DocuSign, Inc. (DOCU) Earnings Call Transcript & Summary

All right. Good morning, everybody, and thank you for joining us on day 1 of the Morgan Stanley Tech Conference. My name is Stan Zlotsky from the Morgan Stanley software research team. And with me this morning, we have the pleasure of hosting Dan Springer, the CEO of DocuSign. Dan, good morning. How are you?

I'm well. Thanks so much for having us, Stan.

Well, so before we begin, very quick, for important disclosures, please see the Morgan Stanley user disclosure website at www.morganstanley.com/researchdisclosures.

All right. Well, with that out of the way, Dan, good morning, again. So with everybody who's dialed in and listening to the webcast, I think a lot of people are very familiar with DocuSign at a very high level. But just to maybe give a little bit of background, can you give us a little bit of an overview of some of the exciting products that you guys rolled out in 2020? Or just maybe the overall product highlights over the last year.

Absolutely. And to your point, I mean, historically, when someone says DocuSign, so the recall is basically eSignature, and that was what brought us to the dance. It's still fantastic leadership product for us. And of course, through this past year, we've talked a lot about the fact that with the horrible pandemic, one of the things that it did in a positive way for our business was accelerated people's digital transformation. And because most people actually start their digital transformation in our sphere, in the Agreement Cloud sphere with signature, we actually saw an acceleration, as you see in the last few quarters, to our business driven on the eSignature side. At the same time, to your point about what we've been focused on and the investments we've been making to broaden what we call the DocuSign Agreement Cloud, with some very exciting wins over the year. One was we did acquire Seal Software, and that, of course, was a company we've invested in previously, have gone to market with. So it's kind of a no-brainer extension. They really have this advanced analytic capability and artificial intelligence capability. And our major focus there was trying to introduce that to our customers that hadn't seen it by integrating it into the overall Agreement Cloud. And we feel really good. We introduced Analyzer, and then on top of that, we have what we call Insight product that we've sold together before. So that was a big win. And then the other thing I would point to that we were really excited about this year was the acquisition of a company called Liveoak, a small team that's Austin based that really gave us an opportunity to extend into remote online notary, which we think is going to be an important growth area for us as well. So those are probably the 2 biggest things that were new. And then, of course, we've lots of work on the signature side, integrations with things like Slack and SMS and tons of fantastic ongoing development in signature. But in terms of outside signature, I'd point to Seal and then the notary piece.

Got it. That makes sense. So we'll definitely dig into the product component, especially Liveoak. I do think that it's a really interesting one, just seeing all the changes that are happening on the notary side of how that -- just how notarizing is done. But just staying very high level, right? Obviously, in 2020, you guys saw big tailwinds from COVID. When you think about those tailwinds, was there something -- beyond like the obvious, was there something really that kind of stood out to you and surprised you and you said, 'Wow, I wasn't really expecting that particular part."

I mean that's funny in terms, we started the year, we -- before COVID. And our year starts February 1, and we're off to a pretty good start when March came around. And by March 15 when most people were sort of shutting their offices, as did DocuSign, we definitely saw an increased acceleration. And the one thing that even throughout the year sort of surprised me was how many folks had not yet started their digital transformation. And it kind of makes sense when you think about the TAM, we talk about signature TAM about $25 billion worldwide. And if you think about where we are coming in over $1 billion but less than $2 billion this year and you think where's the dramatic market share leader, you kind of think to yourself, there's a lot of untapped potential in the signature business. So that kind of makes sense. But somehow you just think about it, most people say, hasn't everyone used eSignature? I mean it just feels like it's [indiscernible] right? So from that standpoint, we definitely had a phenomenon which surprised me at how many companies showed up and said, "We really need to get eSignature going." Because of the work-from-home environment, they couldn't do the things they were doing before, and they hadn't yet started with DocuSign. And so that probably throughout the year, kept surprising me, all these companies that you think would have already started and they'd call us and say, we really need to get going on this journey. But other than that, I mean, it makes sense what happened, given the need for people to be in a work-from-anywhere environment. And so we were not surprised to see the strength in eSignature.

Got it. That makes sense. So as you now head into 2021, right, when you think about the opportunities that you now are carrying out of 2020 into 2021, which ones do you think that may not have been there pre-COVID?

