Intapp, Inc. (INTA) Earnings Call Transcript & Summary

My name is Koji Ikeda. I'm one of the senior analysts on the enterprise software team at BofA. Absolutely thrilled to have Steve Robertson from Intapp to join us today for a fireside chat.

Thank you.

I have a bunch of questions. I'll ask you, but I do want to open up the floor to questions from the audience, if you have any.

But to get started, I guess, Steve, tell us a little bit about yourself. What does Intapp do? I guess what -- how is Intapp positioned to capitalize on your end market?

Yes. So Intapp has a unique platform that's purpose-built for professionals, both financial professionals and lawyers and consultants and accountants to do their work, to succeed, to go to market, to execute their business profitably, to do some other things that other platforms don't even address like risk management and compliance. And we've been building this business for 20 years. I've been there 6.5 as CFO and have developed something we think is unique and that nobody else has in the marketplace.

Thank you. Thank you. So I've been asking every company 3 questions across the board, trying to figure out, within this offer space, how people are thinking about these 3 things: macro, hiring, compensation. So on the macro front, ongoing war, Russia, Ukraine, European macro, China slowdown, rising inflation, interest rates, all that kind of risk going on, risks of recession. Are there any impacts that you're seeing today? I mean how do you think about all these different risks with the business with Intapp, professional services, financial services? I guess tell me a little bit about those types of risks impacting the growth of Intapp.

Sure, sure. And we certainly think about them, we talk about them internally. I think that our business is -- and our client base are pretty resilient to a lot of these risks. And we have been through a couple of cycles of recession. John Hall, who's not here today, took the business through the 2008, '09, '10 recession, and we grew straight through that. In fact, he took the opportunity at that time to convert the perpetual on-premises business to subscription license, which we have today, because we were strong enough to do that at that time. I think that our clients make money in up cycles and down cycles. We find that some of the professionals when -- if the deal-making activity slows down a little bit, some of the layers turn to other kinds of deals. They'll do bankruptcies or, if that's what it comes to. We have a lot of private capital markets clients. They've got a lot of dry powder, and they'll continue to do deals. I mean the pace of those deals might slow a little bit, but they'll still be there. As far as the macro conditions, we see inflation, certainly. There's a little bit of a positive there for us. We have an annual CPI-type increase on our renewals. We have very high renewal rates. We're looking to actually move those up a little bit, and I think the receptivity is going to be strong in our client base for that. We did have some compensation, employee cost pressure. It's obviously been tough to hire in these markets in the last year or so. But actually, we're doing quite well in hiring and on retention. And being public has helped us. We've had some salespeople from competitors come over. We've had some good talent because they see us winning in the market. They see us as a public company. They look at our prospects, and we've been able to bring them over. And frankly, to the extent that some companies struggle here a little bit in this environment, we may find some opportunities to pick up additional people. So this is working out fine for us at the moment.

I wanted to dig in that comment on the hiring the you just...

Yes. Sure.

So we have some companies here that are mega cap. We have mid-cap names like yourself. And it seems like for you guys being public, that's been a big beneficiary for you. Salespeople or employees that are looking at other opportunities can look at your financials and figure it out, your growth prospects, et cetera. Do you feel that you've started to become like a destination for other employees at other smaller privates or maybe they're looking for something a little bit more stable out there?

Yes. I mean I wouldn't want to overstress it. We're not a behemoth and a lot of big well-known names that we do compete with and we lose to from time to time, obviously. But yes, I do think both are -- the publicity we got from our IPO, the business we're in and our growth trajectory, and yes, the consistency and stability of our business, as you know, we've been running this business cash flow positive since it was founded. It's in the culture. We have a long runway here for the next few years of growth in our markets. We believe, a big company we can build here. And I think that comes through to people. They hear that story to these tenants looking for a little more stability, they'll find it here. We've got bonus structures where we have set targets, and we beat them. We pay our bonuses, and we tell people that, and they see that, and they hear that. And it's a good place to work, actually. So I think this might be a kind of cycle where people come back to us a little bit.

