DOMO, INC. — Call Transcript 2019

Good day, ladies and gentlemen, and welcome to the Domo First Quarter Fiscal Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Peter Lowry, Vice President, Investor Relations. Sir, you may begin. Good afternoon and welcome. I've enjoyed getting to meet most of you, and looking forward to meeting the rest of you. On the call today, we have Josh James, our Founder and CEO, Bruce Felt, our CFO, and Julie Kehoe, our Chief Communications Officer. Julie will lead off with our safe harbor statement and then on with the call. Julie? Thanks, Pete. Our press release was issued after the market closed and is posted in the investor relations section of our website, where this call is also being webcast. Statements made on this call may include forward-looking statements related to our business under federal securities law. These statements are subject to a variety of risks, uncertainties, and assumptions. For a discussion of these risks and uncertainties, please refer to documents we file with the SEC, in particular, today's press release and our most recently filed annual report on Form 10-K. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Domo's performance. Other than revenue, unless otherwise stated, we will be discussing our results of operations on a non-GAAP basis. These non-GAAP measures should be considered in addition to and not as a substitute for or an isolation from GAAP results. Please refer to the tables in our earnings press release for a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measure. And with that, let me hand it over to Josh. Thank you, Julie. Hello, everyone. It's good to be back with you again for our Q1 fiscal year 2020 earnings call. Before I jump in, I first want to congratulate the team over at Looker. Their acquisition underscores the value of helping businesses use their data, as well as the challenge and expense that even the world's largest technology vendors face in delivering just a few of the capabilities in our platform. For today's call, I will focus on three things. First, our strong business execution. Second, customers leveraging the power of our platform for our enterprise apps and additional advanced data offerings. Then third, the strength of our ecosystem and the defensible business it creates. On my first point, our strong execution has helped us sustain growth and achieve operating leverage. In Q1, we saw 28% year-over-year growth in revenue and 22% year-over-year growth in billings. At the same time, we realized a 19% year-over-year decrease in sales and marketing expense, and a 15% decrease in overall operating expenses. We continue to make clear and significant progress towards making our commitment to being cash flow positive without having to raise any additional capital a reality. We focused on the power of the platform and growing and selling into our enterprise base. Our platform message is resonating in the market. We see this in the customer conversations we are having, and it is evidenced by a pipeline that is larger than ever, with more 7-figure opportunities than we've ever seen. In the past quarter, we began piloting a new pricing model that focuses on the value of the components of the platform and is designed so that per-seat pricing doesn't hamper a customer's ability to expand Domo across their organization. This allows them to derive more value from increased adoption while paying initially for the platform and incrementally for additional service levels and usage as they realize that value, instead of just for seats. To date, this new pricing approach is showing a positive impact on the initial size and scope of deals in the pipeline and on customers' ability to more easily imagine what's possible as their data is easily brought together at scale, securely governed, and rapidly leveraged across the business. Concurrently, we're seeing customers engage in deals that are larger in scope, and we're experiencing rapid expansions and deployments. As an example, a customer we signed in Q4 expanded its rollout from 1,000 people to more than 5,500 in Q1 and is currently on its way to deploying 15,000-plus people. During the quarter, we added new lighthouse enterprise customers, including pharmaceutical giant GlaxoSmithKline, the global Japanese consumer products manufacturer Bandai Spirits, and an international oil and gas business. We now have 458 enterprise customers, a year-over-year increase of 19%. Enterprise revenue grew 33% year-over-year, an acceleration from Q4. Our corporate business also remains a bright spot. We saw strong new logo growth, a modest improvement in sales rep productivity, a 30% year-over-year increase in corporate average new deal size, and as our product becomes more and more automated, the highest mix of recurring revenue in two years. Again, on execution, I'm encouraged by the combination of solid results and a robust and growing pipeline of large deals, all while still reducing expenses, for which I am quite impressed with my team. On my second point, our customers are leveraging the power of the platform for our enterprise apps and additional advanced data offerings. Domo can do things that no other technology company can do today. Domo’s enterprise apps include a retail performance suite that helps retailers compete more effectively through better store performance and inventory management. Other enterprise apps also include suites of apps for media companies and for marketers to help drive better marketing and advertising ROI. As well as a new suite of IoT apps to help manufacturers create new value from IoT data. It’s easy for us to introduce additional apps across the business, all of which are additive to us selling the platform. I realize that everyone I know, and probably everyone you know, knows someone who has an idea for a great app, but no one knows how to get them built. They’re time-consuming, they’re expensive. The good news here is that for anyone who’s a customer of ours who has an idea for an app to improve their business, they can easily use one of our enterprise apps and customize it to their needs. One customer, for example, purchased our sales team management app to improve retention and recruiting of its sales team for more than 5,000 people in their organization. This enterprise app provides transparency regarding sales and goal performance, and also associated compensation. Other customers use our retail management app to get real-time sales and performance metrics across thousands of floor associates regarding what is happening now, not yesterday, and allows them to also compete with other branches in their organization. Enterprise apps are the future of how our customers will fully realize the value of their data and fully realize the value of a digitally transformed business. When we talk about enterprise apps, we’re talking about fully functioning, feature-rich business apps that help solve some of our customers’ most challenging business issues. They aren’t just little workflows where someone stitched together two data points and called it an app. These apps have robust enterprise-grade security with fine-grained data access controls. They have multiple distribution options, including access with any browser and being natively deployed to iOS, Android, and the mobile web. They also have an interactive and responsive UI, taking advantage of Domo’s industry-leading end-user experience, as well as sophisticated mapping capabilities, integrations with thousands of data sources, and importantly, write back capability to complete the round-trip data exchange. The excitement around our apps is palpable. At Domopalooza, our annual customer event in March, after a main stage customer session where several customers presented their apps in a session called App Attack, many of our other customers approached us who were upset that they didn’t get a chance to show off their enterprise apps that they use to run their businesses. One of those customers was NBC, whom we brought on stage the next morning to demonstrate the programming performance app that 400-500 people, everyone from executives to producers to marketers, use on their phones to interact with hundreds of millions of rows of data so they can easily understand how their programming is performing against the competition. Also during the App Attack, UPMC, a 40-hospital healthcare system, demonstrated how it is using our Digital 360 app, part of the Domo Marketing Suite, to drive better marketing ROI across the entire organization. Telus, the Canadian telecom company, shared how they are using a store performance app to get real-time data into the hands of their store managers to drive better store performance across their retail business. Now to my third point, the strength of our ecosystem is helping us build a defensible business. In combination with the power and scale of the Domo platform, our ecosystem partners allow us to offer new products, features, and integrations that serve the unique needs and environments across every area of every business. In Q1, in conjunction with our growing portfolio of technology partners such as AWS, Google, Azure, LinkedIn, Box, Coupa, Okta, and Zendesk, we announced the Domo Integration Cloud. The Domo Integration Cloud, our iPaaS solution, includes more than 1,000 pre-built connectors and our federated query capabilities to connect to and leverage data no matter where it lives, on-prem or in the cloud. To demonstrate how expansive our connector partnerships are, for example, we connect to 17 separate AWS services such as Redshift, RDS, Aurora, Athena, and S3. 19 Google services such as BigQuery, Google Analytics, AdSense, and Google Cloud Storage, many of which include write back, and which we believe are industry-leading. Integration Cloud is designed for customers who need a solution with more than 1,000 pre-built connectors to quickly and securely bring together their many disparate data sources to deliver business value. Astellas Pharma US, a $3 billion-plus revenue business, is one example of a new Integration Cloud customer. One of the most exciting ecosystem announcements in the last quarter was the Domo Business Automation Engine, part of Mr. Roboto, and a first-of-its-kind orchestration layer that works across all of an organization's data systems and people. It leverages machine learning and advanced alerting capabilities to help organizations coordinate intelligent event-based workflows and shorten the time from insights to action. In plain English, this means Domo goes beyond delivering insights to truly becoming an operating system for your company by intelligently automating key actions across multiple systems of record. Another instance that demonstrates the strength of partnerships in our ecosystem is our new data science and machine learning offerings, which we also announced in Q1, and which have been a big hit with customers as they look to rapidly deliver advanced insights into the business. Through key integrations with Amazon SageMaker as well as Jupyter, we are helping data scientists spend more time doing the work they were trained to do by eliminating much of the time-consuming, repetitive work of data preparation and transfer. A global CPG leader leveraged our data science offering to dramatically improve store forecasting, realizing millions of dollars of value after only two weeks of work. This also extends beyond the data scientists to help people who aren't technical experts leverage data science to predict outcomes. At Domopalooza, for instance, TripAdvisor's Head of People Analytics demonstrated how he is using the programming language R within the Domo platform to better understand and predict employee behavior so they can reduce employee turnover. Furthering our ecosystem footprint with Domo's IoT Cloud, we leverage relationships with AWS IoT Analytics, AWS IoT Core, AWS IoT Device Defender, Azure, Particle, Raspberry Pi, Kafka, and MongoDB, to name a few. Domo IoT Cloud features more than 30 unique IoT connectors and several new IoT apps to help customers get more value from machine-generated data. A manufacturer of robotic consumer products, SharkNinja, for example, is using our IoT capability to understand the behavior of their products once they're purchased, which is something they just couldn't do before. This capability helps them produce better products to improve their customers' experience. Building on our IoT partnerships, I'm excited to announce today the Zendesk Customer Success IoT App, a new app developed with Zendesk. It takes machine data into our platform, and then through Domo's alerting and workflow engines, when certain conditions are met, it automatically initiates a Zendesk support ticket without any human involvement. This is just one of several new apps you'll see us develop with partners that leverage the power of the Domo platform to create new value for customers. We're in the very early innings of customers adopting the platform for purposes of applying it to very specific high-value use cases, and we believe we'll see significant proliferation of applications on our platform as they become more well-known to the marketplace. One strength of our ecosystem is our growing body of users and available training. This last quarter, we announced our first official certification program, which includes five new product certifications to help people level up their data skills and demonstrate proficiency in Domo. We will continue to make investments in our vast and growing ecosystem to better support our customers and gain further leverage. You can expect more related announcements in the future. In closing, I'm proud of our team for the innovation they keep delivering that keeps us ahead of the pack, as recognized by our customers and by third parties. In the most recent Dresner Advisory Services report on self-service BI, Domo ranked number one out of 23 vendors, scoring high points for our collaboration, governance, storytelling, and integration features, which continue to grow in importance as organizations realize they need the combination of tools that only Domo provides. Additionally, in Dresner's separate flagship Wisdom of the Crowds research, Domo received a perfect recommendation score from customers for the third year in a row. In the Gartner report published in May, customers ranked their BI and analytics vendors. Domo received the number one rating of all vendors for business benefits achieved, as well as for ease of migration, which signifies how easy it is to implement the products that we roll out. I'm continually astounded and impressed how the biggest companies in the world are using our platform and our enterprise apps to transform their businesses. With that, I'll now turn it over to Bruce. Bruce? Thank you, Josh. I'll begin with our first quarter performance, followed by our second quarter and fiscal 2020 full-year guidance. We had another solid quarter, and as Josh mentioned, we're executing well against our plan. Billings grew 22% to $41.1 million. Our billings growth was supported by our dollar-based net revenue retention rate that continues to be greater than 100% and was slightly higher than last quarter. We also continue to see more customers entering into multi-year contracts, with 45% of our customers now under multi-year contracts at the end of Q1, compared to 35% at the end of Q1 last year. This drove our remaining performance obligations, or RPO, to grow 34% compared to the same quarter last year. Q1 revenue was $40.8 million, a year-over-year increase of 28%. Subscription revenue grew 29%, represented 84% of total revenue. Year-over-year subscription revenue growth was driven primarily by new customers, and we now have over 1,800 customers. International revenue represented 26% of total revenue, up from 23% in Q4. Our subscription gross margin was 77%, up 270 basis points from 74.3% in Q4, and up over seven full percentage points from 69.8% in Q1 of last year. We plan to get additional leverage out of our subscription cost of revenue as we continue to effectively manage our data center operations to finding efficiencies and better utilizing certain services. Including our services business, our total gross margin was 69.1%, a 60-basis-point improvement compared to 68.5% in the fourth quarter of last year, and a 520-basis-point improvement compared to 63.9% gross margin in the first quarter of last year. In addition to our revenue growth and improving gross margin, I was pleased that we were able to deliver these results once again with a further decrease in operating expenses. In Q1, we were able to decrease operating expenses by 15% from last year, even though revenue increased by 28% year over year. The decreases came from lower marketing and personnel costs. The net effect of increased revenue while effectively managing costs allowed us to improve our operating margin by 73 full percentage points from the same quarter last year. Our net loss was $29.2 million, and our net loss per share was $1.08. This is based on 27 million weighted average shares outstanding, Basic and diluted. Turning now to our balance sheet. As of April 30th, we had cash equivalents, and short-term investments of $154 million, more than adequate amount to get us to cash flow positive. Our adjusted cash used in operations was $22.2 million, an improvement of $5.5 million over the prior quarter, and a 40% reduction compared to Q1 of the prior year. Adjusted cash used in operations excludes the effect of $4.5 million of proceeds from shares purchased in Q1 under our employee stock purchase plan, which had no effect on our cash balance, but is presented as a gross up in two different sections of the cash flow statement. Now to discuss what we expect in Q2. We expect Q2 billings of about $42 million. We expect our Q2 operating expenses to decline as expenses related to new sales hires are more than offset by the Q1 cost of our annual user conference. For the year, we expect our operating expenses to be down slightly from fiscal 2019. We expect to continue to execute on our plan to decrease cash burn sequentially each quarter of fiscal year 2020, and expect Q2 adjusted cash used in operations of about $20.5 million and $74.5 million for the year. Now to our formal guidance. For the second quarter of 2020, we expect GAAP revenue to be in the range of $41 million-$42 million. We expect non-GAAP net loss per share, basic and diluted of $0.98-$1.02. This assumes 27.5 million weighted average shares outstanding, basic and diluted. For the full year of fiscal 2020, we expect GAAP revenue to be in the range of $173 million-$174 million, representing year-over-year growth of approximately 22%. We expect non-GAAP net loss per share, basic and diluted of $3.79-$3.87. This assumes 27.6 million weighted average shares outstanding, basic and diluted. In closing, I'd like to reiterate, we're pleased with the progress we made in Q1 in executing against our fiscal year 2020 objectives as we balance improvements in our cash profile and our expense profile with investments in growth opportunities. With that, we'll open up the call for questions. Operator? Thank you. Ladies and gentlemen, if you have a question at this time, please press the star then the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Again, that's star then one to ask a question. To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question comes from Sanjit Singh with Morgan Stanley. Your line is now open. Hi, this is Joshua Baer for Sanjit. Congrats on 73% op margin improvement year-over-year. Thank you. Over the last three quarters, we've seen a bit more upside, I think, than more inline top line this quarter. I'm just wondering, have you seen any changes this quarter in the competitive environment or customer purchasing behavior or demand or anything else? Hi, it's Bruce. No. Most of the data points that we see, with engagement with our customer base, further reinforce the fact that this is extremely differentiated product compared to anything out there, primarily because it's a complete platform designed for business users to get access to the data they need. In addition to that, we're finding that the customers are embracing the fact that they can build upon the platform and use different components of the platform in ways that really enhance the operations of their business. I think that we are in a extremely good competitive position. Just to your point on overperformance, our Q1s just tend to be the seasonally low quarter, and we did not see the outperformance that we've seen in the past, all the operations, all the metrics still point in the right direction. Again, we're mostly excited about the fact that the customer engagement that we find with our product and platform, particularly as evidenced at our large user conference, that we're seeing such positive kind of embracing of it and such robust use cases that we're pretty optimistic about how this is going to play out through the future quarters. Yeah. The only thing I'd add to that is, it's true, Q1 is typically seasonally low. A lot of the big deals that come through are going to come through in Q4. As we looked at things, we didn't have any of the big deals come through in Q1. Like we mentioned in the script, we have more seven-figure deals in our pipeline than we've ever had by a meaningful amount. It just feels like there's a lot of really interesting conversations that we're having with brand new customers, with customers that signed within the last year, and then also with customers that have been with us for three years. We're having very big strategic conversations with them, where they recognize the value of all the things that we're doing. Maybe not just some components. Or just one piece like Looker does, for instance, but really leveraging all of the things that we do and having big strategic conversations with us. Hopefully we'll see some of that outperformance like we did in previous quarters. We knew Q1 is always tight just because we have a big clean-out in Q4. Excellent. Are you still looking to increase sales capacity by 30% this year? Are you seeing the productivity improvements to justify that? Then with that in mind, can you just comment on the potential to accelerate new ACV in FY 2020? Thanks. Yeah. I'll answer initially. Yeah, definitely still pushing forward and on track in terms of hiring the reps and getting the reps in place. Still really encouraged by the underlying metrics like productivity, pipeline coverage in the different regions. Also, like we mentioned, not only in the outer regions but also just incorporate here, retention rates are starting to look similar to enterprise retention rates. Productivity is looking really positive, which is why about a quarter ago, we said we need to start