Yes. I think we have this point of view, this is not scientific. It's more conceptual view as to how the market's developed today and how it will develop going forward, it's that there was a natural journey that people are on or going to be on. And what COVID did in this last year has accelerated it. Some people got started faster, as I just mentioned. People hadn't yet -- they're going to do it, they hadn't yet got started. And some people added more use cases faster than they probably would have, right? And the classic examples that you see, an organization that might be using us in the back office, but they hadn't actually put their customer contracts there because they had a process for doing that or they hand-delivered them as part of the sales process or FedEx'ed them to people, had them routed around to get multiple signatures. And it worked for them, it worked well enough. And now they said, "I can't do that. My people aren't in the office and most people aren't in their office, where do I send things," and paper just didn't work anymore. And in that situation, we saw that acceleration, but it was going to happen eventually. It just happened faster. And when I think about going forward, we think 2 big things. One, people are going to continue to accelerate on their digital transformations because they're seeing the incredibly high -- higher ROI. So that's for sure one. Second is no one's going back to paper and manual process. Once you transform your business that way, seeing the value, sort of done the work, right. Going back to paper, going back to the manual processes and the time lags and the cost increases, we just don't see people going back in use cases. So when I think about '21, the big thing for me now is companies that defocus on some of the more complex projects like CLM, right. The big part of our Agreement Cloud, is having a way for people to really manage that life cycle of their contracts and agreements. That's a place where we think this year that's going to reaccelerate. And so pre-COVID, that was really -- we saw that starting to take off in our business. And we saw that slow as CIOs said, "I can't do some of these more complex projects that require systems integration or some professional services. I want to go do the things I need, desperately need to get done." And that's why signature had high ROIs and so fast. We saw that grow faster. I think this year, we're going to see a return to that focus on the broader aspects of the Agreement Cloud.

Yes, that makes a lot of sense. And there's clearly a lot of adoption that happened of eSignatures during the pandemic. But the interesting thing that I always was kind of trying to understand is like who are these people who somehow survived through the pandemic without eSignatures, right? And they're just coming on board now as we get into 2021, essentially through the year since the pandemic started, how did they survive? Like, how did they get through this first year of the pandemic without a product like yours?

Yes. Well, a couple of thoughts. The first one is, I told you earlier, this concept of when you go to the TAM, you kind of look at it and you go, "Oh, yes, that makes a lot of sense." And so you start off and you think that. So a couple of things. One, think about international. So we have a phenomenon where we're much further penetrated, even though we're still early innings in the U.S., we're much further penetrated in the U.S. than we are in basically every other market. So I think we have a big international opportunity. A lot of the companies in those markets just hadn't gotten there as fast as they could. I think the second thing is you do have a certain turnover phenomenon business, particularly we see this on the web and mobile side, the small business side, where new business are being created all the time. And they're coming to us and they're finding DocuSign capability to kind of get up and running with their business. So they'll be there. And then the other big piece, and this is what I think sometimes we don't articulate as well as we should. But we have a land and expand model. So when we land a customer, it's usually a couple of use cases. So this is one use case and a group will come to us, and even at a very large company, will come to us and say, "We need to get this process started with our digital transformation." And then they might do that. It might take them 6 months to really feel that that's successful and underway, then they come back and do more. And so a lot of times when we talk about the growth opportunity, it's not all about net new customer adds, right? We have a little less than 1 million customers in the company. And there are a lot of companies out there, more than 1 million. And so there's a lot of them that aren't there yet, to our point. But maybe the biggest growth opportunities, taking a look particularly at the enterprise, these large and large government agencies, is expanding, expanding where they have a couple of use cases to the point where they might get to 2 -- we have some people have 200, 300 use cases where they've used DocuSign. And that I think is a key part of the growth in eSignature that people sometimes miss. And then separate, obviously, from this is the Agreement Cloud, which is a large part untapped.

Right. Well, so again, you touched on a whole bunch of really interesting topic areas there. But maybe the one that I wanted to just dig into right first is international, right? International has been, obviously, as you mentioned, a big growth area for you through 2020. And Mike Sheridan, he recently took over heading up those efforts. What's different about international as far as the adoption? Was it that they were just maybe a little bit later to the adoption, to adopting eSignatures and now they're just coming on board? And just when you think about your international strategy, is there a lot more that you need to do to make the product ready to hit like the main global areas? Or is it largely there, it's just a matter of time and pressure?

