Progress Software Corp (PRGS) Q1 2020 Earnings Call Transcript

Good day, ladies and gentlemen. And welcome to the Progress Software Corporation Q1 2020 Investor Relations Call. At this time, I'd like to turn the conference over to Brian Flanagan. Please go ahead, sir.

Thank you, Keith. Good afternoon, everyone, and thanks for joining us for Progress Software's fiscal first quarter 2020 earnings call. With me today is Yogesh Gupta, President and Chief Executive Officer; and Anthony Folger, our Chief Financial Officer. Before we get started, I'd like to remind you that during this call, we will discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives, the impact of the COVID-19 crisis on our business, and other information that might be considered forward-looking. This forward-looking information represents Progress Software's outlook and guidance only as of today and is subject to risks and uncertainties. Please review our Safe Harbor statement regarding this information, which is available in today's earnings release as well as in the Investor Relations section of our website at progress.com. Progress Software assumes no obligation to update the forward-looking statements included in this call, whether as a result of new developments or otherwise. Additionally, on this call, the revenue, operating margin, diluted earnings per share, and adjusted free cash flow amounts we refer to are on a non-GAAP basis. You can find a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP numbers in our earnings release issued today. Today, we published our financial press release on our website. This document contains the full details of our financial results for the fiscal first quarter 2020, and I recommend you reference it for specific details. Today's conference call will be recorded in its entirety and will be available via replay on our website in the Investor Relations section. With that, I'll now turn it over to Yogesh.

