Progress Software (PRGS) 16 Jan 242023 Q4 Earnings call transcript

Good day, and welcome to the Progress Software Corporation Q4, 2023 Earnings Call. [Operator Instructions] After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your speaker, Mr. Mike Micciche, Senior Vice President of Investor Relations. Please go ahead, sir.

Okay. Sherry. you, Thank have to us again. It's you nice with joining afternoon, financial Software's Progress and results for everybody, thanks us fourth call. for Good conference fiscal quarter XXXX

plans, On statement.During Officer.Before future we Yogesh started, let's outlook afternoon forward-looking and cost be and represents me for initiatives other our Folger, we risks get strategies, the Safe will operating financial over and our and Harbor might Such Anthony performance, and information Financial of is President outlook considered Software's call, CEO; product are Chief our forward-looking. go as line today information with corporate Progress this that uncertainties. only Gupta, subject and guidance and this to discuss

our filings refer in indicated. call included And assumes forward-looking a measures, note Risk Factors in the the with no this results, the call. non-GAAP please figures referenced Commission. For the obligation may of description Progress otherwise our to statements unless on this are and risk that financial Securities Exchange factors update Software all the please to affect additionally, that

data that supplemental you metrics. recommend to financial for our contains financial providing results our specific find a for GAAP highlights can financial document in reconciliation You close of XXXX market press measures non-GAAP fiscal is after reference results, it that additional our today contains results related issued which the presentation additional figures release, was also our the and I fourth information directly most fourth and XXXX, of and to the This financial on quarter a comparable details.We've quarter prepared for these website.

will over are Yogesh, our will our and the investors.progress.com. release today's of to way, the website available and in on the be of call Relations As I Investor available turn via mentioned, out on both earnings I'll of section Investor recorded entirety replay with it conference the Relations Also website.So its at that section be supplemental you. the presentation

conference provide robust. especially the was Thank our good great year demand the Sitefinity. we was 'XX OpenEdge, fourth performed. proud from at and for then through strong revenues Call.Fiscal how and teams by highlights year thank everyone, for stable all many our come. ARR everything financial a one afternoon, and extremely year year-over-year. Mike, and quickly you you another XX% some DataDirect look take of of past of quarter joining grew to marked products, our for and accomplished I'm Top million another you, results ongoing QX remained $XXX 'XX I'll Progress. line The

Our net retention expectations. rate was were our well a solid margins XXX% and operating above

end of with processes. result For January a flow a share XXXX we add the the our This said over on that million integration of announcement continuous integrate. for would we began full integration in fiscal take would to improvements $XXX XX%.As year million with million you acquisition. finished MarkLogic that of of recall, cash the over free we generated the MarkLogic adjusted and the of margins $XXX acquisition revenue operating in At year, the fully and of XXXX. every I'm in delighted the annual made was completed was MarkLogic milestone year about the that we direct $XXX to have integration virtually revenue before faster time,

separate unique the our instance, help maintain from further a us entity always, will accommodate to requirements we As of various the federal agencies MarkLogic that to new for customers. we learnings had gained acquisition who future.For improve U.S. the are the

our a portfolio. their it vehicle this we have broader expand needs wider of relationships entity, serve product our not only to see we through Now as existing customers, that addressing these to a but by set

innovation success.So, and total customers our well addition products, on pillars our products our other our value focus made are improved the customer turning unrelenting in executed time growth of also even In we an X sustained for our on to FY 'XX, the to We in innovation to to strategy, M&A efforts which use. 'XX. and capabilities FY AI more added product easy to

availability for the which of new interface. capabilities. of and single debt database MarkLogic, with of features.The SaaS, we accessibility new product meaningful Event to which entire content rapidly NoSQL manage release into among We of their to metadata and our new AI-powered faster, and rapidly semantic activity.We other launched customers. personalizing AI XXX, Sitefinity enable user customers by for which We Generative we various out products we've targeted and leading versions to network and and launched of the for of content suit scale into in host administrators latest sense a build value a Contextual from our provides of ability reactions product, example, to very support received content For malicious include we and our our rapidly to and to performance SecOps needs And making updated the unstructured insights incorporated acquired data. early the realize components LoadMaster whole products marketing improve enables and automatic creators delivered tools applications to standards released production Threat new environment provides personas. our Semaphore products data-driven Flowmon analysis embedded DevOps positive structured with from possible are the These Chef Analysis

