WalkMe (WKME) 14 Nov 232023 Q3 Earnings call transcript

Good morning, and thank you for joining the WalkMe Third Quarter 2023 Earnings Call. I'm John Streppa, Head of Investor Relations for WalkMe. And today, I'm joined by Dan Adika, CEO and Co-Founder; Scott Little, Chief Revenue Officer; and Hagit Ynon, our Chief Financial Officer.

Before we begin, a few housekeeping items.

First, we are doing a new method of our earnings call this quarter, incorporating a video element to help showcase our technology and some of the great things we're achieving here at WalkMe. Note, within go replay, XXE IR following which the of presentation. [Operator forward-looking Section the Section XXA to of watch the ir.walkme.com the you make safe and our U.S. in Securities Exchange harbor meaning of statements or we live the of will of Securities Instructions] encourage to constitute the website, our and to Act conclusion today XXXX provisions I information may statements of certain be XXXX, Act available of Private to Securities views events. that Litigation Reform Act of of our XXXX relate and current expectations future These filed forth as March set Form on forward-looking Exchange filed materially those Factors Risk are to result of the number a differ XXXX, in the from beyond titled XX, are assumptions, annual risks, and uncertainties or contained Commission statements of in of a in Securities which report our some documents may SEC. including subject with control. Actual factors, the with and statements outcomes on forward-looking furnished our information the and to the XX-F section other our November release XXXX, for press information. See XX, additional dated

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

on For press performance the dated with the I'd to off key Dan. more financial our it XXXX. And November see that, reconciliation hand XX, non-GAAP like and release measures to including information indicators, tables,

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over achieved for glad higher to and to flow we XX% million. On profitability on profit free customers, reaching we're revenues growth over continued profitable DAP XXX profitable, of and ahead gained a right drive continue on ago, high of to met XX and first million. new the cash. reaching We've to milestone drive high XX. we revenue, million We're cash and A $X QX to as non-GAAP our ARR customers efficiencies ever expectations another we company and $X be quarter over results. to in fantastic year quarterly sustainable previous an business important generating We the Rule $XX made off. our our another we've our sector. quarter. XX. path operating a have of to by subscription now plan, new a Turning had a business I'm strategic the had are journey forward to set on year-over-year revenue processes out report public over past business needed the basis investments We paying The in added the of to million generating we years $X.X scale time the grew X generating our that

QX, huge knowledge saw ecosystem the partnership the invest towards partners in we now cycles for contribution and to and customers. In existing to as new partner Our certified will to deals annual providers. renewal friction momentum continues offering drive best-in-class foundation we and for marketplace streams platform. provider AWS unlock WalkMe the Propel, customers business has the where program, enterprise-grade our can a a new also cloud and enterprise-scale to commitment I'm very experiment DAP with excited have unlock WalkMe launched through higher gain that partner to our been as to to delivery of I potential believe existing for shorter also new self-serve, the both the business relationship WalkMe. cloud leverage reducing this sales revenue we share

agility, objectives. of risk part Our and transformation surpassing high are process recent report spend transformation productivity, more average partners invest success. Digital lack In choking introducing workflows paradox of according to a compliance the and meeting X,XXX while and are processes, to XX% issues. now This trillion, an resulting organization, that is are mutual projects IDC their our complexity not of ROI. and is BCG in there almost at to will continue ensure a all-time an $X.X reporting company strategy huge are

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the X It's that entire proprietary learns systems platform. digital to years. their It's heavily DeepUI.ai users technology the underlying workflows We develop behind an engaging how model past with technology do continue adoption and jobs. all for to our are our enterprise ML-based

