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[00:00:03] Good afternoon, ladies and gentlemen, gentlemen. My name is Angela and I will be your host operator on this call. As your prepared comments, we will conduct a question and answer session. Instructions will be provided at that time. If at any time during the conference you need to reach an operator, please press star followed by zero. Please note that this call is being recorded on November 4th, Twenty twenty at 5:00 p.m. Eastern on. I'd like to turn the meeting over to your host for today's call, Adam Drizzt, director of Corporate Development and Investor Relations of RÁKOSI. Please go ahead.
[00:00:41] Good afternoon. Thank you for joining Workiva third quarter Twenty twenty conference call. Today's call has been prerecorded comments by our chief executive officer, Marty Underflow, followed by our chief financial officer, Stuart Miller, who will open the call up for a live Q&A session. But our chief accounting officer is also on the call. A replay of this webcast will be available on November 11. Information to access the replay listed in today's press release, which is available on our website under the investor relations section. Before we begin, I'd like to remind everyone that there in today's call will be making forward looking statements regarding future financial performance, including guidance for the fourth quarter and full fiscal year twenty twenty. These four looking statements are subject to known and unknown risks and uncertainties, where he 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 the events that occur after this call. Please refer to the company's annual report on form 10K in subsequent filings for factors that could cause our actual results to differ materially. Any false statements? Also, during the course of today's call, we will refer to certain non-cash financial measures, Reconciliation's of Gas to Gap measures and certain additional information are also included in today's press release. With that, we'll begin to turn the call over to our CEO, Marty Dataflow.
[00:02:20] Hello, everyone, and thank you for joining today's call. We made great progress in our third quarter. The global trends of online collaboration and remote work continue to benefit. We're Kiva. Customers use our cloud platform to simplify their complex work by connecting data and teams and by automating and streamlining processes. Financially, we exceeded guidance for revenue and operating income. We delivered more than 20 percent growth in subscription revenue and generated record bookings. In particular, we saw strong bookings and global statutory reporting, management reporting and capital markets. As a result, we are raising guidance for the fourth quarter. Stuart will provide details later in the call. In Q3, we continued to upgrade customers to our next generation platform. Customers accounting for over 90 percent of our annual contract values are now utilizing our new platform, the next generation will keep a platform is a key enabler for our growth strategy. Our new platform is more open, intuitive and scalable. We can now more quickly build and deliver new fit for purpose solutions that solve specific business problems we believe deliver a new platform. Extending solutions will continue to drive our success. A virtual marketing events continue to produce positive results in terms of record attendance, global reach and targeted sales leads in September. 6000 customers, prospects and partners from over 60 countries participated in Amplify our annual user conference. Our virtual sessions focused on solving universal challenges around data, workflow and complex reporting. And last month, 76 key technology and advisory partners joined us for our annual Partner Summit. Our summit addressed how partners can better leverage our platform, but their deep domain expertize to develop high value solutions. We expect our partners to drive an increasingly higher percentage of our future revenue growth. I would like to take this opportunity to thank our employees for supporting our customers and upholding our values based culture, even in the face of a challenging twenty twenty that delivered our next gen platform, upgraded our customers and generated strong sales growth. In closing, we remain confident in our ability to capitalize on our new platform as enterprises continue to move to the cloud. With that, I will turn the call over to Stuart Miller.
[00:05:16] Thank you, Marty. As mentioned on our last call, we began to see a more predictable cadence to closing deals at the end of the second quarter, suggesting that our customers and prospects were settling into a new normal. That pace accelerated in the third quarter across a broad range of our solutions, particularly global statutory reporting, management reporting and capital markets, both transaction volume and average deal size came in above our expectations in the third quarter, doing so with almost no help from price optimization. As a result, we are raising guidance for Q4, which I will discuss later. Before covering archery financials, I want to provide an update on a regulatory matter. On October 20, first the European Union granted its member states the option to delay compliance with the EU mandate for one year to help companies free up resources for more urgent pandemic related matters. We expect all EU member states to exercise the option, the one year delay has had no material impact on our outlook for the. Turning now to our financials, as always, I will talk about our results and guidance on Dawngate basis, refer to our press release for a reconciliation of our noncapital gap results guidance. I'll address our performance against Q3 guidance first. We beat you three Twenty twenty revenue guidance at the midpoint by three and a half million dollars, higher subscription revenue accounted for most of the.
