eGain - Earnings Call - Q2 2021
February 10, 2021
Transcript
Speaker 0
Good day, and welcome to the eGain Fiscal twenty twenty one Second Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I'd to turn the conference over to Mr. Jim Byers of MKR Investor Relations. Please go ahead.
Speaker 1
Thank you, operator, and good afternoon, everyone. Welcome to eGain's second quarter fiscal twenty twenty one financial results conference call. On the call today are eGain's Chief Executive Officer, Ashu Roy and Chief Financial Officer, Eric Smith. Before we begin, I'd like to remind everyone that during this conference call, management will make certain forward looking statements, which convey management's expectations, beliefs, plans and objectives regarding future financial and operational performance. Forward looking statements are generally preceded by words such as believe, plan, intend, expect, anticipate or similar expressions.
Forward looking statements are protected by Safe Harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward looking statements are subject to a wide range of risks and uncertainties that could cause actual results to differ in material respects. Information on various factors that could affect eGain's results is detailed in the company's reports filed with the Securities and Exchange Commission. EGain is making these statements as of today, 02/10/2021, and assumes no obligation to publicly update or revise any of the forward looking information in this conference call. In addition to GAAP results, we will discuss certain non GAAP financial measures such as non GAAP operating income.
The tables included with the earnings press release include reconciliation of the historical non GAAP financial measures to the most recently directly comparable GAAP financial measures. Our earnings press release can be found on the news release link on the Investor Relations page of eGain's website at egain.com, and a phone replay of this conference call will be available for one week. Information is in the press release. With that said, I'd now like to turn the call over to eGain's CEO, Ashu Roy.
Speaker 2
Thank you, Jim, and good afternoon, everyone. Sorry for the a little late start there. So we are very pleased with our performance in the second quarter. Our top and bottom line results exceeded our guidance and were ahead of Street consensus. Our SaaS revenue grew 15% year over year and 21% year to date.
On the gross margins, we improved by 500 basis points over the prior year quarter. We were GAAP profitable with net income of $1,600,000 and we were again cash flow positive in the quarter. So good financial results ahead of guidance. As we have noted on our last call, we are continuing to increase our investment in sales and marketing. Halfway through the year, it's good to see that we are seeing positive indicators from that investment.
Let me share some metrics. At the funnel level, firstly, looking at brand awareness, our website traffic is a good metric for it. So that website traffic at the end of Q2 and through January is up more than 90% year over year, thanks to significant marketing investment increases we have particularly focused on scalable digital channels. Next, we're tracking our marketing generated lead and that in Q2 was up 60% year over year. Then our sales pipeline at the end of Q2, our sales pipeline in dollar terms is more than twice as large as it was a year ago.
Our total number of opportunities is also up, in fact, a little more than twice. So the average deal size in the pipe is a little lower than it was before because we're getting more new logos in the opportunity bucket, which brings me to our number one focus for the year from a sales perspective in addition to scaling our team and executing the change programs. Number one focus this year for us is adding new SaaS logos in the enterprise market. And we are seeing that trend continue to be at a pace, which is about twice the number of new logos. So in q two and q one put together, we acquired 20 new SaaS logos in fiscal twenty one compared to seven in the same time period last year.
So we have more than doubled our pace and we hope to increase this SaaS logo acquisition pace even further in the second half of the fiscal year. I'll give you some examples of SaaS logos. These are good logos. The first one is a large North American utility out of the East Coast. And another one is a top 20 health care provider in The US where we are helping them with their telehealth solution with our digital first chat capability around video and messaging.
Then another one we're very excited about is an auto major, a global auto major, where we have gotten in with a small footprint, a couple of $100,000 ARR, but there's a big opportunity for us to expand in terms of digital engagement and messaging hub. Another one is a large multinational insurance business out of Europe where we have the opportunity to now go across their different geographies with our solution. In terms of expansion, we saw healthy new bookings in the quarter with new clients, new clients meaning existing customers, new expansion here. Some notable expansions, large US telco, one of the top top ones, where we have expanded across the entire enterprise with our analytics solution on the contact center. Another one is a is a diversified bank where we are now rolling out across all their their business units in the contact centers.
