Duck Creek Technologies, Inc.

Q1 2022 Earnings Conference Call

1/6/2022

spk_0: they get painting by a walker to the debt creek technology for quarter for good twenty twenty two on the carpet call added them all but a smuggler with molly mode i couldn't be allocated to be a question and answer session that the quarter that time with a third and one when you that don't qualify as a lot of recall the fall is being recorded our lives in the cop to the hokies the brand new from as the ah good afternoon and welcome but that creaks or news conference call for the first quarter of fiscal year two twenty twenty two which ended on november thirtieth
spk_1: on a call for today it might cost cascade that prick chief executive officer and village very the creek chief financial officer a complete disclosure of our results from he added our press with issue today it is available investorrelations section of our website driscoll as being recorded and a replay will be available for the inclusion of the club symmetry in this call may include for putting same as your got our financial results products posture when a man operations the impact of coven i've seen on our business and other matters these statements are subject to risks uncertainties in assumptions and are better management with expectations as of today and may not be updating the future therefore these them should not be relied upon of representing our views of any such when date he should not rely line for making statements as production the future events as actual results and events may differ from any for making examines imagine make to that additional information regarding the risks uncertainties other factors because such differences appear in our press release and duck craig's list form ten k and other such good reports fall by the creek with a security as a chance commission we will often referred us are non gaap financial measures were right additional information to investors a reconciliation non gap to get matters is provided in are priceless with the primary different as being stock based compensation expenses amortization of intangibles change and fair value of content and are no liability and early attack the facts of these adjustments without limits on the call over the mike
spk_2: thank you brian a good afternoon everyone let me start by wishing all of you and your family's a happy new year we're off to a great start to the year and i'm pleased to report the duckweed delivered on strong first quarter performance the reflects our continued success as a cloud platform of choice for the pnc insurance industry we're pleased with our ability to add new logos and drive greater adoption from our install base upon demand customers which now exceeds seventy five ensures let me start with a quick overview of our financial results for the first quarter we reported total revenue of seventy three point four million dollars of twenty five percent year over year and this was underpinned by our subscription revenue which is our revenue derive from sense of thirty five point seven million dollars up twenty eight percent year over year our annual recurring revenue or a or are was the one hundred and forty five point five million dollars which resulted in forty percent growth over the prior year and we are also profitable in the quarter with adjusted iba a seven point eight million dollars during the quarter we sign more than ten sas deals across new customers and with existing customers who either expanded their usage of duck regard the man were adopted new sas solutions from us this is a healthy mix of activity that reflects our powerful land and expand selling model and the continued investment we are making in our sas solutions our success in the quarter is just the latest indication that insurers are embracing the superior scale ability flexibility and time to value that a true cloud platform like decree god demand can provide to their businesses insurers are operating in markets and are evolving rapidly and are more dynamic than ever before they need core systems that enable them to innovate more quickly and enhancer overall customer experience so that they can thrive in these market conditions we are continuing to demonstrate success with ensures of all sizes who have chosen duck reagan to man which highlights of value and competitive advantage of we provide to our customers in the first quarter we signed an exciting new decree gone demand deal with secure a leading north american pnc ensure with operations and thirteen states secure will be deploying or duck creek palsy rating billing planes and insight on demand solutions as well as several of our anywhere manage integrations to power the next generation of it's specialty lines business
spk_1: we are selected after a lengthy and rigorous technical valuation were secure of value waited several competing platforms secure ultimately selected the creek for several reasons the first was a strength of the decree platform and most notably are low code configuration and open a p i architecture secure
spk_2: recognize that our platform with best position to increase their time to value in streamlined their overall operations the second was the ability of security team to leverage our platform to access or ensure tech partner ecosystem which now includes sixty five partners to improve how secure of configures it's products and expands into new markets finally as or see i owe noted secure of you dare creek is a true partner not just the vendor this is exactly the type of relationship we strive to build with each of our customers and we're excited to be partnering with secure and their digital transformation we also made significant progress on our efforts to build out or international presence which includes multiple new customer wins in expanding our ecosystem while still very early the success we had in the first quarter is an important validation of the opportunity outside of the united states in the quarter we sang to deals with international customers first eddie owner the uk based startup ensure tech provider there will be launching a unique motor insurance offering and twenty twenty two recently signed an agreement with us to deploy their new innovative usage based product on daiquiri gone demand policy billing and claims eddie own and needed a true cloud partner that it could count on the scale with it's growth ambitions and help deliver on their mission to provide a compelling in the in digital experience for their customers we believe this is a great example of how decree can play an important role in powering the tremendous innovation we're seeing across insurance ecosystem we also signed an important when in australia with argyle insurance the newly established innovative small commercial care who is focused on redefining