hiring more reps in all the regions. We're very encouraged by that, now it's a matter of getting that capacity in place. Then, before I turn to Bruce to answer this question as well, the other thing that I was really encouraged by in Q1, even though we didn't outperform on some of the billings metrics, we certainly did on the cash flow metric. That's something that's just as important to us right now, is really getting this by sometime, I guess I can't give any kind of timeline, but sometime in the near future, getting us to where we're close to break even and then growing as rapidly as we can from that point forward. I'll just add, we did make the comment last quarter that we believe for this fiscal year, we should see new ACV accelerate, and we are on track to deliver on that expectation that we put out there last quarter. Great. Thank you. Thank you. Our next question comes from Brad Zelnick with Credit Suisse. Your line is now open. This is Saeed on for Brad. Congrats on a strong quarter. I just had a very quick question. I wanted to see what is driving the increase in corporate deal sizes. Is it more driven by bigger initial deployments, or is this just a sign of more traction that you're getting up market? Yeah, I think we have very strategic relationships with these customers. Even if it's a $100 million business, $500 million business, billion-dollar business in that corporate area, like I've said many times before, to me, half that business feels like enterprise business. The contracts that we're seeing, the new pricing that we talked about, their ability to go in, and they've always been a leader in going in and trying to sell the value of the platform. Really switching hard to that definitely helps. They're also taking cues from some other successes we've had where they'll go, and they'll sell, in addition to selling the platform and selling minimums and getting longer contracts, also selling some multi-year services to go along with that, to help them get the most out of the product and the platform. Okay. Also, as a follow-up, it seems as if services growth rate is now decelerating. Can you actually give us a little bit of idea if we should expect that to continue, and why that deceleration is not actually going to be a leading indicator for subscription? Yeah. I didn't hear the first part of it. We put out what we think we will do this year. Underlying it is accelerating ACV, and you don't necessarily see that right away in billings or revenue. There's no underlying, I guess, factor that would cause us not to be able to deliver again on accelerating ACV. The biggest piece that we indicated to everybody to show that or to demonstrate that we believe it's going to accelerate, is the commitment to hiring the reps and adding the heads because we're seeing the productivity that we want. You can't just turn it on overnight. You got to get the reps, you got to get them ramped up, and then they got to close the ACV, and then you got to wait for that ACV to hit your GAAP accounting revenue, and billings in some cases, depending if it's annual or not. Yeah, we're definitely optimistic about the future. Thanks. That makes a lot of sense. Thank you. Thank you. Thank you. Our next question comes from Jennifer Lowe with UBS. Your line is now open. Great. Thank you. I wanted to just talk about how we should think about the big deals going forward. Can you just give us a little color on how the sales cycles for those types of deals look relative to some of the smaller deals you've done traditionally? Maybe specifically for Bruce Felt, how do you sort of forecast close rates and linearity around those? Is there sort of an extra degree of conservatism there? How do you think about forecasting when some of these big deals could maybe swing things around a bit? Thanks. Yeah. The big deals, in most cases, are places where we've had a relationship. They had some positive experiences with us, and now they want to roll it out across their organization. In addition to buying more capacity, whether it's data capacity or a seat capacity in the old pricing model, or adding additional applications, it's usually a combination of the two. It's been really fun to sit down with CIOs. As we mentioned, we started really going out and talking to more CIOs because the users of Tableau and Qlik and Looker, that's not our target audience in terms of whom we sell to, but they can be blockers. We've tried to make a concerted effort to make sure we get out there and talk to the CIO or the CIO's lieutenants. As we've had those conversations, it's been really fun because like I mentioned in my comments, everybody really does know someone that has a great idea for an app. It seems like I get two or three text messages a week from somebody that has a great idea for an app. They're hard to get made. All these same people are having great ideas for apps in their business, but no one has a clue how to do anything with it. When you get in there and talk to the CIOs, there's been multiple times where you start showing them the power of the platform, the apps that can be built on top of that, configure all these enterprise apps that we have, and they start telling you about three projects, four projects, five projects that they have. They had no idea how to sort through those projects without them being just custom development initiatives. Now they're like, "Oh, we can do all that with Domo." It really is a differentiated solution that we have. These big customers, it's just looking at what we've done with smaller and doubling it or 10X-ing it. As we get into the bigger and bigger enterprise customers, we're seeing people that we're talking to, and they're like, "We're thinking about putting 50,000 employees on this, or 75,000 employees on this." Those are the kind of deals that we're looking at in the pipeline. In terms of forecastability, one element of the business that we really like is the fact that the corporate business, and again, that focuses on company sizes less than $1 billion in revenue, is doing very well. Productivity remains extremely high on a per rep basis. Deal sizes are high, and they are growing. That's a foundation, actually, and that has very good visibility from the fact that very fast sales cycles. We like that as kind of maybe a floor of growth that we have in the business. When it comes to the enterprise business, and again, part of what we see in Q1 and the reason why it's seasonally low is the enterprise business tends to be a back end of the year business generally. On top of that's a big focus of our sales hiring. On top of that, the deal sizes are getting very large or larger than we've seen ever in the history of the company, which adds complexity to it. On top of that, we're talking significantly to the CIO now compared to before. That adds complexity in general, but we do watch these deals extremely carefully and get updates constantly on the progress, and that does give us the ability to forecast. We finally have enough volume where you can never predict every single deal, how it's going to play out, but you can, as a whole, get a good feel for where you believe we will land in terms of new business. The raw volume and the fact that we have the highest pipeline ever in the company is extremely conducive to giving us confidence to forecast what we think will happen in Q2 and optimism for what we think we will see in Q3 and Q4. Okay, great. Maybe just one more for you, Bruce. I think in your prepared remarks, as you were talking about the growth in subscription revenue, I think you made a comment along the lines of the big lever on growth there was new business. You also mentioned over 100% net retention. There's sort of a gray space in there of that's upsell. I guess the question I had was, putting it in context, when you talked about new business as being the driver of this subscription revenue growth, what are you seeing on the upsell side? Was it a little bit less, or are you lumping that into that new business categorization? Well, the new business from new customers was the highest growth component between that and selling into the installed base. We just had a lot of that in Q4, and I think that just did have some impact on Q1. A lot of the larger deals that are in the pipeline are upsell deals because they're much more strategic transactions with very large current customers. That could easily change and will most likely change toward the back end of the year as those relationships come to closure and we complete the transactions with them. Okay, great. Thank you. Thank you. Our next question comes from Derrick Wood with Cowen and Company. Your line is now open. Great. Thanks. Josh, I wanted to dive into the pricing changes a little bit more. I had a couple questions on that. First, can you give us a sense for how you're rolling it out? Is it with new customers? Is it with renewals? Then what's the idea in terms of how it helps the cadence of your deal flow? Do you think it'll help create less friction at the front end of the funnel, or do you think it helps kind of bigger initial engagements out of the gate? Just curious what you think there. Yeah. It definitely changes the conversation in a few different ways. I think with the renewals, it certainly helps because you don't want to have a customer ask you, "Do you get the same value and the same functionality if we drop our seats in half?" That's a bad conversation to have. We don't want to have that conversation with customers. We had one or two of them, and those conversations freak you out. We recovered from all those and said we've got to roll out this new pricing approach. That was a few quarters ago when we got that indicator. As we started looking at it, also our sales managers were out there saying, "Hey, this is an opportunity for us to build more value in that initial contract. It sets us up to get even more sales." Like I said in my prepared remarks, instead of putting this gating item in front of the customer that says, "You're not going to really find value until you get more users on here, we're going to put a big gating item and prevent you from rapidly expanding your users." Then another byproduct of the old pricing model was they would look at what we charged them for the first couple hundred users and say, "We've got 10,000 employees," and think to themselves, "This is not going to foot." That wasn't a way that we wanted them to think about it as well. Charging them based on the platform, having data charges associated with it, that sit on top of it, being able to charge for data science, seems to resonate with them much better. Because IT is generally involved with this, as the contracts increase, they're used to paying for data. They don't have a problem paying for data. The seat charge is definitely difficult, especially with some of these bigger customers. That's been helpful. It's also helpful in constructing these new relationships. Instead of them trying to figure out exactly how many people they're going to have on it to figure out what price they should pay, they want it for a use case, and they've already assigned value to that use case. Introducing seats in many cases was confusing the conversation. It seems to be better all around. We have our reps out there talking about it, using this pricing model in front of all of our new deals. We've also got a strategy for renewals to bring the renewals back into this contract by offering them incentives, by setting up the contract in the right way to go forward. It also really helps us in the enterprises expand to multimillion-dollar deals much earlier than we would have otherwise. Instead of hoping and praying that more departments are going to come on, as soon as they're finding that value, they have a lot of ideas for more things that they want to do, but not necessarily going out and recruiting all the users. Now all they have to do is see the value initially, have the ideas for the future, and then be willing to pay for that, implement it, knowing the users are going to be able to have access to it. Makes sense. That's great. My second question is just around the Google Looker acquisition. It'd be nice to get your thoughts on how you guys fit in the market with Looker and what you think this means for the space, and maybe kind of remind us on your AWS partnership and what you've been doing to strengthen that. Yeah. I think this is a case where one of the things that's challenging is getting data into places like BigQuery or AWS or Microsoft's Azure Cloud, and Looker provides one of those functions. We actually don't see them a ton. They're down the list on competitors that we see frequently. Of the competitors that we normally talk about, they provide the smallest amount of the stack. It's a good technology, and IT people really like it, and it's an admirable technology. Some of the things that they did and put together are things that we've talked about doing as well. It is further down that stack in terms of just connecting data, being able to visualize that data. I'm sure for Google, it's going to be a great thing for them. They've already said in their acquisition notes, the CEO of Looker came out and said, "Hey, we're still going to be partnered with all the other vendors out there, and Google is still going to be open to every other vendor. This, by in no way, changes any of the dynamics or approaches that we've taken there." Which I think it's important to make that statement for them. It also is indicative of the fact that no vendor controls data anymore. The data is owned by the customer. Customers figured that out about 10 years ago. Any vendor that says anything otherwise, you really raise the ire of your customers. From that perspective, Google's a great partner of ours. We do connect over 1,000 different enterprise applications and databases, with pre-built connectors, thousands upon thousands with some of the generic connectors that we have. Google, I think we have over 19 pre-built connectors that we use. We integrate with Snowflake. We integrate with AWS in a lot of different ways. It's been fun working with AWS because they bring us deals, and they say, "Hey, here's something. We provide this. We need some people to help us create this solution," like we described with the IoT solution. These solutions that we're creating are exciting to us because we're not out there looking for something to do. Our customers are coming to us, our partners are coming to us and saying, "Can you help us with the final mile here and the last leg?" It's been fun to deliver those to the market and see the value that then goes straight to the customer. I think all in all, it's a good thing. It certainly raises more awareness in the market. We've had a lot of customers ask us. There's very few companies that only pick one cloud. Most of them pick multiple clouds. We happen to really be the only agnostic cloud data provider that's out there with any of the kind of functionality that we have. I think that's going to bode well for us as well, is you look at all the other major technology companies that aren't aligned with one of the big three cloud providers. Then when you look at most companies, they use multiple cloud providers. I think from that sense, it's taking a competitor in a way, certainly from one perspective. Great. Thanks for the color. You bet. Thank you. Our next question comes from Pat Walravens with JMP Securities. Your line is now open. Oh, great. Thank you. Hi, guys. My question would be, giving all the moving parts here and how dynamic this space is, for each of you, Josh, what's the number one thing you're focused on right now in terms of what you're personally trying to accomplish? Bruce, for you, what's your number one focus? Yeah. For me, my number one focus right now is the one that we stated at the time of IPO, and that's going to continue to be our number one focus for probably another 12 months, which is just trying to find the most efficient way possible to identify new customers and close those new customers, acquiring new customers. Once we get our nose in the tent, we do a heck of a job retaining that customer, selling them additional product and services. Actually, once we even get in where we have a real opportunity on the line, we have great close rates. We just need to continue to find customers more efficiently, which is why things like the Looker acquisition just continue to help us, because it raises more eyes that are saying, "Hey, what am I supposed to do in this space? What's my strategic move here?" You're seeing companies like Google start to put together more of the stack that we built. We'll find at the end of all this whether or not we should have built the whole thing or not, but we did. It really resonates with the forward-thinking customers that we have, and that gives us a lot of confidence that over time, that'll end up being the right thing because these are the forward-thinking customers that are looking at our whole stack and realizing how they can change the way they run their business. I'd say secondarily, the other thing that we had a lot of effort that we're focusing in right now is our ecosystem and our partners. We've got a lot of technology partners. We don't have as many go-to-market partners, we just hired a new VP, Rob Davy, who's gonna help us out. He was at Microsoft for 12 years and was in their enterprise space and partner businesses. He's gonna come and run partners for us, working for Jay Heglar. We also actually just got John Mellor, who was over at Adobe, and he's gonna be our VP of Strategy, or our Chief Strategy Officer, I should say, and Jay's gonna move to Chief Business Officer, which is where he was spending all of his time anyway. That's gonna help us a lot with that go-to-market with the CAC, with efficiently finding customers, messaging to those customers. We feel like we've made two really good hires on those fronts. The last piece is retention. The numbers start getting bigger in terms of the recurring revenue, as efficient as you can get there, that's a positive thing, we're getting to the time in our company's life cycle where we can focus in on that. We just hired a lady named Pam Marion, who's had a lot of experience at SAP and other companies managing renewal streams. We're excited for that as well. We've got three new people helping us in the three areas that we think are the most important right now. Yeah, for me, it's support all the growth initiatives, including hiring new reps, building new apps, supporting new customers. Closing deals. Bruce closes a lot of deals. Thank you. He visits a lot of CFOs, it's a pretty interesting demo when he says, "Here's how I run my public company," the CFO's mouth usually drops. That's been probably Bruce's big focus. On that point, I've yet to hear anybody say, "I need it." They've always said, "I need it. Yeah. It's to support all that within the same cost envelope. We want to do all these things, but we can't spend any more money. Me and my team spend a lot of time working on, well, how do you fund it, because the total cannot go up. This automatically drives down CAC. In a recurring revenue model where you're just building layers and layers of new business that's highly profitable, it just drives you to be cash flow positive naturally without doing anything unnatural. That's just a lot of my effort, and I have the whole company kind of working with me, so it's not an impossible task by any means. In fact, we've shown it in the numbers. We are able to keep growing the business, and we're able to do it with even fewer costs than what we have done in the past. All right. That's super helpful. Thank you, guys. Thank you. As a reminder, ladies and gentlemen, that's star then one to ask a question. Our next question comes from Jack Andrews with Needham & Company. Your line is now open. Good afternoon. Thanks for taking my question. I was wondering if you could shed some light on the pricing scheme of your verticalized applications like Marketing Suite and IoT Cloud, and maybe how these compare to your core platform. Yeah. There's an incremental fee associated with configuring those enterprise apps. We've built hundreds and hundreds of apps for our customers. We have thousands of apps being used by our customers, some of which they've built themselves. We're able to go off the shelf and pull these different building blocks and put them together for our customers. There's a fee associated with that, and then there's an ongoing ACV component. You might have an app like Digital 360, it might be $200,000 to set it up and $200,000 a year, depending on how many users they have. By the time we've gotten to that point, they've identified which users they want, and so that's one way that we can charge. Generally, whatever it is that we're selling, there's an annual fee associated with that app. There's some apps that are small, that don't have tons of technology behind them, that we might only charge $25,000-$50,000 a year for. Then there's others that we'll charge $250,000, $400,000, $500,000 a year for. Great. Thanks. Then just sort of moving forward is, thinking about the apps you've introduced so far. Is it fair to think that you may become perhaps more verticalized over time around this initiative? I think, specialized, whether it's verticalized or for a particular function in your organization, we have certainly a very well-known brand that's in the news all the time, and they're a customer of ours, and they, in the pipeline right now, have a travel and expense application that they're looking to meet, and it's a good-sized contract. Sometimes it's verticalized, sometimes it's a function. Like I mentioned, there's that app that was shown at Domopalooza around HR and retaining your employees. I think really over any function in your company, and that's why I say our customers look at us and they say, "Hey, we've got all these employees, and we're trying to figure out how to give them real-time commissions on what they're selling because they sell so many things, and we're losing employees because our reps can't actually make sense of the commission spreadsheets that we send to them. Can we give them an app that helps them see it in real time, and it feels kind of next generation, and it feels like we're being transparent and open with them because they get it in real time? We're able to, again, pull those building blocks off the shelf, put a skin on it that looks like their brand, and they get a really cool custom software application that we just pulled off the shelf that looks custom to all of their employees. Yeah, I think we'll see more verticalization and more specialization for sure. Great. Thanks for the color. You bet. Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a wonderful day.