[00:06:57] We succeeded in collecting a high percentage of the receivables that we had held in reserve at the end of Q2. The pandemic had less of an impact on selection's than we had anticipated in June. In addition, we closed more deals early in the quarter and we sold and delivered some capital markets deals within the quarter. We beat guidance on two three operating income by more than nine million dollars. The revenue you just mentioned accounted for just over a third of the swing. The remainder of the relative to guidance included lower travel and entertainment costs, reduced expenses from shifting marketing and internal events to a virtual format. Recovery of bad debt expense. Pyo pito usage and decreased occupancy costs. Now, turning to a comparison of Cuchi Twenty twenty to Q3 last year, we generated total revenue in the third quarter of eighty eight point one dollars million, an increase of eighteen point eight percent from Q3 2019. Breaking out revenue by reporting line item description and support revenue with seventy five point nine dollars million, up twenty point four percent from Q3 2019. New logos and new solutions help drive strong revenue growth GAAP Twenty twenty. Fifty one percent of the increase in estimates revenue in Q3 came from new customers added in the last 12 months. The balance in the increase came from companies who've been our customers for more than a year.
[00:08:36] Professional services revenue was twelve point two dollars million in Q3 twenty twenty an increase of nine point eight percent from the same quarter last year, set up and consulting accounted for the gross. Turning to our supplemental metrics, we finished Q3 with three thousand five hundred eighty three customers, a net increase of one hundred twenty nine customers from Q3 2013 and a net increase of seventy one customers from Q2 twenty twenty. New customers subscribing to an ETF solution accounted for 20 percent of the gross number of new logos in the quarter. A revenue retention rates remain strong for subscription and support revenue retention rate was ninety four point nine percent for the third quarter of Twenty twenty, compared to ninety four and a half percent for the same period last year. Consistent with our experience over the long term, almost half of the attrition in the quarter came from M&A listings and bankruptcies. With add ons are subscription and support revenue retention rate was 110 percent for the third quarter of Twenty twenty, compared to one hundred twelve point eight percent in Q3 2019 and one hundred seven point nine percent in Q2 Twenty twenty. The number of larger subscription contracts continues to increase. In the third quarter of Twenty twenty, we counted 785 contracts valued at over 100000 dollars per year, up 28 percent from Q3 the prior year, the number of contracts valued at over one hundred and fifty thousand dollars total 383 customers in the third quarter, up 47 percent from Q3 2019.
[00:10:23] Results moving down the PNL gross profit totaled sixty six point nine dollars million in Q3, twenty five point six percent in the same quarter a year ago. Consolidated gross margin was seventy five point nine percent in the latest quarter versus seventy one point eight percent in Q3 2019, a net expansion of 410 basis points breaking out gross profit. Description and support gross profit totaled sixty four point three dollars million, equating to a gross margin of eighty four point seven percent on estimates revenue and expansion of one hundred forty basis points compared to Q3 2019. Professional services, gross profit in the third quarter was two point six dollars million, according to a twenty one point six percent gross margin, compared to seven percent in Q3 2019. Research and development expense in Q3 totaled twenty one point eight dollars million, up five point six percent from Q3 2019 R&D expense as a percentage of revenue improved to twenty four point seven percent in Q3, twenty twenty one twenty seven point eight percent in Q3. Twenty nineteen. Sales and marketing expense for the quarter increased six and a half percent from Q3 twenty nineteen to thirty two point eight dollars million. Savings on TNT and our shift to a virtual marketing events partially offset higher expenses from headcount growth in our sales team.
