Intapp, Inc. Q2 FY2023 Earnings Call

Thank you. Welcome to Intapp's fiscal second quarter 2023 financial results. On the call with me today are John Hall, Chairman and CEO of Intapp; and Steve Robertson, 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, including guidance provided for our fiscal third quarter and full year 2023. These forward-looking statements are based on management's current views and expectations and entail certain assumptions made as of today's date and are subject to various risks and uncertainties, including those described in our SEC filings and other publicly available documents that are difficult to predict and could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Intapp disclaims any obligation to update or revise any forward-looking statements, except as required by law. 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 to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to Form 8-K furnished with the SEC prior to this call. With that, I'll hand the conversation over to John.

Thank you, David. Good afternoon, everyone. Thank you for being here with us today as we share our results for our second fiscal quarter. I'm pleased to share that once again we've achieved strong quarterly results supported by cloud ARR growth, SaaS and support revenue growth, the acquisition of new logos, and the continued growth of our existing client accounts. For any of you who may be new to our story, Intapp targets an underserved and overlooked, but actually very large $3 trillion industry of professional and financial services firms. Professionals in these firms are the investors and advisors who work in the world's private capital investing, investment banking, legal, accounting, and consulting firms. These professionals work in specialist and cross-specialty teams every day to support the global industry of deals and disputes. Most of our target firms are originally set up as partnerships, not corporations. As a result, they operate both internally and in their go-to-market model very differently from traditional corporations. Our target firms are also in a highly regulated industry and need to manage a wide range of statutory professional ethics and client compliance obligations that are unique to them. Intapp industry cloud has been designed specifically for the unique operating and compliance needs of these firms. We are highly differentiated from traditional CRM and ERP systems, which were built for companies selling a tangible product. In contrast, our industry cloud understands that business is based on leveraging their collective specialized knowledge, expertise, experience, and relationships to win business and to deliver value for their clients and investors. Our industry cloud helps these firms to increase their revenues and returns, operate more efficiently and profitably, manage risk and compliance more effectively, and leverage their collective knowledge for competitive advantage. Intapp is leading cloud transformation for this global deal-making, legal, and advisory industry, and our strong Q2 results continue to validate our strategy. Here's how we did. In our second quarter, our cloud ARR grew 42% to $191.8 million. Cloud now represents 64% of our total ARR of $301.3 million, which is up 26% year-over-year. We earned second quarter SaaS and support revenue of $61.6 million, up 31% year-over-year and total revenue of $84.7 million, also up 31% year-over-year. We now serve more than 2,200 premier firms across our target verticals. Despite the current climate of broader economic concerns, we continue to see steady demand for our purpose-built solutions in our Q2 results. We gained some direct insight into what's driving this steady demand at our two-day Intapp City Tour event in New York in November. Our event was attended by clients from our private capital, investment banking, legal accounting, and consulting firms, as well as our partners and industry experts. Participants had a chance to share and learn from each other about the challenges, opportunities, and initiatives that each of their firms is pursuing. Presenters included keynote speaker Luke Flemmer, Managing Director at Goldman Sachs; Ian Clark, Managing Director and Global Chief Technology Officer at Lazard; Angie Goenaga, Senior Investment Associate at Women's World Banking; and Jamie Fowler, Chief Transformation Officer at Grant Thornton, who shared their experiences creating efficiencies within their complex organizations, operating successfully in their highly regulated industry, and winning business by leveraging their knowledge, intellectual capital, and relationships for competitive advantage. Many of our attending clients shared that they do not anticipate their digital transformation initiatives slowing down even while facing an economic downturn. Instead, they see the increased capabilities and efficiency provided by the adoption of cloud technology as essential to enabling their firms to withstand any challenging economic conditions. The event also included a dedicated daylong session attended by members of our large partner ecosystem, which plays a crucial role in our strategy to deliver optimal value to our clients. We featured a discussion between the Microsoft team and Intapp's Chief Product Officer, Thad Jampol, on innovation and Intapp's industry cloud strategy, which delivers a path for these firms as they pursue digital transformation. Our discussion underscored the importance of our strategic partnership with Microsoft, which continues to develop and mature. Last quarter, we were officially recognized as a top-tier partner of Microsoft, a distinction achieved by fewer than 1% of partners. Deployment of all our Intapp solutions to Azure is progressing in line with our plan as a key part of our partnership strategy. We worked with some of our new partners to advance our industry cloud and innovation roadmap in the quarter. We released our new relationship paths capability, which helps firms source and win new business by leveraging their current network of professional connections, using applied AI to intelligently surface deeper paths to high-value contacts. The feature helps professionals in our firms to source potential warm introductions by evaluating our partner Equilar's database of 1.5 million executives and board members and combining that with the firm's own proprietary relationship information. Relationship paths expands our relationship intelligence capabilities to enable higher quality outreach to help professionals build new and deeper relationships and drive growth and greater success in winning new business. In the second quarter, we also integrated capabilities from