Q1 2025 Similarweb Ltd Earnings Call

Speaker Change: [music].

Greetings and welcome to the similar with Q1 fiscal 'twenty, we five earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the bowl presentation.

Operator: At this time, all participants are in a listen-only mode.

Operator: A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

If anyone should require operator assistance. Please press star zero any telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Rami Myerson, Vice President of Investor Relations.

Rami Myerson: It is now my pleasure to introduce your host, Rami Myerson, Vice President, Investor Relations. Thank you. You may begin. Thank you, operator.

Speaker Change: You may begin.

Speaker Change: Thank you operator welcome agree one child first quarter 'twenty 'twenty earnings Conference call. Joining me today are our founder.

Rami Myerson: Welcome, everyone, to our first quarter 2025 earnings conference call. Joining me today are our CEO and co-founder Or Offer and our CFO Jason Schwartz. Yesterday, after market close, we released our results for the first quarter and published a discussion of our results in a letter to shareholders, as well as an investor presentation with a strategic overview of the business on our investor relations website at pir.similarweb.com.

Speaker Change: Found that also and our CFO, Jason Schwartz yesterday after market close we released our results for the first quarter published a discussion of our results and the letter to shareholders as well as an investor presentation with a strategic overview of the business and our Investor Relations website at IR <unk> com.

Rami Myerson: Certain statements made on the call today constitute forward-looking statements which reflect management's best judgment based on the currently available information. These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our earnings release and our most recent annual report, filed on Form 20-F, for more information on the risk factors that could cause actual results to differ from our forward-looking set.

Speaker Change: Second.

Speaker Change: On the call today constitute forward looking statements, which reflect managements best judgment based.

Speaker Change: On the currently available information.

These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our earnings release and all most recent annual report filed on form 20-F for more information on the risk factors that could cause actual results differ from our forward looking statements. Additionally, certain non-GAAP financial measures.

Rami Myerson: Additionally, certain non-GAAP financial measures will be discussed in the call today. Reconciliations to the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation.

We will be discussing our call today.

Speaker Change: Reconciliations to the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation. We.

Rami Myerson: We will begin with Or and Jason's highlight of the quarter, and then we will open up the call to questions from sales side analysts.

We will begin with all in Jason's parts of the quarter and then we will open up the call to questions from sell side analysts with that I'll turn the call over to Oh Oh. Please go ahead.

Rami Myerson: With that, I'll turn the call over to Or. Or, please go ahead.

Or Offer: Thank you, Rami, and welcome, everyone, joining the call today. I'm extremely proud of the first quarter financial result that we reported yesterday. Revenue increased by 14 percent to $67 million, ahead of our expectations. Our customer base grew 90% year-over-year to more than 5,700 ARR customers at quarter-end. We reported 6 quarters of positive free cash flow while we continue our investment to realize the long-term potential of our business. The investments we begin in the fourth quarter in sales in R&D are starting to generate positive returns. We doubled the number of inside sale reps selling in this quarter as compared to Q1 last year.

Jason Schwartz: Thank you Ronnie and welcome everyone joining the call today.

Speaker Change: I'm extremely proud of the first quarter financial result, and that's really a bolt yesterday.

Speaker Change: Revenue increased by 14% to 67 million ahead of our expectation.

Speaker Change: Our customer base grew 19% year over year.

Speaker Change: The more than 5700 <unk>.

Speaker Change: Yes, the mill at quarter end.

Reported fixed quota positive free cash flow well, how do we continue our investment to realize the long term potential of our business.

Speaker Change: The investments we begin in the fourth quarter in sales and R&D I was starting to generate positive returns we doubled the number of inside sales reps selling in this quarter as compared to Q1 last year and our progress on releasing new feature like Jimmy I traffic intelligence and see a agents I'll start.

Or Offer: And our progress on releasing new features like Gen AI, Traffic Intelligence, and Free AI Agents are a task to be proud. We completed an accelerated recruitment of new salespeople at the end of the first quarter, and we are encouraged by the indication of improved productivity as they rank. More than 80% of the new hires should be fully rented by Q3 and we expect this team to deliver in the second half of the year as planned. I'm excited by our customer reaction to the launch of the new products since the beginning of the year. Those products provide tools that empower our customers to maximize ROI they get from our data and reduce them to value.

Speaker Change: To be probable.

Speaker Change: We completed an accelerated recruitment of new salespeople at the end of the first quarter and we are encourage by the indication of improved productivity as well.

Speaker Change: More than 80% of the new hires should be fully ramped by Q3, and we expect these tend to deliver in the second half of the year is good.

Speaker Change: I'm excited by our customer reaction to the launch of the new product seems at the beginning of the year those products provide tools that empower customers to maximize our ROI, they get from our downtime and reduced to value.

Or Offer: We launched App Intelligence, expanding our app data and incorporating the acquisition of 42 methods last year. I'm super happy that SimilarWeb can now provide digital data on more than 4 million iOS and Android mobile apps in 58 countries. App intelligence gives our customers visibility on app data, including download, usage, patterns, engagement, retention, and audience demographics. We are seeing strong demand, and 484 of our customers have already signed up for the App Intelligence. are excited to be the leading company providing full digital visibility to brands, combining web, mobile web, and app data, and providing our customers with a holistic, real-time view of the entire digital world on one platform.

Speaker Change: We launched <unk> intelligent extending our open die down and incorporate the acquisition of 42 met there last year.

Speaker Change: I'm Super happy that similar words can now provide digital data on more than 4 million Aon's thing I'm worried mobile apps in 58 countries.

Speaker Change: At intelligence give our customers visibility on that.

Speaker Change: Including download usage patterns engagement retention and audience demographics we.

Speaker Change: We are seeing strong demand and 484 of our customers have already signed up for the App intelligence.

Speaker Change: I'm excited to be the living company, providing fully digital visibility two brands, combining web mobile web and desktop and providing our customers with at least a real time view of the entitled to get to the world's on one platform.

Or Offer: This comprehensive coverage is really turning SimilarWeb into a mission-critical resource for anyone that needs to understand digital behavior and market dynamics around the world.

Speaker Change: This comprehensive coverage because literally turning similar winter into mission critical under the stove, so anyone that needs to understand digital behavior and market dynamics around the world.

Or Offer: We continue to develop products and capabilities to capitalize on the AI revolution. In March, we launched our AI Chatbots Traffic Intelligence into our platform, and I'm really excited that our customers can now see data on the prompts and Chatbots products that are sending traffic to websites as part of our web intelligence offering. As more customers move from traditional search to Chatbots, this information is becoming critical to companies to drive impact in this new digital channel. I believe that we are the leading company in the world providing this critical information to our customers that want to succeed in the digital ecosystem, and I'm very proud of that.

Speaker Change: We continue to develop products and capabilities to capitalize on the.

Speaker Change: Resolution <unk>.

Speaker Change: Merits, we launch all AI chatbot stomach intelligence into our platform and I'm really excited is that a customer can now see doctor on the prompt and shed books product cause I was sending traffic to website as part of our web intelligence offering.

Speaker Change: As more customers move from traditional stench checkbooks. This inflammation is becoming critical to companies to drive impact in this new digital channel.

Speaker Change: I believe that we havent been leading company in the world, providing this critical information to our customers.

Speaker Change: Wanted to succeed in the digital ecosystem and I'm very problem that the response from our customers is truly amazing and the convention piping for these got them is growing fast.

Or Offer: The response from our customers is truly amazing, and the commercial pipeline for this data is growing. On top of that, we're also rolling out a series of AI agents to help our customers maximize the commercial opportunities provided by our data. Our first three AI agents are now already live in our platform. The first one is the SEO Strategy AI Agent, which shows digital marketing professionals what they should do to promote their content strategy and how best to do it in order to The second agent is our Traffic Trend Analyzer AI agent, which automatically detects unusual spikes in sales demand and identifies their cause, thereby helping companies act before the competition.

Speaker Change: On top of that we're also rolling out a serious of the agents to help our customer mix maximize the commercial opportunities provided by our doctor.

Speaker Change: Our first free eye agents are now already live in a classroom.

