Q1 2023 Liveramp Holdings Inc Earnings Call
Well fuels stronger long term growth.
Our second growth initiative. This year is to drive continued ats adoption amongst publishers and marketers and accelerate our international expansion.
Ats has emerged as the global standard for addressable in a post cookie and device side the world.
In fact since Sara.
Verification service recently found that ramp I had the largest active cookie less footprint of all <unk> in the market with a 70% absorption of its I D into the midstream.
Meaning that are both deployed on publishers.
And actionable for advertisers.
This is due in large measure to our growing partnerships with the world's largest publishers.
<unk> hundred in total representing more than 11500 publisher domains.
Ats as a key source of competitive differentiation for live ramp in both the U S and importantly international markets as today, we are the only identity solution with global scale.
This is reflected in our recent international momentum.
In the quarter International bookings were up 40% and revenue was up nearly 40% with key deals being signed in China, Australia, Germany, and the U K.
Last week, Google announced that it was postponing its timeline for deprecation of third party chrome cookies to mid 2024.
Let me address what this means for live ramp.
Manav ramp is ready for the cookie less future today.
However, we will continue to support cookie based workflows as long as they exist.
So any impact positive or negative associated with Google's delay.
Is minimal.
Where we do see an impact is confusion in the market.
Within the industry and with shareholders.
And we intend to further increase the amount of case studies and education that we provide to the entire ecosystem.
So that our position as the essential industry standard becomes even more apparent.
For those clients, who want to continue to use cookies will support them.
For those that recognize that better performance can be unlocked with authenticated identifiers.
We provide the greatest reach and best performance.
We work with over 400 industry identifiers today.
And in a world with or without cookies, we are uniquely embraced as the ubiquitous standard that connects virtually everyone.
And everything in the industry.
A final growth initiative. This year is to expand our partner channel strategy with a focus on broadening our cloud partnerships.
In recent months the topic of competition from cloud providers has come up more frequently.
So let me address this misconception head on.
Our strategy is to enable.
Not to compete.
With the clouds and to partner closely to serve the market together.
We remain committed to delivering our technology wherever our customers data lives and have deployed key products in the cloud solutions, our customers increasingly depend on for their critical data workloads.
We are enabling customers to achieve faster returns on their cloud investments reduced data fragmentation and more easily leverage identity in the cloud.
Today, we are live in G C P <unk>.
AWS and internationally in the J D cloud, allowing their customers to deploy live ramps identity and address ability solutions with the click of a button.
And by the end of the quarter, we expect our addressed ability solutions to be live in Azure to help publishers better monetize inventory in a cookie less world.
In addition, we are continuing to strengthen our partnership with Snowflake to provide core identity resolution and identity translation solutions that will be foundational for customers to use for segmentation activation collaboration and measurement.
We are not competing for storage and compute.
Nor do we believe our cloud partners are interested in building their own identity graph and broad data connectivity capabilities.
So ensuring we create enduring and symbiotic partnerships will be a longer term growth driver for us.
Opportunity number two.
Improving operating profit and cash flow.
Q1 represented our ninth consecutive quarter of profitability and our track record here is very strong.
Since <unk> became an independent company in 2018, we've demonstrated an ability to balance healthy investments in the business with improving profitability and we expect this year to be no exception.
As we enter what will surely be a recession, we will aggressively pursue cost efficiencies in many areas of the business, but we will continue to prioritize investments in go to market and also critical R&D initiatives to optimize for long term growth.
The final opportunity I'll highlight is the opportunity to drive greater shareholder value.
On our last call. We shared that we are not remotely satisfied with lie ramps recent share price performance, we don't think it appropriately reflects our opportunity or potential.
While our top focus continues to be executing on the strategic initiatives I outlined above we also remain committed to exploring creative ways to maximize shareholder value.
In May we announced plans to opportunistically repurchase up to an additional $150 million of library of its common stock before December 31.
I am pleased to share that to date, we have repurchased approximately $80 million of that $150 million.
Yeah.
In summary, we delivered a solid quarter, but recognize that we have much work to do on top line acceleration and profitability.
While the macro environment has become more challenging we remain confident in our long term market opportunity and importantly.
Confidence in our ability to manage and win through uncertain times.
We are a critical component of our customers' data infrastructure.
And finally.
As we always have.
You can expect us to closely monitor the business quicker.
Quickly adjust as needed and.
And be good stewards of capital.
