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spk_0: good afternoon my name is to me and i will be your conference operator today at a time i would like to welcome everyone to the eight by a fiscal second quarter twenty twenty two earning conference call i probably am new to prevent any background noise after the speakers are marked they will be a question and answer session of you like asking questions during this time simply pass darko by the number one on your telephone keypad of you like to withdraw your question press the pound key think you at that time outrun a call over to keep patterson vice president of investor relations you may begin your company thank you good afternoon today's agenda will include a review of our second quarter results with date site chief executive officer and samuel wilson chief financial officer following are prepared remarks there will be a question and answer session before we get started just a reminder that our discussion today includes forward looking statements about eight by each future financial performance as well as it's business product wrote strategy we caution you not to put undue reliance on each forward looking statements as they may involve risks and uncertainties that may cause actual results to very mature really from forward looking statements as described in our risk factors in our report filed with the fcc any forward looking statements made on this call and the presentation slides reflect our analysis as of today and we have no plans or obligation to update them certain 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 of those non gaap measures to the closest comparable gap measures is provided a within our earnings release and our earnings presentation slides which are available on eight by eight investor relations website at
spk_1: investors dot eight by eight dot com
spk_0: with that i will turn the call over to our ceo dave sites
spk_2: good afternoon everyone and thank you for joining us today before we begin our review of the quarter please join me in welcoming plate patterson for a by a she joins up at an exciting time other x kept version is resonating in the market and as we work toward our goal of one billion in revenue a milestone few software companies achieve let's turn to a review of our second quarter and an update on our progress and plans for the future we delivered revenue above high end of our guidance range and non gaap profitability again if you do we enter the corner with over five hundred and fifty million and i are are of eighteen percent from a year ago the strength of our revenue performance combined with continued operational before point of the crop the company resulted in sequential and year over year improvement and are non gap gross margins and on gap operating margin we deliver positive non gaap operating margin on par with operating cash flow for the third consecutive quarter let me provide some context on the market trim and are competitive advantages the hybrid workplace is the new normal i believe we are in the early in a of a matter of migration to club a communication as the market is demonstrated customers are demanding a single vendor integrate a platform for communication and collaboration and customer engagement we are proud to be delivering on and it's critical requirement today a biotech that unified the employee and customer experiences by eliminating silos and speeding information flow for an enterprise allowing businesses to be more agile and responsive to customer name are differentiated clock technology has been widely recognized by the marketplace we recently announced that a by has again that included as a leader and the gardener magic quadrant for unify communications as a service worldwide this is the camp year in a row and take that the longest running leader in the us and que we have then recognized as a challenger and the gardener magic quadrant for contact and are the servants were the seventh straight year a by is the only you have magic watch and leader also recognized in the context and are the service magic water this recognition and are growing base of more than two million business users is a solid testament to our leading position in africa
spk_0: in may of this year i outlined a vision and our focus on for strategic pillars these are one expanding the platform advantage to winning together with partners
spk_2: three expanding the bay and for driving operational excellent the clarity of purpose allows us to gain alignment and prioritize or investments to achieve our growth unprofitability profitability objective i'll use the four pillars to frame or due to business highlights first we continue to aggressively expand our platform advantage through innovation we introduce new features your ex guess platform and expanded our at caf lucian to new countries and territories your i panted global reach technology we also deep and or integration with microsoft came the child discuss shortly platform enhancements deliberating to to included the introduction of a by front desk a new x cat composed experience that provides a great first impression for organization as a adapt to the new hybrid workplace front desk and empowers the receptionist with advance contact center and you see capability within a personalized experience for high volume interaction with it's revolutionary product a reception it is no longer time to location or hardware or in person visitors affectively frame the front desk we also expanded our global footprint adding dedicated cloud dvr to storage in canada to further enhance quality of service and provide canadian organization with superior business resilient and data sovereignty adherents this will open up new vertical markets such as public sector healthcare and financial services we announced advanced enterprise capabilities for large video meeting including and have moderation polling and he mogi reaction that's further strain firms or video meeting solution for enterprise customers both new and existing customers are embracing are access version and technology for example the nhs national services scotland which handles over one million calls per month supporting scotland vaccination help lines and booking services expanded their a by act caf investment through their original purchase and typical que one twenty twenty one they're more than tripled or investment and next gas expanding every quarter and now total more than two thousand five