WalkMe (WKME) 17 May 232023 Q1 Earnings call transcript

Welcome to the WalkMe First Quarter 2023 Earnings Call. [Operator Instructions] Thank you. I apologize for the inconvenience.

Just give me one moment. Thank you.

our XXXX joining call. for you first earnings quarter Thank at of I'm Head Relations WalkMe. John Streppa, Investor And today, Ynon, by Chief Officer. I'm joined Revenue Scott and Officer; Little, Co-Founder; and Hagit our Financial Dan Chief Adika, CEO

our Harbor statements Exchange within meaning Act Act and information of of Certain uncertainties statements to expectations Act statements are of some the Section XXE of XXXX events. the and Safe of U.S. control. Private XXA the Litigation future make XXXX, constitute relate of views today forward-looking provisions Securities are we of and Reform of that subject XXXX, and which current Section These forward-looking of our to beyond Securities may risks, the the Securities assumptions,

March materially on statements for the the annual Form and in number release from with in report and in set a of filed Factors the May other differ our as result Securities XX-F Commission factors, filed information. section contained forward-looking or XXXX including to XX, of those See the our XX, dated the forth documents press SEC. XXXX, additional information outcomes Actual Risk with furnished on a Exchange titled may

with understanding used and respect greater and today In operating results, the in with these financial in operational to information for of to intended addition, of to operational decision-making. We for financial overall superior financial and to decision-making metrics about management isolation these substitute provide comparisons. measures GAAP. or transparency and key as useful evaluate We accordance are period-to-period the performance allow information use metrics measures we for its be future financial or past information prepared is non-GAAP discuss presented that by means certain a prospects and metrics. enhance presentation believe considered financial non-GAAP The will this not as financial in a and

our by number used competitors of management provide in by used key throughout our performance indicators call, a we industry. and this Further, often

indicators, including release XX, more non-GAAP For on tables, press the XXXX. information reconciliation May the and key see performance our financial measures dated

off And with hand that, I'll to Dan. it

us big you first share XXXX Thank and the achievements. some today review joining our of quarter as we for results

made we are headwinds resilience that and many I'm continued extremely incredible investments the agile, of mindset global execution. the we've macro off. is. in paying They've Despite WalkMe achieved The proud our team QX, shown innovate milestones.

I'm WalkMe. we technology, the organization more excited invest was organization the The I'll when the need bigger today customers our share even workflows. digital more ago mission-critical ahead WalkMe. I the ROI obtain in about WalkMe whopping of for launched few than opportunity years us with help XX execute minutes in adoption.

great to Let's of loss period compared only first last million year. the non-GAAP quarter turn XXXX the QX This XX% $X.X growing represents revenue improving in XX% made million progress the to numbers. to on operating delivering XX% non-GAAP XXXX. $XX.X improvement a an to our from loss We've operating and in margin quarter the in in year-over-year a a same

our free and million $X.X XXXX from be the the positive cash commitment year flow end quarter in focused are We to of first of in to cash in on million the decreased quarter fourth our XXXX. by the $XX.X burn

headwinds. than determined we as more are business, the market strong face We be even ever sustainable DAP leader macroeconomic to as the current

who us to leaner, on create efficient the is decisions make and more moving tough I have the a The to to acted we while thank that moment in to the empathy in Hagit collective those all long-term and want to profitability will impacted that growth compassion strategy to organization better the and April took the of success. profitability a to remains need growth. committed ensure order to and paved review with take reflects long-term more We forward. action with that were path but expectation, organization detail, growth our rest in our near-term and path setting of

that status. for to government. us awarded This with a thrilled ability security with was I'm huge WalkMe powerful federal adoption company our milestone Ready of category. a a FedRAMP testament announce is officially as digital intense bring and requirements It's to the to promised, the our As as a technology

is of (ph) Georgia state digital Federal, technology undergoing helped the program, Affairs modernization [right] local with Defense, already My along their Department opening of and local is the advantage, up capitalize the of Arizona, Chandler, Page, Travel fully a we'll Defense We've were we of that the with of even other in certified. dozens expect motion Voter the the and for go-to-market a Veterans U.S. HR with years and modernization governments vast their System, Department transformation. State every WalkMe come; big this City before certified organizations. government to And in organization. Being

customers, and the having have benefits or as digital are with and partner These now positioned application capture new are four and NTT we adding Data investments as well are our XXX and global scale. to The well adoption Mahindra monumental. count Tech We more We or benefits, these embraced partners. made an we've ELA. market share in off, certified also reaping customers execute customers which of we're DAP and enterprise-wide ecosystem, continue define the additional segments to paying

