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Duck Creek (DCT)

Participants
Brian Denyeau IR, ICR, Inc.
Mike Jackowski Chief Executive Officer
Vinny Chippari Chief Financial Officer
Saket Kalia Barclays
Bhavan Suri William Blair
Rishi Jaluria RBC Capital Markets
Alex Zukin Wolfe Research
Jackson Ader JPMorgan
Michael Funk Bank of America Merrill Lynch
Parker Lane Stifel
Alexander Sklar Raymond James
Joe Goodwin JMP Securities
Call transcript
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Operator

Thank you for standing by, and welcome to the Duck Creek Technologies First Quarter Fiscal 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's conference call is being recorded. I will now turn the conference to your host, Mr. ICR. from Denyeau Brian

Brian Denyeau

welcome quarter Creek’s which of November and for ended conference the XX. first fiscal to afternoon, earnings Duck call on Good year XXXX,

this Chief is impact statements call any to risks, call Chief call results, the following Creek’s found A our Jackowski, of financial COVID-XX me our in on the uncertainties and of upon replay is Relations based on in updated Officer. and call. on today are not disclosure can subject On Duck future. assumptions section conclusion and Chippari, with are forward-looking may Financial website. These Creek’s results Today’s today of Executive statements complete Duck release and will current our representing regarding our matters. as the operations, Investor as not Officer; of products, our date. Vinny customer Mike be be a demand, management’s and business and statements be available may include other the issued is available of today Statements recorded Therefore, on subsequent the which should relied of be these being the our expectations made views press

make on may should today. events as actual may predictions You results rely forward-looking management of not and statements forward-looking differ as statements future that events from any

differences appear Commission. reports with XX-K press Creek regarding uncertainties Form filed and that our risks, cause and in the Securities Exchange Duck information such and factors the by Additional subsequent Creek’s the other release other and latest Duck could

the and expenses, amortization turn effects related that, tax the these liability, of in compensation earn-out investors. our non-GAAP GAAP measures with let adjustments. We primary press non-GAAP differences value over me measures to of is call will A also information financial certain to With in to to to of release stock-based being contingent the Mike. provided provide fair of change reconciliation refer additional intangibles,

Mike Jackowski

and good Brian, you, afternoon, Thank everyone.

Let of a Year. you wishing all happy your by New and me start families

year, We and strong are off our industry. the that report to choice first to insurance Creek platform continued on that success cloud pleased Duck I’m P&C the performance for reflects quarter to a great as a of start delivered

our our with greater base customers, logos which of pleased new exceeds and are drive to adaption ability add install We now XX insurers. from OnDemand

of the me Let XX% We revenue for reported quick year-over-year. revenue, our a million, our up revenue underpinned subscription our SaaS is XX% results first was of total start million, of year-over-year. And financial which with $XX.X overview up this $XX.X by from derived quarter.

million, in revenue annual or XX% quarter was we Our are And over ARR prior the also $XXX.X recurring growth of EBITDA profitable $X.X million. adjusted which the with resulted in year.

we customers we and expanded quarter, us. a This customers usage reflects OnDemand that Duck in the either of SaaS land signed selling adapted Creek or expand activity SaaS the across are of more who and with is deals healthy new our than During existing model SaaS making and XX powerful new continued their our investments solutions solutions. from mix

and is Creek Insurers quarter can to experience, quickly conditions. provide value that thrive scalability, market insurers OnDemand these like can cloud that latest just overall rapidly before. evolving the systems in businesses. markets in to embracing the customer core dynamic them need our that so enable operating and are superior Duck and they enhance that more than the time more platform success Our ever They are flexibility innovate indication are their in a true are that to

leading highlights OnDemand deploying provide Creek continuing insights P&C competitive Creek signed new North exciting technical of in lines our first are to as Creek as rating, In solutions, SECURA, quarter, power business. reasons. insurer advantage insurers of Duck a OnDemand platforms. and anywhere customers. with demonstrate which we our and selected several Duck managed we ultimately the SECURA where its generation a well after lengthy that have with We XX Duck several all will We claims success the our who the Duck an were evaluation chosen SECURA states. and American Creek rigorous for billing, to selected sizes, specialty next value evaluated operations deal OnDemand, policy, of SECURA be integrations to competing with several

And code to the platform API value low our The configuration the open increase first their overall most best-positioned streamline their notably, was time recognize and that and operations. platform. Duck of strength architecture. was Creek SECURA our to

ability insurer SECURA our partners how configures our second expands and to of the was markets. products team leverage tech which partner now ecosystem, to improve new its access SECURA's The XX into platform to includes

excited their Finally, on relationship as with This our customers partnering as strive SECURA noted, true Duck exactly vendor. type not of we view Creek SECURA to build a digital the be we're CIO partner, a is with our each just and transformation. of to

our on made also progress wins presence, our new We which our and to build customer efforts ecosystem. expanding multiple out includes international significant

the we an signed outside the deals of quarter, the the While the opportunity early, in validation very of two had success States. we United important still is with international first In quarter customers.

of motor the that innovative a their Adiona its that their insurance Creek are in ecosystem. innovation OnDemand scale XXXX, end-to-end help across policy, partner Creek product seeing be us great with count new provider We insurtech cloud important in and on signed growth experience we customers. a start-up usage-based UK-based it a needed an how can to digital agreement provide and with offering could Duck the on launching recently to unique Duck on true tremendous powering this role for will their compelling insurance deliver a Adiona, an play billing deploy example ambitions to First, a mission believe is claims.

