Good afternoon and welcome. Please note that the live and interactive webcast of today's call may be accessed via the Investor Relations section of the company's website at www.investors. on24.com. Upon completion of the prepared remarks, we will open the call for questions, which may be submitted via the webcast portal or the dial in line.

Please note that this call is being recorded. At this time, I would like to turn the conference over to Nate Pollack, Vice President of Investor Relations. Please go ahead..

Thank you. Hello and good afternoon, everyone. Welcome to ON24's Fourth Quarter and Full Year 2021 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 in financial performance, including guidance for the first quarter and full fiscal year 2022. These forward-looking statements are subject to known and unknown risks and uncertainties.

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 statements to reflect events that occur after this call.

Please refer to the company's periodic SEC filings in 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'll use these non-GAAP financial measures to evaluate our ongoing operation 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.

Sharat?.

Revenue on marketing, virtual events, and personalized content experiences. Our vision is anchored by delivering a system of engagement for marketing and sales teams to create digital experiences that engage audiences, turn engagement data into insights, and use those insights to drive results.

Within our virtual events pillar, Go Live is the newest solution and released at the end of December. It's a self-service, multi-session video and networking event experience that maximizes social networking and audience participation.

Organizations can build complete end-to-end external or internal events such as roadshows, user groups, virtual pop-ups, customer and partners summits, town halls or company meetings using pre --built templates and an easy-to-use and engaging interface.

First party engagement data continues to be the foundation of each of our products of our platform. In ON24 Go Live registered event activity and attending engagement is captured along with other ON24 experiences into a single dashboard in prospect engagement profile.

We have received positive market feedback and expect this product will ramp in the coming quarters as we build awareness in the market and throughout our customer base.

According to a recent McKinsey report, 2/3 of corporate customers intentionally now reached for digital or remote, over in-person engagement when given a choice and they're doing so at every stage of the purchasing journey. As a result, sales and marketing teams are dealing with a new set of buyer expectations, to gather attention in a crowded field.

To adapt to this new world, we believe creating personalized digital experiences at scale, stable stakes to break ahead from the pack, but must go beyond on the name and logo, we believe should be driven by first party data insights. Throughout the year we will be releasing enhancements to our AI-driven personalization capabilities.

Whether our customers are targeting known or unknown individuals, our platform will be able to tailor personalization experiences by, among other things, account to the specific organization, contact to a specific role, call-to-action and content, and buyer intent and segmentation.

This is all that, by first-party data and insights collected from every ON24 digital experience. These personalization enhancements will empower our customers with a deeper understanding of buyer preferences, and deliver real-time personalized experiences directly within our platform. To sum up, I continue to be optimistic as ever about our future.

We have experienced tremendous growth in a short period of time with our ARR increasing by a 143% over the past two years. While we are now moving into a post-pandemic world, a powerful transformation continues to be underway in the B2B world.

Across industries, sales and marketing for B2B organizations is rapidly moving towards digital channels and there's an increasing need for our digital engagement platform that leverages data and insights to drive revenue growth.

We are focused on improving areas of our business and remain confident on both our long-term growth opportunity and the ability to re-accelerate growth in the coming quarters. ON24 is a growth business against the backdrop of powerful secular trends and a large TAM.

With that, I'll hand it over to our CFO, Steve Vattuone, to walk you through our Q4 results in more detail and provide our outlook.

Steve?.

Thank you, Sharat, and good afternoon, everyone. I'm going to start with our fourth quarter and full-year 2021 results and we'll then discuss our outlook for the first quarter and full-year 2022.

Total revenue for the fourth quarter came in at the high end of our guidance range at $52 million, representing a decrease of 2% year-over-year against a cop of a 123% growth in the year-ago period. Subscription and other platform revenue was $45 million, an increase of 9% year-over-year against the cap of 115% growth in the year-ago period.

As a reminder, other platform revenue includes customer overages, which has historically trended in the range of 3% to 4% of total revenue depending on customer usage of our platform and seasonality. We are seeing more of our customers choosing to add additional capacity into their contracts at the time of renewal.

At such overages were approximately 2% of total revenue in Q4 and we expect that trend to continue. Professional Services revenue was $7 million, a decrease of 41% year-over-year, and representing approximately 14% of total revenue compared to 23% in the year-ago period.

