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spk05: Good afternoon, ladies and gentlemen. My name is Brent and I will be your host operator on this call. After the prepared comments, we will conduct a question and answer session. Instructions will be provided at that time. If at any time during the conference you need to reach an operator, please press star followed by the number zero. Please note that this call is being recorded on August 9th, 2022 at 5 p.m eastern time i would now like to turn the meeting over to your host for today's call mike rost senior vice president of corporate development and investor relations at workiba please go ahead good afternoon and thank you for joining us for workiba's second quarter conference call during today's call we will review our second quarter 2022 results
spk04: and discuss our guidance for the third quarter and full year 2022. Today's call has been pre-recorded and will include comments from our Chief Executive Officer, Marty Vander Plauw, followed by our Chief Financial Officer, Jill Clint. We will then open the call up for a live Q&A session. Julie Isco, our President and Chief Operating Officer, is also on the call. A replay of this webcast will be available until August 16, 2022. Information to access the replay is listed in today's press release, which is available on our website under the Investor Relations section. Before we begin, I would like to remind everyone that during today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for the third quarter and full fiscal year 2022. These forward-looking statements are subject to known and unknown risks and uncertainties. or give a caution 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 statement to reflect the events that occur after this call. Please refer to the company's annual report on Form 10-K and subsequent filings for factors that could cause our actual results to differ materially from any forward-looking statements. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. Reconciliations of non-GAAP to GAAP measures and certain additional information are also included in today's press release. With that, we'll begin by turning the call over to our CEO, Marty Vander Plauw.
spk08: Hello, and thank you for joining today's call. We are pleased with our Q2 results despite the challenging macroeconomic environment. Our S&S and total revenue have exceeded market expectations and once again beat the high end of our guidance in revenue and operating results. Q2 subscription and support revenue grew 24.3% and total revenue grew 24.6%. These growth numbers include the impact of the Q2 acquisition of Parsport. For the quarter, we saw continued bookings growth in multiple solution areas, including our GRC and ESG solutions. Our organic revenue retention rate of 97.9 is the highest we have reported as a public company. This strong quarterly performance was driven by the strategic investments we have made in the Workiva platform, purpose-built solutions, and partner and customer success. We believe that the demand for regulatory software is consistent and durable, and we will continue to invest in key platform capabilities and our ESG opportunity. However, we expect that near-term growth may be influenced by broader market conditions, including the possibility of lengthened sales cycles. Despite the potential of some market noise in the near term, our confidence remains strong in the long-term opportunity across our wide TAM. At the same time, particularly given macro conditions, we have increased our focus on achieving greater operating leverage and have slowed our hiring plans for the balance of 2022. Across the business, we continue to carefully review our spend and efficiency to balance achieving our growth targets and at the same time improving our margin profile. We do not plan to slow down or reduce strategic investments in ESG or key platform capabilities. These initiatives, we believe, will drive long-term growth and widen our competitive moat. This balance between growth and operating leverage will lead to future margin improvement. We believe that we will return to a quarterly operating profit on a non-GAAP basis in the latter half of 2023. Following our Q1 earnings call, there was a lot of discussion surrounding our capital market solution. To be clear, We have factored the impact of this downturn into our full-year guidance and are not projecting a rebound in IPO activity in the second half of 2022. Looking beyond 2022, we remain confident we will become a billion-dollar revenue company and have the TAM, the platform, and the team to deliver on that goal. We believe that the market opportunities surrounding ESG, GRC, and the broader regulatory reporting environment will drive our durable growth. We continue to be optimistic about our business opportunities in the ESG market. During the quarter, we signed several ESG contracts, including a top five global bank, a prominent U.S. consumer products company, and a large global technology company. Our ESG solution complements our other solutions, making it a seamless process for customers to report their non-financial data combined with their financial data. We are also very pleased with the growth of our governance, risk, and compliance business, where Kiva's industry leadership and significant investment in GRC has positioned us well for continued success in this growing market. In the second quarter, many of our GRC wins were multi-solution