Q1 2021 NetApp Inc Earnings Call
The year 2021 conference call.
My name so while it would be a conference call coordinator for today.
It's time, all participants are not listen only mode. Later, we will conduct a question and answer session.
Instructions will be given at that time.
I will now turn the call over to crush Newton Vice President of Investor Relations. Please proceed mr. Jim.
Thank you for joining us with me today, our CEO, George Korean and CFO, Mike Berry. This call is being webcast live and will be available for replay on our website at Netapp dotcom during today's call we will make for.
Looking statements and projections with respect to our financial outlook in future prospects, such as our guidance for the second quarter fiscal year, 2021, or expectations regarding future revenue profitability and shareholder returns and our ability to return to growth Gainshare in scale, our business all of which involve risk and uncertainty we describe kind.
In addition to update or forward looking statements and projections.
Actual results may differ materially for a variety of reasons, including macroeconomic and market conditions, including the continuing impact of the cabin 19, pandemic C.I.T. capital spending environment and our ability to expand our total available market capitalize on or data fabric strategy generate cash flow and execute our capital allocation strategy.
Please also refer to the documents we file from time to time with the FCC and available on our website specifically our most recent form 10-K for fiscal year 2020, including the management's discussion and analysis of financial condition and results of operations and risk factor section and our current reports on form 8-K.
During the call all financial measures presented will be non-GAAP, unless otherwise indicated reconciliations of GAAP to non-GAAP estimates are posted on our website.
Now turn the call over to George.
Thanks, Chris and good afternoon, everyone. Thank you for joining US today, we hope that you all are staying safe and healthy.
As we navigate the house.
By delivering services and products remotely, reaching customers through digital means and optimizing remote operations and collaboration.
The acceleration of digital transformations means more enterprises are managing environments, both on premises and in the cloud.
Netapp Leverages, our rich data centric software innovation to help customers thrive in this hybrid cloud world.
We help them move applications to the cloud significantly faster than any other vendor rapidly deploy business continuity solutions enable remote workforces to collaborate and accelerate application software development.
We bring enterprise grade data services to the cloud.
And the simplicity and the flexibility of the cloud to the enterprise data Center.
With our data fabric strategy, we help customers tackled the challenges of hybrid cloud.
No matter, where a customer is on their hybrid cloud journey netapp can help them achieve their goals.
As I stated on the Q4 call we have to clear priorities in fiscal year 21.
Returning to growth in our storage business powered by share gains from our industry, leading filed block and object software.
And scaling our highly differentiated cloud services business.
We will exploit competitive transitions the continued growth of the all flash array market.
And the accelerating ship.
Of managing their most critical data.
In closing I want to reiterate my confidence for net apps future.
We have strengthened our leadership team brought into our portfolio and enhanced our partnerships.
We are listening to the market and customers and we'll continue to respond to their requirements with speed and agility.
We will continue to be agile in our response to the market conditions created by the pandemic, while positioning netapp to it.
Holders alive.
Finally, I want to call out a couple of key events happening this quarter.
I hope that you will all be able to join our virtual analyst day on September 16th.
You can register from our Investor Relations website.
Flagship user conference insight will be fully virtual October the 26 to the 29.
We hope you can tooling to hear more about how netapp helps customers unlock the best of cloud.
Now turn it over to Mike to walk you through the results of the quarter.
Thank you George.
Good afternoon, everyone and thank you for joining us.
As a reminder, I'll be referring to non-GAAP numbers unless otherwise noted.
As George noted despite the continued macro uncertainty in Q1 as a result Workover 19.
We delivered revenue.
Operating margin and EPS above the high end of guidance.
Importantly, solid execution by the sales team and a very difficult environment.
Yielded Q1 billings of $1.15 billion.
Up 6% year over year.
In Q1.
Net revenue of $1.3 billion increased 5% year over year, including a point of currency headwind.
Our two key strategic focus areas.
Our storage business.
Powered by our industry, leading file block and object software.
And public cloud services.
Both outperform the market in the quarter.
Our all flash revenue of $567 million was up 34% year over year.
Nicely positioning us for share gains in the corridor.
We remain confident in the growth opportunity for all flash adoption.
At the end of Q1.
25% of our installed systems or all flash.
Providing a healthy runway as customers continue to embrace the cloud connectivity and investment protection offered by our Flash solutions.