And finally, a fast growing European financial services business where we started with an innovation in thirty days engagement a year ago, and now they are standardizing on our platform for both self-service and agent engagement. On the renewal front during the quarter, we also saw a nice bunch of renewals in the quarter. Our net retention rate in the quarter continued to be north of 100% and we did not see any significant unusual churn. Moving to our investments on the direct sales front, As you know, we have been ramping our sales team, specifically increasing the quota capacity for our high touch selling. So we have executed the first phase of that expansion, completed the hiring for the first cohort of reps.
And our focus now, which is where we are, is on onboarding and getting this cohort productive. Once ramped, this team will increase our quota capacity by about 50%. All the new sales reps that we have hired this fiscal year, they are focused on new logo acquisition. And customer expansion opportunities are being handled by our tenured reps in partnership with the customer success team. We plan to hire the next cohort of reps in q four this fiscal year, so April through June.
On the partner front, again, we started investing in this at the beginning of the fiscal year. As you know, on the existing partner front, we continue to have a productive partnership with Cisco. We closed several new logos with them in the last six months. And our Avaya partnership is now generating new logos as well, both with some CCaaS wins as well as some enterprise wins. On a parallel front in terms of adding more to our partnership ecosystem, Mike Taylor, who joined us at the beginning of this fiscal year to lead our business development effort, he and his team are focusing on the on building out new partnerships with system integrators.
So in q two, we signed up and brought in two new SI partners, BT Global Services and Infogame. They are a mid sized SI, in fact, top 50 on the worldwide list. So both of them have now joined our partner program and we have completed formally training over 50 consultants across these two partners. This program now will continue to drive forward. This will help us scale our implementation capability globally as well as increase our market reach, which, as you know, is a is a strategic objective for us in this year.
Moving to existing customers, I want to share a couple of stories with you to highlight the value we are delivering to clients and the resulting expansion. At the same time, and equally exciting, is the rate at which we are able to roll out innovation on our platform and how it's something that our existing clients can consume very quickly. On the before I get into the stories, I just wanted to remark on one thing. We we are seeing the the what I call the four step cycle of customer acquisition, quick value delivery, client expansion, and then advocacy and marketing, these four legs starting to work nicely in unison. Now that's encouraging for us.
For instance, on the advocacy front, our customer feedback ratings on the Gartner G2 site, which most people are aware of, it's publicly available to all Gartner clients. That rating has trended up nicely in the last couple of quarters, Thanks to improved customer satisfaction. Of course, we continue to work on that to improve it even further. Coming back to the stories that I wanna share, a couple of them. The first one is is with an existing client.
Again, this is around expansion where it was a Salesforce takeaway around knowledge management. And eighteen months ago, when we first got this mandate for knowledge management, started out being a couple of $100,000 ARR, and now they are up to a million dollars plus. So it's good to see the speed with which we are able to systematically drive some of these expansion opportunities, which again speaks to the fact that as we drive more new logo acquisition, we can see how that builds our top line over the period. Another one I wanna share is a large retailer in The US who is, again, an existing customer. They deployed our Smart IVR solution, and I'll talk to you in a bit around that, during this holiday season.
It essentially allows the customers who are calling from smartphone to check on their order and to switch to SMS chat if they want to instead of waiting for the next available voice agent. We were able to activate the solution in seven days. That plugs right into the existing contact center infrastructure. And during the holiday season, they saw a 30% shift of that voice traffic waiting for the voice agent moved back to SMS queues. And these agents on the digital side can handle five chats at the same time.
So a huge improvement in both customer experience as well as efficiency. Interestingly, and just a little bit about the Smart IVR solution, we announced that in q two. And the speed with which we got an enterprise client, an existing one, to use the solution in production was remarkable, less than forty days. And we continue to see good amount of market interest around Smart IVR. Businesses are looking to continue to shift their voice traffic to digital channels without throwing away all their existing voice technology.
