Thank you for standing by. This is the conference operator. Welcome to the OpenText Corporation's Fourth Quarter Fiscal 2024 Financial Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an analyst Q&A session. [Operator Instructions] I would now like to turn the conference over to Harry Blount, Senior Vice President, Investor Relations. Please go ahead.

Good afternoon everyone, and welcome to OpenText's fourth quarter fiscal 2024 earnings call. With me on the call today are OpenText's Chief Executive Officer and Chief Technology Officer, Mark J. Barrenechea; and OpenText's President, Chief Financial Officer and Corporate Development, Madhu Ranganathan. Also joining us are Todd Cione, President Worldwide Sales and Paul Duggan, President and Chief Customer Officer. Today's call is being webcast live and recorded with a replay, available shortly thereafter on the OpenText Investor Relations website. Earlier today, we posted our press release and investor presentations online. These materials will supplement our prepared remarks and can be accessed on the OpenText Investor Relations website, investors.opentext.com. I'm pleased to inform you that OpenText management will be participating at the following conferences. The Virtual Oppenheimer Technology, Internet and Communications Conference on August 12; Virtual Morgan Stanley Nasdaq Investor Asia Conference on August 20th and 21st; Deutsche Bank's Technology Conference on August 29th; and Citi's Global Technology Conference on September 5th in New York. And now onto our Safe Harbor statement. During this call, we will make forward-looking statements relating to the future performance of OpenText. These statements are based on current expectations, assumptions, and other material factors that are subject to risks and uncertainties and actual results could differ materially from the forward-looking statements made today. Additional information about the material factors that could cause actual results to differ materially from such forward-looking statements as well as risk factors that may impact future performance results of OpenText are contained in OpenText’s recent Forms 10-K and 10-Q as well as in our press release that was distributed earlier this afternoon, which may be found on our website. We undertake no obligation to update these forward-looking statements unless required to do so by law. In addition, our conference call may include discussions of certain non-GAAP financial measures. Reconciliations of any non-GAAP financial measures to their most directly comparable GAAP measures may be found within our public filings and other materials which are available on our website. And with that, I'm pleased to hand the call over to Mark.

Thank you, Harry and thank you all for joining today. We kick off fiscal 2025 with the launch of OpenText 3.0, Information Reimagined. Simply put, our vision is to be the best information management company in the world and our strong belief is that information elevates every individual and organization to be their best. We're very excited about our market today and the significant opportunities directly in front of us. I'll speak to our Q4 results and outlook in a moment, but I want to start today's call by clearly outlining our top priorities. First, build an even stronger competitive advantage with information management, business cloud, business AI and business technology. Competitive advantage is everything and information management is the center of business transformations today, led by data driven decisions, next Gen cloud automation, foundational information security and promising AI. Titanium X or our Cloud Editions 25.2 is on target for delivery in fiscal 2025. This is our next generation autonomous cloud, strengthening our competitive advantage and the platform for information based transformations. Second, accelerate cloud revenue growth. We delivered 7% cloud revenue growth in fiscal 2024. We're targeting up to 5% organic cloud growth in fiscal 2025 and with a laser focus on key growth programs, strategic partnerships and Titanium X, we are building to 7% to 9% organic cloud revenue growth in fiscal 2027. I'll get to our growth programs in a minute. Third, drive upper quartile margins and capture the large margin opportunity we have over the next four to eight quarters. In fiscal 2024, we delivered $2 billion in adjusted EBITDA dollars, or 34%, which included 10 months of ultrahigh AMC adjusted EBITDA and our F 2025 targets are up to 34% with no AMC adjusted EBITDA. We're not pausing at 34%. We expect fiscal 2026…

