Yext, Inc.

Q4 2023 Earnings Conference Call


spk_0: hello and welcome to the yet fourth quarter and fiscal twenty twenty three financial results conference call all participants will be and listen only mode should you need assistance to signal a conference specialist by pressing the starkey followed by zero after today presentation there will be an opportunity to ask questions to ask a question you may press star fun one on your telephone keep had to withdraw from the question que please press star then to please note this event is being recorded i would now like it in the conference at written mills erdman please go ahead
spk_1: thank you operator and good afternoon everyone welcome to get fiscal fourth quarter twenty twenty three earnings conference call with me today our ceo and share of the board mike wallrath ceo and president mark valentino and see bow general bond during this call we will make forward looking statements including statements related to our future financial performance expectations regarding the growth of our business or outlook for the first quarter and fiscal year twenty twenty four or strategy and estimates of financial and operating metrics capital expenditures and other indications of future opportunities as for the described in our for a quarter earnings press release these forward looking statements are subject to certain risks uncertainties and assumptions including those related to jackets growth the evolution of our industry or product development and success or management performance and general economic and business conditions we undertake no obligation to revise any statements reflect changes that occur after this call descriptions of these and other risks that could cause actual results to differ materially from those forward looking statements are disgusting are reports filed with the s e c including or most recent form tend to for the quarter ended oct thirty first twenty twenty two or any report on form ten k that the fiscal year and in january thirty first twenty twenty two and our press release that was issued this afternoon during the call we also referred a certain metrics including non gaap financial measures reconciliations with the most comparable historical got measures are available and the earnings press release which is available at investors that yaks dot com we also provide definitions of these metrics and the earnings press release i will now turn the call over to mike
spk_2: thanks mills and thanks everyone for joining us today
spk_1: we're pleased to report or two for results that a solid finished to our fiscal year twenty twenty three for the full year we generate revenue of four hundred point nine million and a non gaap net loss per share of two cents which compared to a loss of fifteen cents last year
spk_2: we made meaningful progress and driving transformation across our business through continued product innovation focused execution and improve productivity
spk_1: we strengthen our commitment to solving customer pain points and drove increasing adoption of our platform at the same time we delivered operating margin improvements and two consecutive quarters of non gap profitability when we present in our management changes one year ago we made several commitments we committed to increasing costs are focused and satisfaction we committed to shift or go to market model from a capacity driven model to a productivity driven model
spk_2: we committed to operating more efficiently and more profitably
spk_1: we committed to our shareholders and our employees to increase our transparency and communicate better we've made significant progress with the objectives we set a year ago and i would like to highlight some of the actions we took to improve our performance in a few key areas
spk_2: first we dramatically improved our go to market motion with a focus on increasing so customer satisfaction we rolled out new brand positioning that better aligns with what we do making it easier for customers to understand our products value we hired to do see him out to lead the development of are integrated marketing strategy and execution and we heard a new zero to drive improve cells execution increase customer satisfaction and accelerate global revenue growth rana time of if the ground running and brought fresh energy and perspectives to the organization or renewed focus on customer satisfaction has begun to show and our numbers with gross retention improving throughout the year to the high eighties in the fourth quarter while we have much more to do here i'm pleased with our early progress second we execute on our commitment to sustain profitability by operating more efficiently resulting in a non gap profitable second half of the year
spk_1: we did this by making strategic changes such as reducing layers increasing spans of control better lighting our people and resources and enhancing coordination across teams to create a leader more agile organization we began fiscal year twenty three with approximately fourteen hundred full time employees and we began fiscal your twenty four with around eleven hundred a reduction of about twenty percent
spk_2: i believe our company a stronger and more agile than it was a year ago and we are committed to continuing to drive better operating results in fiscal year twenty four and beyond
spk_1: third we continue to drive product innovation to maximize our long term growth potential throughout the year we enhanced all our products with dozens of new features and upgrades including our flagship listings product this innovation is having a tangible does this impact resulting in several new logo wins or yaks replaced and trench
