Q2 2022 Netscout Systems Inc Earnings Call
Graham is about to begin.
[music].
Ladies and gentlemen, thank you for standing by and welcome to in that Scouts second quarter of fiscal year 2022 financial results Conference call. At this time all parties are in a listen only mode until the question and answer portion of the call.
As a reminder, this call is being recorded Tony Piazza Vice President of corporate finance and his colleagues at Netscout or on the line with us today.
If you require operator assistance at any time, Please press star Zero I would now like to turn the call over to Tony Piazza to begin the company's prepared remarks.
Thank you operator, and good morning, everyone welcome to Netscape second quarter of fiscal year 2022 conference call for the period ended September 30th 2021, joining me today are a Nielsen Gall Netscout, President and Chief Executive Officer, Microsoft Windows, Netscape's, Chief operating officer and.
<unk> <unk> executive Vice President and Chief Financial Officer.
There was a slide presentation that accompanies our prepared remarks, you can advance the slides and the webcast viewer to follow our commentary both the slides and the prepared remarks can be accessed in multiple areas within the Investor Relations section of our website at Www Dot net scout dot com, including the I R landing page under.
Financial results the webcast itself and under financial information on the quarterly results page.
Moving on to slide number three today's conference call will include forward looking statements. These statements may be prefaced by words, such as anticipate believe and expect and will cover a range of topics that are not strictly historical facts, such as our outlook or market opportunities and market share key business initiatives in future <unk>.
<unk> plans, along with their potential impact on our financial performance.
These forward looking statements involve risks and uncertainties, an actual results could differ materially from the forward looking statements due to known and unknown risks uncertainties assumptions and other factors, which are described on this slide and in today's financial results press release as well as in the company's annual report on Form 10-K for the year and.
Ended March 31, 2021, and the company's subsequent quarterly reports on Form 10-Q, all on file with the Securities and Exchange Commission net.
Netscout assumes no obligation to update any forward looking information contained in this communication or with respect to announcements described herein.
Let's turn to slide number four which involves non-GAAP metrics.
While this slide presentation includes both gap and non-GAAP results unless otherwise stated financial information discussed on today's conference call will be on a non-GAAP basis, only the rationale for providing non-GAAP measures along with the limitations of relying solely on those measures is details on this slide and in today's press release the.
Measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.
Reconciliations of all non-GAAP metrics would be applicable GAAP measures are provided in the appendix of the slide presentation and in today's earnings press release.
There are also available on our website.
I will now turn the call over to inhale for his prepared remarks are nil.
Thank you Tony Good morning, everyone and thank you for joining US today, let's begin on slide number six with a brief recap of a non-GAAP results for the second quarter and the first six months of fiscal year 2022.
We are pleased with our second quarter reserves, which have contributed to a solid foundation as we move into the second half of the fiscal year.
Strong software only product revenue growth in the second quarter subordinate our overall revenue increase in his own margins and improve it or diluted earnings per share the ear over the year basis.
Revenue increased more than 3% in the second quarter to two.
211, 9 million dollar driven by product revenue growth of more than 10%, which is partially offset it by a decline of less than 3% in the service Avenue.
We were able to service provider consolidation and legacy product line atrophy compared with the same period last fiscal year.
Diluted earnings per share increase approximately 24, 24% to 47% compared with the same quarter last year.
On a year over year on.
And a year to date basis for the six months of fiscal year 2022 at Avenue increase more than 3% 241 hundred $2.2 million. They run by product revenue growth of more than 12%, which is partially offset by a decline of 3% in service Avenue for the same reasons previously mentioned for the quarter.
Diluted earnings per share increased approximately 22% to 67% for the first half of fiscal year.
All these comparisons relate to the same period in the previous in the prior fiscal year.
Less now move to slide number seven for some perspective on market trends and business insight.
As guardians of the connected world.
Connected world our solution continues to be right.
Provide borders less visibility in cyber security solutions that assured and secured the performance availability and security of our customers digital.
Ecosystems.
Our customer to collaborate the solutions to complete a compete more efficiently and effectively in the new economy, which is increasingly essential given the most recent challenges brought about by COVID-19 pandemic.
Looking ahead long term technology trends, including <unk> digital transformation through cloud migration and the requirements were greater cyber security protection.
All setting the stage for a NASCAR continued advancement.
