Good day, and thank you for standing by. Welcome to the Smartsheet second quarter fiscal 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Aaron Turner, Head of Investor Relations. Thank you. Please go ahead, sir. Thank you, Tabitha. Good afternoon, and welcome everyone to Smartsheet's second quarter fiscal year 2022 earnings call. We will be discussing the results announced in our press release issued after the market closed today. With me today are Smartsheet CEO, Mark Mader, and our CFO, Pete Godbole. Our Chief Strategy and Product Officer, Gene Farrell, will also be available during the Q&A. Today's call is being webcast and will also be available for replay on our investor relations website at investors.smartsheet.com. There is a slide presentation that accompanies Pete's prepared remarks, which can be viewed in the events section of our investor relations website. During this call, we will make forward-looking statements within the meaning of the federal securities laws. We have based these forward-looking statements largely on our current expectations and projections about future events, financial trends, and our expectations around the impact of COVID-19 on our business. These forward-looking statements are subject to a number of risks and other factors, including, but not limited to, those described in our SEC filings available on our investor relations website and on the SEC website at www.sec.gov. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our actual results may differ materially and adversely. All forward-looking statements made during this call are based on information available to us as of today, and we do not assume any obligation to update these statements as a result of new information or future events, except as required by law. In addition to the U.S. GAAP financials, we will discuss certain non-GAAP financial measures. A reconciliation to the most directly comparable U.S. GAAP measures is available in the presentation that accompanies this call, which can also be found on our investor relations website. With that, let me turn the call over to Mark. Thank you, Aaron. Thanks everyone for joining us today for our second quarter earnings call. Q2 was a very strong quarter for Smartsheet, our customers, and partners. Revenue grew 44% to $131.7 million. Billings grew 47% to $142.9 million. Our dollar-based net retention rate, which incorporates all of our customers, improved by 3 points to 128%. We ended the quarter with over 9 million users. Our ARR grew 10% quarter-over-quarter to over half a billion dollars. Our 1,856 customers with ACV over $50,000 now account for more than half of our ARR. In Q2, our average domain ACV grew 42% year-over year to $5,915. An expansion within our base included 143 customers increasing their ARR by more than $50,000, up 81% year-over year, and 49 customers, a Smartsheet quarterly record, increasing their ARR by more than $100,000, up 158% year-over year. Additionally, we had two expansions over $1 million in the quarter and now have 22 customers with ARR over $1 million compared to 15 last quarter. Enterprise customer deployments demonstrate Smartsheet's momentum in serving the scaled needs of those customers. Our industry diversification remains broad, with our largest industry accounting for just 12% of our ARR. Growth remains strong across industries, including technology, with customers such as Zoom Video Communications, Hitachi, Intuit, and PayPal, and in professional services with companies such as BDO, Insight Global, and Jacobs Technology. Q2 was a high-impact quarter for companies in healthcare and life sciences, with YoY ARR growth of over 50%. This growth was supported by expansions from companies including Allscripts Healthcare Solutions, Amgen, Prime Healthcare, Yale New Haven Hospital, Vertex Pharmaceuticals, CommuniCare Health Systems, and Medtronic. In addition, we saw strong performance across retail, with expansion from companies such as Burlington Stores and Gap Inc. Media and entertainment, with expansions at NBCUniversal and The New York Times, and manufacturing, with Johnson Controls and Whirlpool. Our customer acquisition was strong in Q2 as well. Thousands of new customers chose Smartsheet this quarter, including wins at Sky News Australia, Momentus Space, SMG, New Hampshire Department of Health and Human Services, Kestrel Coal, and Unified Field Services. What these customers have in common is a shared belief that Smartsheet is ideally suited to meet their broad and ever-changing needs. At its core, Smartsheet is an enterprise-grade dynamic work management platform designed to empower business users to transform how they work. We go to market using a land-and-expand model that often starts with a team or department choosing Smartsheet to solve a transactional use case like project management, task tracking, or goal management. The solution then grows through a low-friction, viral motion when users share their work and engage with those inside and outside of their organization. Where we excel is our ability to enable customers to extend beyond transactional use cases to support transformative operational workflows across their business. In part, this is made possible by our flexible data model, our advanced premium platform capabilities, and WorkApps no-code solutions. Our flexible data model combines the agility of a spreadsheet with the power of a database. Smartsheet Advance enables customers to configure and execute workflows