spk_2: competitors after side by side comparison demonstrate our products ability to drive superior value our innovations cross natural language processing analytics and security as well as are leading technology integrations are driving competitive wins in the marketplace and setting the stage for stronger growth moving forward
spk_1: finally we made use of are strong balance sheet to repurchase thirteen point eight million shares and physically your twenty three reducing share count by roughly ten percent we will continue to focus on minimizing dilution to shareholders and using our strong balance sheet strategically
spk_2: or work in these areas driving customer value operational efficiency and product innovation are paying off and i'm confident that we're building a best in class as company we've made significant strides i will he forward to further progress in the your head despite the challenges of last year are goebel team has remained committed and focus and i couldn't be more proud of the way they have delivered in a very difficult environment fiscal twenty twenty three was a pivotal year for yaks and our cue for performance demonstrates the strength of our platform or focused execution and i go to market strategy that is increasingly resonating with our customers and partners for the fourth quarter we delivered revenue of one hundred and one point nine million and non gaap net income per share or of five cents both of which were better than the hyatt of our guidance ranges as we seek to expand our margins through focus investment on our highest our ally opportunities we made a number of decisions in key for to sharpen our focus and reduce investment in areas of the business that were inefficient from an operating perspective these actions including moving to a partner centric go to market strategy in japan and reducing our direct sales efforts to assemblies the most significant restructuring effort we made into for was the decision to focus our service is offering on the highest value activities for customers which i'd like to discuss in more detail our services business represented a small amount of overall revenue approximately nine percent of total this year but our focus on delivering the vast majority of services ourselves as had a meaningful impact on gross margin we plan to transition a portion of our services business to our systems integrator and partner ecosystem over the coming years
spk_1: we will also continue to invest in automation that will require less services and create more value with customers
spk_2: by making this decision now we've been able to significantly reduce the size of our professional services organization in fact this was the largest part of our cue for restructuring and the result will be an immediate improvement in are non gaffe gross margin which darryl will discuss in more detail over the last several months the world has been captivated by the potential generative artificial intelligence to transform customer experiences chatty beauty is one of the most rapidly adopted technologies of all time and general purpose large language models have potential to bring disruption to the dominant search paradigm these models are trained on a wide variety of public datasets which often include little to no authoritative information about a business and because of this the accuracy of generator responses is unreliable or can't be independently verified as an example we address this problem with the excess which can provide every business would conversational ai experiences that are generated from accurate information stored in their own knowledge graph in fact the are in the investment we have made and integrating large language models and machine learning throughout the answers platform ideally conditions us to help enterprise customers leverage the potential of ai while eliminating the recent that answered so called hallucinations and data in security we've been meaningfully investing in ai and large language models in the x the answers platform since two thousand and seventeen we also intentionally built our platform to be model agnostic which positions as well to add value for our customers regardless of what happens with consumer search as chat bots and other content generation models continue to gain adoption
spk_1: we believe this will lead companies to place increase strategic emphasis on ensuring their knowledge and information or optimized
spk_2: react to this presents an exciting future growth opportunity we can help our customers leverage this emerging technology to deliver perfect answers across every just roll experience today we believe that in a great position to take advantage of the rising need of businesses to safely and effectively put a i to work across their digital experiences we will continue to take a thoughtful and cautious approach to formulating our financial guidance which girl will discuss in greater detail on a few minutes there are three potential revenue headwinds factored into our guidance for fiscal year twenty four first deemphasizing certain areas of our go to market focused such as direct sales to sundays and direct sales in japan
spk_1: while these choices will be a net positive in terms of focus efficiency and profitability they will have a modest impact on the revenue in the short term
spk_2: second or decision to focus on building systems integrator and partner relationships for managed professional services and limiting our own services business to the highest value expert services will benefit our clients in many ways this decision will also benefit gross margins and are bottom line however we anticipate that it will put modest pressure on revenue and renewals as we restructure some existing service agreements finally we continue to consider the uncertain macro environment and assume that he long gated sell cycles and budget pressures could persist for the foreseeable future fx also remains a headwind to revenue growth despite the anticipated revenue headwinds in fiscal twenty four we expect a more efficient and profitable business next year and believe we're on the path to sustainable and profitable growth for the long term
