Smartsheet Inc (SMAR) 2018 Q4 法說會逐字稿

Good afternoon.

My name is Chris, and I will be your conference operator today.

At this time, I would like to welcome everyone to Smartsheet Fourth Quarter Fiscal 2019 Earnings Conference Call.

(Operator Instructions)

Aaron Turner, Head of Investor Relations, you may begin the conference.

Thank you, Chris.

Good afternoon, and welcome, everyone, to Smartsheet's Fourth Quarter and Full Year Fiscal 2019 Earnings Call.

We will be discussing the results announced in our press release issued after the market closed today.

With me today are Smartsheet's CEO, Mark Mader; and our CFO, Jennifer Ceran.

Our Chief Product Officer, Gene Farrell, will also be available during the Q&A.

Today's call is being webcast and will also be available for replay on our Investor Relations website at investors.smartsheet.com.

There is a slide presentation that accompanies Jennifer's prepared remarks, which can be viewed in the Events section of our Investor Relations website.

During this call, we will make forward-looking statements within the meaning of the federal securities laws.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends.

These forward-looking statements are subject to a number of risks and other factors including, but not limited to, those described in our SEC filings available on our Investor Relations website and on the SEC website at www.sec.gov.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, our actual results may differ materially and adversely.

All forward-looking statements made during this call are based on information available to us as of today, and we do not assume any obligation to update these statements as a result of new information or future events, except as required by law.

In addition to U.S. GAAP financials, we will discuss certain non-GAAP financial measures.

A reconciliation to the most directly comparable U.S. GAAP measure is available in the presentation that accompanies this call, which can also be found on our Investor Relations website.

With that, let me turn the call over to Mark.

Thanks, Aaron.

Good afternoon, everyone, and thanks for joining us today.

Q4 capped a great year for Smartsheet.

Our work execution platform continues to empower customers through increased agility, collaboration and visibility.

Our brand awareness and leadership in the expanding collaborative work management market continues to strengthen.

Our team is executing well against a common vision, and we remain intensely focused on delivering customer success.

The results we'll share today are reflections of those things.

Q4 revenue grew 58% year-over-year to $52.2 million, bringing the full year revenue to $177.7 million.

We ended the year with over 4.8 million users, including more than 800,000 paid licensed users and nearly 79,000 domain customers.

Our success selling to and expanding our presence in larger customers continues to build as enterprisers seek ways to gain a competitive advantage and digitally transform.

Smartsheet is now present in 75% of the Fortune 500.

The product and solution innovations we've introduced this year and those still to come continue to deepen our role as a mission-critical partner that helps enterprises move from idea to impact fast.

Our success in the enterprise is driving higher retention rates with our customers.

In Q4, our net dollar retention rate grew by 2 percentage points to 134%.

During the quarter, expansion within our base included 40 companies increasing their annual recurring revenue or ARR by more than $50,000 and 9 companies increasing their ARR by more than $100,000.

Notable expansions occurred this quarter at customers such as Home Depot, Abbott Diagnostics, Proterra and PayPal.

Expansion by our customers is fueled through both licensed user growth and attach rates for our capability-based offerings.

More than 700 customers purchased these capability-based products, such as Control Center, Accelerators and Dynamic View in Q4.

One example is Parker Aerospace's Fluid Systems Division.

This quarter they implemented the Smartsheet IT PMO accelerator and had it up and running in less than a month.

By moving project processes from legacy business apps to Smartsheet, Parker has realized efficiency gains throughout each project's life cycle.

With dozens of projects in process at any given time, the IT PMO accelerator provides Parker's decision-makers with enhanced visibility into each project, eliminating the need for status updates and allowing project managers to refocus their energy on executing their most critical work.

The success of these new products is a result of Smartsheet having a deep understanding of our customers' common pain points and their challenges with managing modern work at scale.

The insights developed by our sales and service teams provide us with a unique view into the areas where customers assign significant value.

Our capabilities in this regard and customer feedback we receive continue to strengthen and inform a robust product and solutions pipeline.

