74Software (74SW) Earnings Call Transcript

Hello, and thank you for joining us here today. Roland and I would like to share with you the first half 2020 results and also go through some updates on our strategy and other important elements for the first half. Roland and I would wish we would -- we could have been with some of you in person. But given the current events, we are coming to you on this new platform. So as usual, Roland and I will be making some forecasts or going through some various forward-looking items that are subject to risks and uncertainties, especially with the economic risk that could be brought on by the current crisis. So today, we're going to jump to the first half operational situation, and I'll give you a few updates on our strategy. Then Roland will join and go through the customer success organization's first half achievements, then I'll come back and go through the financial results in more detail, and then I'll give you some 2020 targets and our midterm ambitions, and then we'll open it up for Q&A. So with that, let's jump into the operational situation for the first half of 2020. So given the crisis environment we're all operating in, I can't be more pleased about our team's performance to react and respond to the situation they were dealt with. We are able to finish the first half with EUR 136.6 million of revenue where an organic drop of 2% versus the EUR 138 million of revenue in the prior year. This was a very strong performance given the crisis situation and the challenges the team faced. For the first half of 2019, our operating profit from activities was 1.9% or EUR 2.5 million, which was comparable to the same figure for 2019. We had a very strong growth in our subscription revenue at 58.5% growth in the first half or EUR 37 million. And as our customers are continuing to push us, especially during this time to a more subscription-based operating model and engagement, we were able to increase our signatures in our ACV or annual contract value of new contracts by 188%, finishing at EUR 10.2 million in ACV for the first half. This strong ACV growth drove the Signature Metric growth to 26% for the first half of 2020. This was all solid performance during very difficult times. So when I was reflecting a bit back about the first half and how we launched the year, we did some very good things internally. We had a sales kickoff. We had our R&D team meetings and kick off, and we were ready to start the year with the plan. Well, I didn't think I'd ever be quoting Mike Tyson in one of these presentations, but that's what I felt like when I was reflecting on the year. We have a strong plan of revenue growth and margin improvement with all the pieces in place to make this happen. But then we got punched in the face, as well as all of you on the call today, with the current COVID crisis. And so with that, I was very impressed that our team's ability to mobilize and move remotely. We are very concerned with the safety of all our employees and them getting set up in this remote work environment and protecting their family. And once that was secure, which only took a matter of days, we were able to get back engaging with our customers and work with them as they sent their employees remote as well. And so I've been very impressed at our customer engagement during this period. So after everybody started adapting to this new way of working, we had to go through, and we had a strong event-based first half as we usually do, trying to meet our customers and prospects where they're at. And so that usually required a lot of traveling, a lot of in-person events. But once we gave up trying to make those happen and canceled the events, the team quickly found a plan B to make our engagement with our customers and prospects real. And so a good example of that is the graph you see at the bottom of the slide. The red line reflects the 2019 pipeline activity, which is quite standard to prior years as well, where we start the year in January, doing a lot of engagement with the customers and prospects through events like IMAGINE SUMMIT, they love trade shows. They love different events that are in person. We build the pipeline up gradually through May. And then in May and June, we close deals decreasing the pipeline. That was a normal situation. But you see with the purple line, we started January with some of the events and then our APAC region immediately went in locked down. Followed by EMEA and the U.S. and Latin America at the end. During that period, everything cost as the customers' prospects ourselves, we're all trying to figure out what this meant and how to operate. So you see the pause in our pipeline that's very reflective at the end of January through the end of the April, it just was flat. We weren't signing many deals, and we weren't building and engaging new prospects and pipeline activity. But I've been very impressed with the team's ability to change the way they operate and grow in May and June, the pipeline as we come out of the first half. So looking forward, we were in this 3-year transformation plan, which started for me and the team in 2018. We had a lot of work ahead of us to try targeting a leader in the hybrid integration platform market. We had to upgrade our product portfolio, we needed to strengthen across all the employee base, including management and having the employees more engaged in driving along with us the strategy of the company. We needed to implement some business model changes in how we were engaging with our customers, and we needed to increase the awareness so that we could build a sustainable, growing company as we came out of the 3-year transformation. So let me go into a little bit more detail about how we moved along the transformation journey over the 3 years. So we needed to get our product portfolio to a good base level. So at the end of 2018, the second half, we invested heavily in the -- in our different product offerings to allow them to open up and start building out a platform. We did this continuing through to the first half of 2019 as well, spending quite a bit in the R&D activities so that we can continue to connect things like the catalog or flow registration or other elements of the platform to our