hundred new chassis and over one thousand three hundred z cassie the fernando zoo wildlife alliance the nonprofit conservation organization that operates the san diego zoo and san diego zoo safari park selected a by act caf as a single vendor integrated communications platform supporting over fifteen hundred and two roy and eight and they will use speech analytics and quality management to enhance the customer experience and help train and upskill agents or a by a voice for team solution is an important component of our at caf platform strategy and i believe will provide the most feature rich enterprise integration in the industry since the launch five quarters ago we continue to drive consistent innovation with the integration there now goes well beyond direct route he he keeps as far ahead of the competition a do to we added shared present you see and feed users call recording and a by front that support we're seeing more organizations provide their distributed workforces with the ability to interact with colleagues and customers from anywhere using teams and we recently announced that we had surpassed one hundred thousand business users recent of have a baby voice from microsoft teams customer land included the city of rochester minnesota they needed to replace an aging on fran of communication system to provide better support for their population of more than one hundred and twenty thousand residents they selected a by x cast for business resilient and tight integration with microsoft team to support their more than eight hundred employees another local government when was the london borough of hundred low which provide services for more than two hundred and seventy thousand residents they selected at caf and a by voice for microsoft team to consolidate disparate system on a single cloud platform to support more than two thousand and eight hundred employees we continue to see strong demand for the see path portion of our portfolio are focused strategy to stand our leadership in southeast asia has resulted in new customers and strong growth in that region well lit quarter included top value one of thailand biggest ecommerce platforms uses the a by as on a i for marketing campaign to send promotion the patiently and reliably to customers additionally we had a kuala an army channel insurance technology company operating in indonesia and thailand would use of the a bite at them as a few i to keep customers and insecure secure on the platform with one time passwords and notifications additionally the a us base provider of electronic health record management software turn to a by a gypsy of the servants are jazz to embed a secure hit by compliant fella how video solution for it's customers another way weeks and our platform advantage is blue global expansion and you to be delivered the industry's first integrated cloud phone and contact solution for multinational organizations with operations in russia we also added japan and porto rico charge service coverage area this follows our interest three first edition of china and fiscal que one are clearly infrastructure now delivers for pft and replacement services and a market leading forty six countries and territories our ability to deliver high availability and reduce cost and complexity globally make our platform ideal for multi national organizations and example is uk based in skate plc which is the leading independent automotive distributor and retailer operating on a global scale and thirty six international markets they selected a beta kappa with over three thousand seats for are on the channel contact center and unify communication capabilities including speech analytics and global coverage international revenue now accounts for thirty one percent of our total revenue compared to twenty six percent one year ago when he with partners is our second strategic pillar promoting fully engaged chow community allows us to expand our reach to new market segments and geography more efficiently and que to be expanded our go to the channeled through a strategic distribution agreement with the next corporation a leading i do distributor inflation's aggregator for the technology industry the an active partner community a bars and as speed and system integrators in north america are now empowered to offer a paid at caf and to their customers our reseller chow metrics show our success at increasing partner engagement and productivity the number of active channel partners increase fifteen percent from a year ago and a are are from channel lead transactions increased thirty six percent year over year examples of the channel lad x cast customer when included housing group holding each of the largest european insurance intermediary group in the world they selected eight by a at caf for integration with microsoft teams and salesforce to support three thousand employees pet supermarket is a leading pet supply retailer with over two hundred stores in the south eastern united states they like get a bite at that sports robot context than our capabilities and lower total cost them ownership to support the communications and engagement need of my the six hundred employees our third pillar is expanding our speed stall base of users growth in our base was led by another record quarter an enterprise with a are are up thirty three percent and a number of customers with more than one hundred thousand dollars in a are are increasing to eight hundred and some was one enterprise represented more than half of our air are for the first time we also thoughts banded deployments and existing customers including srs distribution which is one of the largest building products companies in the united states and it was grown rapidly over the last two years a by has been their communication partner through this period with at caf now the party more than six thousand employees another longtime customer who had expanded their commitment to a by platform out a leading digital solutions from and a customers and two thousand and nine the company continues to enhance client engagement to support it's growing consultancy business and most recently added fifty per is that more see to support your two hundred and thirty four agent contacts are the range a multi channel retell are selling products in the home garden and leisure categories with over one hundred and eighty stores in the united kingdom and ireland they selected a by a for for pod capabilities and possibility to enhance communication and collaboration to improve customer experience the for strategic pillar is driving operational at points throughout the organization our dedicated ferguson that area has contributed to our improvement and non gap gross margins which increased from sixty two point six percent to sixty four point two percent sequentially as well as continued operating leverage we remain committed to achieving profitable growth we also have pointed out and gleason to our board of directors allison as a globally recognized cells executive who was previously as v p of cisco america has overseen a twenty five billion dollar revenue organization
