TechTarget, Inc.

Hello everyone and welcome to the TechTarget Q4 2021 earnings release call. If you'd like to ask a question at the end of the presentation, please press star followed by one on your telephone keypads. I'll now hand over to your host, Charlie Rennick of the General Counsel to begin. Charlie, please go ahead.

Thank you and good morning. Joining me here today are Greg Straykosch, our Executive Chairman, Mike Katoya, our Chief Executive Officer, and Dan Norick, our Chief Financial Officer. Before turning the call over to Greg, I would like to remind everyone on the call of our earnings release process. As previously announced, in order to provide you with an update on the business in advance of the call, we've posted our shareholder letter on the investor relations section of our website and furnished it on an 8K. Following Greg's introductory remarks, the management team will be available to answer any questions. Any statements made today by TechTarget that are not factual may be considered forward-looking statements. These forward-looking statements are based on assumptions and are not guarantees of our future performance. Actual results may differ materially from our forecast. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the risk factors section of our filing with the SEC. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events that may arise after this call, except as required by law. We may also refer to financial measures not prepared in accordance with GAAP. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures accompanies our shareholder letter. With that, I'll turn the call over to Greg.

Great. Thank you, Charlie. 2021 was a banner year for TechTarget. We successfully integrated acquisitions, enjoyed healthy revenue growth, had over $100 million in adjusted EBITDA, and strengthened our balance sheet through strong free cash flow and a $400 million convertible debt offering that we completed in December. We remain optimistic about 2022 and beyond as we have four tailwinds at our back. The first tailwind is a healthy IT environment. The second tailwind is the modernization of the sales and marketing organization through the use of data. The third tailwind is growing compliance and sensitivity to privacy issues, which we benefit from because of our first-party data and permission-based audiences. And the fourth tailwind is the acceleration of the migration of face-to-face budgets to online. Today, we are releasing four annual metrics that demonstrate that our strategy is working and that we're executing at a high level. We are also releasing today annual guidance for 2022 with expected revenues between $310 million and $315 million and adjusted EBITDA between $120 million and $125 million. I will now open the call to questions.

Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your telephone keypad now. Our first question comes from Justin Patterson of KeyBank. Justin, your line is now open.

Great. Thank you very much. You discussed how Priority Engine is no longer the primary source of Revenue growth, could you highlight some of the key products where you're seeing momentum? And I wish you could think about the growth rates there. And then secondarily, just diving deeper into priority engine, could you compare and contrast the revenue opportunity for the marketing version versus the sales version? Given you already have a foothold in marketing departments, how should we think about the pace of that sales product scaling up? Thank you.

Great. Thanks, Justin. This is Mike. In terms of priority engine, and what we're seeing is really strong growth across all of our product lines. And as we noted in the shareholder letter, the priority engine revenues grew 20% year over year. And that represents about 25% of our overall revenue. So our largest, you know, some of the other products that we talk about are purchase intent data-driven demand generation solutions, And we see those that would represent close to the, you know, 40% to 50% of our overall revenue, and those are growing at a very healthy clip. And the reason why we're seeing that growth is because of the tailwinds that Greg had mentioned on the introduction. Having a permission-based audience with all the privacy concerns and compliance issues out in the market, our customers really want to go and engage and capture trusted and verified customers. IT buyers in the IT decision-making process. And because of our owned and operated sites, content of sites across all the major enterprise technology categories, our members come in. They often, they're permission-based. We understand what they're doing based on the content that they're reading, and that's very relevant for our customers because they want to know who's actually doing what in terms of engaging with content. and how to follow up with them. So we're seeing everything across the board grow, and everything that we do across all of our suite of products is driven by our first-party purchase intent data, which is a good benefit for us. And in terms of the priority engine, yes, we've historically, and we will continue to sell in the marketing departments. There are two different use cases. The marketing departments will leverage our data to go after very specific marketing initiatives like ABM strategies, going after specific accounts, competitive depositioning, what we noticed over the last couple of years was the data that our marketers were receiving from Priority Engine was getting leveraged by the sales teams. And those sales teams were being able to identify which accounts that they should go target. Now, the data is very similar, but the way they use the data is very different. So what we did was we increased the – we had a launch in November, an update release that really focused on the sales use case and updated user interface so sales reps could go out and see which individual prospects were engaged in it, which individual content at a specific time and date. So we captured that timeline. better user interface to manage their territory, enable them to take the prospects and enter them into their CRM system, understand which accounts and prospects within their territories were engaging on their own vendor's website. So being able to capture that information and put it into a sales use case and into the sales process has been very beneficial. So we expect to see Both on the marketing and sales side, the revenues grow. Being able to get the consistent data across marketing and sales helps create that bridge that's been missing between sales and marketing for years. So that's a big focus on that, and we think that both will enable growth across Priority Engine.

