Good day. And welcome to the Udemy Fourth Quarter and Full Year 2022 Conference Call. All participants will be in listen only mode [Operator Instructions]. Please note this event is being recorded. I would like to turn the conference over to Dennis Walsh, Udemy's Vice President of Investor Relations. Please go ahead.

Thank you. And welcome to Udemy's Fourth Quarter and Full Year 2022 Earnings Conference Call. Joining me today are Udemy's Chairman and Chief Executive Officer, Gregg Coccari; President of Udemy's Business and incoming CEO, Greg Brown; and Chief Financial Officer, Sarah Blanchard. During this conference call, we will make forward-looking statements within the meaning of federal securities laws. These statements involve assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated. For a complete discussion of risks associated with these forward-looking statements, we encourage you to refer to our most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. Our forward-looking statements are based upon information currently available to us. We caution you to not place undue reliance on forward-looking statements and we do not undertake and expressly disclaim any duty or obligation to update or alter our forward-looking statements, except as required by applicable law. In addition, during this call, certain financial performance measures maybe discussed that differ from comparable measures contained in our financial statements prepared in accordance with US generally accepted accounting principles referred to by the Securities and Exchange Commission as non-GAAP financial measures. We believe that these non-GAAP financial measures assist management and investors in evaluating our performance and comparing period to period results of operations in a more meaningful and consistent manner as discussed in greater detail in the supplemental schedules to our earnings release. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release. These reconciliations together with additional supplemental information are available on the Investor Relations section of our Web site. A replay of today's call will also be posted on the Web site. With that, I will now turn the call over to Gregg.

Thank you, Dennis, and good afternoon to everyone on the call. Udemy completed its first full year as a public company with results that met expectations on the top line and exceeded the high end of our range for adjusted EBITDA margin. I am proud of these results and our overall performance despite a very challenging macroeconomic environment and unfavorable FX headwinds. As you know, after four years as Udemy's CEO, I will retire at the end of the month. This has been an exciting opportunity and the most rewarding role of my career. I am thrilled to pass the baton to Greg Brown, who has served alongside me as President of Udemy Business for the past two years. Greg's deep executive leadership and enterprise sales experience has been an invaluable asset from the start. He has quickly scaled our enterprise business and built a powerful go to market engine that has more than doubled our ARR in two years. Greg is passionate about learning and our mission, and I am confident that he's the best executive to lead Udemy to me through the next stage of growth. It is a bit of sweet moment, however, since we shared with our employees yesterday that we are reducing our global workforce by 10%. We are taking steps to better align our cost structure with our expectations for revenue, demand and profitability. This decision was extremely difficult since the talented team members that were impacted all contributed to Udemy's success. It’s with a heavy heart that we wish our departing colleagues all the best. We are committed to supporting them as they transition to their next opportunity. Looking ahead, we believe this action positions us well to balance growth and margin expansion in a challenging environment. Going forward, the company is in good hands with Greg and the rest of the Udemy leadership team, as I plan to stay on for a year as an adviser to support a seamless transition. Since this is my last call, I want to send a warm thank you to the analyst and investor community that supported me, Udemy and our entire team as we took the company public, our customers and learners around the world for choosing Udemy as their learning platform, our instructors for creating the impactful content that sets our company apart and finally, to my colleagues at Udemy, for your hard work in advancing our mission and building this great business. With that, I'll now turn the call over to Udemy's next CEO, Greg Brown.

