ONTF - Earnings call transcript Q2 2022

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Operator

Good afternoon and thank you for standing by. And welcome to the ON24, Inc.

Second Quarter 2022 Financial Results Conference Call. Please be advised today’s conference is being recorded and a replay will be available on ON24's Investor Relations website. I would now like to hand the conference over to Lori Barker, Investor Relations. ahead. go Please

Lori Barker

and Quarter Hello, everyone. to Welcome Thank Earnings good Conference Second XXXX Call. ONXX's you. afternoon,

On the Financial call and with me today are ONXX Steve ONXX. CEO Sharat and Vattuone, of Chief Officer of Sharan, Co-Founder

to the financial see Non-GAAP financial reconciliation for not press as of to financial the that actual Sharat. we in non-GAAP measures use a today's known Please ONXX of we purposes. cautions will call are to the forecasting like To provided future financial this GAAP unknown release that SEC future evaluate non-GAAP periodic only, call, third now addition full to information today's made our could also that to and turn after these operations to not events today's quarter I that refer these and obligation and statements measures, performance, substitute subject press non-GAAP financial guarantees for ongoing year results. include on during and filings and like cause with release. remind our point call. We'd and events call to expectations accordance measures any measures Before presented update are to differ statements uncertainties. today everyone XXXX. factors results refer to materially performance. of are begin, and please report GAAP. planning the including any the and current no statements. statements occur our some and forward-looking these over for reflect out to will statements company's and These I All undertake financial forward calculated regarding will forward-looking would risks guidance fiscal statements we from internal financial forward-looking We in that to both reflect this for

Sharat Sharan

I and how will welcome, progress to our conference you provide results, us. review results we call, a everyone, XXXX believe call. are second our quarter update to joining share Thank priorities On we you. in appreciate positioned We growth today's QX And ONXX's on XXXX. XXXX to financial return fiscal

those of who purpose-built minutes and for platform for and five of are to customers, companies and most healthcare some convert of three for millions who largest the into how the five customers sales new including world's reiterate and a the of is their largest few drive platform, to companies. of enable of thousands spend manufacturing to three largest industrial is as businesses like BXB technology count global of five to ONXX, BXB a we a companies, revenue First, our I to global prospects you digital businesses growth. largest ONXX our global marketing. We are and largest engagement US recognized businesses three must-have would banks, three of six and the

will very billion to digital According to We TAM it. a XX% partner single enablement. provide to providing by go-to-market engagement the functions by has platform sales several and generation tailwinds to demand across XXXX, the to marketing ONXX. their marketing customer companies potential which transform digitally a enable to for significant over enterprise channels interactions We to continues happen BXB of estimate as expect we that grow currently be the to through large accelerate Gartner, market opportunity worldwide digital digital to have move and sales this to $XX

experience of products. Our a platform seven different powers suite

and and first-party revenue marketing drive with made with scale. of the use to to millions convert that our actionable prospects through these insights, ecosystems deep We these customer, into engagement engage data from customers products growth. our are which products and integrations take audience Our at sales

million. We and our Total million, platform million, revenue $X.X professional guidance. our was guidance. non-GAAP of a of loss and Subscription the results. QX exceeding was posted was $X.X $XX.X operating end ahead $XX.X to Turning million, other revenue services of high also revenue

We remain our $XXX was expectation $XXX.X modest Ending in ARR growth. of million of very with million ARR with marketable representing and securities. and cash X% well-capitalized approximately line year-over-year continue in to an increase

environment know, As experienced cycles we business to remain particularly scrutiny, all greater also the continues we global volatile. others, threshold. with the macroeconomic over and sales Like new and at deal longer $XXX,XXX

as spend also We rationalize pressure. their some budgetary customers saw renewal upon they face

represents than total customers, count our which majority of contributing customers on in market, focus the we flat with greater While and pivoted sequentially uncertain sequentially, a customer was quarters. prior $XX,XXX consistent number existing ARR, our economic of to is and our the roughly a ARR on tech With more declined had number continue in included strong are on our with cost-effective of our deal to SaaS we investments and largest increased customers critical the go-to-market stack. closing quarter top as A which we the ROI vast their making front, a XX deliver component expansion of be history.

