Welcome to Como's First Quarter FY '21 Earnings Call. At this time, all participant lines are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. And with that I will hand the call over to, Peter Dowry, Dooms Vice President of Investor Relations.

Good afternoon and welcome. On the call today, we have Josh James, our Founder and CEO, Bruce Felt, our CFO and Julie Keno, our Chief Communications Officer. Julie will lead off with our safe harbor statement and then onto the call. Julie?

Our press release was issued after the market closed and is posted in the Investor Relations section of our website, where this call is also being webcast. Statements made on this call include forward-looking statements related to our business under federal securities laws, including statements about financial projections, the plans and expectations for our go-to-market strategy, our expectations for our sales and new business initiatives, the impact of COVID-19 on our business and our financial condition. These statements are subject to a variety of risks, uncertainties and assumptions. For a discussion of these risks and uncertainties, please refer to documents we file with the SEC, in particular, today's press release, our most recently filed annual report on Form 10-K and our most recently filed quarterly report on Form 10-Q. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. In addition, during today's call we will discuss Onondaga financial measures which we believe are useful as supplemental measures of Como's performance. Other than revenue, unless otherwise stated, we will be discussing our results of operations on a Onondaga basis. These Onondaga measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. Please refer to the tables in our earnings press release for a reconciliation of our Onondaga financial measures to their most directly comparable GAAP measure. With that, let me hand it over to Josh. Josh?

Thank you, Julie. Hello, everyone and thanks for joining us for the call. Before I begin discussing the quarter, I want to express that the safety of our employees, their families, and our customers has been a top priority as we operate through this health crisis. Our people have been working from home in a fully distributed fashion since mid-March. I'm incredibly proud of how quickly they've adapted, especially the great care they've shown our customers and the rapid delivery of solutions for the new challenges our customers are facing. Many of the challenges of the moment have highlighted the unique strengths of our platform. I'm very pleased with our Q1 results, particularly given the backdrop. In Q1, we posted a 23% increase in subscription revenue, and 19% year-over-year increase in total revenue, and much better than expected billings and cash flow. And mostly I'm excited about the guidance and the position it puts us in for the feature.

Thank you, Josh. We had a strong Q1, continuing the momentum that we experienced in Q3 and Q4 of last year. I’ll now review the details behind our performance followed by providing second quarter and fiscal 2021 full year of guidance. Our Q1 billings of $46.5 million a year-over-year increase of over 13% was driven by our ability to quickly adjust our go-to-market efforts, toward companies and the healthiest sectors of the economy and belatedly, we were able to, in a matter of a few days, adapt our product to respond the governments in need of data, to manage the crisis. Specifically to our government response, we were able to close $4.5 million of recurring new business selling our COVID-19 Crisis Command Center during the quarter. At the same time, we generally benefited by having a low percentage of our business from very small companies, as sales force already conditioned to primarily selling via the phone, and an installed base that has a considerable amount of white space for us to further expand into. In addition, our renewal rates were above 85% in a seasonally slow quarter. And given the economic environment, we're pleased with this outcome. We have 57% of our customers under multi-user contracts at the end of Q1. Our remaining performance obligations, or RPO, grew 17% compared to the same quarter last year. Q1 revenue was $48.6 million a year-over-year increase of 19%. Subscription revenue represented 87% of total revenue, reflecting our focus on specifically growing recurring revenue. International revenue in the quarter represented 24% of total revenue compared to 25% in Q4. Our subscription gross margin was 79% up more than 2 percentage points from 77% in Q1 of last year, rapidly approaching the important 80% milestone. We were able to make that progress against a…

Thank you. Our first question comes from Sanity Singh with Morgan Stanley. Your line is now open.

Hi, this is actually Chris on for Sanity. Thank you for the question and congratulations on a really good, solid quarter and really appreciate the detailed assumptions you've been disclosing behind the guidance. Can you maybe talk about kind of the progression of business and demand trends throughout the quarter, especially as we zoom in maybe on from early April to quarter end? And then what you've seen since -- in May and through early June? That be really helpful. Thanks.

