Ladies and gentlemen, thank you for standing by, and welcome to the NTAP Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. I would now like to hand the conference over to your speaker for today, Mr. Barry Hudson.
You may begin.
Hello, everyone. Welcome to Intev's 4th quarter fiscal year 2021 earnings conference call. On the call with me today are John Hall, CEO of Intask and Steve Robertson, the company's Chief Financial Officer. During the course of this conference call, we may make forward looking statements regarding trends, strategies and the anticipated performance of our business. These forward looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings and other publicly available documents, including those related to the impacts of COVID-nineteen on our business, the financial services industry and global economic conditions.
Entap disclaims any obligation to update or revise any forward looking statements. Further, on today's call, we will also discuss Certain non GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation of comparable GAAP metrics Can be found in today's earnings release, which is available on our website and as an exhibit to the Form With that, I'll hand the call over to John.
Thanks, Barry. Good afternoon. Thank you all for joining us for Intev's first earnings call as a public company. I'm here with our CFO, Steve Robertson. And today, we'll spend some time providing you a few recent Intech highlights, Sharing our strong Q4 2021 results, reviewing our full fiscal year and providing insight into how we're thinking about the year ahead.
Intap was founded in 2000 with a focus on helping law firms manage and integrate their data. In the years since, we've expanded, building from that foundation to deliver a modern industry cloud For professional and financial services firms, leveraging this market position, we ended fiscal year 2021 on a high note With a great Q4 demonstrating continued growth and strong execution across our businesses. Our high growth cloud business is the key driver of our overall annual recurring revenue and also of our total revenue growth. As digital transformation in the markets we serve leads to increased cloud adoption. Steve will provide specific details and comments around our results and guidance during his remarks, but I'd like to share with you a few highlights.
Throughout the last year, we have seen professional and financial services firms accelerate their adoption of new technologies and pivot to the cloud. You can see the market's ongoing cloud adoption and our cloud first strategy at work reflected in our results As we ended our 1st fiscal year June 30, with cloud ARR of $110,000,000 An increase of 48% from the prior year. Cloud ARR is now 52% Of our total ARR, up from 43% of the total a year ago And our total ARR of $212,000,000 increased 23% year over year. We're pleased with the results of our Q1 as a public company. In Q4, our SaaS and support revenue increased 26 percent year over year to $39,400,000 driven by continued adoption of our cloud solutions, While total revenue increased 29% year over year to $61,300,000 We also completed our IPO during the Q4, and I'd like to take this opportunity to thank the employees, Clients, partners, advisors, Board members and most of all the investors who helped us reach this significant milestone.
We had the pleasure of speaking with many of you during that process, but for those of you whom we haven't yet met, I'll take a few moments here on our first earnings call to share an overview of Intap, the solutions we provide and the markets we serve. As I mentioned, Intech was founded 20 years ago as a developer of solutions designed to help law firms better manage their data. Since then, we've expanded our vision and our scope and we now deliver a full cloud platform To the broader industry of professional and financial services firms. Today, we're executing a strategy to enable breakthrough performance For the $3,000,000,000,000 ecosystem of private capital, investment banking, legal, Accounting and consulting firms that make up the professional and financial services industry. These firms are the central facilitators of the world's economy.
And as a group, they make up a large and durable market With a serviceable addressable market of $10,000,000,000 and a total addressable market of over $24,000,000,000 Intech is very well positioned for continued growth and profitability. As you are aware, nearly every industry has made or is making the transition to the cloud. The professional and financial services industry is no different. For the past decade, we have seen the shifts steadily taking place in these markets as more firms look to eliminate the technical debt of legacy and on premises solutions, flex to accommodate dispersed remote workforces and keep pace By better accessing and applying data to business decisions, all of this was happening even before the impacts of COVID. As a result, our cloud business is expanding rapidly.
Going forward, We are targeting all new sales in the cloud and expect our on premises annual subscription license business to decline slowly as a portion of those licenses are migrated to the cloud upon renewal. It's worth noting that unlike companies that sell physical products, Professional and financial services firms sell knowledge and expertise. Digital transformation in these industries Has taken a special emphasis on institutionalizing and harnessing the firm's knowledge across a large population of working professionals. Because their business is so specialized, these firms tend to experience greater challenges, successfully adopting and applying technology As investment professionals yourselves, you may very well have firsthand experience with this issue. The core of the market is served today by homegrown internally developed solutions that are expensive to build and maintain, lack modern features and are often difficult to scale.
Many firms also still rely on legacy solutions built on aging architecture With limited capabilities, usability and functionality, legacy solutions have traditionally not been able to keep up with the needs of the business and the clients. We grew the Intech business competing with this part of the market And we still replace these systems consistently, particularly as more firms embrace the transition to the cloud. Finally, we found that the firms who make up this specialized industry struggle to make use of the traditional horizontal software systems, Traditional CRM and ERP systems were built to support traditional product companies, not for the complex needs of professional and financial services firms who rely on their people, their expertise and their relationships to drive their business. As a result, these horizontal systems require complex Intap is the antidote to homegrown, legacy and horizontal solutions. We're building the modern cloud platform Based on a deep understanding of what these clients need, you're probably familiar with the vertical industry cloud model And its success in the life sciences and insurance industries.
