Zuora (ZUO) 29 Nov 232024 Q3 Earnings call transcript

Good afternoon. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Zuora Fiscal Year '24 Third Quarter Earnings Conference Call. [Operator Instructions]I would now like to turn the conference over to Luana Wolk, Vice President of Investor Relations and ESG at Zuora.

You may begin your conference.

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

securities under reflect be several we of considered Zuora's call, upon differ could and Officer. events Tien that Executive the the views our Officer, federal have statements On call to today expectations forward-looking or us and joining Tzuo, date. results as materially forward make actual President our update from cause Chief expectations. Todd may for as that statements These views Zuora's only obligation statements will represent be our session.During Officer; subsequent McElhatton, future Founder outlook. law. our of disclaim will Chief and any beliefs Traube, should relied as to Financial today's to looking concerning Robbie Q&A and These risks uncertainties be any Revenue we and any Chief and subject We statements not of representative are that

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

investor.zuora.com.Now to non-GAAP be found and on can a from today's turn of call can for press call replay I'll today's at reconciliation the you, You Tien. prior release both Zuora's the A find Relations current year release. results GAAP over the press in periods and to website a Investor

for Zuora's the and fiscal earnings XX% another headline we our revenue, have high $X up adjusted for and on us exceeded thank currency exceeded everyone, goal total guidance was XX%. we Luana. margin full to million, XX% Congratulations, million, joining and exceeded operating was quarter of plan. quarter income.In grew you great by subscription again. end ahead I XXXX to X flow ARR back. QX Welcome guidance by $XX you, QX, It's as quarter our revenue And the say QX Non-GAAP year operating where subscription constant of reported. to that free our rose cash in income range Thank so revenue, would call. today. expansion. you, third

macro XX%. nearly operating for breakeven was position deal customers enterprise double-digit to are this year. in a We've a taking allowed this huge there delivers where And increase and say in longer.I our things mission-critical QX durable that the FY ago. our our even Our free This 'XX that Todd that have are deliver done environment X illustrates scrutinized budgets accomplish this: technology. year plan non-GAAP we is will X margin a that outlook from us while cash $XX just as business for growth building flow to positive and a million cycles are adjusted would swing show, our

our recommitted up in commitments know, industries examples. envious In focus This QX, service our many to gives high-speed Fiber, you some to we Alphabet's you obligations. companies work that quarter saw performance broadband with drive dollar-based companies increase give on Google largest RPO, states to around a X year-over-year counties. that me the chose world's retention in helped of. or internet a that fastest-growing we would This with quarter.Let world. total Zuora. many of and expansions As all us XX% base also XX We XXX% drove our several be rate in the And these over spans QX, QX, multiyear and customer remaining expanded and point across

they to order grow. revenue to as continue full Now, Zuora will power GFiber's process

yet their of automobile of and largest the commitment our of to is QX, in one customers, another a for about Well, of which and deal world's choose course, Because XX power companies expanded we know around signing our one to of X one renewed our of installed technology, companies vision, the telecommunications in years. them, world. base. our entertainment revenue continue Not that, all replacement.Of our only business you Zuora isn't top X-year, businesses. was also unit, the As XX to to this X-digit just growth a top which another competitive the X their recurring people, drive also companies Zuora

accountants, leading in complex manual their Zuora legacy after and built meet needs. example, high-growth accounting a to FreshBooks, and for business intervention previous invoicing systems QX, software came required For owners to their

revenue, to streamline power recurring including and they consumption.As services. their simplify with technology how a they platform to example, healthcare care Now, another manage leading plan Zuora, Zuora selected

flexible, an for QX, Zuora We of above using working over largest Talent more will be packaging revenue deals is LinkedIn LinkedIn, have We XXX in After we the And we expedite operational for professional amazing stream, in world's of LinkedIn make manual recognition is by go number why selected up their Zuora. driving minimize quarter. need in-depth live of this customers, their along of and QX, and partner, their efficiency. large quarter average saw X to uptick the an time Zuora for In online both on pricing the course, to LinkedIn companies an processes search the customers intervention in to continued their now contract right with with market. This number to Solutions. now the is value revenue within or these their with $XXX,XXX. network, subscription and at have them