our Billstream acquisition to enhance our Intapp time solution. Together, these solutions help firms integrate compliance across time entry and pre-billing processes in a way that accelerates the work-to-collect cycle, as well as improving realization rates and driving profitability, which offer compelling hard ROI benefits for any firm in the current climate. Our clients who are embracing these operating efficiency features have also noted that the design of our solutions enhances both the professionals' and the clients' experience with the firm in the smoothness of the billing and collections process. We are also continuing to advance our industry cloud's compliance capabilities, explicitly designed for the regulated industry we serve. We further enhanced our market-leading walls product to allow for self-service by our professional users. Automated ethical walls and information barriers are critical compliance requirements designed to protect sensitive client and investor information. Our enhanced lawyer portal for walls ensures that partners, lawyers, and associates can process critical ethical barrier requests in real time, removing potential bottlenecks and avoiding slowdowns in client onboarding processes and the firm's ability to respond rapidly to their clients' requests. Finally, demonstrating our ability not just to design, but to deliver our innovative solutions, in Q2, we went live with a number of large and notable client implementations. We celebrated go-lives of DealCloud for the asset management arm of one of the world's leading investment banks, as well as a large global financial advisory and asset management firm, and go-lives of our risk and compliance solutions in our industry cloud for one of the world's top strategy consulting firms. Notably, all three of those deals closed just in Q1, demonstrating our ability to shorten our time to value even on large or complex client implementations. Our rapid time to value enables our clients to operate more efficiently in the current climate, manage regulatory compliance quickly, and grow effectively. Our innovation was also recognized with several awards in the quarter. Notably, our DealCloud solution was named the best deal origination technology in Private Equity Wire US Awards in October, and DealCloud also won Enterprise Product of the Year for the financial software category at the 2022 Best in Biz Awards in December. Both awards validate DealCloud's ability to support the unique and complex needs of deal makers, helping them effectively and efficiently source and originate deals from any location. Turning now to notable client wins, we continue to add new logos, grow existing client accounts through upselling and cross-selling, and expand our international footprint. I'd like to highlight several of the new logos we acquired in our second quarter. In Q2, we welcomed Global Venture Growth Firm B Capital as a new client. Founded in 2015 and led by Howard Morgan, Sheila Patel, Eduardo Saverin, and Raj Ganguly, B Capital invests as an integrated team across nine locations in the US and Asia. They chose to shift from a legacy system to DealCloud across their deal, IR, operations, and business development teams because it possesses the robust data infrastructure, IR functionality, and reporting capabilities B Capital needs to support the long-term growth of their business. European Investment Banking franchise SEB is another new client who selected DealCloud to replace its legacy system. Previously using a large horizontal CRM, SEB struggled with a lack of user adoption of the system, which was tailored for the way its professionals work. Additionally, that CRM required a level of IT support that was impacting its ability to support other IT projects and initiatives that could drive growth. SEB chose DealCloud because of its reputation as the market leader, the way our technology is tailored to the way the firm operates, its flexibility, and the fact that it will significantly reduce ongoing IT support requirements. They will be implementing the software across M&A, leveraged finance, and capital markets teams to improve connectivity and collaboration, and better leverage data and institutional knowledge. Last quarter, we also continued to expand our footprint in the consulting industry with another new client win. A top global management consulting firm executed a multiyear contract for our risk and compliance solution, which enables the firm to better identify and process complex conflicts for use cases like M&A, bankruptcy, adverse parties, or conflicting relationships. While this is a new consulting firm logo for us, it's notable that many of the firm's professionals had previous experience with Intapp at other professional firms, including law firms in the industry. Their familiarity with our brand and their trust in our capabilities helped to speed the deal and illustrates how deal and dispute professionals' networks bring us referrals across the vertical industry we serve and support our continued expansion and logo acquisition throughout this market. Finally, I'd like to highlight the recent addition of accounting business and wealth advisors Kreston Reeves to our client portfolio. Based in the UK, Kreston adopted Microsoft Office 365 to enable a secure, collaborative modern work environment. They quickly realized their needs to extend the platform's capabilities with solutions tailored to their unique needs as an accounting firm. Kreston selected our collaboration and content solutions to help maximize their Microsoft platform investments and create a collaborative document management solution. To conclude, having reached the halfway point of our fiscal '23, we're pleased with our consistent growth and performance. We are pursuing a deep and unreserved $24 billion global TAM. Our revenue model remains highly predictable, and our durable end market continues to demonstrate a strong commitment to investing in digital transformation despite global economic uncertainty. We continue to add new clients, grow existing client accounts, and pursue significant growth opportunities ahead to help our industry embrace cloud transformation. Our purpose-built industry cloud platform has compelling value for our specialized clients, helping them to increase revenues and returns, operate more efficiently and profitably, manage risk and compliance more effectively, and leverage their collective knowledge for growing competitive advantage. As always, I'd like to thank our clients, our partners, our investors, our Board, and our employees whose teamwork and dedication led to our strong Q2 performance. Thank you all very much. Okay. Steve, over to you.