With a focus on maximizing long term value for our customers and shareholders with that thank you again for joining us today and a special thanks to our exceptional exceptional customers partners.
And to all library across the globe for their ongoing hard work and support.
We look forward to updating you on our progress in the coming quarters.
And with that I will now turn the call over to ward.
Thanks, Scott and good afternoon, everyone and thanks for joining US today Q1 was a solid quarter and in line with our expectations today I'd like to focus my remarks on two areas first share a few highlights for the quarter and next provide guidance for Q2 and update our guidance for <unk>.
The full year.
For the quarter total revenue was $142 million up 19% and subscription revenue was up 20 <unk>.
International revenue was up approximately 40% and adjusted for FX was up 49.
Marketplace and other increased 18% data marketplace, which represents roughly 80% of ongoing marketplace and other revenue was up 29.
Subscription and platform net retention were both 113%.
While net subscription customer counts increased by just five this quarter are 1 million dollar customer count was 90 up 29% versus the prior year.
Current RP O or our next 12 month contracted backlog was $295 million up 15% year over year.
<unk> ended the quarter at 409 up.
20%.
To be balanced as anticipated our bookings were soft in Q1.
International bookings, however did remained strong.
Beneath the top line our business model continues to deliver.
Most margin was 75% operating income was $4 million, our ninth consecutive quarter of profitability.
And operating cash flow was negative $33 million. Please.
Please remember that Q1 is a seasonally low cash flow quarter due to annual incentive comp payments in.
In addition, the year ago quarter benefitted from the prepayment of certain expenses in Q4 of FY 'twenty one.
These prepayments were made in order to optimize tax refunds provided for in the cares Act.
And finally, we continue to return capital to shareowners in the quarter, we repurchased two 1 million shares for $16 million and fiscal year to date, we have repurchased $80 million.
Please turn to slide five.
Before moving onto guidance as always would ask you to consider our trended performance growth trended three year CAGR of 22% since June of 19.
non-GAAP gross margin improvement of 200 basis points.
non-GAAP EBITDA increase of 100 million and $872 million of cash returned to shareholders.
In summary growth gross margin expansion operating leverage and capital stewardship.
Now onto guidance for Q2, and FY 'twenty three.
Before jumping into the numbers I'd like to provide some context for our guidance.
Since we last spoke we like you have been carefully watching the macroeconomic and media and advertising related trends.
We've also continued to stay close to our customers and their budget pressures give.
Given those factors, we felt it prudent to lower our estimates for the year.
The change to our guidance is predominantly impacting Q3 and Q4.
60% of the reduction we estimate will impact subscription revenue and 40% marketplace.
Now the bottom line, please turn to slide 16.
As you see on this chart, we are taking steps to protect our bottom line for the year and lower our expense run rates as we start laying the foundations for FY 'twenty four.
Of the 20% to $25 million reduction to our topline guide we estimate we can offset approximately $10 million through cost avoidance.
As a reminder, in FY 'twenty three we are absorbing roughly $19 million of spend that was avoided during COVID-19 as well as funding our international expansion.
And finally, given that we have front end loaded our repurchase activity, we expect to temper our pace through the remainder of the year, we will however, not hesitate to be opportunistic.
With this in mind, please turn to slides 13 and 15.
For the second quarter, we expect revenue of approximately $144 million and non-GAAP operating income of approximately $8 million.
For the full year, we now expect revenue of between $590 million and 600 million and.
non-GAAP operating profit of approximately $39 million or a margin of roughly 7% at our midpoint.
Please keep in mind this guidance excludes intangible amortization stock based comp and restructuring and related charges.
As always and given the macro uncertainties would ask that you be conservative in setting your revised models.
A few other callouts for Q2 and the full year.
For Q2, we expect subscription net retention to be roughly 104 and platform net retention to be approximately one O eight.
The sequential decline from $1 13 is being driven by an expected lower relative contribution from both net upsell and usage.
In Q2, we expect our gross margin to be roughly 75%.
We also expect to incur approximately $12 million of restructuring charges. These charges are primarily associated with the right sizing of our real estate footprint and other restructuring initiatives.
For the full year, we now expect subscription growth to be in the low double digits.
Marketplace and other given the macroeconomic environment, we now expect growth of approximately 20% for the year.
We expect gross margin to be roughly 75% for the full year.
Investment in services and continued international expansion are driving the slight year over year gross margin decline.
