Welcome. Thanks, everyone, for joining us today. My name is Scott Berg. I lead the enterprise software and SaaS research efforts here at Needham. Today, we have ON24 with us, a company we've known for a very long time. We have the company's founder and CEO, Sharat Sharan. Sharat, thank you for joining us, and we also have the company's CFO, Steve Vattuone. Thanks for joining us here, Steve. Sharat, I'm gonna kick it off to you. He's gonna go through a small presentation. I've got a few questions to ask, and then we'll open it to audience Q&A. Thank you. Thank you, Scott. Can you guys hear me? Yeah. Okay, excellent. So I'm gonna show you a short presentation. Some of you may have engaged with us, with us one-on-one, but one part of this is gonna be kind of an introduction to the company, and the second part is how our customers use our platform, and I think that that's always an important thing to to share with others. So let me jump in. I'm Sharat Sharan, CEO and founder of ON24. With me, Steve Vattuone, as Scott said, who's the CFO. So we are a sales and marketing engagement platform for B2B companies, and our customers use us to engage with their prospects and customers at scale, convert that engagement into first-party data and insights to drive revenue growth. We've got thousands of customers who use our platform to convert millions of prospects into customers, and I'll show you how. $136.5 million ARR at the end of Q3. The company has been EBITDA profitable for two consecutive quarters, 76% gross margin, over 1,800 customers, and a large TAM. Our customer list is a who's who. We focus on 6 or 7 core verticals, where data and engagement is a very important part. Technology, Salesforce, Microsoft, SAP, ServiceNow are all our customers. You will see Microsoft here. Microsoft has Teams, where they use ON24 on a global basis to drive global demand, demand generation using the ON24 webinar marketing solution. Manufacturing, financial services, we do well both on the banking side and also on the asset management side. Life sciences, 3 of the 5 largest healthcare companies, GSK, Novo Nordisk, Merck, et cetera, are part of the ON24 family. Professional services and media and information technology. Why do these customers use ON24? Because we provide them incredible results, really top-line results. ServiceNow, we are the number one pipeline-driving channel. AbbVie, a pharmaceutical company, 200% increase in engaged healthcare professionals. Valeo, which is a manufacturing company, 45% increase in enabled distribution partners. One thing I always want to tell people about, yeah, you know, since we've gone public, the last 3, 4 years, we've had pandemic, post-pandemic, and now a little impact of the macro, but I like to remind people is, we've got some major tectonic tailwinds that are behind ON24. Let me explain that. By 2025, according to Gartner, 80% of sales and marketing interactions are going to be online. Why? Because of the data it provides. Similarly, according to Forrester, 70% of B2B buyers, like our B2C lives, when we buy a car, we do the research, and we go negotiate. Same thing is happening in the B2B world. Before people go and engage with sales, they do 70% of the work. They do the searches, they do the engagement. That helps us. And finally, what COVID did is everybody's now online. So when everybody's now online, well, is they get their one-on-one of digital engagement using something like a Zoom or a Teams, but when they need a data-rich system of engagement, a data-rich platform to drive pipeline and revenue growth, then they come to ON24. So our served market become significantly larger. When we talk about the different verticals, here's what we focus on. We focus on clearly those verticals that drive revenue growth for our customers. For... So demand generation, for technology industries, driving pipeline and revenue growth, that's kind of our bread and butter. Also, things like partner enablement and customer and product marketing. But in the last year and a half, as we've seen some pressure on the demand generation budgets in the technology category and others, we've doubled down on what we call mission-critical use cases in regulated industries. These are like healthcare professional engagement for pharmaceutical. These are like live professional certification for audit firms, legal firms, others. These are like member enrollment and broker enablement for insurance and financial services firms. That's about 25% of our business, and even in a difficult year and a half, it grew high single digits. So we've aligned our go-to-market right now to focus even more so on those use cases. Now taking you through a little more of the platform. What makes ON24 special? We've built an engagement platform that provides our customers a lot of first-party data. If you look at the intersection of engagement and data, you look at physical events, love to meet you physically, but it's expensive. You can't keep doing that, but also it doesn't provide much data. If you look at email marketing and others, not much data. Only ON24 provides you every webinar experience that people do, an average of 200 attendees who spend 50 minutes on an average and engaging with about 20 different data points. That's a lot of engagement. Tell me a sales and marketing tactic where people have that level of engagement. Now, if you look at it differently, physical events, just attended the event.... If you look at email marketing, click, view, or download, only ON24 provides you every 60-minute experience, live experience you have, you have who attended, what did they do. But in addition to that, you have polls, surveys, Q&A, chat, interacting with conversational intelligence. You know, all that is information is tracked. We also have added things