All right. I think we are ready to go here as participants are joining into the panel here. Good afternoon, everybody. Welcome to our first quarter 2021 earnings call. We're pleased to report our results today. Joining me on the call are Mikkel Svane, founder, CEO, and chair of the board, and Elena Gomez, Chief Financial Officer. During the course of today's call, we may make forward-looking statements, such as statements regarding our future, financial performance, product development, growth prospects, ability to attract or retain customers, and ability to compete effectively. The assumptions, risks, and factors that could affect our actual results are contained in our earnings press release and in the risk factors section of our prior and subsequent filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31 of 2020, and our upcoming quarterly report on Form 10-Q for this quarter ended March 31, 2021. We undertake no obligation to update these statements after today's presentation or to conform these statements to actual results or to changes in our expectations, except as required by law. Please refer to today's earnings release for more information regarding forward-looking statements. During this call, we will also be presenting both GAAP and non-GAAP financial measures. The non-GAAP financial measures should be considered in addition to, not as a substitute or in isolation from, our GAAP financial information. You can find additional disclosures regarding these non-GAAP financial measures, including reconciliations with the comparable GAAP financial measures in today's earnings press release and our shareholder letter, and for certain non-GAAP financial measures for prior periods in either the earnings press release or filings for such periods, all of which are available on our investor relations website. With that intro, I turn over to Mikkel. With that exciting intro, thanks, Marc. I know you enjoy saying this as much as everybody enjoys listening to this, so thank you again. Welcome, everyone. Good afternoon. We are off to a very good start here to the year with 26% year-over-year revenue growth. It's up three points from last quarter. The strong underlying performance driving this revenue growth was driven by the broad-based strength across regions as companies of all sizes are increasingly interested in evaluating and deploying our solutions that are agile, easy, provide fast time to value, and is in this very quickly evolving online-first world. Early here in Q1, we introduced the new Zendesk Suite, a messaging-centric and radically simplified new type of complete customer service solution. With only two months in since launch, the new Zendesk Suite already has attracted more than 3,000 customers and now accounts for about 7% of our total recurring revenue. The robust adoption of the Suite also contributed to the strong year-over-year growth in our average deal size. This quarter, we made a number of strategic appointments to our management team and to our board of directors as we set ourselves up for the next phase of growth. I'm excited, of course, today to share and very pleased to announce that Shelagh Glaser will join Zendesk as our new CFO on May 28th. Shelagh comes to us from Intel, where she has hold a wide variety of leadership positions. Most recently, she was the CFO and COO of the Data Platform Group. We're also very excited to have Alex Constantinople join our leadership team. As previously announced, he's joining us as our Chief Marketing Officer, and we have been big fans of Alex Constantinople for a very long time. I also want to use this occasion and this opportunity to welcome Brandon Gayle, Steve Johnson to our board. We are very lucky to have you. Before closing here, I want to take a moment to say or to express my thanks and appreciation to Elena Gomez, who's now leaving us, and allow me to go a little off script here as I also say that it's been an absolute pleasure to work with you, Elena. The financial results speaks to themselves. What we've done as an organization speaks for itself. Also on a personal level, it's been an absolute pleasure to get to know you, get to know your whole family, your mom, that makes a fantastic ceviche, your kids, your girls that have been so good to my girls, too. At least taking the youngest girl to the pool and really enjoy that. It's been really fantastic to get to know you, Elena. We wish you all the best. Also, of course, your husband, John, it's been really remarkable to have you as part of our little family, and we wish you all the best. You produce really well here, and we're all very proud of everything you have accomplished and wish you all the best. With that, I'm going to let you take everybody here through the numbers. Thank you, Elena All right, thank you. You didn't tell me you were going off script, I got to get the emotion out of this script here. We did enter 2021 with continued momentum. During Q1, our gross bookings growth accelerated for the third quarter in a row, and our churn and contraction rate reverted back to pre-pandemic levels. We maintained great momentum with new customers, and on the expansion side, our dollar-based net expansion rate was 114%, up two percentage points sequentially. First quarter revenue increased, as Mikkel Svane said, 26% year-over-year, accelerating from 23% in the quarter prior. Revenue outperformance was driven by broad-based strength across regions and all sizes of customers. GAAP gross margin for the fourth quarter was 79.6%, up 4.7 percentage points year-over-year. Non-GAAP gross margin was 81.8%, up 3.5 points year-over-year. Gross margin improvement was driven largely by revenue scale and increased optimization of our personnel costs in our product support organization, and efficiency from our hosting infrastructure. GAAP