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spk_0: good evening my name is joanna and i will be or conference operator to the me of each time i would like to welcome everyone to to eat i eat incorporated fiscal third quarter twenty twenty one earnings conference cause of now like to turned over to the korea hi done said of investor relations good afternoon and welcome to a a third quarter fiscal twenty twenty one or and conference call speaking on our culture day it gave site chief executive officer and samuelson chief financial officer before we get started just a reminder that are discussing today includes for looking statements about a played future financial performance as well as it's business products and growth strategies including the impact of the covered nineteen pandemic we caution you not to put undue reliance on it for looking statements as involve risks and uncertainties they may cause actual results to very materially from the for looking statements as described in a risk factors in our reports filed with the fcc any for looking statements made on this call the first or analysis as of today and we have no plans or obligations obligations update them in addition some financial measures that will be discussed on this call together with year over year comparisons in some cases were not prepared in accordance with us generally accepted accounting principles or gap a reconciliation and is known gaap measures to the closest confidants just measures is provided in earnest press release and powerfully presentation deck which are available on the investor relations website
spk_1: and with that on through nicole over two days later victoria good afternoon everyone i hope you and your families are healthy and safe and flee to speak with you today or my first earning fall with a by a i will cover business highlights from our third quarter results and sam will walk us through financial results and guidance for the fourth quarter and for
spk_0: you out and share my observations from my first fifty days and initial thoughts on the company's next level address
spk_1: i'll let me start with two three two three was a good quarter total revenue grew to one hundred thirty seven million a fifteen percent increase your of a year and above the high end of our guide and strange
spk_0: he drivers are the growth for strong demand for a bundle features and you as offering continued upmarket focus new logo acquisition gel contribution and improving operational execution are fully integrated feet and use a solution is a clear differentiator for us as a mid market enterprise organizations replace legacy unfair systems and shit employee in customer engagement to the class the industry continues to recognize the value of a sides fully integrated platform for the nice consecutive year garden and eight by a as a leader in the magic quadrant for unified communications as a service worldwide also in a quarter for the six your and around stars are named a by as a challenge or and the magic wasn't for process on our as a service
spk_1: of knows a guy is the only huge ass magic wasn't leader that is also in the contact center of the service magical obvious furthermore we achieved our fourth sequential quarter of and profitability
spk_0: we exceeded top and bottom line guidance improved operating efficiency and strengthen our cash positions
spk_1: with a clear line of sight to improving revenue growth and profitability and the fourth quarter we're waiting for your guidance and cash outlay for the fiscal year sam of speak to this and a moment now let me turn to highlights from quarter we are pleased with a success we seeing from our channel for strategy and upmarket focus of mid market and enterprise customers we had a record quarter of market with over seven hundred and thirty customers and greater than one hundred thousand dollars in a there are a twenty four percent increase your have a year this was a result of strong execution across cells marketing and channel and it combines products solution says fit for purpose for enterprise customers for situation for strong again driving sixty four percent of russians and for eight of the top ten deals and and five hours worth of forty six percent
spk_0: the channel came across all regions deliver their highest bookings quarter on record
spk_1: channel partners are turning to a base because of are integrated contact center and communication solutions deliver exceptional value financial customers or uk value added reseller or var routes market is the fastest growing segment was in our channel nearly forty percent of chow pipelines in the corner came from the uk bar community and the number of partners right a singles grew by seventy percent year over year
spk_0: we were also honored to be awarded for twenty twenty cnn uk cloud services vendor the year and twenty twenty check target archer award for best channel enablement program in north america
spk_1: turning to specific customer lambs we observed strong glass and new low dose of are all representing fifty six percent of new vaccine up from forty four percent last quarter without strong execution and all geography is an innkeeper articles such as health care retell transportation and public sector let me highlight a few recent examples in north america a notable when when see entertainment which operates chuck e cheese
spk_0: the number one family entertainment center with operations and forty seven states and fifteen countries around the world see the entertainer was looking to consolidate from multiple providers and lower their i see infrastructure expanse they needed a bender that could rapidly deploy a unified communications platform for the restaurants and our corporate offices they found a buyer was able to reduce overall costs and completely supplies are you see platform within four weeks an additional when it a seven figure t v the competitive cloud replace me with a medical office solutions provider the wanted an integrated see cast and huge ass solution that's that's marie claire is outstanding call quality and integration between his voice and context or platforms
spk_1: they selected a base deployed eight hundred us and one hundred and fifty ccs licenses outside of north america we also had many and for customer when a trusted fire differentiated uselessness and see cause i'm not offering
spk_0: a major example is ryanair holding your largest airline great
spk_1: ryanair connects traveler silver two hundred and forty destination from forty countries on a fleet of four hundred and seventy aircraft with a further two hundred and ten on order ryanair chose a by age to support their expected growth and provides more than six hundred agents with a unified us and see cast platform
spk_0: a platform will be used across runners customer service agents who will utilize our send us innovation to automatically laws all captain activity within the hour on additionally they will use our speech analytics and quality management solution to drive improvements in touch my experience and the hell
