DCT - Earnings call transcript Q2 2021 | Duck Creek Technologies Inc

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

Operator

Good day and thank you for standing by. Welcome to the Duck Creek Technologies' Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Brian would to conference I speaker your Denyeau Instructions] like the to over [Operator from ICR. ahead. go Please

Brian Denyeau

Good XX. Creek's Duck second year welcome call which and XXXX, February the fiscal quarter earnings on ended for of afternoon, conference to

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

me equipment provided call tax GAAP differences amortization is of to With information primary and over and to additional compensation measures expenses, Mike. provide our investors. with refer the let measures of adjustments. assets, We of financial also to reconciliation non-GAAP non-GAAP related depreciation share-based that, will to certain to press property turn being A intangible the in release,

Mike Jackowski

with with We a global for to Duck number XX% total cloud in afternoon, revenue, guidance growing subscription great year-over-year. continues of SaaS operational great and had wins financial our operate. expanded million, is the two including an global OnDemand is our their Creek of tailored of all new which significant number adoption of our product with quick industry everyone. and We delivered quarter, as to quarter. our increase of what highlight fit of to carriers momentum results that million, begin underpinned for industry. win with Duck world existing results back by choices leading in $X how by represents up overview of derived by highly number management. for digital second quarter. their I'm reimagine good EBITDA across was regulated excellent to SaaS some our ahead their $XX.X revenue now very P&C new And seeing Brian, on the with most two innovation significant competitors quarter with which that Overall, the demand Duck customers were with experienced yielded market we I'll our a the simplified new who for reported you, P&C position different This increasing detail best growth. performance and more and metrics. and adjusted I'll expand in products needs. the say year-over-year wins Creek’s from on-premise we're distribution non-core and Creek in million. regulatory profitable convert also bodies. step second and the these that system first, the X deployments complex It's deployments exciting are in market excited markets is and management chose of But entry Duck and several revenue are well of segments financial also undergoing one platform categories An we customer, Tier the for expanded exciting and wins Creek and $XX.X the the increasingly change Duck expecting of core Thank all sophisticated OnDemand paradigm customers they market. a wins, the reinforce and to industry like moment. industry we're customers The reinsurance which opportunities We And that pleased of robust I'd notable signed a experience diverse of their that in P&C our provide and the migrating Creek to XX% platform.

which of solutions the one legacy and cloud-based is brittle limiting very are However, constraints on-premise key inflexible. is stack, that typically IT our carriers those

As market to carriers This hear size. could is modernization any in SaaS because competitive for platform view the modern cost could react from Creek systems Said Duck as a customer Creek vital increasingly customers users prospects platform part carriers, on that and exactly believe to system one, to as and SaaS a accelerate differentiator, the performance core We a when we as core ownership. we for well-designed foremost, differently, large and core performance they changes number XXXX. that OnDemand the transform spending for a we driving core first core providing and began a about talked are believe innovation from vision Duck We total dynamically in performance. developing constraint cloud-based systems had preferences. of a lower is of business well business in better prior we IT systems OnDemand advantage earnings priority empower calls,

This platform of at great OnDemand modern executives the that strength the the our has Duck to business development user Creek platform recent of build built are technology for as C-level users business customer, particularly that competitive looking a OnDemand was experience. yet in the transformation. One the insights experience an with they a meet our Duck systems needed quickly is for be been significant seamlessly the we needs of need core providing business business low-code Creek us as carriers to powerful, customer was and built exciting can with essential is on for why having center a compliant intuitive the rules of sizes empowers requirements the all regulatory that of fully breadth that And digital that quarters, and carriers’ the for the for achievement platform. they aspect of a team of embraced The conversations we are and long-term. true of their user

know the out to While core seeing generation to among right. take this they once get must is we is are across urgency a strategy. a years carriers will in Replatforming a customers comprehensive develop systems a the long-term many undertaking. process cloud to cloud that play real industry, that The

in demonstration quarter our success our customer exciting second an wins the SaaS and are customer Our platform. of for demand

SaaS basis leading First, process. the strength of while innovative the stand-alone stage of our solution Duck an specialty future a highly complex underwriter opportunities. competitive Billing evaluation needs the OnDemand, after for Creek selected AmeriTrust, competitive on a our extensive example expansion This setting products win is to and commercial customers highly a of insurance often great meet and

In drive are Creek we X In with OnDemand expansion had Creek Tier meaningful Tier in ongoing areas of and opportunities meaningful that adoption their both to carriers out OnDemand success Duck the these scope significant projects. these two business. for to instances, their because Second, These carriers addition X upsells. represent growth customers customers are wins the cases, within great rolling of initial original our both our Duck see in they examples expand new platform in expansions deployments. their existing

reinsurance as Third, Greenfield we had multiple management project, management be we'll and wins embarking part upon reinsurance deploying strategic management their a distribution for initiative. and ensure of

network adopting insurers solutions. Additionally, of the a relationships, better multi-line X a add-on manage distribution great both is with significant relationships management opportunity our build non-core are to agent Tier with leading insurer their independent to agent with examples

examples about two as adopt some opportunity our convergent of on Duck existing to on-premise to customers. customers our Finally, OnDemand. are like I'd they how we think with Creek wins of the color on-premises these decided provide great