how insurance a simplified in streamlined for small medium enterprises overall we have been pleased with the early success that we are having in the australian market which is why we recently announced a number of product investments for australia including localize workers' compensation packages and a claims benefit calculator for new south wales australia's largest state haryana in argyle are positive early examples of the progress we're making internationally even as we continue to deal with the impact of the pandemic we are incredibly excited about the long term opportunity outside the united states and wins like these are important for establishing the duck creek brand and reference of all customers and local markets as i mentioned on our last earnings call we'll continue to invest in our international capabilities and fiscal twenty twenty two with a particular focus on large global carriers an important part of building out our international presence or partnerships that expand the value we can deliver to that end we're pleased to announce multiple partnership that enhance our capabilities in specific markets for example we recently signed an agreement with experience that will directly integrate their i cast dataset into duck regard the man to better serve the uk insurance market this will provide provide insurance with prebuilt consumer data integrations the dating used to improve their opera racial efficiency and user experience we also recently signed a collaborative agreement with the day or an organization in charge of offering value added i t services to insurers and vanessa the association for insurance companies operating in the spanish market this agreement will facilitate the integration of death creek solutions into the spanish market and allow spanish ensures to design test and deploy new products faster than ever before the alliances with experience into there are great examples of the type of local relationships we are looking to build as we continue to develop our international go to market efforts in addition to these new wins we also expanded our engagement with several existing customers including course specialty builders mutual distinguish partners and great american insurance among others and now to focus on customer success we had several notable product deployments in the quarter as well including distinguish partners where they are able to go live with their commercial property program and fourteen states in approximately one hundred and fifty days from the inception of the project great american insurance a highly respected tier one ensure known for their innovative in specially commercial products deployed there package palsy and duck reagan to man in all fifty states and finally axis insurance who brought a new insurance offering the market for home base businesses comprised of forty coverage allies professional liability cyber crime and contents and they deployed the solution to the brokers and under five months we also continue to invest in enhance our leading sas solutions on an ongoing basis and at helping our customers continue to be more agile efficient and make smarter decisions through data intelligence here are just a few highlights of our product updates as past quarter we enhance our policy and billing user experience platform to incorporate to new capabilities first mobile need a presentation this provides a more consistent experience for end users across various form factors allow insurers the reuse to create an customize page designs across multiple channels and devices we added data visualization which presents data in new information on visual ways allowing a user's attention to be drawn to important key areas of a pager screen duck reclaims we launched a series of update that will help improve overall systems integration operations and speed deployments some examples include first international enhancements a series of indepth enhancements that improves configuration to support multiple geography is on a single platform that is managing tax and the eighty time zone and localize embedded logic second or claims migration service a product i solution that enables carries the quickly and efficiently migrate data from multiple legacy an existing systems into our daiquiri gone to man environment which dramatically reduces conversion time frames and improved a the quality and third are enhanced open a the eyes we had over two hundred new wrestle atheist or clean solution which expands the openness of our platform or new the eyes can also provide programatic ways to integrate both development and operations architecture with the carriers customize their buffs processes finally we also launched a creek our demands consumer access offering which extends decrease core functionality to the consumer channel providing tools and a secure infrastructure that allows cares to expose applications the policy holders an anonymous shoppers without the need to deploy redundant solutions or infrastructure as we look ahead to the remainder of the year we're focused on executing on the incredible opportunity in front of us we continue to see significant growth and our pipeline with both new and existing customers across all tiers as we mentioned last quarter we are particularly focused on some important here one accounts we have seen some great success and recent quarters we are very encouraged by the strategic conversations we are having with these carriers and the progress they are making in developing long term digital transformation roadmaps before i turn the call over the any i just want to reiterate that we're pleased with the start to the fiscal twenty twenty two and we are incredibly optimistic about the future for decorated person ranchers and decree god man continues to grow as ensures fully appreciate how we can improve their operational performance across multiple dimensions while providing significant
spk_3: financial benefits
