Dynatrace [DT] Conference call transcript for 2021 q2
2021-07-28 14:27:05
Fiscal: 2022 q1
Operator: Hello and welcome to the Dynatrace Fiscal First Quarter 2022 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Noelle Faris, Vice President, Investor Relations. Please go ahead.
Noelle Faris: Thanks, operator. Good morning, everyone, and thank you for joining Dynatrace's first quarter fiscal 2022 earnings conference call. With me on the call today are, John Van Siclen, Chief Executive Officer; and Kevin Burns, Chief Financial Officer.
John Van Siclen: Thanks, Noelle. Good morning, everyone and thank you for joining us today. I am pleased to report that we had another strong quarter, once again beating guidance across all our key operating metrics led by ARR which was $823 million, up 37% year-over-year. Along with strong top line growth, we again delivered healthy profitability in terms of non-GAAP operating income, and EPS which Kevin will elaborate on in a few minutes. And we continue to believe that a smart balance between growth and profitability makes for a more durable business. over the long term. Underpinning our consistent year-over-year top line growth above 30% are two key building blocks. Net new logos to the Dynatrace platform and the ongoing expansion of existing customers. I'm pleased to report that we added 135 new digitally transforming customers to the Dynatrace platform in Q1 up over 50% from a year ago. And that our net expansion rate fueled by growth across all modules was once again at or over 120%. As we've said, we believe continued execution against these two building blocks will sustain a 30 plus percent growth business at scale for some years to come. With the strength of our Q1 results and positive outlook ahead we are increasing our guidance for fiscal 2022, which Kevin will provide more details on shortly. This morning, I'd like to discuss three topics that I believe will continue to drive our momentum and success. First, the ongoing market dynamics that continue to drive new logo growth and rapid expansion within our growing base. Second, the progress we're making in commercial expansion to accelerate go-to market success. And third, the progress we're making an expanding our platform and module strength to address the full $50 billion TAM we see ahead of us.
Kevin Burns: Thank you, John. And good morning everyone. As John mentioned, we delivered another great quarter setting this up for a strong fiscal 22. The investments we have made and commercial expansions that drive sales productivity are evident across all of our top line metrics with ARR revenue and subscription revenue exceeding our guidance. We believe annual return revenue is a key performance metric of the overall strength of the business. ARR for the first quarter was $823 million. That's up $222 million year-over-year, 37% growth as reported and 32% in constant currency. Excluding the perpetual license wind down which was roughly $25 million, or 4 percentage points, our adjusted ARR growth was 41% as reported, and 36% on a constant currency basis, all up sequentially from Q4. The building blocks for sustain ARR growth rate remained the same. The new enterprise logo additions to the Dynatrace platform, combined with how well we expand existing customer relations as measured by our Dynatrace net expansion rate. As John said, new global growth in the first quarter was very strong, with 135 new logos added in the quarter and we have been landing our new logos over the past year at a very consistent land ARR of a little over $100,000 per new logo. This new logo growth represents a 52% increase over the 89 new logos we added in Q1 of last year which is a soft compared to the COVID environment. We ended Q1 with over 3,000 Dynatrace customers.
Operator: Thank you. And we will now be conducting question and answer session. Our first question today is coming from Kash Rangan from Goldman Sachs. Your line is now live.
Kash Rangan: Hi, thank you very much and congratulations on the quarter. John, I’m curious to get your thoughts on high level as you kind of scale the business to its true potential where it should be multiple to , how do you think about the broader commercialization of the Dynatrace whereby today you guided business model that relatively high age fees relative to where the industry is operating at what point do we start to see pending out of you will of deal, landing points you are able to target a multiple of the 3000 customers that you have said very successful at scale have a customer base of tens of thousands. As you think about the company strategy longer term how do you spin out the landing points and have a commercial sales channel that is able to target a much wider user base, I know that you do extremely well and you have very high concentration of the modules across the 3000 customers, how do you make this even more mainstream? Thank you so much.
John Van Siclen: Hey Kash, appreciate it. So first there is nothing that precludes our platform from being able to scale down market. We’ve just decided as a business to stay focused. So we extend these first few years on what we see as the most sort of lucrative side of the business which is the global 15000. In fact about 70% of all IT spend is done by that global 15,000. So it's a massive market in and of itself against this huge TAM that we are looking at. So there is plenty of room to continue scaling out in every customer and across whatever growing sort of set of modules that we, the six we have today and more we envision for tomorrow. So we like where we are. We like the focus. It's paying off. We are really good at supporting these high end, high scale digital transformers. And you can see it in our numbers. We're just good at it. But like I said when the time comes to go to the global 25,000 or further, there's nothing that precludes us from being able to expand down market.