Australian and enterprises. early have success insurance pleased we for an important with innovative we redefining in packages South simplified benefit in streamlined we with internationally. who We and compensation recently and the examples Insurance, on Argyle announced including the are Wales, early newly for of making claims Adiona Australia's the progress is localized New is which market, workers’ state. and established largest medium product number carrier, are that we small of a investments signed positive Australia focused been a Australia, why a also are win having commercial Argyle small for is how Overall, calculator

Even as local outside important these wins deal brand impact the the Creek And for we of opportunity the are we establishing States. long-term incredibly the excited continue like customers markets. the to about United with in are of Duck referenceable and pandemic,

international fiscal XXXX last on we our will in markets. that global with deliver. we our capabilities our of on call, in to particular carriers, expand our focus continue multiple enhance value can out a we're mentioned end, I presence, in As earnings partnerships specific our announce partnerships the important large that international To pleased part to an that invest capabilities building

with provide recently integrate their use market. For consumer agreement Experian will experience. an user with insurance better data iCache Creek example, the that Duck UK and integrations their This signed dataset insurance into operational improve to we that to can pre-built efficiency will directly serve OnDemand they

with Spanish products than the faster organization the Spanish international Spanish This association agreement also IT We a to and services and great the of market. deploy to of facilitate ever efforts. test alliances to type UNESPA, TIREA collaborative Duck allow new for the we examples offering go-to-market to our agreement insurers operating and Experian as of we The local are market before. the in continue design, value-added signed with and in TIREA, will relationships solutions an charge into integration companies insurers; looking insurance are of recently build Creek develop

In four others. focus with Specialty, Mutual, product to commercial Partners they notable several in customer And their customers, innovative in had we Creek now to American quarter these property program wins, policy highly well, on XX in several commercial of success, addition for the their Distinguished known the finally, states also X cyber, package the we American a their among expanded our XX in Duck on project. and Tier their Builders they Great new comprised states. including liability, for specialty to offering who approximately brokers insurance brought as OnDemand Partners Great inception go of Insurance, XXX in professional Insurance, lines, from to a solution coverage to including and the months. deploy Insurance, five and new able engagement market products, existing Core under live and respected deployments content, AXIS key are deployed days crime where And insurer, home-based businesses Distinguished all with

decisions enhance our continue customers We be our make ended basis, to more and intelligence. efficient, on and through helping agile, invest also ongoing data leading an solutions continue to smarter SaaS

to platform past this our highlights user our enhanced Here are incorporate capabilities. experience billing updates just few policy of two a quarter. and We new product

customize for various native insurers reuse devices. mobile channels designs consistent form factors, a First, Creek and provides across more This experience and across users page allow multiple presentation. to end Duck

we launched speed a operations updates data Second, overall ways, series a important page or screen. attention in visualization, that to user's visual will help allowing Duck and areas a presents integration, In Claims, added drawn key new which of be deployments. to informational systems and Creek data improve we of

series such first, tax include: to of VAT, localized geographies a time platform, zone that on and support enhancements, logic. improves and multiple examples a in-depth managing international Some enhancements as configuration single embedded

and quickly existing RESTful data and XXX of claim expands enables efficiently solution, service, into new systems our our conversion a OnDemand improves migration which platform. Duck APIs. added open our our legacy quality. third, which migrate We carriers data environment, claims Second, And to dramatically that multiple our and timeframes productized reduces the APIs enhanced openness Creek from over to solution

operations Our both processes. also ways with integrate and DevOps customized to the provide programmatic new architecture can carriers APIs development

offering, Duck anonymous which that channel, the secure to without consumer Duck Finally, Creek and infrastructure. a policyholders or applications deploy providing core OnDemand redundant we to to allows tools also need consumer in carriers functionality to access solutions expose infrastructure Creek's the launched shoppers extends

front the ahead on we in As of year, the we executing look the focused incredible opportunity remainder us. are to of on

in existing with both new to see across continue significant our We pipeline customers tiers. all and growth

Tier are on important some mentioned last we we As quarter, focused accounts. X particularly

some recent quarters. We success have in seen great

transformation We and very encouraged by in having carriers the strategic digital making are with are long-term are roadmaps. these we developing they the progress conversations

day insurers we future across the significant how a the are dimensions, just and start Creek insurance multiple terrific providing Before industry improve to in interest cloud, of reiterate I fiscal we OnDemand Customer performance Vinny, to Duck can we their moving XXXX, P&C the as call the while in Creek. in grow operational appreciate over is the financial We're about stages benefits. to to are fully Creek and Duck with pleased embark for early industry they a incredibly I the the their that Duck optimistic look to want continues turn to first the they on thanking upon numbers. as be to finish to opportunity. let the capitalize position insurers insurance for Vinny, Creek each our to you and me Duck primary I'd for to continue to of over cloud by customers over incredible as every Vinny all walk employees, beneficiary, fully and the the position technology to do With strategies. partners to the to our solutions and work turn that, this modernize through incredible call you. like