Speaker 8: Good day, ladies and gentlemen, and welcome to the Domo First Quarter Fiscal Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Peter Lowry, Vice President, Investor Relations. Sir, you may begin. Good day, ladies and gentlemen, and welcome to the Domo First Quarter Fiscal Year 2020 Earnings Conference Call. good day ladies and gentlemen and welcome to the domo first quarter fiscal year 2020 earnings conference call At this time, all participants are in a listen-only mode. at this time all participants are in a listen-only mode Later, we will conduct a question and answer session, and instructions will follow at that time. later we will conduct a question and answer session and instructions will follow at that time If anyone should require assistance during the conference, please press star then zero on your touch-tone telephone. if anyone should require assistance during the conference please press star then zero on your touch-tone telephone As a reminder, this conference call is being recorded. as a reminder this conference call is being recorded I would now like to introduce your host for today's conference, Mr. Peter Lowry, Vice President, Investor Relations. i would now like to introduce your host for today's conference mr peter lowry vice president investor relations Sir, you may begin. sir you may begin

Speaker 10: Good afternoon and welcome. I've enjoyed getting to meet most of you, and looking forward to meeting the rest of you. On the call today, we have Josh James, our Founder and CEO, Bruce Felt, our CFO, and Julie Kehoe, our Chief Communications Officer. Julie will lead off with our safe harbor statement and then on with the call. Julie? Good afternoon and welcome. good afternoon and welcome I've enjoyed getting to meet most of you, and looking forward to meeting the rest of you. i've enjoyed getting to meet most of you and looking forward to meeting the rest of you On the call today, we have Josh James, our Founder and CEO, Bruce Felt, our CFO, and Julie Kehoe, our Chief Communications Officer. on the call today we have josh james our founder and ceo bruce felt our cfo and julie kehoe our chief communications officer Julie will lead off with our safe harbor statement and then on with the call. julie will lead off with our safe harbor statement and then on with the call Julie? julie

Speaker 7: Thanks, Pete. Our press release was issued after the market closed and is posted in the investor relations section of our website, where this call is also being webcast. Statements made on this call may include forward-looking statements related to our business under federal securities law. These statements are subject to a variety of risks, uncertainties, and assumptions. For a discussion of these risks and uncertainties, please refer to documents we file with the SEC, in particular, today's press release and our most recently filed annual report on Form 10-K. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Domo's performance. Thanks, Pete. thanks pete Our press release was issued after the market closed and is posted in the investor relations section of our website, where this call is also being webcast. our press release was issued after the market closed and is posted in the investor relations section of our website where this call is also being webcast Statements made on this call may include forward-looking statements related to our business under federal securities law. statements made on this call may include forward-looking statements related to our business under federal securities law These statements are subject to a variety of risks, uncertainties, and assumptions. these statements are subject to a variety of risks uncertainties and assumptions For a discussion of these risks and uncertainties, please refer to documents we file with the SEC, in particular, today's press release and our most recently filed annual report on Form 10-K. for a discussion of these risks and uncertainties please refer to documents we file with the sec in particular today's press release and our most recently filed annual report on form 10-k These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. these documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Domo's performance. in addition during today's call we will discuss non-gaap financial measures which we believe are useful as supplemental measures of domo's performance Other than revenue, unless otherwise stated, we will be discussing our results of operations on a non-GAAP basis. These non-GAAP measures should be considered in addition to and not as a substitute for or an isolation from GAAP results. Please refer to the tables in our earnings press release for a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measure. And with that, let me hand it over to Josh. Other than revenue, unless otherwise stated, we will be discussing our results of operations on a non-GAAP basis. other than revenue unless otherwise stated we will be discussing our results of operations on a non-gaap basis These non-GAAP measures should be considered in addition to and not as a substitute for or an isolation from GAAP results. these non-gaap measures should be considered in addition to and not as a substitute for or an isolation from gaap results Please refer to the tables in our earnings press release for a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measure. please refer to the tables in our earnings press release for a reconciliation of our non-gaap financial measures to their most directly comparable gaap measure And with that, let me hand it over to Josh. and with that let me hand it over to josh