the overall firm only of as that adoption the and reduction found to new satisfaction asked study and concluded average for faster study research on [tried] features and XXX% They and by faster a conduct customers grew over employees period, in share million the three-year to ramping business increased by recently that then a revenue errors, We massive. $XX XX% experienced is a estimated customer software thorough period and of objective time business findings. ROI in The employees, surveyed. result ROI over our this months; was (ph) IDC five value payback for

like I'd example to forward. a bring separate

first U.S. to digital been and transformation the customers has project, self-service the team to commercial support modernization robust a new of focus in the technology banking platform and embraced all adoption including with on capabilities. has deliver full One XXX,XXX its migrating of digital their deployments, a the central training. minimal their system one where for goal to largest to DAP employees retail HR was members

just employee translated million. In over is expanded and with growing. the DAP calculation, accomplishing cases, and with After month. scaled WalkMe customer $XX became WalkMe. use Center a to this, their over million value last full their rapidly have in-house with applications, based engaging XX XX on of XXXX, interactions the and customer strong a they customer now on of Nearly They Excellence deployed direct every WalkMe a WalkMe engagement

a most in getting secure across and And the problems of solving vision globe. multimillion-dollar started environments. this some is organizations the WalkMe delivering to complex just we're

highly our focus times, customer we're see, customers. on As best and our our to success. these you we to Through delivering producing committed must value

and Sunil. like is success, Chief Sunil the this Our functions, to be to lead including Welcome all and our WalkMe opportunity introduce none. I'd team, customer Officer, second to Customer on services extremely Sunil and Nagdev. support, satisfaction. customer customer retention and post-sales take overall driving will them commitment to new has joined to needs, focused

drive recently the to and more the Analytics is have change featured insight. Gartner In Workstyle DAP again, the was WalkMe vendor profile Business for the Analytics, published of derived now leadership Gartner of also and ever. component Innovation management review, and named, mission organization most two digital was on in future WalkMe top in than critical work, XXXX. as helps the mentioned Insight, XX via in our brings as Gartner one DAP Workstyle the only me that mentioning organizational a key tools market. the our supporting DAP of for Analytics innovations DAP proving which in WalkMe Quarterly product. WorkStyle QX, impact

the We our their and reach our Discovery Discovery enabling of charge free more customer and visibility and customers like In on investment. offer WalkMe end CIO be value leader of of their new of expand be the expand to This software R&D the can't May visibility it's sellers and execution. every Discovery. to important for an organization launch agile example and proud consumption to of with helps to super WalkMe for times through spend WalkMe their department a of We're year. global the in control full to X teams campaign of WalkMe. technology and this, I utilization. our is the great recent launched existing unlock

want In automation of any automatic application. the fully to to our it glimpse product they release, recent and text-to-action do the engine, into We on for of in enterprise the a a believe employee them and shared key of this is work. see we've future automatically simply top done the what type work, any world to empowering future

interface user our powering our our been we've This years, past products. UI that five does. developing the of a AI Deep core training understand model and is human technology most For like

is We GUI are to WalkMe the gap close the It fulfilling constantly interaction. in promise our improving most world. computer human advanced the our AI is between model. and

need Just are, employee to every world, billion at for accumulated in X.X what the processed software. best. in and to understand accomplish over the its it XXXX WalkMe hyper you; interactions you does people distributed trying between we automation, who and knowledge alone, and type what Imagine you you're

Generative generative on our model the We it what are automation and GUI of top compose any understands UII wants. intent, the to does using user our automation. using three any database Orchestrators and without Intent sales. connect relevant orchestrator engines: and API. for user who by app the

and work. are We working on super new future to of the excited continue innovations

it. still will to bit better the start I'd to acknowledge more like our text-to-action that to time the innovations and These drive with work design the the more great take the WalkMe, as work frontier. engine partners a of to team. fully would we mature than work in is to future execution and and DAP Nothing great from excites next are that me technology

of organization, Before some from to am excited reiterate to to I I I it insight the the want future CRO pass Scott WalkMe. from how give

address develop building that the We're to we're profitable business while and to challenges and scale the embracing technologies, the to tomorrow. organizations our arise will scalable we're enhancements the delivering that today that face continue a and organizations proprietary at model. growing challenges value global We cutting-edge doing

