GTM - NASDAQ

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

Great. Thanks, Lisa. Welcome to

Thank you, Jerry, and welcome, everyone. We delivered another consecutive quarter of better-than-expected financial results, continued momentum upmarket, and improved net retention. We dramatically expanded the capabilities of our Go-To-Market Intelligence platform to empower our customers to accelerate revenue growth.

Thank you. [Operator Instructions] The first question today will be coming from the line of Alex

Hey guys, thanks for taking the question, and congrats on navigating a volatile macro environment. So, maybe Henry, just the first question. Why now on the change around the name, the ticker, the category, what’s making right now the moment to kind of go double down on this motion? And maybe what are you seeing from the changing conversations as you’re having with customers that you’re renewing, particularly upmarket, that’s driving the acceleration? And I’ve got a quick follow up.

Sure. Thanks for the question, Alex. I think there’s a couple of things. One, we’ve expanded the platform broadly to not only be a platform for prospecting sellers, but also for account executives, account managers, customer success managers. When we launched Copilot last year, we saw ourselves, being pulled into a much broader set of conversations across go-to-market, into marketing, into Rev Ops, and then, we released today our Go-To-Market Studio product, which really allows any revenue operator, any revenue leader to bring their first and third-party data together to leverage AI across that data asset and then to orchestrate campaigns with sellers, account managers, SDRs, and marketing teams. So we’re incredibly excited about the broad range of solutions that we’re providing now beyond just sales and beyond just information, but throughout go-to-market, and so, it felt fitting that our ticker symbol changed to encompass the solutions that we’re now offering. In the upmarket, I think what we’re hearing from our customers, is two things. One, they are thirsty for data to leverage inside of their go-to-market organizations, particularly as they look to leverage AI to drive efficiency and effectiveness of their sales team. And then, when they see the power of that data, they want to leverage a front-end application to help their frontline teams execute. And so, when we’re having conversations, whether it be with Stripe or Intuit, or Semrush, when we’re talking with them, they’re telling us, “yes, we need this data because we know we can drive efficiency if we leverage this data with AI, but, we also need the platform where our frontline team can actually execute on the insights that are coming from that data.” And so, they’re investing in our data asset and then our Copilot platform to execute against that data asset.

We feel really good about the trajectory of Copilot, particularly in the upmarket. This was -- Q1 was a quarter where we saw the most upmarket deals for Copilot that we’ve seen, and so, we’re getting much better at the motion of navigating data privacy, data security, and AI governance boards within our clients, and that’s not creating a real speed bump for us today.

Thank you. One moment for the next question. The next question will be coming from the line of Elizabeth Porter of Morgan Stanley. Your line is open.

Great. Thanks so much for the question. I first want to just ask a little bit on the expense side, just given the better top-line, but operating income and free cash flow guidance looked like it was pretty unchanged for the year. So just given the continued shift up-market with better profitability and better top-line in the full year target, is there anything to consider, as it relates to investment priorities that may be limiting some of the flow through? And then, as a follow-up, just as you leverage your own tools, could you speak to the internal efficiencies that you’re seeing and how that may be reinvested or passed through over time?

Yes. I can cover the guidance upfront. So I want to reiterate that we saw no impact to the overall business in Q1 from the economic environment, and in a more normal economic environment, we probably would have felt comfortable flowing through more of the beats into the full year guide. So, for the avoidance of doubt, we’re not seeing anything material in how our customers behave. This approach to guidance is 100% driven by caution as it relates to the uncertain environment. Is it -- when you think about revenue versus adjusted operating income versus cash flow, we looked at revenue and the low end of the range was derisked by the magnitude of the beat in Q1, we’re still expecting to deliver 36% margins in 2025. And then, on margins specifically, the seasonality of our business has evolved. I think we’ve talked about this some over the past few quarters. We expected margins to be several points lower below full year margins in Q1 and several points above the full year margin in the back half of the year, so in line with our expectations. We’ve deployed Copilot across all of our go-to-market teams. I think what that’s really allowed us to do is, take the efficiencies gained by that deployment and their use of the platform and allowed us to invest more in our upmarket growth, our upmarket sales resource allocation. And so, we feel really good about our continued opportunity to shift more and more resources upmarket, as we get efficiencies across the sales team.

Great. Thank you.

Thank you. One moment for the next question. The next question will be coming from the line of Raimo Lenschow of Barclays. Your line is open.

