Q2 2023 Qualys Inc Earnings Call
Good day, and thank you for standing by and welcome to the call of the second quarter 'twenty to 'twenty three investor call.
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Conference over to your Speaker today Blair King. Please go ahead.
Thanks, Victor and good afternoon, and welcome to close the second quarter 2023 earnings call.
Joining me today to discuss our results are still let the car, our president and CEO and Julie Kim our CFO .
Where we get started I'd like to remind you that our remarks today will include forward looking statements that generally relate to future events or our future financial or operating performance.
Actual results may differ materially from these statements.
Factors that could cause results to differ materially are set forth in today's press release and in our filings with the SEC, including our latest Form 10-Q and 10-K any.
Any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events.
During this call we will present, both GAAP and non-GAAP financial measures a reconciliation of GAAP to non-GAAP measures is included in today's earnings press release and as a reminder, the press release prepared remarks investor presentation are all available on the Investor Relations section of our website.
With that I'd like to turn the call over to Smith.
Thank you Blair and welcome to our second quarter earnings call.
Lease to announce that we delivered another quarter of healthy revenue growth and industry, leading profitability, demonstrating our increasing leadership in fiber together with management.
<unk> Foundation to drive future growth.
Q2 remained a tough period with customers continuing to scrutinize deal can delay a project start dates. Nevertheless, the combination of today's uneven macro and heightened credit environment is driving the need for security start consolidation necessary for clear security outcomes, reducing vendors fall in customer environments and implementing our long term security strategy based.
On cost and value our risk management platform positions us well to deliver these outcomes to our customers and we feel fortunate that many of them are on a long term transformation journey with us.
This was evidenced in Q2 by the steady adoption of out of the MTR solution, which is now deployed by 52% of our customers a wide wide key competitive emdr wins with two risks include multiple customers both down market and in the Forbes 1000.
While this is the MBR solution continues to garner significant industry recognition.
As recently announced while this is the MTR Retrorse was voted the best risk management solution and by 2023 SC Awards Europe . This award evaluates vendors based on input from security practitioners and it had been higher we believe qualifies placement as the number one one liberty management solution further validates our investments in the platform.
Presence the gold standard for security and customer environments today and in the future.
Leveraging out of the MTR and single agent approach, we have built a blueprint for delivering greater value to our customers with multiple long term drivers in our business.
Let me highlight a couple of early platform success, we're seeing broader adoption with our customers in Q2, a fortune 300 global manufacturing company chose <unk> because of our reputation to deploy across large complex environments quickly.
The existing patch management solution was unable to effectively badge.
Third party software and.
They became victims of malicious activity.
This customer needed to deploy a patch management solution quickly to over 40000 assets to prevent the breach the ability to deploy our solution. The same day using the same rate that they had already deployed for BMD and without the need for VPN saved the company from manufacturing line productivity losses.
Through this brief but urgent engagement wallets.
<unk> trucks with the customer by demonstrating our expertise professionalism and technical efficacy as a result, this customer is now evaluating our cyber security asset management solution with external airbags references ability.
Total streamline their security stack with the quality of our platform. We are eliminating legacy tools and have considerably improved better response times and security posture.
In another example, a continued adoption of cyber security asset management and external attack surface management.
We also expanded our engagement with the Forbes coloring food manufacturer in Q2.
Our customer expanded its deployment of <unk> and selected quality fabrics that can be asset management and patch management is additional solutions the ability to enhance their security program with comprehensive internal and external asset context risk scoring.
<unk> integration and fast remediation on a single console, while consolidating agents on an integrated platform, where all key differentiate us in this way.
Further broadening our platform capabilities you may recall in February of this year, we announced towards the cloud a unified and extensible cloud native Siem solution, featuring agent and agent less zero touch assessments scanning options, along with the SPM CW BP and cloud detection and response capabilities.
To simplify workflows and help security teams migrate workloads to public and hybrid cloud environments.
With over 30 million cloud agents are really supporting workloads in the cloud we're quite encouraged by the customer feedback and early adoption. We are seeing for our copay card solution. For example in a recent a mid six figure plus Coca Cola when our cyber security.
Seeking better security against advanced threats, and multi cloud and container environments chose our solution over competing cloud security providers, given its flexible scanning options that offer detection and unparalleled remediation capabilities from development to run time, all uniquely supported through our new adapter subscription model friction.
This platform deployment and unified dashboard.
