Q1 2020 Earnings Call
Ladies and gentlemen, please remain on your lines for the first quarter 2020, Shutterstock, Inc. Earnings Conference call will begin momentarily once again, the first quarter 2020, Shutterstock, Inc. Earnings Conference call will begin momentarily pleased remain on your lunch break.
[music].
Ladies and gentlemen, thank you for standing by welcome to the first quarter 2020 Shutterstock.
<unk> earnings Conference call.
This time, all participants aren't to listen only mode. After the speaker presentation, there will be a question and answer session jazz.
To ask a question during the session you will need to press star one on your telephone.
Please be advised to today's conference is being recorded if you require any further assistance. Please press start zero.
It is now my pleasure to introduce senior Vice President General Counsel in corporate Secretary Howdy Garfield.
Thank you operator, good morning, everyone and thank you for joining us for Shudder stocks first quarter 2020 earnings call.
Joining me today stamp have laski, I, Chief Executive officer injured game and Chief financial.
Please note that some of the information you know here during our discussion today will consist of forward looking statements.
Including without limitation be impacted.
Long-term effects and our investments in our business the future success in financial impact, if new and existing product offering.
Gross margin and profitability, our long term strategy and our 2020 guidance.
Actual results for trends can different materially from our work.
For more information please refer to today's press release and airports, we file with the S.B.C. from time to time, including the rich doctors disgust enormous recently filed quarterly report on from 10, Q. and our annual report 110, K. filed with the Securities and Exchange Commission.
We'll be discussing certain nongaap financial measures today, including adjusted either die adjusted even done margin adjusted net income revenue growth, including my distribution channels on a constant c. basis and free cash flow.
Conciliations and these non got measures must directly comparable got measure can be found in the financial tables included but please press release, which is posted on the Investor Relations section of our website find me. Please refer to the brief information definitely posted on our website that contains supporting materials for today's call and now I'll turn the call over distinct.
Thanks Heidi.
Everyone and thank you for joining Shutterstock first quarter earnings call and my first call a C.E. out.
I hope everyone is keeping safe during this period.
As a memorable and turbulent times to be picking the helmet shutterstock and I'm grateful that the management team energy level employees are up to the challenges that lie ahead.
I'm truly excited to begin this journey of Shutterstock see out we have in front of that's a tremendous opportunity to leverage our content marketplace platform M. leadership position with focused execution around innovation content services and data and insight in order to deliver strong returns.
Shareholders.
I want to be getting my remarks by thanking all of our Shutterstock employees.
Concern has and continues to be the health and wellbeing of our employee population.
We are following local government guidance in implementing mandatory work from home policies and our employees effectively transition to working remotely and have been incredibly dedicated and focus during this time to offer continuity.
Service to our clients.
Through this transition shutterstock separation I've been functioning normally and we are able to serve our clients without disruption.
Our technology infrastructure.
Customer service operation.
Content review function.
Yeah marketplace operations are functioning business as usual and are able to respond to the business needs that we got.
I would also like to thank sugar stocks contributor community.
Capturing touching and impacts the visual stories to showcase for global nature, and the crisis that we aren't.
Their content portray the heroic efforts first responders in countries in cities around the world as well the complexities of daily life during that time with social distance.
For example for what dark David from India, and Vika photo from Spain contributed strong image in video content illustrating the local impact on their communities to Shutterstock.
Allowing our customers to visual we highlight how we are living during this challenging time.
Like our contributor community as a business we remain resilient an optimistic despite these on certain time.
In the market demand perspective, we have seen variances on a country by country basis, that's productivity in regions across the world is impacted by the trajectory of the pandemic.
Overall, our first quarter 2020 revenues of 161.3 million declined to 1% from last year.
The Asia Pacific region, which suffered early declines in January and February is optimistic we showing signs of returning to normal levels growing approximately three per cent in the quarter on a year over year basis led by strong performance in Japan and China.
