Samsara (IOT) 1 Jun 232024 Q1 Earnings call transcript

Good afternoon, and welcome to Samsara's First Quarter Fiscal 2024 Earnings Call. I'm Mike Chang, Samsara's Vice President of Corporate Development and Investor Relations.

Joining me today are Samsara Chief Executive Officer and Co-Founder, Sanjit Biswas; and our Chief Financial Officer, Dominic Phillips.

In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation and SEC filings on our Investor Relations website at investors.samsara.com. The matters we'll discuss today include forward-looking statements. materially subject contained described to in SEC differ statements the more may our are and risks filings. results from in those forward-looking fully Actual and uncertainties based make XXXX. X, this we today, that statements as of forward-looking call Any are on assumptions June on information no new future we result undertake statements a required to obligation And events these unless update as of or law. by

reports measures investor financial out some include to as highlights our in fiscal for except opening we revenue financial financial up GAAP company XXXX growth. into and are All will discuss that addition of point first presentation. remarks, for measures our GAAP. to discussions dive results. results and our revenue call, like quarter and today's financial a the of During provided or release press We'd in We'll call are substitute figures Q&A. calculated in non-GAAP will the superior make with quarter and non-GAAP, not open then accordance for for Reconciliations the non-GAAP today to to

Sanjit. hand to the call that, I'll With over

Thanks, of Mike, growth. and everyone, and growing million, ended today. joining XX% over more We of with $XXX durable QX ARR efficient strong another than thank Samsara delivered us year-over-year. you, quarter for

for we Rule to also We and that of operations. achieved see fueling Samsara's to customer consecutive our strong our Large particular, quarter. power are vision transformation continue the is digital world, third physical of wins, XX momentum. for industries empower in adoption the

with Fortune and Iron with over as XX% ARR, to and XXX complex customers, United Werner us customers operations total added large Enterprises. year-over-year. XXXX a such of growing record we X,XXX in a companies large QX, This includes Mountain Rentals, In $XXX,XXX bringing

field backbone Our the construction, economy customer diverse global are of the Samsara to are industries loop leaders like manufacturing success. services, and in feedback and our customers retail. central is

and U.S. executive with quarter, the team of our largest some on customers. leadership the in Europe, I was meeting road the our with During

asking us things. impact is driving business technology few down Our double meaningful to and are on they a for them,

First, frontline asset operations; more workers; across risk in AI-based integrations higher drive the digital efficiency last, for increase platform field. safety technologies workflows and to to utilization to data reduce and second,

across rapid just that in a smarter, customers ROI this are running board, current more In investments control solutions the environment, hearing by this We're costs efficient industry. not prioritizing deliver and single safer in help operations. and our

we we been and deliver years, Now I'd into for transform X into customer last built like our how AI one the data on ROI business impact. data customers, unlock transform to product we the insights advantages. of core our more operational competitive our bigger rapid how to over our and is has are impact. to and AI moat focus key the data using business The powerful

to bring to a with example. like this I'd customer life

for investing One XX,XXX storage Fortune services information focused management delivers are that of on asset risk. application and expanding Safety quick Video-Based our and organization location to insurance Telematics workplace reduce improve AI-powered serves They than a more employees. that uses lower and to the is our our and customers of This impact and maintenance and has global business corporate safety, Vehicle XXXX in premiums high ROI. is leader a application XX% software in

X-month their reduction a mobile improving no usage. in annual help roughly study, XX% achieve a them payback on can seatbelt By period. safety ROI, Based program, expect we reduction events, see a anticipate platform is a than and safety results a XX% in pilot usage which from our XX% in Xx more to we reduction a

the about to the competitive environment, the sustainability market. they're be challenging value a and advantage of made amazing is These customers. are and gaining where of talent also operations improvements creating has competitive can and accidents AI recruiting of efficiency labor on results deliver safety, is of opportunities On to we're types AI's the of and X AI for in always top of unleash on technological world impact when to the work by of Samsara data I'm physical The excited power a unique reducing safer the a positioned our amazed this clear, revolution our on forefront magnitude customers' of advantages. because operations. see,

flow makes AI we combination annually massive models Cloud, to it our sizes, our different grow and valuable set size industries, to -- data in Connected of data unique. approximately Operations trillion geographies data assets operational continue across a allows data customers. truly data insights unlock types to asset and customer This continues into sophistication. us amass First, to asset, X diverse our and and The points powerful train for

