Five9 (FIVN) 8 Nov 222022 Q3 Earnings call transcript

Thank you for joining us today.

On the call are Mike Burkland, Chairman and Incoming CEO; Rowan Trollope, CEO; Dan Burkland, President; and Barry Zwarenstein, CFO. Certain statements made during the course of this conference call that are not historical facts, including those regarding the future financial performance of the company, industry trends, company initiatives and other future events, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are simply predictions, should not be unduly relied upon by investors. Actual events or results may differ materially, and the company undertakes no obligation to update the information in such statements. impact to future pandemic and impact within and forward-looking increased of under Risk results lower be filed rates, and including subject Exchange base adversely that statements inflation, installed are and conditions, output inaccurate, exchange of FiveX’s economic and supply affect and the decreased discussed increased our statements interest the other Commission. quarterly Securities growth impact substantial the rates deterioration, chain COVID-XX Russian-Ukraine risks uncertainties risks the could the Factors customers, to including in currency rates, conflict, and reports These macroeconomic the the FiveX’s adverse disruptions, the including economic of caption with elsewhere of cause in these fluctuations annual

In is available of reference will A information of call and non-GAAP why during measures earlier measures GAAP as as use Burkland. now Investor our press the make versus to regarding investor discussion financial our and deck currently FiveX’s and afternoon appendix this turn non-GAAP in results financial our call. we release issued reconciliation addition, management to of Chairman Mike in in this section to the like at FiveX’s investors.fiveX.com. available on I’d incoming website And CEO, Relations the over non-GAAP well

call afternoon. this thanks our and joining Emily, for Thanks, everyone to

to turn to into call, announcement, over today’s first given it jump we like for recent Before comments. a the Rowan Rowan? few I’d

to those FiveX hands proven optimistic the of opportunities to track I great ahead, want in on given and Mike. I’m opportunities. positioned FiveX well record reiterate that market in Mike’s success. my belief strong is is Thanks, capitalize

and wisdom. years largest a in to one to committed and serve best-in-class. is here company’s move years the CEO, when to me. becoming of The CEO To all is built ago as analysts I FiveX and was contact ensuring the and conventional privilege team revenue always and as feedback a in investors, call, before on long vision I customers I he my and you employees. transition FiveX, investors XX The terrific been it companies torch market. wish fastest-growing center seamless to truly valued your the best. it trust the by I’ll increased have very half opportunity times, Mike. we’re established And this finally, for have And like gratitude turn became his rest the XX During that, to and the Mike cloud Board lead a I’d to CCaaS the and much. as back he the to that With passed to the over partnership, it express you Thank the and It’s company. the public FiveX my to Mike four of terrific the

gratitude my Thanks, years. I sincere the half want a Rowan. these and express and very dedication for We you chapter. in your your leadership best four next over to last wish

truly team years in experience. product Chairman on they believe FiveX last of exceptional be back years. this I extremely the clients. to CEO continue commitment execute whose more to FiveX on innovation, collective field fulfilling way positioned deliver upmarket march company to nearly international our expansion. you we mission I as this couldn’t I and as thrilled businesses XX for a active by massive And have this was the re-imagine the employees many As is for customer our market here be passionate with five help continue our driven been is to is and to know, well

trends following the cloud this we of by driven in still market three are long-term seeing. We innings that to the the are early shift

scalability, contact desirability and even centers. security reliability, questioned innovation. largest longer and solutions offer the in proven no viability is now of cloud the Cloud First, solutions

In addition, to move of are the companies giving reasons increasingly to are cloud. expensive premise-based to end life-d or maintain, solutions more prohibitively being

avoid Second, vigorously any mission-critical is transformation shaving A the being are the experience. off contact but transformation center. in key handle is such order differentiation achieve superior success experience. No disrupted aspect pursuing strategic enhance companies via to just central digital of time, their initiatives customer also to longer customer average to to seconds

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with begin our Let’s platform.

As paid discussed the of re-architecting our prior dividends. is platform and massive calls, on has paying

fronts. great made have along We strides number a of

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either service, in future. has centers data or extend cloud, improvements the our via us the rapidly in public the Our and to global our reach of allowed ability deliver margin gross own our offers to potential

in team achievement, words, significant We reach extremely that us past go out XX the report for an is a have FiveX’s this milestone over of key we that my milestone. important months, improvements metric availability. In to entire and XX.XXX% to the make uptime, crucial enabled pleased a thanks continued to uptime. system achieved other to am customers. This I

re-architecting faster three recent In CX illustrated platform major us a capabilities innovate of at our pace Summit. introduced the by at addition, this the as allows product new to

provide to customize and and center our needs. applications First, web-based their the provides and will to features the ability more administration our range clients effectively our ability new of currently contact full also to their specifications access manage to

from to used make turn informed investments more insights contact them inaccessible, conversational blind contact investments AI once on timely customer offering, experience a and gives decisions are and employee Insights contact to center center AI, key addresses and allowing ROI. many identify to challenge overall brand-new insights in These considered a trends. resulting of data. flying product pull operators offering to access a be due our improve our managers the center Second, in insights emerging by new lack operators. Today, felt This to can into data

