Erin Kasenchak - Investor Relations Josh Coates - Chief Executive Officer Steve Kaminsky - Chief Financial Officer.

Scott Berg - Needham & Company Brian Peterson - Raymond James Brian Essex - Morgan Stanley Koji Ikeda - Oppenheimer & Co. Inc. Corey Greendale - First Analysis Securities Corporation Terry Tillman - SunTrust Robinson Humphrey Justin Furby - William Blair & Company Christopher Howe - Barrington Research Associates, Inc..

Please stand by. Good day, everyone, and welcome to the Instructure Q1 2018 Earnings Conference Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Erin Kasenchak. Please go ahead..

Thank you, operator. Good afternoon, everyone, and thank you for joining us on today's quarterly earnings conference call. Today's call is being hosted by Josh Coates, CEO, and Steve Kaminsky, CFO.

Before we begin, I would like to remind you that today's conference call will include forward-looking statements based on the company's current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially.

For a discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's earnings release and other reports and filings we may file from time-to-time with the Securities and Exchange Commission.

All our statements are made as of today, based on information available to us as of today and except as required by law, we assume no obligation to update any such statements. The content of today's conference call is Instructure's property and cannot be reproduced or transcribed without our prior written consent.

During the call, we may also refer to both GAAP and non-GAAP financial measures. You can find a reconciliation of our GAAP to non-GAAP measures included in our press release, which is posted to the Investor Relations section of our website.

All of our non-revenue financial measures we will discuss today are non-GAAP, unless we state that the measure is a GAAP measure. Now, I'd like to turn the call over to Instructure's CEO, Josh Coates..

Thank you, Erin, and thank you everyone for joining us on our Q1 2018 earnings call. As usual, I will provide some highlights from the quarter and then turn the call over to Steve for a recap of our financials before we open it up for questions.

We had a solid start to the year, with Q1 revenue up 39% year-over-year and over 900 basis points of improvement in operating margins year-over-year. During the quarter, we expanded our domestic Canvas customer base in both the higher-ed and K-12 markets. Let me share some of our great Canvas wins for the quarter.

Mississippi State selected Canvas for their 18,000 students to replace Blackboard as their learning management system. We added four additional schools with San Diego Community College District, representing almost 45,000 students. Canvas is now in all but one of the114 community colleges throughout California.

Chesterfield County Public Schools in Virginia selected Canvas and Gauge to replace Blackboard for their 60,000 students and educators. And the Imperial County Office of Education in California will be using Canvas to deliver professional development to school district technology personnel across the state of California.

Now, 20,000 technology personnel across school districts will have exposure to Canvas. Moving to international, during the first quarter we had another strong performance within our international markets.

The prestigious University of Oxford selected Canvas to replace Sakai for their entire 44 university colleges and permanent private halls and its 24,000 students. And under our preferred supplier agreement with SUNET, the Swedish University Computer Network which I mentioned last quarter, an additional four universities selected Canvas.

Now, over 100,000 Swedish students will use Canvas as their LMS. Turning to the corporate side, we had a successful quarter and Bridge has become an important tool for our customers, particularly within the extended enterprise use case. Let me share with you some of the great Bridge customer wins we had during the first quarter.

Optiv, a cyber security solutions provider, selected Bridge Learn and Arc to replace Moodle for their 250,000 users. Optiv will be using Bridge for compliance and customer training and education. Ancestry.com, the largest for-profit genealogy company, selected Bridge Learn and Arc to replace SumTotal.

Superion, a provider of public sector software and services, chose Bridge Learn for their 11,000 consultants. Guardian Life, one of the largest mutual life insurance companies, selected Practice to solve their needs for a best-in-class video coaching and training tool for their financial representatives.

And FranklinCovey, a management consultant firm, chose Practice to easily train their remotely distributed implementation and sales groups. We also had our first Perform win in Europe with Metaview, a sales training organization in Denmark.

Metaview is a great example of an extended enterprise use-case, as they selected our full Bridge suite of Learn, Perform and Arc, to assist them with their sales training efforts to large organizations, including Fortune 500 firms.

As you've heard me talk about for some time now, our vision is always been to develop a full suite of products which enables interesting cross-sell and up-sell opportunities. With the new products we've introduced over the last year or so, we are starting to realize that vision. Let me share a few interesting examples of this from the quarter.