This decrease was in line with our expectations that we provided in the last quarter. For the full year total revenue was $203.6 million, an increase of 30% year-over-year. Subscription in other platform revenue was $175.9 million, an increase of 43% year-over-year. Professional Services revenue was $27.7 million, a decrease of 19% year-over-year.

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. Net new ARR in Q4 was $4.2 million, resulting an ending ARR of $171.4 million. This represents an increase of 12% year-over-year, against a comp of 100% ARR growth that we delivered in 2020.

We continue to see customers make longer-term commitments to our platform with multi-year contracts, comprising 35% of our ending ARR, compared to 30% at the end of 2020. Our dollar-based net retention rate or NRR, ended the year at 97%.

As a reminder, NRR is a lagging indicator and reflects the impact of elevated churn that we experienced over the past three quarters with first-time renewals, particularly with organizations that were not our ideal customer profile and had one-time needs, as well as some customers that rationalize their expansions.

In fiscal 2022, we expect that we will see improvement in our NRR as the year progresses. Despite the elevated churn, our average ARR per customer at the end of 2021 stands at $81,000 compared to $77,000 in 2020, and $55,000 in 2019. Turning to customer metrics, we had a strong quarter for new logo acquisition.

Total customer count increased by 68 quarter-over-quarter to 2,122. We ended the year with 366 customers contributing ARR of $100,000 or more, representing an increase of 21% from the prior year. These $100,000 plus ARR customers comprise 67% of our ending ARR.

As a sign of our strategic positioning and strong expansion, we now have 19 customers contributing ARR of $1 million or more, representing an increase of 36% year-over-year. 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, 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. Gross profit for the quarter was $40.1 million, representing a gross margin of 77% and a decrease of 400 basis points year-over-year.

We continue to invest in our cloud infrastructure capabilities to enable sustained growth and growing our customer success teams. Turning to our operating expenses. Sales and marketing expense in Q4 was $24.9 million compared to $19.5 million in Q4 last year. This represents 48% of total revenue compared to 37% in the same period last year.

We have been investing in go-to-market enablement in marketing to drive market awareness. R&D expense in Q4 was $8.1 million compared to $5.8 million in Q4 last year. This represents 16% of total revenue compared to 11% in the same period last year.

We have been ramping our investment in R&D as we accelerate our pace of product innovation and bring new products to market. G&A expense in Q4 was $8.9 million compared to $6.9 million in Q4 last year. This represents 17% of total revenue compared to 13% in the same period last year.

Our G&A expenses have increased due to the costs associated with being a publicly traded company. Over time, we expect G&A expense to scale and decrease as a percentage of our revenue.

Our operating loss for Q4 was $1.8 million or a negative 3% operating margin compared to operating income of $11.1 million in an operating margin of 21% during the same period last year. For the full year, operating income was $2.1 million or a 1% operating margin.

Net loss in Q4 was $1.7 million or $0.03 per share based on approximately $47.8 million basic and diluted shares outstanding. This compares to net income of $11 million or $0.57 per diluted share in Q4 last year using approximately $19.1 million diluted shares outstanding.

For the full year, net income was $1.4 million or $0.03 per diluted share using approximately $51.5 million diluted shares outstanding. Turning to the balance sheet and cash flow. Cash used in operations in Q4 was $4.5 million compared to cash flow from operations of $10.7 million in Q4 last year.

Free cash flow was negative $5.6 million in Q4 compared to positive $10.3 million in Q4 last year. Free cash flow margin was negative 11% in Q4 compared to positive 19% in Q4 last year. For the full year, we generated free cash flow of $1.6 million and ended the year with $382.6 million in cash, cash equivalents and marketable securities.

In December 2021, the Board of Directors authorized a $50 million share repurchase program. During the fourth quarter we repurchased 428,218 shares at a weighted average price of 16.88 per share, utilizing $7.2 million of the $50 million authorized under the program.

We believe our current market valuation does not reflect our long-term growth potential, and we will continue to be opportunistic with our share repurchase program. With that, let's turn to guidance. At a high level, we look at FY2022 as a tale of two halves with a challenging start, and improving sequentially each quarter.

Our largest challenge that we experienced in 2021, was the first-time renewal cohort, which was four times the dollar value of first-time renewals in 2019, and we experienced a churn rate that was approximately double that of the 2019 cohort.

