Q2 2021 Workiva Inc Earnings and Acquisition of iPaaS Provider OneCloud Call
I would now like the turn the meeting over to your host for today's call Mr. Mike Ross, Vice President of corporate development and Investor Relations at the breakeven. Please go ahead.
Good afternoon, and thank you for joining us for where he the second quarter 2021 conference call.
Today's call has been prerecorded and will include comments from our Chief Executive Officer, Marty Vanderploeg, followed by our Chief Financial Officer Jill Klindt.
We will then open the call up for a live Q&A session.
Julie is Ko our Chief operating officer is also on the call.
A replay of this webcast will be available until August 10, 2021.
The 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 during today's call, we will be making forward looking statements regarding future events and financial performance, including guidance for the third quarter and full fiscal year 2021.
Okay.
These forward looking statements are subject to known and unknown risks and uncertainties.
We're heap of cautions that these statements are not guarantees of future performance.
All forward looking statements made today reflect our current expectations only and we will undertake no obligation to update any statement to reflect the events that occur after this call.
Please refer to the Companys annual report on form 10-K, and subsequent filings for factors that could cause our actual results to differ materially from any forward looking statements.
Also during the course of today's call, we will refer to certain non-GAAP financial measures.
Reconciliations of non-GAAP to GAAP measures and certain additional information are also included in today's press release.
With that we'll begin by turning the call over to our CEO Marty Vanderploeg.
Hello, and thank you for joining today's call.
The Ricky the team delivered another strong quarter, beating second Gordon guidance for revenue and operating income.
The past quarter reflected our steady execution with the addition of 149 net new customers growing our customer base to almost 4000.
Our results continue to build on our market leadership and the increased demand for regulatory reporting and fit for purpose solutions to support digital transformations.
We are very pleased that nearly all of our solutions exceeded plan and contributed to our broad based growth.
Our strong bookings from existing customers reflect the breadth of our platform and our enhanced the ability to cross sell multiple solutions.
This resulted in Q2 year over year growth of 29% in subscription and support revenue and almost 26% and total revenue.
We target being a low to mid 20% growth company.
And for the first half of 2021, we delivered total revenue growth of 23, 7%.
Other highlights of the quarter included.
Posting strong operating cash flow, our third highest in company history.
Achieving our highest revenue retention rate in 2 and a half years.
And continuing to grow the percentage of customers with an annual contract value of over $100000 and $150000.
Due to continued broad based demand and resulting top line growth, we are raising full year guidance.
Joe will provide further details about our financial results and outlook.
A strong IPO on spec market propelled sales of our capital market solution.
The solution continued to exceed our revenue contribution plans in the second quarter.
Capital markets is a great source of new logos, which fuels, our set of integrated risk and management reporting solutions.
We will continue to model the incremental contribution of capital markets as an upside to our plan given its limited predictability.
The EMEA team continued to build a strong new logo pipeline with a focus on <unk> and other use cases.
We are pleased with our incremental performance in the <unk> market.
We believe it is still early days and that the market has a long tail. We remain optimistic about the opportunity and are expanding our selling organization to capture the market as it reopens.
Our ESG solution pipeline is growing we are pleased with the customer traction we are achieving and remain optimistic about the market potential and expanding Tam.
We are also accelerating our own corporate wide ESG efforts as we work towards strengthening our company and ultimately promoting a better world.
2 recent corporate ESG highlights include.
First we recently received an MSCI ESG double a rating.
We performed at a leader level and Mark there to do on the top 23% of 148 of SaaS companies.
The strong performance and governance privacy and data security and human capital management.
And second we're Kiva has joined the UN Global compact CFO Task force.
We are the first SaaS company to join and Jill will participate and work alongside her peers shape credible goals that are aligned with corporate sustainability strategies.
We continue to strengthen our partner ecosystem in the second quarter, we signed a number of large deals of our partners play the significant role of few examples include.
Working in partnership with the Big 4 advisory firm, a large global auto manufacturer chose where kiva to manage their global statutory reporting transformation for over 500 legal entities.
We worked with our partner on the joint RFP response, and the partner will deliver the services to implement our platform.
Another key partner related win was with the large health care company.
The customer invested in the receiver platform purchasing 4 solutions geared towards privately held companies, including financial reporting management reporting internal controls and policy management.
Expanding our partner ecosystem is powered growth in our multi solution opportunities.