Finally, we are anticipating a modest negative revenue impact from FX and FY 'twenty three we would again remind everyone that we do not have any exposure to either Ukraine or Russia.
Before opening the call to questions I will now close with a few final thoughts.
While it's disappointing to reduce our back half guide we feel like it's the appropriate thing to do given the trends we are seeing and sensing.
That said, we are confident in our long term opportunity further we are taking steps to not only ensure we're continuing to invest for our future, but also to protect our bottom line. Both in the short term and also for the years ahead.
On behalf of everyone here at live Ram Thanks for joining us today, and thanks to our terrific customers.
Operator, we will now take questions.
Thank you, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad. If you would like to remove yourself from the queue. You May Press Star one again one moment. Please for your first question.
Your first question comes from the line of Olivia Elizabeth Parker with Morgan Stanley . Please go ahead.
Hey, guys. This is kristian tear one for Elizabeth.
Wanted to touch on your guidance.
Talked about longer sales cycles, and just curious if any of it has to do with the cookies deadline game delayed as marketers may feel less perhaps to look at alternative solutions like yours in the knee.
Kim.
100%.
Macro environment.
Don't see an impact on Google's deprecation delay in our business at all if we see one it would be absolutely absolutely negligible and as I mentioned in my prepared remarks.
Regardless of whether someone is committed to cookies or already prepared to move away from them in either case, we're going to support them.
Thank you.
Your next question comes from the line of Kirk <unk> with Evercore. Please go ahead.
Hi, guys. This is actually Peter Berkeley on for Kirk.
Okay.
Hey, Ron I.
I guess first one Jeff last quarter, you guys kind of mentioned that the forward guidance, we're making baking in a bit of conservatism around largely usage portion I guess and a little bit in the marketplace.
Just given the new commentary I assume.
The net.
Net change in the guide here.
Is that really just.
The macro is certainly deteriorated over the last quarter. So.
Sumit that that change is it really just entirely.
Incremental conservatism as opposed to.
Anything maybe negative in the quarter.
Peter Let me try to address that in the first thing that I would say is I would never just say, it's incremental conservatism because we call it like we see them.
But I think you pretty much answered the question yourself, what's happened a lot has changed since we last spoke in May if you think about it a couple of quarters of negative GDP growth inflation continues very strong rate hikes now, we're hearing layoffs and some of the largest corporations in most important corporations.
In America, if not the world.
And then finally I would just say we've had a lot of conversations with our customers. So based on the overall Mac overall macro economic backdrop.
Just felt it prudent to really.
Hedged going into the back part of the year.
Okay, Great. That's helpful. Maybe just one more if I could.
You guys mentioned hiring last quarter, you kind of brought it up again this quarter has been strong hiring in the quarter and that onboarding programs at sort of shortened the ramp time the reps.
It's pretty interesting as well so just curious as you.
It's Dan here today, how do you feel about the current head count.
Or are you kind of more back in line with where you want to be or are you going to continue to hire pretty aggressively kind of throughout the area.
Yes, it's really a mixed bag.
I would tell you that number one we're really happy with our ability to add 20 sellers.
And get them ramped up quickly, we think thats going to help going forward even against the.
The economic recessionary pressures that we expect.
And we will continue to hire selectively.
Key engineering areas, where its really critical for our product development.
But in other areas of our business as I mentioned in my prepared remarks.
We are really using.
The recessionary pressure that everyone's feeling to take a hard look at our own cost structure.
So in a lot of other areas, we expect to unlock operational efficiencies.
Helpful color. Thanks, Scott. Thank you everyone. Thank you.
Your next question comes from the line of Sam <unk> with Susquehanna. Please go ahead.
Hey, guys I got a few questions.
Warren just back to the answer that you gave I'm just curious.
In your outlook for the fiscal second half are you Guy.
Accurately seeing things getting worse or are you just kind of assuming things will get worse based on all the external news right now.
Boy.
That's a really good question. Obviously, we are a quarter Q1 was pretty much as to our guide and our Q2. If you look at again the guide is pretty much impacted where we are seeing and really feel the need to really adjust our estimates is really all in Q3 and Q.
Four so I'd say again, what has changed I would say, it's the macroeconomic environment. It has I would say gotten worse. Since we spoke in May I think thats definitely worse I would say our customer conversations are talking.
They are talking to us about a lot of the things that they're concerned about.
So what I would say is again as a backdrop to what I said.
Those are things that those are conversations we've been having this quarter and taking those things into account really caused us to lower our bookings outlook.