opportunities. Our clients saw the value of our platform and invested in our internal controls, internal audit, risk management, and policy management solutions. During Q2, our advisory and technology partners continued to help drive growth across our global footprint by sourcing and influencing multi-solution deals. The percent of new business sourced and influenced by our partners continues to increase. A few large partner-related wins in Q2 include the following. In North America, a regional consulting firm sourced a mid-six-figure GRC win with a large financial services company. In APAC, a Big Four partner sourced a multi-solution opportunity with a large energy company for annual reporting and global statutory reporting. And in Europe, a Big Four partner sourced a multi-solution opportunity at a large financial services company for ESF, global stat, bank risk, and corporate reporting. Our team in EMEA produced its highest quarterly bookings number ever for the regions. This is a result of a number of operational changes we initiated in Q2. There is more to come in this area as we work to maximize our substantial growth opportunity outside of North America. In April, we acquired Denmark-based Parsport, an XBRL conversion software company. The acquisition strengthened our XBRL leadership position across Europe. It grew our employee base of strong talent and is accretive to revenue, profit, and growth. Joel will provide further detail on the go-forward financial impact of Parsport later in the call. We will host our annual Investor Day on Tuesday, September 13th as part of the Workiva Amplify Conference. We hope you will join us either in person at the MGM Grand in Las Vegas or via webcast. Julie, Jill, Mike, and I will update you on Workiva's strategy and operating model. In summary, we remain confident in the resiliency of our business, the continued demand for our regulatory, financial, and ESG reporting products, the uniqueness of our cloud platform, and our ability to expand in our large and relatively unaddressed TAM. Notwithstanding the current macro challenges, we remain committed to balancing our growth strategy and achieving operating leverage from our investments. I would like to thank our global team of dedicated employees who continue to execute on our strategy, take care of our customers and each other, and live by our values.
spk11: With that, I will now turn the call over to Jill.
spk12: Thank you, Marty, and good afternoon, everyone.
spk01: Today, I will review our Q2 operating results. highlight the impact of the acquisition of Parsport, and provide Q3 and full-year 2022 guidance before opening the line for questions. As always, I will talk about our results and guidance on a non-GAAP basis. Please refer to our press release for details of our Q2 results and a reconciliation of our non-GAAP and GAAP results and guidance. Unless otherwise stated, all results I discuss today are inclusive of our Parsport acquisitions. We had another solid quarter, exceeding our guidance. We beat Q2 2022 revenue guidance at the midpoint by $5.5 million. Our SNS and services revenue combined with PAR support results contributed to the overperformance. We beat guidance on Q2 operating results at the midpoint by $4.2 million due to the strong Q2 revenue previously mentioned. We acquired Danish XBRL software provider Parsport on April 1st of this year and are pleased with the early results. I will disclose a few data points to highlight how Parsport added to our Q2 results and how we will report on the Parsport contribution to the business going forward. We will report revenue on an aggregated basis. For this reporting cycle, we are disclosing quarterly Parsport revenue and deferred revenue balance to assist your models. The revenue contribution from Parsport in Q2 was $1.7 million, which included $500,000 from services. As we look to future quarters, we do not expect the Parsport bookings trend to be linear. History has shown seasonality weighted to a majority of bookings in Q4 and Q1. The deferred revenue balance for Parsport at the end of Q2 was $2.5 million, all of which we expect to record as revenue in the next 12 months. We will report customer count for both the Workiva platform and on a consolidated total basis. Parsport has a significantly lower deal size than our Workiva platform business, which would reflect a much lower average deal size when looking at our numbers in aggregate. The total customer count is now inclusive of 850 ESEF customers from our Parsport acquisition. We plan to provide a Parsport ESEF customer count at each earnings release. Now let's go through some key highlights for Q2. We generated total revenue in the second quarter of $131.5 million, showing growth of 24.6% from Q2 2021. Subscription and support revenue was $113.4 million, up 24.3% from Q2 2021. New logos, new solutions, and Parsport helped drive strong revenue growth in Q2 2022. 