Kash Rangan: Wonderful, thank you so much and congrats.
Operator: Thank you. Your next question today is coming from Sterling Auty from JP Morgan. Your line is now live.
Sterling Auty: Yes. Thanks. Hi, guys. So I wanted to ask about the hiring and the ramp of the new sales reps. With 30% increase are you seeing very consistent growth and productivity out of the new reps that you're adding quarter-over-quarter, especially now that you're getting to bigger and bigger numbers what changes have you had to make to be able to make that possible?
John Van Siclen: Great, great questions Sterling. A lot of growing a sales organization like we're doing comes from anticipating the scale, because you need a superstructure of management, as well as an expansion of your onboarding program, sort of fan it out into the field can all be done via headquarters. So we have a combination of things going on. But I think the sales management would say that the biggest change over the last 12 months for us is the quality of the talent that we're attracting as a high growth, very successful company one that's focused on customers and one that's focused on sales success. So a little bit of its culture drawing in some great talent and we're doing a better job of developing that talent quickly, I think and it's shown in the numbers. The last dimension is just the coverage just scale of sales organization each of the sales reps end up with sort of a portfolio of customers, they can actually get to as opposed to a list, but they can't get to them all. And so it's been, it's also helped us significantly with broader coverage. We go deeper with existing customers. We reach new customers faster. And it's it's all good. It's all paying off.
Sterling Auty: Fantastic. Thank you.
Operator: Thank you. Next question is coming from Bhavan Suri from William Blair. Your line is now live.
Bhavan Suri: Great, thanks. Can you hear me okay.
John Van Siclen: We have you Bhavan.
Bhavan Suri: Great, great, congrats. That was a great RPO and billing numbers all around. I want to touch a little bit initially, John, on the competitive environment here. Over the last 18 months, we've seen sort of new products being introduced both by you, but by competitors, pricing model changes, and some of them deals in some of those competitors. Just some sense of what you see in competitive front, any change, and then any change in more, in terms of the trend around win rate.
John Van Siclen: Morning Bhavan. In some ways, there's been very little change. In other ways there has been some larger changes. The little change is really around sort of this competitive dynamic everybody seems to worry about in this space. Really from our perspective, it hasn't gotten any more crowded nor was it really that crowded to begin with. Certainly at the enterprise level the digital transformer level that we focus on it's been, it's pretty simple. There is less than a handful of players that can play there. And most of them fall away the minute you get to scale multi cloud kind of scale. On the other side what is happening is there is a marked shift toward observability, which is much more of a platform sort of concept where customers are tired of sort of the fragmentation of all the piece part tooling, and they really want to see more of a platform consolidation of their tracing, their metrics, their logs, etc. And we anticipated that, as you know, seven years ago, when we rebuilt our platform and refocused it. So we've been leading, and we've been trying to progress the concept of observability in the market, because we think it gives us strength in our landing zone. It's a new and expanded landing zone. And it also sets us up for quicker expansion which we're also seeing. So that's probably the other dimension of this where there is some change, and it's changed for the good for us.
Bhavan Suri: Yes, no, that's helpful. And I think you're right about the shift towards observability, especially with your partnership with telemetry, too. I guess one other one for me really quickly, is when you look at the metallogenic, right, it's remained relatively consistent, and really, really solid. But as you look at sort of when you're expanding into a company, I'd love to get a little color around the split between selling into adjacent kind of used cases or departments. So maybe going to e-commerce or usability or something like that, versus selling more modules into an existing kind of used case. So I've got sort of like the guys doing the data center and now they want everything measure. So help me think through how that deepening versus broadening plays out to drive NBRR,
John Van Siclen: Yes. That's a big sort of varies by customer in a lot of ways. The very large customers have more sort of fragmentation between teams of who does what, and so to move from the application layer to the cloud platform where more of the infrastructure play as that's just moving to a different group that's adjacent to the first landing zone, but a little bit different characteristics, different care abouts and so that's one but what we're seeing most of the time, honestly is that we're landing with multiple modules. The vision even if somebody doesn't buy them all at once the vision is already planted that they want to expand to multi module use provided the landing zone . I love the fact that we are so consistent with that landing zone and means that we're not sort of elephant hunting and now we're staying focused in our suit spot. We know the product tastes so good when somebody gets it, and it just expands rapidly. So I'm really pleased with that. But that the module expansion comes in two different ways. Some of its super straightforward off of the initial sort of vision we plan with the customer. And other ones take a little more time, the larger customers take a little more time, but obviously, they pay off too, because the size of those companies can be quite large when they're multibillion dollar businesses. Overall just looking at that growth, three plus module growth where we have nearly $500,000, average ARR per customer, and growing year-over-year, I think we grew it from maybe about 30% of our customer base to now over 40%. That's just a great progress. And we expect it to continue. I'd be surprised if we weren't picking up another chunk of percent of our customer base over the next six to nine months. We're doing well with it, and we're excited with the progress.
