Q1 2020 Earnings Call
The speakers remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press. The pound key. Thank you as a reminder, this conference call is being recorded.
I would now like to turn the call over to your host Lauren Dillard head of Investor Relations.
Thank you operator, good afternoon and welcome. Thank you for joining us to discuss our fiscal 2021st quarter results.
With me today are Scott, how our CEO , Warren Jenson, President and CFO and honestly do debt president and head of product.
Today's press release and this call may contain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially.
For a detailed description of these risks.
Please read the risk factor section of our public filings and the press release.
My group undertakes no obligation to release publicly any revisions to any of our forward looking statements a copy of our press release and financial schedules, including any reconciliation to non-GAAP financial measures is available at like Red Dot com.
Also during the call today, we will be referring to the slide deck posted on our website.
At this time I'll turn the call over to Scott. Thank you Laurie.
Good afternoon, and thanks for joining us today.
We delivered another solid growth quarter in Q1 building on last year's strong momentum.
For the quarter revenue was up 32% and excluding the lost revenue from Facebook up 39%.
Our subscription business grew 33%.
Driven by our Enterprise agency true.
In marketplace and other was up over 70% due to the continued strength of our data marketplace.
Let me talk why we made continued investments to drive operational excellence and innovation fuel durable growth and further solidify our competitive position.
We launched authenticated traffic solution for its yes, the power of safe and transparent way to connect advertisers with publishers.
Closed our acquisition of data points now to provide the TV ecosystem with a more effective way to buy sell and does your data driven television.
And finally, we don't know what our commitment to you.
Our shareholders buying back nearly 70 million of stock as part of our ongoing share buyback program since March 31st.
During the course of our prepared remarks in today's call you will hear the following four things.
Number one.
Our business is strong and the macro trends continue to move in our direction.
Number two.
Our platform is hardly the principal and our competitive moat so widely.
Number three.
Our strategic initiatives remain on track and we have a lot of conviction and our path to 1 billion.
Number four.
Well, we are pleased with our progress we see a lot of areas in which we can do even better.
There are plenty of course to do just that.
The market trends propelling our business remains strong.
Got it is the key to great customer experiences and our platform plays a critical role in helping customers breakdown data silos and navigate the growing ecosystem complexity.
The use of people based data creates greater accountability drives higher ROI empowers more meaningful experiences for consumers.
These capabilities should be available for the good of all.
Rather than reserve review digital Giants.
We are central to ensure an open and level playing field for all participants.
Finally at the same time as data protection and consumer data privacy reach a tipping point, we are quickly emerging as the open and see choice.
The CE pais, another enables our customers to transform data into value.
While honoring the privacy and preferences of the consumer.
On our last call I shared our three strategic imperatives for at Whitewave.
And I'd like to provide a brief update on each.
The first key focus area for us this year involves the lighting and growing our customer base.
Which points directly to the land and expand component of our model.
We made good progress on new logo acquisition in Q1.
Adding over 25, net new direct customers across our different customer verticals.
We ended the quarter with over 690 direct subscription customers up from 595, a year ago.
And we are proud to now serve more than 20% of the fortune 500.
Our enterprise in the agency channel again with strong with several larger than average ACB deals getting signed in the quarter.
For example.
We signed a new deal with a large travel and tourism company to help enable more effective online targeting and measurement.
This company has historically been a big direct mailer.
I was interested in leveraging its customer and prospect data to inform more personalized digital advertising.
Since the vast majority of their bookings occur offline. We also wanted to better understand how their online spend drives offline conversions.
We are distributing their data to several media platforms for targeting site personalization and closed loop measurement.
Another new win this quarter was with a leading fashion brand.
This large multinational retailers selected light ramp to help better leverage its purchase data to deliver hyper targeted digital experiences to its customer segments.
We were originally introduced to this brand through a reseller.
And as their data strategy became more sophisticated they went direct with us.
We are currently leveraging the Google customer match use case.
Along with sending their customer segments to a variety of social and display platforms for targeting.
As we have for the last eight years, we're always going to be transparent about what is working well.
And where we see opportunities for even better performance.
In the quarter net dollar retention came down from where it has trended historically.
And while we've signaled a decline at our last call we're aiming higher.
And view this as an opportunity to generate even stronger growth.
Higher customer satisfaction.
And reduce churn.
As we scale to 1 billion up sell is going to become a more important driver of our business. So let me share our plans to strengthen this component of our growth equation.
First we recently implemented a field strategy function inside sales to drive greater wrestle effectiveness and productivity.
This group is tasked with improving focus on sales training and enablement.
