Microstrategy Inc (MSTR) 2019 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the MicroStrategy Quarter 1 2019 Earnings Conference Call.

(Operator Instructions) As a reminder, this call will be recorded.

I would now like to introduce your host for today's conference, Michael Saylor, Chairman, President and CEO.

Please go ahead, sir.

Hello.

This is Michael Saylor.

I'm the Chairman, President and CEO of MicroStrategy.

I'd like to welcome all of you to today's conference call regarding our 2019 first quarter financial results.

I'm here with our Chief Operating Officer and CFO, Phong Le.

First, I'd like to pass the floor to Phong who's going to read the safe harbor statement and make some comments on our results for the first 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 the purposes of the safe harbor provisions 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.

Reconciliations of the GAAP versus non-GAAP results can be found in our press release issued after the close of market today and the supplementary information, both of which are available on our Investor Relations page at ir.microstrategy.com.

MicroStrategy made significant progress executing on its strategic objectives during the first quarter.

As Michael will discuss in more detail, the highlight of the quarter was the successful introduction of MicroStrategy 2019, which we believe is the most innovative platform release in the company's nearly 30-year history.

MicroStrategy 2019 is a modern analytics, open-architecture enterprise platform that for the first time brings together federated analytics, transformation mobility and HyperIntelligence capabilities in a single offering.

We believe MicroStrategy 2019 provides the most powerful and flexible analytics platform market since it allows customers to leverage existing BI desktop tools while utilizing our enterprise-grade platform.

MicroStrategy 2019 was the key area of focus at our MicroStrategy World Conference, which we held in February in Phoenix.

MicroStrategy World 2019 was a big success with more than 2,600 attendees, an increase of 10% from last year.

Early customer feedback from MicroStrategy 2019 has been positive.

We are already seeing upgrade and new customer wins for the platform.

To date, nearly 200 customers have upgraded to MicroStrategy 2019.

In particular, HyperIntelligence is generating significant interest.

We had dozens of closed deals in Q1 that included the sale of our HyperIntelligence product, which is the fastest adoption of a new product we have seen in years.

The market is looking for a platform that can leverage the incredible growth of data in a way that empowers any employee to make faster, zero-click, smarter decisions that will improve business performance.

Other key areas of focus for us include delivering on our enterprise support strategy.

A key part of our growth strategy is to have a disciplined approach to customer support that includes proactive outreach.

This has 2 benefits.

It provides even greater value for customers' product support spend, and it also provides us an opportunity to educate customers on the new solutions available on MicroStrategy 2019.

We're seeing good returns on this investment, including increased upgrade and upsell activity, increased customer satisfaction and improved internal coordination across technical support, consulting, sales and technology.

Second is the move to the cloud.

Growing customer interest and comfort in leveraging public cloud platforms like AWS or Azure is opening up new growth opportunities for MicroStrategy.

We believe our enterprise-grade, flexible open architecture can provide significant value for our customers.

This includes our hosted cloud as well as our bring-your-own-license solutions where customers use MicroStrategy's cloud solutions to deploy in their own cloud instance.

In 2018, bring-your-own-license solutions accounted for about 10% of our product license revenue.

Before I review our financial performance in detail, I'd like to provide some high-level takeaways for investors.

One, 13% constant currency growth in product licenses revenues year-over-year in Q1 2019.

We believe this increase reflects momentum in our business and the positive impact of the investments we made in the business in 2018.

This marks year-over-year growth in product licenses revenue in 3 out of our last 4 quarters.

Two, 0% constant currency change in product support revenues year-over-year in Q1 2019.

Q1 2018 marked a strong quarter for product support revenue given runoffs from previous periods.

We continue to see industry-leading renewal rates and do not believe the flat constant currency product support revenues in Q1 2019 is indicative of the future performance of this revenue component.

Three, leveraging our operating cost structure and the investments we made in 2018 is an important goal for the company.

In Q1 2019, we had the lowest year-over-year growth in operating expense in 8 quarters.

Managing costs throughout the company will be an area of increasing focus throughout 2019.

And four, we continue to target constant currency revenue growth for the business for the full year 2019.

In addition, we seek to decrease operating expenses and expand year-over-year margin.

We remain on track to deliver each of these goals with the exception of other services revenue growth, which is less significant as it has lower margins and is less strategic.

Turning to our financial results in more detail.

Total product licenses revenues were $18.3 million in Q1 2019, a $1.0 million or 6% increase year-over-year.