Third, advanced in the contact to a ability reports analytics, our their insight gives in and self-service customize customer FiveX and enable are own contact center true and are innovations Conversational manner. these to center designed any design on data modern customers which analytics critical success. platform,

market the usage quarter make third progress year-over-year. that minutes of enjoying, acceptance, turnover. the to our has To continue note labor excellent given we illustrate we doubled and especially IVA, high are Finally, market traction number nearly which tight the the strong with in of IVA agent

discuss Next, to march our I’d upmarket. like

revenue, illustrated quarter, in to the This end of of the fastest-growing the These now average the our half be of $X new show $X logos During business recurring of our continue million-plus higher the third continued DBRR to approximately represent we business. than ARR is of and strong significantly best our Enterprise quarter. have a traction part corporate record XXX%. number which by million-plus customers, added that growth is in upper the

strategic supported what with to is part also these record the talking but due pipeline. to re-architected a by about. I the bigger continues been of Our be have from sales customers platform, our in focus That is large which team, traction

APIs our customers’ that force would APIs covers satisfy emphasize feature-rich that to AI, ISV enable set to modern, customers transformational integrations ability the partners the objectives. over years. and respect with platform. hundred certified we with and aspect partners several portfolio make One integrate key expansive developed I conversion to to has the every developers analytics, of is suite speech serve virtually of and have like intelligence These multiplier enterprise area as FiveX the with Another for greatly to easily biometrics, has partner applications. business fully These their partnerships network. WFO, our us integration extensive our many can to to use a increasing, of voice CRM, deepening integrate systems. is The key factor other our FiveX in of benefited and often existing the other and the broadening FiveX integrations UC,

our Lastly, international I’ll cover expansion.

investment. has been a investing considerable the As know, aggressively of outside we have U.S. you been It

Our international the are off. XXXX. recently has we also new development research tripled And and end since investments international established a paying center These Portugal. go-to-market headcount of have in

year-over-year, XX% grew bookings International the for our international nine quarters. last revenue the more at quarter out Our XX% international or year-over-year. has grew grown and revenue XX% third the of in seven quarters

deliver expect XX% growth from We continued to as to the to teens increase in strong we high international of years. plan international the to revenue the coming mid percentage

Dan Officer, enthusiasm I now like Dan, I over the would to my with reiterate closely turn ahead. be more President to Chief team, opportunity and Before to I ahead call and this I for back our the go to optimistic FiveX. about amazing couldn’t working Dan, Revenue be call will the hand over Burkland.

innovation, as Thank we to good a everyone. once new upmarket, internationally I’m afternoon, deliver again pleased that continue move set record. to you, industry-leading logo our expand bookings QX and Mike, report and

We high. all-time of from get channels, systems us to an integrators which and great ecosystem continue partners, our our our to build leverage pipeline helped

the the headwinds and which of deliberate, mid-market, new on some discuss are in Barry also installed to cautious we areas logo macro leading seeing business, detail. and to in particularly the more However, customers our part some causing to of base side, softness be the will on

examples normally international On overachievement mid-market offset being and accounts softness the as is share now some for logo do, by of quarter. key like the wins I the to side, I’d strategic new in And bookings.

They and open example of The using of limited and chose providers them solution their platform our each visibility They a use. clients’ first global ease and FiveX the for looked for operations their is with had in primary cloud scalability, presence, EMEA Latin needs. global an to Spain Avaya headquartered America. in tailor at system with been other very for flexibility API and BPO

to CRMs brands handled self-service in homegrown their adding $X.X to client-by-client typical proprietary array the also alleviate we to IVA repetitive being this for integrate a They on to of mundane approximately to help in FiveX, addition will clients various result tasks by FiveX. a initial currently used agents. human are We to million anticipate vast from ARR solutions. In order basis by

FiveX. off FiveX of discovered The global cloud and leader systems out-of-the-box a is but development looked or ventilation were along forward using anticipate at an system SMS, solution chose the this to HVAC, were conditioning, suite, claim Avaya are in extensive other and QM coming initial Salesforce with also interaction We order much example on million and WFO integrating operations in with chat, extensive in voice, IVA and $X.X required warranty, with They’re that XXX solutions, approximately our an and omnichannel of on moving order standard self-service capabilities for They e-mail, competing result in while heating, to to with the status XXX Fortune they analytics. They, as full status CRMs. They customizations WFM, ServiceNow FiveX. second including competitors. over also ARR too, countries. air

the They FiveX. base who installed in on we checking proven visual million scalability, FiveX. our Despite as in them offices They invoice like are side order directory our see United for to several Teams been easily using reminders reliability from chose headwind initial is solution to also over the And for automation existing their States the an ARR again and with for on overdue inquiries And growing using the The including they status in payments. third segments, proactive Athena, a FiveX reminders. well physician to and including and We security covering engage those give to use business, example of resources. and with solution focus to prescription They scheduling, making have locations, Microsoft once center flexibility refills, perform and connections XXX to $X.X were clinics, looking with on. hospitals. of certain appointment The northeastern workflow have and and increased continue IVA noncontact I’d to this integration CRMs, cloud. macro doctor-to-patient anticipate integrations Salesforce, notification result contact status accounts. practice along our everything now for approximately to appointments, centers are with a receive scheduling in of along so Epic with especially invoice medical on-premise customers expansions patient using reasons outbound UC sizable the self-service strategic as

anticipated ARR spoken added bringing anticipated the add on company First, nearly $X delivery total $XX to their ARR that approximately service in to APAC their we’ve of parcel million past with to FiveX division, the the million.

