Earnings Call Transcript
Yext, Inc. (YEXT)
Earnings Call Transcript - YEXT Q3 2023
Nils Erdmann, Senior Vice President of Investor Relations
Thank you, operator, and good afternoon, everyone. Welcome to the Yext Fiscal Third Quarter 2023 Conference Call. With me today are CEO and Chair of the Board, Mike Walrath; COO and President, Marc Ferrentino; and CFO, Darryl Bond. During this call, we will make forward-looking statements, including statements related to our future financial performance, expectations regarding the growth of our business, our outlook for the fourth quarter and fiscal year 2023, our strategy and estimates of financial and operating metrics, capital expenditures and other indications of future opportunities, as further described in our third quarter earnings press release. These forward-looking statements are subject to certain risks, uncertainties and assumptions, including those related to Yext's growth, the evolution of our industry, our product development and success, our management performance and general economic and business conditions such as the impact of the COVID-19 pandemic. We undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of these and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in our reports filed with the SEC, including our most recent Form 10-Q for the quarter ended July 31, 2022, our annual report on Form 10-K for the fiscal year ended January 31, 2022, and our press release that was issued this afternoon. During the call, we also refer to non-GAAP financial measures. Reconciliations with the most comparable GAAP measures are available in the earnings press release, which is available at investors.yext.com. I will now turn the call over to Mike.
Mike Walrath, CEO
Thanks, Nils, and thanks, everyone, for joining us today. We are pleased to report Q3 results that demonstrate the continued execution of our strategy to drive efficient and profitable growth by delivering best-in-class products and services that create tremendous value for our customers. I'll start with a brief rundown of our financial performance. In Q3, our revenue was $99.3 million. On a constant currency basis, our quarterly revenue increased roughly 4% over the prior year period, primarily driven by new customers and upsells. Our non-GAAP net income per share was $0.02 compared to a non-GAAP net loss per share of $0.04 in the same period last year. This improvement was largely driven by our success in streamlining our business and improving our operating efficiencies. What this illustrates is that the groundwork we laid in the first half of this year is paying off and we're delivering on the financial commitments we made while continuing to find ways to improve our margins and successfully manage costs to increase our profitability. This quarter, we were able to further reduce our non-GAAP operating expenses as a percentage of revenue to 73%, down from 81% in the same period a year ago. In addition, sales and marketing as a percentage of revenue was 44%, down from 52% in the year-ago period, while our direct ARR growth was up 3% year-over-year or 6% on a constant currency basis. In other words, we generated ARR growth with a significantly reduced sales and marketing budget. Our sales team has grown increasingly productive as we align around our highest priorities; customer satisfaction, operational efficiency and product innovation. To achieve these results, particularly in the face of a challenging macroeconomic environment is a testament to our team's strength and commitment. The macroeconomic headwinds have placed increased scrutiny on budgets and elongated sales cycles, and this is likely to continue to impact our business in the near term, but our value proposition resonates strongly with our customers as we continue to do more with less, we are helping our customers to do the same. It is important to underscore that we are a net saver of cost for our customers. Our customers are the best source of real-time feedback, both direct and indirect, and gathering that information is our first responsibility. Acting on it by developing product features and enhancements is one of the best means of showing them that we're listening, and we're committed to making product decisions that will drive greater value. While we remain focused on operating efficiency, we are committed to developing new and transformative technology to enhance our platform. Our continued investment in technology innovation helps strengthen our relationships with our customers and leads to greater adoption of our Answers platform. This is reflected in our strength in bookings this quarter, both in terms of the breadth and the size of deals we closed. As I mentioned earlier, we're seeing direct ARR growth from new customers and upsells, and just as importantly, our Q3 gross retention rate was the highest it has been this year. We calculate gross retention by comparing the total dollar value of contracts up for renewal in a given quarter against what was renewed, excluding upsells and in Q3, this percentage moved up into the mid-80s. This is very encouraging, particularly when taking into account that a handful of sizable renewals closed in the early days of Q4. Had these closed in Q3, our gross retention would have been several points higher. Even without these deals, we demonstrated sequential improvement in gross retention this quarter, our focus in this area is having a positive impact. To build on this momentum, last month, we welcomed Tom Nielsen to Yext as our Chief Revenue Officer to lead the execution of our sales and customer success strategies. Tom was most recently EVP and Head of Worldwide Sales at New Relic. And his expertise in building and managing scalable, dynamic go-to-market engines is what makes him the ideal leader to drive improved sales execution and accelerate our global revenue growth. His oversight of our overall revenue strategy will drive better integration across our direct and partner businesses and alignment across our sales and customer service organizations. While Tom's focus will be on our revenue engine, we will continue to look for ways to drive efficiency of our business and enhance our profitability, which is critical to our success. As our Q3 results indicate and our Q4 and full year guidance suggests, we continue to operate with an unwavering focus on long-term sustainable growth through an efficient operating model. I'd like to take a moment and thank our entire global team for their hard work and commitment to Yext and to getting the right answers for our customers. And with that, I'd now like to turn the call over to Marc.