leverages X Discovery, Our search, more been employees their employees help for to with do offering patent array data employee data strategy new the capability, our with growth validation demand new a generative right compared just organization. of visibility all immediately and input flow full the capability are QX. part and application is into a data of QX work our coverage time X.X in a AI company leverage also XX% unlocking great flow tap by sure users AI have the launch not Answer our information to a This launched and to into the employee implementing start powered most secure Answer new data-driven technology offering to and and Discovery solved. throughout access of growth need new due can and all generative be offering data understanding issues primarily the and compliant to capabilities AI complete addition platform, our beta, user coverage of assets. according in content the of wide our the to our into guide processes. in They capabilities generative to one This Data X.X allowing in UII a has in organizational also employees build date. The our pending other the resources to AI allowing This DeepUI their work. drive they continued Data employee creation AI UII, extract can why continues hygiene their knowledge make at game use of the ensuring way, Discovery of interface We've QX to any customers. We're surpassing which quarter-over-quarter It's compared a product, for seen by over to product innovative AI beta, Shadow the X.X key job. organization also are in valid million user an the intelligence, application productivity. We've our WalkMe relevant enterprise AI offerings business product and launched in end in component AI million in becoming AI builders employees million enterprise-grade now million fastest-growing real WalkMe and inserting capabilities in to policy. fingertips. is to needed company enterprise to is hygienes secure in AI of is as within to relevant WalkMe changer action

to insights our adoption. revealed share employee our DAP's road Gap, ensured happy critical concluded drive we in role co-pilot companies and will for to We more digital that our and just to and we Cisco, Veolia, vision where map, TUI Realize, shared use We continue helping annual AI Nestle. adoption enhance like cases from develop event, customers product contractual launch productivity. I'm ServiceNow, capabilities

including practices highlighted from also Tech Deloitte best others. our partners, among and We Mahindra,

issues, identify of AI streamline Discovery make software changes had our compliance use XXX They products. of customers, drove one applications. platform fines AI in XX% privilege applications concerned hosting inputting to leveraging employees into they all of use the and In were leveraged adoption the heavily we the potential WalkMe down were company. successfully customer of sensitive Fortune executives and Shadow cut data valued able technology their Their to by and trusted millions to application to conference, weeks, about They to reference just trust. and few are the processes. monitor of quickly avoiding certified dollars potential to of in redirect and XX%, loss During work unsecured WalkMe risky a by lost risk

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that, milestone past product about quarter. address leading AI a of employee their leveraging to strategy. It saved part application also XXX,XXX glad become strategy. their Shadow clients transformation With of They've AI approved this hours of new the our employee our that see AI leveraged was year, and customer secure WalkMe digital as to key direct a solutions. move part Over has productivity. I'm to them Discovery WalkMe

as focus of unit reaccelerate plans. ability new we our the quarter, that that, COO, upcoming execute. relentless Our I over strategic operational is and our flow a to enterprise-grade more us will strong actions you. off. to our we will Scott, to on focus growth. With our economic share able positive it hand investments achievements testament are I'm help and products pleased to cash paying ahead on to of move In to Thank with This business team's execution our QX. about will excellence, were profitability and the

Thanks, Dan.

than growth being clearer to path sustainable Our a is ever. profitable, company

delivered for a our continued XXXX. momentum areas in our investment and QX strong performance from We

and had Our the in DAP rates the and quarter when our to team it and average we savings and customer a and U.S. perspective. our contributions our ARR clients compared GSI particularly the XX, path seasoned without expansion team this our is continue to business space. I'm the of large larger adoption customer pleased is engine QX, X that grown deals team big field value federal paves saw consulting partners the quarter, CTO cost through of solid another X-figure from and enterprise grow included sizes expansion engaged, of When we the the value We've their the significant our forward throughout and footprint, the in X X- to majority higher real help. which analytically helps customers business demonstrate top largest XXX. line our cycle. In team. now CTO deal see win This mid-market. life engineering to true value the velocity million our delivered in delivering both the importantly, customers with of pursuits DAP field we both experts from And digital

base. are of ensuring span that and real digital strategies us ecosystem process, in deployments professionals They multiple bring careers expand advance. of backbone DAP at enterprise because to their who by often invest because WalkMe top Our DAP adoption entire and the tech they These typically critical span the processes success achieve as stack. installed customers value on business the the digital our WalkMe expand of DAP with clients the their they on go employers are applications in to deploying the often pioneers, they deployments new business their new

DAP that customers quarter, examples commitment WalkMe our long-term of of had our again renewals. committed of X we to from Dan multiyear more once mentioned the This largest pioneers.

consistent deliver. Now this we've that only happens to value been able the because of

We also the amazing as expansion commercial with time months expansions our highlighting saw after initial short realization just to was mid-market few deal our signed frame from one our we've date improving see for of team. value This signing, the customers. came largest to a

pleased and as expanded many I'm region, share As in our to such our Energy, of Americas Farms among well as always, relationships Fern some ANZ with as customers, Silver Pure and Storage from Suncorp Origin the newest others. region

a municipalities larger deals expectations had local the to U.S. team the universities great sector our public government. to Our quarter, federal in meeting from

