Q4 2024 A10 Networks Inc Earnings Call
Hello everyone and welcome to A10 Network's fourth quarter and full year 2024 financial results call. My name is Lydia and I'll be your operator today.
Speaker Change: After the prepared remarks there will be an opportunity to ask questions. If you'd like to participate in the Q&A you can do so by pressing star followed by one on your telephone keypad. I'll now hand you over to Tom Baumann at SNK-IR to begin. Please go ahead.
Speaker Change: Thank you all for joining us today. This call is being recorded and webcast live and may be accessed for at least 90 days via the ATEN Networks website at atennetworks.com.
Speaker Change: During the course of today's call management will make forward looking statements, including statements regarding projections for future operating results demand industry and customer trends strategy potential new products and solutions for our capital allocation strategy.
Speaker Change: Stability expenses or investments positioning and our dividend program.
Speaker Change: These statements are based on current expectations and beliefs as of today February four 2025.
Speaker Change: Forward looking statements involve a number of risks and uncertainties.
Speaker Change: Some of which are beyond our control that could cause actual results to differ materially.
Speaker Change: So you should not rely on them as predictions of future events.
Speaker Change: <unk> does not intend to update the information contained forward looking statements, whether as a result of new information future events or otherwise unless required by law.
Speaker Change: For a more detailed description of these risks and uncertainties. Please refer to our most recent 10-K and quarterly report on Form 10-Q.
Speaker Change: Please note that with the exception of revenue financial.
The measures discussed today are non-GAAP basis, and have been adjusted to exclude certain charges.
Speaker Change: non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies.
Speaker Change: A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today and on the trended quarterly financial statements posted on the company's website.
Speaker Change: Now I'd like to call turn the call over to Jupiter Trivedi, President and CEO of Aten networks.
Speaker Change: Yeah.
Speaker Change: Thank you Tom and thank you all for joining us today.
Speaker Change: And then the 'twenty 'twenty four year, delivering 5% growth for the quarter and 4% growth for the year as a service provider marketplace continues to normalize and we are making the expected progress to expand our presence with enterprise customers.
Speaker Change: We entered 2025 expecting the current trends around service providers to continue and deliver continued growth with enterprise customers.
Speaker Change: Optimism is bolstered by an improving competitive position with both customer segments and the recognition.
Speaker Change: That security and AI related investments are increasingly serving as a catalyst for spending.
Speaker Change: We believe that <unk> offering is exceedingly well aligned with both of these secular trends.
Speaker Change: For service providers that need to expand AI data centers continues.
Speaker Change: Centers are incredibly hungry firepower Andy.
Speaker Change: And the availability and cost of reliable electricity.
Speaker Change: Our considerations for locations that logistics.
Speaker Change: As a result, we are seeing accelerating interest in aten solution as part of AI data and Tech development.
Speaker Change: Our products provide industry leading efficiency.
Speaker Change: In terms of throughput and low latency and also include integrated security capabilities.
Speaker Change: The result is that service provider customers need fewer again products compared to competitive offerings.
Speaker Change: Materially reducing the power consumption without sacrificing performance.
Speaker Change: This is serving not only as a catalyst for our business but.
Speaker Change: But also as a meaningful competitive advantage.
Speaker Change: Combined with the expected backfill all spending following the balls as we experienced last year, we are seeing an improving pipeline from north American service provider customers.
Speaker Change: We expect this to continue while short term quarter to quarter volatility in spending patterns may persist.
Speaker Change: I am encouraged that service provider revenue was up two 5% for the year considering that it was down nearly 8% through the first six months of the year.
Speaker Change: The turnaround in the second half.
Speaker Change: While expected is a positive indicator heading into 2025.
Speaker Change: On the enterprise customer side, we are.
Speaker Change: Responding to the slowdown in spending from service providers by accelerating investments to drive demand from enterprise.
Speaker Change: This initiative was successful as we grew revenue from enterprise customers faster at 6% for the year Danville consolidated revenue at 4%.
Speaker Change: We have a compelling offering to enterprise customers and we are investing heavily to further expand and bolster our suite of solutions, particularly to align with AI trends.
Speaker Change: Most of these investments are the culmination of several years of innovation and engineering.
Speaker Change: And we are just now beginning to see the benefits.
Speaker Change: We are developing additional solutions for Bot protection Ddos mitigation and technologies that are designed specifically for GPU based AI infrastructure.