Elaborating on the cyber security area recently really they're a threat intelligence report for the first half of 2021 in the report we noted that the global cyber security classes has continued to accelerate at that frequency that up and on track for the end of the record.
Record setting year, the impact on both public and private organizations is tremendous.
And these groups continue to seek solution that can assist them with these enormous challenges while keeping the organization safe.
It give breathable omnis cyber solution, we are well positioned to continue supporting customers in this area Ah Romney cyber solution combined might've, our leading service assurance monitoring troubleshooting. It for I think capability with a cyber security intelligence detection in mitigation solution.
We are already starting to see interest in this rant and Michael will discuss some advances in this area later on in his remarks.
As we expect our new cyber security solution to play a larger role in a a growth next fiscal year. We're also analyzing key metrics for this area of our business and plan to start reporting on them in our fiscal year 2023.
Now I would like to turn to our customer vertical to provide some more perspective and performers and their previous.
Obviously mentioned technology trends.
During the quarter as our customers Dell with the challenging supply chain environment, and an experienced broker experienced procurement issues, our software only solution enable them to utilize it by this mode effectively by accelerating the timing of their purchases with us. This move some deals that had been previously eczema.
Factor in the second half earlier in the fiscal year. Conversely, the rise in software only deals also help to mitigate potential first planned on our operations folks of late in difficulties as well.
In our enterprise customer vertical at Avenue grew more than 70% in the first half of fiscal year 2022, compared to the same period last fiscal year.
Our organization, our big need to spend again as they emerged from the pandemic and and restart previously delayed projects.
We expect this spending momentum to continue and anticipate mid to high single digit revenue growth in our enterprise customer vertical for the full fiscal year based on our current deal pipeline.
Michael with highlights over the customer <unk> during the quarter in this vertical in his remarks.
Our newer a newer enterprise products related to smart edge monitoring for remote work environment as well as well ever Omnis cyber intelligence solutions, which address the security landscape landscape have been gaining kind of customer interest.
We expect a greater contribution to result from sales of this product in our next fiscal year as customer of this start to reopen such.
Such conditions will allow us to build a pipeline as our sales team resumes traveling conducts more in person customer meetings and complete more proof of concept demonstrating the value of a solution and saving time cutting costs and reducing the meantime to resolution.
Moving to a service provider customer vertical for the first half of the fiscal year at Avenue is down just under 1% compared to the same period in the priority fiscal year.
Looking ahead, we expect fire deployments to continue and we're also advancing the radio frequency propagation Martin Lee Project project borders previously received which will assist customers and blending the network.
How would we also note that cautious spending and vitamin the service provider customer vertical as well as provider consolidation and atrophy of legacy product line, which has resulted in lower several services Avenue.
As such based on our current deal pipeline, we anticipate that this vertical predict speeders flat mid.
Mid single digit revenue decline.
The first fiscal year.
I would also like to point out that we received a second large.
<unk> related order from the year, one domestic service provider during our second quarter, Michael will come in more on this service provider when during his remarks.
Now, let's move to slide number eight to review at outlook with.
With the first half of fiscal year 2022 behind Us <unk>.
Solid foundation to build on and are excited to continue working toward meeting our financial and operational objectives for the fiscal year.
We continue advise our network with our borders initiative. This initiative is focused on expanding our business with getting customers by leveraging our incumbency to access both existing and new budgets acquiring new customer through new consumption choices and expanding our reach into high value adjacency that can leverage over smart.
Slide data such as expanded cyber security and big data analytics.
As the World continues to emerge from the pandemic with the main focus on meeting customers need for service is Jordan and cyber security solutions that saw some of the connected world stuff a salad.
Based on our results to date and our current deal pipeline via reiterating over outlook for outlook for that low single digit revenue and diluted earnings per share growth in the fifth full fiscal year 2022 gene will provide a recap on the numbers in our remarks.
I look forward to sharing a a prerogative with everyone going forward as the fiscal year continues to enforce.
I will now turn the call over to Michael for additional update. Thank you and good morning, everyone. Slide 10 hours lies the areas I will cover on today's call.
On the enterprise customer vertical front, we are seeing increased interest in our service assurance and cyber security solutions as organizations emerged from the pandemic and the focus on the important project.
In terms of service assurance projects. Some of the drivers are data center transformation and business critical applications as soon as project. Meanwhile, our new Omnis solutions architect in greater interest from the cyber security.
