Zendesk (ZEN) 5 Feb 212020 Q4 Earnings call transcript

Company Profile

Participants

Marc Cabi	VP, Strategy and Head, IR
Mikkel Svane	Founder, Chairman and CEO
Elena Gomez	CFO
Phil Winslow	Wells Fargo Securities
DJ Hynes	Canaccord Genuity
Brad Sills	Bank of America Merrill Lynch
Hanna Degen	Piper Sandler
Stan Zlotsky	Morgan Stanley
Jonathan Kees	Summit Insights Group
Drew Foster	Citi
Jeff Van Rhee	Craig-Hallum
Samad Samana	Jefferies
Kirk Materne	Evercore ISI
Koji Ikeda	Oppenheimer & Co. Inc.
Parker Lane	Stifel
Patrick Walravens	JMP Securities
Derrick Wood	Cowen and Company
Arjun Bhatia	William Blair & Company

Call transcript

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Marc Cabi

Welcome to our Fourth Quarter of 2020 Earnings Call. We're pleased to report our results.

Joining me on the call today are Mikkel Svane, our Founder, CEO and Chair of the Board as well as Elena Gomez, our Chief Financial Officer.

During the course of today’s call, we may make forward-looking statements such as statements regarding our future financial performance, product development, growth prospects, ability to attract and retain customers and our ability to compete effectively. The assumptions, risks and factors that could affect our results are contained in our earnings press release and in the Risk Factors section of our prior and subsequent filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10 -Q for the quarter ended September 30, 2020 and our upcoming annual report on Form 10-K for the year ended December 31, 2020. as to these statements or statements in expectations obligation or today’s to no our conform law. to to except undertake update after these presentation changes We by required actual results refer statements. today’s regarding release more for Please information to forward-looking earnings

we as both GAAP call, our or isolation a The substitute financial and in considered GAAP present should from measures for, financial be will financial addition this non-GAAP measures. During non-GAAP to, information. not and

measures, Letter, additional including financial measures find You certain the disclosures releases those in comparable earnings non-GAAP financial earnings non-GAAP periods with regarding GAAP or reconciliation can such measures, press these the release and financial today’s periods. in prior prior press and for Shareholder for

All of those are available website. on Relations our Investor

us, and I introduce behind on. to like have come that Mikkel would with him Now

Mikkel Svane

hope so you. and me. Good Thanks Thank everyone. Marc. hear much, can me afternoon, see everybody I

customers Yet unprecedented and so many perseverance they world. pain the that over throughout has year. for was our this with shared we annual we’re of around So a revenue that in XXXX achieved with of about the again, I'm and XXXX, caused much people their very which us year with the turbulence so have our a solidarity, during proud grit, announce so inspired proud of that. over $X billion to the in February originally We surpassed milestone target have course target back we shown

be quarter, anything service. of to to champions us customer we truck In to And course, we their of passing So thank you do partners great the your all brought trusted are online shift for demand relationships. changes continue of also for you strong XXXX first-business with big that many can course, us of fourth and we be course, will are as doable accelerate and customers we your to partner, thank entering really new our customer the trusting by to in observed will and and of pandemic our believe solutions the that to your this existing momentum both customers, and from robust by. models,

already our have in shift you all our our pricing, in offerings. continue see that So to packaging, and in products, and reflected seen our in will

proud with a of five also and believe next my we take five foundation as XXXX, announced to leaving express that we for We in the to Today, and triple over years. over is to are we achievement this it our our here strong Elena. very seek And the Elena more than lays revenues appreciation years. several I gratitude next almost Zendesk Zendesk opportunity for has been to months. Elena us want

the billion kind of same as did revenue Elena. so anniversary our $X So, you

Elena Gomez

Thank, God.

Mikkel Svane

call being. I is she human has an decided years. know that to next course gotten transition to those cycle. know on appreciate have how of many And over Elena well Zendesk we least our And five through earnings here staying really at genuine generous, incredibly especially Elena the from gracefully

add an now for This today take financial not will this occasion I'm you through going for done you've say will results. proper upcoming plenty that everything of for and for to for you company. So, is goodbye. for time Elena the everything the thank to sendoff make ask But cry time to you Elena. that I be us

Elena Gomez

and me cry not thanks for appreciate kind making the Awesome, words.

and off of our around I'm an the start employees through X,XXX for quarter. with by all proud momentum the revenue close We thanking resilience unprecedented their all So, I'd and achieving out fourth of year world billion the like annual milestone $X our execution to in year.