spk_1: i have great confidence in the long term success of our business we have significant opportunities ahead given are expanding base of the new and existing customers and the increasing value of our answers platform satisfaction across our customer base is improving and we are uniquely positioned to an increasing value in ways that our customers are only just now beginning to
spk_2: it we will remain laser focused on driving sustainable growth and running and efficient organization we look forward to discussing our financial objectives in greater detail along with our strategy and technology developments at our upcoming investor to and april fourth in new york city in this meeting will discuss the drivers of our fiscal year twenty four financial plan measures we're using the benchmark and forecasts are growth our products and go to market strategies as well customer testimonials and why they chose or platform we invite all investors and analysts to attend are excited to see you next month
spk_3: with that i'd now like turn the call over mark thanks my i'm also proud of the progress or team is made his short amount of time and i want to acknowledge and thank them for their hardware over the past twelve months we've completely remodeled or go to market motion and our entire product platform while improving efficiency is across the entire organization in short we are reader and stronger this past year and didn't skip a beat on current invasion i want to pick up on appointed mike smith which is that we are well positioned to add value for our customers regardless of how the search was play out the knowledge graph is a key foundation of conversational ai for business and we've been helping customers bills their knowledge graph for years we've been leveraging ai and trans war based models in our digital experience platform for many years to civically in are searching connector offerings within the family a transformer models we work with we have been developing generous models and have been piling them with customers for the past year over the coming years we will continue to take a model agnostic approach to helping our customers deliver digital experience which will include developing our own models and using the many great third party models on the market today we believe that a i will fundamentally changed the digital experience for every user and every branch in order for businesses to take advantage of this market shift they will need new building blocks and a new compose will architecture that leverages the best embrace acknowledges to deliver the digital experiences that their customers expect this new digital experience architecture we built on the foundation of a i acknowledge guess technologies which will allow for companies to deliver conversational and consistent experiences across all the digital channels such a search engines website mobile apps chat messaging social and hundreds of other digital such once and yet we continue to drive innovative ways to incorporate ai did digital experiences in addition to announcing chef in mid february last week we now content generation we believe by adding the content generation feature to our knowledge graph the we are the first content management system that automatically to proactively generate it's own concept yet content generation uses multiple large language models including gpc three and existing information from a customer's knowledge graph to automatically generates and suggest rich business specific content that is on brand and aligned with the writing styles or patterns found throughout and organizations content library the x chat and content generation announcements have both generated a lot of interest from customers and prospects within a week of announcing excess we had hundreds of requests to be included in the beta and over half of them were with new prospects and miles only been a few days since announcing constant generation the flood of increase looks like it might even see that level of interest the responses to yes chat and content generation make it crystal clear to us that our digital experience platform is resonating with the market and that yes is at the forefront of enabling businesses with the tools to leveraged the latest gen vi we believe this creates an opportunity projects to solve problems for a diverse range of verticals leveraging our entire product platform we're making it easier for businesses to enhancer digital experience through yes and we saw great examples of this into for we expanded our leadership position across financial services healthcare technology by also add some significant wins and multi product cross cells and ecommerce financial services and the energy sector i'll name a few of these or go to market seem executed an excellent renewal and expansion of dental who have been a customer of jackson's twain thirteen harlem was looking for a web platform provider to create a fleet of web sites for thousands of dentist practices this for after a detail take off against other established web platform vendors yeah was selected as the vendor choice portland shows the over existing were platforms because of our heads content management capabilities are open source standards developer experience and modern web architecture
spk_1: working with one of our new marketing partners philly marketing laps we successfully a competitive bid with a new customers was among the largest global money service providers and one of us largest accounts in terms of location volume
