Workiva Inc (WK) 2015 Q4 法說會逐字稿

Good afternoon, my name is Mike and I'll be your conference operator today. At this time I would like to welcome everyone to the Workiva Inc fourth-quarter and full-year 2015 earnings conference call.

(Operator Instructions)

Thank you. I will now turn the call over to Adam Rogers, the Senior Manager of Investor Relations. You may begin your conference.

Thanks, Mike. Good afternoon, everyone and welcome to the Workiva fourth-quarter and full-year 2015 earnings conference call. This afternoon we will begin with comments from Chairman and Chief Executive Officer, Matt Rizai. Followed by our Executive Vice President, Treasurer and Chief Financial Officer, Stuart Miller. And then we'll turn the call over to questions. Also with us on the line today are Marty Vanderploeg, President and Chief Operating Officer; and Mike Sellberg, Executive Vice President and Chief Product Officer.

A replay of this call will be available until March 8. Information to access the replay is listed in today's press release which is available on our website under the investor relations section. As a reminder, today's conference call is also being broadcast live via webcast.

Before I begin I'd like to remind everyone that during today's call we'll be making forward-looking statements regarding future events and financial performance. Including guidance for our first quarter and full FY16. These forward-looking statements are subject to known and unknown risks and uncertainties. Workiva cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only and we undertake no obligation to update any statement to reflect events that occur after this call. Please refer to the Company's annual report on Form 10-K for factors that could cause our actual results to differ materially from any forward-looking statements.

Also during the course of today's call we will refer to certain non-GAAP financial measures. Reconciliations of non-GAAP to GAAP measures and certain additional information are also included in today's earnings press release. And with that, we'll begin by turning the call over to our Chairman and CEO, Matt Rizai.

Thank you, Adam, and thanks to everyone for joining us today to discuss our fourth-quarter and full-year 2015 results. The fourth quarter capped off another strong year for Workiva. Fourth-quarter total revenue was $39.9 million, up 32% year over year and ahead of our guidance range. For the full-year 2015, revenue was $145.3 million, up 29% over the prior year.

Before discussing our results in more detail, I would like to comment on our outlook for operating cash flow. We anticipate cash usage from operations to improve in 2016 and then improve again in 2017. We also believe that we raised enough capital at our IPO to get to positive annual operating cash flow without needing to return to the equity market. Stuart Miller will provide more details later on this call.

The ongoing investments we're making to enhance our Wdesk platform and generate demand for our solutions have enabled us to continue to gain market share. In 2015 we added 263 net new customers, including 56 net new customers in the fourth quarter. We're making good progress on diversifying our revenue sources.

In 2014, 25% of our subscription bookings were from non-SEC use cases. And for the full-year 2015, that contribution from non-SEC use cases rose to 39% of our subscription bookings. In 2016, we expect that non-SEC use cases will contribute more than 50% of our subscription bookings. The percentages I've just provided are conservative because customers who bought Wdesk from our SEC sales team tell us they also used Wdesk for management reporting, investor relations and other use cases.

In the second half of 2015 we saw an increase in new use cases due to our expansion in management reporting and risk, as well as growth in the adjacent markets of enterprise risk management and audit management that has proven customer demand for Wdesk. This expansion of use cases has increased the size of our total addressable market for Wdesk by over 50%, based on our estimates. From $6.8 billion to $10.4 billion for both public and private companies in North America and Europe to date.

Our markets are at different stages of development and we are still in investment mode on several use cases. Therefore in 2016 we are continuing to invest in software development, sales and marketing to capitalize on these expanded market opportunities. We're excited about the opportunities we see in our expanded TAM and new markets and growth within existing markets. Let me give you some examples.

Just yesterday we released a study by Forrester Consulting that showed a large global manufacturer achieved an ROI of 108% by using Wdesk. The customer recognized more than $640,000 in total benefits and cost savings over a three-year period. And reduced data collection and aggregation workload by 90%. The manufacturer used Wdesk to automate financial data collection throughout its global enterprise, streamline accounts [payable] review and reporting process and benefit from cloud-based security protections.