Speaker Change: First one is the S. C O Todd the G. A I agents, which show digital marketing professionals, what they should do to promote the content stoppage in how best to do it in order to win.

Speaker Change: The second agent because all the traffic trend analyze the AI agent, which automatically detect unusual spikes in sales demand and identified there called <unk>.

By helping companies extra before the competition until now analyzing and formal eating and understanding of the visit.

Or Offer: Until now, analyzing and formulating an understanding of the reason, the why for those changes was very hard and time-consuming. and this now can help them save time and get to the insights. The third agent we release is our Meeting Prep AI agent for Cellsteam. that this agent build a strategic one-pager meeting brief using our digital signals and our market data to reduce time of the salesperson spending time on research the prospect and help him improve his win rate. The new product launches in the quarter are the first encouraging indication that the investments that we begin will grow faster and we will produce higher margin going forward as part of this journey as an AI first company.

Speaker Change: Why for those changes was very hard and time consuming.

Speaker Change: And this now who can help them save time and get to the insight Center.

Speaker Change: The third agents, we release is out meeting, perhaps a agent force sensing.

Speaker Change: These agents build a strategic one stage of the meeting brief using our digital signals in our market downtown.

Speaker Change: So reduced time over the salesperson spending time in research to prospect and helping improve he's a weak links.

Speaker Change: The new product launches in the quarter, the first encouraging indication that the investments that we begin.

Speaker Change: We'll grow faster and we can produce higher margin going forward as part of this journey.

Speaker Change: And then AI first company.

Or Offer: And as I like to say, we are just getting started. Thank you everyone on the call for continued support.

Jason Schwartz: And as I like to say well just getting style that thank you everyone on the call for your continued support with that I will turn the call over to Jason.

Jason Schwartz: With that, I will turn the call over to Jason. Thanks, Or, and everyone joining on the call today to discuss our first quarter results. I'll provide highlights of our financial performance, and then we'll open up the call to questions. We generated $67.1 million of revenue in Q1, a 14% increase relative to Q1-24. Revenue growth was driven by the 19% growth in customers, mainly in the below $100,000 ARR cohort, as well as expansions and upsells from our over $100,000 ARR cohort. NRR for our over $100,000 customers increased by 400 basis points year-over-year to 111%, and 300 basis points year-over-year to 101% for the overall customer.

Jason Schwartz: Thanks for everyone joining on the call today to discuss our first quarter results I'll provide highlights of our financial performance and then well open up the call to questions.

Jason Schwartz: We generated $67 $1 million of revenue in Q1, a 14% increase relative to Q1 'twenty for.

Jason Schwartz: Revenue growth was driven by the 19% growth in customers mainly in the below 100000 dollar AOR cohort as well as expansions and Upsells from our over 100000 dollar a all our customers.

Jason Schwartz: And all of our store are over 100000 dollar customers increased by 400 basis points year over year to 111% 300 basis points year over year to 101% for the overall customer base.

Jason Schwartz: We're proud that 52% of our ARR is contracted under multi-year contracts, up from 42% last year. We believe this demonstrates the importance and critical nature of our data to our customers. And we expect these multi-year contracts will contribute to improve retention rates. Our remaining performance obligations, or RPO, totaled $253 million at the end of Q1, up 18% year-over-year. We expect to recognize approximately 69% of total RPO as revenue over the next 12 months. Our operational performance in the corner was in line with expectations and we reported a non-gap operating loss of 2% in Q1 due to the increased investment in sales and R&D discussed in the past.

Jason Schwartz: We are proud that 52% of our AOR is contracted under multiyear contracts up from 42% last year. We believe this demonstrates the importance and critical nature of our data to our customers and we expect these multiyear contracts will contribute to improve retention rates at.

Jason Schwartz: Our remaining performance obligations or our P O totaled $253 million at the end of Q1 up 18% year over year, we expect to recognize approximately 69% of total RP Airways revenue over the next 12 months.

Jason Schwartz: Our operational performance in the corner was in line with expectations and we reported a non-GAAP operating loss of 2% in Q1 due to the increased investment in sales and R&D discussed in the past we're committed to profitable growth over time and if returns on these investments do not.

Jason Schwartz: We're committed to profitable growth over time. And if returns on these investments do not materialize as planned, we're prepared to rapidly respond and improve profitability as we have in the past. We think it's worthy to note that over the last three years, we've improved operating margins by more than 4,000 basis points. from minus 45% in the first quarter of 2022. This performance and our unit economics provide us with confidence in our ability to achieve our profit and cashflow targets. We generated $5 million of normalized free cash flow in the quarter, a 7% free cash flow margin, and the 6th consecutive quarter of positive free cash flow.

Materialize as planned we're prepared to rapidly respond and improved profitability as we have in the past we think it's worthy to note that over the last three years, we've improved.

Jason Schwartz: Improved operating margins by more than 4000 basis points from minus 45% in the first quarter of 2022. This performance and our unit economics provide us with confidence in our ability to achieve our profit and cash flow targets, we generated 5 million.

Jason Schwartz: Dollars normalized free cash flow in the quarter or 7% of free cash flow Martin and the sixth consecutive quarter of positive free cash flow, we expect to continue to generate positive free cash flow on a quarterly basis in 2025.

Jason Schwartz: We expect to continue to generate positive free cash flow on a quarterly basis in 2022.

Jason Schwartz: Turn into our route. We continue to monitor the global macroeconomic and market developments, leveraging the insights provided by SimilarWeb digital data to assess the potential impact of tariffs on our different end markets. So far, we have not experienced the material impact on our business.

Jason Schwartz: Turning to our outlook, we continue to monitor the global macro economic and market developments leveraging the insights provided by similar web digital data to assess the potential impact of tariffs on our different end markets. So far we have not experienced a material impact on our own.

Jason Schwartz: Business.

Jason Schwartz: For the full year 2025, we are maintaining our previous guidance and expect total revenue in the range of $285 to $288 million, representing 15% year-over-year growth at the midpoint of the range, and expect our non-GAAP operating profit to be between $1 and $4 million. For Q2 2025, we expect total revenue in the range of $68.6 million to $69 million. Non-GAAP operating loss for the second quarter of 2025 is expected to be in the range of half a million to $1 million. We remain focused on delivering profitable growth over time as well as achieving our long-term profit and free cash flow targets.

Jason Schwartz: For the full year 2025, we are maintaining our previous guidance and expect total revenue in the range of $285 million to $288 million, representing 15% year over year growth at the midpoint of the range and expect our non-GAAP operating profit to be between.

Jason Schwartz: One 4 million for Q2 2025, we expect total revenue in the range of $68 $6 million to $69 million non-GAAP operating loss for the second quarter of 2025 is expected to be in the range of half a million to $1 million.

Jason Schwartz: We remain focused on delivering profitable growth over time as well as achieving our long term profit and free cash flow targets and with that or and I are ready to answer your questions.

Rami Myerson: And with that, Or and I are ready to answer your questions. Thank you.

Jason Schwartz: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two to remove yourself from the queue.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star 2.

Jason Schwartz: Spears using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, while we pull for Our first question.

Jason Schwartz: One moment, please pool for questions.

Speaker Change: Our first question comes from the line of Arjun Bhatia with William Blair <unk> Company. Please proceed with your question.

Arjun Bhatia: comes from the line of Arjun Bhatia with William Blair and Company. Please proceed with your Perfect. Thank you so much.

Speaker Change: Alright, thank you so much.

Arjun Bhatia: I'm curious, you know, obviously, the investments are a big part of the, in Q4 and into Q1, a big part of the story here. And it seems like You've completed the accelerated hiring process. I'm curious, Or, how you feel just about the hires you've made, the quality of the team that's been brought on. And as you're tracking kind of the ramp to productivity for some of the go-to-market investments and the sales reps, what exactly are you looking at just to make sure that, you know, there is ROI on those investments and the ramp to productivity is happening in line with expectations?

Speaker Change: And I'm curious and obviously the investments are a big part of the and in Q4 and into Q1, it would be part of the story here and it seems like.