Thanks, John, and thanks everyone for joining us today. As John noted, we had a strong quarter with our cloud ARR up 42% year-over-year and our total ARR up 26% year-over-year. Before I go through our financials, I'd like to quickly review a few fundamentals of revenue recognition in our financial model, just as a reminder. Cloud ARR is recognized as SaaS revenue ratably following a new sale or renewal. On-premises ARR is recognized in two 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 is more predictable quarter-to-quarter, while subscription license revenue can vary based on the timing of revenue recognition. Okay. Moving to our numbers. SaaS and support revenue was $61.6 million, up 31% year-over-year, reflecting both new sales to new clients and upsells and cross-sells to existing clients of Intapp's purpose-built cloud solutions. Total revenue was $84.7 million, up 31% year-over-year, driven primarily by continued strong sales of our cloud solutions, as well as by solid growth in professional services revenue. Subscription license revenue was $11.0 million compared to $9.3 million in the prior year period, reflecting annual and multi-year renewals inclusive of CPI-based price increases. Professional services revenue was $12.1 million as compared to $8.4 million in the prior-year period, reflecting an increased growth rate consistent with our current pace of software implementations. Overall, we continue to execute our land and expand model, ending the quarter with more than 2,200 clients, 561 of which had ARR of more than $100,000, up from 457 in the prior year period. In addition, we upsold and cross-sold to our existing clients, such that our trailing 12 months net revenue retention rate was above our projected range of 110% to 114%. We have decided to increase our range to 113% to 117% and this quarter's net revenue retention rate was within that range. Before discussing gross margins, expenses, and profitability, please note that I will be discussing non-GAAP results going forward. As a reminder, our GAAP financial results, along with a reconciliation between GAAP and non-GAAP results, can be found in our earnings press release and its supplemental financial tables. Second quarter results were as follows: Total non-GAAP gross margin was 71.5% as compared to 68.5% in the prior year period, primarily reflecting an increase in our services gross margin and a previously executed organizational realignment of a portion of our client success team from cost of sales to sales and marketing. Non-GAAP operating expenses were $57.7 million, a $13.2 million increase year-over-year as we continued to invest in sales, marketing, and product development to support our growth. Non-GAAP sales and marketing expense was $25.7 million, a $7.0 million increase year-over-year as a function of increased headcount and related sales commissions to capture new business in our growing markets, along with the previously mentioned organizational realignment. Non-GAAP R&D expense was $18.7 million, a $5.6 million increase year-over-year as we increased headcount and made investments in our product roadmap. Non-GAAP G&A expense was $13.2 million, a $0.6 million increase year-over-year as we began to see some leverage and scalability in the business. Non-GAAP operating profit was $2.8 million as compared to our second quarter fiscal 2022 non-GAAP operating loss of $0.2 million, as we continue to generate some modest initial profitability in the business. Non-GAAP net income per fully diluted share was $0.03 in the second quarter of fiscal 2023 as compared to a loss that rounded to $0.00 in the second quarter of fiscal 2022. In terms of the balance sheet, we ended the quarter with $51.6 million in cash and cash equivalents. Now turning to guidance. For the third quarter of fiscal '23, we expect SaaS and support revenue of between $63 million and $64 million and total revenue in the range of $87 million to $88 million. We expect non-GAAP operating profit in the range of $0.5 million to $1.5 million and non-GAAP per share results in the range of negative $0.01 to positive $0.01 using a fully diluted share count weighted for the quarter of approximately 75 million common shares outstanding. For the full year of fiscal '23, we expect SaaS and support revenue of between $246 million and $250 million and total revenue in the range of $340.5 million to $344.5 million. We also expect non-GAAP operating profit to be in the range of $4.5 million to $8.5 million and non-GAAP net income per share in the range of $0.02 to $0.06 using a fully diluted share count weighted for fiscal year '23 of approximately 73 million common shares outstanding. With that, John and I look forward to taking your questions.