operating margin expanded by 4.9 percentage points year-over-year. Non-GAAP operating margin expanded by 4.1 percentage points, driven largely by revenue outperformance and gross margin expansion. Free cash flow was $26 million in the fourth quarter. Moving on to guidance. Given our strong Q1 2021 results and continued momentum in our business, we are raising our 2021 revenue guidance to $1.298 billion- $1.318 billion, which represents approximately 27% growth year-over-year at the midpoint. Our 2021 strategy is defined by growth, we will continue to scale our business. We expect non-GAAP operating income in the range of $96 million- $101 million. We expect free cash flow for the full year 2021 in the range of $105 million-$115 million, which includes expected accelerated rent payments of approximately $7 million related to our real estate changes in San Francisco. Before we get to your questions, I'd like to say that I'm extremely proud of everything I've done, that this company has done over the past five years. It's been an absolute pleasure with so many genuine and talented people at this company. I want to thank the sales team for always making these calls super fun. I also want to thank our analysts and investors for your support. I believe Zendesk is well positioned to achieve its long-term aspiration of $3 billion+ in annual revenue. I will be rooting, be the biggest cheerleader, for the company on the sideline. With that, I'll turn it over to Marc. Thanks, Elena. It's been great working with you and partnering with you over the years. We have accomplished a lot together. Before we open up for questions, I do want to cover a few additional points around both our operating metrics and gross margin. As you know, we've been on a journey evolving our product offerings to be more solution-oriented rather than product-based. Going forward, we're leading with our new Zendesk Suite. To that end, we're replacing our paid customer count metric with a customer logo count. In addition, with the elimination of our chat-only offering, you can and should expect our logo net adds over the near term will be suppressed as we let some of the entry-level chat-only customers depart Zendesk over time. We're also evolving our enterprise proxy metric. We do believe a $250,000 annual recurring revenue mix metric is a more representative way to reflect our progress in moving up market. The percentage of support ARR generated from customers with 100 or more support agents was approximately 45% at the end of the first quarter 2021. Again, we'll be sunsetting this metric, and we'll only report on the new metric going forward, beginning in the second quarter of 2021. Lastly, just a little more detail on gross margin. We continue to realize efficiencies in our cost of goods sold as we scale, including our data infrastructure costs. Additionally, in our customer success organization over the past year, we've been evolving that to closely support our go-to-market motions that include account retention and renewal, as well as identifying future expansion opportunities. As a result, our GAAP and non-GAAP gross margin has benefited from this evolution. Excluding the impact from this change, in Q1 2021, our GAAP and non-GAAP gross margins would have been 77.8% and 80.3%, respectively. We will begin to open up for questions. As you know, we take these questions and put you through randomizers. The first question today comes from Parker Lane of Stifel. Let me find you, Parker, on here so I can unmute you, or you can unmute yourself. Can you hear me? Yep. Great. Well, thank you all. Mikkel, very great traction with the new Zendesk Suite in two months, I think 3,000 customers is what you announced. Could you just talk about how that's resonating within the entire base? I mean, 3,000 customers is very solid. I assume a lot of those are your more power users or customers that have been very engaged with you for a long time. As we think about the conversion rate of customers over the next two or three years, what are you hearing out there in the field right now, and how is that new product resonating with customers? We have never launched such a successful product or bundling or Suite or anything like this before. The reaction has really been beyond our expectation, and we're slightly overwhelming. We're very excited about all the customers using this. I think there's two trends here. First and foremost, we're really invested in the simplification of really making these things elegant, quick to use, easy to use, very easy to set up, very easy to get going. We made messaging an integral, key, natural element of the whole flow in which you can communicate with your customers. These are two key trends we see amongst both new and current customers, so we are very bullish about the continued adoption of the Suite. We believe that that will be the default motion for all of our customers. Yeah. That's very helpful. As we think about, I think I mentioned, or I saw in the announcement you had, there was 50% growth of customers with ARR above $500,000. Is that primarily customers that have expanded with you, or are you seeing much more traction landing those enterprise-type logos now with the Suite offering that you have in place? It's both. Our key business motion is very much a land and expand motion. That is driving the majority of our growth as we move deeper into the enterprise. It's, of course, also affected by new customer wins that are larger than they traditionally was. All right. Thank you. Best of luck on your next move, Elena. Thanks. Thanks, Parker. Up next is Jen Lowe. Can you hear and see me? Yes, we can. Great. We can. Maybe just to follow up on that last question around the new disclosures on the greater than 250,000 and greater than 500,000 and the growth