Earnings Call Transcript - OTEX Q1 2024

Operator, Operator

Thank you for standing by. This is the conference operator. Welcome to the OpenText Corporation First Quarter Fiscal 2024 Financial Results Conference Call. The conference is being recorded. I would like to turn the conference over to Harry Blount, Senior Vice President, Investor Relations. Please go ahead.

Harry Blount, Senior Vice President, Investor Relations

Thank you, operator. Good afternoon, everyone, and welcome to OpenText's first quarter fiscal 2024 earnings call. With me on the call today are OpenText Chief Executive Officer and Chief Technology Officer, Mark J. Barrenechea; our Executive Vice President and Chief Financial Officer, Madhu Ranganathan; and also joining us is Paul Duggan, Executive Vice President and Chief Customer Officer. Today's call is being webcast live and recorded, with a replay available shortly thereafter on the OpenText Investor Relations website. Earlier today, we posted our press release and investor presentation online. I'm pleased to inform you that OpenText management will be participating at the following upcoming conferences: RBC Capital Markets Global Technology, Internet, Media, and Telecom Conference on November 14 in New York; Needham's Virtual SaaS Conference on November 16; TD Securities Technology Conference on November 21 in Toronto; Bank of America Securities Leveraged Finance Conference on November 28 in Boca Raton; Wells Fargo Technology, Media, and Telecom Summit on November 29 in Rancho Palos Verdes; UBS Global Technology Conference on November 30 in Scottsdale; Scotiabank's Global Tech Conference on December 5 in San Francisco; Nasdaq's Investor Conference on December 5 in London; and Barclays Global Technology, Media, and Telecom conference on December 7 in San Francisco. Now onto our Safe Harbor. During the course of this conference call, we may make statements relating to the future performance of OpenText that contain forward-looking information. Actual results could differ materially from projections made today. Certain material factors and assumptions were applied in making these statements. Additional information about these factors can be found on our website. We undertake no obligation to update forward-looking statements unless required by law. In addition, our conference call may include discussions of certain non-GAAP financial measures. Reconciliations of any non-GAAP financial measures to their most directly comparable GAAP measures may be found within our public filings.

