Operator
Greetings. Welcome to the UiPath second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Kelsey Turcotte, Senior Vice President of Investor Relations. You may begin.
Kelsey Turcotte
Good afternoon and thank you for joining us today to review UiPath's second quarter fiscal 2023 financial results, which we announced in our earnings press release issued after the close of the market today. On the call with me are Daniel Dinez, UiPath co-founder and co-chief executive officer, Rob Enslin, co-chief executive officer, and Ashim Gupta, chief financial officer. Rob will start the discussion and then turn the call over to Daniel. After that, Ashim We'll review our results and provide guidance. Then we will open the call for questions. Our earnings press release and financial supplemental materials are posted on the UiPath Investor Relations website, ir.uipath.com. These materials include gap to non-gap reconciliations. We plan to discuss non-gap metrics on today's call. This afternoon's call includes forward-looking statements about our ability to drive growth and operational efficiency. and our financial guidance for the third fiscal quarter and fiscal year end 2023. Actual results may differ materially from those expressed in the foreign-looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For a discussion of the material risks and uncertainties that could affect our actual results, please refer to our annual report on Form 10-K, for the year ended January 31, 2022, and our other reports filed with the SEC, including our quarterly report on Form 10-Q for the quarterly period ended July 31, 2022, to be filed with the SEC. Forward-looking statements made on this call reflect our views as of today. We undertake no obligation to update them. I would like to highlight that this webcast is being accompanied by slides. We will post the slides and a copy of our prepared comments to our investor relations website immediately following the conclusion of this call. Before I turn the call over to Rob, I'd like to inform you we plan to hold an investor day during our Forward Five user conference on Tuesday, September 27th at the Venetian Hotel in Las Vegas starting at 1145 a.m. Pacific time with lunch that will feature roundtables hosted by our executive team. please reach out to ir at uipath.com for registration details. Now, I'd like to hand the call over to Rob.
Daniel Dinez
Thank you, Kelsey, and good afternoon, everyone. Thank you for joining us. Our second quarter results exceeded the high end of our guidance, despite an increasing FX headwind and a choppy macro environment. ARR crossed the $1 billion mark, totaling $1.043 billion. an increase of 44% year-over-year, driven by net new AR of $66 million. We now serve more than 10,500 customers. Automation continues to be a central part of digital transformation for companies of all sizes and across all industries. We see this in the breadth of companies that continue to invest in UiPath, like ADT, iCertis, Mayo Clinic, Smartsheet, and Take-Two Interactive, which are just a few of the organizations that invested in UiPath's platform in the second quarter. Our relationship with iSIMS, a leading global provider of talent acquisition software, is a good example of the power of automation. During the quarter, they expanded the UiPath deployment and looking to the future, they plan to embed UiPath automation cloud robots and integration service into the iSIMS talent cloud. to enable their customers to automate routine tasks and business processes. Success stories like these and dozens of customers and partners I have met since I joined UiPath leave no doubt in my mind that we will be the enterprise automation provider that all organizations will embrace over time. That's because we moved automation beyond RPA to a full suite of end-to-end platform capabilities. Our post-finance AG, Wynne, says it better than we do. Post-finance, a retail financial institution in Switzerland, has been on its automation journey for three years with a competitor in RPA and another in process mining. Driven by a search for a more efficient automation platform with a wider scope, they determined that UiPath platform is the one in the market that can fulfill all their current and future needs. while significantly reducing the total cost of ownership for their automation program and helping them to achieve their strategic goal to become more efficient. Our platform not only allows customers to discover automation opportunities, but also redesign and improve previously disjointed processes, bringing them from the endless cycle of outdated approaches and unlocking the true digital transformation. Digital transformation is one of the most important secular trends, and UiPath's platform is central for companies to reach their goal. Over and over, executives tell me that automation has accelerated their business, improved their customer and employee experience, increased speed to value, and allowed them to redeploy capital. These kinds of outcomes, our customer discussion from the RPA Center of Excellence, which is automating process by process, to the C-suite executives, who have a holistic view of enterprise requirements. A great example of this evolution is a U.S.