XX%. of which I myself which getting reflects year-over-year $X.X reflects or delivered billion revenue billion For growth. there XX% ahead the full year of XXXX, kind we $X.XX of

revenue quarter improvement outperformance was margin delivered year-over-year. Revenue new demand the the Fourth also exceeding COVID. expectations from quarter of year and and our both driven our non-GAAP operating strong at our year-over-year We onset certainly full existing customers. X.X expectations increased by of XX% points entering for percentage solutions

impairment particularly Non-GAAP to GAAP from points bookings, strength points, GAAP due percentage by to declined business margin product increased travel and expansion, year-over-year. infrastructure. hosting margin consolidation. in $XX lower in margin driven X.X of the office XX.X%, by points $XX support in million pleased related space also cash in points the new Margin primarily and driven the up improvement to optimization Non-GAAP - organization outperformance, three costs scale from percentage fourth X largely revenue margin quarter flow was years. prudent points the expanded was year-over-year, gross our growth personnel and with are gross strongest for fourth up XX.X%, a percentage events quarter. efficiency operating our operating year-over-year. Gross margin our gross percentage by by X.X management. was our benefited million Free We was revenue largely due X.X margin the pandemic. costs expense and X.X

Now moving the on guidance.

new - growth. to and business Mikkel even more we is and become Zendesk business than important. be indicated reaccelerate will well every earlier, in first. investing be more Simplicity XXXX, We ever online As believe important our and an are positioned to for online reality, needs agility and are this more

$X.XXX growth billion, We revenue in year-over-year to billion midpoint. approximately the which $X.XX at XX% reflects revenue range expect the of

by we business. While our will to this growth, XXXX strategy scale continue is defined

to million. in operating range of non-GAAP We $XX expect $XXX income million the

said up million be rent with. in We in to our to next continue real than estate to San over of year the our to as expect changes payments Longer which for years to do company million million, to flow more we $XX range triple full looking the five the revenues looking, business expected to $XXX related our free of we're easiest as pursue cash $XX goal term, of Francisco. Mikkel XXXX includes the accelerated

are that to well-positioned fortunate to believe achieve large are a and goal. we revenue We We our growing be five-year in market.

and our all we in of to As serve product offerings go-to-market emotions our customers our continue to invest sizes. differentiating simplifying

As I'll so have last while this goodbyes many to been I'm I to company fun to the many decision - be work. forward next to five hard over it Mostly leave years. much to though more of Mikkel Mikkel the over Marc. made And so here the as several the And $X accomplished journey for I'll with more, The years. little finally personal I watching look incredibly milestones so over and couple said, for part mentioned, over a next grateful been a difficult Zendesk has now. billion months. that turn no longer team

Marc Cabi

for to three last as quarters. we've done up Q&A going Thanks, Elena. We're the open it

analysts We we'll our with with have all call And a of today, Phil question. Winslow put randomizer. the to open first the up

Phil Winslow

I wish for mega there - I'll my we had Thanks one question oh, taking go unmuted now. take and millions but I

Marc Cabi

Okay.

Phil Winslow

think Questions cetera when algorithm about about the sorry from suite you billion you are to to target target How comes the that? the on much over talked tripling Elena. the just follow-up Mikkel then you - do the there? next about growth Zendesk Sunshine How et new Elena and $X market years? Mikkel for think then a moving off that five up

Mikkel Svane

seeing. details business. expansion, a course analyzing additional that even all getting opportunity we’re strong we business. dimensions that But just we both And a Yes a about share we market believe potential of been the to ton in our ton, on indicators from very we’re like ton, a that our can already so, And we - geographic and the lot - where of are additional offerings I'm seeing that that - in current to model. of metric growth have not going we've different like market

confident. It's target. So feel a feel we about good We it. good

Our feel you. and will, is to course, update going of confidence over as target time. that we I we approach confident increase

Phil Winslow

versus Elena maybe then is CAGR all about you’re growth and that, being about five investment on the just the When obviously, year? to think any follow-up over a just to And framework tripling. versus there an past, talk changes XX% you XXXX about what years in obviously, data that margin

Elena Gomez

And - the organization opportunity think is changed framework. world the year, the to when of no back a of not I first will time over it we has frankly for we scale step we've a course, Phil have mean over right And it does we're and make all, and us because that's And, that's no this for opportunity always in yes, growth. momentum you now our But business. priority. mistake, rethink great on not see that framework Yes, good which investing was did last got mind. our that the

into we investing. to lean want So

Phil Winslow

Great, I'll working pleasure with really the but in it’s say my been next you. a quarter, goodbyes

Elena Gomez

Phil. Thanks

Mikkel Svane

So than years. triple I'm to Elena more add thing which just our revenues five in other one going is

make sure a that's like So to everybody. language I'd

Phil Winslow

more It’s all more than, than…. right,

Marc Cabi

Canaccord. from right, our next question All DJ at comes

DJ Hynes

to you congrats the partial maybe Elena first first five some and as what's COVID? terms just you the a of in in that like effect an talk I'll about - question churn there of you first maybe of Can guidance. we stellar that recapturing So terms in of point contemplated to saw years, on XXXX

Elena Gomez

a the that exception, I pandemic. we is much, of typically changed the, I one are but mean Yes out hasn't think sure, we framework guidance coming there which follow now is

top to lens So, that do. everything on have of put we we

guys answer of or quarter. from So, seen seen I remember should tough come them say back. specifically. contracted, customers cautious a turned We've would third a your was say I we to question you have QX, optimism there's we've about the What that in

So, some I'm XXXX. actually optimistic we've got into of that back come that still to

DJ Hynes

right you that's like of helpful all the a the the does you capture terms obviously more the time? of Messaging the might far you think any - I wondering over of right Mikkel persistent at changed I that. implications And guess heart I'm messaging access is data increase data think for experience then data channel? maybe in how are that in trying point. that one any just as businesses - to I Yes, these have profile to? if channel guys are way in strategic a okay evolve more there's platform about

