This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk_0: lady and gentleman big pretending but i welcome to the van systems inc fourth quarter two thousand and twenty one earnings conference call at this time all participants are listen only mode after the speakers visitation there will be a question and answer session to ask a question during the session you'll need to press dar one on your telephone as reminder to this program may be recorded and now i'd like to introduce your house with a program that for go with barrett investor relations please there
spk_1: and you operator up in thank you for joining a conference call today i'm here with then bonner then ceo the robinson parents vehicle in l non guaranteed cook development officer before getting started of like mention that accompanying are call today the web site if you like to be these guys in real time during the call please visit the i section of the website and aren't i can put on the industrialized instead click on the book as mine can select a conference call i'd also to draw your attention to the fact that certain matters discussed in this call may contain for looking statements within the meaning of the private securities litigation reform act make any five and other provisions of the federal securities laws he's for looking statements are based on management current expectations and are not guarantee the future performance actual results could differ materially from those express them or implied by before looking statements the for looking statements are made as of the data this call if you can't accept as required by law denison's no obligation to update or revise them investors a caution not the place undue reliance on his for that and statements for more detailed discussion of how these and other risks and uncertainties could cause burns actual results to differ materially from those indicated nice for that and statements please the or form thank you thank you for the fiscal year and the january thirty first twenty twenty one one file and other filings we make with the fcc the financial measures disgusted i include non get measures as we believe investors folks on those measures you comparing results between periods and among care companies preceded is what excites earnings release an investor religion section of the website of bank account for reconciliation and non get financial matters to get measures now get financial information should not be considered an isolation from as a substitute for or superior to get financial information that is included because management believes to provide meaningful a southern mental formation regarding are operating results when assessing our business and it useful to investors for informational and repair the purposes and i'll get from measures company uses have limitations and may differ from those used by other companies now and i could turn the call her to them and
spk_2: as you met
spk_3: i'm pleased to report a strong fourth quarter for both cutler engagement and cyber intelligence with revenue and longer a coming game had apart dictation casual operation was also strong it two hundred and fifty forming a dog for a year and quitting seven percent compared to the prior year on february first we completed the spain or other intelligence business and now a play got my different company today was just got a long term growth strategy for the new variant is where the facing a widening engagement capacity gap right is well positioned with a differentiated cloud platform and ecstatic resources including approximately forty three hundred professionals worldwide focused on helping grants provide boundless customer engagement
spk_4: looking at the current air
spk_3: we expect wrong crowd momentum consistent with that federation we experienced in the second half of last year
spk_5: and we're raising guidance for cloud revenue growth which we will discuss later
spk_6: i would like to start a call
spk_3: very viewing the fourth quarter results for customer engagement
spk_7: we had strong finish to the air
spk_3: and are very loosely successfully executing carbonite spin and accelerating a cloud storage revenue cure for come in at more than two hundred and twenty five in a dog and of expectation and key cloud metrics accelerated looking thank you for we also very strong and we exited the year with the record backlog behind a to rookie either strategy to target a larger sixty five didn't all time and alphabet differentiation we continue to a new card customers and display of dirt you to are open cloud platform innovation here are three examples of large cloud deals from the quarter
spk_5: a sudden in a dark cloud order from eluding global food delivery service company
spk_3: this way and was driven by open and agnostic park and approach and our dirty to scale in the cloud guess is a new customer for variant and a combat it when and eight million dollar cloud order for one of the largest insurance companies either you at this competitors placements was due to the strength of our open cloud platform and thirteen and all got order from an existing financial services customer this large when a driven by the customers decision to transition for sat and expand relationship we have a look at large order reflect our defense your technology and the execution of a cloud first strategy wherever played with that you for cloud performance across all key cloud metrics
spk_5: god looking for up significantly
