Q2 2023 Amdocs Ltd Earnings Call

Speaker 1: Good day and thank you for standing by. Welcome to the Q2023 and X-Earning Conference call. At this time, all participants are in a listen only mode. After this speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 1-1 on your telephone.

Speaker 2: You will inherit automated method you're advising that your hand is raised. To withdraw your question, please press star 111 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Max Smith, Head of Investor Relations for Amdop. Please go ahead.

Speaker 3: Thank you, operator. Before we begin, I need to call the attention to our disclaimer statement on side two of the presentation. You'll notice that some of our comments today may be forward to our statements and our subject to risks and uncertainties, including as described in our Drs. FEC fileings and that we will discuss certain financial information that is not prepared in accordance with the Drs.

Speaker 4: For more information regarding our use of non-GAAP financial measures including reconciliations of these measures, we refer you to today's earnings release which will also be furnished with the SEC on Form 6K.

Speaker 5: Participating on the call with me today are Shuki Sherford, President and Chief Executive Officer of Andox Management Limited, and Tamar Rapoport-Diggum, Chief Financial and Operating Officer.

Speaker 6: To support today's earnings call, we are providing a presentation which can be found on the investor relations section of our website, and as always, a copy of today's prepared remarks will also be posted immediately following the conclusion of this call. On today's agenda, Xiuqi will recap our business to financial achievements for the second quarter fiscal 2023.

Speaker 7: and we'll also update you on the continued progress we have made executing against our strategic growth framework. Shuki will finish by commenting on our financial outlook for the full fiscal year 2023, after which tomorrow we'll provide additional details on our second quarter financial performance and forward guidance. With that, I'll turn it over to Shuki.

Speaker 8: Thanks Matt and good afternoon to everyone joining us on the call today. I am pleased with our second fiscal quarter performance as we progress on our strategy to deliver the next generation cloud-based software and services that global communications service providers...

Speaker 9: needs to unlock the potential of 5G and broadband networks data-driven intelligence and improve customer experience for the consumer and the two people. This quote, a week, it depends our relationship and expanding our footprint with existing customer added for new customer logos.

Speaker 10: sustain a high rate of successful project deployment, deliver a record quarter in managed services, expand our strategic partnership with Microsoft, sign an M&A agreement to enhance the execution of our network strategy, and launch CS23, our most advanced CSS network.

Speaker 11: and the spirit of all our talented employees, people, to whom I would like to say thanks for the consistent quarterly execution while also demonstrating the strategic vision necessary to drive and move forward over the long term.

Speaker 12: in the province. On the bottom line, not yet the limited earnings per share of $1.47 was consistent with the midpoint of guidance as we delivered ongoing mountain improvements and strong, fractional generation in the quarter.

Speaker 13: 0.1% starting pretty soon.

Speaker 14: Telling to the operation of Highlight to slide 8, we deliver continued sense momentum in Q2 while included, which included a significant new digital modernization of world, D-Mobile USA.

Speaker 15: This activity was strong in Europe , which, as we have said before, is a region of significant growth potential for androids.

Speaker 16: Our multi-year investments to diversify and increase market share in Europe are very improved. As reflected by record revenue in the world of several significant deals, including digital modernization programs, a two year logo this quarter.

Speaker 17: Similarly, rest of the world continues to present a tractic or particular soil dock, such as the new cloud engagement and also dates with clean and deep tea in the Philippines. Madness Services also has a great second quarter, which includes records residue and newly expanded agreements with Glob, also in the Philippines, and a major operator in Western Europe .

Speaker 18: In media, MDS Rebeccity demonstrated continued growth as a trusted provider to the world's leading streaming services, signing a new agreement which expanded its decade-long relationship with Wilts and Metair UK.

Speaker 19: Additionally, here for some Spanish satellite communication operator, at New logo, choose the equity to bring digital content with customer without the thinner and the both and nothing on the other car. Why juice? Which is found in the equity was selected as a preferable treatment vessel under Amazon Prime Video's For Premium Settle owner.

Speaker 20: From a user perspective, we maintain a high rate of successful project deployment in Q2, achieving major milestones at many of the world's largest service providers. For instance, AMSOP played an important role in the recent launch of AT&T's fixed wireless access offering InternetL in selected markets, which is running on the new cloud-native digital platform we are delivering under the B2C technology modernization and simplification program with its customers.