spk_1: the upscale there it's agents
spk_0: nest certain energy uk ltd the uk is largest independent distributor of field and lubricants they selected a by see casts and you cast platform to modernize communication with their customers
spk_1: a bible support five hundred context on our knees and and one thousand back office and the of a staff
spk_0: our solution allowed sort of to have a single operational details of their contracts and are functions and customer interactions another example of trump's my australia new zealand reach and with a tough multi national cyber security company they want to replace are mostly bender communication and causal center solutions with a single vendor solution
spk_1: i could provide a higher level of voice quality call rowdies and reporting globally
spk_0: they chose a buyer for combined ce and usaf solution and integration capabilities with the iron system the seven figure see the when it's for over eight hundred and fifty globally distributed business users and multiple contacts or locations across forty four countries
spk_1: as the initial deployment and has ample opportunity for future expansion the public sector in the uk also continues to be a bright spot
spk_0: or uk public sector customer base has nearly doubled year over year
spk_1: notable wins this quarter included nhs public health scotland which provide specialist national healthcare services and scotland's a sports the fourteen regional nhs health board they are responsible for managing vaccination help lines and booking services for scotland's covered nineteen response for like to read by see cast a new cancellations supported over three thousand three hundred seats can't community health a uk nhs provider of community services also selected a fight with four thousand seats to accelerate the digital transformation and improve customer experience new on college of further education was an important bar when with four hundred eighty seats secured to our partnership with virgin media business furthermore we continue to see existing customers adopt more a by a services creating a lot and and expand opportunities that will feel future read a great example is whole foods group a british retailer of car sites and enhancement tools camping and terrain equipment
spk_0: for selected a pi ce cas new ask for more than four thousand seven hundred seats and twenty nineteen and have now added an additional four hundred and fifty ccs seats across the uk locations the further enhance their customer experience
spk_1: and solve compliance challenges after several acquisitions another notable example of a sudden change t c deal with one of canada and europe's leading equipment service providers to place an order of approximately two thousand three hundred and on see cast and us seats almost always win or channel partners are critical to our success and i would like to thank them for their collaboration and support now i'd like to discuss the market success of our products
spk_0: the chance and you can funnel offerings continue to lead the way fun of contact center and communications represented sixty seven percent of us looking for to that were twelve thousand or more in a are on a are are from combo customers customers who have purchased you see and cc now represents over a third of total company air on additionally for the second quarter in a row combo customer a are good at twice the rate of mardi gras
spk_1: also i'm proud to say that more than two thirds of are still sells rats close that fondle you see see see deal last quarter
spk_0: the channel is also see the benefit of bundle dccc
spk_1: or start a dance historically soldiers as of now selling more ce cas the number of partners selling are bundled solutions iris over thirty eight percent year over year finally this week we announced a partnership with parents to enhance our see how often mean by adding additional integrated cloud workforce management applications for mid market enterprise businesses flow was
spk_0: yes is eight by eight voice for microsoft teams which continues to generate strong demand from customers want to modernize their tunnel off any platform which is less routing solutions from a proven newcastle he cast provide us the other opportunity is extremely large and a study we commissioned to hanover institute research found that more than three quarters of organizations are likely to integrate microsoft teams were third party so often he providers in the corner we added the ability to manage settings such as calling configurations voicemail call forwarding and logging in and out of cost is directly from microsoft teams additionally a by contact center is now microsoft connected contest center for microsoft teams certification program
spk_1: a couple of notable wins included a fast nine retailers which operates two thousand stores across thirty seven us face selected a by a first ability to seamlessly integrate unify communications with microsoft teams after a competitive are he's a by was deployed next and maturation of ten thousand us kathy's of which three thousand five hundred will utilize voice for microsoft teams to solve their need for a combined solution for both front lines and knowledge workers
spk_0: a large and a media is video one of the largest mobile networks of public accounting tax consulting and business advisory firms video has been working on a large scale digital transformation initiative and needed a communication platform that would enhance microsoft teams functionality
spk_1: they started a fire in the uk with an initial six thousand feet license for a mix and match solution across you can see cast and utilizing voice for microsoft and lastly turning to see a paid a fee i offerings are also driving news have to acquisition
spk_0: an indonesian government ministry selected a day as a seat that for buyer for an sms a supplication sport his job creation initiative to have skills with collar workers with an easily accessible learning platform
spk_1: or sms usage increase to one hundred percent quarter on quarter to provide critical services to citizens
spk_0: we also added support for take out on a mobile messaging apps with over fifty two million monthly active users and south korea the a by a chat app save the i now allows companies to reach customers across seven different services including what's that cyber and they start messenger additionally the google services or verify that some ass is now available to a by a business customers you are a by ethernet
spk_1: atheist to sum up the ios and enterprises are moving with urgency to the class are integrated platform sets us apart in the marketing continue to drive growth globally what's that let me now turn call of sam to cover the financial results thanks states and good afternoon we appreciate you joining us as we report the third quarter financial results
