Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the to the CS Disco Second Quarter of Fiscal Year 2023 Conference Call. At this time all participants are in listen-only mode. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator

to Head conference Lakchakov. of ahead. like first to Please hand today, speaker Investor now would over the your go I Relations, Aleksey

Aleksey Lakchakov

afternoon, Kiwi second Michael Financial quarter on XXXX. With Officer joining discuss Good and today's Lafair, financial Founder of you Officer. call and on call Executive are the Disco’s Chief conference Disco's to us for results me thank and Camara, Disco's today's for Chief

Safe within industry. Today's Including of market Harbor use and call opportunity, statements position, market the in include outlook meaning will our legal Reform but XXXX. future capital financial and opportunities to provisions developments the statements private of the product litigation looking limited securities regarding strategy, the our expenditures, growth technology of performance, of forward Act not and

In website prepared our and our replay of release, our found ir.csDisco.com. call press at Investor a earnings on addition to be can today's Relations SEC filings, remarks,

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

Forward-looking made. beliefs only and statements the of represent our as management's date assumptions

that company's is in from on XXXX, and with Form financial XXXX the filings quarter March the affect on the XXXX. included ended Factors SEC could year the section XXst, XX-Q June XXth, for time-to-time, filed XXth, with company's results the titled company's ended the quarterly May report Information its including SEC Risk factors the the upcoming in Form XX-Q on for

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

Kiwi. like over I'd turn the to to call with And that,

Kiwi Camara

afternoon, second XXXX customers Good million. and adjusted year adjusted XXXX earnings by the for million EBITDA guidance improving our and over EBITDA the for Aleksey. our revenue QX, the above we quarter-over-quarter. year-over-year. $XX.X more year-over-year. And up Thanks, with was $X.X points EBITDA was quarter call Adjusted of margin fiscal end of Revenue everyone, With quarter EBITDA million. to ended welcome And XXXX. high than $X range. by XX% improving XXXX basis Both adjusted were negative

our We are pleased results and progress with profitability. our toward

and seeing And continued investments the near have doubled more same win result have a that opportunities enjoy calls, QX the performance to and account customer prior growth term we part pipeline continued improvement recent term marketing. since metrics, opportunities. we that experienced such needing in as as XX% at continued discussed sales various rates improvement up to marketing We we than while improving. year, total compared year-over-year, drivers the meetings when were On of QX were XX%. have IPO. in discussed time, up our earnings are last that And our highest of Inbound near leads in

several representatives development and accelerate from us increase our While sales promoted working. product classes that by reductions sales to offset customers, of roles team. continued executive new optimization, we or adoption account cost to and accelerating usage and bringing inside our reductions year due some efforts customers activity to we These these allowing especially our have early matters see this on to us is our usage to positive quota-carrying onto SDRs year, tell in sales largest times are our Last platform.

successful SDRs We gain their all producing reps our that at workflow. And reps the early first legal way them $X in digital revenue. more in seen industry suite, reps. Disco’s a customers revenue the with helps their as enroll, producing success strong that have quota-carrying days already million of our the and through legal These the program than time leaders SDR and annualized achieve internally kind promoted XX with sales experience within this rapid reps success, experience familiarizes some product believe them

review pipeline total our from and and quarter, an growing We SDR sales SDR sales to pipeline other top many this we our performers believe in forward. to these inside our scale events the deals roles a of of in of the way size in customer Already, are field in will our going pipeline. functions, and success our of seen our team be of the such as sales talent have effective business, program. of activity alumni In both rebound lead and efficient the

of our been successfully. our and has the sales reviews of operational increasing percentage sales One initiative teams key

the In quota-carrying almost this first is the which prior generated the first more half year, of double XX% who of than of revenue, review our did so year. the reps in half percentage

one larger also with that in million the increases than generating in customer revenue reviews quarter. have seen reviews, the multiple some We review quarter, in $X more had in

like active distant efficiently revenue the our more pipeline. last in international years. XX five become This than $X.X range the This user the has quickly matters law three of and customer in across has eDiscovery Disco, and months. reviews generated review, around More wide several over to over highlight million running in them that customer legal review more a on XXX for quarter, large would this helps QX, document simultaneously over they firm platform legal have Overall, complete more finds I total and been recurring matters, a world. recently, a with users of that

for their of has global an to robust large partnership traded and review began perfect this for rigorous Disco customer They example for workflows selected It and been the a most stood peers. of after Disco’s large more antitrust XXX global Disco And QX impact. complex usage capabilities and quarter. our since $XXX,XXX datasets matter. and Disco publicly with Law using a AmLaw This Disco than us. technology shipping a company handling of firm using in customer, company exceptional the global reach have Another been review as increased has XXXX the our against out quickly.

