Progress Software Corporation (NASDAQ:PRGS) reported robust financial outcomes for the third quarter of 2024, surpassing guidance and demonstrating a strong growth trajectory. The company announced revenue of $179 million, marking a 2% increase year-over-year, and earnings per share (EPS) of $1.26, reflecting a significant 17% growth from the previous year. The acquisition of ShareFile from Cloud Software Group for $875 million is set to enhance Progress's product offerings and is expected to close by the end of fiscal 2024.
Key Takeaways
- Progress Software Corporation's Q3 revenue reached $179 million, a 2% increase year-over-year.
- EPS for the quarter was $1.26, up 17% from the previous year.
- The company's Annual Recurring Revenue (ARR) grew to $582 million, a 1% sequential increase.
- A strong net retention rate was maintained at 99%.
- Cash reserves exceeded $230 million, with Days Sales Outstanding (DSO) at 45 days.
- The SEC investigation into the MOVEit vulnerability concluded with no enforcement action.
- Progress is set to acquire ShareFile, enhancing its collaboration offerings, with the deal expected to close by fiscal year-end.
- The company plans to suspend its quarterly cash dividend to prioritize debt repayment and future acquisitions.
Company Outlook
- The ShareFile acquisition is projected to contribute $18 million to $20 million in Q4 revenue, with an operating margin of 15% to 20%.
- Q4 2024 revenue is forecasted to be between $207 million and $217 million, with EPS ranging from $1.15 to $1.25.
- Full-year revenue is expected to be between $745 million and $755 million, with EPS between $4.75 and $4.85.
- Adjusted free cash flow is expected to be negative initially due to the ShareFile acquisition but will become positive by 2025.
Bearish Highlights
- The company's net debt position stands at $577 million.
- The ShareFile acquisition will initially result in a negative adjusted free cash flow of $15 million to $20 million.
Bullish Highlights
- Strong cash flow performance with cash reserves topping $230 million.
- Successful cost management led to a $3 million reduction in total costs and operating expenses.
- The company's robust growth strategy and solid fundamentals point to a positive outlook for 2025 and beyond.
Misses
- There were no specific misses reported in the earnings call.
Q&A Highlights
- CEO Yogesh Gupta expressed confidence in the integration of ShareFile, which is larger than typical acquisitions but manageable due to favorable employee ratios and existing systems.
- The company's sales performance across regions met expectations, with some regions outperforming others.
Progress Software Corporation's Q3 earnings call demonstrated a company in a strong financial position, with strategic moves aimed at enhancing its product portfolio and market reach. The ShareFile acquisition is a significant step in this direction, despite the short-term impact on free cash flow. The company's leadership remains confident in their growth strategy and the ability to maintain a solid operational performance moving forward.
InvestingPro Insights
Progress Software Corporation's (PRGS) latest earnings report has shown promising signs of growth and profitability. With a keen eye on the company's financial health and future prospects, certain metrics from InvestingPro stand out as particularly noteworthy.
InvestingPro Data highlights include a robust Gross Profit Margin of 85.91% for the last twelve months as of Q2 2024, reflecting the company's impressive ability to manage its cost of goods sold and maintain profitability. Additionally, the company's stock is trading near its 52-week high, with a Price % of 52 Week High at 94.73%, signaling strong market confidence in the company's performance and future outlook. The Revenue Growth for the same period stands at 9.36%, indicating a healthy expansion in the company's business activities.
Two InvestingPro Tips that investors may find valuable are the expectation of net income growth this year and the company's impressive gross profit margins. These insights suggest that Progress Software is on a positive trajectory, with a strong foundation for sustained financial performance.
For those interested in a deeper analysis, InvestingPro offers additional tips on Progress Software Corporation, which can be found at https://www.investing.com/pro/PRGS. As of now, there are 10 more InvestingPro Tips available on the platform, providing a comprehensive understanding of the company's financial standing and investment potential.
The InvestingPro metrics and tips provided here are crucial for investors seeking to make informed decisions regarding Progress Software Corporation, especially in light of the company's recent acquisition and its impact on future earnings and cash flow.
Full transcript - Progress Software Corporation (PRGS) Q3 2024:
Operator: Good day and welcome to the Progress Software Corporation Q3 2024 Earnings Call. At this time all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker Mr. Mike Micciche, Senior Vice President, Investor Relations. Please go ahead sir.