Marc Ferrentino, COO and President
Thanks, Mike. We're making good progress in driving efficiency across our sales organization. And as Mike mentioned, we're successfully doing more with less. This shows in our ARR growth, which we achieved with a leaner, stronger and hungrier sales team, not surprisingly doing more with less is also what our customers strive for, particularly in this economic environment. So our objectives are closely aligned with our customers. What resonates with our customers is being able to show how quickly we can solve their answers problems across one area of their organization, and then demonstrate how our platform can be adapted to manage additional pain points. I'm encouraged by the momentum we're beginning to see here and most importantly, the results are resonating with our customers. It's becoming even more clear that we are well positioned to drive long-term growth as our new and existing customers are taking greater advantage of multiple products across our Answers platform. What resonates with them is the value add and cost savings that our products enable to help our customers with digital adoption and becoming mission critical, particularly with the growing number of disconnected digital tools that are implemented across organizations. Gaining real-time customer insights and data-driven decision-making are essential for operating within the digital environment, and our Answers platform presents an opportunity to help our customers optimize their growth. To remain the best-in-class solution for our customers, we are continually making enhancements to the Answers platform and developing even more functionality that improve the overall user experience. In our fall release, which was announced a couple of weeks ago, we added features like listings verifier and point-in-time backups for pages that will transform how our customers use two of our most popular products. This is our third consecutive seasonal release where we've introduced major enhancements to our listings products while also introducing new and innovative ways for organizations to drive user engagement through pages, search, reviews and connector. We added Twitter and Instagram to the Yext publisher network for social postings. This broadens our platform which has the industry's largest network of 250-plus direct integration partners and gives Yext Listings customers the ability to promote new content, deliver valuable updates and drive user engagement across key social media platforms. With these and our ongoing enhancements, we continue to strengthen our Answers platform and our value proposition to clients. The breadth of clients leveraging the platform across several verticals and use cases demonstrates the positive trends underpinning our business and gives us confidence in the long-term opportunities. In Q3, we expanded our leadership position across financial services, healthcare and technology while also adding significant wins and multiproduct cross-sells to verticals in e-commerce, sports, government and religious organizations. Here are a few examples. We substantially expanded our relationship with the Church of Jesus Christ of Latter-day Saints with a new multi-year contract. Originally, they used listings and pages for a portion of their locations. And because of our successful implementation and the lift in traffic and rankings, they asked us to expand their usage and roll out to all of their global locations. In addition to listings and pages, they also broadened their use of our other products on the Answers platform. A Department of Defense agency became a new Yext government client after running a highly competitive RFP that we ultimately won. They chose Yext to help them attract talent from centers across the US through listings and support services. Another exciting competitive win in the commerce space was a global climate solutions manufacturer. The client was up for listings renewal in Q4 but was also running an RFP for a search and pages provider for their B2B commerce experience. After a competitive process, Yext was selected with our ability to handle B2B commerce scale of both SKUs and query rules plus the data modeling capabilities of the Knowledge Graph their team can now deliver a superior experience for their customers. Another solid commerce win for us was an NBA franchise, which added Yext Search to help increase sales at their online store. We were able to demonstrate that by enhancing the search functionality on their franchise homepage, we could reduce the number of redirects to third-party commerce sites, enabling them to maintain a direct connection with