Note that certain statements made during this conference call are forward-looking information within the meaning of applicable securities laws, including those regarding our future plans, objectives, growth, and expected performance, including our outlook for the fourth quarter and fiscal year 2022. These forward-looking statements represent our outlook only as of the date of this call. While we believe any forward-looking statements we make are reasonable, actual results could differ materially because the statements are based on current expectations and are subject to risks and uncertainties. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise.
Further information on these and other factors that could affect the company's financial results is included in filings we make with the Canadian Securities Regulatory Authorities, including the section titled Risk Factors in the company's final supplemented prep prospectus, dated November 17, 2021, which is available under our profile on SEDAR at www.sedar.com. Additionally, some of the financial measures discussed on this call are either non-IFRS measures or operating metrics used in our industry.
A discussion on why we use non-IFRS financial measures and operating metrics, and where applicable, a reconciliation schedule showing IFRS versus non-IFRS results are currently available in our press release and our MD&A dated as of today, which may both be found on our investor relations website at ir.coveo.com or our SEDAR profile at www.sedar.com. Please note that unless otherwise stated, all references to any financial figures are in U.S. dollars. Now I will turn the call over to Louis to begin.
Thank you, Nick, and thank you all for joining us today. I want to start our first earnings call as a public company by thanking all of our employees, customers, partners, and investors for their support in helping us get to where we are today. In our first quarter as a public company, we delivered strong results that demonstrate the demand for our software platform is resonating with our target market. Our purpose is to democratize the use of AI for every business so that they can deliver the personalized and relevant digital experiences that people expect. Our third quarter results are evidence of the importance of this to today's enterprises in commerce, websites, customer service, and workplaces. In our third quarter ended December 31st, Coveo saw year-over-year SaaS subscription revenue growth of 50% and total revenue growth of 39%.
We also delivered the largest bookings quarter in the history of the company, even when excluding the contribution of Qubit, which we acquired in October 2021. We had strong performance across all four of our lines of business, particularly in commerce, which excluding the contribution of Qubit, more than doubled year-over-year. Including the contribution of Qubit, commerce represented our largest line of business in terms of bookings. We also meaningfully exceeded our bookings targets for our solutions integrations with SAP, Adobe, and Zendesk. Transactions with new customers represented approximately 50% of our total bookings, and our net expansion rate as of December 31st, 2021 remains strong at 112%, demonstrating the traction we made with both new and existing customers.
Today, enterprises around the world are discovering the critical importance of relevance in every digital interaction with their customers, partners, and employees, and the imperative of using AI to achieve this goal. As individuals, we expect our digital experiences to be highly relevant to us, personalized, coherent, and even prescriptive. When businesses deliver this, we reward them with our time, our money, and our loyalty. This level of deep personalization cannot be achieved at scale with only manually- programmed rules. If you want to deliver a million different experiences to a million individuals, you need AI. This is the challenge Coveo solves. Coveo's AI platform is named the Coveo Relevance Cloud, which provides the intelligence layer that injects relevance and personalization into any digital experience that a business delivers across commerce, websites, customer service, and their workplaces.
Within milliseconds from the start of a digital interaction, Coveo begins to personalize a content or shopping experience tailored just for you. Coveo's AI does this by using interaction data to understand who you are, what you like, and what drives better outcomes. Coveo's data platform remembers your actions and preferences across different channels. It also understands what other people like you have experienced and knows what information, products, content, or answers brought them satisfaction and drove better business outcomes. In its simplest form, Coveo delivers tailored search that works better with results centered around individual people, not just content. In its mature form, it means a personalized experience that goes beyond search as Coveo anticipates the user's needs and delivers the personalized recommendation, information or product that are most likely to lead to a positive outcome for both the person and the business.
Customers using our platform have seen significant ROI across multiple solutions. In commerce, when a search experience is personalized with AI and product recommendations are rich and more relevant, purchase conversion rates and average order value or cart size improves. Within customer service, Coveo helps customers help themselves using AI and deep learning to show them the content they need, deflecting support calls and streamlining operations, while also improving agent proficiency to decrease escalations and increase customer satisfaction. For a website, Coveo helps deliver improvements in site search, website visits, and conversion rates, helping companies ensure their site visitors always have a relevant experience and engage more. In workplaces, we use the same AI technology to make intranets intelligent and to personalize employee self-service across unified enterprise knowledge, helping employees to become more proficient so they can do more on their own.
Today, we help businesses across a variety of industry verticals deliver relevance in their digital experiences. As we disclosed at the time of our IPO, these areas represent a combined $39 billion estimated total addressable market, with commerce representing more than half of that. We continue to believe that our addressable market remains underserved today and see a tremendous opportunity to capture additional market share as we expand the use of our platform with existing customers. To tap into this addressable market, Coveo has three powerful compounding growth vectors. The first is growth within our existing customers. Whenever we land a Coveo customer with a single use case, that customer becomes a source of near-term expansion. If we start in commerce, for example, we can expand into customer service and their websites, and so on.
