Full Year 2022 Softwareone Holding AG Earnings Call

Speaker 1: I I.

Speaker 2: one full year 2022 results conference call. At this time all participants are in listen only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you will need to press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised.

Speaker 2: To withdraw your question, please press star 1 again. Please be advised that today's conference is being recorded.

Speaker 2: I would now like to hand the conference over to your first speaker today, Anna Engvall, Head of investor relations. Please go ahead.

Speaker 3: Good morning and thank you to everyone for joining SoftwareOne's full year 2022 results. My name is Anna Ingbel, Head of Investor Relations at SoftwareOne, and joining me today are Dieter Schlosses, our CEO , and Rodolfo Stavisky, CFO .

Speaker 3: Before handing over to Dieter, let me draw your attention to the usual disclaimer regarding forward-looking statements and non-IFRS measures on slide 2. With that, I will hand over to Dieter.

Speaker 4: Good morning. I'm pleased to welcome everyone to our full year 2022 results.

Speaker 4: 2022 was yet another year of achievement to be proud of.

Speaker 4: Firstly, we delivered a record year reaching 1 billion in revenues for the first time. In addition, our service business hit a 500 million revenue run rate by Q4.

Speaker 4: Importantly, we are also ahead of schedule on our 2025 target of 15% adjusted FBA margin for services.

Speaker 4: We continue to attract talent, reaching over 9,000 FTEs and make great strides improving gender diversity at all levels, including at the Executive Board with the appointment of Julia Brown as Chief Data Officer.

Speaker 4: Lastly, I'm very proud of our successful rebrand which reflects our transformation into a global software and cloud solutions provider supporting clients over their entire cloud journey.

Speaker 4: Moving on to the numbers.

Speaker 4: Gross profits for the group was up 14% to 914 million Swiss ranks in 2022.

Speaker 4: Adjusted WDA was 240 million to strength with a margin of 25.6% broadly stable compared to prior year.

Speaker 4: Looking at Q4, growth was 7% due to a weak December . We saw clients taking a more cautious approach to spending their budgets. This was particularly evident in EMEA, especially in our Microsoft business.

Speaker 4: On the demand side, we are seeing that organizations continue to push forward this cloud-first digital transformation to drive agility and efficiencies.

Speaker 4: They want to move to the cloud but in an optimized way with control over their spend from the beginning.

Speaker 4: We are in the best position to help them to do so, being a leader in FinOps and application modernization.

Speaker 4: At the same time we are taking measures to accelerate our growth momentum and optimize our cost structure.

Speaker 4: Rudolfo will take you through these initiatives later in this presentation.

Speaker 4: On regional performance, all four regions are now at scale. Also, our growth markets generate revenue around or above 100 million to strength.

Speaker 4: Each region also delivered double-digit growth in the year. We may approve by nearly 13%, including the acquisition of Predica. In Q4, growth was 4% driven by weaker results in our Microsoft business, as mentioned earlier.

Speaker 4: nor I'm delivered a strong performance with cross-profit up 15% and momentum continues in the few halls.

Speaker 4: A fact delivered growth of nearly 14% in 2022. Few four growths were driven by China as well as Australia and Hong Kong.

Speaker 4: Also, for smaller size today, we see that China has the potential to become a growth engine for the region.

Speaker 4: LATAN Group by 1st percent, but Q4 was impacted by slowdowns in key markets, Brazil and Colombia, due to political environment. In summary, it's great to see continued momentum across many of our key strategic and high growth markets, including LORAM and Asia-Pacific.

Speaker 4: Signing into our business line, Softland Cloud Services delivers over 27% growth. Cloud Services, Application Services and SAP Services deliver high-divided growth in the year. Also growth in two forwards impacted by a lower contribution from our position.

Speaker 4: Ex-sympath group by 56% in 2022 and over 40% in Q4. As mentioned last year growth in Ex-sympath has come down from over 80% in 2021 as we are reaching the end of the shift to pay-as-you-go from existing multi-year agreements.

Speaker 4: In terms of profitability, adjusted FEDA margin was at 9.6% in Q4, up from 3.3% last year, driven by a very competitive contribution margin and operating leverage. This confirms that we are ahead of schedule in terms of meeting our 2025 adjusted FEDA margin target.

Speaker 4: of 15% of revenue.

Speaker 4: Now turn into software and cloud market place.

