Ladies and gentlemen, thank you for standing by, and welcome to the Verint Systems Inc. Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. As a reminder, today’s program may be recorded.

And now I'd like to introduce your host for today's program, Matt Frankel with Verint Investor Relations. Please go ahead, sir..

Thank you, operator. Good afternoon. Thank you for joining our conference call today. I'm here with Dan Bodner, Verint's CEO; Doug Robinson, Verint's CFO; and Alan Roden, Verint's Chief Corporate Development Officer. Before getting started, I would like to mention that accompanying our call today is a Webex with slides.

If you'd like to view these slides in real time during the call, please visit the IR section of our website at verint.com, click on the Investor Relations tab, click on the webcast link and select today's conference call.

I'd also like to draw your attention to the fact that certain matters discussed in this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other provisions of the federal securities laws.

These forward-looking statements are based on management's current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by these forward-looking statements. The forward-looking statements are made as of the date of this call, except as required by law.

Verint assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements.

For a more detailed discussion of how these and other risks and uncertainties could cause Verint's actual results to differ materially from those indicated in these forward-looking statements, please see our Form 10-K for the fiscal year ended January 31, 2021, when filed, and other filings we make with the SEC.

The financial measures discussed today include non-GAAP measures, as we believe investors focus on those measures in comparing results between periods and among our peer companies.

Please see today's Webex slides, our earnings release and the Investor Relations section of our website at verint.com for a reconciliation of non-GAAP financial measures to GAAP measures.

Non-GAAP financial information should not be considered in isolation from, as a substitute for, or superior to GAAP financial information, but is included because management believes it provides meaningful supplemental information regarding our operating results when assessing our business and is useful to investors for informational and comparative purposes.

And non-GAAP financial measures the company uses have limitations and may differ from those used by other companies. Now I'd like to turn the call over to Dan.

Dan?.

first, there is a widening engagement capacity gap, new workforce dynamics, ever-expanding customer engagement channels and exponentially more customer interactions, all must be managed with limited budgets and resources. Second, business leaders are concerned with rapid changes.

94% report being worried about understanding and acting on rapidly changing customer behaviors. Third, business leaders have high hopes for AI, but they want to see results. 78% have made AI investments, but only 18% say, it helped them manage rising interaction volumes.

And finally, data and departmental silos hamper the effectiveness of analytics efforts. Companies need a unified approach and view of data in order to realize the potential of AI and analytics. Let me discuss how Verint's go-to-market strategy addresses the findings of this recent research.

Our open cloud platform helps brands to provide boundless customer engagement in the contact center as well as across the enterprise. Platform use cases are enterprise-wide going well beyond the contact center to back office, branches, digital marketing and compliance.

The Verint Cloud Platform was designed to connect the contact center to other parts of the organization involved in customer engagement activities, a trend that has become increasingly important with the acceleration of digital transformation.

From a technology perspective, the platform is designed with a native cloud architecture, supporting multi-clouds with open access to data, making it easier for customers and partners to quickly integrate with their environments.

Verint Da Vinci AI and Analytics is in the center of the platform as it powers all platform applications with the latest machine learning models and advanced analytics. We believe that our commitment to open access and our API strategy differentiates our platform and will drive further growth.

In Q4, we launched several innovative solutions, including a new data management solution, to help brands build a unified approach to aggregating interaction data across silos and unlocking the value in their data.

This highly innovative cloud solution helps break down data silos and manage all modalities of data across unified communications, CCaaS and enterprise collaboration solutions.

A new workforce scheduling solution to help brands optimize the customer engagement workforce across the contact center, back office and the branch, and a new real-time agent assisted solution to help brands provide their agents with in-the-moment guidance to increase efficiency and elevate customer experience.

This innovative solution is based on the state-of-the-art linguistic and acoustic models and is especially effective for the agents working at home. Regarding partners, we have a large partner ecosystem that we have developed over many years.

There has never been a better time to partner with Verint, with our focus on delivering a world-class partner-friendly experience. In addition to supporting existing partners, this year we launched a new partner program with a focus on system integrators.

We believe that digital transformation is providing system integrators new opportunities to help brands with their customer engagement initiative across our open cloud platform suited -- is well suited for system integrators focused on data management, workforce efficiency and customer experience. Turning to our outlook for the current year.