existing strong products. We were able to pull back a bit in the second half of 2019. And when you look at the first half of 2020, it's a slight drop from the first half of 2019. All of this was planned to get our products to a state where we would have a platform and to -- also, now we're in the period of being able to pull back on these to help return some of the profitability as we don't need that level of investment anymore. So without a good team in place, we'll accomplish nothing. That was obvious to me when I took over as CEO. We had several challenges in front of us through this 3-year transformation. Now I'm glad a lot of it's coming to fruition now. During the period of the crisis, it put all of us in a unique position where we had to interview and hire and even onboard people remotely. And our HR team was successful in making this happen. During this period, we were able to onboard about 140 employees during the first half of the year. And I'm pleased to say 2 of those employees helped me round out the executive team. We had Mark Fairbrother joining to take over as EVP of Research and Development; and Rahim Bhatia joined as EVP of Product Management. You'll notice over the past year, I've elevated 2 roles to the executive level. First, we did the go-to-market activities and put that at the executive level to really try to engage our customers and push our brand messaging out. And now I'm elevating the product management function to the Executive Committee because this will help with a key voice in our executive team on how we need to grow our strategy for the next 3 years. So I'm happy that both of these individuals have joined the executive team. We've also created this first part of 2020 an inside sales team to help engage our customers in new ways. And thankfully, we had started this journey with inside sales in January, and we were fully engaged in recruiting. And as the world moved to remote, we were greatly pleased we started the inside sales team this year. We needed all our employees engaged along the journey to deliver on this strategy. And so I've talked about the employee attrition was quite tough when I took over as CEO, and we've made improvements every period. I'm happy to say that in the first half of 2020, we improved again by 13% the employee attrition to now the first half of 2020, it's at 15% annualized. That's exactly where we had expected to be, and the good work over the years has really paid off. And I want to repeat that at the last part of 2019, we took our employee engagement score, which we improved 18%. And this needed to be in a place so that the employees were engaged in helping drive our strategy. So in conclusion with the teams, I would say we have the right executive leadership to drive us over the next 3 years, and we have the employees engaged in with us to join in the journey. So I'm very pleased with all the work that's been done there. It's been a good effort. Now as I move forward, we're trying to engage the prospects and customers in the market with a lot of messaging, a lot of campaigns, a lot of events this year. And we had a large plan that laid out every event, every seminar, et cetera. All of that got disrupted and changed with the COVID crisis, but the team rallied and delivered some amazing results, which I want to share with you on the screen. We had our Imagine Summit, which, as a reminder, we normally do one in the U.S., one in Europe and then smaller events throughout the world. We had to take that entirely virtual and we were able to get 2,000 registrations, of which 1,100 attendees were customers or prospects. That is a larger attendance than we had last year. And I was very pleased with this first virtual IMAGINE SUMMIT. Additionally, we have a group of catalysts that go out and evangelize and work with our customers to help them achieve their digital goals. They had to stop traveling, stop engaging with the customers in the traditional way and prospects in traditional ways. They moved entirely virtual and started a series of webinars. They did 58 in the first half of 2020 and attracted over 7,000 attendees, which is very impressive for this to ramp up and get 7,000 people engaged in what they have to say. I was very pleased with those results. Additionally, in the first half, you've probably seen a lot of new branding from the company. We've launched a open everything campaign, which you see description there as well as the video to start this presentation. The website's been updated, and you'll see a lot of changes around the open everything branding. And the Catalysts team is now fully staffed and rounded out and brings a lot of expertise that could really help our customers and prospects as they go through their digital journey. So all of this helped us have a good first half 2020. Let me go through a few of the details of the revenue by activity. So as our customers went into more of a lockdown mode, they started demanding more and more of the subscription, and we had to accelerate our transition from license to subscription with several of our customers, and you see this reflected in the numbers. License revenue dropped by over 50% in the first half of 2020 to EUR 10.5 million, but subscription revenue grew to EUR 37 million or a 58.5% increase. So when you take the recurring contracts of subscription and add them to the maintenance recurring contracts, you have almost 80% of our revenues under a recurring contract model, which was an acceleration from what I had expected for the year. The maintenance revenue dropped 2.5%, which was expected as the transition moved quickly from license to subscription. And our services revenue was the revenue line that was most impacted by the COVID crisis. The difference between what was reported last year and this year can be almost all attributed to our service personnel having to stop their projects, either because they could not go on-site or because the customers had to deal with higher priority items as they move to remote working situation themselves. So overall, our revenue finished at EUR 136 million, down 2% from the 138% of the prior year. With that, I'd like Roland to go through the first half achievements of the customer success organization, Roland?