Thank you, Mark. I am excited and grateful to be a part of the OpenText team. Over my first hundred days in the company, I've worked to bring my learnings and experiences from 30 years in the technology industry at Microsoft, Oracle, Apple and a few others to contribute to OpenText 3.0. And I've immediately prioritized my time to connect with, learn from and execute alongside of our team, our customers and our partners. And it's these early relationships and experiences that directly shaped our F 2025 plan with our worldwide sales team and that plan is launched and it's actually being executed right now. Let me outline our priorities in that plan, including what's different. First and most importantly, my top priority is people. I'm a believer that there's a direct correlation between great people and great results. We have a very strong foundation of people and it's my ambition to build the highest performing and most efficient sales force in the world and for the best information management company in the world. We've already made several changes in the sales force that are now complete and we're off to a fast start. We now have one unified worldwide sales team with continued global coverage and this means we have an aligned approach globally to everything that we're doing, while we still enable flexibility to serve our customers locally. We've also moved quickly to attract new and elevate existing talent within worldwide sales. We're attracting outstanding sales talent, who have proven backgrounds at leading technology companies like Apple, Tricentis, Microsoft and Salesforce. I've worked previously with many and there's more to come. With the broader sales team we're building a structured approach to refine the consistent and modern commercial capabilities needed to win in this dynamic marketplace of cloud,…

Todd, thank you. I'm thrilled to be joining the call today to provide an update on the renewals business at OpenText. Today I'll address two areas F 2024 update, including Micro Focus and our key priorities in the year ahead for F 2025. Let's start with F 2024. As Mark noted in his opening remarks, renewal performance is the foundation on which we build growth. And there's no question OpenText has a long history of predictable and sustained performance despite some of the world's most disruptive events over the past decade. F 2024 was no exception. Our renewal rates finished at 95% for off-cloud and 92% for cloud, excluding Micro Focus. And on that note, I'd like to briefly make two comments on metrics. First, renewal rates are a primary instrument in any recurring revenue business. There are also different variants of this rate. On our cloud business, we have been publishing a gross renewal rate or GRR, which does not include any expansion or upsell on those renewals. In F 2025, we intend to publish net renewal rates or NRR, which aligns better when large cloud vendors approaches. This will capture insight into consumption and expansion and give you a more complete view of our performance. Factoring in these dynamics will highlight rates that are even stronger. For example, had we applied this methodology in Q4, the cloud renewal rate would have been in the mid-to-high 90s. Second, we have other primary instruments beyond renewal rates. These include on time renewal rates, annual price adjustments, cancellations and past due rates. Taken together, these metrics tell a story about the motion of the business and over time, if they're in the green and in agreement with each other, then one can expect continued strength. And I'm pleased to say that…

Thank you. [Operator Instructions] First question comes from Raimo Lenschow with Barclays. Please go ahead.

Thank you for the detailed outlook from you guys. Congratulations and I'm looking forward to an exciting future. Could we just spend a minute on Q4 and try to dissect that? Because obviously I listened to your comments, that there was some level of disruption. You also had the license to cloud migration, which is impacting numbers. Could you help us understand a little bit how much of what we saw in Q4, especially on the license side, was macro related versus kind of internal things that, kind of impacted the quarter? And then I had one follow-up.

Yes, sounds great, Raimo. Thanks for the question Mark here. No, it's not macro related. As we noted in our remarks, it's our continued license to cloud transition. We're an annual business as well, so quarters will vary. We note that our cloud is up. We had strong free cash flow. Our operations were just stellar in Q4, but the two strategic programs were very unique for us. The first is the divestiture and I know the world sees a press release that we've divested our mainframe business, but the work was strategic, concluded in the quarter, but we had to transition near 800 employees. We had to split out systems, transition service agreements and we had our sales force, NPS force, talking to a lot of customers because they're mutual customers and that had an impact. We also took our managers and our leaders and did very detailed business optimization planning. The execution is complete and was complete in early July. But this is all towards a stronger open tax and a stronger F 2025. And so it's on us, it's not on the macro, it's complete. And as we look here into the year, as Madhu highlighted, we think the license business will be constant plus or minus 1% organic cloud up 5% this year and up to 34% adjusted EBITDA in 2025, up to 36% in 2026 and up to 38% in fiscal 2027.

Yes, perfect. Thank you. And on that, if you think about those, the margin progression you outlined for the coming years, like how much of that is kind of efficiency gains that you can still drive forward versus like just growing revenue on a kind of controlled cost base that is driving that forward? Thank you.

