Earnings call transcript Q3 2022

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Operator

Good day, and welcome to today's ON24, Incorporated Third Quarter Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Ms. Lori Barker. Please go ahead, ma'am.

Lori Barker

you. Thank afternoon, good everyone. and Hello, to quarter earnings call. third Welcome XXXX conference ONXX's

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

would we this full and fiscal quarter during include financial like Before including will I to everyone for information call future that regarding statements and guidance year remind forward-looking performance, XXXX. provided some events fourth begin, the

statements any to expectations release ONXX are subject our cause results are known unknown cautions factors to performance. that that uncertainties. forward-looking events obligation the reflect these that to we for Please guarantees actual These made from any differ Company's forward-looking statements statement no periodic and reflect refer All press not risks and forward-looking update future call. SEC only the financial statements. of today and undertake to statements occur our and could after to materially filings this today's current

to in see a financial are to with measures addition measures refer to ongoing on We use out like and planning results. accordance please financial the to release. measures, To calculated measures We'd not that for press financial GAAP. reconciliations in non-GAAP of Non-GAAP and financial non-GAAP we non-GAAP our for purposes. as evaluate today's will presented both and internal and these also point substitute operations report GAAP forecasting call, these financial today's

call over turn Sharat. the will I now to

Sharat Sharan

financial conference joining us. Thank you, to you appreciate and call. We quarter welcome third results everyone ONXX's XXXX

topline ONXX executive QX focus discuss results, breakeven of new will QX of introduce on growth the call, XXXX. sight line our I by to today's On and with profitability two review returning to our team members

products of our like organizations is that who BXB is to platform you ONXX platform six to a personalized organizations. leading generate experiences that sales systems that use and are together and and of to to fueling to provide a how set that create right unified and are customer to business work would platform organizations enables the engagement, insights digital new those deep growth. so pipeline data share revenue BXB deliver growth revenue marketing industry who with and drive for of for we quickly live, our I can take ONXX, First, always-on engagement actions first-party integrate

product recognized consists base member ONXX partner customer platform of enrollment that generation, Our serve thousands communications, uniquely and powering cases use and demand a world's organizations. engagement, positioned is most healthcare the one-stop-shop for and span largest marketing, of live as digital certification. to go-to-market customer enablement, The

onto consolidating set can with drive By our operations, and customer gain intelligence insights. integrated platform, a our more streamline cost, of actionable customers at growth lower an

TAM very to accelerate continues channels. and We move large and long-term as the expect tailwinds sales to marketing to have a see digital

turning Now, QX results. to

reported quarter, $X across loss containment from within was of than customers million the third of Engagement the $X.X demonstrating revenue experiences levels Professional the spending our was and record Services million platform organization. operating our million. $X.X and at better time efficiencies other non-GAAP $X the million. we Subscription to cost interaction audiences platform. more drove attendee we more tight continue having value per derive as and on with $XX.X our was to posted For a $XX.X and We meaningfully million guidance total platform million, of revenue revenue our

decrease sequential $X.X when of Ending million or was currency. $XXX.X $X.X of the impact million, net representing ARR million, ARR a excluding foreign

managed-service product has is ARR Conference Virtual the a product. case impacted large-scale multi-day, Our digital This been our performance conferences. of specific for solution use adversely high-production by

several a and core product for Xx that our quarters. more are rate we the Conference Virtual than return of experienced our have than is greater the past seeing this With events, churn demand product large-scale, for in-person products less over

has two to XXXX. ARR an revenue This and to three approximate our in point headwind growth created

and end Conference mid-single our impact of currency, product core essentially been represent as We expect the it part XXXX. current quarter-over-quarter. of conference was ARR grew excluding virtual at excluding business platform ARR flat year percentage ARR, of normalization core Conference macro-headwinds. be digits expected digits product in year-over-year When of and, a Virtual this foreign is in-spite our in our the of post-COVID a has and not it to stable, to the and Virtual single The low that sense,

quarter these facing of greater to scrutiny go Offsetting strong QX our resulting is in many more become into in continued budgets in see customer detail which companies deal shortly. expansions particularly third tighter The trends customers headwinds, which and Europe. we macro in some challenging the I’ll did more from

we priorities Olkowski has joined focus as added return bench senior maximizing honing go-to-market our improving have adoption to of reimagining topline execution our focused bolstering and and driving strategic and our experience. Officer our as is platform, our and Jason include platform the Callan to evolving customer Young growth within deepened two to our As path we on Customer key ONXX verticals. leaders demand and on Chief team. Callan Success Marketing function, retention, generation Jason's strategy positioning, Officer. our Chief