-based global power technology leader, a customer since 2018. They've automated over 160 processes across finance, supply chain, HR, IT, and shared services, saving over $4 million. Now with the C-Suite sponsorship, they have expanded their program to the full UiPath platform, both on-premise and in the cloud, and are launching a citizen development and a tendered automation program. My takeaway from the last few months is that the market is clearly evolving, and UiPath is driving that evolution. We have a first mover and a technological advantage, and as the automation leader, we continue to expand the value we can deliver for our customers. That being said, while we believe our business has considerable room to grow, our top line metrics have slowed, and we need to evolve how we manage our business. Our go-forward priority will be to balance investing for the long-term growth while managing the business to consistently expand non-gap operating margin, deliver sustainable, positive, adjusted free cash flow, in fiscal year 2024 and beyond. As we said during our IPO, our long-term objective, we expect to achieve a non-GAAP operating margin of greater than 20%, and our commitment to that objective has not changed. Let me be clear. I don't believe we need to sacrifice growth to achieve our profitability targets. This market is large and early stage. Our customers are committed to your path and they love the outcomes we deliver. In the short term, we are strategically repositioning the company to increase velocity, efficiency, and customer centricity. This includes evaluating, elevating customer conversations, selling business outcomes, and helping organizations realize the transformational benefits of automation. We have the opportunity to be the essential automation goal standard for customers delivering technology that is integral to their business strategy. To get there, we are aligning around four strategic objectives. First, investing in our platform to increase our competitive mode and delight our customers with disruptive and innovative capabilities that improve outcomes, accelerate return on investment, and leverage the cloud. Second, increasing velocity and productivity. This is where we are expending the most energy and also expect the greatest return. We need to set ourselves up to take advantage of our incredible new platform releases like 2210, which we plan to unveil at 4.5 in a few weeks. This includes branding and marketing around business outcomes that resonate with the C-suite, simplifying our sales motion to lower cost, building strategic partnerships that elevate our brand and serve as distribution channels, and coalescing around partners that can really move the needle. Third, we are bringing together our diverse team, aligned around driving UiPath to the next level. Every business that grows at our rate requires experienced leadership. We have great bench strength. having already elevated internal leaders to new roles, and a strong brand that is attracting a great pool of new talent, as you saw by today's sales leadership announcements. Finally, and equally critical, we are committed to sustained profitable growth by leveraging our scale and exercising disciplined resource allocation. Profitability is a core pillar of our go-forward strategy. While we are reducing our near-term forecast to account for a significant FX headwind, the macro environment, and our internal repositioning, I am confident in our strategy. And I firmly believe from my experience that we are on the right track to achieve our growth and profitability objectives. And I am confident in our strategy. I'll now turn the call over to Daniel.
Kelsey
Thanks, Rob. We frequently talk about our market leadership, and in July, we were positioned by Gartner as the leader in the 2022 Gartner Magic Quadrant for Robotic Process Automation Research Report for the fourth year in a row, positioning UiPath highest for ability to execute and first for completeness of vision. We are gratified to have received this recognition. We continue to hear from our customers that the breadth of capabilities in UiPath's automation platform is why we win. UiPath is the only company that offers a complete solution, including task and process mining, document understanding, test suite, RPA, and low-code deployed on-premise or in the cloud. Task and process mining. are key to helping customers discover new opportunities for automation. And in June, we will name a process mining leader in the technology vendor landscape, according to the Everest Group Peak Matrix for process mining technology vendors 2022 for the third consecutive year. And in our upcoming 22.10 platform release, will introduce new process mining capabilities. At the other end of the automation lifecycle, TestSuite is emerging as a meaningful growth opportunity for UiPath and an important tool for customers to scale their programs resiliently. The value of TestSuite expands when customers use UiPath's test capabilities for both RPA and application testing, driving our platform adoption in a new market. Finally, we have long believed that the combination of UI plus API plus AI automation is the key to customer success and are really excited about the acquisition of reInfer. By adding reInfer to our platform, we can now leverage natural language processing and machine learning technology to do what we call communications mining, transforming massive amounts of unstructured data into actionable information with speed and accuracy, which customers like UBS, Paychex, and Farfetch are already doing. Combining reinforcements with the breadth of our AI-powered capabilities unlocks new opportunities for our customers. We are very excited to unveil our newest innovations at 4.5, where we will announce exciting functionality in our 2022.10 platform release across all elements of our platform. We hope to see many of you there. With that, I'll turn the call over to Ashim to talk in more detail about our second quarter results and provide guidance.
