Good day, ladies and gentlemen, and welcome to the Similarweb Q3 Fiscal 2021 Earnings Conference Call. [Operator instructions] At this time, it is my pleasure to turn the floor over to your host, Annie Rosenberg. Ma'am, the floor is yours..

Thank you, operator. During this call, we will make forward-looking statements related to our business, including statements related to the expected performance of our business, future financial results strategy, the potential impact of the COVID-19 pandemic and associated global economic uncertainty, long-term growth and overall future prospects.

These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or implied during the call.

Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements and reported results should not be considered as an indication of future performance.

Please review our filings with the SEC, including our final prospectus and section entitled Risk Factors therein filed with the SEC on May 12, 2021, for a discussion of the factors that could cause our results to differ. Also note that the forward-looking statements on this call are based on information to be available as of today's date.

We disclaim any obligation to update any forward-looking statements, except as required by law. As a reminder, certain financial measures we use in this presentation and on our call today are expressed on a non-GAAP basis.

We use these non-GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes.

We believe these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business, results of operations or outlook.

However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental informational purposes only. They should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.

A reconciliation between these GAAP and non-GAAP financial measures is included in our earnings press release, which can be found on our investor relations website at ir.similarweb.com. With that, I will turn the call over to Or Offer, CEO of Similarweb..

Thank you, Annie and thank you all for joining us here today for our Q3 2021 earnings call. It's great to be here with all of you this morning. Our team is executing at a very high level and we delivered a very strong result for the quarter.

As a result, we are pleased to raise our revenue guidance for the full year of 2021 to $135 million, representing a 45% growth year over year. Q3 was a strong quarter in which we achieved a number of new milestones.

First and foremost, I'm proud and excited to report that in Q3, we saw our ARR exceeded $150 million just one year after we reached the $100 million ARR back in Q3 2020. Also in the quarter, our GAAP revenue increased 46% year over year to $35.6 million, this result exceeding our guidance.

Q3 was a record quarter for us for both new customer acquisition and retention. Our customer base grew by 174 accounts, including the addition of amazing new logos across the diversity of industries, including Volkswagen Group, Toshiba Electronics, the London School of Economics, Royal Caribbean, Quest Diagnostics and News Crop Australia.

Our most significant growth come in our largest and most strategic customer segment, those companies will generate more than $100,000 in ARR. In Q3, we set a new record, adding 25 additional $100,000 customers, an increase of 48% year over year. These critical segments now represent over 50% of our total ARR for the first time.

We're seeing strong momentum as our expanding product portfolio is contributing to greater velocity in our London expand direct sales motion.

In Q3, we set a new record for NRR improving from the previous high of 106% at the end of Q2 to 110% in Q3 in that critical customer segment of account with over $100,000 in ARR; we improved the NRR to 122%, up from 118% in Q2, also a new record high.

Those improvements are driven by expanding usage of our products as well as by our customers who purchased more than one of our digital intelligence solutions.

As you know, we offer a complete suite of digital intelligent solutions, supporting a wide variety of use case for digital marketing, sales, market research, e-commerce strategy and alternative data for investors. Today, more than two-thirds of all of our customers are purchasing more than one solution.

As an example of how our portfolio strategy is helping to drive deeper customer penetration. In Q3, we completed one of the largest bids in Similarweb history, a combination of up-sell and cross-sell with a major multinational Internet technology company.

This was a seven figure addition to our existing relationship; making this the second consecutive quarter we have been able to announce an ARR contract of this size. This customer will be using four of our five digital intelligence solutions, representing a total of $6.5 million ARR contract.

I want to focus for a minute on one of our five solutions, our new Shopper Intelligence offering. It is exciting and differentiation solution and we are seeing some amazing early success with it.

Shopper Intelligence delivered powerful insight into e-commerce activity online marketplaces, enabling our customers to optimize their performance by revealing browsing and buying behaviors across online marketplaces.

Our insights help them to shape their online sales strategies by optimizing product portfolios, benchmarking the competition and improving sales and advertising performance. When we launch our digital marketing and digital research solution, it took us four years to get to our first seven figure deal.

With Shopper Intelligence, it took us just three months. And in Q3, we signed our first seven-figure ARR deal for the Shopper Intelligence. And here are a few examples of how our customers use Shopper Intelligence.