spk_3: she has led multiple top performing cells organizations by focusing on a customer first mentality we are excited to welcome out into the board
spk_2: in summary since i joined a by nearly a year ago we have strengthened our leadership team aligned are are in the embankment average a massive market opportunity and created a cpt culture built on the core tenets of customer first product first and team verse the migration to cloud based communications just beginning and we are well positioned with differentiated technology market leading global coverage and a unified platform to optimize customer and i'm play communication leading industry analysts are embracing rx cats vision it has been a team effort and i want to thank everyone at a day for their contribution we appreciate your continued support and look for keeping you updated i will now turn the call over to sam thanks dave and good afternoon we are pleased to deliver results that exceeded guidance and showed improved operating leverage key drivers will better than expected performance from our product categories with both x cat and people air or up more than thirty percent year over year total revenue for the quarter was one hundred and fifty one point six million dollars an increase of seventy percent year over year and above are one hundred forty seven point five to one hundred forty nine million dollar guidance range he path and catholic thinner usage running was stronger than expected during the quarter is offset weaker and point shipment in other right avenue due to ongoing supply chain issues looking observers service revenue regenerated one hundred and forty two point four million dollars an increase of eighty percent year over year and above are one hundred thirty eight point five two hundred and thirty nine point five million dollar guidance range pedal a or are with five hundred and fifty three million dollars a quarter and of eighty percent year over year
spk_0: at the beginning of the fiscal year we announced that we were exiting the whole feel portion of our people his business last fiscal year twenty twenty one whole filthy their services contribute roughly fifteen million dollars in service rather you and essentially no operating margin a business causes roughly a three percent head when in f y twenty two revenue growth for the second quarter of this year this part of the business did not contribute be revenue down from one point one million dollars last quarter and approximately three million dollars in queue to twenty twenty one
spk_2: second quarter not get gross margin was sixty four point two percent as expected and higher sequentially as service revenue accounted for more significant percentage of total revenue and we are now fully exited are low margin wholesale filthy best business dawn gas service revenue margin increase approximately fifty basis points over the previous quarter to nearly seventy percent and without children can you basis points for q to twenty twenty one nadya other revenue margin came in at minus sixty point six percent for the quarter an improvement from minus twenty seven point seven percent a year ago and sequentially better than the mighty mighty point six percent reduce and point shipments were factor in the margin improvement
spk_0: in total gross profit dollars to twenty four percent year over year as we focused on the higher margin portions of our business that is that class and continue to drive unit cost of movement in part looking ahead to the third quarter we expect overall gross margins to be flattish sequentially turning to the second quarter operates by much as we continue to advocate it already mainly the card center capabilities within the egg cat platform and it failed in marketing while keeping a cough type
spk_1: total spending as measured by non gap cause was already filled the marketing plus dna was up forty percent year over year below or seventy percent total revenue growth we expect total spending dish grow slower than total revenue over a multi quarter trend allow an estimated profitability
spk_0: on and on yet bases and exit the year at approximately two percent non gap operating margin
spk_2: not get operating margins increase to one point three percent for the quarter turning to balance sheet total cash for sure the cats and investment and of the second quarter partner one hundred fifty six million dollars excluding a point six million dollars of restricted cash to balance was what i'm fifty seven point eight million dollars a greasy approximately four point six million dollars quarter to quarter cash from operations with a positive five
spk_0: point one million dollars for the quarter cash from operations was better than expected unsolved collection we expect a minor positive cash from operations and overall cash bird in the third quarter before returning to positive cash generation in the fourth quarter one item i like to discuss and liabilities the food revenue which with nearly twenty five million dollars during the quarter and up one hundred and three percent year over year as we move towards building in advance of service delivery rp old approximate by them could be million dollars for the second quarter up from five hundred thirty million dollars in the first quarter as a reminder we made a pa he changed with fourth quarter earnings to conform to industry norm and now include are pure from contracts with turn one year and greater
spk_4: turning to the financial outlook as near to the third quarter we continue to focus on making the change your discomfort in our first quarter strategy update including exiting the low margin see bad for business investing and fill them are going to increase capacity and brand awareness of act cat and making incremental or in the investment focus on accelerate
