Hello, and welcome to the Everbridge Inc.'s second quarter 2023 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touchtone phone. To withdraw your question, please press star, then 2. Please note, today's event is being recorded. I would now like to turn the conference over to your host today, Jeff Young. Mr. Young, please go ahead. Thank you, operator. Good morning, everyone. Welcome to Everbridge's earnings call for the second quarter of 2023. With me on today's call are Everbridge President and CEO, David Wagner, and Executive Vice President and CFO, Patrick Brickley. Before the market opened, we issued our earnings release, which can be accessed on the investor relations section of our website at ir.everbridge.com. This call is being recorded, and a replay of the teleconference will be available on our investor relations website at the conclusion of today's event. During today's call, we will make forward-looking statements regarding future events or the financial performance of the company that involve certain risks and uncertainties. The company's actual results may differ materially from the projections described in such statements. Factors that might cause differences include, but are not limited to, those discussed in our forms 10-Q and 10-K, as well as other subsequent filings with the SEC. Information provided on this call reflects our perspective only as of today and should not be considered representative of our views as of any subsequent date. We explicitly disclaim any obligation to update any forward-looking statements or our outlook. During today's call, we will refer to certain non-GAAP financial measures. A reconciliation of our GAAP to non-GAAP financial measures is included in our earnings press release, which you can find on our investor relations website. Our earnings press release includes highlights from our second quarter of 2023, in addition to our financial results and outlook. After we review our business and financial highlights, we will open the call for questions. With that, let me turn the call over to Dave. Dave? Thanks, Jeff. Good morning, everyone, and welcome to Everbridge's earnings call for the second quarter of 2023. We delivered solid financial results for the quarter, which we released earlier this morning. For the second quarter, we achieved revenue of $110.6 million, an increase of 7% year-over-year, adjusted EBITDA of $18.3 million, an increase of $13.5 million from a year ago, and annual recurring revenue of $395 million, up $7 million quarter-over-quarter, and 9% year-over-year. These solid results reflect the work the team is doing to improve our overall operating efficiency as we execute toward our long-term objectives. I just celebrated my first anniversary of sitting here at Everbridge, and as I reflect on the year, I am proud of the progress we have made. We are much more aligned as an organization. We have focused our product development efforts on our core CEM platform, and we've achieved several key delivery milestones that are improving customer value and satisfaction. We have simplified and streamlined our go-to-market, reducing our non-GAAP sales expense by 9% year-over-year for the first half, which is a major contributor to the increase in trailing twelve-month Adjusted EBITDA from $12.8 million in the year ago period to $68.9 million this last twelve-month period. Over the past twelve months, we've reduced our net debt by approximately $61 million to $287 million. I am deeply grateful the work we've done together as One Everbridge to achieve these goals and to deliver the results noted above, which are important for our longer-term growth. These accomplishments notwithstanding, we are continuing to experience lower overall bookings than last year, primarily in deals of greater than 250K. On the positive side, based on continuing momentum in smaller transactions, the strength of our net retention, and careful cost containment, we remain on track to deliver $85 million of Adjusted EBITDA in 2023 and are on track with our long-term model of reaching the Rule of 40 by 2027. Today, Everbridge is delivering organizational resilience at a global level in a way that none of our competition can. Our customers need our solutions more than ever. Weather events and social unrest are increasing in both frequency and intensity globally, and boards of directors and investors alike are looking for their management teams to be increasingly proactive in managing the impact of these risks for their people and business operations. With our strong customer base of leading enterprises and governments, we are becoming synonymous with resilience, and our customers are sharing with us every day incredible stories of resolve, of continuity, of lives saved, and assets protected. Now, I will turn the call over to our CFO, Patrick Brickley, to provide details on our financial results. Patrick? Thanks, Dave. I'm pleased to report solid execution, which produced revenue at the high end and adjusted EBITDA above the high end of our guidance range. The strategic alignment program that we implemented during 2022 to streamline our operations is continuing to deliver profitable organic growth. I will now recap our results for the second quarter of 2023, followed by our outlook for the third quarter and full fiscal year. For full details of our P&L and reconciliation of GAAP to non-GAAP measures, please refer to our press release. For the second quarter, our ARR increased to $395 million, up 9% year-over-year. Revenue was $110.6 million, up 7% from a year ago. Revenue from subscription services was $102 million, up 8%. Our gross revenue retention rate remains within our target range and meaningfully higher than the gross revenue retention that we experienced in the year ago period. We signed 50 deals over $100,000, down from 63 a year ago. Like in Q1, our average deal size in Q2 was lower than what we've seen in recent quarters. Our CEM customer count increased to 373, up 38 sequentially and up 67% year-over-year. We continue to see healthy year-over-year improvements in our profitability and cash flow, reflecting the substantial ongoing improvements that we are making to operational efficiency across all areas of our business, and in particular, within sales and marketing, and research and development. GAAP gross profit was $77.5 million, a margin of 70% compared to the year ago period's result of $69.7 million, or 68% margin. On an adjusted basis, gross margin was 74%, compared to 73% a year ago, demonstrating growing efficiencies from platform integration and optimization. GAAP net loss was $15.1 million, or negative $0.37 per share, compared to the year ago period in which we generated a net loss of $36.2 million, or negative $0.91 per share. On an adjusted basis, we generated net income of $13.4 million, or $0.31 of diluted earnings per share, compared to the year ago period in which we generated net income of $1.5 million, or $0.03 per share. Our adjusted EBITDA of $18.3 million represents a 17% margin, a significant improvement from the year ago period in which adjusted EBITDA was $4.8 million, or 5% margin. Cash flow from operations was an inflow of $5.4 million, compared to the year ago period in which we had an outflow of $9.9 million. We note that the second quarter tends to be our seasonally slowest for invoicing and cash collection. Adjusted free cash flow was an inflow of $1.6 million, compared to the year ago period in which we had an outflow of $7.6 million. We ended Q2 with $222 million in cash, cash equivalents, and restricted cash, up from $202 million at the end of 2022. Before I turn to our guidance for the third quarter and full year, I'd like to recap the deliberate changes we've made to our go-to-market over the past year. The intended outcomes of these changes are reflected in our second half guidance. First, at our Investor Day in December 2022, we discussed our strategy to focus on recurring revenue, and we introduced ARR as a key metric, both internally and externally, to represent this increased focus. Second, we changed sales incentives in favor of selling subscription services rather than non-recurring revenue, such as perpetual licenses and associated professional services. We've talked on prior quarterly calls about the inherent uncertainty in the timing of perpetual license deals and our cautious view on the second half of this year. This follows two record years of non-recurring revenue, driven by the EU public safety mandate, and in particular, the second half of 2022 included our highest two quarters ever for non-recurring revenue, with over $30 million of non-recurring revenue in that period. Considering these factors, as well as the slower sales of large deals due to a softer macro environment that David described earlier, we are lowering our expectations for non-recurring revenue in the second half of 2023. In addition, in the third quarter, we have taken expense actions, which we expect will reduce our cost structure in the second half by an additional $1 million-$1.5 million a quarter, which allows us to reaffirm our adjusted EBITDA target of $85 million despite the reduced revenue expectations. For the third quarter, we anticipate revenue of between $113.5 million and $114 million, representing year-over-year growth of 2%. This rate of growth is largely a reflection of the year-over-year decline that we anticipate in one-time revenue. We anticipate a GAAP net loss of between $9.4 million and $8.9 million, and non-GAAP net income of between $18.5 million and $19 million, or diluted earnings per share of $0.42 to $0.43. We expect Adjusted EBITDA to be between $23 million and $23.5 million, a margin of 20% at the midpoint, as we continue to drive efficiencies in our operating expenses. For the full year 2023, we anticipate revenue to be in the range of $450 million-$452 million, representing growth of 4%-5% over 2022. This rate of growth is largely a reflection of the year-over-year decline that we anticipate in one-time revenue. We expect a GAAP net loss of between $43.7 million and $41.7 million, or negative $1.07 to $1.00 per share. On a non-GAAP basis, we expect net income of between $65.8 million and $67.8 million, or between $1.48 and $1.52 per diluted share. We remain confident in delivering adjusted EBITDA in the range of $84 million to $86 million, representing an adjusted EBITDA margin of 19% at the midpoint of $85 million. This outlook reflects the quarterly expense savings noted above and keeps us on our trend of continuous year-over-year improvement in quarterly adjusted EBITDA and adjusted EBITDA margin. In summary, we delivered a solid first half. As we progress through 2023, we remain focused on execution, driving profitable organic growth of ARR and maximizing return on our investment. Looking further, we are confident we can deliver the targets laid out at our December 2022 Investor Day, making disciplined growth first