Revenues from the European region decline, 3%.
Driven primarily by 10% euro per year decline in March specifically, driven by performance in the UK, Italy and France.
Little revenues in the Western Canada declined one per cent got a quarter and 5% in the month of March.
Europe in North America, or seeing some signs of improvement in April.
Character the March sequence.
[noise] are adjusted in the first whoever was 22.1 million.
Presenting a margin 13.7%.
Committed to cost management and margin enhancement and investors should expect to see the benefit of the actions. We are taking over the course of the year.
This will require at times incurring expenses as we we align resources her back in some areas and invest for growth in others.
Tampa, we record in a 2.3 million <unk> in the corridor that is included in our adjusted EBITDA.
From a chairman perspective, we are seeing a larger impact on our enterprise channel that's compared to E. commerce in the current environment.
The enterprise channel as expected experience, but down order of rabbit.
Which was exacerbated by cope with 19.
This was upset by performance any commerce, where we saw increased customer engagement and he downloads you're over a year.
This is a critical time for businesses as they shift the way they market their products and services and try to communicate with customers and reach new audiences.
Pandemic has also but significant digital transformation initiative man, among small and medium businesses around the world.
They're just they're offering am communications to be available online.
Last summer areas of advertising spending has been impacted 30% to 50% due to the reductions in campaign volumes, we have not experience that type of them.
Partially due to the right range of use cases for chunks box concept.
From global web sites to streaming video on demand service and part caps.
<unk> customers need to continue marketing their products and services.
We are seeing even a greater variety of use cases for our wedding teams concept and creative services.
Businesses accommodate for new budget guidelines as well as the new mode of working from home and social distancing policy.
We are working closely with our clients to deliver the customer products and services. They need at this time and will continue to innovate and with our customers.
They address returning to work in the upcoming days and months.
Why we address the effect of the global pandemic on our customers and our business. We are still committed to continuing to invest in our people and business in order to drive grow.
First I want to highlight to strategic hires what we made it to the executive team.
In the past quarter I'll be much neck, as chief product officer, and Jamie often as chief revenue opposite.
I'll be is a true entrepreneur an innovator at heart.
He comes to us after selling his player company to work wealthy and it's highly experience from the creative and marketing software ecosystem.
Addition to making improvements to work for marketplace. We look forward to hobby generating additional product ancillary services buckwheat, new revenue streams and reinvigorating shover stuck with the innovation culture that drove the Genesis of the company.
Jamie leaves are enterprise sales team and as a season sales leader with extensive experience successfully building and growing world class enterprise sales teams.
S.P.V. digital social Programatic and over the top and media.
<unk> Jamie's arrival, we are further along in the Salesforce realignment of we started six months ago.
We believe the current environment would be an opportune time to at key additional strategic sales talents under Jamie as we continue to optimize our sales and client service teams by geography and customer segments.
We believe there is a tremendous <unk> opportunity to optimize our global market packaging and deliver.
Some sweet of services to our enterprise clients, including custom content an editorial services.
I'm committing to growth of our business last quarter I discussed with three pennants, but I will be focusing on a shutterstock C.L. They.
They are.
Innovation that enhances our customers work flow content that is relevant them fresh data and insights that drive performance.
Since then our team has begun revamping our product vision and road map to deliver new applications and tools that will deliver improved work flow productivity and purchasing flexibility to our target audiences.
So far innovative thinking <unk> to execute has allowed us to bring valuable and relevance services to market quickly.
As an example, we've expanded our partnership with works an A.P.I. partner since 2014.
Over the years, we have responded to wickes's needs to make fresh content available to our customers. When this quarter content with further integrated into reading which spot.
Specifically video consumption has skyrocketed. During this time, we integrated into their video editor to allowing their users to quickly create videos with relevant content.
Furthermore, are innovative and customer focus thinking has extended beyond technology.
