international regions, where cloud is in more early stages of adoption.
Speaker Change: By customers.
Speaker Change: And either as a result of the newness of the cloud into those segments as well as some times customers simply prefer to deploy our premise software in their own environment, sometimes it's a cultural thing I think with FCC and particularly we see that more so certainly than the <unk>.
Speaker Change: Power business, where we have very few premise deployments. This at this stage again occasionally internationally, but we see that more so than the FCC business and again it tends to be a cultural.
Speaker Change: Our approach to financial institutions, where they have a history of managing the software within their own data centers in their own environment in general it still tends to be not the norm. If we look at the pipelines across all of our businesses, including our financial crime and compliance they.
Speaker Change: Still a cloud centric and that is still the way that we are predominantly going to market and incentive our sales and our customers, but we do see those from time to time and again that is what we experienced in the fourth quarter I will add that as it relates to guidance and our expectation around that and.
Speaker Change: In general we are a cloud first company and so as we have considered what that means into our guidance for next year. We have assumed that our business continues to increase on the cloud and that in relation to that the premise business continues to decline in terms of the pace of that transition as you've asked.
Speaker Change: We expect the pace in 2025 to be more or less the same and assumed in the guidance. However, we Scott and I, both see that as a wonderful opportunity for us to actually accelerate that and Scott I'll, let you talk about that more yeah. Thanks, Dan. So I think just to reiterate so our guidance has assumed a consistent.
Speaker Change: From what we've had in the past, but I do want to highlight and I guess again.
Speaker Change: <unk>.
Speaker Change: Our real experience would be set scale.
Speaker Change: Not only do we want to accelerate time to revenue from our point of view, but it is time to value for our customers and so there is going to be a great emphasis on that transition path. They are loyal long term existing customer of ours, whether it be the CX side or on the FCC side, but either way they do actually want to exploit the benefits.
Speaker Change: Of the cloud NII, it's more of a how to get there that is.
Speaker Change: Is the.
The critical point and so we're going to be putting more emphasis on the how to transition do so cost effectively in a risk managed way.
Speaker Change: Why did they can get the benefits, but not introduced concerns or risk and dash will then give us the potential upside that we all see and Beth and I are obviously very excited about.
Speaker Change: Thank you that was super clear and then if I could squeeze in one more on the on the 12% cloud growth Guide could you just talk about the macro assumptions that youre embedding.
Speaker Change: And maybe the customer ramps and that compares to 24. Thank you.
Speaker Change: So I'll, maybe I'll start and then I'll hand to you on the branch side, but on the macro assumptions look we're positive.
Speaker Change: And with positive because the buying sentiment in the market, particularly in SaaS you look at what's happened with the <unk> market a lot of it initially went to the yellow lands at the infrastructure layer at the compute layer.
Speaker Change: Very quickly moving to the SaaS layer.
Speaker Change: Companies are looking for exploiting the benefits in the way they run their processes. They workload they talk they customer service. So at a macro level, we are actually optimistic about the landscape about the potential for us I don't see any concerns from a headwind from that point of view.
Speaker Change: And the real opportunity for US is to initially put that into bookings and then ultimately that will then convert into revenue as time goes as we deliver the value for them and that's where our emphasis is fifth.
Speaker Change: Yeah, I don't know that there's much more to add I think you've explained the opportunity ahead of us and you know we've already said that essentially we expect this 12% growth is is that.
Speaker Change: Going to be equally distributed across each quarter in terms of that 12%. So we believe we have an opportunity to to revisit that and we'll obviously update through throughout the course of the year because there is a great opportunity and with those customers that are deploying what we see in practices that they do not turn everything on day one there is.
Speaker Change: A gradual ramp and then the consumption and usage benefits us. So again, we are we will continue to monitor all of those and that is what we've seen in practice from our customers as they drive ROI in their organization and it enhances and increases our <unk>.
Speaker Change: As a result.
Speaker Change: At this time I would like to ask everyone to limit your questions to one due to time restrained and your next question will come from the line of James Fish with Piper Sandler.
