Have WalkMe joining us for the Citizens JMP Technology Conference in San Francisco. Sitting to my left is Dan, who is the CEO and founder and who basically got here in 48 hours from Tel Aviv in order to make this presentation because one of his team members had an illness in the family. And so thank you. We really appreciate it. How was the flight? Long. Yeah. But made it. So maybe to start, Dan, why don't you just give us the short version of what WalkMe does and then tell us the founding story? Because when I explain, I start with your mom. I do. I start with your mom. And then people are like, "Oh, OK, I get it." So what does WalkMe do? But then it's hard to move to what we're actually doing. I know, but you can do it. So we're a digital adoption platform. Basically, our mission and what we provide to our customers, we're helping companies achieve the maximum ROI from their technology investments. And we're doing it in two ways. One, we're giving them full visibility into how their employees are using enterprise software, so workflows, where are they getting stuck, compliance, are they actually completing the process in an efficient way. And then once we're showing them where the inefficiencies or issues, we're allowing them to actually act on it and change the user behavior by showing people what to do in real time and how to complete the task, which brings me to the founding story, which was much simpler. What year are we talking about? We're talking about late 2011. We launched the product in April 2012. It was very simple, showing people how to navigate websites. Started with actually my co-founder, Mom. Oh, it was? Yeah, but now we're owning it. It's my mom, but a mom. And everybody, I'm sure in the audience had it, when someone calls you and like, "How do I do this?" And like, "Hey, you see the button? Scroll down. You see the checkbox? No, Mom. Not this button. That button." We wanted to solve that, like why there is no. Imagine trying to talk your mother through how to do a wire transfer on her Citizens Bank site and try and do that over the phone. Yeah, lots of family disputes over that. So we're just why there isn't a GPS-like experience on top of websites. And that's how WalkMe started. WalkMe through, we were overlaid on any application, and we're just showing them what to do. So my mom can just, "How do I transfer money? Click here. Scroll down. Fill this text box and move on." So that's how we started and obviously grew on. So stage one was how do you navigate basically consumer websites? Yeah. All right. What was stage two? Stage two was how you navigate enterprise applications. Yeah, and stage three was. Let's do stage two a little bit. So best example, Salesforce. Salesforce, yeah. How to create a price quote, how to qualify the lead, how to clone the lead. We had tons of people moving to Salesforce or other software. Salesforce is just one example. They used to have PDFs and videos. We measured it took you 8 minutes to read through a full KB article and then actually do it in the computer versus with WalkMe in 25 seconds. We're just showing you what to do, bulletproof. I would say that was the second phase. Third phase, we added analytics and data because companies wanted to know where they should deploy WalkMe, so which processes are not working, where people are clicking. When's stage three? I would say in the time frame of 2015-2017, probably. And then 2017-2019, by the way, massive growth in those years. So we started to sell in 2013. We sold our first $1 million. By 2019, we were $100 million. In 2013, it was $1 million. Yeah, end of 2013 was $1 million in ARR. In 2019, you hit 100. We hit 100. Yeah, I remember visiting your offices during that period. Yeah. It's crazy. And then what we saw, we saw that companies are using us on multiple applications in very different ways. 0 to $100 million in 5 years. 5.5, yeah. Yeah, we need to get back to that level. Then we saw that companies are using us in multiple ways, different buyers sometimes. And if you ask them what WalkMe is, each one would give you a different answer. So we're like, hey, we need to call it. We need to give it a name. What are they buying? Because the way we market, because no one knew what it is, we market the problem. Oh, you have an onboarding. You have compliance issues. You have this. You have that. So then we came up, I would say, end of 2018 with the name Digital Adoption Platform, DAP. And this is where we started really shifting into cross-application workflows, real business process optimization, and really understanding the enterprise architecture. And this is when we actually coined the term DAP. And then we're actually reporting on it on earnings, what we call DAP customers, which is customers that basically bought the full platform and deployed WalkMe on four more applications, which the average is dozens plus, even more. And then we added mobile. We added desktop. We did some acquisitions. And now it's what it is now, which is Digital Adoption