Got it. Got it. Last question kind of on the 3 questions I'm asking everyone is compensation structure. Stock-based comp versus cash, kind of the mix there. How are you guys thinking about that? You have the ability to shift to cash or more stock compensation? Or how do you think about compensation structure kind of here given all the volatility in the market?

Yes. Well, we -- so we thought about that pretty carefully before we went public. And certainly, we made some IPO-related grants, as many people do, and those will wash through our system. But we did -- we moved away from stock options to RSUs. And we have a sort of a balanced comp plan of salary, bonuses that are paid on a series of metrics of revenue and profitability that we set each year. And then we have RSUs we grant now, and we have a bit of a refresh program for some of the employees as well going forward. So we think the balance is pretty good. And we don't think we need to make -- do anything particularly different in this moment to change our comp structure because we're being able to hire fairly well and retain fairly well. There's a little pressure on salary. We've debated that internally. Right now in this market, I'm not so sure that we need to do that. And so we might not do that. As you may know -- as you know, our fiscal year-end is June 30, so we're right in the middle of finalizing some decisions for our go-forward fiscal year. So it feels pretty balanced. I don't think we're going to change it much. It will be kind of the way we've been modeling it so far.

Okay, okay. Yes. So Intapp, vertical software, attacking the professional services, financial services end markets. Industries all over the world are trying to automate, trying to get more efficient. So could you tell us -- or maybe talk a little bit about how Intapp helps your end markets, the professional services and the financial services, bridge the gap between automation and kind of the workflows of the past?

Yes. Well, our clients are moving firmly now to the cloud. And as you know, in the past, we were on-premises because 10 or 20 years ago, there were plenty of reasons why a number of our clients didn't want to be on-premise, regulatory reasons and otherwise. But I think people basically have thrown in the towel on that. They are all in. It's just a question of timing and how to pull it off in terms of execution. So as you know, we're selling all new business in the cloud, and that's all cross-sell and upsell renewal-type business and new logo business. It's all cloud. When we are migrating our on-premises customers carefully and slowly at the rate at which our clients want to go because these are long-term clients we've had for many years, and we're not going to push them. But when they're ready and when they want to buy some new cloud products, we tend to use that opportunity to help migrate the existing products they have that are on-premise. And so they all need automation. There's productivity for the firm internally. There's connecting all of their disparate data and their global organization with each other, so they all understand what it is. And then marrying that with external data that we help bring in to the firm so they can go to market and win business and execute most profitably as they can and do the right risk management in terms of conflicts checking and so on.

So you mentioned Intapp has been around for a long time, and there's been a little bit of pushback, I guess, from your customers about going to the cloud. But that seems to be gone. If you could maybe categorize a time frame or some sort of catalyst that happened in the end market where now they're okay with being in the cloud. Is there 2017, '18 or some sort of industry regulation that happened? I mean help me understand why they're more accepting of the cloud.

Yes. I think that when we started in the legal business, and there were some regulatory issues, some of the legal clients, the clients of the law firms themselves didn't want their data information to be in the cloud. And they got comfortable with that over time. And as we've chopped through some of those issues, the GDPR issues in Europe and just the fact that security has just proven to be better now in the cloud, whereas there was a view years ago, that wasn't necessarily the case. So I think those hurdles are more or less gone for our marketplace. And then, of course, COVID actually was helpful. I mean I think a number of firms who might have been hesitant realized that if everyone's going to work from home, the technology solutions that their employees and managers and partners use need to be first class. And on a relative basis, investing in yet another beautiful office in a downtown city to bring your clients into versus investing in technology that supports all the people who are driving your business was probably not the right trade-off going forward. So I think we're freeing up some money in budgets and some understanding that this is the way it has to be now going forward.

That makes a lot of sense. Next question, platform versus best-of-breed, basket and best-of-breed solutions. You guys have a platform. You have the same platform available in one place for professional services, DealCloud for the financial services. How does the end market view kind of this debate of platform versus a basket of point solutions? Are they ready for a platform? Is this a conversation that you have to convince them to buy a platform? Or how do we think about this platform story versus this basket?

