Gregg Swearingen - Teradata Corp. Victor L. Lund - Teradata Corp. Stephen Mark Scheppmann - Teradata Corp..

Wamsi Mohan - Bank of America Merrill Lynch Andrew Kisch - Barclays Capital, Inc. Bhavan Singh Suri - William Blair & Co. LLC Abhey Lamba - Mizuho Securities USA, Inc. Jesse Hulsing - Goldman Sachs & Co. Ed Maguire - CLSA Americas LLC Karl E. Keirstead - Deutsche Bank Securities, Inc. Greg R.

McDowell - JMP Securities LLC Brad Reback - Stifel, Nicolaus & Co., Inc. Jerry Yuan Liu - Morgan Stanley & Co. LLC Rakesh Kumar - Cowen & Co. LLC.

Good morning, my name is Carol, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2016 Teradata Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

The question-and-answer session will be specific to the Q3 financial results today. We also request that you only ask one question. I would now like to turn the call over to Gregg Swearingen, Vice President of Investor Relations..

Good morning and thanks for joining us for our 2016 third quarter earnings call. Steve Scheppmann, Teradata's CFO, will lead the call this morning and will discuss our Q3 financial performance, as well as our full year expectations.

Victor Lund, Teradata's CEO, is not on the call today, but has prerecorded some comments, which we will hear before Steve begins.

We will not be addressing our strategy on this abbreviated call this morning, in order to more properly describe our transformation in detail at our upcoming Analyst Day, which will be held on November 17, at our R&D facility, which is located just north of San Diego.

If you have not yet registered for our Analyst Day, you can find information regarding that event on the Investor page of our website. Our discussion today includes forecast and other information that are considered forward-looking statements.

While these statements reflect our current outlook, they are subject to a number of risk and uncertainties that could cause actual results to vary materially. These risk factors are described in Teradata's 10-K, 10-Q, and other filings with the SEC.

On today's call, we'll also be discussing certain non-GAAP financial information, which excludes such items as stock-based compensation expense, asset impairments, acquisition and reorganization cost, the Marketing Applications business which was sold on July 1st and other special items.

We will also be discussing other non-GAAP items such as free cash flow and constant currency revenue comparisons. A reconciliation of our non-GAAP result to our reported GAAP results and other information concerning these measures is included in our earnings release and on the Investor page of Teradata's website.

A replay of this conference call will be available later today on that site. Teradata assumes no obligation to update or revise the information included in this conference call whether as a result of new information or future results. And now, we will hear from Vic..

Thank you, Greg. Good morning. It's a pleasure to be with all of you today. I am pleased with our results. Our revenues were in line with our expectations and our non-GAAP EPS were better than we expected.

Particularly proud of these results given that our team is undertaking a huge amount of change as you can imagine, as we focus on our new strategy going forward. So, I'd like to thank all of the Teradata folks for the great efforts you've put forth and look forward to you doing the same in the fourth quarter.

Our team as you all know, is engaged and we are riveted on getting our strategy fully implemented and executing it starting at the beginning of the year. Our three major tenants have not changed. We continue to focus on business analytics, ecosystem architecture consulting and hybrid cloud solutions.

This leverages our strong technology foundation that our customers rely on today. We are transforming our go-to market approach, focusing more on our largest opportunities and concentrating primarily on driving business value for our business users.

That is important for us as we look to the new Teradata because our customers are becoming increasingly interested in business outcomes supported by strong technology, as opposed to starting with technology and trying to find business outcomes that support those.

We have been successful, obviously, in managing our cost, as you can tell from our better than expected non-GAAP EPS for the last quarter. This will help us pay for some of the investments that we are going to make as we go forward to build and support the new Teradata. As you know, I'm not on the call today. My portion is being pre-recorded.

I am in San Diego with our team working on the operational factors that are necessary to make sure our strategy is successful. I felt given that we are going to be together soon, my time would be better spent here driving our strategy and our operational impacts forward than they would be on the call.

I will be with you all in two weeks and be prepared to take any and all questions along with our team. With that, I'll turn it over to Steve. Steve, up to you now. Thanks..

Good morning. It's an exciting time at Teradata, but also a very busy time as we are working diligently to transform Teradata for a stronger future.

Vic is leading our transformation and is spending his time with the team making major changes, including how we go to market, pricing and deployment of our offerings, but most importantly, to focus on our customers who rely on Teradata to help them achieve quantifiable business value from analytics.