[00:12:02] General and administrative expenses totaled eight point seven dollars million in Q3, up 600000 dollars compared to Q3 2019. Gené expenses as a percentage of revenue improved 110 basis points to nine point eight percent. We posted an operating profit of three point six dollars million in Q3 Twenty twenty compared to an operating loss of six point three dollars million in Q3 2019. Turning to our balance sheet and cash flow statement at September 30, Twenty twenty cash, cash equivalents and marketable securities totaled five hundred twenty four million dollars, an increase of fifteen point three dollars million compared to the balance at June 30, Twenty twenty net cash provided from operating activities in three Twenty twenty total seven point eight dollars million, compared with cash provided the four point seven dollars million in the same quarter a year ago. At September 30, Twenty twenty, we classified five point two dollars million of receivables to a credit reserve account, up from four dollars million of receivables at September 30, 2019. This reserve account reduced deferred revenue by an equal amount and therefore it reduced billings at the end of the quarter. Remaining performance obligations on construction contracts continue to vary from deferred revenue as we implement multi-year contracts with annual billing terms for some customers. Turning to our guidance. We are factoring in the expected impact of the covid-19 pandemic on our business and results of operations based on information available to us today.
[00:13:54] For the fourth quarter of Twenty twenty, we expect total revenue to range from ninety point two to ninety point seven dollars million. We expect subscription revenue to grow at a faster rate and services revenue in Q4. As a reminder, in Q4 2019, we posted a one time increase of cheap point five dollars million in professional services revenue due to a regulatory change. We expect non-GAAP operating income to range from 500000 dollars to one million dollars in Q4. For the full year twenty twenty, we expect total revenue to range from 348 to three hundred forty eight and a half million dollars. We expect nongay operating income to range from three to three and a half million dollars. Turning to Twenty twenty one on a preliminary basis, we expect total revenue to exceed four hundred one dollars million in Twenty twenty what we expect the growth rate of subscription and support revenue to continue to outpace the growth rate of professional services revenue. We expect non-cash operating loss as a percentage of revenue to be a low single digit in 2021. We plan to offer detailed guidance on our outlook for Twenty twenty one on our next call. We will now take your questions. Operator, we are ready to begin the Q&A session.
[00:15:25] As a reminder to ask a question, you need to buy Star one on your telephone to withdraw your question plus the pound or hash key. Please stand by. When we come back, the Q&A roster. And your first question is from the line of Terry Tillman with truth, please go ahead.
[00:15:46] Hey, good afternoon, gentlemen. Can you hear me okay? Yeah, well, congrats on the improving trends. It's really good to see some of these KPI in the Billings in RPO. My first question, though, just relates, you know, maybe this is a little bit of an education for me or just an update. But, you know, you called out global statutory reporting and management reporting in capital markets activity. Could you maybe kind of stack rank those in terms of are there notable differences typically in the deal sizes for those use cases? And just those are those prominently kind of positioned in your guide for next year? Or is there anything else that kind of comes online that's notable next year beyond these three items? Do you call it out in the net? Follow up?
[00:16:31] Go, Stuart.
[00:16:35] So, Terry, I'd say global stat is, you know, and most of those deals are six figure some middle six or high six figures for sure. Management reporting has got a pretty wide range, depending on the use case, the size of the customer and so forth. And then capital markets sort of typically low, low six figures. They're you know, we got good contribution from integrated risk and, you know, a number of other use cases. And we expect that to, you know, continue into next year. We just called those out in particular because they were performing above expectation for the quarter.
[00:17:28] Ok, and just take, I guess, the following question, and I don't know if this is for your Marti, but see in the big federal sector deal, you know, this past quarter, I'd like to hear more in terms of, you know, how that kind of came about, you know, what factored in to kind of the decision to go with you guys there and how the federal sector and public sector is looking in general. And thank you.
[00:17:52] Well, I would I would say that, you know, the thing that has really changed for us and we alluded to that is, you know, we we spent four years, you know, we architecting our platform. We have a true platform now. And so when we go into something, you know, something like the Department of Justice, we talk about all the different uses of the platform, that being financial reporting, internal controls, you know, all sorts of different things that they have to do. And so they really view it as being a platform for a lot of different function. And, you know, they really don't. Now, almost all the government agencies we've run into are still using word and excel. So it's a pretty natural sell. The outlook is, you know, right now, of course, everything's locked up, but the outlook is it looks good, but it's very lumpy. It's a lumpy business and also, you know, as in the September spike every year. So it's but we're very optimistic about it.