business increasing new and discuss to by let our net drive Now, accelerating retention me topline expansion, improving plan with acquisition. retention, growth gross customer

success adoption are to cohorts our improve customer platform we education. retention new XXXX. in-product stabilize supporting in are focused now our through intently and customer better onboarding renewal With expect on and place, for leadership First, seeing in gross we

systems, and impact higher for with are driving on marketing proactive have health initiatives with to automation focus increasing We our key lever retention. of a proven the integrations number also who a customer CRM customers

comprised mentioned As several spanning largest have some base earlier, of enterprises verticals. of a customer the we I world’s

expanding the of motion cross-selling use and driven and new new expansion by is products Our primarily existing our departments. into

our their us products and enterprise-wide and single engagement from portfolio using a and power experience our first-party more engagement start have Once their provide product from one unified first-party to generated and to data have and tech with adopt the it’s uniquely cases. data platform our of industry customers ONXX Our marketing platform. easier integrated generated stack, to initiatives customers mission-critical our and positions platform expertise digital with sales use

As the drive of strategic of the highest will retention rate to macro to was in vendor, net and with products newest and close within attach accelerate our customers efficiency evolves improve we with our a growth products consolidate base. ever. which two percentage rate organizations our expect to more QX XXXX, looking or the The to install environment

expansions Let and our multi-product me demonstrate QX that we how platform with are of strategy few one provide further winning a the portfolio.

ONXX costly thought but leadership was a firms more events one experiences targeted engage wanted scale. First, smaller American and to been has long-time audiences to product and already This customer. Elite to impossible the build awareness, that using of and advisor customer’s investment ONXX in-person marketing were top with replace team

In Forums ONXX customer QX, and Target. this added

education virtual they through clients their Now, provide can high-value experiences. hours can personalized matter subject their deepen live office direct experts and content clients access with to

past our Over years, Xx. business by expanded the four customer we’ve with this approximately

seeing retention needed are vertical their within not-for-profit expansion expanded to healthcare the six-figure strategy we a the where of Medicare digital-first. largest at provider member transform with to and be healthcare division enrollment they one Next, traction We into their insurers.

expanded their initial provided purchase an and With since highly and Elite a of more way. educate than in their senior interactive This our accessible, efficient members by Xx Hub, ONXX power to back data-driven way has in Engagement the platform XXXX. and now reach customer

business our efforts. to new Turning

with new focused the backdrop business upper of sciences challenging information We new healthcare, services, on more for verticals are scrutiny. these services third we services. and manufacturing, logos some macro-environment key technology, impressive mid-market most and life Despite quarter. is enterprise challenges, the greater companies and landed financial professional in in The budget

One six-figure win multinational at example is a medical manufacturer. a device

third their management that stack CRM complement and them tech digital engagement a go-to-market part customer digital-first in platform, and their and the consolidate This As learning a our led experience. multiple needed and power pillar replace management ONXX company solutions onto systems, their larger first-party adopting of Forums to and Engagement content knew Hub. tools point all improve to Elite, initiative, collaboration they

a distribution comprehensive driven we Another from leading competitor and this notable healthcare our platform. by deeply digital win comes six-figure Asia-based where beat quarter engagement company out a integrated

of continuous expands platform this one multiple enter on markets. new company ONXX our selected to As provide they Asia, Elite because as ability countries across scale and support they

critical rapid streamline easily view have to the integration data up their and operational healthcare their and expansion keep initial their place of CRM. ONXX teams from it between for single them for can Using more infrastructure set adding the and professional With plans, platform, they all a was engagement once, flowing one clients. ONXX the their more

experience products. ONXX out need ONXX integrated Moving product and ONXX digital roadmap Webcast innovation drive year, Forums, ONXX on we platform Elite, platform built for continues Engagement today. have past Go This Hub, a to our to Target fully strategy. self-service our to ONXX enterprise-wide six, product of a support engagement Customers’ and Breakouts, ONXX platform Live.