From our survey sexual solution perspective in our enterprise customer vertical during the second quarter.
Although eight eight figure service issuance deal.
A major domestic provider of human capital management services.
The company depends heavily on its core business applications to fulfill its business obligations and found that his previous approach to solving issues was overly reactive and labor intensive making it ineffective and costly.
Using our and genius technology be demonstrated expedited issue resolution, which allowed the customer to identify and resolve in less than half an hour problems that historically required large water meetings, and many man hours or even days for resolution.
The needs Forefeel Biosolutions. In this example are not isolated to this company.
Today, while the largest organizations still struggle with exporting complexity call. This that existing tools are challenged or.
That exist includes a result challenge to resolve also oceans remain well suited to reduce their meantime resolution.
On the cyber security side in our enterprise vertical.
Or on the security solutions are beginning to gain traction.
During the quarter, we want a high six figure deal with a domestic educational institution that purchase bought our omnis security solution as well as our visibility as a service or vast offering we want the deal against the incumbent due to the superior superiority of our security data set as well as our pet.
Entered and differentiated ESI technology, which has gained prominence industry in the industry over the past years.
And the service provider customer vertical he continues to see momentum around five five.
Five G globally, some customers are continuing their planning with Neil radiofrequency propagation modeling projects, while others are advancing their deployment as O'neill mentioned during the second quarter, we want an eight figure deal with a leading pier one domestic service providers. This is the second five G related ordered that we have.
Have received from this provider as they accelerate that five G buildout and offerings to compete with domestic industry leadership, our market leading solutions combined with a rep as a responsive customer service solid relationships and strong incumbency continued to greenhouse business from this provider as they events.
Offerings.
Terms of go to market activities, we continue to launch new offerings and advance our partnerships and collaborations.
From the perspective of offerings, we recently announced the launch of the on this cyber intelligence solution by leveraging that Scott.
Marketing service issuance technology. The on this cyber intelligence solution can provide insight into normal anomalous network behavior to help mitigate networks.
Earlier in the high Tech lifecycle and stop future attacks.
We also announced the launch of our visibility as a service or offering which provides turnkey protection for customers business critical applications and to use our services on a subscription basis. This service allows companies to leverage the deep expertise of the net Scott vast engineering team to help monitor and troubleshoot.
<unk> as well as helped alleviate the resource faced by IP organizations worldwide.
In terms of partnerships and collaborations recently allies, the partnership with Paolo Alto networks.
Following the integration of a ddos product with the security and orchestration product. This integrated solution will help enterprises reduce risk is increased service availability by enabling secondary operations.
Centered centered to detect.
Analyse and mitigate.
Secondly, threats in the complex and complex type of environment.
From a collaboration perspective later this year through the activating it AWS.
Re invents show in Las Vegas, two demo our collaboration with either guessing cloud migration and security areas.
Includes my prepared prepared remarks, I will now turn the call over to Jean.
Thank you Michael and good morning, everyone I will now review, our second quarter and first half fiscal year 2022 metric as a reminder, this review focuses on our non-GAAP results unless otherwise stated and all reconciliations without GAAP results appear in the presentation appendix, regardless I will note the nature of any.
Such comparison Sly.
Slide number 12 details are results for a second quarter and first half of fiscal year 2000, 2010, focusing on the quarterly performance revenue grew three 2% from the same quarter in the prior year, two $211.9 million product revenue grew 10.5%.
<unk> year over year, primarily due to higher software only product sales software only product revenue with 45% of service assurance product revenue compared with 27% in the same period of the prior fiscal year service revenue declined 2.7% over the prior years.
Water as we stated on our last earnings call. The decline in service revenue is primarily attributable to nonrenewals associated with service provider consolidation and legacy product line.
Second quarter of fiscal year 2022, gross profit margin with 78, 3% up 3.6 percentage points over the same quarter last year. The increase is primarily due to the higher contribution from software only revenue, which has a higher gross margin and lower contribution for.
Radio frequency propagation modeling project revenue, which hasn't lower gross margin compared to the same period in the prior year.
Shortly operating expenses increased 4.4% from the prior year largely due to higher sales incentive compensation attributable to higher revenue increased marketing program spending and at one time accrual reversal attributable Paul two legal related expenses and penalties that occurred in the prior.
Yeah, it's quarter, we reported an operating margin of 22.3% compared with 19.4% in the same quarter last year diluted earnings per share increased by 23, 7% to 47.