to let discussed Disco capabilities features earnings predicted indexing, how and matter turn call platform We as Last our AI cross Now and and we product. with integrated AI by AI, are our automatic me powered R&D. key clustering, discussed into topic such tags, AI.

eDiscovery. also We large chatbot our integrated introduced Cecilia, for AI scale

for follow lab believe that platform that have and is in long in continue attracted we our have AI our the and AI to The We of way. engagement precede market to the secure system that data in that fact trust AI private reliable, in decade already engineering, friendly feature and as for our the edge platform. workflows company the legal that cutting our the legal of and user investment cases a productizes we use use technology a of earned variety a

to lead legal as adoption of well AI. position All the and industry

While We It demanded of deepen three investment is to product in released key our category our we non-AI in this this features is AI base. customer important. long them capabilities. existing that all core, by also important continue quarter,

contain so messages emails lawyers that content content reviewing is typical waste dynamic When In is such reviewing that are unique the chain, a do included useful time multiple earlier and not the of it emails messages. First email the email contain times. chain, suppress other later copies emails same that identify an to threading. in

the Disco a to often the Disco all For to called identified on capability considering prefer time, long with inclusive emails to reviews, given basis But customers range. a has some subset database. that inclusive unique documents reviews had a global emails a from limit emails. content, content identify for within In has example, review a certain in documents, fall emails unique with emails date of

to with unique arbitrary so content documents. Dynamic threading That And subsets of do in dynamically. in the real allows time. to emails customers is identify

define the Dynamics and As user’s allows accelerate in date thereby unique then searches eDiscovery. a that keyword, With Disco other a legal and setup customers content by review AI using further and suppressing by review universe stages emails. population or tags, to threading complex limit contain process document reduce that review. customers identifying emails example, universe review review predicted This for

use With Another In consumer providers. Disco with features languages a translate while XX and customers cases either Translation, do App none exciting translation or product that tend use services, to free quarter Disco allows may this over leak to functionality can platform. into and to lawyers between data private intended translation so different in for with lawyers leaving of online documents a the translation of translate button released Today, App third-party their data securely This Translation. convenient, platform. expensive click right is documents

to export intermediate process allows We frequently the Microsoft and Office customers download repeat from then step. Cloud have lawyers subsequent emails. emails directly for collections. Outlook, XXX for to also This Today, any no connector collection or released with the data, ingest

connector, to Disco. Cloud can customers Microsoft Outlook themselves, with ingest data from the the flowing eDiscovery directly With data

to more for in common believe As connectors in and for a on XXX. build our moves will way more collecting corporate more of including matters. capabilities, preservation cloud, become systems, whole that already direct securely legal connectors a data These Office like the cloud we data which allow this variety place of

the on progress our Cecelia. share me let Now

available group. track citing Cecilia on specific have piloting In data able Cecilia year. on and documents customer contained The been have this document positive. to a her we specific Cecilia databases, to by select questions our receiving we generally in support is has feedback answers. private are end QX, customer to of been while overwhelmingly answer to with based customers expert began We the rapidly

the traditional And team associates had have Cecelia an to dollars a is customers In not client found document to base one team have. user save coming believe expand the many would and hours instance, Cecilia in original associate’s look the improvement paid kind review. continuing will separate to months. methods. big we document using that forward impact the on review thousands and of to legal Cecelia their We Cecelia mentioned be our of found that aiming a of review their for important legal This are our

LLM AI of from that years pass many cases. we as technology that that LLMs there of winning noticed We competitors the to We our weaknesses matures, with will optimal is believe have different our different and used that is be and many approach brands, are agnostic.

