ZEN - Earnings call transcript Q3 2021

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Operator

Thank you everybody for joining us. Welcome to our Third Quarter 2021 Earnings Call and thank you for joining us again today. I’m Jason Tsai, Head of Investor Relations at Zendesk.

Joining me on the call today are Mikkel Svane, Founder and CEO and Chairman of the Board; Shelagh Glaser, our Chief Financial Officer; and Zander Lurie, CEO of Momentive.

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 ability to compete effectively as well as the anticipated benefits of our proposed acquisition of Momentive, which we announced earlier today. on the including ended the prior factors XX, our quarter XXXX, our affect in earnings Factors of and are actual ended the risks Report XX, on report with XX-K section upcoming in filings contained press our for September assumptions, and Exchange quarterly that Annual Form our Form could Commission, and our results year Risk December the The Securities subsequent and release and XX-Q XXXX. for We results undertake these expectations, after changes no law. obligations to statements these our by today’s update conform to statements presentation except in or or as required to actual to Please on forward-looking to investor statements. earnings Relations acquisition information the presentation our regarding refer available release website today’s and Investor for more

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

periods non-GAAP comparable can financial release letter You regarding non-GAAP reconciliations and earnings prior for financial Investor financial introduction, the and website. in on of available GAAP with which press shareholder this earnings our over periods, for turn press are prior and such brief the certain to find today’s I’d including all measures, for measures, Mikkel. like measures With additional call Relations disclosures releases to these the

Mikkel Svane

welcome our here call and to today. an everyone Jason, you, outstanding had thank quarter. yes, Well, We

significant longer with had annual as signed we recurring now momentum a of Suite contracts driven over $X revenue. million larger straight accelerated year-over-year in commitments. grew was with serving are quarter crossed Revenue million key more established third and our as and we increase by that enterprise to customers deal size, relationships average than $XXX XXX a Zendesk for and and year-over-year as growth our adoption in strong partner the to XX% Our milestone customers We deepened revenue we a XX% as increased ourselves we combination further we with customers.

strengths create of our use fast is a So powerful. and combined strong that results offering to agreement course, why to is, simple this acquire customers value hire to to Momentive, give strategy or talk also about it really excited make time our the I’m reflects that And customers. offers you quarter of their It’s this to connections to Survey behind the easy with our to Monkey. company

well transaction and Momentive’s the Shelagh have as about Lurie, with while software today. Momentive be here Zendesk We powerful and Glaser, share us our believe use. Zander easy to details. founded as Both He’s were to CFO, should the that and CEO, vision alerting to experience more improve our somewhere joint customer

the sets us true no easy do are our capture is relationships, respond engage to fantastic combination moving Not platform we best to to we picture accreted what the to our for by a expect and with the in And There our It complementary. XXXX. cultures accelerate most to are $X.X to we similar first and meaningful and the our way customers. the reality build of together that, create Hey combined turn a think growth that and we and by revenue is relationships to go this billion customers call picture to pioneer change is revenues they act last like Zendesk customer, provide XXXX for growth feel. to about reaching customers The say your and businesses to significant can experiences deliver momentum customer deep That market happen company. customer. best of years our Combined, importantly Our way we very a collective Together to on online the ability is a course our to to $X.X Momentive I already be and success are better a current richer, the understanding in hard paint would everything Zander, long-term that. year markets especially talk in strategies with and only events the opportunity they have we meaningful over the intelligence. building how and survey And have and and of the few opportunity as and by at expand moments. given is value rich about to future customers. acquisition the Zander. unified the over more a market believe our and talk billion XXXX, our plan today, and to and way achieved.

Zander Lurie

thank you Mikkel, want say first, all me. about excited Momentive. let what of speaking it just I and having I so pleasure a me ahead for And today. much to Zendesk opportunities how am Hey is with for reiterate the you

Johnson provide go-to-market portfolio values think? business similar they product do deliver product market. value expand that And the in of our few people strength up resources is our predictions move mission that worldwide, to We today to with invested their expand With accelerate intuitive and the enterprise offering. a Verizon, provide responses have few. enterprise create will growth. over to to Momentive tangible incredible experience, Momentive and And relationships areas. and Customer in cultures, share just valuable our believe organizations are enhanced and survey Is customers, in and years, we’ve the Through customer to Mikkel insights make set innovation results. our our our including you brand people-centric pursuing date What enable pursuing. Toyota them expansive nature employee we an how our base. a core to employees, fundamental solutions that of business, with customers, likely experience, five help customers we At service, name core complementary believe, opportunity X.X confidently SurveyMonkey million we nine we millions and And this quickly shareholders. AI to know we’ve we customers As been we believe decisions leads market what LG, now billion we insights, daily and generated for product customers. said, want? And that of IBM, into strategy achieve and We’ve last Zendesk, and Johnson, insights. our XXX,XXX

for our want we we and here. footprint, As to world’s are brands. and our the By best global deserve. companies days combined believe company customer positioned together It’s great joining and deliver our leverage we and customers relationships with are ahead partners ideally that intelligence Zendesk, be leading us, the to the