A highly profitable multi-billion dollar consumer product technology company in Silicon Valley selected Canvas and Arc for an engineering initiative to teach programming to employees. Oregon State and Eastern Michigan University are utilizing Bridge for professional development of their educators.

And as we seek to help with K-12 adoption, we saw Orange County public schools in Florida invest significantly on training and adoption to ensure utilization of Canvas by their educators and faculty.

These are just a few examples and we're excited by our opportunities to focus not only on new customer acquisition, but also revenue enhancements from existing customers. Now, before I turn it over to Steve, I would like to briefly touch on our CRO search. We expect to make an announcement in coming weeks.

Now, I'll turn it over to Steve to take you through the numbers..

Thank you, Josh, and thanks again to everyone for joining us today. The first quarter of 2018 was a strong quarter. Here are a few highlights. Revenue was up 39% year-over-year. Our international business continued to grow very quickly and was 18% of total revenue for the first quarter. And we realized significant operating margin improvements.

Let me provide some additional details on the quarter. In Q1, total revenue grew 39% year-over-year to $48 million. Subscription revenue was $43.2 million, up 37% year-over-year.

As you've heard me remark on the last several earnings calls, our revenue outperformance versus our guidance for the quarter has been driven primarily by strong net revenue retention, which continues to be greater than 100% and higher than expected non-recurring revenue.

12-month rolling billings at the end of Q1, was $197.2 million, up 42% from the first quarter of 2017 also calculated on a rolling 12-month basis. For the remainder of my commentary, unless otherwise noted, I will discuss non-GAAP results and all EPS numbers are in a per common share basis. Gross margin in Q1 was 72.5%.

As we have noted before, we expect improvements in gross margin to moderate going forward as we get closer to our long-term target of 75%. Q1 total operating expense was $41.9 million, a 26% year-over-year increase, while scaling revenue 39% during the same period.

During the quarter, we drove operational efficiencies across all of our operating expenses as a percent of revenue. Operating loss for Q1 was $7.1 million, an improvement of $1.1 million year-over-year.

The overall scaling of the business as well as the operational efficiencies I just mentioned resulted in an over 900 basis point improvement in operating margins over last year. GAAP net loss for Q1 was $11.9 million, an improvement of $0.03 per share over 2017.

Non-GAAP net loss for Q1 was $6.9 million, an improvement of $0.08 per share year-over-year. Turning to the balance sheet, after our successful $110 million follow-on offering in February, we ended the quarter with $136.7 million in cash and cash equivalents and marketable securities.

The follow-on offering was completed to strengthen our balance sheet, and to ensure we are well positioned to capitalize on opportunities like our Practice acquisition as they arise. Additionally, the offering enabled us to meaningfully increase our public float, and we were quite pleased by the participation of new and existing shareholders.

Free cash flow for the first quarter of 2018 was negative $17.2 million, which was better than anticipated due to efforts by our collections team. As a reminder, we typically use cash in Qs one, two and four, and have a large cash influx in Q3 as the new academic year and budget start for many of our clients.

Looking forward to 2018, and as we have been saying over the past several quarters, excluding the cash from our secondary offering, we anticipate ending the year with approximately the same cash balance, give or take, as we finished with 2017.

Let me end my remarks with discussion around our expectations for the second quarter and full year 2018, which reflects the additional shares from our follow-on offering.

For the second quarter of 2018, we expect revenue in the range of $49.1 million to $49.7 million, non-GAAP net loss of $9.2 million to $8.6 million, and non-GAAP net loss per common share of $0.27 to $0.25.

For the full-year 2018, we expect revenue in the range of $204.5 million to $209.5 million as compared to our previous guidance of $203.5 to $209.5 million. We expect non-GAAP net loss of $32 million to $30 million, up from $32.3 million to $30.3 million and non-GAAP net loss per common share of $0.94 to $0.88, up from $1.03 to $0.97.

For calculating EPS, we expect our shares to be $34.5 million for the second quarter of 2018, and $34.2 million for the full year reflecting approximately 2.9 million shares from our follow-on offering. In summary, we had a solid start to the year and are excited by the opportunities in front of us for the remainder of the year and beyond.