rates you're seeing there. Certainly, the growth is really impressive, and it's great to get that. It's very helpful context. If I just look at this period, specifically, on one hand, you're anniversary the start of the pandemic and movements to shelter in place. On the other hand, you have Suite as a contributor on the large, boosting ASPs. I'm just curious, if we look at those growth rates, the 40% and the 50%, is that a representative number that we should think about as being the normal growth there? Or is it possible that there were sort of some comps that might have made that a little higher than normal that we should be aware of when we examine it going forward? Jen, I'll touch on the comps a little bit. If you recall last year, really, the pandemic began to play a role much more in Q2 than in Q1. The comps get easier as you get into Q2, actually, than Q1. That said, Q1 obviously was impacted at the very end by the pandemic as well. In general, we feel very good about our track record, and that's why we made sure to provide a multiple year track record of how our 250,000 ARR accounts have grown as a percentage of our total. There is definitely consistent performance there over that period. Q3 and Q4 can sometimes be more seasonally oriented to those type of accounts, but definitely is strong, kind of underlying traction there and is more representative of our large customer activities we're doing. Great. One more from me, just again, on the disclosure on the 3,000 customers that have already moved to Suite, in particular, ones that are existing customers that have made the move to Suite. What's sort of the uplift? Is there any kind of rule of thumb on what the uplift looks like for an existing customer making that transition? It seems like it's out of the gate been pretty successful, 7% of ARR already. Is it going to go a lot higher than that? How should we think about that as being a tailwind to ARR growth over the next year? We have said in the past that you can get anywhere from a 10%-30% ARR uplift from customers that are going into Suite. In this quarter, we observed about a 20% uplift. It'll vary from quarter to quarter in mix of customers coming in, but there's definitely a nice uplift available to us. Great. Thank you. Sure. Next up is Drew Foster. Hey, thanks for taking the questions. Nice quarter. Also want to offer my best of luck to you, Elena, on your next chapter. Thank you. Sure. First question for Marc or Elena. Since you've traditionally had a fairly significant portion of your billings that are less than a year, I wanted to explore the extent that duration is playing a role, both in Q1 or embedded in your full year guided growth rates. Generally, I think we understand you're starting to see larger customers and existing customers commit to longer deals with you, which is definitely great from a visibility perspective, but longer duration doesn't always mean ARR uplift, and that dynamic could throw a head fake or potentially inflate growth rates to the extent duration starts to elongate, especially as we're getting into easier compares throughout the year. Could you just put some color around that, to the extent that's a tailwind for you this year? Well, definitely over time as we're moving up market, we're seeing longer-term contracts. Remember that 50% of our business continues to come from monthly customers. Those are just, you have to think of the mix of our customers, but certainly at least as long as the last couple of years we've been tracking this, we can see that our contract term length is moving up slowly. It's not going to be a sharp, steep move, but steadily as we're moving up market, you're starting to see longer-term contracts. The sales team is very focused on longer-term commitments, which as you know, has a positive impact as well to our long-term churn and contraction rates. Okay. Then, follow-up for Mikkel or I guess a toss-up. Question as it relates to what you're seeing with messaging, can you give us a sense for either in the back half of 2020 or early here in 2021, how often messaging is sort of a key pillar of the customer's reimagined contact center or customer engagement efforts? What's the view on how sort of the traditional customer service ticket routing scenario fits into the model? In addressing that, could you maybe offer what you're seeing in terms of messaging volumes? What's the trend line look like since the start of the pandemic? Is it hockey stick and you're sustaining those levels? Just give us a sense of that piece. Yeah. We haven't shared any specific stats on that other than saying that is definitely one of the fastest, if not the fastest growing channel for us, all these different both social and private messaging channels. There's no doubt that that's the behavior that is kind of the, as people are re-engineering, rethinking their customer service. They're very much adapting it to this new world that we're living in. There's no doubt that messaging is front and center. Of course, it also challenges how we think about our products and that. It's like routing and escalations and so on around a message-based interaction. So very different from an email-based interaction. That's of course something we're working with all our customers on. A lot of our customers also have to deal with that. That's a different way of engaging with customers and it looks a little different, and they have to think about staffing differently, and measuring differently, and all these different things. We're going through that journey with all our customers and it's very exciting. I don't have more specific data on that to share today. That's something we can look forward to doing at some later point in time where we feel more confidence about sharing these things. There's no doubt that this is