Michael Micciche: Okay. Thank you, Shuri. It's always a pleasure to have you with us. Good afternoon, everybody. Thanks for joining us for Progress Software's third quarter 2024 financial results conference call. On the line with me today are Yogesh Gupta, President and CEO; and Anthony Folger, our Chief Financial Officer. Before we get started, let's go over our Safe Harbor statement. During this call, we will discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives, our proposed acquisition of ShareFile, which we announced on September 9th, and other information that might be considered forward-looking. Such forward-looking information represents Progress Software's outlook and guidance only as of today and is subject to risks and uncertainties. For a description of the risk factors that may affect our results, please refer to the risk factors in our filings with the Securities and Exchange Commission. Progress Software assumes no obligation to update the forward-looking statements included in this call. Additionally, please note that all the financial figures referenced on this call are non-GAAP measures, unless otherwise indicated, you can find a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP figures in our financial results press release, which was issued after the market closed today. This document contains additional information related to our financial results for the third quarter of fiscal year 2024 and I recommend that you reference it for specific details. We also have prepared a presentation that contains supplemental data for our third quarter 2024 results, provides highlights and additional financial metrics. Both the earnings release and the supplemental presentation, along with a copy of our press release and the supplemental slide presentation announcing the ShareFile acquisition on September 9th, 2024 are all available in the Investor Relations section of our website at investors.progress.com. Today's call will be recorded in its entirety and should be available for replay on the Investor Relations section of our website shortly after we finish. With that let me turn it over to Yogesh.
Yogesh Gupta: Thank you, Mike. Good afternoon, everyone, and thank you for joining us as we share the results of our third fiscal quarter. The last few months have been busy and exciting and I'm glad to be here this afternoon to talk about all the great things happening here at Progress right now. To begin with, let's talk about the third quarter which was ahead of the high end of our guidance on both the top and bottom lines. Revenue grew by 2% year-over-year to $179 million and EPS grew 17% year-over-year, reflecting continued expense management. We ended the quarter with $582 million in ARR, up sequentially 1% and net retention rate held steady at 99% as some churn from late last year, which we have previously discussed, works through the trailing 12-month calculation. We generated excellent cash flows with DSOs at 45 days and our balance sheet remained healthy and strong, ending the quarter with over $230 million in cash. So on just about every metric, we had a strong quarter. I'm very pleased with our Q3 results and Anthony will provide more details on the financial metrics and dynamics in his remarks. And another important news during the third quarter, the SEC notified us that it has concluded its investigation into the MOVEit vulnerability with no enforcement action recommended. This news from the SEC in August was in addition to clearance decisions by data privacy regulators in the UK, Australia and Spain over the past year. We view all these decisions as positive indicators of how we've handled the MOVEit vulnerability from our rapid initial response and reporting transparency to our foresight cooperation with all regulatory inquiries and investigation. The third piece of exciting news which we announced two weeks ago is our signing of the agreement to acquire ShareFile, which is the latest step in our total growth strategy and our largest acquisition yet. We intend to make an all-cash purchase of ShareFile for $875 million and expect to close the transaction before the end of fiscal 2024 subject to regulatory approvals and customary closing conditions. Immediately after closing, we will begin the integration process and we look forward to welcoming the ShareFile team to Progress. We expect full integration to be completed within 12 months. I'm really excited about this acquisition and let me share some of the reasons why. ShareFile, which we're acquiring from the Cloud Software Group is a leading provider of collaboration software for document-centric use cases. It is a modern SaaS native platform with AI-powered document-centric collaboration and automated workflows, client portals, secure file sync and share and e-signature capabilities. Any company whose business workflows are document-centric and compliance heavy, where several internal and external parties collaborate on documents and require various levels of editing and approval through a secure auditable solution can benefit from using ShareFile. This is why ShareFile will complement and fit in perfectly with our existing digital experience offerings and will enable us to offer greater value to users. ShareFile's 86,000 strong customer base is large and loyal and spans industries such as accounting, financial and legal services, healthcare, construction and real estate. 