Speaker Change: We will integrate AI to predict performance with our solutions and with Adas controllers, we believe they both centralized management for all <unk> products.
Speaker Change: Within it and defend our cyber security suite, we continue to develop solutions that will help our customers protect their mission critical applications and infrastructure.
Speaker Change: An ever growing number of cyber threats.
Speaker Change: We anticipate any brewing pipeline related to these investments in 2025.
Speaker Change: AI has become an important near term catalyst for our business.
Speaker Change: And we are strong and getting stronger in this area.
Speaker Change: This combined with our focus on cyber security solutions continues to play a role in our growth.
Speaker Change: Security revenue increased 6% for the quarter and 9% for the year.
Speaker Change: Our focus on security continues to make our solutions less optional.
Speaker Change: In mitigating the impact of short term fluctuations in spending priorities and enabling <unk> to outperform our peer group.
Speaker Change: We had previously stated our long term goal was to drive 65% of our revenue from security led solutions and for the full year security represented 63% of revenue.
Speaker Change: I think it's also worth noting that in Q4, we delivered growth in all key regions, North America Asia Pacific, Japan and EMEA.
Speaker Change: For the past year, we had been stating that demand was consistent in EMEA and Japan, but soft in North America.
Speaker Change: That trend has begun to correct inline with the improving market conditions for North American service providers as previously mentioned.
Speaker Change: And validating the strength of our technical solutions in all markets.
Speaker Change: Our priorities continue to be a mix of internal investments to support revenue generation.
Speaker Change: Returning capital to shareholders and evaluating strategic opportunities to accelerate growth.
Speaker Change: I spoke in detail about the internal investment related to our long term cyber security blueprint in the last earnings call.
Speaker Change: Simultaneously, we continue to consistently return significant capital to shareholders.
Speaker Change: In spite of a challenging macro environment, our strong second half performance continues to demonstrate the earnings power of our business model.
Speaker Change: Maintain robust profitability in line and slightly ahead of our target in the quarter.
Speaker Change: Our strong results also enabled us to support our R&D investment.
Speaker Change: While simultaneously accelerating our cash generation ending the year with nearly $200 million in cash and marketable securities even as we returned significant capital to shareholders.
Speaker Change: We have continued to buy back stock.
Speaker Change: Our cash flow has more than funded our buyback and dividend programs.
Speaker Change: With that I'd like to turn the call over to Brian for a detailed review of the border and the year Brian.
Brian: Thank you David.
Brian: Fourth quarter revenue was $74 2 million, an increase of five 4% year over year. The growth was broad based with enterprise revenue, increasing 8% faster than consolidated revenue.
Brian: Service provider revenue increasing 4%.
Brian: The results reflect the continued normalization of service provider spending patterns and the investments we made in the enterprise segment.
Brian: Quarter to date volatility in North America service provider sector persists, but the overall trends are increasingly positive.
Brian: Product revenue for the quarter was $43 3 million, representing 58% of total revenue.
Brian: Services revenue was $30 9 million or 42% of total revenue.
Brian: Deferred revenue increased 5% to $148 3 million demonstrating stronger product sales in the fourth quarter and continued demand for our security led solutions.
Brian: With the exception of revenue all the metrics discussed on this call on a non-GAAP basis, unless otherwise stated a full reconciliation of GAAP to non-GAAP results are provided in our press release and on our website.
Brian: Gross margin in the fourth quarter was 87% inline with our stated goals of 80% to 82%.
Brian: Adjusted EBITDA was $27 4 million for the quarter, reflecting 36, 8% of revenue.
Brian: non-GAAP net income for the quarter was $23 million or 31 cents per diluted share compared to a 100 excuse me $18 5 million or 25 cents per diluted share a year ago quarter.
Brian: Diluted weighted shares used for computing non-GAAP EPS for the fourth quarter were approximately 75 million shares effectively unchanged year over year.
Brian: On a GAAP basis net income for the quarter was $18 3 million or <unk> 24 per diluted share compared to net income of $17 9 million or <unk> 24 per diluted share in the year ago quarter.
Brian: We recorded a one time gain and OID of $3 million in the fourth quarter. Adjusted for this onetime event of non-GAAP EPS for the quarter would have been 27 per diluted share.
Brian: Turning to the full year results revenue was $261 7 million up 4% year over year.
Brian: Year to date non-GAAP gross margin was $81 2 million in line with our target range and adjusted EBITDA was $74 5 million, reflecting 28, 5% of revenue.
