Strategy Inc (MSTR) Q3 2017 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. And welcome to the MicroStrategy Third Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Michael Saylor, Chairman, President and CEO. Sir, you may begin.

Hello. This is Michael Saylor. I am the Chairman, President and CEO of MicroStrategy. I’d like to welcome all of you to today’s conference call regarding our 2017 third quarter financial results. I’m here with our CFO, Phong Le. First, I’d like to pass the floor to Phong, who is going to read the Safe Harbor statement and make some comments on our results for the third quarter.

Thank you, Michael, and good evening, everyone. Various remarks that we may make about our future expectations, plans and prospects may constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent Quarterly Report on Form 10-Q filed with the SEC. These statements reflect our views only as of today and should not be relied upon as representing our views as of any subsequent date. We anticipate that subsequent events and developments may cause the company’s views to change. While the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so. Also, during the course of today’s call, we will refer to certain non-GAAP financial measures. There’s a reconciliation schedule showing GAAP versus non-GAAP results currently available in our press release issued after the close of market today, which is located on our website at www.microstrategy.com. On to our financial results for Q3. Overall, we are happy with our progress in investing in our business for growth. In Q3 2017, we began to launch major initiatives, include increase in corporate, digital and field marketing presence, continuing the strength in our services organization with the focus on customer satisfaction, ramping up our recruiting presence on campuses in the U.S., Poland and China, and improving employee engagement as evidence by our most recent engagement survey results and labor market centers. As we focus our effort on investments in these initiatives, we expect that it will take several quarters before the full cost of revenue impacts hit our income statement. Let’s start with more detail on revenues. Total revenue for Q2 2017 was $125.2 million, a $4.7 million or a 4% decrease year-over-year. Foreign currency effects in Q3 2017 favorably impacted our revenues by $1.5 million or 1%. Total revenue increased $4.6 million or 4% quarter-over-quarter. Product license revenue was $21.6 million in Q3 2017, an $8.1 million, a 27% decrease year-over-year against the tough comparing Q3 2016. We did experience sequential product license revenue improvement of $2.4 million or 13%. This is particularly aided by recovering our volume of big deals greater than $500,000. We also derived a greater proportion of revenue from new customers in Q3 2017 compared to previous quarters. Our North American business represented 58% of our total product licenses revenue, compared to 74% for the same period in 2016. Our subscription services revenue primarily driven by our cloud customers was $7.7 million in Q3 2017, a 1% increase over Q3 2016 and 7% decrease compared to Q2 2017. We had a number of customers convert from our cloud to our on-prem offering which had a negative impact on our year-over-year and quarter-over-quarter growth rates. Our support revenue was $72.9 million in Q3 2017, a 1% increase year-over-year and 3% quarter-over-quarter, with foreign currency changes favorably impacting such revenue by $0.8 million or 1%. Our customer satisfaction levels and maintenance renewal rates continue to be high, but recently lower product license revenue had an impact on new maintenance revenues. Our services revenue was $23.0 million in Q3 2017, a 14% increase year-over-year and 3% quarter-over-quarter, with foreign currency changes negatively impacting such revenue by $0.3 million or 1%. As we continue to strengthen our services business, we are looking forward to welcoming new Head of Worldwide Services, Steve Holdridge in early November. Steve will be responsible for our consulting, education and support businesses. Turning to cost, we are beginning to see increases in costs as a result of our recently announced growth and investment strategy. Q3 costs of revenues were $24.4 million, a 6% increase year-over-year and flat quarter-over-quarter. Q3 operating expenses were $80.2 million, a 4% increase year-over-year and again flap quarter-over-quarter. Sales and marketing expenses increased 7% year-over-year, with an 11% increase in headcount. Research and development expenses increased 7% year-over-year with a 2% increase in headcount. And general and administrative expenses decreased 3% year-over-year with a 4% decrease in headcount. Specifically, in marketing we saw 16% quarter-over-quarter and 37% year-over-year increase in costs as we ramped up activity and headcount associated with corporate, digital and field marketing. We had income from operations of $20.6 million in Q3 2017 and an operating margin of 16%, a 31% decrease in operating income from the same period ago and a 31% decrease compared to Q2 2017.

Increase.