than third-party AI best models the including believe all different an that a flexibility our capabilities different we both advantage single market that We us rather can doing so use to will provider have give platform going LLM on and product in We for engineered and internal LLM effectively. or in models so models. bringing tasks,

our I With Michael. We will quarter our forward turn with accomplishments. AI team's of and in progress announcing we all to look next happy We're the to that the over capabilities coming quarters. of made it set this

Michael Lafair

revenue QX, In XXXX Kiwi. XX.X you, was Thank million.

the highest the QX in in review our growth year-over-year usage Our revenue QX to saw since quarterly attributable rebound and quarter we XXXX. review in of is

We the year. improvement our activity are we go-to-market in optimistic are and of overall the seeing half about second

all In Adjusted financial the please remainder unless a a specified gross and of expenses discussing non-GAAP that operating statement, the references margin, our to net measure. note basis. loss income also are on is EBITDA non-GAAP otherwise

was Our QX gross XX%. margin in

before, mentioned of from gross nature on of use our and fluctuate example, amount we data our it, platform. ingested customers for and As type margins based our the period-to-period, the on managed

to of prior X.X the to to of in revenue margin revenue gross we've million decrease the a or XX% QX band's was through expect the expense million seen quarter We and This historically QX XX% year-on-year within of sales be of represents XX.X in marketing year. continue compared

was quarter Research or in by decrease driven of for and prior of reduction and of was an approximately to efforts revenue AI represents in a XX.X primarily decrease decrease costs XX% revenue, a revenue revenue The XX% This by year. sales the development X.X QX compared with a of personnel. expenses in to increase expense year-on-year. of was research million development and million the for QX million, capitalized in associated administrative driven personnel. compared prior of XX% was marketing This decrease the and year. XX% our of and in QX QX development investment in primarily in General X.X

QX quarter X.X primarily services professional the negative decrease fees vendor driven a to represents representing operating total, year. reducing lower of decrease contracts. loss by XX% QX margin than Operating or to prior prior over termination X.X year our of of negative XX% million of in in were was the an the an in lower approximate related over renegotiation This expenses reduction year-on-year. costs million, QX representing the compared negative operating is through In X.X in of million This QX operating XX% expenses.

in a in $X.XX an per Adjusted negative XX% to and net in was XX% $X.XX negative X.X compared million of EBITDA prior QX Net compared of the is margin per loss share QX of XX.X QX in margin negative per million, XX% for or to or negative of XX% X.X million the QX, the was of share, negative of revenue, QX adjusted loss revenue of year. loss adjusted in EBITDA QX EBITDA prior of share Net year. compared to year. prior

Turning cash negative of first to and equivalents. statement, in with sheet compared and half XXX.X of XX.X million ended cash cash the XXXX flow we same negative million XX.X in the million balance the year. flow was Operating cash to period in the prior QX

to raising of XXXX. million adjusted negative prior XX providing of to XX adjusted negative revenue range our And million million million to million. and negative XX guidance million range We're in EBITDA guidance fiscal revenue negative a through of for X returning outlook the QX, XX million. reiterating the range XXXX. million the our for Now to year guidance XXX in EBITDA X guidance We're XXX to of

like the operator would over to I to the to turn call up operator? line Q&A, Now for the open

Operator

question [Operator the Instructions] comes Tyler line Radke Your with of Citi. first from

Your now line is open.

Tyler Radke

And to question. of the you I'm like any see comment how cycle that And I on taking evening, progress uptick in then potentially profile and Kiwi. just conversion. on just the with you're if an accelerating coming wanted your for pipeline. we sales Generation, And comments leads. Michael off expecting Good sounds as an more those. how just quarters, of over lead XXXX? of you're you could nature start the could you thank it to know thoughts and head Yeah, revenue seeing kind growth on the to that into how lengths, you those wondering you're Kiwi.