Mikkel Svane

And that muted. I’m course, more team. your to about, quarter it super so course, for going much. our who Awesome you’re Shelagh. welcome you share details excited of turn But to to you will with Zander. strong Shelagh and Thank we’re And transaction. and of this Hey now, over go,

Shelagh Glaser

Zander. unmated Sorry family. now. the forward Mikkel and I you Momentive you, welcoming team to Thank echo that. We into And sentiment. about I’m look Zendesk Mikkel’s and the

had quarter. As quarter quarter, of We $XXX revenue truly Mikkelshared, generated this in million our revenue exceptional Zendesk a growth. third consecutive

from stay increased momentum XX% stronger long-term. enterprise ago. from is last ARR price a points, upgrade XX% now up customers quarter strategy and higher our accounted driving XX% of accounts Suite of driven year quarter XX% Suite, Suite Our adoption. XX% this higher with by ARR customers success Enterprise last for quarter. for the have ARR of expansion up at longer, and and us our strong

what Suite Enterprise have remain and and average seen to our the of to of contraction we increase we account As churn customers than lower our more ARR, expect for contracts typically. length and

our Our target net XXX% XXX%. long-term rate above up of was quarter, XXX% to expansion this XXX% for last quarter from

and let’s to Now GAAP flow margins turn quarter cash XX.X%. margin operating was our income this

of three increased as last gross optimization hosting year driven to by non-GAAP revenue our support and compared Our of efficiencies more was largely an infrastructure. margin XX.X% scale, product our from points organization than increase

XX.X%. million $XX.X and operating GAAP Our negative loss operating was margin GAAP was

non-GAAP $XX growth. the while declined grew expenses marketing R&D to was cash in by million higher flow in million. points. as by non-GAAP X.X we quarter Our third sales, invest million income driven and Operating $XX.X decline of free cash in operating flow margin margin X% was $XX.X continue The was and operating year-over-year

guidance. Now let’s discuss

to XXXX momentum. guidance the $X.XXX year $X.XXX billion, at our increasing of given full continued XX% billion growing billion are compared from our business up previous $X.XXX last to We our and year to billion $X.XXX midpoint, quarter guidance strong to this results

revenue $XXX quarter is and midpoint XX% expected fourth to to million year-over-year Our of at the range grow in million. the $XXX be

million We operating million fourth our to $XX in range to gap the million. be income non-GAAP of $XX $XX in of And to million. to operating be expect $XX range the loss quarter

our the We $XXX million expect range flow of an $XXX to million. million year $XXX be to free of $XXX to million from in full estimate prior increase cash

operating is means to growth with half of to second and coupled a from outlook and our Momentive of performance yet you’re with acquire intent financial and strength strong Our the best rate XX% position come. when

take ratio the to of per value Let and for each represents of XX% common me outstanding through up provide on Momentive the will this closing and details of you some transaction had. stockholders our the terms The of which to of Zendesk Momentive, Momentive of X.XXX opportunity the share for of shares receive the transaction based approximately stock of the including XX, XX-day approximately company. weighted average volume combined transaction October $XX a Upon of XXXX. stockholders Zendesk price share Momentive own stock a

Zendesk to and and surveys, regulatory and transaction the and blank.. lead and the in shareholders service industry service first half close computer the My product with Zendesk combined to Momentive’s Momentive expect and customer the market approvals to continues and apologize. computer Momentive’s research. to XXXX approvals. customary with subject industry of Zendesk offerings combined feedback, continues went We lead in other in screen

will $XXX transaction to as new to by as more first Mikkel a significant we’re nearly existing business want our believe to complete able added on to a full there transaction, billion potentials and we touched accretive reinvest our a sustained growth further expense synergy intend motion, addressable growth. year and it We We on be prospective and customers. believe savings accelerate will has significant the this unified accelerate intelligence into revenue are intelligence of unlocked that bring growth. doubles the to will capabilities enterprise areas I in Momentive’s provide where a back platform create customer growth powerful to We market synergy company. providing be company for XXXX runway for why this context customer

this $XXX together our in $X.X And we target. about billion million transaction our XX% full revenue had XXXX, year to than expect higher Taken previous earlier $X.X revenue we more by than a billion XXXX, to targeted. approximately path in previously accelerates reach approximately in and

in-person our leadership the on more shared and delivering Day our close vision November we jointly New team in City. the teams customer the transaction on details transaction, deeper during We’ll York his strong Zander work will of of Investor cover Following with integration of intelligence. on in XXth the

You for over look website. With that details it I’ll on you to there. IR seeing QA. can Jason find our We forward back to turn

Jason Tsai

the you. And put analysts randomizer. Thank few who as we’ve done in last all quarters, the Great. are we’ve

The first William analyst ask ahead. Arjun go Bhatia to be Blair. question at will a Please

Arjun Bhatia

Jason, announcement What decision partner congrats Thanks, maybe team. not the to from you with, on as through right. to just us and with acquisition have that to partner, can right? were build them? getting off been you if versus may the with beneficial the All the are start you walk Momentive to Mikkel, versus buy