Yes, just a small point. It's over the next, really four to eight quarters. So that coming year. So, yes, so look, there's no doubt that we're going to, just to recap, in 2025, we're looking up to 34% adjusted EBITDA, in 2026 up to 36%, and in fiscal 2027 up to 38%. So we're not resting at all. I mean, we're running right through the numbers. How do we get there? There's no doubt that higher revenues are going to help continued talent, design and location balancing. We have opportunities to improve cloud margin. Titanium X, we have some incredible autonomous features that are going to let the machines do the work and not the humans. And the machines are less expensive, if you will. We've deployed our first versions of AI as Todd talked about. We have our sales force responding to RFPs, customer requirements, tech support as well, which will drive down costs. And most notably, we're going to be adding more SaaS workloads that are at higher margin. So it's a collection of things that will rise us back into the high 30s, which we've historically operated in, and we see a clear path to getting back to even in larger scale and even with a higher cloud mixed.

Okay, perfect. Thank you. Well done.

The next question comes from Steven Enders with Citi. Please go ahead.

Hey, this is George Kurosawa on for Steve. Maybe just to start with on macro, I know you described that there wasn't really macro impact, but maybe just under the hood, if the aggregate environment was stable, were there any kind of sub areas within your portfolio where you saw relatively stronger, weaker, anything kind of moving up or down the priority stack?

Yes, sounds great. Welcome, George. A couple comments from us. As you go through our IR materials, as Madhu noted, the team has done a fantastic job simplifying the materials. You'll also see in the materials we're showing AMC revenues. So when we start to speak about ex-AMC in comparisons, it's just very clear. You'll see the materials, we also, on an annual basis show by our business area the percent of revenue. You'll see the strength in content. Our content business is going incredibly strong. I looked into the content business network and ITOM, I believe are going to be standouts for us on that up to 5% cloud organic growth. Look, we all read the same reports and we factor this into our outlook for the year. I mean, the IMS got a great report out in July that talks about GDP for advanced economies around 2% Europe sub 1%. But we have factored this all in and to the extent the lights become greener, our path is even more upward than what we're presenting for fiscal 2025.

Okay, great. And then just a follow-up on kind of cloud booking strength kind of. And how that translates over to revenue? I think last quarter you mentioned this phenomenon with kind of ramping deals and that maybe pushing out revenue recognition. How did that kind of trend in this quarter and any updated thoughts there?

Yes, I would say it's consistent sort of quarter-over-quarter, were more awareness. I think we're going to improve on it quite candidly. But we ended the year at 33% bookings growth and translating into what our renewal rates plus new bookings up to 5% cloud organic growth in 2025. We've upped our bookings target to 25% here in the quarter. We'll update along the way. But we're pleased coming out of the gate in Q1 at 25% bookings growth and up to 5% organic. Todd, anything you want to add to that?

No, we're just excited about executing the F-2025 plan. We have a healthy pipeline and we've started fast.

Got it.

Right on. Thank you, George.

Thanks for taking the questions.

The next question comes from Thanos Moschopoulos with BMO Capital Markets. Please go ahead.

Hi, good afternoon, Mark giving your comments on your plans for capital return over the upcoming year, should we take that to mean that you'll be putting M&D into a bit of a backseat, relatively speaking? Wrong interpretation.

Yes, Thanos, thanks for the question. Well, I'll start with it's all about the highest return of capital. And as we look into F-2025 right now we're buying our stock or said a little differently, we're buying ourselves. And that's of the highest return you'll see in our investor materials. M&A remains a part of our strategy, but heading into F-2025, we're focused on cloud organic growth, capturing large margin opportunity that we outlined and delivering to our shareholders the largest capital return in our history and that's our focus. M&A will remain a part of our strategy. We'll assess how to deploy that additional capital. We've assessed it coming into the year, and to a degree we're buying ourselves, so I'd include that in M&A strategy as well.