Second, we will continue to penetrate our current markets to acquire new customers using both our established sales and go-to-market channels, and also new distribution mechanisms such as our product-led growth strategy. Third, we intend to tackle new markets and opportunities as we bring on new partners, develop new verticals, and expand geographically or via M&A. In the quarter, we added a number of exciting new customers, including Spectrum Brands, a home essentials company trusted by millions of consumers all over the world. We also had significant expand transactions with companies such as Informatica, an enterprise cloud data management leader, and Brother International, a premier provider of home office and business products and industrial solutions. I would also like to share how some of our customers are using Coveo's platform to deliver relevant digital experiences at scale.
One of North America's leading retailers for outdoor recreation merchandise leverages Coveo's platform in commerce. With over 1 million items in their product catalog, Coveo is able to promote the most relevant products to customers using query suggest and product recommendation machine learning models. The launch of Coveo in mid-November drove an immediate impact on this customer's commerce website, with Black Friday sales increasing by 11%. Since the start of 2022, they've reported that nearly 40% of over 20,000 products or service solutions that prioritize relevant, individualized content on every results page. As of January 2022, the vast majority of all products and service solutions that users accessed across this customer's websites were promoted by Coveo's machine learning capabilities.
Further, the company is now expanding to implement our product recommendation solutions to provide useful and related products to their end customers at the point of purchase. Additionally, a leading APAC retailer in the household hardware industry is now using Coveo's platform to provide their online customers with relevant products and advice from their expansive product catalog of over 250,000 items by implementing multiple of Coveo's product recommendations machine learning models and solutions for their customers based on what's trending, appropriate to the customer's context, or more importantly, what drives the most revenue. In an environment where the supply of certain products has been limited, Coveo's recommendations have enabled the website's hundreds of millions of searches per month to adapt to, display, recommend, and track the purchase of the right products for end customers.
Finally, a global financial software company with approximately $10 billion in revenue leverages our solutions to create relevant intranet search experiences for their employees. Coveo's search experience directly impacts employee satisfaction and productivity. As a company that is acquiring new business and operating with a seasonal influx of employees that can increase anywhere from 50%-100% depending on time of year, search effectiveness is essential. Their 2022 goals include expanding Coveo to other areas of their business. On the M&A front, in Q3, we acquired Qubit, a U.K.-based leader in AI-powered personalization for merchandising teams. The acquisition expanded our presence in Europe and also added many prestige B2C customers in verticals like luxury, fashion, beauty, and travel and hospitality.
I am pleased to report that in Q3, Qubit bookings exceeded our expectations and increased significantly year-over-year when compared to the third quarter of our fiscal 2021, with a number of marquee wins with both new and existing customers, including ThirdLove, River Island, and Kate Spade UK. We continue to invest in research and development, and I'm excited to announce the rollout of multiple new innovations in the quarter. The first is our deep learning case classification model that greatly improves the quality of support cases submitted by users through automatic prompting of relevant classification tags. These classification tags are learned using natural language processing techniques and a deep learning algorithm that processes and understands the text appearing in existing support cases.
We started rolling out this feature with several customers and have seen strong results with click-through rate improvements in excess of 60% in some cases. We also launched our Smart Snippets feature, enabling users to get direct answers to their queries without having to navigate away from the results page. Answer snippets are automatically extracted from the content using rules based on document structure and tags. Smart Snippets scoring model leverages a combination of both linguistic and dense semantic features to match queries to answers. We are already seeing strong traction with customers going live and testing this feature. Our partners are an important part of our business as we improve user experience and increase value through our deep integration. We work with about 150 system integrators globally to allow our customers to implement Coveo successfully.
We also have a number of strategic relationships with leading global technology platforms, such as Adobe, SAP, Salesforce, ServiceNow, Zendesk, and Sitecore, to deliver an easy and secure experience that feels truly native within these third-party applications. This quarter, we announced a deeper integration with Adobe Experience Manager, including the release of Coveo for Adobe Experience Manager on the Adobe Exchange marketplace. This makes it easier for digital leaders and developers to bring robust, relevant search experiences to Adobe-powered websites, intranets, online stores, and technical documentation. Our solution combines prepackaged machine learning models for query suggestion, automatic re-ranking, dynamic faceting, question answering and Smart Snippets, and recommendations alongside a new native connector for indexing content. We also launched Coveo Search and Recommendations for SAP Commerce on the SAP Store.
Our offering uses relevant search and real-time intent detection to deliver the buying experience today's consumers expect, thereby helping to drive more revenue conversion for SAP clients. Coveo's enterprise class AI complements the SAP customer experience portfolio and helps retailers and manufacturers get even more out of SAP Commerce Cloud. This quarter also saw the continuation of our strong momentum in EMEA. EMEA bookings, excluding Qubit, were more than 2x what they were a year ago. Including Qubit, EMEA represented over 25% of our total bookings. We expect to continue to make additional investments in our go-to-market organization in EMEA to sustain this momentum and further grow our footprint. I'm also extremely excited to announce that Nicolas Darveau-Garneau joined our executive team on January 31st as our Chief Growth and Strategy Officer.