I partners, people experience in thank analysts and simpler want and for digital world. helping industry the many to partners continued customers, dedication our make support the employees, of all around ecosystem for their other

off it Scott. hand I'll that, With to

good Thank morning, and you, everyone. Dan,

improving team's year. the with we began new pleased the as execution am I

make and to continue process rigor, sales pipeline progress We accuracy creation. forecast in

accounts candidates for to Our for and that are These they software because in sophisticated we are choosing the key strong focused laser process XXXX is are vision, beyond. and DAP customers opportunities have portfolios and right prospects to success deliver the upmarket our who improvement.

structure, our organization. in effectiveness in and forward move productivity sales increasing well we we our deliver new organizational to are As go-to-market positioned

very have Our deferred and regions customer intentionally we segment, with countries the team is we and our in other ROI, focused on so highest other the segments, can enterprise investments in maintain with focus. and areas

However, term. sales in believe to growth medium we we the have capacity I do need reaccelerate the

For overall customer day-to-day so to am with which to already improve welcome team. Sunil him implementations the motion. work drive important partnering I our and Sunil enhance to go-to-market, the our and I'm detail, successful Happy, to and into pleased expansion I more deep closely our is are experience, sales adoption.

our critical success. So, to overall Sunil's efforts are

investment As both comments, macro in to our to this user prospects XXXX are economic of continue we tough licensed. increased on as accounts QX approval their their pressure environment, In face case them applications expecting added. help build are business we the layers and scrutiny support deals the and number additional vendors to of and elevated noted process, our clients of

this that elsewhere the And this for expertise. note consulting quarter, the with despite business linchpin XXXX. field to in our team consulting we important value grew this actually the reductions is organization in deliver capability CTO investment to it ability the organization Our go-to-market is headcount valuable in for first

incredibly also federal I'm our forward we FedRAMP into to and government. Other the are investments with achieved has the two we made have that proud that years are sell U.S. moving plan past Ready WalkMe status, in paying broadly off. more

to see of the fruits investment Our half expect in that pipeline second XXXX. and growing of we first is

space federal needed we security because support last partners and Our was IBM of with early the like SAP success at the year U.S. the in our time. status their

together we only with our hunt that very exciting. federal to standalone entire security not Now own confirmation, which partner community, is have have we and the SAP, IBM the license

about our business. let's not forget However, SLED

status to help confirmations. in make for because security as SLED strides also SLED many FedRAMP proxy will looked FedRAMP there their well. entities continue as We us to large accelerate great own a

The state of team State had with from of and strong local quarter, and Colorado the the wins Ohio. a State

New Hampshire New the signed of Technology and of California, Our higher education University. team with Jersey University deals Southern Institute

our GSI While much all of sector important see are we status reach XX% as to is excited it goal. when we our total federal scale. our they at public FedRAMP and see hope business as community is growing fast, business XX% us and it very to become small, for very is that are to

But not quarter. this only ecosystem our partner was in that the good news

their and We than be and ways this which given Data trajectory Organizations that for business our and us stack. their to gain organization also globe partner happier software are expanded ever across turning with our our difficult overall cannot for partnerships Tech rationalization to the in point entire partners are and efficiencies NTT growth costs of our push fuel across ecosystem additional for GSI our our reduce important will macro cycle. ecosystem tech backdrop the That with help I for facing. trusted more the at XXXX. pipeline with life is Mahindra,

we of this running Discovery, partners customers that reducing who whether needed with redistributing or the driving consolidating spend, entire WalkMe's release are with make the be used. using tools, DAP Armed optimize licenses to it's adoption their are better their choices software capabilities, With about paired into is and and other improve visibility giving can how software being data, digital our how software they they companies, recent ROI. to across WalkMe much or overlapping it

to customers driving drive Feedback focused their been are heard to business way We from digital they from ultimately they visibility investments. has so to see I've platform the as WalkMe expect failing adoption that understand and tech their begin journeys results a into they great utilize can entire where customers for this on greater and demand. the

as We team Republic with of thank Health with sales quarter. Tesco ecosystem Services, at (ph). Distributing and executed expansion motion Accredo, partner direct Singapore. customers saw and and our team, System, customers our [DexCom] Company for National good Riverside, part our good I dedicated well UC Health such the our new Lastly, to customers AIA a Evernorth want Harris

to now will Hagit to review I pass the over it numbers.