Public cloud services delivered an impressive $178 million an hour.
Growing 192% year over year and 60% sequentially.
Our recent acquisitions, our spot cloud jumper and Talon contributed a total of $44 million are they are as of the end of the quarter.
Even excluding these acquisitions the growth of our public cloud services business accelerated to 120% year over year.
We plan to provide an update of framework for our public cloud services opportunity at our upcoming virtual analyst day.
Total product revenue of $627 million decreased approximately 3% year over year.
In the quarter, we saw growth in our largest global enterprise accounts as customers initiated digital transformation and hybrid cloud projects.
To provide improved visibility into the value created by our high margin software franchise. We are now breaking out product revenues between software and hardware.
Software product revenue of $311 million increased 2% year over year.
Driven by an increase in our software rich all flash Fas.
Hardware product revenue of $316 million decreased 7%.
Origin of 83.4%.
Up a point year over year.
The margin expansion was driven by continued leverage in our support model and exhibits the strong margin profile of a business with a software and recurring revenue model.
Q1, operating expenses of $673 million increased approximately 3% year over year.
Driven by the incremental $30 million associated with the extra week in Q1.
And higher variable compensation, resulting from the better than expected revenue and profitability.
Operating margin was 16.3%.
Up two points from Q1 of last year.
EPS of 73 cents was up 12% year over year.
Cash flow from operations was $240 million and free cash flow was $188 million, representing 14% of revenue.
Cash flow from operations included a one time tax payment of $57 million related to acquisitions.
Excluding this item.
Operating cash flow would have been $297 million.
And free cash flow would have been $245 million or 19% of revenue.
During the quarter, we paid out $107 million in cash dividends.
Representing 57% of free cash flow.
As we noted on the Q4 call. We believe that it's prudent to pause our share repurchase program until we have a better sense for that timing and magnitude of the broader economic recovery.
Weighted average diluted shares outstanding were 222 million.
Down 21 million shares year over year.
Representing a 9% decrease.
We will maintain our cash dividend of 48 cents per share in Q2.
We ended Q1 with $3.8 billion in cash and short term investments.
As you know during the quarter, we raised $2 billion in long term debt.
As of the ended the quarter.
We used approximately $900 million of our debt raise to reduce our commercial paper balance and pay down 2021 senior debt maturities.
The debt raise further enhances our already strong liquidity position, while also providing financial flexibility from additional domestic cash balances during the current economic environment.
To be clear even with this added liquidity, we will maintain our long history of disciplined M&A.
Now to guidance.
We expect Q2 net revenues to range between $1.2 billion to $5 billion.
And $1.375 billion, which at the midpoint.
Implies a 5% decline in revenues year over year.
And includes a point of currency tailwind.
As a reminder, the maintenance revenue benefit in Q1 from the extra week will not repeat in Q2.
As a result, we expect our total maintenance revenue in Q2 to grow year over year, while being down approximately $30 million sequentially from Q1.
Yes.
Q1 earnings clearly came in better than expected.
When comparing our Q2 EPS guide relative to the Q1 plant.
Please remember the items I walked through earlier as a materially impact than normal sequential compares.
As promised we will be very disciplined around our cost structure.
As outlined in our 8-K filing today, we are realigning resources and investments to continue to optimize our business to find our biggest strategic priorities.
Returning to growth in our storage software and systems business, while scaling public cloud services.
Going forward.
We will remain disciplined around our opex on below.
As we launch for reinvestment opportunities that allow us to position the company.
For long term success.
Also noted in today's 8-K filing is the departure of Scott, Alan Senior Vice President and Chief Accounting Officer.
I want to personally thank Scott for all of his contributions to net out over the past four years.
We will definitely be missed.
We will Scott the best in the next chapter of his career.
In closing I want to reiterate our confidence in our strategic roadmap and our commitment to continue to evolve net out into a cloud led company.
Building on our rich data centric so.
Thanks, Nick on ads in the contract culinary please be respect millennium peers and many years. After just one question semiconductors, many people as possible operator.
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Our first question comes down and let Diana Downey with Evercore. Your line is now open.
Thanks Lumping My question guys I will try to one question I guess just a question on your cloud services, a our metrics that you guys gave out.
It's obviously really impressive and if I think the deals out I think it's up mid 20% sequentially hundred 20% growth year over here.
