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Good day everyone and welcome to the ON24 Q1 2025 Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call may be recorded and I will be standing by if you should need any assistance.. It is now my pleasure to turn the conference over to Emily Greenstein, Investor Relations. Please go ahead.

Thank you. Hello and good afternoon everyone. Welcome to ON24's first quarter 2025 earnings conference call. On the call with me today are Sharat Sharan Co-Founder and CEO of ON24; and Steve Vattuone, Chief Financial Officer of ON24. Before we begin, I would like to remind everyone that some information provided during this call will include forward-looking statements regarding future events and financial performance, including guidance for the second quarter and full fiscal year 2025, as well as certain second quarter and full year non-GAAP projections. These forward-looking statements are subject to known and unknown risks and uncertainties that could adversely affect ON24's future results and cause these forward-looking statements to be inaccurate including our ability to grow our revenue, attract new customers, and expand sales to existing customers, the success of our new products and capabilities, other statements regarding our ability to achieve our business strategies, growth, or other future events or conditions, such as the impact of adverse economic conditions and macroeconomic deterioration. ON24 cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only and we undertake no obligation to update any statement to reflect the events that occur after this call. Please refer to the company's periodic SEC filings and today's financial press release for factors that could cause our actual results to differ materially from any forward-looking statements. We'd also like to point out that on today's call, we will report both GAAP and non-GAAP results. We use these non-GAAP financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. Non-GAAP financial measures are presented in addition to and not as a substitute for financial measures calculated in accordance with GAAP. To see the reconciliations of these non-GAAP financial measures please refer to today's financial press release. I will now turn the call over to Sharat.

