Q2 2020 MobileIron Inc Earnings Call
Welcome to the multiplier in second quarter fiscal year, 2020, <unk> financial results Conference call.
As a reminder, all participants are not listen only mode and the conference is being recorded.
The presentation, there will be an opportunity to ask questions.
He joined the question Q you May Press Star then one on your telephone keypad should you need assistance during the conference call you may signal and operator by pressing star and then zero.
Down like did turn the conference over to Eric violent. Please go ahead.
Thank you Christine.
Good afternoon, and welcome to mobile energy second quarter 2020 financial results conference call joining.
Joining us from the company or Simon Biddiscombe, CEO, Scott Hill CFO.
Format of the call will be remarks by Simon said, Scott will provide details on the financials will then have time for questions.
If you have not received a copy of today's press release. Please go to mobile phones Investor Relations website at investors on mobile or Dot com.
Today's conference call contains forward looking statements involve risks and uncertainties.
Putting statements regarding mobile phones revenue operating expenses, GAAP, and non-GAAP financial metrics product releases projections and trends.
All of these forward looking statements are subject to a number of significant risks uncertainties assumptions.
Actual results could differ materially from the statements made on this call.
Please see the risk factor section of our S. You see filings.
All statements made on the call.
Our made as of today, we assume no obligation and do not currently intend to update such forward looking statements.
This call is reviewed after today the information presented during this call may not be accurate or Kurt.
With regard to non-GAAP financial metrics.
We believe them to be helpful. In understanding Billboards financial performance, they're not meant to be considered an isolation or as a substitute for comparable GAAP metrics. It should be read only in conjunction with mobile apps consolidated French financial statements prepared in accordance with cap.
A reconciliation of the non-GAAP financial metrics to the GAAP metrics can be found in our press release Mommy Investor Relations page of our website.
Do not provide a reconciliation of forward looking non-GAAP financial measures due to our inability to project certain charges and expenses.
Unless otherwise stated results sure today will be non-GAAP.
At this time I would now like to turn the call over the Sun.
Please go ahead.
Thank you Eric and good afternoon.
In my remarks today I will provide brief overview of our second quarter financial performance.
Comment on our recently added anti phishing capabilities speak to our expanding relationship.
And then share some recent customer successes.
First and most importantly.
The report the T mobile I am remains largely safe and healthy.
Company remains in work from home mode, and I'm extremely proud of high resilience our team has been.
Mobile line is executing at a very high level and that can be seen across all aspects of our business.
No I will provide brief overview of our results.
Revenue in the second quarter was $58.9 million a record for mobile line to growth of 16% year over year.
Importantly, this is the first quarter and for use the full U.S. and international revenues grew in double digits.
Total revenues benefited from both the end of sale perpetual licenses and some incremental demand for work from home use cases.
Leveraging our revenue and operating discipline, we delivered record non-GAAP operating profit more than $5 million said, 9% operating margin.
We exceeded our guidance coming in with 9% growth year over year.
Just one more comment I will work from home program.
We drilled millions of dollars in opportunities in Q2 and brought in many new logos.
What I will free trial and did you work from home program is still strong sales. Please let me have significant opportunity. So this quarter and next.
Yes, the perpetual licenses for mobile I am marks the culmination of our transition to subscription led recurring revenue model.
This aligns with what we've seen in the market Lodge I'm, just clearly reflected in our customer interactions over the years.
Preferences of shifted toward our subscription model.
We're excited about next chapter on the simplicity that this brings to our business full throttle customers.
Internal teams and investors.
While uncertainties around the pandemic will persist for some time one thing is clear.
Remote work is part of the new normal or Scott has stated the age of the everywhere and price is upon us with customers workers and infrastructure converge from anywhere to connect.
And everywhere enterprise requires an I.T. operating model supports customers everywhere enables employees everywhere and manages the deployment of business services across distributed infrastructure.