Vinny Chippari

XX% Thanks, Total was prior review Mike. first from period. fiscal was XX% subscription revenue of revenue. of maintenance year guidance and first $XX.X revenue, results quarter provide year-over-year. our XXXX. our solely products Revenues up in I up subscriptions software our Within of which second year detail SaaS from fiscal $X.X XX% total QX, revenue, comprised quarter quarter million revenue. In and XX% of million, the the revenue, on-premise total $X.X the licenses and for for will of software XXXX is full of million, represented and in our or total subscriptions $XX.X Today million, XX% of

these of the percentage driven XX% expect implementation continued was as up revenue. subscription we to strong in revenue SaaS growth recurring subscription year. period year-over-year, our the XX services given $XXX.X $XX.X as items XX% last the and which a recognized month ARR, in strong by continue calculate annualizing November We high rates. million, up was prior of from the by line Services XXXX, revenue, revenue decreasing million for of demand utilization

result, time and by be and of upselling as XXXX, SaaS that As of the was a our reminder, are period impacted selling retention continued November This in which contracts SaaS is generating revenue month a customer base. a ARR approximately strong snapshot last subscription net timing. XXX%. can reflects of our cross dollar XX during another is success

for to rates, reminder, new products our products customers, existing high of already our SaaS combination As net driven a and by growth retention is operating a platform. DWP growth of sales of retention on

rate range to We our continue the dollar a for believe SaaS to business. long-term retention XXX% target a good is XXX% in net that

let's to non-GAAP we earnings in are in statement release. reconciliation and Now a These non-GAAP otherwise metrics review more provided our financials noted, income the unless detail. press of GAAP

our First, for share income outstanding had on million. we the and average the weighted profit per basic income of $XXX,XXX, a based GAAP quarter million. $X.X million shares We of had gross basis, on net of $X.XX from $XX.X was in or XXX.X operations quarter

our to XXXX. in Turning was the or Subscription XX.X%. the results, quarter XX.X% fiscal million non-GAAP to XX.X% in first the $XX.X margin gross compared margin was quarter quarter in of

deployments. contracts, timing the revenue variation As timing we've quarterly noted and various begins of of at new be there due to can expenses each for quarter, of when certain recognition stages

expected favorable into to were indicated benefiting fiscal gross and mid-XXs As we the margins XXXX. in XXXX timing in back fiscal move previously, from

in While target running XXXX improvement our increased our in robust quarter quarters service remaining growth high do driven to utilization rates. of on and premium show gross by notably was we well experienced of above demand have subscription and platform, hosting expect written of the XX% of support margins. strong we significant Professional margin in the costs range fiscal

wanted, Our bringing to and throughout in was more levels. services down we QX margin committed XXXX than higher fiscal we're sustainable them to

gross them several year. has this in through we high revenue longer down is QX to historically Our to been below and that continue terms fiscal XXs. year expect Seasonally, goal the fiscal trend both term bring the into points and QX margin and

the below Turning based expenses. on percentage XXXX fiscal growth or QX of XX% bit costs a year-over-year $XX.X million R&D to as of of to revenue. revenue, XX% R&D targeted operating were expense down compared was levels of new a the XXXX full through percent remain fiscal increase R&D of of expect but still to slightly fiscal than the of hires. for remainder revenue year, timing We slightly spend fiscal currently year. lower as the a

organization of prior revenue, balance in Expense revenue. Sales with with platform. of $XX.X benefits of scale and growth R&D our prior as the our percent to We year were XX% the year a from expenses SaaS marketing continue products or increasing investments and XX% year period. and consistent million, the continue of in expense or U.S revenue international in to of costs revenue, continued down go-to-market reflects our levels while resourcing below run impacts. expansion was G&A due COVID-XX both XX% markets, to travel normal million, related from of $XX.X prior the

As share which is with of the our declining of EBITDA the our outstanding. $X.XX the expenses for expectations. was I lower based the most average we approximately XX% an levels revenue to subscription and $X.X first diluted revenue percent in adjusted quarter better-than-expected for prior on of G&A per and ahead in due from profitable a which This basis. high area noted X% leverageable on indication fully is referenced. up previously, million consecutive was income revenue Non-GAAP margin as our cost just million, weighted of profitability, our our line was period. quarter quarter, Adjusted EBITDA guidance for represents growth believe Adjusted EBITDA year the shares XXth is net XXX.X of to important a generate ability quarter was

in the to the the in cash Turning to with negative quarter free. prior and flow million debt period. and was ended flow, Free and $XX.X negative sheet we the $XXX remain cash short-term $XX.X we balance million equivalents cash million investments quarter compared in cash, year

now working the for the finish with quarter fiscal flow quarter. of As guidance due capital. reminder, the beginning year to first with typically in a second low our the is to point like I'd timing cash

gross million, of million, $XX of million to million $XX.X XX% at We revenue $XX subscription are projected adjusted to to XX%. expect revenue margins $XX.X total

income of We $X.XX diluted our $XXX,XXX $X.X expect to adjusted and from to EBITDA non-GAAP million million, to million, $X.X expected $X.X net is per $X.XX share. range to fully or

to gross For XX% are $XXX.X of guidance adjusted subscription total full our we XX%. $XXX margins million million, are at fiscal revenue increasing to $XXX year million, million to projected XXXX, of to revenue $XXX.X

running are to business opportunity customers in embracing business increasing we'd to with We first call to to Q&A. a $X.XX We from $XX our that, up, come. of $X.XX to years wrap from on OnDemand. Operator? or $XX in million, ability expected million and got growth existing up And of start who the performance the fully diluted $XX net million prospects the we their range and our better levels activity to We're demand seeing quarter. per generating million share. non-GAAP To profitability is Duck from like for continue off to expect Creek open to new confident in strong remain strong EBITDA adjusted and to the $XX income strong

Operator

you. Saket comes Instructions] Kalia, Barclays. [Operator from Our Thank first question

Your line is open.