Our first question comes from Koji Ikeda from Bank of America. Your line is open.

Hi, this is Natalie Howe for Koji. Thanks for taking my question and great job on the quarter. Last quarter, you guys said you are not seeing a lengthening of sales cycles right now. Is that still the case now and are there any verticals and geographies outperforming and any better feeling the impact of the macro more than others? Thank you.

Hi, Natalie. Thanks for your question. So we have not seen a lengthening of sales cycles. We continue to monitor that. We think that our clients are pretty committed to following through on their cloud transformation program and we've been talking to them about that. That was one of the questions that we were asking at our City Tour event in New York in the winter, what's going on inside your firms and how are things going, and we were very encouraged by the general tone that folks are following through on their cloud transformation initiatives because they see some real benefit to themselves operationally to better position to weather any kind of economic uncertainty, and they see in our platform some real advantages that they can take advantage of its capabilities. So that gave us some confidence. That being said, we're going to continue to watch. To your second question about the sub-verticals, there is good strength across the board. We're fortunate to be relatively broad-based across the professional financial services industry. The law firms, the accounting firms, the consulting firms, the private capital, private equity firms tend to be very stable. We've said in the past that it's the investment banks that may see a little bit of variability and we're watching that carefully. At the same time, a lot of them are doing these improvement initiatives to position themselves better. So we're going to continue to monitor that, but overall it's been pretty steady.

Thank you. That's it.

Our next question comes from Kevin McVeigh from Credit Suisse. Your line is open.

Great. Thanks so much and really, really terrific results all around. I don't know if this would be for John, Steve or David, but really happy to see increase in the bands on the NRR. Maybe just aggregate the components and kind of what gives you the confidence to do it now?

Sure, Kevin. We have been experiencing strong performance that has exceeded our forecasts for several consecutive quarters. It appears that this trend has become stable, allowing us to adjust our expectations accordingly. Our growth is well-rounded, driven by both cross-selling and up-selling, as well as our professional and financial services. We are effectively executing our land and expand strategy by selling to our existing clients. Additionally, we continue to acquire many new clients each quarter. This decision aligns with indications we've made previously about adjusting our outlook, and we've chosen to move forward with it now.

It's a great outcome. It feels like there's been a structural change in the average client size, particularly those exceeding $100,000. Can you clarify how much of this is from new clients compared to existing clients adding more services?

I recently noticed that our rate of acquiring new clients seems to be increasing by approximately 10%. While we provide a rounded figure, it's worth mentioning that clients contributing over $100K are growing at a rate of 20%. This growth is driven by a mix of new clients that exceed $100,000 in any given quarter, as well as upsells from existing clients who initially started below the $100,000 threshold. Therefore, both factors contribute positively to the overall growth in the initial phase.

Really, really nice outcome. Thank you.

Thanks.

Our next question comes from Terry Tillman from Truist. Your line is open.

Yes. Hi, good afternoon gentlemen. Hopefully you can hear me okay. I would like to congratulate you on the quarter and the outlook. I have two questions. The first one might be a bit multi-part, but it seems pretty important, so I wanted to delve into that a little more detail, but with Microsoft. I'm curious about where you are in terms of the cycle of them starting to work well with you. It seems like there's some collaboration starting. How are they influencing business for you? The second part is, I believe you mentioned earlier a customer rolling out Microsoft Teams, and it sounded like you were brought in. Do you see more dynamism helping you acquire new logos or is it more focused on the existing installed base? Is there one go-to-market strategy that seems more intriguing? I also have a follow-up.

