Q3 2019 Earnings Call
Good day and welcome to the coverage then I'll eat excuse me 2019 earnings conference call.
All participants will be in listen only mode should you need assistance. Please take note conference specialist addressing the stocky followed by zero.
After today's presentation, the we'd be an opportunity to ask questions.
Good question you May Press Star then one another stuff.
The reason or your question. Please press Star then to be no watch. This event is being recorded I would like to turn the conference all that Anthony Gerstein.
Vice President head of Investor Relations. Please go ahead.
Thank you operator, and good morning, everyone.
Thank you for joining us can declare based analytics third quarter 2019 earnings conference call.
With me today are Jerry Stead, Executive Chairman, and Chief Executive Officer, and Richard Hanks, Chief Financial Officer.
Reminder, at this conference call is being recorded and web cast is copyrighted property of clarity eight analytics any rebroadcast of this information in whole or in part without prior written consent to clarify it is prohibited.
This morning clarity issued two press releases the first announcing its third quarter results for the period ended September Thirtyth 2019.
And the second announcing the divestiture of certain assets within the Mark monitor product line.
These releases as well as a third quarter earnings supplemental presentation are available in the Investor Relations section of the company's website clarity dot com.
Under events and presentations.
During our call we may make certain forward looking statements within the meaning of the applicable securities laws.
Such forward looking statements involve known and unknown risks uncertainties and other factors that may cause the actual results performance or achievements up the business or development, some clarity to industry to differ materially from the anticipated results performance, a treatment or developments expressed or implied by such forward looking statements.
Information about these factors could cause actual results to differ materially from anticipated results or performance and can be found in klevitz filings with the FCC and on the company's website.
Our discussion for the quarter will include non-GAAP measures were adjusted numbers, including adjusted revenues EBITDA adjusted EBITDA, adjusted EPS and free cash flow.
Clairvoyant leaves non-GAAP results are useful in order to enhance an understanding of our ongoing operating performance.
They are supplement to and should not be considered in isolation from whereas a substitute for GAAP financial measures.
After our prepared remarks, well open up the call to your questions with that it's my great pleasure to turn the call over to Jerry. Thank you Anthony and thank you everyone for taking the time to join us for the call today I am very proud of our team we delivered strong financial results, while accomplishing a tremendous amount of core.
Day Snow work in the period I'll give you an overview for the third quarter results in an update on the progress. We've made on several key initiatives then Richard will provide more detail financial commentary before we open the call to your question.
As I said I'm pleased with our results for the quarter. They were in line with our expectations and we're on track for the guidance. We gave for 2019 back in January of this year, which we are now reaffirming today.
Adjusted revenues increased 3.6% on a constant currency basis with adjusted subscription and adjusted transactional revenue.
<unk>, 2%, 11.6%, respectively on a constant currency basis. The increase in subscription revenue was primarily due to pricing and new business with both product groups well the increase in transactional revenue was due to timing as well as greater backfile sales.
In addition, the Bayano way published Barware pressure vessel code standards were delivered this quarter. As this is a periodic publication its availability and sales contribute to fluctuations between the quarters for the segment, our HCV, which has annual contract value of subscription based agreements increased.
3.9% in constant currency with that revenue renewal rate of 90.6% for the nine month period, ending September Thirtyth 2019, adjusted EBITDA increased 16.1% to 77 million in the third quarter and adjusted EBITDA margin was 31.
<unk>, 7%, a 300, a 350 basis point improvement over last year's third quarter. Adjusted net income was 47.5 million.
Dollars are 14% 14 cents per diluted share compared with 26.5 million or 12 cents per diluted share in the prior period. Please note that the prior period share count excludes the impact of the shares issued in connection with the merger transaction if normalized for they these shares.
The results would reflect seven cents per diluted share for last years Q3 in comparison to this year's 14 cents, we're reporting now.
Free cash flow was $68.7 million for the nine month ended September thirtyth compared to a negative 11.2 million and the prior year Richard will provide more detail on the significantly favorable swing of this metric.
So there was a great quarter and I want to thank all of our colleagues for their focus and hard work I'm proud of the global player base team and their commitment to serving customers with excellence to ensure that we deliver against our goals.
In addition to delivering very solid financial results. We executed many important special projects that has set us up for future improved performance. Each of these alone would be a lot of work and then would contribute to building a strong foundation on which we will drive sustainable profitable growth taking.