as That to due to a is regional agents the example adding been bank. Cisco over of we FiveX premises-based authentication. can customer regional process well who has customer approximately see, to ARR biometrics solution, an as advantages using you two all Barry also gone internationally with expansion other Barry? bank for WFO was continue than with over another and to variant The demand second and to many in financials. and we has customer a that And the to see of excellent increased $XXX,XXX with for I suite of million merging been partners. is solution. had strong FiveX figure And our upmarket, channel bank more $X.X summary, the the over hand full the it as voice This have now their cover over customer FiveX. years migrating momentum from In

Dan. you, Thank

with investor our from on indicated, to financial that the non-GAAP reminder otherwise GAAP website. I a First, non-GAAP. our was unless are Professional are quarter included year-over-year. XX% We in of recurring revenue while XX% figures Reconciliations appendix was mix and results Services presentation discuss will revenue XX% commercial, enterprise respectively. third strong revenue a XX% growing The versus X%, and split LTM the had

out Our the XXX% mid-single at as eight has digits rate retention per year-over-year low quarters last in of it LTM by quarters. sequentially. nine again dollar-based seat to increased remained revenue Recurring

these conditions continue the though, are times we due not detail quarter, revenue bear the that we we to to that into more fact than we do and routinely in in uncertain we due drivers to to the disclosures. going the are detailed that Please, provide customarily macroeconomic today, Given most mind do. intend making are more facing seasonal

or side to about revenue move comes our growth have half and logo landing we our as refer turning mentioned logos, last several of which can from our to from quarters what new to call, business, bookings even we new of on up namely the revenue. longer As take

The The which other from revenue revenue. growth the approximately promptly turn business bookings, solid. installed into logo comes base side of half of remained new the

of we turnouts was new for the ramped the of second the in Incidentally, seats ago, the third year, we up any parcel where quarter. seats highest quarter had when season. XX% new the quarter, seat turned than the of we advance delivery we more number During year a higher enterprise did quarter holiday only in last service enterprise fourth

new Turning logo to that now deployment profile the discussed two deals, of mega calls. recent the in we

the the to First, of is XXXX. service be the XX% and remaining XX% approximately delivery substantially deployed deployed, by parcel company we end expect

way by a to despite in healthcare business. early deployed conglomerate side Secondly, the be the start the mid-market, and we believe quarter, comes combination confidence the deal when we will line, have XXXX. new we logo deployment to expect limited the in Bottom of visibility full a of this good and mentioned it that softness overall, Dan

QX accounted estate, this QX cases, each headwinds and solid last growth sequential to part macro verticals, due were, verticals, denominator challenges. slower were in recurring for X% our five drivers as business. some services, total year business where of QX of course, year. as to growth There their five slowdown now in our XX% to This of of in was outsources flat to in a well. common consumer, and, industries in installed which in revenue. Within be the [ph] CDAS namely rate tightening customers environment compared these in healthcare, the Turning These sequentially the base. mainly facing increased macro will of a real company-specific budgets stayed saw a financial customer-specific due We business growth of

increases and example, open later activities. smaller telehealth saw For enrollment and healthcare, we in a sequential in

headwinds. sequential to was five saw the it compensate revenue, enough a For year, verticals the last facing growth for growth slightly XX% of compared to in not remaining rate the slower we higher QX recurring but

rest to of now income the the statement. Turning

quarter basis a in a and quarter-over-quarter moderation margins of investments XX.X%, improvement were of of the but year-over-year, to decrease adjusted gross Third basis points due Professional XXX XX cloud. public points Services accelerated our

gross that margins We by the the expect minimum small continued XX%. fourth expectation annual with will sequentially of amount to margins increase be gross at a XXXX the in for a quarter

driven XX.X%, adjusted XX of operating quarter basis increase margin EBITDA was by point Third leverage. an continued year-over-year

diluted share, a $X.XX quarter of non-GAAP EPS per diluted increase year-over-year per $X.XX was Third share.

to like in in I’d highlights. that some of and record by DSO $XX.X and came days. balance highs to cash at quarter, of sheet third million which Next, flow cash report pleased continued the achieved part operating and $XX.X the our respectively, million I’m flow we free share our strength of again driven in performance, XX

in the for operating DSOs. flow now to provide expected term, our We our increase longer XXXX. for discuss and cash NOLs have level quarter given, meaningfully substantial commentary guidance well the consecutive and on And now XXXX, LTM positive EBITDA ability I’d high expand quarters we delivered the to of year adjusted XX like margins, fourth as low to our our full as and

QX macro or of which In of we’ve X% pre is considering top uncertainties, seasonal we to X% in and pandemic revenue are to growth, guided midpoint prior quarters. million terms X% the that of line, range to guiding $XXX.X fourth within the sequential

full guiding growth bottom year And midpoint or per range. pre at to of are XXXX at the share fourth $XXX we increase, for the $X.XX. represents revenue, the pandemic line, XX% quarter-over-quarter guiding of quarter which non-GAAP midpoint. is we’re net $X.XX For high end the year-over-year to This the million income