To wrap up this this story, after the holidays, the same client, they reconfigured the Smart IVR to deal with the returns questions and not deal with where is my order questions. And they did that entirely on their own. There's no eGain involvement in that. Not talk about easy with eGain. This sort of trend of rolling out new capabilities on our platform showcases the power where our clients and partners can create these new solutions by composing them using our modular capabilities in digital messaging, in knowledge, in AI, and in analytics.
So to us, that's a big differentiator that we see, the market gravitating toward quick value. That's, in fact, one of the three big trends that Gartner highlights in their predictions for 2021 in the customer engagement space. It's good to see that we are delivering it today. So in conclusion, you know, we continue to invest in our sales and marketing, and that trend will continue, will increase as a percentage of our revenue, will increase our level of investment. We are seeing early results through the pipeline, starting from brand awareness to marketing leads through to up the pipeline size and starting to result in new logo acquisition acceleration, which is really important.
We are very pleased with where we are with our product innovation pipeline. Smart IVR was a solution we launched in q two, and there's plenty more that we're looking to announce in spring this year. Our SI partner development program, which is new, started out in the beginning of fiscal twenty one, is now underway with those two partners I mentioned, British BT and Global Services and InfoBain. And this 50 consultants having gone through the formal training, and now we're starting to figure out how we use them in our projects as well as them getting into other projects on their side. And finally, our partnership with our two of the three contact center platforms, Cisco and Avaya, continue to be in the Cisco case, continues to be productive.
In the case of Avaya, it's good to see that we are now on the board with CCaaS wins and new enterprise logos. So with that, I'll ask Eric Smith, our Chief Financial Officer, to add more color around our financial operations. Eric?
Speaker 3
Thanks, Ashu, and thanks, everyone, for joining us today. As Ashu noted, we are pleased to report another good quarter with solid SaaS revenue growth year over year, expanding gross margins and positive EPS and cash flow. Our top and bottom line results were ahead of our guidance and Street consensus for the quarter. In addition, as Ashu highlighted, we also saw significant improvement in our new SaaS logos and our pipeline build. Now looking at our quarterly results in more detail.
For the second quarter, SaaS revenue was $16,200,000 up 15% year over year and accounted for 84% of total revenue. SaaS revenue came in 5% ahead of our midpoint of our guidance due in part to increased seasonal business we saw in Q2. For the first six months, SaaS revenue was $32,100,000 up 21% year over year and accounted for 84% of total revenue. Our trailing twelve month SaaS retention rate, which includes upsell and uplift, continued to be over 100%. Professional services revenue was $1,500,000 for the quarter, down 15% from the second quarter last year and accounted for 8% of our total revenue.
This is the direction we have been driving with increased investments in our product to enable quicker time to value for our customers as Ashu just highlighted. Now looking at our non GAAP gross profits and gross margins, gross profit for the second quarter was $14,600,000 or a gross margin of 76%, up from a gross profit of $13,000,000 or a gross margin of 72% a year ago, with subscription gross margin of 82% for the quarter, up from 79% in the second quarter last year. We are pleased with the significant margin expansion, which has been driven by increased automation within our teams. Professional services gross margin was 10% and remained unchanged from the second quarter last year. Now turning to operations, non GAAP operating costs for the quarter came in at $12,300,000 compared to $10,500,000 in the year ago quarter.
The increase was primarily driven by investments in sales and marketing, which was up 30% year over year and accounted for 32% of revenue, up from 26% in the year ago second quarter. Looking at our bottom line, our non GAAP operating income in the second quarter was $2,300,000 or an operating margin of 12% compared to an operating margin of 14% in the year ago quarter. Non GAAP net income for the second quarter was $2,000,000 or $07 per basic share and $06 per diluted share. This compares to non GAAP net income of $2,500,000 or $08 per share on both the basic and diluted basis in the year ago quarter. GAAP net income for the second quarter was $1,600,000 or $05 per share compared to GAAP net income of $2,000,000 or $06 per share in the year ago quarter.