Second, third, the customers, our incredible at we've is deliver cloud both loop. platform. train unstructured IoT to product our and data, infrastructure and our problems, them us validate ultimately on in of of and test, domain most truth identify to AI-powered invested the models features. to This critical and customer partner And devices. AI capture built operate edge feedback solutions with powered and deliver customers' specific innovation ground capabilities rapidly our to tens by across allows in structured curate data thousands We've and capture with evaluate and

goals. insights their ESG data-driven help to using also customers are with We our

all the safety. as day each especially ESG again in social to their top impact environments. about dangerous employees is our S for on Focusing home many work getting is families, customers priority in physical their A for

American company. driver in ESG report. visibility proactive One Energy, a Samsara's for to leading their in use services Liberty recent most of Safety this. Video-Based they and get feature Liberty cab, which of enhanced coaching customers, our great the is They North example a is oilfield

they realized vehicles They in accidents put million miles By in millions of XX% driving reduction using fleet Samsara, the vehicle and making Liberty saved of costs. undertake. their on activity each a highest risk incident-related $X.X year,

for in ESG environmental. turn to now Let's the E

in Lanes largest from report, overall great sustainability provider a a end and the improving Samsara Lanes emissions. example the waste leading allowed demand that reduce U.K. to by helped their more to growing customers, even the Group investors, sustainable emissions is policymakers behavior fleet. with of consumption Samsara continues and faced reduce independent specialists to customer water are their to them most using solutions customers for In their This a utility employees Our recent operations. Lanes is grow. using driving to their reduce shared fuel carbon drainage entire as fleet have

of Samsara's have each lowered It's their claim, Video-Based cost XXX,XXX per year. accidents. the mentioning of adopted frequency that and savings premiums an annual also severity worth decreased and and generating reduced the They of Safety Lanes insurance GBP insurance

building committed the and are important sustainable safer progress more together world continue our customers are a we to and journey. this We as on with proud of

large for digitizing operations. market of the customer Our momentum the physical opportunity world reflects

adviser Operations. into President As as next Field of as I've over time the Samsara been prior Worldwide he's at Officer. on Revenue the and the as to of into next Samsara staying an from is share with help McCall, to the our X that she Officer, joining Strategy joins I the Andy head join growth. us phase we welcome be Customer news us ServiceNow, as in helped growth, year to chapter I'm team to end Chief I'm Partner our a Andy is fortunate Chief that where partner of served first the Chief our that world-class Officer, last retiring to want to until us Caimi the also to excited transition. Lara at years She will and the build and of with organization. Lara announce as excited sales

best his the All wish well-deserved in of us Samsara retirement. Andy at

It's partnership we're together. operations physical growth annual XX. highlights and to journey possible. joining thank XX also our quarter second this making Samsarians, able Beyond partners over Samsara partnership at to and our from it in to and go make us quarter. hand exciting to for the I investors been now to to wanted of grateful and to the Dominic impact durable our over another of June for efficient for we the customers our continue excited for all with conference, June customer our Samsara, customers, We're are I'll financial digitize

by you, line QX improvements. Sanjit. continued efficiency highlighted operating strong was top and Thank growth

digital the and operations. durable across demonstrates growing and opportunity efficient the physical transformation of growth world for Our increasingly large

for uncertainty While exceeded line top we a reasons. economic global expectations and our key profitability persists, key metrics few for

our business that highly physical customers assets of contraction subscription or model risk and subscriptions predictable based resulting produces ACV a lower have price number if we the slows contracts. hiring revenue, in pricing, a we versus First, of on headcount-based

and sell our Second, our we quick investment a savings which ROI is customers. period third, large customers months. hard generally generate and into in many deploy for the operations budget, And payback experienced nondiscretionary primarily measured to Samsara

X larger this, Within ARR, year-over-year. year-over-year million, XX% net QX points percentage representing ending $XX growth year-over-year XX% scale. was ARR million $XXX added acceleration growth or of at a new growing of we

XX% was revenue line our $XXX Several strong top drove QX performance QX. Additionally, in growing million, factors year-over-year.

large of increase XX% customers. First, XXX $XXX,XXX-plus growth. focus or to we on quarterly operations We customers, now record have ARR physical a continue X,XXX year-over-year serving