where we see the world is going, and our customers agree to that. Yeah, that was a great answer. All right. Okay, next. We got to move to the next question from Kirk Materne. Great. Thanks very much. I'll echo Elena, congrats on a really great run at Zendesk and best of luck. Mikkel, maybe for you, as you all have now launched Suite, are you able to have conversations maybe at the outset with customers at perhaps a higher level in the organization? Are you starting to see sort of who you're interacting with, maybe moving up to a more strategic level at maybe up to the CEO level as customer service takes on a higher imperative, in this new sort of dynamic we're all dealing with? I was just kind of curious if, I think that was happening already. I was wondering if Suite helps accelerate that sort of evolution. Sorry. I think the pandemic has made your customer experience much more front and center for a lot of businesses because it changes all your traditional kind of metrics. It changes all your traditional way of thinking about the customer relationship. There's no doubt that that's a backdrop for the change we're seeing in how people have to think about customer interactions and have to think about these new channels, embracing new channels, and building kind of customer relationships in a different way. I can't sit here and say, "Yeah. All this messaging is bringing us into the CEO." We're definitely living in a world where kind of the customer experience, the customer engagement over all these new online channels is much more front and center for our customers. Okay. Marc, obviously, or Elena, if you look at any of the enterprise metrics, whether it's CRPO, the average ARR above $250,000, it's all trending in the right direction. Obviously, you're going deeper with your customers. You're getting broader with your customers. I was also just curious, are you getting into bigger customers? Meaning, are you landing at a larger customer level more often? You guys have had a lot of success in the mid-market and then kind of growing with your customers. I was just kind of curious if you're actually seeing more enterprise, more what we consider Fortune 500, Global 2000, however you want to sort of define it. Are you starting to get into those at a little bit more, I guess, normal cadence? I would say that we continue to evolve and we're doing both, as Mikkel said earlier. Essentially, as you know, our roots are land and expand, so that continues to be a critical motion for us. Certainly we're starting to, like you said, have conversations at the C-level, as well as continue to occasionally land those larger deals, which I think you can see in the metrics in the shareholder letter how that's playing out over time. That's a good momentum we're seeing. Again, we continue to focus on land and expand, but both are true. Great. Thank you all. Thanks. Next up is Brad Sills. Oh, great. Hey, guys. Thanks so much. Congrats on a nice quarter. I wanted to ask about net revenue retention. Obviously, you saw a nice move up this quarter. Still not at that 115% or high teens level that you had seen kind of previous to the pandemic. I guess my question is two things. One, what drove the uptick this quarter incrementally? Where were you seeing more expansion activity? Is it just simply the Suite or more seats or customers coming back? Could we see that metric get back to that kind of high teens level? I know the goal is 110%-120%, so that would be towards the high end, but what would it take to get back to that level? Yeah, we have confidence in that number continuing to move upward over the year. I think there are a couple of things going on. First, a broader product mix that kind of is focused on the Suite. Again, we get an uplift from our existing customers. Think about some of the industry categories that were hard hit. They're just now beginning to return to normalcy, and we would hope to see more normal expansion of just natural growth from those set of customers as car rideshare and kind of some of the hospitality and transportation industries come back. What I would say is that, through that whole period, if you look at our churn and contraction rates have already come down to pre-COVID levels. Now we would expect the next step to be kind of the expansion rates to come back to those pre-COVID levels, which we hope will happen over the next two, three quarters. Great. That's great to hear. Thanks, Marc. One for you, Mikkel, please, if I may, on Sunshine. I know heading into last year, there was a big push with Sunshine, a lot of new features that were released, an exciting offering. With the pandemic, customers pulled back, I think, from some of their plans to deploy support in a more strategic way, more custom way. What are you hearing from customers on those types of projects? Are they coming back to these types of projects to think about deploying Sunshine and Zendesk in a more kind of custom way and embedding it into the kind of fabric of front office applications? Brad Sills, I don't really have anything new to share on that. Our focus with the suite is also to make a lot of the Sunshine components easily available for our customers without having to go into a new purchase conversation. Also making some of these tools a little bit developer heavy and more easy, friendly to use for a majority of our customers. We're definitely seeing Sunshine in a lot more hands today. I think it's too early for us to say exactly, talk about adoption, but it's becoming more part of the normal adoption of Zendesk. Happy to share more about the examples of usage and so on that we are seeing maybe later in the year. Make sense? Yep, absolutely. Thanks, Mikkel. Elena, thanks so much. It's been great working with you. Thanks, Brad. Next up is Jonathan Kees. Great. Can you