Can you, perhaps maybe help us understand how much of that growth do you think is coming from existing customers as they migrate to off premise and the kind of taking there on tap solution with them.
Courses net new customers net new logo wins on a coming to you. So there's a way to bring that go down between existing customers. This is net new customers I mean really helpful.
We saw growth in the cloud business from a lot of new customers new to net.
For about half of our new to net our customers for the quarter into our cloud business.
And a good chunk of the cloud customers or new workloads, meaning new Wally.
Accounts, where fab.
So the substitution.
On crime workloads to the family.
Hi, Thanks to the question I wanted to start off.
Back to the CBS.
Run rate and just asked maybe George could you just comment a little bit on Azure net at filed it seems like as much as that's growing 120%. It's about the same growth rate year over year last quarter and I thought.
Kind of when we started this.
Journey.
We thought that the addressable market it out with quite a bit larger and I. Just wonder if you still believe is a pretty big addressable market is a low on the come or is it on track with what you expected maybe just comment on that and then I've a follow up.
We've always say there we are moving customers most important workloads to the cloud.
The least workloads are incredibly sticky once they're deployed in the cloud, but they require planning and deliberation before you do that.
What we saw during the course of the quarter again, what sequential acceleration of our cloud storage business.
Were not only did our business with Microsoft girl, but our business.
Last quarter that we're not going to discuss the law is my comment there would be if we do anything of six.
Product margins as it relates to the areas that we discussed Dan pricing as well as cobot pricing.
Given the uncertainty in the economy, we are conservative conservatively, assuming something relatively similar going forward. We do expect there to be a little bit of help on NAND pricing as we go through the rest of the year, but thats a little out of our control Rod, it's really based on industry supply and demand.
Great. Okay. Thanks, a lot Mike Thats helpful.
Hi, Thanks, Rod next question.
Thank you. My next question comes from Karl Ackerman with Cowen. Your line is now open.
Hi, This is Sam on for Karl.
I was just wondering if you could give the puts and takes on the Opex guide in context of the restructuring program, but should be done hitting the piano this coming quarter per the press release more that last quarter had an extra week, but I would've guessed that opex would have been guide a bit longer than than what you did based on the savings.
And then related to that could you guys characterize how do you had that you've been adding through the year or are gaining traction or efficiency, that's relatively difficult selling environment. Thank you.
Okay, So hey, Sam it's Mike I'll take the first one so when you look at the guide for Opex.
The midpoint of the guide about 660.
Last year, we did about 631, so I'll do a year over year for you is that they acquisitions will add about 20 million of expenses year over year. So that is something obviously new euro.
We explained in our prepared remarks from the services revenue in the July quarter due to the extra week.
Persistent storage solutions, both using our traded software and project Astra provide customers really capable application data management capabilities and the technology that we acquired with spot allows customers to really optimized.
The cost and the effectiveness of their kubernetes application environment. So we're really excited we have some state of the art solutions that customers are adopting and we'll tell you more about it at our virtual analyst day.
And the second is the trust and confidence that the world biggest companies are placing in net out. So we took several datacenter environment in large customers away from competitors like Hitachi and most importantly sale that power store product that they have brought to market.
Is not being well received by customers and we are displacing than it's ever let go.
All flash will continue to be growing bar often total storage.
Actually your opinion or maybe also net contracts how much is your installed base growing.
Our installed base continues to grow and the fact that with strong growth rates and also accelerate we moved the penetration of course at a time is just a dimension of the magnitude of our growing in.
Installed base. These are very very big installed base numbers, you're talking about.
One flasharray replaced a few did based systems, but no I think that.
What we see at the pace of adoption is.
Good opportunity to sell more value to customers.
The split that out.
It doesn't look like the mix between into has changed much why is that as interest does that equally driven or is or something else and or could we learn about margins between within those two buckets within product as it does that imply that.
Given the software I'm, assuming is pretty high that the the real hardware box type gross margins are much lower than than what we're seeing for the for the whole group. Thank you.
Yes, Michael So great question. So a couple of things in there to jump into one as you'll see.
The software and hardware components will move around a little bit imagineer laid out we'll certainly have a.
Influence on what goes in the quarter. If you remember how those were accounted for back when we had good number though.
On the larger perspective, I think you can assume that is going to the typical software margins.
As it relates to our business as well.
So it's going to be higher than the product margin average in the hardware will be lower.