Thank you and welcome everyone to the ON24 first quarter 2025 earnings call. I appreciate you joining us today. With me is Steve Vattuone, our Chief Financial Officer, who will be sharing details on our Q1 performance shortly. Before we dive into the numbers, I'd like to take a moment to highlight a few key driving forces to be mindful of as we move through 2025. Constant innovation is mission-critical at ON24. And this quarter, we'll continue to roll out exciting AI innovation behind our intelligent engagement platform roadmap. You'll see exciting product advancements around AI-powered content nurture, hyper-personalization, multi-language capability, efficiency driven AI agents, and AI-enabled performance insights. At the same time, we recognize we're operating in a time of macro uncertainty where customer buying decisions and outcomes are more measured. We have navigated through this type of environment before and we know that in times of uncertainty, it is even more critical to focus on the customer, so we've doubled down on our commitment to customer satisfaction, engagement, and retention, ensuring we're delivering measurable value for our clients at every stage of their journey with ON24. As we look to help our customers do more with less, we will sharpen our focus on ongoing product innovation and platform extensibility, particularly through AI-powered features and enterprise-grade capabilities. These enhancements deepen the impact of our platform, while also enabling us to better execute on our value-added sales strategy, expanding within our existing customer base by aligning with their evolving needs and long-term customer engagement goals. From the rollout of AI-powered Analytics and Content Engine ACE to new product innovations, enterprise expansion wins and improving customer retention trends, we're reinforcing ON24's position as the intelligent engagement platform of choice for global enterprises and laying the foundation for sustainable, profitable growth. Our results for Q1, demonstrate our improving gross retention profile, operating expense discipline, and cash flow improvement. Revenue from our core platform, including services, was $34.2 million, and total revenue, including Virtual Conference, was $34.7 million. In terms of ARR, we ended the quarter with $125.9 million of core platform ARR, and total ARR was $128.2 million. From a cash flow perspective, we drove positive free cash flow for the fifth consecutive quarter, and we remain committed to our long-term profitability target of generating double-digit EBITDA margins. I'd like to highlight some areas where we have been effecting change and improved our business. First, we made meaningful progress in accelerating our enterprise-focused, go-to-market initiatives. Under new North America sales leadership, we delivered the best enterprise new logo performance in the last five quarters. Specifically, in Q1, we saw continued win-back momentum with customers, with the largest number of customers and largest dollar value of ARR in the last five quarters. We continue to drive our AI-powered innovation product roadmap, which I will discuss in more detail shortly. At the end of Q1, low-teens percentage of our customers, are paying for AI-powered ACE products. Customer retention, measured by in-period gross retention, improved sequentially from last quarter and was at the highest level we have seen in the last four years. As we move ahead in 2025, we are focused on three core areas: AI innovation; improved enterprise go-to-market execution and a commitment to positive cash flow. Starting with product innovation, you'll continue to see steady and exciting stream of AI advancements. AI is fundamentally changing sales and marketing, and our customers trust us to help bring their engagement strategies into the AI-era. Our product development focus is based upon ON24's five core pillars, all of which are directed toward enabling our customers to power positive business outcomes, achieve greater cost efficiency, and deliver massive, enterprise-grade scalability. Let's briefly touch on these five pillars. The first is our AI-powered Content and Nurture, which allows customers to leverage the ON24 platform with AI-powered Analytics and Content Engine, ACE to engage their audience in an entirely new way, with experiences that are intelligent and personalized, and content that is always-on. This not only accelerates content creation and execution but also scales reach, ultimately propelling consistent pipeline growth for our customers. Second, we are introducing ON24 IQ, Intelligent Agents to expand the capability of our existing ON24 AI-powered ACE, so participants can minimize manual, repetitive tasks like event Q&A handling and others. We believe every event can become a data-driven, highly unique experience that keeps audiences engaged. Third, our platform's personalization capabilities, allow customers to dynamically customize event experiences based on audience behaviors and to deliver personalized certifications and continuing education programs that align with audience needs and regulatory requirements. Our fourth pillar leverages the platform's AI capabilities to provide deep performance insights that allow our customers' go-to-market teams to capitalize on ON24's first-party engagement data to make data-driven decisions that drive growth. And lastly, our new multi-lingual capability unlocks global engagement. Now, customers can automatically localize event registration and activation pages, translate post-event recordings, and generate derivative content including eBooks, social posts, blogs, key takeaways, transcripts and more. This enables global enterprises to scale their efforts and drive faster results globally. The second core area is our Enterprise-focused go-to-market strategy. As part of our strategic evolution, ON24 