WalkMe (WKME) 22 May 242024 Q1 Earnings call transcript

Good morning, and thank you for joining the WalkMe First Quarter 2024 Earnings Call. I'm John Streppa, 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 continuing to incorporate a video element to help showcase our technology and some of the great things we're achieving here at WalkMe. presentation. go or IR be a the of to to at avail you conclusion live watch replay, our encourage to website our ir.walkme.com following I which will

call Second, following for portion the of our remarks [Operator Q&A prepared Instructions] the

Private constitute of today the Section Act Litigation the relate XXXX the Securities the Securities we of and of Act safe of statements of and may future Exchange statements expectations of information forward-looking harbor events. the Act Certain XXXX, XXXX XXA our Securities to make within and meaning Section U.S. of provisions Reform views XXE of that current

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

comparisons. means prepared as decision-making we or period-to-period addition, to a financial and presented a information presentation in of substitute measures is these for are or In this and metrics non-GAAP will isolation We non-GAAP use for certain to and financial considered evaluate accordance be not today discuss metrics. operational information the in financial The with intended GAAP. superior as to

with for about and in its understanding the performance past We management and operational key and future by transparency believe used of information allow our results, decision-making. operating enhance these respect metrics overall that provide financial measures financial prospects greater to useful

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

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

I'll to that, it over Dan. hand With

range in everyone. and great guidance nearly ended to expense to generated is revenue a XXXX free across a double Thank of John, our first top $XX cash more quarter. We in million, We of growth. quarter our of and We're of all with nearly good morning, $XX.X the strong you, with the high flow XXXX. We're was million the execution line strategic the in priorities strong accelerate first seeing fourth the off operating our non-GAAP start end combined management in alone, and we generated X%. which than what quarter margin which

best on delivering trend laser are the all journey. a We're seeing customer experience focused We very aspects our customers. on our in positive to

ARR I'm terms quarters in past first of biggest marked in happy The our the X renewal share for quarter and that to renewal we the quarters. rate had renewal, up best

customers And paying our XX and our customers $X are expanding We cohort service in space. service to ARR, us through every support in that from over also us. our aspect improved of we shows now We customer customer organization. success large in quality in with this quality million have seeing

up consolidation big of ARR ARR in over overall, for segments some demonstrate in increase but customers, account side expansions. we grew the to on due we see as customers, did was an although to system consolidating XXX,XXX it total our and DAP, continue not number of some their Our and both and

on performance to plan. we on and our we growth to our by are this as pleased delivering track end path ARR double accelerating net I'm continuing the are very new are our of year. We the with quarter on

huge has created GenAI growth opportunity for addition, WalkMe. a In

successfully implement with their GenAI. the our learning to position our approach recognize strengthening spent most last for months workflows. They I critical as and critical GenAI huge As in their customers the the speaking market. change we're into innovators, leading and a to organization few platform opportunity

in success will GenAI be infuse and the right of junction to AI rushing of of capabilities workflow. flow transformation daily of of The every every scale every the GenAI the inserting are in single processes employee Enterprises into success work.

the AI to GenAI Think to BCG prompt go to know for to and is change daily AI all what what seamless about how need, and that employees, work second, path flow workflows. when complex. This GenAI organization to they of it of they to for employees, in and can get know to build efforts of and their it to it to wants how success. and management order clients its too just XX% make capabilities, their for right and to fits process the work people. them for contextual truly the telling where they to front be make is in get have must into related their is a employees. have that of If AI the do need to use path in find their they And

We purpose for a our AI for AI on assistant offers created work. enterprise. I'm introduce new proprietary always kind use GenAI that copilot, that WalkMeX, the of in of the a understands human in new WalkMeX flow allowed on like top proud new It's WalkMe's contextually to technology work a general very basically interface GenAI completely the workflows. of copilot. any experience does, power for LLMs that, everyone. employee active combined in capabilities them making of the With copilot an contextual of real the to we with DPI flow and We're visual

generative only can across any form AI such other AI assistant copilot also and automations writing, WalkMeX as with deliver power capabilities service. offered answers, reading, work WalkMeX can that any application. validation text-to-action WalkMe

