Shutterstock, Inc. (SSTK) Q1 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2020 Shutterstock, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] It is now my pleasure to introduce Senior Vice President, General Counsel and Corporate Secretary, Heidi Garfield.

Thank you, operator. Good morning, everyone, and thank you for joining us for Shutterstock’s first quarter 2020 earnings call. Joining me today is Stan Pavlovsky, our Chief Executive Officer and Jarrod Yahes, our Chief Financial Officer. Please note that some of the information you will hear during our discussion today will consist of forward-looking statements, including without limitation, the impact of COVID-19 on our business, long-term effects of our investments in our business, the future success and financial impact of new and existing product offerings, our future growth, margins and profitability, our long-term strategy and our 2020 guidance. Actual results or trends could differ materially from our forecast. For more information, please refer to today’s press release and the reports we file with the SEC from time-to-time, including the risk factors discussed in our most recently filed quarterly report on Form 10-Q and our annual report on Form 10-K filed with the Securities and Exchange Commission. We will be discussing certain non-GAAP financial measures today, including adjusted EBITDA, adjusted EBITDA margin, adjusted net income, revenue growth, including by distribution channel, on a constant currency basis and free cash flow. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measure can be found in the financial tables included with today’s press release, which is posted on the Investor Relations section of our website. Finally, please refer to the brief information deck we posted on our website that contains supporting materials for today’s call. And now I will turn the call over to Stan.

