Q1 2022 NortonLifeLock Inc Earnings Call
Good afternoon, everyone. Thank you for standing by my name is Chino and I'll be your conference operator today I would like to welcome everyone to the Norton Lifelock fiscal 2022 first quarter earnings call today's call is being recorded.
And all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. At this time for opening remarks, I would like to pass the call over to MS. Mary Lai head of Investor Relations Ms. <unk> you may begin.
Thank you Jean Ann.
Good afternoon, everyone welcome to the Norton Lifelock fiscal 'twenty 'twenty, 2 first quarter earnings call. Joining me today to review our Q1 results are been simple at CEO and Natalie Jersey CFO as a reminder, there will be a replay of this call posted on the IR website, along with our earnings slides.
The press release and supplemental materials to defining our non-GAAP metrics I'd like to remind everyone that during this call all references to the final metrics are non-GAAP and all growth rates are year over year, unless otherwise stated of.
A reconciliation of non-GAAP to GAAP measures is included in our press release, which is available on.
On our IR website at Investor Day at Norton Lifelock Dot Com today's call contains statements regarding our business financial performance and operations, including the impact of the ongoing COVID-19 pandemic on our business and industry, which may be considered forward looking statements and such statements involve risks and uncertainties that.
May cause actual results to differ materially from our current expectations. Those statements are based on current beliefs assumptions and expectations and speak only as of the current date for more information. Please refer to the cautionary statement in our press release and the risk factors in our filings with the SEC and in particular of annual report.
Port on form 10-K for the fiscal year ended April <unk> 2021.
And now I will turn the call over to our CEO Vincent. Thank you Mary welcome and good afternoon, everyone. So before we dive into our first quarter results. Let me start by addressing the possible combination we set of AST, we confirm that we are in advanced disk.
Cushions with the board of Avast regarding a possible merger as we've said many times and the needs of key part of our strategy and we are constantly looking at the potential acquisitions and investment opportunities. Some small some larger in size.
We believe in being disciplined in our approach and playing for the long term.
So ive for when we have material developments, we will share the dose with you.
I'm sure you understand that today, we will not be able to answer any question really related to specific cases.
So now with that out of the way.
Just barely over 2 months ago at our Investor Day, we shared with you.
From a strategic path to meaningful and sustainable growth.
And the ambitious big goals. We said then should tell you everything you need to know about our opportunity that we see in front of us.
Big audacious goals on other chiefs in the short term of course, but quarter by quarter strong.
Execution creates the momentum that will allow us to meet our long term goals.
And Q1 is just that our strong execution and solid results that put us right on track to achieve our ambition.
We are off to a strong start to fiscal year 2022.
With solid financial results for Q1 the.
The direct to consumer demand for cyber safety remains a global opportunity and our Q1 results are evidence of that evolving an underpenetrated opportunity.
Overall Q1 performance was in line with short term and long term commitments.
Bookings.
Kings and revenue growth were 12, and 13%, respectively and EPS grew 35%.
We sustain our growth momentum in Q1, managing our business through the the unpredictable macro environment and the transition to post pandemic environment in many parts of the world.
At the heart of it it is critical for us to focus on product and service innovation. This is the only way we can stay at the forefront of the ever changing scope and sophistication of cyber crimes and offer consumers the best in cyber safety.
In the first quarter, we unveiled for new products.
We're doubling the number of new product introductions compared to a year ago.
As we have said at our Investor day, It is about being nimble showcasing our ability to move faster and being better by learning along the way.
S plans and.
We launched the very first integrated product with viera called the game Optimizer. This new feature on the order and 360 platform is designed to maximize gaming performance, while strengthening security freeing Pcs from programs that are typically running in the background and hugging CPU system resource.
Sources.
This is another tool in our expanding toolbox and we are excited and eager to give gamers tools that they not only need but 1.
Another new product is not on crypto, while the seed investment is in its infancy. It is another example of how we are committed to innovation and how.
And pre of looking to enable and empower the digital lives of consumers.
Digital currencies, becoming an increasingly important part of consumers' digital lives and this feature allows you to use your idled PC time to earn digital currency and our northern Crypto wallet allows you to track transference store earnings.
<unk> in the cloud.
We accelerated our pace of innovation to be the first cyber safety company to provide such of feature to help ensure our customers have a safe and easy way to mine crypto without having to make tradeoffs that could compromise the cyber security.
As retrans.
