Q4 2019 Earnings Call
This time I would like to welcome everyone to the Castlight Health Q4 earnings results Conference call.
Lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If he would like to ask a question. During this time if they press star followed by the number one on your telephone keypad. If he would like to withdraw your question press the pound Keith. Thank you I will now turn the call over to the cash.
Like health management team.
Good afternoon, and welcome to the Catholic Health fourth quarter, and full year 2019 conference call, leading today's call. Our me bone marrow, Chief Executive Officer, and well bond <unk> Chief Financial Officer.
Me then we'll we'll offer their prepared remarks, and then we will take your questions.
Our press release webcast link and other related materials are available on the Investor Relations section of our website.
This call contains forward looking statements regarding our trends strategies and the anticipated performance of our business, including but not limited to our guidance for full year 2020, new sales retention of existing customers gross margin and operating expense trends cashews future cash because.
Mission and the impact of management changes and changes in our growth strategy on the company's performance.
These statements are made as of February 25, 2020, and reflect management's views and expectations at this time and are subject to various risks uncertainties assumptions.
If this call is replayed after February 25, 2020, the information in the call may no longer be correct were accurate, we disclaim any obligation to update or revise any forward looking statements.
This call contains financial guidance, but we will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.
Please refer to today's press release and the risk factors included in the company's filings with the Securities and Exchange Commission for discussion of important factors that may cause actual events or results to differ materially from those contained in our forward looking statements.
Today's presentation also includes certain non-GAAP metrics, such as non-GAAP gross margin operating expenses operating loss and net loss per diluted share. We believe aid in the understanding of our financial results.
A reconciliation to comparable GAAP metrics on a historical basis can be found in the appendix section of our earnings release filed before the call.
With that I'll turn the call over to me bone marrow CEO of Castlight me.
Thank you for joining us on today's call Q4, with another strong quarter of delivery against the top priorities I laid out in July after stepping into the CEO role solidify our anthem relationship execute on concrete initiatives to reinvigorate our direct to employer business established new growth factors and build out our executive team.
Aimed to leave the company into our next chapter the teams achievements over the last two quarters have put the company and its significantly stronger position than it was just six months ago more importantly, I believe our work over the second half of 2019.
Foundation for continued execution in 2020 that ultimately will allow us to put the company back on the path to sustainable growth.
In July we shared our thesis on the need to leverage our technology more fully in the ecosystem and the immediate term the broader applicability of our technology as demonstrated in our clear to part growth strategy first we are reinvigorating our direct to employer business building on our position of strength as the market leader second.
We are expanding our addressable market by building, new and durable revenue streams across the broader ecosystem, starting with serving health plans. We believe this expanded strategy for platform monetization will benefit all of our stakeholders and our work over the last two quarters positions us well for 2020.
I'll begin the call by reviewing our primary achievements in the fourth quarter, and then share our 2020 priorities afterwards, I will turn the call over in a well who will review our Q4 financial results and outlook for this year.
We ended 2019 with annualized recurring revenue or air are of a 147 million, which exceeded the 140 to 145 million target range. We shared with you in October era I reflects the expansion of the anthem agreement, we signed in October and improved renewal activity in Q4 relative to plan.
We are encouraged by the air our results and we're also excited to share a number of other areas of tangible progress in Q4 first we reached an important milestone by completing all customer migrations off at the legacy wellbeing technology and onto our single stock Castlight platform. This is a key financial and operational.
Milestone as it one reduces our cost as we will no longer need to support to tech stack to enable us to reaccelerate our piece of innovation and three allows our employees to turn the page and move forward as a strong unified team second we successfully launched the first pilot of our high touch offering.
Like care guides in November when they Fortune 500 manufacturing company and Kathleen complete customer as a reminder, Catholic care guidance is our high touch offering that leverages our platform to provide personalized support to members who have complex needs are simply require more assistance and navigating barriers to care.
To date, we've seen strong early results with demonstrable user impact, including multiple examples of our ability to support users in resolving billing errors.
Pair guides leverages, our deep data infrastructure and AI enabled personalization to predictor users next best action and that's deliver high touch navigation, that's targeted and cost effective alongside Castlights engaging digital app experience because this offering it's an extension of our existing.
Form we are uniquely positioned to offer high touch services, while maintaining our long term gross margin profile employer demand for navigation continues to rise, but the national business group unhealthy latest report showing that employer use of these services, it's expected to grow from 39% in 29 team.