Our FedRAMP provider unique position as the only DAP with status is paying dividends.

are but anticipated. In less revenue and year have recognition City logo John previously has team and the increase and significant revenue our force in acquisition RFP, multiple down last Atlanta. systems the value-added U.S. integrators us SIs increases The demand very we in the fourth into that multiple for growth offerings of of in with over multiple transformation user over stack. In at continued support the have as we while in prototype WalkMe's have system of Recruiting the we're large a seen our Convergence pleased have in experience. the the use readiness pleased Army's the deploying with transactions in State for the value WalkMe go-to-market successfully federal their at We than consolidation Army on and opportunities this tech other structures segment run motion their public recognition. program, to a Training year, program discriminator strong that the is the on to a focuses EBS-C on made now digital favorable which very progress chances Command, initial long to the embedding Group University due optimistic or overall of of to same in objectives. ERP in new Ohio or deals a a driven with Business the Information Systems We and the the bid we're the the XXXX. system supporting oftentimes government single University, EBS-C. the total, proposition new cases SLED, we federal, In Army's pace X some awarded were Systems of quarter words, These by Enterprise be Hopkins rapid continued improving Note ramp signing In a improving our last channel. sector

to our is and business of anchor ever net ecosystem partner being Our commercial, ecosystem new expanding the will and an than be by public ARR sector before. continue forward. is More enterprise moving impacted

half are integrator largest and our will impacted adoption into digital now we the group adoption solutions our announce our best-in-class the our the SAP of in Congratulations respectively. partners system partners first-party driving their Partners the partners by in that reach global our of the These QX. our expect tool over again were net We specifically Concur proliferating the our ARR Partner XXXX, new of Realize and Partner offerings. partners have and to for digital seeing winners global At We're to that end and for ISV company-wide. We of WalkMe platform. another ecosystem regional to of all signposts are Year. is the October, expanding own onboarded and in named Deloitte of WalkMe Year, being incorporating Ecosystem large pleased Global

quarter to to demand and can have year close change we we As we opportunity. with made progress are improve continues forward the am into and pleased organization advantage the drive I the XXXX. to to tremendous take environment look and of XXXX, improve, execution. in to start internal positioned how fourth I If the our

to it Hagit. Now I will pass over

This expect on economics with million unit company. positive finish for profitable a our drive to of to to operating the now of over I'm and that success. We on our Scott, non-GAAP you, fuel our and ecosystem. a as part global the WalkMe to very as basis, We expect quarter year together $X a you setting business focus non-GAAP priorities flow the several share profitable million journey free cash and a proud the cash and have efficient efficiencies for our the a we this in worked in to $X.X thank generating fourth and basis huge entire being processes be continue to Thank to goal more while higher. continue free our improve flow profitability, the was closely our XXXX. In quarters, right milestone that quarter. to last to optimizing and profit we on be team achieved

the We growth will changes profitability The and our made we tone are path. have right come. the quarters of on set expected to in

We right plan to financial the have continue support strategy. the to long-term

Now turning will I to expenses margin, numbers. please results. referring When be profitability, that and discussing gross note non-GAAP to

a have provided our We GAAP release. non-GAAP reconciliation to of earnings financials in

third for quarter was subscription also We total Our while million. gross by growing grew revenue XX% subscription to year-over-year our the XX.X%. margin revenue $XX

our improvement unit over strong last Our margin subscription few gross in reflects economics. quarters the

at Our year. services XX% professional level revenue down a expected as compared were as to and QX similar last QX

Our to on organization to outcome-based the transformation, services to respect customer success with the model. services focus grow continues mainly and recon shift through

our a by in forecasting improved revenue was sequential the for now services workforce are slight driven PS and We trend quarter continues. XX%, decline gross at the utilization. margin fourth better positive as Professional

row, this was million, structure trend QX balance how goal margin, on margin rest profitability. a growth we up to and last was XX% improving structure, achieve gross operating best-in-class to proud to reach XX% the XX%, will OpEx company achieve gross leverage profitability in X Our came for margin a With a together of us have combined total year. We our positive can the subscription gross allow in our remain this for believe our maintain from that cost a of we of flexible entire $XX.X of Gross year-over-year. We quarters schedule. I'm year. of up ahead current scalable incredibly with milestone. the profit

