LAW - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the CS Disco's Second Quarter of Fiscal Year 2021 Conference Call. At this time all participants are in a listen-only mode, all lines have been placed on mute to prevent any background noise. [Operator Instructions]. I would like to now have the conference over to your first speaker today, April Scee, with CS Disco Investor Relations. Please go ahead.

April Scee

you the us second financial year thank call today's quarter and XXXX. discuss to results afternoon for on joining conference fiscal Good for Disco's CEO; Kiwi on Officer. Disco's call me Lafair, are With Co-founder Chief today’s and and Financial Michael Disco's Camara,

Securities including Harbor Private of quarter will call, including to for review the year growth our fiscal and provisions XXXX, Act quarter of Litigation XXXX for second regarding and financial full the XXXX, we will positions of today's quarter our third and opportunities. but guidance results include Reform statements XXXX. discuss our fiscal pursuant for During forward-looking Safe call to our statements the the market market and year not our limited full Today's the financial opportunities, outlook, third guidance

In prepared addition be @ir.csdisco.com. filings press and call release, on replay earnings our SEC or can of IR website today's found to a remarks our

and results, statements uncertainties from or Forward-looking unknown forward-looking cause implied materially by or statements. those to performance our different expressed the involve be may that achievements known and risks actual

XX Forward-looking the made. SEC, on in the that to beliefs only affect and statements the pursuant factors prospectus is could XXXX. results company's July section SEC with Rule in Information from the risk financial time-to-time, its with factors titled the of filings represent included our XXX(b) company's filed as management's date assumptions including on the

be the will made the quarterly for XXXX. quarter information Additional XX XX-Q in on June company's report available ended Form

superior to reconciliation GAAP financial to GAAP in a like is the a With equivalent GAAP. the financial versus measures measures we in available closest their limitations call financial today's of between that, Kiwi. of our I'd in using These turn release. during non-GAAP over addition substitute to non-GAAP and non-GAAP measures A earnings non-GAAP performance discussion of and are call, with prepared addition, to In measures accordance not measures. for or discuss financial will and

Kiwi Camara

April. am with our in afternoon margins you and X,XXX to basis highlights. our million, and and some with welcome had both to year-over-year, our $XX.X rapid by negative company. continue call an I unfamiliar of I excited company, first customer strategy. of incredibly year, QX, first EBITDA be to our usage I With we you efficiency us. But QX Good discussing this our of to wanted up financial X% across increase the with speaking adjusted excellent driven compared in earnings negative revenue up new with growth, We spend public will those strong QX Disco of base out time Thanks, and market XX% prior over to to introducing customers. operational demonstrate an a as of point a points. all XX% few

you provide little those of I we For bit of achieve. to to new background a Disco, would are like what to working on

in partners Before and were launching a practice Texas. in XXXX, litigation corpus my Disco building Houston, I

by I was. was how struck legal antiquated entire As process a the lawyer,

is or of judgment. tasks departments notice you legal law majority If that of walk you firms, the legal spent not halls do vast time human any the will require that on

that lawyers born would idea a powered don't that to practice of a to modern parts solution create the human was the require And the AI allow ways judgments. so automate legal

companies P&L, them, that core that and operational all invest finance regardless engineering, corresponding company's industry, power software functions for of all any sales, legal. marketing, in at look HR, but these of have functions, not you true legal. is If IT, they Almost

about documents Word between few. spreadsheets, with relevant legal a as have information and to out ready Today Excel and data. major from the to the and happened instant to This Lawyers data solves. really to achieve legal enterprise video departments. and is the can recordings, to gap through optimal A mountain FMs most software legal name data solution Our the that of comply the messages, that goal be the regulatory a executing Think need figure do, every to raw massive work strategy. powers litigation is such documents, exists only corporations every problem voice it, and requirements to created matter, of data emails, large our become day. that have of that able company lawyers PDFs, they regulators go find amounts of to to producing what the the collections prove extract in for work outcomes. so

complicated, was Disco, vendors. and gap of Before solutions service set insecure premise that opaque bridged expensive, professional by on and point an

status that disrupting are We quo.

have built three record solution parts. enterprise legal of allows data This handling software that for matters. basic We system in a has

store that The first from that data process it multiple life the lifecycle enterprise systems collect all record, legal is participants a to legal and and enrich data engine allows through matters. industry of of data enterprise

second platform document producing lawyers allows to for legal lets the are. example, to with data relevant the the regulators to what work And conducting obligations. The of lawyers review is organize facts third a take by a and determine action, that complying discovery review legal

We three on have products this platform. built

system the and in the is where reviewing legal organizing matters, all to First and related documents. which in system work ediscovery, record Discos engagement used a is producing for of legal data of engage professionals both enterprise

accelerate to the hearings, among Second best enterprise focus solution testimony, for system in firms of the outcomes our lawyers transcripts use filter, and this what review. consumer and of process practicing long of that world, source law and of discovery driven brand matters XXXX, his clients find new is for Than of dealing to for General year, for legal acceleration our organize had document the is tremendous been AI started Disco Disco migrated document the critical Deputy statements, quarter Counsel company of Disco a job program of Together, XXXX, customers case procurement and a in customer. product providing new solution. products on all and ediscovery the third issues automate experienced well non-documents last XXXX second QX this prepare ediscovery. the series to company Disco these Disco's process manages growth records well-known deposition, and new corporations for adoption a and major This things. of known Today, legal enable has our and our caused and for that and for with court Disco is A And mission the technology we other Review, ran their he major sole not hired ediscovery engagement the Review. second quarter between a legal to in company set when largest the standing quarter evidence. of of a which a of fourth first law great in data. where their witness way his their quarter the lawyers the is some He value to them is example