Thanks, Heidi. Good morning everyone, and thank you for joining Shutterstock’s first quarter earnings call, and my first call as CEO. I hope everyone is keeping safe during this period. This is a memorable and turbulent time to be taking the helm of Shutterstock. And I'm grateful that the management team and our global employees are up to the challenges that lie ahead. I am truly excited to begin this journey as Shutterstock CEO. We have in front of us a tremendous opportunity to leverage our content marketplace platform and leadership position with focused execution around innovation, content services, and data and insights in order to deliver strong returns to our shareholders. I want to begin my remarks by thanking all of our Shutterstock employees. Our first concern has and continues to be the health and well-being of our employee population. We are following local government guidance in implementing mandatory work from home policies and our employees effectively transition to working remotely and have been incredibly dedicated and focused during this time to offer continuity of service to our clients. Through this transition Shutterstock’s operations have been functioning normally and we are able to serve our clients without disruption. Our technology infrastructure, global customer service operation, content review function, and marketplace operations are functioning business as usual, and are able to respond to the business needs that we have. I would also like to thank Shutterstock’s contributor community for capturing touching and impactful visual stories to showcase the global nature of the crisis that we are in. Their content portrayed the heroic efforts of first responders in countries and cities around the world, as well as the complexities of daily life during the time of social distancing. For example, collector David from India and [Vika Photo] from Spain contributed strong image and video content illustrating the local impact on their communities to Shutterstock allowing our customers to visually highlight how we are living during this challenging time. Like our contributor community as a business, we remain resilient and optimistic despite these uncertain times. From a market demand perspective, we have seen variances on a country-by-country basis, as productivity in regions across the world is impacted by the trajectory of the pandemic. Overall, our first quarter 2020 revenues of $161.3 million declined 1% from last year. The Asia Pacific region, which suffered early declines in January and February, is optimistically, showing signs of returning to normal levels growing approximately 3% in the quarter on a year-over-year basis, led by strong performance in Japan and China. Our revenues from the European region declined 3% for the quarter driven primarily by 10% year-over-year decline in March, specifically driven by performance in the U.K., Italy and France. Total revenues in the U.S. and Canada declined 1% for the quarter and 5% in the month of March. Europe and North America are seeing some signs of improvement in April as compared to the March declines. Our adjusted EBITDA in the first quarter was $22.1 million, representing a margin of 13.7%. We are committed to cost management and margin enhancement, and investors should expect to see the benefit of the actions we are taking over the course of the year. This will require at times incurring expenses as we realign resources and pair back in some areas and invest for growth in others. For example, we recorded $2.3 million cash expense for severance in the quarter. That is included in our adjusted EBITDA. From a channel perspective, we are seeing a larger impact on our enterprise channel as compared to ecommerce in the current environment. The enterprise channel, as expected experienced a down quarter of revenues, which was exacerbated by COVID-19. This was offset by performance in ecommerce where we saw increased customer engagement and paid downloads year-over-year. This is a critical time for businesses as they shift the way they market their products and services and try to communicate with customers and reach new audiences. The pandemic has also led to significant digital transformation initiatives among small and medium businesses around the world as they adjust their offerings and communications to be available online. Now, some areas of advertising spending has been impacted 30% to 50% due to the reductions in campaign values. We have not experienced that type of impact. Partially due to the wide range of used cases for Shutterstock’s content, from global websites, to streaming video on demand service and podcasts, and our customers need to continue marketing their products and services. We are seeing even a greater variety of used cases for our ready to use content and creative services as businesses accommodate for new budget guidelines as well as the new mode of working from home and social distancing policies. We are working closely with our clients to deliver the custom products and services they need at this time. And we'll continue to innovate and pivot with our customers as they address returning to work in the upcoming days and months. While we addressed the effects of the global pandemic on our customers and our business, we are still committed to continuing to invest in our people and business in order to drive growth. First, I want to highlight two strategic hires that we made to the Executive Team in the past quarter, Avi Muchnick, as Chief Product Officer, and Jamie Elden as Chief Revenue Officer. Avi is a true entrepreneur and innovator heart. He comes to us after selling his prior company to Adobe, and is highly experienced in the creative and marketing software ecosystem. In addition to making improvements to our core marketplace, we look forward to Avi generating additional products and ancillary services that create new revenue streams and reinvigorating Shutterstock with the innovation culture that drove the genesis of the company. Jamie leads our enterprise sales team and is a seasoned sales leader with extensive experience successfully building and growing world class enterprise sales teams across TV, digital, social, programmatic and over the top media. With Jamie's arrival, we are further aligned in the sales force realignment that we started six months ago. We believe the current environment will be an opportune time to add key additional strategic sales talent under Jamie, as we continue to optimize our sales and client service teams, by geography, and customer segments. Furthermore, we believe there's a tremendous untapped opportunity to optimize our global market packaging, and deliver a more fulsome suite of services to our enterprise clients, including custom content and editorial services. On committing to growth of our business last quarter, I discussed the three tenets that I will be focusing on a Shutterstock CEO. They are innovation that enhances our customer's workflow, content that is relevant and fresh, and data and insights that drive performance. Since then, our team has begun revamping our product vision and roadmap to deliver new applications and tools that will deliver improved workflow productivity, and purchasing flexibility to our target audiences. So far, innovative thinking coupled with speed to execute has allowed us to bring valuable and relevant services to market quickly. As an example, we've expanded our partnership with Wix and API Partners since 2014. Over the years, we have responded to Wix’s need to make fresh content available to their customers. And this quarter, our content was further integrated into three new Wix products, specifically, a video consumption has skyrocketed during this time, we integrated into their video editor tool, allowing their users to quickly create videos with relevant content. Furthermore, our innovative and customer focus thinking has extended beyond technology and product supported by our strong financial position in this difficult time, we are extending support to our clients and flexibility on payment terms as a way to demonstrate our commitment to not just the growth of our business, but also the well-being of businesses that work with us. As we invest in the future of Shutterstock and define our product vision, I remain confident that we are well positioned to expand on our current portfolio of offerings, and to find ways to better align with key trends to capture compelling new opportunities. Lastly, before handing it over to Jarrod for a detailed financial review, I want to reemphasize the strong position Shutterstock is in financially to be able to weather this storm and continue to serve our clients, while investing in the long-term success of the business. Today, we have no debt and close to $300 million of cash. Our dividend continues, and we plan to stay the course with our balanced strategy of shareholder capital allocation through dividends, share repurchases, and M&A. And now, I'd like to turn the call over to Jarrod.