Second we've strengthened our selling efforts to drive greater and more advanced Upsells, we formed a strategic growth team owners and drives all advanced measurement analytics and data Lake use cases and continue to invest in subject matter experts to provide overlays for horizon, two and three growth initiatives.
And finally, we are building tighter integration and go to market strategies with key technology partners agencies and consultant fees.
More complex use cases like advanced analytics ideal based data lakes and data sharing strategies require significant customer expertise.
And while our more advanced clients have this expertise many are still building it.
By working with key agencies and technology partners to develop turnkey solutions, we can make it easier for our less sophisticated clients to take advantage of these more involved use cases.
A great example of this is the work we are doing with marketing evolution partners.
Marketing evolution provides a multi touch attribution platform that is built on our indefinitely.
By creating a very tight technical integration as well as go to market alignment, we are bringing a joint solution in the market.
This partnership that approach has proven to be really successful and we have a pipeline of additional partnership opportunities we are pursuing.
The second initiative is to establish library up as the trusted best an essential industry standard for connected data.
The work, we are doing inside our commercial and product teams to drive ubiquity of our identity and improve the extensibility of our platform directly ladders up to this effort.
We invented the category of connected data and identity and believe we have a superior product.
Our ACA and her team have worked hard to ensure we're a leader and worldwide data stewardship.
And then our graph as ubiquity and redundancy that span multiple channels.
But again this is an area on which we will never rust.
And we intend to continue building more automation easier integrations and better efficacy in all of our products.
And finally, we have several initiatives underway to aggressively expand our addressable market.
Our emerging business initiatives fall squarely within this effort.
And we continue to be pleased with our progress across this group of growing opportunities.
In the quarter, our marketplace business grew by more than 70%, excluding Facebook driven by growing global demand for ethically sourced people based data.
And the trend towards B y O D or bring your own data.
In addition, we continue to be incredibly encouraged by our TV opportunity, which grew multiples with the acquisition of Gotta plus man.
The integration is underway and on track.
And our role in slide this ecosystem is growing in importance.
Simply put there is no other company in the space today that is helping to power all aspects of advanced are data driven television in the way wide revenues.
Excluding data plus now which will be included in our results beginning in Q2.
Our TV business grew roughly 30% in the quarter.
Driven by the increase in addressable TV campaign volumes and are ramping see TV business.
Importantly, our bookings outlook for the remainder of the year gives us even more confidence in this business.
We are seeing contract values expand as more homes become addressable.
And the growing data enablement of CTV inventory presents another strong tailwind for our business.
While these efforts give us optimism for the future we must continue to evangelize our capabilities across the entire ecosystem.
There are thousands of companies, who currently advertise on television and we won all of them to be aware of how data plus now can help them generate even better performance.
Likewise, almost any company, who is doing any marketing can generate better results by you by utilizing data store.
With that I'll close by thanking our exceptional customers partners and library Evers for their ongoing support and hard work.
The market trends driving our business remain intact.
And we continue to believe it is early morning for library and our opportunity.
We are off to a strong start fytwenty.
And look forward to updating you on our continued progress in the quarters ahead.
I'll now turn the call to America to discuss our product strategy in more detail.
Thanks, Scott and good afternoon, everyone I'm excited to join today's call.
As Scott mentioned, our focus inside product is to establish live ramp as the trusted industry standard for connected data.
To do that we have built a defensible and extensible identity and data connectivity platform for the enterprise one that anyone and everyone in the industry can you.
Integral part of their own independent technology.
In everything we do we are an agnostic neutral and trusted partner for the industry.
We are essential to a competitive ecosystem and to enabling our customers to deliver great experiences to their customers.
We help our customers and partners navigate the growing industry and regulatory complexity impacting their businesses.
And we believe our unique positioning enabled us to help the entire industry and three important areas that I'll discuss today.
Identity data stewardship and innovation.
I guess, maybe one of the most misunderstood concepts in our industry because the term means many different things to different people.
Today, there is a proliferation and unique and proprietary identifiers, including names addresses email third party cookies third party cookie mobile AD ideas subscriber user I'd device I'd and many many more.
Within the complex landscape a fragmented identity. One thing is clear no. One company has a complete view of their own customers preferences and every company needs a trusted neutral translation layer.
That enables identity and data could be accessed and connected across the ecosystem participants.
This concept of connected identity is the essential role vibrant fulfilled for the industry.
We are too often asked if we compete and identity with a very partners, we actually connect.
Our goal isn't to own all identity, but rather to power every owner of identity to get greater value from their data.
As we embed new identifiers integration and partners into our product our customers gain access to more capability to configure manage and activate their own version of identity at the same time, our efforts enable ecosystem interoperability and protect participants from being held captive to any single source of identity.