spk_3: coupon you stop a tv increased thirty nine percent year over year and you appear me bookings or perpetual light of equivalence increased fifteen percent year over year with a half of our a book is coming from fat q for cloud revenue or more than thirty percent year over year going strong growth in a chocolate bar quarters
spk_2: and we exited the air with their remaining performance obligations akio of six hundred and thirty six million dollars representing backlog golf or twenty nine percent year over year
spk_7: a significant increase of year and backlog
spk_3: he been given by cloud and provide that good visibility for the current year overall were very close with a don't finish the year
spk_5: and a significant momentum we have
spk_3: going into fifth got twenty two we estimate a customer engagement time at sixty five billion dollars with the recent trend of accelerating cloud transition and digital transformation that my goodness method become a top priority for many brands in preparation for the spin we work during queue for with the third party for thirty more than two thousand business leaders for poor country and a quarter an industry about government gives with priorities trends pandemic impacts and future plans the finding the fifth research validate a got the market budget the for key findings include birth there's a widening engagement capacity get you work for dynamic ever expanding customer engagement channel and exponentially more costly directions oh must be managed with limited budget and resources second biggest leaders are concerned with rapid changes ninety four percent report being worried about understanding and acting are rapidly changing couple behaviors
spk_8: third
spk_3: business leaders have high hopes for a i but they want to see results seventy eight percent of laid a i investments but only eighteen percent they help them manage rising interaction volume and finally data and departmental finals hopper the effectiveness of analytics efforts companies need a unified approach and view of data in order to realize the potential of a i analytics that it has got a very good luck a strategy addresses the finding of this recent research i'll up into a platform helped went to provide the cutting a man in the kind of center as well as across the enterprise that use cases are and to point like going well beyond a kind of thin air to back office branches digital marketing and compliance divine thought that was designed to connect kind of fun or to other parts of the renovation involving catherine game and activity a trend that has become increasingly important with acceleration of digital transformation
spk_9: former technology perspective
spk_3: the platinum design with a naked cloud architecture supporting clouds was open access to data making it easier for customers and partners to quickly integrate with their environment learn the vinci a i an analytic you can defend the platform as far as article application with the later machine learning model and advanced analytics we believe that our commitment to open access and are a p i thought that you differentiate our platform
spk_5: and will drive further growth
spk_3: and queue for we don't develop innovative solution
spk_10: including and new data management solution
spk_3: to have went to the unified approach to aggregating introduction data o'clock titles and unlocking the value in their data
spk_5: the highly innovative cloud pollution helps break down data files
spk_3: and manage on the valuable data a course unified communications pick up an enterprise collaboration solutions
spk_10: and you work for scheduling solution
spk_3: to help with optimize the customer engagement workforce
spk_2: across the kind of center back office and the branch
spk_3: and the new real time going to say solution to help when provider agents would in the moment guidance to increase increase efficiency and elevate customer experience
spk_2: this innovative solution is based on the state of the art linguistic and acoustic model and if especially effective for the agents working at home
spk_3: we regarding partner
spk_6: we have a lot further ecosystem
spk_3: that we have developed over many years there's never been at that time to partner with varying without focus on delivering a world class poker friendly experience in addition for supporting a listing partner this year we launched a new partner program with a focus on system integrator we believe that digital transformation is providing system integrator new opportunity do have plans with the customer engagement initial plans with their customer engagement initiative across the open cloud platform who that well suited for system integrator focused on data management work for proficiency and customer experience coming to our outlook for the current year we expect another year of throng club go with ten percent you booking go on a daily basis basis given the cloud momentum experience as a second half of last year we are raising our outlook for cloud revenue growth to arrange a thirty percent to thirty five percent for the current year a guidance reflect the continued market you too fat this year which that the percentage of new soccer booking that council fat to oppose sixty percent reflecting a steady increase over the last three years we also expect on a non gaap papers to protect is a proper avenue for we can't forces to approach eighty five percent up from eighty one percent last year and seventy one percent three years ago