We're internally, in to it success improvement customers select and We WalkMeX support departments. strategy. together. believe endless WalkMeX using in now cases use company GenAI showing and the exposing world it's started few the that every our their ensure need exploring to IT and of We've

of As about very I'm the you about WalkMe. future and can hear, excited WalkMeX

years, copilot XX building best and for experiences and opened been now new of application, GenAI we've top of us. so has cases use enterprise many thousands new the possibilities so many on For

expansion partner transformation and growth for business our Realize be will AI our XX. future on launching WalkMeX at huge drivers WalkMeX and June officially in We're annual the customer quarters. event

here. we're But not stopping

experience. use our a can we've WalkMe They had and attendant dimension deep that to a aside will platform. the automation, our of attendant in thanks back-end This we're create customers. For offer completely technology, only as action the years, full new back-end UI market with well. best automation dock to cases adding now and the contextual unattended up for automation baked right full into the now workflows actions, trigger opens UI automation will be

we our the these UI back-end RPA our technology, we upcoming and start releases into platform. automation, tuned our to on deep disrupt first, capabilities With focus strongly hyperautomation capabilities and incorporating as contextual GenAI now are positioned people market. Stay for

Overall, will QX what the year has WalkMe. been important perfect kickoff for very be to a

will we operated And and out I'm innovation strong sure powerful forever way We enterprises. are technology with change sheet, in automation balance have very so and making investment. the GenAI are the a now, strategic rolling our much

WalkMe From clear quarter-to-quarter, more for much it's are the endless. to becoming me that opportunities

with technologies driving new experiences. the adoption new and and automation, them are data powering We of

XX% be accelerating doubling in moved needed XXXX. on performance. new cash is already are The to accelerate We committing ARR talent to on We additional of AI and main company investing and investment making our producing we'll laser-focused growth the focus KPI to of AI our and acquisition That net product, functionality. XXXX. is for and in necessary R&D

this process challenge, strong tackled proved resilient to we and quarters This WalkMe. execution. been all every are and few journey their have for work employees that and big for company past change. highly I opportunity to and transformation a our to hard a want thank amazing is that adaptable We take every

are truly WalkMe. We one

to And that, hand it to our with go-to-market. Scott discuss I'll over

morning, another enterprise Dan, our organization and executing new double quarter step pleased in everyone. plan XXXX. good businesses I'm to sector our towards in planned. our quarter, goal progress partner, with made ARR as strength and with good Thanks, a had the against across making the first public We and in we net the

leading conversation across the focus highlighted to in customers we go-to-market change execute quarter bringing workflows into customer and our the use common on to our as life implementation from of business. the we and workflows themes the delivers by cycle with value that success. approach ROI Last the the our platform the that to are organizations Customer presales ROI

and engaged sales how Our with throughout is our this about performing enthusiastic customers resonating force the sales cycle. is and

within platform our are a in have as are about workflows biggest where reach seeing expansion organizations. increasingly us as excited in of to tech customers and opportunity the the we very AI we're WalkMeX are their meeting is We the friction the reengineered front updated stack. they increasing include of our opportunities fantastic

to capability their a to across deliver for Our environments is application customer context WalkMe me. unique

been front using opportunity is patented in technology about Deep excited to our This approach I've UI and UI recognition more innovative amazing, never of the us.

share improve partner pleased and front, continues WalkMe certified team added to Cognizant the the and I'm that On partner. a channels impress. as to alliance we've

partnership global this their fast will results confident With value. reach, yield and I'm

of and platform, being trained platform the that to they digital requirement. which a market. that in our see growth receiving adoption leading of learned highlight are indicator they number is To our one our part in the include all seeing demand that global are of this nearly the SIs We are of great now continue recently X/X partner we of sell from RFPs a the employees to point, as deliver

very we DMV, number quarter, vehicle of as in of who On those a a the sector welcome important drive likely sign expansions State included great a LAN California. side, a for California well with which had of as public you the

