Cvent Holding Corp.

Hello, everyone. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cvent third quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number one on your touchtone phone. If you'd like to withdraw your question, Again, press the star on your telephone keypad. If you would like to withdraw your question, again, press the star one on your telephone keypad. Thank you. April C., Investor Relations. You may begin your conference.

Good evening, and thank you for joining us on today's conference call to discuss the financial results for Cvent's third quarter 2022. 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 the third quarter of 2022 and discuss our guidance for the fourth quarter and full year of 2022. In addition, our earnings press release, SEC filings, and a 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 fourth quarter and full year 2022, our market opportunity, market position, product strategy, and growth opportunities. Forward-looking statements involve known and unknown risks, estimates, and uncertainties that may cause our actual results, performance, or achievements to be material 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, and the company assumes no obligation to update these statements, whether as a result of new information, future events, or otherwise. 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 in the sections titled Cautionary Note Regarding Forward-Looking Statements and Risk Factors in our quarterly report on Form 10-Q for the quarter ended September 30, 2022, filed with the SEC today and in our most recently filed annual report on Form 10-K, along with other filings the company makes with the SEC from time to time. Additional information is available in the cautionary language included in our earnings press release issued earlier today. In addition, during today's call, we will discuss non-GAAP financial measures which are not prepared in accordance with generally accepted accounting principles. Reconciliation to the most directly comparable GAAP measure of the non-GAAP financial measures discussed on this call including adjusted EBITDA and adjusted free cash flow are included in our earnings release issued today along with definitions for those terms. The release is filed with the SEC and available on our industrial relations website. And now I'd like to turn the call over to Reggie.