ARR, operations largest up cohort ago. of Our customers and represent up fastest-growing pay investments continue X physical companies make our in total in year just serving world to off. XX% the ARR the from XX% $XXX,XXX-plus

XX last and net Second, expansions in mix aftermarket ACV of up net to distributor year. highest to a leading were strong expansion ever a from quarter. of customer XX% new a customers, new ACV this of XX% our replacement deals our QX was million-plus expansions came X $X existing large parts. customer QX including automotive top expansion QX quarterly national in from

heavy-duty well make Samsara And driver up the lower with landed costs. customer as their insurance X% customer QX, this their to light-duty entire across Safety entire for ago, years their which and adopted less vehicles improve in reduce fleet behavior, and just telematics Three than Video-Based accidents fleet. of

frontiers. while QX most third, business of our executed drove our several new performance, And well core across we

million new from monitoring, ended from For example, at quarter strength of in ACV net of QX non-vehicle which $XXX primarily equipment applications, approximately the XX% ARR. came

Additionally, of particular including construction a Canada's came largest strength from grocery net XX record and ACV public of new services, of field in utilities, net energy, And XX% one top came for ACV customers non-U.S. customers, XX% new QX from expansion lastly, with non-transportation retailers. a sector. QX

QX FY 'XX, operating 'XX, on operating to and remained by our consecutive of all business or percentage XX% In from and X margin QX QX addition continue across quarter we driving operating functions. negative XX% compared flat X% above both to improving leverage operating efficiency was negative of year-over-year. strong profit improvement is driven approximately approximately points year-over-year, FY XX%, QX has XXth of our line quarters. margin margins This to XX we focus XX% gross gross an was consecutive in across our margin improvements delivering as top scale. for growth,

FY XX% QX XX in be flow In QX, cash improvements. Rule and priority X% $XX quarter. from or operating primarily Efficient compared margin growth points to XX% an million, demonstrated free Rule continues annual improved by third capital negative a 'XX, consecutive our improved XX adjusted XX%-plus as XX, to working of of was negative leverage a continued percentage

the accomplishment, making us XX While a would achieve continue goal we're annual on necessary and to pleased this improvements consistently that basis. our of with is Rule allow quarterly to

Okay.

to guidance. turning Now

'XX, million $XXX FY XX% and million revenue expect XXX X% and Operating approximately be $X.XX, QX we For total to year-over-year $X.XX between million, and assuming be to average $XXX outstanding. between EPS and between margin growth. negative shares to XX% representing negative weighted negative be

between year of or revenue our full on raising XX% the growth. XX% million for guidance outlook and $XXX remainder we're $XXX improved QX million and between and year-over-year FY Based our be results to 'XX,

top to on focus increasing addition line In guidance, to continue improvements. we our efficiency operating

a 'XX $XX to of income X% full guidance we're margin result, of operating operating an negative also expect finally, guidance. $X.XX improving modeling letter. million we a FY or average for EPS And implied negative at notes the midpoint additional the outstanding assuming improvement As our be million year And in included $X.XX, full XXX few to between shares year. weighted our shareholder and we

FY So to wrap up, 'XX. we quarter of first with are our very pleased

world our customers the and of more digitizing physical helping safer, efficient and sustainable. are more become operations We

also on while to our We to efficiency path driving committed growth, to continue operating achieving profitability. improvements durable be

hand to Mike to And over it Q&A. I'll that, with moderate

Dominic. you, Thank

We [Operator Instructions]. will line for now open the up questions.

Hedberg with The question Matt today by comes Matt first Pfau William from with RBC. Blair, followed

that the just And the you holding wanted strong quite the up quarter. any I seems quarter in change well, on it's Anything it but ask from the environment, I there non-normal was, first really to quarter? like guess, demand that saw? fourth

Matt, out it's QX. say being would nothing as customer demand. I really unusual Again, with Dominic. really strong stands

would continue but last a what started transformation trials, into strong operations I to that out to call to say QX. to persisted what the than customers year, cycles ROI it and drive really analysis, demand. that is innings the think in the conversion the similar kind in elongated the pipeline really fast running to that physical strong historically, hard but customer down middle we seeing ROI of different into of we and and I were more and of environment the early QX. We're remain up the digital sales they and pipeline wanting of little do saw terribly than really wanting bit nothing longer approvals organization, the stands higher nail buying

with Our with by Wolfe. followed RBC next Zukin question Hedberg Alex comes from Matt