Speaker Change: You've completed the accelerated hiring process I'm curious or how do you feel just about the hires you've made the quality of the team. That's been that's been brought on and as you're tracking kind of a ramp to productivity for for some of the go to market investments in a.

Speaker Change: The sales reps what exactly are you looking at just to make sure that.

Speaker Change: You know there is ROI on those investments and the ramp to productivity is happening in line with expectations to get to get your team to come up and productive by I believe it was Q3 that you mentioned here.

Or Offer: to get to get your team kind of up and productive by I believe it was Q3 that you Hi, Arjun.

John: Hi, John and of course, thank you everyone for joining the call today.

Or Offer: Of course, thank you, everyone, for joining the call today. Look forward to speaking with everyone. And thank you, Arjun, for the first question. So regarding the quality of the hiring, we're very happy from the quality. We learned a lot over the past few years about how we can bring the right persona to sell our specific offering that are about insight, data, and analytics. And we built a very good process about measuring the activities and what we expect from those new IOs to deliver in every part of the onboarding process. How many meetings, how many win rates we expect to see.

John: Look forward to speaking with everyone and thank you often find the first question.

John: And so we're doubling the quality of the hiring we use very happy for him to quality, we learned a lot over the past few years about how we can bring to life persona just said our specific offering started about inside that analytics.

John: And we built a very good process of dogs and measuring the activity is and what we expect from those new hires to deliver in that part of the onboarding process and how many meetings how many win rates.

John: And so and so right now and looking good.

Or Offer: And so right now. Looking good.

Arjun Bhatia: Okay, great. And then on the product side, You've kind of integrated AI chatbot traffic data into your platform. Now, what sort of early indications of usage or interest? are you seeing from your customer base, obviously very pertinent and timely, given some of the comments we've heard recently from from the ecosystem of maybe traffic starting to shift from search to the AI chatbots, but would love to hear what you're seeing in your customer base in terms of interest of your innovation on that front. Yes, so it's super, super nice. The customers are really excited about it.

John: Okay great.

John: And then on the product side.

John: And you you've kind of integrated AI chat bot traffic data into your platform now.

John: What sort of early indications of usage or interest.

Are you seeing from your customer base are obviously very important in <unk>.

John: Timely James on the comments, we've heard recently from.

John: Oh from the ecosystem.

John: Traffic starting to shift from search to.

Speaker Change: The AI chat bots are but would love to hear what youre seeing in your customer base in terms of interest.

John: Your innovation on that front.

John: Yeah. So it's super Super Nice customer are really excited about it and it's a.

Or Offer: It's, you know, it's, they see that and it's like, there is like a wow effect when they when we show them the data. It's very unique. So it's very nice to see that it's like, the early days when we launched SimilarWeb and it felt like magic that people didn't realize that this data is out there and the insights we can get out of it. So the reaction is super nice and it surfaced up a lot of interesting insight and visibility of something that right now is a very black box. think most of the website owners right now out there don't have an idea about the impact of how much traffic those chatbots are generating in the channel.

John: It's you know H E B C that the nims thinking that there was like Wow effect when they when we show them. The downtime. So very unique so it's very nice to see that it seem like the early days when we launch similar weapon and felt like magic that people didn't realize that it is that things out there and then the insights we can get down.

John: So the reaction is super nice since its Suffolk sort of stopped a lot of the.

John: Interesting insight and visibility of something Thats right now is that he's very black box.

John: I think most of the website owners right now out there don't have idea about the impact of how much.

John: Traffic those shed little started generating in the Shannon.

Or Offer: And also, they have no visibility about what people are asking as prompt, and we bring those two data now, and it's very nice to see. You're giving them, and the impact is super nice.

John: And also they have no visibility about what people are asking is pumped and we bring those stood out there now.

John: That's very nice to see you giving them intact.

John: Oh nice.

Arjun Bhatia: All right, perfect. Thank you all. Thank you.

Mark: Alright, Thank you Mark.

Mark: Thank you our.

Raymond Lencho: Our next question comes from the line of Raymond Lencho with Barclays. Please proceed with your question.

Speaker Change: Our next question comes from the line of Raimo <unk> with Barclays. Please proceed with your question.

Raymond Lencho: Hey guys, this is Damon Cozumel from Rainbow Lens Show. Thanks for taking the question. Great to hear that the new talent you recently recruited has been driving improved yield and strong pipeline. Can you help us understand the level of visibility that you have for some of the deals that are supporting the revenue reacceleration in the second half of the year? Just trying to gain clarity on the mechanics of the growth implied by the guide in the second half.

Speaker Change: Hey, guys. This is Dan Kaufman on for Raimo lunch out thanks for taking the question.

Speaker Change: Great to hear that the new talent you recently recruited has been driving improved yield and strong pipeline can you help us understand the level of visibility that you have for some of the deals that are supporting the revenue reacceleration in the second half of the year.

Speaker Change: Just trying to gain clarity on mechanics of the growth implied in our guide in the second half.

Or Offer: So we hire many people all across the go-to-market organization and there's many different position there. You have AM that needs to drive up sales and renewal. You have in the sales, in the new sales, you have a few tiers of sellers. You have inside sales that need to land like 20k deals. You have enterprise people that need to land higher deals. You have start people that need to do high expansions. You also have like a lot of entry level that need to work on our self-serve customers and want them to hear this. So each one behaves differently and have different ramp time.

Speaker Change: So we hire many people all across the go to market organization and there's many different pause.

Speaker Change: Position there you have a M that need to drive upsell and renewal.

Speaker Change: And you'll have seen descends into new centers.

Speaker Change: <unk>.

Speaker Change: Oh, then you'll have the insights and that's led.

Speaker Change: Land like 20, K deals you have enterprise people didn't need to lend higher deals.

Speaker Change: It starts people didn't need to do on high expansion sales. You also have like lot of entry level it needs to work on our self so customers there and moved them to easily so each one behaves.

Speaker Change: Friendly and there's different trends time.

Or Offer: And the more senior the rep and the more enterprise and above, it's taking longer, much longer sales cycle. And so in the inside sales organization, you can see much faster the ramp and you can recognize faster the yield. The other ones are taking more time by nature. Got it.

Speaker Change: And then more senior there at anymore.

Speaker Change: Enterprise, it and above its taking longer it's much longer sales cycles.

Speaker Change: And so in the inside simple organization and you can see them much faster.

Speaker Change: So the yield the other was taking more time by nature.

Jason Schwartz: Got it thanks, and then maybe just one for Jason is there anything factored into the top and bottom line guide from the search Launder acquisition.

Raymond Lencho: Thanks, Or.

Jason Schwartz: And then maybe just one for Jason.

Jason Schwartz: Is there anything factored into the top and bottom line guide from the SearchMinder acquisition? And nothing material on that.

Speaker Change: Yeah, nothing material on that.

Jason Schwartz: There was a small business where we're excited to have him on board, not material contribution for the quarter of the And then just one quick one, if I may, is there any change to your guidance philosophy for the rest of the year? I understand that it's an uncertain environment, so just kind of understand some of the mechanics for the rest of the year.

Speaker Change: That was a small business, where we're excited to have them on board not material contribution.

Speaker Change: For the quarter or the year.

Speaker Change: Got it and then just one quick last one if I may is there any change to your guidance philosophy for the rest of the year understand that it's another uncertain environment. So just kind of understand some of the mechanics for to the rest of the year. Thanks guys.

Jason Schwartz: Thanks, guys. We haven't changed a lot of the assumptions, you know, effects and the like. But, you know, we'd like to, to give guidance that we know that we can be The same for the last one.

Speaker Change: We haven't changed a lot of the assumptions are you know FX and alike.

Speaker Change: But you know.

Speaker Change: We liked it.

Speaker Change: To give you guidance that we are now that we can meet so.

Speaker Change: The same philosophy.

Jason Schwartz: Thanks, guys.

Speaker Change: Thanks, guys.

Speaker Change: Thank you. Our next question comes from the line of surrenders and with Jefferies. Please proceed with your question.

Surinder Thind: Our next question comes from the line of Surinder Thind with Jeffries. Please proceed with your question. Thank you.