Foreign currency effects negatively impacted product licenses revenue by $1.3 million or 7%.

Product support revenues were $71.5 million in Q1 2019, a 4% decrease year-over-year, with foreign currency effects negatively impacting such revenue by $2.7 million or 4%.

Overall, we continue to see strong customer renewal rates, which reflect the value customers generate from MicroStrategy products.

We have a broadly diversified customer base by vertical.

And overall, retail, technology and financial services are sectors where we are seeing positive demand trends in the aggregate.

Deferred revenue at March 31, 2019, was $194.6 million.

This is a $12.8 million year-over-year decrease primarily driven by lower deferred product support revenues.

The decline reflects the negative impact of foreign exchange and the impact of the move to the Force.com quoting system, which has delayed certain product support contract renewals.

The headwind from the new billing system decreased notably in the first quarter.

We expect to have this issue resolved by the end of Q2.

Other services revenues were $18.5 million in Q1 2019, a 22% decrease year-over-year, with foreign currency effects negatively impacting such revenue by $0.8 million or 4%.

As Q2 2018 marked a larger quarter-over-quarter decline in other services revenue, we do not expect this large level of year-over-year decrease in Q2 2019.

Turning to costs.

We've transitioned from a period of significant investment to a focus on leveraging those investments to generate revenue growth and driving efficiencies across the organization.

This is evident in our total operating expenses of $99.6 million, which grew only 3% year-over-year.

While we continue to invest in our R&D efforts, we expect to see sales and marketing and G&A expenses flatten or decrease as a percentage of revenue in the balance of 2019.

Looking at the expenses by line item.

Q1 2019 total cost of revenues was $26.2 million, a $1.0 million or 4% increase year-over-year.

This increase is the result of increased staffing levels, which reflect our enterprise support efforts.

Our enterprise support program aims to provide more proactive product support offerings and other services to our customers and in Q1 included services to prepare customers for an upgrade to MicroStrategy 2019.

As mentioned earlier, these services will continue to be a focus area in 2019.

More information on our enterprise support program is available under the Services section of our website.

Sales and marketing expenses declined $2.6 million or 5% year-over-year.

These decreases represent a focus on sales productivity as well as higher-impact and higher-ROI marketing activities.

Research and development expenses increased $4.7 million or 20% year-over-year.

Investing in the platform, particularly on the capabilities inside MicroStrategy 2019, are a key priority.

We added net over 100 employees to the R&D team in the past 12 months, providing us with the deepest and most talented team we've ever had.

General and administrative expenses increased minimally, at $0.4 million or 2% year-over-year.

Our operating loss for Q1 2019 was $10.4 million compared with operating income of $0.7 million in the prior year period, with a net loss of $7.9 million in Q1 2019 and diluted loss per share of $0.77 with net interest income of $2.6 million and other expenses of $0.6 million, which primarily consisted of foreign exchange losses and a benefit from income taxes of $0.5 million.

During the quarter, we repurchased 362,148 shares of the company's common stock for an aggregate purchase price of approximately $48 million.

These repurchases were in addition to the approximately $111 million of common stock we purchased last quarter.

We believe buybacks can be a useful way to opportunistically generate value for shareholders.

However, it's just one component as we evaluate our broader long-term capital allocation strategy.

Before I turn the call the back to Michael Saylor, I want to finish by reiterating that our product licenses revenues growth in the quarter was a promising sign.

We're optimistic that we will continue to see positive growth in product license revenues throughout the year as we benefit from the investments we have made in our sales and marketing functions and the introduction of MicroStrategy 2019.

Now I'd like to turn it back to Michael Saylor.

Thank you, Phong.

We just came off of MicroStrategy World 2019.

That was the most successful MicroStrategy World we've had in a long time.

Our headcount or our attendees was up dramatically over 2018.

I think we had about 250 more attendees in 2019 than 2018.

I had a chance to meet with lots of customers and lots of our partners and get their feedback directly on the 2019 product launch.

I've also just finished a wide round of meetings with customers and all of our employees around the world.

And I've been gathering their feedback on our product and the market in general.

And I can say that going into 2019, I've never been happier and more comfortable with our technology portfolio.

MicroStrategy 2019 is really the strongest analytics platform we've ever put in the market.

We're getting really good response to the architectural approach.

Everybody likes the open architecture and the ability to support all different types of tools.