Thank you, Gregg. I'm tremendously grateful for your leadership and for entrusting me to run Udemy Business for these past two years. It's been an opportunity of a lifetime and I'm honored to step into the CEO role. Gregg leaves behind an amazing legacy, which I'm excited to build upon. He set Udemy on a clear path for long term sustainable growth and his accomplishments allow me to assume the CEO role with the company already positioned as a global leader. Under Gregg's leadership, we grew revenue by nearly 180%. We accelerated the growth of Udemy Business and delivered strong net dollar retention. We built an exceptional leadership team and talented global workforce. And we successfully took the company public in 2021. I think we can all agree that Gregg truly earned this retirement. Thank you for your service, mentorship and guidance, Gregg. We wish you all the very best. As a final point on the transition, we're fortunate to have a strong leader like Stephanie Stapleton Sudbury to take the reins as President of Udemy's business. Stephanie was identified long ago as my successor and during her time leading our customer success team, she helped shape Udemy's business' product, customer and go to market strategy. She had solid relationships with our largest customers and is directly responsible for consistently driving our best in class retention and understands our customers' needs better than anyone. I'm extremely confident in Stephanie's ability to take Udemy's business to the next level. Now I wanted to take a moment to touch on some of the trends we're seeing in our business and set the stage for 2023. The Udemy Business segment continues to be our main growth engine and our pipeline for new business is strong. We are encouraged by the continued strength of…

Thank you, Greg. We had a solid quarter and ended the year considering the current macro backdrop. Total fourth quarter revenue increased 22% year-over-year to $165 million and for the full year, revenue increased 22% to $629 million, both of which were within our guidance range, including the negative impact of FX. Since nearly 60% of our revenue is from outside of the US, the year-over-year increase in total revenue includes a negative impact of 4 percentage points from changes in FX rates in both Q4 and the full year. We also exceeded the high end of our Q4 and full year 2022 adjusted EBITDA margin guidance ranges as we continue to focus on operational efficiencies and driving towards profitability. Q4 revenue growth was driven by the strength of Udemy Business. The segment accounted for 50% of total full year revenue for the first time, well ahead of the goal we set at the time of our IPO. That being said, we did experience some elongating sales cycles, pushing some deals into Q1. At the same time, the consumer marketplace remains healthy. Although segment revenue was down year-over-year in Q4, driven by the negative impact of FX, Udemy's marketplace continues to produce a steady source of organic leads and serves as a powerful content creation engine that provides fresh, high quality courses that ultimately feed the Udemy's business content library. As we move down the P&L, note that all financial metrics are non-GAAP unless stated otherwise. I will keep my remarks focused on the fourth quarter results. Our news release, which can be found in our Investor Relations Web site, includes the financial tables with results for the three and 12 month periods ended December 31, 2022. Q4 gross profit was $94 million, up 29% year-over-year. Gross margin was 57%,…

[Operator Instructions] Our first question comes from Patrick Schulz with Baird.

I just wanted to dig a little deeper into the 2023 revenue guidance, as it was a little bit below where many of us had expected. And I know there are a lot of moving parts given the current macro, and I appreciate the color you guys provided for each segment. But could you just provide a little bit of additional color on how you approach guidance this year? Any commentary would be helpful there.

So first, I think it's important that we disaggregate the numbers a bit to provide context because I think it's relevant here. Roughly two thirds of the approximately $60 million is based on expectations we have for the consumer business. We talked about the fact that we've deliberately reduced spend on the consumer side to accelerate our path to profitability, so that's the first point. I think second is on the UB side. This last year in 2022, we exited at roughly 70% revenue growth, which is impressive given the environment. Extremely proud of the team and what we delivered there. We talked about a bit of the elongation in sales cycles as well as some of the softness on the SMB side that we built into the plan for 2023. With that said, we're still projecting mid-30s growth and exit of nearly $500 million in ARR with 60% of our revenue being generated by the Udemy Business side of the house. So we're definitely cautiously optimistic for the year but also feel like what we're going to deliver is material and significant based on the economic climate we're facing. Sarah, I don't know if there's anything you want to add.

I think that's right. I think the only thing I would add is we do anticipate continued pressure from FX throughout the year. So more of the same challenging macro headwind. But again, as Greg said, UB still growing at mid-30s at the scale in this environment. So we're cautiously optimistic that we can not only deliver that, but in the back half things easing up a little bit, we'll be in a good position to take advantage of it.

And just a quick follow-up question. I know you spent some time during your Analyst Day in the fall discussing international opportunities with partnerships being an important part to this. Can you just talk about how this has progressed in recent months in light of the macro and maybe what your expectations are for 2023?