We expect another year of strong cloud growth, with 10% new booking growth on a PLE basis. Given the cloud momentum experienced in the second half of last year, we are raising our outlook for cloud revenue growth to a range of 30% to 35% for the current year. Our guidance reflects the continued market shift to SaaS.

This year we expect the percentage of new software bookings that come from SaaS to approach 60%, reflecting a steady increase over the last 3 years. We also expect on a non-GAAP basis the percentage of software revenue from recurring sources to approach 85%, up from 81% last year and 71% 3 years ago.

Now before I turn it over to Doug, I would like to briefly discuss Cyber Intelligence. Cognyte, our former Cyber Intelligence business, is now listed on NASDAQ under the ticker CGNT. While Cyber Intelligence is no longer part of Verint, its results for last year are included in our 10-K, and I would like to provide a brief review.

Cyber Intelligence also had a strong finish to the year with revenue coming in at $124 million and estimated fully allocated adjusted EBITDA coming in at $24 million for Q4.

Cognyte will publish their results on Form 20-F at a later time, and they announced today that they will review their fourth quarter results on a conference call in the second half of April. As noted in Cognyte's press release, their results may be slightly different than those we published due to the applications of varying allocation methodologies.

Cognyte is in a very exciting market, and we wish them good luck as an independent public company. Now let me turn the call over to Doug..

new deployments and support conversions. We expect around half of our cloud revenue growth to come from new bookings and half to come from support conversion. This mix reflects strong momentum for our cloud solutions, including the success of transitioning our existing base to the cloud.

We ended last year with a $300 million base of support revenue, and we expect our support revenue to migrate to cloud over time. Finally, I'd like to review our capital structure following the Cognyte spin.

We have a very strong balance sheet with $2.5 billion of assets, approximately $660 million of cash, and expect to get another $200 million of cash from the Apax investment in April. We now have a current net debt to adjusted EBITDA leverage ratio of less than 1x. Going forward, our excess cash will primarily be used to support our growth.

In addition, I'm pleased to announce that we're putting in place a new annual stock repurchase program, in which we'll use part of our strong cash flow generation to buy back stock. We plan to buy back up to the number of shares to be issued under our annual incentive equity program.

So in summary, we had a strong Q4, including double-digit new bookings growth and a record backlog. We entered fiscal 2022 with strong momentum, driven by our differentiated cloud platform and our focus as a pure-play customer engagement company. So with that, operator, let's open up the line for questions..

Certainly. [Operator Instructions]. Our first question comes from the line of Daniel Ives from Wedbush. Your question, please..

Yes, thanks, and great quarter. So Dan, can you maybe just talk about on the cloud deals? I mean, are the size of the deals overall, starting at large drivers to a lot of big deals in the quarter.

Can you just talk about that in terms of some of those dynamics from a pipeline perspective?.

Yes. So I think one area to look at is the increase in backlog in Q4 that you can see the RPO level increased 29% year-over-year. And this definitely reflects more cloud deals and more large cloud deals. That contributes very little to the current quarter, but obviously create backlogs for multi-years.

So we've always been very strong with enterprise customers and got large deals.

But with the recent introduction of the cloud platform where we put a lot of different applications on the platform that customer consume as cloud services, it is getting easier for customers and partners to consume more of the platform, which will contribute, obviously, to bigger deals.

But what's -- obviously, the way we position the platform, whether the customers buys upfront multiple applications in a big deal or they buy over time, that makes no different to us. This is basically just turning on cloud services in the platform. So we have customers that have different behaviors.

Some tend to concentrate their purchases into larger opportunities, and some will do it over time. In terms of the terms, we -- it's pretty steady. Our average cloud deal is about 2.5 years' term, so no major change there. But definitely, more cloud deals and more large deals and a big change in our backlog..

Great. And then just for you as well as Doug.

Now that the split successfully has happened with Cognyte, can you just talk about strategically -- I mean, obviously, that was 1.5 years in the making, but how things are different internally? Is it just now more sales and marketing all focused on one area? Even from a customer feedback perspective, can you just talk about that anecdotally?.

Sure, happy to. So we actually see a lot of changes, and we -- many people internally, we refer ourself as the new Verint. We became a pure-play customer engagement company at the right time, where the cloud transition and the digital transformations are presenting enormous growth opportunities.