spk_2: where in the early stages of the pnc insurance industry moving to the cloud and duck reek is in a terrific position to be a primary beneficiary as insurers continue to look first to the cloud for solutions that they embark upon their technology strategies i'd like to finish by thanking all of our employees partners and our customers for the incredible work they do each and every day to modernize insurance industry and position dupree to fully capitalize on this incredible opportunity with that let me turn the call over to any to walk you through the numbers denny over to you ah thanks mike today are review our first quarter fiscal twenty twenty two results in detail and provide guidance for the second quarter and full year of fiscal twenty twenty two total revenue and first quarter with seventy three point four million dollars up twenty five percent from the prior year period within total revenue subscription revenue which is comprised solely of subscription source that products for thirty five point seven nine dollars up twenty percent year over year in he one subscriptions represented eighty one percent of our software revenue and forty nine percent of our total revenue revenue from on premise software licenses a one point nine million and maintenance of six point three million or eleven percent of total revenue we expect the line and him to continue decreasing as a percentage of revenue given the strong growth and are subscription revenue services revenue was twenty nine point five million dollars of twenty six percent year over year driven by continued high demand for implementation services and strong utilization rate sas l r which we calculate by analyzing recurring script subscription revenue recognized in the last month of the period was one hundred and forty five point five million dollars as of november thirtieth twenty twenty one up forty percent from the prior year
spk_4: as a reminder that errors a snapshot in time of skipping contract that are generating revenue during the last month of a period and can be impacted by time thousand dollar intentioned as of november thirtieth twenty twenty one was approximately one hundred and twenty two percent this is another strong result which reflects our continued success up selling and cross on our customer base as a reminder er net retention is driven by a combination of high growth retention rate cells of new product to existing cause
spk_2: as tumors and growth of the dwp for products already operating on our sas platform we continue to believe that a fast dollar net retention rate in the one hundred and ten to one hundred and twenty percent range is a good long term target for our business
spk_4: not you need income statement a more detail these metrics or non gap unless otherwise noted and we provided a reconciliation of gap to non doubt financials in our earnings press release first on gap bases are gross profit for the quarter with forty two point five million and we had income from operations a one point nine million dollars we had net income in the quarter of six hundred and ninety two thousand or one cents per share based on weighted average basic shares outstanding of one hundred and thirty four point two million
spk_2: turning to a non gaap results gross margin the quarter was forty four point one million or sixty point one percent compared to sixty one point six percent in the first quarter of fiscal twenty twenty one subscription margin in the quarter was sixty three point three percent as we've noted each quarter there can be quarterly variation do
spk_4: the timing of when revenue recognition begins for certain contracts and the timing of expenses at various stages of new deployments as indicated previously we were benefiting from favorable timing and fiscal twenty twenty one and expected gross margins to move back into the mid sixties and fiscal twenty twenty two while we have experienced inc reposting costs in support of significant growth of written premium running on our platform we do expect the remaining quarters of fiscal twenty twenty two to show improvement in subscription gross margins
spk_2: professional service margin of forty eight percent in a quarter with notably strong and well above our target range driven by robust demand and hi utilization rates are services margin and que one was higher than we wanted and we're committed to bringing them down throughout fiscal twenty twenty two two more sustainable levels are both to bring down several
spk_4: points through the fiscal year and longer term into the high thirties seasonally to to has been historically below que one in both revenue and gross margin terms and we expect that trend to continue this fiscal year turning the operating expenses aren't the costs to twelve point seven million dollars were seventeen percent of revenue down here over years a percentage of revenue or the expense growth of fourteen percent compared to queue want to fiscal twenty twenty one with a dip below targeted levels based on the timing of new hires we currently expect and these spend as a percent of revenue to increased slightly through the remainder the fiscal year but still remains slightly lower than fiscal twenty twenty one for the full fiscal year we continue to balance the scale benefits of our our and the organization with increasing investments in our products and fast platform sales and marketing expenses were ten point seven million dollars or fifteen percent of revenue consistent with the prior year as a percent of revenue expense growth from the prior year reflects continued expansion of our go to market resourcing and both us and international markets while travel relating costs continue to run below normal levels do recovered nineteen impacts jeannie expense was thirteen point seven million dollars were nineteen percent of revenue down from twenty two percent of revenue and the prior year period as noted previously gene a as our most lever double cost area and is declining as a percent of revenue in line with our expectations
spk_2: adjusted ebitda for the first quarter with seven point eight million dollars which was ahead of our guidance due to the better than expected revenue and lower expenses i just referenced adjusted ebitda margin with eleven percent for the quarter up from six percent in the prior year period this represents or twelve consecutive quarter of adjusted ebitda profitability which we believe is an important indication of our ability to generate high levels of subscription revenue growth on a profitable basis
spk_4: non gaap net income per share for the quarter with four sense based on approximately one hundred and thirty five point seven million fully included weighted average shares outstanding i turned to the balance sheet and cashflow we ended the quarter with three hundred and forty eight million dollars in cash cash equivalents and short term investments and we remain debt free free cash flow with negative twenty five point five million and a quarter compared to negative twenty two point nine million in the prior year period
spk_2: as a reminder the first quarter is typically our low point for cash flow in the year due to the timing of working capital
spk_4: and now like the finish with diamonds beginning with the second fiscal quarter we expect total revenue of seventy one point five to seventy three point five million dollars subscription revenue of thirty seven million to thirty eight million adjusted gross margins are projected up fifty seven to fifty eight percent we expect adjusted ebitda of one point five to two point five million and not yeah net income is expected to ranged from five hundred thousand to one point five million or zero to one cent per fully diluted share for for year fiscal twenty twenty two we are increasing our guidance to total revenue of two hundred ninety eight to three hundred and four million