hear me? Yep. Hey, Jonathan. Great. There we are. It looks like you can see me too. Thanks for taking my questions, and I'll start by saying we'll miss you, Elena, and best of luck. With my questions, I guess I wanted to ask in terms of the pricing, maybe this is a question more for Mikkel. How much did pricing play in terms of this uptake of the 3,000 customers? You talked about you simplified it, and I would actually hypothesize it's kind of you discount it because you're still not charging by usage, like for messaging. You're still just charging by seat. How big of a factor was pricing in terms of the uptake of the new customers for Suite? First and foremost, Jonathan, you need to find your microphone. Oh, sorry. Just want to share that. No, there's something wrong with that. Oh, no. [Crostalk] No, we can hear you. I can hear. There's just a lot of noise. Oh. All right, okay. all that now. Let me say, if you think about the pricing as a discount, I'm happy. I think we have achieved what we wanted to achieve. It's really about simplifying our pricing, making it much easier to understand, much easier to buy our products, and much more transparency around these things. These are key areas as kind of we have sophisticated all our products and product directions over the years. These were one of the key asks or one of the key demands in the market was to simplify these things. It works out opposite. It works out, we see a growth in average deal size, not only from bigger implementations, but from the deals we can do with the Suite. We see an uptick with the new Suite. We have achieved what we wanted here to make the perception of the product much easier, much simpler, much cheaper, if you will. We're seeing all the improvements in average deal size that we had hoped to see. Okay, great. If I can ask just a quick follow-up. Hopefully you can hear me clearly here through the mic. In terms of the improvements you made, like the hosting efficiencies and the revenue scale for the gross margins, can we say, is that going to be continued now going forward, or is this more of a one-time thing for Q1? Well, I think we made some great strides around our gross margin over time. We had the benefit of moving to cloud infrastructure, and we've kind of finished the swing on that. There will be incremental improvements we'll always look for in COGS. Yeah, I would expect this that we'll be in the low 80% gross margin for the time being. Super. All right. Thank you. That's a non-GAAP gross margin. Yes. Got that. Okay. Bye. All right, next up is Samad. Hi. Great. Thank you for having me on. Elena Gomez, I'll echo look forward to working with you in the future, and hope you get some well-deserved R&R in the meantime. Marc, congrats on the new role. With that out of the way, maybe just as we unpack the net expansion, can you help us understand maybe how much of that was from the customers that were negatively impacted in 2020 versus just the traditional expansion you would see out of the other 80% on a regular seasonal basis? I have one follow-up question. I think a lot of our expansion is really showing up from just good, healthy business characteristics. Not all of our customers that had got hit hard last year have really returned fully. I think that we just have a very healthy expansion dynamic. People are bringing back employees, which means they're using more agents. We're getting a higher ASP from customers moving to the suite, and really those are the primary factors here that are helping our expansion rate, and gives us confidence that we'll continue to move our expansion rate to that mid to high level where we were prior to the pandemic. Understood. Maybe a different way to ask it, related to the customers that actually did really well that may have been COVID beneficiaries. I bought a Peloton during all of this, and I think they're a Zendesk customer when I chatted with the service bot. I'm curious how you're seeing trends with maybe what were COVID beneficiaries, and if you're starting to see either that taper or we just continue to compound that growth as well. Maybe just help us understand if there's anything that's reverting to the mean inside of that base. I'm going to let Mikkel answer that, but I think we believe that a lot of the changes in the market are durable. Yeah. I think that this pandemic has taught us all something, it's changed a lot of our habits permanently. A lot of these habits will stick around. You mentioned Peloton. There's no doubt that this year has been a breakout year for Peloton. The convenience, the pleasure they have brought to our lives and how we can do these things, that's permanent. That will change people's mindset around these things. These are the trends that we are talking about with our customers. What have changed on a more permanent scale or on a more permanent kind of timeframe with the kind of the convenience, et cetera, we can bring to our customers. Because these things will last. We will never go back to how things were before. How we shop, how we consume, how we watch movies, how we get our stuff, all these things will have changed permanently. We will take what we have learned the best from the pandemic, and that will play a big role in how we do things going forward. That's what we are seeing, that's what we are talking to all our customers about. Hope that helps. No, great. Thank you so much, and appreciate you guys taking my questions, and nice start to the year. Thank you. Arjun, you're up next. Hey. Hey, guys. Good to see everyone. The growth metrics that you disclosed on the 250,000 and 500,000 ARR customers, very impressive. Is there any way that we can get a little bit more granular into that? Are you seeing broader seat deployments that's driving that? Is it customers that want advanced