Thank you, Brian. Good afternoon, everyone, and thank you for attending our first quarter earnings call. Let me start off by saying a few words about the impact of the COVID-19 coronavirus. The global spread of this virus has created a health crisis that has disrupted the lives of billions of people, and what's more, the situation continues to evolve daily. In response to this public health crisis, our priorities are clear. Number one, we have a responsibility to keep our employees healthy and safe. Number two, we must continue to provide the products and services our customers and partners need and rely upon. And last but not least, we must do our part in preventing the spread of the virus in the communities where we live and work. The macroeconomic impact of the virus has been widely discussed, but is still largely unknown. For Progress, we did not see any specific impact on our business in Q1. And the feedback from recent customer and partner conversations leaves us cautiously optimistic that we are well positioned to weather this potential impact in Q2 and beyond. However, given the current level of global uncertainty, it would be shortsighted to expect that we're completely immune. And this is reflected in our updated 2020 expectations for revenue, EPS, and free cash flow. Anthony will provide more details on these revised expectations, which also include a significant negative FX impact due to the recent strengthening of the U.S. dollar. That said, I remain bullish on our long-term strategy and prospects for delivering meaningful shareholder value. Turning to our Q1 results. As you've seen in this afternoon’s press release, we delivered a strong first quarter with year-over-year revenue growth of 27% and year-over-year growth in earnings per share of more than 50%, both ahead of our internal plans and above the high end of the guidance ranges we previously provided. These results were driven by strength in our business across the board in virtually all product lines. Highlights included a six-figure new customer win for our Ipswitch MOVEit product, as well as our largest Sitefinity cloud deal ever, which was a six-figure subscription booked with a large university. Our Q1 results reflect not only the success of the Ipswitch acquisition, but also our efforts to standardize our processes and improve operational execution across our business. One area where we’ve continued to drive improvements and execution is in our indirect sales channels. Those of you who have followed us for some time know that one of our key strengths over our 35 plus year history has been our channel partner relationships, including ISVs that build their applications on top of OpenEdge, the OEMs that embed DCI into their products, and now the resellers and distributors that sell our Ipswitch products. To maintain and augment that strength, we recently launched Progress Accelerate, a global program to provide channel partners with the tools they need to accelerate their growth and customer success. This branded program centralizes and expands all of our successful channel partner initiatives into one offering, providing training and enablement, a dedicated account manager, joint marketing planning and support, and incentive programs. We're already seeing tangible benefits from these initiatives. For example, we have improved Ipswitch’s sales execution by leveraging our common sales processes, programs, and resources. This is part of the reason why the Ipswitch products have continued to perform better than our original business case. By providing a better experience for all of our channel partners, we make it easier for them to maximize the value of their relationships with Progress. This helps keep them competitive and drives better retention and continued stability in our recurring revenue stream. Along with our continued product investments, it’s programs like this that keep our business healthy. For OpenEdge, that means maintaining our maintenance renewal rates at well over 90% and ensuring that our 1,700 plus ISV partners continue to win new customers and grow their SaaS revenues. For DCI, it means remaining the undisputed leader in the premium data access market and the choice of nine of the top 10 BI analytics vendors for their data connectivity, with best-in-class security, scalability, and support. And for our Dev Tools products, that means continuing to help our 2 million plus developers build better, more engaging web and mobile applications in less time. Overall, our goal is to build an increasingly stronger business, and our success in Q1 reflects those ongoing efforts. Now, I'd like to provide more color on the impact to our business of the COVID-19 virus. Like many other companies, we have taken aggressive steps in response to the incredible disruption caused by this pandemic. From the outset, our management team has been meeting daily to assess the rapidly changing situation, decide on our courses of action, and provide the most up-to-date information to our employees and customers. Substantially, all of our workforce has been working from home for weeks now, as we have leveraged our distributed infrastructure and systems. We've also eliminated all travel and replaced in-person events and meetings with virtual gatherings where possible, using modern communication methods to maintain business continuity. We are pleased with how our business has responded to this disruption and the flexibility and dedication demonstrated by our employees. Our global teams are already adept at virtual collaboration across our geographies and have continued to remotely provide the high level of support that our customers and partners are asking for. Our product organization continues to work diligently on features and enhancements across our product portfolio and have brought up roadmaps and release spans that are on schedule. As I’ve said many times, our business is resilient, and we do not have significant exposure to the industry verticals that are likely to be hardest hit by this crisis. Furthermore, our high percentage of recurring revenue and the mission-critical nature of our core software offerings and the applications that they power fuels my optimism that we will be able to deliver solid results despite the uncertainty. We will continue to monitor the macroeconomic environment and our customer and partner ecosystem as the situation unfolds. And we remain confident in the long-term opportunity ahead of us. Thinking of the long-term opportunity, let's now turn to a discussion on that. As you know, our strategic focus moving forward is to complement our stable businesses with accretive M&A in the infrastructure software space, with a goal of doubling the size of our business in five years. While our target is to complete one or two acquisitions per year, we remain disciplined in our approach. We target businesses that are not only complementary to our business in terms of product, audience, and growth profile, but also meet our financial criteria, which include: one, high levels of recurring revenue; two, operating margins after synergies consistent with our margin structure; and most importantly, generate a return on our investment that is above our weighted average cost of capital. M&A in this space represents a huge market opportunity and one that Progress is uniquely suited to address. As one data point, venture capital funds have invested more than $50 billion in over 10,000 infrastructure software companies over the last decade. Of course, many of these never become viable businesses. Those that remain are often too small to scale, but many have stable, sticky customer bases and high levels of recurring revenue, making them perfect candidates for our strategy. From a pipeline breadth perspective, we have been reviewing approximately 50 deals per quarter, and Q1 was no exception. Many of these companies are in the $40 million to $80 million revenue range, the ideal size for us, but in many cases too small for other strategic or P/E buyers to pursue. The available pool of targets is large enough to support our acquisition strategy for many years, making this a viable path for delivering long-term value. The opportunity exists, so let's now talk about how we are well positioned to take advantage of it. When we look at our revenue, more than 70% is recurring in nature. And as we've discussed previously, our retention rates are consistently well above 90%. Coupled with our efficient operating model, this translates into very durable predictable top-line, best-in-class operating margin for enterprise software, and very efficient free cash flow conversion. With net leverage of 0.6x and $225 million available within our current credit facility, we have the financial capacity to execute on our strategy. We're also well positioned from an operational perspective. We have real expertise with a recurring revenue model, where customer retention is key to long-term success. And we can leverage our own operational and back office infrastructure to achieve meaningful cost synergies. Our success in sourcing, executing, and integrating Ipswitch is a testament to our ability to execute this strategy. And we’re further strengthening our capabilities in this area by adding resources for both identifying and integrating future M&A opportunities. Not surprisingly, macroeconomic conditions are impacting M&A globally. And while they may create a headwind for deal timing, they could also create a tailwind for valuations. Our strong liquidity and debt capacity position us well in the coming months. As always, we remain disciplined in our approach. So, in closing, our business is healthy and we had a very strong Q1, sustaining the momentum we achieved during 2019. We will continue to monitor the external environment and remain very confident that our business is durable and diverse enough to provide a solid performance, even in this period of market uncertainty. The guidance changes that Anthony will discuss are the direct result of that uncertainty and do not reflect any wavering confidence in the health of our core business. Lastly, we are well positioned both financially and operationally to execute on our target and M&A strategy, driving real shareholder value through accretive acquisitions in the infrastructure software space. As you know, Anthony Folger joined us as CFO in January, and I'd like to turn the call over to him now to review our Q1 performance and outlook for Q2 and full year 2020. Anthony?

