WalkMe Ltd.

Thank you all for joining the WalkMe second quarter 2023 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 Strepper, Head of Investor Relations for WalkMe. Thank you.

Thank you for joining our second quarter 2023 earnings call. I'm John Strepa, head of investor relations at WalkMe, and today I'm joined by Anadika, CEO and co-founder, Scott Little, our chief revenue officer, and Hagit 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 expectation 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 20-F 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 August 10, 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 the financial information prepared and presented in accordance with GAAP. We use these non gap 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 August 10, 2023. And with that, I'll hand it off to Dan.

Thank you for joining us today as we review our 2023 second quarter results. We had an amazing quarter, and I'm super excited to share all the progress with you today. When the trending macro headwinds began a few quarters back, we set a strategic company goal to be free cash flow positive and a profitable growth organization. The outstanding work of our finance and go-to-market teams to develop a sustainable growth model focused on operational excellence has paid off. I'm beyond thrilled to share that WalkMe has officially ended Q2 of 23 as a free cash flow positive company, two quarters ahead of our expectations. Our unit economics are excellent as we continue to advance our path to profitability with our non-GAAP operating margins of negative 3.5% and getting to nearly break even in our non-GAAP net income. Despite lingering global headwinds, we are seeing positive trends all across the business. Revenue was $66 million, just above the high end of our guidance range. In our most strategic enterprise accounts, we saw positive expansion outcomes, growing our million-dollar-plus accounts to a total of 38. It makes me extremely proud today to share these achievements. Our path to profitability is clearer and closer than ever. With over $300 million cash in the bank, strong unit economics, improve internal execution, and advancement in AI and product innovation, WalkMe is well positioned to increase market share and make the right investment as we shift our focus towards profitable growth. Turning now to our strategic growth drivers and customer value. WalkMe is all about the digital adoption of technology. Now, as enterprises are flocking to adopt new AI-powered technologies, the demand for change management and employee productivity are on the rise. In the public sector segment, we saw a great success in Q2. I'm super proud of the team as we've expanded our deal with the U.S. Army to over $8 million in TCV, and we're seeing an increase in deal flow pipeline from other agencies. Our partner ecosystem strategy is working, and we're laying down the foundations to distribute DAP globally, both directly and to our partners for years to come. We're seeing positive territory expansion and further investments in DAP, This quarter, we expanded our global agreement with Deloitte to now include New Zealand and India. Deloitte is a great example of global organization that started utilizing WalkMe in 2019 as a customer and then as a strategic alliance. Today, Deloitte is a thriving WalkMe center of excellence and has deployed WalkMe to nearly 100 applications internally that touch all areas of its U.S.-based businesses. Realizing the value to their own employees, Deloitte formed a strategic alliance with WalkMe in 2021 to deliver digital adoption solutions to their clients, and the partnerships continue to grow globally since then. Our Chief Customer Officer, Sonil Nagdez, and our Chief Revenue Officer, Scott Little, have been working hand-in-hand to increase value to our customer base. Our customer success organization is going through an important transformation with one thing in mind. the success of our clients, and we're already seeing the impact. I want to share another great example of how DAP is impacting large enterprises. One of the largest retailers in the U.S. with both a physical and digital footprint deployed WalkMe to ensure their call center agents consistently and accurately applying pricing, discounting, and return credits to customers. Their objectives were to increase policy compliance by prompting agents within the flow of work to follow procedures, provide consistent service, and increase speed to resolution. The customer expected to save $1 million in cost from their initial project. I'm glad to share they've surpassed their goals only in eight months into their deployment by 2.5x. with an estimated $2.5 million in savings only in one use case alone. Being able to show value in the DAP journey is essential for our path to expansion as we continue to execute with the top enterprises. Turning to AI and product innovation. The hype and increased awareness of recent AI advancement have created an emerging tailwind from our enterprise customer base. They are accelerating their focus on employee productivity and organizational efficiency. Enterprises are seeking to understand software usage patterns, take immediate action, and deploy smart experiences to their employees in the flow of work. As they rush to implement new AI solutions, like in the past with digital transformation phase one, they must rely on adoption of their employees and staff to reap the benefits and ROI from their investments. Compliance and observability of AI are top of mind. Our upcoming Shadow AI feature set, embedded in WalkMe Discovery, will provide organizations with visibility into which AI tools are consumed internally and empower them to take immediate action right on top of these applications in the flow of work. Human error is the number one cause of data and security incidents. The WalkMe for Security and AI database offer organization tools to take immediate measures and build guardrails, notifications, and alerts embedded right inside their