On the former company to offer a richer portfolio. We've also made great strides in extending our overall consumer reach.
In Q1 of direct to consumer revenue, which represents the majority of our business was up 11%.
Our global expansion efforts are working as Q1 growth was partly driven by record.
Within international.
While our North America business of remains larger than the rest of the world The international growth rate once again outpaced the Americas.
Similar to last quarter of direct business grew double digits across multiple countries, including the UK, Germany, France, Australia and new zeal.
Sealant.
We continue to make great progress in leveraging <unk> freemium model to broaden our reach while accelerating the free to paid conversion using our marketing capabilities.
Another area of strength is a part of business, which posted double digit revenue growth for the third straight quarter up.
<unk> grew 9% in Q1, including out of Iraq.
Key channels continue to drive the growth from employee benefits to online retail and service providers as part of our all in effort to build the most comprehensive go to market model. We recently expanded our partnerships with Lenovo for our OEM business.
Selected.
25, G Lenovo laptop Pcs will be pre installed with northern security on VPN App available now in selected markets.
While our OEM business is small it demonstrates that we will continue to explore all avenues to reach customers, who has been highly engaged in various opportunities and markets globally.
<unk> in our partner business. Our goal is to continue to build and expand these long term partnerships and increased cyber safety awareness everywhere.
In Q1 of direct customer count grew over 150000 sequentially and including Avera over 2.5 million customers year over.
<unk>, bringing our total direct customer count to $23.1 million.
This was our seventh straight quarter of net direct customer adds sequentially in the quota has been historically down sequentially driven by normal seasonality.
Our customer retention rate remained strong at 85%.
Per year, as we drive new initiatives to further improve retention overall and within specific products and customer cohorts.
As we shared at our Investor Day, we have started multiple operational initiatives targeting areas of improvement such as our first of all cohort of geographies with different customer profiles.
Customers.
Or satisfaction and retention will continue to be of long term focus for this leadership team.
Finally, before I pass it to Natalie I want to reiterate our core values and our inspiration to fulfill our vision to protect and empower people to live the digital lives safely.
We think customer first.
We innovate and grow with crappy, we own it and we are open and authentic. These are the core values that pushed us to be better every single day to make the world cyber sales.
During the quarter out we have been and continue to exercise financial discipline and reinforce our cadence of innovation.
<unk> demonstrated our ability to grow this business, we lantus the building a strong financial track record with consistent and accelerated growth.
We are far from being down of course, and we're just getting started as we look to transform our company to redefine consumer cyber safety.
And with that let me turn it over.
We have Italy.
Thank you Vincent.
1 for today's discussion I will focus on non-GAAP financials, starting with our Q1 results and then provide our outlook for Q2 and full year.
Fiscal year 2022 is off to a strong start our Q1 revenue was $691 million up 13.
Over to net year over year on an as reported basis delivering above the high end of our guidance range.
We grew bookings by 12% in the quarter, our growth was driven by broad based strength across all geos on products and included 2.
The positive impact from the FX.
Our total direct customer count increase.
14% of $23.1 million.
Adding $2.6 million customers year over year, and adding 150000, net new customers quarter over quarter.
This was our seventh consecutive quarter of sequential net customer add a testament to our growing value proposition.
Our customer retention.
<unk> of unit retention metric remained stable at 85%.
Our monthly average revenue per user or <unk> is up on a sequential basis to $8.84.
Our growing customer base combined with our strong retention rate and expanding our <unk> accelerated.
Right revenue growth of our direct business to a 11% year over year.
We continue to add more in demand products and features into the portfolio to assist our cross sell and up sell efforts keeping loyal customers engaged through their lifecycle.
As we continue to grow our customer.
<unk>. The it is important to note that our first year of <unk> and retention rate for newly acquired customers is generally lower than our total average.
But our growing product portfolio and customer centric mindset make us well positioned to foster growth with these customers, while expanding our reach to new audiences.
Based on our partner business is of key tenant of our go to market strategy and once again posted strong results in Q1 up 29% year over year, including of Vera and with broad based growth across our distribution channels.
Our employee benefits channel continues to post double digit growth with an expanded pipeline.
More small and mid market employers are discovering that our identity theft protection solutions helped mitigate the rapidly evolving cyber safety threats, including recent concerns related to unemployment and tax fraud.
We're proud of the progress we've made so far on are excited about the upcoming expansion.
