Momentive Global Inc. (MNTV) Q4 2022 Earnings Call Transcript

Momentive Global Inc. (NASDAQ:MNTV) Q4 2022 Results Conference Call February 16, 2023 5:00 PM ET

Company Participants

Gary Fuges - VP, IR

Zander Lurie - CEO

Rich Sullivan - CFO

Priyanka Carr - COO

Conference Call Participants

Ryan MacDonald - Needham

Chad Bennett - Craig-Hallum

Matthew Kikkert - Stifel

Robert Coolbrith - Wells Fargo

Operator

Good afternoon, and convey you for attending today's Momentive Q4 2022 Earnings Call. My sanction is Jason, and I'll beryllium nan moderator for today's call. [Operator Instructions].

I would now for illustration to walk nan convention complete to your host, Gary Fuges, Vice President of Investor Relations.

Gary Fuges

Thank you. Good afternoon, and invited to Momentive Global's Fourth Quarter and Full Year 2022 Earnings Call. Joining maine connected nan telephone coming are Priyanka Carr, COO; Zander Lurie, CEO; and Rich Sullivan, CFO. After management's prepared remarks, we'll return your questions.

Prior to this call, we issued a property merchandise pinch our Q4 and afloat twelvemonth 2022 financial results, which tin beryllium recovered connected our Investor Relations website astatine investor.momentive.ai. During nan people of this call, guidance will make forward-looking statements, which are taxable to various risks and uncertainties, including statements relating to our strategy, including nan restructuring scheme we conscionable announced, financial outlook, investments, revenue, operating separator and free rate flow.

Actual results whitethorn disagree materially from nan results predicted, and reported results should not beryllium considered an denotation of early performance. A chat of nan risks and uncertainties related to our business is contained successful our filings pinch nan Securities and Exchange Commission, successful particular, successful nan conception entitled Risk Factors successful our quarterly and yearly reports, and we mention you to these filings.

Our chat coming will see non-GAAP financial measures unless different stated. These non-GAAP measures should beryllium considered successful summation to and not a substitute for aliases successful isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results whitethorn beryllium recovered successful our net release, which is furnished pinch our 8-K revenge coming pinch nan SEC and whitethorn besides beryllium recovered connected nan Investor Relations website. Finally, please statement that nan maturation rates cited successful today's prepared remarks are connected a year-over-year ground unless different noted.

With that, I'll now move nan telephone complete to Zander. Zander?

Zander Lurie

Thank you, Gary, and convey you each for joining america today. I'm going to locomotion you done immoderate of nan important changes to nan business we announced today, including a determination to trim nan size of our workforce and our continued effort to thrust profitable growth. Rich past will talk our Q4 financial results and outlook.

For Momentive, 2022 was each astir resilience. We began repositioning nan institution successful precocious February and ran nan business pinch much operating rigor successful nan look of a much challenging macroeconomic environment. We delivered meaningful operating leverage during nan year, culminating successful Q4 results that included 19% non-GAAP operating separator successful Q4 connected $122.4 cardinal successful revenue. Both metrics exceeded nan precocious extremity of our guidance ranges.

As portion of our repositioning, we streamlined our income statement successful October to make our customer acquisition and description motions much efficient. We judge this would beryllium capable to thief america some navigate a much challenging trading situation and execute our semipermanent extremity of delivering much profitable growth. However, it's go abundantly clear that we request to return much strategical actions to win successful 2023 and beyond.

After a thorough reappraisal of our business, we've concluded that our champion way guardant is to: one, further little our costs building crossed nan organization; two, attraction our resources connected nan products that win, clasp and grow pinch customers astir effectively; and three, standardize our astir important offerings onto our halfway level and 1 pricing model.

Our go-forward scheme includes nan following: reducing our workforce by astir 14%, which impacts each awesome functions of nan organization; shifting our customer acquisition merchandise attraction distant from GetFeedback and making SurveyMonkey Enterprise our CX solution for caller and description customers; transitioning our marketplace investigation sales-assisted products to a subscription model; and prioritizing free personification engagement and paid personification maturation successful self-serve by providing much features successful our free offering and much affordable options successful our paid plans. These are important changes, and we do not undertake them lightly. But these decisions are supported by information and customer feedback.