So investment in international expansion via partnerships as well as organic is one of our top areas of focus and priorities for the year. We continue to be encouraged by the progress we're seeing out of our partnerships via new ventures in Vietnam, Korea and China. We're not breaking out revenue or guidance at this point for that segment of the business. But I can assure you that the acceleration is impressive and we're excited about the prospects and potential this year, and we're going to continue to invest in these areas. Latin America as well, very excited about what we're seeing at our partners in Brazil, Mexico and the region at large, and will also be a continued area of investment. So all said, I'm excited about the prospects and potential. And we talked a bit about Amazon in the past and we continue to make really good progress with them as a strategic partner on a global basis and expect to be able to shed a little bit more light and the announcements to come with respect to how that partnership is evolving.

Our next question comes from Brett Knoblauch with Cantor Fitzgerald.

Gregg, congrats on the retirement, I hope you enjoy it. I guess my question kind of comes to your Investor Day, you guys came out with the 2024 and 2025 guidance. And I was just curious how the recent headcount reductions, I guess, one, was that anticipated at that time and two, does that impact your guys' expectations for '24 growth to be, call it, within 23% and 25%, nd '25 growth to be above 25%?

The first thing I'll say is -- at that time, we didn't have visibility into what the second half of Q4 was going to look like for us. So the macro continue to worsen. And for the first time, we saw an impact and the slowing of sales cycles in our enterprise business, which we had not been seeing. We also pulled back on our marketing spend as we've seen the macro continue, which we had -- resulted in a slower than expected Black Friday, many consumer businesses saw this. So there are a lot of things in the back half of Q4 that we don't have visibility into. That being said, we're reconfirming our targets for '24 and '25. And let me dig into that a little bit, so you can understand why. The first is it's going to be off of a smaller base. These numbers are a little bit different. But secondly, our mix of UB continues to increase. And as it continues to increase, that is the growth engine of this business that is going to continue to deliver mid 30s growth for a long period to come. We have a large opportunity within our existing base, which we've spoken about for expansion and upsell. And so we are really focused on what we can control. We are committed to 2024 profitability and back half profitability this year. We do expect typical seasonality. And what that means is it may not be that every quarter in '24 is profitable but we will be profitable for the year. And so those targets that we laid out we are still committed to delivering.

And then maybe on the segment gross margin. Can you just walk through the cadence of how you expect that to play out throughout the year? I guess, it's pretty volatile for the consumer segment quarter-to-quarter. Should we look at 2023 being similar to 2022, is there any kind of unique instances in the last year that would cause a distress from that?

So there's two things to think about when it comes to consumer gross margin. The first is the timing of our promotion cycle. And so when we have the larger promotions, like Q4, what happens is you'll see gross margin suppression in that period because we record revenue kind of in the four and months following, if you will, but the instructor expenses occur in period. The other thing that happened in 2022 that we won't see in 2023 is we had some relief from global marketing fees in the first half of the year and now those global marketing fees were having to pay across the board. And so you're not going to see that dynamic play out in 2023 in the same way it did in 2022.

Our next question comes from Ryan MacDonald with Needham.

I'll echo my congrats to Gregg Coccari on the retirement, best of luck in the future. Greg Brown, I'm curious about the comment you made about in Udemy Business, more customers evaluating the current vendors you're working with and perhaps you can talk about how you feel like you're positioned to benefit from a consolidation trend there? And to the extent you have it, what win rates have looked like in those sort of conversations thus far?