Yes, no. I think it is increasingly compelling. We have 3 base success of competitors when we go into a client. We have in-house-built stuff that's been there a long time and is getting increasingly unwieldy and expensive to maintain. And folks are raising their hands, and we got to buy something commercial to help us be more efficient. So that's one of the places where we get in and win business. We do have some well-known third-party software providers like Salesforce and others who we compete with on a completely different basis where often, they've -- a firm has tried Salesforce, for example, and it just hasn't worked out. They haven't had the adoption they need. And they see our solutions, and say, this makes sense for us. It's built for us. You understand us and what we do every day for a living. And our data architecture is completely different at the core, and that just distinguishes us. We've set up a industry graph database to provide many-to-many relationships and model those for the firm. And that's how they go to market because most professional firms don't have a sales force with quotas and pipelines that they track necessarily. So -- but to your question, the third set of competitor are the point solutions. And they've been around for a long time, and they exist in each part of our platform. They're typically smaller firms that were founded by consultants. And they may have something that works for one part of the solution, but increasingly, our clients would like to buy a platform. They like to reduce the number of applications that they buy and support. They want to reduce the number of integrations they got to keep maintained internally. And so our platform offers a much simpler experience, is an easier connectivity, which, in turn, leverages the information and the relationships that all the people at the firm have so they can get better use of them when they go to market.

Yes, yes. I want to make sure I got this right, so I'm going to read this off here for my notes. You guys won some awards, Best Fundraising Technology and Best Deal Origination Technology at the 2022 Private Equity European Awards. (sic) [ Private Equity Wire European Awards ] Congratulations.

Thank you.

What is it about the Intapp technology that resonates so well with your end markets?

Well, I think that, as I said, we have domain experts that know the space extremely well. We've worked directly with professionals. We have a number of former professionals in our company who know how people work. And it's just -- and that's reflected in how we design and engineer and deliver our products and solutions. And so when people see DealCloud or some of the other products, they immediately say, ah, these guys understand what I do, how I want to do it. The language is correct and the tabs, the drop-down. And it's so much different than a horizontal firm that sort of tried to now rebrand itself into a new vertical and not quite understand what they're doing there. And I just think it's just -- sometimes you have to see the demo to understand it, but people immediately -- there's an aha, I think, when they see our products and solutions. That's what distinguishes us.

How much time to value is saved going from either replatforming to a horizontal solution, like the horizontal CRM vendors out there, or just going with Intapp? I mean are you talking 50% time savings, 100% time savings? I mean I think of enterprise implementations and deployment somewhere anywhere between 9 to 12 months. I mean are you going much faster than that? Do you see that value faster? Is that a key benefit of adopting Intapp?

It can be. I mean yes. And I think, particularly for maybe a small to midsized firm that's focused on what they're doing, that clearly is a time to value. Not only in the initial implementation, though, but in subsequent needs to tweak or configure, it's much easier and quicker for us. Now I will say, I mean, if we do have a large client that's been on-premise with in-house stuff for a long time, that implementation could be 6 to 9 months, too, because we've got to help them unpack what they've been doing previously and map it appropriately to our new solutions. So it's not the biggest benefit in that case.

Okay, okay. Maybe a question on the technology differentiation. I get the commentary on the value proposition, but maybe help us understand from the Intapp platform perspective, is there kind of the key beachhead product where you have that aha moment when the users are coming in to see the product? And is there some sort of functionality or something very specific about the technology? Maybe give us one from each category, financial services and professional services, that gives you that aha moment from the users.

Well, I think if I'm hearing you right with the question, I think we often land most effectively and often, for example, in financial services with the deal management solution that DealCloud originally implemented that we have expanded upon. And that is a key function that financial professionals, private equity folks, investment banks, others are using every day, every Monday morning meeting, and it resonates very strongly with the people who are making it happen in that business. On the professional services side, I would probably pick our risk and compliance suite, our intake in conflicts checking, where often for law firms who have grown up in an environment of, can I do business with this client and do I e-mail back and forth with my general counsel, and does anybody know. And you can sit on your phone and punch it up and get the answer here with the Intapp solution, and that's just really one of the many things that resonates about our risk compliance solution. So...

