Pluralsight, Inc. (PS) Q4 2018 Earnings Conference Call Transcript

PS earnings call for the period ending December 31, 2018.

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Pluralsight, Inc.  (NASDAQ:PS)
Q4 2018 Earnings Conference Call
Feb. 13, 2019, 4:30 p.m. ET

Contents:

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Q4 and Full Year 2018 Earnings Conference Call. At this time, all participants are in a listen-only. Later, we will conduct a question-and-answer session and instructions will follow at this time. (Operator Instructions) As a reminder, this conference call maybe recorded.

I would now like to introduce your host for today's conference, Director of Investor Relations, Mark McReynolds. Mr. McReynolds, you may begin.

Mark McReynolds -- Director of Investor Relations

Thank you. Good afternoon and welcome to Pluralsight's fourth quarter and full year 2018 earnings conference call. With us today are Aaron Skonnard, Co-Founder and CEO; and James Budge, CFO.

Some of our remarks today will include forward-looking statements within the meaning of the federal securities laws. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's press release and in our filings with the SEC. Any forward-looking statements that we make on this call are based on information and assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events except as required by law.

During this call we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The press release is available on our website at investors.pluralsight.com.

Before we hear from Aaron, I'd like to quickly remind you about Pluralsight LIVE 2019. Our annual user conference will be held on August 27 through the 29 at the Grand America Hotel in Salt Lake City. Pluralsight LIVE provides an excellent opportunity for investors and analysts to hear from a wide range of executives and leaders and to connect with our customers and partners. We'll hold a half-day session on August 28 specifically for investors and analysts and you're all invited. Please send an email to IR at pluralsight.com if you're interested in attending Pluralsight LIVE this year.

And with that, I'll turn the call over to Aaron.

Aaron Skonnard -- Chief Executive Officer

Thanks, Mark. Good afternoon everyone and thanks for joining us for our Q4 and full year 2018 earnings call. Pluralsight's fourth quarter capped off a milestone year for the Company, highlighted by strong customer additions over $100 million in billings and 42% revenue growth. We achieved our seventh consecutive quarter of greater than 50% growth in B2B billings, while continuing to demonstrate the inherent levers to profitability in our model, by exiting the year with positive free cash flow in Q4 as we committed to deliver when we went public last May.

Our teams continued to execute with strong focus and commitment to customer success as demonstrated by our dollar-based net retention rate reaching 128%. Our platform gives tech leaders unprecedented insights into the skill gaps across their organizations and we provide the tools to close them enabling enterprises to accelerate innovation. We have a lot of exciting accomplishments in 2018. Let's start by looking at the numbers. James?

James Budge -- Chief Financial Officer

Thanks, Aaron. Before we dig into the numbers, I'd like to note that except for revenue, balance sheet amounts, cash flow from operations and billings, all financial amounts I discuss are non-GAAP and growth rates are compared to the prior year comparable periods unless otherwise stated. New customer acquisition combined with strong expansion within our existing customers drove Q4 billings growth of 42% to $100.6 million and revenue growth of 42% to $67.3 million. Our B2B billings increased by 51% to $87.1 million, our seventh consecutive quarter of 50% growth.

For the full year, total billings were $293.6 million, up 43%. 2018 revenue was $232 million, up 39%. B2B billings for the full year increased by 52% to $248.2 million. Our land and expand strategy continues to be successful as evidenced by the growing number of customers with larger deal size. We now have 275 customers with annual billings of over $100,000, a 76% increase year-over-year. In addition to our deal sizes increasing, our total B2B user count increased to over 810, 000 at the end of 2018. B2B customers now represent approximately 85% of our total billing. And as Aaron mentioned, our B2B dollar-based net retention grew to 128% as of the end of 2018, up from 117%.

Our Q4 gross margin was 77%, up from 75%, and our full year 2018 gross margin was 76%, up from 74%. We see a clear path to further improving gross margins to over 80%. Our operating expenses in dollars increased year-over-year as planned but decreased as a percentage of revenue. Total operating expenses increased only 12% in Q4 compared to our total billings increase of over 40%, demonstrating another quarter of increasing leverage in our model and a clear path toward sustained profitability. Non-GAAP net loss per share in Q4 was $0.09, a significant improvement over our net loss per share in Q4 last year of $0.53. We saw a significant improvement in operating cash flow at positive $8.4 million in Q4 compared to negative $1.3 million last year. And free cash flow was positive at $5.2 million in the quarter compared to negative $3.4 million last year.