Intechp is using this cloud strategy To enable the digital transformation of the market of professional and financial services firms. Our technology solutions are more advanced and purpose built than other offerings. We'll continue to innovate and invest in the Intap platform to sustain and grow our market advantage. There's an enormous market opportunity ahead for Intap. For those of you who are or have been lawyers, accountants, bankers or investors yourselves, our company and our solutions are built for you.
We currently go to market with our industry cloud under 2 different solution brands. Each brand is a configuration of the same underlying platform and technology. DealCloud It's for the Financial Services Sector and manages firm's client, deal and investor relationships, prospective clients and investments, Current deals and compliance activities. For investment banks and advisory firms, this translates into enhanced coverage models, Greater win rates and higher success fees. For investors, it helps increase origination volume, Support investment selection and drive greater returns.
One Place is for professional services firms It helps manage firm knowledge and go to market strategies, business development, risk and compliance and engagement delivery. This better enables legal, accounting and consulting firms to win and grow their clients To effectively manage risk and compliance obligations and to execute work more efficiently and profitably. Acquisitions have always been a part of our strategy to expand our technology capabilities. We have completed 7 successful acquisitions to date, Most recently, the acquisition of RepStor in Q4, which provides us access to RepStor's Microsoft Teams And Office 365 Enterprise Content Management and Collaboration Tools, which are designed specifically For professional and financial services firms, we're confident in the growth potential of our current portfolio And in addition, are always open to new opportunities to augment our platform and accelerate our strategic plan to best serve our clients. Today, we serve more than 1900 Premier Firms in 40 Countries.
That number is a noticeable increase from prior periods as it now includes roughly 200 clients related to our Q4 acquisition of rep store. We're proud of the clients we serve, which include 96 of the AmLaw Top 100 U. S. Law Firms, 7 of the top 8 global accounting firms and over 1,000 of the world's largest private capital and investment banking firms. Our enterprise go to market approach primarily focuses on the largest firms With a land and expand strategy at its core.
The approach starts with our large and deeply entrenched client base, Many of whom have been with us for a long time. There's tremendous room to expand within our base with more solutions, more seats and deeper account penetration. For smaller firms, we tend to go to market with the full platform. As we move up market to the larger enterprise class We take a more modular approach. Instead of ripping out their existing technology investments all at once, we'll focus on a key area of improvement Given the mission critical nature of our solutions, our churn is very low.
Over time, we typically add users and solutions, expanding into other portions of our clients' business. Our trailing 12 months net revenue retention rate was within the expected range of 108% to 112%. We're also rapidly growing our client base. Every quarter, we add new clients from midsize firms, Large firms and global enterprises across all of the markets that we serve. As partners and professionals move from firm to firm, They often recommend our platform to their new employers, further expanding brand recognition and client loyalty.
This circulation of professionals helps to create powerful network effects across the industry for the Intap platform. We truly believe that no one else has inTEST combination of deep domain expertise And next generation technology purpose built to address the challenges that professional and financial services firms face. We have a more comprehensive cloud based platform with the scale, horsepower and applied AI to compete strongly against homegrown and legacy solutions. And we're now recognized as the industry leader With the brand and client trust to compete successfully with horizontal solutions as a purpose built industry cloud for professional and financial services. Take for instance our long history and partnership with Baker McKenzie, 1 of the largest and highest grossing law firms in the world.
More than a decade ago, they implemented their first Intap product as a single point solution. In the years since, they have continuously embraced the platform for Midtap and we have become a key partner in their innovation program. Today, Baker McKenzie is a full platform client using integrated Intech Solutions for conflicts management, Time recording, confidentiality management, workflow automation and data integration. They've improved the efficiency of the client onboarding process by 60%, cut their client response time in half and their data is now centralized across the entire client lifecycle. Perhaps most significantly, They now have a 360 degree view of their client relationships and they're using that intelligence to drive their growth strategy and to best serve their clients.
They exemplify the way our comprehensive suite of solutions flexes to support our clients as their needs evolve. And they're a tremendous example of the power of centralizing and harnessing data to inform strategic decisions and to drive growth. Hamilton Lane is a great example of the impact and scalability of Intapped Solutions. They're an alternative investment management firm providing private market services to investors around the world, And they're a fast grower across sectors and geographies. When they selected Intech to improve deal flow processes 5 years ago, It was because they needed a tool that could improve the deal flow process and help them manage their CRM.
They also wanted to ensure the solution that they chose Could evolve to support their business as they grew. Our single deal cloud solution replaced 28 disparate systems and databases and in the 1st year alone helped the firm to eliminate more than 55,000 emails, most of those centered around process management. In the years since, DealCloud has proven flexible and customizable to grow alongside Hamilton Lane as their business has expanded, and we're proud of and grateful for their partnership. Serving clients like these is what our team passionately pursues every day. Turning to the most recent quarter, I'm pleased to share with you just a few of our most recent client successes and an overview of our performance.