68% of the increase in S&S revenue in Q2 came from new customers added in the last 12 months. Professional services revenue was $18.2 million in Q2 2022, up 26.5% from the same quarter last year. Primary driver of the increase was higher XBRL services revenue and completing some of those services ahead of schedule. under the Workiva platform, a growth of 582 from Q2 2021. Inclusive of Parsport, we added 973 new customers in Q2 for a total customer count of 5,381, a growth of 1,432 customers from Q2 2021. As Marty mentioned, our subscription and support revenue retention rate was 97.9% for the second quarter of 2022. an increase compared to 96% for the same period last year. With add-ons, our subscription and support revenue retention rate declined to 108% for the second quarter of 2022, compared to 111.6% in Q2 2021. As we discussed during our Q1 call, this metric is being impacted by the lifecycle of our customers who purchased our capital markets solution during 2021, but have transitioned to a lower cost ongoing annual contract value in the Q2 calculation. Excluding the impact of capital markets, this metric would be about three points higher this quarter. Please note that PAR support customers will not be included in our retention calculation until we have a full year of comparable data. the number of larger subscription contracts continues to show growth. In the second quarter of 2022, we had 1,186 contracts valued at over $100,000 per year, up 25% from Q2 the prior year. The number of contracts valued at over $150,000 totaled 642 customers in the second quarter, up 28% from Q2 2021. The number of contracts valued over $300,000 totaled 194, up 22% from Q2 2021. Gross profit totaled $100.8 million in Q2, up 22.9% from the same quarter a year ago. Consolidated gross margin was 76.6% in the latest quarter versus 77.7% in Q2 2021, a net decline of 110 basis points. Operating expenses increased 42.2% from Q2 2021, due to investment in sales and R&D hiring, in-person events, and return to travel. We posted an operating loss of $8.3 million in Q2 2022, compared to an operating profit of $5.3 million in Q2 2021. At June 30, 2022, cash, cash equivalents, and marketable securities totaled $429 million. a decrease of $94.6 million compared to the balance at March 31, 2022. This decrease was due to the closing of our $100 million passport acquisition. Cash flows from operating activities in Q2 2022 totaled $8.7 million compared with cash provided of $12.8 million in the same quarter a year ago. Now turning to our guidance. Our current 2022 guidance assumptions are dependent on a variety of factors that are subject to change, including the ever-changing macro environment. We continue to believe our assumptions are appropriately prudent for the current environment. For the third quarter of 2022, we expect total revenue to range from $132 million to $133 million. We expect subscription revenue will grow at a faster rate than services revenue in Q3. We expect non-GAAP operating loss to range from $13 million to $12 million, a net loss of 27 cents to 25 cents on a per share basis. Our share count will be approximately 53.1 million weighted average shares. For the full year 2022, we expect total revenue to range from $534 million to $536 million. We are improving our guidance for non-GAAP operating loss to range from $27 million to $25 million, or a net loss of 57 cents to 53 cents on a per share basis. Our share count will be approximately 53 million weighted average shares. And in 2022, we expect to post positive free cash flow for the sixth consecutive year. In closing, we are pleased with our Q2 results. I want to echo Marty's thanks to all Workiva employees. You are an amazing team, and I am proud to be working beside you. For the analysts and investors listening to our call today, I look forward to seeing you next month at our Investor Day event. We will now take your questions. Operator, we are ready to begin the Q&A session.
spk05: At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. Your first question comes from Alex Scalar with Raymond James. Your line is open. Great.
spk03: Thank you. Jill, I guess just for starters, can you just provide some additional context on what you're factoring in the second half growth assumptions, either from an FX standpoint or what the sales cycle impact might be to numbers? It looks like a fairly notable step down versus kind of the strong 2Q. So I just want to see if there's any other details there. Thanks.
spk01: So we definitely had some impact, some currency impact in the first half, and we're cognizant that that could come to fruition in the second half as well. But I think more than anything, it's back to some of the comments that Marty has made around just being really careful about the current macro environment and how we're building out the plan through the end of the year. We don't want to get ahead of ourselves. We want to be really careful with the expectations that we can have for how quickly we can close deals, and it just didn't make sense at this time to get too far ahead. I don't know, Marty, was there anything else you wanted to add there?
spk08: Well, yeah, as I mentioned, thanks, Jill, as I mentioned in the script, we've taken capital markets, any recovery in capital markets out of the equation, and it's not a big part of our bookings, but it's significant. So, you know, we're playing it careful because, you know, no one quite knows how the macro stuff is going to unwind. So we want to reduce risk on our forecast, and I'm sorry, on our guidance, and that's why you see what you see.
spk03: Okay. And then, Marty, I guess on ESG reporting specifically, I know you're kind of still continuing the investments there. Are you seeing any kind of macro impact on that solution in particular, and how that's kind of playing out versus your expectations. And I know you've only owned Parsport for a few months now, but how is awareness amongst those customers around your ESG reporting solution?
