Autodesk, Inc. (ADSK) Earnings Call Transcript & Summary

All right. Okay. Hello, everyone, and good morning. Welcome to the 2024 UBS AI and Technology Conference. My name is Taylor McGinnis. I head up the mid-cap application SaaS coverage here at UBS. And with me is Autodesk, so we have Andrew, the CEO and the COO, Steve. So Andrew and Steve, thank you guys so much for joining us.

Thank you.

And two important notes before we get started. One would be if you have a question. I'll try to save some time at the end. You all should have a QR code in front of you, so you can just look back your code up, submit the question, and I'll try to get to them. And then two, Andrew, I think you have some important [indiscernible] to start.

Yes. I've got to read the safe harbor. I'll try to make it exciting. We may make forward-looking statements during the course of this presentation. Please refer to our SEC filings for information or risks and other factors that may cause our actual results to differ materially from these statements. There, duty is fulfilled.

That was perfect. Great execution. So maybe to jump right in. I think a good place to start would be the news that we just got last week, so the appointment of Janesh as the CFO. Andrew, one, I know that you mentioned on the call that part of like the focus was finding someone to drive optimization and scale. When I hear that, that sounds a focus on margins, but I would love; one, could you elaborate on your thoughts there? And then; two, maybe you could give some examples of what you've seen in Janesh's career that you think is applicable to Autodesk.

Yes. So yes, we had a great quarter, again. It is great quarter of beating expectations. And we're excited about Janesh joining the company. I think it's important when we talk about the appointment to kind of get clear on what we were looking for. 3 years back, we've got lots of feedback from investors that they wanted a lot more consistency out of how we were talking to the Street, some of the communications, the guides. And what we did is we built new systems, built new machinery, brought in new people and created a really opinionated functioning engine that's still getting better, it's not perfect, it's still getting better that looks outward at the world. That's not what we were recruiting for. What we're recruiting for is the area where we're really focused on building strength. And that's in this inwardly focused operational optimizer type kind of orientation where we want to hold the organization accountable for the ROI and the investment dollars they're making, particularly and some of the things we're doing with our go-to-market optimization and the things associated with that. That's the persona that we were looking for, and that's how we were trying to complement the functions we already have that aren't going to change. Nothing is going to change in the things we have in place, right? Those are going to continue and move forward as they are regardless of who is CFO. So the things about Janesh that we really liked is one, he's been through a lot of business model transformation that look very familiar to us with all the challenges associated with this and all the requirements to build new systems and the things associated with that. We like that, okay? The other thing is he delivered hundreds of points of margin expansion -- non-GAAP margin expansion at Elastic, particularly in the go-to-market areas as well. He did that earlier in his career too in go-to-marketplaces. So he had a history of go-to-market optimization. So these are the kind of things that we were looking for and that we were really excited. So we've gotten lots of feedback. We always take the feedback from investors very seriously, and we listen to it, and we invite more of it. But we're really excited that he's on board, and we think he's the right kind of focus for where Autodesk is right now.

Perfect. Appreciate all those thoughts. And I think all the investors in the room are very keen on hearing what you guys are seeing in terms of demand trends. So I'd love for each of you to share what are you hearing from customers? Are we at the point of maybe some green shoots, but I'd love to hear your guys thoughts on that.

Yes. So I won't comment on any in-quarter trends or anything we're seeing right now. But I will kind of restate a few things, and then Steve can add some commentary as well. Broadly speaking, we're seeing consistency with what we saw before, right? Strong renewals, some headwinds in new business, maybe in the previous quarter some little the headwinds, maybe slightly less strong, but consistent, all right, consistent looking back with the other things, puts and takes. We have a very diversified business. So there's always a put and take. One region is doing better than the other, and it offsets the other region. So broadly speaking, we've seen consistency, which I think at this point is actually pretty good. So you're not seeing any kind of acceleration over the previous quarter, but you're not seeing any kind of deterioration. So it's consistency. Steve?

Yes, I agree. And in talking with customers, it's an interesting window of time. The actual news in the market seems worse than what our customers think is happening in their world. Most of them have strong pipelines. If anything, our customers are struggling with finding talent to do the work they need, to get the jobs done that they have. As a result, many of them are needing to be selective on which projects they bid on so that they can apply their limited resources effectively. Our customers are really struggling to find not only enough talent, but talent that's actually prepared to do the work. That's positive trend in the future, but it now means, okay, how do we address those kind of issues and how do we move forward. But I will also just add one thing to what Andrew said, this has been an unusual year we've had more elections around the world this year than any other time in history. And we typically have seen in our past some slow down or tapping on the brakes a little bit when elections are about to happen in different places around the world. And to Andrew's point, the fact that we've had so many of them this year, and we've kind of just stayed in a moderated space. It's actually been a positive sign.