Perfect. Thank you. Christy, on that topic, please, if you talked about the extra buffer where you kind of put it in. If you think about a downturn or like kind of tougher times in selling, where did you think the issue is going to be more on down-market that there you had already like quite a few years of issues or more on up-market and how do you brace for that?

Yes. I think the down-market will be more reactive to a macro slowdown than our up-market business. I think we’re -- I think we feel like we’re in better, probably the best shape we’ve really ever been in from an up-market, down-market mix perspective to weather something. So, we’re providing our initial guidance provided an opportunity for down-market to decline and be managed down at an acceleration relative to where we were in 2024. And our guidance today continues to allow for that. So, we continue to feel comfortable managing the down-market business to a place where it’s a smaller and healthier version of itself.

And then one follow-up for Henry. It’s like obviously in the front office space there is a lot of talk on agents, Copilots, et cetera. Like what do you see in terms of customer understanding or where the different vendors with the different offerings fit in and what can you do to kind of improve your standing there? Thank you.

Look, I think in go, I think of all the departments in Corporate America, go-to-market have been the slowest to leverage AI and agents, in their motions, and I think the big reason for that is that, you need -- it is necessary for you to leverage third-party data and third-party insights in order for you to build an AI agent that’s relevant to go-to-market professionals. You can’t just rely on your first-party data, the same way that you could rely on first-party data to build a support ticket agent or a customer service agent. The data that go-to-market professionals need exists outside of their first-party data. Now that first-party data is incredibly important, and it needs to be married to third-party data to actually execute, an AI-driven motion, which is why we built GTM Studio is to allow our customers to bring what was historically very siloed go-to-market data together with third-party data and then build those AI motions and AI agents off of perfected, enriched, and broad and a broad data asset that includes both first and third-party data. I think this is the unlock for go-to-market team to actually go-to-market with AI.

Thank you. And our next question will be coming from the line of Kash Rangan of Goldman Sachs. Your line is open.

Hi. Thank you very much. My question would be, with respect to the new emphasis of the company’s go-to-market, Henry, which I can certainly appreciate, what new budgets can you go after with this new positioning? And what are the new terms you can go after as a result of that? And also moving upmarket is laudable, but it’s also a higher cost of acquiring business. So as you move upmarket, what is the trade-off with respect to profitability that you might be making, investing in new markets, new enterprise customers, new distribution? It can be a bit of a trade-off in the near-term. How do you weigh the near-term versus a longer-term payoff? Thank you so much.

Yes. A lot in there. I think the first thing is in the down-market, we’ve been moving more and more of our business to digital self-service. And so in the micro SMB today we are pushing micro SMB to digital self-service where they’re transacting without the aid or help of a seller. That’s new. In our go to market motion, we feel good about the trajectory that’s happening there that has already allowed us to move and reallocate resources from the down-market and move those resources up market. I should remind everybody that our upmarket business is meaningfully more profitable than our down-market business, and so as we move more and more of the business upmarket, we have the opportunity to increase margins as that business is far more profitable than our down-market business. And then on the question of expanding within the enterprise and other budgets that we would unlock, I think our big opportunity that we have a number of opportunities there. First, with our Go-To-Market studio product that we launched this week, we have the opportunity to bring Rev Ops professionals, Sales Ops professionals and sales leadership into the

Thank you. And our next question will be coming from the line of Brad

Great. Thanks so much for taking the question. It’s so great that you guys are right here in New York. Nice to see the upmarket momentum here in Q1. I’ve got two questions. Maybe first for Henry. I was really intrigued by the Intuit relationship that you talked about. I wanted to understand is that specific to Intuit Enterprise Suite, their upmarket product, and can you maybe talk more about the economic relationship, what this can develop into, and how many more such relationships are out there that you can go after?

Thanks, Brad. We are really excited about our partnership with Intuit. It is a partnership that has grown with merit over time, and we continue to find new and broadening use cases there. It’s not just limited to the enterprise suite at Intuit, it’s much broader than that. Particularly we’ve been helping them with their mid-market focused business and their outbound outreach and think that we can expand much further to more data management, data cleanliness opportunities within the company. Look, I think Intuit is a good example of what we see across all of our enterprise customers. We are lightly penetrated into our enterprise customers or upmarket customers, and we see no demand ceiling today in our ability to continue to grow within the enterprise. So, our job now is to execute on that opportunity to learn from the way that we’re deploying solutions and enabling our enterprise customers and then bring that across the enterprise base, but we don’t see any demand difficulties in continuing to grow that upmarket business because we’re so lightly penetrated across the enterprise.