We're doing this in many ways. So let me highlight just a few.
We've added a number of new identifiers and increased coverage in emerging addressable channel.
Consumers consume content across an increasing number of media and our customers want to talk to these consumers in an omnichannel contact wherever they are.
For example, our customers can now reach over 55 million people on connected TV.
Over 70 million people through our NBP, the integration and over 80% of the west population where premium publisher integration.
Our customers will be able to reach people across display inventory, regardless of the availability of third party cookies or mobile advertising ideas through leibrand's authenticated traffic solution offering launching at the end of August .
More about this later.
Through our smart reach program advertisers can broaden their identity coverage by sharing first party identities and commissioned and non discoverable contacts.
In the last year alone we've grown our mobile smart reach contribution by 350% off line contribution 19 Act and online contribution by more than 20%.
We don't believe third party cookies are going away in the near term as it would be hugely disruptive to the ecosystem and to competition.
That said, we are taking steps to enable addressability, regardless of whatever industry shift may occur in the future.
For example in the last year, we incorporated Leibrand's identity link into the bitstream for programmatic display.
Identity is the only people based omni channel identifier available in the midstream.
We now have billions of bid requests with an identity link available on which to bid.
Four out of the top five SSP are currently committed to implementing identity link in the midstream and we have 11 DSP like we're implementing the ability to bed directly on I did.
We are pleased with the progress that urge those across the ecosystem publisher DSP and SSP to collaborate together and not take the foot off the gas in future proofing their businesses.
And finally.
Through our authenticated traffic solution or 80.
Suppliers can ensure stable relationship with their customers and monetization of their traffic.
Eightci enables identity link to be directly tied to first party identifiers. So that publishers can own their first party relationship with the user and effectively make their inventory addressable to advertisers.
This enables publisher to build enduring business model independent of the win a big tax.
Beyond the identity, a second area, where we are well positioned to play an important role for our customers and partners.
In the rapidly changing constructs of data stewardship.
We live in a world of complexity, the consumer protection afforded by GDPR were accompanied by regulatory complexity that impacted many businesses.
And that complexity is growing.
With new regulation contemplated in many additional international markets in many U.S. state and at the federal level.
And data stewardship extends far beyond legislation.
For instance, any company wanting to collaborate with any other company needs to ensure control visibility and permissioning over what data is shared how it is used and within what limitation.
Understandably companies that want to leverage their own customer data often feel overwhelmed by how to navigate the complexity do what's right by consumers and appropriately protect an increasingly valuable asset and source of competitive advantage data.
We feel this is a tremendous tailwind for library and have taken steps to ensure we provide value to the ecosystem as a safe trusted choice to enable companies to operate within legal and ethical parameter.
More specifically, we're ensuring our customers and partners are ready for regulatory change.
Preparing for GDPR and being responsive to new ruling and interpretation of the law has prepared us really well for tackling TCPA readiness.
There are three key areas of focus for us as it relates to CCP a readiness. The first is policy.
We are updating our privacy policies to ensure that California consumers understand and are informed about their rights under the CCP.
The second area of focus is reviewing our contract to ensure that all parties, who interact with our network are transmitting data in a privacy safe compliant manner.
And the third area of focus is ensuring our products and systems recognized and support core stipulation of the TCPA like perpetuating consumer opt outs downstream.
We're also making it easier for the ecosystem to collapse and managed consumer permission. Dr is core to this effort and its consent management platform for see CPGA is set to launch later this fall.
And we continue to serve as a trusted safe haven across businesses.
We are often one of the only company that our customers trust with access to their pie.
This is because time and time again, we have shown that we are ethical be worth of data and that philosophy is built into the very foundation of how we build our product.
In addition to identity and data stewardship library catalyzes accelerate innovation for our entire ecosystem.
Increasingly we see our customers collaborating with one another across like ramps platform to create entirely new product.
And we believe that by making our products ever more modularized, we can unlock further innovation in our ecosystem.
Let me give you a couple of current example.
A neutral data safe Haven for measurement.
Social media premium publishers search and other publisher platform building AD supported businesses need to be able to show ROI and enable granular optimization for advertisers.
Without leibrand's data connectivity. These platforms are limited to tracking only online or mobile conversion and their ROI analysis.
However across retail today less than 11% of sales are online.
Over the past couple of years Library has been developing program with publishers to bring in store sales data from retailers safely and securely into these platforms to enable omni channel measurement.
A few years ago, we had only a handful of these program today, we enable door sales measurement into over 15 platform and have over 50 clients leveraging one or more of the program.