<unk> shared here today, along with several others like them on vessel quality ability to help customers not only detect but also prioritize risk across all FX and environment, while remediated Liberty is much faster than alternative Siloed solutions in today's current macroeconomic environment, we believe our value proposition becomes even stronger as customers seek multiples.
Security offerings from a single bullet platform.
With more and more customers beginning to pursue quality, leading risk management platform that consolidates multiple secured will be point solutions across all environments. We remain confident in our ability to drive long term growth and gained market share. This confidence again bolstered in Q2.
Customer spending $500000 or more of a cost grew 21% from a year ago 268 continue.
Continuing our disruptive innovation I'm pleased to announce today, our groundbreaking launch of first party software risk management solution with nearly every organization today, becoming a software development house most of them black corporate groups or detect prioritizing intermediate hiatus, Wallabies endless configuration within their own proprietary code base with new capability now allows organ.
Physicians can leverage their existing policy MBR choice platform deployment, because not only did it actually even third party software, but also manage the risks in their own first party software.
Using a single platform. Additionally, given high prevalence of amyloid open source software like law for shows in these applications.
This new capability allows customers to manage risk from these components and get a complete picture of the true risk. This new capability will be demonstrated at black hat next week.
Encouraged by the early adoption of <unk> cloud, we are further harness technology from our recent acquisition of Blue hexagon to extend our cloud scale deep learning AI based CVR capabilities into container images by flexing the power of quality cloud platform to discover and identify relationships and patterns within our own highly integrated.
We are now enabling organizations to rapidly detect prioritize and remediate anomalous activity that are invisible and undetectable and traditional signature based solutions in the cloud.
This latest advancement empowers, our customers to proactively harmed for and respond to zero data spanning cloud and container environments from development around that.
This advanced AI based capability.
Already in action with some of our customers, helping transform their security operation Center magnifying our competitive differentiation in the market.
Looking ahead, we are further integrating our deep learning AI and ml technologies into our true risk management and remediation solutions to provide predictive insights of the longwall nonvolatile bodies, and those configurations and instances of vector exploitation and with algorithmic expertise already in house over the next few quarters, we expect to.
Our debt extend these capabilities to transform the user experience in the quarter slot platform harvesting trillions of data points and original investigation and remediation using generative AI.
In terms of our go to market initiatives investing in our partner ecosystem continues to be a pretty key priority in Q2, we expanded our relationship with several key cloud providers, including AWS, which is now making our new product bundles aimed at SMB SMB available in its marketplace additions.
Additionally, we entered into a new relationship with a leading global MSP, which shows quality over a competing detection only solution given our ease of orchestration natively integrated platform of single agent to simplify its operations and significantly reduce remediation time for its customers.
Finally, I am pleased to highlight that Dino Dimarino has joined <unk> as our new Seattle.
<unk> has an established track record in driving new business development and lead channel partnerships and high growth SaaS cloud and cyber security companies and most recently with Smith.
He will be responsible for all aspects of revenue performance with a focus on delivering sustainable customer value and business outcomes. The leadership of the worldwide sales and partner organization and accelerating <unk> growth with both new and existing customers Dino has over 20 years of sales.
Executive sales experience and demonstrated success in bringing out the most and the teams which successfully aligned sales with the product organization in support of our customer T shares and our passion for product led growth and we are looking forward to his contribution in the quarters.
In summary, our leadership as a trusted risk management platform for of record and strong financial performance started that estimate the quality dedication to innovation.
Predicting customer environments, and transforming the value proposition of traditional Liberty management technologies with cyber risk posture assessment, a response prioritization capabilities.
With a unique opportunity in this environment to further strengthen our strategic position as the partner of choice for customers looking to re architect and consolidate their security tools to solve modern security challenges. We believe we can continue to grow long term maintain best in class profitability and invest in key initiatives further.
As further extending the gap between quarters and the competition with that I will turn the call over to Jeremy to discuss in more detail, our second quarter results and outlook for the third quarter and full year 2023.
Thank you Shannon and good afternoon.
Before I start I'd like to note that except for revenue all financial figures are non-GAAP and growth rates are based on comparison to the prior year period unless stated otherwise.
Turning to second quarter results revenues grew 14% to $137 2 million.
Revenues from channel partners grew 17% PGE to LP threat, which grew 12%.
Channel revenue contribution will remain the same as last quarter at 43%.