Bhavan Suri: Yes. No, you can see that even that infrastructure grows and 30%. Congrats. I mean, those are great numbers. And thanks for taking my questions, guys. Appreciate it.
John Van Siclen: Thank you.
Operator: Thank you. Next question today is coming from Matt Hedberg from RBC Capital Markets. Your line is now live.
Matt Hedberg: Hey, guys, thanks for taking my questions. And congrats on the quarter. And also, congrats on the two year mark of the IPO. It seems like two years has gone fast. But I think we have a lot to look forward to in the future here. So congrats on both those milestones. Obviously the success that you're having John, you just alluded to customers with three or more modules than you were 500k. And I know historically, you've said your I think your overall base monitors like 15% to 20% of their applications. But if you really move into full stack monitoring, full stack observability, is there a different way to think about penetration in these customers beyond just the number of apps monitor?
John Van Siclen: Yes, Matt. So the way we look at it, is that pretty much every customer starts in a segment. It's usually their most advanced cloud environment where they want to Dynatrace in there, the more dynamic, more complex environments where there's lots of blind spots, but there's also a lot of impact if they get it right, but that quickly expands to them to either other app stacks, cloud app stacks, or hybrid. And so digital transformers one of their characteristics is that they're moving from something to something, otherwise, why are you transforming? So they usually have multiple generations. And so we start out, as we've talked about before, in the most advanced cloud environments, and then we come back and sort of sweep through the hybrid elements that supply those modern cloud applications. So that characterizes sort of the way things look to us, and it's hard to sort of peg Oh our customers are here, or is there a different sort of expansion. The fact is digital transformation, as I said, is a journey. People are moving from everything they had before, to something brand new on the other end of this. It will take them a long time, and the minute they're there, they're going to continue to evolve. So I see this is we're in early innings. It doesn't really matter, sort of exactly what things look like today. They will continue to evolve and scale rapidly. I mean just look at the cloud companies, and how fast they're all growing at some at massive multi billion dollars worth of revenue. There is just a great opportunity ahead of us and where we're certainly lead at the enterprise space. And we expect to continue to do that and with that will come growth across all the modules as we expand our sort of footprint, our capabilities and our reach into these customers.
Matt Hedberg: Got it. Thank you. And then, as we start to look forward to the federal year end it was great to see you awarded the AWS government competency along with your prior FedRAMP authorization. Can you remind us of what your exposure is to Fed spending and how do you think about that into sort of your guidance in terms of like what sort of expectations you have on federal this year?
John Van Siclen: Yes. No, I think we think the federal market is a fantastic opportunity for us to continue expanding in. We are relatively early in that. I think we talked about it about a year ago, in fact, the doubling down that we were doing. We now have quite a good sized team there. It's considerably well over 100% year-on-year. The progress we are making is significant, but it still offers small numbers. I think is going to be more meaningful in fiscal 23 and 24 honestly, as far as a overall piece of the business, but we're really pleased with the progress that team has made. And we look forward to some great things from them, with partnerships that we're building with, with some of the extensions and some of the new modules, we're bringing out like the app stack module, these are things that said Fed government extremely well, at this moment in time. And so we're looking for great things from them. It's an important thrust.
Matt Hedberg: Now, it certainly seems like the government needs to digitally transform just as much as the commercial side. So well done, guys.
John Van Siclen: Thank you.
Operator: Thank you. Next question today is coming from from Bank of America. Your line is live.
Unidentified Analyst: Hey, John. Hey, Kevin, really nice quarter. Congratulations. Thanks for taking my questions. I actually wanting to dig into the prior question on that the AWS government competency award congratulations on that. Great testament to the platform's capability. I guess I was just wondering, could you tell us a little bit about what the process is like for an achieving that award? How long does it take? I mean what goes on with that process of getting a word of that competency award?