XXXX. well both our and existing growth grow and in positioned our execute to continue to We on expansions, goals pipeline we're new from business

our In the to Veteran new their Telecom great Limited, while Program Ithaka and adoption the platform TPG like Apption of Marrow the see of quarter, with of Harbors, directly we payments, driving ShiftX Department such ROI their they expanding the our relationships continue business National workflows. and Donor value customers added impacting as as and and Affairs, customers

team of to With proud progress review we've I'll our to that, the financials. incredibly it the hand over I'm Hagit made. and

with cash results as quarter operating pleased I'm non-GAAP everyone. X%, flow morning, continue model, business our the good while revenue million and end in of and Scott, range. high our nearly we $XX first the to margin generating guidance the of you, improve a of achieving Thank free

continue ahead into make necessary growth drivers on and focus required. to investments we year the We as move

point our we focus XXXX the ARR as basis a low XXXX. expect our accelerating to We throughout QX on growth new year-over-year of on be revenue net into

for future GenAI investments. continues our opportunities investment catalyst enterprise a in the within ensure can be innovations growth over base, Our increased IT they AI and will customer ROI to technology attract time. WalkMeX, with from

that referring turn discussing I operating income, will and to to like With net when would the that, let's to numbers. expenses, free numbers. gross operating cash I flow, note income non-GAAP margin, be

$XX.X of margin high. of XX.X% first the grew for year-over-year with the subscription for a X% range. by revenue guidance high total a quarter quarter new Our We our was million, the gross end at revenue subscription

We gross are level. pleased this with margin best-in-class

Our revenue internal plan, outcome-based was our with and project. QX to but in the slightly strategy shift $X.X line partner professional million, below services for our

nearly quarter similar revenue better a first was breakeven XX% QX, a utilization. the coming a forecasting are We gross margin improvement quarters. driven PS in by workforce the year significant PS last in in of from level

XX.X%, Our total profit up from QX XX.X% up QX million, was for year-over-year. Gross X% last in $XX.X year. margin of gross was

efficiencies outperformed quarter. and largely initial saving we plan, expect not OpEx, costs, in again we a our will additional driven the by second QX occur G&A For onetime in that employee-related

We future in as accelerating are opportunities profitability committed balance opportunities. growth our growth with to invest our we

XX% of with R&D revenue, quarter. last representing line expenses were in $XX.X million,

to our support platform, strategic talent invest and additional continue capabilities, We data our AI in to core AI including products initiatives.

the for Sales and in the revenue, last that XX% quarters. we additional QX growth We well we improvement from expenses of an XX% in of were year. headcounts marketing or $XX near-term are million add opportunities, look to coming and resourced believe

repeat in G&A QX level expenses G&A collections revenue, we QX that We do XX% not XX% believe to that the to of of better-than-anticipated our from and a were and XX% savings will or last return in we down forward. expenses $X.X as benefited onetime year. million similar from other QX expect below going

last or attributed X.X% income XX% $X.X for operating year. of of XX% of to QX income or or a $X.XX million to $X.X million QX was million Net a of million quarter XX.X in $X.X million XX% per diluted QX shares WalkMe was fully last $X.XX, the of to loss quarter a average QX income using revenue, of a improvement an outstanding $X.X for loss in weighted compared or of was revenues year. the from share Net year. loss negative in negative revenue compared last

In flow, the cash QX, million an we generated improvement free in of $XX.X $X.X cash in burn year. QX last million from

flow XX% free negative to ahead cash of were for margin XX% strong year. seasonality and compared a free cash that Our benefited On quarter the flow, expectations. well last we from collections of our was

we cash, not but levels. at forward, continue generate will to Going these

short We deposits expect the ahead first For quarter the the full ended in our cash term to million equivalents, for our quarter, we results marketable $XXX year, and original including with securities. be plan. of cash,

deploy accelerate to ways our in growth. opportunities explore help to continue our can capital to that We

to now guidance. Turning

with we saw year-over-year for committed we believe We have quarter. the quarter, and our are the what remainder revenue first compared of remain XXXX first to the year the turned pleased throughout and growth the revenue in on expect growth. to to We increase the be our higher we subscription corner in progress

first in are operating will guidance. an we full the that we Given throughout year, in see the income our improvement operating our year expectation quarter, outperformance raising some leverage

quarter, operating $XX second $X.X range in of expect a For to in we million the and $XX the million the million revenue million. range of $X.X to income non-GAAP

to of $XXX $XX of we range and guidance range $XXX $XX.X million. year raising XXXX, non-GAAP are to a our million, a operating For of income expect the million in revenue full to million we