38% in the same quarter of the last fiscal year.
Turning to slide 13, I'd like to review key revenue trends for the first half of the year for the first six months of fiscal year 2022, the enterprise customer vertical revenue grew approximately seven 5%, while the service provider customer vertical revenue decline approximately point now.
<unk> percent for the first six months of the fiscal year approximately 52% of total revenue was generated from the enterprise customer vertical with the remaining approximately 48% of total revenue generated from the service provider customer vertical.
Turning to slide 14, which shows that geographic revenue mix on a gap basis revenue by geography continues to be domestically waited despite international revenue increasing compared with the same period in the prior year. There was one customer that represented 10% or more of revenue in the quarter, but no.
Such customer for the first half of the fiscal year.
Slide 15 details our balance sheet highlights and free cash flow. We ended the quarter with cash cash equivalents short term marketable securities and long term marketable securities of 475 $8 million, representing a decrease of $18 $1 million since the end of the fair.
Quarter free cash flow generated in the quarter was 21 $6 million, we repurchased 24 $6 million or 921299 shares of our common stock during the quarter at a weighted average price of $26.
75 cents per share.
We currently have capacity in our share repurchase authorization subject to market conditions plan to be active in the market during our third quarter from that perspective as of the end of the second quarter, we had $350 million outstanding on our $800 million revolving credit facility that matures in July of 2020.
Six.
To briefly recap other balance sheet highlights accounts receivable and that was $162.9 million down by 34 $8 million from the end of March.
<unk> was 64 days versus 75 days at the end of fiscal year 2021, and 65 days at the same time last year.
Let's move to slide six four commentary on our outlook I will focus my review on our non-GAAP outlook.
As of now noted in his earlier comments, we are reiterating our non-GAAP outlook issued during our first quarter earnings call on July 29, 2021 for fiscal year 2022, the expected revenue range is $835 million to $865 million, which employ.
<unk> low single digit growth and reflects the slight pressure on service revenue that we continue to experience.
Service provider consolidation and legacy product line the anticipated effective tax rate is expected to be between 21, and 23% assuming approximately 75 million weighted average diluted shares outstanding the non-GAAP diluted earnings per share range is expected to be between one.
And 71 cents and one dollar and 77 cents.
I'd also like to offer some color on a non-GAAP outlook for the third quarter of the fiscal year as we assess the opportunities in front of us.
That third quarter revenue will grow in the low single digits on a year over year basis. We also anticipate that the product mix for the third quarter will consist of higher radio frequency propagation modeling revenue and due to the labor intensive nature and higher cost of this type of revenue, we expect a lower gross margin in the.
Third quarter than that of the same period in the prior fiscal year. Accordingly, we anticipate that are diluted earnings per share in the third order will be lower by mid single digits compared with the prior year's third fiscal quarter.
That concludes my formal review of our financial results before we transition to Q&A I'd like to quickly note that our upcoming IR conference participation is listed on slide 17. Thank you everyone and are now turn the call over to the operated to start Q&A.
At this time, if you would like to ask a question. Please crestar one on your telephone keypad, if you wish to remove yourself from the queue. Please press the pound key we do ask in the interest of time that you limit yourself to one question and one follow up.
We will take our first question today from Matt Hedberg with RBC capital markets. Your line is open.
Hey, Stenberg Superman hedberg, thanks for taking our questions. So could you talk a little bit about the strength and product revenues this quarter sounds like it was around software.
Is that what drove bell performance or is it simply some deal pull forward.
And then maybe what's what's the view around product for the second half of the year with no no easing comps.
Yeah. Thanks so.
We talked about there are multiple trend, which were in favor there was pent up demand.
And the enterprise from last year.
Our quarter business.
It continues to be strong some larger fields.
Even though some of our new products.
While they a lot of interest but still.
Sales cycle for them.
Has been much longer at the same time, our customers, having a lot of confidence in our product and have a solution and directions and that's why they have been spending more money on.
On our solutions versus some of that stuff, especially since we our software solutions don't have.
The challenges of supply chain and other things.
And lastly, there was.
There was some.
Orders, which we are able to pull through especially in service provider from the second half. So overall I think there was a lot of movement from the second half.
As to the to the first half, but I think they are bottom up sites also which we are able to drive because of a combination of software only solution, which makes it more price competitive while driving higher gross margins.