Yes. So I'd say a couple of things. First, it's -- some of it is them, right, the companies in those countries, and a lot of it's us. And so if you actually take a look at it from the standpoint of why we have just getting 20% of our revenue coming from overseas, is since we started late. And there's 2 sort of reasons we started late. One, I think we're -- like a lot of American software companies, we saw a lot of opportunity here, and we were growing very fast, and we just had plenty of opportunity. And we probably half a dozen years ago, probably should have been a little faster or maybe more like a dozen years ago should have been a little faster to get that growth. There is a phenomenon in the legal structure, the sort of 2 models we talked about, right? It's the common law and the civil law. And common law countries are the ones that at one time were probably ruled by the U.K. and they're part of the commonwealth, including the United States, that's Canada, that's the U.K. and Ireland, that's Australia and New Zealand. If you think about those markets, and we have a certain legal structure on how contracts are done and signatures are accepted to really bond agreement is one way. And then the civil law, which is all the other countries. So in aggregate, significantly more countries. And that's people like Germany and France and Brazil and Japan, and you sort of think about a lot of the large economies in each of the geographies of the world, they tend to be civil law structure. And so we did have to, about half a dozen years ago, start to make some investments to be sort of ready for the civil law countries. So if you look where our successes are internationally, the common law countries is where we had our first footprint and where we have our largest footprint, but it's growing faster now in some of civil laws where we later started to catch up. And then one thing, just a great metric that we actually sort of unveiled last -- 2 earnings ago was this model where we took the chart. And we looked at, moved the time just so when we started in the U.S. and looked at the growth of the business and then moved back the international growth and the international growth is basically exactly parallel to the rate in the U.S. growth. Just started a lot later because it was half a dozen years ago, we moved with that, moving there in a significant way. So our sense is that it will continue to scale. The TAM there is big. And over time, that will become a bigger part of our revenue. And you mentioned, we've asked Mike to provide some leadership there to ensure that, that happens. We are pleased that in the last year, we saw some nice move from about 18% to 20% realistic. I'd like to see that much higher than 20%. It's going to take some time because the North American business in the U.S., it's going to continue to grow at a very rapid rate. So taking share is going to be tough for the international team, but absolutely will.

Got it. And just on the international component, just from a product perspective, right, is there still more that you need to do in terms of localizing product to be able to address all -- I mean, obviously, there's so many different -- I mean it's very simple to break it out into common law and civil law. But in reality, there's so many little nuances in each and every country in the world as to how business law and contract law is done. Is there more that you need to do in terms of getting your products localized into all those countries?

Yes. I would tie it with the construct of the broadly defined localization, in sort of 3 buckets. And the first one, you just articulated, the core legal framework construct. I actually think what we've done in between civil and common, I think we're pretty much there. Again, as you said, each country from time to time, will have things -- you have the phenomenon like of the eIDAS Act in to cover the European Union. And now the question is, well, different countries do different things around privacy. It might have to change something what we do about the way we store information, as an example. So there could be small things incrementally. But at the highest level, Stan, I think we're pretty good on that sort of core model. I think the places where we still have significant work to do on our internationalization is around language components. So obviously you can sign in any particular language you want, but having the interface that we use, so for people to use it in different languages, and we've done a lot of that localization already. But in additional countries, there's going to be more of that. And then the last piece -- and it's not just for signature, that's -- we're thinking about CLM and thinking about the advanced analytics products as well. We're going to have to continue to develop things in this country. And as we get to the other countries that are operating in different languages, we're going to need to continue to do that. And then there are from time to time, things that are just different. One of my favorite examples is in Japan, a lot of times people sign contracts and a lot of times, they use a stamp or a chop and sort of get sealed that way. We've built the capability to do, and that's called a Hanko. We built an eHanko so you actually can stamp for our Japanese customers if they prefer to do that than signing. It's centuries old tradition in some markets in Asia, including Japan. So there's some things like that. So we won't be able to do all of them, but in certain countries where we want to again localize to customs that are different. So those are kind of the components. But the big one, I think we feel good about in terms of the way we've thought about the overall legal framework and now it's just more about customization. And primarily, I think the biggest one will be still around language. Language will be that kind of real breakthrough component in different markets where it really unlocks additional growth for people who just don't want to run their business in an English-centric way.

That makes sense. And the interesting kind of thing that we hear sometimes when we talk to the customers and partners is there's almost -- the R&D that you've devoted to your international, that almost becomes like an important differentiator, right? Because what it enables customers to do is say, "Hey, DocuSign is going to be my global system of agreement. It's going to be my Agreement Cloud for everything from eSignatures to CLM to even the post-agreement components, right?" Is that what you're seeing too in your conversations that, yes, the focus that you're not just a U.S.-centric entity, but you're truly a global product, able to support global platforms. Does that truly set out in your mind as a competitive differentiator for you guys?