in FY pillar unrelenting As is the and total included mission-critical is and on experiences to innovation, for a develop effectively Progress manage events of third customer their increasing customers is numerous focus organizations deliver in-person success. globe local more new and years couple the of slow IT the kinds These to embrace Tour. what 'XX, our of cloud in-person help them deploy OpenEdge well of to positioned to sources their data than activities, AI, an World we business was as value hear forward. help to had In XX portfolio and how propel after now data We platforms, live and as in-region our OpenEdge better broader platform over applications customer OpenEdge growth X,XXX and strategy and Progress all necessary, continuing across attendees addition our events. expanding portfolio scale called hosted their the exponentially joined infrastructures.In of M&A the the us

well We our conferences on-prem, and attended where digital MOVEit environments.In We with and DevOps and help our in innovative with also hours vulnerability dealt dev efforts scaling ideas practices them multi-cloud SecOps their rapidly best customers' our efficiently MOVEit tools user a held across proactively shared hybrid and XXXX, customers patch also MOVEit cybercriminal environment. by on for the experiences sophisticated of and XX community harden the shelf and engaged developing engaging customers, we and to a attacks the zero-day group. in issued within multistage environments discovering Progress

have in amazing incredibly to work our to MOVEit the business want who are operations and regulatory our business customers move continue way and attack remained for our dedication, to with to work across customers incident cooperate and the to upcoming the our We investigating business to Form together and of the the help us. have updates forward. XX-K.I they our on and loyal continue come continue of with employees' thank we'll closely hard Because authorities provide impact our regarding our teams

lows, we our in the ENPS, mid-single was turnover employee of or digits a culture, Progress in Score do. mid-XXs. operations. and our run as is of customers at By In year. is everything XXXX, hitting employee our way, Promoter to the Employee at thriving evidenced which and industry employees at continue league our sell, Our are the Microsoft we this and They the Net build center sustain support same the half by products, in second Google.Once again, the service

that world, being to us best numerous helping energized are they our the awards the employees values, by and to with vision place Our and for mission, work. win continue share

year results improve of in highest Places I to Boston selected continue For Progress from row. software Massachusetts time, We moving on ranking the 'XX one processes We our for excited X contribution #X Top about sustainable in that this, and year foresee Work a accomplished XXXX, become And ahead. of as 'XX, the all products will are efficient, I'm example, acquisition FY to 'XX. and systems delighted towards date revenue the internal third we this our our again, company am XXXX.Now from for spots forward ranked delivered FY more the lies the full be what incredibly it for Globe, and integrated largest up in fiscal list. to demand outstanding MarkLogic. even to looking first

years. over expect shareholder we operating way to explain it to to us and value million remain for propel last expand proven the will we to total same our also in growth in have our $XXX focused strategy on help margin. revenue his several We Anthony create the As guidance,

for sustained prioritize to way continues policy as investors. our we it generate allocation because capital return to best see Our M&A the shareholder

factors to are have when among in We to in market well ever reiterate market. the comes strict acquirer M&A also our Competitively extremely continue reputation it continues in and been grow.I as unwavering noted, as an sellers active we our therefore to of M&A the want we to as that choice are M&A. discipline we positioned previously as are financially, shift our and for And favor. we've

First, retention great revenues continue high culture. terms and in companies products fit with looking customers, we technology, a for and and good will of pursue companies to size are We're that recurring rates.

for say, we're unicorns, to to great looking As I like looking we're workforces. not buy

and companies our extremely be offset we shares how higher existing what as about repurchase debt flow programs under that will for value. whenever and disciplined and meaningful excess share and practices lastly, repeatedly demonstrated, we And we we will repay dilution pay integrate drive we accumulated to we acquired shareholder to continue we businesses it margins.During year, repurchase cash knowledge, Second, authorization. to will finance have create our we best to use ensure have experience to these rapidly from possible the equity the using expect we

investment am conclude, FY Anthony rates.To details excited over and in of turn pleased will retention come to is With addition with that, continue will on continue I'll and to guidance. more around it customer and provide around additional success, performance, results margins, X to to I customer other also we ARR M&A, to and we innovation what pillars the Through to execute 'XX FY growth our efforts drive and higher innovation our our total I'm success. Anthony? even about strategy, operating our in strong high extremely In 'XX.

