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spk08: Good day, and thank you for standing by. Welcome to the Near Intelligence fourth quarter and full year 2022 earnings call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Gwen Lauber, Vice President, Investor Relations. Please go ahead.
spk05: Good morning and welcome to NEAR Intelligence's fourth quarter and full year 2022 earnings call. This is Gwen Lauber, Vice President of Investor Relations for NEAR. With me on today's call are Neil Mathews, NEAR's Chief Executive Officer and Rahul Agarwal, Chief Financial Officer. Our earnings press release was issued earlier this morning and is posted on our website. The primary purpose for today's call is to provide you with information regarding our fourth quarter and full year 2022 performance and offer an outlook for the first quarter and full year ending December 31st, 2023. The comments made on this call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current views and expectations as of today and should not be relied upon as representing our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. For more information about the risks and uncertainties involving these forward-looking statements and factors that could cause actual results to vary materially from those projected or implied by forward-looking statements, please see our Risk Factors in our Registration Statement on Form S-4 and accompanying prospectuses as well as our other reports filed with the SEC. I encourage you to visit our investor relations website at investors.near.com to access our full year 2022 press release, periodic SEC reports, and the webcast replay of today's call. Finally, unless otherwise stated, all financial comparisons on this call will be made to our fiscal year 2021 results on a historical non-proforma basis. And with that, let me turn the call over to Anil. Anil?
spk07: Thank you, Gwen. Thank you, everyone, for joining us on our first earnings call as a publicly traded company. First, I'll start with our financial highlights. Fourth quarter revenue was 15.3 million. Revenue for the fiscal year 2022 was $59.7 million. Net revenue retention for the year was 120%, which is in line with our steady state NIR expectation. Now, as many of you know, we completed our business combination on March 23rd and began trading on NASDAQ on March 24th under the ticker NIR. Clearly, this has been an exciting few days for us, I'd like to thank our customers, partners, advisors for the support over the last few years, and the belief in what we have built at Near and the opportunity ahead of us. Finally, I'd like to send a special thank you to our employees around the globe as they have worked tirelessly to get us to this point. For me, the journey started in 2012 when our co-founder, Shobhi Shukla, and I began building NEAR from our Singapore office. It's incredible to me to think how far we have come in terms of our solution, our customer base, our employees, and our geographic reach in that amount of time. Today, I can't even begin to express how proud I am on all fronts. NEAR is a multinational organization with offices and customers around the globe. While NIR's proprietary solutions are suitable for customers of all sizes and industries, they're focused primarily on large customers in retail, real estate, restaurants, and tourism. We estimate the industry TAM to be around 23 billion, which is largely under-penetrated. NIR uses patented algorithms to stitch and enrich data that help enterprise customers derive intelligence on their customers from their databases. Over the last few years, Nier has experienced rapid growth. Looking ahead, we believe we can continue to achieve revenue growth of around 30 to 35% and capitalize on our margin expansion opportunities. With the acquisitions of a company in France and a company in the US, Nier became a truly global company as we integrated these companies into Nier and prepared to enter the public markets we recognized that 2022 was our opportunity to reorganize the company with a go-to-market strategy that would allow us to scale more quickly. We realigned and bolstered our sales organization with sales reps with enterprise software experience who understand what it takes to win enterprise deals. These sales reps hit the ground running. In a few short months, they have closed multiple deals, and have added meaningfully to a pipeline, which in the fourth quarter was significantly larger than it was in the same