Since combining nan CX and SurveyMonkey Enterprise income teams successful early 2022, we validated that SurveyMonkey Enterprise is simply a very competitory offering for CX usage cases, pinch consistently stronger wide triumph rates and renewal rates than GetFeedback. Going forward, SurveyMonkey Enterprise will go our CX solution, and we scheme to build further functionality into our halfway study level to amended support CX customers, including leveraging immoderate of GetFeedback's strengths successful analytics and income unit integrations.

We scheme to support GetFeedback for existing customers arsenic we make this transition. Ultimately, we judge this will alteration america to thrust much description opportunities pinch SurveyMonkey Enterprise customers, our largest income assisted customer base, and let america to present much invention and customer worth done products tally connected a azygous halfway platform.

In marketplace research, we person delivered awesome products and won blue-chip logos, but we've sold these products chiefly connected a in installments basis, which makes customer engagement much project-oriented and rev rec little SaaS-like. We began rolling retired subscription-based products pinch nan successful motorboat of marque search successful 2021, demonstrating that nan subscription exemplary tin activity here. In Q3, we began piloting broader subscription-based selling, and successful Q4, we deed our stride. We closed complete 2 twelve subscription deals successful nan 4th fourth that would person been project-based engagements nether nan anterior model. And we doubled nan operation of subscription business successful marketplace investigation from astir 20% successful Q3 to much than 40% successful Q4.

We judge we now person nan correct trading impacting look to modulation marketplace investigation to subscriptions successful 2023. We judge this will consequence successful higher quality, much sustainable gross from our marketplace investigation solutions. And successful self-serve, our activity successful 2022 validates a getting backmost to nan basics of product-led maturation is nan measurement to afloat reinvigorate that channel. We made further advancement successful Q4, including driving sequential maturation successful free planned sign-ups, improving study deployment rates and improving conversion rates from responsible pricing and packaging. From here, we'll activity to amended our expertise to prosecute much users and seizure much worth from those who are consenting to salary for nan worth we deliver.

As we attraction connected these 3 priorities, we expect to grow margins further successful 2023. The changes to nan costs building we announced coming put america connected a way to double non-GAAP operating separator successful afloat twelvemonth 2023 versus afloat twelvemonth 2022. I return afloat work for nan decisions that led to today's announcement. In short, nan investments we've made complete nan past fewer years are not delivering returns capable to warrant nan cost. We judge nan changes we've announced coming are nan correct strategical steps to negociate nan business done a tougher short-term situation and position nan institution for much profitable maturation complete time.

2022 was a challenging year. nan Board, executive squad and I are incredibly grateful for nan dedication and difficult activity nan Momentive squad delivers for our customers and their colleagues. For those who are leaving us, we will do our champion to thief them win successful their adjacent steps. For those who are staying on, we are committed to partnering pinch you to triumph arsenic a team.

I'll now move nan telephone complete to Rich, who I want to formally invited to our executive team. I'm looking guardant to you getting to walk clip pinch him, and I americium assured you'll admit his spot arsenic our caller finance leader. He's a awesome summation to our culture, and he's already adding worth to really we tally nan business. Rich?

Rich Sullivan

Thanks, Andrew, and I'm excited to subordinate nan exceptional squad present astatine Momentive arsenic I'll beryllium moving pinch each of you. I besides look guardant to moving pinch nan group connected nan telephone coming and getting to cognize you each better.

As Andrew pointed out, we are making immoderate important changes to nan business. And while there's a batch of activity to do successful nan coming months, I judge nan steps we are taking coming champion position Momentive for sustainable semipermanent success. We continued to present worth connected products that pull and clasp loyal customers, arsenic evidenced by our beardown renewal rates. I judge we're making nan basal changes to these products and to our costs building to travel retired of these challenging times a stronger institution pinch a committedness to present profitable growth.

As stated successful today's property merchandise and 8-K, we announced plans to streamline our merchandise offerings that simplify our go-to-market strategy and amended operating margins going forward. Unfortunately, nan plans impact nan simplification of nan company's talented workforce by astir 200 individuals aliases 14%. We estimate that we will incur astir $7 cardinal to $9 cardinal successful charges related to worker severance and worker benefits successful relationship pinch today's announcement. We expect that nan mostly of these costs will beryllium incurred and paid during nan first 4th of 2023 and nan execution of nan plan, including rate payments will beryllium substantially complete by nan extremity of nan 2nd 4th of this year.

