FIVE9, INC.

FIVN
Temps Différé Nasdaq - 22:00:00 03/02/2023
83.31 USD -2.69%

Transcript : Five9, Inc. Presents at Barclays 2022 Global Technology, Media and Telecommunications Conference, Dec-07-2022 03:40 PM

08/12/2022 | 00:40

Presenter Speech
Ryan MacWilliams (Analysts)

All right. So let's get started. For those who don't know me, I'm Ryan MacWilliams, SMID Cap Software Analyst here at Barclays. Thank you all for joining the Barclays TMT Conference. Pleased to introduce Five9. We have CEO and Chairman, Mike Burkland; CFO, Barry Zwarenstein; and President and Head of Sales, Dan Burkland. Guys, thanks for being here.

We were just going over some of my painful memories working as a contact center agent in college. And I can say, I always wish I had something like this. And I definitely want to talk about how two of the things that we said in the -- yes. And then we'll do safe harbor.

Presenter Speech
Barry Zwarenstein (Executives)

Yes, I'd just like to do a brief safe harbor, if you don't mind. So today, we'll make forward-looking statements about events and trends. It can impact the industry and the company. Obviously, the actual results may differ materially. I refer you to our SEC filings and the 10-Q and 10-K under the caption Risk Factors that could explain potentially why those differences could occur. Thank you.

Question
Ryan MacWilliams (Analysts)

It's not very often I can say I got too excited talking about contact center. So sorry about that. Before we go into tangent, Mike, great to see you back as CEO. I'd love to kind of hear how you're approaching the role maybe differently this time? And then how kind of the CCaaS landscape has changed.

Answer
Michael Burkland (Executives)

Yes. Thanks, Ryan. Thank you. And for some of you that may know this, I was CEO here for 10 years from 2008 to 2017 and I spent the last 5 years as Chairman. I got diagnosed with cancer in 2017 and decided to focus on my health, but I'm happy to report that the health is in a much better place. And Rowan Trollope was CEO here 4.5 years, did a wonderful job. And when he decided to depart, it was a no-brainer to come back and partially because I just love this team, and I've been here 15 years, and this is a big part of my life.

But more importantly, this contact center opportunity, the shift to the cloud is -- has never been better. In the 15 years I've been involved, this is a market that is massive. It's $24 billion in terms of recurring revenue TAM that we're going after. And the large enterprise part of our market is just now opening up the cloud, large enterprise.

If you look at cloud penetration overall in the contact center market, it's about 20%. But if you look at the large enterprise part of the market, it's about 8% to 10% penetrated in terms of cloud, replacing on-premise. These are companies, that large enterprises that have been running on-premise solutions like Avaya, Genesys and Cisco that we're replacing. And that is a long-term opportunity that we think will unfold over the next 15 to 20 years in terms of the growth opportunity.

Question
Ryan MacWilliams (Analysts)

And so you've definitely seen it all before in the contact center space, right? You've seen what a tough bookings environment is like, a tough macro. We're going to get into the pieces of that for the Five9 story. But I guess like broadly, what do you think maybe Five9 is in a better position now as we go into this environment?

Answer
Michael Burkland (Executives)

Yes, great question. So there's a number of things that have really allowed us to move upmarket and be successful in the large enterprise market. Technology-wise, our scalability has improved 10x per tenant over the last few years. Our reliability is five 9s. That's where our name, 99.999% uptime. And our automation and AI portfolio, we bought a company called Inference about 2 years ago now and have built on top of their platform for AI and automation. We're leading the industry in that market.

And I would say the other -- I wouldn't say the thing that's changed as much as just always been a strength of ours is our go-to-market team and our professional services team are second to none. So we're winning in the large enterprise market because of these things and it's a market that's also just opening up. And in large part, a catalyst. The large enterprise market opening up is this AI and automation opportunity where we're basically providing these large enterprises the opportunity to give their customers a self-service option with a virtual agent. And that's very appropriate for a small subset of customer interactions that are repetitive and redundant and easily done via a virtual agent.

So it's not as if virtual agents are going to replace human beings anytime soon. But for a sliver of the interactions, it's really, really important that we help these enterprise customers automate that small subset of the interactions. And we're doing so with an ROI that is absolutely incredible because we're replacing $4,000 -- roughly $4,000 per agent per month cost fully loaded with a $400 a month virtual agent. So the ROI is significant. That's why many of these large enterprises are kind of realizing that, okay, now I've got a compelling business case that will allow me to make this purchase with Five9.