John Van Siclen: Yes. that's it, that's a competency that is not really about some technical review. It's actually more about success with joint customers that you earn in the field. So that's a little bit more what that's that one's about. We have a great relationship with the AWS federal community. It's not just AWS themselves as the partners and that whole community there. And we have that with the other hyperscalers as well. But we were pleased to get that. It's a great calling card but it's winning business doesn't just come in the door. You still have to go earn it. And as I just finished we're leaning into it hard, because we see it as a massive opportunity for us. I mean, I think everybody knows, the U.S. federal government spends is probably like that the sixth country in the world as far as spend, IT spend, and they are digitally transforming. Slowly, but hopefully, we can help them to speed it up.
Unidentified Analyst: Got it. Got it. Thank you. And just one follow up from me looking at the results it really demonstrates the power of the Dynatrace platform and the strong positioning within the overall opportunity. I guess just looking out into the future what is getting you most excited maybe from a product standpoint, or an opportunity standpoint that we should be thinking about? Thank you for taking my questions.
John Van Siclen: Sure. Well, I think the thing that excites us that there's two dimensions to it overall. I mean, of course, the cloud spend continues to go skyrocket. So that's sort of the under underpinning, but that can float many boats. I think, from our perspective two things. The first one is that apps continue to be the high ground. You don't put a cloud platform and unless you're going to put applications on it and you're not going to be able to digitally transform unless you're driving continuous innovation on top of those platforms. So the apps are where the strategic action is and we're super good at it and extending then to the full stack cloud stack is just gravy for us. The other piece is that these clouds are extremely complicated. And everyone needs to de-risk their cloud programs and as they do that, they're going to look to automation and AI to help drive consistency, allow their best resources to extend themselves further. And that's perfect for us. I mean that's part of our reinvention. We're the first to realize that the scale and complexity was going to outstrip human ability to keep up and we built analytics at the core, some very sophisticated analytics at the core of our platform to handle that data explosion that's going on, that complexity explosion. So that's the other one is that that's finally starting to resonate up at the buying community, not just that at the technical practitioners. And that's super exciting because that's a big differentiator for us and one that is certainly helping us consistently win against all competition no matter who's there ahead of us.
Unidentified Analyst: Great. Thanks, guys. Thanks for taking my questions. Really, really great quarter. Congratulations again. Thank you.
John Van Siclen: Thank you.
Operator: Thank you. Next question today is coming from Jonathan Ruykhave from Baird. Your line is live.
Jonathan Ruykhave: Yes, well, good morning. I am wondering if you could talk about pricing. You guys have really been able to command a premium for your products. But just curious on your thoughts on how comfortable you are with that pricing strategy just in light of the increasing number of resource consumption based pricing models we see from various competitors.
John Van Siclen: Yes, I think there's a little bit and sort of too much noise about pricing in the market, honestly. We really haven't seen that much change. Some people try to use pricing as a sort of deflection for lack of momentum in their business. But we haven't really seen much sort of impact, their shifts in pricing it's certainly not at the enterprise or the digital transformer level of the marketplace. We're aggressive where we need to be aggressive. We are consistent and predictable for enterprise customers. The thing that they hate most is our overages or things that they can't anticipate, and all of a sudden they get a bill for it. We live in this space. We know how these folks think. We structure our pricing and packaging appropriately for them. And we don't see sort of any reason to move too far off of that what's working for us at this point, nor do we see a moment in time ahead of us where we're sort of worried that all of a sudden something dramatic has changed. So I like where we are. I think we're smart, anticipate where the market is. And we listen to our customers, and make sure that we're predictable and transparent with them.
Jonathan Ruykhave: That's helpful John. Thank you. Just a second question I have is just a business analytics product. I know it's relatively new but curious if you're seeing any the emergence of a consistent use case that can drive you a more repeatable sales motion or is it more one off applications that you're staying with that product?
John Van Siclen: No, it's one of our, it's one of the modules that drives some of the three plus module expansion that we talked about. When you think about it nobody really wants to put cloud infrastructure. They don't really want to monitor logs. They don't, what they're trying to do is they're trying to expand their business. They're trying to be more agile and more innovative, find new revenue streams, transform the business itself. And so they put all this in, in order to accomplish something, but you still need to measure, are you getting the customer experience you're expecting? Are you getting the business outcomes you're expecting? And that's where the business analytics piece and the digital experience pieces come in. They measure exactly what the value is on the output the business value. So you can understand whether your investments you're making in the cloud platform, and the applications are paying off. And if they're not paying off, why not and what do you have to do to get that kind of return on investment for your IT digital transformation spent. So it's a really important module for us. It'll continue to be and I do think more and more of the digital transformers are waking up to the fact that it's not just about the infrastructure they're putting in. It's measuring the value at the other end.