[00:19:04] And your next question is from the line of Chris Warren with Goldman Sachs. Please go ahead.
[00:19:11] Ok, thank you so much for taking my question. I wanted to ask about, I guess, you know, on going call, there's a delay, you know, with ease of compliance for about a year. But the same time we saw a 20 percent of new logos come from customers adopting an ETF solution. So and you think about the impact of this, how would you say it impacts pipeline build if perhaps even in a positive way or deal close rates in that region in the coming quarters? Just trying to get a sense, you know, if this actually helps you in some way by being able to initiate more conversations or how about would you describe the impact? Thank you.
[00:19:51] You know, the you know, Stuart Marty, by the way, Stuart did say it didn't affect our outlook for a next year. What we're seeing is, you know, companies are they realize we still have to do this, he says, has been delayed one year because of coal. But that's sort of the story. And they know they have to do it. They're partly down the path of due diligence and learning what they have to do. And we really you know, we've been continuing to close these deals even after the announcement. So we really don't see that as changing our trajectory. I think if anything, you know, the type of competitors we have, there are very small companies that were more or less starting for this business. And if it's going to hurt anyone, that's going to hurt them more than others. And I think it is true, we will be able to have more conversations that will be less rushed. And so I think in general, it certainly is neutral and it could potentially be positive.
[00:20:49] Ok, great, thank you. Maybe just a quick follow up on that, the buildings, no, obviously super impressive in the quarter and there's a big build up and deferred that we saw on the balance sheet. So, you know, was there anything abnormal there in terms of Popov's or anything like that, or was it just a really healthy execution? You know, in terms of in terms of closing a business?
[00:21:13] As Marty indicated and his talk, you know, it was a record quarter for bookings and. It was it was strong throughout the quarter, and so there was really nothing unusual going on other than just really good execution.
[00:21:29] Great, thank you.
[00:21:32] Your next question is from the line of Stan Slutsky with Morgan Stanley. Please go ahead.
[00:21:38] Perfect. Thank you so much, guys, and congratulations on a very strong quarter. Maybe just following up on Chris's question, the strength of the quarter. And I think it really surprised a lot of people to the to the upside is mainly manifesting in Billings. And you mentioned that you had a lot of deals closing in the beginning of the quarter. Was there some some essentially of pent up demand from the, you know, the Q1 and Q2 delays that ended up closing early in Q3 and driving some of the deferred revenue build?
[00:22:20] Stuart, go ahead.
[00:22:21] Yeah, so definitely stand there was some we think there was some pent up demand. We were heartened that the you know, the pipeline we've been carrying a big pipeline all year and we were seeing the pipeline and continuing to build. And we you know, we're bringing in a big pipeline into the fourth quarter. So, you know, that's that's why we're optimistic.
[00:22:44] Ok, perfect, and maybe a quick follow up. Obviously, we all saw the very strong capital markets activity with so many IPOs coming public in through the summer and into early fall. Can you help us characterize, you know, how much of that if if it all material helped Q3 and maybe your your outlook for the rest of this year and, you know, how are you thinking about that activity going into Twenty twenty one?
[00:23:14] Sure. So I think that it's fair to say that companies going public are increasingly seeing the value of our platform. And, you know, part of that is the fact that they're they're working remotely and trying to do deals remotely. And certainly some of the more progressive law firms are embracing it, which is a good thing. You know, we had a very strong IPO market in in Q3. And, you know, we'll we'll see what kind of impact, if any, of this election has on Q4. You know, it's not you know, percentage wise, it was a big but but is it in terms of dollar contribution for deals that were sold and delivered within the quarter? Not not a big number.
[00:24:10] Got it. Thanks so much.
[00:24:12] Worse than a million dollars. Thank you. I will just add to that all of our solutions are. Saw increased strength. I mean, this was across the board execution, I would say, so it was anyone one anomaly.
[00:24:33] Right. That makes a lot of sense. Thank you so much.