Turning to our balance sheet and cash flows. Our balance sheet continues to get stronger with cash flow from operations of $5,900,000 for the first six months. We ended the quarter with cash and cash equivalents of $54,200,000 up from $46,600,000 at 06/30/2020. Looking at our short term remaining performance obligation or RPO, as I've mentioned in the past due to our customer concentrations, the timing of renewals can create fluctuations in this balance from quarter to quarter. However, with the healthy renewals in Q2 with over 40 customers renewing and no significant churn beyond the two customers we disclosed last quarter, this drove up our short term RPO to 53,400,000.0 a 29% increase year over year.
Now on to our guidance and financial outlook. Before getting into the actual guidance, first, there are a few items I want to highlight. Our SaaS revenue guidance for Q3 includes an expected $300,000 sequential decline due to fewer days in the fiscal third quarter than in the second quarter and an expected 400,000 sequential decline due to seasonal volume increases we experienced in the second quarter that are not expected to repeat in the fiscal third quarter. With our focus on migrating our remaining legacy customers to SaaS, we expect a further sequential decline in our legacy revenue to approximately $1,200,000 for Q3. And with the positive signs of new logo wins and increased pipeline, we are continuing to invest in sales and marketing and as a percentage of total revenue expected will increase to approximately 36% of revenue in Q3.
And finally, we estimate stock based compensation of expense of approximately $500,000 depreciation and amortization of approximately $100,000 and the weighted average shares outstanding of approximately 32,900,000.0 So with that said, for the fiscal third quarter ended 03/31/2021, eGain expects SaaS revenue of between $15,800,000 to 16,300,000.0 total revenue of between $18,300,000 to $18,800,000 GAAP net loss of 500,000 to $1,500,000 or negative $02 to $05 per share and non GAAP net loss of breakeven loss of $1,000,000 or $0.00 to $03 per share. So in summary, we are pleased with our progress this quarter. Looking ahead, we plan on investing to grow faster by ramping our sales and marketing to expand in our 150 SaaS accounts with customer success customer success investment in managed services, to acquire new logos both direct and through an expanding partner ecosystem, and to expand our market opportunity by driving knowledge hub standardization across the client enterprise and creating vertical solutions to target mid market starting with the financial services. Lastly, on the Investor Relations front, later this month, Yigain will be attending a fireside chat with Berenberg Capital Markets. And then in March, we will be participating in the Jefferies First Ever Enterprise Communications Summit taking place virtually on March 10.
And the following week we'll be presenting at the thirty third Annual ROTH Virtual Conference on March 16. We hope to see some of you at these virtual events. This concludes our prepared remarks. Operator we will now open the call for questions.
Speaker 0
Thank you. And we'll take our first question today from Ray McDonald with Needham.
Speaker 4
Hello. Thank you for taking my question. This is Alex on for Ryan. As you lean into the digital go to market strategy from an investment perspective and that's begun to bear fruit early in the quarter with brand awareness and digital leads generated, Can you talk about the incremental progress that's been made on this front and what you're seeing in terms of digital leads working their way through the pipeline as well as if there's any conversions to bookings that have occurred ahead of schedule?
Speaker 2
Okay. So, yeah, first of all, thanks for the question. So our digital marketing is probably running at two to three x or two to three times what we have been doing last fiscal year. So it really amped it up. That both in terms of search engine marketing, remarketing, as well as a lot more virtual conferences.
So we we have we have increased that a lot. That's reflecting in the significant increase. Like, a 90% increase in in our brand awareness as measured by by website traffic is significant. That's also translated into the 60% increase in marketing generated leads to sales, which is quite significant. So that's sort of the early pipeline build.
Most of those opportunities would not turn into deals yet because our sales cycle is in the nine month range, but, you know, they're certainly moving along in the pipeline actively.
Speaker 4
Great. And how is the adoption of the messaging hub trended? Has there been any large increases in messaging volumes as there's been an increase in demand?
Speaker 2
Yes. Messaging is clearly very active. Messaging what we see is messaging is is a critical push by many companies to offer that connect option to their customers. At the same time, a lot of these companies are keen to put in a layer of conversational automation in front of that messaging to make sure that they don't get overwhelmed by the messaging that's incoming. So messaging bundled with conversational automation or virtual assistance is something we are seeing a good demand for.