Speaker Change: Yes.

Surinder Thind: Or can you maybe talk a little bit about your larger clients, the 100k clients, the behavior that you're seeing there and some of the ongoing conversations perhaps. It looked like the NRR number dipped a little bit quarter over quarter by about a percent. Yeah, of course. So I think the decline of this 1% was kind of a mechanism because last year in Q3, we had big upsells, and Q1, sorry, and I think it's increased the base a lot. So this year, the upsell was not as big as Q1. So this is why you have that.

Speaker Change: Thank you.

Speaker Change:

Speaker Change: Or can you maybe talk a little bit about your larger clients. The 100 K clients the behavior that you're seeing there and some of the ongoing conversations perhaps it looked like the MLR number dipped a little bit quarter over quarter by about a percentage point.

Yeah.

Speaker Change: Of course, and so I think the decline of this 1% kind of the.

Speaker Change: They couldn't make mechanic then because last year in Q3, we had the opposite.

Speaker Change: And if Q1, sorry, and and I think it's increased the days alone will disappear.

Speaker Change: So it was not the biggest Q1. So this is why you have that.

Or Offer: And overall, this bucket of $100,000 customers, I think we're above $400,000. You see that it's also a few different types there. You have a lot of very big, big companies, you know, Fortune 100 that are engaged and looking at us as the trusted digital market data provider, and they continue to buy more and more different.

Speaker Change: And overall the this bucket 200 that solved and all our customers and I think we have about 400, you see that it's also a few different types of daily as Donato very big companies.

Speaker Change: And you know full churn 100.

Speaker Change: Well engage in.

It to us as a trusted digital market that the bovine and they continue to buy more and more different.

Or Offer: Dr. Thind. and they're growing significantly. And then you have a big part of, you know, Companies that are digital first and digital is very important. And they are engaging above $100,000. Got it.

Speaker Change: That's our sense.

Speaker Change: And they are growing significantly.

Speaker Change: And then you have a big volatile you know this.

Speaker Change: There's all the digital first and digital important.

Speaker Change: And they are engaging above and below it.

Speaker Change: Got it.

Surinder Thind: And then just kind of the reverse with maybe some of the smaller clients in the SMB space. And you want to know what type of customer in that bucket? No, no, just in terms of just the trends and the demand, it sounds like you onboarded a lot of new customers this quarter in terms of just the number of accounts that that grew. And just kind of what you're seeing there, it sounds like still a healthy appetite, actually improving appetite, if I was to potentially characterize Yeah, we still see a big demand on top of the funnel.

Speaker Change: Then just kind of the reverse with maybe some of the smaller clients in the SMB space.

Speaker Change: And do you want to know what type of customer that's bucket no no just in terms of just the trends in the demand. It sounds like you on boarded a lot of new customers.

Speaker Change: This quarter in terms of just the number of accounts that that grew and just kind of what youre seeing there it sounds like still.

Speaker Change: Still a healthy appetite actually improving appetite if.

Speaker Change: If I was to potentially characterize it.

Speaker Change: Yeah, we still see a big demand and top of the funnel and we have many many registration hundreds of thousands in two months.

Or Offer: And we have many, many registration, hundreds of thousands per month. and we're seeing great success converting them to customers, yearly customers. And also, as we said in the earning call, we see a big increase in the multi-year engagement. That is something very good for us, a good indication of companies that want to engage for the long term with us, that they see value in our offering. That's helpful.

Speaker Change: And we've seen great success converting them to customers yearly cost come out.

Speaker Change: And also as we said in the call we see a big increase in the multi year engagements that he is something.

Speaker Change: And very good that's it for us a good indication of companies that want to engage for the long term with that said they see value in our offering.

Speaker Change: That's helpful. And then just one final one for me thank.

Surinder Thind: And then just one final one for me.

Or Offer: As you think about your strategy around building insights for the different chatbots, is there any color that you can provide on all of the different partnerships that you can get to or what coverage you can get? versus what you currently have. So I think that regarding coverage, we feel confident that we can cover all of the big chatbots out there and provide the full visibility. We hope to launch this quarter like a full module around AI intelligence that will have the mix of the first product we launched that traffic intelligence. And the second part will help you track your market share and how much you're visible on the chatbot.

Speaker Change: As you think about your.

Speaker Change: Your strategy around building insights for the different chat bots.

Speaker Change: He is there any color that you can provide on all of the different partnerships that you can get to.

Speaker Change: Or what what coverage you can get them.

Speaker Change: Versus what you currently have.

Speaker Change: So I think that the.

Speaker Change: Regarding comprehends leaves me with confidence that we can cover all of the big shed books.

Speaker Change: I'll then provide full visibility.

Speaker Change: We hope to launch this quarter like a fool module around AI intelligence that we.

Speaker Change: We will have that makes us the first.

Speaker Change: <unk> product, we launched that keeps your duct classic intelligent and the second part will help you track your market share and and you own and how much you'll be visible.

Or Offer: Because a lot of the time, the chatbot are quoting your brand, talking about your product, but don't give you a link and send you outside to go to other websites. So there's two sides of the data brands want to see. One, how much traffic they're getting from chatbots and the prompts generate those topics. And then they want to see overall how much market, how much time my brand has been mentioned versus competition, and if the mention was, if the sentiment was positive or negative.

Speaker Change: On the checkbook, because a lot of the time, the trimble to our quoting youll blend still came out to a product, but don't give you links and send you all time to go to other.

Speaker Change: The website. So there's two sides of the dotcom Vince wanted to see how much traffic, they're getting from jet boats and the prompt generally those topics.

Speaker Change: And then they want to see overall, how much market. So how much time my brand has been mention this is competition and if it does if a dimension wise if the sentiment was positive or negative. So these second thoughts with lunch this quarter than we will.

Or Offer: So this second part will launch this quarter and we will have a very strong offering for companies who want to get better visibility and success on this new digital channel, I will call it.

Speaker Change: And there's very strong and also even for companies that want to get better visibility and success in this new digital channel I would call it.

Surinder Thind: Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question comes from the line of Jason <unk> with Oppenheimer <unk> Company. Please proceed with your question.

Jason Helfstein: Our next question comes from the line of Jason Helfstein with Oppenheimer & Company. Please proceed with your question. Thanks, everybody. I guess I'll ask a few. So one is, as you look to sell the AI-related products, Is it a different, like, are you selling to a different audience at the client? I mean, a lot of what you started with... right, the marketing department. that have to kind of go to a bigger level.

Speaker Change: Thanks, everybody.

Speaker Change: I guess I'll ask a few so.

Speaker Change: One is as you look to sell the AI related products.

Speaker Change: Is it is it a different like you're selling to a different audience at the client.

Speaker Change: I mean, a lot of what you started with typically is with them right. The marketing department, but then.

Speaker Change: Does it have to kind of go to a bigger levels or just how is how do you envision selling the AI products differently than some of the legacy products.

Jason Helfstein: So just how is, how do you envision selling the AI products differently than some of the legacy products?

Speaker Change: To how.

Jason Helfstein: Two, how, you know, I guess, besides upgrading the overall quality of salespeople, like, how is the strategy different, you know, now under the new chief revenue officer? And then, I guess, lastly, the billing did slow. You know, I don't know if there's, like, and again, last year, you know, first quarter was your slowest growth in billing, so I don't know if there's, like, an emerging pattern around first quarter is the slowing billing quarter, but just any color, Jason, just on or out around that, like, I don't know if there's, like, you know. comments about upsells last year and that made tougher comms for just any other comment.

Speaker Change: I guess, besides upgrading the overall quality of salespeople like how.

Speaker Change: How is the strategy different you know now under the new Chief revenue Officer.

Speaker Change: And then I guess lastly.

Speaker Change: The billings did slow in this quarter.

Speaker Change: I don't know if there's any.

Speaker Change: Again last year.

Speaker Change: First quarter was your slowest raws in billing so I don't know if there's like an emerging pattern around first quarter selling billing quarter, but just any color Jason just on around around that like there was like you know there were some comments about upsells last year and that made tougher times with just any any other color there. Thank you.