by an to sales set recommendation engine single to robust of integration and and use connect All a all of systems. are powered these marketing a third-party analytics, AI-driven products they content

our scale, more This We are experiences adding our ONXX recommendation our more audience. continuing and further by building enables single for ecosystem platform intelligent integrations personalize data a content to their dynamically digital our advantage their AI-driven and to customers strengthen at developing engine. higher-performing journey to

revenue more to growth, and broaden engagement, our address add drive first-party that will expect customers cases. sales use to and We additional through all and more This one marketing deliver platform data new products generate more experience our enable platform. even

targeted organization. sales While efficiencies, optimizing we focus cost make functions within to the continue QX, making investments, reductions we and we additional in and will tightening allocation across and marketing particularly driving resource are our are where

our we in topline margin ahead bottom of previous to with are guidance. you call. well sight believe more profitability operating a and We of scenarios, few improving QX earnings a performance line give QX by on demonstrated of guidance the when our have range breakeven Under to will line discusses results XXXX. he committed we’ll that we share our as more Steve details reach our QX

a In key conclusion, few like summarize to points. I’d

cost-effectively First, generation BXB and marketing the sales, use pipeline digital the marketing, of we growth companies the platforms to spend. across and as mission-critical increasingly enterprise. and important is their are in macro look drive environment and revenue one sales efficiency that powers This for engagement of maximize cost-effective current the cases pipeline leading

ourselves economic innings large industry early leadership and the a are market we remains success. in uncertain, the outlook while positioning long-term of Second, opportunity and for very

platform of QX driving line by we on to is have core focus of our sight profitability XXXX. growth deliver Third, breakeven and

strong executive with us two to leaders. $XXX finally, platform continue strengthened improve our have enables and drive execution bench a over in and share. which core invest We to And cash we in our and our customer penetration investments and with market have balance sheet new million

products focused durable more by platform, growth. use capturing cases efficient We driving adding and to and are on our our more TAM of while

Now, I’ll to it turn over Steve.

Steven Vattuone

going to quarter XXXX outlook with discuss I’m for everyone. Sharat, our afternoon, you, start our fourth Thank will then XXXX. and quarter good the results and third full-year and

of million, to the revenue which total platform this X% $XX.X other and Subscription of year, third was in were prior quarter revenue of includes decrease compared Total for revenue a X% in of QX a was year-over-year. X% year. overages, total X% representing decrease This of approximately revenue year-over-year. QX of $XX.X million, over the

X% a Professional $X.X compared million, of year-over-year, approximately in revenue of total XX% Services to was XX% decrease year-ago period. revenue and the representing

be are with current more customers to services macroeconomic facing self-service backdrop. We as in headwinds the professional elect

of a ARR the overages. million the decrease excludes contracts the subscription at QX. Ending and represents of annualized ARR Moving ARR. and million, and on of period all X% $X.X value from was decrease Services of a sequential $XXX.X Professional year-over-year, end to

in Excluding the QX. it decrease was QX, currency fluctuation foreign from $X.X a million of of impact

of XXXX expect to height percentage the product As The in than of than and overall ARR. contribution for Conference headwinds of it of XXXX, end of mid-single-digit Sharat By XXXX. and our this rate increased product Conference mid-single contribution, the to experiencing COVID. mentioned, ARR ARR expect expected end our XXXX products. in digit demand its Virtual we approximately XX% are the is be With we from seeing in a of Conference we ending contributed less product at higher Virtual to at core churn lessen lower the a Virtual percentage

resulted $X.X to Conference a product in reduction Virtual ARR The our in million QX.

revenue full-year, For to a has acted headwind it the and three as two ARR our point growth. to

would Excluding QX, QX currency Virtual the product, foreign digits from and ARR low-single of grown been flat have Conference and impact to year-over-year. essentially have would

total the our the the customers number to XXX in $XXX,XXX was continues to The XXX, QX, highest more The metrics. and from cohort ARR up to of with Turning our per totaled prior ever. than consistent is customer $XXXK+ from approximately customer of customer ARR, which ARR contributing quarter. represent ARR in average two-thirds contribution close

Total compared slower a year. QX customer given last business to count was X,XXX X,XXX to in decline customers new environment. experienced the QX compared sequential We

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

compensation, charges, items. stock-based exclude results well as non-GAAP restructuring Our other as certain

Our a and GAAP results, GAAP financial results, found with between within non-GAAP reconciliation release. earnings our can along be

a Gross two a profit million, $XX.X in gross year. decrease point the margin year-over of representing which quarter is was XX%,

have the drive retention Over our improved year, in teams success and been infrastructure customer experience. capabilities grown we have to past and public investing cloud customer our