Rob
Thank you, Daniel. Before I get started, please note that unless otherwise indicated, I will be discussing results on a non-GAAP basis, and all growth rates are year over year. We delivered a solid second quarter in the face of increasing FX headwinds and a more measured buying environment. Customers understand the meaningful business outcomes that automation delivers and the competitive differentiation of UiPath's automation platform. In fact, two of our largest deals in the quarter were new customers making multi-year commitments to our platform, which is really nice to see. Turning to our numbers, second quarter ARR totaled $1.043 billion, up 44%, driven by net new ARR of $66 million. On a year-over-year basis, FX created an approximately $8 million headwind to net new ARR in the quarter and a $12 million headwind to the total ARR balance. Dollar-based net retention was 132%. Normalizing for FX and excluding the impact of Russian sanctions, dollar-based net retention was 135%. Consistent with the broader macroeconomic environment, Dollar-based net retention rate was meaningfully stronger in the Americas. Dollar-based gross retention was 98%. This best-in-class metric is consistent with previous quarters as customers are committed to our platform, which is driving quantifiable ROI. As of the end of the second quarter, customers accounting for at least $100,000 in ARR grew more than 30% year-over-year to 1,660. While customers contributing over $1 million in ARR grew over 60% year over year to 190. Revenue grew 24% to $242.2 million. Normalizing for the year over year FX impact, which was an approximately $20 million headwind, revenue grew 35% year over year. Remaining performance obligations increased 36% to $709 million. Normalizing for the year-over-year FX impact, which was an approximately $51 million headwind, RPO grew 46% year-over-year. Current RPO increased 37% to $442.6 million. Total gross margin was 84%, reflecting ongoing investments in support and cloud infrastructure as we scaled that business. Software gross margin was 91%. Looking ahead, we continue to expect gross margin to be greater than 80%. Second quarter operating expenses of $215.7 million increased 34%, reflecting only one month of benefit from the steps we took in the second quarter. Gap operating loss of $120.2 million included $88.3 million of stock-based compensation expense. Non-gap operating loss was $11.2 million. Second quarter non-GAAP adjusted free cash flow was negative $23.3 million. And we have $1.7 billion in cash, cash equivalents, and marketable securities and no debt. Let me now turn to guidance. First, we guide to what we see in the pipeline which continues to fluctuate given the choppy macroeconomic environment which we anticipate will continue. Second, More than half of our business is outside the U.S., and we price in local currency, including euro and yen. And as a result, there is a material FX headwind for both ARR and revenue that has significantly increased as we move through the year. Lastly, going forward, as Rob said, profitability is a core pillar of our go-forward strategy. While the reduction in our top-line near-term forecast reflects the FX headwind, of the macroeconomic environment and our internal repositioning, we are committed to our goal of achieving non-GAAP profitability and positive adjusted free cash flow in fiscal year 2024. Turning to the numbers, first, for fiscal third quarter 2023, we expect ARR in the range of $1.091 billion to $1.093 billion, included including an incremental FX headwind of approximately $5 million. Including the foreign exchange impact, ARR is expected to grow 36% year-over-year at the midpoint of guidance. We expect revenue in the range of $243 million to $245 million, including an incremental FX headwind of approximately $10 million. Excluding the foreign exchange impact, revenue is expected to grow 22% year over year at the midpoint of guidance. We expect non-GAAP operating loss to be in the range of negative $30 million to negative $25 million, reflecting the timing of investments that shifted from the second quarter to the third quarter and an incremental FX headwind of approximately $5 million. And we expect third quarter basic share counts to be approximately 550 million shares outstanding. For the full year, we expect ARR in the range of $1.153 billion to $1.158 billion, including an incremental FX headwind of approximately $15 million. Excluding the foreign exchange impact, ARR is expected to grow 30% year-over-year at the midpoint of guidance. Revenue in the range of $1.002 billion to $1.007 billion, including an incremental FX headwind of approximately $25 million. Excluding the foreign exchange impact, revenue is expected to grow 22% year over year at the midpoint of guidance. Non-GAAP operating loss of approximately negative $15 million, including an incremental FX headwind of approximately $15 million. Excluding the foreign exchange impact, non-GAAP operating income is expected to be $25 million for the full fiscal year. Now, I'll turn the call back to Rob.