spk_2: the revenue of one hundred and fifty two point five to one hundred and fifty five point five million
spk_4: adjusted gross margins are projected a fifty eight to fifty nine percent we expect adjusted even thought of nineteen million to twenty one million and are non gaap net income is expected to range from eleven million to thirty million or eight to ten cents per fully diluted share
spk_2: to wrap up we got off to a strong start the first quarter we're seeing strong demand activity from new prospects and existing customers who are embracing the opportunity for better business performance from running their business on doc recon demand we remain confident nor abilities continue generating strong levels of growth and increasing profitability
spk_4: in the years to come and without we like to open up the call to and an operator
spk_0: again later gallic like that the question or five and one on the phone call and yet at the and good fraud and one apart wrestled the key earlier barclays a lot of open
spk_5: okay great hey mike a very happy new year and thanks for taking my questions here
spk_6: oh happy new year
spk_5: hey hey mike you don't maybe just starting with with you have getting touched on if a little bit in the prepared remarks but middle you just got one level deeper can you to city qualitatively qualitatively talk about your the number of opportunities you're saying and maybe how win rates have have trended through the quarter you know i think last quarter's result maybe grossman that your questions on you know whether other competitors were were getting more competitive with with a in in in south opportunities headteacher to think about those things with another quarter under your belt here
spk_2: yeah thanks second i'm i would say that we have a healthy number of opportunities in the pipeline fact our pipeline continues to strengthen quarter over quarter so we're pleased to see that and in terms or win rates you know we're not going to talk specifically about win rates but i'll say that you know going through the past two quarters we don't see the am has changed in any material manner so ah yeah i think we're set up very well as we start the fiscal year they stayed in the prepared remarks and the in terms of are competitive positioning i think we're really pleased with where where at in in fact we've had several exciting wins your last quarter and this quarter that we know that those opportunities were very very well vetted against a competition
spk_7: and we got feedback
spk_2: really positive feedback on our platform really are superior local platform and are difference here with ourselves solution and i think our when it's security is one great example of that you know they did a very intensive evaluation process and looked at many vendors a lot across the landscape and done your we're really pleased the outcome as i said in the the opening remarks
spk_5: got it got the makes a ton of sense video maybe from i follow up for for you an app yeah i was wearing if you to talk a little bit about this the piece of implementations a you know clearly the pipeline hear sounds good it in the coming quarters but yet he spoke about the seasonality of revenue and gross margin hear you you to i know we don't talk about about a are are specifically but our it it is there anything that you could give us this in terms of how to think it out there are sort of trending and que to or kind of through the rest of the are qualitatively of course
spk_2: yes or a second i'm so ah the thing it's a is in in fiscal twenty one we kind of had that you know an unusual trend in air or growth where the second quarter was our largest sequential growth quarter and and the third was our lowest i'm then i think last year was the aberration if you if you look back
spk_4: back to save our fiscal twenty you know the second quarter was our lawless sequential error growth quarter of the year and that more typical and in that more typical really tied to seasonality on to one arm is not a you know is generally not are strong as bookings quarter on even though cute who is generally your strong booking
spk_2: order and we expected to be again this year are most of that doesn't make it into our during the quarter so i think just qualitatively you could expect to see of return to more normalize trends were were cute you won't be you know our strongest ah our growth quarter i'm sequentially ah and i think you'll will seem more like up the of the trend of two years ago where cute to the bit lower and que three's a bit higher
spk_4: got it but that can prove helpful the fact that guy come off a we expect to be be all really strong que to bookings quarter which would translate into my are grew up in the second half the year
spk_2: yep absolutely very helpful guide thanks very much
spk_0: thanks
spk_8: oh yeah next special come from the lottery away away a lot of page answer me happy new year and rats solid quarter there i just mike i to touch on cyber security here a little bit you know what we topic carriers is this kind of focus on fiber ah sort of you know that that the try to figure out how to do it at a price that you think some of them kind of emerging play like his native had the privilege fiber cuban and others coming out that how are you guys think that market evolve it and how do you think whether marketed gems of partnering acquiring i'd love to get some center that especially as we five
spk_2: or and ransom whenever the becomes more critical yeah thanks up yvonne i'm yeah well obviously you're asking the question is cyber is one of the faster growing product lines in the industry for good reason you know there's a lot of years and need to provide protection what we do see out there though is how carriers go after cyber and how they price it varies greatly in the industry you know sung or bringing solutions that look at that apology or or look at the inside of a carry or that their customer and what's gonna happen others just look at the overall landscape so they're bringing a variety and of and of a vast variety of technology to go evaluate cyber palm so on our strategy to date his first i'm a lot of cyber that you do see as an ad on coverage not a standalone product a we do support the iso add on coverages right other the box i think that helps so we can attach cyber to other products and then secondly in terms of technology your we've really been a partnering with leading ensure that some of them feel that you've mentioned to make sure that we can integrate out of the bottom bring some of the solutions to bear because we know there isn't a one size fits all for carriers and we want to make sure that we're very well positioned to adapt to the way the they're going to view cyber palm and you know that's been our approach to date
