Zuora (ZUO) 7 Dec 222023 Q3 Earnings call transcript

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Zuora's Third Quarter Fiscal 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. Instructions]. [Operator you. Thank of VP you begin may Luana Investor conference. your Wolk, Relations,

to afternoon, quarter Good you. Zuora's and call. Thank conference welcome third earnings fiscal XXXX

and be Robbie Traube, today, Tzuo, President and Todd call have Officer, our for Zuora's Chief will the Revenue Founder session. also McElhatton, Officer. the and us Executive Financial On Chief Chief Officer; joining we Zuora's Tien Q&A

risks securities concerning considered as several not any uncertainties call, actual cause to that as represent today federal beliefs obligation I'll views or forward-looking and be may that of make differ of statements disclaim These our any results future expectations. today's materially update be date. several forward-looking reflect statements We are representative that During expectations and of to events statements as statements views outlook. laws. under our relied could any our only upon These should from and subsequent to subject

could important of discussions the finally, further For all our unless filings mentioned are otherwise refer numbers SEC. non-GAAP. that the financial with And today noted risks and results, please revenue to except factors affect material our

find a today's release. GAAP to reconciliation non-GAAP press results in from can You

call release website Our replay results, Investor can and be Zuora's of at press on today's found a Relations investor.zuora.com.

call Now you, the to I'll turn Tien. over

last has of That the XX said, subscription delivered XXXX Luana, in guidance, thank income. our fiscal was revenue revenue in to our call. earnings you, where being on And quarter and QX you, for third guidance certainly QX we Thank another everyone, Welcome world non-GAAP at for outlook. days. us. total the we Zuora's joining yet posted quarter, we high-end exceeded the operating changed

that of and certainty, this we our least we difficult invest We've how continue and is at What approached means preserve non-GAAP XX%. macro sure to are X% the been margin reduce quota are operating the profitability our in accelerating Given decision we've fiscal to XXXX. for delivering committed year announced a this we on and thoughtful, level making capacity today, to innovation. workforce by focus of

with and customers have decision Founder doing CEO shareholders. our was lightly. to for and the As the taken company, we're as a want the those our not right But do ZUOs everything And transition company for can done this we all to of for to help the thing the this And over that I the thank I company affected. they've for these years. personally

more to the few and Now, in let some what add take market. me a color, there moments seeing out we're

is geographies I what the time spoken my Now customers in key to days, would customers, more across I say. But of than course, a role. part in prior. And any I've of talking last more XX to believe here's

the billion this see I project that the with digital funded. First, being a metrics. models continue CIO to is subscription and Information subscriptions still experiences customer and priority. in And to future, streamlines Company. said customer as Companies of he was a Services $X our continue be business we the see that any experience

not a to half revenue acquisition levels. be economy is even pre-pandemic is in subscriber during businesses growth XXX. companies that subscription that companies and These consistent outperform For do snapshot, than revenue established with cancellations have the in first example, XXXX, first and that half compared as SEI lower the surprise, uncertainty, customer recently to in those of faces were well increased recurring to of growth This to S&P released going in This with businesses higher or economic subscription the revenue the resilient the year continue found to the are grow like continues our our times pipeline continue year-over-year. which subscription SEI not. total these relationships index world

over technology how this incredible past to an right and Zephr of we from our Just one response of we a companies including manufacturers, multi-billion-dollar companies, at services, help the a subscriber few streaming vision at subscriber acquired executives put largest for the right technology video At offer had top the the SaaS of XX C quarter level auto of brands, two weeks biggest publishing ago, we one off deepen right event, in the the time. biggest had site, day one in companies. front the engagement the the will the

business, cycles just Now Sales all putting in scrutiny of significantly. of volume of customers cases, this historically are risen finding the a facing parts larger it our will software impact this some hold, resources In get commitments new which purchases. extended that picture on uncertainty a being a what to certain term companies longer their certainly business. transformation companies our level due level base, are XX other days being the than absolutely different as about way of cases, affecting have. our may platform. ago, has And installed simply said, projects to better increased scale to on that is some own are made world our they are of is they've predictions In this make difficult to