Thanks, Terry. The Microsoft relationship is going well. We have a multi-track plan that we put in place with them jointly when we started the partnership just over a year ago, and we've begun collaborating on the technology side, on the cloud side, and in our go-to-market. There are relationships from each of those organizations inside our company with different parts of the Microsoft team. To your question about go-to-market, they absolutely are collaborating with us in the field. We're very excited about that, and vice versa, because we have a position in the professional financial services industry, with an industry cloud, value proposition that augments the whole Microsoft Office 365, Teams, Azure capabilities in a way that makes it more specific for this end market that historically has been very Microsoft-friendly but has had to do a lot of work to try to adjust the Microsoft platform to work for the way that the partnership-based firms operate, and we're able to solve that problem. So the Microsoft field reps are excited to have us come in and we're bringing our team together with them to many accounts. They've introduced us in places to your question. We’ve also brought them in for an opportunity for them to expand their Azure footprint, for example, at some of the firms. So it's a good collaboration going there. And as to new logos or installed base. It's both. We’ve had good successes in some of the stories that I was telling in the overview, where they worked with us both to win new business and also to help us grow some of the accounts that we have with new capabilities.

That's great to hear. And I guess a follow-up question. We get the question a fair amount in terms of just the ongoing kind of cloud transformation in your own business, that sounds positive in terms of clients seem like they're still wanting to move forward with their digital transformation initiatives. But what about in terms of some of your larger customers that still may be on-prem? How are you thinking about over the next couple of years in terms of a greater propensity to move to cloud, because what I'm getting is, 64% of the total ARRs cloud? Just trying to get a sense on how that should kind of evolve over the next couple of years towards cloud? Thank you.

Sure, I'll take that question, Terry. First of all, as we've mentioned before, 64% of our cloud annual recurring revenue comes from over 80% of our customers who have at least one product in the cloud. We have hybrid customers who are transitioning to the cloud as you described. For some of our larger clients, we've noticed that when they're ready to purchase or implement new capabilities, it often coincides with their readiness to fully migrate to the cloud from on-premises solutions. It's an ongoing organic assessment, but we consistently sign up new migrations each quarter, and I believe we are making steady progress toward cloud adoption across our entire client base.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Brian Schwartz from Oppenheimer. Your line is open.

Hi, John and Steve, thank you for addressing my questions this afternoon, and congratulations on an excellent quarter. John, I wanted to ask about the up-selling activity in the net revenue retention. Specifically, I am curious about the timing of these opportunities. Have you noticed any increase in the pace at which customers are returning to make additional purchases based on their initial purchases?

Hi, Brian. Thanks for the question. Yes, I think the cloud program has put us in a position to help people get up and running faster if they want to bring up additional modules in the cloud. We've always had good upsell and cross-sell from our clients, whether it was in the on-prem generation or cloud, but we are encouraged about the opportunity to help people once they've got the industry cloud running to help them adapt more capabilities quickly, and that's one of the many reasons that the model is a good model, and we're excited about the evolution there.

Thanks, John. And then one question, Steve, for you. Just a question around the assumptions for the macro in your outlook. Is your expectation in the guidance that the strength of the business is seeing and the steady demand in the macro that persists throughout the year, or are you discounting at all the macro in the updated guidance that you gave us today? Thanks, Steve.

I would respond to that by saying we are always a little cautious. As John mentioned, we have a strong pipeline and the business remains in a good state, similar to last quarter. However, we are monitoring the situation closely, as none of us can predict with certainty. We're being prudent about it, but there has been no significant change in our approach to modeling future expectations regarding the macro environment at this time. We're just observing carefully.

Thank you very much.

Our next question comes from the line of Alex Sklar from Raymond James. Your line is open.

Thanks. John, I want to follow up on your remarks around the Billstream enhancements and the harder ROI benefits there. Is where you're landing with new customers or where you're telling your sales force to focus on from a value proposition perspective changing at all in the current environment? Any additional pressure to be selling on that part ROI?