Disco's years. quarters, have journey a been the new historically have multimillion customers who in spend. So taken we one impact company this adoption example is on from saw accelerate has the through in adoption a three company. mobility that several of our ramp zero at journey their company can of dollar disk lawyer business. This That level our great can Lawyers to

is joined rapid solution a dollar company adoption of Another grew to QX in our plus in leading and million a global the that travel customer be quarter. example

difficult key most proud them to moments. a through their customers, are solution. help We And partner for some mission of a critical these we are

expected well attracting complexity, help up sustainable we Overall, total the are growth to are to market. the XXXX. demand solutions generation We is as to regulation AI a with spend solution data in for driving global IDC. operational our and and new the professionals The a $XXX services be world these billion. billion in bottom according total challenges the to large we a is ediscovery of believe $XX market Statista market legal $XX of modern legal calculation, internal of around way. growing addressable our believe scalable is enterprise the about powered all According By on for rise as billion, growth

class and a work magical a Disco feel experiences legal lawyers. to how and create. intuitive product build prioritize and everything company that of law to world the We order engineering combines in workflows, lawyers with we user in understanding think, As deep interface

how today demonstrates growth with customers. product rapid vision our Our resonates

We are our early large growth in very cycle a market. in very

and Case Builder. are to are the priorities it only win of off, close Review first in existing Disco. our To Our the call this customers, Disco new IPO beginning adoption and Disco for usage within earnings Disco expand customers, expand

strengthen law. to the we category we believe our work have technologies a Although has develop solution, of rule that already just begun defining

financial our through I'll it turn to go over Michael to Now results.

Michael Lafair

Thank you, Kiwi.

discussing the discuss business customers' I and some our would our guidance, usage powerful to our solutions. of I from all model. generate spend We substantially Before unique, of our like results revenue time

are revenues without based simple customers on at commitments. Disco have easy based a particular our and We can usage to the our customers' get started make it of fluctuate solution, matters a on they actual usage of and incredibly nature any long-term customer's legal with contract, Our number with time. for

reviewed obligations, like we of growth. documents generally pricing attention SaaS of contract later focus the metrics monthly rather this customers because the need to will their in current in scale they remaining on know a model In initially be allows but on usage. usage easily matter not amount how we customers usage. at based their and legal simple process. performance transparent not know do not needed total do focus Because to those us, cases, many Our our and billing the legal until or on our customers solution they We most do revenue time adopt with billings, traditional dynamic,

Now let's discuss our guidance. results and

had discussing basis. was As across operating of a our continued count including expansion XX% to on QX Review. revenue the noted, of remainder and and note are We income ediscovery otherwise unless year-over-year. share please accelerated $XX.X of Disco the Disco all the results expenses, mentioned, adoption adoption performance strong statement, up non-GAAP references that In million, board, Kiwi and

raised expense compared million, to margin margin of we of scale negative $X with XX% XX%, year. marketing QX and million prior strong IPO, Our $X.X total was development Sales was proceeds compared of our cash year-over-year versus to dollar expense consistent of QX both gross million in dynamics of XX% we operational a to actually I a cash initiatives a ago. $XXX.X in XX% negative basis, this General revenue in margin the flow on in to of prior prior of revenue and year-to-date $X.X an QX the negative or revenue, revenue, million as the QX Net in compared COVID-XX a QX was the on we efficiency in expense XX% ended the per we sheet in revenue statement. $X.X XX% the of prior negative performance XX% year We X% per margin of in year. of $X.X year. year. commissions. operating year, Research operating loss QX $XX.X was and compared a of of underwriting $X.X now to down compared X% pandemic. of equivalents. of or XX% revenue, $XX.X of July expense to XX% revenue of in leverage prior $X.XX undertook percentage the which in EBITDA the $XX.X million prior to of quarter, and In revenue cash prior $X.XX result over margin $XX the turn administrative discounts million and basis, Adjusted QX, XX% share flow year the go-to-market million while loss of prior balance and and with representing or increase the loss organization. year, negative versus was loss was in response to million of demonstrated a margin Operating continue of to negative with $X Net cash million Operating share of year. million million, was year. prior is net negative our the was the in of and EBITDA million compared will

Now turning to the outlook.