60% and 2020, we're on track to make this new service generally available in Q3 and have enabled our field teams for the sale season.
Third we met our goal of hiring an experienced commercial leader by the end of the year. This was a critically important hire that we needed in place to lead our 2020 gross efforts given the seasonality of our business I'm excited to say, we hired our leading candidate and in December we welcome to keep Reynolds as our new Chief commercial officer, He's leading.
Both our sales and customer success functions, which unifies the management of our two key a our our drivers new business in customer retention under one executive.
Keith brings 25 years of health care sales and customer success experience from leadership roles at Cvs Health and no serving most recently as vice President of Health plans and market strategy at CBS. In addition to abroad sales and account management responsibilities. He loved the commercialization of many digitally focused.
Plan solutions wallet CBS and also drove growth at a smaller company gearing Caremark's early days Keith is known in the industry. Its but it's an experienced an accomplished sales leader keeps chose castlight because of a belief in the market and his assessment the Catholic pit that says both the strongest technology and team to attack this Albert.
Unity.
Keith kicked off the 2020 selling season with our sales kickoff event in January where the team much trained and certified a new messaging demos and sales place Keith is partnering closely with our newly promoted SVP of marketing Tomorrow Redneck, a six year Castlight veteran who serves most recently as our bps product strategy and.
Analytics tomorrow is well positioned to leverage or deep knowledge of our buyer our market and our product to support Keith and returning the company to gross tomorrow was instrumental in both defining and bringing complete to market her experience, leading analytics will be particularly valuable as we seek to leverage more proof points in our go to market Moshe.
Ian.
In addition to the kinda like care guidance pilot and the significant enhancement of our commercial leadership. We continued our work on the necessary infrastructure to drive more value improve operational excellence and develop deeper relationships with our customers end users.
During the quarter, we continued to build out of our customer center of excellence in Salt Lake City and are on track to open our permanent office space. This is a great example of the team's ability to execute on a new initiative in a short time frame to reinvigorate our employer business.
Fourth we made further progress on our strategy to unlock new growth factors, starting with health plans, there's a clear opportunity to leverage our technology to support health plan and improving health navigation for their members and anthem provides a powerful proof point of our ability to effectively partner with health plans and our last call I discussed our worked.
To establish the team the go to market plan and the pipeline in Q4, we built on this foundation and have progressed from meetings the active proposals with multiple health plan prospects.
The three areas, where we are having the deepest discussions are the full navigation platform transparency and personalization transparency has been particularly top of mind, including provider directory provider quality, scoring and value based networks are white label to navigation platform, coupled with the ability to and better functionality.
Until clamp user experience allows us to meet the health plans, where they are on their technology journey as we kick off the new year I'm energized by how far we've come in two quarters.
For 2020, our priorities are to build on these early successes, we're focused on four goals.
First we will continue our work to revitalize our direct to employer business the leadership, Keith and our extended team are critical to executing on the fundamentals to enable improved sales and retention. We have spoken about the need for operational excellence credible value continuous innovation and strong relationships to support a healthy.
Okay business, we are taking concrete actions against all of these levers, including a significant shift in executive engagement in both sales and retention with tomorrow stepping up to lead marketing a new leadership in our analytics team, we are well positioned to support Keith and his team with refresh messaging collateral and most.
Certainly clear demonstration of value. We are also entering the year in a stronger position with over half of our non anthem book of business now Uncomplete.
Our second goal is to build on the early success of our translate care guys pilot and make the offering fully available in Q3, as we deliver the product and introduce it to prospects and customers. What we see I'm here in the market supports the National business Group on Health case study, we have seen significant interest in digital and high touch services with some.
Prospects viewing high touch as an attractive add on capability post watch. We believe we are uniquely positioned to address the hole in the market freight cost effective digital plus high touch solution.
Our third goal is to sign at least one new health plan customer deal in 2020, well sales cycles. Here are typically 12 to 18 months, we are moving concrete opportunity through the pipeline. We are in a much stronger position with our help Clinton go to market and we were at this time last year due to a dedicated team developing pipeline and proof point of Rx.
We ended anthem relationship we expect to continue partnering closely with anthem to ensure we deliver value and innovate with our engage customers. While also adding new membership to the platform.
Our fourth goal is to maintain gross margin and improve our operating loss profile as compared to 2019, we're making investments in Catholic care guide given the value of high Tech plus high touch navigation and the employer market that said, we expect to see cost saving from the completion of our Salt Lake City office, an R&D efficiencies.