investments, and making steady progress towards the Rule of 40 by 2027. I'll now turn the call back over to Dave. Thanks, Patrick. As our 9% year-over-year increase in ARR demonstrates, we continue to grow nicely in a difficult macro environment. In Q2, we closed 50 deals over $100K, up 6 from last quarter and down 13 from Q2 of last year. We closed 1 deal over $500K, down from 3 last quarter and 12 in Q2 of 2022. Our overall transaction size remained steady from Q1 to Q2, is down nearly 40% year-over-year. However, our accelerated digital marketing programs have enabled us to drive higher deal velocity in the sub $100K range. Representing success across multiple industries, we added 38 new CEM customers, an increase of 10 from last quarter, and an increase of 18 or 90% in Q2 2022, bringing our total CEM customer count to 373. 4 of the top 5 CEM deals during the period were new customer wins. Our top 5 new deals included 3 CEM deals, 2 in North America and 1 in Europe, 1 perpetual public warning deal in Canada, and 1 RedSky E911 win. Our total number of new logo deals increased on both a sequential and year-over-year basis. Our top 5 growth deals in the quarter included a $500,000 plus add-on from an existing CEM customer for Smart Security. There were 2 additional CEM deals in the top 5. 1, a Smart Security add-on in the financial vertical, and the other, a Risk Intelligence add-on in the technology sector. The final 2 were point product growth deals, 1 for Digital Operations at a major retailer, and the other an E911 add-on. Our number of add-on growth deals was up slightly from last quarter, down about 10% from Q2 2022. From a retention perspective, our Q2 was solid. We saw good retention in North America, offset by some relative weakness internationally. From a go-to-market perspective, notwithstanding the cost efficiencies Patrick noted earlier, we are leaning in even further with digital marketing and pipeline creation. We are focusing on programs that highlight the value of maturing our customers' resilience posture to help motivate them to buy more. We are also providing dedicated support to each individual sales rep to help them optimize their success. We are pleased that more than three-quarters of our sellers now have one year or more of tenure. As they continue to develop, we are optimistic that their productivity will continue to improve. Finally, we are working to optimize our pricing to better align value in both new customer wins and growth add-on opportunities. Moving to product, we executed on several key technology milestones in the quarter toward our goal of a truly integrated CEM platform, as we discussed at Investor Day. In Q2, we delivered a major enhancement to our critical event management, analysis, and correlation engine. Our customers are now able to apply more complex workflows and variable alerting thresholds, allowing them to fine-tune our system even further. As we continue to integrate Anvil, we launched Everbridge Travel Protector, which is now CEM native. This means that travel risk management customers not only receive standard travel risk information, but also have access to the same high-end Risk Intelligence and single pane of glass as our CEM customers. Everbridge Travel Protector is available as a standalone product, as an add-on to CEM, and over time, we will transition Anvil customers to this new product. We are also modernizing the user experience across the board for our core CEM customers. Everbridge 360, our new integrated platform experience, featuring a refreshed interface, simplified workflows, and customizable configuration across events and data feeds, launched in early July to select customers. Their feedback has been universally positive, and we will continue to roll out Everbridge 360 to all core CEM customers over the rest of the year, and we expect to release new features on a rolling basis. Finally, I'd like to turn to Smart Security. Our Control Center product was used to help keep people safe during the King's Coronation, the largest police operation in the history of the United Kingdom. Over 29,000 police officers relied on data from over 50,000 cameras and devices, with access managed by Control Center. Everbridge was proud to help provide accessible, actionable, situational awareness during such a high-profile public event. In summary, in the 2Q, we delivered another solid performance as we sequentially increased ARR and further expanded our adjusted EBITDA margin. While we are navigating through a challenging macro environment, we are making meaningful enhancements to our core CEM platform and are making disciplined growth-first investments that are allowing us to make steady progress on our short-term increases in efficiency, profitability, and cash flow, and our long-term goal to reach the Rule of 40 by 2027. I look forward to updating you on our progress in the coming quarters. We are now ready to open the call for questions. Steve? Yes, thank you. At this time, we will begin the question-and-answer session. To ask a question, you press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we have paused momentarily to assemble the roster. The first question comes from Alex Sklar with Raymond James. Great, thank you. David or Patrick, I just want to better understand the, the second half of the year growth guide, which I think implies you exit the year at about 1% growth. I appreciate all, all the color on the non-recurring pressure, but can