spk_0: revenue growth in africa taking order to do cow we are establishing guidance for the third quarter of fiscal twenty twenty two and in december thirty one twenty twenty one as follows
spk_2: we anticipate total revenue to be in a range of one hundred seven million dollars to one hundred and fifty four point two million dollars representing approximately twelve the third year of your growth that continued supply chain issues with and point shipments and expect other revenue to be down slightly quarter of a quarter and year on year we anticipate servers revenue to be in a range of one hundred forty four to one hundred forty five million dollars representing approximate thirty to forty percent year over year growth we expect to be operating margin positive on and i get papers and roughly flattish quarter of a quarter
spk_0: combining our our performance for the second quarter with outlook we're raising our for your guidance for fiscal twenty twenty two and march thirty one point why to as follows
spk_2: we are raising our total revenue outlook from six hundred and four to six hundred twelve million dollars to arrange of six hundred eleven and hundred and fifteen million dollars representing apart from fifteen to sixty percent year over year growth we're raising our service revenue range from five hundred and sixty four million the five hundred and seventy two million to arrange a five hundred and seventy
spk_0: two point five to five hundred seventy six point five million dollars representing about my fifteen to sixty percent year over year growth and we're maintain your guidance of for cute dog get operating margin of roughly two percent or due to result in our trees outlook for the year demonstrate our continued progress towards our long term operating model which we discussed in our business strategy data may we remain confident you're making suitable investments to drive week celebration in our growth and continued margin expansion overtime with that thank you and let me turn the call over to the operator for question certainly at this time i would like to remind everyone in order to asking question pastime then the number one on your telephone keypad oh pastor just a moment to compile be que les roster
spk_2: the first question is with peter in the van with evercore i as i please proceed hi that shrug that calling a repeater levine and so much for taking the question i'm looking to get a better sense of what demand trend on your and look like heading into town to your twenty twenty two to eighteen months we thought
spk_5: nigel secular kill a to the industry but looking ahead are resorting to people have more normal one week
spk_6: and arm and are you expecting to continue
spk_4: with you
spk_2: on i think going into town twenty twenty i would say there's a the deal with an employee to the last two years can remain in place i'm as we shift the x cast we're continuing to see improvements in our demand generation pipeline the branding the david launched around that has been really popular and successful in three analysts for giving a lotta credit for it and so i would say in general on no change was slightly better not cheat you see dark and upright the man that remain strong it now over half of our business going in over thirty percent and and were like your seen in the market is still transformation of legacy the cloud were word literally it only you know talented team for percent cloud penetrated at this point so when we go into account the way we set up when in the market is i with are single platform of combining you see and cc and bringing that over from a layer thing environment to cloud environment and giving up differentiated solution additionally our global footprint is fairly unparalleled in you know you see that through arm
spk_0: expansion and forty six countries and church isn't literally added the most populous nation and are all and emma largest geographic nation in the world and and the only you see player to do that and then thirdly or microsoft teams
spk_7: capability and integration and the line us to twins i think wifi be a number of in a strong momentum i think of the underlying is that legacy the cloud transformation of but additional secular strong points for man
spk_8: like you
spk_7: your next question it's from the line of michael to run the place fargo thanks appreciating the questions just in canada
spk_0: through just that group dynamic spoke we're seeing here
spk_2: the appreciated that for your guy comes up the touch but the key three guide is a point or two later the we've got it cute you for initially implied que for guides just a little bit of a decline in in the growth profile there as well as is that the shape you were expecting when you initially framed a targets this or appeared you just remind us how much of an impact the see past as this has there and it's some if there's a seasonal profile be mindful at all just looking through the at the growth dynamics that receive play out over the course of the year michael sam other guy one i'm so yes this was the profile of be expected drug year we can expect them the celebration throughout the year mainly driven by the fact that the whole filthy path business was up fifty million dollars last year but it profile is growing throughout the year so i said has publicly another other forums that roughly if you thought about with in fiscal twenty one
spk_7: the hotel he bad business is being your two million three million four million five million throughout the year then when you when you are you down a year of your basis with the a larger deceleration throughout the year and so we we have been expecting that would you expect the acceleration of revenue as legal under fiscal twenty three driven by the roll off of the he passed business also driven by
spk_2: our improvement the were making demands generation feels capacity new product development of those kinds of things we expected some of things that we look at the games already been doing restarting the land and from a things that are coming on the road now pulled will arrive before then it's helpful sam just one more just funny or are by segment metrics the intercept enterprise a our growth still looks healthy the that market innocent be sequentially are a little a little lighter i know mid market a particular as been more consistent so you're talking about sea bass are some of the phone shipment and point of issues that you're running into is there to resist those would hit the mid market segment of more directly or their search use cases are other elements was in that segment that might be driving the difference between what you're seeing about that the two segments the market enterprise