A large North American retailer reported that Shopper Intelligence helped them remain a product to better align with search behavior, resulting in a 20% increase in sales. In Q3, we completed a two-year deal of $600,000 with this customer. Also in Q3, Shopper Intelligence helped us win with the consolidative specialized in CPG.

The deal expands our business with this customer by 6x to $360,000 ARR contract. This customer use Similarweb in a sales process to target and teach new customers as well as advising its CPG's customer to optimize their partnership with a big box retailer.

The customer has also agreed to be a referral partner for us and is now recommending Similarweb to its own direct customer. One more solution that is growing nicely is our self-intelligent solution that helps B2B companies that sell to digital players like e-commerce, digital publisher and digital advertisers.

And for example, Postscript is a leading SMS platform that enables e-commerce to communicate and engage with customers for text messages marketing. Postscripts needed to improve and automate its account targeting and lead generation, which was labor and time intensive.

By implementing Similarweb self-intelligence solution, the company now has access to Similarweb e-commerce database in every region, automatically can segment and prioritize e-commerce lead and integrate them directly into sales force. The result was increase in target account pipeline of 27% within just the first month.

In Q3, we continue to make smart product investment to enhance our solution portfolio and make it stickier. Year over year, we doubled the size of our engineering team.

And in Q3, we delivered hundreds of improvement across our portfolio of digital intelligence solution that includes major functional advancements in our competitive insight, killer strategy and advertising intelligent feature and to name a few.

These improvements are driving more customer value and increasing our product stickiness, which reflecting in our consistently improving NRR number. It also reflects in the way our customers use our solution, incorporating them directly into their business workflow.

Indirect channels, referral partners, affiliate resellers and OEM are a new area expansion for our business. For example, in September, we announced that we had been selected by Google to power its new market finder's service. Market finders help small and medium-sized businesses targets and grow into new global markets.

The service leverages Similarweb data to analyze the company export potential, delivering an automated score along with customized and actionable recommendation to kick-start an international expansion plan.

Google has told us that it was the unique accuracy of our digital data and insights and in our data edge that filled their decision to integrate with us.

The win with Google reflects our growing relationship and also representative of the increased potential we see to build an OEM relationship, where partners include our data and insight in their own product offering. We also saw channel growth outside of OEM.

In fact, Q3 was the first quarter in which our reseller outside of Japan contributed more than $1 million in new business. Overall, we have a strong opportunity for our indirect business and we plan to increase our investment in this area.

Our data and insights are recognized by our customers, companies like Google and Postscripts while referred today as well as by the industry more broadly. In fact, last month, we were recognized by the hedge week as the best alternative data provider in the 2021 America's Award.

So over 10 years, we have been working on solving the incredibly challenging problem of measuring digital behavior. We invest significant resources in our data assets and acquisition and we build an amazing R&D team of top notch data scientists and engineers. Those investments and technology are very difficult to replicate.

We are proud of and confident in our data hedge and we have differentiated ourselves on the reliability and comprehensive of our data, but we are always looking to innovate and improve on our measurement and insight creation.

That's why today, as you may have seen, we announced the acquisition of MD Mobile, a San Francisco-based mobile insight provider and market leader in mobile audience analytics, consumer panels and mobile sampling. We've been partner of MD for over a year. So we know them very well and we have been very impressed with the quality and depth of the data.

MD measurement approach is backed by a large-scale meter panel of highly engaged optimism. This approach complements our existing measurement strategies and will enable us to enhance our mobile intelligence offering with more granular data and more powerful use case.

Beyond this, we believe that MD will position us to introduce exciting new market research capabilities in the future. We welcome the MD team to the Similarweb family and we are looking forward to working together with them to advance the stage of the art in the digital measurement.

In general, we continue to benefit from the strong circular plan for digitization in our markets. Digital has become a preferred way to interact, contract and deliver products and services; it is an important growth driver and strategic focus for most businesses today.

Digital markets are highly competitive and almost every player is looking for advantage. Our digital intelligence solutions give our customer and edge data and insight that enables them to understand their market better than their competitors take action faster and win.

The more the company shifts their business and become dependent on digital, the more mission-critical our offering becomes. Those trends are driving our strong growth and reinforcing our confidence in our opportunity, our strategy and the investment we are making in our future.

We have massive market opportunity, which we believe today is approximately $34 billion of solution target, the most essential revenue-driven operation of our customers, sales marketing, e-commerce and three suites and we sell across a wide variety of industries, ranging from financial services to retail, travel, CPGs to media and many more.

