Hi, everyone. Welcome to our nineteenth Annual Tech Media and Consumer Conference. My name is Scott Berg. I lead our enterprise software and SaaS research efforts here today. Today with us, we have ON24. We have the company's CEO, Sharat Sharan, who's going to walk us through a couple slides, and I can help facilitate some Q&A at the end. I do have my own questions prepared, but if there's questions from the audience, there is a Q&A button in the window. Feel free to enter any questions there or email them directly to me at sberg@needhamco.com. Also with us today on the panel, we have the company CFO, Steven Vattuone, who's going to potentially help with any questions that we have there as well. Sharad, the floor is all yours. Thank you, Scott. Good morning, good afternoon, good evening, everybody. Delighted to take you through the presentation. It's gonna be maybe 15-20 minutes. So just overall, for people who are getting introduced to ON24, ON24 is a cloud-based sales and marketing platform that helps B2B companies convert customer engagement to revenue. Our data-rich system of engagement allows thousands of companies to convert millions of prospects to customers. Overall, $133.3 million in core platform ARR. The company is EBITDA profitable. Q1 was fourth quarter in a row, 77% gross margins, over about 1,700 customers, and a large TAM for our solutions. Our focus is enterprise customers, over 1,000 employees. And just to give you a sense, you know, over 324 customers, greater than 100K ARR. And when I talk about the enterprise focus, over 50% at the end of Q1 of our ARR is in multi-year agreements. Two-thirds of our ARR is in customers greater than 100K, and then customers using 2+ products is over 37%. All these metrics are at a high at the end of Q1. These numbers that I'm showing are at the end of 2023, but these overall for Q1, these numbers are at a high. Our customer list is a who's who. We focus on 6 or 7 core verticals, from 3 of the largest 5 technology companies, with Microsoft and SAP, Salesforce, ServiceNow. Three of the 5 largest manufacturing companies. Financial services, we do well in asset management and insurance, so you see some of the largest companies there. Life sciences, professional services, media and information technology. These are companies that are standardized on the ON24 platform. And why are these companies standardized on the ON24 platform? Because we generate tangible ROI to these customers. We are the number two pipeline-generating channel for ServiceNow. For AbbVie, a healthcare professional provider, 200% increase in healthcare professional engagement. For somebody like a AAA, using this channel, compared to what they were doing before, 40% more sales, 15% conversion to meetings. These are, these are numbers from our customers. And when you think about the digital transformation that is going on in sales and marketing, we have some major tectonic tailwinds that are going to be supporting ON24 as we move forward. We do recognize that we are seeing some headwinds in the immediate future, especially right now, due to constrained sales and marketing budgets in this macro environment. But that being said, as you look forward, 80% of B2B sales and marketing interactions will occur in digital channels, according to Gartner, by 2025. 70% of B2B buyers are doing their research online, like you do in your B2C life. That's the self-educated buyer, needing an engagement platform before they decide to buy. And AI is going to change sales and marketing engagement. 47% of the marketing teams already are planning to use AI for customer engagement. So major trends behind ON24. And when you look at ON24, we have a history, over a decade of innovation, when we launched the first webinar engagement product in 2013. Then, as we extended the product by 2018, we launched Engagement Hub and Target, taking it from live engagement to always on and personalized, driving first-party data. And then by 2019, we were growing the company 25%-26%, and then COVID hit. COVID hit, we grew pretty significantly. We launched additional product like Forums, Go Live breakouts. And then in 2024, earlier this year, was the next generation AI-powered ACE offering and the launch of the Intelligent Engagement Platform, and we continue to innovate as we move forward. So very strong DNA in driving innovation all around engagement, first-party data, now intelligence as we move forward. So... And we Focus on mission-critical use cases, like demand generation, partner enablement, customer and product marketing. In the last 18-24 months, these have been a little challenged because technology and manufacturing companies have been a little challenged, so we focused on what we can control. On the right side, we have these mission-critical use cases for digital transformation companies like healthcare professional engagement for life sciences, life professional certification in professional services and financial services, and member enrollment and broker enablement for insurance, like whether it's commercial insurance or healthcare insurance. The right side of this is about 25% of our business, and as we see a little macro assist, we expect both the left part and the right part both to grow. So we've been able to diversify our business in the last 24 months. Now, when we look at the