Efforts in this channel.
We also drove double digit retail growth in key European countries as we continue to adapt to the market conditions in each country and focus on building the strategic partnerships needed to achieve our long term goals.
Turning to profitability.
<unk>, we remain focused on executing to achieve our long term strategy and consistently drive sustainable growth with operational discipline.
As I shared at our Investor Day, we continue to drive the core business at or above the 50% margin rate.
With Q1 operating at 51% up.
<unk> certain 10 basis points year over year.
In the quarter, we invested in performance marketing and product innovation.
With our marketing investments, we operate with the disciplined approach and new customer acquisition.
Measuring and ensuring effectiveness along the way.
While adapting.
Inc, consumer behavior shifts in the market and newer media offerings.
We keep our eyes on the marketplace and continue to evolve our marketing spend mix to expand our reach in a relevant and efficient manner.
With R&D, we continue to accelerate the pace of product introductions.
For investing to expand our product portfolio.
And provide an increasingly differentiated value proposition for consumers all the while focused on operational excellence and funding additional investment capacity through G&A efficiencies.
Q1, net income was 248 million.
And up 32% year over year.
Diluted EPS was <unk> 42 for the quarter up 35% year over year and at the high end of our guidance range.
We continue to prioritize sustainable growth and maintained strong operational discipline to deliver EPS expansion in line with our long term strategy.
Turning to our cash flow on balance sheet.
Q1, operating cash flow was $258 million and free cash flow was $257 million.
We ended Q1 with over $1.2 billion of total cash.
And $1 billion of Undrawn revolver capacity.
Please.
This does not reflect the cash proceeds from the sale of our mountain view Ellis buildings, which closed in mid July for total cash proceeds of approximately $358 million.
We continue to have a strong liquidity position healthy balance sheet and our levered at approximately 2 times net debt.
Of note now let me spend a few minutes specifically on capital allocation.
In Q1, we returned approximately $74 million to shareholders in the form of a regular quarterly dividend of $12.05 per common share.
At the end of Q1, there was approximately $1.8 billion remaining in the current share buyback.
The back program, which we intend to deploy opportunistically.
As described in the press release for Q2, the board of directors approved of regular quarterly cash dividend of $12.05 per common share to be paid on September 15th 2021 for all shareholders of record as of.
The close of business on August 23, 2021.
Now turning to our Q2 and full year outlook.
We expect Q2 non-GAAP revenue in the range of $690 million to $700 million, which translates to 10% to 12% growth year over year.
We.
Expect non-GAAP EPS to be in the range of 41% to <unk> 43 per share assuming stable currency rates.
We also reiterate our full year non-GAAP guidance presented in May at Investor Day, which is revenue growth of 8% to 10% plus year over year and EPS in the range of $1.65 to.
<unk> of $1.75.
Q1 was a great start to the year and we look forward to building on this growth momentum with our scalable Foundation.
We're excited about the tremendous opportunities ahead.
Thank you for your time today, and I will now turn the call back to the operator to take your questions, but please.
Keep in mind, we are not able to answer any questions related to any specific M&A at this time.
Operator.
Alright, so as a reminder to ask the question you will need to press star 1 on your telephone.
The result of your question press the pound key again that is star 1.
1 on your telephone please stand by while we compile the Q&A roster.
Yes.
<unk> again, if you would like to ask the question. Please press star 1.
We do have a question from circuit Korea from Barclays. Your non lives.
Okay, Great Hey, guys. Thanks, a lot for taking my questions here.
Maybe maybe for maybe the startup with you Nathalie just on the core business.
I was wondering if you could talk a little bit about.
How you think about the seasonality of net adds in a typical year.
And perhaps any color that you could give on on retention rates in the quarter does that.
That makes sense.
Yeah and thanks for your question second on customer Count look as you heard me say we added too.
<unk> million year over year of 150, K quarter over quarter, Yes, Youre right Q1 seasonally is lower note last year, we were right in the heart of Covid, but from.
From a from a seasonality perspective, Q1 honestly landed exactly how we expected it to.
In terms of retention our retention is stable.
685% of our is our overall unit retention.
And look.
Look what we we we are where we expected to be our focus now is on.
<unk> is on as we move forward, just driving new acquisition retaining existing customers. Both are key priorities for us.
We're not we're not only focused on staying relevant where the consumers are making their buying decisions but.
