Q1 2020 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Workiva Inc. first quarter 2020, <unk> earnings Conference call.
At this time, all participants' lines are in a listen only mode.
After the speakers presentation, there will be a question and answer session.
You asked a question during this session you want me to press Star one on your telephone keypad.
You should require further assistance. Please press star zero I would now like to hand, the conference over to your speaker today, Adam Theresa.
[music].
Good afternoon, and thank you for joining us for Akita's first quarter 2020 earnings Conference call Today's conference call its pre recorded.
It's up you know began comments for our Chief Executive Officer, Marty basketball, followed by our Chief Financial Officer Stuart Miller.
A replay of this call will be available until may seven.
Information to access the replay is listed in today's press release, which is available on our website under the Investor Relations section.
Before we begin I would like to remind everyone that drink today's call you'll be making forward looking statements regarding future events financial performance, including guidance for our second quarter and commentary on our full year 2020.
These forward looking statements are subject to known and unknown risks uncertainties Workiva cautions that these statements are not guarantees of future performance.
All forward looking statements made today.
Our current expectations only and we undertake no obligation to update any statements to reflect the events that occur after this call.
These are for the company's annual report on form 10-K in subsequent filings for factors that could cause our actual results could differ materially any forward looking statements.
Also during the course of today's call you refer to certain non-GAAP financial measures reconciliations of non-GAAP GAAP measures certain additional information are also included in today's earnings press release.
With that will begin to turn the call over for CEO, Marty Dr. Paul.
Thank you Adam and thanks to everyone for joining the Workiva first quarter 2020, <unk> conference call.
Our Hearts go out the people directly affected by cold and 19.
We are grateful for the essential workers and community leaders around the world who are on the front lines.
That workiva, we're doing everything we can to protect our employees and their families. During this difficult time.
We are grateful that all of our employees are able to work from home and that we are able to fully compensate the small number employees, who do not have roles outside of our physical offices.
To keep our team connected and focused I host a weekly livestream culinary to offer updates insights advice and support to all employees.
As a cloud based technology company with a highly distributed workforce the shift to work from home has been smoothed for us.
With cloud platforms and digital channels, it's been mostly business as usual.
We continued to deliver the highest levels of performance availability and security our technology global infrastructure and operating model along with our 24 seven customer support enable our customers to work from home in a controlled secure environment with their most sensitive data.
This ability to work from anywhere is becoming the new baseline.
We believe that Workiva will be a key player in this broad base shift to remote work, which will drive increased demand for our reporting and compliance platform for years to come.
Workiva entered this global crisis from a position of financial strength.
We believe we're in a stronger more flexible financial position now than ever before including nearly 500 million, an unrestricted cash and short term investments.
We're pleased with our first quarter 2020 financial results, which exceeded guidance for revenue and operating results.
However, like many other companies the month of March delivered some unprecedented challenges as we saw a number of customers and prospects delay software purchases.
In March we restricted not essential business travel and we transition to all virtual sales meetings.
Even though our traditional sales process has been disrupted in many cases, we're finding it easier to access people and we are having engaging conversations with customers and prospects.
In fact, most of the company's that delayed first quarter purchases are back in our pipeline.
Stuart Miller, our CFO will provide more details about our financial results later in the call.
In times of rapid change our commitment to each other and our customers remains the same.
<unk> is driven by or values, which sustain us in these uncertain times.
We are a strong resourceful company and we are moving forward staying focused on our goals and objectives.
We continue to execute on our growth vectors, which include email.
You data and our platform solutions for integrated risk global statutory reporting and the U.S. government.
And we are continuing to hire people in the areas, where we see the most potential for growth.
Despite covert 19, we remain confident that Europe will comprise 25% to 30% of our total revenue overtime.
We recently launched a new solution to help midsize companies comply with the European single electronic format.
Commonly known as he said.
Our new solution offers limited functionalities, specifically for this market.
Because the solution resides on the Workiva platform customers are able to upgrade to our more comprehensive youssef solution and leverage additional platform capabilities at any time.
We also plan to continue extending the capabilities of our platform into additional industry verticals.
Earlier this week, we announced that we will be working with utility pipeline and other energy companies, many of which our existing customers automate data integration and streamline reporting to the federal energy regulatory commission known as FERC.
Last June FERC adopted experience as its reporting standard.
With our connected reporting platform and our leadership in XBRL Workiva is ideally positioned to capture this market.
In response to covert 19, we shifted all marketing activities to virtual channels.