Mikkel Svane

because type access kind our chat, Like some of We've it kind usage thereby of the available making done of a top real-time into for definitely a first kind before for and There to the that view right to of our more and messaging, priorities of these of these demand that’s a everyone kind is for behavior, instantaneous is We've that just among now going we priority the application, exploding to more were have before foremost. really that democratize for customers. and to tools. behavior dimensions of e-mail. and done

Marc Cabi

DJ. Thanks,

comes Next question Brad from BofA. Hey, you're muted. Brad Sills,

Brad Sills

pandemic last Yes, video ask you year the applications? the to where into were the Sunshine, a you well these enable the where focus question here projects anyway, of about think digital Thanks, to fabric service on customers of a they're customers on do What lot question. is focus? kind of to What guys, wanted understandably? of back kind Are tabled, there the nice during strategic projects on and is where for the as coming to from quarter. mentioned Sunshine A I taking to try I those from tried hearing more you congrats are customers? thinking Sunshine, embed hear I now.

Mikkel Svane

Well, and of our majority for the But make is tools all to to is environments, a to components, really tools, like our have for focus these a incredibly these year things. be this going still short-term easy interesting really mission. these in - priority some this of it have We year, that's for like to year. we’re a of use our make we, NOCO/GOCO focus big this use still all our customers to seeing and lot easier

Brad Sills

much. is channel of Great, the there channel, where channel, the are you SI as global on thanks that one and I upmarket? is Mikkel. where just of focus in you and please? so Thank if terms critical development And and How move more, well, may, the then that

Mikkel Svane

each channel, to I existing done in business with including partner to have using time it of But opportunity with year an good with a rather where we of customers things we've and partners become about your over But there think really directly. an time. us work both going customers. to quite to your But of are helpful. expand think one more now how help of well-established as we lot were evolution, think as journey tradeoffs is as was our do about which to and think some mid-tier with cases we regional the bit easy our But obviously use as we're about it a expand new then can very there's we market - kind very implement. Zendesk there's investment in doing There than as partners do partners. latest well kind return off bringing a teams to the - regions the kind partners over partner U.S., more a begin

or more So, over about two. hear you'll next year it the

Marc Cabi

Brent next All our Brad. Piper. Thanks right, question over comes from at

Hanna Degen

Hanna Thank taking for today. is Brent for my This you on questions.

RPO additional strength to the some million you First, sequentially this that color vertical specific stood contract rose the if geography in by to new out? short-term and provide $XX what or million. was Could drove $XXX signings it on quarter

Elena Gomez

Okay.

And the say would of all I regions new definitely intentional we've quarter, taking on about I friction saw simple. our And some but we segments So, making for we customers, payoff making business all, of we've them business. to to in acquiring we're sure which we as script, with also easy. pretty focusing agents in easy and it trying by some to mentioned were in the saw both add add strength and customers encouraged for seen super it on really doing are making our Zendesk product, the as we new like existing out been that it are make

reason. longer term terms kudos team sales that's them thinking engaging encouraging for see. one RPO customer’s broadly, to And the really that's then of about us with So, our for to in

proud pretty we're so, And about that.

Hanna Degen

changed channels customer that's on COVID? conversations social more channels. best you're and Sunshine We're how compare then seen would have could post interesting support the you've contrast through are color and customer being and that pre any Great, capitalizing and helpful? and on be engagements more fielded helpful. channels service noticing And messaging And how the provide you

Mikkel Svane

take a the year a there's state big surge halfway with released brunt recent and Sunshine CX best COVID definitely platform and it in the What release and kind big took we're available these the suite made in really channels the is have to during messaging messaging report here, the in the done channels, that of seeing and of doubt surge Yes, we demand surge a the we synchronous the of we here channels. that of have no asynchronous just tried on everybody. like for Conversations

that use development, we the can these and any without channels market. popular be in everybody very to So expect

way, important each and with a world run their more channels other the with in efficient engage how really business But in getting really we these can businesses especially where everybody over Messenger, for now with that over So and line lot around scalable a in that that our Facebook a way, customers of a really and so Japan are all insights helping we and are other. engage run more are us our lives WhatsApp, businesses.

Marc Cabi

Okay.

Our question, Stanley. Morgan Stan from next

Stan Zlotsky

But end. - you, evening you, We’ll questions reporting afternoon, Elena. miss everybody, for very - nice well Mikkel, definitely my A results. from Good Elena. thank Marc, we’ll couple guys,

CRM momentum you Just maybe as are of guys what monetization head on as far seeing CRM Sunshine adoption Sunshine and like as as XXXX? far as into we

Mikkel Svane

XXXX is way. low our also available all of Well, no focus our have. like a capabilities And in for we repeat democratization really customers that like that code, the Sunshine told capabilities I in code to to before what just just make

And will. like will monetization kind So, I good available normally a opportunities at lower is larger the lot lot use capabilities you so a on is lot of more these really in platform, on cases. still a company. But year. the more platform is, getting of per - a Sunshine easily se of priority making the in more of of our we a think is priority group this advanced than usage for the see like And customers off for our the if of

Stan Zlotsky

letter ago. on on noted - guys came and the you I was your also in few shareholder it then And a out just think days pricing packaging, the,

of us what You pricing. walk tweak and changes? a you through kind the around little thought how of bit packaging and Maybe that just prompted about

