ON24 at Baird Conference: Strategic Focus on AI and Data

On Wednesday, 04 June 2025, ON24 Inc (NYSE:ONTF) participated in the Baird Global Consumer, Technology & Services Conference 2025. The company showcased its strategic initiatives, emphasizing the integration of AI and first-party data in its B2B engagement platform. Despite facing challenges from post-pandemic normalization, ON24 highlighted positive trends in enterprise business performance and announced a $50 million share repurchase program.

Key Takeaways

• ON24 is focusing on AI-driven personalization and first-party data to enhance customer engagement.
• The company reported the best gross retention in four years and expects further improvement in 2025.
• A $50 million share repurchase program was announced, supported by a strong balance sheet with $181 million in cash.
• ON24 is adjusted EBITDA profitable and expects to maintain this status in 2025.
• The company is differentiating itself from general communication tools by emphasizing its purpose-built marketing platform.

Financial Results

• Gross Retention:

- Best gross retention in the last four years during Q1 2024.

- Mid-single-digit improvement in 2024 compared to 2023.

- Further improvement expected in 2025.

• ARR (Annual Recurring Revenue):

- Sequential improvement expected in 2025, with no positive guidance provided.

- 51% of ARR was in multi-year agreements at the end of 2024, reaching an all-time high in Q1.

• Profitability:

- Adjusted EBITDA profitable in 2024, expected to continue in 2025.

- Free cash flow positive for the past five quarters, with expectations to maintain this trend.

- Gross margins in the high 70s, targeting operating margins of 20%.

• Balance Sheet:

- $181 million in cash and investments at the end of Q1, with no debt.

Operational Updates

• Focus:

- Emphasizing revenue-generating activities for customers.

- Helping customers generate pipeline cost-effectively.

• AI Adoption:

- Low teens percentage of customers have purchased AI capabilities.

- A third of customers are using AI features within the platform.

• Win-Backs:

- Q1 saw the largest number of customer win-backs, with clients returning from cheaper alternatives.

• Multi-Lingual Capabilities:

- Offering content deployment in 20-25 languages with ease.

• Customer Engagement:

- ON24 live webinars average 200 participants, engaging with 20 data points over 50 minutes.

Future Outlook

• Gross Retention:

- Anticipated improvement throughout 2025, building on 2024 gains.

• ARR:

- Expected sequential improvement in 2025.

• Profitability:

- Continued adjusted EBITDA profitability and free cash flow positivity anticipated.

• Growth Drivers:

- AI-powered ACE, win-backs, multi-year agreements, and a new CMO.

• Challenges:

- Macroeconomic uncertainty and pressure on marketing budgets.

Q&A Highlights

• Lead Generation Post-COVID:

- Shift towards digital and AI-driven environments.

• Healthcare Professional Engagement:

- Solutions for global healthcare professional engagement and certification.

• Total Addressable Market (TAM):

- Focus on driving pipeline and solving critical data and engagement challenges.

• Competitive Landscape:

- Differentiation from collaboration tools with a purpose-built marketing platform.

• AI Pricing Strategy:

- Two-tiered approach with some free features and others based on added revenue or cost reduction.

For a complete understanding, readers are encouraged to refer to the full transcript below.

Full transcript - Baird Global Consumer, Technology & Services Conference 2025:

Rob Oliver, Baird: To Baird’s global consumer and technology and services conference. I’m Rob Oliver. It’s my pleasure to have the management of on 24 here, Sharat Sharan, who is the CEO, and Steve Bachwani, CFO. And we’re gonna do a bit of an introductory presentation, Sharad, so we can kinda level set the room, and then we’ll dig in with the fireside chat. And please don’t hesitate if you have questions to send them to session5@rwbear.com, or just put your hand up, and we’ll work them in and try to make this interactive.

But, Sharat, appreciate you making the cross country check to come see us, and thank you so much. And I look forward to learning a little bit more about ON twenty four.