As a result, our annual amplify user conference will be hosted virtually later this year.
In March our two day virtual a bad amplify goal was attended by nearly 2400 customers prospects and partners and with our largest event to date.
I want to thank our amazing employees for their ongoing dedication and commitment to delivering our platform and supporting our customers and partners around the world.
With that let me turn it over to Stuart Miller, our CFO.
Thank you Marty I'll comment on our financial position review, our business model and then explained at a high level why we beat our Q1 guidance next I'll discuss Q1 2020 results versus Q1 last year and finish with forward guidance.
We believe workiva is well positioned financially to weather the storm from Cobot 19.
Indeed, we believe Workiva has never had a stronger or more flexible financial position and we do now.
At March 31, Workiva had $496 million.
Of unrestricted cash and short term investments.
First maturity on our funded debt occurs in more than six years.
Our debt obligations have no restrictive financial covenants.
We believe our business model mitigates many of the challenges posed by cobot 19 for six reasons.
First demand for our solutions is relatively insulated from the business cycle.
Software to assess larger enterprises with regulatory compliance and performance management is needed in both good times in bad.
Second our cloud based platform is designed for team members to collaborate remotely, including those who work from home.
On premise systems cannot compete as well in this environment.
Third we enjoy high revenue retention rates, because our customers love the design and functionality of our software and the high quality of our customer service.
Our platform saves time reduces risk it eliminates many of the tedious aspects the financial and managerial reporting.
We think our value proposition is compelling relative to alternative markets we serve.
For most of our customers pay us annually in advance for a subscription to our software platform.
These contracts renewed fairly evenly among the four quarters of a year.
As a result around 90% of the subscription revenue we recognized every quarter comes from deferred revenue.
Yes, no customer accounts for more than 1% of our revenue.
Our 10 largest customers account for less than 5% of our revenue in the aggregate.
Six.
The sources of our revenue our diverse.
Footnote age the financials in our 10-Q breaks out revenue contribution by industry of our customers.
Shifting now to our financials.
As always I will talk about our results and guidance on a non-GAAP basis.
Refer to our press release for a reconciliation of our non-GAAP GAAP results and guidance.
I will talk about how well we did against guidance first.
We beat Q1, 2020 revenue guidance at the midpoint by $2.75 million.
Higher subscription revenue accounted for about a third of the B.
While higher services revenue contributed the balance.
We'd be guidance on Q1 operating income by a relatively wide margin I'd like to explain that 8 million dollar positive operating income swing at a high level.
The revenue beat I, just mentioned accounted for a third of the swing.
<unk> expenses accounted for the remaining two thirds of the beat as follows.
Travel and entertainment expenses were just over a million dollars better than forecast due to covert 19 travel restrictions.
Medical care expenses were almost a million dollars better than forecast due to postponement of discretionary medical visits from cobot 19 restrictions and a higher percentage of our employees electing the high deductible medical insurance plan.
Sales Commission expense was about half a million dollars better than forecast due primarily to change in our sales Commission structure.
Fees paid to recruiters consultants and legal advisors.
We're half a million dollars better than forecast.
The remainder of the beat on Q1 operating income.
Just above $2 million came from hiring at a slower paced than forecast some of which was related to covert 90.
Now turning to a comparison of Q1 2020 to Q1 last year.
We generated total revenue in the first quarter of $85.8 million.
An increase of 22.6% from Q1 2019.
Breaking out revenue by reporting line item.
Subscription and support revenue was $68.4 million up 21.8% from Q1 2019.
New solutions, new logos and conversions to solution based licensing.
Helps drive strong revenue growth in Q1 2020.
56% or the increase in SNS revenue Q1.
Came from existing customers.
The balance of the increase came from new customers added in the last 12 months.
Professional services revenue was $17.4 billion in Q1 2020.
An increase of 26% from the same quarter last year.
Growth was driven by helping customers migrate to inline XBRL.
Additional revenue and set up in consulting inorganic XBRL gross.
As a reminder, the first quarter is seasonally the high point for our revenues from XBRL tagging.
Most of our publicly traded customers prepare their 10-K's in the first quarter.
Turning to our supplemental metrics.
We finished Q1 with 3507 customers.
Net increase of 141 customers from Q1 2019.
And a net decrease of three customers from Q4 2019.
On a gross basis 73 customers churned in Q1.
Which is a normal levels of churn for us and we added 70, new logos Q1, which is below normal for us and was due to the impact of cobot 19.