Nicolas brings incomparable experience and knowledge to the company, specifically when it comes to digital innovation and disruption, and particularly in AI. Nicolas will oversee our global go-to-market and corporate strategy and help us maximize our next stage of growth as a global leader in applied AI for digital experiences. Nicolas is a former Google executive, where he worked 11 years and most recently served as Chief Evangelist. In this role, Nicolas oversaw the entire global team responsible for advising and working with executives at large global corporations and Google's top advertisers, helping them improve their global digital strategy through the creation of many innovative digital marketing best practices that leverage data and AI technology. Before I turn the call over to Jean to discuss our financials in more detail, I want to reiterate my pride in Coveo's historic 1% pledge.
We have pledged 1% of our employees' time, 1% of our product, and 1% of our profits to make a difference in our community. Additionally, at the time of our IPO, we pledged 1% of our equity to support Coveo's ESG activity around democratizing knowledge and education. We are committed to making a real impact in our communities and are excited to update you as our ESG efforts expand. In closing, we believe that the Coveo Relevance Cloud is a platform that makes it possible for any business to participate and compete in the new digital experience economy we're in, powered by data and AI.
We help by democratizing the use of AI for every one of those businesses, enabling them to participate and compete, and we all win when that happens. Our success to date is just the beginning of our efforts to re-democratize business, and I and the team look forward to Coveo's future with enormous excitement. I will now hand the call over to Jean to discuss our financial results in more detail. Jean?
Thank you, Louis, and good evening, everyone. As this is our first earnings call as a public company, I'd like to spend a moment to go over our differentiated business model. Our SaaS subscription revenue is composed mostly of long-term contracts, typically three years or more in duration, with no termination for convenience, in which revenue can only go up during the 2% of our revenue in the third quarter, down from 4% last quarter. For internal-facing use cases like workplace or contact centers, Coveo is priced per number of users who access our platform. In e-commerce or websites where users are not authenticated, Coveo is priced per number of queries. As I indicated, pricing per contract value is committed for the entire duration, making our business model highly predictable.
As Louis highlighted, we delivered record bookings in the quarter, even excluding Qubit, as we saw strong performance across all four of our lines of business, especially in e-commerce, which more than doubled compared to the third quarter of fiscal year 2021. We also continued to see the acceleration of our year-over-year organic SaaS subscription revenue growth, which increased above the 31% year-over-year growth rate of our SaaS subscription revenue from the second quarter. Our success in retaining and expanding our relationships with customers, one of the primary growth vectors Louis mentioned, is demonstrated through our net expansion rate of 112% as of December 31st, 2021.
Our goal remains to engage with our customers at one of our multiple price entry points and grow these relationships by adding capabilities and expanding usage, ultimately moving to the enterprise level, where they can deploy Coveo across multiple lines of business and benefit from 360 degrees of relevance. Moving to our results. SaaS subscription revenue for the third quarter of fiscal year 2022 was $21.2 million, up 50% year-over-year. Total revenue came in at $23.2 million, growing 39% on a year-over-year basis. Self-managed licenses and maintenance revenue was $0.5 million, and professional services came in at $1.6 million. Note that all of these figures include the contribution from our acquisition of Qubit, which was completed on October 14th, 2021.
Another metric we focus on is current SaaS subscription RPO, which grew 49% year-over-year this quarter to $72.2 million. The growth in our current SaaS subscription RPO further exemplifies our strong bookings performance for the quarter, and we expect its growth rate to generally track our growth in annualized recurring revenue. From a geographic standpoint, we are continuing to make tremendous progress expanding into EMEA, with our second-largest bookings deal in the quarter coming from the EMEA region. The acquisition of Qubit also increased our footprint in EMEA, with over 25% of our bookings this quarter coming from the region.
While only 16% of our revenue this quarter came from outside North America, we do expect international markets to continue to be an important growth vector for us in the future, as we added in 2020 new cloud regions in Ireland and Australia to open these markets for our solutions. We plan to continue to pursue this sizable opportunity in these markets and make further investments to expand and deepen our international presence. Turning to our operating results, our third quarter gross profit percentage came in at 74%, compared to 73% for the same period last year. Our product gross profit margin was 79% in the quarter, compared to 77% for the same period last year. Our professional services gross profit percentage was 2% for the quarter, compared to 30% for the same period last year.
This year-over-year decline was primarily driven by the addition of Qubit, which had a lower professional services gross profit margin. We expect to improve our professional services gross profit percentage as we further complete the integration of Qubit. Operating loss for the quarter was $23.4 million, and non-IFRS adjusted operating loss for the quarter was $8.1 million. We continue to make investments to drive additional booking and revenue growth, as well as product innovation, and expect to do so going forward. Also, as Louis mentioned earlier, at the time of our IPO, we pledged 1% of our equity to support Coveo's ESG activity around democratizing knowledge and education. This resulted in a one-time expense of $10.4 million in G&A in the quarter that was included in our operating loss.