you just give some more color on, on what that factors from a subscription growth standpoint relative to what you were baking in last quarter? Thanks. Yes, that's a great question. You know, the, the large deal challenges we've been having are across both perpetual and, and subscription. Primarily, you know, the, the perpetual deals end up being more of the larger deals, but the same large deal phenomenon is impacting the bookings for recurring as well. You know, as we think about the year and our, our previous full year guide, the 6%-7% with one time flat, you know, obviously now we're, we're, we're calling the one time down year-over-year, and, you know, we're seeing the subscription, you know, down a little bit, but not much. The subscription is, is holding in relative to that beginning of the year outlook, of, you know, in the 6%-7% range, and it's really the one time that's drawn it down. Obviously, we would love for our large deal, recurring deals, to be here. That would have been bolstering our ARR growth and subscription revenue growth further. Anyway, relative to the to how we saw the year playing out and our guide, it's really on the one-time side. Okay, great color. Your comment on, on deal velocity off on subscription, mostly offsetting the, the large deal phenomenon. Just a two-part question on the sales force and go-to-market. You talked about some changes there. John's been in the seat for just about 6 months now. What can you tell us about the changes you're making as part of this, the new cost structure referenced on the call? Those, and, and then separately, you referenced optimizing pricing. Can you just elaborate a little bit more on what that entails? Yeah, on the. Yeah, John definitely has his, his, his feet under him. You know, Patrick alluded to cost savings measures that were taken early this quarter. A lot of those are in the go-to-market, largely around spans and layers and improving overall efficiency. On the good news side, our sales tenure is improving, we're really pleased by that. For the first time since I've been here, our year-over-year tenure sales productivity went down. That's obviously, the large deal phenomena impacts that productivity, but we're really focused on helping each seller become productive in their roles and improving that productivity. John and his management team are really focused on individual sellers. They're focused on getting a little more tighter segmentation in how our, our sellers approach the market, both in the sales organization and in their collaboration with the marketing team and aligning up those programs. I, I, I'd see John delivering a more efficient go-to-market organization and aligning go-to-market organization. As I alluded to last quarter, you know, there's still work to do. You know, I do believe that the majority of what we're experiencing is, is a macro trend, but obviously, we have work to do in our own four walls as well. Okay, great. Thank you. Thank you. The next question comes from Matt Stotler with William Blair. Hey there, thank you for taking my questions. Maybe start with a multipart question on average deal size. So you noted that it, you know, remained kind of, lower than, what you've seen historically in the quarter. Large deal scrutiny and, and challenges is, is very clear. I'd love to just, I mean, just better understand if you're seeing new deals, you know, come in smaller, if customers are reducing spend, or if this is an indication that, maybe you're seeing more success at the lower end of the market versus the enterprise. Any, any additional color there would be helpful. Yeah, it's, it's across the board. The, the new customer deal size down 40%, and the, and the existing customer deal size, 40%. You know, I take, I get back a little bit of, you know, feeling better that at least the Q1 to Q2 deal size was similar. We didn't see a further drop off in, in deal size, although it's, you know, it's pretty meaningful year over year. When you break it down, you know, it's pretty meaningful numbers in the over $500K deal size, and it's, it's largely the impact of those large, you know, those large deals not being in the flow that's driving the average deal size down. I, I do think that, you know, that's one of the focus... switching topics now to the mid-market. That is one of the focus areas that we're, that we're moving into, is more of a mid-market focus. We enjoy a, a very large, a very strong penetration in large enterprises, especially here in North America. That, that cross-selling motion to that base is, is a really important part of what we're doing. From a new customer perspective, we're really dial in on the 10 to 49,000 employee enterprise. You know, still a large company, but, you know, down one segment from where we've got the, the lion's share today. Got it. That's helpful. As, as a follow-up, you noted the drop in sales force productivity year-over-year associated with the large deal challenges. How are you thinking about headcount and hiring for the rest of the year? I think at the beginning of the year, you were planning to be flattish. Is there a situation where you would flex that, you know, up or down, especially given kind of the lower productivity there? Yeah, we called them disciplined growth first decisions that we're focusing on, and this is one we have not made with finality for next year. As I said in the script, we are really pleased that our sales retention has gone up, you know, to a good