And because of the confidence larger many of our large customers have in us in terms of the direction of the company and the investment we have been making into corporate time.
Thank you and they are very helpful. And then any commentary around the federal business with the school fiscal year and here I know you called on a good pipeline last quarter. Historically, there have been some puts in case there is curious and that you're on federal activity. This corner.
Yeah, I think that has been generally flirtation maybe didn't have some comment on that.
Maybe Jim you want to come in the shower.
I would say overall the government vertical grew around 30% four Q2 and in that protocol the federal.
The federal portion of that which is mostly the department of defense grew in the upper teens as a percentage. So it was a good federal quarter for us.
Great nice to hear thank you.
You're welcome.
We will take our next question today from Eric March Newsy with Lake Street. Your line is open.
Yes. My question has to do with these services line.
I need to get a better feel for that.
Right now at least at the Midway point of the year off about 3% and I'm wondering where you see that for the full year in other words back at that same kind of Dejectory does the front half.
Sure Hi, Eric This is Jean.
When I look at first half of our second half and assuming the midpoint of guidance I would say that trajectory for the second half has to be a consistent percentage of revenue decline at around 3% for the second half so that would give you around 3% decline for the full year.
And what's behind this is this we're we're kind of rolling off hardware maintenance contracts in there.
No not being replaced.
Kind of revenue recognition issue between software products, where they come in the revenue line, what's what's the key driver of this minor decline.
I think there's really two pieces to that and as we mentioned I think on the earnings call last quarter.
The consolidation of two of the largest tier one where this strategy is to expand into <unk> and some of the acquired assets.
Tend to be older and their plan is not to necessarily use that equipment going forward. So they've decided not to not to renew our product on those pieces of the network and then the other pieces we've talked about over the last few years is in some of the.
More discontinued product lines that.
Older product lines that we have some older product lines that were required in danaher as those to get.
Left.
Product being purchased the people don't also renew their.
Service they move onto different <unk>.
Solutions that we can provide.
Okay and then.
It seems to me like the service provider side, we've got a terrific example.
Large a figure.
In the Corps, but then we've got an overall big picture commentary.
Of a flat to mid single digit decline.
Whether michael or nearly you'd like taken care to comment but.
Was that a figure transaction kind of an outlier in the Grand scheme of things.
No I don't think so but overall the issue is the international service provider. There is still in Denmark ranking on five G investment and there's still a lot of price ratios.
And sometime quarter over quarter comparisons.
Make it make it difficult when you have this life is like last year, we had a very big.
I would say it figure deal formation provider.
Which.
I don't know where that is repeat able this fiscal year, but certainly didn't happen. This time. So I think overall the maybe the yearly trend is the modern interesting one which is.
That we are being able to.
Maintain good product of Avenue.
Even at a flat for the year.
Despite that.
Flat I mean, maybe a small single digit decline mainly coming from the service revenue regime talked about despite the fact that the ESB of the projects have come down because of the software only.
So I think overall icy that trend is is.
Is much better than what we had seen in the last three or four years.
Yes, I certainly don't want to take anything away from the quarter, because I have had some hardware companies facing supply chain issues and it's nice to have the optionality that Netscout has where you are selling a software solution.
Actually benefit from budget shifts within your customers to to accommodate yet so.
Want to take anything away from that congrats on the Klinger EMEA reiteration for the year.
Perfect.
We will move next to James fish with paper Sandler Your line is open.
Hey, guys much quarter and fixing my questions.
We talked a little bit about earlier.
Ordering I guess is there any way to think about how much earlier were kind of taking from out your growth like I said.
The back half of your only are we starting to even see some 2023 orders come in is there any expert backlog of Prague deferred to think about it as a result of that and I guess also on the costs are how're you guys mitigating excellent costs associated with transport and components at this time at the supply chain issues.
Yeah. So.
Let's see if I remember all the questions you have that but the bachelorette first of them is that.
There are no pull through from 20 to fiscal year 2023 orders and it did from the second off so it was part of it was part of the full fiscal year plan any of it.
We do have.
Small component of the hardware like.
A very small portion and we don't do any custom hardware. So we had already accommodated that.
And we work with vendors, where we have the one of the top customers.
Those vendors so we get preferential treatment, so if you're able to manage any potential supply chain issue the price increases.
Proactively because we have been working with these customers for.
10 plus years.
Suppliers and such a big portion of their business.