spk_5: now before turn it off a dad i would like to briefly discuss cyber intelligence
spk_11: cog night
spk_3: oh cyber intelligence business you now listed on that that under the kicker fiji empty what cyber intelligence is no longer part of their and it's result for last year or including it okay okay and i would like to provide a brief review cyber intelligence author had a strong finished the year with revenue coming in at one hundred and twenty four million dollars
spk_12: an estimated when we allocate adjusted ebitda
spk_3: coming at for a twenty four million dollars book you for common i will publish very go on phone twentieth at it at a later time and they announced today that they will review the fourth quarter results on a campus go in the second half of april it's not of in carbonite personally there's gotta be slightly different than don't we published you to the applications are bearing a location methodology night even a very exciting market and we wish them good luck as an independent public company
spk_13: now let me turn the colbert that
spk_14: yeah thanks and good afternoon everyone or discussion today will include non gaap financial measures a reconciliation between gap and non gap financial measures is available as not mentioned in earnings really and in the i r section of our website differences between gap in non get financial measures include adjustments related acquisitions including fair value revenue adjustments relation of acquisition related tangibles certain other acquisition related expenses stock based compensation separation related expenses as well as certain other items that very significantly in a mountain frequency for certain metrics it also includes adjustments related to points change way as mentioned we finish your strong with results came in ahead of our expectations prevent overall including cyber intelligence non gaap revenue came in at one point two nine billion adjusted ebitda came in at three hundred and thirty eight million and dps in very strongly three dollars and sixty cents on and on that basis are operating cash flow for the quarter was also strong and for the full year was two hundred and fifty four million for customer engagement non gap revenue came in at eight hundred and forty one million and estimated fully allocated adjusted ebitda came in at two hundred and forty nine million and again highlighted her cloud metrics were strong across the board this is or dashboard that can be found in ireland site it contains keep your eyes for customer engagement including revenue bookings bookings mic and profit metrics i'd like to highlight the following cogni will be putting revenue into components recurring revenue and nonrecurring whether you vs are historical presentation of product and service which became obsolete with a move to the cloud or dashboard know if accept breakdown given our club for strategy we expect recurring revenue become a larger portion of are total the you have time turning to our outlook for fiscal twenty two as we shift to the cloud we believe new a lead wrote disease or metric as it normalizes or bookings growth for perpetually in south for fiscal twenty two weeks back ten percent you peel he growth with the percentage of new bookings coming from south approaching sixty percent with that a double digit new earnings you bookings growth will translate to low single digit revenue growth and fiscal twenty two with higher revenue growth in the following years underlying outlook is an expectation for strong cloud growth and again mentioned earlier we are raising our outlook for cloud revenue go to a range of thirty to thirty five percent we also expect and fiscal twenty two nearly eighty five percent of our software will come from recurring sources as we discussed in the path will have a one time step down and adjusted ebitda due primarily to separation to synergies and we expect tutoring twenty five million of adjusted ebitda for fiscal twenty two driving two dollars and twenty cents of non gap pps at the midpoint rps outlook assumes around nineteen million of interest expense approximate ten percent tax rate and seventy three million fully do that cheers outstanding this excludes the second tranche of the a texan that which we expect to close into one and in here by the actually do this year let me also discuss our the are progressing we expect to start the you're strong more than ten percent year over year appeal he growth and que one with respect to total revenue we expect nearly two hundred million a refugee one with more than thirty percent cloud revenue growth from expense perspective give our strong que for and in anticipation of doubled the new pioli growth and fiscal twenty two we increased are hiring key for in a first quarter expense one rate will be higher than que for and will increase sequentially throughout the year and i'd like you with you or fiscal twenty two cloud revenue growth in more detail a cloud revenue has steadily been increasing and with thick three hundred and eighty million a cloud revenue at the midpoint of our guidance there are two sources of a cloud of new growth do deployments and support conversions we expect around half of our cloud revenue growth to come from new bookings and have to come from support conversion this mix reflects strong momentum for a cloud solutions including the success of transitioning or existing base to the cloud when did last year with the three hundred million base of support revenue and we expect your support revenue to migrate the cloud over time finally elect with your account for such are falling the cognates fan we have a very strong balance sheet with two point five billion about it approximately six hundred and sixty million of cash expect to get another two hundred million cash from the attack investment in april we now have a current net debt to to be better leverage ratio of less than one times going forward rx of cash will primarily be used to support our growth in addition i'm pleased to announce who were putting in place a new annual stock repurchased program in which will use part of our strong cash will generation to buy duck stock we plan to buy back up to the number shares to be issued under annual incentive equity program
