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spk00: Hello, thank you everyone for joining us today and welcome to WishBonds 2022 Fiscal Second Quarter Financial Resource Conference Call. My name is Angelica and joining me on the call today are Ali Tashkander, Chairman, Founder, and CEO of Wishmont, and David Pies, the company CFO. This call is being recorded. We'll be having a question and answer session at the end of the call, which will be limited to analysts only. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion and analysis from cedar.com. Please note, portions of today's calls, other than historical performance, include statements of forward-looking information within the meaning of applicable security laws. These statements are made under the safe harbor provision of those laws. Forward-looking statements involve unknown and known risks, uncertainties, assumptions, and other factors, many of which are outside of Westbound's control. That may cause the actual result, performance, or achievements to differ materially from the anticipated actual results, performance, or achievements. implied by such forward-looking statements. These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management current expectations and plans relating to the future. We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based except if it's required by law. We use terms such as gross profit, gross margin, adjusted EBITDA, annualized revenue run rate, and monthly recurring revenue on this conference call, which are non-IFR. Angelica Valenzuela, I frs and on gap measures for more information on how to how we define this term exclusive refer to the definition set out in our management discussion and analysis, and with that, let me turn the call over to Mr Ali Tashkender chairman and CEO.
spk02: Ali Tashkender, Thank you very much, Angelica good day everyone, we hope that you're all keeping safe and healthy we truly appreciate everyone for joining us today. We are very pleased with our second quarter results, which proved to be the strongest quarter in the company's history, with revenue of over $5 million in the quarter, representing 55% year-over-year growth compared to the same period last year. During the second quarter, we achieved two significant milestones. First, WishBond surpassed $20 million of annualized revenue run rate. And secondly, the company achieved positive cash flow from operating activities. I'm particularly proud of having achieved positive cash flow from operations in the second quarter, as that puts Wishbone in an elite class of software companies. Technology companies are known to burn lots of cash for many years before becoming cash flow positive. Very rarely do you find a software company of our size with $20 million in annual revenue run rate, that generated positive cash flow from operations and is also rapidly growing with 30% to 40% organic growth. Wishpond truly is a unique, high growth, profitable company, and we remain committed to delivering profitable growth in the future. Despite the current challenging business environment with high inflation, increasing interest rates, and recessionary concerns, thus far, we have not noticed any slowing down in the demand for our products. Our sales pipeline remains robust, and our revenue growth shows tremendous resilience despite the current uncertain economic conditions. Wishbone has a diversified customer base of small and medium-sized businesses, and its healthy organic growth over the past year has largely been driven by investments in the company's sales and marketing teams, applying our sales-driven methodology to the acquisitions we've made and new product introductions. Our outlook continues to look promising for the second half of the year with increasing sales, improving margins, and positive cash flows. I will provide additional details on our outlook later on the call. But first, I would like to turn it over to our CFO, David Pace, who will review the financial results for the second quarter. David?