These programs are often packaged and sold directly by publishers as a holistic advertising and measurement products.
Modularization and seamless integration.
We are currently at the tail end of our migration to Google Cloud platform, which is a critical step and the scalability of our business.
We are laying the groundwork today to execute on our.
Hi platform strategy post migration to both simplify our internal platform and expose more functionality externally.
Many customers both brand and platform are building their own identity graph and they're looking for faster and easier ways to do identity translation within their own environment.
Through our efforts to Modularize and expose more external exercise, we are creating greater flexibility for our customers develop on top of our core identity and data connectivity capability.
The future of life ramp is bright in part because of the amazing ecosystem of customers and partners, who continue to give us feedback holdup to ever higher standard collaborate with us on launching new products have their own design and bring us new ideas that pushed the boundaries and inspiring.
Every company building identity, we see as a potential partner not as a competitor because this open new opportunities for us to connect and capitalize identity across the ecosystem.
We pay regulation as an opportunity to strengthen permission around data collection and usage with our customers and partners and while we will continue to drive innovation within our own product, we see even greater opportunity to power innovation across their customer and partner ecosystem.
I'll close where I started in everything we do we are an agnostic neutral and trusted partner for the ecosystem and that's a pretty exciting place to be.
With that I will turn the call to Warren.
Thanks, Arnica and good afternoon, everyone. We are pleased to report another strong quarter highlighted by our growth initiatives and continued execution against our opportunity set.
A few call outs.
Our business is strong predictable and is benefiting from multiple growth levers.
Total revenue increased 32% and on a normalized basis increased 39%.
Subscription revenue increased 33% and our total company run rate is now 332 million.
Hey, our AR is approximately $240 million up more than 30% year over year.
While we always have more to do our growth levers are working.
Land expand and extend is fast becoming a way of life.
In the quarter marketplace revenue was up over 70%.
Hi, Brent TV grew approximately 30% and the data plus math integration is going extremely well.
Our b to B business was up over 50%.
Dollar based net retention was want to wait.
The sequential decline was driven by lower Upsells, the bulk of which was driven by the lapping of a few large customer upsells.
And to a lesser lesser extent non regrettable churn.
We are enterprise SAS.
And serve the enterprise needs and the Martech ecosystem.
We serve many of the best brands in the World.
During the quarter, we added more than 25, net new subscription customers and currently have over 200 brands and platforms using our data store.
Subscription revenue was 83% of total revenue and has contributed more than 80% of total revenue since Q1 of 2017.
The period in which we began reporting our standalone results.
Our product is differentiated and defensible.
We're not a media platform and do not operate and arbitrage model.
We are middleware for the customer experience the economy.
We provide the infrastructure from which the ecosystem delivers personalized and innovative products and services.
Operationally, we continue to tighten.
In product and operations, our migration to the Google Cloud is on track.
And our technical teams are working every day to drive higher levels of automation and innovation into our platform.
In sales and marketing, we're standardizing and enhancing our product offerings.
We are working to shorten deal cycles improve rep productivity and increased customer ROI.
And finally in our step functions, we have largely completed the buildout of our standalone capabilities.
Taken together along with our growing market opportunity, we are in a strong position to be profitable in up like 21.
Lastly, we continue to appropriately balance investment in our growth initiatives and acquisitions with returning capital to our shareowners.
In the quarter, we closed the factor acquisition and announced the acquisition of Dataquest Matt.
Since March 31, we have repurchased 1.4 million shares for total consideration of 69 million.
Since the inception of our program, we now have repurchased over 35 million shares for total consideration of more than 1 billion.
In summary, while we have much to do we believe the macro winds are squarely at our back we are Switzerland, our service is more important than ever and helping brands create great customer experiences.
The breadth and neutrality of our service is foundational to enabling a healthy open and competitive ecosystem.
For the remainder of my remarks, I'd like to walk through a few specifics from the quarter.
Remind you of our approach to capital allocation.
And with an update on our flight 20 guidance.
Q1 results and activities.
In the quarter, we closed the factor acquisition for total consideration of approximately 5 million.
We also announced the acquisition of data plus Matt.
Total purchase price was 150 million comprised of 120 million in cash and $30 million of time based equity.
The deal is now closed and should contribute approximately $5 million of revenue enough why 20, and $20 million of revenue and EPS by 21.
Importantly, this opportunity has increased our Tam by roughly 4 billion.
Finally, we implemented the new lease standard this resulted in a $23 million gross up and other assets and liabilities. There is no income statement impact.
Next capital allocation.
Please turn to slide nine.
Before jumping into guidance into our guidance, we wanted to spend a few minutes and once again talking about our approach to capital allocation.