100% of its revenue is recurring with a net retention rate of over 100%. Integration with our existing digital experience sales, go-to-market, engineering, support and operating infrastructure will provide us a clear path to our operating margin target for the acquired business of 40%. When the deal closes, we expect ShareFile to add over $240 million in both annual revenue and ARR, which will bring our total annual revenue to nearly $1 billion and our ARR to well over $800 million. In terms of financing deal, we will use a combination of cash on hand and our existing revolving credit facility. We expect pro forma net leverage to be around 3.6 at the time of closing and we intend to delever quickly as we have with our prior acquisitions. Speaking of delevering, let me spend a few minutes on why we also announced our intention to suspend our quarterly cash dividend once the deal closes. This decision was made with significant deliberations as part of our total growth strategy. So it's worth examining our commitment to executing our plan in a little more detail. Our goal with the total growth strategy is to make Progress more valuable while making us stronger and larger. Our goal is to provide more value to our customers and create more value for our shareholders. I'm extremely enthusiastic and passionate about our technology and our products and how they help our customers succeed and thrive in this ever-changing technology-driven world. Our fanatical focus on customer success is one of the three key pillars of our strategy, as is our commitment to investing in and innovating our products to grow and adapt to the needs of our customers. Updating and modernizing our offerings is essential for the continued success of our customers and for retaining them well into the future. This strong foundation of great technology and sustained customer success are the bedrock of our business and the reason why all products generate significant free cash flow. And that free cash flow, in turn, needs to be guided by a prudent capital allocation policy to continue driving the success of our total growth strategy. We've always placed the highest priority on M&A, followed by share buybacks. So our game plan for growing shareholder value is simple. First, achieve greater revenues, earnings and cash flows by acquiring highly accretive businesses with characteristics similar to ours, businesses with excellent products and loyal customer bases. Second, pay the right price, integrate them quickly and efficiently, while focusing on customer success and retention. And finally, aggressively reduce leverage to prime our liquidity for the next deal. In the meantime, we minimize dilution and return capital to shareholders in the form of well-timed buybacks. When it comes to executing on M&A, we will continue to remain disciplined and patient as we search for new opportunities and then act decisively. Oftentimes, as you've seen, acting decisively means walking away from a potential acquisition that we don't think will work. We are far more willing to say no than yes when it comes to finding the right fit and paying the right price. And we're very comfortable walking away because in the absence of an acquisition, we focus on continuously improving our processes and systems. We put great effort into upgrading and optimizing our internal technology and business practices to continue to make us more integration ready and efficient. And of course, we're always trying to incorporate the lessons learned from any mistakes we make. Just as important, we keep Progress a great place to work for our employees. Our voluntary turnover remains well below that of the overall software industry and has hovered around 6% over the past two years. Keeping a talented, stable workforce is essential to the effective execution of our total growth strategy from innovation and customer success to acquisition and integration. Our front office and back office teams all get better with each deal and its subsequent integration. I feel proud of how we have continued to mature and grow our ability to execute on our strategy and create more value for our customers, our shareholders and of course, our employees. So to wrap up, the third quarter was excellent on several fronts. We had another great performance on the top and bottom line. We received more good news about MOVEit and we are getting ready to close on a meaningful acquisition that will provide us recurring revenues at scale. As always, I want to acknowledge all the people on the Progress team who worked hard to produce these great results. Their work is extraordinary and I'm grateful for their talent, dedication and desire to succeed. Now let me turn it over to Anthony to provide more financial detail around our third quarter. Anthony?