Our improving earnings per share and cash flows are strong indicators of the operational efficiencies we are leveraging in our business as we grow. We closed the quarter with total cash of $211.1 million and our on-balance sheet backlog as expressed by our deferred revenue was $172.6 million at the end of the year, up 55%.

Turning now to guidance. For Q1 2019, we expect revenue to be in the range of $68 million to $68.5 million, an increase of 38% over Q1 2018 at the midpoint of the range. We expect Q1 non-GAAP net loss per share to be in the range of $0.08 to $0.09 assuming weighted average shares outstanding of approximately 135 million. For the full year 2019, we are increasing our expected revenue range to between $306 million and $314 million, an increase of 34% over 2018 at the midpoint of the range. Our increased revenue range and overall revenue expectation in 2019 will be supported by continued investment in our go-to-market teams to accelerate momentum and user growth.

Also on the back of the meaningful platform enhancements we released last August like Role IQ, interactive courses and projects, we will be increasing the price points for our two B2B SKUs beginning next week. We are increasing the list price of our professional SKU to $579 per user and the list price of our enterprise SKU to $779 per user. Just as in 2018 about two-thirds of the 2019 growth will come from additional users and about a third will come from price uplift. In addition to increasing our 2019 revenue range, we are also improving our expected non-GAAP net loss per share to be in the range of $0.26 to $0.32, assuming weighted average shares outstanding of approximately $137 million.

And with that, I'd like to turn the call back over to Aaron. Aaron?

Aaron Skonnard -- Chief Executive Officer

Thanks James for sharing the results of our outstanding quarter and year. Now let me share more context behind what's driving this performance. Large enterprises continue to embrace Pluralsight as the key partner to avoid disruption and advance innovation within their company. Expanding our footprint within existing customers which include approximately 70% of the Fortune 500 is a key growth opportunity for Pluralsight. As an indicator of our ability to significantly expand on our customer base, billings from our Top 25 customers for the last 12 months increased by approximately 20 times from the billings we generated from those same customers in the year of their initial purchase. This has helped lead to our strong and growing dollar-based net retention rate of 128%.

In addition to expansion, we also saw strong performance in net new business during the quarter, as demonstrated by over 570 new business customer wins. These included a Fortune 50 multinational aerospace corporation, a Fortune 500 industrial supply corporation, one of the world's largest multinational banks, a Fortune 100 airline and the national law enforcement agency of a major European country. These new customer wins demonstrate that our platform works for any industry at scale. The combination of our acquisition of new customers and our ability to expand within our customer base resulted in a record quarter for Pluralsight.

Another key element of our go-to-market strategy is our partnerships with leading technology companies. We are now strategic partners with the three largest cloud providers in the industry, Microsoft, Google and Amazon. They see us as the technology skills platform for all of the developers that work in their ecosystems. Partnering with these tech giants allows Pluralsight greater access to the Global 2000 than ever before. And we expect these relationships will help accelerate our growth throughout the world.

In Q4, we continued to strengthen our partnership with Microsoft. We completed the build-out of multiple Azure Role IQ including solution architect, developer and administrator, and are in the process of creating additional roles and determining how to better support Azure customers to increase Azure adoption within their respective organization. Our customers depend on Pluralsight as the authority for Azure skill development. Also in Q4, we continued to build our partnership with Google. In addition to the 52 courses and four learning paths we currently offer, we integrated Google cloud content produced by Google and are piloting the experience for our customers. We are currently developing a deeper plan for curriculum and go-to-market alignment.