Here are other use cases this quarter. EnPro uses Wdesk to collect data for its [sweet sheets] which detail actual financial results along with comments to explain variances from plans. [Ameri-Co] Logistics is a private company using Wdesk for its internal controls and annual corporate reports. A leading motorcycle manufacturer uses Wdesk for financial planning and analysis. New York Life uses Wdesk for statutory reporting. UPS now uses Wdesk to track environmental health and safety data along with other sustainability data. And Noble Energy uses Wdesk for its monthly close checklist. A global airline now uses Wdesk to collect and report information about [ramp] and airport incidents. With Wdesk, the airline's streamlined safety reporting with control and accountability, neither of which was possible with its former process of outdated spreadsheets and emails.

We continue to see strong demand for Wdesk in the SOX market because it's streamlines how teams document, implement, and assess internal controls over financial reporting. By integrating the risk control matrix, process narratives and flow charts, Wdesk enables data consistency and control which helps our SOX customers be more productive and accountable.

Here are some customer examples for SOX. Talen Energy use the evidence management feature in Wdesk to upload documentation to a single location and perform quality control checks. They use Wdesk to assign tasks to process owners, send out certification requests and track progress from a dashboard, which eliminates the administrative burden of babysitting email. All of Talen Energy's Sox and internal controls documentation is located in Wdesk and is linked to audit committee slides and dashboards. Which instantly updates other documents. Because Wdesk is cloud-based external auditors are able to securely access the information as needed.

Other SOX customers have shared the following ROI examples with us. A large global energy company said the efficiency gained with Wdesk is equivalent of a full-time employee for one year. An information technology company saved two weeks on every on-site audit. A banking company saved 40% on document management. Diversicare Healthcare Services has dramatically improved its consistency among internal controls.

A SOX manager at Upland Software used to spend two to three days sorting spreadsheets and updating information across all documentations. Now with Wdesk, it takes that person only two to three hours to do the same tasks. Before using Wdesk, Cousins Properties was only able to complete three or four items on a three page list of improvements for internal audit related to SOX. With Wdesk they significantly improved the efficiency of their process and are now able to cover many more audits that management needs to assess risk.

Wdesk for SOX and internal controls recently won an Edison Award in the financial solutions category. And Gartner once again named Wdesk a best-of-breed vendor for enhanced financial controls and automation. In the regulatory risk market we continue to win new businesses for a wide range of risk reporting, including resolution and recovery plans, comprehensive capital analysis and review, Dodd-Frank Act stress testing and owned risk and solvency assessment which is used primarily by insurance companies.

For example, Credit Suisse, which began using Wdesk for its resolution and recovery plan, has expanded Wdesk to its valuation risk group which manages an extremely complicated process involving many contributors across the company. Wdesk is used to document formal procedures around valuation review for purposes of SOX and other regulators. Because Wdesk serves as a repository of linked data it's also used as a procedure reference by valuation risk team members.

We also see growing demand for -- within private companies. For example, a large private healthcare insurance company recently started using Wdesk for its master audit plan and risk score cards. An adjacent market for Wdesk is enterprise risk management or ERM, which executives use to identify systemic risks, determine and assess risk magnitude and plan strategic responses. A large financial services customer uses Wdesk to securely collect, organize and present key risk indicators while ensuring consistency and accuracy at multiple levels of descriptive information throughout their monthly ERM reporting process.

In the fourth quarter of 2015, we began marketing Wdesk to the broad-based audit management market which includes audit risk assessments, audit [signing] and internal audit group. Audit management, along with ERM, is a subset of a much larger market that's defined as governance, risk and compliance. Known as GRC.

