Medallia, Inc. (MDLA) CEO Leslie Stretch on Q3 2021 Results - Earnings Call Transcript

Medallia, Inc. (NYSE:MDLA) Q3 2021 Earnings Conference Call December 3, 2020 4:30 PM ET

Company Participants

Roxanne Oulman - Chief Financial Officer

Leslie Stretch - Chief Executive Officer

Conference Call Participants

Brad Zelnick - Credit Suisse

Phil Winslow - Wells Fargo

Tom Roderick - Stifel

Scott Berg - Needham & Co

Rob Oliver - Baird

Richard Baldry - ROTH Capital

Brian Schwartz - Oppenheimer & Co

Bhavan Suri - William Blair

Drew Foster - Citigroup

Terry Tillman - Truist Securities

Matt VanVliet - BTIG

Brett Knoblauch - Berenberg Capital Markets

Operator

Good afternoon and welcome to Medallia's Third Quarter Fiscal 2021 Earnings Conference Call. Joining us today for today's call are Medallia's CEO, Leslie Stretch; and CFO, Roxanne Oulman. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions].

With that, I would like to turn the call over to Roxanne Oulman for introductory remarks. Roxanne?

Roxanne Oulman

Thank you, Mike. Welcome to Medallia's third quarter fiscal 2021 earnings conference call. We issued our earnings release a short time ago and furnished the Form 8-K to the SEC. To access the press release, please see the Investor Relations section on our website. With me today on the call today is Leslie Stretch, President and CEO of Medallia. Before we begin, please remember during the course of this call, we will be making forward-looking statements about the operations and future results of Medallia that may vary and involve many assumptions, risks and uncertainties, including those related to the COVID-19 pandemic.

To the extent possible, our forward-looking statement seeks to take into account the impact of COVID-19. However, the crisis that this pandemic has created is very fluid and the situation is constantly evolving. If any of these risks or uncertainties related to the forward-looking statements develop, or if any of the assumptions related to the forward-looking statements prove incorrect, actual results could differ materially from those expressed or implied on our forward-looking statements. For a discussion of our risk factors associated with the forward-looking statements, please refer to the text in the company's press release issued today and to our periodic reports filed with the SEC, including our Form 10-Q dated September 9, 2020. We disclaim any obligation to update any forward-looking statement.

On the call today, we will refer to both GAAP and non-GAAP financial measures. The non-revenue financial figures discussed today are non-GAAP unless the measure is stated is a GAAP number. Please refer to today's press release for a reconciliation of GAAP to non-GAAP financial performance and additional disclosures regarding these measures. Additionally, in conjunction with the release of our earnings report, we have posted on our website at medallia.com under the Investor Relations section, additional charts that identify trended metric performance that we believe will aid in understanding and evaluating our performance over time.

Now, I'll turn the call over to Leslie.

Leslie Stretch

Thank you, Roxanne. Good afternoon, everyone. Before I begin my prepared remarks, I would like to thank every Medallian for their hard work in 2020. As evidenced by the quote from IDC’s Alan Webber in our earnings press release, companies seek to engage their customers and employees with more intent than ever. It's crystal clear that customer and employee feedback gained from broad and deep information sources, including digital dialogues, voice, video and ideas, provides organizations with powerful insights and direction. In recent research detailing IDC’s nine future enterprise agenda elements, it was reported that customer experience programs have risen from eighth position to second in the priority list in the last year. Medallia’s unique ability to capture, organize and distribute feedback, deliver powerful insights and great critical actions, is key to our future growth in existing, new and emerging markets.

Turning to a review our Q3, I was very pleased with our performance in the quarter. We continued to operate a completely virtual business and had our best new logo quarter ever. Increasingly, we see customers asking for one provider of voice of customer, voice of employee as well as market research, text analytics, social listening, video, voice, ideas and messaging. I believe that Medallia is unique in having all of these technologies today.

And since we have record revenue and record recurring revenue, and our operating income exceeded expectations again, we grew our SaaS revenue by 22%. We added 64 new logos in our enterprise business and our mid-market growth continues to deliver. We had over 90 go lives, almost a 40% increase from Q3 last year. We also had more than 20 partner led implementations, including some of the larger projects. We now have over 1,000 enterprise customers. Our new log activity underlines the importance of our broader signal capture, deep engagement technology and robust communications capabilities. New logos accounted for almost 50% of new bookings, as compared to approximately 35% for prior quarters.

New logos accounted for almost 50% of new bookings as compared to approximately 35% for prior quarters. New logos included Deutsche Telekom, Jaguar Land Rover in the UK, Modelo Brewing in Colombia, KeyBanc in North America, National Bank of Canada, Radisson Hotels in the U.S., a major electronics manufacturer in Singapore; a non-profit financial services company in Central America, our first new logo with our new partner, IZO; Bradesco in Brazil, giving us 2 of the top 3 banks in Brazil and 5 of the top 10 banks in Latin America. We also signed Woodside Homes in Utah and Jackson Hewitt Tax Services.

In the public sector we had notable wins at the GSA, FEMA, City of Tempe, City of San Diego and Her Majesty's Land Registry. During the pandemic, a large pharmaceutical company plans to use Medallia Digital to provide vaccine information to healthcare providers and patients. McDonald's in Australia is already using Medallia for contact tracing.

Our renewals also went well in the quarter with strong multiyear renewal cross-sell and upsell action. A major insurer renewed for $11 million in total contract value. A major Japanese conglomerate expanded and renewed in a $5 million total contract value agreement. A major technology hardware company renewed $9 million in total contract value and one of the world's largest consumer technology and communications businesses renewed for $3 million in total contract value. We also had some retailers again renewed our commitments, one renewed for over $6 million in total contract value and another for over $3 million. And a cruise line renewed for $4 million in total contract value.

Turning to our acquired technology. Contributions from our tuck-ins are small so far but fast growing, and I'm very pleased with new bookings from our acquired technologies, resulting in good new logos and some seven figure commitments. In addition, the industry analysts group have commended our approach to building out the platform in this manner. Specifically, we've made four technology focused acquisitions this year that expand feedback, signal capture, and the engagement and action-oriented capabilities of our platform. We work closely with our customers who see these as essential experience management technologies. The breadth of our platform is a key competitive differentiator as evidenced by our new logo and competitive win rate success.

I'm pleased about our recently strengthened contact center offering combined with the power of Medallia with our new speech and frontline engagement capabilities.