Supportive fire strong financial position in this difficult time, we are extending support to our clients and flexibility on payment terms, that's one way to demonstrate our commitment not just the growth of our business, but also the wellbeing of businesses that work with us.
As we haven't done in the future of Shutterstock and the final product vision I remain confident that we are rough position to expand on our current O'neill evaporates and to find ways to better aligned with key trends to capture compelling new opportunities.
Lastly, before handing it over to Jarrett for detailed financial written you I want to re emphasize the strong position <unk> financially to be able to whether this storm and continue to serve our clients while investing in the long term success of the business.
Today, we have no debt and close to 300 million of cash.
Dividends continues and we plan to stay the course with our barracks strategy shareholder capital allocation dividends share repurchases M&A.
And now I'd like to turn the call over to Jerry.
Thank you stand and good morning, everyone.
<unk> I'd like to Echo stands comments regarding our employees mobilization efforts to stay safe and comply with stayed home borders and that we continue to meet the needs of our customers and contributors.
Stock is very resilient, we have a strong business model with positive cash flows and healthy balance sheet with no debt and close to 300 million of cash.
I'm the last call I commented on how impressed I was with the Shutterstock team and product offering.
That view, it's been validated over the last quarter and make certain it continues as they see tremendous opportunity to leverage our financial strength for longterm success.
And now for the financial results for the core.
Rubber you declined one per cent in the first quarter compared to the prior year on both the report is in constant currency basis.
R.E. Commerce channel increase 2% to 99.7 million as compared to the first quarter of 2019.
Enterprise channel, rather you decrease 6% to 61.5 million.
As we had communicated last quarter, we expected negative euro for your enterprise results in the first half of 2020 as we are in the midst of hiring q. sales personnel and continuing with our sales force realignment.
However, we're also seeing the results being further impacted by slow down and customer activity due to cope with it in March and continuing on in April.
These impacts are very significantly on a country by country basis.
Largest degrees of Unfavorability being seen I stand previously mentioned in the UK, France, Italy.
And the strongest performance in the major Asian countries that seemed to have recovered quite quickly.
In terms of our margins for the first quarter of 2020 or gross margins were 57.1% Downs 50 basis points from 57.6% and the first quarter of 2019.
This decline is primarily due to 1.1 million of severance charges recorded in cost of revenues, which unfavorably impacted our gross margins by 70 basis points.
On a sequential basis are gross margins increased 30 basis points from the fourth quarter of 2019.
Sales and marketing expense was 26% of revenues in the first quarter of 2020 as compared to 27 per cent in the first quarter of 2019 and 28% in the fourth quarter of 2019.
The fever ability in sales and marketing expenses is due to an increase the level of scrutiny and our performance marketing spend as we secured a tight metrics or and marketing return on investment.
Accordingly sales and marketing expenses decreased 1.8 million from the first quarter of 2019.
Sequential basis 4.5 million from the fourth quarter of 2019, as a result of lower marketing headcount costs.
Product development costs were eight per cent of revenue in the first quarter compared to nine per cent in the first quarter of 2019.
Our product development expenses are native capitalized labor, which was reported within fixed assets on our balance sheet.
The fever ability and product development on Buffy your every year and sequential basis is due to encode expenses in 2019 for the consolidation of our technology.
<unk> of our technology debt and our migration to the cloud. These expenses did not be occur in 2020.
G.N.A. expenses increased 4.1 million and a quarter and we're 19% as a percentage of revenues.
Purchased 16% in the first quarter of 2019.
The G. They increase is partially attributable to investments, we made or cross cyber security data science and analytics and technology last year in 2019.
Also included in G.N.A. and the first quarter was 1.2 million of severance charges and accelerated stock based compensation and your for your Unfavorability and bad debt expense of 1.3 million.
Sequentially G.N.A. expenses increased 4.2 million from the fourth quarter of 2019, driven by higher non income tax expense and the severance charges noted earlier.