QX. to XX% turning XX% to the due year marketing Now, QX QX million the of in compared expenses. savings to compared cost represents quarter and $XX.X operating $XX.X million revenue, period last last expense was measures in total the Sales largely to and XX% in prior same year. in in implemented This

we the the year. last products this compared total past guidance year remainder in and with same brought quarter. spend represents R&D We year was $X.X XX% for last our in increased moderate XX% and of year. our QX from increases market This compared R&D expense last R&D revenue, have spending is This in expanded to in the to past the throughout platform. as relatively $X.X new of million XX% period to QX consistent million

compared expense of XX% with compared period G&A $X.X year, to XX% represents quarter. million last to in in consistent XX% last same year. million and was This the the total of in QX revenue, revenue last QX $X.X

as being part costs this company, broader our a due moderate cost costs. increased G&A actions have to G&A our associated year our we have taken While measures to expenses of traded publicly past with containment the

of $X.X the improvement operating and same operating margin loss X% This meaningful cost was operating or QX last we our QX improve for to compared was $X.X margin structure. to as from guidance million period loss negative ahead QX million Operating a a X% a an year. well of negative in moved our and

based and diluted share Net diluted and loss in QX approximately net outstanding. million on basic XX.X million shares to or compares million year, was million XX.X QX $X.X per basic using per outstanding. shares a $X.XX $X.X of $X.XX This share loss diluted in approximately or last

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

current to quarter. this Our the the current to and strong the us active to we authorization, in while ability market the under providing affords balance sheet expect us ability navigate shares be the market repurchase

believe most Additionally, it gives us investments inorganic maximize attractive the flexibility to will organic shareholder value. and pursue we that the

operations our $X.X in in to was year. in cash negative Cash Free cash million in use Turning $X.X to to margin of compared to QX was X% quarter. year. the compared used QX compared million used year. in operations negative QX $X.X million in in negative was last million cash of cash X% in in negative Free $X.X last flow flow last QX QX QX

guidance. Now, turning to

we our mentioned, opportunity. Sharat As are optimistic growth long-term about

in of customers. and a scrutiny operating uncertainty we are However, period from greater budget macro

more to be and our as headwinds services continue from customers of we Professional their use self-service of reduce increased Services. see addition, In to elect

side, are our platform Conference seeing driving from we Virtual as core our discussed, on and product focus the platform is growth. ARR headwinds On

Services $XX.X For is is range percentage revenue. previous approximately representing for in QX, we to XX% revenue expectations which million. the X% mid-XXs, Professional QX million to Professional expected the to Services expect year-over-year below total represent of $XX.X in decline total a our revenue, of

platform Over and services impact launching over believe the next drive new data positively few we time. services months, should offerings we that are which revenue higher adoption,

to foreign into saw the incorporating our Conference This QX terms Virtual headwinds currency what be ARR, product similar is in of impacts performance to and guidance. QX. which we our are revenue, In incorporated our revenue platform we expect QX of from our

Conference currency expect Excluding from levels. impact Virtual QX the in be to product, slightly and down we ARR foreign QX

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

bottom cost further taken cost to out QX additional in well updated cost plan, reduction which includes taking our our Our actions in reductions reduce guidance the line are meaningful we carried structure. actions already QX, as under reflects as

Our align cost function environment. all to and actions focused company, in reduction go-to-market the were but better with the that QX QX on of areas demand current spanned primarily both the

in we to lower decline in margins our addition, in gross which In we guidance. QX, anticipate expect reflected revenue is as modest relative QX a QX, in our

restructuring above. non-GAAP our the expect is a amounts million charge reduction million We excluded of charge $X.X to $X plan. This provided to restructuring from related cost

For decline total $XXX previous the revenue compared of expect drag approximately on headwinds low-double from Virtual to our revenue, of total revenue expectation a total year. expected three Services a the be $XXX million digits. our The Conference we represents represents XX% million. the product full-year. revenue to range approximately growth is in low-XXs full-year, of Professional year-over of our to This for point

our improving previous share non-GAAP non-GAAP in basic per of using range per loss loss diluted annually, allow enter a per million run and approximately guidance and share us we $XX.X $XX.X a line and the will to or now meaningfully million net of are outstanding. basis, share million million, We expect full-year rate which exited spend to structure. QX by operating we per an bottom a to XXXX XX.X $X.XX XXXX where improved able reduce XXXX $X On have shares cost to our with been compared million $XX $X.XX quarter, to

provide earnings macro expect call. that topline reach for a we believe guidance on be in Under uncertainty, XXXX, to our by fiscal breakeven current XXXX second return of we environment line our to to have XXXX. non-GAAP XXXX. to would during of EPS growth we QX outlook the We the Given range and sight half of our revenue plan for QX scenarios

questions. Operator? will Sharat open With and for up that, the I call

Operator

from the question Instructions] from will Thank Oliver take Rob We [Operator you, Baird. first sir.