Finally, we're excited to announce that we signed an agreement to collaborate with Amazon Web Services. We are now officially building B2B pipeline with AWS with over 90 deals currently in progress. And we anticipate this partnership expanding and developing meaningful pipeline contribution in 2019 as it scales. In addition to the big three cloud providers, we continue to bring momentum with Oracle, Pivotal and other partners that help increase demand for our platform. In short, our content partnerships, strategic relationships and referrals from our technology partners have proven to be mutually beneficial in 2018 and we expect to expand these relationships in 2019 and beyond.

Our enterprise customers continue to experience strong value in our platform and I'd like to share a few examples. Dimension Data is an $8 billion global systems integrator and managed services provider. Thousands of multinational enterprises rely on Dimension Data to provide innovative technology solutions which is why it's a high priority to ensure their talent is top-notch. Anthony Shaw, Group Director of talent development and management, looks back on the last few years as a customer and describes the return on investment. He says, I did an investigation into our training spend and uncovered that we were spending about 75% of our training on external classroom training, but only trained about 13% of our staff. So the savings and skills that come from using Pluralsight are exponential. We can train our entire staff faster and more cost-effectively.

Shaw continues, I have a lot of testimonials of engineers who have used the skills they've learned on Pluralsight as leverage to deliver value for clients. And as I keep hearing those stories, Pluralsight pays for itself. With such a clear improvement over the old way of skill development, Dimension Data recently opened access to Pluralsight to their entire company. Anyone who wants access, gets it.

Now let me tell you about Fujitsu, another customer who is one of the global leaders in IT services with customers in more than 100 countries. Fujitsu intimately understands the pressures brought on by digital transformation. As a result, they are using Pluralsight to ensure their technologists are current and equipped with the knowledge they need to shape and deliver solutions for their customers. They are saving millions by relying less on external expertise and traditional instructor-led training. They are also increasing growth by winning new contracts. They win by demonstrating high caliber technical expertise to deliver world-class service.

Our platform is applicable to companies of all sizes, including the commercial or mid-market segment of our business which contributed to our strong results in 2018. A great example from our commercial business is Nature's Sunshine. Nature's Sunshine is a wellness company serving customers around the world with nutritional and personal care products. With the commitment to shifting better software faster and a modernized front-end web environment, they partnered with Pluralsight to skill up employees and technologies like Azure, DOTNET and Angular. With the help of Pluralsight, Nature's Sunshine has been able to leverage Azure's services in their business and they are now running large-scale cosmos databases in the cloud.

Developers that were hired decades ago working on a mainframe are now developing in the cloud citing 100% of their cloud knowledge coming from Pluralsight. Michelle Bannon their CIO says, on our journey to the cloud we're about a third of the way done. We have six major milestones that involve Azure and we've already hit two of them. And we have confidence that we will hit the remaining milestones with Pluralsight. All of these customer examples demonstrate how Pluralsight can help any organization from any industry become a tech company in the future.

We ended the year with over 1,500 expert authors creating content on our platform. We receive approximately 1,000 new author applications per quarter and we select about 5% of them. This exclusive author community consistently delivers world-class highly curated content that drives more users to our platform and increases retention. Our platform offers experts an excellent way to monetize their knowledge and experience. We now have 84 authors making over $100,000 a year and the top author made nearly $2.5 million in 2018.

Turning to our platform. In 2018, we saw significant progress with Skill IQ. Since launching in late 2017, we've had over 1.6 million assessments completed and over 30 million questions answered. Skill IQ is transforming the way that CIOs and CTOs manage their people allowing a God's eye view into the strengths and gaps in their organization. In Q3 we launched Role IQ, the newest member of the Pluralsight IQ family. As a quick recap, Role IQ gives our customers a groundbreaking new way to measure proficiency in and for a role. In Q4 we launched several new roles including Java developer, cloud architect on AWS and developer on AWS. In the short period since launch, we have over 135,000 Role IQs in progress.

We've seen customers use Role IQ to uncover hidden talent often outside the technology organizations, to fill hard to find roles in development and data science. Like Skill IQ, we have made the Role IQ experience acceptable to anyone. And the large amounts of data we collect from both are helping enterprises diagnose their skill gaps and build the roles they need to execute their strategies. The Skill and Role capabilities in our platform have led to our customers NPS of 63, which is best-in-class for enterprise software. And our user growth and satisfaction metrics ultimately lead to the most important measure of customer satisfaction and that is what we believe to be our outstanding and growing net retention rate of 128%.