Really for cost suggest that three quarters of organizations primed will not be shift to more remote work post pandemic.
Companies to succeed in this new environment security is a critical to the safe and seamless operation of remote workforce.
Because of exploiting enterprise security gaps that if only become wider amid this pandemic and are increasingly target in mobile devices and applications.
Burgeoning source of security breaches its fishing.
In fact, 60% to buy T. decision makers believed that fishing is the most significant mobile security threats faced by their organizations.
The Twentytwenty Verizon data breach investigation report back office.
I would find that credential threat and social attacks because the majority of breaches nearly one quarter of data breaches night involve fishing specifically.
As the innovation leader in mobile security, we were thrilled to recently a names multi back to mobile fishing protection to help defend against these prominent subs security threats.
Built on a leading U.M. product I was solution offers immediate on device fishing protection throw a threat defense product.
Even when it does not connected to the internet.
As with accessing threat defense, there's no end user action required to play fishing protection on managed devices. So companies can ensure 100% use reduction would that impact in productivity.
This is extremely important as other solutions that require end user action, where it needs to be downloaded installed and activated only achieve around 27% use adoption success rate.
However.
As we saw recently with Twitter [laughter].
Create a truly secure organization employees Tonight, you organizations need to take that extra step competing to break themselves from passage.
I was zero sign on solution deploys Crestwood must multifactor authentication to make your device your identity, Andrew moves passwords threat landscape entirely.
In the to attack the vulnerability logging in past would combination.
With with the using I was zero signed on approach you only means to access the service would be through a verified device that had performed biometric verification and confirmed that the right person the right.
Right location is trying to access information.
Given that we are confident I was zero sign on capability can stop this attack hazardous no adult Shane login credentials.
Additionally, Twitter experienced a follow on phishing attack the fishing protection in our threat defense solution, we had Ghana confident we could have mitigated this aspect of the attack.
As a testament to the great progress we've made on another front, our medical west solution.
We're also excited to share that mobile I must be invited to participate in <unk> Kong program for unified important management.
This is a very special for mobile.
As we had joined in a very small set partners that Apple endorses promotes we've been working for long time to get to this point and we see this has tremendous validation of our best in breed technology from the very manufacturer of devices, we are helping to secure.
Previously Apple was only able to endorse gem native support my question environments through the program and given how it given our strong cold and iOS an increase in momentum in the Midwest markets. We are excited about the opportunities this will create for mobile.
I'm also pleased to share that we had a solid first quarter with income to connect the company with quiet last quarter.
In cap to connect is the leader in mobile App released software a critical component of development distribution that automates the process of validating that the Atlas ready for publishing and then publishing it for use.
The same buyer.
This is an extremely synergistic acquisition and our sales team is excited to have another leading product to share with our customers.
Now I'd like to share some details on recent uptake travel leadership team.
Last week I was thrilled to a point crystal banking gaufman to the position of Chief revenue officer of mobile.
Christophe Joint mobile I ended 2010 and has built a deep understanding both products customers needs. During his use lead into European sales team did an incredible job building a team and driving growth.
Over the last several months it has been exciting to see him step up and bringing new lapping confuse yasmin passion for the worldwide sales team.
I look forward to see in continuing to shape. The success of the global go to market team moving forward.
And with that.
To touch on some customer wins from the quarter.
I'm pleased to tell you that line students de <unk>, a leading global investment management filmed over 500 billion in assets under management.
Sales to expand the relationship that were broader portfolio to enable their work from home requires.
A customer since 2010, they needed to ensure their employees work remotely in a safe and seamless way with high confidence that they wouldn't compromise security if the clients financial data.
Thousands of employees spread over 25 countries the solution had to be easy to deploy.
Given mobilized status as a trusted partner coupled with our platform supports functionality and expanding customer support it was an easy decision for alliance Bernstein to grow with mobile.