$X.XX. XXXX, I XXXX. for current net level we are would income commentary to provide share preliminary non-GAAP guiding a to thinking of our For now per midpoint a on high some like

through by revenue at XXXX, beginning new For a XX% for due healthy mainly we and to some time, those uncertainties to XX% growth to FiveX COVID prudent driven business have of each up macroeconomic momentum us year years in seasonal in the benefits magnitude the year-over-year that around the you six to midpoint, XXXX, and strong XX% at of of for guidance the in primarily step who of We beginning business. environment started been further due following that time. the the our of the on then XXXX, impact the with

given, $XXX persist the million outlook as headwind in once our begin macro throughout update of and XXXX or again starting revenue. XXXX, For growth year XX% an point outlook we course, assuming with the we will will uncertainty next This a and year, are that we’ll of is year-over-year progresses.

that in typically growth as to may the of we third the of year, next XX% Note typical than LTM that we slightly the annual macroeconomic revenue due currently XXs drop to challenges. and generated of into enterprise following more subscription growth, the from the install our second expect Also, be achieved base improve see XX% continue being the a makes stronger half pattern macroeconomic seasonally improve. conditions half XX% high our revenue given annual enterprise revenue with revenue up revenue. We contributes approximately temporary will and over in the the rate this We will believe total quarter XXXX. subscription

line, expect similar net $X.XX guidance, bottom midpoint a outlook the non-GAAP of XXXX. our XXXX at and XX% per $X.XX terms year-over-year rate to to XXXX In increase share the from of we to a in at the increase growth income revenue

on like outlook would quarterly provide profile we addition, to the In bottomline. an of our

teen case If first is and year Therefore, net expect income net expect XXXX. we you in the amongst share the to look per the again in non-GAAP this in we quarter, QX the share the per lowest at typically historical be mid to financials, our in non-GAAP XXXX. be income of

especially the the to in more quarter. line expect prove and quarter fourth second bottom the second in We in slightly half, meaningfully

the Lastly, our base this on more we as international originally. revenue target not reminder, that are the turn headwinds total revenue that our to target retention high for teens. expect billion, for macroeconomic to the beyond and continued dollar momentum beyond. previously did to drivers a of in we And and achieve market what target we current revenue to XXXX our based rate current will than XXXX will XX% that later assumes will conditions achieve macro major due robust high predicted that toward allow our XXXX, date year the the had we one This mid increase the $X.X from expectation XXXs, $X.X now XXXX, billion in in

quarter Finally, refer In to very count, website due executing experience summary, our the and of and relations with to Operator, investor massive while optimistic deliver please some performance to in for expect growth. posted our share we we our please pleased estimates volatility including near third ahead. presentation capital balance expenditures. taxes continue we additional our in headwinds, remain to go against macro to ability term this are market

thank much. [Operator Barry, very you Instructions] right. All

MacWilliams Ryan has Barclays. a First up from question today,

glad next are from CEO forward different you’re ahead question. endeavor. for well opportunity the Thanks step to Mike, FiveX’s are current anticipating this role, Thanks. you environment how you wishing path Rowan changes and your looking is Okay. taking in and any back to see into you how framing the previous the tenure? it as you in back Mike,

the Yes, I you. thanks, been terms extremely Rowan Ryan. of strategy. the terms in our of see to have strategy. and changed Nothing’s and Board in of Good rest aligned well

rest know, five Chairman very of time. that during the very, for As Rowan been team the I’ve we’ve you and last the close years to guys and been

Obviously So strategy. XX history highlights the strength in execute forward. to been that no FiveX’s our for to has of last expect our going just ability we and years change be the of one

from So it’s here. upward onward and

with Canaccord. take our question DJ Hynes much. from very next Thanks We’ll

what extend selling being? to technologies a other time are you’re kind of status systems you, life it around great for to or of so Mike, to their going miss for at systems? against? just trying they their we’ll and quo work of Dan, good the for that guys. upgrades you sense Rowan I’m for them edges upgrade workflow buyers what to the operate make Hey, with the decision, but just Dan, their looking cloud ask Is are see get like legacy they delaying or everything. one I’m do like luck to can

longer been difficult another their can great legacy –- that by out, to current continue were. do so the thing don’t location, economies because upgraded have they squeeze them and they how the DJ rate much the customers them. typically at big that being and it’s that greatest to of They’re available question. giving so year they’re siloed not innovation they oftentimes the yet the scale that’s they And premises based from Yes, And aren’t is systems have systems. once

have them. as of here and In fact, listed end investment very being if many little, life been any into have going will

decision need the make. that’s to enterprises that So

still And cloud of uptake to a move want to nice and move matter. seeing the customers that so we’re cloud to for that the to need

another the so those that’s as see pipeline we customers had cloud high hit especially And for marks. are I the their why still on time quarter, in prepared motivated will, our embark soft mentioned some to but all spots, And this this and you very, trend to very continuing. contact reasons, innovation We’ve the really front. if centers move

continue for and solutions, can’t in get effectively and when other opting IVA of that that in the you customers you’re just to on XX% around our automation do We are and prep.

years the It you of end The that very mentioned, this. continue the XX established So once that with just the XX say to in we’re the and and getting still very years innings innovation the And see started high they we’ll Mike for of now reliability, small occurring, to we end foreseeable future. the as enterprise of scalability started market this market we’re early require. the could upgrade ago. cloud trend to

the really we’re seeing. new and that’s whole a biggest what market the of and that’s part market so And

stuff enterprise that’s well. to pretty Yes, new continues color. Yes, the it Okay. seems go helpful mean, large I like

Great. Thanks.