Perfect. And maybe just to expand on that, I think there's this view that for companies like Autodesk, that have exposure to some of the most cyclical sensitive customers that when we start to see evidence of a recovery that you would be a big beneficiary of that. And so I ask, in that type of scenario, could you see growth accelerate? Maybe there's parts of the business that would be more sensitive to that? Because I know you've talked a lot in the past how maybe you're less sensitive to some of these cycles because of the transition to subscription. Steve, you just mentioned some of the labor shortages and maybe that's something to keep in mind. But would love if you could expand on that? And then two, just what you're hearing from customers in terms of if it's very stable today, when do they expect to see that turnaround?

Yes. There's 2 dynamics here, and we have to look at it from 2 lenses because we are a more resilient business. One, we're resilient because of the subscription model, we're also resilient because of the large distribution of our business. We're distributed across verticals. We're distributed across geographies, right? It's totally true that as economic conditions improve, headwinds turn into tailwinds, all right? And that's to be expected. But let's just kind of remind ourselves into a little tutorial about how subscription models work. So as the headwinds hit in subscription models, what happens is your revenue growth starts to slow down. Your second derivative goes negative, all right? And you start to see this trend of revenue growth slowing down. You still have revenue growth because the subscription model is very robust, and we're a very resilient business. The same thing applies as tailwinds start coming in, right? You don't see that the tailwinds come immediately into the business. What happens is the second derivative starts to go positive, all right? And you start to see these trends change. So just like 2 years of slowly changing number in the second derivative, you come out, you're going to have 2 years of that kind of change. You're not going to see what we would classically see some acceleration or surge. It builds slowly in a subscription model. That's the flip side of a subscription model. It's very protective in a headwind state. It's also very calm in a tailwind state, and we should expect that. But there's definitely, we're going to see tailwinds to our new business growth, and we should expect that. I want to remind people, though, that what Steve said, and it's a really important point, we still have a backlog in our customer base. Our customers are still working through their backlog. And that's going to continue as we move forward. There's projects that have been funded but not started yet, right? But they've already bought ahead of some of those projects. But again, tailwinds are coming, but we'll be towards the bottom of our range for a couple of years as those tailwinds turn into revenue growth. And then we start moving up into the higher parts of that range.

Yes. And to the point that you said, even if everything became incredibly positive, our customers don't even have the capacity to actually immediately have a turn on of new things. So that will build over time as well. And in fact, we're working closely with our customers to help them in that area. We make our software available for free to all educational institutions. We're actually helping put curriculum into those schools. So there's more capacity of engineers and designers that will come out into the future. It could actually immediately go into our customer base and start making an impact, but that takes time to build up.

Is there any big changes or differences that you're seeing across the different products because you guys obviously have products in a number of areas. So is there some that might be more sensitive or some that maybe you are seeing signs of green shoots where others still are a little bit sluggish? Anything to comment on there?

So there's a common thread across all of our customer bases, and it's this. People are investing more in the end-to-end digital capability. And part of this is they don't have a choice. Productivity is something that they need desperately. And investing in technology for productivity is something that they've been continuing to do no matter what the business climate is. So they've all been investing in that because, frankly, they just can't get the work done with the constraints they have today. So that's going to continue. Now in terms of kind of secular differences, look, construction is obviously going to continue to move forward quite robustly because it's so low on the digitization curve. We have years and years and years of growth in that segment because it's just not there yet. The other thing you're going to see is an acceleration of share shift in our manufacturing segment because it's associated with the fact that we've got the kind of the more advanced solutions. We've put the work in to go into the cloud. We've got the end-to-end design to manufacturing. It's a different kind of tool set. People find that attractive for a lot of reasons. And we don't talk about the media and entertainment business a lot, but that business is going through a massive restructuring. And what that restructuring is leading a lot of these studios is they still need to produce content, but they need to drive their cost per content produced down. And they're going to try to get those costs out of the pre and post production steps and they need digital solutions to do that. That's why we're upstream now in the process as well as downstream in the process and not just in the middle. So look for all of those trends to continue as we move forward.