The share of first-time renewals in 2022 is expected to normalize back towards 2019 levels against the backdrop of an improving customer profile. We believe Q1 2022 will mark the last COVID-influenced renewal quarter.

The Q1 renewal cohort comprises a significant portion of large deal renewals, and we have experienced higher than anticipated customer rationalization, particularly with a handful of customers who previously signed large expansions during COVID, that were up for renewal for the first time.

Our gross retention for pre--2020 cohorts has been stable, which gives us confidence that overall retention will begin to trend upwards in 2022 as we move past the laps of these COVID-influenced cohorts.

For Professional Services, we are continuing to see more of our customers electing to be self-service, which speaks to our platform's ease-of-use and overall user experience.

As a result, we expect that the mix of Professional Services revenue will be in the low teens as a percentage of total revenue in fiscal 2022 compared to 14% in 2021 and 22% in 2020 which will drive a low teens year-over-year decline for Professional Services revenue in 2022.

As I mentioned earlier, overages which are included in other platform revenue have been trending lower to approximately 2% of total revenue as more customers choose to add additional capacity in their contract at the time of their renewal.

We estimate the combination of lower expected professional services and overages revenue will act as an approximately 3-point headwind to our full year revenue growth rate with the larger impact from the first half.

As Sharat highlighted, it has become clearer that the world is moving from pandemic to endemic and we have incorporated our early view of post-pandemic digital budgets into our outlook.

Lastly, we're enhancing our customer success capabilities, launching our partner ecosystem, bringing new products to market, and making improvements to our multi-product enterprise sales motion. We're optimistic that we will see a positive impact from these initiatives. but we believe it will take a couple of quarters to realize the benefits.

Now moving to Q1 guidance. Our bookings in Q1 2021, were more heavily weighted towards the early part of the quarter, compared to our normal back-end loaded quarters, which is driving atypical linearity for the Q1 2022 renewal cohort.

In January, we experienced higher than anticipated customer rationalization, particularly with a handful of customers that have large expansions in prior periods.

The challenges we faced with rationalization coupled with the non-linearity of renewals will have an impact on the timing of recognized revenue, resulting in lower sequential subscription revenue. Professional Services revenue is seasonally lower in Q1 compared to Q4, and we expect that it will represent approximately 10% to 11% of total revenue.

Overages represented approximately four percent of total revenue in Q1 2021, and we now see overages trending to approximately 2% of total revenue in Q1 2022. As such, we expect total revenue in the range of $47 million to $48 million.

We expect a non-GAAP operating loss in the range of $8 million to $7 million, and a non-GAAP net loss per share of $0.17 to $0.15 per share based on $47.7 million basic in diluted shares outstanding. And for the full year 2022, we expect revenue in the range of $200 million to $204 million.

We believe 2022 will be a tale of two halves, of Q1 marking the trough and subsequent improvement in net new ARR throughout the year. As the profile of renewal cohorts improves and customer rationalization of expansions in 2020 and '21 also subside.

Exiting Q4, 2022, we expect an ARR growth rate in the low teens, which will accelerate into fiscal 2023. In the second half of the year, with the compares largely behind us, we expect subscription in other platform revenue growth to re-accelerate to the mid-single digits.

Professional Services revenue is expected to be approximately in the low teens as a percentage of total revenue for the full-year 2022 compared to 14% in fiscal 2021 and 22% in 2020, resulting in a low teens year-over-year decline.

Given the moving parts within revenue, we believe ARR is the most appropriate metric to evaluate the underlying momentum of the business. We expect a non-GAAP operating loss in the range of $30 million to $27 million, and a non-GAAP net loss per share of $0.64 to $0.58 per share, using $49 million basic and diluted shares outstanding.

As I mentioned, we faced headwinds in 2021, primarily from the elevated churn within first-time renewal cohorts and rationalization from large expansions during COVID. We're confident that these headwinds will soon abate and believe that our long-term market opportunity has not changed.

As a result, we believe that we have a unique opportunity to invest in accelerating our long-term revenue growth rate and advancing our leadership position. In 2022, we plan to make targeted investments in our go-to-market function, public cloud infrastructure and product development initiatives.

Overall, we do expect to see bottom-line improvement throughout the year as the top-line reaccelerates, and we drive leverage from the investments made over the last year.