spk_8: ya what we're always actively looking for new a companies to go acquire or yell kind of partner with and we're going to continue to do that to do were make sure we perform well with cyber chance gotcha gotcha and and the mormon what sort of more near term one amp up the both of you guys you know that there's always is labor shortage and it's it in every industry but i wonder if you think about implementations which despite the low code and ram and you have still requires people to this process change everything else and between a shortage at say your partner's eccentric whomever and then attach a shortage of your customers in terms of headcount and a potentially even your services group which is running ultra hot right now on as you can see the average margin but and then you have to higher sales people and you have to hire need to do innovation is there any sort of risk of you guys
spk_2: see this playing out or lower implementations are you not be able to hire enough sales headcount or rd had time for example like what you did in new south wales like half we think about what this labour environment means for you and then for your customers and implementation galapagos that of how you would think about this gdp i'm as kind of leader of the from yeah and obviously with the great resignation and a lot of the young going to say higher attrition the yellow onion say broadly in the industry across the technology industry everyone's paying attention to it and i will say that i'm i'm pleased with were duck creek is that you know we've invested quite high heavily in a our employee engagement in our culture many dimensions and i think we've handled add a pandemic very well and that resulted in us having you know more favorable retention rates i think others are seeing in in technique as technology companies i think that helping but your point it's still watch item for us you know is vinny and i have spoke about even on prior earnings calls you keeping up with hiring and are getting people on board it is something i think we're doing well we're growing in our head count of quite a bit but we you know are falling a little bit short of some of those expectations now it's nothing at an alarming levels and we're working well with our partners but i would say it it's a it's a watch item for us and right now we're not seeing a material impact on it you know you can have an impact on any given project as you try to shift some resources around for work with different partners but i think the way our really addressing it is continuing to work with the are leading city
spk_8: comes integrators that are out there you know we've added a new one with hex aware of this quarter we're now up to twenty and i think we have an enormous amount of capacity through that ecosystem and that helping us quite a bit as well
spk_0: at super helpful likely my question gets really appreciate yeah a color
spk_9: becky yeah let's special income for received the lorry of rb feel honored open
spk_5: a guy thanks so much or for take my questions i like the did you see you know some some upset sudden numbers mit media wanted a drill a into that first i appreciate all but commentary on on what you're seeing with your with your customers other be run the that the tate back up reminds ah you've you've you've gotta give our gun
spk_2: clearly came out ahead of it what would you you know maybe i attribute the upset in a quarter and and and the the better outlook to was it you know better execution was it a better you know in improving environment anything else you could pinpoint on their behalf on and i'm all up will receive start with that and an uncle vinnie wants to add you know how to say that i think at this quarter has lined up with our expectations of what we stated coming out of the quarter your we continue to see some great activity with tier ones and in many opportunities you the pipeline
spk_10: we closed you know some nice deals in the quarters we talked about and the i think it sets us up very well for the year
spk_4: we now have you want am yeah not the one thing i do one thing i'd point out is like i think
spk_2: you know where we had indicated we becoming out and subscriptions we beat by a little bit we are where you would feel good about the cells pipeline and where we stand but but actually him into one that the yeah the larger our revenue our performances in the services where demand is really been fairly off the charts are utilization rate are running
spk_9: really i ah so i yeah i do think on the service the now back off a little bit a bit and que to on beyond a from marjah perspective probably noticeably but we're just the where where we're pleased with that with the momentum kind of across the board new one got it that that's helpful or another thing for you if every think about the sas gross margin line in odyssey there are some many one time as benefits and and and and the in a queue one they're cute three our last year and to partially me thinking about that that line going forward to your madison some the puts some takes of away
spk_2: why it's dropped and then maybe the glide path to get for that long for model you laid out at an ip our you know seventy two to seventy two percent faster mind and yeah sure what looked at as you point out we we knew were benefiting from from timing of what to help ah how product with was gone onto the platform last year and
spk_11: we weren't sustainable in the high sixties where we're performing
spk_2: we get now we come back into the mid sixties i and and we did and you know that dynamic is fueled you know partly by headcount but also by infrastructure costs in the infrastructure costs are hosting on on the azure platform
spk_4: and that the hosting costs are came in actually just a little bit higher than we expected as we're putting a lot of dwp on the system so we do thankyou one kind of odd it will be the annual bottom of margin for for the subscription line am i think that you know the kind of climb back out
spk_2: is gonna be gradual ah so i think would see small increments to progress through the balance of this fiscal year the full fiscal year should still come in the mid sixties on and then i think you'll see you know over the next few years a progression up into the low seventies and we we are we don't think the long term target has changed in terms of what the
spk_9: a number is where when she bubble it's probably into law seventy that over the course the next few years
spk_0: my wonderful thank you so much as
spk_8: church