Platform. Yeah, and what about Workstation? Where does that fit in? So because WalkMe is an overlay on top of an application, so you're going to Salesforce, you see WalkMe. You're going to Workday, you see WalkMe. You're going to Concur, you see WalkMe. Now, if you have WalkMe on 40 applications. By the way, has anyone in here actually ever seen WalkMe? If you use an application, what's the application that was on? Yeah. I used it at Dreamforce. They had the WalkMe Challenge. Oh, nice. They had me put in an order invoice or something like that. Then the whole catch of it is that the other guy had WalkMe, and he did it way faster. Yeah, and it's supposed to be in Concur, but I don't think it's in our version of Concur. It is. Is it? Yeah. Every question mark is WalkMe. Every help, every bubble, they're building with us. Really? OK, that's massive. OK, I got to understand that. It's completely white-labeled. It's completely white-labeled. Completely white-labeled. OK, and then we have an FSA for one of our FSA apps also, but there it's not white-labeled. There it says that it's WalkMe. OK. Yeah, OK, so Workstation. So you go to each one of the applications, and you see WalkMe. And why wouldn't you have one experience? So we build this interface that actually sits on your desktop or mobile. And you click, and you have everything, every process that you're doing on a day-to-day basis. And you just access it from there. So from just being an overlay on top of the application, we became the employee hub that you start the work. So you open it. I want to take time off. You open it. I want to submit expenses. I just finished the conference here. You want to do your expenses. You just click on WalkMe, and we're doing it for you, which saves a lot of time. Yeah, and the example I like there is T-Mobile, right? Yeah. Is it T-Mobile? T-Mobile on the iPad. So I mean, in my case, it's Verizon. It's basically the same use case, which is if you go to the T-Mobile store in the Corte Madera Mall, the person who's helping you is most likely a College of Marin 22 or 23-year-old, and their average tenure is maybe six months. And so there's no point in training them on all the underlying applications that you need to change a phone number, to re-provision a phone, to activate your data plan, to do it. And instead, they all have their iPad. And the four or five major things that they actually have to do, sell a new iPhone, there's a big button you push. And WalkMe does everything underneath. And then if you have to do something complicated, a manager can come in and can break through and can actually get into the underlying systems. All right, so with all that said, how's business today? Really good. We're really happy with how we started in 2024. 2023 was a massive transformational year for us as a company. We moved from losing over $50 million a year to generating $11+ million in cash in 2023. Plus, you talked about the stages. I think we entered a new stage where we laser-focus on Global 2000. We're laser-focused on the DAP customers. WalkMe has, I don't know, tens of dozens of use cases. We launched Workflow Accelerators to focus on what's actually working. So yeah, I would say I saw it in the airplane, the movie Dumb Money. I haven't seen it yet. Then I saw there another one was on Icahn: The Restless Billionaire. We had a pillow, and it says, "Happiness is cash flow positive." Yeah, I'm happy. But you had a pillow? He had a pillow, and it says, "Happiness is cash flow positive." So I'm happy, reducing a lot of stress. And we're generating a good amount every quarter. We did it super fast. And now we're focused on going back to the 2013 to 2019 levels. But we need to really now focus on ARR growth, accelerate it. And yeah, we're in a good spot. Yeah, so tell us again what the shift was from the burn to the profitability and what the time frame was? Yeah, and John, keep me honest. So I think in 2022, $56 million. And in 2023, we generated $11 million, so $65 million improvement in a year. And I would just say in Q1 2023, we burned $8 or $8.5. So it's not that we started only at the end of Q1. So we did it pretty fast. Q2 was already almost. Yeah, it's really just 2023, right? I mean, so they were at a $32, so in Q1, you were at a $32 million annualized burn rate. In Q1, yeah. Yeah, wow, wow. OK, how'd you do that? Oh, a lot of things. One, as I said, focusing on the enterprise brings a lot of benefits. They're not just the best cohort customers. Obviously, there was a lot of operating expense to deal with SMBs and smaller companies that obviously we were able to remove. A lot of support, right? They call more. Yeah, support, even traffic, everything. Another thing is headcount. So if we don't need to serve that many customers, we don't need to go after so many smaller customers, we can be much more efficient. Partners kicked in. So that allowed us to get a nice contribution of pipeline from partners, which reduced our marketing spend because we needed to generate the pipeline. A lot