Progress Software Corporation

Hello, and thank you for standing by. Welcome to Progress Software third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again I would now like to hand the conference over to Michael Michique. You may begin.

Okay, thank you, Tawanda. Good afternoon, everyone, and thanks for joining us for Progress Software's third fiscal quarter 2025 financial results conference call. With me this afternoon are our president and CEO Yogesh Gupta and our chief financial officer, Anthony Folger. Before we get started, let me go over our safe harbor statement. During this call, we will discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives, our integration of share file, and other information that might be considered forward-looking. Such forward-looking information represents Progress Software's outlook and guidance only as of today, and is subject to risks and uncertainties, and our actual results may differ materially. For a description of the factors that may affect our future results and operations, please refer to the risk factors in our SEC filings, particularly the risk factor section of our most recent form 10-K and 10-Q. Progress assumes no obligation to update forward-looking statements included in this call. Additionally, please note that all financial figures referenced in the call are non-GAAP measures unless otherwise indicated. You can find a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP figures in our earnings press release, which was issued after the market closed today. This document contains additional information related to our financial results for the third quarter of fiscal year 2025, and I recommend that you reference it for specific details. We've also provided a slide presentation that contains supplemental data for our third quarter and provides highlights and additional financial metrics. Both the earnings release and the supplemental presentation are available on the investor relations section of our website at investors.progress.com. Today's call is being recorded in its entirety, and it will be available for replay on the investor relations section of our website shortly after we finish tonight. So let me turn it over to you, Yogesh. Go ahead, please.