Speaker 5: Thank you, Julie. Hello, everyone. It's good to be back with you again for our Q1 fiscal year 2020 earnings call. Before I jump in, I first want to congratulate the team over at Looker. Their acquisition underscores the value of helping businesses use their data, as well as the challenge and expense that even the world's largest technology vendors face in delivering just a few of the capabilities in our platform. For today's call, I will focus on three things. First, our strong business execution. Second, customers leveraging the power of our platform for our enterprise apps and additional advanced data offerings. Then third, the strength of our ecosystem and the defensible business it creates. On my first point, our strong execution has helped us sustain growth and achieve operating leverage. In Q1, we saw 28% year-over-year growth in revenue and 22% year-over-year growth in billings. Thank you, Julie. thank you julie Hello, everyone. hello everyone It's good to be back with you again for our Q1 fiscal year 2020 earnings call. it's good to be back with you again for our q1 fiscal year 2020 earnings call Before I jump in, I first want to congratulate the team over at Looker. before i jump in i first want to congratulate the team over at looker Their acquisition underscores the value of helping businesses use their data, as well as the challenge and expense that even the world's largest technology vendors face in delivering just a few of the capabilities in our platform. their acquisition underscores the value of helping businesses use their data as well as the challenge and expense that even the world's largest technology vendors face in delivering just a few of the capabilities in our platform For today's call, I will focus on three things. for today's call i will focus on three things First, our strong business execution. first our strong business execution Second, customers leveraging the power of our platform for our enterprise apps and additional advanced data offerings. second customers leveraging the power of our platform for our enterprise apps and additional advanced data offerings Then third, the strength of our ecosystem and the defensible business it creates. then third the strength of our ecosystem and the defensible business it creates On my first point, our strong execution has helped us sustain growth and achieve operating leverage. on my first point our strong execution has helped us sustain growth and achieve operating leverage In Q1, we saw 28% year-over-year growth in revenue and 22% year-over-year growth in billings. in q1 we saw 28% year-over-year growth in revenue and 22% year-over-year growth in billings At the same time, we realized a 19% year-over-year decrease in sales and marketing expense, and a 15% decrease in overall operating expenses. We continue to make clear and significant progress towards making our commitment to being cash flow positive without having to raise any additional capital a reality. We focused on the power of the platform and growing and selling into our enterprise base. Our platform message is resonating in the market. We see this in the customer conversations we are having, and it is evidenced by a pipeline that is larger than ever, with more 7-figure opportunities than we've ever seen. In the past quarter, we began piloting a new pricing model that focuses on the value of the components of the platform and is designed so that per-seat pricing doesn't hamper a customer's ability to expand Domo across their organization. At the same time, we realized a 19% year-over-year decrease in sales and marketing expense, and a 15% decrease in overall operating expenses. at the same time we realized a 19% year-over-year decrease in sales and marketing expense and a 15% decrease in overall operating expenses We continue to make clear and significant progress towards making our commitment to being cash flow positive without having to raise any additional capital a reality. we continue to make clear and significant progress towards making our commitment to being cash flow positive without having to raise any additional capital a reality We focused on the power of the platform and growing and selling into our enterprise base. we focused on the power of the platform and growing and selling into our enterprise base Our platform message is resonating in the market. our platform message is resonating in the market We see this in the customer conversations we are having, and it is evidenced by a pipeline that is larger than ever, with more 7-figure opportunities than we've ever seen. we see this in the customer conversations we are having and it is evidenced by a pipeline that is larger than ever with more 7-figure opportunities than we've ever seen In the past quarter, we began piloting a new pricing model that focuses on the value of the components of the platform and is designed so that per-seat pricing doesn't hamper a customer's ability to expand Domo across their organization. in the past quarter we began piloting a new pricing model that focuses on the value of the components of the platform and is designed so that per-seat pricing doesn't hamper a customer's ability to expand domo across their organization This allows them to derive more value from increased adoption while paying initially for the platform and incrementally for additional service levels and usage as they realize that value, instead of just for seats. To date, this new pricing approach is showing a positive impact on the initial size and scope of deals in the pipeline and on customers' ability to more easily imagine what's possible as their data is easily brought together at scale, securely governed, and rapidly leveraged across the business. Concurrently, we're seeing customers engage in deals that are larger in scope, and we're experiencing rapid expansions and deployments. As an example, a customer we signed in Q4 expanded its rollout from 1,000 people to more than 5,500 in Q1 and is currently on its way to deploying 15,000-plus people. This allows them to derive more value from increased adoption while paying initially for the platform and incrementally for additional service levels and usage as they realize that value, instead of just for seats. this allows them to derive more value from increased adoption while paying initially for the platform and incrementally for additional service levels and usage as they realize that value instead of just for seats To date, this new pricing approach is showing a positive impact on the initial size and scope of deals in the pipeline and on customers' ability to more easily imagine what's possible as their data is easily brought together at scale, securely governed, and rapidly leveraged across the business. to date this new pricing approach is showing a positive impact on the initial size and scope of deals in the pipeline and on customers' ability to more easily imagine what's possible as their data is easily brought together at scale securely governed and rapidly leveraged across the business Concurrently, we're seeing customers engage in deals that are larger in scope, and we're experiencing rapid expansions and deployments. concurrently we're seeing customers engage in deals that are larger in scope and we're experiencing rapid expansions and deployments As an example, a customer we signed in Q4 expanded its rollout from 1,000 people to more than 5,500 in Q1 and is currently on its way to deploying 15,000-plus people. as an example a customer we signed in q4 expanded its rollout from 1,000 people to more than 5,500 in q1 and is currently on its way to deploying 15,000-plus people During the quarter, we added new lighthouse enterprise customers, including pharmaceutical giant GlaxoSmithKline, the global Japanese consumer products manufacturer Bandai Spirits, and an international oil and gas business. We now have 458 enterprise customers, a year-over-year increase of 19%. Enterprise revenue grew 33% year-over-year, an acceleration from Q4. Our corporate business also remains a bright spot. We saw strong new logo growth, a modest improvement in sales rep productivity, a 30% year-over-year increase in corporate average new deal size, and as our product becomes more and more automated, the highest mix of recurring revenue in two years. Again, on execution, I'm encouraged by the combination of solid results and a robust and growing pipeline of large deals, all while still reducing expenses, for which I am quite impressed with my team. During the quarter, we added new lighthouse enterprise customers, including pharmaceutical giant GlaxoSmithKline, the global Japanese consumer products manufacturer Bandai Spirits, and an international oil and gas business. during the quarter we added new lighthouse enterprise customers including pharmaceutical giant glaxosmithkline the global japanese consumer products manufacturer bandai spirits and an international oil and gas business We now have 458 enterprise customers, a year-over-year increase of 19%. we now have 458 enterprise customers a year-over-year increase of 19% Enterprise revenue grew 33% year-over-year, an acceleration from Q4. enterprise revenue grew 33% year-over-year an acceleration from q4 Our corporate business also remains a bright spot. our corporate business also remains a bright spot We saw strong new logo growth, a modest improvement in sales rep productivity, a 30% year-over-year increase in corporate average new deal size, and as our product becomes more and more automated, the highest mix of recurring revenue in two years. we saw strong new logo growth a modest improvement in sales rep productivity a 30% year-over-year increase in corporate average new deal size and as our product becomes more and more automated the highest mix of recurring revenue in two years Again, on execution, I'm encouraged by the combination of solid results and a robust and growing pipeline of large deals, all while still reducing expenses, for which I am quite impressed with my team. again on execution i'm encouraged by the combination of solid results and a robust and growing pipeline of large deals all while still reducing expenses for which i am quite impressed with my team On my second point, our customers are leveraging the power of the platform for our enterprise apps and additional advanced data offerings. Domo can do things that no other technology company can do today. Domo’s enterprise apps include a retail performance suite that helps retailers compete more effectively through better store performance and inventory management. Other enterprise apps also include suites of apps for media companies and for marketers to help drive better marketing and advertising ROI. As well as a new suite of IoT apps to help manufacturers create new value from IoT data. It’s easy for us to introduce additional apps across the business, all of which are additive to us selling the platform. I realize that everyone I know, and probably everyone you know, knows someone who has an idea for a great app, but no one knows how to get them built. They’re time-consuming, they’re expensive. On my second point, our customers are leveraging the power of the platform for our enterprise apps and additional advanced data offerings. on my second point our customers are leveraging the power of the platform for our enterprise apps and additional advanced data offerings Domo can do things that no other technology company can do today. domo can do things that no other technology company can do today Domo’s enterprise apps include a retail performance suite that helps retailers compete more effectively through better store performance and inventory management. domo’s enterprise apps include a retail performance suite that helps retailers compete more effectively through better store performance and inventory management Other enterprise apps also include suites of apps for media companies and for marketers to help drive better marketing and advertising ROI. As well as a new suite of IoT apps to help manufacturers create new value from IoT data. other enterprise apps also include suites of apps for media companies and for marketers to help drive better marketing and advertising roi. as well as a new suite of iot apps to help manufacturers create new value from iot data It’s easy for us to introduce additional apps across the business, all of which are additive to us selling the platform. it’s easy for us to introduce additional apps across the business all of which are additive to us selling the platform I realize that everyone I know, and probably everyone you know, knows someone who has an idea for a great app, but no one knows how to get them built. i realize that everyone i know and probably everyone you know knows someone who has an idea for a great app but no one knows how to get them built They’re time-consuming, they’re expensive. they’re time-consuming they’re expensive The good news here is that for anyone who’s a customer of ours who has an idea for an app to improve their business, they can easily use one of our enterprise apps and customize it to their needs. One customer, for example, purchased our sales team management app to improve retention and recruiting of its sales team for more than 5,000 people in their organization. This enterprise app provides transparency regarding sales and goal performance, and also associated compensation. Other customers use our retail management app to get real-time sales and performance metrics across thousands of floor associates regarding what is happening now, not yesterday, and allows them to also compete with other branches in their organization. Enterprise apps are the future of how our customers will fully realize the value of their data and fully realize the value of a digitally transformed business. The good news here is that for anyone who’s a customer of ours who has an idea for an app to improve their business, they can easily use one of our enterprise apps and customize it to their needs. the good news here is that for anyone who’s a customer of ours who has an idea for an app to improve their business they can easily use one of our enterprise apps and customize it to their needs One customer, for example, purchased our sales team management app to improve retention and recruiting of its sales team for more than 5,000 people in their organization. one customer for example purchased our sales team management app to improve retention and recruiting of its sales team for more than 5,000 people in their organization This enterprise app provides transparency regarding sales and goal performance, and also associated compensation. this enterprise app provides transparency regarding sales and goal performance and also associated compensation Other customers use our retail management app to get real-time sales and performance metrics across thousands of floor associates regarding what is happening now, not yesterday, and allows them to also compete with other branches in their organization. other customers use our retail management app to get real-time sales and performance metrics across thousands of floor associates regarding what is happening now not yesterday and allows them to also compete with other branches in their organization Enterprise apps are the future of how our customers will fully realize the value of their data and fully realize the value of a digitally transformed business. enterprise apps are the future of how our customers will fully realize the value of their data and fully realize the value of a digitally transformed business When we talk about enterprise apps, we’re talking about fully functioning, feature-rich business apps that help solve some of our customers’ most challenging business issues. They aren’t just little workflows where someone stitched together two data points and called it an app. These apps have robust enterprise-grade security with fine-grained data access controls. They have multiple distribution options, including access with any browser and being natively deployed to iOS, Android, and the mobile web. They also have an interactive and responsive UI, taking advantage of Domo’s industry-leading end-user experience, as well as sophisticated mapping capabilities, integrations with thousands of data sources, and importantly, write back capability to complete the round-trip data exchange. The excitement around our apps is palpable. When we talk about enterprise apps, we’re talking about fully functioning, feature-rich business apps that help solve some of our customers’ most challenging business issues. when we talk about enterprise apps we’re talking about fully functioning feature-rich business apps that help solve some of our customers’ most challenging business issues They aren’t just little workflows where someone stitched together two data points and called it an app. they aren’t just little workflows where someone stitched together two data points and called it an app These apps have robust enterprise-grade security with fine-grained data access controls. these apps have robust enterprise-grade security with fine-grained data access controls They have multiple distribution options, including access with any browser and being natively deployed to iOS, Android, and the mobile web. they have multiple distribution options including access with any browser and being natively deployed to ios android and the mobile web They also have an interactive and responsive UI, taking advantage of Domo’s industry-leading end-user experience, as well as sophisticated mapping capabilities, integrations with thousands of data sources, and importantly, write back capability to complete the round-trip data exchange. they also have an interactive and responsive ui taking advantage of domo’s industry-leading end-user experience as well as sophisticated mapping capabilities integrations with thousands of data sources and importantly write back capability to complete the round-trip data exchange The excitement around our apps is palpable. the excitement around our apps is palpable At Domopalooza, our annual customer event in March, after a main stage customer session where several customers presented their apps in a session called App Attack, many of our other customers approached us who were upset that they didn’t get a chance to show off their enterprise apps that they use to run their businesses. One of those customers was NBC, whom we brought on stage the next morning to demonstrate the programming performance app that 400-500 people, everyone from executives to producers to marketers, use on their phones to interact with hundreds of millions of rows of data so they can easily understand how their programming is performing against the competition. Also during the App Attack, UPMC, a 40-hospital healthcare system, demonstrated how it is using our Digital 360 app, part of the Domo Marketing Suite, to drive better marketing ROI across the entire organization. At Domopalooza, our annual customer event in March, after a main stage customer session where several customers presented their apps in a session called App Attack, many of our other customers approached us who were upset that they didn’t get a chance to show off their enterprise apps that they use to run their businesses. at domopalooza our annual customer event in march after a main stage customer session where several customers presented their apps in a session called app attack many of our other customers approached us who were upset that they didn’t get a chance to show off their enterprise apps that they use to run their businesses One of those customers was NBC, whom we brought on stage the next morning to demonstrate the programming performance app that 400-500 people, everyone from executives to producers to marketers, use on their phones to interact with hundreds of millions of rows of data so they can easily understand how their programming is performing against the competition. one of those customers was nbc whom we brought on stage the next morning to demonstrate the programming performance app that 400-500 people everyone from executives to producers to marketers use on their phones to interact with hundreds of millions of rows of data so they can easily understand how their programming is performing against the competition Also during the App Attack, UPMC, a 40-hospital healthcare system, demonstrated how it is using our Digital 360 app, part of the Domo Marketing Suite, to drive better marketing ROI across the entire organization. also during the app attack upmc a 40-hospital healthcare system demonstrated how it is using our digital 360 app part of the domo marketing suite to drive better marketing roi across the entire organization Telus, the Canadian telecom company, shared how they are using a store performance app to get real-time data into the hands of their store managers to drive better store performance across their retail business. Now to my third point, the strength of our ecosystem is helping us build a defensible business. In combination with the power and scale of the Domo platform, our ecosystem partners allow us to offer new products, features, and integrations that serve the unique needs and environments across every area of every business. In Q1, in conjunction with our growing portfolio of technology partners such as AWS, Google, Azure, LinkedIn, Box, Coupa, Okta, and Zendesk, we announced the Domo Integration Cloud. Telus, the Canadian telecom company, shared how they are using a store performance app to get real-time data into the hands of their store managers to drive better store performance across their retail business. telus the canadian telecom company shared how they are using a store performance app to get real-time data into the hands of their store managers to drive better store performance across their retail business Now to my third point, the strength of our ecosystem is helping us build a defensible business. now to my third point the strength of our ecosystem is helping us build a defensible business In combination with the power and scale of the Domo platform, our ecosystem partners allow us to offer new products, features, and integrations that serve the unique needs and environments across every area of every business. in combination with the power and scale of the domo platform our ecosystem partners allow us to offer new products features and integrations that serve the unique needs and environments across every area of every business In Q1, in conjunction with our growing portfolio of technology partners such as AWS, Google, Azure, LinkedIn, Box, Coupa, Okta, and Zendesk, we announced the Domo Integration Cloud. in q1 in conjunction with our growing portfolio of technology partners such as aws google azure linkedin box coupa okta and zendesk we announced the domo integration cloud The Domo Integration Cloud, our iPaaS solution, includes more than 1,000 pre-built connectors and our federated query capabilities to connect to and leverage data no matter where it lives, on-prem or in the cloud. To demonstrate how expansive our connector partnerships are, for example, we connect to 17 separate AWS services such as Redshift, RDS, Aurora, Athena, and S3. 19 Google services such as BigQuery, Google Analytics, AdSense, and Google Cloud Storage, many of which include write back, and which we believe are industry-leading. Integration Cloud is designed for customers who need a solution with more than 1,000 pre-built connectors to quickly and securely bring together their many disparate data sources to deliver business value. Astellas Pharma US, a $3 billion-plus revenue business, is one example of a new Integration Cloud customer. The Domo Integration Cloud, our iPaaS solution, includes more than 1,000 pre-built connectors and our federated query capabilities to connect to and leverage data no matter where it lives, on-prem or in the cloud. the domo integration cloud our ipaas solution includes more than 1,000 pre-built connectors and our federated query capabilities to connect to and leverage data no matter where it lives on-prem or in the cloud To demonstrate how expansive our connector partnerships are, for example, we connect to 17 separate AWS services such as Redshift, RDS, Aurora, Athena, and S3. 19 Google services such as BigQuery, Google Analytics, AdSense, and Google Cloud Storage, many of which include write back, and which we believe are industry-leading. to demonstrate how expansive our connector partnerships are for example we connect to 17 separate aws services such as redshift rds aurora athena and s3 19 google services such as bigquery google analytics adsense and google cloud storage many of which include write back and which we believe are industry-leading Integration Cloud is designed for customers who need a solution with more than 1,000 pre-built connectors to quickly and securely bring together their many disparate data sources to deliver business value. integration cloud is designed for customers who need a solution with more than 1,000 pre-built connectors to quickly and securely bring together their many disparate data sources to deliver business value Astellas Pharma US, a $3 billion-plus revenue business, is one example of a new Integration Cloud customer. astellas pharma us a $3 billion-plus revenue business is one example of a new integration cloud customer One of the most exciting ecosystem announcements in the last quarter was the Domo Business Automation Engine, part of Mr. Roboto, and a first-of-its-kind orchestration layer that works across all of an organization's data systems and people. It leverages machine learning and advanced alerting capabilities to help organizations coordinate intelligent event-based workflows and shorten the time from insights to action. In plain English, this means Domo goes beyond delivering insights to truly becoming an operating system for your company by intelligently automating key actions across multiple systems of record. Another instance that demonstrates the strength of partnerships in our ecosystem is our new data science and machine learning offerings, which we also announced in Q1, and which have been a big hit with customers as they look to rapidly deliver advanced insights into the business. One of the most exciting ecosystem announcements in the last quarter was the Domo Business Automation Engine, part of Mr. Roboto, and a first-of-its-kind orchestration layer that works across all of an organization's data systems and people. one of the most exciting ecosystem announcements in the last quarter was the domo business automation engine part of mr roboto and a first-of-its-kind orchestration layer that works across all of an organization's data systems and people It leverages machine learning and advanced alerting capabilities to help organizations coordinate intelligent event-based workflows and shorten the time from insights to action. it leverages machine learning and advanced alerting capabilities to help organizations coordinate intelligent event-based workflows and shorten the time from insights to action In plain English, this means Domo goes beyond delivering insights to truly becoming an operating system for your company by intelligently automating key actions across multiple systems of record. in plain english this means domo goes beyond delivering insights to truly becoming an operating system for your company by intelligently automating key actions across multiple systems of record Another instance that demonstrates the strength of partnerships in our ecosystem is our new data science and machine learning offerings, which we also announced in Q1, and which have been a big hit with customers as they look to rapidly deliver advanced insights into the business. another instance that demonstrates the strength of partnerships in our ecosystem is our new data science and machine learning offerings which we also announced in q1 and which have been a big hit with customers as they look to rapidly deliver advanced insights into the business Through key integrations with Amazon SageMaker as well as Jupyter, we are helping data scientists spend more time doing the work they were trained to do by eliminating much of the time-consuming, repetitive work of data preparation and transfer. A global CPG leader leveraged our data science offering to dramatically improve store forecasting, realizing millions of dollars of value after only two weeks of work. This also extends beyond the data scientists to help people who aren't technical experts leverage data science to predict outcomes. At Domopalooza, for instance, TripAdvisor's Head of People Analytics demonstrated how he is using the programming language R within the Domo platform to better understand and predict employee behavior so they can reduce employee turnover. Through key integrations with Amazon SageMaker as well as Jupyter, we are helping data scientists spend more time doing the work they were trained to do by eliminating much of the time-consuming, repetitive work of data preparation and transfer. through key integrations with amazon sagemaker as well as jupyter we are helping data scientists spend more time doing the work they were trained to do by eliminating much of the time-consuming repetitive work of data preparation and transfer A global CPG leader leveraged our data science offering to dramatically improve store forecasting, realizing millions of dollars of value after only two weeks of work. a global cpg leader leveraged our data science offering to dramatically improve store forecasting realizing millions of dollars of value after only two weeks of work This also extends beyond the data scientists to help people who aren't technical experts leverage data science to predict outcomes. this also extends beyond the data scientists to help people who aren't technical experts leverage data science to predict outcomes At Domopalooza, for instance, TripAdvisor's Head of People Analytics demonstrated how he is using the programming language R within the Domo platform to better understand and predict employee behavior so they can reduce employee turnover. at domopalooza for instance tripadvisor's head of people analytics demonstrated how he is using the programming language r within the domo platform to better understand and predict employee behavior so they can reduce employee turnover Furthering our ecosystem footprint with Domo's IoT Cloud, we leverage relationships with AWS IoT Analytics, AWS IoT Core, AWS IoT Device Defender, Azure, Particle, Raspberry Pi, Kafka, and MongoDB, to name a few. Domo IoT Cloud features more than 30 unique IoT connectors and several new IoT apps to help customers get more value from machine-generated data. A manufacturer of robotic consumer products, SharkNinja, for example, is using our IoT capability to understand the behavior of their products once they're purchased, which is something they just couldn't do before. This capability helps them produce better products to improve their customers' experience. Building on our IoT partnerships, I'm excited to announce today the Zendesk Customer Success IoT App, a new app developed with Zendesk. Furthering our ecosystem footprint with Domo's IoT Cloud, we leverage relationships with AWS IoT Analytics, AWS IoT Core, AWS IoT Device Defender, Azure, Particle, Raspberry Pi, Kafka, and MongoDB, to name a few. furthering our ecosystem footprint with domo's iot cloud we leverage relationships with aws iot analytics aws iot core aws iot device defender azure particle raspberry pi kafka and mongodb to name a few Domo IoT Cloud features more than 30 unique IoT connectors and several new IoT apps to help customers get more value from machine-generated data. domo iot cloud features more than 30 unique iot connectors and several new iot apps to help customers get more value from machine-generated data A manufacturer of robotic consumer products, SharkNinja, for example, is using our IoT capability to understand the behavior of their products once they're purchased, which is something they just couldn't do before. a manufacturer of robotic consumer products sharkninja for example is using our iot capability to understand the behavior of their products once they're purchased which is something they just couldn't do before This capability helps them produce better products to improve their customers' experience. this capability helps them produce better products to improve their customers' experience Building on our IoT partnerships, I'm excited to announce today the Zendesk Customer Success IoT App, a new app developed with Zendesk. building on our iot partnerships i'm excited to announce today the zendesk customer success iot app a new app developed with zendesk It takes machine data into our platform, and then through Domo's alerting and workflow engines, when certain conditions are met, it automatically initiates a Zendesk support ticket without any human involvement. This is just one of several new apps you'll see us develop with partners that leverage the power of the Domo platform to create new value for customers. We're in the very early innings of customers adopting the platform for purposes of applying it to very specific high-value use cases, and we believe we'll see significant proliferation of applications on our platform as they become more well-known to the marketplace. One strength of our ecosystem is our growing body of users and available training. This last quarter, we announced our first official certification program, which includes five new product certifications to help people level up their data skills and demonstrate proficiency in Domo. It takes machine data into our platform, and then through Domo's alerting and workflow engines, when certain conditions are met, it automatically initiates a Zendesk support ticket without any human involvement. it takes machine data into our platform and then through domo's alerting and workflow engines when certain conditions are met it automatically initiates a zendesk support ticket without any human involvement This is just one of several new apps you'll see us develop with partners that leverage the power of the Domo platform to create new value for customers. this is just one of several new apps you'll see us develop with partners that leverage the power of the domo platform to create new value for customers We're in the very early innings of customers adopting the platform for purposes of applying it to very specific high-value use cases, and we believe we'll see significant proliferation of applications on our platform as they become more well-known to the marketplace. we're in the very early innings of customers adopting the platform for purposes of applying it to very specific high-value use cases and we believe we'll see significant proliferation of applications on our platform as they become more well-known to the marketplace One strength of our ecosystem is our growing body of users and available training. one strength of our ecosystem is our growing body of users and available training This last quarter, we announced our first official certification program, which includes five new product certifications to help people level up their data skills and demonstrate proficiency in Domo. this last quarter we announced our first official certification program which includes five new product certifications to help people level up their data skills and demonstrate proficiency in domo We will continue to make investments in our vast and growing ecosystem to better support our customers and gain further leverage. You can expect more related announcements in the future. In closing, I'm proud of our team for the innovation they keep delivering that keeps us ahead of the pack, as recognized by our customers and by third parties. In the most recent Dresner Advisory Services report on self-service BI, Domo ranked number one out of 23 vendors, scoring high points for our collaboration, governance, storytelling, and integration features, which continue to grow in importance as organizations realize they need the combination of tools that only Domo provides. Additionally, in Dresner's separate flagship Wisdom of the Crowds research, Domo received a perfect recommendation score from customers for the third year in a row. In the Gartner report published in May, customers ranked their BI and analytics vendors. We will continue to make investments in our vast and growing ecosystem to better support our customers and gain further leverage. we will continue to make investments in our vast and growing ecosystem to better support our customers and gain further leverage You can expect more related announcements in the future. you can expect more related announcements in the future In closing, I'm proud of our team for the innovation they keep delivering that keeps us ahead of the pack, as recognized by our customers and by third parties. in closing i'm proud of our team for the innovation they keep delivering that keeps us ahead of the pack as recognized by our customers and by third parties In the most recent Dresner Advisory Services report on self-service BI, Domo ranked number one out of 23 vendors, scoring high points for our collaboration, governance, storytelling, and integration features, which continue to grow in importance as organizations realize they need the combination of tools that only Domo provides. in the most recent dresner advisory services report on self-service bi domo ranked number one out of 23 vendors scoring high points for our collaboration governance storytelling and integration features which continue to grow in importance as organizations realize they need the combination of tools that only domo provides Additionally, in Dresner's separate flagship Wisdom of the Crowds research, Domo received a perfect recommendation score from customers for the third year in a row. additionally in dresner's separate flagship wisdom of the crowds research domo received a perfect recommendation score from customers for the third year in a row In the Gartner report published in May, customers ranked their BI and analytics vendors. in the gartner report published in may customers ranked their bi and analytics vendors Domo received the number one rating of all vendors for business benefits achieved, as well as for ease of migration, which signifies how easy it is to implement the products that we roll out. I'm continually astounded and impressed how the biggest companies in the world are using our platform and our enterprise apps to transform their businesses. With that, I'll now turn it over to Bruce. Bruce? Domo received the number one rating of all vendors for business benefits achieved, as well as for ease of migration, which signifies how easy it is to implement the products that we roll out. domo received the number one rating of all vendors for business benefits achieved as well as for ease of migration which signifies how easy it is to implement the products that we roll out I'm continually astounded and impressed how the biggest companies in the world are using our platform and our enterprise apps to transform their businesses. i'm continually astounded and impressed how the biggest companies in the world are using our platform and our enterprise apps to transform their businesses With that, I'll now turn it over to Bruce. with that i'll now turn it over to bruce Bruce? bruce