growth we're For and of the revenue guidance and providing QX year-over-year $XX.X in range XX% representing million million XX%. between $XX.X

different as can volatility a I volatility previously, begin legal we products. mentioned matters those as and inherent model, expand create how decreases we based customers and usage quarter-to-quarter As shrink, matters increases saw year-over-year outsized there's our so have business and XX% in revenue in and from activity We growth. where QX, growth of saw usage this

adjusted year quarter. We're We this XX% negative negative an at our expect grow the million, several million XX%. we for year negative see a $XX.X outsized performance revenue costs in On operational as products, margin As basis XX% $XXX.X guiding the not adjusted growth to of the over EBITDA should from full to of between million guidance, in $XXX.X providing year representing you go-to-market you and fiscal and range next for continue next quarters level can year-over-year our every do anticipate team. EBITDA 'XX, of and $XX.X guidance between midpoint. representing invest in and million and we're

business and in position our expect adjusted We on by for advice to We're and our enabling million between legal and to their to negative transforming $XX.X grow invest continuing doing we're leadership clients. in America industry, professionals summary, focused edge internationally. cutting provide In both North to product the and $XX EBITDA legal and million. technologies maintain better hyper continuing outcomes this

quickly world and the like around now operator legal are to that call a for continue. Q&A. are the over momentum tool We use confident open Operator. will the must up departments line to the we this becoming for I'd turn to

Operator

first Sterling proceed. Instructions] The JP Morgan. question Please is Auty [Operator with from

Sterling Auty

that can try customer, see that what to first some and about smooth question let's you Guys, things the generate, usage, single the off, quarter-to-quarter? comments get the customer some the variability of would be it increased about to of of might drive say Maybe you're you a kind your are that Hi, welcome the and large just out thanks. markets. to volatility from Yes, doing that and model business my mentioned public kicked to, consumer to

Kiwi Camara

a our five customer mid grow figure of out has of be figure taken start that then grow maturity. historically each through adoption a customers to at and customer goes customer an years. be figure typically And a journey So, six they'll to to several kind upper seven as

that specific usage fluctuate particular their Over from will the journey course cause received of a legal in customer. revenue that fluctuations and will the

revenue overall impact of our particular becomes any smaller. overall grows Disco our customers usage revenue as Now and fluctuation base, and the on smaller

that base in Sterling fluctuations expect specific out would usage grows customer the we as so of aggregate. And our these more wash

us. and what for customers years expansion, of to used in a journey huge shortened we're is take focus doing What terms obviously QX which recent seeing is general that have this In drive multiple them and the in we're this quarters, to more in taken dramatically.

in that zero year And of to Disco has that to more shifted seeing from promising last both of and business. in Review. that adopting something product dollars journey their we're million Disco QX So with customer program what revenue of is customer think this our is that's ediscovery about Disco We three of multi super a ediscovery then went over course quarters. over the the terms recently

for consequence history mobility lawyer them switch they growth of revenue As we've take people that with Disco their more curve as through and a companies, adoption recently. adding logos accelerates it been that

Sterling Auty

question. relative you are had increased would in one of How resources lot you've expectations How to what And you a versus follow sales and go-to-market those resources, significantly meaning seen your past? -up headcount. the ramping then makes That your sense. characterize,

Kiwi Camara

Yes, we're delighted.

we look outperformance you QX, every of how it. across if no saw aspect slice So the business matter at you really

our So evident we started on that this of in the when COVID S&M of year, really limited. impact was ramp became business it last QX

lead some through our reps those seeing funnel. acceleration would the who seeing already historical impact excess from our seeing in help them opportunities we're those how performance seeing of identify of new in QX, rates, in are bands, products. all success relevant some QX, one QX, terms reps the just things you leads from for in performance tenure but even Disco win increased in And flowing is of more they more reps,. QX. clients and nice generation for the team, primary And are and We're in their for from benefit reps, customer so well, see recently hired We're not jobs where we’re perform to

from, with Disco spend Review, their with Disco ediscovery impact So can example, relationships the Case multiplying us. for have to Disco begin Builder, growing them of the which and

pleased where expect market going overall the to services the tailwinds our the going best the overall, stepping think So from now and really market, as growth. We investments shifts continue where on-prem really gaps solution industry in from are time in in to given our we're the we the favor in the is we think software on ramp go-to-market to invest is we context to the have and in with there how cloud.

Sterling Auty

That sounds good. Thank you.

Operator

Please you, America. question with is Ikeda Auty. from Thank Mr. of Koji The proceed. Bank next

Koji Ikeda

Thank of Really one. you out my for Hey me, the from here. questions. quarter first Kiwi, hey gates Mike. first nice taking Couple

public, in prospects Now out inbound any have change awareness. interactions terms you're and volume of the seen customers, changed I Have or between guess partners how that maybe of you market things and overall meaningful there?

Kiwi Camara

delighted been we've Koji. Yes,

I think being is like hearing school has and other to is to judgment, business legal longevity software customers resources going are can tasks works, is valuable, focus the Disco software What things everybody the require partner be we're the that that to of the legal the coming a enabling went public from where more of agrees gives and the that that work with long-term. automation our are company function, that larger over the legal, customers' that every way confidence is on they transforms do. lawyers kinds to by so don't human to department that law

space the and over about, only talking our company General partner we to things a part about, when talk of the the go of with I generally or look, department, we offerings, about great a be that be if current technology where, journey customers, need my conferences of sense limited much a Vegas large were I had so long-term the to together. also we're I'm can was the work really this increased existing I next our accelerated can talking our still and we I point partner to big public, think with Disco way many we'll but Counsel confidence more attendance, Those and clients. do recently, is And think work we in-person. bigger engage kinds three customers, ILTA. think by not in of going going our by for with also out, we're how have delighted about five just to of new not a ability conversations one but we're legal customers. And it but in-person in only It's large through technology we two engage Las Koji, our I'll years, course, that

to we're increased meetings the were events, the booth at learning about floor at at in point think what inbound, even suite our traffic I on were up conference more delighted we to. people of our interested with by your about really level our really who

Koji Ikeda

Got rate? did for it. But Mike, give And then number to you retention one the the maybe it. happen net for customer missed revenue question I total

Michael Lafair

Yes.