So there is a lot of buzz internally, and there's a growing buzz also externally as we tell the story more and more over time. Definitely post-spin from a board and management team perspective, we are 100% focused on a single mission, and that is to accelerate the growth and position Verint as a category leader.

And we've already aligned our compensation plans with our strategic objectives. From a balance sheet perspective, Doug mentioned our strong balance sheet, strong cash flow generation. So we feel like we have the balance sheet that can support any investment we want to make in growing the business.

We talked about launching a new partner expansion program. We are being recognized in the market as a partner-friendly company, and we believe partners are becoming more important with the changes we see in the industry. So definitely a focus for us. We're also accelerating the pace of the innovation in our cloud platform.

And we plan to review many new -- launch many new innovations in our upcoming customer Engage conference that will be announced shortly. And then, internally, I think it's very interesting that our employees clearly understand the opportunity that we have ahead of us.

We had a fantastic Q4 with strength across all key cloud metrics and we expect to start the year very strong in Q1..

Great. Thanks..

Thank you. Our next question comes from the line of Ryan MacDonald from Needham & Company. Your question, please..

Hi. Good afternoon, and thanks for taking my questions. At the Analyst Day, you highlighted some pretty healthy conversion bookings that were trending strongly. Obviously, it seems like you're pretty optimistic with the increased guide for cloud revenue growth.

Can you just talk a bit about the mix of bookings activity between the conversions versus net new customers, and that's -- how that's being reflected in higher outlook for fiscal 2022?.

Yes. So the cloud revenue growth of 30% to 35%, that is approximately $100 million of growth in cloud revenue that we expect this year. About 50%, Doug mentioned, will come from our conversion program. We've been -- definitely has kicked off in the second-half of last year. So we saw more conversions than before.

And 50% of that cloud revenue growth will come from, actually, from new cloud deals. And this is a healthy mix that we see between the two trends. Also important to mention that we estimate that the transition from our customer base to the cloud will be over time. So currently, we have about $300 million of support revenue.

And we mentioned in our Investor Day that we expect this to be -- half of that to be converting by fiscal 2024. So we definitely seen that pickup in Q3 and Q4 last year that we expect to continue in the current year. And a lot of the cloud growth, whether it's coming from the conversions or the new deals, is already reflected in the RPO.

So we increased RPO by $150 million year-over-year. And a lot of that is obviously multi-year cloud deals that will contribute to revenue in the current year. So it's pretty good visibility into how we're going to achieve the 30%-plus cloud revenue growth..

Got it. That's very helpful.

When you think about the mix of new bookings pipeline and new opportunities, new customers, can you talk about the mix you're seeing between contact center versus opportunities outside the contact center? And perhaps touch on how the Verint platform is resonating, the messaging around that is resonating outside of that core contact center base from that perspective? Thanks..

Yes, that's a very good point. So the platform basically helps our customers to connect the contact center with other parts of the organization. So it's not that we need to sell to other parts of the organization. We just help them to connect, which is a trend that we definitely see not just in our area, but also in the communication infrastructure.

We see more customers asking for UCaaS and CCaaS and CPaaS all to be connected through a single vendor. And obviously, we're very well positioned to help connect the enterprise. So let me give you a few examples how we connect with our platform.

So we got a request from customers that have branches, for example, banks that have contact center and branches and they're scheduling employees for their contact center. They're getting employees for their branches. But it's different scheduling because they're obviously different, focusing at different needs.

In the COVID year where they've got a lot of people working from home, even people in the branch had a lot of downtime.

And there was a pickup in interest in having Verint to help them schedule people in the contact center, in the back office and in the branch, so they can have the flexibility to use the workforce to the mix based on peak times and based on resource availability. So that's connection. Another example is customer journeys.

In the digital world, which we are all going into digital transformation, a lot of the consumers actually start the journey on the website. And when they come to accomplish what they are trying to accomplish on the website, they will call the contact center.

But the contact center needs visibility to the customer journey 360 so they can continue their journey in a most efficient way. As you know, most contact center solutions have no visibility into websites.

And Verint's platform is able to provide them the journey in the website, the reasons why customers left the website, identify when customers call into the contact center and then mention, "We were just on your website and could accomplish something," so we'll analyze that data and make the connection between their journey in the website and the journey in the contact center.