Sharat Sharan, CEO, ON24: Thanks, Rob. Good afternoon, everybody. With me, as as you know, as Rob said, is Steve Adjwani, our our CFO. So just a quick refer refresher, especially if people who don’t know On 24. On 24 is for b to b, a first party customer engagement platform for sales and marketing.

And when we talk about first party customer engagement, we are talking about we offer a suite of products. On24 webinar experiences, virtual events, multimedia hubs that generate first party data. It allows thousands of companies to deliver millions of experiences, use the data and insights to convert prospects into customers, and drive more revenue from their existing customers. I’ll talk I’ll talk about that. The reason we exist, we help these companies propel tangible ROI for these customers.

We focus on five or six core verticals, tech, financial services, life sciences. I’ll talk about those. But if you look at ServiceNow, we are the number two pipeline generating channel for ServiceNow. If you look at pharma, AbbVie, two hundred percent increase in health care professional engagement using one twenty four. John Hancock, Vanguard, many more advisor meeting that they are generating.

Triple a, compared with the previous previous platform they use, 40% more sales based on the ON 24 platform. And our customer list. Our customer list is a who’s who. Like I said, we focus on six core verticals. Four of the five largest software global companies.

Salesforce, Microsoft, SAP, ServiceNow, Nvidia are standardized on on 24. Manufacturing, three of the five largest manufacturing firms. Financial services, three of the five largest global asset management firms. And life sciences, similarly. Lilly, Merck, Novo Nordisk, etcetera, are standardized on 24, professional services, and media and information technology.

Again, our focus there is to help them drive business outcomes propelling revenue growth for these companies. At a very high level, the onboarding of our platform is we go to market on a use case basis. So that’s that’s the top part. Marketing engagement, how do we help companies, technology companies to drive more pipeline growth that that drives revenue outcomes for them? How do they do live life certification, human marketing using our platform?

On the on the life sciences and pharma side, what we call health care professional education. All these health care professionals need to be educated and certified. That’s done globally on the ON24 platform. Financial services, advisor, and client engagement, and partner engagement also for technology. In addition to our use cases, it’s really the focus our focus on first party data and insights and integrating that with the with the sales and marketing ecosystem of our customers.

Very important. And then, of course, I’ll talk about this more. AI is fundamentally changing marketing and sales, focused on personalization, AI driven content creation and nurture, multilingual capabilities that drive global scale and agentic AI based agents. We call them one twenty four IQ that we have launched. And for for many of you, you know, when you talk about the secret sauce that On24 has, this this is the slide that basically talks about that a little bit.

Let me explain. We provide probably one of the highest engagement platforms of all sales and marketing tools that companies use. And that engagement platform delivers first party data and insights that help customers learn about their prospects to convert them into into customers. Now what what does that mean? You know, this is a physical event.

We have we will we we’re gonna have good customer engagement, but there’s no data. When you do email marketing, it’s click seconds of engagement. If every On 24 live webinar experience and others has approximately 200 people who spend fifty minutes, k, and interact with about 20 different data points. We have over 1,000,000,000 engagement minutes on our platform. So the amount of engagement on a per experience basis and all the data that is that we are able to to get that across multiple experiences, that really helps.

Now you you’re probably asking, okay, Sharad. So what is this data that you’re getting? Now if you join a webinar experience with launch 24 that our customers implement, there there is basic stuff. Right? Yeah.

Who who are you? Where do you come from? You register. Is all service, q and a, and other stuff. But then on top of that, you can book a meeting.

You can you can register for a for a free trial. You can do live certification. And then you can you enhance these things. Every piece of content, we can provide you, you know, who’s who’s visited, you know, how it is working, how it is converting, and, of course, benchmarks. So only ON24 provides about 20 to 50 different data points on a per experience basis.

Now, you you know, you you add those across experiences. Some of our larger customers, they do a 2,000, five thousand experiences. If you come and join, you know, 50 of those experiences, that’s a lot of data. Yeah. You know, of us have heard a lot of hype about AI, but AI is fundamentally changing marketing and sales, ladies and gentlemen.

