Good afternoon, and welcome to Zuora's First Quarter Fiscal 2023 Earnings Conference Call. [Operator Instructions] Thank you. With that, I would like to turn the call over to Luana Wolk, Head of Investor Relations for introductory remarks..

Thank you. Good afternoon, and welcome to Zuora's first quarter fiscal 2023 earnings conference call. On the call today, we have Tien Tzuo, Zuora's Founder and Chief Executive Officer; and Todd McElhatton, Zuora's Chief Financial Officer. Robbie Traube, our President and Chief Revenue Officer, will also be joining us for the Q&A session.

During today's call, we will make statements that represent our expectations and beliefs concerning future events that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date.

We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to several risks and uncertainties that could cause actual results to differ materially from expectations.

For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC. And finally, our discussion today includes non-GAAP financial measures.

You can find the details in today's press release, which includes a reconciliation table of selected GAAP to non-GAAP measures that reflect the adjustments made to both our current and prior year's results. Our results, press release and a replay of today's call can be found on Zuora's Investor Relations website at investor.zuora.com.

And with that, I'll turn the call over to you, Tien..

Thank you, Luana, and thank you, everyone for joining us today. Welcome to Zuora's first quarter fiscal 2023 earnings call. Q1 was another solid quarter and yet another proof point of our consistent execution. The trends that the subscription economy is built on transcend any near-term macro level uncertainty.

The biggest and best companies in the world continue to invest in creating and growing recurring revenue streams. Our technology continues to lead the market in the execution structure we put in place over 18 months ago continues to deliver consistent results. First, some highlights.

In Q1, we exceeded the guidance again for total revenue and subscription revenue, while closing the quarter at the high end of guidance for non-GAAP operating loss. In Q1, our dollar-based retention rate was 110%, up significantly from 103% year-over-year. Our 112% plus goal for this year remains intact.

In Q1, our ARR growth came in at 20%, up from 14% in Q1 of last year and subscription revenue growth came in at 21%, up from 14% in Q1 of last year. Finally, I'm proud to say that Zuora is now a carbon-neutral company, which we announced in our new ESG impact reports and we will talk more about later on the call.

As usual, let me share some observations from the quarter on our market, our product and our go-to-market execution. First, we continue to see a large opportunity in the subscription economy.

Companies continue to see that when the rest of the world faces volatility, the subscription economy can provide predictability such as the power of the recurring revenue model. And we are seeing this trend play out in our customer base. Some examples. Bloomberg, our customer grew its subscription revenue by 58% in 2021 compared to 2020.

GoPro, another one of our customers just announced on their latest earnings call earlier this month that their subscription and service revenues are up 73% year-over-year. And Zoom, our customer is now 5x bigger than they were before the pandemic.

Today, the company makes over $1 billion a quarter, while 2 years ago, the company was making roughly $200 million a quarter. In fact, we continue to see durable demand as more companies and industries embrace the recurring revenue model to navigate the current environment.

And our focus on the enterprise segment gives us additional stability in these times of uncertainty, allowing us to land new large customers across multiple industries. For example, this quarter, in publishing, we signed up the New York Times.

In manufacturing, we signed a multinational electronics manufacturer with more than $2.5 billion in revenue known for its audio and video equipment. In financial services, we signed one of the largest in technology forward U.S. banks with more than $30 billion in revenue.

These companies are turning to Zuora because our products consult, given the agility they need to adapt their services as markets change to manage the complete quote to cash and revenue recognition processes at scale, and to orchestrate the experiences their customers are having, which means new services.

In fact, companies are finding that we have the most complete monetization platform that stands, quoting, billing, collections and revenue recognition. And in Q1, this was a big differentiator. In Q1, we saw more than half of our new logos, buying more than one product, in a quarter buying the entire Zuora suite.

For example, BMC Software, a global leader in software solutions for the autonomous digital enterprise, turn to Zuora to be part of their quote to cash and revenue recognition transformation. Zuora will support the company's ability to deliver their SaaS offerings as the central source of all of BMC's order management and revenue recognition.

In addition, our multiproduct footprint continues to fuel our land and expand strategy. In Q1, we saw three expansion wins with upsell deals valued at $500,000 or more. Customers like Siemens, in Q1, expanded their work with Zuora to power new recurring revenue streams across additional divisions of their business.

All this has fueled with multiple quarters of ARR growth and strong dollar-based retention rate. Now within our portfolio of products, Zuora Revenue continues to shine. We are seeing Zuora Revenue deals grow even bigger with a continued strong pipeline.