spk_3: our client was frustrated and seen some of their global locations not existing and google maps through their previous vendor as a result philly marketing last let them see just because of our tough position in the g to listings great are presently deploying a highly customized solutions that will enable the client to improve the discover ability of there's a six hundred thousand global locations more efficiently and cost effectively than their previous provider a major when in the managed health care and insurance vertical was united health through this was a renewal with a customer the historically had used yes entire suite for a portion of their some locations and providers as well as often dot com because of are successful implementation and the value or platform delivered they asked us to expand their rollout these three customers are great examples of the strength and innovation that we continue to see with our listings products
spk_1: and important commerce when was with a global online brick and mortar specialty retailers this is a customer the had worked with various different vendors cross listings pages and search the customer was not initially looking for any changes to their providers but after showcasing the value of having a single channel agnostic
spk_3: content repository by using the knowledge graph and the interrelated benefits of our answers platform they selected yes as their sole provider of all these services a couple of notable wins for support search during the quarter included a play and a large web hosting company in the key to the former eat a shows yaks because of our self serve functionality cmos us and their ability to own the integration process with the latter customer we wanted a head to head c and our team beat out an arsenal of enterprise search competitors as a result gets will power the back end of the companies health center we built in optimize a fantastic search experience for the plc which has the potential to extend to other areas of the customers business also on support search a wireless service provider had originally developed marketing and support search functionality internally for them and through our ongoing collaboration and execution to enhance their search experience they've expanded on our partnership to include the build out of the search bar that features prominently on their homepage
spk_1: thanks very supermarkets the second largest supermarket chain in the uk is another example of a customer that shows are pop on capabilities to create an entire digital's experience sainsbury was looking to upgrade the support site to be faster
spk_3: as you optimized and have a great great search experience which were translated to reduce calls to the call center and ultimately cost savings after looking at several vendors they chose the answers platform for content management web rendering and search and would develop their new support site on guest
spk_1: with to do we had a knowledge management win against several established competitors the zoo self service i had been developed internally and the company was seeking to reduce the volume and cost of customer costs after showcasing yes best in class support solution we demonstrated how yet to provide both case deflection abilities
spk_3: as well as vendor consolidation ultimately kazoo chose the extra both support search and as the default knowledge management solution of cross the company
spk_1: i look forward to showcasing some of our latest products featuring our upcoming spring release curing directly from our customers about how they are leveraging our platform and diving deep into the ai opportunities at our upcoming jax investor day on april fourth
spk_2: it will be an events you won't want to miss now i'll turn the call over to darryl
spk_4: mark
spk_1: as our financial results demonstrate we continue to execute well in the fourth quarter or two for revenue grew to one hundred and one point nine million which is above the high end of our guidance range and are full year revenue was four hundred point nine million compared to three hundred and ninety point six million and the prior fiscal year
spk_4: revenue growth in queue for was approximately three percent in constant currency and one percent on an as reported basis
spk_1: this represented a year over year impact of approximately two point three million dollars due to assets
spk_4: full year revenue growth was approximately five percent in constant currency and three percent or in as reported basis this represented a year over year impact of approximately ten point two million dollars due to assets honor and revenue was two hundred and twenty three point seven million at the end of the quarter up slightly from the same period a year ago
spk_1: annual recurring revenue or a are are at the end of two for was four hundred point four million four percent year over year and constant currency and three percent on and as report in basis this represented a year over year impact of approximately four point eight million dollars due to effects
spk_4: direct customers represented eighty two percent of total air or direct heir are at the end of two for total three hundred and twenty seven million an increase of six percent year over year and constant currency and five percent on and as report basis our customer account for direct excluding us and be increased seven percent year over year to over two thousand nine hundred and sixty third party resellers which represents represented eighteen percent of total air or as the end of queue for generated a or are seventy three point three million a decrease of six percent year over year and constant currency as well as and as well as on as reported basis