and today. Scott, thank you, Thank for you, us joining everyone,

I'm proud steps free getting and enterprise growing the and our made against the priorities, to Ready accelerate strategic accomplishment FedRAMP flow segment cash status, to in our taking including path of positive. profitability

on North balance we as As to profitability. guidelines to we is our our an with are look strategic path growth our the financial between XX Star leading model, our efficiency forward emphasis Rule of the and pave

that have set immediate support economy model We place as future in the and scale a recovers.

by have report scale. the we the I'm operating strength excellence of underlying pleased as to that operational to we our margin. on loss sequentially continued to achieve our unit gross XX% results non-GAAP our a strength basis These of better our an driving business OpEx future demonstrate lowering non-GAAP improved and and economics while

margin. our the decision reductions better These XX% departments. and to As economic with geography took not to a Dan on of mentioned, restructure approximately base we individual reduction the organization operating headwinds focused or the employee improve and workforce global across continued our align our a global to of were

approximately in We $X million save expect XXXX. to

our that can We two years. to next focus areas will highest deliver resources the ROI over continue in the

the We we are confident to that reaccelerate growth and into be team in XXXX. and will structure with able our scale place,

Our was year-over-year and initial total guidance up above $XX.X quarter revenue for million, range. XX% our the

XX% grew Our $XX.X to subscription million. revenue year-over-year

DAP and revenue in segment. million $X.X year. was quarter led the compared first was to million $X.X by Professional growth the of enterprise revenue last strength Our service the

we in expect ecosystem be with than our line PS strategy. forward, to XXXX Going lower scaling revenue partner XXXX,

to forward. and discussing profitability, I to be gross that would turning expenses results like non-GAAP note I Before going will margin,

loss non-GAAP of and drove which focus improvement proud quarter. consecutive our management, our expense the fifth operating on in are We for efficiencies very

first 'XX, quarter gross of X quarter was X margin last up quarter point percentage first the from from last XX%, of In and points year.

infrastructure We have efficient to rigorously cloud cloud our and best-in-class deliver secure environment. optimized

underlying subscription compared business. speaks remained last in to our inherent XX% quarter, margin Our above gross to strength which the

nearly up was profit year-over-year. professional $XX.X breakeven. Our was organization QX services gross XX% million,

to operating expenses. now Turning

continue generation scales. focus top-line to path on spend the profitability, our as cash our we across free organization flow to we As and optimize will

were in in quarter, last previous expenses the XX% and the improvement significant a last marketing first the first of $XX.X This year. represents of XX% the year quarter. XX% first and from million compared quarter revenue million in to Sales quarter $XX.X in total

reduce marketing a We continue expect our sales percentage increasing to and from as will have revenue, gaining already leverage of made investments opportunity. we and the organizational

$XX.X in QX XX% in year. $XX.X $XX.X expense 'XX, in and million R&D in in QX was QX million million first the compared versus to total represents This XX% last last and year. quarter revenue of XX% QX

will the customers. continue platform, growing of digital innovation market, leaders value invest the and adoption ensuring of to advancement our we our As to the in

first G&A QX the quarter last $XX.X year. $XX.X first expense versus of was in of quarter year. $XX.X the million quarter and compared million G&A in in for was QX XX% to million first the revenue last in and XX% XX%

$XX.X Operating quarter last $XX.X XX% XX% loss loss quarter. operating to the million QX of million last compared QX was in in and million in margin to year in year the and $X.X compared a last QX last XX% was quarter. loss

have believe to consecutive percentage on XXXX. We dollar will our basis operating five improved do and so quarters, both continue and throughout we margin for

QX weighted first outstanding, $X.XX, loss was using million last compared quarter year. of per in share XX.X average $X.XX Net XXXX the shares in to

in compared the a first Free our last year. million to improved year. We quarter to the margin million cash a last to compared of quarter $X.X cash a flow flow free in negative $XX.X XX% negative negative negative QX XX% was first in

our gain our cash and improve operating model as investment. in CapEx leverage our to we continue will low flow We with free

short-term securities. equivalents, cash cash, deposits in million $XXX.X with quarter and the ended We marketable

balance capitalized to supporting continue free flow, we growth well cash cash improvement our our in goals. our are Given sizable and

guidance. Turning now to

macro while challenged the we the our operating continued continue of to model, with our with are We peers. acknowledging face along environment improvement pleased