We believe we can invest in growth, while reducing our loss in 2020.
We're excited to turn the page on 2019, and begin 2020 with optimism and urgency looking back I'm proud of what we've accomplished since July we delivered on our promise to expand and extend our anthem relationship jump start a new health plan sales initiative deliver real product innovation and enhance our executive leaders.
Looking forward, we will use this progress is the foundation for 2020, we have more work to do to fully change the trajectory of our business, but I believe we have the right team in place the strongest product in the market any visible path to return the company just sustainable growth.
I want to thank the entire Castlight team for rising to the challenge in 2019 and jumping into 2020 with pride and purpose I'll now turn the call over to well, who will review, our Q4 financial results and 2020 outlook well.
Thanks.
Good afternoon, and thank you for joining us today or fourth quarter's financial results reflect continued progress in investment associated with our second half priorities, we drove sequential way our growth and improved the stability of our customer book, well, making targeted and careful investments in the right leadership technology and infrastructure to accomplish the strategy may have just outlined.
Reinvigorate, our direct import business and begin penetrating melphalan market.
Annualized recurring revenue or therefore totaled 147 million at year end up 10 million sequentially from Q3.
This increase was principally driven by the incremental air are from the October anthem Enterprise license agreement and improved execution on renewals in Q4 relative to plan.
As a reminder, Q4, the seasonally light sales quarter in a heavy renewals quarter.
Well churn as a lagging indicator, we believe the improvement on renewals against our expectations was driven impart by the strategy discussed in Q3 deliberate incredible value continued innovation and deeper partnerships with our employer customers.
As we made progress against these principles, we did sign a small number of customers to short term extensions in Q4 and enable us to continue our renewal dialogue with them into Q1.
These renewal discussions are ongoing and their outcomes will be reflected in air or at the end of Q1.
We ended the year with net dollar retention or NDR of 94%, which includes the substantial impact of our anthem. When do you want expansion in October.
None of the impact India would have been below 80% range and consistent with the level, we saw a year in 2018.
Looking ahead to 2020 renewals were encouraged that 75% of air our is associated with direct Catholic complete orientation.
As we said in July we do believe our point solutions are still at risk of elevated churn. However, they now account for only one order book and we expect them to benefit from the investments we've discussed around retention.
Revenue was 36.4 million in the fourth quarter and 143 million for the full year 2019 inline with our annual revenue guidance range of 140 to 145 million.
Subscription revenue accounted for 95% of total revenue and was inline with our plan.
Q4 revenue included approximately <unk> point 9 billion of nonrecurring revenue related to the end of customer contracts and performance guarantees as you may recall, we had a similar dynamic in the fourth quarter 28 gene with 1.5 million of nonrecurring revenue and in Q4, 2017 1.5 billion of nonrecurring revenue.
Professional services and other revenue exceeded our expectation due to higher levels of wellbeing users redeeming instead of points for gift cards in the fourth quarter using the rewards center feature.
Well this activity is not our core product offering or business focus user redemptions generate revenue for Castlight, that's net of the gift card cost and fulfillment.
In Q4, we saw higher than expected revenue associated with these redemptions, which we believe was due in part to improve stability from replatforming and well being customer migrations and by seasonality in the business went into your spend at lunch now, let's turn to our fourth quarter non-GAAP financials fourth quarter non-GAAP gross margin declined to 58% driven by a one.
9 million increase and the cost of revenue.
The increase was primarily driven by onetime factors first the write off of amortized special services fees for terminating customers and second the investment in our you talk customer center of excellence.
In 2020, we expect to return to the gross margin levels, we discussed on our prior call mid 70, percents subscription subscription gross margin and those 60% total gross margin.
Non-GAAP operating expenses totaled 29.2 million, which include a nonrecurring write off of amortize Commission expenses sales and marketing associated between 19 terminations and an uptick in DNA due primarily to executive recruiting expenses as we built out achieved.
Based on these factors fourth quarter non-GAAP operating loss was 8.1 million generated 4 million in cash from operations in Q4 and ended the year with approximately 60 million in cash marketable securities essentially in line with our expectation.
With that I'll now provide our outlook.
I had mentioned 2020 will be a Europe continued transformation for Castlight and we are focused on ensuring our resources are deployed efficiently to achieve our strategy and return castlight sustainable gross.