Mikkel Svane

And Momentive and platform. taking like today. SurveyMonkey similar you is largest may the has can away? able build is platform – world’s the iconic No, to market – somebody you you It technology. some in feedback ubiquitous Is be its

the can never experience. get You

DNA. You get never can the

with like we You foremost, is be There is brand. able that a in never things a we to of these course, product. really on And customers. But partners together in really like vision that of this never whole – by on and different I on they new ways. platform. a and a richness we’re pictures believe create rich overlapping, to do picture we will kind intrigued they your what dimension feel. it your and and depth providing and on kind very that first course, is different we’ve will such [indiscernible] the of think of in of customer of additional customers. level big experience what executing very, execute a and fantastic how that with but get powerful. And many think together. have, can It’s of understanding this been incredibly the vision say that is And they always whole new that overlapping match And And putting a

Arjun Bhatia

if Zander, you’re you to And helpful. I one. a would for available Very ask question love

Shelagh mid walk market playing maybe us story, differentiation versus in the accelerate space on For might you touched that are Mikkel how in Momentive market you maybe are familiar into the your enterprise. and little you just the less walk through, just think, maybe Zendesk those with competitors Can combination that and help a enterprise I differentiate that through how up plus the some the of bit the of can market? us the competitive in market move

Zander Lurie

cetera. have up products. out with Yes, are where And as millions experience with et market growth employee sure. contracts. what customers millions five started we on We a CX, footprint, Arjun, annual customers it’s product large that a customers, And of I all paying it’s have active and those an great of and move company XXX,XXX mapped to we market question. enterprise and users we our build insights, XX% contracts, done categories of is our subscription where brand led play

world-class of enterprise are our fit. third product businesses have market a today contracts we and So,

in direct to mature into CPG, this that We buying market products. go fin strategy. are most our to Zendesk, have discerning the our just we auto, demand accelerates serv, enterprise much and consumer With in customers plugging more really

I to up-market plug about customers. we where Europe, don’t global footprint compete, that that XXX,XXX we sell so, parts going and APAC think these and enterprise build in And in products can of are their LATAM we now to their as

deliver value market And that have just here compelling, more to bring proximate and length. customers. around customer lot to obvious. go it frankly Mikkel to company, I synergies intelligence and so, at point Mikkel’s talked the we and But about just products a are

sales Zendesk comes for of product where CX for quarterly with requests Zendesk. We’ve thousand calls up. a our over hundreds have had We integrations

more So feel efforts customers. our those to our R&D redouble ton value and shared really like we’re integrations offer to excited to build is just there a

Jason Tsai

Thanks, Arjun.

move Let’s next question. to the

Next and turn with Craig-Hallum. one will unmute camera your on be mic. Jeff your Van Please Rhee

Jeff Van Rhee

– Mikkel I first It at when your have look is of of much should on and many much going and guess solutions? Congrats your congrats impression Greenfield? base, with to percent the a announcement go. I’m maybe what couple to go How how solution? potentially base in have we this in your initial just me, displace today. installed And base, Here is the good. guys feedback customer And be for curious you how you’re it

Mikkel Svane

provide for level but to provide ease Like think like lot I just and our a customers something we our big think especially makes like simple bundle like making of these how be have offering customers we think lot integration for things use, a – a extent I I of more on will will the incredibly – of customers. our impact has to able a the can some together sense current that can and

November base kinds customer more details like course with to these Analyst Meeting. and specifics on on so our of So in our regard of

Jeff Van Rhee

you and enterprise just quarter a the in you topic front in but think to enough. think a last I to there cautious was business, I Shelagh, called get as usage, Fair previously. more the a little and center linearity of well different seen I reset than Yes. them. question quarter think, had core And out as a what tried guide most you the

the you linearity Just in talk color that versus what about and any enterprise, out saw around cycles how more expectations? played on

Shelagh Glaser

thanks the for you, Jeff. Good So hear question. to from

So, QX. we time, pretty definitely up a as been moved into for we shift market have saw moving dramatic some as quite we

that’s all throughout is month continue ourselves you how in really typical, of the strength threes. really we strong just forecast now, the And think, that in of see what enterprise month I very segments the market. to business But strong so across quarter threes. we’re kind saw see driving That’s

to and to very anticipate in that us. be function, do outstanding kind strong board we’re heavy. just business. the how across a And monthly our go our I really our of really was QX that planning of continues planning That’s workflow segments all for enterprise So but quarter market

Jeff Van Rhee

Thanks. I’ll good. there. it Sounds leave

Jason Tsai

your camera mic. Great. Thank McWilliams Ryan and you. at question unmute The on next your turn Please comes Barclays. from

Ryan McWilliams

combination. vertical customer excited Zendesk customer you’re Thanks for or Momentive Mikkel, taking individual so type there most where about the combined offer? potential question, interesting is an and

