DCT - Earnings call transcript Q4 2020 | Duck Creek Technologies Inc

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen thank you for standing by. And welcome to the Duck Creek Technologies Fourth Quarter and Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce Brian Denyeau from ICR.

Brian Denyeau

Thanks, Andrew. Good afternoon and welcome to Duck Creek's earnings conference call for the fourth quarter of fiscal year 2020, which ended on August 31.

me and Mike CFO. Vincent with Chief Duck call Officer; Executive Chippari, the today Jackowski, is Creek's On Duck Creek complete which results press our our website. Investor disclosure found of A our in Relations can section release available is be today, on the issued of Today's being a recorded replay final be available call of the is conclusion call. and will of Statements other customer demand, products, our financial made on results, and this business call the may COVID-XX impact include matters. our forward-looking statements regarding on operations, risks, uncertainties management's to assumptions and of These and on subject statements be and are based the current today are future. as expectations updated may not in these as be of Therefore, relied views date. subsequent representing our not should any upon statements as

of press financial in turn provided of certain liability let refer We these expenses, me non-GAAP amortization and to stock-based release over also GAAP related reconciliation non-GAAP intangibles, adjustments. measures tax the in earn-out primary compensation measures value with of the is being Mike. to additional effects difference change of contingent is that call With fair information the our provide to to to A investors.

Mike Jackowski

adjusted some Chippari delivered has months of six culture, past certainly time willingness execute the to XX% revenue, Thank been and $XX.X give the a people joining million, you, up performance many our and board. light of We and today Creeks highlights families strength and platform. the afternoon of And Brian, resiliency subscription our completing earnings in begin in But support this revenue I'm your XX% first, like their the I'd to to I Duck financial for transform in the for two an our up we're the all company. year the quarters strong by 'XX. was we all is total $XX.X milestone mission I'm profitable IPO Review XXXX about we providing of that first a our the insight On some derived history were public low-code the which as SaaS quickly running Successfully healthy. shareholders lead and us those the with have challenges, core proud belief hope few health our by fourth into we of CFO, our how of of best for call us. our spend on let will Despite Creek, global million, by transition a across safe since crisis with in as results EBITDA their industries, SaaS Duck unprecedented market fiscal to for also me saying and we year-over-year. you today's on company's of modern were $X property, of was quarter, In our underpinned and thank fourth start casualty economic Vincent giving our revenue to support all insurance their need. to of ability an time Duck in new COVID of reviewing from the you COVID-XX, thank which our want recent call, pandemic important March. quarter good onset Creek. million. excited cloud. related for everyone. in full quarter in of incredibly the thinking insurance year-over-year very reported systems and for the the are of

our customers over and technology, services our deliver employees demand two our a to We supporting as for diligent strong targets, challenging on performance to course execution seamlessly and it our as and our robust of X,XXX during shifted is market due the project Our of days increasing these team. to sales Duck work-from-home times. well the both goals Creek continue and over

to addition, time we want and also to where partnership volunteer. efforts back a through In Duck this Since public team Duck with program, focused and employees our had a in many Creek's company. volunteer are off through few engage of have donations through members' communities the their I call we providing is Red program as matching first Creek. spend our minutes overview providing paid a an Cross,

Allstate of and solutions. for Creek insurance started CEO programs. career years then insurance Our personally, software the XX product I've devoted the business to market creation privilege the with technology By modern and of which of be Accenture. background spent of the years to continue seven this business most the our leading more opportunity. been than industry at as to transformation company, to large and the a the application past my nine Duck year since we I SaaS industry. incredible march And offerings be This lead our industry, I insurance - Insurance, technology near leading it's way and the with After to in

know that insurance. those about how you can transform me, very For I'm know technology passionate

on by opportunity selling and manage services of and than importantly, of to system our billion carriers industry quoting a P&C However, varying spend I'm carriers systems industry. in digital always OnDemand. carriers to $XX more essential caused serve, Global realities regulated core more P&C them aligned nature than of annually, creating, $X highly software have the having Insurance of in $XX massive service related and Creek Historically, insurance core addressable market the these when P&C that running models industry claims. Duck challenges including are complex which truth, the approximately and our operating aspects highly we and the systems trillion moment in responding IT sector annual billion servicing for true grounded by the represents billing is that what to currently is process they of call products, premiums. insurance to products, and creating I new customers and streamlining models, into traditional regions insurance experiences. at digitizing to new these products, needs, of To apparent thrive often shift In the suited struggle as - pace new platforms. industry launching successfully code bill just to flexibility. on generational than and faster to response market, highly beginning systems need support have the sizes a core platform ever of technology in industry. been P&C in for market a faster fact premise before rapid their software largely for all whether cannot required provides became many solutions new innovate are carriers applications compete that customer carriers expanding or P&C adapt to operations the readily business today's that agility, it's a recognizing greater and We Carriers are driven of that and global believe customized today's speed the to a in greater COVID-XX.

live them We the when our customers tremendous to in their $XXX was innovation, greater on for costs helping drive have this our by Creek our We customer dramatically mature our SaaS far Duck this in success a Fiscal and global Duck exceeded first Creek, OnDemand customers. reduce over with our XXXX Creek is million SaaS software And a reinforced since robust believe which solution OnDemand, growth as their most the is by milestone service growth away market. platform. revenues. OnDemand as by on engagement profitable Duck way went the year revenue, accelerate comprehensive in XXXX P&C driven the we improve led in for industry. Duck enables transformation and Creek product efficiency

of clear, onset past be now phase pandemic and purpose-built this to the has and to transformation for prospects are and SaaS providing value deliver be vast sales core We accelerate systems on this Duck with is of very in customers. Duck adopter we market are are the their which we OnDemand, of to running RFPs choice clearly over reinforced the Creek To majority clients. seeing carriers evident is believe market digital platform OnDemand early the by have but that superior business in of primary the prior insurance Creek's default to trend. Today, the a SaaS to our platform. the COVID, deployed XX discussions focus carriers was performance XX

Premium $X range regional Tier billion from of OnDemand Written Our we ones, have large X Tier over to customers insurance.

ever multi-year who have on Duck The one and I significant made the next This run. We enterprise this decisions effort AIG the the in the Liberty systems including XXXX to part proud customers with of on and who partnering during be of most X win Creek significant core these first AIG selected the a three focused wide their long-term fiscal OnDemand quarters positioning had XXX the are Tier a for their Hartford such as chose industry. believe Duck OnDemand revolution, think transformations AIG, our are Mutual. other as strategic customers follows XXX We success SaaS digital of program, with way Creek significant the We of is years.