Thank you, Stan, and good morning, everyone. Before I get started, I'd like to echo Stan's comments regarding our employee’s mobilization efforts to stay safe and comply with stay at home orders, and that we continue to meet the needs of our customers and contributors. Shutterstock is very resilient. We have a strong business model with positive cash flows and healthy balance sheet with no debt and close to $300 million of cash. On the last call, I commented on how impressed I was with the Shutterstock team and product offering. That view has been validated over the last quarter. And my excitement continues as I see tremendous opportunity to leverage our financial strength for long-term success. And now for the financial results of the quarter. Revenue declined 1% in the first quarter compared to the prior year on both reported and constant currency basis. Our ecommerce channel increased 2% to $99.7 million as compared to the first quarter of 2019. Our enterprise channel revenue decreased 6% to $61.5 million. As we had communicated last quarter, we expected negative year-over-year enterprise results in the first half of 2020. As we are in the midst of hiring key sales personnel, and continuing with our sales force realignment, however, we're also seeing the results being further impacted by a slowdown in customer activity due to COVID in March and continuing on into April. These impacts have varied significantly on a country-by -country basis, with the largest degrees of un-favorability being seen as Stan previously mentioned in the U.K., France and Italy and the strongest performance in the major Asian countries that seem to have recovered quite quickly. In terms of our margins for the first quarter of 2020, our gross margins were 57.1%, down 50 basis points from 57.6% in the first quarter of 2019. This decline is primarily due to $1.1 million of severance charges recorded in cost of revenues, which unfavorably impacted our gross margins by 70 basis points. On a sequential basis, our gross margins increased 30 basis points in the fourth quarter of 2019. Sales and marketing expense was 26% of revenues in the first quarter of 2020 as compared to 27% in the first quarter of 2019 and 28% in the fourth quarter of 2019. The favorability in sales and marketing expenses is due to an increased level of scrutiny and our performance marketing spend, as we adhere to tight metrics or on marketing return on investment. Accordingly, sales and marketing expenses decreased to $1.8 million from the first quarter of 2019 and on a sequential basis $4.5 million from the fourth quarter of 2019, as a result of lower marketing and headcount costs. Product development costs were 8% of revenue in the first quarter, compared to 9% in the first quarter of 2019. Our product development expenses are net of capitalized labor, which is reported within fixed assets on our balance sheet. The favorability in product development on both a year-over-year and sequential basis is due to incurred expenses in 2019 to the consolidation of our technology, the reduction of our technology debt and our migration to the cloud. These expenses did not reoccur in 2020. G&A expenses increased $4.1 million in the quarter and 19% as a percentage of revenues as compared to 16% in the first quarter of 2019. G&A increase is partially attributable to investments we made across cyber security, data science and analytics and technology last year in 2019. Also included in G&A in the first quarter was $1.2 million of severance charges and accelerated stock-based compensation and year-over-year un-favorability and bad debt expense of $1.3 million. Sequentially, G&A expenses increased $4.2 million from the fourth quarter of 2019 driven by higher non-income tax expense and the severance charges noted earlier. We do expect G&A expenses, excluding severance to trend lower throughout the course of 2020, both as a percentage of revenue as well as in nominal terms as we continue to reduce costs. Adjusted EBITDA margin declined to 13.7% in the first quarter of 2020, compared to 15.6% in the same quarter of 2019. Adjusted EBITDA includes $2.3 million of severance expense, which impacted margins by 140 basis points. As we continue to reduce headcount costs to align more closely with revenue growth, we expect to incur additional severance expense in Q2, which we currently estimate to be $2 million. GAAP net income in the first quarter was $4.3 million or $0.12 per diluted share. Adjusted net income was $9.2 million or $0.26 per diluted share for the first quarter of 2020 as compared to $12.4 million or $0.35 per diluted share in the first quarter of 2019. Turning to our balance sheet and cash flows, at the end of the quarter we had $296 million of cash, down from $303 million at December 31, 2019. The decline in cash in Q1 was expected with the payout of the $6 million dividend. The payment of annual performance bonuses in March, as well as an $8 million earn-out payment associated with a prior acquisition. Our free cash flow is $6.5 million in the first quarter, compared to $11.9 million in Q1 of 2019. The free cash flow calculation excludes the earn-out payment made in the first quarter. The year-over-year reduction in free cash flow is due to working capital changes, due to the timing of vendor payments and slightly lower business volumes. Our deferred revenue balance declined to $138.9 million from $141.9 million at December 31, 2019. The change in deferred revenue is predominantly due to our enterprise business, which has not yet shown accelerated bookings in 2020 as we continue to rebuild the enterprise sales team. In terms of capital allocation, we will pay our next quarterly dividend of $0.17 per share on June 18, 2020. The quarterly dividend equates to an annual 1.7% yield on our current stock price. Should the lower revenues we've been experiencing in the past month continue, even without a rebound, our cash flows are such that our dividend is comfortably supportable. As previously stated, we plan to grow the dividend in line with earnings growth. And we'll periodically reevaluate the payout based on our cash flow profile and alternative uses of capital. While we did not execute any share repurchases against our $100 million total authorization in Q1, we may be in the market over the next several quarters and look to capitalize on weakness in our stock, particularly with the volatility that the broader market has been experiencing. With respect to our M&A strategy, we're actively looking at assets and we were in a great position to capitalize on the current distress in the market environment. As private market valuations come down in line with public market valuations and capital becomes more scarce, we have the ability to provide willing sellers certainty to close without financing contingencies. We’ll continue to be disciplined as we evaluate M&A opportunities and ensure that we have the ability to integrate the acquisitions, and that they present compelling industrial logic and strategic fit for Shutterstock. As we noted in our earnings released this morning, we are rescinding our previously provided guidance. I'd like to provide a few comments now on rescinding that guidance and what color we can provide on expectations around go forward performance. The guidance is intended to provide insight into our annual performance with a relative degree of confidence. We have a very resilient business. And while we're confident in our ability to manage through this cycle, and leverage our strong financial position, revenue generation is dependent on our customers’ ability to operate in and withstand the current environment. Uncertainty around the severity and the duration of the impact of the COVID-19 pandemic to our business has resulted in forecasted revenue and EBITDA ranges that we believe are too significant and lacked the precision needed for guidance to be meaningful to investors. After discussion with our Board, Stan and I have concluded that the company should and is withdrawing its previously announced 2020 guidance. We continually manage and forecast our business, and if and when appropriate, given the current environment, we will consider providing guidance in the future. While there's too much uncertainty for me to comment on our expectations for the full year 2020 revenues, I can provide some insight into what we're experiencing in the last few months. Our revenues declined high single-digits in percentage terms in each of March and April on a year-over-year basis, which we believe is predominantly attributable to the impact of COVID-19. The decline is the weighted average impact across our sales channels, including ecommerce and enterprise and the 150 countries we service, many of whom are impacted more severely than others. I would note that we have seen somewhat of a gradual improvement from those levels the last couple of weeks of April and there are positive recent trends that we are seeing. The timing of when our revenues returned to the normalized run rate we experienced in Q4, 2019 is the single largest variable in forecasting our 2020 revenues. At present, it's the late March and April revenue trends persist for the remainder of the second quarter. We would expect our revenues to be down high single-digits year-over-year in Q2. With the current revenue uncertainty, we've been making strong progress and ensuring that our costs are aligned to our revenue generation. We've been taking concrete actions on our previous plans to manage G&A costs, as well as further reducing our cost of technology and outside vendor spend in order to optimize our margins. We are monitoring return on marketing investment closely, and are also naturally seeing expense reductions from the travel restrictions and expenses such as marketing events and conferences, facilities expenses travel and of course T&E. With our discipline around costs, we hope to achieve our EBITDA margin targets for the year that we guided to last quarter despite the revenue softness, and even achieved the margin expansion we targeted at the beginning of the year. However, I would emphasize that our ability to do this will depend on when we return to the Q4, 2019 run rate during the course of the year. Regardless of when we return to normal revenue volumes, I would emphasize that Shutterstock is still generating meaningful operating and free cash flows. And we do expect to do so for the remainder of the year even absent or return to normal business volumes. We energized as a management team to weather the current storm and come out stronger on the other side. Shutterstock’s business is resilient. We are taking the requisite steps to reduce costs and mitigate the impact to our profitability and pressing forward with our capital allocation plan to shareholders. We appreciate your time today and thank you for joining us. Operator, we'd now like to open the line for any questions that investors may have. Thank you.