Thanks Thanks, joining Yogesh, and good our everyone. call. for afternoon,

best and the MarkLogic include results growth products, The basis basis. X% on year-over-year our of forma performance. pro which by strong approximately MOVEit represents of almost products be QX was DevTools ARR OpenEdge, metric ARR with a addition and our very right growth rates clear, XXX%.In to in in the provides To was by both net strong As and Yogesh results again fourth strong bolstered and MarkLogic, into driven retention start I'd periods. quarter closed every pro Sitefinity, a to a including multiple quarter XXXX.Diving above growth ARR, the to guidance view the million, in which September of strength were We million back high ARR, revenue pleased year-over-year our forma represents the we with numbers, just growth year-over-year end was provided deliver a in $XXX of we ARR believe $XXX mentioned, on across and approximately for underlying like the range basis. fiscal the on such XX% close to we're QX XX% into

Our was outperform by multiple OpenEdge, strong quarter to revenue which products our continues performance led driven by expectations. in the

XX% a line with growth products. grew $XXX contribution, rates driven strong growth customer line Sitefinity, DevTools now retention by growth For other year, million of expenses. XXXX, growth our top the MOVEit year.Turning $XX number OpenEdge, for the demand products, we're represents over to fueling million our LoadMaster, for MarkLogic's With multiple and the strong products, This remaining across most and environment with was combined notably, our top and results prior a full throughout by of year. revenue thrilled

expectations. the XX% compared full Our fiscal to total top of while Operating operating the internal addition result overperforming full almost increase XX% quarter, to both in costs of for and business. for MarkLogic better-than-expected on $XX was over and the our year, to the XX%, and for managing year-over-year The expenses $XXX margin our year for of million for the was our driven $XXX the The expenses was XXXX. plan. quarter handily operating million an line, year the quarter quarter were performance the expenses the by up million operating up entirely income ago exceeding

coupled of driven with bottom MarkLogic of position earnings With ended $XXX by XX year or QX the used end top the with quarter. the of credit of $XXX performance, to strong for line, $X.XX million achieved fund the again year.Moving EBITDA On upcoming XXXX, bringing of fiscal guidance very business. $XXX net MarkLogic, of approximately of $XXX our planned the trailing days overperformance of fiscal and and that for DSO to position relative during balance to partially solid basis. on line leverage line were credit the range. quarter million. I'd for on ago our that ahead highlight debt was per net compared high at million short-term was also a cash revolving to end equivalents results the the debt down This line our the we cash on the few across of quarter, fourth all $X.XX of This share to XX-month represents the cost we expectations and of that a management investments the revolving flat paid balance sheet us a acquisition like X.Xx flow on well quarter the $XX We synergies million year. quarter again against the integration outstanding during metrics. the of virtually cash, for to million

but free million above was driven million with basis, discussion quarter by QX in our days the sequential into the well I a and in XXXX. reflecting fourth on coming for Adjusted million line flow the performance cash the my and quarter, was The approximately of we a slightly less quarter in reported portion the by in strong collection the expected, revenue top increase quarter. pushing we of was of DSO. significant sequential XXXX.Deferred reason end bookings $XX for it was timing was mentioned the in the which related cash the billings However, later up quarter, timing XX DSO $XX on the fourth in billings, early entirely of than as $XXX our at this is

quarter, million $XXX Progress with million ending repurchase to fourth of authorization.Okay. share under our bringing the current annual total our During we stock, year and repurchased $XX million remaining $X fiscal our

it's I when will Now, the And the our outlook. for outlook following. to in mind considering important keep to turn XXXX,

our of top product XXXX, year In products growth demand the a was remain XXXX First, for of lines. environment we line our across many to expect stable.

