Five9 Inc (FIVN) 2014 Q2 法說會逐字稿

Good day, and welcome to the Five9, Inc. Second Quarter 2014 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Ms. Lisa Laukkanen. Please go ahead.

Thank you, operator, and good afternoon, everyone, and thank you for joining us today's conference call to discuss Five9's second quarter results. Today's call is being hosted by Mike Burkland, CEO, and Barry Zwarenstein, CFO.

During the course of this conference call, Five9's management team will make projections and other forward-looking statements regarding future events or the future financial performance of the Company. We caution you that such statements are simply predictions, and actual events or results may differ materially.

These statements are subject to substantial risks and uncertainties that could adversely affect our future results. A more detailed discussion of these risk factors you should consider in evaluating Five9 and its prospects are included under the caption Risk Factors and elsewhere in our filings with the Securities and Exchange Commission.

In addition, management will make reference to non-GAAP financial measures during the call. Management believes that this non-GAAP information is useful because it enhances the understanding of the Company's ongoing performance, and Five9 therefore uses non-GAAP financial information internally to evaluate and manage the Company's operations.

This non-GAAP information should be considered along with, and not as a replacement for, financial information reported under GAAP. The full reconciliation of the GAAP to non-GAAP financial data can be found in the Company's press release issued earlier this afternoon.

Now I would like to turn the call over to Five9's CEO, Mike Burkland.

Thanks, Lisa. Welcome, everyone, to our second quarter conference call. We are pleased to report solid second quarter results. Revenue for the second quarter increased 22% year-over-year to $24.7 million, within our guidance range.

Our bottom-line results were better than expected. Our second quarter growth was driven by the continued demand for Five9's contact center software as more and more companies look to move away from their legacy premise-based solutions and into cloud.

We experienced strong momentum in adding new customers, including key enterprise customer wins in the following three industries -- financial services, healthcare and education.

One example was a nationwide financial services company relocating their main contact center operation. They chose Five9's cloud solution to meet aggressive timeframes and minimize professional services, which would have been required if they had chosen to move their premise-based solution.

Other impact factors in their decision were the elimination of the periodic upgrade cycles they experienced, with extensive IT and PS requirements, as well as the ability to right-size in the future, depending on market conditions.

Another example was the largest physician network in the state of Colorado that chose Five9 to support their growing physician members and core hospital patient care functions. They are in the process of rolling out Salesforce.com service cloud to their teams and they did not want to go through a painful integration process with their on-premise contact center solution.

We were introduced into this opportunity by Salesforce.com, and Five9 was the only solution that could meet the diverse needs of the client, which included voice blending and multi-channel interactions.

While in most enterprise customer wins we replaced legacy on-premise solutions, we also from time to time replaced competitive solutions. In one such case, a large online digital marketing company abandoned their rollout with a cloud competitor during the implementation. Looking for stronger customer support, they turned to Five9.

Our solution is now being integrated with the customer sales force CRM, with the number of agents expected to scale to 500. We continue to pride ourselves on our team's proven ability to execute, from sales to implementation to ongoing support.

Five9's cloud contact center software is highly complementary with CRM solutions. Our deep integration with a number of leading CRM solutions enables our clients to have a seamless end-to-end solution for customer interactions and continues to help drive our sales momentum. Including CRM and other partners, referrals contributed roughly a third of the enterprise deals in the second quarter.

During the quarter, we continued to strengthen our partnerships with leading CRM vendors such as Salesforce.com, Oracle, as well as Zendesk. We announced our partnership with Zendesk in March, and the results have been promising. In the first 90 days, we closed several new deals integrated with Zendesk; we have several more in trials and dozens more in the pipeline.

As both companies get more familiar with the joint offering and customers see the value and ease of use of our off-the-shelf integration, we expect to see continued momentum with our Zendesk partnership.

Another key milestone during the quarter was the release of our latest version of our cloud contact center software. The Five9 Summer Release 2014 includes new native multi-channel applications that support social, mobile, chat and email interactions. The new multi-channel capabilities are powered by Five9 Connect, a unique intelligent technology layer that helps categorize, prioritize and route customer interactions.

Additional major enhancements provide more mobility for supervisors and more customized dashboards for better monitoring and reporting. With the Five9 Summer Release 2014, businesses can improve customer engagement across more channels while increasing agent efficiency and productivity within their contact center. The response so far from customers, prospects and analysts has been extremely positive.