Okay? And there are three core areas that we are focused on on from the AI side that we talked more in the q and a about that. One, our focus on hyper personalization of audiences. So in one experience, you can have three different experiences. If you’re financial services, life science, or technology, you can have different experiences.

We then the other thing is I’ve got about 200,000 live experiences on my platform every year. We are able to take those experience and provide you a lot more derivative content. You can get logs, takeaways, key moment videos, everything from those particular live webinar experiences that you create. It’s almost like a campaign in a box. And finally, we’re also doing a lot of work on multilingual capability.

So if you’re if you’re a large tech company and you want to do a campaign in 20 different languages, with one click of a button, all the content that you create, you can you can run these major campaigns. So AI is fundamentally changing marketing and sales and driving business outcomes. This is my final slide. I’ve talked about how our customers thousands of customers deliver millions of experiences to engage with their prospects at scale. So we take Alan as one of those prospects that one of our customers is engaging with at scale.

We get all the first party data and insights about Alan. And supposing he’s a very highly engaged person and he answers a poll that says he’s gonna buy a product in the next hundred and eighty days. All those signals we in real time that we are integrated in the sales and marketing ecosystem of our customers, that that information in real time comes through the sales and market ecosystem to the salesperson to follow-up right away. That’s the closed loop process that +1 24124 provides our customers. With that, we’ll take questions.

Rob Oliver, Baird: Great. Great. Thanks, Sharad. Appreciate it. So clearly, you mentioned, you know, companies that I cover, ServiceNow, Salesforce, others where this is you guys are routinely one of the top sources of lead gen.

So talk about how lead generation has changed kind of post COVID. We were moving into more of a digital lead gen area. There was an explosion in demand, And you guys have come through that period where the renewal cohorts were challenging. And now we’re emerging into a new gen AI driven lead gen environment. So talk about how how that’s changed and what you’re seeing in the market.

Sharat Sharan, CEO, ON24: Well, so let let’s back up. Rob, as as you as you know, the last couple of years have been challenging, you know, from from a marketing budget point of view. So since since since all ’20 ’4 went public, you know, we had to deal with some of post pandemic normalization. As we got done by that, we you know, the interest rates went up, and that started impacting our customers because, you know, 80% of our revenue is coming from marketing budgets. K?

And what what we generally saw that marketing budgets reduced by about 30 to 40%. That that created some headwinds for our business. That being said, if you look at q one, okay, we delivered good enterprise new business performance. We delivered the best gross retention in the last four years. And we also you know, AI powered days has become a very important growth factor for us.

We did see some softening towards the end of q one, Rob, in the in the international and the commercial business. But but overall, you know, as I as I talk to the customers, I mean, the customer conversation customers are enthusiastic. They are really looking to start investing in revenue growth, and we are beginning to see that in win backs. One of the most exciting things, ladies and gentlemen, in q one was we saw the largest number of customer win backs, people who may have gone in the last two, three years to cheaper tools, cheaper collaboration tools. K?

So we it it was good for them to for for them to come back. Now, as I look at right now, what our customers are focused on, they are focused on revenue generating activities. They’re focused on every CMO that I I know is focused on my I’ve got limited cost. How do I generate more pipeline? Every pharmaceutical company is focused on how do I engage with health care professionals.

K? All companies on the on the financial services side are focused on how do I drive as I’m distributing new product, how do I how do I continue to increase my assets under under management? And so what On twenty four provides these customers is this first party engagement platform that delivers first party data to learn more and more about these prospects, and we do that on a cost effective basis. On top of that, Rob, AI is fundamentally changing marketing and sales. It’s driving more ROI based outcomes.

It’s doing that cost effectively because people don’t have much resources, and it provides massive scale. That’s what many of our our customers like the ServiceNow, the SMBs are investing in. And the good news there is, low teens as a percentage of our customers are investing in our AI based products. So we have a lot of room to run, but we are already, low teams of people are buying it, while a third of our customers are using it. So that’s what we’re seeing.

