WalkMe Ltd.

Good morning, and thank you for joining the WalkMe first quarter 2024 earnings call. I'm John Strepa, investor relations for WalkMe, and today I'm joined by Dan Adika, CEO and co-founder, Scott Little, chief revenue officer, and Hagit Yanan, our chief financial officer. Before we begin, a few housekeeping items. First, we are continuing to incorporate a video element to help showcase our technology and some of the great things we're achieving here at WalkMe. I encourage you to go to our IR website, ir.walkme.com, to watch live or a replay, which will be available following the conclusion of our presentation. Second, for the Q&A portion of the call following our prepared remarks, if you would like to ask a question, please raise your hand in the application or press star 9 on your phone. I'll call on each person and unmute your line. At that time, you will also be prompted to unmute yourself either through the application or by pressing star 6 on your phone. 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 this section titled Risk Factors in our annual report on Form 20F filed with the Securities and Exchange Commission on March 18, 2024, and other documents filed with or furnished to the SEC. See our press release dated May 22, 2024 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 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 our 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 the nine GAAP financial measures and key performance indicators, including the reconciliation tables, see our press release dated May 22, 2024. With that, I'll hand it over to Dan.

Thank you, John, and good morning, everyone. We're off to a great start in 2024. We're seeing strong execution across our strategic priorities to accelerate our top-line growth. We ended the first quarter with revenue of $68.6 million, which is the high end of our guidance range, and a strong expense management with a non-gap operating margin of 6%. We generated nearly $17 million in free cash flow in the first quarter alone, which was more than all of 2023 combined and nearly doubled what we generated in the fourth quarter. We laser focus on delivering the best experience to our customers. We're seeing a very positive trend on all aspects in our customer journey. The first quarter marked the biggest renewal quarters in terms of ARR up for renewal, and I'm happy to share that we had our best renewal rate in the past six quarters. We improved our quality of service in every aspect, from support to service quality through our customer success organization. And this also shows in our large customer base. We now have 42 customers paying us over $1 million in ARR, and we're seeing customers in that cohort expanding with us. are DAP and over 100K ARR customers. Although we did not demonstrate an increase in number of customers, and some of it was due to account consolidation in our system and some app consolidation on their side, but overall, the total ARR for both segments grew as we continued to see big expansions. We are accelerating growth and we are on track to double net new ARR by the end of the year. I'm very pleased with our performance this quarter as we are continuing on our path to delivering on our plan. In addition, GenAI has created a huge growth opportunity for WalkMe. As innovators, we're strengthening our position as a critical platform for organization to successfully implement GenAI into their most critical workflows. I spent the last few months speaking with our leading customers and learning their approach to GenAI. They recognize the huge opportunity and change in the market. Enterprises are rushing to infuse Gen AI in every junction of every workflow. The success and scale of AI transformation will be the success of inserting Gen AI capabilities into the daily processes of every single employee right in the flow of work. BCG is telling their clients that 70% of their AI efforts need to go into change management and process related to people. Think about it for a second. In order to truly make Gen AI work for employees, they have to know what AI can do for them and its capabilities, how to build the right prompt to get what they need, and they have to know when and where to use it and how it fits to their daily workflows. This is just too complex. If an organization wants to get Gen AI in front of all of their employees, they must find the path to success. And that path is to be contextual in the flow of work and make AI seamless for the employees. With that, I'm very proud to introduce WalkMeX, WalkMe's new Gen AI contextual co-pilot. It's a completely new experience for the employee in the enterprise. WalkMeX allowed them to use GenAI capabilities in the flow of work on top of any workflows. We combined the power of general-purpose LLMs with our proprietary DeepUI technology that understands visual interface like a human does, and we created a new kind of copilot, an always-on copilot that offers proactive AI assistance contextually in the flow of work. We're basically making AI real for everyone. WalkMeX offered AI power capabilities such as AI answers, assistant reading, generative writing, form validation, and text-to-action automations that only WalkMe can deliver across any application. WalkMeX can also work with any other co-pilot service. We believe that every company in the world need WalkMeX to ensure the success of their GenAI strategy. We've started using WalkMeX internally and it's showing improvement in our support and IT departments. We're now exposing it to select few customers and exploring endless use cases together. As you can hear, I'm very excited about WalkMeX and about the future of WalkMe. For 12 years, we've been building thousands of co-pilot experiences on top of the best enterprise application. And now, GenAI has opened so many new use cases and so many new possibilities for us. WalkMeX and AI transformation will be huge expansion growth drivers for our business in the future quarters. We're officially launching WalkMeX at Realize, our annual customer and partner event, on June 18th. But we're not stopping here. For years, we've had the best attendant contextual automation thanks to our deep UI technology. And now, we're adding backend automation as well. WalkMe will be the only dApp in the market to offer full attendant and unattended automation baked right into the platform. This opens up a completely new dimension of use cases for our customers. They can now create workflows that will trigger backend action aside with UI actions, a full automation experience. With our focus on people-first, our contextual DPUI technology, GenAI capabilities, and now backend automation, we are strongly positioned to disrupt the hyper-automation and RPA market. Stay tuned for upcoming releases as we start incorporating these capabilities into our platform. Overall, Q1 has been the perfect kickoff to what will be a very important year for Walkme. We have so much innovation rolling out now, and with a very strong balance sheet, we are making strategic investment. And I'm sure our powerful technology will forever change the way Gen AI and automation are operated in the enterprises. From quarter to quarter, it's becoming much more clear to me that the opportunities for WalkMe are endless. We are driving the adoption of new technologies and powering them with automation, data, and new experiences. We are laser focused on accelerating growth and doubling net new ARR in 2024. That is our main KPI for 2024. The company is producing cash and committing to making the necessary investment needed to accelerate performance. We already moved 25% of R&D to focus on our AI products and will be investing in acquisition of additional AI talent and functionality. These past few quarters have been a big transformation journey for WalkMe. We tackled every process and every challenge and proved that we are a strong and resilient company that is highly adaptable to change. I want to take this opportunity to thank our employees for all their hard work and amazing execution. We are truly one WalkMe. And with that, I'll hand it over to Scott to discuss our go-to-market.