for to approximately XX months. Next, our MarkLogic results contributed XXXX

most quarter.Also, model Chef fair it's a recognized of approximately with term-based When revenue fiscal revenue line. a the other of our in MarkLogic's from of due fiscal represented contribution our that expect and model, that to we However, In the X/X business, will extent, our revenue of to XX% we in licenses. in XXXX, which MarkLogic's XX-month some didn't seasonality is XX% employ first on-prem say combined MarkLogic, mostly term-based an incremental contribution notably DataDirect, the to similar products, product MarkLogic that and under our to roughly XXXX annual second lesser model. top license see in occur comprised quarter be

contract As revenue any impact higher contracts quarter especially have results and in will significant renewals, on lower. a could result, multi-year skew our the a timing more given or of

continue cut driving the anticipate used is credit will that in therefore, to any final will, with we as continue XXXX, focus on line We highlight acquisitions, to a to to to we grow repay continue we'll at like level ARR ARR through The that a revolving expect the noise between the line that's and we X.Xx.With I'd $XXX point fiscal of XXXX. that consistent $XXX leverage absent ratio was generally way aggressively million $X.XX first to that we said, revolving by of down quarter XXXX, will per share of end $X.XX. repay of million to we net acquisition. and and approximately partially expect the expect all for earnings finance between MarkLogic the And fully and of revenue our credit, that XXXX,

to year of revenue growth of anticipate $XXX the For and the full for X% XX% XX%. million, representing million year, XXXX. between expect and an $XXX margin X% we operating over between We

are we million, to $XXX per flow $XXX and and We of free expect cash share earnings be adjusted $X.XX and between between million projecting $X.XX.

XX%, of year the million shares tax repurchase for and a million guidance in shares of $XX Our XX assumes approximately rate outstanding. the EPS full Progress

years M&A integration total returns growth we're XXXX. track with the to superior record reason, for over for that the the the across of activity past delivered in we saw We're of we allocation for we're to dividends future while our has it XXXX will X strategy.In and shareholders potential fourth with plans. the dilution XXXX quarter, share a continue our is to closing, equity questions. believe capital track how return, us And the for call can the good Our in provide priority deliver meant open board that, And address shareholders. all the and for beyond.With of and of I'd strong we to excited accretive continuation M&A that trend share buyback results be great positions our our buybacks from a to on disciplined thrilled a financial and like MarkLogic believe top deliver

Instructions] Thank the with line you. JPMorgan. first of come will Bora our Pinjalim And from [Operator question

Congrats I to you want MarkLogic. on quarter. ask the on

the to is Now base what contribution you're dollar have innovation that that know terms is And would for much, see? opportunity that Anthony, MarkLogic the but I like what MarkLogic seeing in for year? focus they full on as of don't customer from you you integrated base? cross-sell cross-sell that for hearing the there you are one And any from in MarkLogic,

then Anthony contribution talk So, can the about revenue I'll take part, 'XX. the first and FY in

The an bit as to it. longer start underlying bit and cloud One interesting really to and couple come really has fair out combined, value time and see. would a and of is a of product MarkLogic than to that value getting a database clear the that requires MarkLogic is designed things. it out work Pinjalim, So like it's of we Semaphore system

So, in coming just the for able accelerate process as the from ability with we've of year to of data-driven this start has working the scratch. an we've been actually be the product past track really team out to fast than to and on and option applications throughout folks sort add-on been to a create rather

So gotten take type was Semaphore of other that MarkLogic we're to of tremendously of Generative addressed use existing already have augment tools as potentially it request data about to they a from that data we actually innovation.The in out can innovation specific the make Generative go excited how their make and terms that that standard how their we've do and, that's type and are their there they that be of be answers AI AI to honest, the to without business, out environment. having something

we to easy of to internal leverage so folks it data sort created of offerings have non-hallucinogenic type that context, create and And answers. for around additional in relevant ChatGPT therefore, make business, their to their

done.In already to So, you Pinjalim, that. that are take do the build those to will we've we be see because these when said, things our business model shareholder business cross-sell the of we opportunities. of do cross-sell, without want we generate make on terms account not able X for -- as we relying That that we cross-sell sure know, into things, value

presenting creating experience applications job do easily. truly I products our data-driven a think and help MarkLogic of that customers more digital can much the information better

In our leverages track fast of offering fact, some those.

can apply business used our Corticon, from applications Chef.We augment applications be complex in also have and the which products data. for is decisioning that, kind which see SecOps product like these are their further see logic to these [ and they these environments, organizations large-scale to that a environments like companies opportunities ] to that need to we to addition are and of these capabilities also In engine math-logic DevOps by that