In terms of our 2020 financials. We currently expect revenue in the range of 130 to 135 million.
Non-GAAP operating loss between 17 million and 22 million.
Non-GAAP loss per share between 12 cents per share and 15 cents per share based on 150 to 151 million shares.
The revenue guidance reflects first the impact of the new anthem Enterprise license agreement, which became effective with ratable revenue recognition on January 1st.
Second 2019 terminations, becoming effective in 2020 answered fewer than 20 my team direct employer sales for 2020 launched age.
Given our new Afton relationship does not tied revenue recognition to claim launches and our 2019 sales were light we do not expect to see the revenue grow sequentially in each quarter over the course of the year that we've seen historically.
Given the investment in are you talked customer center of excellence and the initial deployment of Castlight care guides, we expect total non-GAAP gross margin to be below 60% range with subscription gross margin remaining in the mid 70% range for the full year 2020.
In terms of non-GAAP operating expenses, we currently expect sales and marketing to be within its long term target range of 20% to 24% of revenue.
While R&D will remain above our 20% to 24% target range, we expect to see at high single digit percent reduction in R&D expense on a dollar basis year over year, partly driven by the elimination of the Jeff platform.
We expect you need to be up on a dollar basis versus 29 gene, reflecting continued cost of security compliance investments in operations and talent acquisition.
We expect cash used from operations to be in the range of 12 to 17 million and expect to in 2020 was more than $40 million in cash.
As with 29 cheap we expect to see net operating cash flow use highest in the first quarter.
As we've mentioned we are focused on aligning our resources against key strategic priorities that we weren't turn calculate to gross we're proud of the efforts of the past six months and our team is hard at work to execute further in 2020 on behalf of our customers and our shareholders operator, we'd now be pleased to take questions.
Certainly to ask a question. Please press star one on your telephone keypad. The first question comes from Jeff Garro of William Blair. Please go ahead, Sir your line is open.
Thanks, and good afternoon. Thanks for taking the questions first of all I'll ask about retention.
Sounds like retention somewhat improved in the fourth quarter and there's been some positive events over the last seven months. So maybe you could help us set expectations for retention in 2020 and describe what's different about the retention conversations first let's say a year ago.
Sure Hey, Josh Thanks for the question. So you know as will mentioned, we're pleased to be said in a position, where we have 75% of our customers on a health navigation solution versus last year. We were in the mid Fiftys and all of that said you know we've said before churn is a lagging indicator and with 25% on installations, we want to be pragmatic.
So we're continuing to lift him elevated churn.
That said, we are confident we're taking the right that's and that our rate of attrition is going to decrease over time and to your point most of the things that we put in place.
Certainly contributed to Q4 and stick extensions that we talked about so you know we've said our principles around having a healthy book of business include operational excellence deliver incredible value continuous innovation and having relationships at every level at the organization and we've done really concrete things against those.
So recently, we put out a press release on our complete.
Result, which had been extremely well received by our customers in the market both from a methodology on Brazil point of view, we also shared.
The last call that we're going to include customers on customer Council and we now have close to 50% of our direct a are participating and then we've really transformed the level of executive engagement and a lot of that has been under keeps leadership. So a lot of things look pretty different India's retention conversation.
We do think we're positioned to improve.
Great that help from maybe a follow up just to clarify on the short term extension or are those clients that bid on point solutions or are they clients that are are complete and are looking at the results an outcome and engagement of their clients I need any common thread among those they're signing short.
Term extension.
Yes, absolutely it's a it's a good question. Thanks for the question as you think about those claims that sign short term extensions a small number of them at the end of the year, where we were able to engage them with distract you may have outlined the vast majority of that.
Our R&D clients are on point solutions and so we do think there is elevated risk of churn in that book, even as we've been able to bring them forward in the conversation.
Because they are on when solutions.
Got it.
That's it for about the.
Paul number of deals you mentioned signed in Q4 I know, it's typically a seasonally.
Seasonally light quarter, but was wondering what were your whether those deals were competitive or not and maybe a little more color on why they chose castlight and and what type of expectations or performance metrics that.
That you need to achieve with the new business that you've signed I know you guys had been I've seen emphasizing more of a partnership relationship. So curious how that's involved in those new customer wins.