spk_15: so in summary we had a strong you for including double digit new bookings growth and record backlog we enter fiscal twenty two was strong momentum driven by are differentiated cloud platform and our focus has a pure play customer engagement company so that operator little bit the line for questions
spk_0: certainly ladies and gentlemen if you have a question at this time please fry star than one on your touchstone telephone if your question has been answered and he like remove yourself from the queue please press the pound key our first question comes from the line of daniel i've swung wedbush your question please
spk_1: yeah thanks to the morgue good quarter
spk_16: so to did you meet your talk about on the cloud deals on the are the size of the deals overall story a large i'm who are big deals in the quarter news talk about that them from the dynamic pipeline perspective
spk_17: yeah i'm
spk_3: so i think one area look at his they increase in backlog into for
spk_18: that you could say they'd rp oh leveling three twenty and twenty nine percent you have year
spk_17: and is stephanie reflects more clout the of and and and more large got the of that could keep it very little to the current quarter but but obviously agreed that look for
spk_3: a multiyear so we we we've always been very strong with enterprise customers and and that large feels that with the recent introduction the cloud platform where we put a lot of different applications on the platform discussion can consume is the cloud services it is that get it easier for customers and partners to consume off the platform which would compete with the to a big deal
spk_17: ah but what's what's the autocue the way we position the platform
spk_19: wouldn't get by a france multiple applications in a in a big deal or they buy all the time
spk_3: the effect of different to us
spk_20: that this is basically just the
spk_17: during on cloud services and in the platform so we we we have a couple of that the different behaviors something to
spk_21: concentrate their own
spk_17: a purchases into larger opportunities and some
spk_3: would do it over time in terms of day of the times we is pretty steady i bridge
spk_16: the cloud daily is about that without year sir
spk_1: no i'm not normally to change their but definitely more cloud the deal more like deals other big change in our in a backlog
spk_16: great and then just dumb your for you and is a dog
spk_17: your analysis would successfully happening with cognates news talk about to degree and the op's is a year and a half the making but how things are different in internally the just now more sales and marketing all focused on one area
spk_22: yeah even from a customer feedback perspective can use talk about that know anecdotally
spk_3: show happy to our so we actually a lot of changes and we are you know many people charlie we refer a self as the new variants we became a few play customer engagement company had the right time
spk_23: what o'clock position and the desert affirmations are presenting enormous growth opportunities
spk_3: so there's a lot about internally and and there's a growing by also externally as we tell the story more and more of a time definitely post painful and board and management team perspective we one hundred percent focused on the single mission and that if accelerated growth it position very into the category leader ah and we've already lined up compensation plans was after digital objective for balances perspective doesn't mention a strong banshees don't cast low generation so we would be like we have the banshee that can support any investment we want to make in going to be this we talked about launching a new partner fashion program
spk_24: ah we are being that when i see the market is a a the party friendly company and we believe parties are becoming more important we the changes we've seen the industry for definitely focus for us
spk_20: ah we also filtering the pace of the innovation and up that platform
spk_3: and we plan to review
spk_25: many new and of our your you a lot of new innovations in our upcoming
spk_3: patricof engage conference that is is it would be announced shortly and then internally i think it for i to think that our employees clearly understand opportunity that we have ahead of us
spk_26: we had a fantastic you for with france across all kicks out metrics
spk_0: and we expect to start the year are very strong and you one
spk_1: great thing
spk_27: the you are next question comes in the line of ryan mcdonagh for me to my company your question please hi good afternoon thanks for taking my questions you at the animals to your highlighted to pretty healthy conversion bookings that we're trending strongly obviously it seems like you're pretty optimistic with the increase guide for clog revenue growth he just talk a bit about the mixer of bookings activity twins the conversions vs net new customers and that's how that's been