Lastly, during the quarter we continued to enhance our cloud infrastructure. Under the leadership of our recently hired EVP of Cloud Operations, Scott Welch, we continued to upgrade our environment, including additional and enhanced storage, improved carrier infrastructure and further improvements in network security. Our investments in people, process and technology has resulted in strong uptime for the past several months.

Our performance in the second quarter is evidence that our innovative cloud-based approach is disrupting a very large contact center market, which includes 14.5 million agents around the world. Customers are drawn to the benefits of the cloud -- the low upfront costs, ability to scale on demand, rapid deployment, as well as the ease of management and integration.

Contact centers are mission-critical to an organization's successful deliver of customer service, sales and marketing. Using Gartner data and our pricing, we estimate that the global market opportunity for our solution is $22 billion, and we are in the very early stages of penetrating this large market opportunity.

In summary, we are seeing strong traction for our comprehensive cloud software solution for contact centers. We continue to see strong win rates and believe that Five9 is uniquely positioned to capture a large portion of this market over time.

As we look into the second half of '14, I would like to provide insight into the revenue guidance that Barry will discuss further.

Following the April 15 Affordable Care Act enrollment deadline, we experienced a larger than anticipated decline in revenue from some of our key healthcare customers. In addition, a number of our BPO customers experienced slowdowns in their business for a variety of reasons.

These two factors resulted in our monthly recurring revenue being below where we expected it would be entering the third quarter, thus negatively impacting our revenue guidance.

That said, we are very encouraged by the clear success we are enjoying with our enterprise go-to-market execution. We had a great quarter in terms of enterprise bookings and have built a strong pipeline for the second half. While it takes some time for these enterprise orders to go live and become revenue, they provide a solid foundation for longer-term growth.

Going forward, we remain focused on the following initiatives aimed at accelerating our penetration in the enterprise market. First, enhancing our platform infrastructure and process to continue to maintain high levels of uptime, which was very strong in the second quarter.

Second, scaling our enterprise sales capacity by adding to what, in my opinion, is the best sales organization in this industry. During the second quarter, we saw continued performance in terms of sales productivity and pipeline growth.

Third, offering best-in-class products and enhancements to our customers through our ongoing R&D efforts. During the quarter, we delivered Summer Release 2014, further extending our competitive advantages. And fourth, improving execution and implementation of new enterprise customers. During the second quarter, we upgraded our professional services organization under new leadership, and we are very pleased with the track that we are on.

Given these initiatives, along with our strong bookings momentum, we remain enthusiastic about our long-term growth opportunities. I will now turn the call over to Barry to provide some more color on the financials.

Thank you, Mike. Before I discuss our results for the second quarter, I will begin with a brief review of our business model. Recurring revenue accounted for 97% of our revenues in the second quarter. Recurring revenue is made up of monthly subscriptions, based on the number of agencies, and of usage, based upon minutes.

Our subscription fees are generally billed monthly in advance, while related usage fees are generally billed in arrears. The other 3% of our revenue is comprised of professional services fees, generating from assisting clients in implementing the Five9 solutions and optimizing its use.

Now, moving on to our financial results for the second quarter. Revenue for the second quarter of 2014 was $24.7 million, up 22% from the second quarter of 2013. Our revenue growth was primarily driven by adding new enterprise customers. Our dollar-based retention rate for the period ended June 30, 2014 was 98%, compared with 100% for the period ended March 31, 2014.

The decline in the dollar-based retention rate is primarily due to the revenue reductions in May and June of 2014, driven by the Affordable Care Act-related decrease in healthcare business and the BPO contraction Mike mentioned earlier.

As a reminder, this metric is derived by taking an average of the trailing 12 months of the year-upon-year revenue changes from customers in our installed base in the prior 12 months, similar to same store sales.

Gross margin, adjusted to exclude all non-cash charges, namely stock-based compensation, amortization and depreciation, was 51.5% for the second quarter, compared to 43.7% for the same period in 2013.

The improvements in our adjusted gross margin continued to be driven primarily by improved usage efficiencies, economies of scale, and the elimination of costs associated with our move and upgrade of our data centers in 2013.

It is important to point out that while usage revenue generates gross margins below our subscription margins, usage revenue comes with very minor incremental operational expenses and therefore generates considerable bottom-line leverage.