Speaker 21: This quarter, we also took several strategic steps to strengthen our market-leading position and long-term growth profile. First, we expanded our strategic partnership with Microsoft to bring a new AI-powered customer engagement platform, which combines Emsos, market-leading Commodores, and K3 with Microsoft's Cloud portfolio.

Speaker 22: to who I believe is the most compelling telco-specific offering in the market.

Speaker 23: involves encouraging soren somehow

Speaker 24: Second, we sharpen our focus on the growth potential of B2B with the launch of CS23, which includes enhanced capabilities specifically developed to help service providers meet an exclusively complex demand of B2B customers.

Speaker 25: Third, we are today delighted to announce our intention to acquire the service assurance business of Dioco for approximately $90 million in cash.

Speaker 26: enhance the execution of our network automation strategy by providing service provider with a unique end-to-end service orchestration offering, ensuring the quality of service and enabling the delivery of next generation customer experience.

Speaker 27: Now, let me add to the strategic progress is we continue to deliver market-building innovation designed to help service providers. Accelerated the journey to the cloud. Create seamless digital experience by transforming IT operations for consumer and industry. Launch and monetize new 5G services.

Speaker 28: and the legal dynamic connected experiences with real-time automated networks.

Speaker 29: Starting with cloud on slide 9, several providers are seeing in the early stages of maximizing the value of potential of the cloud and for the most it will be a gradual journey over several years before they fully realize expected benefits such as improved service agility.

Speaker 30: scalability, innovation, security, and customer experience. I'm happy to share that more and more Amdocs new deals are cloud-related, and a growing number of operators will see Amdocs as the primary technology partner to support their core system cloud strategies. The value of Amdocs Friday's importer suite is already proven in the cloud, and we did wave the...

Speaker 31: cloud management services while leveraging our intimate partnership with Azure AWS in Google Cloud. I'm delighted to report that PNTD Philippines, a trial of civil and smart developing a more than-a-use strategic partnership with Amdolz to accelerate the cloud journey by bringing our comprehensive suite of cloud services.

Speaker 32: Amazon's relapse cloud infrastructure to efficiently regret business critical system and application to the cloud, while also integrating cloud based application with the rest of the team in small hybrid IT infrastructure. Among the recent cloud reams, Amazon was selected by a T1 Central European operator to support and enable its journey to the cloud to critical basis of the cloud.

supporting these and other customers as they continue their multi-year cloud journey in respect to their core systems. Moving to slide 10, service providers continue down the path of digital optimization to grow revenue, reduce costs, and improve experience for consumer and B2B customers. I'm delighted to report that we expanded our role in digital transformation in the last

customer engagement platform designed to derive customer loyalty and retention and bolster its social media presence. While the second is the new payment service provider, choose AmdoX to modernize its IT infrastructure in a strategic, wide-ranging digital transformation project.............

that we enable a harmonized, frictionless, customer experience that costs multiple channels atari satisfied

We are also collaborating with YesNetwork, the exclusive Legion and Television Home of the New York Yankee and working next to provide the premium customer experience for years, direct to consumers for any platform.

The shift from physical to software-based SIM card is another digital theme creating opportunity for AMGOR.

Our cloud base and those E-SIMO construction platforms will listen to the rankings number one in the markets by independent analysts being counter-poured retailers. Let us remind our growing list of E-SIM customers for releasing a world with each and all way in Australia.

Turning to slide 11, global service providers continue to invest in 5G monetization, including net generation charging, policy solution to unlock future market potential of 5G standard network. One of North American leading service providers recently deployed end of set of quality solution.

By G-RAD monetization stacks are thrown on the cloud.

This quarter also was selected by MIGO-Teleco in Hungary to provide the policy control function in the operator's 5G standalone program. We successfully completed the legal transformation project with Melita Limited that enabled the Malta Base operator to further monetize

to politics as far as network slicing.

which is needed to enable the rapid introduction of differentiated mobile services tailored for individual, consumer, or B2B customers.

And those recently helped Bay Canada to successfully deploy its first use case with an automated 5G network sliding solution.

And also is bringing fresh innovation to a service provider we think the way in which the management may take net book towers, which is also reducing the carbon footprint. What is our father's new V-hives, and what is the development solution which powers autonomous stress-free pollution.acked by Coronavirus.

to automatically create a digital tree between network towers much more quickly and safely than deploying trucks with tower climbing teams when they need to survey a site.

demonstrating early market demand we are excited to announce today that the horizon has selected our solutions to expect its virus networking for our future. Now moving to our fiscal team, the outlook has presented on a light looked at.