spk_28: reflected in there he ah
spk_29: higher outlook for fiscal twenty two
spk_30: yeah so today the club where the girl
spk_3: i'm thirty two thirty five five percent natalie one hundred million dollars of growth and club revenue that we expect this year
spk_31: no of a fifty defend that mention out will come from our conversion program always been at definitely
spk_3: it has kicked off in in in in the second half of last year
spk_32: so we feel more conversions than done before
spk_3: and and and fifty percent of that drug drug you got will come from actually from from your cloud deal
spk_33: and this is just very healthy mix
spk_17: that would be between between the two trends
spk_33: also point to mention that
spk_3: in a week we estimate that the transition
spk_34: from a couple of days to the cloud of would be over time so currently we have about three hundred million dollars of support
spk_3: revenue and wheatley with actually knowing that the day that we expect this to be half of their to be converted by fiscal twenty four so we definitely a if the in that that pick up in the kids rink you for last year that we expect to continue in the current year and done
spk_17: lot of the club de clawed the growth winter is coming from
spk_5: the conversion order new deal is already reflected in
spk_17: i'm in the akio so well we create akio by hundred and fifty million dollars you have year
spk_1: and and the law that it is obviously mafia cloud deal that will contribute to have a new in the current year so it's pretty good visibility into how we going to achieve their thirty blocks to santa clara revenue growth
spk_3: very helpful on when you think about the mix of a new bookings pipeline and there and new opportunities new customers and he talk about the mix you're seeing between contact center versus opportunities outside the context center and and perhaps touch on the you know how the veyron platform is resonate adding the messaging around that is resonating outside of that that core contacts and her base from that perspective thanks he added point oh sod platform basically help our customers to connect the kind of center with other parts of the renovations so it's not that we need to sell to other parts of the organization we have helped him to connect which is a trend that would definitely see
spk_22: largest in our area but also in day a comic getting fucked up here we see more customers asking for you cause and see carson and feedback all to be connected through a single event or ah in obviously we're very well positioned to help connect enterprise for any given a lock example of how we connect with a platform
spk_17: so we we got a request from customers that have branches for example decks that have gone for further and branches and that getting employees for their parents are just getting employee for their branches but it's this scheduling because they delicacy difference
spk_3: focusing on the for need it in there in the cavaday a year where the guy lot of people working from home
spk_22: even people in the branch as
spk_3: lot of downtime and there was a pick up in interest in in in having very helped him schedule people in the kind of center in a back off with any that interbranch branch so they can i have the flexibility of the with the workforce ah to to to the next birthday diplomatic ties and and based on that resource availability for that connection
spk_22: and another example is that the majorities in in the digital world which we are all going into digital transformation
spk_20: lol picked a lot of the consumer actually start the journey on the website
spk_17: and when they can't accomplish what they are trying to copy on the website they will call the comics center
spk_3: but got is his ability to the customer journey
spk_17: after sixty so they can continue the journey
spk_22: and and in an intimate efficient way
spk_35: as you know most controversial a solutions that no visibility into website and then platform it is able to provide them the journey in the website the reasons why customers left the website identify with couple of call into the into the kind of center and dimension we were just on your website and
spk_36: could accomplish something for will unlike that data and make the connection between their journey into work that and the journey into canada
spk_37: so i think to both who they could explain it one not trying to sell to other couple buyers by we're trying to help the birth connect so they can optimize the customer june
spk_0: optimize their the resources at
spk_38: to achieve better my journey
spk_39: very helpful thanks for the color or hop back and here
spk_38: thank you are next question comes from the line of brian essex from goldman sachs your question please
spk_3: hi good afternoon think if you're going to question nice nice result want to talk a little bit about you know the the margin great performance than a quarter
spk_17: in a stronger than expected either da margin and and i can we have a step down this year he can you talk a little bit about you know what you might anticipate in terms of recovery after that stuff down and when it might johan i take to get to or return to like you know that kind of point nine percent opry my art work either da and level
spk_3: a sure we we had the i'm thirty percent ebitda margin last year
