We can get started here. Thanks, everyone, for joining us today. My name is Scott Berg, and I lead the enterprise software and SaaS research efforts here at Needham & Company. Thanks, everyone, for joining. I think this is conference number 27. I also lost count on being able to add that up too, but I think it's number 27. Today with us, we have ON24. We have the company's founder and CEO, Sharat Sharan. We have the company's CFO, Steve Vattuone. I'm sorry, I guess I was just thinking, did I actually pronounce that, your last name correctly? Pretty close, Vattuone. You were very close. Sorry. For all the years I've known you, I don't know if I actually have that answer off the top of my head, but we'll work on that. But this presentation is going to be a little bit different than other ones I've done today, at least. Sharat and Steve are going to go over a quick presentation, and then I've got some questions to ask, and we will certainly take any questions from the audience. But with that, Sharat, it's all yours. Thank you. Thank you, Scott. Delighted to be here. With me is Steve Vattuone, ON24 CFO. So quickly, I'll take you through a few slides that should give you a sense about the company, and then look forward to getting into the Q&A. ON24 is a sales and marketing platform for B2B companies. They use us to convert customer and prospect engagement into revenue. Close to 1,700 customers delivering about $130 million in platform ARR, about $150 million in four-quarter kind of revenue. Our customer base is predominantly enterprise. About 80% of our customer base is that. So if you look at it, if you look at this as a proxy, 311 customers, greater than 100K ARR. The percentage of ARR in multi-year agreements is over 50%. These numbers are at the end of 2023, and customers with two or more products, closer to 40%. Large TAM. And from a financials point of view, six consecutive quarters of Adjusted EBITDA profitability and Free Cash Flow profitable and strong margins. Now, when you think about ON24, I talked about that, is thousands of companies deliver millions of experiences with ON24. And essentially, what they do is they deliver customer and prospect engagement. And we deliver first-party data and analytics to drive revenue. And with the launch of our AI-powered solution in the early part of 2024, what we've been able to do, we've been able to make our platform a lot more personalized. And I'll talk about that. A lot more personalized, a lot more intelligent. Our customer list is a who's who. If you look at software, four of the top five software companies, Salesforce, Microsoft, SAP, ServiceNow, are all standardized on our platform. Manufacturing, financial services, asset management, insurance, life sciences, companies like Merck, Novo Nordisk, et cetera, professional services, media, and information technology. And why is that? It's because we are generating incredible results for these companies. They are generating a tremendous amount of pipelines. ServiceNow, we are the number two source of pipeline for ServiceNow. Life sciences companies, companies like AbbVie, 200% increase in their healthcare professional engagement. Companies like AAA, 40% more sales from this channel compared to what they were using previously. And one of the things is important. I recognize we've had some challenges in the last two, three years, post-pandemic normalization, and then the B2B impact, the software impact on kind of front-end software budgets. But there are tremendous tailwinds. As we look at ON24 and going forward, 80% of go-to-market, according to Gartner, by this year, is going to be over digital channels. Why? Because of the data. The self-educated buyer, like our B2C lives, when people are making choices for B2B products now, they are doing all the work before. They are engaging before they go and engage with sales, and of course, the AI impact. The AI is going to fundamentally change sales and marketing, and I'll talk about the success we are having with that. Now, when you look at ON24 very quickly, we defined the category of what we call webinar engagement. People used to think about a webinar as a communication vehicle, as a presentation vehicle. We said to them, listen, now, you spent 200 to 300 people come to that, and they spent 50 minutes. Everything that people do, we convert to engagement and first-party data. We created that category, made that one of the number one sources of pipeline for companies. Then, by 2018, we enhanced the platform, Engagement Hub and Target, more on-demand, personalized landing pages. Then, of course, earlier last year, we launched AI-powered ACE, our intelligent engagement platform. Our core platform is focused on demand generation. That's clearly one of our key areas of focus for us. Once we get in there, then we evolve into partner engagement and customer success and customer and product marketing. But in the last three, four years, we've very much focused on these regulated industries. These are life sciences and financial services. This used to be about 20% of our business about five years back. In the last five years, we brought that to about a third of our business. Things like healthcare professional engagement, life sciences professional certification, member enrollment. And what is our secret sauce? Our secret sauce is based at the intersection of customer engagement and data. What does that mean? We provide our customers a cost-effective solution for engagement and data. If you look at a physical