products resonating. are New our in portfolio

products making to commitments ONXX. and multiple Our customer adding multiyear base is

expansion deal, their on which the me technology ONXX A these with long-time of by XX growing wins. color seven-figure customer, Let a spend largest one with some top is expanded world's total companies, share XXX%. over

several helped engine. global demand customer's past this we've years, generation the power For

and existing ONXX thousands they who we now customer During a a multiyear significant of our our helps certification newest learning to enhance and experience the history, QX, our using integrators worldwide the deliver deal of signed partners use seeing leading digital expand Go of training, consists platform. on decided their upscale a QX, their of global This platform the platform system workforce is ONXX their Live, two enterprises. in the of strategy. enablement company They division partner consolidated thousands enablement After engagement organization power this largest our to In of commitment, including products which products. program ONXX. Forums and newest will and of live

As this by long-term result, solidified we total spend partnership. a and increased strategic our XX% customer's

of a seven-figure partnership, successful record the increased cost-effective with our investment Finally, their of of software track commitment because one our largest and deal. platform multi-year delivering our to world's companies in ROI

a deal role execution data as increasing their increasing central meaningful in marketing such strategy, engagement their and significantly size. go-to-market pipeline results, plays first-party Our achieving average

co-founded More cycles. step XX times. years has than ONXX back. through a the Now company ONXX challenging navigated uncertain Historically, during ago, I well taking has economic done several and

Our marketing, sales ONXX We economies looking are companies consolidate better point digital engagement line drive help a their are cost-effective scale. onto solutions and like a many and fast solutions. with solutions top platform customers believe single of results for prioritizing ROI to solutions

environment completed headcount long-term across priorities long-term structure those believe by difficult and us. a by made is end with Shifting with This our secure gratitude our customer approximately that growth expected to provide demand plan four was we a update align cost opportunity, remain in for we to cost business improved current realities of gears, be model. on the express decision an reducing to The on While hard XXXX. operations our a and X% and better from the optimistic substantially have market of taken look will business includes the let progress decision, sincere reduction I and me to want QX. mid-QX levels strategic my to the our

They keep in a year, they to into data-driven ONXX product webinars headway to our of first-party on for roundtables, Once data made start customers engagement so demand gen their solution data training, our engagement platform executive more wanted from ONXX's and partner their briefing of and first-party have integrated consolidation. to and their a strategy. need to conversations experienced map. Last experiences our products with generated and on is road from our consistent more platform. virtual the it turn aggressive centers unified expand beyond and easier have using substantial one get events, we data systems, their customer highlighted point first-party our traditional First, adopt

our agenda this the been future engagement, can by well our will After be look of engagement our past prospects April, to So customer at Forums focused and first-party base. enhancing innovation deep ONXX customers. and as received provide launching integrations platform, we our the data existing has we on

flexible reseller track and partners in completion. them that Most to Forums scale One and customer to for auto technicians first-party parts and leading possible a our the struggling was to Forums. educate which with collaboration it in program data After certify tool, field. course a American certify automatically API, of important this our new and purchased purchase the they was logos distributor makes QX their to

a an you likely while part be will aside, of is seen we legacy that As minor our have business this ONXX many earnings down. webcast, power winding

relationships Within In for more enterprise Moving large customers other of C-level transactions. go-to-market, to deals with our record high. in number the we or multiproduct growth complex percent our reached building two and products another of steady the QX, priorities. seen have

the employee came multiple go-to-market The stack firm and to to market, to XXX-degree every engagement deals, tech the was provide I'll provide collaboration highlight was integrations use first-party across partner our to their the to a including address something cases tools and all a across new EMEA. internal multiproduct ONXX key were data view generation, of their engagement. win from experience, able demand not do. multinational with enablement us They customer of ability with One seamless QX execution, insurance with