As we look ahead, we are laser-focused on further accelerating ARR growth in an efficient manner, improving net dollar retention, and driving operational improvements across the business.

We expect an improving bottom line in 2023, and we believe that we have a clear path over the next several years to achieve our target model of 20% or higher non-GAAP operating margins and driving top-line growth. With that, Sharat and I will open the call up for questions.

Operator?.

Thank you. [Operator Instructions]. We'll now take our first question from Arjun Bhatia with William Blair. The line is open. Please go ahead..

Perfect. Thank you and thanks for taking my questions.

I wanted to start off with asking how you're thinking about profitability in 2022 and how you think about the ROI of the investments that you're planning to make next year, especially as the world moves from pandemic to endemic? As you've pointed out, the demand environment is being impacted, a little bit of customers rationalizes them spend going into 2022.

I would love to hear more on the go-to-market investments that you're making. But, if you can answer broadly as well, that would be great..

Hi, this is Steve. I'll go ahead and take the profitability questions. First let me start by saying we grew our ARR by a 123% over the last two years and we've been profitable both years. Now our market opportunity has not changed, every company is now digital.

Now we are facing some near-term factors overlapping the last of the COVID impacted quarters here, [Indiscernible] some larger rationalizations in Q1, but we believe Q1 will be the trough for that. We're seeing new customer acquisition strength, we added 68 Net-new logos in Q4 and we're pleased with the pipeline.

But we believe ARR is the best metric to evaluate the momentum of the business, and revenue is a bit above lagging indicator. Now we've always run this company prudently, but we are making targeted investments to drive growth.

But major issue really has been churned and we believe that will be behind us shortly, and we'll start to see the growth inflect in the second half. Now we will obviously watch the investments we're making in 2022 and if we don't see them paying off, we'll make adjustments as needed..

Yeah, let me add urgent to what Steve just said, churn has been our biggest issue. If we look at 2021, I mean, we did quite well on growth of ARR, but we can outgrow the churn. And if you look at the numbers we talked about, the first-time renewal cohort where we saw the maximum churn. That size was four times what it was in Q1 in 2019.

And the churn or the first-time renewal cohort was twice what it was in 2019, so we can outrun that churn. Now the good news is that as we get to Q2, we've renewed the peak of the Q2 cohort already last year. And the largest cohort, which is the existing renewal cohort, which is only about two-thirds of total has been stable.

The retention level has been stable in that through COVID. Now regarding investments, you asked about go-to-market investments. I mean, we are focused on targeted investments where we are seeing higher sales productivity and what we need to face in the enhancements in the customer success function.

Now, we've made investments there but we are continuing to learn from our customers in terms of coverage ratios, in terms of talent, in terms of leadership, what we need to do, the onboarding program that we are doing, we are elevating the quality of that. We've launched two new products in 2021. Breakouts did perform really well.

At the end of last year, we launched Go Live. We're seeing good momentum on those products and we will be adding more products in Q2 as we move forward. We have improved our leverage from our partner channel. We've talked about this before. In early 2021, the contribution was low single-digits, by the end of '21, we brought it to high single-digits.

My target there in the future is to get that number to about 20%. Of course, the focus on our enterprise sales execution with multiple products making sure it is consultative, that we can sell multiple products.

We're going to make the investments prudently, but we are a growth business and so our focus is that -- and our focus there is, with these investments and what we're doing, we should end the year at a growth of low teens ARR which we should further accelerate into 2023 to high teens. That's our focus..

That's very helpful color. Thank you..

[Operator Instructions]. We'll now move on to our next question from Brent Bracelin with Piper Sandler. Your line is open, please go ahead..

Hi, guys this is Hanah Rudoff on for Brent today. Thank you for taking my questions. I guess first one is just could you talk more broadly about how you're thinking about your durable growth rate in the post-pandemic world.

And what is giving you confidence in that?.

Yeah. Let me let me take that. Our market opportunity has never been having never been larger. We still see a large TAM over $40 billion. I mean, we know that sales and marketing moving, increasing their digital channels, so nothing has changed there. The way we look at it is, Q1 is the cross of our business. Churn has been our biggest issue.

And as we lapped the COVID quarters, there are two things that are happening. One is, our cohorts literally get better. Once we get past the Q1 cohort, the cohorts get better. So just from a mathematical point of view, it is easier for us to get past some of those churn issues.