We will provide you with a comprehensive description of our strategic transformational growth imperatives and respond to your questions at our Analyst Day. So, today we'll limit this discussion to our Q3 financial results.

It was encouraging that our team delivered a solid quarter with revenue in line with our guidance range, and EPS better than expected, while our team is embracing and executing the significant changes we are making at Teradata.

My comments today regarding our operating results reflect Teradata's going-forward business on a non-GAAP basis, which excludes the Marketing Applications business for both 2016 and 2015. Stock-based compensation and other special items as identified in our earnings release are also excluded.

We have provided a non-GAAP view of our results on our website, which reconciles to our reported GAAP results. We've also provided a new multi-period historical schedule on our website, which provides our non-GAAP results excluding the Marketing Applications business, reconciled to the GAAP results for each period.

We reported revenue of $552 million in the third quarter, which on a comparable basis was down 3% from Q3 2015. During Q3, we began to see increased activity associated with our subscription pricing programs.

Specifically, estimating the perpetual equivalent of the subscription-based transactions in Q3, 2016's Q3 revenue would have been slightly higher than last year's Q3. Compared to Q3 2015, product revenue was down 10% in both reported and constant currency.

Consulting revenue was flat or up 1% in constant currency and maintenance revenue was up 5%, up 4% in constant currency. Revenues in the Americas region decreased 9% as reported, 8% in constant currency, as customers continue to evaluate lower cost, but lower performing alternatives as well as Teradata's new deployment options.

Revenue from our international region increased 6% in both reported and constant currency. Within international, EMEA revenue increased 16% as reported, 20% in constant currency, led by solid growth in Eastern Europe, while APJ revenue decreased 5% as reported, 10% in constant currency, primarily in Japan and China.

Product gross margin in the third quarter was 65.4%, a 510 basis point increase from 60.3% in Q3 2015. The increase in product gross margin was primarily due to favorable product and deal mix, as well as less amortization of capitalized software development costs. Services gross margin in the quarter was a solid 47.1%, compared to 47.9% in Q3 2015.

Overall gross margin was 54% in the third quarter, an increase from the 53% in the third quarter of 2015. Turning to operating expenses.

SG&A expense of $134 million was down $14 million or 9% from $148 million in the third quarter of 2015, primarily due to our cost management actions to align the investments to the areas that will drive sustainable revenue and profitable growth in the future, and help fund the investments we are making to support our transformation.

Research and development expense, on the other hand, was up 17% to $42 million versus the $36 million in the third quarter of 2015. We are increasing and will continue to increase our investments in R&D to enhance Teradata's future profitability. In Q3, we began to compare with prior-year periods when we started to rationalize R&D spend.

So, although year-to-date R&D expense was down $10 million or 8%, we expect a meaningful increase in R&D expense in Q4, largely due to the effects of capitalized software, which will result in a slight increase in full year R&D expense year-over-year.

Total R&D expense for the third quarter, which includes R&D expense, plus the additions to capitalized software development cost from the cash flow statement, less capitalization of internally-developed software was $58 million versus $55 million in 2015.

Total expenses in the third quarter was $176 million, down 4%, even with the 17% increase in R&D expense. As a result of all these items, operating margin for the quarter was 22.1%, a good improvement from the 20.6% operating margin in Q3 2015.

Our non-GAAP effective tax rate for the third quarter was 24%, lower than the 26% non-GAAP tax rate in Q3 of 2015. The reduction in the effective tax rate year-over-year is a result of an increase in forecasted foreign earnings mix period-over-period.

On a year-to-date basis, our non-GAAP effective tax rate was 27% or flat compared to the same period in 2015. We continue to expect our full year non-GAAP effective tax rate to approximate 27%, with the actual tax rate being dependent upon the ultimate earnings mix.

Non-GAAP EPS of $0.69 was a meaningful increase from the $0.60 in Q3 2015, which was primarily due to our ongoing cost management initiatives. Turning to cash flow, net cash provided by operating activities was $45 million in Q3 2016 versus $68 million in the third quarter of 2015.

Year-to-date, cash from operating activities was $395 million versus $370 million generated during the same period in 2015. The fluctuation in cash from operating activities on a comparable basis, both for the quarter and year-to-date was a result of timing differences relating to net working capital period-over-period.