between Smartsheet and other systems of record, execute high-volume processes, and change management at scale, and empowers IT to centrally manage compliance and security across multiple Smartsheet plans. Work Apps empowers business users to configure no-code apps and share these curated solutions while maintaining visibility and control for IT. In Q2, with the launch of Smartsheet Advance, we saw immediate resonance with prospects and customers, signing over 100 deals that included Advance. One example of a customer that expanded was Mimecast. Mimecast Enterprise PMO uses Smartsheet to support objectives related to growth and digital transformation, and with Advance, will now leverage Smartsheet to optimize programs and processes outside of that PMO, including marketing operations, channel partner onboarding, sales rep onboarding, and large customer account planning. Mimecast considers this investment as a way to remove friction and accelerate the speed of deployment for future Smartsheet solutions that leverage premium capabilities. In Q2, Smartsheet Advance influenced a significant expansion with a leading provider of equipment and services for data centers. This customer's IT, new product development, and marketing departments are at the core of this enterprise-wide deployment. With the Advance platform's premium capabilities, the customer will drive additional value and end-to-end cycle time improvements across critical parts of the business. Smartsheet Advance is also resonating with customers outside the U.S. One example, HIT Holz, a large German container and packaging manufacturer, deploys Smartsheet Advance to increase productivity by doubling project capacity and to capitalize on growing e-commerce trends by providing visibility across complex, ever-evolving project needs. A key selling point for the customer's adoption of Advance was the benefit of extending our platform to capture new use cases and further simplifying the implementation process. Beyond Advance, we continue to see customers using our platform at scale. Data Shuttle, which enables scheduled data transport between Smartsheet and other systems of record, processed over 1.7 billion records in the past 30 days, growing close to 20% month-over-month. Proofing was used by customers to collaborate on the creation of digital content 370,000 times in the first half of the year, representing YoY growth of over 350%. Customers have created 40,000 WorkApps since the launch without writing a single line of code. Customers leveraged Brandfolder to manage over 50 million digital assets as of Q2, a 200% increase YoY, and content delivery views in Q2 averaged 1.4 billion per month. We continue to innovate for our customers and launch new capabilities. To support our global and non-U.S. customers' data privacy compliance requirements, we will announce the availability of Smartsheet Regions this quarter. The first region, located in Frankfurt, Germany, enables customers to instantiate Smartsheet plans in-region and does not require any customer content to be shared or routed through our U.S. region. In the wake of changing regulations and heightened awareness on the subject, our research indicates that enterprise buyers are increasingly sensitive to fully, not partially, solving for data residency. We look forward to announcing the availability of additional Smartsheet Regions in the coming quarters. Our partner ecosystem continues to thrive as well. In Q2, we launched integration with HubSpot, making it even easier for customers to enable bidirectional real-time sync of data between HubSpot and Smartsheet. We also expanded our partnership with MuleSoft. With MuleSoft's connector for Smartsheet, customers can manage a variety of business processes, ranging from sales pipelines to event schedules. In addition to technology partners, our channel partner program is ramping well. We now have 650 channel partners, and in Q2, partner-influenced bookings grew 93% year-over year. I'm proud of the way our growing team continues to execute across the many dimensions of the business. Around the world, people are choosing Smartsheet for simple to sophisticated use case, whether mobilizing a team of creators or scaling a data-intensive workflow with embedded calculations or reporting on data from disparate internal systems. They do that at enterprise scale using a no-code interface that every single person can engage with. In the near future, everyone using a computer at a desk, a device in the field, or a combination thereof, will interact with CWM software every day. As the category leader pursuing one of the largest available TAMs in software and coming off our record Q2 performance, we are confident in our approach and will maintain a forward-leaning investment posture to drive results for our customers, shareholders, and team. Now, let me turn the call over to Pete to provide some additional detail on our financials. Pete? Thank you, Mark, and good afternoon, everyone. As Mark mentioned, Q2 was another strong quarter. Our Q2 outperformance relative to our guidance was a function of strong execution by our sales team, significant enterprise expansion, a record number of larger deals, and early success of our Advance offering. We have now surpassed pre-COVID levels across most aspects of our business. I will now go through our financial results for Q2. Unless otherwise stated, all references to our expenses and operating results are on a non-GAAP basis and are reconciled