event, physical events are fantastic, but they take a lot of money, and they provide you very limited data. Every ON24 experience has approximately 200 attendees who spend 50 minutes and engage with 20 different data points. We delivered over a billion engagement minutes per year. And we take that first-party data to drive revenue for companies. So again, coming back, physical events, one, you just attended. Email, click a view, or download. Only ON24 provides us 20-50 different data points. Who attended? What did you do? Polls, surveys, Q&A. Did you chat with the SDR? Did you request a sample? Did you book a meeting? And I'll show you how that works in a moment. And again, so what is the ON24 platform? It starts with the best-in-class experiences. You want to do a live webinar engagement? You want to do a hybrid virtual event? You want to do on-demand content hubs and personalized landing pages? We have all those solutions available, but the key thing is to really use those solutions for these companies to drive first-party data and deep integrations into the system, and with the launch of AI-powered ACE, we've made the platform a lot more personalized, and of course, AI-driven content on top of that, so now I'm going to spend two, three minutes showing you how a prospect engages with the ON24 platform and becomes a customer of one of your companies. The reason this is important is because many times the question comes up, hey, how are you different from Zoom? So I think you'll be able to see the power of the ON24 platform. So this is Paula Price. 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 actively searching for it. She's going to webinars. She's self-educating. She's going to websites. She's going to all these places. You have a company, let's say that the name of the company is CloudTech, that has a product like that. All you have is you have Paula in your database. All you have is her email, and she's in your database. So she gets an email from you. She's intrigued. She comes into this webinar. It's kind of customized fully. It's got all these widgets configurable. It's got a free trial widget that CloudTech has added because a third of the people who register for a free trial become customers. It's got SDR integration. It's got video breakouts. It's got one-on-one meetings, personalization, and of course, everything we do is enterprise scale, so live and on-demand captioning. Paula comes in. She spends 30 minutes. She asks a question. She downloads some information, and she registers for a free trial. The system knows a lot more about Paula now. Next, because she's registered for a free trial, they use another product from ON24 called ON24 Target. In 30 minutes, they get a landing page personalized. Hey, check out the CloudTech Learning Hub for financial services. And by the way, this is your sales rep, Marcus. She's intrigued. She clicks on that product. Everything she's touching is adding to her Digital Body Language. She goes in. This is based on another product from ON24, the ON24 Engagement Hub. It's like best practices for financial services. She goes in. She binges on all this content, video, webinars, PDFs. She also sees they have a virtual event coming up. Now, this company, again, has also bought the virtual event platform from ON24. So she's very interested now, very intrigued. She wants to hear from the CEO what his strategy is. She wants to network with peers. So she goes in. She listens to that. And by the way, her sales rep by that time, sorry, she goes in. She binges on the content. And by the way, her sales rep also knows that Paula is coming there, so they're able to basically converse and negotiate a deal. But the power of the ON24 platform comes together here. All the stuff that I showed you really is she was just an email in their email address in their database. Based on the interaction of all these different products, you're able to see her engagement level is high. She's engaged for eight hours and 17 minutes, 374 touches, three meetings, and one free trial conversion. Based on what she has done, we are able to determine what her business interests are. They didn't know anything about her. Now the SDRs at this company, CloudTech, can send her recommended content based on what she has. And by the way, all the salespeople at this company have this available within their Salesforce instance. Now, we talk about AI-powered ACE and what are we doing in AI. AI is going to fundamentally change sales and marketing. So let me tell you what AI-powered ACE is. We launched that in January last year. There are three core components. One is it's about personalization at scale. If you are from the defense industry or technology industry or financial services, within one live experience, I can give you completely three different experiences. You can have different calls to action. You can have different breakout rooms. You can have different related content. All that stuff, experience can be completely different. Generally, you would do four or five experiences, one for each vertical. Now, within one live experience, I can do that. Nobody else has that capability. Next is what we call automated content creation. When you're really delivering a webinar experience, you bring customers. You bring analysts. You bring all these people. It's like 40 to 50 minutes of dense content. With one click of a button within the platform, you're able to get eBooks and transcripts and takeaways. And then you can also get key moments and