Certainly. [Operator Instructions]. Please stand by, while we compile the Q&A roster. And our first question comes from the line of Youssef Squali with SunTrust.

Good morning, guys. And I hope you guys are staying safe. Couple of questions for me. One, Stan, you talked earlier in your prepared remarks about extending payment terms to some clients. I was wondering if maybe you guys can speak to the mix of small versus large businesses, any material change to the quality of the receivables, I think you -- I think you guys mentioned about $1.3 million taken embed that expense in the quarter. I think Jarrod, you mentioned that? And then the other question is around M&A, I think you guys are still actively looking, maybe can you just help us help flesh out areas where you feel there is a need for you to guys do M&A what areas is on the enterprise side is on it, on the tool side, any color that will be helpful? Thank you.

Good morning, Youssef and thanks for calling in and I hope you and your family are also staying safe. Yes, as far as payment trend goes, a lot of that is much more focused in terms of need on the enterprise side of our business where from a working capital perspective, obviously, we're in a pretty good position. And some of our clients are seeing some major pull backs. As you can imagine, from what you're reading in the news about agencies and large corporate clients, they're adjusting to, what has been a pretty significant slowdown, but yet they still want to continue to communicate with their customers. And so we're the -- we have the opportunity to as a good long-term partner, to extend payment terms that are more favorable and allow us to really deepen those relationships with some of our best clients. I'll let Jarrod talk to the specifics of what we're seeing in terms of bad debt expense, but that's pretty much kind of where we're focused on as it relates to extending payment terms.