spk_1: a are are is how we gauge our progress and momentum and sales renewals and up self and when calculator on the basis of they are are we believe our dollar base net retention rate indicates the long term growth potential of our customer base historically reduce trailing twelve month revenue as the basis for determining that retention the going forward we will disclose this a are are based net retention rates
spk_4: as of the end of queue for this rate was ninety seven percent for a direct customers and ninety two percent for a third party resellers
spk_1: in our fourth current quarter earnings press release we're presented a table of comparable rates for the current and historical period as like mentioned earlier we achieved a gross retention rate in the high eighties for the fourth quarter bearing in mind this rate represents our direct customers excluding us and beast this is the highest gross retention rate of the year and an improvement over the meat eighties rate that we experience in third quarter
spk_4: as we said in the past this is a quarterly rate determined by comparing annual dollar value of contracts up for a new in a given quarter against what was renewed excluding up cells turning to non gap results which are reconcile to gap in our press release queue for gross profit was seventy six point six million representing gross margin of seventy five point one percent compared to seventy seven point one percent in the year ago quarter full year gross profit was three hundred and one point nine million and gross margin was seventy five point three percent compared to seventy six point six percent in the year ago period compared to queue for last year or gross margin was adversely affected by severance an employee related costs associated with our decision to reduce the size of our team by roughly a percent the total impact of this headcount reduction was approximately two million dollars roughly half of which was recognized in our cost of revis as part of this process and the organizational changes mike referenced earlier we implemented a new car structure which allows us to focus on fire our allies opportunities while continuing to invest against a number of strategic business needs in fiscal twenty three services was approximately nine percent of revenue as we ship some of these lower margin services to or esi and partner ecosystem we will see a headwind to revenue and a or our growth as well as retention however this will also result in a positive impact a gross margins based on these two
spk_1: changes combined with or to for restructuring we expect our first quarter gross margin to be in the middle of our seventy five to eighty percent range with continued gross margin improvement throughout the rest of the year
spk_4: another key area focus to increase our sessions the has been on our operating expenses
spk_1: two for operating expenses were seventy point one million or sixty nine percent of revenue compared to a point eight million or eighty percent of revenue in the year ago quarter
spk_4: full year operating expenses were three hundred and three point seven million four seventy six percent of revenue down from three hundred and fifteen point nine million or eighty one percent of revenue in the prior year
spk_1: the main drivers for this has been through a realignment of our sales and marketing costs structure where we've been able to reduce sales and marketing as a percentage of revenue to forty one percent in chief for some fifty one percent in the fourth quarter last year our few for net income with six point three million compared to a net loss of four point one million in the year ago quarter or to for net income per share was five cents compared to a net loss of three cents per share in the fourth quarter last year
spk_4: and cash equivalents were one hundred ninety million at the end of two for compared to one hundred and sixty two million at the end of the third quarter
spk_1: the increase in our cash balances was partially offset i continued share repurchases executed during que for which totaled eight point three million dollars
spk_4: year to date our share repurchases totaled seventy seven point four million dollars we intend to continue to maintain a strong balance sheet and cash petition going forward and will remain open to buying back our stock at attractive prices net cash provided by operating activities for to for with thirty five point nine million compared to twenty nine point one million in the year ago quarter and our cat facts zero point eight million compared to one point one million and queue for last year
spk_1: i'd now like to turn to our outlook for the first quarter and full fiscal year twenty four as we discussed the macro environment remains challenging and customer the heater across all businesses suggests continued uncertainty
spk_4: logger sale cycles tighter budgets and additional approval layers are common in our guidance assumes that these weaker macro conditions and it's symptoms will persist throughout calendar twenty three in addition to the economic environment like referenced anticipated revenue headwinds from our shift emphasis towards as eyes and services partners which are factor into or to one in full year read and your guidance as the same time we are also anticipating a much more efficient and profitable business next year and will demonstrate this in several ways including are gross margin improvements a reduction and operating expenses as a percentage of revenue and growth and our bottom line