spk_40: they had a park spectator forgotten engagement
spk_14: that can actually take you through the steps we are we're taking too april marginal the time and and the bridge that yes we do hey by yes as dimension we had a really strong performance que for and then for the year we ended up with the you know about thirty percent even margins on it was a a stranger for for all of us right foot though we did a lot of your cost restrain as we kind of went through feeling up period
spk_41: i'm and in towards the end of year starting to get get back to things
spk_42: so that kind of with a tough compare in terms of kind of normal cost reduction last year
spk_14: and job hire you know even a margins and then the synergy the here you know that a full fiscal year will be both thin so kind of and more normalized margins poly around twenty eight percent to thirty i think that was just gonna win
spk_38: cause reduction and and then with the synergies of kind of the burden of know part of the company taking on the phone company corporate infrastructure you know that stuff is down to parliament twenty six that the you see in our garden you know
spk_22: then after that we do expect as we scaled the business growth of the next couple years will have got a more typical margin expansion off of that
spk_3: okay that helpful in an intermediate like a circle back on conversions again
spk_43: could you help us understand you know that that install base of
spk_3: have you know maybe that the that you have in and how that might convert the cloud is is that under one for one basis and if we see an acceleration does that mean you know you get you party leader it i guess what what what is the longer term mexicans after this year that you might anticipate would come from conversion vs new this is i guess is what i'm getting at
spk_22: it yeah so we we definitely
spk_3: it'll expected dna which you say the best way to measure the booking growth to be so did new book go faggots it's a better life with a group equivalent and that that is expected to be double digit and we are no get got for double digit this year and targeting double digits for the next the next two years and the and you'll forget gave the mix was in the pay me so we're choosing to for i'm half of that the they came from perpetual and have came from club and we also guided that this year we expect sixty percent of the daily to from
spk_22: the south foot so definitely as we encourage customers to move their support to and converted to cloud also anything they knew they they buy new
spk_3: more likely to gonna buy in in class right because they already are on their journey to move perpetual to cloud and you see that very well in our journey and how we moved the mix of of the barely over the last two years to to of what we expect a sixty percent of poaching fifty percent in current year so so i'm a double digit to pluck your question our double digit blog revenue growth and new deals is definitely a offer moral and you know for this year we see he could get it with when conversion and new deal in a club revenue growth and you know converted could accelerate that that that's something we also so you in college
spk_22: there was very the conversion into in the first top of the year
spk_3: and then a big pick up in a second half more than we saw in in in his entire year before
spk_38: though that there is no change industry customer are adopting cloud always need a very large customers are floor the mid market is is moving back there
spk_3: the hard to get day the that the pay for conversion but the but we believe that them the de gaulle that to convert to fifty percent of that support in three years is is a very reasonable goals based on what we see now
spk_22: okay that that's helpful i guess if i were to ask another wage and the you'd get to your assumptions i think of the analysts day
spk_44: we talked about media a longer term thirty percent cloud growth rate in within that assumption or are you kind of assuming that you're your mix between conversions and new stays consistent
spk_3: well up a cloud revenue growth through also more than fifty percent without conversion last year
spk_10: so based on their historical conversion sorry for can't really go for new deal
spk_21: and the up and we already have that give us a deadly think you for that will become cooker confusing to revenue
spk_45: in the current here a week we see this year of know
spk_0: hop of that
spk_46: revenue growth will come from from new deal that that that the is a reasonable assumption conversion can pick up but if conversion pick up it's it's it's not going to affect they did that the growth of that castle new the of as well
spk_47: so that that think about it that you know should actually contribute to a higher
spk_48: growth rates overtime
spk_14: okay thank you
spk_49: the you are next question comes from the line of paul cost from jp morgan your question please
spk_3: a couple quick questions dodgy to to the cloud revenue will so technically accelerates and twenty three and screw twenty three keys to pursue the mechanism that causes that to happen doesn't get tickets yeah untitled a damn yeah yeah you wanted to think of it which is kind of them will just talking about in terms of the and not a couple of right look for the question is paul the mechanism that causes their revenue growth to improve the for twenty three twenty four and and that's basically the result of perpetual decline
spk_2: starting to diminish we a perpetual business