That's a good question, Chris. I'll answer this briefly, Bruce, and then let you give a lot of details. I think, from last quarter, at the beginning things were looking good. And we gave the guidance that we gave, and we felt pretty good about things. And then as it became apparent that COVID was going to have a meaningful impact on the world and accordingly on our business, we kind of went into panic mode for a minute, certainly. And it was all hands on deck, if our travel customers and finance customers and other customers are suffering business, what are they buying. And it became pretty apparent quickly that with our platform and the ability to pull data from all kinds of sources and be able to give people access to data in real-time when these moments, certainly when days are mattering. It presented itself an opportunity to us and it started with that track that we’ve created. And then it really went into these different states. And we were talking to a lot of different states at different times, and we were helping. With our state, I brought in probably about 10 million different pieces of PPE that I facilitated and help the state procure. And we were just right in the middle of these conversations and because of that, it became apparent that they needed data and they need an answer. They needed to know what was going on. They were making decisions blindly, they didn't know if they should open states, closed states when they get back to work, ET crater. And they were really struggling that they weren't built to do that. And so we were able to say, yes, we can help you out. And thankfully there were some contracts that we were…

Yes. And to build on that, in March when we were at our Utah conference at our customer conference, and we said, we haven't seen anything yet, but we're prepared to cut costs as soon as we do. And then as you know, we decided to cut the cost anyway, and that was just for the abundance of caution. Then we went into April and March finished out fine. We went into April and we had some of the fastest sales cycles we've ever had with these Crisis Command Centers. So April was strong. And now we're into May. Well, we finished May, and I can tell you that May was off to a good start. So we are pleased with our performance at the beginning of Q2, and we like everybody else is still worried about what may happen in the economy, how it may impact our customers, how it might impact us, but we're happy to be here today just saying that the pacing is good and they closed out well. So I think that puts us in as good a position as you can be just given the economic environment.

Yes. And then I would add that what this -- I talked about a little bit in the prepared remarks, but what this command center allowed us to do is to be right in the middle of the conversation, a very important conversation now that's not just some state governments, but it's every single company in the world is trying to figure out how to get back to work. And it leads to a whole set of questions that they've never had to answer before, that they've never been prepared to answer before. And so, because we're in the middle of with the COVID tracker and with all the success we've had with our state command centers, we're getting asked, how can we get back to work? How can we do contact tracing? How can we understand that our facilities are being cleaned? How can we be transparent to our employees and give them confidence that they can come in? What kind of tools and systems do our facilities managers need? And then how do we expose all of this to our executives in real-time? So if someone gets sick, that they can easily see what kind of information we have, we need it now in real-time. And then as we start opening back up and you need to go visit a customer, we've got customers that they're out in their cars and trucks visiting their customers, they're flying to see their customers. And you find all of a sudden that that was a hot spot that you went to, or before you go you want to check if it's a hot spot. Well, we have that data and our customers, 700 of our customers are using that data. So it's get back to work is a real initiative that we are extremely prepared for relative to any other company that we've seen, because of this platform that we have and the adaptability to create solutions and applications to answer questions. That's all based on data that's coming from hundreds or thousands of sources. That's what we do. So we're really excited about our ability to actually provide great value to our customers right now. And we think it should benefit our business.

Got it. That's really helpful. Could I tag on follow up questions. So I think you mentioned early in the script $4.5 million of recurring business from the Crisis Command Center. At the same time, you have less headcount now. But you've slightly raised the full year revenue guidance. Is this more a function of stronger than anticipated contribution from deals like the Crisis Command Center? Or are you kind of embedding assumptions around improved sales force productivity? Thanks.

