Q2 2019 Earnings Call
Welcome to the nice comfort thing coal discussing second quarter to 2019 result, and thank you all for holding.
All participants are at present in a listen only mode. Following management's formal presentation instructions will be given for the question and answer session.
As a reminder, this conference is being recorded August the 820 19, I would now like to turn this call over I missed the Marty Cohen VP Investor Relations at Nice. Please go ahead.
Thank you operator with me on the call today are lumpy along.
Chief Executive Officer.
That's true financial officer, and around their own executive Vice President marketing and corporate development.
Before we start I'd like for job at some of the statements made on this call constitute forward looking statements in accordance with the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Please be advised the company's actual results could differ materially from these forward looking statements.
Additional information regarding the factors that cause actual results actual results performance or the coffee differ materially.
<unk> <unk> central China, which factors in the other three copies to South you can report.
On form 20-F as filed with Securities and Exchange Commission on April 1st Yourselves and I'd say.
During today's call, we will present, a more detailed discussion of second quarter 2013 results. The companys guidance for the third quarter for your 2019.
Although college, so there will be an opportunity for questions.
Let me remind you that unless otherwise noted on this call we will be college in our adjusted results of operations, which differ in certain not reception generally accounts generally accepted accounting principles.
That's your second maybe a charge for acquisition related debt.
Expenses amortization of intangible assets and accounting for stock based compensation.
The differences between the non-GAAP of jokes to resolve some of the equivalent GAAP figures are detailed in the search social apps and I'll turn the call.
Thank you Mark good luck on another one and this would be on the call with me today.
<unk> <unk> <unk> or another strong quarter across the board, including all key financial metrics.
Total revenue increased 11% to $381 million driven by another strong quarter in both product and cloud revenue.
Cost of revenue increased 25% and cloud revenue grew 30% in Q2.
The strong top line results lets to steadily increase in profitability.
Operating income was one of the $1 billion, which was an increased 14% compared to Q2 last year.
Operating margin increased 74 basis points to 26.6%.
Back to the secured last year.
These strong operating results led to a 14% increase in earnings per share to $1.25.
Our success continues to be driven by an acceleration in cloud analytics and they are.
The cloud will was very strong in both customer engagement and financial crime and compliance.
And is being fueled by bike penetrate from basing it on to all segments of the market, including large enterprises for we have witnessed a Boston men are strong coal.
Meanwhile, we're seeing significant expansion football partnerships around the globe.
At the same time, we're getting an acute focus on product innovation.
It's a long continues to drive the success of all cloud business.
Fix long of unique in W.P., the first and only true native cloud platform.
With me incorporated the Mifid golf incorporates a market, leading omni children rollicking workforce optimization analytics interesting good thoughtful.
Last quarter, we announced the acquisition of a friend embassy.
Which provides significant extension to six was that makes it the most comprehensive platform for digital transformation and customer service.
In the offering has only been launched to the market.
We continue to sign any new cloud customers across multiple segments of the market, including some very large enterprises.
The deal included an eight digit hates if anything within financial services company, which was an end to end and placement of <unk> on for EMS providers.
We also signed multiple 617 digit incident.
For example, we closed the deal with the brokerage and investment Advisory Company would you in your cost of goods and a competitive replacements.
We signed a deal with one of the Logisticare I don't know if they can get kids and their relationship.
It was another thing, which can have an energy company, okay, new customer and a competitor to pay someone is willing an extension with the state government agency, where we placed in Compton.
Excite drove meaningful cloud woeful financial crime and compliance.
Well I'll jump in the quarter fall essential to cloud based solutions, including the deal but did you talk about the Canadian based credit Union and European based bank specializing in small business lending and lending online brokerage field.
Well I'm not going to success, if okay I'll go into a significant expansion of our ecosystem of partners. Once you dig through our extensive portfolio of solutions and the large and increasing total addressable markets in which we operate.
One example is our fixed one called ecosystem for <unk>, <unk> and <unk> James pool.
We now have 135 partners.
Building on the possible.
This extensive network provide what customer.
So let's use options.
At the same time.
Well thought through and be able to significantly expand their go to market and provides us an excellent vehicle for emanate similar toric ICL visual brand name to see which was a dead one policy.
We also have many successful go to market partnerships with various you got provider so called another et cetera, but that allows us to Chicago this fast growing market.
Yeah drugs continues to close so to the extent any amount they'll go to make a good thing about partnership strategy with the recent announcement.