Speaker 4: Microsoft billing reached 17 billion in 2022, growing at 13%, which translated into gross profit growth of nearly 6%.

Speaker 4: In Q4, Microsoft bidding growth slowed to 2%. This was driven by weakness in EMEA, the public sector in particular, also the enterprise segment was also impacted.

Speaker 4: Meanwhile, other ISVs continue to show strong momentum growing double-digit through Q4.

Speaker 4: As for margin, you see that Marketplace was at a sector leading level of 53% with a slight improvement over last year.

Speaker 4: This is a testament to the scale and the high level of efficiency that we have reached in this business.

Speaker 4: Whilst we see some substance engrossed in Q4,

Speaker 4: related to current environment, the drivers remain fundamentally robust and we are confident in the long term growth.

Speaker 4: Now, let's look at some examples of how we've been business by helping customers on their cloud journeys across our portfolio, across the agendas and across the regions.

Speaker 4: A US-based global manufacturing company choose SoftwareOne to achieve operational efficiencies.

Speaker 4: and reduce compliance risk with our ITAM and our DSE services.

Speaker 4: A large Asian insurer selected us to assess, to migrate and centralize the IT estate more than over 800 workloads on AWS.

Speaker 4: Finally, we want a framework agreement for 10,000 universities and educational institutes across 42 European countries.

Speaker 4: On the right, you also see recognitions from some of our partners.

Speaker 4: After signing a strategic collaboration agreement with AWS last year, we also achieved Premier doubles in competencies and Shoulders year only through the task of changing policies

Speaker 4: We are one of a handful of their most strategic partners and have so far overachieved our commitments with them. We will also recognize the ServiceNow as Partner of the Year and see scope for expanding the opportunity around ServiceNow in 2023.

Speaker 4: I would like to provide a short update on our sustainability journey.

Speaker 4: Our ESC strategy was created with a passion for our people, our communities and our planet at its core. We want to build on the success of ongoing local initiatives to create a strategy and vision to be embedded across SoftwareOne's business.

Speaker 4: To that end, last year we conducted an in-depth materiality assessment and developed five ambitions in alignment with specific sustainable development goals adopted by the United Nations.

Speaker 4: In our ESG report to be published in H2 this year, we will share our progress and 2030 targets in relation to each of these ambitions, including our carbon footprint and reduction measures.

Speaker 4: Finally, it's our people that deliver our technology solutions. For that reason, we continue to invest in our talent base last year with some excellent results.

Speaker 4: We grew to over 9,000 FDs worldwide. There's over 300 net new hires to capture the right talent and replace T-Customer phase in loads.

Speaker 4: A share before, we look to different ways of closing the talent-up, while also making a meaningful contribution to society.

Speaker 4: It was therefore praised to have 300 Academy apprentices transitioning to full-time hires over the year.

Speaker 4: We made progress in terms of improving gender diversity at all levels. Senior female leaders now represent 27%, up 5 percentage points compared to 2021.

Speaker 4: We also developed our employees by supporting them in gaining certifications. Alone in Microsoft and AWS, more than a thousand new certifications were achieved.

Speaker 4: In addition to ensuring that our employees are empowered, well trained, and given the right career opportunities, we also want them to be properly incentivized.

Speaker 4: In 2022, we made certain key changes to compensation plans to increase growth and profitability.

Speaker 4: With that I would like to hand over to Rudolfo to take you through our financial performance in 2022 and Q4.

Speaker 4: Thank you, Peter. A warm welcome from my side as well.

Speaker 4: Let me summarize what I see as key achievements for 2022. We delivered on guidance and we continue to scale software and cloud services.

Speaker 4: We launched our operational excellence initiatives, which I will cover in more detail later on.

Speaker 4: We also maintain tight costs in working capital controls.

Speaker 4: Finally, we continue to execute on our balanced capital allocation strategy with growth investments and bolt-on M&A, while also returning funds to our shareholders in the form of a proposed 35-cent Swiss franc dividend for this year.

Speaker 4: Finally, we continue to execute on our balanced capital allocation strategy with growth investments and bolt-on M&A, while also returning funds to our shareholders in a form of a proposed 35-cent Swiss franc dividend for this year and a 17 million Swiss franc share buyback.

Speaker 4: Let's move on to the numbers. I would refer to the new metrics, which we will focus on in 2023.