<unk> growth in the use of 16% was ahead of our international business, which grew 12% U.
U S and international revenue mix remained the same as last quarter at 60% and 40% respectively.
Although customer dollar retention with largely unchanged. Thank you, Tim Mcdonald environment with challenging.
<unk> is down and our net dollar expansion rate on a constant currency basis at one <unk> percent down from 109% last quarter and one time last year.
While there continues to be room for improvement from smaller customers spending less than $25000 with us. We remain pleased with the continued strong revenue growth, 17% and largest bank customers.
In terms of new product contribution to banking cash management and cyber security asset management combined made up 10% of LTM bookings, 19% of LTM, new booking from TTM.
We attribute the success to our customers' needs for broader contextualize awareness of their attack surface.
<unk> integrated risk management, and remediation workflows across all environments on a single offline.
Mr. <unk> are scalable and sustainable business model adjusted EBITDA for the second quarter 2023, with $65 8 million, representing a 48% margin compared to a 45% margin a year ago.
Operating expenses in Q2 increased by 6% to $53 4 million, primarily driven by investments in sales and marketing, including head count.
Although we remain focused on driving growth with our disciplined approach to investing we are being mindful of market further increase investments, while optimizing returns and others, which resulted in EBITDA margin exceeding our expectations in Q2.
This demonstrates our ability to maintain high operating leverage our main capital question I'll continue to innovate and invest to support our long term growth initiatives.
With the strong performance EPS for the second quarter of 2023 with $1 87, and our free cash flow for the second quarter of 2023 with $50 1 million, representing a 37% margin.
In Q2, we continue to invest the cash we generated from operations back into call it including $1 4 million on capital expenditures and $42 3 million to repurchase 346000 of our outstanding shares.
And so at the end of the quarter, we had $145 7 million remaining in our share repurchase program.
Before turning to guidance I'd like to provide a few comments.
We continue to foresee a challenging environment for new customer growth, although we have been successful in building our pipeline and sales force.
With the impact of the macro economy.
We are closely monitoring the business environment and shifting our priorities accordingly.
With that said given our ratable SaaS subscription model or guide for revenue growth for the full year 2023 remains largely unchanged at 13% with a revised range of 553 million to $555 million.
The high end of the range down from 557 million last quarter.
For the third quarter of 2023, we expect revenues to be in the range of $140 5 million to $141 5 million, representing a growth rate of 12% to 13%.
Considering the long term growth opportunities ahead of us and our industry, leading margins, implying further room for investment we intend to.
We continue to make responsible investments your line of product and marketing strategy.
Andy So with respect to prioritizing investment in specific initiatives and are driving pipeline growth and supporting.
However, with our new CRM, having just joined US this quarter, we naturally expect to revisit planned initiatives, which may push out some investment by a few quarter.
As a result, we expect our full year 2023, EBITDA margin to be in the mid 40% with full year EPS in the range of 450 to four six time upfront pilings for three to $4 two <unk> for.
For the third quarter of 2023, we expect EPS in the range of $1 one zero to 1.15.
Our planned capital expenditures in 2023.
<unk> in the range of $10 million to $15 million and for the third quarter of 2023 in the range of two to 4 million.
In conclusion in Q2, we delivered healthy topline growth and industry, leading profitability and remain confident in our ability to deliver on our growth opportunity long term, all investing responsibly to maximize shareholder value.
That sooner than I would be happy to answer any other questions.
Yeah.
As a reminder.
To ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Please standby, we compile the Q&A roster.
One moment for our first question.
Our first question comes from the line of Jonathan Ho from William Blair. Your line is open.
Hi, good morning.
Afternoon, just wanted to.
Maybe dig a little bit into your guidance.
Can you maybe help us understand some of the assumptions that you have now baked in and maybe what's changed relative to your macro expectations, particularly around sort of the new customer outside.
Yes, I think.
Moving up a little bit more color, but overall I think we feel like based on what we see right now the guide as appropriate.
We're not assuming any improvement in the macro given kind of what we see in the way customers are.
We are working through and in some cases pushing out deals et cetera. So.
We did see.
<unk> me on the up sells this quarter, which was it was.
Is it something every worked through with customers.
While our win rates are down we are excited about the <unk>.
Pipeline that has been generated with some of the investments that we've made in making in the last couple of quarters and now with Dino coming onboard of course like with any executive coming onboard.