Insurance we deals We The Company, have among Mutual X,X,X of carriers in also Re others. momentum OnDemand Tiers seeing where Specialty Benefit new and including Group excellent Doctors signed Munich

particularly are Accenture our of claims and unprecedented proud we just Specialty new days, them Munich industry. launch our implementation something that Re and Insurance, policy to billing of with line where is product in partnered for We a XX in

success low-code flexibility Our of entire platform. and SaaS across the our to speaks continuum carriers the of power

processes for Management highlights, for to system compensation system One saw these our our the is onboarding, momentum strong A to channel. which add COVID without this core We streamline across value can carrier activity also standalone management who great selected very Distribution X insurance. traction requiring agent products replacement. addition quarter, we In Duck a the good saw example relationship core their into in and Creek but we fourth with carried carriers Tier business. tremendous

within share this eight four base. to wins we multi-product a these customers, with deals, to of signed Creek During more wallet on increase which continuing detail a quarter, as provide new excited customer trend little also of contracts, our few the our wins many key quarter were Duck of I'm OnDemand were well. our of

of customers' Some our successes.

Manitoba homegrown of Public Duck digital our significant Creek's is combination capabilities billing, the insight quarter corporation power, OnDemand who in claims, win Suite and and on a a was for Crown selected non-profit were Key provincial Manitoba full chosen differentiators to our to OnDemand rating Insurance, policy, standardize Canada, Duck Creek Manitoba. system. solution The breadth Duck Creek transformation. security the in maturity, with replace of First,

competitive of suite an wide market OnDemand win costs is support full OnDemand initiative focused our Duck insurance evaluation And utilize in a specialty Creek Duck the win Duck range decision and leveraging The was carrier on law to to Tier Lawcover provider they a the OnDemand their X their insurer, Australia, lines. the to professional anchor conducted will of compete they provide full modernization exhaustive of operations. our system a will the digital of transformation exciting Suite showcases Creek for streamlining improve reducing Duck firms digital transformation, community. globally. a Creek ability it large to for effort. to their indemnity Another which our Lawcover business selected This accelerate Creek legal at was and service

momentum in over We also new selling our saw Public solutions non-core customers continued Insurance. existing to standalone and both

to public Management America functions and One processes. of selected Duck the in automate largest to Reinsurance the critical Creek manage reinsurance financial XX North insurers required administrative

We and also Hathaway the Group, insurance. in national leader relationship company Berkshire our expanded with liability MedPro a professional medical,

quarter Duck Distribution their as Creek MedPro During to Management Duck the selected Suite an Creek deployment. add-on

innovative ecosystem successfully In due continuing partnership service a customers, a and new vast while our to with aided COVID-XX. partner new delivering model and deals, Creek execute focused remote our these on to remain in by delivery Duck addition of all our teams projects

small in leading using a their Creek they Insurance, world-class market. improve people, kind And new small states to Westfield new Creek with in businesses Portugal Europe, reputation insurer operations. a an of new Ageas and launched insights which personal is policy and showcases a a Deloitte, Duck insurance operations. agent billing Europe. in commercial this project Company's builds engagement. market brought on property core Duck The in quarter system partnership OnDemand that modernize modern one THREE important with We market protects the leveraging our the portal number and experience OnDemand and brought new their innovative dramatically Berkshire X billing digital utilizing core comprehensive and Duck the Westfield's lines Hathaway with Tier capabilities holistically approach to of system agent and and our small-business in into During a ensures policy, business, completed single by insurance strong program platform, Continental with partners to their policy, both Creek delivered

low-code and progress great via recent ability Insurance GAINSCO differentiated complexity launches seen with as production depth have these both platform. believe insurance capabilities And We of Duck Management SaaS harness Insurance. with NJM Auto in also to Group Creek full Distribution We in solution. our of the deliver is our a then

pace the advanced to of configuration of platform to possible our in with tools the the invest push what's and innovation available We balance P&C in the continue most market.

the our growing user latest release experiences and configuration the approach interfaces This notable include low-code mobile responsive builder designed page new Some meet customer of configuration tools. non-technical our to building allows examples capability, beautifully with develop expectations. to drop the configuration industry drag a capabilities, designers user enhancement to

tax prompt Duck who with for this IO partner the of integrated market paradigm advantage announced duckcreek.debt accelerates to messaging quarter to Creek several of example text also our fully providers reduce using in Duck development was OnDemand partners Duck to integrations ability integrations to of the release time Platform. established transactional new build great to their portal We the dramatically leading Creek enable Creek meaningful a which saw we take In patterns. insurtech solution the Platform

with our integrations like and have extended key We Verisk industry providers also ready-built [indiscernible].

of these with deliver partnerships continues has partners confidence customers to our ecosystem help greater All faster now and solutions XX grow. robust

the Duck keep customers' our the has in debuted During we of number from in current latest X event. Developed quarter cancellation with demonstrations, Creek. annual reaching our of virtual the of which our houses of typical customer person formation dozens website content customer a our success, vFormation vFormation and stories due formation huge to COVID event the to response to times participants been also

the incredibly growing of most the fiscal a our in ARR Creek, configurable in is SaaS we a bright margins beyond, P&C approaching in SaaS SaaS have As And far have subscription with market. the of the clear XX%, market. leadership rapidly $XXX business we we future and and we a ahead million by gross to for the excess believe we look indication robust Duck for XXXX is platform believe which

on high and advantage levels confident take significant growth to achieve platform. in investments we SaaS SaaS the of made will as well of demand we as improve continue are subscription We scale margins continue our to as gross have we and our

to build is upon strategy success Our the straightforward.