Going into the second half of the year and as a consequence lower our overall estimates.
Okay got it got it and.
Scott in your prepared remarks, you talked about certain industries.
Seeing softness and then you talked about Smbs.
I was just curious on the SMB side, how big is that as a portion of your <unk>.
<unk>.
Business, and then which industry types.
Are you guys.
I guess forecasting.
The downward revision for the second half of your fiscal year.
Yes, the smbs give or take call it 2025% thereabouts of our of our business.
That said, obviously, a real strength because with.
The larger enterprise clients I look at the SMB show them as a potential opportunity for us longer term.
And why I say that is.
Historically, we haven't always been able to have kind of at an affordable cost to serve for smaller type clients.
That's where the channel partnership opportunities could really help us out if.
If you think about how those smbs are buying so often they are turning to say their marketing clouds or their public cloud partners.
I'm thinking about live ramps as part of that bundle.
So to the extent that we can reach them through a snowflake or through a sales force or through an azure that could be a real opportunity for us longer term that said short term we feel like we've lived this before and it wasn't that long ago right.
If you think about the first couple of quarters of Covid. The conversations we've had with clients that are very similar to the ones. We're having now there were scared they didn't know what to do now long term, we had a playbook.
And we saw that we we think we did really well in that recession, particularly pulling out of it because we were able to talk to our clients about in a recession, it's more important than ever that every marketing dollar.
Countable and addressable and the only way you can do that is through library.
So we think we've become more important.
As a recession deepens, but at the very start of it I would just tell you everybody scared everybody is nervous and no one has certainty.
As to what the next couple of quarters will look like.
Okay.
Got it thanks for taking one more quick one in.
Marketplace and other line item it seems like the outlook is a bit more optimistic.
Just curious I mean, I think we've all seen that its more sensitive to macro.
Subscription business.
Yes.
What gives you guys up maybe relatively more optimism optimism there.
I'd say a couple of things first of all we did lower our estimate from 25% growth to call. It roughly 20% growth. So we did bring down our outlook.
However, underneath that there's some really interesting things going on.
First of all and data marketplace by the third quarter, we should have data marketplace integrated into safe Haven, We think thats, a big deal and it's actually one of the top use cases that our customers are asking us for.
We are introducing tools for better discover ability and believe that we can increase our brand attach rate.
And then finally really the integration of data marketplace into more destinations think like the mini walled gardens. So yes, you're 100% correct. There is some real positive things also going on inside inside the business.
And then finally, one of the real bright spots as our service business.
While still small today, we're expecting that this business will roughly double in FY 'twenty three.
And so far based on all of our bookings and everything that's gone on in Q1, and what's expected for Q2, we're off to a great start so, yes, I'd say comment 100% correct.
Estimates have been slightly lower but at the same time, there is some real positive things going on underneath the hood.
Thank you guys. Thank you.
Your next question comes from the line of Jason <unk> with Craig Hallum. Please go ahead.
Thank you guys. Scott you made some indications in your comments just on some of the early signals that you're seeing so I think you referenced like the longer sales cycles lower conversion rates things like that can you unpack that a little bit more like how broad based that is or if it's just kind of early indication from a few clients if anything more there would be helpful.
I would say early indications.
Opposed to a trend line.
Trend lines formed over weeks and quarters.
And we're still in the very early stages I would tell you.
The softness we saw in <unk>.
Our new logo is really a continuation of what I started talking about last quarter.
And that is.
Having enough selling capacity.
And then also building pipeline.
I only know of one way to.
Sales works and that is one conversation.
<unk> sales were up one day at a time and you just got a rinse and repeat.
Keep doing that and so.
No.
We are really kind of relentlessly focused on continuing to hire and onboard continuing to build pipeline we've rolled out some.
Lead Gen programs.
Then really pushing hard on this channel partner strategy.
So short term.
We think that we are.
We're going to face these recessionary headwinds, but long term, we're pretty optimistic that the investments, we're making right now will pay dividends.
In the coming quarters.
Okay, and then Warren you had referenced the waterfall on slide 16. So you have got like $22 million in scale inefficiencies Thats down from I think 32 that you called out last quarter.
I think the scale component makes a lot of sense with a lower top line I just wanted to double click on that efficiency component. So when you talk about like protecting the bottom line over the course of this year do you anticipate seeing more there.
Should we expect that to be revised or are there different elements baked into that efficiency component.