Mikkel Svane

results this want to to always year. running. quickly easier, the these I things and They these ease to is changing have kind Customers to are change we how to trying want of if like true think reaction last by what has start much, of like all important So and been off things initial adapt And lot we’re today. to that table, been the, kind the running hit very, - really much they based saw conditions, a that more to with some a them make developers need believe able up, change things so ground set we packaging it very - for And and market of on it's for these your behavior that don't And through trying of be what of all that, driven make transparent Zendesk is of around easy. right? the these been is you you very get use, trying the decisions one and only don't you the business yet horde of make the on need pricing kind want you of things the how what we much to of time like businesses all data all up instantaneous I could constant, like year know? that kind to need, of of make you the take the also this have the

Stan Zlotsky

skedaddle. very And last we’ll one one Elena, then you just rope for in you before

wasn't change close that what of in it was initially big gap the duration, - little kind current Just a there as - a when Just bit. help any grew side? invoicing billings if - it the was And we that RPO or of revenue at was expected? growth was plus - there Maybe kind closer XX%. if highlight to Was you look at maybe look changing we - us billings, billings to anything extension, XX%. about that bit we like so on as looks the little

Elena Gomez

Yes. No.

I time. layer as contracts you over finding think as that longer-term to know, more we're revenue and going and, effectively more - in is

to our up the current RPO. billings, in not necessarily. won't So going show It it's up in show

I So primary think there. the difference that's

Marc Cabi

Stan. Thanks,

Next from up Kees Summit. is Jonathan

Jonathan Kees

Okay.

start There go. me video. we my Let first

Okay. I hope me. you see guys

regards. the kudos yeah, results to pleasure yeah, my you you add and I'll and It's working So a Elena. guidance the best for with and, been also, sentiment the

We year outside will that's looks half revenues a the I guess terms are U.S. the miss revenues. from you. like international It My about percentage and two in for the high of of questions

assuming I'm it's that media that and terms installed, that. regions? force and after other the the like that's done result have you curious. in you’ve you've for the question in Just And Are like of like media management stuff I a or senior all just of the backfilled, filling direct senior other that. the are now those sales growing management one you

Mikkel Svane

that sorry. have Well, the of out Francisco I having more the since I'm path ground being we gone and want a company want to down wanting be leadership of global more, means to leadership XXXX also outside we've U.S. prescriptive means of in on be say that more more to that the a about San our in prescriptive about we also outside echo little want office. kidding, or regions just That to here, I'm be

a more very that a far leadership executive so, more truly becoming also around is been presence beginning the of company means this But global successful journey with more we've world. the just and And that. of with

a are global We company.

all seeing of we Europe outside just which we revenue - - more are is massive we’re in companies both and all with in working really that of with feel the of really, of LatAm. U.S. beginning have and always APAC a in half region interesting some we're We

through presence regions. like more that believe room global for much leadership we a there’s like So, more the in also

Sorry.

muted. You’re

Jonathan Kees

terms ad-driven and profile. if question you’re new collect are user guess But know you then seats customers, I products an also other you you build especially monetization. where here. other I in of - I compose one and apps, Sunshine model-year with Yes - may not other you

apps You iOS you you of loading on guys, on XX Does any will the with have a collect customers that impact collect the be BXC, - it as data Sunshine? lot a or more your is consumers.

Mikkel Svane

have to us affects to that model No, any their course, think but how is, us. foresee not ad-based directly. we of have about impact There customers don't that to that business

Marc Cabi

Jonathan. Thanks, right. All

is Next Foster Drew up from Citi.

Drew Foster

for to cRPO the $X so Congrats Thanks line Elena That remarked. between your mark and billings forth. the I follow-up on here endeavors. the metric kind taking indicators Elena and the new - on just also top and of a billion cRPO growth had on triangulate questions.

business. of than it the So given forth. sort less as a I contracts to signing sort benefits anything driving relates that just the I pertinent pace, larger than And of I'm year doesn't rate seeing of But that overall sort metric metric caveats so to higher cRPO think for maybe it wondering - specifically, include customers actual on it and but continues mean, in growth, specifically outpace if contracts metric that as the your ACV. with I growth the longer potential not there's on bookings you maybe to from that relates smaller understand longer

just as I'm to make want metric color Thanks. to helpful. that would be growth. the using sure I aware indicator Any of revenue So it pieces leading as all a of pertains

Elena Gomez

I mean, highest the it's really level Drew tiny. at Yes,

We focused deals. signing have been multiyear on

more can show But current to the commitments, more they billing but importantly, going in that And so, we we're as or current up you're show annual longer not to will RPO definitely unless moving term the revenue. billions up billing, billing. more which we're in do annual in and may revenue in not which getting see cycle

Drew Foster

you're much that for assumptions much businesses. year. savings next continued you one spend And a put some around in How was reinvesting in you year just profile. of Okay. maybe follow could the and Elena guide benefit as maybe your relates next your line guide made for up margin that that on then the item if to back it and that color Wondering how

please. parse of us help Just that sort

Elena Gomez

but employees I has changed. travel would think my of world love to a lot the

do of I first some operate. said, business we to more going being would in tone And so, and to have I the we're same conservative virtual approach will going events how of million events, going customer are some all We're that'll roughly frankly those continue have doing of virtually. that. we And a of That XXXX. way don't level we're there level we field time know with past. last doing to to right did at a that us just team the the we say And I time. savings don't there. that think of working But see different our in have our in-person back. will I the too. new because in coming had change back the way Not highest team We've I events over course, our see come as travel level, we $XX be travel the is marketing at through strategy the success was year. way it