We're delivering connectors for Tableau, for Power BI, for Microsoft Office; for data science tools, R and Jupyter and Python; and for the new set of REST APIs.

And that's generated enormous excitement.

I think likewise, being completely open on the back end to all sorts of data technologies is generating a lot of excitement.

And what's really special about 2019, and I'm getting this feedback from customers and prospects, is MicroStrategy's cloud platform has turned the corner and has achieved a new degree of commercial appeal because for the first year and for the first time we're now able to offer an integrated cloud platform that you can instantiate in an AWS environment or in an Azure environment.

And the fact that customers can spin up MicroStrategy cloud in Amazon or the Microsoft cloud is an extraordinarily exciting development for them.

I think we're moving into a new era, and over the next 5 years, I think we're going to see a cloud commercialization wave take place that'll be much more intense in our industry than in the last 5 years.

Some customers were holding up on their adoption of cloud technology because they didn't want a single source.

Others were waiting for the bugs to be worked out.

Some of them wanted to do business with Microsoft.

Some want an alternative before they do business with an Amazon or a Microsoft.

And of course, the overall public clouds are just getting better and cheaper.

So MicroStrategy's cloud platform in 2019 is becoming a very strategic element of our portfolio.

I've had the chance to spend a lot of time with our sales teams, and I've asked them what's resonating.

And what I hear routinely is people are very enthusiastic about charting their cloud strategy.

And I believe the cloud is like the Y2K of this decade.

Just about every firm is thinking about how they are going to migrate to or evolve to a new public cloud platform.

And so MicroStrategy, being able to offer that package of services and also technology, positions us well.

I think the second theme we hear a lot is that just about everywhere, customers are very enthusiastically embracing our HyperIntelligence offering.

In this regard, we're really differentiated from the competition.

There's a traditional set of enterprise BI companies that have offered reporting or dashboards.

And most of them have lost their intensity and focus on the marketplace, and those techniques or technologies are being run in a legacy configuration.

Then there's a set of business intelligence vendors, probably Tableau and Power BI would be the most well-known, that are well-known for ad hoc dashboard applications and desktop analytics and the like and to a certain extent offering you the ability to deploy those dashboards in different devices.

What we've seen is that nobody in the analytics space has pursued the promise of HyperIntelligence in a way that we have.

And so we're a pioneer with regard to HyperIntelligence, but we also have a nice lead.

And luckily for us, this is resonating with the customers.

Our customers are pretty enthusiastic about this.

We've actually completed 57 pilot engagements with HyperIntelligence, and we're currently engaged in 169 different projects that include some kind of Hyper pilot.

HyperIntelligence as a product class is probably the most successful new development we've had in a long time.

We closed 30 deals that included HyperIntelligence in the first quarter, and we currently have 549 different opportunities around the world to sell HyperIntelligence.

And so this is something that's been enthusiastically embraced by the partners, by the customers and also by our own sales teams.

And it's a big shot in the arm for the business.

One of the exciting things about the cloud platform and MicroStrategy's HyperIntelligence offering is that both of them represent an order of magnitude increase in elasticity and utility and velocity over the traditional alternative.

You can spin up an environment in the cloud in a matter of hours that would have taken months before.

And you can deploy solutions in HyperCard format as HyperIntelligence in a matter of hours that could have taken months.

And users can get the answer that they need in seconds instead of minutes or hours or days.

And so that means that MicroStrategy cloud platform plus HyperIntelligence is an ideal combination to offer as a solution platform for line-of-business executives like the head of marketing or the head of sales or the head of HR.

And we're seeing, much to our excitement and enthusiasm, that we've got a lot of customers that are developing new ideas to reach out to groups of users that traditionally were not users of business intelligence.

So for example, if I have information on a financial security, I could now create a HyperCard that would give equity analytics or debt analytics, and I can tie it to a CUSIP or a security code, and I can offer it to people broadly throughout my enterprise or even down my supply chain to my customers and other financial entities.

And when I'm doing that, I'm actually branding my application with my brand, and I'm passing my analytics through with zero-click to a customer so that they'll use that as a launchpad back into my systems.

So that's an idea that makes sense if you're a head of marketing or the head of sales or if you're running a business unit, and you want to find a way to reach your customer using intelligence.

It's 100x easier than to build a custom dashboard application and ask them to click on it and run it or become familiar with it.

So HyperIntelligence opens up a set of opportunities with new executives with new budgets and new use cases.