Hi Alex. Thank you. It's interesting; the platform has a range of value propositions from helping with origination and sourcing and winning new business to efficiency and profitability to compliance and to knowledge and competitive advantage. Firms are in different places in their own strategy and operations and market position and what they're looking to do. The team is very skilled now at listening carefully to each client and making sure we understand what their strategic, operational, and compliance goals are, and positioning the offering in our story that really helps the firms achieve what's important to them at the time. I do think that in the current environment, there is a higher proportion of firms who are looking at operating efficiencies and hard ROI, but not exclusively. There are firms who are focused on the compliance story, and there are firms who are focused on positioning themselves for growth and having the right kind of experience for their professionals and for their clients. Part of the differentiation of Intapp's overall platform is that we can bring that richness and potential to the firms, and it's going to grow with them as their strategy evolves, and that's one of the things folks really like about it. They struggled in the past with traditional CRM and ERP to get that kind of flexibility and support for what they're trying to do today, and they can get it with us. It's been a good broad strategic story because of that broad potential, and then we get very specific in each client case to drive the deals.

Okay. Great. That's super helpful context. And then, Steve, on the profitability outlook, quite a bit higher than where we started the year. Can you just talk about the drivers of that upside and any changes in your overall thoughts on hiring plans for the year from a couple of quarters ago?

Yes, we are experiencing strong revenue performance, which positively impacts our bottom line. We are continuing to hire and seeing good growth. Our goal is to stay ahead and capture these opportunities, as we have mentioned in previous quarters. Additionally, we are beginning to notice some leverage in the business and expect our operating profit to improve steadily over time. We are currently planning for next year and future growth. We are hiring strategically to take advantage of our growth opportunities.

All right. Great. Thank you.

One moment for next question. Our next question comes from the line of Parker Lane from Stifel. Your line is open.

This is Matthew Kikkert for Parker. Thanks for taking my questions and congratulations on the quarter. Customer expansion has been a key part of your growth strategy. I want to ask about the top of funnel demand that you're seeing recently. Has there been any change there over the last quarter? And do you have any planned incremental investments in 2023 to address that top of the funnel demand?

Look, top of the funnel, the whole pipeline remains strong. We are continuing to invest there steadily; I think, because as I said, we want to capture growth. So, no particular change in our investment orientation towards the opportunity we're seeing in terms of sales in the marketplace right now.

Okay. That's all from me. Thank you very much.

You bet. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Arvind Ramnani from Piper Sandler. Your line is open.

Hi. Thank you for taking my question. I would like to know about the timeframe when you sign up a new client. I understand it varies depending on each client and the complexity of their environment, but could you provide a typical range for when a client starts with Intapp and when they begin to see some benefits from your platform?

Hi, Arvind. Thank you. So generally speaking, it's six months to nine months on our mid-size and larger clients. We can do implementations and get clients up and running in 30 days; we've done that in certain situations. The smaller firms have an easier time doing that. And for the very largest enterprise global class firms that can take a year. But a lot of it too is how focused the IT group on their side is to get us up and running. So usually we're doing things in about six to nine months, maybe nine months if you wanted to total average.

Perfect. And then in terms of like growth kind of expansion at existing clients, are you to kind of provide some sort of wafer to think like once you sign up a client, the initial six months or 1 year, is X dollars in revenue. But once they stay with you for three years, does revenue typically go up 2x, 3x, like what type of expansion are you seeing in the medium term after someone signs up with you?

Yes, Arvind. This is Steve; I’ll take that. We don’t track it exactly that way, but we certainly look at our progress after onboarding. As we’ve mentioned before, our penetration across our client base is generally quite low; while some clients have fully adopted the platform, others are just getting started. As John mentioned, if an implementation takes six to nine months, the next phase might occur the following year. We are prepared to return and introduce and implement the next set of capabilities. Sometimes this process occurs more rapidly, while at other times it does not. So, we don’t have a precise answer to your question, but you can observe from our net revenue retention rates, which we are increasing, that we are experiencing strong performance. We are definitely selling effectively to existing clients through both cross-selling opportunities and upselling to new users. This is creating strong momentum, and we believe it will continue.

Terrific. And just to clarify, like in terms of your revenue build. I think what I heard on today's call is, I mean clearly clients who had started six months or nine months ago, those are continuing, but as far as like in new project starts and new logos and pipeline, those are just as strong as they have been in the last 12 months. I just want to confirm that.

Yes. I think we've added 50 or so plus net new customers every quarter for several quarters now. So it's been steady that way.

Terrific. Thank you very much.

You bet. Thank you.

Thank you. And I'm not showing any further questions in the queue. I'd like to turn the call back over to John for any closing remarks.

Okay. Thanks everyone for joining us today. We'll look forward to talking with you all again at our third quarter release in May. Thanks again. Have a good day.

And this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.