As we have repeatedly said over the last three quarters, Androps and our customers globally are not immune to economic uncertainty, and we are closely monitoring the overall operating environment during the current period of rapidly shifting market dynamics. As the key technology enabler and a trusted partner to the global communication industry,

the highest-selling revenues from the mission-critical system we support on the growth and government engagements.

Taking everything into consideration, we are reiterating our fully fiscal 2023-19-year goals outlook within a tighter range of 7-9% in constant currency, the midpoint of which is unchanged as compared with our previous outlook.

On the bottom line, we are reiterating our outlook for non-guests, the Luters-Eliniksphal Shergos of partly 90% in discolourism and in fantasy states, which assume we recall, we already raised in the pile of water for malignition for the Ghost target of 8.12%. Accordingly, we are well-contracted.

to deliver double digits expected total shell return for the sales year running including our dividend.

With that, let me turn the call over to Thomas for remarks.

Thank you, Shouki. Hello, everyone. Thank you for joining us. I am happy to report solid financial results for the second fiscal quarter, the highlights of which you can see on slide 15. Record Q2 revenue of approximately $1.223 billion was up 8.2% year over year.

in constant currency. On a reported basis, revenue increased 6.8% and was slightly above the midpoint of guidance, including a positive impact on foreign currency movement of roughly $3 million compared to our guidance assumptions.

On a regional basis, we delivered another record quarter in North America, where we are continuing to execute a multiple transformation project for customers across the broader region.

in Europe . I'm also delighted to report our best ever quarter where, as anticipated, we are seeing double-digit growth as new projects awarded over the last several quarters continue to ramp up.

Similarly, the rest of the world accelerated on a sequential basis in Q2, driven by the positive impact of customer productivity.

Moving down the income statement, Nanga operating margin was 17.18 Q2 up 20 basis points from a year ago and up 10 basis points sequentially as they continue to realize the benefits of automation and other sophisticated tools implemented to manage costs and drive efficiency gains in our business.

On the bottom line, NANGAB diluted the IPS of $1.47 was consistent with the midpoint of our diamonds range and included a NANGAB effective tax rate of 16.5%, which was as anticipated within our annual target range of 13% to 17%. We'll begin bhas are happy here.

was $1.16 for the second fiscal quarter, which was the broccoli point of our guidance range of 1.18 to 1.26.

For your modeling purposes, beginning the fiscal year, our quarterly gap and non-gap net income include the new line items for net income attributable to non-controlling interest. This reflects the earnings attributable to our joint venture partner in respect to the length required in 2017.

as the site for the new Amazon Spark and will amount to roughly $0.7 million per quarter now that the campus is complete and operational. Moving to slide 16, 12 month backlog was a record high at $4.11 billion at 5.7% year-over-year as we call it.

and I brought you 7% in constant currency. On a sequential basis, our 12-month backlog was up by $20 million in kitchen.

Our 12-month backlog has traditionally served as a good leading indicator of our business, having consistently averaged around roughly 80% of forward-looking 12-month revenue over the year.

70% of the taxes were raised to $719 million. Up 8.4% from year ago, and equivalent to about 59% of total revenue.

Global Indian Digital Solutions for Vada in the Philippines has extended its partnership with UNDUCS to reimagine their ideal operations.

Enables by digital transformation and cloud adoption for better business alignment under a multi-year management service arrangement.

This move will enable the company to create greater business value through improved customer experience that will result to revenue growth.

Additionally, we signed an expanded mental services agreement with the major Western European operator to migrate and operate non-ambox applications on the cloud, as Shafi highlighted earlier.

To remind you, our managed services engage in conducting the resiliency of our business with a recurring revenue stream near 100% in your rate and expanded activities under a small career engagement and may systems include modernization projects which deepen our relationship even further.

Now turning to the balance sheet and cash flow mileage on slide 18.

Reflecting strong execution, I am pleased to report that we achieved many productions in many whipping lines for this order, resulting in healthy customer cash collection.

This of 74 days decreased by 30 days sequentially and by 7 days the old begins to, but the net difference of the friends we have with you and unbuilt receivables improved by $102 million sequentially.

Similarly, we generated robust cash flow of $259 million in fiscal. Big cash flow was comprised of cash flow from operations of approximately $294 million, less $35 million in net capital expenditures.

and on strong despite the seasonal timing of annual bonus payments, which typically occur in the second fiscal quarter.

Overall, we execute through with a strong balance sheet and a healthy cash balance of approximately $1.9 billion including adding a boring or roughly $650 million.