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A global leader in digital transformation with all the hotter than 10000 employees in 73 countries.
They go through that doctors, making six long first solution for contact center as a service and bringing six walk into companies installed base hundreds of thousands of contact center agents cool [laughter] across the globe as well as to new customers.
Well, that's the largest global brands and we're excited about the potential to bring six want new customers around the globe, especially in Europe as well as if it was very large customer base.
This is a great opportunity to execute on our thoughts just thinking of going six won in international markets.
We also recently announced an extended called Richmond, Microsoft.
We introduced new integration with Microsoft teams, which is further enabling organizations to airports as we collaborate with the contact center.
Similar to fit to the six one marketplace, we announced the excitement.
It just gives birth pronounced supply management folks marketplace.
It's dark market based initial solutions category includes I'd verification ultimately beneficial ownership value added data in a burst media watch list, if I said investigation and user authentication and fraud.
Since the announcement of the New York fight marketplace less than two months ago more than 20 solution providers in order to be signed off.
Including especially at least in cyber security and provided what's unique like Germany, because people buy a metric for onboarding and the provital known for its high powered <unk> management <unk> content. So the content solutions.
It's always partnering we also continue to accelerate innovation.
Especially around in the <unk> and <unk>.
Okay, well, we're seeing strong growth in baseball season market.
So get released a new version of RP.
This latest Berger.
Incorporates degree I capabilities for extended automation discovery and real time monitoring intelligence.
You bet.
Nice Okay was named in either the <unk> group speaks metrics for the second consecutive year, scoring high on both Verizon and capability and market being Bucks.
The most recent release of stick Swan and end to end artificial intelligence capabilities.
Included Oh, New self service, both options, New Hey, I think if you're focusing on scheduling of options and they have a high powered into watching on Linux.
We've also added predictive behavioral routing for six one.
Moreover, fix will now provide additional debt some bread CRM integration.
When you bring a more personalized customer experience.
Another example of innovation, including the introduction of optimized T.D.V.
Which more than I do okay, Wakefield and did a deep problem with it that's something you think the power failure.
No I talked in my opinion, yet leveraging oxy might watch to apply machine learning to enhance the acres if risk rating.
Using the collective instead of just a few good outcomes.
Significant reduction in operational costs are realizing what innovate innovative use of consolidation and purpose build intelligence information to streamline customer of your time, but obviously, 70%.
In Q2, we Cook and just sunk they book seven digit deal incorporating carping gauge of everything including too loud dealing with health care companies have been killed it on analytics Bard compliance and looked at <unk>.
Did you include it maybe up including many other during the quarter were competitive replacements.
We also signed a seven digit deal.
A major cost us all for a portfolio of all financial crime and compliance solutions.
In a seven digit doing some news you'll get answers to the insurance and health care, That's still Jones company owning through Optionality.
He's company, it's already a fixed on customer and didn't do demonstrate the value of a customer the ability to extend on our platform.
We also find that they did I noted that they were one of the largest cruise line in the war.
In closing we are the market, leading technology is driven by ongoing innovation group of foundry market differentiating clot thoughts on what sticks Wunderlich side.
Well go to market, you will find and supports clock direct salesforce installed and extended partnership.
We are only just beginning these assets well this or not they will capture the many growth opportunities ahead.
And then the rest of the market $7 billion going to over $12 billion over the next few years.
I will now turn call over the call over to Beth Lilly view, our financial results.
Thank you <unk> and good day, everyone I'm pleased to provide the analysis of our financial results and business performance for the second quarter of 2019 as well as our outlook for the third quarter and full year 2019.
Total revenue for the second quarter increased 11% to $381 million compared to $344 million in the same period of last year.
Our total revenue growth was driven by further growth in the crowd with 30% cloud growth in the second quarter of 2019, as well as an increase of 25% of revenue.
Our hypothesis is that recurring revenue continues to increase to 72% of total revenue, reflecting our strong cloud momentum.
As we highlighted last quarter, our recurring revenue has grown to become a much larger portion of our total revenue.
Where we expect both our revenue and our profitability to be more evenly distributed among the quarters. This year.
We also witnessed double digit growth in both of our businesses customer engagement revenue for the second quarter increased 11% to $313 million and represented 82% of our total revenues.
Financial crime and compliance revenues increased 10% to $68 million and represented 18% of total revenues.
Product revenues accounted for 16% of total revenue in the second quarter.