The major platform improvements we made in 2018 have and will continue to increase adoption and usage of our platform across the enterprise, all of which improves retention and unit economics. In Q4, we further strengthened our Board with the appointment of Google VP of Global Partnerships, Bonita Stewart, and former SVP of Citi, Leah Johnson. Bonita and Leah bring large enterprise experience to the Board room and have already contributed their expertise as we move into our first full year as a fast-growing public company.

Now a few words about our social enterprise, Pluralsight One. On October 11, Pluralsight One successfully went live with its inaugural nonprofit products. The community of Pluralsight One product users grew from 0 to 34 nonprofit organizations across five countries in just eight weeks with organizations like Save The Children, Path, Teach for America and Scholarship America. In November, Pluralsight One was invited to share its work at the NetHope Global Summit in Dublin with over 50 of the world's leading NGOs and over 550 attendees representing 30 countries.

In addition to speaking, we hosted a half-day workshop on digital transformation. Participants in the workshop are now piloting a custom Pluralsight One content solution that is designed to scale across the NetHope member community. Success with these nonprofits will help close the global skills gap creating more technologists in the market which in turn produces more potential users and increases our TAM.

To summarize, our milestone year, we achieved over $100 million in billings in Q4 and our seventh quarter in a row with over 50% growth in B2B billing. We grew revenue by nearly 40% in 2018 and strengthened and created partnerships with Microsoft, Google and Amazon to help drive future growth. We added 200 basis point to our gross margin and demonstrated the profitability leverage inherent in our business model by generating cash flow in the second half of the year. While we are proud to have exceeded the 2018 commitments that we made during our IPO in May, we know we are still in their early innings as a public company and we are committed to create more of the same in 2019 and beyond.

And with that, I'll turn the call back over to the operator for some Q&A.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Brian Essex from Morgan Stanley. You may proceed with your question.

Brian Essex -- Morgan Stanley -- Analyst

Hi, good afternoon, and thank you for taking the question. Congratulations on the quarter. Great results. I was wondering if you could touch on a little bit on -- you announced the price increases for professional enterprise. What is being your experience with the price increases historically? How do you anticipate delivering those to customers in terms of grandfathering legacy pricing versus converting to new pricing? And maybe lastly could you touch on the additional features and functionality that you have that might support those increases as customers assess that change?

James Budge -- Chief Financial Officer

Yes, thanks, Brian. Thanks for joining. I'll take that one. I take you back probably a year ago to answer the question a little bit. If you remember with all the excitement we had around Skill IQ, skill assessment in 2017 at Pluralsight LIVE, we rolled that into a new line, our enterprise SKU with 699 SKU we put out at the beginning of 2018. And since that time, we've seen about 45% to 50% of our enterprise customers move on to the enterprise SKU that's 699 SKU relative to the 499 SKU professional SKU we have prior to that. In aggregate we have about 20% to 25% of our overall customers that are now on the enterprise SKU and we see that continuing to climb as we move through 2019.

So as we came in to 2018 and at least in our estimate we actually put out more capability, more technology, more into the platform 2018 relative to 2017 with some of those items I mentioned like Role IQ, interactive courses, projects, some other capabilities, more content, all of what we did at the beginning of '18 gave us the conviction and bouncing that off of a number for customers that we could slightly increase both the professional SKU which hasn't seen a price increase in a long, long time. And even take the enterprise SKU while being a new SKU we thought we could take the price of that as well given the capability in the platform. So we're confident we can get there. We have -- already have customers adopting on to the new price points as we speak. And we expect to see that as we go through 2019 to continue to increase.

To your question about the legacy customers, certainly those who've signed into multi-year cycling (ph) packages in the last 6 or 12 months, we're going to honor those, they would continue to have that pricing as they go forward. But as their contracts comes to an end and we go back for another price discussion we'd expect to have that at the higher price point higher list price contemplated in those discussions.

Brian Essex -- Morgan Stanley -- Analyst

Makes a lot of sense. That's a great color. Thank you very much.