We also continued to expand our footprint with partners utilizing where kibbeh as part of their managed service delivery.
We closed 4 opportunities in the second quarter with new and existing partners.
3 of the Big 4 advisory firms of now invested in the <unk> platform to support the delivery of managed services.
We are pleased with the investment that our partners are making in growing their will keep of practices and the impact they have had and delivering transformative results for our customers.
Last week, we launched our new marketplace offering over 200 templates services and no code the third party connectors cut.
Customers can now streamlined existing processes and reporting and solve new business problems, all within our platforms connected and secure ecosystem.
Our partners play a crucial role on the launch of the marketplace by contributing content and services that are readily available for customers to add to their workspaces.
All 4 tenants of our company's strategy are now fully in motion.
We expect fit for purpose solutions, along with our modern platform marketplace and partner ecosystem to drive our growth are.
Our company strategy enables us to make thoughtful and deliberate decisions aligning and focus in the organization and exposing and mitigating risk through rigor and discipline.
Yesterday, we announced the strategic tuck in acquisition of 1 cloud a pioneer in Ipass technology.
We acquired 1 cloud to extend our platform capabilities and data integration and preparation.
1 cloud has been an OEM partner of ours since July of 2019.
Their technology expanded the work Iva platform, enabling our customers to connect data from third party sources, such as the ERP JRC HCM and CRM systems as well as other third party cloud and on premise applications.
We believe connecting harmonizing and controlling data across multiple disparate source systems further differentiates the <unk> platform from its competition.
By acquiring 1 cloud we now fully on the complete end to end technology of our platform.
We expect the smooth integration given the successful history that our 2 companies of shared and we welcome the 1 cloud employees to wear kiva.
We are proud of the extraordinary talent that is driving our outstanding customer experience and values based culture.
Recently, we were honored to be named once again to Fortune magazine's list of best workplaces for millennials approximately.
Approximately 70% of our employees are millennials, making this recognition even more meaningful.
We also were renamed as a best workplace in both Chicago and New York.
In closing, we delivered strong quarterly results driven by the focused execution of our strategy.
We are growing the business through new logos, maintaining high customer retention and account expansion and investing in our people tools and technology.
It continues to be an exciting time for work Eva the world is changing at a rapid pace and we believe we are well positioned to capitalize on the increasing opportunities to power of transparent reporting for a better world.
With that I will now turn the call over to Jill.
Thank you Marty and good afternoon, everyone.
We saw strong performance during Q2 with new logo and add on sales contributions as well as continued robust performance across the activation portfolio.
The team has skillfully executed on our strategy and operating plans.
I will talk about our results and guidance on the non-GAAP basis. Thanks.
Thanks, very much of our press release for a reconciliation of our non-GAAP and GAAP results and guidance.
We continued the broad based demand for acceleration in Q2.
As the result, we are raising guidance for 2021 revenue and operating income, which I will discuss later.
I'll address our performance against Q2 guidance first.
We beat Q2, 2021 revenue guidance at the midpoint by $4.1 million.
Higher subscription revenue accounted for the majority of the fee.
We the guidance on Q2 operating income at the midpoint by $4.8 million the.
The revenue beat mentioned above coupled with lower <unk> versus forecast makeup of the on operating income.
Turning to Q2.2021 results versus Q2 day here before.
We generated total revenue in the second quarter of $105.6 million showing growth of 25, 9% from Q2.2020.
Breaking out revenue by reporting line item.
Subscription and support revenue with $91.2 million up 29% from Q2.2020.
The new logos and new solution helps drive strong revenue growth in Q2.2021.
63% because of the increase on SMS revenue in Q2 came from new customers added in the last 12 months.
Higher capital markets revenue was also a factor.
Professional services revenue was $14.4 million in Q2.2021 of.
9.3% from the same quarter last year.
This was largely due to higher <unk> services revenue.
Turning to our supplemental metrics.
We finished Q2 with 3949 customers and net growth of 437 customers from Q2, 2020, and the net growth of 149 customers from Q1.2021.
Our revenue retention rates from tenants.
Our subscription and support revenue retention rate was 96% for the second quarter of 2021, an increase compared to 94, 5% for the same period last year.
With add on our subscription and support revenue retention rate improved to 111, 6% for the second quarter of 2021.
Compared to 107, 9% in Q2.2020.