level now. Not fully surprisingly, you know, as folks are turning- many are turning through their first 12-month period, not all of them are reaching the productivity. You know, it's a challenging environment that we'd expect. You know, as I said, we're leaning in, sales manager to, to seller, marketing support to seller, to make sure that we're supporting those salespeople in their transition from, you know, early, early with the company to tenured. There's definitely a, a, a training exercise and sales management exercise that we're, we're applying rigor to, to, to help drive that productivity higher. Got it. Thanks again. Thank you. The next question comes from Brian Colley with Stephens. Hi, guys. Thanks for taking my question. I'm curious, on the, on the implied guidance, for 4Q of 1%, I'm curious kind of how we should think about 1% for 4Q? I'm curious how we should think of ARR growth in the context, you know, of the updated guidance, and maybe if you could kind of quantify the reduction, you know, how much of it was subscription and how much was, you know, the non-recurring piece? Also, you know, how you feel about your ability to kind of reaccelerate growth into, into next year? Good morning, Brian. That's a great question. You can hear from our commentary, again, relative to the way we saw the year, I don't know exactly what you have in your model or, or the others but from the commentary we gave at the beginning of the year, 6%-7% growth with one-time flat, you know, obviously, then we were planning 7%-8% with the one-time flat, was the way we were kind of looking at the year when we started talking about it 9 or 10 months ago. You know, we're running in the 7s on subscription revenue growth. There's not a lot, but a little bit in, a little bit of noise of the year-over-year compares in the way we were cleaning some stuff up last year. You know, we're saying 4%-5% now with the primarily one time down. It's primarily one time down, maybe 100 basis points out of the subscription side, and it's the one time. I've been using the word one time more carefully. Patrick and I both use it more carefully. You know, the perpetual software deals also drive a good bit of PF. When we say one time, we're putting the PF associated with those licensed deals into the same sentence. Anyway, I hope that so it's not just perpetual, but the one time, is where the, the majority of the shortfall from the way we saw the year in our guide, to where we see it today. Got it. That's super helpful. Thank you. In terms of, you know, the reduction, I'm also curious if there's any specific, you know, verticals or, you know, areas of the business from a product perspective where, where you're seeing. Brian, I'm rolling around. You know, you've known me for a while. I'm rolled- I'm digging in spreadsheets and rolling around in my bed at night, on exactly that question. It is the strangest thing. It is large deals across the board. I, I go through it a million ways from Sunday, and the, the metrics we're giving you are the metrics that matter. It is deals over $250K, deals over $500K and $1 million, that have slowed down. The velocity, I'm, I'm certainly pleased on the new business side. Our, our new business generation, both in terms of number of deals and, and in, in total, was fine. We were off in existing customer transactions, as I said, about 10% year-over-year. It's, there's, there's no, there's no real specifics to it. One thing I'll point out, because, again, when I'm rolling around at night thinking about this stuff, state of Florida, our SLED business was solid. Our SLED, SLED business was solid this quarter. That's not even what I, I point at, Brian. It's been across the board, slowdown in the larger transactions. Great. Thank you for that. Just, just a housekeeping question: did you all report the total enterprise customer count, or is that something that you're not reporting anymore? It ran roughly in place from the last quarter, Brian. We had, similar to what you saw last quarter, we had headwinds related to as we continue to end of sale, end of life, shut down non-core assets. Without that headwind, we would have added a net, roughly 70. Instead, we, we roughly ran in place from last quarter. Okay. Perfect. Thank you for the time, gentlemen. Thank you. Thank you. Thank you. The next question comes from Scott Berg with Needham. Hi, everyone, good morning, and thanks for taking my questions. I have a couple. Dave, you've obviously spoken a lot about the one-time revenues that are down, especially in the government, I guess, kind of verticals, or at least that's my assumption, and it's heavy in the government verticals. Any change of win rates there? Any pricing pressures? Is this just really a continued reflection of those deals just aren't ready to, you know, have decisions made on or just not in the pipeline in general? Thank you. Yeah, on the, on the, on the government side, it is, it's just it's a slowdown in those decisioning processes. I've talked to a couple of, you know, close network people in that, you know, companies in similar spaces. They're seeing the same thing, you know, especially in Europe, getting the larger commitments. It's a slowdown. We do have a couple, a nice opportunities, you know, in the second half. The way, you know, the way things are going this year, we're, you know, we're adjusting the full year to reflect a tougher big deal environment for the rest of the year. Got it. Helpful. Then