Speaker 1: Thank you, Josh. I'll begin with our first quarter performance, followed by our second quarter and fiscal 2020 full-year guidance. We had another solid quarter, and as Josh mentioned, we're executing well against our plan. Billings grew 22% to $41.1 million. Our billings growth was supported by our dollar-based net revenue retention rate that continues to be greater than 100% and was slightly higher than last quarter. We also continue to see more customers entering into multi-year contracts, with 45% of our customers now under multi-year contracts at the end of Q1, compared to 35% at the end of Q1 last year. This drove our remaining performance obligations, or RPO, to grow 34% compared to the same quarter last year. Q1 revenue was $40.8 million, a year-over-year increase of 28%. Subscription revenue grew 29%, represented 84% of total revenue. Thank you, Josh. thank you josh I'll begin with our first quarter performance, followed by our second quarter and fiscal 2020 full-year guidance. i'll begin with our first quarter performance followed by our second quarter and fiscal 2020 full-year guidance We had another solid quarter, and as Josh mentioned, we're executing well against our plan. we had another solid quarter and as josh mentioned we're executing well against our plan Billings grew 22% to $41.1 million. billings grew 22% to $41.1 million Our billings growth was supported by our dollar-based net revenue retention rate that continues to be greater than 100% and was slightly higher than last quarter. our billings growth was supported by our dollar-based net revenue retention rate that continues to be greater than 100% and was slightly higher than last quarter We also continue to see more customers entering into multi-year contracts, with 45% of our customers now under multi-year contracts at the end of Q1, compared to 35% at the end of Q1 last year. we also continue to see more customers entering into multi-year contracts with 45% of our customers now under multi-year contracts at the end of q1 compared to 35% at the end of q1 last year This drove our remaining performance obligations, or RPO, to grow 34% compared to the same quarter last year. this drove our remaining performance obligations or rpo to grow 34% compared to the same quarter last year Q1 revenue was $40.8 million, a year-over-year increase of 28%. q1 revenue was $40.8 million a year-over-year increase of 28% Subscription revenue grew 29%, represented 84% of total revenue. subscription revenue grew 29% represented 84% of total revenue Year-over-year subscription revenue growth was driven primarily by new customers, and we now have over 1,800 customers. International revenue represented 26% of total revenue, up from 23% in Q4. Our subscription gross margin was 77%, up 270 basis points from 74.3% in Q4, and up over seven full percentage points from 69.8% in Q1 of last year. We plan to get additional leverage out of our subscription cost of revenue as we continue to effectively manage our data center operations to finding efficiencies and better utilizing certain services. Including our services business, our total gross margin was 69.1%, a 60-basis-point improvement compared to 68.5% in the fourth quarter of last year, and a 520-basis-point improvement compared to 63.9% gross margin in the first quarter of last year. Year-over-year subscription revenue growth was driven primarily by new customers, and we now have over 1,800 customers. year-over-year subscription revenue growth was driven primarily by new customers and we now have over 1,800 customers International revenue represented 26% of total revenue, up from 23% in Q4. international revenue represented 26% of total revenue up from 23% in q4 Our subscription gross margin was 77%, up 270 basis points from 74.3% in Q4, and up over seven full percentage points from 69.8% in Q1 of last year. our subscription gross margin was 77% up 270 basis points from 74.3% in q4 and up over seven full percentage points from 69.8% in q1 of last year We plan to get additional leverage out of our subscription cost of revenue as we continue to effectively manage our data center operations to finding efficiencies and better utilizing certain services. we plan to get additional leverage out of our subscription cost of revenue as we continue to effectively manage our data center operations to finding efficiencies and better utilizing certain services Including our services business, our total gross margin was 69.1%, a 60-basis-point improvement compared to 68.5% in the fourth quarter of last year, and a 520-basis-point improvement compared to 63.9% gross margin in the first quarter of last year. including our services business our total gross margin was 69.1% a 60-basis-point improvement compared to 68.5% in the fourth quarter of last year and a 520-basis-point improvement compared to 63.9% gross margin in the first quarter of last year In addition to our revenue growth and improving gross margin, I was pleased that we were able to deliver these results once again with a further decrease in operating expenses. In Q1, we were able to decrease operating expenses by 15% from last year, even though revenue increased by 28% year over year. The decreases came from lower marketing and personnel costs. The net effect of increased revenue while effectively managing costs allowed us to improve our operating margin by 73 full percentage points from the same quarter last year. Our net loss was $29.2 million, and our net loss per share was $1.08. This is based on 27 million weighted average shares outstanding, Basic and diluted. Turning now to our balance sheet. As of April 30th, we had cash equivalents, and short-term investments of $154 million, more than adequate amount to get us to cash flow positive. In addition to our revenue growth and improving gross margin, I was pleased that we were able to deliver these results once again with a further decrease in operating expenses. in addition to our revenue growth and improving gross margin i was pleased that we were able to deliver these results once again with a further decrease in operating expenses In Q1, we were able to decrease operating expenses by 15% from last year, even though revenue increased by 28% year over year. in q1 we were able to decrease operating expenses by 15% from last year even though revenue increased by 28% year over year The decreases came from lower marketing and personnel costs. the decreases came from lower marketing and personnel costs The net effect of increased revenue while effectively managing costs allowed us to improve our operating margin by 73 full percentage points from the same quarter last year. the net effect of increased revenue while effectively managing costs allowed us to improve our operating margin by 73 full percentage points from the same quarter last year Our net loss was $29.2 million, and our net loss per share was $1.08. our net loss was $29.2 million and our net loss per share was $1.08 This is based on 27 million weighted average shares outstanding, Basic and diluted. this is based on 27 million weighted average shares outstanding, basic and diluted Turning now to our balance sheet. turning now to our balance sheet As of April 30th, we had cash equivalents, and short-term investments of $154 million, more than adequate amount to get us to cash flow positive. as of april 30th we had cash equivalents and short-term investments of $154 million more than adequate amount to get us to cash flow positive Our adjusted cash used in operations was $22.2 million, an improvement of $5.5 million over the prior quarter, and a 40% reduction compared to Q1 of the prior year. Adjusted cash used in operations excludes the effect of $4.5 million of proceeds from shares purchased in Q1 under our employee stock purchase plan, which had no effect on our cash balance, but is presented as a gross up in two different sections of the cash flow statement. Now to discuss what we expect in Q2. We expect Q2 billings of about $42 million. We expect our Q2 operating expenses to decline as expenses related to new sales hires are more than offset by the Q1 cost of our annual user conference. For the year, we expect our operating expenses to be down slightly from fiscal 2019. Our adjusted cash used in operations was $22.2 million, an improvement of $5.5 million over the prior quarter, and a 40% reduction compared to Q1 of the prior year. our adjusted cash used in operations was $22.2 million an improvement of $5.5 million over the prior quarter and a 40% reduction compared to q1 of the prior year Adjusted cash used in operations excludes the effect of $4.5 million of proceeds from shares purchased in Q1 under our employee stock purchase plan, which had no effect on our cash balance, but is presented as a gross up in two different sections of the cash flow statement. adjusted cash used in operations excludes the effect of $4.5 million of proceeds from shares purchased in q1 under our employee stock purchase plan which had no effect on our cash balance but is presented as a gross up in two different sections of the cash flow statement Now to discuss what we expect in Q2. now to discuss what we expect in q2 We expect Q2 billings of about $42 million. we expect q2 billings of about $42 million We expect our Q2 operating expenses to decline as expenses related to new sales hires are more than offset by the Q1 cost of our annual user conference. we expect our q2 operating expenses to decline as expenses related to new sales hires are more than offset by the q1 cost of our annual user conference For the year, we expect our operating expenses to be down slightly from fiscal 2019. for the year we expect our operating expenses to be down slightly from fiscal 2019 We expect to continue to execute on our plan to decrease cash burn sequentially each quarter of fiscal year 2020, and expect Q2 adjusted cash used in operations of about $20.5 million and $74.5 million for the year. Now to our formal guidance. For the second quarter of 2020, we expect GAAP revenue to be in the range of $41 million-$42 million. We expect non-GAAP net loss per share, basic and diluted of $0.98-$1.02. This assumes 27.5 million weighted average shares outstanding, basic and diluted. For the full year of fiscal 2020, we expect GAAP revenue to be in the range of $173 million-$174 million, representing year-over-year growth of approximately 22%. We expect non-GAAP net loss per share, basic and diluted of $3.79-$3.87. This assumes 27.6 million weighted average shares outstanding, basic and diluted. We expect to continue to execute on our plan to decrease cash burn sequentially each quarter of fiscal year 2020, and expect Q2 adjusted cash used in operations of about $20.5 million and $74.5 million for the year. we expect to continue to execute on our plan to decrease cash burn sequentially each quarter of fiscal year 2020 and expect q2 adjusted cash used in operations of about $20.5 million and $74.5 million for the year Now to our formal guidance. now to our formal guidance For the second quarter of 2020, we expect GAAP revenue to be in the range of $41 million-$42 million. for the second quarter of 2020 we expect gaap revenue to be in the range of $41 million-$42 million We expect non-GAAP net loss per share, basic and diluted of $0.98-$1.02. we expect non-gaap net loss per share basic and diluted of $0.98-$1.02 This assumes 27.5 million weighted average shares outstanding, basic and diluted. this assumes 27.5 million weighted average shares outstanding basic and diluted For the full year of fiscal 2020, we expect GAAP revenue to be in the range of $173 million-$174 million, representing year-over-year growth of approximately 22%. for the full year of fiscal 2020 we expect gaap revenue to be in the range of $173 million-$174 million representing year-over-year growth of approximately 22% We expect non-GAAP net loss per share, basic and diluted of $3.79-$3.87. we expect non-gaap net loss per share basic and diluted of $3.79-$3.87 This assumes 27.6 million weighted average shares outstanding, basic and diluted. this assumes 27.6 million weighted average shares outstanding basic and diluted In closing, I'd like to reiterate, we're pleased with the progress we made in Q1 in executing against our fiscal year 2020 objectives as we balance improvements in our cash profile and our expense profile with investments in growth opportunities. With that, we'll open up the call for questions. Operator? In closing, I'd like to reiterate, we're pleased with the progress we made in Q1 in executing against our fiscal year 2020 objectives as we balance improvements in our cash profile and our expense profile with investments in growth opportunities. in closing i'd like to reiterate we're pleased with the progress we made in q1 in executing against our fiscal year 2020 objectives as we balance improvements in our cash profile and our expense profile with investments in growth opportunities With that, we'll open up the call for questions. with that we'll open up the call for questions Operator? operator

Speaker 8: Thank you. Ladies and gentlemen, if you have a question at this time, please press the star then the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Again, that's star then one to ask a question. To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question comes from Sanjit Singh with Morgan Stanley. Your line is now open. Thank you. thank you Ladies and gentlemen, if you have a question at this time, please press the star then the number one key on your touchtone telephone. ladies and gentlemen if you have a question at this time please press the star then the number one key on your touchtone telephone If your question has been answered or you wish to remove yourself from the queue, please press the pound key. if your question has been answered or you wish to remove yourself from the queue please press the pound key Again, that's star then one to ask a question. again that's star then one to ask a question To prevent any background noise, we ask that you please place your line on mute once your question has been stated. to prevent any background noise we ask that you please place your line on mute once your question has been stated Our first question comes from Sanjit Singh with Morgan Stanley. our first question comes from sanjit singh with morgan stanley Your line is now open. your line is now open

Speaker 6: Hi, this is Joshua Baer for Sanjit. Congrats on 73% op margin improvement year-over-year. Hi, this is Joshua Baer for Sanjit. hi this is joshua baer for sanjit Congrats on 73% op margin improvement year-over-year. congrats on 73% op margin improvement year-over-year

Speaker 1: Thank you. Thank you. thank you

Speaker 6: Over the last three quarters, we've seen a bit more upside, I think, than more inline top line this quarter. I'm just wondering, have you seen any changes this quarter in the competitive environment or customer purchasing behavior or demand or anything else? Over the last three quarters, we've seen a bit more upside, I think, than more inline top line this quarter. over the last three quarters we've seen a bit more upside i think than more inline top line this quarter I'm just wondering, have you seen any changes this quarter in the competitive environment or customer purchasing behavior or demand or anything else? i'm just wondering have you seen any changes this quarter in the competitive environment or customer purchasing behavior or demand or anything else

Speaker 1: Hi, it's Bruce. No. Most of the data points that we see, with engagement with our customer base, further reinforce the fact that this is extremely differentiated product compared to anything out there, primarily because it's a complete platform designed for business users to get access to the data they need. In addition to that, we're finding that the customers are embracing the fact that they can build upon the platform and use different components of the platform in ways that really enhance the operations of their business. I think that we are in a extremely good competitive position. Just to your point on overperformance, our Q1s just tend to be the seasonally low quarter, and we did not see the outperformance that we've seen in the past, all the operations, all the metrics still point in the right direction. Hi, it's Bruce. hi it's bruce No. no Most of the data points that we see, with engagement with our customer base, further reinforce the fact that this is extremely differentiated product compared to anything out there, primarily because it's a complete platform designed for business users to get access to the data they need. most of the data points that we see with engagement with our customer base further reinforce the fact that this is extremely differentiated product compared to anything out there primarily because it's a complete platform designed for business users to get access to the data they need In addition to that, we're finding that the customers are embracing the fact that they can build upon the platform and use different components of the platform in ways that really enhance the operations of their business. in addition to that we're finding that the customers are embracing the fact that they can build upon the platform and use different components of the platform in ways that really enhance the operations of their business I think that we are in a extremely good competitive position. i think that we are in a extremely good competitive position Just to your point on overperformance, our Q1s just tend to be the seasonally low quarter, and we did not see the outperformance that we've seen in the past, all the operations, all the metrics still point in the right direction. just to your point on overperformance our q1s just tend to be the seasonally low quarter and we did not see the outperformance that we've seen in the past all the operations all the metrics still point in the right direction Again, we're mostly excited about the fact that the customer engagement that we find with our product and platform, particularly as evidenced at our large user conference, that we're seeing such positive kind of embracing of it and such robust use cases that we're pretty optimistic about how this is going to play out through the future quarters. Again, we're mostly excited about the fact that the customer engagement that we find with our product and platform, particularly as evidenced at our large user conference, that we're seeing such positive kind of embracing of it and such robust use cases that we're pretty optimistic about how this is going to play out through the future quarters. again we're mostly excited about the fact that the customer engagement that we find with our product and platform particularly as evidenced at our large user conference that we're seeing such positive kind of embracing of it and such robust use cases that we're pretty optimistic about how this is going to play out through the future quarters

Speaker 5: Yeah. The only thing I'd add to that is, it's true, Q1 is typically seasonally low. A lot of the big deals that come through are going to come through in Q4. As we looked at things, we didn't have any of the big deals come through in Q1. Like we mentioned in the script, we have more seven-figure deals in our pipeline than we've ever had by a meaningful amount. It just feels like there's a lot of really interesting conversations that we're having with brand new customers, with customers that signed within the last year, and then also with customers that have been with us for three years. We're having very big strategic conversations with them, where they recognize the value of all the things that we're doing. Yeah. yeah The only thing I'd add to that is, it's true, Q1 is typically seasonally low. the only thing i'd add to that is it's true q1 is typically seasonally low A lot of the big deals that come through are going to come through in Q4. a lot of the big deals that come through are going to come through in q4 As we looked at things, we didn't have any of the big deals come through in Q1. as we looked at things we didn't have any of the big deals come through in q1 Like we mentioned in the script, we have more seven-figure deals in our pipeline than we've ever had by a meaningful amount. like we mentioned in the script we have more seven-figure deals in our pipeline than we've ever had by a meaningful amount It just feels like there's a lot of really interesting conversations that we're having with brand new customers, with customers that signed within the last year, and then also with customers that have been with us for three years. it just feels like there's a lot of really interesting conversations that we're having with brand new customers with customers that signed within the last year and then also with customers that have been with us for three years We're having very big strategic conversations with them, where they recognize the value of all the things that we're doing. we're having very big strategic conversations with them where they recognize the value of all the things that we're doing Maybe not just some components. Or just one piece like Looker does, for instance, but really leveraging all of the things that we do and having big strategic conversations with us. Hopefully we'll see some of that outperformance like we did in previous quarters. We knew Q1 is always tight just because we have a big clean-out in Q4. Maybe not just some components. Or just one piece like Looker does, for instance, but really leveraging all of the things that we do and having big strategic conversations with us. maybe not just some components. or just one piece like looker does for instance but really leveraging all of the things that we do and having big strategic conversations with us Hopefully we'll see some of that outperformance like we did in previous quarters. hopefully we'll see some of that outperformance like we did in previous quarters We knew Q1 is always tight just because we have a big clean-out in Q4. we knew q1 is always tight just because we have a big clean-out in q4

Speaker 6: Excellent. Are you still looking to increase sales capacity by 30% this year? Are you seeing the productivity improvements to justify that? Then with that in mind, can you just comment on the potential to accelerate new ACV in FY 2020? Thanks. Excellent. excellent Are you still looking to increase sales capacity by 30% this year? are you still looking to increase sales capacity by 30% this year Are you seeing the productivity improvements to justify that? are you seeing the productivity improvements to justify that Then with that in mind, can you just comment on the potential to accelerate new ACV in FY 2020? then with that in mind can you just comment on the potential to accelerate new acv in fy 2020 Thanks. thanks