Thank you. And our next question will be coming from the line of Jackson Ader of KeyBanc Capital Markets. Your line is open.

And then also, I mentioned this, we are expanding our use cases across account executive, account manager, and CSM seats as well, where historically we may have been limited just to the top of the funnel SDR use case. Today, with Copilot, we’re able to expand beyond just that top-of-the-funnel use case, and so, those seats existed within our customer base. They don’t need to be hired for us to sell into. But now we have a product that delivers a use case, and a value proposition for them. And then the product itself is bringing them in and having them engage with the product at levels that are the same as our SDR prospecting use case.

Okay. So, I mean, would it be fair to characterize it as like sales hiring is not yet a tailwind if things improve through the year?

Yes, definitely.

Okay. Okay, cool. And then my follow-up, on remaining performance obligation, when should we expect the growth in those, whether it’s total or current, when should we expect those kind of more reflect what you’re seeing in the upmarket motion? Thank you.

Yes. I think when I look at the current bookings growth, we’ve been negative, and then I think we’re at 0% in Q1. So, the trajectory there is improving. I would expect to get back to positive there, it’s mostly a matter of time. Q1 was the last quarter where we were lapping a compare last year, where we had a high volume of down-market new business transactions that didn’t go through our more rigorous qualification process. So, we didn’t really fill the bucket up again with the same or similar transactions in Q1. Once we get into Q2 of this year, where we start lapping the introduction of the new business risk model last year, and we start to get into heavier upmarket quarters, we should have an opportunity to start to get back to positive current bookings growth.

Thank you. And our next question will be coming from the line of Brent Bracelin of Piper Sandler. Your line is open.

Totally makes sense. Kind of more of an 80/20 model. And then Henry for you, the company is generating over $100 million a quarter in cash on average here. You’ve done a dozen acquisitions over the last 10 years, really helping kind of reposition the company. What’s your appetite to do both buyback and tech tuck-in M&A? Would love to get your thoughts there. Thanks.

Look, I think that we’re going to be opportunistic with M&A, particularly tuck-in M&A. But look, right now, we’re going to continue to aggressively reduce the share count, at these levels, given how much greater our intrinsic value is than the market value today. We have great confidence. I have tremendous confidence in the future of

Thank you. And our next question will be coming from the line of Taylor McGinnis of UBS. Your line is open.

Thank you. And the next question will be coming from the line of Michael Turrin of Wells Fargo Securities. Your line is open.

Thank you. Our next question will be coming from the line of Brian Peterson of Raymond James. Your line is open.

Thanks, gentlemen and congrats on the quarter. Henry, you’ve mentioned a few times that you’re expanding the roles that you’re addressing. I’m curious if there’s one role in particular, where you’re most excited about in terms of incremental adoption in 2025. And maybe just remind us, any sense of what your seat penetration is with your enterprise customers. Thanks, guys.

Sure. Seat penetration in enterprise customers is very low. I would tell you, like, maybe high single-digits, low double-digits. And then on roles that we’re most excited about, I don’t think there’s one. Let me give you a couple. I think, first, expanding into the account executive and account manager workforce, we think it’s a huge opportunity, it represents three times the seat opportunity as SDRs and top of the funnel sellers represent, and we have a great solution for them that they are leveraging and using, with Copilot. So we’re excited about continuing our journey to expand into that area. Then I would tell you that, Rev Ops, sales ops, and then by extension sales leadership with GTM Studio will be a target audience of ours. These are people in the company who have the most creative ideas about how to go-to-market, but they get stuck in a long line with IT and data science, and engineering just to see those ideas come to life, and that’s a pretty painful experience that we’ve been really focused on, building around, and giving them a solution to be able to get those creative ideas in the market, and executed on as fast as possible. And when we’re showing GTM Studio to those leaders, they’re incredibly excited about getting their hands on the platform, and we think we’re going to continue to have moments where we get to delight our customers like that, and are excited to have that opportunity.

Thank you. And the next question will be coming from the line of Patrick Walravens of Citizens. Your line is open.