Mark Barrenechea, CEO and Chief Technology Officer

Harry, thank you. Thank you for joining us today. It's an exciting start to our new fiscal year 2024. We had record Q1 revenues of $1.43 billion, double-digit cloud revenue growth, and adjusted EBITDA of 34.7%. It was another quarter of cloud organic growth, ARR organic growth, and strong renewal rates in the mid-90s. Customers showed tremendous trust and confidence in OpenText during the quarter. Bombardier chose OpenText for their legal tech AI platform. CNP chose OpenText for large contract AI analysis. And Infosys chose OpenText for developer testing, automation, and generation. Great information management is a prerequisite for great AI, and we intend to compete in and win both information management automation and AI. The OpenText business is best analyzed and measured on annual performance. We manage the business to longer cycles than 90 days. Thus, our quarters do vary. Based on our strong Q1, our strong product cycle, and forward visibility, we have confidence in our fiscal '24 constant currency targets: $5.85 billion to $5.95 billion in revenues; 36% to 38% adjusted EBITDA; $800 million to $900 million in free cash flows, including total revenue organic growth, 15% plus enterprise cloud bookings growth; and returning Micro Focus to organic growth. We are shifting from growth primarily driven by M&A to growth driven by product innovation and go-to-market execution. You can see our new Total Growth model with our fiscal '26 aspirations on Slide 21 of our Investor Relations deck. It includes 15% plus enterprise cloud bookings growth, 7% to 9% cloud revenue growth, and 2% to 4% ARR growth, plus any future M&A and margin expansion, plus dividends and buybacks. Combined, this yields returns to shareholders. We are focused on the fundamentals that drive shareholder value. Slide 13 of our Investor Deck highlights our new shareholder value approach and how we intend to create value through 6 fundamentals: first, expand our competitive differentiation in information management; expand customer consumption; unlock new value areas such as SaaS and AI; expand our go-to-market; realize higher profits and cash flows from those higher revenues; and continue to return capital to shareholders via our dividend programs and future share buybacks. Let me walk you through each one of the value drivers. Competitive advantage is everything. We offer the most comprehensive information management platform in the market, affording customers many paths to value and paving the way for new value as the world embraces AI. To accelerate these outcomes, we expect to invest up to 16% of revenues in R&D, and we expect these investments to support our fiscal '26 growth aspirations of 7% to 9% organic cloud growth. Second, expanding our customer consumption is a threefold strategy: first, by being the market leader in each of our business clouds and driving more consumption within each, content, experience, business networks, applications, automation, IT operations, and security; second, by embedding security and content across all of our business clouds; and third, by providing customers choice and continuing to provide them choice, off cloud, private cloud, public cloud, API cloud. We provide the flexibility to pair the right workload with the right consumption approach so our customers can focus on the right model for their business. Third, we have new value areas to unlock, very focused in SaaS and AI. While we are executing well overall, and we have many programs to enhance value, we are very focused on unlocking new value from SaaS and AI. Titanium was SaaS driven. Titanium X is both AI and Micro Focus cloud driven. Expect us to spend disproportional time in these areas. And for Q2, we expect to see 20% year-over-year growth in enterprise cloud bookings, another positive sign of unlocking new value. We will expand our go-to-market. We have one of the largest enterprise sales forces in software, and we enter fiscal '24 with clear market lanes and resources across strategic accounts, enterprise accounts, corporate and business accounts, as well as the home. We are making it easier for customers to connect with our products to consume more. Over 500 partners attended OpenText World as we relaunched our partner network focused on cloud and AI. And you can already see our progress within strategic accounts such as Microsoft and SAP in enterprise business applications, Google with cloud infrastructure and AI, and AWS with mainframe modernization, a remarkable level of interest in our long-term strategy. We also intend to realize higher profits and higher free cash flows from higher revenues. With our expanded mission in information management and greater operational scale, this provides us greater opportunities to automate and to use AI to drive even greater operational synergies. Higher revenues and higher EBITDA translates to increased cash flows, which is reflected in our fiscal '26 aspirations of adjusted EBITDA of 38% to 40% and $1.5 billion plus in free cash flows. We anticipate the operating leverage in future years to only get stronger. And finally, capital allocation as a strategic value driver. Our capital allocation principle is to return approximately 20% of trailing 12-month free cash flows via dividends. Since fiscal '13, we have returned $2.2 billion via dividends and share buybacks. And we expect that as our free cash flows grow, so do our dividends. And as our net leverage decreases below 3x, we would expect to return to our share buyback program. This is our new growth model and our new value creation approach as we shift from growth primarily driven by M&A to growth driven by product innovation and go-to-market execution. Let me close on a few points. OpenText is in a great position to help our customers build the next generation of work, the next generation of experience, the next generation of service management, business fabrics, and supply chains. And to do this with the highest levels of trust and security. I'm excited about our growth agenda helping customers modernize their businesses and their information platforms, helping them consolidate customer data into our information cloud, providing cyber tools to create trust and security, consuming more SaaS applications, helping developers be more productive and at the highest levels of quality, and building AI platforms for humans. The promise of AI starts with great information management. Our Aviator AI software is built into our business clouds, Aviator Platform embedded into our automation with pluggable language models, Aviator Thrust building smarter applications, Aviator Search interacting with information in whole new ways, Aviator IoT embracing the next generation of device-generated information, and our individual Aviator Business Clouds. We are already working with customers to create exciting new AI personas via Aviator, such as the next-generation tech support assistant, a mortgage advisor, a claims adjuster, and an HR business partner. We are also working with customers to simply get more efficient via AI. You can start to see us unlocking AI value with our expected Q2 20% year-over-year growth in enterprise cloud bookings. Our shift to a new Total Growth model driven by innovation, with emphasis on high-quality growth, will enable us to deliver strong metrics for profitability and cash flows at scale. Our 6 fundamentals of new shareholder value will uniquely position us as a choice investment in the technology sector. My deepest appreciation to our 24,000 colleagues at OpenText who live our mission every day to make our customers wildly successful. We pray for the hostages and innocent everywhere, and we join the global community in the hope of a peaceful and prosperous future for the Middle East region. May peace be for all. Let me turn the call over to Paul Duggan, our Chief Customer Officer, who will speak to our renewal business, which grew organically in Q1; then Paul will hand the call over to Madhu, our CFO.