Shelagh Glaser

Mikkel, you’re mute. on

Mikkel Svane

I sorry segments we like talk of more something, there industries. think I about can can for also about later. different different like are things that’s – And course course, we different don’t and Well, do that. know, of

these like of used have really using think over customers Everybody been is years of products like been at so some ubiquitousness world – mind survey products is the have in the what And these responding attractive. I SurveyMonkey or just the amount have a to sooner point is the blowing. been like that later. from

sectors. use different externally that base in so many we the customer think, I use tailor different The kinds same So, internally our types and both that cases of the are of are broad. types of way see and so there cases

look over of So forward entire time. market the we to kind serving

Zander Lurie

subscription the that’s me respective up collect feels. mean, as from of how like know, products vertical. organizations customers so compelling up things, S&P of And your think feedback a company got one customer to by Ryan, And use, about more have I we’ve Shelagh’s is contracts. time single XXX looks need vertical. every then way needs for been one our our spend because Zendesk, base, customer spliced about to the to we the you chart It’s customer is, annual you will we that XXX,XXX if product to your team figure those every seven all I have with

non-profit, et the your she’s day active how over sharing feel every And point your curriculum, better with our in we campaigns, about your they how world your million understand platform XX what that’s pricing, platform. XX, Mikkel’s cetera. about to to your any than want You X product, responses company engaging million do your on users

the has component that big become, customers that And from benefit obvious that our integration. when of chart their that to it’s Shelagh of just integrate. it’s business how just showed us job So, will sweet

So on we’ll year. be to excited next execute that

Ryan McWilliams

the we for Shelagh, Great. definitely the can decision then between about the color. really shareholder about between we timing I think should how think deal, Yes, you appreciate actionable all insights. just and Momentive? the versus customer about cash Zendesk maybe the stock more as talk votes and

Shelagh Glaser

thanks, Ryan. Certainly,

all So employees, to as that to that created participating out, about most we Mikkel and mechanism our shareholders, we there’s creation. have thought stock all our for enormous value became the in do Zander our as straightforward that with really value think was it because and that laid customers, we’re extent to be

straightforward. really So that was the

timing, first have anticipating XXXX, we we certainly, QX would move In we we’re want anticipate terms of half of to shareholder would the possible. in And timeframe, as quickly vote. the as

So the all focus across be that will teams.

Ryan McWilliams

Thanks.

Jason Tsai

Thanks, Ryan.

question please. be Cowen. Derrick onto mic next over coming your Derrick, turn will unmute and on Moving your the Wood from camera please

Derrick Wood

XX% Thanks. Good. Yes. quarter. XX% much the growth last enterprise strong on this I quarter, I on you to Well, – like enterprise quite the wanted guys quarter really seems touch well. a on look did is business. business congrats at tougher comp, a billings doing

So seeing productivity you’re is, How your just bit and terms could a where activity deal in Just sales get large color get and strength hiring? there. working coming really we of together a more for little geographically? what’s sense

Mikkel Svane

package very experiencing of opening At customers, Like, kind said, is like lot way are these we’ve this I experiences that doubling transparent, powerful functionality online us time things on our packaging, a – behavior on making really down who how use pandemic is my here, like time want in in for works our like points changing. post the in easy, a what in on everything – we what collectively whole as of It’s a like, everybody is like to customers. the little they script All very seen same this user compounder today. And all creates simple execute the it. everybody, industry, it are easy deals bring and simplifying of a in that with I out to like the experience. like as get think

they need So really customers, this.

seeing We’re the business. that small for

And the we for our worldwide continuing like, our We’re investment from seeing our in in product enterprise, enterprise. the and investment really are the continuing that presence. benefiting

progress the We’re very we excited everywhere in the world. see about

Derrick Wood

on about around more that lowest customer data it, cross-selling? you’re acquisitions on see you to for What you And us from guys, interactions, can going vision. sense can can these how everything, pieces the deck, of going you are you intelligence really the build you slide what? And fruit pitch kind those it, a context insights. combination Could hanging just all on Okay. How give products on collect you where take do and little I and talks customer then work? action the to a integrate of see

Zander Lurie

the bit ability details to And ambition. very XX, things? to our integrate Just Mikkel reach much and more about create New – different talk store really a things the want picture. help on a and hope richer silos. this And It’s and to of what how and we lot data that’s And lives a little are going got bring a of picture. York. be that all do richer many many I you have within it’s do customers a like with even not And obvious our both together there’ll that our lot richer we to is much And want in too the Derrick we customers more customers to products execute that are like details. a that that we the too creating that. to see quickly these But on data picture and November to

Jason Tsai

Stifel. Great. camera from Please at on your turn Derrick. will coming mic, Lane you, Thank Parker The over mute next please. question and be your

Parker Lane

me question. taking hear everyone. Thanks Hi my now? for Can you

Jason Tsai

Go Yes. ahead.