Speaker 4: revenue contribution margin, Enerbita margin now at percentage of revenue.

Speaker 5: Starting with the full year results.

Speaker 5: Revenue grew by 14% in line with gross profit.

Speaker 5: contribution margin.

Speaker 5: The difference between revenue and internal and external delivery costs.

Speaker 5: increased by only 11% in constant currency due to the impact of business line mix. Finally, our SG&E expenses grew by 10%, mainly reflecting tight cost control.

Speaker 5: with quarterly costs flat since Q4 2021.

Speaker 5: Adjusted EBITDA margin as percentage of revenue was 23.8%, which is equivalent to 25.6% margin as percentage of gross profit.

Speaker 5: fully in line with our guide.

Speaker 5: As Victor already mentioned, our business loadout in December our customers took a more cautious approach to spend.

Speaker 5: particularly in Microsoft in EMEA. Revenue growth was up nearly 8% in Q4, with a high adjusted data margin of 28% of revenue in line with the commodity.

Speaker 5: in Microsoft in EMEA. Revenue growth was up nearly 8% in Q4 with a high adjusted digital margin of 28% of revenue in line with seasonality. As a result of the strong switch banks.

Speaker 5: Forex headwinds had a significant impact of approximately 4 percentage points on our revenue in cross-profit crops.

Speaker 5: However, given our natural hedge with similar exposures on optics, the forest impact on adjusted EBITDA was again minimal.

Speaker 5: The next slide shows the business live view.

Speaker 5: Services revenue grew 26% for the year, reaching a half a billion run rate by Q4.

Speaker 5: The contribution margin in services was 35.5% of revenue in 2022, compelling favorably to peers enough by half a percentage point versus price year.

Speaker 5: SG&E grew at a materially lower rate than the top line.

Speaker 5: translating into an adjusted EVTA margin of 2.9%.

Speaker 5: The margin in Q4 was 7.8%.

Speaker 5: driven partially by functionality of course, but we expect this to continue increasing over coming quarters towards our 15% target.

Speaker 5: In Marketplace we saw solid growth of 5.7%, a stable contribution margin and a strong adjusted EBITDA margin of 53%, a level which we see as being both healthy and sustainable.

Speaker 5: We have now launched a wide-ranging program to embed operation lessons across organizations to optimize both growth and efficiency.

Speaker 5: This program will touch three areas.

Speaker 5: commercial effectiveness, or service delivery models, and support functions, such as HR and finance.

Speaker 5: As indicated on the slide, the plant measures will have different degrees of impact on both growth and productivity.

Speaker 5: Let's start with commercial effectiveness.

Speaker 5: Here the majority of the impact would be on crop.

Speaker 5: Leveraging our data insights, we want to target the right customers with the right offering to gain shared worth.

Speaker 5: To achieve this, we need to optimize our mix of business development executives and account managers.

Speaker 5: We will also write short non-customer facing roles to improve efficiency.

Speaker 5: On service delivery, we will capitalize on standardized, time-volume offerings for SMEs to scale processes.

Speaker 5: We've had great success with our examples, which we will seek to further enhance and standardize globally. We're also already progressing towards a shoring mix for optimal utilization rates across local, regional and global delivery channels.

Speaker 5: Finally, we will improve productivity across our support functions by transferring transactional activities to our shared service centers and leveraging functional centers of LXLM at global or regional levels. With these measures, we aim to reduce fragmentation of resources and reduce the risk of kinesin.

Speaker 5: We then plan to reinvest a maximum of 50% of the savings in strategic growth areas, while the other 50% or more will fall directly to our bottom line.

Speaker 5: Turning to Beijing, we plan for one-third of or 15 million Swiss francs of the cost savings to materialize it here with a full run rate of 50 million Swiss francs already later.

Speaker 5: We're moving fast in implementing the plan and expect to see progress in H1.

Speaker 5: We will communicate the restructuring provision in the region of 25 million Swiss francs to be confirmed in quarter one.

Speaker 5: as part of enhancing our competitiveness.

Speaker 5: we will reinvest some of the operation excellence savings in five strategic areas.

Speaker 5: We will invest in leveraging external and internal data to further enhance lead generation and conversion as well as improving account-based marketing.

Speaker 5: We will invest in leveraging external and internal data to further enhance lead generation and conversion, as well as in improving account-based marketing to increase share of wallets.