Question
Ryan MacWilliams (Analysts)

And where I was getting on at the beginning was I worked in contact center, we said two things would never happen. We'd never be able to work from home and AI is never going to happen. And now it's like, okay, well, I guess, we're a little bit wrong there.

But so as much as things have changed, kind of stay the same, like you're back as CEO, and I was telling Barry after your last earnings, it's all like a 2019 guide for Five9, right? 16% growth for next year, but still have record bookings and record pipeline, things like that. But Barry, while it seems like a business as usual guide, any considerations we think about maybe how next year is different from last year?

Answer
Barry Zwarenstein (Executives)

Yes. Thanks, Ryan. So it wasn't just a 2019 guide, it was 2018 guide, 2017 guide, 2016 guide, 2015 guide and 2014 guide. And in each of those cases, we guided to 16% and then ended up delivering somewhere in the 20s.

We don't do that to be ultra conservative. We do it because there are uncertainties. There's a seasonality in our business. Now with respect to this particular preliminary view of 2023, we have, as Mike has just described, a much stronger company. And in our minds, in terms of all the different factors, whether it's the matchup market. I mean 50% of our business now comes from $1 million plus ARR customers. Cutting edge was just not there back at those days. Our international is growing in 7 of the 9 last quarters in 40% plus and he described how our product has gotten so much better.

So we've got a stronger company, which, in our mind, offsets the somewhat weaker macro environment that we're currently experiencing. So it's a familiar starting point for us, 16%. And we'll be happy to improve that as we see the quarters unfold.

Question
Ryan MacWilliams (Analysts)

And Barry, just as we think about the layering in of some of these megadeals, right, as much as I'd love to deploy 5,000 seats at once, which it's just not the reality, when you have to replace a legacy contact center by legacy contact center. So there is a ramp in your growth next year with Street estimates, but are you comfortable with like the present consensus on how that growth layers in?

Answer
Barry Zwarenstein (Executives)

Yes. What we said in the prepared remarks and our third quarter earnings conference call is that, that 16% will have the normal seasonality. And that means that something in the past has been something like 47%, 48%, 46% in 1 year of the revenue coming in H1. And then in H2, the complementary 52%, 53%, 54%. The seasonality comes from the following areas, education. Obviously, in the third quarter, kids going back to university, to school and so on, there's activity around that. Also retail, things start picking up after the summer months. In the fourth quarter, we also have not just a continuation of the retail, but also medical open enrollment. And so that's what caused it. And that's the type of guidance we've given H1 versus H2.

Question
Ryan MacWilliams (Analysts)

Excellent. Dan, I almost say bringing this up, just given your reputation in professional services, but people are just -- they want to get updates on that megadeal. So I guess, how deployments going? And I know in some respects, it's not up to your time line. But like do you think a macro could really change how your customers think about implementing those seats?

Answer
Daniel Burkland (Executives)

Yes. So a great question. Really, it's not changed from an implementation perspective. So very clearly, the companies that -- especially in those megadeals, we talked about the two main ones, the parcel delivery service is about 50% of the way through, meaning ramping up. So we recognize revenue as those seats get turned on. And so that $55 million spend is about halfway through that cycle.

The health care conglomerate is just starting. So we'll see that being rolled out throughout 2023 and into 2024. Those size of companies, especially in those very large megadeals, these are digital transformation projects that are 3 to 5 years. In some cases, they're moving CRM to the cloud, they're moving us to the cloud. And so they don't slow down during the ups and downs of the macro situation that we're seeing, they keep things on track.

Where we have voice where we've seen some headwinds on the net new side is in the mid-market, where we've seen mid-market, we define that 50- to 150-seat environment, those companies are small and nimble enough to kind of tighten budgets and push things out until next year until they see their business improve. So we've seen a little bit of headwinds there.

But when you look at the larger, the $1 million plus, we mentioned the record bookings quarter for $1 million-plus ARR deals, that is what the large megadeals are giving us great credibility for that next tier right below them because there's very few that have a $50 million spend for their contact centers. That -- we talked earlier about how many brands need 10,000 people sitting every day all day answering calls, very few.

So when you look at that next tier down, though, that kind of the $1 million to $5 million ARR deals, those are great because they're rinse and repeat, they're the same model, very predictable revenue and they turn up quicker than the big megadeals. And we're continuing to see that market open very nicely for us and be really the highest growth engine. If you look at the bookings growth engine, it's around the $1 million to $5 million, which we call our strategic accounts group and the higher end of the enterprise team. And then our international growth, which Mike touched on, which is 78% this last quarter, year-over-year growth. As Barry mentioned, I think 7 of the last 8 quarters, we've grown over 40%.