We are seeing a steady ramp of new clients and we're committed to moving quickly from introduction to providing value In a way that helps clients achieve their objectives faster. In Q4, we landed more than 50 net new logos organically. Balfour Pacific, a Canadian private equity real estate firm, Selected our DealCloud solution to streamline their pipeline and relationship management, centralize deal information and better leverage their data. We work with more than 1,000 focused firms of this size and provide them a complete platform to drive their operations. From signing to go live, working closely with their team, we implemented the software in less than 4 months, speeding their time to value.
Equally significantly, we continue to expand relationships with some of the most respected names in our industries. For example, Freshfields, a prestigious international law firm headquartered in the UK and an Intech client for several years, Provides a great example of how our client relationships grow over time. They are a great example of the 100 or so top tier global firms where we have the opportunity to drive a large enterprise relationship and can solve challenges across the organization. Having significantly grown staff through a recent acquisition, In Q4, Freshfields increased the scope of its Intapped contract to include additional seats and to cover all staff. They also selected our AI assisted risk and compliance solution to streamline conflicts review and to accelerate the process of accepting and onboarding new client engagements.
Finally, they are moving existing Intech Solutions to the cloud, which will enable them to reduce the cost of ownership while staying on top of the latest innovations through automated updates. Thompson Coburn is another example of the platform expansion and cloud migration happening within our current client base. Thompson Coburn is an example of 1 of the 100 of midsized firms that we target with our full solution To generate meaningful revenue and valuable relationships for the firm. A full service U. S.-based legal firm And a client since 2016, Thompson Coburn is growing rapidly and needed to better leverage data across the firm To achieve its strategic goals and best serve its clients.
In Q4, they opted to move to the cloud and to leverage the full One Place for legal platform. This enables them to replace their bespoke solutions and connect their internal and external data sources to drive efficiency and better client outcomes. The above examples show the power of our land and expand execution. As of June 30, We had over 1900 clients, 420 of those clients generate more than $100,000 of which 31 have ARR of more than $1,000,000 To summarize, Intech delivered strong 4th quarter results to finish a year that began with the uncertainty of COVID and ended with the validation that cloud adoption and revenue growth continue to thrive, even accelerate in these most challenging of circumstances. We're very excited about the opportunities ahead.
We're leading a significant vertical market shift By helping professional and financial services firms to reinvent and optimize the way that they operate, we have an enormous global opportunity With a serviceable addressable market of $10,000,000,000 and a TAM of $24,000,000,000 And we have a stable, recurring, existing client base and tremendous growth potential in each of our sub verticals. Thank you for your time today. We look forward to getting to know many of you better in the upcoming quarters and years and updating you on Intev's progress and success. With that, I'll turn the call over to our CFO, Steve Robertson, to walk through our financial results and guidance. Steve, over to you.
Thanks, John, and thanks, everyone, for joining us today. Before I go through the numbers, I'd like to quickly review the fundamentals of our financial model. Our recurring software business is represented by our total ARR, which is the annualized recurring value of all of our new and renewal software contracts. There are 2 components of our total ARR, cloud and on premises. Cloud is the majority of our ARR today And will be an increasingly bigger percentage of our total ARR going forward as nearly all of our new sales are cloud sales.
We believe our cloud ARR and total ARR metrics are good indicators of the growth of our annual recurring business over time, and we plan to report them each quarter. In terms of revenue recognition, cloud ARR is recognized as SaaS revenue ratably Following a new sale or renewal, on premises ARR is recognized in 2 parts: 50% as subscription license revenue Recognized upfront at the time of the sale or renewal and 50% as support revenue, recognized ratably and included in our SaaS and support revenue line. Because it is recognized ratably, SaaS and support revenue will generally be more predictable quarter to quarter. In contrast, subscription license revenue, which is primarily related to our legacy on premises business, Can vary significantly quarter to quarter because it is recognized as revenue episodically when the subscription licenses are initially delivered or renewed. We expect to migrate our on premises business to the cloud over time and migrate the related subscription license revenue to SaaS and support revenue, which will tend to reduce this quarterly variability over time.
Our professional services revenue relates primarily to implementations of new SaaS subscriptions, Migrations of clients from on premises to the cloud and a variety of other services generally build on a time and materials basis and recognize this bill. Lastly, I would note that we began trading on the NASDAQ on June 30, But the IPO closed technically on July 2nd, and so our Q4 year end financials do not reflect the issuance of new shares, The conversion of preferred shares to common, the net proceeds received or the pay down of our debt, those will be reflected in our Q1 fiscal 2022 financials Ending September 30. Okay. Moving now to our 4th quarter results. Total revenue was $61,300,000 Up $13,700,000 or 29 percent year over year, driven primarily by sales of our cloud solutions and to a lesser degree by increases in subscription license and professional services revenue.
SaaS and support revenue was 39,400,000 Up $8,200,000 or 26 percent year over year, reflecting continued strength in the sale and adoption of our cloud solutions. Subscription license revenue was $14,400,000 primarily reflecting renewals of on premises subscription license business for both 1 year and multi year periods. As noted earlier, this revenue line item can be variable on a quarterly basis. Professional services revenue was $7,400,000 reflecting implementations of software and migrations to the cloud for our clients, including a one time project for select cloud clients that will extend into the Q1 of fiscal 2022. Turning to our full year results for fiscal 2021.