Since the acquisition of Voci, which now forms the core of Medallia Speech, we have signed several six figure deals with large financial institutions, a seven figure deal with a large retailer, along with several other six figure deals across a broad range of verticals. Our Q3 addition of Stella Connect for contact center agents has been well received by customers showing good promise for Q4 and beyond. Stella Connect brings the power of feedback to the live-time environment of the contact center, and specifically adds potent capabilities to the new virtual service center world that is emerging today. This opportunity is important for now and the future and the Stella capability is a central element of our partnership with Five9 which we announced this week.

With Stella we've already sold into the e-commerce division of three large retail customers, added one of the world's largest game publishers, Riot Games, and StockX, one of the fastest growing e-commerce companies. These deals are significant on their own, but importantly, represent new entry points for Medallia's core experienced cloud offering. Sense360 recently acquired initial use case with a quick-serve restaurant space which has pivoted the curbside pickup and delivery. There's also an emerging retail proposition, the proposition is well understood by existing Medallia customers. And this is a natural cross-sell. These and our acquisitions are important not just because of their contribution to future new cross-sell and upsell bookings but because they bring us customers with contracts, making it simpler to cross-sell Medallia Experience Cloud and the Medallia Digital to new prospects.

Highlighting our core platform, it's noteworthy that our digital capture technology and Medallia Experience Cloud is seeing dramatic growth of digital signals. We had some of our largest digital programs go live in Q3, including one of the largest Canadian banks and one of the largest automotive manufacturers in the world and one of the largest consumer electronics companies in the world. Specifically, a large U.S. bank has rolled out this technology to over 30 million mobile app users. And this is the use case we can repeat everywhere. Year-over-year we've seen a nearly 50% increase in our digital customers.

Combining digital technology with Medallia Experience Cloud and Stella Connect delivers real savings and speed of resolution in contact center use cases. One large property and casualty insurer realized in one area a 28% reduction in wasteful and time consuming call center calls as a result of deployment Medallia Digital. In another case, a major retailer deployed Medallia Digital Feedback combined with web analytics across customer experience and e-commerce teams, discovering and resolving quickly a single issue that was worth a potential $5 million per month in lost revenue. Both these examples proving the clear ROI of our solutions.

On the product front, we're expanding language support for Medallia Speech with 7 key languages being added to our portfolio. Our messaging platform Zingle achieved HIPAA compliance in the quarter. We announced Medallia’s conversations to deliver sentiment based adaptive surveys, delivering smarter customer interactions faster and increasing customer response rates. For our core platform, we added Zoom, Slack and Teams integrations and added customer life cycle mapping in our customer success model.

Turning to employee engagement and experience, we've added our digital employee experience solution enabling HR to get in-the-moment feedback from employees through a micro post digital interaction. Just this November, we went live with one of our largest employee experience implementations, putting over 300,000 employees of a company on the platform. We started our integrator influencer technology partnerships in the quarter. We now have 40 implementation targets, a 70% increase from the year ago. Our service Quickstart solution for ServiceNow makes it easy for customers to share in-the-moment feedback.

Medallia Tableau Connector brings together Medallia's best-in-class experience insights with Tableau's advanced analytics and data visualization capabilities. We formalized a new partner agreement with Oracle and Ipsos in Medallia, partnered to close Jaguar, Land Rover, a new win that I highlighted earlier.

We saw continued acceleration with Deloitte. We signed a new reseller agreement and had several joint wins with Deloitte’s government practice. Additionally, we signed over a dozen new ISV partners, including [Vizia], [Ipsos] in Latin America and KPMG in the UK. Our professional services business continues to be a strong differentiator for us, and this is made clear by direct feedback from our customers and our own Medallia implementation. We again delivered a strong go-live revenue and margin performance in Q3.

As I previously mentioned, industry analysts are very positive about our technology roadmap. This week, we were proud to be named a leader in the inaugural Gartner Magic Quadrant for our space and received the highest placement for completeness of vision. You can download a copy of the report from our website. We are thrilled to be named the leader and recognized for our vision. We believe this result is a testament to our customers who helped shape our vision and roadmap and our employees who are the best in the business. It's clear that we have the deepest functionality for collecting and analyzing direct, indirect and inferred feedback, and that we have strong partner relationships. We also can confirm that we have the highest percentage of client programs with over 1,000 users, as well as the highest average number of departments for clients using our software out of all experienced management vendors.

Multiple analysts recognize our powerful vision and our unique capability for operationalizing voice of customer scale, and our ability to measure the business value achieved from customer experience programs.

So now with three pandemic quarters behind us, we're pleased with the company's consistent performance. We see solid growth in our business. We have had a strong start to Q4, again underlined by a 7-figure life sciences deal already executed. And so we're providing today a high-level preliminary view of the coming year. Our projections reflect our confidence in our diversified end user markets, product roadmap and technology leadership. However, It's important to point out our projections do not depend on a significant recovery in the travel and hospitality space where we have a strong presence. As we grow, we intend to continue to invest in sales, marketing and product to meet the needs of a very significant market opportunity.

I'll now hand over to Roxanne for her report on our financial performance in Q3 and forward projections.

Roxanne Oulman

Thank you, Leslie. And good afternoon, everyone. We reported strong financial results in Q3 including record total revenue and record SaaS revenue. As a quick reminder, unless otherwise noted, all numbers except revenue mentioned during my remarks today are non-GAAP. You can find a reconciliation from GAAP to non-GAAP results in today's press release. Total revenue for Q3 was $121 million, it increased at $18 million, or 17% over Q3 of fiscal 2020. In Q3 subscription revenues were $96.9 million, an increase of $17 million or 22% year-over-year. Q3 included approximately $600,000 of subscription revenue from the acquisition of Sense360, which was announced subsequent to the earnings call, and thus, was not contemplated in our prior guidance.

As we've noted on the past few calls, we have modified subscription terms, flexible payments, or invoicing terms, in exchange for extensions of existing contracts for certain customers hardest hit by the pandemic. On average, the extension period works for one additional year. Consistent with what we projected on our last earnings call, the modified subscription terms have negatively impacted our subscription revenue in Q3 by approximately $1 million and by approximately $2 million on a year-to-date basis.