Target using us Engagement they of ecosystem Hub. experiences powered Now ONXX Elite, by are create and Breakouts, to a full

success selling multiproduct our seeing are similar with We customer deals base. existing

to Elite, would Hub of tracking education enterprise regain customers to connect they a with financial banking the of we analytics performance get them our drive one HR digital reporting clients. clients and any engage the robust the largest way channel and intelligence long-term believe needed benefit, of of banks. take their corporate multinational a employers, and set Another to an solution. Target one as ONXX Through provide with employees, an action to provide is value while their group combination that other HR of to Engagement their powerful corporate wellness Their of the the not a program employees back back and

the Next, on improving seen retention gross made have success investments dollar have the we from quarter-over-quarter. we signals customer positive with front,

customers great We program. revamped feedback have heard on onboarding our from also

revenue Lastly, number a our and QX partner-influenced to own from wanted patients a easier we doubled a to example win contribution to make strategy steady to more and see partner consolidate our their of engage and experience double-digits, partner execute. to for The partner is with An our providers opportunities execution ability QX They platform percentage engagement the biopharmaceutical deals to in has year-over-year. than team's with healthcare it continue added of crossed connected company. global digital of their pipeline streamline consistent, leading influenced onto ecosystem. one external

gave data and strategy In to confident turbulent, conclusion, integrator edge. I'm regional backdrop economic and integration in our with a competitive a opportunity. long-term the continue Viva partnership may market be deep Our system with us while

me excite a these our Even is ONXX. the new We with cycles managed and investments their our increasing product our number through enhancements products more are before and on customers for of have importantly, top traction future. grown

organizations under the more help to With deliver digital are solutions consolidate less, well a single we to platform onto positioned them with engagement. mounting pressure point for

I'm return more detail provide our factors, business that, it improved to will optimistic through outlook. XXXX over results in Steve Vattuone these an in to growth with I'll Given we QX you to model. hand walk that With and our CFO,

Steven Vattuone

Thank and to third QX XXXX. quarter the and start compared services revenue with good to This we'll other our decrease was provided you, quarter X% million, XX% X% representing were our year and of under revenue year-over-year in the $XX.X was and approximately is of I'm year afternoon, Professional a for outlook the decrease This $XX.X then in in was year-over-year. going revenue discuss quarter. full period. decrease line year. of of includes results a a of year expectations in overages, Subscription QX compared we XX% X% with which revenue representing to and the revenue everyone. year-over-year. X% this XXXX of Total $X.X decrease ago our last second total XX% Sharat, revenue platform quarter million, prior of second million, for of

an the commitments was longer quarters. see to prior Moving each of or and the experienced Ending the their on subscription pleased am $XXX,XXX our to $XXX.X our I two closed which and products the represents to to X% services Also, with of ARR ever. The threshold. at overages. approvals new continuing is multiyear ARR challenges, a business of over strong environment levels, we our for the value ARR in over higher ARR. customers record million, four of than and increase highest customer, we the professional with Despite contracts percentage the needed expectations. of XX% was of line with and more are all at year-over-year, any deal quarter period and end increasing annualized excludes from remains prior us agreements expansion cycles with these increase more in the multiyear ASP largest history. had sales a Customers macro challenging, for percentage quarter and the with in

total increased above and commercial We represents year ARR, Turning the logo a number logo of decrease $XXX,XXX is customer prior quarter to experienced roughly by lower X% contributing by in representing majority metrics, ended prior from accounts A consistent or sequential $XX,XXX our of the count, quarters. X% customers. X,XXX the of with more, at which ARR customer customer total customers acquisition quarter XXX contributing driven churn. last from We customers, SMB and of QX which year-over-year. was ARR to flat an increase with was vast

two-thirds consistent approximately decreased with of ARR total of previous XXX,XXX-plus the customers ARR. cohort and number sequentially, our quarter plus contribution from represents Although the was $XXX,XXX the customer

items I to results and would like forward. will to out be Before non-GAAP point turning profitability, discussing I going expense that

results other stock-based as include certain non-GAAP Our as well compensation items.