I would take our guidance for what it is but at the same time I'll just reiterate what Scott said is we're looking at all elements of our cost structure. I think this represents a good time again to do that as we always have in the past too.
We're being tight on hiring overall, but that said again to repeat what Scott mentioned.
We're going to continue to fund our growth initiatives and make investments in our sales force and in engineering and elsewhere, because we are playing for the long term.
But at the same time, we're going to take this as an opportunity to really avoid some costs and continue to right size. Our overall expense base and then finally I mentioned this in my prepared remarks. We're also doing this with an eye toward FY 'twenty four so we're looking at not only the impact of what this could mean for <unk>.
This fiscal year, but also setting ourselves up hopefully for success as we move into the next year.
Thank you.
Thank you.
Your next question comes from the line of Tim Nolan with Macquarie. Please go ahead.
I Hope you don't mind, if I hop on the guidance one more time and then I've got another question as well, but just to be clear is it more of the discretionary spending element within <unk>.
Grips and also obviously in the marketplace side that leads to the reduction or is there some.
The fact that you were a little behind in your hiring due to Covid times and therefore, your new business is a little bit slower than you would like is it a mix of both or all one or the other for them for the guide for this year.
I would say.
If you mean, the discretionary element utilization.
I think we pretty much had that right Tim when we gave our guidance in may we've seen it basically.
Really hold up I mean, we were 12% obviously in Q1 and everything that we can see our initial guide give or take of roughly 11%. It seems like it's the right guide.
So really where we're seeing it is in booking softness so as I mentioned.
We on our last call talked about booking softness for the first half of the year. We now believe that booking softness is going to increase through the back part of the year and then as you would expect looking at the overall macro backdrop. We've also increased our estimates for contraction and so the combination of those two things is really what's driving.
The lowering of our subscription forecast.
Okay.
I'm wondering is it is it more on elements of spending that client can be discretionary on spend versus not spend got it.
Friction SaaS element of the business really I'm glad you pushed on that a little bit where we're seeing the pressure.
Things really media related so think about activation and targeting related use cases, so that's where we're seeing the pressure both in terms of bookings and expected contraction.
Yes.
What I was looking for that's what I was.
Okay. Thanks, Thanks for pushing on that can I ask one other question as well.
You mentioned international being relatively strong and on the on your last call you talked about this trade desk EU.
E relationship when you talked about this car for wind is the international.
Optimism deriving from those things and is it more in Europe or is there more to it than that I.
I would say, yes, and yes, I mean, those are all positive things and we're really looking forward to our global partnership with trade desk.
There are two things going on internationally as I think for everybody. If you recall two years ago, we really shifted our strategy and we saw one thing and it's basically safe Haven.
So I think we've really over the course of the last couple of years really been able to build our enterprise sales muscle internationally as it relates to safe Haven, and we are benefiting that.
Benefiting from that across the board the second thing in car for by far is one of the.
<unk> here is the retail flywheel is just working is more advanced in Europe than it is in the U S. So that's the second element.
From which we are benefiting so those would be the two factors I would call out.
Thanks Juan.
Thank you.
Your next question comes from the line of Nicholas Zingler from Stephens. Please go ahead.
Yes, hi, guys.
I know you touched so many advertising channels. So is there any way to delineate.
If there are any channels in particular, where we're most likely to see such a pullback in the back half of the year, whereas maybe although it might be less impacted I'm kind of talking about.
Social media versus TV versus connected TV.
Any way to parse out what you might see in the back half there.
It's an interesting question.
We can answer that I don't have the data at the.
My fingers right now because.
We would see that is in our distributions and how the mix has changed over time.
And so we have seen in the past for instance, when there are shifts between the walled garden in the open web or CTV, we see that in our numbers.
I just haven't run it.
We have the data at my fingertips, but we will do that and get back to you on that because it's a great question.
No. That's fine I'm also just curious about your exposure to political ad spend.
We've seen some strong early commentary from.
Some broadcasters in TV. So I was just curious if you are.
How would you describe your exposure to that if at all and just your thoughts on the impact I guess for what is your <unk> and likely <unk>, yes, very little year to date, but.
I will tell you historically.
We have.
<unk> been involved in both an issue levels.
With parties.
Sure.
So I would expect.
We would participate in that going into calendar Q3, and the elections yet again.
But that would be baked into our guidance.
Understood. Thank you guys very much appreciate it thank you.
Our next question comes from the line of Robert <unk> with Wells Fargo. Please go ahead.