ON24 platform, what is our secret sauce? We built a platform at the intersection of customer engagement and customer data. A cost-effective platform to drive revenue growth. So if you think about physical events, they don't provide you any customer data and expensive, good customer engagement, email marketing and others, very limited engagement and data. Only ON24 provide, if you look at the right, high customer engagement and customer data. A typical ON24 live experience, people spend, there are 200 people who spend over 50 minutes, and they engage with 20+ data points. Last year, we delivered over 1 billion engagement minutes, and over 2 million professionals per month come to the ON24 platform. And so moving on, when we talk about data, I'll show you how, I, I'll take you through how a prospect leverages ON24 to become a customer. But when you look at the data advantage that ON24 has, I talked about physical events. Physical events are expensive. All you do is they tell you that you attended the event. If you do email marketing or something like that, a click, a view, or download, that's not... ON24 provides you. I talked about 20-plus data points. Every experience has about 20-plus data points. Of course, how long you attended and those kinds of things. But what kind of polls did you answer, surveys, Q&A? What kind of calls to actions you did? You can request a meeting. You can connect with salespeople. All that really helps generate more engagement, more data points for you. With the launch of the... Then next, I'm gonna move a little to the product. We launched the Intelligent Engagement Platform in January this year. So now we are bringing together best-in-class experiences. We are known for webinar experiences, hybrid and virtual events, content hub, and landing pages. So we've got the best-in-class experiences now with AI-powered ACE, which we launched in January. We have launched personalization, derivative content, and others. So now we are bringing together best-in-class experiences, personalization, and content. All of those drive first-party data. You, as a company, can learn more about your prospects, and then we provide you all that first-party data into your sales and marketing ecosystem, into your third-party integrations. That's the foundation of the ON24 Intelligent Engagement Platform. With AI, with the emergence of AI, AI is going to fundamentally transform sales and marketing engagement, and ON24 intends to be the leader in driving that. Another way to think about this, the middle layer is the best-in-class audience experiences: webinars, content hubs, landing pages, virtual events. On the left is the continuous engagement. How do you use AI-powered ACE to drive personalization, additional nurtures? Then all of that is driving more data and analytics. And then at the bottom, we show you the various use cases that we are focused on. In addition to the Intelligent Engagement Platform launch, we also launched a new pricing framework, which is really segmented simply into three categories: Essentials, Standard, and Advanced. Both Standard and Advanced include AI-powered ACE, our capabilities, which make the platform a lot more intelligent and personalized. But people who don't want that, they can also buy the Essentials pack. Now, what I'm gonna do is in the next five minutes, I'm gonna share with you how the platform works and how a prospect who is self-engaging, who's trying to find information, how she becomes the customer of one of the companies that is using ON24 products. So I talked about how, like B2C, all the B2B prospects are doing a lot of their research before they go and engage with companies. So this is Paula Price. She's the Vice President of network security at a company called Metropolis. Let me show you how Paula, who is looking for a security product for her company, how she starts engaging with a company called CloudTech. Let's say that is your company. Now, all CloudTech has about Paula is her name in their database. So they send out an email inviting people to this live webinar experience. Paula is interested. She's looking for a security product, so she's interested and intrigued. She comes in, she sees it's personalized, a personalized webinar showing CloudTech's colors. It's branded, it's got engagement tools, it's got surveys, it's got related content, it's got other stuff. Then it's got a free trial widget that allows them to... people to register for a free trial. It's got conversational intelligence. You can integrate things like Drift and others. It's got video breakouts. You can do one-on-one meeting with sales. It's got its ability to personalize, and everything we do is enterprise-scale, so automated captioning. So Paula comes in, she spends 30 minutes, she downloads some information, she asks a question, and she also registers for a free trial. Now, the system knows something about you. Earlier, it only knew that, you know, only had your email. Now, as Paula has registered for a free trial, CloudTech also has another product from ON24 called ON24 Target. Within 30 minutes, they send her her credentials for a free trial using the this product or ON24 Target. It's a personalized landing page. It introduces her to her sales rep, Marcus. It also says, "Hey, check out the CloudTech Learning Hub," and also sends her her