Cvent Holding Corp.

Good day, my name is Savannah and I will be your conference operator for today. At this time, I would like to welcome everyone to this event fourth quarter and fiscal year 2021 earnings conference call. Today's call is being recorded. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, please press star one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the conference over to investor relations, Ralph Lynn, ICR. Please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss the financial results for Cvent's fourth quarter and fiscal year 2021. With me on today's call are Reggie Agarwal, Cvent's founder and chief executive officer, and Billy Newman, Cvent's chief financial officer. During today's call, we will review our financial results for both the fourth quarter and fiscal year 2021 and discuss our guidance for the first quarter and full fiscal year 2022. In addition to our prepared remarks, our earnings press release, SEC filings, and our replay of today's call can be found on our investor relations website at investors.cvent.com. Today's call will include forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our financial outlook, including our guidance for the first quarter, In fiscal year 2022, our market opportunity, market position, product strategy, and growth opportunities. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. Forward-looking statements represent our management's beliefs and assumptions only as of the date made. Information on factors that could affect the outcome of the matters covered by these forward-looking statements is included in our periodic filings with the SEC including the section titled Risk Factors and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, followed with the SEC on November 15, 2021. Additional information will be made available in our annual report on Form 10-K for the year ended December 31, 2021. In addition, during today's call, we will discuss non-GAAP financial results, which are not prepared in accordance with generally accepted accounting principles. A reconciliation between GAAP and non-GAAP financial results is included in our earnings release, which has been filed with the SEC, and is also available on our investor relations website. And now, I'd like to turn the call over to Richie.

Thanks, Ralph, and hello, everyone. I'm excited for our first earnings call since returning to the public markets, and I'm happy to announce we had a very strong finish to the year, and despite the pressure from the Delta and Omicron variants in the second half of 2021, we were able to deliver a strong Q4 and grow our top line revenue by 25%, beating both our revenue and adjusted EBITDA guidance. And because of the continued adoption of our hybrid virtual and in-person platform, we are well positioned going into 2022. Therefore, we are reaffirming our full year 2022 revenue guidance that we gave investors in July of 21 of $622.6 million in revenue, and increasing our adjusted EBITDA margin guidance from 16.5% to 16.9%. Now before I talk about how our business is performing, I'd like to provide a brief overview of Cvent and quickly set the context for the transformational changes within our industry since the pandemic that we believe has created a much larger market opportunity for us. Now Cvent is a SaaS platform that is used to plan, market, and execute engaging events of all sizes, virtual, in-person and hybrid. Now, our event cloud solutions excel at powering almost any event an organization hosts or attends, something we call the total event program. So we're a single source of truth for event marketing, event spend, attendee engagement, event ROI, and more. And to run effective in-person events, you need a venue. That's where our hospitality cloud solutions comes in. Now, we built a vast network with over 290,000 venues called the Cvent Supplier Network, or CSN for short. Think of hotels, unique event spaces, and destinations. Event organizers go to CSN to find research, define research and send RPs to a select number of venues, and then we monetize this by selling advertising and software to help venues attract planners, stand out from the competition, and more effectively close business. Now, fundamentally, our event and hospitality cloud software helps our customers grow their top-line revenue and drive engagement while reducing OPEX and ensuring greater compliance. Now, let's talk about our industry's transformation and how C-Vent has responded. For over 20 years, we've helped automate in-person events, taking the industry from a manual pen and paper world to a digitized, repeatable, measurable process. Then, the pandemic hit. People couldn't physically meet, and the digitization of our industry accelerated out of sheer necessity. Virtual events were the only way to meet, and they took off. Virtual broke down accessibility barriers, drove massive increases in registrants, and allowed event organizers to track attending engagement interactions at scale. When the virtual wave hit, Cvent was initially used for just event marketing, event websites, registration, and so forth. But within six months, we launched our brand new virtual solution, the Cvent Attendee Hub, as a core part of our platform because our technology was future ready. Built to maximize attending engagement, the Attendee Hub serves not only as an engagement engine for virtual events, but also for hybrid and in-person events as well. With accelerated digitization as a tailwind, we delivered a very successful 2021. And we're entering a world where in-person events are coming back. Virtual events are now mainstream and more organizers want the best of both with hybrid events. And our platform is built to power all three of these event formats, in-person, virtual, and hybrid, which we like to call the triple threat. This increasingly digitized events world has led to an explosion, I'm sorry, it's led to a