to our GAAP results in the earnings release and presentation that was posted before the call. As previously mentioned, second quarter revenue came in at $131.7 million, up 44% year-over year. Subscription revenue was $121.1 million, representing year-over year growth of 45%. Our momentum is reflected by the sequential increase in subscription revenue of $13.1 million, the highest quarterly sequential increase in the company's history. Services revenue was $10.6 million, representing year-over year growth of 40%. Turning to billings. Second quarter billings came in strong at $142.9 million, representing year-over year growth of 47%. Approximately 91% of our subscription billings were annual, with 6% monthly. Quarterly, semi-annual, and multi-year billings represented over 3% of the total. Moving on to our reported metrics. The number of customers with ARR over $50,000 grew 64% year-over year to 1,856, and the number of customers with ARR over $100,000 grew 73% year-over year to 748. These customer segments now represent 50% and 36% respectively of total ARR. Our domain average ACV grew 42% year-over year to $5,915. We ended the quarter with a dollar-based net retention rate of 128%, a 3 percentage point improvement from Q1. The full churn rate dropped further and is now below 6%. As a reminder, in Q3, we will lap the Brandfolder acquisition, which will result in a one to two-point headwind on our dollar-based net retention rate. Inclusive of this headwind, we believe we will exit the year with a dollar-based net retention rate above 128%. Now, turning back to the financials. Our total gross margin was 82%, 2 percentage points higher than the previous quarter. Our Q2 subscription gross margin was 87%, also 2 percentage points higher than the previous quarter. We continue to expect our gross margin for fiscal year 2022 to be between 79% and 81%. Overall, operating loss in the quarter was - $5.2 million or 4% of revenue, an improvement from 8% of revenue a year ago. This margin improvement was a function of scale across our sales and marketing and R&D lines inherent in our model. Free cash flow was - $3.5 million, which overachieved against our guidance due to strong collections. Let me move on to guidance. For the third quarter of fiscal year 2022, we expect revenue to be in the range of $138 million-$139 million, billings to be in the range of $149 million-$150 million, non-GAAP operating loss to be in the range of $15 million-$12 million, and non-GAAP net loss per share to be between $0.12 and $0.10 based on weighted average shares outstanding of 126 million. Our net free cash flow is expected to be in the range of - $17 million to - $15 million. Given our strong Q2 results and the continued momentum we see in our business, we are raising our full year fiscal year 2022 revenue and billings guidance. We now expect our revenue to be in the range of $530 million-$533 million, representing growth of 37%-38%. Billings to be in the range of $619 million-$622 million, representing growth of 37%-38%. We expect non-GAAP operating loss to be in the range of $55 million-$45 million and non-GAAP net loss per share to be between $0.44 and $0.36 for the year, based on approximately 125 million weighted average shares outstanding. Our free cash flow margin expectation in fiscal year 2022 is to be between -6% and -4%. To conclude, we were pleased with this quarter on several fronts. Among them, the resonance of our dynamic work platform offering that is apparent by our early success with Advance. Our billings outperformance, which indicates a strong demand environment in the quarter across segments and geographies. Enterprise traction evidenced by the record number of expansions greater than $100,000 and the sequential increase in customers with ARR of over $1 million. We see a big opportunity in front of us and are investing behind this signal. Let me turn it back to the operator for questions. Operator? Your first question is from the line of Brent Thill with Jefferies. Good afternoon. Mark, just on large enterprise, I'm curious if you could spend a little time drilling in on the traction you're seeing. Also, I know Pete mentioned it's early on Smartsheet Advance. What type of impact is that having? Then, for Pete, I had a quick follow-up. Hey, Brent. It's really a combination of seeing growth on two dimensions. The first is on the seat dimension, people enrolling more people on the platform. The second is elevating what they're doing with the platform. I think Advance is giving people a really nice composite offering where they can do everything from scaling a certain process, implementing better import routines from legacy systems. These are things that are, I think, fairly different than what I would say sort of transactional work management, which may be sort of team task coordination and event planning. I think what Advance is doing, it's giving people a much faster way to access the entire suite of offerings. For Pete, 47% billings down to low 30s on the guide. Many will ask why such a sharp decel. Can you maybe just bridge what's happening in Q3? I know there's some one-time M&A that's perhaps having some impact. Can you just walk through the decel and why perhaps it's maybe not as severe as it looks? Sure, Brent, this is Pete. The comparison points on a QoQ represent different economic realities. The comp in the first half is compared to a COVID-19-impacted base, and the second half represents starting to have a recovery