Question
Ryan MacWilliams (Analysts)

Yes, not like maybe, call it, 100- to 5,000-seat opportunity, that makes up the bulk of who hasn't got penetrated yet, and like the 10 million seats as something to move over. When it comes to the RFP origination that you're seeing today, like are you comfortable with the new opportunities that are coming in just because given the sales cycles, things that originated last year are probably going to close because you set aside budgets. Are you comfortable with like the opportunity set today?

Answer
Daniel Burkland (Executives)

Very much so. In fact, if you look at the pipeline is at a record level and a couple of functions there, you might think well, gee, with this macro backdrop, why would the lean-in happen? And like I said, aside from that mid-market segment, the rest really -- the CCaaS market has really opened up to them with a compelling ROI.

Before, we've always gone in and sold under the guise of we can take your on-premise solution, move it to the cloud and give you just as good reliability, just as good scale, security, all the feature set and a subscription, isn't that great, all the typical SaaS benefit. And some enterprises were like, well, I can wait a year. I can kick the can down the road and put that off and still milk the asset that I purchased. And until they saw the compelling ROI that Mike touched on, until they saw the AI and automation that could more than pay and offset the cost of moving to the cloud. It was like, "Wow, I've got to have that." And the only way you get those solutions is to be in the cloud.

So the health care conglomerate that I spoke of, they didn't even buy any of the AI or automation solutions. They made their decision based on those. And they said, "Hey, it's going to take us close to 2 years to get all of our agents over onto your platform." And we know the AI and automation advancements are happening so rapidly, that technology is getting better and better. Why purchase it now for 2 years from now? We'll wait. During 2023 is when they're going to add that. So that they're ready -- when they get all their agent onto our platform, they can pull the trigger on that.

Question
Ryan MacWilliams (Analysts)

Excellent. Mike, we want you to do all that, go after the big opportunity and do it more efficiently, right? So easier said than done. But just as you think about coming back, how do you think about the differences now between like the trade-off in growth and profitability?

Answer
Michael Burkland (Executives)

Yes. So we've always taken, as you know, Ryan, many of you know, we've all been together for many years. We've always taken a balanced approach to growth and profitability. And part of this is, I always call it rightsized growth. If you look at our historical growth rates, absent the pandemic, they've been very consistent. And part of that is we're -- this is a durable growth market opportunity. It's not a land grab. I've said that before. This is a market that is opening up in kind of stages, so to speak, but it's also a market that historically has moved fairly slow.

This is a very much critical part of these enterprises business. They don't take this decision lightly and they definitely don't take the deployment lightly. So this is going to be an opportunity that I believe is one that has very consistent growth over the years, but we're always going to balance profitability.

We've always taken that approach. There's a reason we don't get out over our skis in terms of expense growth. We never have taken that approach. And I think it's paid off. We're always investing, but I think we do it with a highly instrumented business and a highly surgical approach in terms of where we put that next marginal dollar of investment. So we'll continue that discipline. It allows us to kind of invest on the line as opposed to kind of ahead of the curve or behind the curve. Some companies get out ahead of themselves and then have to make some severe adjustments, and I don't expect us to have to do that.

Question
Ryan MacWilliams (Analysts)

I'd be very surprised if Barry got ahead of himself. But Barry, you talked about your consistent approach to guidance, but as we're trying to think about differences between next year and prior years, anything on the bottom line from a profitability standpoint that's worth calling out?

Answer
Barry Zwarenstein (Executives)

So in our guidance -- not, in our guidance, in our first outlook for 2023, we gave a similar growth rate in our EPS, $1.38 to $1.56 of 16% as we did on our top line. We really are infatuated with that 16% number. We will then complete our budget process and see what areas we can improve further.

The one area that is of considerable focus to us is free cash flow. We just reported a record level of free cash flow, but it's volatile. On an LTM basis, though, we take a lot of comfort from the fact that operating cash flow has, for the last 25 consecutive quarters, 25 consecutive quarters being positive and capital spending, which has been somewhat elevated due to expanding internationally and increasing our capacity to accommodate these orders -- these big orders that Dan were bringing in is largely behind us and the supply chain is more normal so we can moderate our capital spending, Ryan, and get to a consistency on the free cash flow in due course on an LTM basis.

