CS Disco Inc (LAW) 2023 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the CS DISCO Second Quarter of Fiscal Year 2023 Conference Call. (Operator Instructions) I would like to now hand the conference over to your first speaker today, Head of Investor Relations, Aleksey Lakchakov. Please go ahead.

女士們、先生們，感謝您的耐心等待，歡迎參加CS DISCO 2023財年第二季電話會議。 （操作說明）現在，我將會議交給今天的第一位發言人，投資者關係主管阿列克謝·拉克恰科夫先生。請開始發言。

Good afternoon, and thank you for joining us on today's conference call to discuss the financial results for fiscal second quarter of 2023. With me on today's call are Kiwi Camara, DISCO's Co-Founder and Chief Executive Officer; and Michael Lafair, DISCO's Chief Financial Officer.

下午好，感謝各位參加今天的電話會議，共同討論2023財年第二季的財務表現。今天與我一同參加會議的還有DISCO的共同創辦人兼執行長Kiwi Camara，以及DISCO的財務長Michael Lafair。

Today's call will include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our financial outlook and future performance, our future capital expenditures, market opportunities, market position, product strategy and growth opportunities, and developments in the legal technology industry. In addition to our prepared remarks, our earnings press release, SEC filings and a replay of today's call can be found on our Investor Relations website at ir.csdisco.com.

今天的電話會議將包含符合1995年《私人證券訴訟改革法案》安全港條款定義的前瞻性陳述，包括但不限於有關我們財務展望和未來業績、未來資本支出、市場機會、市場地位、產品戰略和增長機會以及法律科技行業發展情況的陳述。除我們準備好的演講稿外，您還可以在我們的投資者關係網站ir.csdisco.com上找到我們的盈利新聞稿、提交給美國證券交易委員會（SEC）的文件以及今天電話會議的錄音回放。

Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. Forward-looking statements represent our management's beliefs and assumptions only as of the date made. Information on factors that could affect the company's financial results is included in its filings with the SEC from time to time, including the section entitled Risk Factors in the company's quarterly report on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 10, 2023, and the company's upcoming Form 10-Q for the quarter ended June 30, 2023.

前瞻性陳述涉及已知和未知的風險和不確定性，可能導致我們的實際績效、表現或成就與前瞻性陳述中明示或暗示的內容有重大差異。前瞻性陳述僅代表我們管理階層截至陳述之日的信念和假設。可能影響公司財務表現的因素資訊包含在本公司不時向美國證券交易委員會（SEC）提交的文件中，包括公司於2023年5月10日向SEC提交的截至2023年3月31日止季度的10-Q季度報告中題為“風險因素”的部分，以及公司即將提交的截至2023年60-Q月止

In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP financial measures and the discussion of the limitations in using non-GAAP measures versus their closest GAAP equivalent is available in our earnings release. And with that, I'd like to turn the call over to Kiwi.

此外，在今天的電話會議中，我們將討論非GAAP財務指標。這些非GAAP財務指標是依照GAAP編製的財務績效指標的補充，而非替代或優於後者。 GAAP和非GAAP財務指標之間的調節表以及使用非GAAP指標相對於其最接近的GAAP指標的局限性的討論，請參閱我們的盈利報告。接下來，我將把電話會議交給Kiwi。

Thanks, Aleksey. Good afternoon, everyone, and welcome to our earnings call for the second quarter of fiscal year 2023. Revenue for Q2 2023 was $34.3 million. Adjusted EBITDA was negative $7.4 million, and we ended the quarter with 1,431 customers, up 14% year-over-year. Both revenue and adjusted EBITDA were above the high end of our guidance range with adjusted EBITDA improving by over $5 million year-over-year and adjusted EBITDA margin improving by more than 1,700 basis points quarter-over-quarter. We are pleased with our results and our progress towards profitability.

謝謝 Aleksey。大家下午好，歡迎參加我們2023財年第二季財報電話會議。 2023財年第二季營收為3,430萬美元。調整後EBITDA為負740萬美元，季末客戶數為1,431家，較去年同期成長14%。營收和調整後EBITDA均高於我們先前預期範圍的上限，其中調整後EBITDA年增超過500萬美元，調整後EBITDA利潤率較上季提升超過1700個基點。我們對業績以及在實現盈利方面取得的進展感到滿意。

On prior earnings calls, we discussed the various sales and marketing performance drivers that are improving. We discussed seeing continued customer count growth and improvement in pipeline metrics such as meetings, near-term opportunities, and wins. That improvement continued in Q2. Compared to Q2 of last year, total meetings were up 30% and near-term opportunities were up 20%. While at the same time, we have continued to enjoy the high win rates that we have experienced since our IPO.

在先前的財報電話會議上，我們討論了推動銷售和行銷績效成長的各項因素。我們提到客戶數量持續成長，銷售管道指標（例如會議數量、近期商機和成交量）也得到改善。第二季業績延續了這一成長動能。與去年同期相比，會議總數增加了30%，近期商機成長了20%。同時，我們自上市以來一直保持著較高的成交率。

Inbound leads have more than doubled year-over-year, in part as a result of our recent investments in marketing. While we have continued to see some reductions in usage due to cost optimization, especially from our largest customers, our accelerating sales activity is allowing us to offset these reductions by bringing new customers and matters onto our platforms. These positive signs tell us set our efforts to increase usage and accelerate product adoption are working.

由於我們近期在行銷方面的投入，入站線索數量較去年同期成長超過一倍。儘管由於成本優化，我們的使用量有所下降，尤其是一些大客戶的使用量有所下降，但我們銷售活動的加速增長使我們能夠透過為平台帶來新客戶和新業務來彌補這些下降。這些積極的跡象表明，我們為提高使用量和加速產品普及所做的努力正在發揮作用。

Last year and early this year, we promoted several classes of sales development representatives, or SDRs, to quota carrying account executive roles on our inside sales teams. These internally promoted reps have seen strong early success with all reps producing revenue within their first 90 days in role and some reps already producing more than $1 million in annualized revenue. We believe that the experience SDR's gain through their time in our SDR program, experience that familiarizes them with the DISCO products suite, our customers, the legal industry and legal workflows, and the way successful sales leaders at DISCO sell, helps them achieve this kind of rapid success as quota carrying reps. We believe the pipeline of talent from SDR to inside sales, and eventually to other functions such as customer success and field sales, will be an effective and efficient way of growing our sales team going forward. Already, many of our top performers in these roles are alumni of our SDR program.