Increase compared to Q2 2017. Our net income was $17.9 million in Q3 2017, a decrease of 33% from the same period a year ago and a 62% increase compared to Q2 2017. Diluted earnings per share was $1.56 in Q3 2017, down from $2.31 the same period a year ago and up from $0.96 in Q2 2017. We had cash, cash equivalents and short-term investments of $646 million at the end of Q3 2017 and continued to have no debt. We continue to believe that the investments we are making in sales, marketing and technology will improve our business and help to drive revenue growth in future periods. We believe that the infrastructure we created in the past three years in our product, processes and people, have us well-positioned to leverage these additional investments. We will continue to be smart about making additional investments or maintaining the flexibility, evaluating and refine our growth plan as it progresses. Now I would like to turn it back to Michael Saylor.

Thank you, Phong. I want to share a few comments on my perspective regarding the result in the quarter and our plan going forward. I think the pros of the quarter, we were profitable and had good cash flows and I was pleased with quality of the deals that we were doing. In particular, I’m excited about the fact that we’re doing really good business with some of the largest banks in the world, we had good deals with some of the largest companies in the world, we have some really good business with some of the most procedures technology vendors in the world and the appeal of our product at the enterprise level appears to be fairly well balanced across just about every major industry and also lots of governments around the world. So the products really, I think is resonating with the marketplace. I was pleased with the analysts endorsements we got from Bark and Force during the quarter. The analyst make a difference in the industry and we had some negative analyst developments in the past and this was a nice turnaround for us and Force just in September give us a really nice endorsement and Bark just a few months before that. And so that’s been resonating really well in the marketplace both with the channel and also with our customers. I think it’s an auspicious development for us. In many cases these analysts reviewed up to 20 of our competitors and anointed us as a leader or the leader in many of these spaces. So I’m excited about that. We see good things and good trends in customer satisfaction, where our customer satisfaction ratings that we are gathering from our install base continue to trend north in the right direction. I have had the opportunity to travel around the world just in the past few weeks presenting MicroStrategy version 10.9 and we’ve been getting really good customer and partner response to 10.9 and so I think that was really a nice pro and the services performance year-over-year was strong and so we are pleased with that. The negative is software bookings were lower this quarter than this time a year ago and so that we’re not pleased with. As I look at some the business going forward, I think, we’ve got a pretty good plan in place that makes sense for us to drive organic growth in the business and our plan consistent of a variety of different strategies. We are going to increase our investment in corporate, marketing and digital marketing, especially by spending money across channels like Facebook and Google and Twitter and some of the other publications where CXOs have their eyeballs. And so we have already started that process and that will continue and we think that that will help us build our brand and drive additional leads and brand awareness in the marketplace. We have got a pretty ambitious program to increase the degree of field marketing we are doing in the coming year and that means both continue with our existing symposiums, as well as be present at lot more tradeshows. With regard to field marketing we are looking to targeted places where CXOs and then also IT executives driving digital transformation and enterprise and analytics purchases will be. That means big data conferences, analytics conferences, digital transformation conferences, enterprise mobility conferences. I think gatherings of CIOs, CTOs and other IT executives and also CXOs. This is dramatically ramping up versus where we were a year ago and so I expect that we’ll see good things come from that. We are making investments in our sales organization to strengthen our sales capabilities everywhere in the world and that means in some cases additional field marketing personnel and others additional channels personnel and additional sales leadership and also product localization personnel. So these are investments we are making in China and Japan and Korea and Asia-Pacific and in the Middle East and in Europe and Latin America, and of course, all throughout the Americas region. And I think that given the arrival of our new product and product capabilities, this is a time like thing for us to do and I’m getting good feedback from all of our field sales organizations that this is a positive development. So we will continue with that. We are going to make additional investments in our services organization and we will be bringing on more support professionals and support engineers and more professional services experts in order to raise the level our professional support and also to grow our professional services business and to proactively target our customers with an enterprise support offering, which will help them to get the most of the MicroStrategy platform. I am really enthusiastic about our enterprise support approach because I feel like just about all of our customers will benefit from the developments we’ve made in our product and improvements we have made in our platform and also the best practices that we’ve been developing for how to deploy the MicroStrategy platform more effectively throughout the enterprise by developing some good approaches to optimize our configurations and we will develop new methodologies to deploy self-service on the MicroStrategy platform, which is a really high demand thing right now and we are also developing new methodologies to create additional environments that people can use to deploy mobile and IoT and embedded analytic applications and cloud applications. And so, our services strategy is really integrated well with our product strategy and is integral and I think that it will help us to grow the business and not just grow services but grow software revenue. So we will add additional talent to do that everywhere in the world. And I would be -- I wouldn’t want to leave out maybe one more