my follow-up question is on the CEM deals. The number of deals continues to trend higher year-over-year. We know the pricing's down as the, you know, kind of package them and size them maybe a little bit smaller just to drive that initial footprint with some customers. How should we think about the combination of modules that are, you know, comprising these deals? It sounds like you're seeing a shift of, you know, what customers have historically bought within a CEM deal, you know, versus maybe what they're purchasing today. Is that maybe the right view, or are you seeing combinations that are maybe noteworthy? Thank you. It's one of the things I'm, I, remain very positive on. When I roll through that, gross retention in the larger customers, that remains a real strength for us, Scott. The opportunity to cross-sell and upsell those accounts as we, you know, move the, the attach add-on focus, the growth focus, re-remains, you know, really strong. That the big movement in the CEM journey, goes from, you know, Mass Notification, which improves your resilience posture, to be, you know, to be, you know, much more responsive in a critical event, to add the, you know, the visualization risk component, Risk Intelligence component of the product. That's the really big step up, though, but in the CEM journey. So we're doing a, you know, I guess, a better job feeding that smaller, and then allowing the assets and contacts to grow over time than we had been in the past. As I alluded to earlier, we're, we're targeting that. It's not mid-market, but that 10,000-49,000 user enterprise, especially on the new customer win size, because we've got such great penetration already in organizations with over 50,000 employees. Thank you. The next question comes from Michael Burke with Wells Fargo. Hi, thanks for taking my question. I just wanted to follow on to Scott's question earlier on the large deals. Relative to Q1, would you characterize the environment, the macro environment, as getting meaningfully worse? Are some of these deals that are slowing down, are these deals you still expect to close either later in the year or potentially in the next? Thank you. That's a great question. So Q1, Q2 to Q1, was relatively steady for us. You know, steady on the deal size decline, which is the number one thing that we're concerned about. You know, if I put a positive spin on it, we had 1 over a $1 million deal in Q1 and none over Q2. So we had, you know, better volume in the sub in the smaller deal size in Q2 than Q1. We were down at Q2 over Q2 in numbers of tract transactions into installed base. I'd call it, you know, a steady Q2, from Q1, not a deterioration. The last two weeks of June were, you know, less than we had expected. So, that was a challenge, and, you know, we've been, you know, flowing, you know, some of those into this quarter. Again, as we stand back from the year, we're seeing, you know, we saw Q2 relatively steady from Q1, and we're adjusting to expect a tougher big deal environment. Got it. Thank you. A quick follow-up. Did you say that the perpetual deals is impacting quarterly revenue by $1 million-$1.5 million in the second half? No, that, what we did say, the $1 million-$1.5 million, that was in Patrick's script. That's proactive cost adjustments we made in early July. That's more going to help you bridge the EBITDA guide. So you look at the, you know, round numbers, $8 million down in revenue guide, you're holding the 85. Well, that's, you know, the $8 million, a part of that is professional services, so you don't have full margin. So 75% margin, you get, you're at $6 million. The 1.5 per quarter cost savings, you know, gets us 3 of it, and then the cost discipline that we have been evidencing through the first half, enabling our EBITDA beats in both Q1 and Q2, that discipline continues through and lets us stay on a path for the EBITDA guide despite the shortfall in revenue. Helpful. Thank you. Thank you. The next question comes from Ryan MacWilliams with Barclays. Hey, guys. Thanks for taking the question. Just one more on large deals. Love to hear your opinion on, like, how much of the headwind to these deals is in Everbridge's control versus macro? Like, do you think Everbridge is just more later cycle for software purchasing, and it could just take some time to work through the cycle and for macro improves to then get bookings and some of these sales efficiency metrics to improve? Yes. Hi, Ryan MacWilliams. Good, good question. Again, one that I've been turning around as I stare at spreadsheets and roll around in my bed at night. To answer your question, I feel like it's 70/30. 70/30 macro to, to micro, the company-specific things. You know, we, we are license-based on contacts, and so those contacts are primarily employees, and we're focused in the in the over 50,000 employee vertical. And those companies they aren't hiring at, at the rate they were. I do expect third companies to be the strongest coming back out of this turn as well. You know, everybody's taking a turn on profitability. You know, I think as they get to the second turn of the crisis, you're suggesting, and start to look at really driving productivity, we have really strong ROI metrics. You know, we are in our core customer base, that the efficiencies they get from their security operators by implementing a Critical Event Management platform are really strong. I think as we turn back towards which software is gonna make our, our teams