Rob Oliver, Baird: Got it.

Steve Bachwani, CFO, ON24: And and, you know, just to quickly add on to what Trat was saying. We’ve been through two plus years of post pandemic normalization, tight marketing budgets. We saw in the marketing primarily. And the good news is what we’re seeing in the business, that’s in the rearview mirror. We’re seeing a lot of stabilization in our business.

In fact, in 2024, our gross retention was up by mid single digits from 2023. And in q one, it was actually the best in period gross retention that we’ve seen in the past four years. So we’re definitely seeing stabilization in the business. Some of the challenges are getting into the rearview mirror at this point, and we expect to see improved ARR performance during 2025. A couple other things I’m just gonna add in.

We were EBITDA adjusted EBITDA profitable in 2024. We expect to be so again in 2025. We are free cash flow positive for the past five quarters. We expect to be free cash flow positive in 2025, possibly excluding some restructuring or other pro form a activities. And we just announced a $50,000,000 share repurchase program, last month.

At the end of q one, we had a hundred and $81,000,000 of cash and investments on our balance sheet, no debt, and we’re generating positive free And we believe the shares are undervalued at the moment. So since the shares are cheap, we are taking this opportunity to buy back some of our own shares. So I just wanted to add that in as well in addition to the comments that Sharat made about we’re seeing in the business.

Rob Oliver, Baird: Yeah. No. Very helpful, Steve. And, you know, Safo was certainly gonna touch on as well. And on on the gross retention side, you know, noted, you guys have it’s it’s been a a positive positive indicator for you guys.

Oh, Are these is this the health of the installed base? Is it things you guys are doing to influence it as well? Maybe talk a little bit about the combination.

Steve Bachwani, CFO, ON24: Yeah. It’s a combination of all the above. Let me start with the renewal cohorts. So as, you know, we talked about, we went through a couple of years of, you know, tight marketing budgets, post pandemic normalization. That’s in the rear view mirror.

Now a lot of our large cohorts and our large renewals, they’ve already gone through at least a couple of renewal periods during this, you know, time period. So they’ve had two opportunities to kinda right size their contracts. So we’re not really seeing any down sells. We didn’t see any in q one that were concerning, big down sells, and we’re not expecting to see any in the latter part of this year as well that are concerning. So that gives me a lot of encouragement.

And as I said in q one, our gross retention was the highest it’s been in four years. Last year, we saw, you know, a mid single digit improvement in gross retention. We expect to see more improvement in 2025. Now why is this happening? There are a handful of reasons.

One, we’ve got more multi year of more of our ARR and multi year agreements than we’ve had ever. At the end of 2024, it was 51% of our ARR was in multi year agreements. Now we don’t disclose that quarterly, but I can tell you it went up from that number in q one. In fact, it hit an all time high. So that’s really good.

We’re seeing our largest customers make longer term commitments to our platform. The other is we have exciting new products to sell. Sharath talked about AI powered ACE. You know, we’ve still got a lot of room to run there, and that’s really helping to elevate our conversations within the marketing departments that we sell into. The other is we are seeing, you know, better general execution from our customer success and renewals teams.

So given these items, we’re seeing a lot of stabilization in the business, and we expect that our gross retention in 2025 to increase from where it was in 2024 further and build on the gains that we’ve made.

Rob Oliver, Baird: Got it. Helpful. Let me pivot back on the product side, then we’ll come back with with some financials at the close-up. So you mentioned, Chirat, on ’24 IQ. You guys were really early with AI powered ace.

And, you know, at the time you guys rolled it out, you know, we were watching our coverage list to see how people would react to this new generative AI world, and you guys really took offense on it early. And I think it’s it’s starting to pay off for you guys. And I I would just be curious, you know, if you can share with us, you know, what what sort of adoption metrics or how you’re seeing that AI powered ACE adoption within your installed base, and then whether it’s also contributing to to new wins. And then I wanted to ask about how you guys have either retrofitted or added in the agentic element.