For example, in Q1, a professional networking social media platform with more than 800 million members, they tap Zuora to better manage the entire revenue recognition process. We continue to see success in our ability to cross-sell Zuora Revenue into our installed base, such as with fast growing disruptors like Invoca and CarGurus.

They saw how critical it was to orchestrate their quote to cash and revenue recognition processes as we help these companies scale and billing becomes more complex, revenue recognition is a natural upsell opportunity.

Now we are pleased with the progress we've made on the product front, but we are equally proud of how our go-to-market strategy is also delivering. As we said, we believe the sweet spot in the market for us lies with large enterprises, and we see this playing out in our deals.

In Q1, we closed 6 deals with ACV of $500,000 or more; and two, with ACV of $1 million or more. Year-over-year, our average sales price for new logos has more than doubled. Now these enterprises are turning to Zuora because of our technology, but it's also because of our unique expertise. The depth of our customer base is truly remarkable.

And a few years ago, we created our subscribed institute to tap into the collective intelligence of this unique asset. We created the journey to usership blueprint built off of 15-plus years of experience to guide companies to the process from launching to leading in new digital services. And this is turning out to be a big, big differentiator for us.

It's also a key factor in attracting more system integration partners to our ecosystem, and this quarter was no exception. In Q1, we saw our partner strategy continue to deliver for our business. Our partners continue to influence over 70% of all new business transactions. In Q1, and our partner source pipeline continues to grow.

In Q1, we reached a big milestone in our partner certification efforts. We now have more than 450 globally certified consultants with our SI partners. This represents over 3x growth compared to this time last year. Our strong relationship with partners continues to gain momentum.

I'm truly excited to share that at Deloitte Digital's recent Alliance Summit, we learned that Zuora is now Deloitte Digital's fastest-growing emerging partner globally. Deloitte Digital is also dedicating resources to help even more enterprises transform their business by monetizing new digital services with us in this new Zuora factory.

Finally, on to a company initiative that's been very close to me personally, our work on ESG. From day one, we believed that a world subscribed could be a place where subscriptions and recurring revenue models can provide broader access to goods and services to increase inclusion and equity and prioritize sustainability.

These principles are deeply ingrained at Zuora. And earlier this month, we formalized and committed to Zuora's efforts with our first ESG impact report, which highlights the accomplishments that I am especially proud of. First, as I mentioned earlier on the call, as of fiscal year 2022, Zuora is officially carbon neutral.

And of course, we are committed to maintaining carbon neutrality going forward. We also released our diversity statistics as of the end of fiscal 2022, demonstrating the strength of our diverse and inclusive workforce.

In fact, 41% of Zuora employees, 60% of our executive team and over half of our Board of Directors are members of underrepresented groups. And we donated more than $1 million this past fiscal year to impact-driven organizations across the globe through our Zuora for good impact fund.

In closing, our strategy is working, and we continue to deliver according to our plan. There are certainly external factors beyond our control affecting the market, but we're focused on building a successful long-term company, delivering durable and profitable growth for years to come. [Indiscernible] continue to be excited about the future.

We thank you to our ZEOs, as always, for another successful quarter and for making our accomplishments possible. Now I will turn the call over to Todd to review our financials..

Thank you, Tien and everyone for joining us today. Q1 was a solid financial quarter across the board with key growth and profitability metrics meeting or exceeding our expectations entering the quarter. We are pleased with the results given the current macroeconomic environment and the headwinds we are seeing with exchange rates.

Let me start with top line results. Subscription revenue ended at $78.5 million, growing 21% year-over-year and exceeding the high end of our guide. This was driven by continued improvement in our go-to-market execution, and market demand, especially in North America. Professional services revenue was $14.7 million, a decline of 3% year-over-year.

This aligns with our strategy to drive more implementation work to our system integrator partners, which support our plan to improve our mix towards healthier total gross margin. I will provide more color on our progress with these system integrators later in the call.

Total revenue also ended above the high end of our guide at $93.2 million, up 16% year-over-year. On a constant currency basis, total revenue grew 17%. Non-GAAP subscription gross margin was 79%, a 90 basis points improvement over prior year.

Non-GAAP professional services gross margin was 1%, consistent with our plans to run services at or near breakeven. As Tien mentioned, we grew our partner certified consultants threefold this past year to over 450 consultants, which fueled contributions from partner source and influenced deals.