Is there a component of the changing demographics of the professional industry where a lot of these legacy solutions have legacy workflows, and frankly, probably frustrating in the way things work? And for employers out there to have good employee experiences, efficiency, automation, all these things that people are asking for, does Intapp help create better professional service in financial firms that are able to offer their employees better experience? Is that something that people think about?

No. It's a great point. It really is true. We don't actually talk a whole lot about that. But talent acquisition -- the war for talent in these firms is really important. And every year, there's a cycling -- younger and younger professionals are becoming partners and leaders of these firms, and they're just used to a level of technology to aid them in their work that they expect. And so the bar gets raised, I think, regularly in these firms. And that benefits us because we're providing, we think, the best technology that we can to help these professionals get their job done best. And it's important, I think. And people, they move. They move from firm to firm regularly. They even move from vertical to vertical. We have general counsels who have gone from a law firm to an investment bank, and they want to bring Intapp with them sometimes. That's what we get a little word of mouth often with our client base.

Do you feel like -- it sounds like what you're talking about right there is a little bit of a brand flywheel effect going on in the end market.

A little bit, yes.

Do you feel like the brand awareness, either -- well, let's talk about it from the point of the IPO. What was the brand awareness like pre-IPO, post IPO? And how do you feel like that whole flywheel effect is kind of working right now?

Well, I think we feel the brand was fairly well established in parts of our business before the IPO, for sure, because we've had very good growth here for a long time. But I -- we do think that the IPO was helpful. And in part, the professionals that we serve in our various verticals they are the deal ecosystem for the marketplace, actually. And they all talk. And here, we were doing an IPO with all of those same professionals and they all have their own stories about when they might have worked to the firm like that or had the problems that we help solve. And so that was a helpful kind of flywheel, to use your word, for us coming out of the deal. And we are regularly mixing -- we'll have an investor meeting, and we'll also -- there's someone else in the firm who wants to talk to us about our product. So we're happy to encourage both.

Great. Great. I wanted to ask you a question about TAM. So we field a lot of questions about your business, and a lot of the common questions we get is about the TAM. So maybe could you help us understand how you think about the TAM, how you think about the opportunity in the professional services side and the financial services side. And where I'm going with this is one of the things I remember during the IPO process was I think on the tombstone, it was 900 investment banks that you power. And my first thought was, I didn't know there was 900 -- that many out there. So how do you guys think about the TAM? Clearly, you see -- you have a lot more visibility than we do. So any sort of color there?

Yes, no. It's funny I had the same reaction. I was a former investment banker, too, and I wouldn't have said there were 900 investment banks. I think that the definitions of our DealCloud team are fine, but I think a lot of those are smaller boutique advisory firms, which need -- which have the same work patterns that make sense for our product suite. So that's why they're included there. Look, we think -- we did some work on this. We think there are 60,000 firms out there in our 5 sub verticals. And there are thousands and thousands, for example, of private equity firms. And we've sold a lot of them because that was the initial strength of the DealCloud business. There are thousands of boutique advisory firms that we could call lesser banks or call something else. And there are a variety of other types of financial services businesses, not household names like BofA Merrill, but they're out there. They have money. They're doing business. It's a broad and deep sort of ecology of those firms. And the same is true really on the professional services side, albeit fewer firms to a degree. But I mean we have 1,000 law firms that we -- are in our top category at Intapp that we call on and talk to and many, many others in a tail distribution beyond those as well as our accounting and consulting clients. I mean each of the big 4 accounting firms has as many professionals as the entire legal industry. And so we account those as one client each. But really, they're spread out with country -- all over the world with country divisions and other practices. So it's a lot of firms. We've landed at some and not fully penetrated most. And we just see a lot of upside potential there in that set of client base.