Saket Kalia

Mike. Happy Year, taking Okay, Vinny. here. and great. Hey, thanks New questions Hey, my for

Mike Jackowski

Year. New Happy

Saket Kalia

you. Hey, Mike, with just maybe starting

quarter? maybe prepared this some with belt investor trended you quarter competitors bit deeper, go of last qualitatively questions a SaaS opportunities. if whether maybe just other You think you're through about were But how we with the on How can in another touched seeing? number win competitive I of maybe remarks. those about little in the things more talk just here? And think -- getting can quarter's have drove result, opportunities the your you rates one maybe level under do on sort

Mike Jackowski

a thanks, Saket. I healthy in the number Yes, would of have that say we pipeline. opportunities

to see through rates, to quarter-over-quarter, not say any win terms fact, we to them in material quarters, specifically changed our so in strengthen see don't In about we're has our pipeline rates, two we're going going that. I'll the past And of but continues pleased win talk that manner.

start in we're with our I competitive at. think the we up And in fiscal think I stated we're really very positioning, prepared remarks. I of where as we're pleased the year, well terms So, set as

of really I quarter on intensive think we is feedback our exciting example And the the last we've had the platform superior In landscape. really platform, against at outcome, opportunities in we're our solution. our as with vetted did we really evaluation at pleased were And with those across wins, and this vendors quarter, SECURA our opening several and know fact, They differentiator a feedback, one very remarks. competition. win very that very, that got and And great SaaS well code I low our that. looked process said many positive

Saket Kalia

of my little ton year about a talk a we pipeline sounds makes for just the was and Clearly, know margin if you of anything the quarters, That in in here wondering coming trending to us pace the the talk about you it. I kind ARR bit here could Got of it. sense. revenue how of sort about gross for just -- of you maybe of about Vinny, you. I the but Got just could good of follow-up in but seasonality course. QX. think ARR implementations. the give is specifically, there qualitatively, of QX don't in that rest through or spoke terms

Vinny Chippari

Saket. sure. Hey, Yes,

is quarter of second our growth, So, I'd 'XX, was our lowest. in where an fiscal the say in growth ARR kind trend the had thing the quarter, and unusual was we largest third sequential

year the last was think I aberration.

year, not typical. to ARR again to generally If ARR be though the generally quarter, of second year, the our even it say, tied fiscal strong we back growth quarter. And expect strongest this into that’s quarter it was more is of a QX during that most really you doesn't bookings 'XX, seasonality. -- is to the quarter, bookings our a is lowest is and make the not look QX sequential typical reason and more that's quarter

higher. could to the a see just see be bit qualitatively, like ago think return I ARR where years and QX of QX a And trends, is growth will more expect of sequentially. won't more So, normalized quarter two our you'll trend strongest I bit to think a you lower where QX kind is

Saket Kalia

Got it. Super helpful.

Vinny Chippari

year. quarter, more in growth But, would really we to ARR the come translate into which off QX Saket, to that's half bookings expect the strong be of second going

Saket Kalia

Very helpful, Thanks very Yes, absolutely. much. guys.

Vinny Chippari

Thanks.

Operator

Thank you.

comes Blair. Bhavan Suri of next question Our from William

Your open. line is

Bhavan Suri

Year congrats. New going I’m and echo Happy to gents. Hey,

CyberCube seeing on So talk Mike, there. to carriers we I I cyber, out this seeing critical. solid partnering, of more touch guys trying market of and cybersecurity to think And figure others How of how is to bit. to When sense here like some in on evolve? everything are terms they guess, little do -- price focus want these coming kind native love cloud about and -- it, you quarter some are there. ransomware and of their of you as up a that, presently emerging that we it, how you're do how kind players market of cyber the the I'd get becomes to especially to like sort acquiring?

Mike Jackowski

growing lines obviously, a one well, Yes, Bhavan. after because in they out to price we product carriers how and There's industry. question, the do protection. of is it, there good need reason. see industry carriers varies Thanks, the the is how lot Yes. go you're for greatly that cyber asking provide in cyber of faster the What though,

at look in what's happen, customer bring a or just their the topology solutions -- at the others inside of look landscape. overall at to look that and Some going the

technology they're vast variety in So, a cyber. of to go evaluate variety bringing a

not to see a strategy that first, cyber our standalone coverage, lot is a an you add-on date is, do product. of So,

coverages the add-on out So, right ISO support box. we do of the

So, helps. I that think

to cyber. cyber that's continue or looking well kind our actively in and view attach integrate of technology, to that out with can do with then solutions insurtech, a to adapt to way because to make of can want to bring we've really with partner sure cyber perform box always going they're those some approach terms date. secondly, all going to some that isn't of other carriers well-positioned And fits And for there we that them of we're been we to acquire we We're new of been partnering one leading and So, for we're the insurance. the products. mentioned, that make size companies bear you've sure and very to sure that to to to make go we