we Second, impact not are equally. all seeing trends these industries

as a we now revenue with on they is of of They started continue example goal And strong of media New see about this and York subscribers. off differentiated pleased products. industry experience. traction it say digital needed for decline, that acquisitions. our next automate are process company so track the newspapers to they for existing companies that like really publisher Last The companies And their important good we it publishers in to their Times these digital years. revenue billing Zephr, three the seeing base. a integration the help growth million pricing is the down on subscription and in is exciting they give double in build with door we packaging quarter, ambitious a X QX we're example, base looks continue the be the where playbook we're them to realize media lot acquisition revenue to a the their learned I'm a flexibility their recognition integration to scale two can us also with to how in We've role. business. foundation process to their a closed deepening subscriber had revenue QX, how on a kick previous subscriber subscriber a the order and quarter, which play tripling And to and with industry. subscriber is a they XXX is them list we good to deliver and of our For see between talked plans our on company net leading growth to traction entire to to seeing in their added critical a the what more driving our goals. media in market, support media modern and initial prime It's Advertising

subscriber of announced success. being with piece example, their Zephr’s XX% Corp total recently customers grew base News Zephr year-over-year, For one this that Australia, a of

help to and customers As optimize grow, competition for revenue. to the subscribers drive effectively experience personalize these and conversion Zephr our is able better subscriber continues to

industry, decade. manufacturing to for Another the unlocking that auto next models industry growth seeing new are where the is we're business critical

parking, and the This bet insurance, global launch seeing new $XX revenue. entertainment, chose marks XX tire the This car largest them enhance our They billion manufacturer assistance, world one like come auto Zuora the billing our decade largest for who offerings services Zuora our and they the effortless like the unique are manufacturers call direct-to-consumer Japanese take roadside what to of adding Zuora's sector, we're And and manufacturing with another helping Michelin are we have growth. manufacturing to in broader to annual the company of auto more. into they on driver roster. both expertise. for quarter, companies selecting launching now in of higher experience. And Zuora next subscription, to This companies its to make in is to in-car XX maintenance, technology

Third, force. remains our leadership driving product the

that remains the orchestrating in help entire only revenue solution process. delivering revenue manage For them those to need a complete recurring scale process launch to companies experiences subscriber business a quote who can differentiated the Zuora from the

would became evaluated providers clear their both In a by heaters, intelligently X.X solution, is recognized and to revenue a the automated to our In and same has and IDC came IDC this I A fact, existing customers. solution noted the system Zuora and solution subscription not quote-to-revenue quote, and only SaaS Enercare agile only Enercare. for and replace conditioners, Canada's related a platform capabilities stronger it system. for more was plans. maintenance relationship and water MarketScape, usage to the as air good new largest management leadership. could rental their than complete and quarter of billing furnaces, “Zuora Zuora example where companies. services customer the testament third subscription the ERP traditional revenue audit They provide process.” will a provide leader time that their billing product, play as time to They enterprise-grade enable a Zuora replace one from million recently energy and solutions but is to comprehensive

environment, this reducing cash. around are also proposition we and strong value in costs to Finally, fortunate accelerating a have

companies a helps by to lot our automation, high has broad or automation a that of that of a Zuora than have helps that This their through cost out ever. products collect across messaging process. take increase portfolio cost or collections whether a companies time when the delivers it's that one level We quote-to-revenue revenue audit and business more matters us with product entire enabled of fees, headcount at ship

Vivint, leading subscription up Zuora customer, automated revenue order time lost authorization flowing recovery in them software Home signed lastly, revenue Or streaming optimize electronic long include payments, billing $X.X processes. quarter bottom-line. billion Zuora selected help all revenue Solutions for a on have otherwise $X.X directly in platform, integrated process leader one and Zuora's entire multi-billion-dollar will Collect recognition examples their where million Vivint’s a to Smart payment Zuora Some development collect monetization in Or rates. revenue the a in to GitHub, their to recovered be service platform. to the automate and in Zuora

to net So our remains all and out, long-term this intact. opportunity vision of

headwinds. see confident opportunity remain to our products, even Zuora's interest and in we strong continue current in We with the long-term

to quote-to-capacity taking Today margins. path built over least we we placed change at the But Given day as fellow our same our next profitability, approach growth we environment, opportunity, we long-term continue non-GAAP difficult is our to unwavering in accelerating world and the are uncertainty time of at find innovation. customers on the the subscribed. X% The have is to delivery us and to a us where this in remain vision the of our last two The ZUOs. fiscal committing thereby growth our roadmap, to a year. operating we in our on the great and for conviction our margin macro give are while to three initiatives preserving our and our Zuora, bets ability to allowing making right invest many years opportunities, say of our to goodbye commitment expand to