We expect a similar impact in Q4 of fiscal 2021 and in Q1 of fiscal 2022 as we lapped this. It's important to keep in mind that this has no impact on our long-term current economics. As a reminder, the majority of our contracts are multiyear, irrevocable, include contracted minimums, and we expect your customers to honor their agreements. Professional services revenue was $24 million for the quarter, which increased 3% year-over-year. Recurring managed services revenue accounts for more than 50% of our total professional services revenue, which is consistent with recent quarters. As a result, recurring revenue continues to be at 90% of total revenue.

Turning to some key metrics. We continue to see strong growth in new logos. We ended the quarter with over 1,000 enterprise customers, an increase nearly 45% year-over-year. In Q3, we added 64 new enterprise logos and approximately a 100 from our acquisitions of Stella Connect and Sense360.

For the 12 months ended October 31, 2020, our dollar-based net retention rate was 115%. Customer M&A and bankruptcy drove the change in our net retention rate. We believe our strong net retention rate underscores the ROI our platform provides and our ability to retain and steadily expand businesses within our existing customer base.

Turning for RPO or remaining performance obligations. As I have shared with you previously, our RPO metrics may be impacted by contract duration and extensions, as well as timing of renewals of multiyear contracts. So while RPO provides for strong visibility, it may fluctuate from quarter-to-quarter. As of October 31st, total RPO was $732 million, an increase of 25% year-over-year. Current RPO, which is the amount we expect to recognize as revenue over the next 12 months totaled $346 million, an increase of 19% year-over-year. Non-current RPO totaled $386 million, an increase of 31% year-over-year. We are now facing tougher comparables in the non-current RPO metric on a year -- versus a year ago basis as a result of our success last year in signing multiyear renewals.

I'll now turn to our non-GAAP gross margins and operating expenses. Subscription gross margin -- subscription revenue gross margin was 81.1% compared to 81.5% in the year ago quarter. In Q3 professional services gross margin was 16.1% compared to 16.5% in Q3 of the last year. We continue to focus on building out our partner ecosystem. So, we expect professional services gross margin moving to between 10% to 12% in Q4. Sales and marketing expenses in Q3 were $46.3 million or 38% of revenue. R&D expenses were $22.9 million for the quarter or 19% of revenue. R&D remains an important investment area, as we expand our platform. G&A expenses were $11.2 million or 9% of revenue in the quarter. We expect additional leverage on the G&A line over the longer-term.

Non-GAAP operating margin in the quarter was 1.7%, compared to a negative 2% in the year ago quarter. Non-GAAP net income was $1.1 million compared to a loss of $900,000 in Q3 of last year.

Turning to the balance sheet. We ended the quarter with $657.1 million in cash and cash equivalents, current and non-current marketable securities. The increase in cash included the proceeds of approximately $497 million from the convertible note offering in September. In connection with the convert in order to reduce potential dilution, we purchased a capped call that upon conversion, the notes will not be diluted until the stock price is $58.30 per share or higher. Subscription deferred revenue was $172.1 million, an increase of 21% over the prior year.

Let's move on to discuss subscription billings, which we define as subscription revenue, plus change in sequential subscription deferred revenue and contract assets. As you know, there are a wide variety of factors that influence this metric. Therefore, quarter-to-quarter fluctuations in billings should not be taken as an indication of changes in future revenue. We believe that the 12 month trailing subscription billings growth rate is a more meaningful measure of our performance. For Q3 of fiscal 2021, our trailing 12 month subscription billings growth rate was 20%. On a trailing 12 month basis, subscription billings were negatively impacted by approximately $5 million, due to new bookings with invoicing terms that ramp over a multiyear period.

Now turning to cash flow. We used $14.9 million in cash from operations during the quarter, representing an operating cash flow margin of negative 12%, an improvement from the negative 18% we generated in Q3 of last year. As a reminder, we historically experienced seasonality in cash flow from operations, given that over 40% of our billings occur in the fourth quarter. As a result, our operating cash flow has been positive in Q1 and Q4, followed by cash flow from operations, being negative in both Q2 and Q3, as it has been for the past few years. We anticipate this seasonality to continue.

Moving to guidance. For Q4, we are projecting total revenue to be between $123.5 million and $125.5 million, representing a growth rate of 12% to 14% year-over-year. We expect subscription revenue to be in the range of a $100.5 million to $101.5 million, representing growth of 17% to 18% year-over-year. For Q4, we expect non-GAAP operating income to be in a range of $200,000 to $700,000. We expect other income and expense to be an expense between $500,000 and $800,000, primarily due to interest expense associated with the convert and reduced interest rate environment.

We project income taxes to be in the range of $500,000 to $1 million. We anticipate basic weighted shares outstanding to be approximately 151 million and fully diluted weighted shares outstanding to be approximately 180 million.

Finally, we anticipate our capital expenditures in Q4 to be approximately $5 million primarily related to enhancing our data centers to meet our customers’ demand. On a full year basis, we are projecting total revenue of $472.7 million to $474.7 million, representing a growth rate of 17% to 18%. Professional services revenue growth is projected to be in the low single-digits, as we have significantly expanded the number of delivery partners this year as Leslie discussed previously.

In addition, we continue to reduce implementation costs through our preconfigured industry packaged solutions. For fiscal 2021, we are projecting subscription revenue of $379.3 million to $380.3 million, representing a subscription revenue growth rate of 22% over the prior year. Note that we estimate that the COVID concessions will create a headwind of approximately $3 million. We expect the acquisitions we made in Q3 to contribute a little over 1% to our fiscal 2021 subscription revenue.

For fiscal 2021, we expect basic weighted shares outstanding to be approximately 145 million and fully diluted weighted shares outstanding to be approximately 176 million.

Looking ahead, while we have not finalized our fiscal 2022 planning cycle, we'd like to provide a preliminary outlook for next year as we remain confident in our execution, diversified end user market, product roadmap and leadership position. For fiscal 2022, we expect total revenue to be approximately $555 million with subscription revenue of approximately $457 million.

In conclusion, customer intelligence has become an integral part of digital transformation and is a critical area of software spend. We are committed to maintaining our innovative edge and the opportunity to invest in R&D and our go-to-market efforts.

Leslie and I will now take your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions]. Your first question comes from the line of Brad Zelnick from Credit Suisse. Please go ahead.

Brad Zelnick

Great, thank you so much for taking my questions and congrats on a nice quarter. Maybe first for Leslie. Leslie, as more of your customers touchpoints with their customers and users go more digital versus physical, and will likely only be more so digital into the future, how has that changing the needs of customer experience management? Does it make it easier for you to help close the feedback loop and highlight the value of your solutions? How is that helping if at all drive more business?