Yeah, and one point I would add there is I just want to make sure this isn't misconstrued. Priority Engine is still our lead product offering and our very biggest growth opportunity. It's just that today all, as Mike said, we're seeing strength across the board and all products are growing. But certainly priority engine is our biggest and best growth opportunity.

Great. Thank you.

Perfect. Thank you for your question, Justin. Our next question comes from Aaron Kessler. Aaron? Your line is now open.

Thank you. I just made a couple questions. On the customer metrics, I appreciate that. Maybe if you could provide a little bit more details around that, maybe specifically around some of the organic growth in those customer metrics, that would be helpful. And then second, just on the guidance for, you know, it was relatively in line with expectations. Key one, a little bit made light of estimates. It implies a little bit of a sequential decline. Can you just discuss the sequential decline for Q1. Is that just some more of the advertising-like products that would be more seasonal, and you expect that to snap back more in Q2? Thank you.

Okay, Aaron. On the Q1 sequential decline, that's normal based on, you know, budgets and seasonality, and that's pretty consistent with previous years. So, Q1 is your lowest revenue number. IT vendors don't have all their budgets set until later in the quarter, and then you'll see Q2 ramp up, Q3 relatively consistent up a little bit from Q2, and then the biggest quarter is Q4. So I think if you look historically, you'll see that sequential from Q4 to Q1 is roughly down 13% to 15%. In terms of the annual numbers that were laid out, You know, we started to report on these numbers last year. And, you know, we have our net revenue retention. We saw our total customers up 80%, increase in $100,000 spenders up 80%, increase in million-dollar customers up over 70%. And the story for these annual numbers are exactly what we wanted to prove out and what our thesis was for the acquisition of BrightTalk. A, we saw organic growth, which we don't break down the organic versus the acquisition, but we saw healthy organic growth as well as acquisition growth. But really, it really does validate why we made this acquisition. And, A, we're selling it to the same customers. We're selling very complementary products. We're, you know, on the tech target side, selling content syndication and text-based solutions as well as priority engine. And on the BrightTalk side, webinars and virtual events. And so when we have existing customers, they become more engaged with our entire portfolio and spend more of their combined offerings with us. And as we deliver those revenues and the increased revenues, we have the very similar operating margins. So you'll see the healthy margins as we've resulted in this quarter at 40%. So in terms of your overall question, we're seeing a good balance between the organic as well as to the acquisition, and that really does validate the thesis of why we made that acquisition.

Great, thank you. And maybe quickly on the healthcare IT acquisition you made recently, just any updates on that in terms of the progress with integration?

You know, we closed that on August 1st, and right now we've done a few low-hanging fruit things in terms of the operational side, but we are enabling Xtelligent to continue to run, and our plans for that will be to launch new products into that market. launch new segments and priority engine, be able to leverage some of our channel products on the BrightTalk side to help with the audience and lead generation opportunities in Excel. But that integration will happen throughout the middle and end of this year in terms of operationalize and laying out those new products.

Great. Thanks so much. Sure.