[Indiscernible] Hedberg. Matt filling from RBC for in

next the color the fit see the on I'm So change looks Lara. like level? around Is year-end. just right Andy now? getting with hire going to here scale Why a to Any nice there? to staying more through it

This way. advance search months. ran us know to several Andy let were right. you is the retire. his We plans find Lara. well in by for We excited exactly That's to Sanjit a about

Strategy billion roughly chapter prepare growth we Samsara, in $X.X were run She's love we asset search. $X.X also million a She this $X.X out the at them What Customer scale team. Chief into so ServiceNow. as billion able for we Chief from thought -- to the as later Officer. started about great saw next and billion. to to extensive time background, She $X of sorry, she'd Officer. over -- in been so a customer-facing be bring we And very her ARR she's Lara's for

add on that. just point one additional would I

I important that have that into of than are many in years, senior organization to the all for that with it's company some leaders are sales years. role the Lara going the to think more note report in this X folks been

going Lara. across And of are to so the report that on we lot individual of have go-to-market a functions all continuity to

traction, equipment color then And telematics ARR out point And else growth then from Great. details anything maybe perspective, around million. $XXX the core et Nice those more additional this there, monitoring to products? and see rates, beyond Any I to appreciate at safety that. product a cetera? quarter

and to been it, call really progress Nothing equipment of on continued it's out monitoring.

third than our or million. at now that's product that's more $XXX category So

share we're all across Investor different growing growth, a weeks. we'll more to think I our really a bit that has good up been coming categories. quite little few quickly, at monitoring Day suffice But it in product but seeing say our detail frankly, equipment of

with next followed Wolfe Kash Sachs. comes by question with Our Alex Goldman Zukin Rangan from

Can you guys hear me okay?

Yes...

Yes.

a truly mean, is year-over-year expansion is So scale, macro would on sales at new the trend accelerating guess the it's I are you side. Obviously, I customers, are a larger look, more a large a from astounding acceleration customers. developing? performance in where see on -- more particularly is to cycles -- existing I seeing something unusual, or dynamic still tough what growth you're basis say, challenged, But there scale. at

last and to that it ramp? to the coming like up the What's it that the in lot year kind packaging driving something that a pricing over acceleration? are that Is bear? is that's you of geography Is of course some is opened it new of you've reps this So like? hired you've feel story starting

Dominic. it's Alex,

our other bit less to budget tends well. to budget budget than maybe customers, QX, we're it quarter and And be quarters as in categories. So a the operations it's some -- point, I that my would are pretty think drivers I into a that large, going -- really the demand we've the just and We're strong -- in think factors most very real discretionary some into customer here. selling are which a say selling I was recent back seen there original of external different little is for

ROI, and back And to pay customers drive very money their really able strong quickly. investment and are able save hard they're and to

has And continued so play in a challenging that macroeconomic environment well. to

customer really quarter. number what more adds of really We record expansion $XXX,XXX-plus the well. was to at customer was say performed was out The strong terms it new a XXX. would It strong productivity. In a I drove frontiers large performance, a tied it strong called of quarter,

as productivity a of it frame And so strong than would ramped bunch capacity additional fully I added. sales more

Sanjit mentioned. gone has not then Perfect. because a already AI questions follow-up And just and X been we've maybe generative

So of the data that of if X I the data model. you how gathering asset in spirit keeping platform, mentioned guess, strong going, you're in a

As you look at evolving, particularly -- coming with Lara the on.

mobilizing some As you is packaging and of incremental from look kind how important, of some at the inside product sort general the assume product? that evolving opportunities just there's generative realistic go-to-market, AI functionality to it how monetization

Sure.

for something now So we've in investing is Alex, years. AI several been

introduced about it for years and really I breakthrough in for we as value a safety it ago us think X we terms the into of product, was our really customer. got

from being sudden, having a drivers then could their video and to hours in safety hundreds of incidents risk. they All footage watch and or of to surface of their able not their reduce go hours inbox coach

the us there. AI, it showed in AI. invest power continuing a and generative toolbox is say the I that to tool we're So new comes when would of to

appropriately. Jeff problems have we is this us we're out customers at Product something joined but as it. As then much it we lot to trying solve are announcements out looking last to who try how customers. comes to any want looking far that's run Chief then useful package incremental create We make we about And feedback how year where with specific we to the And to to at. value down a first do for our don't do invest. Officer, today, do what's our best them, price think align figure We we and of And that our price to figure our monetization, is Hausman, it as and and very loop. package how customer and we