Parker Lane

on you accelerate basis? was I you now bring can the their Mikkel, you a time to to guess, prior were over needed and customers, on feedback the Why out two guess, individual and about gathering the both deal this time? was really right customer I what how together customer done two customer interactions, that bit has these years, had an now talk service approach of conversations why taking parties to first there more year, last engagement. perfect. the in digital Yes, obviously everyone’s little you’ve the And

Mikkel Svane

really because And much, at have Yes. right, we everybody the pictures have. many economy, like, that’s We’ve customers is great in that and other first that connecting with caused That’s much base we timing here starting and this there’s data little understands on shifts of lead so But dots. functionality we a their as And years. provided so business more and stuff, The whole quick like question. products integrations about first much first basic of the I bill the and SurveyMonkey online close is think on This with they of they just better to like too. for use market a wins about momentum customer provided kind and your in products our our right our products, creating look now, much to a the the for this we the better. customers transaction. helping execute executing bit on the customers fully creating don’t digital like very ambition data operational richer they the for picture customers. this, forward better creating is a are much if much become can’t like, like

Parker Lane

Yes. have today categories you anticipate that into then marketing straightforward, fully? think important but use used more even service this is where product pretty a this And case Very you like the helpful. adjacent pulls do the and case maybe you sales ultimately I more

Mikkel Svane

things, customer provide just serving right. the the entire picture and as that to there and like experience, that. the service not pricing, the I then this is give constituent, there Customer to is I business. like the packaging, these can’t my one communicate talk hires, lost customer like they sales this feedback specific overlaid to not the think about just And think, about reactions, much is better all organization I create be the how so to feedback service. – service product, All the you the shouldn’t customers what serves of with, picture that but I they think

question? to do my want jump to next As I’m Jason, here, rebuilding you picture the

Jason Tsai

so with in, if mean, at chime way Parker, how feeds I’ll getting Yes, where you are products, we feeds our our data don’t, team go-to-market the they’re efforts. And customer much and R&D engaging use efforts I Mikkel, insights. Momentive, just customers about Intel us operations that our our Zendesk that feeds our

last this like to the So, Mikkel’s is kind world digital XX point the especially through whole transformation. COVID months, of over during as going

do products seen to how our talk across complimentary everything. are each I and other think businesses we’ve our how much

Parker Lane

Yes. again. Makes sense. Congrats

Jason Tsai

Great. from Thank Samad Samanaover and mic. comes turn your question next Please you. Jeffries. mute on The camera, your

Samad Samana

Hi, Thanks taking my questions. for good evening.

unpack if I for just then what should you So, the accelerate the us growing means? accretive, so consolidation, help numbers, I acquisition, growth Zendesk When $X.X are us what growth the understand result we say do expect as company and high billion. we the accretive want the and billion, to of you maybe what to billion the growth around some acquired about to billion targets $X.X of just of of understand growing or can a be assumptions teens, get this $X.X and $X.X then think

Shelagh Glaser

our talked and very start Mikkel immediately in the footprint that lay start up real it. offer move is Zander immediately global through, market, cross the we obviously But a that can we’ll to We’ve Sure. and that to ability products. revenue the is, into, Samad, can into got revenue got synergies ambition in it that we which then talked we’ve synergies expand there. and quickly think what to to the sell a we think through just we’re forward looking November detail lot everybody investor meeting, seeing goal just I more

start the But think because we really initial which XXXX, company year can we year, XXXX, combined integration. think by first will So, and obviously the be full have growth. be accelerated combined the XXXX close will the just to

ourselves, for. combined So to but that’s that we’re it’s out, slightly different we as start as you we rate. to growth begin And combine looking have with, what rates point growth

Samad Samana

Okay.

the sure will clarity, sake to individually, company. the combined companies of for just you’re that make assuming So faster grow as a even

So just Is based a that it’ll fair both said? what on of conclusion the growth accelerate you companies.

Shelagh Glaser

growth new the of it’s the combined No, rate company.

long term by our growth plan, XXXX. So that out been we our That’s you had there. target billion to accretive target to to recall, what the it’s growth $X had put get as

So, we this as growth billion Zendesk as Momentive absolute into we new looking we’re it family, $X.X now in at target look XX pulling at the bigger and bring opportunity, earlier, year so months. an a

Samad Samana

up in then into? on Okay, the who we the think well, but follow two just Zendesk Zander, we expanding is chime So, Mikkel just businesses. maybe and it and marketing you selling is great. maybe going too, this you as How to expanding the, up And develop press – just should about maybe oriented can are customer be here that us some that see you used call potentially how just beyond you here. service cases, more of against, think synergies what the wallet – departments help share

Zander Lurie

no And in to a work think push getting different the of seamlessly is much doubt. these of big kind I parts Yes, there organization more together.

silos like experience. you kind in have this the very up not you’re operating of don’t customer broken and So,

expect, So, we We continue that already of to different accelerated definitely this constituents with acquisition. we course, expect be that. serve and we

Jason Tsai

Samad. Thanks

question. unmute Ken Please the Guggenheim. your mic. Wong and your with turn Moving on to on next camera