去年和今年年初，我們提拔了幾批銷售開發代表（SDR）擔任內部銷售團隊的客戶經理，負責完成銷售指標。這些內部晉升的銷售代表在上任初期就取得了顯著的成功，所有代表都在入職後的前90天內實現了營收，部分代表的年化營收甚至超過了100萬美元。我們相信，SDR在SDR專案中累積的經驗，包括對DISCO產品套件、客戶、法律產業及法律工作流程的熟悉，以及對DISCO優秀銷售領導者銷售方式的了解，都有助於他們作為負責銷售指標的銷售代表迅速取得成功。我們相信，從SDR到內部銷售，最終到客戶成功和現場銷售等其他職能部門的人才儲備，將是未來我們銷售團隊發展的有效途徑。目前，我們許多在這些職位上表現優異的員工都曾是SDR計畫的學員。

In our Review business, we have seen a rebound in activity this quarter, both in the scale of our total pipeline and the size of the deals in our pipeline. One of our key operational initiatives has been increasing the percentage of our sales team that sells Review successfully. In the first half of this year, more than 60% of our quota carrying reps generated Review revenue, which is almost double the percentage who did so in the first half of the prior year. We have also seen some increases in larger reviews with one customer that had multiple reviews in the quarter, generating more than $1 million in Review revenue in the quarter.

在我們的評論業務中，本季業務活動出現反彈，無論是整體銷售管道規模或單筆交易金額均有所成長。我們的一項關鍵營運舉措是提高銷售團隊中成功銷售評論業務的銷售人員比例。今年上半年，超過 60% 的銷售代表實現了評論業務收入，這一比例幾乎是去年同期的兩倍。此外，我們也看到一些大型評論業務有所增長，其中一位客戶在本季度進行了多項評論業務，累計創造了超過 100 萬美元的評論業務收入。

This quarter, I would like to highlight a large international law firm that has been a DISCO Ediscovery user for more than 5 years. This customer has over 120 matters running simultaneously on DISCO and generated over $3.5 million in total revenue over the last 12 months. More recently, they have become recurring users of Review with 3 reviews active in Q2 and several more in the pipeline. Overall, this customer finds that our platform helps them complete legal document review more quickly and efficiently across a wide range of legal matters around the world.

本季度，我想重點介紹一家大型國際律師事務所，他們使用 DISCO 電子取證系統超過 5 年。該客戶在 DISCO 上同時處理超過 120 個案件，並在過去 12 個月中創造了超過 350 萬美元的總收入。最近，他們也開始頻繁使用審查功能，第二季有 3 個審查項目正在進行中，還有幾個項目正在處理中。總而言之，該客戶認為我們的平台能夠幫助他們更快速、更有效率地完成全球各類法律事務的法律文件審查。

Another customer, a global publicly traded shipping company, and their Am Law 100 law firm has been using DISCO for a large global antitrust matter. They began using DISCO in Q4 of 2022 and have since increased usage to more than $200,000 this quarter. This customer selected DISCO after a rigorous review of our capabilities against our peers. DISCO stood out as the company with the most robust technology for handling large datasets and complex review workflows quickly. It has been an exceptional partnership for us and a perfect example of DISCO's global reach and impact.

另一家客戶是一家全球上市航運公司，他們及其美國百大律師事務所（Am Law 100）一直在使用 DISCO 處理一項大型全球反壟斷案件。他們於 2022 年第四季開始使用 DISCO，此後使用量增加，本季已超過 20 萬美元。該客戶在對我們與同行的各項能力進行嚴格評估後選擇了 DISCO。 DISCO 憑藉其強大的技術，能夠快速處理大型資料集和複雜的審查工作流程，脫穎而出。對我們而言，這是一次卓越的合作，也是 DISCO 全球影響力和覆蓋範圍的完美體現。

Now let me turn to R&D. Last earnings call, we discussed DISCO AI and how our AI capabilities are integrated into our platform and products. We discussed key features powered by AI, such as topic clustering with automatic indexing, predicted PAG and cross-matter AI. We also introduced Cecelia, our integrated AI chatbot for large-scale e-discovery. We continue to believe that our decade-long investment in our AI lab and in AI feature engineering, the private data that we have attracted to our platform, the fact that our platform is already the system of engagement for a variety of legal workflows that precede and follow the use of AI, and the trust we have earned in the market as a company that productizes cutting-edge technology for legal use cases in a reliable, user-friendly and secure way, all position us well to lead the legal industry's adoption of AI.

現在我想談談研發方面。在上一次財報電話會議上，我們討論了DISCO AI以及我們的人工智慧功能如何整合到我們的平台和產品中。我們重點介紹了人工智慧驅動的關鍵功能，例如自動索引的主題聚類、預測PAG（公共事務分析）和跨領域人工智慧。我們還推出了Cecelia，一款用於大規模電子取證的整合式人工智慧聊天機器人。我們仍然相信，過去十年對人工智慧實驗室和人工智慧特徵工程的投入、我們平台吸引的私有數據、我們的平台已成為人工智慧應用前後各種法律工作流程的交互系統，以及我們作為一家以可靠、用戶友好和安全的方式將尖端技術產品化應用於法律領域的公司所贏得的市場信任，所有這些都使我們有能力引領法律行業採用人工智能。

While investment in AI is important, it is also important that we continue to deepen our core non-AI product capabilities. We released 3 key features in this category this quarter, all of them long demanded by our existing customer base. First is Dynamic Threading. In a typical e-mail chain, later messages contain copies of earlier messages. When reviewing such an e-mail chain, it is useful to identify the e-mails that contain unique content and suppress the e-mails that are included in other e-mails so that lawyers do not waste time reviewing the same content multiple times.

雖然投資人工智慧很重要，但我們也必須持續深化核心的非人工智慧產品能力。本季度，我們發布了該領域的三個關鍵功能，這些都是現有客戶長期以來一直期待的功能。首先是動態線程。在典型的電子郵件鏈中，後續郵件通常會包含先前郵件的副本。在查看此類郵件鏈時，識別包含獨特內容的郵件並封鎖其他郵件中包含的重複內容非常有用，這樣律師就不會浪費時間多次查看相同的內容。

For a long time, DISCO has had the capability to limit reviews to e-mails with unique content, often called inclusive e-mails. But DISCO has identified inclusive e-mails on a global basis, considering all e-mails in a given review database. In some reviews, customers prefer to identify e-mails with unique content from a subset of documents. For example, the documents that fall within a certain date range. Dynamic Threading allows customers to identify e-mails with unique content in arbitrary subsets of the documents and to do so dynamically. That is in real time as users set up review statements in DISCO Ediscovery. With Dynamic Threading, customers can for example define a review universe using complex searches by keyword, date, or AI predictive tags, then reduce that review universe by identifying e-mails that contain unique content and suppressing other e-mails. This allows customers to further limit review population and thereby accelerate the process of legal document review.

長期以來，DISCO 具備將審查範圍限定於包含獨特內容的電子郵件的功能，這些郵件通常被稱為「包含性郵件」。但 DISCO 一直以來都是在全球範圍內識別包含性郵件，即考慮給定審查資料庫中的所有郵件。在某些審查中，客戶更傾向於從特定文件子集中識別包含獨特內容的郵件。例如，特定日期範圍內的文件。動態執行緒功能可讓客戶在任意文件子集中動態識別包含獨特內容的郵件。也就是說，使用者在 DISCO 電子取證系統中設定審查聲明時，系統會即時執行此操作。透過動態執行緒功能，客戶可以使用關鍵字、日期或 AI 預測標籤等複雜搜尋來定義審查範圍，然後透過識別包含獨特內容的郵件並排除其他郵件來縮小審查範圍。這使得客戶能夠進一步縮小審查範圍，從而加快法律文件審查流程。

Another exciting product release this quarter is In-App Translation. This functionality allows customers to translate documents between over 60 different languages right in the DISCO platform. Today, lawyers tend to use either expensive third-party translation services or online translation features intended for consumer use cases that, while free and convenient, may leak private data to translation providers. With In-App Translation, lawyers can translate documents with the click of a button and do so securely with none of their data leaving the DISCO platform.