Sterling with from MoffettNathanson. comes with Rangan question by Auty Goldman followed next Sachs, Kash Our

for on this non-transportation said really that seen whole? of I this ACV echo Was was This to what around due was weakness XX% see. the transportation due of Or the current that's as questions. to to more presentation being those from quick of The in quarter Good verticals? focus customers. industry other quarter. A really, to noted a on Kash. a want new strong Alex couple net the the

now. this seen a trend while think for we've is I a that

the transportation you basis, I percent. investor presentations. And an if overall think is segment we've in called in it the just of at out on low previous look ARR XXs kind

And the breadth misunderstood even it that So horizontal by think the platform, I to many and than of really that, sometimes physical just that's was is this that's lower solution the goes this addressing and think of I that. operations industries, nature investors. our set a

And many seeing just other of so. out markets across really we end make sure to so wanted called more strength we that we're that these

Awesome.

Okay. both more for And J.B. one reading through the headwinds is some to of they transcripts noted and from claims of insurance they've like hear. Good me quarters. Hunt then that Werner, last the strong pretty had from some couple

So that benefits money and that? saved that with maybe selling been more has reduced the solutions selling Safety focus get the altered Video-Based to from to they can or might around there any Has that given motions on updates the motion premiums current adjustments be there? insurance

Safety risk. our to reduce the just many as were then product being value a been did times involved their proposition -- not part not to some with. accidents they core coach customers And they accused that Video-Based for drivers of time able also exoneration, get That's our of with

is, it the that something how be the by thousands hundreds or And been valuable for we've selling into think examples of that's years. the a just millions highlight couple can cost So mentioned of dollars. And way, of is. even you I

for is source significant our ROI So it customers. really a of

by Quintero next Auty followed Chris comes Our Stanley. Sterling with MoffettNathanson, with from Morgan question

of go also I to AI. think of And to industry. idea to to are alluded I you want more the an that tailored possibility the back solutions

is the start AI? time line specialized like if Samsara So suggest something solutions of I'm before think industry-specific in kind about on that the that's marketplace? of develop kind actually And a should that wondering case, what built vertical solution. will to What we does seeing that

set So the we Dominic of find serve mentioned us XX%, Sterling, broad industry. I of have XX% try to industries, expect by solutions earlier, we wouldn't a verticalized as and commonality. pretty kind to

customers' we to other data how bunch of to get data find AI, it and we're incorporate and our save of In insights using are business trying that terms easier a make this systems. time, again, into in value it deeper from

specialized So we highly the way software vertical about is think partner. to

have over App integrations Marketplace XXX We on our partner now.

X really than a strategy of Our worked that's large customers use for And that's well more us. them.

is it's specific vertical board as But very bit to a industry. the complementary. AI across our opposed be in So going more to investment any

That for you. makes sense. And then, Dominic, one

You talked about pipeline.

us, of coverage quarters you these Just cycles? qualitatively you're managing to of kind pipeline can through last kind curious, what's happened just over of to several the elongated describe sales kind ratios as

held I think well the up of historical is line coverage relatively with in kind the trends. and pipeline

big back the I overall was So think we're last not, cycle length. job think, converting commentary, year in And and again, pipeline the a The really the necessarily sales bookings numbers. do conversion a of starting, to change I strong seeing the very frankly, pipeline. in to building good that QX that coverage. more And pipeline drive continued tied we've of to of

by comes Evercore. next Morgan Materne from question with Stanley, Quintero Our Kirk followed with Chris

for Quintero on a another here. Congrats results on strong quarter, Chris This is Keith.

Following ask on charging model number a a want your to of versus on the software about AI. theme seats of I of pricing devices of lot asking like does. based about

of One, more are kind customers terms two, you you So of of what to means wanting given your two-parter the not Q question. with AI the of this part opportunity And seeing think kind P in as Q negatively affected? do devices? about is equation x what add

Yes.

be expanding, customers have when coming a number generally, out from And of assets. are customers a portion I that the to are often broader rolling that is vehicles. and they that of to more that think in rollouts we're phased already can products expansion larger seeing cases, -- taking

maybe our ability to where things able some to of there's And a and expand vehicles, get an optimize customers assets continue of certain so use really to life to seeing in with shortage being technology has also an utilization resonated extend like these grow or to customers. our assets environment the and we're of

And can a bit add if little on I just that.