Paul Duggan, Chief Customer Officer

Great. Thank you, Mark. It's a privilege to be with all of you today to talk about our renewals business and the work we're doing to unlock value for our customers and shareholders. Before I do, let me tell you about my team, the Customer Success organization. We're responsible for renewals of cloud and off-cloud subscriptions, professional services and cloud delivery, and technical support. We brought these functions together following the Micro Focus acquisition and took on an enhanced mission called OpenText L.O.V.E., Land together, Operate, Value, Expand. OpenText L.O.V.E. means focusing on customer outcomes. It's all about turning promises made into promises delivered. When it comes to renewals, we believe if you deliver on those promises, customers succeed. And when they succeed, they stay with you, and those relationships will grow over time. Today, I'll speak to three areas: the strength of our renewals; an update on Micro Focus; and a few of the goals ahead for our team. First, OpenText has a strong record of maintaining exceptional and predictable renewal performance. Despite historic and disruptive world events, economic uncertainties, and unprecedented tragedies of the last decade, our renewal rates are unwavering. Q1 was no exception, finishing at 94% for cloud and off-cloud, excluding Micro Focus. Renewal rates directly correlate to the value of products and services to our customers, but it's also a measure of operational excellence. From our renewal systems, processes, and controls, to pricing and programs, to the automation simplifying the transactional elements, collectively, these also create a lifting force on renewal rates and help us protect and grow ARR over time. Second, raising the renewal rate on Micro Focus is a critical value unlocker. We started from day one of the acquisition, bringing the business onto our internal standards. We implemented a risk identification and mitigation playbook, growth programs like an extended support offering, and deep engagement with our sales and engineering leadership to shape overall consumption and expansion strategies. By the end of Q2, we'll have touched roughly 75% of the Micro Focus cloud and off-cloud subscriptions. We expect to touch 90% by February 1. As a result, we'll increasingly see the positive impacts of running the business in all the ways I described. I will give you two proof points on that impact: back in February, we took on a business operating in the low-80s on renewal rate, Q1 ended in the mid-80s, and it gives us now two consecutive quarters of improvement. We remain confident we'll end in the high-80s this year and expect to operate in the 90s in fiscal '25. The second proof point is that we did it for Documentum, taking renewals from the low-80s to the mid-90s, where we are today. And now we are doing it for Micro Focus. Finally, looking to the future, it's all about growth. We already have a successful cloud renewal expansion motion in business networks and SMB. We're adding new offerings like a premium support upsell on our OpenText installed base, taking a very successful offering within the Micro Focus business, understanding the profile of customers that consume it, and extending that to similar OpenText customers. We also announced a new customer renewal portal last month. More than 90% of our cloud renewal business is auto-renewed, and with this new portal, we'll bring an automated and self-service option to our off-cloud customers as well. Our overarching goal is to position renewals and the entire Customer Success organization to play a more prominent role in consumption, AI adoption, and public cloud expansion.