has made meaningful progress in accelerating our enterprise-focused, go-to-market initiatives. We are aligning our sales, marketing, and customer success model to drive deeper value and long-term growth in the global enterprise segment. First, we've shifted to a solutions-based go-to-market approach, tailored to the complex needs of enterprise buyers. This strategy enables us to align more directly with our customers' strategic objectives, whether that's accelerating pipeline, improving buyer or client engagement, or delivering more personalized experiences at scale. Second, we are excited to announce the launch of a new, global integrated marketing campaign, called Propel Forward, focused on our solutions based go-to-market approach. Our Propel Forward campaign highlights the deep ROI we provide by segment, as well as our ability to enable customers to maximize the first party engagement experience and capitalize on the power of personalization and AI to accelerate the customer journey and propel positive business outcomes. ON24 can propel pipeline for technology providers, accelerate client relationships for financial services, and deliver engagement and certification for healthcare professionals. This integrated campaign should increase demand and brand awareness, thereby driving new acquisition accounts and facilitating customer expansion. Third, we are pleased to announce David Lee as our new Chief Marketing Officer. David comes to us with extensive B2B experience previously serving as Chief Marketing Officer for Envestnet/Yodlee and Vice President of Marketing for SonicWALL. With the hiring of David, and the previous changes that we made in our North America sales leadership, we are focused on driving improved sales velocity and customer expansion. In fact, we have already seen meaningful progress in accelerating our enterprise-focused, go-to-market initiatives, having delivered the best new business performance in the quarter. To highlight some of the new logos that we closed in Q1, we acquired a new customer, one of the leading AI companies in the world building a foundational AI system. With a clear focus on expanding their B2B and enterprise footprint, the customer turned to ON24 to shift their go-to-market strategy from traditional marketing to a scalable, data-driven digital funnel. In the pharmaceutical space, a commercial-stage biopharmaceutical company turned to ON24 to build a more mature omni-channel strategy. With compliance top-of-mind and a need for strong partner integration, they selected ON24 to deliver interactive experiences that could be reviewed before launch by compliance and accessed on-demand by healthcare professionals. Another major new logo is a leading provider of legal, tax, regulatory, and business services providing multi-state certifications. With the ON24 platform and AI-powered ACE, they've been able to automate the certification process by creating personalized on-demand experiences leveraging real-time analytics. Fourth, in Q1, we experienced the highest number of win-backs from boomerang customers in the last five quarters. In the technology vertical, we re-engaged a Fortune 500 IT technology solutions provider. Their goals were ambitious: elevate their events strategy, increase engagement and conversions, and scale their content strategy. By leveraging the ON24 platform, the team is now able to drive tangible growth by personalizing digital experiences based on their target audiences. Specifically, they can scale channel effectiveness through a multi-media engagement hub that allows users to register once and consume all content, while tracking interactivity and attributing it back to revenue. Additionally, they're accelerating content creation through ON24's AI-powered ACE to rapidly produce derivative assets and streamline operations. Lastly, we remain focused on regulated industry verticals including financial services and life sciences. Our robust and secure offering is well-suited to the high demands of these enterprise-grade customers that require automated workflows, reliability, security and compliance. I want to highlight our work with one of the largest international financial services companies in the world providing global investment management, investment services and wealth management. We are working with this global financial institution to consolidate their disparate demand generation education and leadership training programs and systems under a single intelligent engagement solution to bring together institutional investors, financial advisors, wealth managers and more. They have been able to consolidate multiple use cases on the ON24 platform while exiting some of the other point solutions that they were using. In summary with continued improvement in our gross retention rate and positive free cash flow generation we believe we have stabilized our business. As we focus on returning to growth we have made significant strides in our go-to-market execution including enhancements to our leadership team. Early results are good with encouraging signs across multiple dimensions including new business acquisition, win-backs from boomerang customers and increased penetration with regulated industry verticals which are now over a third of our business. In addition our AI driven innovation which has seen our AI ACE become an important growth vector sets us up well for continued innovation and momentum. While we have laid the foundation for a return to growth our stock price has experienced new lows. Given this dynamic, we believe our current market valuation does not reflect our long-term growth potential and strategy presenting a compelling opportunity for us to repurchase our undervalued shares. Specifically, we are announcing a new $50 million share repurchase program that Steve will discuss. And with that I will turn it to Steve.