Appreciate thanks, Koji. the question. So

pleased as quarter, customers number total were our as well terms of really new we both in of of growth So in with customers. our existing customer the the expansion

it but not a at were the all very, time, number DNR As quarter pleased we very around. very, overall. disclosing We're you specific customer can results, see growth this count a with the really was with the strong or

Koji Ikeda

it. Got

Thanks from last And question just me. Okay. that. for

onto deals million that came with adding strong very couple must sequentially. a platform lot there of here been have the data. big very, $X.X XX%, guess, clearly quarter, this in So of I growth a

data? point, So data to thinking that visibility about how mean, tied I the gets stream off revenue the should some taken we right. at of that guess I be

your that can customers stream, now of And we about When could think that? with prepared So data? are data so people do off? potentially we the sales visibility for talking be that it how how your come about

Kiwi Camara

all from think I cylinders. you our driver you absolutely faster particular increased at if adoption be, the you whether in ediscovery there all adoption customers, about our growth the in core was sense in So or in XX% how look think really internationally, in in on you business of and There journeys, at about year-on-year in single about increased whether prepared can look good everything new customers, you we growth growth talked QX. cylinders, driver think two the like of Disco at no look growth whether Whether you isn't examples, existing were you look Disco of at these a firing whether or growth Review, a growth QX, United of remarks. QX, that things on outperformance States, the gives fires just product, when all

our deep our the our where of bottoms In we have internally we data success clients. relationships Look, into terms of have usage. sales how customer insight customers have teams with forecasting and obviously teams insights

the that of clients We of platform form have and needs that insight that in confidence gives into to use visibility resulting going us into telemetry the our gives legal how all on a us will legal data time. matters and we the and over picture change

and the as think which customer revenue our part as expands, bigger point the fluctuation customers point as from a base. that of usage of our particular and customer other with I the smaller any is of base mature, bigger Sterling, more I overall Disco become impact data in becomes smaller a and made is our gets

Koji Ikeda

much. great quarter. Thank Thank you Congrats you. it? first appreciate so on it. Got We a

Kiwi Camara

Koji. Thanks,

Operator

Radke Mr. from Tyler Thank is Citi The you, next question with Please Ikeda. proceed. Group.

BoYoung Kim

on is Hi, Kim Tyler Citi. BoYoung for this from

revenue only said the customer and strong one it growth second wasn't cylinders. out incredibly as know on even you was large if one and you quarter but So I that the all firing take was that

do you year? this saw half that if Thanks. after latter wanted into trends ask the So of how see demand up and giveaways or pushing enterprise collection? from extent pandemic, up from occurred you see be any court the you during closures did that whether benefits pent overall data the in demand delays what kind some that to And understand of better to demand pent you

Kiwi Camara

interesting. It's

timing over mission relatively critical we really thing one that legal of usage to drive think I actually they platform. control solution our the and from COVID, is in limited learned events our have our is clients that

sequentially quarter reacceleration. So you one saw impact had, the flat we then and had QX, at that we rapid year look last QX, COVID if

so think they people is to in are strategy so year, and needed hand collecting that we legal released seeing who of QX. on. way their hold much had related are a to to enterprise needed data are absolutely you is I really remote involved when not then suddenly to could demonstrated previously demand, with think in by remotely something when up not review, this to go that, that matters, the driven legal working by pent when people And even legal it's because look a they customers QX cloud, into a which get the data what But and IT that when at collaborating COVID law remote so I been just or them departments firms

so shift to five cloud cloud, And that clients solutions tailwinds solutions. say, to and to from that driving that a the a tremendous cloud before Those on services doesn't were solutions three to the COVID in-person tailwind, on-premise the that's we're are software shift or based going going services rely years from that the on look, depend solution years. are maybe to know I in based we

six to the to cloud go year months, one years. two or need we in Now

So coming driver seeing COVID. where out of I we're think that's of demand

BoYoung Kim

do see the over about ask I multiple quarter might also in in law And you. past did place on wallet opportunities, have you that, firms share side, initiatives have law wallet considering multiple with like gain firm to And drive to based especially they're billing place. wanted on what share gains hours. larger in thank then ediscovery What that of terms you Great, firms solutions the that solutions?