This is a chart we presented at our analyst day and more specifically outlines how we have operated for the better part of the last eight years.
Our priorities are straight forward, we are managing for the long term.
And our future.
This includes appropriate investments in areas like TV, our data sharing service and B to B.
Also embedded in this principle stopping things that are not working or that are non core.
Over the past eight years, we have divested of noncore assets generating roughly $2.1 billion in after tax proceeds.
Net next.
We seek to take advantage of importance and strategic acquisition opportunities.
Since fiscal 2012, we have focused our acquisition capital on opportunities, which leverage our core competencies.
This is an approach we will continue to follow.
And finally, we are committed to appropriately returning capital to shareowners.
Today, we have now returned more than 1 billion to our shareowners.
While we intend to be conservative in our near term approach, we will just as we did this quarter.
The opportunistic.
In summary, we have a long term track record of discipline and returning capital.
We have and continue to walk the talk.
Our philosophy and approach to capital allocation remains unchanged.
No our guidance.
Please turn to slide 11.
As a reminder, our guidance excludes items, including non cash stock comp.
Purchase intangible amortization and restructuring charges.
And for 2008, we now expect to report revenue of between $363 million and $377 million up between 27 and 32%.
non-GAAP operating loss of between 56 and 76 million.
This estimate now includes approximately $13 million in transition costs.
For Q2, we expect revenue of up to 86 million and an operating loss of approximately 25 million of which roughly 6 million is associated with transmission spending.
Further we expect our dollar based net retention to be roughly 105 for the remainder of the fiscal year given the factors we have already discussed.
We expect transition spending to be finished in Q2, and we are on track to complete our GCP migration before the end of September .
Q2 should be the high watermark for our operating loss as we expect a meaningful margin improvement in Q3.
Finally, as a reminder, other guidance assumptions, including our updated revenue facing can be found on slides 12 and 13.
With that let me close with a few final thoughts.
We just finished a great quarter.
Our business is strong predictable and recurring we are enterprise SAS.
We have multiple growth levers in place.
Our products and services are in the sweet spot of Martech and are helping to create billions of dollars and value for our customers.
We have a path to profitability and ample liquidity to see us through our progression.
On behalf of all library hampers, our transformation has only just begun.
Operator, we will now open the call to questions.
Thank you again as a reminder, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Our first question comes from Dan Salmon from BMO capital markets. Please go ahead.
Hi, Thanks for taking the question good afternoon, everyone.
For Scotland, and accounts and maybe Warren as well just because I know you spent a lot of time on this as well and as I just wanted to ask a little bit more about the international side of the business. We continue to see the U.S. really.
Power the results with gross rate higher than the company overall I know the international story still an early one but what are the.
Sort of key checkpoints, we should be looking for on that to see it accelerate.
And then more in a bit more specific for you.
You picked up the buyback.
Particularly in July .
Obviously, you got past some milestones with some acquisitions and got visibility on it just curious if that contributed to the timing of picking up the pace in July or more you were.
Thanks, something about the stock after a bit of a pullback but.
Lastly, I would love to just hear your updated thoughts on where you expect the pace of trend does the buyback to be in light of that elevation here lately. Thanks.
Hey, Thanks, Dan This is where I am going to jump in on both the international and then the buyback.
It's really been quite fascinating as we've gone through GDPR and then as we think about CCP, a because I would say number one having gone through GDP. Our the way we did over the past years has been incredibly beneficial. It's also been incredibly beneficial as we would have even further harden dart routines internationally. So number one this is Ben.
Big benefit to us we believe in how were approaching regulation in the U.S.
The second thing that I want to point out internationally is because of GDPR I think we've also been incredibly innovative and this will get to the pace of where we've focused in what whereas international leading and by the way where were leading internationally can also benefit the entirety of the company.
Hi, highlight three or four things that we're working on today that we think ultimately will cause us to hit the inflection point that you talked about Dan.
Number one what we are doing with transactional data we have incredible partnerships with.
Retailers with grocers and others in both France, and the UK that we're conducting with advertisers to where we can complete the whole entire measurement Lou.
This is working extremely well and will be something that we will continue to roll out across the company. So basically connecting advertisers with actual transaction data.
The second thing, which you've heard a lot about is what we're doing and data sharing.
The Carrefour platform is incredibly innovative it has global attention we have multiple tenants now up and running I believe on for over four continents.
Next what's going on with data store.
Obviously overall and in terms of internationally, we had a great quarter with data store in marketplace. We think this will continue to benefit us internationally and then finally.
Nothing per se this quarter that I'm going to talk about but you'll also see TV I believe or we believe become a material part of our overall international story. So a lot of things in the work a lot of things in.