Speaker 4
Great. That's it for me. Congratulations on the quarter.
Speaker 0
Next we'll hear from Jeff Van Rhee with Craig Hallum.
Speaker 5
Great. Thanks. Thanks guys. Appreciate it. So a couple of questions.
The churned out customers that you talked about, were expecting I think you said $750,000 sequential headwind. How did that play out relative to expectations?
Speaker 3
Geoff. Rick, do you
Speaker 2
want to take that? Yes.
Speaker 3
Sure, absolutely. Yes, I think pretty much as we had expected. Yes, not a dramatic change from that.
Speaker 5
Okay. All right. And then the RPOs, I mean, that's obviously something I think we've talked a lot about. It's a break from a long trajectory of sort of flattish RPOs. But the magnitude of it, I don't know, can you explain a little more about the RPOs considering it's short term?
I'm assuming it's not contract duration. So that's a big jump. And at the same time, sort of square it with the deferred revenues, which sequentially looks like they were just down modestly. So I know these two lines, particularly for eGain, have been lumpy and hard to discern meaning from. But can you sort of reconcile those two?
Speaker 3
I think, Geoff, we're still working through that. I think as I prefaced on the call, these things are subject to these variations. But I think just in light of the questions raised around the renewals, especially last quarter, we thought it appropriate timing wise just to highlight this point given the strength in the renewals. Mean, I think that's really what we saw an element of just, as you know, we do have renewals that are in duration, you know, one, two, three years in duration. And so I think there was a function maybe of the convergence in this particular quarter where as I've mentioned there was, I would believe, more activity than what I normally would have expected in one particular quarter.
So that's what drove it, I would say.
Speaker 5
Yep. You know, obviously we're from an operational standpoint, you know, you've got a pretty good feel for COVID at this point and how the customer base is behaving. Certainly the transition to cloud is done at this point. When you think about guidance, now that certainly is maybe lack of clarity from COVID is clearing, how do you think about the guidance in terms of when you would get back to giving a quarter and an annual outlook? Did you chew that this quarter?
And just how are you thinking about that?
Speaker 3
We did think about it. I think, Jeff, to your point, certainly the clarity around COVID. I mean, there's no question that we're still seeing some element of deal elongational slipping. You know, I think people are still generally cautious even though the demand is high. That combined with, the increased investment that we're seeing, as I should mention, our focus now is getting this new cohort, productive before we ramp the next team.
I would say that, hopefully by the beginning of fiscal twenty twenty two, we'd be in a position to put out that annual guidance. So that's our current thinking at this point.
Speaker 5
Okay. And then just one last quick one. As it relates then to the SAS, I mean obviously that's the focus, you know, layering a lot of reps in. I guess two questions. One, any sort of crude sense of when that SaaS line gets to the 20% growth rate in the out year?
And then secondly, on the cohort hiring, I know you had, I think, originally said sort of April ish. And if I heard you, Ashu, it sounds like maybe more like a May, June. I know it's hard to find talent, so I'm just assuming it took maybe a little longer to get those guys in. But maybe just those two questions, and I'll let somebody else jump on.
Speaker 2
Think you're right about the Talend part. Yeah, go ahead.
Speaker 3
So I think with regard to the growth rates, obviously given the significant impact that we talked about with those two losses, that'll obviously have a drag against year over year comparisons through Q2 of next year. But obviously with the ramping of these sales reps, you know, hopefully that'll come sooner than that. But, you know, obviously, that's something that we'll we'll have to, I guess, manage through through the next couple of quarters.
Speaker 2
Mhmm. Sorry. Go ahead, Ashu. Yeah. Sure.
Thanks. So you're right about the fact that talent is hard to find. So, yes, it does take a month or two more than we thought it would. But I think the the next cohort will be equally a function of how we quickly get these the the first cohort ramped up and productive. So we're watching that closely.
We started we the conversations, but we'll start pulling the trigger on it once we are comfortable that this cohort is underway.