Yes, so Jim just to put I.
I think you hit the nail on the head for the quarter just to put it in an overall context.
And since we have the software only solution.
At least one service provider customer who moved their calendar year 2021 budget from what we thought would be our next quarter into Q2.
And so given the timing of that which came in at towards the end of.
September we prioritize shipping those orders that where they wanted to use those budgets so to your point.
It did create backlog.
That we will have for the second half of the year going forward, which is part of the reason why we feel more confident about the first half of the year doing so well in the second half should be relatively commeasure it to be able to get towards to be able to get into our guidance range.
That's really great color Neil Jean.
To just follow ups there.
Actually two follow ups generally.
Dell, we didn't really hear much about that I know, it's very early days, but any contribution yet and how or how does that go to market on a ramp.
Jean is normal I guess, what was arbor's growth rate this quarter and between carrier not applause as well off Robert Thanks, guys.
Maybe I'll cover the Dell question and Jane will go over with a question.
So.
Right now we have lot of go to market activities going on and we are looking at how the teams will play and so.
We see the impact of this and next fiscal year not this year, having said that our software.
Only solution now have multiple preferred vendors, so even though the average software only solution customer still has to buy the settlement hardware.
And so now get Dell, we have two vendors and that's very convenient because.
More accessible in the international market than the previous winter we had.
In terms of Managua, so boldly going back to the context that I gave about the timing of shipping out orders. So service provider for the first half of the year, which is where we focused on getting those orders out the door by the end of the quarter.
Grew at around 3%. So we see is nil said in his comments that that will probably flip for full year, two being flat to down slightly in the mid single digits. When you look at our Ava would have had deals that were not required to ship at 930.
So on a year to date basis right now, although it looks like it's down in the mid single digits. However, as I think and they'll set in his comments. We do expect that offer is going to grow for the full year in the upper single digits too low teens for the full year.
Thank you.
You're welcome thank you.
And we will take our final question today from Kevin Lou with Kayla Company. Your line is open.
Okay. Good morning, guys.
It.
I was just hoping you could add a little bit more colored with some of the supply chain dynamics, particularly on demand for your solution are you guys, taking in any sort of benefit from kind of more software orders of customers look for ways to use our budget that they may not be able to use for solutions elsewhere.
Yes, that's exactly the thing man.
Obviously, they still need to have a demand for a solution.
The demand is defined by what day would have bought mix in the second half.
Some time, they're able to use this color Viet on a different we're not a kolenda fiscal year. So that's also create some time interesting then make because sometimes people wanted to use the budget for this.
Sometimes they won't be used for the next fiscal year. So yeah. That's that's allowed them to we have a solution, which can have <unk>.
We have bigger size deals.
Which are mostly software only which is less supply GM issues.
Other vendors and we are because our top customer we already have it demand our final for the second half.
All that results in these kind of.
Then mix what's happened this quarter.
To add.
Some additional color to that some of the large enterprise deals are multi phased.
Is by design 40 to accommodate budget.
And your budget limits and because of this this chip shortage they were able to access multiple phases into a single phase of deployment.
Yeah good point.
Great and maybe just one on security here now obviously the past two years of seem pretty significant increase in ddos attacks and I imagine that's benefitting your order growth. How are you guys looking at this from more of a cyclical perspective do you think.
You'll be able to continue to grow on top of that especially with the new solutions coming online next year or do you see kind of an ebb and flow. There were you know maybe the ddos demand goes down, but you'll have some of the new solutions to help offset that.
Yeah, I think overall, we thing that ran into next year will be higher growth in the.
Security solutions.
And as a result of it.
Ddos, maybe maybe flak from this year and next year, but the upside is coming from the omnis solution and as.
As I mentioned earlier.
We might decide to vote.
That avenue of reporting.
The security of Avenue separately motor officially starting with the next week to a fiscal year as a result of that because it probably will be much worse.
Bigger portion of the overall revenue and retain timing is right some of.
People have been expecting us to do it later.
So.
All of this.
Gavin means that we are expecting higher growth insecurity than in the overall business.
Alright, great to hear congrats on some corner.
Okay.
And that does conclude our Q&A session I will turn the call back to management for any additional or closing remarks today.
Thank you everybody that does conclude our call and we appreciate everybody spending the time with US. This morning have a good day.
This does conclude today's event. Thank you for your participation you may disconnect at anytime.
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