First, new OnDemand platform. customers expand signing to our customer by new customers, our footprint

of are the to early carriers yet in move cloud. earlier, mentioned stages digital begin is in P&C industry the its the As transformation to those insurance the

across businesses enterprise. continue expand consistent Second, business, selling our source by to our Creek's in as additional customer SaaS are net extending rate footprint consistently has for growth successfully base, lines This either Duck the retention by a within dollar new solutions evidenced that of the the is been XXX%. of above

one continue was and Duck reach. network. architecture to platform will a what its market strengthen Creek and beneficiaries as OnDemand as dollar our vibrant, to re-platforming this global fourth transformational to regulated undertaking be partners in platform has year extends to open expand ourselves complex, position Creek it terrific partner the our company. of of up, and us We dramatically in for the we a results highly generational To ecosystem have of systems. engaged of choice that finish multi-billion the believe The P&C of a sales core implementation highly quarter which established enabled puts Duck a industry, Finally, great our delivered establish SaaS sum primary

Vincent you and our generate have look significant years never updating forward we build We better shareholders. and to will know and over public value on many Duck Creek's turn quarters larger, over Vincent to highly in to much our to you and now successful I ahead the to profitable excited progress. of company Chippari. getting the We Hey you. more success opportunities of CFO, we're a about upcoming current create been that upon and confident success us for can

Vincent Chippari

total subscription quarter and the our in for a business review first historical results provide review and XXXX model fastest briefly guidance honoring model. This fourth SaaS our revenue I'll sales in fiscal revenue obligations. growth recent on-premise Since XXXX to fiscal generally revenue license year growing total area. of model approximately and OnDemand existing being to like Today, related subscriptions Mike. license quarter has accelerating. call, fiscal Thanks XXXX. are several our our growth earnings platform. With transitioned the to successfully license revenue impacted representing years, In I'd full of under contractual over We've first detail Revenue X% from right. financial rates now our transition bookings past this the years. our limited but to All is XX% a

company specific Our initial for commitments platform. for often business monthly, SaaS insurance a initial within contracts line and solutions the are multi-year our on are are sales particular billed or of OnDemand

track spend model customers. a have our and expand successfully increasing of record and a long with We land

is professional a products work stream implementation core generally time services a have our that also basis. and almost to billed and from revenue on derived related We solely materials

has pleased up million XX% for up SaaS contracts customer. efforts due was sale concentrate revenue X% million revenue our the Services in year-over-year fiscal to performance to Total X% XXXX quarter to of as from now our We're on-premise both on-premise - revenue for reflecting essentially to of overall. business, the results. year-over-year, strength the year-over-year. with August and XXX% million basis and Turning operating our SaaS we fourth to Retention. XX, QX $X.X from period is August of period. up month the XXX% business. SaaS, of an ARR revenue, for year of services operating quarter last rates, XX% $XX.X Maintenance calculate was our represented XX% as and total QX in Dollar expense of Net subscriptions License and by of revenue, grow subscription to rates. ARR of our on Net with total up tied both high million solely growth was XXXX Retention utilization revenue. of on SaaS by million, XX% over platform. XX% was we each SaaS $X.X $XX.X based of key an In Net on revenue strong prior expected new revenue subscriptions software consistently flat already annualizing of products a and our Services the to related ARR year-over-year. $XX.X Within sales was our which products $XX.X the revenue four two SaaS as existing reporting subscription subscription recognized SaaS Retention. ongoing revenue, Dollar to Dollar XXXX, year. was existing exceeded was an million, gross demand and our new metrics driven high maintenance implementation comprised SaaS, revenue, which revenue as our primarily add-on sales growth be in XXXX the DWP fiscal Dollar on Retention products prior the of the XX% We'll XX, of customers combination exceeded quarters, Net and past retention has

review income let's more Now statement in the bit a detail.

provided As in margin our metrics from - non-GAAP Subscription margin non-GAAP. and revenue we GAAP all didn't quarter press growth. by of we fiscal subscription reconciliation certain benefits when unless a in margins Beth fourth and XX% were of expectations good of exceeded the quarter timing noted generate from benefit XXXX. began was as strong million gross a XX.X% XX% margin recognizing revenue driven $XX.X gross scale favorable contracts. Adjusted gross to to of The continue the primarily release. have compared And of a reminder, our otherwise in quarter profit in we to are gross where financials, the

of services will level We approximately margins this high to of a organization from slightly As services expectations. has margin our we from the and XX%. utilization was the down they long-term current our in track decreasing XXXX, XX.X% fiscal Well, is for margins decrease XXs high believe be towards Professional above it to range as move services continues moderate level. quarter. into unsustainably may it fiscal come XXXX slightly

all the due XX% Turning COVID-XX remain levels to technologies. footprint bonus $X.X operating levels or XX% $XX.X ensure was than of year-ago marketing increased higher in and were expanding product in continued global efforts the XX% expect in with the period. were period, in million G&A or expected prior-year to and or period. primarily to from we're costs line roughly year compared expenses related revenue to prior events as million continue expenses revenue funding with R&D prior-year million to This expenses, lower related our to and Sales marketing properly XX% investment in due currently prior-year below line T&E of R&D variances the to market. were sales also of opportunities in expense period. We covering revenue the investment XX% and the was mode engagement $XX cost

the non-recurring downsize, charge During a chose in locations, office we two to of our of fourth quarter, $X.X resulting million.