Madhu Ranganathan, CFO

Thank you, Mark, and thank you, Paul. We appreciate all of you joining us today. Let me summarize the key points for today. Regarding Micro Focus, we expect to return Micro Focus to organic growth this fiscal year driven by successful integration. In Q1, OpenText executed extremely well in a volatile world with record Q1 revenues and year-over-year growth. Turning to our outlook. Our outlook fully reflects the performance we expect, bringing together two businesses with different seasonality trends and sales cycles. With Q1 actuals and Q2 quarterly factors, we remain on target for our internal plan. We expect a stronger second half and a seasonally strong Q4 as we end our fiscal year, including a return to organic growth for Micro Focus. These are important factors for our quarterization, and we encourage the analysts to better balance your quarterly models. We remain fully on track to meet our fiscal '24 targets and fiscal '26 aspirations. You are hearing today that we're shifting from growth primarily driven by M&A to growth driven by product innovation and go-to-market execution. This is our new Total Growth model with our fiscal '26 aspirations led by cloud and ARR. Moving to our Q1 results, please refer to the investor presentation as posted on our IR website. Starting on Page 24 of the presentation for the slide titled Q1 Fiscal '24 and Trailing 12-month Financial Highlights. On a year-over-year basis, enterprise cloud bookings of $121 million, up 8% year over year. We had record Q1 cloud revenue of $451 million, up 11.5% and 10.9% in constant currency. Q1 ARR revenue of $1.15 billion, up 59.1% and 57.5% in constant currency, and this represents over 81% of total revenue. This is the 11th consecutive quarter of organic growth in constant currency for both cloud and ARR. Its record Q1 total revenue of $1.43 billion, up 67.3% and 65.4% in constant currency, with Micro Focus contributing $563 million in the quarter. As stated in our last call, we expected Q1 free cash flows to be neutral to slightly negative due to interest, special charges, and integration costs, as well as seasonally lower working capital at the start of the fiscal year. We generated $47 million in operating cash flows and $10 million positive free cash flows in the quarter. Starting from Q2, we expect free cash flows to grow on a year-over-year basis in each subsequent quarter. We remain on track to realize our fiscal '24 FCF targets of $800 million to $900 million and achieve our fiscal '26 aspirations. Now, turning to the balance sheet, please refer to Page 26 of the investor presentation. We finished Q1 with $920 million in cash and $8.9 billion of total long-term debt. Our net leverage ratio was 3.6x for the quarter. In Q3, we mentioned our net leverage ratio would fluctuate slightly over the next few quarters while we remain on the path to a net leverage ratio of less than 3x by the end of fiscal 2025 or sooner. We have completed approximately $560 million of debt repayments since the close of Micro Focus transaction. Our revolver is now fully paid, and we have begun to make discretionary principal payments on the term loans. On November 1, our Board of Directors approved a quarterly cash dividend of $0.25 per common share. The record date for the next quarterly dividend is December 1, 2023, and the payment date is December 20, 2023. As Mark highlighted, for Q2, we expect enterprise cloud bookings to grow 20% year over year. Let me comment on the SMB market. The SMB market has been the most impacted by the current macro environment, which has affected our cloud revenues, but not our enterprise cloud bookings. During Q2, we expect to have a $10 million to $15 million revenue headwind from SMB. Our enterprise cloud business remains strong and is expected to grow revenues organically in Q2 and the rest of the fiscal year. Starting with our Q2 fiscal '24 quarterly factors of our investor presentation, on a year-over-year basis, we expect revenue of $1.45 billion to $1.50 billion, ARR of $1.1 billion to $1.13 billion, and adjusted EBITDA year-over-year margin between 36% and 37%. Our fiscal '24 targets in constant currency are provided on Page 30 of the Investor Relations presentation. Our fiscal '24 targets reflect total revenues of $5.85 billion to $5.95 billion, enterprise cloud bookings growth of 15% plus, cloud revenues up 6% to 8%, customer support revenues up 40% to 42%, and ARR up 24% to 26%. We also expect total revenue growth of 30% plus with organic growth in the range of 1% to 2%, and an adjusted EBITDA margin of 36% to 38%. Our free cash flows are on track to achieve $800 million to $900 million, which is our fiscal '24 target range. Our fiscal '26 aspirations remain unchanged. In summary, our Micro Focus integration is ahead of plan, and we expect to achieve important milestones in fiscal '24. It's a return to organic growth and renewal rates in the high-80s, and the Micro Focus business is expected to be on the OpenText operating model of adjusted EBITDA of 36% to 38%. Our shift to a new Total Growth model driven by innovation, with emphasis on high-quality growth, will enable us to deliver strong metrics for profitability and cash flows at scale. Our 6 fundamentals of a new shareholder value approach will uniquely position us as a choice investment in the technology sector.

Operator, Operator

The first question comes from Richard Tse with National Bank Financial.

Richard Tse, Analyst

Can I ask Paul a question here?

Mark Barrenechea, CEO and Chief Technology Officer

Richard, go right ahead.

Richard Tse, Analyst

Okay. Paul, from your vantage point, you've obviously been in the role and been successful at. What do you think have been the biggest, I guess, most meaningful drivers for increasing Micro Focus's renewal rate?

Paul Duggan, Chief Customer Officer

Richard, it comes down to 3 things. First, we moved fast to get Micro Focus on our OpenText practices for renewals, as I discussed in my prepared remarks. Second, we moved quickly to integrate the teams doing the work, getting renewals doing renewals and sales doing sales. When those lines are not clear, renewal rates tend to underperform. And third, as I speak to customers, I think they also see our product roadmap and the other things we've unveiled regarding our AI path, recognizing that information management is becoming a gating factor to fully embracing those step functions. All of these factors play a significant role in the decision to renew, as we can empirically see the improvement in rental rates.

Richard Tse, Analyst

Okay, great. So Mark, your recent OpenText World was a great event. There was certainly a ton of excitement around Aviator. What's been the follow-through since the event last month, and can you give us a sense of the momentum from a product perspective?