spk04: Thank you, Ali. I am pleased to report that we had very strong second quarter results for the three months ended June 30th, 2022. Our first quarter 2022 results are as follows. Wishpond achieved record quarterly revenue of $5 million during Q2 2022, compared to revenue of $3.2 million generated during Q2 2021, an increase of 55%. Revenue growth in Q2 2022 is attributable to the company's expanded sales team, new product introductions and acquisitions. Wishpond achieved gross profit of $3.4 million in Q2 2022 compared to $2.2 million during Q2 of 2021, representing an increase of 50%, which is driven by an increase in overall revenue. Wishpond's gross margin percentage in Q2 2022 was 67% compared to 69% in Q2 of 2021. The gross margins are within the company's historical range of 65% to 70%. The United States remains our largest and fastest growing market, generating 69% of our total revenue in the quarter. with approximately 15% and 16% of revenue generated from Canada and the rest of the world respectively. During Q2 2022, Wishbond achieved an operating loss of $659,000 compared to an operating loss of 1.1 million in Q2 of 2021. The operating loss reflects continued investment in sales and lead generation, as well as in product development. Earnings before interest, tax, and depreciation, or EBITDA, improved from negative $1.3 million in Q2 2021 to negative $527,000 in Q2 2022. During Q2 2022, WishBond recorded an adjusted EBITDA loss of $192,000 compared to an adjusted EBITDA loss of 320,000 in Q2 2021. The improvements in EBITDA and adjusted EBITDA are primarily driven by higher revenue, recent cost savings initiatives, and operational efficiencies achieved in the latter half of the quarter. In Q2 2022, Wishpond returned to net positive cash provided by operating activities of $81,000, compared to a cash burn from operating activities of $802,000 in Q2 2021. We continue to have a clean and healthy balance sheet. As of June 30, 2022, Vishpon had $2.5 million in cash and cash equivalents, and the company has no debt. Vishpon has a $6 million secure revolving operating line of credit facility with National Bank of Canada's Technology and Innovation Banking Group, which remains ungrown as of today. In summary, Vishpon is in a very strong financial position with a healthy balance sheet, solid monthly recurring revenue, and very good visibility on revenue and cash flow for the current year. Vishpon is able to continue to grow comfortably from its cash flow from operations without the need for any additional equity dilution or debt. I will now provide an update on our normal course issue of bid or share buyback programs. On June 15th, 2022, the company announced the renewal of its normal cost force issuer bid, or NCIB, was approved by the exchange. During the second quarter, the company did not make any share purchases under the NCIB. In comparison, in the first quarter of 22, the company purchased 130,100 common shares under the NCIB for aggregate consideration of $157,265. The Board of Directors of WishBond believes that the recent market prices of the company's common shares do not properly reflect the underlying value of such shares, and that the purchase of the shares would be a desirable use of corporate funds in the best interest of the company and its shareholders. Hence, we intend to reinitiate share purchases under the NCIV program in the coming months. I would now like to provide some additional commentary on our recent cost reduction initiatives and operational efficiencies. I'm pleased to report that the company implemented several cost reduction and operational efficiencies during the second quarter designed to conserve cash, which have resulted in the company expecting to realize more than a million dollars in cost savings over the course of the next 12 months. The management team spent a considerable amount of time on this project, and we are very happy with the results of this effort so far. The following are some of the key cost cutting initiatives. Since completing five acquisitions over the past 18 months, we have slowed down our rate of acquisition activity, and we also cut our corporate development costs relating to sourcing new acquisition targets. With fewer acquisitions, we were also able to reduce the company's legal and professional fees. We have implemented this hiring freeze in most areas of the company. We have implemented a number of optimizations and improved workflows and procedures that allow us to maintain the size of the lead generation team, even as the number of account executives grow. The net result will be a lower amount of sales and lead gen expenses as a percentage of revenue. To optimize our lead gen capabilities, we have implemented AI or artificial intelligence technologies to run certain campaigns, thereby eliminating labor intensive processes and costs. From a technology perspective, we were able to consolidate some of our subscription and software costs across our acquisitions. We have also optimized our AWS and cloud storage costs. We are committed to having a focused mindset on realizing cost efficiencies while keeping our foot on the pedal of our sales generation engine. The company's financial success is predicated on increasing our revenue while running the business cost effectively. This concludes my financial update, and I will turn the call back over to Ali.