I look forward to updating you on our progress next quarter. And speaking of next quarter, I would like to invite you all to our upcoming 8th annual user event, Instructurecon, being held July 24 through 26 in Keystone, Colorado.

This year, we're also hosting a Bridge user conference that runs right before Instructurecon, from July 22nd through the 24th, also in Keystone. Instructurecon was very well attended last year with over 2,300 attendees from almost 1,300 institutions.

It's a great time for us to connect with our customers and for our customers to connect with each other. And I hope you'll be able to join us. With that, let's open it up for questions. Operator, please go ahead..

[Operator Instructions] We'll hear first from Scott Berg with Needham. Please go ahead..

Hey, Josh and Steve. Congrats on a good quarter. I guess two quick ones for me. First of all, Josh, on the CRO search, sounds like you're close to making an announcement.

Outside of giving us obviously the exact name, can you help us with the profile of the individual? Does this individual help you with more of your corporate efforts like you're hoping to bring on or maybe some other color would be helpful..

Scott, I'm going to have to tell you that you're going to have to wait for the announcement. So I - yeah, I don't have any comments. I'm just going to tell you we will have an announcement soon..

Fair enough..

And we're super stoked about it. How about that? There is some color for you so..

Fantastic, we'll stay tuned. On the - one of your comments on the - I think it's K-12 space, Josh, was a customer that bought traction along with Canvas in the quarter, can you help maybe give us an update on what you're seeing there in the sales pipelines around Gauge? Obviously, it's early. This is a long opportunity, not a short-term burst.

But I thought it'd be interesting that you at least called that out..

Yeah, Gauge, I don't know if you had a chance to see the Gauge demo at Instructurecon last summer. It is incredible. It is such a radically different experience than people are accustomed to with testing systems. So we're really excited about how we're shifting the narrative to have people expect high quality software. It is early.

And we are getting a few early wins with Gauge, but it is a long-term play. It's a big market. It's a market that's evolving from paper and pencil to digital. And so, it's definitely a long game. And so we'll continue to announce Gauge wins. But I don't think you're going to see us really pick up ahead of steam with Gauge, probably until next year.

Between now and next year, we're just going to pick up a few wins here and there as we get accustomed to this new market that we're coming into..

Just one quick thing to add to what Josh said, Scott. It's important to remember that as we talked about, it takes a while to build the pipeline, sales cycles take a while. But also all these - everybody using an assessment platform is under contract with somebody. So there is a cycle to when these things come up for renewal.

And we're limited by - to some degree by that as well..

Got it, that's helpful. It's all I have. Thanks for taking my question..

Thanks, Scott..

Our next question will come from Brian Peterson with Raymond James..

Thanks, gentlemen, and congrats on the quarter. So first question for me, so just from the size of the 2018 renewal opportunity, just thinking about the higher-ed space, we're four months into the year. I know this has been a topic of debate for investors.

So any sense for how 2018 is shaking out, maybe versus prior years, any thoughts there?.

Yeah, Brian, this is Steve. We have been hearing rumors that a ton of Blackboard clients were coming up for renewal this year. We're not seeing anything unusual on the pipeline. It's pretty much business as usual. The same volume that we typically expected, I think I mentioned that. We did not forecast that there would be this big giant renewal year.

We just forecasted sort of a more typical year. And as we talked about, domestic Canvas will grow at a high-single-digit number this year in terms of new booking. That's all basically beginning to play out. So we don't see anything unusual going on..

Got it. Thanks, Steve. And maybe just one more on seasonality, as Bridge becomes a bigger part of the business, I'm curious to what extent - does that change seasonality at all? Does 4Q become a bigger quarter in terms of sequential revenue? How should we think about that? Thanks, guys..

Yeah, I think Bridge in the long run we may see some seasonality start forming. Right now, because it's early days, we're not seeing a whole lot of shifts in seasonality. We think Q4 might be the heavier quarter for Bridge, but we'll have a lot more data in the next year or two. Next caller, you're on the air..

Thank you. We'll hear next from Brian Essex with Morgan Stanley. Please go ahead..

All right. Thank you. Thank you for taking the question. Yeah, maybe, Josh, I was wondering if you could touch a little bit on sales-force efficiency, where you are in that process.