Speaker 5: Yeah. I'll answer initially. Yeah, definitely still pushing forward and on track in terms of hiring the reps and getting the reps in place. Still really encouraged by the underlying metrics like productivity, pipeline coverage in the different regions. Also, like we mentioned, not only in the outer regions but also just incorporate here, retention rates are starting to look similar to enterprise retention rates. Productivity is looking really positive, which is why about a quarter ago, we said we need to start hiring more reps in all the regions. We're very encouraged by that, now it's a matter of getting that capacity in place. Then, before I turn to Bruce to answer this question as well, the other thing that I was really encouraged by in Q1, even though we didn't outperform on some of the billings metrics, we certainly did on the cash flow metric. Yeah. yeah I'll answer initially. i'll answer initially Yeah, definitely still pushing forward and on track in terms of hiring the reps and getting the reps in place. yeah definitely still pushing forward and on track in terms of hiring the reps and getting the reps in place Still really encouraged by the underlying metrics like productivity, pipeline coverage in the different regions. still really encouraged by the underlying metrics like productivity pipeline coverage in the different regions Also, like we mentioned, not only in the outer regions but also just incorporate here, retention rates are starting to look similar to enterprise retention rates. also like we mentioned not only in the outer regions but also just incorporate here retention rates are starting to look similar to enterprise retention rates Productivity is looking really positive, which is why about a quarter ago, we said we need to start hiring more reps in all the regions. productivity is looking really positive which is why about a quarter ago we said we need to start hiring more reps in all the regions We're very encouraged by that, now it's a matter of getting that capacity in place. we're very encouraged by that now it's a matter of getting that capacity in place Then, before I turn to Bruce to answer this question as well, the other thing that I was really encouraged by in Q1, even though we didn't outperform on some of the billings metrics, we certainly did on the cash flow metric. then before i turn to bruce to answer this question as well the other thing that i was really encouraged by in q1 even though we didn't outperform on some of the billings metrics we certainly did on the cash flow metric That's something that's just as important to us right now, is really getting this by sometime, I guess I can't give any kind of timeline, but sometime in the near future, getting us to where we're close to break even and then growing as rapidly as we can from that point forward. That's something that's just as important to us right now, is really getting this by sometime, I guess I can't give any kind of timeline, but sometime in the near future, getting us to where we're close to break even and then growing as rapidly as we can from that point forward. that's something that's just as important to us right now is really getting this by sometime i guess i can't give any kind of timeline but sometime in the near future getting us to where we're close to break even and then growing as rapidly as we can from that point forward

Speaker 1: I'll just add, we did make the comment last quarter that we believe for this fiscal year, we should see new ACV accelerate, and we are on track to deliver on that expectation that we put out there last quarter. I'll just add, we did make the comment last quarter that we believe for this fiscal year, we should see new ACV accelerate, and we are on track to deliver on that expectation that we put out there last quarter. i'll just add we did make the comment last quarter that we believe for this fiscal year we should see new acv accelerate and we are on track to deliver on that expectation that we put out there last quarter

Speaker 6: Great. Thank you. Great. great Thank you. thank you

Speaker 8: Thank you. Our next question comes from Brad Zelnick with Credit Suisse. Your line is now open. Thank you. thank you Our next question comes from Brad Zelnick with Credit Suisse. our next question comes from brad zelnick with credit suisse Your line is now open. your line is now open

Speaker 11: This is Saeed on for Brad. Congrats on a strong quarter. I just had a very quick question. I wanted to see what is driving the increase in corporate deal sizes. Is it more driven by bigger initial deployments, or is this just a sign of more traction that you're getting up market? This is Saeed on for Brad. this is saeed on for brad Congrats on a strong quarter. congrats on a strong quarter I just had a very quick question. i just had a very quick question I wanted to see what is driving the increase in corporate deal sizes. i wanted to see what is driving the increase in corporate deal sizes Is it more driven by bigger initial deployments, or is this just a sign of more traction that you're getting up market? is it more driven by bigger initial deployments or is this just a sign of more traction that you're getting up market

Speaker 5: Yeah, I think we have very strategic relationships with these customers. Even if it's a $100 million business, $500 million business, billion-dollar business in that corporate area, like I've said many times before, to me, half that business feels like enterprise business. The contracts that we're seeing, the new pricing that we talked about, their ability to go in, and they've always been a leader in going in and trying to sell the value of the platform. Really switching hard to that definitely helps. They're also taking cues from some other successes we've had where they'll go, and they'll sell, in addition to selling the platform and selling minimums and getting longer contracts, also selling some multi-year services to go along with that, to help them get the most out of the product and the platform. Yeah, I think we have very strategic relationships with these customers. yeah i think we have very strategic relationships with these customers Even if it's a $100 million business, $500 million business, billion-dollar business in that corporate area, like I've said many times before, to me, half that business feels like enterprise business. even if it's a $100 million business $500 million business billion-dollar business in that corporate area like i've said many times before to me half that business feels like enterprise business The contracts that we're seeing, the new pricing that we talked about, their ability to go in, and they've always been a leader in going in and trying to sell the value of the platform. the contracts that we're seeing the new pricing that we talked about their ability to go in and they've always been a leader in going in and trying to sell the value of the platform Really switching hard to that definitely helps. really switching hard to that definitely helps They're also taking cues from some other successes we've had where they'll go, and they'll sell, in addition to selling the platform and selling minimums and getting longer contracts, also selling some multi-year services to go along with that, to help them get the most out of the product and the platform. they're also taking cues from some other successes we've had where they'll go and they'll sell in addition to selling the platform and selling minimums and getting longer contracts also selling some multi-year services to go along with that to help them get the most out of the product and the platform

Speaker 11: Okay. Also, as a follow-up, it seems as if services growth rate is now decelerating. Can you actually give us a little bit of idea if we should expect that to continue, and why that deceleration is not actually going to be a leading indicator for subscription? Okay. okay Also, as a follow-up, it seems as if services growth rate is now decelerating. also as a follow-up it seems as if services growth rate is now decelerating Can you actually give us a little bit of idea if we should expect that to continue, and why that deceleration is not actually going to be a leading indicator for subscription? can you actually give us a little bit of idea if we should expect that to continue and why that deceleration is not actually going to be a leading indicator for subscription

Speaker 1: Yeah. I didn't hear the first part of it. We put out what we think we will do this year. Underlying it is accelerating ACV, and you don't necessarily see that right away in billings or revenue. There's no underlying, I guess, factor that would cause us not to be able to deliver again on accelerating ACV. Yeah. yeah I didn't hear the first part of it. i didn't hear the first part of it We put out what we think we will do this year. we put out what we think we will do this year Underlying it is accelerating ACV, and you don't necessarily see that right away in billings or revenue. underlying it is accelerating acv and you don't necessarily see that right away in billings or revenue There's no underlying, I guess, factor that would cause us not to be able to deliver again on accelerating ACV. there's no underlying i guess factor that would cause us not to be able to deliver again on accelerating acv

Speaker 5: The biggest piece that we indicated to everybody to show that or to demonstrate that we believe it's going to accelerate, is the commitment to hiring the reps and adding the heads because we're seeing the productivity that we want. You can't just turn it on overnight. You got to get the reps, you got to get them ramped up, and then they got to close the ACV, and then you got to wait for that ACV to hit your GAAP accounting revenue, and billings in some cases, depending if it's annual or not. Yeah, we're definitely optimistic about the future. The biggest piece that we indicated to everybody to show that or to demonstrate that we believe it's going to accelerate, is the commitment to hiring the reps and adding the heads because we're seeing the productivity that we want. the biggest piece that we indicated to everybody to show that or to demonstrate that we believe it's going to accelerate is the commitment to hiring the reps and adding the heads because we're seeing the productivity that we want You can't just turn it on overnight. you can't just turn it on overnight You got to get the reps, you got to get them ramped up, and then they got to close the ACV, and then you got to wait for that ACV to hit your GAAP accounting revenue, and billings in some cases, depending if it's annual or not. you got to get the reps you got to get them ramped up and then they got to close the acv and then you got to wait for that acv to hit your gaap accounting revenue and billings in some cases depending if it's annual or not Yeah, we're definitely optimistic about the future. yeah we're definitely optimistic about the future

Speaker 11: Thanks. That makes a lot of sense. Thank you. Thanks. thanks That makes a lot of sense. that makes a lot of sense Thank you. thank you

Speaker 5: Thank you. Thank you. thank you

Speaker 8: Thank you. Our next question comes from Jennifer Lowe with UBS. Your line is now open. Thank you. thank you Our next question comes from Jennifer Lowe with UBS. our next question comes from jennifer lowe with ubs Your line is now open. your line is now open

Speaker 4: Great. Thank you. I wanted to just talk about how we should think about the big deals going forward. Can you just give us a little color on how the sales cycles for those types of deals look relative to some of the smaller deals you've done traditionally? Maybe specifically for Bruce Felt, how do you sort of forecast close rates and linearity around those? Is there sort of an extra degree of conservatism there? How do you think about forecasting when some of these big deals could maybe swing things around a bit? Thanks. Great. great Thank you. thank you I wanted to just talk about how we should think about the big deals going forward. i wanted to just talk about how we should think about the big deals going forward Can you just give us a little color on how the sales cycles for those types of deals look relative to some of the smaller deals you've done traditionally? can you just give us a little color on how the sales cycles for those types of deals look relative to some of the smaller deals you've done traditionally Maybe specifically for Bruce Felt, how do you sort of forecast close rates and linearity around those? maybe specifically for bruce felt how do you sort of forecast close rates and linearity around those Is there sort of an extra degree of conservatism there? is there sort of an extra degree of conservatism there How do you think about forecasting when some of these big deals could maybe swing things around a bit? how do you think about forecasting when some of these big deals could maybe swing things around a bit Thanks. thanks

Speaker 5: Yeah. The big deals, in most cases, are places where we've had a relationship. They had some positive experiences with us, and now they want to roll it out across their organization. In addition to buying more capacity, whether it's data capacity or a seat capacity in the old pricing model, or adding additional applications, it's usually a combination of the two. Yeah. yeah The big deals, in most cases, are places where we've had a relationship. the big deals in most cases are places where we've had a relationship They had some positive experiences with us, and now they want to roll it out across their organization. they had some positive experiences with us and now they want to roll it out across their organization In addition to buying more capacity, whether it's data capacity or a seat capacity in the old pricing model, or adding additional applications, it's usually a combination of the two. in addition to buying more capacity whether it's data capacity or a seat capacity in the old pricing model or adding additional applications it's usually a combination of the two It's been really fun to sit down with CIOs. As we mentioned, we started really going out and talking to more CIOs because the users of Tableau and Qlik and Looker, that's not our target audience in terms of whom we sell to, but they can be blockers. We've tried to make a concerted effort to make sure we get out there and talk to the CIO or the CIO's lieutenants. As we've had those conversations, it's been really fun because like I mentioned in my comments, everybody really does know someone that has a great idea for an app. It seems like I get two or three text messages a week from somebody that has a great idea for an app. They're hard to get made. It's been really fun to sit down with CIOs. it's been really fun to sit down with cios As we mentioned, we started really going out and talking to more CIOs because the users of Tableau and Qlik and Looker, that's not our target audience in terms of whom we sell to, but they can be blockers. as we mentioned we started really going out and talking to more cios because the users of tableau and qlik and looker that's not our target audience in terms of whom we sell to but they can be blockers We've tried to make a concerted effort to make sure we get out there and talk to the CIO or the CIO's lieutenants. we've tried to make a concerted effort to make sure we get out there and talk to the cio or the cio's lieutenants As we've had those conversations, it's been really fun because like I mentioned in my comments, everybody really does know someone that has a great idea for an app. as we've had those conversations it's been really fun because like i mentioned in my comments everybody really does know someone that has a great idea for an app It seems like I get two or three text messages a week from somebody that has a great idea for an app. it seems like i get two or three text messages a week from somebody that has a great idea for an app They're hard to get made. they're hard to get made All these same people are having great ideas for apps in their business, but no one has a clue how to do anything with it. When you get in there and talk to the CIOs, there's been multiple times where you start showing them the power of the platform, the apps that can be built on top of that, configure all these enterprise apps that we have, and they start telling you about three projects, four projects, five projects that they have. They had no idea how to sort through those projects without them being just custom development initiatives. Now they're like, "Oh, we can do all that with Domo." It really is a differentiated solution that we have. These big customers, it's just looking at what we've done with smaller and doubling it or 10X-ing it. All these same people are having great ideas for apps in their business, but no one has a clue how to do anything with it. all these same people are having great ideas for apps in their business but no one has a clue how to do anything with it When you get in there and talk to the CIOs, there's been multiple times where you start showing them the power of the platform, the apps that can be built on top of that, configure all these enterprise apps that we have, and they start telling you about three projects, four projects, five projects that they have. when you get in there and talk to the cios there's been multiple times where you start showing them the power of the platform the apps that can be built on top of that configure all these enterprise apps that we have and they start telling you about three projects four projects five projects that they have They had no idea how to sort through those projects without them being just custom development initiatives. they had no idea how to sort through those projects without them being just custom development initiatives Now they're like, "Oh, we can do all that with Domo." It really is a differentiated solution that we have. now they're like "oh we can do all that with domo." it really is a differentiated solution that we have These big customers, it's just looking at what we've done with smaller and doubling it or 10X-ing it. these big customers it's just looking at what we've done with smaller and doubling it or 10x-ing it As we get into the bigger and bigger enterprise customers, we're seeing people that we're talking to, and they're like, "We're thinking about putting 50,000 employees on this, or 75,000 employees on this." Those are the kind of deals that we're looking at in the pipeline. As we get into the bigger and bigger enterprise customers, we're seeing people that we're talking to, and they're like, "We're thinking about putting 50,000 employees on this, or 75,000 employees on this." Those are the kind of deals that we're looking at in the pipeline. as we get into the bigger and bigger enterprise customers we're seeing people that we're talking to and they're like "we're thinking about putting 50,000 employees on this or 75,000 employees on this." those are the kind of deals that we're looking at in the pipeline

Speaker 1: In terms of forecastability, one element of the business that we really like is the fact that the corporate business, and again, that focuses on company sizes less than $1 billion in revenue, is doing very well. Productivity remains extremely high on a per rep basis. Deal sizes are high, and they are growing. That's a foundation, actually, and that has very good visibility from the fact that very fast sales cycles. We like that as kind of maybe a floor of growth that we have in the business. When it comes to the enterprise business, and again, part of what we see in Q1 and the reason why it's seasonally low is the enterprise business tends to be a back end of the year business generally. On top of that's a big focus of our sales hiring. In terms of forecastability, one element of the business that we really like is the fact that the corporate business, and again, that focuses on company sizes less than $1 billion in revenue, is doing very well. in terms of forecastability one element of the business that we really like is the fact that the corporate business and again that focuses on company sizes less than $1 billion in revenue is doing very well Productivity remains extremely high on a per rep basis. productivity remains extremely high on a per rep basis Deal sizes are high, and they are growing. deal sizes are high and they are growing That's a foundation, actually, and that has very good visibility from the fact that very fast sales cycles. that's a foundation actually and that has very good visibility from the fact that very fast sales cycles We like that as kind of maybe a floor of growth that we have in the business. we like that as kind of maybe a floor of growth that we have in the business When it comes to the enterprise business, and again, part of what we see in Q1 and the reason why it's seasonally low is the enterprise business tends to be a back end of the year business generally. when it comes to the enterprise business and again part of what we see in q1 and the reason why it's seasonally low is the enterprise business tends to be a back end of the year business generally On top of that's a big focus of our sales hiring. on top of that's a big focus of our sales hiring On top of that, the deal sizes are getting very large or larger than we've seen ever in the history of the company, which adds complexity to it. On top of that, we're talking significantly to the CIO now compared to before. That adds complexity in general, but we do watch these deals extremely carefully and get updates constantly on the progress, and that does give us the ability to forecast. We finally have enough volume where you can never predict every single deal, how it's going to play out, but you can, as a whole, get a good feel for where you believe we will land in terms of new business. On top of that, the deal sizes are getting very large or larger than we've seen ever in the history of the company, which adds complexity to it. on top of that the deal sizes are getting very large or larger than we've seen ever in the history of the company which adds complexity to it On top of that, we're talking significantly to the CIO now compared to before. on top of that we're talking significantly to the cio now compared to before That adds complexity in general, but we do watch these deals extremely carefully and get updates constantly on the progress, and that does give us the ability to forecast. that adds complexity in general but we do watch these deals extremely carefully and get updates constantly on the progress and that does give us the ability to forecast We finally have enough volume where you can never predict every single deal, how it's going to play out, but you can, as a whole, get a good feel for where you believe we will land in terms of new business. we finally have enough volume where you can never predict every single deal how it's going to play out but you can as a whole get a good feel for where you believe we will land in terms of new business The raw volume and the fact that we have the highest pipeline ever in the company is extremely conducive to giving us confidence to forecast what we think will happen in Q2 and optimism for what we think we will see in Q3 and Q4. The raw volume and the fact that we have the highest pipeline ever in the company is extremely conducive to giving us confidence to forecast what we think will happen in Q2 and optimism for what we think we will see in Q3 and Q4. the raw volume and the fact that we have the highest pipeline ever in the company is extremely conducive to giving us confidence to forecast what we think will happen in q2 and optimism for what we think we will see in q3 and q4