Kiwi Camara

sales team lead customers. from And we SDR expand a to it earnings really today, working opportunities we're deals. of closing generation year-over-year by XX%. our few And talked and numbers are up on step about the other of how basis, kinds team CSM And teams, that through of each at inside the new field ramping identify past shared numbers well looking pleased funnel, sales then across members the I've our performance calls, and to pipeline. the our were to on existing And the

And we've same up the enjoying And IPO. since near-term elevated broader continuing enjoy pipeline, the the we're opportunities win rates to that of were XX%. despite been that time

the So, the is overall see way those think this that now up can deals end, also are in flowing I through X,XXX. growth all posted continued to the you we've in which customer to count,

of shoots, some belief growth going So, forward. are these there green that things give are that of terms us the in

Tyler Radke

you. a the thank on maybe follow-up shoots. for green And Yeah, Michael

reflection maybe the you increase in a and whether what's it's QX review Could So, both Kiwi and QX sequential talk Or the large a cases? the if pipeline with year I QX, the Thank full you. pretty commentary? strong about just you guide guidance some at. It making of kind basis. on some implied the of hit giving say imply it's does guidance. just quarter-over-quarter a confidence into that updated on QX year-over-year of

Michael Lafair

second also half. thanks. really pipeline. Tyler, to good providing the also a is the XXX. feel XXX year where we're the optimistic QX and question. related about That's of feel the about guidance. good just, guidance We we really really It's business in to full range And And

Tyler Radke

thank Okay, you.

Operator

Your Jackson line next of question comes Ader MoffettNathanson. from with the

open. line Your is now

Jackson Ader

the little customer maybe is guys. I'm curious, expected. bit per average evening, is coin other The the this good is of Or a larger ago you? putting Great, because on coming that smaller? growing due customer, think are side pressure are weaker. it revenue count, we may But than some board customers what's pricing today that faster, I that? be to years I'm customers a is driving versus few on curious of new

Kiwi Camara

Yeah, dynamics. it's two

or consequence, big get our very with we customers to That's as their of starting of headwinds And overall first, reduce have so the on down. a around platform experienced spend try spend. usage And nature that their customers. to seeking usage where the reduce to change most

typically on maturity, customer new kind relatively ramps three talked then continued Now, Disco time. add grows to five-year we've In we've over the to for new logos. of about small, but the starts side, customers, past, at of lots positive and to

new still has Sometimes somebody at the is when it's it adopted company, very faster, much a who goes expand Disco land logo especially but and already previous a business.

Jackson Ader

still a the ago? And I that that, the, they net today, that two, guess do the type years same have just following to on the you three, say five-year or opportunity adding up as customer were let's five as type customer that of, customers three landing, landing you're say of new

Kiwi Camara

in if improved anything our actually Yes, that business. has

So, last We three to stories some customer examples steadily years, our we've part of script. moved up five over gave the the markets. in

got Some customers material new in including who size. a one year customer, less than very to

firms of sign We say has our large not down. along customer logos five expansion average or over newer of wallet multinationals I if So, would new the opportunity. many continue up that the all anything, spectrum. are law up customers large But potential years, of big course to gone a provide

Jackson Ader

Thank you.

Operator

comes Your line Derrick the is with to next of now TD question The open. Wood Cohen. line

Derrick Wood

now building, the factors cost to updated the gross is starting, on this are large And gross the just other call lot the you've I'm contracting margins Or on little any bit. Oh, have that guess, one and a added Michael the production? this once language out times views some that had kind a impact first great. investments time of on I some goes to Cecilia, potential it? of obviously that are around into there bounce of more that AI had Thanks, curious, we've that models But does quarter. unexpected margins generative that of a was and reflect

Michael Lafair

past, over seen in having not in be. AI historically the are the where is in eight that in that will The future future. an that bands of that we've to the we're to margin that the band, expect quarters and profile we've on don't talked terms So, last expect four the they we the we about making investments impact

Derrick Wood

versus Kiwi, Or are you vector search you it capabilities? search Okay. with more you queries? are on thoughts that search? curious, get to embracing well view keyword natural contextual kind answers thinking of trying yeah, -- about I’m on language vector Do your your And about technology? as what's more you think

Kiwi Camara

worked is in it's vector this believers we've absolutely. all become many around one This that those years. been for a is key suddenly big years. vogue, some many, right? Yeah, that on component of that at new, That's is clients. not things delivering we're has search for And many, in but feature of the technology. And, many to We're that something of functionality

transparent to to, So, I traditional the about will search. historical think going We least what are technologies or search we're searching. the think precise, be though, more that a search vector it more and search people the user kinds not returning. ways some of like replacement at vector in a vector of of are believers more to is big search supplement replace perhaps that say will

Derrick Wood

it. Thank you. got Okay,

Operator

next question Your comes Needham. of with from a Berg line Scott

is Your line now open.