So we continue to see more consolidation and vendors looking to maximize economies of scale as they move to working with fewer vendors. And we happen to be on the front end of that opportunity in terms of being positioned to take advantage of it. We had, just this last quarter alone, two of our larger Fortune 500 customers, add respectively, 30,000 seats and 20,000 seats to standardize on our platform as being their preferred provider for learning and development across the organization, both multiyear contracts and both after, as you can imagine, deep assessment as to the needs of their organization and their assessment that the depth and breadth of our platform was best suited to their needs long term. So we continue to see that trend emerge. I believe it does feel like it's accelerating as we move into 2023, and we continue to win a disproportionate amount of those opportunities. Specific for our win rates as we talked a little bit about the elongation and sales cycles and that's as a result of the macro that we're all dealing with. But our win rates are holding very, very strong and we're very encouraged by that. In addition to the NDRR we're seeing, net dollar retention we're seeing in our large customer segment, which is customers over 1,000 employees, remaining very, very strong at 123. So our enterprise business remains very healthy. We continue to see the acceleration of offline to online and consolidation that you talked about. So look we're very encouraged and very confident in our ability to continue to win and want a disproportionate amount of the opportunities we're in on the enterprise side, we just need to navigate with a lot of care through this downturn regardless of how long it extends.

Sarah, maybe one for you. As we think about the accelerated path to positive adjusted EBITDA and some of the cuts you're making. Can you talk about where those cuts are coming or where you're looking to optimize as we think about the P&L and perhaps across the two segments, consumer versus UB?

So first, as we've spoken about, we've spent shifting spend from consumer to Udemy Business and decreasing our overall spend on marketing a bit. Secondly, we really took a look at the organization and the macro environment. First, on the recruiting side when you're significantly slower in hiring you don't need that much capacity. We looked across our go to market team and the regions and segments that were impacted most by the macro environment, and we pulled back in those areas. And then we're really focused for this year on our strategic priorities. And so from an R&D perspective, areas that we could slow down a little bit or hold off on for now, but just remain focused on the things that matter most. So those investments that are going to impact our learners, our organizations are instructors, we protected those. We're focused on the platform and all methods of learning, improving our tools for instructors. So really harnessing that global instructor population that we have and allowing them to continue to build their businesses better and faster, doubling down our leadership development and cohort learning is important for us and increased personalization. So we took our time. We looked at the business and the things that are most important for us to deliver, we're very focused on that. And we reduced the areas that we're going to be very inefficient to operate in and/or we just didn’t need the capacity.

Our next question comes from Stephen Sheldon with William Blair.

I wanted to ask, I guess a two part question on ChatGPT. Curious what learner engagement has looked like with the 150 courses you have out there right now? And maybe just, I guess, how do you think about potential impact to your business and the potential to integrate this type of technology into what you're offering? Just curious on those two fronts.

So with respect to ChatGPT and what we're seeing on our platform, as I mentioned, we've got over 150 courses on the platform. 11 of those courses have grades or ratings reviews and curation then moved into our Udemy Business catalog. And a number of those courses have over 100 reviews and over 4.2 rating, which is our minimum threshold. And so all of those courses have that rating or above. So anyway, we're seeing very strong uptick and momentum with respect to ChatGPT. As we mentioned, it's most widely searched term right now on both platforms. So we're very encouraged by the traction and our ability through our marketplace to monetize. And look, it really is one of the areas that really at the core we're fundamentally different from any other business in the category, because we are able to react and stay up with the pace of change whenever new advancements hit the marketplace like in this case, ChatGPT and it really is a testament to, again, the power of the global network that we have because many of these courses on ChatGPT are not in English, right? They're non-English courses that are on the platform and launched all over the world and international language tone and context locally where those instructors are. That really does give us a very unique advantage in terms of how we bring this type of content to life and enable our learners within all different sizes and types of organizations to access this content. And again, enabling them to stay ahead with the pace of change. So it's a good strong illustration of really how different we are and advantages we have as a result of the marketplace. Now as far as ChatGPT and in terms of how we're thinking about it, vis-a-vis our instructors and the learning experience, we've been now testing for over nine months in area of AI deep learning, GPT-3, which is underpinning platform that supports ChatGPT. And we're very encouraged by some of the testing and the betas that we've been running in terms of our ability to enhance the toolkit and the capabilities that we can arm our instructors with to enable them to accelerate the pace by which they develop content, increase the level of personalization, which is really exciting and allow the instructors to create more engaging content faster, I guess, is the best way to really sum it up. And we'll be talking more about this as we move forward. But look, again, we've got 70,000 instructors around the world that we have the ability through this platform to enable them with tools and capabilities that again, are very unique in that we've got breadth and depth globally and we're going to take advantage of that. And I'm very encouraged by it. You can expect us to talk more about our investments in deep learning as we move forward.