podcasts all within the platform. Imagine companies investing so much money in their marketing teams to create all that stuff. I can give them the stuff at 90% levels that they can further edit and take them out. Finally, all this content that is created is now generally, when people think about these events, they think about an event happened, and people didn't show up, and then you communicate, and then it's done. What I provide you is after the event happened, then it's done. How do you continuously engage with those folks? You can take all the content created and put up a nurture page for people to continue to engage, get 10% more audience and pipeline. Deep integrations, really deeply integrated with Adobe, Salesforce, HubSpot, Veeva, et cetera. This is another thing. We've talked about diversifying our business. Yes, the last two, three years have not been great for us. But what we've been able to do, five years back, at the end of 2019, technology was 39% of our business. Manufacturing was similarly high. That was about 52%, 53%. We've seen challenges in that business. In the last three years, what we've done is we focused on these regulated industries, life sciences, financial services. Those businesses continue to grow for ON24. That's about a third of our business compared to 20% last year. And final slide, our focus is on enterprises, companies greater than 1,000 employees. 80% of our business is there. With that. Thank you, Sharat. That was a great overview of the company. I have several, but we'll get through a few here, and then happy to open it up any to the floor audience if there are additional questions. I guess let's start from an industry perspective. Here, gentlemen, is if we go back to the IPO about four years ago, digital customer engagement was obviously a big topic for all the reasons we can list off. Just one called the pandemic as much as anything. But how has the industry changed, specifically webinars and customer engagement? How has it changed and evolved over the last four years that maybe the average investor in the space isn't familiar with? Yep. Scott, you're right. I mean, the last four or five years have been very interesting. We had the COVID boom, then the post-pandemic normalization, then, of course, the software recession, especially for the last two, three years, especially for front-end software. That being said, customer engagement at scale and using the data-driven insights to drive revenue is in very early stages. And when I think from a technology perspective, our foundation is about first-party data. And then with AI now, we are building this AI engine on top of our strengths in first-party data. So that's very important. Now, from a business perspective, I think one thing that we talked about in the earnings call, and I'll say, is we are seeing improved stabilization. In Q3, when we talked about our gross retention in Q3 improved high single digits compared to the year before and from a year-to-date basis. So overall, churn and downsell improved. So we are getting more confident about the stabilization of our business. So that's one thing. Second thing, when we had before the pandemic, a lot of the focus at that time was about tools. Anybody would grab any tool. What we've been able to do since then is really to focus on solutions. We focus on pipeline and partner engagement for tech. We focus on healthcare professional engagement for life sciences. We focus on life certification and member enrollment for financial services. That's a very important part of the journey. Number three has been AI, the importance of AI. AI is going to fundamentally change sales and marketing, and I think we've continued to invest in that. We reported in Q3 that AI-powered ACE ARR from that crossed close to high teens, close to 20% of our total ARR. Finally, there were a whole bunch of competitors that came up during COVID in the virtual event and other category. I think they've not been able to get funded. So we've seen some of that competition recede. Net-net, I think as I look at the business, I think we're still in very early stages. I'm very encouraged on where we are and cautiously optimistic for 2025. One of the items that we were all discussing before we came in was around marketing budgets over the last couple of years. They've definitely been soft relative to what we saw in 2021. When I mean marketing budgets, specifically spend on technology solutions like software, there seems to be a small crack in that spending door, at least I've seen in some of our work. You seemed a little bit more optimistic. I'll go about that much more. That's about an inch between my fingers here, so maybe a start. I don't know. I guess what needs to happen to get spend, maybe not back to 20 or 21 levels, but maybe 18 or 19, that was kind of a normalized marketing software spend environment, do you think? I think you're right. If you were to ask Gartner, their report says that 2024 marketing spend as a percentage of revenue for B2B companies was 8%. And 2019 was about 11%. It's a 280 basis points reduction. So of course, people have just been focused on reducing their MarTech and tech budgets. But what I'm cautiously optimistic is the stabilization that we are seeing in our business. I talked about what we are seeing gross retention. And I feel optimistic, especially with the multi-year deals we have, with having some of those customers out of our system, that our gross retention and stabilization is going to continue in 2025. So