ON24, Inc.

Good afternoon, ladies and gentlemen, and welcome to the ON24 second quarter 2025 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 7, 2025. I would now like to turn the conference over to Lauren Sloan. Please go ahead.

Thank you. Hello, and good afternoon, everyone. Welcome to ON24's second quarter 2025 earnings conference call. On the call with me today are Shirat Sharan, co-founder and CEO of ON24, and Steve Attamoni, chief financial officer of ON24. Before we begin, I would like to remind everyone that some information provided during this call will include forward-looking statements regarding future events in financial performance, including guidance for the third quarter and fiscal year of 2025, as well as certain third quarter and full year non-GAAP projections. These forward-looking statements are subject to known and unknown risks and uncertainties that could adversely affect ON24's future results and cause these forward-looking statements to be inaccurate, including our ability to grow revenue, attract new customers, and expand sales to existing customers. the success of our new products and capabilities, other statements regarding our ability to achieve our business strategies, growth, or other future events or conditions, such as the impact of adverse economic conditions and macroeconomic deterioration. ON24 cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statements to reflect the events that occur after this call. Please refer to the company's periodic SEC filings in today's financial press release for factors that could cause our actual results to differ materially from any forward-looking statements. We'd also like to point out that on today's call, we will report both GAAP and non-GAAP results. We use these non-GAAP financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. Non-GAAP financial measures are presented in addition to and not as a substitute for financial measures calculated in accordance with GAAP. To see the reconciliation of these non-GAAP financial measures, please refer to today's financial press release. I will now turn the call over to Shirat. Please go ahead.