Mark Barrenechea, CEO and Chief Technology Officer

Yes. As I said in my notes, the product cycle, customer engagement, and clarity of our ability to provide practical value all fed into our comments today about increasing our bookings outlook for the quarter of 20% year-over-year growth. So we're definitely moving to the next phase of engagement with specific use cases. We've engaged with customers and got fantastic feedback from OpenText World, including 500 partners who were with us in Vegas. We're in engagements now, and we're going to win our first business, which will reflect first in bookings and thus our 20% year-over-year growth expectations for the quarter.

Richard Tse, Analyst

Okay. And then just one last question for me. I appreciate the shift here to an organic growth focus. But I imagine you still have a robust M&A team evaluating transactions. Given the backdrop today, what’s your sense of the acquisition landscape, and would you be in a position to move on something within the next 12 to 18 months?

Mark Barrenechea, CEO and Chief Technology Officer

Yes. Our organization is focused on a singular powerful concept, information management. We are transitioning from M&A-driven growth to organic growth, starting with a rich product pipeline, unlocking value in the cloud, and new value areas of SaaS and AI. If we find an opportunity like we did with KineMatik that enhances a specific aspect of our product in the context of our strategy, we won't hesitate. However, our primary focus remains on this singular powerful concept in our expanded mission in information management.

Operator, Operator

The next question comes from Thanos Moschopoulos from BMO Capital Markets.

Thanos Moschopoulos, Analyst

Also a question for Paul. To be clear, what remains on maximizing the renewals at Micro Focus? Is it primarily going through the annual renewal cycle with all the customers, or are there still some key steps that need to be done internally to really drive that organization to its potential?

Paul Duggan, Chief Customer Officer

Yes, great question. It's a number of things. The first is to get to each of the renewals, and we'll be mostly there by February. The step functions for us will be value-driven, focusing on product roadmaps and meaningful conversations. The decisions we see today were made 12 months ago, so we need to factor in the product roadmap at that time. You will see improvements from our systems and processes, and the intrinsic value of our offering will also play a significant role.

Thanos Moschopoulos, Analyst

Great. Mark, regarding integrating the go-to-market efforts, where do you stand with integrating Micro Focus and OpenText channels, and how much opportunity remains?

Mark Barrenechea, CEO and Chief Technology Officer

Our direct sales forces are fully integrated and aligned as we kicked off the fiscal year. We have a very formal segmentation and alignment for strategic accounts, enterprise accounts, corporate accounts, and business accounts. However, we still have work to do on the partner network launched in July. One organization is pursuing market areas, and we are now working on details to ensure we can capitalize on these partnerships.

Operator, Operator

The next question comes from Paul Treiber with RBC Capital Markets.

Paul Treiber, Analyst

Your outlook to achieve 20% cloud bookings growth this quarter is great and is an inflection from Q1, which is only 8%. Is that the right characterization? Are new AI products likely to drive this inflection, or is that reading too much into it?

Mark Barrenechea, CEO and Chief Technology Officer

No, our 20% bookings growth reflects our first AI bookings in that number. AI will contribute. Our Q1 is always seasonally light. We have a strong history of innovation in AI, and you’ll see the next set of wins reflected here. We believe we are well-positioned to capture this opportunity.

Paul Treiber, Analyst

You’ve had product releases before but sound enthusiastic about AI. Can you provide context around customer interest and the sales pipeline for your new AI products compared to previous releases?

Mark Barrenechea, CEO and Chief Technology Officer

Firstly, customers are actively engaging; there's a big awareness factor now. Second, our product is sitting on large datasets we've been building for our customers over the past year. This is the inflection point that will unlock information management for enterprises. We have relevant technology, and we’re ready to capture the opportunity.

Operator, Operator

The next question comes from Kevin Krishnaratne with Scotiabank.

Kevin Krishnaratne, Analyst

You said Micro Focus contributed $563 million in the quarter. Is that correct, and was that within your expectations?

Madhu Ranganathan, CFO

Yes, Kevin, it's Madhu here. So yes, $563 million in revenue. The integration is going very well, and we are ahead of our internal plan. We project Micro Focus to be on our 36% to 38% adjusted EBITDA this fiscal year.

Kevin Krishnaratne, Analyst

And on the SMB dynamic, can you share the $10 million to $15 million year-over-year revenue headwind?