And last integration partners important to in to This were saw with quarter, $XXX,XXX ACV at over innovation. QX this $X incredibly Because more we constant I'm we than move pipeline.The solid see that strong is and of X our second And to a system Zuora. of large us ever. course, partner-sourced new economy. QX, excited X we our we technology continues to to deals, us these an deals are to Why? those pace deliver with of million. relationship that deals X be believe compared to X results In continue enables help thing important differentiated companies of continue year. Of subscription above for entering growth so phase is, our our the or technology

explain. me does all been deliver today of course, recurring great heard a for past the Let businesses. What fatigue, years winners what all shakeout the the They growth the or SaaS The of many era now just revenue. relationships recurring growth. means, companies But many however, of a is that is shakeout streaming of create subscriptions subscription that to our using subscription is our phrase using or too technology are you have have to And period it Well, subscription have the too have over? XX are idea mean we are applications.So seeing happening. is that not. our we recurring not services technology

Stockholm, for to In international York, strategies create Munich, fact, if you in London, around is our of to the Paris, events, example first Tokyo, showed came New for dominant that Subscribed any recurring X we growth: consumption. or one how emerging are

our consumption new research with BCG an models years. fact, of in last In found X hybrid the increase almost over Xx adoption

expanded and we're is how as right like ask longer their or global have seeing in Zuora to grown to to better customers. now with to understand have tomorrow, new call platform with model.Companies customers Research, consumption more. third-party habits. games unbundled their stated for greater you providing recognition consumption-based also we to like they the entire to than data, product raw no newspaper. strategic their their pricing QX, IDC offerings, our is that dominant emerge new million portfolio buy by what I'll that Times, era, offerings, firms. new or people how into companies for allowing customers revenue example, sports Zuora Consumption unbundling. Europe, bundling they give And research example, this this is these and deliver second has transparency, an XX value York are to And seeing We're of New subscribers. of adding for in use their news visibility Consumption Aviva, strategy the take In so, in exactly leader a their companies to they especially usage help just more or translate industrial And The capabilities.The Zuora Instead, digital and subscribe cooking unpredictable that software

market-leading QX, across ZEO for retention Command the benchmarks announced for (sic) entire products: the customers capabilities subscribers to new would a Zephr customer their the for with Zephr, Payments, and technology, with enabled Billing, work, Warehouse the Platform, Zuora quarter, just year. our Zuora understanding through combined builds Zuora we not I and our deeper that Studio, family base, so, of new BYOB industry of Integration but conversion data, [ entire offers.All Center Zuora gain helping BYOW thank and in through Revenue, of Hub. drive the And this user Zuora like on their to own with them every the QX, including closing, a Extension Zuora ] Zuora in In their Zuora for personalized

built have biggest base the a customer We best brands. and with fantastic

have over review We take new have into have our I'll of turn ZEOs we us financials. and QX the into the passionate to and suite, to we QX we to constantly that Todd a the are place innovating, technology the help year.Now, team call right seen in Todd. which momentum through

extended have would we QX, and double-digit post see business sales seen what what can thanks do. cash backdrop, and cycles we the building committed continue Tien, again flow. you, In few we that once quarters, are growth in our a call. said all with we while joining for to did double-digit operating leverage Thank the we of long-term past Regardless healthy generating to QX. durable to delivering over we Consistent

exceeded of revenue, the X for non-GAAP flow we ahead guidance income range. plan.Our end adjusted our our of full exceeded operating fact, and all cash total goal subscription In high revenue, free year quarter