expenses full efficiencies, million was $X.XX G&A funding share all the charge, stock compared per a on where common the of average a assuming based higher as outstanding. bonus This partly shares was this based quarter year for EBITDA for fiscal quarter and weighted Adjusted margin. prior consistent for account Excluding was was that decreased calculated scale EBITDA all using Non-GAAP sold by million on adjusted revenue, pre-IPO in XXX.X percentage outstanding the EPS IPO the interests offset $X X% year. to levels. partnership the share exchange ratio for

a shares. quarter and they loss QX meaningful GAAP $XX.X August ending in had million for share count represent following because the million they for of as from being produce a IPO. our not are we was quarter million. XXX.X share period XX, that per was loss a net XXXX XXXX of results We to results On operations and million. investors not fiscal profit the gross earnings Our as $XX.X $XX.X XX-day basis, the be presented for the GAAP XXXX of had would

be time the years. low partnership will of amount each mid-single-digit with conversion IPO, this over Based conversion employee expected on interest the to of press further compensation, tables charges of the the future associated release. quarter, was in millions interest as invested related next described the of to of partnership recorded million the of the financial the IPO at be significantly all During two in the of $XX.X currently fourth company which share-based virtually our to lower

with million no Turning flow, balance year ended we and and - and cash sheet to the cash the in debt. equivalents cash $XXX

due scalability we while fiscal adjusted finish kind bit $XX the revenue gross in cash, projected are reflects $X $XX.X our $X.XX - fiscal of generate million. between is per be balance guidance, initial revenue related of margins million in million expect quarter, Our is primarily flow loss year-ago $XXX Adjusted with offering August. improved the working million. growth our million And quarter to to strong now, were first expenses, a million the believe approximately approximately compared business revenue increased of to in compared for million unbilled expect accrued of improved increase like public in from quarter our was transition cash year to on-premise was flow Free collections initiatives, XX.X%. year Subscription $XX.X from net flow with cash to is share. million and capital Non-GAAP our $X.X The ago quarter to EBITDA inherent million reflects we to closing deferred in of to And licensing. in in tied for in free the continuing expected first $XX model. to and receivable $XX under the period. cash beginning million. $XX.X $XX breakeven our at expected We and the the I'd net Free cash ability the away the to in and platform positions cash to the invest $X.X million in proceeds period. total X

call gross Subscription expect million XXXX, fiscal total be full $X.XX $XXX we revenue our XXXX. scalable the a we to year Adjusted $X.XX $XXX by as $XXX.X of is we momentum, positioning to expected financial million is margins for say fiscal revenue sales we're continued million. Operator? year for in generate to fiscal we fiscal enter of $XXX.X XXXX summary, million shareholder with ability For the pleased per balance up a million EBITDA In are million. projected Fueled to to between performance And and our a and confident to I we'd to or XXXX strong $X would long-term non-GAAP like expected expect XX% $X good million approximately loss net loss Non-GAAP with our million. of sheet, adjusted Q&A. and share the $X in growth structure cost that, open $X and and be to value. to a

Operator

[Operator Instructions] Your line Auty Sterling with first JPMorgan. the of question comes from

Sterling Auty

characterize of modernization core on I think questions system maybe one digital we're tone within of kind ancillary of what getting companies investors' the systems. minds Tier how their outside for But new but initiatives, you big at replacements the you be this to would will of when outside of of a move my which the question. AIG follow-up appetite the system X some see those tone would that, for that the the like core point? We interest say to overall demand just for biggest in go-to-market cloud is looks lot

Mike Jackowski

question for its your and thanks us. Sterling joining for Mike. Thanks

cloud-based and core I looking say Xs many at replacement. surprised for Xs that they're core system solutions are actually replacement we're the Tier see that we demand and system Tier large, pleasantly to specific showing would their question demand a for with how Your strong, for

is it book. their carriers boot say these strapping be What new a that run they entirety this of they're and aren't to I in re-platform the line perhaps doing is re-platforming business space, and X the line to what want into taking to say opportunity know it market what they're to cloud. good in rushing in a Tier the Now they're you saying will essence perhaps, smaller would

And entry books then smaller know with have that upon there. as success point. we expand model that an of starting business, really they're we from a improving the So great to opportunity

core set we're really of start actually in cloud. to Tier seeing continue X even light So I to interest COVID, in think to systems in the show strategies run

Sterling Auty

Obviously, into in to sense. AIG one that that rollout financials think the about follow-up going win. should the makes an then And how organization years. on it's How kind come will coming time. That of investors big quick the take

should for how U.S. business So it will what investors that expectations out? look that on rolls opportunity their like

Mike Jackowski

but we're it, areas could that a just let is their of me the Well, business that will begun maybe on work Vini at couple there operations. and insight their you high AIG with Sure. in level a add of doing comment in terms some had

strategy you the we as we So it's and and them starting already in in across an to excited we're I the environments very know in are terms already broad arrangements. AIG, And contracts we to of XXX opportunity have provision opportunity account, basis. broader recognizing help then large know, AIG said, on place working are we about and enterprise on a we're organization, overall those those they're of a that revenue

going to look their leaders for opportunities continue within we're to expand the So with overall account. and to work

Operator

next Merwin the our Chris Goldman with from And Sachs. line comes of question

Chris Merwin

Thanks question a very here. great taking and of congrats first gate out quarter much for the my on

So those to a about international Thanks. a wins is in particular level, in in in high maybe investments the Obviously wins of, at of that to overtime should further eight in partner and deals if I treat, we lot ecosystem any how thinking ecosystem. geographies. potentially be new were influence quarter of lot about the ask driving wanted and partner investment that