spk02: Thank you very much, David. I would now like to share with you some recent business updates. on july 12 2022 the company announced the launch of our all new website builder product that includes lead tracking and segmentation tools personalization abilities advanced forms and pop-ups integration with wishbone's email marketing tool referral marketing calendar functionality pop-ups and more Every element of this groundbreaking website builder has been designed to help businesses generate leads and sales. The website builder is expected to increase customer retention, reduce churn and increase customer satisfaction. On April 20th, 2022, the company announced that the number of WinBax customer installations had increased by over 50% since we acquired the company. We are encouraged to find that certain customers prefer Winback because of the benefits of SMS over email or newsletters as a marketing tool and helps them to build customer loyalty more easily. We are working on several initiatives designed to maximize growth from Winback, such as adding a number of features to improve the customer onboarding process and increase product effectiveness. We are also integrating Winback into the WishBond platform to encourage ease of cross-selling. We began accelerating the growth of Winback's customer base through our outbound sales engine and are speaking to several agencies about how we can partner with them to sell Winback. On April 1st, 2022, the company completed the acquisition of certain assets and specific liabilities of Viral Loops Ltd. is a software as a service, or SaaS company, which helps its customers design, create, and manage campaigns that result in higher referral visits and revenue for their clients. In consideration for the Viral Loops acquisition, Wishbone provided a cash payment of $1,380,000 US and a one-time one-year performance earn out that may be paid in cash or by the issuance of company's shares at the sole discretion of the company. The one-year earn out will be based on the projected revenue of the business and is payable on quarterly basis. The Viraloops integration has been progressing very well. We have started leveraging our sales and marketing as well as our R&D teams to enable more efficiencies and growth of that business. For example, we're beginning to integrate the Viral Loops product with Wishbone products to enable a higher average revenue per user bundled sale. We expect to begin realizing the results of these efforts in Q4 and onwards. The product complements Wishbone's other products very well, and we will be making some specific announcements about Viraloops product integration and product pricing plans in months ahead. We are proud of the Viraloops team and welcome their creative energy as they begin to work with the rest of the Wishbone family. Viraloops was our fifth acquisition since the company's public listing in December 2022, sorry, 2020. One of the reasons for doing a public listing was so that we could pursue an acquisition strategy. Our acquisition strategy has been a resounding success as it has broadened our product offering, boosted our revenues, and increased our customer base. Think about this. When we went public, we had approximately 2,000 customers, and we achieved $7.9 million in annual revenue in the year 2020. Today, just over 18 months later, we have over 4000 customers and we have exceeded $20 million in annualized revenue run rate. Our acquisition strategy is working and that's complemented the company's organic growth very nicely. I would now like to take this time to talk about Wishpond's resilience against a range of recessionary impacts. We believe that Wishpond remains well positioned for continued growth with increasing revenue and improving cash flows in Q3 and Q4. Our current sales pipeline is robust, and we have continued to achieve revenue growth despite the current turbulent macroeconomic environment. The success we are achieving indicates that our products and services are valuable tools for our customers who rely on WishBond to generate leads and increase their sales, especially when operating in this uncertain business climate. WishBond is all about helping small businesses grow. That's our purpose. Big businesses have armies of online marketing specialists, designers, and programmers. And they have access to best in breed technology and plenty of financial resources. And trying to compete with them is very difficult. Wishbone is the platform that makes it easy to use online marketing to bring in new sales and leads without tons of resources and deep expertise in marketing. And that's something that is valued in this market more than anything. In an economic down slowdown, companies often reduce or freeze their budgets on their in-house marketing and sales staff. or on individual fragmented marketing solutions. However, they still need to acquire new clients to keep their business afloat. And so businesses looking to cut costs find value in Wishbone's all-in-one consolidated software platform, which costs a fraction of all the individual products it would replace. Wishbone is an effective, low-cost alternative that is more likely to thrive in a recession. As I mentioned previously, Wishpond has a diverse customer base of more than 4000 businesses with very little customer concentration and financial dependence in any one industry. We serve a wide variety of industries, which provides us with the ability to shift focus quickly if market conditions adversely affect any specific industries. In addition, our