To summarize, we continue to execute successfully on our strategy. Since our IPO, we reached the $160 million ARR milestone nearly three months ahead of our plan and we have delivered two consistent quarters of strong revenue growth, both norths of 45%.

We have grown our indirect channels and we expand our data edge both organically and through acquisition in Q2 and Q3. We introduced a new product and features that expand our TAM and proving our ability to monetize those with significant new and upsell deals.

Our combination of strong revenue growth and outstanding gross margin put us among a small group of best-in-class fast companies in the world and we are very proud of this achievement. Finally, our execution and growth would not be possible without as a member of our global team, each of whom works hard to achieve those results.

We've built a top-class recruiting machine and drive and support our growth. We are currently signing new hires at the rate of 50 new employees per month. I'm very happy that earlier this week, DNB recognized us as one of the top 30 tech companies to work in England.

Overall, I'm pleased with the way our team continued to execute and our focus on helping our customers succeed and win in digital world. We're heading into Q4 with tremendous amount of energy and momentum, as you can see by our raising our guidance. And as I like to say, we are just getting started.

With that, I will turn it over to Jason, our CFO, to review the financials.

Jason?.

Thanks Or and good morning, everyone. I will now walk you through our third quarter financial results before moving on to our guidance for the fourth quarter and full year 2021. As Or mentioned, in Q3, we delivered record revenue of $35.6 million, reflecting 46% year-over-year growth.

This increase was driven both by an increase in our total number of customers, which rose by 27% to 3,242 as well as an increase of 16% in our average annual revenue per customer to $45,000. In our large customer segment, those who generate $100,000 or more in ARR, we increased the number of customers by 48% year over year to 245 customers.

Once again, most of these customers began initially as smaller customers and have expanded through our successful land and expand motion. Today, this customer segment represents 51% of our ARR while no single customer accounts for more than 5% of our ARR or revenue.

Dollar-based net retention rate, or NRR, was 110% overall and 122% for our $100,000 ARR customer segment as compared to 101% and 114%, respectively, last year. The success of our land and expand model continues to prove itself as NRR not only improved substantially year over year, but also sequentially as compared to Q2.

As you know, substantially all of our revenue is ARR, annual recurring revenue with minimum subscription terms of one year. We continue to increase the number of customers with multiyear subscription terms. As of the end of Q3, 1% of our ARR is generated from customers with multiyear subscription commitment compared to just 25% last year.

This trend, along with our high NRR, reaffirms the value that our customers are generating from Similarweb and gives us visibility into the health of our ARR.

In discussing the remainder of the income statement, please note that unless otherwise stated, all references to our expenses and operating results are on a non-GAAP basis and are reconciled to the GAAP results in the earnings press release that was issued just before this call.

Our gross profit totaled $27.9 million in the quarter, representing a gross margin of 78.3% versus 78% in Q3 2020. Operating expenses grew $41.7 million in Q3, up from $21.4 million in Q3 2020, largely reflecting the investment in personnel across the business from product and R&D, sales and marketing and our G&A team to support our business growth.

Employee headcount increased 69% to 864 employees as compared to 511 last year, which has fueled our top-line growth. The specific components of our operating expenses were research and development, $10.4 million versus $5.3 million in Q3 2020.

This increase was driven primarily by growth of employee headcount who are focused on our newer solutions such as Shopper Intelligence, sales intelligence and investor intelligence. We're already realizing revenue growth from these new solutions and believe that these investments will prove to be meaningful growth drivers in the future.

Sales and marketing, $23.2 million versus $12.9 million in Q3 2020, driven principally by increased investments in sales and account management headcount and marketing activities.

General and administrative was $8.1 million versus $3.2 million in Q3 2020, which includes $1.2 million of additional costs for the quarter that we now incur as a publicly traded company. As a result, our non-GAAP operating loss in the quarter totaled $13.9 million, better than our guidance, increasing from $2.4 million in Q3 2020.

Free cash flow for the quarter was negative $17.1 million compared to negative $2.3 million in Q3 2020, primarily as a result of the investment in employee hiring to drive our growth. These investments are already showing their value in the acceleration of ARR, customer growth and higher NRR. Turning to the balance sheet.