quarter last year. A new go-to-market strategy is already starting to have profound impact on results and opportunity ahead. In North America, in 2022, our average deal size increased 25% over 2021. And globally, our average deal size is four times what it was last year. In terms of a pipeline, by targeting larger companies, we have seen our annual revenue potential at our target accounts more than double in size year over year. This change in our sales focus recently led to a six-figure deal with a major North American beverage bottling company. While not the norm, we are able to close this deal in less than 60 days. The new customer will use NEAR to get a better understanding of their customer's business by utilizing the data insights that we will provide to better predict the performance of their store locations. Recently, Nier's largest client in France renewed their commitment to us by signing an eight-figure deal, up approximately 100% over previous year. This multi-brand European retail chain uses Nier to drive football traffic in stores and measure the effectiveness around those. Near Solutions allows them to get a better understanding of the right catchment area at a store level and deliver appropriate messaging to their prospects and customers. We provide them with complete end-to-end solution that targets performance measurement. In addition to our direct sales effort, we work with channel partners. As an example, in collaboration with the channel partner, we just won a four-year contract with the state of Hawaii Tourism. This contract is in continuation of a three-year relationship with one of the world's most desired destinations. Hawaii leverages NEAR to understand its tourist visitation patterns and to know which are the top points of interest so they have a better understanding of its tourism impact throughout the islands. Now I'd like to talk a little bit about our product. NEAR analyzes data from approximately an estimated 1.6 billion unique user IDs across 70 million places in more than 44 countries. We use proprietary data sources from both the digital and the physical worlds and stitch this real-world data together, creating a truly unique value proposition. Our ability to harness this vast amount of data has allowed us to develop a deep understanding of consumer behavior on a sustainable, persistent basis. Data is what feeds our winning flywheel. As more customers use our platform, the better the data becomes and the better the algorithms become. It's based on a massive feedback loop. Much of this proprietary data is exclusive to us. This unique data is then stitched and enriched with our first party and third party data sources. This process allows us to provide better business outcomes and provide full stack offerings to our customers, which then further allows us to acquire new customers. The flywheel means that the more customers we get, the better our algorithms become. And that's our winning flywheel. And that is why we believe we are able to do things unlike anyone else. Our core value proposition is in taking our rich data sets and then building models. This is where the real value is derived. We aim to reduce the cost of exploration of our customers to infer insights like dwell time at a location and the number of footfalls that fell in a place. Because data is never complete, the whole estimation lifecycle on these properties is one of the core offerings in our product. In a moment, I'll turn the call over to our CFO, Rahul Agrawal, but before I do, I want to address one more point. For most of our prospects, we're not trying to replace an existing system. In many cases, this is the first time the customer is considering using technology to get richer understanding of customer behavior. Many companies that do not realize that with our operational intelligence product, for example, they were able to replace archaic Methods like physically counting people with clickers with a solution that allows them to access real-time data at scale with high accuracy. Near is a trusted, independent provider of aggregated, anonymized data on people and places, offering unique market intelligence and operation intelligence solutions to an underpenetrated market. We believe our relationship with our customers are strong and our products are sticky. coupled with our land and expand go-to-market strategy, I believe NEAR has a great opportunity ahead of us. Now, I'll turn over the call to my colleague, Rahul Agrawal.