Great. And can you give us maybe more color in terms of what you're seeing with aviator and just generally customer interest in content management to set the stage for subsequent AI? I guess the feedback from a lot in the industry has been that there's a lot of experimentation, pilots happening, not a lot as far as large scale deployments. Is that consistent with what you're seeing right now?

Yes, it's going to be steady progress. It's going to be steady. Then we're going to see a step up. There is no doubt that this technology and approach is adding value. And we're engaged literally in hundreds of discussions around AI, hundreds of discussions, and it's helping us win. You're seeing this reflected in our strength for cloud bookings, in our confidence, in our getting to high single digit organic cloud revenue growth. And the costs are coming down, the time to value is coming down. The use cases are getting crisper. And if you look at the evolution of content management, first you digitize things and we put them into folders. We then were able to search, then we got to be able to exchange that outside of firewalls. Then it moved to the cloud. And now that next evolution of knowledge workers is about engaging with that content in whole new ways. So we're making progress, we're driving down costs, we got more use cases, we're embedding it more, we're engaged in more conversations, and we have customers speaking with us, Nestle and their content and AI Johnson & Johnson in the supply chain, Robert Bosch, North America engaging in their content platform. I think the strength will come from content, it will come from the business network and it will come from ITOM. And that's where the next wave that we see. But it's going to be steady progress, more use cases, and then there will be some inflection point where steps up, but it continues to be very real.

Great. That’s helpful, thanks.

The next question comes from Samad Samana with Jefferies. Please go ahead.

Hi, good evening. Thanks for taking my questions. So maybe first, Mark just since you mentioned it, my ears perked up a little bit. You talked about a global outage. You didn't mention the specific vendors. So I won't do that either. But you said that it's leading people to seek alternatives. So can you maybe help us understand, is that something specific to OpenText where it's driving alternatives as in business for you or is that just you thinking through? But the consequences are help us understand what you mean by that?

Yes, I mean the outage may be over, but the impact is not. Our cloud was unaffected, our company was unaffected by, and I'm not here to throw names so I won't. And we weren't affected because we use our own software and we deploy best practices. And so conversations are beginning around what are the alternatives to that particular vendor in their lack of quality, their lack of process, technology deficiencies. And top of the stack for us coming into the year on the product side is content BN, ITOM and driving security across everything we do, driving AI across everything we do. So yes, it's beginning to drive new conversations on with RAEs on our security portfolio.

Interesting. Thanks for sharing on that. And then as I think about the up to 5% cloud revenue growth, when you think about the -- if you could give us some guardrails around that with the building blocks. And what I'm trying to ask is, when you think about that net retention number versus call it like new products being introduced versus I guess again pumping the prime inside of the base and bookings that you've already gotten this year, how should we think about where that range lands? What's the biggest flex factor in there that gets you to that 5% number or somewhere below it?

Yes. So, up to 5% organic growth and driving towards high single digit by 2027. So we're not resting in the up to 5% organic. So let me highlight a couple things on the renewal rate and maybe Todd a little bit about what he's seeing in the field. The first is just driving expansion of our business clouds. And again, our content business network and ITOM business are going to lead the way. Customers can see this reinvention the reimagining of knowledge workers. Second is with Titanium and Titanium X, the main driver is our SaaS portfolio. And adding more SaaS to off cloud workloads or existing private cloud workloads or just independent SaaS deployments are going to be incredibly helpful. We got partner system, partner ecosystem expansion. We're working at new strategic levels with Microsoft, SAP, new relationships with Salesforce, Google of course, and then just driving against security and AI across all that we do. And that's going to lead us to that higher end of the range that we talked about. Maybe, Paul, a bit on the cloud renewal side and Todd, your views on the field.

Yes. Thanks, Mark. I guess let me first say again, our gross renewal rate for the cloud really understates the strength of the business performance that we have. So for that reason, now that we have a scaled cloud, we're moving to this industry standard of using NRR. And through that lens again in Q4, we'd be in the mid to high 90s. Let me tell you about how we expand on the renewal side. So our strategy there is really three pronged, our pricing policies and controls to raising commitments for our consumption based renewals and three adding new services like the customer success and premium support offerings I mentioned. So those strategies drive significant expansion on rules and are in addition to actually large numbers of lead paths, opportunities that we do as well for cross sell, opportunities that flow into Todd's team. So it's going to give you a better representation of the business performance in that foundation that Mark talked about, that on which we build the growth. And then with my partner here, Todd will build.