spk08: There were two questions there. We haven't seen a macro effect on ESG yet. I think that... even in lieu of having an SEC mandate, which everybody thinks is coming in the fall, but there's not certainty there even. Even in lieu of that, we've been doing well in North America with the ESG solution, and so we haven't seen that much macro effect on that. The second question about Parsport, yeah, we do, there is awareness in their customer base that ESG is coming. We're also in the midst of making them aware of the Rakiva platform and our ESG solution. They can do ESG on our platform, which is obviously the thing we'd like to do. It's a much higher value and higher price product. They can also do ESG with Parsport in terms of right at the very end just tag their final documents. So we have a way to cover all those customers, but we are starting the process of trying to upsell those 850 customers. That number continues to grow and upsell them onto our platform. A large percentage of them are pretty big companies, so we feel that's a real opportunity.
spk11: Okay, great, Keller. Thank you all.
spk05: Your next question is from the line of Daniel Jester with BMO Capital Markets. Your line is open.
spk02: Great. Thanks for taking my question. Maybe just first on Jill. Appreciate the context around PAR support in the quarter. Did you provide context in how much PAR support is going to be included in the full year revenue guide?
spk01: No, we didn't give that kind of a detail. I would say, though, that I had mentioned that the deferred revenue balance that was outstanding at the end of Q2 will be recognized over the next 12 months. We would expect to see more bookings from them in Q4 of 2022 and Q1 of 2023. And so leading to that, I would say that you can use those metrics to try and guide towards, you know, increasing revenues more so from passport later in the year and into 2023.
spk02: Great. Thanks. That's helpful. And then I just want to clarify some of like the, the words being used about the sales cycle. It sounds like you've said potential a lot, and so I just want to be really clear. Are you actually seeing today, as of August, any of these macroeconomic factors, or is your guidance for the rest of the year conservative, but you're not actually seeing these issues? Thank you.
spk08: Yeah, this is Marty. I'll just say that we have seen – Sales cycles extend. We've had more deals push recently than we traditionally see. And so we are seeing that. But the bulk of our issue, just to put it in context, is still the disappearance of cap markets. So we are seeing some. The rest of our solutions have been continuing to grow and do well. We just, you know, the chunk out of cap markets, we're slowly filling that with other solutions, but it takes time. So we are seeing some macro stuff. There's no doubt it's not profound yet on our other solutions other than cap markets, which was very profound. So we're starting to see that, and, you know, I don't know if it's going to get worse over time. These things, as they go longer, tend to, you know, put more pressure on the type of companies that are our customers, but we'll see. I appreciate the context.
spk02: Thank you.
spk05: Your next question is from the line of Rob Oliver with Baird. Your line is open.
spk03: Great. Thank you. Good evening. Thanks for taking my question. Marty, first one for you. Your comments relative to EMEA were fairly positive, albeit acknowledging that it's a tough environment over there right now. I guess maybe a follow-up to Alex's question earlier. As you look at those 850 customers from Parsport, any sense that they are at all contributing now or starting to contribute to some of that sort of good activity you're seeing over there in Europe amidst what otherwise is a tough environment in terms of cross-sell and up-sell, or is it just too early, and then maybe you can talk about some of the early learnings in terms of appetite for the Workiva platform with that cohort.
spk08: Well, to answer the first part of your question, no. The Parsport team has not really started to contribute from a dollars point of view on moving the Workiva platform. You know, the performance we saw this year, or this quarter, I'm sorry, we were pleased with for new bookings. It was a nice step up, but we have a way to go in EMEA, there's no doubt. And, you know, we talked about structural changes we've made there, and we're optimistic. We're seeing things improve. In terms of Parsport customers, we are just starting. When you integrate a new company like that, you have to be careful. They were also finishing out their busiest time of the year, and their last logo grab for the year. It's a very cyclic business. They have, because it's a once-a-year report. So we didn't really want to touch them, and now we're just starting that to reach out to customers of theirs to get meetings. So that is all yet to come in terms of upside. So what you saw in the improvement this quarter was all from the traditional Rekiba EMEA folks.