spk_0: i want to aggregate comments that i hope you and your families are standing safe we are pleased delivered results that exceed guides improved operating leveraged and reflect increase confidence in achieving profitability key drivers were better than expected performance from product categories you can see cast and see past and bundled offerings total revenue for the quarter was one hundred thirty six point seven million dollars an increase of fifty percent year over year and above are one hundred thirty two two hundred and thirty three million dollar guidance we're good sales maturity in a quarter unexpectedly hardware who sequentially at enterprise customers accelerated appointments and professional services were strong looking at service revenue generated one hundred and twenty seven point one million dollars an increase of fifty percent year over year and above are one hundred twenty four to one hundred twenty five million dollar guys total a or are was four hundred ninety four million a quarter ended up twenty percent year over year our strategic investments in the channel and particular of
spk_1: nation of the last three years are delivering strong results third quarter non that gross margin was fifty nine point six percent as expected snores it financially and driven mainly by products next non gas service revenue margin declined eighty basis points over last quarter to sixty six percent
spk_0: as we have previously mentioned sea bass margins are significantly lower than new cast and see cats margins sea bass usage increase you look for some holiday activities non gap other revenue margin came in at minus twenty five point six percent for the quarter of a large improvement from the minus seventy three point five percent a year ago and sequentially improve from the minors twenty seven point seven key drivers were continued growth in our professional services and a flex hardware rental program looking ahead to the fourth quarter we currently expected overall first margins to improve mainly due to better product mix and from sea bass uses returning to pre holiday levels turning to the third quarter operating expenses we continue to unwind global business to drive have improved execution inefficiency nine yard sales and marketing sensors improve the thirty nine point one percent of revenue into three two point two percent lower than last quarter the combination of leverage from our digital marketing programs awesome asian of media stand and moving from physical to virtual events has remain sending efficiencies we've also added domestic international sales capacity and had improved sales productivity non jeff hardy expenses were ten point seven percent of revenue in the quarter vs nine point nine percent last quarter we continue to prioritize investing in are differentiated technology platform advantage non yeah dna expenses improves to ten point eight percent of revenue in three from eleven point five percent of revenue last quarter we hope to gain further gene a advantage as we skills revenue and related operations maria operating expenses were down about one percent year by year while total revenue grew at fifteen percent year over year a reflection of tight expense management we expect our backs to be up single digit percentage year of a year in the fourth quarter nine get operating margins for minus one point one percent for the quarter the best we have seen and twelve quarters we believe we're clear line of sites and on yeah pretax profitability exiting march twenty twenty one quarter and future cash generation as a reminder to do timing a certain expenses each expense metric will not necessarily prove each quarter in a linear fashion our top of final metrics including pipeline coverage rates continue to be good and new logo growth was strong these results demonstrated that we're delivering solid returns on our previous investments in demand generation and the channel we expect to see further improvement in you to economics as we continue to optimize our go to market motions
spk_1: for nine gap pretax loss was one point nine million for the quarter ending december thirty one twenty twenty this was better than a minus three million dollar guided provide in october and a result of a combination of better than expected total revenue tight expense management offset by a currency head when i'm extremely pleased with how to team has been very diligent with
spk_2: each dollar spent
spk_0: turning to the balance sheet total cash for sure to cash in investments and is your third quarter one hundred and sixty eight million dollars excluding fifteen point five million a restricted cash balances one i'm fifty two point five million dollars this is the decline of approximately seven million dollars quarter over quarter and includes the corporate bonus payments we discussed last quarter or quarterly cash usage has improved by over forty million since the fourth quarter of fiscal twenty twenty we remain focused on further reducing our casper and and improving collections which continue to run ahead of expectations further we believe the better than expected questions is a good sign of coping related risks are manage double you're making steady progress towards zero net cash usage and expect to see further improvement in the fourth quarter staying on the topic of cash last quarter we discuss our tend to have approximately one hundred and thirty five million dollars or more in cash cash equivalents advertisements on the balance sheet of fiscal year at i am pleased to say that we are raising our expectation again to now over one hundred and forty eight million dollars in cash cash equivalents and investment excluding restricted cash the program improvements we have put into place are performing simply better than expected and we remain focused on being free cash flow positive in fiscal twenty twenty two more likely in a second half of the year one final item why do is that like to discuss a different revenue which increased during the quarter to over twenty million we have moved towards building contract in advance of service delivery and expect deferred revenue will continue to grow on a balance sheet one matches we are regularly asked about his remaining performance obligations or arpaio simply put rtl is the aggregate of differed revenue and committed revenue back lost my subscription services for the third quarter rpm was approximately three hundred sixty five million dollars up from three to thirty nine dollars in the second quarter and tutored forty five million dollars in a year ago period where nearly fifty percent growth turning to financial outlook as we entered a fourth quarter be a good sales funnel metrics and continued strong demand for bundles ucas and he casts solution
spk_1: and voice for microsoft teams are sitting there is a continued uncertainty in the macro economic environment as a result of the pandemic