And that in itself is great.

The fact that you can then implement those applications much, much faster is also great.

And those 2 things are fueling enthusiasm for the MicroStrategy 2019 platform.

Now the other 2 aspects of the platform, that is federated analytics and transformational mobility, are also being enthusiastically embraced by our customers.

All of those new connectors we've been delivering are starting to play prominently in our sales cycles.

And in some cases, they provide us with opportunity to upsell additional features to our customer base.

In other cases, they provide a real benefit to an IT organization that's struggling with how do they balance the demand for Excel versus Power BI versus Tableau versus MicroStrategy all at the same time and curate a single version of the truth.

So everything that we had hoped the platform would provide, it is providing, and our customers have endorsed these themes pretty enthusiastically.

So I look forward to the next 12 months and how all of these opportunities are going to play out.

Our enterprise support program does continue on.

We have done about 169 upgrade advisories since we started.

That means 169 different projects, and we did 100 of these projects just in the fourth -- in the first quarter.

Our target is to do about 500 upgrade advisories in 2019.

And so this will represent the year when we've had the most proactive strategic outreach to our customer base.

And that kind of investment, we believe, is going to yield dividends because as we upgrade our customers to our new platform, that means that we are in the position to sell them cloud, federated mobility and HyperIntelligence functionality, not to mention the fact that it makes them much more loyal and generates goodwill and also improves our relationship.

And we think that this proactive enterprise support program is going to help us as we grow our services business as well as our software business.

I think that as we look forward to the coming year, we'll continue to focus on these primary themes.

We will bear down and focus upon execution with regard to good account planning, developing good service plans for our customers, good sales plans, good marketing plans.

We're going to continue to refine the 2019 platform, improving the fit and the finish of each of the various federated analytics connectors, improving the performance of the core platform, continuing to strengthen and integrate our tool sets and to introduce new types of HyperIntelligence connectors so that people can embed HyperCards into just about any native interface they might want to.

And as we do that, I think we'll see opportunities present themselves.

So with that, I want to go ahead and open up the call for any questions from the audience.

(Operator Instructions) And our first question comes from the line of Tyler Radke with Citi.

Maybe we can start with you, Michael.

Just -- if you think about the 2019 product cycle and the ability for that to influence the pipeline and demand, just kind of where are we in that product cycle?

What are -- what do you think kind of some of the timing looks like as it relates to closing some of the opportunities you have out there?

And how does that excitement around the product and what you're hearing from customers translate into improved license revenue performance?

I think that most of our customers think in terms of 3-year plans.

I think over the next 12 to 24 months, we'll see a decent number of our enterprise customers upgrade to 2019.

And as they upgrade, I think we'll see a number of different pilots and extension use cases evolve, and each of those will serve as opportunities for us to increase our software and our services footprint within the accounts.

Great.

And then for you, Phong, maybe just help us understand some of the moving pieces in the, I guess, unofficial guidance for 2019.

It sounds like you're anticipating overall revenue to grow on a constant currency basis, but you do have some near-term headwinds from the Force.com billing system that's impacting your maintenance revenue.

And it sounds like services will be declining year-over-year.

So just kind of back-of-the-envelope math suggests that you're going to need a really strong license performance here in 2019.

Could you just help us understand the moving pieces there?

Yes, Tyler.

I think overall, as we stated last quarter and we still feel reasonably confident this quarter, that we have an objective of growing our overall revenue for the year.

I think you're correct in pointing out some of the headwinds that we have in other services; although as you look to 2018, we had a fairly steep drop-off from Q1 to Q2.

And so some of those comp headwinds, if you will, start to dissipate as we look throughout the course of the rest of the year.

And on product support, we still feel that we have a strong maintenance renewal rate, which is our best leading indicator of our support revenues.

The biggest headwind we have in product support is really currency and FX.

As you know, the dollar has been strengthening over the course of last year.

But as it relates to support overall, we still feel pretty good about the trajectory of our business and our revenue.

And as we mentioned, product license, we've seen 3 out of 4 quarters now of product license growth.

And so that is a reasonable trend that we've been seeing for that line item.

Great.

And maybe one last one.

Now the second quarter in a row of doing buybacks, and I know in the past, you've talked about giving buybacks when you have more confidence in the business.

Is there anything that was behind the decision to do buybacks again this quarter?

And how are you thinking about the use of cash going forward here in 2019?

Yes.

