GTM - NASDAQ

Good day, and thank you for standing by. Welcome to the

Thanks, John. Welcome to

Thank you, Jerry, and welcome, everyone. Today, more than ever, go-to-market teams are looking to do more with less, and the

Thanks, Henry. Q3 was another quarter of consistent execution and we again delivered results that exceeded our expectations and guidance. We prudently adjusted our expense profile driving better-than-expected profitability in the quarter and showing the inherent leverage in our model. We are pleased to be in a position to again raise our top and bottom line guidance for the year. While we are more insulated from macro challenges relative to many companies and we benefit from long-term secular trends towards digitization, we are not immune to the macroeconomic environment in the short term. Towards the end of Q3 and as we entered Q4, we saw a greater level of financial scrutiny from buyers, which further elongated sales segments. All deals, including straight renewals are requiring more effort to reach an outcome, which stretches our sales team and capacity. As reps are spending more time on renewals, we see that their capacity to drive incremental upsells is becoming a limiting factor to growth of existing customers. As a result of the more challenging environment, we now expect dollar-based net retention in 2022 to retrace the gains that we were able to achieve in 2021. In short, we are taking a prudent view of the near-term growth expectations for Q4 and 2023 until we see more definitive signs that the economic environment is improving. That said, we are still raising our guidance for the year and are confident in the value proposition that we deliver to our customers. For 2022, we now expect revenue to be in the range of $1.04 billion to $1.096 billion. We expect adjusted operating income to be in the range of $442 million to $444 million. At the midpoint, this represents revenue growth of 47% relative to 2021 and adjusted operating income margin of 40%, and we expect to deliver more than $1 per share in unlevered free cash flow in 2022. In Q3, we delivered GAAP revenue of $288 million, up 46% year-over-year, which implies 7% sequential growth compared to Q2 2022 as adjusted for days in the quarter. Excluding the impact of acquisitions in the first 12 months, we maintained organic revenue growth for the quarter at 42%, consistent with Q2. Adjusted operating income in Q3 was $118 million, a margin of 41%, the highest level of margin performance in the last 12 months. We continue to place an emphasis on efficiency and profitability we expect to increase adjusted operating margins over time. Turning to the balance sheet and cash flow. We ended the third quarter with $445 million in cash, cash equivalents and short-term investments. Operating cash flow in Q3 was $86 million, which included approximately $18 million in interest payments. Unlevered free cash flow was $100 million for the quarter or 84% of adjusted operating income. While this was consistent with seasonal patterns, we are adjusting our cash flow expectations in the short term to reflect the potential for more flexibility in payment terms related to a worsening macro environment. With respect to liabilities and future performance obligations, unearned revenue at the end of the quarter was $381 million and remaining performance obligations, or RPO, were $979 million, of which $757 million are expected to be delivered in the next 12 months. We believe that calculated both billings, bookings and RPR and precise metrics to assess in-period activity in forward momentum. If you are analyzing similar metrics, it is important to remember that the comparative period of Q3 2021 should be adjusted for acquisitions. Because of the inherent noise in those metrics, we focus on days adjusted sequential revenue growth. We delivered 7% days adjusted sequential revenue growth in the third quarter. With respect to debt, at the end of Q3, we carried $1.25 billion in gross debt, all of which has fixed or hedged interest rates, with about half of that coming due in 2026 and the remainder coming due in 2029. With continued growth and profitability, we again drove an improvement in our leverage ratios with a net leverage ratio of 1.9x trailing 12 months adjusted EBITDA and 1.6x trailing 12 months cash EBITDA, which is defined as consolidated EBITDA in our credit agreement. With that, I will provide our outlook for the fourth quarter and our increased outlook for the full year 2022. For Q4, we expect GAAP revenue in the range of $298 million to $300 million and adjusted operating income in the range of $121 million to $123 million. Non-GAAP net income is expected to be in the range of $0.21 to $0.22 per share. Our guidance implies year-over-year GAAP revenue growth of 35% at the midpoint and an adjusted operating income margin of 41%. We are providing updated full year 2022 guidance as follows: we expect GAAP revenue in the range of $1.09 billion to -- sorry, $1.094 billion to $1.096 billion, up $10 million from our prior guidance at the midpoint and adjusted operating income in the range of $442 million to $444 million, up from $435 million at the midpoint of our prior guidance. We expect non-GAAP net income in the range of $0.83 to $0.84 per share based on 411 million weighted average diluted shares outstanding, up from $0.79 at the midpoint previously. For unlevered free cash flow, we expect to generate between $430 million and $435 million as compared to $442 million at the midpoint of our prior guidance. Our full year guidance implies 47% GAAP revenue growth at the midpoint and both adjusted operating income margin and unlevered free cash flow margin of approximately 40%. With that, let me turn it over to the operator to open the call for questions.