Leslie Stretch

I think that's a great question to answer, thank you. I think that the digital story really plays into our early investments. We invested earlier than anybody else in the digital technology. If you think about it the way people -- every customer journey, every employee journey has now changed, has become more intense and strong, it’s faster, it’s more urgent and all that speaks to technologies that serve that communication situation. And so -- and our conversations technology, our digital technology, our instant voice, video, and so on, all really create much more effective powerful responses than just surveys. Survey is still important. But if that's all you've got in your back then that is a different type of communication medium, longer winded, more orientated to the physical world. And so I think we're beautifully positioned. And actually remind you, with the spectrum of digital capture that we have, everything is speeded up, journeys have changed, everything is shorter, everything is more intense. And I highlighted in the prepared remarks that we had 50% growth in digital customers and I highlighted some of the large digital rollouts that are an effect of what you just described in your question.

Brad Zelnick

And maybe just follow-up for Roxanne. Roxanne, can you share with us what your assumptions are for the initial fiscal '22 guide that you’ve shared?

Roxanne Oulman

So we put our fiscal '22 together, our guidance, and as you know, we're still in our planning process, we really looked at the strength of the business that we've experienced in the last two quarters, and also the strength in our pipeline. And based on what I see, and confident with what we've provided for our fiscal FY '22 guidance and we’ve posted 22% or we are guidance with 22% subscription growth rate this year. And we're excited about what we see overall, and we're not anticipating that there will be any significant recovery in travel or hospitality in FY '22.

Operator

Your next question comes from the line of Phil Winslow from Wells Fargo.

Phil Winslow

I really want to drill into the employee experience side that was something that you highlighted over the past couple quarters. We've heard some -- from some other vendors into the traditional ATM space about the success of return to work applications. So my question for both, you Leslie and Roxanne. But when we're talking to customers about employee experience, what are you hearing from them in terms of sort of planning for return to work and also tying that together with customer experience? And then just a one quick follow up to that.

Leslie Stretch

I think the situation that we're in still is that this whole situation is highlighted the need to communicate more effectively and faster, with normal modern and exciting mediums instead of the annual 360 review, which is kind of the domain of the traditional HR players to be honest. And so what we're seeing is people want to create safe spaces for employee groups in different constituencies. They want to have global communication, global virtual communication, they want to have the ability to toggle between anonymity and ID communication and dialogues and we want to be able to ask questions at any time and not depend on a structured sort of old school survey. And so that's really coming to the floor. We mentioned I think on our last call that we've added quite a number of new large employee experience customers and I highlighted in my prepared remarks, we had one very large -- and we are not allowed to name them, but one very large deployment just go live. And so it's really critical. But I think in everybody I talk to everyday, even yesterday talking to a major organization, it's number one priority to create this connective tissue. And at the moment, they're served 360 degree reviews, periodic surveys and what I would regard as old technology effort. So I think we're very well positioned but it's a permanent feature of the people in the future.

I think people were called out in not having this type of communications capability in place as the pandemic began. So I don't think we're going to go back once a year, asking our colleagues, our employees, our team members, how they think we're doing or how things are, that is going to go away, it's got to be a consistent and a safe communication place and our digital technology creates that.

Phil Winslow

Then just one follow up, as you've noted some customer wins this quarter, one of ways was actually in the hospitality space, hotel, restaurants, obviously some of the more impacted industries here, which I think is surprising, some people that may be spending anything right now. But when do you think about the reserve, what do you do in business with some of the impacted issues, what are they telling you about why they are prioritizing spend on Medallia now?

Leslie Stretch

Well, over the prior reasons in the employee context, all of those messages really apply to customers too, deeper, more persistent connection. On the hospitality -- the corporate side of hospitality, as Roxanne said, we don't expect and are not planning on a return there. We don't need that to make the projection. But the domestic travel, the leisure travel sector has had some recovery. But this particular business, it's a decent-sized commitment as well. They just want to be ready for that phased return, the domestic traveler, the leisure traveler, and the corporate traveler, and so on. And they actually do have some decent occupancy. So, they do need the feedback technology, they have tried other survey technologies in the past, and they want to move to a modern, all integrated platform, voice, video, et cetera, all of the offerings that we have.

But I also highlighted renewals. And the reason I highlighted those renewals is because some of them were what we consider to be stress areas. And I don't want to embarrass or identify any company there. But it's important that even in distressed times, they're making multimillion dollar commitments to this digital technology. That's been very encouraging. And my team has been there, that renewal team, large renewal team has been there throughout the year.

Operator

Your next question comes from the line of Tom Roderick from Stifel. Please go ahead.

Tom Roderick

So Leslie, I guess I'd like to start with you. I mean, you rattle off a number of the seven and eight figure deal renewals in the quarter, number of different industries. And if we think back to the March quarter and the feedback at that point, I remember you calling out that large deals were harder to come by, you're going to focus a little bit more on midsized deals and paring them down. And then what we saw in the summer, and then certainly what it seems like in the fall is sort of a renewal of this large deal activity. So, I was hoping you could sort of more broadly speak to the demand environment for those seven and eight figure deals. And in particular, if you could sort of talk about those renewals? Were you seeing notable upsells from customers’ cross-sales? Were they purchasing more expanding usage as part of the renewals? Just some more commentary on some of those bigger deals that you highlighted would be really helpful.

Leslie Stretch

Yes, great question. So, this is not actually by in cyclical terms our biggest renewal quarter, Q3 is not our biggest renewal quarter. But that's another reason I wanted to highlight those renewals. But I think the key thing in the month of early March is that nearly 50% of bookings came from new wins and new competitive wins in many cases where we saw survey market research players putting in low-ball deals and they weren't successful as we were. We won the lion's share of the enterprise logos. And so we had that, we have the renewals. And we also have this now a year old, very young, mid-market business really performing as well. And so it's really across the spectrum. Our goal was to have nice, even

no drama quarters where we're getting something from mid-market, our renewals are solid and we're getting some decent share and actually more than our fair share of the enterprise deals.

So I think that Q4 is actually an interesting quarter for us and it's one of our bigger renewals quarter, so it’s one of our harder compares. But I think the new business and renewal and upsell and cross-sell mix will continue. But the key highlight was nearly 50% from new bookings in Q3 was just one of the highs we've ever had.