spk_0: taking orders into account we're establishing guidance for queue for fiscal twenty twenty one ending march thirty one twenty twenty one as follows we anticipate total revenue to beat a range of one hundred thirty eight point five million to one hundred and forty point five million dollars representing approximately fourteen to sixteen percent year over year growth we anticipate service revenue to be in a range of one hundred thirty point eight two hundred and thirty one point eight million dollars representing approximately sixteen seventeen percent year over year growth and we just have a non yeah pretax loss of approximately eight hundred thousand dollars combine your own performance for the third quarter with the forecast for the fourth quarter we are reading guidance for full year fiscal twenty twenty one ending march thirty one twenty twenty one as follows we're raising our total revenue outlook from five hundred nineteen million to five hundred and twenty two million dollars to range at five hundred and twenty six point one two five hundred and twenty eight point one million dollars representing approximately eighteen percent year over year growth we are raising our service revenue growth range from four hundred eighty nine million to four hundred ninety two million dollars to arrange a for ninety three to four ninety four million dollars representing approximately ninety percent year over year growth and we anticipate non jaffrey tax loss of approximately thirteen point seven million dollars the final topic like to discuss discusses are i are metric sheet based on the feedback from discussions we've had with us or community we will stop supporting certain booking metrics after the fourth quarter earnings results are published we believe air or metrics or better indicator to measure business performance we expect to discuss the changes in conjunction with our fourth quarter results in may on a personal note i'm excited to see the positive impact date is already had his focus operational excellence and go to market experts peace will help position a paid for next phase of girls and profitability with that let me turn to call back to days a farm and closing i'd love to share some of my initial observations and thought this was not a fifty for me and i've been spending time with our employees customers and partners to better understand our strengths and where we can focus make meaningful improvements i have a deep appreciation respect for the strongest now
spk_1: injecting himself i joined a base because i believe we have an incredible market opportunity and found us additionally i'm very encouraged by the talent and dedication and seen a month the a by eighteen looking forward i see the opportunity to leverage my twenty years of experience to driving proved operational execution and transformation to help the company reaches for potential first as has been demonstrated for years now the resiliency of the business model really a special and the market opportunity is massive not many fast companies have reached the half a billion revenue size that a pace is today
spk_0: yeah we're just scratching the surface movie business communications to the class is one of the largest market opportunities areas period that transformation it's still early in yet recently we have seen a become a top priority
spk_1: the urgent adoption of want from anywhere has accelerated the time timeframe and which companies are making and planning to make the most and class
spk_0: and a is now see past communications as a critical component of employee and illness customers connection and business continuity having ban a pioneer in clouds business communications from the beginning a by as well suited for my product and experience days to capitalize on next
spk_1: salary the nature of his transformation
spk_0: second a by it has a unique technology to capitalize on this opportunity and spent a considerable amount of time with our engineering and policies and strategic business review meetings say for my initial evaluation on farfan in the platform and a five sweet solutions a guy it has done well in and
spk_1: rated platform leveraging a decade plus of innovation we've consistently been recognized and too far and magic quadrant both ass and see chess
spk_0: a tremendous business and customer base was all even built upon these products yeah
spk_3: and i find this and exciting positive there's even more we can do to fill the promise of cause communications to deliver an amazing experiences with us to mars
spk_1: in the corners and years that had will continue to be a touch my first part first and things first company that consistently delivers amazing innovation for the business user third
spk_0: we are focused on execution i've been impressed with the progress that has already been made towards revenue was and profitability
spk_1: and today's announcement you already seen some of those harder and results i do believe are further additional opportunities to become even more efficient and streamline prophecies we're reviewing everything from top to bottom including were to best focus our resources and drive stronger operational excellence building a highly scale of all decision streamlined go to market engine will be a strategic area focus and the coming quarters
spk_0: i'm excited about we need to the next level of us i'm confident that your focus on execution of are differentiated technology
spk_1: and it's unique massive market opportunities will progress down the right path to provide the best communication solutions for our customers and partners and will be recognized and rewarded for such our forward to discussing our strategies more in the future
spk_0: lastly i'd like to thank our customers and partners for their continued support and the a paid employees for making me so awesome what's that operator we're ready to take lessons thank you so much ladies and gentlemen you would like to ask a question to me and the number one on your telephone tea bad here for his question comes from the line of mass language some be the ideal sir line is open it's a good afternoon thanks for taking my question and they're welcome welcome to the team dave her debbie board and i guess and from of i guess my first question goes on you and that a press release from this morning and you touched on and quite a bit by the microsoft teams acquisition around integration and all the capability to build out there's no it in our work we continue to here and it's no surprise anyone the teams is is very well celebrated across the enterprise
spk_1: by to needed help us understand sort of what the opportunity is four or eight eight from in our total addressable market and how maybe that the margin structure of the contract structure is a little bit different than you are going in was much more the direct sales and i'm on on the accessories
spk_0: sure i'll talk to the market opportunity a fantastic well as far as and davis so on that
spk_1: what we're providing with microsoft teams are direct connect is an ability for our and our customers to utilize the microsoft teams and points with our market keep i'm all the captaincy tas offering and it brings and at an ability for customers like a passport retelling we talked about to utilize their current i had teams environment additional a because we have our unique and friday night direct route and him belly have been able to bring on also contacts and our agents and other employee like of mine workers and might not be in the team environmental create and can create a mixed environment for those customers and less for and quite a tremendous amount of pick up in that product i can valley we also launched and some capabilities are happy belated set setting from within teams and and the earth in and out of call cues so there's continue to innovate