Yes, Paul, you had me at cross-sell. That's a big opportunity and something we're executing right now across our specialized by business cloud sales tforce. So we have great customers who depend on our content business, who depend on business networks, on ITOM and our cybersecurity business. And we have a great opportunity to cross sell and we've launched programs to be able to accelerate that now in F 2025 and I think the pipeline reflects it.

Very good. I appreciate the comprehensive answer, everybody. Thank you.

Thank you.

Thank you.

The next question comes from Paul Treiber with RBC Capital Markets. Please go ahead.

Thanks very much and good afternoon. Firstly, just a clarification question, just in light of the revised capital allocation strategy or the more flexibility there, there's no change in the 2027 revenue aspirations, which implies that that's organic. Is that the case? And that you're not assuming acquisitions to make those targets?

Paul, you broke up a little bit, so I couldn't hear it fully.

Yes. When you mentioned, Paul, this is Madhu here, the F 2027 could you just repeat that part of the question?

Is the F-2027 aspersions, is that purely organic? And could you confirm it doesn't include acquisitions?

Yes. So again, I've stated our F-2025 strategy, right. And the F-2027 number is always to revenue. Over the next three years, it's always to revenue. And we have many paths to get there. But, Paul, be very clear in 2025 that we are focused on the highest return of capital, which is returning up to $570 million this year, or 90% of our free cash flows, and driving up the 5% cloud organic growth and accelerating that into the high single digit. So is there some M&A in the 2027 number? There's probably some. There could be some small M&A in the 2027 number, but that's not the focus at all. Right. It's not the focus at all. Our focus is driving our 2025 cloud organic growth, continuing that expansion rate. And obviously in the model, the vast majority of fiscal 2027 would be organic. So I think that's the best way to answer it.

Okay. Thanks for that second question.

Is that clear? I mean, is there anything to, to play back? Is that clear? Is 2025 clear?

Yes, definitely clear.

Okay. I just want to make sure, so...

The second question, and just with the focus on return metrics that you've emphasized with the capital allocation, how should we think about, and maybe I need to wait for the circular, but how should we think about like, incentives for management compensation, would it also align or incorporate more return metrics?

You'll see the plan. We're actually making four disclosures in the CD&A. We've listened intently to our shareholders. The committee and the board has listened intently. The talent and comp committee and the board have made a, we're making four disclosures as to advancements in our comp program. You'll see it in the CD&A. The standard approach to attracting senior talent is based on revenue and margin. Right. And so you'll see revenue and margin and our annual compensation, and then longer term compensation is tied to getting the stock up as benchmarked to the NASDAQ.

Thanks for taking the questions.

Yep.

Thank you, Paul.

The next question comes from Stephanie Price with CIBC. Please go ahead.

Hi, good evening. Thank you for the additional disclosure with the quarter. Madhu, may be this one for you. I noticed in the PowerPoint that overall constant currency organic growth was roughly spot in fiscal 2024. And you do mention that Micro Focus had organic growth during the year. Could you give us a little bit more color on Micro Focus here? And maybe also just excluding AMC and how we should think about organic growth at Micro Focus post the AMC divestiture.

Yes. So I would say let's recall back to where we had set the micro focus baseline at $2.3 billion. And vis-à-vis that given the renewal rate performance in fiscal 2024 for the entire year, we did organically grow Micro Focus, we met our plan. I think the ex-AMC, including AMC, what I will say is that we had the AMC assets for 10 months. It's not like we had the AMC asset for two months. So I think it's important to measure Micro Focus organic growth at the end of June 2024 more holistically as Micro Focus, including AMC. And we actually not only brought down the declining rates in many different product lines and portfolios, we also did very well with the AMC business. So yes, putting all of that together, Stephanie, we did meet our plan for Micro Focus organic growth.