Gross margins I heard your comment that the product margins would be flat sequentially, but if I apply the first quarter segment margins to the expected revenue mix in the second quarter I get to a total gross margin, that's a little bit above 67% to above your guidance. So is there.
Hey segment, where you do see some sequential pressure on on gross margin and then the other play I guess George I'll ask you. This on revenue you said that we should look at the business on a sequential basis, if I adjust for the 40 million of extra revenue.
In the first quarter, and then a bit of a currency tailwind in the second quarter.
You are looking at normalized sequential growth of maybe low single digits versus normal seasonality and in October quarter of plus 5% said just some high level comments IMMU George on what's driving that conservatism because that sequential is obviously after July base that reflects.
Then.
These are the margin.
If when you back out the 40 million from the extra week lowers the percentage of gross margin dollars coming from services. So that will naturally bring down the total gross margin.
The thing is it's not a huge mover, but it's a little over is it as we do more cloud at this point that has a small.
Although the impact on the services gross margin because those margins, while increasing every quarter nicely are still a little below the services average. So those are the mechanics of bank of all when you look at Q2 total gross margin great Thats really helpful Enterprise with regard to the revenue feature I think wages.
The euro communicating there were de either quarter time, it's a volatile environment. We've had a good start to the year and we don't we're not clear whether the threes.
Glacial seasonality patterns applied right now so what I'll tell you is where we're not ready to full year, we'll give you the best outlook, we see unworthy cautious right.
Really the summary.
Okay. That's understandable. Thank you very much for that color.
Hi, Thanks, Okay next question.
Thank you next question comes from Matt Sheerin with Stifel. Your line is Alvin.
Yes, Thank you George.
Regarding the revenue guidance I'm, certainly appreciate that theres not a lot of visibility, but could you drill down a little bit more on the current.
Demand picture by region, and customer type enterprise commercial public sector any areas of strength or weakness jump out. Thank you.
Yes, I'll just give you.
Summary from.
Segment perspective clearly.
Roger Enterprises, where we have strong footprint water sources of our growth.
Among your customer is not a material part of our business.
You heard the commentary from several players in the I'd industry, which is similar to what we see their challenges we are seeking out some of those non media customers through our cloud business, where our offerings are more dealer gases doing smaller companies with regard to the geographies.
Essentially had strong performance in the Americas market.
Driven by the strength in the largest enterprises in the Americas and our APAC region also performed well I think the APAC region is reflective of some of those economies starting to recover from the really hard times of Govi. When we'll be cautious released early I think is.
The types of transactions, we saw we did see growth the larger transactions than what I said one.
Well, our movie Leon business continuity to now transformational projects and investing in though and so we benefited from some of those.
Thank you.
Hi, Thanks, Matt next question. Thank your next question comes from Steven Fox with box denied James Your line is now open.
Thanks, Good afternoon, I just wanted to ask maybe just pushed back a little bit on the decision still not to buy back stock I mean the companies.
Okay last quarter in your guidance, you're doing basically an annualized to 80 per share you doing more of that had an EBITDA and obviously have proven ability to generate healthy cash flows during a downturn. So what would trigger management's decision to maybe start buying back stock again. Thank you.
Hey, Steve as Mike So I'll take that so as we talked about on the last call. When we decided to put the share buyback on all the it was really we needed to be able to see a lot more firmly the economic recovery the timeline as well as the depth and while worst.
Turning to feel better about a year, there's still a whole bunch of uncertainty and as George talked about it's there's theres still a lot of economic uncertainty so for us we need to be more comfortable about the recovery the timeline on the recovery and then as while making sure that we are prudently managing our cash from a domestic and into.
National perspective, all of that would would weigh into it.
As a reason why we went into the opportunistic that raises to make sure that we add cash going forward.
So as we discussed in the last call. We also want to make sure that we are looking very hard at share buybacks versus growing the business through again disciplined M&A and that will also play into it as well Steven and then I just want to do no very firmly we are very committed in the dividend and we want to make sure remained.
And that and that's another reason why we pulled back on the share buybacks.
Great I appreciate that perspective, thank you.
Hi, Thanks, Steven next question.
Thank you next question comes from Jerry along with Deutsche Bank. Your line is now open.
Yes. Thanks, Thanks for let me ask question.
Thanks, and congrats on solid results I want to focus in on the worldwide headcount reduction of 5%, which you guys. Jeff just bear five and the price of course, they came out yesterday kind of indicated that solidfire and HCR might be might be.