Speaker Change: Hey, guys. This is clinton on for Jim Thanks for taking our question.
Speaker Change: Beth maybe one for you.
Beth: On the analyst day early in the year I think we highlighted a 113% member retention rate for CX one customer.
Beth: Obviously, you talked about some slower revenue recognition that probably decline that a little bit but any color you can give as to where we're at exiting the year for net retention rate and how you think about expansion for customers and 25.
Beth: Yes.
Speaker Change: As we think about the forward guide or if you could kind of the balance of net new any color there would be helpful. Thank you.
Speaker Change: Yeah. Thank you for the question Clinton and as you highlighted you know <unk> is something that we shared at our Investor day. It continues to remain healthy and is not.
Speaker Change: Here that we've considered of any expectation that we'll have any deterioration in that in fact, as we talked about we see that more as an opportunity ahead of us as customers really fully ramp some of the portfolio on CX. One empower that we have been deploying and will continue to deploy so.
Speaker Change: Just highlight one of the other things that Scott and I have spent a lot of time talking about the.
Speaker Change: Opportunity for us to kind of provide some additional disclosures from time to time around some of these metrics. So while that hasn't been our practice in the past I think certainly some.
Scott: Thing that Scott I'll, let you speak to I know you desire and.
In short I do want to ensure that it's understood that.
Scott: See continue to see a healthy and are are and don't expect deterioration as being a part of the guide yes. So just on the <unk>. There is no doubt that we see upside on that and that would be our expectation going forward and I don't see any concern there but to this point.
Scott: There's no doubt that in.
Scott: Now business there are a lot of different factors that lead ultimately to the revenue growth retention of customers expansion of customers being able to improve reduce and compression and more importantly, expand the usage speed up deployments. There is a lot of different factors. So.
Scott: Definitely got the desire and the intent to increase the transparency for our investors. So as we move forward you are understanding and and.
Scott: The explanation of how we're driving the business, how we're driving the growth opportunity that we've talked about can be can be understood in maine and shaped to the investor base.
Speaker Change: Your next question comes from the line of Arjun <unk> with William Blair and company.
Scott: Okay.
Speaker Change: Thank you so much.
Scott: Scott maybe one for you.
Scott: Okay.
Scott: Okay.
Scott: I certainly see that.
Scott: An important trend going forward here, but when you think about apparel.
Speaker Change: <unk> reviewing a directed versus co pilots versus Q&A, Jim how do you see this kind of a balance on those three planning now.
Speaker Change: Gentex is really making it that much easier for you to maybe sell into the customer base is a.
Speaker Change: Much more evident just talk about a little bit about what youre seeing in.
Speaker Change: Sales cycles and demand on the agenda.
Speaker Change: Great question.
Speaker Change: And I need to be I need to highlight might be 50, diazine so be it.
Speaker Change: Aware, although I have obviously interact with a lot of customers and partners already so I feel like I've got a good understanding not only of the market, but also the needs.
Speaker Change: There's a few factors that we see the first these egencia chaos and the capability and the possibility, it's clear and I think all of our customers see that.
Speaker Change: See the potential of <unk>.
Speaker Change: By continuous learning platform being able to interact and being able to to drive productivity to drive efficiency.
Speaker Change: But in customer service there is a few variables there really loud and clear for our customers first when they interact it's got to work.
Human agents.
Speaker Change: Because the human agent can interact with complex or simple and they need to make sure that.
Speaker Change: That intent that consumer request gets fulfilled and so when they are deploying a <unk> in a consumer context I had the same expectation real time real time capability high quality response speed of resolution.
Speaker Change: Now, we see that as an advantage for us because we obviously understand without knowledge with our platform with their models already about how we use that to help the agents be able to serve those consumers and our self service platform. So for US. It's an extension on a single platform to be able to fulfill that and a lot of our customers are not looking for <unk>.