In the third quarter, we had $33 million of capital expenditures, including capitalized software versus $35 million in the third quarter of 2015, resulting in free cash flow of $12 million versus the $33 million generated in Q3 of 2015.

Free cash flow for the nine months was $309 million versus the $276 million generated during the same period of 2015. Keep in mind, our investments to support our transformation will increase in the fourth quarter and more meaningfully in 2017. As a result, we are likely to have a negative free cash flow in the fourth quarter of 2016.

We expect full-year free cash flow to approximate $290 million. Moving on to the balance sheet. We had $988 million of cash as of September 30, 2016. This is up from the $909 million at the end of the second quarter of 2016 and up from the $874 million from September 30, 2015.

Of the $988 million of cash, substantially all was held outside the United States. At the end of the third quarter, we had term debt of $578 million. We have no outstanding borrowings on our $400 million revolving credit facility which gives us short-term borrowing flexibility.

Turning to guidance, and this will be sensitive to the rate of customers' adoption to our new subscription pricing programs and cloud. We expect Q4 revenue in the $620 million to $640 million range.

As we saw in Q3, some of our larger customers have started to move to our subscription pricing programs and our cloud offerings, evidenced that these programs and product solutions are resonating in the market.

Although this is a welcome change and at the core of our transformational strategy to drive more consumption of Teradata, this type of shift in purchasing option, results in our expected revenue for the quarter to now be approximately $40 million less than previously anticipated.

We expect non-GAAP EPS to be approximately in the $0.57 to $0.62 range in Q4, which will include the impact of our increased investments for our transformational initiatives.

We expect operating expenses to decrease approximately $10 million year-over-year in Q4 with R&D expense anticipated to be up $15 million or 37% year-over-year, and up sequentially $12 million or about 30% from Q3, with software capitalization as the largest driver of the expected increase.

Although year-to-date, we have performed very well in terms of EPS improvement and our full year expectation for non-GAAP EPS is now at the higher end of our previous guidance range of $2.35 to $2.50.

Although we will begin to see the financial impact of increased investments for our transformational initiatives in the fourth quarter and again, in a more meaningful way in 2017. And with that operator, we are ready to take any questions related to our Q3 financial performance..

Your first question comes from the line of Wamsi Mohan from Bank of America Merrill Lynch. Please go ahead..

Yes. Thank you. Steve, it sounds like you had about a $12 million hit in revenue in Q3 based on this change to subscription and cloud, and talking about $40 million potentially in Q4.

So, can you help us think through how you're approaching this, from what percent of your install base have you approached? And are people doing this change as their current contracts are coming up for renewal, or is this happening at sort of a different pace? Can you just dimensionalize maybe for us how we should think about how much – from what point in Q3 you started to offer this?.

Yeah. Wamsi. Yeah, it was really started in early part of Q3 as we rolled out the subscription pricing programs. And it's more targeted to unique customer requirement or options that they're looking at as they continuously evaluate their hybrid cloud environment. There's no one inflection point that we're focusing on across the board.

It's basic – it's very specific to what the customer wants and what the customer needs, and giving us the flexibility with a lot of different options to meet those needs – meet those customer needs.

And what we saw in Q3, yeah, the number was closer to the high-teens for the quarter, that would've put us slightly above the $568 million last year on revenue.

And that number encompasses – and the same with the $40 million in Q4, encompasses both customers going from a perpetual pricing strategy model to a subscription model, and also customers moving to the cloud. So, it's made of both of those, which are more usage-based or time-based pricing models. Thank you, Wamsi..

Thank you..

Your next question comes from Raimo Lenschow from Barclays. Please go ahead..

Hey guys, this is Andrew Kisch on for Raimo.

Could you give us some color, how do gross margins change under this new pricing model? Should it be more or less the same, or is there some timing impact that could be making gross margins look better or worse? And was there any impact from that this quarter, just given the strength that you had there? Thanks..

Yeah, Andrew. Let me say first, we'll get more of that at our Analyst Day in three weeks here. But let me give you a little overall look at our pricing strategy when we look at these product – these solutions. And our pricing strategy is really focused on enabling our customers to quickly and easily deploy Teradata across the platforms.

So, we really wanted to address this based on their evolving hybrid cloud analytical environment or needs. And the most important part of our strategy is we want to maintain the integrity of our gross margins. So, we'll walk through at our Analyst Day how these models will impact our future view of Teradata's financial business model.