Thank you, Sharat and good afternoon, everyone. I'm going to start with our first quarter 2025 results and will then discuss our outlook for the second quarter of 2025 and full year 2025. Revenue from our Core Platform including services in Q1 of 2025 was $34.2 million representing a decrease of 7% year-over-year. Total revenue for the first quarter which includes revenue from our Virtual Conference product was $34.7 million. Total subscription and other platform revenue was $32.3 million. Overages represented a little over 1% of total revenue in Q1. Total Professional Services revenue was $2.4 million representing approximately 7% of total revenue. Moving on to ARR. ARR represents the annualized value of all subscription contracts at the end of the period and excludes Professional Services and overages. In Q1 2025 ending ARR related to our core platform totaled $125.9 million a decrease of approximately $1.4 million compared to Q4 of 2024. Total ARR at the end of Q1 was $128.2 million. During Q1 we experienced further stability within our install base driven by our improved go-to-market strategy. Our in-period gross retention in Q1 was the highest in the past four years and showed a sequential increase from Q4 of 2024. In addition we saw our largest quarter in the past five quarters of customer winbacks. These boomerang customers which had previously left us for other tools returned to us in Q1 after missing the benefits of our solution. We did see some softness towards the end of Q1 primarily in our international and commercial business segments as uncertainty increased in the broader macro-environment. Turning to customer metrics. As we look at our business moving forward, we are focused on our enterprise customers and are seeing positive growth across those metrics. The percentage of our ARR in multi-year contracts increased in Q1 to reach a new high was over 50% of our ARR at the end of Q1. The multi-product adoption of our solution also continues, reaching an all-time high at the end of Q1. In Q1, the average Core ARR per customer was approximately $78,000, up slightly from 2024 year-end levels. The ARR contribution from the $100,000 plus customer cohort continues to represent approximately two-thirds of our total ARR, which is consistent with the prior quarter, and we ended Q1 with 299 customers contributing more than $100,000 in total ARR. While we saw impressive new logo wins in Q1, we also did see some customers renew in Q1 under the $100,000 threshold. Total customer count at the end of Q1 was 1,604. In Q1, we had our largest renewal cohort of the year of smaller customers which contributed to the reduction in our customer count during the quarter. Before turning to expense items and profitability, I would like to point out that I will be discussing non-GAAP results going forward. Our non-GAAP results exclude stock-based compensation, restructuring charges, impairment charges for real estate, amortization of acquired intangibles, shareholder activism related costs, certain legal costs related to litigation regarding our 2021 IPO, as well as certain other items. Our GAAP financial results, along with a reconciliation between GAAP and non-GAAP results, can be found within our earnings release. Our gross margin in Q1 was 77%, consistent with the past several quarters and with Q4 of last year. Now, moving on to operating expenses. Sales and marketing expense in Q1 was $15.6 million compared to $16.3 million in Q1 last year. This represents 45% of total revenue, compared to 43% in the same period last year and 44% last quarter. As Sharat mentioned earlier, we have better aligned our go-to-market organization and our sales and marketing expenses have decreased in absolute dollars both year over year, and from last quarter, largely due to the cost savings measures we have implemented to improve efficiency in that organization. R&D expense in Q1 was $6.8 million compared to $6.7 million in Q1 last year. This represents 20% of total revenue, compared to 18% in the same period last year and last quarter. Our R&D expenses have remained relatively flat over the past year in absolute dollars as we have continued to invest in product innovation for our platform, including AI-enabled features, such as AI-powered ACE, ON24 IQ, and enhanced personalization. G&A expense in Q1 was $6.3 million compared to $6.7 million in Q1 last year. This represents 18% of total revenue compared to 18% in the same period last year and 16% last quarter. We continue to take actions to reduce our G&A spending and streamline our G&A functions and as a result, our G&A expenses in absolute dollars have decreased as compared to the same period last year. Moving on to our bottom-line performance and cash flow metrics. Operating loss for Q1 was $2.1 million or a negative 6% operating margin compared to an operating loss of $0.8 million and a negative 2% operating margin in the same period last year. Net loss in Q1 was $0.4 million or $0.01 per share based on approximately 42.1 million basic and diluted shares outstanding. This compares to net income of $1.0 million or $0.02 per share in Q1 last year, using approximately 45.6 million diluted shares outstanding. Our Q1 bottom-line results reflect Q1 being a seasonally softer quarter for revenue, and I do expect our bottom-line results to improve this year from Q1 levels, which I will discuss when I cover our financial guidance. Now, turning to our cash flow metrics. Our free cash flow in Q1 was positive $2.8 million when we exclude cash outflows related to our restructuring efforts, shareholder activism