Question
Ryan MacWilliams (Analysts)

So just to double-click on that, you mean from like a headcount perspective, you feel comfortable where you're at as you ramp for megadeals like for the next year just from a growth perspective?

Answer
Barry Zwarenstein (Executives)

Yes. We -- as Mike stated quite clearly, we've taken a very -- let me put it this way, hiring at Five9 has never been a luxury. We wait until the -- on top of the revenue or the bookings at the very least. And we'll continue to hire people in the course of 2023 and it will be in the classic areas, the quota-bearing reps and professional services and R&D to some extent as well. The key thing is that we want to maintain that balanced approach that Mike alluded to.

Question
Ryan MacWilliams (Analysts)

Excellent. And Dan, look, investors love the megadeals, right, just because it's like, Five9 on this massive contract. And I think you made a good case as to about why it's not about the size of the deal, but profitability and how big the deal is underneath. But are there still those megadeals out there that are being bid on at this point?

Answer
Daniel Burkland (Executives)

There are. And one thing we don't do is rely on those for our forecasting and guiding purposes. When those come along, they're gravy because they are unpredictable. Each one of those is unique in its own way. They have unique rollout schedules, unique demands. So those are somewhat disruptive to the flow. The ideal ones are right below that tier, which again, we said $1 million to $5 million deals, and there's plenty of those out there.

The megadeals, we will get more because we're being successful in rolling out two of the most demanding largest contact centers in the world, and that is extremely helpful from a referenceability standpoint. But we want to make that the exception, not the rule because there's fewer of them, it does create some lumpiness into the model. But yes, it's -- we're fortunate to be able to -- I think your prediction at the beginning when you said you were wrong about a couple of things, I was wrong several years ago, to think, and I shared this at our President's Club trip recently to the whole crew was who would have thought a few short years ago that we would have these $50 million annual customers that we've signed up that are all in with Five9. And who would have thought that we'd be delivering consistently five 9s of reliability and uptime on the platform. That's awesome. So I'm not going to doubt us again.

Question
Ryan MacWilliams (Analysts)

Yes, that gets lost on some people, I think, at some point. It's like, oh, yes, 10,000-seat deal. I'm like yes. It's a lot bigger than you think yes. A couple of years ago, I mean, we weren't even really talking about that. Let's just talk about some of the macro pressures. Barry, would you mind just talking about from a seat-count standpoint in 4Q, just like how certain verticals or certain ramps are impacted?

Answer
Barry Zwarenstein (Executives)

Yes, thank you. So to frame this, keep in mind that our revenue growth year-over-year comes in two buckets, roughly 50-50. The one bucket is the new logos that come into the platform, get implemented and ramped. And that's about half. And then the other one is -- the other half is the installed base, whereas transactions, not spending, but transactions, i.e., no benefit from inflation, goes up and down, then the agent seat goes up and down. And that gets translated into revenue promptly.

So in terms of our Q3 results, we explained to the Street at the time that in Q2 -- in the Q2 to Q3 sequential growth in the 2021, the year before, it was 6% up, Q2 to Q3. This year, it was flat. And we identified, assuming it was flat in five of the verticals and we enumerated them. And in the interest of time, well, I'll just quickly mention them. They were health care, financial services, consumer, BPOs and in real estate and construction. So those were flat Q2 to Q3 this year and were up 6% last year. So somewhat of a headwind that we see immediately in our revenue.

Now the rest of the business was growing somewhat normally, quite strongly in one or two cases, like, for example, travel, but travel is a very small part of the overall equation. Education was always pretty good. I do want to emphasize that what we're talking about here is not a contraction in the revenue for those -- that part of the business, that other half, it is just a slower rate of growth.

Question
Ryan MacWilliams (Analysts)

And Barry, I just kind of missed it, do you mind just talking about what that 6% exactly was?

Answer
Barry Zwarenstein (Executives)

Yes. So my apologies. Q2 to Q3 growth, 2021, 6% sequential. This year, the growth was actually about 5%, but that includes the benefit of the new logos. This year, in those five verticals, growth was 0 versus 6% the year before.

Question
Ryan MacWilliams (Analysts)

I appreciate this distinction, it's not a contraction in agent seats, right, in the growth rate. On the call volume side, are you guys seeing any differences there?

Answer
Barry Zwarenstein (Executives)

Yes. So in the call volume side, intra-quarter, we don't talk about it, but that is a normally a good leading indicator because our customers are not going to have idle agents. So if that goes up, they will be adding seats, if it goes down, they will be contracting seats.