the fans and an increased potential sales on their team store. Our financial services team added several new clients and expanded existing clients. And while not booked in Q3, find a financial advisor was launched by a major financial services company following a highly competitive process across multiple software providers. The complexity of the search functionality that the client needed to address span both their Internet and external site sources, and there were intricate development and regulatory compliance requirements. As opposed to a search bar, we developed a guided search experience and generated recommendations based on the user's response to a series of questions. Our team's ability to support all of the client’s customization requirements led us to winning the account and the client began heavily marketing the service in Q3. Consequently, this guided search functionality also has been successfully implemented at two other financial service providers. Another competitive win that demonstrates the strength of our sales pipeline across the technology vertical was Block Inc. They chose to partner with us to power the search experience for their Square support and Square seller community. And lastly, on the partnership front, we renewed our multi-year agreement with Thrive, one of our largest partners. With the close of this deal, Thrive now uses the full expense of our Answers platform; listings, pages, reviews and search. We'll be providing them with premium support services and to add additional integrations and customer service to support them on a global scale. Our teams are executing strongly on our revised go-to-market and Q3 was a good indication that we have the right playbook in place to drive long-term growth by delivering unparalleled value to our customers.
Darryl Bond, CFO
Thanks, Marc. As our financial results demonstrate, we continue to execute well in the third quarter. Our revenue was relatively flat year-over-year at $99.3 million, which was within our guidance range. FX continued to represent a headwind. And as a result of the stronger dollar, our revenue in Q3 was impacted by roughly $0.5 million more than anticipated last September when we provided our Q3 guidance. Third quarter revenue included a negative year-over-year impact of approximately $3.7 million due to FX. Adjusting for this impact, on a constant currency basis, our third quarter year-over-year revenue growth was approximately 4%. Unearned revenue was $153.3 million at the end of the quarter, up slightly from the same period a year ago. Annual recurring revenue, or ARR, is a good measure of adoption and customer satisfaction. At the end of Q3, our ARR was $389.5 million, up 1% year-over-year. We experienced a negative impact from FX of approximately $12.4 million year-over-year on a constant currency basis. Excluding the FX impact, our Q3 year-over-year ARR growth was approximately 4%. Direct customers, which include enterprise and mid-market accounts, represented 81% of total ARR. Direct ARR at the end of Q3 totaled $317.3 million, representing 3% year-over-year growth. Excluding the impact of FX, the direct ARR growth relative to last year was 6% on a constant currency basis. Third-party resellers, which represented 19% of total ARR at the end of Q3 generated ARR of $72.3 million, representing a decline of 8% over the prior year. Excluding the impact of FX, third-party reseller ARR declined 5% relative to last year on a constant currency basis. Our trailing 12-month net dollar-based retention, which excludes our small business customers, was 96%. Our trailing 12-month net dollar-based retention for direct, which also excludes small business customers as well as our third-party reseller customers, was 97%. Our customer count for direct increased 6% year-over-year to approximately 2,900. Turning to non-GAAP results, which are reconciled to GAAP in our press release. Q3 gross profit was $74.8 million, representing gross margin of 75.3% compared to 76.5% in the year-ago quarter. Gross margins were up sequentially from last quarter and we continue to expect to be in the range of our long-term non-GAAP gross margin target of 75% to 80% for the fourth quarter and full year. Q3 operating expenses were $72.1 million or 73% of revenue compared to $81 million or 81% of revenue in the year-ago quarter. We continue to improve operating efficiencies, particularly in sales and marketing. Sales and marketing as a percentage of revenue declined to 44% in Q3 from 52% in the third quarter last year, and we expect this metric to continue to improve. Our Q3 net income was $2.5 million compared to a net loss of $5.5 