How substantial headcount adds has been this year? And on the flipside of that, how much have quota expanded and how you anticipate that to drive operating leverage this year?.

So as you know, we don't discuss specifics about sales heads. I can tell you that we have done some quota expansion. As we discussed in the past to increase the quota, really specifically around the corporate sales force, so that's kind of what's cooking with the sales team..

Got it.

And then, maybe just a follow-up, on Bridge discounting, is that diminishing as well kind of as it has over the past few quarters and how that's progressing in terms of kind of reaching fullest pricing on Bridge?.

We'll continue to discount as necessary. And that's going to be - that won't be an abrupt - we won't wake up one quarter and say, okay, we're done discounting. We're definitely going to be discounting heavily probably for the foreseeable future. Again, when we feel it's necessary. And a lot of times we feel it's necessary.

In the long run, we'll eventually get up to par in all areas of HCM suites that we're competed against. And we won't have to do that as often. But, even the veterans in this field, I mean, they still play discount games all the time. So that's going to be something that is always going to be in our toolbox, but, yeah, we definitely play that hand..

Just one other thing I would add to that, Brian - sorry, go ahead, Brian..

No, go ahead. Go ahead on that..

Just one other thing I would add is, you got to remember sometimes we're competing against somebody, who sold a suite and may have discounted the learning module to get the whole suite deal, and that's the pricing we're being compared to. So there are some of those dynamics that exist for us..

Okay. And maybe to sneak one more in.

Any experience or meaningful experience with Bridge renewals yet and how those, I guess, react on the pricing side and expansion of suite feature functionality usage by your customers?.

So, yeah, we are starting to see kind of the first batch of renewals come up in the last couple of quarters. And we are pretty happy with renewal rate, we have room to improve on the renewal rates, but it's definitely in the zone of where we want it to be. It will never get to where the higher end renewal rates will be.

I don't think anything ever will. But definitely - yeah, we're within spitting distance of where we want to be on the renewals for Bridge. And of course, we continue to try to upsell the new Bridge modules in these renewal contracts.

And I think, we mentioned earlier that there's - we're starting to get some traction with getting multiple module sales with customers with Bridge, which is exactly, of course, where we want to be..

Right. And I will say on the net revenue, that's on the local retention side that Josh was referring to. On the net revenue retention side, we're actually quite pleased, it's very early days, and early returns, but we're actually quite pleased with how it's doing.

And this represents the land-and-expand opportunity that we believe we have with the Bridge platform..

Got it. Very helpful. Thank you very much..

Thank you. Our next call will come from Brian Schwartz with Oppenheimer & Co. Please go ahead..

Hi, this is Koji Ikeda for Brian Schwartz. Thank you for taking my question. I just wanted to ask the question here on the Paychex reseller partnership that you announced, I believe last quarter.

Have you guys started to recognize any revenue from that partnership? And what's the best way to think about the ramp of the enablement of the Paychex partnership going forward? Thanks..

Sure, yeah. So we are really in implementation stage with Paychex. We may see some bookings towards the end of the year, but there is a lot of work on both sides to understand how to work together. We're excited to have Paychex as a partner, they're excited to be in this market with us.

But, yeah, we're not going to see anything substantial this year, although, I do anticipate some amount of bookings, but nothing that's going to be a needle mover.

This is a first big important step in a reseller opportunity for the corporate software side of the market, which we haven't done before, and it's exciting it takes care of the smaller end of the market, the SMB side, where we're kind of aiming towards to the larger side, enterprise side.

So it really check the box, but it's going to maybe, we're going to start seeing some strong effects from it, probably in a couple of years, even though the revenue will start probably coming later this year..

Got it. Thank you for that. And I just wanted to dig in a little bit deeper on an earlier question on the Bridge installed base. I believe you have about 500-or-so Bridge customers right now, and thinking about the expand opportunity within the Learn opportunity, I guess, more specifically on the installed base.

Could you talk about how these customers are deploying Learn right now across the organizations and maybe what's the best way to think about the expand opportunity that might already be embedded within the installed base?.

Well, it really depends on the type of customer, I mean, some of the smaller customers that maybe only have few thousand employees, generally, Learn is deployed across the entire company.