Cloud ARR grew 48% year over year to 109,700,000. At June 30, 2021, cloud ARR represented 52% of our total ARR, up from 43% a year ago, reflecting our cloud first business focus and the market's ongoing shift to the cloud. Total ARR will be 23% year over year $212,300,000 Total revenue increased 15% year over year to 214,600,000 SaaS and support revenue increased 26% year over year to $144,100,000 reflecting continued strength in the sale and adoption of our cloud solutions. Subscription license revenue was $46,000,000 primarily reflecting renewals of our subscription license business. This was a modest decrease year over year, in line with our strategy to migrate legacy clients to the cloud when they are ready.
Professional services revenue was $24,600,000 Our overall services activity was impacted by the effects of COVID, both at the end of fiscal year 2020 and during the beginning of fiscal year 2021. Lastly, in terms of revenue mix, For fiscal year 2021, 30% of our revenue was international, up slightly from 28% in fiscal year 2020 and the remaining 70% of our revenue was in the United States. Before discussing gross margins, Expenses and profitability, I want to note that I will be discussing non GAAP results going forward. As a reminder, our GAAP financial results, Along with the reconciliation between GAAP and non GAAP results can be found in our earnings press release and its supplemental financial tables. For the Q4, gross margin was 70.1%, up from 67.9% in the prior year period, primarily as a function of a quarterly increase in our variable higher margin subscription license revenue.
Overall, operating expense was $42,400,000 a $16,400,000 increase year over year as we invested in the business to support our growth and prepared to become a publicly traded company. In addition, we paid normalized bonuses and commissions in the Q4 of fiscal 2021 As compared to considerably reduced levels of such compensation in the Q4 of fiscal 2020 when we were managing the uncertainty of the COVID pandemic. Sales and marketing expense was $18,700,000 a $6,900,000 increase year over year, reflecting increased headcount and commissions as part of our investment to pursue our large addressable market. R and D expense was $12,700,000 A $3,500,000 increase year over year as we continue to invest in our Connected Firm Cloud Solutions. And G and A expense was $11,000,000 a $6,000,000 increase year over year, primarily as a result of expenses related to preparing For our IPO, non GAAP operating profit was $600,000 As compared to our Q4 fiscal 2020 operating profit of $6,400,000 primarily reflecting the increase in operating expenses just discussed.
Non GAAP net loss per share was $0.19 in the Q4 of fiscal 2021 as compared to $0.03 in the prior period. As a reminder, this Q4 fiscal 2021 earnings per share calculation uses a basic share count that is prior to the closing of our IPO on July 2. For the full year fiscal 2021, gross margin was 69.0 percent, Up from 66.5 percent in the prior year, primarily driven by an increase in SaaS and support revenue and a relatively modest increase in related costs. Overall, operating expense was $140,100,000 an $18,100,000 increase year over year as we invested in headcount and other resources in support of the growth of the business. Sales and marketing expense was $59,100,000 $5,200,000 increase year over year as we increased our go to market resources to drive sales.
R and D expense was 40 $6,800,000 a $5,900,000 increase year over year as we continue to invest in the product roadmap for our Connected Firm Cloud Solutions. And G and A expense was $34,200,000 a $7,100,000 increase year over year, driven primarily by expenses associated with becoming a publicly traded Non GAAP operating profit was $8,000,000 a $5,700,000 increase year over year As operating expenses were relatively low in the first half of fiscal twenty twenty one following our COVID related restructuring in late fiscal twenty twenty, In the second half of fiscal twenty twenty one, the pace of our investments in hiring returned to normalized levels in support of the growth of Intev's business. Non GAAP net loss per share was $0.56 in fiscal 2021 as compared to $1.11 in fiscal 2020. In terms of cash flow, our CapEx remained essentially flat at $5,000,000 as compared to $5,100,000 in the prior year, consisting primarily of capitalized software expense and leasehold improvements at certain facilities. Our unlevered free cash flow was $9,400,000 for fiscal 2021 as compared to $15,600,000 for fiscal 2020 As we remain committed to positive free cash flow while investing for the growth of Intev's business.
Turning to the balance sheet. We ended the 4th quarter with $37,600,000 in cash and cash equivalents. This cash balance does not reflect the net proceeds and debt payoffs associated with the IPO, which closed on July 2nd. Turning now to our guidance. For the Q1 of fiscal 2022, we expect total revenue in the range of $56,500,000 to $57,500,000 and SaaS and support revenue of between $40,500,000 $41,500,000 We expect a non GAAP operating loss in the range of $1,000,000 to $2,000,000 and a non GAAP net loss per share in the range of $0.06 to 0 point 0 $8 Using a basic share count of approximately 60,000,000 common shares outstanding post IPO.
For the full year fiscal 2022, we expect total revenue in the range of $241,000,000 to 245,000,000 And SaaS and support revenue of between $172,000,000 $176,000,000 We also expect a non GAAP operating loss In the range of $13,500,000 to $17,500,000 and a non GAAP net loss per share in the range of $0.29 to $0.33 Using a basic share count weighted for fiscal year 2022 of approximately 61,000,000 shares. With that, Sean and I look forward to taking your questions.
Thank you. Please standby while we compile the Q and A roster. Our first question comes from the line of Jackson Ader with JPMorgan. Your line is open.