Thank you, Mike. Good afternoon, everyone. We're glad you can join us for our third quarter earnings conference call today. As you saw from our press release earlier, we reported another outstanding quarter, during which we outperformed on every metric as our business benefited from our customers' investments in their AI initiatives. The revenues, earnings, cash flow, and margins were all ahead of our guidance. Net retention was solid at 100%, and ARR grew 47% year over year. Solid market demand was backed by outstanding execution from our team. Our sales efforts in the field, our organizational discipline and controlling expenses, and our extensive and detail-oriented integration of share files were all key to delivering these great results. Revenues of $250 million were well above our previous guidance and were again strong across products and geographies. Earnings, which came in at $1.50 per share, were well above the high end of our guidance, and operating margin was 40% above our expectations and reflective of ongoing excellence in execution and cost control. We also continued adding to the strength of our balance sheet by paying down $40 million of debt and increasing our revolver capacity from $900 million to $1.5 billion, providing increased flexibility. We also repurchased $15 million of our shares in Q3 for a total of $65 million so far this year. And just last week, our board of directors further increased our repurchase authorization by $200 million to $242 million. As always, we will continue to be disciplined in deploying our capital towards delivering the best returns for our shareholders. As Anthony will describe in detail, annualized recurring revenue, or ARR, continues to grow consistently. Our Q3 results show the durability of our install base, the continued relevance and value of our products, and the strength of our customer relationships. We remain confident that the strength in demand for our products, as well as our ability to execute well, will continue through the rest of fiscal 2025 and well beyond, because our customer CI initiatives are driving demand for our products. They look to us as a trusted partner to deliver the benefits of AI with clear ROI for their business. And we expect this demand to continue as businesses are still in the very early stages of AI adoption. Let me provide some color and detail around the quarter, starting with our ShareFile business, which is turning out to be the best acquisition we've done so far and was certainly the most intricate to integrate. We met every integration challenge, passed all major milestones on or before schedule, and overcame every obstacle we've encountered. The net retention rate, or NRR, of the ShareFile business continues to improve as customers increase their adoption of AI capabilities we've delivered in ShareFile. Currently, for example, over 3,000 customers have started using the new AI document assistant with over a third of those users already up and running and using it regularly. And the AI-powered secure share recommender has identified and protected nearly 15,000 files that contain PII, or personally identifiable information. The use of these AI capabilities, along with our focused customer success and account management efforts, is helping to improve ShareFi's net retention rates and has led to better than expected ARR and top line growth in the business. On the operational front, the team we acquired is completely on board and has become an integral part of progress. All vital systems are now integrated within progress and in the process of being fully optimized with no major issues so far. The ShareFile engineering team continues to deliver new capabilities. ShareFile web infrastructure is fully migrated and the transition to product progress branding is complete. As we have previously discussed, we measure the operational performance of our products by tracking ARR. This is key because the revenue recognition of on-prem subscriptions is lumpy and does not accurately reflect the underlying strength of the business. In addition to a meaningful portion of our strong ARR performance, both year-over-year and quarter-over-quarter being due to share file, I want to highlight the strength of our other products, such as OpenEdge, MarkLogic, Sitefinity, WhatsApp Go, DevTools, and Moveit, all of which continue to exceed our expectations. Innovation is a foundational pillar of our total growth strategy, and it ensures that our products continue to deliver increasingly greater value to our customers, especially during times of rapid technology changes. Having successfully navigated multiple technology disruptions in the past, Progress' ability to rapidly evolve our products to meet the changing needs of the market is an integral part of our DNA. Over the past 12 months, we have delivered dozens of new AI capabilities across our products that are benefiting our customers and helping drive our success in the market. To that end, you may have seen a string of recent press releases showcasing the AI capabilities we have delivered within our products, some of which include the latest version of retrieval augmented generation or RAG-enabled MarkLogic called Progress MarkLogic 12, the availability of new product, Progress Agentech RAG, built on the technology we acquired last quarter with Nuclea, AI coding assistance in our developer tools that enable developers to use our products as part of their workflow driven from their AI code generator of choice, AI-powered insights and questions and answers from documents and share file that deliver new efficiencies to users in their document workflows, and the launch of GenAI capabilities within the OpenEdge platform to accelerate the development and modernization of OpenEdge applications. Our customers are extremely excited about the possibility of gaining valuable business insights from their existing data across Progress products using our GenAI-enabled technology. A couple of weeks ago, at our Progress Data Platform Summit in Washington, D.C., we brought together over 200 customers to share how advancements in agentic rag, semantic AI, and data integration can help organizations break down data silos and drive tangible business impact. At that event, the State of Mississippi Division of Medicaid, a new Progress customer, shared that when they needed a solution to meet federal compliance and internal business requirements for secure, responsible, and accelerated AI adoption, they chose Progress. They showcased their Progress operational data store initiative built on the Progress data platform to help the state's agency address these needs by integrating data from various different sources and harmonizing it to drive valid, verifiable responses to Gen AI queries. We launched new AI coding assistance in our DevTools products for Blazor and React in early third quarter, which we continue to extend and now being used by thousands of developers across the world. Delivering developer efficiency gains of over 30% while seamlessly integrating with coding tools such as Windsurf, Cloud Code, and GitHub Copilot, our products are leading the UI developer tools market with AI capabilities. Similarly, we announced today the OpenEdge MCP Connector for ABL, which brings the power of Gen AI coding tools, such as WinServe, Cursor, and VS Code, for the development, maintenance, and modernization of OpenEdge applications. The OpenEdge MCP Connector for ABL is purpose-built for our customers' workflows, enabling faster development, reduced risk, and smarter modernization strategy. and has been extremely well-received by the OpenEdge ISV partners and customers who are early testers of this product. And our Progress Agentech WAG offering, which was previously known as Nuclea, is delivering value to dozens of customers like SRS, which is a wholly owned subsidiary of Home Depot, by enabling them to unify their structured and unstructured data, power intelligent search and insights, and automation. By turning information into actionable intelligence, Progress Agent TechRack makes GenAI practical, verifiable, and reliable for customers of all sizes. We're also seeing the downstream benefits of the AI adoption wave as it drives demand for our infrastructure management products. For example, this quarter, a leading chip equipment manufacturer significantly expanded their relationship with us to meet the needs of managing the growing complexity of their own IT infrastructure. As IT environments continue to grow and scale, as well as increase in complexity due to the adoption of AI, we expect this trend to continue. I also want to touch upon the fact that our engineers across our products are using AI tools in their day-to-day tasks. This is accelerating the delivery of product capabilities without increasing our R&D expenses, which we continue to maintain at the 18% of revenue levels. As you know, M&A is another key pillar of our total growth strategy. And when it's done well, as we've consistently demonstrated, including most recently with Sharefile, it meaningfully drives our success. Our approach to M&A is highly selective and disciplined. So with that in mind, let me give a quick update on M&A before closing the discussion. Our corporate development efforts remain and we continue to evaluate a strong pipeline of deals. As I mentioned earlier, in the third quarter, we both aggressively paid down our outstanding debt to reduce capital constraints, and we refinanced and significantly expanded our revolver to give ourselves additional flexibility. We think the market for M&A is still a very favorable one for us, with many potential infrastructure software targets that would fit well in any of our three key areas, application and development platforms, digital experience, and infrastructure management. And we are encouraged by the potential to combine any potentially new acquisition with our expanded AI capabilities, in particular with the agentic rag technology we obtained with Nuclear. While valuations remain mixed across product, technology, and business types, and there's still some disparity between public and private markets, we intend to keep our focus in finding great companies with great technology and the potential for high margin synergies at a reasonable valuation. Finally, and as always, I want to thank all of our progress teams around the world for their dedication and hard work that led to our great results in Q3. I'm inspired every day by their commitment to excellence, and especially this quarter with the outcomes we have delivered across the board. With that, I'll turn it over to Anthony.