Well, thank you, Patrick. Thank you, and good morning, good afternoon, everyone. In my section today, I would like to cover a few important topics, starting with the continuous improvement of our Net Promoter Score, which demonstrate our customer has satisfaction and other key successes of our go-to-market along the period. With that, I would like to start with the great growth and strong signature metrics that we've seen in H1. Signature metrics is an important metrics that we are using to monitor our business. It's -- we are using it as a normalizing function, while we are transitioning from a license for business to a subscription mode. And it's calculated very simply as adding to the license value of the contract, 3 years of the annual contract value of any new license subscription contract. As you can see, we ended up -- we closed the first half at plus 26% compared to last year. And I'm very, very proud of the team execution worldwide in the time and the situation, the unprecedented condition that we have to live with. We started to see the impact of this, a really big time, first early in the quarter in APAC. And they've been -- nobody was prepared. Nobody has any experience of this, and they see and they faced a first quarter there with a very, very low activity. And we saw the impact of rolling out to Europe a bit later during the quarter and at the end of the first, beginning of the second one. And after a period of adjustment, I will say for both our internal teams, but also for our customers, we saw a rebound of the activity. And we, in most of the region, hold a very nice end of June. In the Americas, the situation was a bit different and deferred. We started the year strongly with the momentum of the end of 2019. And as we saw during the second quarter of the year, the lockdowns being more consistent across the United States and South America, we started to saw a slowdown and some customers pushing further some of their project, some of them pushing it to the second half and others already pushing it sometime beyond the limit of the year. So as I said, signature metrics, key metrics to measure the transformation during this transition period. Our strategy is really to move from the license to a subscription. And in order to do so, let's take a look at the split between license and subscription bookings year-over-year. If you looked on the left side of the slide, you can see that on the first half of 2019, our subscription booking represented only 32% of the bookings. And the license contract represented 68%. This has completely changed this year, with close to 80% of our signature being related to subscription contract and only 21% on license. This was exactly the trajectory that we were driving to and this validate the strategy and the -- as we are transforming the entire organization to deliver more value and better flexibility to our customer through this subscription model. So when we started the year, and we realized early and the impact and the potential impact of COVID situation on our business and on our business of the customers. And we took proactive actions to adjust our operations and our customers engagement as well. When we were all -- first and foremost, we wanted to be there for our customers as well as for our employees. We wanted to ensure business continuity and reassure our customers of our focus for our customers' success. While we were all remote, proximity with our customers were even more crucial than ever. And our local presence and leadership and our continuous focus to improve our customers' experience were key in this period. I'm happy to report that our customers' feedback on their experience with Axway has never been that positive. Three years ago, we set up a goal to move from a negative Net Promoter Score to a plus 25 by the end of 2020. And I'm happy to say that in June this year, we reached that goal, positioning us, Axway, as the -- as part of the top quarter for the software industry in terms of our Net Promoter Score. Another adjustment that we had to do was, yes, as many of us or whole of us, move to much more virtual events. One of them that we rolled out was rolling out the Catalysts webinar weekly series, and these around the corner sessions that we hosted during the full second quarter had a fantastic success with bringing more than hundreds of people every week to talk about digital transformation in terms of technology, but also in terms of business impact. Last, we also wanted to make it easy for our customers, how everybody was moving to working from home policy. We offered our customers to use simplicity, our secure content services solution during this period. All these changes actually being very aligned with our customer centricity focus, and we've been able to do so and to adapt quickly based on the strategy and the organization changes that we have been rolling out for the last couple of years. And as -- go back to the previous slide, please. It's not surprising that as we were here for our customers, they were also here for us. Also, we continue to sign new customers. It is significant to see that 89% of our bookings were -- has been made on our customer base. Once again, demonstrating the value that we are delivering to them and to their business. Another important part of the key points of the success of the first half