spk_0: what i think we've in the shift to enterprises purposeful an hour transforming the company i'm focusing on our core acts cast vision the combination of you see mcc and focused on enterprise customers on we do not continue to master go to market resources
spk_9: and to enterprise customers that's where you see the growth there and it's important to note that as we target x guess customers these larger customers that combine you simply thing we had a doubling of our accounts size when we sell acts cast their stickier longer
spk_1: entering customers we have higher when right so you're saying a transformation of our go to market activity as we focus on the upper the higher end of the market and which will fellas up very nicely as we go into fiscal year twenty three okay and then on the topic of then point so that the supply changes were having and i think is pretty universal now not a whole bunch of companies to fighting just really doesn't affect a or are on that really contracted mimi subscription revenue where it does show up though always are other revenue was it your nine point three million was down sequentially pretty note
spk_7: noticeably
spk_0: and as part of our forecast right we are expecting be and everything we see right now to supply chains going to rectify itself
spk_10: you know it lead to the next quarter at what kind of visibility and so it is a bit of a head when on total revenue got it thank you for taking the costs thank you
spk_2: your next question comes from the line of met a marshal with morgan stanley your line is open thank you and i can have a question for me was one and just click around half an hour and would draw a crowd and and and guess what channel that as for you guys are the kind of activity or shame ash and then second chance to show nine hours of he said kind of concern i believe headwinds in back i just called que three and an ongoing i'd have and that fifteen miles on the second half of a or versus first off thanks hi know day baltic the first part of that on the microsoft teams direct route and integration
spk_11: the team's opportunity that was a very significant just and five quarters and launch for now or hundred thousand users and attaching and enterprise
spk_2: communications platform into the productivity suite and teams mean a messaging platform with that is a huge opportunity of they are mapped majority of those users are not on enterprise communication today so expanding i think that's why we seem that accepts we've seen today and we go to market me when i would say lurch board key element flair one is a superior and you'd swear i am the second as powerful admin tools third is that we gone power all the employees and forth as we go on and win with the channel and those areas and of just go little deep on each of those went the and user experience we continue to add functionality for end users directly into the team's desktop and mobile apps are we've recently he added recording and our front desk capability add that are he adds to very robust functionality which already included things like presence and aftermath and back as well as a good boy smells so that's a powerful value added capability for those users second is you know coming with really powerful admin tools the world class call quality management reporting and analytics that you get with you by a platform and then third is that core
spk_4: the proper to power in all employees not just knowledge workers but also front line workers contact or agents receptionists and doing that
spk_2: globally across all country is that an enterprise compete and and third and you know the other is winning and with the channel and
spk_12: we continue to go to market strong that the channel there's actually a good blog on our website
spk_10: from october with her soft cap who adopted accessories and our what's with teams integration the how they can make those work together previous flavor the you the ncc solution so that's something that you feel made by website art and then on a second part of your your question i think we as you're looking for it and follow the if i got rot in the second out the twenty one the last year
spk_13: the whole hotel keep our business produced like nine million dollars in total revenue broken down about four million eighty three and five million in queue for fiscal
spk_10: we fully agree to that doesn't nothing you one of fiscal twenty two last quarter so the euro revenue this quarter and it's about a three percent head went on your your growth
spk_6: great that is fine and it
spk_2: context own terms
spk_0: how much we can sue consider that had one to the
spk_14: conflicts are so weekend
spk_15: what are okay
spk_2: members there any had and live yeah yeah it is a couple percentage point the had went to a or are grown some of those the path pick give me our criteria for customers in the criteria which is six consecutive months of a minimum revenue threshold so that a couple percentage point the having to be fair either the right it's i can give it to a problem i add that the couple got gunpoint the growth and it gets for every why i mean just as effective as the a bit about the lot of think about holidays what we're at them as messaging going on and then a little bit about for or five chinese new year at little harder
spk_16: but not
spk_2: i like it
spk_17: your next question comes from the line of brine conflict the need an airline is open
spk_2: next question great progress we're national front's walker's true i guess progressing in different that geography is whether it's europe and i yeah it's real strength in the uk starkly in your heart your channel channeling all much gone and international markets for shit
spk_15: asher third a number of areas where we continue to focus into when internationally we've been in the uk
spk_0: as for many years and twenty thirteen then we'd been increasing investment we've also seen brand
spk_2: in recognition and and monitored months referral and improve in that market and we have a great product the with our ex care
spk_18: the solution additionally