important areas of our growth strategy, which is product development. There are whole set of product themes that we are investing in in order to grow the business and we are going to ramp up those investments. Certainly one area we are enthusiastic about is our new Dossier and Workstation. I think the Dossier is a dramatic advance in our interface and not only it is extremely modern and a great way to deploy mobile applications and analytic application to the entire enterprise, but it also incorporates collaboration and as you see from our press release we are really excited about collaboration, it makes it much easier and much faster to embed analytics into workflow and it will draw large new user constituencies into our analytic enterprise framework and so the Dossier is key. Workstation is our tool strategy to dramatically improve the quality and the effectiveness and efficiency of our tools. And we are going to continue to drive that forward and I expect that in 2018 we will start to see good things come from that. I have got really good feedback from our customers about Workstation. They seem to be pretty enthusiastic about the potential of our new toolset to drive productivity and agility. Another big theme in the market right now is data and conductivity, especially big data. And then in our latest releases we have added upgraded drivers and gateways to support direct access to Hadoop and Spark and many of the new cloud-based data sources like Snowflake and Redshift. And that combined with new conductivity options we have for big data, new support for MDX data sources like MSAS and other cubes and new functionality related to MDX. These are very auspicious. I think they are going to help us in our growth strategy. We continued to open up our architecture. It is now possible with MicroStrategy 10.9 to turn the MicroStrategy environment into a data warehouse of sorts. So you can publish MicroStrategy data sets from one MicroStrategy environment to another MicroStrategy environment and this is really exciting development for us, because it means that we can actually use our environments to federate data sets and federate KPIs to other MicroStrategy environments, which has been in high demand for a while. We have got a exciting agenda to improve and enhance our gateway and big data connections in a coming year and I think that this is going to be a great growth area for us. Dossier is a great underlying technology to help us turbocharge our enterprise mobility applications as well and so I think mobility is going to be even more of a theme in 2018. And the Dossier allows you to very quickly build an application which renders very nicely on all types of mobile form factors, as well as web and desktop, and it’s generating a lot of excitement amongst customers as they see this. The latest release of our product has some dramatic upgrades to our APIs for embedding our analytics into custom applications. And sometimes that takes the form of building custom mobile or custom web apps, and those areas are RESTful APIs and JSON API has been very popular customers. We have also illustrated how you can actually serve up MicroStrategy federated data sets to other enterprise be iTools or Tableau or Power BI or Qlik, and so it makes MicroStrategy a really good corporate citizen where we can serve as a data warehouse for them, and that’s exciting. And we will ship this new embedding APIs and 10.9 which makes it possible to take the Dossier in a matter of minutes embedded into a web portal or blog or any HTML document and people really excited about that. So we are going to continue to invest in embedded analytics APIs as we look forward in the year and I think that that will be a source of growth for us. Another source of growth in the market is the migration to the cloud and especially the explosion of AWS and companies that have their own virtual private clouds and AWS environment, our latest releases is the best version of MicroStrategy’s platform for the cloud yet and now -- we are now actively selling and marketing MicroStrategy for AWS. And the exciting thing about it is that any customer can deploy an enterprise grade version of MicroStrategy in their own BPC. They can integrate it back into their data center and they can manage it and they have the encryption keys and they have all the administrative controls of it. So they have complete control of an environment. It’s also exciting because MicroStrategy for AWS means that any of our partners and system integrators can deploy the MicroStrategy environment in their BPC and they could become a cloud service provider tapping right into the power of AWS but then layering on their own managed services and applications in order to be a software-as-a-service vendor or managed service center. This is going to help us move our cloud value proposition everywhere in the world. It means that local partners of ours in Japan and Korea and international, they can all create their own tailored versions of MicroStrategy cloud offering, tailored for the local political and legal environment and tailored for the local language and solution environment. And so we see this is being a nice breakthrough and scalability, and will allow us to grow our cloud revenues over time. And the last area that’s worth highlighting in this call is the advances we’ve made with regard to mobile identity and communications and telemetry in the Usher product line and we feel like that’s the best we’ve had so far and starting to work really, really well and was generating lots of enthusiasm throughout the customer base and the potential of mobile communications and mobile identity to either turbocharge the analytics frameworks or to the -- to improve their enterprise mobility solutions or to deploy standalone communications and security applications on mobile devices. So our growth strategy in a nutshell is ramp up our marketing, strengthen our sales, strengthen our services organizations, focus more services on our enterprises and continue to make substantial investments in the product platform writing on these waves of mobility, of big data, of embedded analytics and cloud and in IoT. We will spend more money on engineers and on professional services people, and sales and marketing professionals in order to pursue this agenda. The cost will ramp up during the coming year. But I believe it positions us well for revenue growth. So looking forward we are heads down executing on our growth plan. I’m more excited about the future than ever and I’m looking forward to 2018 and what the year will bring. With that, we would be happy to answer questions if there are some.