Operator

Thank you. And our next question comes from Brad Sills of Bank of America Merrill Lynch. You may proceed with your question.

Brad Sills -- Bank of America Merrill Lynch -- Analyst

Great. Thanks guys for taking my question. I wanted to ask about net revenue retention. It's been a nice acceleration through the year. Could you unpack that a little bit for us and just in terms of what's been driving that user expansion within these accounts on renewal or upsell of additional modules, just any color on kind of what's driving that between those two?

James Budge -- Chief Financial Officer

Yes, thanks Brad. This is James. I'll take that again. I think again as a reminder we've gone from the 117% at the end of '17 to 128% at the end of '18. So we not like the 128% in absolute terms but we like the trend and if I take you back even another year, I know you know that we're 109% at the end of 2016. So the trend has been fantastic. We've got teams that are focused on it. We have a better platform today than we had a year ago or two years ago to keep people engaged and wanting to come back for more. When you do unpack that a little bit, I'll just remind that the net revenue retention the net billings retention number we have is higher. So Aaron's comments, prepared remarks, he did mention that we see that continuing to go higher, probably not a ton more but we do expect that get into the 130% over the next year or so.

So a lot of good growth. And the comp what has driven that has been a combination of our gross retention significantly improving relative to a year ago. And not just retaining those that are with us but adding a lot of users along the way. And we've grown from under 600,000 users of B2B customers to over 810,000. So a lot of users that we've added along the way and those incremental users with new customers and expansions on existing customers on top of the incremental price points, all based on the back of the platform just delivering a lot more value is what's driven that.

Brad Sills -- Bank of America Merrill Lynch -- Analyst

Great. Thanks so much, James. And then maybe one more follow-up quickly. Aaron, if you could elaborate on the AWS partnership. It sounds exciting. What does this entail and how are you guys -- how are you that's two companies going to market together?

Aaron Skonnard -- Chief Executive Officer

Yes, the AWS relationship is the newest of all of them. And it's really a co-selling partnership. We are taking our AWS content that we have on our platform and together selling that into their market through their go-to-market model. I'm really excited about what that -- what opportunity that holds for us. We currently have 90 deals in our pipeline that have come through that channel. And we continue to invest in more AWS related content as we continue to build that partnership over time.

Brad Sills -- Bank of America Merrill Lynch -- Analyst

That's great. Thank you so much.

Operator

Thank you. And our next question comes from Sterling Auty from JPMorgan. You may proceed with your question.

Sterling Auty -- JPMorgan -- Analyst

Yes, thanks. Hi, guys. Aaron, wanted to start with you. As we think about the content on Pluralsight, obviously very focused toward the developer community. You're seeing a lot of uplift in terms of the content around cloud and the success around it. I'm curious where does the content go from here? Meaning, do we start to see that branch out toward more of maybe usability courses for those in IT operations or other types of use cases around the content or does it stays laser-focused on the developer for the time being?

Aaron Skonnard -- Chief Executive Officer

Yes, great question, Sterling. We are laser-focused on the technology ecosystem. So the technologies that the CTO, the CIO care about and really needs to go succeed and win it with their own technology strategy. So that umbrella can encompass some of the things you mentioned along with all of the other things that we currently cover and are investing in. Today, our top content priorities are in areas like cloud, AI, machine learning, data science and cyber security. Those are the areas that we're heavily investing in from a content perspective. Those are the technologies that most of the large Fortune 500 customers that we work with are moving toward quickly. And we're going to continue to move at that same pace with all the new technologies that come out in the years ahead. So we're completely committed and focused on that.

The other thing we're looking at in terms of future adjacencies beyond content is how we can deliver even more capability around the application of the knowledge that they're learning on our platform. Today we have a few experiences around that like interactive courses and projects which allow them to apply the skills they've learned. In the future we're going to be investing and experimenting with how we can deliver even more value all the way through to the prediction code that they write which will start to look like the -- an experience around developer productivity. So as we continue to move forward, those are the things you'll see us investing in.

Sterling Auty -- JPMorgan -- Analyst

That make sense. And then the number of users now in excess of 800,000 that's a lot more viewing hours and a great opportunity for the authors on your platform. Curious what that means in terms of what you're experiencing around author royalty rates?