But at the core, underlying our strategy is we want to maintain the integrity of our gross margins as this rolls out. And so, we'll get a little more detail at our Analysts Day..

Okay. But maybe for this quarter, was there any impact from that piece of the....

Nominal in the quarter, Andrew, nominal in the quarter. And what I'm looking at in the fourth quarter and for the year, that our product gross margins for the year would approximate 60%, right in line with what we're looking at at the beginning of the year. So, Q4 will be slightly down from that 60% to level out to that 60% for the year.

But that Q4 number being a little lower than 60% is really relating to the traditional deal mixes that we have in our funnel. So, nothing significant – no significant impacts on the subscription pricing models or the cloud..

Got it. Thank you..

In Q4 and 2016..

Cool, thank you..

Your next question comes from Bhavan Suri from William Blair. Please go ahead..

Hey, guys. Thanks for taking my question. Just turning to – to stay on the gross margin line, but turning to the services and maintenance gross margin. Obviously, maintenance was up a little bit – little down sequentially, but that's fine. Consulting sort of declined dramatically both year-over-year and then sequentially.

And I was wondering why that was. And then why that wouldn't have a positive impact on services gross margin given that consulting gross margins are materially lower than maintenance gross margins.

So, Steve, maybe some puts and takes there and how that looks for Q4?.

Yeah, Bhavan, my first thing would be to look at it on a non-GAAP basis ,excluding TMA. We factored out on that non-GAAP, we took TMA out of both 2015 and 2016, and there's a new schedule that we have out on the website that identifies those changes or that pro-form view. From an overall perspective, consulting was flat.

And the margins were relatively consistent, but we continue to invest in the – how should I define it, the cloud architecture for – the infrastructure architecture for the new environments, new solutions. So, there is continue – we're still investing in bench, I call it the bench on there..

But that would be services, right, that would be COGS, right?.

No, that would be in the services side, on the consulting side. This was at the whole Think Big acquisition where it had that analytical that architecture consulting, that's very agnostic to the Teradata solution, it's very open-source and its business value consulting from an architectural perspective..

Got it. Okay.

And then just the Q4 guide on that?.

Oh. Yeah. Go ahead.

What?.

Q4 – yeah..

No. I mean, everything in line, nothing unusual on the services margin in Q4. I'm still looking at the services margin at an overall basis to be in that 47% range. So, really nothing distorting that..

Great. Thanks, Steve.

Thanks, Bhavan..

Our next question comes from Abhey Lamba from Mizuho Securities. Please go ahead..

Yeah. Thank you.

So, in the accounts where subscription revenues kind of saw adoption, was it cannibalistic to your capacity additions under previous model, or did it open the doors for some new workloads? Just trying to see if it is driving workload growth or unleashing some pent up demand for now?.

No, Abhey, our objective is always to drive increased consumption of Teradata, and making our solutions easier to digest to drive the increased consumption. So, there have been in those situations where the customers have increased the consumption of Teradata, and that's the objective.

The other side, not increasing consumption that would be the exception. So, I'm not seeing anything skewing to where it's just replacing or cannibalizing our existing consumption footprint.

It's been more to be able to drive increased consumption through these offerings, and working with the customers to really drive additional business value and address their needs. So it's safe to say that for the activity that we see and that's in the funnel that is adding to the consumption of Teradata..

Got it. Thank you.

And my quick follow-up would be, how the subscription pricing compared with the pricing for similar capability in the appliances world?.

Yeah.

And again, we'll get more into that strategy at the Analyst Day, but we want to, again – in that pricing structure, we want to make sure that the pricing across all of these solutions through the hybrid cloud, this new hybrid cloud to make it easy for the customer to deploy Teradata across all of the platforms, and not be skewed to any one particular pricing strategy or pricing of a solution.

So, again, we're working very diligently to make sure that that pricing integrity holds all the way through Teradata Everywhere..

Thank you..

So, thanks Abhey..

Our next question comes from Jesse Hulsing from Goldman Sachs. Please go ahead..

Yeah. Thank you guys for taking my question. Steve, I'm curious, are you billing the subscription contract annually upfront? And if you are, deferred revenue was a little soft quarter-over-quarter versus prior Q3, I'm wondering why that wouldn't be showing up there.

And do you expect that deferred revenue to be – growth to be good indicator of your billed and recurring revenue?.