Speaker Change: Derek platforms when it comes to consumers experience. So I think what youll see as we look forward what is the context sensitivity that domain knowledge on the data and the interaction who the actual user eases at an employee of supplier in our case a consumer it does NASA.
Speaker Change: The second is I always intrigued when I spoke to a number of customers.
Speaker Change: They are trialing <unk> in the back but they are leveraging a single platform at the front.
Speaker Change: So they don't want to be able to trial in front of their customers, they're not going to take that risk. They are looking at a single platform. That's why for US the platform that unified platform of voice digital II becomes really important because they are not looking for bright points on the interaction that will deliver to poor customer service.
Speaker Change: Core efficiency, they don't want that Brexit.
Speaker Change: There's lots of bright points between take so.
It's interesting how it will play out I am very optimistic about customer service being a really.
Speaker Change: I think it's going to be one of the use cases that will be proven <unk> to be able to deliver on the ROI I do believe firmly that we will see over time a reduction in human agents, an increase of Io agents, but the combination and the interact ability is going to be the case rather than you go.
Speaker Change: To one channel or the other you need to have a unified platform to be able to fulfill a consumer who frankly doesn't really care about how who their interact they just want they service requests fulfilled and thats, what we zeroed in on.
Michael Funk: Your next question comes from the line of Michael Funk with Bank of America.
Speaker Change: Great. Thanks for the question this is Matt on for Mike.
Speaker Change: Maybe can you help us frame the expectations for contribution from the ring Central partnership to revenue heading into 2025 relative to the 2024 run rate is that a headwind we should be considering in the context of the 12% organic cloud revenue growth guidance.
Speaker Change: Yeah. Thank you for the.
Speaker Change: <unk> ring is one of many many partners that are that is part of our ecosystem. We have many different partners that are actually working with us are attending via the SMB and lower end of the market. So we don't expect to have any kind of negative impact to our revenue and that is not considered.
Speaker Change: Asian <unk>.
Scott: Scott maybe you can.
Speaker Change: We'll call out sized interacted.
Speaker Change: On pretty regular basis would lead in the team I mean, we see the potential of the partnership being able to drive value, particularly for SMB customers. It's one of our one of our many partners that are able to deliver named Duane proposition to say that customers. So certainly no negative impact when it comes to al.
Speaker Change: Our full year outlook at the end of the day, we still have the best in class CX won empower platform and that's what customers are looking to to get.
Speaker Change: Okay.
Speaker Change: Your next question comes the line of Patrick Wall Ravens with citizens J M P.
Speaker Change: Oh, great. Thank you.
Speaker Change: Scott Welcome it's great to have you here.
Speaker Change: I was wondering if you could share your thoughts.
In terms of.
Speaker Change:
Speaker Change: M&A for nice now that Youre here two sides to that question. The first site is.
Speaker Change: What you might consider.
Speaker Change: Acquiring and the other side is how you feel about.
Speaker Change: Like the financial crime, and compliance business and the public safety and justice business and whether it might make more sense to divest those over time and focus on the.
The core opportunity around.
Speaker Change: Customer experience and customer engagement.
Speaker Change: Thank you Pat for the question then.
Speaker Change: And thank you for the warm welcome.
There's no that I mentioned in the opening comments, though I provided.
Nice has.
Speaker Change: It's a remarkable financial position that we're in we've got obviously, a very strong balance sheet, we op, we generate cash and we're able to inform our operations exceptionally well.
Speaker Change: And that gives us optionality there is no doubt that when I look forward.
Speaker Change: And our ability to be able to fulfill what we believe our customers need.
Speaker Change: Not only on the IR side, but that platform to be able to deliver the outcome that they need we're looking at organic growth for sure because we've got a great platform already but it does give us optionality on on the inorganic side spot, it's got to be driving value that will deliver long term growth for our business and.
Speaker Change: For our customers and that.
Speaker Change: Is where are.
Speaker Change: My my head spices that but also what I think the needs of these businesses and that's true not only on the CX one side Thats all parts of the business as it relates to FCC. All I can say is it is a vital part of our business, it's a well performing business.