Speaker 5: We are also using AI propensity models to predict buying behaviors to facilitate cross-fel and up-fel.

Speaker 5: We will continue to simplify and digitize our processes.

Speaker 5: We are also enhancing our training curricula to strengthen capabilities such as consultative solution selling as well as remote delivery at scale.

Speaker 5: Finally, we will invest more in IP to improve both our high-volume SME service offerings as well as our core service line end-to-end digital solutions.

Speaker 5: Working capital ended the year at a favorable negative position of 168 million Swiss francs after factoring.

Speaker 5: This was driven by particularly effective working capital management in the second half, which reversed the first half negative out loss from it.

Speaker 5: Are these sales outstanding having increased due to growth of consumption-based offerings where customers are invoiced later compared to pre-staged enterprise agreements? More importantly, the overdue ratio has not changed.

Speaker 5: On accounts payable we optimized our payment cycle and ended up with a serial based payable as in 2021. Our next cash development is sound.

Speaker 5: Operating net cash increased by around 150 million Swiss francs, reflecting cash flow from operations, Catholics investments, mainly in our gold trust platform.

Speaker 5: as well as increased long-term renewables.

Speaker 5: These are interest-bearing receivables related to multi-year contracts where customers have been granted extended credit terms.

Speaker 5: In return, we are in a higher margin to finance this contract. On the non-operating outflows, we invested in two bulk bonds in our services business line and paid out a dividend of 51 million Swiss francs, equivalent to 46.5% of our 2021 adjusted profit for the year.

Speaker 5: Finally, the net cash development was significantly impacted by a decreasing value of our cranium sharecalling.

Speaker 5: All in all, we ended the year with a strong net cash position of $461 million.

Speaker 5: Let me recap our capital allocation policy.

Speaker 5: reinvesting in growth will continue to be our number one priority.

Speaker 5: On the operational side, we will focus on executing organic growth strategies, including the reinvestment opportunities I mentioned earlier.

Speaker 5: As for CapEx, our main investment is our go-fast marketplace to capitalize on the digital reselling opportunity.

Speaker 5: We will also continue to do bolt-on M&A to have capabilities and build geographic presence. Any potential acquisitions will be measured against high internal rate of return hurdles in benchmark transaction multiple.

Speaker 5: And finally, we will continue to return funds to shareholders in the form of attractive dividends.

Speaker 5: We will occasionally complement these with other forms of return such as the share buyback already announced last year.

Speaker 5: I will close my section with the outlook and midterm guide. We continue to execute on a well-defined strategy in order to capitalize on our attractive addressable market.

Speaker 5: While we believe our customers will continue to prioritize digital transformation in the coming years,

Speaker 5: We remain cautious on 2023 given the uncertain economic environment.

Speaker 5: Based on the new reporting methodology, with growth and margin based on revenue,

Speaker 5: rather than gross profit are 2023 outlooks, double digit revenue growth for the group in constant currency.

Speaker 5: Adjusted is a margin of 24 to 25 percent of revenue.

Speaker 5: and a division pay up ratio of 30 to 50% of adjusted profit for the year.

Speaker 5: The improved Assured Evita Margin midpoint guidance reflects the positive impact of our operational excellence program.

Speaker 5: The midterm guidance has also been adjusted to reflect the full impact of this program, which together with operating leverage fully observes the negative business line mixed impact.

Speaker 5: The guidance also reflects our commitment to the company's profitable growth strategy and enhanced returns to shareholders.

Speaker 4: Let me now hand over to Dieter for his closing remarks. Before we end the presentation, I would like to leave you with 4 key takeaways.

Speaker 4: We operate in a large and attractive market with the Glaude opportunity offering long-term sustainable growth.

Speaker 4: Secondly, technology doesn't deliver impact on its own. It's our people who deliver solutions that work. We have built a 9,000 strong expert team at software one and we continue to invest in our talent base. Thirdly, we must also find ways to work smarter and reduce complicated questions.

Speaker 2: Thank you. As the reminder to ask a question you need slowly press star 111 on your telephone keypad and wait for a name to be announced. To withdraw your question, please press star 11 again. Please then buy what will be compared to your narrow start. These will take a few moments. Now we are going to take a look at the phone.

Speaker 3: the weakness that you saw started in December . Can you comment on how the current trading in January and February has evolved?