Great. Thanks for taking my questions guys and welcome to the public markets. First question is on the customer additions. If we think about organically adding about 300 Customers or so in fiscal 2021, how should investors be thinking about that number going forward? And how will new like net new logos rank in terms of the main drivers of growth as we move forward?
John, you want me to take that one?
Sure.
Yes. I think, Jackson, first of all, About 200 of the customers that get it to 1900 come from the rep store acquisition. So I wanted to make sure you note that. And our new logo count will increase pretty strongly year over year. I think that on balance, We're seeing new sales and new AR fairly balanced between new logos and net retention or upsell.
It varies a little bit quarter to quarter depending on the dynamics, but it's pretty balanced. So we expect good strong revenue growth from new logos over time, but equally from the upsell opportunities we have.
Okay. All right, great. And then just a follow-up on the Housekeeping item on rep store. What was the contribution from that acquisition To ARR or cloud ARR in the quarter and then what are the expectations for contribution to the top line and profitability for next
Yes, it's we're not really going to talk in detail about that. It was primarily a purchase that reflected the technology opportunity. We can integrate the Microsoft Teams business they have with our platform. We're excited about that. And we closed the deal on June 1, so it was only a month.
The contribution is kind of going to be in the low single digit millions really of ARR and revenue. And there's some good upside opportunity long term after we do the product integrations and take the opportunity to sell forward the combined ideas we have there.
All right. Got you. Okay. Thank you.
Thank you. Our next question comes from the line of Koji Ikeda Bank of America, your line is open.
Hey, John. Hey, Steve. Congrats on the Q1 as a public company and thank you for taking my questions.
My first got
a couple for you. First question, you noticed or I noticed you said 4 20, 100 ks plus customers and 31, 1,000,000 plus ARR customers. I guess what's really driving that nice expansion there on those customers, Specifically on those 1,000,000 plus customers, that's a really nice sequential jump from the 27 from last quarter.
Yes, I
would like
to say. Thanks, Koji.
Yes, go, John. Yes.
There's some good numbers here, Steve. Go right ahead.
Well, I was just going to say, it's a combination really across the board. We do get to $1,000,000 through upsell, which is Huge opportunity for us with larger clients. We also land 7 figure clients out of the gate occasionally, and we're getting clients in both professional and So it feels balanced. But John, I didn't want to cut you off here.
No, that's absolutely right. And the other point that we would make is that the platform strategy is absolutely working. So these firms are expanding the footprint, taking up more of the applied AI technology, More of the solutions in the platform in each of the areas and we're really excited to see that.
Got it. Got it. And I guess taking a step back, John and Steve, a question for either of you. You guys are very well known within the markets that you serve. But curious To hear, now that you're public, has there been any change in the awareness or maybe the amount of inbounds that you're getting now that you're a public company versus when you're a private?
Just curious to hear how becoming public has changed the awareness of Intacct within your core vertical markets. Thank you for taking my questions.
It definitely is helping and that was one of the reasons that we were excited about the opportunity after many years as a bootstrapped private company serving these markets To go public, many of the clients that we call on are various forms of advisors and participants in The financial markets as well. And so the IPO was actually a great marketing opportunity for us in addition to a financing Now obviously, we went public on June 30, which was the very last day of the quarter The last few years, so we're not showing a lot of that here. But I think that the opportunity for us is great as a public company for multiple
Got it. Thanks, John. Thanks for taking my questions. Appreciate it. Congrats on the Q1 as a public company.
Thanks, Kitch.
Thanks.
Thank you. Our next question comes from the line of Kevin McVeigh with Credit Suisse. Your line is open.
Great. Thanks so much and great job. Hey, you talked about 48% cloud ARR growth. Can you help us understand maybe how much of that was new logos versus additional modules from existing clients?
Yes. Generally speaking, the majority of that is new logos, but we have a fair amount of good upsell In the cloud business as well. So it's slightly weighted to new logo in terms of the cloud AR.
Great. And then as you think about kind of R and D versus sales and marketing and G and A within the context of 'twenty two guide, Should we think about it similar percentages as 21 or maybe anything to call out around those because obviously you're seeing real nice leverage in the model as the revenue scales?
Well, we're hiring to try to stay ahead of our growth curve And be consistent, we see a lot of opportunity. I don't see a huge move in our margins per se. I think we've been investing nicely. As we came out of COVID, we've got We've been investing pretty nicely to stay ahead of our growth opportunities and make sure we field people who are trained and ready to go in sales and so on. So that will continue that pattern going forward.
Great. Thank you so much.
Thank you. Our next question comes from the line of Terry Tillman with Truer Securities. Your line is open.
Yes. Good afternoon, John and Steve, and congrats from me as well on the IPO and now dealing with this every quarter and our questions. My first question just relates to, as we've gone through the pandemic, we're hearing in some of these kind of Platform strategic kind of workflow markets where there is the conversation around vendor consolidation and that may not be The most innovative approach to selling, but how is that playbook working in terms of a vendor consolidation play Around Alotta Point Solutions, maybe as part of the discussion around moving to cloud, just kind of curious how vibrant is Vendor consolidation in terms of driving maybe expansion sales or even maybe a new logo win.