from that base. That's one part of it. The second part of it is, in the first half of fiscal year 2021, we had no Brandfolder in the base. In terms of your specific question about Q3, if you recall, in Q3 of fiscal year 2021, we had a $4.7 million one-time acquired deferred revenue pickup, which when you sort of put into our guidance or factor into our guidance, would make our guidance about a 38%-39% year-over year growth. Great. Thank you. Your next question is on the line of Mark Murphy with JP Morgan. Thank you very much. This is Pinjalim on behalf of Mark. Congrats on the quarter, guys. One question. It has been a few quarters now since you launched Bridge. What has been the uptake of that product so far in terms of feedback? Are you seeing a lot of customers build kind of cross-functional workflow automation, such that Smartsheet is becoming more deeply embedded into the business processes? Is that part of the enterprise traction as well that you're seeing? Pinjalim, y ou really have to think about it across all of our connectors, not just Bridge. It's a combination of Bridge, Data Shuttle, and then our purpose-built connectors, and those are included in our Smartsheet Advance. With that availability of Bridge and those other connectors, we are seeing a significant increase in the number of workflows and the amount of data being transferred between Smartsheet and other systems of record. Importantly, it's enabling us to connect to both other cloud or SaaS offerings, as well as a significant number of on-prem legacy systems. Many of the solutions that we see out there today are where customers are pulling data from multiple sources into Smartsheet to manage a workflow or a process. We believe that definitely embeds us into the core workflow of the organization. A really great example of that is we have a leading sportswear manufacturer that's actually using Data Shuttle to pull data into Smartsheet from multiple legacy systems to manage product life cycle management of their sportswear offerings. It helps them manage inventory, logistics, and actually make better decisions about when to change out and cycle out of products. Understood. Just to double-click a little bit, the two expansions that you talked about, over $1 million, I think you said, if you think about between seats and other offerings, capability-based offering, how does that mix look at $1 million sequential? Is that more driven by seats or more driven by some of these other products? I think what will be notable to speak to is out of our top 10 deals this quarter, seven of them contained Advance. These are all hybrid deals where you have seat consumption as well as capabilities consumption. I think that's probably the best marker to point to. Understood. Thank you. Your next question is from the line of Terry Tillman with Truist Securities. Hey, guys, this is Connor Passarella on for Terry. Thanks for taking my questions, and congrats on the quarter. I just wanted to go back and talk about the international wins you had quickly. One of the things that we were kind of curious about was, you mentioned there is some different use cases between maybe the U.S. and international markets. What were those use cases, if you could maybe expand there? Connor, this is Pete. The use cases we see internationally are very consistent. There's the same kinds of use cases we see in the U.S. play out internationally as well. We saw that demand vector play out as strong internationally as it was domestic. Perfect. Just one quick follow-up. As you continue to land some bigger deals, seven-figure and above, are there any changes in linearity for forecasting in terms of these larger deals, and how should we think about those going forward? Thank you. I'd say we are closing larger transactions. That's a trend we're seeing. What you should expect in the back half is, as these transactions grow, we'll start to see a larger weight for Q4, and you're going to start to see an enterprise software seasonality play out. Great. Thank you. Your next question is from the line of Scott Berg with Needham. Everyone, this is John Godin on for Scott Berg. Appreciate you taking my questions, and congrats on the quarter. Just curious, given that the market is very much still in its early stages, coming out of the pandemic, are you guys starting to see customers seeking more to standardize on a single solution versus having multiple CWM vendors? Any color there would be helpful. Thank you. We still see a huge opportunity, which we consider greenfield. When we look at what we consider direct competitors in category, we're talking very low teens, like 10%, 12% of our opportunities we would consider, quote, contested. The vast majority are not. When we think about transactional use cases, there's so many teams and divisions within businesses that it's quite common in those scenarios where a team might choose a different solution. Where we see less sort of diversity is when it elevates within an organization and IT is asked to formally approve. That would mean making sure that we have consistency in policy, making sure that it's aligned with the authentication mechanisms, all those pieces. That's where we are seeing IT make a decision for one. However, I would say those numbers of opportunities are still quite few as the market is forming. We were talking a low single-digit% of an available TAM that's been penetrated. We do expect that to change over time, and one of the reasons we've