results, financial gross $XX.X four-point which be is within and with the year-over-year. results our representing a percentage a of a quarter margin found margin million, between the reconciliation GAAP gross in profit non-GAAP along GAAP was in release. Our XX%, Gross can decrease earnings

investing success retention. to We have year cloud in improved and our over past customer public the our infrastructure capabilities are grown drive teams

was This operating in last million to represents in last $XX.X XX% compared and expense same QX revenue to of year. expenses. total compared $XX.X the turning to Now, XX% in year. marketing period Sales million QX

relatively of are compared this investments tightening compared $X.X QX XX% and in in sales to environment. this last our And year. new in total year, to was million spending compared QX to targeted to spend, of our $X the expense the made expanded increases past the for year, marketing year. in represents to the million, same last platform. year, expense year. we million, have as We R&D products given $X.X spend XX% remainder our be brought QX over current last have past XX% this macroeconomic R&D revenue, compared represents G&A we in our the increased was QX any to we we of total year. functions go-to-market While This last same R&D period market and $X.X revenue, in XX% period expect in million This moderate.

using last diluted operating based This increases loss function with in being QX period $X.X margin and year shares in publicly matures, approximately was $X.XX G&A G&A $X.XX year percentage year. of income have diluted income due to XX of as costs million same the of operating share $X.X G&A million margin, Our have the this per increased XX.X QX an operating year outstanding. in revenue and approximately last traded share G&A past $X.X was million we compared to and QX expenses negative $X.X company. XX% per this -- net a X% scale associated million expense of expect Net or expense to overtime. on loss and moderated sequentially for outstanding. shares a or Operating or million our to diluted basic decrease as compares a million

Turning flow, sheet to ended quarter cash, and securities. we balance million cash the equivalents with the in $XXX.X marketable cash and

capital advantageous uncertain Our a position duration. macroeconomic is environment challenging in of

be maximizing it with with will our disciplined nimble capital. investments, every believe will focus and approach organic decision-making a we be to and in also our of allow inorganic regard to We shareholders' our us on in dollar

year. $XX.XX cash QX, at and last flow from in our operations use $X.X to was Free repurchased $X.X million compared cash QX, quarter, in $X.X QX used $X.X QX in positive year. operations QX in utilizing negative weighted of QX last cash compared X% compared in positive $X.X negative to shares million cash to to flow was margin of XX% year. the of million Turning share average a In cash last Free QX was in in we XXX,XXX million flow in per million. price

As utilized of under the the authorized of repurchase was program $XX million share the remaining $XX end we of program. have repurchase million share out $XX million the QX, under

observation. to half will believe and get high XX% year-over-year. with growing XXXX, back off our in we to like we an our revenue of XXX% QX XXXX platform rapid continue providing explosive experienced growth, growth In experience outlook, growing first such year-over-year, growth, Before Coming in I'd we ARR make to growth our the we XXXX.

operating reducing Now time, turning our for reiterating loss non-GAAP guidance our and guidance. improving to At guidance, are annual we we mentioned, structure XXXX are revenue same Sharat XXXX. as the cost

double to low For the range decline of percentage revenue revenue, our that percentage to on context more guidance our of percentage as services mid-XXs. revenue, a low to full is would services million. by low additional XXXX, year, representing a current million to in guidance. Professional and revenue driven revenue, year, to be I is our be largely year-over-year of digits our we a our professional some double expect this total to the like electing self-service. provide of to $XXX expected XX% of of revenue revenue was customers In for as which digits total is $XXX decrease