Your ahead. Please line is open. go

Rob Oliver

Great. guys me Can okay? hear you

Sharat Sharan

Hey, Rob.

Rob Oliver

from and Hey. those the the headwinds, a more marketing confidence and Hi, and having Appreciate Sharat, sales half XXXX Steve. that about I'd for the my discussions love macro relative and now, when for I Thanks little of Sharat. Hi, to XX questions. the hear pressure right, puts on coming in obviously the back right it. over to you're around months, next bit macro for taking renewal think you particularly budgets. are up renewal takes

constraints, you travel you to about might some the consolidation, starting benefit from. a leader hand, of a as guys we're tremendously which to be other On in vendor mean, prior I course some hear and which benefit guys position

hearing So you're just you growth understand, of half being and able gives in the the of to wanted quick what that then I to from back guys next year? And customers revenue follow-up? a what had to confidence return

Sharat Sharan

Yes.

we we and net that we look our new all normalized, view retention, Rob, look of of talked of COVID once. one gross So have going year renewed have next business. is into point our at And at the business, cohorts the from things least retention of as that about the have at cohorts

feel a cohort, integration. sales pipeline a a of drive cohorts integrated cohort about and that kind that growth, better as way we to better growth About so customers of so of and that really cohort. our kind a two-thirds good doing that on is also job mission-critical really And are using

retention year will So into our we believe this improve from that year. next gross

We year. this in expect be of the the year to best one QX

part. first So the that's

installed play with point do good we the base we QX. the in view. will products also to part, next QX, especially from upsell get within I to of that expect as our them I net with into well job did believe new our mature, well And in new mean, do year. on expansion an more Secondly, a continue and product, retention

expansion stronger and growth, better upsell. So

macro. of upper mid-market. to being the will the more That focus business On kind execution enterprise have sales that depend upon aligned the said, our a lot on side we new and

verticalization With the and CMO, our new addition of we also are the of kind enhancing go-to-market.

next improving will That's business. and there retention, yes, headwinds into new on but are year. very we gross net there, us some retention what be So confidence gives focused

as growth The more other generate that pipeline increasingly and of lot more. is one allow product customers products, looking going stretch more more of their to thing happen and kind us allow that is – a effectively also they are consolidate and our our dollars we seeing in more And revenue are cost them offering, and they important become to too. to

Rob Oliver

Great.

you. for Okay. you. Thank That's then one Sharat. follow-up helpful, And just Steve, quick

for think management the I some expense guys. detailed, of of sources You you

kind on I that so of management expense one focused? with called the like, the you could side, Is I some and about sales maybe being guys more the you much. you still then of sales side out on enterprise wondering, other Thanks mid-market? is tap and And it just lower not think that where end are you guys the that's sources can talk into? of assume

Steven Vattuone

Yes, Rob.

extent largely of headwinds. come we commercial actually our And So we're of what that's we're commercial business, and environment. more cost there SMB the bulk out around, really to the business, it did the work seeing the seeing align our macro some where structure better out in the of to

span that, all it mentioned, did In addition as of to the company. areas I

on So as up functions. board that's the guidance basis. we annual reduced a structure the we're across the $XX And we annual reflected million that increase to kind of guide meaningfully bit, cost line And on bottom We've a provided. our quite result. all an the able in in tightened

One was us what XXXX to confidence what earlier Sharat return growth. other thing saying on I wanted to, and about to to gives add

some as in to We going year. are year, next the mentioned which are this we abate having headwinds remarks, prepared

headwind year this points about got year four the we probably anticipate and next or three point or a are point overages on as product Conference of on next we're on a to services, points eight year fighting progresses. a on that about We've going that have largely Point point the got going FX. and Virtual against is year. overages which think – We normalize two two about

Rob Oliver

Great.

guys. appreciate Thanks that helpful I color. Okay.