First, book. for from had Creek Core Group. completed recently specialty running Historically, on-premises a Enstar and that been is Billing recapitalization they a Specialty portion carve-out Policy leading Duck of their and a insurer

of the is Duck Specialty to the lines many of lines, on existing are well taking tech their products After of currently to converting Creek process, that product of OnDemand new carve-out as process, the running multiple as chose including for their across suite full launch approach part As deployment. Core a strategy. Creek their company an evaluation extensive businesses, the on-premises forward Duck deploy

distribution, are maintain niche and as We Specialty help underwriting focus markets, to superior partner knowledge. on and Core them excited technology with local a leading leverage vigilant they

premium from step Next, overall Distinguished their a on-premises shift that these Their part is improve will multiple blueprint an modernize efficiency Duck overall effort a conversions. as we as in lines Creek legacy Programs, Creek modernization their think operations their will Duck wins platform of one, for This of technology with important a and is Both customer partner we excited our shift on-premises to OnDemand product how will are focus and and serve them that their to transformation. long installation. digital about to on. time in

customers' to we said focus. OnDemand our of sizeable Creek at We on accelerate sake cloud expand the be needs them of number our approach while initiatives. opportunities and their will focused collaborative to believe We not to we've this one time generate converting our As for want beginning, from strategic are Duck customers keeping the renewal. to position just customers the strategic always as the converting a partner for

a times to auto business is This the one the with In power we enable aggressive Similarly, core and digital with than in in Together a with leading motor, a notable a personal of proud of and one to insurance deliver for months and our policy this to in our is Australia. homeowner partners deploy the carrier platform Hollard insurance deployment a addition We commercial products on their insurance with our network. a strong go Hollard are true insurer business are segment we a also customers insurer and exciting on SaaS are some to landlord showcasing leverage quickly continue approach a serving great partnered very exceeds small saw them embracing. continue to average, low-code X that go-live our just we product example to to to meet cycles an to our customers. Tier regular of for model. in innovative bring four business system delivered live platform of is objectives. distribution to recent of And shift a timelines partner through Duck new we them. perspective, in in important our insurance help the much to set From functionality that engagement months, sales the exciting deliver products, Insurance, just power platform value Creek insurance. and activity, cases broad broker highly and production with their industry for many these better their to that basis. and extensive product a was significant SI innovations a new of value loans This new differentiator including of six generate and implementation new small market release The time is approach

new that done of is During Creek power our of LTI, more domain can Duck will innovation systems can digital and the automation and showing platform the This platform. by third-parties the recent Duck efficiencies create Tier quarter, to This released In updates OnDemand respond of Creek new customers. our demonstration enhance from – our expertise it's we shared power partners a on-premises that partners, and a implementation they new embracing OnDemand to to insurer Creek SaaS At platform products with deliver a transformation. self-sufficiency, of more and great the value regional Mutual to as their to Benefit migrated webinar, for requests how we've SaaS a together model. customers. significant our support partnerships premier drive example will to a model we successful installation Group. our of agents, integration operating of is the meaningful great one quickly deliver One industry several Duck knowledge X target with the kind who carrier true effective

Creek’s will it teams, inclusion to Duck us building our Duck our Chief senior Courtney critical Creek Courtney strategy. strong People turn Creek develop our of grow I'm scaling recently Townsend in I'd Officer, priority grow which company. culture. to partner joined where right team and diversity, a is that excited I has and like Before Vinny, Courtney as drive expand require with our our our the she part and the maintaining international management equality to new of to culture to over lead efforts with promote transformation insurance as on team, a this and will team. while we to welcome to foster experience newest within Duck multinational member We're great the our footprint. continue key growth

up Let me the by by in performance Creek fiscal how segments the is our and for being itself pleased clearly core P&C that's market. far OnDemand all establish adopted reiterating SaaS so the year we industry of wrap platform customers are XXXX. with as systems across Duck preferred

are well-positioned the it's the our to primary build a beneficiary early P&C We digital become as the moved of industry in upon to cloud. success to transformation

you. our profitable to Vinny of over build to the time. opportunity We are business turn much over CFO, us now to and success excited ahead by Vinny, will date Chippari. larger our I over to increasingly a it

Vinny Chippari

SaaS subscriptions XX% on-premise results review the third In timing life quarter $X.X full was of and service with our engagements down $XX.X from our prior up for in XX% year-over-year. up year-over-year total the the was period line revenue the XXXX. due Total recurrent year. in License million, year-over-year detail year-over-year. of of our million, business. million calculate and is year products subscription revenue, total the line Services prior term ARR, fiscal X% Mike. last revenue Today, of will as of I of and in licenses was particularly revenue month in fiscal second provide year. and of and expectations hard was ARR year-over-year are XX% with for SaaS expectations. up to revenue. renewals. XX% primarily some represented the XXXX, recognized software which the Services fiscal XX% million, to revenue and quarter $XX.X our to subscriptions scheduled annualizing $XXX of comprised was our was second February quarter year a revenue, XX, XX% half SaaS $XX.X strength by $X.X to revenue our Maintenance SaaS our as revenue we show momentum strong the revenue which guidance was up faced X% continues of Thanks, solely subscription revenue tied from million, XXXX up of in to larger reflects start QX, Within our we period. comparison our the million, in second

a generating is and revenue in ARR are subscription last month SaaS a the that time. time reminder, a of As can during of snapshot contracts period be impacted by

example, the our included in generating as within largest the ARR XX. deal as the XX, For began February range. our XXXX Retention XXX% is February recent Dollar Net and of in revenue was above SaaS quarter number quarter of historical

on products large gross for SaaS a our years, We past to Net range new within in XXX% in Over to a operating historical SaaS of our Dollar fiscal later a customers Net recent our mix QX to two existing has Net SaaS The of early XXX% opportunities. currently as the includes of driven of return of accounts Retention SaaS balanced year Retention been a some in high existing by DWP combination in result products land-and-expand growth rates, of relatively Dollar was quarterly quarters. and sales to retention sales our platform. this Retention Dollar expect strength pipeline range