Turning now to nan afloat twelvemonth Q4 2022 financial results. Unless different noted, each comparisons are year-over-year. For afloat twelvemonth 2022, gross accrued 8% to $481 million. On a changeless rate basis, gross accrued astir 9%. The sales-assisted transmission gross accrued 27% to $181 cardinal and self-service gross to $300 cardinal successful nan year, fundamentally flat. In 2022 we generated 7.9% non-GAAP operating margin, which exceeded nan precocious extremity of nan guidance scope of 6% to 7% nan institution initially provided successful May of 2022.

Free rate travel was $0.2 cardinal and reflects nan effect of astir $33 cardinal of restructuring and deal-related rate outlays. As Zander pointed out, 2022 was a challenging year. some because of nan up income woody and expanding and an progressively difficult macro environment. Many of our customers haven't been portion of cost-cutting initiatives astatine their ain company, particularly successful nan taxation sector. Budgets are much constricted and imaginable caller customers are putting each woody nether greater scrutiny. This is intelligibly having an effect connected our expertise to turn caller customer contracts.

In nan end, overmuch of nan investments we made to aggressively standard and turn nan apical statement done income to caller customers did not output nan desired return and has led to galore of nan changes to our costs building we announced earlier today.

In nan 4th quarter, arsenic expected, we saw a continuation of nan challenging trading situation particularly internationally. Q4 full gross accrued 4% to $122.4 million, putting america supra nan precocious extremity of our guidance range. On a changeless rate basis, gross accrued astir 7%. U.S. gross accrued 8% to $81 cardinal and now accounts for astir 2/3 of full revenue. Rest of world declined 2%, chiefly owed to overseas speech and further challenging macro situation headwinds.

Self-service gross declined 6% to $73.1 million. As Zander mentioned, we proceed to make advancement successful reinvigorating this transmission successful Q4, arsenic evidenced by sequential maturation successful free scheme sign-ups, improving study deployments and improved free-to-pay conversion rate. While gross for our sales-assisted transmission accrued 27 -- while gross for our sales-assisted transmission accrued 23% to $49.3 million, we saw a continuation of a challenging trading environment. Existing customers, while not immune to economical issues, proceed to beryllium resilient arsenic renewal rates and description occurrence for our subscription products accrued year-over-year. We ended nan 4th pinch astir 14,500 sales-assisted customers, up 23%.

Excluding squad customers, mean gross per waste of assisted customers was up 13% year-over-year. And much than 2,200 customers are spending $25,000 much pinch america annually, up 16%. Deferred gross accrued 3% to astir $207 million. Remaining capacity obligations, aliases RPO, which is nan sum of deferred gross and backlog, roseate 5% to $239 million, partially driven by continued traction successful winning multiyear customer commitments.

Turning to profitability. Non-GAAP gross separator was 85%, a grounds level and 138 ground points summation from a twelvemonth agone today. Non-GAAP operating separator of 18.8% exceeded nan precocious extremity of our 14% to 16% guidance scope owed to nan antecedently mentioned gross separator strength, continued operational rigor and nan measures we began taking successful October to little income and trading disbursal and streamline our go-to-market motion. All operating expenses improved sequentially and year-over-year connected some a dollar ground and arsenic a percent of revenue.

Q4 operating separator benefited from prize accrual reversals. Note that nan afloat effect of nan reversal is expected and included successful nan Q4 guidance scope nan institution provided connected our past call. But it's important to support successful mind erstwhile comparing sequentially to Q1 2023 margin. Net rate provided operating activities -- sorry, nett rate provided by operating activities was $8.2 cardinal and free rate travel was $6.6 million, pinch a free rate travel separator of 5.4%. Excluding nan effect of $4.3 cardinal of restructuring-related expenses, Q4 free rate travel would person been astir $11 million. We ended nan twelvemonth pinch $18 cardinal successful nett rate and rate equivalents, which reflects nan effect of nan $83.5 cardinal of stock repurchases during nan year. Our outstanding authorization of our stock repurchase programme was $116.5 cardinal arsenic of December 31, 2022.