Scott Berg

still in this quarters over those optimization in you've the macro everyone. reductions magnitude we quarter? got or I to guess the had what to my about last for the should of maybe the customers kind maybe of two size of relative cost here. Hi, talked couple Kiwi four about backdrop? that you taking some think How questions. we seen your Thanks a

Kiwi Camara

I consistent think quarters. the four over we've two with they're to seen what last

different their through budget So, that times, customers, and depending it's neither and on. problem smaller. different on prioritization different go this nor at is process right? The so internal cycles customers So, larger,

take the on And customer cost. eye we're so through rolling as customers sharper different base, a still

Scott Berg

it big AI Got then And know I topic. is helpful.

general of with compelling. although You in the Cecelia, very Cecelia. that cycles guys not it up but could I the But making lots sales are AI within is sales just it your saw demo specifically, popping in of certainly use investments be, processes? your your recently And and Maybe platform? was that yet

Kiwi Camara

AI built capabilities our the historical our every of presentation are that to they're look capabilities do demonstrating value some strength, already platform clients of a or deliver range for part have platform, legal announcing part years. the and newer those a into virtually to because that forward right that many automating been of begun by we This as the we Those of way that AI growing other is our range through clients. things We've Cecelia, work a we Absolutely. about core well quite shortly. AI accelerating capabilities key as with greatly regularly that

talked As in remarks. we about prepared our

actively live client clients, Cecilia deriving have matters. And tremendous real in access now clients for private litigated we've on got We value.

note share trying One like your And of what document, a And of we AI thing. find sharing capability it clients are where to the saying, Cecilia is those is when things you’ve then use document, our colleagues in, cool you products, share in what going can see people they're put found. cool they're the to a about a this was it. there's look ton found. I a And

going to is, in area existing conversations, new customer focus prospects so only both and think, customers. And I grow as with this a

Scott Berg

Excellent. taking I you questions. my Thank all have. That's for

Operator

Your Parker next line Lane the from with Stifel. question comes of

now open. Your is line

Parker Lane

of the the to to hood you've marketing think good inbound see under remainder Thanks work? Hi, And referenced that sustainability of those where incremental Kiwi, the as I in the lead putting doubled us the accelerant inbound year. exactly year-over-year, lead marketing dollars how much you the investments guys. take and questions, an you're volume, for throughout you made can REITs you afternoon. taking volume

Kiwi Camara

customer look, if our the the sort maybe that's seen, law addition reception course, that Lady marketing, And improves a got with that, rates take a win it it the The improves a marketing tremendous not turnout interconnected, it's big you of the ads advance, campaign. example, for digital launch better marketing, that performance the Jaye you of our do biggest new encourage brand sense thing. when and your So, of things. I'm programs the mix it in base. believer performance you've improves are of is, to of that

into where they us Anecdotally, seen talk reps, they've they've come started talk can they ad. the of has to ad, but customer when And we the offerings, only the be to it we a about to the our cares heard liked before, and not beginning about meetings the work not understand a company, better. to we're are law, but the technology of the products trying use to make just that that's as the customer ad, who that our company law

of so there with that spirit kind And our can in intent be customers. alignment and

a Before more discussion we about the can detailed we we dive that functionality into can drive. provide and results the

we right, do for to provide that connect very large different to effective kind So, selling, contributor. but regions, also still customers like marketing, with audience I that of events, to old-fashioned opportunities we've digital our think local existing the marketing, lot connect today. big Disco a conferences, brand customers, optimizing think events social our campaign work, industry large marketing, and and done prospects, But small is, also is one with of performance for field in is both things social and I

Parker Lane

can interest there algorithm, in And, how tools these is XXXX, those from think you're growth And sell approaching outlook of hold in that there. the baked Got tools. the much both XX-month platform. if to talk and the it, color beyond? the about thanks you and in to the Curious bringing I of how much cross seeing efforts requests just we're and mark of