Moreover, we have ample liquidity to support our ongoing business needs while retaining the capacity to find strategic growth, including the planned acquisition of the open service assurance business, which we expect to complete for roughly $90 million in cash. Turning to capital allocation in slide 19, we repurchased $100 million in capital allocation in slides 17 and 18.

Gaming Firmest backbone of M ohne

way of our quarterly Sherry purchases and dividend payment program.

Now, turning to our outlook on slide 20. To begin, we are continuing to closely monitor the prevailing level of macroeconomic business and operational uncertainty, which remains elevated in the current business environment. That the third quarter and full year fiscal 2023 financial guidance reflects what we consider to be the most likely outcome.

a change of 7% to 9% in cosmic currency. The 8% midpoint of which is unchanged as compared with our final outlook of 6 to 10%.

On a recorded basis, we now expect full year revenue growth of 6-8% year over year as compared with 5-9 year over year previously. The new outlook anticipates an unfavorable foreign currency impact of approximately 1% year over year which is unchanged compared to the previous assumption.

An annual outlook includes third quarter revenue within a range of 1.215 billion to 1.255 billion dollars. Additionally, our schedule points point three outlook assumes an immaterial revenue contributed from the local services insurance business.

On an annualized basis, this acquisition is expected to add roughly 50 basis points to total revenue in the first full year after closing.

Moving down the income statements, we anticipate quarterly non-gabbed operating margins to fluctuate around the midpoint of our annual target range of 70 and a half to 80 from 1%.

Below the operating line, we anticipate that foreign tax fluctuations and costs of hedging will continue to impact our NANGAAP net interest and other expense lines in the range of a few million dollars on a quarterly basis. We expect that our NANGAAP effective tax rates will remain within an unchanged annual target range of 17 to 17 percent.

for the full fiscal year 2023. Bringing everything together, we're reiterating our outlook for non-GAAP diluted earning per share growth in the range of nine to 13% for the full fiscal year 2023. We just, Shuki reminded you, we already raised in the pilot quarter from our initial full yield growth target of eight to 12%.

Overall, we are on track to deliver double-digit expected total shareholders' returns for the third year running in fiscal 2023, assuming the sum of our expected non-GA PPS growth and our dividend yield of roughly 2%.

Before passing it back to Shoki, I'd like to take a quick moment to comment on this year's Mobile World Congress in Barcelona, which for others we're going to continue to showcase our commitment to ESG on the Global Page.

We published our first-ever interactive map to show how Amdas is using technology to help its customers achieve the ESG and sustainable development goals, and we used an immersive experience to demonstrate how Amdas is closing the digital divide by connecting consumers in rural areas to the world.

to digital services such as education, healthcare, and employment. I'm also pleased by our successful digital inclusion partnership with Uno Connected.org.

which we donate the 30 days internet connectivity to approximately 2,000 girls and their families in India from every visitor to Ambus booth. Among other issues of international women's day campaign, Break the Vias.

generated 14 million campaigns exposure on social media, and we partnered with UNICEF to raise roughly $100 million, sorry, $100,000.

with an information drive with company matching to support S-Quake recovery research.

Finally, we have already seen the benefits of the implementation of a new worldwide policy by which employees are required to work from their office a minimum of three days per week.

If move with plate tariff, we will create exceptional work environment that forces growth, collaboration and innovation.

I am heartened by the even greater energy levels I am experiencing among global employees since moving back to the office, including the new Amblox bar campus which opened recently.

Thank you to all our employees for making and of such an amazing place to work with that spectacular show.

Thank you Tomahal. If you can probably tell by our remarks today, we are pleased with our solid financial and operational position at the midway point of fiscal year. And while the global macro economic and industry environment remains challenging, we are

actually focus on delivering a strong second half and another real steady and profitable growth. With that, we are happy to take your questions.

by where we compile the Q&A roster. One moment.

And our first question will come from Tal Liani of Bank of America. Your line is open.

Hey guys, this is Thomas Zilberman on for tall. So two quick ones for me. So first you talked about some solid service provider wins, including T-Mobile. We've heard from some networking vendors in this quarter and last quarter about weakness and service providers. Can you talk a little bit about the spending environment and why you're positioned to keep winning business?

and we talk about the areas that we focus today, which is digital transformation, a 5G deployment and immunization, the journey to the cloud in B2B and consumer, all I would argue that all these pillars are extremely strategic to our customers.