So as you can see, 2015 was a great year for Workiva and our 1100 employees, In November, Deloitte listed us on its 2015 technology Fast 500 list, and in December, Fortune Magazine ranked Workiva number 6 on it 50 Best Workplace For Camaraderie. And in January, Fortune Magazine ranked Workiva fourth on its Best 10 Workplaces For Technology in the large company category.

Looking to 2016, we are extremely optimistic about the growth opportunities available to us. We expect that the SEC filings market will continue to be a source of growth for Workiva. As a reminder, today we serve about half of the accelerated and large accelerated SEC filers in the United States and we're optimistic about capturing the balance of this market, as we believe that Wdesk is widely regarded as the best practice for SEC reporting.

As I discussed with you last quarter and earlier in the call, our work in SEC and SOX is enabling us to expand into the GRC market. Here's how it happens. When our customers work on SOX, oftentimes their colleagues from risk and audit are collaborating on the same documents. Once they experience firsthand how Wdesk helps them to work together in a single live document and allows them to control and track data, they want to use Wdesk for other projects. In this way, Wdesk is introduced to new groups of collaborators in audit and enterprise risk management. That's why we began marketing Wdesk in the fourth quarter of 2015 to the broader-based GRC market where we see a lot of expansion opportunities.

To land and expand in all of our markets we continue to improve our Wdesk technology. Later this year we plan to release Wdesk enhancements that will include an enhanced data platform for SOX, next generation work books that can handle millions of rows of data at high speeds, and an intuitive user experience with improved collaboration and [auto trade].

In summary, our fourth quarter and full year of 2015 results were strong. We are very excited about the momentum we are seeing in Wdesk expansion across our customers. We are pleased with the progress we've made on our land and expand growth strategy and we believe the investments we are making position us to capture a much larger total addressable market for future growth. With that, let me turn it over to Stuart Miller.

Thank you. As Matt indicated, we're pleased with our results for the fourth quarter and the full year. I will talk about our non-GAAP results which are before stock-based compensation. Please refer to our press release for a reconciliation of our non-GAAP and GAAP results. I'll begin by reviewing our fourth quarter and FY15 results, and then I will comment on our first-quarter and full-year 2016 financial outlook. Thereafter we'll open up the call to your questions.

We generated total revenue in the fourth quarter of $39.9 million, an increase of 32.4% from the fourth quarter of last year. In addition, our non-GAAP operating margin improved 10.7 percentage points compared to the fourth quarter last year. Breaking out revenue by reporting line item, subscription and support revenue was $32.1 million, up 28.4% from Q4 of 2014. 47.6% of the S&S revenue increase in Q4 came from new customers added in the last 12 months; the remaining 52.4% of the increase came from deeper penetration of our existing customer base.

The average contract value on subscription and support from all customers continued to rise. Professional services revenue was $7.8 million, an increase of 52% from the fourth quarter of 2014. Higher customer count in services from non-SEC use cases, particularly SOX and regulatory risk, accounted for the majority of the growth in services revenue in the fourth quarter.

Turning to our supplemental metrics, we finished the fourth quarter with 2524 customers, a net increase of 263 customers from Q4 of 2014, and a net increase of 56 from Q4 of 2015. Our subscription and support revenue retention rate was 95.8% at December 2015 measurement date, down slightly from 96.4% at September 2015. Customers being acquired or ceasing to file SEC reports once again accounted for over half of our revenue attrition.

Including add-ons, our subscription and support revenue retention rate was 112.5% at the December 2015 measurement date, up from 107.7% in September 2015. Consistent with Matt's comments earlier, increased subscription bookings from existing customers on non-SEC use cases was the primary driver of the increase in the add-on revenue retention rate.

Moving down the income statement. Gross profit was $29.1 million for the fourth quarter, up 42.8% from the same quarter a year ago, representing a gross margin of 72.9% compared to a gross margin of 67.5% in the fourth quarter of 2014. Now breaking out gross profit. Subscription and support gross profit of $26.4 million, equating to a gross margin of 82.2% on S&S revenue. Compared to $19 million or 76% gross margin in the fourth quarter of 2014. Improved efficiency of our customer success team and higher subscription prices accounted for the margin expansion.