With the larger enterprise deals that we're involved in, a lot of these are very small installations like the large consumer product company that we mentioned earlier, that's a fantastic household name that we're in, but we just barely have a foothold into one part of their business.

And that foothold, of course, that's what we want to leverage into greater expansion in these enterprises and add modules, and kind of grow that's the long-term strategy. But really it's - there are two types. One is the full deployment with the smaller companies.

The larger ones, they are generally small deployments, generally of Learn, and then after that maybe we can get a Practice in, maybe we can get an Arc deal put together, maybe a Perform module, which is early days with Perform.

But yeah, generally, we are leading with Learn and it's either big company piece or the whole enchilada on the smaller companies.

Does that answer your question?.

Yeah, thank you very much. Thank you for taking my questions..

Sure. Thanks..

Our next question will come from Corey Greendale with First Analysis. Please go ahead..

Hey, good afternoon. Just a couple of questions, first of all on the - on Bridge, I think you mentioned Josh or Steve, someone, you mentioned that do you had a customer that bought, I think, you said bought Perform for the extended organization.

Did I hear that right? And can you just give us like a sentence on how you're using kind of Perform for the extended organization, not employees?.

Let's see here..

Maybe [if I'm mature, we can talk] [ph]..

Yeah, yeah. No. That's right. Yeah, you're quizzing me here. That's - that was our international deal with Metaview. They actually use Perform, Learn and Arc with that. And….

I think that's for their employee bit, isn't it?.

Yeah, I think so..

I don't think that's for the extended….

No, no, actually - yeah, they actually are using it for the - it's the deal they got with HP. So yeah, Metaview is - they do sales training. And so they have a partnership with Hewlett Packard. And they're using Bridge to train the Hewlett Packard employees.

So we consider that an extended enterprise deal, when it's not - when the software is not being used directly with the customers that sign the contracts. So that's how they're using our software is really using it in their business to train their clients' employees.

And specifically, because HP is a pretty big customer, they wanted to kind of up their game and decided to go with Bridge..

Yeah, that makes sense. I thought you said they were using Perform specifically for the extended enterprise. So maybe it - I don't want to - it sounds like it's not a big deal. I can come back to this.

So then next question I had is just I realize that there's probably sort of undue focus on Cornerstone relative to you guys, given that they're public, but two questions on that.

Point one, have you seen any change in customer behavior or win rates since Cornerstone kind of announced a re-platform of their learning of their LMS? And secondly, they were talking about - they are introducing a product, which is kind of bundling third-party software and selling - third-party content and selling subscriptions to that.

Is that something you've contemplated for Bridge, Learn or might contemplate?.

Well, I can tell you when a company like Cornerstone, which is a fantastic company, a great company, does something like that, it's really a spit in the ocean. It's a huge market, and we do not see these kind of effects from these announcements happening in our day-to-day sales.

It takes a whole lot of stuff to really make a market shift that we notice in a market this large. So the quick answer to the Cornerstone question, now we've seen no effect from any of those announcements..

And the only thing I would add to that Corey is, we're a little - from our perspective, we don't believe a content aggregation play is a good strategic move. Telling your clients, which contract - which are content they should be using and shouldn't be using. We think it's kind of dicey. We'd much rather be Switzerland in these situations.

So that's something we're not likely to pursue. We have tiny, little things with content, where we think it's convenient for some clients. But we don't - we are cautious about kind of going all in on some kind of content play..

Okay. And Steve, I just had one quick, one for you which is actually a two-parter. I think gross margin, I understand the expansion is going to slow [ph], I think gross margin in these software business was actually down a bit.

Just what drove that year-over-year, I mean? And then secondly, do you still expect that Bridge will account for 15% to 20% of bookings for 2018? Thanks..

So the non-GAAP recurring gross margin, it's actually up sequentially over last quarter and last year. Wait hang on one second. No, sorry, it's down slightly last year, but it was like 60 basis points. So that's kind of in the noise of what's going on there. We don't look at those fluctuations in any meaningful way.

I do know, we amped up on a bunch of reserved instances during the quarter, which will have potentially a little bit of a short-term impact, but a longer-term benefit. So yeah, it doesn't - there's nothing weird going on is the short answer..