Sharat Sharan, CEO, ON24: Yeah. So you few things that that you asked about the AI. Yes. We launched that early last year, and low teens as a percentage of our customers have bought the have bought our AI capabilities, and about a third of those customers are using it. So so that is exciting, but we have enough room to run.

And it rather, it started on the technology kind of vertical where where we expect these people to start. But the the interesting thing that we are beginning to see is financial services, asset management, professional services, even life sciences is beginning to start is beginning to start using what we are taking to market. And like I said in my in in my other remarks, AI is going to fundamentally change marketing and sales. Mean, there’s there’s urgent ROI that people are getting. When I take all the content that they create on my platform and I give them a campaign in a box that they can take and create all this derivative content and videos and continue to nurture with those people, Earlier, they had to start and create all those assets from scratch.

Now they are at 80%. So they’re, you know, they’re able to do more with less. They’re able to do hyper personalization and target of of individual segments. And now with the launch of on ’24 iQ, which is our our AI agents, we are we are automating all the repetitive tasks that people had to had to do. If if you are creating a live webinar experience, click, click, click.

You you know, you decide what your audience is, what do you want to do. You’ll be able to get get a live webinar experience, and next click, you are able to get all the additional content that you can deploy on on on on various campaigns. So so that’s important. The other thing that I’m very excited about on on what we are bringing to market is the ability to take all the content, all the webinars, and others, and deploy them in multiple languages. You can it’s no longer about English.

You can deploy them in twenty, twenty five languages with a click of a button. Imagine you’re one of those companies, SAP, ServiceNow, and others. One, they are able to get all this content, then they’re able to deploy all that content in multiple languages and deploy that on on on a global basis. And then the other thing that you all also need to understand, our foundation, our key strengths are our first party data. So we are taking a lot more of our strengths on first party data and adding AI driven insights on top.

So that’s the fifth pillar of what we are doing. Net net, AI is going to be transformative for our companies. It’s transformative and a tremendous growth engine for our for our business, and it also helps our competitive position as we execute in the marketplace.

Rob Oliver, Baird: Got it. Okay. Great. Thanks. And just throw it out there because I was at the Atlassian user conference last month, and they they just decided to give their generative AI platform away for free, Rovo, as part of their bundled package solutions.

And their rationale there is that, you know, they’re gonna sort of remove the friction and then re re recoup that on the back end. Obviously, that comes with some risk, but just just curious given the you know, how aggressive you guys are the more in the market, how much automation potential there is here and the relatively modest adoption of whether you guys would consider something like that or how you’re thinking about the pricing.

Sharat Sharan, CEO, ON24: You know, at some level, at some stage, you’ll have to take a look at the pricing. Right? What what what is and the way we have approached it right now is we have two tiers of AI capabilities. Some of it is some is provided to everybody to use for free, and that’s what I talked about. A third of our customers are using AI within the platform.

Then for things that we believe are adding additional revenue or reducing their cost, that’s what that’s what we charge for. Then that’s the low teens of customers that are paying for us. You know, as we evolve this, we will continue to look at it. But right now, we are just bringing so much more AI based innovation into the marketplace, the multilingual capabilities, the the additional AI driven insights. So we we we’re doing a combination of those, Rob, at this stage.

But we do believe that for the capabilities we are taking to market that our customers are have are willing to pay. And we expect about a 10 to 15% uplift on those contracts based on based on AI. And it also, by the way, just on the other side, it also helps us on the down sell side. Sometimes, you know, that was an issue in the past. It sometimes our customers are are reducing some of the from a particular product.

I think with AI powered ace, that helps us helps us across all the various capabilities.

Rob Oliver, Baird: Got it. Okay. Great. Thanks. One from the audience.

Thank you. But what what are you guys exactly doing in the health care space? And can you talk a little bit about your offering there?

Sharat Sharan, CEO, ON24: Yeah. So, you know, all of you have seen you see ads that go to consumers on one TV or the various drugs that companies do. But when when these pharmaceutical companies have to reach and educate, when they’re coming out of the drug, they have these health care professional, other doctors and others that need to be educated. So they they have a panel of doctors and other health care professionals that get educated then. That message has to be taken out much larger audiences of health care professionals.

Now historically, many of these things were done in modern steakhouse or or or physical events, but with the improvement in in data intractability with with compliance and regulatory concerns, healthcare professional engagement, training, certification is is done is being done more digitally. In health care, parlance, they talk about omnichannel engagement. K? Our solutions in the pharma category, we deployed on a global basis. These customers deploy health care professional engagement on a global basis in four fifty different markets.

That’s what our solutions are using.

Rob Oliver, Baird: Great. Great. Thanks. Steve, let me pivot back to you on the ARR side. So we talked about gross retention.

ARR I mean, core core ARR trends have started to improve generally, although you guys last quarter did call out a little bit of kind of weakness in the second half in on the core side. Maybe what was it that you guys saw either in the market or that sort of changed your your view there?

Sharat Sharan, CEO, ON24: Let me let me take that. Let me let me take that question question, Rob. Look, we can’t control the macro. Okay? And towards we like I said, we had a good quarter and the things I described.

But towards the latter part, we did see some softening in the commercial business and our international business. So as and, you know, recognizing the volatility in the markets, we had to add a little more risk to our projections for 2025, and that’s what we did. That being said, I’m really excited about what I’m seeing in the business and some of the changes that that we have that we are making in our business. And we are we’ve we’ve guided that we expect sequential ARR improvement this year. K?

We would love to get it to positive, but we have currently guided that we expect to see sequential ARR improvement this year. And there are four, five things that we are doing in the business that get me really, excited and enthusiastic. I think Steve talked about gross retention. Q one was the best in the last four four years, so some of you who have followed us know that was a challenge, and we expect that to improve over the course of the year. Now second, the changes that we made to our go to market engine.

We brought in a new CMO in the last couple months, and then we also brought brought in a new head of North America sales towards the end of last year. And they he delivered the best new business enterprise quarter in q one. So I’m I’m very encouraged about what we are doing. AI powered days continues to be a very important growth factor. Like I said, there’s there’s room to run there.

We are excited also to see win backs from Boomerang customers. Q one was the largest ARR and number of customers that came back to one twenty four that may have gone away because of of cost considerations and others. So really, really excited about those things. Then on top of that, as Steve said, we are running a 77% gross margin business. We we have made five quarters free cash flow positive.

We’ve got a strong balance sheet. So so so encouraged by where we are positioned on ’20 ’4, and we believe we’re ready to inflect.

Rob Oliver, Baird: So it sounds like the change, though, was, like, that there was some incremental pressure in the marketing departments relative to some you guys.

Sharat Sharan, CEO, ON24: I mean, it’s it’s hard it’s hard to deal

Steve Bachwani, CFO, ON24: with Outside

Rob Oliver, Baird: of your control stuff.

Sharat Sharan, CEO, ON24: 30 to 40% reduction in marketing department budgets. Right?

Rob Oliver, Baird: You’re right.

Sharat Sharan, CEO, ON24: K. So yeah. And we didn’t see win backs at that time, but that’s so that that’s very encouraging.

Rob Oliver, Baird: Yes. Yep. K. Perfect. And then, yeah, to that point, Gerard, I mean, you you guys called out the the win backs, which I think is is important because, you know, we we, you know, we did see particularly, you know, post COVID, a lot of, you know, innovators in the space trying to come at you guys.

And we also all all always had somewhat of a skeptical or jaundiced eye. And and so maybe you’re you’ve got these win backs, but how has the competitive landscape, you know, changed at all today from you know, relative to kinda where we were?

Sharat Sharan, CEO, ON24: You know, as I showed you in the slide, our focus in going to market, we we are not a communication tool or collaboration tool. Our focus is how do we help you propel business outcomes forward. So at enterprise scale, nobody does what we do. From demand generation and partner engagement for technology companies, for health care professional engagement, for life sciences and pharma, for broker and member enrollment for financial services, live professional certification. Those are the areas that we focus on.