Sure and Youssef just specifically regarding the bad debt -- of the bad debt expense we had in the quarter, roughly half was due to an effect of an accounting change, where in addition to looking at our specific identification for accounts receivable, and our DSO aging. We're also looking at what they call an expected loss model. And so, you would think about that as a one-time shift. And I think, we're not seeing anything, remarkable in terms of changes in customer payment behavior that would really drive this. So, I think, we feel good about our reserve at present. Half of this was really the one-time change related to the accounting on and I think we should be in a position to work with our clients from a payment perspective and really not have any meaningful upticks in terms of our bad debt expense. We're going to be very prudent and thoughtful in terms of the way that we approach it.

Youssef, just specifically regarding the bad debt, of the bad debt expense we had in the quarter, roughly half was due to an effective of an accounting change, where in addition to looking at specific identification for accounts receivable and our DSO aging, we're also looking at what they call an expected loss model and so you would think about that as a onetime shift and I think we are not seeing anything remarkable in terms of changes in customer payment behavior that would really drive this. So I think we feel good about our reserve at present. Half of this was really the onetime change related to the accounting and I think we should be in a position to work with our clients from a payment perspectives and really not have any meaningful upticks in terms of our bad debt expense. We're going to be very prudent and thoughtful in terms of the way that we approach it.

[indiscernible].

Sorry, Youssef, can you repeat that?

Sorry, just about the -- if you can maybe expand on percentage of the business coming from small businesses versus larger/agency type of businesses?

Well, we are SMB business is, if you look at it is roughly 70% of our business relative to the larger enterprise clients.

Got it. Okay. Thanks for that clarification.

And Youssef, you also asked about M&A. The way I would just sort of describe it is obviously, we've talked about being active. So we are constantly evaluating the marketplace, both opportunistically as well as proactively. And the sort of the buckets are tied to the three pillars that we're looking at for the growth in the business, which is innovation in the workflow, data and insights and any additional content services that can augment our existing offering. So those are kind of the bucket that we are looking at from an M&A perspective.

Okay, thank you.

Thank you. And our next question comes from the line of Alex Giaimo with Jefferies.

Hey, guys, thanks for taking the questions and thanks for all the color. In the opening remarks, glad to hear that the team is staying safe. Stan, you hit on a couple of these in your opening comments, but maybe you can just help us size, the COVID impact on 1Q a bit. Maybe when exactly you started to see it hit the numbers and the different impact on ecommerce versus enterprise. And then you also touched on the potential tailwind to maybe more creative spending time at home, small businesses creating websites for the first time. Just anything you can tell us about how increased digital activity might help offset the slowdown in advertising. And curious if you're seeing more inbound activity on the enterprise side, given the circumstance. Thanks.

Yes, absolutely, it's interesting the trends we saw varied by geography. So as you know, as I mentioned, we saw early in APAC, we saw a hit for the business in the January, February timeframe. And then we saw pretty significant rebound in March where we actually came back to growth. EMEA has been depressed a little bit longer, although we did start to see some activity, some increased activity in April. The way, the way we are kind of looking at it is to see at what point we start to bottom out -- we are expecting and we saw you high single-digit declines in March and April, and so in Q2, if that’s the bottom that’s where we expect to sort of end. As Jarrod mentioned in April we have seen some positive signs of -- around our numbers and you are right, the larger sort of agency clients and larger brands were -- there is a much heavier concentration of ad spend is where we’ve seen the biggest impact. But at the same time, we’ve also seen a lot of new used cases for our content and for our services, particularly in the SMB as you mentioned where businesses that historically may not have had a digital presence. We're seeing a lot more businesses that are investing in that. And we are launching more and more products to support that. But also in the enterprise at our custom services we are seeing a lot of interest in turnkey solutions during this period particularly because our solutions are extremely cost effective where we can churn an initiative around fairly quickly and so we are starting to see a lot of activity and the pipeline starting to build but until we see kind of a return or bookings bought or – we are not going to be satisfied and we are not going to feel like we are out of the woods.

Maybe a quick follow-up, we saw a lot of companies in our coverage announced that they were withdrawing guidance, they sort of did it, inter-quarter or shortly after the quarter ended, just curious just why you waited until the print itself? Were you sort of waiting to see, getting much time as possible to see how the numbers were trending just what went into that situation? Thanks.

