Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide insights into the trends in both the SMB and enterprise segments as we exit the year, and how should we think about the growth rates of these segments in the coming year? A: We are seeing strength in the upmarket, particularly with our Operations and Copilot products. The SMB segment is stabilizing and becoming a healthier, albeit smaller, portion of our business. We expect upside in our execution in the upmarket, where there is good demand and product-market fit. For 2025, we are modeling mid-single-digit growth in the upmarket, while the downmarket, which declined 9% in 2024, is expected to perform slightly worse in 2025.
Q: How is the migration of customers to Copilot progressing, and what is the strategy for transitioning the installed base? A: We are migrating customers to Copilot both off-cycle and at renewal times, maintaining pricing discipline. We released a customer impact report showing strong ROI for Copilot users, which supports our strategy of allowing customers to trial Copilot and then monetizing the value either at renewal or through off-cycle upsells.
Q: What are the drivers behind the improvement in net revenue retention (NRR) to 87%? A: The improvement in NRR is due to a shift from defensive downsell opportunities to upsell opportunities in the upmarket. In the downmarket, retention stabilized in Q3 and Q4. Overall, we are seeing more upsell opportunities and less downsell exposure than previously.
Q: Can you elaborate on the characteristics of the $100,000 customer cohort and the factors driving its growth? A: The $100,000 cohort is heavily upmarket. Growth is driven by successful upselling of existing customers, acquiring new upmarket customers, and reducing downsell exposure. We have opportunities to expand into account executives, account managers, and customer success managers, which increases the potential for seat expansion.
Q: How does the competitive landscape look as you move further upmarket, particularly with Copilot-first deals? A: Our product-market fit and differentiation are stronger upmarket, where we have the right resources and products. Our competitive advantage is driven by the breadth, depth, and accuracy of our data, our regulatory and compliance posture, and our pace of innovation around AI and go-to-market strategies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.