The number of larger subscription contracts continues to show impressive growth.
In the second quarter of 2021, we had 952 contracts valued at over $100000 per share.
33% from Q2 of the prior year.
The number of contracts valued at over $150000 totalled 500 customers in the second quarter up 46% from Q2.2020.
Moving down the P&L.
Gross profit totaled $82 million from Q2 of 31, 4% from the same quarter a year ago.
Holiday of the gross margin was 77, 7% in the latest quarter versus $74.4 per cent in Q2, 2020, and net expansion of 330 basis points.
Breaking out gross profit.
Subscription and support gross profit totaled $77.7 million equating to a gross margin of 85, 2% on SNS revenue and.
An expansion of 170 basis points compared to Q2.2020.
Primarily driven by higher SaaS revenue.
Professional services gross profit in the second quarter was $4.3 million up 27% versus Q2.2020.
Gross margin was 29, 9% of net expansion of 420 basis points.
Research and development expense in Q2 total $25.4 million up 18, 4% from Q2.2020 due to new head count investment.
R&D expense as a percentage of revenue improved to 24, 1% in Q2.2021 from 25, 6% in Q2.2020.
Sales and marketing expense for the quarter increased 19, 7% from Q2.2020 to $38.7 million as we invest in the growth of our business.
General and administrative expenses totaled $12.6 million of Q2 up to $1 million compared to Q2.2020.
G&A expenses as a percentage of revenue improved to 11, 9% from 12, 5% in Q2.2020.
We posted an operating profit of $5.3 million in Q2, 2021 compared to an operating loss of $1.8 million, Inc..2020.
Turning to our balance sheet and cash flow statement.
At June 32021, cash cash equivalence and marketable securities totaled $552 million, an increase of $11 million compared to the balance at March 31.2021.
Net cash provided from operating activities in Q2, 2021, total $12.8 million compared with cash provided of $7.2 million in the same quarter a year ago.
Turning to our guidance.
Factoring in the expected impact of the COVID-19 pandemic on our business and the results of operations based on information available to us today.
For the third quarter of 2021.
We expect total revenue to range from $108 million to $190 million.
We expect subscription revenue will continue to grow at a faster rate than services revenue in Q3.
We expect non-GAAP operating loss to range from $4.5 million to $5.5 million.
For the full year 2021.
We are raising guidance for revenue.
We now expect total revenue to range from $430 million to $432 million.
We expect non-GAAP operating income to range from breakeven to $2 million.
We are modeling higher travel costs and investments in growth opportunities and high rate through the remainder of 2021.
And in 2021, we expect the post positive free cash flow for the fifth consecutive year.
I am proud of our team's performance this quarter and wed like to thank all our employees for their hard work and incredible dedication.
We will now take your questions on.
Operator, we are ready to begin the Q&A session.
Thank you as a reminder to ask the question just press Star and then the number 1 on your telephone keypad again. This press star and then the number 1 on your telephone keypad and if you need to withdraw your question from the queue press the pound key.
Please standby will be compiled for the Q&A roster.
Okay.
Our next question comes from the line of Matt Stotler from William Blair. Sir Your line is open.
Hey, everybody thanks for taking the questions.
I guess to start off great to see.
The.
Tuck in acquisitions here, the 1 cloud acquisition.
We'd love to get maybe some color on how that came about.
The post part of the viewers for a couple of the year. So.
Could you just share some similar thoughts that led to the decision to buy versus continuing to the partner in this case.
Yes sure.
The.
We had been working with them since July of 2019, OEM on your product as you alluded to and.
From our point of view.
<unk> the spirit data systems.
There is a very important part of what we do.
We have a lot of.
Use of that OEM had a lot of customers using the connectors.
And I firmly believe that if a strategic technology you own it.
It's just a lot safer you can do better integrations.
Can be more aligned better security.
And we had worked well together really bright group of people on 1 cloud very good people and so it was the.
Tuck in the tech not strategic technology by I would say always on the strategic.
And.
The team wanted to join the others.
Good thing so we expect the integration of of really smoothly.
<unk> worked with them for so long.
Got it that's helpful.
And then maybe just 1 more on on ESG, maybe isn't true.
Julie.
The last time, we meet I guess the firsthand the talks about this.
The last earnings call of about a week after you've kind of officially announce the products.
And Theres still kind of figuring out some things on the go to market front any progress that you can share in terms of the.