本季另一項令人興奮的產品發佈是應用程式內翻譯功能。此功能可讓客戶直接在 DISCO 平台上翻譯 60 多種不同語言的文件。目前，律師通常要么使用昂貴的第三方翻譯服務，要么使用面向消費者的線上翻譯功能。這些線上翻譯功能雖然免費便捷，但可能會將私人資料外洩給翻譯服務提供者。有了應用程式內翻譯功能，律師只需點擊一個按鈕即可安全地翻譯文檔，所有資料都不會離開 DISCO 平台。

We also released the Cloud Connector for Office 365 e-mail. This allows customers to ingest e-mails directly from Microsoft Outlook with no intermediate collection or download steps. Today, lawyers frequently have to export data and then repeat the process for any subsequent collections. With the Outlook Cloud Connector, customers can ingest Ediscovery data themselves with the data flowing directly from Microsoft to DISCO. As more corporate data moves to the cloud, we believe the direct connectors like this will become a more and more common way of securely collecting data for legal matters. These connectors build on our Hold capabilities, which already allow for preservation in place in a variety of cloud systems including Office 365.

我們也發布了適用於 Office 365 電子郵件的雲端連接器。此連接器允許客戶直接從 Microsoft Outlook 匯入電子郵件，無需任何中間的收集或下載步驟。目前，律師經常需要匯出數據，然後在後續數據收集過程中重複此過程。透過 Outlook 雲端連接器，客戶可以自行匯入電子取證數據，數據直接從 Microsoft 流向 DISCO。隨著越來越多的企業資料遷移到雲端，我們相信這類直接連接器將成為越來越普遍的、安全收集法律事務資料的方式。這些連接器基於我們的「保留」功能，該功能已支援在包括 Office 365 在內的各種雲端系統中進行就地資料保留。

Now let me share our progress on Cecelia. We are on track to have Cecilia generally available to our customers by the end of this year. In Q2, we began piloting Cecelia with a select customer group. The feedback we have been receiving has been overwhelmingly positive. Cecelia is able to rapidly answer specific questions based on data contained in customers' private databases while citing specific documents and document experts to support her answers. In one instance, Cecelia found an important document that the legal team had not found in their original review using traditional review methods. An associate on a separate legal team mentioned that Cecelia would have saved their client thousands of dollars and saved the associate many hours of document review. This is the kind of impact we are aiming to have.

現在讓我來分享一下Cecelia的最新進展。我們正按計劃推進，爭取在今年年底前將Cecelia全面推向市場。第二季度，我們開始在部分客戶群中試用Cecelia。目前收到的回饋非常正面。 Cecelia能夠根據客戶私有資料庫中的資料快速解答特定問題，並引用相關文件和專家意見來佐證其答案。例如，Cecelia曾發現一份重要的文檔，而法務團隊在使用傳統審核方法時並未發現。另一位法務團隊成員表示，如果當時使用了Cecelia，不僅能為客戶節省數千美元，還能為他節省大量文件審核時間。這正是我們希望達到的效果。

We believe Cecelia will be a big improvement for our customers and look forward to continuing to expand our Cecilia user base in the coming months.

我們相信 Cecelia 將為我們的客戶帶來很大的改進，並期待在接下來的幾個月中繼續擴大 Cecilia 的用戶群。

We have noticed that our approach to AI is different from that of many of our competitors in that we are LLM agnostic. We believe that as the years pass and technology matures, there will be many winning LLMs with different strengths, weaknesses and optimal use cases. We have engineered our AI platform so that we can use different models for different tasks, including both internal models and third-party models. We believe this flexibility, rather than going all in on a single LLM or LLM provider, will give us an advantage in bringing the best product capabilities to market and doing so efficiently. We look forward to announcing our next set of AI capabilities in the coming quarters. We are happy with the progress we made this quarter and all of our team's accomplishments. With that, I will turn it over to Michael.

我們注意到，我們與許多競爭對手在人工智慧方面採取的方法不同，我們對LLM（生命週期管理）持開放態度。我們相信，隨著時間的推移和技術的成熟，未來會出現許多各具優勢、劣勢和最佳應用場景的優秀LLM。我們精心設計了人工智慧平台，使其能夠針對不同的任務使用不同的模型，包括內部模型和第三方模型。我們相信，這種靈活性，而非完全依賴單一的LLM或LLM供應商，將使我們能夠更有效率地將最佳產品功能推向市場。我們期待在接下來的幾季發布下一批人工智慧功能。我們對本季取得的進展以及團隊的所有成就感到滿意。接下來，我將把發言權交給Michael。

Thank you, Kiwi. In Q2 2023, revenue was $34.3 million. Our year-over-year growth in the quarter is attributable to a rebound in our Review usage. In Q2, we saw the highest quarterly Review revenue since Q1 of 2022. We are seeing improvement in our overall go-to-market activity, and we are optimistic about the second half of the year.

感謝 Kiwi 的支持。 2023 年第二季度，我們的營收為 3,430 萬美元。本季年增率主要得益於評論功能使用量的回升。第二季度，我們的評論功能營收創下自 2022 年第一季以來的最高紀錄。我們的整體市場推廣活動正在取得進展，對下半年充滿信心。

In discussing the remainder of the income statement, please note that unless otherwise specified, all references to our gross margin, operating expenses, and net loss are on a non-GAAP basis. Adjusted EBITDA is also a non-GAAP financial measure. Our gross margin in Q2 was 74%. As we mentioned before, our gross margins fluctuate from period to period based on the nature of our customers' usage. For example, the amount and types of data invested and managed on our platform. We expect gross margin to continue to be within the band we've historically seen.

在討論損益表的其餘部分時，請注意，除非另有說明，所有提及的毛利率、營業費用和淨虧損均採用非公認會計準則 (非GAAP)。調整後 EBITDA 也是非GAAP財務指標。我們第二季的毛利率為74%。正如我們之前提到的，毛利率會根據客戶使用情況的不同而有所波動。例如，客戶在我們平台上投入和管理的資料量和資料類型。我們預計毛利率將繼續保持在歷史水平範圍內。

Sales and marketing expense for Q2 was $16.2 million or 47% of revenue compared to 52% of revenue in Q2 of the prior year. This represents a decrease of $1.3 million in the quarter year-on-year. The decrease was primarily driven by a decrease in sales and marketing personnel. Research and development expense for Q2 was $10.5 million or 31% of revenue compared to 39% of revenue in Q2 of the prior year. This represents a decrease of approximately $2.6 million in the quarter year-on-year. This decrease was primarily driven by an increase in capitalized development costs associated with our AI investment efforts and a reduction in research and development personnel.