Our guidance XXXX. continue these that reflects throughout headwinds will

believe we of We With profitability XXXX. to that by we the is reduce remain clear. and year took for quarter fourth the to committed our actions operating will expense, we positive full cash path our flow the expectation be our that to

also we XXXX. to expect scale, the year with We end for expense with year full an profitable continued will of be the that base

range to of XX% XX%. For to XX% million, to to X% margin of XXXX, in a an a revenue of the operating $X.X the $XX loss range million quarter operating $XX second million expect representing and of in growth non-GAAP and of loss year-over-year, $X.X million, we

year XXXX, in represents growth of to expect margin of loss million non-GAAP and X%. full XX% of the the in revenue For XX% million, range $XXX and an operating we X% $XX million $XX operating million, year-over-year, of the to $XXX a of to loss range to

take Dan, With your questions. and I that, Scott will

Thank you. question take Walravens from will [Operator (ph). Instructions] Pat the first from line of the Thank [JPB] We you.

Was So, JMP. me? Walravens that from Pat it's

on congratulations So, FedRAMP. the

have only that look in by three is XX question QX like ARR I down think from with XX. I over X% Thank customers the model, as And the of to is at went $X happened the number why? million those why to actually Is And to going my you. to customers? three XX%. everyone's seems growth it what

is Hey, Dan. This thanks.

will $X I So, million. start with

even macro quarter, we still in last quarter customers headwinds. are said are us. we with As Those seeing and this

had is which $XXX,XXX. the customers moved Some those negative average $X some of expansion, Still the them below line of of the million. them

healthy that's and and they changes of that are have some QX, them So, something say, six expansions saw, starting obviously, customers, I we would QX. and negative figures high but it's some

QX, Regarding it Hagit. I to hand for the over guidance will

Yes.

guidance mentioned we quarter. just two. respect look the be the the think script, indicated would Dan for that would as ARR So, on I into with gave, One in the to I what

size reason for revenue a So in as think we we -- And both our future. XXXX this on -- with But yes, the versus on size. of partner QX expect I a percentage and indicated strategy lower our part ARR and was revenue have it what ecosystem, finish lower part to and that of my script PS dollar actually we to our to also with finished the both is of also expected. our guidance offload PS

number How Thank just sales answered. ask And team pretty QX so had great. in can into then so for you -- And you Okay, if you far? them? Scott, QX does I number I think QX. the you. did the But, deep feel hit we're directly, how their

Yes, morning. hi, for -- Pat, good

we considering linearity well macro expected, quarter we On but the QX, long For as We headwinds. had feel QX, I we the were feel QX far, team felt right now. pretty good executed together, still linearity weaker the we so good. as about good in and holds than early

Thank you. Great.

you. Thank

line now. open question will Scott of The go We the next line Please Berg. take ahead. from is

different do Hi, my to and route everyone. taking Thanks for maybe a efforts. questioning your on of sales I want slightly question. marketing

presence at type maybe opportunity WalkMe of at different Over Because seen six the the this than the sales through IPO. within saw customer about couple it's little much time talk Can different a last that of months, I've strategy or a with -- HR your strategy you bigger we go-to-market of this type ecosystem? the a I conferences. think the HCM the

significant that. the I enterprise ecosystem upper important mean we HR, I'll They market problems, an it's say necessarily way I end important and of to It's CHRO which clients. persona have is HR wouldn't take especially in our different. force. an the on is from enterprise. Scott. the perspective, This

in So, events persona the wouldn't Scott. changes types we don't some in actual makes and of if really we terms that that But we change of -- call the focus of terms the made of business that go to. problems I have the a chase, it sense,

helpful. then the thoughts. line the kind of well. on on as Congratulations achievements FedRAMP And sales following Completely of

as the customers pipeline non-government than of what seeing the seeing in look you your are But pipelines success corporate that leveraging you're the You partner's opportunity maybe there, or all sales and similar certifications type more even there with you at Thank scrutiny opportunities you're seeing your that, positive had seem pretty on especially the verticals? your enticing with you've there. you. is

different their than that the based be almost of for is for I commercial year. fiscal can a house say little initiatives an the now any Yes, we've the funding making tends in on years. What investment been federal business Fed to side two

for excited half, pay the into that's it we're should our us off. off our year in that is expectation we to the the coming planning, opportunity So, our for in pay expectation. And second pipeline really built current the for

know, you year fiscal federal kind September. season. government's Super the call ends in may As it We of Bowl

we're So, to come this well process into year 'XX. that as for excited conclusion to fiscal for as looking

for Great. That's have. I all taking the Thanks questions.