Perfect. And another hot topic is the new transaction model and the rollout of that. So Steve, maybe one for you, would just be what are you hearing in terms of customer feedback, now you're rolling it across the developed markets? Any differences between what you're seeing in North America, Europe and Japan versus maybe what you saw in Australia? And as a second question, not to throw too many questions at you. But I think one thing that us and investors have picked in is you have had some partners talking about maybe a little bit of disruption in the onboarding. So one, is there any truth to that? You would imagine there probably would be bumps along the way, but anything to consider near term, I would be mindful of.

Yes. So I figured this would be a big question. So first, just a little context. So in my organization, I've got a lot of different elements of our go-to-market. I've got our sales organization. I've got a customer success organization, the marketing organization, our go-to-market strategy and operations team. And I have a large engineering and product management team, including our CIO. And that group actually builds the tech stack that we use to run our business. And that's the business -- or the tech stack we've been investing in over the last several years to prepare ourselves to move to annual billings, to introduce consumption-based models like Flex to be able to move our subscription business into the new transaction model experience. So just to give you some context, we've been working on this for a really long time. which is why this has been a really exciting year really going back to November of last year when we actually started introducing it into the markets because, again, several years of building this thing with a lot of anticipation of, okay, how will it go when we roll it out. I will tell you this now having rolled it out in Australia, New Zealand, North America, Western Europe and the U.K. because I always tell you, so I mean, U.K. is not part of Europe. And now in Japan because we rolled it out in Japan in November. Things have gone as we would have hoped. This is a big transformation. It's a big change. It's a massive change management process for our customers, for our partners and also for Autodesk employees. I'll say this, we've learned a lot through the process. There have been some disruptions from a customer perspective. And when we rolled it out in Australia, we went out with more of an MVP approach, and as a result, there weren't all the capabilities in place, and so that created a little bit of disruption, and we recognize we [ hadn't ] enabled our teams and our partners to be able to handle the questions and the different use cases that were coming up. North America went a whole lot smoother. Europe has been a little bit of a challenge, just in that it's multiple languages, multiple currencies, multiple legal entities, some countries have different requirements in other countries. And we've heard a little bit of, okay, are you sure that this is going to work your kind of thing, but it actually has gone well. In Japan, which we just rolled out, we picked Japan last, by the way, because it is just a challenging country to drive change in general. And so we needed as much time as possible to prepare. But I'll say this, it's gone as we expected. Some customers -- I mean, first of all, every single customer had to set Autodesk up as a vendor. And you think, well, we've been around 40-something years. Why wouldn't you be set up as a vendor? Well, when they're not purchasing from you, you haven't been set up as a vendor. And some companies, that's a challenge. It takes time to set a company up as a vendor. So we had to make sure that we figure out how to do that in an effective way.

One of them sent me e-mails asking me how they can...

Exactly. We told people online, if you need -- if you have questions about setting up as a vendor, call Andrew. But we've been automating things. And this is one of the great things about having my engineering and product management team. As we learn about new capabilities, new requirements or perhaps new use cases out there, we can prioritize the engineering work. And then this is a SaaS tech stack. So we are having continuous releases of our capabilities out into the market and it goes live everywhere. So we're working in a very agile development process. And as a result, when feedback comes in that, hey, there's a little bit of a challenge here. It's actually a great thing because it means now we can go and prioritize how do we automate that. So it actually becomes a lot easier for everyone afterwards. So we'll have some work to do, and we're not done yet, but we're well on our way.

Perfect. That was great color. And on this topic, Andrew, on the last 3Q earnings call, you said the new transaction model will enable tighter channel partnerships with less duplication of effort, you talked about more digital self-service and automation. And then you also talked about how it's going to create new opportunities for partners and Autodesk to earn more with less emphasis on transaction revenue sharing and a greater emphasis on value creation for your customers. So Andrew and Steve, maybe you both could elaborate on what was meant by those comments? Like what is this optimization phase that you're referring to? And how is that going to drive revenue and margin?