Tom Roderick

Roxanne follow-up for you. Just I think, if I heard you correctly, and I know you've been getting a lot of questions about the acquisition contributions, I think you might have said 1% of fiscal '21 revenues coming from acquisitions. So perhaps you could repeat that. But then independent to that, knowing that those acquisitions were more back end loaded, when they closed and how they'll contribute to GAAP revenues, could you provide a sort of a like-for-like compare of how we ought to think about that -- those acquisitions contributing to your initial look at FY '22? And if the answer is we can't project what they're going to do or we don't know exactly, perhaps, if you could just take it annualized look at and what those acquisitions were in cumulative fashion, and then apply that. But just any more commentary you can have, as you constructed your fiscal '22 guidance? Thank you.

Roxanne Oulman

You’re right, Tom. What I shared on the call is that the revenue from -- the acquired revenue from the acquisition is very immaterial. When we make these acquisitions, we are looking for technology and we are looking for an opportunity to really take this and grow it. As we have and Leslie shared with you on the call that we've had some very successful wins with our Medallia Speech product. We've had several six figure and we've had seven figure deals. And we're very focused on using this technology to build out the best possible platform. And you're seeing that in industry in large, you're seeing that in our new logos. And you're seeing that in the feedback that we get from our customers. And as we have shared with the previous one, when we make these acquisitions, we do work closely with our customers. So the amount that it impacts this year is nominal, and the amount that it impacts next year is nominal. What we're focused on is building out this platform and our ability to continue to cross-sell and upsell this technology as successfully as we have at this point.

Operator

Your next question comes from the line of Scott Berg from Needham & Company.

Scott Berg

I guess, two for me. First of all, Leslie, you announced a partnership of Five9 this week. And the company has been active -- Medallia has been active in the contact center space trying to I guess nudge your way and there was a couple of acquisitions. Could you talk about that relationship, what it gives you and maybe where your functionality in the contact center starts or ends versus where it’s today?

Leslie Stretch

Yes, it's a great question. So brand-new partnerships, I've just announced. So I think there's a multitude of solicited, unsolicited signals that can be collected outside of the call center that give a much richer view of the customer. You combine that feedback with some of the absolutely vital data that Five9 collects, think of all the voice data that they collect, and you get a much more powerful picture of customer. And we have some good joint customers and some good joint initiatives underway. Early days in the partnership, but it makes perfect sense to have that connection.

Our Stella Connect product is really complementary, again, because it's using the feedback data sources to create their coaching, their live in-the-minute coaching scripts and ideas and distribute those to now distributed virtual service center people. So I think the combination actually helps deliver this idea of service rather than just responding contact center environments. Those are changing. I'm certain Five9 is a leader in that space. So really happy with that partnership.

Scott Berg

Got it. Helpful. And then last question on the M&A front. 2020 and circling back half of 2019 has been active for you guys. As you look forward over the next 12 to 18 months, do you think the pace of acquisitions for the company changes materially? Or is it really just being opportunistic in terms of what you see at any one point in time?

Leslie Stretch

Well, without giving everything away, I mean, I think there are technologies that we really like that some of -- which we're building. We're building more than we buy or building a ton of things. I gave some small summary of some of the product developments underway at the moment.

But there's always opportunities. The market presents opportunities, and we're always on the lookout. We have to be. There are some -- there are -- the beauty of this platform is that there are a number of signals, a number of AI technologies number of data technologies that we really like. And so I expect that we'll continue. Right now, we're about focusing in on execution for the remainder of this year. But I expect us to continue as other SaaS companies do to take opportunities as and when they arise. We're well financed to do that. It's just part of our process and approach. But right now, let's focus on executing for the remainder of the year.

Operator

Your next question comes from the line of Rob Oliver from Baird.

Rob Oliver

Great. I also just wanted to touch on the renewals, Leslie and recognizing that obviously, but as you mentioned, half of the new bookings came from new logos. I'm just curious though, you mentioned the cruise line, and I guess a follow-up to Tom's question, and you didn't want to call out any particular industry but a $4 million multiyear renewal with a particularly distressed industry. I'm just curious, with all of the technology tuck-ins that you guys have made over the past year, a very small revenue contribution right now. But when you look at something like a cruise line or other distressed industries, when you come into a renewal with those sorts of customers, how much additional leverage does it give you guys? And how much of an opportunity does it give you to park the innovative new technologies with those customers who might otherwise be maybe looking at down spend in this environment? And then I had a quick follow-up.

Leslie Stretch

That's a great question. I think that we -- certainly, our breadth of offerings and our modularization of the offerings gives us fungibility and gives us the ability to add value. That's not really been a big feature. These have been more apples-for-apples types of renewals. And actually, these companies believe they have futures, and they have started out quite bright futures actually. And so they are very positive and upbeat about their future. And this is part of their investment to be connected deeply for the future.

So we actually do expect -- we haven't had much revenue from the acquisitions. We do actually expect upsell and cross-sell bookings as a result. We don't expect that to use them as concessions to keep people on the hook. We haven't had to. But so I would say in travel and hospitality, we don't -- we're not depending on some magical vaccine-driven recovery there. We don't need that for our projections.

But actually, what we've seen in dialogues with that sector, which is very important, is that people are determined. They've learned a lot. And they won't have a dialogue with their customers right now, even if it's a quieter time for them, to prepare for the future. What do you expect from PPE and safety? What do you expect from the way we conduct our operations in the future, pandemic, post-pandemic? So they want to have that dialogue, and so they really need the technology and the connection.

Rob Oliver

Great. That's helpful, Leslie. And then, Roxanne, I think you said that on -- the billings had been -- with a $5 million impact to billings that had gone into multiyear contracts. I'm just curious if that is also a component of some of the relief that you guys are providing to customers. And I apologize, I think you might have alluded to that previously, but the ability to renew over a longer time frame.

Roxanne Oulman

So what I was referring to when I was talking about the billings impact is that we have had limited situations with new customers that we ramp the invoicing over time. So we may invoice them less in the first year than we invoice them in the second year. And so you're seeing that, that is providing some headwinds.

And so what we're really focused on is all customers at this point in all industries. We think we have a product that everyone can use that is essential not only today but is essential in the future. And we're working with every customer. New -- we have new customers who -- life sciences and health care customers, for example, that using Medallia and using this technology is completely different. And so if we have -- if we're providing ramped billing and that helps them as they become -- as they continue to grow and build their platform, that's very effective for both of us. So we're really pleased about what we're seeing overall.