On the packaging pricing go to market around this product in the in house progressing.
Well sure.
Oh go ahead, Martin I would also come out on the please.
Go from there.
Well.
I would say of that.
We've made really good progress on.
Understanding the market we've seen.
Some good progress on terms of growing pipeline.
We've closed a few deals.
Julie's team I'll, let her comment on that are working real hard to optimize the product.
So we're seeing.
You see out in the press.
Clearly the everyone's talking a lot of powder and even though.
A lot of the regulations are approved yet or or or.
Fully baked you can see the writing on the wall and the.
The reason, we know that of the customers are calling us and we're seeing that type of drop but in terms of optimizing our product I'll turn that over to Julie.
Sure as Martin said, we're we're pleased with the momentum of how the solution is performing well.
On the prospect conversations pipeline is building the conversations help us.
Let me find defined on the solution for the market and the.
Of the technology capabilities that we need to lead on this.
In this market.
Okay.
Great and thanks again for taking the questions.
Thank you. Our next question comes from the line of Alex <unk> from Raymond James Sir Your line is open.
Alright, Thank you Marty as Julie on the new marketplace, some really impressive templates and connectors available of the gecko 2 questions around the first on the connectors and all of the data integration can you just remind us the strategy there relative to the W. Data solution on those just kind of light versions of versus much greater functionality with W. Data.
And then second 1 of the important kpis, you're going to be tracking in terms of success of the marketplace and opening up the platform over the next couple of years is it based on how many partners of building customer usage or any other color there would be great.
Sure as.
As far as the metrics 1 of the process of defining those now from Dolby classic metrics for the marketplace success in terms of usage download of adoption engagement and so forth.
And the the.
Of the connectors are.
Starting points for customers, who want to begin using the the.
On the capabilities of W data on our our broader offerings.
The strength of the data platform.
Okay, Great and then just a follow up from Jill on the revenue growth of 63% coming from new customers in the last 12 months I think that implies you're landing much larger with new customers can you just help parse out what's driving those higher deal sizes of is it coming from the partner influenced deals I know Marty mentioned the 4 solution win.
In the Europe.
<unk> was another higher price solutions like global staff any other color there would be helpful. Thank you.
Yes, and thanks for the question and Inc.
Yes.
Actually a combination of not only larger deals, but also continued add on sales to those new customers, so and it could be that they're coming in the door in legislation.
Pulling in the other stations on ways. So it is just the combination of.
A lot of different very strong activity that we're seeing across solar solution.
Okay. Thank you.
Thank you. Our next question comes from the line of Tom Roderick of Stifel. Sir Your line is open.
Great Hi, everybody. Thanks for taking my questions.
Marty let me start with you I mean, I think you've been pretty clear so far on this call that it would be and saying that it's a little too early.
Suspect that the results we're looking at in front of lots of driven by ESG, but.
But I'd love to understand what's really kind of behind the pickup in customer activity. We look at these metrics that are accelerating on it kind of all key metrics there had been blowing away the expectations and yet some of the things that perhaps your investors you are talking about the most might not even be happening just yet if I think about SaaS on the ESG.
And.
Some of that.
So help me to understand what you're seeing that's driving a pickup in activity maybe to pick up on win rates.
Where it's happening is it still predominantly U S are we are we in fact seen Europe kicking into these numbers now and it is just the talk around ESG, creating new deal activities, even if the not purchasing the ESG solution or is that still too often too far off on the future.
Hey, Tom Thanks.
That's the question I could go on for quite a while.
But I would start by saying that.
The performance has been very broad based.
I mentioned that debt.
And I've always talked about a portfolio approach, we have the number of different solutions management reporting the SEC integrated risk and the.
On the interim reporting GSR yet.
Yes, I can.
Quite a lengthy list.
The the thing that we've always been very successful out of that portfolio approach.
And each solution can have some noise in it from time to time of a little weaker quarter than the very strong quarter, just depending on how deals close and things.
It's always given us of really smooth.
Bookings trajectory when you average all of those out in this quarter.
Almost all of them produced really good sales and so it was pretty broad base, we keep saying that the broad based.
And the.
No I would agree with you of 100% debt ESF and ESG our upside.
Did do as expected Youssef, it's tracking the SEC business that we started 10 years ago and that is a long tail of solid growth ahead for us.