you. Thank

the take line, next will ahead. Turits question Michael from open the We from Please now. KeyBanc. The is go line

Hey, guys. for Once something talking again before, [indiscernible] FedRAMP big been a you've -- great on about obviously, you. opportunity

again wondering do you where where dipped So the ARR just we end with quarter? you for below I'm then the And I come that But I'm quarter said the on ended just in expectations. up did like know -- sorry, that? say

ARR, yes, QX. we but, came disclose below expectation it in No, our don't

but Can I you down for large contraction the XXX% talk to customers, about of you're DBNRR. the where net in of expansion telling rate? some think Thank talking you the quarterly about --

it, the called that components there's no like customers, loss customer actual contracted. you're they assume but saying I So of what's of churn in increase

of that is where that much more much over bottom? it contraction? few continue expansion seeing? And less reduction rate go to down? that the go could quarters? expansion how And of does Does that that How is where So next you're

execution. the with happy we're Overall, Yes.

some is side in if and of the Unfortunately, seeing loving are customers as and that customers with product. it's we're industries, expansion our WalkMe We hitting seeing in areas, then those they fits so if The macro staying apps. different it number our positive banking, the need reduce to negative forth. tech

saw that's of like line FedRAMP So with that, we a in Having amazing progress and QX. lot partners. we in what said have

engines growth are for building So we second half. obviously the the

some as my combination as it that, the well some X I've cases, client. percent; in There's we believe cases, -- walks remarks, in in rather cases, as, headcount; to did some that CIO says, to add by In X in prepared of amount a comes heard see of cut down pattern, a very would in with reduction no they we project. users in expenses some got overall reductions hey, particular applications. do both it's and I cases, specific to cancel overall And you of

any to a account. conclusions particular So, about it's hard make

the of On macro it's both. side, a combination

Right. Yes.

a So the if answer, have gotten I that have mean above net rate or whether not expansion some any same hold can can but it or had know of you XXX% just feeling going don't to it factors. I about whether we've companies Do down of below risk XXX%? this for you there's level some you of

believe will be about -- We net moving that below We be will be ARR to XXX%. it don't XXX% on retention forward. expect net

guys. right, very Thanks All Okay. much.

Thank you.

the the next Stanley. We ahead. will from is go take Baer question Josh open line, from Morgan Please now. line The

sort ARR. question. the gave for don't Wanted anymore, it of you to real-time demand. Thanks us to come know back I disclose a look at

should be Is Just of indicator sort we wondering focusing like do billings? that you on? at -- should we be that now looking more the closely

Yes.

disclosing, that that key us. think be metric for we're customers that will the I

see DAP be This longer our they use where strategy and customers contract many move you go that to we're seeing mission to The customers entire effort As is where with cohort. -- platform. most so our of we basically this -- our as our is for to most best the is the up we length as best where is putting we're can changed to the customers expansion, enterprise and obviously, market remember, large ROI, on. our

I company say we're is is where and future this this where So would we're going. seeing the

and say revenue we what everything have So customer is would disclose. you that Obviously I at. I would look DAP

in Hagit and focusing full the improve are company And XXXX. long-term an the year on to amazing margin. job growth, operating for we expecting mentioned, did is thing to our sustainable is Another be really and we as cash profitable flow

continuing our expand So this is biggest to profitability customer. our big. forward to We we're path while pulled

happy So, with it. we're

seeing then Okay. the some little And there? Discovery, WalkMe Got I impact follow-up. Can you a that bit a you're have it. talk about of

Sure.

to we're way would which showing about they the tech frank, saving be costs treasure their on a like to prioritize we're give their I visibility and map. value, short-term them stack, have and WalkMe exactly thinking company Think and into full where licenses say, Discovery the So with, is issues, help them them is about WalkMe able [indiscernible]. to Discovery, putting

precise on. is amazing And is about them value think technology an to able Our this we what's give data going our to customers.