organic growth rate does not show any signs of slowing down, and we're getting more new clients than ever before. These clients are increasingly signing up for our annual 12-month terms, which provides us with further stability in case of any economic downturns. Furthermore, the cross-selling opportunities provided by our acquisitions also improves the stickiness of our platform and aids in retaining customers for longer periods of time. Moreover, with the company's focus on profitable growth, Wishpond is scrutinizing all discretionary expenditures across the organization with the intent of optimizing operations, achieving cost saving synergies, and remaining cash flow positive for the second half of the year. The company embraces a low cost structure with a virtual head office and a remote team, which allows Wishpond to operate with lower overhead costs. Wishpond expects to achieve Record revenues with positive adjusted EBITDA and cash flows in second half of the year, driven by increased capacity in company sales team, positive contributions from his acquisitions, increased bundling of his products and services, new product related revenues, and favorable seasonal effects in Q3 and Q4. In line with the company's focus on profitable growth, Wishbone will continue to scrutinize all discretionary expenditures across the organization with the intent of optimizing operations and achieving cost savings synergies. The company has a clean balance sheet and is able to continue to fund the growth of its sales team and new product launches from cash flows from operations without having to raise any additional equity or debt capital. Wishbone expects its sales to benefit from seasonality in the second half of 2022. This is due to small and medium-sized business customers increasing their spending to invest in various online marketing campaigns, contests, and promotions to maximize their revenue from the increase in consumer spending during the back-to-school, Thanksgiving, and holiday seasons. Wishbone's fundamentals remain extremely strong, and we are very positive on our future outlook. We don't see demand slowing down because of two major reasons. One, our organic revenue growth is driven by our outbound sales team. Last year, we increased the size of our sales team from 12 to 24 account executives. This year, we are currently at 36 account executives, and we plan to have approximately 40 to 45 account executives by year end. We are generating significant demand for our products by ourselves. The sales team's calendars are completely booked for demos with no slowdown in sales activity in sight. Two, we have a solution that is unique, integrated, and cost-effective, making it more appealing to small businesses than ever before. Instead of having anywhere between three to six different marketing-related point solutions, small, medium-sized businesses would rather have just one solution from Wishbone, Furthermore, businesses keeping a close eye on their costs or looking to cut costs find Wishbone as a much cheaper alternative to an internal marketing person or a complement to an internal marketing person instead of expanding. We believe Wishbone has the most complete and comprehensive integrated marketing platform available for small, medium-sized businesses. Both our existing customers as well as the acquired customers are benefiting from the range of online marketing options that we provide under one roof. We are very satisfied with the features and functionality of our overall platform. We've already successfully created integrations between the different products across the acquired businesses, and we've implemented cross-selling capabilities. We are now developing bundled pricing plans that bring the most value for our customers. Our development team is working hard to build additional integrations, single sign on capability and a single dashboard for all the products in one integrated platform. In terms of acquisitions, we do not expect to be making acquisitions at the same pace that we have been doing over the previous 18 months, especially given the current economic environment and the weakness in capital markets. We previously evaluated approximately 400 opportunities as potential acquisition targets, and we continue to remain in contact with some of these targets and receive new inbound acquisition opportunities. Wishpond continues to experience strong performance across all its businesses. with robust demand for its products. Based on current MRR trends, monthly recurring revenue trends, we are very optimistic about the outlook for 2022 and beyond. Before closing, I would like to comment on the recent decline in our share price. As everyone on the call is aware, our share price has experienced a decline since the beginning of the year. We do not believe this drop in our share price is warranted, given our fundamentals remain extremely strong and we are very positive on our future outlook. We believe the general capital market conditions are the primary cause for the weakening in our share price and small cap tech stocks have suffered the worst in this market correction. In closing, I want to thank all the employees at Wishbone whose hard work continues to elevate the company to higher levels. We want to thank our customers who rely on us to help them with their digital marketing needs and growth. Also, I'd like to thank you all for joining us on this call today. We look forward to providing an update next quarter. Thank you. And I will now hand it back to Angelica for questions.