第二季銷售和行銷費用為1,620萬美元，佔營收的47%，去年同期為52%。這比去年同期減少了130萬美元。減少的主要原因是銷售和行銷人員減少。第二季研發費用為1,050萬美元，佔營收的31%，去年同期為39%。這比去年同期減少了約260萬美元。減少的主要原因是與人工智慧投資相關的資本化開發成本增加以及研發人員減少。

General and administrative expense in Q2 was $7.3 million or 21% of revenue compared to 24% of revenue in Q2 of the prior year. This represents a decrease of over $0.7 million in the quarter year-on-year. This decrease was primarily driven by lower costs related to reduced professional services fees through the renegotiation or termination of vendor contracts.

第二季一般及行政費用為730萬美元，佔營收的21%，去年同期為24%。比去年同期減少了70多萬美元。費用減少的主要原因是，透過重新談判或終止供應商合同，降低了專業服務費用，從而減少了相關成本。

Operating loss in Q2 was negative $8.5 million, representing an operating margin of negative 25% compared to negative 39% in Q2 of the prior year. In total, our Q2 operating expenses were over $4.6 million lower than Q2 of the prior year, representing an approximate 12% reduction in operating expenses.

第二季營業虧損為850萬美元，營業利益率為-25%，去年同期為-39%。第二季營業總支出較去年同期減少超過460萬美元，降幅約12%。

Adjusted EBITDA was negative $7.4 million in Q2 and adjusted EBITDA margin of negative 22% compared to an adjusted EBITDA margin of negative 37% in Q2 of the prior year. Net loss in Q2 was $6.5 million or negative 19% of revenue compared to a net loss of $13.5 million or negative 40% of revenue in Q2 of the prior year. Net loss per share for Q2 was $0.11 per share compared to $0.23 per share in Q2 of the prior year.

第二季調整後 EBITDA 為負 740 萬美元，調整後 EBITDA 利潤率為負 22%，而上年同期調整後 EBITDA 利潤率為負 37%。第二季淨虧損為 650 萬美元，佔營收的 19%，而上年同期淨虧損為 1,350 萬美元，佔營收的 40%。第二季每股淨虧損為 0.11 美元，而上年同期每股淨虧損為 0.23 美元。

Turning to the balance sheet and cash flow statement, we ended Q2 with $178.9 million in cash and tax equivalents. Operating cash flow in the first half of 2023 was negative $21.8 million compared to negative $22.2 million in the same period of the prior year.

從資產負債表及現金流量表來看，我們第二季末的現金及稅項等價物為1.789億美元。 2023年上半年的經營現金流為負2,180萬美元，而上年同期為負2,220萬美元。

Now turning to the outlook, for Q3 2023, we are providing revenue guidance in the range of $33 million to $35 million and adjusted EBITDA guidance in the range of negative $8 million to negative $6 million. For fiscal year 2023, we are reiterating our prior revenue guidance of $135 million to $145 million and raising our adjusted EBITDA guidance to a range of negative $34 million to negative $30 million.

現在來看展望，對於2023年第三季度，我們預計營收將在3,300萬美元至3,500萬美元之間，調整後EBITDA預計在-800萬美元至-600萬美元之間。對於2023財年，我們重申先前的營收預期，即1.35億美元至1.45億美元，並將調整後EBITDA預期上調至-3,400萬美元至-3,000萬美元之間。

Now I would like to turn the call over to the operator to open up the line for Q&A. Operator?

現在我想把電話轉給接線員，以便進行問答環節。接線生？

(Operator Instructions) Your first question comes from the line of Tyler Radke with Citi.

（操作員說明）您的第一個問題來自花旗銀行的泰勒拉德克。

Kiwi, I wanted to start off with your comments just on the pipeline generation. It sounds like you're seeing an uptick in leads. And I'm wondering if you could just kind of comment on the nature of those and how you're expecting that to progress over the coming quarters? Just how you see those, sales cycle length, and then any thoughts on conversion and could that potentially lead to more of an accelerating revenue growth profile as we head into 2024?

Kiwi，我想先談談你對銷售通路開發的看法。聽起來你那邊的銷售線索數量有增加。我想請你談談這些線索的性質，以及你預計未來幾季的發展趨勢？你如何看待這些線索、銷售週期長度，以及轉換率，還有，這些因素是否有可能在2024年推動營收加速成長？

We're really pleased by the performance of the pipeline. And I've talked about it on the past few earnings calls, looking at how well our new team members are ramping across each step of the funnel, from SDR and other kinds of lead generation through to our inside sales and field sales teams closing deals, and then our CSM team working to identify opportunities to expand existing customers. Now the numbers we shared today, on a year-over-year basis the meetings were up 30%, and near-term opportunities were up 20%. And we're continuing to enjoy, despite that broader pipeline, the same elevated win rates that we've been enjoying since the time of the IPO. Those deals are flowing through all the way to the end. I think you can also see this in the continued growth that we've posted in overall customer count, which is now up to 1,431. These are some of the things that give us belief that there are green shoots in terms of growth going forward.

我們對銷售通路的表現非常滿意。在過去的幾次財報電話會議上，我都提到過這一點，我們新團隊成員在銷售漏斗的各個環節都表現出色，從銷售開發代表 (SDR) 和其他類型的線索挖掘，到內部銷售和現場銷售團隊完成交易，再到客戶成功經理 (CSM) 團隊努力尋找展現客戶的機會。今天我們公佈的數據顯示，與去年同期相比，會議數量增加了 30%，近期商機數量增加了 20%。儘管銷售管道更加多元化，但我們仍然保持著自 IPO 以來一直保持的高成交率。所有交易都順利完成。我認為，您也可以從我們客戶總數的持續成長中看出這一點，目前我們的客戶總數已達到 1431 家。這些都讓我們相信，未來的成長動能良好。

And maybe a follow-up for Michael on the green shoots. If I take kind of the implied Q4 guidance with the updated guide on Q3 and the full year guidance, it does imply a pretty strong sequential increase into Q4, both on a quarter-over-quarter and year-over-year basis. Could you just talk about what's giving you the confidence in that Q4? Whether it's maybe some large Review cases or maybe it's a reflection of some of the pipeline commentary Kiwi just hinted at?

或許可以就復甦跡象向麥可追問一下。如果我把第四季度業績指引與第三季度更新後的指引以及全年指引結合起來考慮，確實可以推斷出第四季度環比和同比業績將出現相當強勁的增長。您能否談談是什麼讓您對第四季業績如此有信心？是因為一些大型審查案例，還是因為 Kiwi 剛才提到的一些專案進度？

Tyler, thanks, it's a good question. It's really related to the pipeline. And also, just -- we're providing full year guidance in the range of $135 million to $145 million and also Q3 guidance. We feel really good about where the business is and we feel really optimistic about the second half.

泰勒，謝謝，問得好。這確實與產品線有關。另外，我們給出的全年業績預期在1.35億美元至1.45億美元之間，第三季業績預期也一樣。我們對公司目前的業務狀況非常滿意，對下半年也充滿信心。

Your next question comes from the line of Jackson Ader with MoffettNathanson.

