ON24, Inc. (NYSE:ONTF) Q3 2023 Earnings Call Transcript

Sharat Sharan: Yes. So Michael, while we are not providing 2024 guidance at this time, we are encouraged by the positive momentum and the progress we have made. We are optimistic about the trajectory for ‘24, but continue to be mindful that the macro is choppy and the marketing budgets still remain uncertain, and it’s hard to sell into sales and marketing budgets still. So, moving forward, we expect to deliver sequential improvement in ARR going into 2024 and expect to flatten the decline and turn positive into ‘24. Now, I am confident that we will get to positive ARR no later than second half, but I am driving the company to get there as soon as possible. Obviously, we will get there if the macro improves. Now, there are three core areas that we are focused on to get there.

First of all is the retention base. I mean the reason why we are saying Q4 feels better a lot is based on we are seeing improved sequential retention. On top of that is our focus on progress on our go-to-market for regulated industries, where we are focused on mission-critical digital transformation use cases. As I mentioned earlier, those grew in aggregate high-single digits year-over-year in Q3. And on top of that, we are launching the next generation of our platform, which includes AI-powered ACE, where we are adding all the capabilities that we have talked about before. So, those are the three things. On top of that is new business. Again, with our go-to-market initiatives, Q3 was better in new business compared to Q2. While it generally is seasonally slower, we expect that to improve in Q4.

And I think that is going to be important both on the Enterprise segment and the Commercial segment. So, as we look at ‘24, those are the vectors we are currently looking at. And with a little more assist from the macro, we expect all those vectors to even grow further.

Michael Rackers: Thanks so much.

Operator: Thank you. And at this point, we do not have any further questions. So, we will now conclude today’s conference. All parties may disconnect. Have a good evening. Thank you.