WalkMe Ltd.

Welcome to the WalkMe first quarter 2023 earnings call. To ask for questions, you may signal by pressing star one on your telephone keypad. Thank you.

Thank you for joining our first quarter 2023 earnings call. I'm John Streppa, 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 Yanan, our 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 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 14, 2023, and other documents filed with or furnished to the SEC. See our press release dated May 17, 2023 for additional information. In addition, certain metrics we will discuss 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 in 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 non-GAAP financial measures and key performance indicators, including the reconciliation tables, see our press release dated May 17, 2023. And with that, I'll hand it off to Dan.

Thank you for joining us today as we review our 2023 first quarter results and share some of the big achievements. The investments we've made are paying off. Despite the continuous global macro edge wins in Q1, we achieved many incredible milestones. I'm extremely proud of our team execution. They've shown the edge of resilience and innovative mindset that WalkMe is. I'm even more excited today about the opportunity ahead of us than I was 11 years ago when we launched WalkMe. WalkMe help organizations execute mission-critical workflows. The more organizations invest in technology, the bigger the need for digital adoption. I'll share in a few minutes the whopping ROI our customers obtain with WalkMe. Let's turn to the numbers. We've made a great progress growing revenue 16% year-over-year and delivering on improving our non-GAAP operating loss to $8.8 million in the quarter compared to an 18.6 in the same period last year. This represents a non-GAAP operating margin improvement from a 33% loss in Q1 2022 to only 13% in the first quarter of 2023. We are focused on our commitment to be free cash flow positive by the end of the year and decreased our cash burn from $10.2 million in the fourth quarter in 2022 to $8.3 million in the first quarter of 2023. We are more determined than ever as ADAPT market leader to build a strong, sustainable business. even as we face the current macroeconomic headwinds. The path to profitability and long-term growth is paved with the tough decisions that we need to make in order to ensure our collective success. We took action in April to create a leaner, more efficient organization that better reflects our near-term growth expectations, while setting us on a path to profitability and long-term growth. Chagit will review more in detail, but I want to take a moment to thank all of those that were impacted and the rest of the organization who have acted with empathy and compassion and remains committed to the strategy moving forward. As promised, I'm thrilled to announce that WalkMe was officially awarded with FedRAMP Ready status. This is a huge milestone for us as a company and digital adoption as a category. It's a testament to our ability to bring our powerful technology with the intense security requirements of the federal government. Federal, state, and local governments are undergoing technology modernization and are ripe for digital transformation. We've already helped the state of Georgia with their My Voter page, the U.S. Department of Defense, defense travel systems, the Department of Veterans Affairs with their HR modernization program, and the City of General Arizona, along with dozens of other local organizations. And this is even before we were fully certified. Being certified is a big advantage, opening up a vast go-to-market motion that will capitalize in the years to come. Expect WalkMe in every government organization. We also continue to execute well with our partner ecosystem, adding entity data and Tech Mahindra as new certified global partners. The investment we've made in these segments are paying off, and we're well positioned to capture additional market share and scale. We now count 180 customers as Dapp customers, which we define as having four or more applications or an enterprise-wide DLA. These customers have embraced digital adoption and are reaping the benefits, and the benefits are monumental. We recently asked IDC research firm to conduct a thorough objective business value ROI study and I'm proud to share the findings. The study concluded that on average, over a three-year period, our customers experienced 494% in ROI and estimated payback period was only five months. This is massive. They found that as a result of faster ramping time for employees, faster adoption of new software and features, and a reduction in business errors, employee satisfaction increased by 48%, and an overall revenue grew by over $41 million for the customer surveyed. I'd like to bring a separate example forward. One of the largest retail commercial banking customers in the U.S. has embraced digital adoption to its full capabilities. Dapp has been central to their digital transformation and technology modernization project, including one of the first deployments migrating 250,000 employees to a new HR system, where their goal was to focus on a robust self-service support for all team members and deliver the platform with minimal training. After accomplishing this, the customer rapidly expanded their use cases, become a full-dap customer, and scale their engagement with WalkMe. They now have a strong WalkMe center of excellence in-house and deploy WalkMe on 37 applications and growing. Nearly every employee is engaging with WalkMe with over 40 million interactions just last month. In 2022, based on the customer calculations, they translated to a direct value of over $44 million. WalkMe is solving a multi-million dollar problem in some of the most complex and secure environments. And we're just getting started delivering this vision to organizations across the globe. As you see, we're highly committed to our customer success. Through these times, we must focus on delivering our best and producing value to our customers. Our commitment to them is second to none. I'd like to take this opportunity and introduce our new Chief Customer Officer, Sunil Nagda. Sunil has joined WalkMe to lead all postal functions, including customer success, services, and support, and will be extremely focused on customer needs, driving retention, and overall customer satisfaction. Welcome to the team, Sunil. DAP is a mission critical for organization now more than ever. In Q1, Gartner featured Dapp and WalkMe as key supporting components in the recently published Innovation Insights Workstyle Analytics Report, one of the top 10 innovations profiled for Gartner in 2023. Workstyle Analytics helps drive digital and organizational change management via derived insights. WalkMe was the only Dapp vendor named, again, proving our leadership in the market. WalkMe was also mentioned in Gartner Business Quarterly Review, mentioning DAB and work style analytics as two of the tools that have the most impact on the future of work. Which brings me to our product. I can't be more proud of our R&D teams for the recent launch of WalkMe Discovery. This is an example of great agile execution. WalkMe Discovery helps organizations unlock the visibility and consumption of their technology investment. In times like this, It's super important for every CIO and department leader to be in full visibility and control of their software spend and utilization. We launched a global campaign on May 1st to offer WalkMe discovery free of charge to new and existing customers through the end of the year. We're enabling our sellers to expand their reach and our customers to expand their value with WalkMe. In a recent product release, we've shared a glimpse into the future of work, a fully automatic tech-to-action engine empowering any employee in the world to simply type what they want to do and see it done automatically for them on top of any enterprise application. We believe this is the key to the future of automation and work. For the five past years, we've been developing and training our DeepUI AI model that understands user interface like a human does. This is our core technology powering most of our products. We are fulfilling our promise to close the gap between human and computer interaction. WalkMe is constantly improving our GUI AI model. It is the most advanced in the world. Just in 2022 alone, we process over 6.5 billion interactions between people and software. Imagine the accumulated knowledge distributed to every employee in the world. Type what you need and walk me understand who you are, what you're trying to accomplish, and does it for you. Hyper automation at its best. We are using three engines, intent, orchestrator, and generative automation. Intent, understand who and what the user wants. Orchestrators, connect to our UII database and compose the relevant fields. Generative automation by using our GUI model does it for the user on top of any app without any API. We are super excited to continue working on new innovations and the future of work. I'd like to acknowledge that the tech to action engine is still in the works and will take a bit more time to fully mature as we start to work with design partners to better it. Nothing excites me more than great technology and great execution from our team. These are the innovations that will drive WalkMe, DAP, and the future of work to the next frontier. Before I pass it to Scott to give some insight from the CRO organization, I want to reiterate how excited I am from the future of WalkMe. We continue to develop our proprietary technologies, embracing the cutting-edge enhancements to address the challenges that organizations face today and the challenges that will arise tomorrow. We're growing the value we're delivering at scale to global organizations, and we're doing that while building a profitable and scalable business model. I want to thank all of our employees, customers, partners, industry analysts, and other ecosystem partners for their continued dedication and support in helping make the digital experience simpler for many people around the world. With that, I'll hand it off to Scott.