spk_2: three our international kid believes we've also have a strong public sector penetrate and furthermore we know i made the decision to focus our see that business in southeast asia added showing strong benefits as we densify ourselves presence and key countries we talked about wins this quarter in indonesia and thailand and that business continues to thrive in those areas with both you know expansion of voicemail few minutes them as solutions
spk_11: so we're happy with that those expenses we see that is all contributing to our international a growth in my now with thirty thirty one percent of our dollar business
spk_2: a scary thought your next question comes from the line into keen with clear security your line is open thanks taking a costing you guys from your order on gave as will approach a new one year anniversary of jail populate you to get a little close to what is it your changes the political landscape like you joined a higher benchmarking own barbara yeah absolutely i've taken at work was taking the staff the relief that a up to being a great company going forward so you know i'll take a few steps the one with at formalized our vision around at caf family branded that it's gotten great reception in the mark yep place already today from aware as well as prospects and the channel and we're doing things today that you know can't be done by competitors and i can go into front desk in a little bit but that how that's just a fantastic example leveraging are actually cast positioning we've also you know we will change how we develop products so in looking up front that that was a whole transformation of how we are whole aren't a cycle of having low class you i involving are installed base and customers very early in the prophet and having a near flawless launch of a capability that really combines the use the ncc users and create a great ability to when you know demo isn't gonna become more than a demo for for years from now and get a lot of attention from
spk_0: my prospects and help when deals
spk_5: we'd authorship the gg am spending to enterprise as evidenced in our continued growth in that segment i talked about the focus of the path in the southeast asia and i'd really focus the company on a customer first culture which is bleeding now to three quarters in a row of reduced turn
spk_2: so on and and one thing you know sam and i'm birthday recommit it are committed to key ground rules around profitability and growth and investments in the right areas of generate long term long lived through avenue and high margin revenue so i think all the these transfer my two steps are creating greater focus you know moved up the way from empty calories on him to high protein mills and are setting us up for a long successful
spk_19: during
spk_2: three and then i found a plug for like a channel you talk about the contribution from dancers and how that ramp being and then how it all a decade elect relationship to were given a gym or times we're on channel i think we talk about been over thirty percent year over year growth we have strong alignment across both agency model as well as our var wholesaler model which i think you're you're referencing and that regard so we've been happy we don't break those two out separately we've been happy with the progression of the it is a differentiated capability that we bring to market and allows us to plant and both segments so overall you see it isn't that strong driver of our overall growth and what we're happy a progressive a your next question comes from the line of willpower the theory your line is open hey as a question is is charlie early gone for low assorted dig into the sale keep the eyes of i could help kind of the pipeline look relative to last quarter and the lady know churn as well retention out of those too much pair out to last quarter yeah thanks charlie we i i mention that are churn have improved for three quarters of a narrow as and that we've focused rg gpm efforts on our core at caf buyer of that and enterprise mid market enterprise buyer that combining you see and see where seen strong growth and access gas pipeline as well as the percentage of deals let closer to act as captain that's why you see that continuing to grow rapidly as we shift the business and that becomes a majority going into next year
spk_20: new business that will lead us to you know acceleration of growth
spk_0: as though
spk_5: that revenue is no better in an ambulance one one just a larger per account that retention and higher when rates for us hello those are the key metrics of were tracking internally
spk_2: as you know it's helpful none of the just a quick question on pricing news are getting a call out into the changing and pricing on they get her seat paid for you can't do anything you have to call out any change in there now i would say that may i get this question we from investors i as our enterprise business grows we do see a small decline in our pursuit pricing driven by the fact that enterprises just have volume pricing arrangement and there by larger per customer size out for the margin wide area why does is all fine gone up on an apples apples day this we don't see anything abnormal in terms of pricing other than the fact our deals are getting larger and so are proceed price comes down a little bit and literally you know plays and chara power in all employees with our x cast version of been able to have her ex one threats fate price mean the out we had one customer this quarter that them six different scuse between actual on and next day without all the way from the simplest scared to activate our most complex contact and are scared and we really look at giving the best value and utility eat our customers by been able you get their percent of into those key pricing targets and for us it's really about the overall revenue per account in the retention of those accounts so the out i think any movement within and of lower and voice is mine are to our overall growth directory and and strategy and you don't think that
spk_5: your next question comes from the minor feet a new guy with imagine how please proceed i this is alex came on for a city pie guy i just had a question on that a competitive environment up microsoft recently announced the first party for channel four hundred three sixty five customer service to talk about a full contact center solution