This has also contributed to our increased average selling price. We are very pleased with the traction we are seeing, especially in the enterprise space. As we grow our partnerships with system integrators, our non-GAAP blended gross margin saw an improvement of 330 basis points year-over-year, ending the quarter at 67%.

Non-GAAP operating loss was $0.2 million compared to an operating loss of $2.4 million in the prior year. This was driven by our continuous top line growth and closely managing our investments in the business. This resulted in a non-GAAP operating margin of negative 0.2%, an improvement of 280 basis points compared to Q1 of last year.

Our fully diluted share count at the end of the quarter was approximately 147 million shares using the treasury stock and if converted methods. Moving to some other key metrics for the quarter. In Q1, we maintained our dollar based retention rate of 110% despite foreign exchange headwinds. This was a strong improvement of 7 points year-over-year.

This illustrates the resiliency of recurring revenue streams, especially during times of uncertainty. At the end of Q1, customers that spend at or above $100,000 in ACV continue to represent 94% of our business, and we ended the quarter with 746 customers, a decrease of 1% sequentially.

More importantly, we are pleased with the growth of our average selling price. Our new logo average ASP more than doubled year-over-year. Our strong customer expansion is clear evidence of the success of our multiproduct strategy. Large enterprises continue to turn to Zuora for a complete monetization platform.

In Q1, we closed 6 deals with ACV of $500,000 or above, up 1% from last year. Two of these deals had ACV of greater than $1 million. The differentiation of our product portfolio is fueling larger and longer duration deals. This is evident in our total remaining performance obligations, which grew 29% year-over-year.

Turning to billing transaction volume. Our systems processed $21 billion of volume this quarter, representing 21% growth year-over-year. As we've noted before, process building transaction volume is not indicative of our revenue growth because our customers gain cost efficiencies as they scale.

This metric is helpful as it highlights the level of the scale we offer our customers, another key differentiator for our solutions in the enterprise space. And now looking at ARR and free cash flow. Starting this quarter, we will disclose the absolute dollar value of ARR.

ARR is defined as the annualized recurring value at the time of booking or contract modification for all active subscription contracts at the end of a reporting period. ARR excludes the value of nonrecurring revenue, such as professional services as well as contracts with new customers with a term of less than 1 year.

At the end of Q1, ARR was $326.3 million and grew 20% year-over-year. We believe this additional disclosure provides investors with further insights into our performance. Free cash flow was $3.7 million for the quarter. As a reminder, free cash flow may fluctuate on a quarterly basis due to the timing of cash collections.

We believe it's best to assess our cash flow performance over a longer term. We will continue to invest in the business to foster sustainable growth while driving towards a Rule of 40 by fiscal 2025. As a reminder, Rule of 40 is defined as the sum of our year-over-year subscription revenue growth plus free cash flow margin.

Total CapEx for the quarter was $3.3 million. Turning to the balance sheet. We ended the quarter with $453 million in cash and cash equivalents, an increase of $237 million over the prior quarter, mostly driven by the Silver Lake investment, which closed in Q1. Q1 was another solid quarter and demonstrates continued execution.

While we have not seen a meaningful impact to the business, given the current macro environment and the ongoing war in Europe, we will continue to be vigilant and monitor the situation. Our fiscal 2023 outlook assumes that these factors do not have a material negative impact on our business and are based on the prevailing foreign exchange rates.

Now let's turn to our financial outlook. You will note that the full year EPS and cash flow ranges have been revised to reflect the Silver Lake investment, which closed this quarter. The proceeds will impact interest expense, interest income and free cash flow. Each quarter, we will also have an adjustment to the fair value of the warrant liability.

This is a noncash item driven by changes in our stock price and market volatility. We will exclude this impact from our non-GAAP guidance due to potential wide variability. For the full year, we expect net income to decrease by $13.3 million. The go-forward quarterly impact will be approximately $3.8 million.

We also expect a reduction on free cash flow of approximately $8 million for the full year from the previous guide of $14 million to $17 million. Turning to our outlook for Q2. As a reminder, Q2 of last year included a onetime top line benefit, which creates a tougher compare this year.

For Q2, we currently expect total revenue of $96.5 million to $98.5 million; subscription revenue of $82 million to $83 million; non-GAAP operating loss of $2 million to $1 million; non-GAAP net loss per share of $0.06 to $0.05 per share, assuming weighted shares outstanding of approximately $130.2 million.