spk04: Thank you, Anil, and good morning, everyone. For the fourth quarter of 2022, GAAP revenue was $15.3 million, up 5% year over year. For the full year, revenue was $59.7 million, marking a 32% growth from the year-ago period. Revenue from subscription customers typically makes up approximately 90% of our top line. For the full year 2022, it was 87%. Net revenue retention, or NRR, measures our success in retaining and growing revenue from our existing customers. NRR was 120% for 2022, which is largely consistent with our expected long-term steady-state goal for NRR. Now, looking at some key profitability metrics, gross profit was $10.7 million in Q4 of 2022, representing a 70 percent gross profit margin. Moving forward, we expect the GAAP gross profit margin to be relatively steady in the 68 to 72 percent range, barring any unusual items. Sales and marketing costs were $5.1 million in Q4 of 2022, a notable increase from $4.2 million in the prior year period as we reorganized and scaled our go-to-market strategy. R&D expenses were $5.6 million in Q4 of 2022, up from $4.9 million a year ago in Q4 2021, in part due to continued investment in bolstering our technology stack. G&A expenses were $7.7 million in Q4 of 2022, up from $5.3 million a year ago, in part due to certain transaction-related expenses and as we continue to invest in our journey of becoming a public company. All costs and expenses were in line with our planned budget for Q4 2022. Gap operating loss for Q4 2022 was $10.4 million, and gap net loss was $20.8 million. For the year, we reported a gross profit of $41.1 million, a 68.7% gross profit margin. Total operating expenses came in at $125.1 million, up $83.3 million from the prior year. The majority of the increase is related to stock-based compensation, which I'll explain further in a moment. GAAP operating loss for 2022 was $93.9 million and GAAP net loss was $104.2 million. Stock-based compensation was $1.7 million in Q4 and $66.5 million for 2022. In advance of the business combination with Clueden, We, one, restructured ourselves from a Singapore headquartered company to a US domiciled one, and two, converted our employee option plan into a new RSU plan, which resulted in a one-time charge of $62.5 million in the second quarter of 2022. Looking at the key balance sheet items, we ended the quarter with $61 million in cash and cash equivalents and $26 million in accounts receivable. Our accounts receivable balance is elevated due to delayed collections we experienced during our reorganization in the first half of 2022. We expect our AR balances to normalize by the middle of 2023. Our total outstanding debt based on GAAP as on 31st December 2022 was $88.4 million. Turning to cash flow, the cash flow used for operations in 2022 was $26.7 million. Moving to our outlook, for Q1, we currently expect revenue to be in the range of $15 to $15.5 million. For the fiscal year 2023, we currently expect the revenue to be approximately $81 million. We are excited by the path in front of us today and the solid demand for our solutions. Our overall compounding growth trajectory remains on track, and we believe we have sufficient cash to support our organic growth initiatives and are well-funded to support our path to profitability. And now, I would like to turn the call over to the operator for questions. Thank you.
spk08: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mike Lattimore with Northland Capital Markets. Your line is now open.
spk10: Great. Thank you. Congrats on being public here.
spk06: Thank you.
spk10: So I guess just on the, can you talk a little bit about the growth rate in the fourth quarter? I think it's 5%. You're guiding the 35% growth for fiscal 23 here. Can you just talk about the change in growth rate there, the build from 5% to 35%? What drives that? Sure. This is Rahul.
spk01: So
spk04: We made significant investments in 2022 in our sales and marketing team, as Anil had pointed out. The result of that is a larger deal conversion, higher revenue from newer customers that we are locking in. And each one of these will result in getting us to the 35% growth. The NRR of 120% is also going to help us ramp our revenue and get us to the $81 million of expected top line number that we've estimated for 2020.
spk10: And the guidance is all organic growth, is that correct?
spk00: Yes, that is correct.
spk10: Okay, very good. And you talked about the sales force improvement for your, what quarter did that have? When did that occur? Which quarter did that occur in?
spk04: The reorganization occurred in Q2 of 2022. After that, we invested in the sales force. We have hired most of the sales team members across different functions, be it customer success, be it SDRs, be it account reps. between August of 2022 and December of 2022. And that's the team which is fully ramped up and starting to deliver starting Q1 of this year.
spk10: Great, great. And then on the NRR number, 120%, very strong, obviously. Can you talk a little bit about just the driver of that? Is it wider use of the same offering within a company? Is it more products? Is it more data? What's the biggest driver of NRR here?
spk04: Yeah, it's driven primarily on two fronts. One is expanded usage as the customers start using our product, start to see results. They are more comfortable with renewals and increasing the amount of renewals, you know, both in terms of additional offerings that Near has to offer to customers in terms of products. And secondly, in terms of the overall expansion, they are buying more data points, more insights from the same products, thereby increasing their usage on the platform.
spk10: Right. And this last one, from a technology perspective, you know, you talked about the various steps of stitching, enriching model, act, measure. Modeling clearly has a fair amount of artificial intelligence behind it, but can you talk about just use of AI across your platform? It seems like it would impact almost every phase that we talked about there.