Brian: non-GAAP net income for the year was $64 8 million or 86 cents per diluted share up from $54 9 million or <unk> 73 per diluted share last year.
Brian: Adjusted for the nonrecurring game.
Brian: <unk> discussed earlier, our non-GAAP EPS for the year would have been approximately 82 cents per diluted share.
Brian: Not on a GAAP basis net income for the year was $50 1 million or <unk> 67 per diluted share compared with net income of $40 million or <unk> 53 per diluted share.
Brian: During the year, we generated $95 million in cash from operations.
Brian: Our full year targets.
Brian: Cash generation benefited from the timing of Opex and working capital mix, and we anticipate future cash generation to be more in line with historical patterns.
Brian: Turning to the balance sheet as of December 31, 2024, we had $195 6 million of total cash cash equivalents in marketable securities.
Brian: Compared to a $159 3 million at the end of 2023.
Brian: During the quarter, we paid $4 $4 million in cash dividends and repurchased $5 8 million worth of shares.
Brian: [laughter].
Brian: We also continue to carry no debt.
Brian: The board has approved a quarterly cash dividend of <unk> <unk> per share to be paid on March three 2025 to shareholders of record on February 14th 2025.
Brian: We have $44 2 million remaining of our $50 million share repurchase authorization as of December 31.
Brian: We continue to target gross margins of 80% to 82% and adjusted EBITDA margins of 26% to 28% on a full year basis.
Jupiter Trivedi: I'll now turn the call back over to Jupiter for closing comments.
Speaker Change: Thank you Brian.
Speaker Change: This was a solid year for it then with strong performance in the second half of the year, reflecting the ongoing normalization of service provider spending.
Speaker Change: And consistent enterprise growth as a result of the strategic investments we've made in this portion of our business.
Speaker Change: We are navigating market volatility successfully due to our focus on security solutions, our tight alignment with AI trends and our strategic diversification.
Speaker Change: Our investments in R&D are expected to result in additional solutions leveraging our growing position in the cyber security sector further enhancing our growth profile.
Speaker Change: We have consistently proven the ability to convert incremental revenue into significantly higher raw fertility levels and we expect that to continue as we enter 2025.
Speaker Change: Operator, you can now open the call up for questions.
Speaker Change: Thank you.
Speaker Change: Please press star followed by the number one if you'd like to ask a question I mean surely your devices, Amit you likely minute short time to speak.
Speaker Change: Our first question comes from Gray Powell with BTG.
Please go ahead your line is open.
Speaker Change: Okay, great. Thanks.
Speaker Change: Thanks for taking the question and congratulations on the.
Speaker Change: Very solid.
Speaker Change: Results.
Speaker Change: Thank you Greg.
Speaker Change: So yeah, yeah absolutely.
Speaker Change: Yes, maybe just to get into it.
Speaker Change: Just looking at the Q4 numbers I'd be curious like how did it seasonality in Q4 compared to the last couple of years did.
Speaker Change: Did you see.
Speaker Change: Our normal budget flush.
Speaker Change: And just.
Speaker Change: Any dynamics there that you could talk about would be helpful.
Speaker Change: Yeah, I'll start off and Brian can add to it. So I think I would say that seasonality that we saw in Q4.
Speaker Change: It's it's probably consistent with previous years that we saw less of a budget flush phenomenon. This time around.
Speaker Change: And I would say this was.
Speaker Change: Probably just an extension of the idea that to the right. We are seeing increased.
Speaker Change: Signature then scrutiny around spending.
Speaker Change: And Capex.
Speaker Change: Capex as well as Opex and so we did not see maybe as much of that year end activity, but when you look at our seasonal pattern and they thought it's pretty consistent with previous years as well.
Speaker Change: Yes, I understood throughput.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: I'm sorry go ahead, I didn't mean to cut you off.
Speaker Change: Apologies I just wanted to add that it's in line with our typical seasonality pattern of 52% on back half, 48% on a front half 48 52.
Speaker Change: Okay understood and then alright, and then you called out some new products coming up this year can you just repeat like.
Speaker Change: The products again, I think it was bought detection something around Ddos and.
Speaker Change: <unk> protect GPU based AI infrastructure.
Speaker Change: I guess I'm just trying to the question is.
Speaker Change: How should we think about the timing of those project of those products coming to market and then just what's the excitement level around them.
Could it drive upside to revenue this year.