spk_12: i like question council alec they can of what prefecture line a couple a guy thanks to a good question like maybe just the for some for you you know haven't got a last quarter we talked about ah
spk_2: sales cycles being a little longer because the the kinds of value that than the kind the deals the your negotiated with customers now our ah for even greater amounts of of of value i wanted to ask given the really strong and retention rate you guys put up this quarter just give us a sense for it that selling environment those selling cycles particularly as were kind of knowledge twenty two are not yet another year removed hopefully from from you know what would definitely who likely extended feels like a lovely for for many firms doing complex of if a lot to get yourself for our kind of where we are at this point yeah thanks alex yeah i would say when they were for will you referred back to last quarter's comments in the sale cycles you know we made a comment on some of the tier one activity and some of that stretch it out but yeah i just want to say that we continue to see great activity with our tier one prospects and existing customers i'm in obviously you know we always want to sign up a new tier one and then also selling back into our customer base is obviously you know yielding your favorable net dollar retention numbers for us but we're excited about the strategic conversations that we're having with these carriers in their long term moved to the cloud you know they're the really looking at it maybe by a line of business are a product line basis
spk_12: but the i you know any time we can establish a new relationship with a tier one that's that's really a strong for us and ah yes some of these opportunities are taking shape and you know we do expect some to were occur in the second half of the year as i think that's good and i think it's a unfolding as we indicated last quarter and we're pleased with the the results are we have right now
spk_2: perfect and then vinnie i want it
spk_8: good go back to that the first question at it and he gives a great color or around the shape of have met new era are in terms of how we should think about the modeling for the next two quarters or wanted to ask if you think about the
spk_10: the liddy area of these of of the bookings both from last quarter a and and maybe even what you talk to for next quarter or as a percentage of the full year should we think about the seasonality in a kind of one to be closer to kick out of the last two years and not low twenties or percentage or were
spk_2: he is there something given the liddy aridi with with what might just described run those sale cycles and second half concentration is is there something that elsa we should try to keep in mind as we think our models for the year
spk_4: well i think annum i want to states via site specific percentages at the though is hard to do
spk_2: i think you know our expectation is that this year from a bookings prospective first not from up not from when it makes day or our perspective but from a booking perspectives perspective i think we're going to return to our historical norm i'm on a percentage basis cute to and queue for being noticeably ironing he wanted que three
spk_13: ah i'm and typically i would not be a typical for que one to be or lowest percent of the year or in terms of present of bookings i and that is likely to hold up again this year ah my guess what the exact number is that i don't want to disclose right now but are we do they can probably on the young are more on the normal has to
spk_0: oracle side arm so i think you know in terms of the first half second half plan again i think that hasn't buried all that much year to year or other than individual deals and and we think that's probably pacing towards the normal kind of outlook also
spk_14: okay perfect take a guess
spk_8: yeah at your next session captain jack that adder eighty morning a lot of though great thanks
spk_4: i say getting just a follow up on that there was a lot of discussion in the first quarter about that you're being a little bit more conservative i got than in the outlook for the tier one activity what is our new level love wow of confidence here in terms of that year when activity
spk_8: you know close and in that second half the year yeah he jackson am i think i'll dig our view on you know really bookings trends nor tier one activity levels at has changed from or we've indicated coming out of last quarter i'm i think we still taking a relatively conservative view on a couple of specific to your when opportunities that are kind of framework kind of the old ah i'm were not young we do think those come later and year and don't have a huge revenue contribution to the here but that we're still positioned really well on those accounts so i think the you know from l ron perspective i think i'm young when we think that situation is consistent with what we laid out that que por
spk_2: okay okay cool and then make it about follow up on the international deal that you mentioned i think you know it by characterizing them correctly they were more start ups in nature right like a brand new type bug and church tech companies am curious are are you beginning to veto position yourself to maybe when deals with existing insurance carriers that have significant amount soggy dwp or should we still think about the international expansion been mostly start out the new launcher and that sort of business model no i i would say that the jackson we are positioning ourselves as usual to to sell to carriers of all sizes and all tiers even in an international markets
spk_13: you know these were to opportunities were on their new formed companies that had an innovation an innovative value proposition and dumb but we're also in some very advanced discussions with other carriers in some those markets are actually quite large
spk_0: i think you know that the strategy has and change which is you know to pursue opportunities tears one through four hours and then even within existing carriers sometimes will target a new startup book of business
spk_15: in in maybe at health care get something to market i'm at the same time your we can focus on replacing a book so i think some of that is just the timing the deal the came through but i hope they get any shift in our philosophy of how we're selling into carriers
spk_2: right okay great thank you
spk_16: take your next question have some bradfield a bank of america the land of them
spk_15: yeah thought michael thank god for brad are pretty taking the question
spk_4: so couple of by couple of biker difficult go back here feared guidance for the four year and the increase looks like about one hundred percent of that change the mid point is simply the of the one few beat ah and actually imply ah i'm a deceleration the rate of absolute ah revenue growth quarter of a quarter