Thank your you, and questions. take now we will

Josh followed [Operator question by Morgan Needham Instructions] be Stanley. will from Our Scott first from from Baer Berg

question a Scott. guess or for I either Dan

Your customers maybe versus Is of on color basis. on think ability towards least more of the more certainly you that your year quarter looks million expansion? additional would Any a ARR end that guess, more it convicted what year-over-year cross-sells prior goals at double positive, the like ARR on get to cohort, or composition maybe this how balanced to your $XXX,XXX the sound to be in I we to years? do year year, guess, new I Is this customers, $X helpful. net maybe cohort? it, that

start, will feel free I Sure. Scott to add.

writing are expansions, customers I have adding would think promise trends, existing say, we're logos DAP, big our we're customers. on new expansions offerings we're a focusing with with new in. it with lot I large the and with we're similar, mainly do seeing obviously our But So existing keeps enterprises. we and the that focusing with We that and obviously, of customers,

So that's the seeing. we're result that

another Scott obviously, in, in quarters. that coming see in mentioned, we're to engine Fab, And this past is as partners few the starting

Yes, here's Scott. my comment,

that and plan working. in place, the against executing are is we We the put plan

from so, will for year play. or on heavy expansions, the California. was the So a Look been for the last with revenue acquisition. what That in And for of but in at at an me, we're saying we enterprise big state. State client are line of us we've what new win not upmarket I we the tenor did a walking be big away think

portion in sector of nice the us. that's And lot and Fed for in proud we've of to tend but and quarters Fed, last the for our had I the encouraging talk other gosh, I'm and in about sector, a of local, business, public couple the public a uptick state business, really very

expansions. -- So that get the strength most the come has have the planning most been we of logos, of will they'll new we in in been but and revenue areas

the more a we revenue point Very here Does out about retention is metric, ticked trough number metric down the the your in do QX? it XX-month good. through how quarter. know net of in here Hagit trailing Or And then Helpful. QX, X I that think year? balance

I Yes, take it. will

I And as we we're renewal quarter. rate quarters. in best So turn said, our the X had obviously, showing

start to up. think ticking So going it's yes, we

on metric, feel that that's we'll something that we As corner Hagit turned almost mentioned, the see. we and every

our and by company. previous of was, terms so quarter, size As renewal, the in this say, quarter terms QX up would almost just percentage-wise, best lowest was in of renewals, was the have the we biggest far not in but our also in and for renewal we far that you know, 'XX of said quarter I

So performance. very we're the pleased with

Baer from Our will Morgan Josh Pat from be next followed Walravens from question Stanley, by JMP.

the One is follow-up competitive there of the for you for seeing you specifically was out a a for bit little for could how then Dan Like Hagit. WalkMeX I talk WalkMe and else what about and Dan, copilots. just positioned? hoping copilot landscape, are

Yes.

it. as I didn't near So we I launching comes would it. approach product, new we're that with general our said, to obviously, the this new WalkMe LLMs. It's that a the say, combined research, a something capabilities From see is basically,

something new. So is this

be to we As product. own we're we We different didn't We're and to our in that the make we the which the employee, not work of said, coming LLM though it going how see flow unique anything even to are approach, something that's like offering contextual in from WalkMe. market. very is can the AI that a is answers

And ourselves big leading and with are with many customers AI rolled We very talk internally. it people already our that with I have. what enterprises excited are that few I we when and the customers they and with out talk

the see So is this and excited, apparently anything we're like super why we in it market. didn't

relative comments. that obviously, flow, to of And remind operating year, free seasonality the think of and cash also margin? rest cash on cash great trend flow free about for you the free margin but how the Great. generation, Can generally flow then made some Hagit, should you us income to how

for strength we from flow actually perspective, On we yes, great enjoying the a flow, and in QX outperformance operating with collection in in seasonality the free are cash the with quarter. free margin income. QX cash had also XX% So is

continue We we full generate for are in In the year, coming compared cash the same will an that not cash. I to flow margin level. expecting the we maintain see But the plan. to you tell original free quarters, to our can improvement

will come from the Pat Our question followed Berg. of next Walravens line Michael by

This that is the in product touch for maybe you I Shadow could the on, the was and Pat. and adoption those products? interest on Dan, seeing of hoping Austin you're just AI Discovery