And then the same thing I would say about ESG, we will see some revenue from this year, but it's not going to be that material to our business.
And all of the upside there as of 2022 and 2023, that's when the.
The activity will really pick up.
As I mentioned.
We're very pleased with the use.
Use of sales to date.
Back loaded because of an annual report and we're seeing the pipeline grow very nicely.
And so.
Yes, I think the the good news for investors to hear is that all of that upside the head of us.
And we're just our core business is performing really well is that partially because of the COVID-19 I think partially but I think thats the long tail to it.
The.
We talked about Europe, being a bigger and bigger percentage, it's trying to be it's growing faster, but north America is growing faster so.
Pretty much across the board broad base.
Solid performance everybody on the company is getting better at what they do so that's it.
And more demand. So those are sort of the core drivers of it and there is not 1 that you would say on.
Cap markets was stronger than normal that's for sure but.
In general it was very broad based.
Excellent Okay. There's a lot of excited about the will keep checking in on the problem.
On the new items, but that's great. Thanks for the detailed.
A follow up for you a much simpler question I apologize if I missed it but is there any impact from 1 cloud in the in the guidance.
So.
Marty had mentioned earlier in the call of about 1 part of being a smaller.
It's more of a strategic acquisition and the.
Material charges on the results, we have modeled into our forecast and it is included in our guidance anything any of the operational results related to 1 cloud, but they really are not.
The big impact on or it's not a part of the growth.
Our guidance raise of not being driven by that acquisition.
No material revenue is what youre, saying the correct yeah, that's correct excellent share again.
Okay. Thank you I'll jump back in the queue I appreciate it.
Thanks.
Thank you. Our next question comes from the line of Andrew Vegas Ferry from Varian, Inc. Sir.
Sir your line is open.
Hi, everyone. Thanks for taking my question My first 1 I would like to ask on SaaS I know, it's still early days, but 1 of the things we've heard from the advisory firms. There is that usually the customers are the issuers have 3 options. They can either do it themselves.
Third party software solution like <unk> or outsource that.
But that even if 2021 day choose 1 of the other solutions that wouldn't be the final mile software that could eventually move into the direction because of the expense or the resources needed to do it themselves.
Is that the type of conversations you are hearing and would you agree that's why you feel at the long tailed opportunity.
Yes, I think I think you hit the nail on the head I think debt.
The same thing happened the North America.
We entered the market late invested heavily he built a really sophisticated powerful tool.
And when we got on the market most of the customers were either outsourcing it or some other sort of bolt on applications.
They were.
20% of <unk>.
Cost of our solution.
But you saw the end result, when you put a really good product out there that minimize risk for the customer producers of really high quality output in terms of their disclosures on reports you win the battle. So I was clear call or 2 ago of that we didn't expect us to take this whole market by storm, where the premium solution.
The people sort of have to learn what they have to do and learn the pea.
Pain associated with it.
And then there is more and more requirements as you go or they have to do more different types of tagging. The following year every time the hurdle gets higher for the bolt on solutions.
And so yes.
We expect to see a really long tail, it's very similar to the SEC market. We've gone through of North America, we have that we.
We have that advantage having watched the Meanwhile, we're closing really good business of yourself in terms of the quality of the customer of the deal size.
And you know of each countries of all different how we're doing but we have a really good plan on the pipe of building really nicely as you recall.
Most of the countries delayed yourself.
So a lot of the countries are just.
Seriously from the first time in the second half of this year, but I think you've got a real good handle on what's going on there.
Thanks, that's helpful and then alright.
Alright, maybe on the Jill if you can help on this in terms of the contribution from capital markets. I mean, you've mentioned it was stronger.
Can you maybe give us directionally if not quantitatively.
What that contribution is.
Has it sequentially.
Become bigger in Q2.
So.
We don't disclose discipline of that deal size of that is exploration, but it did have we did have an upside in Q2 related to that there'll be some amount that the selby closings through the end of the year that will be competing to the end of the year and that's included in our guidance updated guidance and so what we would.
That is that there is the potential from our upside depending on that market, but there's just too many variables for rest of you really know.
How that's going to.
On to go through.
I would add debt.
When we manage the business, we're pretty conservative and we model GAAP.
Markets as upside.
Every quarter.
1 of it outperforms, obviously, it's good for the business, we do the same with the.
We are very very moderate models for yourself.
And if and when it takes off that Baltimore all upside. So we model all of these different.