spk_17: wow the year
spk_15: it is epic conservative them or did that go back to your comment about expectation for service revenue dot trailing off gather up the year
spk_2: yeah i think the bulk of it is is tied to the service services revenue assumption ah i'm although you know again what we're not getting more aggressive on our assumptions on know on subscription revenue so i i think our approach was you know we were happy with the que on over performance and i and where he you know we're gonna see how we pace going to queue to connecticut him gotta thank you and a the international the opportunity there thought what we've seen over in europe specifically the robot flower farm it out to adopt technology fast and general but when they do that generally ray up at a similar pay few the out to the us off at at a whole is that your expectations dc opportunity for greater growth rate or adoption out of the non u f market as the they ramp up on you know the technology michael i would say that we have an opportunity for greater adoption over their relative to our current install base is because the size of our business over there smaller i don't know if it's gonna be because they're gonna adopt faster or behave differently than what we see in north america your we do see european companies being more conservative when it comes to cloud and sas today yo their carriers asking us more often
spk_18: i'm the old if we would sell and on premise solution which we won't
spk_0: so yeah that's not available for us as a winning proposition over there are now we are seeing that trend turn
spk_12: and we're seeing the uptake of a sas adoption in europe but i think it's a little bit slower but but i don't think that was going to drive our numbers is because there's a higher pace of adoption i i really think it's yours yours we open up markets and get reference points then we have a chance to start to parlay additional deals and grow from there
spk_13: three i appreciate time faggot
spk_2: and you again later like that the question or star than one or next question cousin party line as people he landed open yeah i got it thanks for take my question and of it's a big opportunity that poor solutions that hoping you could that's an encore for a second didn't particularly when you pick of a tier one few to account the new newtown activity of how often it noncore serving it that initial hook into and accounts vs core and against is more broadly with that man been like their of for the non core solutions for customers that are not currently using docker that platform thanks sure ah thanks barker em i would say that your we're we're continuing to see adoption of our non core solutions fact a number of deals you know where we had our distribution management solution bought through or insights a solution added on
spk_19: and then also where we've had some relationships with carriers because we were in there with you know a product called turnstile which is a product that allows carriers to adopt com the forms and move that data into according experience so you'll we think the strategy of landing with smaller assets into accounts is helping
spk_2: but what is going to do is roman a v or bookings point of view it's gonna lean you know our new bookings in a quarter more towards expand because our land deals will be smaller so you weren't work continue to see success and the overall strategy got it and the going that international of of nights when they're can you give it to send the other deals resource in the first place with that your your your new sales people going directly to those accounts during our with their challenges wherever they partners or then i'll be in are at p the then of what is the the build out that the salesforce look like internationally today and and what does that look like an odd throughout twenty twenty two from iraq them point back yeah great when i would say is that those deals where source in a local sales team who are pursuing ideas i don't know if they were in initial inbound of our fee or originated in in some other manner but we got into a favorable position we can demonstrate our keep abilities and really bring line of sight of how they can get up and running very very quickly i'm so we're really pleased with the outcome but again it wasn't partner driven it was really a by our local team on the ground and then in terms of hiring you know i think with talked about this a bit in the past but you'll our model is to go to market direct with local sales force in those markets and i think building out not only your your sales function but your presale sales consulting and solution architecture functions so the have the team on the ground they can build or
spk_20: right demos they can be there for answering the the you know complex questions and put together high level estimates and terms of cost and was gonna take to put a solution in a so we continue to build out those teams
spk_19: in continental europe
spk_21: obviously we made those investments in australia you know a couple years back so you know just pleased to see the momentum on that an area we we saw nice when in in the uk because of that team so yeah we continue to build that out but then again i think that's a disproportionate amount of our investment in sales and marketing year over year that's going
spk_0: those international markets
spk_12: yeah present on the feedback night
spk_2: chris
spk_22: thank you and expressing count alec color rings angela of
spk_2: thank mike at the follow up on your on your ex partners first question in front of the percentage of the growth hundred and fifty eight of he picked up to use talk about up in a structural change and of your go to market driven that and and better any or on your on how your pipeline break down from a new low over expansion perspective yeah alex and i'm i'm assuming you're asking that question in terms of our land verse expand the right yeah that's right
spk_1: okay