X% year.Non-GAAP was was vendor our year as year by Professional in a margins XX% margin integrators basis implementation services up our year between professional million, optimization Non-GAAP to QX our subscription $XXX.X and we year remain of and hosting million, our with revenue decrease XX%, over one-time and expect gross XX% XX% System Subscription similar This an total was X%, be In of our XX and reported. growing SI over increase leveraged was gross for subscription XXX year driven basis solutions. an year. performance. start we of credit. XX% year. partners gross in near-term, negative Let's improvement constant of quarters, XX% services represented was over over over $XX.X points strategy, prior over $XX currency year an revenue Total cloud QX revenue. a of important piece XX%. and margin to improvement our of was of the million, points year over revenue

customer in to plan may make margin gross revenue or professional services blended support is fluctuate basis XX%, near-term services of at subscription Our for based non-GAAP was year. Professional XXX year long-term margin run an investments points upon growth.Our increase breakeven. over near over we

operating significant basis pleased operating the a of to to share This year margin in was XX%, by our investment. compared non-GAAP last $X was We non-GAAP and QX our over of end million, resulted commitment are This in QX income $XX the line a our very million. year. by and exceeded nearly $X.X points growth outlook of prior disciplined that million X,XXX top in improvement continued to driven high

Dollar-based count million and dive Lake.Now metrics. in of second year through X at count both of rate, tranche share point shares, the Our treasury X-point the issuance XXX.X some our of The or as retention and other share primarily was reduction DBRR, the stock a debt methods. of the fully diluted let's sequentially end key convertible approximately year. over up ended Silver increased XXX%, quarter if-converted with using

expansions, RPO of contract to driving commitments, long-term were and Tien As grew XX% saw XX% over many we year. RPO a noncurrent our year which growth total noted, year-over-year

In see very customer strong rates. addition, we continue retention to

represents our solutions to of cohort innovative contract business. or As sequentially spend giving average value, year grow more is continued reasons of of year. XX QX, ARR. more we customers stay At and had retention a end that driving $XXX,XXX we're customers as with at deliver up and us, in above improvements percentage we X XX% and the over which our value, and This XXX

last in free This million with million, At positive deals quarter, X ACV of deals XX%. at the in over $XXX was looking flow more, ARR This $X the up QX million year. QX of cash we with includes year.Now closed X $XXX,XXX and QX, of consistent or from Adjusted end X of in flow. cash ARR and free was grew prior quarter, $XX.X non-ordinary due X adjusting flow improvement cash flow, believe on course capital for adjusted Adjusted costs, on flow litigation of vendor last best quarterly a nearly over meaningful expenditures, cash QX a collections, acquisition-related basis annual fluctuates and $XX payments, million of as flow costs. of and cash free year. cash the is an seasonality. operating timing is assessed to cash basis free We the

and I business. Total into ended in have of cash we X of that $XX.X Lake to exceeded As final million. equivalents, cash Silver was quarters X our target, sequential sheet. a In durability noted received the quarter million.Turning year, We which already we QX, of the quarter events balance the million and cash $XXX.X increase with health Partners. notable the $X.X affected the demonstrates from our tranche a our balance. CapEx second earlier, our annual We funding and for had

near anticipate and with associated the to the of Additionally, In a through completion we dispersed challenging, the we litigation term. continue settlement. QX, remained macroenvironment this payment

last business QX as revenue $XXX.X our revenue customer implementations.Starting $XXX.X to smaller support partners million leading of $XX.X now $XX.X million discussed in $XX.X revenue revenue quarter, services subscription $XXX.X We million is currently portion to professional of with million, of our services professional of we our total to a we As expect million. our mix guidance. million,

and operating $XX We million shares assuming non-GAAP million. to of share $X.XX non-GAAP $X.XX, of of net income per $XXX.X $XX to million, outstanding expect weighted approximately income average

growth $X.XX million, million, revenue, subscription million For total revenue guidance goal to services million, flow. of $XXX.X full outperformance weighted the for in $XX.X on adjusted cash $XXX.X outstanding shares million, $XXX.X income make to million profitability. our assuming we're million net range $XX.X to to non-GAAP raising approximately a operating $XXX.X $XX.X now year, and income per of balancing free operating non-GAAP the of income of revenue the QX, We headway million.We million and porofessional tightening of full on non-GAAP for $XX.X of continue and of share to XXX.X year to fiscal expect revenue we're with $X.XX our based