spk_0: in that were put into that product to create differentiation and the the market town is large and there's a large ecosystem around teams chat or that has adopted today and through there
spk_4: pandemic and polyester that one hundred fifty nine daily users is the size of and rallies and we know commission that that research with hanover and institute said says about three quarters of those companies and institute third party integrations for
spk_0: new tests or telefonica capability so the market options large were meeting in the summer capabilities i am that are having success both in the channel and interact with customers of your on the topic as microsoft huge margins we don't see a materially different margin between
spk_1: mean i've teams seat and nine p m c i'm particularly me look at the bottom line on a top line there might be a slight decrease in margin but that's usually more of an effect that were selling to a larger company and are buying and large volume but when compared to the bottom line with reduced support those kinds of things it's you know it's effectively the same more agnostic either one and i think that's one of our great then of
spk_0: it is we want to do what's right by the customer not necessarily push them one way or another grade and then under the control center site i was they it's on attraction here and we continue to come across you know more and more usage more more focused on how you're going to meet a customer in the digital world as as everything ships you commerce given the pandemic
spk_1: what are what are you seeing as it's mostly still refund replace of have some more consolidation and multiple vendors that in a customer or you really start your seats and of next new use cases and a highlighted legislatures in scotland as one that are helping roll out the vaccine but pc and enterprises lot to stand up navy small contact centers were historically they've not heard anything of mass majority majority the market is still on legacy solutions and so bringing that to the cloud with a modern solution that combines both context center and unified communications is a massive opportunity and is where the balkans the new new logo acquisition comes from ultimately as and and i were in the early innings of this market transformation faster the changes of work from anywhere that's occurred and has created increased urgency and that transformation that we're still in that early phases of
spk_5: early test my adoption and man people planning the adoption of replacement of the older systems
spk_0: great thanks
spk_1: digital recorder thank you your next most in constant a line of flame young some stevens ninety million you guys on the results day by pre shave the color about what to charge a by lucky here i think your experience and skillset can help and naturally of groups i'm sure and in our as i found it invigorating as so far there's than a very warm reception from and plays and partners and customers even a master as as an analyst and part of that is there you know there is felt there was a good set right between myself and the organizations and less my knowledge of the customer and my operational know banned as well as go market expertise and i feel that largely
spk_6: plane out so feels like you know that right opportunity the right time additionally with the increased our nation of moving organizations from legacy to cloud as the profile of the whole category as have increased and that his crew
spk_7: rating even tremendous opportunity so overall feels like a strong
spk_8: combination of this fun
spk_1: excellent yeah that travel hot toddy retail and you mentioned certainly would be some of the first when it comes to mind is not requirements but dealt with the chow bookings in a quarter be encouraging love the and growth you saw their keeps talk about the composition of what your pipeline looks like name heading into twenty twenty one and other lot did your side of the next
spk_0: channels obviously an area with momentum and i think it's attributable to consistent execution and great leadership has that we have
spk_1: at a pace that building a strong relationships with the channel of we are seeing strong and grounds between men market enterprise customers and
spk_7: i would say you know pipeline wise is healthy and our goal is to continue that momentum and growth of our channel capabilities and mary that with our ability to help the channel closer skills
spk_0: and accelerate the penetration into that category for line you cassie chance offerings
spk_1: fisher dealer but as thank you
spk_9: you know snatching comes from the line of mutual last and need an inconvenience he landed don't things
spk_1: thank you and let me have my welcome did some glad to courtesy of blood so look as good as the channels he said something that so does that include involved with a lot in your career and it's just to give your assessment of near eight is in terms of presence in my chair on those the bar and master region side of the channel and it is see opportunity for them to increase the mindshare while also improving your in economics you know obviously there's been some species in industry historically with salt should assign channel presence that maybe wasn't that economically wise
spk_0: but in any case just your thoughts on on where you guys stand on the to two parts and channel
spk_1: yeah so like it's a john momentum and thing get and there's been no an element as catch up to some degree but i think there's also a preference that's been created at this point and and through consistent actually asks execution the economics we we like the economics we think there's a good mix the between challenge around today and warriors were encouraged by that's where we see additional fast and we saw obviously overall momentum side bar and uk continues to be as china or it's generally forty percent to channel pipeline and that
spk_10: the differentiated model as as it is an opportunity to continue as throwing that in that market as well as an opportunity to move into additional country the on the uk for them
spk_4: he said that makes sense and then question on the vip i business and one that was the she was done one of the thought to is that you'd ultimately be willing that out in some higher margin she agrees that isn't that would help the the margin profile just one actually have any of the answer to where you stand in terms of knowing that out beyond some of the initial
spk_1: the years when you bought a property
spk_10: yes i'm adding we met in our last quarter's call that we gave role some are limited availability of of the eighty i business into the us uk you have close customers are getting customers onto that honey still the vast majority the business in his in asia we expected to stay in asia get it continues to be