Speaker 3: And then secondly, what gives you the confidence that you will get back to double digit growth for the full year, especially with Microsoft and other vendors kind of seeing deceleration?

Speaker 3: And then how should we think of the growth between the two divisions of software and services?

Speaker 3: And then finally, just a quick follow-up. Did you mention the restructuring expenses were $25 million? Thank you.

Speaker 4: Hi, Kandika. Thank you for the questions. Yet we mentioned the 25 Mayans as researcher and course to start with the last question on the first one on the macro side, how we sell our results in the summer and obviously generally and I'm proof that you won.

Speaker 6: Thank you.

Speaker 4: October November was absolutely strong and in line with our previous months and our previous quarters.

Speaker 4: We always said that our guidance will, the landing on our guidance, whether it's on the lower or the mid or higher end of the guidance, will depend on this budget clash, which is the usual situation happening in December , and to be cautious whether this year it will happen or not.

Speaker 4: So we have seen that that budget, budget, trust is not a good enough of curve. And we don't see that as anything else, then a more cautious approach from our customers to retain some spend for the 2022 year.

Speaker 4: In terms of trading for Q1, we are ramping up to the Dapositures growth. That is also supported by a few changes, particularly also on the marketplace. We will be seeing a change in Microsoft which...

Speaker 4: will come in March where they will remove the price lock which they have initiated last year. And with that we can accelerate on the Microsoft side to move the customers to that new commerce platform which will accelerate the growth as well.

Speaker 4: That is one part of the answer, also called the confidence on the second question. We see fundamentally and structurally no hazards in the market. In fact, our ISV segment is very, very strong.

Speaker 4: Also in Q4 it was strong and it's continuing to be strong in Q1. And also on the services side, our portfolio absolutely supports the current pain points of the customers and we will continue to utilize that.

Speaker 4: And in terms of growth between the two lines of businesses, we have said we always want to grow along the market on the services side. Our growth is always between 20-30%, which we intend on the services side.

Speaker 4: and on the marketplace side, single digit, mid to high single digits.

Speaker 3: Do you want to add something? No, I think you covered everything, Peter. Thank you, Milly. A quick follow-up. How should we think of the seasonality between H1 and H2 this year? If there is no seasonality –

Speaker 5: Here we see a stronger second half compared to the first half. So, for the double digit growth for the year, we do see a ramp up throughout the year.

Speaker 5: Here, we see a stronger second half compared to the first half. So, what we guys for the double digits go for the year, we do see a ramp up to our top. Great. Thank you very much.

Speaker 2: Thank you. Now we're going to take our next question. And the next question comes to Lan of Knut Vole from Baader Bank. Your line is open, please ask the question. Yeah, thank you. Some aspects have already been touched and you also touched already a bit on the price lock detail.

Speaker 4: When I listened to conference calls of competitors of yours, they were saying, highlighting that particularly price increases on the software side should help in 2023. Can you share here some light also looking beyond the Microsoft price lock that you cited on your expectations to which extent price increases can be a tailwind?

Speaker 4: helping you to grow in 2023 and also on the example side what should we expect with you mentioning that it should be phasing out that in terms of growth from examples in 2023. Thank you.

Speaker 4: Yeah, absolutely clear. So there is of course a move after the price drop on Microsoft which will accelerate post March. And then generally we see across the board, we see price increases from most of the ISVs. And as you know our margin is a percentage of N.

Speaker 4: If somebody increases the price, you want to assess whether there are other options.

Speaker 4: And for us that means we can help and we can support the customer to evaluate the entire cloud spend or the entire application on technology landscape. So it's always a trigger point to also upsell and cross-sell services. So be that for a cloud such as now.

Speaker 4: On the example side, after the price of Tesla, we are hitting the end of our existing book of business. Remember, we went from the old commercial model to the new commercial model.

Speaker 4: And of course, once you go to the tail end of it, it is slowing down. But the ex-simples as such have such a success that we are of course now broadening the customer base and going instead of farming rather to net new hunting.

Speaker 4: And that's what we'll go for in the next presentation that we invest into the examples to further standardize them and we will penetrate them.

Speaker 5: Great, thank you. So just some more color on the growth rate if possible, Dieter, of examples. I think it should be substantially lower, but what kind of growth do you still expect from the farming momentum that you're expecting going into 2023?