Okay.

And the 15% to 20% from Bridge?.

Well, I can say, we'll have definitive news on the Q4 call, but we're still sticking by that statement?.

Okay, great. Thank you..

Thank you. Terry Tillman with SunTrust Robinson Humphrey has our next question. Please go ahead..

Hey, good afternoon, gentlemen.

Can you hear me, okay?.

We sure can, Terry..

Awesome. I have two questions with one part each. The first question is related to, in your prepared remarks, Josh, and I think it was in the press release, too, talking about success with cross-selling.

You guys have been at this for a while now in terms of going out and acquiring new customers, but you've also been innovating and adding more products to sell.

Is there any kind of natural evolution that's starting to shake out whereby we're starting to see more installed base selling? And could that also be reflected in some of your kind of go-to-market actions, a greater focus there? Or am I just reading too much into it?.

No. I think, you're reading right on it.

I mean, we tried to share statements this quarter that really kind of reflects the success that we're having in upselling and cross-selling, and that's really the long-term strategy of the business, is to continue to build very high-quality software and upsell and cross-sell that high quality software to a very happy customer base.

We think, long-term to have our business be really sticky with our markets is a fantastic strategy. And it takes time to build that up, of course, this isn't a one-hit-wonder type of opportunity. This is you're really weaving an ecosystem together. And so - and we're starting to see that.

So we shared bits and pieces of data that kind of reflect some of that early success. Over the next year or two, we'll continue to kind of update the Street on how that upselling and cross-selling is going. But yeah, I think this is the first time we've really put a bit of an emphasis on that, because it is exciting to see that starting to happen.

And we'll continue to put out revenue generating software 12 to 18 months. That still our strategy. That's still the schedule. And every time, we add something new, it will take a year to kind of start getting good in the market. But the one we did the year before and the one that we did three years before that, they'll start their maturity cycle.

And so just layer upon layer, we're going to build a really strong, impenetrable revenue source from multiple sources in the market. So that's the plan, and you're right to spot that out. That's exactly, what we were trying to communicate..

Awesome. Thanks for that answer. And the second part - the second question with just one part is just related to - and to your point Josh, the second major product in the corporate side is Perform. And I know it was still early in that maturity cycle, and you only had a couple of months of selling it.

Can you all give us an update in terms of how we think about the comparative kind of economies or the deal sizes versus Learn? I know, you've made some statements in the past, but I would just love to get an updated view given you're out in the market with it? Thank you very much..

Sure, sure, yeah. I mean, Perform, we're able to charge more for Perform than we are for Learn.

Like you said it is early, but I can - I think I can definitively say that, on average, we're going to have a significantly higher pricing with Perform and be able to get that in the market over Learn, especially with the innovation and really the visibility that a Perform module has with an employee base over the Learn product.

So yeah, just as we expected, we are seeing that, but each deal is unique especially when you're selling multiple modules into a deal. You make pricing trade-offs. And every deal is unique and some customers value one module over another. And so - but list pricing wise, yes, there is higher value with Perform over Learn..

Thank you..

Thank you. We'll move now to Justin Furby with William Blair & Company. Please go ahead..

Thanks, guys. And - sorry about my voice. I guess, two questions.

First, for Josh on the - just kind of going broader from the Paychex partnership, when you think about partnerships as a whole on the corporate side for you guys, can you give sort of an update on where you are with sort of the system integrators, consultants? And how much of those Bridge deals are being implemented by you guys versus third parties? And then I've got one quick follow-up..

Well, yeah, we continue to develop partnerships. Some of them are formal partnerships like the Paychex deal. Some of them are just informal integrations. I mean, we just - in Q1, we launched LTI integrations with YouTube and Vimeo. And so those are more technical partnerships, technical integrations.

We're going to see a lot more partnerships on the corporate side than that are more formal, like reseller-type agreements than we do on the edu-side, which are really always is going to be direct. But as I think you know we literally have - I think we're close to 300 partnerships, official partnerships across our product base.

But the Bridge ones are going to be unique, because implementation-wise there is an opportunity there. Even though it is a SaaS play, there are opportunities in integrating content, specifically with customers.

And then also like for example the Metaview deal, where we have an extended enterprise opportunity where we're arming our customers with technology that they can bring to their customers.