Going forward, we are expecting further improvements to our adjusted gross margin to reach 65% to 70% in the long-term, driven by the following -- first, improving usage margins beginning late this year, as we expect to get a return on capital and expense investments we are currently making in least cost routing and related initiatives; second, reducing the drag on overall margins we currently bear from our professional services revenue as we expect to see the benefits in 2015 and 2016 from various steps being taken by our new leadership in this area; and thirdly, continuing and considerable benefits from expected economies of scale as revenue increases over time.

Please note that a reconciliation of the GAAP gross margin to adjusted gross margin, as well as other reconciliations from non-GAAP to GAAP results, is provided with our earnings press release.

GAAP R&D expenses for the second quarter of 2014 totaled 22% of revenue, or $5.6 million, compared to 20% of revenue, or $4.1 million, a year ago. The dollar increase was driven by increases in personnel-related costs as we continued to enhance our industry-leading platform that included the Summer Release of 2014 launch.

GAAP sales and marketing expenses for the second quarter of 2014 totaled 39% of revenue, or $9.7 million, compared to 36% of revenue, or $7.2 million, for the second quarter of 2013. Our sales and marketing expenses have increased as we've continued to scale our sales capacity and spend on lead generation, both aimed at the enterprise market opportunity.

GAAP G&A expenses for the second quarter of 2014 totaled 14% of revenue, or $3.5 million, compared to 20% of revenue, or $4.1 million, for the prior year period. Included in the second quarter G&A was a benefit from the reversal of a contingent sales tax liability of $2.8 million following a favorable ruling from estate revenue authorities.

The $2.8 million was accrued progressively in G&A expense on a quarterly basis from 2011 through the first quarter of 2014. Excluding the $2.8 million reversal, G&A in the second quarter was $6.3 million. We expect G&A in the current quarter to remain at approximately $6.3 million, partly as a result of savings from going live in the second quarter, with systems to collect sales taxes on usage from customers rather than Five9 paying these taxes, offsetting otherwise expected increases in G&A.

Adjusted EBITDA loss was $6.9 million for the second quarter of 2014, compared to a loss of $6.1 million for the second quarter of 2013. GAAP net loss for the second quarter of 2014 was $8.7 million, or $0.18 per share, compared to a GAAP net loss of $8.3 million, or $2.25 per share, for the second quarter of 2013.

As mentioned earlier, included in the GAAP net loss for the second quarter of 2014 was a reversal of a contingent sales tax liability of $2.8 million following a favorable ruling from the state tax authority. This release of liability reduced the Company's net loss per basic and diluted share by $0.06 for the three months ended June 30, 2014 and $0.10 for the six months ended June 30, 2014.

Non-GAAP net loss for the second quarter of 2014 was $9.5 million, or $0.20 per share, compared to a non-GAAP net loss of $7.2 million, or $1.95 per share, for the second quarter of 2013.

Regarding our tax rate, we have a substantial NOL balance that we will continue to utilize. We expect the dollar amount of taxes relating to our foreign subsidiaries to be approximately $120,000 for the year 2014. As of June 30, 2014, cash and short-term investments totaled $91.6 million.

As of June 30, 2014, our debt totaled $47.4 million, comprised of a revolver, term loans, notes payable and capital leases. Our DSO performance remains strong, and DSOs for the period ended June 30, 2014 were 25 days, compared to 24 days in the prior year.

Cash outflow from operations for the first half of 2014 was $14.4 million and free cash outflow was $17.3 million, after taking into consideration $2.9 million of capital expenditures in the first half.

I'd like to finish today's prepared remarks with a brief discussion on our expectations for the third quarter and full year 2014. For the third quarter, we expect revenue in the range of $24 million to $25 million. GAAP net loss is expected to be in the range of $11.2 million to $12.2 million.

Non-GAAP net loss is expected to be in the range of $9.2 million to $10.2 million. For the full year, we expect revenue in the range of $99 million to $101 million, compared to previously provided range of $102 million to $106 million.

GAAP net loss is expected to be in the range of $38.9 million to $40.5 million, compared to the previously provided range of $41.7 million to $43.9 million. Non-GAAP net loss is expected to be in the range of $36.2 million to $37.8 million, compared to the previously provided range of $36.8 million to $38.8 million.

For modeling purposes, we would like to provide the following additional information. For calculating EPS, we expect our shares to be 48.4 million for the third quarter, 48.9 million for the fourth quarter and 37.6 million for the full year. Our CapEx is expected to total approximately $8.5 million for 2014.