R&D were Our $XX.X of million, expenses representing revenue. XX%

AI invest to enhance our we strategic in data will We continue R&D as capabilities. and

our $XX.X our $XX.X XX% was XX% year-over-year of from or improved go-to-market an were reduction better QX improvement XX% and sales of by and year, last year. revenue, the saw below improvement earlier were in The expenses optimization channels million organization. G&A headcount of marketing million in Our driven last in expenses XX% within the year. efficiencies or revenue, QX marketing we

last WalkMe through efficiencies was QX revenue to a quarter digital X.X% to by $X.X of flow, $XX.X million drive year. We weighted million continue QX across a was average million and last scale Earnings to to were income fully compared shares loss processes for year. and $X.X per QX in diluted will compared cash in quarter gain in generated million adoption utilizing and the million streamlining year. leverage own cash using improvement profit burn last XX.X in million loss free quarter from XX.X% last QX $XX.X of solution. of of the and for last workflows, We outstanding $X.XX, loss our or $X.X Operating a to a compared $X.X positive share $X.XX in QX of year. in million organization the an Net X.X% attributed generated

XX% last to Our level, cash a cycle. compared for a fluctuate expect seasonality in negative it free management positive to was the cash flow, free we cash our will quarter On margin maintain year. given X% but flow

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

are our growth strategic cash continue our cash capitalized balance and sizable investment free supporting flow, explore generating goals Given well opportunities. we to and

now we drivers profitable strategic for and achieved being from quarter continued company a as of Turning saw a to was guidance. positive milestone our momentum first QX growth record time. a the

the fourth and for quarter we expect of in year we our profitability will the forward, XXXX. maintain Looking

non-GAAP operating XXXX, full the $X.X of to expect million $X.X free $XX with cash million. of a $XX expect range flow to quarter said, in range a we income a million revenue the year. Additionally, million the that of in we end With XXXX and to positive for fourth for

$X.X a now of your million in $XXX.X QX. we due to improving will we expect our questions. operating range revenue in range loss you, in expected non-GAAP For operating full XXXX, of the million now million. Thank and loss take leverage the XXX.X of in We continued year million, EUR and to the QX the expected $X.X now to while our expect range outperformance

I with guidance. wanted to maybe start the

reduced line at bit I revenue was a think little top guidance the midpoint.

about curious within there. if curious the can some seeing from customer Scott, the particularly as lingering your you're down-selling some So talk if contracts large just maybe of but had come some of mentioned up renewal? you pressure any I base, you broadly drivers of know customers, enterprise And more renewals for

let I'll first. it answer Hagit

Yes. are the Thank I'll a more that and with contract -- how an our the revenue over for start side structuring last sharing our being fact with services, along we to have similar and you moving shifting cycle. to shared we PS quarter. question. solution The more PS outcome-based what are changing to we it's the PS that recurring we the life a is recognized are

we macro want continue And comment QX. headwinds you to could longer do need and do with deal the we decline and a macro, also, on with the in delayed anticipate cycle. Scott to slight projects. all also This headwinds? see Dan, lead for So to would

logo in Yes, see story jump to for and over but seen course see down-sales. a I as a and rips throughout of and optimization of that improvement can off. and the impacts QX, alleviation contracts that we've prevalent some in. We were of similar downsizing the trailed seems layoffs seen have We've continues, QX do quarter-over-quarter it's some 'XX XXXX

impacts of kind positive customers? you're any Great. if there, how That's I that's Essentials. with seeing ask I still to new curious resonating early, the on And that's the And know wanted just progress but about kind helpful. new side? customer WalkMe of then

a house. positive of grow that I giving been really renewals remain the expansions important to got lands. have ability customer for sides continue to DAP part It's I too. impact, and to need plan, Yes. our I've an us base mean both to I of nice balance but the compete

to So every it's you nice tool we've been that use great when it's it, needed with we've But We situation. in it. have don't needed us. said, it like to it's for when And early it. have essentials been