keys to the free trial. Paula is very intrigued. Paula feels like, you know, she's, she wants to learn more. She clicks on the CloudTech Learning Hub. Now, when you go to the CloudTech Learning Hub, this is based on another ON24 product called ON24 Engagement Hub. This company has bought multiple products from ON24. She comes in here, she sees they've got best practices here in this learning hub, well, the best practices in, for financial services, it's got case studies. So she comes in, binges on all that content. Do recognize that everything she is touching is adding to her digital body language, adding to her data profile. She also sees that they have a virtual event, a virtual event coming up in the next couple of weeks, and now she's very interested in learning more, the company, you know, strategy, what the company is focused on doing. She wants to network with other, other customers and others, so she registers for that, too. Now, when she registers for that, her sales rep also knows she's coming to this virtual event. Now, this is based on another product of ON24 called Go Live. Go Live is a product that allows video-centric networking, keynotes, et cetera, for a whole day. So Paula comes in, she listens to the keynote, she goes to the various, other panels, and she also networked with, networked with peers. But then she also, her sales rep, Marcus, knows that Paula is going to be joining this event, so they set up a virtual sales call. And by now, Paula is very, very interested in the offerings that CloudTech has, and she and Marcus basically engage in, in a pricing discussion. And by the end of this conversation, Paula has decided to move forward with, with, with CloudTech, and now Marcus from CloudTech has a new customer. So I've shown you in 4-5 weeks, how, how Paula, who was just self-engaging, has progressed in the sales cycle to become a CloudTech cus-- CloudTech's customer, but it all comes together here. That was, those were the experiences. It all comes together from when you think about the profile, she was just a name and email in their database. Now, what CloudTech has learned about Paula, based on our analytics, the prospect engagement profile, her lifetime activities are high. She's spent 8 hours and 70 minutes of engagement time, 374 touches. She has done 3 meetings, 1 free trial conversion, and based on her interaction, using our AI and machine learning, CloudTech now knows her business interests, so that they can send her more recommended content. All that through the power of our platform, the power of the data in our platform. And now, with the launch of ACE, AI-powered ACE, we are innovating in 3 core areas. One is about personalization at scale. In 1 live experience, you can have a different experience for customers and prospects. If you have 5 core channel partners, you can have a different experience for each channel partner. You can have different surveys, you can have different calls to action, you can have different certifications for different people. If people are coming from EMEA and APAC or North America, you can have different experience. We've launched this capability to our customers. They're very excited about it. The second area is what I call automated content creation or derivative content. Once a live webinar experience is done, that's long-form content. That's 50-55 minutes of content. Within the click of a button, within our platform, you can get e-books, blogs, video snippets, everything coming out of that content. 5 times more content than you started with, all by the click of a button. Then additionally, what we allow our customers to do, take that content and some of the video snippets and key moments and continue to nurture the customers and prospects who get more AI and data points. We are seeing some very, very strong feedback from our customers about AI-powered ACE. In Q1, we had just launched it in January, the ARR from AI-powered ACE reached double digit as a percentage of total growth ARR we delivered in Q1. So very excited about that. Then the last thing that I want to talk about the platform are the deep integrations. With all this data that we have, we have built these deep integrations with Marketo, with Salesforce, with HubSpot, in life sciences, life sciences with Veeva, with Dynamics, with Salesforce Pardot, so that all that, when somebody says they're ready to buy, all that data is available in close to real time in a customer sales and marketing ecosystem. Very important part of our, our competitive moat. So ladies and gentlemen, what I've shown you is the flywheel effect, experiences driving engagement, driving personalization. What it does is creates first-party data and the AI advantage using with ON24. Our focus is enterprise customers. So, you know, whether it's enterprise scale and reliability, security and compliance, accessibility and captioning, live global support, that's what our platform allows our customers to do. So one platform for digital engagement, whether you're looking for partner enablement, professional certification, member enrollment, HCP engagement, demand generation, it's one platform. Our focus on first-party engagement data, one platform digital engagement. The TAM for our solutions is very large. We build this bottom up. That being said, we have to grow into this TAM. It's