Great. This is Austin Cole on for Patrick Walravens. Henry, I’m wondering about the kind of genesis for this new chapter of the

I think probably the big thing that we realized was no matter how great of an e-mail you put together, no matter how personalized it is, no matter if it brings in insights from the most rare bespoke sources, and is perfectly crafted, that unless a frontline seller or a marketer takes action against that perfect audience, no revenue is generated, and so, we were hearing from our customers, ‘‘hey. I’m pulling in intent and website visitors and all of these different unique data points, but I’m not seeing it turn into revenue the way that I anticipated it would.’’ Yes. It performs better than our last campaigns that were less personalized, but we want to see this move exponentially. And so, when we were able to bring Go-To-Market Studio together and marry that to Copilot in a way that gives Copilot the ability, to be in front of a frontline seller, connected to their Slack, connected to their Teams, connected to their e-mail, connected to their text messages, designed so that they could take action quickly with those audiences that their sales leaders and their Rev Ops and Sales Ops professionals are putting together for them. We recognize that, once you marry frontline execution with that perfect personalized insight created, e-mail and insight created TalkTrak, then that’s where you can really move the needle and go-to-market, and so, that was sort of the learning that we had, that drove us down this road to put those together.

Thank you. And our next question will come from the line of Surinder Thind of Jefferies. Your line is open.

Thank you. When you guys are thinking about kind of the pipeline and the idea that you’re excited about what you see in the upmarket, can you maybe talk about the mix itself? Copilot adoption early on was primarily newer customers, but it sounds like the increase in NRR of existing clients has been a more recent driver. Just how are you thinking about the different those two cohorts and kind of what’s ahead?

Yes. I think we view the net revenue retention as the primary driver of stabilization and return to reacceleration of revenue. Our new business pipeline is more segmented than it’s ever been. We introduced this in 2024. But, for the down-market customers, we’re able to score them, qualify them, figure out whether it should be going to a PLG digital motion, or if it’s more of the higher end of down-market, whether we should keep a sales rep in that sales cycle. And then upmarket, we’ve really specialized and segmented our account executive base, so that we are investing behind some of these longer sales cycles for these larger customers. So, we’re much more prescriptive and scientific with our customer acquisition engine and that will eventually -- that’s starting to show up in improving retention outcomes, but improvement in retention is the key driver in getting back to our growth goals.

Thank you. And our next question will come from the line of Rishi Jaluria of RBC. Your line is open.

Wonderful. Hi, Andrea and Graham, thanks so much for taking my question. Just one for me. I want to go back to the Q2 revenue guidance and maybe unpack some of the set of assumptions behind it. You saw in this quarter above 1% day’s adjusted sequential growth. Your guide calls for negative 4% days adjusted sequential growth by math. At the same time, you are seeing improving momentum off market. Your comps don’t get -- aren’t super difficult and you’re seeing success with Copilot as well. Maybe just walk us through kind of the set of assumptions you have behind it, how much of it is conservatism, especially as you’re saying the guidance philosophy is pretty similar as before? Thank you so much.

Sure. The incremental caution I’ve talked about was baked into both the full year and the quarterly guides. Of course, the magnitude is bigger by nature with the full year than the quarter. But, yes, Q1 was another great revenue quarter that was driven by great Q4 sales performance and continuing better cash collection and write-off outcomes. So there is a little bit of seasonality in there, relative to our upmarket opportunity, which we usually are starting to see more and more than the Q2 and Q4. But you could think about this incremental caution that we’ve layered in as applicable to the full year as well as the Q2.

Thank you. And our next question will be coming from the line of Allan Verkhovski of Scotiabank. Your line is open.

Hey, guys. Thanks for taking the question. Great to hear retention in the software vertical improved sequentially for the fourth quarter in a row, can you just go a layer deeper. On what trends you saw in this segment the past few months and can you update us on how this vertical is impacting

Yeah, so we saw retention in the software vertical improve sequentially for the fourth quarter in a row. Software vertical was one of the largest contributors to the deceleration and decline in growth that we saw starting in 2022. We experienced a lot of down sell pressure there. So, in general, we were able to keep most of those logos but at lower annual spends as we got into the middle of 2024 and more. So now we’re not. We don’t have that level of down sell pressure, and, in fact, we’re starting to get to more of an upsell opportunity place again with the software vertical. So, as a, the retention improvement is really positive for four quarters in a row. We think we’re almost at that place now where software is actually contributing back or back contributing to our aggregate growth as opposed to impairing it.

Great. Thank you, everybody, for joining us tonight. We appreciate it.