Anthony Folger: Great. Thanks, Yogesh, and good afternoon, everyone. Thanks for joining our call. As Yogesh mentioned, we're very pleased with our third quarter results, which once again exceeded the high end of our previously issued guidance ranges. We're also thrilled that on September 9th, we announced the signing of a definitive agreement to acquire ShareFile from Cloud Software Group. I'll talk more about ShareFile and the acquisition in a bit. But first let's get into the numbers. Starting with ARR, which came in at $582 million and represented slight growth on a year-over-year basis and approximately 1% sequential growth over the second quarter. Although no single product drove material growth in our total ARR, the increase that we delivered was the result of modest growth in multiple products across our portfolio including OpenEdge, DevTools, Sitefinity, Loadmaster, Flowmon and MOVEit. We also had another strong quarter for net retention with our Q3 rates coming in at 99%. In addition to our solid ARR performance in the quarter, quarterly revenue of $179 million slightly exceeded the high end of the Q3 guidance range we provided in June and represents approximately 2% year-over-year growth. Our strong revenue performance in the quarter was driven by stronger-than-expected demand for multiple products in our portfolio, including OpenEdge. Turning now to expenses. Our total costs and operating expenses were $105 million for the quarter, a decrease of $3 million compared to Q3 of last year. This year-over-year decrease was driven by two factors. First is tight cost management across the business as our teams again executed well during the quarter. Second is the timing of certain expenses between the third and fourth quarters. Operating income for the quarter was $74 million, an increase of $6 million compared to the same quarter last year with an operating margin of 41%, up 200 basis points year-over-year. Earnings per share for the quarter were $1.26, $0.11 above the high end of our guidance range and compared to the prior year, earnings per share were up $0.18 or 17%, with the increase being comprised of an improved operating margin and lower interest coupled with higher interest income for the quarter, both resulting from the convertible notes issuance and credit facility refinancing we completed earlier in the year. Moving on to a few balance sheet and cash flow metrics. We ended the quarter with cash, cash equivalents and short-term investments totaling $233 million and debt of $810 million, resulting in a net debt position of $577 million. This represents net leverage of approximately two times using our trailing 12 months adjusted EBITDA. DSO for the quarter was 45 days, down four days compared to the year ago quarter. Deferred revenue was $285 million at the end of the third quarter, down slightly from the second quarter reflecting normal seasonality in our business. Adjusted free cash flow was $58 million for the quarter, an increase of $10 million or 21% from the year ago quarter. In the third quarter, we repurchased $14 million of Progress stock, bringing our year-to-date total to $87 million. And at the end of Q3, we have $107 million remaining under our current share repurchase authorization. On September 9th, in conjunction with the ShareFile announcement, we also announced our intent to suspend our quarterly cash dividend upon closing the ShareFile acquisition. We believe we can generate higher returns on capital through M&A as part of our total growth strategy and will therefore prioritize debt repayment to free up capacity for future M&A. We expect that we will continue to repurchase shares to offset dilution from our equity plans and on occasion repurchase shares opportunistically. Now let's discuss our outlook, starting with ShareFile. We expect ShareFile to contribute approximately one month of results to our fiscal fourth quarter with revenue of $18 million to $20 million, an operating margin of 15% to 20% and negative adjusted free cash flow of approximately $15 million to $20 million. I'd like to emphasize that the negative cash flow is due to the proposed deal structure of the ShareFile acquisition. The acquisition is structured as an asset purchase and ShareFile's accounts receivable at the time of closing are not included in the assets that are being acquired. To compensate for this structural point, Progress will receive a $25 million working capital adjustment, which will net against the $875 million purchase price at close. After our first billing cycle with ShareFile, we will begin generating cash inflows and expect ShareFile's adjusted free cash flow to be increasingly positive throughout 2025. With that context for ShareFile in mind, for the fourth quarter of 2024, we expect revenue between $207 million and $217 million and earnings per share of between $1.15 and $1.25. For the full year 2024, we expect revenue to be between $745 million and $755 million and operating margin for the year of approximately 39%. Free cash flow between $195 million and $205 million. This includes the negative contribution from ShareFile and earnings per share between $4.75 and $4.85. Our guidance for full year EPS assumes a tax rate of approximately 19% and approximately 44 million shares outstanding. In closing, we're really excited to deliver another strong quarter of results and we're thrilled with the announced ShareFile acquisition, both of which position us very well for 2025 and beyond. With that, Shuri, I'd like to open the call for Q&A.
Operator: Thank you. [Operator Instructions] And our first question will come from the line of John DiFucci with Guggenheim. Your line is open.
John DiFucci: Thank you for taking my questions. First one, I think, a question for Anthony. And then I'd like to ask a follow-up to Yogesh. So, Anthony, really nice cash flow in the quarter and you reduced the annual guidance by $10 million even though ShareFile impact, it was negative $15 million to $20 million. So I just want to make sure my math is right, it's easy math, but that implies excluding ShareFile effect, you would have raised it $5 million to $10 million, the cash flow guidance, and I just want to make sure is that correct? And then I know you've talked about this, I mean, you're talking about profit and getting things up to normal levels. But and you've proven yourself in M&A, Progress has, your team has done that. But can you go through some of the detail of why you're confident in bringing ShareFile profit metrics and I'm really focused with free cash flow to your level to your normalized level over the next 12 months. The reason I ask on this one, I know you said you're going to do that and you have done in the past. But this is a big one right? And it's a little different regarding the core customer base relative to a lot of your other acquisitions? Sorry for the long winded question.