like demos, free trials, pricing requests, all within the platform. I'll show the platform in action in just a minute to you, so you'll be able to see how that all works. Now, when we talk about the ON24 platform, before we talk about AI, there are three core components of our platform. One is a one-stop shop from a sales and marketing engagement point of view. ON24 Webcast Elite is our core platform. It's kind of a flagship platform, but we've added other products like ON24 Forums for collaborative experiences. Hybrid and virtual events, we've got platforms for that, ON24 Go Live. And also for personalized and always-on multimedia engagement, we've got ON24 Engagement Hub and Target. The key focus here is, ladies and gentlemen, whether you're doing a 60-minute webinar or a full-day event, or taking all that stuff and putting that in a multimedia hub, I've got all the solutions for you. Okay? But the goal for all these is, we take all the engagement, convert that into first-party data and insights, and then all that first-party data and insights is integrated deeply in your ecosystem. Whether you have Adobe, whether you have Eloqua, whether you have HubSpot, whether you have Veeva, we provide all those signals into the sales and marketing ecosystem that you have. And now, with AI, we are making the platform even much, much more intelligent. So ladies and gentlemen, next week, on 24th, we are launching the next generation of our platform. We invite all of you to join that. It's on the 24th. We are happy. You know, if you go to our website, you can register, and essentially, it's a pretty game-changing thing that we are offering our customers. Let me explain what. What you are now going to be able to do is to be able to segment your audiences and hyper-personalize. So somebody's coming to a webinar, if they are VPs and above, or they are VPs and below, you can segment them that way, and have multiple dynamic experiences, the experience being completely different. Different calls to action, different polls, different surveys, and others for those people. If you have people coming from different industries do the thing, you can have different levels of experiences. Okay? Never been done before. By the way, all the stuff we've been doing before AI came, this is all part of machine learning. What AI is really helping us is with generative AI. Second thing which we have launched, which is going to be available, is what we call automated content creation. If any of you have been part of marketing and sales, you know how much time it takes to create an e-book or a takeaway, or an infographic. Now, imagine you have this 60-minute engagement webinar. With one click within our product, you can instantaneously get a transcript, an e-book, a blog. Now, it won't be 100% there, but at least you are 90% there. After that, you can make the edits. How cool is that? The webinar is really the raw material. And the final thing is, once a webinar is done, instantaneously or in a couple of hours, you're able to get the key clips out of that webinar, which are the Key Moments. You can even go and select what the Key Moments may be, and then you can really flip that and start nurturing with your prospects based on those Key Moments. So we are moving to a direction of intelligent engagement, engagement that is continuous, but the focus really is to continue to get more and more data signals to basically drive... help companies drive pipeline and engagement. Not moving? Yeah. Okay. Now, I'm gonna spend the next 3, 4 minutes to really show you the, the platform in action a little, so that you get a sense of how you know, how prospects engage with our platform. So this is Paula Price. Assume she's the vice president of network security of a financial services company called Metropolis. Paula is looking for a security product for her company. She's doing what we talked about. She's going to websites, she's joining webinars of companies because she needs that product pretty quickly. So you have a company called CloudTek and this company only has Paula in their database. They have no other information. And they say... You know, they are doing these webinar campaigns, so they send out an invite. Paula gets that. She's intrigued. She comes in, and you can see they have customized it. They've got polls, resources, others. They've customized it. It's their colors. Okay? The webinar is Next Generation Solutions for Storage and Performance. They've added the free trial widget. Why have they added a free trial widget? Because a third of the people who register for the free trial become customers. They've added, you know, Drift, which is all within the platform, to conversational intelligence to engage with SDRs, sales development resources. They've added video breakouts, okay? So that now you can basically, after the event, you can go into multiple breakouts. They've added other things in addition to... They've added things like automated captioning. Everything we do is enterprise scale. Now, Paula comes in, she spends 30 minutes on the platform, she asks a question, she downloads some information, and she also registers for the free trial. Now, that, that's very interesting because now the system knows more about her. She was only a name in the database. Next, because she has registered for the free trial, they also have another product from ON24 called ON24 Target. So within 30 minutes, they get she gets a personalized email, almost a personalized landing page, that says, "Hey, I'm Marcus. I'm your sales rep. Here are the keys for your free trial. And by the way, in financial services, here is a hub we have customized for you. Go and check it out." She's very interested. She clicks on that. Oh, sorry. She clicks on that. This is where you got webinars. This is