Operator

Your next question comes from the line of Richard Baldry from ROTH Capital.

Richard Baldry

So turning back to acquisition potential. Seen a fairly expensive one completed of late by another SaaS vendor of material scale. So how do you see price expectations changing in sort of the companies you're talking to? Do you think it's still rational? Or is there some of that rationality sort of dissipating in your communications?

Leslie Stretch

That's a great question. Of course, we were in a bit of a flagged deal, because we didn't quite step up there also and couldn't find enough money under the sofa. But look, we are not -- in our history as a management team, as you know, is not to be irrational buyers. We're very frugal with our investors' and customers' money overall. We're looking at -- that's why we like early-stage winners and technology that tend not to have invested much in sales and marketing, which is why they don't have a lot of revenue contribution in the early days. We've done very well from that.

If you look back at our digital product now, there was an acquisition years ago. It's done extremely well. If you look at our ideas technology, has done very well, messaging and so on. And so we're going to keep that kind of target criteria if you like. We do talk to private companies, right? They always -- private companies always think they're worth way more than they may really be because they haven't had the discipline at the public market, making money, looking at billings, looking at growing their business consistently and steadily. And so we're not interested in overpaying. We're not that yet. We're not that scaled yet. We're interested in smart technologies to. Got a few things. Don't want to reveal them to our competitors who always listen to this call. So we really are going to keep that kind of criteria.

Right now it's about executing in Q4, setting us up for next year and actually hiring more mid-market salespeople around the world. We've got some pretty stiff targets. We actually have enough sales capacity to do our projections, but that shouldn't mean that we should stop investing in sales and marketing. And we've got a big build program underway. Our road map is massive, and we're spending a lot of time and money on that. And so all of those things are important.

Richard Baldry

And turning back to when you just touched on a little bit. But in your wins of people like FEMA or GSA, who maybe they're a bit more active in a COVID-type environment, but I don't tend to think of government agencies as particularly interested in service and what people think of them given their monopolies are positioned. So maybe can you walk us through sort of the mentality behind dealing with federal or any government entities versus private industry, what you see there and how broadly you think you can penetrate those types of markets?

Leslie Stretch

Yes. Well, that is a great question. Thank you for that. And -- but I respectfully disagree with you on this one, Rich, because I think the federal state, local and education academic is really important. I'll come to that. We have seen also great progress and I mentioned for this Q4 already a good new life sciences deal, great progress in health care and life sciences. Think patient experience. Why should citizen experience be any different?

I can tell you from the hard work of our government team and also some of the brilliant government colleagues that we brought into Medallia that every tier of government is passionate about citizen experience and, at the moment, patient experience, and they absolutely want to avail themselves of the very best technology. And so we positioned ourselves through FedRAMP qualification and through the right commercial structures to make it easy for government to acquire cost-effective, up-to-the-minute citizen experience technology versus the old survey stuff that used to be there.

And also in the academic market, actually, we only gave a few logos on the call. We actually had more success than that, that we didn't report on the call. We don't want to name the agencies involved. But also in the academic market, we've had a couple of survey players there, frankly, shooting fish in a barrel and frankly, overcharging higher education for simple survey services. And we intend to have a crack at that market. There's absolutely nothing to lose for us going after that, too. And that's part of our investment in sales and marketing around the world as well. It's a good market.

So I'm actually enthusiastic about our progress. We have almost nothing in the sector a year ago. And this year, the government team have started to really make great strides forward, both at federal and state and local. And I mentioned a couple of those there. I think it's a big opportunity actually. Great question.

Operator

Your next question comes from the line of Brian Schwartz from Oppenheimer & Co.

Brian Schwartz

Good job on the quarter here. Leslie, first question for you. It has to do with the investment profile here for next year. It's really a question on the sales and hiring. Are there any particular product areas and/or geographies that you see that there's a big opportunity where it's more of a function that the company just doesn't have enough sales bandwidth today? I realize you got to expand everywhere, so I understand that. But is there anything that stands out to you in that front in terms of either geographies or product lines?

Leslie Stretch

Yes. Actually, a great question. Actually, both and also verticals. I kind of alluded to some of the new verticals there. We're having great success in health care and life sciences. There's a lot more to do in both of those markets. And also federal, I mentioned.

Geographically, the big regions, Latin America actually had a nice recovery in Q3, but the big regions for us are EMEA, which had a great Q3 and also APAC, which is a phenomenal business with great leadership, a great team out there. And so we're investing in all of those. I don't want to go into too much detail for the competitors that's on the call read the transcript and all that obviously. But great opportunities in those regions and frankly, competitive opportunities, too, that we see. We see disruption and dislocation and just people not catching up with the spectrum, the digital spectrum that we've created. So there's a gap that we can exploit. So definitely APAC and EMEA and of course, always all day long, North America.

Brian Schwartz

And one for Roxanne, just a quick one on the dollar base in that expansion number. You kind of -- you talked about it in your introductory comments, why it had some pressure here this quarter. But my question is do you feel that this sort of mid-1 teens range is an area that the company would bottom out at? I know there's still a lot of uncertainty out there in the market. I don't want to peg you down too much. But do you feel better that, that metric would normalize here in the quarters ahead?

Roxanne Oulman

So historically, we have been in the mid- to high teens. And we had a great quarter not only from a new logo perspective but also from an expansion perspective. And as I shared on the call, our net retention rate was impacted by some customers who either filed for bankruptcy or merged with another company or were acquired. However, when I look ahead, we've shared before that we think ultimately we should be able to get this net retention rate over 120%.

We have over 1,000 customers at this point. We added, 50% of our bookings came from new logos. So -- and we have a very robust product portfolio with 15 different modules that we can cross sell. And it's not just cross sell. It's the expansion. And you heard Leslie also talk about the Magic Gartner and the other analyst feedback that we've received in regards to the fact that we have the most robust platform with the most individuals on it and is used most broadly throughout the departments of these organizations.

So I'm optimistic about what we can do in the future. I'm optimistic about what I see. We have 1,000 new customers, 1,000 customers that we can continue to cross sell and upsell to while we continue to add new logos.

Operator

Your next question comes from the line of Bhavan Suri from William Blair.