We do expect G.N.A. expenses, excluding severance trend lower throughout the course of 2020, both as a percentage of revenue as well as a nominal terms as we continue to reduce costs.
Adjusted EBITDA margin declined to 13.7% in the first quarter of 2020 compared to 15.6% in the same quarter of 2019.
Adjust city, but don't includes 2.3 million of separates expense, which impacted margins by 140 basis points.
As we continue to reduce headcount costs two line more closely with revenue growth, we expect to encourage additional severance expensing cue to which we currently estimate to be $2 million.
Gap net income in the first quarter was 4.3 million were 12 cents per diluted share.
Adjusted net income was 9.2 million or 26 cents per diluted share for the first quarter of 2020 as compared to 12.4 million. We're 35 cents per diluted share in the first quarter of 2019.
Turning toward balance sheet and cash flows at the end of the quarter. We had 296 million of cash down from 303 million at December 31st 2019.
The decline and cashing shoe one was expected with the pay out of the 6 million dollar dividend.
Payment of annual performance bonuses in March.
As well as an 8 million dollar for an L.P.N. been associated with a prior acquisition.
Are free cash flow was 6.5 million in the first quarter compared to 11.9 million into one of 2019.
Free cash flow calculation exclude the earnout payment made in the first quarter.
Year for your reduction in free cash flow is due to working capital changes due to the timing of vendor payments and slightly lower business volumes.
[noise] or deferred revenue balanced declined to 138.9 million from 141.9 million December 31st 2019.
The change in deferred revenue predominantly do do our enterprise business, which is not yet shown accelerated bookings in 2020.
Continue to rebuild the enterprise sales team.
In terms of capital allocation of legal pair next quarterly dividend of 17 cents per share on June 18th 2022.
Quarterly dividend equates to an annual 1.7% yield on our current stock price.
Should the lower revenues, we'd been experiencing in the past button continue.
Even without a rebound our cash flows are such that are dividend as comfortably supportable.
As previously stated we plan to grow the dividend in line with earnings growth and will periodically the re evaluate the pay out based on our cash flow profile, an alternative uses of capital.
While we did not execute any share repurchase is against or 100 million total authorization and Q1, we maybe in the market over the next several quarters and look to capitalize on weakness in our stock, particularly with the volatility that the broader market has been experiencing.
With respect tore Emoney strategy were actively looking assets and we were in a great position to capitalize on the current distress in the market environment.
It's private market valuations come down in line with public market valuations and capital becomes more scarce, we have the ability to provide willing sellers certain p. to close without finance and contingencies will continue to be disciplined as we evaluate M&A opportunities and ensure that we have the ability to integrate the acquisition.
Ones and that'd be a present compelling industrial logic and strategic fit for shorter stock.
As we noted in our earnings release. This morning, we are we're sending our previously provided guidance.
I'd like to provide a few comments now andreas sending that guidance and what color. We can provide annex expectations around go forward performance.
The guidance is intended to provide insight into our annual performance with a relative degree of confidence.
We have a very resilient business and while we're confident nor ability to manage through this cycle and leverage restaurants financial position revenue generation is dependent on our customers ability to operate in and withstand the current environment.
Uncertainty around the severity the duration of the impact of the cope with 19 pandemic to our business has resulted in forecasted revenue will arrange it but we believe or two significant and lack the precision needed for guidance to be meaningful to investors.
After discussion with our board standardize concluded that the company should end is withdrawing its previously announced 2020 guidance, we continually manage and forecast our business and if and when appropriate given the current environment, we will consider providing guidance in the future.
While there's too much uncertainty for me to comment on our expectations for the full year 2020, rather use I can provide some insight into what we're experiencing in the last few months.
Our revenues declined hi single digits in percentage terms in each of March and April on a euro for your basis, which we believe is predominantly attributable to the impact of covert 19.
The decline is the weighted average impact across our sales channels, including E. commerce in enterprise and the 150 countries resurface, many of whom are impacting more severely than others I.