Cloud revenues accounted for 38% of total revenue for the second quarter, which represents an increase from 32% in Q2 last year and services revenue accounted for the remaining 46% of total revenue in the second quarter of 2019.
Looking at geography, Americas reached $307 million in the second quarter, EMEA $48 million and $826 million in the second quarter of 2019.
And now to profitability.
Gross profit increased 12%.
$271 million in the second quarter gross profit margin improved to 70.9% compared to 17.5% last year.
The expansion in gross margin is a result of product mix.
Cloud gross margin increased to 61.4% from 59.8% in Q1 2019.
Operating income increased 14% to $101 million in the second quarter.
Operating margin increased significantly to 26.6% compared to 25.8% and the same period of last year.
The strong operating income and margin demonstrates the leverage in our model and our commitment to continue to expand profitability overtime.
Earnings per share for the second quarter increased 14% to $1.25 cents compared to one dollar and 10 cents in the second quarter of last year.
Total cash and financial investments were $867 million at the end of June 29 team and total debt was $460 million not issuing any equity component associated with our convertible debt.
I will conclude my remarks with our guidance.
Well the third quarter of 2019, we expect total revenue to be in a range of $380 million to $390 million.
We expect third quarter 2019 fully diluted earnings per share to be in a range of one dollar and 23 cents.
Your one dollar and 33.
We are increasing full year 29 key revenue being an expected range of 1 billion and 563 million 1 billion and $583 million.
We are increasing full year 2019 fully diluted earnings per share to be in an expected range of $5.13 the $5 and 33.
I will now turn the call over to the operator for questions operator.
Thank you everyone wishing to ask any questions. It is nice star one on your phone and the first question we have from the line of.
How eyal from Oppenheimer and Kaiser Thank you Sally alive and nickel.
Thank you so much good afternoon, guys. Congrats on the performance and the outlook Barack <unk> the number of sort of an eight digit transaction keeps showing healthy momentum, but it's actually coming also from cloud data transaction. So I don't know I think that it would appear that the prior view couple of years back was that cloud contracts are probably on a smaller scale, but you are actually showing that the opposite and it's not only on the X one, but I don't want to quite as well. So help us reconcile. This view is a rapid cloud adoption. It did that enterprises are showing increased red in the adult talk solutions or is it a improved PCL.
And I have a follow up.
So thanks for the.
Thanks for the question did I think that you can see a growing trend you know.
Last two quarters and this quarter and it's even more so a ball game both in number as well as the magnitude in terms of size of all cloud do they spoke about an eight figure ACB deal in multiple.
It looks like your ACB deals in the cloud.
And I think that there isn't for Doc is Oh, you few reasons first of all the market adoption at the higher end of the market spoke loud.
Is growing dramatically and we believe that's the thinking.
I think a big share of stock. So you have the first one is the adoption.
The second thing I would say, it's a combination of two things first of all.
Taxes, you're selling are much more portfolio deals the figure that the nicest, let's call. It a very complete we've both been six won an excited because it's an opportunity.
In much larger deals with much more components.
And we believe that the market is buying into our vision and strategy that makes much more sense.
To go off to the integrated set of solutions that we have given the steps that you've taken as a company.
The second thing is that the fact that this is a platform it's much easier to consume it and people are investing into the platform as a result of that we see much larger deals in March.
So on their long term and loud your commitments from customers.
And third it seems that there is a much more open sort of innovation all customers.
The box to loosen so are there any real native cloud solution versus some of what our competitors or came out with the fed might cloud hosting solution and I'll go into the old finding.
Cloud like all semiclassical founder financials, as well as the market and the market just doesn't bodies and the things that you can see in the multiple competitors people taking on that thought I mentioned doesn't go onto it obviously mobs.
Understood understood and I have a follow up on them and maybe also the romley growing we would like to comment on it. So yeah last night, we've all read about the acquisition of Clicksoftware like Salesforce.
Most of you know the inside out of click a we know with like history. We also know that people that San Francisco pocket, some of which come with its strong that night.
And I'm not suggesting you know click is it the competitors go to you guys, but it has been blamed some adjacent feet, though you know one of the workforce optimization front.
My question is what are you seeing happening strategically in this place is that the big CRM guys are beginning to wake up and realize the benefit Oh, Wow, what will supplementation cloud related capabilities.
Yeah, we we sold in the Middle East do you want to know personally we know the company <unk> telephone declawed.