[Operator Instructions] Our first question comes from DJ Hynes from Canaccord.

So Cameron, I'll start with you. So you alluded to this in your comments, but we're getting sub-20% calculated billings growth, so 20% CRPO based bookings, calcs. You mentioned this, but sometimes we can kind of glean false signals from these data points. I'm curious, in this case, just given kind of the slowdown you're talking about, is that a decent barometer for kind of organic bookings growth? Or is there something we should be aware of that's impacting these metrics in the quarter?

And certainly, we focus on sequential revenue growth as a better indicator of in-period activity. I think particularly if you're looking at bookings growth and billings growth for that matter, you need to adjust for the acquired RPO and acquired unearned revenue in Q3 of last year. RPO as an example, was close to $24 million of acquired those acquired in Q3 of 2021, it needs to be adjusted for. And billing similarly, I get a number that's closer to 30% when I adjust for those things overall.

Okay. Okay. That's helpful commentary. And then, Henry, maybe as a more strategic follow-up for you. Just how do you think about kind of the investment strategy in a slower growth environment? I mean you already have best-in-class margins. Do you use that to your advantage? And do you continue to invest? Or do you think about getting more measured with your spend, maybe investing perhaps a little bit more kind of behind the demand curve?

Yes. I think, first, we're going to continue to manage the business from a margin perspective prudently. And as we've said before, as growth slows, we expect margins to increase, and that will continue to be a guiding philosophy in our business. That being said, I think where you will see us invest is to continue to build sales capacity and account management capacity in our customer base. We see that as the leverage point to continue to grow the business. And so that would be the area where we continue to invest.

Our next question comes from Brent Bracelin with Piper Sandler.

Cameron, we'll start with you here. You talked about additional layers of scrutiny on new deals and renewals. Certainly not surprising to hear that given the current environment. But wondering if you could provide just another layer of detail around the renewal discussions. Is it just taking longer to close the renewals? Are customers looking to downsize the size of a renewal? Or are they looking for more flexible payment terms from a timing perspective?

Yes. So from a renewals perspective, we're actually seeing continued levels of really high gross retention. So we're continuing to see those renewals happen. And we are -- I think, as you might expect, customers are looking for flexibility in other places, including payment terms. I think 1 of the things about our business, that's important to remember is that we're really driving value for an individual salesperson. And sometimes the decision maker might be a little further away from that pain or the value that we're providing. So I think in a time when people are layering on additional scrutiny on all of their vendors, it takes a little bit more effort for us to make sure that those decision-makers are hearing from the users themselves and how important this is in terms of driving their success and efficiency within the sales and marketing motions. So that incremental effort is obviously weighing on our team, a team that's already really efficient and doesn't have slack in the system to go out and necessarily just put in that incremental effort, which then impacts some of the upsell efforts that we're able to go after.

Helpful color there. And then Henry, certainly encouraged to see several wins and expand outside of the software tech vertical that you're so strong in. I think you talked about Ryder, M&T Bank, FactSet, Unilever. What can you do to to further accelerate the adoption of

One of the things that we're seeing in this macroeconomic environment is that there are industries and companies that are much more immune to the macro changes. You see that in insurance, you see it in financial services. You see it in banking and transportation and logistics. And so we've identified those industries and the companies within those industries, and we're making sure that our sales teams are focusing around those companies during this period of time. And it's mainly a sales capacity opportunity for us to really increase capacity across those additional industries.

Our next question comes from Alex

I guess maybe just a few for me. I guess, first, Cameron, can you talk about just some more color on a couple of things. Maybe days sales outstanding growth exiting September, was the renewal commentary -- was this a couple of deals? Was this 1 very large deals that -- and these renewals that seemly were pushed, are they on track to close this quarter? And then can you be a little bit more specific on the retracing of the dollar -- of the net expansion rate? Is that to $116 million from the end of last year or $108 million the year before?

Let me take the first part. We've already had a number of deals that slipped from Q3 into Q4 that have already closed. Some are sort of larger deals that slipped out of the quarter. And those have already come in. We saw a similar trend in Q2 to Q3. And so that elongation of the cycle we're seeing these deals, again, come to fruition and our gross retention rates have stayed largely the same. And so those are closing. They're just taking longer to close, and we've already seen a number of them come through.