the outlook. to Now Todd? call review I'll and over financials to our turn Todd

The and that our you, for Thank operating the for end and impact, days. and over revenue subscription revenue the total the guidance pleased guidance FX we exceeded today. has I'm income. economic environment clearly Despite of Tien, everyone XX non-GAAP past backdrop thanks for and changed reached joining high us

the from other pressure software have we trends. economic As are companies many current experiencing reported, also

encountered additional some approval. some sales we QX, cycles During of requiring elongated deals levels and

with demand our for I high. solutions continues As to customers be and engagement speak

of digits. In generation has double by top funnel fact, grown

the years. directing of in the efforts we a As we result, over past areas sales the are success couple most saw our

environment. We areas as directing partners Similarly, the internal focused our are navigate to towards help customers resources are they reduce current demand on generation. our versus alliance we costs

difficult made a by profile that we our to acquisition in the align to As drop expected the and force work to significant costs with improve to structure near-term announced the margins. This our will our decision result reduce will bottom-line. customer earlier, improvement XX% growth we cost operating

XX%, XX% the on color future, and currency, as services year-over-year, constant on revenue more of the quarter million of year-over-year professional of U.S. be is some strength $XXX.X at will guidance, based FX quarterly in revenue as revenue our third investment was Non-GAAP this represented around up performance. of was FX $X of currency, or experienced points you of Subscription Services year-over-year. This growing million our we at which XX% with decline approximately services to revenue Total give the our exceeding dollar. the the of Non-GAAP and me our subscription scale. created will of gross in gross million, $XX.X to the let during of Now, reported line margin. headwinds high-end XX% $XX.X over was headwinds high-end gross basis a blended total overall the professional In decline services goal revenue. ended at reported, negative total infrastructure million professional margin a was our XX% guide Professional year-over-year, X% approximately in international, margin This XX expect a breakeven. in to revenue revenue. XX% our stronger result X% a we near quarter. driven by was total run constant services in XX% XX%

our with we was This model was improvement a business. at prior channel. This illustrates margin income X.X%, in of the by XX%. saw incremental margin growth from non-GAAP partner operating we've This working last in year. compared improvement in operating disciplined $X.X gross million, of top-line as basis with investment year. loss point leverage the our blended basis $X.X over quarter resulted non-GAAP of driven operating and an an the Our million the in XXX ending XXX year-over-year benefit Non-GAAP points experienced

the end Our converted the shares if million count was both quarter XXX.X as approximately of at fully stock diluted the method. and using share treasury

the you XXX%, retention me metrics which quarter. year-over-year. XXX% sequentially, of one-point reduction FX key for reduction DBRR DBRR walk headwinds, of points one QX, and the point let dollar-based through our Now, two rate a included the was some or was In

of including impact customers, trends retention to an historic line QX, of buying end QX, DBRR, At with we rates had business. continue that above our contract customers $XXX,XXX in increase had an on value, the current XX XX% XXX of acquired in $XXX,XXX or cohort the continue While at levels. represent Zephr sequentially. spend average our In

IPO indicative of of from to has vast overall cohort the this execution. time this become grown our the business, Given of our majority is less metric

we result, of plan beginning with As new next the a to metrics at investors fiscal year. customer provide

penetration, up move our Regarding and our market from to continue expand we success and land strategy customer strategy. see our

over we quarter of ACV with including $XXX,XXX closed two This six million. more, $X or deals deals

representing billion systems $XX of Turning volume, year-over-year. the growth XX% constant growth transaction to currency our in in billing process XX% as quarter, reported volume and third

gains less multi-product of the success correlated as growth. our As not revenue they we've noted process is Moreover, before alone billing growth, because is customer to metric scale. transaction volume this given indicative revenue our portfolio, efficiencies of

year-over-year, We the metric. have products in provide which full you of visibility XX. and our intention other two with Zuora which revisit both metrics and reflected our products, Zuora It Collect suite of not Revenue transaction volume generated into significant additional fiscal our billing is volume in growth to are

FX. one QX, Now and as to Free cash at ARR ARR $X.X million cash million due looking was with end quarter. for At $XXX.X free of was flow. flow grew and the XX% the about of reported, negative headwind point

may it's flow CapEx the to due collections was flow quarter million. cash to performance best a and for believe timing of our on seasonality. cash over a reminder, free cash a We the fluctuate long-term. basis assess As quarterly $X.X

Turning the of sheet, to with to million equivalents, decrease $XX quarter balance Zephr. million and ended primarily $XXX sequential in the cash acquisition cash driven of a the due we