Anthony Folger: No, that's great, John. Thank you. And you're correct. The first question about free cash flow, yes, there's an implied increase to our cash flow guide for the year that gets netted down by the ShareFile impact in Q4. So your math there is correct. When it comes to our confidence in the ShareFile integration, you're right. It's a larger acquisition, but as our business has grown, ShareFile is about a third of our revenue. And so it's really not that far out of what we would normally target. It feels like it's manageable to us. The business already is profitable. It's running, let's say, between 15% and 20% operating margins. And they already have, you know, one of the things that was attractive to us is it's a cloud platform operating at scale. They've had gross margins better than 80% at least in terms of the diligence we were able to dig into. And all of those things, I think having already an ability to operate cloud infrastructure at scale like that to do it as a solid gross margin. And the fact that this is an asset deal and it's really a carve-out from Cloud Software Group. We have a sizable DX business already, a digital experience business. I think there's a lot of resources that we will bring to bear. I think our DX business is used to a transactional type of heavy volume business. So there's an element within Progress that ShareFile looks very familiar to. And I think bringing it over with really strong gross margins and very good net retention rates gives us a lot of confidence that we're going to be able to drive margins where we would expect to in our model and to maintain similar cash flow conversion metrics in this business.
John DiFucci: Okay. Thank you. And then, Yogesh, to that point about the digital experience business you have, ShareFile, a lot of exposure to the SMB, the similar customer base here, right? But we're starting to see at least indications of in the market a bit of a rollover. The SMB has been really strong, right? And I just starting to see a little bit of weakness out of that cohort in the market. Can you comment on your thoughts regarding this and your recent experience regarding your businesses that do sell into sort of an SMB customer base.
Yogesh Gupta: Happy to, John. So in our Digital Experience business, right, we also have a very, very large number of customers. I mean I think it's quite often not well known that we have more than 20,000 customers in our Digital Experience business ourselves. It also is a high velocity small repeatable deals business. We continue to see strength there. We continue to see the business doing well. John, from our perspective, business has been solid is the way I would characterize it. I know that some folks were seeing really, really meaningful upside with the SMB side. We saw just a steady solid business and we are not seeing changes there in what we do. The ShareFile business is a very interesting one, right? It targets really a business user that is using it for the core part of their business, which is collaborating with their clients and making sure that their business functions, right. If you're an accountant, if you're a lawyer, if you're a doctor, if you are a, any of the business services people that use this, they are using it to exchange mission-critical from their perspective, business critical information in a secure reliable way, do workflow on it, make sure that multiple people can work on it in a secure way, make sure that there is versioning and ability to audit and track who did what. And many of these industries are highly regulated. So it is a very stable business. The business has had a track record of stability, right. So we know that from looking at what has been shared with us. So we feel good. It isn't just that suddenly the business was doing well over the last couple of years, so we thought it was a good time to buy, John. So that's that. I also want to sort of add a little bit to Anthony's earlier comment about operating margins. One additional point to share, when you have a business, the scale that this is, which is really nice, if you think about it, right, the R&D expense doesn't linearly grow with scale, right. If I had instead of 86 -- if ShareFile had instead of 86,000 customers, they had 75,000 customers or 60,000 customers, they would still have to do the same R&D, right. So often as you scale up beyond a certain level, the R&D costs don't go up linearly. So that's one of the reasons why we actually feel really good about our ability to and that's just one example. But I think the scale gives you added benefit. The only other single product we have at Progress that is of similar scale is OpenEdge, right. And so obviously this is a cloud offering. Obviously, this is an offering in which we need to continue to invest quite aggressively to stay competitive. So the gross margins aren't the same as an on-prem product, but we are extremely comfortable with the fact that we see line of sight to that 40% operating margin target.
John DiFucci: Well, you guys have done it every time. So thanks for all this. Thanks.
Yogesh Gupta: Thank you, John. Thank you.
Operator: Thank you. One moment for our next question and that will come from the line of Lucky Schreiner with D.A. Davidson. Your line is open.
Lucky Schreiner: Hi. Awesome. Thanks for taking my question. I know you guys probably don't like this question. But since you mentioned ShareFile and MOVEit, sorry, MOVEit have similar customer base as some of them both use the products. Is there a cross-sell opportunity here that you see? Any color there would be helpful.