Marc Cabi

Thank you.

up Jeff, Van from is Jeff Rhee Craig-Hallum. Next

Jeff Van Rhee

exploding. you police, a proud sneak Are you're you're to is your upfront? and that messaging, automated bots. going was what own heck up people property is And rioted I I all the you I and driven. And year power that risk maybe shut like platforms appetite then others list AI like think the Mikkel on have very shut don't to the and risk, second cancel long in early policy of setting guys, I these using yourself part still much your responses? has attacked two one accomplishing. in if you're blowback. that, really be you I So, congrats And you. messaging mean reason January agenda for you road messaging just down I'm on I for I This sounds know if last wondering in who destroyed here on could And appearing base a gotten a a those and for is you second if service. right Zen if service The think and my it - feat. it power very I for long to you. everything down, now And you seems of this questions One political guess wondering

I alienate two, with it's to those it's is, your So if value? those prospects, of question two the things the the the - goal the shareholder and risk guess half worth I want great. on don't see customers if would end obviously consistent be and day, differently. So, of you At thoughts two, maximizing you wonder

Mikkel Svane

Yes.

latter So, here. starting with the

- using have have regards We a, we get when our we we for a customers evaluating service. intense have complaints a pretty process about

to, our uses a details anyone. and with had I that once that nobody like product evidence the and we for about once with we do. based try anything try customers, but to and that to with that, get really deals customer served very process we've complaints hurts ensure figure the to you're for specific the out were And get, we we we have that platform. we really on have is So, customers them have what thing - right the specific what review and here doing in over all And can't talking their about iterations say several they

like we complicated. position first want that. it's have that's bit It's if and the with our an - the basic for that lot of lot the little how plug question, do we IVR to set And kind of you well-documented a we No, product, needs can for for process providers, simple of It's whole beyond - of system, bot our is put in to up have things. new which that's for not. how But the not. So But kind the if automation a that, a of It's the that stream. a advanced kind you this I we simply customers. can not. And the very how below, have for why capabilities new of marketplace bot It's is the the called into that bot will. very today a easy? also and flow solve and tool basic messaging bot deal with a all as you providers, any these of we works for conversation best work these with

cases. you little today automation on focus use about our cases, the the automation use cases, automated if no good very and use So feel the strategy very

Marc Cabi

Jeff. Thanks,

we Samad from have up Next Jefferies.

Samad Samana

the I'll especially, as echo miss we'll step and Elena, on you here. sentiments with everybody well congrats well, working else's over next

nice So one the the to use bookings goes to like tough spirit letter, to that the is maybe just and couple to going everybody question whether annoying XQ else, disclosure reason XX% saw the XQ because But it's part I I or typically we numbers those less back-testing end about think how maybe year, an just XX% increase. the I'm since cRPO, growth, said I that about question that billings I we of from been last the stick nice to with way up like to just the I years. When compares XQ, additional XQ, shareholder quite prior out. in of the of the give a triangulate on and the want that by XX%, why ask from

XX% And I in So about how increase fourth XQ year-over-year XQ that from should think how just should to - bookings? easiest best the contextualize we we new - quarter? bookings way to the growth is of think new

Elena Gomez

So agree say, would but question, that’s, okay. you new with you - annoying - I'll so an that

pandemic for the guide in visibility, a but the give ability in confident the have have bookings one growth we're new don't remember bookings, that about So - to we is, really if the proud our we still to talking The had. year, QX of thing are I are you have we we we as think the you're key bookings we to navigate. is all remember number of XXXX,

it's of, trying to timing. the - down especially you're it's billings contracts, enterprise. a doing sales We've of compare just that. longer-term RPO, to team, really and boils in if been job to - That's again the getting commend I great up So

Samad Samana

that and I guess understand - XQ that the increase quarter letter, what shareholder I trying a for look guess I'm it of to in chart XQ. shows those increase bookings, is to to trying would expansion? trying XX% bookings was from is in like new understand both was year-over-year fourth was the the I kind to what I what

Elena Gomez

Yes, on… don’t we comment

Mikkel Svane

the in hit everybody sense? not is things of of the shouldn't That stood is It's to was beginning of like for to we a a show data intention still year, you it. - show it As That while. job. lot that in try that truly a pandemic halt chart. other saw accelerated of Does not make after the the radical and to have intention put out head slowdown is this almost that yet. the And Like the of noticeably us What that.

Samad Samana

Yes, get totally great. it. I

have back to strategic if And more maybe Mikkel. sometimes. ask a I step We and question for ask you

think sale As priorities you we out how came just this how know as expansion you well later and maybe executed we outside of or and that core back year, products early to next should customers changed But guys slew maybe of the refocusing year get about new for to this of obviously think think COVID maybe some your we think about XXXX on sorry? suite through service year about that. should and we we into as last about

Mikkel Svane

from systems worked a with it ease So, of well. really, our sales the the and has and other about of ease ease the using last around we've done especially And lot adoption of the work Zendesk. purchase of product really that year

very XXXX on a are sales out process. roadmap about synergies of we are for as be some of that. And part continue to service we working to and really the that's to customer our going So, focus get excited

about our confident very with and So, opportunity we both the term long product. sales short are

Marc Cabi

so much. you Thank

from Next up Kirk Evercore.