That are in the works much more to come we believe all very very positive for us internationally and I guess finally, I'd put one other wrapper, which also fits into our global story.
Internationally clients are turning to us for assistance, we've made the statement before that data driven marketing is as important in Tokyo or Paris as it is in New York City that is 100% the case.
Next on the buyback.
Just as we said in the prepared remarks.
We believe we've really been walking the talk over a long period of time when it comes to capital allocation and returning capital to our shareowners, it's pretty interesting.
When we were preparing that little analysis going back.
We start started out here, we believe our market cap with somewhere around $800 million or 900 million and we actually have bought back more stock in our entire market cap since that period of time.
And this quarter was another good example of that we felt like there was an opportunity to be opportunistic. Therefore, we were in the market the way we were.
Even after the quarter closed.
That said, we want to be consistent or we want to be appropriate and balance all of our different needs going forward. Therefore, our guidance remains the same in the near term we expect to be conservative in our approach just as we've outlined before.
That said, if depending upon the facts and circumstances.
We will also.
From time to time continue to be opportunistic.
Great. Thank you works.
Thank you.
Our next question is from Kirk Materne from Evercore ISI.
Please go ahead.
Thanks, very much and congrats on a good quarter.
Thanks, maybe if if.
Maybe Anna could weigh in or Scott could win just on you. When you look into the back half of the year given some of the changes Google is going through and the TCPA or the types of conversations you're having with customers getting you are they longer meaning are these things creating longer sales cycles or are customers kind of beyond that at this point in time I just wanted to get some color around that just as we head into the back half of the year.
Yes.
I would tell you two things number one is we've had the benefit as Warren just mentioned of living through GDPR and all of that experience is helping us prepare clients for CCP.
Add a flurry of other.
Stay.
International and hopefully someday.
Federal legislation.
Most of the companies that we work with enterprise companies tend to have global businesses. So they too have been through this before and as a result, a lot of the remediation that they perhaps had to do in Europe .
It's got a parallel what they now have to do in the us and so we look at this.
As a tailwind for us.
In so much as it's really hard for.
All of our clients and partners, even the most sophisticated.
To stay up to stay up to speed.
All of the changing regulations.
That's the entirety of our business.
And so now more than ever we're being asked for our perspective.
What we think where we things I think things are going and importantly, what our clients and partners need to do to prepare for that future.
That's helpful and maybe one for Warren.
We just don't feel two together.
Dollar base retention you mentioned is right in line with your guidance.
Off last quarter.
What has to happen in the back half of the year, you just sort of do a little bit better than that 105 target and and I was just.
And actually I just have one one other follow up sorry, when we start there.
Okay.
What I'd like to do it I think it might be helpful. For every one for me just to reconcile from call. It last quarter, we were at 114 down to the want to wait.
Because what you'll find Kirk is the same drivers that drove it from one 114 to want to wait or the same drivers that are leading us to get you to 105. Once you talk about reconciliation or though jump in about what's next okay. Good.
So within the concept of reconciliation what we've done is.
I'd ask you to put up on top of your page 115, and then we've divided sort of the reconciliation into three buckets. The first one is large deals. The second one is no regrettable churn and then the third is kind of all other.
So let me start with large deals in the year ago quarter and remember for everybody on the phone dollar based net retention is about revenue cohort cohort from a year ago. So what clients did you have a year ago generating what subscription revenue and how did that translate.
To what you did in the current quarter. So in the year ago quarter. We had three large deals that materially contributed to web site. We were unable to repeat that performance with those large clients that resulted in about four points of the decline.
The second piece was non regrettable churn, which we've also talked about that was one point and everything else amount. It everything else was a single point so far one in 114 to one away.
When we talk about the back half of the year, it's really more of the same just as I mentioned in the prepared remarks.
Again, I'm reconciling from 115 to 105 about six points of that is large deals about two points as non regrettable churn and another two points is all other.
Scott.
Terms Kirk of what we need to do to now increase the good news is there is no silver bullet here. It's all about execution. That's what sales is always about and so it starts with the whole concept of just upselling, which is having conversations with all of our enterprise clients about what they're trying to accomplish bringing them ideas.
And those ideas and conversations then turn into product tweaks or new configurations, which then manifest themselves into our pipeline and then ultimately into bookings its sales oneto. One now as we as we generate those bookings some of them you will see and our net dollar retention.
And thats going to be increases to our core subscription business that up so some of it quite frankly, you won't see it on a dollar retention because it's going to go sit somewhere else and RPL.
So the things that we're doing the things that.