Together, they right I actually represent extraordinary progress this quarter, let me cover some of those now in August we announced an agreement to pay $200 million to terminate the tax receivable agreement with Onyx and bearing private equity Asia.
Settling the T.R.A. removes reported complexities and simplifies our structure well greatly enhancing our capacity to create shareholder value importantly, it creates free cash flow savings a $30 million annually, starting in 2021 and clarity retains all of its significant tax spending.
That's a sets the company will continue to enjoy a low annual cash tax expense of approximately $25 million for the foreseeable future compared to an estimated cash taxes 27 to 28 million and 2019 in September we completed our first secondary offering.
Of approximately 40 million shares owned by Onyx and bearing private equity Asia together with certain other shareholders. The transaction was priced at $16 a share and reduced peaky ownership from 71% to 58%. The company did not receive any proceeds from the sale, which we.
Received very strong interest and importantly, we were happy to be able to add liquidity to the market increasing our public float to approximately 108 million shares are 35% of the outstanding shares up from the 69 million or 23% of outstanding shares previously in September we all.
Also announced the acquisition of sequence based of the sequence based business a lead a leader in providing Pat the sequence information at search technology, though not a larger transaction. This action. This acquisitions grandson, our patent offerings in the fast growing biotech and pharmaceutical chemical industries.
We see opportunities to do more of these tuck in acquisitions when they fit our criteria to be accretive within the first 12 months of clarity its ownership.
As we continued to look for strong acquisitions. We will also continue evaluating and optimizing our portfolio products. Hopefully you have all seen this morning that we announced the divestiture of certain assets within Mark our Mark monitor product line. This transaction has two key benefits first.
It will allow us to sharpen our focus on serving our IP customers with innovative integrated IP solutions across patents trademarks and domain registrations second under the new ownership and their commitment to investing in innovation, but Mark monitor brand protection business and its high profile customer base.
Well flourish.
Subsequent to the close a third quarter, we completed a refinancing of our long term debt at very attractive rates and terms, specifically, we issued term loans of $900 million at 325 basis points over LIBOR, LIBOR and senior security notes of $700 million with effects coupon of four.
0.5% both was seven year maturities. The proceeds from this refinancing are being used to repay existing debt and settle our obligations under the Trs settlement agreement as already mentioned this refinancing saves us $18 million of annual interest expense. In addition, we now have a too high.
Under 50 million dollar Undrawn revolver that matures on five years now providing us with a significant amount of financial flexibility again my many many thanks to the clarity team members of drove each of these products projects to terrific success, while also doing their quote day jobs.
Shortly after the merger in May we collaborated with BCG to help us examine our organization and ensure we had structures and processes that would allow us to operate efficiently and effectively.
We benchmark cost sites to ensure that our functions were right sized and then work to simplify the organization and eliminate duplication by analyzing and adjusting spans and layers. We began the process of insourcing contractors that served as staff augmentation to ensure that we're providing.
In the most cost effective and best service to our external and internal customers, we're reducing costs through simplification and automation and the processes and we're eliminating duplication by centralizing resources as part of simplification of focus we moved from five silo business units into two product groups.
Sure Science led by motor on them and IP led by Jeff Roy You will hear from both of these leaders yet entered and Investor Day next week. This new organization structure has tremendous operating benefits that will allow us to scale as we grow aligned sales and and product manager.
With a focus on our customers and will help us integrate future acquisitions quickly and effectively.
Through the overall screaming streamlining of our organization, we're becoming more agile and flexible driving focus and execution on these initiatives that have the greatest impact or the company, including more rapid innovation. We are operating with a real sense of urgency we have many opportunities in which we have not yet capitalize that is to do.
Cross collaboration and cross selling this restructuring also unifies our commercial.
Product management functions, making as much more client centric and allowing us to be more proactive as we serve our customers.
Transforming on organization does take some time and we will complete this work over the next six quarters, we expect to realize $70 million to $75 million of annual run rate cash cost savings as we exit 2020, Richard will give you more details and just amendment.
Now moving on to 2019 guidance, we are again reaffirming our 2019 guidance today adjusted revenue in a range of 962 million to 995 million adjusted EBITDA on a range of 290 million to 200.
$310 million and adjusted EBITDA margins of approximately 30% plus.
We will provide you with our guidance for 2020 at our Investor Day next week. This will include our outlook for adjusted revenue adjusted EBITDA, adjusted EPS and free cash flow to summarize it was a very busy and very very productive quarter with so much great progress made in lots more to come.