Perfect. Thank you for your question, Aaron. Our next question comes from Bhavin Shah of Deutsche Bank. Bhavin, your line is now open. Great. Thanks for taking my question.

Just maybe on that point that you talked about of what you're seeing in terms of BrightTalk, can you just maybe talk about exactly what are the areas where you're seeing a good cross-sell opportunity and what's driving that and kind of what's resonating with customers? Sure.

So, Bhavin, on BrightTalk, If you look back at the acquisition and why we made that acquisition, there were several reasons. One, their permission-based audience, their content strategy, and the ability to throw off really valuable first-party purchase intent data, but also the complementary product offering. If you look at TechTarget, we're very tech-based, white papers that are fueling all the information, our editorial teams, and all that gets captured into our priority engine platform. BrightTalk is very webinar, virtual-based type of information, buyers going on to research different topics. They'll spend 20, 30, 40 minutes on a webinar, and that is so very much complementary. So in terms of the low-hanging fruit, in 2021, what we did was we let both organizations run fairly separately. But where we would identify accounts that were spending with BrightTalk but not spending with TechTarget or spending with TechTarget and not spending with BrightTalk, we would start introducing each other's sales force into those accounts to show the complete story. Text-based, webinar-based, virtual-based, bringing it all together, being able to engage with buying team members and then capturing that intent. And delivering that through priority entry was a really big value. We've accelerated that where our customers want a mixed media vehicle strategy. They want an end-to-end solution. And so we have identified not only customers that are spending with us with one side and not the other, but customers that are spending with both. How do you tie that together and align it? And then how do we actually bring what we're delivering, what we're calling this content-to-close strategy together where we can get in with some of our analysts and experts even earlier in the stage to help our customers with their messaging and strategic positioning through content creation that can then be delivered and executed through webinars as well as tech space and ultimately capturing the priority engine platform and delivered back to our customers to help them close more deals. That's where we see a lot of the synergies in the end-to-end capabilities.

And I'll add in a little piece of... information here. There's dozens of vendors competing for these deals, and most vendors get eliminated without ever getting a chance to talk to the vendor. So the way the vendors have responded by that is they are producing a tremendous amount of content. So if you go to any software vendor's website, you'll see that they have multiple white papers and multiple webinars And TechTarget has been the leading distributor of vendor produced white papers, you know, basically forever. And BrightTalk is the leading distributor of vendor produced webinars. So a very natural fit, a similar product offering, but done with separate budgets. So those product offerings were very complimentary and really set itself up for a very healthy cross-selling opportunity.

Super insightful. That's helpful there. And just given the early success you had with BrightTalk, I mean, how do you think about the appetite for potential future M&A going forward? Or is it still a bit of a digestion period with both BrightTalk and Xtelligence?

I mean, we are very optimistic when it comes to the M&A, and we're having many, you know, we have regular discussions about what fits, and some of the criteria that we've talked about before is still very consistent today. You know, we're looking at different content strategies, good relevant content, permission-based audience, the ability to throw off first-party purchase intent data, as well as, you know, there's other complementary product lines. So we are actively, you know, we continuously look at and have discussions, and we don't have anything to report today, but it's something that we'll keep our eyes on.

Thanks, Michael. Just the last one for me, in terms of your guidance for 22, how are you thinking about some maybe marketing budgets potentially moving back towards face-to-face events? Is that a potential headwind going forward? Just fully appreciating that online solutions are here to stay. Are you going to maybe see a shift a little bit towards in-person user conferences and the like?

Yeah, I think that the major shift has obviously gone from face-to-face events to online and digital. I don't think face-to-face events will go away. And I think there'll be some pockets of face-to-face events, which is normal. I mean, sellers want to get out and meet clients, you know, face-to-face. There'll be some events out there. I think a good analogy that we had used, I think in the last earnings call, which we talked to other folks, is it's almost like the newspaper business, right? Like newspapers, you know, you get 99% of your information online, but Every once in a while you still want to get a newspaper, and it's still out there, and it's still, you know, available for people that want to pick up that newspaper. I think the face-to-face events will still be out there, but I think once you switch from, you know, the other analogy, from an analog to digital type of mindset, it's really hard to go back. A, you can scale the business more with the digital. You can measure it more, and it's more cost effective. So I think you hit it right. There might be a – I don't think there's going to be a tailwind coming back at us. I think they'll be a place for face-to-face events. I think it'll be pretty small.