X% raising full minimum nearly expect in under to is midterm flow are outlook our free million X%, This share fiscal guidance For flow to be year a at 'XX year, be over from increasing X%. we Similarly, at are fiscal $XX for to non-GAAP the an year. from cash 'XX. annual we expected fiscal are operating of outlook adjusted the we more. adjusted our for full improvement raising free $XX million our 'XX, beginning Recall, margin, 'XX million we closer dilution for or XX% a cash a fiscal $XX target of now fiscal to at midterm of the X%. We with to target of which

purpose, shares and net fiscal as calculated outstanding divided year.Turning forfeitures the the DBRR equity is awards to the of fiscal at granted, the total dilution year, number during this For end ARR of growth. by the of

wait is we year color For to XX%. fiscal said XXX% believe of provide guidance XXXX. fiscal quarter, to best you share with and the expect booking we is our to largest of the full we Having approximately year, it for ARR more that, ahead. do X growth want DBRR on some Since year now to XXX% quarter QX

at expect fiscal environment. As end I growth. be our upon point we near based noted, ARR this XX% approximately growth leveling to We current in the believe to term the ARR of the 'XX

believe it I of take trails our when to capacity you we the recent a expect work. to on continue is we growth growth macroenvironment but implementation professional SI the be partners this changes, trends prudent We more by have revenue our services would in subscription sales to to and ARR accelerate growth remind couple of quarters.Given business, top point. the the at line product that wise also

revenue total of mix our PS our expect revenue. XX% we be approximately to such, As

backdrop. to Lastly, of margin we are regardless operating committed the incremental improvement driving economic

and As accelerating continue you've seen year. operating been this plan non-GAAP in next year, margin we as progressed, have aggressive quite year this to the trend we

QX further the subscription operating the margin, to defined our did at is year delivered of would on we objective as exit closing, as business. we double-digit revenue XX Zuora over growth growth said illustrated non-GAAP and is sum margin.In Our a Rule do. XXXX of rate, has we plus fiscal durable, strategy that and run a what year

customer rate strong, Robbie, over it flow.With to and to and We enterprise profit turn continue margins, base, I'll expanding take will that Tien, increasing our expand cash our and while retention free your keeping the operator. I questions,

[Operator Instructions] question Rob first line Baird. Your comes Oliver of from the from

Tien, I I for question X you. Todd, a follow-up for had you, and then, had

called displacement. competitive the where is And telecom this talked start, row to win. you've a about in a a I X Tien, in So quarter think this out you second

dominated know I by they'll think another that was those while, around been market a for who've player.

your to in then a this signature you And whether is telecoms, a you in to now market success with curious double in I up. Zuora's guys called quick quarter an hear Just follow think was some opportunity with this last it take out TELUS for new on I had down wins market.

Rob, think sector seen the that sector, technology, we've sector. inflection is say, at say media point the I the telecom to in, the I'm this don't ready that manufacturing and

to coming if XX, that what if company at be think cases, or telecom a like landline is where company. these are new a is these pressure that's do, you you shine, and other to that's look it's at newer increasing. industries, XX and subscription company, the on especially I look services, us. and this be that and And telecom the be think going companies business, SaaS the bring it's services all is, you agility in for businesses not over-the-top TELUS, only necessarily much we years. a many need we I to XX, fast-growing of say that's corporate mobile been many see very like, to we these not differentiator to It's I'd to going the services, business going around services, of execute, do company same the some the say, to really we the newspaper where that

And then, Todd, on the great margin cash side. work just question side and for flow you. free Obviously,

into wanted the about there Just the is you that customers? of get Just to end relative outlook view a top of in the change just headed of to whether conservatism? Has line revenue, around ranges in that. ARR we should tweaking for macro the the to how the for the year and here, the any guys terms outlook, to in think hear sense your curious or be relative been

we outlook We'll through X the the range. which way quarters is perspective, to in being are look from After Rob, felt and year, where end. a end at XX%, X the that we're appropriate to going take within quarters of this I is say, and the range.