Bhavan Suri

did you hire salespeople, see playing have or Is and And in have R&D both it's headcount, you're of as Gotcha. your then process But able to at doing your partners, then which example, shortage like of leader sort as this industry. hire else. more near-term think of what we you of for one sort strategically, this then even everything labor to implementations, requires customers implementations? as how you right you in any then low I'd you thinking more Or that South for headcount, one Gotcha. not about every always you this code labor think environment to there and what have out and people But And the love There's in R&D you guys. shortage, of then despite about the of for I means should still because implementations? wonder your enough services -- New ultra-hot innovation. was hire a shortage this see kind terms Wales? customers sales group, between margins. Accenture, slower because headcount get now, how and for risk which changes running and you're gross guys being whomever, for a say, the potentially you of environment at, and your about a you, as can But and potentially you sense is firm. to

Mike Jackowski

in Duck the is in industry, I with invested technology dimensions to and well. at. favorable retention that are think resignation I pleased rates great paying our heavily the with employee attention in others attrition, the everyone's company. in say handled having I we've We've as and industry quite obviously, our across more culture, where And that and I I'm going Creek very broadly lot I'm of, engagement, think that can will resulted to higher pandemic seeing a many in technology us the say it. say Yes,

So, us. helping. for watch point, it's But your I to a still think that's item

quite As we even our and in growing calls, about short of think something We're getting but have prior on we're well. bit, earnings headcount on are some with keeping and those falling bit people I of I a hiring Vinny spoke expectations. boarded doing a is little up

alarming we're working say well partners, an on now, a not at item seeing it. would watch but impact right us. our for nothing it's we're Now, And a level. it's I And with material

out leading You is can project our one Hexaware a work on this around, We've through now with that's amount or try think way that added us I the some continuing given as XX. as an quarter, to a shift think have I impact of systems an different to And you ecosystem integrators that we new to we're resources up and work have with addressing capacity well. partners. we're quite any bit are there. But enormous really helping with

Bhavan Suri

That's super taking helpful. appreciate the color. Really Thanks for my guys. questions,

Operator

Thank you.

question Rishi comes from of Jaluria RBC. next Our

Your line is open.

Rishi Jaluria

and your the rewind in for kind gave of months, back, wanted questions. you're Hey, Good offset Maybe I guys. could you we if appreciate pinpoint a customers. the it improving Anything helpful. you taking and be outlook numbers. it. with better the that'd the else quarter Thanks it better on upside to X us would into on what some execution? Was And have then so Was clearly a that you of much of environment? maybe all What ahead see seeing attribute the commentary But my came I to drill tape to? the outlook that I follow-up. better first.

Mike Jackowski

I Rishi, with Vinny and wants coming that with say to this that of expectations what stated add. think I'll the and quarter quarter. I don’t out lined we has I'll just our start know up

to well Tier activity up Vinny, We And want we some add. deals very talked for year. nice I the opportunities many Xs We I the in you with pipeline. don't through great continue sets about. see if close to and the us quarters know some think it

Vinny Chippari

we beat out indicated little Yes, the one be like of I coming bit. we we'd out by thing point subscriptions, had I a where is think I'd

where feeling stand. sales been We are running high. utilization revenue outperformance actually services where charts good are But the rates is larger demand QX, was and the we our in the and really pipeline about the in really fairly off

from we're QX, board bit side on think kind QX. noticeably. do But I just margin a in we're little services across momentum off bit a now the with So, in back of -- the pleased the perspective probably a

Rishi Jaluria

That's some helpful. one-time-ish as SaaS there Got it. of year. you, are obviously, maybe gross Yes. margin think line, benefits And Vinny last we for the then QX about to QX in

gross should that to thinking Can it's us and glide out about IPO you model some how long-term margins? remind puts of XX% to to forward? takes the XX% laid why of going the then And SaaS at get Just dropped? of path be line of we that maybe you

Vinny Chippari

dynamic in is higher from Yes, partly by how sure. platform hosting where we on we're than DWP onto costs And into sustainable and we're also the back What, the high last bit in product weren't platform. the the some did the the are as just as of on headcount, but timing of you performing. and hosting We costs Azure mid-XXs. and we we're XXs infrastructure costs was expected, pointed did come a And putting benefiting knew actually a going by came we year, infrastructure lot fueled the that little just out, we system. we

be of So, I be line. subscription that, of we the climb bottom think gradual. think do is will QX, the annual But kind of the going back to out, kind margin for

year of increments of few progress the changed has think through mid-XXs. So, And into it's see And what should probably long-term low small you'll it's of number up years in the I the to when balance course think years. few next target the fiscal XXs the fiscal full think over progression in come XXs. is, achievable over I terms into year. of the this The low the we'll the still next see then or don't the in we

Rishi Jaluria

so much, guys. you Thank Wonderful.

Mike Jackowski

Sure.

Operator

you. Thank

Research. Zukin Alex next from question Wolfe comes of Our

Your open. is line

Alex Zukin

complex Hey, we talked really at out another for kind for net year of sales guys for sense kind removed, because the question. the in put customers now quarter, quarter, love Coming those selling value just with hopefully, I that are many just your a sense you. a particularly sales of to the maybe give likely guys. extended this even than And being globally, what selling to from deals you're of strong Thanks for Mike, get you first up amounts firms taking negotiating now rate ask, definitely as we of retention the value, that last wanted one greater of we're us doing little about kinds point. for this are where cycles cycles, deals, kinds the would longer 'XX. cycle of just environment, given for

Mike Jackowski

establish Alex. But basis. the customer some in a back out. the the thanks, move comments sales some dollar stretching say you activity Tier anytime Tier their Yes, our into X selling cloud. a to of our But I really obviously, us. And quarter's would made But at referred cycles, say long-term retention customers. really X, Tier of comment to strategic and obviously, we numbers on back also a to a base is want that a always with of can strong for to Tier I business X a or with looking we're sign we with product new activity and we that's want great us. up relationship just then favorable last it net to by the They're that And for prospects that we carriers excited maybe we're new line existing continue having see line yielding when about conversations and these X.