When prospects are coming to you, is there some sort of common pain point that they all have, whether it's technology -- moving to the cloud, some sort of technology gap? Or what are you hearing most from the customers when you're talking with them about, oh, I got all this legacy technical debt that I got to figure out what to do with it. I mean is there some sort of common pain point that they're all coming to you for help?

Well, a lot of times, it's -- yes. We're ready to go to the cloud. That's a pain point. We've got an old on-premises solution that is just -- the world has passed it by. And maybe our employees are complaining about it too much, and it's time to do something different. The other would be, we just don't -- we need a full, complete view in our firm of our own client base. And we can't connect all the data in our firm very well because our systems are all kind of fragmented in a point solution. We haven't knitted it together. So we're a big law from, and we're trying to figure out this large financial services client, what is our whole relationship? We're really struggling to do that. Or we're now being brought into RFPs regularly, and we want to bring our best people who have the best relationships with people we're pitching to, and we can't figure that out very quickly. And if we have your solution, we know we can get that right away. So that's -- those are some of the pain points we see.

Okay, okay, okay. And I think you touched upon this a little bit previously in some of your comments, but I just wanted to make sure we fully understand kind of the key levers for growth. Is there, for each side of the business, professional services and financial services, the key land product? I think you mentioned it was risk management, that was one.

The risk solution, yes, which is 3 or 4 modules, intake conflicts or ethical walls, which is kind of a market standard in terms of business. And the DealCloud and deal management systems. Financial services is typically where we lead, yes.

Okay, okay, okay. So you have a big expand opportunity. You've been talking about it for a while. I wanted to kind of dig into that a little bit. You mentioned the top 100 clients could have $1 billion of upsell. Walk us through a little bit of that. That's a pretty big number out there, I mean, much bigger than the revenue base that you have now, so it implies a whole bunch of white space within these companies. Why is there so much white space with these companies? How do you plan on attacking this kind of big upsell opportunity?

Yes. Well, so we -- that's our top 100 existing clients. And we -- look, for our largest -- for example, for our largest professional services clients, we have sold on average sort of a little more than 3 of the 11 modules we have that comprise the 4 solutions that are the platform. And so the penetration is not -- we've got a long way to go there. And there's a lot of value in all of that upsell and that we haven't necessarily sold all the users in those firms either. So there's -- that's the cross-sell of the capability. There's the upsell of the users. In financial services, it's less because we've been at it a little bit less amount of time. So it's probably more like 2 of the 11 modules. So we feel like we've landed in a lot of places, but for our largest clients, there's a tremendous -- and I don't know if we sold them all. We've sold the whole platform a number of times, and we understand what that value is, and people have paid us for it. And so we just think there's a lot of run room here to capture that. Those will be the top -- those are some of the biggest firms in the world, certainly, those top 100. But there's a lot of room there, and that's just existing clients is the point.

Has there been any change maybe in the last 12 to 18 months kind of leading into the IPO, past IPO in the size of lands that you're having or maybe the number of products that are being adopted at the initial time of sale? Is that beginning to change a little bit? Are the conversations becoming maybe a little bit bigger or wider with the new organization? Or is it still kind of starting business-unit-to-business-unit kind of mix bag of opportunity there?

Well, I think -- I don't think we have numbers that we can share right now about actual sizes there, but I do think that -- we believe that the conversation has been uplifted a fair amount from what was previously maybe a business unit conversation about one of the solutions to the broader platform conversation. So it's sort of more of a top-down conversation. We -- as I think you know, we hired a head of sales 2 or 3 years ago -- a couple of years ago, I guess, from SAP. And he's brought in a world-class enterprise sales function. And we are actually getting access to and talking more and more at the top of the house of these firms about the entire platform value proposition, which then might be implemented sequentially. But the starting conversation is at the top of the house, not with a functional leader at a firm as often.

Okay, okay. Got it. I wanted to make sure if there's any questions from the audience. Feel free to answer -- ask any questions. Steve? Is there a microphone? I can repeat the question, too.