million in the year-ago quarter. Our Q3 net income per share was $0.02 compared to a net loss of $0.04 per share in the third quarter last year. Cash and cash equivalents were $162 million at the end of Q3 compared to $188 million at the end of the second quarter. The decline in our cash balances included continued share repurchases executed during Q3, which totaled $10.1 million. Year-to-date, our share repurchases totaled $69.1 million. We intend to continue to maintain a strong balance sheet and cash position going forward and will remain open to buying back our stock at attractive prices. Net cash used in operating activities for Q3 was $10.8 million compared to $9.7 million cash used in the year-ago quarter, and our CapEx was $1.5 million compared to $1.8 million in Q3 last year. Turning to our outlook. The US dollar continued to strengthen even further versus the currencies in which we transact our international business, which resulted in a larger than expected FX headwind in Q3. This looks to have ebbed slightly so far in Q4 and our guidance does not assume any impact from foreign currency exchange rates. Today, we expect Q4 revenue will be between $100 million and $101 million. We expect our Q4 non-GAAP EPS to be between $0.02 and $0.03 assuming a weighted average basic share count of approximately 123.2 million shares. For the full year of fiscal '23, we expect revenue of $399 million to $400 million. Our full-year revenue guidance includes an estimated negative impact of $8.7 million to reflect foreign currency exchange rate fluctuations since our initial full-year revenue guidance from March 2022. Our full-year non-GAAP net loss per share is expected to range from $0.05 to $0.04. This range factors in our Q3 EPS upside as well as our expectations for continued improvement across operating expenses, particularly sales and marketing. Full-year EPS assumes a basic weighted average share count of approximately 125.5 million shares.
Operator, Operator
Our first question will come from Naved Khan with Truist.
Naved Khan, Analyst
Two questions from me. First, on the net dollar retention for direct, it came down a little bit sequentially, I guess, 97% versus, if I remember correctly, 98% in the previous quarter. What's driving the sequential decline? And then the second question I have is just on the 3P reseller opportunity. Mike, I think on the last call, you talked about how you could expand the opportunity with the 3P resellers. Are there any updates on this front that you can share with us?
Darryl Bond, CFO
I'll take the net retention question. So you're right, it's down, on the direct side, it's down from 98% to 97% this quarter. Keep in mind, this is a trailing 12-month metric and some of the lower gross retention that we saw in Q1 and Q2 is starting to have an impact on that. So that's a component of it or a piece of it. And then there's also a little bit of FX in there as well. Those are the sort of two main things that are driving that down.
Mike Walrath, CEO
Naved, I think your second question, I missed it a little bit. It was on the partner reseller channel.
Naved Khan, Analyst
Yes. So on the previous call, you talked about how you could expand the opportunity in terms of how much you do with the 3P resellers. And if I just look at this channel, it's down year-on-year, but if you could expand the power, maybe you could grow it. So just talk about that.
Mike Walrath, CEO
I mentioned previously that we see growth potential in that channel, but I wouldn't describe it as immediate. We discussed this before, and I believe there are a few factors influencing the timing. Firstly, this is mainly a listings channel and the primary means through which we connect with small and medium-sized businesses. However, this area faces challenges, and I think that's likely to continue in the current environment. Many companies serving SMBs may struggle during this time, and those are our customers in that channel. While we see opportunities for growth by expanding our product offerings and developing partnerships, we have concentrated on direct annual recurring revenue because we believe it best reflects our business's immediate health. Over the long term, we will still focus on the partner reseller channel, but we do not view it as a strong near-term growth opportunity compared to our direct business.
Naved Khan, Analyst
Could you provide an update on the performance of international markets compared to the US? How is that situation evolving? Additionally, you mentioned that sales cycles are lengthening. Is this trend more noticeable internationally, or is it similar? Please share some insights.