Absolutely I'll quickly answered that the numbers and then I think may probably has a lot more data on the market. I'm Q4 is heavy renewals quarter light sales quarters, you mentioned and so we were on plan with our direct sales relatively small number of customers, but happy to be on plan and the majority was were competitive situations and so maybe.
You can kind of weigh in on the broader market and what they're looking for sure. Thanks, Jeff. So these were actually hyper competitive deals and they were competing act we are competing with effectively everyone in the competitive ecosystem and I think that what differentiated us was actually the complete offering and the willingness to part.
Sure.
And I'm speaking she has some of the larger deals specifically.
But I think the ability to cover the full tear spectrum to do it in a personalized way and frankly, the technology that we're developing from a high touch perspective.
Played a big role on the dialogue as well.
But very competitive deals and complete was really what got those across the finish line.
Great that hope for one more for me just to hit on the Guy as we've talked about retention, which has historically been does have the biggest driver if any variance and intra year performance versus the guidance, but I want to give you the opportunity to the call it anything back it out to that.
The lead to variants in your performance in 2020 versus the guidance that you just outlined.
Absolutely, Jeff first I'd say 2020 will be a year and transformation for the business you heard that and made his prepared remarks and given that we've taken a.
Agnostic approach towards setting expectations for the business financial outcomes, we understand can lever in a position where we need to earn trust as you think about the pieces that could oncologists challenger kind of.
Maybe wouldn't hit the guidance what could go wrong.
You know real element that could and has gone wrong in the past is the in period.
Churn or terminations, where customers have given us notice in the course of the year looking into 2020, though we benefit from the an agreement and the ratable revenue recognition there that solidifies a tremendous portion of the revenue.
We don't have a number of imperium launches. So we really feel like you know in periods churn is beyond our expectations resource downside, but there were poised to execute against those expectations and as you know manage that no pragmatic way.
And then.
I know launches typically don't occur in year, but anything that could lead to upside from the guidance.
You know there is.
You know, there's always a small number of launch activities or or changes that happened in our business as our clients make acquisitions or.
Add membership and the like and so there is some upside incorporated there but in general.
We entered the year with a pretty clear view of.
The air on conversion into revenue and that's especially true. This year, given frankly are relatively light 2019 sales that mean, we have fewer in your launches then we might have had in years past.
Your next question comes from Charles three of Cowen. Please go ahead. Your line is open.
Hi, James on for Charles can you give us some more color probably to the health plan strategy.
The feedback you're getting from health plans and what the pipeline looks like.
Sure Hi, Dan.
I would love to talk about I said this is one of the areas, where we made the greatest progress in the second half is easier said than July we put in place and experience. We are dedicated team we totally refreshed our go to market process and as he mentioned felt the pipeline.
Of the reasons, we've been able to me as quickly as because the strength of the technology and product and the fact that that's been validated by our against them. A partnership. So you know what we've seen in the pipeline is not a lot of momentum in interest and over the course.
The next month, we started doing deals down the pipe into active proposals, which is effectively why we're optimistic that we can achieve our qualified health plans deal and at 20 funny.
And you talked about subscription margins being pressured going into Fourq you given.
But it looks like professional services costs for maybe a bit higher than we were expecting.
Anyway related and how should we think about that going into 20.
Yes.
It's not an all related frictional services costs are typically high and had been higher in the fourth quarter. Because one one is a heavy launch cycle for us.
And so as you think about 2020, we expect professional services costs to kind of return to where they've been are actually decreased it plays that we expect.
Frankly, a little bit of margin degradation and the first in first quarter related to your child care guides is that is the subscription line cost of services costs. The subscription we do expect though and we talked about his prepared remarks that.
Margins to into the year on the low sixtys on the total gross margin in mid seventies and the subscription side.
Okay, great and.
The total number of customers.
In Fourq.
Yes, we ended the year in lines with our plans on customer account.
Given the new anthem Enterprise license agreement, which goes into effect on January 1st.
We really believe that a RMR is the best Ford measure of our business and plan to disclose and talk about air are going forward.
But you can you can know that we ended the year, where we said we would it in Q3 on customer count.
Okay, great. Thank you.
Your next question comes from Brian Hoffman of Canaccord Genuity. Please go ahead. Your line is open.
Hey, Thanks for taking my question. This is Brian on for Richard close.
Can you just remind us on the go to market strategy for care guides will that be sold as a standalone product for new customers or will it be more of an upsell to existing customers or could it be a combination of both and then specifically with respect to the fortune 500 manufacturing customer you mentioned.