Yes. [indiscernible]

Okay, so for the transcript, the question was about the DealCloud and the competitive landscape.

Yes. Well, we win a lot of our heads-up competition. I think the one that we probably should talk about and we get asked about is the Salesforce competitor, which from time to time is where we're competing and where we do win our share. And I think we believe we do that because our solution really is designed specifically for those professionals. It's not trying -- it's not been ported in from another original vector, which I think is the case there. And we've architected it at the core differently on purpose. And that -- what we find is that sometimes our -- the clients who are asking for our -- us to bake off, if you will, against, Salesforce, they haven't had very good adoption. And they just -- they've spend a lot of money and time on it already and they want to try something else. And the professionals see our solution and say, ah, that's something we want to use. So that's a part of the competition. We also went into some other of the big horizontal players from time to time. We see Microsoft Dynamics once in a while. And then there's a couple of point solution competitors, but they're really not all that much of a focus for us, candidly. Once in a while, here and there in parts of the business.

Other questions? All right, I got one for you. You mentioned Microsoft. That's going to be my next question. You have a Microsoft strategic alliance.

Yes.

I believe it's for document for corporate legal solutions. I guess could you talk about that a little bit? Where did that come from? How did that -- what was the genesis of that partnership? What does that mean for the business?

Yes. So the Microsoft partnership -- so as the CFO, I'm going to -- we're not talking about specific numbers that I can tell you that ring. Although I will -- I do believe, and we do think there's some really interesting upside over time from this strategic relationship. It's really what we've done. And there's a few flavors to it. First, much of our client base is very heavily invested in Microsoft already. And the CIOs and CTOs and the folks internally who are working with applications and software are happy to have us in there partner with Microsoft because some of what we're going to do is help them make some of what they already have work better and integrate better with our own products. We're also working on some things we might do together will be new and different and pretty interesting. So that's one. We have an ability to go to market with Microsoft over time to try to help sell our products and solutions, and to some degree, vice versa. We're going to move over time our entire cloud hosting to Azure. And we currently do both AWS and Azure. And I think that's helpful, too, because this is -- again, this is -- these are Microsoft environments that we're -- our clients typically are working in. And that will be efficient over time and give us some benefits. So -- and the last is we bought this company a year ago in Belfast that has made a business of helping make Microsoft 365 and Teams environments work better for their client base. And we're working with those colleagues now, quite directly to help see what else we can do to increase that opportunity. So -- and it should help the migration to the cloud over time. We're not going to forecast that specifically now, but that's clearly going to be helpful. We're seeing that momentum.

Okay. And I guess kind of expanding the conversation on the partner channel. I saw that you guys announced a big partnership with KPMG. So how do we think about that specific relationship? What does it mean for digital transformations for professional services and financial services firms? And more broadly, how do we think about the partner strategy with the other big GSIs out there?

Yes. So the KPMG partnership is also a strategic one over time for us. I think that -- I think we have a DealCloud relationship with those guys in the U.K., and they were part of this company again that we have bought in Belfast. They had been a client there. And I think -- I'm not sure that I would forecast we're going to do lots more of that, I think you said, SIs, right? But clearly, we have our own partner ecosystem now that we work with quite closely. But we might expand it over time. And certainly, KPMG works with Microsoft and can help our clients and us find the most efficient ways to move people to the cloud and get the most benefit from their solutions they've already bought. So we look forward to some ways to do that with them.

Okay, okay. And then international strategy. I know you guys are out there in the international markets. How should we be thinking about that strategy there? Are you pressing more on the pedal internationally, partner strategy as you go to market? Any sort of color on international?

Well, we're 30% international now, and that's been fairly consistent. And I think that business will grow at the same way as our overall business. So we will continue to grow internationally. I'm not sure it's going to go a lot faster or slower. We're in a number of the big money center cities of the world, as you would expect, given our client base. And a number of them are certainly the English-speaking countries to some degree and in the U.K. -- London and the U.K. But we are expanding in Continental Europe and in Scandinavia. We're doing more business now selectively in the Middle East. We've been in Australia and Singapore for a while. We're expanding to some other parts of Asia. So I see that as a good part of the growth vector for the business but in line with our overall growth strategy.