Kirk Materne

I'd Have just Are start still for XX the questions. places - like to couple customers to come for the some you over so? Thanks start a next of just of kind on last the in of of curious great you rebounded seen guys taking months you quarter. impacted little over the my some obviously some making like I back demand industries quarters? you'll their they guess them sort I'm or have the have the or and start of bit plans say past to look do near-term and airlines. on XXXX see sort maybe

Mikkel Svane

of So, that has if customers just was business contracted at you a large - QX of of third cohort about QX returned. XX there about the in amount in that you a look and if contraction recall,

two-thirds has as customers So, there's still come these back. to for that us potential regain

operating hospitality of rideshare of year, companies in on stats average the If somewhere companies, same at airline capacity industry. thing for they're you around look today, last XX% other for

very some ever by being fact are at change And recover new well fully activity first. So, of vaccines seen rates a that companies What's We've opportunity able grow. maybe the been get at but one they actually post as we of to interesting recovering as we've lot have things best customer now, that, rate slowly will those we've online as pandemic. despite so here are guys have summer. more to is ways traditional a healthy the the seen of these looking better been for

year kind the were lower revenue as yes growing half value the that encouraged all on were at so, really size. bigger slight current RPO companies that other future we the in those the into have until into of And also drag kind lag. the second those the those at of return some current And that despite things plays of we're we that rates of of a and and does RPO are of their rates contracts

Kirk Materne

next question do those do the also your than Mikkel feel RevPAR of you about that no that? service within doubt has higher you how be but And expanded more all - around you terms do thinking every of need place than historically maybe there's do the customer in Meaning need been tripling, in get a that What term, quick much just to does end terms you're positioning of over Zendesk have incorporate tier market? to successful longer your more enterprise five upmarket guess what goals? And of you about across that the how to years. about I the tripping of to

Mikkel Svane

we've more - model enterprise. making of can large with the customers? these of up a for confident is like, and journey we succeeded sure course, legal our become of largest we like a had course, pricing, ago single sure in out a addressing is, this like we question since more proxy that's to and we large that And a have, all definitely every How a And constantly enterprise that for, years the that teams, And in that course, business. the like, many that, a something continue enterprise relevant six we five, heard - making like building started we're we Those gone feel Yes. coverage, enterprise. journey in the our journey. had has that that started kind we of of and towards worked security for year model, things and years

things there. the will in But capabilities a investment as of of the have it's capabilities, we it return so getting compounded the that get feel of we road on. building those also We on various many industries journey. wise work there's will and we me, if know we into all our out that And come. feel confident we people that to they map. the would And building And very investing lot that And our things and we like us once in teams, confident get keep foundation, have added a advised just all about in that. about

Marc Cabi

up is Next from Koji Oppenheimer.

Koji Ikeda

for Congrats quarter. my questions. taking great Thanks on a

Sorry are for to I strategic in in of from. pull from strong by the ask this talk bookings in driven customers you. follow-up maybe just was here. where the you're in really by performance through want bookings more where future I the beginning see about the or one that did your to some quarter really about coming beginning of you with to have earlier have Or strength coming that question spend another And forward conversations to I year? see catch-up And mean was ask kind is bookings bookings fourth But what or today?

Elena Gomez

Yes. seeing I we're clearly has that everywhere in or our Marc been start and we're in, chime then it can seeing business. demand there an can but and increase - Mikkel through in

time, it's opposed - demand any our one products You our broad-based for good for can't part point as to to of one us, in me right? really a a segment, execution one business. is, which That tells

it's our of coming all from existing So both up if frankly on all segments, want to expanding, of from you new Mikkel, and our regions. customers from that. really customers, pick our

Mikkel Svane

still all just like combination a have have of - alluded seeing that of activity, growth living economy, for this a lot online-first shareholder in and model customers from definitely segment that also a and that those to our we killing businesses and things. we customers this of customers new lot it we’re really this suffering. this seeing economy, right of too, like We for we in new that segment, pivoting and now, for letter, so of that definitely lot it's And of are then it new No. in reality, a lot of new are are are we a

Koji Ikeda

partnership. press And on the it release. for I ask my Thank wanted through I you. Unity a you on the come follow-up, saw to question

in in-game I excited. pretty a in in the I had that, Had think to December. got I wow, back that it gamer Reading support. days. was being the wish I'm question, avid ask past. I a like,

a little for that to messaging my bit or or with Unity. wouldn't And up you So been my size several the Thank the potential able taking could perspective. maybe the question past is you What over TAM question. new could maybe to that customers conversation next talk maybe you really about talk from started for years. transactions in maybe a trying opportunity, how have partnership that that, to mean this

Mikkel Svane

I And - the an building community is industry. we and in I these question of that enjoy along think worries. No gaming you’re of the all communities inspired seeing strong like Yes. like the incredibly are really communicating just what games. in interesting very - way engaging such industry, and gaming we in

capabilities developers We've put So, etcetera. really, we've we is are what now done Unity we with But guys know these into to it like products. working been this. making for the Denmark these days very excited course really across old about easy good in and the game of in

I’m we gaming at we you are about Roblox, grateful just but friends I like and want definitely can to thank you stuff game with take journey. for kids, of want to course just to all here. helping big love out all these I been And the would excited around just hope of very Like level. guys. gaming that been like and our through - my so to number us pandemic there behalf This so, and like new has to also thank all I a So, the I long cool my of on capabilities this working me. providers are always next now and game, kids and with providers the do that to feedback getting We've

Marc Cabi

Thanks, Koji.