addition, added call contracts discussed year at In lower fewer thus as the into ensure this we on more overages March, time trending overages. as customers their are and renewal of have capacity in our

an greater While we approximately volatile; remains macroeconomic may part rate neither these for X% see sales of in and deals. cycles our full that deal ARR. revenue to longer are items continue of Both environment we items Global of headwind our these and acted XXXX. larger growth scrutiny year believe for

to backdrop, the it's ARR roughly prudent half the for be will assume this flat that believe net additions we year. Given of second

compensation non-GAAP share $X.XX XXXX $XX.X to to million the annual expect range diluted variable include other and million and share, of using $X.XX by in our bottom offset line net loss of a cost impact operating previous a of basic outstanding. These our costs. XX.X shares the per on the of million activity, impact non-GAAP reduction loss estimates per improving We inflation are partially $XX.X and guidance and

where this X% this Our to end by the will of reduction in QX. year. our implemented substantially headcount stood mid-QX quarter of in headcount activity compared cost included reduction we reduction The be

in QX, to million. total of is a to XX% Professional percentage to approximately the For to of XX% mid-teens. represent $XX range revenue, representing in million revenue year-over-year total services expected expect the low we decline $XX

of non-GAAP share XX.X and a loss range to $X shares basic share expect the We loss per in $X.XX $X.XX based of non-GAAP operating million per net a $X diluted million and million to on outstanding.

an expect We to are $X is $X our growth ability to to believe this amounts we in to we period, million macro excluded provided a we line confident charge flow related restructuring through profile. charge of non-GAAP XXXX reduction from million plan. to with the conclusion, This navigate improved above. In and cost cash well-positioned volatile in our top are restructuring return

We overages William and from you. We’ll will Arjun also for services and questions. Operator? Blair. Bhatia question [Operator next call Please started our open from with lap ahead. take Thank year. the I up With early Instructions] difficult first comparables Sharat will that, the go

Arjun Bhatia

Thanks guys. the question. for Thanks taking

this macro some opportunities? where the the the on environment? and macro is still where bit rationalization little And and SMB weakness there Just achievable seeing you ARR about that expansion you're of a of plus Steve, light that's where is then industry churn of terms you're where in you're growth, seeing from for still talk think perspective, uncertainty strength more an in can seeing you front, in flat do versus

Sharat Sharan

jump and let take that, Steven me can Arjun, in.

was your think first question I macro.

take that me so first. And let

some we've are uncertainty. about, seeing As macro talked we

Arjun, know, through managed as we've you Now this, before.

number pivoted in a more in with to the We history, are with top seeing this, we a the so customers customer we a talked ONXX. deals our increasing learning with a our of deal started when of high things And closed and technology QX, deal investments platform. our their base about, we one multiyear largest seven-figure

the financial quarters. logo spend. logo a was we we view, by where business some saw ASP the was continued. point EMEA, challenges we than lengthen because side, large another four XX% At We their headwinds our life in of sales greater in customer, commercial in -- last for doubled large the saw was $XXX,XXX. they time, the highest cycles Where same saw sciences We the acquiring From also in commercial services were challenging. and saw ARR space a challenges -- deals consolidate to in and six-figure okay, We and demand new little to I consolidate but platform solutions an manufacturing. others. allow and marketing customers generation we company, mean generation saw them of cost-effective in their remarks, a and that we saw talked to where example that in one field technology what marketing, also overall that I challenges vendor. provide our ONXX, et we And insurance EMEA. we that are where prepared the ROI especially cetera. demand customer And partner, bringing kind sales in saw eager about deal partner, as together multiyear vertical engagement

Now second start kind Steve that, and me in. question, on ARR, of can your jump let