Thanks, Dan, and good morning, everyone. I'm pleased with the progress we made in the first quarter, executing against our plan and making another step towards our goal to double net new ARR in 2024. We had a good quarter across the organization with strength in our partner, public sector, and enterprise businesses, as planned. Last quarter, we highlighted the change in our go-to-market approach by leading with workflows and bringing the ROI that our platform delivers into the conversation across the lifecycle of our customers. From pre-sales to implementation to customer success, customer value and ROI are the common themes as we focus on the workflows that organizations use to execute the business. Our sales force is engaged and enthusiastic about how this is resonating with our customers and performing throughout the sales cycle. We are very excited about the expansion opportunities we have in front of us as we're increasing the reach of our platform and meeting our customers where they are seeing the biggest friction within their organizations. WalkMeX is a fantastic opportunity as workflows are increasingly re-engineered to include AI in the updated tech stack. Our capability to deliver context for a customer across their application environments is unique to WalkMe. This innovative approach to UI recognition using our patented DeepUI technology is amazing, and I've never been more excited about the opportunity in front of us. On the partner front, the Alliance and Channels team continues to improve and impress. I'm pleased to share that we've added Cognizant as a certified WalkMe partner. With their global reach, I'm confident this partnership will yield fast results and value. We continue to see growth in the number of our partner employees that are being trained to sell and deliver our platform, which is a great leading indicator of the demand that they are seeing in the market. To highlight this point, we recently learned from one of our global SIs that nearly one-third of all RFPs they are now receiving include a digital adoption platform as part of the requirement. On the public sector side, we had a great quarter, which included a number of expansions, as well as a very important land with the state of California DMV. Likely a welcome sign for those of you who drive a vehicle in California. We continue to grow our pipeline from both new business and existing expansions, and we're well positioned to execute on our growth goals in 2024. In the quarter, we added new customers such as Ithaca Harbors, Aptian, and Shift for Payments, while expanding our relationships with great customers like the Department of Veteran Affairs, National Marrow Donor Program, and TPG Telecom Limited. as they continue to see the value and ROI of our platform directly impacting their business and driving the adoption of their workflows. I'm incredibly proud of the team and the progress we've made. With that, I'll hand it over to Higuit to review our financials.