spk_3: when down from one eighty to one forty last year millions off so it was a big decline perpetual
spk_17: ah we expect the declined to be about ten percent this year so it's
spk_13: it's a much more moderate decline and then we expect they
spk_3: basically the professor declined to
spk_46: stop at the at eight hundred million dollar plus as sell for customers will continue to but that your and with it's got some of the very large customers then whatever way they prefer a lot at a club over the girls anesthetic be a the growth of our double digit with left decline less
spk_50: headwind phone day pets will decline
spk_46: it basically the mix changed that causes the revenue growth to go up and also that ended up to go up because ah old expenses lit we have now to bring that backlog and sign up the deal but the idea of we don't have to the expanse in order to get the revenue in in in the in the next year period so we we we talking get the day we get three a model we talked about are we
spk_51: the say that makes us moving our group revenue go for it to be up and eventually should be similar to our be illegal for it
spk_17: the camps are kind of got you to repackage fire on says that those helpful
spk_3: and then the am it gets the the other question is the the capital allocation sense the unexciting it you know so yummy got absolute boatload of cash well on mean your your but your balance sheet presents you the opportunity to up
spk_46: do something but and said it sounds like you're investing in the cells which is fine except that
spk_52: if you're like can do more than i used to simply keeping your balance see
spk_14: in solid site so you can do something transformational or or or is this it is it or you just gonna be a very kind of conservative views of the bouncy mean by that says just cover the cost of dilution from sarah is not going to get folks were excited so what why should we be such that the capital allocations as to find him yeah nah no i feel like right i agree we we we wanted to come out of this ah spain with a strong balance sheet but you can buy back ah we have a near try restrictions on the spain
spk_53: ah so he can buy that more shares then the new shows week wrong because we just get addicted and and you can either get a tax free spain and and go by the chairs
spk_3: so that that that restriction is gonna be for supply but not not forever and the and and then we'll have more flexibility in terms of ah don't buy that the but at this point we're limited to to the sure that we issue and we intend to buy that for that diversion mccain culture and then my was the duration for them done and how are you know it's it's it as many other circumstances it's not a you know our a hard fact that he could be a couple years and can and are you you are you arguing
spk_17: it has more with attack three and regulations
spk_54: and the fact that we've been it you know out done that at night division tax free there's no
spk_3: dax lot of redditors from then going and and a recap like analysis that i that i go go go chatting i inserted than any other you can talk about the investing in the business vs acquisition so hard my question yeah so i i think that town
spk_46: we always looking for acquisition of that make sense but they the three or target
spk_55: wheatley we laid out in debt for day our our organic
spk_0: ah we definitely think we have a stronger platform today
spk_56: so ah when i was looking to upload any any specific or be get that we need to to close but ah
spk_57: in a will will will definitely make ah
spk_58: for decisions what we want to do with our with our balance sheet but we're really happy that we leave you know in in in a expect a box that second thoughts
spk_3: and at that point ah will be name will have more more cash than death and that that give us a lot of flexibility
spk_59: take us and thank you so much
spk_3: and shovel
spk_47: the you our next question comes in line up some on somalia from jeffries your question please
spk_60: hi good afternoon and yeah thanks for taking like i said get that that next with you guys again that maybe first one gan for for you and you think about ah be dead and very sad to me that you get seen in your baking and prayer for two thousand and are for fiscal twenty jail is there
spk_3: any and particular i can sit and characteristics of the customers that are converting early whether it's defined by size or and market or maybe what they're using for their core easy digits any characteristics that we can triangulate upon
spk_22: ah
spk_3: i think the journey it quite in the video in a chair it it's it's really you know where they fit in there it's decision to move to the cloud generally and then sometimes you know idea actually drive this ship to the cloud because they want to focus on something else and i want to move out there their responsibilities to us and and and sometimes i idea actually that the obstacle because they they want to continue to manage
spk_56: did did did the infrastructure and i don't think that there a joke are terrific other then in a very large customers probably are just moving slowly
spk_3: for perhaps because of security reasons
spk_22: i'm not got was actually a buying a building so a building