For the full year, we are adjusting our revenue mix outlook. As you know, we are targeting professional service revenue to be 15% of our overall revenue by fiscal 2025. As we continue to leverage our growing relationships with our system integrator partners, we are accelerating this during the current year.

We currently expect total revenue to remain at $402 million to $406 million. Subscription revenue to increase to $339 million to $341 million. Non-GAAP operating loss of $2 million to breakeven. Non-GAAP net loss per share of $0.19 to $0.15 per share, assuming a weighted average shares outstanding of approximately $131.8 million.

For the full year, we also expect dollar based retention rate of 112% or better, ARR growth of 21% or better. And as I mentioned earlier, we are adjusting our free cash flow outlook due to the impact of the Silver Lake investment. We now expect to generate free cash flow in the range of $6 million to $9 million.

To close off, Q1 was yet another proof point that our strategy is working. Our market-leading product portfolio allows customers to automate complete business processes from quote to cash to revenue recognition. Our system integrator partners continue to grow their Zuora practices.

This is a testament to the level of customer demand they're seeing in the market for our enterprise-grade solutions. With that, Tien, Robbie and I are happy to take your questions, and we will turn it over to the operator..

[Operator Instructions] Your first question comes from the line of Brent Thill with Jefferies. Your line is open..

Hey, Tien. Hey, Todd. Hey, Robbie. This is Luv Sodha on for Brent Thill. Thank you for taking my question and thank you for the incremental ARR numbers.

Maybe to start out with Tien, at a high level, could you talk a little bit about the resilience of the business model, if we do enter a potential downturn? And could you maybe talk a little bit about the volume-based component of your pricing?.

Yes, absolutely, Luv. I mean we saw -- you saw this 2 years ago in the first half of 2020, right, specifically in Q1. We snapped back and it's been 2 years, and I know people's memories are short, but that downturn had significantly greater uncertainty in turmoil.

And what we saw then is what we are seeing now is that subscription business models are resilient that when you have a recurring revenue model, you're not chasing every single dollar of revenue every single quarter that you start practically at the finish line, and you've got a product and service that's indispensable that customers -- that creates a level of customer loyalty.

Those are simply much better businesses to manage. When you look at us, we have this double layer of subscription, where we are [indiscernible] our subscription model, obviously, and our customers are a subscription model. And so it's hard to know what's going to happen in the year, right? Certainly, you see lots of forecasts out there.

But regardless of what it is, we like the business model that we have. We know that the macro level trends of shift to subscription economy continue to be strong. And we know the business model itself is fairly resilient. And so we are feeling pretty good about it.

With respect to pricing, right, we tweaked our pricing and you're constantly seeing is tweaking that. But I think that really has minimal effect on what's going on right now. We tend to sign longer-term contracts. We tend to grow when our customers grow. But I would say at a macro level, we feel good about where we are..

The other thing maybe I'd add to that, Tien, as far as the mix goes, as we've talked over the last several quarters, we are seeing a much greater impact from a standpoint of the new add on products that are coming out. And so volume is becoming a smaller part of our overall mix. And the same thing with Revenue as that product continues to grow.

So we're less and less dependent upon volume to drive growth. But I don't think that is a material impact for us for the year also, Luv..

Got it. That's helpful. That's helpful commentary. Maybe one for Todd, if on -- one of the interesting comments was that new logo ASPs have doubled. And so I guess as we think of the longer-term trajectory of the net dollar retention, could there be a leveling off at the 115% level? And how do you think of that over the longer term? Thank you..

I believe what we are seeing is we are selling into enterprises and there's more opportunities in there. We still feel really good about what our dollar based retention looks like. Like we've said this year, we expect it to grow to 112% or better. And we absolutely feel that by the time we are at fiscal 2025, that 112% to 115% is the right range.

So I think as we are moving upmarket in enterprise, we should just think about that those are bigger ponds for us to fish in. Those are companies that are used to spending more, and we are benefiting from that focus that we have on that rather than being focused on the low end..

Got it. Thank you..

Your next question is from the line of Joshua Reilly with Needham. Your line is open..

Hi, everyone. This is Michael Rackers. I’m on for Josh today. Thanks a lot for taking my question.

I guess as we look at international revenue, which is roughly 35% to 40% of your revenue, how should we think about the impact of the Ukraine situation to demand over the last 3 months? And then how are you factoring these macro challenges into your guidance?.