spk00: Thank you, Ali. With that, we will now open the call to questions. Just a reminder that the questions will be limited to analysts only. Okay, the first question is from Gabriel Leong, Beacon Securities. Please go ahead, Mr. Leong.
spk03: Hi there, and thanks for taking my questions. Just a couple of things. First, Ali, I'm curious, with the focus around um you know cost savings initiatives and implementing a tech to uh to improve the efficiency of your sales group um and and still with the expectations though of growing organically by 30 to 40 percent year over year have you guys thought about um you know how your ebitda margins might scale uh into a calendar 23 obviously you're targeting positive for the second half i'm curious what are some near to mid-term ebitda margin targets that we should be thinking about um
spk02: I don't think we've openly discussed any of those targets and we haven't given a specific guidance on EBITDA. But having said that, I think you can see the trend already that in Q2 our EBITDA improved significantly. And you have to also keep in mind that coming out of q1 april was kind of the weaker and every month became stronger and stronger and more of the cost efficiencies were put in place and the the second half of the quarter in terms of evito was even stronger and we're already talking about the uh you know second half of the year to be cash flow positive um adjusted positive and all of those things i think your question is a very good one and it's something that we we keep in mind uh all the time which is we want to we want to have the right balance of aggressive growth and making sure that we're financially responsible and profitable Right. So that is going to be our focus going forward. And naturally, as we scale and the fixed costs don't scale at the same rate as the revenue that is picking up, we're going to see two things happen. Our margins are going to improve. Our margins are already, you know, compared to Q1, you see, you know, 67 percent. But we expect it to continue to improve and get above 70 percent. And we also expect our EBITDA to improve as well. To what extent for next year, you know, we're not giving specifics on that.
spk03: Gotcha. Thanks for that. And just one last quick thing. I just wanted to confirm, I know you guys had talked about implementing a hiring freeze, but at the same time, though, you are still planning to increase that sales rep count from 36 to 40 to 45. Is that still the case? That is correct.
spk02: So what we're doing is we are very careful about increasing those people. So it's not a black and white hiring freeze. We're kind of scrutinizing every single decision before making it. As an example, even that 45 target for account executives, previously we were talking about 45 to 50, and now we're seeing that, no, we can find efficiencies with the same account executives bringing more revenue. And We can do the same or even better than what we expected with 40 to 45 account executives. And we have to be careful at the rate that we add these people to the company. But again, it goes back to your first question in terms of EBITDA. We are still very much a growth story here, which means that even though we're very careful about our cash flow, we're going to invest in areas But we're more careful than ever before in what we invest in and if it makes sense or not. But as an example, account management and support to service the clients that we've onboarded, you know, meeting sales targets and adding account executives to make that happen are still going to continue.
spk03: Gotcha. Thanks for the feedback and congrats on the progress. Thank you very much.
spk00: Great. Okay. Our next question is from Daniel Rosenberg of Paradigm Capital. Please go ahead.
spk06: Thanks. Hi, Ali. Hi, David. I wanted to ask around the cash flow. It was nice to see you turn positive and guide to more positive cash flow for the back half of the year. I just want to understand directionally, given you mentioned some seasonality. as well as just general working capital changes. Should we expect cashflow to scale or is this going to be a lumpy type line item? How do you see it going?
spk02: I think, you know, I'd like to ask David for his thoughts as well, but I'll share, you know, my thoughts on that first. The way we're operating right now is even excluding seasonal, positive seasonal effects helping us. we expect to continue to be cash flow positive and deliver cash flow positive for the next half of the year. And to continue the current trends and even in some of them accelerating that. Seasonal effects are just going to help us even that much more. David, anything else you want to add to that?
spk04: Sure, Ali, and thanks, Daniel, for the question. In terms of cash flow, we've generally talked about things like EBITDA and adjusted EBITDA. The good news when you go straight out of the cash flow statement is you can give a gap-based context to saying, listen, just look at my cash flow statement. My cash flows from operations are positive. So we wanted to highlight that because in previous quarters, it was not. Your comment on variability of working capital is a good one. It may or may not go up and down. But so long as the profitability is there in the business, which it seems to be improving, I think directionally, just like Ali said, we'll be good for cash flow from operations staying positive.