spk03: Okay, great. That's helpful color. Thanks, Marty. And then my follow-up is for Julie Iskow. Julie, it's tempting to ask a question that would potentially front-run September, so I won't do that. But I guess I'll say, as Marty called out, a really nice partner contribution in the quarter. I know that's been one of your goals. So just curious, when you look at some of the big deals, the EMEA deal that was cited, I think it was the European Bank, Are there any common DNA to those deals that are representative of improvements you guys have made and what's driving that increased deal activity? Thanks.
spk00: Absolutely. And you mentioned partners. And in EMEA, that is one of the core tenants of growth there, as well as in APAC. And it's the numbers and the percentage growth of our deals that are generated by partners and delivered by partners is increasing globally. So we're absolutely seeing that as a trend across the world.
spk11: Okay, thank you.
spk08: I would just add a comment. I would say that much to Julie's credit, they're starting to understand that they can really build practices with our platform. And her team has done a tremendous job of educating partners so they realize they can build really nice practices around this. And I think that awareness has motivated them to learn what types of problems they can solve and then go out and solve them. So that's really what Julie's team has been successful doing in terms of accelerating this. I mean, we're definitely seeing, like I said in the script, a nice growth in terms of the percentage of deals that have partners involved one way or another.
spk05: Your next question comes from the line of Joseph Mears with Truist Securities. Your line is open.
spk10: Great. Thanks for taking the question, guys. Nice job on the quarter. Just a little longer-term question. The $430 billion Inflation Reduction Act was just passed by the Senate. Do you guys see any of that money being directly helpful to your model over the next couple of years?
spk11: I really can't.
spk08: I really can't. I haven't dug into the details of that thing. I'm still in a bit of shock that it went through. I think it's good for the country, that's for sure, but how it's going to affect our business, I can't say for sure. Again, we have to dig into the details. We are seeing movement in D.C. on data standards, and we're very optimistic that the continued push for structured data and consistent frameworks to report, be it financial data or other non-financial data, is definitely getting momentum in D.C. So I think that we see promise there from a regulatory point of view, but I'm not quite sure on the new bill.
spk10: Okay. We'll just consider it to be upside down. Any recent customer feedback on either the ESG Explorer for framework management or the GRC enhancements to data management and connectivity that you spoke about recently? And thanks for taking the questions. Appreciate it.
spk08: On the ESG, there's a high rate of change in our product right now because we're investing, as I've talked about a lot. So we interact with a lot of customers and we get a lot of feedback. and we're incorporating into the product at a very high rate. And the Explorer tool, we're improving, and that's gotten very positive feedback. Some of the other features that we're just launching in the last two or three months are also getting positive feedback, but we have a little ways to go to really get them mature. But the customers are so engaged with us, and we have such a good team, and these are just the type of customers you want engaged with, big companies. you know, mid-market companies, all vertical, I mean, from all the different, you know, as I mentioned, be it energy or consumer products or retail, we're getting input from all those people. So, and we've also generated a lot of interest from technical partners, you know, partners who might specialize in carbon or other things. And so, It's really coming together nicely, and we're getting positive feedback. But most importantly, the customers are really highly engaged in helping us fine-tune the product.
spk10: Appreciate the answers.
spk08: And then I guess you had an IR. Can you repeat the IR question again, please? The GRC question.
spk10: Yeah, I think you'd also spoken about GRC enhancements for data management and connectivity. I'm just curious if you're hearing any positive feedback there as well.
spk08: Sure. In our GRC product, what's interesting, we've been investing in that for a long time because we always felt assurance was important for reporting, knowing that what you're reporting is correct and repeatable. But it takes a long time to build a robust GRC platform. And over the years, we've kept investing, and all of a sudden, we're getting close to having a product that actually serves a broad... swath of GRC needs. We're really getting the critical mass. And how that's manifesting itself in our customer base, we keep talking about the improvement there as we're seeing a lot of multi-solution deals, much higher dollars, and we're getting higher level people involved in those decisions. And I think that's mainly a reflection of how much more serious people are taking assurance and risk management. It sort of protects your house, if you will, in these organizations. Really good things we're seeing there, and it's all been around just the continued development of the platform and some specific features for IR, but we're really optimistic about it.
spk11: Thanks again. Your next question is from the line of Matt Stotler with William Blair.
spk05: Your line is open.