Speaker Change: Yes, good questions and maybe you know what.
So that great I would segment that between sort of our security products and then products that are influenced by AI spending right little separate.
Speaker Change: So on the security side I would say what we are.
Speaker Change: We're focused on is really expanding the categories. We can provide to customers with still a common way to manage and run that right and so within that category, we are improving our ddos detection and mitigation products, adding things like board management.
Speaker Change: Which may be adjacent to those categories and this is.
Speaker Change: Kind of ongoing expansion that you should see play out in second third fourth quarter of this year.
Speaker Change: Basically does two things improves our competitive position.
Speaker Change: But at the same time gives us a natural way to scale, our security platform, where we have done the work on the kind of foundation and the management layer already right. So those I would say our.
In the next six to 12 month window, we should start seeing those as enhancing of our security story incrementally as well.
Speaker Change: As it relates to some of the AI oriented products.
Speaker Change: I would say on the first layer, where people are building new data centers to support AI traffic.
Speaker Change: We will probably see that impact as a positive thing in 2025.
Speaker Change: Again towards the second half of the year, but.
Speaker Change: The excitement around that is really that.
Speaker Change: When they are building these data centers things like throughput latency connectivity are more important.
Speaker Change: So I'll, let advantages as it relates to those attributes out of direct advantage that so and that data point for us as customers engage with us in the viewing those kind of build out plans that is current products as well as kind of a roadmap.
Speaker Change: Second layer operate is using AI to develop.
Speaker Change: Ladies like predictive analytics.
Speaker Change: I would say customer excitement is.
Speaker Change: It is good.
Speaker Change: But the deployment cycle is probably little bit farther out.
Speaker Change: And the reason for that is.
Speaker Change: As we have said before.
Speaker Change: That is a very well there's the massive build out of the EI, but then the real businesses when enterprises are doing that local.
Speaker Change: Deployment, I'll say local learning centers and inference models and.
Speaker Change: I'll, let engagement with customers right.
Speaker Change: Using AI.
Speaker Change: Not necessarily building them today, so that positive Blackstone, but that is aligned more with the mass adoption of AI versus just the massive initial build out if that makes sense.
Speaker Change: Yeah.
Speaker Change: Yes, that's very helpful. Okay. Thank you very much.
Speaker Change: Okay. Thanks.
Christian Schwab: Our next question comes from Christian Schwab with Craig Hallum. Please go ahead.
Christian Schwab: Hey, guys. This is Tyler on behalf of Christian Thanks for letting us ask a few questions.
Christian Schwab: Maybe first just following up on that last question you know could you break out what's your AI revenue.
Speaker Change: To the customers building their own data centers, and then selling your AI enabled products.
Speaker Change: What that is at a baseline now and how you said growing maybe what it could be.
Speaker Change: At the end of the year out a couple of years.
Speaker Change: Yeah.
Tyler: I think thank you Tyler.
Speaker Change: Good question.
Speaker Change: It's something we'll have to figure out how to.
Speaker Change: That big that view and the reason for that is.
Speaker Change: Our current products.
Speaker Change: We are actually being used for those applications as well so.
Speaker Change: Not necessarily linked to.
Speaker Change: Releasing new products that go into those build outs as it too.
Speaker Change: Products that are designed around.
Speaker Change: Inspecting and mitigating AI oriented threats as well as analytics I think thats early in the cycle and I think we will have to come back maybe in the next.
Speaker Change: A quarter with a view of how we wanted to communicate that in terms of number of customers, our funnel growth and things like that because it's not going to convert to revenue in the next two periods.
Speaker Change: Okay. No fair enough. So then you don't maybe as you think about the full year 'twenty five here with.
Speaker Change: With service providers normalizing continued traction with enterprise customers.
Speaker Change: AI opportunities layering in as well.
Speaker Change: Kind of a backfill like you mentioned or maybe a catch up in some of these deals.
Speaker Change: Could it be possible that you're able to drive growth in 'twenty five ahead of the 10% to 12%.
Speaker Change: Longer term growth number that you're targeting.
Speaker Change: Yes, so I think for 2025 right I would say this year, we were able to get back to 4% with that normalization of market.
Speaker Change: We are continuing to understand the impact of things that are outside of our control like you know.
Speaker Change: What can happen with interest rates that is everything else, but what we do know is we are on a positive trajectory in terms of what is it last year to this year to next year.
Speaker Change: And as we go through 'twenty 25, right.
Speaker Change: We expect.