Thank you. [Operator Instructions] Our first question comes from Abhey Lamba with Mizuho Securities. You maybe begin.

Yeah. Thank you. Mike thanks for the update. In the quarter when we look at your deal metrics, it seems like big deals accelerated and revenues from smaller deals are experiencing year-over-year decline. What drove the dynamic and it’s little bit different from the previous quarter when large deals didn’t come through. So what really kind of here tilted the scale this quarter?

I think we have some normal quarterly variability and we have seen in the past and I think we see it now. I don’t think there’s any particular macro dynamic that we could put our fingers on that we would choose to call out right now. I think the business is just variable from time to time and quarter-to-quarter.

I think, Abhey, Q2 is a pretty low large deal quarter for us in a low bookings revenue quarter on product license in generals, if any that was an anomaly what you saw in Q3 was more typical of our business.

Got it. And Phong the expense plans, it seems like for the quarter they came in better than where we guys were modeling you guys at. I understand you don’t give guidance. But maybe you can talk about how did your expenses come out this quarter versus what your plans were especially in light of the increase investments if you wanted to make and how should we think about your expense plans going into the next few quarters as well as in 2018?

Yeah. I think we laid out some thoughts around where our run rate expenses might go over the next year and we have talked about last quarter that we could see a place and we are open to our margins going down at the single digits. Q3 was really just a ramp period, right. If you think about a lot of our expenses coming in the form of headcount in areas like technology and marketing and consulting, we open positions and you could probably go look at our job boards and see the increased number of positions here and in Warsaw and in China specifically, but the hiring will take time, right. You will see the first set of folks show up incrementally in Q4 and then over time. And then on the marketing side which is where a lot of our other expenses will show up. I think I had mentioned we saw 16% quarter-over-quarter increase in marketing and 37% year-over-year increase and we expect that to even higher than that as we enter Q4 and beyond as we see more of our activities take place. But we don’t have a set exact amount we want to spend so much as willingness to spend if we find activities that that we -- are giving us high ROI and high return in terms of leads and opportunities.

Got it. And my last question is, Mike, you have a pretty healthy balance sheet, it’s significant amount of cash you have on the balance sheet and the stock is at a pretty low multiple right, why not do some buybacks at these levels. That’s it from me?

Yeah. We continue to monitor the situation and I think we are pleased to have the option to do a buyback at the right time. We’ve taken over time a number of issues and it’s something that’s important to us and at the right time, it’s something that we will consider doing.

Thank you.

Thank you. Our next question comes from Karl Keirstead with Deutsche Bank. You may begin.

Yeah. Hi. I have got two. Michael, I know license growth by geo can be quite variable, but I guess, it was quite a contrast in 3Q where I think international license growth up 20%, but domestic down 44%, so maybe just focusing on the domestic down 44%. Does that speak to any change in the end market? It sounds like it doesn’t given your comment that you really don’t see any macro. So was there something internally perhaps at MicroStrategy that that contributed to that license performance. Thank you and then I’ve got a quick follow-up?

Largely generally we have been under investing in the business and we need to invest more in marketing, more in sales, more in services and more in product development. And if we do all those things we are going to see revenues grow. So there’s no one thing I put my finger on. We just -- I think we just need to be more aggressive in our investments and we’ve been a bit on the conservative side and that’s the primary reason license revenues aren’t growing faster.