In FY '20, we plan to expand our Accelerator portfolio into new solution areas including construction, corporate governance and marketing.

To that end, we acquired TernPro, the makers of Slope, a work execution platform that allows teams to collaborate on and manage creative work.

We've already begun to integrate the Slope technology into the core Smartsheet experience, which will empower our users to provide feedback on creative content and enable a broad set of valuable use cases.

Additionally, the Slope technology will enable the creation of new accelerators for creative teams by the end of this year.

We welcome the TernPro team into the Smartsheet family and look forward to driving even more value to our customers with the combination of Smartsheet and Slope.

Our expansion into newer markets and industries remains on track.

Our newly established London sales office is now in place, and we look forward to the opportunity to bring time zone-appropriate engagement to a greater number of our international customers.

Given the assignment of newly defined territories and the productivity ramp of new reps, we don't expect the material incremental revenue from the office to occur until later in the fiscal year, but we are very confident in the long-term financial impact of our international strategy.

About a month ago, I met with the IT and digital transformation leaders of several federal agencies during a trip to Washington, D.C. These leaders are actively seeking to identify and implement within the unique challenges presented by federal procurement and security requirements the best available cloud solutions that will enable their teams to drive effectiveness and pace of intra- and inter-agency collaboration and to deliver better experiences for citizens.

They were very encouraged about finally gaining access to technologies previously only available to commercial enterprises.

In that context, I'm pleased to report that Smartsheet recently achieved FedRAMP Ready status, an important step towards achieving full FedRAMP authorization, and now has multiple federal agencies, including NOAA, a defense program and a NASA installation participating in the private beta of our gov platform.

Though work remains to be done to gain full FedRAMP authorization, the groundwork that has been laid to achieve this milestone provides us with a solid opportunity to expand the use of Smartsheet among federal employees.

As we scale, it is critically important that we continue to attract and retain world-class talent at all levels of the Smartsheet team.

With that in mind, I'm pleased that Praerit Garg has joined Smartsheet as our Chief Technology Officer and EVP of Engineering.

Having built and led engineering teams at Microsoft and Amazon Web Services, Praerit brings a rare combination of technical management, customer focus and vision that are crucial for this important role.

Under Praerit's and Gene Farrell's leadership, I expect our engineering and product teams will reach new heights as we continue to rapidly evolve our platform and drive additional value for our customers through new offerings.

In closing, I am pleased with our strong Q4, our full year results and the opportunity that exists.

We have a clear vision for where we're headed, and I'm proud of the team we've built to execute against that vision.

Smartsheet's first fiscal year as a public company is now in the rearview mirror, and I'm more excited than ever about what lies ahead.

Jenny?

Thanks, Mark, and welcome, everyone.

As Mark mentioned, we had a strong finish to the year.

Revenue came in at $52.2 million for the quarter, up 58% versus a year ago, and full year revenue reached $177.7 million.

Fourth quarter billings came in at $64.1 million, up 63% versus the same quarter a year ago and finished at $216.6 million for the year.

Our dollar-based net retention rate was 134%, an increase of 2 percentage points versus last quarter, and our average annualized contract value or ACV per domain-based customer grew 50% year-over-year.

Fourth quarter non-GAAP operating loss was $8.5 million as we continued to make investments in our platform and go-to-market capabilities.

And non-GAAP net loss per share was $0.07.

We also delivered for the first time as a public company positive operating and free cash flow of $4 million and $1 million, respectively, and we ended the quarter with a cash balance of $213 million.

Before I discuss fourth quarter results and fiscal year 2020 guidance, let me share a few financial highlights for our fiscal year 2019.

As I mentioned, revenue and billings reached $177.7 million and $216.6 million, respectively, representing year-over-year growth of 60% and 59%.

Fiscal year 2019 non-GAAP operating loss was $38.5 million, and free cash flow was negative $14.9 million.

Both non-GAAP operating margin and free cash flow margin showed year-over-year improvements, and our rule of 40% calculation, which is the sum of our revenue growth plus free cash flow margin, was 52%.