Mike Walrath, CEO
So anecdotally, I think we saw the elongation of the sales cycles probably arrived earlier internationally, particularly in Europe with some of the geopolitical things happening over there. I think we're seeing, as we talked about last time and it's unchanged, we're seeing that across the board, I think every management team and CFO maybe in the world is scrutinizing expenses a little more closely and procurement cycles are lasting longer, and I think we talk to a lot of peers and hear the same things. So I wouldn't say that there's necessarily, from my point of view, a quantifiable difference between what we're seeing internationally versus in the US just that it arrived, I think a little bit internationally than in the US.
Operator, Operator
Our next question will come from Ryan MacDonald with Needham.
Ryan MacDonald, Analyst
Mike, maybe to start for you. Obviously, you've come in, you've made a lot of changes this year in terms of restructuring customer success, bringing in some new leadership to sort of build the pipeline as we go into next year. And it's great to see that you're starting to see some of those improvements on the gross retention side. Just curious, as we're kind of looking into the fourth quarter here, what you're seeing in terms of the renewals? Obviously, it's a big quarter for you. How are those trending? And then what sort of visibility does that give you in terms of fiscal '24 and how we should start to think about maybe mix of growth versus profitability there?
Mike Walrath, CEO
We are pleased to see progress in our gross retention, though we still have more work to do in this area. The changes we've implemented over the past few quarters, particularly around enhancing customer satisfaction and engaging in earlier conversations, are starting to yield positive results. Additionally, while we would like to see stronger performance in bookings, both gross retention and bookings are crucial to our annual recurring revenue growth. The improvements we've achieved in operational efficiency and profitability are sustainable, and we will continue to look for ways to enhance efficiency, which is essential for better overall company performance. The prevailing macroeconomic conditions and foreign exchange challenges are also affecting us. As we are still in the middle of the fourth quarter and planning for next year, we are not ready to provide guidance for next year. However, I believe revenue growth will ultimately align with our ARR growth. Given the existing headwinds and the current ARR figures, influenced by the balance between partner and direct contributions, we are witnessing a positive acceleration in ARR that suggests strong potential for revenue growth next year. Our ongoing focus will be on running the business efficiently and improving sales productivity, along with other key metrics that will help us reaccelerate ARR moving forward.
Ryan MacDonald, Analyst
And then, yes, I mean, I guess a key part of a reacceleration of growth in the out years is you added a new CMO with putting a greater focus on lead generation, a new CRO. Can you just talk about maybe some of the initiatives that they're early on they're kind of putting into place on one on how do you sort of rebuild that top of the funnel and build the pipeline from a marketing perspective, but then do with the new CRO coming in, how do you expand that sort of end-market sale from sort of the CMO to the CIO over time?
Mike Walrath, CEO
Yes. So there's a lot there, obviously. And I think Rand's been in her seat for about three months now, and Tom has been in his seat for about five weeks. And so I talked about this certainly on the last call. We need to temper our expectations. We obviously want to move really fast. We know these sales cycles in normal times are six to nine months. And in this environment, those sales cycles can take even longer. And so as I mentioned on the last call, it's going to take some time to see the impacts of the really hard work that's being done on both the demand generation side of the business as well as the overall go-to-market motion. And a big part of that is how do we make sure that those things are really well coordinated and that the portfolio of investments across that entire portfolio is balanced. And that's a lot of the work that we're doing today, and I'm pleased with the progress that we're making. And like I said, I think we're seeing good indications of progress in things like gross retention and the breadth and diversity of deals that we're seeing. We want to see more pipeline, we want to see more at-bats and more opportunities, and that's what it comes as we get this thing going. So positive indications and very confident that we have the right people leading those functions and the right teams of people at the company. We need some more time to get that together.
Operator, Operator
Our next question will come from Arjun Bhatia with William Blair.
Unidentified Analyst, Analyst
This is Chris for Arjun. I wanted to understand the initial feedback you've received from customers about the brand repositioning you implemented last quarter. Additionally, how is the simplified messaging affecting rep productivity?