invested so heavily on the enterprise dimension. Great. Thank you guys very much. Your next question is from the line of George Iwanyc with Oppenheimer. Thank you for taking my question. Mark, just following up on those competitive answers that you just gave, do you see very many head-to-head contested deals right now, or is the majority of the opportunities still greenfield? When are you displacing? What tools are you displacing? Well, I think as I said, about roughly 10% of the deals you would hear of another competitor, not named sort of status quo. As you move up the ladder in terms of the sophistication of what the customer's expecting, that number falls precipitously. Again, if you're looking for basic use cases, task tracking, team coordination, you're going to see more players there. As you move up, whether it's on the dimension of combining work management with digital asset management, the Brandfolder Smartsheet combo, there just aren't a lot of options in market for that. You see almost no competition there. In terms of the companies that are being displaced, think of certain markets that are maybe considered legacy, like the traditional PPM providers, the Planview of the world. I think there's a really neat opportunity to take significant share in markets like that. The team's done a great job of getting us ranked number one in the PPM G2 ranking recently. We see a really neat opportunity there to also take share. Okay, the new customer generation continues to be pretty solid. How do you feel about that going forward? How are your partners contributing there, and do you expect incremental leverage now that Smartsheet Regions is going to be available? Yeah. This is Gene. As we called out on the call, we're seeing a nice uptick in partner contribution to overall ARR growth. I think that we are absolutely looking at how we can support customers to land more often and discover what's possible with Smartsheet. Then as they learn what they're capable of, graduate and move up to higher-level deployments and capabilities. We think it's important to both continue to land pretty aggressively, as well as drive the expansion motion. I think Smartsheet Regions will be a nice way for us to reach markets where data residency has been a concern for customers, particularly when you look at markets like Germany, where the regulatory environment makes it really challenging for local companies to host and manage all of their information in the United States. We see the launch of our first region in Frankfurt as an unlock for us, and there'll be more to come. Thank you. Your next question is from the line of Keith Bachman with BMO. Hi. Thank you. I had two questions, if I could. The first is, I want to try to understand how you're thinking about your longer-term profit targets, including free cash flow, which you've previously given. How do you think about the path to realizing those targets of call it 20%+ margins at a time when both yourself and your competitors are growing very fast, but none of which are generating positive free cash flow or generating positive operating income. How do you think about the growth of trying to realize those targets, or how should investors thinking about that? I have a follow-on, if I could. Keith, this is Pete. The guidance we gave on the total revenue was between fiscal year 2023 and 2025, we'd get to $1 billion of full-year revenue. We expect that to be in the back half of the year. When we get to that, we expect that to be in FY 2025. Right. When we get to that number, we believe our model is capable of generating free cash flow at scale. That's kind of the statement we've made. We think it's completely possible, and to invest in the meantime as we get there. We're sort of taking advantage of all the opportunities to invest and the huge demand that's ahead of us. Okay. Let me jump to my second question, though, is your average ACV per customer is still growing very rapidly, 42% year-over year. Yet it still represents a relatively small% of spend, so to speak, for your average client base. What are the main sources of friction that you see to keep growing that number over the next 12 months, and what are the main strategies and tactics that you're taking to keep growing that average ACV per customer, if not accelerating. Yeah. We've grown, I think, north of 40% for quite a few quarters in a row now. I don't feel like we're feeling a lot of friction on that. With the Advance introduction, really making it easier for customers to understand what's available to them, and then give them a very straightforward mechanism for engaging with us. It's one of the reasons why you see 158% growth rate on the over $100,000 deals. It's landing with customers right now. We serve tens of thousands of organizations today. Our job is to make sure that our customers understand what their pathway is. As we think about improving both the entry point into our platform as well as the presentation of the full suite, I think it's a lot on us to how do we really product market that extremely well. I think the ROI on some of these implementations is so high, we're not seeing sort of challenge in terms of, "Well, we're not sure there's value here." It's more helping people understand how it coexists among their CRM investments, their ERP investments, and their other integration platforms that they have. We're very pleased with the progress. Okay. All right. Thank you. Your next question is from the line of Arjun Bhatia