spk_2: yeah and i think your we continue to see signs of success on that now i'm i'm pleased with the new logos you know that we've seen your last quarter i talked about our bella and star you know to ill competitive wins and this quarter three new sas customers who have come on so from a logo perspective here we are seeing you know just as add new customers onto the base that's nice bomb but as we've indicated earlier you know in a couple of accounts you know we've been able to land with smaller assets like distribution management or are turnstile product or something else and then cross sell that yeah into a core solution and what ends up happening is that ends up getting counted it is expand revenue as i think that strategy is working just because any time that we have an opportunity to build a relationship with a carrier know that is allows us to be in essence on the inside of you will or just in a in a favorable position for and a new upcoming opportune unity so i think that is intentional and the strategy so i think the answer your question your last question on the pipeline when we look at the pipeline it it looks are you really has nice balance between new customer and prospect opportunities verse selling into the base i just think the bookings number as it all unfolds is gonna lean still a little bit more favorable to the expand and how that ill resulting in high that dollar retention although we still think we're we're running higher than expected in those numbers at some point will likely come down a bit have a gun at very helpful and then just that boy on the tier one activity common very good writing up on a the palmer taking the progress at breached bit conservative the look what what are the key factor to get to build a growth and it's like the near
spk_0: no we're talking a tier one it's really about their strategy and dumb your what did they want to get done this year and do the have through their governance those budgets approved and those projects ready to move forward so most of those conversations tend to be along the lines of
spk_5: southern that they want to get done whether it's launching a new geography or if it's a bring a new line of business to market
spk_2: and that yeah i think they're progressing well you know i were working with some carriers that want to get some things done
spk_5: and perhaps are quite ready to move forward but we think we have a good opportunity to do so so ill again i i were encouraged by the discussions that we're having and is vinnie indicated earlier you know i don't think our point of view is unchanged of what we communicated the from keep from que for
spk_2: thank you figure and expressing how some pretty color out my the lot of them hey guys thanks you're thanks for having me back back here just are additional they have one question for for both of you have you are kind of kind of it into related so mike at work you could just talk a little bit about your existing customers and what they're saying about potentially converting to duck creek on demand you know i know that that that's not something that dup creek actively pushes customers to i think i've been very clear about that in the past but i just wonder what the customer appetite is for those exists thing that does existing customers that that aren't on duck reagan demand an end the the related question there for you have any is he remind us be assumed any conversions in your guy because if i remember correctly those can be those can be nicely revenue a creative this are there was a lot there but the that the that not all makes sense it does sackett and i would say that ill we continue to advance conversations with our on premise base and we're talking to a number of them around you know what's the right time frame for them to convert you know as i've indicated earlier yell with our local platform if they're running our iso templar it's in running some of these capabilities that we deliver
spk_4: on top of the local platform we can push out though circulars and those changes even is around prem environment
spk_2: and so many of them are in in a good place and we haven't created a forcing function if you will to force them into the creek on demand and then finally we really like to rally with our customers or work with them on a strategic priority
spk_4: because it's not just about a lift and shift it's about your something else that they want to get done or take advantage of some of our more advanced features of we've the launch over the last couple of years and we've advanced as many of those conversations or so but i think for us instead of having a whole stockpile of them you're going to see kind of a a
spk_23: cadence of several these conversions ah you know throughout the year
spk_0: but we're encouraged about the the advanced conversations were have one
spk_12: yep and and that can just jump in a lot on the last quarter question when when we you do guidance and project out our results
spk_2: yeah if we having known of vent we will factored in but we don't you know we don't project of on any number of conversions account aren't like you can it be pipeline elite date pipeline known of and so i think we might have one or two conversions built into this forecast on that those are kind of known customer events i am we don't generally i give ourselves a target to go out and get x number included inside the forecast guy it felt that i thought thanks very much as i like question how does that would of day and very a lot of up great that you so much for taking the question or can he gives an update on on where you some from customers opting into multi difference sure i'm yell in terms of are multi tenant solution i'll say that dumb you're pleased with the overall adoption of it no we're not getting into the accounts because they can't the numbers on the couch because you're driving customers or mandating multi denver single in is not what we're a
spk_8: doing we're not going to lose a deal because of lack of choice
spk_2: but i will say that over the past couple of quarters you know not only have we had a more adoption of are multi tenant solution we've had multiple customers go live on it some and and i'm very happy with the diversity of those carriers your some that are tier ones with very large books and some that are year fours and and small books so i think it's a proof point that a single platform in a single multi tenant back plane can support multiple complex carrier so your we're very happy with the progress we're making but again it's still early in our life cycle and we're going to be running and mixed mode for many years to come so again it's not a major focus point in terms of the and where we are with multi tennessee right now
spk_24: understood thank you and then a can you provide a and up the on the cf a search now it's gone
spk_25: ten am i would say that it's going well and dumb yeah i'm really happy with the progress we've made and i'm really pleased with the interest in the response or we've had from the market ya it's a great response was i'm leading candidates i think that is just a validation of the strength of our company a reputation
spk_0: asian and certainly the incredible opportunity we have out in front of us
spk_2: but i will say that you know will announce a new hire when we can and or but it's our priority right now just to find the right person but i will say we have somebody that has a big shoot shoes to fill kids that i think everyone knows advantages a terrific cfl and but we're excited about the prospects of we're seeing right now absolute thank you
spk_0: okay
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