XXXX. grow to We expect it continue in

Josh Morgan Scott Needham. the Baer at from from will Our Stanley, of come by next question followed line Berg

is This on Wilson Josh. Matt for

reported So sequential XXX% I'd that math, largest today. on above my customers like it date. the employees decrease the XXX you've to metric love NRR that guys just the double-click you for looks is seen to On

commentary So rate curious tune XX-month was get there at the this What a I'm give NRR in implying term? deteriorate I'm there's anything maybe quarter? exit recognizing on if that you of that trying metric how any the that to here really is a throughout can trailing throughout metric. continue Or to the bottom the is trended quarter? near to did

is take this Dan. will Yes, it. I

So than almost was QX and QX QX better I you was can tell in metric, every almost in every that better QX than in metric.

leading So I see QX the the metrics seeing because, would are say decline I quarter-over-quarter. indicator than of mainly say, is would we're all Other that, that you improving year. this

So we're very happy with that.

that to those that of prove Maybe would improvements? Got it. kind on focus kind the out What just you to should as all a we that. is point follow-up to metric of

Yes.

going basis. not the we're disclose We're ARR. on disclosing a only yearly to So it

the on, what see growth next obviously, So our our What we DAP there eventually tell ARR and and hard DAP guidance those something can and customers, that's XXXX. to for get obviously we focus will year, metrics. and, really specific will that is growth

Needham, will from next come question Berg the Tyler And of line our followed Citi. from Scott from Radke by

Wishing you of a during difficult time. luck the best

third it. I Scott opportunities work about there? take Hagit. your second those X-part then is on probably of or the than because initial pretty the on excited First exceed is guess want expectations rec meet in the of don't different opportunities that's expectations? you're there the quarter for those did How to is, kind or question question question the one, part And know rev know I contracts if your Dan I federal a pipeline. is the

continuing take Yes, portion more importantly, XXXX. expectations. into our Scott. can absolutely I that, And first it see we trend Yes, the met the of

quarter. for hoping good had a were We a we So quarter. good

So about were very Hagit that. the talk very, piece. pleased can we recognition by revenue

multimillion Yes, dollar And this this in certified One, March everyone deals FedRAMP few that want is multiple -- things. Dan. I want contracts. got to to year. have we late we add of I already remind a

very we're happy. So

Specifically, we already your answer question.

deals, those in up, ramped of has linear. some not it's this quarter, As so specifically

basically rev obviously on overall, rec, we're So only recognizing month. actually month by

less and of see next It's for cetera. specific year ARR federal a the this on and it's a the to even results, was year when therefore, the it year. contribution, case, X-plus revenue some So I we'll and deal XXXX. want pleased our following remind, full And multiyear opportunity significant in of a above we're pipeline in the et expectations, the deal, And the them. it than potential boost we'll to when see deal. very way

then from then I us your about new help talk And able suite? guess be power Or I going guess, you I drive to Realize. going to to platform that it? the DAP really a is it -- your, you perspective, sell of any economics how platform for does with that's are the maybe ecosystem. you know just And direct released kind your help to distribution in Propel broader do Great.

Yes, I Scott. can take that,

and provides to from X sell the all, is learn second, own perspective. and their right? reasons: standpoint, quickly onboard able to first, ability of First to for them X from things a be partners for me And efficiently for us, recommendation It it does distribution for resell deliver ability support of interesting product support a how and and and for services a the most them to to implementations. the

lift partners putting because I cases, us win then I get I happy are most twice in some product So clients don't I our story partners client the Azure. 'XX product. resell to who very well within my customers. AWS sell terms But cases, to about then the lift, in you'll notice and that are of DAP -- my small. is I as sorry, get my talked of resell, help relationship base. willing, we distribution recommend good expect because portion with business I get in And overall And of in any as and in get their

until improving as So it for focus to stores focus have systematically our provide able the as now, more expect so got we've program. on that on consistent That's help be and can the cloud product start their never you providers being the But product that you in we 'XX, up a capability-wise, resold. a well that had to and see program. got to to 'XX. means And a us somewhere,

So hard the program initial that's has partners And response our a tribute from get of to been the good. a work 'XX very in to launched. lot

from Our JMP. Pat Tyler next from line question followed from Citi, will by Walravens of come Radke the

just -- So better you the back QX, than better in think sequential XX% just on about of than is should terms growth how the QX. stabilization bottom slightly to I comments which than quarter? we QX was and going higher revenue year-over-year think this growth, in subscription was saw QX QX,

kind of can subscription forward? you better in feel do was would elaborate growth double-digit like growth driven quarter, there hold sequential just can subscription have better going any So throughout on revenue? the you slightly And if which you the linearity