Question
Ryan MacWilliams (Analysts)

And then, Mike, just from your perspective, coming back, I mean, I feel like we can talk about things are changing, things are not changing, in fact competitive set hasn't really changed. But as you go up against some old favorites and maybe some new opportunities coming from like legacy platforms. I guess, how are you viewing the competitive landscape today?

Answer
Michael Burkland (Executives)

Yes, it's interesting because having been here 15 years, our competitive set really has not changed. And when it comes to day in and day out, who we're competing with in these enterprise opportunities, it's still a 3-horse race in terms of competitors at scale. We're still replacing the same three legacy providers that I mentioned earlier. There's definitely more noise around our space, and that's actually a good validation.

But the barriers to entry into our space, there's a reason there's only three of us at scale. It is very, very difficult to create from scratch or build Cloud contact center technology infrastructure that we provide that can replace an Avaya, Genesys, Cisco system. And you don't dabble in this. We've seen smaller companies try to dabble, they don't make it. We're now seeing some larger brands, if you will, and some named hyperscalers and platform players start to message around contact center, they're going to have more resources, but they also realize very quickly how high that barrier to entry is.

The 500 features and the multiples of that in terms of sub features, the connectivity, the reliability, the -- I mean the list goes on. The barriers to entry are real. The best example is one of those competitors that we compete with today took them 8 years, and they're focused on contact center and only contact center, took them 8 years to kind of get into this market. They're still behind us, but they're a living proof point of how hard it is to do what we do.

Question
Ryan MacWilliams (Analysts)

Yes. I can publish a running list of people who said they were going to get in the contact center and then didn't end up doing it.

Answer
Michael Burkland (Executives)

Yes. I think they regret it because it is very, very difficult. And again, you see companies that try and fail over and over and over. And that's just a -- it's a great part of our business, especially when you think about the size of this market opportunity. It's a big part of why we've had some success.

Question
Ryan MacWilliams (Analysts)

And I always tell folks like you got to be a contact center person almost. Like it's not just have the best mousetrap or software, right? Like people got to trust that, you're going to put in 10,000 seats and do it the right way or your contact center doesn't break from Christmas or something. So you talked about the IVA opportunity. It's been maybe 2 years since that acquisition. Do you feel like that's well penetrated in your current installed base? Or there's even opportunity there?

Answer
Michael Burkland (Executives)

I think there's still a tremendous opportunity. We're still in the early innings of that opportunity, not just in terms of the core product that we -- we acquired Inference mainly for their IVA solution, but we've added and announced other products on top of that in AI and automation. And it's built on their foundation. But it is -- those are brand-new products that we haven't even sold yet, upsold yet to our base.

So -- and the IVA penetration, we talk about it as kind of 10% of bookings. That's really not an attach rate, but we're attaching IVA to a lot of new deals. Again, it's a subset of the would-be agent population. So that attach rate is kind of always higher than what that 10% represents in terms of percentage of deals. But again, we've got a huge opportunity in the installed base still, and we're still in the early days of penetrating and upselling.

Question
Ryan MacWilliams (Analysts)

That's something else we'd love to have because a number of password resets that I had to do. But with a tougher macro, it's like difficult to acquire new technology, right? But how can you pitch like a cost savings or an ROI big sale of IVA?

Answer
Michael Burkland (Executives)

Yes. So Dan, maybe if you want to. You can -- I'll take it to start, and feel free to chime in, but it's a pretty simple ROI. What you're really doing is automating that subset of those interactions with customers that are repeatable and can easily be automated. And if you look at -- I think I mentioned this before, the cost for the labor that you're replacing with a virtual agent, it's 10x the cost of our solution as a virtual agent. So the ROI is very compelling. In fact, Dan, you might want to talk about one of our large customers and how they look at this.

Answer
Daniel Burkland (Executives)

Yes, very common example. If you can imagine, there's hundreds of people sitting right now answering consumer calls of people that just want to track their package and find out where it is. So you call up, you wait in queue, you get to a human agent. And you say, where is my package or what time -- what's the ETA on arrival? I'll give you a tracking number, you put in the tracking number and I tell you where it is. And there's hundreds and hundreds of agents sitting, telling -- having that -- I should say, there were hundreds and hundreds agents having those conversations.