Great. Thank you for taking our questions.
First I'm wondering if you can talk to client urgency with respect to Etfs with the deprecation deadlines being pushed out again at 24.
I understand the benefits of the product breadth and cookies, but just wondering if you can speak to motivation you're seeing among your customers right now and then on the payments side, Scott I think you talked to.
Differentiation versus competitors within the past few calls you touched on it but I think with respect to the public cloud and your comments earlier, but just wondering if you could maybe revisit the topic of competitive differentiation for say, David who youre going head to head with.
If anyone on a consistent basis and what is driving customer decision in favor of a safe Haven. Thank you.
Sure I'll take the first one more and maybe you can take the second on prepayments.
No.
With.
Respect.
Sorry, I lost my train of thought.
Remind me of the first question again.
Sir just on <unk>.
I agree with you about Ats.
Looking at application deadlines that are being pushed out.
So on that.
What I would tell you is sophisticated advertisers see an opportunity because they are actually generating.
Pretty significant lift remember that rough.
Roughly 45%.
U S AD traffic has already moved off of cookies that is Microsoft.
It is.
Firefox It is safari and so if you want to advertise effectively.
Those browsers, you have to authenticate and we're seeing phenomenal where they're so sophisticated advertisers recognize that they view this as.
Our first mover advantage to.
Really reach audiences that havent been addressable.
A few years.
On the publisher side, it's interesting I was at a publisher summit last week.
The address ability and some of the biggest publishers in the world.
We're there with us.
Im.
Without exception without exception.
They have seen strong results from Aps, the kind of lifts that Microsoft is publicly reported a 40% improvement in yield.
Our par for the course and in many cases much better.
However, what they all were talking about is how do they work together.
To further accelerate advertiser demand.
Because one of the sophisticated advertisers see the opportunity.
That is not necessarily yet the case with everyone.
Now all that said, let me just reiterate one one final point here.
What I said in my prepared remarks, we actually don't care.
And whether an advertiser wants to use cookies or whether they want to use authenticated measures doesn't matter to us we're going to support both as long as <unk>.
Different identifiers exist, we're going to support different identifiers. The only reason we really.
There is because it's creating confusion in the market and with investors.
So often we get the question of what's the impact on your financials couple of years ago.
People said, hey, we're concerned that cookies are going away now the same investors are saying, hey, we're concerned that cookies aren't going away.
So we just like some finality.
To this we can take that risk off the table altogether, because we don't believe theres any risk here.
And then let me jump in on the Safe Haven question. It's a really good win why or why are we winning.
And I would highlight really five things that differentiate safe Haven from the rest of the market and if you quickly dive under the requirements that a brand has for their environment.
Clean rooms arent, just clean rooms, you have to have a lot more than that and I'm going to highlight really five things.
The first thing is our neutrality, we don't buy or sell media. So we're agnostic.
The second point here is we're cloud agnostic, we can partner with anybody.
To privacy. This has been a hallmark of life ramp as our privacy standard and if you think about privacy preserving technology, we are really at the forefront of defining that.
Third thing is it just doesn't work without identity and we are the global leader in identity in the standard whether it's in the <unk>.
And the cookie world or in a cookie less world.
<unk> with Ats, if youre, a global brand where future proof given Etfs and then finally, it's the ability to handle permissions at scale. So taken together those are fiber requirements that any brand out there thinking about the safe Haven deployment really asked about and are critical too.
Having the sort of capabilities that they need but more importantly, each of those elements fall right into the sweet spot of <unk>.
Morning, just on the cloud agnostic.
Thursday.
Move or shift the multi cloud and hybrid.
Then benefit to you.
Given your colleague notwithstanding a 100%.
Thank you.
This concludes the question and answer session I will turn the call to Warren Jenson.
Great well everybody again, thank you so much for joining us and let me just conclude with some of the same remarks I made in the prepared remarks for.
For us while it's disappointing to reduce our back half guide we feel like it's the appropriate thing to do given the trends that we're seeing and that we're sensing.
That said, we would 100% also separate the short term from the long term.
We are highly confident in our long term opportunity.
Rest assured that while we're tightening our belts, we're also taking steps to.
Insurers that not.
To ensure that we're also continuing to invest for our future, but at the same time protecting our bottom line and setting us up for the years ahead again on behalf of everybody here at <unk>. Thank you so much for joining us today.
This concludes today's conference call you may now disconnect your lines.
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