I believe this expanded partnership speaks volumes to the combination of our best in breed security offerings with superior customer support an impact we can have customers a secured in remote work becomes increasingly important.
We want a new logo in a rip from a competitor I've traffic the cat Swedish transport administration.
Traffic for test is responsible for not only the long term kind of Sweden's transport system across road rail shipping and aviation, but also building in managing these connected systems.
The satisfied with their prior mobile security provider. The agency was eager to find and efficient way to secure and manage stations devices for workforce that is constantly on the move without disrupting productivity all functionalities.
Mobile I am not only demonstrated value to the seamless functionality and reliability about where offerings, but also through the responsiveness of our team.
As traffic for Cats directive is to develop and run an efficient sustainable transport system for all modes of transport with Mobileye and similarly aligned novel goal of providing a better mobile work experience for their employees across any device.
We also continue to make strides in the government vertical domestically and I'm pleased to share that we secured a deal with the United States Depomed Agriculture, We U.S. did the government agency that influence policies on Paul farming, Agriculture far Street and food.
You Sta was looking for the optimal solution to maintain employee productivity, while ensuring confidential federal data stage secure.
The 29 agencies across more than 4500 locations worldwide.
Sta is well aware challenge is playing and securing apps across different devices operating systems and locations, which made mobile I'm clear choice to deliver an optimal solution.
Through our innovative and comprehensive platform you asked the field agents will be accessed productivity apps on their mobile devices to do their jobs securely and from anywhere.
With that I'll turn the call over to Scott Scott.
Thank you Simon and good afternoon.
Today, we will be discussing non-GAAP financial measures unless otherwise noted our press release form 8-K and website investors Dot mobile iron Dot com.
Got a reconciliation of GAAP to non-GAAP financial results.
Now I'll review the financials.
Revenue in the second quarter was $58.9 million a record for mobile iron for growth of 16% year over year and exceeding the high end of our guidance range by $6.9 million.
The second quarter marked the end of perpetual license sales and we saw strong demand for perpetual licenses incremental to our forecast as the quarter came to a close.
In addition, we saw strong demand for our cloud service with revenue growing 20% year over year.
We ended the second quarter with air our of $187 million for growth of 9% year over year above the high end of our guidance.
Our air our results clearly benefited from our work from home initiative.
Our subscription air our was $120 million up 13% year over year, and our maintenance error I was $67 million up 2% from last year.
Our dollar based net retention came in again at 103%.
Gross margin in the second quarter was 82.3%.
Above the high end of our guidance aided by strong perpetual license sales and operating expenses came in on target at $42.9 million.
For the second quarter, we reported a record operating profit of $5.6 million for an operating margin of 9.4%.
We delivered net income of $5.1 million or four cents on a per share basis.
Moving to the balance sheet, we ended the quarter with $87.7 million in cash and short term investments and continue to have no debt.
In Q2 cash used in operating activities was $5.8 million, reflecting normal seasonality.
As a reminder, in the beginning of the second quarter, we paid approximately $6 million to acquire in cap to connect we did not repurchase any shares in the quarter.
In Q3, we expect to increase our cash balance by about $3 million.
Unearned revenue was $113 million at the end of June up 6% from $106 million a year ago.
Next I'll cover our outlook, but first I'd like to provide a reminder, on how removing perpetual licenses from the mix will affect our revenue moving forward.
Starting this quarter, we expect to customers, who would have previously purchased new perpetual licenses to instead buying new seats in on premise subscription form.
The important revenue recognition for on premises subscriptions is considerably lower than perpetual licenses.
So given that we recognize $6 million in perpetual license in Q3 last year, we will see a revenue headwind of approximately $4 million to $5 million in the third quarter.
Q3 of next year, we believe our air our and revenue growth should aligned tightly as the perpetual headwind disappears.
Given that our air our growth best reflects the true rate of growth of the business.
For the third quarter 2020, our guidance is as follows.