I would note that we have seen somewhat of a gradual improvement from those levels. The last couple of weeks of April and there are positive recent trends that we are seeing.
The timing of went our revenues return to the normalized Runrate, we experienced in Q. for 2019.
Single largest variable in forecasting or 2020 revenues.
At present.
Late March and April readied friends persist for the remainder of the second quarter, we would expect our revenues to be down hi single digits Euro for a year in Q. too.
With the current revenue uncertainty, we've been making strong progress and ensuring that our costs are aligned to our revenue generation.
We've been taking concrete actions on our previous plans to manage G.N.A. costs as well as further reducing our cost of technology and outside vendors spend in order to optimize our margins.
Well, you're monitoring return on marketing investment closely and are also naturally seeing expense reduction is from the travel restrictions expenses such as marketing events in conferences.
These expenses travel and of course T.N.E.
With our discipline around costs, we hope to achieve our <unk> margin targets for the year that we <unk> to last quarter. Despite the revenue softness.
He didn't achieve the margin expansion, we targeted at the beginning of the year.
However, I would emphasize that our ability to do this will depend on when we return to the queue for 2019 Runrate during the course of the year.
Regardless of when we returned to normal revenue volume's I would emphasize that shutterstock is still generating meaningful operating in free cash flows and we do expect you do so for the remainder of the year you been absent returned to normal business volumes.
<unk> energized isn't management team to whether their current storm come out stronger on the other side.
Stocks businesses resilient, we are taking the requisite steps to reduce costs to mitigate the impact were profitability and pressing forward with our capital allocation plan to shareholders.
We appreciate your time today and thank you for joining US operator, we'd now like to open the line for any questions that industrious may house. Thank you.
Certainly as a reminder to ask a question you will need to press star one on your telephone.
Withdraw your question press the pound key please.
<unk> roster.
In our first question comes from the line abusive Squali Suntrust.
Oh I agreed good morning, guys and I Hope you guys are staying safe.
Questions for me one [noise] stand you talked earlier and you're prepared remarks about extending payment terms to some clients.
I was wondering if maybe you guys can speak to to make some small versus large businesses in the material change to the quality of the receivables I think <unk>. Thank you guys mentioned about $1.3 million.
Taken in bed that expense in the quarter I think Jerry do mention that and then the other question is around and that day I think.
You guys.
Are still actively looking maybe can you just helpless oh flesh out areas, where you feel there is a a need for you two guys do them in a what <unk> what areas is now.
Probably studies on it.
The the tools.
Any any color.
Thank you.
I mean, you stuff and thanks for thanks for calling in and I Hope you and your family are also staying safe, yes Florence.
Trend goes you know our model that is a much more focused in terms of you need to on the enterprise side of our business where from from a working capital perspective, obviously in a pretty good position and some of our clients are seems to me.
Oh backs.
As you can imagine from what you're reading in the news about agencies and large corporate clients. They're adjusting to you know what has been a pretty significant slow down, but yet they still want to continue to communicate with their customers.
So we're being you know we have the opportunity to.
As a good long term partner you know to extend payment terms that are more favorable.
And allow us to really deep and those relationships with some of our some of our best clients.
I'll, let Jerry talk to the specific so what we're seeing in terms of in terms of bad debt expense, but you know that's that's pretty much kind of where we're focused on as it relates to extending payment traps.
Sure and use of just specifically regarding the bad debt you know of the bad debt expense, we had in the corridor roughly half a while you do it effective in accounting change where in addition to looking at a specific identification for accounts receivable and R.D.S. so aging.
We're also looking at what they call a unexpected lost model and so you would think about that as a one time shift.
I think you know we're not seeing anything you know remarkable in terms of changes in customer payment behavior that would you know really drive so I think we feel good about our reserve at present, you know half of this was really a the one time change are related to the accounting.