functionality, so they're coming in at those higher pricing tiers? Just how should we think about some of the growth that you're driving in those larger customers? Yeah, I can start, and Mark or Mikkel, you can add. Essentially, we're seeing what we've always seen, which is customers start out with us and they grow with us, and that's continuing to be through seat expansion, through more product adoption. That hasn't really changed other than what Mikkel just talked about, which is some of the COVID impacts that are durable are continuing obviously to show up in our expansion rates. That would be just characteristically what we do is, we land a customer, we expand them. As we talked about earlier, there's certain cases where we're seeing customers of larger sizes come to us. It's a little bit of both. Over time, as we've now launched the Suite, we've evolved our product that's resonating more with these larger customers. Okay, perfect. That's very helpful. I know we've talked about Suite a lot, but I was just curious what you're seeing in the Sales Suite, whether that's seeing the similar level of upmarket success with larger customers, or if it's still relatively an SMB mid-market solution today. It's still very much like an SMB and mid-market solution today. That is where our focus is for it short term. Longer term, of course, see more and more interesting things, and I think especially as we integrate the products deeper, there'll be some new opportunities for getting into some new type of deployments where we aren't today, but that's future. Understood. Thank you, and congrats, Elena. Best of luck in the future. Thanks, Arjun. Next up is Brent Bracelin. Thank you. Hopefully the mic's working here okay. It is. I guess we'll start with Elena and finish with Mikkel. Elena, I guess first off, it's just been a pleasure working with you over the last five years. Amazing journey you've had here scaling the business, I think what? 5x in five years. I think it was under a $200 million business when you joined, and certainly well over $1 billion today. The good news is that we hope you get a break. The bad news is there's a lot of board opportunities that would love to have sales-scaling expertise, so I suspect you're going to be busy. My question for you is, the high end of the guide here does suggest growth could accelerate back above 30%, back to pre-COVID levels in Q2. What parts of the business are leading this recovery? Is it enterprise? Is it international? Is it higher close rates? Are you seeing the top of funnel build here? Just trying to assess the optimism and what's driving the optimism. Yeah as we were going into Q2. Thanks for the question. Really, it's broad-based, Brent. I can't point to one thing and say, "This is the thing." In fact, that's what's actually very encouraging and given me the confidence. You think about, as we started looking at the complexion of the quarter, we started looking at all the segments. They all performed really well. We started looking at all of our regions, we're seeing what I would say a very broad-based success across our business. The Suite is also very encouraging, just thinking about over 3,000 logos already with two months of activity, and already 7% of our recurring business. That just is so encouraging for us, as well as the increase in average deal size. All of that is really what gave me the confidence, and the guidance philosophy hasn't really changed. As we always talk about, we look at sort of the probabilities, and every quarter has a little complexion between enterprise and SMB, but it's really broad based. On that, maybe for you, Mikkel, you talked about Zendesk Suite now becoming the default sales motion, and you've had messaging as an add-on, but walk me through the appeal here. Is Zendesk Suite appealing to the largest customers? Is it appealing to all customers? What's so different about Zendesk Suite that you didn't have before that you have today that's resonating, and at 7% ARR today, five years from now, is it 30%? Could it be 50%? Just trying to understand why is it resonating now and different when you've had this add-on messaging component stuff for a while. Well, yeah. I think as we see a few more quarters, we can talk with a little bit more confidence about the trend here. We feel very good so far. I think a lot of what Zendesk is about is this concept of democratizing technology, democratizing the capabilities that are normally more complicated, more expensive, easier to kind of adapt or adopt and use and so on. I think that's one of the main driving north stars for the suite is that it's not just about putting these things together, it's really about, on one side, making these things work elegantly together and making it as easy to set up a call center or a messaging-based customer service center on email-based, or switch between the three and just don't have to think too much about it. You don't have to plan all these scenarios. It's relatively easy. The technology, the product is guiding you. That's one thing. I think on the other side is just we probably have, with all the capabilities and all the features and all the smart stuff we can do, we probably put too much friction into the sales process, so it became a little overwhelming for a lot of customers. We simply put too much choice and confusion, to put a little bit on the extreme end. I think these two things are really helping with the adoption of the suite, and this is where we put all our effort going forward. You raise friction in the product and friction in kind of go to market, pricing, packaging, and those two things combined seem to be resonating. Very helpful, thank you. Thanks, Brent. We're going to go on to Patrick Walravens. Oh, great. Thank you. First off, Mikkel, I haven't been on my Peloton in about