We are projecting revenue in the range of $48 million to $51 million or down 5% year over year at the midpoint.
The decline is almost entirely due to the removal of perpetual licenses.
We expect non-GAAP gross margin to be approximately 78%.
We expect non-GAAP operating expenses to be in the range of $43 million to $44 million.
Also as business activity stabilize our visibility into deal flow has improved.
Given that we are comfortable raising our revenue guidance and reinstating our air our guidance for the year.
For the full year 2020, our guidance is as follows.
Expect revenue to be in the range of $203 million to $210 million up 1% at the midpoint.
We expect care our to grow between 9% and 11% by year end, we expect our non-GAAP operating margin to be to be between negative, 5% and negative 7%.
I would also like to highlight that with $88 million in cash and no debt. We believe we have sufficient liquidity to navigate the current environment and our transition to a subscription led business and with that we can open up the lines for questions.
At this time, if you'd like to ask a question. Please press Star then the number one on your telephone keypad and start the number one and if you wish to withdraw your question press the pound Keith Please standby walnut compiled acuity roster.
And your first question comes from line of Scott Cyril with Roth Capital. Please go ahead.
Good afternoon. Thanks for taking my question, Hi, guys really nice job on the quarter in a in a difficult operating environment, maybe just to dig in quickly on the core business could you give us an idea about.
The churn was looking like in the quarter certainly had good numbers, but what that was looked like in the core base and then if he couldn't quantify a little bit for us to work from home adoption trends.
Or attach rates that you were seen with some of those customers would be very helpful. On that front that I had a couple of follow ups.
Yes, Scott take the first Pops out relative to the dollar retention as you know Scott we no longer.
Talk about two and as such we're just talking about dollar retention. So I'll, let Scott take back on.
And now we can do double click.
[noise] yeah. Thanks, Scott the question Art, our net dollar retention did improve.
In the quarter, you don't see it in the in the rounding but didn't accrue it improved by about a point in the quarter. So it definitely definitely more favorable this quarter overlap.
Yeah, and then on the on the work from home could you just give some color in terms of.
What's the early data looking like in terms of conversion rates the opportunity pricing to help us kind of quantify that going into the second half of this year.
Yeah, I'll pick up out Scott so as I look at start with the overall trend. Okay. There's no doubt that accompanies to succeed in this new environment security and management critical to the seamless operation at that remote workforce, it's what we thought.
For an extended period of time and the recent quarter has continued to demonstrate that what I said in my prepared remarks was to work from home program that actually driven many millions of dollars an opportunities in Q2, some of which closed in Q2 on some of which have rolled into Q3 and some are even rolling into Q4. It was put in.
Time, so we see incremental opportunity from the work from home scenario.
Hospital with existing customers and across new logos as well.
In terms of the impact to Q2, you really have to think about it on an era perspective at that point in time, given that many of those customers didn't.
Close transactions, especially if they were talking to use it for free until June 15th program. There was very little revenue contribution in the quarter. Obviously, so if you think about it within the context of the value added to a are by far. So if you look where we came in relative to the guidance that we provided we were about $4 million above the midpoint.
The guidance.
The vast majority of the upside associated with that was driven by the work from home programming call. It stronger demand the based set of technologies broadly okay. What we've talked about is that we expect certainly that said the technologies to continue to experience benefit as we work through the second half.
The euro where we have seen just a little bit of a slow documents with some of the more transformational projects. So for example, where we were trying to take a customer from an on Prem solution to a cloud solution, which has pay our our upsides attached with some of those programs have slowed a little primarily because our customers want to be 100% confident.
It would be no impact on their remote workforce as they're trying to form a tasks on a day to day basis. So most of our customers ahead, staying focused on making sure employees can do their jobs on a day to day basis.
That's already taken on more transformational projects that could introduce risk into that but we're seeing significant opportunity and impacting the business from people just working from home and broadly from that remote worker use 'cause.