Yes. Let me frame it at a high level, and I want Steve to talk a lot about what we're going to do to try to optimize around it. So first off, the new transaction model enables 3 fundamental pillars for us, right? One is self-service, right? All the systems that Steve's teams are building have a very focused component of letting the customers get it done themselves quickly without a human being in the loop and just get it done. That self-service capability is going to expand, and it's going to get better. And that has its own capabilities associated with it. The other piece is now that we have not only the customers' usage patterns, how they're using our products at Autodesk, we now know who the customer is. We know what department they're in, we know what company they are. We know where they're in the hierarchy. It allows us to actually look at the customer holistically, which is going to give us a chance to do cross-sell and upsell a lot better. And the last piece, and then I'll turn it over to Steve to kind of put color on all of this is our partners are moving away, especially our best partners, right? The partners who are way, way, way down at the bottom, they're going to struggle with all of this, right? And that's for sure. And if you're talking to some of them, you're hearing their struggles. But our best partners are now free to not focus on the transactional relationship, but being life cycle consultants to their customers focusing on custom IP, systems integration, teaching them how to do end-to-end solutions, teaching them how to transform their businesses. Our best partners are really looking forward to that. And now they don't have to compete on price with [ T&E ] partners, they can actually compete on value. And Steve, why don't you talk about how we turn this all into?

Yes. So I'm actually going to -- I'm going to work the opposite way that Andrew just worked. So with the partners, things have changed in this new transaction model world. In the buy-sell world, all they could see of the customer was the transactions they were doing. And if a customer was working with 3 or 4 partners, nobody had a great view, a single view of that customer. And in fact, we weren't always getting such great data. So we couldn't even see that. Now as Andrew said, we can actually see everything a customer is doing through all their divisions and through all their hierarchies. The other thing which is great is that when a customer selects to work with a particular solution provider, we can now provide that solution provider with a view of the customer, which we couldn't do before in the old world. So they are better prepared to be able to offer more value to provide more services as we move to platform, which is a big next step for us. They will be there to be able to build IP through API access into their environment and add more value there. So our best solution providers are seeing this as a huge opportunity for growth both in top line as well as margin expansion. Now working ourselves backwards. We've done a lot of transformations here at Autodesk. And I know it's been a noisy road for some of you to keep track of us from moving the perpetual licenses to subscription. And then we introduced consumption-based models, and we have a named account program of EBAs, and that's a different model. We introduced Flex. Now we've got this -- well, we introduced multiyear build annual capabilities and now moving our core business to this new transaction model, lots of transformations along the way. There's risk in each one of those steps that we took, and one of the things we've done a really good job of is identifying what risks were there and then coming up with risk mitigation plans. You can think of them kind of as insurance policies. It's like, okay, well, if we're going to move from perpetual licenses to subscription, we really need to focus on the renewal part of the business now because we're going to -- that's really where we make our money, where before it was more just in that upfront sales. So we want our partners to do renewals, but we better actually have a renewals team as well. So we kind of took out an insurance policy of a couple of teams that are all getting paid on doing the same thing. When we wanted to move into higher value offerings, we built out a customer success organization, but we wanted our partners to do certain things. So we took out an insurance policy and kind of built some duplication there. Even if you think about our investment in construction, we were going in big. We knew this was going to be a next big business for us. And in order to really to gain that momentum in the flywheel, you kind of have to overinvest until you get to some critical mass. So these were all insurance policies of sort that we took along the way. And as a result, actually, we've made these transformations without a whole lot of noise. Now what we haven't done a great job of is ending the insurance policies. And so what we're doing now, especially as we've gone through the new transaction model and have all this visibility to everything, we're saying, okay, who should be accountable for what? And let's hold those teams or whether it's us or our partners accountable for specific capabilities and reward them for those things, but we don't need insurance policies. We don't need 2 or 3 teams doing that kind of work. So you're going to see us unwinding some of those things, and that will give us opportunities to do two things. One is to put more money back into our margin and help our operating margins improve. It also allows us to reinvest some of those savings into the first topic that Andrew brought up, which is building out more self-service capabilities. We've done a lot to build out self-service capabilities, but we have a long way to go and our customers, all of our customers want to be able to self-serve. So don't think of self-service as the small little one seat customer only, which, by the way, we need to address through digital means entirely because that's the only way we can make money on it. But even our largest customers want to be able to self-serve. They want a personal relationship and a strategic relationship with us so we can help them actually accomplish their most important business outcomes, but they don't want to be working with us on transactional-related things and just the normal administration of how do we run this large environment. They want to self-serve there. We still have a ways to go in building out those self-service capabilities, so we'll take some of the savings and invest in more self-service, which, by the way, after it gets implemented, allows us to further optimize and to remove more of the human touch points out of the equation. And so this is why this is a multiyear journey of optimization. So think about the last several years have all been about building their tech stack to be able to introduce all these capabilities. This year has really been about the implementation, rolling it out, and we're moving into the next phase over the next few years, which is really optimization and those are the places we're going to optimize.