over $40 billion, so large TAM. And finally, in the last 4 years, as we have evolved the company, especially in the last couple of years, I want to show you how the company has been able to control what it has been able to control in a challenging macro environment. But we have diversified our customer base. So tech and manufacturing used to be over 53% of our install base in 2019 at the end. It's now 41%, and life sciences and financial services are over 33%. They used to be 20%. So we've been fundamentally able to diversify our business as we move forward. So that, ladies and gentlemen, is the ON24 story, and I'd be happy to take more questions. Excellent. Thanks, Sharad. So we will take questions from the audience, if anyone has any they would like to ask. Once again, either put them in your Q&A window that's on the presentation screen, or feel free to email them directly to me at sberg@needhamco.com. But I do have a few here to get kicked off, Sharad, that we can start with. You know, within your presentation, you talked a lot about ACE, and I know you're really excited about ACE as both a platform and what it can do for the business, over time here. And it touches on a key trend that we've been seeing over the last probably 6-12 months, is how the probably the greatest demand area for companies around the marketing stack is around products that can drive further personalization through their sales process. Whether it's email marketing, whether it's something like webinars, whether it's something like e-commerce, but any touch points that a company or brand has with a customer, they want to try to personalize that trend, and these newer generation AI technologies are helping drive that. But how difficult... If I'm a customer adopting ACE for the first time, how difficult is it to personalize that experience for, you know, the different customers I may have coming in and viewing my webinars? I think... So just overall, you know, it, there, there, it could be years of, of complexity. But first of all, I think you're exactly right. Personalization and being able to hyper-personalization at scale, especially how you engage with customers through the, through the buyer's journey, is, is gonna be a standard. You know, very, very, very important. Now, there are multiple, especially as it comes to ON24, and we have launched this, and it is... The feedback from our customers is quite exhilarating. It's, it's very, very positive about the personalization. Now, at level one, Scott, all of our customers have to fill a registration form, right? So and we know, you know, what their titles are. We know what geographies those people come from, right? And so on and so forth. We know what companies those people come from. So at its simplest, it's registration-based personalization at minimum that you can provide on the live experience. Then we provide additional capability that allows you to, you know... Many of these people use Marketo or Salesforce and others. When they have done the segmentation of their customers in those tools, we are able to basically import those segments also to continue to carry their segmentation from their marketing automation tools within ON24 and to provide a personalized experience. But that's the next tier, so you have to be a little more sophisticated for that tier. Then the third thing also that we are doing is, across our platform, in addition to the live experiences, we have these always-on experiences also, and the personalized landing pages and the others. We can also personalize that based on not only the levels of personalization I talked about, but we have things like 6sense integrated. So based on your intent, it can also provide you completely different configurations of personalization. So we believe this is that important; it's part of our AI-powered ACE package, and I expect that on our platform, we are going to continue to see much higher levels of personalization as we move forward. So I wanted to next talk about the changing kind of makeup within your business and, you know, what your customer base looks like. You showed the slide with the two pie charts up there, that talked about the different verticals and how that's changed since the IPO. You also discussed life sciences, I think pretty heavily over the last year in terms of some successes that you're having there. But I wanted to talk about the financial services segment in particular, because I have historically always viewed your platform as being best positioned in the B2B sales environment. You certainly, you know, mentioned that today as well. But in the financial services verticals, to me, that's a lot more B2C use cases than B2B. How should we think about the types of customers that you're having successes with there, and maybe what those use cases look like? Yeah. So on the financial services that you specifically asked about that, the two largest categories in financial services for us relate to asset management and insurance. And in the asset management category, it's customers are, well, you know, are companies. The companies are focused on driving more assets under management, providing more thought leadership. There's elements of broker enablement and training and elements of that, so multiple use cases in that. There are some elements of regulated industry and