And the are and some occur the second of expect shape to year. of half opportunities in do these we taking some

the And have and that's it's think unfolding, I think now. So, we we quarter, as that right last good. results we're pleased indicated I with

Alex Zukin

question. the back to to And go Perfect. then I Vinny, want first

some what I about these think for both of ARR and bookings, should for linearity quarters. modeling ask, of color the the you if we quarter. even to new next think great how two gave in quarter from think the last I maybe wanted you to you of terms net about the next shape around talked

mind As of seasonality closer a to kind percentage? percentage be something last should there the we and those of low sales half of about the to X cycles, full the QX as [ph] years think our the else that given models year, around the is and is second Or we should XXs there we kind linearity in sync the just that concentration, keep that something with Mike kind of described for year? what

Vinny Chippari

don't Well, always percentages hard to do. to state I that's specific think want I

ARR -- a hold this this than QX. norm a terms but our right perspective, is to bookings again number year. from booking probably being typical But expectation of historical and makes would lowest up not perspective to year, disclose percent from our the what will don't side. historical perspective. from I we percentage when first, for bookings. QX the return be of on higher is, it to QX we're of and And not think the the likely of do to on exact going basis, QX normal think that percent it to I think, now, I a more in a be it that noticeably want our typically, is QX I year And be

I outlook first And kind much other second that individual think all hasn't also. year half think that we to the towards I year terms pacing in normal of that's than blend, deals. half, probably So, think the of again, varied

Alex Zukin

Okay, perfect. Thank you, guys.

Vinny Chippari

Yes.

Operator

Thank you.

from Our Ader JPMorgan. of next question comes Jackson

is line Your open.

Jackson Ader

in There Vinny, just of quarter confidence Tier What that, X new conservative, guess, here on a that. more terms Tier second a the X first of follow-up the about in lot of Great. discussion in Actually, activity. being bit for was level Thanks. year? a the our the activity, that half is outlook in that closing little I of

Mike Jackowski

Jackson. hey, Yes.

don't activity coming trends, we've I of changed out really think from X -- more quarter. indicated has I think what Tier view our last bookings levels on

that a have we're later and those of I that think opportunities still the year in couple still on do kind -- those are contribution framework a conservative We're of we relatively think kind taking not specific accounts. of come of positioned this in well don't huge but Tier year, a we're really X deals. revenue view

an we out So, think I out -- is we QX. perspective, what overall -- coming of the think I think from the consistent with situation laid

Jackson Ader

Okay.

And follow-up, a deals then, you that international Mike, cool. the as mentioned. Okay,

of like, are win deals sort them insurtech of and still characterizing about brand-new startups more And I'm companies. mostly type I'm significant amounts of launches that correctly, Or international the they we maybe business curious, insurance think DWP? carriers yourself being and expansion were model? new to existing have of with that nature, should kind if startups right, think in I you beginning position to

Mike Jackowski

formed very of carriers actually No, companies that of even had some those usual all also where innovative quite an as markets. positioning with I but we're markets proposition advanced large. would international sizes, are -- opportunities an sell discussions in some innovation These and two all value in -- that carriers they ourselves in other tiers, were that, say in are were Jackson, we to to new

book and So, pursue the I hasn't can then a to we At startup replacing even get the book. [indiscernible] through fours. market. to tiers sometimes focus maybe strategy within carriers think one time, the changed, target something is new which of business, existing opportunities, And same will on

think is that But the shift of I I that of think it's how into philosophy in don't some selling just we're of So, deals came through. any carriers. timing the our

Jackson Ader

Right.

great. you. Thank Okay,

Operator

Thank you.

Our next Sills Brad of from America. question comes Bank of

open. line Your is

Michael Funk

Yes. Brad. Hi, question. it's taking the I Michael Funk on you appreciate for

if a could. couple I So,

actually trailing like a does the increase conservatism that that throughout for growth year going simply Is the the year? to deceleration So change revenue comment expectation go the off guidance back just midpoint the the absolute year. is and of of quarter-over-quarter beat in that throughout XXX% the looks that imply about full to XQ the or service about your back for your of revenue rate rest at

Mike Jackowski

services of to the the -- bulk assumption. Yes, it tied revenue think is I service

more Although, on subscription our on revenue. again, aggressive we're assumptions getting not

And think performance. the QX. I see going happy with to over QX pace our QX going how and into approach we coming So, out was we're we're of

Michael Funk

opportunity your Got they to U.S But thinking growth, whole. as markets you. general. seen we've adopt it. international a a that of in there, as they pace there, see SaaS when the the in similar greater do, slower then Is historically Europe generally specifically but And opportunity and Do Thank you out the the to technology, expectation? ramp over about up for non-U.S. adoption at greater technology? ramp they

Mike Jackowski

America. smaller. that to adapt relative going because of what we than to be I our more behave asking it carriers adoption opportunity our we an sell to see differently I see know would conservative current when business on-premise installed They're in they're because to say base, don't Michael, us an the greater size we We just if is won't. SaaS and which North we more often, over companies comes for or it's faster, solution, would if have going European there there over do cloud being today.

think to a and and a winning I over we a But think there. adoption. So, SaaS that's bit now, just it's there's turn a grow we are not think little pace we're going as but don't in it's that markets the reference seeing what's from we drive And of adoption and get deals available slower. our because to to trend points, uptake as seeing is I open of higher for really there. numbers start I parlay chance have proposition Europe, up us that additional then

Michael Funk

Great. Thank time. the I appreciate you.