with William Blair. Yes. Thank you, and congrats on the results. Mark, maybe one for you. I'd love to understand the role that Advance is playing in new customer acquisitions, and if that's a part of the conversation at all, with new customers, or if it tends to be more of an expansion point as customers graduate from that transactional use case to the more transformational deployments that you talked about. I think one of the really neat observations from the 1st quarter was that we had more Advance sales within our commercial quota-carrying rep group than we had in our large enterprise. The message of Advance resonates all up and down the spectrum. What we're finding is as customers are assessing which company to go to market with, which to buy, they're saying, "What are my immediate needs? Then if I'm successful, what is going to be asked of me in six months, a year, or two years out?" I think the understanding of Advance and the presentation of Advance, not just from a capability standpoint, but from a governance and an IT and security dimension, that is something that's coming up more and more and more. Even if someone's not ready in their first month to say, "Okay, I want to do a full Control Center Data Shuttle, full integration with Salesforce," it's important for them to know that, because what they don't want to do is paint themselves into a corner and say, "Oh my gosh, we have tremendous success with 200 people, and we're collaborating really well," and then find out that they hit a roadblock with some type of IT requirement. It is part of almost every one of our discussions now, and we have enough confidence in the pathway to not have to force someone into Advance out of the gate. Since the beginning, it's been around the earned enterprise. You will sell someone what they need, you will educate them on what's available, and then you will support them throughout that journey. That is what we're now starting to see accelerate. Wonderful. That's very helpful. Then Pete, maybe one for you, just on the guidance. I think we saw almost a $20 million increase to both revenue and billings for the full year. I don't think we've seen that level of a raise before. Can you maybe just walk us through what you're seeing through August and the pipeline that gives you the confidence to raise guidance so meaningfully? Arjun, as we looked at the quarter, we were really pleased to see some really strong demand signals emerge. The first one was on the transactional business, which we consider sub 50, which came back to pre-COVID levels. It was in the number of transactions that came through as well as the cycle time to close those deals. Positive on that front. The second thing we saw was the greater than 100K deals, which we consider large deals. Those grew 158% year-on-year. Really strong momentum there as well. The last signal, which was very meaningful to us, was the first quarter out of the gate with our Advance pricing and packaging. We saw that gain traction. After being announced in June, we booked over 100 deals, and it was in seven of our top 10 transactions. That's the confidence that we are seeing as we build our guidance in revenue and billings that we've shared with you. Wonderful. Thank you very much. Your next question is from the line of Steve Enders with KeyBanc. Great. Thanks for taking the question here. Just want to touch a little bit more on the strength that you're seeing in the 100K deals and the million-dollar deals. Just want to get a better sense for kind of what you think the biggest drivers are within that part of the market. Do you think it's improved execution within your sales team, or is there something fundamental that's changed in the market over the past year now that is helping drive and support this? I think what we're observing is when we thought about how we were going to orient our offering with Advance, we always talked about customers, customers. How are they going to perceive it? How can they understand it? After talking about customers so much, we said, "Hey, isn't this also going to be a huge benefit for our sales team?" As you're hiring, upticking, I think 30% more quota-carrying reps, the impact of having a more easily understood offering with value statements has a massive impact. I think we're at the beginning of that, and we are hiring very assertively throughout this year. Again, that combination of both great for customer. Much better for that new onboarding sales rep as well. I would say again, both on the commercial dimension and large enterprise. Okay, that's great to hear. Just to, I guess, follow up on that, it's good to hear the continued sales execution and hires there, how are you thinking about the channel opportunity and having that augment that go-to-market motion? How is the channel, I guess, kind of changing the types of customers or the opportunities that you're bringing in here now? I think what we're recognizing is that the channel is not just about who brings leads to you. It's about who can also provide expertise in certain areas in solutioning that you're trying to solve for. If you have someone who's steeped in manufacturing, steeped in healthcare, steeped in technology best practices, those can be super additive to your sales business. When we talk about the 93% year-on-year increase, it is both a combination of people bringing us deals and also assisting on deals. I think that that hybrid go-to-market of Smartsheet team combined with partnering