Yes. The way that we think about payment terms. We do see a little bit less kind of upfront annual payments. So it's down about 5% from where we saw last year in terms of annual upfront payments as a percentage of the total deals that we have. We think of the sales outstanding, Ashley, in terms of these billings outstanding and those are a little bit behind where we were previously. But I think most of our expectation is that a number of customers are focusing more on cash contribution, and we're prudently expecting that that could deteriorate additionally. When we think about net retention, we've had improved in 2021 up to 116% from previously, we've been in the mid- to high kind of single digits over 100%. I think that the complexion of retention will be a little bit different than what we saw historically in that kind of mid- to high single digits over 100%. What we are seeing is that gross retention continues to be really strong, over 90%. So we still have customers that are renewing, and we have seen an acceleration in terms of functionality upsells. Where we're seeing more pressure is with respect to the seat expansions and data expansions that we had seen historically. That's the area where we feel our team isn't able to go after as much of the upsell opportunity given the incremental time that they're spending on renewals and deals in general. As a kind of data point, we found that overall, our conversations are effort required to get to an outcome with respect to any with respect to NBOS 20% higher than it used to be.

Understood. And I guess maybe just a broader macro question then for Henry. If we think about where -- is there any concentration of these issues in a particular vertical, like tech or software? Or is it broad-based? Is it 1 geography that may have been weaker than others -- like what was the kind of incremental surprise for some of this from what you were previously thinking?

I think in the second quarter, we saw more of this materialize or more of the environment pressure materialize in Europe and in larger deals. I think in Q3, you saw sort of these cycles elongate really across the board, and so there isn't an area of specific concentration. But then you saw industries that were largely immune to this. And so you saw transportation and logistics and media and insurance and financial services stay largely unaffected here. And so there are areas of opportunity that we are focusing on focusing our sales teams on to sort of shift away from the areas that are less immune right now.

Our next question comes from Phil Winslow of Credit Suisse.

I just want to follow up on the push deals. I appreciate your comments about geography and industry vertical, but is there anything else that's sort of consistent amongst them. Are they really for the multiproduct deals, sort of the multiple components of RevOS? Or are these push deals sort of across the board? Any extra color there kind of from a product level would be helpful.

For sure, when we're selling a consolidated platform, there is a slightly longer sales cycle as we're displacing numerous point solutions. So if you take a look at sort of those 3 companies I talked about Ryder, USI, Taylor Corporation, we consolidated throughout those accounts, sales engagement, conversation intelligence, account-based marketing platforms and data providers, -- and so it takes a bit more time to do those consolidations. That's irrespective of the macro environment. I think what we're seeing as part of the macro environment -- of the macro changes here is just sort of broader based additional levels of scrutiny and review. And so instead of a deal getting done at a director level or a VP level, you see that deal go to a U.S.-based CFO than a global CFO. That not only drags the deal out, but it also drags the time and effort that our account managers are spending per deal. It limits their capacity in that way. More calls, more e-mails, more executive business reviews. And that's really what we're seeing affect our ability to continue to upsell within the customer base.

Got it. And just a follow-up on that. Obviously, we saw a deceleration of sales and marketing spend in Q3, obviously off of sort of elevated organic and organic levels. Cameron, wonder if you could use some color on sort of your expectations Q4 and to your point about sort of managing both margin and growth sort of in the context of sales and marketing efficiency and capacity.

Yes. So we're continuing to invest into sales and marketing capacity. Obviously, we'd love to continue to see improvements in terms of the efficiency that we're getting out of those kind of those investments. Certainly, there is a natural level of operating leverage that we get from sales and marketing. So in this quarter, Sales and marketing as a percentage of revenue is down, but we want to continue to see that drive more and more net new revenues. We're continuing to move forward.

Our next question comes from Mark Murphy with JPMorgan.

Yes. Thank you very much. I'm curious, Henry, when you're out there speaking with customers, I know this just came up recently, but what do you think would come their nerves or in still more business confident? For instance, do you think that they're waiting to see a Fed pivot or waiting to see lower inflation numbers? Or is there some other kind of macro kind of indicators that you think that they're waiting on?