spk_2: and i was wondering what are your thoughts on how do you see the competitive environment involving not a farmer yeah well with wifi i think our economic had a merman where you combine you see and fifi and there really are very few offerings and that and most are i'm in a competition in that regard comes from people that are partnering between a use the and fifty solution so i have a in one platform that we can create differentiated solutions have our for foreign direct fade pricing capability even ability to make the match users as well well as unique persona
spk_4: keep a belly that were launched such as front desk
spk_21: are all you know proof point
spk_0: our at cash strategy that allows us to be a leader in that market and and maintain leadership so i think you will see over time people trying
spk_22: to create more those capabilities and follow that vision
spk_23: it is because the what the customers fundamentally want but by being first and early in that market were able to keep innovating and expand our capabilities and and maintain leadership guy and ozil in the past the you mentioned here teach speaking legacy providers like a by at a motel for some big deals can you give an idea like or percent of your wins today are large like if you could placement and also like first a year ago and also like what percent of wins i just um guinea my marketshare brush your betters yeah i'm i don't think we've said to fit people to we replace the for my but the fundamental opportunity if bill moving legacy to cloud to get
spk_2: customers onto a modern architecture that really helps them optimized productivity of and and really you know deal with not hybrid workforce that you're thing today so i would say the vast majority of the deals are legacy replacement bills
spk_23: you obviously have some you know cloud displacement that occurs but be the bulk of the opportunity of of his legacy decline in an interview with pretending we're over eight hundred seventy customers that are you know enterprise over a hundred thousand in our or that a function of landing those customers so big one and over probably from a
spk_2: on solution into that market or they'd lands and expand up into that size is there are growing business so i think it's like we don't necessarily look at it that way i think we look at look doing that for our customers with that customer first my half the enemy naturally sort of grow up and become bigger customers gotta thank you your next question comes from george that new with crackdown on your line is open thank you give you guys get credit at enterprise connect probably the most helpful piece of the entire conference i thought was your predicting the future of communications panel and some of the survey work you dance i just want to address to the points that came out of that in the how your adapting to that number one seventy two percent of
spk_24: companies already are starting to use a i in their communication
spk_4: awesome just i just want understand how you specifically or differentiating on the ai side and then secondly seventy five percent
spk_0: we have a businesses moderately to extremely influenced by external consultants and i just want to make sure i understood the breadth of what the that what was meant by consultants i think this is getting to you're addressing pretty aggressively the gardeners of the world along with the channel partners but i just want to make sure i understood that correctly
spk_1: they charge and thriller
spk_2: in depth question i'm glad you lie about it at either sorry i call them agatha get that first part i'm not sure that the second part for the external to dump the on the first part that out ai and communication
spk_23: i use see a lot of opportunity and ai communications from transit capability that your name and you know transcription translation of is one area that you see additionally quality management and a sentiment analysis is a key area
spk_25: one that we lead an answer that that that the bs like that we have an eye contact center solutions today and i think at when you envision are x x caf yeah
spk_0: jan how do we take those capabilities are in one side of the house you fear see the and take that across the entire enterprise so that's the type of work we're doing and taking a i further throughout the product offering that will improve overall ability for
spk_15: for enterprise move to to manage employed productivity
spk_2: two route one customer interactions more effectively throughout the organization and get people to an expert faster to allow the enterprise to be more agile and nimble and how how they respond to their customers and more effective yeah i think that to the exact definition was just that using our product to check internally that are expert on the topic and and she didn't have a deck state in front of are right this second either so i'll get you that offline it was as he presented it but i would family we are proud of the fact that we have ten times you cast leader in at gardener and what seven times challenger on on the carpet center i am so if you're divorced or and others i look to i think that's important yeah we think that a lot of enterprises use that and so we do spend time with third party analysts we've had analyst the then for them on a regular basis and am those along with our channel partners are definitely influencers on the buying decision
spk_26: gotcha side for the of log question thanks for the answers
spk_2: but they story the next question is from a lot of kin for with up in hiring freeze for feet i
spk_27: historically i think your voice the sports company wide it was pre monolithic product at the cia oh level now you have a different services on so he six to one customer is the industry waking up the fact or customers wake me up the fact that they can have your mix and match and have
spk_2: so many more on price points and features and functionality and you know where are we in the whole process you think yeah absolutely because you have different needs throughout your organization whether the knowledge workers or front line worker or contact on or agent so been able to right size your benefit the you're getting with the cough that you're playing that is like a natural
spk_28: and tendency for those buyers and by bringing it to them didn't one example is our teams integration where you can have a different price point with your team see that integrated that may utilizing a different matter dream then your use utilize the
