WalkMe Ltd.

Thank you all for joining the WalkMe third quarter earnings call. Kindly be informed that you will have the opportunity to ask questions after the opening remarks. This can be done by pressing star 1 on your telephone keypad to register your question. I will now pass it to John Srepa, Head of Investor Relations for WalkMe. Thank you.

I'm John Strepa, head of investor relations at WalkMe, and today I'm joined by Dan Adika, CEO and co-founder, Scott Little, chief revenue officer, and Hageet Inan, our interim chief financial officer. Certain statements we make today may constitute forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events. These forward-looking statements are subject to risks, uncertainties, and assumptions, some of which are beyond our control. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled Risk Factors in our annual report on Form 20F filed with the Securities and Exchange Commission on March 24, 2022, and other documents filed with or furnished to the SEC. See our press release dated November 15, 2022 for additional information. In addition, certain metrics we discussed today are non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management and its financial and operational decision-making. Further, throughout this call, we provide a number of key performance indicators used by our management and often used by competitors in our industry. For more information on the non-GAAP financial measures and key performance indicators, including the reconciliation tables, see our press release dated November 15, 2022. And with that, I'd like to hand it off to Dan.

Thank you, John. Good morning, everyone. I'm happy to share the progress we made in Q3 in light of the dynamic market environment. We continue to be bullish about our strategy to accelerate app market with our Dapp offering, which fuels the world's leading enterprise companies who are seeking to accelerate their digital strategies. We are very pleased to announce Dapp ARR growth of over 60% for the second quarter in a row. Our Dapp customers are embracing the platform approach to digital adoption by acquiring an ELA or deploying Walkme departmental-wide on four or more applications. Business processes don't live in a single application, and the progress we're seeing with app customers give us confidence to continue to drive our strategy towards large organizations with complex workflows. Now, more than ever, in these challenging financial times, organizations are looking to extract more value and accelerate their technology investment. WalkMe is well positioned to expose usage visibility on the entire tech stack through our data solutions while empowering the organization with no code automation and orchestration tools to deliver a seamless digital experience to their employees and customers. Put simply, by connecting the user to the business workflow, ROI is achieved. As we continue to align our internal strategy moving up market, we're seeing the results in our numbers. Overall, our area R of customers over 500 employees grew 31% year over year, compared to a total of 26% ARR growth year over year in all customer segments, including SMB. At the end of the third quarter, we had 394 G2K customers, up from 367 at the end of 2021. We are seeing improvement in lending these customers and expanding our current G2K customer base. At our investor day in May this year, we know that the average ARR from G2K customer was 305K as of the end of 2021. And today, the average ARR for G2K customers is 334K, up almost 10% year-to-date. The opportunity of growth within our G2K customer is tremendous. In the quarter, we added four net new customers paying us over $1 million ARR. We now have 35 customers that are paying us over $1 million ARR and 511 that are paying us over $100K in ARR. We have taken active measures to reduce our exposure to the lower-growth and higher-cost customer segment of the SMBs. Near-term, this will be a headwind to our overall net new ARR in revenue as we proactively reduce this segment. Sub-500 employees' customers now account only for 6% of our total ARR, and we expect this to decline further over the coming quarter, which allows us to focus on enterprise and app customers. While we're seeing positive signs in our strategy and in the DAP offering, we are seeing headwinds from a macro standpoint. We continue to see deals take longer to get through the closing process, including additional layers of approval in larger deals. On the expense side, I'm thrilled to see that we held our non-GAAP operating expense flat quarter over quarter. We also improved our growth margin by 2% from previous quarter to 80.4%, driven by our investment in multi-cloud approach, where our subscription growth margin was 89%. And we're seeing better utilizations with our professional services organizations. We drove it above break-even on a non-GAAP basis. Operating loss in the third quarter was $12.5 million compared to a loss of $16.7 million last quarter. Operating loss margin of 20% compared to 28% last quarter. We are committed to building a sustainable growth business and achieving cash flow positive within 2023. With the progress we made in Q3, I'm even more confident in our ability to reach the goal. There is a growing sense of a tipping point in the market category we pioneered, DAP. Validation for digital adoption platforms is at an all-time high with an increase in tier one analyst firms' recognition. I'm proud to share that Gartner, for the first time, published a full market guide acknowledging the DAP category that we've been creating and shaping for the past few years. And Forster have released their first new wave analysis of the Dapp market, naming WalkMe as a leader. It's humbling to see the recognition and appreciation from global thought leaders. It confirms even further that we've been paving the right path for digital ROI. As market recognition continues to grow, we're also seeing growth in the ecosystem around us. In October, we hosted Elevate, the Dapp industry event to empower Dapp professionals. We had speakers join us from AB InBev, Cisco, Deloitte, WL Gore, among others, to share their amazing journeys in digital adoption. This was our largest gathering of DAP professionals to date, and I'm excited to see the continued growth and maturity of professionals driving the category forward beyond the walls of WalkMe. Lastly, we see an increase in demand coming from our partner ecosystem, as our customers are focused on how to do more with less in a complex spending environment. We're seeing significant growth in the volume of deals that come through our advisory partners. And we're making great progress with our ISV partnerships. WalkMe is consistently being selected as the partner of choice for the leading providers of change management and digital transformation across the globe. With that as the tipping point and our strategy in place, we expect an increased number of organizations to turn to WalkMe to drive their digital efficiencies. Our 2023 plan is focused on improving our efficiency, aligning our investment to our new go-to-market strategy, and ensuring our product offering continue to lead the category. With that in mind, I want to pass it off to Scott, our Chief Revenue Officer, to highlight some of the improvements and changes we made to our go-to-market approach and what he's seeing from our sales leaders in the field. Thank you.