Sure, I can Dan. take it. This is

Cash achievement. year So with pleased was focus it, that way and this plan. obviously, quarter, We're quarter a a and the we We the growth a did original profitability of at way our great ahead transformational to for things and of more be positive we're looking than energy a us. of flow lot last company. investments, lot sustainable

we're reaccelerate can down growth. on said on we revenue. doubling how script, our ARR As indicator in a is I my focusing Obviously, lagging now revenue to

So by accelerated year, we followed ARR see in next growth will revenue probably growth. an

Adriel lot a sharing would growth. investing the continuous set say, and to I mission seeing our So Obviously, ready team, down economy the would category over we're bank partner. stable, say, for in super working. up $XXX in we're And million operational where the now we're I a entire profitable we've that done, had and the we're go on opportunities got, this fantastic, are the Sunil, doubling unit in of, first changes and to year ELT company, is Scott Hagit, us

quarter. becoming in hopefully, off things really coming we WalkMe, I allow us that many which focus growth while we said, it we're did efficient, working. and So profitable. cash that and more in That as pressure of And takes see now, a on we the upcoming lot did what's to generating becoming will will

for a Hagit profitability And side. on Great. the Okay. follow-up

again and kind strong what quarter-over-quarter. It operating cash were further another reductions? So down And flow. of talk expenses about that? just quarter Can looks drove Was you income headcount of operating operating like there operating X of flow X%, is XX% at margins the cash how margins look into? last quarters, here about be that the operating I in and thinking should if heading the flow kind we cash

to initiatives continue that QX, we we probably in also And focus be we to probably OpEx in around impact seventh cash QX, see start that optimize full QX still see streamlining we I'll quarter maybe a on took on improve assume our will many, in we with the on the we are many other RIF the just same to level. row remind RIF we in flow, we we that processes and that So position. in and the profitability, continue efficiencies, workforce. continue improvement. -- We our of April, our coming in in. Around the and I And did coming

will positive our the in probably due seasonality the We to around but managing will be it to cash quarters, cash. continue coming fluctuate

the from by Walravens question Pat followed Keith from JMP, BMO. next line Bachman Our will come from of

all, with the Dan, and our family. Great. entire thoughts and are your And of WalkMe you Okay. first and prayers families

Scott. question, First

clearly So I mean, team overall, federal was meet Was, sales did expectations? the good.

Yes, we a good quarter. had

very was performance QX. QX was with I was better And this quarter. than than So our again, QX. QX pleased better

So about we've talked Pat, before. it

a Fed the expect we did, but anchor board. had quarter We and good quarter to the they across the

All of right. Terrific. you're and million cash then free in secondly, positive. north there's And $XXX cash flow so

right? talk your like you would what things really depressed, So that then a back? can the mean do are with to And we cash? consider do So about would stock some it? little what buying all you strategic is bit to with I

again. thinking Yes, us. will about take Pat, appreciate Really it. for I thanks

is when stock And going going look our buyback, on We're have on we're amazing, of especially look a not opportunities. buyback, float. yes, to position cash don't we lot obviously, and to M&A so

on are like we're And I to certain where going like plan things going said, in So as federal, working M&As, regions. seeing XXXX. to the great invest we're like annual look, on ROI we partners, and we're for as

reaccelerate on said, focus have cash we now profitability. how to we growth with we're I our can that and As going a foundation very strong

So from in will see the probably quarters. us you that's upcoming what

could follow-up, white do data you scientists companies see And space? Dan, fill more where have you AI? with just -- can then space white Or Is that so it I M&A? as can I that what -- buying mean, you the where a is do

made I DeepUI to our say product. so So tech to from we acquisitions the Zest, far and was those acquisitions would all pure obviously, make technologies we

we're huge can in can added Now tech a that market if at. open we not value. revenue look us, say, DAP new and just markets and even, in believe go I we looking have that would fields a And opportunities will certain that for something that's and we

obviously workflows, lot there's So of AI. a areas data, analytics, to from automation obviously,

we lot out And of well. and so as in especially now, balance. is a the private right companies that the and going power There's use obviously to there the there, markets cash great opportunities we are have

will question from BMO, Bachman followed Michael by next Our come Keith of Wells Berg Fargo. of

were the expansion new Clark among clients? lines, this This for be that whether forward to I creative expansion notable and notable present need common highlight employees any Brad new highlighted going the want that is departments, of replicated ask other on during how themes, that'd Can quarter. can product Keith. about you you the be sort of in

ahead. Go Go ahead, Dan.