was the breadth -- is the breadth of our portfolio. And to illustrate that, I would like to comment on the full, not just contract that we closed this half. All of this being 7-digit deals. The first one I want to mention is a large financial institution in France. We decided to modernize their MFT solution by contracting with us for a 5-year subscription deals on our new MFT solution. The second one is a national broadcaster satellite radio in the U.S. It went through a major acquisition, large impact on the size of their company and decided to replatform their old and their entire infrastructure based on amplified APIM. The third one is coming from Germany with a well-known automotive equipment manufacturer who selected Axway Cloud B2Bi solution to accelerate the spin-off part of their business. And finally, in the U.S., the deployment of simplicity in a famous telecommunication and mass media engaging on an important cost saving while managing securely their unstructured data. All of these deals will be nice successes on both historical customers and new customers. That said, in digital transformation, I like to say that great technology is not enough. It takes more than selecting a software to be successful in digital transformation project. We've seen, and we all have seen for years, many companies embarking in digital transformation program with only the technology in mind. Digital transformation is not just a technology. It starts, first and foremost, with the desired outcome and the customers' experience that we want to deliver at the end. And on the screen, you can see a journey of one of our valued customers, Boehringer Ingelheim, in the United States, who engaged with our Catalysts group to help them to redefine their strategy around their project about digital -- going digital. By using the Catalysts group, which is a group of seasoned experts group gone through such transformation, several transformation, then sell as customers, CIOs, as architect or consultant. They help our customers, and they help business leaders to conceptualize what is possible, why they are helping them to go through the transformation of the business. And this result for Axway into larger engagement, paving the way for the deployment of our solution. But also and more important, positioned Axway as a strategic trusted adviser, more than just a software vendor. So what is also critical. And we -- we recognize that Axway is part of the past and the present of our customers but also part of their future. When we see our customers' heritage application, system and data, we don't see like other vendors, opportunity to replace that, but much more to unlock the systems. Our brand promise is to deliver brilliant digital experiences out of this heritage application and systems. And our platform, AMPLIFY exactly provide the path to do so. And we've been recognized by leading analysts and customers in our ability to deliver on that price. We believe that an important change, mindset change needs to happen. And moving from closed, walled garden infrastructure to infrastructure of much more open, open to create better employees engagement and deeper collaboration within the enterprise or the broader ecosystem of the company. From heritage application to hybrid integration to open everything. And our position and our historical leader position in MFT and B2B makes us ideal for our customers who want to leverage APIs as part of a broader integration relationships with future of proof solution. And when I looked further, when I looked further to the future in the second half of the year, I talked about this quote, "In difficulty lies opportunities." The COVID situation really reinforced the need for our customers for digital transformation. And we have seen more and more companies realizing the importance and actually the urgency of moving their processes to be more digital. And to do so, they need to open their platform. While the booking in the first half, as I mentioned, was very strong and solid, the sales and marketing efforts during the first half also had a significant impact on the pipeline, as you can see on the slide. While the uncertainty in the world is -- has never been that high, our pipeline is also at its highest. And we are entering Q3 with a much more higher pipeline coverage that we did in Q2. So in closing, we've done, and we've made great progress in terms of strategy and in terms of execution. And I'm really proud of the progress that Axway has made on the achievement over the last few semesters. The focus on our customer successes monitored by our NPS is at its highest and continue to grow. The signature metrics during this first half, despite the credit situation has been solid and very strong. And we have now reached more close to 80% of our revenue being recurring revenue. For 20 years, our Axway mission-critical solution has been crucial for our customers' lives. And we believe that our customers' future is to open everything. Open everything is more than just a marketing statement. It's a direction for our customers to consider their infrastructure, their culture and the world which is changing as they are defining their future. We believe that Axway is very well positioned to be part of this future. And with that, I will thank you, everyone, for your attention and return to Patrick.