large expansion of our total addressable market, which is nearly $30 billion, according to Frost and Sullivan. We believe we're in a great position to capitalize on this larger market opportunity due to one, the core strengths that Cvent's built over the last 20 years, and two, the emerging opportunities tied to digitization. It all starts with our seasoned management team that has helped navigate us through these tough times. We survived the dot-com bust in 2001 when most failed. We cemented our market leadership after the 2008 financial recession when others fell behind. And our ability to pivot during COVID, highlighted by our launch of Attendee Hub, that became by far the fastest growing product in their history, demonstrates our agility, resilience, and innovation. We have proven that whenever a crisis hits, we emerge stronger and better positioned than before. Next is our proven ability to innovate. Our R&D team is 1,100 strong and growing, giving us the resources we need to drive innovation and expand market share. Finally, we have the ability to scale because with a global workforce of over 4,300 employees, including over 2,000 in India, this is a real competitive advantage when it comes to operating 24-7, moving fast, delivering profitability, and most importantly, innovating. Now let's dive into Q4. We continue to win new logos with our event cloud solutions. During the fourth quarter, we signed hundreds of new logos ranging from Fortune 100 companies to small organizations to associations, universities, corporations, and nonprofits. For example, in Q4, we closed a new Fortune 500 pharma company for a five-year 2.4 million TCV, or total contract value. This company was still using manual processes to run their events, but turned to Cvent to better manage and control event spend and processes. Now, 23 of the top 25 pharma companies in the U.S. use Cvent, with plenty of growth left in these accounts. Another example of our success with a verticalized strategy is in higher education. Just in Q4 alone, we renewed or closed six out of the eight Ivy Leagues. One of our largest deals closed in Q4 was with a prestigious research university for $1.5 million in TCV over three years. We're now powering over 400 universities and colleges across the globe. We also continue to sell more to our existing customers. At the end of 21, we increased the percent of event cloud customers buying two or more modules to almost 50%, up from 45% in the prior year. This increase is primarily due to customers needing one platform for their total event program, including Cvent for virtual events. Let me give an example. A state healthcare council in Missouri has been a customer since 2014. Pre-COVID, they used a mix of onsite and event management solutions. When COVID hit, we sold them AttendeeHub. In Q421, they signed a five-year, $583,000 TCV deal, purchasing more registrations and attendee homes. Now, moving on to the hospitality cloud, because of COVID, there are still headwinds in the hospitality industry. However, despite the negative effects of a hotelier's meetings and group's business, we believe a recovery is underway. For example, for the first time in five quarters, our hospitality cloud business grew in Q4. It was up 12.1% year over year. Over 9 billion of RFP value was sourced on the Cvent Supplier Network in 2021. The Q1 2020 included RFP sourced pre-COVID. So to really get an accurate picture of our recovery, it's best to look at Q2 through Q4 of 2020 and compare that to Q2 through Q4 of 21, where we are up over 55% in source dollars, an increase of almost $4.4 billion. Now, here are some sales highlights that demonstrate an industry in recovery. One of our customers is a small hotel chain located in Germany, a country that has some of the most stringent COVID restrictions in the world. When the pandemic started, they downgraded to a basic advertising package on CSN. We stayed in contact with the customer and shared insightful data that helped highlight the recovery in the German market. Our actions helped us land a new one-year, six-figure deal reflective of a 73% increase from their pandemic spend. Now, if you remember, about 60% of our hospitality club business is from recurring advertising dollars, but the other 40% is from software solutions that help hotels analyze, manage, and close more group business. One interesting growth story that shows the power of both our advertising and software solutions is with a prominent hotel chain that has rapidly expanded its number of properties over the last few years. As the chain added properties, they kept investing in Cvent along the way. It was foundational to the growth plans of each new hotel. And they turned to Cvent not just for our advertising capabilities that hotels use to market their space to event planners, but also for our software solutions to help them close business and collaborate with planners on designing the event itself. Has this chain expanded their hotels, their investment in Cvent went from 500,000 a year to 3.4 million a year, which is their current annual spend for 2022. This is a great example that as hotel chains and properties, sorry, as hotel chains add properties, they grow their Cvent spend accordingly. So from these few examples, I hope you can see for both our event cloud and hospitality cloud, we're continuing to see broad-based and growing demand for our solutions. Now earlier I talked about the larger market opportunity ahead of us due to the digitization of the events world. I'll now go into more detail on the key drivers that gave us confidence in our 2020 growth. First is the return to in-person events and the accelerating demand for hybrid. Now, while virtual is here to stay, the world can't wait to get back to in-person events, a space we have powered for over 20 years. We've seen time and time again that nothing beats the power of in-person interaction to create bonds