All right, thanks Yogesh.

Good afternoon everyone, and thanks for joining our call. As Yogesh mentioned, we're thrilled with our third quarter results and the underlying momentum in our business that allows us to raise our full year outlook yet again. With that, let's jump right into the numbers. I'll start with ARR, which is our key metric for assessing top line performance. We closed Q3 with ARR of $849 million, representing approximately 47% growth on a year-over-year basis and 3% pro forma growth on a year-over-year basis. To be clear, the 3% pro forma growth includes ShareFile in all periods, and the growth was driven by multiple products across our portfolio, including ShareFile, OpenEdge, DevTools, MarkLogic, What's Up Gold, Sitefinity, and Coricon. Quite a list. We also had another strong quarter of customer retention, with Q3 net retention rates coming in at 100%. In addition to solid ARR growth, Q3 revenue of $250 million meaningfully exceeded the high end of the guidance range we provided in June and represents approximately 40% year-over-year growth. Our strong revenue performance in the quarter was driven by stronger than expected demand for multiple products in our portfolio, most notably ShareFile and OpenEdge. Turning now to expenses, our total costs and operating expenses were $150 million for the quarter, an increase of $46 million compared to Q3 of last year. This year-over-year increase was largely driven by the addition of ShareFile to our business. Operating income for the quarter was $99 million, an increase of $25 million compared to the same quarter last year, and our operating margin was 40% in Q3 compared to 41% in the year-ago quarter. Earnings per share for Q3 were $1.50, which has also meaningfully exceeded the high end of the guidance range that we provided in June. Compared to the prior year quarter, earnings per share were up 24 cents, or 19%, with the increase being driven by the addition of share file to our business. Okay, now I'll transition to a few balance sheet and cash flow metrics. We ended the quarter with cash, cash equivalents, and short-term investments totaling $99 million and total debt of $1.4 billion, resulting in a net debt position of $1.3 billion. This represents net leverage of approximately 3.5 times using our trailing 12-month adjusted EBITDA. DSO for the quarter was 55 days, up two days compared to Q2. Deferred revenue was $381 million at the end of the third quarter, down slightly from the second quarter, reflecting normal seasonality in our business. Adjusted free cash flow was $74 million for the quarter, an increase of 17 million or 29% from the year-ago quarter. And unlevered free cash flow was $89 million for the quarter, an increase of $26 million or 40% from the year-ago quarter. In July, we announced an amendment to our revolving credit facility that increased our borrowing capacity from $900 million to $1.5 billion. It also lowered our borrowing costs and provides more flexibility to grow as we execute our total growth strategy. During the third quarter, we repaid $40 million against this revolving credit facility, bringing our total year-to-date debt repayment to $110 million. At the end of Q3, our revolving line of credit has a balance of $620 million, and we have available capacity of approximately $880 million. In addition, during the third quarter, we repurchased $15 million of progress stock, bringing our year-to-date total to $65 million. At the end of Q3, we had $42 million remaining under our share repurchase authorization. However, on September 23rd, our board of directors authorized an increase of $200 million to our share repurchase authorization, bringing the total amount available for repurchase to $242 million. When it comes to our capital allocation outlook, I'd like to reiterate the point Yogesh made in his remarks. that we will be disciplined and deploy capital to deliver the best returns for our shareholders. To be clear, our Q4 guidance contemplates $50 million in debt repayment and no share repurchases. This mix may change during the quarter, depending on several factors, including our share price, and we are prepared to reduce debt repayment and increase share repurchases if we believe doing so will generate the best return for our shareholders. Okay, now let's get into our outlook for the fourth quarter and full year 2025. For the fourth quarter of 2025, we expect revenue between $250 and $256 million, and earnings per share between $1.29 and $1.35. For the full year 2025, we expect revenue between $975 and $981 million, an increase from our prior guidance. We expect an operating margin for the year of 38% to 39%. We expect adjusted free cash flow between $232 and $242 million, and unlevered free cash flow of between $289 and $299 million, an increase from our prior guidance for both. Finally, we expect earnings per share between $5.50 and $5.56, again, an increase from our prior guidance. Our guidance for full-year EPS assumes a tax rate of approximately 20%, the repurchase of $65 million in progress shares, total debt repayment of $160 million, and approximately 44 million shares outstanding. I will reiterate, though, Our mix of debt repayment and share repurchases may change during Q4, depending on several factors, including our share price. In closing, we're excited to deliver another quarter of exceptional results, and we're very encouraged with the momentum across our business.