Dan.
In very remote area to ups were doing bill or is that an open the file and much more of a walk from two mutations loyal fans before.
They are different than what we are doing we are not.
No competing in most global shipping with them.
So I don't think it has a implication on our specific domain.
There is something that just a thing between CRM and softer I think they even had focus if you play.
Well I assume its make a it makes sense for California, but I, it's hard for me to fill the related does that go to do.
So there are multiple to what we're doing as a company.
Thank you very much.
Good luck.
Thanks.
Thank you and your next question is night from John Difucci from Jefferies. Thank you John Your line.
Thank you I have a question I think the first one's for Bracken bat and then maybe a follow up for Beth. So the product was strong again this quarter and I don't I know.
That's you're just going to say, we shouldn't they be that'll be minimal around a lot from quarter to quarter, but I assume that the maintenance is also strong again this quarter and I just want to verify that and and if if so I think that implies a pro services was relatively weak in the quarter at least weaker than what we were looking for and if that's the case was it simply a difficult comp, which it was or Barack mentioned does there's a show little said all those students.
Large deals, but also in the press release, you mentioned day toes.
And I think you might have said in the prepared remarks.
Should we perhaps expect more of this going forward as you move pro services more to partners. If if that's what's happening.
So John I'll take this to begin with but I think I'll highlight a few of the comments that you made first starting with the product grows and you highlighted I have mentioned on several occasions that we should expect to see a variability and the product revenue and of course, we're very pleased with the revenue growth we've seen in our product revenue in the first half of this year, 25% in the most recent quarter and you know I think its a further evidence is really that as we've said all along they'd be a cloud revenue that we're bringing is really incremental to our business and so you will continue to see a strong growth quarters, but at the same time have some variability as you look on the services for this specific quarter. Our maintenance is consistent and we have a healthy retention of our maintenance business and if you look specifically on a Q2 of last year, you'll see that.
We actually experienced a 13% growth and then in the second quarter of 2018 and that was related to our professional services that where are we I had a.
Specific milestones were able to watch a recognized during that quarter. So it was a difficult comparison in comparison.
Okay. Okay, great. Thank you Beth.
It maybe bracket should we start to see I guess, you did mentioned DHS partnership in the press release should we start to see.
Yes, perhaps more of that that professional services going to partners.
No I I don't think that that will have any meaningful impact on professional services for all fixed.
So that's sort of partnership worth buying like the one with Atlas, which I believe is very strategic won a bronze.
Is that first of all very much of an incremental business.
And even with Dod there will be required to have all professional services already today in our business there was little to Walgreens services. So its not necessarily thinking what we are doing and services.
So I don't see a change some of them onto the result is that the reason why we're finding those all know soup is that the market is growing very very fast in multiple segments.
And we'd like to be able to extend our go to market. We can do it by ourselves to a certain base. If you would like well definitely partnership on helping us to take.
I do have a much better coverage in the market.
Okay, great and if I might just.
So the question for Beth.
The the results looks really good it sounds like you know that.
All the the other anecdotal evidence such sounds great, but there wasn't one of the line items that I know many questions on its cash flow because that was materially below our estimates and it was mainly due to underperformance of the receivables and prepaid expenses and others. So I just want to make sure I understand that.
Given how your model works and you build the CX one monthly in arrears.
And it sounds like you had some a lot of big deals here and Barak mentioned several of them is it fair to assume those deals were back end loaded as large deals typically are so you got little revenue in the quarter and and it doesn't go to deferred revenue with that that business, but you pay commissions up front and even if you recognize commissions overtime.
So I just wanted them because that makes sense to me, but if that's wrong tell me and tell me about what else is happening.
Sure. So things do you actually highlighted several things, which are a true true I think if I just break it down first of all if you recall, we actually had a record cash flow from operations in the first quarter of 182 million and so we decided to take advantage of that strong our cash flow and we entered into several agreements that were a prepaid expenses, where we can lock in discounts and that will allow benefit is really going forward into the future and that combined with the comments you made which is true that we do have commissions, which on these deals. That's a that barack referenced were primarily revenue that you'll see looking forward and they do come with the commission that sometimes there are paid in advance.
Great Great. Thank you nice job.
Thank you and the next one night from Dan <unk> of Wedbush Securities. Thank you Daniela.
[noise], Yeah things sums my question on the fraud detection yeah.
He is just talk about.
Are you still in a few deals sizes more [noise].