Great to hear, okay. And then maybe I guess another one actually from you Madhu, just on the restructuring that you announced a few weeks ago, can you talk a little bit about the areas where the cost savings are coming from and how you think about the timing there? I think we might have calculated a slightly higher margin benefit. So just wondering if you can walk through, is the reinvestment along with the restructuring as well?

Yes, so a couple of things. One is, and I let Mark take a part of the question as well. So where did it come from? Again, think of this as continued efficiencies in talent, talent structure, regions, right as Mark mentioned, placing a talent in the right regions where a lot of talent exists. And the cost differential is really meaningful for us from a cost structure and profitability perspective and certainly took a look at layers of management. At all levels and that was part of the restructuring as well. Now to the question of why not more EBITDA expansion of the energy structure, one comment I'll share, which was in our Form 8-K is in Todd's area as well as in Paul's. We are going to be investing in 800 positions and we're going to be investing earlier in the year to benefit fiscal 2025 and going into 2026, and that's 800 positions in sales and services. So with all of that investment and the restructuring, which again we did in early part of July to benefit the entire year, we are able to, on a net basis increase EBITDA by 100 basis points. Mark, did you want to share any thoughts?

Yes, Stephanie, I would just add one piece, read your report and thank you for the report. We kind of viewed the starting point a little different than you do, which is when you look at Micro Focus and you take out AMC, their adjusted EBITDA profile is extremely low 30s. So your starting point is lower and I think you need to factor that in when you look at our target for fiscal 2025, up to 34%. So you have to have to go, what's your starting point? So I think when you look at Micro Focus ex-AMC, their adjusted EBITDA starting point is very low 30s. So the step up is a little higher. So plus all the investments and good things that Madhu has talked about, so up to 34% in 2025, up to 36% in 2026 and up to 38% in 2027.

Great. Thank you for the color.

Thank you.

Thank you.

The next question comes from Richard Tse with National Bank Financial. Please go ahead.

Oh, thank you. I don't know if Todd's still on the line, but I had a question for…

Yes, he is.

Okay, great. So presumably you're brought on to help add to OpenText organic growth aspirations. You've been there 100 days, you said like as an outsider, what do you think really have been the challenges from your vantage point to accelerate organic growth here?

Yes, thanks for the question and I'm excited to be a part of the team. I think the challenges are really just big opportunities. We've got a great foundation, we got a fantastic installed base, we've got products that provide customers with really deep value and we've got a lot of upcoming innovation as well. So I see huge upside opportunities. There's a unified worldwide sales force that we now have that we're doing things a lot more consistently while we're still balancing executing locally. And we've kept that deep business cloud specialization in place as well. And you couple that with some exciting talent that we're promoting from within, we're attracting from the outside and we're pretty excited about the growth potential.

Okay. And it's like a related question.

And Richard, before you get to your second part of your question, I'll give my perspective too. Companies as you scale, you reach certain inflection points. And as we approach $6 billion in revenues, we've approached an inflection point. And it's such a delight of having Todd onboard as our President of Worldwide Sales to drive that consistency across all our selling theaters and teams and processes and obviously we expect great things in our partnership. Paul's promotion on to President, Chief Customer Officer and Madhu’s promotion as well with Operations and Corporate Development. So I think you reach a point in your evolution, and we're not stopping at where we are in our evolution by any means, but we've gotten to a point of scale where we should have, need a single leader with a strong vision on leading a single sales organization.

Okay, great, thanks. I do have a sort of follow-up question on that. So you laid out a fairly detailed plan at the beginning of that plan. What would you consider sort of the biggest driver for organic growth? Meaning sort of those things you laid out, where do you get the biggest bang for the buck here?

Yes, I think, thanks for that follow-up question that's people, people, people. So having the right people really focused in the right roles with the right enablement, empowered and focused, that's where we're going to get, I think, a significant step up as well. And look, again, we have great customers that depend on OpenText technology. And the more that we will consistently make sure that we're connecting and demonstrating a clear value proposition consistently globally, I think we get a significant return there as well.