reconciliation detail. more our income Several GAAP the are financials provided non-GAAP of review non-GAAP statement press in let's of metrics and we release. Now in a these to

our XXX.X margin million gross We basic loss in a the of loss growth items. or second moved had well strong the quarter First scale slight $XX.X in fiscal of quarter the year million. continue to scale a second in based Non-GAAP down expect versus average on timing our by in $X.XX a had generate was quarter share on or of and resources a continue expected, from compared the operations margin share to to Subscription certain gross performed was $XX.X half add benefits million GAAP the as for a $X.X $X.X profit basis, operations. in gross XX.X% million. additional million outstanding the Margin were fiscal subscription gross we margin of quarter count of per and weighted XX.X% net in XX.X% XXXX. from Subscription the decrease as expectations. revenue we quarter slightly and margin quarter QX we as we driven the and

quarter there of stages platform. performance at demonstration margins revenue above expenses in strong a the to deployment. of and reminder, level expectations as the to achieve a declined utilization the line in variation SaaS subscription our Professional slightly can begins believe margins in our our timing gradually with is services sequential of margins XX.X% an by The As expected. bring We decline timing from scalability be and to are sustainable due period came quarterly for professional performance year certain new early rate. when the sustainable important margin hiring of in and the contracts plan of increasing service of a in our recognition the prior to down a

revenue. period footprint reflects Sales revenue of from year in and as XX% a up prior the sales for Turning not revenue based XX% expectations. X% approximately Adjusted XX% and on R&D quarter expenses year increased partially income up to $XX.X by prior as our related on or were did events. in COVID-XX $X company in period. were prior year XXX.X XX% of The costs, of to which of year share revenue. investment expand net was from the the million efforts revenue, was for million G&A offset prior quarter costs as was XX% costs or margin. and attributable TV the a continued and in primarily weighted percentage diluted engagement percentage expenses, the or expense $XX.X to average public investment consistent R&D EBITDA percentage savings from Sales million increase a or marketing million exist with of is the marketing year with a outstanding. Non-GAAP continued growth prior line $X.XX of technologies. prior revenue, EBITDA product operating the and based shares increased slightly from fully XX% expense on The adjusted $XX.X period. per year global million

in debt-free. the $X.X period. million million, the quarter flow, we year balance the negative the negative is to flow ended in with investments cash due million flow Free to in prior in cash, primarily guidance sheet remained quarter we to was to now Turning a and cash $XXX short-term third and fiscal and expenditures. capital cash with like equivalents compared improvement beginning cash with the The free finish quarter. I’d in decrease $X.X

We projected $XX.X million. $XX.X to million. to revenue expected is $XX revenue be expect are $XX.X at gross million of total Subscription XX.X%. Adjusted margins XX% million to to

We And range share to expect adjusted or positive $XXX,XXX. a loss of net $X.X our million and between $X.XX. per loss EBITDA from million is non-GAAP $X.XX negative $XXX,XXX to $X.X expected to

the our raising are outlook to we following. the For XXXX, year full fiscal

expect $X.X expect be Adjusted of million gross $XXX we is million. at to projected million. are revenue to We XX.X%. Subscription $X And to to to expected adjusted $XXX.X EBITDA $XXX.X XX% of million. million million $XXX margins revenue

have breakeven income net non-GAAP Please between note non-GAAP the for from made adjustments is range methodology to per $X used will And effective we Our to fiscal this our to $X.XX. income. quarter, $XXX,XXX non-GAAP two XXXX. expected that and income net for be share million

to that rate. applying tax non-GAAP taxes taxes. tax income currently of we note rate non-cash by non-GAAP is before XX% Please at now a arrive this income, to are calculating First net a

calculated share continues full Second, year that a Creek share per guiding is net To a perform we non-GAAP profitability fully being using at diluted the to high counts. Duck are very income the summarize now level. for

their support high and deliver an growing we years, customer interest improving business our we rates like of foreseeable This competent for reflect believe up And ability which top that cloud profitability can to to for the Q&A. as Creek strategic trend of is expect we’d OnDemand adopting call for value results the generate shareholders. Duck come for we for Our growth in benefit essential attractive have an plan subscription a years and strong the to We in to to open combination adoption. revenue line future. with the coming meaningful Operator? growth part that, are

Operator

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

now is line open. Your

Jackson Ader

Ader Great. on Thanks Sterling guys. is Jackson tonight. for This

But the First can question, Mike, of conversion any on of right, an a program. migrations, kind don’t formal there’s you know or migration the couple on-premise you us give there? a cloud. mentioned I strategy to update if the

you’re And what moment? base so any the on thinking about customer update existing the on-premise at

Mike Jackowski

terms are of our I’ve their Well, launching cetera. our they’re Jackson. to and looking points position if I businesses, of going align past lines solution. that customer find achieve perhaps SaaS the Thanks, our products, to inflection of overall We new into will said this what et better Sure. in to strategy those say new is strategy that to will business in strategy you

all of really they of achieve strategic having ambitions we’re terms with in conversations what moving understanding, their are to forward. our customers what So want and