Gotcha and two last quick question. So they couldn't then I'll jump back in line I'm. The guidance of 203 to 210 I assume the midpoint this quarter at the lower into that range could be down as much as I think 10% sequentially into the December quarter versus kind of up seasonally in line or kind of wonder what's the thought process is there something that you're.
Seeing that you've included that scenario really into the forecasts or if you're being conservative and then just real quickly Simon on the zero sign on could you just kind of give us an update in terms of how you're thinking about it in terms of you know moving it into the marketplace pricing adoption et cetera, and how we should be thinking about that going into 2021.
Thanks nice quarter.
So let's comment regarding support gross yeah, Let me let me let me take the first one here. So the decline in revenue is really about the lack of perpetual license.
So eliminating perpetual license from our mix is going to bring that revenue growth rate down for a period of time.
As we transition over the next four quarters, that's really the dynamic there.
Got my apologies just to clarify meant from third quarter into fourth quarter I'm looking at the guidance. There's a wide range there kind of given that you framed the third quarter outlook already so just kind of what's your thought process isn't going specifically into the December quarter. If there's something there that we should be aware of.
Oh no nothing in particular is just a younger further we get out of the collapse visibility we have in terms of in terms of what business is actually going to close six months from now or five months from now.
And Scott you know, we always want to be conservative as it relates to thinking about some guidance I'm certainly as it relates to the quarters right. So oh always our mode of operation in that regard zero sign up okay. So yes, we actually saw significant traction souter sign on the most recent quota.
You have to think about it within the context you use cases, so just thinking about managed mobile devices.
It wasn't Android could a whole series of different customers are using our solution freight.
Absolutely authentication that gets you to the various different services you need to be able to do your job. So you can give a trusted use on trusted advisor trusted applications.
For managed iOS and Android devices, we've got those solutions in the market. We also have our first customers and managed Pcs in that case. So we've got a handful of customers who use never technology zero signed on on unmanaged devices and they are PC.
Scenarios in my case, so we've seen a exact isn't expected to as you know the products were going to be rolled into the market over an extended number quote is based on those specific use cases, we delivered for the use case for unmanaged Pcs in the most recent quarter and we've got customers up and running on that platform at this point in time.
In terms of the pricing for that solution, but pricing is that list price $36 per user and that's obviously an upsell to be a U.M. capability that we may already have on that device and the pricing is somewhat consistent with what you might expect from a list price perspective in the M.F. a market Scott. So that's kind of how we thought.
But the pricing attached to those products. So still obviously very early days, but I'm pleased with where we are both on unmanaged devices and managed devices and more news as more use cases, the sell for in the coming quarters.
Your next question comes the line of Chad Bennett with Craig Hallum.
Great. Thanks for taking my questions and and kudos on the quarter in this environment nice job.
And then it's great also to see the obviously the the overall Rev.
Guide increase for the year, but also the reinstatement of the are so I just want to follow up on on some questions on a our are in the 9% to 11% growth rate.
Implied in the guide.
You know just kind of thinking about puts and takes to that I mean, we effectively put up I think 9% error growth you said in the June quarter to quarter around eight in the March quarter, so kind of towards the bottom end at that range or a little bit below.
Considering you know the struggles we had in bookings a in a me a second half of last year start in the September quarter that has to be a bit of a a kind of tailwinds. So to speak this year.
Then also we have work from home and then we have the free users.
That we're hopefully monetizing you know in the second half here, so what what would be the yeah and roundabout way I guess.
What would be the headwind.
In the second half of the year in why wouldn't you say our growth.
Acceleration and accelerate pretty decently.
Yes, so headwind is as we talked about last quarter as we were seeing kind of shrinking upside, which obviously materialized in the results around the young form, but we were seeing challenges on our transformational opportunities, which have more air are getting them. So.
Section of the so the conversion to the cloud some of those initiatives are the things that wouldn't be holding us back relative to.