Let's up Stifel. - now see, who's next, Tom Roderick

Parker Lane

for Lane It's on Tom. actually Parker

exactly is that are the doing Sunshine work? just useful more priorities it So, is for for that that about that? more talked you that one making elements Mikkel of have the of and And the talk the cases, partners to big make new easier development What company. in Can being role improve in configuration about can customers? about you it XXXX use need to you the

Mikkel Svane

to be and that, things here. like made that painless effort do the Well, as that's that can democratization we developer our see has so really been how I to can where that we're thought custom doing - can out like use that application, a you making same I these bit company easier your applications use. to these little everybody banner make ad today We our always easy the that it. like something using integrate an Even workflow. as framework of don't of think kind things. think those applications you to to things figure It’s And effort have a just a into

our here course, with So and of the the custom just ecosystem, integrate, places so to these where frameworks, for scopes. into today. help further out are trying they with can other like extend, especially customize, more network the various that is that different it partner like of customers things have what do partner do get all easy have apps in whole partner so the And use ad And, meet to make to companies tools just this. And built the more capabilities like really and using provide adoption. whole businesses no-code role customers we and apps They - advanced a X,XXX no-code big cases. accelerate they play to than the -

Parker Lane

Elena, you are Are actually world a playing sort where think just mentioned the of that that lot meaningful highlighted that happens going takes open from But walk as a Just And of then, of to this cases were? step-down? help in to cohort to demand what elements the me through with XXXX. model to the they sort some about emerge were those going use reenter or into benefiting that customers the contraction of we Are as throughout pandemic, guys we of sort it Mikkel of and keep their the again? of sort them the they they level cohort. puts have have killing

Elena Gomez

think - look - Yes, they think you it one at of unique I can't customers. cohort so as portfolio because a of

seeing of Some to because use will We're pandemic. evolve a lot cases continue have of the that new that.

ones see contracted them will rate. have we like then Some of the come talked earlier, And come back to Marc some that about their yet to normal back.

part we trends some But not that’s of saw optimistic will and that seeing So lot the of there's do to it because things back trends. change go will These a why durable of not everything, cautiously our we and that approach guidance the still reason what we're before. are we're unknown. - we when are we

Marc Cabi

Parker. Thanks,

is up Pat Walravens, Next JMP.

Patrick Walravens

Elena, So, two you. for

fun, be can the characteristics Zendesk more your will us And plans share successor? what for there then, and why First should are now? up, think with secondly, is your you that and about this you one anything look future in

Elena Gomez

management gave to me Zendesk. should of more family so be my - actually. of here decision, be wrist personal and love years, where XXXX You have should a things ask proud five a I on sort choice. the it's of to is, now? here. great Zendesk and a I personal couldn't I team, boss mean, tattoo just lot my that company really I so opportunity a why I've a somewhere reflect been It's and honest. the of personal on

I as person. I'm this leaving shape as would in So, the my for far company I what successor, great feel That's say.

Patrick Walravens

Yes.

Elena Gomez

not. We��ll And someone don't I if cool know Mikkel will or find as see. as me, that

Patrick Walravens

for figuring policy develop. virtual really and right your I having What trying the is out. if is is an know solution, time follow-up people we're can Because your I to you're because to All everyone where not right going particularly for as hard I for to something back-to-work? be organization a this Mikkel, your don't think younger

that? are guys So you where on

Mikkel Svane

of the lot going need and things. is But lot not get need a of up of like celebrate office commute be to restrictions the having to and Right until the are get told start a day. September and risk other need We nobody a from We that we to look and few and freedom - the workers offices also in regulations time-to-time need together learn the to to we back we kind to to every And like some we a where kind really should half opportunity all office we’ve we together together. a have be of And things of of around already that the And lot do we pilots the forward. year. expect employees real need comes we still like cocktail still have these white not for of of do see. things to now, going each other. in with in about eyes course, kinds do. that boarding like we some each the to used time embracing our and expect getting back we and any do with world offices this team at know team into to of minimize in teams in so We to of

to of will not may in work not everybody. where that. to always we course like home everybody also like may and/or periods facilities we need have from Then work So, will these always collaborating we have for situations of for working - like kind

space luxury set function really up people too. So, that office - that can't definitely our have need in or don't also for we that don't don't

regardless this good have the in our for at the going that we So, be that - dominant today sure with we it's of of underwear. best is many think But and can how you're see of where - to way be But collaborating by this we are you're be telling - can amazing this being going get, less here employees. this But this you can is this today unlock your live to I that sit communicate because things. is combination. pad that, we as really office going of - can and that configuration way be But think really, or back. to is elsewhere. way really in we space - that to in to going I'm little I is office some we above It how like this your And embrace like am. that, sitting how way actual sitting is the matters a do this, dominate Pat? And this and pretty what and this like potential. engaging, - really what future I communicating makes and I come at square some sense Does like