In summary, we had solid results for the second quarter with revenue in line with our guidance and bottom-line results that were better than expected. We remain confident in our ability to achieve our long-term operating model of gross margins of 65% to 70% and adjusted EBITDA margins of greater than 20%, driven primarily by further improvements in gross margin and G&A.

Lastly, before we turn to your questions, I'd like to mention our upcoming conference participation. We will be presenting at the 2014 Needham Interconnect Conference in New York on Wednesday, August the 6th, and at the 2014 Canaccord 34th Annual Growth Conference in Boston on Thursday, August the 14th.

And now, we'd like to open the call for your questions. Operator, please go ahead.

Thank you. (Operator Instructions). And the first question comes from Sterling Auty with JPMorgan.

All right, thanks. Hi, guys. I want to jump into the heart of the matter. So, the issue related to the recurring revenue that's causing the change in the guidance, can you give us maybe some quantification as to what part of the customer base this is exposed to?

In other words, is this isolated or is more broad-based? And specifically within those BPOs, were those BPOs also supporting Affordable Care or were those BPOs that you saw some sluggishness in supporting other areas that might be having an issue, too?

Yes. Great question, Sterling. This is Mike. And I want to start off just by saying that this is really more about the shape of our revenue curve and the shape of the recurring revenue curve through the quarter than anything else. And it was fairly isolated in terms of a very small handful of healthcare-related customers, which, by the way, we have seen in the past, kind of a Q4 bulge in terms of activity for open enrollment.

The Affordable Care Act really allowed that normal Q4 bulge to get carried in and through Q1, and then the April 15th deadline had a larger impact on a few of these large healthcare providers that were working on the Obamacare initiative. So, it was really isolated to that group of customers, and some BPOs that were also involved in that industry, and then a couple of other BPOs that had specific kind of microeconomic-related issues with a couple of their clients, just timing of projects more than anything.

Because the question is getting asked already to me, at what point did you see that visibility and why, if you saw the fourth quarter bulge and this kind of carried it forward, what had you thinking that this was going to be more sustainable and you weren't going to see the dip that we ultimately saw?

Yes. Well, again, it's not that we didn't expect to see a dip. We expected to see some dip. And if you look at our prior guidance for the quarter and why we were essentially in -- close to in line, we expected some dip, but we -- it was larger than anticipated, and again, by a couple of these larger healthcare-related customers.

I will say this on the positive, that our bookings momentum continues to be exceptionally strong. We had a very strong quarter -- a record quarter from an enterprise new customer bookings perspective. So, in spite of that, again, we look at the shape of the revenue curve. I call it the jump-off point, as we're doing our modeling, looking at monthly recurring revenue.

The good news for us is 97% to 98% of our revenue is recurring. We have great visibility in the near-term in terms of what that means, and that in and of itself led to the guidance being lower. All that said, again, by far and away the best quarter we've ever had from an enterprise bookings perspective and are very, very bullish about the long-term growth prospects.

Is there any sense -- because that's exactly the point I wanted to get to, is okay, so if you separate this out, it sounds like the rest of the business was strong. If you tried to do an apples-to-apples comparison on the rest of the business on a sequential basis, how much better are we talking about?

I would say that we are very much on track sequentially to our plans before this Affordable Care Act impact; in fact, even more bullish on 2015 sequentially because of it.

Okay. And then, last question and I'll turn it over and maybe jump back in the queue. Did you see this -- I would imagine that this impacted both seats and usage. And so I'm just wondering if you can give some confirmation, does it impact one more versus the other more in terms of the revenue contribution, and that also contributed to a bit of a lift in gross margins as maybe the usage kind of came in late or the outlook being a little bit lighter than expected given the fall-off from the Affordable Care stuff?

Yes, a very good question, Sterling. It comes in the flavor of seats and usage, but more in usage. So, the impact of these declines were actually more in usage, but we felt it a little bit in seats as well.

All right, thank you.

You got it.

And your next question will come from Raimo Lenschow with Barclays.

Thanks for taking my question. Maybe can I just stay on that subject? So, if I look at your -- if I look at the guidance, if we took the midpoint of the guidance down by about $4 million, and if I do the math then for Q3 and Q4, then in Q4 you're growing at about 11%. You sounded more bullish on next year, but how do you think about that? What sort of type growth Company are you now going forward? And sorry for asking that very directly, you know.

No, that's okay, Raimo. A good question. And again, Q4 is really -- the year-over-year comparison in Q4 is really driven because it was a tough compare. If you look at Q4 last year we had a very, very strong quarter revenue-wise. And if you just look at the hockey stick that we experienced last Q4, we're attempting to be conservative going forward, and that's the way we model. So, I'll leave it at that.