As you know, Tyler, we have several factors that go into whether we decide to do a buyback.

You're right, we've had the second quarter in a row now of returning value to our shareholders via buybacks.

And as we look forward, right, our capital allocation strategy is multipronged, but return to shareholders continues to be sort of a primary use of our cash, and then we generally have a fairly conservative strategy when it comes to cash in general.

And our next question comes from the line of Hamed Khorsand with BWS Financial.

So first off, I wanted to ask you was, could you talk about these product licenses within the U.S. market declining by double digits since last year?

And what's the headwind you're facing in this market?

Yes, Hamed.

What I would say is it's -- I would say it's a little bit the law of small numbers, and so I wouldn't look at any particular quarter when it comes to product license fluctuations.

So if you take a number that falls into sort of the $18 million to $20 million range and then you split it by 2 between North America and international and you say $10 million roughly in North America, and we talk about some of our deals coming in at $1 million or $2 million, ultimately, a slipped deal or a deal that comes in at the end of the quarter can fluctuate our international or domestic revenue by 10%, 20%.

And so we had an outstanding product license quarter for North America in Q4.

We had a little bit of a drop-off in Q1.

But I wouldn't say that there's anything broadly that I would point to.

In fact, Q4 was one of our strongest North American product license quarters when you look on a year-over-year basis that we've had in, I believe, 8 quarters.

So a slight drop-off in Q1 isn't necessarily a trend into future quarters.

I'm just trying to understand, if you have a new product coming out and domestic market is like hesitant, is there a reason why?

Are they just slow in adopting and looking at using it?

No.

Actually, it's the -- I would say it's probably the contrary.

I think if you look at demand, we tend to see that drive sort of closer to our core headquarters location first and then it start to expand internationally.

So I don't think the demand indicators, pipeline, et cetera, would point to a weaker North American business.

And then as far as the customers that have upgrade during the quarter, are you seeing any expanded use within the workforce in the matter of seats?

Or is that -- is it still too early in the adoption curve?

I think it's early to tell as far as expansion.

But the fact that our customers are upgrading at the pace we're seeing I would say indicates there's quite a bit of interest in MicroStrategy across the enterprise.

And then as Michael talked about, the big opportunity for seat expansion in addition to just more users is really with HyperIntelligence.

And the opportunities that we have created in the first quarter indicates a lot of interest there and then expansion across the enterprise.

And lastly, your deferred revenue went up this quarter compared to the fourth quarter.

Is this primarily just related to these upgrades?

Or is there something else moving these numbers up?

Yes, there's a few things in there, Hamed.

The biggest driver of an increase in overall deferred revenue quarter-over-quarter is the fact that Q1 is our largest product support revenue quarter -- or renewal quarter, sorry.

And so when we see higher renewals just coming through in Q1 by volume, then that causes our deferred revenue to go up.

And then the second big piece is we had talked about some of the drop in deferred product support revenue in Q4 as a result of our introduction of our new quoting system.

And so we're starting to catch up on that in Q1, and so we're seeing an increase from that.

But the primary driver if you look quarter-over-quarter is seasonality.

And our next question comes from the line of Frank Sparacino with First Analysis.

I think just 2 questions from me.

First is, with respect to the comments around cloud, it would seem obviously that as customers look to deploy in the cloud that may create a headwind from a license revenue standpoint.

But Phong, maybe just from a contracting standpoint, how are the majority of those contracts being structured, I guess, in their long-term subscription?

But any color there would be helpful.

Yes, Frank.

We have a MicroStrategy cloud platform, and we license it to customers however they want to buy it.

So if a customer wanted a 1,000 named user perpetual license to the MicroStrategy cloud platform so that they could run it in AWS, we would sell them a 1,000 named user perpetual license, and it would be similar to selling 1,000 named user perpetual license of the MicroStrategy enterprise platform running on Linux in their enterprise data center.

If the customer said that they wanted a term license to a 1,000 named user license, then we would sell them a term license in the cloud.

And it's more common to ask for a term license in the cloud than it is to ask for a term license for an on-premise deployment.

But if a customer were to want to license MicroStrategy enterprise platform for Linux as a term license, we would do that, too.

So the simple answer is if the customer wants a term license, we sell it to them.

If they want a perpetual license, we sell it to them.

We don't require that the customer convert from a perpetual to a term license.

And in my experience, they don't demand that they only buy a term license, although I would say it feels like it's like half and half, like half the time I see people wanting a term license, and half the time I see a perpetual license.