spk02: Yeah, I think, thinking about it, Daniel, the main thing for us is that it's not just what we tell the investors in the company and the broader market. It is a matter of making sure that the company is safe and set up for success long term. And, you know, there are a lot of different numbers in terms of EBITDA and adjusted EBITDA and cash from operations and this and that. At the end of the day, the number that I asked the team to report to me every Wednesday at 12 p.m. is how much money do we have in the bank account? And, you know, really pure and simple. That is the number that we focused on seeing grow, not decline. So this is something that is part of our strategy going forward as well and is going to continue improving.
spk04: Yeah. And if I can make one more point, you know, the cash decline, if you look at what a cash decline, all of that came from amounts that we spent on acquisitions or payments for earnouts. So, again, if you look at Q1 to Q2, any decline in cash balance came specifically from those transactions. and not from cash flow from operations. So we want to highlight that very clearly that says, listen, our business is really doing well. Gravity growth has increased. We're really keeping costs under control. And here's the results. The results are evident for everybody to see.
spk06: Thanks for that. And to that end, it does sound like the past acquisitions are performing really well and achieving their targets. Just curious to hear, were there any surprises on your end that you saw now that some of these acquisitions are well integrated or even just newly acquired that are performing better than expected?
spk02: I think, Daniel, I think one thing that we were quite excited to see was we always had this mandate of making these acquisitions for financial reasons as well as strategic and have the cross-selling opportunity and everything else. What we validated also with our customers and through new bundled sales packages was that as we put these products together, let's say you're a small business that comes to us and we say, listen, with our website builder, we can actually migrate you or redesign your website on Wishpond platform on Wishpond website builder. And you're a B2B kind of business. You need to send sales emails. And Persist IQ is going to be bundled part of that as well. And you want referral marketing capabilities. And that's going to be from Why Run Loops. And you need some SMS marketing that comes from Winback, as an example. And all of those you get as part of your subscription to WishBond. And seeing how well our customers are responding to that. And, and the value that that is creating allowing us to charge higher monthly prices for the software subscription alone has been something that. We expected, but now we're validating and we were seeing and it's super exciting to see, and I think that's going to be a huge factor going forward so. The way to look at the acquisitions we've made so far, and hopefully in the future, is that they all need to have that multiplier effect that in addition to them themselves on their own being able to grow, they can help Wishbone as a whole become a stickier product, a faster growing product, a higher average revenue per user product offering, and really the best solution for small businesses. And that is really being realized right now.
spk06: That's good to hear. And lastly, for me, before I pass the line, I was just curious around retention. Are there any patterns you're seeing in the types of customers or verticals that tend to be stickier versus some churn you're seeing? Just any characterization there.
spk02: And generally what we do see is that, you know, there's e-commerce companies and B2B businesses and service-based businesses. What we're seeing, well, not what we're seeing, but what we're intentionally doing is we're diversifying the new customer acquisitions that we have more than we did in the past year. With everything that was going on in the world with COVID, e-commerce businesses were doing the best and we kind of focus on new customer acquisition uh around e-commerce more and now we're with with businesses having opened up now we're adding the b2b businesses and the rest of the service businesses more in that and generally with e-commerce businesses some of them are quite small and you know there they might be a shopify store that just opened and you know they might not be as established and sometimes you know stickiness could be a problem just the risk of the business itself not existing is higher than, let's say, a B2B business or a more established service-based business. So we do see that. In terms of trends within our business, though, we haven't seen any choppiness. We haven't seen a negative trend. It actually has been improving over time. And that's something that now with some of the bundled packages that in the future we will announce, we expect it to improve even further.
spk06: Thanks for taking my questions.