So, of to careful. there opportunities, are Pinjalim but be sort some been

going effort that starting and those. that offering them just are into customer We base of

value also and We Semaphore the have bringing of our to just started MarkLogic other own customers.

that opportunities be a this worth to call. in see on talking us if XXXX about those think will is something I year for materialize cross-sell

So, we frame. are time early in the

do acquired bit the when the And business, thought we that we mentioned a just that. $XX maybe year question, And million we in roughly little more. million XXXX. Pinjalim, probably of to take And was the business for it in $XXX second MarkLogic, would came they slightly had ahead

fiscal north just was of number. 'XX the $XX in So, million

Ittai next will the Instructions] Oppenheimer. come [Operator question Our line with from Kidron of

what sounds Yogesh, them earnings you, come. how potential give there? And since in are we're now direction us out the Maybe to 'XX? you I start literally acquisition odds of to year would MarkLogic, starting maybe M&A. you come a valuations on you in upbeat that with rate on want like you finally can call, the see update sounded very an last you for another It And the

So, right. absolutely Ittai you're

the We space. have been M&A very active in

are at We looking companies.

just not no for competing We're we we businesses them. to did that of said being really our criteria are actually enough, that we given solid have an to them And lot are interestingly of We meet seeing, wanted honest. because own a felt at any given where we 'XX. what confident will acquisition that in and we price, we FY to be are truly feel do they I

to make pipeline. understand really right? they about the I that, to good with thick as as about over to something But want of we the last we tango middle we've good. us been align feel with also second the feel feel feel had it to sellers yes, good We that that activity. of engaged, they have two We good We takes things. so have really 'XX have and sure been the that people really have and truly the they say, conversations feel well. we've Now of the And do in about meaningful, whenever FY half been

Ittai that in do we am 'XX. something I FY will So, confident,

of the caught but of growth it was that this year, to contribution expecting incremental not Anthony's quite on really And outside are -- the business enhancements to comments 'XX. you've gave portfolio, you the tying then core on like sounds side, in review financial on there's the with you a that the the interesting made MarkLogic X didn't

opportunities why revenue the first way to none back with just you portfolio, the no they to going the all AI think there of better to in experience squeeze more better core. bit there's Are Generative all Is a the guidance really for these. them on out enhancements, assumes question this? in Maybe the X changes the of to just I'm trying no monetize are So, generating? little growth enhancing?

question. and is Yes, a on-prem of really I 'XX. little the the -- this good sort renewals Ittai, term-based it's a mentioned bit Anthony. more timing Part And lot in it's model. of subscription the do contract business We have term-based of a within

And when and renew so the good those contributed that contracts growth I Multiple alluded of timing renew the to we we or demand also in year. had influence when expect they're But the last environment. stability will that ARR quarter-to-quarter. to again, fact products pretty to set the revenue growth

again, the would see relatively of 'XX. things a expect course I quarter-to-quarter, may with year, bit. growth. That's little So over But to consistent move the ARR

next come [Operator from will Instructions] of Our question the Fatima with line Citi. Boolani

was incident business. out strong was performance Anthony have of prepared saw. It you your for very had it remarks. contributing for factor the a was it appreciating MOVEit strength it responded. counterintuitive seems hear that call quarter. customers interesting for that it the an the Yogesh, in mean how to some to or to you that enough I was curious in as a I'm to it Either And almost

please. a counterintuitive that wanted ]. I little side a it follow-up, seems And because [ on sell to the unpack then I bit So, have just

be our with the done hear my have harden continue so. and as team and part we're set I can Obviously, continue But proud move been proud challenge positive of outcomes. issues add... we really From to Fatima. keep It's help answer from power of to want maybe from the forward, really a regulatory environment, MOVEit.Anthony, has have of we right, and perspective, being good what and issues. legal well. us. perspective, to we customer was incident a add our actually still to very customers it, done to of deal they their I'll positive customers lot really a unresolved a our am that and Anthony able been faced wonderfully to to do you, and everything huge of about customers it the loyal So, you in

I agree. No, would

can is And we in there to over think, of in 'XX. half pipeline close have, retention we plays the think continue performed eye up We the I held second of certainly how to keep deals. that I see make retention time. on year, half it we'll And an and fairly the want over measure -- rates of I 'XX. would remained we well, the but strong, first sure to want course a MOVEit out that right? the say

trends outcome dial make continue bit. at the was back the pipeline. So, the think I'll good very Yogesh our I we we're on the to very year, to little it And to build cautious. where to pleased wanting sure customers a can still say, a top on and with renewal line, also yes, still, I'll be conservative wanting I we're and would focused understand very say, one and are that but we're

So, I think it's held up well.