spk_0: in a robust growth there so i think stay tuned to eight it's definitely a source of differentiation of the only mix it with our contacts and of products that's great the german to jump on a meeting the constantly making question to once in your next question team's fans coming from the line of seen her around here nine johnson
spk_1: thank you and working days on we dived into teams please on it's been really incredibly do not grow from from microsoft really unprecedented an almost i think very cute it's customers when you cast at at this point can you talk about the benefit of customers using you cast with teams on what's your go to market strategy there and why would these customers use you over many other options that they have and i i can i get a unique i ideas and and lastly like to give us a sense of how important is you grow the worth your percentage growth incremental costs are you expect a year two senses yeah i'm onto the for for that so the you know been able to a light up the team chat application with a full blown you cast and to laugh and capabilities this is really kind of life at the broader strokes of what the opportunity as doing that and approach we're done with direct rowdy
spk_0: create for a high quality interface and doing that with a reliable high quality to turn them off vendor is really want to customers are looking for in that case i guess finally we provide the going to bring in things like contacts and items that is differentiated in unique in a dish in two other types of workers that might not be on that teams environment even in a large organization as you can imagine there's different types of deployments within those organizations that this allowed to make the match a customer to enable their entire organization with real time communications with that asymmetric communications platform that teams as providing i think i just add one small tidbit to a game are saying is you know what keeps you generally purchased by the t department we generally sell the i t department we offer a global solution it's a one stop shop with the direct routing we don't bogged down the and users in in the areas where there on teams and so it's a very clean solution for the actually department date yeah yankee apartment doesn't have that much it'll calm expertise or guinness a bunch of local carrier partners in regions in the world and so the next three i t department is you know it's one stop it's a great tcl and it's low are in a low manageable ongoing operating costs is just kind of a win win and i think the handled a research which suggested seventy five percent of all teams customers will be using a direct route inflation support that also so i think it's just us
spk_1: it it's one of those rare instances yemeni i think you're spot on microsoft kind of winning products
spk_0: on their our hands but the i key departments still need to deploy a globally and make it worthwhile and were just a nice hand in glove solution to that
spk_1: and so what's your go to market shouted you dare uncomfortable to be to grow for your to from them
spk_0: matt the easy answer to that is i want to say thanks to this get it right we hit the digital channels that does the regular sub agent master channels we've also a target a bit the microsoft channels because they are super interested never last quarter we signed up packs a which is a traditional microsoft partner
spk_11: ah we have some of the largest microsoft partners in the uk who are selling our product so limited to the mid market enterprise customers are little more channel focus so we hit him through the channels to the smaller customers we get him through the traditional digital route thank you
spk_12: you're not to mention comes from the line of jonathan keys and some insights intentions you ninety don't think
spk_1: grades as a for take my questions as am i had my i'm gretchen quarter and the welcome for days
spk_10: i wanted to ask about ah yes and
spk_1: if i've learned easier and august your you cast as suggested doing well why is it doubles i first saw them your sea bass talked about it
spk_11: you with a holiday and usage that he came back from previous clergy back it sound like huge rebounded
spk_0: so they brought down at the margins a yes some with with some that particular fireflies he talked about what your expectations in terms of the growth could be for that product i know you're trying to negotiate with them you other products offering for for it but it's it's still being sold separately it's to my completely bundled with with the other products are you can just talk normally she would you take the market rates would be for the grill for that father could be in terms of return deploy it in the second thing i wanted to on the public on it product should be your video has it he was actually pretty hot during the and image adrien lockdown he talk last year
spk_1: make this one for danger with your vision is for the video and the development for that we see that going thanks er right i'll also see pass and i'll give that that does give the video to today for your suggestion i'm honestly that's i look ice even as we had last quarter respect to gross margins be down sequentially i mean week do generally see a pick up in the traditional as an as portions of the see past business and some lower margin portions of the he passes through the holiday season and that was reflected in the financial statement of the correspondingly post holidays now you know expect that rebounding gross margins it is a fully integrated segment into our business i'm really not going to break out the growth rate separately for a whole host of reasons that family you know the it is a faster growing pizza the overall business right now we're very focused on next steps and on he gets great about having gave on board injured he brings a fresh set of eyes to it about the next steps that we want to take with that business and and figure out that those next that how they stay tuned a little that on them that last part your question will will get answered that not heard of it a video says today's yeah on video with our gypsy community out we've had a great opportunity and and launched a product costs on jazz jazz jersey as a service and it creates a different shade and approach to bringing video meetings in two other app developers allows organizations to embed a for meeting experience at a high level a few eyes in two different applications are worth was that the product that were put into beta we have over thousand and developers on it and as it's unique in it's ability to it as a simplified pricing model
spk_0: was based on monthly active users have that allows those organizations to implemented fairly risk free into their products
spk_1: additionally it has portability capabilities across different cloud environments sit on a number of differentiations that is an early launch of an interesting product that will be watching and