Aaron Skonnard -- Chief Executive Officer

Yes. So, with the author fees that we pay, we are continuing to see more efficiency around those as a whole every year. So the -- as the top line revenue grows, we have more dollars to share with our authors. And since we've don't grow the author community as quickly as we do our top line, more dollars means the rising tide for all boats, while the total percentage of author fees we're paying against revenue continues to become more efficient each year.

Sterling Auty -- JPMorgan -- Analyst

Great. Thank you.

James Budge -- Chief Financial Officer

Thanks, Sterling. You're welcome.

Operator

Thank you. Our next question comes from Terry Tillman from SunTrust Robinson. You may proceed with your question.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Yes, good afternoon gentlemen. Can you hear me OK?

James Budge -- Chief Financial Officer

Yes.

Aaron Skonnard -- Chief Executive Officer

Yes.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Yes. Hey, guys. I like the earlier congratulations comment, first of all. Aaron, I love the snapshot as to customers and the one that really stood out for me was I think Mr. Shaw with Dimension Data -- for Dimensional Data, how we say that. And just the realization of what they didn't know before and now being able to unleash this across their entire user base. So they're better, they're smarter. Everybody gets exposure, they reduce that skill gap and yield you more revenue. So, I guess what I'm curious about is you're serving 70% of the Fortune 500 and this is a bigger picture question. Where do you think the penetration is right now for your product and what are the gating factors to not having a 100% adoption across each of these businesses IT staff at this point?

Aaron Skonnard -- Chief Executive Officer

Yes, great question. So to reiterate where we're at with the Fortune 500, we are currently approximately 70% penetrated into those 500 companies. That means we're in 70% of the 500 companies at some level. If you go the uplift penetration within each of those accounts, we're only 5% penetrated. So there's still a long runway of growth within each of the Fortune 500 companies that we're currently selling into. And we have the other 30% to go get. And there's really nothing standing on our way of getting those other than our own go-to-market evolution which we're working on actively as we speak.

So we see a lot of opportunity that continue to expand within the Fortune 500. And our focus on technology and the technologies that depict skills that matter to these companies are where we're putting all of our resources. Because for each of those companies, all of them are striving to become tech companies. Now you have banks saying to the tech companies these guys their thanks. And every industry is shifting more and more to data, data science and AI. And so we're investing there and we see ample runway not just in the Fortune 500 but also across the Global 2000 and are really excited about what that holds for us.

James Budge -- Chief Financial Officer

I might just put a emphasis on that last point from Aaron, Terry, is that just comment that while we're at 70% of the Fortune 500 and still tons of runway to go there as I mentioned. We're less than 40% of the Global 2000. So you heard us speak to the investments we've been making outside the US. We continue to make those investments a little bit outside the investment in our go-to-market outside the US relative to inside the US. And we expect that Global 2000 percentage to considerably ramp up over the next 12 months to 24 months.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Okay, OK. Thanks, James. And I guess follow-up for you James is you gave some good color earlier in terms of how the growth, where the growth comes from in 2019. I think two-thirds was from additional users, one-third from just kind of the pricing as a lever. I think -- but in that two-thirds if I've got that right, how much of the new user kind of expansion do you see from new logos as opposed to those Fortune 500 or G2K accounts just doing the expansion. And is that's going to shift at all because some of us are holding on this new customer count each quarter. And I just want to try to understand will that change the mix at all from new logos versus expansion or is it still be about the same as '18? Thank you.

James Budge -- Chief Financial Officer

Thank you. Yes, when you look at overall billings of the Company, the way we define new versus expand and renew, our new business continues to increase as a percentage of the overall pie every year. We have a pretty tight description of it and definition of what new equals. And right now we're trending toward that 20% of our overall billings in any given year is coming from new business and that's come up fairly well over the last couple of years. So, a lot of emphasis we put into new, driving more pipeline there and sensing a lot of our sales force to drive more new, that's certainly going to be a feeder for us over time as we continue to grow.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Thank you.

Operator

Thank you. And our next question comes from Scott Berg from Needham. You may proceed with your question.