Portion of that those cut a little bit more I guess I would say exacerbated relative is actually business could you.
Clarify whether that was in fact true is that that something else focused on and beyond that I guess as a percentage on focusing on those cuts in general or are there certain businesses are certain.
Portions of the employee base that we're we're impact more thanks.
You know these headcount reduction.
Are never easy to me.
And though we care a consideration when we.
Decide to meet those changes those changes were driven by the strategic alignment focus that we.
To prioritize our resources in the.
In the core storage systems and software business.
As well as accelerating our public cloud services business, we realigned our five year half percent of our workforce and those were in parts of the business.
In all other functions of the business, but those parts of the business that were not particularly aligned to our go forward priorities Solidfire, Yes, I can confirm was part of this even back then we're narrowing our focus with the Solidfire any portfolio to the high margin parts of the market.
As we have signaled on prior calls.
Got it appreciate.
Your next question please.
Thank you next question comes from and I'll hand, with Bank of America. Your line is now open.
Yes. Thank you our to go back to cloud data services and look at this on the organic EMR basis at the quarter on quarter increase on that basis was was $23 million sequentially annualized and send the prior quarter was $29 million.
Given the fact that you have got morgue status and there's more mature why is that option rate not accelerating more organic basis.
Given the exposure to more cloud providers and maybe you can give us some sense of how that trajectory might changes as we look forward here.
We made some.
Cost improvement in our cloud services portfolio in the storage platform.
That allowed our customers to adopt cheaper and more cost effective tiers. This is similar to what hyperscalers do periodically and so that did affect some of our customers on our existing cloud business choosing to deploy onto a lower cost year.
So it wasn't like we did add more customers and add more revenue. We did move some of our capacity within the quarter to a lower cost year that is pretty much. The majority of the gap that youre seeing on a sequential basis.
So nicely.
Critical about doing big large transactions I think those are far and view between and so the majority of our.
Instigations are more smaller transactions.
Thank you would see.
Thank you.
Thanks, George next question.
Thank you next question comes from Louis Miscioscia Rebel your line is now open.
Okay. Thank you George if you go back to one your comments earlier is that small medium business is not material portion of your business, but looking that you have some momentum and you're looking to gain share. You. Obviously must have recently done a evaluation of as to why or why not to expand more aggressively into the data that sector, which has.
And obviously had good growth rate. So can you give us an idea as you're thinking as to why that's not good opportunity for you all.
It's all a matter of prioritization.
We run a disciplined CNL.
And within that DNL, we have opportunities to deploy resources, we are covering the.
Your next question.
Your next question comes from Shannon Cross with Cross Research. Your line is now open.
Thank you very much George I'm, just curious as you think about.
We're now that's going to focus in both for the company as well as you know what you're seeing from your customers.
Thanks going to happen to offices going forward I mean, what's what's your expectation for how many people go back how do you sort of view.
How does this new world, we're going to live in post pandemic will be I'm, just kind of curious as to what you're hearing what you're thinking thank you.
Thank you for your question, we meet customers across the board as I said.
The number of executive briefings, and senior executive interactions that iron over the last six months are being higher than at any time before the goes I can be on us in a single day in multiple time zones across the globe.
We see predominantly is that the war at large is operating a some view mostly working from home model.
Especially IC buyers and the knowledge workers in our customer base.
We think that that will continue in fact netapp is already signal to our employees a few weeks ago that we're going to be working from home till July of next calendar year and so we do see this IDR customers want.
Our customers digitizing their businesses fulfilled through collaboration as well as customer interaction, becoming a priority we see their deployment.
Together with on premises.
As a.
Catalog of I'd services, and yet we have you say that that would happen for a long period of time and bigger take advantages.
Great. Thank you. Thanks, Shannon next question please.
Thank you next.
I wanted to make sure there when you compared the Q1.
This number with the Q2 guide that you took into account the impact of the initial opex from the acquisitions as well as the 14th week Theres just a good number of moving parts. There. So thats why we did focused on that and the commentary and then yes, certainly from a year over year perspective as it.
Relates to.
Backs.
As obviously a lot to do with our the revenue guide and where we are as well as I was wanting to make sure that we continue to invest in the growth areas. So sorry didn't want to be confusing on that I just wanted to make sure as you looked at Q1 in Q2 that you also took into account some of those large muscle mover.