It really just depends upon how they're running their other IT operations.

And I think our goal is to really easy to do business with.

So I wouldn't forecast any major shift in licensing practices other than the fact that this is an opportunity for us to go back and sell additional value to existing customers because the cloud platform is much more functional and much more elastic than the on-premise platform.

Yes.

One other thing I'd point out, Frank, is as you look at our financial and you look at the subscription services line, that is primarily for what we call our hosted cloud platform, right?

And so a customer is buying our cloud solution, deploying on AWS or Azure, and we are providing cloud operations and cloud support and cloud hosting services.

So that's what you see in that line.

What's included in product license, which I had mentioned and Mike pointed out, too, includes a customer who buys MicroStrategy licenses and deploys it in their own cloud, right, their own VPC.

We've referred to that as bring your own license.

And that's an area where we've seen a lot of increase in demand as we've improved our product in the last year or so.

But that still shows up in product license revenue.

And to Mike's point, that could be bought as term licenses or as perpetual licenses.

The trend has been more towards perpetual licenses is our observation.

And maybe just one follow-up as it relates to the cloud.

It would seem MicroStrategy has been sort of lagging the peers and the overall industry in that transition to the cloud.

And I don't know if that's a fair statement, but either way, just any thoughts on -- I know you alluded, Mike, I think, earlier on some of the hesitancy by customers, but the commentary from the peers is a little bit different than yours.

Yes.

Well, I think that we've got a slightly different approach to the cloud than some of our peers.

There are some people that have created stripped-down platform offerings.

So they actually have stripped out functionality.

They put memory constraints or they put hardware constraints or user functionality constraints in the cloud offering in order to make it a simple, multitenant-type environment.

There are others that have focused upon a particular cloud environment.

Our approach is to allow the customer to create any type of environment, deploying any kind of application with any amount of memory or CPU in an own -- in their own single-tenant environment and to make it possible to port it between AWS and Azure and back again.

So there'll be some offerings that are limited to Azure, and that's going to be a pretty big liability if you want to arbitrage the 2 public cloud providers in order to get the best price.

And there are other offerings that limit you in the degree or complexity of the application you might build like a Domo or something like that.

And our cloud platform is pretty much a single tenant, do anything you want.

If you wanted to deploy 16 production environments mirrored in 32 backup environments across 8 continents for hundreds of thousands of users running 400 different applications on AWS, you could do that.

Obviously, that would cost more money.

If you found out that you were going to be paying Amazon $32 million a year in hardware expenses, and you got an offer from Microsoft for $4 million a year, and you wanted to save the money, you could actually back up that entire system and deploy on Microsoft, in some cases, without missing a step or go back the other way.

So we've focused upon creating an industrial-strength enterprise cloud platform that's going to appeal to a very demanding customer or a government or a bank that wants to control their destiny and wants to do it the way they want to do it.

And we've avoided putting guardrails or training wheels or any kind of other limitations on it.

I think that, that means that it's a little bit harder.

I think we've benefited as we rolled out the Azure version, and we'll be working between now and the end of the year to continue to improve the Azure version of our offerings, so it's completely at parity with the AWS version.

But that's a different offering than what some other people are doing.

And in my experience, I don't think we're late to the market.

I think that we're just moving at the appropriate rate, doing things responsibly that these big enterprises want.

I think that if we wanted to cut corners and define the cloud offering differently, then I think we probably could have delivered that in a different time frame.

But it's not in our customers' best interest.

So we'll just continue to focus upon executing our strategy.

It seems to be what the customers want.

And to my mind, I don't -- when I'm talking to customers and talking to the marketplace, I'm not really hearing anybody saying that there's some other cloud analytics offering which is dramatically more functional than us in some way.

That's not what I hear.

I think everybody in the market is offering their own solution, which appeals to some set of their customers or prospects.

But it's still an early stage in this marketplace, and there's a lot of room for competitive differentiation between all the different solutions.

(Operator Instructions) And I am not showing any further questions at this time.

So I would now like to turn the call back to Mr. Michael Saylor, Chairman, President and CEO, for any further remarks.

I want to thank everybody for being with us today.

We appreciate your support, and we look forward to speaking with you again in 12 weeks.

All the best.

Ladies and gentlemen, thank you for participating in today's conference.

This does conclude today's program.

You may all disconnect, and everyone, have a great day.