Bhavan Suri

Let me echo congrats, especially on the new logo adds. That was really solid. I want to touch a little bit on the partner systems outside of your bid to acquire a collaboration company. You obviously partnered with Adobe, Salesforce, ServiceNow as well as global SIs. Leslie, this has been part of your plan coming onboard. You added the partnerships. I guess just give us an update on how they're performing according to your expectations, both the software partnerships as well as the delivery partnerships.

Leslie Stretch

Yes. I'm actually quite pleased. I can see it's pretty early days, but most of these are less than a year in the making and some we just announced new ones too. And so it's very early days for the channel. I'm actually very pleased with what the channel teams have done. And just the appetite with these partners, we were in our second year actually with Adobe now. That's probably the longest one. And also ServiceNow integrations. I see collaboration. There's good collaboration in the field. And some of these large deals, you'll see Salesforce, ServiceNow, Adobe all day long. They're all in there.

So having these integrations and partnerships and in some cases, actually, revenue share agreements is a good thing, and it's really bolstered our win rate. There's no doubt about that. I think I attribute the increase in the new bookings percentage to those partnerships. I wouldn't single out any one of them. I don't think that's appropriate, actually, but those are probably the top ones.

But we've got some great new partners, market research partner, Ipsos, which is a super partner company as we've done very well with. I'm very pleased with the systems integrators, particularly the work at Accenture and also really Deloitte where we've got some very meaningful traction now.

But again, it's early days. So far, so good. And I think we are the only really credible, open enterprise partner in the space. And we don't do anything that any of these companies do, and we don't have any pretentions to do that either. I think that is important as we operate with them in these new deal scenarios that we see.

Bhavan Suri

Yes. That actually leads me to my second question, sort of, I guess, a broader question, and you touched on it. So you don't do SFA, sales force automation for example, and you don't do e-commerce. But customer experience touches a lot of things, right? It does encroach a little bit on marketing. It certainly encroaches on communications a little bit. It certainly encroaches on not just the analytic of analyzing what people are doing but then also the action. Like go do this to fix it, like someone just calling a hotel and gets routed through the technology and someone gets to call them. How do you think about that sort of encroaching on the biggest space? Because, obviously, the category itself is pretty nascent, the overall customer experience, and there's lots of people playing in it. So I'd love to understand how you think about the box you set yourself in, which is bigger than where you are today obviously. But how do you sort of define that? That would be great to understand.

Leslie Stretch

Yes. That's a great, great question. I think the core for us is really getting to the truth of feedback is creating safe spaces for feedback, doing it digitally, doing it fast in the current environment, understanding that customer journeys have changed. And nobody really does that. Simple surveys don't do that. They're certainly part of the equation, but they're by no means the whole story.

It's all of this other signal capture that the customers want. The customers have demanded that. It's a customer-driven road map. But right now and actually for the foreseeable future, there's plenty of room for us. Even with our messaging technology, it's not -- it doesn't -- we use actually Twilio and the underlying transport there. They're a great partner. We don't butt up against any of these. And as you say, we don't do SFA. We don't do any of those things.

And actually, in marketing, it's added value. You want to send out marketing campaigns with the benefit of feedback about individual customers. That's a massive scaling computational challenge, right? Identify the individual customer, understand its feedback in this situation in context before you try and send them -- sell them something else through a marketing campaign. Adobe is one of the best at that, and using feedback to move those campaigns is really powerful. So it's a great complement.

We've got plenty of room for maneuver, as you say, and it's a nascent market. It's really just emerging into the digital feedback market that it really should have been all along. And I think plenty of room to maneuver for the foreseeable future in the next few years.

Operator

Your next question comes from the line of Drew Foster from Citigroup.

Drew Foster

As you're thinking about whether it's bookings or billings, Q4 is obviously typically a very important quarter for Medallia from a transaction volume perspective. And at the same time, we've seen kind of varying degrees of success across the broader software and tech space with companies such as yourselves who are more exposed to a larger enterprise demographic. So Leslie, kind of, wondering if you could double click on some proof points or customer anecdotes that would help us gauge your confidence level closing out the year.

I mean Last quarter and this quarter, you mentioned larger deals and even some mega deals and also cited that experience initiatives are sort of rising priority among CEOs and so forth. So it's evident you're seeing pockets of strength there and large deals are still happening. But just kind of help us gauge potential risk for customers maybe wanting to weigh for slightly better operating environments or just sense of urgency around getting large deals done, especially here in Q4.

Leslie Stretch

Yes. Well, I think that's a realistic view of the world and observation. But to that end, we've moved into new markets this year that we were really not in health care and life sciences most notably. And certainly, we've seen our government sector start to deliver. So I'm really excited about that. At the same time, we saw travel and hospitality really more up on for a while and so -- although we've seen some feedback volumes rising in some of those sectors.

But we're not dependent now on -- Medallia, a few years ago as a private company was a big deal only sort of story and very successful, too. We are not dependent on that anymore. We have a very broad spectrum and ability to land and expand, ability to show people proof points, do proof of concepts, do all kinds of deals that will get us into more familiar relationships with large enterprises, too, so they're -- they can pull the trigger like some of those customers that we just talked about in Q3.

So we've taken all that into account in the way we look at Q4 and FY '22. We've taken all that into account plus the pandemic We've taken a conservative maybe even a pessimistic view of recovery. We don't need that to get to our projection because the company has pivoted beautifully to digital, has pivoted beautifully to virtual working. So that's why I look at Q4.

And I appreciate your comment. I get where you're coming from on the other companies and all that. But our story is ours, and I feel we're in control of it. We'd had 3 pandemic quarters now. We understand how to be effective virtually. We'd all like to be together, and we'd all like to collaborate physically and all the rest of it. We actually understand how to do it. It's highly productive. Our customers like it. And so I think we're well positioned.

That's really helpful commentary, Leslie. And just a last one for either of you. I mean as we think about some of the verticals who obviously have been impacted this year and we contemplate the guidance that you have out there now for next year, Roxanne, if those verticals start to come back a little bit quicker than we're expecting here, I mean, can you help us kind of contextualize or quantify what potential uplift that could bring you next year?

Roxanne Oulman

So as I shared, you're right. We're not anticipating that, to hit our numbers that we would need to have a significant recovery in hospitality and travel. I think it's too early to tell you, hey, if they recovered what I think this could do from an upside. However, obviously, there could be some upside to our number if we do that. And it's not just about hospitality and travel though. We have really broadened our overall vertical portfolio. And we've talked about the fact of life sciences and health care.