spk_1: the help high like these improvements going forward we will begin to give guidance on adjusted ebitda in addition to our expectations for both revenue and mps considering that roughly seventeen percent of our costs last year were non cash and nature we believe adjusted either doll which is calculated on the basis of our cash six spencer's is an important measure to track our progress on profitability as of today for the first quarter we expect revenue to be in range of ninety eight ninety nine million dollars adjusted ebitda in the range of ten point five to eleven point five million dollars and non gas ps in the range of five cents to six cents which assumes a weighted average basic share count of approximately one hundred and twenty two point nine million shares
spk_0: for the full year fiscal twenty four we expect revenue to be in the range of four hundred and two to four hundred and six million dollars adjusted ebitda in the range of forty four to forty six million dollars and non gas pps in the range of twenty two to twenty three cents which assumes a weighted average basic share account of a props huntley one hundred and twenty four point five million shares look forward to seeing many of you in april and operator we are now ready to open up the line for questions
spk_5: thank you we will now begin the question and answer session to ask a question you may star done one on your telephone she has if you're using a speakerphone pick up your handset before pressing the keys to withdraw from the question cheese pizza stars and to at this time we will pause really to assemble our roster it a first question come from tom flight wouldn't be a davidson please go ahead oh great earth a stigma questions a couple guidance if i could and then one on a i just urged could you talk a little bit about what the full your guy kind of contemplates as it relates to your listings business
spk_6: and then also on on gross margins
spk_2: you should we anticipate that that canada and sort of cities steady state or can a long term gonna target for gross margin is is up appreciably after the changes you guys are making on the services side
spk_4: and then i've got one on air they some is darryl
spk_7: i'm are under the question what the revenue guide your we don't really forecast outer plan out the business based on products what it's like can say is your obviously you're we mention the headwinds that we're seeing from a couple of the various based on some and strategic decisions that we made into force that certainly going to have an impact
spk_4: you we think that impact is in the range of your low single digit percentage point or on growth
spk_2: a what it will say about the listing businesses mark highlighted some of those specific customer examples and in his action that that demonstrates that demonstrates the strength of the listings product and your how that ties into the rest of the platform
spk_8: some here with me feel pretty good about that your second question with respect to margin
spk_9: you know yeah yeah you're right the actions that we took in to for was primarily aimed at at at me or how we operate the services business and and and or plans for the future so yeah we'll see a step functioning she won compared to two for like we said we'd expect you one gross margins be in the middle of that
spk_2: seventy five eighty percent range and in a will show continued improvement throughout the rest of the year look after a month
spk_9: it's my guys just going to piggyback on our said about the listing doesn't so things we we told you he wanted you to was that that a lot of the gross attention challenges that we signed you wanted to do were largely coming from listings only are primarily listings customers and so so
spk_2: we're we're very pleased to see that are gross attention matchups of improves throughout the year and particular into foreign to the high eighties
spk_5: i think that's a that's a says
spk_2: with that shows is that we're doing much better job i've great satisfaction these customers and servicing these customers and so it in the area where i think we were most exposed with were and largely the listings only customers
spk_9: you can appreciate that added color thanks and then just and generally i know there's been a lot of debate about how it may can alter the established search engine paradigm can you just look great a bit more on you know whether that represents an opportunity or or a risk for yikes
spk_2: let me start of and marco marco in prague a little the run as up or i'll just tell you this job that the platform that we've we've built is designed to be model agnostic and ten
spk_10: regardless of whether any of the existing players are new player show up and become you know as as market with with dominant models all of that bodes well for yes and for our customers because what we're interested in his sure that the best models are are in use markets article that more about how we do that within the platform
spk_9: what i think we're seeing is a lot of businesses awakening to the the risks of not controlling the sources of information that are being said to the a ice
spk_3: even just over last couple months he started to see businesses take actions to significantly limit what's being done with i without having that are controls over how to technology has been using that's that's a from that we saw for customers to said as will make said it will generally i was doing right now is it's it's raising the bar for you know digital experience and resorted to see the new jersey content or as a pity gen vi and the ability to deliver direct answers as part of consumer experiences three opportunity for us is shoe really help our customers and and help businesses deliver a similar experience to what the consumer experience is because if this is the new bar them every enterprise every business in the world is going to have to live up to that new expectation of digital experience and so that the big difference here that for a business though
spk_11: you need to make sure that you're answering questions that are