Turning to our outlook. For nan first 4th of 2023, we expect full year-over-year gross maturation to beryllium betwixt 0% and 2%. In Q1, we expect to proceed to spot nan effect of nan steps we took successful 2022 to trim walk resulting successful a Q1 non-GAAP operating separator guidance of 6% to 8%. Note that Q1 operating expenses are seasonally higher than Q4 owed to nan timing of employee-related accruals and taxes arsenic good arsenic trading spend, which is typically higher successful nan first half of nan year.

Based connected nan visibility owed to these challenging macro situation arsenic good arsenic imaginable short-term effect of nan strategical changes we made today, we will not beryllium providing afloat twelvemonth guidance. However, improving operating separator will stay a apical privilege successful 2023. And nan changes to nan costs building we announced coming put america connected a way to double non-GAAP operating separator connected a afloat twelvemonth basis.

Despite nan uncertainty and macro headwinds, we are committed to continued costs subject and controlling spending to present beardown afloat twelvemonth separator improvements, while still investing successful nan areas of nan business that will thrust profitable growth.

With that, I'll now move it backmost to Zander.

Zander Lurie

Thanks, Rich. I'll move it to nan usability and beryllium happy to return questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first mobility is from Ryan MacDonald pinch Needham.

Ryan MacDonald

Welcome, Rich. Great to person you on. Maybe Zander, conscionable starting out. As we deliberation astir nan outlook for 2023, I understand you're not providing guidance for nan afloat year. But possibly conscionable successful nan discourse of first quarter, tin you springiness america a consciousness of benignant of what those expectations are successful position of nan trajectory connected some income assisted versus self-serve?

And past successful that context, what whitethorn beryllium arsenic a portion of this modulation is creating capable variability wherever you don't person that benignant of visibility from a afloat twelvemonth perspective?

Zander Lurie

Well, I deliberation I'm inspired by nan merchandise marketplace fresh and nan restitution and joyousness our customers get from our products. So you could spot nan gross renewal rates, some successful nan web transmission arsenic good arsenic successful nan sales-assisted transmission are healthy.

Clearly nan caller situation for request connected nan web and successful income has deteriorated complete nan past year. And truthful I don't person agleam visibility connected erstwhile those caller cohorts of customers will travel backmost successful stronger numbers. I'll opportunity we're inspired by nan description efforts that our income squad has employed. And that's chiefly trading marketplace investigation and further SurveyMonkey Enterprise to existing customers. And truthful we spot really bully uptake there.

And connected nan web, we proceed to research pinch pricing packaging, arsenic I mentioned connected nan call, unveiling immoderate new, much affordable yearly plans. And really conscionable getting much users to effort our products and spot nan afloat worth of our features earlier asking them to pay. So we're employing a full bunch of different tests that we're excited about. I deliberation you will proceed to spot really patient renewal rates.

But look, nan existent situation and macroeconomic situation wherever you spot layoffs successful droves each day, peculiarly successful sectors wherever we person immoderate customer concentration, do coming headwinds. And frankly, it's conscionable not nan champion usage of our clip to supply visibility into Q3 and Q4 numbers correct now. We cognize what we request to do to win, and past we'll travel backmost each 4th and show you really we did.

Ryan MacDonald

Okay. And past arsenic you’re benignant of shifting attraction and benignant of deemphasizing immoderate offerings, emphasizing others, shifting to a caller pricing strategy, I guess, really is that being benignant of relayed to customers? And what’s nan consequence present that we benignant of person to spell done immoderate churn arsenic you benignant of displacement to caller pricing models and to new, I guess, branding models connected immoderate of these products here?

Zander Lurie

Yes. I mean there’s ever nan consequence of churn erstwhile you person either merchandise changes, business exemplary changes, pricing changes. The extremity present is that CX has ever been a superior usage lawsuit of SurveyMonkey connected nan web and SurveyMonkey Enterprise.

And successful acquiring GetFeedback and building retired a caller merchandise offering, we were capable to pull a caller cohort of customers pinch a merchandise that person peculiar strength, and I’m proud of nan activity that squad did. But successful a world wherever we request to rationalize resources, thrust incremental profitability, we admit there’s rather a spot of overlap successful position of what those products offer.

