CS Disco, Inc. (NYSE:LAW) Q3 2023 Earnings Call Transcript

Page 3 of 3

Are they aware of that offering? With our corporate clients, we made an acquisition a couple of years ago of a hold product. And having lived in the corporate world within the last couple of years and been in a company where on occasion, you got those hold notices showing the GCs of those companies, that opportunity, our existing customers, that opportunity, I think, is a great way for us to establish a foothold from which we can grow. And so my mantra with the sales team has been, it’s not — do we do transaction or subscription. If not, do we sell eDiscovery or Review? It’s — we should do it all. And we should use the portfolio of products that we have and that we’re developing to attract new customers without question, but we should certainly take advantage of the 1,449 customers that we have to sell them more.

As I look at this company, I don’t, in any way, see us having an issue of a lack of opportunity to gain new customers to sell more into existing customers, I think the field is open. I think the products we have are there. I think we have a terrific sales team, and we’re going to make investments to enable them more. And so it’s both. It’s — yes, you should expect us to continue to grow customers. But you should also expect us as we move forward to talk about what we’re doing to sell our existing customers more.

Koji Ikeda: Got it. Thanks Scott. Thanks Mike for taking the questions. Really appreciate it.

Operator: Thank you. Our final question comes from the line of Brent Thill from Jefferies. Please go ahead with your question.

Luv Sodha: This is Luv Sodha on for Brent Thill. Thank you, Scott, and thank you, Michael, for taking my questions. Over the past few quarters, you’ve highlighted maybe continued optimization in some of your larger customers as they’re renegotiating some of their spend, is it fair to assume that the comments you made in terms of eDiscovery usage improving, does that apply to those larger customers as well?

Scott Hill: Yeah. The improvement we’re seeing, again, this is my theme for the call, I guess, is across all of our customers. So we are seeing improvements with the existing customers and again, some of what you’re talking about with the existing customers, where we’re negotiating, that’s the exact opportunity I’m talking about where we can go to those customers and say, hey, it’s more than eDiscovery. Let me talk to you about the opportunity to buy case builder to buy review to — when it’s available in the fourth quarter to buy Cecelia. And so it is absolutely the case that we are seeing some growth in our existing customers, particularly as we work through the wave of some of the larger cases that had come off earlier in the year. But I definitely see an opportunity in those customer conversations to really sell the breadth of the company and the breadth of the products and allow us to see the usage go up related to that.

Luv Sodha: Got it. And just a quick follow-up, on — thank you for the net new adds commentary. But wanted to dig in, I guess, on an absolute basis, it was only 18 customers added versus, let’s say, the six quarter average has been around 50%. So I guess it is somewhat of a step down. So was there anything different in terms of churn? Or any additional color you can add there? Thank you.

Scott Hill: Yeah. I’m not considered — I don’t think I’d say, 18, up as a step down. It’s a smaller step up, but it’s a step up. And it’s — I don’t have the numbers right in front of me, but I’m pretty confident in saying that it’s been a step-up each quarter for the last eight to 12 quarters. And that’s the trend you want — would I have liked 18 to be in one shot. Are we focused on continuing to drive more customers? Absolutely. But I don’t want to apologize for another sequential improvement in our customer count. Because again, that’s 18 more customers that can buy the breadth of the products we have to offer.

Luv Sodha: Got it. Thank you.

Operator: There are no further questions at this time. Scott Hill, CEO. I’ll turn the call back over to you.

Scott Hill: Thank you, Bhavesh. This has been a challenging year for our company. I want to thank our employees for their resilience and maintaining a remarkable focus on continuing to innovate and serve our customers. I also want to reiterate my commitment to working with all of you to make Disco a great place to work. And importantly, I want to thank our customers, for their continued confidence and business. We’re committed to continuing to help you be more efficient, by delivering innovative technology solutions. Thank you for joining us today. And thank you for your interest in Disco.

Operator: Thank you. This concludes today’s conference call. We thank you for participating. And you may now disconnect.

Follow Cs Disco Inc.

Page 3 of 3