Let me now turn to our quarterly results.

Of our $52.2 million in total revenue, subscription revenue was $46.5 million, a 56% increase versus a year ago.

Services revenue came in at $5.7 million, up 77% versus a year ago and represented 11% of total revenue.

Moving on to metrics.

Our total domain-based customer count at the end of the fourth quarter was 78,959.

We continue to see very strong growth in our larger customers with 6,192 now paying us $5,000 or more per year and 444 now paying us $50,000 or more per year.

These customer segments grew year-over-year by 63% and 135%, respectively, and now represent approximately 66% and 27% of total ACV.

As I mentioned earlier, our average ACV per domain-based customer increased 50% compared to the same period a year ago, reaching $2,454 as customers continued to deploy Smartsheet into more areas across their organization and purchase more capability-based products.

Also as mentioned earlier, our dollar-based net retention rate was 134%, a more than 200 basis point increase from the prior quarter.

The majority of the increase was driven by improvement in the net expansion rate while churn declined nearly 50 basis points and is now below 10%.

As we begin a new fiscal year, we are adding a new metric to the sheet: customers whose contract values are greater than $100,000, to track the progress we are making and deepening our presence within our largest customers.

This number was 147 as of the end of Q4, up 126% versus a year ago.

Next, I'll provide color on the rest of our income statement and a few highlights from our balance sheet.

Unless otherwise stated, all references to our expenses and operating results are on a non-GAAP basis and are reconciled to our GAAP results in the earnings release that was posted before the call.

In the fourth quarter, overall gross margin was 82%, flat with the prior and year-ago quarter.

Subscription gross margin was 88%, 1 percentage point lower than the prior and year-ago quarters, driven by higher personnel costs and partially offset by lower credit card processing and hosting costs.

Professional Services margin was 30% as we maintained high utilization rates and delivered higher-margin services packages.

With respect to overall gross margin, we do expect it to trend down towards our long-term target margin of 78% to 80% this year as we begin migrating our services from our co-location facility to the public cloud, which should provide us more flexibility to scale as we grow.

Turning to our operating expenses.

General and administrative costs in the fourth quarter were $8.6 million, representing 17% of total revenue and up from 16% in the prior quarter.

The increase was driven by a couple of onetime items, including a charitable contribution.

We expect to begin realizing scale in general and administrative expenses this fiscal year.

Research and development was $14.7 million or 28% of total revenue, flat with the prior and year-ago quarters.

Finally, sales and marketing expense was $28 million or 54% of revenue versus 60% of revenue in the prior and year-ago quarters.

The reduction in sales and marketing as a percentage of revenue was driven primarily by headcount scale and the absence of our ENGAGE conference, which occurred in the third quarter.

Turning to operating loss and free cash flow.

Operating loss is $8.5 million, representing a negative operating margin of 16%.

Approximately 66% of our total expenses were headcount-related, and we ended the year with about 1,100 employees.

In total, we added just over 300 team members during fiscal year 2019.

Free cash flow was positive $1 million, which includes CapEx spend, capitalized internal-use software and principal payments on leases totaling 6% of revenue.

Excluding these expenses, we generated $4 million in positive operating cash flow.

The improvement in cash flow compared to our prior quarter was driven primarily by higher collection.

Now turning to billings.

Our fourth quarter billings were $64.1 million, up 63% versus a year ago.

The strength in billings was driven by the launch of new products and a larger number of big deals that closed in the quarter.

Approximately 90% of our subscription billings were annual and the most -- the rest -- with most of the remainder monthly.

Quarterly and multiyear billings represented less than 1% of the total.

I'll now provide our guidance for the first quarter and the full fiscal year 2020.

For the first quarter, we expect total revenue of $54 million to $55 million, representing year-over-year growth of 49% to 51%.

We expect non-GAAP operating loss to come in between $20 million and $19 million and non-GAAP net loss per share to be between $0.19 and $0.18 based on weighted average shares outstanding of 105 million.