Mike Jackowski

carved strategic course, partnered investing Accenture. in you, will for I'll out pillar start the out ecosystem of Creek Thank Chris be and the key just question. after of we Duck Yes, that from say

we some the are have very, we've in and integrators we systems been a on of helping of heavily us closely but way. with basis work that with strong providers, terms course, ecosystem a the training, core Accenture global quite relationship very very with along Of investing skilling them,

implementation as the as to our Mindtree In like our Lloyd past quickly. starting boutique prepared Duck partners fact, practices, very really partners comments, so the traction Capgemini prior in we in bought the thrilled about in the and some we're their of get I very, scale over essence with [indiscernible] mentioned then to with are well. And Creek implementers several globally

So dimension continue we respective skilling with motions. an go-to-market we resources to it's think business those helping important that to to continue training in grow and within us the invest our are and practices

Chris Merwin

like year-on-year. it And for looks maybe just gross nicely follow-up SaaS one Vini, increased margins

of the gross the margin question, you add said but the scale I seeing Thanks. detail some have. multi-tenant And more more that of think benefits if offering a related you closed, can from you some in adoption any improvement. that on as SaaS were remarks then are any you the deals there curious there you prepared

Vincent Chippari

profile I'll margin the multi-tenancy. and can start jump on Mike in on

targeted margins element quarter we revenue incurring lot subscription above where that the that a even The a aren't cost on we of of couple for were year. that timing So deals is start signed that's that recently yet. of did XX.X%, in were large next kind of

gradual improvement look expect I and So think for is but if level, XX.X%. to normalized bit example QX a of to I improvement, be we'd you continual quarter-by-quarter think a going that's more a a to want

So X little expect but we move there, from it a to up would points. obviously not

it So at where it's we XX%. was bit but a overall may from which back still think year scalable quarter, little in come first the down the ended,

Mike Jackowski

a multi-tenancy follow-up Chris, it's SaaS then, subscription margins. and question on as as or And on question to your gross overall a great it of course relates

progress made in last we some As where and and stated we've year customers production claims as the platform our our several platform which we architecture, launched installed been multi-tenant we've well. handling previously, on multi-tenant in are heavily investing

for us. still very early However, it's

launch had multi-tenant several have quarter. past in this customers also We

of to So hybrid it's a we're in projections. also but have say mode. and I'll benefit highlight that run enthusiastic the us know to overall to early we about that our required for not hit us We I'd like for multi-tenancy that, are very today

to economic customers majority lot DevOps, platform. new want heavily of multi-tenancy we We scale on are of a not have the our our in to we just customers emphasize are hit invested automation. And on SaaS architecture And customers profile. in overall some in installations. our launching quite We've single-tenant our multi-tenant and that then to I required

automation the that perspective we're that of feel out it's a getting why efficiency parity. we a of bring that our and architecture is single-tenant lot from adopting reason with business multi-tenancy So I functional up

overall perspective, the don't difference, but has adapt to see IT using a techniques So really we the customers implement different platform. from our looking a at readiness carriers technology and some to also

as maturity whether we're looking where they're getting single multi-tenant expand their then. back we we of and our might forward or continue to at, higher to on depending multi-tenant, it go drive but we utilization us know So

Operator

America. comes from with of Brad And Sills question the of your Bank next line

Brad Sills

maybe effort down that implementation is mix saw more been on globalized know how a we of an start. here, of - am for Is to that and in channel, your on that to you take quarter has I to your work, as nice are of some congratulations you the to quarter? channel quarter those a the revenue first services ask just this right there that result Thanks partner to about coming and going? I Do revenue build there wanted I efforts? mix look kind the the decrease out services happy with at result -

Mike Jackowski

of our emphasize Yes, answer put the question. take Brad. but growth. want the and architects, implementations And kind just we've expert project partners some and to on see architects these restraining with short yes, sold. a on is I help also to enable all where Thanks really model own that bit We really to solution. work, these to core an of configuration for the core take architects our services overall been the in certainly of want are our is with we not to We model business

we to grow businesses. going they Duck that to know are continue we or are practices. firms continue their and how highest to on. to firms scaling partners Creek that The And respective as us core great time - their you'll goes So their about the report of growing their our we're practices - feel we among within are footprint areas

forward going as moving you're to temper these why help ecosystem with that's us the continues see to So thrive growth installations. services us and

Brad Sills

option kind workloads their made they step. single been Duck to more step when earlier. the and What just the into the are be tenant first multi-tenancy comfortable describing you or they of puts customers moving adopt over not the on for for and barriers that's open time, like, more some kind hearing being of to over time? more conversations customers roadmap some What multi-tenant Creek more that today, takes have you from one getting are with then more are and the but willingness are next might of of and a comments And logical the

of more on Thank color of kind are just a viewing how you. conclusion, qualitatively So that? it's customers just any foregone

Mike Jackowski

multi-tenancy of the question even would and by bet, largely both and us. here's that isolation way what I'll I behind great SaaS around some some and say data are say perhaps You and X go process of security past objections and is those implementing and a as very, in And to large run very Tier SaaS and how our we have do us terms like detail platform. of winning obviously we carriers AIG carriers, operate through Liberty Mutual like capabilities contracts

of behave some deployment their at of our points to with to under continuous customers happened the working and where who this our to is their we working conversation follow varying this if in and environment. moving of will the with shifted processes on updates side. concept about the you with more that thrilled in integration, maturity is this I of think integration patterns the continuous processes CICD bit an updates we're of multi-tenant adoption we ability and the have what's to a same what be their now integration multi-tenancy deployment basis need some our modernize technology we is channel and have of levels We of continuous industry it's this is terms our aspiration to are customers SI around much continuous shifted certainly of change. and side, with pipeline and frequent on continues a and there Usually have are more much on call because customer

a SI nice In player terms very that with that. in of fact, these in job they're very, doing mechanisms is large working with we're Cognizant step the in and

said in how that I to environment move maturity their of of level enthusiastic So embracing to CIOs we as to and fast carriers that this it, want move there. want places they're know terms are they they're but both discussion, about in varying