spk07: Yeah, sure. This is Anil here. So basically what we're doing is, um, you know, just to, just to give you some context here, we're working with, um, maximum amounts of data that, you know, that originates both in the digital and the physical world collating this. And then we have been running models on this since, since, um, you know, we started the company. So as you know, each of these models require revisiting and refining. So where we have reached today is the last decade's expertise and experience has helped us where we have been using a lot of machine learning, a lot of algorithms that have helped us reach offer sort of our platform for both operational intelligence and marketing intelligence. We today have seven patents in the pipeline. So it's a patented technology that we've been using definitely with a lot of AI.
spk09: All right, very good. Thanks very much. Good luck this year. You're welcome.
spk08: Thank you. Our next question comes from the line of Arjun Bhatia with William Blair. Your line is now open.
spk02: Thanks for taking the question. I think you mentioned that your customers are landing at a larger size. Can you just maybe elaborate on that a little bit? Are they landing with multiple products, both the marketing and operational side of it, or is it just in a single product they're landing with higher usage? What's driving that dynamic?
spk07: Yeah, thanks for the question. So the way to look at this is we have a land and expand strategy where we go into a customer and typically telling, okay, let's say that you want to analyze data from a small region. Let's say California. They will start with California. They will see the results in that. Then they will say, okay, let's expand to Florida. Let's expand to New York. And that is one point of expansion. The other one is, In cases, we are also doing a lot of sort of cross-selling between our products. We would land with an operational intelligence piece that we are working with chief data officers, chief technology officers, or chief information officers, and expand to our marketing intelligence offering, which is typically aimed at marketers, you know, the CMO's office. This has allowed us to sort of land and expand customers in some cases There are customers where they started in 2019 with $100,000, and now it is a seven-figure deal. There are customers, one of the largest customers in France, which is an eight-figure deal. Three years back, it was just started with just $10 million. So there is a significant land and expand opportunity over a period of time. And we have seen that across multiple regions and across multiple verticals.
spk02: Okay. Got it. That's helpful. And then is there any, Raul, for you, again, is there any seasonality in the business that we should consider, particularly as we look at the Q4 results versus what happened for the full year of 22 and what you're guiding to for 2023 as well?
spk04: Yeah, so because the platform is subscription based, obviously, you know, there isn't really a lot of seasonality, but typically, you know, given you still have a significant amount of marketing dollars, which kind of expire by the end of the year, you might see an increase in spends, particularly in Q4 on the overall macro environment, in budgets of customers. But we have seen in the past, especially in Q4 of 2021, as an example, that there was significant over usage on the platform, you know, most likely because customers had extra budget and they wanted to, you know, invest more and get more data out of the platform. So otherwise, I mean, from an overall platform point of view, planning point of view, obviously there is a ramp built in quarter over quarter, but there's no seasonality as such.
spk02: Okay. Got it. That's helpful. And then last one for me, just, On the go-to-market side, where are you in the hiring cycle right now? Are there more reps that you still need to bring on, or is that team more or less fully built out at this point?
spk07: Yeah, I think for us to achieve our numbers for this year in a capacity in place, we would continue hiring for the following year. We do have, just recently, like Rahul had mentioned, we invested heavily in our revenue organization. So whether it is demand gen or STRs or contracts, we have already done that. And so there's nothing, there's no more additional hire required for this year's objective, just to be clear.
spk02: Okay, that makes sense. Perfect. Thank you guys for taking the questions. You're welcome.
spk08: Thank you. That was our last question. Now I'd like to turn call back to Nir for closing remarks.
spk07: Thank you, operator, and thank you all for joining us today. I look forward to speaking with you during the quarter.
spk08: This concludes today's conference call. Thank you for participating. You may now disconnect. you Music. Thank you. Thank you.