For the full fiscal year, we expect total revenue to be in the range of $253 million to $257 million, representing growth of 42% to 45%.

Non-GAAP operating loss is expected to be between $65 million and $60 million.

We expect non-GAAP net loss per share between $0.59 and $0.55 for the year based on approximately 106 million weighted average shares outstanding.

We expect billings to be in the range of $305 million to $310 million for the full fiscal year, representing growth of 41% to 43% versus last year.

And for modeling purposes, please assume historical trends for quarterly billings.

While we were pleased to be cash flow positive in the fourth quarter, we do expect to continue making significant investments in our go-to-market motion and product portfolio in the coming year such that we expect to remain in a negative free cash flow position for the totality of fiscal year 2020.

We believe making these investments in the short term will drive higher returns over the medium and long term.

So in terms of free cash flow, we expect our first quarter to be up to negative $14 million, which reflects the impact of our annual bonus payout.

For the full year, we are currently forecasting free cash flow to be up to negative $20 million.

To close, we are very excited to kick off our fiscal year 2020.

We have a great product portfolio and expanding set of solutions that our customers love.

Off of last year's momentum, we are continuing to make investments to build out our platform, add new capabilities, expand into newer markets and increase our brand awareness.

With that, we will now turn it back to the operator to take your questions.

Operator?

(Operator Instructions) Your first question is from Bhavan Suri with William Blair.

Congratulations.

That was a stellar, stellar results.

I wanted to touch a little bit on sort of the growth opportunity in front of you, that you've got millions of collaborators.

And I guess as you think about -- I just have to understand, where would you prioritize monetization of the free users in your growth strategy?

Or vis-à-vis, are you thinking of maybe adding feature functionality to make free collaborators sort of shift -- convert to paid license?

How should we think about what that opportunity looks like and your prioritization of that opportunity?

Hey, Bhavan, it's Mark.

I think that opportunity has existed really since inception, and the thing that we achieve with this new level of scale having over 1,100 people on the team now, is we have areas that we get to cover, which may not be the top priority but still represent an opportunity for us.

And I would say in this case, we want to remain very low friction in terms of not impeding the degree to which people work with others to get their work done, but we do think there are real opportunities to continue to better enroll people on the possibilities of Smartsheet.

So I would say today we are quite passive in that front and really having almost -- even being very gentle in terms of educating those collaborators on what's possible.

And I do think we have a marketing opportunity there.

Great.

And then as I touch on the Accelerators, obviously, huge value add for customers trying to streamline specific processes.

I guess, when customers start talking to Smartsheet, is this -- is that part of the initial conversation?

Or is this something that's discovered over time?

I guess is this a draw when they're deciding whether they want to adopt Smartsheet?

Or is it more of an expansion item?

How do you guys -- or what have you seen in the market with the Accelerators vis-à-vis that versus the core product?

I think one of the things that it really enables us to do is to present Smartsheet in the context of a business solution.

And when you talk about the possibilities of Smartsheet and how it can be configured to really meet a diverse set of needs, the Accelerators provide really, really good handholds for people to get introduced, whether it's on the dimension of IT PMO or store openings or really any of the scaled processes we're solving for.

So even if they don't buy an Accelerator for us, it's really an effective way of getting the concept landed with somebody.

Your next question is from Stan Zlotsky with Morgan Stanley.

This is Hamza Fodderwala actually in for Stan Zlotsky.

Just a couple of questions from my end.

On the dollar net retention, 134%, I think it's the strongest we've ever had and it keeps expanding.

Could you just talk a little bit about what drove that and how we should think about that trending in fiscal '20?

And then I have a follow-up.

Sure.

This is Jenny.

As I mentioned on the call, the majority of that benefit came from expansion.

And I would say if the majority of that came from our larger customers.

For example, customers who were over 50k.

We really saw very high dollar net retention rate there relative to some of the other groupings.

With respect to next year, for modeling purposes internally right now, we are assuming a modest decrease in net retention rate.

And that's really being driven by the fact that one, it's 12 months out, so there are some uncertainty there.