And you I think we should be in a position to work with our clients from a payment perspective, and really non has any meaningful apptix in terms of our bad that expense, we're going to be very prudent and thoughtful in terms of the way that we approach it.
I don't understand too large.
Sorry use of can you repeat that.
Sorry, just about the if you can maybe expand on on a percentage of the business coming from small businesses versus.
Larger slash.
Agency type of businesses.
Well we are at some of the business is you know if you look at at this roughly.
70% of our business relative to.
Merger enterprise clients.
Got it okay. Thanks for that glorification.
You. So you also asked about.
The the way I would just want to describe it is obviously.
You know, we we've talked about being active so we we are constantly evaluating the marketplace, both opportunistically as well as proactively.
And the sort of the buckets are tied to the three pillars, but we're looking at where the growth when the business, which is innovation in the works well.
Data and insights any additional content services that can augment our existing offering. So those are kind of the buckets that we are looking at it from from anemone perspective.
Okay. Thank you.
Thank you.
The next question comes from the line of Alex.
With jeffrey's.
Hey, guys. Thanks for taking the questions and thanks for all the color in the and the opening remarks glad to hear the teenage thing say.
Stand you hit on a couple of these in your in your opening comments, but maybe you can just help us size the cold impact on one q. a bit you know maybe when exactly you started and see it hit the numbers and the different impact on E. Commerce first enterprise and then you also touched on the potential tailwind to maybe more.
Created spending time at home and small businesses, creating websites for the first time just anything you can tell us about how increase digital activity might help offset the slow down an advertising and curious if you're seeing more inbound activity on the enterprise side given the circumstance. Thanks.
Yeah, absolutely and you know it's interesting.
The the trends we saw buried by geography.
So as you know as I mentioned, we saw early in a pack we saw a hit to the business in the January February time frame.
And then we saw you know pretty significant rebound in March where we actually came back to growth.
He has has been depressed a little bit longer although we did start to see some activity. Some increased activity in April the way you know the way we're kind of looking at it is to see at what point, we start to bottom out.
You know, we're expecting a and we saw you know high single digit declines in March and April and soon to cute too.
If that's the bottom that's where we expect to sort of to sort of and but we you know as a parent mentioned in April we have seen some positive signs around our numbers and you're right. The the larger sort of agency clients.
Larger brands, where her there's a much heavy your concentration of outspent is where we've seen the biggest <unk>, but at the same time. We've also seen a lot of new meetings cases for for content and for services, particularly in the.
B as you mentioned were businesses that historically may not have had a digital presents from seeing a lot more businesses that are investing in that so we're launching you know our products to support that but also in the enterprise <unk> our customer services, we're seeing a lot of.
Interest in terms key solutions during this period, particularly because our solutions are extremely cost effective.
Where we can turn you know an initiative around fairly quickly. So we are starting to see a lot of activity and the pipeline you know starting to build but until we see kind of a return or you know bookings bottom.
When we're not going to be satisfied and we're not going to you know, we're not going to feel like we're out of the what.
Maybe a a quick ball up we.
We saw.
Yes.
Intraquarter or shortly after the quarter ended just curious you know I guess why you waited until the Prince itself, where you where you sort of waiting to see.
Get as much time as possible to see how the numbers were trending just what went into that decision. Thanks.
Sure. Alex This is Jared just you know we've been working on forecasting and looking at the range of outcomes for this you know for several weeks now I think we recently came to the determination that there was a wide range of potential outcomes for us both in terms of revenue as well as indeed.
The dog.
And you know as we mentioned several times, we're doing a ton of great work in terms of margin preservation and even margin expansion for the business, but depending on when we rebound from this thing you know the range of outcomes was too much and we'd been kind of working through the results in March and April if it kind of think about what that could be.
And recently came to the conclusion of the range was too wide, Nick and you know with time aligned with aren't running so you know that's why we we we took that determination.
Yeah.
Thank you.
Ladies and gentlemen, if you have a question. Please press star one on your telephone.