Professional services gross profit in the fourth quarter was $2.7 million, equating to a 34.1% gross margin, compared to $1.3 million or 25.9% gross margin in the same period last year. Better utilization of capacity compared to Q4 last year accounted for the higher margin.

Turning to operating expenses. Research and development expense in the fourth quarter was $12.9 million, an increase of 10.9% from $11.6 million in the prior year's fourth quarter. Due to higher compensation and additional staff, as we have been dedicating more resources to building the next generation of Wdesk.

Our R&D expense as a percentage of revenue this quarter declined to 32.2% compared to 38.5% in Q4 last year. Sales and marketing expense increased 32.4% over Q4 of 2014 to $18.1 million, driven primarily by additional headcount and cash incentive compensation in line with our expectations. Expanded marketing programs accounted for the remaining part of the increase.

General and administrative expenses were $6.7 million in Q4, an increase of 40% compared with $4.8 million in the fourth quarter of 2014, driven by the cost of being a public company together with increased compensation, software and support fees. Operating loss was $8.7 million in the fourth quarter of 2015, compared to $9.8 million in the same period last year. Net loss was $7.2 million for the fourth quarter of 2015 compared to a net loss of $10.8 million in the fourth quarter of 2014. We posted a net loss per share of $0.18 in the fourth quarter of 2015 compared to a net loss per share of $0.33 in the same quarter a year ago.

Now I'll recap our full FY15 results. Total revenue was $145.3 million, up 29% year over year. Subscription and support revenue was $116.3 million, increasing 27% over 2014. Professional services revenue was $29 million, up 36% from the prior year. So our revenue mix was 80% subscription and support and 20% professional services in 2015.

Moving down the P&L and again focusing on non-GAAP expenses, gross profit was $105.8 million, rising 32.8% year over year representing a 72.8% gross margin. Operating loss was $32.7 million, compared with a loss of $31.2 million in the prior year. Net loss was $32.4 million in 2015 and net loss per share was $0.81, which compares to a net loss of $33.8 million in 2014 or $1.05 per share.

Turning to our balance sheet and our statement of cash flows, at December 31, 2015, we had cash, cash equivalents and marketable securities of $76.2 million, a decrease of $5.6 million compared to the balance at September 30, 2015. In the fourth quarter of 2015, net cash used in operating activities was $5 million compared with $4.6 million in the same quarter a year ago.

As you may recall from previous calls, we cut incentives for long-term free payment from customers in order to capture more margin and we continue to implement that plan. As a result, our long-term deferred revenue declined almost $1 million in the fourth quarter 2015. Offsetting this decline was an increase in current deferred revenue of $4.7 million which was comprised of a $3.9 million rise in subscription support deferred revenue and $800,000 increase to professional services deferred revenue.

Before I address guidance, I want to review the seasonality of our business model. Seasonality effects three dimensions of our financials. Revenue, expenses and cash flow. Let's talk about revenue first.

The first quarter is the seasonal peak for our professional services revenue because many of our SEC customers file their 10-K in the first quarter, and hire Workiva to help them with XBRL tagging. The utilization rate for our professional services team runs close to 100% in the first quarter every year. We have typically run lower utilization rates in the other quarters, but professional services revenue has been rising in the last few quarters due to the growth of our non-SEC use cases.

The secondary seasonality I want to mention relates to expenses. Our sales and marketing expenses peak in the third quarter since we hold our annual user conference in September. The third area seasonality I want to highlight is cash flow. Workiva typically pays cash bonuses in the first quarter which has been a significant use of cash. Also, as we deliver professional services in the first quarter we burn off short-term deferred revenue related to services that were invoiced during the prior year, which shows up as a use of cash on that line item in Q1, at the end of Q1.