And so if you think about that, those calls, very straightforward, you can now speak to the system. The system will ask how may I help you? I want to find out where my package is. It understands all the different ways you can say that. And then, it says great. Give me your tracking number and then it gives you back the status and you've got no human intervention necessary. So the number of those bodies that you're going to replace with the virtual agent, you do the math. Again, it's $4,000 a month for the agent. It's $400 a month for a virtual agent that we provide. And so that's why you get such a compelling ROI. That's just one example.

Then you have your password reset was a very good example. Thank you for bringing that up, which is very common. A lot of companies are saying that's what's happening. The key there is we always start and you said how much is your installed base penetrated, very little. We're just dipping our toes on the water as an industry and really experimenting with the various use cases because there's variables that are necessary. Is your demographic keen on speaking to a machine or a voice interface?

We're all getting more and more comfortable with consumers and as people, as a society because of Siri and Alexa and the other voice interfaces. So it will continue to go up over time. The other is the technology is getting better and better, understanding more and more complexity in the questions that are asked. So we oftentimes go in and say, what are the most common things being asked for in your contact center that we can potentially automate. And oftentimes, customers don't know.

They're like, well, they're calling in for a claims thing, but then we now have the ability with new product that's coming out to analyze, our analytics solution, to listen to the conversations, record and extract insights into what's being said. And we can go back to the customer now with the analytics and say, hey, did you know 26% of your callers are asking this question in addition to the main reason. They're asking the perfect thing to -- so we can actually use the analytics as a prescriptive tool to then position how they can use AI and IVAs in particular.

So we're -- this is an evolving automation story that we're just getting started with and the technology will also get better and better. And so we know that adoption curve is up and to the right. The question is how steep is it, how fast is it. And we kind of -- we're the beneficiary either way because we'll sell software to healthier human agents, and we'll sell software as you transition them over to virtual agents, and that just increases our TAM significantly.

Question
Ryan MacWilliams (Analysts)

I think that's a great place to, I think, wrap questions. One more.

Question
Unknown Analyst (Analysts)

Follow up on that. What percentage of your calls that originate ends up with a human versus just get done with either like it's an automated?

Answer
Michael Burkland (Executives)

And the customer has an intention of automating and putting them through to the IVA and then they opt out? Is that what you're saying?

Question
Unknown Analyst (Analysts)

The other thing I call -- I don't know [indiscernible] and I want to talk to a pharmacist. But first, I got to get through this automated thing that is [indiscernible] that prescription in that...

Answer
Michael Burkland (Executives)

Yes, that's different. Typically, if you're going to be answered from the automated IVR or IVA, one of the things it's doing is it's determining you're driving your intent and then understanding is this a call that would and could and should be fulfilled by a virtual agent or a human agent. And so part of that is just what we call call steering or call routing is to drive intent and then figure out where to send you.

Even in the case where we want to offer the IVA for self-service, it's very important for that brand to also offer a human experience. We don't want to ever say push people to the IVA and make them. That's how you drive really poor NPS scores and frustration by customers.

Question
Ryan MacWilliams (Analysts)

So you're driving NPS scores now?

Answer
Michael Burkland (Executives)

Yes, you drive your NPS in the tank, and that's undesirable. So what us and our customers are always talking about is providing choice. You want to provide them choice because certain -- there's going to be a certain subset of your customers that are going to be averse to talking to the machine, and they're going to want an agent every time and that's fine. Just give them that option.

But there's also ones that say, I don't want to wait 15 minutes and queue for an agent when I can just have a simple question answered. So it's not -- there's not a simple answer of what percentage. It varies dramatically by customer. If you're trying to put automation in front of a demographic where it's retired individuals trying to set up hospital visits, that's going to be a very different take rate in the automation than somebody who's asking for a password reset. So it's all over the map.

Question
Unknown Analyst (Analysts)

Is this something that customers track like...

Answer
Michael Burkland (Executives)

Very much. They wanted to look -- it's called the completion rate, and that's very closely tracked. And you tweak the way the IVA works and you tweak your use case to say, if you get a low take rate or an opt out where they started in the IVA and they went out to an agent, you probably don't have the right use case. It may not be something that you want to try to automate. Other companies will say, hey, if I can complete 50% in the IVA and only 50% opt out for human agent, I've still made it 50% effective. So...

Question
Ryan MacWilliams (Analysts)

We'll wrap things up there, but thanks so much. And we'll see what we're talking about next year in the contact center.

Answer
Michael Burkland (Executives)

Thanks so much.

Answer
Daniel Burkland (Executives)

Thank you.

Answer
Barry Zwarenstein (Executives)

Thanks a lot.

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