So they're opportunity continue us and very about about represents pace? what and the to grow. opportunity the great encouraged So thrive the real a at it question conversation, is we excited we're for and think

Operator

from of And with your line Barclays. next Saket question Kalia comes the

Saket Kalia

about international to your how in looks and you for feel brushes? there with start you, a international give relatedly competitive wins nice us Can Maybe you presence about versus examples prepared an internationally update example, broad your Mike, of how commentary. the, environment maybe just the few

Mike Jackowski

in question XX% obviously opportunity to track Asia about the majority more our for the internationally, good Creek, great in we global Saket landing premium outside States about large that and very make a Duck feel call very in of a and XX%, the Pacific. and premium the Australia record is for the expanding United of represents know is we of of to point that, need with But down the international America. Yes, North in U.S., about investments U.K. XX% expand we

customers have have some already Europe. in we and Continental expansion And continuing So to we notable now presence, have wins. that then

why The they in some would Here's are with. those know making a intimate a they so say light hold, to many of investments are, I'm take guarded going one COVID-XX. what bit how I especially I'll they say have been customers. even brand Saket, Europe to in one opportunity that's very close current in deals is Continental our investments. in reason are and environment, in fast we're great business bid advantage And as terms of industry of think we it's have a little these relationships with I who because we've we we doing know very COVID our able very, a that

we're As known. less expanding obviously in little we're Europe, bit a

building close successful, So go-to-market know some we'll scaling in the been eye our a proven the in of But these some we operations on keeping read but capabilities. have in and and we're is terms landed about how on especially we think countries, keep feet that a responds up our to I ground we're we a out market and software it. COVID environment, was that close

Saket Kalia

about actually which talk talked for to sense. ARR. much, Vini we is for much haven't you want my as follow-up a Maybe Makes about

future? of think I million probably the that contribution and sort $XX there that there out going or call the quarter to that was or bigger one you growth of in net we've number about, about seen last the 'XX into fiscal are years, anomalies any in keep and need ARR ones of about this ARR in that couple that out you'd new mind

Vincent Chippari

of revenue to timing And ARR, provision. So in to anomaly, a days. related just start just access of the has recognizing as just recognized about when calculate usually the of revenue got deals the month how in bit That within we QX the system. was we're reiterate annualizing period, an the the we XX customer generally happens is to takes contract last sold once it

got in or large So deal may worked of QX if is it one we the fall deal, another, QX and got quarter a very provisioned large in late sign in quarter the deal got the that QX a last way QX the actually early in we in a that within the deal that quarter. large came a timing we provision quarter, month very the got out

So had we favorable unusually timing. probably

expectation, it half QX we out when about way our vary based not So gets our the on growth in quarter-to-quarter the but that's ARR can provision. worked hit deal

could move ARR. and up two to it a one based think little in could So quarter fourth tend did have deals the non-lot an that But bumped individual that quarter way an loaded, large loaded deal. be we'll be back-end individual or bit back-end I another we quarter on little a

Operator

question you Alex comes with Zukin the line next RBC. of And from

Alex Zukin

and pipeline mid-stage the and what and any at deals if to, you they're A of for first think you, to look lot for How both the at pipelines impact, those the about developing to Mike. our congratulations sales those and about deals. asking cycle? with of the for about top a if us out first how strong talk investors given really ability Maybe had post-COVID again would both IPO cycles how are you at funnel and my quarter new taking of for particularly the question box. your sales your how Thanks the close just look of the deals one opportunity

Mike Jackowski

at classify over pipeline entire the Yes, thanks pipeline at overall you Alex. question, we our look when we stages. for the five And when look

it, we're in COVID, we're under the through a evaluation way the and stages March. A of of And So stages we look final know mature in very a very that since will pipelines. three three the we side expansion pleased what refer of final process, we really pipeline the we're contracting say those what I have the how pipeline. the seen or the at process is of we've all disciplined that timeframe to as more that with we of and really the

as strengthening and aftermath of their So some think overall where overall COVID workers of do the we will, needs, home be send believe obviously technology kind we seen carriers of to the that serving many pipeline, we've remote is carriers evaluating that and pipeline. had strengthening, work the that virtually and are if their you

pleased and what the just we're outcome the with results like overall So look today.

Alex Zukin

around to about then bounce something a where And over SaaS to is you're above think ask net to also two we and were something remind revenue Perfect. metrics. had bit Remind straight from little And this it it retention that how two there. accelerating in ARR follow-up I to should of quarter, about quarters which you a of you've or given metric, based should be SaaS growth then Vini, of you us quarter strong what is kind for maybe trending, I not very perspective. where course ARR it a expect dollar Obviously, wanted us tying know this now the about guiding just talked can just and the about we particularly time? a think in matches forward SaaS but puts certain takes a

Vincent Chippari

for over who month an the a showing rolling that single see way significant that, transparent widest last the the ARR Yes to any out period. anything the signed XXX, the If near-term could the I'll that averaging a kind if for of variation the that foreseeable quarter, AIG the the an we've move be an number to sales looks, future. probably sufficiently average going happening would the one that expect like of don't is from it's been good kind range, entry indicate in I ARR existing don't we the cycles are start, to close so that has point been But could way I of And retention first, pipeline running, dollar can the that that we've XXX, course between quarter the I are deal. net XXX think that pretty of or XXX mix new questions think for any is away but quarter somebody back impact second exit the consistent we're I'll go range. Net assume product to And not the range retention individual you to want in this our question. and individual add-on on year. We is the next pretty take I'll and you sale ARR, it's or consistently. deals numbers I point a the rates. in sizable customer reasonably XXX deal like