But we are just continuously driving and fueling innovation in our product roadmap, coupled with world class customer service to really keep the current customers happy and satisfied.
Sustain and grow our retention rate and again prioritize new acquisition at the top of the funnel.
Got it very helpful. Maybe maybe from my follow up for you Vincent.
Understanding we don't we don't want to ask about sort of the <unk>.
Headlines out there maybe I can ask a broader question about capital allocation.
Sure.
Maybe outside of M&A broadly how do you think about the priorities for capital allocation sort of going forward.
Yeah, I can talk about capital allocation, but first let me talk about the overall strategy moving forward is really about investing into innovation and bring more product to.
Cyber safety investing nothing to talk about marketing, but broadly defined investing in the more solid.
Go to market model, we know that this market the steels vastly underpenetrated when you take a broad definition of cyber safety and reaching out to all customers at 1 point, we said it at the analyst day, we are operating manager.
Our refund team that create leverage within the P&L, so improving capacity to drive more innovation more productivity there more marketing spend but we are also using all levers of our business, including the balance sheet in there you talk about the.
The capital net of capital allocation, it's not rocket science, the really 3 areas, we use capital for 1 is for.
Inorganic investments and.
And we talk about M&A and all capitalized investment the other 1 is buyback and the other 1 is dividends and we use all 3 in a balanced way now when we talk about balanced the way. It doesn't mean that every quarter. It will be balance also last year over 12 months was exactly of third a third.
For Earth, but we really take a very long term view of our business when it comes to investment in and use of of cash.
Very helpful. Thanks, guys I'll get back on queue.
Yeah. Thanks, Doug.
Next 1 on acute is Jonathan Reich Hoover.
The sort of Baird you on our lives.
Yes, Hello, good afternoon.
So some of its this is this is again.
Along the lines of trying to understand you are youre thinking on M&A and specifically at the analyst day session you highlight.
Delighted 30 to 35 cents from M&A as part of the bridge to the $3 in earnings.
Just curious if you can add some perspective to that in terms of how scale from an acquisition might change the timing and contribution to the doubling of that earnings.
Her from both of the aisle and then kind of the.
A follow on on when you think of scale.
How does how does the dilution factor into that its dilution something youre willing to accept and if so for how long.
So.
To be to be very clear right. So we under strict rules we cannot do.
It's probably as if a case on when to make sure. We follow all the rules, including the the UK rules considering the the 1 of the case with the thing as you know so I'll remind you what we said in May in terms of the broad business. We talk about our long term aspirational view and we said that we have multiple levers at the high level of split between.
Talk about business growth efficiencies and then use of capital and use of capital. We talk about just the capital allocation model, which has 2 prong the buyback in the M&A and we said that the way we manage the business in the long term all of those levers should be contributors to our long term.
Ration.
When we think about more tactical.
Capital of capital structure, we look on again they are to us all levers all possible with a long term ambition goal in mind.
To make sure we achieve and I'll leave it at that and hopefully you understand that.
We on the under strict rules, we intend to respectfully.
Yes.
Great that color of infant.
So the the other question I had.
Is it looks like you're dipping your toes back into the PC PC OEM channel.
And so I'm just wondering if you can walk.
Our speed through what you see around the opportunity the air.
The channel the you are likely to pursue more aggressively going forward and maybe just remind us on.
How you see the economics of that go to market years ago with some of our tech.
Walked away from that channel because of the.
Because.
And Amit.
100%, so symantec kind of almost on the majority of those channel.
In the past the decade ago of 567 years ago, those relationship have long tail and we still have a little bit of dose into our business to the as you know the economic on the long term basis take of 7.
Of those 10 year view requires more investment upfront and then profitability over time as your total customer value has the long tail 6.7 years. So that's how how it works when Simon take decided to really focus on maximizing the profit of the consumer Division to fund the enterprise turnaround they made sort.
Visions.
When we became known in the Lifelock and the 100% focused on consumers really maximizing the protection for digital labs of every consumers connected to the Internet, we said and I'll confirm that today, we look at all ways to reach the customers all go to market channels. It just they have to.
On the sense financially in the showed me the long term view and we will go in and of loved the best most diversified distribution channel for reaching all of those consumers, creating the awareness and fulfilling the demand as part of that also said, we don't have anything that we wanted to exclude from an abuse the.
To make some cheap with PC manufacturers, although we are focused on the user experience and the internet and the cloud digital lives is 1 of the ways that.