Thanks, Yogesh. Thanks, Brian. Good afternoon, everyone, and thanks for joining us. I'd like to start by saying that I'm thrilled to be joining the Progress team at such an important time for the company. Progress has embarked on an exciting evolution, shifting focus to improved M&A in order to drive growth and scale. I'm confident in this team's ability to successfully execute and capture the market opportunity that Yogesh described earlier. I look forward to speaking with Progress' investor community personally in the coming quarters, and I'm certain we’ll share more levels of excitement about the opportunity in front of us. Turning now to our first quarter results. Total revenue was $113.8 million, well above the high end of the guidance range we provided back in January. This overperformance was driven by higher than anticipated revenue from our DCI, MOVEit, and Sitefinity products. We continue to be pleased with the performance of Ipswitch, with Q1 revenues from our Ipswitch products slightly ahead of our expectations. We also saw stability in our OpenEdge partner channel with another solid quarter of SaaS-related billings from our ISVs, who have deployed their applications in the cloud. In addition, maintenance renewal rates for both our ISV partners and direct customers continued to be strong, coming in at well over 90% again this quarter. On a year-over-year basis, total revenue increased 27%, driven by the acquisition of Ipswitch and the timing of DCI contract renewals with certain OEM partners. The year-over-year impact of exchange rates on our first quarter revenue was negative $700,000, generally in line with our expectations. I'd like to take a moment now to discuss how the timing of DCI contract renewals with certain OEM partners impacts our top-line. As we've mentioned on previous calls, ASC 606 generally requires immediate revenue recognition of our multi-year term license agreements with certain OEM partners who embed our DCI product into their solutions. As a result, our revenues can fluctuate materially depending on when these contracts renew. This timing was a benefit for us in 2019 and again in the first quarter of 2020. For the full year 2020, however, we expect the DCI revenue will decrease when compared to 2019, driven by fewer scheduled renewals during 2020. This obviously makes year-over-year comparisons for DCI more challenging, and it's the reason why we believe annual contract value remains the most effective way to evaluate our DCI business. We continue to expect ACV to be $32 million to $33 million for 2020, consistent with our actual performance in 2019. Turning now to expenses, our total costs and operating expenses for the quarter were $65.8 million, up 11% compared to the prior year quarter. This year-over-year increase is driven by the acquisition of Ipswitch, partially offset by lower expenses in the rest of our business, where we continue to operate more efficiently. Operating income was $48 million, up $17.7 million or 59%, compared to Q1 2019. Our operating margin was 42%, an increase of 800 basis points on a year-over-year basis. On the bottom line, earnings per share of $0.76 for the quarter represents growth of 52% year-over-year, and is $0.05 above the high end of our guidance range. This overperformance on the bottom line compared to guidance is driven by our top-line performance, coupled with lower salary and benefit costs resulting from slower than anticipated hiring. Moving on now to a few balance sheet and cash flow metrics. We ended the quarter with cash, cash equivalents, and short-term investments of $177 million and debt of $295 million. DSO for the quarter was 49 days, an improvement of 7 days both sequentially and when compared to Q1 of last year. Deferred revenue was $181 million at the end of the first quarter, up $39 million compared to Q1 of 2019, due primarily to the addition of Ipswitch deferred revenue balances. Adjusted free cash flow was $33 million for the quarter, up almost $9 million or 37% from $24 million we achieved in Q1 of last year. This growth in free cash flow was driven by the acquisition of Ipswitch, our lower DSO, and the previously mentioned improvements to operating leverage in our business. During the first quarter, we repurchased 425,000 shares of Progress stock at a total cost of $20 million. And at the end of the quarter, we had $230 million remaining under our current share repurchase authorization. I would now like to turn to our outlook for Q2 and the full year 2020. First, let me state that thus far, we are not experiencing any meaningful disruption across our sales channels due to the COVID-19 crisis. However, we recognize the reality of a much more challenging economic environment in the coming weeks and months and felt it was necessary to incorporate some of these potential challenges into our outlook despite the uncertainty. When we assess our business and how it could be impacted by the slowdown in activity that’s occurring globally, it's important to highlight some of the characteristics that have made Progress’ business so durable. Specifically, our products, our mission-critical applications, across a variety of industries and the cost, effort, and time required to replace our solutions would be prohibitive in most cases. Over 70% of our revenue is recurring, and our retention rates have consistently been well over 90%. All of our technical and professional services can be delivered remotely without disruption. That's not to say our business is immune to a global economic slowdown. In developing our current outlook, we assumed that a meaningful slowdown in the demand environment will negatively impact our ability to acquire new customers and expand existing customer installations, and the timing of certain maintenance contract renewals and customer collections. Despite the potential negative impacts, we have maintained our prior outlook for operating margin, largely due to the operating efficiencies we realized in the first quarter and the changes in how we are conducting business during the COVID-19 crisis, which Yogesh previously mentioned. It's also important to note that we transact in multiple currencies. So in addition to the slowdown in economic activity resulting from the COVID-19 crisis, we also expect our business to be negatively impacted by the recent significant moves in exchange rates. With that, for the second quarter of 2020, we expect revenue between $95 million and $101 million. This contemplates a $3 million reduction for the COVID-19 crisis, a $2.5 million reduction for the anticipated negative impact of foreign exchange, and a widening of our typical quarterly guidance range to account for greater uncertainty; earnings per share of between $0.60 and $0.64, which includes an anticipated negative impact from foreign exchange of approximately $0.02. For the full year 2020, we expect revenue between $428 million and $438 million. This contemplates a $10 million to $13 million reduction for the COVID-19 crisis, a $7 million reduction for the anticipated negative impact of foreign exchange, and a widening of our guidance range to account for greater uncertainty. As I mentioned, we also expect our operating margin to be approximately 39% consistent with prior guidance; adjusted free cash flow between $125 million and $135 million; the reduction in our outlook being driven by the COVID-19 crisis and recent movements in exchange rates; earnings per share of between $2.73 and $2.80, which includes an anticipated negative impact of foreign exchange of approximately $0.06. Our annual EPS estimate contemplates a tax rate of 21%, approximately 45 million shares outstanding and the impact of $60 million of share repurchases we’re targeting to complete by the end of 2020. To summarize, we're very pleased with our Q1 results and the positive momentum in our business during the quarter. However, we recognize the reality of the COVID-19 crisis and its potential impact on economic activity, and we adjusted our outlook accordingly. In closing, we believe a high level of recurring revenue, coupled with consistently strong retention rates positions us well to weather the economic challenges brought on by the COVID-19 crisis. In addition, the strength of our balance sheet and consistency of our cash flows give us confidence to continue to execute against our strategy of scaling our business through accretive M&A. With that, I'd like to open the call for Q&A, and I ask that you keep your remarks to your primary question and one follow up.