And so, we're going to see a lot more dynamic type partnerships on the bridge side, whereas on the edu-side they're a little more regular cut-and-dried type partnerships. So I think that gives you some flavor about the characteristics of the type of partnerships we're seeing on Bridge.

But I just also want to point out that it's not like these are on-premise installations that takes six months. I mean, so we're never going to have those kinds of partnerships, where we're working heavily with system integrators. Bridge is just - it's still pretty easy to set up and get installed.

In fact, I think I just saw a stat recently that showed that the implementation time is somewhere around 45, 60 days, pretty quick. And, of course, if we need to get it up and running, we can do it in a weekend. But really people take time. Our customers want time to kind of ease into it. But, yeah, it's still a SaaS product.

It's still pretty quick and there is not a whole lot of opportunity for system integrators to get a piece of the pie on implementation. It's really around other value-added services where we're going to be able to create synergies..

Okay, got it. That's helpful. Thanks. And then, Steve, for you I think your guidance for Q2 is maybe a little bit lower the consensus is, is there anything to call out there or is it just we were a little bit too far ahead of ourselves? Thanks..

No, I - there is nothing to call out there. Obviously, we haven't given guidance for Q2 prior to this call, in the press release that we issued a few minutes ago. I think it's just for you guys on the sell-side, it seems to be a pretty consistent thing of a little bit of rejiggering among Qs 2 through 4.

But it's within a few hundred thousand dollars, so I view that in terms of being in the noise of how you guys forecast versus how we forecast..

Got it. Thank you very much..

Our next question will come from Alex Paris with Barrington Research. Please go ahead..

Good afternoon. This is Chris Howe sitting in for Alex Paris, just had a few questions as it relates to the corporate side and the Bridge products.

For the wins in the quarter, can you maybe provide some additional color on the competitive landscape that you saw within these deals? And what are you seeing as far as your win rates for these larger-suite or as you describe them multiple module deals? And you mentioned Metaview in Denmark.

I just kind of wanted to gain some perspective on what you look for as far as geographies, markets, when you target the international marketplace. Thanks..

Yay, let's see, it was like five partner, wasn't it? I'm teasing you. Let me try to - let me try to attack….

I was squeezing in there..

No, it's okay. No, it's fine. I'm happy to talk. So I recall it. So, let's talk about Metaview really quick. So that is an international deal. We do have a couple of sales reps out there, selling Bridge internationally.

Although we have not invested heavily into infrastructure internationally for Bridge, because we're just - we're really just throwing them out there and see what they can catch. And as we deploy bridge internationally over the next year or two, we'll start to layer upon infrastructure and investment internationally.

But, for now, just a handful of sales reps are out there just seeing what they can find. And so, really Metaview was an example of that. We just got lucky and found a great fit there. As far as Bridge, competitively who we're seeing, we see kind of the same as we usually see out there.

I think with the Ancestry deal we displaced, I think with Saba, that's right - or no, SumTotal, we displaced SumTotal. Sometimes we displace Saba; occasionally, Cornerstone OnDemand. I mean that - everyone you can think of and probably two dozen that you've never heard of, these are the types of folks that we continue to displace.

But let me remind you, this is a very fragmented market. There is no 800 pound gorilla that we continuously hit up against. I wish there was. Honestly, that would make our life a lot easier. We know exactly how to focus our message against a dominant competitor. But that's just not the case in the corporate side of the market. But we hit them all.

And as far as the win rates go, we are seeing the win rates largely remain consistent quarter to quarter. We keep trying to push them up and find where we can really have an unfair advantage and get our messaging tuned. But they continue to remain consistent one quarter to the next. So that's the latest on the win rates.

Was there another part of your question that I didn't hit?.

I think you got every part. Thank you for the color..

Sure. Thanks..

Thank you, ladies and gentlemen. That will conclude our question-and-answer session for today. At this time, I would like to turn the conference over to Josh Coates, for any additional or closing remarks..

All right, thanks everyone. This concludes our Q1 2018 earnings call. And we look forward to talking to you for our Q2 call in just a few months. All right, thanks everyone. Bye-bye..

Again, that will conclude today's conference. Thank you all for your participation and you may now disconnect..