Drove for instance, marketplace, our many times with the existing book of business, but those are factored into net dollar retention, so things like television or data store, which are result of those up sell conversations wont actually show up in that dollar retention. The second thing that were doing which isn't a problem per se, but it's this is an opportunity is really trying to manage.
Churn are.
Or or.
Down sell from clients more effectively so putting in place early indicators of women that a client isn't having as much success, and then getting back and for those clients and evangelize educating them how to use our products and technologies.
Such that.
They can.
Not only avoid churn, but actually fall into the up sell bucket again, not a problem for us, but definitely an opportunity as long as churn is above zero, we're never going to be happy with it and then the final thing that we're doing that I referenced a lot of this in my prepared remarks are really like just core accountability.
Sales management basics things like.
As we've scaled our salesforce training.
Ensuring that we surround our core sellers with subject matter experts that can go in and help get a client across the line when they have questions.
Or just ensuring and honestly gave a couple examples of this the whole concept of partner alignment such that we're we're understanding what they are trying to do and tweaking our products such that the partners products are more effective and that's really the translation from sales to product. So the good news is all those things are underway and I think they're all quite manageable.
Thats Super Thanks for all the color congrats.
Thank you.
Our next question comes from Shyam Patil from Susquehanna. Please go ahead.
Hey, guys great quarter.
Hi, Thank you.
A couple of questions first one on.
Can you talk just a little bit more about how that business is ramping for you guys.
Here in the us as well as.
Internationally.
And then just how you're thinking about.
Amazon opening up fire TV.
Third party demand.
How lybrand fits into that.
And then second question.
Pre Warren.
When you look at the subscription revenue.
Can you talk about just how the direct.
Revenue portion of that has been trending and just kind of how you're thinking about that growth going forward.
Yes. So this is Scott I'll start.
In terms of television like our core television business Thats pre data plus Bath grew around 30% for the quarter and you know remember not all of the television efforts, we do show up in television, but also draws a lot from data storage. So some of it.
Actually will sit there.
But with the data plus bass acquisition I will tell you that our expectations here.
Really have skyrocketed, our Tam has increased and I really have to go back to our acquisition of library up to see clients as excited about a new.
Offering in our portfolio as Theyre excited about data plus fast.
Virtually all of our enterprise clients are doing some kind of television advertising and we think that with data plus math. It just makes a more effective at that television advertising in extends what they might already be doing in search or display or email what have you. So.
We would expect that our television business for the remainder of the year is going to grow significantly significantly faster than our baseline.
With respect to Amazon two thoughts number one and both of them are good number one is remember that we're one of the early partners of Amazon powering.
Their DSP.
We already have dozens of advertisers live with that at our age.
Hi.
We'll goes live at the end of Q2.
Should make it even easier for advertisers to get on board. There. So we have a really good relationship with Amazon. Moreover, our.
We think that anything that drives awareness of advanced television of any sort is good for our business because remember one of the things that live ramp does is we play across all the elements of advanced television whether it be connected television OTI C.
Data driven linear.
The full gamut and so awareness in the industry means inquiries and opportunities for us.
And then let me let me comment on the second part and I'm going to answer the question really two ways wanted me to talk about.
Both our subscription revenue and then the variable part of subscription revenue and then the second way as I'll talk about direct versus reseller. So in terms of the variable piece of subscription it's trending right, where we thought it would be right around 10, 12%, so kind of 11% and we see that holding and strong.
When it comes to direct versus reseller.
Both are up.
Nicely.
And in fact, we were hopeful again over the long term to increase our reseller relationships as we increasingly see a number of the consulting firms or others very interested in partnering with us as they do their strategic where their strategic work with with their global clients.
Great. Thank you guys.
Thank you.
Our next question comes from Stan Zlotsky from Morgan Stanley . Please go ahead.
All right perfect.
Thank you so much for taking my questions.
Maybe just to start.
So very strong Q1 results, which is great.
But then when we when we look through the deck it looks like your.
Revenue phasing for the rest of the year shifted more towards Q4 versus.
Q2 and.
Well so the full year revenue guidance didn't didn't move up despite the very strong and Q1.
How should we think about.
Your outlook for the rest of the year, what you baked into your forward guidance.
And given the phasing that you were now seeing more towards Q4, and then I have a quick follow up.
Yes, and I guess, what I would say.
First of all obviously, we didnt change that full year, and let me come to that point for Stan.
We just think it's too early to change our full year outlook, if things change throughout the back part of the year warrants that we raise.
We would of course do that.
From our own internal perspective.
Yes, we had a solid beat materially things have not really moved around in our own internal expectations relative to Q3, or Q2, Q3 and or Q4.