to for for massive of the opportunity the going decided we where we to help understand exactly and new customers exactly until what's it's on. want charge huge because: year, that's because it existing customers, understand understand issue, to open our expansion one, macroeconomic to for and two, situation; and they We the give customers have end of we us, free us,

launched a it already want to amazing. or webinar, week lot people was obviously platform. had registered We requesting a the join We our ago. demo It to of

for So excited transformation were deliver intelligence, our part this the no very almost able to we're just and are say of And that team and that we our I with and have show it's to us, and few it. time, how a would digital is execute that like within strong and our we able go quarters. release this models fundamentals something data the that about

can Scott. a data actually we've data. had action. ability our always client it present and to way that back Remember, the the Yes. they we've this this just always Remember, -- in It's is collate to

transformation deployment with support value is do short-term the of said, So, save to we're find not digital helping platform the work opportunities also we're long-term Dan the tech helping friction their in they and these if our some renegotiate stack to, reuse the away. licenses, more or their work, short-term the them cost, important, to them going in cases, goals. with as real redistribute opportunities, within And to

we -- it, it's a out great. get So is which two-fer of

the And you my rest of follow-up is for just said on so Got it. -- this year. the free

coming strategy benefits, on could the like Thanks. also talk Discovery, -- after it funnel board the consistent more more? bit DAP also If of Or if there about are that know does going are it been kind customer customers And just type or about thinking that does are it monetization the but that? of the is of top with -- you've after WalkMe the thinking little with profile? you fit initially then you a

Yes.

for new a open actually us, why excited. that this we're So is persona super and

or tech automatically, one a and one we're use This HR, offering we're two DAP, on growing way name not to the the is product, By we're before, As scale focusing into on entire sales, company. cases. mentioned with it, that the of that. focusing we're finance, application, you starting WalkMe

we're So exactly they or DAP, for digital enterprise the to their progression entire us, all with that a which know showing helps this customer data about that into need is digital because natural stack, transformation. their them

calling I it's WalkMe I is it ROI said the And it to as give why DAP. it we're my lead this for the to why overall, our you This alluded value to So, be, because use value just and immediate customer it massive. to the because than potential. we're more one, more and the scale And to to would is is our XXX%. This is expanding you we to map. is a from entire it our can more we but you obviously, it where treasure need use actually monetize seeing platform, just the actual that gen customers, ROI the that decided script, you in do get. as show it, approach product What you free, give bring

able So, think get will that, the actually we no that time. with in new be to do will even that to that visibility DAP, expansion and customers customers accelerate existing

that conversation expand opportunity. group prospects advantage begin HR, take existing Finance. with Head personas, IT, Sales, up nuance one customers of don't of of we the allows because of we're in Josh, a or to Head of Head And new there end important Procurement to for we in brought us of by the because or persona Head Architecture it's This first typically is start there to this our of Head of going traditional or Head us conversation

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Thank you.

you. Thank

Wells from the is from We line (ph) now. Please [Michael Berg] The Fargo. ahead. open go next take will question line

of forward-looking, this to thanks quarter. at I one at you not revert Hi, most the this question. said the my it's negative look forward-looking I metrics, but growth specifically accurate did taking take it wanted for some year-over-year another billings. have to know

to understand what forward? how there? moving help happened and takes? think about can you maybe maybe And So the What are you. billings me puts Thank

for a take is our we of of necessarily when billings, that look Yes. when that Yes, and business. deals don't collected. on so dependent question. John. cash as at forward they signed This is kind highly versus I'll indicator It's are when close

not indicator. a it's great So

of moving had helping as as our growth we're upmarket -- customers, continue Star, focus which looking earlier, the both on as very cash leading as cash the is mentioned DAP our we XX to happy as kind as free And our increase Dan As on of our at of at well. balancing well profitability, there then Rule and flow our which indicator we improving collections, look our customers kind $XXX,XXX with. would North

rather So, billings. we would metrics those point than you towards

quick And Great. margin side. on follow-up the then, a

guidance improvement think year the way million, there saved there from is income conservatism potential the impact? [REF] you Your in about the -- $X here the amount with improved (ph). the by for Is non-GAAP upside full Or some in operating exact to [REF] that side? given laid non-GAAP the from amount operating the

that amazing obviously, more say, obviously yes, have (ph) more would an look [XX%] to came to And there looking lot do being, is We're margin save. be for margin feel in obviously we're improvement, is and for infrastructure. we improve our Yes. adding from which We to by operating efficient. the more some always the cloud a improved, I And we there to and perspective, that where conservatism good. expecting really in gross technology obviously, really, our places places

can operating go So, it. leverage improve we everywhere and will our margin, and we do

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you. Thank

Thank you.