Great. Thanks for taking my questions, and congrats on the strong end of the year.

Thank you.

Thank you for your questions, Bhavin. Our next question comes from Greg Burns of Cidity. Greg, your line is now open.

Good morning. Just looking at the guide, I guess like the midpoint of the EBITDA margin, is around 39%, and I think you had previously messaged last quarter about targeting over 40% even on margins. Can you just talk about what's implied in the guidance, and is that a function of just the mix of revenue that you see going forward?

I think at the exact midpoint, it's 39%. At the high end of the range, it's the 40%. I believe based on you seeing this Q4 results that we achieved 40%, even our margin, we believe that we're going to be able to achieve that for the year in 2022. You know, that percentage is part of a range, and it's a small range based on a $315 million number. It's a fairly small and historically been a pretty accurate range, so I just think it's just rounding.

Okay. And then when we look at the – the customer metrics, what percent of those customers are utilizing kind of the priority engine for a sales use case? I'm just trying to get a sense of where we are in terms of starting to penetrate that market and how much of your business is currently tied to that sales use case.

Yeah, that's a good question. So we launched the updated version in Q4. So I think in the past, Sales were using a priority engine, but we didn't have any seat license type of arrangement on that. So that is brand new. So there's a difference. People were using it, but we weren't necessarily monetizing it by this modular approach. Starting in Q1, we have the marketing, you know, marketing use case, and now we have the sales use case where we're starting to, you know, sell it based on the features and functionality, the workflow, the user interface, and also see licenses for sales reps. So it's very early. We've seen strong adoption on this. And, you know, as we go through the year, we'll continue to monitor that. But the appetite is there for salespeople to get access to the data that we have been delivering to marketing departments. They want it in a different manner. So this has been a good move for both our customers and for us. to have a modular approach that really suits the needs for what our customer needs. And most of the times our customers want it for both marketing and sales. So when you have that situation and you have the same data being delivered and cut up and, you know, delivered to each of the constituents in the way they need it and want it and consume it, that should be a really good positive tailwind for us.

Yeah, and that's very early days, and why we're excited about it is we have the opportunity to sell the sales version to all of our marketing use case customers. Now we have a separate module. And historically, we've always focused on selling to the 1,500 largest IT organizations that had a sophisticated enough marketing organization to take advantage of our services. But now with this sales use case, we think that opens up the market to about 18,000 software companies. So a huge expansion of our team by having this separate sales module available to sell. But in terms of your question, it's top of the first inning, very early days.

Okay, great. Thank you. Perfect. Thank you for your questions, Greg. Our next question comes from Jason Crea of Craig Hallam. Jason, your line is now open.

Thank you, guys. I wanted to stay with that same theme. So just going back to that platform upgrade from November, wanted to see if there's any early feedback that you've been provided. And then maybe if you can just talk about the selling process as you go to market to a marketing team versus going to market to a sales team. And just curious if there are any particular challenges going to the sales teams or any particular benefits as you go in separately, just kind of what your sales guys are seeing as they go to market separately.