With that, let's open the call for questions.

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 11 on your telephone, then wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Fatima Ulaini with Citi. Your line is open.

Oh, good afternoon, everyone. Thanks so much for taking my question. Yogesh, I wanted to ask you at a very, very high level the AI strategy. So the mandate to me is very clear in that there is an aspiration to infuse AI, as well as agentic rag across the portfolio. And I think in your prepared remarks, you did talk to multiple streams of value creation and helping your customers drive ROI. But I was hoping you can talk to us and give us a flavor of how some of these initiatives from an AI investment perspective are going to manifest or show up in the external benchmarks that you share, and specifically around if there is going to be more torque on the net retention rate side, or if there is an opportunity to drive more pricing power, I'd love for you to flesh out some of the implications of an AI infusion strategy. Thank you. And I have a follow up for Anthony, please.

Thanks, Satima. And I think that's a really, you know, good question, right? Fundamentally, I think the first place it shows up in NRR, right, net retention rate, because As we've talked about before, if we don't innovate and if we don't bring our products along and if we don't make our customers successful in their journey towards whatever is new, in this case it happens to be AI, you know, they would decide to move to somebody else. And so we have actually seen that. I mentioned earlier that, you know, the combination of the AI capabilities as well as, of course, the team's effort to make sure that we improve our customer relationships are helping us with our share file net retention rate, which has picked up. So I think, to me, NRR is the first place we are going to see it. I think that, as you are also fully aware, we don't really put a lot of wood behind the new customer acquisition effort at Progress. That is part of our overall strategy, and so therefore, yes, we will probably see more new customers who do AI work with us, but I think it's too early to say whether that will be something that we will see in the near term. I think if we start seeing some momentum there, Fatima, we'll come back to you and share that with you. But again, to us, it is a combination of retaining customers and then, of course, finding additional customers. Expansion is the middle part, which is also key. And you mentioned pricing as a lever. One of the interesting things that we do in a variety of our products, especially the ones that sell to the smaller market segment, is that we have multiple editions of those products, and we often add these new capabilities to the higher-end editions of those products, which leads those customers to upgrade from the lower end to the higher end versions. And as they do, obviously, they pay more to us. So it's an indirect pricing opportunity. It isn't in a, hey, you know what, we're going to increase your price because it's here. It is, if you want to use this, here it is in the higher version edition version of the product. And of course, you pay more for it. So it's a combination of things. I think NRR is where it'll show up first, which is a combination of gross retention and expansions. And then over time, we're looking forward to sharing what happens on the new side.

Thank you, Yogesh. I appreciate that detail. Anthony, I wanted to ask you about the EBIT guidance for the year. So a nice outperformance this quarter, but you're only taking the midpoint of the full year range up by about 10 bps by my calculation. So I wanted to really unpack the source of the conservatism there, especially by your telling and us watching you blow past all of the share file integration milestones above and beyond kind of what you had committed to at the start of the year. So just kind of wanted to appreciate that. Also, that in the context of what Yogesh was mentioning was holding the line for R&D at 18% levels. Thank you.