I don't know -- thanks, Mark. I don't know if they're waiting on a macro indicator more than their -- they are experiencing similar levels of additional scrutiny and executive reviews in their own businesses. And I think what they're looking for is the change in that environment. What I will tell you is the largest new business deal and the largest expansion deal in our history, those customers are coming to us and saying, listen, I'm going to forego the next 3 or 4 head count from a sales perspective. And I'm going to use those dollars to invest in

Okay. And as a quick follow-up, I guess I'm curious, what is your gut feel on IT budget flush spending activity at year-end here in Q4? Presumably, you think that, that will be a bit compressed, but do you see that maybe dragging down the 7% days adjusted figure? Is that something that would lower -- that would kind of compress lower even kind of despite the potential for some of that budget flush activity?

And Mark, I'd say that historically, we don't we don't play as directly in the IT budget as many software companies. I think we are purchased largely by a sales leader that's looking at his team and saying, how can I make this more effective and efficient. There effectively creating budget as opposed to dipping into a pool that's set at the beginning of the year. So I don't think we've focused on budget flush as a kind of driver historically and don't necessarily expect that to happen as much this year. Honestly, I feel like in this environment where people are scrutinizing everything or more seriously than they have before, [Technical Difficulty] I do worry that for other folks that need that budget much doesn't exist to the same step that it has in the past.

Yes. Okay. And just here then maybe just in a similar form, do you think that, that 7% days adjusted figure is? I mean, do you think at some point that will be compressing a little bit lower given all the macro headwinds out there?

And we're obviously guiding to a lower level than that. And certainly, our guidance contemplates that there's a wide variety or kind of spectrum of potential outcomes that include a degradation in the overall environment that would drive that.

Our next question comes from Elizabeth Porter of Morgan Stanley.

I wanted to follow up on the payment flexibility that you noted. Is that something that's impacting Q3? Or is that something incremental that could happen in Q4? And any sort of way for us to potentially size what the impact could be from payment flexibility?

Yes. So certainly, it has impacted the year this far, including Q3. We've seen that our annual payments as a percentage of the total is down roughly 5% versus where it had been. Historically, we've always seen annual payments to be more than half of the kind of total, but we are seeing customers that are requiring or looking for additional flexibility. Certainly, that's part of our expectation and guidance that we're -- that it could impact Q4 even more than it has so far this year.

Got it. And then as it relates to the go-to-market strategy, you mentioned you focus -- opportunity to focus on some verticals like transportation, that weren't as impacted, but anything else that you guys are doing just to adapt the go to market to the current environment, whether it's focusing more on the existing or new or moderating Europe? Any color there would be helpful. .

Yes. One of the things we've done, we've made a number of personnel moves across the account management organization to make sure that we're building in more capacity for our account management team. So that they're able to drive more upsell and cross-sell into our base. We're leveraging our enablement function to drive the ability of our full account management team to sell additional products like Chorus and Engage instead of those being owned solely by our overlay teams. And so we'll get a bigger impact by having a full set of account managers selling these additional products. Those are 2 big areas.

Our next question comes from Brad

Henry, in the end of September, you announced the hiring of a Senior Vice President of Business Development. In the press release, you talked about him “redefining”

I mean I think we are shifting from being -- playing in a $24 billion total addressable market that's focused on global and domestic data to a $100 billion total addressable market that drives a full go-to-market end-to-end revenue operations suite. That includes solutions like conversation intelligence and sales automation and B2B chat and an account-based marketing platform on top of our best-in-class data asset. And so I think as we shift to having more platform-related conversations. We're going to enable our sellers in a more robust way. Now upfront, we may land most often with sales intelligence, our core sort of data and sales intelligence. But as we expand those accounts, our expansion motion is much more focused on selling a holistic platform story. And we see that landing 75% -- more than 75% of our MarketingOS customers are also SalesOS customers they're buying MarketingOS and SalesOS together so that they can unlock that sales and marketing alignment that is so searched for within companies. But it does require us to tell a broader story. And so that's what we were getting at with that comment in the press release.

That makes a lot of sense, and I appreciate that. Maybe just a follow-up for you, Cameron. There was no mention of win rates changing. So I'll assume and it would be great if you could confirm that they're more or less in line with what they've been historically. But as well, when we think about retracing on and you talked about expansion being more limited. Is there also any change in gross churn across the different market segments that's worth noting?

Yes. So I think deals are taking longer. So we do see the highest levels of demand that we've seen. We're continuing to win those, but it's taking more effort and more longer time. So and have to expand the time frame that you're defining the win rates over in order to I mean competitive win rates in terms of win-loss analysis.

Yes. From a competitive perspective, we actually see a number of our kind of competitors pulling back on the resources that they are pushing into the market. So I think that we continue to see really strong competitive win rates overall. And then the second part of your question was?

Gross churn?