Yes. Thanks, Terry. It's an important factor. It's not the only factor. People are doing other digital transformation maneuvers obviously, but Vendor consolidation is important to many of these firms as they grow.
A lot of the firms that we serve have a growth strategy that includes M and A of their own. And so there's a big opportunity as the industries that we call on bring in more components to their infrastructure that they want to consolidate with a company that has the scale and the platform and the history of serving them. And most of Firms we have some kind of relationship today and they're increasingly looking at our platform as a core part of their overall technology strategy that they can consolidate around because we're expanding more and more of what we do. So it's an important Aspect in addition to the overall digital transformation that they're trying to achieve.
Okay, got it. Thanks, John. And I guess, Steve, maybe a follow-up question. Maybe you could help us, as we look into fiscal 2022, is there anything that's kind of one off Anomaly, but large in nature related to the subscription on premise business that's a large renewal in any of the quarters or maybe Just a book of business that's larger on the renewal side that we need to appreciate and that could have some volatility on that line item in the model? Thank you.
Well, I think what I'd say is, it is variable. We have had Renewal activity already that has its own indirect effect for 2022, for example. If we do a 3 year renewal This year or we did it last year in COVID, which we did, then the next renewal is in for 3 years. And so on a relative basis as compared to 3 1 year renewals, You can get a different outcome for fiscal 2022. So there's nothing in particular on the books.
We're trying To do what we can to have these renewals be 1 year, but certainly in some cases our clients are interested in a 3 year renewal and We work to accommodate them. So short answer is nothing in particular looming out there. And as we said, we're trying To migrate our clients slowly but surely to the cloud and keep moving down that road.
All right. Thank you. Nice job. Thanks.
Thank you. Our next question comes from the line of Bryant Petersen with Raymond James. Your line is open.
Thanks for taking the question and I'll echo my congrats on the really strong results. So first one for me, just there was a lot of talk on homegrown solutions and I'm curious Maybe spending a year in the pandemic here, what have you seen in terms of customer using those solutions? And And what are some of the key friction points that you guys can eliminate to really drive more cloud adoption?
Thanks, Brian. The homegrown solutions have always Indicated to me the core argument for our purpose built platform. These firms Had lots of horizontal solutions available to them over the past 20 years and yet they still invested to build internally and why is that? And The only rational answer is, well, the horizontal systems are just too expensive and too complex when you try to convert them into something that So I've always felt that the homegrown market is a great point of evidence of the market opportunity for us in our industry cloud strategy overall. What we saw during the pandemic as people had to work from home right away is that a lot of the home grown solutions are traditionally on premises stuff with A lot of very bespoke features in them that people couldn't convert into a work from home model very quickly.
And I think a lot of the companies bringing the cloud vertical industry systems out have benefited from this, but there's been a real Awakening among the last remaining of the market that was not really urgently looking at cloud to look at cloud now Because they saw how much more agility they had to respond to that situation and to keep everybody humming With a true cloud system, plus ours is designed just for them. So we've had a lot of interest in replacing Across several different points of the firm in client relationships, deal management, A lot of compliance interest actually, which we think is a core pillar of the platform's differentiation from traditional horizontal solutions. And then on top of that, we have a lot of AI applied AI horsepower in the platform that's very difficult For any firm to have the scale to invest in and create to take advantage of the data that they have globally. So there's both Kind of enabling folks to work from home more successfully, being more agile. And then there's some additional capabilities that the homegrown solutions just weren't Able to get to that we're able to bring to the market today.
So those are some of the areas.
And maybe just Follow-up to that, as we think about the value proposition, and John, that was a great overview and it's interesting to see like how that adoption could play out. But I'm curious, How long do you think that evolution will take? I don't think anybody really anticipated COVID kind of changing some of these dynamics. But as we sit here today, It seems like that would accelerate it, but is this a 3 to 5 year transition? I'm just curious how long you think this will take to play out?
Thanks, guys.
Yes. I mean, we've been
working with this market for a long time. I think one of the key points of differentiation that we have Is our 20 years of history building specifically for this industry and developing trust and understanding of how the market works, the industry works and each firm works, So that when they look at both their homegrown and their legacy on premises solutions and they're responding to this variety of forces to move to the cloud, They see us as the trusted technology company that understands how to get them specifically to the cloud. So we've Emphasize that in our strategy, we're working with each firm as they have made the decision increasingly to move to the cloud. What I will say is There was already a switch going on where people saw all the benefits of cloud and we're trying to figure out how to get there. COVID definitely accelerated a trend that was already underway and it's become much less of a strategic choice about whether they're on premises or cloud, which it was maybe 5 or 10 years ago.
And today, it's much more of a practical choice, just what's their roadmap to get there And how do we build a plan with each of them? And that's what we're doing with each of our firms. And we saw some examples this quarter that I talked about that had actually made the choice to move As part of upgrading to a bigger version of our platform. So I actually think that the shift is underway. COVID has accelerated it.
I don't want to quote specific years because I'm not sure, but I think that the trends are all moving in the right direction and we're going to benefit from that.
Good to hear. Thanks, John.
Thank you. Our next question comes from the line of Brian Schwartz with Oppenheimer, your line is open.