field, who's the trusted source already, we see that as actually a very significant portion of that, what we call the channel business. Okay, perfect. Thanks for taking my questions. Your next question is from the line of Michael Turrin with Wells Fargo. Hey there, this is Michael Berg on for Michael Turrin. I wanted to kind of piggyback on some of the last few questions along the success in large enterprise. When you think about both the impact of the channel as well as Advance, how can we quantify maybe the increase in ACV for some of those, either partner-led deals or deals with Advance? Obviously, there's the seven out of 10 largest transactions in the quarter metrics. Just kind of curious how to put some more color around that. I think when we look at Advance, it's a sign that somebody's making a more substantive investment in the platform. We do expect that all Advance transactions will be north of $5,000, right? Everything that you have is going to be accretive to that measure. In terms of when partners are involved, I think partners are often very well-suited to have larger solution discussions. They may know the business more deeply. They may know what that business is looking to solve for, which I think lends itself really well to a more, again, substantive solution that they're presenting. Very often, those larger solution recommendations require the strength and the platform that Advance offers. I would say if you're looking to sell a very significant solution, it's probably going to be more than seats. It's one of the key indicators that we see when somebody's really looking to do something, again, beyond that transactional work management work. I think we will keep it there in terms of additional texture, but we're very pleased to see that the growth will continue to be shaped by just flat out usage and then also the suite offering that we've been speaking about. Very helpful. Thank you very much. A quick follow-up. When you think about your business longer term, obviously, you've stated the sizable TAM, but with lots of greenfield. When I think technologically speaking, we keep hearing RPAs coming into workflow automation type use cases. How can you talk about your platform in either using RPA or coming up against it potentially competitively and just thematically as it pertains to the Smartsheet business? Yeah. Hi, Michael. This is Gene. I would say that today, we really see RPA as being a complement to where we are. RPA vendors are moving beyond just trying to automate a kind of rote process and starting to move more into orchestration. You saw us, I think last quarter, we announced our integration with UiPath, and we're seeing the ability to engage with customers as they think about their whole software suite and really think about what are the workflows that maybe will originate in RPA and then move over into Smartsheet, to engage with their teams. It's really not an either/or. It's really a both from what we've seen. I think that's part of why we're building bridges there and alliances because we hear that signal from customers that it's being part of that strategic software stack really requires you to be able to interact with RPA and the other big systems of record, whether it be ERP or your HR systems. That's what we're building for. If I could add one piece is I think one of the hallmarks of our category also is it provides the interface. It's not only the platform that processes, it's the interface that people configure and actually utilize to update that information and trigger events. That interface takes years and years to develop and tune to get aligned with the user preference. I think that's one thing that will keep our category very relevant as people are looking to solve. Your next question is from the line of Rishi Jaluria with RBC. Wonderful. Thanks so much for taking my questions, guys. Nice to see continued improvement here. First, I'd like to actually start exactly on that. By all metrics, business continues to improve. Just want to get a sense, how much of the acceleration and improvement in the underlying metrics so far is just a recovery, and some of the headwinds fading that we saw during the pandemic, SMB coming back, versus factors, longer-term secular tailwinds, things like work being more hybrid, turning more asynchronous in nature? Have those tailwinds started to show up in the business or have those really yet to play out? I've got a follow-up. I really feel like we've surpassed where we were heading into COVID-19. It's really refreshing to see. The offering has changed, right? I think people's fluency around what they need and what is possible has fundamentally changed over the last 18 months. This is not about getting back to where they were. I think people are in a much stronger position today to make informed calls. Pete, anything to add? I think what I would say is, we're starting to see that recovery go beyond where we were in the COVID times. You can see that in the metrics, whether it's the transactional volumes, whether you see that in the cycle times, you're seeing that in spades. I think you're starting to see that. I think as it relates to the, are we a systemic beneficiary of it? I think that's a longer-term question. Clearly over the last 12 or 18 months, the fluency with the space has gone up, and you're seeing that in transactional volumes. Okay, great. That's helpful. Then Pete, for you on the billing side, it looks like there was a big uptick, specifically