One of the other items that we had in the EPS for Q2, one a year on year basis was the interest expense related to the debt raise right. So Mike and I are giving you sort of the lead moving bar.
I'd say.
Thats the way for you do understand that from barriers. We do you want to ask you to EPS.
Thank you Thats greatly appreciated gentlemen.
Hi, Thank you Jim next question.
Thank you next question comes dominant abella labeling.
Ladies and gentlemen.
Hi, good afternoon, guys congrats on solid quarter.
Good execution, yes, just real quickly George you, Mike I'd love to get.
Any context around.
So to the activity the coming together on the cloud answers in sales team.
Well, they're focused on and how long you thinking will detail drill those guys get productive. Thanks.
The cloud data services sales team is a group of experts that we hired with cloud backgrounds.
They are focused on.
Working closely with the Hyperscalers needy, Microsoft Amazon, and Google and selling us alongside their team as well as working with the net sales team.
And our installed base of customers to adopt our client portfolio. We're pleased we're one quarter into the organization, but this clearly had it is that and we're looking for good uses us from that.
All right. Thanks, Glenn next question.
Thank you next question comes from Simon Liam.
Keystone, India, a single experience.
The data center to the public cloud. So we're pleased with the progress you'll hear more about Keystone for modern user conference.
Hi, Thanks, Operator next question.
Thank you next question comes from Eric Martinuzzi with Lake Street. Your line is now open.
Yes, I wouldn't go layer deeper on the cobot related pricing trends and how they're manifesting themselves is this is.
Is it about competitive displacements is it about defending the install bases or particular verticals just some help there. Please.
Typically what happens when commodity prices go up is that we and others in the industry passing along to customers.
We typically do not page the commodity we pass along the cost of assets. These through new customers when they go up or when they go down clearly the golden side that is not something we wanted to do our customers need us really good partners and the really careful about.
Having them Bhavan, rather than price increases with regard to competitors takeoff and displacement. They are always a portion of our go to market model and we have the capability within our gross margin model to be aggressive in certain cases or not.
As it rather than others, and we're going to continue to focus on maintaining discipline there.
Thank you.
Thanks, Eric next question.
Thank you next question comes Anyhow, Chuck late in life and capital markets. Your line is open.
Yes, and congrats on some exceptionally strong results.
Basing a technical question for me.
So spot provides Q continued management.
In the cloud is this leveraging kubernetes or is that by.
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Identify the pattern of behavior of that application and find the optimized confuse the environment.
Ron that application most cost effectively.
So it is entirely complimentary and we are very good partners for example, with Amazon.
Where we felt customers use the right confused year in Amazon So that they can run more because you for the money on the Amazon here, we see spot is complementary to all of the cloud providers and frankly Clark complimentary DVM, where it is.
Optimizing the runtime environment for customers, regardless of what version of Kubernetes, they use which cloud provider the runoff and whether the using a traditional application or a cloud native application.
Also allows us to do is now because we didn't optimized compute and storage we are able to address 70% offer typical customers cloud bill and optimize a substantial amount of that cloud bill. So now we are much more strategically relevant to customers.
As a result of us having spot is our portfolio.
Hi, Thanks next question.
Thank you and your final question comes from tornadoes Longbow Research. Your line is now open.
Yes, Thanks, I want to go back to the comments around strengthen and large enterprise and larger deals I think there has been consistent across the peers and industry, but I just want to get your date.
Well positioned for both those threatened.
They weren't receives a large enterprise is they have the financial resources and the strategic runway to make those decisions and invest now rather than have to necessarily wait for Kobe and that's why we saw the segments related pattern of our business.
More for little bit.
Hi, Thanks, Nick I'll pass it over to George for some final comments.
Thank you for the with US this afternoon.
Seasonal decline macro uncertainty, we continue to make strategic malls that position us well for the long term, while maintaining operational discipline.
This data centric software innovation is the foundation from which we have customers thrive in hybrid cloud world.
We bring enterprise Crazy services to the cloud.
And the simplicity and flexibility in the cloud to the enterprise data Center.
No matter, where customers on their hybrid cloud journey, NASCAR and help them achieve their goals.
I Hope you will join us in our virtual analyst day, where we'll talk more about how we have customers on lost the best of cloud for their digital transformation.
Daily and the well thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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