Great. Yeah, Jason, that's a good question. In terms of the selling process, many times we'll continue to work with marketing and have them bring in their sales counterpart. And when you get marketing and sales on the same page or in line with an investment that they're going to make, that's a win-win for everybody. So our sellers will go in, they'll work on the market, the market will show how they use their products, their data from Priority Engine and what they're doing and what they're looking for. We'll bring in or ask to be brought in the head of inside sales, a sales executive, show them the data, show how we can carve it up and portray this and showcase this for both of their use cases. And it works pretty well. If a marketing person doesn't want to buy the solution from us, that doesn't say that our teams won't go to a sales leader and go in through the sales door as well and then work inversely and go back sales and then go back to marketing later on. But having them get a seat at the table together. To talk about how the data and the platform can work for both of their needs and their KPIs is a pretty powerful sales meeting, and it's a high get-it factor. In terms of your other question was sort of a follow-up to the previous one. Where we are fairly early innings on this, we've watched the sales use case. The early results of our launch, which is in Q4, it's only been a month or two, is that we've seen an uptick in sales usage and engagement. And what we'll do is we'll look at how often sales reps are in the tool, how long they're in the tool, how many page views when they're in the platform are they looking at. Early signs, first inning, very positive.

As you look at that process longer term, I'm just curious because you talked about you're going in to a sales opportunity with a marketing guy and with a sales guy. Do you envision having some of your sales reps being equipped to sell both the sales and the marketing? And do you see that as kind of an opportunity to maybe have better success going into these opportunities?

Yes. Our reps will sell both the sales and marketing, if that was your question. And getting those guys together is going to be a good dynamic to have. So our sales teams will walk in. We'll have one sales rep on our side engage in the account, work with marketing, work with the client sales team together, then bring them in together and then say, okay, here's how it works for both of you. And I think that's kind of the playbook that we're laying out.

Okay. Okay. You clarified that. Thank you. And then I just wanted to understand this content to close solution a little bit better. You kind of alluded to it earlier, but wondering if you can talk more about just that go to market process.

Yeah, that's a good question. So based on what we have to offer today, it's pretty unique. And I don't think there's anybody else that can do it. So our analysts and our publishers, our market experts, we now have the ability and we're actually doing this. of engaging with accounts at different levels and early in this whole cycle. So as accounts are looking at organizing and trying to figure out their strategic messaging and what's their play in the market, they need to do that with relevant content. And so being able to have an analyst group, our publishers, our market experts working with those customers But at different levels, within heads of product, C-levels, you know, AR, like different avenues within those accounts, they're helping them craft and create their concepts to a content strategy. And now being able to take that content and implement it into a purchase intent-led sales and marketing enablement program, whether it's through virtual events, webinars, custom content case studies, custom content syndication, and all the way through to the platform where we're engaging and identifying and delivering which accounts and which buyers that they should prioritize and sell to in order to help them close. And by this year, we'll really have a focus on tighter integrations into our customers' workflow to help with a bidirectional data feed to help them with their opportunities and pipeline and close one loss reports. We have that strategic end to end campaign, almost closed loop capability from content to again, helping our customers close more business.

And sorry to keep asking questions, but I'm just curious because that content to close occurs earlier in that lifecycle. How do you monetize this solution?

Well, we will be charging for the – our customers all need really good content. And it's really hard for our customers to generate and produce really good content. And so our opportunity here is our custom content and analyst division to go in there and say, we understand your markets. We understand your competitive landscape. We also understand the technology landscape, the validation opportunity. So when we go out there and help with this content creation arm, we're going to charge them for that. But there's a big value for our customers because they don't want to go out there and use all ineffective content, hire more content producers when they can have the, you know, really good strategists like us helping them craft that. As the content gets built, it's in a multimedia format. It then needs to get executed through a campaign. Hence, that's where the BrightTalk and TechTarget and Extelligent, all this stuff comes in, where we can have that integrated campaign to help them engage with permission-based content you know, audience members that we own and then help close the loop on the back end with a platform priority engine to show them, you know, better attribution and ROI.

Got it. Helpful. Thank you.

Thanks for your questions, Jason. Our next question comes from Brian Bergin of Cowen. Brian, your line is now open.

Hi. Good morning, guys. Thank you. First one, can you provide an update on specific initiatives underway to expand the international presence? Maybe talk about regions that are highest priority for you and any key barriers to consider?