Turning to our guidance for 2016, our guidance on non-GAAP loss from operations and non-GAAP loss per basic share, excludes the impact of stock -based compensation, please refer to our press release for a reconciliation of our non-GAAP and GAAP guidance. For the first quarter of 2016 we expect total revenue to range from $42.3 million to $42.8 million. We expect the year-over-year growth rate in our subscription revenue to outpace the growth rate in professional services in the first quarter. Since the utilization rate for our professional services team typically runs close to 100% in the first quarter, Q1 growth in services revenue is limited to a function of headcount and billing rates.

We anticipate non-GAAP operating loss to range from $10.4 million to $10.9 million. We expect GAAP operating loss in the range of $13.9 million to $14.4 million. As Matt indicated, we plan to continue to invest in sales and marketing and in research and development. We anticipate non-GAAP net loss per share to range from $0.26 to $0.28, with GAAP loss per share in the range of $0.35 to $0.37. Our loss per share guidance assumes 40.5 million basic and diluted shares outstanding.

Our guidance for the full FY16 is as follows. We expect total revenue to range from $177 million to $180 million. Based on the midpoint of that range, we are expecting revenue growth of 23% in 2016. We expect non-GAAP operating loss to be in the range of $46 million to $49 million, and anticipate GAAP operating loss to range from $60.8 million to $63.8 million. Workiva's operating cash flow was a negative $21.6 million in 2015. We expect operating cash flow to improve for the full year 2016 and then again in 2017 as Matt indicated. We anticipate most of the expected cash use in each year to occur in the first quarter, heavily impacted by seasonality for the reasons I discussed earlier.

Also based on our projections, including our expected ability to convert some quarterly contracts to annual contracts, we believe operating cash flow for the fourth quarter of 2016 will be breakeven or better. We continue to believe that we raised enough money on our IPO to get to positive annual operate cash flow without needing to return to the equity market. We expect non-GAAP net loss per share to be in the range of $1.16 to $1.23 in 2016 and we expect GAAP net loss per share in the same year to range from $1.52 to $1.59 per share. Our loss per share guidance for the full year assumes 41 million basic and diluted shares outstanding.

In summary, Workiva posted another strong quarter, demand remains robust for our solutions, we remain focused on executing our growth plan to capitalize on our multi-billion dollar market opportunity. We'll now take your questions and operator, Mike, we are ready to begin the Q&A session.

(Operator Instructions)

Terry Tillman Raymond James

Hi Matt, hi Stuart, good afternoon

Hi Terry

I guess the first question relates to, as we look at 2016 and that was great color to see the mix of business with SEC reporting and non-SEC reporting. What I'm curious about, anything at all we can think about kind of relative growth rate in those two opportunities in 2016? I mean, I'm just curious if the SEC reporting is starting to kind of mature to the point that is going to be slower growing or do you still seeing kind of solid, I don't know, mid-teens growth, 20% growth; or just something to kind of get a perspective on what you see in the SEC reporting market considering it still is a key anchor of the business?

Yes, this is Matt, it's a good question; we still see growth opportunity on the SEC business. As I mentioned before, we still have about 15% of market that we think that we can chip at it. And so we look at that as a growth opportunity for us for at least a couple of years moving forward and beyond. And of course the SOX business has really getting a very healthy traction this year that we're really excited about.

And then now, we're also starting to get into the product markets, we'll see quite a bit of traction in the product market. So I would say that, we don't see significant or any material slowdown or equal on the SEC side, so we're pretty excited about the SEC operation. It's just that we have a lot of sales people who are focusing on the non-SEC side of it. So that's why we were excited about the growth on that side, so we expect that SEC to grow but also non-SEC to grow

Okay. And I don't know exactly how you can answer this question, but I can't help myself. I didn't think it was that funny, but anyways. So we had 260 plus new customers this year -- folks will look at new logo growth as one of those drivers for 2016 and hitting or exceeding your guidance. How do we think about growth in new customers in 2016 versus 2015? And kind of related to that, is there any potential shift one way or another in terms of, maybe it's more ARPU growth because you can do more of mining the install base. Do you see any kind of shift in those investments that you're stepping up in terms of getting more out of the existing as opposed to new logo?