a month, but I am getting emails from one of the instructors, which is like, "Missing you on the leaderboard. Miss you doing this workout. Olivia." I have a feeling you may be driving that. That's an awfully personalized email. Look, here's my question. That's a little bit too much information about your private life. Yeah, here's my question. Mikkel personally singled you out, right? You have a ton of leadership changes here, right? You have a new CFO, you have a new CMO. The old CMO is becoming your new COO. Your President of Products is now your CTO, and you now have a Deputy CFO. Congratulations, Marc. Thanks, Pat. When did you decide to make all these changes, and what were you thinking? It's not all driven by the same thing. First and foremost, Elena's announcement was, of course, not something we had planned. We did try to nail her to her computer, no success there. We did some changes there forced by Elena's departure. I think the rest of the changes we're doing is that we're complementing with the team with some great talent. We are shaking up a little bit parts of our organization where we believe that some of our product people to get closer to our customers and closer to some of the cultures we have kind of nourished in some of our customer-facing operations. At the same time, it's also very important that we have a CTO for our enterprise engagement, and that we can play a much more kind of offensive, aggressive play there and really kind of lean in on a lot of the gray space there is between kind of product capabilities and how customers want to use products today. It's all driven by our growth ambitions. It's all driven by our ambitions to have a stronger storyline in the market, to be a much better partner for the enterprises and, of course, building a company for future growth. Can I ask, the deputy CFO, that's a first one. What was the thinking behind that? Well, I don't think it's a first and foremost. I think it has brought and will bring a tremendous amount of stability to the transition we're doing here, and a way of kind of making sure that in a transition, that there's somebody to support both the outgoing CFO and the incoming CFO, and can be a connecting tissue for the rest of both the leadership team and the team in the finance organization. Then I believe that it will set us well up for the future, too, to have more leadership, more people that can kind of think bigger for what we want to do with our teams. Thank you for that perspective. That was a lot of information about. T hat's great. [Crosstalk] I got to keep moving. We got six more people. Thanks for the great questions. Derrick, you're up next. Can I just ask you guys limit to one, because we're going to run out of time otherwise. Oh, shoot. Okay. I'll do better next time in keeping the meeting going. Well, Elena, I just wanted to say you'll be missed. It was great working with you, and I hope to cross paths down the road. Maybe, Mikkel, I'll throw it to you. Zendesk Relate was normally a demand generation event for you guys. I don't think you held a virtual event this year. Would love to hear just kind of how you're investing in marketing and different areas of demand generation. I know Alex hasn't started yet, but you have a new CMO coming on board, and what are you expecting out of her in terms of new initiatives? I think everybody in the tech sector, and a lot of other people are thinking about how should our future event strategy look like in light of different behaviors. Also to ensure that we can all celebrate together, but also understanding that often there's a lot of wasted calories. We didn't plan for a Relate this year because that would be around now that we would do so, or have an event. It's definitely not the time to have a big offline event. We have a sea of smaller events online, and that has worked out really, really well for us. We have much better engagement. They're much more targeted, they're much more focused, they're much more interactive, and that has worked out really well for us. How we think about it for the future, yes, definitely going to have Alex involved in figuring that out. Thank you. Thanks, Derrick. Thanks for understanding, too. Dan Regan's in for DJ. Hey, guys. Thanks for taking our question. I get the strategy of putting messaging at the core of the Zendesk Suite, with the goal of driving utilization before focusing on monetization, and then the pricing dynamics. Are there any stats that you can share around utilization that would show that you're seeing traction adoption? How does this compare to your initial expectations? I don't think we have more stats to share. We shared some. We had a report out earlier this year, our benchmarking report, where we could show that, for example, messaging was the fastest growing channel among our customers. I can refer to that, but we don't have anything on the new Suite. It's still too early days to kind of share data for that. Make sense? Got it. All right. Thanks again. Elena, our team wishes you the best. Thanks, Dan. All right. Next up, Ken Long. Hey, can you guys hear me okay? I can't seem to get the video going. Yeah, we can hear you fine. Oh, there we go. I'm alive. I guess I just wanted to touch on the strong billings dynamic. Also really good current RPO growth in the mid-30s. I guess to what extent should we lean on those particular metrics as a potential leading indicator of revenue growth? Maybe not this year, but maybe first half of next year. Any thoughts there would be great. Yeah, I mean, I'll start. I would just say RPO continues to be a great proxy for us. In fact, I would encourage you to look at that, because our billings, as you know, many of our customers are monthly, and that billings number can move in any given quarter. RPO is a good proxy for us in