Sure.

employees seeing some one, to And as So before, it we're mentioned more of baked offering. is it. our and more we using

So seeing stand-alone. and a part as overall, necessarily it good it's of DAP not We're progression.

happy we're rolling we don't more more obviously overall, what we're and as product that. with numbers and that we're something we're So a into more features, our pricing. But seeing, pleased module as baked this but specific very out for more line have a is is with

right, this know And for where roll us our a treasure for are. When Discovery, the out customers. opportunities we remember, is we map, and

for So It's us we been stepping great has the a been as stone. see in stepping stone uptick. a It enterprise it nice great a space.

follow-up a just Scott Great. well. And then maybe quick as for

Can You QX year? the in the that touched And on how rest what has ramped the a for us federal for versus expect business of just you give sense to maybe QX? business.

businesses, government's good Yes. bills the I us we're expecting is In federal done. line for of got we end the all because the is other QX general, was. QX of to us the big too. for We where of QX fiscal got quarter year. in the all all federal through The with news the funding -- mean, always be

come and So as through. to we're that wring for always funding we waiting our hands

now waiting that programs money the we're to been on. drop working into for So the we've

so is typically us But big And for in so QX. far money the good.

line question KeyBanc. Jackson Michael the will question of next Fargo, a by come Berg followed Wells from from Our from Ader from

that account have think have trends. I roll-ups follow-up. account when quarter. on the how call? you the do you account a for trended the a clarification on quick has customer the about on I of How normalization we mentioned Congrats large And

sure. Yes,

we'll seeing some our So force, the and as the doing account big for ARR Obviously, our grew we're year, refresh beginning sales I At obviously consolidations. mentioned, both as and cohorts our of we're mergers acquisitions database. expansions.

So reason. one that was

customers our DAP. DAP if customer application or The is not consolidation can I a being within a that piece move second being that mentioned a is there between

because we for segments, average seeing very grew list, to and the that ARR and more the we're overall, and seeing ARR So pleased both those in grow GXKs the we're customers. ARR and are more adding

sign positive So overall, us. it's a for very

that enterprise Yes, really we're for overall workflow the and lives. cohort with pleased the where business that's

it. helpful. then very Got follow-up. another Very, And

coming the market what saw the in have We you next out is I front. seemed So WalkMeX the in a from and questions guess out on that it here and of month. impressive couple demo a very differentiated today. platform earlier pretty else

feedback And pay how far? going about One, customers of from to given willing monetization it's the terms anything how can potential think value pilot for to b, even are this to in or we to the customers point deliver? so in platform the extra

Sure, sure.

feedbacks and on So are and why, script, my more This moving in one, products. they're those more focus is mentioned amazing. headcount I the to

are people it's use us, more big and telling WalkMeX, more with and So sense. to move making and look, such just employees more we not And mission easy. a it's just generative have to AI,

So the being to want They deployed. they WalkMeX functionality. it see want

very we're have push list customers for that We are happy. So to go waiting a us of and it. actually

a not consumption-based monetize monetization, model. we a few already out Regarding rolled product, features it the full of as WalkMeX, we and and

consumption. model seat-based you're, to customers going and of hey, of terms between when improved the few seeing approaches like for we and a more you. try like WalkMeX, workflows x We're amount we're In more consumption

are, making priority, generative So demand in I and making there as say, companies of WalkMeX would try AI a we're it already XX. lot a will just top we sense. June it But when out. invested in Obviously, especially launching it huge money

connecting to wants. what an That's and technology product how and Because AI. can amazing like empower all them such again, enterprise generative business every we're around people-centric company, wants a and our we is people every

you the makes and to just see demo, them. they when saw sense it So it

we're what's with So super coming. excited

initial, quarter, I super but upcoming in would the concrete initial happy. response, obviously, we're that, say, and So have from we'll more on demand data

seen the my years of from X and add lot I'm of of customers not about a out sales force. customers capabilities, I've and I've perspective, seen a that, at have certainly from early we've that to bring what us functionality, adopter the uptake the I coming And our from lot but company, my I upon would seen product talked in kind not our and early own

my because talk So the help this to that's things money to spending about conversation having secret enterprises about them over and where is sales have of now. that. moon the we around team value People get right to in money related out AI, the sauce is are

So very exciting for me and very exciting for my sales team.