spk00: Thanks, Samuel. The next question is from Chris Thompson of PI Financial. Please go ahead, Chris.
spk07: Great. Thanks, Ali. Did I just hear you say your churn is declining? Did I get that right?
spk02: Overall, yes.
spk07: Okay, good. And happy to hear you guys being so positive on the outlook. Can you give us any anecdotal evidence? Is MRR tracking higher in July and August versus June?
spk02: that's more a question of what i can disclose um david what have you already talked about i think some of the things we talked about in the um in the the pre preview of the earnings we already talked about that every month we were hitting new mr records and coming into q3 I guess you can really put the pieces together. We're almost more than half the way through Q3 and we're so bullish on Q3 and Q4. So I think that tells you everything you need to know.
spk07: Okay. And just, Ali, you mentioned more clients are signing up for 12 months terms, which is really great. Are you guys, do you have the ability or the willingness to break out self-managed versus fully managed revenue maybe in future quarters? I don't know if that's a question for both you and Dave.
spk02: I mean, in our investor presentations, generally, we've given some percentages about what the breakdown is. And we're going to make some updates to that and we'll definitely share that. So, yeah, yeah.
spk07: Okay, fair enough. And just... maybe a housekeeping one and I'll get back into the queue. Just the headcount, I think you're at 265 at the end of Q1. You know, it sounds like you're maybe a hiring freeze or some natural attrition. Like where's your headcount at the end of Q2? Maybe where are you now? Just kind of help us, you know, understand your kind of op-ex and your op-ex per headcount.
spk02: Yeah, yeah, very good question. So David, do you want to take that one?
spk04: Sure, yeah. So at the end of Q2, we had about 270 people. So it's a marginal increase. But keep in mind that we brought in on April 1, we completed the Viral Loops acquisition. And so we brought in a new team. And so net net, if you add the Viral Loops people, it wasn't a very big team. That was about 12 people. You know, we've actually scaled back slightly on our hiring. And, you know, and we're keeping that under, you know, keeping a close watch on that.
spk02: So more or less, I think the same headcount, all things considered. But I would say average cost per employee is probably lower because some of the natural attrition was on some of the higher salaried employees versus some of the account management team members and other team members that might be lower costs.
spk07: Okay. And on the account, Zach, you only added one net in the quarter. I suppose there was some attrition there, like just help us understand how seasoned are those 36 bodies now. And, you know, is it going to take time for a bunch of them to get up to speed so they can convert, you know, demos to, you know, customer acquisition?
spk02: Yeah. The ones that we have right now, I think almost all of them are fully ramped up. So we, we don't have that problem and we're now, um hiring more people to to first get to around that 40 account executive so there's a new cohort that is going to start soon okay good luck keep it up guys thank you thank you chris thanks thanks chris so the next question is from neil bakshi of canaccord please go ahead
spk01: Hi, and congratulations on the strong quarter. Thank you. I guess the first question, you mentioned that just following off of what Chris was asking about the more customers signing up for annual contracts and your formal remarks, just wondering if you could provide more color on some of the size of these potential customers. Are you seeing just a general uptrend in terms of the size of businesses as you're shifting within the SMB space?
spk02: Hamed Nademiya, And it is comparable to what it was before slightly increasing yeah so it goes back to that comment of diversifying the customer base so we're seeing slight uptake in terms of the size of businesses, but very much still centered around small and medium sized businesses.
spk01: Right. And then within that space, you know, as you're bundling more of the services and driving higher MRR, is it part of the intention to go after potentially larger customers within that S&P market? Does that seem to be, you know, as you're chasing after, you know, 500, 600 and then beyond in terms of MRR? Is that part of the intended kind of growth strategy for the outbound sales?