In early March 15, new deals in our pipeline carried our highest rating for probability to close by month.
Of the 50 deals tend did close in March and 32 returned to the pipeline of which 30 would have been new logos.
Normally a very high percentage of these types of deals would have close by month.
Our revenue retention rates remain strong our subscription and support revenue retention rate was 94.5% for the first quarter of 2020 compared to 95.7% for the same period last year.
Almost half of the attrition in the quarter came from M&A de listings and bankruptcies.
Looking ahead, we expect a higher incidence of bankruptcies and be listings.
On the positive side, we expect less pressure from M&A in the near term.
With that on our subscription support revenue retention rate improved to 110.9% for the first quarter of 2020.
Compared to 110.7% in Q1 2090.
Our progress with larger subscription contracts continues to be promising.
The number of contracts valued at over $100000 per year totaled 670, and the first quarter of 2020 or 36% from Q1 the prior year.
The number of contracts valued at over $150000 totaled 308 customers in the first quarter.
49% from Q1 2019 results.
Moving down the TNL.
Gross profit totaled $64.3 billion in Q1 up 25.5% from the same quarter a year ago.
Consolidated gross margin was 74.9% in the latest quarter versus 73.2% in Q1 2019.
Net expansion of 170 basis points.
Breaking out gross profit.
Subscription and support gross profit totaled $56.6 million equating to a gross margin of 82.9% on SMS revenue a contraction of 30 basis points compared to Q1 2019.
Additional headcount to help upgrade customers to our next generation platform was the primary driver of the contraction.
Professional services gross profit in the first quarter was $7.6 million equating to a 43.7% gross margin.
Fair to 32.7% in Q1 2019 due to improved utilization.
Research and development expense in Q1 totaled $21.4 million up 6.5% from Q1 2019.
Primarily due to higher compensation costs.
R&D expense as a percentage of revenue improved to 25% in Q1 2020.
28.7% in Q1 2019.
Sales and marketing expense for the quarter increased 42.6% from Q1 2019 $33.4 million.
Reflecting our investment in sales talent, primarily to drive bookings in EMEA integrated risk global statutory reporting and U.S. government.
General and administrative expenses totaled $8.7 million in Q1.
Up $1.9 million compared to Q1 2019.
Gionee expenses as a percentage of revenue.
Increased 40 basis points to 10.1%.
Due to additional headcount our software expenses and increased rent expense.
We posted an operating profit of $800000 in Q1 2020 compared to an operating profit of $900000 in Q1 last year.
He was operating margin in Q1 was substantially better than our guidance as I discussed earlier.
Turning to our balance sheet and cash flow statement.
At March 31 2020.
Cash cash equivalents in marketable securities totaled $496 million, an increase of $8.1 million compared to the balance at December 31, 29 team.
In Q1, 2020, net cash provided from operating activities totaled $4.7 million.
Compared with cash provided a $5.1 million and the same quarter a year ago.
At the end of each quarter, we review outstanding invoices.
To determine which ones present, a collection risk due to a variety of factors, including credit risk.
Consistent with A.S.C. six to six.
In dollars from the reserve at year end in anticipation of the impact of covert 19.
The increase in this reserve account reduced deferred revenue by an equal amount and therefore, it reduced billings at the end of the quarter.
Remaining performance obligations on subscription contracts continue to vary from deferred revenue as we implement multi year contracts with annual billing terms for some customers.
Turning to our guidance.
But the second quarter of 2020.
We expect total revenue to range from $80.3 million to $80.8 million.
We expect subscription revenue to grow at a rate in the low teens compared to queue to last year.
We expect services revenue to show the normal seasonal decline from Q1.
In addition, we expect to pose Q.T. services revenue below last year's Q2 results.
You May recall, we had at one time contribution services revenue from a regulatory changing chichi last year.
We expect non gaffe operating loss range and 6.8 $7.3 million.
Q2 2020.
The death in duration of the economic disruption from covered 19 is on.
While we have a large pipeline of new deals we have limited visibility on when the deals will close.
So we are suspending specific guidance for full year 2020.
However, we are providing some directional guidance for the rest of the year.
Relative to the Guy that we gave in February we now expect full you're 2020 revenue to grow at a slower pace and operating margin to improve.
We will now take your questions operator, we're ready to begin to humanize session.
Thank you and at this time if you do have a question. Please press star wine on your telephone keypad again notice star wine.