Could be could be favorable and so.
The relationship we announced with Lenovo or the few remaining relationship we have in our current.
Relation Bhushan channel are important and we will continue to look at creating capacity in our P&L to go and develop all.
Channels, if you want to go to to consumers.
That's helpful. Thanks, I'll get back in the queue.
The good thank you Jonathan.
Next question comes from the line of Matt Hedberg from RBC your non lives.
Oh, Hey, guys. Thanks for taking my question of visit I wanted to follow up on sockets question on on retention obviously.
It's clear that remains strong.
Overall, 85% I guess I'm wondering if you could provide a little bit more color on obviously you noted.
The strong sub add quarter, the last year due to COVID-19, how some of those initial COVID-19 subs are doing from Laurentian and also on the euro because I mean, yes, yes, yes, that's the only good so so the.
Your point on the 2 and I am sure second Mendan behind these questions, which is this is the first full quarter, where you leaping the.
The first big growth, we we had as we entered the COVID-19 locked in periods last year as you'll remember.
Starting in March, but really impacting this quarter. So it is the first time, we have 3 months of full quarter of 12 months looking back.
On a lot of investors and and of people were wondering where are we going to be.
Able to maintain the customer.
Current growth and we definitely have seen the.
The impact of a low quarter Q1, as you know when the summer people get out and the lesson too on the digital lives, but I think the progress we've made in expanding the the needs for cyber safety platform, which is different than just the PC and diversity.
1.
<unk> has shown and we were able to maintain not only of your of your growth, but sequential growth, which is pretty extraordinary continuing on Q1 on Q4 is a big quarter with the tax quarter and then normally Q1 sequentially is done and we're able to grow it. So we're very happy by by the result, as Natalie mentioned it's in line.
<unk> to what we had embedded into our guidance. So we are on plan and put a big deposit into our full year plan. The second question I get from investors is those people are those customers that signed in for the first time.
During the Covid periods are they going to renew at the same level and.
If you have seen in now 4 months looking back March to end of June we've seen very stable renewal rates now they are first year renewal rate. So there are lower than the average 85%, but the first year renewal rates a year ago 2 years ago in line to what we saw this quarter. We believe it's the <unk>.
It's an opportunity to.
What do we do retention rate by specific of driving specific operational initiative around the first year cohort in customer satisfaction in the experience, but we have not seen a change in behavior with what.
Some of you may have called the Covid cohort if you want.
The third question I get is is the 1 of euro of your hour slightly.
The important in there.
Retention rates.
Below our average northern customers, but not that far behind and.
Despite the addition of a little bit less than $2 million of Iraq.
Customers we've seen on.
Overall retention rates for our business that.
Below on 85% now I'll have more details of we've not made them public for obvious reason, but have more detail and I can tell you that we've improved on every line of Euro 2 continues to have a solid although small incrementally.
Our solid performance on both acquisition and retention. In addition, they have a third.
10 of I mentioned, we were learning are we building is really the free to paid conversion and we've redeployed some of our marketing capacity and capabilities to drive an increase debt conversion rate as well. So we're very pleased by the performance of all of our lines of businesses.
That is super.
Thank you for all the color and then something else that's kind of sit out on the ARPA grew sequentially than it had been growing for a while I think we always thought with Norton 360, there would be an upward bias to the ARPA I know it was the subtle increase sequentially, but it was up anything anything to call out there.
In terms of trends or anything that you noticed.
As we mentioned last quarter the.
The <unk> was roughly half of our northern our pool more focus of course on the security.
And so it lowered our aggregated RPI debt was at $9.10 before the acquisition $2.8 and E. The sense when you take the aggregate.
AG Brigade by the pure fact of adding new customers that only had exposure to security plus a few of the products, but didn't have exposure to a full cyber safety.
Platform and from here, we continue to see good traction on our pool now as you know as we continue to acquire new customers and net be a net growth overall.
The first year are poised at the word than the multiyear and so the headwind from that first year of cohort growing is then offset by the.
Slide the consistent incremental improvement from the known in 360 and the upsell into the portfolio.
Got it Super helpful. Thanks.
Yep.
Alright again, if you would like to ask the question. Please press star 1 on your telephone.
Next question on line is Hamzah further wala from Morgan Stanley You're now live.
Hey, guys. Thank you for taking my question.
Just on the.
Right.
On the subscriber standpoint.
A lot of the has to do with sort of normal seasonality, but.