Speaker 4: I would say it will be around 30-40% growth on the examples you have seen. One indicator on the examples, if you look at our numbers, you can obviously get back to that users which we are supporting. We have seen it's now 8.8 million users where we have a 24x7 support.

Speaker 4: So we are reaching also over there now slowly with 10 million in the next 18 months, which is great. And so it definitely continues to grow. Over on the services, you remember we always said we want to be with the market, which is 20 to 30% on growth.

Speaker 2: Thank you very much. Thank you.

Speaker 2: Thank you very much. Thank you. Now we're going to take our next question.

Speaker 2: And the next question comes to Lan of Andreas Muller from ZKB. Your line is open. Please ask a question.

Speaker 7: Yes, good morning gentlemen, thanks for taking my question. I was wondering why with the Microsoft business there was such a huge difference between EMEA and the US. We hear in other cycles. That's the first question. And then I was wondering what do you expect.

Speaker 7: last question is tax rate what do you expect for next year or for this year actually

Speaker 4: Textures, you said? Yes. So let me take the first one, laser inflation and textures, I will hand over to Rodolfo. So, you know from a customer segmentation, you look at different geographies, you have the largest customers in the area and then of course you know if you talk about bluebirds which are...

Speaker 4: And I hand over to the building population for the text.

Speaker 5: And there was also the comment on the FPE, maybe I tackled that as well. So, and there are thanks for the questions. Let me take one at a time on the FPE front bike.

Speaker 5: With the Operation Lecture program, as I explained, it's a combination of growth and efficiency right to improve both effectiveness and then productivity in the organization. So as such, we are investing in certain areas, so we were expecting to, in the safe side, to maintain slightly increased resources.

Speaker 5: do more with the resources and then of course in certain areas like finance, HR, where we will be shifting transactional activities to share services, we expect reduction. So all in all we expect FTEs to remain stable, maybe a net increase, right?

Speaker 5: Small net increase like we saw with the U.S.

Speaker 5: Then on the tax rate we basically expect a similar tax rate that we have seen in 2022.

Speaker 2: Okay, thanks. Thanks, Andrea. Thank you.

Speaker 2: Now we're going to take our next question.

Speaker 2: And the next question comes to the land of Ben Castillo-Bernaus from Exambiont, Paribas. Your line is open. Please ask your question. Good morning. Thanks for taking my question. So just on the cloud solutions and services business, growth slowed quite materially in Q4. Can you just remind us about how much of that segment is recurring in nature? How much is kind of project-based one-off?

Speaker 2: And so what drove that slowdown? And I guess what did you see there? Was that the cutting of projects? Or was this sort of pushing out to a later date? Was this reducing scope of existing projects? Just help us come to that slowdown from Q3 and Q4 please. And then you commented on that services segment. You're ahead of schedule.

Speaker 4: in terms of your 2025 margin target. Can we get you to comment perhaps just on when you think that might become in reach, if it is slightly sooner than 2025? Thank you. Hi Ben, thanks for the questions. On the growth on services, which you rightfully saw in Q4, there are three reasons to go to it.

Speaker 4: First, of course, there's always a knockout effect. It's a Microsoft business, there's also a growing mountain, and there's an upsetting cross-saving knockoff effect. Second, we had some legacy services growing off, which is also intentional to a certain extent.

we want to focus on our core services business. And then towards the years end, of course, you know you can't really put those people on a different project. And third, you saw that we haven't done really any acquisition.

in 2022 except in the beginning of the year which was PEDICA. And then of course you compare to 2021 Q4 where we had actually two acquisitions with Stentec and Heligraut. We don't see this as something which continues. It's now kind of fast.

is the right one. And it's also the right time for the strategy. You can see now the proof points really being realized. And the fuel fall is an indication on the margin of 9.6, even though there is a certain seasonality. But the data point is absolutely going in that direction.

And we believe we are ahead of schedule up to one year ahead of schedule on a 50% margin. And this is really an exciting situation for us because if we look at our exit run rate of 500 million revenue.

and you can look at our growth rate. And then if you look at our target of 15% and the GQs earlier, you talk about a service business of 100 million FPGAs in due time, right? Great, thank you very much.

And then if you look at our target of 15% in the GQs earlier, you talk about a service business of 100 million FPGAs in due time, right? Great. Thank you very much. Thanks, Ben. Thank you. Thank you.

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