with customers, win over prospects, and energize your audience. And it's exciting to see that planners are taking what they learned in virtual events and now applying it to their in-person events. With the Cvent Attendee Hub, event planners and marketers can now start to build attendee engagement before the event versus waiting until everyone arrives. Instead of a know before you go email on the event agenda, they can live stream the agenda reveal. Event organizers can enable their attendees to network in advance so they can connect with the right people before they arrive. Now we're seeing virtual elements being used for in-person and hybrid events, which is driving demand for solutions. As in-person events return, planners and marketers will want to leave will not want to leave the massive virtual audiences behind. That's when you enter hybrid events. A successful hybrid event requires one platform that can seamlessly and simultaneously deliver an event experience for both in-person and virtual attendees. This is where our platform shines. We're able to help our event organizers and hotels attract large audiences, run safe meetings, deliver broadcast quality video content for virtual attendees, and of course, deeply engage all attendees. all through one platform and when arriving and when arriving on site technology is what will ensure a safe and impactful event pre-pandemic we had built a leading solution suite of solutions to help planners execute on site throughout the pandemic we sustained that investment and introduced contactless check-in deeper support for hybrid events and partnered with id.me to introduce event health check for vaccine and COVID test verification and health status questionnaires. We also enhanced our on-arrival dashboards so that planners and executive stakeholders can see near real-time insights into the success of their events from their phones in the palm of their hands. Data such as how many people have checked in, how many attendees are currently watching the livestream, what the feedback was from this morning's sessions, and so forth. With many competitive solutions, in the on-site space receiving no investment or even going out of business during the pandemic. We believe that we're well-positioned to capture a disproportionate share of the market as in-person events return. Second, capitalizing on the power of engagement to drive demand for C-Event solutions. When in-person, virtual, and hybrid events are digitized, attendees leave behind a trail of digital interaction that can be compiled and scored to take quick, effective follow-up actions. This is why so many organizations, including marketers, love events. You can generate an incredible amount of information on your attendee and your buyer. And if you can track engagement and if you can put the full picture of interest together, that's when you really have something special. Our platform compiles this picture of attendee and account engagement across not just one event, but all events across the total event program. With engagement from front and center and in their minds, increasingly, Organizations now want to extend engagement before and after events occur and are moving to a year-round engagement mindset. The massive reach of virtual and the proliferation of video technology is allowing organizations to find ways to engage with their audiences before and after events occur through live stream, real-time communications, and on-demand video content. This idea expands what Cvent can be in the marketplace and makes us used more frequently across an organization. As we look at our 2022 key growth drivers, we plan to aggressively invest in video, including our new Cvent Studio product, and see a number of opportunities to help organizers develop their live and year-round engagement strategy that will only make their overall event program more impactful. Now, the third growth factor is the expansion of our ecosystem. Let's start with a new product we're excited about for hoteliers. It's called Cvent Instant Book. In an environment with reduced demand and a tight labor market, hoteliers and meeting planners have struggled to maintain staffing levels since the pandemic. And as meeting business recovers, planners and hoteliers continue to look for digital solutions that will allow them to service this demand more efficiently. In Q4 of last year, we launched an early adopter pilot of Cvent Instant Book, designed to simplify the sourcing process for small and simple meetings by allowing meeting planners the ability to view live rates and book hotel meeting space, food and beverage, and AV without the need to send an RFP or negotiate with the hotel sales employee. And hotels will be able to generate demand more efficiently by not having to respond to small meeting RFPs. While we don't expect to see a material revenue impact in 2022, we believe this to be an important investment year to set the foundation for future adoption of Sieven Instant Book. In addition to focusing on automation and efficiency, we will also continue to identify ways to expand our reach internationally. In support of this strategy, our product is now localized in 18 different languages with a focus on simple, non-professional meeting planners in international markets. Now, the localization of our sourcing product for international planners is the first phase of a longer-term initiative to implement a simpler and more consumer-oriented user interface for our meeting planner community. A new and refreshed user experience will help cement our market position with our current mostly professional meeting center audience, and it will also enable our product to be more suitable for consumer and non-business oriented events. As you can see, there are multiple growth drivers that we're excited about across our event cloud and hospitality cloud. Now with that, I'm going to hand it over to Billy, our CFO.