Well, I would say that one is without the Crisis Command Centers, the core business still is within guidance. So we're happy with that. The renewal rates, the renewal string that really had none of this in there also performed better than last year. The May result, the renewal rates are even coming in stronger. And then in the new business comment of how we're off to a good start of May does not include any of these new products. So I would say that we're happy that we'll call before we had the opportunity of these new products, we still had a business that was strong and appropriate and valuable to the market. And in this environment, we also have the benefit of not a lot of exposure to the troubled industries, not an incredible amount of business coming from very, very small companies. And as I said on the call also just the benefit of being able to being used to very well-conditioned to selling over the telephone. So I think all these are just contributing factors to helping us finish the quarter strong and getting off to a good start in the new quarter.

Well, I think the other thing that you've talked about before Bruce is that this doesn't include -- guidance doesn't include any of the big deals. So there's big deals out there, too. They may or may not come through. We don't put them in our projections. There's more state deals that we're talking to. They may or may not come through. Like Bruce said in his prepared remarks, not including those in our projections. But then, in terms of how we're feeling, I think that we're as well-positioned as just about any company to do well in this kind of environment. And Bruce talked about that a lot, too, but we're seeing it. Work from home all that's what we do. All that's what we enable. You need data to every employee, oh that's what we enable. So we're having customers call, it's quite a bit and saying, hey we need you guys to do this additional item for us as well. So, we think that we can do really well in this environment.

Got it. Thank you. Congrats again.

Thank you. Our next question comes from Brad Nickel with Credit Guise. Your line is now open.

Hey, it's Mark on the line for Brad Nickel. Congrats on the quarter. I just wanted to ask you again, just about the Command Center. It's great to hear some of the state wins that you have in the quarter. Can you talk about just the opportunity that you see there going forward? And even as we start to exit the pandemic is that something that there's a potential for account expansion? And thanks.

Yes. So I think it's one of these situations where they have a real problem right now. We can fix it right now. And we can fix it fast and provide some tremendous value. The moment that we got in there though, all of our SWAT teams that are in there helping these customers, their number one initiative besides solve the current need is, let's get more data in there. Let's get other additional items in there so that when it comes time for renewal we're in a fantastic position to not only renew it, but potentially then up sell them to some other products and services. And we're already seeing that. I mean, these governors are very, very happy. We would be happy to encourage you to talk to any governors you can get a hold of that are using our product, because their teams are excited. They're genuinely excited. When Bruce's does follow-up calls with some of the investors, you should ask for some of the quotes of the things that our customers are saying. But it's transforming the way that these governments are running, it's not just about the pandemic. So the pandemic comes along and then they're like, oh, okay what about PPP loans? How are we doing on that front? Well, there's a whole new set of data, a whole new set of constituents. And then we're talking to state labs and they're like, okay, here's the state lab data for COVID, but we have 20 other things that we're tracking. Can we get that data out as well? And then the state comes to us and says, is there any way we can just break up this data distributed by County, so each County health department can see what's going on? Oh yes, we have something called Como everywhere. That's what we do. And these states are kind in some cases laughing, thinking about what the County health department leaders are going to say when they get data for their own County. And they've never had it in the first place, the fact that they would get it and it's real-time for tests that are taking place the day before, it's just mind boggling to them. So we think there's some real opportunities here. We've got three fantastic flagship customers, and I think that we're going to have a decent opportunity to build a really cool government business out of this.

Thanks. That's helpful. And just as a follow-up, I wanted to ask if you could provide any comment on Ian's progress since he transitioned to the role of CRO?

Yes, I think, we're really excited about the Ian. We had the advantage of being able to watch him, run Europe and watch him interact with the executive team and challenge different people on the executive team, me included, and have very strong opinions about the way that things should be run. He has brought a tremendous amount of follow through and organization, which is something that we needed more of certainly. And both Ian and John Miller have really partnered together to say, where can we get more efficiency, what's working, what's not working. How can we double down on the places where we're getting the response that we need? How can we hold people accountable? Let's get the right managers there and we're just continuing to optimize. And actually we've continued to see the pipeline grow. The pipeline is doing great, it's just a question of when our customers, when's the environment going to be, that customers are closing at rates that we've seen historically, but if that's the case, we're in a great position. So, we've been very, very, very pleased with Ian. And I hope he doesn't use this against me privately, but yes, he's been doing a great job.