Thanks. for an the to really what's usage solution increase of from efficient Disco? their incentive firms So law

Kiwi Camara

unique firm us about we out sell pay So its legal a represented to law department, legal to The tap by corporate own of be that it's think budget into, pretty way is department pocket. and magical rare together that's will time corporate Disco every class for firms we that that lawyers the to one a in law build with think we've the for is coupled or this way more understanding law on one always the experiences a firms. bringing to world feel of lawyers. combination deep focused of product And of work engineering things

sell a are department our of from competitive often we as for those we the side-by-side users. legal going client, will law And the add department, wow, using using for represented So And really lawyers consequence, very as lawyers Disco. don't solution users, and other the solutions will firms I -- for legal charge to to then the your question, Disco prefer those that very, reaction lawyers have experience clients. is, the have that

reducing for in cases, the overall to quickly, actionable things getting does what two clients other they efficient firm. the the examples on so legal their tell lawyer at more spend their adopting evidence handling about law is And go do of they technology and use the they can on And document, client more our review sell disco. off. have This from impact what first about being

helps They're prefer the as lawyer the to services. them solution that makes to be can And more on efficiently. hyper good. how much it market it a they legal business the it And selfishly, handle client on, for their look matters win they them First, going telling new them gets and is work to able working Disco. more in second, competitive legal which consequence,

as us their the a users the plan client. law to they that on that's to So sell And nexus the law in in They this industry. legal to legal where it. the the how industry, law introduced us firm, introduces from of next throughout firm users And they consequence, firms, law center sit love talent at other think the of our a firms from and sort to department, so business. add of about we

of there, customers, and the XXs many Law in course, law United that's of largest are there XXX. that Am Now, of Disco could out firms, be the XXXXs the States, companies

law departments terms have in the exact penetration virtually legal and because will the solutions why we law corporate even have wind Am will in that our number multiple working using see firms filings. the number So up using firms multiple they Law are That's if XXX Disco, you early clients. relatively disclose of you of with all of you

the we of As of law the number share will translate relationships that into firms. we corporate at that increasing have, grow views

BoYoung Kim

much. so you Thank

Operator

Thank you. Please question with Hynes The DJ is proceed. Canaccord. next from

David Hynes

Congrats guys. thanks, on start good here. Hey, for the Kiwi one you.

during a and why cloud legacy that's against think typically first. versus legal service see go-to-market that are rates that higher strategy? counterintuitive the talked when they than talk it IPO win that leveraging your could you about providers case are technology. about the just seems It are Maybe I providers the actually you other you influences bit process, how

Kiwi Camara

of segmentation of it some is think the I market.

always Our after of in the law matters handling who strategy enterprises them represent complex legal some that been go most world. important are large to and the the firms has

And right of our example, plaintiff’s on the is to investigations, speak sometimes nature. competitors, for law But things cloud to internal for had I for of focus I other approach niches, wouldn't their want think firms, the have them. or way market. some of kind small I that very visions think, specific

back, of one seeing acceleration different in the the giving accelerating our I segment large And that big When the of so QX. one we're we and obviously of DJ, win for use large win is market, those cases. contributed across they our suited rates. those an us of doubt companies, really growing may cloud competitors. of not that's see across across rate selling every is at business matters. rates of about think in kind Taking things And the the types into well of we're translate other step And enterprise go-to-market. though, period, confidence have win legal kinds that if things may you a overall trend look investment data, a in into all that ticket That's higher some as the our performance outsize our solution to to no

David Hynes

sense prudent suggests of materially there QX kind perfect unique Michael has you're it the on Are Is just of that in makes given color. quarter Yes, we're anything the being in levels? quarter. of third outpost month IPO? guiding usage you from your first given follow-up slowed seeing it's to you I QX this the for top just just situation based of usage perfectly clear a on here And a model, want be guidance.

Michael Lafair

Yes, voice. to your it's hear great

trying you remind and So space. be for know, we also prudent are just as our to usage in guidance,

reading business queue, roughly still two we're as of where probably and S-X the based, left so in the base subscription. is our is from it and quarter, a balance that's usage month while the usage months So you'll there's into know, XX% see you almost the we're

trying to prudent as So be out. comfortable we're about guidance feel first be really a want and time prudent, just we we to our

David Hynes

Yes, sense. congrats. Thank and you makes guys

Operator

& Hynes. Mr. Derrick is Please next you, Company. Wood with The from Thank Cowen proceed. question

Derrick Wood

a congrats thanks great just great Oh, on and quarter.

that's drivers talk within the to in because market, perhaps Kiwi, First is a you banking out you services I financial there could are opportunity or And environment. litigation, that regulation vertical about specific growth one are just on one, verticals any regulatory the secular a of your facing traditionally call curious, lot and software? and guess, mentioned that increased spends the

Kiwi Camara

Absolutely.

a as and And of to year, course, the and ones. see addiction regulations more terrific very School this I an create Chicago Levmore in There's Disco. is think is Law paper by that world the trends of old one the get laws you to that law. rid in addiction have University tendency more incentive Saul every the that law of we to from a Of describes to great little everywhere for

every you the regulation few in has and platform, quarters. drives past litigation. growth privacy example, better secular looking about to jurisdictions an give Act, one is over our there the that more a investigations in Privacy and it varies that the about dramatic tremendous past way been And get is Think To the requests and drivers EU, more saw revenue the terms and access for GDPR, regulation the the data world. efficient We increase more subject of trend, And the more under corporations years, is and about also that's so on. is, there think growth of more of more you of there of privacy across both regulation, California the different how the So few in the in European and think the growth. and in regulation around year more QX generally, the that usage the GDPR. in more large handle business,

those ongoing and volumes GDPR we applicable targeting Disco AI. our volumes particular legal categories think that large With use in way requests, with to generally, actually one automated that's where solution, to of Disco leveraging very creates some for of vertical work services, example in financial obviously, an that cases. in our use new about require using area. respect lots concrete, change of of of of see large compliance enterprise the a is regulatory that's adoption to we've require So large seen a data companies of and in clients way deal More that

not it's there's competitors, but so partners, a in legal or legally identifies appropriate that that are before issue of specific that the on, or monitor proactively documents piece to steps so investigation can and communications inside a order happening specific legal take compliance formal the a a there's So and up. business, desire comes with department litigation, the problematic to rather

industry driver one that that specific we growth. that's So power to think will

Derrick Wood

or capacity That's of helpful. particularly aggressive to level? either us know growth numbers you you the rough in front? furlough half, remind to don't year guys second how and sales you'd be the can of like through hiring if and ago with kind you on year but Kiwi, versus I terms with actually the Thanks in sales be Michael, plan