We will Please now. ahead. take line go the next Goldman question open from The Sachs. Kumar line Kevin is from

my Thanks question. for taking

that has impact the is curious packaging there? And reception of new was kind think, starter you. that all? starting and I to the at Just package implemented, how quarter, rates been the model Thank last on pipeline conversion or

Yes.

started to a So of it's pilot July. our reps. We a starting scale few larger stage. be start to early will It obviously with it in still

quarter, we give will next able initial you be some hopefully, to results. So

happy it's data give be structure. right the obviously, we the a think to points. small information. But structure. So it's some now, will We we're with actually And share moving far, you happy right scale forward, to

Yes. And for us, we've started it in our our commercial business, which is mid-enterprise.

initial got start And far, a very small to but so it, good. returns are we've so

And been have terms you it. that's Got in the contribution focus and I partner goals kind just That's of of kind partners. know ambitious of a on mix of contributions, helpful. big then from

you. of kind kind Is line progress with Thank curious that kind Just your Curious that's how the tracking? there. expectations? of in of

our plans, Yes, expectations. their it's them. contribution to of our is to particularly as I partners team year, with significantly areas was growth performance on expectations line I've not set of for year, in got year well our and last a over a performance but that to last and I'm that The incredibly big you, expect tell And are pleased as 'XX do good. 'XX. would this partner one also for only with. ecosystem important the I improved

about partner excited the very I'm So ecosystem.

we're so And far, well. tracking

Thank you.

you. Thank

Please open line next the now. ahead. is question take [indiscernible] from BMO. The will We go from line

taking thanks my for question. Hi,

at bit of going improvement assuming you not into full in next the it sort moving your the Are forward? back half sort customers? term of the Can talk Can just year, that Is customers thinking? of the of lot talk the include about can you next that both your half only a about environment? up of year we and heading the expectations addition You've medium and for in growth what a buying sort of the guide, dynamics reacceleration that but reacceleration any Thanks. some of in year. And you about even of talked back go midpoint reacceleration year. of the line into there's little

Sure.

So we QX our strongest like company, seasonality which every obviously, quarter. in quarters is our have enterprise

In Super addition, Fed, to season have Bowl the Scott as do we expect, as obviously, starting mentioned, September.

an In where continue us QX obviously, applications. to as coming add, addition, renewals and those companies expansion are that's we users for up and -- QX, it's in have event obviously,

and pipeline measuring the coverage actually So, pipeline it. way and have we obviously, the our we're

ARR new obviously So we quarter-over-quarter, thinking but forecast gross way our that our the looking improve based on forward, will and forecast. initial that's we're

plans to feeling see we're So, our and we're as about we strong currently it. according it, very

Thank you.

the We now. next is from ahead. line Vinod line will Barclays. The question open Please go from take

Hi, question. for taking my thanks

talk just joined incremental built up authorization. have of a some the this think government? sales it just I'm can But is more of the prepare kind it, side the what talk before, more upside about that on Thanks. mentioned I achieved may into type of little or you've of opportunity? may be sorry also And you late. you missed guide, an about if selling to maybe you the then you contribution for I FedRAMP Can done

Yes.

start will and So can continue. I Scott

in as one, we in, we're said, So second deals expecting to come half. the

ARR. it So will be as you know,

typically So will those the XXXX. probably said long but will contracts, with impact of the like into will But it in have go having contracts, revenue, most slight an XXXX, on big impact impact that, the a be contracts. government

we the place got Regarding certified. continue, in the before I will we had Scott team team, let and

go time in We and built the place. and run pipeline. happy, with achievement. obviously and We built got everything to other and got parallel, super to and we're We engineering demand. get worked go show relatively us certified In the team this and team. really with cloud, now companies, that implement the now value. we So and we to And saw the R&D it's for go fast obviously, a our

customers have We signed we QX. already in that

them. We are now going live with

in federal. be us. pipeline for So see great there value, that's a is going big the and the to they a already milestone And

want you to do add? Scott,

long time. now held that Well, remember and it's to a investment for we've important that

partner and right, So hand, sitting the we've off. it's Don't the sales space. also continued now and And go in forget it our direct to it's pay that on books side. been federal time in partner our hand on for the investment capacity

I So our ready feel to like go. got bench we've

strong pitch up. we've step the sell time to partner team. got And suited that on close. they've It's out Now direct and and ecosystem to support field a help sales us go

the color appreciate Thanks, on that.

today's over conference. I host Dan conclude to question your you. time. at will hand Thank There's further it to no this back

WalkMe of what come. future the for excited and Really joining. for to everyone, you, Thank

AI, the all us will discuss, exciting and that we things Conference, doing future You in about and we're WalkMe. we're Needham our tomorrow what can more and join with obviously, to the

joining. So for thank you so much

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