spk_3: architecture our internal clouds and down and we are in discussions that their hosts themselves their definition and get in their entire class so long we we are we have are stronger than me too high end of the market and and we see a lotta customers that you know what to work with that on how to optimize their individual journey to the cloud gray and and maybe a follow up on when i think about the that the new deployments contribution kit the crowd growth in that and fiscal twenty gail i'm actually think that maybe the contribution of new deployments from direct deals that that very selling yours is an partners such as like a a buyers and that by nines in the world is there like a change and of within those two buckets when you think about the guidance increase we we definitely are investing in danger
spk_61: a a other friendly company so of wheat we we don't really care whether we get the order on our paper on a pocket paper
spk_56: we tried to work with partner wait make sense to customers
spk_0: and the way they want to transact
spk_1: and the
spk_62: in many cases when we work with partners are direct so force is involved in actually
spk_3: the selling the product because we have next to the and expertise in and and partner needs to helpful variant and we compensate us air force accordingly so
spk_18: they with that on i have it on our expansion and growth and and whether we do it
spk_61: on our paper want to a paper
spk_32: much less important to us
spk_3: understand our our line is a time but congrats on that i'm complaining that and successfully and gash on his trunk regret that you again
spk_1: but you are next question comes from line of dan books from rbc capital markets your question please hey thanks for taking my question nice to see the conversion the base and commentary around it
spk_3: talked about the decline of perpetual and cuny you're in response to paul but what are the thoughts around a perpetual tail would assume some customers will remain and premise was that that hundred million dollar mark and talk to her kind of the fiscal your twenty three number that the good proxy for it yeah i think if they could be out in a bit more than one hundred at this point ah but we definitely the apply this year ah which is back into our our our guidance and we see this level golf sometimes next year so that that's a good now i think that over time perhaps in a very kind of longer than we have the right then i think that's a very large customers will also convert for advil converting to the only job clouds but it's speaker the whole industry is going to to cloud but but but that that sort of cutler definitely this point told us the not interested great you'd mentioned increased innovations with the cloud platform and talk to you know the addition of engagement data management work for scheduling real time agencies are we think about those products ramping are you seeing initial interest here has you expect the pace of innovation against more generally with with the soul focus on customer engagement and the club platform know ah we we are gonna wearing a bidding and will continue to innovate factor in in a cloud platform it is the nature of that cloudy and our control over the cloud environment that allow us to release more innovation fact there
spk_63: then then when you work with a very large on on grass environment and yet invest a lot of the technology stack to be compatible with defense
spk_22: data centers that governments have so that one benefit of the or of of the cloud platform a is just a be able to focus more on innovation and bringing new capabilities of the market
spk_64: i think that you know that a backup for the platform is we concentrated are ai and on a linux
spk_65: engines into what we call the baron de vinci
spk_3: a analytics which is part of the platform and and and the lot of we had a lot frank been in this area for many air this is a heritage we also shared we've got night when they were part of very very good on a linux a for security and focus engagement and building this a i ah
spk_35: modeling into the platform basically allowed to share the the technology across all applications that running the platform and that if another way to accelerate innovation is is you know having access to the the latest i
spk_3: and and we think are a i ai pressured because
spk_10: we manage a lot of data will often correction data and experience data it goes through our platform
spk_3: the with our strength in in you know that a management and experience management and other the data you know did love machine learning that helps you when new innovation into all the different applications iran you know what we call the work of the feature changing the workforce putting a more automation into workflows to lot like the workforce more efficient
spk_12: so if you look at them
spk_66: and with consider to say which we we can discuss the earlier
spk_3: definitely
spk_22: employees working at home
spk_67: ah there's a price in in in demand for with a christian or in the moment assistant and guidance to employees
spk_3: and this is all based on a on the ability to to acoustic and linguistic model and and and alert agents that loki speak too fast and the government frustrated or your partner for too long ago you have a cop in the customer or here the catherine can't and you're not really answering to the point
spk_68: and the inability to hundred to to to do that in the moments
spk_62: of course not a sports channel but also check and messaging effects channels
spk_0: in the report that innovation did we have when accelerating
spk_1: so we we were thought about you know they did the club that the knowledge of the business model but it really
spk_0: opportunity to address them okay
Disclaimer