Speaker Change: And I think what I can say is when we get together as I shared earlier I'm looking forward to sharing more details about that strategy, how that we'll put into our growth plan and the details behind it.
Speaker Change: More than happy to share more on what those expectations are for both organic and inorganic moves.
Your next question comes from the line of Catherine Travnik with Rosin block.
Catherine Travnik: Oh, Thank you for taking my question and welcome Scott. So just you've talked a lot about youre going out market large deal bookings et cetera, what's the strategy for the mid market because it seems to me that the mid market customers that you deploy.
Speaker Change: <unk> returned to revenue so could you explain to us.
Catherine Travnik: Your thoughts on the mid market. Thank you.
Catherine Travnik: Yes, so first of all you're right we've talked a lot about the op arena and there's no doubt that we've got a platform that caters for the scale and the real time needs at the upper end, but that's also true for the mid market, but the market also need scale in real time, I firmly believe that our platform and our capability.
Catherine Travnik: Served the mid market really well I simpler deployment timeframe that comes back to partnerships by the way because our our our deployment partners to be able to in an agile shop, why you're being able to quick deployment being able to serve that for the mid market because they are looking to grow their business. They are looking for high NPS of big customers.
Catherine Travnik: They want us to fill it in a more efficient way.
Catherine Travnik: I do think that capability goes to the mid market and then clearly it's small and that's obviously through partnerships through distribution means to be able to bring out our platform now capability, which is the best in the market and then do that into the small end as well. So I know ive highlighted a lull on the enterprise side because <unk>.
Catherine Travnik: Nearly we know thats, a strength of ours, but I also see a tremendous growth opportunity to mid market I will highlight that I mentioned international expansion I've got a lot of experience in growing businesses and scaling them around the world quite often that starts in the mid market and goes up because the U S is clearly a large.
Catherine Travnik: Enterprise market, but around the world you've got a much bigger mid market space and I think we're well set up to be able to capitalize on that opportunity given that we've already got presence in most of those markets globally.
Thomas Blakely: Your next question comes from the line of Thomas Blakely with Cantor.
Thomas Blakely: Hi, Good morning, everyone. Good afternoon in Israel and thank you for squeezing me in here.
Thomas Blakely: I just wanted to double click on a gentex.
Thomas Blakely: And kind of understand or understand in terms of the 12% guide how much.
Thomas Blakely: How much uptake is kind of embedded in that guide.
Thomas Blakely: From our checks and you talked about increased complexity and elongated sales cycles. This is.
Thomas Blakely: Certainly a cutting edge technology and I just wanted to maybe to circle back there.
Thomas Blakely: For <unk> as it related to that question a longer one part question what kind of.
Pricing uplift could you assume from a subscription basis, even if it is consumption base overall.
Thomas Blakely: Pricing commentary is as.
Thomas Blakely: Jessica.
Speaker Change: Assume what that what that would manifest itself from a like for like customer that'd be helpful. Yeah, Great question, and I'll start and then base I'll hand over to you on the second part so I wanted to reiterate again and I know we've mentioned it a couple of times, we've taken a prudent guidance, we've taken a prudent guidance because whilst with Super optimist.
Speaker Change: It <unk> about the potential when you win these large all these enterprise deals and <unk> with its capabilities and also the deployment time frames, we want to be really clear that we're trying to accelerate it but also that takes time for that to ultimately convert into revenue. When you you understand the operating model that we run.
Speaker Change: So I believe Egencia II will be a cornerstone of our growth.
Speaker Change: As you look forward into the mid term the growth will come from our AI platform to be able to deliver that but it's the current run rate of that business. He is obviously factored into the 12% revenue and maybe if you can comment a little thing yeah sure in terms of the.
Speaker Change: The pricing uptick first I would highlight that AI is embedded across really everything that we do when you consider our platform. So our AI is advancing both agents as well as of course its agent list as well. So we are still continuing to have AI, there's embedded on the pricing side as part of the agent.