Thank you. We'll take our first question from Steve Koenig at Wedbush. Please go ahead.

Welcome, Anthony. I have a question for you and then a follow-up for Yogesh. Does the $60 million share purchases include Q1? Also, in terms of your guidance regarding the impact of COVID-19, the environment remains quite uncertain, making it challenging to make adjustments. How did you manage the timing of deals and the seasonality for the year? How does that impact year-over-year and what assumptions are you using to arrive at the new guidance?

To answer your first question, the share repurchase of $60 million includes the repurchase activity from Q1, so all in that would be $50 million for the year. And then on the guidance question, yes, you're right. I mean it's a really uncertain environment right now. We went through all the leading indicators that we had in the business and we’re really not seeing much impact. So we basically went product-by-product and we looked at the different revenue streams in terms of where the likely impact would show up from a meaningful slowdown in activity. We looked at new customer acquisition, we looked at expansion, and we looked at maintenance renewal with each of them down, but I would say that the priority order and the magnitude of the impact, because of the size of the maintenance base, there’s probably maintenance number one, and then expansion and new customer acquisition. It was going product-by-product transaction types we have to consider and we have to look at each of our products quarterly, and adjust the existing forecast that we have. Now, there's more art and science unfortunately to how we're putting the outlook together right now just due to evolving uncertainty, but one thing is for sure that the economic activity is slowing down. It's a global issue. We expect our business to be impacted. I think this is our best view into that right now.