As I said I'm very proud of our Clariphy team, who stayed focused on serving our customers with excellence and delivering on our commitments in gold I'm confident that by continuing to execute we will deliver to our stated goal for many years to comp we look forward to seeing many of you next week at our first Investor day and.
New York on November 12 will start today with product demonstrations and moved to a formal presentation from members of our leadership team for those who cannot attend we will be webcasting event live on our Investor Relations day, I'm now going to turn it over to Richard to discuss the financial results before we.
Open for questions.
Thank you Jerry as mentioned it was a good quarter reported revenues for the third quarter 2019 were flat home prior year $243 million compared to the same try it quarter by quarter end up 0.4% at constant currency recall that the prior years here.
Revenue included the results of IPO of $7.8 million.
Jim was sold in the fourth quarter of 2018.
Adjusted revenues accounting for the divestiture by PM increased by $7.5 million or 3.2% to 243.1 million in the third quarter 2019.
From 235.6 million in last year's third quarter again as a reminder, this excludes revenue from yen from the prior year quarter as well as the modest impact of the deferred revenue purchase price accounting adjustments.
Foreign exchange was approximately $1 million of headwind in this years quarter, mainly arising from euro and Sterling weakness relative to the U.S. dollar.
On a constant currency basis, adjusted revenues increased by 3.6% in the third quarter compared to the third quarter of 2018.
In terms of currency profile. Please note that approximately 83% of our revenues in the third quarter of 2019, we U.S. dollar denominated.
Turning to our revenue profile when looking at revenue by geography, where they consistent balance of revenue across the regions with 45% of our revenues from North America, 24% from Europe , 23% from Asia Pacific, an 8% from emerging markets.
Please note that going forward, we will be reporting revenues by geography as follows firstly the Americas.
Secondly, Europe Middle East Africa, and Thirdly Asia Pacific.
Moving on to revenue by tight.
Adjusted subscription revenues increased by $3.3 million or approximately 2% to constant currency for the quarter or competitive against last year's quarter was slightly more challenging withdraw your third quarter benefiting from renewal timing that we benefited from in earlier quarters in 2019.
Importantly, adjusted subscription revenues increased by 3.7% constant currency for the nine month period ended September 32019, which tracks closely with the growth of annual contract value for HCV.
The increase in subscription revenues was driven impart by price increases as well as new business with the largest all increases in the quarter coming from the web of Science text Street and complementary product lines.
Adjusted subscription revenue accounted for 83% of total adjusted revenues in the quarter compared to 82% in the prior year period.
We continue to drive ongoing strategy of growing our recurring subscription revenue base.
At the ended the third quarter the annual contract value for HCV up subscription based contracts increased by 3.9% at constant currency compared to the same period last year.
It should lead to further improvements in subscription revenue growth in subsequent quarters.
As Jerry mentioned retention rates were approximately 91% of a nine month period ended September 32019, consistent with the same prior year period.
Adjusted transactional revenues, which represents approximately 17% of total revenues in this year's the quarter increased by $4.2 million or 11% to 42.3 million.
This represents an increase of 11.6% on a constant currency basis.
The performance group was driven by backfile sales in both product groups, along with the release of the ban by annually published BPVC standards in the quarter.
As a reminder, backfile sales are slices of archive data, we just sold either to complement clients use an existing subscription or in certain cases, a separate datasets.
Looking now at performance across all to product groups.
Science group revenues increased $136 million growth of 3.2% as reported and by 3.3% on a constant currency basis.
The increasing signs group revenues was driven by a subscription revenue growth due to new subscription business and price increases as well as higher transactional revenues.
The increase in transactional revenues reflects timing and increases in the sales of content Backfiles.
The science group accounted for 56% of revenue in the quarter compared to 54% in the prior year period.
Intellectual property group revenues increased to $107.1 million growth of 3.2% and by 3.9% on a constant currency basis.
IP group revenues were driven by subscription and transactional revenue with transactional revenues, reflecting higher backfile day to sales compared coupled with new standards released during the quarter.
Turning now to adjusted EBITDA.
The EBITDA increased by $10.7 million or 16.1% to $77 million in the third quarter of 2019.
Pad with $66.3 million in the prior year period.
The increase reflects higher revenues combined with lower year over year expenses in the quarter.