Now let's outlook. turn financial our to

approximately $X.X QX non-GAAP result from These our healthcare in workforce million, severance, of a expense transition have presentation. X.X incurred non-recurring million As we with reducing which non-recurring we're by assistance excluded will balance XX%. in in shared and expenses was This earlier, our been for QX. of a

reduction organization improve preserving team while These biggest is changes will go-to-market quota capacity. by across the our is our the distributed sales the While workforce streamlining carrying impact the organization. company, entire in

in continue deliver roadmap Tien we'll mentioned, R&D and customer As success. to multi-product our investing

anticipate Looking the ahead, forward approximately $XX we million. action annualized this be will go savings from

We longer of top in fiscal deal cautious this strong or to Turning we to our QX leading expect saw next cycles. to don't currently as ever. in remains year. QX change customers But our as about funnel spending, as outlook, their behavior QX, the are

So being are on outlook. we prudent our

a year-over-year $XXX.X we million, year-over-year of $XX million, revenue XX% of growth at million currently $XX.X revenue $XX million revenue XX% of million midpoint, to midpoint. the million. representing QX, of growth at professional $XX.X Total For services $XX.X the representing to of expect to subscription

includes a billing QX average full services flow. also to first XXX.X of million operating As our impact net loss has impact million. $X weighted be per tax This free a and to and reminder, share revenue assuming quarter share, margin. will related Zephr $X.XX outstanding of fewer a to Zephr cash impacting breakeven will expenses. Non-GAAP per days which $X.XX of also shares This absorbing million $X income non-GAAP

full our million revenue outstanding million to Non-GAAP XX% growth $XXX.X subscription revenue expect income now to of We to $XXX.X operating of $XXX.X XXX.X the million, breakeven million. $XX $X at $XX revenue of million million outlook. of $X.XX, of approximately per million shares wage $XXX.X share For of XX% at the representing to $X.XX at non-GAAP services assuming we're net midpoint. year, of to updating a Total year-over-year Professional million. loss a year-over-year and growth the midpoint. representing

let outlook our Next, year. me review cash remainder the the of for flow

to was guidance prior $XX negative for million. Our $XX for million flow fiscal cash XX year free negative

As the related acquisition of the expenses impact with not we of quarter, Zephr did associated approximately last it include transaction $X noted million.

of expect to incur a expense $X we In Zephr related tax IP. to addition, million the movement

free associated given of We just adjustment impact cycles. remainder the cash the billings flow will The the also announced. through workforce expenses non-reoccurring incur reduction lower with is of deal extended

flow we these million. now million negative free cash for and expect the be to a $XX.X between negative year As of result $XX.X factors,

XX% of of dollar-based growth XX, XXX%. we retention expect For ARR and fiscal now rate

detailed next year. guidance provide how about quarter, XXXX thinking will here's next we fiscal While we're

trends we the experienced de-risking a The assumes we've next the will such, our top-line, year. bottom to we're end approach, continue prudent worsen, range recent want take in the of the assuming that as conditions For model.

subscription fiscal XX%. between we revenue and XX% For expect growth XXXX,

they services we of the perspective, to a To The be is earlier, today Zuora decision illustrates professional will grow the of non-GAAP changed as in bottom-line we collect cannot offered of operating well We With to offer total economy easily announced expect revenue operator. revenue to revenue mission X% serve is are solutions that it will we we to The customers the that, our at believe can that I'll Tien, take backdrop, sustainable customers, These XX% believe efficiencies. a be noted generating this area As uncertainty long-term least year. regardless bottom-line is billing, and around continue their an we next are over tough while I way the expansion environment, growth. Robbie positioned current companies going top-line. improved invest forward. to XX% and and your the commitment has From committed questions, subscription replaced, critical. and will there in. are margin to turn summarize,

Thank you. [Operator Instructions].

today Your comes the Needham. line with first from of Reilly question Joshua

is now open. line Your

the quota more new of about for sales start off Maybe us Maybe you head year? percent bearing here. a the either on profitability mix layoffs. announced some on you to thinking here sense next to are have we'll the assumptions color around the How higher number? can retain following do absolute Maybe And productivity second, you need give just under a you layoffs? expect or

will Josh, take and Hey, go I ahead and Todd, is that. this

focus did in of we go-to-market the the lot a right, you're activity. So reductions

about of very that feel is the I fact capacity. majority that the good we vast quota things retain carrying able the to our were of One

efficient of SI our business, to much we're most several generation. be have see them to last overlay a And handful the only to productive going see and carriers. in help that standpoint simplifying demand those the didn't also activities, get we been quota we going we is, the quarters, territories us then and fact, for In able not What being part, eliminating productive forward. from a more utilizing partners in of were lost over

to that. consistent you the hit relatively more to enough pretty about guidance remain we we've feel earlier. capacity I we quota the Overall, good than forward. move would we with So that And shared as expect levels got

two it. focus alliance the you're super a partners any, profiles differences, on of made you Got are comment getting helpful. that then to the That's there? you're And if from What leads. going kind leads in from And the sources? qualified the more versus that what's thought direct customer process