We being more generally challenging. QX the is second about prudent half. are

a it's base little reduced because some softer, I a work our seeing based -- think we on the But that of visibility. in installed are we QX, have from that's So seasonally and is deliver we seasonally that. softer. should that an be also to able we Again, making view are on expansion point churn, QX believe some of that we the of progress

Steven Vattuone

jump saying. Yes, Sharat I add just to and in if what was on could

is that had more and in the quarter. revenue wins -- our is the base. out the we or visibility of the our were we two the QX, QX a current near-term be of of First And of are pleased the of percentage the our all, we percentage end with this little mentioned. have able in than to are ever, our of deals environment. for multiyear seeing guidance gave bit do in good as results is some customers while market, of with installed annual highest better some And lower we Sharat weakness we reiterate And products QX, Sharat impressive to terms in the highest seeing ever.

our at half challenging deliver least even second that in to the in So ability, in ARR relatively us of year. flat environment confidence this the gives

Arjun Bhatia

And know Got profitability. Okay. steps -- That's it. taking here some very helpful. I you're then improve to

little We to how we story? cost sustained you're a marketing about profitability? to should time that have think which of Is XXXX reduction that the dynamic? and a and like of bit a being more still prudent with spend. line It the Is restructuring. get But long-term plan, sounds sales out more further you the

Sharat Sharan

Yes.

Let me ahead that go take and one.

we're we our to bottom-line improved are adjusting So, to XXXX. And into structure costs happy cost going our provide lower guidance.

be and full But of As improved we to going mentioned, model. we reductions we bottom drive to as won't into future see return our bottom an make did always to line. reduce going and our goal the adjustments structure We bottom expecting we're shows we'll we headcount growth cost with the as by improved to improving in cost to and with in improved do see QX. spending always balancing in in X% improve we look look to to impact here. XXXX, XXXX growth cost XXXX our that really we performance monitor our an And for We're line until is mid-QX. improved profile. as need We're line business an growth continue the profitability have an

Arjun Bhatia

All the right. got for Thanks it. taking question.

Operator

from next our take Scott Needham. Berg question We'll with

Scott Berg

the think Yeah, spoken ones just those about couple about you've or couple talked in thanks. question. Hi, addition I being Sharat. a here. I to about you that here. Should last separate the couple Thanks as taking Sharat, a the we the some in quarter. of quarters? guess guess for rationalizations

Sharat Sharan

we customers. discussed which I in QX, from think, pretty really customers, handful from a we Scott, where saw down-sell rationalization impacted significant those what the particular of

new are is the we we saw cycles -- that deals talking we $XXX,XXX. – about that mentor in really the are sales I what large over think rationalizations business,

just that's of of a cycle. lengthening kind So sales the

base, the think -- this from saw we overall didn't saw with or rationalization I really quarter. issues down-sell we our installed

have the under a saw lot doubled I that those examples investment we our think are gave – of I really ONXX, increased the down, of we large a customers that you. number really What control.

saw continue we we from on also. side. I our getting of And progress into going levels. increase performance expect back line think on to the levels XXXX. pre-COVID feel I some to of strong expansion sight the we side, Also is that prospect churn made to churn QX we've got to

Scott Berg

helpful. about That's it. the wanted just And Got growth next opportunity for I then to talk year.

But here are you that if you ARR flat my expect we in being think would You to half revenue flattish year. ended the commented where tell the me quarter, second in math return about revenues to I QX subscription different or and up your visibility year, your about probably that next guess, versus probably both guess guidance year. assumes think growth is bit should that how I we QX to positive in or ARR a so next about little next confidence bookings to than Thank opportunity what some return which growth? Because your entering is? you. second

Sharat Sharan

Yes.