year, elongated Nothing cycles. staying said we've seen sales As We're same all changed. we've there. the still has

we'd line, we good we of think us the be year. through talked the we've a look, approaching And didn't so we significant of a would point we what I a XX. year go see next of line. bottom how year, also And acceleration but how that done I'd be an to Rule year, bottom we end whole had top And beginning that's the in line. this as acceleration into we And at that say, not of seen you've said about is somewhere only was, exactly if the around put for dollars this thinking year. what

also top only but growth, have have line margin. line durable now double-digit a not double-digit a So we bottom we

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

multiyear equation for just of up. historically, just just So I'm and sequentially normal. when or deferred this a been there from the alluded think think the they've billings guys billing timing I where deferred think was down on And were Todd, revs billing color if to duration I to some just sure rev maybe not than deals quarter? quarter, Any the maybe I this you side standpoint anything into different was related

it focused as That's booked. think the absolute Rob, going really the we've business a to as while, to about ARR forward. growth. we on dollars way have It's that we've model talked we the Chad, keep for a as we -- sorry, want for people great I'm chatted

is look you different know, FX from only that the there's saw we of expand There's largest really messy one when a that we really it's forwards, ever as numbers, ARR, terms. largest our with billings one same companies. we evens companies calculated but not a be at really time, with the to the you manufacturers. extend best but did looking Over As And out renewal way there's some with talk, on thing us software other the had numbers. at largest to it think We billing Fiber, a [indiscernible] Google standpoint, ARR. the pull take in quarter automobile the relationship, software of nice the world certainly

not making so out current only And strong had a only us. long going not growth the them, with and but commitments long-term RPO really for with we the in expanding term those the but RPO people

deferreds thinking, in terms Yes. RPO, seasonality of this normal baseline whatever you're like No, most bookings or quarter, a that from quarter that on were looking is? sequential just in RPO biggest the obviously, numbers seasonality is quarter great. feel like whatever does Todd, at baseline I'm whatever the your software. it's But fourth in or normalized just

just Yes. ebb there's Like I and flow every said, quarter.

pull-ins with have might point we might different. the terms during that have are at X something quarter, You

of consistency that's gone one ARR model lot really of to whole and a so isn't people number really can giving we've of on that. number, that reasons there off So the that the

and X also. Todd, you Okay. logos I on maybe, then about follow-up. think, quick And talked know Tien, new I maybe last quarter,

I up think and quarter last XX% they were decreased. cycles like sales

also be sales I think to growth I'll about a maybe volume color of And items? Any quarter. talked I into resumption hop think talked about also And off. those you down. last you then cycles continuing

experiencing, asking companies customer and our color longer-term more unknowns that's coming enough maybe led are we're experiencing as asking, the say, to we thing very we that be companies, same we talk around, optimism. you're is, in hey, to these company as look, what muted every probably in in certainly about optimism of But marketplace to I still stabilize, things conservative. would whole, we on base call. around. the that the are some the turning but would think we contracts tried there many that to things as I seeing want be economy want is the We things a maybe do Clearly other Yes. seeing our there's see certainly out

I other the were lands have the guess ability add to the that I agility a expand year-over-year. over one And only said is year we time, enterprise color that both still the this going in the that we of logos actually Tien's land things would them. customers front to is the after to smaller did at runway beginning new going And have number to of the we of we was had that. up same saw good of we'd

that feels that working like is well. So

deals $XXX,XXX. had it, what heard over addition, X $X we In million, deals you over was X

addition in to space, a smaller nice landing things we So some at some deals. also have meaty

And that's important.

how our customers customers, see well. engage our their they give as do and for key do their ourselves technology we we flexibility allow of a own in We to the same for could right? what You say to part would customers that's certainly

