OneStream, Inc.

Good afternoon, ladies and gentlemen. Thank you for joining OneStream's second quarter 2024 earnings conference call. As a reminder, this call is being recorded and will be available for replay from the investor relations section of our website following the call. After the speaker's remarks, there will be a question and answer session. If you'd like to participate, you'll need to press star one one on your phone. If your question has been answered and you'd like to remove yourself from the queue, simply press star one one again. We ask that you please limit yourselves to one question each. I will now pass the call over to Annie Lest's Vice President. Please go ahead.

Thank you, Operator. Good afternoon, everyone. Welcome to OneStream's second quarter 2024 earnings conference call. Joining me on the call today are our co-founder and CEO, Tom Shea, and our CFO, Bill Kofed. The press release announcing our second quarter results issued earlier today is posted on our investor relations website at investor.onestream.com, along with an earnings highlights presentation. Before we get started, I'd like to let everyone know that we plan to participate in two conferences in the upcoming weeks. The first is Citi's 2024 Global TMT Conference in New York on September 5th, and the second is the Goldman Sachs Communicopia and Technology Conference in San Francisco on September 11th. Just a reminder that we previously disclosed preliminary estimates for certain Q2 operating results, including revenue, gap and non-gap operating loss, and free cash flow, under the recent operating results section of our IPO registration statement, filed with the SEC on July 15, 2024. As a result, please note that historical and projected financials have already contemplated these results and their impact on future quarters. Today, we are providing the complete and actual Q2 financial results. Now let me remind everyone that some of the statements on today's call are forward-looking, including statements related to the guidance for the third quarter ending September 30th, 2024, and the year ending December 31, 2024. Forward-looking statements are subject to known and unknown risks and uncertainties, assumptions, and other factors. Some of these risks are described in greater detail in our perspective stated July 23rd, 2024, filed with the SEC on July 24th, 2024. And in other documents, we file with the SEC from time to time, including our quarterly report on Form 10-Q for the quarter ended June 30, 2024. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. During our call today, we will also reference certain non-GAAP financial measures. There are limitations to our non-GAAP financial measures, and they may not be comparable to similarly titled measures of other companies. The non-GAAP measures referenced on today's call should not be considered in isolation from or substitute for their most directly comparable GAAP measures. Our management believes that our non-GAAP measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our ongoing core operating performance. Reconciliations of our non-GAAP measures to the most directly comparable GAAP measures can be found in this afternoon's press release. and the earnings highlights presentation posted on our investor website. Now I'll turn the call over to Tom. Tom?