Our original expectations.
But the other parts of the business, obviously, good well this quarter continued to drive.
Drive the business forward, though from an era perspective, we are going to have in the second half.
You know as a pure subscription company, we get more air our out of every seat sold.
So those are some tailwinds that are going to happen, but there are still some headwinds in the business as a result of the koeppen 19 work from home situation.
Okay, and then Simon maybe for you can can you expand and give us a maybe a real time update.
On the monetization efforts around the free offer to the existing base and then I think frontline potential new customers. Obviously, you only had you know a couple of weeks and at the end of June to really monetize that but can you give a kind of Angela end of July uptake on on conversions there.
Yes, the conversion rates very high as part of the reason for that is that a significant amount that that activity was with existing customers right. So she thinks that our business broadly.
Roughly.
It's about expansion.
Typically comes from existing customers and then one sued by when your business comes from new logos right. So for us the relationships with those customers that we've had in many cases for use news is that much more critical as it relates to monetize and those opportunities night, there's a whole series of those customers didn't take advantage of the actual.
Free campaign, so more to that attached to new logos than we did to existing customers for existing customers. It was just by more product and rolled at age as quickly as you can so being able to separate the notice the.
Past city that exists from the was free for the first 60 days of the quarter.
60 days of the campaign and then customers have to pay for it versus the millions of dollars incremental pipeline continues to exist as a little bit difficult chat. So when I look at its just okay. How much total how much total pipeline exists relative to the work from home program not just the campaign or activities that.
We attach to work from home and that continues to be many many millions of dollars. So incremental activity that we have the opportunity to close in Q3 and then in Q4 was even one do you believe it or not because all the way to Q1 explained.
Okay, and then when maybe one last one for me just digging in to a little bit regarding the Apple Mack opportunity and your new partnership there I guess first question would be.
Simon couldn't give us a sense in the existing base, what the make up would be of Mac or iOS devices. If you have kind of rough number range and that and then secondly, just real quick you know the Apple partner program that you are now involved in can you can you.
Just describe what it took to get you over the finish line there and maybe how exclusive that program is thing yeah, yes, So think about install base of.
Devices that we have and management security at this point in time.
Well more than half is iOS devices at this point in time, obviously and then you've got a significant part of the remainder that's made up of Android devices and then when you look at a windows and they tend to be a much smaller part the total pipe.
Devices that we've got under management at any point in time, Okay. So for us the iOS relationship with apples always been strong been backing that preferred apartment program and I was obviously critical to making sure that we have everything we would expect from an access to the field from an access early access to technology and so on perspective, okay. So.
On just iOS this benefits attached to it but for US. It's also the case that Mac west becomes that much more critical and Apple was completely.
Willing to embrace what we're thinking about from a macro west perspective, and obviously, we think about that different event, but really the only competitor we've gotten the mockups was thinks about that so for us that market is it's not just about Apple. It's about all forms of operating systems at the vast majority vote customers have in upper.
Direction, we've got very few customers that I would characterize is being apple only been able to make showed you can manage other operating systems across all types of endpoints becomes that much more critical and frankly, when we went because of the great. The bucks experience the new employees, we win because the security framework that we apply across different endpoints, we win ease of up.
When she had compliance and so on and so on so movement because the solutions ultimately cheaper in many instances these who used to licenses the per device or per user and in some cases people take advantage of to use when they want to manage Mac west as well as I was right. So.
So for me, it's about making Shobi continues to broaden that relationship Apple, making sure that with deep with Apple Salus, making sure that.
It it's I will product that is being sort of at the same time as other solutions that are in market what did it take to get there, making so you've got it will pass product.
Candidate will come thing the product and for us having a world class Mechel west product in that case was critical to being able to get in mind shape.
Great great to hear it sounds like a phenomenal opportunity for you guys. Thanks, much we're excited about it.
Your next question comes online if no took I with Northland capital markets.