And second of all, retention rate is impacted by 2 things.

It's landing bigger deals, and we are seeing a little bit of that now.

And also, we're comping a very strong last year, which, of course, you know was 134%.

Got it.

And then a follow-up for you, Jenny.

On profitability, it looks like you're guiding to margins down this year and higher free cash flow burn.

I understand some of the incremental investments, but could you maybe break that out into some of the organic or inorganic impacts that you're seeing from TernPro?

And is there still a likelihood of margins potentially hitting positive 20% within the next 5 years or so?

And that's it for me.

Yes.

So with respect to TernPro, I mean, it's a pretty small team that's coming onboard.

So whether or not we acquired them or decided to build it in-house, we'd still incur incremental investment.

There's 3 major areas that we're investing, and the first is our sales team.

We're growing that a little bit more than we did last year, in particular, focusing on our U.K. business and making sure we have good people there.

We're also investing in marketing, much more brand marketing this coming year than we did last year.

So that's another kind of impact.

And then the third one is just overall product.

We've got a lot of opportunity to improve our platform, grow our capabilities.

And so those are the 3 kind of main areas.

In terms of the 20% within the next 5-or-so years, that is still on plan.

I mean, we guided to potentially $1 billion in revenue in the next 4 to 6 years.

And at that kind of range, we should expect to see our margins approaching 20%.

Your next question comes from Ross MacMillan with RBC Capital Markets.

Mark and Jenny, you've mentioned landing bigger deals, and you've broken out this new metric of ACV, over 100k.

I guess on that landing side, could you give us any color around what's changed and maybe the magnitude of the kind of some of these initial deals you're landing now relative to 1 year ago?

Yes.

When we look at our -- this is Mark.

When we look at the profile of the new deals, this is -- now that we have some capability-based offerings that we can introduce at the outset, there's an opportunity for a rep to not just sell seeds at the outset, right?

So if they introduce a Control Center or a Dynamic View element, something that the customer deeply understands right at the outset, there's an opportunity to sell larger.

That said, we are not seeing an order of magnitude difference on our new deals.

This is still very much of a land and expand.

The largest deals still come from our existing base today.

And part of our approach from the very outset of the company was this notion of the earned enterprise, and the earned enterprise is one where you sell what somebody needs, you earn it through usage and then you expand on the back of that success.

We are not changing our model and trying to pack the musket at the outset and try to really oversell.

We're trying to sell the right amount of software to somebody and then succeed and build on that.

Makes sense.

And then maybe just to follow up on, on new product road map.

Obviously, you highlighted some new Accelerators.

But last year, we did see things like Dynamic View, which are sort of incremental products for sort of audit and governance.

Are there other things outside of Accelerators that are on the road map?

And are there any things you should -- we should be thinking about?

Yes.

Ross, this is Gene Farrell.

I think when you think about our road map for this coming year, as Jenny talked about, we're continuing to invest because we're getting a lot of great customer signal around ways they'd like to use Smartsheet.

And I'd say there are probably kind of 5 areas we're focusing in.

One is around driving scale and performance into our platform.

As customers build bigger, more complex solutions on us, we need to be able to grow with them and support that.

We're investing a lot in engagement and improving collaboration.

Our TernPro acquisition is one part of that in delivering collaborative content and the ability for teams to be able to actually mark up and improve content within the context of Smartsheet.

And then beyond that, we're working on improving our -- and building on our dashboard capabilities that we launched last year.

That's an area that's been very, very popular with customers, and they're really seeing the potential of using that real-time visibility and improved decision-making across the organization.

And so you'll continue to see us invest there.

And then finally, we'll be in the area of workflow and automation, and that's -- those are the efforts we started making a couple of years ago that continue to gain traction and we continue to see more signal from customers around things they'd like to see to do even more with Smartsheet.

Your next question comes from Mark Murphy with JPMorgan.

So Mark, I believe you said you're at 75% of the Fortune 500 now, but you're also generating ACV per domain growth of 50% year-over-year.

And then there was a comment that expansion rates improved.