Again, I just want to highlight the existing renewal cohort has been quite stable. Now, in terms of growth rate with the investments that we're making and the things that we're doing, we feel quite comfortable that we should end the year at a lower teens ARR growth rate, which we can further accelerate in 2023 to high teens.

That's what we feel quite good about, talking about based on the investments that we're making currently..

Great. That's helpful.

And then could you remind me where you are in terms of your full credit activities for your sales force?.

We closely crack sales productivity, and in 2021 the sales productivity was slightly higher than 2019 in spite of the large number of hires that we made. So ARR in 2021 was mainly impacted by the churn in the first-time renewal cohort. Now we want to improve the productivity that we had in 2021.

Again, it was better than 2019, but we are laser-focused in terms of improving our churn, we are laser-focused in terms of increasing our productivity, but I feel good about the capacity that we have and the productivity right where we are.

And we are planning to not make large investments, but very selective and targeted additions in areas where we see strong productivity-like markets like Japan, like our installed base and expansion business. So that's where we intend to continue to invest..

Great. Thank you..

We move onto our next question from Srinek with [Indiscernible], your line is open. Please go ahead..

Hey, this is Srinek (ph) staying in for Rob. Apart from the COVID affected down renewals and the SMB churn along with the non-ideal customers that you have been talking about and you've been dealing with, it also appears that the net new 100 ARR customer ads slowed quite a bit sequentially.

Can you elaborate on the underlying factors like how much of it is just demand pulling and rationalization affecting the gross ads versus churn, specifically amongst these larger customers or is there anything else that's going on which we're missing and just a follow-up after that?.

Yeah, Srinek, we added four net adds to the 1 million plus ARR customer cohort, now we have 19 in total. We added that in Q4. We had a strong quarter of about 68 net new logos. The best app group in Q1 at about the same levels in 2021. We saw some initial courses that were just under the a 100k mark and we expect to expand those over time.

Just to provide you a little more color, our average new enterprise ASP in Q4 was the highest on a year-to-date basis. That was the highest that we have all year. We feel quite good about where we are. That should provide your perspective..

Got it. Just a quick follow-up. I know you mentioned about this briefly.

What are the behaviors you're observing from you’re really most important enterprise customers in terms of multi-product adoption, new product adoption trends, Go Live which is now GA and so on?.

Yes, let me answer that in multiple parts. First of all, our multi-product adoption is 35% in Q4, and it's doubled compared to where it was in 2019, end of 2019. We are seeing our customers adopt multiple products across the board and we're going to continue. That as an important motion now, especially with Breakouts earlier and Go Live currently.

Specifically, about Go Live, let me make a couple of comments. We've received -- we just launched it at the end of last year, so it's been about a month and a half or so. Excellent customer feedback. We are building awareness and pipeline and we expect it will ramp through the year and contribution accelerate at the end of the year.

I want to make one other comment because that is important. In my prepared remarks, I talked about -- I gave the example of a large customer and how our large customers are behaving. This is the example of one of the largest physical and digital events organizing forums and who increased their spend with ON24 during COVID by 3x.

They just renewed their contract with ON24 in January, it's one of the rationalizations that we've talked about, but they have signed a multi-year agreement, annual ARR spend of seven figures, which is 2x their pre-COVID spend. They went to 3x and came down to 2x. But still, it's a pretty significant increase in the wallet share.

That's what we're seeing in many of our large customers. The good news there, Srinek, is by the time Q2 happens, all those customers have already gone through one complete cycle of rationalization and so we feel good about that. Hopefully that gives you a color, how we see our customers evolve them spend going forward..

Got it. That's really helpful..

The percentage of our ARR multi-year agreements at the end of the year was 35% and that's the highest it's ever been..

Got it. That's really helpful. Thanks, Sharat. Thanks, Steve..

Thank you. We move on to our next question from Sterling Auty with JPMorgan. Your line is open. Please go ahead..

Hi, this is Drew on for Sterling.

You mentioned that ARR growth should be in the low teens as you exit 2022, should we expect more of that to come from average ARR per customer or from customer growth?.

I think you'll see it coming from both. We're seeing our average ARR per customer has ticked up year-over-year. Drew. It went from $77,000 per customer at the end of 2020 to $81,000 per customer at the end of this past year. We're pretty good at expanding within our customers. So, I'd expect both will contribute to that number..