Thank you and congratulations on the strong results.
Thanks, Yeah, absolutely err on the surface a it looks like all the upside relative to consensus was on the perpetual license sales, which has a small clauses that if it would or cloud base. So I'm wondering if the incremental demand from the work from home program program was largely all perpetual or did you see a significant portion of that actually contributing to the.
Cloud a Christmas wall.
Yes, So let me let me take that one come so first off the the upside we saw when we focus on hey are right as we as we said in her prepared remarks, we're focusing on a are going forward given we're sure subscription.
Primarily subscription based company.
So our air upside was about $4 million from the midpoint of our guidance that was mostly driven by work from home and stronger demand.
And so that you know it at the midpoint, we would've been 2.2 were 6.3.
So there wasn't that much perpetual license revenue from the work from home campaign.
It was delivered in the quarter I mean, obviously on the on the revenue side. We did have a strong performance in perpetual licenses that that did drive that piece, but when it comes to air our growth that was much more grounded in work from home and.
You know just general demand for the product.
Okay.
I think that that's the thing that add to that but just helps build on what Scott said holistically thinking about it within the context of dollar retention right, Wisconsin become quite see it because it's lost them the right, but dollar retention actually increased about a point and we saw both increases in ASP and.
So increases and seats, obviously, if you see that every quarter, but NCC increases and seats as well. So no. The program remains strong beautiful Sunny era, that's a critical message if you focus on revenue.
And the contribution from the work from home component.
Grams people.
That much harder to to isolate if you focus on air hours. Much you said it wisely given that much of that picked up at the very ended the quarter from a contribution perspective.
Okay. Okay.
And talking about a or can you break down the a 9% to 11% error growth guidance between that's he adds an upsells.
They're both contributing.
You're getting meaningfully in a in our outlook. So I think that's about a month it seemed to be collected.
We're not going to break those I, we don't gifts that level of credit card.
Okay could you talk about what drove the improvement in net dollar retention rate.
Uh huh.
I would say the up sell of Oh, we have we had a good quarter for MTD.
And then we had significant expansions.
So those were the two drivers that we're most material for the improvement.
Okay great.
And then my last question here is that I believe Simon you. When you were talking about to Twitter breach you mentioned that you guys could have helped Twitter protect against it.
Hey did I hear that correctly.
First as it did I hear that correctly.
We believe so is the answer when we looked into what we believe but.
With the actual attack so.
We believe I was technologies would solved the challenge for Twitter, yes, but as with these things.
Typically there is layers of complexity to what really happened and what we believe technologies would have preventative.
What we're confident that what technology would have presented it.
You got to get to the we need to the detail.
Okay and are you aware of how they presumably they they have remediate it and are you aware of how they want about it have they contacted you guys will no doubt we wouldn't ever expect.
Somebody like that to talk to submit heading into just opens up the risk profile again right [laughter].
[laughter] true alright, thank you.
And your last question comes online a Frank service with Barclays.
Hey, guys, it's Frank on for IMO, Congrats on the quarter. Just one quick one for me I was wondering if you could provide some color on to help the you region is evolving from the issues a few quarters ago kind of what drove the outperformance on international Thank you.
[noise] So you know.
The European region or international region broadly speaking.
Is where we still have the majority of our perpetual license sale. So the upside you saw there was from the under failed Kirk was concentrated there that being said the region is performing better than it was in the past and so is is kind of coming back as the same work from home challenges that we talk.
It's about rig with regard to our more transformational projects right not not immune from that but when it comes to the overall demand. If you haven't that it is it has been improving and that is reflected in the numbers as well and a good bit of our work from home campaign activity came from the international regions.
Great. Thank you guys.
Thank you I'll now hand, it back to Simon for any further remarks.
Thank you Christina and thank you all for attending today's call. We look forward to updating you on our progress again next quarter. Once again, thank you for tend to be safe and healthy. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.
Oh.
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