Speaker Change: Based pricing, but even we're turning more and more towards a consumption based model on the agent splits side because that is the way of the future. So when we look at that we have multiple examples where we see customers with.
Speaker Change: Receiving great ROI from the adoption theyre able to lower their labor costs. They are able to increase their spend in technology in our in our AI platform and on the other side of that for US again, the uptick that we received is a broad range depending on what level of.
Speaker Change: AI that the customer is adopting but as we've described 97% of our large enterprise deals last year included our AI offerings.
Speaker Change: So they are we're consistently seeing that that is driving in a nice average incur.
Speaker Change: Increase in our ideal size and so as I said, it's a broad range, but we see that playing out and of course as the customers continue to.
Speaker Change: Further adopt and continue to ramp up usage on those platforms that will play out over time and as part of the growth acceleration, we expect to see in the future.
Speaker Change: Okay.
Speaker Change: Your final question comes from the line of Timothy Horan with Oppenheimer.
Timothy Horan: Well, thanks, a lot guys, the 7% revenue growth Youre guiding to what do you think the industry is growing at overall and can you talk about maybe the competitive impact or any changes that you're seeing I guess, particularly from from salesforce on their partnerships out there and any other other cloud providers any change out there and I guess ultimately is going to be accretive.
Timothy Horan: The overall industry revenue growth or we will look to hurt overall industry revenue growth. Thank you.
Timothy Horan: Thanks for the question, Tim and I think you asked so let us try to address them. Then we can circle back and make sure. We've covered everything first with respect to the total revenue growth you know I think it's important to highlight that you can't always put us side by side with some of the other players because we are.
Timothy Horan: Still a hybrid of both the cloud company and a premise based business of course, the cloud mix is changing and continuing to expand it further and further in fact, we reached 74% of our overall revenue and last quarter was coming from the cloud and of course, that's the trend we continue to expect but certainly the <unk>.
Timothy Horan: Total revenue is taking into consideration that transition of the premise customers.
Timothy Horan: And that's a declining part of the business. When you think about the premise that offsets the real potential and growth that we see in the cloud that's specifically why we call out our expectation in the cloud, which is really where.
Timothy Horan: We are focused we are continuing to drive that acceleration and again, it's more about us driving the cloud growth faster.
Timothy Horan: Even though it may and sometimes come at the expense of near term quarter, because that is consistent with our overall strategy and direction as a company.
Timothy Horan: And Tim was there again I don't know if you had other questions we didn't get to.
Speaker Change: The competitive intensity has it changed much out there it seems like Salesforce and some of the cloud providers have ramped up their offerings.
Timothy Horan: Yes, let me let me cover that so.
Timothy Horan: So first of all there is.
Speaker Change: A dynamic market I will say that Tim Theres no doubt that there is and there is there's a lot of hot Theres a lot of slide where there is a lot of noise.
Speaker Change: Can easily see what we see in customer service is that to deliver the efficiency and the automation that our customers needing customer service and the real time that I mentioned before.
Needs to be and the <unk> opportunity, it's going to be on a single platform, they're not interested and they are consumers using different platforms different interactions with added being unified under in the orchestration being so whilst yes, we see others that have got a capable.
Speaker Change: <unk> did I would argue that he is really good for interactions that are static or more.
Speaker Change: Systems of record way your it makes for good marketing II or other things that CRM can provide as it relates to customer service that real time interaction between digital Schuman NII agent becomes the critical factor.
Speaker Change: I am I am convinced that the market will continue to go that way there will be generic II players out there that will have that will have standup platforms, but the value will come from the ones that really understand the data be able to apply that data and delivered and that is not us.
Scott Russell: I will now turn the call back over to Scott Russell for closing remarks.
Scott Russell: So first of all thank you everyone for the call onwards are welcome in my first earnings call I look forward to working with you as we go forward and have a wonderful day. Thank you so much.
Scott Russell: Okay.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change: Please wait the conference will begin shortly.
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