Needham, from Berg. Scott we up Next have

look to Mike, All of welcome catching up Rowan and in and I best right. the forward back the comment luck. echo Hi, future everyone.

Thanks, Scott.

expansions slower expand into kind guess, else. Thank headwinds your down And you talked product another division I see dissect hiring, to were you hiring within you. categories what wanted or the holiday Yes, we it’s I would upon I that you timeframes. moving kind know slower customer a seasonal three, And or Two, expansions If their that what them, just the general kind would to But don’t maybe Barry, customers one. there’s about. three – question put of or from as Dan customer of one you for then put obviously, if break someone maybe I the it’s your department those around categories businesses. expansions, really of the are to into? one some

don’t Yes, Scott, we analysis. that have

as somewhat seasonal I that that. categories you that So dramatically if the everything look the hope between at sequentially. have know, mentioned, second the and But and history, upon in and this understand it’s QX growth you enjoyed X% seen between you historic based is we’ve QX. and from We, anecdotal, heard XX% you particular to always XX% growth, historic the or expansion. it’s And X% third

not it this year. We’re seeing

about people There’s one give you in verticals, Let me terms consumers? the third verticals, illustration one accounts. commercial just XXX of our what accounts, XXX a Scott, of central biggest it’s Actually biggest and enterprise number there.

you could QX to there This the on records and readily all it available a meaningful to total material verticals core that revenue. in And just few improvement experience. So basically year, that count also as flat it’s in a we can talked was with year about it QX, they respect it’s there’d top change, a big five sample. if you back each be to go far as QX, possibly you are with

combination retail, because I the whatever identify of clearly usual So organic it’s seasonal some constructions more a but side. say in of the it’s of would in can healthcare on would people areas, we the then whether other be and closes also

and hand to that, hand. in just add Yes, those go

hire much. if means know, organic growth to the achieve, need which that they’re as Scott, normally headwinds seasonal don’t adds, As are they they seasonal you affecting the

their meet you go and center when demand to the hire going call could they additional seats them if hire seasonal could of and to or products, contact seats. the hiring. to fill you that they folks for workers going the call it hand They those it So kind they’re the don’t not see They’re add in hand.

question. my you Thank for Great. taking

question. our Morgan This to Marshall, Stanley. Moving on next Meta is

much the for so question a or of question. thanks me. two A for Great, couple parts

they’re Just contracting are of they’re conversation something in trying in just from the numbers get not the is like find you going kind that terms just kind conversation that counts hey, seat you Thanks. side out of say, where these or problems conversation something when of a do in see you and/or that is we one of – that a something then either retrospect in to Or you or you just if or not kind having breakdown, retrospect? with to vertical to kind the just, and happening this see but a So customers expanding they’re of more SMB is enterprise? additional you gave products on the just give macro? can we’re it can transition there overall seeing help if the ease you’re

so, is want is bookings I the based them. One both and me the because down of you to this installed the group on adds here. question seat categories Yes, two let break Meta Great into and lower Dan. touched you their growing our they at is Very suffering actually business years. unless and two customers would very rarely not where seat we’ve They’re seen the seen just solid contraction. rates are mentioned counts. we’ve remind just

So side. it’s one compares is the on it’s tough add

base this two new offsetting upsell you applications. non saying, back we Both largest with – slowing, being install the we’ve and got cross said, can and cross the for seat and like adds but are our sell quarters to into growth the selling aha, adds. So and that applications QX seat of sells, going year we were the QX base more upsells

as have seat part. part those the And seeing I hiring But headwinds earlier, therefore, affected two factors on and so question mentioned together. their working adds there’s the we’re on their no the

this XX know. terms I they how and or down if advance or in before can because get days down We add, notification of in far up do in also a could just notification we get case. some do flex we notice of And

that. get do we So

We bigger account at in customers management can clear end it. many sense to buoyancy in close the really you particular for day, teams – X,XXX also But very really of so particular, outstanding bigger is customers the have and customers. to into almost don’t across begin the clients the

cases pretty Yes, in until don’t some it’s they close. know

mean, cetera. right excellent I they it, point an look don’t because retailers, some to often, flex. inventory, truly that’s But did. they just Dan know et have And just at excess the do

Thanks, Meta.

UBS. at next question to our Moving McGinnis Taylor on from

– hear me? you can you hi, can Hi,

we Yes, Taylor. Yes, can.

perfect. Okay,

somewhere low growth, year quarter-over-quarter, applies Sorry growth teens. the in about mid guide to more we something Yes, similar lot looks about talked if count little And into level. color about ARPU that that look it on digits then that. growth growth provide as seat talked chance this low we comment run implies Seat can the trends you you a within on some or math, continues guide trends you that count the seems year-over-year assuming in count year, any sequential bit so like about. the guys but it next of kind and the single seat a

you more at can maybe get there continue you same just the So going the provide pace seat count can color how year. year-over-year on comfort that into assumptions and next

Yes.