spk09: Hey, everybody. Thanks for taking the questions. I think I'll just add, you know, first one, just a follow-up on the ESG product. Obviously, you know, mentioned the high rate of change there. Let's just get an update on how you're thinking about the, I guess, the overall readiness of that product, right, both from a, you know, kind of development functionality perspective, but also on the go-to-market front. And then any sort of, you know, how you're thinking about kind of timeline to maturity there and, you know, obviously there's early interest here, but when you'll kind of be at a place where you think it's, you know, mature and ready to go.
spk08: Well, I don't know that there's ever a day where you say, we crossed this line. But it's getting better every day. We have some very good customers who are serving as references who actually generated their ESG report using the tool and are managing the whole process using the platform. So it's already robust. It's already providing value. And we're continuing to see progress in sales. So I think it's ready to go now. We don't have unhappy customers by any means. So we have customers that want to make it better, but not unhappy. I think in terms of if there is a critical mass line, it's probably somewhere near the end of the year. I think that we'll have some really nice functionality in there, and we'll still be improving it, obviously. But in terms of go-to-market, I think we're having success now. It will only get better over the remainder of 2022.
spk09: Got it. That's helpful. And then maybe just to follow up on the ESAP opportunity, obviously we've talked about it quite a bit. I think the, you know, that is, you know, those regulations are effectively in place at this point. And, you know, those requirements are alive. Obviously you require passport as a, you know, interesting way to kind of, you know, have another kind of avenue to get into those customers. But we'd love just, just given that we're, you know, that those regulations have gone into effect and you've got this kind of multi-pronged strategy, if you will. We'd love to get an update on your thoughts about what you're seeing in terms of, first of all, leads and conversions, and then how you think that that opportunity is going to layer into the model going forward.
spk08: Well, we're at the beginning of the process, frankly, much of the SEC. You know, you say the regulations are in place. That's true, but they step up every year on what they're required to tag and provide. So just like the U.S., they did it the same way the SEC did. First it was just face statement, then it was block, and then it was detailed note tagging. So, you know, the ESEP mandate has a similar scale-up, and next year they have to block tag, for instance. The other thing is that most of them have only done it one time, and after they go through that one-time cycle, they feel pain. I mean, they feel a lot of pain and, you know, getting to the point where they're ready to do the tagging. So there's a lot of similarity to the SEC market. The Boltons had the majority of the market in the SEC space when we started Workiva, and, you know, now we have a very commanding market share lead. So I expect the same thing. I've been consistent in saying it's going to take a few years and I think we'll have a very strong market share in EMEA. I also think that with all the XBRL mandates coming all over the world and ESG coming to a large number of organizations initially in EMEA but other places over time, the Parsport solution in and of itself will be very valuable to grab market share in those markets and then go in later and sell platforms. So it's definitely part of our go-to-market strategy for companies who just want to start with a less expensive bolt-on solution. So again, we're very happy with where we're at. Our deal size is much higher for the platform, much higher than the bolt-on, and we're still converting customers and still signing customers. So We're about the same place we were in the SEC in terms of market share right now, and so we're very optimistic.
spk11: Great. Thanks again for taking the questions.
spk05: Your next question is from the line of Mike Grondahl with Northland Capital Markets. Your line is open.
spk13: Hi, this is Mike with you, John, from Mike Grondahl. Thanks for taking the question. Maybe first just on... The 100,000 ACV segment, it looks like there's kind of a nice re-acceleration there from last quarter. Is there anything to call it there? Is that more just a timing and catch-up from 1Q?
spk01: It generally just tends to be as we add more solutions onto existing customers, sell more multi-solution deals. Anytime you see that growth, it really tends to be showing the progress against getting more solutions into the existing customer base.
spk08: Yeah, I mean, I will add to that. I mean, Julie's been really good at defining metrics and really pushing to improve them. And our multi-solution deals are up 17% the first half of the year compared to last year. And we're seeing the same type of thing on account expansion. So that manifests itself in bigger initial deals or bigger total account spends. So, you know, what you're seeing there also includes the fact that, you know, when I look at the wind reports every day, we're just seeing more and more six-figure deals compared to the past. So I think that's part of what you're seeing.
spk11: Got it. And then just on Parsport, some 850 customers there, do you know what that number was year over year? We don't have that available for you today. Got it. Thanks. Your next question comes from the line of Andrew D. Gasparri with Barenburg.
spk05: Your line is open.