Adjusted EBITDA margins with 31.7% in the third quarter compared to 28.1% in the third quarter 2018, an increase of more than 350 basis points.
We are required to report Standalone adjusted EBITDA on a trailing 12 month basis pursuant to the reporting covenants contained in our credit agreement and indenture.
Standalone adjusted EBITDA. It takes adjusted EBITDA and includes two committed capex firstly, an adjustment for extra Standalone expenses and secondly, it includes the impact of pro forma cost savings we have implemented.
Standalone adjusted EBITDA was $324.2 million. The 12 month period ended September 32019, compared to $309.5 million for the 12 month period ended September Thirtyth 2018.
Note that we were in a positive net income position in this year's the quarter, which requires us to use the fully diluted share count a 330 million shares in our adjusted diluted EPS calculation.
Weighted average diluted shares outstanding with 330 million shares in this year's third quarter compared to 217.5 million in last year's third quarter.
As Jerry mentioned remember that the prior period share count excludes the impact the shares issued in connection with the merger transaction completed in May 2019.
Adjusted diluted EPS was 14 cents in the third quarter compared with 12 cents in last year's same period.
If normalized the shares the results would reflect seven cents per diluted share for the prior period.
As we did last quarter, we will continue to provide you with the slide in the earnings supplement explaining that diluted share count to assist you with your analysis.
We see the Investor Relations section of our website to find a copy of that supplemental presentation.
Cash flow from operations for the nine month period ended September 32019 increased to $112.5 million, which compares to 25 million in the prior year nine month period.
The improvement in operating cash flow was driven principally by low operating loss, which included the impact of a 45.3 million dollar onetime cash settlement and a decrease in Ts they expenses of $41.5 million for the nine month period.
In addition, we saw improvements in working capital, including Thats, a collection of receivables, partially offset by higher deferred revenue liabilities as well as timing say stages accounts payable and accrued expenses.
Capital expenditures for the nine months ended September 30th with $43.7 million up from 36.2 million in last year same period.
The increase in capital expenditures compared to prior year occurred as the focus about technology teams is now on new product development, whereas in prior yet it was significantly focused on carve out and separation activities.
Free cash flow improved to $68.7 million for the nine month period ended September thirtyth up from negative 11.2 million in the prior year period.
It is important to remember that in addition to the onetime cash settlement of $45.3 million. The current period includes partial offsets of approximately $31 million of merger related cash expenses recognized in the second quarter and a further $1.2 million in cash costs.
For the secondary offering completed in the third quarter.
Turning to the balance sheet cash and cash equivalents were $88.8 million at September 32019, compared to $25.6 million at December 31st 2018.
Total debt outstanding net of cash was approximately 1.254 billion at September 32019, compared to 2 billion at December 31st 2018.
The reduction in total debt through the first nine months of 292019 is approximately $750 million. Consequently on net leverage ratio at September 32019 was 3.9 times compared with 6.4 times at December 31st 2018.
Pro forma for our debt refinancing, which was completed on October 31st 2019 total debt outstanding net of cash, it's 1.5 billion, which includes $200 million to fund the settlements of the GRA obligation.
Accordingly on that leverage is 4.6 times on a pro forma basis.
The refinancing Lois our weighted average cost of debt to 4.7% from 6.2%.
And extends our maturity profile to seven years.
In addition, we anticipate interest expense savings of approximately $18 million per year.
With respect to our reorganization and operational efficiency program, we expect to achieve the following approximately $70 million to $75 million of annualized run rate cash cost savings exiting 2020 of which we expect to realize close to 60 business those savings or $40 million to $45 million.
Cash savings in calendar year 2020 .
From an opex viewpoint, we expect the impact from the program on adjusted EBITDA to be approximately $60 million to $65 million annualized cost savings exiting 2020 .
We expect to realize approximately $35 million to $40 million in calendar year 2020 .
The difference between cash and Opex savings is primarily due to converting and transferring outside contract to work, which we capitalized to full time internal colleagues. The net effect is the cash savings will be greater than the opex savings.
Expected associated one time costs to implement the program are estimated at $6 million the majority of which will be incurred in 2019 in 2020, the remainder will be realized in 2021.
Jerry covered our outlook for 2019, which remains unchanged adjusted revenues in a range of $962 million to $995 million.
Adjusted EBITDA in a range of 290% to $310 million and adjusted EBITDA margins of approximately 30%.
I'll remind you that early this year. The company provided lenders are required outlook standalone adjusted EBITDA and that outlook is similarly unchanged as well at between 325 million and $345 million.