Yes. Hi. Thanks for taking my questions today. I got a question for John and then a follow-up For Steve, John, as it relates to the fiscal 4Q bookings and maybe the pipeline momentum, Can you maybe unpack it across your core professional and financial services subverticals, the legal, accounting, consulting services, if There's anything to highlight there? And then I have a follow-up for Steve.
So we saw good activity across all of our markets in Q4. I think Steve you've shared that we've been pretty balanced both in new logo acquisition as well as client expansion and also Pretty well balanced between the financial services markets and the professional services markets.
Yes. And that we've tended we've tended not to break that out, but legal is certainly the biggest of the professional services. It's fair to say that, but we don't tend to break those out. But yes, pretty balanced.
Thank you. And then, the follow-up question for Steve, it's just thinking about your philosophy for guidance since it's the Q1. Listening to the commentary from John and the Q and A in his Introductory comment. It sure sounds like the sentiment is improving out there. People are feeling really good in your end markets about cloud computing and digitizing adoption.
And, but if I look at kind of the initial guidance, it does suggest that, at least from my eyes, that maybe that sentiment might not sustain. So I just wanted to ask you a question about your forecast. Are you assuming that, that kind of improvement, buying improvement in the sentiment Continues? Or are you thinking about, hey, we've had a couple of good quarters, let's let them sign up the deals, get them in contract, And then we'll think about raising numbers for all of us after it happens. So just wondering how you think about that when you think about setting up your guidance.
Thanks.
Well, I would say that, look, we are seeing good strong momentum and it's Continuing and we believe it will continue. Cloud is growing very nicely. Our total ARR is growing nicely. And over time, we certainly think that our revenue growth will align Reasonably well with those ARR growth rates. So no, I feel like we've got a good long term opportunity here And we're firing a lot of cylinders and we're going to keep rolling here.
So, this is our first moment out of the box. So we're making sure we do the right things, but we feel pretty good about it going forward here.
Congratulations on a great quarter. Thanks for taking my questions today.
Thanks. Thank you. Our next question comes from the line of Tom Roderick with Stifel. Your line is open.
Hey, gentlemen. Thank you for taking my questions and congratulations on all the recent successes. I think this is probably going to build on Brian's last question there, but I think it's an important point just looking at your end markets. I mean, they're generally speaking all on fire. And that's a great thing on one The fundamentals are there, the finances are there, and maybe the awakening, John, that you talked about is happening in real time.
We've seen in some of these other end markets that are on fire that it's hard to get the proper attention to make some of these transformational shifts. Would love to hear just about some of the strategic conversations you're having with perhaps some of your larger customers, some of the 7 figure deals that came through. What's that final catalyst that gets them over the hump to make that upgrade, A, to the cloud, B, perhaps from Some legacy home built solutions, they know they've needed to for a long time and maybe COVID was a part of that, but we'd love to hear what you're hearing from your senior level discussions as to What that catalyst is that's getting them to make that move and how sustainable that is?
Yes, it's a great insight and we're Definitely serving firms that are serving the deal economy and as you all know better than anyone, how well that's going right now. Firms are looking for ways to capitalize on the success that they're having. A lot of the conversations that we're having Have to do with firm's interest in laying the foundation for the next years And using this great time to put themselves in a strong information position and modernize a lot of aspects of the firm, It's harder to do when times are tight. Your point is well taken about the attention span, but what we've actually found is there's a lot of appetite At the moment for people to put systems in that are really going to help get the most possible potential out of the people platform that they've of the collective knowledge of the firm globally and they know that, that can make a difference in winning the deals in the marketplace. So There's actually a fair bit of encouraging conversation going on with the strategic leaders And the IT leaders of these firms that now is the time to make the shift.
And I think the COVID switch too has caused people to say, Maybe our strategy is a little bit less about real estate and creating the environment in the big cities and more about enabling us technologically wherever we happen to be. And so there's definitely a conversation about shifting budgets a little bit from the traditional real estate, which was always one of the biggest Expense items in these professional firms a little bit more towards IT, which only accrues to our benefit. So I think there's positive signs.
Excellent. I'm certain everybody on this call would beg for more efficiency, automation and intelligence. So it's the right place at the right time. Steve, I guess the proper follow-up for you on that question is just in terms of looking at the demand out there, How aggressive are you being or do you want to be with bulking up the sales force? How far ahead of the curve do you think you need To add new heads or do you feel like a fairly linear approach to sales headcount addition is the proper approach relative to The demand you've been seeing, in other words, do you need to accelerate the investment in sales and marketing, or is it properly aligned right now?
Well, I think it is pretty well aligned. I mean, we're not going to be extremely aggressive, but we certainly are hiring ahead of the curve Because we want to be ready for all the opportunities and ready to drive the opportunities we see. And it does take time to ramp people up and get them trained and get them out there The client base in the most productive way. So yes, we're continuing to forward invest to make sure we're ahead of that, but we're mindful that We want to make sure everyone who hits the field is ready to go and ready to sell.
Excellent. Congratulations. I'll jump back in queue.
Thank you. Our final question comes from the line of Arbuth Rohmany with Piper. Your line is open.