Michael Lafair

a in the investing overall down. appetite picture, we're We're shifting in is not for shifts in can growth also from But cloud. of tell going our up, industry overall curve go-to more on-prem is our early business, market DJ software, just direction. we the you not giving we the services but to specific based think We time to when recently, numbers. solution from winning not seeing, on I There’s very we're that our at QX, what think have big in

so market. And to the months in go-to we invest share the market in out and acquire think time to scaling our capacity now, XX really this over next specifically XX is

Derrick Wood

Got it? questions. taking my Thanks for

Operator

Wood. proceed. with Please next Thank Needham. question Berg is Scott from The you, Mr.

Scott Berg

the Michael. on great for Kiwi, Congrats Hi questions me. start here. I two guess

First of solutions the this on of perpetually market. can of get questions all, is evolution in cloud one that the

how about While where today? ediscovery you earlier, thinking competitive and truly on cloud that litigation do markets is evolution the cloud feel solutions touched the start you touched Kiwi

Kiwi Camara

remote Well, One space, data. solutions services on solutions there. talk solutions the second very they difficult is prem. is One there's collect has think do a things and the legacy about legacy that to with to are I of people work the and for and to achieve reasons. couple for enterprise go been desire physically that or a collaboration, things which like is number And into the so require of

would are operations, shipping of these doing to people management, manual project And so actually back you drives data have people so on. and forth, situations teams hard where and manual

does cloud status the one, change of is that historical number And need Well, cloud moving so quo? how to enterprise generally. kind

you you data when leaving sometimes cloud So the data the without have a collect that can ever ediscovery solution, cloud.

it's So enterprise into that better rid of lot dramatically of data way hooking data a a gets collection that of human work.

it's Second, supports solution, work just an collaboration. because and it remote naturally integrated cloud

And and those before they're But department things of people a come firms after be cloud those networked and their law So home. home, based table the than working since solution industry, that inevitably, many law stakes. people that's at multiple companies, dispersed sent back, is again, with our even a so legal will those still have geographically And highly firms and many where COVID more also of kind better. COVID. makes are legal all some

more bringing a is you more shifts kind the profound to of that talk me about. the cloud bit about Let technology

in and with lets that really software is order of us can millions of cloud. to XXXXs, case the the their of on-premise of lets are in Serverless can the to load. with the might able data thus velocity to a to What streams if And keep processing that I the a to we case application, case that this bring a Disco servers capacity XXX of have chat, with about And exploded there, have XX and Amazon exponential million systems big to deal email, which is then with that incoming kinds solutions, product. now the with customers, them with maybe to email legacy spin basically enterprise a as up old that Amazon impossible got variety these legacy maybe and nature, us solutions, up cloud the you'll hundreds documents. a Lambda, and data its do lawyer, you still that steps hear When their in and spike that type, were data, up big required. started a be messaging in XX million couldn't be and users huge to XXX,XXX, performance of cloud, ago, many documents. magic addition this volume and the in of created. things one this compute And remains simply surprised you build million of keep of and data, and going do on compute what's systems So legacy actually, been point compute huge pain largest voice, so the ask to where that documents. outgoing explosion became Well, in talk is a scale on equivalent big differ different and problem? years not it's million of have And video, been elastic

So you capacity. with search can better deal

enabling a Corrupt work claim. Act claim, all can can intelligence, move small relevance issues, portfolios technically AI happening You These access things aggregate of that's that this relevance artificial of are data do things things intensive predictions products these legal we the are the from you and And matters, their also intensive. more specific in matters, learning we have compute extraordinarily platform. get like that can like make about a in fleets work to as can update Foreign run once, as And to very these things lawyers modern were of do like which of continuously signal infeasible Practices the we the we just super learn but not in But time, this, know do not to units it we specific before fraud to can doing to or grained GPUs only can system fine apply algorithms approaches they our but and we machine do to for cloud. to our because buy from platform. we across

going what's think And it's cloud? work, pretty actually but so what's possible. way not It be of transforms changes it to profound. the I just the impact people

Scott Berg

customers. built how helpful. very it, kind firms, great for But been the company you to from Lifecycle as last to gain specifically them of for before as disclose industry? Review for and on a legal like I you referral the ediscovery? individuals And do sell partner Got perspective, have years like, you to a have over just law Platform sell obviously kind the You follow-up engage with you, several outside can guess also then you of those leverage But touched contract of Management to things a the forward? suite broader Builder going you Case

Kiwi Camara

Absolutely.