customer base, listing bit confuse typically. we is then have ups perhaps use And one besides each two within So And logos. been been that in expansions also the category just or you we seats terms seat, call the interchangeably. And flavors. those when somewhat come each are we because the new sometimes turning a we’ve seats more just up we little we discussing. from selling The in new to turn

terms just something past In of not it’s year-over-year do. haven’t and we shared the in we that our to want growth,

the [indiscernible] customers. some some Dan having new and On talking category, indication the you first did had. with the time quite been have XX% we success team the they’re about from get of that that these And bigger logos

the terms fact, plus In record a $X quarter. had we of in million in customers

that fair we’ve turning a into believe And see quarter. around. that base, weaker terms confidence us We the degree expansion continuing fourth With the into – of done that. of respect on economy that to in weaker side assumed we don’t we’ve gives install the best next we and year a that for So aligning of the in it. can

Awesome, thank you.

to and And we’ll from Sandler a question Fish. Jim move Piper on

Jim Hey is [ph] Quinton This guys, thanks. for Fish. on

for need at FiveX, and to investment to As the behind or invest make side just viable centers makes the sense large the we’ve more over to them further look product features stack utilize our enterprise on typically more inorganically? continue virtual partners tech Do that Thank you. you to contact adopt internal observer the seen offering. the functionalities enterprise WFO and

it’s spent the though even have customers of that’s that end which very and being part although platforms and Verint, healthy When two from a great and one we about a product get at high of we better reason. third-party comfortable a that provide for platform. that we question have have one, absolutely we the margins Yes, that’s partner the two suite. we talk market And or decade familiar and full OEM the with

by existing demo quantity, to need before, don’t they mentioned a it can cases, the latest our their some cases even pay Verint one. their a over release get some for name. data We’ve these ask we for all on It’s it. calls and transfer they and to in in platform and on service to So known as

that So with continue easy is and platform. for elegant that rate on them adoption to

midsize and midsize different available we our and high said still more we’d because are expand the the really them to So be know market. market. the small high VO market. to offering ever was of in from come end to feature VO at then investing previously, Verint offering a functionality at and solution functionality I want continue businesses the will to our platform. can the try switch end solution to at and to of more don’t bring only now, robust we to Right it that kind our that small look The of to Having that, in convince a want that it as absolutely the what

up, to as creep continue that invest more So can there. you imagine, And as we’ll it slowly will capabilities. gets

Appreciated. you. Awesome. Thank

Evercore. to on Moving at Levine Peter

Maybe normalized worse into bake is back, XX% just you in first Mike guidance. on kind more us you, thoughts a initial – and taking future of questions. case scenario? like cadence Does XXXX, that congrats the can in Or your what’s this the macro guidance? the Just endeavors. Thanks Barry, of one Welcome that guidance? of the help for reconcile pre-COVID Rowan, my for pre-guided

Yes.

bit one the strong are new the you the than little The but one. it rates openings between side job and inflation down, industry it’s stunning. the and continue basic economic disparity that’s to a solid that to this of sense, step a a and interest as other And a assuming we’ve We scenario. shorter there, take two-legged a one has we’re precaution. is ROIs big taken that It’s leg another and XX% if is So, stool with not – deliver. extra expansion continuing matter that forward that’s really within is on and business. the can frankly. looking people just about, that will, This And we

And the is then and you, one I for think maybe market would would Dan the tight labor itself. IVA sell

the IVA ROI, what’s like of are holding customers to curious, kind customers going Or So ready there not to really are labor from being all market? given again So automation hesitant to what mean, just back in tighter limitations with offers? go I the on?

is the I applications that’s the to basis question. is is, applications that awesome those There’s careful the meaning an because really the very trivial. have to required customer have primary a to on volumes not what on going it’s of build One numbers reasons That’s two try and got services on. to I you’re conversation you’ve highly that numbers. and be customization mean would to Yes. got you’ve going frequent to got professional a automate, focus be ask to high

So a it require does significant investment.

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while the there that’s of is, the I IVAs think IVAs just type are of there’s demographics, Because good agent, that’s or thing having accept the the right? they’re where saying, love in and saw and we happening, And continue let the worst get a So more us also to the that the want comfortable to why and accurate one with Will inquiry second in point. you over solution at interfaces and to just And to intelligence have humans, then And wanting adoption a could become more representative." talking that because all automated human of offer "Oh, the and regardless the society step. put that’s they’re is. create answers we algorithms certain would rise simple communicate demographic say conversations you’d time? When just learning demographics that that the people see to you of straightforward of more we that getting. are most Absolutely. for chat experience and where a may averse other think not full and with something machine continue becomes to are people how They them as prevalent will automated want as to change a interfaces than to we frustration do this first the to agent commercials is not automation. the voice more

balance. a it’s So

what pick got we’re spots You’ve to do your and and effectively, doing. it that’s

over would Yes. that doubled our add Peter, I last IVA just minutes year. nearly the

customers. and opportunities so and decision stuff that. to do So on cloud for their automation. our center provider their when around it want contact It to to They center their FiveX, this is chosen solution. exciting that edge And the AI is certainly comes is many know cutting contact future-proofing have also they

thing. We new about our to IVA. XX% bookings are being clarify one dollars. talk just And Those of

want X% cases, mean some – to or X%, XXX, great. I So is I customer, are say, all to in. says, this that’s it’s a "Oh, like, those when to you and XXX-seat saving calls of that XX Well, X%. percentage a say you In go what that’s I’m IVA." let’s over? That’s X% your X% times going we’re of all customer all IVAs. going to in, or well, flex when truly agents Well, them, go deflect XX. in.