Gross churn. So gross churn actually hung in very well despite the macroeconomic environment. So when people were using

Our next question comes from Koji Ikeda with Bank of America.

I wanted to follow up on Mr.

No. It's not a major sales team reorganization. It's really just inserting some additional resources into the account management and the client base and the customer base to give some capacity back to the account managers who are spending more time on renewals and more time on upsells and cross-sells than they had historically. It's nowhere near the magnitude of a major sales reorganization.

Got it. And then I just wanted to follow up real quick here on the account management focus. You were talking about more time on renewals. And 1 question I get from investors a lot is any sort of kind of unused licenses in sales, marketing and recruiting departments. Is it -- is this an area of focus maybe heading into renewal periods? And if so, could you maybe talk about how sales teams are focusing on retaining that kind of customer spend?

Yes. Look, I don't think that's a huge part of what we see. I think the big thing that we see and that we're seeing is really over the last 2 quarters, there have been some meaningful macro-related changes. Those first materialized with deal cycle elongation -- but ultimately, what those longer sales cycles actually end up causing is a drag on the capacity of our frontline sales and account management team. Deals taking longer just means more meetings, more reviews with leadership more calls and e-mails to drive the same outcome that we were getting historically. And so while our gross retention has stayed largely the same, our upsell motion has seen those more macro headwinds. Now at the same time, in the quarter, we closed the largest new business deal of our company's history. We closed the largest expansion deal in our company's history. We're seeing new business ACV on our MarketingOS platform be close to 3x the ACV of our SalesOS platform. We see the majority of our MarketingOS customers also buy SalesOS, so they can unlock that platform story. We're seeing meaningful consolidation uplifts with customers like Ryder and USI and Taylor Corporation, who all consolidated multiple point solutions on to

Our next question. Our next question comes from Siti Panigrahi from Mizuho.

Henry, you talked about the macro pressure and sales elongation. I'm just wondering what sort of trend you are seeing on the pipeline in mainly top of the funnel? And also you talk about pressure on state expansion and data expansion, but what do you expect if macro worsened demand for your newer product, like SalesOS, MarketingOS. Do you expect that to offset any kind of slowdown?

I think first, we're continuing to see really strong demand. In the quarter, we had the highest delivered marketing qualified leads to the sales and account management organization. I think, again, what we're seeing is, even though we're seeing a really strong demand environment, those deals are just taking longer to get to close. MarketingOS is the fastest-growing product in -- the fastest-growing platform we believe. We're really excited about that. Today, it's still a small portion of our business. So while we anticipate that we'll continue to sell more MarketingOS, more data orchestration on ring lead, more cores and conversational intelligence those are still small portions of our overall revenue base.

Okay. And then a follow-up on your international expansion opportunity, that's 1 of your growth driver. What sort of progress you are doing at this point, given all these geopolitical uncertainty in Europe?

And so from an international perspective, we still are seeing growth, again, stronger than the accelerated growth relative to the rest of our business. certainly, particularly in Europe, we've seen headwinds from the geopolitical situation. So we're not growing as quickly as we did in 2021. We're continuing to invest in Europe and our other international venues and customers in order to take advantage of that long-term opportunity at some point.

Our next question comes from Michael Turrin of Wells Fargo Securities.

Great. Just on margin, can we go back to just some of the comments around resilience and the margin offsets. Cameron, are you still confident the offsets you have there if growth starts to moderate more meaningfully than what we're seeing currently? And then between op margin and free cash flow conversion, I think the implied for Q4 and what we're seeing in Q3 is below the target levels. There have been some comments just around some of the adjustments you're making in payment terms in other areas. But anything you can add there and around just confident in the ability to return to the targeted levels if that remains the case.

Sure. So from a margin perspective, I think we're continuing along the path that we had originally laid out for this growth moderates, we expect the natural operating leverage in the business to continue to push margins up over time. I think that, that -- that's the expectation that we continue to have, we're certainly not going to see a step function in margins go up, but I do think where we expect a steady increase in the margins as we realize the operating leverage. And part of that is just natural operating leverage in the sales and marketing side as growth moderates, but we should see sales and marketing as a percentage of revenue go down when that happens. In terms of unlevered free cash flow, we are seeing some flexibility that customers are requiring or asking for in terms of payment schedules. And that certainly in the short term has an impact on the conversion of free cash flow from adjusted operating income. And so I think we've -- we're prudently setting expectations that we could see that conversion rate be a little lower than what we would expect in a more normal operating environment.