Yes, I'll add. you can start. Scott,

right? more in we're that, ROI. So cases. we're repeating value a want is and the that, as applications and it. to to working, we bigger we with seeing then But seeing X and and bigger And or amazing And the there we're use larger or showing They're scale. we're call, previous starting going a journey obviously, X mentioned bigger. we're when do in Obviously, it then it's

I my renew that just they were had means an not renewals, a and were X-year it's X years. or That actually dollars. those it already additional customer That contracts massive WalkMe for for confidence. those on multimillion-dollar huge notable renewals X-year We expansions. referred script. that multimillion show So to companies

if of ROI. basically, And Some in uplift and on And we our what we renewals. those obviously, great value I job, Once can value, measure you to for that the that. know million Scott, over want this we a quarter. saw push And ARR massive that's $X how more uplift on don't on we're deal doing follows. can had focusing the how customers just renewals we're create

Yes, I'd add couple of a things.

of the workflows but they is mentioned of when applications. that's second any process we ones gets large out applications, one SAP. do do the multimillion to large, a the the And for First largest that's order that's X one all, it when onboarding cash, was on stickiest You that to rolling GSIs of when in or applications with have I Workday specifically It SuccessFactors will us. interesting SAP, we of for tend expanded big was multiple lot be anchored portion to and it dollar are upgrade see that good upgrades expansion. you cross like the a a they be adding applications, the use or and our around this right? time the And a big will of And client for cross typically customers applications. group, value. And that major them major is or us. that user

roll for that they in to completely desire moving it. It the was out rest their that were was make right And the the member S/XHANA. place a this And critical it is in X which firm, sure driven digital to go firm both as Europe or going now ECC do clean was the SAP. implementation particular by U.S. they as X the of be have from well So firms them back adoption environment to the world. other SAP, in they'll to they to of prototype,

So this SAP update. we'll off big builds see that another expansion

they sophisticated we when be they for the those for and because large, that's be to we tend complex, So shine. look to us, are tend things

Michael from to round be from will by Wells the from question Michael Berg Turits up Fargo, followed KeyBanc next Our call.

is us I all overcome product. this on want share for team question and to and of prayers to WalkMe my time. My difficult thoughts

Discover standpoint, this we also products. new data data intriguing You AI are those on especially validation beta. lot just recently into Obviously, very from discussed as are move of and But my highly launched enterprises a generative world with focusing and readiness. capabilities

can term products these customers X in early XXXX? as how think in through contribute at the you well So guess, understand, adoption maybe or you least can or help feedback as us I from near

Sure. It's great a question.

employees. X of have. quarter-over-quarter, we as already those -- are that We're one of the millions So XX% the fastest-growing are there product almost I lines covering growing of mentioned, those

getting And we for really just to free. be of good feedback. fair, So the year the we're until it end offered

start year, we're going to So seeing the next conversion.

huge, a like our that companies. they're ability value WalkMe and for boosting added that, base. that's and as to them. their issues have moving years like which having companies understand digital of For That's data bottlenecks their have priority to call generative pushing the that customers usage to giving show upcoming you The guide and actually and we we're transformation the digital actually data the allowing Add we within we to transformation. Adding showing what beside they customer AI us, the treasure of the really where the in we do, and Shadow what we're And where and shape you the for cost they're generative them AI optimization this saving to strategy fact adoption is huge they AI, to help immediate to the that value. the what data the exactly in map. We're blueprint of basically say strategy. them understand that have

will we're looking AI AI customers at that drive them. X.X. the that fact outcome generative And generating for transformation we're there get digital like So amazing our helping on

that's Discovery AI. what and Shadow we're doing with So

show for generative amazing. have the hygiene. without absolutely to is them. UII for text of doing next and that can foundation have data what clean It the we exactly we Obviously, is call where action. opened UII. issues. is so many we them exactly is data this that to cases generation on where automatically validation, valuable they Obviously, them us the something AI On relying super is compliance, our data use can like This issues tell fact anything. And they data