Joshua Reilly -- Needham & Company -- Analyst

Hey, guys, this is Josh Reilly for Scott. Aaron, Scott was at the Silicon Slopes Conference two weeks ago and saw used to coming to some expense peer pressure. How do you send (ph) all the growth versus profitability question now that you will generate some positive free cash flow in 2019? Do you reinvest all the profit upside through the year to drive more revenue growth or will some fall to the bottom line? Thank you.

Aaron Skonnard -- Chief Executive Officer

Yes, you bet. Yes, that's -- that Silicon Slopes moment was us all committing personal resources to go drive advancement in computer science here in Utah just to be clear. Several of the top CEOs in the state committed millions of dollars to ensure that we can get computer science into every Utah school by 2022. Regarding your other question around growth versus profitability we're very comfortable with our current mix and how we see that. We are committed to remaining cash flow positive but while still continuing to deliver high growth for the business.

James Budge -- Chief Financial Officer

Thanks, Josh.

Operator

Thank you. And our next question comes from Brian Peterson from Raymond James. You may proceed with your question.

Brian Peterson -- Raymond James -- Analyst

Thanks, gentlemen. And I'll add my congratulations, really strong results. So, I just wanted to start on Role IQ. You mentioned 135,000 assessments. I'm curious if that activity is concentrated within some of your large enterprise customers or is that spread more broadly across the base? And are you seeing users complete multiple Role IQ assessments if I think about 135,000 that's 17% of your user base which is pretty astounding in just six months. So any color on that?

Aaron Skonnard -- Chief Executive Officer

Yes, yes, no, great observations. To answer your question specifically, it's spread broadly across the entire customer base and our large enterprise customers are driving significant value from it. To put it in perspective, in listing in a Role IQ would be roughly equivalent to enlisting a boot camp, like these high cost boot camps that exists down in the marketplace that people spend tens of thousands of dollars on to go get trained up in a new role to get a new job in a new industry. Our Role IQs make this highly accessible at a much lower price point which can then help people get from one role to another role which comes with tremendous value for everyone involved.

Brian Peterson -- Raymond James -- Analyst

Got it. That's a great color. And James maybe one from for you, just on hiring trends for the sales force, where did we end in the fourth quarter and any thoughts on how we should think about that in 2019?

James Budge -- Chief Financial Officer

Thanks, Brian. Total quota-bearing reps closing in at around 240, we expect that to grow to probably over 300 as we roll through 2019. So definitely when we think about where our investment to the point Aaron was making earlier where investment goes in 2019 how much of investment goes go-to-market and product, are by far the two biggest areas where we're investing in 2019 similar to what we did in 2018. Some more reps to come, more on quote on the Street and more goodness from them.

Brian Peterson -- Raymond James -- Analyst

Got it. Thanks guys.

James Budge -- Chief Financial Officer

Yes. You bet.

Operator

Thank you. And our next question comes from Corey Greendale from First Analysis. You may proceed with your question.

Corey Greendale -- First Analysis -- Analyst

Great. Good afternoon and congratulations on the first great year as a public company. So couple of strategic questions actually this was a last -- building on the point about Role IQ and your compares for the boot camps, Aaron. Is the design so that if somebody is effectively tech illiterate like they have not tech background, they can use that to get a tech position or it's -- because that's what I think of the boot camps often or are there any to start with a certain level of proficiency?

Aaron Skonnard -- Chief Executive Officer

Yes, ours are really focused, Corey, on a higher level of proficiency. So it's not our Role IQs are not the same in that way taking someone who is like completely tech illiterate. Our Role IQs would help someone navigate from one technology role to another technology role in general for a professional developer. A single Role IQ would consist of six to nine technology skills and those would be measured and certified via six to nine Skill IQs. And there's approximately anywhere from 30 hours to 70 hours worth of learning content and experiences for each of these Role IQ experiences that we offer. So in terms of the amount of content sort of the significance of the upskilling, it would be equivalent to a professional developer going to a training force to shift from one technology role to another technology role. Does that help?