Looking forward to the contribution is going to make the long term.
That probably will be some disruption in the short term there.
So taking all those factors into consideration really.
Phil at this point, we believe the guide is appropriate for what we see.
Yeah to add a little bit.
Additional clarity.
I'd like to start.
If you take a look at our annual revenue guidance. It hasn't really changed all that much we have been consistent in stating that we believe that we'll be able to achieve 13% revenue growth and so on.
Underlying that.
It's our belief that our net dollar expansion rate isn't going to materially change. It has ticked down by a percentage this quarter and it could continue to do so, but we don't think that even with that our current billings was able to reaccelerate back up 11% from 9% and we don't see that to change.
The second half of this year.
Great and maybe just to dig into that last comment a little bit more around the net dollar expansion is there a way you could make a little bit more color.
Arms of whats impacting that net dollar expansion is there anything on the churn side or is there anything.
On your ability to sort of upsell product that's impacting this thank you.
Okay.
Retention continues to be strong so the 1% downtick is primarily due to the headwinds and upsell that Tonight commented earlier, we are seeing additional field scrutiny extended sales cycles on with existing customers. We are looking at if there's any potential cross selling upsell opportunity and all contributed to the percentage down.
Quarter over quarter.
Okay.
Great. Thank you.
One moment for our next question.
Our next question comes from the line of Matt Hedberg from RBC capital markets. Your line is open.
Hi, This is <unk> for Matt Hedberg, Thanks for taking my question here.
It's good to see corn billings accelerated.
I said last quarter back to double digit growth, maybe how should we think about billings growth in the second half of the year should we expect billings growth to continue to accelerate and if so could it accelerate back to mid to high teens growth given.
Even the backups.
Okay.
Yeah, we typically don't guide to correct, because we don't actively manage to that number and then it could fluctuate due to the billing terms for the customer, but with that said, what we're seeing right now in the business is 9% to 11%, we don't see that materially ticking up in the last quarter I think it will be more or less the same assuming that there are no significant.
Changes in the billing terms I think as with any customers coming in Q4, it's a little too early to call.
But at the same time, we don't see it going down to single digits right now.
Got it and then.
You significantly outperformed in profitability with 48% EBITDA margin get a significant step up from last quarter.
Can you talk about what's driving that outperformance and improved leverage.
It's primarily due to the fact that we've always taken a very disciplined approach to investing.
Been very flexible because.
No the way, we look at investment opportunities, we take a look at and that initiatives that we have to correct that plan for the whole year and then we tend to prioritize based on the returns that we see from each of the investments that we've already made and right. Now we just didn't see that there was a reason for us accelerate and increase investments in multiple different.
And especially because we knew that we were looking for a new CFO . We had planned on finding the right person. This year and we're very fortunate to have been on board. So we can onboard with US right now will be assessing all of our initiatives to understand maybe it makes sense for us to increase investment in Q3 Q4, but based on what we see right.
Now we think that.
More likely scenario and in the full year EBITA margin in the 45% range.
Got it thank you.
One moment for your next question.
Our next question comes from the line of.
Rudy Kessinger from D. A Davidson your line is open.
Hey, guys. Thanks for taking my questions Jimmy I, just wanted to maybe clarify the current calculated billings and maybe the revenue guide I know last quarter.
You had said you expected current calculated billings growth to accelerate throughout the rest of the year, obviously it pops.
Two points here in Q2 over Q1, just to be clear you would expect current calculated billings growth to remain roughly flat in Q3, and Q4 I just want to make sure Thats. What you are saying and then on.
The guide again for the full year growth about the same at the midpoint, but I think exiting the year. The guide now implies growth closer to about 11% versus probably <unk>.
13 ish percent previously so it does appear to be a step down in the growth exiting the year, just just want to make sure that there is nothing I am missing there.
Yeah.
<unk> calculated billings, we view that even though we don't think we need a 9% Q1 was an anomaly. It wasn't really unrepresentative up additional momentum that you're seeing so that's why we had indicated that it would be higher for the remainder of the year looking at 11% in Q3, I don't think that it will be materially different I don't see it kind of ticking down.
From that 11% right now.
Q3, and Q4 I think it will.
We will be more in line with that 11% achievement that we had in Q2 or potentially higher.
Okay, and then maybe just one last one the modest gross margin stepped up.
Good amount.
Q2 versus Q1, and I think just probably the highest you've shown at least several years.