that's one thing. Now, let me give you a sense of what we are focused on, Scott, in trying to drive ON24 to ARR positive. I've talked about stabilization. In Q3, we also talked about, because that's the foundation quarter, we also talked about that it's the first quarter I saw win-backs come back at some scale for companies that may have gone to a collaboration tool good enough and coming back because they needed to drive more revenue. So that was important. So that's part of the stabilization. I expect AI-powered ACE. I've given you some numbers. I expect AI-powered ACE is going to continue to be a very important growth vector for us into 2025. Our focus on solutions, life sciences, financial services, regulated industries, and hopefully when tech comes back, that's going to also provide green shoots. I think that's important, and finally, we have had a little challenge in new business execution. Of course, the markets have been tight. But to alleviate that, we brought in a new SVP of North America sales under our CRO to head our North America business. So when you look at all that stuff, the MarTech and tech budgets have been cut for the last two to three years. At some stage, companies have to invest. As you said, I think it's going to start beginning now, small, but we are cautiously optimistic. I guess as we heard you talk about the platform today, you all are clearly fired up about ACE and the impact it has for your customers and your customers' revenue opportunities. And you talked about the capabilities of what it does and why it's important. I guess as you think about the quality of the business that you've had, whether it's renewals or net new, how should we think about the attach rates of ACE to that customer population? Is it, I don't know, in the first or second innings where you're at 10% or 20% adoption? You said it's about 20% of total ACV right now or ARR. But just help us kind of think about how important that's been into landing your new customers and with your renewals. I've talked about how AI-powered ACE is going to transform sales and marketing. I think our solutions that we are taking to market are providing ROI to companies right now. I mean, a lot of people talk about AI, but our solutions are providing that. When you talk about personalization at scale, instead of doing four different experiences over six weeks, you can do it all in one, saving time, cost, and getting more leads. Taking that content, you have content marketing teams. Now I'm giving you all that content. Now you just need a fraction of the people that is needed to do the work, getting more audience based on the nurture packages that we are putting together. So it's fundamentally having an impact. Now, I will just tell you, only the third quarter since the launch of AI-powered ACE, the ARR from that got close to 20% of our growth ARR. I believe it is going to be an important growth vector for us. And we also feel that the ACE customer is actually a pretty ideal customer, Scott, because these people spend more money with us. They buy multiple products. As we look at it, I think they're going to be a much higher retention customer too. So AI and ACE is going to help us on gross retention, expansion, and also net new business. How should we think about innovation on the product platform as we move forward? Most of the commentary over the last several quarters and years has really been about ACE. Now that that's out there and you have customers obviously using it, what do you think about innovation over that maybe next two or three years? Yeah, it's a pretty exciting time for innovation. So I can't tell you everything, but I'll give you some broad strokes on where we are focused on. First of all, everything we do is built on the foundation of our first-party data. That's where it starts. And so, when now you look at first-party data and on top of that, you have AI-powered ACE, we're going to continue to focus on hyper-personalization at scale across all of our product lines. We're going to continue to focus on this AI-driven content generation. We've just started there. We're going to launch things like podcasts, video content in all the languages of the world because we support kind of global enterprises. So that's going to be very important. Our focus on AI-driven agents to really do a lot of automation across the platform is going to be very important. So that's one direction. The other direction that we are going to focus on continued is our focus on solutions. How can we, based on technology, get you closer and closer to revenue? Same thing for life sciences, financial services. Broad strokes, those are the areas of focus for us. Moving towards the go-to-market side of the equation here, you talked about the verticalization successes that you've had. You certainly realigned part of your sales team to focus on that. How do you think that verticalization kind of strategy unfolds further here in maybe 2025 or 2026? Have you made those changes already to date, and it's just executing against those changes, or could you see some additional changes to even further kind of double down on that vertical strategy? I think we've probably just started. We're probably in the second innings on the vertical strategy. And just to explain, we talked about six core verticals. There are two ways you can go in a vertical strategy. One, you verticalize the whole thing. And second, it's more of a marketing verticalization using the sales team. We've started our verticalization