Yes.

a quarters, seen plus maybe we they what So six be rate. those in and that better leads Josh are over, tend qualified, larger, with conversion close faster they last the come have to is quicker

top our improve look been we've a and we to been driving how a from best of this, hasn't and we business So Partners right, and knee went took we'd them. overall that as about we the at thoughtful really more we've generating coming It came go-to-market, look pipeline and where lead this were was, improve we that's generating jerk funnel, do ahead taking been continue said, reaction. leads all conclusion those we again, at can conversion? the where that how leads be SI from. And perspective, a internal And as studying the our for

QX a where can deal leaves partner. involved grew where we But And actually those deal. included example. mean, Todd were see I of customer And three prime partners. Both year-over-year of then size a said, as I SIs, pipeline, I XX% of our in in even SI those thirds well. there's it's ones, add I and an courses ERPs. system go the our over also that on live over deals, two if they Todd, And that the partners. a legacy some both partner incumbent as implement, also also, they we as the integration two over in of Yes. XXXk mean, of had year-over-year. our our deals our and SI new size And against deals our at business largest through the participated look and doubled source QX, can of

can you as great So we're SI see, getting our with Partners. momentum

guys. Thanks, forward. going luck of Best it. Got

Thanks, Josh.

of next from question comes Your Craig-Hallum. Bennett Chad with line the

open. now is line Your

billings, to new XX net sales expansion fiscal bit ARR of question the and of or appreciate I I force, the volume on in seem for elongation to the XXX be the a guide significantly bake be, renewing XX. So guess kind or of recall deals cycles. renewing I just of customers were conservative more when then, go-to-market upfront see going growth. before a reticent couple fourth standpoint, restructured year kind would guess, to volumes. a little And from that been digging of in that to at to And little and a in and I we we're quarter do from we maybe had to, Or or start I But that experienced going ago, other this significant properly slowdown now that did on tailwind quarter, we're or look anticipate what were structured the volume in sales you ARR, we maybe kind did actually years not a standpoint if recently. here? are actually we, And a refocused quarter? or the going

that changed dramatically you're a quarter the confident in plus? really when ago, pretty growth has from XXX volume So

question. lot saw still since taking growing. a customers a our more install for have at volumes absolutely they talk From days we as XX absolutely did we were what of looking And see standpoint become Hey, the quarter, a things are Thanks look Chad. ago. during we much significantly base the did cautious pretty at changed

to we what quarter to hesitancy down. real in a having was the increase saw for an people saw impact ahead we That to go or volumes next and to commit certainly compete slowing year. However,

pushed hold decisions several had either on out instances upsell. projects on We where put customers or also the saw

news remained rates on So the think DBRR I levels. that good our is high at their the retention

they much where of our but including standpoint volumes, they're fact, they've a of that continue that anticipation cautious. we year-over-year, where only but were historically it's as not And matter continue a improve I've QX, and next look As upsells, commitments we we're we an forward been, front. growth got I from customers making on up year. will from customers can And through to to they more size just cautious think the I as we bring think perspective, seeing earlier. from continue much appropriately deals more as be hit that renewals upfront into

updated ARR about can kind is the the in and relative if direct guide, your channel and to fact how the of are shortfall NRR the performed and in quarter then Okay. And you sales. talk just expectations relative of to SIs, performing of kind they

the don't know before that materialize. either ended healthier decisions. of the we pipe has entering we strong. are quarter direct the didn't very or seeing our would I We're that I as in channel it customers call quarter ever, And they make cautious pipeline again, But strong. been fact, top this very again, source very be

quarter. are and we taking cases levels of the very multiple things through seeing well we're some also longer being taking where people seeing are for We in that approvals, they're said, But of where things during periods time. did areas

in the The subscription. substantial first very companies example leave towards quarter. I their businesses Gannett example was a that would maybe is, good that have a need to shift

that be the subscription versus And seeing reliant certainly to you're more made a seven-figure billing they advertising. pivoting Zuora platform. to company is a Here's on commitment