Is that kind of a new.
Go forward bar for gross margins, where it was there anything that you benefited from onetime in the quarter.
Nothing to call out as being another one one thing that we did make this year.
Employee Pvt Merit cycle.
It was down a little bit later, but that will hit in Q3 versus Q2.
But if you take a look at the gross margin of 82%, we will we expect to hover around the 81% to 82%.
At getting some cost savings just because we are taking a disciplined approach to making sure that we're getting the efficiency, where we think that we can.
So it's nothing material to call out there, we think that it will hover around that range.
Great. Thanks for taking my questions.
Our next question.
Our next question comes from the line of Mike Walkley from Canaccord Genuity. Your line is open.
Great. Thanks wanted to ask.
Maybe about the Gov cloud introduction.
The early feedback from the fed and government customers.
Are you seeing that maybe.
Customers might be more or less willing toward towards vendor consolidation in your enterprise space.
Yes, that's a great question.
Really been exciting for us to see the.
Conversations that we're having with the federal customers.
These are the one of the best Congresses as I've seen since I've taken over and so I think that's very encouraging for us.
A couple of good wins last quarter, we highlighted that as well from the federal side then.
Good pipeline developing.
I'm really because when you talk about fragrance Pi ready.
The fact that the black from can do patch management <unk> management all of it in one there is no other rental right now that has that fed ramp how much management as an example, and so the engagement daily becomes very comprehensive it's not just about getting a scan in giving you for DRAM high scanner. So those conversations become more holistic inmates.
And what's also interesting is that the fed ramp high.
In the Gulf Cloud conversation is also driving commercial customers that want to.
Also provides <unk> services to the government to have these conversations with us because they want their clouds to be.
And the air solutions can be fed to Empire. So it's not just a pipeline building from the federal government, but also the pipeline that we're encouraged to see the early signs from commercial customers, who are saying we need to go for a refrigerant <unk> clauses.
The only backhaul service, providing that kind of risk management.
<unk> of the house, which has us identify silos.
Great. That's good to hear and helpful. Just for my follow up question, congratulations on adding Dino Maryann to the team just just to clarify in Opex is at Aerie is slowed in the near term as you wait for him to kind of formulate a plan and that's the higher profitability or is it just overall cautiousness given the macro backdrop. Thank you.
Yes.
It's more the former.
We really believe that we are focused on balancing growth and profitability and we think that there's a huge upside and opportunity ahead of us, but then again, we want to make sure that we time it so that we maximize the returns. So right. Now we are just reassessing, we were being to make sure we understand and we can justify some of the investments that we're going to double down on.
Great that makes sense. Thank you.
<unk>.
Thank you one moment our next question.
And our next question comes from the line of Hugh.
Loop capital markets. Your line is open.
Okay, great. Thank you just following up.
Up on that question congrats on the hiring of the new CIO.
Should we expect any change to the go to market motion in the second half of the year end.
What are some of the investments around go to market you were initially planning in second half that you plan on.
On delaying into next year.
I think one of the reasons why we were so excited to have be noisy really has that product led growth mindset, and citing which really jokes weighted because <unk> given all the capabilities that we have on the platform and so many opportunities that we have as you saw today, even with the first of our disc assessment capabilities. So I think.
If you look at some of the investments that we had been driving.
Even before Dino came onboard pretty excited to see that some of those investments that we have in marketing and partner are actually showing some good early signs of a strong pipeline very good.
Interaction with our partners et cetera, and then.
There are other areas.
Sales enablement et cetera, where we're continuing to invest in those some of those are going to continue because I think we have a strong conviction.
And their go to market motion around building that pipeline and then as Dino comes on board and he is sort of looking at.
This agency structured and how we're going to address larger accounts that are spending quite a bit of both of those are more versus the smaller accounts are going to a thousand or less there's certain areas, where we are looking at where do we make the investments where do we optimize the investments that we've already made right. So we have a good growth in investments last year relative to the year before.
Some of those investments you need to optimize them to make sure we're getting the value out of those and so Dino will comment as he's onboard he will look at some of those areas as well and then we'll formulate.
This is Bob I'm involved on our day to day basis everyday with the business and so Jim and I are going to partner to make sure that we continue our focus on growth and profitability.
Balancing those while looking at.
Additional opportunities to improve our execution and sales as well as the rest of the GPM and improvement in Parker motion et cetera. So that we can set ourselves up for the longer the longer term growth that we believe that we can bring.