Net income came in at $426.3 million or $7.55 per share, compared to a loss of $101.7 million or $-5.55 per share in the third quarter of fiscal year 2021. The weighted average share count used in calculating the third quarter loss per share was 55.7 million shares versus 18.3 million in Q3 of last year. Looking at our balance sheet, we ended the quarter with $233.7 million in cash, including the $179.9 million in net proceeds from our IPO, the exercise of the over-allotment, and concurrent private placement. Cash flow from operations was $7.9 million in the quarter.
Finishing with guidance for the fourth quarter of fiscal year 2022, we expect SaaS subscription revenue to be between $21.5 million and $22 million, representing growth of 41%-45% year-over-year. Total revenue in the range of $23 million-$24 million, representing growth of 32%-38% year-over-year. Adjusted operating loss in the range of $-9.5 million and $10.5 million. Between 103.4 million and 103.9 million weighted average shares outstanding. For fiscal year 2022, we expect SaaS subscription revenue to be between $76.3 million and $76.8 million, representing growth of 38%-39% year-over-year. Total revenue in the range of $84 million-$85 million, representing growth of 30%-31% year-over-year.
Adjusted operating loss in the range of $-29 million and $30 million. Between 50.8 and 51.3 weighted average shares outstanding. As I have previously mentioned, there are three factors that we believe are helping to drive Coveo's robust growth rate. First, expanding into new use cases or lines of business. After already establishing ourselves in workplace, websites, and customer service, several years ago, we began moving aggressively to commerce, supported by investments in R&D, sales and marketing. Second is geographic expansion into EMEA and AsiaPac, which we've begun to establish through the opening of new data centers in Europe and Australia, bookings growth in EMEA, and the acquisition of Qubit. Third is by bringing on new key strategic partnerships. We've already mentioned our successful alliance with Salesforce. Now we've broadened our number of key partners, bringing on Adobe and SAP, for instance.
By doing so, we invest in reducing friction in these marketplaces by making it easy for customers to use Coveo within those large ecosystems. To conclude, we are very pleased with the results we have shared with you today and believe Coveo represents a compelling opportunity in AI. As a global leader in AI solutions at scale, our technology is built for growth, and we look forward to capturing that sizable opportunity. With that, operator, you may now open the line for questions.
Thank you. Ladies and gentlemen, if you'd like to ask a question, you may do so by pressing star one on your telephone keypad. Please make sure the mute function on your phone is turned off so the signal can be read by our equipment. Star one for questions. We'll pause just a moment to assemble the phone queue. We'll take our first question from Thanos Moschopoulos. Please go ahead.
Hi. Good afternoon. Louis, if we were to summarize the--
Yeah, Thanos.
Hey, Louis. If we were to summarize, I guess, the changes in progress to your business, since the time of the IPO three months ago, I guess my takeaways were, you know, Qubit above expectations, the newer ISV partnerships ramping more rapidly than expected, and, you know, together those driving commerce now being the majority of bookings, as well as the international growth. I mean, anything else you'd call out in terms of how things have evolved over the last three months?
Well, Thanos, thank you for your question. You know, I think that basically summarizes, but I guess net-net, all of our lines of business have been growing. You know, obviously we're very pleased with our growth in commerce and we've been pleased also with our growth in, you know, in EMEA, but pretty much across the board. The performance of Qubit, as we mentioned, was also above our expectations.
Just remind us in terms of the timing to fully integrate Qubit, what the timeframe for that?
Well, I think that's gradual. You know, as you know, Qubit adds another dimension to our offering w hich is more specialized AI-powered personalization for merchandising teams. Very complementary to our solution, creates a much stronger position in retail. In fact, you know, we found, you know, customers of Qubit who right now have a high degree of interest for, you know, what the traditional Coveo platform has to offer and vice versa. It brings new markets and so on. You know, right now we expect to complete a consolidated demo soon of the two solutions. Basically we have about a year ahead of us for full integration of data platforms and the offering.
Okay. In terms of the SI channel, any update there in terms of the progress you're seeing?
Well, you know, we've invested quite a bit, you know, in Q4 as a continuation of our investments in channel enablement and, you know, that takes multiple forms, but essentially everything that democratizes the knowledge about our platform and reduces the friction for learning and education and enablement. So you know, that has enabled us to continue to enable more developers and more professionals within our partner channels and thereby continue to expand.
So we think that, you know, this ability to facilitate access to the Coveo platform and learning and opening up the platform is key to expanding the channels. Outside of that, we've continued... The net of it is, the net-net answer to your question is we've expanded with our channels within our current partners because of that, but we've also added, you know, continued to add a few others.
Okay, great. Maybe last one for me. I haven't seen the MD&A yet, but I gather you're not disclosing organic growth. Just to confirm a number I heard, I think the takeaway was organic SaaS revenue growth north of 31%. Did I hear that correctly?