It's what of that August have reasonably year-to-year ACV if sales by cycles $X would revenue deal are but is, a the on we been we August. So I last tends million that of did, September, in start recognize consistent. unlikely mean if roll, did to that any in week to to provision

maybe going bit period sale So have the not a into plus provisioned. ARR I point the prior from been period think you can that entry a little is from the that expect might a

Operator

line the from of Bhavan William comes question next Suri our Blair. with And

Bhavan Suri

Nice I'll high Alex maybe And Vini, congrats with really start level the giving job. Mike. good said. quarter what out me just then, echo

and on price still I about and agent my that. side commercial on you not modernize get phone a commercial that as the new departments. where land. and on much commercial has my sense whether it think would is on happened get seeing consumer you premium Is quote personal sort clarification commercial, side. that certain led and as look love lot like to How that immediately, I'd and some more driving because understand you, of personal side a of opportunity, color like just behavior of and but that land of customers bigger that's on of some digital of new what the My is you're So we want the love this. love more the of transformation, still the should kind at color to to policy when the be

Mike Jackowski

and at large. Great say would I question,

split, see a between almost and XX/XX commercial a We continue very to personal split lines. consistent

fact, carrier, predominantly the implementing full all personal other In in carrier. lines I that suite of is one X is auto X-tier, pre-prepared predominantly in an wins carrier of my lines predominantly commercial remarks, are a the about Duck Creek, talked other one carrier, them all

the looking a full there of I seeing of even not Tier-X, to in have in quarter, X think technology, carriers are space for personal a you're direct So that straight digital I the And and X and suite globe running engagement in wins they access across customers. lot their even our that balance and through think the lines that. modernized processing more on are the have are their

So there there. is demand out

And there and commercial personal the whole auto overall then majority the that compensation broadly then the closely commercial of market, North is workers chunk premium, the are of the the property. premium from of terms look if large, premium you followed by homeowners lines. In plethora largest across big in a American segment a of and and lines is then is

do industry balance really of across you personal. the So see bit there across a and quite out both commercial is

Bhavan Suri

got think your and whole I of that customers for of Creek driver but I look do quick a guys the just it's customers. question, like sort in goes and a new onto both and But when do low need of they little platform, on to the thinking there sets opportunity and the OnDemand your sort guess code a need you more skill And does about whole so, no Duck the new then - at you and know wins the tactical of you've talk some I existing the the how base some that kind then great, this base to sort that way, upgrade functionality, the move. going that about retool. they're and code of, about that all cloud think their the what for I'd what and Thanks. base point of is skill do partners like that for they to you to look moving is adoption it, at and view large understand some you love conversion, because want view how a

Mike Jackowski

Creek. on-prem is but the I'm And same Creek terrific that what question, come investing the start question the platform Terrific, and and same second as to that tool all business Yes. platform differentiates the rules, second with the in to the of Duck is on base, as I'll then risk and appetite really the beauty like approach of going that the on strength low-code would figure around on-premise that back first SI's, rating is Duck demand. our question, rules, rules product type and is product way and the use you the well of hierarchy you can of the

In our fact, allowed that to low-code into we rapidly. more cloud, believe, it's us accelerate much, the platform much

vendors, many to Creek, systems much as their - news very third-party different. core the And with then very, well why integrate how general ecosystem. good obviously customers, they within overall SI SaaS platform, so customer, the Duck that we're integrate transferable, as you suite are and great. ledgers as the you install partners when are the well on to the The is, So investing lot is a very how our which downstream of real a do work multi-tenant platform now the that used the have systems have skills is how their which is are techniques financial and different certainly or core organization and does as in they our

of readily a to it and continuous proper a platform in done more updated has in more do we've really how set we to work our So manner on Creek course a basis. Duck partners do what easily is University that trains on those integrations and that created a whole how

be on-prem running them already then do good on-premise not under are Duck and And trained process carriers in We've today. and we be you like to Mutual base. very Creek OnDemand going your you we on processes. undertaking Group migration, [indiscernible] expect on are back because in things, So first are those from couple A going trained of of taken proof to our three through all have on in carriers Bend, all only very, it means SI's, the fact points. question to some lifted Creek West those Benefit have of production they that

proof platform out points. base a at okay? is When Creek can we opportunity future the we Duck look it customers and player. to know our call to the large the we push and we have for is at those on-prem those on We So know installed large, we content a thing customers changes have one premise. that what we we see with do low-code because The migrate

keeping commercial, So see an products, these are changes on-premise changes like They ISO can circulars in bureau customer. for NCCI. compensation our for those auto even like workers' current still as them on we and things adopt

usually we're that's them is they installed what to Creek with an into base working happy to So the around find be a business doing point tend right quite and to value inflection project Duck and for over migrate OnDemand time.

When They always and a a their you of not on customer that with sense on-premise - know is an around thing software discussions been that we're control. do built we've different those clearing do database some in migration The integrating we be as control. in core. So that many has customers. we using they install, complexity vendor keep might have techniques lot of the lose a of directly, could they one

projects around somebody and and do and And migration. perform of that to our is work they complexity a bill that have business want has value the we simplifying pay strength position with to customers what to

So, opportunity and discussions it's a we're them Duck many with know of future for Creek. growth in we

Operator

line from Roderick the of Our next question Instructions] [Operator Tom with Stifel. comes

Tom Roderick

digital quarter. beat over Mike sentiments I'll a for we've question on kind point successful a transformation I been regarding finer Bhavan's of of there put and all wanted congratulations kind and let first the months. term how this seven how about. them, are it I'd your are And head And to particular the particular, in mean the to really with customers does six, love last hear over talking what in to up about you'd that year, talk which perhaps that growth really could like follow-on by go-to-market do you sales how digital they and a they or to helpful. cloud need from the a would much ramp what then perspective Vini, the leaning leaning with to into offerings this team - you your there trend from transformation think specifically you. ramp would And you up be just be faster are Thank on?