of it came from marketing. I would say overall efficiencies across the company, plus a lot of internal technologies that we developed just to be better, if it's on our support side, if it's on our services side, and so on. I don't know if you noticed, but service margins improved dramatically to Q4, become very profitable on the services. That was because of the partners and the delivery partners that we have. Look, managing a service as a business, it's hard. It's or you have too many resources or you have too low resources. The fact that we have so many partners allowed us to set the goal of where we want to be. And then when we have an influx of demand, we can just offload whatever we want to partners. Yeah, so one of the companies who was here before you was talking about this was oh, actually, they're totally in your space. It was Pendo. So Pendo was talking about how they had almost 100% retention of their developers up until a restructuring they did recently. And it could either be that it was the greatest place in the world ever to work, or maybe some of the developers were coasting. And so they ended up having a reduction in force. But he was saying that after, and this is all on the recording. But he's saying that after the overall productivity ticked up in the organization, even though there were fewer of them, which I thought was super interesting, and I go, well, why did that happen? And he said, well, a lot of the less productive people were actually making mistakes. Our better people were having to spend part of their day working on what they were supposed to be doing and then part of their day fixing other people's mistakes. I found that hard to believe. I go, really? He goes, 100%. Yeah, 100%. So what kinds of did you see that kind of dynamic, too, where actually if you're over-resourced, it creates inefficiencies? Two things. One, Q1 2023 wasn't our best quarter. We did Q2 much better on every parameter, absolute numbers, with 100 people less. The reduction in force was in Q1. The reduction of force was in the beginning of Q2. We finished much stronger, so less reps. Why? Why? Why? One, on the development side, I would say that a good developer worth 5x of a mediocre developer. And a great developer, it's 10x. And I'm willing to prove it anytime. So that's one thing on the development side. But yeah, I would say companies had a lot of over-resourced that creates more meetings and more process and more people that's saying no instead of just saying yes. And when people are very targeted and focused, and when you do a brief, you keep the best. So you're really able to achieve more. And yeah, look, a lot of the people that at least we kept were the best of the best in our company. By the way, we didn't do a big brief, to be honest. So we probably let go 40, 50 people at the April brief, something like that, out of 1,000. What we did, we didn't replace people that leave and stuff like that. Slowly, we reduced. There was another CEO who was sitting there right before who I just introduced you to. He said, "We didn't have any layoffs." I go, "Didn't you mandate a return to your campus?" He goes, "Oh, yeah, we did." I go, "What kind of turnover did you have from that?" He goes, "Oh, 20%, 25%. Yeah, yeah. I feel like with sales, what happens is if you have too many salespeople, they create sales cycles that actually have a low probability of closing. Then you end up wasting resources on low-quality sales cycles. They're unhappy because they're not meeting their target. Yeah, and you have to manage them. Yeah, yeah, so sometimes doing that reset is good regardless to efficiencies. So we learn a lot regardless to efficiencies. We have quarterly QBRs when all the reps are coming and presenting. We're actually reviewing every presentation and seeing if that rep has good strategic thinking, building the accounts correctly, and so on. We used to do it virtually. Now we're doing it face-to-face. In person, stand and delivers. Yeah, yeah, because we didn't mandate everybody to go back. Yeah, at Salesforce, they gave you the option of doing it virtually or in person. But they made all the virtuals go first. OK. OK, any questions from our audience? Jake? Just trying to understand, as Generative AI comes more into play, does that represent a risk as companies you heard an example earlier today about Klarna adding features into their Level 1 service themselves versus using their supplier, Freshworks? Why wouldn't Workday or whoever the application is start to add those feature sets to pop up? Where do I go from here? Yeah, great question. So for us, it's the biggest opportunity in the past few years because that's a huge change management. We're using generative AI for our service as well. The problem that employees have in most of the cases, and this is what we're seeing, is not where to go in Workday or where to click. This is obvious. By the way, you could have asked the same question regardless to GenAI. What happened if Workday will have walkthroughs inside