spk02: well i think the the that's part of it and there are some really interesting partnership opportunities as well that we're looking at some some larger clients that is part of the strategy but this really is a mix right there's no silver bullet really it's uh as they say um a thousand lead bullets and but primarily um i i think what is very interesting is that again when you think about it, there are millions of small businesses that are underserved. We're serving 4,000. We're doing a great job with them. We're growing very fast. But there's so much underserved opportunity And we're such a good solution for this group that I think the best opportunity that we see is continuing to roll it out and reach out to more of the base. Naturally, we will also balance that with some larger customers as well. That's just expected.
spk01: Okay. And then just one question, one, just last question on that one. I guess, are you seeing anything in terms of, you know, sales cycle lengths with, you know, potentially larger customers or just generally comparable size customers in terms of securing and converting to revenue compared to say, you know, earlier in the year just trying to understand in this market, if there's some more time being taken.
spk02: Not really. I mean, The sales cycle for our base is very short. We're talking about three to four weeks to closing. The only thing that maybe we noticed a little bit was in July, it took an extra week to close because some people were on vacation on average. And then in August is actually on the other side. Maybe they came back from vacation. But again, we did really well in all of those. Overall, I guess if your question is, are you seeing more hesitance from the customers we're talking to? No, we're not seeing that.
spk01: Okay. All right. Great. Thank you. And congratulations again.
spk02: Thank you, Neil.
spk00: Thank you. Okay. Our last question is from Christian's Grove of Eighth Capital. Please go ahead.
spk05: Ali and David, thanks for taking my questions today. The first one I wanted to jump into is on the core product, Ali. And I know the Wishpond platform has grown a lot through M&A and with integrations. So I'm curious on your core go-to-market efforts. Is that selling the broad Wishpond suite as a self-serve package? Is that where you start customers? And that's probably where you're getting into bundling and other creative pricing options. But what's the default offering right now for customers when you go to market?
spk02: We will share more details on that. But a little bit preliminary on that is that with new customers, if they come to us inbound, a lot of times the default is self-serve. And I'm talking about Wishbond. If you talk about, you know, win back or purchase IQ and all that is different. So it's not all the same. But the biggest sales engine that we have is on Wishbond, you know, historic company. And new customer acquisition through outbound a lot of times the default is fully managed which is itself is a hybrid of self-serve and some services bundled together now what we what we've started shifting towards is these packages the bundled packages that you rightly assume are a bundle of different platforms that we've integrated and we've acquired that then the starting point actually is self-serve and services are add-ons to that so that dynamic is being shifted and and it's going to be a gradual rollout you know initially putting fewer account executives and then over over a course of three four months switching all account executives to that okay and so probably can't think of the business as narrow-mindedly as you know self-service is fully managed but from your comments earlier ali it sounds like
spk05: Fully managed is still the longer term contract, higher dollar value and stickier part of the platform, right? Is part of the strategy to push that?
spk02: Well, no, not really. Actually, the self-serve packages, the bundled packages that we're rolling out are also for the same 12 months. Average deal sizes are comparable the initial first year. And we expect LTV long term value to be substantially higher, actually, because they're a lot more sticky. Again, think about it. If your website is running on Wishpond and all the LMS that I talked about are on Wishpond and you want to cancel, it is a lot more difficult than if it is not tied into your back office and the business processes with those softwares and if you weren't using the software as actively. So we expect LTV to be much higher. We expect margins to be substantially higher. And The software packages are reasonably sized for us. They're not too low. But there's still a fraction of what it would have cost them to get point solutions.
spk05: That's really helpful, Ali. I didn't appreciate it all up before. And thanks for the call there. That's all for me. Thanks for taking my questions. Thank you, Christian.
spk00: Thank you. There are no further questions. So I'll now pass the call back to Ali Tashkander for closing remarks.
spk02: Thank you very much, Angelica. So in closing, I want to thank everyone once again for joining our call today. Thank you, the analysts, for your questions. As always, very insightful. I look forward to getting into more discussions. And everyone, please stay safe and healthy. We look forward to providing you with more updates this year. Thank you very much.
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