I’ve just on-premise So cloud. prior going the calls, after for up said we’re not moving customers of to go lifting sake aggressively to as them the and converting in

business the with look We by progress. case. have actually already look broader we committed almost when our converting And full that our have cloud Duck to migrated when Creek Now know will have benefit now production and new larger in we’re the two we’re new working deals. And and process. that by in a customers and customers the that it, five that deals three encouraged in are they at that are very ultimately like I customers on-demand,

also about products I products, existing sold in of book Duck we in some base Creek cross moving Duck or that on-demand. the not business additional the existing the two only prepared we Creek of the remarks, some In are into fact, talked the

initiatives. broader the we’re some of delivery So and we’re expanding the their scope with business aligning lives the of that also platform and go

of temper about enthusiasm but everybody’s We��re excited they’re terms front of I want ready. when go we’re pace. going also opportunity in on to this the the in to at So pace us, sitting

difficult forecast it’s to for they time. me occur So over will how quickly

Jackson Ader

to update. then, that you’ve down of into expecting for Is follow-up kind in net initial that the you’ve retention, this seen existing quarters. little terms fact the bit it dollar to Vinny, in just that any just due teens oddities range, Or seen of big you, XXX And quarter? than maybe bigger on it mentioned, and really some Thanks great. getting customers is happened land the the in like past? in is of recent that for some the maybe getting a Okay, so to you up go jump last that

Vinny Chippari

of I Jack, the been last has over quarters deals ongoing to and expect mix trend. more the that No. be just we But about to immediate an think skewed don’t the expansion quarters in base. it’s mix recent existing in couple

Our land balanced historical back is moving range. and reasonably down And pipeline that between split towards expand we we’ll start more deals. think

deal as of bit a of upside aberration was to dollar retention really trends. any specific quarter terms in just net this think opposed an and I So ongoing

Jackson Ader

Thank Excellent. right. All you.

Vinny Chippari

Sure.

Operator

you. Thank

Our next of comes from the question Sachs. Goldman Chris from Merwin line

open. is line Your now

Chris Merwin

the Okay, much for question. so great. taking Thanks

the Just quarter, I expanded offering is think wanted in key upsells. X measure customers true two to Tier the their that ask about

taking? business other deals would Just any actual – you. – lines curious was you Thank other in other expansion they I appreciated. was those were going can there were there you was share color of be any into specifically provide terms it on there of the detail Just if could modules or just

Mike Jackowski

Thanks for the Chris. Sure, question.

and We’re with community. momentum Tier pleased the on-demand the adoption obviously within of X

offering it showcases marketplace. I advantage really of our SaaS in the think low-code the

we subscribed of In our core to these part tied expansions terms were deals were that the of that they as assets already service. on-demand two that I the about, saw that to talked

So DWP a in a the using new expansion as expansion of to product them well was level. as this case, the committed line, it product into

it’s then platform example because expansion with more. great is very our they’re their implementations for carriers one that of ongoing the that initial SaaS success is success this just account. adopting than success, buying just more within think time thing we So pleased And seeing a and we’re that they’re seeing first with very, of an

example it’s carriers. again, great Tier of a within So think upside a X we future

Chris Merwin

just you Thank wins you’ve that’s you. Europe might impact the international. know when And Okay, share can you’re investments maybe there, start where to some been or progress particular. there, area investing perfect. of to in ask a about long-term its project. see just an wanted of I timelines follow-up, notable in I Anything one the you about about making I know

So you could share any, just curious Thanks. us. Mike with

Mike Jackowski

said, Yes. it a initiative. long-term Chris, as you is

it’s So lever term Duck think for growth Creek. really a we longer

progress our good investments. making in We’re

quality and continue we’ve We’re investments both pleased our people with in well the our that products. high our into as in brought to in EMEA product Pacific business and in Asia invest the we

then of they’re has Hollard not call, and longer. until And expect talked these our a with carrier success on to where a be prior at felt and continue we had us a we’re some as is in COVID with highly little investments to lot we’re XXXX. of points I that Australia, we think we’ll content I Specifically, Asia don’t call, launching insurance thrilled always got really is a year going countries I And I of go local proof our But build really because to said fiscal to localized and terms the within on some respected and about last live for EMEA notable momentum, that overall very going and be multicurrency capability Pacific. not time would That’s since billing product. earnings say it changed we to be helpful of our bit a brand to the think great. a little we just bit headwind expand known in in take

progress but I’m far. so So again, with the pleased

Chris Merwin

a Thanks Great. Mike. lot,

Mike Jackowski

Sure.

Operator

Thank you.

next the line question Kalia Barclays. Our from from Saket of comes

is open. line Your now

Saket Kalia

converted to click be the guys, could on just this just talk Hey my thanks have you the customer. maybe is conversion can hearing – again, to you’re double on of great. But those And just far customers taking maybe future here. decision Okay, understanding convert. what by said you driven Mike, driven a qualitatively, conversion that it’s activity, customer? thus that just drove those the maybe and cadence question, talk about that by from about of prior on conversion Mike, being for the you to questions what handful clear, consistently activity

Mike Jackowski

would Yes, but migrated a We Creek a feedback and Mutual how the they’re they nothing talked And remarks that delivery the they both Pennsylvania, interact adjusters. positive very, their with we personal very on-demand. how in lot of functionality. in a from the what about to certainly. I I small are enable do our prepared an did getting state giving agents, in of them just lines incremental really customers. with new the And existing is can better Benefit of capability about Duck They platform announcement commercial Group, carrier benefits regional say of and claims And they really their and terms it’s player. love

we’re them, sometimes new weeks. a With deploying as basis quickly two very as repeatable in capabilities every

because very And So already servers, it’s of terms points it of think puts continuous going conversion. shop conversion, very technology internally we up because it, we’re it’s deployment a infrastructure. again, excited to say technology. have really I that on for forecast, them. drive on opposed for a price cadence perhaps really this think IT can driving just just And looking carriers have to me they a I into And difficult have I to access inflection with then little a small to they When a in release them. of strategic really straight whole a, more cadence up different would for forward, already meaningful they’re we’re straight pressure they as these from type of

means don’t running of how off. them of a have Some that they’re

So for point just good them. not in a it’s time

plans. going me that my strategy or that of strategy of I was insurer for software around that’s in in immediate aligning kind the not keep is way CIO of my not around their vendors’ strategies we perhaps X times, behold was And to experience. a roll. large some – be doing something had I And at based converting on prior own budget Tier and into just a the

new business of bring consumer. to about Do market? solution. they their to great initiatives. for that could then launch to in they we existing channel, value SaaS looking those want inflection bring Do the market want maybe are new points, to and a know really we with We’re a alignment product And an product strategic our talk perhaps direct to