Speaker 5
Sounds good. I appreciate the commentary. Thanks, guys.
Speaker 2
Sure. Thank you.
Speaker 0
We'll now hear from Richard Baldry with Roth Capital.
Speaker 6
Thanks. Some of the new logos coming in are on the smaller side. I'm curious the time to go live maybe as a different from just the sales cycle being nine months. How soon or how quickly do you think that typical new logo win can be turned on and start to impact recurring revenues? Because with two quarters in a row of that up 100%, it feels like you know, if we know how fast they come on, it gives us an idea how quick that acceleration comes.
Speaker 2
Eric, do you wanna talk to that? Sure. Yeah.
Speaker 3
So I think that, you know, typically for us, we've continued to shorten that cycle. So for most of these accounts, that would be within the month, you know, following the the signature. I mean, there there are some instances, especially when we're dealing with our partners, that there may be other factors that would delay it longer than that. But, you know, certainly it's within, you know, we strive to get it done within the thirty day window.
Speaker 6
K. And then maybe could you do a little more broader discussion around sales core it's called cohort number one. You know, how how quickly you think those people kinda can can take over either geographic territories? Will they be split around more of The US market? Will it be broader than that?
And and sort of what would the gating factors to to cohort number two be? Is it, you know, how fast you can get your marketing qualified leads up to, you know, give them adequate coverage, Are are there other factors we have to think about? Thanks.
Speaker 2
I can take that. So our current expectation is, six months. That's our current expectation right now. Some will will run faster than others, but but so far, that's what it seems like.
Speaker 6
K. And, you know, presuming that that that works out, would you think you'd keep up this sort of pace of hiring in out years as well, or do you
Speaker 7
view this really as sort of a
Speaker 6
onetime surge and then back to a more normalized growth after that?
Speaker 3
That's a great question.
Speaker 2
I would like to keep the cadence going. But I think once we do the second cohort, we'll have a better feel for it. Okay.
Speaker 7
Thanks.
Speaker 0
We'll now hear from Mark Schappel with Benchmark.
Speaker 8
Hi, guys. Thank you for taking my question. Just a couple here around the new logo wins. Ashok, could you just speak to whether generally these are partner led deals or whether they're being led directly from your sales efforts, your direct sales efforts?
Speaker 2
Sure. I'd say right now, that is trending about fifty fifty, which which is a good place. And both both the direct and the channel size, we're trying to increase that velocity and and volume. But right now, it's running at about half and half for the six months. Okay.
Speaker 8
Great. So fifty fifty. And are these new logo wins, are they I I assume they're generally competitive wins. And and if so, is there any one or two people you're seeing in these deals more than others?
Speaker 2
They are competitive wins. No. I think the the usual cast of characters in the sense that we see because of the installed base platform kind of attributes we see in Salesforce because Salesforce is in many of these accounts already. So there's always that option. We see live person on the messaging side.
And and we see Oracle and and Verint on the knowledge side. So, you know, we we do see occasionally, we see Zendesk in the lower end of the enterprise, but that that would be for the roundup.
Speaker 8
Okay. Great. And then finally here, on the new logo wins, maybe just talk a little about what solutions your your sales teams are leading with, you know, to get those wins.
Speaker 2
Two two primarily. One is on the digital side of messaging plus VA. That combination seems to be very much in demand. Like, the so that's that's one we are seeing good pull for. The other one is knowledge management with either for contact center, mostly for contact center and and then sometimes for self-service, but mostly contact center knowledge hub.
But what we see happening when we get into these conversations is the fact that we bring the three capabilities together, then that stands us in a good place messaging, knowledge, and analytics. That becomes a differentiator for us.
Speaker 4
Okay. Great. Thank you. That's all for me.
Speaker 0
Once again, press 1 if you have a question. We'll hear from Philip Rigby with DA Davidson.
Speaker 9
Hey guys. Thanks for taking the questions. I wanted to dive into customer migrations a bit. So you mentioned accelerating that push a bit last quarter. Can you talk about what you're doing to drive or maybe even incentivize customer migrations to the cloud?