Ken Wong

great. Hey,

You now. just building I’m actually question off of Samad’s

mid-XXs. were introduced billion, when update $X.X timeframe those believe I the So, that the numbers, of kind expectations really the for you CAGR on $X.X to over or the appreciate guys billion the

So should to about of mean or we marginally higher the what’s it? think kind mid-XXs about that accretive think kind right way to this of commentary is

Shelagh Glaser

again, to the more everybody in think few with we’ll out New lay we weeks think that’s about get a together And I Yes, details a in it. York. right lot as way

Ken Wong

does what of – fairly second, do envision bundle far just is then where that? scenario what’s momentum we it down or currently is Okay. selling to because run more is as part think it distinct line the a seem right a standalone, from Suite the idea the as like Zendesk what to way product this And the about

Mikkel Svane

in lot also a There’s of for them bundling But tightly definitely integrating products opportunities they’re the about talk and just more businesses much can more packaging and separate kind these that we November. and call. at

Jason Tsai

Ken. of Thank Bank over Howe Merrill from and The Sills Natalie Great. you, comes America question Brad Lynch. next

Brad Sills

great. Thanks taking Oh, guys. Hey question my for here.

Jason Tsai

camera. your on turn Please

Brad Sills

sorry. yes, Oh

market freemium for you free have kind onto market see move Could down over company’s about to of Monkey, bring and down a on the here. But core video been of signify obviously I’m for guys. motion, and time moving about down they an good Survey issues to I minding think of also this up the big business? opportunity customers kind market, then of potentially wanted a ask kind just you when I embark more that end to Zendesk more having getting base, so strategy you kind paid. and anyway, that start there similar think of Could more because the this in market. moving

Mikkel Svane

a in. where something translate that I I can see for can there to asked don’t to this individual plays think is of there for has incredibly kind there I also there’s before, by Can like been momentum especially that that like, a is hands of because brand like that powerful, brand, are that a question that people Zendesk of to of we big been Well, freemium And what a business. a the do value think like works putting users comment of like business we best and of of – – of now. the to we’ve like kind huge out that I has there’s SurveyMonkey want this tremendous kind models, to awareness and a don’t going a benefit the constituents been the lot

Brad Sills

it. Got

experience move And Thanks. kind customer, as it’s that also the Okay. Thanks. do for for market aggressively. more of other of employee SurveyMonkey it’s Thanks Zendesk aspect the well, end see just into And just experience. that. of that potential to is then you not

Mikkel Svane

lost my again. I camera And

Sorry about that.

within in area like, have of something something, big centers this definitely see it. is but used cases. this definitely and we on, we will so is footprint doubt a of think in to service no already employee kind is where And anyway, especially the offering definitely we HR this this will, uptake and and I where an shared about joined

Brad Sills

Mikkel. Thanks, Great.

Jason Tsai

DJ from Canaccord. Hynes comes at turn on question next over Please camera. your The you. Thank Great.

DJ Hynes

customer overlap two congrats any to is alluded a just the the much how point, transaction, point overlap guys on customer you at and one there bases there customer in Hey results. is nice on to today? Mikkel, way finer standalone put

Mikkel Svane

we there’s a lot But point. November in it more York. can talk New this about at Not something in

DJ Hynes

November there, for new as so is one ask well. I’ll that probably And are to But Okay. which the Shelagh out targets well, right. as be deferred going to

I they’re XXXX, very of you’ve retention at net think mean, to is I you the you there? $X.X profile When growth was talking I revenue how about, net keep two are that billion. billion like, of north revenue mass, for you retention? historic of the XX% are XXX. you today. combined guys businesses XX%, a the it $X.X implies in think about been like mean, what XXX, That can right. thinking ran that you Right. Do thinking kind like different ranges combined

Shelagh Glaser

Yes.

customers right. We really question a November. and you’re strong going say, offerings both provide DJ look certainly that and have we’ll answer frankly love. But lot as to we companies. detail more both in So, I’m at

slightly the So, we basis. different different. motions It’s, slightly on operate the a of are kind

in tried we’ve So and Certainly prior we are haven’t used actually the to by and therefore out. purchased new they’re to things, customers question, products the we about been map offer able that really as yet something, that’s how our over products thinking and how estimates. time combining may contemplate,

top on talking we And so that’d of what about. were already opportunity

DJ Hynes

Got it. Thank you.

Mikkel Svane

right. Thank All you.

Jason Tsai

next from Thank at Evercore. your Kirk Please on question you. the And turn over comes cam. Materne

Kirk Materne

distraction real seeing, sure about you’re deal. excuse make Hopefully, get quarters? bring first could right. All business this how of into can, for first the on is over a you doesn’t to Mikkel you another, how quarter your me. momentum sure bring big do last doesn’t talk on the way, make down this accelerating that the about I next guess you any couple slowed become you, talk you this business it’s Thanks. the year, Can momentum it just as to at, been the in as that, you as sort