Thanks, Roland. Now I'll go through a little more detail on the first half financial results. So for the first half, we were able to finish revenue at EUR 136.6 million, which was down organically 2% from the first half of 2019 or a total drop of 1.4%, and we've gone through that detail previously. Our cost of sales increased slightly in the first half of 2020, which dropped our gross margin to 65%, but not far from the 66% of the prior year as we had to make some investments in our cloud platform as well as some royalties to fulfill our product suite. Our operating expenses dropped during the first half of 2020 as planned, but we also had some unplanned drops. And those primarily were in sales and marketing as the team had to go fully remote, which meant there was no travel and no live events, which is the first part of the year, every year for us. So the drop in sales and marketing fully was unexpected, whereas R&D and G&A drops were planned. In both of these areas, we did the travel on the events that we had planned to kick off the year, but we needed to pull back to improve the margin, which was our strategy for 2020, and we did so. So even with the decreasing revenue situation, we were able to achieve EUR 2.5 million of profit for the first half of 2020 or 1.9% of our revenue, similar to the first half of 2019. Our operating profit was a drop of EUR 3.7 million as that takes into account EUR 4.5 million of amortization expense intangibles as well as our stock option expense. Our net profit finished at a loss of EUR 6 million, which is usual in the first half of the year because our Q4 is so strong. That compares to the EUR 6.1 million of the first half of 2019. So to focus a little bit more on the license and maintenance activities, as I mentioned before, we experienced a strong double digit drop in the license activities, both in Q1 and in Q2, as our customers move to engage with us quicker than expected the subscription operating model. So the drop of 52% in the first half of the year was compensated with the subscription revenue growth. Our maintenance revenue dropped 2.5% in the first half of the year as expected, and our maintenance had a standard attrition of just under 8%, which has been our historic trend for many years. And this was not compensated by the new maintenance coming along with the new license revenue, which is a decreasing situation. But as we move to the subscription revenue, you see an opposite picture. Our subscription revenue grew in both Q1 and Q2 very strongly. We were able to meet our customers and their need to move their contracts more to subscription, and we were able to sign EUR 10.2 million of new ACV in the first half of 2020. So all of this resulted in a 58.5% growth in the first half for subscription revenue. So here you see the breakdown of our signature metric calculation, which we've shared with you before, grew strongly at 26% in the first half of the year, driven by the new subscription ACV. Let me make a few comments on the balance sheet. Cash and cash equivalents finished at EUR 24 million at June 30, 2020, up from the EUR 21 million at the end of the year. Our DSO metric was at 70 days, which is quite in line with our expectations, and I could happily report that to date, we've had no material issues with our cash recoverability or collection of our receivables even during this crisis period. Our current deferred revenues was up to EUR 77 million, up from the EUR 60 million at the end of the year. And our total assets and total equity remained quite stable with the end of year figures. Our cash flows for the first half of 2020 looked a bit like the cash flow for 2019. I'll mention that free cash flow was EUR 4.9 million in the first half of 2020 versus the EUR 1.2 million first half of 2019. And we were able to generate EUR 3.3 million of cash in the first half of 2020 versus a dropping situation of EUR 3.6 million in the first part of 2019. All our banking covenants were met, and we have the availability of our credit line to use, if needed. So let me get into the 2020 targets and our midterm ambitions. First, we've not changed our technology ambitions to become the leader in the hybrid integration market by the end of the year. And then we're looking at the financial forecast for the end of the year. And I know that in February, we gave some guidance for the full year. And then quickly as we went into the COVID crisis, we pulled that guidance because we didn't have the visibility to give you any news that was reliable. And currently, we did have a good first half. Our pipeline is growing. We were able to sign some business, maybe not the pace that we would've liked, but we were quite pleased with the team's ability to sign new contracts in this context. So we do have the pipeline to finish with a strong year. But I'm really concerned about the economic impact of the prolonged crisis period and how our customers will adjust their spending habits at the end of the year. And so with this uncertainty, it's really hard to give any strong guidance for the year. And so at this point, the best I could say is that if I had to guess what the end of the year could look like, it could look a lot like the range of our 2019 results in terms of both revenue and margin. We have such a strong reliance on our fourth quarter, where we do about 40% of our bookings in the fourth quarter. This is also the period where the economic impact may hit our customers, and they'll have to make decisions to continue on with their projects or not. So with the cloudy visibility, this is the best I can offer you. But you could be rest assured that our teams, our sales teams, our service teams, everybody at Axway is going to do the best they can to make 2020 a successful year. Now moving on, I'll reiterate our midterm ambitions. We want to get back to targeting EUR 500 million of revenue and returning our operating profit from activities between 15% and gradually moving towards 20% and to get our EPS back about EUR 1 per share in the midterm, so 3- to 5-year type period. So with that and to reiterate kind of our brand messaging around open everything, I'd like to turn the call back to the operator, and to Arthur, and open up the lines for questions. So Arthur, takeover.