Just to add to what Drew just said, and I just talked about that, Drew, is we added 68 Net-new customers in Q4 which in spite of the churn, we feel very good about so of course the installed base will contribute but we're also very laser-like focused on Net-new adds which is the driver of the business..

Got it. Thank you..

We'll take our next question from Scott Berg with Needham. Your line is opened is open. Please go ahead..

Hey guys, this is Josh on for Scott.

If you look at the customers who are downsizing their subscription, is there any commonality in terms of the industry or how they were affected by the pandemic? And then, is this entirely like lower usage renewals or they also decrease in number of modules that they're using as well?.

Yeah. I think during the pandemic what happened is, when the physical world had stopped, people had added a lot more workspaces, log-ins on a global basis across the organization. If you are a large enterprise, you needed more licenses in different markets.

And so, people may have gone based on the example I gave you about this, the physical and digital events, company people may have expanded their usage much widely; in many cases they expanded their users to three or four times what they were doing pre-COVID.

What we have seen as people are rationalizing their [Indiscernible] in Q1, what we've seen them reduce some modules, remove some work spaces and login; and then to really optimize it to what they really need going forward.

But again, when you look at our top renewals, what you will see is the ARR contribution of the top renewals, even after rationalization, is meaningfully higher than where it was pre-COVID, so that's a very important thing. The other question you asked about is it different based on different verticals.

No, I think it's been very similar based on the different verticals because one of the things that we do with these larger customers, our focus really has been on being a sales and marketing engagement platform which provides data and insights to drive revenue. That's a very important part that they already use.

That usage across the region continues to be strong and that's what we've seen..

Okay, got it. That's helpful. The guidance implies that you are still investing pretty aggressively in the business in terms of growing operating expenses over the next year.

Can you give us some more color on what are the priorities for investment this year and how should we think about that split and whether it's across sales and marketing, R&D versus GNA? Thanks..

Yeah. In terms -- in terms of --.

Let me -- let me -- Go ahead, Sharat..

I think let me -- let me start that we are focused on making targeted investments this year and Steve is going to provide more color. We talked about in enhancing our partner channel. We also talked about areas where we are seeing strong sales productivity. In those areas, we are going to make more investments.

We talked about how last year we really impacted by churn, we can outrun the churn. We are continuing to make investments on our engineering and product functions as you would expect because we expect to continue to bring more functionality.

On the customer success function, we are continuing to look at leadership and talent to enhance our go-to-market. But in each of these cases, we are very focused on very targeted investments.

If you look at our expense structure, we did go up pretty significantly compared from 20 -- when we started investing in the second half of 2020 to second half of 2021. But since then, our investments have generally been a lot more targeted.

Steve?.

I'll add a little bit of color to what Sharat was saying in terms of the gross margin. We do expect to see some gross margin compression of probably a few 100-basis points year-over-year in 2022. Now we are making investments in customer success to enhance our capabilities and coverage ratios that are scarce to improve our customer retention.

And also, our newer product operating they run in the public clouds. They do have a slightly lower margin profile. And we're continuing to invest in our network infrastructure. Now we're not planning a wholesale move of the platform to the cloud, it’s really the newer products that will be cloud native.

We are committed to our long-term gross margin target of 78% to 80% as we grow and see leverage over time, but we are making some of these targeted investments there in 2022..

Got it. Thanks, guys..

Thank you. It appears there are no further questions at this time. I'd now like to turn the conference back to Sharat for closing remarks. Thank you..

In closing, to reiterate, 2021 was the most pivotal year in the company's history and I couldn't be more excited, before what lies ahead. I want to thank all of our dedicated employees and amazing customers for the incredible milestones that we achieved.

We are the leading B2B sales and marketing platform for digital engagement; delivering actionable data and insights to drive measurable business growth. While we have some near-term factors impacting our outlook, we have a roadmap per execution and strong confidence in our vision and strategy.

We're proactively making improvements in areas of our business and the entire team is focused on executing against our priorities for 2022. Finally, I invite all of you to join our customer conference.

The ON24 experience on April 20th, where you can learn more about our platform vision, hear firsthand from our customers, and see the exciting product innovation in action. Thanks everyone for being on the call today..

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect..