Event technology provider Cvent on Monday reported $137.4 million in total revenue for the first quarter of 2022—a "beat" of the company's previous guidance by 2.9 percent and a 17.1 percent increase over the same quarter in 2021, CEO Reggie Aggarwal told analysts on an earnings call. The company's Event Cloud contributed $95 million and its Hospitality Cloud contributed $42.4 million, each segment up slightly more than 17 percent over the comparable quarter last year.
Company leaders leaned into Cvent's "triple threat" tech strategy as the key to post-pandemic success—and identified the core competency of in-person events as the place where newcomers and competitors would stumble as the market moves forward.
Event Cloud Trends
Event Cloud clients deepened investment in platform technology, according to company executives, as they began to get comfortable with putting meetings on the books in 2022 in spite of ongoing pandemic uncertainty. The company noted speedier event recovery than expected in the first quarter, especially after the rocky start with omicron outbreaks in January.
Aggarwal attributed that growth to a number of factors, but pent-up demand for in-person events was prominent among them and gained momentum after corporate execs attended their "first" events since the onset of the pandemic.
"The more leaders that go to in-person [events], the more they come back and say … 'I went to this event and, my God, I forgot what in-person is like. We're going to do more in-person for our company because it's just much better than doing it virtually,' " he said. He check-boxed an Ivy League university, a Fortune 500 pharmaceutical company and a publicly traded software company that each increased their on-site product spend by more than $100,000 for the year.
Another reason for rising confidence, Aggarwal said, was a simultaneous rise in comfort level with virtual and hybrid alternatives for in-person meetings to deal with lingering pandemic uncertainty. He called the Event Cloud technology the company's "triple threat" with the introduction of integrated virtual and hybrid options beginning to pay off as more companies put events on the books but must rely on flexible technology solutions to back them up. He likewise pointed to a number of customers hiking their virtual tech investment by more than $100,000 in annual recurring spend. Moreover, Cvent CFO Billy Newman at the end of the call referenced growth in multi-year deals, signaling the burgeoning confidence that the integrated in-person, hybrid and virtual approach was gaining traction as the accepted event model of the future.
He referenced a particular association client that upped its annual spend with Cvent to $3.5 million and in Q1 "expanded that relationship to a five-year deal that was … close to $20 million," the biggest Event Cloud deal in Cvent's history, Newman said. "That's an example of people feeling more comfortable … because they know they're going to have to do all three [in-person, hybrid and virtual], and we're prepared to do that."
Newman projected Cvent now can stabilize investment in the tech and in the longer sales cycles that come with customer education and "and start to reap the rewards of the increasing incremental investments we've been making since late 2020, in the form of increased margin expansion through the end of the year."
By contrast, Aggarwal predicted competitors may begin to show their seams as in-person event demand spikes. "They're starting to struggle because they can't do the total event program as seamlessly … in-person, virtual, hybrid. And as you start doing it, of all event types and big the small internal, external. That's a lot of heavy depth and product you need."
Hospitality Cloud Trends
Hotels and venues likewise are feeling confident to reinvest in in-person events—namely to attract buyers to take advantage of their products and services. Aggarwal quoted Hospitality Cloud revenue as up more than 17 percent year over year for the quarter "the largest year-over-year growth for the Hospitality Cloud since Q1 of 2020."
He cited investment in the Hospitality Cloud user interface, the ability to enable remote three-dimensional renderings and tours for participating hotels and venues and better request for proposal facilitation to ease the burden on hotel sales staff. He also mentioned upgraded designs for supplier response templates.
Aggarwal claimed "thousands" of hotels and venues had renewed and increased their spend with Cvent Hospitality Cloud in the first quarter—a figure that gets a boost because Cvent operates largely on annualized contracts.
Expanding the Total Addressable Market
Aggarwal also voiced great expectations for the future of the Cvent Marketplace, announced last month and which aims to loop in the broader universe of meeting and event suppliers that serve the industry—from taxation apps and data and reporting specialists to ground transportation providers, local florists and everything in between. Aggarwal emphasized to investors, however, the company's marketplace was a longer-term play that would "take a little while" to convert revenues. He mentioned a potential transaction-fee model down the line in additional to advertising revenues.
In the meantime, he said, it would expand the addressable market opportunity for Cvent in a space that he called "really fragmented" but where industry demand remained high.
"We definitely have the event planners that are looking [for it], "he said, "and we think it's a great extension of the ecosystem—not just from the long-term monetary [perspective], but also … it makes us that one-stop shop."
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