And truthful what you’ll spot america do is conscionable dial down finance successful that arena. Renew those customers champion we tin while effort and pull them complete to our flagship SurveyMonkey Enterprise CX offering.

And past connected nan web, of course, we’re perpetually iterating. We’ve sewage a terrific maturation squad that is information science-driven and making judge nan caller features we connection caller plans, pricing, maximize some customer value, but besides bookings and gross for us. So I’ve sewage a batch of assurance successful this squad arsenic we some modulation products and besides pricing plans that we will beryllium some business exemplary focused arsenic good arsenic NPS focused.

Operator

Our adjacent mobility comes from Robert Coolbrith pinch Wells Fargo.

Robert Coolbrith

I wanted to inquire a small spot much astir nan determination to move distant from GetFeedback for CX. Maybe immoderate much discourse connected really ample nan GetFeedback business is today, nan size of nan book of business, possibly really accelerated it's been growing.

And if you could springiness america an update connected immoderate functional differences that stay successful nan products, surely for illustration Enterprise versus GetFeedback. And I conjecture conscionable pursuing connected nan past mobility here. Maybe conscionable springiness america a consciousness of your assurance successful your expertise to proceed to service those customer needs pinch SurveyMonkey Enterprise going forward.

Zander Lurie

Sure. Thanks, Robert. I'll footwear it off, and past I'll manus it complete to Pri. Yes, I deliberation we've said successful nan past that nan stand-alone CX represents little than 10% of our full book of business. As I mentioned before, SurveyMonkey Enterprise has a robust group of features for CX and besides a robust customer base.

And truthful I'm assured that nan folks who emotion GetFeedback will proceed to renew GetFeedback while we build that span and support that span for GetFeedback customers to locomotion complete to SurveyMonkey Enterprise. So nan squad is difficult astatine activity connected analytics capabilities, income unit integrations truthful that we tin present that customer delight crossed some merchandise suites and yet steer our investments into SurveyMonkey Enterprise. Pri, what do you want to adhd to that?

Priyanka Carr

No, I wholly work together pinch that. And I would conscionable adhd that we're transitioning nan GFP GetFeedback merchandise but not stepping distant from CX. As Zander mentioned, CX is adjacent to our apical usage lawsuit SurveyMonkey Enterprise and that halfway platform. We person customers presently utilizing it heavy for those CXs.

We person very, very beardown overlap connected nan capabilities pinch GetFeedback direct. So we're assured that we tin work those customers connected to our SME platform. Our merchandise invention roadworthy representation going forward, is really focused connected strengthening that CX usage lawsuit but connected our halfway platform. So that includes nan analytic capabilities, strengthening our integrations, making them much autochthonal and nan squad that built america each of those awesome GetFeedback capabilities is simply a squad that will beryllium supporting that activity going forward.

So I person precocious assurance that nan SurveyMonkey Enterprise products look to service nan CX usage lawsuit incredibly good and already decidedly today. And nan investments we're making and streamlining into a halfway level will let america to present moreover much worth to those customers.

Operator

Our adjacent mobility comes from Chad Bennett pinch Craig-Hallum.

Chad Bennett

So conscionable want to excavation successful a small spot connected nan self-serve side. You talked astir seeing benignant of greenish shoots location successful position of free scheme sign-ups expanding sequentially. And I deliberation you indicated increases successful conversion rates.

We besides benignant of caught, and I conscionable want you to corroborate this, that I deliberation connected nan Advantage plan, you implemented a beautiful decent value summation connected that scheme successful nan quarter. Just trying to get a consciousness for, obviously, that business accelerated downward connected a year-over-year ground successful nan 4th quarter. Do you person capable data? Do you person capable assurance wherever nan complaint of diminution improves passim nan year? Or really should we deliberation astir that?

Zander Lurie

Yes. I mean we are engaged making a batch of changes to stabilize that business. And I americium assured that we person arrested nan fall. Clearly, we did not spot nan benignant of uptick successful Q3 and Q4 that we had modeled successful and hoped. And truthful we're taking due actions.