We ended Q3 with $159.1 million in cash and cash equivalents and no debt. We believe that our cash balance and our $75 million credit facility totaling $234 million of available funds, provides us with more than enough liquidity to execute on our growth plans.

Deferred revenue at the end of the quarter was $66.4 million compared to $43.6 million at the end of Q3 2020. Our remaining performance obligations, or RPO, totaled $114.1 million, up from $85.7 million as of December 31, 2020. We expect to recognize approximately 87% of total RPO and as revenue over the next 12 months.

We believe that the combination of deferred revenue and RPO are a good indicator of the health of our business. During Q3, we exceeded $150 million of ARR, continued to deliver strong and accelerating NRR and customer growth, both overall and from our $100,000 ARR customers.

These trends and the continued momentum and demand in our business fuel our confidence to again raise revenue guidance for the year. For Q4 2021, we expect total revenue in the range of $37.5 million to $37.9 million.

For the full year, we are raising guidance and expect total revenue in the range of $135 million to $135.4 million, representing 45% growth year over year at the midpoint of the range as compared to 32% growth last year.

Non-GAAP operating loss for the fourth quarter is expected to be in the range of $18.8 million to $19.2 million and for the full year between $52.1 million and $52.5 million. This includes approximately $3 million of incremental operating costs related to the acquisition of MD Mobile which we expect to close this month.

In summary, we have executed well since our IPO. Our business is tracking well across all of our major initiatives and our financial performance and guidance indicates that we will end the year on a high note and headed to 2022 with strong momentum. With that, Or and I are happy to take your questions.

Operator?.

[Operator Instructions] Our first question comes from Bhavan Suri..

Thank you and congratulations. It was a great quarter and certainly the NRR junction rate just was phenomenal. I guess let's focus on that acceleration you're seeing with NRR hitting high watermarks.

I guess both Or or Jason, I'd love to understand what drove the customer expansion? Is it -- are you seeing customer budgets expand? Was it an operational go-to-market change to highlight? Or is it the new products that are just being adopted as those products get rolled out? Help me understand sort of what drove that acceleration in the quarter that we've seen now for a couple of quarters..

Hi. Thank you. It's Or. I think there are many elements to contribute to the growth of the NRR we're seeing over the past quarter.

I can assume that majority of the impact comes from improvements that we're doing on the product plus introducing new products to the customers and driving upsell and cross-sell and the customer is buying more of our product portfolios offering..

Got you. And then Or, maybe a little more technical one here. So you mentioned that MD collects data through panels.

Can you talk a little bit just in more depth about the types of data that can be collected in solution? And then how does that data fit in with your existing data modeling process?.

Yes. So MD is really expert in the metered panel world for the mobile and has great data assets. So their data is a great enrichment for two areas. First, improving our mobile web to improve the estimation on the website to have better web and mobile web estimation. And then the second part is improving our app offering.

So they also have great app information like download and usage for that ecosystem. More than that, they are also a very big technology that can see more like ad exposure, etc., around the mobile ecosystem that is something that is very unique..

Our next question comes from Sterling Auty. .

Yes, thanks. Hi, guys.

So wondering, in terms of the increased usage part of the NRR specifically, what programs or things are you doing differently now than maybe a year ago to help motivate that increased usage into your customers?.

I don't think we did anything special in our go-to-market. I think it was mostly natural. It was not like anything aggressive campaign from our side.

I think just more improvement on our product, more listening to our customers, what they need to do the right improvement in the product and then introducing new exciting features and solutions is what's driving this growth..

And then if it's kind of just organic adoption on your customers' part, are you finding that -- the increased usage is spreading across different types of departments within those customers? And is it hitting different budgets than maybe just a marketing budget where you might land initially?.

I think the answer is yes. Yes, when we -- usually when we introduce new solution, it's basically a new department. If we take the CPGs as an example, they used -- and they usually lend on our research solution that comes sometimes from the data teams' budget or the marketing budget.

And when we come and introduce our new Shopper Intelligence solution, we're already talking different things like the e-commerce team, product buying teams. So it's a different budget, usually..

Our next question comes from Brent Thill..

Hi, guys. This is David on for Brent. Thanks for taking the question.

I guess the first one, if you could maybe discuss the MD acquisition and how it's going to position you guys in the mobile area and the app data spot area, especially against competition?.