[00:24:37] Your next question is from the line of Tom Roderick with Stifel. Please go ahead.
[00:24:44] Gentlemen, thank you for taking my questions. Great. Great to hear from you. I'd love to go back to Chris's question earlier. Just around Europe and appreciating the 20 percent. Sure. You said of the new logos are coming from 37 related. Can we just take a step back in Europe? And I don't know if this is a better question for you or for Marty, but I'd love to just hear a little a little bit more holistic discussion of what's going on in Europe relative to market awareness of the desk solution. You know, how many customers are coming to you simply because of ETF readiness versus just, you know, broader awareness of the overall solution base? And and I guess the third part of that is just where are you at with regards to hiring the sales team over there go to market? How fast do you need to build that? I know that's a lot in there, but maybe the broader question is just talk to us a little bit about Europe, what's happening aside from just EBITDA.
[00:25:42] Sure, this is Marty, I would you know, just to touch on first off, you know, we built up the Omiya sales team and in the last two quarters of twenty nineteen in the first quarter of this year and, you know, we're able to fill the positions we needed to fill. They are now, you know, maturing and getting into, you know, more productivity. So we’re very pleased with, you know, with that growth aspect. So we've gotten the sales team we need there for the near term. In terms of awareness in Europe, it's really important to understand Stuart's been very consistent, saying, yes, it is upside in terms of how we think about things. You know, we sell annual reporting, we sell management reporting, we sell integrated risk there. We sell some other regulatory things for banks. You have very large banking customers in Europe. And so we're definitely getting to the point where, you know, people know who we are. There's still a tremendous amount of opportunity there because it's still a small revenue number. And as you know, the EU is close to the same GDP as the U.S. So it really is a big opportunity for us and the ESF. You know, the nice thing about EAF was it did drive platform conversations, but we're still seeing that happen. I mean, when people understand that we're sort of the premium end of that in that we have not only the ability to produce these, you know, regulatory documents you have to submit, but we have the entire platform to pull the data out of your systems of record, you know, collate to create the report and then output it. That's really what's driving our success or not. The fact that we can file a document. I would say this, though, that, you know, that has enhanced our conversations at the top end of that mark at the top, more than half. You know, this is something they know they're going to have to do. They're looking for a solution that has legs and is going to be around for a while and helps them with the entire problem. So, you know, ESF is not really that big an issue for us there in terms of the delay.
[00:27:53] Yeah, that's good color and Marty, if I could just stay on, sort of go to market and sales execution, I suppose it would be a little bit tempting to look at the last couple of quarters. We've had great bookings, you know, great commentary on the broader market and say, OK, good, the market has recovered and the environment has recovered. But on the other hand, it seems like, you know, perhaps your sales execution has improved. And knowing that you handed the reins over to Julie on that front a couple of quarters ago would love to just hear a little bit more about any changes that Julie made with respect to go to markets, what you're seeing on a stay of execution perspective and what that means for the future.
[00:28:35] Well, I think you're spot on, I think that obviously the our customers have adapted to the new normal, as Stuart said, but also we have gotten much more focused. Juli's brought us a lot of discipline in terms of, you know, using metrics not just in sales across the whole organization to really understand how we're optimizing all of our teams. And then we did change our sales management. She we you know, we promoted an insider to take over North American sales, and he's been doing a fantastic job. So there's a little bit of everything there. But in terms of optimizing everything in the company. But, you know, certainly Stuart's point about we have a strong pipeline that's continuing to grow is why we have the optimism we do this. This is a one time catch up thing. We really do see strength in our pipeline and and strength in terms of larger deals, which is a reflection of the fact we actually have a modern platform now that we can do a lot of different things with and customers understand it and partners understand it. So, you know, all of those things fuel the fact that we're seeing bigger deal sizes and a stronger pipe.
[00:29:51] Yeah, wonderful, really helpful commentary, appreciate it. Congratulations.
[00:29:56] Thanks.
[00:29:59] Your next question is from the line of Brian Peterson with Raymond James. Please go ahead.