in the life sciences and pharma category. We've taken the top 50 accounts, and we put together a global sales team. Because these people are buying globally. A global sales team. We are doing product integration with the various CRMs across the world. We are doing more compliance work. We've got a sales team. We've got a customer success team focused on that. For other areas like financial services and others, we are really verticalizing the message, but we are keeping the same platform and the sales. The other thing we are also doing, Scott, at the same time, we need to do a better job, but just even further verticalizing and making the message more, what is the benefit that we are providing our customers by each vertical? That's another direction that we are going. So as we do that more and more so, tools always get commoditized. Solutions don't get commoditized. So as we continue to focus on that agenda, we are going to continue to look at how do we verticalize more in each of those segments. Does there have to be any innovation on the platform to help drive that vertical strategy, or is the platform as it sits today pretty well equipped to handle the use cases by the verticals you're targeting? I think for the most part, the platform is a horizontal platform that is able to solve those use cases. Let me give you the example of life sciences. In that case, it's a global opportunity. We've got different CRM systems in Japan, different CRM systems a little more in EMEA, different in North America. So you've got to basically do that in those various areas. There are different compliance requirements in different markets in some of these regular industries. So you've got to adapt to that. And then you also have to look at, hey, can I offer a different level of product and other things? So it's compliance, it's integration. Those things are important. But for the most part, we are talking still about 85% of the platform being the same. And in other verticals, there may be some other different integrations, but less of a heavy lift from a product point of view. Moving to financials a little bit, you all are, you can see it in the last quarter or two transcript, is you're excited about the return to growth profile, your expectation of it coming up here, right? Growth comes from a variety of different factors. It can be better retention. It can be relative to historical trends. It can be more cross-sell opportunity, right? It can be net new. How should we think about the impact of all those factors in their returning to growth? Are you relying on one of them specifically, or is it going to be broad-based across every kind of vector there? Look, I know in the last couple of years, we've been challenged to get to ARR growth. But if we look at 2024, we've made improvements by quarter. We've arrested the decline. And I believe that as we look at 2025, we are at the cusp of turning ARR positive. It starts with stabilization. If you've got a leaky bucket, it's a problem. But so overall, we've got to kind of do things in all of those areas. But let me go back. Stabilization. I talked about the numbers, high single-digit improvement by Q3 last year. Both gross retention and net retention improved significantly last year compared to the year before. And we feel confident about 2025 because we've got more customers and multi-year agreements, more people buying multi-products, and the team is doing a better job. And if the win-backs are any guide, I think hopefully companies start investing more in revenue-generating activities as opposed to just in cutting costs. So that's part of the stabilization. That's the front and center. Then the next is the net retention profile. This is where AI-powered ACE comes in. And from a new business point of view, I talked about we need to do a better job. Our focus on solutions is very important. Kind of a change in the leadership and sales there is important. So if you add all of those things, and we have done that at the same time, we've been profitable. We've been Free Cash Flow profitable, so we've improved the overall profile of the company, and our hope is that we get back to ARR positive in 2025 and accelerate further as we get less of the headwinds from the marketplace. One of the items you mentioned there was gross retention continues to improve. I know that's been part of the story the last couple of years, obviously. You're not the only vendor I covered that's had some of those COVID bumps in cohorts that are trying to right-size their business, but as we think about that improvement, are you seeing retention actually improve because you're just getting to a, I guess, sense of normal churn in the platform, or is it mainly because, I guess, I don't know, that cohort's just kind of done? Just trying to help understand where the improvements in that churn are coming from. So, Scott, as Sharat mentioned earlier, we've seen a lot of stabilization in the business recently. In fact, our gross retention in Q3 up high single digits compared to what it was in the prior year. And that's in the quarter and on a year-to-date basis compared to the same period in 2024. This is all through the end of Q3. So we've made a lot of progress. In fact, in each of the first three quarters of 2024, we saw gross retention coming in meaningfully better than it was in the prior three years. So that's definitely trending in the right direction. In terms of downsells, which were a problem for us, particularly in 2023 as front-end software