XXX a thinking of hood, this with the about net rates, rates consistent trends ARR talk as retention us you're tell year. quarter us to consistent what is get around to basis up good brought this the retention and underneath net my you about you since question see rate And segue did about point. retention question growth And the into we really spirit

dramatic. it's So, not

been operating ZIP You've XXX consistently. the pretty code XXX,

think to on as to rate net pull retention ask other some you of about retention so those trajectory sock, portfolio the lens. might commentary expect net rate speak, in maybe in [Technical you you the to the Difficulty] innovations up any So, Do share or XXXX? different prior be able

take I that. Yes. can Sure, Fatima.

half back And M&A. I this churn in control outside think of sometimes has factors before, think our the have of from are we time. time I like it's 'XX, Yogesh to that mentioned do

not any of using very X and of come out dip in year the half that global merged institutions particular integration. in did associated think small financial the was one we I there back with a party our slight was the the so And top in was where saw technology on number contracts and

things those And rates retention basis. sometimes net XX-month so trailing a we measure And on happen.

half sort think and normalize through then as we start I So, first of the be would rates again. expect the to year and of we retention move of the to half back in XXXX, maintained improve

improvement where a can want number. there. would a full better to of for think that still are there. I don't great. be us to be think there or the still We on estimate happy year some is I specific be XXXX, for the would guide I XXX% projection

Brent [Operator Instructions] line Our Thill next with Jefferies. question from will of the come

could and just address ago? What how X pipeline? a months versus how characterize to terms customers demand attitude in spend seeing year you the about their of are ago, are and overall you if the would feeling you're Curious today you environment feeling how

Brent, continue new we than more so address it our is the that them additional relevant and these is was product even a can a see, very in up right, so which the demand. that right? year we was As pick help today continued have areas products we -- year portfolio we so before remarks, much said on, that than ago, prepared to even more even relevant stable with. So the to as It businesses we a

good. remains So, demand

right?I We're not up not not sailors. are or don't change spend that. going be money I meaningful certainly expecting and people that. seeing like recession, will We're We maybe seeing right? to no of that, any drunken that about be let's want careful down, therefore, there think sort are

be budgets I continue think to watched.

towards the things all improve about portfolio, I of actually because improve are optimize people better, and people our helps life security, development spend. improve play which their things But product improve organizations, engineering efficiency of operations, development that. cautious cycle, those IT expenses, run think

see more at did we in of point. this in the think as I we 'XX So, same 'XX

reasonable number a there so kind this M&A, kind that a your pick is environment think of Like peers what's M&A things for causing hey, is valuation? it long, you same seeing points back that now? demand? are up? Is just what it, I'm on you're to we've enabling of Is stall-out of do natural just had such is more pent-up curious seeing. would this to add or And the if X you X

Brent, it's of all above. the think, I

I VC-backed the you think that examples at look is companies. one when -- of

at look over last IPO look months, ]. software and And it their exits IPO [ boy, is plan companies, parse is XX VC-backed exits, right? you enterprise you at If main the

and disasters So, you You've 'XX absolutely star business and got -- have 'XX, is a you're IPO and if in years you not behind do? is are business So, not a the and had X you 'XX a rock perspective. thinking that you business, have do a from VC an IPO right? you were you've what question

unclear it's ever kind able like it's business to looks with that digits 'XX business. And revenue is for let's Now is single to in a the gone growing, going that say, of IPO. be

opportunities. of they think need work So, saying, who these who really there.And slowly fund what think VCs and your that to round, you a coming are businesses and with I market I right? are beginning VCs I I get round. to people with we don't those look, do, think founders raise to the to do are So want potentially are think, work founders next these And sort

that's other some the have owned a, category. is then other we at period get So can for been it by look or entities kind businesses as category and sponsors other one liquidity. a that even they And significant of