Got it. Okay. Thanks for that. And then, Phong, I might have misheard you, but when you were talking about the subscription business, did you say that in the third quarter you saw a little bit more migration from cloud to on-premise. I might have misheard you, but if you said that correctly, that sounds a little sort of contrary to the normal pattern, perhaps you could clarify?

Yeah. That’s exactly right. And as you know, our subscription business isn’t huge business. For us is about $30 million annually in revenue. So when we see as an example of customer who is providing us a million dollars ARR in cloud migrate to on-prem, staying as our customer that has a pretty significant impact to our quarterly revenues and that’s what we saw in Q2. We saw couple large customers migrate from cloud back to on-prem. And for the most part those are not decisions about MicroStrategy cloud product or MicroStrategy on-prem product, but it’s a strategic decision with those particular companies. So that is what we saw. I wouldn’t sort of point to it as a particular trend in our business or in cloud confidence overall. But one migration makes a big difference in our income statement.

Got it. Okay. Thank you both.

Thank you. Our next question comes from Walter Pritchard with Citi. You may begin.

Thank you. This is Tyler Radke on for Walter. Michael I was just hoping to take your pulse on version 10.9 and some of the features you saw and excited about with Dossier and the Workstation. Just was hoping to get how this kind of compares to your excitement with the initial version 10 waived. Do you see this as a catalyst to reaccelerate growth, just would love your thoughts there? Thanks.

I think 10.9 is the beginning of a new set of product releases that are really focused upon the Dossier Workstation paradigm and I think 10.9 was a strongest release we have had in many, many years and so I am enthusiastic and I do think that -- I think the Dossier and Workstation offering is going to Usher in a new level of productivity and electricity in our product offering. So I expect it will kick off a new product cycle that’s going to be beneficial to us in the year 2018.

And a follow-up to that, so, Phong, you mentioned that you saw a higher number of, I guess, new customers in the quarter, is that right, I assume that net new customers, can you just provide some more color there, did they come in through kind of the three desktop program where they are excited about version 10.9, what was -- what drove that?

I think the big driver is we’re increasing -- throughout the year we have and now you are going to see more of a step function increase in our marketing and our marketing towards prospects, whether it would be through our symposium efforts or field marketing efforts, acquisition of prospect list or focusing our account executive or inside sales folks and prospects. We are starting to do more of that as an organization. And with that we have a better story to tell in terms of our product roadmap, in terms of our capability. So, I think, it is a -- it is sort of a culmination of many different things that we are doing and we hope that trend continues in the future. And then last question on operating margins, Phong, you mentioned, the willingness to go into the single-digit op margin range if necessary. Any thoughts as to the timing or duration and that is this a one quarter event next year, could it be the multi-quarter and multi-year event?

I don’t think we are quite ready to provide sort of quarterly direction on what our margins will be. I do think it’s not going to be a single, if we were to approach that, it is not going to be for a single quarter, right. I think it’s a long-term investment strategy and are way out and above single-digit margins will be mostly driven revenue growth over time.

Great. Thank you.

Thank you. Our next question comes from Frank Sparacino with First Analysis. You may begin.

Hi, guys. Just wanted to go back on the cloud subject for a moment and give a sense as to do you feel like the sort of lack of growth in the cloud business has been held back by MicroStrategy, it seem like, given the talk around AWS and just sort of the general industry trend, particularly from some of the stores and processing guys moving to the cloud as well that inevitably you would start to see that impact on the front-end. So just trying to figure out maybe why you aren’t seeing the same type of demand moving to the cloud as others are?

I guess, I would say there that our cloud business is, this is small portion of overall business and there’s going to be a large on-premises business and enterprise software for a long time to come, and so we can’t really underestimate that. I think in general our growth is going to be driven by our sales and marketing and service programs in the near-term than our product programs over the midterm. And so when we look at our overall license bookings, it’s the best thing we can do is ramp up our sales and marketing services programs to drive those and that’s going to drive cloud growth, as well as on-premises growth of the business.