Kiwi Camara

customers the gives that to the started And General will want it's big platform, we more Counsel, we're ways as in request. holding way sell been with But tools growth enterprise expand. that's get those pleased earnings second, to those on of Yeah, to prior reception talked frequently it a is folks directly that we've more about two started terms get very have just driver places is customers a and really reasons. our new to where with for in One logos. calls,

buying requests. may Now, not they wind-up holding

they something them start might do or requests. withholding eDiscovery Many with else. start or review First, of

place, also General very with help desire to preservation starts demands, and to But migration request that holder comply often, conduct incoming manage legal like with their Counsel's in organization's them conversation the have product a cloud. the can overall

products. investing so request, been And we've withholding we're actively pleased those in

us we hear of talk integrations And products are about have overall the and feature with between a products calls, enhancements, those pleased product those rest You'll trajectory on demonstrated. the suite. earnings our

Parker Lane

you the appreciate questions answering here. Thank you. Understood,

Operator

comes Schappel question from Mark with Capital. of next Loop line Our the

Your line is now open.

Mark Schappel

Hi, taking XX% it of my this Kiwi that quarter? eDiscovery revenues you for is good assume question. evening. the Thank in generating about product to is fair

Kiwi Camara

revenues represents by product by don't the can still largest I say lines. share eDiscovery But We disaggregate that far ever.

Mark Schappel

Great. Thanks. talk just how little other about And you're that Case kind wanted some I products, of just Builder just a the relative rates along? seeing then they're the hold legal growth and of of to coming

Kiwi Camara

Some of a the basis rates. have other products enjoy growth consequence, higher smaller and as

number number of of growing which platform Builder. the each let's on Case using the the terms platform, of focus the so And the color, of mentioned, of Case In really that with of number I'm Case Builder, the adoption the Builder, pleased users the sort tremendous of on you we're seeing matters of things stores. growth in terms

have Builder, So, been in number timelines depositions that we of of Case number track and chronologies built.

very usage those showing growth. have created. very, of Number of for strong And events been all that are metrics

In product of announcements only the technology into products. some shortly going around the have of Case Builder, new and accelerate those this coming suite. growth to parts will other building some think those addition, AI we're And of generative we our

Mark Schappel

Great, thank you.

Operator

with David the Hynes comes Canaccord. Your of next question line from

line now is open? Your

David Hynes

your as evening, guys. conversations. how in informing the availability? think proposed good Hey, mechanisms general wondering, Cecilia, for pricing of that's kind is strategy your And on you Kiwi about I'm early customer then feedback what

Kiwi Camara

we're at of ILTA, there's which a industry having So, of the to the great the start conversations quarter. will some big conference going bulk In coming kind of happening. particular, up start those coming conversations in called these

days So I it's pricing. provide feedback to early think on

AI years the the to the wind least and platform it goal QX, Our for first capabilities of pricing we'll is settle being. what and course on QX at over up call AI

a we'll I with bit update for I mix, on we earnings a AI provide an platform-based the will earnings billing call a AI of this And our talked level, AI on thoughts call high fee usage-based capabilities. believe what top be. think annual on some about pricing on about is right At and last mix the our certain

David Hynes

QX Thank given it savings the of then, your of timing OpEx? it. assume you. reflected run is in that got are restructuring, fully Michael, Okay, cost not And QX, rate just the fair magnitude to

Michael Lafair

Yes.

David Hynes

you, Got it. Thank guys. Okay.

Operator

question line from with Ikeda of America. next Our comes of Bank Koji the

line is Your open. now

Koji Ikeda

much so Hey, guys, the thanks question. for taking

QX. So, prepared when sure to sounds than cases expected remarks, in came some like review listening you that and better in the it had

guided kind last you there the puts of trying just to review kind to incorporated earnings Just understand with performance? any step the So, on review QX taking it takes that call, of a originally And back. was the in when guide?

Kiwi Camara

Yes.