spk_0: that have seen one hundred percent accuracy
spk_12: they come from a set of corporate sources of information that you control and of course as you see do searches come in the ability to add an augmented information to make sure that the next time someone asks asks a question that you can and that's why it's a it's a pretty big opportunity right now
spk_13: that we're seeing show up in in so many different sectors and a different areas the for us we're really excited about it good thank you very much
spk_0: the next question comes from rohit kulkarni with ross mk and partners
spk_13: please go ahead i am i got with a i force in the modern next as was first announced a chat board or maybe maybe talk about how do you so i can fun
spk_14: concrete anecdotes are rough
spk_3: two kids that said the chalkboard sex does he acts as with the comfort information is the being charged that insiders as a whole bunch of some mrs as such so i get some maybe talk to me how does yes chat integrated with existing knowledge base good or performed on beings are some other muslims mores and to chat boards with public information and than any any code on pricing on any of the new songs
spk_2: recent announcements and china or the cms
spk_3: to erotic are two different question there i'll start off with that sort of what is how do we think that we'll build his livery a a a a better experience and i i think dick the key that we're delivering an enterprise experience and what that means is is that
spk_14: as the chat conversation takes place as that back and for takes place with the user
spk_15: the information that the that your remodels has or or they are the sort of narrow information and has is just the information that's in the knowledge base and part of the challenges of course to make sure that you can model do not make up information and one of the cool things were doing is we're combining
spk_13: are large language models expertise with our search offering with our search expertise combined with our knowledge graph expertise in bringing all those technologies together to ensure that when not only has get an answer a question accurately but more specifically that it doesn't answer questions that it doesn't know anything about and that is one of the real challenges with a large line was miles and the way we do that is five for narrowing down narrowing down the dataset and then the more specifically leveraging these large line was miles for what they are which is the ability to search translates natural language into other forms and other other structures the second part around pricing we just announced the yeah said offering we are in a limited data right now as we don't have a pricing model that we're ready to share with the world and same thing with content generation arms and didn't know that on this guide for us does this is coming up with you already had codified defy the be had been associated with self and a whole your this the emphasizing know that exceeds and these arms and then no more
spk_4: and our partner relationships so maybe some it's easy to quantify an incremental revenue and increment of either
spk_13: i'm going to headwinds that you're assuming
spk_0: in the current system your night
spk_16: i had a thorough thanks for the question you will we can say is your wheatley laid out sort of a couple different headwinds in in my section and when you look at the the those in the aggregate we think the impact impactor year over year revenue growth is in the low single digit percentages
spk_17: we haven't really gotten into you know how that sort of them to either da but you can see the yeah that's a pretty good increase in in ybor from fiscal twenty three to our fiscal twenty four god's we've certainly made a lot of really great progress this year on your generating efficiencies it'll be sustainable
spk_16: i'm good thanks my sentence the next question comes and arjun but yeah six million black please go ahead
spk_18: and thanks for taking questions and maybe second to continue on their generative a i conversation i'm curious where you see he acts chat fitting into the broader picture with just answers and am i'm trying to envision a customer use case
spk_3: is there
spk_2: room for a customer to adopt both yaks chat and the axed answers or does generally i am national language responses
spk_3: replace the need for of semantic search a customer may have on their website yeah so
spk_16: the best you think it is is that is good be multiple digital experiences that exists in the world as much as one is that sort of like one digital exchange to rule them off with or be mobile with or be web it be messaging and chat with or a commerce experience they're all different experiences are offering against seems the same information so there are certain the experiences that may call for more of a messaging experience or something where you want to have an exchange that's more penis or even like and and that might be the the best the best scenario maybe that's sort of a earth example of like a shopping in or or even like just with you're handling support use cases there are other examples where you want to have feel free form full results sets that you can visualize and you can interact with like in a calmer setting or something like a locator it does it does or or other just different they're different user experiences that there's somebody may want to deliver and so as we have expanded our digital experience offering and expanded to set of proposal pieces
spk_3: or building blocks of our platform we want to give our customers the option you give given the choice want to give them the widest breath of tools of building blocks a day that they can possibly have in order to create as many different experiences are they like okay got it that that's helpful and then just taking a step back as we think about or the new product announcements syriacs chat your cms solution to self generating cms rather