Hi. Thanks for taking my question. I wanted to go back to one of the questions you addressed earlier about sort of being This sort of post IPO world, you provided some color on some of the customer conversations. Can you talk a little bit more about the Yes. Essentially, the existing kind of mood of the workforce, yes, are people kind of looking at this exit and I'm kind of thinking I'm cashing out and going to kind of just basically kind of retire, take a step back or are people kind of charged up?
And then the 2nd part, in terms of kind of recruiting talent, what kind of progress have you seen on the recruitment
Thanks, Arvind. Great. So I think one of the things that we benefit from That's a little unusual even for companies in Silicon Valley is that we've been doing this building the company together as a team for a long time. We built it as a bootstrap financing strategy. We never raised a dime with venture capital and we did it by working closely with these firms to figure out what they needed and to build a purpose built Industry cloud platform today that is unlike anything else in the marketplace.
And there's a lot of team commitment So building the great company that's going to transform this industry today. And I think that spirit runs through the whole organization. We've assembled a group of Professionals who come from 7 different acquisitions over the years, we've integrated them slowly and carefully and built a single Culture that is really driving towards being the winner in this marketplace. And I think there's an infectiousness to that and a vision for that. Certainly, the IPO is successful.
I'm very glad that we're able to say thank you to everybody who's helped build the company as we should. But I also feel like we have an incredible, Unusual, bootstrap culture here that's going to drive this business forward. So I'm optimistic about that. And we've actually seen that to your second question. A lot of the folks who have been with the company for a long time, who are have joined the company recently pre IPO and who are joining the company now Just after the organization has gone public are all saying that the IPO has an incredible, presents an incredible opportunity for us To build a great company here and use the public standing of the business to the benefit of the clients and the organization, And we're actually recruiting some incredible talent.
I also would say, there's a lot of broader discussion in the market about People thinking about their lives and what they want to do and all those sorts of things, and we're benefiting from that. A lot of folks are looking at the company And applying, we're getting some unbelievable resumes coming to us saying, this is an incredible story, I want to be part of it. So I'm encouraged about what the IPO has done for the talent base and the enthusiasm of the organization.
Terrific. So just a quick follow-up out there. You talked about kind of some of the work you're doing with AI and Data science and some of the newer technologies. And I think it's really no secret that hiring AI talent is Expensive, difficult and a lot of them are locked up with some of the larger software companies. But with that said, now that you have a higher profile and it's kind of A bigger or better brand name, are you and of course, kind of even kind of the stock and all of that.
So are you able to afford and are you able to recruit A lot more of this AI, data science talent that can really kind of sharpen the, kind of the offering Around AI and automation.
I'm very proud of the AI team that we've assembled. We have some incredible talent That has been working with the company for quite a while now and that team has recruited more AI talent into the organization Over the years and I think we've got a particularly differentiated angle on it, which is that we're looking Specifically at applied AI, how do we bring the real value of potential AI into the specific needs purpose built for this So there's this very interesting combination of broad AI talent and industry specific knowledge That are developing these applied AI solutions that are really making a difference in our platform and for our clients generally. And for this set of industries, The professional and financial services firms that are made up of these large groups of highly educated Knowledge professionals who sell their expertise and their advice on deals and other engagements. We've always felt that this is an incredible market for AI to be applied Because it's so knowledge and information and data rich in the first place, and yet they've been underserved by the technology industry. So this is one of the Simple reasons why AI is such a central component of our overall strategy, it's differentiating The time is now, but it's also for this market, it can have an incredible return for all the firms that put it in.
And so a lot of the folks who are looking at us and looking at the If you really love AI and you really see the potential for it, this is an incredible place to apply your skills to some of the most high value Applications that you can imagine out there. So I really look at AI as a centerpiece of our story going forward.
Terrific. And just last question for me. Certainly, kind of the demand environment has progressively improved through the year. But with some of these kind of COVID related concerns of the delta variant and all of that, has that Has there been a distraction with the existing clients or with your pipeline? Or is that people are just kind of moving on and forward and Demand seems still pretty good as you look ahead.
Well, I think we went through a pretty Significant work transformation the way the whole world did last February March 2020. And it's true that we were looking at more time in the office later this Summer and autumn and everybody was. And we knew it was going to be a more flexible environment. We were never going to go all the way back to the model that we had had previously and there actually was a lot of benefit and productivity that people discovered from this work from home market, particularly in both the markets we serve And in our own operation. So I think the fact that tragically Delta has arrived and is Shaking up plans for everybody.
In theory, could have slowed things down. But I think in practice, what has happened is we've just continued to execute in the work from home model. There is an opportunity in our teams for folks to work from offices if they need to, and we have some folks who are doing that, but we haven't required it. And we'll see how it plays out just like everybody else does. But I think from a productivity and an execution standpoint, we benefit because both our end market And we work perfectly fine in both total work from home and hybrid.
And so I actually think that This is one of the silver linings of a tragic couple of years is that we found a working model that really works well and we're doing well in it.
Terrific. That's very helpful. Thank you very much.
Thank you.
Thank you.
I'm showing no further questions in the queue. I would now like to turn the call back over to John for closing remarks.
Okay, everybody. We really appreciate your attention and support for us. We have a great Q4 behind us, and we're excited about Year ahead, if there's anything that we can do to talk to folks as follow-up, we're happy to do that. Thanks for your time today, and we look forward to talking to you next quarter.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.