I think other piece, Frank is, our cloud strategy has evolved over time, right, two years ago we were focused on hosting a private cloud for our customers where we would host servers, we would host -- we would provide support and we provide licenses. And as you know, we migrated to an AWS focus strategy, where AWS provide the cloud hosting. We provide the cloud support and we provide licenses. And we continue to -- based on our customer demand and what’s best for our business, we are evolving that towards a what we call MicroStrategy and AWS where the customers have the direct relationship in cloud hosting and cloud support, we really provide the licenses. So as we evolve our strategy, we do see sort of unsteady or uneven revenue growth in cloud. Also the other piece is, we have greater exposure to what I will call Fortune 500 companies and what you probably see is Cloud BI providers out there, who are selling to much smaller companies. So the larger companies that we deal with aren’t necessarily as comfortable especially financial services institutions moving their entire BI in data warehouses in the cloud. So we deal with, as Mike said, have a lot more customers who just want to stay on-prem, like we saw in Q2, they made a one and half year experiment to move to the cloud and they have moved back to on-prem base after that.

And Phong, maybe just lastly, just I have the numbers right, sales and marketing headcount 635 at the end of the quarter is down slightly from Q2 despite some of the investments you’re making. Are those figures correct, I mean, I would expect it to be up there in Q3, obviously, you just starting to invest, but just want to make sure on that sequential change?

That’s right. It went down, I think, from 642 to 635, so a very small, I think, 1%. And like I said earlier, we do plan on increasing sort of our headcount. It will take time to hire. But the other thing around marketing is, most of our investments that you will see in marketing has come in form of external third-party dollars, right, weather it would be tradeshows or whether it would just corporate marketing and brand marketing. So, a lot of the investments you’ll see there are going to be more just in terms of dollars and costs as you push the headcount.

Thank you, Phong.

Thank you. Our next question comes from Greg McDowell with JMP Securities. You may begin.

Hi. Thank you. Just one quick question, I was thinking about sort of the Q4 operating plan and if revenue came in sort of above your internal expectations, would you ramp up investments faster or would you just take a kind of a wait-and-see approach, and likewise if revenue in Q4 was below your expectations, would you sort of ramp up and bring some of these investments in sooner than you expected for your 2018 operating? I was just wondering sort of the sensitivity of how Q4 plays out and how that will potentially impact, how you’re thinking about the piece of investments in 2018? Thanks.

Hi, Greg. I don’t think we are planning our investment strategy on a quarter-to-quarter basis, meaning we are not going to say, we are going to decrease or increase our investments in Q1, because we had a good or bad Q4. I think we are thinking about this much more strategic and long-term perspective. The things that will cause our Q1 investments to go up or down will be the success of what we do in Q4. So we see high ROI in a particular marketing campaign or channel, we may increase it going into Q1, if we don’t see something as effective we may decrease it. But it won’t be driven by our revenue. I think we are thinking about it much more long-term.

That’s fair. Thanks. And last question, the strategic hires you need to make and it -- sounds like it stands across sales and marketing and product development. But how is the candidate pipeline look, have you already started sourcing some of those candidates or you really wait until beginning of ‘18 that you look in earnest for some big candidates? Thanks.

I think we have increased our candidate pipeline significantly. We have hired a new Head of Talent acquisition in Q3 that we are very excited about and she started to build a bigger recruiting team around the world. A lot of this is campus hiring, right, so imagine 50 people in China, 50 people in Warsaw, 50 people in the U.S. across campus hiring. Those folks will get offers in Q4 depending on -- they are getting offers right now, right, and depending on whether they are ready to start in December or January or fall of next year will be when the cost show up, so a lot of it is from that side and then the other big push is on experience hiring with executives around the company to fill in spots that we needed. So I would expect to see, obviously, you didn’t see a big ramp up in Q3. I wouldn’t expect to see a big ramp up in Q3. You’ll start to see some of that in Q4, but the timing is usually people are starting in November, December, you won’t see a lot of cost show up, you will see the cost price show up more as you go throughout the next year.

Great. Thank you.

Thank you. [Operator Instructions] I am currently showing no further questions at this time. I would like to turn the call back over to Michael Saylor for closing remarks.

Okay. Thank everyone for their time and their support. We look forward to speaking with you again in January. Have a great holiday season.

Ladies and gentlemen, this concludes today’s conference. Thanks for your participation and have a wonderful day.