Daniel Dinez
Thanks, Hashim. Crossing $1 billion in ARR this year is a big achievement, but it is just the first milestone for us. I'm confident that this is a multi-billion dollar company that customers see as integral to how they run their business. We have a strong foundation to scale and we are making decisions that put us on track to achieve growth and profitability. Our potential is enormous and we believe in the long-term vision of the company now more than ever. I look forward to meeting many of you over the coming weeks and to laying out our strategy in more detail during our investor day on September 27th. We'll now take questions and I'll turn the call over to the operator. Operator, please poll for questions.
Operator
At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. In addition, we ask that you please limit to one question and one follow-up. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Remo Lenzchao with Barclays. Please proceed with your question.
Remo Lenzchao
Perfect. Thank you. Thanks for the extra clarity, Rob. If you think about the strategic changes that you talked about, can you kind of double-click on that a little bit more in terms of, like, the initiatives you're doing there, and usually when you do that, you kind of have a period where you're negatively impacted, and then it should get better afterwards, which is why you're doing it. Can you just talk a little bit about how you see that evolving at the moment? And the second follow-up question for Ashim, if you think about at the beginning of the year, you were one of the first to kind of call out some macro uncertainties, and back in March, you talked about the renewal pool, and you didn't know how customers would behave. If you think about the additional comments you've made today, is that still the same issue? Is there something else that is happening? Can you just elaborate there a little bit more? Thank you.
Daniel Dinez
Sure. Let me go first, Remo. Thanks for the question. Yeah, as we evolve and reposition the company, we spoke early on about How we're driving digital sales, which is basically a combination of inside sales in our emerging segment, and we're very happy with the progress that we continue to make in that space. We need to position the company to drive business outcomes into the C-level suite and position the enterprise automation platform to be the winner. And we actually believe that the product is absolutely incredible. And in order to do that, we are aligning the sales organization around that, bringing in new experienced talent. We promoted some talent internally as well. We've just announced the European leader. And we've seen some promising signs in North America as we move the automation platform. So we are pretty confident that over time this is the right strategy. And as we said, we would lay it out at Invest Today in very, very clear terms.
Rob
And then, Raimo, just when you think about, you know, our guidance and tracing back to the first year. First, you know, I remind everybody, like, we have a very strong foundation globally, so we actually have a very good view of just, you know, the overall exposures that's there. Here's what's different. FX continues to get worse and deteriorate, right? We came to parity on the euro. The yen, you know, continued to deteriorate as well as the quarter has progressed. We do see weakness in Europe and Japan in particular. And we see that reflected. I mean, in our dollar-based net retention rate, we still see that as an asset when you take out the impact of FX. When you break that down one level further, America's dollar-based net retention rate, where it's not as exposed to the macroeconomic environment, we see a lot of strength there. We continue to see strength there. We also see strong gross net retention rates, which we talked about at 98%. So we still feel very confident in the value around our renewable base that our software is performing. So we look at our pipeline, we look at the activity, we listen to what customers are saying, and we just find it appropriate given the environment to provide the guidance that we did here.
Operator
Okay, thank you. Our next question is from Phil Winslow with Credit Suisse. Please proceed with your question.
Phil Winslow
Hi, thanks for taking my questions. I just wanted to focus on the guidance in terms of what you're hearing from customers. Maybe, Rob, you can start with this. In terms of just the lowered sort of net new AR expectations, obviously excluding FX, what are you seeing in terms of the change from customers? Are they just simply shrinking maybe some of the scope of the deployments or just deployments as a whole getting pushed out? Any sort of more color there would be helpful. And also maybe compare that to what you have done in the first half. And I just have one follow-up for Daniel.
Daniel Dinez
Yeah. Thanks, Phil. I would say to add on to Ashim's comments, we're definitely seeing budget discussions taking longer, C-level executives getting engaged in it. We view automation, obviously, as a key growth lever for companies, but we're definitely seeing those outcomes. And as we position new experienced leaders, we're going to be able to deal with that more. As I said earlier on, we do see the benefit though of that discussion in North America where we are starting to see, um, really positive signs in the upper end of the segment as well.