Okay, great. Thank you.

Thank you, Richard.

The next question comes from Adhir Kadve with Eight Capital. Please go ahead.

Hey, guys, thanks for taking my question here. May be one for Todd or potentially may be for Paul. You've talked, talked a lot about people today. Given that the macro continues to be somewhat uncertain, budgets are continually scrutinized. Todd or Paul, how have you guys kind of altered your approach to the sales organization versus those previous cycles that you've guys have kind of worked through?

Yes, I don't know that I would say significant alterations other than making sure that we're excellent at the basics like I described. Rigor is a really big part of what we're focused on, and that also includes innovation and allowing our teams to be more efficient by leveraging technology like our own AI internally, as I mentioned, for RFPs and proposal generation. We've got a long list of other internal innovations that we'll launch this year that will boost their efficiency as well, so I think those are key parts. Paul, anything?

I guess, to tack onto that, one of the areas that comes to mind that we've adjusted a bit is in professional services. So as we look ahead to next-gen, we look ahead to AI and the talent market that's out there, that all of our customers are looking to source this unique skill set and we know that if we can build that up in a rapid way kind of internally, and also pulling in some outside town as well, that we're going to have a differentiator in those conversations. These are tough resources to find. So having that within OpenText, having that as a seat at the table, partnerships with our customers, and giving them the access to that skill is an important priority for us in the year ahead.

Great. And just as a quick follow-up, maybe just on AI Mark, you continue to say that researching and piloting, what's the gating factor there that's kind of stopping customers from really pushing the accelerator on their AI deployments?

Yes, we're also winning. Right? So just our bookings growth, there's unequivocally AI wins in there and AI related wins. I think an interesting dynamic that I'm seeing is that if I look at our couple hundred interactions in detailed conversations and our active work going on right now, they're around big projects, they're not around small gains, they're around big gains with our customers. It's an interesting dynamic that this is a problem set that requires investment. But customers are not thinking of small problems. They're approaching AI with solving some of their biggest challenges that they want, looking at billion dollar supply chains and optimizing billion dollar supply chains, looking at $50 billion in contracts and how to optimize them. Looking at every single trade in the United States at a particular moment. So it's an interesting dynamic that is about big data sets and solving big problems. And I wouldn't have said that a year ago, but I think that's a pattern. And so as the cost goes down, the ease of deployment goes down, I think we'll also see maybe smaller use cases. So that's a dynamic all throughout there. And when we get to that point, we're in a premier position to just solve big problems for our customers.

Great, thanks guys. I’ll pass the line.

Thank you.

I'll now hand the call back over to Mr. Barrenechea for closing remarks, please.

Yes, fantastic. I'd just like to go back to two questions and wrap up. On the comp and CD&A, I made a point, may have made it too fast. One is we're doing something very unique this year. When you look at our CD&A or compensation discussion analysis, we're making forward disclosures. And in that you're going to see that the talent and comp committee of the board have set higher bars on leadership, both on growth and margin. I think that's the key takeaway. And so we're doing a forward disclosure and the board and the committee are setting higher bars. We look forward to your feedback. On the F 2027 plan, I want to be very clear, is completely in our hands, and it is manifestly organic growth and there should be no ambiguity about that. In terms of a wrap up, I'd like to just end where we started. We're extremely focused on advancing our competitive advantage because competitive advantage is everything and we're on track with Titanium X, which is the next big step up. We're focused on delivering cloud revenue growth 7% in 2024, up to 5% organic growth in 2025 and 79% growth in 27. We are focused on capturing the significant margin opportunity in front of us from up to 34% in 2025, 36% in 2026, up to 38% in 2027. And we're excited about our disciplined capital return and having the highest capital return in our history this year of up to $570 million with our new $300 million buyback and our dividend raise of 5%. Thank you all. We look forward to seeing you at our upcoming conferences at Oppenheimer, Morgan Stanley in late August, Deutsche Bank late August and Citi’s Global Tech Conference in New York City, September 5th. Thank you for joining us today. That ends today’s call.

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.