other things also. That's an important category for us, and some of the largest asset management companies in the world. I think we talked about three of the top five asset managers in the world are on the ON24 platform, and we see that not only in North America, across the world. Then the other category where we see traction is in the insurance category, where people are trying to reach out to not only consumers, but they're also enabling and certifying brokers and kind of enrolling members on one side and certifying brokers on the other side. So those are the two categories which are the center of gravity for us on the financial services side of the business. And based on that, I mean, I shared the numbers. I think financial services has grown significantly for us as a category, as a percentage of ARR in the last four years. So if we look at your business, probably the most frequent question that I've had, and I'm sure you've had this as well, but it's the one item that I think has kind of limited some new investors to come into the stock recently, is around ARR growth. ON24 was certainly a beneficiary of pandemic and some of the jump online, and you all have been pretty vocal about, you know, some of the downsell trends and budgeting pressure that you've experienced over the last couple of years in the business. But the primary question within all that, because I think most understand the trajectory of not just yours, but other businesses that had similar impact, is really more about when the business kind of bottoms out. When does ARR start growing again? When do all those downsell or churn components, you know, really, fully get flushed out of the model? And you've been saying it for a couple of quarters now, you're pretty convinced it's gonna be the second half of this year. So, you know, talk to us a little bit, I don't know, maybe about sales pipelines or what that, you know, downsell, churn pressure looks like to really drive, you know, that, that viewpoint that this is actually gonna be the time where we're, where we're gonna see some of that, you know, turn positive. Yeah, and I think so, so you've asked a few things in that, so let me take it one step at a time. So yes, we've had an interesting ride in the last 3-4 years, pandemic, post-pandemic, and the macro impact to marketing and sales budgets. Now, we are in the early innings when it relates to customers driving engagement at scale and using data-driven insights to drive revenue growth, especially in regulated industries that are undergoing digital transformation. And, you know, our strength and foundation in first-party data is very important. And from a business perspective, we've articulated in the last few quarters that, you know, the marketing budgets are still under pressure, and we see customers and potential customers still in a holding pattern. Now, that being said, we continue to see meaningful signs of improvement in our install base, and in-period gross retention posted a mid-single-digit improvement both year-over-year and compared to the average in-period gross retention in 2023. We expect that to continue to improve. We also sharpened our use focus on digital transformation use cases in highly regulated industries, primarily in life sciences and financial services. We talked about that, including asset management insurance. So we've been able to diversify our business, as we talked about. And then the emergence of AI in sales and marketing is also a major business imperative and will provide a tailwinds, for the industry and our business. You know, according to McKinsey, marketing and sales teams have grown AI adoption by 18% from 2022 to 2023, more than any other function in the enterprise. And we've talked about the uplift that our business got in Q1 from AI-powered days, which reached double digits as a percentage of total ARR in Q1. So, you know, when you take all that together, yes, we have some some continued macro challenges, but the foundation of first-party data and market leadership positions us to be a winner in the AI era. And I expect, based on that, what we have said is, unless there's a macro deterioration, we expect to provide sequential ARR growth in the second half, and we expect to continue to improve that into 2025. Got it. Helpful. One of the things you talked about was kind of pricing and packaging with ACE being brought on board, making some changes there, and, you know, this is something that you all have discussed the last quarter or two as well. But can you touch on what's changed? Is it making customers or making their ability to, you know, maybe buy and consume the, you know, platform easier than before? Maybe walk us through a little bit about what that change may or may not be like. Yeah. So now our go-to-market... You know, with the launch of the Intelligent Engagement Platform, our go-to-market, we've simplified the go-to-market. I mean, earlier we had kind of a large menu of things that people could buy, but what we have now done is, we've kind of simplified into three core packages. And it's essentials, it's standard, and it's advanced. And, you know, the standard part of the business has some of the core capabilities, but it's also got AI-powered ACE, and that's... So we have made it easy for our customers to buy from us, and we've also made it easy for