你的下一個問題來自 Jackson Ader 與 MoffettNathanson 的對話。

The customer count I think is growing faster maybe than we expected, but average revenue per customer, the other side of that coin, is a little bit weaker. I'm curious, is this because new customers that are coming on there today versus a few years ago are smaller? Or is it due to some of the larger customers may be putting pricing pressure on you? I'm curious what's driving that.

我認為客戶數量成長速度可能比預期更快，但另一方面，每位客戶的平均收入卻略顯疲軟。我很好奇，這是因為如今新客戶的規模比幾年前還要小嗎？還是因為一些大客戶對你們的價格施加了壓力？我很想知道背後的原因。

Yes, it's 2 dynamics. First, starting with very big customers, that's where we have experienced most of the headwinds around customers seeking to reduce their overall spend. And as a consequence, reduce usage or change the nature of their usage on our platform to try to get that spend down. Now on the positive side, we've continued to add lots of new customers, but typically a DISCO customer starts relatively small and then grows over time. In the past, we've talked about kind of 3 to 5-year ramps to maturity for new logos. Sometimes it goes faster, especially when the new logo is somebody who has already adopted DISCO at a previous company. But it's still very much a land-and-expand business.

是的，這其中包含兩個面向。首先，從大客戶的角度來看，我們遇到的阻力主要來自那些尋求降低整體支出的客戶。因此，他們會減少或改變在我們平台上的使用方式，以期降低成本。積極的一面是，我們持續新增了大量客戶，但通常情況下，DISCO 的客戶起步規模較小，然後隨著時間的推移逐漸發展壯大。過去，我們曾提到新客戶需要 3 到 5 年的時間才能達到成熟階段。有時速度會更快，尤其是在新客戶之前已經在其他公司使用過 DISCO 的情況下。但總的來說，這仍然是一個循序漸進、逐步擴展的業務模式。

And I guess just following up on that, the let's say the type of customer that you're landing or adding as a net new customer today, do they still have the same type of 3 to 5-year opportunity as to customers that you were landing say 2, 3, 5 years ago?

我想就此展開討論，假設你今天獲得或新增的這類客戶，他們是否仍然擁有與你 2、3、5 年前獲得的客戶相同的 3 到 5 年的合作機會？

Yes. If anything, that has actually improved in our business. Over the last 3 to 5 years, we've moved steadily upmarket. We gave some examples in the customer stories part of our script. Some customers, including one very new customer who in less than a year got to material size. Many of our newer logos are large multinationals or large law firms that provide big expansion opportunity. We of course continue to sign up customers all along the spectrum. But if anything, I would say the average wallet potential of the new customer has gone up over 5 years, not down.

是的。事實上，我們業務的狀況反而有所改善。過去三到五年間，我們穩步向高端市場轉型。我們在客戶案例部分舉了一些例子。一些客戶，包括一位新客戶，在不到一年的時間內就發展到了重要的規模。我們許多新客戶都是大型跨國公司或大型律師事務所，這為我們提供了巨大的發展機會。當然，我們也一直在拓展各個層級的客戶。但總的來說，我認為新客戶的平均消費潛力在過去五年裡不降反升。

Your next question comes from the line of Derrick Wood with TD Cowen.

你的下一個問題來自德里克·伍德和TD·考恩的連線。

Michael, I know you said gross margins bounced around a bit, but this was one of the first times we've had that kind of contracting quarter. And I'm just curious, does that reflect some of the investments on the generative AI and large language models that are starting that obviously have some added cost to it? Or are there other factors to call out? I guess now that you've had a little more time building Cecilia, any updated views on the potential impact on gross margins once a lot of this goes into production?

邁克爾，我知道你說過毛利率有些波動，但這是我們第一次遇到如此大幅下滑的季度。我很好奇，這是否反映了我們在生成式人工智慧和大型語言模型方面的一些投資，這些投資顯然會增加成本？還是有其他因素要考慮？我想現在你已經花了更多時間開發 Cecilia，對於這些功能投入生產後可能會對毛利率產生的影響，你有什麼新的見解嗎？

The margin profile that we've talked about in the past in terms of the bands that we've historically seen over the last 4 to 8 quarters is where we expect the future to be. The investments that we're making in AI are not having an impact on that band, and we don't expect that they will in the future.

我們過去曾討論過，過去4到8個季度以來，利潤率一直保持在一定的區間內，而我們預計未來的利潤率也將維持在這個區間內。我們在人工智慧領域的投資目前不會對這個區間產生影響，我們預計未來也不會。

Okay. Kiwi, I'm curious your thoughts on vector search versus keyword search. And as you think about trying to get more contextual answers with natural language queries, are you thinking about it? Kind of embracing more vector search capabilities? Or what's your view on that technology?

好的，Kiwi，我很好奇你對向量搜尋和關鍵字搜尋的看法。當你考慮用自然語言查詢來獲得更多上下文相關的答案時，你會考慮採用向量搜尋嗎？或者你對這項技術有什麼看法？

Absolutely. We're big believers in vector search technology. And this is one of those things that has suddenly become in vogue but is not at all new, right? This is something that we've worked on for many, many years, that's been around for many, many years, and that is a key component of some of the feature functionality that we're delivering to clients. We're big believers in vector search. I will say though, some people think that vector search will replace the historical kinds of search that are perhaps more precise or at least more transparent to the user about what the search is returning. We think vector search and technologies like it are going to be a supplement to, not a replacement of, more traditional ways of searching.

當然。我們非常看好向量搜尋技術。這項技術雖然突然流行起來，但其實並非什麼新鮮事物，對吧？我們已經為此努力了很多年，它本身已經存在很多年了，而且是我們為客戶提供的某些功能的核心組成部分。我們堅信矢量搜尋的潛力。不過，有些人認為向量搜尋會取代傳統的搜尋方式，而傳統的搜尋方式可能更精確，或至少對使用者來說更透明，能夠更清楚地顯示搜尋結果。我們認為向量搜尋及其類似技術將會是傳統搜尋方式的補充，而不是取代。

Your next question comes from the line of Scott Berg with Needham.

你的下一個問題來自 Scott Berg 與 Needham 的對話。

I guess I've got a couple here. Kiwi, you talked about some of the cost optimizations that your customers still kind of had in the quarter. How should we think about maybe the magnitude or size of those reductions relative to what you've seen over the last maybe 2 to 4 quarters in this macro backdrop?

我這裡有幾個問題。 Kiwi，你提到你的客戶在本季仍然採取了一些成本優化措施。在當前的宏觀經濟背景下，我們應該如何看待這些成本削減的幅度或規模，與過去兩到四個季度的情況相比呢？

I think they're consistent with what we've seen over the last 2 to 4 quarters. Neither larger nor smaller. The problem is that it's different customers. Different customers go through this process at different times depending on their internal budget cycles and prioritization and so on. We're still rolling through the customer base as different customers take a sharper eye on costs.