Madhu Ranganathan, CFO

The $10 million to $15 million revenue headwind is what we see in Q2. SMB has been impacted by the current macroenvironment, which reflects on our cloud revenues, but our enterprise cloud remains strong. We expect the second half of the fiscal year to show improvement.

Mark Barrenechea, CEO and Chief Technology Officer

This isn't an OpenText challenge; it's a market challenge. We're excited to capture share as the SMB market picks up, but it's important to clarify that we are focused on the midmarket more so than the small business segment.

Operator, Operator

The next question comes from Stephanie Price with CIBC.

Stephanie Price, Analyst

I want to circle back on the focus on achieving organic growth at Micro Focus in fiscal '24. What's the organic growth at Micro Focus this quarter, and how do you expect it to trend over the fiscal year?

Madhu Ranganathan, CFO

Organic growth will be challenging, given our starting point of $2.3 billion of revenue, particularly with divestitures and adjustments to our portfolio. However, we believe we will return Micro Focus to organic growth this fiscal year and exceed the $2.3 billion mark.

Mark Barrenechea, CEO and Chief Technology Officer

We're doing exactly what we said we would do. We are off to a great start with $563 million, and we expect to show positive momentum moving forward. We have a strong product cycle that will help in achieving our goals.

Operator, Operator

The next question comes from Raimo Lenschow with Barclays.

Jeremy Horowitz, Analyst

This is Jeremy, on for Raimo. I want to follow up on the SMB headwind you mentioned earlier. Is it having an outsized impact on any of the business lines, particularly security with Zix and Carbonite?

Mark Barrenechea, CEO and Chief Technology Officer

I would call it a headwind, but a light breeze. There’s nothing specific to point across the portfolio; it's particularly a segment challenge. The SMB market is recovering, and we’ll be well positioned as it improves.

Operator, Operator

The next question comes from Adhir Kadve with Eight Capital.

Adhir Kadve, Analyst

Outside of AI contributing to bookings and driving that 20% growth, are there any other areas across the six markets that are driving confidence in the growth?

Mark Barrenechea, CEO and Chief Technology Officer

Yes, SaaS and AI are our top two drivers. We're seeing success with Titanium across SaaS applications, which plays a significant role in our market demand. The momentum from AI is an additional value unlocker, and we're focused on delivering what customers need.

Adhir Kadve, Analyst

Any specific AI products generating excitement among clients?

Mark Barrenechea, CEO and Chief Technology Officer

The AI personas linked to content management and IT operations generate significant interest. As we build these alongside human roles, we see increased engagement from our customers, and that innovation continues to excite our users.

Operator, Operator

The next question comes from Steve Enders with Citi.

George Michael Kurosawa, Analyst

This is George on for Steve. Can you talk about the decision to monetize AI products when some customers are still in an experimental phase?

Mark Barrenechea, CEO and Chief Technology Officer

Until we have revenue signals, we're maintaining our outlooks. Customer interest is up due to the global focus on AI; we have improved capabilities that add value to their workflows. We're showcasing how AI can significantly enhance our product ecosystems.

George Michael Kurosawa, Analyst

Regarding the expected 20% growth, how much is contributed by Micro Focus adoption of private cloud?

Mark Barrenechea, CEO and Chief Technology Officer

There will be some contribution from Micro Focus, but AI and SaaS remain our primary drivers.

Operator, Operator

The next question comes from Daniel Chan with TD Cowen.

Daniel Chan, Analyst

Regarding the transition of Micro Focus customers to OpenText timelines, should we expect a large number still on Micro Focus's fiscal year-end?

Mark Barrenechea, CEO and Chief Technology Officer

It will take a year or two for complete integration between the two timelines. We're making progress, and our focus will always be on what's best for customers.

Daniel Chan, Analyst

Any updates regarding enterprise customers since last quarter’s positive feedback?

Madhu Ranganathan, CFO

Yes, from enterprise customers, we continue to see strong demand that supports our growth. The entire enterprise side, particularly cloud, is doing well.

Mark Barrenechea, CEO and Chief Technology Officer

Thank you, Madhu and Paul. And thank you, everyone, for joining today. We're excited to engage with you and tell you more about our story and our new growth model. We look forward to connecting with you at many upcoming conferences as outlined by Harry. Thank you.

Operator, Operator

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.