[00:30:04] Good evening, gentlemen, and congrats on the strong results. So I wanted to dig into the booking strength a little bit. I know you've had a lot of build up and expanded relationships with the partner channel. Any commentary on how to partner channel ramp this year? Contributions in the quarter in Colorado?
[00:30:22] Sure. I'll give you some color. Certainly partner contribution is becoming meaningful. I mean, it's actually becoming a meaningful part of our go to market and our new sales. Remember, we've talked about the fact that we’re behind the normal life cycle of a partner involvement for a company our size, mainly because we just rebuilt our platform and now there are platforms we built. They have many more opportunities to make money. Our partners can see all the different ways and all different solutions. And they're starting to bring solutions to us as partners are saying we could use it for this solution. They help us build it out and then they take it to their to their their client base. So we're seeing good progress. Obviously, we want to see partners involved as much as possible, not only to accelerate and grow the size of deals, but also to deliver them. And, you know, we're definitely looking to have partners be the primary means of delivery for our solutions. And, you know, of course, if they if they're going to take us into other markets, markets they're more familiar with, that's, you know, a very cost effective way for us to move in certain markets, only certain markets where we don't go unless we have a partner. So we're making good progress. We have a long way to go. I think there's a lot of upside in terms of, you know, a partner, you know, development for the company. But we're making good progress.
[00:31:51] Marty, there is a follow up I just to reference the platform. Are you thinking about feature on the investments? How are you thinking about adding to that maybe from an organic or inorganic investment?
[00:32:06] Well, you know, I would say that now that our platform has been delivered and we have you know, I want you know, it's really important for me 90 percent of our, you know, recurring revenue or the annual contract value has moved to our new platform. That was a huge feat. I mean, we you talk to companies who move customers from one platform to another. And actually our retention rate was higher than a year ago. So, you know, that's really a substantial accomplishment and on top of that, it's enabling us just to do bigger deals, to build the pipe and to, you know, really involve our partners. Going from one part of your question, what was that? Oh, it's great to hear, but no, go ahead. Not I forgot the second part of your question, you had a two part question. Oh, no, I guess I was just trying to think about empowering and learning. You getting. I apologize. The R&D investments, because we delivered the platform. We're now in a really great place to develop fit for use solutions. I alluded to that. And every time we bring a new you know, a specific, you know, solution to a market gives our sales team a whole new vein of potential new bookings. And so we're going to, you know, use a significant amount of our our dollars to develop those new applications. Now, most of that money, when we develop new applications, also builds on our platform. So it really helps not only the, you know, having it for you solutions that are salespeople can sell, but it also continues to expand and create more value in our core platform so that that's how we're going to optimize the use of that R&D going forward.
[00:34:08] But let me jump in, Brian, because you asked specifically about inorganic or M&A as it related to R&D and, you know, it's certainly an important screen for us when we're looking at acquisition opportunities about, you know, how well the technology could integrate with our platform. And that naturally leads us to the buy versus build analysis. But as Marty indicated, the new platform is is in great shape and is much, much improved in terms of its ability to integrate with new software. So it's you know, it's giving us broader latitude. But by the same token, it's also easier for us to build on. So it's it's a higher bar to in when it comes to build versus buy.
[00:35:01] Thanks Stuart.
[00:35:05] Your next question is from the line of Rob Oliver with Baird. Please go ahead.
[00:35:10] Hi, good evening, gentlemen, thanks for taking my question, Marty, one for you. And then, Stuart, I had a follow up for you on just on the platform. There's been a lot of discussion of it. And it really sounds as if, you know, some some customers are really waking up to what they can do with the platform. And that's resulting in, you know, a nice spike in the outlook that we saw this quarter. And, you know, our checks have certainly been positive on it. So I'd love to hear in particular on the extensibility comment that you made. I know you guys have talked a bit about the work and some other markets. Just was wondering if you can get an update. And you talked a little bit about some of the R&D dollars going that way, but perhaps an update on the first opportunity and any other opportunities you guys might might be eyeballing right now.