I will leave that question there and then move on to Yogesh. Any commentary on how does the current environment impact your ability to get deals done, whether it's availability of deals, whether it's their willingness to sell to you, whether it's valuations and/or ability to execute on the transaction? How do those factors roll in when you're thinking about getting the M&A, speaking of M&A on track with the plan?

From an operational standpoint, we are in good shape. Most of our marketing efforts are digital and conducted virtually. A significant portion of our conversations happens online, and our new license sales, particularly with products like Sitefinity and Ipswitch, primarily occur through online engagement, as these products are priced competitively. Therefore, we believe our ability to execute transactions remains intact. However, we are facing challenges due to customers not being able to transact because their businesses are affected. This has led to delays in their decision-making processes and in their ability to collect payments. From our perspective, the more pronounced impact comes from the demand side. Delays in decision-making may lead customers to postpone actions for two to six months. Additionally, the uncertainty surrounding timing is a challenge; while we hope the disruption will be short-lived, we also recognize it could extend longer. Despite this uncertainty, we are confident in our ability to execute deals, connect with customers, and move forward.

And Yogesh, how do you prepare a deal? By the way, that’s very helpful color on your execution. I'm also wondering about your ability to conduct M&A in this environment and the availability of targets that sell themselves to you, any color on that?

Yes, regarding M&A, we do not see any significant challenges in executing deals. Our team is strong, and we have the financial capacity to carry out these transactions. We currently have a $100 million unused revolver and a $125 million expansion facility in our existing debt. Additionally, our balance sheet is robust. From a financial standpoint, we face no substantial obstacles. However, conducting due diligence may become slightly more challenging due to travel restrictions. Fortunately, much of the necessary data is shared electronically. Interestingly, current valuations appear to be lower than they were a month ago, presenting opportunities. Some companies that previously felt secure may now recognize difficulties in their business and would be open to discussions with us, making this a favorable time for deal-making.

We'll take our next question for Mark Schappel with Benchmark.

Yogesh, starting with you, given the uncertainty in the marketplace here, why not suspend your guidance as few of the other software vendors have done?

Hey Mark. It's great to speak with you. Thank you for your question. We wanted to provide the level of visibility we have right now. I've always embraced a transparent approach, and I believe it's important to share what we know. We recognize the significant impact from foreign exchange due to the dollar's movement against the euro and the pound. Additionally, we're noticing early signs that some new business may face delays or extend beyond our expected timeframes. On the positive side, our recurring revenue business remains very strong, and we have excellent customer retention. Considering all of this, we believe the potential impact, despite existing uncertainties, is relatively limited. From a revenue perspective, we estimate the impact this year to be between $10 million and $13 million, which translates to about 2% to 3% of our top-line expectations. To us, this reflects our strength in maintaining a stable business. Despite the circumstances, we can still affirm our goal of achieving a 39% operating margin, which is better than last year and significantly improved from two years ago. These factors contributed to our decision to share insights with you and our shareholders about our business outlook.

Great, thank you. And then there is a question here, could you just give us an idea of how you see the professional services business holding up and how the company just plans to manage the business?

Yes, Mark. It’s actually interesting that even before the coronavirus affected business operations, most of our professional services were already being delivered remotely. We had only a small number of people that went on-site anyway. Now, everything is delivered remotely, and we have not experienced any disruptions in our projects. As far as we can tell, there are no delays in ongoing projects either. While some other companies may be facing different circumstances, from our viewpoint and in our professional services business, we are not observing any impact on our projects at this time.

And then finally here on the M&A front with respect to the 50 or so companies that you see each quarter, what percentage of those would you say are marginally profitable or might have some cash issues?

I think it might be around 20% to 30%, possibly a bit higher, perhaps even up to 50%. We observe a wide range of companies, from those that are very profitable and well-managed to those that are significantly burning cash. It's a fascinating environment. I'm not sure if the current economic changes will alter this situation or how companies will adapt, but it seems that there are quite a few that are breaking even or operating at a loss.

We'll take our next question from Anja Soderstrom with Sidoti & Company.

And welcome aboard, Anthony. I'm looking forward to working with you. Regarding M&A, you mentioned that you evaluate 50 companies each quarter. Could you share if there are any companies that you initially passed on, which may now appear more attractive and easier for you to pursue?

I'm sorry, Anja, I'm having a difficult time hearing your question. I understand it was regarding M&A and some companies we are observing, but I really apologize. Could you please repeat it?

Sorry, so there are other companies that you may have been walking away from those companies because that’s too expensive, that might have come down but you already made a lot of due diligence on, so it was easier for you to execute on that in this kind of environment?