seats selling. that up; add doesn’t those XXX it or we’re dollars offset human You the XXX

only they’re thinks in, the spend. if in even result So XX% somebody of though or X% it may all

Okay, thank you guys. very much

move will on Auty Sterling now We MoffettNathanson. to at

believe of Mike, Thanks. dragged I welcome out retirement. they you back. can’t

of back now you’re and world, the the us. rest traveling You’re the grind in with

see you, to Thank you. Sterling. Good

Rowan, congratulations. luck. And Good

going. waiting with figure heck the all We’re bated where you’re out breath to

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that to weakness, at So cetera. retain to of the attract caliber that my that spoke think one one and that of just Rowan’s encapsulated the is do the a question and to in drive and of XX% Mike, talent that’s guys some that enterprise? terms was When we going about? thing technology, in are XX% Or would the just of that continue you some be, then high attracting about look And one. tenure I of talent talk innovation, automation very mid-market administrative Dan some What blend XX%? you to et the is doing all

Yes.

intention with on, So was over Sterling, breadth I Sterling. bringing I’ll he’s I’ll the it five last and we that probably And is and the ago, But the recruited depth when cancer, I of take five first Rowan years. what has. unbelievable take one, with got let when the second in years contributed right Dan person Rowan you’re a the mean product, one.

been But so sales-led platform far forward. the very I We’ve the mean when as company. ambidextrous. the would senior Chairman. been brought that five in us of truly days moved have people in back guys the ones truly last have we’re We that you now us years. great involved including think many I from a was in become while Today, business. team areas, when of only remember is strengths, over have here and are I’ve I’ve comes also the in the I technology not ambidextrous not as as brought news here, our been over been but to that functional five go-to-market I’m in years last not which platform mention were five good relationships it coming critical was and innovation leadership leadership recruiting years. ones has our other the to last well to when with the I CEO, the of Chairman the the the the for Board outside.

macro center the to and look a be the in engaged it’s I today. just market about that are everybody They them. continuing great facing contact to So, future. of spite the is in to time And backdrop with work forward enthusiastic

fall? categories? weakness Barry, in And it the the [ph] does versus Is that both mid-market, mix, XX-XX the where in

primarily XX%, which It’s But number mid-market, the seeing expansion. by commercial nice end driven it. little commercial. channel the primarily the of end in the take of the the is business the we’re I’ll on that higher of a enterprise volumes smallest bit

a and they of We’re getting opportunities bringing us, leads at high more business and have to and quantity small more lot the end. channels of those

some are still those there we’re smaller headwinds seeing growing sizable really not a – there. facing So even though pretty of pipeline customers,

sense. you. Makes Thank

you. Thank

Moving Tillman to now at Truist. Terry on

the the for most In options exercise all so, magnitude? past, XQ? called any Has so much if out is of the base. these taking the contracts on on Thanks. This for you there believe I what’s been thanks reduction XX% enterprise meaningful been versus roughly Terry. Great, to And XX% Robert within in fee question. installed reductions XQ

their the that growth of if Yes. organizations contract seat other It’s areas or expanding organic there pretty growing rate adds either a have M&A-type they that new of the as growth built-in it’s we’re rare. the XX% I do set talking gives customers into Most XX%, they ability – a into from mean in or mentioned about departments at floor was an up Scott, by us activity. reduction for initially. earlier

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slow two percentages years growth about very, with growth talking installed We’re add. off high base very of seat of very the high-volume

going tough of – part it’s of it comparisons. So is up a against couple

helpful Great, nuance. you Thank

at VanVliet Matt BTIG. to Moving on now

question. to that what internationally of I on of how Or we partners moderating? progress. you’re add then there still the do such partnerships the on to in a Good you evening what there? to like kind some relying be there headcount? And plan you big a to the guys. strength of Thanks that, expand guess, additional much on of I to are still international second continue those showing is sort investments opportunity channel U.S.? good side, Should lot you for expect and and making guess part further other going taking look a relative

investments absolute international bookings and us. our growth in there. growth our an terms is the at go-to-market to part first for it we direct lot still we’ll factor in our the take of sales channels the It early over got look growth bookings I’ll is terms Matt, of I last a of that. years. of a days It’s both similarly vector – increase earlier. strategic International Yes. for was expansion. year, in mentioned over It’s very you internationally. headroom continue We’ve XX% invest tremendous coming if And in think That’s us.