the about you to delivery enable a much is high If legal think to what very approach technologies of do just what level, efficient we We this do? work. more use

human in relationships What time, firms one outcomes business. that to training business a a in that efficient services, they legal the law to efficiently. of go a legal law legal a that associates parts judgment, outcomes the that their with better tool And firm and and much make more law for large Disco win the don't hyper the law firm, to work and away investment more market in that they've handle And leading over and give arsenal does in a have more way clients. partners industry. so they the legal use and traditionally, does competing is their technology of done in automate how client's And corporate touting Well, do built competitive by convincing require their by work that's to of the give we of firm law for practice drives the so the firms for those learning can better the expertise partners impactful law firm? law in the business is super specific of clients an

a law more legal technology. the buyer. is, But and end talked solutions. law to at delivering law primary a driven corporate by motivated Disco services. firms audience the efficient overall the So services competitive about to in it more Because the firm we for being when That's firm our client, client, course, champion them of the market the efficiencies are in makes equally is

it's you is Now, and they for it. feel answer. aside you think They to combine business then that want for idea what lawyers bottom lawyers, and I'll software. how we're of English, personally which business, And case, line consumerization plain use if use And love tell a love using world that they experiences the sometimes and also product lawyers using what hearing is you Disco. is of This firms class our deep often magical love solution. with they that law, law respect that in engineering magic. the it, just the setting solutions understanding can hate before. build But and work in that's business enterprise on the ground, our uniquely the people that called these

Scott Berg

Wonderful, thanks for questions. my taking

Operator

question Mr. you, Thank proceed. The next from Stifel. Parker with is Berg. Lane Please

Parker Lane

for Michael. questions. and taking my Kiwi Thanks Hi,

the over maybe a as months bit getting what of about You've done for point into tipping existing customers and was contemplate industry to little ediscovery. talk their so? that could more job And the the you transforming a engagement. solution what Review pace is six Builder or But is I tremendous through Case of they hoping adding adoption last

Kiwi Camara

Builder. that two are this Disco parts Case of work legal of legal the kinds it's we So what what don't. out more figure of on exercise work require the often we're see, human of clients delighted products and growing Review journey Disco actually judgments, general and to And part adoption three what by and of

not things for about the human not XX the year, things be a or but want not there growth of just do. services, to more quite of are taking Our things are frankly, today school lawyers doing they next to judgment. went or story, legal billion months things the XX legal to the where they And are there market law that six for not doing, is and are lot years, that require next more for $XXX the next years, on

we're Why tipping Review and and build so is of beyond Disco are going more breadth on ediscovery the three the the legal over partner their our Builder, category it's usage we to someone to to they that and to the the Case the to what's things and things expand products. doing. more platform legal use does on. with increasing category that products applicable departments And see next Disco of work, legal is time, more Disco categories able about think So point? well because next continue just automate think our that to of work introducing from first legal When work of to ability we idea

Parker Lane

in the that Coming then all of border And recently you're cross today? can how it. second the way thinking the that seeing investments? domestically of terms Got enterprise quarter a platform quarter, you you performance trends is here up a informing use is about think about remind really solid large and in the what international us,

Kiwi Camara

not acceleration, internationally. U.S., seeing in but just We're also the

of who which multinational. you and business international the And if it's kinds so growth clients, internationally, What's represent both law generally they're appetite, when less interesting very more and look definitely fire. we actually our it's we think just the enterprises, typically, growth on our business, what's growing the at been the those for clientele, the U.S. firms has them. and driving about serve of investing about of large of then And growing

office multinationals, have had we Japanese matters litigation American to were or China, Korea, long we so international on was world, the cited cited had Europe, from our over South presence. an matters, in also London, solution an had Korean to everywhere Japan, we whose And to encounter before So multinationals, legal had first U.S. that we and to using clients regulatory on. before we again, opposite, with in multinational well Disco for Africa, all handling the

clients, law launch represented but firms And following the less a literally them. both the the about so years London targeted the way and was who few simply also London on about in we thought market clients, ago, more actually our American local

all large all over represent know, have world, of you firms and As the clients world. law offices most now over the the

of And so again advantage driver that networked of the that's, spread, take expansion. when we highly of industry to nature international legal

local It's are who what we of to seeing, discovered we're services the a incumbents the directly they've And actually, tremendous U.S. the the kind going big up people have is of that not once cloud. demand. relationship generally non these UK with in to of that you based just of Now, one markets, solution. built were what that is many straight is providers we're ground on going a we cloud they're in markets some in the

for And international of in good so different Disco terms that's growth. and

Parker Lane

Very Thanks on helpful. Congrats again. quarter. the

Kiwi Camara

much. so Thanks

Operator

question Thank Jeffries. Lane. Thill from next proceed. you, The Mr. Please Brent is with

Brent Thill

theoretically around maybe law versus the Hi, Kiwi. and you segment market that of feel actually becoming investors across opportunity? view a that and how of long story. curious can Michael. software the from help you're go I'm second, three could that segments explain, Many had the questions these you you I size follow-up could out current broader from ediscovery And you of if your before your run serving then