我認為這與過去兩到四個季度的情況一致，既沒有擴大也沒有縮小。問題在於客戶群不同。不同的客戶會根據其內部預算週期、優先順序等因素，在不同的時間經歷這個過程。隨著不同客戶更加關注成本，我們仍在逐步調整客戶群。

Got it. Helpful. And then I know AI is a big topic. You guys are certainly making a lot of investments with Cecilia and the demo that I recently saw that was very compelling. But is it popping up yet in your sales cycles and your sales processes? Maybe not Cecelia specifically, although it could be, but just the use of AI in general within your platform?

明白了，很有幫助。我知道人工智慧是個熱門話題。你們在 Cecilia 上投入了很多，我最近看到的演示也很有說服力。但是，人工智慧是否已經融入你們的銷售週期和銷售流程中了呢？也許不是專門針對 Cecelia，雖然以後可能會用到，而是你們平台整體上對人工智慧的應用情況如何？

Absolutely. This is our core historical strength, with AI capabilities that have been built into our platform for many years. Those AI capabilities, they're a part of virtually every presentation that we do about the platform because they're a key part of the way that we deliver value to our clients by automating or greatly accelerating a growing range of legal work. The newer AI things, Cecelia as well as some other capabilities that we look forward to announcing shortly, we've already begun demonstrating those quite regularly to a range of clients.

當然。人工智慧是我們的核心優勢，多年來我們一直將人工智慧功能融入我們的平台中。這些人工智慧功能幾乎是我們每次平台演示的核心內容，因為它們是我們為客戶創造價值的關鍵所在——透過自動化或大幅加速日益廣泛的法律工作。至於我們即將推出的Cecelia等新型人工智慧功能，我們已經開始定期向各類客戶進行展示。

As we talked about in our prepared remarks, we now have Cecelia live in private access for real clients on actively litigated client matters, and we've got clients deriving tremendous value. One of the cool things we like to see is when clients use the share capability in our products. You can find a document, share it, and then put a note to your colleagues about what it is you found. And there's a ton of those where people are going in, they're sharing a document, they're saying, oh, I was trying this cool AI thing and look what Cecelia found. And so this is, I think, only going to grow as a focus area in customer conversations, both with new prospects and existing customers.

正如我們在準備好的發言稿中提到的，我們現在為正在處理訴訟案件的真實客戶提供了Cecelia的私密訪問權限，客戶從中獲得了巨大的價值。我們樂於見到客戶使用我們產品的共享功能。您可以找到一份文檔，分享出去，然後給同事留言說明您發現了什麼。我們經常看到這樣的場景：使用者分享文件後說：「哦，我試用了這個很棒的AI功能，看看Cecelia發現了什麼！」我認為，這將會成為我們與客戶溝通中越來越重要的一個領域，無論是與潛在客戶還是現有客戶。

Your next question comes from the line of Parker Lane with Stifel.

你的下一個問題來自帕克巷與史蒂費爾的合作系列。

Kiwi, you referenced the recent marketing investments you've made as an accelerant to inbound lead volume. I think that doubled year-over-year. Can you take us under the hood of exactly where you're putting those incremental marketing dollars to work? And how much sustainability do you see in the inbound lead volume throughout the remainder of the year?

Kiwi，你提到最近加大了行銷投入，認為這能加速提升潛在客戶數量。我記得這個數字比去年同期翻了一番。可以詳細說說你​​把這些新增的行銷預算都用在了哪些方面嗎？你覺得今年剩餘時間裡，潛在客戶數量的成長能持續多久？

It's a mix of things. I'm a big believer that marketing programs are interconnected. In the sense that for example when you do brand marketing, it improves the performance of your digital performance marketing, it improves the turnout at events, it improves the win rates and that sort of thing. The biggest new addition is of course the launch of our Law Better campaign and the Lady J ads that maybe you've seen. If not, I encourage you to take a look. That's got tremendous reception with our customer base. Anecdotally, when we talk to our reps, they've started to come into meetings where not only has the customer heard of us before, but they've seen the ad.

這其中有很多因素。我堅信行銷活動是相互關聯的。例如，品牌行銷可以提升數位行銷的效果，提高活動參與度，提高成交率等等。當然，最大的新舉措是我們推出了「Law Better」活動和Lady J的廣告，您可能已經看過了。如果沒有，我強烈建議您去看看。這些廣告在我們的客戶群中反應熱烈。據我們了解，我們的銷售代表在開會時發現，客戶不僅聽說過我們，而且還看過我們的廣告。

They like the ad, they talk about the ad, and it can be the beginning of the customer to understand not just our products and offerings, but who we are as a company. That we're a company that cares about the law, that's trying to use technology to make the law work better, and so there can be that kind of alignment in spirit and intent with our customers before we dive into a more detailed discussion about the functionality we can provide and the results that we can drive. I think the big brand campaign is one contributor. But we've also done a lot of work optimizing things like performance marketing, digital marketing, social marketing, and our field events, both large at industry conferences and small local events that we do in different regions to provide opportunities for DISCOvians to connect with our customers. But also, for large existing customers to connect with prospects. That kind of old-fashioned social selling I think is still very effective today.

他們喜歡這則廣告，他們會談論這則廣告，這或許能讓客戶開始了解我們的產品和服務，以及我們這家公司的理念。我們是一家關注法律、致力於運用科技讓法律更好運作的公司。因此，在深入探討我們所能提供的功能和所能帶來的成果之前，我們就能與客戶在精神和目標上達成共識。我認為大型品牌推廣活動是其中一個重要因素。但我們也做了很多工作來優化效果行銷、數位行銷、社群媒體行銷以及我們的離線活動，包括業界大會上的大型活動和我們在不同地區舉辦的小型本地活動，旨在為DISCO員工提供與客戶交流的機會，同時也為現有大客戶與潛在客戶建立聯繫創造機會。我認為這種傳統的社交銷售方式在今天仍然非常有效。

And I think we're approaching the 18-month mark of bringing Hold and Request to the platform. Curious if you could just talk about the cross-sell efforts there, how much interest you're seeing in both of those tools and the growth algorithm, how much of that is baked in from these tools in the 2023 outlook and beyond?

我認為我們推出 Hold 和 Request 功能已經快 18 個月了。我想請您談談交叉銷售方面的情況，您觀察到用戶對這兩個工具以及成長演算法的興趣程度，以及在 2023 年及以後的展望中，這些工具能帶來多少實際收益？

Yes, we're really pleased with the reception that those tools have for 2 reasons. One is just it gives customers more places to get started on our platform and more ways to expand. But second, it's that with enterprise customers where we sell directly to the General Counsel, as we've talked about on prior earnings calls, that's been a very big growth driver in terms of new logos and frequently a way those folks will want to get started is Hold and Request. Now they may not wind up buying Hold and Request first. They might start with Ediscovery or Review or something else.