Marc Ferrentino, COO and President
So overall, what's been really great about the repositioning and sort of the more clear message and the more clear description of the value that we deliver is that it's opening up a lot of new use cases. All of a sudden, you have customers who are looking at us in a completely different light. We've sort of introduced ourselves and explain ourselves in a different way, which allows us to move more laterally across different use cases and even different buying centers inside of the enterprise, which is really, really cool. What we're seeing, ultimately, though, is a clearer picture and a clear understanding of who Yext is today but also where we're going. So as our customers are thinking about sort of where we fit in the future, where we fit into new solutions and new areas that we can potentially help them in, they just have a better kind of mental roadmap mental framework for how we fit into that. And it really is looking at a broad set of services that are available across the Answers platform, being able to leverage it in both internal and external use cases, and we're seeing that in some of the deals that I talked about earlier. And a lot of the stuff that was being introduced and brought into at prospects that honestly, there are use cases we've never really seen in the past, and it's kind of exciting that we're now able to participate in those. So overall, pretty exciting.
Mike Walrath, CEO
I'll just add that as I engage with others in similar positions, I really enjoy discussing common challenges we face. Since I began these conversations with other CEOs and executives about their issues with providing answers, I have yet to find anyone who believes they don’t have an answer-related problem—where customers, constituents, or prospects are inquiring about their business and receiving accurate information consistently. As Marc mentioned, this shifts the conversation toward solving answer-related issues across a wider range of companies, and our new positioning allows us to engage in that dialogue much more quickly.
Unidentified Analyst, Analyst
Yes, that's all really encouraging to hear. Change gears a little bit. I just wanted to kind of check in on your high-level thinking about growth and profitability. I know you've touched on this a bit. But on one hand, growth has slowed some in recent quarters but you've also made really good progress on driving margin expansion this year. Then on the other hand, recently often big tech have made this a bit more of an attractive hiring environment, especially in R&D and sales and marketing than we've seen in the past couple of years. Just want to check your pulse on kind of your approach to hiring going into 2023.
Mike Walrath, CEO
Thank you for the question. I appreciate your recognition of our efforts. There has been significant work dedicated to improving the efficiency of our business. I want to reiterate my previous remarks: we will execute better because of this work. Being smaller, having fewer silos, and creating a better organizational structure will lead to improved results. One area where we haven’t reduced our investment is in research and development. Even while we have sought greater efficiency, we have focused on attracting talent in product, engineering, and R&D roles. We are beginning to see the benefits of this innovation and are grateful for the teams making it happen. It’s all about balance. As we look ahead to next year, we are confident that the efficiency improvements we've implemented are sustainable and can serve as a foundation for future growth. We believe that our growth will stem from enhanced execution in our go-to-market strategy, particularly focusing on direct ARR as a key metric. The overall ARR performance will also contribute to revenue growth, as I mentioned previously.
Operator, Operator
Our next question will come from Tom White with D.A. Davidson.
Wyatt Swanson, Analyst
This is Wyatt Swanson on for Tom. So just to start, a high-level question on the macro. I'm curious what your guys' interactions with customers and prospects is telling you about how enterprises are thinking about spending for knowledge management solutions entering calendar 2023 in the face of inflation, a potential recession and so on.
Mike Walrath, CEO
I believe I previously mentioned that I don’t know a single CEO or CFO who isn’t being more cautious about costs. It’s a straightforward observation, but it becomes complex when you delve into the details. Generally, our solutions tend to save costs. Essentially, we present a value proposition where you can transform manual tasks or unperformed work into automated processes using our solutions. However, procurement cycles, expense scrutiny, and the timing of those expenses are under close examination. This trend appears to be consistent. Additionally, it varies by industry; some sectors are more inclined to cut costs, driven more by the necessity to reduce expenses than the pursuit of ROI. Consequently, our toughest discussions are with customers who recognize the product's value but may have to reduce or eliminate components of the solution. There’s little we can do about that except strive to be the best partner possible and assist them in prioritizing the most critical aspects of the platform.
Operator, Operator
Our next question will come from Rohit Kulkarni with MKM Partners.