Speaker 4: Okay, great. Maybe just one more for you, Bruce. I think in your prepared remarks, as you were talking about the growth in subscription revenue, I think you made a comment along the lines of the big lever on growth there was new business. You also mentioned over 100% net retention. There's sort of a gray space in there of that's upsell. I guess the question I had was, putting it in context, when you talked about new business as being the driver of this subscription revenue growth, what are you seeing on the upsell side? Was it a little bit less, or are you lumping that into that new business categorization? Okay, great. okay great Maybe just one more for you, Bruce. maybe just one more for you bruce I think in your prepared remarks, as you were talking about the growth in subscription revenue, I think you made a comment along the lines of the big lever on growth there was new business. i think in your prepared remarks as you were talking about the growth in subscription revenue i think you made a comment along the lines of the big lever on growth there was new business You also mentioned over 100% net retention. you also mentioned over 100% net retention There's sort of a gray space in there of that's upsell. there's sort of a gray space in there of that's upsell I guess the question I had was, putting it in context, when you talked about new business as being the driver of this subscription revenue growth, what are you seeing on the upsell side? i guess the question i had was putting it in context when you talked about new business as being the driver of this subscription revenue growth what are you seeing on the upsell side Was it a little bit less, or are you lumping that into that new business categorization? was it a little bit less or are you lumping that into that new business categorization

Speaker 1: Well, the new business from new customers was the highest growth component between that and selling into the installed base. We just had a lot of that in Q4, and I think that just did have some impact on Q1. A lot of the larger deals that are in the pipeline are upsell deals because they're much more strategic transactions with very large current customers. That could easily change and will most likely change toward the back end of the year as those relationships come to closure and we complete the transactions with them. Well, the new business from new customers was the highest growth component between that and selling into the installed base. well the new business from new customers was the highest growth component between that and selling into the installed base We just had a lot of that in Q4, and I think that just did have some impact on Q1. we just had a lot of that in q4 and i think that just did have some impact on q1 A lot of the larger deals that are in the pipeline are upsell deals because they're much more strategic transactions with very large current customers. a lot of the larger deals that are in the pipeline are upsell deals because they're much more strategic transactions with very large current customers That could easily change and will most likely change toward the back end of the year as those relationships come to closure and we complete the transactions with them. that could easily change and will most likely change toward the back end of the year as those relationships come to closure and we complete the transactions with them

Speaker 4: Okay, great. Thank you. Okay, great. okay great Thank you. thank you

Speaker 8: Thank you. Our next question comes from Derrick Wood with Cowen and Company. Your line is now open. Thank you. thank you Our next question comes from Derrick Wood with Cowen and Company. our next question comes from derrick wood with cowen and company Your line is now open. your line is now open

Speaker 2: Great. Thanks. Josh, I wanted to dive into the pricing changes a little bit more. I had a couple questions on that. First, can you give us a sense for how you're rolling it out? Is it with new customers? Is it with renewals? Then what's the idea in terms of how it helps the cadence of your deal flow? Do you think it'll help create less friction at the front end of the funnel, or do you think it helps kind of bigger initial engagements out of the gate? Just curious what you think there. Great. great Thanks. thanks Josh, I wanted to dive into the pricing changes a little bit more. josh i wanted to dive into the pricing changes a little bit more I had a couple questions on that. i had a couple questions on that First, can you give us a sense for how you're rolling it out? first can you give us a sense for how you're rolling it out Is it with new customers? is it with new customers Is it with renewals? is it with renewals Then what's the idea in terms of how it helps the cadence of your deal flow? then what's the idea in terms of how it helps the cadence of your deal flow Do you think it'll help create less friction at the front end of the funnel, or do you think it helps kind of bigger initial engagements out of the gate? do you think it'll help create less friction at the front end of the funnel or do you think it helps kind of bigger initial engagements out of the gate Just curious what you think there. just curious what you think there

Speaker 5: Yeah. It definitely changes the conversation in a few different ways. I think with the renewals, it certainly helps because you don't want to have a customer ask you, "Do you get the same value and the same functionality if we drop our seats in half?" That's a bad conversation to have. We don't want to have that conversation with customers. We had one or two of them, and those conversations freak you out. We recovered from all those and said we've got to roll out this new pricing approach. That was a few quarters ago when we got that indicator. As we started looking at it, also our sales managers were out there saying, "Hey, this is an opportunity for us to build more value in that initial contract. Yeah. yeah It definitely changes the conversation in a few different ways. it definitely changes the conversation in a few different ways I think with the renewals, it certainly helps because you don't want to have a customer ask you, "Do you get the same value and the same functionality if we drop our seats in half?" That's a bad conversation to have. i think with the renewals it certainly helps because you don't want to have a customer ask you "do you get the same value and the same functionality if we drop our seats in half?" that's a bad conversation to have We don't want to have that conversation with customers. we don't want to have that conversation with customers We had one or two of them, and those conversations freak you out. we had one or two of them and those conversations freak you out We recovered from all those and said we've got to roll out this new pricing approach. we recovered from all those and said we've got to roll out this new pricing approach That was a few quarters ago when we got that indicator. that was a few quarters ago when we got that indicator As we started looking at it, also our sales managers were out there saying, "Hey, this is an opportunity for us to build more value in that initial contract. as we started looking at it also our sales managers were out there saying "hey this is an opportunity for us to build more value in that initial contract It sets us up to get even more sales." Like I said in my prepared remarks, instead of putting this gating item in front of the customer that says, "You're not going to really find value until you get more users on here, we're going to put a big gating item and prevent you from rapidly expanding your users." Then another byproduct of the old pricing model was they would look at what we charged them for the first couple hundred users and say, "We've got 10,000 employees," and think to themselves, "This is not going to foot." That wasn't a way that we wanted them to think about it as well. Charging them based on the platform, having data charges associated with it, that sit on top of it, being able to charge for data science, seems to resonate with them much better. It sets us up to get even more sales." Like I said in my prepared remarks, instead of putting this gating item in front of the customer that says, "You're not going to really find value until you get more users on here, we're going to put a big gating item and prevent you from rapidly expanding your users." Then another byproduct of the old pricing model was they would look at what we charged them for the first couple hundred users and say, "We've got 10,000 employees," and think to themselves, "This is not going to foot." That wasn't a way that we wanted them to think about it as well. it sets us up to get even more sales." like i said in my prepared remarks instead of putting this gating item in front of the customer that says "you're not going to really find value until you get more users on here we're going to put a big gating item and prevent you from rapidly expanding your users." then another byproduct of the old pricing model was they would look at what we charged them for the first couple hundred users and say "we've got 10,000 employees," and think to themselves "this is not going to foot." that wasn't a way that we wanted them to think about it as well Charging them based on the platform, having data charges associated with it, that sit on top of it, being able to charge for data science, seems to resonate with them much better. charging them based on the platform having data charges associated with it that sit on top of it being able to charge for data science seems to resonate with them much better Because IT is generally involved with this, as the contracts increase, they're used to paying for data. They don't have a problem paying for data. The seat charge is definitely difficult, especially with some of these bigger customers. That's been helpful. It's also helpful in constructing these new relationships. Instead of them trying to figure out exactly how many people they're going to have on it to figure out what price they should pay, they want it for a use case, and they've already assigned value to that use case. Introducing seats in many cases was confusing the conversation. It seems to be better all around. We have our reps out there talking about it, using this pricing model in front of all of our new deals. Because IT is generally involved with this, as the contracts increase, they're used to paying for data. because it is generally involved with this as the contracts increase they're used to paying for data They don't have a problem paying for data. they don't have a problem paying for data The seat charge is definitely difficult, especially with some of these bigger customers. the seat charge is definitely difficult especially with some of these bigger customers That's been helpful. that's been helpful It's also helpful in constructing these new relationships. it's also helpful in constructing these new relationships Instead of them trying to figure out exactly how many people they're going to have on it to figure out what price they should pay, they want it for a use case, and they've already assigned value to that use case. instead of them trying to figure out exactly how many people they're going to have on it to figure out what price they should pay they want it for a use case and they've already assigned value to that use case Introducing seats in many cases was confusing the conversation. introducing seats in many cases was confusing the conversation It seems to be better all around. it seems to be better all around We have our reps out there talking about it, using this pricing model in front of all of our new deals. we have our reps out there talking about it using this pricing model in front of all of our new deals We've also got a strategy for renewals to bring the renewals back into this contract by offering them incentives, by setting up the contract in the right way to go forward. It also really helps us in the enterprises expand to multimillion-dollar deals much earlier than we would have otherwise. Instead of hoping and praying that more departments are going to come on, as soon as they're finding that value, they have a lot of ideas for more things that they want to do, but not necessarily going out and recruiting all the users. Now all they have to do is see the value initially, have the ideas for the future, and then be willing to pay for that, implement it, knowing the users are going to be able to have access to it. We've also got a strategy for renewals to bring the renewals back into this contract by offering them incentives, by setting up the contract in the right way to go forward. we've also got a strategy for renewals to bring the renewals back into this contract by offering them incentives by setting up the contract in the right way to go forward It also really helps us in the enterprises expand to multimillion-dollar deals much earlier than we would have otherwise. it also really helps us in the enterprises expand to multimillion-dollar deals much earlier than we would have otherwise Instead of hoping and praying that more departments are going to come on, as soon as they're finding that value, they have a lot of ideas for more things that they want to do, but not necessarily going out and recruiting all the users. instead of hoping and praying that more departments are going to come on as soon as they're finding that value they have a lot of ideas for more things that they want to do but not necessarily going out and recruiting all the users Now all they have to do is see the value initially, have the ideas for the future, and then be willing to pay for that, implement it, knowing the users are going to be able to have access to it. now all they have to do is see the value initially have the ideas for the future and then be willing to pay for that implement it knowing the users are going to be able to have access to it

Speaker 2: Makes sense. That's great. My second question is just around the Google Looker acquisition. It'd be nice to get your thoughts on how you guys fit in the market with Looker and what you think this means for the space, and maybe kind of remind us on your AWS partnership and what you've been doing to strengthen that. Makes sense. makes sense That's great. that's great My second question is just around the Google Looker acquisition. my second question is just around the google looker acquisition It'd be nice to get your thoughts on how you guys fit in the market with Looker and what you think this means for the space, and maybe kind of remind us on your AWS partnership and what you've been doing to strengthen that. it'd be nice to get your thoughts on how you guys fit in the market with looker and what you think this means for the space and maybe kind of remind us on your aws partnership and what you've been doing to strengthen that

Speaker 5: Yeah. I think this is a case where one of the things that's challenging is getting data into places like BigQuery or AWS or Microsoft's Azure Cloud, and Looker provides one of those functions. We actually don't see them a ton. They're down the list on competitors that we see frequently. Of the competitors that we normally talk about, they provide the smallest amount of the stack. It's a good technology, and IT people really like it, and it's an admirable technology. Some of the things that they did and put together are things that we've talked about doing as well. It is further down that stack in terms of just connecting data, being able to visualize that data. I'm sure for Google, it's going to be a great thing for them. Yeah. yeah I think this is a case where one of the things that's challenging is getting data into places like BigQuery or AWS or Microsoft's Azure Cloud, and Looker provides one of those functions. i think this is a case where one of the things that's challenging is getting data into places like bigquery or aws or microsoft's azure cloud and looker provides one of those functions We actually don't see them a ton. we actually don't see them a ton They're down the list on competitors that we see frequently. they're down the list on competitors that we see frequently Of the competitors that we normally talk about, they provide the smallest amount of the stack. of the competitors that we normally talk about they provide the smallest amount of the stack It's a good technology, and IT people really like it, and it's an admirable technology. it's a good technology and it people really like it and it's an admirable technology Some of the things that they did and put together are things that we've talked about doing as well. some of the things that they did and put together are things that we've talked about doing as well It is further down that stack in terms of just connecting data, being able to visualize that data. it is further down that stack in terms of just connecting data being able to visualize that data I'm sure for Google, it's going to be a great thing for them. i'm sure for google it's going to be a great thing for them They've already said in their acquisition notes, the CEO of Looker came out and said, "Hey, we're still going to be partnered with all the other vendors out there, and Google is still going to be open to every other vendor. This, by in no way, changes any of the dynamics or approaches that we've taken there." Which I think it's important to make that statement for them. It also is indicative of the fact that no vendor controls data anymore. The data is owned by the customer. Customers figured that out about 10 years ago. Any vendor that says anything otherwise, you really raise the ire of your customers. From that perspective, Google's a great partner of ours. We do connect over 1,000 different enterprise applications and databases, with pre-built connectors, thousands upon thousands with some of the generic connectors that we have. They've already said in their acquisition notes, the CEO of Looker came out and said, "Hey, we're still going to be partnered with all the other vendors out there, and Google is still going to be open to every other vendor. they've already said in their acquisition notes the ceo of looker came out and said "hey we're still going to be partnered with all the other vendors out there and google is still going to be open to every other vendor This, by in no way, changes any of the dynamics or approaches that we've taken there." Which I think it's important to make that statement for them. this by in no way changes any of the dynamics or approaches that we've taken there." which i think it's important to make that statement for them It also is indicative of the fact that no vendor controls data anymore. it also is indicative of the fact that no vendor controls data anymore The data is owned by the customer. the data is owned by the customer Customers figured that out about 10 years ago. customers figured that out about 10 years ago Any vendor that says anything otherwise, you really raise the ire of your customers. any vendor that says anything otherwise you really raise the ire of your customers From that perspective, Google's a great partner of ours. from that perspective google's a great partner of ours We do connect over 1,000 different enterprise applications and databases, with pre-built connectors, thousands upon thousands with some of the generic connectors that we have. we do connect over 1,000 different enterprise applications and databases with pre-built connectors thousands upon thousands with some of the generic connectors that we have Google, I think we have over 19 pre-built connectors that we use. We integrate with Snowflake. We integrate with AWS in a lot of different ways. It's been fun working with AWS because they bring us deals, and they say, "Hey, here's something. We provide this. We need some people to help us create this solution," like we described with the IoT solution. These solutions that we're creating are exciting to us because we're not out there looking for something to do. Our customers are coming to us, our partners are coming to us and saying, "Can you help us with the final mile here and the last leg?" It's been fun to deliver those to the market and see the value that then goes straight to the customer. I think all in all, it's a good thing. Google, I think we have over 19 pre-built connectors that we use. google i think we have over 19 pre-built connectors that we use We integrate with Snowflake. we integrate with snowflake We integrate with AWS in a lot of different ways. we integrate with aws in a lot of different ways It's been fun working with AWS because they bring us deals, and they say, "Hey, here's something. it's been fun working with aws because they bring us deals and they say "hey here's something We provide this. we provide this We need some people to help us create this solution," like we described with the IoT solution. we need some people to help us create this solution," like we described with the iot solution These solutions that we're creating are exciting to us because we're not out there looking for something to do. these solutions that we're creating are exciting to us because we're not out there looking for something to do Our customers are coming to us, our partners are coming to us and saying, "Can you help us with the final mile here and the last leg?" It's been fun to deliver those to the market and see the value that then goes straight to the customer. our customers are coming to us our partners are coming to us and saying "can you help us with the final mile here and the last leg?" it's been fun to deliver those to the market and see the value that then goes straight to the customer I think all in all, it's a good thing. i think all in all it's a good thing It certainly raises more awareness in the market. We've had a lot of customers ask us. There's very few companies that only pick one cloud. Most of them pick multiple clouds. We happen to really be the only agnostic cloud data provider that's out there with any of the kind of functionality that we have. I think that's going to bode well for us as well, is you look at all the other major technology companies that aren't aligned with one of the big three cloud providers. Then when you look at most companies, they use multiple cloud providers. I think from that sense, it's taking a competitor in a way, certainly from one perspective. It certainly raises more awareness in the market. it certainly raises more awareness in the market We've had a lot of customers ask us. we've had a lot of customers ask us There's very few companies that only pick one cloud. there's very few companies that only pick one cloud Most of them pick multiple clouds. most of them pick multiple clouds We happen to really be the only agnostic cloud data provider that's out there with any of the kind of functionality that we have. we happen to really be the only agnostic cloud data provider that's out there with any of the kind of functionality that we have I think that's going to bode well for us as well, is you look at all the other major technology companies that aren't aligned with one of the big three cloud providers. i think that's going to bode well for us as well is you look at all the other major technology companies that aren't aligned with one of the big three cloud providers Then when you look at most companies, they use multiple cloud providers. then when you look at most companies they use multiple cloud providers I think from that sense, it's taking a competitor in a way, certainly from one perspective. i think from that sense it's taking a competitor in a way certainly from one perspective