Yes, that is correct, Thanos. You did understand correctly the metric around our organic growth rate. Yes, it is north of 31%, which was the growth rate that we had experienced last quarter. If I can also maybe a quick comment, Thanos, on your question with regards to our partner ecosystem. You know, pleased to report as well that, you know, professional services as a percentage of revenue has remained around constant, around 7%. As you can tell, clearly, I think we're doing, you know, the right things and enabling clearly as we grow, enabling the SIs with our solution.
Okay, great. Congrats on your first quarter as a public company, and I'll pass the line. Thanks, guys.
Thank you very much, Thanos.
Ladies and gentlemen, we ask that you please limit yourself to one question and one follow-up. Thank you. We'll take our next question from Koji Ikeda with Bank of America. Please go ahead.
Oh, hey, Louis and Jean. Thanks for taking my questions. You know, congrats on a very nice first quarter as a public company. Also congrats on, I saw you guys were the gold medalist. Yeah, gold medalist award for the Enterprise Search Data Quadrant. Congratulations there.
Thank you.
Two questions from me. You know. Yeah, yeah. First one, you know, thanks for all the commentary on the bookings. You know, you went in pretty deep there. I just wanted to, you know, kind of clarify here. You operate in four categories, you know, commerce, service, websites, and workplace. You know, I guess what category right now is the largest mix of bookings right now? And where are you seeing the most robust demand out of those four categories?
Right. Look, there's no question. Again, we're seeing growth across all four, which is good news. You know, if you break it down, you know, as you know, we market within, you know, with integrations with SAP, Salesforce, Adobe. We're seeing growth across the board. There is no question that we're very pleased with our growth in commerce. You know, we believe that there's really secular growth, you know, and especially in commerce, driven by the foundational change that's happening in commerce. We're not tied to the commerce volume fluctuations or, you know, the short-term demand. It's really the foundational aspect of commerce and the imperative of AI in commerce.
That, you know, drives demand forward in that area. We're pretty excited because we think every retailer ultimately needs this kind of technology and that we have the most scalable and mature offering. We're investing there, but this is clearly, in answer to your question, Koji, the one area of focus. We're pleased with our growth in service as well. Perhaps, Jean, you have some numbers to add and so on.
No, I think you're right. We're really pleased. As you know, service really has been our largest line of business to date. Certainly since we launched, you know, e-commerce three years ago, you know, of course, it's off of a smaller base, but we did report, you know, growth in bookings over 200% in commerce. And certainly the reasons for that has been, you know, to Louis' point, right, it is we are seeing from the market, you know, great reception, of course, with, you know, with our technology powered by AI. It is, you know, highly differentiated in the market. Right now it's producing great ROI with our customers.
Got it. Thank you. Just one follow-up. You know, I did see the announcement, and you mentioned the new chief growth and strategy officer. You know, from a high level, as you're heading into planning for fiscal 2023, you know, should we be expecting any changes to the growth strategy or how you're thinking about, you know, adding sales capacity going forward? Thank you for taking my questions.
Right. No, from a growth strategy standpoint, you know, I think again, you know, we're sticking to our strengths right now because, you know, we think the market is right at an inflection point. You know, we don't expect any major change other than probably tuning our go-to-market strategy to continue to reduce some friction and you know, gain more value from the value we create. That's really our focus, Koji.
Got it. Thanks, guys. Thanks for taking my questions. Appreciate it.
Well, thank you for your question, Koji.
Okay. Thank you. We'll take our next question from Paul Treiber with RBC Capital Markets. Please go ahead.
Oh, thanks so much.
Hi, Paul.
Good afternoon. Just want to add my congrats on the IPO. Just a question on Qubit, you know, coming in off stronger than your expectations. What is fundamentally driving that? I mean, does it reflect, you know, the benefit of your ownership out of the gate and maybe some initial synergies there, or is momentum building for them before the acquisition?
We do believe, that's a very good question. We do believe that definitely the idea that Coveo, which was a significantly larger player than Qubit, did play a role in bringing quite a bit of confidence. I think we were very fast at communicating our joint roadmap to customers. You know, obviously, in the world of enterprise software customers, you know, a key decision criteria, as you probably know, is in fact you know the long-term vision for the combined offering. You know, while it's hard to quantify, Paul, clearly we believe that played a role.
You know, we've been pleased, obviously, with the confidence that these customers have. You know, that validates the idea that we had that the combination of Qubit and Coveo is a very unique and differentiated offering in the market. You know, we continue to strongly believe that, and we're very pleased with the conversion rates also and the traction we're getting there.
Helpful. My second question is on just your introduction of new entry-level plans and self-service. You know, was that a material driver to bookings in the quarter? Is it still early there? You know, how do you think about your pipeline on these new plans, these entry-level plans?
Right. It's still early to discuss the conversion and, you know, the impact of free trials is still small relative to the overall enterprise business. But I can definitely share that, first of all, it has brought notable customers in the quarter. We had a win with one of the largest companies in the world, which went from free to a five-figure deal during the quarter. We're pretty happy to see these kinds of stories.