And your first question well come from online, Brian Peterson with Raymond James.
Hi, Thanks is Alex lower on from Brian Marty first time for you. This is in your prepared remarks, but can you just talk more about the resiliency work, even platform and I work from anywhere environment and with that I think you talked about demand potentially picking up or you already seen that in the current environment Catalyzing.
Greater number of conversations or leads.
And then I'd if all per Stewart. Thank you.
Adam are you still online.
Yes.
Your phone.
Oh.
Maybe I was asked one for Stewart here, well, yeah, sorry, <unk> marti's, though as needed.
Okay.
Go ahead.
Oh, well I guess just talk about the visibility in the backlog the R.P.O. grow this quarter, especially in light of that commentary gave on on the March late stage pipeline is there any reason from a a workiva standpoint that you wouldn't be able to implement or go live on on any portion of that next 12 month balance understanding customers may ultimately push timing, but just.
Curious on your own ability to meet all that backlog.
No I don't I don't think there's any a restriction from our perspective on that most of the.
Onboarding, we do are virtually all the onboarding, we do is remote anyway.
Yeah.
He did you hear me so.
<unk> yeah.
And then did we lose Mardi on on the first question I think he's trying to dial back in.
Okay, well, maybe another one for you then Stewart on the backlog growth.
It it accelerated some even when when [noise].
I'm sorry.
<unk> Yep, the backlog grow accelerated on the full R.P.O. not just the next 12 month one.
Which is impressive I think given your camping S.B.L. last year I just was curious if you'd call. It any of your kind of four to five growth opportunities as having an outside its contribution.
Yeah. So the just to remind me is on the R.P.O. side. Some of the growth. There is due to are signing a three year deals with a one year pay.
And so that's that's picking up the the that's accelerating on on the R.P.S., a though we did show good.
No size grows in in in Q1.
Alright, great. Thank you.
Your next question is from the line of Rob Oliver with their basically have with your question.
Hey, Mardi, Sir it's Matt Lemenager on for Rob.
The question was and the 30 I guess it'd be the 32 deals that that got pushed her I guess returned.
The pipeline was there any recurring message or theme there I realize it was cobin driven but it was it you know people.
The the discretionary spending for maybe around C.F.O.s sweeter accounting sweet being kind of push of the backburner as kind of near term other I.T. trends took priority or what just kind of looking or is there any theme or message that happened in those 30 to deal with it that got pushed.
Let me see if Marty is these not still on it so I guess all guys and they wouldn't hear me now yeah. We can now what do you want to take down.
Yeah I was on the right line they didn't have any connected I'm sorry.
I could hear everything and same number anyway I apologize everybody.
Back to their resiliency question. The you know in 2008, when we started the company. We were you know we were very much focused on cloud in the very early days and we said we were always going to make 100% web tool web in a cloud based tool and.
We've heard tremendous a number of positive things from our customers. During this as they all moved to work from home I think some of them had already been doing it but so.
Everyone was able to achieve what they needed to in terms of activities that they were actually doing in our product in terms of seeing lead that it's too early to say, we really I can't say for sure, but we have seen some optics and indefinitely you know inquiries when a lot of our competitors have you know soft.
Where that's on crammed. So you know it's early days, but again I really believe but this will help us in the long room.
Well do you want to comment on the Mat specific question about the 32 logo. The 32 deals and went back into the pipeline digits you see any theme there on why they went back where they were postponed well I I would say this the end of March.
Everybody, who was in a state of shock and everyone is trying to understand how it was going to affect their cash flow. There were two categories of those from my perspective, one was industries that song immediate a drop in cash build on like a airlines or even credit card companies things like that so.
I'll I'll just see hospitality.
Those were put on hold indefinitely and we have several of those occur the second category was.
Very prudent see oppose.
Saying, hey, let's just put the brakes on on a new deals anything we're spending that's new for the next two or three months to see how this all shakes out and most of the stuff that we saw slip boards in that category where.
You know, they're just being prudent and saying, let's see what's gonna happen, obviously, none of us I've ever seen anything like this and how it affects the economy.
That shock is sort of settling out now we're starting to see a lot of activity. So we're optimistic that you know things are gonna slowly come back to normal in terms of our sales process.
That's helped them already and then at my other question would just be on for the for for your sales quarter carrying folks are you, making any changes too.
Things like expanding the amount of of quota they required to carry just maybe assuming.