spk_2: a by and point but then having things like reception after having an informal few later not accounts receivable and and other groups that are within your organization have higher level capability so that that we envision our pricing it's really around persona is within an enterprise and right sizing that organization but at the same time getting one fundamental enterprise hisham platform with some of the core admin capabilities of you know quality management and disability across the organization power in all countries with and having a single integration framework that can go into your workflows or your crm across the organization so i i think it a powerful message is though it's what
spk_0: as an aired
spk_2: i'm like a sad with you know not only through are selling ecosystem doctor are channel partners and where the industry analysts and you'll see more and more movement in that direction across all providers ultimately so you know our goal dollars to keep innovating the unique press known as like front desk or that are examples of executing of that vision so as you look at it as anyone close to a products are you know you know how many years would have take anyone else to come to catch up you think around one ear and sort the have well you know if you look at contact on our magic quadrant of in all of them
spk_6: five or so key players i'm actually in a they've all been in that magic quadrant for almost ten years so those are some key capability there and combining that with the core you see capability that's that's what we're different chair being and both magic quadrant and been a leader in that you seek lagon and the only leader
spk_2: an easy fifty quadrant so i think that's what you thought some movement or attempt a out consolidation which hasn't happened at this point
spk_29: but our ability to be in there for ten years and the time we spent integrating those products
spk_6: is a significant capability that allowed us to offer things like her pricing
spk_0: the next question in some james brain volume blame your line is open that's interesting questions i'm just curious any channel and you're better you may change intermediates and official channel and and how can you change the channel partners on the last couple years since the world's to didn't small the
spk_1: didn't second reached in the margins i became a touch on any get a mistake yeah shaun years martin this quarter i'm sure how do you think about days can for teams the be willing to the she inhaled it simpler recorder but are generally speaking people tracking right direction and eat and watch t shirt target yogi the years regrets martyrdoms like
spk_30: so i think that chama varmint
spk_6: competitively pretty consistent although i i would play in i'm in talking with us on our channel partners as they and starfleet carry multiple categories and you see feel is now the becoming a number one source and they're selling which is new and contacts on earth that money
spk_4: and until at the top three or four so those weren't enough fairly their their number one thing they carried in their bag but it's become like keep the channel over on that lacey strong alignment
spk_31: with are both and you know domestically and internationally with channel at finance within the margin or it on and then i'm pretty gross margins armed but i think thinking am i prepared march i will second to continue the trend higher if you think back to our a key one launcher model were saying seventy percent gross margins on the next that get one a half years from now on
spk_0: think we can continue to trend that direction any given quarter it may be down just based on product make by the general trend should be up we continue to focus on improving it and the i jokingly life lot said last conference call the thing any be higher other those getting fired and game continues to maintain that the case
spk_6: the as i guess that today your next december corey can feel a bit more
spk_4: keep a child is giving polyhedron out on he had a cooler for a week a key to ghana little figure may accelerate percent next year
spk_2: yeah i said adding adding flattish got a part of that positive underlying programs underneath them i've got an increase of the bad business those to roughly out that i could see a move a few a few days you know few dozen places pointed direction
spk_32: great thanks
spk_0: your next question it's from right to free them with beatty i g your line is open i this is rachel on from that been waiting for my question at just on the and or high strength a square after you to that aircraft he can you finding their colors and how much this is being driven by he caf bundled the old and then knowledge of more broadly think a higher differentiating you're you're a cat offering at that height level just a clarification digital see past model views are three cats bundled deal to speak see cast okay to act as get a look at captains clear out dinner but it but i guess is clearly driving our enterprise drive
spk_2: ah sorry so ah
spk_4: don't get through the married a price strike we do see it we do see resonating in more and more mid market airport customers and a big mentioned in kind of the question about what he done has he been here as we push our demand generation and our marketing efforts fire and we get the awareness out there that is definitely helping the situation in
spk_33: terms of continue to grow enterprises as it is the focus of the company
spk_34: okay and an interpreter
spk_0: any he had opportunity might be seeing ads within your team direct route and customer
spk_6: well i would say most of the see that he cast that we see and it's height of customers we land are interested in our contact hunter product right though they may they may be went from day one of the puck luck what about how for which by the and alone you cast microsoft paint integrated you
spk_0: gas and context and are all in a bundle and then they have a number of customers that are buying pm today with an eye toward adding context and or the future if you're coming to us because they want that global capability and they want that mix and match capability across and then lastly we just add more feature functionality this corner our product launch would you
spk_35: the pretty revolutionary quite brought use microsoft teams enabled so you can now have a receptionist with an underlying themes infrastructure do some pretty amazing stuff and so that kind of added functionality teams environment is also bringing back and i don't want to be clear i don't exactly know what to call out because the front desk
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