Yes, let me kind of give you color behind it. As we look at our bookings this year we really feel pretty strongly that our mix is going to be 50/50. 50% of our bookings are going to come from existing customer as well as a 50% low comp from new, customer new logo.

Okay. And my last question -- and I was glad I was able to tickle you with that last funny things there, Stuart, but in terms of cash flow that was good color also to hear about breakeven, I guess, for fourth quarter of 2016. Maybe that's a seasonally strong quarter. Would we expected it then to turn negative again into the first part of 2017? Or is that actually the end of the burn and then from there on out it's positive OCF? Thank you.

I think that the guidance that we're giving right now, is just that 2016 is going to be less negative than 2015 and 2017's going to be less negative than -- 2017's going to be less negative than 2016 on a full-year basis. But you're right you know, it depends on the quarter up and down.

Michael Nemerov, Credit Suisse

Hi, this is Carl Chen sitting in for Michael Nemerov, thanks for taking the question. Stuart wondering -- hey how's it going -- just relative to the revenue outlook it would be helpful if you can deconstruct the guidance a little bit. Just wondering how much growth are you embedded from price increases, add-on seats versus new customers? And also, given the sales force growth in 2015, should we expect an acceleration in subscription and support growth in 2016 over 2015; just how should we think about the mix there?

Stuart

As Matt indicated, we are expecting 50/50, so half of the bookings we expect to come from new customers and half from existing customers. In terms of price increases, probably not going to be able to give you the level of granularity that you want there but I can give you some color on it, which is we raised prices on just under 1500 customers in 2015 and we plan to raise prices on about 1800 customers in 2016.

Got it. And then on the subscription and support growth, do you think you will see an acceleration in 2016 over 2015?

We gave pretty specific guidance on it, so you can compare the guidance to what we did last year

Okay, great. And then lastly, from a sales hit count perspective can you comment if you achieved your 2015 goal of increasing your sales force by 25% to 30%? And also how should we think about sales headcount growth in 2016? And what areas do you think you'll be making or focusing your incremental investments?

We felt comfortable with 25% to 30% sales force expansion last year and we talked about it and we actually exceeded that by the end of the year and moving forward, I think for 2016, we feel comfortable with additional 25% to 30% sales force expansion.

Got it, thanks, very helpful

Tom Roderick, Stifel

Hi guys, thanks for taking my question. Wanted to think a little bit more about the leverage that you're seeing across various parts of the business model and particularly, now you got another full year of the soft compliance product under your belt and as you talk about private markets and broader initiatives to move out on the Wdesk platform, how much are you able to leverage the existing R&D staff that you have versus needing to go out and hire new people with new capabilities as you roll the products out? And then much are you able to leverage the sales force? Love to hear what sort of process existing sales reps have to go through to get trained on new products, how long you saw it took them on the SOX side, just broadly speaking, can you talk about the leverage that you are seeing across those two elements of the business?

Marty, do you want to answer that?

I'll start with the R&D side first. Clearly, as Stuart has mentioned, the growth of the R&D team is going to be less than it has been historically, we still plan to grow it some but we're getting good leverage. We're very focused on doing R&D activity that's going to affect all of our different markets. And to that end when we build something like evidence collection for SOX we can use it for support binders on SEC and we can use it in the same type of thing with private companies. So we are very focused on developing technology and products that can be used in all our different markets and that's the whole idea behind the platform, if you will.

In terms of the sales force, we have gotten a lot better at training. That's become -- our sales are pretty complex sale and the sales people need a lot of knowledge, and to that extent we've grown our education team and that's a big focus for this year. So I think you'll see that, that will help us as these guys try to sell stuff to a lot of different types of markets and customers.