Our Tyler from next line Jackson question will by the come from Citi. Radke from of Ader KeyBanc, followed

Kyle is the Maybe and This Jackson sales a one just on Diehl quick for on Ader. marketing.

quarters, think seen next you an we've here. quarters? would that focusing possibly a out And for the come some couple it Where of called or incremental absolute was on I guys for that spend? be in it improvement is headcount be profitability and there to given there that an opportunity basis growth incremental here down year-over-year the might few spend accelerate

Scott. it. is take I'm This I'll hiring.

got my room So as I've hire. from well perspective, my I'm to salespeople as plan people. presales in -- both hiring I'm

So of money. out Hagit graciously some let has that me

about So excited it. I'm

out playing of the couple in maybe last the you on Is quarters. do Okay. that for the within guys called guidance? you in the macro. some And the in Great. terms versus follow-up guys quarter? there I here there What's remainder then have factoring of there? you renewal fourth any see year driving And that best macro seen been the then a that? that of any Has overall just of improvement the quick out guys how have know

will I So start.

relates our obviously, It's take the So has credit to in with won't job, us better still just I regarding we're everything processes. it nothing macro. better but to team. and all macro, do the give that conservative renewal a to specifically rate, doing It

As transformed the I in he joined organization, and Nagdev shows really numbers. it said the Sunil year, last

or would but We and great. doing functionality If ahead the much and working seeing and teams we our just focused -- improvement so world numbers. support. service macro, into together. I'm the and our well and in better are time. putting The added of We'll uptick, went way supporting there an on we're proud can improvement, in be class -- I customers by we're this renewals quarter, see the of

So fix it. we we fixed to and what know needed

on will to that it So the give the macro. not take credit and

where Yes. had And end conversations the anticipate 'XX, half mistake we did we -- price, some on it competitive good And past, this before part I would of good and competitive add would see able and were the to the 'XX, renewed where call that, we've we pressure argue pressure of the deals. making quarter I had not not first of lost on that in We're anymore. we such service, customers than we pressure, to rather renewal we've having a that churn. did is reason those blunt with performance better a and

take them of I've happy second get opportunity XXXX. So I a expand and in client half I two got then client wins an out that right? keep to of that, and the

a win it's us. for double So

will Kevin Citi Sachs. question from followed by next from be Kumar from Our Goldman Tyler Radke

you've And WalkMeX? in ] curious it's Curious on changes quarter. from investments Citi. if future confidence [ is on if Pride the margin And level This if given expansion? margin drove the that made Matt during any -- operational expansion your sustainable you

Yes.

Obviously, example, we changes support yes, XX%. we did support drove I using But So we're shows standpoint and -- from by for WalkMeX wouldn't terms of moving as do around. our Answers Like, tickets product. in our we our or WalkMe we in big and are people it part side, using say number. that operational own of put in headcount

team, obviously, They're using more productive. engineering much they're Our faster. AI. They're writing code

and our obviously company, much, other So tools own and tools better. much we're just we're to leveraging obviously a technology be

improve renewals. can that and providing end high obviously guidance the So of of proved the the we in terms best our results while we margins hitting

right So the choosing in using and numbers. we're technology way our

can we think in can providing. go to we and overall, guidance need. that But invest Obviously, margins, yes, keep expectations we're Regarding we and sustainability those on going we when the it. the we're meet

and people and plan and To growth have drivers. do said, headcount we to Dan continue add in to a our place, in we our what in invest

headcount quarters will as We -- well. for to increase the the coming continue in our

quarter. something specifically the haven't We done within

We haven't similar through -- haven't opposite. something done we gone on the

from as And see coming indicated have the our the outperformance in enjoy some my on do guidance we That's the income operating able been We year. why script. quarters in we well. increased in operating the as for to the QX, margin benefit actually additional on

we organization. OpEx R&D you've and will seen expenses, I our that as are same very the in and focused on level less in or can investing we in more On much tell in you go-to-market, QX, our see

a shifting one little all it. alternatives, M&A gears last the more, willingness months? bit. consider X X Is Got strategic And at over to changed your

such a in our super mentioned, give obviously to We're entire $XX.X is yet, team many us Board cash our all discussing but strong considering about of stuff that million off. balance options. report with obviously, Nothing we I than Board. actively options flow obviously, cash XXXX, as our have, So with the the we're in QX, result, happy and more to think different the

from Raimo Barclays. Sachs, followed line come next Lenschow by will of Kumar the Our Goldman question of Kevin from