Operator

[Operator Our of Instructions] from Lane next you. Stifel. Thank comes question Parker

open. Your is line

Parker Lane

taking And Tier a think the you new question. count on And noncore hoping serving and currently are what so was second. my just an for a guess initial core? could activity, into Hi, guys. Thanks about that for broadly, accounts, account Thanks. there using particularly, Yes. touch Tier Obviously, noncore been demand for X when with solutions, I you I how big opportunity hook not platform? Duck core the the solutions often is like the noncore that versus as for Creek's more customers X

Mike Jackowski

Thanks, would that, of to we're our say solutions. Sure. continuing adoption Parker. I see noncore

called into because with carriers a also a we've had of there our that we then had that were In bought in -- And solution or fact, on. added a with where data forms through product insights where to number and management adopt deals, is a move some Turnstile, relationships which quoting product ACORD solution, we experience. allows carriers distribution form

landing be our is from bookings with to helping. land do more going strategy into accounts it going point new is assets smaller. because this or smaller of of bookings to ACV, So, our we an view, is think lean, towards But it's in quarter expand a deals what will

to strategy. the continuing So, in success we're overall see

Parker Lane

people what you the Can outs like what sales those internationally XXXX how wins sourced your accounts, international, directly And going new give hiring a to look deals force there. some does is And place going maybe us sense driven, partner so standpoint? in back figuring of nice like to build that were first out RFPs that then are those what sales Got then the obviously, Thanks. of and were, their throughout were challenges a they from the inbound look it. today?

Mike Jackowski

say I that in of inbound those would Yeas, were pursuing know team, or great. is don't the ideas, sourced sales in are if RFP I deals local who were initial What the they position, get really very our originated capabilities we other of sight and can very, they into demonstrate how line favorable can quickly. up we bring But and of in manner. running some a got

those direct a the hiring, be the really your pleased for So, our can team the local put with complex high-level outcome. only of think there local model on demos, And the questions, that and they it they not consulting then have really team But about this building in can together so solution it right again, going the sales on to architecture estimates I put solution our in your with of partner cost in. a sales ground. answering force talked to terms but what we've functions, bit build the and I and go-to-market terms in you was ground, we're pre-sales, take function, sales But is wasn't to out think in past. driven, the And markets. it's

investments continue back, build in saw because we continental So, Australia, of to just the the to And out a made Europe. we teams see U.K years nice that. couple in team. momentum those on we win a those in pleased Obviously, that so

to international that's and I those investment think sales to amount disproportionate going marketing our year-over-year So, that we of out. markets. that's again, continue in a But, build

Parker Lane

Appreciate the feedback, Yes. all Mike.

Mike Jackowski

Okay.

Operator

you. Thank

Alex Raymond comes Our James. from next Sklar, question

Your line is open.

Alexander Sklar

your that a terms growth been about -- existing from the perspective? versus from on coming Mike, that's Thanks. percentage Parker's structural the your answer driven on follow-up your logo pipeline kind breaks new a any color up. And how to question of in expansion your then of you of having Can going picked talk I’m that? is go-to-market pace down on just change first Thanks. to

Mike Jackowski

our expand. and versus right? Alex, land I'm question in terms Yes. that you're asking Is of assuming that

Alexander Sklar

Yes, that's right.

Mike Jackowski

we think see I continue And Yes. success to on of signs that. Okay.

pleased And two we've new wins. SaaS logos Last quarter, customers Starr, this with I competitive Arbella talked three and that have on. I'm seen. who quarter, the new Now, about come

seeing logo nice. So, indicated perspective, with from customers land as couple That's add just we've been in of we new are a But earlier, a onto to us the we've base. able accounts, then and accounted or up ends distribution, management, like or happening that as else, getting what ends cross-sell turnstile assets, that is smaller And something into core product expand up a revenue. solution.

we allows position a an just new us working, with opportunity upcoming will, in So, I anytime is or build carrier for in you if to on opportunity. relationship strategy think a because a to inside, that that have just favorable a just that the be essence

I the intentional think on strategy. is that So,

that's question, it your opportunities it a answer has question think look balance customer the looks really versus is in to on pipeline, all nice I base. more and retention. as selling net And I the a your going to prospect still unfolds, resulting number, think new between the pipeline, favorable like at into we last just expand. So, when to the the dollar little bit high it lean bookings

running point those we Although numbers will in think some come at still likely than we're higher expected a bit. down

Alexander Sklar

appreciate commentary, the across here? how in conversations just factors progressing? can Tier on those Very lines then are to what it. an on provide you I up helpful. are kind finish conservatism, And got following the of deals but Okay, the just X update the those get key activity

Mike Jackowski

have When it's tend of strategy. those well. want carriers quite and a X, they But a their done, geography working do forward. with We're through move get really I done, market. what progressing most lines the ready we did business opportunity a they launching things along whether Tier bringing get want And to want to or And So, it's to to budgets they we conversations done and to to this have new ready think to move that do governance if their they're get new so. some something to we're about of And of to think line it's forward? talking projects some those approved, be perhaps aren't good that year? those

earlier, view So, think discussions we by Vinny having. we're -- from indicated point of what don't And I communicated our we're of again, unchanged the that is I as encouraged QX.