And then could you just give us an update on what you're seeing on in terms of spend uplift from customers that have migrated to the cloud?
Speaker 2
Sure. So on the on on the incentives for moving to the cloud, we've been in conversation with almost all our customers around cloud migration. And what we have done now is can increase the incentive if they sign up by the end of the fiscal year for us in terms of a better commercial view. And we already give them a huge incentive by doing that move from on premise to the cloud essentially for no charge if they sign up for a three year deal. So that in itself is a big incentive, but we have increased the the additional sort of discount levels not to not not to a point where we lose money, but certainly to be very attractive to them.
So many of our customers I'd say pretty much all our significant customers in the on prem world when I say significant, I mean anyone who's in the on prem world paying us over $100,000 a year in in support payments on prem. Pretty much all of them are in conversation with us actively on moving. It's not a question of if, but when. So that's one part of the response. And then the second part is, you know, we are seeing it takes about six months for customers to move to the cloud and get used to the idea that they can activate new capabilities very quickly.
And that part, we are seeing good traction with. So a number of our expansion opportunities that we are now benefiting from and are in the pipeline are follow-up sales into those accounts. So yes, that is playing out to form.
Speaker 9
Great. Thank you. That's all for me. Congrats on the
Speaker 2
quarter. Thanks.
Speaker 0
We'll hear from Brett Oblock with Berenberg Capital Markets.
Speaker 7
Hi guys. Thanks for taking my question. Congrats on on the the strong quarter in terms of new SaaS customer adds. I I don't know if I missed this, but did you provide an update to the the total customer account or SaaS customer account?
Speaker 3
Not at this point. No. We just I think we're talking January in that $1.50 range, so we haven't done a detailed update.
Speaker 7
Perfect. Yeah. And then the the seasonal revenues that you said benefited this quarter that won't continue, what are you actually referring to? I I don't recall a similar benefit when I look at, last year's q two. So was just curious to try a little more color on that.
Speaker 3
No. Happy to. So I think, I mean, there were two generally, what we're seeing is where customers are there's either two elements that tie into this increase in volume. Either they're unclear of their requirements and they get into a situation where they're using more than they've purchased which drives an overage where there's typically a premium that has to be paid. So for those customers we encourage them over time to increase their base level usage, so the amount gets spread out over time.
So we definitely saw some aspects of that where a customer increased their usage and now working with them to, increase their base level consumption going forward. And then the other piece is really around certain of our retail customers or customers that have ecommerce activities, that would look to, increase their usage or staff, increased activity around the holiday season. So that's sort of contributed. We saw several customers that sort of saw a pickup in their business in the quarter where, that drove increased volume.
Speaker 7
Got it. And then and then maybe just, you know, a last question on on kind of Cisco. They they made a couple big announcements in December kinda revamping, Webex and and their contact center solution as well as acquiring, IMImobile, which has, I guess, you know, chat and email capabilities. So, you know, how do you view those announcements relative to to your relationship with Cisco?
Speaker 2
So, yes, that's a fair point because Cisco has acquired iMiMobile, and they do have digital messaging solution. What we see today is that this is a multiyear journey for someone like Cisco to go from the installed base of enterprise contact centers, which is where they mostly are at today to get to where it would be a a pure cloud solution. Right? So we believe that on two fronts. One, here and now for the next twelve to twenty four months, we see a tremendous opportunity partnering continuing our partnership with them and making sure that their customers are successful with our solutions both on the OEM basis as well as on the resell basis, and we are continuing to do very well there.
In parallel, we we continue to have conversations as partners do as to how we can help them in their active strategic direction, and that's something that we continue to work on. Perfect. Thanks so much, guys. I appreciate it. Sure.
Speaker 0
I see no further questions in the queue. I will now turn the conference over to management for any additional or closing remarks.
Speaker 3
Great. Thanks, operator. Thanks again, everybody, for listening, and look forward to providing you an update when we finish up our Q3. Thanks. This
Speaker 0
concludes today's call. Thank you for your participation. You may now disconnect.