VCs, So, on of pressure of whereas winners and much issue in I too for also-rans a their is case about LTEs around a is think not time worrying on. is it it from liquidity the so it investors.For some their the focusing sponsors, matter and

businesses size bringing the those So, looking are at, the I are think market. that into are pressures we right, the of

look large but our really our sweet size of XX% spot. is size, We we'll not XX% right. go somewhat businesses XX% at extremely smaller, are somewhat go or like. plus We'll ideally, minus We, We businesses. the bigger, we that's in of general, looking to at what

And we so that's -- quite that in activity. a bit are range, of seeing

quick to X And mean clarification the the business, not one so range been is high-XXs, Anthony. of then couple years? much margins altitude, right last too for in high, years running low-XX of kind high-XX, X about have maybe the of thinking next still pretty the the Is cruise that of but think you growth, your you're I how at framework about or the for get kind low-XXs.

We've said material expecting in always margins XX%. better XX% this business. XX% We're change we're mean the profile not we'll to year. for of margin coming I the Yes. maintain a than

that us the manageable sort is for it's high-XXs certainly our part I something is and think of playbook. being of in

Guggenheim. question McDonough And of Instructions] with line will next our the Ray from [Operator come

business think Anthony, you on as the few in license a And how renewal mentioned that billings by timing a becomes been trend? was that quarter? related more 'XX in more back-end do loaded term your this quarter. about more dependent and Has was you driven Or deals timing? it

question, good a it's Ray. Yes,

We do and I to in of are small deals think quarter given tend deals. was more any lumpy it there a in -- QX. number certainly

a frame because budget think billings, different sort -- negotiation QX their are a QX of are they're focused incentives dynamics other I timing got quarter around year-end that and and around the they are in that lot QX bookings are that than quarter. of and the it's sales usually time customers we've and of work lot just doing any at of around the

and or to QX into go you're quarter parts from that terms have play just the on our lumpy pushes And will from quarter-to-quarter. timing bit we extent an come on impact So, quarter to quarter, going more right to there's the the 'XX, that as that more It in. subscriptions so multi-years are think line, into contracts now more in little of forecasting timing be revenue. be year.But of moves are also that I tends on was into challenging about. things Things thrilled certain term-based it may we're of business the the later we've when think in which the cash overachieved come to I following a top of

a it. will a it's it of the But more cash in situation think think could there's a QX, impact where extent. a We revenue little impact issue. I we way flow a to have had lesser think like timing I bit about of I

probably cash Some little a less. but bit impact, flow

comment, one you And as would helpful want then to if that Yogesh, for another be Anthony and maybe well.

So, about as gone get expecting bit you'll net we and next think most, a about your an just deal this absent year, kind I And you as to of right I leverage appropriate them where view leverage down guardrails dependent, is think, little of are rate where go, but X.Xx. if of an acquisition, be have kind level to down do business? about interest you which in are rates do might talked where find What you interest know leverage? just your the it environment around

Yes.

And in are of the of sort fast how can governor levels and I right? model, rates terms a we how leverage lot drive think big the interest the in our go.

And higher say I would so get than to that a could net, we creep X.Xx bit done. little deal a

high leverage to think X.X%, we comfortable for I think much we'd the start were take doing think that, we'd above we that. that I the as -- would probably closed. right we did deal, if after don't X%. be I quickly And up pretty go we'd to deal the MarkLogic, delever probably for same

more back revolver If in our We the that you and MarkLogic And deal we probably if And be where were be the down delevering similar lever half we 'XX, pretty think than that starts, a we've I it it probably this would QX, do once started And leverage And net in in that on paying integration of may look QX, aggressively. gone. to I take by net turn debt on X.Xx end deal, playbook deal, it would right? to back year. revolver to a we next closes QX. think off paying more the or of closed little taken higher. start up a we the a we'd little started

time. questions like the I showing turn closing in call over further to Yogesh I'm remarks. for any back queue to no now at would the this Mr. Gupta

to evening. you We to look soon. you, wonderful thank Well, everyone, Have Good night. again again, for talking a forward us. joining

for program. participating. This today's concludes Thank all you

disconnect. now may You