XX You're seeing out Zuora to the the one largest XX auto committing now of manufacturers auto Japanese the making manufacturers of billing platform committed. of

revenue seeing can we be areas said, cautious being customers automation, You're business. their But are as we're still efficient more hit manage on people spending. on how many other macro Vivint, companies on their being where they like help headwinds that of with also the

is Tien. this Chad,

we think channels want works. that I are two SIs distinct Just have to to exactly and jump it you It's how not they in in. independent. don't direct

it potential. really companies the to companies it out the in companies set given might them, or off just, say a terms be slower. direct. the has media our depends, to. growth that as little they're have But are seeing in reaching practically of we're the of one on us we would target set versus of you're customers, are and going system tech still of bit one direct them moving every SIs, this view gives speaking, But I forward, macro that is stability the gives large We But they partners They bet accounts, more our integrators. paying us need uncertainty right? a If business. It

it's more co-selling a environment. So of

getting of so says, our to pipeline. more our when organization. as be able SI our Todd learned accounts, our our a target to, already accounts, to could selling, terms in organization And we fact and from the right, to SDR and efficient, this partners And resources drive continue in drive leverage are between, we're we've back in the that means -- right, balance

Got Thanks. it.

next line comes Hotchkiss Your of with Goldman from question Sachs. the Adam

Your line is now open.

remaining mirrored customer cautiousness talked the there? cautiousness that to on spending pipeline hand, seeing subscription-based hear about continuing but other customers by hand, you being talked towards the business really cautiousness one momentum model transformation You about strong. Are on you seeing models? Are

say the bifurcation the we're bifurcation right? interesting thing seeing the A business, the pipeline. the of bifurcation of in I’d almost deal, is, a

can And ways, is important really that some so by see by really how the industry, but it company. to by you

to all this And go so buy, manufacturing is continues the that effort streams new the of revenue invested see IoT, in sector we media we we after. vast sector pools saying can tap

portfolio. even We're a And product projects some of -- seeing pretty be broad smaller. also we have these might

every an in, you're of a single has fees you lot a a there's or have when saved where our revenue So more once bit the audit to of benefit. to proposition goes to you product we able a revenue of Zephr mistakes, A cost and little of lot that of parts the audit clear the including product as bunch quicker, transaction. where we're that recognition, resilient our a value need are savings a did, land acquisition less whole because example, times automate the

going recession have economy be deals a put clarity Directly X or X, know a accrue XX seeing, over a to I'm our on of of those hold. because I the inflation XX -- likely to that months to the in benefit are hold, causing going through need so we to that long this is time And terms continuing. pipeline now, see large We still this. we coming still to give important. on days our that to going to of look, are large uncertainty companies the investment I going business still of is months? a before be? where going few are to It Where's to of our doesn't is a are the speaking, put where they're is Is do. raise so just The not? is be years, those we're X, to parts them where's in to the to We employment six that percent decide. to going I target are be us Am period down, where rates? continue more out. or model want go? going But of Those till to look, simplify Fed it's to And these picture that why parts interest to pipeline saying, able investment don't before Where something another like of make subscriptions say, get able need Fed but in because be?

a we what prudent so And if what saying, uncertainty into that. make because let's guide. signs have have Todd's this on, continues is we done look, sure, And certainly of baked that

Yes.

its Gannett. there, are I close the think cautious business. with Adam subscription is, I up think He don't of just maybe saw that they jumping into being customers

where taken manufacturers. And for that account like, into some able this. we've transformation, year. the saying, with won’t saw businesses there that our They're year offer hey, are decisions be oh, to seeing and it's take I or need make the and you're this of balance next But automobile are we places those this You shifting, to longer.

it. Got super All helpful.

the net sort think of XX% year, of And relative cautiousness rather for about though cycles? to say would of north like that that of XX% growth something sort the is primary be there being so to some the to next you're when XX% because fair you piece is it extending understanding fully that slowdown around pipeline, the new of deal a rate slowdown in expansion there customer indicating than and specifically slower that

Yes.