Yes. I think it absolutely does. And I'll give you 2 examples in terms of how to think about it. One is the large banks. And so we see large banks -- and I actually remember years ago, I had a meeting right after I joined actually with Mike Corbat at the time. Now he's stepped inside Citi. And he said -- it's 2 important things he said, we have 100 markets where we'd like to have DocuSign. Like, we have 100 countries, where we'd like to have DocuSign. And he said, so we need to get there eventually together. He said, but the reality is, there's like 3 that really matter for us to get it right in terms of our partnership. If we can build it right, the other 97 will follow, and they'll follow at the pace that makes sense for you and for us to roll them out. I think there's some organizations like that, where it is they're very global in their nature, but it has been either U.S.-centric or, in that case, it was a couple of Western European markets as well that we needed to get right. I think we're seeing that that's how it's going to be for us for a lot of global organizations. Even if they're in 100 markets, we don't need to be in a really significant developed way in all 100 markets. But we need to be in a bunch. That's sort of -- we have physical presence now in about 15 countries. And of course, people buy DocuSign in hundreds of countries because -- 180, I think, we're up to of the couple of hundred countries out there because of the web and mobile business as well. But on the direct side, we're focused on those biggest markets. And at the same time, we also have other people who do approach us on, I'd say, a more global way. Usually it is a great example, right, where they start thinking about themselves as their products are sold everywhere, so they don't sort of think about their 1 or 2 big markets, although they definitely have certain markets are larger than others, but they really think about it in a global way. But the global way is their end customers, right? So that just means that that's not so much in terms of people who are doing sending of the document, but the people who are signing them. So they think in a very global way from a signing standpoint. So you get these different sort of models. And I think there's no question that when we can work with a big multinational company and say, we can give you a standardized solution and it can meet your global need, whichever of those 2 models I've just described, super powerful. And then it makes it, I think, very unlikely that local competitors will build up strength. There's always going to be some preference for people in different countries to sort of work with a local company, makes sense, and we get that. But we think we can get to a place where our platform play will give us an additional momentum and folks will just say, yes, we're already on this globally. Let's consolidate onto that tech platform.

That's definitely something that we're hearing as well in our work. And specifically the Agreement Cloud, right, where you can really take and do your entire document life cycle from start to end. So just maybe transition to the Agreement Cloud and just the broader, beyond just eSignatures. When you think about a typical customer, right, that used to be just an eSignature customer and all of a sudden -- not all of a sudden, but over time, they mature their usage, and now they become an Agreement Cloud customer, right? So with SpringCM and Seal, how much bigger can that customer be as a result of adopting the broader Agreement Cloud versus just maybe eSignatures?

Well, so one of the interesting things is when you do things on average, it gets to tricky situations because there are some people who will probably be very substantial signature users but might have a small footprint in the rest of the Agreement Cloud and vice-versa. To just give you a couple of examples. If you are a large B2C company, it's quite possible, so you have a lot of customer agreements, that you could use DocuSign signature to manage all of those relationships, and it could be a really important part of your business. When it comes to something like CLM, they might say, yes, we need to have a core repository for our agreements, but we're not doing something complex because the agreements mostly aren't being edited, right? This is like a core consumer agreement, and we need to capture the information from someone, but we don't have a lot of negotiations, we don't do a lot of things, we kind of keep that same agreement. So they're going to have a lot of signature and probably not as much CLM, as an example, just to keep it simple. On the flip side, if you think about it yourself as a B2B software company, like DocuSign, we have a bunch of customers, and we do have a bunch of agreements, but we also have a lot of enterprise customers, where we have complex agreements. And we have a negotiation process and development element, customization of those agreements. So a CLM tool is actually really, really valuable. So we will probably spend more to buying our own stuff and give it to ourselves for free. But if we weren't buying it for ourselves, we've spend a lot more on the CLM type process because of the complexity that we have for certainly enterprises and a smaller amount on the signature, but a good healthy amount in sort of both. So that's kind of the way I think about it, is it varies. But if you're trying to say on average, there really is no average customer, but when you start looking at the TAM, this is where I come back to, we look at the signature TAM being about the same as the rest of the Agreement Cloud TAM, both about in the $25 billion range. So from that standpoint, you would say, on average, over time, as we penetrate the rest of the Agreement Cloud, that it would be about the same size. So if there were an average customer, but there really isn't an average individual customer, they'd probably be somewhere in the half and half between the 2. And that's how we look at the market. They're about equal size opportunities, signature and nonsignature.