fees, and certain other legal costs, which collectively totaled $0.9 million in Q1 2025. Our free cash flow in Q1, including all of these items was positive $1.9 million, compared to positive $1.1 million in Q1 last year. This is our fifth consecutive quarter of positive free cash flow. Cash provided by operations in Q1 was $3.4 million compared to cash provided by operations of $2.1 million in Q1 of last year. I would like to provide an update on our previously announced capital return program. In March 2025, we completed the $25 million share repurchase program we announced in March 2024. We utilized the full $25 million allocated under that program with $4.5 million utilized in Q1 2025. This share repurchase program followed the completion of two earlier capital return programs, which collectively returned $166 million to shareholders. We have now returned a total of $191 million to shareholders. In light of our strong balance sheet, positive free cash flow and undervalued stock the Board of Directors has authorized a new $50 million share repurchase program to drive shareholder value. Our balance sheet continues to remain strong with almost $181 million of cash and investments at the end of Q1 2025. Now, I want to provide some context for how we are thinking about 2025. As Sharat and I have discussed, we are seeing many positive signs of improvement in our business and we are fundamentally pleased with our progress in a choppy market. We are focused on several key tenets to drive our business forward and create shareholder value including delivery of a steady stream of market leading AI innovation, improved sales and marketing execution under new leadership and generating positive cash flow and positive adjusted EBITDA in 2025. That being said, the economic uncertainty has increased significantly over the last month and like many businesses we do have another layer of risk to factor in, due to a lack of clarity and visibility into the potential health of the economy. Given the wider range of potential macro and policy driven outcomes, we have decided to take a more conservative approach to our near-term top-line guidance. Now turning to our guidance. Regarding Q2 guidance, we expect Q2 core platform revenue including services in the range of $33.8 million to $34.4 million and total revenue, which includes our Virtual Conference product in the range of $34.5 million to $35.1 million. Professional Services is expected to represent approximately 8% of total revenue. We expect our gross margin to be 76% in Q2. We expect a non-GAAP operating loss in the range of $1.5 million to $0.7 million and non-GAAP net income per share of $0.00 per share to $0.02 per share using approximately 45.6 million diluted shares outstanding. In Q2, we also expect to be adjusted EBITDA positive. We expect a restructuring charge of $0.5 million to $0.8 million in Q2 related to our ongoing cost reduction efforts, which is excluded from the non-GAAP amounts provided above. Amortization of acquired intangibles, shareholder activism costs, certain other legal costs and certain other items are excluded from the Q2 non-GAAP amounts provided above. On ARR, we assume core ARR will be down by $0.5 million to $1.5 million compared to Q1 levels. For our Virtual Conference product, we expect Q2 ARR to decline approximately $0.2 million in Q2 ending Q2 at $2.1 million. Now turning to our annual guidance for 2025, which assumes the macro conditions do not worsen. For the full year, we expect Core Platform revenue including services to be in the range of $133.7 million to $136.7 million. We expect total revenue to be in the range of $136 million to $139 million. Professional Services is expected to represent approximately 7.5% of total revenue. We expect a non-GAAP operating loss in the range of $5.5 million to $3.5 million and non-GAAP net income per share of $0.02 per share to $0.05 per share using approximately 45 million diluted shares outstanding. We expect gross margins for the year to be approximately 76%. We expect to be adjusted EBITDA positive for 2025 and we expect to deliver positive adjusted EBITDA in each quarter of 2025 starting in Q2. In addition to delivering positive adjusted EBITDA, we also expect to deliver positive free cash flow in 2025, excluding any incremental on-GAAP expenses. Restructuring charges and amortization of acquired intangibles shareholder activism costs certain other legal costs and certain other items are excluded from the full year non-GAAP amounts provided above. Given the decreased visibility into the second half of the year we are not providing an outlook for our 2025 ARR. However, we remain 100% focused on returning to ARR growth and it is worth noting that our annual revenue guidance does assume improved core ARR performance in the second half of this year. ARR from our Virtual Conference product is expected to decrease minimally during the second half of 2025. In summary our goals for 2025 are to deliver another year of positive adjusted EBITDA and positive free cash flow to continue investing in AI focused innovation and to continue improving our go-to-market motion. We are confident we are taking the right steps to improve our business and to return to ARR growth. We have announced a new $50 million share repurchase program to enhance shareholder value and are excited to have the opportunity to acquire our undervalued stock. We remain strongly committed to our long-term goal of generating double-digit top-line revenue growth and double-digit EBITDA margins. With that Sharat and I will open the call up for questions.