spk_2: looking and on and successor
spk_0: he takes great thank you
spk_1: you next nest in constant line is he intolerance ambient lighting jenkins okay thanks yeah hey data yeah congratulations great she was does chat again
spk_0: i guess you want to be questions jail for us i think investors generally is yours as you look for a walk out the a similar yell cloud communications industry leaders a growth rates on it
spk_1: just trying to understand what you're some the challenges are you face to a close that gap with some of that age she grows leaders doses your some of the advantages united like have over over some of the other leaders that least he spoke to the industry to change the channel at a given some girls are they worth the okay to validate that's else is i do you think about that of it yeah what what are the big challenge one of the advantages and in what helps you get close that gap of the next couple of years yeah well and and good talking and ah you know it with i think about it and few different ways or a different steps and and we are i'm going through in that says the organization and and the capabilities but always looking for opportunities to reinforce said fasten your seen a number of those even on a call that a with channel with uk was combination of see he seeing you see and and with microsoft teams so whether is strong muscles continuing to build stronger muscle and and effectiveness in those areas also creating more operating efficiency and the organization and is key and that's something that there's been great strides then and
spk_13: as sam as is a great via phone a have on that and as all over that but there's further options be world class and how we operate and and how we got to market how we serve customers that will help and in of smooth out and and create opportunities for muslims into those areas that are
spk_1: working well and then obviously improving go to market motions and playbooks everything from how we transition and how we message how we talk to prospects so all of those will help smooth out and created a strong drive train between you know applying
spk_0: force and seeing results in less in the market and obviously these things take some time and yes sell cycles and are you know nine months and enterprise of things won't happen overnight site working across those key areas i now will create
spk_14: sarah capabilities and as and opportunities to get market leading
spk_0: no grass growth opportunities
spk_15: okay i'm in there a decisive acyclic follow i just as i chose a focus on enterprise change your general at against including trends there he is very low hanging fruit to help improve your to go to their some be business owners one of the elements were like standpoint that's the are holding back to the overall girls
spk_0: i'm not gonna be a good growth from in as indian uk and obviously will that ecommerce initiatives to those the increase the number of look new logo to become bored and bringing them on more efficiently i'm if you will get a lot of the third party research bst business around the us is growing that you know robustly fast and were ad or above market growth rate so i think it's more about growing profitably smartly many days of i just putting up a wrong number look at our galaxy i think you're thinking things
spk_1: you know dismissed in comes from the line of the beans and grains your landing things great thank you and and the outbreak a quarter earnings and de la concerns of the candidates yeah as most was not have access you had him your prior lives and it's lucky to duplicate that performance or playbook here you know what did you see coming in day was that you needed to be addressed to the arrogance that kind of try to gets exciting for such a if you think i would go to further detail on the opportunities you see whether that be operational shot off soil
spk_0: partner for a what's top of mind to new out of each you know there's only that as strong as far as factor around the time with hiv aids and applying world class got a market capabilities i still i got a good fed and and opportunity and those are the areas and digging into the hang on sounds like stopped at this point those are things will come back as to you as investors or and lay out how we see that play now
spk_4: but those the opportunity to create greater greater capabilities greater awareness
spk_0: that are getting velocity those are all chat and general areas where will combine the strong product abilities with a world class get market can fully for the organization and an hour later to use an e d c and it's really different police called it extends to file for a by a he has released as a marketing selling expand swing states is to snow years and a managing
spk_16: doesn't says we kind of softly does he have turned the corner
spk_0: of it how i would say you're reading the cfl journals that's what we all talk about there look i i believe in corporate america there's been a very clear realization that need only to travel as much and do as much t any to generate business likely get in the past and i could get on both sides i think it's both hundred that the seller side and the buyer side so i think we're we're open to the idea of more remote workers and lower costs regions lower he any expenses suitably can find more engineering initiatives in more sales capacity and more marketing capacity and so i i'm i think i'm not unique in saying that that is definitely something we are looking at and it's something that we're looking at institutionalizing coming out of a pandemic thank you very much here next semester done some the line of my shelves and my companions engine things great things and i wouldn't dive into kind of the the and the new customer gallows that was greater than one hundred chance in know he noted that and fifty three deals with only thirty four it's i'm wondering now girls to screen and times as in a that needs your up selling and customers quite a bit
spk_1: is that in attacking are more see is that selling contacts and or secondary is that point where you seen you just a little bit of and i kind of your hands on anything new the old that come from existing them so all all started with some general characteristics and then i'll update pick up if you want to add anything so i i'd hate to be so obviously it's a little bit of all the above so government we add on more seats definitely we cross our self we land a customer you see nice across all contact center every once in awhile lana context and customer and cross sell you see i'm i mean
spk_0: wanted a bigger thing jersey moving of need market enterprise we do find his will frequently away and one region one buying center one division and they're that first get you know the first group that move to the cloud and in the rest of the organization catches on and we sort of get an overall of fine decision that gets made i you know looking through the gills is quarter and the last previous quarter i'm constantly surprised when we land the european division for us division of a multinational and then they want to roll out to asia they want to roll out to the rested or global operations and so i do think almost every one of these six figure deal that you'll see if you know crossed boundary cross