Got it, thanks Marty. And then Stuart, you had talked about raising prices on, I think, 1500 customers this year and the goal being maybe something like 1800 next year. What does that process look like as you go through raising their prices? Have you found that, that's been an effective sales tool to upsell and cross sell those customers as you go through a price increase? Or is it really not a terribly negotiated type of initiative and so it's more or less paper pushing across without a sales cycle?

Well, I think that the answer is, it depends on the customer. It's been -- it's been positive because it gives the salespeople the opportunity to talk about all the enhancements that we've added to the platform during the year and really helps strengthen the value proposition. But in certain cases it's led to a discussion of expansion into other use cases, and other times it's simply just a contract re-nup so it sort of depends on the situation.

Got it, I'll jump back in queue. Thank you guys, nice job

Thanks, Tom.

Jeff Houston, Northland Securities

Hi guys, thanks for taking my questions Great. Looking at the 2500 clients, Matt I think you mentioned that private companies are increasingly becoming a target. Could you talk about maybe how many of those are included in the client mix now and what are some of the use cases that really make sense for a private company?

Well, I mean, first of all, we are really excited about the private companies, there's over 5000 companies that we would start targeting. And they use it for different various cases, some of the examples that I've given you, but in terms of econ control, their finance accounting groups are using it. And some are using it just like the public company SOX team use it. We get a lot of our use cases from management reporting and so we are pretty excited about that, that we're seeing quite a bit of traction. And we think that there will be a healthy traction on the private side and that there's a great number of private companies that we're going after, and so we're pretty excited about that

Great, switching gears to International, could you update us on your thoughts there? Is that more of a -- there's so much opportunity domestically that international's several years into the future before you start looking at that?

Yes. Good question. We'd like to be able to, first of all, obviously Canada to us is North America so we don't for better or worse, we don't consider them as international. But whatever we are doing in North America and United States, I think we're doing in Canada. But other our market is in Europe, as you know, that since we have so many large global customers and that really allows us to be able to follow them in their use cases in Europe, especially in the UK and Northern European countries. And we had a healthy footprint for us to be able to leverage that as time goes on.

And from a priority point of view we look at North America first, but on the other hand we are executing and we're focused on International, mostly from Europe, and then we'll continue to be coming behind North America by about, like you mentioned two to three years. But we're making quite an effort and seeing results in the UK and Northern part of Europe as we speak.

Great. Last question for me, as looking at the examples of customer use cases you mentioned it seems like a very, very broad range. I imagine your salespeople aren't going in pitching to all of those different use cases. So how to those use cases come about? Is it more of it spreading internally at clients? They start using SEC filing and it's kind of internally truly spreads about how they can use it in different ways? Or is sales really encouraging them and making another sale throughout the whole process to help it spread out

Our sales organization are a lot more rational in terms of organization. We have a specific way to organize our sales organization executed. Marty, do you want to give a little example of how we deal with the sales?

Sure. You know when we go in the initial thing is just to get in the door. We don't try to sell a huge thing right off the bat. We get in, get a contract, get to know the people and then we have a pretty focused effort with our customer teams. One of the strategies we use is, we have a thing called the Wdesk Day where we schedule a day and give lunch and have all the different groups come in, and those have been very successful. When we have a good Wdesk Day it generally leads to a couple other use cases.

The salespeople are learning how to asks the right questions too. They're asking questions about where are they having problems, using traditional tools, and some of our reps have gotten really good at sniffing out what use cases are best to pitch there. And then they're also learning;; it takes a lot for the reps to learn it when there's a dozen different use cases they can pitch. Across all those we're seeing improvement and we're really learning how to expand once we land

That's helpful, thank you

Well in closing, I want to thank you for joining us today. And operator you may now end the call.

This concludes today's conference call. You may now disconnect.