Right. Right. And when you think about the potential for these -- for customers to adopt a broader Agreement Cloud, right? What I would think is you guys, in 2020, picked up a whole bunch of customers who came on to the DocuSign platform for the eSignature, right? And now when you roll into 2021, how do you think about the potential to really take that much bigger installed base of eSignature customers and upsell them and cross-sell, frankly, the -- just the much broader Agreement Cloud solution to those customers?

Yes. I mean, so just to be blunt about it, that's my job this year and then -- I mean in the years to come, too, right, is we have a fantastic opportunity, as you said. Now we need to deliver against it. One thing I would tell you is that from a pace of change, we've always been, from our core values at DocuSign, a customer success company. And one of the things that we realized as we got into the broader Agreement Could was it's different from signature, right? So the way you adopt, the way you become successful, in some ways, it's more complicated. I mentioned earlier the way we think about CLM versus signature. The ROI is so fast in signature because it's so straightforward. For CLM, sometimes you need to bring in systems integrator, and our pro services team can work with you to sort of implement. There's a statement of work that someone's building out on that project. And so because of that, we're figuring out customer success all over again, we're relearning it. And we've learned one great way to do it. And that's why you think our net retention rate has been going up, and we're really pleased with that. Because I think we're getting more successful at driving our customers' success. Now on the Agreement Cloud side, again, to use CLM as an example, we need to do build that same sort of skill, that same muscle memory to make sure that when we bring people on, we're getting that great success. And so for us, this year is the year where I'm even more focused on driving the success of customers that I am on the top line growth for things like CLM and advanced analytics because I think the answer is we've got to become great at that, to be the clear leader, the same way we are in signature across all the other Agreement Cloud products. So you'll see us talking a lot this year about the investments and the focus we're making in driving customer success in things like the CLM. The last few years, you go back a couple of years, that was a huge talk track that you saw, and we've been saying like we're investing heavily. The area we grew fastest was customer success to ensure that we could have this kind of retention and growth of that land and expand model off of the eSignature base. So this year, yes, it's cross-sell, for sure, is going to be a big focus. But in the SaaS software world, if people miss -- the key to success really is about making customers adopt and then buying the business success on your platform. It's as if that movie won't end well, right? So we wanted to end in the right way with the continued accelerant to the language side.

Was -- if you were to look at 2020, was there a certain amount of customers who wanted to adopt SpringCM and Seal potentially, right, but just given everything else that was going on, right? Was there a certain amount of customers who are like, look, we just don't have the -- whether it be the actual budget dollars or just the actual human capital investment dollars, to dedicate to an initiative like this. And therefore, they always kind of did kind of kick the can down the road into 2021. Was there something that you heard as you were talking to customers and prospects through the year?

Absolutely yes. I mean, there's no question. In the first half of the year, we saw it ended in the sales cycle. So people who said, "I was about to buy it and then implement it, " they said, "We're still going to buy this, we buy -- we really buy into DocuSign Agreement Cloud vision. But I've got -- I mean I just send everyone home, trying to keep the lights on. I just -- this is something that I just can't prioritize. I have to find these things that are really business critical." And that's what we saw from our customers. And by the end of the year, we saw that on the sales cycle starting to come back with people saying, "Okay, yes, we've gotten through this. Whatever the new normal is going to be, who knows, but we've gotten to work in this new maybe not yet normal, that we're all struggling through the pandemic, and we want to get back to some of those plans." And I think one thing it cost us that we didn't get the opportunity, Stan, if we've had that volume of new deals coming in sounding at that rate, it would have forced us/allowed us to really focus on that customer success component for CLM to start with. But that kind of got relaxed a little bit. And the other thing is that we shifted our focus to meet where our customers were betting us to be for them on the eSignature side to sort of meet that demand. So now what we kind of have to redo in this fiscal year '22, calendar year '21 for us, is to get back to that and ensure that we drive that great success, which will be -- that will be the harbinger of all the growth and selling we want to have in years to come because we want to continue to be the company that says, you should buy from us because look how we're making everyone successful on their platform, not you should buy from us, we've got a great story, and we'll figure out success for you.