I think you mentioned earlier sort of.
Post pandemic demand trends I'm wondering.
How much of maybe the the defense subscriber ads was due to the post pandemic.
Just the trend that we saw much of last year versus typical seasonality from Q4 to Q1.
So just wanted to be clear when you call dip and then tell me and see that I want to be sure we quantified correctly last year.
Yes last year, we grew sequentially between the 100000 net new customer 2 of 400.
<unk> thousand net new customer depending on the quarter.
We also know that Q1, and Q2 of the seasonally low quarter on the sequential basis, and then Q3, the more security driven in Q4 is that tax identity driven quarter.
And so growing 150000 quarter, while it's less than Q4 of course, the last quarter. It is of very strong.
Demand for <unk> in the first seasonally low quarter of sequential net customer adds. So so it's right on our plan is right on a short term and long term commitment and do we would we want to have a higher awareness in panera the faster of course, but but but we feel we feel pretty good about that plan what is the impact.
Backed off.
The Covid of post Covid market opening versus the normal effect of more people being in summertime on vacation of the month and on the beach and less on on their digital lives that that we cannot say and I think it will always be of business that.
In the win.
Winter is a bit more dominant than then than it is in the in the summer.
Thanks, Andrew.
And just maybe a follow up on the partner revenue continues to grow quite strongly.
Obviously, much lower percentage of it.
Of the overall revenue, but can you maybe give some color as to what's driving.
That in the recent partnerships.
That we should be aware of there.
And for those of you from Norton Lifelock that are listening I want to thank you for driving a spirit of growth I can tell you since we became known in the Lifelock. We told everyone look the opportunity, although we committed to a mid single digit is much bigger than that look.
Look at the Underpenetrated market. It is a business that had not been invested enough in the past as they shifted from partnership the OEM mainly into direct to consumer and build the very strong direct to consumer engine. We said it will be a much more diversified and growing every areas. There is no 1.
Sales person within our go to market with it that doesn't come.
Doing a weekly or monthly review since Avenue idea should we invest in that in the Natalie NII are going through the review is look at the investment and decided to invest we have increased our sales capacity in a few of the channels I mentioned.
On a quarter of 2 quarters ago, our employee benefits.
The channel that has been growing double digit and we continued to to build that up mentioned of course, the Oems still small on but we can do more we have R. R.
X SP business that continue to grow and then net that he mentioned that between online and.
In physical retail balancing it and really strategically moving through the different opportunities by local market has always been an effort recently a few months ago. We also started the country by country strategy that look on all of our different channels. If you want and trying to balance of investment in a coordinated way.
At the local level on that also is bearing its fruits you should see us continue to invest in our in our GT in the organization.
Thank you so much.
Yeah.
We do of a follow up question from sockets Collier from Barclays. Your non alive.
Thanks, Thanks for letting me back in queue here Vince.
Vincent You mentioned you mentioned the of Euro acquisition earlier.
I was wondering if you could just comment a little bit about what youre seeing in sort of their end markets in Europe, specifically what are you seeing in that Mark maybe just expand on what are you seeing in terms of Europe around market share.
Great and core rent the virus.
As well as perhaps the opportunity to cross sell your identity monitoring products in that Geo.
I think the latter part of your question is the right 1 I still get the question around competition in and is it like Mcafee on Microsoft on the anti virus and what is it we see the market cyber.
And safety is much more broad.
Anti virus, almost being kind of of free or commoditized product and building of the cyber safety platform around identity around privacy around new digital <unk>.
Services. If you want is really where we see the demand and in Europe is definitely driven by new.
Cyber center on identity and privacy, we introduce dark web monitoring and many of those countries. We are trying to build on.
On a richer portfolio of our northern identity for all of those customers and and you touched it the opportunity to cross sell of currently strong focus on identity into and the view of freemium.
<unk> installed base is a huge potential 1 happened over 1 corey with multi quarter to build debt offering and drive that the awareness and then that conversion, but it's a huge opportunity for us for sure.
Got it very helpful. Thanks.
Good.
Yeah.
Alright at this time there are no more questions I'll turn the call over back to Vincent <unk> CEO for closing remarks.
Excellent. Thank you channel well, let me be very short thanks for joining thank you for your support obviously will continue to drive our business towards our long term ambition and we look forward to connecting with you very soon.
Thank you.
This concludes the conference call. Thank you.
[music].