But, you know, in addition to that, you know, what that does is it puts our technology in the hands of more people, more developers, more partners. Fundamentally, that's the goal here. Again, it's all about continuing to reduce the friction and then, you know, while at the same time capturing a great share of the value that we create. Direct answer to your question, it's still early to discuss the conversion, but super happy with the progress there and what that's already bringing to us.
Great. I'll pass the line. Thanks so much.
Thank you. Thank you, Paul.
Oh, pardon me. We'll take our next question from Taylor McGinnis with UBS. Please go ahead.
Yeah. Hi. Thanks for taking my question, and congrats on the first quarter since going public. It may be a two-parter in diving into the key variables of growth. First on dollar-based net expansion rate, I think that downticked maybe just slightly from 113% last quarter. Can you talk about some of the drivers of that and, you know, expectations for this metric as we look ahead? Then the second part to that, you talked about an acceleration in subscription revs, and you had a pretty uptick in international. Can you maybe, you know, provide a little bit more color on how much of that strength came from Qubit versus new logo activity?
Yeah. Taylor, thank you for the question. To start with regards to the dollar-based net expansion rate, you know, last year, dollar-based was 107%, so, you know, pleased with the progress at 112% this quarter. You're right that sequentially we did go from 113% last quarter to actually it was 112.4%. So it's a very, very small change, you know, quarter-over-quarter. So we basically believe that it has stabilized. You know, so certainly from our perspective, very, very pleased with the gross retention rate. We've seen, you know, great renewal rates during the quarter, actually a little bit better than we had seen the previous quarter.
You know, with regards to expansion within the customer base, you know. Still certainly pleased with what we've seen, you know, from year-over-year. Certainly right now, attracting a lot of traction coming from new customers. So certainly, which, you know, can explain the stabilization of that metric. I think looking forward, I think you should expect us to stay in that range, you know, in that 112%-113% range. I think that's just the right way to think about that metric right now. Maybe, Louis, I'll turn it over to you with regards to the acceleration of the growth rate, unless Taylor, there's you'd like me to emphasize a little bit more.
Nope. That, that's perfect. Yeah, just secondly,
Okay.
When thinking about the acceleration in subscription revs and uptick in international, curious what that mix looked like between Qubit and new logos.
Absolutely.
Right. Look, I think as it relates to the acceleration of the growth rate and so on, you know, I'll just say right out of the gate, we're very pleased with our performance and our conversion rate in sales and our competitive position within target market across solutions. That being said, we think there are tailwinds. You know, we believe the demand for AI and digital experiences is strong and right at an inflection point where, you know, companies are realizing the AI imperative. So that drives, you know, some demand.
Obviously, we don't wanna spend all of our marketing dollars educating the world, but we'll definitely be there positioned with the best solution in the industry, in our view, to pick up the demand. For now, we've guided to mid- to- high 20%s organic plus the effect of M&A, and we've made it clear the impact of both, but with some upside if we execute on opportunities.
Perfect. Thanks so much.
Yeah. Our pleasure. Taylor, certainly the way to think about our growth rate. Certainly it's great to see the acceleration, right? We're really pleased with the acceleration in our growth rate. You know, as you know, two quarters ago, 28%, last quarter, 31%, this quarter confirming that we had been seeing, you know, further acceleration and, you know, north of that 31%. Very pleased with that momentum into 2021 and getting into 2022. Thank you.
We'll take our next question from DJ Hynes with Canaccord. Please go ahead.
Hey, guys. Congrats on a nice start here. Louis, I wanna ask you-
Thank you.
Kind of two related questions on the e-commerce side. First is in your experience, at what scale does a customer typically need to be before they, you know, really start to get leverage out of Coveo and the type of personalization that you can deliver? And then the second part of that is from a product perspective, to do this well, does it make sense to also own the CMS? Like, how do you get around that, o r is that an area that would make sense for expansion?
Yeah. I'll start with the second question. We don't need to own the CMS more than we need to own the CRM or the portal technology or any of that, Coveo is really designed to be the intelligence behind. So there are multiple applications that deliver digital experiences, and they continue to do their role. We're not intrusive to that. We're the intelligence behind that makes the decision about, you know, what to essentially show on the screen, how to dynamically adjust the navigation, and how to create a prescriptive experience, you know, that is highly personalized with recommendations and so on.
We'll fit into any CMS, although, you know, the leading CMS that we see are companies like Adobe, which we work with quite a bit, as you know, and Sitecore and others. On your first question, you know, our target market clearly right now is, you know, high-end mid-enterprise and global enterprises. Your question is very good because, you know, this is right now the market where AI is not a choice. Some companies are starting to realize that. Many companies already understand that. Essentially, if I paint an image for you, DJ, you know, if you have 1 million SKUs and 1 million consumers a day, and we do have such customers, you cannot manually program rules to personalize recommendations and personalize a digital experience.