Yep, Ryan. On the international side, you know, we are in, throughout EMEA, offices in Singapore, Sydney, Mexico, and India. And, you know, right now we still have a lot of room in those areas. So the other reason why we made the acquisition of RightTalk is that they had offices in very similar areas too. So we're still in the right places. We're still seeing a big transition from face-to-face. I mean, you look at the international business and you look at the tailwinds that we talk about and the catalyst and this whole shift from face-to-face to online, that was really – prominent in the international markets, throughout EMEA and throughout APJ. So, being able to go out there and focus on grabbing those we'll call field marketing dollars, enablement dollars, bringing them online and digital, we have a long way to go on that, and we're seeing good success, and our international business is, you know, growing at a healthy rate. We'll continue to invest in those same regions right now with more Sales, marketing, customer success, because, again, as we roll out priority engine and we get to the international pieces where it's more of a sales use case, we'll need more support, which we've already lined up in the budget, to help support sales users in those regions as well. So we're going to stick in those regions and continue to focus on that because we still have a long way to go.

Okay. Now, folks. And then what's the underlying growth target for Priority Engine in that 2022 outlook? And just following up on one of the prior questions around potential online to face-to-face shift, can you help us just frame how to think about normalized growth pace in the non-Priority Engine business over time?

Yeah, that's a good question. I think with the Priority Engine numbers, You know, we would probably say, you know, very similar to the overall numbers, high teens to 20% growth. Again, we, and then in terms of the online numbers outside of Priority Engine, you know, pretty similar. I mean, we have a really large, as we mentioned, like, to me in general, like, all of our products are purchase intent led, first party purchase intent led. So we're seeing good growth across demand, which is more your content syndication, and also through our branding elements because of our own and operated sites, Google limited third-party cookies. People really want to focus on trusted and verified audience members. That's really important. So I would say we see the overall growth, you know, very similar to the non-product side, 20% non-priority engine products and 20% plus as well.

Okay, thanks. Just a quick one on margins. So the keys to hitting that 40% EBITDA margin level, just talk about mix and GM versus potential SG&A leverage.

You know, the margins are consistent across all the products. It's all revenue growth. The operating leverage that we have, if we hit our revenue targets, we'll hit up 40%. If we exceed them, we'll beat the 40%.

Thank you very much.

Thank you for your questions, Brian. Our next question comes from Joshua Riley of Needham. Joshua, your line is now open.

Hey guys, thanks for taking my questions. So starting off, we've seen generally strong results from big legacy tech as well as some of the more modern cloud vendors. Is that consistent with what you're seeing in terms of spending by customer segment? And then what are you hearing from just more broadly customers in terms of their willingness to grow their spend? over the coming year given some of the economic uncertainty now with interest rates?

Yeah, Josh, in terms of big tech and, you know, growth, I would say this. We have about – we have a legacy global 10 accounts. Now, those aren't our largest accounts, but those are, you know, what you just called big tech legacy accounts. And those represent about, you know, 17% to 20% of our overall business within any quarter. And they're growing at a decent rate. Everything else, all the way to the other 2,600 customers, we're seeing a good balance across all of them. VC-backed, large businesses. SaaS-based organizations. So right now, I would say, I would summarize it. By every region, by every product mix, and by every customer class, it's been really well-balanced and really exceeded expectations. Going to your second question in terms of growth, is there any concern out there in the market? I know the inflation numbers came out today, and they were high. You're hearing about cost pressures. We, for us, based on the way our business is set up, It's not directly impacting us today. You might see something if it impacts some of our customers where their cost models are falling off or getting a little bit tough. But as of right now, we have had no signs that our customers are slowing down investing in intent-led, person-intent-driven marketing and sales solutions to help grow their market share. They do understand that. It's really critical for them to be in front of audiences at all times. And if you look at the dynamics of our customer base over the last 10 years, it's changed dramatically. It used to be, we used to have a predominantly all on-prem hardware, some software types that would be selling units. Now, most of our customers are SaaS-based, cloud-based. They're selling solutions and their customers are running their businesses on those solutions. So that definitely plays into our advantage in terms of the whole evolution of the enterprise IT market and where it is today. So right now I don't see any pullback and all indicators saying it's going to be a good year for us based on the guidance that we put up.