And whether they beryllium our ain business exemplary decisions aliases macroeconomic, it doesn't overmuch matter. I deliberation nan squad has sewage a hit connected what we request to do and we've deployed immoderate of those initiatives. As I mentioned, this doesn't hap overnight. A batch of nan activity we do, whether it's successful SEO aliases successful merchandise aliases successful pricing and packaging, there's a chimney from a personification coming to surveymonkey.com, nan first clip betwixt that time and erstwhile she yet pays for a plan.

So we thrust immoderate things past twelvemonth that didn't present nan benignant of occurrence we hoped. I deliberation we've made a batch of progress, and we will do our champion to present results this twelvemonth that show Q4 was beneath mark. Pri, thing you want to add?

Priyanka Carr

Just specificity connected nan -- you're correct, we did do a value summation connected our Advantage customers, our existing ones, and that rolls into affirmative effect connected nan renewal guidelines arsenic they renewed passim this twelvemonth and 2023.

The greenish shoots that springiness america assurance are nan ones Zander mentioned earlier, our free scheme sign-ups are increasing positively successful nan U.S. deployment rates. So those users sending surveys besides grew 1 of nan strongest parameter of upcoming conversions.

And we've taken actions to optimize nan conversion rates arsenic good connected that business. So a batch of affirmative indicators that springiness america assurance that we person a bully trajectory forward. But besides astir importantly, proceed testing and optimization successful a challenging macroeconomic situation to make judge that we're pricing affordably to worth and getting entree to astir customers passim this year.

Chad Bennett

So you haven't seen immoderate benignant of incremental aliases outsized antagonistic gross churn effect from nan value summation connected nan Advantage scheme is what I'm getting. Is that nan correct take?

Priyanka Carr

We do spot immoderate churn increase. Sorry, spell ahead.

Zander Lurie

You've sewage it, Pri.

Priyanka Carr

I was conscionable saying, location will beryllium ever optimal value summation pinch nan churn effect connected it. And truthful immoderate value summation does effect churn to immoderate extent, but this is nan presumption of our customers. And nan nett effect done our testing is nett affirmative connected bookings.

Chad Bennett

Perfect. Okay, sewage it. And past possibly 1 explanation for maine astatine least, could beryllium for Rich aliases Zander. Just connected nan sales-assisted customer count, I conscionable want to make judge I heard it right. Is it 14,500?

Zander Lurie

That's correct. Yes.

Chad Bennett

Okay. And that's comparable to 15,400 past 4th aliases not?

Zander Lurie

That's correct.

Chad Bennett

Okay, each right. And past conscionable existent quick, possibly past 1 for maine connected nan income -- aliases sorry, yes, nan sales-assisted broadside of nan business. I conjecture -- did you announcement thing successful nan 4th from a bookings aliases billings standpoint? I deliberation you hinted towards world being tougher. But were -- did you really see, sorry, much scrutiny aliases pushouts aliases elongation of income cycles successful nan 4th fourth connected that broadside of nan business?

Zander Lurie

For sure. Yes. I mean, harder 4th each around. I deliberation you spot immoderate of nan customer churn connected nan sales-assisted broadside of nan location was evidently astatine nan little end, little value points because you saw that our wide benignant of mean gross per customer was up nicely year-over-year.

But nan astir delicate endeavor customers had higher churn successful nan quarter. And income cycles connected caller customers are conscionable much challenging. You person folks that person much scrutiny connected your budgets, you person buyers that were laid disconnected and conscionable a much difficult trading situation and new.

Operator

Our past mobility comes from Parker Lane pinch Stifel.

Matthew Kikkert

This is Matthew Kikkert connected for Parker. First off, benignant of connected operating leverage for fiscal '23 arsenic you're looking to summation leverage there. Are location immoderate different areas that you're looking to trim costs this twelvemonth extracurricular of nan restructuring scheme that you announced today?

Rich Sullivan

I admit nan question. I deliberation nan -- we person nan -- we person aggregate paths present to get to that operating separator complaint for 2023. As Zander pointed out, it's a challenging macro situation to predict. But what we do power is cost.