So while obviously we work carefully, the environment, we believe that our customers are pushing forward the strategies, and what we do for them is really in the heart of their strategic domain. So as I said, always I don't think that MDOT is immune, but the fact that we are running their mission critical system.

And most of the projects we do in the heart of the strategy help us to mitigate headwings that some of our customers face. Got it. And if I can sneak in and follow up quickly. Can you?

give just a little more color around the tightening of the revenue growth, what exactly is driving that? And as a result of that, do you still see 8% constant currency growth in fiscal 24? Thank you. So as we move along the year and you know already halfway through, we are obviously tracking very well with a strong half-1.

and looking forward both in terms of the backlog that is representing already the contribution for the next 12 months of what we find as well as the pipeline that is looking strong. We felt that it's making sense to kiter the range and make it kind of more clear what the things should be, the likely outcomes in terms of the revenue growth.

Got it. Thank you both.

Thank you both.

One moment for our next question. And our next question will come from Ashwin Shabakar of Citi. Your line is open. Your line is open.

Hey, um,

Good evening folks, how are you? Good morning here.

I want to, you know, obviously the big topic on, on, on every year earnings call nowadays is with regards to macro. And you guys have called out not just this time, but last time as well, that you and your clients are not immune.

But when I kind of look at sort of the wins, you know, I mean, I would have expected perhaps maybe

move more towards cost and productivity type things, say for example, network automation or cloud optimization, things like that, but you're actually signing all across the board. Is there any difference that you see from a client perspective with regards to how they're engaging with you, sort of the contract terms?

and the pipeline is very rich. And yes, in some of the deals, I would say that TCR reduction is getting maybe a bit more, I would say, recognition than regular times. And but this is always true. I mean, I'll say a very large.

Manage services are dealing very large with some of your permanent operators. Obviously it includes moving to the cloud so the benefit is obviously a business agility, high-ocipient environment, and TCR reduction is part of it. So I will not say that TCR reduction is the main...

number one reason to do this deal. The number one reason that we are able to deliver our services and products is I think because the value which is critical to our customer in their journey. One thing to add maybe is that given the new architecture and technology of our products and the way we continuously.

delivery to production to our customers in the continuous manner in very fast space. Cats and males can enjoy the benefit very fast from our R&D shop to what they can enjoy in the production environment. So the value of creation is in a very different speed than what it used to be in the past. I think it's very complex.

create a great opportunity for our customers to reduce the cost.

Understood. With regards to talent, one of the things we've kind of seen obviously, again, related to the environment is that the supply side is becoming a little bit easier, you know, lower wage inflation, lower attrition, things like that.

If you could comment on what you're observing and how it sort of drives your inclination to increase headcount.

in particular areas, if you could comment on that. So I think we clearly see a change in the environment in terms of the labor market, but I think our focus on making sure that employee engagement is high has begun way before the great resignation era.

focus on making sure that we hire the best talent, onboard them in the most effective way, continue to have the high motivation and engagement, focus on the upskilling people that they can move internally. All of those things that we've been doing in the last couple of years continues and should continue.

But clearly the supply is up and I think that's another point is that we are seeing this as an opportunity of course to also a Continue and elevate the new skills that are required and this is happening all the time You know whether we're talking about cloud or whether we're talking about

experience design or any of those skills that are required today, whether it's data, analytics, whatever it is, it's clearly on our agenda.

Yeah, but the bottom line is Tamar said that the labor environment is in a completely different place comparing what it used to be probably a year ago.

Absolutely. Let me hand it back. I might come back later on for another question.

Certainly. As a reminder, if you would like to ask a question, please press star 1 1 on your touch tone telephone. Again, for any questions, please press star 1 1. And our next question will come from Timothy Heran of Oppenheimer. Your line is open. roar

Hi, Shoki. Hi, Tamar. This is actually Edward Yang for Tim. Congratulations on another Clean Corner. Thank you. Just my first question on back-loud growth. That has moderated somewhat, it was like 10 percent about a year ago, it's come down at six percent. What's driving that and what would get that to pick back up?

So just to clarify the numbers, we mentioned the 5.7% on a reported basis, but constant currency basis, year over year growth of the backlog is 7%. And I think while we are talking always and for a good reason on backlog as a leading indicator, we shouldn't take it kind of mathematically on every quarter.

sign important deals. Some of the deals we announced today actually are going to fuel much beyond the next 12 months revenue. It's not factored into the 12 months backlog. For example, the new managed services expansion and cloud migration with a leading West European carrier. It's a major deal, it will take time to set up, it will get to the full run rate of revenue.

only mainly impacting 2024. So we definitely see this kind of phenomena, but it's great. It's giving us visibility beyond the next 12 months. So we are tracking, of course, all the time our backlog and our pipeline, and it's looking at the pipeline group good. And we're looking forward to see how we, you know, fulfill this great momentum.