So I think it's a great boost to our entire mobile and data infrastructure and we feel highly confident. We work with MD for more than a year as a partner. So we were very familiar with the offering and data quality and we were highly impressed.

We feel that not only by joining forces with them, we can introduce a much better data -- mobile data quality, we can also believe that we can accelerate their business and their operation.

There were a small start-up, 16, 17 employees who are doing a good job, but with Similarweb resource and infrastructure behind them, we can -- I think, we can really scale the operation and basically boost them and the technology and the metered panel and this will cause Similarweb serve a really strong mobile offering download..

Got it. Looking forward to you guys integrating that into the platform and getting -- being able to use it. And then maybe just one more on headcount. I think you guys said headcount was up 69% year over year.

Could you touch on what areas of the business we're seeing the majority of the headcount growth and maybe going forward, where are you guys focusing on hiring?.

I think allover in the company; we're seeing a great growth. So the growth in the past year was in old department. We know from our G&A to be ready for the IPO and a public company to double our R&D organization, that are still to support all the success we're seeing with their new solutions.

And of course, our go-to-market that continue to execute amazingly and we need to hire more people to drive the growth we're looking for..

Our next question comes from Jason Helfstein..

Hey, thanks. Hey, guys.

I guess to maybe talk a bit more about kind of the iOS road map, how the acquisition is fitting into that? And relative to what you were doing organically and then how you think about that relative to kind of what's going on in the market with like IDFA and how that's either positive or negative for you? And if you even want to talk about kind of the ultimate removal of cookies and how that ends up kind of playing out for you? And then secondly, just how do you think about just the tailwinds around video for the business? So meaning like, obviously, massive shift to video from a consumer standpoint.

How does that impact kind of your clients and how they spend on you and think about your products? Thanks..

Thank you, Jason. Good to hear from you. So I will try to answer all of the questions. I think regarding your first question around iOS and mobile strategy. As you can see, we are being serious here and doing our first acquisition and this will drive the entire mobile strategy, Android and iOS.

And we're going to go all in and will accelerate the roadmap. So a lot of new improvements will come in the next few months and you he will publish and I'm sure you would like them. And the second question about the IDSA and how it impacts our market and how we're seeing it.

So the ideas and all the trend of removing cookies on the web and removing the IDSA or the mobile is here basically to make the life of the network help to track users and we target them online. And this motion is not impacting our industry. We are doing more measurements and statistic market research about the Internet.

So we don't use cookies or IDSA when we're building our measurement. And what -- my thinking around that is what will happen once those things will remove and the advertisers will have much more -- it will be much more harder for them to measure themselves and understand ROI on marketing.

And what's called to the digital world, maybe to feel like more like in TV. TV has more extreme situation when they -- when the advertiser doesn't know anything. And in this ecosystem, they need to be 100% dependent on market research Company to drive marketing strategy.

So my belief is once all these trends of IDFA and the removal of cookie would go all in, our industry will have an amazing flourish and nice retail because then advertisers in the digital world, will need to be much more dependent on companies like us to give you a market data. And the last question is about video.

We do have a video intelligence offer in our platform that can enable our customers to see what is the video advertising strategy of their competitors. So we are touching it lightly, but we don't do video measurement. And so we do support the marketing acquisition team on the video strategy, but not getting into the video measurement ecosystem..

Our next question comes from Tyler Radke. .

Hey, good afternoon, Or and Jason. I wanted to ask you just around the strength that you saw in large deals. I think you talked about a $6.5 million ARR deal.

What are you learning from some of these larger contracts just from a closing and go-to-market perspective? And just how are you thinking about the large deal pipeline as you head into Q4?.

Tyler, this is Jason. So yes, we're really excited about those large deals. When we talk about our land and expand strategy, that's really what we do. We -- our goal is to land with the customer at the right price point for them. And over time, upsell and cross-sell them.

And that's what you saw in both last quarter and this quarter and you're seeing that in the increase of those $100,000 customers. We're seeing more and more of those -- sorry, I'm getting the feedback. We're seeing more and more of those in our pipeline.

In other words, the existing customers that we have who are expanding both in terms of usage in different departments and expanding in terms of more and more solutions that they're doing with us and we think that this trend is going to continue..

And I wanted to ask you about the OEM arrangement that we signed with Google. I think their Market Finder service. How is the revenue sharing going to work on that deal? And are you seeing any -- just any color you can provide on this kind of early traction and kind of what -- what's the size of potential end users using that service..