Speaker Change: In the middle of the year to maybe have a better view of it can be better.
Speaker Change: But right now I think we feel confident with where people are expecting us to be and.
Speaker Change: Still navigating some of these macro things that are outside our control.
Speaker Change: Okay that sounds great and then last one maybe for Brian.
Speaker Change: On Opex.
Speaker Change: It fluctuate a little bit quarter to quarter, two this last year, but.
Speaker Change: With it being down almost 4 million sequentially I guess from Q3 to Q4 30.
Speaker Change: <unk> 35, and a half million non-GAAP Q4 number.
Speaker Change: Could you help maybe level set us on an opex, what kind of run rate, we should be thinking about heading into 'twenty five.
Speaker Change: Yes of course.
Speaker Change: Two to your point $149 million of Opex for 2004.
Speaker Change: On a non-GAAP basis looking forward I mean, we're talking about AI, we're talking about products that we are innovating and developing for introduction in 2025, So I.
Speaker Change: I think the obvious point is that we're not going to continue the same run rate as a percent of revenue you could expect it to tick up.
Speaker Change: No not materially but to some level.
Speaker Change: Because that's going to reflect the investments, we're making in cyber security and infrastructure products not only with our existing portfolio. But then also with AI opportunities that are in the market.
Speaker Change: And maybe go out to that Tyler right. Our long term goal as I was saying gross margin of 80% to 82% and EBITDA of 26 to 28 is still valid right but.
Speaker Change: We are investing within that envelope for growth as well.
Speaker Change: Perfect.
Speaker Change: Alright, that's all for us thanks, guys.
Speaker Change: Thanks Al.
Speaker Change: Thank you. Our next question comes from how much costs on to AWS.
Speaker Change: Please go ahead.
Speaker Change: Hi, So first question was the orders that you were seeing from the North American service providers.
Speaker Change: Was that merely just.
Great or tack ons to orders that you were receiving maybe a year or two years ago and these are just purely because of <unk>.
Speaker Change: Constraints in their system or are these brand new sales expansion as far as Atms roll goes.
Amit: Yeah, no. Good question, Amit, So I would say.
Amit: I would say it was a mix I think that we're definitely all of that related to new build outs of new data centers our network.
Amit: And then with some of those customers as they continue to operate in that book based on capacity, they buy a little bit up or down so.
Amit: So, but we were certainly seeing.
Amit: More of the new build out orders in Q4 than we did any other quarter this year outside of the previous year.
Amit: Alright, and then as far as enterprises concern.
Speaker Change: The customers coming to you and asking you for these AI solutions or is that more of a competitive threat that you feel like it.
Amit: Be ahead of the game here.
Amit: Oh, So I would say that is the way we are approaching that is.
Amit: That AI is integrated into pretty much all of our product roadmap. So when they are buying a security product that natural extensions are then inclusive in the future of <unk>.
Amit: AI traffic detection and unique threat man.
Managing all of that so far as AI is just a new capability, we are enabling them with and you are correct. The conversations with customers today are more.
Amit: About them partnering with us on the roadmap and their long term goals more so than sort of a competitive bid against.
Some other business yeah.
Brian: And then Brian.
Brian: Our accounts receivable is up in this quarter is it safe to assume that many of the much of the order for the revenues came in towards the end of the quarter.
Brian: Yeah. Good question I mean.
Brian: As you can see we had pretty significant.
Brian: SaaS.
Brian: Driving cash flow during the quarter as well as building working capital, but yes, youre exactly right I mean kind of like what Greg mentioned earlier, we saw a pretty significant increase in the amount of revenue balance in the back half. So that's reflective in the AR balance going up about the same rate that you see.
Brian: Revenue, but yes, absolutely. It's linearity, it's normal course of business for US we always expect to have a pretty significant accounts receivable balance walking out of Q4, when compared to the prior quarters.
Brian: Okay. Thank you.
Speaker Change: Hey, Gavin.
Speaker Change: Thank you and our next.
Speaker Change: Next question comes from on Yes that is strong with Daiichi and play.
Speaker Change: Your line is open.
Speaker Change: And thank you for taking my questions and congrats on a nice progress here.
Speaker Change: For the products I mean, we saw good growth how long is the lag the fair enough.
Speaker Change: The benefits to San Francisco Libya.
Speaker Change: Yeah.
Speaker Change: Nothing has really changed in our business model. Our average contract term is about two years. So.