another product called Engagement Hub. This has got webinars and videos and PDFs and others. She goes there and binges on the content. On the left side, you see all the things that she is doing. It's adding to her digital body language. Here is where she sees, oh, they have a virtual event coming up, where the CEO and the CTO are, and customers are gonna be there. It's like the event we are doing next week, as we launch the next generation of our platform. So she's very interested and intrigued. She clicks on that and goes into that particular event. Now, as she goes into that event, she goes through the different presentations, but our sales rep, Marcus, also knows she's coming. Paula, after she sees... She sees the CEO presentation, CTO presentation, here's the customer panel, is very excited. She wants to have this product. So she and Marcus have a conversation. They're able to work on pricing and then get a deal done. Now, what I've shown you, that in 30-45 days, starting from the beginning of engagement, CloudTek is a new customer, and Paula has a product she wants, and now, based on another product called ON24 Forums, she's part of the onboarding class. All the new customers that are onboarded, CloudTek, CloudTek onboards them. Now, this is where it gets really interesting, ladies and gentlemen. She was just an email in their database. Now, based on our interaction, this is just one of the analytics that we provide, but this is called the Prospect Engagement Profile. They are able to figure out she's engaged for 8 hours and 17 minutes, 374 touches. Her lifetime activity is high. She's done three meetings. She's done one free trial conversion. How many webinars she's attended, how many videos she's watched, her business interests. Based on all of her interaction, what her business interests are. And based on that, as the salespeople or the SDRs are following up, here's a recommended amount of content that she, that they can use. A lot of this is based on machine learning. We have done it before AI was there. This has been available for the last couple of years. So you can see how our customers learn about their prospects based on engagement through the ON24 platform. ... And then we talk about having multiple products. What our focus really is, you know, once you develop the integration, whether it's with Adobe, whatever your system of record is, or HubSpot or others, you can continue to add any of the ON24 products. All that data will move through the same pipe. So you can start with Elite, you can add Forums, you can add Go Live, you can add Engagement Hub, you can add multiple use cases. It's, it's the same pipe that basically does... What we have done in the last 12, 13 years, really spent time and build these deep third-party integrations with the Marketo, with the Eloqua, with the Salesforce, with the Veeva, so that if somebody like Paula is engaged and they ask a poll question saying, "Hey, are you gonna buy in 90 days, 180 days, a year, two years?" If she says, "180 days," with somebody who's that engaged, I mean, that's a gold lead. That should go directly to your salespeople to basically follow up. So we provide our customers that kind of a system to do. And again, everything we do, 70% of our customers are 1,000 employees and above, approximately. So, enterprise scale and reliability, security and compliance, accessibility and captioning, live global support, that's like table stakes. Especially in the regulated industry, a lot more compliance work is also needed. And finally, our approach as we work with our customers is, you know, get in with Elite and then basically add other products. A lot of our... You know, to be the, the one platform for digital engagement, for sales and marketing for these customers, and the TAM for our solutions is quite large. We are in very early innings, ladies and gentlemen. I think we've, we've got good tailwinds behind us, but TAM for our solution is over $40 billion, half in the US, half in international markets, and we've used ON24 data to come up with this from a bottom up. Again, clearly, a lot more work needs to be done by us. That's kind of an overall presentation. Any questions? Anything that was not clear? Okay, thank you. Checking the time here. Thanks for that, Sharat. I've got a few questions here, and if anyone has anything else in the interim, feel free to chime in. One of the questions I get frequently on the company, you kind of touched on it a little bit with one of your slides there, was on the use of these platforms moving forward. If we look at the recent history in the space, you all had some good traction coming into 2018, especially exiting 2019. Pandemic hit, obviously, the need in the short term for your platform was immense. We've seen churn on the platform, similar to other, you know, product categories that spiked during the pandemic. But what have you seen recently in your business that suggests around usage or usage trends, that what you're seeing now is, A, both stable, but, B, has a growth future ahead of us now, instead of not being, you know, a fundamental part of marketing budgets? Yeah, so Scott, you are right. You know, in the last four years, we've had to deal with very significant trends: pandemic, post-pandemic, and now the macro impacting the marketing and sales budgets. Let me just rewind a little, okay? Having managed and pivoted the company a few times through some of the most difficult times, you know, it's been about 8 quarters now that we have, since the beginning in Q1, that the impact of this macro environment to the marketing and sales budgets started. Mm-hmm. I believe we are closer to the end than the beginning. I don't know how long this lasts, but I do believe we are closer to the end than the beginning. You know, technology