Yes, okay. And then, if you think about -- more a question now on the -- you've done better on the cost side. Have you -- were there actions taken to kind of -- after you saw what's happening on the top-line to kind of change the cost side, or did the cost side, there was just kind of you were doing what you were doing and it just came in better?

Very good question. We definitely have visibility during the quarter and we certainly took steps to manage our expenses through the quarter, and that's what resulted in the bottom line [beat].

I've said this before to many of you, I've been running this Company for six-and-a-half years. I have a very, very good handle on the throttle that we need to have a handle on to manage our expenses when necessary. And again, this is a short-term issue and we took short-term action to delay some hiring, essentially, and are very, very bullish, as I said, about the future and our sequential growth.

Okay, perfect. Thank you.

Yes.

And the next question will come from Richard Davis with Canaccord.

Hey, thanks. Two things. One, I'm just trying to think through the numbers here, so if we were at the middle of the range at $104 million and $104.5 million and we're going to do 100, so that's a $4 million delta and you said that the enterprise bookings are materially better than expected. And maybe, if everything had come through with the ACA, you might have done $106 million or $105 million.

So, does that mean that the miss on a run rate full basis of the ACA impact is $10 million to $12 million? I'm just trying to kind of bracket it....

Yes, Richard -- yes, thanks, Richard, because I want to make sure I connect the dots for you. Again, our enterprise new customer bookings were very, very strong in the second quarter. And by the way, Q3 is off to a great start, I'll leave it at that, and the pipeline looks very, very strong. But most of the impact of that Q2 enterprise new customer booking activity will still be felt in 2015 revenue.

Got it.

So...

Yes. And then secondly --. Yes. And then secondly, we have EBITDA break-even sometime in early 2017. Is it possible that you could pull that number forward without hurting your revenue growth, kind of given the increased volatility of the revenue numbers that we're now seeing? Or how do you think about that?

I feel like we always have the ability to pull that forward, Richard. But again, this gets back to the market opportunity and the success that we're having going against that enterprise market opportunity.

I don't want people to get lost in the numbers here. We had, as I said, a record quarter in the second quarter and I expect to continue to have exceptional win rates against our competition, both premise and hybrid cloud solutions. We believe we've got a significant competitive advantage going into a very, very large opportunity, a $22 billion market opportunity.

So, we couldn't be more bullish about the long-term growth aspects and opportunity. We're going to continue to invest in that.

That said, as you saw during this quarter, we have the ability to throttle where necessary and could potentially move that break-even point in if we chose to.

Okay. Thank you.

Yes.

And the next question comes from Michael Huang with Needham & Company.

Thanks very much. You know, in terms of your comments around the strength of bookings, I was wondering, was this a function of just the sales ramping [in marednon], or was it the strength of the pipeline, pent-up demand around the Summer Release? Maybe just to help, to drill into kind of why you were seeing such strength, and obviously it seems like it's going to be continuing as well.

Yes. I do think it's just more of the same in terms of our execution plan, Michael. As I've said many times, we are investing in scaling our sales capacity to go after this enterprise opportunity and it's paying off. We're seeing sales productivity across the enterprise sales team and bringing in new business that we just haven't seen before. Because we're adding to the sales capacity, we're continuing to see great performance on the booking side of things.

So, I would say it's really the continuation of our execution story. I think it clearly helps to have our Summer Release be launched and the buzz that came along with that. The customer traction we're seeing and response we're seeing from the Summer Release has been wonderful, especially when I look at the attach rate of email and chat to our deal flow as well as our installed base. It's early, but the indications are very, very good. I like what I see in terms of the attach rate.

Got you, okay. And so, would you say, with respect to Summer Release, is that more of a benefit to kind of the new customers, or is that a driver more primarily with the existing customers right now?

It's really for both, Mike. Any contact center that is looking to add multi-channel capabilities from Five 9, our existing customers can do that as well as our new customers.

And could you share with us kind of a perspective around kind of how pricing could tick up as you're selling this in more channels?

Yes. Again, we see a modest opportunity to continue to look at the average across our base in terms of the recurring revenue per seat. And as I believe we've told you guys in the past, we get about $190 per seat per month in terms of subscription and usage from our customer base. And we do see some upside in that as we deliver additional products, like the ones in SR14.