Okay, great. And then one more for me here. When you look at the annual net revenue retention of 150% for 2021, clearly a lot of that was driven by having BrightTalk to cross-sell for the first time. Going forward, though, what do you guys think is a more sustainable rate for NRR here? And then should we expect another strong year given the penetration of BrightTalk still as early into the core tech target customer base?

Yeah, I think... I'd mention two things in the NRR number, the 150% number. I mean, as I mentioned earlier, the huge benefit of the acquisition was, you know, being able to have existing customers, you know, become more engaged and spend more of that combined offerings, that whole complementary product suite. virtual events, webinars, you know, content syndication was huge. So this really played out the way we thought. When we were on the call last year, we talked about the benefits of this acquisition, why we're doing this acquisition, selling to the same customers, and moving forward from there and seeing success. That has proven out. In terms of expectations, you know, I would say that if I'm looking at this a year down the road, I would think that the expectations would be The strong ones that we had in 2020 and 2019, about 120%. We'll see how this plays out, but they're going to be healthy either way. But the 150% really did help validate the thesis of why we made this acquisition and that it's working. Got it. Thanks, guys. Thank you.

Thank you for your questions, Joshua. Our next question comes from Eric Martinuzzi of Lake Street. Eric, your line is now open.

Just a clarification and then a question. On the revenue guidance, is there any adjusted revenue in either the Q1 or the 2022 revenue guidance?

Any what revenue?

Adjusted?

No. That's all GAAP revenue.

Okay.

All right. And then on the... Curious on the headcount, where did we finish the headcount at the end of 2021? And then what's the plan for investing in headcount in 2022? Where does that go to by the end of the year?

Our headcount was roughly approximately 1,000. Eric, I don't have the exact number on. And we are hiring and still, you know, we expect the headcount to go up, net headcount to go up 10%. This year.

Okay, and the primary focus of the hiring?

Product development, customer success, sales.

All right, that covers the waterfront. Thanks, guys. Thanks.

Thanks for your questions, Eric. Our next question comes from Pinjalim Bora of JPMorgan. Pinjalim, your line is now open.

Oh, great. Thank you for squeezing me in. Most of my questions have been answered, One question that I have was when I'm doing an organic kind of calculation, I know you don't give inorganic contributions, but it seems like the guidance implies about an 18% growth, which should be a little bit of a deceleration from, say, mid-20s organic growth last year. You obviously have a new sales product. You outlined the four trends out there, which I'm guessing most of them are actually strengthening Is there an outside chance that organic growth, everything done at the end of the year, could actually be close to 25% or accelerate? Or would you say this is just a law of large number and it's bound to decelerate?

Pendulum, a couple things on that. Yeah, we didn't break out, as we talked about in the last call, organic versus combined. But in terms of growth, like if you look at the business and you look at our improved business profile over the years, even pre-pandemic at a smaller number, we were growing in high single digits to low double digits. And now we're in high teens, you know, to 20% growth. So our whole business profile has improved tremendously, almost 2X. Now, you have larger numbers. You know, back then we're $120 million, $115 million company. We're a $300 million organization now. But to answer your question, you know, this is, you know, a range that we see that we feel that we can meet. Now, if there are increased improvements in, you know, the markets and, you know, everything works perfectly, the adoption, you know, on the sales case, could there be upside to the number? There could be. But, you know, we're on January, February 10th right now, and we're trying to provide the best guidance at what I would call, what we call internally, at a 2X improvement of the business profile from a few years ago based on the growth rates at larger numbers. I think this is a really good projection, forecast, and we're going to go, hopefully go execute, hit, and beat it.

Got it. Thank you very much.

Perfect. Thank you for your questions, Pingelli. At this time, we currently have no further questions. Therefore, this concludes today's call. You may now disconnect your lines and have a lovely day.