Got it. That makes a lot of sense. And when 2020 happened and you kind of referred to it when we first started the discussion. The usage just went bananas, right? And I've seen it just looking within Morgan Stanley's own usage of DocuSign, we kind of went parabolic as we went through the year. But for you guys behind the scenes, right, how do you deal with customers who usually spiked as much as ours did in terms of, do they get into early renewals or is it just, hey, the higher usage, does it become more of a just a conversation topic when it comes time for the customers to renew and you say, "Hey, we're so excited about your -- the usage you're seeing, that this is how we can work together to help you better adjust to your usage patterns."

Yes. So there are 2 aspects to what played out. One is, of course, for our team which we also just sent home to a work-from-home model, we had to be able to do about a year's worth of scaling projects really in about 6 weeks. So it was crazy how much we had to pull forward to be ready to meet that demand. And I could say, kind of, knock wood, we're successful on that. And then on the contracting side, the bulk of our agreements, as you know, are structured not like sort of like a fixed amount and then you get an overage. People buy capacity from us. And if they buy capacity from us and they start to exceed that capacity, it leads to a conversation. If they're a month away from a renewal, to your point, it's like, "Hey, we'll true it up at the renewal." If they're a year away or 2 years away from renewal, they're just growing much faster than we thought. And we have a conversation about what we need to do and early renewal, and we need to make this more fit to the volume that you have. And people understand that. So there's a mix. But if people are really close to the end of a contract, we probably just let them be sort of over, if you will, and then we true it up, as you said, the next one. But if they're long ways away from their next contract renewal, then we would drive into a renewal. And we did see some of that during the year where people came to us and said, "Yes, we get it. We're exceeding our capacity. And we need to true up." It isn't that complex, we're going to make sure they'll increase their capacity, and we give them a new pricing tier based on that volume.

Got it. And Dan, well, actually, we're coming close to the end of our discussion. But one thing I wanted to hit on and that is federal. Back in 2018, U.S. passed something called the 21st Century IDEA Act, which really was meant to streamline how all these different federal agencies, how they handle forms and all the digital initiatives around that. What have you been seeing as far as -- and obviously, the federal government has been really busy through 2020, no doubt. But what are you seeing as far as like the different federal agencies and their preparedness for compliance with the 21st Century IDEA Act? And just maybe more tactically, right, how are you thinking about your federal opportunity into 2021?

Yes. Well, let me start off, I know we're short of time. Let's start off with government in general, and picture down to federal. So government, public sector was a dramatic growth area for us over the last year. We think lots of agencies realize, oh my God, we're way behind the time. Now we're sending people home, we don't have a way, that kind of core thing we described earlier, and they really desperately needed to get use cases up and running. And then, of course, a lot of groups, we have a great case study we talked about the Department of Labor in New York, where had all these claims, it's a horrible situation, but they had to quickly get money into people's hands for unemployment insurance, and they've never had that kind of surge demand, so we have people who not only have to get things in place, and they had to have the surge of execution. So we saw a lot of activity there. But we saw a lot more at state and local than we did at federal in terms of that jump. I think there's 2 things. One, I do think the federal government had a lot of distractions in the year. I think the intentions of being able to have eSignature and what that Act thing is fundamentally about was there, but it wasn't really a requirement that they get there. It's a requirement that they have a plan to get there. And I think a lot of the federal agencies kind of gave themselves a path this year to say, yes, we know we have to get that going, but given some of the turmoil and some of the challenges, it didn't move as quickly as they would like. My attitude, from the beginning, we first got our FedRAMP certification, and we're building out the IL-4 data centers, that's not just waiting for. It's all done to aim for class certification. We're making a long-term investment. This is going to be a big growth area for us. And we have never gotten to a giddy about that was going to happen next quarter and always been a focus of, this is going to move at a pace that's probably not as fast as our other customer segments are, and this is what it is. On the positive side, once we're successful there, I think it will have that same sort of solidity going forward, and we'll see that as being a real bulwark of what we're building at this company. So I think the answer is, federal was not as fast as the rest of the public sector in this prior year. Going forward, whether it's this coming year or the year after, I don't know exactly when, but we see that really ripe for significant growth.

Awesome. Well, I think, Dan, this is a great place for us to stop. I know we're a little bit over, but thank you so much for your time today. And thank you for everybody for logging on. And I hope you have a great rest of the day.

All right. You too, Stan. Thank you so much. Cheers.

All right. Bye.