Jason Helfstein: Okay, so thank you, Jason, for the questions. I heard three questions.

Speaker Change: Okay. So thank you Jason for the questions I had three questions. The first one what was the ICT 19 custom mounted combined.

Or Offer: The first one, who is the ICT, ideal customer that can buy the AI intelligent model? second one is around CRO and the third one is billing.

Speaker Change: I intelligent model are.

Speaker Change: The second one is at home to Cielo and the third one is the billing I will start answering the first two.

Or Offer: I will start answering the first two and I will give Jason to answer the billing. So regarding the ideal customer to buy the AI Intelligent Data. So as we all know, it's a very new motion. Right now we presenting it to... most of our users, and there's a big. Big excitement around all personas because I think this is something very new and inside they are appealing to many different roles from marketing, branding, SEO, PPC, product, executive. And so right now the excitement is around all and all different.

Jason Schwartz: Jason to answer the billing.

Jason Schwartz: So regarding their.

Ideal customer to bind to a guy.

Jason Schwartz: Intelligent data.

Jason Schwartz: So as we all know it's a very new motion right now we are presenting it to them.

Jason Schwartz: Most of our user then there is a big.

Jason Schwartz: Big excitement around all personal announced Nichols I think this is something very new and.

Jason Schwartz: So Dan appealing to many different roles from marketing brand in the U S. C O P. P C product executive.

Jason Schwartz: And so right now.

Jason Schwartz: The excitement is around all.

Jason Schwartz: Hum.

Jason Schwartz: All different.

Jason Schwartz: And customers that we have in the platform.

Jason Schwartz: It's early to say, who will be the buyer I think it will and probably somewhere around marketing and I guess somewhere around salvage dimension acquisition well might be brand.

Or Offer: And regarding the second question on the CRO, so like every executive, our CRO just finished first year, and usually when you hire executives C-level, they need one year to set up the organization the way they need, and then they start to execute. So our dear CRL just finished her first year in the company. And we're excited to see how she's going to execute going forward with all the changes she rolled up.

Jason Schwartz: And regarding the second question on the CLO so.

Jason Schwartz: Every executive Seattle just.

Jason Schwartz: Finished steel.

Jason Schwartz: I mean, usually when the high executive level, they need one year to set up the organization the way they need and then they start to execute.

Speaker Change: So CLO.

Jason Schwartz: Kidney surfaced here in the company.

Jason Schwartz: We are excited to see how she's going to execute going forward with all the changes here hold up.

Jason Schwartz: And I'll let Jason answer the billing question. Hey, Jason. On the billing side, it's just a function of the invoicing schedules. Sometimes, and that's really a seasonal thing, sometimes there are customers that are asking to move from one month to another month, and you get some of that shifting. But overall, what you see is, you know, free cash flow is still very strong. We did a 7% free cash flow generation this quarter, and I we've guarded that will continue to be positive free cash flow all throughout the Thank you. Thank you.

Jason Schwartz: And I'll, let Jason so the billing question.

Jason Schwartz: Hey, Jason.

Jason Schwartz: On the billing side, it's just a function of the AR and the invoicing schedules.

Jason Schwartz: Sometimes and that's really a seasonal thing sometimes there are customers that are asking for it to move from one month to another month I mean, you've got some of that shifting but overall what you see is you know free cash flow is still very strong we get a 7% free cash flow generation. This this quarter and I think we've got.

That will continue to be positive free cash flow wall all throughout the year.

Jason Schwartz: Thank you.

Speaker Change: Thank you. Our next question comes from the line of Tyler Radke with Citi. Please proceed with your question.

Tyler Radke: Our next question comes from Tyler Radke with Citi. Please proceed with your question. Hey, gentlemen. Good morning. Thanks for taking the question.

Tyler Radke: Hey, gentlemen, good morning, Thanks for taking the question wanted to follow up on the questions around billings, but but actually asked about bookings.

Tyler Radke: I wanted to follow up on the questions around billings, but actually ask about bookings. It looks like, you know, current RPO bookings, if we just take a look at the sequential change in current RPO, that growth has slowed quite a bit over the last couple quarters. And I know there's been some, you know, pretty large compares in that number over the past year and a half with some of the large deals that you've signed. But help us understand, you know, what's driving that and any changes that you're expecting in terms of seasonality to the business.

Tyler Radke: Looks like current RPI bookings, if we just look at the sequential change in <unk>.

Tyler Radke: That growth has slowed quite a bit over the last couple of quarters and I know there's been some pretty large compares in that number over the past year and a half with with some of the large deals that you've signed but help us understand.

Tyler Radke: What what's driving that and any changes that youre expecting in terms of seasonality to the business. You know in other words should we expect that current RP O to Reaccelerate a rebound.

Tyler Radke: You know, in other words, should we expect that current RPO to reaccelerate or rebound in the back half of the year?

And in the back half of the year.

Jason Schwartz: Hey, Tyler, thanks for that. Yeah, you know, current RPO is up 9% year over year. But we do think of that as as somewhat seasonal, you see, some of those, you know, big deals that we, bigger deals that we signed last year, were in, you know, Q2, Q3. So those, you know, burn down, and then, well, when the renewals come up, those get invoiced again. So the bookings and the current RPO will match that, we believe, you know, going, you know, in the back end of the year. And I think that's just a function of some of that change that you had a year over year.

Tyler Radke: Hey, Tyler Thanks, Yeah.

Speaker Change: Yeah, Yeah, Alright, RPI was up.

Tyler Radke: 9% a year over year.

Tyler Radke: But we do think of that as as somewhat seasonal you see some of those are big deals that we are bigger deals that we signed last year, where in Q2 Q3. So that was burned down and then well when the renewals come up that was those get invoiced again, so the bookings in the.

Tyler Radke: And the current RPI will match that we believe.

Tyler Radke: Going in the back end of the year and I think that's just say a function of that some of that's a change that you had a year over year.

Jason Schwartz: Got it. Okay, so we're lapping some pretty big deals in Q2, Q3. So we should see, you know, some replenishment of those numbers. Exactly.

Tyler Radke: Got it okay. So we're lapping some pretty big deals in Q2 Q3, so we should see.

Tyler Radke: Some yeah replenishment.

Tyler Radke: Hey.

Tyler Radke: Exactly.

Jason Schwartz: And same thing on the on the NRR comment that Or made before. Remember all those those big upsells and big deals. And we announced last year two customers that crossed over to eight digit customers. At this point, when we're at a 12 month look back, those are already in the baseline. So the NRR has to has to grow, you know, even bigger on bigger numbers. So, so we're feeling good on the on on the pipeline, but understand that there are, you know, in the near term over the next couple of quarters, we've got some, some big, you know, big numbers to, you know, to match.

Speaker Change: On the on the IRR comment that was made before remember all of those those are big Upsells and big deals again, we announced last year to customers that crossed over two to eight digit customers.

Speaker Change: At this point when we're at a 12 month look back those are already in the baseline set the MLR has to has to grow even bigger.

Speaker Change: Number so so we're feeling good on the on on the pipeline, but understand that there are you know in the near term over the next couple of quarters, We've got some some big.

Speaker Change: Big numbers here.

Speaker Change: To match.

Tyler Radke: Yeah, great.

Speaker Change: Yeah, great and on the New customer addition that looked like total new customers.

Tyler Radke: And on the new customer edition that looked like total new customers was quite strong, you know, the quarter-over-quarter growth and new logos was well ahead of what you did in Q1 of last year.

Speaker Change: This was quite strong.

Speaker Change: The quarter over quarter growth in new logos was well ahead of what you did in Q1 of last year.

Tyler Radke: Can you just talk about, like, the, you know, the size of those deals? Like, are the average deal size for new lands, is it consistent with last year? Is it maybe lower because you're just prioritizing new logos?

Speaker Change: Can you just talk about like the.

Speaker Change: The size of those deals like are that the average deal size for.

Speaker Change: New lands is it is it consistent with last year as it is it may be lower because you're just prioritizing new logos.