Thanks and congrats again.

Thank you.

Our next question comes from Jennifer Lowe with UBS. Your line is now open.

Great. Thanks and congrats on the quarter guys. Maybe just to start. So it sounds like you're seeing a lot of momentum around these use cases that are very catered to the current environment. I'm just curious, as you look in your pipeline, how meaningful is things like return to work in terms of the deal volumes you're seeing relative to more traditional business? And what are the sales cycles and the new versus existing mix look like for that relative to sort of your historical mix?

Yes, I think, when we give guidance, it's not based on us having a big chunk of our opportunities coming from these new opportunities for these new initiatives. They're based on selling our platform and because we can predict that we've got quarters and quarters to look out of history, to see how these things close and to know what those conversations feel like. And even really look to Ian and the sales organization to tell us what's going to close and so that's what we've handicapped. In addition to that, any big deals or any of these new initiatives would all be gravy. We're really excited about them. The sales cycles, they are faster. People are trying to figure out how to get to work now. And we look at the conversations that we're having on get back to work and we can be talking to world renowned Sics, consulting organizations or Fortune 500 companies. And we see based on the repeat conversations and follow-up conversations that we're having, how well-equipped and organized and how much knowledge frankly, that we have in this space, given that we've done so much in this space already from the COVID tracker to helping these states. We're talking about putting together a whole army of organization and helping a state figure how to respond and how to open and which county should open and when they need more testing, and how to organize PPE and people you're having thousands of people that are donating PPE, and then they're buying PPE from all kinds of different distributors. And then they've got all these constituents that they need to hand that out to you, whether it's care homes or hospitals or front line res ponders. Those are big complicated problems that we have solved amazingly…

Okay. Great. And maybe just one last one for me, I think, probably for Bruce. Looking at sort of the cost cutting, it sounds like the cost cuts were predicated on a sort of a downside scenario. So far that downside scenario hasn't quite played out as it could have. It sounds like you're doing a bit better. So if you think about sort of that split and what that might look like in a few quarters, is there sort of an expectation that the cuts are made and maybe get to profitability a bit faster if the revenues come in better than a downside case? Or could we see start spending again? How should we think about the time horizon there?

Well, we are going to be cautious about adding back a new crop, and until we get more clarity on maybe how the macro environment develops. So in the short run, most of our performance is going to help our cash position. At some point, as we get clarity on how the macro is going to play out and we get responses to these offerings, that may very well suggest to us that we ought to be leaning in a little bit more. And what we likely with in that case is we’d be adding sales capacity first. I don't think ditherer be a cross board spending, but sales capacity might be a smart place to put the investments to be prepared for next year. If we're able to continue and navigate, even the tough macro as well. And we don't want to be caught too flat footed, when we come out of this. But in the short run, a lot of it falls to the bottom-line. In the medium-term, as we look to next year, we'll definitely want to build some capacity, but it won't be a dramatic increase in costs. I think we'll do it cautiously and if we do really feel like there's incredible traction and pipeline building that requires more feet on the street right now, yes, we'll do that. But I don't think it'll be that dramatic to the net cash flow position of the company, at least not this year.

Great. Thank you.

Thank you. Our next question comes from Pat Ravens with JMP Securities. Your line is now open.

Great. Thank you and congratulations Josh and Bruce on the quarter. So Josh, it’s sort of rewinding a little bit, ore the COVID-19 crisis, it felt like the major areas of focus were running some focused sales plays that Chancellor come up with, which is like sales operations, marketing operations, financial operations. And then really improving the partnership motion and in particular, you guys were talking about the Snowflake partnership and the Microsoft partnership. So has COVID-19, work from home, command center completely changed those focuses for the entire sales force? And also can you update us on the status of those partnerships?