Phil Winslow
Got it. And then Daniel on the, on the technology side, obviously you've been investing organically and organically in expanding your, their portfolio. They're really trying to build out an end to end suite. You know, you know, when you talk to customers, uh, you know, what is starting to resonate? Uh, is this starting to resonate with them in particular? Are there parts of that suite, they're starting to carry more weight, thanks.
Kelsey
Yeah, hi Phil. Look, I would say that our entire platform resonates very well with the customers. They find the value from process discovery, which is very important in finding opportunities for automation to implementing where we play for personal automation and enterprise automation to delivering great outcomes, measurable outcomes. We are seeing meaningful traction with our test suite, which is not only for testing RPA, but also for testing application implementation. And we are seeing it as... becoming like a clear path in digital transformation because people are implementing new systems and it's a lot of manual labor involved in testing the new systems and it makes a lot of sense to automate the manual testing and then they reuse the building blocks into delivering an end-to-end automation
Operator
Our next question is from Keith Weiss with Morgan Stanley. Please proceed with your question.
spk11
This is Sanjit Singh for Keith. This is Sanjit for Keith. Thank you for taking the question. Rob, I wanted to get a sense of some of the spending hesitancy, so outside of the FX sort of impact. But in terms of customers trying to expand their business with you or attracting new customers, At a high level, you would think that automation would be a super high priority, given the inflationary environment, given the need to get more efficient. And so in terms of the sources of those that spending hesitancy, is it about the implementation cycles? Is it about the payback period? I assume this is extremely, it sells itself on an ROI basis. But if customers are prioritizing projects with 12 months or less payback, does this sort of automation fit that fit that fit the bill if you'd like or alternatively are there potentially competitive issues that are sort of um lengthening the sales cycles or lengthening the eval process any any sort of color on um the nature of the hesitancy to get deals done really there's no question customers see the benefit of automation i would say the automation market is evolving and it's new and we look at the broader broader platform that takes into account what i would say is speed to value
Daniel Dinez
I've spoken to some senior executives here in New York City in the bank, and they are looking to utilize UiPath's platform to drive really financial transformation in the organization. So we see it in many of our conversations. That's absolutely true. But as we look at it, those decisions are taking a little bit longer. They take a little bit more foresight, and customers are taking just a little bit longer to drive it. As we build the ROI calculators and and drive to business outcomes with these customers. I'm absolutely convinced that automation is definitely going to help companies do not only digital transformation, but drive speed to value. In the lower enterprise segment, one can look at the emerging markets. We are still very relevant, and product is relevant, and we're doing very, very well in that segment. And that's where we acquire customers, and we continue to acquire customers. So I would say, over time, I feel really confident that we will be able to deliver. And at the top end of the market, we need to focus on a denser ability to drive consumption with our largest accounts. And that's something that we focus on as well.
spk11
Understood. I really appreciate that thought. And then as a follow-up, Ashiba, I just want to get some, maybe some context around the guidance. So as you look to the Q3 and the Q4 implied guide, Are you extrapolating just the trend that you've seen through July, through August, to the balance of the year? It seems like America has been a source of strength. Do you assume that this strength continues in the Americas, or are you being more conservative on that side of the business, too? In some sense, are you assuming something that's worse than what you've seen, or just extrapolating what you've seen thus far?
Rob
I mean, like we always say, we're very consistent with the way we guide. We guide to what we see in front of us today, and we see America's strength in We have a lot of confidence in that business as we look at our pipeline and as we look at our execution there. I think Europe and Asia continue to be outsized, impacted in terms of from a macro and a foreign exchange standpoint, and both of those that we have guided in. The other piece, as Rob said, we're repositioning the company, and we're really excited about the leadership announcements that are out there. And so we're also just accounting for the, you know, the transition that's natural as any company repositions itself in certain areas. So those are the two factors that really give context around our guidance.
Operator
Our next question is from Mark Murphy with JP Morgan. Please proceed with your question.
Mark Murphy
Yes, thank you very much. Ashim, is it possible to disaggregate the reduction in ARR? I think it's about 6% for the year. into those three factors? I think you had mentioned FX, macro, and your own internal repositioning. In other words, are those equivalent or are there varying magnitudes across those three?