[Operator Instructions] We'll take our first question from Scott Berg with Needham & Company. Your line is open.

This is Rob Morelli on for Scott Berg. Thanks for taking the question. Congrats on the quarter. Just one for me. So it's been a couple of quarters of declines in the $100, 000 ARR cohort. As you noted some customer retention improvement. Do you have any visibility or insight into where or when that metric troughs out?

Rob let me take that. We are very close to turning this number positive. Rob enterprise customers continue to be our focus with the $100,000-plus customer cohort being a proxy for that and that makes about two-thirds of our ARR. And we have seen these customers continue to make longer-term commitments to our platform. As you said the number of customers contributing more than $100,000 in total ARR at the end of Q1 was 299 a very modest decline of mid-single digits from Q4. And a large portion of that were customers downgrading under the $100,000 threshold, which was the largest contributor there. So as I said we are very close to turning this number positive. I mean that is an important focus of ours. At the same time our average core ARR per customer was the highest. So we are retaining the overall spend level with our larger enterprise customers even with some churn at the lower end. Now on the lower end we've talked about that in this market environment some of that does impact the lower end a little more. But overall our focus is in the core $100,000 and above and we believe and we feel that we are very close.

Got it. That's helpful. Thanks for taking the question.

Our next question comes from DJ Hynes with Canaccord. Your line is open.

Hi, guys. This is Luke on for DJ. I was wondering if you could expand on the comment you made about seeing softness towards the end of the quarter. And just how much of that contributed to the new outlook versus how much is incremental conservatism just given the macroeconomic environment? Thanks.

Let me go ahead and take that. Let me start by saying that we are seeing some good signs in the business and we are making progress. Now that being said there is now a lot more macro uncertainty than there was earlier in the year and there's now a wider range of outcomes because of that. Now we don't have a crystal ball and we're not sure how this will play out. So we are being incrementally more conservative with our annual revenue guidance because of that primarily in the back half of the year since that's further out. In terms of ARR we're not providing annual guidance at this time. But for Q2 the midpoint of our ARR guidance is the decrease of $1 million from Q1 which is actually a modest improvement from our Q1 ARR performance. So we are expecting to make some progress there in Q2. And we were previously expecting sequential improvement in ARR performance through the year, and we're still expecting that now with more progress in the second half of the year, but we are being more conservative in our outlook. Now for revenue, we are being incrementally more conservative with our annual revenue guidance to bake in another layer of conservatism primarily in the back half of the year, as I mentioned earlier. Let me quickly also touch on profitability and cash flow. We do expect to be adjusted EBITDA and EPS positive in Q2 and for the rest of the quarters in 2025 and for 2025 as a whole. And we're free cash flow positive in Q1 for the fifth consecutive quarter, and we expect to be cash flow positive for 2025, excluding any incremental non-GAAP items like restructuring.

Yeah. Let me add to what Steve just said. This is Sharat. Look, Luke, we can't control the macro. But in the immediate term, like most businesses, we've had to add another layer of risk to our projections for 2025. And as I hope my prepared remarks conveyed my enthusiasm around the changes that we are making in our business and why that gives me confidence. And again, just to reiterate the 5 core drivers. Q1 was the best gross retention in the last four years, and we expect that to improve this year. For many of you who have tracked us, you know how important that is for us. Two, we have significantly improved our go-to-market execution leadership team with the hiring of a new CMO and previously a new Head of North America Sales. And again, Q1 was the best enterprise new business quarter over the last 5 quarters. AI-powered ACE, we've got 30% of our customers using our AI capabilities and low teens percentage of our customers are paying for these solutions. We have a very aggressive AI product agenda, so we have a lot of room to run here. Win-backs, as Steve has talked about, the best win-back quarter Q1 was in the last 5 quarters. And so we are expecting sequential ARR improvement during 2025. I think Steve also talked about our cash flow performance, our margin performance. So overall, we believe our shares are undervalued. And so our confidence is underscored by the just announced $50 million share repurchase program.

That's helpful Thanks guys. And then maybe just a quick follow-up. Wondering if you could just expand on ON24 IQ, how that fits into the broader AI strategy and then how you're thinking about pricing those agents?