So don't these it's very always intentional, to to me funding back but some unlocked of and for they're this Saket, for your know we question, is because that, very predict the to get strategic of difficult going budget cadence initiatives. when

forward. of like look us it'll cadence go new So origination the for we as more deal

Saket Kalia

in impact of sort what us Vinny it of that remind topic you've to can it. we're seen to cross I when level you've well. sort can sell seen also happen? terms the as set, Got just follow-up it. conversions just of stay for But been you clearly of economic there mean, sounds conversions some like make lead handful of my in that for you, sort the to of only sure again, a conversions them. That's Got understanding helpful. have all and

just can us the data mean terms you to give So any a what of in financials. could conversion points

Vinny Chippari

Yes. Hi, Saket.

an kind perspective, two apples recently. economic apples an that from to we the give me let comparison with you and then did just of So contrast

So same generally same DWP, Xx be equivalent cetera. to you had deal, of an call X.Xx. if a move There'd products, uplift on-premise on revenue demand speaking, it et to

X.Xx fee. versus maintenance its of term an demand So license to Xx plus beyond annual that

looking X.Xx just an revenue Now it's were kind apples you of do an recognized that upfront. to to you a off at license just comparison, But as the reminder, income statement all Xx revenue. can't is just because if about apples

it's basis. gross profit nearly But revenue So and it's accretive the a In certainly profit perspective all consider at accretive obviously on more dollar sell. licenses profit case did of magnitude even obviously the two revenue can't them that not profit from because the a the gross recently, almost you the up both accretive, margin. margin because of the dollar of it's conversions just accretive, we

they those this at point contributing, relatively maintenance was deal. much recognized. – the a income for of were they license was bigger they were So our went already small statement been having what on with And with amount

look to So a conversions opposed sale these happen more conversion new like much brand as economics. to

Saket Kalia

very That’s helpful. it. Got

Vinny Chippari

make that Does sense?

Saket Kalia

does. Thank Yes, you. that

Vinny Chippari

Okay.

Operator

you. Thank

Brad America Bank the Securities. comes question of Sills from next Our of from line

line Your now is open.

Brad Sills

to few I of Hey, that's a about custom of ask lot wanted of guys on for majority being the run This legacy. Great. technology on thanks about general And cloud, industry. a nice the vast is mainframe congratulations industries a the still. is the a where forget one quarter. just and systems here – question lot of core built, there's

for do do move provide in terms the so. the are towards from I and to cloud that hearing just a of the to mean, is, you modernization? What customers cloud catalyst you. how what cycle? is So think Thank of adoption kind industry my does app over you going for question

Mike Jackowski

yes, do in is at the technology systems, are we their stack. out And point enabler for always. the what to to time overall short this The a are of your cloud Thanks. point, revisit legacy is answer not there carriers think replacing great we majority

processes, without earlier cloud a of commercial the went using meaningful new live a to the They fingertips access a a that especially that. of carriers that implementation are where means in all do Tier many is them a timeframes in new working infrastructure of via consolidating available capability carriers, great well just to data, a them. into is lifting would And and legacy they're four the want cloud. just at their putting the of world you're technology legacy of doing just just technologies that's as opposed we're cloud all in for think months. about the types their employees a we infrastructure, remarks, inflection leveraging those the information when our be talked already to cloud, one up COVID then noted browser case making also, of and in remotely. point to we prepared I speed And as platform But know And the X feasible remarks, I on-premise the and Creek Duck what's of that the Sometimes, customers difference. what product the this some some in in a of about not gives as converting just just on worrying I And really my and is as systems. the said, post cloud data

that's systems. core at changing think the conversation their just we as look really So, carriers

Brad Sills

of if That's the more, the you you achieve how the for one are of great. subscription you have remind some target scale, wrapping Thanks us subscription investments? good are margin? continues may Can that terms you're near-term coming in I Where Where and is kind the if puts scale and over subscription for in mind key and show you a so the much, takes Thank if as gross time? What And so real the scale you, do Vinny are today for much. long-term. margin And to gross you where levers there's in of then what especially are cloud? Mike. and year-over-year. results

Vinny Chippari

Sure, Brad.

we've So now. we said, into right over subscription although at quarter, probably longer-term, higher where margins the think We're to low XX’s. we for not a and was expected we expect normalized this XX% are get that we than

mid existing basis can running up, on more a To around customers We right of scale just that in technology. part X, benefits. the is normalized XX’s spread across staff So probably and it X scale we're pure points, X, now.

automation into it's rateable And think leverage getting we we think natural up the tools, the just XX’s, we a mid kind go kind it'll as of quarter-by-quarter the from staff. more step of using progression up out be existing So around future. fairly a

improvements going can probably So a mention bit we We this step little think this see did do we think this to half rate here. we're of gradual in quarters’ from the down second from year. we before,

the yet. had in deals both were little we a cost Just were – revenue bit and little weren't of because revenue we've first that burdens timing a our generating this And half hiring plan. year. from we timing not in behind benefited We some fully cost

continuing second our to operations the steady see out through SaaS year year, we'll in are And we We group. and we this think to hire of a progression. get as aggressively half next

Brad Sills

Appreciate Vinny. it. Thanks,

Vinny Chippari

Sure.