Thank you, Annie. Welcome, everyone, and thank you for joining us this afternoon for our first earnings call as a public company. We are excited to review our strong second quarter performance with you. And for those of you new to our story, I thought I'd spend some time sharing a bit about OneStream, how we got here, how we are modernizing the office of the CFO, and the opportunity ahead. So let's start with a few key highlights from the quarter. Q2 total revenue increased 36% year over year and subscription revenue grew 44% year over year. We were cashflow positive for our third consecutive quarter. And we hosted our largest ever splash user conference in May, where we introduced a record number of platform innovations and saw a 20% increase in attendance. We accomplished all this against an improving, if still challenging macro environment. With this backdrop, CFOs understand they must invest to modernize their financial architecture and go beyond just reporting on past performance to become a strategic driver of the business. The OneStream platform's ability to rationalize multiple point solutions and provide an exceptional level of insight is ideally positioned to meet this need. We're fortunate to say that even in uncertain times and possibly because of them, our customers are acknowledging the importance of investing in modernizing their finance departments, improving visibility and positioning themselves for the future. We remain convinced that our market opportunity is stronger than ever based on three important trends. First, while digital transformation and finance is underway, it's still in the early innings. Finance departments have been slow to fully embrace and trust the cloud, leaving them to play catch-up with their own digital transformation. While other operational areas, including sales, IT, and HR, have been digitizing their environments for the last two decades, we believe that only a small percent of cloud transformations from legacy finance applications have occurred thus far. Now that finance departments have begun to accept the cloud, and we believe it is just a matter of time before more CFOs ultimately recognize the need for a unified cloud-based platform to provide a single view into financial and operational data across the enterprise. Second, CFOs are being tasked with becoming more strategic, and integrating finance with operations is imperative in this effort. Historically, closing the books and reporting quarterly financials were the sole focus of the CFO. Today's CFOs are increasingly being asked to work more closely with the CEO and board to provide strategic insights and operational planning to help steer the business and drive execution. This requires CFOs to have tools like dynamic reporting to meet the requirements of changing business and complement the static nature of a traditional ERP system. Our platform provides operational agility and a unified view into financial and operational data across the enterprise, which is enabling CFOs and their organizations to excel. Third, AI ML is an opportunity to increase the value of knowledge workers and business performance. As customers become efficient at managing their core financial duties, and are reliably able to provide accurate reporting to their boards and management teams, CEOs are wanting even more analysis, both financial and operational, to help run their companies more efficiently. It's just the natural evolution. Together with ML, AI is increasing the value of knowledge workers who require accurate real-time data that OneStream's platform can provide. To respond to these trends, OneStream developed the operating system for modern finance, unifying a multitude of financial functions on our cloud-based platform and providing an exceptional level of insight to our customers. Our platform addresses three primary growth areas. Core finance solutions, or core CPM, financial and operational planning and performance applications, applied AI-driven forecasting and performance management. We began by addressing core finance solutions, leveraging our unique legacy and strength in financial closing consolidation and extending to planning and reporting. Ingesting data from almost any ERP system, OneStream unifies core finance solutions on a single modern platform, providing a single source of truth across the enterprise. And unlike existing legacy systems, our unique extensible dimensionality capability delivers finance the reporting standards and controls it needs with the flexibility for business units, functions, and locations to report and plan at additional levels of detail without impacting corporate standards. We estimate that this legacy replacement alone represents a roughly $10 billion market opportunity with only a small percentage converted to the cloud thus far. OneStream is a true software platform that enables partners and customers to write software on our software to build industry or functional specific applications atop our platform and leverage our common data model and security. This opens the door to a continued expansion of new solutions available through our solutions exchange, leading to higher innovation velocity, expanding revenue streams, greater utility, and faster time to value for customers. Second, as customers become more reliant on OneStream, they began asking us to solve new, more diverse problems outside our core. As a result, we moved beyond solely helping customers improve their core financial flows, reporting, and planning to streamlining additional financial processes like account reconciliation and transaction matching and actually steering operations. By extending past traditional CPM with expanded operational solutions like sales performance management, workforce planning, and ESG, We are now providing value far exceeding our original mandate and playing an important role in speeding and optimizing day-to-day business operations and planning across the enterprise. Importantly, moving into operations firmly solidified our position as a single source of truth for our customers. Third, this extensibility also encompasses our approach to AI. We saw the transformational potential of AI held for the Office of the CFO since our inception. We began coding to bring AI and machine learning into our platform nearly a decade ago, with the intent of building packaged AI solutions to enhance key financial processes and decisions. Our first purpose-built finance AI product was Sensible Machine Learning, which was created so companies could leverage real-time data and analysis to improve their demand forecasting without requiring significant data science resources. The repeatable, transparent, and measurable value of Sensible ML is generating, in many cases, a significant improvement in demand forecasting for customers, which is a significant ROI for their investment. While still early days, our ML product has been proven in the market at multiple customers and become an important differentiator of our platform. We are leveraging the same customer trust and transparency generated by SensibleML and developing our AI roadmap, which you will hear more about as we continue to develop it. We currently serve over 1,400 customers in approximately 45 countries with over 30% of total revenue coming from outside the U.S. Our Bluechip customer base represents virtually every major vertical. Now let me turn to how our progress in our three growth areas, core finance solutions or core CPM, financial and operational planning and performance solutions and applied AI driven forecasting and performance management is translating into tangible results with some of our latest customer wins in Q2. One of the largest manufacturers of medical devices signed a seven figure deal for our core CPM financial close, consolidation, reporting, and analysis, as well as our sensible ML. More and more, we are hearing from customers that the platform vision, including sensible ML and eventually sensible Gen AI, is an increasingly important differentiator. It's the extensibility of our platform as we present customers with a full journey from core to advanced analytics that both attracts and retains customers, reflected in our historically strong retention. The depth of our platform also aligns with the ongoing trend to streamline the number of disparate systems utilized. In this case, we replaced six point solutions with our platform. On average, we replaced two to six point solutions with every new customer. This win is also an example of the power of our strategic relationship with Microsoft. Another new SensibleML and AI customer this quarter was a supplier of products and services to military and defense contractors worldwide. This customer also signed a seven-figure deal encompassing our core CPM offerings, including financial consolidation, management reporting, and our SensibleML. Looking ahead, they plan to add financial planning and analysis in their second phase, This is a great example of how we begin discussions with our customers, first through the core and then do more. Finally, I want to highlight a win we had this quarter with the second largest banking group in France, Group BPCE. One of the key reasons that OneStream's core CPM was chosen came from the bank's stated objective to replace four consolidation systems with one modern and unified solution. This foundational win is a beachhead and a pivotal region for us. This seven-figure deal is enabling over 1,000 users with our technology to service 35 million customers around the globe. In our continuing effort to engage with and further enable our customers, our Splash User Conference in May once again attracted a record number of customers and prospects. As you know, everything about our conference is focused on customers. Our goal from the very beginning was 100% customer satisfaction, and today is no different. Every customer serves as a reference for OneStream. At Splash, where more than 80 customers shared how they are utilizing the OneStream platform to deliver not only performance, but also to start leveraging the platform to strategically steer their business to the future. We were particularly excited about the 12 product innovations that we shared at this year's event, the most we have ever delivered at one time. Let me give you a couple of notes. First, our certified Microsoft Power BI connector provides a no-code seamless integration that allows finance leaders to quickly connect and consume trusted financial and operational data from one stream within Microsoft's Power BI. Second, Our advanced narrative reporting is an intelligent capability that unifies and streamlines financial report creation, all linked to validated OneStream data. Capabilities including centralizing narrative report assembly and automating the gathering of key data, charts, and spreadsheets into narrative books are helping customers save hours of time and reduce risk and reporting errors. Third, our CPM Express product creates a simplified and prepackaged version of our core CPM capabilities, including financial flows, consolidation, budgeting, reporting, and forecasting. With pre-built functionality, predefined reports, and guided configuration, CPM Express targets our commercial customers, simplifying core activities and speeding up processes across the finance function. Finally, Demonstrating the extensibility of the OneStream platform, we announced a new partner solution built on OneStream. The new partner-placed solution, Infinity Sales Performance Management, empowers FP&A and revenue teams to plan, manage, and analyze sales performance across the enterprise. This unified approach eliminates data silos and misaligned objectives and helps finance leaders steer the business towards growth. We look forward to continuing momentum at our EMEA Splash User Conference in mid-September in Copenhagen and at our Wave Developer Conference in November. Now let me turn the call over to Bill for a more detailed discussion about Q2 and our outlook for the balance of the year.