Got you, okay. And just a last question from me. In terms of the competition, was wondering if you could just share what you're seeing there. I know that you are -- you had kind of provided some examples around displacing both on-premise and cloud, but what were you seeing out there and has anything changed and maybe just comment on (inaudible) [and trends].

Yes. We continue to see a couple of players in the hybrid category. We clearly compete with the large three premise players -- Avaya, Genesis and Cisco -- and replace them. But, as I mentioned, we continue to see a couple of hybrid companies predominantly. There's one that we see more than the other, and I'll give you an example. We saw this one particular competitor 11 times during the quarter, and we won eight out of those 11. So, we're very, very satisfied with our win rate against them.

Great. Thanks so much.

Yes.

(Operator Instructions). The next question will come from Nikolay Beliov with Bank of America.

Hi, guys. Can you please share with us what percentage of your business comes from the healthcare and BPO verticals?

Yes, very good question, Nikolay. We do track within our CRM solution industries. We're a little soft in the way we do that, but we lump together healthcare and pharma. And it's, as a percentage of our total recurring revenue, high single digits to low double digits, as a percentage of our total.

And do you see any change in the sales cycle outside the healthcare and BPO verticals in the quarter?

No. No, we did not see a real change in the sales cycle. They continue to be about what they've been for us in the past. And again, even in enterprise our sales cycles are not too elongated.

And can you give us an update on the hiring of -- and the build-up of the enterprise sales force is hiring according to plan? Are you ahead of plan or below plan? And how hard is it to find good sales people selling cloud software these days?

Yes, good question. We are right on track in terms of continuing to scale our enterprise sales organization. A big reason, I think, for our success and our continued success to scale this enterprise go-to-market effort is our ability to attract the best and the brightest. Remember, we're in an industry that's been around for a very long time.

If you look at the legacy premise players that have been in this industry for quite a long time, we're recruiting the best and the brightest from those vendors. Our sales leadership here is very well connected in that sector, and we continue to really succeed because of our ability to attract the best. And most of these are known quantities to our sales management. They've worked with them in the past. They know these sales people are proven successes, if you will.

A couple more from me. The multi-channel capability that you announced, are those priced separately? Are they a separate module, or it's part of the overall solution?

Yes. They are priced separately and an add-on module.

Got it. And lastly, if you can comment on your international expansion plans, specially Europe.

Yes. Later this year we will be building out our first European data center and beginning a go-to-market effort late in the year, which will begin to reflect in 2015 revenue.

Got it. Thank you.

Yes.

And the next question will come from Brendan Barnicle of Pacific Crest Securities.

Thanks so much, guys. I wanted to just kind of go through the timing on this. So, ACA registration stopped mid April. You guys updated guidance in mid May. So, in that month in-between, had you not seen that much of a change, that accelerated after mid May, or did you think it was going to change course or something? Can you give us any more color on that process?

Yes. I'd say it's very accurate timing, Brendan, and that's about what it takes. It takes us probably 30 days. We don't have visibility on a daily basis; I would say we have visibility on a monthly basis.

And if we look at the guidance now for this year, it looks at about 19% for the full year. So, following up on Raimo's question, should we be thinking about the Company going forward as more of a high teens grower than a 20%, 25% grower?

No, I would say -- again, in a few words here, Brendan, we are more confident than ever in our ability to accelerate revenue growth in 2015.

And then, I know you guys don't share with us bookings growth, but is there any way you can give us any more color on the strength? You said that it's -- you were very confident in it. Is it -- did it accelerate? Did it accelerate by a certain amount? What more can you give us to hang our hat on, to look back at that bookings growth?

Yes. We had healthy acceleration in our enterprise net new bookings during Q2.

What about overall bookings?

As well as SMB; they continue to be very strong. So again, while it's a slower growth opportunity for us, we continue to have very good bookings in SMB as well.

So, overall bookings growth across the Company accelerated Q -- going in Q2?

Yes. But again, the SMB, I would not get too excited about modeling a big impact from that. It's mostly in enterprise.

And then lastly, any outages in the quarter?

No. We had a great quarter, very good uptime.

Perfect. Thanks, guys.

Yes.

And that does conclude the question-and-answer session. I'll now turn the call back over to management for any additional or closing remarks.

Well, thanks, everyone, for joining us on this Q2 earnings call. We'll look forward to future conversations. Thanks again. Take care, now.

Thank you. And that does conclude today's conference. We do thank you for your participation today.