Thank you and welcome everyone to the ON24 Second Quarter 2025 Earnings Call. I appreciate you joining us today. With me is Steve Battuoni, our Chief Financial Officer. Our Q2 results exceeded our expectations. We drove improvements in ARR performance, ending the quarter with $127.1 million in total ARR and core platform ARR of $125.1 million. Our in-peer growth retention was the highest in four years, supported by deeper customer engagement and expanded use cases. 100K-plus ARR customer base grew in Q2, signaling traction in enterprise segments with high-value accounts leveraging our solutions to deliver pipeline and business results. We saw continued win-back momentum from Boomerang customers, many of which are returning and increasing their commitment with us compared to their previous engagements. Our product innovations, including AI-powered ACE solutions, continue to build momentum. A mid-teens percentage of our customers are paying for AI-powered ACE, a number that has grown consistently since we launched it last year. We achieved positive adjusted EBITDA in Q2 and generated positive free cash flow for the sixth consecutive quarter, underscoring our continued focus on operational discipline. Lastly, total revenue beat our expectations, coming in at $35.3 million. We believe we have laid a solid foundation for improvement in our top and bottom line performance in the second half of the year. Our positive momentum is directly tied to the progress we have made with our strategic initiatives around AI innovation, enhanced enterprise go-to-market execution, and a commitment to positive cash flow. First, I will elaborate on our product and AI innovation strategy. Our AI innovation builds on our strength in first-party data. We have over a billion engagement minutes annually on our platform, and we have hundreds of thousands of webinar experiences annually. In the age of AI, content and data wins. Our vision here is twofold. One, moving from single digital events to omni-channel global campaigns, enabling our customers to create intelligent, personalized, and scalable content ecosystem from every live event they deliver. Two, helping our customers take the global campaigns and content that they have created on a platform and make it more discoverable in the new world of AI search and large language models, and to do all this in an automated, scalable way which drives measurable business outcomes for our customers. Imagine you've just hosted a 60 to 90-minute long-form live product event experience. For many companies, that's where it ends. But with ON24, the event is just beginning. We automatically turned that long-form session to transcripts blog posts, key takeaways, short-form video clips, even social content. Now layer on our multi-language translation capabilities. That same webinar can be translated and launched in French, German, Spanish for EMEA markets and Japanese, Korean, Mandarin for APAC markets. Suddenly, one digital event becomes a global campaign that reaches audiences worldwide. with personalized messaging and content tailored to each market. But we're not stopping there. Now we can leverage our AI-powered AI to hyper-personalize content. In this new world of AI search and large language models, content discoverability is critical. It's not just about creating content. It's about making sure that content is found by the right people in the right places, and increasingly, by AI Search and Chatbots. Specifically, our product and AI innovation strategy is anchored on five core pillars, which enable our customers to benefit from positive business outcomes, greater efficiencies, and global scalability. Let's touch on these five important pillars. First, our AI-powered segmentation and personalization solutions allow customers to leverage are unmatched first-party engagement data to tailor every interaction and create dynamic, personalized audience journeys. Second, ON24's AI-powered analytics and content engine delivers AI-generated content and nurture capabilities, enabling teams to turn that single event into ongoing nurture opportunities. With AI-powered AIDs, Engagement events are instantly repurposed into derivative content like blog posts, e-books, social snippets, video assets, and more, creating a powerful content engine that fuels multi-channel engagement, enables always-on nurture, and propels funnel velocity. Third, we just announced the launch of the first phase of ON24 Translate. Integrated AI-powered multilingual translation capabilities which will allow customers to localize registration pages, captions, and post event assets into 64 languages. We also offer solutions to translate webinars, allowing our customers to dramatically scale their business and drive global marketing campaign opportunities. Fourth, On24IQ. Our autonomous event automation and workflow manager is an intelligent AI assistant that streamlines event creation, session setup, and live Q&A moderation. These AI-powered tools streamline complex workflows by simplifying event execution and ultimately driving smarter, more personalized events. Finally, we continue to enhance our unmatched first-party customer engagement data and performance insights. delivering real-time engagement signals and intent data that helps customers turn insights into actions. Now, go-to-market teams can effectively personalize outreach, nurture audience engagement, and propel significant pipeline and revenue growth for their business. Together, these five pillars are central to the ON24 platform. Our enhanced solution set enables customers to use ON24 to expand well beyond a single engagement event, strengthening audience reach and engagement, increasing funnel velocity, scaling globally, and improving pipeline and revenue performance. Let me give you an example, especially as it relates to the ON24 AI-powered ACE solution. An Italian affiliate of a major pharmaceutical organization partnered with ON24 to host a virtual event for senior oncologists across the country. The affiliate reaffirmed its commitment to the HCP community by presenting its latest research and development efforts in oncology and highlighting clinical data from recent studies. By leveraging ON21's platform, the affiliate delivered an immersive, multi-touch live experience that engaged participants in real time. To extend the value of the event beyond the live session, they utilized ON24's AI-powered content engine to generate derivative assets, such as key moment highlight videos, event summaries, transcripts, and concise takeaways, all centralized on a dynamic, always-on nurture page. Through this collaboration, the pharmaceutical affiliate not only educated its HCP audience but also created a scalable content ecosystem to sustain engagement and drive long-term impact. The second strategic initiative I want to cover is our enterprise-focused go-to-market strategy. In Q2, ON24 made meaningful advances by aligning our sales, customer success, and marketing organizations around a unified solutions-based approach to address the more complex needs of global enterprises and drive value and long-term growth in this important segment. This go-to-market shift allows our sales and customer success teams to directly align with our customers' priorities, such as improving pipeline performance and deepening customer or client engagement and retention. We are delivering meaningful value through innovation that is helping our enterprise clients drive engagement scale globally and improve their business outcomes. With the help of our differentiated solution, we are experiencing healthy customer activity and stable platform demand. We are seeing the results of these initiatives in some key metrics. The average core ARR per customer reached approximately $80,000 at the end of the second quarter, the highest we have ever reported. and we added five net new customers with over $100,000 in ARR. We have also continued to see a strong positive trend with win-backs from Boomerang customers in Q2. In addition, our regular industries business, which includes financial services and life sciences, continues to build, with growth ARR from these sectors increasing as a percentage of our business. Let me give you some customer examples, starting with some of the new logos that we closed in Q2. A leading global payments platform faced several challenges in scaling their demand generation efforts, including low registration to attendee conversion rates. By adopting the ON24 platform and AI-powered AI capabilities, they unlocked a 24 by 7 omnichannel approach and turned their webinars into a predictable revenue-generating pipeline, exceeding their conversion goals and driving significant business impact. Another notable win in Q2 was a leading financial services company that adopted the ON24 platform and AI-powered innovations across three key business lines, investment management, retail and wealth management, and workplace solutions. This customer was a win back for us. They tried another solution, but it was not providing the results they desired. With ON24's interactive engagement capabilities, always-on content, and seamless integration with their tech stack, they can leverage real-time data and insights to drive sales. Our solution propels global scale by enabling multi-language programs across business lines. Another new customer that was a boomerang is a leading healthcare solutions provider that sought to boost pipeline generation and propel funnel velocity. Adopting ON24's platform, including AIAs and advanced analytics, they improved attendee experiences, generated valuable first-party engagement data and insights, and delivered derivative content at scale. Importantly, ON24's reliable and scalable solution drove greater pipeline velocity and revenue generation. Next, I'll provide a few examples on the renewal and expansion front. We closed one of our largest renewals, a high seven-figure commitment, spread over multiple years. The customer provides education and certification for the technology industry. On the expansion front, I would like to highlight a couple of notable deals. A large and fast-growing insurance organization based in EMEA initially adopted ON24 in 2022. They expanded the use of ON24's platform and signed a multi-year seven-figure deal. A global leader in life sciences and diagnostics renewed and expanded his partnership with ON24 with a seven-figure multi-year deal with a commitment increase of over 50%. As part of this multi-year renewal, the customer also expanded its relationship with ON24 by adding our engagement hub and AI-powered age capability. In summary, the positive momentum in the quarter underscores that we are making progress on our strategic goals. Before I turn it over to Steve, I'd like to say that as I look at the first half performance in 2025 compared to the equivalent period last year, almost all customer and financial metrics have trended positively. ARR performance, while marginally negative, has improved meaningfully as compared to the same period last year. Gross retention and new business performance increased significantly. Free cash flow, margin performance continues to be strong, and our win rate has improved. All these factors give us confidence in our expectation that the business will be ARR positive in Q4. Now, I will turn it over to Steve.