Jonathan Ruykhave: Very helpful. Thanks, John.
Operator: Thank you. Next question today is coming from Raimo Lenschow from Barclays. Your line is now live.
Raimo Lenschow: Hey thank you. John a quick question on the security on app stack you talked about the early progress there. How do you see that playing out in terms of the behavior you see from some of the security guys because it looks like they are realizing as well that getting data out of security will be more and more important. I mean, you will seem like more than natural hub like how do you see evolving over time. And then I have one follow up for Kevin.
John Van Siclen: Yes. Well, the reason that we entered where we did is we see it as a greenfield space it's very hard to do continuous scanning in production without overhead. We have a fantastic instrumentation technology out in the and we see everything, code level detail, we see every entry and every exit point. So we have a visibility that is really unprecedented. And the second thing we do is we have the intelligence built in, an AI engine, that allows you to actually score determine what's really a vulnerability and what's not, and then score those vulnerabilities. So you can always keep things prioritized for sort of the limited time your Dev team has to spend on this on the security side of things. So that combination is very unique. And while others are trying to figure out just how to scan in production we're already there. And we already and we have the AI engine to help make it to simplify that world. So it's a great place to come in. we have plans behind it of course, but we believe if we stay in that application, that cloud application zone, first of all, it's going to be a rapidly expanding space. It's being disrupted tremendously. And we have a very unique sort of angle in from the observability, the intelligent observability we do. So we're focused more on what we're doing and how to maximize the value of it with the customers we have rather than worrying too much about what competitors are doing at the moment. And I think that strategy has served us well in the past and we'll continue to pursue it. So far, so good and what we hear back from the hundreds of trials we've been doing is this is spot on we needed. How fast can you mature, so we can roll it out and volume. Perfect place to be.
Raimo Lenschow: Yes, sounds really exciting. And one for you, Kevin, as we talk more about like RPO going forward, I know you said here are the most important for you. But RPO will come up more and more than are there any kind of drivers or trends that we should see? I'm just if you think short term versus long term RPO. So your long term RPO going faster than short term. Is there, like some duration benefits you see from bigger engagement and longer engagement customers, etc? Thank you.
Kevin Burns: So I was having, so as we've moved to a fully subscription business, we have seen a slight uptick in our average contract duration and right now it's approaching about two years. So that's sort of generally where we are from that standpoint. But the reason we focus investors back on ARR is we've gone out to our customers, and we're signing multiyear agreements. But as they rip and replace existing contracts it's sort of resets the RPO numbers and deferred revenue and the billings numbers as well. So over the next couple of years as we scale our customer base as we get them on to three year agreements, and as they grow, it's just going to continue to create some variability in those different metrics which is why if you really want to cut through all the noise around everything, we think ARR is the best metric. It's the leading indicator to subscription revenue growth and the one we certainly focus on internally in our company.
Raimo Lenschow: Okay, make sense. Congrats.
Operator: Thank you. Next question is coming from Tyler Radke from Citigroup. Your line is now live.
Tyler Radke: Hi. Good morning, everybody. So I wanted to ask you first just on the new logos that you're seeing in the market obviously a nice bounce back from Q1 a year ago. What are you just seeing in terms of their appetite to take on kind of the full Dynatrace platform? Do you find that your landing with a broader set of solutions given the investments that you're doing? Just give us a flavor for how those conversations have progressed.
John Van Siclen: Yes. No, appreciate that. So it's about a third of the customers land with a platform approach three plus module kind of approach. And that's up year-on-year. So that maybe one item to take away. That's because the rise of this observability as a concept sort of landing zone. Two years ago, we talked about the application landing zone. Now, we talked about in observability landing zone, which is a little wider and we see that continuing. It'd be surprised if that isn't scaling up consistently quarter-on-quarter now for the next 12 to 24 months. So that's an important characteristic. And I think that customers are as they start to move, we starting to see more, do it yourself kind of customers that are tired of trying to cobble things together. It's sort of a game that you just can never get on top of. You feel like you're always behind and customers feel that way. And when they find out that we already do all this and it's all automatic and AI to help them really transform the way they work. They are totally willing and happy to give up the do-it-yourself approach. That's the other characteristic I'd say that's, that's important. It means that people have already figured out the clouds complex. They've already figured out that old tools don't work. That's why they're in this cobbling it together zone. And the more we find customers there again I think that multi module footprint will continue to expand in the landing zone. So those are a couple of characteristics of those new logos that we're starting to see and what the dynamics are in those environments. And I think just with the visibility we see ahead of us, we think that the momentum we've saw this quarter, and maybe it's not a 50% quarter-over-quarter, I'm sorry, year-over-year uptick, but we do see as good, steady, strong new logo flow throughout this year. Probably a little bit ahead of our 15% to 20% guidance, long term guidance we've been giving.