Mikkel Svane

are all like, like more already really this that look pretty of think a online and I’m activities the very and to that excitement throughout we we have we that out us, natural this have there’s we to joint creates. our have continued conversation. many up Salesforce And the execution can trust help is quarter, things as can pumped customers like, so this go this have is course a in do first our our we kind And where and much to we and in And like just focused so we is for Well picture. sure a That but with customers. make on we races. much quarter, after conversation customer big like our basic and basic, And of the foremost I important. is to really easy of into data customers. so like, more are our prospects, opportunities This get next can overlaying bringing our this richer concept that year,

are very excited that. we about So

Kirk Materne

then just just international companies? us to to sort And the you can some exposure, maybe be maybe seem Zendesk of Zander area, remind one aren’t between Okay. familiar about your relative uplift, of that as easy two would

Zander Lurie

About sure. includes business States. Canada. outside That United Yes, our XX% generated the of is

Australia. in size in with a a very Our primary Europe. then U.S. sales we have the countries team dozen nice footprint in half operations are small here in And

in team to And so, in and have APAC LATAM Europe. benefit that countries and footprint and from we the other Mikkel intend

this opportunity. I is big think a

there happened up. to everything XX of rest world are the a that the lot and XXX,XXX of growing of the remember U.S., our and millions for software took world are to years rest Those it of Some days old or A decade there, need of in where faster. kind the you already them the of and over. enough catch Zendesk of are organizations has is

to just is this accelerate building. a huge opportunity our So channel

is our be And generation. going in big first demand strategy is once the XXXX. ahead closes deal Our product that a to of accelerant this half of

Kirk Materne

you. Thank Great.

Jason Tsai

turn from at next over comes Please Thanks, McGinnis right. Kirk. The question on your camera. UBS. Taylor All

move to next the Okay. one. We’ll

Brian at Next your Please on turn over camera. Schwartz caller Oppenheimer. Brian?

Mikkel Svane

just the questions. I all answered think we

Jason Tsai

All right.

Next at over is us? you Wolfe. Zlotsky Zukin at Stan Morgan Stanley. one here with there? Alex over Are Are Okay, you

Unidentified Analyst

is You you [indiscernible] for hear this me? on Can see me? Alex. Hi,

Jason Tsai

Great. Yes.

Unidentified Analyst

some touched that familiar as that question, with first of So little We a little on of will products it you may a really this with Zendesk? some be into, your think but you bit dig can beyond with in questions well deeper fit survey in – not for Zander. earlier

Zander Lurie

looking in where are or people surveys success about the a core this product, a a Brad to a market software mean, then product lot what their who TAM asked are somebody handful a growth. whether product. of that Officer experience. Yes, ACVs seen Those solution purpose The we solutions Obviously feedback. a CX get really it’s Salesforce in take. a or the a Officer, sentiment hyper Microsoft here. dynamics. using our that Experience demonstrably folks our familiar these Chief those that for business This needs Zendesk really, integrates solutions for with we certain solution A actions with looking We’ve and integrates attack is of with customers. are $XX is is These billion I have that leaders. cohort ton to offer markets, tasked or research built increasingly big understand for that Chief are a moment with understanding of of buyer, ago are of call a is higher Product folks that’s of key customers, customer than

customers or going a you’re a panel. a want about of if you’re really launch, launch looking so you to a takes cohort understand And campaign to and reach to product that

in largest, States the most professional solutions United software. and have liquid some built then takes XX panel We services. the We’ve

quickly. a the as brand, market is et cetera. your this of health us growing employee of course, mentioned, So ACV tracking a brand there’s I really high that And market big is for then experience metrics,

go after us market of that’s every really frankly, accelerate going handful going industry, we’re to help every in is that. a it’s the size that company and Zendesk solutions every So

Unidentified Analyst

you. Thank

Jason Tsai

Great. And Patrick from the comes you Walravens at JMP. next question Patrick? are there? Patrick,

Mikkel Svane

the again? sorry I’m Jason? name What’s

Jason Tsai

Walravens. Patrick

Mikkel Svane

second. one Yes,

Jason Tsai

you want, Patrick, you and on your There unmute camera can you please? go. turn

Mikkel Svane

promote – Patrick, to able to talk? be got should I second, one know. Hello, can you

Patrick Walravens

can right, now? me All hear you sorry,

Jason Tsai

go. There we

Patrick Walravens

it going so the for there’s that get promoted why us on that’s as panelists, is What’s Thanks. way minute takes the to by delay. a

Mikkel Svane

Congrats on promotion. your

Patrick Walravens

you. right. Thank All

software of So, parts getting love feedback And the in a move idea being that demand forward. part you seeing Zander this Mikkel, kind other lot helping of of Zendesk other I I the of we’re think of this into for solutions. and

stock to think it. all get deal, with have lot lived ISS The of were and right? against that and Zoom going just enough lost. deal investors on Zoom seven a all Which concern went we recommended six the fell this apart months modest didn’t I call, FiveX, an is a FiveX, stock premium shareholders. through was are down, or

it’s XX aftermarket now, you Zendesk and So accurately is in like the is below now. to doing momentum at look XX tracking a if very what hundred stock

at convince. the That’s is, the So deal why question Zander doing number end, favor and pay weren’t shareholders – this your they to And, to one, should going because you wasn’t how committed Why to that then right. to in obviously Mikkel, more. to willing price? this able Zendesk how this are of be Zoom committed it

that’s I direct question, think, the think very big So it’s but I a question.