Needham of comes question line Company. next from Your Reilly the Joshua from &

right. All

could question hitting Or of XX% How off shaking up linearity December, January? closing do November in pipeline month you Another some of for the pressure have will for month critical which take guide? the ARR be of QX. the to and deals that setup terms visibility foresee the some do here of you the in on January here

Robbie. Josh, it's

think, there pipeline I for us of grew well. big quarter-over-quarter pieces think the I is, really X

you pipeline also of has been a our as at side that And to saw rates. look that new good think good win it, in of very some of I that we us. QX on think those led partner for terms really view business there's a especially in high-quality I

not what guess, do usually I I'm anything we different seeing Josh, on But sure I'm linearity. that than

expect quarter. this enterprise know, I in and way, skewing business, back that since be the end a ever company been it's would I've would been way every software certainly pretty again you And this this As the much to always it of quarter. sees

It of is we what a in of -- And some you of seems of with know are here. customers? services better some then your subscription customers BXB? are headwind vertical. bit little seeing you volume some a just obviously, tech BXC some you seeing the versus doing seeing like less trends tech some the of your Are Are of largest from better those terms BXC the

that to which and entire other services There be streaming are at market which shakeout drop. the space, the big our to going customers and that you companies, a hey, the call chasing that there the news are down, newspaper look look, could People are tried and seeing going drop, increases. to where, versus you markets when BXB, allude we think And competition which be pie on a a to shakeout. growing we could we're are subscription BXC across is, you see, do certainly pie. drop, company SaaS going I you when same to slow

a their working is, what ones key choice, customers, companies on And our our the technology. best look, so with that their customers customers can the busy hold on give we're that's to of part are and

around the billing, into bringing consumption-based So it's it's really companies Zephr company. whether be newspaper whether look if at will that but just not any made, you announcements really

BXC the companies that and I think years strategies whether to long-term grower are those regardless using, come. or to be years are to of for they're continue a BXB,

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

what from just again to launches how the where Zephr was newer key and I you momentum your like incremental and view more rev of guess here? versus seeing perspective in cross-sell Could about some on you wanted you're little Consumption. catalyst some this as strength sequentially. of the touch RPO of I the bit just much a talk seasoned a rec current the products like

in say let that he's is I'll us. a -- seeing, on it our really would customers me, I but believe comment to Todd what Well, validation

us. believe customers in Our

just you Our to technology. an customers just to we're but renew year, believe that to see look, for customers, with that's to to a And do really to they in for the many continue a hey, differentiated strong you a going we're we increase lot technology, years have stick And a when of in you. going lot not think to going RPO, that by, and our fact driven is be we we're committed our I statement due come. say,

Yes.

volume go I whole saw accelerated one that, think for ever color of to Adam, manufacturers. only did only is through had, renewal largest of I Not would automobile a we've but They're add the they X we going the world's other years, put they largest lot that spend. their our the to out system.

using again, product, Fiber largest they're One volume. expanding Google on companies, of the came world's taking additional our how software through.

really, it's used part we're they've enterprise as we're becoming us, that chosen. of a expanding are and and mission-critical their their the think, value getting customers, piece with tech as of business. customers their stack just So are we've system, I the innovating, been footprint These

is And that million Todd, go-to-market level the deals cycles and and achieving in you you just your do much How upsell visibility pipeline there any over be on then at this for that of of time? the for have this point, type between commitment? companies commonality these might when $X ACV look

think pretty good have we I visibility it. to

with would quarter There's quarter? variability does little good it a next of customers. little got in a closes. is this I there say, relationships onto general, think it quarter, I we've But tight close bit what of bit these

We relationship them. are with have them. attached to customer of time spend lot a managers that We

inputs understand with on on giving time executives they're they'd what see lot A us They of the like spend times a Our roadmap. them. roadmap. lot to our of

know environment, time. where good hey, we we not especially of down, think as to peg can are quarter, things business. highly ability do and visibility in beat that a I there coming and our that sure that. after are expansion have But [ together, we'll the you over close next this we ] always, goes that I'm that are confident quarter of that work it this quarter, So