spk03: Thank you. Thank you.
spk08: Good day, and thank you for standing by. Welcome to the NEAR Intelligence fourth quarter and full year 2022 earnings call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Gwen Lauber, Vice President, Investor Relations. Please go ahead.
spk05: Good morning, and welcome to NEAR Intelligence's fourth quarter and full year 2022 earnings call. This is Gwen Lauber, Vice President of Investor Relations for NEAR. With me on today's call are Nell Matthews, NEAR's Chief Executive Officer and Rahul Agarwal, Chief Financial Officer. Our earnings press release was issued earlier this morning and is posted on our website. The primary purpose for today's call is to provide you with information regarding our fourth quarter and full year 2022 performance and offer an outlook for the first quarter and full year ending December 31st, 2023. The comments made on this call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current views and expectations as of today and should not be relied upon as representing our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. For more information about the risks and uncertainties involving these forward-looking statements and factors that could cause actual results to vary materially from those projected or implied by forward-looking statements, please see our risk factors in our registration statement on Form S-4 and accompanying prospectuses as well as our other reports filed with the SEC. I encourage you to visit our investor relations website at investors.near.com to access our full year 2022 press release, periodic SEC reports, and the webcast replay of today's call. Finally, unless otherwise stated, all financial comparisons on this call will be made to our fiscal year 2021 results on a historical non-performer basis. And with that, let me turn the call over to Anil. Anil?
spk07: Thank you, Gwen. Thank you, everyone, for joining us on our first earnings call as a publicly traded company. First, I'll start with our financial highlights. Fourth quarter revenue was $15.3 million. Revenue for the fiscal year 2022 was $59.7 million. Net revenue retention for the year was 120%, which is in line with our steady state NIR expectation. Now, as many of you know, we completed our business combination on March 23rd and began trading on NASDAQ on March 24th under the ticker NIR. Clearly, this has been an exciting few days for us I'd like to thank our customers, partners, advisors for the support over the last few years and the belief in what we have built at Nier and the opportunity ahead of us. Finally, I'd like to send a special thank you to our employees around the globe as they have worked tirelessly to get us to this point. For me, the journey started in 2012 when our co-founder Shobhi Shukla and I began building NEAR from our Singapore office. It's incredible to me to think how far we have come in terms of our solution, our customer base, our employees, and our geographic reach in that amount of time. Today, I can't even begin to express how proud I am on all fronts. NEAR is a multinational organization with offices and customers around the globe. While NIR's proprietary solutions are suitable for customers of all sizes and industries, they're focused primarily on large customers in retail, real estate, restaurants, and tourism. We estimate the industry TAM to be around 23 billion, which is largely under-penetrated. NIR uses patented algorithms to stitch and enrich data that help enterprise customers derive intelligence on their customers from their databases. Over the last few years, Nia has experienced rapid growth. Looking ahead, we believe we can continue to achieve revenue growth of around 30 to 35% and capitalize on our margin expansion opportunities. With the acquisitions of a company in France and a company in the US, Nia became a truly global company as we integrated these companies into Nia and prepared to enter the public markets we recognized that 2022 was our opportunity to reorganize the company with a go-to-market strategy that would allow us to scale more quickly. We realigned and bolstered our sales organization with sales reps with enterprise software experience who understand what it takes to win enterprise deals. These sales reps hit the ground running. In a few short months, they have closed multiple deals, and have added meaningfully to our pipeline, which in the fourth quarter was significantly larger than it was in the same quarter last