So I think two examples to basically explain that we're not trying to sell to other type of buyers, but we're trying to help the buyers connect so they can optimize the customer journey or optimize the resources they have to achieve better customer journeys..

Our next question comes from the line of Brian Essex from Goldman Sachs..

Dan, I was wondering if you could talk a little bit about the margins. Great performance in the quarter, stronger-than-expected EBITDA margins, and I understand we have a step-down this year.

Can you talk a little bit about what you might anticipate in terms of recovery after that step down and when it might -- how long it might take to get to or return to like the kind of 29% operating -- or EBITDA margin level?.

Sure. We had 30% EBITDA margin last year, ahead of our expectations for Customer Engagement. Doug can actually take you through the steps we're taking to improve margin over time and the bridge.

Doug?.

Yes, sure, Dan. Brian, yes as Dan mentioned, we had a really strong performance in Q4. And then for the year, we ended up with about 30% EBITDA margins. It was a strange year for all of us, right? But we did a lot of cost restraints as we kind of went through feeling out the period. And then towards the end of the year, started to get back to things.

So that kind of with that tough compare in terms of kind of abnormal cost reduction last year, kind of drove higher EBITDA margins. And then the dis-synergies this year, so the full fiscal year will be post-spin. So kind of a more normalized margin is probably around 28%, not the 30%. I think that was just kind of unusual cost reduction.

And then with the dis-synergies, so kind of the burden of part of the company taking on the full company corporate infrastructure, that steps us down to probably around 26% that you'll see in our guidance.

Then after that, we do expect as we scale and the business grows over the next couple of years, we'll have kind of more typical margin expansion off of that..

Okay, that's helpful.

And then maybe if I can circle back on conversions again, could you help us understand that installed base of maintenance that you have and how that might convert to cloud? Is that on a one-for-one basis? And if we see an acceleration, does that mean you kind of need to -- I guess what is the longer-term mix, I guess, after this year that you might anticipate would come from conversion versus new business, I guess, is what I'm getting at?.

Yes. So we definitely expect PLE, which is the best way to measure the booking growth to be -- so new booking growth, right, that's a perpetual license equivalent, and that is expected to be double digit. And we gave guidance for double digits this year and targeting double digits for the next 3 years. And we also gave the mix within the PLE.

So we achieved in Q4 -- half of that PLE came from perpetual and half came from cloud. And we also guided that this year, we expect 60% of the PLE to come from SaaS.

So definitely, as we encourage our customers to move their support and convert it to cloud, also anything they buy new, more likely they're going to buy in cloud, 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 the PLE over the last 3 years to what we expect a 60% -- approaching 60% in the current year. So double-digit, to answer your question, double-digit cloud revenue growth from new deals is definitely part of our model.

And for this year, we see 50/50 between conversion and new deals in our cloud revenue growth. And conversion could accelerate. That's something we also saw during COVID. There was very little conversion in the first half of the year, and then a big pickup in the second half, more than we saw in the entire year before.

So there is now a change in the industry. Customers are adopting cloud. Obviously, the very large customers are slower. The mid-market is moving faster. It's hard to project the pace of conversion, but we believe that the goal is to convert at least 50% of that support in 3 years is a very reasonable goal based on what we see now..

Okay. That's helpful. I guess if I would just ask another way, I mean do you -- did your assumptions -- I think at the Analyst Day, we talked about maybe a longer-term 30% cloud growth rate.

And within that assumption, are you kind of assuming that your mix between conversions and new stays consistent?.

Well, our cloud revenue growth grew also more than 15% without conversion last year. So based on the historical conversion -- sorry, historical cloud revenue growth from new deals.

And the RPO that we already have that give us deals we closed in Q4 that will be contributing to revenue in the current year, we see this year half of that revenue growth will come from new deals. That is a reasonable assumption. Conversion can pick up. But if conversion picked up, it's not going to affect the growth that comes from new deals as well.

So that's going to -- so commercial pickup should actually contribute to higher growth rates over time..

Our next question comes from the line of Paul Coster from JPMorgan..

Yes, a couple of quick questions. Doug, you talked of the cloud revenue will sort of technically accelerate in '23, fiscal year '23.