Yeah, sure, Fatima. I think, you know, looking at the beats we had in Q3, at every point in the range, you know, low, mid, and high, I think we at least rolled everything through. And so I certainly don't view it as being conservative. I think the Q3 results on their own, I guess I would say, showed probably slightly better growth than we expected coming into the quarter and maybe some incremental momentum there. I think they showed slightly better margin than what we expected coming into the quarter and certainly much better earnings per share as a result. And our expectation certainly is is that we're going to be able to hold Q4 to where we were originally. Q4, I think generally speaking, is always kind of an exciting quarter for us. But our view was it was a strong quarter, and we felt very good about rolling through the entire beat that we had this quarter for our full year results. So I'm not sure if that completely answers the question, but that was the thought process behind the guide.

I guess it's a notional versus percentage impact. Okay, very clear. Thank you so much.

Thank you. Our next question comes from the line of John Diefuse with Guggenheim Securities. Your line is open.

Hey, guys. This is Lauren Spence going for John Diefuse. Thanks for taking our question. So it's great to share the headwear that you're making with the share file integration since it was your largest acquisition with an especially different financial profile. You touched on it in your prepared remarks, but is there anything in that business that has surprised you, either positive or negative, that wasn't really expected prior to the acquisition? Any additional color would be really helpful on that. Thank you.

You're welcome, Lawrence, and thank you for your kind words. You know, it is a, you know, with any acquisition, you always find something that you did not expect, right? being a carve-out out of another large entity, I think created some challenges. It created challenges in terms of figuring out how to move the systems over. That is like cutting over engines while you're flying aircraft. while keeping the plane flying. So I think those kind of challenges, we sort of expected them, but at the same time, the nuance of those is always a little more challenging when it actually does happen and we actually are trying to do it. But to me, the wonderful part was how well we were able to navigate that and how effectively we've been able to do the integration and so on. So that was on the challenge side. On the positive side, I would say there are a couple of them. I think the people culture has been really, really wonderful. The acquired teams are very engaged. They have done a great job. The folks that joined from ShareFile, they have just done such an amazing job of continuing to work on product and continuing to work on customers and helping the field be successful, and all the things that we need to do to run our business. So that has been a really, really great positive. And then the second, I think, is also we are discovering that the customers, you know, we knew this to some degree, but we didn't realize how much the customers love the product and how much really their businesses are just so reliant on those, right? They just, most businesses that use this product their workflows get completely intertwined into the document-centric workflows that they need to do because most of these customers are document-centric businesses, right? So that's the important part. So because they're document-centric businesses and their workflows around those documents become such an integral part of their day-to-day work, that share file becomes sort of second nature to their internal systems. And so I think those two things have been really positive for us. So I'm really delighted with the way things have turned out, and we hope to continue the momentum.

Got it. Thank you. That's actually really helpful. Thanks, guys.

Thanks, Laurence. Please stand by for our next question. Our next question comes from the line of Yitai Khidram with Oppenheimer and Company. Your line is open.

Hi. This is Nolan Genovine on for Yitai. Thanks for taking my question. I actually want to follow up a little bit on Fatima's first question about, you know, you guys are clearly using GenAI across the portfolio. You've infused existing products with new capabilities. You also explicitly mentioned the new agentic rag product built on top of Nuclea. Can you put maybe a finer point on how you're monetizing that specific product? Does this represent sort of an incremental cross-sell opportunity I understand it's probably very, very small today. Just trying to get my sort of hands around, you know, finer points of how you're monetizing this. Thank you.

Absolutely. Yeah. So I think you're right. I think to us, the initial opportunity is primarily around integrating it with our existing other products and therefore creating cross-sell opportunities for ourselves. We are going out and also trying to sell new to brand new customers who are not our customers for any of our products. But I think the bigger opportunity for progress is to bring this to market and bring this to bear as a cross-sell opportunity to our existing customers. And I think to that end, right, you know, we are aggressively integrating the product across our portfolio as we speak.

Understood. Thank you. And then a quick follow-up. You had a nice pop in gross margins this quarter sequentially, you know, despite SAS growing as a portion of revenue mix. Can you maybe talk about just the puts and takes on gross margin in the quarter? Thank you.