volume say that's said existing again very could to let's our also growing being taking next doing, think are what both or at we is I how continue would is, what I that And I asking I about are think expect the did a we customers we transformations the And through certainly that assume that the XX%. but what about now half seeing that of when do to thought second year, derisk different you're enterprise on really have. we're that customers. on and how great that get in scenarios, gets the is, worse. products we're just hit We additional incremental cautious They're but and for customers, we looking people us, pre-committing on it. think us business. bit from They a

on but of be that those, be business, We they on wanting again, we're a really growing some seeing. cautious to take what will will

all lining customer this terms in base. of silver One

far new would and know customer And I this don't so that is our so I to base say logos. all go

to we a I are nobody's it, the people on to going going not they're base, going you if critical do very to take customer product. they're do projects, project to at because a on want replace And an big to mission big think not existing just a sticky like have slow take -- system. very, do certainly balance, to it's look

certainly going and The really And resiliency much good think about is there's we're around appetite your innovations? really so be the new And economy, appetite that. What think of long to uncertainty is, our the volume We as for is sustainability, adjust plans question as prudent. need feel base. we we it's, But to in our your grow? how customer going to there. I

it. Thanks Got Thanks, Todd. Tien.

from Bemberg. comes question next Your of DeGasperi line Andrew with the

Your line is now open.

geographies. specifically in of a and you any seeing worse the I would trying weakness collide more you the drill say been were end that down in markets, had than one broad specifically based, terms is the another? particular to geographies, you has little Would tech attraction beyond COVID? how market But a if any it was me and and during there's end And you else? media. as is of compare similarly, specifically that bad tech think happened to something then kind what there -- would And makes that

have me jump softening the and there, well. continues continued And in we saw And to bottom-line, Let the to general pipeline interest demand The overall, on peers. geography our as macro. softness some then, it's we similar grow. we in to some due side. say the definitely The customer the as half, the second

in but a impact are the from the in We pipeline. the also, as strong growth very both interest said, you And products. seeing macro,

when I competitive mind things to thing make in keep seeing take is, not really just We're profile. customers or lost, a we're change the that the seeing seeing we're those to longer or that's important, saying being other think in are decision. deals not push, Andrew a longer it's taking

I than think very this COVID. different is also

what I was it think July, June, the tame V-shaped continue. quarters. you will, thing that, feels is a have Here but be knew going for the March going economist, we clear going were where few in situation on. to was be a the no recovery, it predict know, will pretty we to the right? may like don't April, is, or big to I'm in we What's questions in with But energy was I if uncertainty going happen not to be economic uncertainty to certainly where inflation it for able Europe, resolved a U.S. And those

of were a two I'd The overhang. saw maybe things we that also customers good then oversold we went COVID other weren't is, COVID, they what with volume And using. And got when what seeing other targeted the We are really And correlation those fair fits have think that add we the bit probably that us. tight committed we'd a we've thing you're now I comment, also hadn't volume. a correctly. customers through and of churned, we had about was there the number between

are companies. we very different Yes,

out expect to our seeing I So I to They we're anywhere, see that continue retention improve improved. year-over-year. levels, wanted that to point they've don't

ago So back don't when retention have you COVID. the had that went we challenges we a couple years during in

in a real [ph] that's differentiation. think I [quote]

guess, follow now the number question that of seasonally you the is, provide then about of a X%? then, does did secondly, What above why the next -- of something margins in assumptions the why Thanks could XXXX for question if probably expansion for better XX%. stronger earlier a that. it Was the year. continuation is case before low on was may margin high-end or range, of if could comment then, terms it end talk if assume a quarter? kind Adams to And one, we floor I that. those above relative get people's than of end the add the the to conditions up of we a And bear to the trying be a provide current up of outlook. I that And guidance, see the to

So Andrew. thanks lot, a

we about only scenarios different happens. a really ran bit you the the and to a there So of what fall worse. seeing that the we're maybe it of we in let If continued low how little half me take got through, what second gets a not but year, throughout talk little case with the year, of standpoint sat bit continue from actually this next

can half workforce actions. that economist, of want not our skis and next a think invest and I'll get when update be to what the We to change, resilient. and but pipeline We sense visibility And looks relatively thinking over a in Partners able you get and growth, we like. it more capacity doesn't through to bottom-line better. what took next continues really put But we that my quickly. improving those a we'll about run. overly more continue like, and the our and tough time we optimistic is looks and move what like. If I'm to would felt point accelerate our On completely out on of slightly a absolutely get move the bottom-line on and tight And the make challenge, year. talked like see don't on very will high second business, when an our we X% towards XX% in dollars thinking of certainly to good SI part is a call decision we can we give we operating be and like. could next first felt XX see to those a get bit with the end, do at time, day would at there. we to top-line we we'll the how will about year place business about look the things dollars minimum, the being days. carrying right. in said quota to We that you're as it We non-GAAP growth see higher, getting what good we it we make we're the we good direct realigning that return we We be a I view different things this year. profit certainly went certainly scenarios ahead is, or a deliver year, people what If having have it the have