As a result of the inability to do that, your conversion rates and your sales and your revenue will suffer or your customer service will suffer if you're dealing with 100,000 customers a day and, you know, 100,000 documents, let's say, and 100,000 customers a day. There is obviously, you know, to your question, a scale where not only, you know, the value of Coveo grows exponentially, and we're frankly pretty much, in our view, the only player that can play there, but, you know, the value is large and it's kind of binary. It becomes kind of an imperative.
Depending on the market, depending on the verticals, you know, if you think about a software company, you would think that a software company with, you know, $100 million of revenue or up would actually benefit from Coveo. Obviously, we would not sell this to, you know, a $100 million a year distributor. We'd probably go to $1 billion and something. By verticals, we have sort of thresholds for our go-to-market where these criteria are met. Pardon me for the long answer, but yeah, thought that.
No, it's-
The question was very solid. Yep.
Yeah. That's super helpful. John, I'm gonna follow up with you and press you a little bit on the organic growth comments. Look, I think part of the reason investors wanna own this is for that accelerating subscription growth story. I can appreciate the comments that, yes, it's playing out, but they're gonna wanna quantify and track that. Is there any way that you can share with us how much Qubit contributed to subscription revenue in the period?
Oh, I think you're on mute.
Yeah. Thank you, Louis. The way we're thinking about Qubit certainly, as you know, is that, you know, Qubit will not stand on its own with a separate P&L, as you know, right? Qubit, at the end of the day, is adjacent to our commerce offering, and, you know, it will be Coveo and Qubit together moving forward, right? While we do want to be as transparent as possible, I think providing comments that, you know, organic growth, you know, was higher than the previous quarter, higher than the 31% that we experienced, you know, you did notice of course that, you know, we did experience, you know, 50% growth.
Between, I think, those two, I'm sure you can have a really good appreciation that our organic growth rate is accelerating right now and has been for the last you know three, four quarters. It will be complemented with you know adjacent technologies such as Qubit. But at the end of the day, it is our goal in the very short you know within the next quarters, to bring those two products together, and therefore it will be challenging for us you know to provide exactly you know what it will be one versus the other.
Yeah. Okay. All right. Thanks.
Yeah. Thank you, DJ.
Yeah. Again, if I can bring a bit of a complement on that very briefly. It goes back to what I mentioned earlier. Customers look at the total solution. You know, so they want search, they want recommendations, they want personalization, and ultimately we believe that they'll want that, you know, between, you know, commerce and customer service and web experiences and etc, you know, across all channels. That's what the Coveo value proposition is. You know, we're very much on that path.
We'll take our next question from Ittai Kidron with Oppenheimer. Please go ahead.
Thanks. Hey, guys, and again, also congrats on a good quarter. I will echo DJ's comments. It would be nice to get Qubit's revenue number, but I'll leave it at that. Had a couple of questions, first on the partnerships with Salesforce, Adobe and SAP. Can you give us a little bit more color as to in what way are they similar in the way you operate with them versus different from each other? It'll be interesting to learn more about that.
Well, they operate in you know, different spaces, you know, although there can be some overlaps. As an example, you know, SAP is in commerce. You know, we work with SAP in commerce. We work with Salesforce predominantly in customer service, but also in commerce. We work with Adobe predominantly in web content management with Adobe Experience Manager, which most large corporations you know, or a majority certainly of large global corporations use. You know, but also Adobe is in commerce. Typically, you know, what happens is that Ittai, customers will you know, a lot of our customers will have one of each actually.
You will start your experience on a website that is powered by Adobe, most likely if it's a large corporation. You might move to a transactional part of the website, which then is powered by SAP Hybris or the newer version, SAP Commerce. Once the customer buys something, they'll end up, you know, on a Salesforce-powered customer service page. You know, if you hit the contact center, you'll talk to an agent that runs the, you know, that is working within the Service Cloud, which is Salesforce. You know, for us, each of those use cases is a spokes to a wheel. That creates some expansion opportunities obviously down the road. We're successful within these lines of businesses with each of them, with a particular focus with Adobe on websites, Salesforce in commerce and service, and SAP in commerce.
That's great. Maybe as a follow-up, I wanna follow up on Koji's question earlier in the conversation about the different products. You talked about commerce and its performance in the quarter. Can you be a little bit more granular perhaps on the performance of website service and workplace, I'm sorry, how much they grew individually on a year-over-year basis in the quarter?
Yeah, thank you for the question. As you know, service, the service line of business is our largest line of business. And certainly we've reported how commerce really, which, you know, we started three years ago, you know, off of a smaller base, but grew over 200%, right, year-over-year. That's the one that certainly is growing the fastest of the four. We don't report exact, you know, by line of business. However, we confirm that you know, all four lines of business are growing by double digit, right? When we look, you know, year-over-year, their ARR.
However, given that it is one platform that, you know, that our customers are buying and leveraging, so at the end of the day, we, you know, we don't want to kinda separate those and provide the exact numbers, but I can certainly confirm that, you know, very pleased with the progress of all four of them over the last quarter and certainly in 2021 overall.
Very good. Thanks, guys.
Thank you.