Is that a new or existing customer.
Hi, Brian Thanks for the question, so kind of take a step back for care guides you know the overall strategy is that ultimately extending the technology to enable high touch is going to allow us to deliver more value to our users and buyers and since announcing this I think thats become even just more apparent that that thesis is really.
Playing out in the market just from what we're seeing from both interest and then the pilot so to answer your question directly it's available to both new customers as well as existing customers and the pace of the pilot it was an existing complete customer.
And you know what we're observing and learning never that's no. The thesis here was that the technology and the investments. We've made there would allow us to really have a head start in building the solution.
Specifically, our personalization engine and so far that's really kind of been born out in the pilot.
Great. Thank you.
And then I know, you're only giving guidance for 2020, but can you give us your thoughts around timing as to when you expect to turn back to positive non-GAAP operating income is that something we could see and 2021 or is that more of a 22 of them.
[noise], yes, absolutely.
Brian we're focused today on 2020, and maybe just talked about the transformation underway. The last six months, what we've accomplished and what we're focused on doing this year. We are both committed bhavan I very committed to returning to business to sustainable growth. That's a core focus of ours, but we're really focused on 2020 laser focused on getting there today.
Great. Okay. Thank you and then last one for me can you quantify in terms of they are RV amount of about the point Phusion contracts. That's on the short extension in Fourq you.
Yeah, absolutely I can give you some help there so as you think about.
The fourth quarter, we ended the year at a 147 million, we had talked about a range of 140 to 145 million as being our expectation.
If you exclude those short term extensions, we would have ended toward the high end of the range. So you can think about point solution based in that range.
Thank you very much.
Your next question comes from Steve Halper of Cantor Fitzgerald. Please go ahead. Your line is open.
Yeah, just a follow up on the previous question, so what you're saying is that your.
Assuming.
Right.
With.
That.
The dollars.
The clients that.
Im extensions.
I think we'd say that we're very pleased to have engage these customers and the conversation made strategy around value return to innovation partnership is is starting to pay off.
But we do know that some of these customers will choose to renew with us some well churn or will renew but at a degradation price and then for in the course of the first quarter.
And is there an expectation for.
Yeah.
At this point.
<unk>.
Yeah.
Yes, we only provide guidance on our reported financials error as a key metric, but but there is no kind of forward view of that.
And then the last question going forward.
Continued to disclose the number of customers.
With that.
Given the anthem relationship is you know, 45% or some of our air our and.
Customer count is not relevant there and we expect health plans to contribute in similar ways going forward.
We don't believe that customer counts material indicator of the Ford business, and we would point you to era.
That's fair thank you.
<unk>.
Absolutely.
Your next question comes from team that Mannheimer of Dougherty and company. Please go ahead. Your line is open.
Thanks for taking the questions.
So we'll have two key drivers in delivering a are above the top your range this quarter.
From the agreement and the renewal activity it sounds like from your prior comment that the greater contributor to the over attainment was the renewal activity that is that for where they roughly balanced how do we think about that.
Yes stepping back there were kind of three pieces there the anthem enterprise license agreement kind of unplanned direct sales and then the improved performance relative to plan on renewals.
What I would say is that the range. We provided was one when we knew the impact to be anthem Enterprise license agreement. We signed an October in fact, we signed at prior to our Q3 call and talked about it then.
So as you think about our performance relative to the range. It really is a function of of renewals, but I want to be clear that the had some impact itself was a meaningful portion of that.
The Air Art.
In Q4 sequentially growing over Q3.
Sure makes sense and in terms of the 25% of the of the installed base that is still on point solutions and I guess, you know exposed how should we think about that going forward. I mean would you know we take the middle ground and say half will convert or.
Third we will convert at any color around that.
Yes, Hi, Jamie I think for the question I mean ours our strategy on the point solutions in many cases is to get them onto the navigation solution and as we talked about executing against those principles a number of the reasons that those renewals extended is that they are considering navigation and broader solutions.
And so you know I think that with all of those.
Our strategy that we're implementing against those principles is having an effect, we still feel better if they were on the navigation solution today.
Okay.
Thank you.
There are no further questions at this time I will turn the call back over to see Oh nave o'meara for closing remarks.
Thank you for joining us today, we're excited to continue the transformation 2020 and look forward to updating you on our progress have a good evening.
This concludes today's conference call. Thank you for your participation you may now disconnect.
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