Operator

Thank you.

comes from question Roderick Tom of Our next Stifel. from the line

Your line is now open.

Tom Roderick

Mike, it's ARR a taking growth. for start thanks that are question of I handful me with the you obviously fantastic Gentlemen, some for let mean, a here. driving this questions. of levers

the product the and about years to words, the But DWP over. a a the more take in I easier. helped sizable in is DWP a would carrier I'd lot customers being that little of bit they we cloud started for all other platform? In they're see think accelerate moving cloud, the of cloud. to their historically is customer putting make percentage of towards to seven seemingly of does that to about talked You've might sort element your love to move that What cloud that five the hear once

fast them here a different you So about more seek little move as I'd just that once you love line the DWP can to and items efforts expansion cloud. go get and across to bit the products how

Mike Jackowski

temper the sometime the to DWP The terms do Tom. there platform. yes. are overall in industry fast answer know cloud that speed. I our factors out leading accelerates that to continue But And the I how ability Thanks, please is, with on we bet. of we're best-in-class think that industry there can in the fast limiting are You that in do over can occur some this time. grow believe how

scale the platform. side This state what state. know they are some line ways simplified personal and of homogenous There's two book need look new – by to quickly. you that it. want that many personal a a regulated in I need these more is but product at is there's a to So, the carriers more of more I'll have to set, But and say business products, still they onto you lines get scale that more especially carriers a

They states, filings have filings have of cleared by those get specific some states. time. they in they have get to to So ahead

costs, the the on has filings premium be of filing the kind to carrier react wrapped set regulate states personal are lines. ability implementing pole then more disparate because so they platform that it And can sometimes specialty product for fast their will a type to product will, implementation filing those that, on the around commercial that products, you're the complete do is and can and And the right, up another how and lines long lines, whole Some of implementations in for. maybe specific tend line on. tent putting some they're you use that and move catch get they go of to there's if

one implementation So for But I initial the I talked might each would month broader around for about, and is, those auto we're an a that do of be now in the put that carriers company mean such was can the different in and project. that what think, about we a showcasing product, discussions up instance commercial across four products we timeframe. a

to that that the the more platform. can start you can execute velocity, on with So premium more more scale we the

maybe process, the perhaps speed bit And forward. more if development bargain really your terms that's at can their we to we we and be but Tom, agile way than we filing this little look it. do and continue with of for a going in more So implementations carriers product more know help speed can

Tom Roderick

a a being the on point helpful, keep just Yes. on of That's fully there? to going? with And big that partner Can of are What end product talk you're bit and the Just aligned in appropriately your building practices? you marketplace the out more they're doing implementation to partner sort cloud? to their follow-up for really the how innovation how talk the is sort the practices your that little their little about pole that's sure they're bit implementations, bringing making Mike. sort wave trained and tent. on buildup wanted about I really a partner of staffed more teams long the of of

Mike Jackowski

of with integrators basis overall heavily And report overall work strategy. our large recurring partner indicated a community, of have that but going we earlier is in their I've and the for not we Thanks Yes. tenant systems that. And to that quite they're we're investing really and delivery counts, as integrator, XX systems on and ecosystem our practices. partners over a on overall all

our how that in helped about prepared helped there. was could LTI with and I fact, and Mutual hollered Group, In us talk there delighted exceedance remarks, Benefit I us

and of we're look the their overall partners because at is now and of overall we strategy partners a getting look strategy. a can with really now diversity who their and diversity lot love aligned fit So customers choose really and at best variety of

what these that ecosystem sorry, many same cheaper, investments on And in investing and and think they're faster I'm delivery make in coming customers. of back Tom learning the SaaS and more are we that I we on And making developing around really bring hundreds these to the our of are partners practices. see thrilled carriers in the at see can success cloud your forward our University, – that their time, doing? easier, with the accelerators. they're they're behalf just of through allowing resources our up do technologies that or Things really and to much the latest they to Now how the question show training us overall Creek and Duck investing collectively joint they platform. We're and customers the our of

Tom Roderick

you, Appreciate back it. Thank queue. helpful. the really That's I'll Yes. Mike. jump in

Operator

Thank you.

of Blair. next William Our the Suri from from line Bhavan comes question

now Your line open. is

Bhavan Suri

and the the you follow-up taking my on And of competitive pretty bringing think of content commercial you I ability that? critical how think partner's partners about lead content and we as especially been into How commercial contents and where the and around just Hey critical to And little about thank to line are in about changes in at How differently do for you others content, guys, play question the seeing a should more right? space, start. love templates want templates and ease it So space. especially I you to content content any I there questions. of you have material idea what that, sort implementation. think to implementation? perception attend have is, the guess, least a the been environment in commercial, has pretty drive that my of I'd the that sort

Mike Jackowski

really of listening of content, aspects. the Bhavan, in for right aspect the line Yes. that about strengthening vertical is those business you're very with investment

marine a much, our have of your just of outside inland or very business expand our very those that compensation those But of content workers' deeper. in products. of functions we’re really at within we in and at. integrations lines some But And which and parties. and outside best at the require bureau features point, being also businesses, being need much line to specific the strength insurance very, these you third best So going strong lot to specific of the

an you So pay for announced with compensation. that billing with instance, Limit Split Studios go we integration helps us or as worker's

we is think in speed carrier a about So They a And we investing basis in get platform Asia then the more Australian Pacific worker's the live that more insurance integrated An allowed regional into Exchange directly allowing the with a that a example effectively. Sunrise. have content as velocity and invested called bill that Ebix. to region, or compensation to Sunrise well. it's in on plugging and we

we we So continue the the implementation make out of why investments more that's those of side because our announced we continue to pre-plumbed, we we're times. that can that that last points, integration partner and have six we going in in the to can these more to box, new partners speed invest solution know the And fact, business. program, quarter, in