Yeah, so gross margin, I mean, we are, again, if you look at it, right, so our gross margin is a blend between the SAS business gross margin, the share file gross margin, which is, as you know, was, you know, just a hair above 80. you know, than the low 80s in our business, which was in the high 80s, right? So as the, you know, those things blend in the weighted average, thank you for the kind comment. But, you know, we are continuing to see, I think, ways of even running our own existing SaaS products a bit better. So I think those are, you know, little tweaks here and there, but I appreciate the positive commentary on the gross margin. Thank you. Thank you so much.

Thank you. As a reminder, ladies and gentlemen, let's start 1-1 to ask the question. Please stand by for our next question. Our next question comes from the line of Lucky Schreiner with DA Davidson. Your line is open.

Great. Thanks for taking my question. It was good to hear about the updated M&A environment. I guess I just wanted to ask a follow-up on that and And here, if you felt like there were any of your three categories that really stand out as looking more attractive today, especially as AI starts to impact these markets. And a second question would be, after acquiring ShareFile, anything to call out between your SaaS opportunities for M&A and your propensity to acquire a SaaS company in the future? Thanks.

Absolutely, Lucky. You know, on the first one, I think really what is happening with AI is that all three of our businesses are becoming the right companies and the right products in all three areas are becoming really interesting, even more interesting than they were before. Think about it, right? The one area which is around data platforms, obviously, you know, for businesses and organizations, that are trying to make sure that their Gen AI efforts are based on true business data so that they can get verifiable, relevant, reliable answers from Gen AI queries. It requires them to bring that data into that game. And to us, therefore, data platform businesses continue to be a very interesting place. Similarly, when it comes to digital experiences, there you think of the end user experience is completely dramatically changing. We have a very interesting vision of the no-do visits to, for example, a website will be the same ever again. And the web experience will be completely dynamically created by Gen AI. But that requires, again, a set of technologies and back end platforms around that, that can manage content that can manage the, you know, marketing platform that can manage the web delivery and so on. Similarly, you know, in the digital experience space, the workflow, I mean, you know, share file is such a wonderful product in that portfolio, and workflow automation and leveraging AI for content within a share file, as well as, you know, leveraging content for any sorry, leveraging AI for any content-centric application is going to be very interesting. So I believe that the digital experience aspect, whose foundation lies on content, right, I think is going to be a very interesting space with the right type of companies. And last but not least, I mean, you know, I mentioned in my prepared remarks, right, this Gen AI thing, one of the big things, or AI in general, not just Gen AI, is driving significant investments in IT across the board. And so with increasing IT comes increasing IT infrastructures, comes increasing complexity of environments, comes the challenge of managing, securing, running it reliably. So if you can have the right type of products who can do that without requiring greater resources, and they themselves leverage AI to automate that work, that is a very, very powerful set of offerings. So I think really lucky across all three categories, we are active, we are interested, and we continue to look. The second part of the question was SaaS. And, you know, as we even said when we acquired ShareFile, right, we found a SaaS asset which has 80% gross margins and, you know, now slightly higher. That is a remarkable thing for a SaaS business that is a modest size to have. And it allows us, therefore, to have the kind of operating margins that we deliver. And so we have learned quite a bit about SaaS. We have a very strong cloud operations team that came over from ShareFile that now runs all of the SaaS product operations for progress. And I think we are very much looking at you know, SaaS as well as non-SaaS companies when it comes to acquiring them. So I don't, it used to be we were hesitant about SaaS, but I think that hesitancy has significantly reduced. Obviously, we need to make sure that there isn't something so flawed in their business that their gross margins can't get to where we need to get. But beyond that, I think we now find ourselves hunting for not just, you know, traditional on-prem software companies, but SaaS companies as well.

Very helpful.

Thank you for taking my question. You're welcome, Lucky. And that really expands our market opportunities quite, quite significantly.

Make sense?

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to you, Gash, for closing remarks.

Well, thank you everyone again for joining our call today. I'm really excited about our performance in the third quarter and pleased to share our confidence in the outlook for the rest of fiscal 2025. And we look forward to talking to you again soon. And thank you very much and have a wonderful evening. Bye-bye.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now