Can you just talk us through the mechanism that causes that to happen?.

Doug, you're going to take it?.

Yes. I'm sorry, I thought you said Dan. Yes, you want to take that, Dan? Because it just kind of what you were just talking about in terms of the cloud..

Right. So the question is for the mechanism that causes the revenue growth to improve in fiscal '23 and '24. And that's basically the result of perpetual decline starting to diminish. We -- our perpetual business went down from $180 million to $140 million last year. So it was a big decline in perpetual. We expect the decline to be about 10% this year.

So it's a much more moderate decline. And then we expect basically the perpetual decline to start at $100 million plus, as some of our customers will continue to buy perpetual. And we discussed some of the very large customers that that's the way they prefer.

So steady cloud revenue growth and a steady PLE growth of double digits with less decline, less headwind from the perpetual decline is basically the mix change that causes the revenue growth to go up and also the EBITDA to go up.

Because all the expenses that we have now to bring that backlog and sign up the deal, multi-year deals, we don't have to increase the expense in order to get the revenue in the next periods. So we talked in the Investor Day, we gave a three months [ph].

We talked about how we see that mix shift moving our growth -- revenue growth rates to be up and eventually should be similar to our PLE growth rates..

Okay, so I kind of got you to repackage prior answers there, but that was helpful. And then I guess the other question is the capital allocation tends to be unexciting. I mean you've got an absolute boatload of cash. Well, I mean your balance sheet presents you with the opportunity to lever up and do something.

But instead it sounds like you're investing in yourselves, which is fine except that it feels like you can do more than that.

Are you just simply keeping your balance sheet in solid shape so you can do something transformational? Or is this it? Is it -- are you just going to be a very kind of conservative user of the balance sheet? I mean buying back shares just to cover the cost of dilution from share issuance is not going to get folks very excited.

So why should we be excited about the capital allocations as defined here?.

Yes. No, no, you're absolutely right. I agree. We wanted to come out of this spin with a strong balance sheet. But in terms of buybacks, we have a near time restriction from the spin. So we can't buy back more shares than the new shares we grant. Because we just did a big dividend, and you cannot get a tax-free spin and then go buy back shares.

So that restriction is going to be for some time, but not forever. And then we'll have more flexibility in terms of doing buybacks. But at this point, we're limited to the shares that we issue, and we intend to buy back that dilution..

Okay. Got you.

And then what's the duration for that, Dan?.

So it's -- it depends on many other circumstances. It's not a hard fact, but it could be a couple of years..

Okay. Are you going to -- I think you were....

This has to do more with the tax-free spin regulations. The fact that we spun it out, the Cognyte division, tax-free, there's a tax law that prohibits us from then going and kind of recapitalizing that with the stock buyback..

Sorry. Got you. I think I interrupted, Dan. I think you were going to talk about the investing in the business versus acquisitions sort of part of my question..

Yes. So I think that we're always looking for acquisitions that make sense. But the 3-year targets we laid out in Investor Day are organic. We definitely think we have a strong platform today. So we're not looking to close any specific big gaps that we need to close. But we'll definitely make further decisions what we want to do with our balance sheet.

But we're really happy that we -- in April, we expect the Apax second tranche. And at that point, we'll be in a -- we'll have more cash than debt, and that gives us a lot of flexibility..

Our next question comes from the line of Samad Samana from Jefferies..

So maybe first one, Dan, for you, when you think about the conversion activity that you guys have seen in that you're baking in for '20 -- or for fiscal '22, is there any particular like consistent characteristics of the customers that are converting early? Whether it's defined by size or end market or maybe what they're using for their core ACV, just any characteristics that we can triangulate upon?.

I think the journey is quite individual in nature. It's really where they sit in their decision to move to the cloud generally. And then sometimes, IT actually drives the shift to the cloud, because they want to focus on something else and they want to move the responsibilities to us.

And sometimes IT is actually the obstacle, because they want to continue to manage the infrastructure. And I don't think that there is a general characteristic other than very large customers probably are just moving slowly, perhaps because of security reasons.

Some large customers actually are buying -- are building -- sorry, are building cloud architecture, internal clouds. And we are in discussion that they'll host themselves the solution into our cloud. So we are very strong in the mid- to high end of the market.