As a follow-up, I just wanted to, I guess, ask if we continue to see weaker macro trends, and I guess, especially if unemployment rises from here, which seems likely to happen. What do you think the net impact would be on the consumer segment? I could see it being a little mixed. But just curious if you see some puts and takes as you think about consumer.

This is the first downturn that this company has been through, so we don't know for sure. But we do think that there is some current cyclicality of the business as people are looking for ways to upsell and resell themselves for their next opportunity. So we're going to continue to keep an eye on it. But our expectation is that the consumer business will hold out and stay stable, if not, see some benefit due to that.

Our next question comes from Terry Tillman with Truist Securities.

This is Connor Passarella on for Terry. Just on the first one, I wanted to dig a little deeper into some of the customer dynamics within UB. So just for large customers, the more than 1,000 employees. How do that segment fuel from a demand perspective versus smaller customers? And maybe how can we think about the growth breakdown between these segments on the mid 30s UB growth guidance for this year?

So coming out of Q4, look, as we enter Q4 and into mid Q4, we really were not seeing significant impact in our enterprise business. And what we saw in December as we went to the back half of December is with some elongation in sales cycles, and that resulted in some deals pushing into Q1. And organizations were doing what candidly what we were doing and I think what most organizations were doing, which is assessing the budgetary concerns that they had in Q4 as well as trying to really get clear on what their budget was going to look like for '23. So some of those decisions were in a holding pattern. We are starting to see some of those decisions free up and some of the budgets starting to be allocated in Q1. We're encouraged by what we're seeing early Q1, but still a long way to go. And as far as buying trends within that segment, and I talked earlier about what we're seeing from a continued momentum offline to online as well as consolidation. But we're also seeing that as I'm engaging with CLOs, what they're telling me and us is that they're not pulling back on their allocation or budget per employee, they may have, in some cases, reduce their workforce, so maybe not as many employees. But for most of them, it's as important now if not more important, to continue to invest in the skilling, be it upscaling or reskilling of their employees, to enable them as an organization to reach their strategic imperatives and outcomes as they're navigating their way through this downturn. And so as much as we have seen some budgets constrict and go into a bit of a holding pattern, what we're hearing is those budgets for the year on a per employee basis are not -- we're not seeing significant degradation. So it does give us confidence in our enterprise business as we move into 2023. I don't know, Sarah, if there's anything you wanted to add to that?

I think that was well said.

Maybe just other quick follow-up on the new product side. How has the rollout of the learning assessments has been going and maybe if there's any important customer feedback you've had here? I really appreciate the time, guys.

I'm very encouraged. Some of these upsells that I mentioned do include our Udemy Pro immersive learning capability product, and so very encouraged about what we're seeing. And most larger organizations are moving with a sequence deployment phase deployment, if you will. And those initial phased deployments, we're seeing very, very good signs and very good uptick, adoption and outcomes inline with expectations. So very encouraged. And again, the breadth of our platform really does give us a unique position in the marketplace and that we've got immersive learning capability and our leadership academy coupled with our market leading on demand library that is unique. And so we're taking advantage of that and our customers are really taking advantage of it as well.

I would just add to that we've spoken about our customer success team and how we really partner with our customers to help them roll out these new features and capabilities and get their teams engaged and see that , so that they're able to get the ROI from the dollars that they're spending with us. And so there's a lot to be said about having this broad platform, this great content. But very importantly also, we do partner with them to ensure that they're seeing that uptick and that success.

Our next question comes from Jason Celino with KeyBanc Capital Markets.

Greg Brown, when we think about the longer sales cycle commentary in enterprise, are you seeing impact more in any one vertical, maybe say in tech, curious what you're seeing?