Kiwi Camara

me in address few that let ways. Sure, a

directly size. its First market

the bulk billion day. IDC, today that the ediscovery and Disco replaces heavy market that spent incumbent solutions of who to spend is So going the according of kind $XX is to every services

their the about customers, Disco seeing is actually that we're that Disco products, course, customers But who that we of market Disco And ediscovery. So With not is by spend for to third ediscovery. figures products. our what our just can in obviously customers those lots thinking customers us the or had room product, beyond seven on early beyond and to gotten about just adopting Review also our have second grow, original adoption core largest already are seeing before but and more Xx of gives maturity, ediscovery we're $XX which billion, their spend ediscovery expanded expanding for the for our product, our Case Builder journey.

of think filings the in bottoms the of actual calculation of kind We size, impact is Review up in can that companies $XX number the today, size in of our customers different on Case market billion. is included terms addressable source. and of which times based in according market. be of to multiplier the So Builder And size we buckets, spend party that buckets those number third a Disco

of runway, raw terms a of there's think we amount market size. tremendous just So in

is The other think way it about expansion accounts. of to existing

early figures But we account years, the four years, the did pace. in we're historically, same has at expansion was pull our And in you journey taken kinds their XXth those size strong customers recently. very as a even about, forward, pull from course, the that say of growth, of adoption at the journeys. years, new customer years to talked time, accounts, in of have we've many, that the to of As logos forward even middle provides of five add growing seeing years, of continue largest that we saw rates more who we taken many if at growth And multiple those the we're tons figures, three or to seven are all five customers with QX.

away think software, huge we on-prem from that in picture, super in driving what's big growth the So shifting willingness And we're cloud. our to services market invest away to our in to a is our in from early go-to-market. direction, that's curve

Brent Thill

Kiwi, to in attached, it And just as still relates the to is that ediscovery? Review mid-teens confirm, somewhere

Kiwi Camara

both increasing Builder. of customers product we're Review We're not and the multi of be customers growth kind specific you Review the the of can by I as rates, as ediscovery, product, straight propensity just attach to the delighted tell across disclosing well Case

Brent Thill

for a just follow-up and Michael. Okay, quick

were add was I Is to out. XX from to different plan? on do or somewhere the still team, you that carrying to roughly sales quota you think tracking your month a a goal here around year are XX plan, to XX on

Kiwi Camara

continue also and for going expand to the game time reps in plan next quota out were invest and for we that's to carrying market the the half second so Yes, year. and the go-to

Brent Thill

Thank you.

Operator

Mr. from with Markets. is Thill. you, Thank Loop Yun Capital proceed. question Kim next Please The

Yun Kim

company. as on and a I a first over you. what statements earnings background paper which public that congrats all notice Michael, the forward-looking call lawyer Kiwi read, exactly Thank there. disclaimer, Definitely with expected, substantial the fairly is

So the up on expansion. Brent's just on following product add-on question

uplift multiple those customer products? For add-on Just products, mix those is much adds those another customers provide when a what typical the with how between product? products wondering usage

Kiwi Camara

both and three, size the I Yes, who all and ediscovery. Review Xx to and are Case can the and -- guess so for customers ediscovery be Review Case Xx using The well of Builder. Review Builder

total spend. of multiplier terms a it's their in So

Yun Kim

of the factors time the thought? you that drove good margin drove on I or what any Great, of worst hear. And margin bit then about kind gross did thing thought, were to than little that's just a in dynamics, behind what the that maybe a a just adds? that us of a perhaps, good can driven talk is dynamics the the cases And there margin gross better you matters think it's you lot what or of quarter, or being new customer drivers number which number would imply of more new data for that by the customer quarter, regardless ads have remind gross the instance, what if in normally to new ingestion, impacted you the lot more

Michael Lafair

So appreciate question. the

different number So -- gross usage there's impact like factors And just margin. based. we're a our of usage that the

so people cases. adding And cases inherent expanding variability data in there's ending to cases,

you of where affect files new data just On variety lot can the hand, they that a factors, depress other of are. depends margins types of little you margins margins type that differently it a a margin have really in. not up, like what there's terms data But that's different means and can lot on of of potentially was in on there ingested, But outsized of side quarter really have could performance the have QX, clearly and a a data go bit.

may which expect like margins, quarter-to-quarter, side annualized there So variability be the guided saw past future. net-net, we from the QX, it's usage over but the QX to in continue where kind to basis that you of net-net going we're we have and with base that's on some in comfortable an margins,

Yun Kim

Thank much. you so great. Okay,

Operator

like Co-Founder closing and conference Kiwi remarks. to no time. additional CEO, are Mr. would waiting for now pass I you, to Camara, over There questions at this the back Kim. Thank

Kiwi Camara

been joining never more I've for today. optimistic about business. Thanks us our

encouraging new quarter engine the second growth We add to our customers product of potential. our growing more demonstrate while led over believe Our of results but simultaneously adopt strengthening Disco's as not tremendous opportunity one our our and have to customers, products and expanding to well products accelerate as our clearly brand time, out and we customers just growth a internationally scale product of portfolio. existing

thank XXXX and earnings We our is to we for call. behind interest aggressively are opportunities how joining invest redefine your law and QX of growth in for can long-term drive our growth durable will and practiced. Disco each We continue confident you

Operator

CS second year of the of fiscal day. XXXX your Enjoy the concludes Disco's That quarter rest call. conference

CS Disco (LAW) 3 Sep 212021 Q2 Earnings call transcript