companies, manufacturing companies, financial services companies, that are about two-thirds of our ARR, they can't just keep getting away with cutting costs, right? Mm. At some stage, they have to invest in growth. The area that we have been the most impacted by, Scott, has been on the installed base, okay? I think Q2 was the most difficult in terms of down sales, and the biggest challenge has been the down sales on the installed base. Then the other thing is, the expansion and cross-sells have also been a challenge. Now, as we look at the business, and as we talked about this in our Q3 earnings call, we believe Q3 ARR performance was better than Q2- Mm. Better than we expected. We also guided that Q4 would be better than Q3, so improvement. We are flattening the declines, okay? So the business is getting more stable. From a go-to-market point of view, we are focused on mission-critical use cases for these regulated industries. I talked about healthcare professional engagement, live professional certification, and member enrollment. Mm-hmm. We are adding this AI-powered ACE, the next generation of our platform, where we are charging for this. We are upgrading that. So, you know, if you put it all together, I know we've had some challenges since we went public, but we believe that the company is well-positioned to deliver double-digit revenue growth and double-digit EBITDA growth over time. Good. You gave kind of an advanced preview of ACE there. I know you guys are excited about it, and we look forward to the product announcement next week and presentation on it. But how do we think about pricing and packaging? Does it mirror what your, you know, strategy is around your core engagement hub, or is the pricing and packaging on that differ much? I think you're gonna be very excited when you see that. I think we are announcing all the pricing and packaging next week, so let me give you just a high-level thing, without giving too much. So one, we are streamlining our packaging, so that it's a lot easier for our customers to buy from us. That's overall. So few, very few packages, as opposed to a lot more of the varieties. That's one. Secondly, we are charging for the AI... for AI-powered ACE. And by the way, ACE stands for Analytics and Content Engine. And for existing customers, there is an upgrade package, and for new customers, we are charging a premium in the newer packages. Okay. Yeah. Looking forward to those details. Yes. We'll see those next week. Yes. Well, that's, that's great. I guess we'll move to a balance sheet question at the moment. Steve, you guys have done a lot with your balance sheet over the last year, special dividend- Mm ... some buybacks. You know, is that at a state that we should think about as being generally kind of stable and fixed at this point, or are there some, you know, opportunities there that maybe we're less familiar with today? Well, first, let me give you a recap of what we've done thus far. We initiated a $125 million capital return program in March of last year, in March of 2023. There were two parts to that. There was a $50 million dividend, which was paid out in Q2 of last year, and a $75 million share repurchase program. That repurchase program is ongoing, and we expect that to be completed by Q1 of 2024, the current quarter that we're in now. Now, in terms of the balance sheet, we had $214 million of cash at the end of, you know, Q3. So our capital return program, you know, did a few things: It balanced our focus on delivering near-term shareholder value with our long-term, you know, focus on growth, it provided us ample liquidity, even after the share repurchase, to navigate the current macro headwinds and also invest in our strategic priorities. So, you know, that's where that stands. We currently don't have anything planned beyond that in terms of a share repurchase program, but, you know, the balance sheet is something that, you know, us and the board are always looking at and evaluating, so. So we attended the annual National Retail Federation conference this week at Javits Center. It's always Sunday, Monday, Martin Luther King weekend. Just love to work Sunday, Monday, every Martin Luther King weekend, because I've been going there for 10 years. But it's actually a great conference for what I do. But there's kind of two trends I thought that were interesting that would impact your business. Actually, we'll call it three. The big theme of the conference seemed to be around improving the customer experience. Improving the customer experience, both B2C and B2B, but it can range from your upfront marketing programs to how you fulfill, you know, your customer request orders, et cetera, on the back end. So I thought that was one, but that drastically influences the marketing technologies of a lot of the companies that I cover, obviously. But two, there seemingly seem to be some green shoots within the marketing spend area. I think marketing has been one of the sub-sectors that I cover that's been most impacted around spend contraction over the last couple of years, or spend normalization, if you want to call it that. And you guys have been public in saying how you're impacted by that as well. But there's been some green shoots there. And then thirdly, picked up some green shoots around just enterprise spend. I think over the last 6 or 7 weeks now, I've probably spoken to 12 companies that all told me their bookings in the fourth quarter either were ahead of or were projected to be ahead of just their expectation from 3-6 months before that, that there's a slight bump or increase in demand upmarket. SMB-focused customers, different story, they're very inconsistent in this market. But it's almost like the enterprise has become more comfortable with understanding that this economy might be