And the last thing I'll add here because it might be an efficiency that people don't realize, but when you get the self-service infrastructure working well and robustly, it actually speeds up new product introduction, especially when you're introducing new products down into your market as opposed to up in your market. Up in your market will already be significantly better because of the muscle we have at direct, but it actually really makes it a lot easier to do a new product introduction downmarket, and you don't have to add the insurance policies to the same degree that you did previously.

That's right. In fact, self-service will start showing up even inside the products, product-led growth, which are capabilities that will actually expose more capabilities and more of a higher-value offerings without a human being involved. So again, this opens up a lot of opportunities. We just have to build this all into our offerings.

That was great color. And on this, Steve, you mentioned a lot about all of the transformation, and there's been a lot of transitions over the last few years. So when you think about what that means for the end state, Andrew, I'd love if you could give a little bit more color there. I don't know if there's companies out there in the tech landscape today that have models that maybe you guys are trying to replicate something that might be more tangible for the audience. But what are your thoughts on what that ultimately looks like? And if this new transaction model is the end, right, or if there's more to come?

Look, the new transaction model is the last big change, all right? Now we have to get through it, all right? And these things -- it's not like an event, right? There's a long tail, right, because you have to get -- it takes multiple years to absorb kind of everybody onto the system as you go on. And then we have to introduce it in markets we haven't introduced it in yet, which we're introducing it in 80% of our business at this point, but there's still going to be a long tail there. But that's the last big thing. And look, the kind of companies that we want to be really like, I would say Intuit is a great example. Okay? There's a lot to admire about Intuit with its platform strategy, it's extensibility. It's end-to-end suite with regards to how it deals with the financial management of small businesses and the things associated with that. We like kind of the things that Intuit has done. When this is all over, we've completely rebuilt the back office of Autodesk, right, a back office that was sitting there, very crusty, very, very neglected for a very long period of time. And that back office is going to allow us to accelerate and do new things. It's also going to allow us to bring in new products faster, bring in new businesses faster, respond quicker. It will increase the efficiency on acquisitions because the acquisitions will be able to integrate more quickly. But we're on the last big one. And like I said, companies like Intuit are kind of in line with the kind of things that we aspire to in terms of the whole stack working in the way it works. So that's the direction we're heading in. I think we've made excellent progress. Now we've just got to get through the long tail of finishing these issues. But the big things, the big things that create lots of noise in the business, those things are done. They just need -- we just need to get through the little kind of long tail of issues that leads up to this.

And actually, to Andrew's point, the big transformations are done. We just have finished them. But if anything, this tech stack that we've built gives us optionality to continue to expand our value add to our customers. So to Andrew's point, if you think about Intuit, we're focused on being a design and make platform company. And platform needs to have a lot of value added from outside of the company that develops the platform itself. The ecosystem is incredibly important. And so if you take a look at the Salesforce or Amazon, they have so much value coming in from outside of their companies that add value to the ecosystem. On top of this tech stack we built, we anticipate being able to build a digital ecosystem and even a marketplace in the future so that we can bring more value in, we can work on rev share opportunities and actually add more value to our customers and make our offerings even more relevant to our customers and drive expansion. So -- but that's not a transition that doesn't require us to transform...

It's an outcome of the transition.

That's an outcome of it, it's a positive outcome.

It's an outcome of the [indiscernible] that we've been building over the last couple of years.

Exactly.

Perfect. Let's talk about the platform opportunities. So Andrew, you mentioned that there was a lot of work going into the back end, right, and making sure you fix that. So when you think about what you guys are doing to facilitate the cross-sell motion, any color that you could provide there? And this will probably tie in Construction Cloud. You guys have made a lot of interesting announcements on wins and customer momentum that you're seeing there. So when we think about Construction Cloud, Fusion, and Forma, any sense that you could give us at the scale of those businesses today and when they could start to be more material drivers of growth.