I want to ensure I understand your question correctly. You asked if there were companies we previously avoided due to their high costs, and if their valuations have since decreased, making them more appealing now. To address that, throughout this process, there are indeed companies we chose not to pursue. However, I believe it’s still too soon to determine if there’s been a significant change in valuation. I don’t think we can conclude that valuations have decreased just within the last three weeks. Public company valuations are clear, while private company valuations require the sellers to adjust their expectations. We are noticing this shift anecdotally, but I wouldn’t say that the opportunities we passed on are suddenly viable again.

And then also you mentioned hiring in the first quarter was slower than anticipated. Talk a little bit about that and are you still trying to hire in this environment or how is that going to impact?

Yes. In the first quarter, we had an ambitious hiring plan, but it has been challenging to meet our hiring goals due to the competitive nature of locations like Boston and India. While we are still hiring where necessary, we are also carefully assessing our actual needs. We are being cautious, but there hasn't been a significant change in how we operate. We are seeing cost savings from reduced travel and fewer events. Overall, our business continues to run smoothly; we are delivering products on time and supporting our customers worldwide as effectively as we did before. We are actively engaging with our customers in professional services and maintaining our sales and marketing communication just as we were previously. The work remains consistent, and our focus is on effectively running the company, which we will continue to prioritize.

We'll take our next question from Matthew Galinko with National Securities.

We are noticing some positive feedback from companies that lead in secure remote work products, given the current environment. I'm interested to know if there are specific aspects of Ipswitch’s portfolio that are perhaps receiving more interest or sales that could help offset the challenges you anticipate in this environment.

As we've evaluated each product, we recognized that certain products might gain some advantages. IT infrastructure availability and performance management are becoming increasingly essential in today's environment compared to just a month ago. The Whatsup Gold product meets that need. Additionally, secure data transfer is another area that could see benefits. However, there are several challenges to highlight. These products, along with the Dev Tools offerings, rely on new business acquisition, which we anticipate will encounter a slowdown and extended timelines. Furthermore, we are facing approximately $7 million in foreign exchange headwinds on the top line, significantly different from four weeks ago. This perspective leads us to foresee a rather muted impact on our revenue projections due to the market's uncertainty.

Could you elaborate on your capital allocation strategy? You mentioned your target buyback for fiscal 2020, but considering the recent market volatility and the significant decline in your share price, how are you weighing the decision to increase buybacks versus pursuing mergers and acquisitions? How do you view these options opportunistically?

Yes. So, a great question Matt. Obviously, we had our strong cash flow, the opportunity to really allocate our capital in the most shareholder friendly way is what we focus on all the time. Our first priority of course is our dividend, right. We pay approximately 25% of our annual free cash flow to shareholders in the form of dividends, which as you know, in September, we increased by $0.04. The Board reviews that every quarter and so the dividend is of course number one. The second thing from our perspective really is now should we apply the capital towards buybacks versus M&A. The reality is even though share purchases provide a solid low risk return, accretive M&A that meets our disciplined criteria provides a much better return. We look at it from the perspective of what is best for our shareholders, what is the best place to apply capital. We of course have the flexibility to increase or change or suspend our buybacks based on whether or not we're able to do M&A and what we're doing from an M&A perspective. The Board reviews that every quarter. We make sure that we look at the trade-off between possible M&A and buybacks. Again, if we can find the right M&A deals, we believe that, that is even at the current valuations that, that Progress is at, really does offer a much better return for our shareholders.

Ladies and gentlemen, this will conclude today's question-and-answer session. At this time, I would like to turn the conference back to Brian Flanagan for additional remarks.

Great. Thank you all for joining the call today. As a reminder, we plan on releasing financial results for our fiscal second quarter of 2020 on Thursday, June 25, 2020, after the financial markets close, and holding the conference call the same day at 5:00 PM Eastern time. And I'll now turn the call over to Yogesh for his closing remarks.

Hey, thanks, again, Brian. Given this time of uncertainty, we, as a business will always do what we've always done before, which is to continue to provide great products and high levels of support to our longstanding customers and partner base. The company is financially really strong and healthy. While our 2020 results may be impacted by this crisis, we will continue to be focused on the long-term opportunity we have to create value through accretive M&A. I want to thank all of you for joining us today. I look forward to speaking with you again during the next quarter's conference call. Stay safe, everyone.

Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.