I question. to ask a wanted margin the follow-up to

the general, next with year maybe kind sources quarters, where that full couple R&D Dan, I And of the down kind I Is think in over resources for a a sequentially. leverage guide operating line operating of, that you next on think guess, AI? the bit the are guidance for of function comments your income shifting of the gave? more in I quarter is to

probably it focused operating are our on and shared income. well, you accelerating growth have -- on on quarter we we think operational less with much less last very as I

invest and We into also for account. as the business, taking have be growth, seasonality account areas additional are to in do of and we anticipate needs our that raised there to continue that in headcounts year, into the taken some to our with guidance indicated

example, marketing QX, for well. So several We a club. June Day We we Analyst had had very event, had Realize events. successful May. had our Resident in customer We event as in

focusing margins. on we So very efficiencies yes, continue are to and leverage the much

margin invest the to important to also again, mention we on much very focused But subscription, continuing our it's overall, are and in growth. gross best-in-class the of but

added list. then That's about that helpful. Cognizant ask to WalkMe And to wanted partners.

a about and of they're to bit you're in that talk kind the you ARR contributing of how your seeing kind how expectations? to And the traction comparison new so Scott, maybe from faring and partner can ecosystem

in expectations. with line is my It

fact, In a little better. it's

of lot partner arrow behind spend our a terms the put we in So group. wood with of

an that's changes did of 'XX not our profile. spend we area significant said, terms Hagit As make in where in

fact, grew a In bit. little we

very I'm So there. excited we're doing about what

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Our will Barclays, come Lenschow Raimo BMO. by next Bachman from Keith followed from from question

understand a end. Dan, it's how you you I domain do all of understand guys that obviously, WalkMeX can have GenAI have about everyone if kind And much Like from oh, so the questions was my think the and question combined. the already? quick benefit technology a of you but is, problems your much problem, historically, the space like nature of space Two and GenAI, world better. you solve

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number then one more questions. maybe And

On know before. you've the I if don't customer it DAP mentioned numbers,

speak XXX. had were at Can X for attritions? QX, that mean like that, we're and XXX in that's think Does we now we you at to I Hagit. maybe

I Sure. with because start it's will the shorter that answer.

account there some I was As said, consolidation.

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Our the last from Bachman question for of from the day Keith will come line BMO.

Guidon This for ] Keith is [ Bachman.

growth think convergence the ARR towards out you As progress growth, on how that year for ARR that implies over next set providing your the time, any those just and particularly the as growth subscription revenue metrics? to two your thinking year should beyond without we're your that and you ARR for and double goal what to sort exact path context, about of think about new we of about do how

Sure. Sure. question. Thank you. Great

double in said, we're to year. our as and on ARR QX, targets path for the and our hit our the on we So we're basically path we net

quarter I with as start So we're said, of the the year. and the first happy

that's the ARR that will double Obviously, a Obviously, digit. and indicator. will if be growth lagging do we

subscription that digits So year. that revenue double be will the following means

we for the growth -- revenue the XXXX, end revenue XXXX. will growth subscription going ARR whatever be of to So probably that's

accelerating of will in net obviously, and will obviously, ARR will XXXX acceleration in see we And our to our revenue in XXXX. follow new if in it But XXXX. of we obviously, growth So XXXX, increase the continue performance slowed the revenue subscription down, same XXXX, XXXX. subscription pattern are we mainly because

Adika, remarks. the I'll back to is session. and That concludes hand our yours. our floor Co-Founder CEO for it question-and-answer Dan now closing Dan,

John. Thanks, Sure.

all especially the So with everyone, thank you for WalkMeX. joining. Obviously, innovation, we're very excited with

everyone trail, there. our customers customers. we're course, a So see all hearing employees very to always, We're for like on partner. our the in XX thank And amazing work with and join want June the I of from to and Realize hard us excited to opportunities welcoming our

so you time. So thank much for your