Transformational or larger or just the regulatory environment.
So the change is that something where you may be seeing a function.
On that area of the business.
Yeah. Thanks for the question Yeah, we we definitely we definitely see traction.
Over there and the markets continue to be a very attractive.
And with the launch of a couple things first of all to excite.
Is growing our addressable market and so the bloxom, we managed seasonal for existing customers to expand all that footprint.
And go beyond the traditional Oh, well solutions definitely hasn't fraud continues to evolve so that's one element.
Second as I've mentioned he is he a cloud adoption. Similarly to what we have started to say lets say about four years ago, and so what happened years ago.
<unk> on the customer engagement side with a strong demand the thousands of cloud we now see on the Oh actually mines boards, and all financial crime and compliance business.
And we were preferred for Dod and you see a the nice glow also on the cloud indicated part of the business.
Which allow us to bring innovation much faster into the market [laughter] good around the world as you have mentioned.
And the last part is a it's been thinking theyre very similar approach and a very monster in a positive way supply disruption, we launched the exciting marketplace.
Just a month ago and in the course of just two months, we have enough that even then it will depend on the mandan managing two months to sign up more than 20 partners and then I believe this and these will confuse the glow methodically.
Which will allow us to provide much more complete normally seek solutions.
Hello, and innovation in the marketplace a lot as well.
So they are going.
Markets.
With that financial services.
Thanks, Great quarter.
Thank you. Thank you.
Thank you and your next question is from reshape Galleria from D.A. Davidson sank QVC.
Right.
Good handle on progression. Thank you for taking my questions. Today I'm, just first off it sounds like you're getting a lot of new customers on the six one and <unk> platforms. I was wondering if you could talk about what kind of traction you've seen in terms of converting some of your on prem customers to the cloud.
Oh sure so and as you heard from my comments on some of the visible highlighted.
Many of those customers all new customers many of the new customers Oh competitive replacements.
Domino wheel.
Placing a specific competitor and in some places, leaving that we're selling a pretty wide portfolio.
Our customers are absolutely facing civil complaint doors at the same time so Doug.
Many of the things that I've highlighted today on the call.
The same time, we see an extension and migration to the cloud of our own customers in some cases does decide to.
Yeah have some a little bit to listen in on premise and some in the cloud but in other cases, they migrate completely to the cloud when they do that we see a significant decrease oh the annual revenue from such a customer and I think that you can see from our results this quarter and last quarter as well that's why the cloud is going for them is also moving very nicely into right direction.
Great. That's really helpful. And then second I was interested to see you guys recently ranked fourth in terms of our pay revenue by Gartner.
I was wondering if you could talk about if you're seeing any changes on the competitive right there.
So I think I've mentioned, thank you I think I've mentioned in my remarks, I'm Oh, we see a this month, which is a very interesting market a lot of activity within this market. It's a high used for demand to the market with 7000, if not more than double the ears.
And we were very happy to be a rated among the few either a in this market. We believe that we have a very robust technology that allows us to serve not just the classic honest ended onto the market, but much more so than watch most of physical interesting the unattended or all of the markets that ended up sort of part of the markets. We choose we believe the future of this market is heading and indeed, we see a.
Multiple opportunities when we were going to come we far tend to do a boat excel automation a win rate is going to significantly up.
Ah English markets, while it is a very interesting market. It's still it's still in its infancy and there is a tremendous opportunity for us in this market.
Great. Thank you.
Okay. Thank you and your next question now from Paul Coster JP Morgan. Thank you Paul.
Yes. Thank you. Thanks for taking my question Barack Good couple of strategic questions. One is if you look at the geographic mix for a company that's been around a long time. It really does feel very heavily skewed towards the Americas I'm. Just wondering oh why is that and what do you think you did you did you feel like there is no growth or accessible to in EMEA and Asia Pac and when do you start ramping up new organizations across most regions you any comments from a geographic mix would be helpful. Thanks.
Sure and Japan, a and you can see folks and answer them, but they didn't change dramatically. We will vary a U.S. centric and Venezuela very strong believer that the hallmark at the you look tomorrow. It presented great opportunity. Both historically is also well into the future.
Yes international market that provides a tremendous opportunity as well and indeed, we have started to invest more in a very specific areas of international markets.
The announcement of the Atlas relationship by the way, it's part of that strategy at the slightly operate globally, the biggest president and where they have the majority of their customer base.