[Operator Instructions]

Okay, Patrick, first, I will take the question from the chart. So we have our first question from Derric Marcon, Societe General. What can be a reasonable target in million euros for new ACV signing this year?

Yes. So we did EUR 10.2 million in the first half of the year. And historically, if we follow the trending we've had in the past with the bookings of our license revenues that going back in the history, we normally do about 60% of our bookings in the second half of the year. So that would imply that we'd do another 60% or around $25 million of new ACV for the full year, about 15% in the second half of the year. But that's just a historical trend. Obviously, if the customer buying patterns change a bit and they go back to some license contracts or move everything to subscription that could increase or decrease that figure.

And there is a question from Derric Marcon, Societe General. What will Mr. Bhatia bring new in the company? Was that function already present in your organization? And what -- how is this job is not already managed by historical sales and marketing team?

Yes. Our product management function has always existed within Axway, but it's always been part of another organization. And traditional product management should be bringing the voice of the customer and working with the R&D teams on what we've built to meet the customer needs over the next year or 2. Obviously, we have the office of the CTO that's setting the longer-term forecast 3, 4, 5 years out and seeing where the market is going to be moving. But our product management team is a critical piece to make it real for our customers in the shorter term and to try to anticipate and work with the customers to get their voice in our product road map. With it being lower in the organization, that voice wasn't loud enough. And so as I'm anticipating, going into the back half of the year and resetting our strategy for the next 3 years, we need that voice from the customer and the road map over the next couple of years to be a voice at the executive team level. So I expect Rahim to be driving with the executive team, the strategy for the next 3 years, and it will be a key role for us going forward for sure.

Last question from Derric Marcon. Have you seen deal slippage at the end of June, notably in Europe? Have you quantified the potential headwind? And have you catch up with some of those deals at the beginning of Q3?

Roland, maybe you take that?

I'll take that. I'll take that one. I almost mentioned it. And I see -- we saw these -- some of the slippage and some of our customers, end of Q2, we saw it across the board. In the states, I mentioned it previously in the United States where there are some of the project that has been pushed for a few months or some customers saying that even for a longer period. As I was mentioning as well, it depends also on the -- how the -- when the pandemic started to hit the region. And we've seen in H1, some of this dynamic with customers pushed really in APAC and really already closed a couple of large transaction in this region early in Q3 in APAC. So when the teams and the customers, when the region is able to establish themselves into this new normal, we can see sometimes the deals moving better. The key question is really what will be the global financial and economical situation, especially later in the year.

And I'll add to that point, you had asked about the EMEA region, Derric. In our EMEA region, that's where we're fortunate enough to have a very long history and a well-established customer base. So in the first half of the year, we were able to perform strong working with our historic customer base, and we didn't have much slippage going out the first half in the EMEA region.

Another question, this time from Matthias Durner at Discover Capital. Are there any one-off effects like upfront bookings within the subscription revenue line in Q2? And is the outlook for stable revenue and profits compared to 2019 including no uptick in license revenues in Q3 and especially in Q4?

Yes. So as I've described in prior meetings, the accounting rules with the IFRS change in the prior years requires that with what we call customer managed subscriptions, a portion of that revenue on the customer managed subscription is going to be taken upfront. And so this first half, we had just over EUR 11 million in subscription revenue that was recorded upfront, and then the remainder of the contracts will be taken over the term of the contract. As we look out for the rest of the year, your question was on license, we're not anticipating the license to come roaring back. We think the subscription will continue at the strong pace of bookings in the back half of the year. So hopefully, that answers your question.

Next question is from Antoine Lensel, Kepler Cheuvreux. Where would you see your effective tax rate in 2020? And what level of CapEx do you expect in 2020?

Our effective tax rate. I've always targeted in the low 20s, 21%, 22%. And it's a big mix of where you do your profit in which countries, but on average, we should be in that range if we deliver the results we're forecasting. And I don't anticipate any real change in our CapEx for the rest of the year from prior years. We have no significant investments we have to make.

Another question from Antoine Lensel, Kepler Cheuvreux. Could you speak a bit on Syncplicity feedbacks from customers during the trial period. Did this free trial lead to new signatures on simplicity?

Roland?