So I will go ahead and take that Michael. So first of all, like we've shared today, our guidance does take into account where current FX rates are. At this particular point, we have no revenue exposure in either Russia or Ukraine. We do have a few people who are supporting our business.

And thankfully they've been actually able to continue to support us. Some of them have relocated with their third-party provider to other countries. And so from that standpoint, we've been able to manage through any of the operational risk. But from a demand perspective, and maybe I will let Robbie talk about demand.

But at this time, we are certainly monitoring it, but our demand signals continue to be strong..

Thanks. I think on the guidance we think about going after enterprise recurring revenue business models are absolutely key and global. And we are seeing that continue in terms of how the enterprises are coming to us and the way that we are working across those..

Great. Thank you. And then just one more for me. How is sales force productivity trending this year thus far? And then how are your partners contributing versus, I guess, your expectations at the beginning of the year? Thank you..

I think -- let me answer that [indiscernible] which is on the partner side, I will start there. We are seeing our partners grow with over 450 certified consultants. They're working very closely with us in terms of being involved in the bookings that we are doing about a third of our bookings were actually with our partners as well.

So we are seeing great demand there, great partnering on that aspect. And from a competitive side of it, I think it's the same that we have spoken about before. We are seeing that there's need for both billing and revenue. We sit on one platform overall.

And what we are seeing is that the overall other players in this space are not having the ability to attach to the same way..

Great. Thank you..

Your next question comes from the line of Joe Vafi with Canaccord Genuity. Your line is open..

Thanks. This is [indiscernible] on behalf of Joe. It's great to see another quarter of solid execution. My first question is on the pipeline.

Maybe you can offer a little more color on how the macro environment is playing into the discussions you're having with your potential customers in technology, media, manufacturing and other emerging industries that you're targeting? And how would you characterize your pipeline today versus maybe 3 to 6 months ago?.

So when you look overall, we are monitoring what's going on in the world right now. But I would say we spoke about enterprise is absolutely key to us, right? And we still see people going across both billing [ph] and revenue applications sitting on one platform, which is something that we offer overall.

So from that perspective, the demand we are seeing keeps coming through and is as strong and as good in the place that we are seeing it now..

So far, we have not seen a decline in pipeline..

That's great to hear. Thank you. And any update on your capital allocation priorities? On the Q4 call, you mentioned that M&A will be a big focus for you. Any comment on the pipeline valuations or your criteria there will be helpful? Thanks..

This is Todd. So first of all, in this current environment, it's fantastic to have such a strong balance sheet and to be able to use that dry powder as we see fit. We have a very active program. We are talking to numerous different constituencies.

We’ve gotten a lot of feedback from our customers and our partners on places in that quote to cash space, where we can help our customers solve problems that others aren't. And so at this time, we don't have anything to announce. But as soon as we have any type of update, we'll be sure to share it with you..

Yes. And just to remind folks, right, we -- our numbers and our projections this year, our business plan this year did not call for any acquisitions. Obviously, we entered into a transaction with Silver Lake because we thought there might be opportunities in the marketplace in the latter half of the year.

Those thoughts are proving to be somewhat prescient. But like Todd said, this is something we are working on in progress and nothing to report at this moment..

Okay. Thanks for taking the questions..

Your next question is from the line of Andrew DeGasperi with Berenberg. Your line is open..

Thanks for taking my question. Maybe first, Tien, just as a follow-up to the last question.

I guess is the market conditions right now in terms of the valuations of some of the private companies out there factor and why you might potentially be delaying some M&A or maybe the focus on margins right now?.

I wouldn't say we're delaying M&A. I would say, if anything, in any market, it looks more promising to me currently after a Silver Lake announcement went through. We are starting to get calls from lots of bankers with things they want to sell. But we are going to be smart about it.

We certainly -- but the macro level picture is, this is a whole new business model. Companies need new set of technologies that really drive the success of this business model. We are the clear leader. The market is realizing that billing is not enough. You have to have billing and revenue recognition. That's becoming an important differentiation for us.

That being said, we also said we see an insatiable appetite for our customers for more and more of these new capabilities. We are going as fast as we can in terms of organic development of innovations, incredibly proud of the innovations that we are releasing, especially ever since street [ph] took over.

But we believe there will be things out there that we will see that can help us accelerate delivery capabilities to our customers, and we want to be in a position to take advantage of that. And I would say valuation shrinking actually make us more interested in picking up good technologies than otherwise..