And I I I think you are right. Our competitors fall under two core categories. One is the collaboration tools, the good enough tools. But the Zooms and the teams and and those folks, they’re they’re not a purpose built marketing and sales platform. They they provide very limited data, and they sell to IT.

Right? So I’ll give you an example of one of one of the large enterprise health tech companies that have gone to a collaboration tool in the last couple of years. They came back in q one. Why did they come back? Because they were trying to scale their pipeline generation, and they couldn’t do that with the collaboration tool that they had.

They didn’t have the buying signals, the engagement tools, the first party data, and the content that the ON 24 tool product provides. And now we are in the world of AI. And AI is fundamentally changing scale. AI is fundamentally changing how people are doing. You can have massive content generation, massive engagement in in multi multilingual capabilities and other stuff.

That is going to further enhance our competitive position. A lot of the point solutions that came up in in during the pandemic, most of them have gone away well because, you know, they’ve not been able to keep up. So we are excited with with where we are. We’re excited about, you know, from a post normalization point of view where we are. And I think our competitive position could not never have been stronger.

Rob Oliver, Baird: Got it. But, Steve, on you know, we talked earlier about a lot of the progress you guys have made on the margin side, capital allocation. I wanted to just talk about profitability. 2024 was the first full year of profitability since the onset of COVID, and you’ve taken a lot of costs out of the business, and you guys have really rationalized things there. How, you know, how how how do we think about margins relative to growth and those trade offs going forward?

And are there still levers that can be pulled, and what’s your focus internally?

Steve Bachwani, CFO, ON24: Well, first off, our as Schwab mentioned, our goal is to get the company back to top line growth. But we’re gonna do that in a manner that is EBITDA profitable while we’re doing it. In fact, we’re EBITDA adjusted EBITDA profitable in 2024. We said we would be adjusted EBITDA profitable again in 2025, and we’ve maintained our margins gross margins in the high seventies, and we’re free cash flow positive for the past five quarters. And we said we expect to be free cash flow positive again in 2025, you know, possibly excluding, some pro form a restructuring and other items.

So we’re happy with the work we’ve done and the progress we’ve made on profitability. Now in terms of the top line, as we work to get that back to growth, as that improves, I would expect profitability to improve over time. Now our long term target margin, target operating model has gross margins of 78, 80 percent, and we’re actually just about there now. And on the bottom line, we have operating margins of 20%, and we’re working to get there And as we return to growth, I would expect to see us make further progress there.

Rob Oliver, Baird: Great. Thanks. Any other questions from the audience? Appreciate the interactive nature. Yeah.

Thanks.

Unidentified speaker: Have you guys worked to reach more of the total addressable market? And how do you kinda tailor or set up your AI products to be flexible to the bigger customers at the enterprise level and then also some of its up arms as well?

Sharat Sharan, CEO, ON24: So, you know, as as as we look at expanding our TAM, I think that was that was was the first question. I mean, if you think about the TAM, I mean, it’s about pipeline, driving pipeline. That’s a huge TAM. If you look at health care professional engagement, so we are we are focused on solving big problems where first party data and first party engagement is very important. And we continue to look at what other use cases that we can bring in where where where we are solving that kind of a problem.

So that’s an important thing. Now coming back to your second question about AI and how we are how we are splitting with the enterprise scale. You know, for example, as we’re bringing in more capabilities related to multilingual capability, smaller companies probably don’t care much about it. So we have packages for enterprise customers that really help solve their problems. And we then then we have also packages for our on AI for our commercial customers.

Okay? They may be more interested in the AI driven content and nurture as opposed to the larger ones are interested in personalization and segmentation. They’re interested in multilingual capability. They’re interested in content and nurture. So we have different packages.

Great.

Rob Oliver, Baird: Sharath, Steve, thank you guys very much. We really appreciate it. Yeah. Thanks.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.