We will provide an our outlook 2020, the Investor day next week with that ill now turn the call back over to Jerry Great job. Richard This wraps up our discussion for the third quarter, we look forward to sharing the many exciting opportunities ahead with you.
We're now ready to take your questions. As a reminder, please limit yourself to one question and then returned to the Q operator lets open up.
I will now begin the question.
Yes. Good question you May Press Star then one.
If at any time your question has been addressed.
To answer your question. Please press Star then.
First question, Andrew Glass with William Blair. Please go ahead.
Hi, good morning.
Good morning, I just wanted to.
Just wanted to start with the Mark minor brand protection divestiture, just hoping you can provide a little bit more detail on on your rationale there.
Maybe a little bit more detail on the business itself.
And any other details you can provide in terms of bike decide the business how fast it was growing.
And maybe anything we should think about in terms of its profitability. Thanks. So that's a great question and we're going to give you a full remember we just announced at two hours ago. So we're going to give you a full review of that next week, but I'll give you a quick overview.
And then set it up for the future if if we were to exclude.
The parts that were selling in Q3, but you would've seen with constant currency that we reported at 3.6% growth. It would have been 4.15. So it's over 50% 50 basis points, you will see similar profile from a profit standpoint, So we'll give you guided.
Spurred 2020, excluding those pieces that we've sold a couple other things.
As I as I said and if you read the press release.
We think this business under the new ownership, where they're very focused on that.
Those opportunities will wolf.
Really flourish in the future and be a great home for our people. If you think more importantly, though what it allows us to do with IP those pieces, we've sold don't directly.
Cartner with the business sportswear and you want to add anything to that Richard noting thats right.
We are.
Delighted with the divestiture, we will complete the expected complete the transaction at the end of December 2019, and as Jerry said I think that the.
The company, we're partnering with six security is going to be a terrific.
Hello full for those product lines in those.
Ill colleagues.
And as I said, we'll give you the full 2020 guidance next week and in there that will with that will exclude the.
The parts that were selling I would remind everybody on the call that actually back on January 14th.
We said that we would exit 2020 at.
4% to 6% organic growth and 35% to 38%.
EBITDA margins.
You can.
But if you just look at this piece that we're going to be able to do that will do two things next week. We'll show you how that works and then also give you the full.
2020.
Because what Richard did a great job was describing how the cost reductions there are very significant as we said they are 70 75 million very proud of the team for the work they've done how that impacts 2020, and how it will impact the entire company. So I would just close on this question is great.
On.
I I actually had my fourth anniversary October 3rd of leading public companies. This would be in the top one or two maybe three quarters that I've ever reported I've never been prouder of what we've done on a financial side.
Equally and critically important as all the changes, we're making including the the shift with Mark monitor thanks for the question.
Sure. Thank you.
The next question is from Zack.
FBR. Please go ahead.
Hi, good morning, Jerry and Richard.
Hi.
Yes, Jeff can you provide a little more detail on your work with BCG.
I mean can you talk about some of the areas that you.
Discovered or potentially uncovered that we're not there prior chair or work with the merger with Churchill capital and kind of how you get to that 70 to 75 million an annualized cash savings.
Yes, no great question. Thanks, just for background Ive used BCG to do the same thing with six of the company's I've led over the years. This time, we were extra blessed because the team that we use when we did they I Hs.
Merger with market was the same team that we had here. We they started June 10th wrapped up actually at the end of September right on target the big pieces, and we'll give you more views of that as we go forward.
Theres three critical big pieces that we're operating with it's what I said, we'd streamline flatten out the organization significantly what's you're now seeing underway.
Secondly is that you will see location wise will be going from 60 locations to approximately 30 or less.
And that again will play out during 2020, and then as we bring the contractors, which was a large number of people then.
So we'll enjoy the benefits not only of of cost reduction significant cost reduction will enjoy the benefits of with Randy Harvey's team much more efficient.
New product introduction and we're excited about that I would say it's great question, just as a reminder to everybody.
I had a handshake to acquire this business in 2012.
So I had a very good view of what I expected.
And I was blessed to have people like share of AD blocker at cliffs math and Jane Oak Embalmer, who were on that team, helping us now actually help at all I do is try to stay out of their way.
And we would say there was actually no surprises.
With two exceptions the ability to grow this business was even better than I expected I'll make a quick comment talk little bit about it but.