And we see a lot of customers that want to work with us on how to optimize their individual journey to the cloud..

Great, and then maybe a follow-up.

When I think about the new deployments contribution to the cloud growth in fiscal '22, how should we think about maybe the contribution of new deployments from direct deals that Verint is selling versus partners such as like the Avayas and the Five9s of the world? Is there -- was there a change kind of within those 2 buckets when you think about the guidance increase?.

We definitely are investing in being a partner-friendly company. So we don't really care whether we get the order on our paper, on a partner paper. We try to work with partners where it makes sense to customers and the way they want to transact.

And in many cases when we work with partners, our direct sales force is involved in actually selling the products because we have the domain expertise and the partner needs to help from Verint. And we compensate our sales force accordingly. So the focus that I have is on expansion and growth.

And whether we do it on our paper -- on a partner paper is much less important to us..

Understood. I'll pass it along just for sake of time, but congrats on completing this spin successfully and on the strong cloud growth..

Our next question comes from the line of Dan Bergstrom from RBC Capital Markets..

Nice to see the conversion of the base and commentary around it. You talked about the decline in perpetual in Q&A here in response to Paul. But what are the thoughts around a perpetual tail? I would assume some customers want to remain on-premise.

Does that $100 million mark you talked to or kind of the fiscal year '23 number, is that a good proxy for it?.

Yes, I think it could be a little bit more than $100 million at this point. But we definitely see decline this year, which is baked into our guidance, and we see this levels off sometimes next year. So that's a good model.

I think that over time, perhaps in the very kind of longer than 3 years horizon, I think that the very large customers will also convert. Perhaps they'll convert it to their own internal clouds. But it's pretty clear the whole industry is going to cloud. But there are certain customers definitely, at this point, told us they're not interested..

Great. And then you mentioned increased innovations with the cloud platform and talked to the addition of engagement, data management, workforce scheduling, real-time agents.

Just how should we think about those products ramping? Are you seeing initial interest here? How should we expect the pace of innovation, I guess, more generally with the sole focus on customer engagement and the cloud platform now?.

We are innovating, and we'll continue to innovate faster in our cloud platform. It is the nature of the technology and our control over the cloud environment that allow us to release more innovation faster than when you work with a very large on-premise environment.

And you have to invest a lot of the technology stack to be comparable with different data centers that customers have. So it's one benefit of the cloud platform is just be able to focus more on innovation and bringing new capabilities to the market.

I think that another benefit of the platform is we concentrated our AI and analytics engines into what we call the Verint Da Vinci AI and Analytics, which is part of the platform. And you know that we had a lot of strength in this area for many years.

This is the heritage we also shared with Cognyte when they were part of Verint, very deep analytics for security and for customer engagement. And building this AI modeling into the platform basically allow us to share the technology across all applications that are running in the platform.

And another way to accelerate the innovation is having access to the latest AI. And we think our AI is differentiated because we manage a lot of data. There's a lot of interaction data and experience data that goes through our platform with our strength in data management and experience management.

And out of the data, there's a lot of machine learning that helps to bring new innovation into all the different applications around what we call the work of the future, changing the workforce, putting more automation into workflows to make the workforce more efficient.

So if you look at real-time agent assist, which we -- which I discussed earlier, definitely with employees working at home, there's increase in demand for real-time assistance or in-the-moment assistance system and guidance to employees.

And this is all based on AI, based on the ability to do acoustic and linguistic modeling and alert agents that, "Look, you speak too fast and the customer is frustrated." Or, "You're pausing for too long." Or, "You're overtalking the customer." Or, "Here's the customer intent and you're not really answering to the point." And the ability to do this in the moment across not just voice channel, but also chat and messaging and text channels, is really part of that innovation that we are now accelerating.

So we're very excited about the cloud platform is not just a business model, but it's really an opportunity for us to address some of these customer urgent needs for help. Because of the digital transformation, the number of interactions going up exponentially. There's more digital channels, there's more digital interactions.

But it's only limited people and resources to address this growth in interactions, and there's a clear engagement capacity gap that I mentioned before. And the answer is obviously automation, which is the focus of our cloud platform..

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Matt Frankel for any further remarks..

Great. Thank you, everybody. Thank you for joining us. And we look forward to speaking to you again soon. Have a good night..

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day..