growth. me is things that year. are we second XXXX why guiding we growth are right of our on all, the provide looking growth, at is of flattish we of are first in now that's how half the ARR because doing QX visibility Scott, context So limited, let you for the one towards But

of into down retention XXXX And we that. three gross to time. over components retention, and to break it down Like net most core growth it to levels in pre-corporate me and all, first return companies, business. to between So build new we expect break let

of to the QX. we buying customers course are retention we pre-pandemic more sight we talked back in is two products, more retention are progress. expansion, we've side, our got buying due time. it better, on Net our is in better of customers ever get line levels or have I products. which And more highest our we of next to had The thing believe this we the about, making percentage retention, year. expect a gross QX and strong result products of was So, and

going retention. we net progress to believe make on So we are to continue

is we business the and the be provide revenue through to data platform, companies insights. but where and macro first-party engagement macro, New efficient will an an way drive for effective

some have impact I yes, that. as it, look But starting flattish will ARR, ARR next will in think quarters and a QX that making that have early we impact. an I the start will year, after with So at we believe progress maybe in

Steven Vattuone

like was And for out, And in low total digits. double addition other that be I'd to the thing our saying, point service in this to our XX% one what Sharat revenue of year, to in was XXXX, revenue.

is overages, that gone had well. this that entering year a addition, -- in bit I'm and of gone as headwind sorry, headwind as headwind next be a be year will a bit that from So we And those of from this will headwind and XXXX. year-over-year year a normalized largely

Scott Berg

very helpful. my questions Great, for Thanks everyone. taking

Operator

We'll Noah now with next JPMorgan. question our from Herman take

Noah Herman

my guys. questions. Hi taking for Thanks

So just deteriorating you we should standpoint the about, And forward, or the the how you then any guidance assuming the much lean going will provided, here? from maybe direct more motion, channel? Thanks. partner into given environment of are macro how kind versus network sales from think the

Sharat Sharan

Yes.

No, first I was think So your sales direct versus partner. question

a tell I'll the environment about me So little let little more. a then you macro -- and come to

channel of top priorities. So -- partner our the is one

double many for quarters, to digits the bring of from priorities. -- that highest clearly new for partner digits. that force the we've double-digit and still are our channel many close we're part that been and In direct last building is able partner for But focus to of commercial single influenced our business on levels who've segments. been one we call the to our closed top literally four enterprise to mainly business QX, close came low ever is We you and it on our the

on kind partner our So get has partners of in we And integrators. influence over we it to that one system XX% technology are well goal time. regional focus good. so The has And pipeline strategic and been year, partners, also agencies, three is over doing there. doubled

So for I on motion, part, to, our believe direct we significant the network side. going are still most traction we but partner that on the focus little are

macro deteriorating Now potentially. about environment and macro talking environment

how mention to some just our think -- IPO, through manage and things mean, second to is through why I in I recession, I what is. So and was the mean before the one economic your come to our the to and cycles talk about the we such provide perspective, in and times want see ago especially looking right it cost-effective front that last have managed know do a people have time product well though, That's we and visibility we that companies generally a technology, because the we prior financial we pharmaceutical, to verticals, was solutions try But way smaller which believe now, to with engage to times, them. you I half. up of see company. less. have times, done across a In performed in perfect prospects it, for are as that way, were to and them more we customers ONXX We we for uncertain convert the the their want services. well. But with we

Noah Herman

Thank it. much. Got you so

Operator

Sandler. from now Mauro our Thank to question you. Molina next on move with We'll Piper

Mauro Molina

Hi, this is Mauro.

Just jumping on questions. for our Thanks Brett for here. taking

Just two from us really.