year. A new go-to-market strategy is already starting to have profound impact on results and the opportunity ahead. In North America, in 2022, our average deal size increased 25% over 2021. And globally, our average deal size is four times what it was last year. In terms of a pipeline, by targeting larger companies, we have seen our annual revenue potential at our target accounts more than double in size year over year. This change in our sales focus recently led to a six-figure deal with a major North American beverage bottling company. While not the norm, we are able to close this deal in less than 60 days. The new customer will use NEAR to get a better understanding of their customer's business by utilizing the data insights that we will provide to better predict the performance of their store locations. Recently, Nier's largest client in France renewed their commitment to us by signing an eight-figure deal, up approximately 100% over previous year. This multi-brand European retail chain uses Nier to drive football traffic in stores and measure the effectiveness around those. Near Solutions allows them to get a better understanding of the right catchment area at a store level and deliver appropriate messaging to their prospects and customers. We provide them with complete end-to-end solution that targets performance measurement. In addition to our direct sales effort, we work with channel partners. As an example, in collaboration with the channel partner, we just won a four-year contract with the state of Hawaii Tourism. This contract is in continuation of a three-year relationship with one of the world's most desired destinations. Hawaii leverages NEAR to understand its tourist visitation patterns and to know which are the top points of interest so they have a better understanding of its tourism's impact throughout the islands. Now I'd like to talk a little bit about our product. NEAR analyzes data from approximately an estimated 1.6 billion unique user IDs across 70 million places in more than 44 countries. We use proprietary data sources from both the digital and the physical worlds and stitch this real world data together, creating a truly unique value proposition. Our ability to harness this vast amount of data has allowed us to develop a deep understanding of consumer behavior on a sustainable, persistent basis. Data is what feeds our winning flywheel. As more customers use our platform, the better the data becomes and the better the algorithms become. It's based on a massive feedback loop. Much of this proprietary data is exclusive to us. This unique data is then stitched and enriched with our first party and third party data sources. This process allows us to provide better business outcomes and provide full stack offerings to our customers, which then further allows us to acquire new customers. The flywheel means that the more customers we get, the better our algorithms become. And that's our winning flywheel. And that is why we believe we are able to do things unlike anyone else. Our core value proposition is in taking our rich data sets and then building models. This is where the real value is derived. We aim to reduce the cost of exploration of our customers to infer insights like dwell time at a location and the number of footfalls that fell in a place. Because data is never complete, the whole estimation lifecycle on these properties is one of the core offerings in our product. In a moment, I'll turn the call over to our CFO, Rahul Agrawal, but before I do, I want to address one more point. For most of our prospects, we're not trying to replace an existing system. In many cases, this is the first time the customer is considering using technology to get richer understanding of customer behavior. Many companies that do not realize that with our operational intelligence product, for example, they were able to replace archaic Methods like physically counting people with clickers with a solution that allows them to access real-time data at scale with high accuracy. Near is a trusted, independent provider of aggregated, anonymized data on people and places, offering unique market intelligence and operational intelligence solutions to an underpenetrated market. We believe our relationship with our customers are strong and our products are sticky. coupled with our land and expand go-to-market strategy, I believe NEAR has a great opportunity ahead of us. Now, I'll turn over the call to my colleague, Rahul Agrawal.