Mike Jackowski

Thanks Tom question. for the

particular admit, Regarding may carriers based digital lots transformation, will a their little transformation bit their at strategic different objectives. of digital on I look

For around focused that carriers experience. are really specifically are personal and think lines of will on digital the they a customer customer service, transformation

and that moving the level making real complex, because the seems and I'm surface to billing is policy, policy it's that as of to sequence very to to overall that underneath terms if immediate daughter whole bill it well So simple easy, time terms to the waterline be access adding the XX-year-old at of changing transaction plan daughter the add premium, the access billing a the providing you very were you're perhaps very, you're immediate recalculating policy the the my terms your about a example that whole forward. policy auto in would as and behind and changes changing doing of your

and their look think of about a the So point but commercial brokers relationship customer and when of from really our they the about will that efficiency underwriters. you carrier perhaps more view, it's agents at it with

it's underwriting generating risk so their on of controlling it's bit value-added really outcome frustration really things because much the spent sometimes we on documents underwriters, process, done. be are is a of streamlining not that activities overall doing that talk sometimes or the when policy of to time So to that the there is the need

and are for by transformation in intelligence to perhaps things underwriter digital be that be So them, so thing looked at. and looked decision sure a routine that automation putting have things to automating the - making much an the right then and need would automate making at artificial taking be that those AI more much, using to

themes but seeing objectives the are digital we're So again, the overall that it of overall an depends on couple of transformation. the carrier, of terms a those in

Mike Jackowski

organization couple - where and of just largely North in to I'd go more the become the question, salesforce characterize spent point to scaled market starting focused we've as the other America the hit the to American efficient. on once we North last your we And building to it's years

have actually for we it we're to to I and make think scalable here sales and covering been not the opportunities try take advantage want U.S. would marketing for fact where the that outside sure

is so. add but go sales it there functions will to more to be digits, some with Headcount going add will added grow some in to along to resources we'll continue growth largely support probably international, we're So that be support single primarily that in them would international. that of direct

the is scaled think So start the or international, future. so. to a which I've it marketing as as within down next revenue of I year we've percent year after of don't actually revenue would coming effort. I percent largely little I going a bit will But and down of before, said start in sales this a expect think

Operator

our And JMP question next Walravens with Securities. of from line Pat comes the

Pat Walravens

on customers the has X, last So though one of XXXX. week, I Mike thought suite competitors most XX% Version were your made their even or what disclosure X been version fascinating that out XX stuck a of was version, insurance X, recent since

the I'd with just your hear what that that love might it opportunity about this us in to of on Creek? backdrop, what perspective the tell nature for Duck and us So, competing that about you're industry tells

Mike Jackowski

Pat. Well

take too cloud think I prospects love other industries I overall I and is upgrades and the that expensive. used even staying the that really the Technologies is and just which modernize. that it's much XX very is that industry today lines has today do helped we for this thousands does here does, you of as customers say processing lines that's of it to I complexity insurance of been transaction cloud it's And because And applications think accelerates has current glad of that installation what metric. have of code, before. though what And code on-premise why insightful This cloud a about core capabilities, rapidly I'm so raised it looking I can wide given been adopted and things compelling are think think think I technologies. it's much fact with about in new that

industry finding finding a once frustrated the an their to done system for upgrade an do completely cost large, bit is they implementation, I think because outdated. at we're is that with a

better have are industry think this and other current So industries and watching doing means I leaders we're it's some great current, unfold economic staying about model that. new is about a staying many of this many, that and we

driving majority really get SaaS-based demand decisions to well system I know, that's to decisions. the of of about you think new current. So as think be modernizing a really modern, I core staying lot as And what's it's the

indication it's for a future think I prospects. great our So

Operator

for Tandon question with day Needham. last Your the Mayank comes from

Mayank Tandon

Vini, I'll just here. for on focus second margins a

something to remind margin that you. margin the model of I what us to could to have to of type revenue sense, front EBITDA you get to is laid a just both on the long-term think long gross to close front margin. get I achieve that target XX% you on target out level. want of to margin And you term? the operating on IPO the are level would get and what levers Thank type the

Vincent Chippari

key think like balance. to we kind using of there We I really the that the to get continued got or OnDemand don't want hit revenue growth we've The to platform. rates of Yes, year I XX% comparable what need kind into exact or X% levers the of organic leverage target of now. specifics a was go the, to need

besides to there. subscription from margins, down margin not So that, current for it little bit the more services. We from which expect looking move And a we move expect actually the other do up XX%. we're to

with sales all but mix and margins in overall fiscal 'XX, highly will will expense move pretty the gross of international up fiscal move up areas think some marketing expansion, - largely shifts. that a leverageable. then and bit We this but operating our margins year, So, little for are

the sales as see out and marketing be of decreases we other the of 'X,X should would less business. revenue areas all of leveragability coming G&A, as we each of marketing percent a sales expect we'll and across but and probably operating consistent So expense R&D, in it and a grow the fiscal areas, and pretty in little

Operator

Jackowski to remarks. you. Thank will I back CEO, over turn for call Mike closing now the

Mike Jackowski

let thank certainly appreciate our spite related with about ended first everybody wrap We our as company. core time very Okay, the investing your Duck by Creek's Again, challenges, up earnings care. record again we the healthy economic you. year the many XXXX fiscal me in growth with be of everyone effects cloud. the COVID-XX participating in public you to first that you of continues for quarter appreciate a Take We're highlighting And for joining us. in I and obviously please call safe to fact well. of Thank result environment. the today. and run excited opportunity transition the a as industry systems And

Operator

today's conference disconnect. now you gentlemen, and this for and you concludes Thank Ladies call. may participating

Duck Creek (DCT) 20 Oct 202020 Q4 Earnings call transcript