So it wasn't a revenue sharing model. Basically it's pay on consumption. So they're buying access to our data and then they can build product on that. They give this product for free. So they're done selling it. So -- and this is how it works. And we think that there's a lot of opportunity in this entire OEM ecosystem.

There is endless amount of companies and the building products that can gain great value by using Similarweb data in their workflow offering. So we're seeing a really great potential and we're now seeing Google building products they're using our data was very exciting moments for us..

Got it. So Google is licensing the technology from you and -- but the end users aren't paying.

Is that right?.

Yes. Market Finder is a free product like Google that helps advertisers to find more market opportunity to expand and going into those markets. So they give this product for free in order to drive more ad spend from the advertisers..

Our next question comes from Ryan MacWilliams..

Thanks for taking the question. I'm happy to hear about the strength across the business. So if I could just share some more on your Shopper Intelligence product. You mentioned already winning a large deal since the product launched.

How do you think about the addressable opportunity for this product? And how can the solution drive larger deal sizes?.

Yes. So first of all, my personal belief is that the TAM for the Shopper Intelligence is massive because this product is telling you what people are buying online. And if you compare to the more similar thing out there is the old traditional market risk which should tell you what people are buying off-line, the point of sales.

This is a huge market of, I don't know, double-digit billion dollars in the off-line world. And then there's more and more companies moving and depending more on selling online and more consumer spending online and making the production there, the access to this data become much more critical.

And so the budgets will move to this market that will be massive. And I think our offering and position there is very, very unique like you'll see there and the quality of the data is unparalleled. So I think the TAM is massive.

I don't want to say any specific number without bring the resources behind that, but you can see that the deals, the average deal in the Shopper Intelligence is six figures. And you can see after only three months of releasing this product out, we're able to close a seven figure deal. It's -- I think, it's insane.

As I said in the earnings call, it took us four years to -- in the resource solution and the marketing solution to get to a point that we can close a seven figure deal. And with this product, it was only after three months; just show the quality and the demand in the market for this very unique data and insights..

I appreciate that color. It seems like a logical upsell for some of your transactional customers. Jason, one for you. A lot of the questions have been on the net retention doing very well in the quarter.

Should we consider this a new level for net retention as we try to model your growth out? Or anything maybe to call out here year over year or what went into those metrics? Thanks..

Yes. I think so. I think that we've gotten to this new level and I think that's a trend going forward..

Our next question comes from Pat Walravens..

Hi. This is Joe Goodwin on for Pat. Thank you so much for taking our question.

Can you please talk about the advisory services that you offer to your larger customers? And just maybe how that's going and how large that is from an ARR perspective today?.

Yes, for sure. So advisory itself is something that we introduced this year, a very excited motion. Basically, it's an add-on usually on most of -- on top of the customers that buy in our software.

And basically, a lot of our customers when they start playing and building the market share, the dashboard with our data, a lot of the time, they want to get more deep and granular data on specific strategic questions they want to know about the digital world that you cannot carve out from the platform because we didn't release those specific data set out there.

So usually, they counted by the services and you basically build for them a custom data field or specific report.

And the interesting thing about the advisory services that we saw, I think, Jason, correct me if I'm wrong here, that 80% of the dealers are recurring because they love the data and the insight they're getting and they are subscribing into those insights.

And it's -- Jason is we talking about the size of the advisory itself?.

Yes. I'd say that -- I would say that it's a few million dollars. But like Or said, I think, it's even higher, substantially all of them are recurring revenue there by design, like our other contracts, all ARR base, but they provide that additional insight for things that have not yet been productized in the platform..

Yes. I would add on that, that something nice to know. The value services also are very strategic because usually when we work, we did our biggest account and those data and reports we produce go all the way to the C-level. So it's also increasing relationship with the C-level executive answering a lot of strategic questions.

So it's really been a huge success this year and we are expecting this offering to drive nice growth for next year..

Great. Thanks for that color. And then just on -- have you guys made any pricing changes to your solutions? You understood there are kind of different pricing strategies across use cases and solutions.

But is there any sort of pricing changes that you made that might be leading to some of us extended use of your products that you've seen?.

No, not something that I think of. We didn't do any drastic change maybe more crystallized, but I don't think we did any significant change in pricing..

At this time, there are no further questions. This concludes today's conference..