Corey Greendale -- First Analysis -- Analyst

It does help. And then the other question is -- congratulations on the Amazon partnership. That's great to see that one added. So I guess question about that in particular and all the partnerships. On Amazon in particular, I know that they relatively recently kind of opened up their internal content for training people on machine learnings that anyone can access it for free. But I think that's just through their own platform not through Pluralsight. So kind of how does -- how are they viewing, delivering directly versus working with you?

And then secondly, looking at all the partnerships the more you could get into things like making the code base more efficient as you mentioned in response to another question, the more they get into things closer like what GitHub does. So where do you see these partnerships going? We're on the kind of (inaudible) spectrum do you think they have a hope (ph) over the next few years?

Aaron Skonnard -- Chief Executive Officer

We see them all as friends. Look our relationship with Microsoft over the last five years I think is a great example of what we can develop with both Google and AWS. Although Microsoft has a lot of their own internal content similarly what you described with AWS is mostly oriented around a community strategy. And we supplement that with professional technology skill development that can be verified and certified through Iris and Pluralsight IQ. And that is what has them come to us, what makes us really great complementary partners and why we see the big three cloud providers being a strong channel for us to drive future growth down the road.

James Budge -- Chief Financial Officer

It's still a great data point to give on our -- the former Lynda.com works with you as their provider. So...

Corey Greendale -- First Analysis -- Analyst

Great. Thanks very much.

Aaron Skonnard -- Chief Executive Officer

Yes, you bet. Thank you.

James Budge -- Chief Financial Officer

Thank you, Corey.

Operator

Thank you. And our next question comes from Jeff Meuler from Baird. You may proceed with your question.

Jeff Meuler -- Baird -- Analyst

Yes, thank you. One update number that really jumps out to me. I think you said 20 times growth on the top 25 relative to their first year with you, and a quarter ago I think that was 18 times. So I just -- can i actually read into that that you're seeing that bigger sequential growth in your top accounts or did you just change the methodology or something? But just -- are you seeing that healthy double-digit sequential growth in the top accounts?

James Budge -- Chief Financial Officer

I love the observation. The methodology has been exactly the same. And I'll take you back even further. We were saying 9 times every time we went public which was only eight, nine months ago. So it's gone from 9 times to 12 times to 15 times to the 18 times you mentioned and now we're at 20 times. So definitely seeing going back to the question around the Fortune 500 and penetration a lot of that is seen from the continued expansions into those accounts where we've got our first foot in the door.

Jeff Meuler -- Baird -- Analyst

Awesome. And then just a clarifying question on the Amazon partnership. So with AWS when they are selling, it sounds like they'll be paying for the sales resources but the customers that they're selling to, do they just have access to the AWS portion of your content library or do they have access to the full platform of the full content library?

Aaron Skonnard -- Chief Executive Officer

They have access to the full library. And it's a pretty simple referral model. They bring us in sometimes we both go in together co-selling and they're basically just referring us and to do a direct sale into that customer. So our pipeline we're closing the business in the end, paying our sales reps for that business.

Jeff Meuler -- Baird -- Analyst

Thank you.

James Budge -- Chief Financial Officer

You bet.

Aaron Skonnard -- Chief Executive Officer

Thanks, Jeff.

Operator

Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Mr. Aaron Skonnard for any further remarks.

Aaron Skonnard -- Chief Executive Officer

All right. Thanks everyone for being here. Just want to thank all of our customers, our shareholders, our authors and our team members for your continued support. And we look forward to talking to you again next quarter.

James Budge -- Chief Financial Officer

Thank you.

Operator

Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. And you may all disconnect. Everyone have a wonderful day.

Duration: 46 minutes

Call participants:

Mark McReynolds -- Director of Investor Relations

Aaron Skonnard -- Chief Executive Officer

James Budge -- Chief Financial Officer

Brian Essex -- Morgan Stanley -- Analyst

Brad Sills -- Bank of America Merrill Lynch -- Analyst

Sterling Auty -- JPMorgan -- Analyst

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Joshua Reilly -- Needham & Company -- Analyst

Brian Peterson -- Raymond James -- Analyst

Corey Greendale -- First Analysis -- Analyst

Jeff Meuler -- Baird -- Analyst

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