We have seen it a bit in technology, which is no surprise because that is also where we've seen the bulk of the organizational adjustments that have been announced over the last weeks and months. So tech is one vertical that we have seen a little bit of the pause pullback. But again, starting to see that free up as we move into Q1. But also bear in mind, we don't have high concentration in any one vertical. We've got -- if you look at the exec advisory council or boards that we have and the areas by which we're demonstrating very strong capability to drive organizational upskilling and reskilling on a global basis, there's no one concentration in tech. We do very, very well in financial services, as I mentioned earlier, as well as professional services, consulting, healthcare, retail and so on and so forth. So that does play to our advantage in that. If any one sector does start to see softness it’s more impacted than other sectors. We do have the ability to tilt in other directions without really losing a step. But initially, the tech vertical was a vertical that we did see some pullback.

And then Sarah, getting to EBITDA profitability sooner, it seems like the prudent decision now, especially in ad tech. I'm curious what type of flexibility have you built in, in case some of these top line business trends maybe potentially deteriorate further?

So I think the macro environment, Q4, we really did see a pretty significant deceleration and elongating of sales cycles, and we do expect that to continue. At the same time, as Greg said, things do look like they're loosening up a little bit. We feel really good about the balance that we have laid out as far as confident in our ability to deliver profitability in the second half, even with continued macroeconomic pressure and at the same time being thoughtful about the ability to also step in and put our foot on the gas should things open up and take advantage of the opportunity. So it's a very balanced approach. We do not expect in our planning right now for anything to improve, and it can work in a little bit and we'll be okay. At the same time, we're still investing in the things that matter and we know the steps that we'll take really quickly when things start to loosen out.

[Operator Instructions] Our next question comes from Brent Thill with Jefferies.

This is David Lustberg on for Brent. I appreciate you answering some questions. Maybe just thinking about the overall enterprise opportunity. There's a lot of different players out there, it seems like everyone in education tech wants a piece of that pie. Just curious, how do you think about some of these newer entrants being maybe a little bit more price competitive, are you seeing any of that? Just curious to get your thoughts on the competition standpoint.

We're not seeing anything new in terms of competition upmarket in our enterprise segment. What you described as far as new entrants that are a bit more and price competitive, we're seeing that more down market in the SMB side of our business, and that's not a surprise. And we've seen that for some time now and we expect to continue to see it. And we're making appropriate adjustments if and where it makes sense to enable our teams to compete effectively in the SMB segment. But on the Enterprise segment, not seeing anybody new materially, and don't necessarily expect that to change in any rapid fashion. That usually happens over time. There will be no surprises as we start to keep our eyes on the landscape and better understand based on the customers' needs, whether or not there's somebody else that's out there that can fulfill those needs as successful as we can. So yes, that's about the best way I can answer it. Nothing material on the enterprise side, seeing it down market.

And then maybe for Sarah, I just wanted to double down on the comment around the FY24 guide. I believe you said reiterating what you said at the Analyst Day. But maybe just provide a little bit more commentary around what gives you confidence that you could get back to that level of growth. Obviously, it implies somewhat of a strong acceleration in growth. So I think you pointed out like '23 revenue is obviously well and so you have that impact. But maybe walk through what gives you the confidence that you can get back to that mid-20% growth in '24?

Yes, I think a few things. I think the first thing, and Greg mentioned this a little bit. But even though we're seeing some elongating sales cycles, our win rate was actually higher in Q4 than it was a year ago in Q4. And so we continue to see the strength in our business. We continue to see that -- our offering, which is fundamentally different from anything else that is out there because of our marketplace, because we can keep up with the pace of change and that pace of change continues to increase. It is a different offering, it is global. We have 14 local languages. We continue to see strength in our net dollar retention at 123%, for customers it’s over 1,000 employees. And so we have an enormous opportunity for expansion and upsell. We continue to extend and upsell with them. And we are increasingly -- our growth rates are based on Udemy Business. And so we've got stability in the consumer business. We think that stability is going to continue. We are very focused on what we can control and the things that we're investing in are going to continue to drive increased engagement and retention and improved unit economics, and all of that's going to result in top line growth. So we feel really good about the targets that we put out there.