However, we've seen a lot of activity in manufacturing and high tech, especially as companies are working and bringing their people back to the factories, they need to be able to communicate with them. They're also using our product in communicating with their vendors, getting feedback from their vendors. So those are all different aspects that we hadn't seen before. And Leslie talked to you about a pharmaceutical company that is using our products in part of their vaccine and a -- McDonald's Australia, who's using it for contract tasting. So based on the usage of our product and the breadth of our product throughout these organizations, we're seeing a lot of upside in regards to multiple verticals. So it's not just about hospitality and transport.

Operator

Your next question comes from the line of Terry Tillman from Truist Securities.

Terry Tillman

I guess I'll spare you a question about the collaboration space. But yes. So I did see the news recently, and we had touched on it in one of our reports, but the new hire on the Chief Digital Officer and demand gen side. I know you're always on the lookout for new talent, but demand gen seems kind of an important area. So maybe, Leslie, you could give us some perspective on kind of what instigated that move. And then I had just a quick follow-up.

Leslie Stretch

Yes. No, super question. Thank you, Terry. Great question. Yes. I mean everything's changed. People that depended on events and classical events, you can't do this. You won't be able to do this for some time. And so if you try and take your traditional classical event and replicate it in the digital world online and create a live event, you create the same time ban temporal constraints to the physical event. Henson is a thinker around digital, and he's an award-winning digital marketer. We're about creating short, sharp, highly impacted sessions.

And the last few months, I've actually never done as many customer live sessions that we've been able to record and then put out there on the web for people to see the use cases live and in action. And I think we've only just begun to see the contribution to the pipeline on that activity. And so it's everything for us now. So digital marketing, short, sharp, broadcast, Medallia.tv, all of these things you're going to see coming to the fore. And we want to be best in class at it. And we've certainly got the team -- the marketing team to do that. So that was why we moved there quite aggressively, quite quickly, and I expect to see big things from it. We can already feel the effect on the pipeline, so -- but I'm not saying too much more about that, but that's how we think about it.

Terry Tillman

That's great. And maybe, Roxanne, just a really quick one for you but the concept of $5-or-so million in billings kind of impact this year from ramp deals and the idea of modified subscription terms. I know you're just guiding to subscription and total revenue, which is very helpful for FY '22 by the way. But as you look into next year, and again, I know you're not going to talk about like billings and things like that, and that could be lumpy, but do you -- at a high level, would you expect kind of more of the same next year? Or do you think that some of these dynamics you all had to deal with could start to add?

Roxanne Oulman

Well, I think some of the dynamics that we've worked with will ebb because we've seen some of those dynamics ebb. If you look at the concession impact from a revenue perspective, the concession impact has been consistent over the last 2 quarters. So said differently, we haven't made additional concessions that include those impacted customers.

So I think that when you look at our renewals that we've had, and someone asked the question about the renewal with the cruise line, we've also had significant renewals with hospitality or even retail companies that have been impacted. So with that said, I think that the impact that we're seeing this year should start to be much more less -- be much less.

Operator

Your next question comes from the line of Matt VanVliet from BTIG.

Matt VanVliet

All right. I guess maybe a follow-up on the public sector. A lot of strength there and seeing some good growth. Just curious on how you're seeing seasonality around that. Is third quarter expected to be kind of the high watermark on a typical annual seasonality? Or do you still see quite a bit of strength here in the next several quarters?

Leslie Stretch

Well, I think it's true it's the high watermark from a federal perspective, but we've got state and local that we're just really getting into. But we also have global. We have international. To be fair, in the year, it's probably the first place that we're making good progress in public sector. They have some of the largest public sector employees in the world after all in the UK and in Germany. And so actually, there is a spread there. It's not all about just federal.

So I'm pretty happy with that we made a big investment. We built a multiyear plan around federal, state and local, and now we're going to begin our academic work, which is very important. And we're coming from a position where we don't have any baggage at all in that market, and we're starting with a new modern digital perspective, which is very exciting. Indeed, we've had some of our first engagements, in fact, some of our first wins really taking away the very simple stupid survey technologies that are being used in that space. And they are crying out for more than the survey technologies can provide them. So I'm not steep buoyant about public sector across the year and not just the normal fall, as you point out, federal kind of spending phase.

Matt VanVliet

That's great. And then I know it's pretty early on the mid-market side, but just curious what deals look like from a total number of modules or how comprehensive some of those are looking. Are they much more of kind of a low land-and-expand deal? Or are you seeing some of those customers really taking down larger portions of the platform even if it's at a slightly smaller TCV?

Leslie Stretch

Yes. We actually have. We've seen everything. But we actually have, and I mentioned a couple of them on the call. We got this fabulous homebuilder that really was a long-standing customer of a well-known survey market research vendor. And when they realize they can have fully modern digital spectrum that we can provide, they were all over it. And so I think what's actually surprising about our mid-market success is the number of people that want Medallia Experience Cloud. But we do have great land and expand with some of our acquisitions like LivingLens. Our ideas technology is a great entry point. We can go from ideas to Medallia Experience Cloud.

So the point for us is that the growth in our coverage in that area, we're still relatively small in sales terms in terms of others, but we're growing fast. But we have much more to offer salespeople, talented virtual salespeople, much more spectrum to sell and so much more powerful solutions for customers. So -- but it's really interesting to see the number of them, not one but full radar scope of Medallia Experience Cloud. And we actually thought they might start with a simple survey or might start with just Digital or might start with LivingLens video. But we've been pleasantly surprised by the number of people that have come along after the full story. And also the size of some of the deals, we have some good mid-6-figure deals there.

Operator

Your next question comes from Brett Knoblauch from Berenberg Capital Markets.

Brett Knoblauch

Just one for me. I think on the organic side, customer adds are really strong in the quarter. Is that something you would expect to continue given maybe the increased involvement from partners and mid-market success?

Leslie Stretch

Yes, it is. I think we -- and we talked about our pivot to really big investment in digital marketing. I think we're just beginning to see the beginnings of that, as I mentioned, in the pipeline. We've added substantially to our mid-market sales team. We have a fabulous academy program that brings people in and onboards them and makes it effective. And we still have our big deal team, which actually is growing. And so I do feel that the opportunity is there for us to do well through Q4 and also through FY '22, absolutely, yes.

Operator

I will now return the call to Leslie Stretch for closing remarks.

Leslie Stretch

Great. Thank you, everyone, for taking the time with us. We look forward to talking to you all again soon.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.