Alexander Sklar

Thank you.

Operator

you. Thank

of comes Our next Barclays. from question Saket Kalia

line is Your open.

Saket Kalia

of you for Thanks just for I kind back interrelated. to here. one guys. both Hey, question ask want having me of

Creek that's actively they're existing bit know customers wondering So, could Mike, about that I Duck OnDemand. to. potentially what saying and your little you about not just to I Duck talk something was Creek pushes converting if a customers, that

Creek in appetite guide? there been for you've I the that clear Because related is, us you, think OnDemand. if what Vinny is assumed I you But very those the nicely your just wonder customers customer if question accretive. you've remind revenue aren't can existing Duck about can And past. on in I that the for any correctly, those conversions remember be

So sense? But that was does sorry, a lot there. all there make

Mike Jackowski

we running code can those circulars code a continue ISO low say those It advance with what's deliver and of that templates, does, running indicated number we capabilities in some push for and talking earlier, even Saket. the of to on-premise they're environment. top I've base we're them timeframe we our As changes platform, that, if to on-prem on low platform, out And I these right our their to of with our conversations around convert? them would the and

a and in force of our that into we something those it's created customers or or of launched we've last couple rally a And not then good of shift, with over priority. years. Duck forcing to we've about some more that of just finally, advanced they many we you our OnDemand. so them like conversations. a haven't place. Creek will, And lift features on take if many them them with the advantage want done, advanced it's And about And to to get are Because function, a work of really strategic else

of them, these the for conversions of several cadence throughout having kind to having conversations advanced see -- going them. about of with of of us, the you're a we're a So But we're but year. whole I encouraged instead think stockpile

Vinny Chippari

in. Yes, and Saket, just guidance in to we and known on it pipeline, we aren't factor But last if conversions out results, we kind late-stage of number of your pipeline like any our that event, events. project have deep of we a of the project don't part When jump known of question. do will kind

might And number this So, or have known kind the one of customer we out don't ourselves two go X I forecast. target think built included give conversions inside are those But into events. we forecast. to and get generally a

Saket Kalia

I what That's Thanks it. thought. much, very guys. Got

Operator

you. Thank

Our next from of Joe JMP Securities. comes Goodwin question

Your open. line is

Joe Goodwin

so taking Can an update question. Great. customers into for give from much the you're on you you multi-tenant what just opting seeing us Thank deployments?

Mike Jackowski

Sure.

deal adoption diversity going of on But couple a We're We're multi-tenant past our live getting to overall tenant solution, single happy more I In not multi-tenant I'll say have those I'm choice. had the is it. and the and adoption with pleased the because mandating not say lose are carriers. of with go that, of accounts not very -- of had what over we're multi-tenant doing. it, our numbers we've the will of of driving into terms accounts customers some we lack or only because of quarters, not solution, that the multiple customers

are that are Some and with that small large books, books. Tier and Xs some Tier Xs very

point multiple it's I and complex proof single So, can support carriers. that platform think a backplane a a single multi-tenant

mode happy lifecycle in early making. mixed the years to many that we're very still for So, again, and to going with we're our we're it's But progress in be come. running

right not are of accounts point again, major we in where a multi terms focus So, it's tenancy with the and now.

Joe Goodwin

you. on that's going? the can an CFO Thank provide search Understood. you and how update then And

Mike Jackowski

I the really that response would candidates. the we've it's I'm had from and the It's with market. response with going say And can. I'm I we've Yes, with a well, that some happy and that progress leading great really made. the pleased interest

the incredible is us. new prospects -- I to the person. will just But the I our will knows company, and validation certainly CFO. we'll say because seeing find think terrific can. have it's front Vinny, a I out now. I strength that have say But we're that shoes our opportunity when And but we that of about a fill, to that that So, of now somebody announce we right right big the just reputation, of hire priority just has in a it, right our excited we're everyone But think we

Joe Goodwin

you. Absolutely. Thank

Operator

for That Thank any the call. to turn over you. I concludes today's Jackowski Mike conference closing call will remarks.

Mike Jackowski

as to cloud. I early core you, And fiscal to year we're year, us of again, our multiple deepening -- great to highlight signing that success stages growth. U.S., the migrates outside start ARR some Okay. success Duck our see with international the of QX we emphasize earnings to And to call. that early off 'XX the the by signs platforms by we've Creek still our OnDemand for as want in like And we're industry Thank existing wins Thank that be the opportunity. continued grow and everyone healthy to I showing is are to we by advantage this a Take that in everyone evidence care. and relationships please and SaaS We're I'd had quarter our Again, safe, signaling take customers well. our this significant appreciate joining us some we again, joining you, encouraged fiscal customers. well-positioned our today. continue of of of

Operator

participating. you does and Ladies conclude that for you. today's Thank gentlemen, conference. Thank all

You may now disconnect.