Koji Ikeda

thanks And at question -- a up and the annualized when ARPU. Kiwi. then, a to looking Okay, it's guess I previous follow

the in you start versus new it kind a maybe revenue us expand I only different So, to the ask basis. on of think be guys way. opportunity. super And helpful that But would do net annual an I to question realize understanding underlying retention give

helpful. qualitative would be give if maybe really it a so you aspect So, in could

revenue So, above the the net in is, it question XXX? below or retention the was quarter,

Kiwi Camara

that I'm provide number out, give that than more we basis, on happy may to we helpful. Well, color only as the be an but Koji, you point annual

of things couple a think retention. of in going expansion terms are and on I So,

have have the of four still the that we left. and first, that sequence had So, we of really reviews a away for quarters now falling big

to we your see did question had some goes million quarter. a than review across that it the our of particular, more seeing we one number a performance this customer in where and up added reviews, first dollars are we in green shoots Now to

quarter. have, And certainly that's something didn't we that previous the in

that. there's So,

a So review right. is that from retention. shrunk, has And take

like by overall to way talked is on use about customers big using a the one manage our platform, thing here, call. we way for the they which changing do, in of I features earlier more as usage, seeking spend they product review active in And reducing the and platform, of other our the what questions of or volume that's think overall on retention ECA their is last costs. The to changing as happening opposed which vault, eDiscovery aggressively earnings example,

dynamic, figures true among across Disco, their the as has normal they their relatively time customers the and of of especially spend our the with. throughout those more they grow portfolio. to more tend we been more justice that first the small, then sized they smaller grow five Offsetting have medium still start of history customers, the product it adopt started over call spend, usage products and And as product where

Koji Ikeda

much. it? Got so Kiwi. super Thanks, Thank helpful. That's you,

Operator

comes Our the now open. line is Thill question line The from with Jefferies. of Brent final

Unidentified Analyst

you around Kiwi that Thank sales? questions. selling review color on new new you ask I Brent ramps guess, any products, there that into starting is green Wanted and reps for baked lower Are around my they are And side the the these Kiwi, Thill. to now XX% review at just [Indiscernible] of have volume? are for Michael, Thanks, then on one mentioned review? taking a you. This shoots

Kiwi Camara

many product the years. Sure, I have you think established if Disco, a and were if company many, way an team, sales think for is, to single you especially like this about

two And sellers Your to going harder from selling good one get product. right. at to from two going than one three, is that

and to eDiscovery. of market single company, sort think That there and being to there's rather ways than the platform, get as a of platform. think get different using So, a sellers function, way to many of customers of multi-product using step to our our us a or of being

from making talking product multi product to is about. and what our jump success that single I'm So,

product. first transition multi green team of to that if reps using also work. customers and as I Disco the and beginning this not percentage legal sales business, the last as is the XX% improvements year. in of from that This double of thinking have attach than it's rate, seen but think platform for When quota half kinds that share now the thinking we've market to good, be single more indicative revenue, of product, product were definitely Disco different will, more applied shoots And our it's almost of make across many review one than generated review our a customers because for the of because you can the stat our of carrying percentage only I

Unidentified Analyst

Got in EBITDA the margin QX previously. then one embedded now the And mid-teens I you negative it. is teens year, for guide That's at follow-up guess if super for guidance look the Michael, the Michael. low helpful. just versus for quick

are what wondering, Thank leverage are just you might in So, be? line baking you. that items? additional you from And certain

Michael Lafair

question. the for Thanks

been So, are of you in guidance both working four on there's combination AWS also levers have not QX also that also optimization line. to year as where going We revenue, hit we've our just COGS the COGS, improved and going that you're of a And and terms adjusted EBITDA on to but to we working models? your were we've below numbers. for the it's the aware, improvement full guided with expect that for those out obviously come in

but talked prepared in And attractive is aggressive past. managing basis the attracting We than non-staff unit things the our per a this we've on software. and a around of then the like remarks talent and really globalization a talked kind very we've about basis worldwide about is costs that more in had but on fourth best the just this before what

impact those the are that will numbers. levers our So, overall

Unidentified Analyst

Perfect, thank you so much.

Operator

now for will Kiwi to Co-Founder CEO back I the over remarks. and turn closing Camara, call

open. Your line is

Kiwi Camara

Thank And you joining your Disco. for you thank interest today. us in for

Operator

and Thank call. today's for concludes you that Ladies joining. gentlemen,

You may disconnect. now

CS Disco (LAW) 9 Aug 232023 Q2 Earnings call transcript