Josh is muted. So, Josh?

Sorry. Yes. I would say no, it's been the opposite. The sales plays are performing really well. And our salespeople now are all trained up and they're running these plays. And we're seeing performance out of these plays. We're gravitating to the ones that are the most effective and the partnerships as well. We set another sales training on Snowflake, we've got additional announcements with them. And we're also seeing with our ability to respond to rapidly in the marketplace, we're getting a lot more phone calls from partners. So, partner network isn't massively moving the dial for us yet, but there's a lot of things going on that I think will move the dial and we're certainly becoming more relevant in that world.

Okay, great. Thank you. And then Bruce, can you just drill down a little bit more on the retention rate? In particular, what are you seeing sort of SMB versus enterprise? And what are you doing in terms of concessions for customers? And how does that fit in?

Yes. Retention rates, there hasn't really been significant difference between enterprise and corporate, mostly because corp orates acted a lot like enterprise. I mean, the deal sizes are $50,000 plus, and the company size on the larger side. And we're also -- I mean, as we're into the new quarter, our renewal rates are up to where we want them to be. Q1 used to be seasonally slow, but right now they're tracking at the kind of rates that we're really happy about. And that's, blended corporate and enterprise. And then on your other question, yes, we have had the -- basically the smallest businesses and the most troubled industries have asked for concessions. And we have accommodated short-term requests, I would say to the tune of about a $1.5 million that we've already absorbed in the quarter. But we have preserved if not increase the total contract value in those cases. So we feel like we've done the right thing to really help customers in need, but we have not really diminished the value of that stream to us. So that's the magnitude of what we have had to address so far.

Okay, that's super helpful. Thank you.

You're welcome.

Thank you. Our next question comes from Derrick Wood with Bowen & Company. Your line is now open.

Great, thanks. It's Andrew Sherman on for Derrick. Congrats on the great quarter. You mentioned the strength in grocery and the quick shift that Rev’s made to those strong sectors. Maybe what other sectors are you seeing some strength from? And what is your mix of those in total?

Well, we have extremely diversified industry distribution. And fundamentally, unless it's really a challenged industry, which is a minority of our kind of exposure and even within things like retail groceries are strong, but especially retail might not be. Those that have great e-commerce presence, so I think are still reasonably strong. We're finding all the other industries are basically still quite engage with us. And keep in mind, everybody's working from home. They all need the data to run the business. They're getting very used to doing it electronically. We're mobile, we're fast. We're at scale, we're very self-service. And all that just plays really nicely into this environment. I mean, I don't know who's going to be installing software on servers. I just don't think any of that is going on. So we have a great profile for companies that just have to get their hands on data. And the perfect profile for somebody that needs it right now real-time, it has to bring together multiple data sources really quickly. And frankly, that's just the universal need. And we think businesses in general are looking in that area, at least not really cutting and some of them just by necessity are really leaning into it. I mean, I just heard today of a furniture store in North Carolina, who had shut down for up to now are about to reopen and we're about to do a deal with them. And why? Well, they just have to have the data to really manage the business even more aggressively as they reopen. So that's the kind of response we're getting across all the industries. So they -- not really a significant difference, I think between industries, I think they just all have that general need.

Great. Thanks. Maybe for Josh, you've done a lot of seminars with C level executives over the past few months. Do you think the light bulb there's finally going off and that this environment can be the catalyst for change that they needed to get to realize that they need a real-time solution? Thanks.

Yes, for sure. And I think just digital transformation, it's an initiative that a lot of times some of the Coos they wait from other people that are responsible for it. But this has really forced them to know real-time information about their people, about their whole business. And when you open back up, there's going to be changes and the data is going to change that day and they want to understand what's going on that day. And so it's really opened their eyes in many cases, especially in cases where we're already in a customer and we have big up-sells on the table, it's helping to create a lot more opportunities, big up sell opportunities. So we're excited about that for us as well.