Yes. guys we And If companies fastest-growing we for were years to choice really know last the same raise in smaller the us we've give want level, at potential had, and regardless I in no, And it one X us today, talking to multimillion-dollar-a-year lands. be smaller you every just believe is account. a companies, chasing been I they to customer biggest base. a companies you a what faster that right? Because question runway. year world. made of is the where big strategic a of of was started that we confidence target X companies? Are the we or deals, a said, gives when start We that those the stand saying our we're about the chasing

comes question Joseph next Canaccord. of from from Your the Vaffi line

product? coming trying then any for a too, of Welcome which And where about resonating follow-up. in to on kind base? to gravitating one have now And across penetration this back. in revenue right congratulations on any environment. the My specific How be seems in I'll now, point get feel you're maybe land a seeing Luana. perhaps change you the toward are revenue, Just things back this are at question quick

like one is the said, really and targeting of in world. Just best companies fastest-growing we key strategy the part our

that fortunate we're sitting we're Another the big today products enough and strategy. of marketplace. here are our is in multiproduct resonating the part strategy have to multiple And

that that Revenue, homerun. to acquisition includes includes so be turned And the out a Billings, has Zephr

just any on see that marketplace. in products certainly would that's that other. But to impact about we I that good one all flows say And takes ability in and in you're puts I going the or the and whatever is of quarter, going really, to their And and have have versus given feel ebbs the of really nature so the quarter. product

last where that accelerate standpoint over is, early of to there's a Yes, But are We've movement. thing certainly we of revenue there. consistent I'd still from seen lot the us to the we're opportunity continue for growth other in the year so. a look, or say on penetrating

coming product the will even Revenue more the help some year join we that's out customers through the or Revenue or the X. purchase And as innovation of go next

think for a way and And Consumption focus the is really, us actually I as those can also Joe, to for that our revenue use added on exciting is us. that customers. lines well, big we really

was it would three as that Silver Zephr. you. comments any sheet then looking there? I again, was are know expected, imagine would appreciate from landscape And infusion here? I all a but you how be at here? commentary. with centric it of But kind M&A balance commentary I Lake on any it the of That's great

we get and land that with product, right second M&A. our here Zephr, is on the things Joe, that took and in that most expand upon we Yes, and in was it growing faster quarter. tranche right than during extremely strategy. disciplined, the we that the still absolutely, sure that deal. it's as just looking making can very us expand We're We going it, culture active growing, we be at recent an agreed the to We're where helps were are

continue we things. to So at look

a next announce I things, But an we to of something the We've we do ability you'll the something. feel will think market. it's us quarters of couple have announce, got have lot when to announce and see over I that active it.

encouraging. That's

[Operator next Brent Instructions] question Thill Jefferies. from line Your of the from comes

Eylon down Based guide Liani implies seeing on sequential ARR new My there the for is gives confidence the in the XQ. This what on in sequential over ARR. But implied you improvement out pipeline updated coverage, see in XX% year was year XQ in year some new and here. question improvement on full is quarter, your net to are first Brent the the Thill. guide? still and Good improvement sequential net and what market you ARR and

up the over year year the XX%. would at the quarter landing. we'll through was it's the this And that the X/X that thought Every pipeline, year. said confirmed conversion end where the range we been much consistent. pretty quarter Being through pretty a That's we and we at standard quarter think about look rates we ARR. Eylon, where on here We've all entire end I see, we've the said way up year today we that on that what or we've ARR. a consistent we're taking comfortable increase had that's land

what and pipeline, the the certainly conversion that's that. so and And rate pipeline in we're support seeing the

at overall I And growth XX% land year. for that expect so that the would approximately we'll

faster can environment challenging, lands customers? remains progress the and your a regarding from as targeting quick follow as what just hearing you're smaller And here up, on you shed color some

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take partners we're business. So continuing our of see more happy more and to to on that

disconnect. further We this for your does our and conference have no that that, in conclude may now you participation at time. questions Thank today's you with queue And call.