Some of the clothes rates won't be as high into kind of to get to the numbers you thought maybe at the initial plan that people need to carry more quota or any any changes around that's the kind of sales go to market.
No not not yeah that's.
This is two months old work two months we're into this one so.
We are you know, we're not going to do anything knee jerk, we're watching what's happening we're happy with our pipeline right now, but again no one's been through anything like this so we just don't know how it's going to play out, but we don't have any plans to make any dramatic changes to our sales p. more.
You know the size of their patches or or quotas.
Okay.
Alright, thanks, guys.
<unk>.
Your next question is from a line of Kerry tell me what Centrust Robinson. Please go ahead.
Yeah, Hey, Mardi insert an item appreciate that taking my questions than I do appreciate also the extra color you all added this quarter as relates to the cells activity and pipeline.
So that was helpful. I. Appreciate it first question just relates to you all had an announcement a couple of weeks ago as a relate the sales leadership change Scott, Ryan, leaving or resigning it looks like till he's taking over more responsibilities, but what I was curious is if we could just learned a little bit more about the decision, making a like catalyzed that.
And I think in that precedents that talked about broader sales leadership changes then a focus on sales efficiency. So we just love some more color on what exactly happened and and and kind of the driver of it.
Sure. If if you if you recall when when I got the.
The C.E.O. title here, a little over a year and a half ago I was the acting chief operating officer at the time.
And.
That happened rather abruptly and.
We knew that eventually we want it and see all that's what we wanted.
So this is sort of a manifestation of going back to that traditional model of having the C.O. and not a cheap revenue officer accompany our size Ah clearly doesn't need bowls.
The second thing is we we brought Scott into really upgrade you know we were transactional company you know, it's smaller deal size and we really brought him into you know bring us up that deal size ladder in terms of the talent.
Sales process and the skills of the sellers and he did a good job of of getting US you know substantial improvement. There. He also brought in a lot of other managers and help bring some of our other managers off the learning curve.
And also brought in a leader for services when he was see our role.
And then when Julie came in and Sorta got her legs, we realize that it was you know we had one extra layer and really didn't need both titles.
At the same time, Scott had said that he had been.
In the sales leadership drop a long time wants to take a short break and maybe look for another company, where he could do the same type of thing he did for us. So we it was a joint so agreement too.
If you move on and we worked out a joint D.O. and and we're not replacing him as we mentioned a couple other sales leaders also.
We're.
We're a left the company and we feel we have a very lean and very good sales management team now, we really didn't need the access layers, but Scott really brought us along to a good place and it was it was a good time in terms of being efficient at the at the top of the or.
Okay. Thanks, Marty and I guess Stewart follow up question, just relates to the 111% revenue retention and the quarter you know for two q. kind of any perspective directions on how to think about that and even for the for your again I know you're not giving guidance for the four year, but just how how to think or what would be a base case for revenue retention as you see it. Thanks.
[noise]. So as you indicate we don't you know give guidance on that on that number it's.
As you know what to build up that includes at on solutions and.
Price increases and it's net solution turn.
So you know we were we were pleased with the number that we we posted in in Q1 and you know we're pleased with the pipeline new deals both new logos and in the AD on sales and you know as we indicated we don't have <unk> visibility.
On when those deals are going to close as I indicated in my remarks or second quarter, we have such great visibility on revenue as you know because of business model that we felt comfortable giving guidance on came to but.
Until coded duration and is greater visibility.
We're not going to have visibility on closing new deals at the end of Q2 or three.
[noise] [noise]. Thanks.
Your next question comes from mine has to stand it was hot ski with Morgan Stanley. Please go ahead.
Hi, <unk> ban.
Prior comment passing.
<unk> spectral though that was an add on it now.
And we were wondering to what extent <unk> l. kind of your graph equation or.
<unk>.
According to what I'd be out there.
I really don't see a change there I think we're still going to see about 50 50 add on sales and new logos.
And I think that you know a lot of the new logo activity or more of it will be in Europe, but I still see a lot of new logo activity in North America as well. So we really think it's going to remain about 50 54.
Yeah, I think and then a quick all Oh, you Oh customary huh acting to come back and.
Inside your contractor and cat teammates and and <unk>.
<unk>.
Yeah, we haven't seen too much of that honestly.
The worse were aware of the we we certainly watch our renewal activity in in track you know who's in what industry that might be affected but.
So far that hasn't been a big issue.
At it.
Your next question is from a line of Tom Broderick with Stiefel. Please go ahead.