是的，我們對這些工具的受歡迎程度感到非常滿意，原因有二。首先，它們為客戶提供了更多入門我們平台的方式，以及更多擴充功能。其次，正如我們在先前的財報電話會議上提到的，對於我們直接向總法律顧問銷售的企業客戶而言，這已成為新客戶成長的重要驅動力，而這些客戶通常會選擇「Hold and Request」作為入門工具。當然，他們最終可能不會先購買“Hold and Request”，而是先購買“Ediscovery”、“Review”或其他工具。

Many of them do start with Hold and Request, but very often, the conversation starts with General Counsel's desire to have a product like Hold or Request that can help them comply with incoming legal demands, conduct preservation in place, and also manage their organization's overall migration to the cloud. We've been pleased with Hold and Request. We're actively investing in those products. You'll hear us on earnings calls talk about future enhancements, integrations between those products and the rest of our product suite, and we are overall pleased with the trajectory these products have demonstrated.

許多客戶確實會從 Hold 和 Request 開始了解產品，但通常情況下，對話的開端是總法律顧問希望擁有類似 Hold 或 Request 的產品，以幫助他們應對即將到來的法律要求、進行現場資料保全，並管理組織整體向雲端的遷移。我們對 Hold 和 Request 的表現非常滿意，並且正在積極投資這些產品。在財報電話會議上，我們會談到未來的功能增強、這些產品與我們其他產品套件的集成，總的來說，我們對這些產品的發展軌跡感到滿意。

Our next question comes from the line of Mark Schappel with Loop Capital.

我們的下一個問題來自 Loop Capital 的 Mark Schappel。

Kiwi, is it fair to assume that the Ediscovery product is still generating about 80% of revenues in this quarter?

Kiwi，我們可以合理地假設，本季電子取證產品仍然貢獻了約 80% 的收入嗎？

We don't disaggregate revenue by product line, but I can say that Ediscovery still represents by far the largest share of our revenue.

我們不按產品線細分收入，但我可以肯定地說，電子取證仍然占我們收入的最大份額。

Okay, great. And then I just wondered if you could just talk a little bit about the just kind of relative growth rates of some of the other products, Case Builder or Legal Hold, that you're seeing, how they're coming along.

好的，太好了。然後我想請您談談其他一些產品，例如 Case Builder 或 Legal Hold，它們的相對增長率以及發展。

Some of the other products enjoy smaller bases, and as a consequence, have higher growth rates. In terms of color, let's focus on Case Builder, which you mentioned. I'm really pleased with the growing adoption of Case Builder. We're seeing tremendous growth in terms of the number of matters on the platform, the number of users using Case Builder, and the number of each of the sort of the things that the platform stores. We track number of depositions in Case Builder, number of timelines and chronologies that have been built, number of events that have been created. And all of those metrics for usage are showing very, very strong growth. In addition, we're going to have some announcements coming shortly around building some of this new generative AI technology into Case Builder and other parts of our product suite, and we think those will only accelerate the growth of those products.

其他一些產品的基數較小，因此增長率更高。說到色彩方面，我們將重點放在您提到的 Case Builder。我對 Case Builder 的日益普及感到非常高興。我們看到平台上的案件數量、使用 Case Builder 的用戶數量以及平台存儲的各類數據都實現了顯著增長。我們追蹤 Case Builder 中的證詞數量、已建立的時間軸和時間序列數量以及已建立的事件數量。所有這些使用指標都呈現出非常強勁的成長勢頭。此外，我們即將發布一些公告，介紹如何將一些新的生成式人工智慧技術整合到 Case Builder 和我們產品套件的其他部分，我們相信這將進一步加速這些產品的成長。

Your next question comes from the line of DJ Hynes from Canaccord.

你的下一個問題來自 Canaccord 的 DJ Hynes。

Kiwi, what has the feedback been on proposed pricing mechanisms for Cecilia in your early customer conversations? And I'm wondering kind of how that's informing your strategy as you think about general availability.

Kiwi，在你們早期與客戶的溝通中，對於Cecilia的定價機制，他們有什麼回饋？我想知道這些回饋是如何影響你們考慮全面上市策略的。

We're going to start having the kind of great bulk of those conversations in the coming quarter. In particular, there's a big industry conference coming up called the ILTA at which some of these conversations will start happening. I think it's early days to provide feedback on pricing. Our goal is, over the course of Q3 and Q4, to settle on what the at least call it first year's pricing for the AI platform and AI capabilities will wind up being, and we'll provide an update on our annual earnings call about our thoughts on what AI pricing will be. At a high level, we believe the right mix, and I think I talked about this a bit on the last earnings call, is some mix of a platform-based AI fee with usage-based billing on top for certain AI capabilities.

我們將在下一季開始進行大部分此類討論。特別是，在即將召開的大型產業會議ILTA上，我們將開始進行一些相關討論。我認為現在就定價提供回饋還為時過早。我們的目標是在第三季和第四季確定人工智慧平台和人工智慧功能的第一年定價，並在年度財報電話會議上更新我們對人工智慧定價的想法。總的來說，我們認為合適的方案（我在上次財報電話會議上也略有提及）是平台人工智慧費用加上某些人工智慧功能的按使用量計費。

Okay. Got it. And then, Michael, just given the timing of your Q2 restructuring, is it fair to assume that the magnitude of cost savings are not fully reflected in Q2 run rate OpEx?

好的，明白了。那麼，邁克爾，考慮到你們第二季度重組的時間安排，是否可以合理地假設成本節約的幅度尚未完全反映在第二季度的營運支出中？

Yes.

是的。

Our next question comes from the line of Koji Ikeda with Bank of America.

我們的下一個問題來自池田浩二與美國銀行的合作。

Listening to the prepared remarks, it sure sounds like you had some Review cases that came in better than expected into Q2. Just kind of taking a step back, and when you originally guided to Q2 on the last earnings call, was there any Review incorporated in that guide? Just trying to understand kind of the puts and takes to the Review performance.

聽了您事先準備好的發言稿，感覺您在第二季度確實有一些複審案例的表現超出了預期。我稍微回顧一下，您在上次財報電話會議上對第二季的業績指引中是否包含了複審案例？我只是想了解複審案例的業績表現有哪些優缺點。

Yes.

是的。

Thanks, Kiwi. And then when looking at -- I guess as a follow-up to a previous question and the annualized ARPU, maybe ask the question in a different way. And I think it would be super helpful to -- super helpful to us to start understanding the underlying kind of new versus expand opportunity. But I do realize that you guys only give net revenue retention on an annual basis. Maybe if you could give it in a qualitative aspect, it would be really helpful. The question is, the net revenue retention in the quarter, was it above or below 100?

謝謝 Kiwi。關於之前提到的年度 ARPU 問題，我想可以換個方式問一下。我覺得這對我們理解新客戶開發機會和現有客戶拓展機會之間的差異非常有幫助。我知道你們只提供年度淨收入留存率。如果能提供定性分析就更好了。問題是，本季的淨收入留存率是高於還是低於 100%？

Well, we only, as you point out, we give the number on an annual basis. But I'm more than happy to provide color, Koji, that may be helpful. I think a couple of things are going on in terms of expansion and retention. First, we still have the falling away of the really big reviews that we had for a sequence of 4 quarters and that now have left. Now we are seeing some green shoots, and this goes to your first question, where we did see Review outperformance. In particular, we had one customer that across a number of reviews it added up to more than $1 million in the quarter. And that's something that we didn't have certainly in the previous quarter. There's that, so Review has shrunk, right? And that is a take from retention.