Sure, Alex. This is Jarrod. Just -- we’ve been working on forecasting and looking at the range of outcomes for this for several weeks now. I think we’ve recently came to the determination that there was a wide of range of potential outcomes for us both in terms of revenue as well as in EBITDA. And as we mentioned several times, we are doing a ton of great work in terms of margin preservation and even margin expansion after the business. But, depending on when we rebound from this thing, the range of outcomes was too much and we’ve been kind of working through the results in March and April to kind of think about what that could be on and recently came to the conclusion the range was too wide and that can, was timed – aligned with our earnings, so that’s why we took that determination.

Got it. Thanks guys.

Thank you. [Operator Instructions]. Our next question comes from the line of Lloyd Walmsley with Deutsche Bank.

Hey, this is [Greg] on for Lloyd. Two if I may. So just curious if you can maybe talk about the sales force optimization transition and maybe share any kind of KPIs, like new account growth to kind of help us understand the progress there? And then the second question kind of follow up on the geographical previous question is, are there any new nuances to the APAC business that maybe we should be aware of such that we can’t necessarily extrapolate what’s happening in APAC to kind of the other regions as APAC seems to be rebounding a little bit?

Yes, absolutely so first on the enterprise side, the way that our revenue is recognized depends on bookings as a precursor. So the way we look at it is where our bookings growth is and ultimately that drives our deferred revenue balance. So we are not yet seen the growth and even before COVID we expected the first half to be down with the return to bookings growth in the second half. Obviously, as things have evolved in – with the pandemic we are watching very closely. Jamie has our new CRO has already started to undertake several actions to support enterprise growth for the long-term, that we think this will have huge impact on the business including repackaging, how we grow the market, what Jamie is looking at is taking or increasing the average deal size within our enterprise business by developing long-term relationships and so that is a key KPI that we look at on a regular basis which is average deal size as well as new bookings grow renewals et cetera. We won’t disclose those things, but bookings growth is going to be the primary metric that will ultimately determine revenue growth. And I apologize, what was the second part of your question?

Just are there any new nuances to the APAC business versus other business just trying to get a sense of what should be extrapolating the APAC trends to the other parts of the business or other different factors that play there?

Yes, it’s a good question. We’ve kind of – we were sort of looking at is ultimately to see us getting back to – at a minimum to where we were in Q4 of ‘19 and so we were watching – I mean we were watching on a daily basis, I have a daily standup with the leadership team and we will look at our regions and how things are going and our expectations -- there’s parts of APAC where business is much further along in terms of getting back to the normal and I think is everybody is aware and EMEA and the Americas were slow kind of in a much more pace and very slow kind of approach to getting back to normal. So we are definitely monitoring but we are seeing between APAC and maybe the rest of country we are seeing, but maybe a 10-point swing between growth and high single-digit declines.

Got it. And sorry just has a follow up to the first question. Oh, yes, so in the press release you called out kind of two headwinds being the sales force optimization and COVID to the enterprise decline, is there any way you can just split out the two impacts just to give us a better sense?

Yes, so we don’t – obviously, we don’t breakout these areas in detail, but what I can tell you is, we did talk about previously a majority of our headwinds in the enterprise was in the Americas. Our business was growing nicely in the enterprise in – and the rest of the world. So, the primary area focus for Jamie particularly early on is in the Americas where we did, we did see continued sort of single-digit declines there that impacted the overall business. And then with the impact of COVID that took an additional toll on the overall business. And it was pretty proportional in terms of that toll across the world. The difference being that APAC is sort of coming back ahead of – some of the other regions. So the way to think about it is, we have – we believe is, as things get back to normal, we believe we're in a very strong position, in APAC in EMEA and we are bolstering the U.S. and Canada now with Jamie and some new hires that we are bringing on and we are seeing a lot of great activity in terms of pipeline build. So we are confident that we’ll get the enterprise business back to bookings growth.

Okay, great. Thanks.

Thank you. And I’m showing no further questions at this time. So with that, I’ll turn the call back over to CEO Stan Pavlovsky for closing remarks.

So I want to take one more opportunity to thank our employees, customers and contributors for their support and engagement. I couldn't be more proud of this organization. I'm very excited about the future and believe we are very well positioned to take advantage of the opportunities ahead. So please stay safe and that ends our call for the day. Thank you.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating and you may now disconnect.