Thank you.

it. got You

move Stotler. We William Matt to will now Blair,

come forward. again of margins to future. echo the in luck you to double-clicking, And sentiments. Barry, Maybe you see on and been I’ll what’s Rowan with with look just one a the everybody. of Hey to next kind best forward then, good again it’s going speaking thoughts while. the Mike, on

So we very the helpful. guidance, EPS got it’s

to Thank how the continue you’re guys that and with have you about especially thinking over the kind should the the looking out And been relative expect market to of what be how pull lot further obviously, forward – companies a there, XXXX do terms have we how about, to there and takes? you In of thinking so are next do running recognize leverage you. there, to levers at you levers year puts going would But a helpful? healthy to far. or be of so

Yes. Thanks, Matt.

to Matt, that’s give XXXX, are The term. our more. a – involves QX you a talk me let We the I’d me about a start increase to But expect make slight we’ve we’re position now is mind, that a margin don’t – XXXX, with reason we twofold. longer able is very what slight and our a if improve not overarching at specifically. let from to be bit QX. – And that So increase comments gross QX. following guidance to also like in the to or first we for – said slight XX% margins

to corresponding across our before Given come world an had that. deals across in have been revenue that mega the professional we to ramping the hadn’t have world, and of extraordinary that no countries into in organization these we’ve services with

with have a other of that speed. fair The to talked to usage. as potentially, they’re XX% different Of allow and will business drivers. build up in the that us the need about initiative, there. get subscription is no to future, to and to very go capacity we current we IVA’s XX% bucket margin leverage term to roughly And there’s Mike there expect also – in is Services. fixed his between we the been will doing own Where in costs. internationally in into growth the is the past, to Professional cloud investment get We’ll centers guarantees we extra are revenue XX-XX which you’ve the very get and When from extra improve. the degree approximately, prepared about its that and got centers would to operations, between cloud, data that to remarks, from roughly of long seeing our three get continue have to to continue in recurring, maybe exposed public expect and terms the significant go in we’re against We to an data accommodate our well, particularly that [ph] expect fixed strongly you some the margins the some to public public that the though ARPU get those improvement XX%-plus, and because margin will say, XX% that we margins maybe certainly – oscillation the increases think you own and our bifurcate the cloud. continue have

major Professional double into even digits changes don’t like can Services, finally, in XX we typically, low which [ph] those BXB see – companies, are we around high that, and usage, many time. over oscillate single breakeven then expect any margins the digits going on other On the are or maybe

Very helpful. Thank you.

We Power now from at a Baird. Will question have

for it. seeing the in for that, of worsen? take base. the just Thanks great. wonder would would me of about Barry, expansion those probably and/or there there tandem those And any on of trends if you’re guess stabilization? linearity get quarter, there October. be know what wants on risks Has that it in sign you. usage Thank seat business base you broader of other you’ve I talked helpful, about on pressures you Okay, source these through perspective some some referenced. What from Is seen and any the hardened I any pressure? in with whoever been a a love a kind Have installed to to into sneaking XX%-plus question talk continue installed are the usage in I to standpoint. you too. Just comments of of could industries,

Yes.

me deal simple straightforward. So It’s very and let one. with the first

period, If the ways. there you where exclude both pandemic was

year usage usage to And it just – not was. was There’s were of side. me, QX of so later, rate slightly COVID. there off big – work seats agents enough and people QX you out in the enough similar growth were and case, with took agents, so in exclude much a very And products. the XXXX, on of just the no in if one XXXX, excuse work usage there the because explosion. a expanding, was Conversely, the growth rates pandemic, But UC the additional lower are

can else declines. even slight There You price need speak is something today.

very pandemic. a aside So from normal trend

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you. thank Okay,

Moving at on Michael Fargo. to Wells Turrin

there do to visibility add this the towards wondering historically what what with you. contemplated? appreciate us you like currently here. to some sneaking valuable the just can Is with context and guidance. enterprise it you when move historical drivers, compares would around larger metrics, just Thanks, uncertainty what considered and incredibly there. Does and Hey Barry, input, your question provided, you is supplemental and anything of I years seeing more would smaller? ago you reminders within everyone on thought and you kind relative have the prior the think add how looked you’re compare the macro appreciate to the might as for business be process help help taking was of well. what just Thank the than contrast Does the have to information previous framework? deals

and that, logo we’re to do again sort – perspective. Yes. and existing the the of new historical business It’s Great base to or question, a Michael. going the then answer new maybe installed business talk about logo

actually and and of buts argument more the on levers got I that backlog we’ve And prepared and best the there’s on the in logo, the internationally is And in over terms the sales industry. strong, no so In marketing of visibility one side confidence, business, we a it. the it, growth We have about and of size. many remarks And ifs as is I pull the and to any we’ll see welcome domestically and new good teams and continue to indication by said there. just have market of arguably, the that.

from into certainly annual were be. of of the the quarterly And and on we’re what that installed of – with said. our verticals. prudent, really by we half we growth as macro we’ll to the And but try time, on time, taken we’ve other we that, benefit underestimated believed account, The hindsight, revenue the We being base. we based there, see. what certain comes and we to the always we At knew it’s say. that’s were approximately But chasing – and difficult the at – impact and we

you. Thank

Thanks, Michael.

ladies today. questions that’s for and time all gentlemen, the And unfortunately, have we

me So to over things hand Mike let team any back the and for comments. additional

macro reconnecting But Yes. five look story great forward – see to the are new just you it’s with of to you to spite near term. connections headwinds so opportunity making business new just for and of that long be the over more couldn’t great to back. this want about future for joining of I’ll I but I I’ve FiveX. many In closing, you in a before, say for ahead the years. time, are here in be it’s the I you. I many call believe optimistic today. the that mentioned It’s us also And I known the thank market of in facing to the that just as strongly last Thank

joining. a day. Once Have everyone great conclude again, thanks for today’s call. That will