more productive and, and really drive the productivity gains, I think we're gonna be in a, again, in a good spot as we, as we turn through this. Appreciate that. Pleased to see the CEM sales still doing well. From an individual product perspective, anything to call out on the momentum for Mass Notification and Safety Connection? No, I, one of the things that I'm, I'm pleased about year over year, you know, Patrick alluded to it, you know, the gross retention is improving and, you know, especially in the Mass Notification side. We've got, we've got that, you know, improvement from negative growth to slightly positive growth, improved year over year. That's a, a trend I'm actually pleased with. I, I should, and maybe I overemphasized, but I feel like I should emphasize more the really great work that our product teams are doing. You know, we started with a, a premise that, that focusing and investing on our core is the right approach, and we're getting really good feedback with the investments and the improvements we're making, driving more value for our existing customers. That's, that is a bright spot for me, in, in how we're executing to deliver for customers. Appreciate the color. Thanks, guys. Thank you. The next question comes from Mike Latimore with Northland Capital Markets. Great. Yeah, thanks. How about just pipeline growth? You know, is it growing nicely? Has the pipeline slowed? Just overall pipeline growth? Yes. Pipeline at the macro is not growing well because the bigger deals aren't there. The, the velocity, the velocity is maintaining or, you know, maybe even slightly improved, especially on the, on the new deal side. That's what we're leaning in. You know, you wanna sell what customers wanna buy, and the, and the customers are, are wanting to buy in more disciplined, smaller amounts right now. Yeah. And the, the CEM deal count obviously strong. How many of those were upsells into kind of the global 2,000? You know, how is that pattern playing out there? That's a good question. I don't have that in front of me. I'm looking at, at the, the deal list. You know, as I said, we're very, very nicely penetrated in North American enterprises with over 50,000. Like, there are, there are more to win, but our penetration is great there, and the new logos are in the, in the next tier down size account, for sure. Okay. just on Mass Notification, sounds like a little bit of growth there, which is good. Is that, what, what would cause that? Is that, just more focus? Is that a pricing change? Is that product enhancement? It, it's, you know, it's primarily focus, which has manifested itself, first in the product organization. We've taken time, as I said, to go back and make sure that that segment of the market, we are, yeah, we're investing there, to make sure that we retain and grow those core customers. We've done some really nice things. I've been listening carefully to county, county emergency managers across the country, and we're building improvement in our core flagship product. So anyway, I'm really-- I'm proud, really proud of the work that the team has done to, to, to double down there. We're tightening in the integrations with other soft parts of the platform to make it even easier to use. We're definitely putting some, some attention there. Yeah. Okay, thanks. Thank you. The next question comes from Kash Rangan with Goldman Sachs. Hey, guys, this is Jacob on for Kash. Thanks for taking the question. I wanted to ask, how many of these CEM deals, and I apologize if this was touched on earlier, but how many of the CEM deals, or, or CEM additions this quarter were a result of upselling from the existing customer base versus net new customers? If we could maybe touch on the dynamic around the international segment, it seems like it, it's been a little bit of weakness for the last few quarters. Anything you're seeing there that, that might be willing to call out? Yeah. The new CEM deals, again, is a little bit of a bright spot, smaller, but the new deals are 50%. If you round, like, top 5, I think 3 of the top 5 transactions, new transactions were CEM deals. So that's a, that's something I feel good about. You know, international, you know, I think it's no secret that the EU has, you know, its own challenges, you know, especially the UK, where we have a good bit of business. You know, we're solid there, but not the same level of growth that we were seeing in prior years. Again, we've been more disciplined with our investments, particularly, internationally, where, you know, we were, you know, overinvest is a strong word, but we were invested heavily to penetrate those markets, and we're making more disciplined, CAC-based investments. We've been adjusting international a little bit more than North America. Sounds good. Thank you. Thank you. This concludes the question and answer session. I would like to return the floor to management for any closing comments. Thank you, Keith, and thank you, everybody, for joining us on our second quarter call. Patrick and I and Nandan will be very active, and especially the next two or three days, with investors and some, and some conference activity. Look forward to connecting with, with many of you in the next 72 hours, and, and, hopefully, all of you again in 90 days when we report our third quarter results. Have a great day. Thank you. The conference has now concluded. Thank you for attending today's presentation. 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