Thanks, April. Thanks, everyone, for joining today's call. I'm excited to share our Q3 2022 results. Our revenue for the quarter was $161.3 million, which was $2.3 million above the high end of our guidance. representing 20% revenue growth year over year. Additionally, our cost containment measures enabled us to exceed the high end of our adjusted EBITDA guidance by 5.1 million and adjusted EBITDA margin guidance by 290 basis points. These results demonstrate our commitment to delivering balanced top line growth and margin expansion, even in an uncertain macro environment. We're excited about our solid QT performance and our prospects for the remainder of 2022. As a result, we are raising both our revenue and EBITDA guidance for the full year. Now, while we're not immune from macroeconomic pressures, we're confident that our established market leadership and recession resilient platform positions us to outperform competitors and successfully navigate this unique macro environment. For those of you who are new to our story, here's a brief overview. Cvent is a SaaS platform that is comprised of our event and hospitality cloud solutions. Organizations use our Event Cloud products to plan, market, and organize engaging events of all sizes across their total event program, which includes all events and organizations host or attends. And our Hospitality Cloud offers a marketplace that enables meeting organizers to find and book event space at hotel and unique venues. In addition, hotels and venues use our software to promote, manage, and automate their meetings and events businesses. Fundamentally, our platform helps customers grow their top-line revenue, drive engagement, and deliver leads while reducing OPEX and facilitating greater compliance. Before I dive more deeply into our Q3 2022 performance by cloud, I'd like to discuss some marketing trends that we're seeing. First, the return of in-person events, which are the bedrock of the event industry. Nothing beats face-to-face human connection and interaction, which is why we continue to see in-person events return so quickly. In fact, just a couple weeks ago, I attended IMEX America, one of the largest trade shows in the U.S. for the global meetings and incentive travel industry. The event attracted 12,000 in-person attendees, just shy of their 2019 attendance. The return to in-person is also reflected in our sourcing data from the Cvent Supplier Network, which is our global marketplace where planners can source and find meeting space at more than 290,000 hotels, destinations, and special event venues. Our data shows that our RFP volume has increased since the beginning of the year, and through Q3, sourcing volume in North America averaged about 95% of 2019 levels, which were $18 billion for the full year. Second, marketers are continuing to invest heavily in events, which are often their biggest area of programmatic spend. However, in an uncertain market environment, they will look to maximize reach and ROI, and for that, they need event technology. Our platform digitizes events, enabling CMOs to capture more data and attendee insights to accelerate and optimize their sales and marketing efforts, making events more valuable as a marketing tactic than ever before. Third, the triple threat, which is the powerful combination of all three event formats, in person, virtual, and hybrid, is coming to life. For example, in Q3 of 2022, the events hosted in our CBEN attendee hub were about 46% in-person, 30% virtual, and 23% hybrid. To put that in context, pre-pandemic, more than 95% of our revenue was for in-person only. So we're truly experiencing a meaningful change in the way people meet, and we believe this is a trend that's here to stay. With our platform approach, we've embraced this new dynamic, which is why we believe Cvent is uniquely positioned to support this new event environment. The final topic I'd like to discuss is how Cvent is positioning itself during the time of economic uncertainty and why we believe Cvent is well positioned to weather an economic downturn. In a recessionary environment, we believe events as an increasingly critical component of the customer journey will remain prominent And our platform can help organization run events more efficiently on budget and increase their ROE, which is the return on event, all with fewer resources. The total cost of an event can vary up to 90% depending on what format they choose. And our platform's flexibility ensures organizations will be able to continue to host their events in whatever format they like. Due to how well positioned we are for varying economic conditions, We believe Sievent will continue to attract a disproportionate share of event tech spend going forward. So even though our business is not recession proof, we believe we're recession resilient. Now I'll dive more deeply into the performance of our two clouds. First, I'll discuss the event cloud and how some of these market trends are working in our favor. Let's start with return to in-person. In-person events are where Sievent has been a leader for more than 23 years. The interest in our onsite solutions is a great proof point for the return of in-person events. Let me give you an example. To prepare for more in-person events in 2023, a top cloud computing company and one of the fastest growing SaaS companies in history grew their total contract value in Q3 from 5,000 to nearly 1 million. This organization bought more of our in-person solutions as they look to digitize their in-person events to maximize ROI, something we're seeing repeatedly across many of our customers. The second trend I'll discuss is the triple threat coming to life. Today, the need to deliver a total event program with a mix of all three event formats is a given for most organizations because of the blend of event formats offers more ways to connect and interact with your customers and your prospects. Cvent offers an all-in-one platform to support the triple threat, which appeals to organizations that are looking to execute these more complex event programs. This new events landscape is also helping further elevate events in our organization's go-to-market strategy. In our prospect and client conversations, we're seeing more and more engagement from the marketing division, from marketing operations up to the CMO level. In addition, we landed new logos and deal expansions in the following industries, business services, financial services, manufacturing, technology, nonprofits, and third parties who leverage us on behalf of their clients' events. For example, in Q3, we closed a $300,000 TCV deal with a global nonprofit that helps build more inclusive workplaces for women. Their initial event went so well that they've doubled their ACV with us since July and now work with Cvent to support their entire total event program. Our ability to meet the needs of specific verticals is helping to drive incremental growth. The third and final driver of our event cloud growth is our platform offering, which becomes even more compelling in uncertain economic environments. Our integrated platform supports all event formats, which means organizations have the flexibility to run event programs with a mix of formats and event types, which optimizes their budgets. That elasticity is extremely powerful when CMOs want to host events while CFOs want to control spend. Let me give you an example of our platform, which supports an organization's total event program. It's helping us land new logos and expand deal sizes. A multibillion-dollar international software company left Cvent for a competitor a couple years ago, but they reengaged with us and signed a $400,000 TCV deal because our platform was more flexible and better equipped to support all their event types and needs. This example illustrates that despite a potential recession, organizations continue to spend in areas that will help drive revenue during a downturn, and events whether in-person, virtual, or hybrid, are on top of that list. And event technology like SEVA enables them to deliver those events with greater efficiency to maximize ROI with increasing headcount. Let's pivot now to the hospitality cloud. In Q3, there were three key things that helped drive our growth. First is, once again, the return to in-person events, which are the lifeblood of the hospitality cloud. This momentum is driving demand for technology as hoteliers and venues look to better attract book and manage this in-person business. For example, a convention and visitor bureau expanded their Cvent contract by $235,000 in Q3 to help them prepare for the influx of group visitors to their destinations. On Monday, the client confirmed yet another increase in spend for Q4 as group interest in their city continues to grow. Second, as hotels face staffing shortages, teams know they need to work smarter and more efficiently. Cvent technology can fill in these gaps and help hoteliers automate and reduce manual processes from sourcing and prioritizing leads to managing room blocks and diagramming meeting space to getting smarter as they seek to win more group business. For example, one of the largest hotel management companies in the U.S. increased their spend by $360,000 in Q3 to leverage our full suite of business intelligence solutions to drive efficiency across their platform. and, excuse me, across their portfolio and increase market share at the property level. And hotels don't just want to drive efficiency on the hotel side. They also want to streamline collaboration with their target audience, the event planner, which helped drive strong interest in both our diagramming and group room block software. Third, as hotels finalized their 2023 budgets, there's still a growing expectation at the ownership level for properties to exceed their 2022 performance in 2023. This is no easy task given the very strong 2022 many hotels had with the surge in leisure and business travel. In order to meet these expectations, hoteliers recognize that they need to focus even more on attracting meetings and events, businesses to their properties to drive revenue and fill shoulder seasons or need periods. In addition, events and group business is often the largest segment of their top line revenue for the larger hotels. It's also frequently the most profitable segment. But most importantly, because it's a contractual commitment, unlike leisure and business transient, that can be canceled up to 24 hours before the booking, it provides both long-term visibility and operational stability. All of this is driving increased interest in Siemens technology, especially our marketing and sales solutions. In summary, our Q3 results were driven by a strong competitive position and industry trends that work in our favor. We are well prepared to address our customers' evolving needs, and our platform flexibility means organizations can continue to engage their customers, which is especially critical in an uncertain environment while staying on budget. So while we're not immune from the current macroeconomic environment, our platform approach enables Sievent to power the event's landscape regardless of an organization's budget or how they choose to meet. In short, we feel good about our market position, and we plan to continue to invest in our platform, make smart business decisions, and build on our decades of experience to further elevate our competitive position and take our disproportionate share of our $30 billion TAM. Now, I'll turn it over to our CFO, Billy. Thanks, Reggie, and good afternoon, everyone.