Our of terms think in about their do really their customers assets. business

so all through users, adding value it's is not all software, through data. it's And what the So this and the then doing much assets. seats we're

So we be over to customer time, want to the valuable more asset. per

And those last better. about talked net due be quarter, than ARR previous kind then of seasonally enterprise engagements, to Excellent. Dominic, how of more you new QX years should weaker but in actually came

So that year. I want your dynamics better for the seasonality to of understand rest on changes and view there if the the

Yes. QX, Again, have of did strong we to customer performance. strong And factors, external think, I it a due was productivity really strong then demand. again, some the internal the

And how recognize linearity like capacity lot in in ramps for it hiring the add look of that But in back that ramped, the and capacity I pleased previous us. is understanding rest are with watching and a that I as sales there things in expected of for sales so out how did so has the we half we lot QX of we results seasonality probably the we're that 'XX it year. of FY though fully And feel of we're and productive that the think the becomes I the year. is it a should years, think think and uncertainty macro front

Cowen. with next Materne Derrick comes Our Evercore Wood question from with by followed Kirk

if sort becomes a about about data could to if think talk on solutions just of Sanjit, was over quarter. a the essential App as start, you that to how nice might your just application guess, more in you building all on element I thinking out data was estate you versus I AI. your of on changes curious congrats handing partners your echo, I'll do it own about Can talk Marketplace. just bit? I what kind want little curious that just you to of a

Sure.

put which most is part your you it, is the valuable finger So on here. data the

GPS, just We how amount applying We commonalities not would relevant and it's now, that but about data and that video, way talked really our about time, we lens for if are kind of data. of of we've of packaging. opportunity business not it's with what customers. asking it's the XX/XX for kind collecting core in points. philosophy. see for many just go X value data customers applications opportunities, are all customers, other pricing enormous we an of words, about prospects additional And are offer of there drives we there, But are that's and a there through again, our trillion is think the we if thought today. apps us tremendous Over our kind the for, that The

but to open expansion going keep So we're stay ears focused, our for additional opportunities.

quarter covered? That's helpful. products? mainly the expanding example sort ebb getting in was way the was or it's on more about you of for way. The just you a obviously all. one the base Or asset talked Was just And guess, expansion that's it one Dominic. mix assets I maybe or of Dominic, the you quarter. expansion bigger more assume it, I did with but other a this flow always both, working gave

on strong expand the side. side if product well was of curious it Just the as

is trend see it and as mean mix rollouts we of I phased the healthy similar That a but and happens a was the was. in across product as rollouts well of of versus both. more it more towards quarter. of every assets previous as products. additional upsell mix both quarters. an did Yes, mix expansion And does skew cross-sells QX cross-sell, It the

Cowen Wood Wells Turrin Michael followed next with Fargo. with comes Derrick Our from by question

want them tweaks terms can about to that quarters? me you you next the you'd to hear level. scale be of hope wanted field a okay. the go-to-market just the potential as look anything to I of to at over you I next Great. there hiring Is ask guys operations looking few new highlight head in of

today. that's machine public we're something really, working quarters a I over that And think X our first point, I company. don't well. proud really got really a announcing again, just execution is And think at as this we've the now this of we're

well really And the expect significant on wouldn't to and any now. of to the got working a up and talking get I got evaluating We've help that's through and kind will to speed board come right rest customers. so year we've and in start Andy changes. And large transition. this And with Lara of solution us obviously,

out about contribute to international the investments these given it term? Europe demand you're part medium and to non-U.S. a like guys ACV of a such tracking, they're regions the to is how new record about in Canada, And or that hear customers, how percentage had would great helping TAM be and from in even you Great. Europe there is of incremental just Western thinking what growth big

success Yes. like would are a Canada, all seeing of and really XX% it the good of call ACV Western Mexico outside of Europe, markets of our international coming in new net just we U.S. I record

I we the of Western for markets number U.S., a physical are Europe, -- larger than these example, market of is operations opportunity that recognize assets. the just terms think in

And so net internationally, you're be in the more the the and to driver U.S. our mix of new seeing the well. and definitely growth investing we're to ACV as leading U.S. biggest continues core higher coming business growth of But productivity. outside

Piper Fargo, Sandler. Michael with Our Fish followed Turrin next question Wells by comes with from Jim