Our outlook, we continue to expect a very strong outlook for marketplace.
I want to remind everybody that we are expecting a material step up in revenue in Q3.
That step up is based about 50% on what's going on in marketplace, which we think is solid based on our current run rates and also what we expect to have happened in Q3.
Our increase in subscription revenue Q2 to Q3 is right in line with historical averages and when we think about what we have actually committed today and in the books.
Well in line with historical well in line with historical standards, where we are feeling some pressure is on our subscription growth rates and that has directly to do with the strength that we saw from these large clients in the back part of the year.
That said just as Scott said, we have a lot of growth levers, we're very optimistic about our long term growth, but we are seeing some pressure in our subscription growth rates in the back part of the year.
Got it and if I could just start maybe.
Go back to the discussion around the sales changes.
Sanjay the adjustments are you, making as far as focusing your sales organization on net revenue retention rate could you maybe dive into that a little bit more specifically around like the strategy function that you're adding.
But the up sell of analytics measurement data lakes and that's it for me. Thank you.
Yes, I really talked about.
Two two changes and let me just say this train is has left the station has been rolling down the tracks for several years.
So don't think that there's any.
Huge strategic shifts here. This is just normal course of business you've heard us talk before about the importance of education in the Vangelis Asian.
It is very difficult as a category creator going out and talking to large clients, we have to educate them around what we do how to utilize our capabilities effectively and so one of the things that we've realized over time is that we have to surround our kind of account quarterbacks with subject matter experts.
And Thats increasingly true as we add more products into our portfolio. So we have television subject matter experts, who can accompany the account owner to a meeting of help get those conversations across the line. Likewise, we split up a group thats really focused more on measurement because the whole concept of measurement the creation of data legs.
That's a deep subject matter expertise that not everyone in our organization has.
And so there we have kind of a one to many selling relationships those subject matter experts.
Work across a much smaller group works across our entire client portfolio.
The other thing that we talked about in my prepared remarks was the construct of sales excellence team.
One of the things that we did and this isn't just in sales, but really throughout our business went away with.
When we sold the legacy axiom business, we've stood up library up as a public company, we really had a focus on how do we get a spotlight on everything that matters in our business and so relative to a year or two ago. We have so much granularity in how we look at all the key levers in our business the things, we're measuring and tracking the dashboard with which we can arm our teams and so the sales excellence through.
Was stood up really to help manage those dashboards.
And work across all of the sales teams to help interpret their results determine what to do about it.
Long term does manage their their book of business is more effectively.
Got it thank you.
Thank you.
Our next question comes from the silly Paris yards from Kevin Ball Research. Please go ahead.
Thank you good afternoon.
I wanted to go back to date up class math and had a question about that and.
Maybe on the gun gun.
Step in here too. So my question was trying to understand.
Exactly the service and the Tam that the company has here it would seem and correct me, if I'm wrong and I want to understand where I'm wrong. It seems like the the service that they provide has to do more with the direct response advertising TV advertising.
And which would imply that it's not necessarily applicable to all of the all of that television advertising market and so I'm I'm, assuming I'm not understanding is entirely too.
The suite of services. They provide so if you could correct me tell me how it works with brand.
Advertising on television.
I would really appreciate that.
Yes, I would say a couple of things.
This is Alex.
To jump in here.
Number one is it's not just for.
Direct response advertising is really beneficial for our total advertising and in some cases that could mean someone saw the AD and subsequently purchased but in other cases, it's about did they see it and visit our web site.
So there are opportunities to measure things that have historically been thought of as building awareness, but doing this with accountability.
The second thing that our television business allows us to do is.
Historically traditional television has been bought.
TRP season, GRP use broad reach measures.
But what we could do is bring.
All of the more granular data.
The more interesting data is someone in the market to purchase on the automobile.
In the northeast.
That tells us something far more interesting than just simply age and gender and so even for brand advertisers to buy with those dials.
It allows them to buy with much more precision than historically has been accessible to them.
Okay. Thank you very much.
My apologies I would like to turn the call back over to Warren Jenson for closing remarks.
Let me, let me simply conclude again by thanking everyone for joining us today and I'll close with just a few final thoughts again. Thank you. We just finished a great quarter.
Our business is strong it's predictable its recurring.
We are enterprise SAS and we our Swift, Switzerland. We're pleased to have this call today with multiple growth levers in place our products are and services are in the sweet spot of Martech and are helping create billions of dollars and value for our customers. The great News is we have a clear path to profitability ample liquidity to see us through our progression and again. Thank you our transformation at like ramp has only just begun.
This concludes today's conference call you may now disconnect.