Yogesh Gupta: So there are some common customers of MOVEit and ShareFile, Lucky, from our perspective, whenever we do these transactions and look at these acquisitions. Our business model is all done based on assuming no cross-sell because we believe that cross-sell is often much, much harder than it looks on the surface. We will see what happens over time. And if, obviously, if there is an opportunity and if we do see some traction, we will share with you transparently. But our plan at least at this point does not contemplate any cross-sell. And it just makes it for a, to be honest, a more conservative realistic plan so that we get to the targets we need to get to the way we want to.
Lucky Schreiner: Yes. I appreciate that. That makes sense. Maybe then on any additional color you can give on the average contract length for ShareFile and maybe what the renewal process will look like here in the future?
Yogesh Gupta: Sorry, your line was a little scratchy. Were you asking about average contract size?
Lucky Schreiner: Average contract length, the duration of the contract for ShareFile and how renewals might trend here in the future?
Yogesh Gupta: Yes. So they have, you know, so they do both. The vast majority of them are annual. And Anthony please correct if I'm wrong. They also have credit card-based auto renewals of their contracts. Some of their billings are annual, some of their billings are monthly I believe.
Anthony Folger: That's right.
Yogesh Gupta: So it is a mix, Lucky, as to the contract length as well as the billing cycle. But nothing is multiyear build upfront. So it is either built or maybe de minimus.
Lucky Schreiner: Got it.
Yogesh Gupta: Yes. Okay. So de minimus is a multiyear build upfront. So there isn't in terms of the kind of lumpiness you see year-over-year for our billings in our other products, you won't see that here.
Lucky Schreiner: Yes. Perfect. Appreciate you taking the questions.
Yogesh Gupta: You're welcome, Lucky.
Operator: Thank you. [Operator Instructions] One moment for our next question and that will come from the line of Brent Thill with Jefferies. Your line is open.
Bo Yin: Hey, guys. This is Bo on for Brent. Thanks for taking the question. You guys typically you know you guys have acquired businesses in the 15% to 25% of your rev base like that range. But clearly ShareFile was much bigger. And so what gives you the confidence in your ability to integrate that deal in the same timeframe as previous smaller acquisitions? And should we be looking at this as an indicator that perhaps going forward the M&A pool could be beyond that 25% range? Thanks.
Yogesh Gupta: Yes. So, Bo, good question. So first of all, right, you are correct that we've historically done deals that are being 15% to 25% of our size and revenue that is our sweet spot. But we've also said, you know, if the right opportunity comes along, we might go a little smaller, we might go a little bit bigger. As you know it wasn't that long ago that we were looking at a business that was not even quite 10% of our size, right, which became public because of the way Irish stuff works. But so really, from our perspective, being about a third of our revenue is not that far off. The integration challenge is really not on revenue, right. When you think about it, the integration challenges around people, it's around systems, it is around processes. That's fundamentally what is the challenge. And when it comes to scale, the biggest scale challenge can be people. So one of the things that we always look for is what is the headcount ratio between our company and the acquired business because if that is, as I like to say, it's four of us, and we're bringing in one new for every four we have, which is what approximately this is the ratio between ShareFile employees and Progress employees, it's about four of us to one of ShareFile. That makes it easier to sustain our culture, that makes it easier for the people to be brought on board and integrated into our organization. It allows for much easier go-forward success. And that's why we feel that bringing in 25% additional folks in our organization is really very doable. So, Bo, integration effort or integration complexity, people are probably the single biggest, always the single biggest thing to watch for. And we're really excited about bringing in the ShareFile people. The people we have met have been all delightfully wonderful and I can't wait to welcome them and to welcome the ShareFile customers into the Progress family.
Bo Yin: Thanks for that. And maybe a quick one on international. It looks like EMEA was a little softer this quarter and you had some outperformance in Asia Pacific. Just anything to call out there in terms of productivity levels from sales reps between the different regions?
Anthony Folger: No, I don't think so, Bo. I think it was probably generally in line with what we expected. I don't think anything unusual to speak of.
Bo Yin: Great. Thank you.
Operator: Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Yogesh Gupta for any closing remarks.
Yogesh Gupta: Thank you, Shuri. Thank you, everyone, for joining us for this call. We're excited about what lies ahead and we look forward to speaking with you soon. Thank you very much and have a wonderful evening.
Operator: This concludes today's program. Thank you all for participating. You may now disconnect.
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