Operator

from will Arjun question Bhatia William next We take from Blair. the

Your line is open. Please ahead. go

Faith Brunner

you Can okay? guys hear on It's for Hi. Arjun. me, Faith

Sharat Sharan

Yes. your Hi. name? Could repeat you

Faith Brunner

Arjun. Faith It's on Beautiful. for

perspective. Can your as just about you that a ROI think events, continue? a macro the Do thinking outlook take how you to you to on that virtual wanted high overall guys customers we've step macro more events for Or back as cost as back uncertainties before? that? more seen look about from guys virtual effective talk Just push

Sharat Sharan

events, that end your pronouncing we And the talk about name, is the When of the to we digits product, at focus be right? okay. our close mid-single really of [Indiscernible] on conference year Yes. virtual going platform. virtual to

If you products engagement about virtual different about provide and for self that let overall, think events, virtual additional we customers. platform But six our service conference the has product. me talk about

by ARR a Our services this for year been digital managed scale has It's that. impacted solution large conferences.

our return in-person more particular scale to of in that for mid-single back what XX% the we to to the of of less product mid-single about other to went end to Also, seen people just we'll our about this with ARR to last quarters Xx events, And seeing core large part than now end of because and switching stuff. several digits, churn go more up compared digits. product are the for right the this be we've mean, now are at rate products. the that XXXX, back physical year, over I by was demand be

market. core year part mission; is of six about about self-service Steve not said, this take revenue on our to is products, it's points our our of of three And going us. our different core headwinds that's offerings that for As creating forward, mission we this part

pipeline up, we is to, – happens customers what macro our generation asking expect if are our provide we as engine. you about a what mission-critical the back coming sales Now, tightens and

consolidate continuing we are our various We the see and a use us that with ONXX, provide to expect into cases XXXX. tailwind to for customers

Faith Brunner

you for color. Thank Awesome. Okay. the

Operator

Herman from next from JPMorgan. Noah The question

Please open. is go line ahead. Your

Noah Herman

and month? quarter. think questions – Hey back the coming the I experiencing, $XXX,XXX guys. quarter cycles has elongated taking new really Thanks looking how was Maybe I since, gotten our have last or what that changed, you're last longer to the and threshold, above guess, October sales business guess, the with I through on cycles for congrats purely

Sharat Sharan

macro, think anything I anything. Yes. Noah, has little I the gotten a mean, than tighter

continues cycles, six some Enterprise And logo just to side. we But so is cycle longer over months. three seeing a especially little business still new on acquisition sales the harder, sales threshold. $XXX,XXX between little be with longer our a is are to

going segment. the looked we headwinds on We the look be commercial we effective in also new can market. there we realign headcount end to why that's the we at more of at, of see are and to lower even As logos, some where more that some the realign

So as we are see do move what elongation, commercial some we larger of That's market. – that pressure we for currently, end especially some as lower and see the deals on the we seeing.

I are some question the a of have to September of think You October. so kind also about is October, from it's continue October headwinds seasonality, first we month that got quarter, the but that seeing

Noah Herman

some which verticals, that you it's can upon at a some areas Okay. level, pretty are really just you. maybe whether weaker more just Got it. you if healthcare, seemed to which seeing, strength manufacturing, areas That's other great color. then And mentioned relative was high Thank seeing a strong quick growth? seeing it maybe follow-up, are touch are

Sharat Sharan

you. Thank Yes.

our all, more and install focused logos. a about execution some of the base So focused we've talked the enterprise we've we things got of like first two of of the world's of more mid end because upper is best that lot – things, also on the one we've our market, one

on verticals technology, are service, there course, some I life headwinds vertical, information those six the mean, board. we has has still manufacturing, in there probably some as got But some you side. when think core some kind the it's accounts all – at you sciences services, I once asset is life across are are that, services, management opportunity professional okay. good services – sciences across life verticals. than financial think have, are the look I the the seeing Technology we and of across, Other the think we of that financial seeing and [indiscernible] especially are toughest, some sciences, I the

Noah Herman

you. Thank Great.

Operator

Next question from from Berg Needham. Scott

line ahead. go Please Your open. is

Michael Rackers

it. you Berg everyone. for on Rackers. I'm my Hi, taking Michael today. is Scott appreciate Thank Really for This question.