Okay, that's good color. And just looking at the US wireless industry, you know, industry phone ads are coming down year over year somewhat, mid-simple digits. Are you sensitive to that volume change? And within that, the composition of net ads has been changing where this quarter we saw cable MVNOs grabbing much more market share versus the telcos.

They're grabbing more like half the post-paid subs versus about a third last year. Does that mix shift affect your revenue and margin? First of all, the answer that we are not connected to this, obviously we want to see the customer going faster, but there is no correlation between the net edge to our revenue. But if you bought it, I mean, we see a very interesting phenomena.

that the cable guys are talking about wireless, by the way, we are very happy as we announced before that we are behind the Comcast, Chartered Alti, all of them are using our platform for the mobile offering. And in the opposite, actually the wireless guy are talking about fixed wireless, which also we are very happy to support in T-Mobile.

in AT&T and some other big customers. By the way, also AT&T launched their first Internet Air product on our new platform this quarter. They have a fixed wireless offering. So there is no direct connection and I can tell you that we are very busy working with our customers on the strategic direction.

We mentioned a very important deal in T-Mobile this quarter, which is critical for T-Mobile for the future growth. So we are very happy in the way we are supporting our customers.

If I could just squeeze one more question in. Just the strategic partnership with Microsoft on the AI customer engagement. I know you announced that during Mobile World Congress. But how has the selling motion been for that product? And is this more of an expansion into existing customers? Are you

bringing on new logos or displacing competitors? It's both and we are very excited about this partnership. I think, as I mentioned in my script, this unique combination of Angie's printing out...

Pretty much market-leading, CS suite for all the the motivation, fulfillment aspects, integrating with the very strong cloud-based dynamic application, other application of Microsoft, obviously integrating generative AI.

as part of the full offering, it creates what we believe is by far the best offering in the market. Now we together are working very closely with Microsoft. In some cases, we are talking about going to a completely new Logos for Amdocs and for Microsoft. In some cases, we are talking about going to a completely new Logos for Amdocs

It's expansion with existing customer. We see very, I mean, this was really relatively new. It's like two months old. We see a very, very nice growth in potential pipeline, potential deal, and we are working very close to with Microsoft to make sure that we are able to mature these deals.

But I think the bottom line, this joint offering gives us together a very, very, I would say, by far the leading suite for both consumer and B2B.

Thank you. Thank you. We'll take one moment for our next question.

And our next question is a follow up from Ashland Shipyard Car of Bitty or Lines is open.

Okay, thank you. The follow-up was more product related. I want to ask about AI, important topic, obviously. You mentioned it a couple of times in the course of this call.

But the way I understand it, AI is integrated and a part of CS23. The way your approach to AI is embedded solutions that use AI for a variety of functions. Is that the right way to look at it? Because AI is connected to an AI- Gloucester says.

This is obviously an important topic of conversation with investors and there seems to be a lot of noise on the topic. So if you could sort of lay out a hub for that. Thank you for this question, Ashwin. First of all, we are very happy for this partnership with my...

the generative AI capabilities. We see generative AI capabilities and we are actually evaluating all the potential options right now and we see a lot of opportunities. It's both internal and external. I can give a couple of examples. Internal, we see the opportunities to generate automatic test cases and using in-depth...

internally and together with partnership with Microsoft to see how we can actually elevate self-service application to do much more. And we talk about our monetization platform, how we can drive better offering to consumer and B2B using these type of capabilities.

This is early days, I can tell you that there are many teams in the company and together with partners like Microsoft, elevating the potential. We believe the potential is huge and it's in many other services engagements in our development and capabilities in others.

I believe that probably we are going to be much more mature in probably a couple of months, but definitely it gets a lot of attention and I think that, as I said, the partnership with Microsoft gets us great access to these capabilities.

Thank you for that. Thank you. And I'm showing no further questions. I would now like to turn the call back to Matt for closing remarks.

Yes, thank you, and thank you everyone for joining the call today. We look forward to hearing from you very soon. Please reach out to us here in the IR group if you have any questions. And with that, have a great night. Thank you, guys. Thank you. Goodbye. And this concludes today's conference call. Thank you for participating. You may now disconnect.

You.

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