budgets really contracted, those were among the best they've been in the last three years in Q3 of 2024. So again, progress on downsells as well. Now, is it normalized yet on where we want it to be and where we believe it will be? No, we believe we have more progress to make, and we believe we will make more progress in 2025. As we've said, we believe we'll get back to ARR growth in 2025, and we'll see improved gross retention as part of that. Now, you asked, why is this happening? There are a few reasons for it. One, getting customers into multi-year agreements has been a big focus for the company. As Sharat mentioned, now north of 50% of our ARR is in multi-year agreements. It was the highest ever at the end of Q3 of 2024. So that's certainly helping. Also, we're seeing a lot of win-backs of customers who left for lower-cost collaboration tools and are now coming back to us because they see the value in our products, even in a tight market for front-end software. So when people see the value of our products, that helps retention as well. The third item, AI-powered ACE, that's really elevating the discussions with customers, and that's certainly helping in the renewal discussions. And lastly, our customer success team is generally doing a better job of onboarding customers and retaining customers. So we're optimistic about making more improvements to gross retention in 2025 and getting back to ARR growth in 2025 as well. From a metric perspective, customer count has fallen through all the same reasons, obviously, that we just discussed. Is there a situation, and I know the big reason for that is it's really smaller customers turning off. It's more the volume versus the large contracts are kind of getting to that point. But is there a situation where or scenario, I guess is the better word, where you could return to ARR growth at whatever the right time is and still have customer count because you're turning some small customers decline in that scenario, or do you really need customer count to stabilize to drive the ARR growth? Scott, we're really an enterprise-focused company. Sharat mentioned earlier, the majority of our business, close to 80%, is customers over 1,000. Now, if you look at the customer cohort of the $100,000-plus customers using that as a proxy for the enterprise customers, and that's about two-thirds of our business. At the end of Q3 of 2024, that number had only decreased by about a half a dozen compared to the end of Q3 of 2023, which is about 2%, and a lot of that was actually due to customers. A lot of that net change was due to customers actually still renewing with us, but just at the lower threshold below the $100,000 threshold, as opposed to customer churn in that cohort. We are still seeing some churn in the lower dollar customer cohorts. Our total customer count decreased by 16 in Q3 of 2024, a relatively modest decline in what's typically a fairly seasonally soft quarter for us. That was still a decline, but it was a meaningful improvement compared to what we were seeing in 2023 and earlier 2024, so that's definitely trending in the right direction. Now, as we expect to get back to ARR growth in 2025, I would expect to see those customer metrics start to improve as well overall. Last question for me, then happy to turn it over, is you've successfully achieved attaining the positive Adjusted EBITDA kind of threshold. My guess is the business still has a lot of leverage opportunity coming through it. But what's the right balance now between margins and revenue growth as we go forward? You're obviously trying to accelerate the growth of the business a little bit, but how should we think about that balance? And I know you're not getting to 25 because it's too early there, but just in general over the next couple of years. Sure. Well, first off, the priority is always to return to top-line growth. We believe we will return to top-line ARR growth in 2025 and maintain Adjusted EBITDA profitability in 2025 as well. As you mentioned, we haven't given guidance, but we have said this publicly, and I'll reiterate it today. Let me talk about profitability first and what we've done thus far. In the last six quarters, we've been EBITDA through Q3 of 2024. We've been EBITDA and EPS profitable, and we're Free Cash Flow positive in the first three quarters of 2024 as well. For Q4 of 2024, which we haven't reported on yet, we did guide to being EBITDA and EPS profitable, and we'll obviously do our earnings call this coming February and provide an update on everyone on that. Now, in terms of what's the right balance, again, we're always balancing growth with profitability. The priority is to get back to top-line growth and maintain Adjusted EBITDA profitability. In terms of gross margins, which are an important part of that, our gross margins at the end of Q3 were 77%. That's up from 73% in Q1 of 2023. In seven quarters, a 400 basis points improvement. On a year-to-date basis, our gross margins in Q3 of 2024 compared to the prior year, we're up 200 basis points. We've made a lot of progress on that as well. Our long-term operating model is to have gross margins of 78%-80%. We're at 77% now. We're pretty close. On the bottom line, our goal is to get operating margins to 20%. We realize we still have some work to do there, but we're looking forward to returning to ARR growth in 2025 and maintaining Adjusted EBITDA profitability and continuing to make progress over time. With that, happy to open up for any questions in the audience.