But one there. and macro is win kind ask kind on it similar generally mean, a I of the quarters? four, your tracking the some the what has same to kind wanted And of kind changed you've then way? you're that in dynamic. a of five seeing lot Are rates players? the of over on past, three, know touched headwinds of Just I competitive

Sharat Sharan

have seen more last retreating solutions Michael, the times point sales for same And and Yes. quarters. six seen, were we've position customers. in rate maximizing recessionary power, these funded few And of cost of in from the about two, increasingly and our as the marketplace. many venture they're more of the customers competitive now drive that the for our mission-critical last win efficiency products for three the that our becoming that their is kind we've backed spend. started solutions while pipeline they've improve Actually, is years, generation effectively, even with platform we this important core a our

people there, database generation ONXX. a because provide pipeline, their then to platform. engagement like So great a a sell be two drives visual continues they those One and They come first tool they and don't get previously sales video they tools. us limited we to are talked but two the have area Webex, was don't then bifurcating they That and folks lead going and data competitors IT, the And pipeline, they're [indiscernible] they to very actually collaboration insights. competitor, that our provide Zoom to need about but platform different a segments. the have for

side, in And we that couple years. on the saw last the point solutions emerge other the

retreating. As I said, them we see

drive even believe forward customers we competitive a pipeline, we as stronger. more cases, our more XXXX, and that lot get is going as So our for that to position deploy us multiple, in move use

Michael Rackers

Thank Great. much. so you

Operator

[Operator Canaccord. next DJ from Instructions] will take question Hynes We the from

open. ahead. line Your go Please is

David Hynes

the Hey, taking questions. for Steve. Sharat. Hey, Thanks

Sharat Sharan

DJ. Hey,

David Hynes

managing you I'm premium price Sharat, curious, conversations what curious how I customers how in and price to those a and sense kind be you space deliver. buyers may functionality good perspective are price and guess of renewal. going? the you're the conversations environment player reason this how in sensitive I'm for But from around are I it between new happening guys what's my at are and mean, different is

Sharat Sharan

me cognizant that, very clearly talk about renewals DJ, customers renewals of sensitive. the first up let we deals large So that price and for are fact are because, coming

So team better way some that one others not we in sale a have to than guidance clear the of feedback, our churn. down sales customer, one to clear is and of a the lose

seeing with important with adoption they executive that's is would other we that But the more So business new going review, and that terms are of sharing better products the also thing. And in the use product, are quarterly them like engagement business of the are new we we cases thing an forums getting much, better adopt. our much can use hub. customers

thing. important an that's So

topic, we we with, uplift negotiating a also a have lead pricing deals. X% we give Generally, multi-year – charge a but some pricing are is becomes that what we to – X%, if being continuing of up also we year, which are discounts little about was open, compared to

in be others. little terms are a the renewal we the more those discount of have business efficient to things than on So on new Then side, levels basis. the

again, the at products. are have because betting multiple farm Now we thing good the all we is not

products. So taking we are more

discount compared new the the before on is to So higher some forum business side. yes, there

growth a they But these this pipeline? on it’s to again, is, what give cost. we Are example. drive looking pipeline to to solve an Are and one is forth. so So they looking talking of to kind partner to the training? I'll the you looking problem. really in drive businesses environment coming what about customers are are get? The to that new us It's about just they're are going not

generation. One has of platform. software standardized They're and the largest demand with our company integrated global for the ONXX

team listen, training we've were so basically the enterprise hey, partner spun already And that is integrated they scale and better. platform. collaboration out a we need now using came tools, said, partner XX% platform partner their they been and their Now ONXX, output

so it So cases, other this use is able little us take allows flexibility a essentially being than. other a little to more into discount giving going while to – departments more

David Hynes

Yes.

trading basically helpful, I from look, And now. stocks what you mean, done the cash a at have appreciate cost guys That's perspective. structure color. Okay. then I

profitability but now. stuff a that of several of row for will getting the has lot quarters the in think about be been a the I of we're business important, same kind fundamental talking

more Do else Is of when with attractive? Like you considering buybacks? thinking what the around create look guess So from are value the what are like, you is Does you stuff can question you about kind here, do? that you other board? M&A right? sit accelerate I there

Sharat Sharan

Yes.

a question. I me good think say, let very that's So

Let me answer it in a couple manner – couple ways.

first two, COVID have end all, – And because the normalization years of XXXX. different of the then we then ARR an the adjusting to been at in a XX% the DJ now So that grower pre-COVID little we of were on you we three are tailwinds, last have last has years, two, is three basis, had the we've a normalization.

the headwind dealing with Steve conference as about we between of the the are and and macro and talked services We FX. virtual eight and points are overages the about

a to is next abate of Now, lot going that year.

have we right our improve believe model. our as well So we profitability. growth that to reflects price by now our is of actions breakeven taken QX growth long-term as focused on getting course, while what business XXXX. That's getting don't profitability are share to our focus opportunity we current on platform and And to core

have Now, sheet, maximizing value. you do shareholder know, focus our as a now right we strong is and balance

repurchasing about in that be will talked earnings call. We our We've shares.

how and down, continue at valuations looking as beef organically are do We engagement our we to inorganically. up go platform

we those are So doing. are things that the

David Hynes

Yes.