spk_15: are these where are we in just a development and
spk_14: of these products and getting them to a fully functional level and and from a financial perspective how should we think about just a timeline of when we start to see an impact on revenue and and customer adoption from the solutions
spk_2: so we talked about cancer generation being there as part of our spring release which will love be coming out in a in a few weeks for yes chat we're in a were in a early stages of a of as have a the right now with actually are beginning to to launch a handful of a to customers and so for us you know we're looking at you know getting those guys were successful and then build towards the back half of the year the middle opening up here to opening up to a much much wider audience
spk_16: thank you
spk_0: it just about like you know when it went to a sexy financial contribution as a i think it goes to the way the only answer that questions because the way we think about how we got a market right so you know we're not necessarily thinking of these things as point solutions were thinking of them as digital experiences that we're gonna help enterprises deliver more effectively and so depending on the company them they say may have all they may need all of these visual experience experiences the mail and eat some of them and the the modularity the platform the ability to to take pieces of it and make it all work off the same knowledge graph and the same set of models and technology is one of them is what as one of those in a really compelling things about the the platform so you know were have
spk_5: the a as we said before we will and with one solution or many solutions depending on what was tough my for the customer our our goal is to prove the power of combining asthmatic search and large language models with the knowledge graph in an enterprise setting and once we done that than the the up sounds
spk_19: cross motion is is is obvious because you've already compose knows grass and you can send layer additional experiences on that seamlessly
spk_2: got it that's helpful thanks putting the questions as a reminder to ask the question in a press stars send one on you tell us and keep hat the next question and some of ryan's mcdonald's this needham please go ahead hey thanks for taking the question this is match and for ryan nice to see some recovery and the dollar base retention the corner and looks like games were stronger in the third party than the direct segments will draw the difference in the corner over corner recovery and what gives you guys compensate que three was the trough for those metrics and that you can continue to build off of the success he started to see and in queue for over the course and f y twenty four darlings the numbers questions i'll say qualitatively it i think we we we can feel this and we can we can see this field us in our customers engagements we
spk_20: you know what what drives the gross attention numbers is obviously customer satisfaction we talked about this quarter after quarter
spk_4: yeah was not fun and you wanted you to to speak with every customer who left us and here's or jones and hear about you know the reasons why so i can tell us the i haven't stopped speaking to customers i talked to him all the time every opportunity we get and in our our our focus on customer satisfaction making sure that i not only do
spk_20: i want to continue using the price of they're using but they want to buy more for us is is is taking hold and so qualitatively we feel really good about the progress we've made their
spk_1: as we entered a new year here where will go through the same size
spk_20: yeah
spk_19: upper an already rams that we see every year and i think we'll just keep getting better this year mazda's giles the third to as a casella numbers you have to was you make sure it's clear in we moved from earth the the legacy method that we were doing
spk_2: to calculate never attention on on revenue over to a or are here errors and more forward looking metric are also disclosing air or at the end of each period so we thought it would be useful to provide a retention rate based on that same basis in just to help provide some for so little more clarity said the the that compares to the revenue rate to the error rate are generally pretty close pretty close within your one to two percentage points each quarter but you're going forward will continue to provide this on the air or basis as it winds up pretty neatly with our a or are disclosures so wouldn't when you think about that you know the the higher gross retention that we saw in to for in the in the high eighties is certainly helping move that in me a move the net retention metric in that direction got it and how to appreciate the color and then appreciate the earlier comments on some of the do see sweet additions the newseum own you see our our that they've been in the sea for you know four to six months maybe a little longer as you look to start the new fiscal year what strategies would you say that they're the most focus on and how is this informing some of your initiatives for the coming year yeah so i think we're roughly four months for time and roughly six months for around and you know when we are these leaders one of things i told you was you know with with sell cycles in the sixty six to twelve months range
spk_0: the takes a while to really see the quantitative impact of have a better go to market machine because takes saw the bill that and as you're building at you're definitely getting better at delivering

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