And some of up sell opportunities are replacing just plain old tools. The whole set that you had mentioned, if you said who might be in the market, same market as us. It's becoming quite obvious they cannot rise to the challenge of today. And so some of these are just outright replacements, even though that's not what we're in the mission to do, but that's what our customers are telling us.

Awesome. Thanks.

You're welcome.

Thank you. Our next question comes from Bhavan Sari with William Blair. Your line is now open.

Hey guys, thanks for squeezing me in here at the end. I guess Josh, I want to touch really quickly and by the way congrats. Nice job here. Thank you for all of the support you're doing from what's happened with COVID. Last year, you outlined kind of -- or this year, fiscal 2021 sales playbook focus the efforts on the five specific personas within the organization. Just an update on level of traction you’re having with that new playbook model. And have there been any changes? Because obviously there’s been dramatic change with COVID, the persona model was very compelling as you think about the broad swath of what you offer. So I'm trying to understand like how is that playing out or if you guys fine tune that?

Yes. Why don't we let Ian? Can you turn Ian's line on and let Ian answer that question, operator? Or Bruce can well.

His line is now open.

Go ahead, Ian.

Ian, you might be muted on your own phone.

All right let's just ask Bruce the question. I'll answer the question.

Let’s ask Bruce the question. Sure.

I'll answer that question and then Ian can pile on. But we think it's extremely helpful and important to narrow the focus toward personas that can really move the needle for us. And the benefit of doing that is we can put a lot of resources behind these more narrow plays, and get a lot of intelligence about the space and how these departments work. And it's kind of necessary when you have a platform, like what we do that can be applied anywhere and everywhere.

That’s basically my question. You've tried to figure this out, this motion. That's exactly just the question. Because you’ve tried to figure out this motion multiple times, right? Should we just sell rally? Should we go enterprise? Should we go commercial? Should we define it by saying, hey, if I go to lots of companies, you can pick pieces? Like that's why I'm asking the question, which is like, has that new messaging and the persona emotion resonated? I think you're getting to it. Sorry.

Hi, Bruce. Can you hear?

Yes, we can hear you. Go ahead, Ian.

Sorry about that, I'm not sure what happened with the earlier attempt for me to answer. Yes, absolutely, it's resonated really well for us. We definitely have seen with the sales plays and the work that we're doing with John Chancellor on the way that we distribute the information that we have, the way that we contact customers, the way that we engage, the language that we're using, the plays and the personas have been really great on several fronts. One, for the sense that we are coming in and we are working and we have use case and value propositions that solves business challenges that they aren't able to answer. And the second point is it then works the same way that Josh mentioned, which we do then have this fire element where once people see what we do and how quickly we can do it, we certainly expand our use base with inside the existing customers that we have as well. So the focus helps us to get in. And then the illiberality helps us move out and wider to other use cases as well.

Great, that was helpful. And then one quick one, and maybe Ian it's for you or for Josh, but on pricing. You've pivoted and we've talked about this in past calls about from traditional seat based pricing to like the platform model. And so this idea of providing a much broader suite, let's just get people using it, and they'll drive growth and as you said expansion, just how is that resonating? Is that playing out as we thought? Or is that still a process of pretty early stages?

So the pricing we're very pleased with the way that the sales team are operating and the way that the model was executing for us. So we have seen some great traction with the enterprise accounts and strategic accounts, we're seeing pricing certainly with the value that we're bringing being less of a challenge for us. And I think that probably all plays back to the fact with the sales plays we execute well. We show the value to the business user and we provide return to the organizations. As we demonstrate the return to the organizations there's less pressure on us with regards to the cost or the pricing model that we have.

Got you. Thanks for taking my question guys.

Thank you. This concludes the question-and-answer session. Ladies and gentlemen, today's conference is now over. Thank you for participating. You may now disconnect.