And we'll go to mountain airports and the different assets that they have are in Europe .
So that's just one example, but I believe that you will see in the near future and more and more Oh the announcement in activities. That's relevant internationally, which will eventually we believe will allow us to sell those two dollarstwo in international markets.
Got it.
It makes sense and then the other question.
Is that you know I think historically the firm is really sort of appeals to learn the business buyers are and it seems to me, though that your something a little bit of component technologies robotic process automation analytics and so on the much talked to more broadly onions price I T cons to it. So I guess question is are you seeing any change in the the sort of mix. The demographics of your buyers. So you are you starting to appeal twins, probably so I see a directly.
Yeah. So first of all we have.
You know we operate in different solution, but we know very well defined and large market.
We have a variety of buyers to our solution I think you characterized it correctly.
Buyers, though you start working more on the operational side, but as we have all the Oh 10 years with much more analytics, AI and a much broader platform, which becoming more strategically we find ourselves more often than not.
Ah failing to first.
Broader than just those that buyers are both saw most strategically tea and strategic business, but also going much more of the chain is becoming now almost a daily habit, a we'd be happy to follow suit seamless myself or senior leadership.
To have a a casual conversations and business conversation, we still live in executive are among the largest.
Fortune 500 company out there so I think that the evolution of the company and especially the thing that we've done or do think a lot of analytics and AI into our platform and all the superiority of our cloud solution I think position us well.
So much higher gene into large enterprises.
All right. Thank you.
Thank you and your next question. Thank you for saying, sorry, Sanjit Singh from Morgan Stanley . Thank you Sanjay.
Thank you and thank you for taking the question I'm Lucky I wanted to revisit some of the themes around analyst day, and particularly the five year target around cloud.
Look at the Great progress this year, you're at 38% of revenue from cloud when the product that is also growing really strong and I think that's the mix is up about.
Good point year on year. So just wanted to get a sense. It seems like cloud is progressing a lot faster and so.
Do you think that we're going to cross that 50% threshold earlier than you expected and what what do you think that would imply in terms of the overall growth rate of the company. Thank you.
Thanks for the thanks for the question.
We are very and every time, we try to give a not just the quarterly result are not just a specific guidance for the year when when we can and it's a right thing to do we also provide some more visionary and most strategic goals. We've done it the back in 14 was Tonight 2020 plan and then following the nice to be and indeed in the analysts the latest on every day, we provided some very I would say even specific.
Naturally and keep your eyes of where we would like to be.
There's a lot of years from now it's been only like I think a quarter tends to be a announce it and things are progressing we believe quite well.
So we all put oh, absolutely a would be very happy to cross those oh PPI much faster than they are.
Horizon on all the time buying definitely game, but I think it's too early for us to update those numbers.
Well, that's a that's for sure but I think we believe the flu or I'll I'll pay school in Queens, We will do that so little if I do like lots of gone.
After 20 protein I think we've done it in 2016. This weekend with my 2020, and we update you are also you know couple of years, if we believe that you're getting into the 2020 goes much faster than we thought.
So we definitely hope so it's too early to provide such an object.
Understood and fair enough and then sticking with some of the themes on analyst day, I think one of the initiatives that you had is moving down market with W.S., though taking 'em WFM and analytics more down market as well as using xsight to 'em extend the reach into into other market. Adjacencies you just got to get a sort of a progress update on those initiatives and you see it thus far this year, what what what sort of early signs you see it with respect to both of those initiatives.
Sure I think that they were very happy with the progress of those two initiatives I'll refer to each one each one of them I think separately.
So the first one is that.
You know, we have a very strong and very healthy market you're in W. full when it goes to the need and the higher end of the mifepristone can we did not pay into lower end of the market.
So you see production of this one which is actually providing under one platform a fully integrated omni Tim in routing analytics and so what we see is a very very very high attachment rate between those three as we go into this segment of the market will increase by the way store to a very strong and feel very strong.
So that is going very well and we've seen that the attachment rate increasing quite dramatically compared to the first day definitely bought in color. So for the first one which is as you said the down market to play for that to flow to ussix long its going very well.
The second one I'm excited I think you can Matt I heard it from my earlier remarks.
Essential element cloud element of FIC side.
The examples that I gave of several customers that weve landed a this quarter, what's exciting potential just one describing those customers didn't give specific names, but I wouldn't consider this is no. The classic very large high end global banks, although we had some business with them as well.