Our solutions.
Conservatively knowing numbers that we can we can reach in general.
Yes, I mean cap markets did outperform but remember we are of a very small percentage of that market that market is still pretty much dominated by.
The printers the.
From a bunch of structural reasons that are not anything about our services. Our software is just how legal firms work and so.
Even though we did outperform its not like the.
Big part of our business by any means.
Got it thank you.
Thank you. Our next question comes from the line of Terry Tillman from <unk> Securities. Sir Your line is open.
Hey, Tim this is kind of of <unk> on for Terry Tillman. Thanks for taking my questions first 1 from me we've been hearing from customers looking at the ESG solution that there are there are numerous data collection of elements and frameworks to be addressed there I'm. Just wondering what are the implications of the the 1 cloud technology as it relates to ESG reporting.
Got it going forward.
Well I think debt.
All of.
All of the solutions, we deal with.
It will have as much connectivity as any of them and possibly more.
All of the different parts of ESG.
Also on other little solutions people use and so we're going up the full data from a lot of different places in the prep work on it so.
Clearly that was a big part of our motivation with 1 cloud would play a big role on that.
Especially of the connecting.
The preparation of the data as it comes in.
The frameworks, we're looking at different ways to deal with that we have several different database of terms that were looking at using for existing customers trying to optimize the several frameworks.
I think the whole world, including US is hoping that the planet settled on 1 or 2 of those frameworks to support so many but we can do that we're prepared to do it the data collection of another.
Obviously nuance of the ball this on.
There is work you have the breeders questionnaires. There is audit work that has to be done on we have an audit solution, but for the over that.
And then.
As I've talked about before we're working on a lot of workflow stuff the.
We will start to come out of the pipeline at the end of this year, it's already starting to come out some of our data collection stuff. So we're really well positioned to address all of those.
The different needs of ESG and Theyre not dramatically different with the exception of the frameworks than a lot of the stuff we're doing already.
Great and then just a quick follow up from me.
Just curious on hiring goals and thoughts on sales capacity moving forward. Thank you.
Well.
You say hiring goals.
Sure.
I'll take some.
Some leeway of Whats Ya man.
We are surprisingly finding good talent, we're very pleased with.
Our channel the acquisition team is just knocking the ball the park.
We're adding heads primarily.
And the sales quota.
Quota carrying and also inside salespeople.
And then we're also adding heads on R&D.
We have a lot of things we want to do of the product and I always talk about.
Durable growth and I believe the for durable growth and we think we can grow this company for for an extended period of time.
We need to have high value products.
Enable us to charge more on that are sticky.
And so we're investing in the product because we see the markets that we can serve where there are some really big markets that we can address and so.
That's 1 of the heads of being added and were having good luck of filling those heads. It always takes time, we're very picky.
We really focus on high level talent, but we're doing really well on in terms of meeting our objectives.
Of what our objectives are we really don't comment on that a little.
But it'll be pretty clear as we move along.
What was the operator solar.
The SMC OEM, so sorry about that and our next question comes from the line of Mike Grondahl.
From Northland Securities Sir Your line is open.
This is Michael on for Mike.
Maybe first off just on those.
Some of the partner deals were those completely new logos for that at all.
On the health care company or are those.
<unk> already had some existing solutions on there.
I know the auto solution, we already had existing solutions on their health care provider I think it wasn't new logo, but I'm not 100% sure.
Got it and then maybe just on the marketplace can you talk maybe on the strategy of this little bit more.
You cut out just sort of isn't more.
Well, let's talk about the strategy of the market for all of them.
And again, the initial phases of the marketplace, focusing on easier and faster adoption of solutions on our platform faster time to eastern value for users customers and engagement with our partner ecosystem, so indirect monetization showing customers the possible.
Alrighty of what can be done with our platform.
The evolve the marketplace and move towards enabling third party builders.
In later phases.
Direct monetization and capture that network effect.
Kimberly.
Grow adoption from the.
The strategy is to.
Initially started out with.
Targeting customers easier faster adoption of some sort of instead of all of it truthful.
So for performing the marketplace.
Got it Thats helpful.
There are no further questions on the queue.
And this concludes our question and answer session and speakers if you have any remarks.
Okay.
No I think we're done thank you very much.
This concludes today's conference call. Thank you all for participating you may now disconnect.
Okay.
Good morning.
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