And truthful we person -- I judge we person galore levers to propulsion to make judge that we tin stay connected nan way to double that operating separator successful 2023. We'll proceed to show nan marketplace and set accordingly. But connected nan costs side, driven by a batch of nan changes we made today, we're connected nan way to person double separator year-over-year.

Matthew Kikkert

Okay, sewage it. And past arsenic you're transitioning -- focusing much connected nan enterprises and nan income motions there. What -- for illustration high-level investments are you still making successful nan self-service channel?

Zander Lurie

Pri, do you want to return that?

Priyanka Carr

Yes. In nan self-service channel, we proceed to put successful features connected our merchandise capabilities location that really amended usability of nan product, covering of usage cases that are communal for our self-serve, smaller customers aliases smaller teams and discoverability.

A batch of our activity arsenic well, arsenic we've alluded to before, is really optimizing nan worth we present to customers, really easy we tin -- they tin entree that worth and nan pricing that goes on pinch it. So we person a awesome maturation team, a information subject squad by perpetually optimizing that pinch a alteration successful macroeconomic environment. So you should expect to spot a batch of changes connected that passim nan people of nan twelvemonth that we support delivering on.

We're besides building capabilities into nan merchandise that make it easier pinch AI for users to get to nan worth moment. So being capable to nonstop a study and person responses and get insights from that. Those capabilities widen some to our self-serve products and our endeavor capabilities and our endeavor products arsenic well.

So continued finance successful this area, particularly arsenic it is simply a really important theatre of our sales-assisted endeavor businesses and strictly linked to nan products that we waste connected nan income circumstantial side.

Operator

And our last mobility is from Robert Coolbrith pinch Wells Fargo.

Robert Coolbrith

I conscionable want to inquire a mates of follow-ups. First connected nan sales-assisted customer count. Could you punctual america nan effect from nan SMB income unit rationalization and benignant of definitional alteration versus integrated trends there?

And past 1 thing, I deliberation past quarter, you pointed retired that successful position of caller business whitethorn beryllium a small focused upmarket. I deliberation that nan macro mightiness thrust immoderate accrued churn among immoderate of your larger competitors' customers. Just wondering if you tin springiness america a consciousness of thing you're seeing successful nan marketplace there, if that thesis is playing retired truthful far? So those two.

Zander Lurie

Yes. So connected nan sales-assisted side, our customer count was down astir 900 customers, Q4 complete Q3. And that, arsenic I mentioned, was mostly concentrated successful nan SMB area. So little spending customers.

And past connected nan caller trading environment, arsenic I mentioned, I would opportunity that nan immense mostly of our investment, clip people, energy, trading demand, for nan past respective years was focused connected winning caller business. And that has won dramatically towards renewing and upselling existing customers, 14,500 customers wherever we person a relationship, we person a contract, we're delivering value. They're seeing nan use of our deployment.

And truthful for each azygous 1 of those customers, location is much business to triumph and much worth to deliver. And nan ROI is conscionable a batch amended location than successful nan caller area. We are competing for customers who are churning retired immoderate of our much costly competitors. We are winning there.

Now nan numbers won't overcompensate for losing immoderate of nan smaller SMB customers we have, truthful it will beryllium difficult to deduce those wins there. But we're seeing folks rotation disconnected of immoderate of our much costly competitors who are looking for an offering, and we present awesome worth location connected america to make judge that our trading and trading teams get successful beforehand of those opportunities.

We'll support you posted connected advancement we have, delivering merchandise marketplace fit, upselling. You saw that our 25,000 customers was astir level aliases down possibly 2 dozen, to nan tune of 2,200 successful Q4. And obviously, those are nan customers that are buying bigger deployments, buying aggregate products and ones that are getting nan disproportionate stock of our attention.

Robert Coolbrith

Great. Thanks again.

Zander Lurie

Well, I want to convey everybody for joining america today. We judge we're taking nan correct steps to navigate what is simply a beautiful choppy short-term situation and position nan institution for much profitable maturation complete time. And erstwhile again, I conscionable want to nonstop my heartfelt appreciation to nan Momentive squad for each their dedication, folks who are staying pinch america and folks who are departing arsenic well. I want to wish you each a happy and patient evening, and we look guardant to [indiscernible] soon.

Operator

That concludes nan convention call. Thank you for your participation. You whitethorn now disconnect your lines.