That's helpful. Just a small follow-on to a prior question, if I may. You had a few stats that you laid out around annual payments and maybe that duration is changing from what you've seen in prior periods. Do you have the duration mix or average duration in front of you? And anything you can add just around how it compares currently versus what you've been seeing in prior periods. I think it's just helpful for adding context on some of the impacts if you have it?

Yes. So the duration mix, historically, we've seen well over half of the payments that we received the annual upfront payments. What we've seen is that, that has decreased by about 5 percentage points, which obviously changes the overall mix. I do think that, that percentage of annual payments has the potential to move around over time. And as an example, that decrease is far smaller of a decrease than we saw in say, Q1 and Q2 of 2020. But certainly, the attitude of customers is that they are looking for more flexibility, as they're dealing with similar pressures to we are in terms of macroeconomic challenges.

Our next question comes from Rishi Jaluria with RBC Capital Markets.

Wonderful. First, I just wanted to start with -- you talked about this metric of 30% of ACV coming from advanced functionality, it continues to go in the right direction, but that seems to be only up slightly from Q2 when it was 29%. And if my numbers are right back at the end of last year, that was 24%. So the growth rate there seems to have slowed down, I think, pretty quickly. Maybe can you walk us through what the dynamics going on there might be? And why we shouldn't be too worried about this as a leading indicator and something that could maybe spread to a slowdown at the core. Then I have a very quick follow-up.

Sure. So I think we continue to see a strong uptake in the advanced functionality, but most of that is upsold to our existing customers. And while it's less impacted than just leads data, it is impacted by the capacity issue that we've discussed overall. So I don't see that as being a long-term indicator in terms of the growth of advanced functionality. Certainly, as it gets off a bigger and bigger bases of percentage, the continued growth of the core intelligence business is also going to continue as well and make those just absolute number of changes, so a little smaller over time as well.

Okay. Got it. That's helpful. And then just a very quick point. Another question I had mentioned about licenses that maybe were sitting unused. I want to kind of flip that, is there any worry heading into more uncertainty in the macro environment that we could see outright license sharing? Or are there measures that you take to limit or prevent that from happening?

Yes. There are all sorts of measures and technical implementations that we put in to avoid license sharing, and we've done that for a long time.

And our next question comes from Taylor McGinnis with UBS.

Can you comment on what you're seeing with new logo activity and like the size of average lands? And how much of the lighter outlook was attributed to softness here? And I guess, just as a second related question, with expansion rates coming down, are you assuming more growth needs to come from new business than recent trends? And does that impact at all your comfort with some of the out-year rev targets that you guys had in the coming years?

So we continue to see strength on the new business side. As we are able to attach more of the advanced functionality. And as we're seeing some larger customers, we've actually seen ASP go up in Q3 and continue to see strong new business activity. So I would say that we're continuing to obviously raise our expectations. But new business continues to do well, much better, I think, relative to the historical trend, whereas the capacity on the AM side is a short-term impact that we see from the macroeconomic challenges. I think overall, we do expect that, that macroeconomic challenge, we don't know how long it's going to last, but I would expect that those retention rates would go back up, as the situation for buyers stabilizes over time.

Our next question is from Terry Tillman with Truist Securities.

I know you've had a lot of questions and multipart questions. I guess, maybe, Henry, a big picture question for me is just related to the theme of vendor consolidation, it does seem like that's probably going to pick up steam as the macro continues to be weak, if not worsen. So my big picture question relates to -- I mean, there's a lot of $100 million-plus sales engagement in CI tool vendors. What are you seeing right now? What do you think the tipping point is for you all to potentially be able to win that vendor consolidation opportunity? Is that something that you think kind of plays more out into '23 under a macro? Or just a little bit more on a tipping point on just more broad-based vendor consolidation?

And look, I think that we're in the early innings of people really thinking about vendor consolidation. I think the vendor the consolidation stories that we've outlined here around the platform, they're not macro driven. They're just good business driven. And so I think as the macro pushes or the macro environment continues companies will take this idea of consolidating to a strategic vendor much more seriously, and we'll gain a lot of mind share as that happens. But today, I think the wins that you're seeing and the wins that we're really proud of we would have achieved whether there was a macro uncertainty or not. And so we'd expect that to accelerate, especially as we continue to enable our sellers around the top tracks and the ways to position value around a full consolidation.

I would now like to turn it over to Henry for closing remarks.

Thank you, everybody, for your time tonight. We have an active IR calendar coming up, and we look forward to speaking with everyone and seeing you all over the course of the next several weeks.