QX. challenges on here there So reporting if to Obviously, double can. I we just some kind we've click of a in seeing wanted of seen lot companies EMEA,

to we in then regards speak year to we manufacturing that on customer can the verticals impact you with particular about? that mentioned think thinking certain in any regarding And as I sizes should thinking anything be guide follow-on the specifically challenges be or past. to full should that, about? a there, you FX So from maybe

Steven Vattuone

Yeah.

is Let Steve. me -- this

our me then and bit landed EMEA environment and FX And I'll let ahead Let a where talk the general about then question the take EMEA. I'll expectations. Sharat market about go in little I'll we on talk relative to

the in quarter. expected was of of decline EMEA was QX, we what line QX was to from this revenue, our XX% in quarter, things was of the guidance see it about the world year-over-year which percentage We So points revenue particular. with XX%, then we In the XX% was with drop XXXX, and a state In of it couple we suggested in set we headwinds of our year revenue. this EMEA EMEA our given it how call, as is of in came a last -- had macro expected XX%. guided. accordance expected to about in we EMEA, EMEA which revenue in the in thought our was that about we last some expectations where In

dollars. was in the Now majority in billed of revenue our terms US of vast FX,

to top of FX limited line XX% was was months impact XXXX on So in our the the of first of in six our currencies. revenue foreign

but some bit in limited. incorporated any So a FX we which seeing our And impact, little it was impact, has is are some been guidance.

Sharat Sharan

also a said deals. which is of of Let give from manufacturing, look there threshold what course, vertical view, point you I challenged. still is Mauro, on and the the But on Steve me just thing sorry, it add little at core of view point more qualitative of vertical From EMEA. a of a

above. continued We sales $XXX,XXX cycles deals are and elongated and that

that, We good even have some wins we see did there. continue to though

a categories board, are the commercial sciences more we challenged. did performance also these think like be continue because in business little and in EMEA. that saw We but private see a life the But I pharmaceuticals. of lot tends to good across also companies

that hopefully, helps. So

Mauro Molina

from And us. Yes, that. just absolutely. Thank one you for then more

getting think sort ideal side? how the SMB on that customer I size a want customer SMB to little customer what the isn't smaller of And it? a to would the to about your of of that past the business that, certain talked you in you've ideal as targeting, cohort kind in of close is profile kind a SMB maybe mix overall really of you you're are that bit where that follow base? on And the

Sharat Sharan

SMB look somewhere XX the commercial got got cohort our SMB we've revenue. there. that So kind XXX, I employees. the the employees when We've something got under and X,XXX to business of That's SMB at to you be cohort. overall, X,XXX look And if the around core above. enterprise But segments. up is about think the XX% of tightens the -- you three about around has We've business

point third the So about or of -- even a but maybe may more from a logo about logos be view, others.

So to also logo But back and your environments. ARR show sales ARR an especially we ecosystem. these some in me generally agenda, marketers, from data-driven of who have marketing point go But integrated because really let in love Even a the the our it question we does about in logo company it view, people well think sized. data-driven more churn I we pretty is see ideal over SMB, churn, profile. of challenges have two-thirds customer challenges, a in But in SMB. from

engagement platform is provides fingertips marketing the So and the and in for sales the at all people -- the first-party data is through that insights our deep integrations.

your So if see churn lower in you're there. and integrating an are company, you much, much platform, we SMB

a So trying or really of part integrate cases that us. pipeline marketing your if that you're area ecosystem. for drive of a some continues use sales and core That's to our in key the to focus of be qualifier, good you and

So hopefully, that helps.

Mauro Molina

you very Thank Absolutely. much.

Operator

turn additional would queue, Thank in you. like And remarks. or for over now with no to to the any Mr. Sharan I additional conference questions the closing

Sharat Sharan

you. Thank

today, products, top platform ONXX. effectively. positioned increasing today's experienced of efficiently number In is growth their heard the our drive with economic you investments As are to insights portfolio a with customers and well data our customers our ONXX revenue first-party of for and environment,

a an call us And made adjustments with our current model. have we progress the of the for Thank I'm improved our to this priorities business today. being to the structure will challenging confident everyone, on from cost have top and We cycle. record line proven on through and we stage stronger growth cycles, to in track XXXX you, return navigating our emerge for sets

Operator

that do conference. all Thank you does thank for your today's And you. We conclude participation.

You may now disconnect.

ON24 (ONTF) 10 Aug 222022 Q2 Earnings call transcript