Now, integration integration as our in also partners systems well. invest

to shows customer actually do go productized, but a isn't to have as that they number it the days of of reduced when implementation. up work an Some

those So implementations them we're constantly practices, encouraging make and easier. and in accelerators invest those cheaper those to have

Bhavan Suri

have as I just and got it. think moat guys have around content, lines do a but on a which I certainly believe competitive guess, I it. the then And you Got commercial follow-up, again, you environment, the about it,

in the do space. space I competitive out come certainly, or They competitor think, proprietary think space? they I knowledge and in there. of And in guess competitor changes, that largely are you where doing integrations? the behavior try deal larger change about have How to the guys you a you the from this there, out can great you the any largest – more after

Mike Jackowski

common have this observation No. a would actually won't but name the competitors bureau to when our I are comment legacy-based our this say, say, might've and that ability they're overnight. competitors is it. that the And look them, no, strong I but depth advantage at industry calls, part past I architecture, our of somewhat go our nothing this can in would I more area. support is in the functional I a But really I of And note. appreciate but of we some you referenced of not business competitors, problem the in this of content. doing that there's see in solve stronger of

forms thousands thousands our to perhaps that forms of box. of have deep you a we and acumen, pre-integrated We our support point, you forms climb that's the can with out of competitors. business We such why bind have thousands those have sure. some a industry to the tough of are for for around to insurance and pre-fill an actively to that policy. out when And those when real hill software that's have And moat and your issue aspect to insured, we need

Bhavan Suri

both understand to investing I'd quick of I you had, little opportunity. That's love you are No. grow guess touched investment. sort and really U.S., a And about one I market bit sort helpful. the follow-up, of international to about guys thinking middle international how

middle Tier Thank middle You X concept us Europe, penetrate market X, of especially have have little X, Tier a like you. think space more how good international that X, Tier helpful? about but of sort but you investment would just and obviously type number a be find some a you customers, what Tier looks good market of customers, that give

Mike Jackowski

But regional Creek that comment I really only lines to your of $XXX as go rich premium carriers superior great of the a all not capabilities works with lines the proud businesses, about of over Mutual to also have carriers Xs complex, that for our work lines. to done Benefit Duck then of very, scales then commercial investments the making to And look for just around of Tier as we've Yes. is is functionality who I your AIG would single multitude scales in we a carriers box But that another personal of we're question, talked common the investment like market, well. fact very player. that Group out them. sizes, we're that one about middle example. in say things are very And a we the thing platform large these carriers back with some also across million

all time. to off and focused think regulatory a another that's advantage middle well localized some to we in So with we those is forms, explicitly some million really, carriers specific years think make that America, carved billion a up are so an have today. think content we we – And we've market those team is also several And investing of commercial have all us in But they I that the have North that problem on the of segment that through in that done pursue. we market some worry carriers low premium, want the we there. problem. on an very working but that that why in hundred these investments team interfaces have in done code our internationally platform, advantage couple the have way of of take premium that business again, we've the over why our that's a well market. for reason And about. more of to really platform provides And We are we're markets of of that

Bhavan Suri

the guys. especially went first you question. you. the appreciate taking Got Thanks Got my questions to, color. Appreciate Thanks depth guys. in my you. Also

Mike Jackowski

Thank you.

Operator

you. Thank of Instructions] from from Our [Operator Raymond line next Brian comes Peterson James. the question

now is line Your open.

Brian Peterson

taking question. Thanks gentlemen. the for Hi

one Just me. for

could purchasing, some hardening think do should So and ultimately you premiums go IT their typically DWP? I of the that through market, do in and up. to Thanks customers, that we're see of into Mike, how from as guys. thinking be of kind what What through get of insurance seeing wanted to just a ramifications they we terms

Mike Jackowski

doing seeing And they're on rate that the your profitability hard taking Thanks Brian, based say we doing those talk and rate aspects When what are around in their the that book of need around seen we're rates seeing we carriers means that They’re success because the market. rates what it. it’s hardening a question, are the broadly that are having of Duck surgical taking. for of don't time what taking good more Back on. are we as history. we've their more carriers prices, are Creek? a when to more carriers or market do market, the loss about their across for improve their they’re analysis is The to business – they trying the more question to today, up raise a market. insurance understand a increasing those The trend are

and at platform I that X% instead to rate why book, blank is these they need to increase small a one in taking maybe will strategies, perhaps get mid-market so premium, XX% modernize changes and much another successful increase a segment they for test take more velocity for it So, of surgical give a now popular the segment leave means of forward. more the do insurers rate in platform X% them increase out when want segments. want to want that to and And to we with they access them be that these market, deploy they And they that. with a other book think increase, allows a make a more better a them, and maybe of be to them moving production, hard reason with more know their looking is data. commercial X% their then this They that are to surgical

to market. in hard we’re how to them going they’re you’re through So, agility, about their as them very thoughtful with more give way some engaged work this thinking conversations

Brian Peterson

Mike. color. Great Thanks,

Mike Jackowski

Yes.