Jason Schwartz: You know, and any changes in the profile of customers now that you have kind of a new sales motion and a bigger sales force that's going after them? Sorry about that. Yeah, very consistent with our strategy that we laid out over the last, you know, 18 months. We talk about the barbell strategy. And part of the strategy that we said is that on one hand, we've got 60, 61% of our business that are from the revenue that's generated from customers who spend more than $100,000 a year. And those customers are spending, you know, 300, on average, you know, nearly $370,000 each.

Speaker Change: Any any changes in the profile of customers now that you have.

Speaker Change: A new sales motion in a bigger sales force it.

Speaker Change: Got after this.

Speaker Change: I'm, sorry about that yeah.

Speaker Change: It's very consistent with our strategy that we laid out over the last.

Speaker Change: 18 months, we talk about the the barbell strategy part of the strategy that we said is that on one hand, we've got 60, 61% of our business that they are from a revenue that's generated from customers who spend more than $100000 a year and those customers are spending.

Speaker Change: 300, <unk> on average nearly 370.

Jason Schwartz: But at the same time, we've got this momentum motion and velocity motion that is bringing in new customers every single day, every, every single quarter, I think we were up, you know, 230 some odd customers, just quarter over quarter, you know, just under 1000 net new customers over the past year. That's the function of that. And yes, the land of those customers are is lower than the average revenue per customer. And so you see that happening. But I think one of the interesting things when you look at the over $100,000 customers, you know, we have those 400 plus customers that today are $100,000 or more.

Speaker Change: Dollars each but at the same time, we've got this momentum motion and velocity in motion that is bringing in new customers. Every single day. Every every single quarter. I think we were up 230, some odd customers just quarter over quarter with just under a 1000 net new customers.

Speaker Change: Over the past year, that's the function of that and yes, the lambda those customers.

Speaker Change: Sure.

Speaker Change: It's lower than the average revenue per customer and so you see that happening, but I think one of the interesting things. When you look at the over 100000 dollar customers. You know we have those 400 plus customers that today are $100000 or more.

Jason Schwartz: More than 80% of those customers started well below $100,000. And so we have a history of knowing how to land, retain and expand. And that's what you see going on over the last couple of quarters and continued in June.

Speaker Change: More than 80% of those customers started well below $100000 and so we have a history of knowing how to land to retain and expand and that's what you see going on over the last couple of quarters and continued in Q1.

Tyler Radke: Great. Thank you.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Luke Horton: Our next question comes from the line of Luke Horton with Northland Capital Markets. Please proceed with your question. Yeah, hey guys, thanks for taking the questions and congrats on the quarter.

Speaker Change: Our next question comes from the line of Luke Horton with Northland Capital markets. Please proceed with your question.

Luke Horton: Yeah, Hey, guys. Thanks for taking the questions and congrats on the quarter.

Luke Horton: Jason, in your prepared remarks, you mentioned about the investments in the new sales hires that they don't end up performing as expected. You mentioned being prepared to kind of rapidly respond and improve profitability. So just wondering how long of a kind of timeline the new sales hires are given to start to show some results, and then if it doesn't pan out the way it was thought, what are kind of those nearest levers that you could pull to improve that profitability? Yeah, the We've done this before. You know, one of the nice things that we mentioned in the quarter that we're already seeing more sellers selling and closing business in Q1 than we had last year, looking at just the inside sales.

Speaker Change: Jason in your prepared remarks you'd.

Speaker Change: Mentioned about the investments in the new sale high sales hires that they don't end up performing as expected.

Speaker Change: You mentioned being prepared to kind of rapidly respond and improve profitability. So just wondering how long of a.

Speaker Change: Timeline, the new sales hires are given here to start to show some results and then ill.

Speaker Change: If it doesn't pan out the way it was thought well what are kind of those nearest levers that you could pull to improve that profitability.

Speaker Change: Yeah the.

Speaker Change: We've done this before one of the nice things that we mentioned in the quarter that we're already seeing.

Speaker Change: More sellers.

Speaker Change: Selling and closing business in Q1 than we had acute than we had last year.

Speaker Change: Looking at just the inside sales and that's always mentioned the inside sales team you actually see relatively quickly over the first couple of months, whether these guys are have ramped unable to sell or not.

Jason Schwartz: And as Ors mentioned, the inside sales team, you actually see relatively quickly over the first couple of months, whether these guys are ramped and able to sell or not. And we're very encouraged by that. And then looking at the pipeline that we have, we think, and we've said, I think, now both in the letter and in Ors' comments, is that we expect, you know, 80% of all of the new heads that we, people that we added to the team to be ramped up by Q3. And that gives us, you know, a lot of confidence that if for some reason this is not gonna be in place, we'll be able to reduce unproductive capacity and continue to execute.

Speaker Change: And we're very encouraged by that.

Speaker Change: And then looking at the at the pipeline that we have we think and we've we've said I think now both in the letter and in our comments is that we expect you know eight.

Speaker Change: 80% of all of the new heads that we are people that we added to the team to be ramped up by Q3.

Speaker Change: And that gives us a lot of confidence that if for some reason this is not going to be in place we'll be able to.

Speaker Change: To reduce them.

Speaker Change: Productive capacity and continue to to to execute it.

Jason Schwartz: It's very similar to the change that we did taking, you know, sales and marketing. If you look back historically, sales and marketing was about, you know, 65, 66% of revenue going back to Q1, 2022. And over the course of five, six quarters, it got down to below 50%. And that was just taking out unproductive, you know, resources and still driving revenue growth. And so we believe that the hires that we did should be accelerators on the back end of the year going into 26th. And that's what we're continuing. Okay, great.

Speaker Change: It's very similar to the the change that we did.

Speaker Change: Taking.

Speaker Change: Sales and marketing if you look back historically on sales and marketing was about.

Speaker Change: 65, 66% of revenue going back to Q1, 2022 and over the course of <unk>.

Speaker Change: Five six quarters, it got down to below 50% and that was just taking out unproductive.

Speaker Change: Resources, and still driving revenue growth and so we believe that the the hires that we did should be accelerators on the back ended the year and going into 'twenty six.

Speaker Change: And that's what we're continuing to do.

Speaker Change: Okay, great Yeah, I appreciate the color there.

Luke Horton: Yeah, I appreciate the color there.

Jason Schwartz: And then just one last one here, just on the 2025 outlook, is this still accounting for that 1% to 2% foreign exchange headwinder revenues? Or has that assumption changed at all here as we kind of got through the quarter? We haven't changed any of our assumptions. We as I think we're all seeing that things keep on has has volatility, day by day. And we're gonna stay with that, that, you know, that guidance that we that the assumptions that we used in building our, our guidance at the beginning. Okay, got it. Awesome.

Speaker Change: And then just one last one here just on the 2025 outlook is this still accounting for that 1% to 2% foreign exchange headwind to revenues or has that assumption changed at all here as we kind of got through the quarter.

We haven't changed any of our assumptions, we as I think we're all seeing that things spun.

Speaker Change: <unk> has volatility.

Speaker Change: Day by day, and we're going to stay with that.

Speaker Change: That guidance that we that the.

Speaker Change: Assumptions that we used in building our guidance at the beginning of the year.

Speaker Change: Okay got it awesome. Thanks for taking the question with yes.

Luke Horton: Thanks for taking the questions.

Speaker Change: Thank you. Our next question comes from the line of Adam <unk> with Goldman Sachs. Please proceed with your question.

Adam Hotchkiss: Our next question comes from the line of Adam Hotchkiss with Golden Sacks. Please proceed with your question. Great. Thanks for taking the questions. Or just a high-level question for you.

Speaker Change: Great. Thanks for taking the questions or just a high level question for you what in your mind is the most important execution item for you this year or whether that's ramping salespeople accelerating pro selling new products innovating the platform or is it something else and then what do you need to see to validate the vision that you've laid out through doubling down.

Adam Hotchkiss: What in your mind is the most important execution item for you this year, whether that's ramping salespeople, accelerating growth, selling new products, innovating the platform, or is it something else? And then what do you need to see to validate the vision that you've laid out through doubling down on investment that you did earlier this year? Thank you for the question. I think if I had to choose one that I think can generate the most impact is to drive the upsell enterprise motion. We've been lucky to have more than a thousand plus an amazing enterprise that engage in our customers that buy one or two solutions.