those obviously, above well, -- expectation our and adoption were of making very very, we're expectation. products and overall, well The continue we're above And our So forward, pleased. to well there looking usage investing the to more WalkMe it be platform what better and DAP use and more more lead customer. on, obviously, we're will to, moving that case-based focusing customers and part DAP of WalkMe of use and the

can the the for to about Maybe hiring the impacts And quick gone markets we're follow-up going now sequentially for investing back a how presumably growth with of back directly Hagit. down of times, profitability Headcount couple forward? thinking help us has RIF. more Great. a you're moving you understand from and

Yes. I will take this one.

We're looking because obviously, ROI. at we're the not we're down some constantly seeing other continuing profitable of growth. places, we're In So places hiring we're grow. cutting to

we restructured focused and like, I So the on things. say, right We're never just stopped. would more

as reaccelerate I XXXX, said, the entering we're are As we to our allow to us will growth. going opportunities look at that

be hiring right will we in obviously, so And the places.

R&D product examples, we're in success teams huge Some obviously, in we're great seeing obviously, Fed and where momentum, and seeing Partners certain products. where

this balance always And have if to based down. to double going the how always and seeing it amazing and is holistically. cash growth. looking we're And So power looking go it profitable opportunities, we're we we're at on is at This the it. how we're

come last Michael KeyBanc. from question will Turits from Our

improving loads course, each all you and of to want that with said I you have with of of the first, make sequentially. payers Israel. been sure, metrics Of

there? fourth that it a in the the headwind back guidance saw the quarter? was that year of down still made that you What for -- was we assume shift. the have But NRR means I know as But macro in-period I that headwinds from and as -- well. the So what service bring terms the of incrementally more we that, as ARR well and

So deals mechanism, One, of ARR compared especially mentioned, the and that yes, some the in were closed in and a impressive deals as everything and Fed. QX. was very step-up Hagit has we to QX better QX

recognizing perspective, potential. revenue not them That's their we're full one. as from So

the weakness could that's been we're the although better is And piece better than and QX was second have much, QX, much obviously, services. for. The what pushing it on and

theme still Scott So we as the a and QX. the have sales saw deals headwind. team And that the to we quarter, obviously executed, that pushed was it great from mentioned, big but really that's

say something SaaS the constant revenue I us that's and not But So seeing meeting are would when aspect a is that hits improvement we're this in immediately we all services, reason. the metrics. the

mean, in for could Fed. I'm in is great an more see done you've what enormous to Scott. -- I opportunities. of set the I It's squeeze one curious what Fed obviously just If

think maybe side talk a about and on way the -- the little side, the focus get in you directed set what's of now opportunities potentially bit we're those to could or about stimulus and what most how types civilian really effectively? you If agencies non-civilian on are in

Yes, very good it's a question.

While federal in space. we're the the have don't sellers space, I in investing X,XXX

been our about trying laid we've where out, be and very our So exactly money we to as spend you've focus. thoughtful

armed the So the on side the of well in we're house. services, DoD doing

it and Probably that to than at work community get takes springboard with in much it's to longer the as at the armed we've taken a intelligence Corps to and gain Marine going have because as opportunities time the in services. the with expensive invest well the done we So we one really to of the Army, not Navy.

money On the the civilian house, is. side of the going we're where

year. large is a I've VA homeland So to able at them and that to the it. interior, customer, large be focus. looking not at going Not to something if looking in a got already But be of HUD. programs, interested came Probably one probably in chase we to we wouldn't to Justice. We're us security. see chase from expect We're expansions next not

with on It's some the armed we Hopefully that the that intelligence. And not and of sense. to the and trying with DoD side. did so we're side of the the money chasing leverage the on civilian house budget-wise, work VA the makes services

that, I it the back for yours. remarks. that to Thank floor will closing session. pass you, Dan, Q&A Michael. is our concludes And Adika CEO, Dan With

us first, to weeks. amazing, want times. amazing I want past our thinking I the in everyone, to about team. work for and in those stage difficult thank did X thank John. us Thanks, They the and encouraging take

So Thank partners, with looking everyone. quarter. I you, want to you support from and to forward thank speaking customers, the everyone next