Patrick Walravens

Yes, I on I love square think of think it's, little don't it's honestly. tricky. I going the idea forever the

Mikkel Svane

why your have don't on? that you Is camera

Patrick Walravens

it. stopped has your I'm trying host No turn on, to it

Marc Cabi

got… all Oh, We right. oh

Patrick Walravens

right. All

Marc Cabi

more four eight more there he All got people minutes. - we We is. four have only and and more right people

do to Let one. me ask each just

Sorry guys.

we're Ken as time managing Sorry not here. as usual well up. you’re

Ken Wong

Okay, question I towards the my stir guess latter I’ll then. great.

that generally guys guys track billings How bit year billing a will weird year next this would don't seasonality of kind billings what year put on growth that rate relative a year typically look know to XX%. about about and great then like I the should you So but be a a revenue and is next out well? think from could question, of of growth as numbers perspective? we from comp talk Does thoughts weird you be there year growth

Marc Cabi

don’t guide about of in Okay, over Ken But million step sized invoice in year the I’m from to cadence. billings. impact last real QX we billings that going did $XX quickly, we remember for to in just want that change

missed billings think just we So, million over about year. in $XX last

we will whereas XXXX into year only for for invoice go invoice XX last we months we XX. as So,

so for of way sorry don't because in to ever I step we a kind on have customers that to Elena, really you, - number large monthly guide of one. So, billings want of the to

Elena Gomez

you. Love it. Thank

Marc Cabi

Derrick Cowen. Next from up is

Derrick Wood

thanks taking question. my for Great,

percentage in that terms So the you enterprise us letter, than you is the to when old think new old a a chart metric, And from than guys ARR stronger shows metric the contracts. have that what in of $XXX,XXX and traction generated the showed right. curve it steeper upwards of I shareholder metric. And tells

just greater wins traction you enterprise? share And catalysts execution. up-market. you're seeing us in some pure then deal so first, what helping mean, help of think key around of the maybe QX anything in I that and can large you of kind strength drive sales sectors are the I understand And

think in I Sunshine. maybe of maturity

of factors think digital acceleration are those you into of initiatives. that market? of in I success have How some the playing

Mikkel Svane

agility do first alongside Derrick, project like questions, Yes a six-month Nobody are project. penetration of allow their in nine-month for year. or foremost, about this a enterprises look and could much fact further and to butt - are me market, last the also to the that solutions, our nobody business do even all to all into vectors like, in today starting Marc. here, like like above, more like think these can the that, drive

operates it. how about world the That's not anymore. Forget

real it's it’s So like - today. - a like currency really agility, like speed,

the is new with that, this a other not So, thing, metric.

that show issues our progress. the product one other As this that. an is we want sense? we that of that what makes the figure specific out proxy relating from of illustration letter, to our the very enterprise the say - seeds that the And that measures we only revenue as less show why with that time metric current in it for Does old specific metric proper of and metric with one precise have of a a this has is for of the become our And way why future. very and that's percentage want for to this metric in as or some - over the we is comparison less in we

Derrick Wood

Yes, good. it yes well, looks

Mikkel Svane

Yes.

Marc Cabi

I’ll continuously market. of are are just up Derrick. Thanks, our - imperatives move we one that to close

that's that. representative hopefully So of

there. minutes We're was move I that's have I Chris four So why to here. of kind going placed Merwin, left on because Goldman.

Christopher Merwin

the quarter. you on Congrats all

just us of Day if you you just of example. getting was around So through from you're help I year some uplift illustrative sort can me, Analyst think the ago think know quick ACV gave a I an a I wondering - Sunshine. one in the from

stand can to Just deal benefit size curious you as share on anything us with that? your from Thanks.

Mikkel Svane

product. will the the and of we will the D&A the ecosystem, in monetization and grow First available our foremost, that any And And Sunshine think adoption That usage about. is and the of acceleration Sunshine. much that's always over that have key partner priority think priority platform. centers make how the is the capabilities been grow really more to our how of about that the that's we XXXX

Marc Cabi

Thanks, Chris. off And Arjun William Blair. we'll with close from

Arjun Bhatia

seems quick time taking up-market the question. from A XXXX one like large saw me more looks focused into what XXXX? quicker these give of the projects? QX traction bit for conversation and the on for transformational at some the it deal was for on Thanks sense in deals pipeline a flow, little deals to and maybe going a the those like what expense larger us of you Just value

Mikkel Svane

that to we just year, in factor more And see speed important from. something want we seen to a we expect something large to. an high that’s something hope about Like lot And have projects hope agility speak this quick as and turnarounds. transformational other we of with that from. I we incredibly to that's increasingly we say the level, learn it's projects we see to help more companies participated

Arjun Bhatia

on Thank the you it. and got Okay, quarter. congrats

Mikkel Svane

you. Thank

Marc Cabi

appreciate are I next afternoon. a care. Arjun. everybody's great quarter. Thanks, and of Zendesk we interest With see you will time. again we out that, Have Take in

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