in the mix of billings that are annual, kind of actually higher than even it was pre-COVID. I know during the pandemic there was some talk of customers wanting to go to shorter duration deals, go monthly versus the annual deals. Can you talk a little bit more about that mix? Are you seeing more willingness to sign upfront annual deals versus that monthly or what's going on there? How should we be thinking about the billings mix going forward? Thanks. I think, Rishi, if you looked at the mix we had in the thick of the pandemic, we saw a little bit more from the monthly sort of plans we saw in place. Since then we've been probably consistent in the amount of annual plans. It might vary a little bit by 1% ±, and that's kind of the trend we're seeing. Okay, wonderful. Thank you so much, guys. Your next question is from the line of Tyler Radke with Citi. Hey, good afternoon. Thanks for taking my questions. You talked a lot about data residency this call, and just really wanted to expand on that topic a little bit. Just give us a sense for how significant of a breakthrough that capability was, and maybe why it wasn't released earlier. Just give us a sense for maybe some pent-up demand that you could see internationally from rolling this feature out. Yeah, Tyler, this is Gene. The real unlock for us in data residency was the transition we completed last year to public cloud. We really needed to move our infrastructure into the public cloud to enable the ability to extend to different regions around the world. The first region in the area where we've seen the most customer interest has been in the EU, specifically residency requirements in Germany. That really became an unlock for us after we completed that cloud transition. We do hear significant customer feedback around the need to have a local resident, or having their Smartsheet data being in country for a broad set of use cases. It doesn't mean that we don't get adoption in the EU today. We definitely believe there will be a lot less friction once we have that unlock. In Germany in particular, there are a number of data regulations that prevent certain types of data to be stored outside of the country. You have a similar scenario in APAC, Australia, for example, any government customers have a requirement that all of their data be in-resident as well, or in country as well. We see it as a natural extension and in the coming quarters, we'll have more to talk about the things we're doing to expand our footprint and grow internationally, and we believe Smartsheet Regions are going to be a key contributor to that strategy. Great. If I could ask a follow-up just on the guidance. Certainly, most metrics, revenue billings were raised. I look at operating income, you outperformed by over $10 million in the quarter relative to your guide. Despite the raise in revenue, looks like you're keeping your full-year operating guide the same. Was just curious if that's timing-related. I think most companies we've seen just in terms of the budget for T&E returning and return to office continues to get pushed out. Just any color on where that incremental spend is coming from. Thank you. We are investing aggressively in an opportunity we see ahead of us. All the overperformance or deltas we apply into investment capital. That's been the thesis of how we've operated. That's kind of what you're seeing across the board. We are committed to the $55 million to $45 million in Op income that we've guided to, and we're investing the delta. The negative. The negative. Thank you. Once again, ladies and gentlemen, if you would like to ask a question, please press star, then the number one on your telephone keypad. Again, that is star one. Your next question is from the line of Allan Verkhovski with Wolfe Research. Hey there. Thanks for taking my question. I wanted to ask, how was the linearity in the quarter? How does it compare to prior periods as well in terms of how the pipeline progressed? Is there anything to think there that could be exciting from an upside perspective, such as federal activity going forward? I've got a quick follow-up. The linearity we saw in the quarter was very consistent with the previous quarter, so no real change there. I think in general, we were pleased with how the pipeline converted both in-quarter generated pipeline as well as pipeline before the start of the quarter. We had similar metrics across regions and segment that seemed very consistent. Got it. You had also mentioned that gross churn is getting better. Could you talk about what is necessarily driving that? Is that a result of the market or what you're pursuing, and how much better can it get? Thank you. We saw gross churn improve. In the prepared remarks, we said it dropped below 6%. I think we're seeing two elements drive that. The first one is, a year ago, we were hearing a lot more about COVID. The number of mentions in COVID in all our accounts has gone down significantly, which is the first item. The second item is we're seeing that our platform, the new UI we launched, is very engaging, and customers are really resonating with what the UI does for them. We believe that's a contributor to seeing a lower level of churn. There are no further questions. Mr. Turner, do you have any closing remarks, sir? Great. Thanks, Tabitha. Thank you, everyone, for joining us today, and we will speak with you again next quarter. This concludes today's conference call. Thank you for participating. You may now disconnect.