Okay. Great.

out. especially of a prior stands and expansion on similar the the the QX, activity start year, the Just from also customer line questions, mix strong some to

So any just other go-to-market Or to place? might product you add square if any you how trend into that QX, working and anything there's side additional that expansion, between expect put drove commentary forward? going around what to observations or can from expansion just mix what's a us you especially there and in help stronger

No.

we to is versus can, think necessarily to expansions. logos run after go our new ARR fast as don't primary I we that business grow as the specifically goal and

from way. back quarter the a and and logo QX, flips it this in outpaced recall new you kind If quarter strong really was of expansions other

New was logos number that the kind and strong just were terms that. playbook that back the stronger. any of still forth. size of new customers. in seen accomplish of we've flip sales to of in It's of really deal And of to for incentives average no overall were changes expansions kind logos or or go-to-market the kind added There

your at Great disposal. to have interplay that

you operating around a to and longer on that's between flow margin remind in function free us, you're have you the mainly margin, what can cash some there's term Just that letter. and of delta the if if expecting how a trend Dominic, commentary thumbnail

of kind well that well, helpful. just us out could you for If spell it's as

and margin, flow on dynamics. driver points the the was in chain. go cash And really think you supply biggest the were I free And think -- a operating back we free percentage flow working percentage year global I quarter, points the is that mean mean, now I I you operating capital obviously if Yes. better like margin. challenges in driven by think than ago, I X XX was this below cash

and clearly and it's So in had way. relatively with quarter, supply strong line to other. the the in in driver really flipped the expect hardware things chain other And a back I we continue optimization, each the working to see improvements we capital these is difference biggest and move availability. collections

think about within expect. But going In it QX, each we forward, working moving you're minus of I of were X% together a but bit I on other, or kind plus is little what would better thinking as capital.

with Truist. Jim followed by Our at Piper Junaid comes Sandler, next question from Fish

but Nice is Dominic, back guys strength talked actually than right and now we question. quarter, quarter ago. I strong. prior the about uptick about questions here we the implies here. we to Obviously, quarter. last of net couple lower rates changing It particularly And expansion year, a that for view talked to NRR installed wanted know have little the Really similar to you that this expected be quarter, where finish you quarter that, going were get does that I kind the your could of retention seeing where you're expansion Thanks on possibly about year just go rates X -- on given last were see last base? that bit and retention fiscal we only this it's a to

to rate definitely being year. And side. of for the yes, it. I the were expect we feel a in good in at QX, really net we helps we retention setting -- stay we're about expansions, retention of more QX, rest above on for comes would of that And able above the our and from new to net ACV it we the we In what target be. just our year, beginning out where each target quarters net year for the above were terms

you're there balanced side, at are don't at you happy sense. hit at. you macro kind Makes strength And is? the right the Is point point? now, hiring kind head to with are you're the the like of disclosing I you're give you're thinking the on where seeing count you head want seeing then productivity are where of point? total again, about extremely in pipeline -- sounds that this this at really environment know where against other guys it overall guys spaces but not reps, count this how quota you at upside we And with with

Yes.

targets I we're we on year XX% the 'XX track count rate kind for growth think in what our will of approximately and through remains is QX. head be Hiring overall grew lower and FY environment 'XX, in shared we've last good. FY

attrition I employee probably well frankly, right think are working seen. sentiment overall, now, ever as new good our frankly, those rate hires and in of things and as all really we've

a now. so momentum good hiring And right of lot

Our last with Truist. Junaid from comes question today

This is Junaid Truist. Siddiqui from

You've elongated done cycles the attract job become of is customers customers, in that as a there sales more large headwind fear platform. But to of will forward you past? excellent these an more the these going a than large adding

I don't think so.

see the and we'll But And definitely of number something in it's pretty the kind elevate it's last that have volatility. a And over and just likely of the to quarters, of we quarters. We have consistent them we're overall did converts, last quick given it we're think few across cycles. be middle it pretty customer it's across I economic sales year. monitoring sales But the maybe a have all think multiyear always some I elongated to could we're in large able have we again been a where few customers over of in where customers convert the some cycle. consistent last couple large months, board, been quarters. going some segments, always

All right.

question-and-answer So fiscal earnings our this for portion. attending year all Thank the XXXX concludes QX you call.

have a you I go, Before short few announcements. let I

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