It's such a rare combination of metrics.

And so I was just curious if you can update us on what percentage of the overall opportunity you've penetrated at the typical Fortune 500 customer in U.S. and Asia?

And how much runway remains for those types of organizations to continue to expand?

Yes.

So Mark, one of the real blessings in the company is even though we did see a 50% step-up in ACV, the number is still tiny.

I mean, we're talking $2,500 on average.

So the opportunity for us to really reach the full potential within the account, we were talking orders of magnitude, not order of magnitude.

And it's our job now to help enroll people on what's possible and then help them reach that.

And we have high watermarks now.

We have, as Jenny has now reported out, we are tracking over 100k contributions from customers.

We have customers over 0.5 million.

We have customers over 1 million.

So when you see these high watermarks within the organization, that is really the pacesetter for the organization to say, "Hey, we should not settle for a $20,000 account." And as we hear the demand signal that Gene speaks to, we're trying to get smarter about what solutions we introduce to people so that they achieve that growth.

But it's very difficult to sometimes comprehend how do you compare a $2,500 contribution from a Fortune 500 company to a multimillion dollar contribution?

It is not one big stair step.

It's a series of steps, and we're trying to figure out how to compress that and to help people drive value more quickly.

Yes.

And maybe just to add onto that.

I think last quarter, I talked about the average ACV for the Fortune 500 being close to $50,000.

We're now north of that.

So it's still a relatively small number in the context of the opportunity, so we think there is a lot more to go.

Okay, very well said.

As a follow-up, as you pointed out, you achieved FedRAMP's Ready status last week, and I think you're now listed in the FedRAMP's marketplace for, I think, both the agencies and the government contractors.

How would you characterize just the initial conversations there in terms of the use cases that the agencies are looking at?

And do you have any thoughts on just how to triangulate the size of this federal government opportunity for Smartsheet?

I think it's an interesting population because it's really a group of interested parties who haven't had much to work with as respect to a cloud technology.

So it's a very young market.

They are learning new ways of working.

People are graduating from traditional messaging and information tracking mechanisms.

So it's difficult to predict how quickly that change will happen.

We see appetite, but there's also a change management aspect to this.

So the good news is now that we've achieved Ready, we have betas in play right now with agencies, and we're going to learn a lot in the coming months.

But what we're not doing as part of our strategy is saying what we observe in commercial is absolutely going to be mirrored in fed.

So we will report out the progress we see.

First again, we have to hit authorization fully, and then we will get our first deals done.

But we're very curious to see how this marries.

What we have started with as part of our FedRAMP Ready is we really took the core of Smartsheet, the thing we built this business on, and that is what we are bringing to the government to start.

And then over time, as we see demand signal, we will then take our capabilities -- our capability-based licensing offerings and introduce those over time.

So again, real -- a time of learning for us, but we're very thrilled, obviously, to get over this first big hurdle.

Your next question is from Terry Tillman with SunTrust.

This is Courtnei on for Terry.

Looking at where we are in terms of product application and market maturity, do you see or continue to see a use case by use case expansion of customers?

Or are you starting to see situations where there's more strategic selling, whereby businesses are looking to fully come in and put it on every desktop for knowledge workers?

Do you think the latter is maybe a dynamic you could see at some point?

Yes.

You broke up a little bit on your question there, but I think what you're asking is, are we still seeing kind of use case by use case, are we seeing more strategic opportunities?

And I would say that, in general, as our capabilities expand and we start to -- and really expand the number of mission-critical use cases that we support for customers, we are seeing much broader adoption when you're touching, for example, an entire sales organization for sales planning and territory planning or when you're driving a critical part of a client onboarding and the execution and implementation of a company's core product that they sell to their customers.

And so we believe that as that continues to grow, we will start to see more opportunities for what some would term wall-to-wall deals.

Recently, we've had a number of customers that have done consolidations, where they've looked across their organization and have seen a number of different solutions in play and decided to kind of standardize on one execution -- work execution platform.

And in both of those cases, we were selected over smaller competitors.