Zander Lurie

I’m going as lawyers to the here make try and nervous Yes. as possible already.

our what understand we this product supports squinting of ran power many discussing. compelling what offering. just combined thorough transaction We a lot say. the board it don’t I to We Here’s the think in because a could enthusiastically and see been I process a takes of combination. reasons of have

in of care is super, I of committed This customers. so thousands and to serving me closing short-term what don’t in movements. particular team transaction, executing happens hundreds this this super transaction, And then the and the

I excited offering the company, product for to for our to better believe compelling. shareholders. We’re a value is It customer intelligence vision Mikkel’s bring enhances super

we’re Our to going opportunities have to and employees are incredible going serve customers.

speak I So the to transaction. can’t Zoom FiveX

make different a be this both to, shareholders of sides. success confidence I attributes not going got it to here. lot for but able on I’ve a lot think a only transaction, of close we’re

Mikkel Svane

short can’t like don’t committed reactions. to I doubt doing add to on about market term want I comment it. Hi, very more this. kind No of are that. I much Like we more, to

of the with can everybody customers. And, well think will look it’s provide this this, last ways very at who a straightforward. our I take lot we’ve do of the that and very These really to companies many two couple synergies. proven can course we operate value this over that kind of, of course of look to takes that see a in at how we investors, work are a and we need It’s already together years.

and feel I we this to confident very say very So through. about are committed

Patrick Walravens

you All that Thank perspective. right, great. for

Jason Tsai

Thanks, Patrick.

going to think we the to to of that get yet. circle didn’t I couple back we’re folks

camera? now? on your turn Can you are McGinness on you Taylor So

Taylor McGinness

Yes, everyone you can hear me?

Jason Tsai

can We hear Yes. you.

Taylor McGinness

so quarter couple perfect. you Okay, back bit there just XQ that of the up can my context the mentioned quarters. at how of being closing in this any what’s deals should and XQ Awesome. but the and in end were last Shelagh, ended difficulties know the seasonality technical context and of last guide? for quarter, were XX% high between XQ happened just loaded, in when think we in about, looking like of pushed that of the some a strong end embedded the Yes, about maybe little the guide end, assumptions XQ at you I talk being earlier

Shelagh Glaser

Yes. question. Thanks, the Taylor for

market. So I month. is anticipate That month big as we’ve up is this moved a new three reality that our

again QX So have is it yearend customer us and obviously bit always we we’ll a then do for that December. I new would anticipate a of there’s heavy month month that’s raise of, And clearly have. of renewals there’s in quarter a sort three, kind quite of quite a bit the and that to huge heavy that

that on and all would it’s So anticipate I hands Zendesk.

with coming we’re so So I had a We think QX, a such the excited. teams of momentum. lot are strong QX into

Taylor McGinness

it. Got you. Thank Awesome.

Jason Tsai

from Stanley, Great. And over Stan Stan? Morgan at will last come question our Zlotsky

Stan Zlotsky

good. right All guys. Hey

all bit issues I of there think a set as we’re little technical well.

kind far metric. Was billings mean, obviously as XX% to but year-on-year need be one year-on-year it’s that off CRPO in actually a need growth or one the it, metric, year-on-year Is quarter? of? look very we XX% use from that strong and So sequentially about, right ask growth, bookings on in growth if there or we change ACV of to to in like of revenue, I if that ACV we time plus the or mindful perspective, CRPO ACV proxy that wanted at as as just CRPO of just mindful be a there, anything we anything specifically there

Shelagh Glaser

it’s in hard QX to QX. many so but seasonality, QX move XXXX continue certainly some more there’s think I to going were time there see I we’ve think factors anything seasonality compare we’re just and to seasonality seen different because market, on, going so we every And to as

Stan Zlotsky

for what with thinking we the, product Shelagh that and about Got and, in obviously you it. are in How And did QX, heard QX top some the results that how the there. QX issues now? about impacted that track

Shelagh Glaser

looked a line So closely I we’ve saw that, for to we had, I make line good of, sort had expectations in continuing in that numbers with QX to the so and results really of mentioned to sight QX, there. I’m in de-risk I sure QX good got that pretty manage that think

new the put it’s place. I think So in we well sort motion responding of to

Stan Zlotsky

Okay, perfect. you, guys. Thank

Jason Tsai

our that’s all you’ll well a Investor Well, today. Zander, as questions as the to Mikkel New broader as limited Zendesk talked and I, to feel free we Day. Management in have about in for person be Mikkel both and to up speak event Shelagh get for and November Great. as as with Shelagh York, the and XX be sign It’ll able well Team.

to speaking So you and seeing to look there. you forward again Thank we you. there

Shelagh Glaser

Thank you.

Zendesk (ZEN) 29 Oct 212021 Q3 Earnings call transcript