customers to buy our AI capabilities and AI products from us. So our hope is that customers land in the standard category. There's also an advanced offering that includes, in addition to the core platform and AI-powered ACE, includes more things like content hubs and landing pages. That's the advantage. And then for customers who don't want to buy the AI-powered ACE and those capabilities, we also allow them to buy the essentials package, okay? Which continues to have our core live webinar experience capabilities and others with our data and integrations. So we've made it easy for these customers to buy from us. That's an important thing. For existing customers that are customers already, we provide them an upgrade package to upgrade to the intelligent platform by adding a SKU for AI-powered ACE. You know, initially for AI- powered ACE, we have seen, especially in Q1, that more of the deals are from the expansion side, from the install base side, because especially those customers are more mature, as you would expect. So just overall, you know, we have made it simple, easier for our customers to do business with us. We've also made it easy for them to kind of migrate to the Intelligent Engagement Platform. And as we look at the number of deals that we are closing and what are being done with the newer package, we are increasingly seeing more and more shift to the new bundles, because we're not really using the additional, the earlier ones going forward. That's been a major change of what our go-to-market is, and with the launch of our Intelligent Engagement Platform. Last question for me is, you know, when you all went public, I can remember what the sales organization was like then. But the demand environment, as we've obviously discussed, is different. You were seeing deals come in at a fairly rapid pace during that 2021 timeframe, given what the macro was. But how has your sales organization kind of evolved, you know, since that time? 'Cause you're more in a, you know, in a more traditional kind of, you know, go get, go after and go get a deal mode today versus, you know, trying to just harvest, you know, demand that was there, you know, three, four years ago. How has that shifted, and are there any changes within the sales organization that we should anticipate maybe over the next year or so? You know, so just overall, when you look at our business, you know, we've aligned our business to be more focused on the enterprise. Can you hear me? I can hear you fine. Yep. Yeah. We've aligned our business to be more focused on the enterprise, as we talked about, and also related to the go-to-market use cases, which we can control. And I'm pleased to report that in Q1, our enterprise business performance was strong across our key metrics, so it's really showing up. So if you take a look at the average core ARR per customer, it's reached a record high. The percentage of ARR in multi-year agreements and the percentage of customers using two or more products also reached record levels. When we look at what we've done in our sales force team and sales focus, we've aligned more people on the life sciences business, we've aligned more people on the financial services business, as we talked about it, and also on the certification side. That has allowed us to diversify our business. We've reduced some of the focus on the commercial business because that has been under pressure in this market environment. As we continue to evolve, I expect that those investments that we have made and the focus there is going to continue to pay off. It'll, it will continue to allow us to diversify more of our business. It will allow us to continue to grow our ARR per customer, continue for us to drive more multi-year commitments from our customer and more penetration of customers that buy two or more products. Steve, is there anything you want to add to that? Yeah, I mean, I would just reiterate what Sharad said, and to summarize it, we're more focused, a little more focused on the enterprise customers, and you're seeing that show up in some of our enterprise metrics that Sharad has shared with you. We've, you know, put more resources into the industries and verticals that Sharad discussed, financial services and life sciences. You know, both of those collectively have increased from about 20% of our ARR in 2019 to, almost a third at this point. So we're seeing, you know, progress there. We also streamlined the organization, you know, to reflect, you know, what we're seeing in the current demand environment. So we, you know, we've made some changes there as well and tried to build operating leverage into the model so that when the, you know, front-end software demand starts getting better and we return to growth, we're gonna... You know, the goal is to always to grow the bottom line faster than the top line. So those are some of the things we've done. Excellent. Very helpful there. Well, with that, we have come to the end of our session here. Wanted to thank everyone for joining us today. Sharad and Steve, very much thank you for your time. If anyone has any follow-up questions, feel free to reach me directly, and if I can answer them, great. Otherwise, I will make sure that I point you to the company. Thank you so much, everyone. Thank you, Scott. Thank you, team. Thank you, Scott. Thanks, everyone.