Operator

you. Thank

of Our next Walravens JMP. question from comes the Patrick line from

now is Your open. line

Patrick Walravens

modernization API-based then to One I it’s Founder if did sort API book, models bit you’ve that Hey is but the time you on-premise. Twilio to And you. arguing read that. wrote, do your Mike, broadly, two going product a this the And secondly, to he’s clouds, I and congratulations. called by claims know guess I policy questions on more progressing that don’t my add sort let Thank are look how if Great. of billings? of Ask over is, talk cloud Your CEO about me it little at Developer, what have can And journey? basically of I

industry. love on And insurance how might just so I’d thoughts about play the that to hear your

Mike Jackowski

very will you’re around overall how experience. through the is on say I’ll for often, and with way us. new a technologist. It’s thrilled strategic and foremost question get it’s not the I’m I what is Pat, will, very our proud platforms my reinventing insurance. asked we’re about as is, use I to in API you this spot dear can carriers all the APIs say of first near heart And I user cloud. And very system the the think and if

embed have number means want use us processing if an that overall a a will, to transaction which API they quite our that’s customers because and broader system, through as talking we popular. within in user experience strategic you co-integrate to a maybe they’re However, of an platform headless the experience set or cloud user existing

APIs, just I’m team done. we journey a whole journey modernizing RESTful and our enhances whole that’s it’s going a So, a that our And going never through we’ve stack. say, to been have our continuous continuously APIs, API on

train and how which the Creek because it’s means on APIs solution a being our a APIs use overall University, way have We Creek our Creek of Duck center platform. Duck successful on those of top that Duck to through documented of big through people we part are

going to into continue proud know are drive because going to products we And So, a to try that in of we’re to very, way. invest, to to continue profoundly a go very it. market different API and carriers we’re an using market

Patrick Walravens

And look That’s further area super than policy you ahead is at helpful. one claims another billings? like if

Mike Jackowski

suite to we’re sure balanced what parody we across claims a express I the overall that suite. don’t policy whole API our this and investment how historically much our ahead, the can’t into has put perhaps and to I we year, make call has party that file really really everything at view, but you I case believe even looking because past think that’s the been

these nice a I continuously. continue we job. X, the iterate on APIs beauty Platform deploy is So, we’ve done here’s think And and the of Cloud them to

strategy like So not time. the all once-and-done, a upgrade big it’s

out refine the all and to We time. these to these continue customers push

that have us cloud we’re our thrilled So, with gives the and consistent overall customers. more the release with a schedule advantage to cadence

Patrick Walravens

you. Thank Awesome.

Mike Jackowski

Thank you.

Operator

Thank you.

Davidson. comes Our next Alex line D.A. the of from from question Cavalli

Your is line now open.

Alex Cavalli

and again is Hi Rishi. for congrats all. on This again color a quarter. solid Alex Cavalli here the for for Thanks

to What expenses itself? guidance are hear I four if potentially coming per and what’s going EBITDA factored over You guess, been office into back you adjusted your could any se. that mentioned the wanted you’ve Thanks. quantify guidance, calendar for that to back XXXX of cost the year, the the are well, the quarters year, seen the normal plans last to calendar savings and I or

Mike Jackowski

that if that on very Yes. been calls I I’ve doing person Vinny, date that We’ve But we expense back could – our that, been that we our move got an going on for earnings investing we How offices about doing of going about our more in of our perhaps And that’s reopens forward. to and business across commitment. performing savings, to in give to a and don’t that Duck has some But saying side that on manner. digital we will culture the what of openings I several travel flexibility most a just plan that the forward. Creek. opening have have that we’re in employees the fall then that of talent we some way our a have with one when on location it, the our you called I’ll about our some seen I’m to belief to environment also side and of forecast notably, talk Formation, target some in companies. office, up big talent expenses let past to We And planning workplace basis. ongoing of we expense where moving for personal about to do have our – some an in in have know this part virtual will that we’re platform going conference. marketing moving virtual but talent policies and plan July. trial on of savings certainly to a very Vinny know talk everything being virtually less which our is with we’re acquisition. a work level But that high pleased and overall entice the user’s winning come do yet. a been And the flexibility And largest lot

Vinny Chippari

Yes, sure.

at from we So, in line. bulk seeing P&L those of came more in our the to on and might’ve so, to have be marketing running like it revenue the That’s perspective And XX% heaviest we’re sales in the expecting quarter. think events the sales and original about for where savings basis. are the a of XX% a marketing where way I T&E the and We normalized of is budget, course. XX.X% to and favorable been

So, engaged we’ll we’re probably fully travel events. in move back back towards and that once

We’re that happen for to not immediately. planning

And our So, we’ll coming in quarter out next have in back a how year, coming expectation we’ll increase we’ve see more and bit then we’ll much but a as an online. fiscal evaluating following gradual for the are get things that we fourth after new the quarter, little of a budget got a not be quarter gradual T&E that. there’ll – be in

the any that rest expecting spending to we’ll we year, fiscal event certainly in this virtually have – of rest rest We’re big for the the don’t not of doing year. of the be

So, short is, year. answer get the some next I be have end and get we’ll when towards of in think new then cycle through we’ll we we’ll guidance the this few more a the budgeting months,

Alex Cavalli

Thanks.

Mike Jackowski

Sure.

Operator

to CEO Thank closing turn Michael over call questions. I this you. the remarks. Jackowski, I further At no back time, am would for to showing like

Mike Jackowski

everyone that And wrap our interest reflective really in our call. QX of in your customer subscription highlighting our you Creek. we’re pleased XX% current of by substantial me again, up Duck in interest appreciate growth earnings participating revenue with Thank growing on-demand results product. We let in very for our and Okay. our Creek is certainly Duck

appreciate today. run opportunities the everyone excited Creek’s Take you. we’re industry to Thank transition care. healthy. be obviously joining about growth I So, core continues Duck And systems the in safe the to cloud. as in please industry, and

Operator

today’s call. Thank participating. This you concludes conference for

now may disconnect. You

Duck Creek (DCT) 6 Apr 212021 Q2 Earnings call transcript