I just want to add one thing, we mentioned this on prior calls. But we still are only 10% penetrated in our enterprise customer base. And our team, as Sarah just mentioned and I mentioned earlier, our win rates are increasing. Coupled with the trend of consolidation within these larger enterprises gives us a lot of confidence that we've got a lot of runway in our enterprise segment. At the same time, we're adding new enterprise customers every quarter. They give us more opportunity to expand and grow. So we very much believe we're on the front end of a massive opportunity on the enterprise side of our business, holistically, our business, specific to the question on the enterprise side, and we've got the right platform and the right team to go take advantage of.

The other thing I would add, and we've spoken about this a little bit as well, is continued traction that we see in Udemy Business Pro and our cohort based leadership offering, that's additional growth that we can take advantage of within existing customers and new customers.

Our last question is from Tom Singlehurst with Citi.

Actually, just a couple of quick ones, if that's okay. First one, that weakness in the sort of enterprise pipeline to the elongation of the sales process. Can you just give us a sense of whether there is a sort of geographic sort of nuance step? I know some of the other companies exposed to enterprise sort of L&D budgets of singled out the UK as a market has been weaker than the US, for example. So any color on that would be great. And then I've got a follow-up, if that's okay.

So let me make sure that, and I want to answer the question in two parts of it. But make sure you understand that our pipeline, on the enterprise side, is actually very strong, right? We feel very good about the pipeline. We feel good about the pipeline in Q4, what we saw was some of these opportunities slide into Q1, and we feel very good about the strength of our pipeline in Q1 as well as what we're seeing for Q2. That being said, yes, the decisions that organizations we're making in Q4 to hold on buying decisions while they better understood the macro as it related to their business and carrying that forward a bit into Q1 before they were able to lock their budgets in 2023 is not unlike anything that we're not -- we're doing the same thing. And I think as I've spoken with a lot of CLOs within our larger organizations that that same motion is happening across the landscape. And so what we're not seeing is we're not seeing anything different that we didn't see in Q4. And to your question around geography and segments. Our EMEA business, I know a lot of organizations have talked about softening with respect to the geopolitical issues that EMEA face as well as the macroeconomic conditions. Our EMEA business and our team, I can't say enough about our team over there, and our business continues to remain very strong, vibrant and healthy in EMEA, as it does in Asia Pacific and Latin America and around the world. So no, we're not seeing any one segment or any one region more negatively impacted than another. I would say our most mature business is North America on the enterprise side. So if anything, we're seeing a little bit of that slowness and hesitation on the tech side of the enterprise customers, as we talked about earlier, in North America. And as Sarah just mentioned, we are starting to see real positive signs of some of that loosening up and decisions being made and deals getting done. So encouraged by that early move in Q1. It's all to say, no geographic call out and feel very good about our enterprise business as we move into the year.

And the second question is around the cash balance, and I suppose, use of capital. I mean, you guys obviously have a lot of flexibility there. I presume sort of private multiples are coming down. I'm just interested in whether there's any appetite on your behalf to be more active with regard to M&A and maybe try and take advantage of the current environment, maybe add a little bit of inorganic growth to what you're doing organically?

We do expect there to be further consolidation in the category as well as we are looking at opportunities to do exactly, as you mentioned, potentially layer in some technology. Our capability that we believe would give us leverage. And there's a few different areas that we're looking at right now, not at liberty to go into those specific areas. But without question we're going to be opportunistic as we progress throughout the year and expect there to be opportunities for us to do just that. Sarah, I don't know if there's anything you'd like to add?

Yes, I think that's exactly right. And I would say some of -- the multiples have come down some, they're maybe not quite where we want them to be yet, but we think that, that's going to continue. And so we're actively looking at different opportunities that might make sense for us but we're not quite there yet.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Coccari for any closing remarks.

I want to thank everyone for joining today. It's been a pleasure getting to know all of you. We thank you for your continued support of the company. I hope our paths cross again some time. Have a good afternoon.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.