正如您所指出的，我們只提供年度數據。不過，Koji，我很樂意提供一些細節訊息，或許對您有幫助。我認為在客戶拓展和留存方面，存在一些問題。首先，我們仍面臨連續四個季度的高評價客戶流失的問題。現在我們看到了一些復甦的跡象，這也回答了您的第一個問題，即評價業務的表現確實超出了預期。特別是，我們有一位客戶，其多條評價的總金額在本季超過了100萬美元。這在上個季度是絕對沒有的。所以，評價業務的規模有縮小，對吧？這會影響到客戶留存率。

The other thing that's happening on retention is what we talked about on last earnings call, and I think one of the earlier questions here, which is big customers seeking to manage their overall spend in our platform. Which they do by changing the overall volume of usage or changing the way they use our platform. For example, more aggressively using features like ECA and Vault as opposed to active Review in the Ediscovery product as a way of reducing costs. Offsetting that, we still have the more normal dynamic, especially among our smaller and more medium-sized customers, where justice has been proved throughout the history of DISCO, those customers tend to start relatively small, call it 5 figures of spend, and then grow their spend over time as they grow their usage of the first product they started with and as they adopt more products across the product portfolio.

關於客戶留存，我們上次財報電話會議上討論過的另一個問題是，大客戶正在尋求控制他們在我們平台上的整體支出。他們透過改變整體使用量或改變使用方式來實現這一點。例如，他們會更積極地使用ECA和Vault等功能，而不是像在電子取證產品中那樣進行主動審查，以此來降低成本。同時，我們仍然保持著更正常的動態，尤其是在我們的中小客戶群中。 DISCO的發展歷程已經證明了這一點：這些客戶通常起步規模較小，支出可能在五位數左右，然後隨著他們對最初使用的產品使用量增加，以及他們採用更多產品組合，他們的支出也會逐漸增長。

Our final question comes from the line of Brent Thill with Jefferies.

最後一個問題來自 Jefferies 的 Brent Thill。

This is Luv Sodha on for Brent Thill. I wanted to ask one on the Review side. Kiwi, you mentioned that you now have 60% of reps selling Review products. I guess, are these new sales? Are they starting at a lower volume and then other ramps baked into that? Just any color around the new green shoots around Review.

這裡是 Luv Sodha，替 Brent Thill 傳來訊息。我想問 Review 方面的一位銷售代表。 Kiwi，你提到現在有 60% 的銷售代表在銷售 Review 的產品。我想問的是，這些都是新增的銷售業績嗎？他們是從較低的銷售量開始，然後逐步提高銷售量嗎？我只是想了解一下 Review 這支新晉隊伍的情況。

Sure. I think the way to think about this is, if you have an established sales team, and especially if like DISCO, you were a single product company for many, many years, your sellers get good at selling that one product. And going from 1 to 2 is harder than going from 2 to 3, right? There's a sort of step function to get sellers and to get the market and customers to think of us as a multiproduct company. Or to think of there being many different ways of using our platform rather than a single way of using our platform, that being Ediscovery.

當然。我認為應該這樣想：如果你有一支成熟的銷售團隊，尤其像DISCO這樣多年來只做單一產品的公司，你的銷售人員就會非常擅長銷售那一款產品。從1到2比從2到3難得多，對吧？我們需要循序漸進地讓銷售人員、市場和客戶把我們當作一家多產品公司。或者說，讓他們意識到我們的平台有很多不同的用途，而不僅僅是電子取證這一種用途。

Our success at making that jump from single product to multiproduct is what I'm talking about when I share this stat that now more than 60% of our quota-carrying reps generated Review revenue, almost double the percentage for the first half of last year. This I think is good, not only because it's green shoots for the Review business, but also because it's indicative of our sales team and the market and our customers beginning to make that transition from thinking of DISCO as single product to thinking of DISCO as a platform that can be applied across many different kinds of legal work. And we've definitely seen improvements in the multiproduct attach rate if you will, the percentage of customers who are using more than one product.

我之所以要分享這個數據，正是因為我們成功地實現了從單一產品到多產品銷售的轉型：現在超過 60% 的銷售代表都創造了 Review 收入，幾乎是去年上半年的兩倍。我認為這非常好，不僅因為它預示著 Review 業務的復甦，也表明我們的銷售團隊、市場和客戶都開始轉變觀念，不再將 DISCO 視為單一產品，而是將其視為一個可以應用於多種法律工作的平台。此外，我們也明顯看到了多產品附加率的提升，也就是使用多種產品的客戶比例有所提高。

Got it. That's super helpful. And then just one quick follow-up for Michael. Michael, if you look at the EBITDA guidance for the year, I guess the embedded margin for Q4 is now in the low teens versus negative mid-teens guide previously. Just wondering, are you baking in additional leverage from certain line items and what might that be?

明白了，這很有幫助。還有一個問題想問Michael。 Michael，如果你看一下全年的EBITDA預期，我猜第四季的內含利潤率現在在10%左右，而之前的預期是負15%。我想問一下，你是否在某些項目上計入了額外的槓桿效應？如果是的話，具體是哪些項目呢？

Thanks for the question. As you're aware, we've improved our adjusted EBITDA guidance for the full year and also have guided to Q3 improvement on where you expect that we were going to come out in your models. We obviously -- there's 4 levers that are going to hit those numbers, and it's a combination of revenue, the COGS optimization that we've been working on in terms of working with AWS, also both not just for COGS, but also below the line. We talked about this in the prepared remarks, but just a very aggressive managing our kind of non-staff costs around things like software. And then the fourth is really, and we've talked about this before, globalization and attracting the best talent on a worldwide basis, but on a per unit basis, that is more attractive than what we've had in the past. Those are the levers that will impact our overall numbers.

感謝您的提問。如您所知，我們提高了全年調整後 EBITDA 預期，第三季業績也比您先前在模型中預測的水平有所提升。顯然，有四個關鍵因素將影響這些數字：一是營收成長；二是我們在與 AWS 合作方面持續推進的銷售成本優化，這不僅包括銷售成本，還包括其他方面的成本控制。我們在先前的演講稿中也提到這一點，那就是我們積極控制軟體等非人員成本。第四個因素，也是我們之前討論過的，是全球化以及在全球吸引頂尖人才。就單位成本而言，我們目前的人才吸引力比以往更大。這些因素將對我們的整體業績產生影響。

I will now turn the call back over to Kiwi Camara, Co-Founder and CEO for closing remarks.

現在我將把電話轉回給聯合創始人兼執行長 Kiwi Camara，請他作總結發言。

Thank you for joining us today, and thank you for your interest in DISCO.

感謝您今天加入我們，也感謝您對 DISCO 的關注。

Ladies and gentlemen, that concludes today's call. Thank you for joining. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝各位的參與。現在可以掛斷電話了。