Rob
Yeah, I mean, when you look at, I think FX is the one that is the most quantifiable in terms of where that is. And so we, when you look at it versus the prior consensus in terms of the change in guidance, we look at that as $15 to $20 million in terms of the impact just from FX You know, the macro and kind of some of the internal changes that we're doing, you know, and other items, for that, that's really hard to disaggregate. I would say, you know, we look at both of those as in play as we give our guidance. That's there. So the macro, the FX is quantifiable, and I provided that, Mark. The other two, I would just say, is more guiding based on our pipeline that we see in front of us today. Okay.
Mark Murphy
Understood. Thank you. And then I had a quick follow-up, perhaps for Daniel or Rob. I'm wondering if you're seeing equivalent growth rates for automations that run entirely inside a Microsoft environment versus those that are stretching across multiple environments. And if there's any way you can just remind us, what does that mix stand out of the kind of Microsoft-only environment today?
Kelsey
Well, Traditionally, and it continues today, our technology was mostly used for complex processes that usually spend multiple systems. This is actually the strength of our technology. Most of our customers have multiple enterprise systems. It's a big difference between an enterprise automation platform that works very well across multiple systems and in application automation that Microsoft and similar system application providers have basically entered the market recently. So I am very confident that we have the only complete platform that offers an end-to-end process automation that is differentiated for our customers.
Operator
Our next question is from Kirk Materni with Evercore ISI. Please proceed with your question.
Kirk Materni
Yeah, thanks. Rob, I was wondering, can you just talk about the environment maybe from a vertical or an industry perspective? Are you seeing any difference in the discussions you're having in certain industries rather than others at this point in time? And I guess just some of the earlier questions on the sales organization, Anything you all are thinking about doing sort of towards the end of this year, or will any sort of changes with some of the new folks coming in be more positioned at the beginning of fiscal 24? Thanks.
Daniel Dinez
Yeah, thanks, Kirk. Good question. We're evolving the sales organization in flight. I would say when you look at the industry, we continue to see significant demand for financial services, for healthcare, and for manufacturing. I wouldn't say the environment's impacting any of them more than others, for sure. I would say it's much more geographical. Some things that we're doing in terms of we're driving significant uptick with partners, for sure. We're looking at distribution models. We're looking at the emerging to graduate accounts into the enterprise segment, and as I said, at the density level. The majority of those changes will take place in the beginning of the year as we have brought in new talent and we align our outcome to that. But we feel good about what we're seeing in the market already around business outcomes and how enterprise automation drives speech value for companies.
Operator
Thank you. Our next question is from Brian Bergen with Cowen. Please proceed with your question.
Brian Bergen
Hi, thank you. I wanted to ask on the revenue headwind associated with just the cloud transition. I think it was four points previously. So first, any change to that assumption? And then just thinking out further, should we expect a more deliberate push on cloud deployment by clients that cause that headwind to potentially get worse as we go forward beyond this fiscal year? And I guess, if you can give us any sense of deployment mix in the revenue base now and how you're thinking about puts and takes of that progressing, it would be helpful.
Rob
Yeah. So the four points stays relatively consistent for the second half. You know, we don't, we don't, we don't see any change in our assumption there. Um, the launch of our automation cloud robots was very successful, but it's on track with the way we've, we've discussed it and modeled it, um, you know, post our launch of 22.4. Um, when we think about going forward, you know, Brian, like longer term assumptions, you know, those are things we'll discuss it in investor day, but we don't see anything, significant at this moment versus the previous assumptions that we've given. In terms of automation cloud robots, which is the biggest impact from a revenue standpoint, we've already gotten a dozen customers there. It's been great feedback. We mentioned iSIMS in our script, and there's a great partnership emerging there that is using there. And we see other companies as well, like Smartsheet and other companies very interested to see how they can take advantage of those automation cloud robot capabilities. To sum it up, No change in the assumption. We'll talk more about that in Investor Day, but there's no significant difference at this moment in terms of that as a headwind.
Brian Bergen
Okay. And just understanding FX you've given for AR on the back half here, any further color you can give on NDBR as you go through 3Q and 4Q?