Rohit Kulkarni, Analyst
Considering the current macro environment and its effect on the business, it's clear that you are entering a crucial quarter for company bookings. With the recent sales reorganization and a new go-to-market approach, please discuss how visibility is evolving and your level of confidence. It appears that the fourth-quarter guidance is somewhat conservative. How far ahead do you believe you have insight into the outlook you provided? I also have a couple of additional questions regarding broader issues.
Mike Walrath, CEO
Let me address the first question, and then I'll be happy to take any follow-up queries. I believe you recognize that our outlook is cautious, and as I mentioned previously, our planning for next year will also be conservative. We are facing significant uncertainty in the environment, making predictions challenging. We are not going to risk speculation on the severity or impact of a potential recession. Therefore, we will continue to operate with caution and maintain our focus on efficiency. We will actively pursue opportunities in our go-to-market channels, but we remain dedicated to enhancing our productivity. We are observing improvements in our overall productivity. Once we achieve the level of productivity we aspire to, we will invest in expanding our teams and capturing a greater share of market opportunities.
Rohit Kulkarni, Analyst
Regarding the future of headcount, are there significant areas where adjustments may occur or specific operational items that could be optimized now that you have nearly a new team in place for three to seven months? Could you share your thoughts on the current headcount situation and reporting structures? Do you believe they are well-established enough to allow for development moving into 2023?
Mike Walrath, CEO
I think we're making significant progress. I'm confident in our team, but I want to acknowledge that Tom and Rand have only been here a short while, so it's premature to say their work is complete. The reality is that our work is ongoing because there are always new opportunities and we need to continually adjust our investments across sales, marketing, R&D, and general administration. This links back to earlier discussions about our partner and direct channels. A well-organized company must prioritize its opportunities. While we see potential in the partner channel, we may focus more on direct business opportunities in the near term. Our team is committed to continuously assessing where we're investing effectively and where we can improve efficiency. We're pleased with our progress, particularly in sales and marketing as a proportion of revenue, and we've aligned our R&D and G&A expenses closer to our long-term goals. However, I cannot say that this process will ever truly end, as it's our duty to continually evaluate what is working and what isn't.
Rohit Kulkarni, Analyst
I have a quick question. You mentioned competitive RFPs and winning a couple in the recent quarter. Can you discuss how the competitive environment has changed? Are there any new entrants, or historically, it seems there haven't been many direct competitors? However, there might be a balance between price and demand that the company can navigate. Could you share your thoughts on how the competitive landscape has evolved?
Mike Walrath, CEO
I'll start by mentioning that Marc is eager to discuss the competitive landscape. I'll let him address some of the competitive situations. As our platform has expanded and the variety of solutions we offer has increased, our leadership position in listings remains important to us, and we will continue to defend it through innovation. In other areas, like search solutions, we face larger competitors. Without taking away from Marc's insights, I can share that we're quite confident in competing directly with our rivals.
Marc Ferrentino, COO and President
What has been and continues to be an advantage for us is our platform play. There are many competitors out there who can potentially provide one point solution, but not be able to bring them all together. And so we walk into every room with the advantage of having a very broad set of features within our platform that allow us to solve a broader set of use cases. On the listing side, we are the leader in the space. We continue to be a leader in the space. And you can see that with wins like the church and the agency inside the Department of Defense, which were competitive bids, competitive RFPs, and we were able to come out on top. In the search space with the win we had and the B2B commerce win that we had, I mean that was a highly contested win. There was a huge complex functionality and features that we had to provide, scale, B2B commerce behind firewall, you name it, the full run there, and we were able to go against much more established players. We've been doing this a lot longer and come out on the right side of that, same thing with Block. So we're feeling really, really good about each one of our product sets, each one of the products we have on the platform and how they're performing in a competitive environment, and we'll continue to innovate and we have a pretty robust roadmap that we're very excited about. And so the key is to stay ahead and keep innovating.
Operator, Operator
This concludes our question-and-answer session, which also concludes our conference for today. Thank you for attending today's presentation. You may now disconnect.