particular. Just remember, it doesn't always capture all of our customers. You have to look at a couple different data points. We definitely encourage you guys to look at RPO, especially as our proxy for enterprise. Great. Thanks a lot, Elena, and thanks for all the help. Yep. Thanks, Ken. Next up, Alex Zukin. Hey, guys. Thanks for taking the question. Elena or Mikkel, it's unusual to have such strong enterprise activity happen so early in the year. As you all know, enterprise software is a Q4 business. What do you ascribe some of the success? Is it more bounce back? Is it better sales talent? Is it the demand environment? How would you categorize it, and then how would you talk about your pipeline and what you're seeing now for the rest of the year underlying some of the confidence? If I look at the CRPO bookings, it looks like you actually accelerated in Q1 versus almost every quarter last year on your toughest comp. Yeah, I'll start, and Mikkel, you can definitely chime in. I think Marc said it earlier, at the end of Q1 last year, just remember, COVID started to hit us towards the tail end of March last year. I just give kudos to my sales team, their resilience through the pandemic and exiting Q4 and into Q1, executing like a machine. We really invested in hiring reps early. That was part of our strategy, has always been to hire early to make sure we have that quota on the street January 1. I think that's part of it. The other part of it is we're seeing success across all of our regions, which is always generally helpful. We look at the regions as a portfolio. When they all perform well, that obviously helps with our results. That's what I would call out as really that as well, as you're starting to see a little bit more optimism. I don't know that we're completely out of the woods, but we're definitely starting to see more optimism with our customers. Alex, I'm just going to add, if you think about last year, when you hire early, and you keep people in their seats, they become more productive, and they generate their own pipeline. We're seeing all of that execution improving over time, which really is what gives us a lot of confidence. Perfect. Thank you guys, and congratulations, Elena, and looking forward to working with you again, wherever you land. Thanks, Alex. All right. Thanks, Alex. Next up is Stan. Okay. Awesome. For everybody's sake, I'm going to stay off video. Oh. Elena, we'll definitely miss you. It was awesome working with you all these years, so best of everything, and hopefully our paths will cross in the future. One quick question from my end. I wanted to come back to Zendesk Sunshine for a second. How are you guys thinking about the product into 2021? What are your expectations internally as far as the adoption and the contribution to the revenue growth for this year from Zendesk Sunshine? Could you just remind us, what's your latest thinking on pricing for Zendesk Sunshine specifically going into this year? Thank you. Our plans for Sunshine is primarily focused on getting into people's hands and having people start using it more naturally as part of extending and building capabilities alongside the Suite. Making it really, really accessible, making it very, very easy to use is kind of our key focus for this year. Once you kind of grow out of the basic capabilities, there's an upsell opportunity, which is of course important for us, but I would say right now and we will be for this year, much more focused on getting it into the hands of people and getting them to use it. Got it. Thank you. Thanks, Stan. Last question today comes from Chris Merwin. Can you guys hear me okay? It looks like I can't seem to get the video on, but [Crosstalk] [Crosstalk]r ight now. There we go. There we go. Okay. All right. Thank you very much. Just in terms of my question, love to hear a bit more about the SMB business. Based on the new enterprise disclosure, we can see the incredible growth you're seeing in the enterprise segment. It would imply slower growth for the rest of the business. Can you just talk a bit about how much of a focus that area is for you? Should we just think about the enterprise mix continuing to go up and up and up, and that SMB area is going to be more covered by other vendors in the future? Just curious how you're thinking about that customer segment strategically. Thanks. Yeah. I would just say it's really important to understand that that segment continues to be important to us. We, in fact, invest in making it super easy for those customers onboard with us because a lot of those customers, as we talk about, expand with us over time. There's not a scenario where we become an only enterprise company. We will always focus on continuing to grow our SMB business because we know a lot of those ultimately turn into enterprise. It doesn't mean we can't go up market, but we continue to make sure that that experience, that web try and buy experience, is really efficient, and that we can continue to onboard those customers. Chris, one of the things that's important about that segment is we have a lot of graduates out of SMB into commercial, and some of them even go into the enterprise over time because they're best for internet businesses, e-commerce businesses, other companies that we do business with. Being relevant in SMB is always going to be part of our story, and it's, I think, a very important kind of driver of our future growth. Perfect. Thank you both, and Elena, all the best to you in your next chapter. Thanks a lot, Chris. All right. I want to thank everyone for joining us, and again, this is bittersweet for me because this is my last call with Elena. It's been a great ride, Elena, and thank you everyone for listening in to the Zendesk call today, and we will see you all next quarter. Take care. Yep. Bye, guys.