spk_1: a graphic cross our products in the end i'm getting on as i think when you see
spk_0: you know like hartford's where we already had four thousand policies and marinate a huge ass perspective and then are able to wait we have to be open discussion with the buyer and then are able to cross self a whole product category out with cancer center and now we added uniform fifty seats
spk_1: that's that's a great opportunity is we get to tell the story of the integrated product and little relationship that is are strong and the customer service that's an area that is quite critical yeah
spk_0: your next question comes from the line of my make my some nice man kept on my team he landed on things
spk_1: data as much as i guess dave on the if eight platforms you know it sounds like you're if you really that number one differentiator during the fall you see factors want to make sure that's right and and second can you guess you know sort of like concrete couple examples you know the customer uses his full stack in a what benefit do they get vs you know buying another platform uses it is an integrated approach the plan yeah so like disasters them because that's a long time and settlers of long as those products combine and and he legacy solutions of combined those there's the ability to have high reliability higher time from a single vendor and not create complexity and and chance for duplications across multiple vendors as opportunities
spk_17: to reduce total cost of ownership
spk_0: additionally things you know anything about ninety buyer as been able to have integration out of the box not having to integrate of the products as well as been able to maintain integrations and to corporate worth was ah additionally we see feature capabilities not only from manageability from and macerator bell south delhi to share presence or analytics across the product sweet for adoption usage and you know high a measurement of high levels of call quality and mosque line across with that stuff out there is such a ties into like several areas and as a hey innate fired the man that's existed previously and legacy and they're looking for also class cause any just click on a gross margin on the sort of other product line the negative twenty five percent is an opportunity to improve on that over them
spk_1: heck yes
spk_18: we didn't choose it pretty radically over the last year an evil we should move need improve it
spk_1: nina people every quarter depends on you know certain things that happened quickly around sometimes you know we have you some sales and fun as it larger enterprise hotels and the yes we get to have room to improve gross margins on the other any one
spk_0: i give
spk_4: your next question comes from the lines of catch him into a nice and funny you should you be seen i need something
spk_19: i thank you for taking my question ah congratulations again i see their any quarter my have a channel
spk_0: and downs like or seen this quarter it's and consolidation a master agents and var it has from the wondering if you know what's your take on in fact for said you know where you seeing your strain sat down a painting and how so in addition to me that's an seen i
spk_20: and force and my that partnership is and how it can grasping thank you
spk_0: yeah of a think that first part as
spk_1: in either
spk_0: if the price of there's consolidation image in the channel i think that's helpful a morale and we'd like to work with large partners and we have a reputation and the market for been easy to work with
spk_1: what lawn court over the partner community and that will continue to to for is going forward as well as we can't already getting known for having another differentiate and combination of you can see cass and continue to leverage that with the channel going forward finance this advanced cancer was a i never talked about a single partner without your permission said a little bit inappropriate put it on the us of our program in general it continues to roll out a something we're reviewing continuously to see what the next steps forward are
spk_0: but it continues to roll out and not much else to say
spk_1: okay eight gary carter died thank you captain
spk_0: you next question comes from the line of storage sat in some creed hum few lines of things
spk_1: thanks dave i may be the only one that goes back your weather stays as well so nice to work with you for a third time so i i did want to double click on the uk channels success
spk_0: now my question may be inappropriate based on sales last answer but yeah the virgin program along with the cloud feel program i'm just one are using give us a little bit better sense of why that has been so successful
spk_21: and charge and that i'm gonna sam was running our european operations flam flam yes i i i wouldn't give you specifics on virgin ministertony talk about the uk market was the company and to the uk market in two thousand and thirteen
spk_1: first through an acquisition than doubled down again in two thousand and sixteen we've been there for years we are you know that the teen it tells us where a number one clouds layer and he can play market
spk_0: and
spk_22: hm lot of what gates said earlier buyers successfully us were known for reliable were easy to do business with we figured out how do the bar wholesale dealing in the uk and all those intricacies of the business model there over time and i think it's a real competitive advantage for us because we that years of headstarts compared to air
spk_1: the one else there and so i definitely think that the var you mentioned in particular saw what our capabilities were instructed us for their next phase of welfare
spk_23: judging from in thanks yes
spk_0: thank you you're not mention on sunday line of genes means and museums near line joking
spk_24: thanks a good question just one clarifications in the car such and think you talk about expenses the up sequentially on one percentage one did he the clarify that and
spk_0: watergate still a competitive side in a what he sees the market yeah wish you success
spk_1: that you're going ahead and with similar competitors as you were before you buy it for deals on you don't and generally it in the videos and specially the larger ones know how many competitors are you saying that you have to be when bills
spk_0: i think the first one on take it's a scary thought
spk_25: i think what i said was we would be a single digit year for your ground for our backs in the fourth quarter so single digits your your growth in the fourth quarter for our backs
spk_0: great thanks i'm competitive landscape largely similar as you might expect the buyers the same as serve as you know meeting the needs or is a little more fast food or contacts on our side on the competitive and and fireside needs i'm not the only difference
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