Okay. you, I the appreciate Thank guys. color.

Operator

from question next The Thomas from KeyBanc. Blakey

Please line Your open. go is ahead.

Thomas Blakey

you me? Can guys hear Hello.

Sharat Sharan

Yes. Hey, Thomas.

Thomas Blakey

per they question. for generate even question. unique a up unique And engagement, there. come here, still I your kind question the my than bit Is about something contacts taking I tools unique is $XX of per seems I and Steve. still first of few off of That's can about that? engagement don't if every at and like engagement or growing? not leads it's can five, know David's the for is analytic outside you but month, if little Where month. tools question, that's with That's tools question and service talk year month. if strong My It per cheaper go engagement month Hey. to mathematics someone Thanks a customer guys. pricing. about are some guess just follow-up a million for secondarily, have a

Sharat Sharan

audience Thomas, engagement, about or that was engagement your platform? the question

Thomas Blakey

per provided The million X month? the you metrics

Sharat Sharan

Okay.

people the answer seeing on highest, on seen are what the of me are platform on pipeline. have engagement that we The to fatigue is into question the due attendee attendees engaging, anything the the our is last sales signals and we having and also platform. convert But products is all any are more we per seeing the and to have we the digital Let so This for like that that the them converting one or product are is there platform. is engagement data interactions using. that not engagement – first-party highly for that to buying people and into customers

the other that if you had, question could that Now, on repeat you was pricing.

you repeat that, Thomas? Okay. Could

Thomas Blakey

such from? a There more Well, these a of to, go could arithmetic engagement folks into it level kind come a of strong, if dollar lead Where value you low per Where proposition. for to pressure is in your pricing be just seems touch? you to commentary great which revenue. would the the just amount if terms generation, that's subscription was vis-à-vis model alluded higher can run coming about, revenues

Sharat Sharan

is this where want what is cases collaboration without that's probably to where end and an this, the is where the like That competition getting the some they insights, IT – – especially going. think mean that's okay. just tools, focuses really, to to back we are environment status if seeing people get I up I and video in they go very limited data do in that generally environment quo data insights, in people

from competition side. So we level see some of that

venture enough are did not many about of completely for because folks, there these they're gone. talk retreating and are retreat them expect not they're backed. point runway I that Now, to solutions that but we And there's

some cases are for But much us into XXXX some they much, with of our move going others, and larger. those opportunity as believe deals. So is we competing we get in to

some And acquisition those of targets companies too. maybe potential

Thomas Blakey

XX% that some when gross we follow-up sort of That's And go for thank insight like the here. Steve, on margins, Sharat. pre-pandemic great. if And normalized a range, mid-XXs and just here, you on question

we XQ be out then and As term that even should about guys. us breakeven would margins gross also in maybe XXXX, what you little Thanks helpful. and by normalized terms thinking with look of longer be outlook provide of there

Steven Vattuone

based the Yes. I in we see suggested in bit we XX% of QX pressure I QX, little remarks, were commentary mean, guide. the a revenue the prepared in on at that and on

year. what We likely. just you've next to to. there I XX%. don't there target not in think expect like. the most be be to expect next high-XXs I – past, looks that's the get goal but to going probably Our is We've know we're helpful. second long-term half this our in yet, guidance that model year the the I'd XX% is to year, been not XXXX We're with seeing providing in of consistent We're year. what us If in alluded next

Thomas Blakey

Very Thanks for question. Yes. helpful, answering my Steve. guys

Operator

time. further conference Sharat, closing back to or additional I'd remarks. to any is at like for there question turn that appears Mr. no you the this It

Sharat Sharan

forward look to We today. us with joining for all you Thank meeting you soon.

Operator

That event. concludes today’s for participation. your you Thank

disconnect. now may You

ON24 (ONTF) 9 Nov 222022 Q3 Earnings call transcript