Yeah. Then what we're looking at as on the strategy on that is when we give you the key metrics at the Analyst Day, we're looking forward and kicking around this deferred revenue and unbilled revenue associated that'd be basically the unbilled contractual revenue to really give you a complete view.

Because right now, again, with the limited number of transactions that are gone to the subscription, again, it's more unique to the customer. So, it could be billed on an annual basis. It could be billed on a quarterly basis. And so, it's really not driving any significant changes in our deferred revenue.

But just I want to have you keep in mind that the change in deferred revenue this year, you have to factor out the TMA effect and that was $30 million in deferred revenue, I believe in the quarter – I mean, not the quarter, the year-over-year and balance sheet.

But again, to your earlier point, this is a key metric that we're kicking around this deferred revenue plus this unbilled to give you that total picture of that backlog revenue on the balance sheet and off the balance sheet..

Got it, Steve. Thanks..

And I think what you'll find in the quarters that TMA is really distorting it, Jesse..

Got it. Thank you, Steve..

Our next question comes from Ed Maguire from CLSA. Please go ahead..

Hi. Good morning. I was wondering if you could provide a bit of color on what types of customers are choosing to go for subscription or cloud options.

And whether this is informed by certain competitive offerings or maybe a preference for some of the big data solutions that you offer as well?.

Yeah. Ed, thanks. And before I get into that question, let me – Gregg was just saying, hey, TMA, it's a Marketing Applications business. Just to – if there's anybody online that's not familiar with TMA and I apologize on it. But, Ed, to your question. It is across the board. We're in the early days, but it is our large customers.

I mean, it is our large customers that are evaluating those solutions. And so, that's what really makes me encouraged that these solutions are resonating in the market because it is our largest customers now that are coming to us and saying, this is a great opportunity for us. This is the right time we want to evaluate.

And it's not necessarily just big data-driven. It's really looking at their entire architecture, their entire ecosystem, and say how can we leverage this to really drive towards our hybrid cloud analytical environment.

So, that's what gets me excited about these solutions, these pricing programs and also the solutions from managed cloud, public cloud, on-premise cloud, that our larger customers are embracing these opportunities..

Great. Thank you..

Thanks, Ed..

Our next question comes from Karl Keirstead from Deutsche Bank. Please go ahead..

Thanks, Steve. On an ex-marketing basis, Teradata has now put up I think five consecutive quarters of a year-over-year decline in operating expenses. On the last call, you mentioned that OpEx would be up, actually, next year.

Do you still stick to that guide or is that under revision, and we'll hear an update at the Analyst Day?.

Yeah, Karl, you'll hear definitely an update at the Analyst Day, but I'll give you a little bit of background what you will be seeing or hearing, is that, no, we are continuing to make investments, aligning those investments with our long-term and our short-term strategies.

Those investments will continue to be evaluated and challenged from an internal rate of return perspective, but we're going to be adding new sales people in the go-to market, with our business focus. We're looking at adding sales people and cloud expertise through sales and R&D.

So, the investments that I'm seeing coming through to effect the strategy may be significant in 2017. But again, we continue to evaluate our current cost structure and continue to be very diligent in reviewing those and looking at those tradeoffs.

So, it continues our strong cost management philosophy, and that helps us fund these investments, but those investments may be significant in 2017. And I'll share more with you at that time..

Okay. Thanks, Steve..

Thanks, Karl..

Our next question comes from Greg McDowell from JMP Securities. Please go ahead..

Great. Thank you very much, and another subscription pricing question. One question I'm getting a lot from investors is, as you mentioned, there are multiple flavors of subscription-like pricing. I mean there's the Database as a Service. There's the Teradata Managed Cloud. There's Teradata on AWS or Azure.

And of course, you have Teradata on-premise customers adopting sort of term-based or subscription-based licensing.

And without discussing too much the forward-looking commentary, could you at least talk about what you saw in Q3 in terms of all those different flavors and what you're seeing early on in that shift, what's happening? Is it more cloud subscription first or should we think about it as being more on-premise conversion first? Just maybe thinking about a rank order of those different multiple flavors of subscription? Thank you..

Yeah, Greg. It's more on-premise first, really looking at how they can optimize their spend to drive more consumption of Teradata to meet their internal users' needs and drive more business value. So the first one is that on-prem. And the second one I would say is our Managed Cloud. And we see continued interest in that Managed Cloud offering.