spk04: Thank you, Anil, and good morning, everyone. For the fourth quarter of 2022, GAAP revenue was $15.3 million, up 5% year over year. For the full year, revenue was $59.7 million, marking a 32% growth from the year-ago period. Revenue from subscription customers typically makes up approximately 90% of our top line. For the full year 2022, it was 87%. Net revenue retention, or NRR, measures our success in retaining and growing revenue from our existing customers. NRR was 120% for 2022, which is largely consistent with our expected long-term steady-state goal for NRR. Now, looking at some key profitability metrics, gross profit was $10.7 million in Q4 of 2022, representing a 70 percent gross profit margin. Moving forward, we expect the GAAP gross profit margin to be relatively steady in the 68 to 72 percent range, barring any unusual items. Sales and marketing costs were $5.1 million in Q4 of 2022, a notable increase from $4.2 million in the prior year period, as we reorganized and scaled our go-to-market strategy. R&D expenses were $5.6 million in Q4 of 2022, up from $4.9 million a year ago in Q4 2021, in part, due to continued investment in bolstering our technology stack. G&A expenses were $7.7 million in Q4 of 2022, up from $5.3 million a year ago, in part due to certain transaction-related expenses and as we continue to invest in our journey of becoming a public company. All costs and expenses were in line with our planned budget for Q4 2022. Gap operating loss for Q4 2022 was $10.4 million, and gap net loss was $20.8 million. For the year, we reported a gross profit of $41.1 million, a 68.7% gross profit margin. Total operating expenses came in at $125.1 million, up 83.3 million from the prior year. The majority of the increase is related to stock-based compensation, which I'll explain further in a moment. GAAP operating loss for 2022 was $93.9 million and GAAP net loss was $104.2 million. Stock-based compensation was $1.7 million in Q4 and $66.5 million for 2022. In advance of the business combination with Clueden, We, one, restructured ourselves from a Singapore headquartered company to a US domiciled one, and two, converted our employee option plan into a new RSU plan, which resulted in a one-time charge of $62.5 million in the second quarter of 2022. Looking at the key balance sheet items, we ended the quarter with $61 million in cash and cash equivalents and $26 million in accounts receivable. Our accounts receivable balance is elevated due to delayed collections we experienced during our reorganization in the first half of 2022. We expect our AR balances to normalize by the middle of 2023. Our total outstanding debt based on GAAP as on 31st December 2022 was $88.4 million. Turning to cash flow, the cash flow used for operations in 2022 was $26.7 million. Moving to our outlook for Q1, we currently expect revenue to be in the range of $15 to $15.5 million. For the fiscal year 2023, we currently expect the revenue to be approximately $81 million. In summary, We are excited by the path in front of us today and the solid demand for our solutions. Our overall compounding growth trajectory remains on track, and we believe we have sufficient cash to support our organic growth initiatives and are well-funded to support our path to profitability. And now, I would like to turn the call over to the operator for questions. Thank you.
spk08: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mike Lattimore with Northland Capital Markets. Your line is now open.
spk10: Great. Thank you. Congrats on being public here. So I guess just on the – can you talk a little bit about the growth rate in the fourth quarter? I think it's 5%. You're guiding the 35% growth for fiscal 23 here. Can you just talk about the change in growth rate there, you know, the build from 5% to 35%? What drives that? Sure. This is Rahul.
spk04: We made significant investments in 2022 in our sales and marketing team, as Anil had pointed out. The result of that is a larger deal conversion, higher revenue from newer customers that we are locking in. And each one of these will result in getting us to the 35% growth. The NRR of 120% is also going to help us ramp our revenue and get us to the $81 million of expected top line number that we've estimated for 2020.
spk10: And the guidance is all organic growth. Is that correct?
spk00: That is correct.
spk10: Okay. Very good. And you talked about the sales force improvement. What quarter did that have? When did that occur? Which quarter did that occur in?
spk04: The reorganization occurred in Q2 of 2022. After that, we invested in the sales force. We have hired most of the sales team members across different functions, be it customer success, be it SDRs, be it account reps, between August of 2022 and December of 2022. And that's the team which is fully ramped up and starting to deliver starting Q1 of this year.
spk10: Great, great. And then on the NRR number, 120%, very strong, obviously. Can you talk a little bit about just the driver of that? Is it wider use of the same offering within a company? Is it more product? Is it more data? What's the biggest driver of NRR here?
spk04: Yeah, it's driven primarily on two fronts. One is expanded usage. As the customers start using our product, start to see results, They are more comfortable with renewals and increasing the amount of renewals, both in terms of additional offerings that Near has to offer to customers in terms of products. And secondly, in terms of the overall expansion, they are buying more data points, more insights from the same products, thereby increasing their usage on the platforms.
spk10: Right. And just last one on from a technology perspective. You know, you talked about the various steps of stitching, enriching model, act, measure. Modeling clearly has a fair amount of artificial intelligence behind it. But can you talk about just use of AI across your platform? It seems like it would impact almost every phase we talked about there.