Speaker 2: Great. Thanks for the color. Great. great Thanks for the color. thanks for the color

Speaker 5: You bet. You bet. you bet

Speaker 8: Thank you. Our next question comes from Pat Walravens with JMP Securities. Your line is now open. Thank you. thank you Our next question comes from Pat Walravens with JMP Securities. our next question comes from pat walravens with jmp securities Your line is now open. your line is now open

Speaker 9: Oh, great. Thank you. Hi, guys. My question would be, giving all the moving parts here and how dynamic this space is, for each of you, Josh, what's the number one thing you're focused on right now in terms of what you're personally trying to accomplish? Bruce, for you, what's your number one focus? Oh, great. oh great Thank you. thank you Hi, guys. hi guys My question would be, giving all the moving parts here and how dynamic this space is, for each of you, Josh, what's the number one thing you're focused on right now in terms of what you're personally trying to accomplish? my question would be giving all the moving parts here and how dynamic this space is for each of you josh what's the number one thing you're focused on right now in terms of what you're personally trying to accomplish Bruce, for you, what's your number one focus? bruce for you what's your number one focus

Speaker 5: Yeah. For me, my number one focus right now is the one that we stated at the time of IPO, and that's going to continue to be our number one focus for probably another 12 months, which is just trying to find the most efficient way possible to identify new customers and close those new customers, acquiring new customers. Once we get our nose in the tent, we do a heck of a job retaining that customer, selling them additional product and services. Actually, once we even get in where we have a real opportunity on the line, we have great close rates. We just need to continue to find customers more efficiently, which is why things like the Looker acquisition just continue to help us, because it raises more eyes that are saying, "Hey, what am I supposed to do in this space? Yeah. yeah For me, my number one focus right now is the one that we stated at the time of IPO, and that's going to continue to be our number one focus for probably another 12 months, which is just trying to find the most efficient way possible to identify new customers and close those new customers, acquiring new customers. for me my number one focus right now is the one that we stated at the time of ipo and that's going to continue to be our number one focus for probably another 12 months which is just trying to find the most efficient way possible to identify new customers and close those new customers acquiring new customers Once we get our nose in the tent, we do a heck of a job retaining that customer, selling them additional product and services. once we get our nose in the tent we do a heck of a job retaining that customer selling them additional product and services Actually, once we even get in where we have a real opportunity on the line, we have great close rates. actually once we even get in where we have a real opportunity on the line we have great close rates We just need to continue to find customers more efficiently, which is why things like the Looker acquisition just continue to help us, because it raises more eyes that are saying, "Hey, what am I supposed to do in this space? we just need to continue to find customers more efficiently which is why things like the looker acquisition just continue to help us because it raises more eyes that are saying "hey what am i supposed to do in this space What's my strategic move here?" You're seeing companies like Google start to put together more of the stack that we built. We'll find at the end of all this whether or not we should have built the whole thing or not, but we did. It really resonates with the forward-thinking customers that we have, and that gives us a lot of confidence that over time, that'll end up being the right thing because these are the forward-thinking customers that are looking at our whole stack and realizing how they can change the way they run their business. I'd say secondarily, the other thing that we had a lot of effort that we're focusing in right now is our ecosystem and our partners. We've got a lot of technology partners. What's my strategic move here?" You're seeing companies like Google start to put together more of the stack that we built. what's my strategic move here?" you're seeing companies like google start to put together more of the stack that we built We'll find at the end of all this whether or not we should have built the whole thing or not, but we did. we'll find at the end of all this whether or not we should have built the whole thing or not but we did It really resonates with the forward-thinking customers that we have, and that gives us a lot of confidence that over time, that'll end up being the right thing because these are the forward-thinking customers that are looking at our whole stack and realizing how they can change the way they run their business. it really resonates with the forward-thinking customers that we have and that gives us a lot of confidence that over time that'll end up being the right thing because these are the forward-thinking customers that are looking at our whole stack and realizing how they can change the way they run their business I'd say secondarily, the other thing that we had a lot of effort that we're focusing in right now is our ecosystem and our partners. i'd say secondarily the other thing that we had a lot of effort that we're focusing in right now is our ecosystem and our partners We've got a lot of technology partners. we've got a lot of technology partners We don't have as many go-to-market partners, we just hired a new VP, Rob Davy, who's gonna help us out. He was at Microsoft for 12 years and was in their enterprise space and partner businesses. He's gonna come and run partners for us, working for Jay Heglar. We also actually just got John Mellor, who was over at Adobe, and he's gonna be our VP of Strategy, or our Chief Strategy Officer, I should say, and Jay's gonna move to Chief Business Officer, which is where he was spending all of his time anyway. That's gonna help us a lot with that go-to-market with the CAC, with efficiently finding customers, messaging to those customers. We feel like we've made two really good hires on those fronts. The last piece is retention. We don't have as many go-to-market partners, we just hired a new VP, Rob Davy, who's gonna help us out. we don't have as many go-to-market partners we just hired a new vp rob davy who's gonna help us out He was at Microsoft for 12 years and was in their enterprise space and partner businesses. he was at microsoft for 12 years and was in their enterprise space and partner businesses He's gonna come and run partners for us, working for Jay Heglar. he's gonna come and run partners for us working for jay heglar We also actually just got John Mellor, who was over at Adobe, and he's gonna be our VP of Strategy, or our Chief Strategy Officer, I should say, and Jay's gonna move to Chief Business Officer, which is where he was spending all of his time anyway. we also actually just got john mellor who was over at adobe and he's gonna be our vp of strategy or our chief strategy officer i should say and jay's gonna move to chief business officer which is where he was spending all of his time anyway That's gonna help us a lot with that go-to-market with the CAC, with efficiently finding customers, messaging to those customers. that's gonna help us a lot with that go-to-market with the cac with efficiently finding customers messaging to those customers We feel like we've made two really good hires on those fronts. we feel like we've made two really good hires on those fronts The last piece is retention. the last piece is retention The numbers start getting bigger in terms of the recurring revenue, as efficient as you can get there, that's a positive thing, we're getting to the time in our company's life cycle where we can focus in on that. We just hired a lady named Pam Marion, who's had a lot of experience at SAP and other companies managing renewal streams. We're excited for that as well. We've got three new people helping us in the three areas that we think are the most important right now. The numbers start getting bigger in terms of the recurring revenue, as efficient as you can get there, that's a positive thing, we're getting to the time in our company's life cycle where we can focus in on that. the numbers start getting bigger in terms of the recurring revenue as efficient as you can get there that's a positive thing we're getting to the time in our company's life cycle where we can focus in on that We just hired a lady named Pam Marion, who's had a lot of experience at SAP and other companies managing renewal streams. we just hired a lady named pam marion who's had a lot of experience at sap and other companies managing renewal streams We're excited for that as well. we're excited for that as well We've got three new people helping us in the three areas that we think are the most important right now. we've got three new people helping us in the three areas that we think are the most important right now

Speaker 1: Yeah, for me, it's support all the growth initiatives, including hiring new reps, building new apps, supporting new customers. Yeah, for me, it's support all the growth initiatives, including hiring new reps, building new apps, supporting new customers. yeah for me it's support all the growth initiatives including hiring new reps building new apps supporting new customers

Speaker 5: Closing deals. Bruce closes a lot of deals. Closing deals. closing deals Bruce closes a lot of deals. bruce closes a lot of deals

Speaker 1: Thank you. Thank you. thank you

Speaker 5: He visits a lot of CFOs, it's a pretty interesting demo when he says, "Here's how I run my public company," the CFO's mouth usually drops. That's been probably Bruce's big focus. He visits a lot of CFOs, it's a pretty interesting demo when he says, "Here's how I run my public company," the CFO's mouth usually drops. he visits a lot of cfos it's a pretty interesting demo when he says "here's how i run my public company," the cfo's mouth usually drops That's been probably Bruce's big focus. that's been probably bruce's big focus

Speaker 1: On that point, I've yet to hear anybody say, "I need it." They've always said, "I need it. On that point, I've yet to hear anybody say, "I need it." They've always said, "I need it. on that point i've yet to hear anybody say "i need it." they've always said "i need it

Speaker 5: Yeah. Yeah. yeah

Speaker 1: It's to support all that within the same cost envelope. We want to do all these things, but we can't spend any more money. Me and my team spend a lot of time working on, well, how do you fund it, because the total cannot go up. This automatically drives down CAC. In a recurring revenue model where you're just building layers and layers of new business that's highly profitable, it just drives you to be cash flow positive naturally without doing anything unnatural. That's just a lot of my effort, and I have the whole company kind of working with me, so it's not an impossible task by any means. In fact, we've shown it in the numbers. We are able to keep growing the business, and we're able to do it with even fewer costs than what we have done in the past. It's to support all that within the same cost envelope. it's to support all that within the same cost envelope We want to do all these things, but we can't spend any more money. we want to do all these things but we can't spend any more money Me and my team spend a lot of time working on, well, how do you fund it, because the total cannot go up. me and my team spend a lot of time working on well how do you fund it because the total cannot go up This automatically drives down CAC. this automatically drives down cac In a recurring revenue model where you're just building layers and layers of new business that's highly profitable, it just drives you to be cash flow positive naturally without doing anything unnatural. in a recurring revenue model where you're just building layers and layers of new business that's highly profitable it just drives you to be cash flow positive naturally without doing anything unnatural That's just a lot of my effort, and I have the whole company kind of working with me, so it's not an impossible task by any means. that's just a lot of my effort and i have the whole company kind of working with me so it's not an impossible task by any means In fact, we've shown it in the numbers. in fact we've shown it in the numbers We are able to keep growing the business, and we're able to do it with even fewer costs than what we have done in the past. we are able to keep growing the business and we're able to do it with even fewer costs than what we have done in the past

Speaker 9: All right. That's super helpful. Thank you, guys. All right. all right That's super helpful. that's super helpful Thank you, guys. thank you guys

Speaker 8: Thank you. As a reminder, ladies and gentlemen, that's star then one to ask a question. Our next question comes from Jack Andrews with Needham & Company. Your line is now open. Thank you. thank you As a reminder, ladies and gentlemen, that's star then one to ask a question. as a reminder ladies and gentlemen that's star then one to ask a question Our next question comes from Jack Andrews with Needham & Company. our next question comes from jack andrews with needham & company Your line is now open. your line is now open

Speaker 3: Good afternoon. Thanks for taking my question. I was wondering if you could shed some light on the pricing scheme of your verticalized applications like Marketing Suite and IoT Cloud, and maybe how these compare to your core platform. Good afternoon. good afternoon Thanks for taking my question. thanks for taking my question I was wondering if you could shed some light on the pricing scheme of your verticalized applications like Marketing Suite and IoT Cloud, and maybe how these compare to your core platform. i was wondering if you could shed some light on the pricing scheme of your verticalized applications like marketing suite and iot cloud and maybe how these compare to your core platform

Speaker 5: Yeah. There's an incremental fee associated with configuring those enterprise apps. We've built hundreds and hundreds of apps for our customers. We have thousands of apps being used by our customers, some of which they've built themselves. We're able to go off the shelf and pull these different building blocks and put them together for our customers. There's a fee associated with that, and then there's an ongoing ACV component. You might have an app like Digital 360, it might be $200,000 to set it up and $200,000 a year, depending on how many users they have. By the time we've gotten to that point, they've identified which users they want, and so that's one way that we can charge. Generally, whatever it is that we're selling, there's an annual fee associated with that app. Yeah. yeah There's an incremental fee associated with configuring those enterprise apps. there's an incremental fee associated with configuring those enterprise apps We've built hundreds and hundreds of apps for our customers. we've built hundreds and hundreds of apps for our customers We have thousands of apps being used by our customers, some of which they've built themselves. we have thousands of apps being used by our customers some of which they've built themselves We're able to go off the shelf and pull these different building blocks and put them together for our customers. we're able to go off the shelf and pull these different building blocks and put them together for our customers There's a fee associated with that, and then there's an ongoing ACV component. there's a fee associated with that and then there's an ongoing acv component You might have an app like Digital 360, it might be $200,000 to set it up and $200,000 a year, depending on how many users they have. you might have an app like digital 360 it might be $200,000 to set it up and $200,000 a year depending on how many users they have By the time we've gotten to that point, they've identified which users they want, and so that's one way that we can charge. by the time we've gotten to that point they've identified which users they want and so that's one way that we can charge Generally, whatever it is that we're selling, there's an annual fee associated with that app. generally whatever it is that we're selling there's an annual fee associated with that app There's some apps that are small, that don't have tons of technology behind them, that we might only charge $25,000-$50,000 a year for. Then there's others that we'll charge $250,000, $400,000, $500,000 a year for. There's some apps that are small, that don't have tons of technology behind them, that we might only charge $25,000-$50,000 a year for. there's some apps that are small that don't have tons of technology behind them that we might only charge $25,000-$50,000 a year for Then there's others that we'll charge $250,000, $400,000, $500,000 a year for. then there's others that we'll charge $250,000 $400,000 $500,000 a year for

Speaker 3: Great. Thanks. Then just sort of moving forward is, thinking about the apps you've introduced so far. Is it fair to think that you may become perhaps more verticalized over time around this initiative? Great. great Thanks. thanks Then just sort of moving forward is, thinking about the apps you've introduced so far. then just sort of moving forward is thinking about the apps you've introduced so far Is it fair to think that you may become perhaps more verticalized over time around this initiative? is it fair to think that you may become perhaps more verticalized over time around this initiative

Speaker 5: I think, specialized, whether it's verticalized or for a particular function in your organization, we have certainly a very well-known brand that's in the news all the time, and they're a customer of ours, and they, in the pipeline right now, have a travel and expense application that they're looking to meet, and it's a good-sized contract. Sometimes it's verticalized, sometimes it's a function. Like I mentioned, there's that app that was shown at Domopalooza around HR and retaining your employees. I think, specialized, whether it's verticalized or for a particular function in your organization, we have certainly a very well-known brand that's in the news all the time, and they're a customer of ours, and they, in the pipeline right now, have a travel and expense application that they're looking to meet, and it's a good-sized contract. i think specialized whether it's verticalized or for a particular function in your organization we have certainly a very well-known brand that's in the news all the time and they're a customer of ours and they in the pipeline right now have a travel and expense application that they're looking to meet and it's a good-sized contract Sometimes it's verticalized, sometimes it's a function. sometimes it's verticalized sometimes it's a function Like I mentioned, there's that app that was shown at Domopalooza around HR and retaining your employees. like i mentioned there's that app that was shown at domopalooza around hr and retaining your employees I think really over any function in your company, and that's why I say our customers look at us and they say, "Hey, we've got all these employees, and we're trying to figure out how to give them real-time commissions on what they're selling because they sell so many things, and we're losing employees because our reps can't actually make sense of the commission spreadsheets that we send to them. I think really over any function in your company, and that's why I say our customers look at us and they say, "Hey, we've got all these employees, and we're trying to figure out how to give them real-time commissions on what they're selling because they sell so many things, and we're losing employees because our reps can't actually make sense of the commission spreadsheets that we send to them. i think really over any function in your company and that's why i say our customers look at us and they say "hey we've got all these employees and we're trying to figure out how to give them real-time commissions on what they're selling because they sell so many things and we're losing employees because our reps can't actually make sense of the commission spreadsheets that we send to them Can we give them an app that helps them see it in real time, and it feels kind of next generation, and it feels like we're being transparent and open with them because they get it in real time? We're able to, again, pull those building blocks off the shelf, put a skin on it that looks like their brand, and they get a really cool custom software application that we just pulled off the shelf that looks custom to all of their employees. Yeah, I think we'll see more verticalization and more specialization for sure. Can we give them an app that helps them see it in real time, and it feels kind of next generation, and it feels like we're being transparent and open with them because they get it in real time? can we give them an app that helps them see it in real time and it feels kind of next generation and it feels like we're being transparent and open with them because they get it in real time We're able to, again, pull those building blocks off the shelf, put a skin on it that looks like their brand, and they get a really cool custom software application that we just pulled off the shelf that looks custom to all of their employees. we're able to again pull those building blocks off the shelf put a skin on it that looks like their brand and they get a really cool custom software application that we just pulled off the shelf that looks custom to all of their employees Yeah, I think we'll see more verticalization and more specialization for sure. yeah i think we'll see more verticalization and more specialization for sure

Speaker 3: Great. Thanks for the color. Great. great Thanks for the color. thanks for the color

Speaker 5: You bet. You bet. you bet

Speaker 8: Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a wonderful day. Thank you. thank you Ladies and gentlemen, thank you for participating in today's conference. ladies and gentlemen thank you for participating in today's conference This does conclude today's program, and you may all disconnect. this does conclude today's program and you may all disconnect Everyone, have a wonderful day. everyone have a wonderful day