Got it. And maybe in terms of the partnerships, I think first, can you give us maybe an update on the partnership with Microsoft in terms of where you are right now? And then secondly, I do believe you mentioned you were looking for other tech partnerships in the future. Just wondering what do you think looks appealing right now? ..

Overall our relationship with Microsoft carries on strongly, very focused on a product aspect there. And as more comes out through the year, we will absolutely let you know more there. Around some of the other strategic partnerships we are doing, we are looking holistically at those and again, more information as they come up..

Yes, partnerships don't happen overnight. We wanted to signal where we were going. Right now, the primary focus continues to be the system integration partners. You've seen the progress we've made on that front. That's been a 2-year journey.

And right now, we are also focused beyond the system good as Microsoft, and we will hopefully have more things to talk about later this year. But right now, part of the partnerships having the biggest impact continues to be the system integrators..

That's helpful. And then lastly for me, I just had a question on some of the other software companies I reported before you explicitly stated that they had a hard time hiring the -- hitting their, I guess, hiring targets.

I mean can you maybe mention why maybe for Zuora, it's a little different and why that’s -- that hasn't been an issue for you so far?.

I think we made a lot of course corrections last year, given what we are seeing in the hiring market. I think overall, we are doing well. The one part of the business where Todd talked about that we’ve seen hiring challenges, not just with us and our partners is on the implementation consultants.

And what we decided strategically to do is we’ve always had this target of 15% of our business should be system integration work or consulting professional services work, and we are going to accelerate on our goal to get to that point by really saying, look, it's going to be a lot easier to give this work to our partners and certify them and train them than necessarily to hire somebody in that group.

So we continue to hire than our group. We continue to grow, but we are pretty bullish about our ability to give more of that work to our implementation partners is something we are pretty excited about..

Great. Thank you..

[Operator Instructions] Your next question is from the line of Chad Bennett with Craig-Hallum. Your line is open..

Great. Thanks for fitting me in. So Todd, maybe a question just on dollar based net expansion and revenue retention. It's been stabilizing here at 110, I think, for three quarters. As we're kind of lopping off, I'd say, kind of more challenging net expansion quarters off of the trailing for.

Is there any more color just in kind of the puts and takes there and getting to that 112 for the year? Obviously, we -- and you're confident in that number, it sounds like we need to see some acceleration and obviously get above 112 at some point.

Kind of what's -- is there any color kind of under the hood there you can share?.

Yes, Chad, I think as you said, we are up year-over-year 7 points. And as you think about that, we made some tremendous strides last year. As we move forward this year, we feel very good about being at that 112 plus.

I think one of the things that makes me feel good about that is when I take a look at the product innovation that's coming out new products that we have, things that our customers are specifically asking us for. And if you take a look last year, some of the product innovation that came out, we did a nice job of being able to upsell that.

Again, revenue has been a nice driver. We think we've got a nice opportunity within the installed base to drive increased penetration there. So overall, we are up over where we were a year ago. We still believe we will finish this year at 112 plus.

And as you said, as we have new products coming out and customers adding on, we absolutely believe there is the opportunity for us to be at that 115 at the high end of the range by the time we get to 2025..

Got it. And then -- the -- you mentioned how much deal sizes are increasing, especially on new deals, but also obviously, cross-sells and upsells are getting larger also.

If we see that type of if that's a trend, I should say, and the ASP increase that you think is going to continue, it seems like volume of deals also is just doing better from a north of 100k deal standpoint and whatnot.

Should we expect just volumes to -- volume of deal or deal activity volume to change at all despite seeing pretty massive increases in ASPs?.

I think you got to be careful with that. Even in enterprise business you always have ebbs and flows. This quarter, we had a couple of especially large deals that came in and impacted us.

When I take a look at the pipeline next quarter, I think we've got a really good deal flow, not only with larger enterprise customers, but just total number of logos that we are looking at. So I think that's always going to ebb and flow by quarter..

Got it. All right. Thanks. Nice job on the quarter..

Thanks, Chad..

There are no further questions at this time. I will now turn the call back over to Tien Tzuo for closing remarks..

Well, thanks everybody -- excuse me, for the call. Just to recap, we had a great quarter. I feel really good about where we are going. We are in a good position. Our marketplace is growing. We continue to execute. Our products are differentiated.

The biggest and best companies in the world continue to come to us to help them guide them through is joining into the subscription economy. And I appreciate the call and talk to you next quarter. Thank you..

Ladies and gentlemen, thank you for your participation. This concludes today's conference call. You may now disconnect..