of Workday and Salesforce will have walkthroughs inside of Salesforce? Do they need WalkMe? And the answer is yes, because the problem is not with the UI of the vendor. The problem is your own business process within the organization. So it doesn't matter if you will do the process or you will fill out your expense report from that conference in a chat interface or in a form interface. At the end of the day, there is a set of rules that your company set that you don't remember, and you don't know what to do. And this is where we're coming into play. We're showing you what to do in the right moment in the right time. I would give you a great example. We just had our SKO. When the employees came back, they opened their computer. We know who went to the SKO. Everybody got a pop-up, hey, welcome back from the SKO. Click here to complete your per diem expense. Now, once we're getting them to where we need to get them, that's easy. But we did the reminders. We saw who did it and who didn't. We had some caveat. People that came from Australia got $10 more. People that came from Tel Aviv. Now, that's where it started to be complex. And we're sitting there in real time showing you what to do. Now, Generative AI introduced a massive change management to organizations. We have CEOs that are coming in and say, "I want all my employees to use Generative AI by that date." And to be honest, not a lot of people are using it, or they're using it to a very niche, I would say, use cases. WalkMe is actually pushing you to use Generative AI based on the use cases that the company mandates. So for example, if you're Klarna and you're using this new agent and I'm not talking about a virtual agent that completely replaced a human being. WalkMe is still. We're there for the person. But let's say the person has now a new feature that they can resolve tickets faster. But they're not leveraging the AI or the GenAI in the right way. WalkMe will tell them, hey, by the way, you can do this and this and this. And by the way, next time when you get that type of ticket, escalate it directly to R&D. Click here. This button will open a ticket in Jira for you automatically. This is where we sit. And now we have companies that are saying, hey, we're investing $10s, if not $100s of millions in AI. No one's using it. WalkMe, how can you help me? So overall, we're seeing it as a big tailwind for us. And the way we talked about Workstation, we're seeing ourselves as the hub where the employees start the work and then go to the application. If you're using, and on average, companies have around 300 applications. On average, an employee uses 13-17 applications. You're going to use 17 copilots, and you're going to switch between them. And each one has their own UI. It's not sustainable. You need one way to work. And this is where we're taking it. And obviously, you can bring your own LLM. And WalkMe can be the interface. And at the end of the day, it's something that we feel is a huge tailwind right now because companies are like, hey, we're lost. We don't know what to do. And we're giving them even the data of who's using what, how they're using it, and so on. How big was federal for you last year? How big can it be this year? So we got the certification late March. So we had only 9 months of selling into federal. It was $ a few million in ARR in the first year, which was great. The team crushed it, did way over their targets. And we started in 2024 with a really healthy pipeline in that segment. And we're hoping to do much more. We already have active deals, active deployments. So we didn't factor a massive year for them in our model and our guidance. But there is a big opportunity there for us. What do you mean we already have active deployments? Last year, you didn't have anything live. And now you do. Is that what you mean? Yeah, so we have 4 implementations that we solved. Two was, I would say, beginning mid-year, right after March. They're already built content, already deployed, and so on. One of those is the Army. You guys announced the Army, right? We're in Army, yeah. Yeah, and in our last minute, which of your partnerships are you most excited about? I can't say one name. Those are all great names. But I would say the GSIs, Deloitte, Accenture, KPMG, they're all amazing partners. Why? Why? Yeah. They're bringing us to those massive deployments. They're like, hey, we have a huge S/4HANA migration. Hey, let's bring WalkMe in. So on average, deal size are 40%-50% larger. And the opportunities are closing almost 2x. Twice as fast? No, not twice as in closing ratio. So they're bringing very big deals. Oh, the close rates are a lot higher. Yeah, yeah, closing ratios are much higher when they're bringing deals. We saw a tremendous amount of influence on source in 2023. We want to see that continue in 2024, obviously help with reducing a lot of our costs. Yeah, awesome. Well, Dan, thanks so much for getting on a plane and making it. We really appreciate it. Thank you. Yeah, it's great to see you.