We've always done colleague engagement and then customer delight.
We just finished our second.
Customer delight.
Review, what we set out over 800000 users.
We did one in June and one that finished in October .
<unk> was a great surprise for me, it's the highest scores I've ever seen customers give for the value. They place on the company and on the products I mean remarkable just to put in perspective way back when we started that.
Yes, we are at 48, we invest when I step down were at 82 and a continued to improve since then as I know they well we actually scored on that piece the piece I'm talking about the value of the customer space. We recorded 87 here I've never seen that nor has the team that we use to do the survey seen it.
So thats the great news it.
And then two other various key points.
And that we're reinforced by the BCG tape one is that we scored the worst I've ever seen are the lowest on easy to do business with and that's why you're going to see us doing all the things, including set it setting up three centers of excellence, including having inside sales in each of those centers just a lot of things that will comment.
Into the future and a lot of work that's already gone on that you'll see next week with the user interface with our products. Those two are loud and clear coming back as feedback from the customers of must do and we'll fix those at the last thing. It was so interesting we received over 60% of.
The participants rhodia, there's two questions what should clearvale keep doing on what should clarify they do better that the it was it was very clear to me an exciting.
That.
There was less than 3% of the total right ends that talked about price just to give you a perspective on that it was 18% to 20% at HSN. So that tells me not only our products valued we have a lot or room as we move forward to do pricing and that's just the great.
Okay, and BCG did a great job to make that happen. Thanks for the question.
Yeah.
Again, if you ever question. Please press Star then one.
Next question is from Peter Christianson with Sidoti. Please go ahead.
Good morning, Thanks for taking my question Jerry back this is.
Opex.
Jerry can you give us a sense of I know as the business exited Thomson Reuters there was a lot of.
At discounted pricing that was used to on on longer term.
Contracts when do we start lapping that and realizing a more normalized pricing environment across your business lines.
Actually that's a great question I'll start Richard will pick it up actually by the end of this year, that's all behind us.
Just remember when it's now our third anniversary of acquiring our start our onyx acquiring and then CCC Anna Onyx together clarity and so and with a great job done this year by being out of.
The carve out by the end of March So just to put that in perspective, it's three years and those long term agreements all expired. This year three years, one of the things Richard mentioned this morning was that.
We enjoy a lot of that was the renewals of those agreements that we enjoyed in Q1 acute to pick up though Richard because it's great question, Yes, I mean, just in terms of price yield.
As we've covered previously the yielding 29 team will be approximately 2.1% thus the yields we enjoy.
And the yields we get across the product groups does vary we find that the web assigns platform for example.
Attracts the highest yields intend to price relative to the rest of the portfolio.
Through the pricing what we've done this year, we are targeting price yields in 2020 of north of 3.63, 0.3%. So 3.13, 0.2% is on target for 2020.
In terms of multiyear contracts and multiyear contracts unwinding, we do have that.
Most of our multiyear agreements so with the large.
University Consortiums, and we enjoy those relationships, we like multi year agreements, but what we do require our pricing escalators built into the multiyear agreements. So it's a three year agree with the five year agreement, we actually have just completed a seven year.
Multi year contract within our IP product group.
Which is terrific and again, we ensure that this pricing escalators on an annual basis in each of your each year as contract that's as good as it gets and it's a great example, the other thing I'd just add to this we also learned and we did learn this with some of the work BCG did for US we have that disparity.
With a lot of our product pricing just as a reminder, on a historical basis, there was less than tight governance on pricing.
One Richard arrived that changed which is two and a half years ago, but what we've now seen as we've done analysis with our internal pricing team on our 500 largest customers, which we'll talk about next week, but we've now seen there is the same product same amount or users significant.
In addition difference because of the way the system work you could as a salesperson discount 10, 12%.
Dan a subscription based actually be a full.
Quota for commission, that's long gone behind us, but what that does mean as we've got a big job than the next this is probably a three year project my view to get equitable pricing across the board. So thats up one that we've not build then but we'll we'll get that as weak.
Go forward Great question. Thank you.
Thank you.
This concludes our question answer session I would like to turn the conference back over to Jerry said for any closing remarks.
Again, thank you all very much for the time, we look forward to I hope seeing many of you next week as I've said this would be in the top two or three quarters I've ever done.
It feels good theres a lot done.
But paint tight because as I've said, our team hang onto your low red hat because we're just getting started thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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