[noise] somebody historic glad to hear you guys are both doing well and team is staying a as healthy as can be so that's a great start [laughter], where we're at right now thanks would love to chat.
That well they just had a little bit more I apologize I add a little trouble getting in the call. So you may have addressed it in the first few minutes already but relative to the European expansion plans opportunity is still there I'm guessing you know your efforts at hiring people and looking at potential lemonade targets with your with your solid balance sheet I'm guessing that's probably.
Push back a little bit perhaps you can go into a little bit more detail about how your tactically able to proceed in an area where are you didn't perhaps have as many boots undergrad as you wanted you're looking to hire you know how much does that sort of set you back from five timing standpoint, and what's the urgency of customers over there to move forward with.
Digital transformations in light of January of 15 2021 mandate.
Well you have several aspects of the first off.
The yeah. The the M. any activity is is definitely slowed and as I as I've always said, we're going to be very careful doing acquisitions to make sure we get something that.
That you know checks most of the boxes were concerned about.
It has slowed I would say that our ability to recruit people in a media has not change that much. We're finding that we've been able to continue to recruit sales people and and the the delivery people quite effectively there, we're a little bit behind but it really wasn't cold but thing it so.
But ER me a team is a very thorough when they hire and they've had a very good track record of hiring good talent and having very low attrition. So I would say it's more about.
I'm being more careful and making sure we have the best people possible and then in terms of.
You know our growth strategy work, continuing and me and we haven't slowed that at all.
And and we're saying good reception from the customers. It's it's quite.
Yeah, it's quite amazing and and our pipeline is growing at the exact rate we anticipated. So we're we're pretty pleased with the me I'm working to continue to expand their.
That's really green cradle for us and many way, it's really greenfield in terms of how late we went into a meal.
Yeah, perfect got it and then now that you fully laughs the S.B.L. impact in the model and and maybe more importantly, you've gotten your customers up on this sort of all you can eat plan, how does how does that sort of roll through the way you think about <unk> customers now that there's sort of on that's all you can eat.
Wouldn't seem like even if they have fewer employees the number of seats. They would utilize we'd go down so I guess churn would be exposed to the usual suspects bankruptcies in and I intend to things that Stewart talked about but can you just sort of talk through turn as a concept going forward and how that might differ from the past with.
You're with all your customers on S.B.L. now.
Well I I am going on limb I don't think S.B.L. really affects Sherman I think what's happened is we have given customers you know as we've talked about before.
The customers were always limited by the number of seats, they had and they would make careful decisions on Monday to expand I think a lot of customers have expanded a number of seats. You know we've seen the number of users go substantially higher since we enacted S.B. also it makes it more sticky in general I really haven't seen a decline of.
And users.
And maybe that maybe that's something that will calm is cold, but you know goes through its life cycle here, but remember we do stuff that's regulatory in general and stuff, that's downstream and reporting process and it's really mission critical and where it's required by the government. So.
I you know our turn.
I'm glad we're talking about this a lot because that's probably thing that is we're most proud of this we have a very low churn rate and that you know just induces an incredible stability in our financial model. So.
I I'm really not that concerned about churn them from the S.B.O. point of view and I don't think companies that are going to stay in business are going to look at us any differently after colon.
Excellent really helpful. Thank you guys appreciate it.
You have a question phone line, Mike crime doll with North North Midland capital.
Hi, Mike on from Mike. Thanks for taking a question. They just one quick on on or.
Opened yesterday.
With a rough idea.
Just the number of logo isn't that space.
600 isn't I'm already.
Yeah. It's I think it's it's six six be roughly somewhere in there mostly good sized companies and so.
Like we said in the press release, a lot of Mark customers already and they've been bugging us about whether we were going to do this what we're finding is.
Customer see more and more expert all coming it's coming all over the world for all the regulatory.
Agencies slowly, but surely and.
And these are our customers want US you know standardize on one platform to do all their X.B.R.L. So a lot of R.S.D.C. customers was pestering us about this and we really didn't want to.
Commit to it and so freaked out their taxonomy, what's happened a couple of months ago, and then we went through the due diligence of understanding you know how it would affect our product in or go to market, but.
We were really well positioned as we said in the press release to take a significant amount that market.
Thanks for example.
In there are no other questions at this time.
Great well. Thank you everybody. We appreciate it that I think we're done at them.
Oh, thank you.
Thank you.
Thank you again for Toning today's conference call you may know disconnect.
Oh.
[music].