Thank you.
We'll take our next question from Richard Tse with National Bank Financial. Please go ahead.
Yeah, thanks.
Hi, Richard.
Good quarter. Hey, guys. I was wondering if you could maybe talk a little bit about the mix between direct and sort of partner influence deals that come through.
The way to think about it at a high level is we get about 30% of our revenue that is referred by systems integrators. You know, and sort of surfaced and referred by systems integrators. And the balance from our own marketing and then obviously inbound. That's kind of the way to think about it.
That's all across all verticals or all business lines?
I don't have the breakdown by vertical, but pretty much, you know, we expect it. It varies, you know, from one vertical to another from quarter to quarter because sometimes these can be larger transactions. Overall that's pretty much what we expect. Now in turn, maybe as a complement, Richard, we work with partners. We'll take an Accenture or a Perficient or a Wipro or a Smith Commerce or so on. We will also turn to them and bring them some service business, you know, to deploy the customers afterwards, which kinda creates more momentum working with them.
Okay, thanks. Then my second question is, sort of reading your MD&A right now, and you have a section on COVID-19. Do you think that's really sort of tamped down or restrained your ability to kind of get any higher growth rate? Is it reasonable to assume that as we kind of get through this, that, you know, you'll just get an acceleration in bookings by that sort of clearance alone?
Well, I don't think I could at least create a direct correlation. I'd be cautious with making any kind of statement, positive or negative, as it relates to the effect of the end of COVID on acceleration of growth. I'd look at it a different way. I think COVID has been a catalyst for digital in general. You know, more people moved online. More people moved to e-commerce. You know, the expectation, I think, in general, of the online consumer has become much more sophisticated. That fundamentally is the driver for our business, Richard. You know, now you can make the delineations of that.
In the workplace area, there are more people who work from home, so suddenly you have more people who need to do more on their own. Technology and the ability to figure out the exact information that people need becomes more critical. I don't think I need to lecture on commerce. You know, it's pretty obvious that people are all buying online more than ever and experiencing some vendors, some companies, retailers that are better than others. As we always said, you know, and the difference between digital is that you're only a browser window away from taking your business elsewhere.
There's a sense of urgency that has been accelerated by COVID that frankly we saw that, you know, we knew was going to unfold a couple of years back. Nobody planned for COVID, and we certainly didn't. COVID for us, if anything, has been an accelerator for that kind of digital transformation. The adoption of AI is more and more understood as an imperative.
Okay, that's great. Thanks.
Thank you, Richard.
We'll take our last question from Paul Steep with Scotiabank. Excuse me, Scotia Capital. Please go ahead.
Great. Thanks. Louis, I think I know the answer, but will ask it anyway. Just with obviously a significant pullback in valuations, any change in thought around maybe the willingness to be more aggressive around M&A? Obviously, Qubit seems like it's heading to plan so far, but I figured we'd start there and then one quick follow-up.
We're not changing anything, you know, Paul. I mean, you know, the variability, you know, especially, you know, without having announced anything or etc, you know, the variability of our stock price is something that we just looked at and has frankly no connection with reality, precisely because we had not announced anything since the IPO. No change here. You know, we're just pursuing. I don't think there's an inch of our business plan here that has changed as a result of the fluctuation of the stock price and the current downturn in the tech sector. You know, look, this is not our first public company.
tide raises all boats and lowers all boats, and that's kinda how we see it for now. You know, from an M&A perspective, we're definitely very active at looking out there, what's available. You know, we think that maybe the expectations will you know, from the sell side might be tempered a little bit. Frankly, we haven't verified that yet, so we'll see.
Fair enough.
Paul, as a reminder. Paul, maybe as a reminder, right? As we previously communicated, right? Do not expect that kind of these two instances, right? This is how we're thinking about M&A from our perspective right now. Certainly the--
Absolutely.
Yeah. Thank you, Paul. You had another question, Paul? Sorry.
Yeah, understood. It'll be very fast. Just Qubit. Louis, just in terms of, and I missed it, you might have given it to Thanos, but I didn't quite catch it. How should we think about it's one go-to-market solution on that front? I'll leave it there. Congrats on the first quarter.
Right. Thank you very much. It's gonna be one platform. Think about 12 months, you know, to complete that.
Perfect.
Basically merge the data platforms at the data level. We expect, you know, right now, we're working on a consolidated demo, which, you know, we'll be able to deliver, you know, within weeks. We expect the full integration of data platforms and so on, you know, one single platform within a year.
Perfect. Thank you.
Yeah.
Ladies and gentlemen, this concludes today's question- and- answer session. For closing remarks, I'd like to turn the conference back to Louis Têtu. Please go ahead.
Well, thank you all for your time today and joining us. This was our first earnings call as a public company. You know, we believe Coveo is poised for growth and ongoing success, and that the opportunity in front of us is quite substantial, is massive. With that, operator, you can please end the call. Thank you all.
Thank you. Ladies and gentlemen, this does conclude today's conference. We appreciate your participation. You may now disconnect.