Yes. So construction is already material, all right? You can see that by the size of our make business and the rate and pace at which it's growing. That business is on its way to being Autodesk next $1 billion buses. Okay? So it's on its way. Fusion continues to grow robustly. Forma is very much in its early stages. It's growing in the upfront part of the design processes, but it's also natively connecting itself to Construction Cloud. So it's getting ready to rebuild that kind of pipeline between design all the way to construction. The important thing you want to watch that what we're doing right now is we've introduced a lot of ways for customers to access and connect their data through our platform. So we've introduced a lot of granular data. We've taken the data that's locked in files and we put it into databases. Now we haven't converted our products to fully running on databases, but we've created an environment, except maybe for Forma and some of these cloud-native products. But we've created an environment where the data that's locked in files is now available through APIs. And these APIs allow our customers to connect processes in ways they weren't able to do before, and it provides a huge amount of value to them. So over time, we're going to be increasing the amount of those APIs, which means that not only are we going to be stitching design and make together, our customers are going to be stitching design and make together for their particular processes. And they're really responding to this. We're seeing large increases in our API usage, which is kind of presages the future. And then our partners are going to be building custom IP on top of these APIs and doing things that we're not doing deep [ countrification ] or deep modifications for a particular customer in a particular region. These things are going to be part of the platform transformation, that's why we focus so much on data right now to get them on board, and it's working. People are seeing what we're doing, and they're engaging with us. And over time, what that will be is a whole new revenue stream for the company associated with monetizing that API access, but also monetizing the custom IP that's associated with that platform.

Perfect. And maybe since this is an AI conference, we'll end on AI. So I'd love to hear what you guys are seeing in terms of traction and momentum for Autodesk AI and Project Bernini. So when we think about AI, I know in the work that we've done, it seems like there's a lot of applicability to the industries that you serve. But when you compare it, I guess, to other areas of software, there's lots of hype in what Salesforce and ServiceNow are doing. So just curious why do you think that is? Where are we in the demand trajectory? And how are you guys thinking about monetization?

Yes. So first off, the reason you're seeing hype in some of those other industries is because they deal with data flows and processes that are essentially moving kind of database pieces along the process, they are highly exposed to disruption by AI. I mean, in very short -- the barrier to entry has dropped significantly for all those industries, and they've got to move fast, all right? And they have to get [indiscernible]. Our stuff is a little bit more complicated, but we're still moving very fast, right? And we're moving along 3 vectors: One vector Steve's teams driving where we're looking at internal uses of AI inside the company, using things on top of Salesforce to do things that we had trouble with Salesforce doing, some of it with using Salesforce tools, some of it not using Salesforce tools. We're doing other optimizations with Salesforce -- with our sales force in other places where we're actually driving efficiency with processes, same with our development organization, where we're -- GitHub Copilot is real. It actually does provide real productivity to internal development, and we always need more development. The other vectors we're working on are two other vectors, and you talked about them. One is Project Bernini, which is a top-down kind of transformational play where we're looking at things that generate outcomes, that's a long-term play for us, and it's going to evolve over time, but it's going to dramatically change the way some of our customers work. But at the same time, we're working on these, we like to call them boring AI, the bottom-up innovation, okay? The things that if you ever sit in front of one of our products, all right, they're incredibly powerful products, Revit, Fusion, Inventor. These are incredibly powerful 3D design systems. You have to know how to use them to get to a really good 3D model that works. And sometimes it can take months to create a 3D model that's driving a process from end to end. What we want to do is shrink that time dramatically. And we're doing that by creating foundation models that are little brains that understand how the products work. And ultimately, these little brains are going to talk to each other, and they're going to really remove some of the grunt work that's been built into some of these applications. And that means that our customers are going to be able to deploy fewer people on a project and bid on more projects. They all want to do that. They all want to bid more predictably on more projects and they like fewer people in the project so they can use their assets more effectively. So look for us to do all these things, internal, top down, changing the way the industry works and bottom-up gobbling up the complexity with some of our foundation models.

And by the way, the last one that boring AI that our customers will use. That's one of the ways we're going to help them address that capacity issue of not having enough employees because if we can automate more of these tasks, they can get more out of even the folks that they have right now. Some of their most talented people are spending 50% or 60% of their time a non-innovative tasks that can be automated through AI. So again, you can see how this kind of will have a multiplier effect as we continue to build out the capabilities.

Perfect. Well, that was great. So we'll end that there. Thank you, everyone, for listening in. And let's give Andrew and Steve a round of applause.