Speaker Change: On investment that you did earlier this year. Thanks, so much.

Speaker Change: And thank you for the question and I think if I had to choose one that they've seen can generate the most impact is to drive upsell enterprise motion, we've been lucky to have more than a thousand plus an amazing enterprise that's engage in our customer.

Speaker Change: Erez.

Speaker Change: Buying one or two solution and today we have.

Or Offer: Today, we have at least seven or eight different solutions to offer them that can really help and drive ROI for them. I see a huge opportunity to drive more expansion on the book of business and this is something that I'm excited about. I feel that if I will crack that to get top-notch, it will drive a lot of impact. Also, if you think AM enterprise, it's the function that has the most in this commercial organization. If I were able to take this organization and make them overperform, it's going to drive a lot of impact. Okay, great.

Speaker Change: We placed seven eight different solution to offer them that can really help them drive.

Speaker Change: Oh why for them, so I see huge opportunity to drive more suspension on the book of business.

Speaker Change: And this is something that I'm excited about and I see it.

Speaker Change: And that if I am.

Speaker Change: Correct that to get topnotch. It soon drive a lot of impact also if you think and enterprise function that has the most.

Speaker Change: This commercial organization, let's say, we'd like to take this organization and make them over performance come out do I have not been picked.

Speaker Change: Okay, Great. That's helpful. And then I know you've mentioned it a lot in the past it didn't hear it as much on this call just your updated view of the data as a service and broader large language model or small language model opportunity, maybe how that progressed in Q1 relative to your expectations. Thanks.

Or Offer: That's helpful. And then I know you've mentioned it a lot in the past. I didn't hear it as much on this call.

Or Offer: Just your updated view of the data as a service and broader large language model or small language model opportunity, maybe how that progressed in Q1 relative to your expectations. Thanks. Yeah, so those motions are very successful. Internally, I think in the data as a service, you know, we have an OEM team that sells our data to other software vendors that use our data to improve the offering. This team is working and highly successful, and we're seeing a lot of from a new vertical of software companies that want to give insight on chatbots and Gen AI.

Speaker Change: Yeah. So those motion a very successful internally I think and then data as a service center, we have an OEM team.

Speaker Change: The sales arent that that tool other softball, then those dates.

Speaker Change: He was a that's a to improve the offering this seems to be rocking and highly successful and we're seeing a lot of demand for the new VLT Carlo.

Speaker Change: [laughter] software company that wanted to give you insight on chit chat boats and Jenny I. So this is a nice opportunity and also around everything about chip chip.

Adam Hotchkiss: So this is a nice opportunity. And also around everything about chat AI data. So it's a hot topic, drive nice revenue. So it did perform very well this quarter. Great, thank you very much.

Speaker Change: <unk> dot them so it's.

Speaker Change: So hot topics drive nice revenue so it didn't perform very well this quarter.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you our.

Patrick Walravens: Our next question comes from the line of Patrick Walravens with Citizens. Please proceed with your question. Great, thank you.

Speaker Change: Our next question comes from the line of Patrick Law reasons with citizens. Please proceed with your question.

Speaker Change: Great. Thank you this is Austin KOL on for Pat Walraven.

Patrick Walravens: This is Austin Colon for Pat Walravens. Or I just wanted to go back to the AI chatbot traffic product. This kind of idea of visibility into Gen AI output is something you guys have talked about as an opportunity for a while now. So now that you have this kind of product offering, maybe you could comment just specifically on kind of what you're seeing in terms of engagement from customers and specifically on the pipeline as it relates to that product, and then how does that kind of inform your idea of the total opportunity there? Yes, I think it's a great question.

Speaker Change: I just wanted to go back to the AI chat Bot a.

Speaker Change: Traffic product.

Speaker Change: This kind of idea of visibility into Ginnie output is something you guys have talked about as an opportunity for for a while now and that now that you have this kind of product offering.

Speaker Change: Maybe you could comment specifically on kind of what youre seeing in terms of engagement from customers and specifically on the pipeline as it relates to that product and then how does that kind of inform your idea of the total opportunity there.

Speaker Change: Yeah, I think it's a it's a great question. So the opportunity I think that is a complete opportunity is once we again are they fill up the second part of the a offering is to help you measure and Youll marketshare and visibility on the CIT books.

Or Offer: So the opportunity, I think that is the complete opportunity is once we're going to develop the second part of the AI offering is to help you measure your market share and visibility on the chatbot. because if you think that out of, I will say, let's say a million people that's using chatbots to ask questions about running shoes and the chatbots, you know, give them answers about five, ten brands, very, very small part are clicking and getting out of the chatbots. and the majority are staying there or doing something else. So I think the second part that we're going to introduce this quarter giving you more visibility about how much time you appear and the sentiment when we can develop that and combine that with the traffic then we will have a very strong proposition and we will start monetizing it as a standalone module.

Speaker Change: Because this is seeing condense out of I wouldn't say, that's a million people using chegg vote.

Speaker Change: I'll ask questions about running shoes.

Speaker Change: And the check books, you know give them in sales about 510 brands very very small pilots are clicking and getting out of their checkbooks.

Speaker Change: And the majority of those things or doing something else. So I think the second filed this weekend I introduced this quarter and I'm, giving you more visibility about how much time, you have pillar and the sentiment when we can develop that and combined it with the traffic then we wouldn't have a.

Speaker Change: Very strong proposition and we will start monetizing it as a standalone man model.

Or Offer: Right now we opened Traffic Gen AI as a beta to our paying yearly customers. and to, you know, to see the reaction and drive engagement and ROI. We didn't start monetizing it and but it did help to convert. A lot of no-touch customers paying with credit cards, they didn't have access to that model. So releasing this model really helped convert a lot of leads or credit card customers to yearly. So this is when we saw a dollar impact. But I assume that this quarter, after we launch the second part and start charging all these models, it will have a bigger impact.

Speaker Change: Right now, we opened traffic and Jenny I is it better to our.

Speaker Change: Usually customers.

Speaker Change: And to you know to see their reaction and drive engagement in our lives Steven start monetizing it and but it did help to convert.

Speaker Change: A lot of no touch customer thing with could because they didn't have access to multiple so really think this is more than it really help convince about those and.

Speaker Change: And leaves or could it called customer three yearly. So this is a new song and dollar impact, but I assume that this quarter. After we launched a second thought and stopped charging hold even more than it would have a bigger impact.

Jason Schwartz: Okay, that's super helpful.

Speaker Change: Okay. That's super helpful. And then and then maybe one for Jason I had the same kind of question regarding what you said in your prepared remarks around the investments maybe just to put a point on it it doesn't sound like it but I just wanted to clarify that there there isn't anything in the pipeline today.

Jason Schwartz: And then maybe one for Jason. I had the same kind of question regarding what you said in your prepared remarks around the investments. Maybe just to put a point on it.

Jason Schwartz: It doesn't sound like it, but I just want to clarify that there isn't anything in the pipeline today that makes you think that you would need to make that change regarding investment. No, there's nothing that we see today. And this was just a comment that sentiment that we had felt from a number of investors over the last couple of months, and we wanted to make sure that we clarify.

Speaker Change: Hey.

Speaker Change: That makes you think that you would need to make that change regarding investments.

Speaker Change: No there's nothing that we see today and this was just.

Speaker Change: A comment that sentiment that we had from a number of investors over the last couple of months and we wanted to make sure that we clarify that.

Jason Schwartz: Okay. Appreciate it. Very clear. Thank you.

Speaker Change: Okay. Appreciate it very clear thank you.

Speaker Change: Yes.

Scott Berg: Our next question comes from the line of Scott Berg with Needham and Company. Please proceed with your question. Hi, everyone. Thanks for taking my questions.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Scott Berg with Needham <unk> Company. Please proceed with your question.

Scott Berg: Hi, everyone. Thanks for taking my questions.