Okay, okay. Forgot to ask you the customer ROI question. So I kind of want to go backwards a little bit. When you're talking with the customers -- or I guess maybe help us understand a little bit about how customers measure the ROI at implementing Intapp.

Yes. There are a lot of different ways, I guess. I mean on the deal management systems, how many times you win business, did your RFP win, did you bring the right relationships for the firm to the pitch because of our relationship intelligence being built into our product? And did you win it, and you can track that and how you're doing better. We have a compliant time, time capture product combined with our terms of business, where the metric is, for law firms, what is the utilization or the yield of the bills if they send us a client and they don't get paid 100%. They might get paid -- pick a number, 92%. Because of what we're able to do to help vet bill before they go out the door, because we've brought through the workflow what the terms of business should be, we improved that yield and utilization for the law firms. And that's -- can be significant dollars. And then there's productivity improvement certainly in terms of time spent on various things that -- as you may appreciate, a lot of these professional firms -- I mean a lot of the work that our system and technology replaces is work that junior analysts have had to do, frankly, in a lot of cases. And that's just productivity that's fairly easy to measure in terms of people and time.

Got it, got it. We got about 3 minutes left here, so I'm going to ask you some big-picture question. Okay. Very successful in professional services, very successful in financial services. Clearly shows in the growth numbers there. What are your thoughts on maybe expanding the platform to another vertical? How do you guys think about that?

Well, there are some other verticals that could make a lot of good sense for us, where the workflow and the go-to-market and processing of business for those professionals is similar to what we've got now. We have tended to not pursue that yet because we do see so much opportunity in the TAM that we have in the 5 sub-verticals we have. And I think until we feel like we're saturating a couple of those, which we're a long way from doing, I don't know that we'll go pursue that right now. But it's possible that, that assessment could change in the future because there are some opportunities out there.

Okay. Growth and profitability framework and a potential recessionary environment, how do you think about that? I mean you -- when you look at the financials for the past few quarters, incredible cloud growth. So how do you think about growth and profitability?

Well, we -- as you know, we have had a history of bootstrapping our company since day 1. We were never a venture capital-backed company. And we're cash flow positive, and we'll continue to be. That's just in the DNA of the business. So we're always reflexively paying attention to potential issues there. And yes, we're budget -- we're finishing our budgeting now. We're going to be a little more conservative here. But generally speaking, because we feel our markets and their business feels strong now and we think we're pretty -- our clients and we are pretty resilient in any kind of recession, we're going to keep investing for growth at the moment. I don't think we want to -- we want to capture what we see right now in the marketplace. People can tell us if they don't like the balance we're striking, but we feel like there's a lot of growth to capture right now, and we can do so. Be efficient, be modestly cash flow positive, and there's plenty of opportunity to make significant margins here in this business when that time comes. But we'd hate to sort of trade that off at the moment when we have so much momentum.

Yes, yes. Got 30 seconds. So I'm going to ask it on the M&A question. You guys have been acquisitive in the past. The valuations have come down a little bit in the public markets. Don't really know about private markets just yet. But how do you think about your M&A strategy from here?

Yes. Well, M&A has always been part of our strategy. We have a strong organic growth tradition and history, and we have done some acquisitions in the past. We will continue to do that. We are always looking. I think right now, the timing probably isn't perfect because although valuations have come down publicly, I think the private market feels like it might be still lagging a bit. And sellers' expectations need to evolve, I think, to a place where we've got a marketplace. And so I think it might be a little early to take advantage of the opportunity, but I can see us wanting to do that at some point in the future. And yes, it's going to be part of our toolkit here going forward.

Okay. Steve, we're all out of time. Thank you so much.

Thank you, Koji. Appreciate it.

It's been great. Thank you.

Thank you. Thanks.