Great. Thank you for that Julie.
Good day with a huge sequential decrease in the long term deferred revenue.
Our concerted effort to sign longer duration deals or what I've, just a couple of larger deals.
Tend to have a bigger deals in the quarter.
It's flatter.
To have multiyear prepay, but it's not something that we were actively seeking.
Okay, great. So this is not something that.
Changed this past quarter strategy around those contracts.
Okay, great. Thank you.
One moment for your next question.
Our next question comes from the line of Josh <unk> from Wolfe Research. Your line is open.
Hi, This is Patrick on for Josh. Thanks for taking my question first on the billings in the quarter linearity strong did you all see any benefit from deals that may have slipped out of <unk> and <unk>.
Then with the adjusted EBITDA commentary moving up to 45% to 45% range for the full year does that change the commentary around the low to mid <unk> free cash flow margin expectations for the full year.
Yes.
I'll answer the EBITDA margin and free cash flow margin guide, we're guiding to mid point of 40 for the EBITDA and then free cash flow within the next 30 low 30 because of that.
Okay.
Okay, Great and then on the <unk>.
Billings did you all see any benefit from deals that slipped out of <unk>.
Okay.
I'll take your Geely, we typically call out if there is a large geos that impacted currently we didn't really see anything in Q1 of <unk> to call out, but naturally theres always slippage rate, sometimes we have some benefits and we have some peaks.
Okay, great. Thank you.
One moment for next question.
Yeah.
And our next question comes from the line of Matt Saltzman for Morgan Stanley .
Line is open.
Great. Thank you.
So I'm just curious around any potential contributions from the move at hack intra quarter. I know you mentioned silicon period with deal scrutiny and delayed starts but I'm curious if you saw kind of any incremental demand related to the hack in south Korea to stable to maybe quantify what the what the potential benefit.
No nothing meaningful change from that perspective, it's the same pattern that we saw even back with.
With celebrities or went away because our customers typically.
And prospect, they engage to understand and come out with a more long term strategy around addressing these thing that other than it's jerk reaction of having to find and deploy sort of immediately more licenses et cetera. So we really didn't see.
Any impact in Q2 of that of course continues to highlight the importance of Liberty management and patching. These whenever it is in time because that was one of the biggest thing was not just at the moment. He was there it was actually being exploited pretty rapidly.
And.
The conversation from our customers that we hired about more around it can you help us fixed statement Patrick not just can you detect that with the scanner and so.
I think what we're seeing is just continued engagement.
Management and risk management around that is a strong.
Focus for customers, but nothing to call out from a contribution this.
This quarter.
Got it thanks, and just as a quick follow up.
On the announcement around risk assessment for first party apps.
I'm curious if the plan is to directly monetize this and that it will have an incremental ASP uplift or is this more about just bolstering overall, the MTR platform and making it stickier, making it more attractive for customers to adopt multi.
Multiple solutions.
Yes, I think Thats always what I dream of every night I go to sleep with recoveries continue to write offs and how all of these things will contribute towards.
Better retention of the MDF. However, look the way we look at this is the third part of this assessment with Cvs has been something that quality and others have been providing for a while but today what have the software running on servers et cetera is homegrown software and that does not have a good way to create signatures and find while liberty's that are very specific to each end.
<unk> customer and so for us providing this.
Additional capably be will be an add on to the <unk> platform that customers will have to purchase but what we do see is that.
Because it then brings bad card Bharti and first part D. Vulnerabilities in this kind of <unk> into a single view and with the initial conversations that I've had with about <unk> in the last couple of days.
We're quite excited about the initial feedback that we're getting.
They really don't have good tools right now where there's a lot of them are writing their own scripts by hand, and so if they can just leverage the redeployment of quality that they already have one of the same asset also look for their own custom Liberty's a lot of them really want to take a look at it and evaluate it and it will be additional.
Revenue that we will look forward. However, it's too early at this point to call out for how that production of.
<unk>.
Embracing that will be from our customers and their adoption et cetera.
We will continue to look at it and monitor it again and just like we've.
We've done four patch management and vibrancy of the asset management, we will continue to look at different Google cloud is there additional newer areas that we are getting good feedback on it and see how they will start to contribute towards ASC.
Got it thank you.
Thank you and with that we'll end our Q&A session. This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
Goodbye.
Okay.
[music].
Yes.