spk07: Yeah, sure. But this is on in-game. So basically what we're doing is, um, you know, just to, just to give you some context here, we're working with, um, maximum amounts of data that, you know, that originates in both in the digital and the physical world collating this. And then we have been running models on this since, since, um, you know, we started the company. So as you know, each of this models, you know, require revisiting and refining. So where we have reached. today is that the last decade's expertise and experience has helped us where we have been using a lot of machine learning, a lot of algorithms that have helped us reach offer sort of our platform for both operational intelligence and marketing intelligence. We today have seven patents in the pipeline. So it's a patented technology that we've been using definitely with a lot of AI built into this.
spk09: All right. Very good. Thanks very much. Good luck this year. You're welcome.
spk08: Thank you. Our next question comes from the line of Arjun Bhatia with William Blair. Your line is now open.
spk02: Hey, guys. Thanks for taking the question. Hey, I think you mentioned that your customers are landing at a larger size. Can you just maybe elaborate on that a little bit? Are they landing with multiple products, both the marketing and operational side of it, or is it just in a single product they're landing with higher usage? What's driving that dynamic?
spk07: Yeah, thanks for the question. So the way to look at this is we have a land and expand strategy where we go into a customer and typically telling, okay, Let's say that you want to analyze data from a small region, let's say California. They will start with California, they will see the results in that, then they will say, okay, let's expand to Florida, let's expand to New York. And that is one point of expansion. The other one is, in cases, we are also doing a lot of sort of cross-selling between our products. we would land with an operational intelligence piece where we are working with chief data officers, chief technology officers, or chief information officers, and expand to our marketing intelligence offering, which is typically aimed at marketers, you know, the CMO's office. This has allowed us to sort of land and expand customers. In some cases, there are customers where they started, you know, in 2019, with like $100,000, and now it is a seven-figure deal. There are customers, one of the largest customers in France, which is an eight-figure deal. Three years back, it was just started with just $10 million. So there is a significant land and expand opportunity over a period of time, and we have seen that across multiple regions and across multiple verticals.
spk02: Okay, got it. That's helpful. And then is there any, Rahul, for you, again, is there any seasonality in the business that we should consider, particularly as we look at the Q4 results versus what happened for the full year of 22 and what you're guiding to for 2023 as well?
spk04: Yeah, so because the platform is subscription-based, obviously, you know, there isn't really a lot of seasonality, but typically... given you still have a significant amount of marketing dollars which kind of expire by the end of the year, you might see an increase in spends, particularly in Q4, on the overall macro environment, in budgets of customers. But we have seen in the past, especially in Q4 of 2021, as an example, that there was significant overusage on the platform, most likely because customers were had extra budget and they, they wanted to, you know, invest more and, and get more data out of the platform. So otherwise, I mean, from an, from an overall platform point of view, planning point of view, obviously there is a ramp built baked in for travel quarter, but there's no seasonality as such.
spk02: Okay. Um, got it. That's helpful. And then last one for me, just on the go to market side, where are you in the hiring cycle right now? Are there, more reps that you still need to bring on or is that team more or less fully built out at this point?
spk07: Yeah, I think for us to achieve our numbers for this year in a capacity in place, we would continue hiring for the following year. We do have just recently, like Rahul had mentioned, we invested heavily in our revenue organization. So whether it is demand gen or STRs or contracts, we have already done that. And so there's nothing, there's no more additional hire required for this year's objective, just to clear that.
spk02: Okay, that makes sense. Perfect. Thank you guys for taking the questions. You're welcome.
spk08: Thank you. That was our last question. Now I'd like to turn call back to Nir for closing remarks.
spk07: Thank you, operator, and thank you all for joining us today. I look forward to speaking with you during the quarter.
spk08: This concludes today's conference call. Thank you for participating. You may now disconnect.
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