Scott Berg: I appreciate the comments on pipeline activity with the ramp and sales reps, but how is expansion activity going? You know, if I look at your customer additions over the last year, it looks like they're coming in at a slightly lower maybe rate than some of your historical customers, but you've already had, at least historically, had a good opportunity to expand with customers over time. But how is that kind of process going in this macro? Are you seeing any changes to, you know, what that cadence looks like? You have any commentary?

Scott Berg: I appreciate the comments on pipeline activity with the ramp in sales reps, but.

Scott Berg: How is the expansion activity going if I look at your customer additions over the last year. It looks like you're coming in at a slightly lower maybe rates in some of your historical customers, but you've already had it at least historically had a good opportunity to expand with customers over time, but how is that kind of process going in this macro or are you seeing any changes to you know.

Scott Berg: What that cadence looks like you have any commentary there would be helpful.

Scott Berg: Thanks.

Jason Schwartz: Hey, Scott, it's Jason. A couple of things on that, we mentioned that, you know, we're seeing actually good, healthy, you know, pipeline build over here. We see, you know, bigger, the NRR numbers are actually, you know, reflecting, as we mentioned earlier, some of the, you know, hurdles that we set last year with some big sales and upsells that we had. But we had some good experience this quarter, and one thing that I think stands out to me was a large U.S. retailer. who became a customer in 2023. It's a Fortune 500 U.S. retailer who purchased web intelligence for their SEO and performance team going back in in 2023, really to understand, I don't know, you know, standard, you know, voice and content strategies, the classic, what I would call the classic keyword use case, they were a $100,000 customer back in 2023.

Jason Schwartz: Hey, Scott it's Jason.

Scott Berg: Okay.

Scott Berg: A couple of things on that we mentioned that.

Scott Berg: We are seeing actually good healthy.

Scott Berg: Pipeline builds over here.

Scott Berg: We see bigger they enter our numbers are actually.

Scott Berg: Reflecting as we mentioned earlier.

Scott Berg: Some of the debt.

Scott Berg: Hurdles that we set last year with some big sales and up sells that we had but we had some some good experience this quarter I mean, one thing that.

Scott Berg: It stands out to me was a a large U S retailer.

Scott Berg: Who became a customer in 2023, it's a yeah, a fortune 500 U S retailer.

Scott Berg: The purchase web intelligence for their SCO performance team going back in in 2023 really to understand.

Scott Berg: Standard voice and content strategies, the classic what do I would call. The classic keyword use case, they were a $100000 customer back in 2023.

Jason Schwartz: In Q1, they expanded to the Category Management Team and Ecommerce Merchandising Team. So they went from the Marketing Team to the Category Management Team and the Ecommerce Merchandising Team to really understand, you know, to build out the custom segments and understand the category performance versus their competitors. And then also, bought Shopper Intelligence to look at the product level performance on Amazon versus their competitors. That customer now, that upsell that they did, that customer has grown 4x in just two years. And again, as an example of the kinds of value that a large retailer could see and grow, it's something that's very encouraging to us.

Scott Berg: In Q1, they expanded to the category management team and ecommerce merchandising team. So they went from the marketing team to the category management team and the E. Commerce merchandising team to really understand you have to build out the custom segments and understand the category performance versus <unk>.

Scott Berg: Competitors and then also.

Scott Berg: Bought shopper intelligence to understand to look at the product level performance on Amazon versus their competitors that customer now that upsell that they did.

Scott Berg: That customer has grown four acts in in just two years and again as a as an example of the kind of value that a large retailer.

Scott Berg: Could see and grow it's it's it's something that's very encouraging to us.

Jason Schwartz: And we're looking forward, as Or said, to see more and more of these upsells with the portfolio of products that we have over the remainder of the year. Helpful.

Scott Berg: And we're looking forward as the ore fed to see more and more of these upsells with the portfolio of customers our portfolio of products that we have over the remainder of the year.

Speaker Change: Helpful. Thanks, Jason and then.

Jason Schwartz: And then I heard there's no real impact and guidance with your acquisition of the Search Monitor.

Speaker Change: I heard there's no real impact in guidance with your acquisition of the search monitor, but how do we think about that impacting your product platform.

Or Offer: But how do we think about that impacting your product platform kind of going forward? Yeah, thank you. So we're very excited about this opportunity and this acquisition, because Search Monitor has, I would say, two main use cases that we are not strong. One is to help PPC team pay the acquisition at Search. to save money on their brain protection budget. And many brands right now spending millions, if not tens of millions of dollars on protecting their brand in Google. We know we have some of our customers in the insurance vertical, banks, CPG that literally spend tens of millions of dollars monthly to protect their brand and they need to do it sometimes worldwide in many different countries.

Speaker Change: Yeah.

Speaker Change: Yeah. Thank you so well we were very excited about this opportunity in this acquisition.

Speaker Change: <unk> fell to only till I have.

Speaker Change: I'd say two main a use case and that we are not stronger one is to help the PTC team of paid acquisition expense.

Speaker Change: To save money on the brand protection and budget.

Speaker Change: Many brands right now spending millions if not tens of millions of doing all on protecting their brands and Google We know we have.

Speaker Change: Some of our customers into insurance ability come banks CPG that literally spent tens of millions of dollars monthly to protect their brand and they need to do it sometimes worldwide and many different countries. So they need a tool to monitor all where they should spend more where they can spend.

Or Offer: So they need a tool to monitor where they should spend more, where they can spend less. So this tool is very sticky and very ROI driven. We can think that we will take this offering now with our current book of business. We can really show great ROI for those PPC paid search teams. The second part they have is for an affiliate team to help monitor the affiliate program to see that the affiliates they're bringing on board to promote their products are not are compliant with the guidelines they put for those affiliated, not started. putting ads on their brand names.

Speaker Change: Yes. So this tool is very sticky and very Allied to me then.

Speaker Change: And I.

Speaker Change: I think that we would take would be suffering now with our current book of business, We can really show great ally.

Speaker Change: And for those BPC paid search teams.

Speaker Change: The second pump they have either foreign affiliates team and to help monitor or the city is program to see that's the affiliates to bringing onboard.

Speaker Change: And to promote their products or not.

Speaker Change: Our compliance with the guidelines they put for those you'll see data not stopped.

Speaker Change: Putting ads on the brand name.

Or Offer: So those are two strong use cases with very clear ROI, very sticky, very operational offering that can fit perfectly with our assets and our market data. So combining our market data with their stickiness workflow tools can be very powerful.

Speaker Change: So those are two strong use case with very clear goals align very sticky very operational offering they can fit perfectly with our assets and our market data so combining our market data there.

Speaker Change: And stickiness and workflow tools can be very powerful and so hopefully.

Or Offer: And so hopefully we integrate them and maybe Q4, Q1, we're gonna roll out and those new offerings to our existing local business.

Speaker Change: We integrate them and maybe Q4, Q1, and we can or rolled out and those new offering into our existing book of business.

Rami Myerson: Thank you.

Speaker Change: Thank you.

Or Offer: We have reached the end of the question and answer session, and I'd like to turn the floor back to CEO Or Offer for closing remarks. Thank you, everyone. We're super excited for this quarter and this year, and I want to thank you, everyone, for joining the call, especially our shareholder, for their confidence, and we look forward to speaking with all of you in the next few weeks. Thank you so much. Thank you, ladies and gentlemen.

Speaker Change: We have reached the end of the question and answer session and I would like to turn the floor back to our CEO or offer a few closing remarks.

Speaker Change: Well. Thank you everyone. We're super excited for.

Well the pool this quarter and this year and I want to thank you everyone for joining the call, especially on sell wholesale for their confidence and we look forward to speaking with all of you in the next few weeks. Thank you so much.

Speaker Change: Thank you ladies and gentlemen. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.

Operator: This concludes today's teleconference. You may disconnect your line at this time. Thank you for your participation and have a great day.

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Operator: https://www.youtube.com https://www.youtube.com http://www.youtube.com.au https://www.youtube.com.au http://www.youtube.com.uk Thanks for watching! https://www.youtube.com

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Yeah.

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Speaker Change: Okay.

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Speaker Change: Mhm.

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Yeah.

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