Speaker Change: Simple rough math, when we do product sales growth you expect that's a leading indicator for our services growth and I think you can see that in the services.
Speaker Change: <unk> as well as deferred revenue deferred revenue was up at almost the same rate as total revenue of which we would expect but.
Speaker Change: But yes, I think to your question.
Speaker Change: Two year run out on average so as you see product revenue growth today than you expect in the following year the same growth rate in the services revenue line.
Speaker Change: Okay. Thank you.
Speaker Change: Martin the first mining project products branded software, what's going on there.
Speaker Change: Yeah. This is.
Speaker Change: As we get through the end of the year, we get a lot of long term projects that we've been working through and it depends on the region and it depends on the customer mix, whether they are buying software hardware.
Speaker Change: All kinds of factors, but in this case I mean, the change in gross margin simply reflected of geographic and product mix.
Speaker Change: Yes, I think it is.
Speaker Change: Yeah, that's right that's right and that's why when we say, 80% to 82% that's reflective of accommodating that regional and product mix.
Speaker Change: Okay. Thank you and are you at all affected by terrorism, sometimes with our products.
Speaker Change: We will be I mean.
Speaker Change: Once once that's locked it in.
Speaker Change: You can expect what the impact will be we are absolutely not impervious to the impact of tariff hikes in different regions from a procurement perspective, and then I'm sure that will put pressure on sales price in other regions, but.
Speaker Change: To be determined I think as we always talk about over the last five years. As you know these are headwinds that we anticipate and expect and our operating plan and we always deploy countermeasures to overcome those to deliver the results you see.
Speaker Change: And and maybe you.
Speaker Change: No no.
Would you have to take the hit.
Speaker Change: Yeah, So it's going to add one thing and Brian can talk to it but remember right now we are talking about three major regions right in.
Speaker Change: If you recall, we had made the decision and we don't have any exposure in China market right. So that's not something that we have.
Speaker Change: Deliberately make that decision.
Speaker Change: Obviously, we have business in Canada, and Mexico, but it's not as large as most other countries. So we will continue to monitor what the puts and takes out on those.
Speaker Change: But as Brian said, obviously, we don't know what we don't know yet.
Speaker Change: And I think to your follow on question in terms of passing through those costs I mean, it's a case by case basis I mean, we're not.
Speaker Change: Wholesale raised places to overcome challenges, we typically deploy countermeasures internally to find cost savings that we can pass out of our customers, but yeah. This.
Speaker Change: This won't be an indicator of a price increase globally.
Speaker Change: Okay. Thank you and then within EMEA.
Speaker Change: What's that doing well for you, but can you just talk.
Speaker Change: Talking about Europe, specifically.
Speaker Change: Typically what you see there.
Speaker Change: Yes, so I think when we talk about Europe right I think we typically internally look at it in three.
Speaker Change: Three pieces, so that is core Europe.
Speaker Change: Emerging right Europe, and then middle East and I think when we see the business day, we saw our business in Europe continued to be pretty stable business in the middle East.
Speaker Change: As it is mixed across countries. Some countries are fine to monarch.
Speaker Change: But if you look at the core Europe, and what you would normally think golf is.
Speaker Change: Northern parts of Europe.
Speaker Change: Continue to build our business.
Speaker Change: Pretty constantly over there so we see that as good market for both service provider enterprise growth.
Speaker Change: Okay. Thank you and then just one last one in terms of strategic opportunity is how active are you looking for that and have you seen any changes there.
Speaker Change: <unk> activities.
Speaker Change: Yeah. So of course, I think as the market has changed and companies have gotten kind of related on multiples and things like that.
Speaker Change: We see a lot of inbound.
Speaker Change: As well as companies looking for a strategic fit.
Speaker Change: And so we are pretty actively looking at those that and as we said before.
Speaker Change: Our focus is on things that accelerate our strategic goals around enterprise security and things like that.
Speaker Change: And we'll continue to look at them, but we are pretty actively involved with looking at.
Speaker Change: Product product gap fillers, as well as technology as well as market expansion.
Okay. Thank you that's all for me.
Speaker Change: Thank you.
Speaker Change: Thank you we have nice other questions. So I'd like to turn the call back to Paul for any closing comments.
Speaker Change: Thank you.
Speaker Change: And thanks to all our shareholders for joining us today and for your continued support.
Speaker Change: This.
Speaker Change: Later today. Thank you very much for joining you may now disconnect your lines.