For next question comes from the line.
Did you make.
Hey, this is Greg on for Lloyd too if I may.
So just curious if you can maybe talk about the sales force optimization transition and maybe share any kind of K.P. eyes like you know the counting crows to kind of help us understand the progress there.
And then the second question kind of following up on the geographical previous question is are there any nuances to the a pack business that maybe we should be aware of such that we can't necessarily extrapolate what's happening and eight pack to kind of the other regions as a pack seems to be rebounding a little bit.
Yeah, absolutely. So first on the on the enterprise side, you know the the way that our revenue is recognized depends.
On bookings <unk>. So when we when we look at it is where bookings grotesque and ultimately that drives are different rubbing your balance.
So we're not yet seen the growth and you know even before <unk>, we expected the first half to be down with a return to bookings you grow up in the second house, obviously as things have any buttons with the pandemic were watching very closely.
You know Jamie has our new C.R. row has you know already started to undertake several actions to support enterprise growth.
We think this will have a huge impact on the business, including we packaging. How we go to market you know what gaming is looking at is thinking are increasing the average deal size within our enterprise business.
By developing long term relationships and so that as a T.T.I., but we look at on a regular basis, which is the average size as well as new bookings row.
When you will et cetera, we don't disclose those things, but bookings growth is going to be the primary metric that will ultimately determine that lived determined revenue growth.
And I apologize what was the second part of your question.
Oh, just are there any nuances to the eight pack business verse other business just trying to get a sense of like should we be extrapolating that a pack trends to the other parts of the businesses are there different factors at play there.
Yeah.
Question, you know, we've kind of what we're sort of looking at is ultimately to see us getting back to at a minimum to where we weren't can't work 19.
And so we're we're watching on it I mean, we're watching on a daily basis I have a daily stand up with a leadership team and we both are.
Are regions and how things are going and our expectations. You know there's parts of me back where business is much further along in terms of getting back to normal and I think is you know everybody's aware in to me and the Americans we're still.
Kind of in a in a much more fainting and very slow kind of approach to getting back to normal. So we're we're definitely monitoring but you know we're saying.
You know between eight pack and maybe the rest of country. We're saying you know about about maybe 10 points switching between grow some you know hi single digit declines.
Got it and <unk> sorry, just has a follow up to the first question.
Oh, yeah. So in in the press release, you called out kind of two headbands being the sales force optimization and coded for the enterprise decline is in any way you could just split out the two impacts just to give us a better sense.
Yeah. So we don't obviously, we we we don't break.
We don't break out these areas in detail, but when I can tell you is.
We didn't talk about you know previously a majority of our headwinds and the enterprise was M.B. America.
Our business was growing nicely in the enterprise and and the rest of world.
So the the primary area focus for Jamie, particularly early on is is in the Americas, where we did you know we we did see continue sort of single digit declines.
There that impacted or the overall the overall business.
And then with the impact of of covert that took you know that took an additional <unk> on the overall business and if it was pretty proportional in terms of that so.
Across the world.
The difference being that eight packing sort of coming back to the head of some of the other regions. So the way the way to think about it is you know we have we we believe this has things get back to normal. We believe we're in a very strong position an eight talkin to me and we are both spring.
In Canada, now with Jamie and some new hires that will bring on and we're seeing a lot of agreed activity in terms of pipeline built.
So we're we're confident that will get the enterprise business back to bookings.
Okay, great. Thanks.
Thank you.
For the questions at this time, so with that.
It's a C.O. stand.
Closing remarks.
So I want to take one more opportunity to think our employees customers and contributors for their support and engagement I couldn't came more proud of this organization I'm very excited about the future I believe we were very well position if advantage of the opportunities that so please stay safe.
<unk> for the day thinking.
Ladies and gentlemen, conclusive days conference call. Thank you for participating.
Disconnect.
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Yeah.
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[noise] yeah.
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