enterprise employee journeys. They can now ensure no sensitive data is being misused, company policies and compliance are met, and avoid potential phishing attacks as they scale the use of the technologies. You need a strong data strategy before having an AI strategy. Data hygiene is the key for success. Without clean data while training the internal AI models or AI applications, the results will be bad predictions, bad suggestions, bad calculations, and bad outcomes. We offer a wide array of data validation and hygiene in-app capabilities to ensure that every single employee engaging with our daily software workflows is on track entering the right information. Expect more AI innovation in data validation and hygiene from us very soon. WalkMe is distributed and visible via web, desktop, and mobile to all of our customers' employees. We are scaling these assets to offer AI knowledge access. We are releasing our next version of Enterprise Search powered by large language models. We launched Enterprise Search on Workstation last year and already have millions of employees engaging with it to find organizational knowledge and get the job done faster. By embedding LLMs, employees will be able to extract any information in the flow of work. We are also adding AI-powered features to our own product to enhance the WalkMe build experience, including the launch of our new action editor coming in Q3, currently named XBuilder, that will make the build experience more innovative, faster, and simpler. More on this in our next earnings call and product releases. We've been heavily developing our proprietary core AI DPUI technology for the past five years to understand every employee interactions with every enterprise application. Just last year in 2022, we captured over 6.5 billion employee interactions from leading enterprise applications. Our AI DPUI technology is second to none. The power that WalkMe has from being distributed to tens of millions of employees and understanding how they interact with enterprise software, give us a unique offering in the AI landscape as we continue to leverage this technology for all our largest product innovations, including our enterprise data products. I'm extremely excited to share that our new data AI offerings of WalkMe Discovery and User Interface Intelligence, UII, have seen growth of over 100% quarter over quarter in Q2. This is one of our fastest-growing product lines. We launched the AI-powered WalkMe Discovery product to GA last quarter after closed beta to help drive efficiency by unlocking usage data and visibility of all enterprise applications and highlighting areas for potential improvement. I'm a big believer in integrating AI to drive operational excellence and employee productivity. We've been using WalkMe Discovery internally to track progress of our KPI of becoming an AI-integrated organization, and I'm glad to share that 35% of our employees are already using AI tools on a weekly basis to do their job. I look forward to seeing deeper AI adoption in the coming quarters. UII, user interface intelligence, part of the AI data product line, leverages our AI deep UI technology to automatically identify all the critical enterprise processes within an application, specifically data entry, and highlight frictions, errors, and wrong data entries. One of our valued G2K customers has a robust center of excellence that's committed to improve employee experience and reducing technology friction. They are currently live walk me on over 80 applications that span all areas of the business. This G2K customer is extremely data-driven and has enabled UI intelligence for success factors, an application used by 270,000 employees globally. They are keen to understand employee trends and friction points to provide actionable advice to internal business owners about what they can improve, how they can maximize the value of their solution, and remove barriers of completing common tasks. Last but not least, We continue to train our AI DPUI technology to develop the next generation of our AI offerings, what we call text-to-action automation. The potential to magically automate any action on top of all enterprise applications will have a profound effect leveraging generative AI in the future of work. We are evolving our current conversational automation offering, such as our ActionBot smart walkthroughs and attendant automation, into one new unique offering. I'm absolutely confident the text-to-action will drive organization towards hyper-automation faster. More on this as we gradually start rolling out use cases soon. It's been an exciting quarter to say the least, and I look forward for the upcoming months as we continue to scale towards a profitable growth company. As our journey upmarket continues, our teams demonstrated their ability to execute on the company strategy. We delivered a great quarter advancing our commitment to being cashflow positive by two quarters, which encourages me on our continued journey up market. We're in the middle of this journey and there are a lot more things to achieve. We're focusing on enterprise and large enterprises with an emphasis on our delivery partners and customer success. While our subscription revenue is on par with plans, we're going to see that service revenue going to stay flat as we transform the way we deliver success to our customers. Hagith will elaborate in her section. Finally, I'm thrilled to welcome our entire ecosystem to join us on October 25th for Realize, our annual event. We're excited to gather our customers, partners, and our professionals to share and explore the future of digital adoption and how our customers are harnessing the power of data, action, and experience to make their organizations more effective. We'll be highlighting the future of DAP and how we think AI and our unique take of tech to action will drive our industry to the next level of value realization. With that, I'll hand it over to Scott, our CRO, to share more details about our go-to-market efforts. Scott, over to you.