Absolutely so excited to be a center, we've managed to go much lower in the market by the way lower but still a pretty sizable financial services.
Okay. Thank you Brock.
Okay. Thank you and the next one night from Chris Reimer from Barclays. Thank you Chris.
Hi, Thank you for taking my questions could you give some more detail on the partnership with Atos as to what products might be available to them and what kind of customer base. How do you think that will generate.
Oh.
Sure.
So the announcement that Weve made and what you've signed with ethical either partnership around those kicks one and also the very very large and customer base.
And many of those customers, it's not all of them have customer service and a contact center operation today, they have and at those and unified communication a threat of ethylene.
Legacy concepts into on probably meet their solution and basically the filed no. She seems to grow and offer those customers and migration to the cloud contact center customer service assets into a S. T X Y and those are deals that or customer base for many years of solid execution.
And we're talking about an opportunity of hundreds of thousands of a a contact center agents.
And most importantly, as well says a very successful go to market their vehicle for both of them. If all goes well of course, there is still seen at those very large corporation congressmen 10000 employees around the globe.
And this is basically going to serve an extension of very good extension to our own go to market penetrating markets, where we have it you do like prisons or no presence at all.
Understood. Thank you.
And that's just a technical question did you give the number of recurring revenues this quarter your percentage I might have missed it in your comments.
Sure. Thank you, yes, we did give the the recurring revenue you would say continue to increase and this year. It in the second quarter represented 72% of our total revenue.
Okay. Thank you very much.
Thank you.
Thank you and we now have Pat Walravens from JMP Securities. Thank you Pat.
Yeah. This is mark for Pat. Thank you so much for taking my question just regarding to competition I'm just when they see if you've seen any changes I'm, especially around that truly reflects thank you.
No I don't think we were kinda enforced in any change in the competitive landscape. We believe that in both markets, where we operate these are very healthy market that is growing very fast and we believe.
As you heard on all remarks, that's without taking a good share out of the market with a lot of competitive replacements.
I, but I prefer not to that's tied to any specific competitors or the one that you've mentioned, we don't see any any change in in the dynamics in the market.
Okay. Thank you and just one last one for me so just regarding too.
P.A.M. so he sat relatively new technology. So just wondering maybe where do you see the technology at most a value to customers and maybe the technologies that then what would the ramp and that's in lease up to the expectations I'm anything you can share around there. Thank you.
Sure.
So it's Oh this is extremely valuable technology in the sense that ER enterprises today looking on.
Every possible opportunity.
To both the streamline the operation is rather than reducing the costs.
And on T.A. is a classic way and actually the ultimately to do it in a very cost effective way basically taking the mundane tasks.
That said do not necessarily need to do amendments by a human being and take those microprocessors and sometime not football for civil complete end to end processes and ultimately them in a very fast and rapid there when he does the basic bonus if they are technology.
What did you ever listened to proceed in the market that the delta as a market with what we refer to unattended RPH, meaning that the devote operating by itself at the back they can get process without a intervention.
And Doug provided are still some at least of opportunities in the markets. We believe this is a very good and we play in this segment as well.
That's where we see this market evolving lot more certainly into two areas. The first one is about the birth was 10 little information.
As long as you put together the men and women suitable de Minimis rule book and they could change.
Ah works together basically the person a is the one that outsource any who'd like quote unquote walk to the robot and.
Take the best out of those two individual all go to a entity of the whole book and the machine is a more complex operation and you need more a complex technology, but when he talks and talks of course provide tremendous value much more than just attended the honestly into the automation.
The second part is definitely see and we had a lot of.
Hey, I capabilities.
And it into our P. Eight.
We have introduced about a year ago platform called automation finder, which is a fully automated powered by <unk> a vehicle that allows to actually find automation opportunity map them and deploy them and that's something that we see that the we are ahead of the market and I do not have this capability and it gets a lot of traction and it allows us to increase our win rates are quite significantly not just mentioned the last one is the introduction of Nivo.
Which is if you will to assist.
Entity that allows us to older and more easily integrate RMP technology into the workforce in Algeria organization.
Great. Thank you so much.
Thank you.
Thank you that concludes the questions at present, just hand at night to bedrock. Thank you Brett.
Thank you all for joining us today and have a great week. Thank you. Thank you.
Hi, everyone. Thank you that concludes your conference call for today you may now disconnect. Thank you for joining and have a good day.
[noise].
Mm Hmm.