And so we're feeling pretty good about the trend, but I wouldn't say that's a mega trend yet for us.

That's helpful.

And if you can hear me okay, I'll just try one more question.

In terms of international expansion, can you talk about whether new regions are more of a push or a pull in terms of you being pulled into international markets and there's soft demand versus direct investments to go out and build that demand proactively?

Yes.

We serve customers in almost 190 countries today, so it's really a decision we're making to try and enhance the level of service and really cater to the opportunity more fully.

So I would say this is a pull really based on the footprint we have today.

Your next question comes from Rishi Jaluria with D.A. Davidson.

Nice to see this continued enterprise traction.

I just wanted to first start by following up on the international side.

APAC is about half the size of EMEA right now, give or take, but it still seems like a great opportunity, and I know you've got pretty diverse presence out there.

What would need to happen with -- to go right with what you're doing in London right now to maybe replicate that move and actually have a full field sales office and boots on the ground in APAC?

And I've got a follow-up.

Having lived in multiple regions in APAC, I think we often speak about APAC as a single region when, in fact, it's a collection of many, many different regions.

So I think there's really a neat opportunity in various sort of submarkets within APAC.

I think what we're looking to do as we make this investment in the U.K. is to really see we have a hypothesis on you put people on the ground in sales, success, consulting capacity, are we able to see a differential net dollar retention by having presence?

Today, we serve APAC from our U.S. sales centers, and we're able to provide A level of service beyond self-service.

So we're really looking to see what can we see in these early quarters within the U.K., and we're developing a set of metrics that we're keying off of.

And to your point, we also think APAC is quite interesting, and I would say we're going to start having those discussions this summer in terms of when that comes into focus for us.

That's helpful.

And then in the prepared remarks, it looks like there was a relatively new metric, not just the customers there, ACV over 100k, but there is 9 companies expanding ARR by 100k.

I just wanted to get a sense for how that number compares to maybe how it's been for the past couple of quarters.

Yes.

It was 9 last quarter as well.

And if you go back a year, it's been increasing, so within the low single digits, let's say, 1 year ago.

I will also comment that 1 of the 9 was very large.

(Operator Instructions) Your next question is from Richard Davis with Canaccord.

So first, a quick product question and then a strategic question.

So the quick product question is this: do you guys -- because I remember you talking at your user conference.

Some of the attendees were like, man, if they could have some sort of, like, geo-location functionality in their forms and things like that.

Do you have that yet?

Is that something -- and I know it seems easy, but I know it's not.

I'm just curious.

Yes, we have location in mobile today.

We launched that at the end of the year.

And we actually think the mobile form factor is the best form factor for that.

Not a lot of folks run around with their desktop.

So yes, we have it in mobile today.

Perfect.

And then the -- this is more kind of an interesting, I guess, competitive question.

So you're in a really big, fast-growing space, for sure.

But when you kind of get moving up into the $100,000 account size, your competitive set is going to evolve, right?

So I mean, there's all sorts of companies in this space.

Obviously, you have [Riskin], SharePoint, but then you have, like, OutSystems and public companies like Appian.

And I don't really think you're a ServiceNow competitor.

But Airtable has gotten some money.

I remember Wrike and what Workfront has done a refinancing.

I know you're not running into all these, but how do you kind of see -- as you grow and you get moved up, how do you see the competitive environment evolving?

How should we think about that?

Yes, Richard, for us, we see some of the data you mentioned around what different competitors are doing as just validation of the size of the opportunity we have in this space.

And while there are adjacent spaces, we're the only leader in collaborative work management.

And so our focus is squarely on serving our customers and developing capabilities to meet their use cases.

And we are seeing increasing demand to stretch and drive our capabilities deeper into the organization.

So that's where we're focused, and we're super excited about being able to capture that.

At this time, there are no more questions in queue.

I'll now turn things back over to Aaron Turner for any closing remarks.

Great.

Well, thank you all for joining us today.

We look forward to speaking with you again next quarter.

This concludes today's conference call.

You may now disconnect.