So, those would be the two – we just came out with MPP on AWS in Q3 and we do have now larger customers evaluating that solution as part of their hybrid cloud solution. And so, again, you'll hear more of that in the strategy at the Analyst Day, but that's how I'd characterize the activity in Q3 and what I see the funnel in Q4..

Thank you..

Thanks, Greg..

Our next question comes from Brad Reback from Stifel. Please go ahead..

Great. Thanks very much. First Steve, thanks for getting up early and joining us this morning. And secondly, did you guys make any adjustments to the go-to market in the quarter around sales comp to help push or begin this push to subscription? Thanks..

Yeah. Brad, we've always had – to answer it directly first, is that we have not made any wholesale changes to the comp structure during the year. But our objective in 2016 was to really keep it comp-neutral to the sales person to drive the right solution for the customer.

So again, out there, our sales people know that they'll be treated fairly with the compensation strategy driving the right solution for the customer. And we're working on our comp programs to really align them entirely to our strategy, effective 1/1/2017, and it'll continue to be an evolving process.

But again, we have had these offerings in the past, they were more unique to particular sets of customers, so we understood the economic dynamics of those transactions for our customer and for our sales teams. And we kept it to be very comp-neutral to them to drive the right solution for the customer.

So, again, we'll be continuing to refine those and rolling those out in a more specific way, start of 2017..

Great. Thanks very much..

Okay. Thanks, Brad..

Our next question comes from Katy Huberty from Morgan Stanley. Please go ahead..

Hey, Steve. It's Jerry on for Katy. Another question about the sales force. Can you expand a little bit on the go-to-market realignment that you guys are working through. How much have you done and how much you plan to do this year, while most of that begun before the start of next year.

And in your guidance and even in the quarter, do you bake in any potential impact as you go through this realignment? Thank you..

Hey, Jerry, yeah, we did the – the alignment was actually done in December of 2015 where we – it's particularly in the U.S., the Americas markets, where we realigned from an industry focus to a more geographical focus. That was a very significant realignment and that was completed and put into place the beginning of this year.

We are not anticipating any other significant realignments going forward. We're working within that geographical structure. But what you'll see as we continue to evolve in our go-to-market, we will align existing resources and we're looking at hiring additional resources in the cloud area.

And again, we're aligning our resources – continuing to align and refine our resources back to that geographical model that we put in place at the start of 2016.

So, no significant realignments in 2016, and I'm not factoring in any – again, because there's no significant realignments, there's no unusual activity that I'm forecasting or out-looking in the Q4 2016..

Okay. Thank you..

Again, on our Analyst Day, you'll hear more information on our go-to-market strategy..

Our next question comes from Derrick Wood from Cowen & Co. Please go ahead..

Hi. Thanks for taking our questions. This is Rakesh Kumar sitting in for Derrick.

I was hoping if you could provide some additional color around largest customer shifting to subscription pricing, what percentage of top 50 would you characterize as having shifted to the new model? And if it is more skewed in the U.S.?.

Yeah. Again, we're at very early stages. It is our larger customers that are evaluating those alternatives. But there's no – I can't come up and say there's a particular trend. It is predominantly with our larger U.S.-based customers, but again, we're not restricting these types of solutions just to the U.S. customers, it's on a global basis.

So again, very early stages. You'll hear more on our assumptions behind those conversions at the Analyst Day and how that would impact our long-term financial model..

So, thank you. Although the last few years – I just want to share a couple of words here in closing. Although the last few years have been challenging for Teradata from a revenue growth perspective, our technology, again, remains unchallenged in the market and highly regarded by our customers.

The key element of our future success is to drive more consumption of Teradata, no matter where or how deployed, in the public cloud, in our managed cloud, or as a subscription or on-premise. We are also emphasizing our ability to generate quantifiable business value for business, users and our customers.

This is something that has become less of a focus for the last few years. Going forward, we plan to become more business outcome-led and technology-enabled. We have a great foundation in our technology, our customers and most importantly our people to support our strategy and everyone is passionate on a renewed focus of winning.

At the center of this focus is alignment and execution. Our long-term strategy, which you'll hear on our Analyst Day, aligns with our clear vision. Our current year operational imperatives are aligned with our long-term strategy.

All of which will be measured by actionable metrics to drive consistent execution and accountability across the organization and drive business value for our customers. Again, we'll provide more information on all these actions at our Analyst Day on November 17, and I look forward to seeing you there. Thank you..

This concludes today's conference. You may now disconnect..