Yeah. So look, let me take that. I just talked about that 30% of our customers are using our AI capabilities and a low teen percentage of our customers are paying for it. So we have room to run, and it's an exciting growth vector for us. But when we think about our innovation agenda for AI, we really focus on how are we providing positive business outcomes, how are we helping customers achieve greater cost efficiency and delivering massive enterprise-grade scalability. So now as we've evolved our AI strategy, and our focus here is to be extremely aggressive and continuous on our innovation agenda. So there are five core pillars there. One, we have talked about this before, is our AI-powered content and nurture engine, which allows customers to create more derivative content and do more with less. Second, you talked about ON24 IQ. These are intelligent agents that streamline and automate actions across our platform. So our customers can now let ON24 IQ take away a lot of the automation, take away a lot of the heavy and repetitive task work and allows our customers to do a lot more with less. Third, our platform's hyper-personalization capabilities to dynamically customize event experiences based on audience profiles, we've talked about that before. Fourth, we are now leveraging our platform's AI capabilities and our first-party data. We have over 1 billion engagement minutes per year. We are leveraging that to really provide much more performance insights, and that's our fourth tier. And finally, for our enterprise customers, we are launching a lot of more capability on multilingual capability that allows them a platform for global scale. You talked about how we are looking to -- we currently have AI ACE SKUs. I think I expect that in the next 30 to 60 days, we will launch many more SKUs, more packages related to AI for our customers, especially for our enterprise customers that allow them to do more with less and to scale massively globally, leveraging multiple languages across the world.

That's great. Thank you.

Our last question will come from Linda Lee with William Blair. Your line is open.

Thanks for taking my question guys. First one, with David on the team as CMO now, what are some action plans David has in mind from a marketing perspective? And also plans together with the North American Head of Sales?

Yeah. This is Sharat. We are fundamentally transforming our go-to-market motion with extreme focus on outcome-driven actions. So, if you go to our website now, you'll already see that we talk about how our solutions -- whether you are in technology, whether you're in financial services, whether you are in life sciences -- how we help companies drive pipeline, propel pipeline forward for technology, how we help companies propel customer relationships for financial services, how for life sciences we propel healthcare professional engagement for those forward. And it's now going to be supplemented by a lot of very strong ROI stories. In this market environment, CFOs and CMOs and CEOs really want to impact. ON24, Inc. is one of the top three sources of pipeline for what they're spending with ON24. How is ON24 helping you in driving more client relationships and others? So, David's job first is to really drive extreme solutions-based approach and ROI-based approach for our customers. His other focus is also to work with sales and SDRs to continue to focus on improving pipeline. And, by the way, early indications on the pipeline front are improving. So, I'm excited about that. So, those are really the two core things; the new solutions positioning and message out there with very strong focus on demand generation and pipeline. And this completely ties with -- you asked about how this ties with the Head of North America Sales. Now, the Head of North America Sales works with our Chief Revenue Officer and of course, with David now to make sure we have an end-to-end execution. So, after the campaigns, we are very closely aligned with pipeline. How we are selling in the marketplace is also very dependent on that. And then, of course, from a customer success point of view, how we are implementing our customers. So, my hope is we have started the campaign, but very soon you're going to see a lot more end-to-end execution from ON24, Inc., really helping our customers drive ROI-based results at a very cost-effective and cost-efficient price. So, that's the focus for David and the sales team.

Thank you another question to follow-up any verticals that are doing particularly better than others from a churn and down-sell perspective?

Yeah. I think we previously talked about that. A lot of our focus is to diversify from a concentration in Technology and Manufacturing verticals that were about 50% of our ARR in 2019 to more verticals like Life sciences and Financial services that drive mission-critical digital transformation use cases. And the good news is the share of life sciences and financial services is now a third of our business. It's an important part of our enterprise go-to-market focus. Just as an example, in Q1, we highlighted our work in the prepared remarks with one of the largest international financial services companies in the world. Now they've been able to consolidate multiple use cases on the platform. They exited a few point solutions that they were using. And so -- and overall, on the life sciences and financial services, we also see generally higher gross retention, better net retention. So overall, we feel that our business is a lot more diversified and well-positioned to drive broad-based growth, especially as we execute on the Propel Forward campaign in these various verticals.

Perfect. Thank you.

It appears we have no further questions. I'll turn the program back to the speakers, for closing remarks.