Your comes with Jefferies. from the Thill line question Brent next of

now is line open. Your

out to you how Thank questions. for for taking Robbie Thill. Maybe on to Luv is dollar-based you, my Sodha with, want that start This Todd just again, Brent and Tien, going back net that retention, remind us that of give mix? guess. volumes? much And moderation us you've just a seen, is the by pricing expansion you sense of just Could I driven

making the sure relatively about, products of Yes, is evenly improve rate the continue based as Luv, up sales last three over next customers. our and the we've third The it's between I would talked things. absolute to quarters, say retention is It's of several volume. we

were less a bit this on the customers we more a were were committing. probably little on cautious quarter-over-quarter, volume what as bit balanced quarter relatively they it's so, And

Yes. From basis you we FX headwinds. full the year remember, have do continued

a right, when number, the baked At So there's level, that that's right base you're dollar going currencies just loss a way the work. renews. into to the be taking deal non-U.S. headwind there,

-- on, one pretty is a top you it. rates I I ask still moderated guessing the and the to quite have of is close I'm funnel what Got wanted the Todd, strong, are bit. mentioned that guess, strength the driving

are the top of funnel. qualified strength to as these color or like, So the any what the drives any to color into, leads

anything with has funnel And that let actually that, we've off. been the in start it finish and So maybe qualified. got I'll Robbie

our about been what But teams. and subscription So an not opportunity qualified existential by business. a talk about very when sales it's accepted we is, businesses for seeing strong has being funnel, talked certain we're not have we've requirement that that an

talked we're in We've what we've about talked we about media. manufacturing. in seen So seeing what

do their save this, areas, and recognition, solutions, other several collect we in a able like our helping times overall really companies. time have revenue, both and being for revenue collection companies money improving their I automating of good to rates, The think job of

things So certainly but of let for helpful kind that driving Robbie, seen the that finish those I'll of been in I've the maybe that pipeline, top you. have are off

Yes.

mentioned, best-in-class We And the we of list but marketplace those. and you the a reports so continue we reports of at. as people on the Tien leader tracks in IDC to bidding perspective. be look see they -- and where as the MGI in a the just that the will natural the And on the saw are also leader space leader people

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billing for confidence fiscal last de-risking of kind like what for it. to about obviously, I for Got one, the And challenged XX% Thank worst-case source, I guess commentary is XX. be this gives the scenario. you you it. provided seems if I you. may, quarter. Todd, that know, that the I one guidance And guess

the continues be to time us things So high. give some a think couple I all confidence. an One pipeline is

with emerging pretty their as practice an as adding us We they work say seen SIs fastest continue see some the they're Deloitte to with the invest help of where it's they business. whether seeing we're We've that growing grow example, that doing are actually Zuora have. to SI people the significantly, the

seeing a of So doing we're customers that. activity around lot

seeing, of quarters. also bear full here multi-product come kind We are our of couple the over to solution last really

So our revenue can billing, lead not but with only we collect.

the can only existential, near-term goals and that objectives the achieve have. very many some their direct product not but they some again, absolutely our that Now, growth achieve land and we and helping quickly, with of of companies Zephr, they're

before. this have levers And at disposal. We lot of our we times a talked about many

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standard transformation need prices, really modules, customers, or get we that can days tracking they're big to with interesting. land is they're acquisition recognition. Their help less. -- lot to So a can we cycles revenue deal even rather out than We selling land when the And a can that basic really going version too. we going our excited is like with live. of this sales non-media a of XX Zephr really, land with this for one product why of companies that there show are just And

profitability. again, of And we're to we have took level that we that our good we that sure So we a uncertainty, the at given but have actions committed the But, do lot disposal. did levers guide. of broader a making

to We've remember, get And their of can if for now year. on up, line, visibility also for we on committed we we things dollars And next that, the see thing as I'll we that profit and the we take as been we as we've if put an started committed quarters bottom-line floor got a different got look to a to at environment de-risk that XXXX good even got the lot several ourselves got we've scenarios, last XX% minimum could a but and would plus is, got the macro could -- And of the absolutely we've the more into say we really be worsen. And focused customers. what's really don't businesses. comfortable ability going X%. to total looking we're ourselves felt, really picking

Got it. thank you.

the day. you a participation. your concludes conference Have for call. This nice Thank