[00:35:57] Sure, the perfect opportunity is is really a good opportunity for us for two reasons. One is that we have to do almost no modifications to the platform other than put a different taxonomy in it for the XBRL. So it was a really natural market to go to. Second off, it gives us entry into a whole bunch of new companies that are private and we haven't had as much exposure to us. So we view it as you know, it's obviously a substantial amount of potential revenue for us. But more importantly, it's a good example of how the platform can be used. Almost no R&D investment. And then it also gets us into a whole nother set of companies, mainly private energy companies that we didn't have access to before in terms of some, you know, opening offerings. So, yeah, work has been a really good example. The best example that, you know, we feel comfortable talking about now is global CSR reporting. That has been just a wonderful experience. We put it through a very structured incubation program. We learned how to sell it before we invested. We figured out who the competitors were to the whole, you know, a whole incubation process. And now we're in. And obviously the result was very positive. When we went to market, we knew how to message. We know how to sell it. We knew what the price points should be, but the willingness to pay was and it was very successful. Now we have several solutions in that same incubation process. I really don't like to talk about them in phone number one, we verify we're going after them. Number two, I don't want to alert competitors, but the fact that we built a more structured incubation program and the success we've seen in global statutory reporting really, really bodes well for us in the future.
[00:37:50] Great. That's that's very helpful color. Appreciate that. You made a comment about, you know, some higher sales headcount in the quarter and I think that wasn't Europe or was that the tail end of Europe hiring or were you guys already done? And if not, you know anything about that, that we can flush out with the North America and we'll there I know the general sales force will. It sounds like they'll be the ones going after these more specialized opportunities that come from the extensibility of the network. But, you know, would you add on, you know, vertical sales people in some instances as well as well if needed? Thanks very much, gentlemen.
[00:38:27] Sure. So, as Marty indicated, we started the hiring of quota heads in Indonesia beginning in third quarter last year and then carried it through the second quarter of this year. So it took us about a year. And so the comparing third quarter this year, the third quarter of last year, we have higher headcount as a result of that because we didn't have those heads on on our books the third quarter last year. There have been, you know, some hiring in the U.S. as well. So that that I think that answers that particular question in terms of, you know, selling the extensibility. I think that's a responsibility of all of our sales teams. We have some that are specialized on particular solutions, but our account owners are trained to sell to sell the broader platform.
[00:39:26] Thank you.
[00:39:27] Again, your final question is from the line of Mike Grundon with Northland Securities. He's going AK.
[00:39:36] Thanks, Michael. Mike, thanks for taking the questions, maybe just on Asia-Pac, is there anything you recall their last couple of quarters and it's still early, but the color there.
[00:39:48] It's early or, you know, we're getting some winds there and we're you know, we're slowly building up a team much like we did in the media several years ago. We want to get some reference customers or use cases polished up, but we want to do their, you know, develop partner relationships. But that's going really well. And like you said, it's very early days, but we're accomplishing what we wanted to do there. So it's you know, the new platform has localization for some of the more local languages. So that's, you know, enabled us to really get serious about it. But up till now, we're pretty much on track.
[00:40:25] I would add one thing, which is that the focus on distribution in Asia-Pac has really been around partner enablement. That's that's really where we've been focusing our sales efforts. There's certainly partner enablement and amenity, but there's also, you know, big direct sales team in Omiya.
[00:40:48] Got a couple things, and then just in the. In the queue kind of industry breakdown, so needing to call, there were some of the hard hit industries without. Commercial real estate or hotel travel type stuff, or is it pretty broad based where you're not seeing much of an impact?
[00:41:08] So, you know, we're obviously not selling a lot to airlines these days or the to the hotel companies, but we we do tend to skew on larger. But, you know, among our customers, some of the retail receipts have also been hit, but it has really not translated into any meaningful impact on our financials.
[00:41:37] Gotcha. Thanks.
[00:41:40] And there are no further questions at this time, I would like to turn the call back to management for closing remarks.
[00:41:48] Just like to thank everybody for joining and remind the group that we have an investor day scheduled for November 19th and hope to see you there.
[00:42:00] Thank you, gentlemen, ladies and gentlemen, this does conclude today's conference call. Thank you for participating. You may now disconnect.