spk14: Thanks for taking my question. I guess first on the comments you made on balancing growth and margins, profitability back after the next year, definitely you mentioned that you're going to continue to strategic investments on products like ESG, but can you maybe elaborate on what you're potentially stabilizing investment in And also indirectly, how should we think about how this affects your growth plans? Or will that just be on the margins?
spk08: Well, obviously our goal is that it's on the margins. You never know for sure that that's our goal and that we think we can achieve that. You know, just to point at our history, you know, in 18 when I took over – we changed over a lot of our management team, and we have a really strong team. And they deserve some credit. I mean, prior to this year, they had, you know, increased our margin year over year for four years. We had one little hiccup in 2020 because we had such an awful second quarter around COVID. But for the most part, just a nice, steady improvement in growth. And meanwhile, a nice... improvement in margins. So the team is really good at what they do and they know what our goals are. We want to maintain that 20 plus percent growth and improve margins. So they've been doing that the last four years up until we announced that we needed to invest because of ESG, which we still believe is a generational opportunity. So I have a lot of confidence that they're going to be able to throttle back a little I was consistent before saying that we were investing one year, and after that we would start to work on margins as a focus. I just didn't want to miss the ESG opportunity, which we think is really significant, and it's already showing, as I mentioned, in terms of our success in the marketplace. So I'm very confident that they can improve efficiency through just a lot of rigor and and managing and still maintain our growth rate for the most part. The investment thing this year was really important to ensure long-term growth and we always invest for two reasons. One is to make the product better and more differentiation, bigger moats around the product and better customer satisfaction, but also it's a TAM expansion thing. We're always looking at TAM expansion And, boy, we've expanded our TAM with ESG. We've expanded our TAM with, you know, getting to be more of a GR solution than just a SOX solution. And so those investments are paying off in terms of durable growth. I'm not – the last thing I'm worried about is bumping our head on our TAM. So I really want everyone to understand that. We're very thoughtful in how we manage the business. And this – I don't want to be viewed as, you know – spending crazy, like we're crazy. This is the first year we've ever made a significant investment like this. And we were very clear to everybody. And as we planned, we're going to come out of it this year and go back to managing both simultaneously. But we just felt it was so important to get this ESG, get the leadership position in that. That's helpful.
spk14: And then maybe, I don't know if this question is better suited for Julie, but on the product roadmap, I know around the corner. Just curious to know if your focus right now is just enhancing the existing products you have, or are you potentially planning any new use cases to roll out maybe later this year?
spk00: For the development, as you know, we don't talk about those new use cases in incubation, but we continually have our growth team focused on looking at what's there to capture additional TAM. But we are focused not just on our existing solutions, but of course, a lot of capability on the platform, which brings all of our solutions up. So you will hear all about it at Amplify.
spk11: Looking forward to it. Thank you.
spk05: Again, if you would like to ask a question, press star followed by the number one on your telephone keypad. Your next question is from Brad Reback with Stiefel. Your line is open.
spk07: Oh, hey, great. Marty, as we look forward, what do you think has to happen for you guys to get back to 20% sustainable growth? Thanks.
spk08: That's a good question, Pat. Thanks. Well, I mean, I think we're going to be, you know, in the ballpark even in the existing environment. It's not going to be easy, but I think we'll be in the ballpark. As soon as any capital markets activity – I mean any returns – that will make it easy for us to be above 20% grower. So it's really, you know, it's a matter of two things. It's when cap markets comes back and us maturing some of these new solutions. You know, I mentioned the tan thing about not bumping our head. The only solution that we have significant market penetration now is the SEC market. Cap markets were barely penetrated, single-digit. You know, and all these other, you know, even IR, we're single digit in terms of GRC. So there's a lot of stuff for us to sell, and that's not the problem. So I think, you know, in time as these other solutions, you know, continue to improve, which they are, I mentioned that, our solutions are still growing. Even if cap markets doesn't come back, we'll be there. The other thing I would say is that, you know, we invested in the cap markets team at exactly the wrong time, so we have a lot more sellers. But they're out there building relationships with attorneys. They're building relationships with young private companies who are going to go public. And we have a magnificent longer-term pipeline opportunities for cap markets. So when cap markets does come back, we're going to have a much more significant go-to-market activity around that. So all those things come together eventually, and we're very confident that we'll see good growth.
spk05: that's great thanks very much there are no further questions at this time ladies and gentlemen thank you for participating this concludes today's conference call you may now
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