Tyler Radke: Right, and just one follow up, as you think about your kind of mix of expansion and new deals in TAM that are tied to obviously application modernization, like, how is that mixed between public cloud kind of public cloud native applications versus maybe hybrid cloud or private cloud just kind of obviously you talked about some really nice momentum with the hyper scalars. But just kind of curious how that mix of where these applications deployed has changed kind of between the hybrid, private versus public cloud.
John Van Siclen: Sure, well. So there's definitely a trend towards more and more public cloud just in general and people put hybrid clouds in not because they're going to lock down on hybrid is that they're transitioning or transforming their environment over time. Every hybrid cloud that we run into has public cloud extensions. It wasn't that way five years ago, but it is today. Over 80% of our customers are observing cloud native applications and containerized environments. So it's extremely modern set of tech stacks but they also reach back into data sources of record that are required just to run their business. In an insurance company, it's a risk management system, that's probably running on a mainframe somewhere or some other kind of mid range systems behind their firewall. They have to reach back to banks, their customer data, transaction data, etc. Airlines, you go down the list of the digital transformers, you realize that there are data sources of record that need to be tapped in order to support the modern cloud front ends and mobile applications we all use. So the way we think about it is that over 80% of customers are modern cloud environments. And it's from our perspective, digital transformers will be hybrid, highly hybrid for some years to come. We are extremely well-positioned for that world and helping them move from the old to the new.
Tyler Radke: Thank you.
Operator: Thank you. Our final question today is coming from Erik Suppiger from JMP Securities. Your line is now live.
Erik Suppiger: Yes. Thanks for taking the question. And Congrats. On the app stack module now that you've been selling that for a little bit. Can you talk a little bit about the competitive environment? Are you seeing the likes of kind of the broad solution providers like Palo Alto or was it more startups and then secondly you've talked a little bit about sales and marketing from the year ago quarter in light of some return to the office. Can you talk a little bit about where you are in terms of your sales organization returning to a more normalized spending level?
John Van Siclen: Sure. I'll try to handle these relatively quickly because I know are short of time here. From an app stack standpoint as I said -- we're still in sort of the maturing and sort of early stages of sales development but we do know what that competitive environment looks like. And no matter what people have they have gaps in production and every one of these customers sort of knows what this landscape looks like. It's about lots of tools out there. There's plenty of them. But this is a greenfields angle that we're coming in on. There is nobody that's doing what we're doing. It is a hole. And as you guys know from security if there's a hole somewhere, and you're a public company, or a government agency you're going to need to fill it. And so that's what gives us a lot of excitement around this space. Our timing is good. The angle we're coming in on is good. It is greenfield and yes there is lots of tools out there that people want to talk about when it comes down to does it work? The answer is there's a big gap in the market. On the sales front, so the sales organization is chomping at the bit to get back here to face to face with customers and there's plenty of customers that are looking forward to that as well and already engaging. In fact, I think some of our travel is for sales in particular is up a big jump from where we were when we were all locked down a year ago. So they're excited about it. But what I leave you with is this we don't have to be face to face with customers to be successful. We already checked that box a year ago. And we've learned how to win with zoom, over zoom. And we can continue to do it. If anything, back to sort of a little more normalcy and face to face will be an accelerant for us both in onboarding new talent as well as I believe building relationships with customers that allow us to expand faster. So those are some of the characteristics but either way it goes whether it's a protracted pandemic or whether we're back to normal sooner it's all good from our perspective.
Erik Suppiger: Very good, thank you.
John Van Siclen: Great. Hey well , thank you everyone for joining us. We're thrilled with the dynamics of the market moving toward us as I said in my prepared remarks. We're excited about our ability to invest in growth, both commercial expansion and innovation. And we believe that as long as we stay focused on our two key metrics the expansion and new logos and the expansion of our ARR per customer that we can grow a fantastic business for years to come. So thanks again and I look forward to catching up a quarter from now. Cheers.
Operator: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