up and down a little bit, but it's not falling off a cliff, and it might not be go, go, so they're investing a little bit right now. So kinda 3 things that might be beneficial or tailwinds to your business. Do you see any of that today in those areas, or are you more hopeful that you're gonna see more of that later in 2024? No, I can't talk about Q4. We're not talking about Q4. No, no, yeah. Yeah. But as you said, improvements in customer experience, I mean, with AI and other things that we are gonna do, it is gonna be a game changer. So we are very excited about that, and especially, you know, continuing to enhance the customer experience, not only on the event, but before that. We are almost... We call it almost continuous engagement, okay, now. So I think that's a pretty exciting thing. You're right, it is going to be a tailwind. The other thing you talked about is marketing spend and enterprise spend. I think it's fair to say, Scott, that Q2 was very difficult. First half was very difficult, Q3 was better, and we were hoping that Q4 would be better. Mm-hmm. Again, if it gets better, for companies that you talked about, it'll help us, okay? In the last earnings call, what we outlined was that... Well, we still don't know how first half of this year is gonna be. I'd like to be ARR positive earlier, but we will be ARR positive by Q3. And by Q4 that just passed, we also talked about that we'd further improve from Q3. So yeah, we are seeing more stability than we had before. Good. Okay? Yeah. So nice that you're seeing similar trends to other companies out there. Uh ... because that's been the commentary of a lot of them, where first half was poor, especially in marketing software, but Q3 saw some improvements for a variety of different angles, whether it was net new, better retention, et cetera, and then so far, expectations of better Q4. So we'll wait for your update a few weeks from now, obviously. Anything you want to add? Yeah, I mean, you mentioned retention, so just to touch on that, we talked about in our last earnings call how Q3, we saw improvements in, you know, gross retention, both down sells, you know, and churn relative to Q2. A pretty notable improvement in Q3 relative to Q2. Churn, in particular, improved in Q3 in all the cohorts we track. We're still seeing some challenges with down sells in Q3, but it was much better than in Q2, and we set the expectation for improved ARR performance in Q4 relative to Q3. Now, obviously, churn is a big component of improved ARR performance, so if ARR performance improves, we expect the churn to improve as well. We're not talking about Q4 today, but we will be giving everyone an update on our progress when we do our Q4 earnings call next month. So last question from me, and happy to answer any other from the audience, but if we think about an environment where marketing software spend does improve, whether it's Q4 this year, Q4 next year, Q4 the year after, the time frame doesn't make a lot of difference, but where do you think ON24's product platform sits in the priority stack? If I look at the companies I cover in the sales and marketing software space, I cover about seven or eight of them, and they're all at different layers. There's a couple of overlaps, but a lot of them at different layers because they have different functionality. I think investors often really get confused with trying to understand, if I have an extra $100 to spend in my marketing budget, you know, we'll take ad tech aside, you know, those types of businesses, but if I want to put it in pure software, do I do email marketing? Do I do SMS marketing? Do I do an ON24 digital engagement platform? Do I do SEO marketing? Do I do X, Y, and Z? All these different things, but how do you, you know, think about where you fit in the prioritization if there is more funds available? Let me ask you this question. I'm gonna flip it back. If you've got $100, where are you going to basically spend it? If you're a technology company, let's say, you're probably gonna spend it in generating pipeline. Mm-hmm. The best way for you to generate pipeline that converts. And I think if you were to ask all the enterprise ON24 customers, they would say that... Give the example of ServiceNow. You know, Microsoft has Teams, but they use ON24 globally to generate pipeline using the ON24 webinar platform. Is they know it is going to generate the largest amount of pipeline, and that'll convert. So I think that's the question people have to ask, and I think ON24 will be at least in the top three categories of what they will decide- Look forward- ... from a B2B perspective. Yeah. No, I look forward to seeing that happen because I think you're right. It's easy to spend some money on technologies first to drive that. Headcount additions normally don't come first, they come second because they become fixed costs in an organization that are difficult to adjust- Mm ... if the environment doesn't respond properly, where software, you can kinda move up and down a little bit more. I'm gonna add one more thing. Mm. What, what we've done is, because we have to control what we can control, we've also... This 25% of the business that we are focused on, these digital transformation use cases for regulated industries. I talked about life sciences and others. Mm-hmm. I mean, those are also must-haves. Our hope and expectation is that that will continue to grow, and also with a little more stability, the business focus on demand generation and technology, manufacturing and and financial services will also do better. Again, looking forward to it. Thanks, everyone, for joining us today. I'll make sure everyone gets to the elevator appropriately for your next meetings. Enjoy. Thank you. Sharat, Steve, thank you so much. Thank you, Don. Thank you. Pleasure.