Gen Digital Inc. (GEN) Earnings Call Transcript & Summary

All right. Excellent. Thank you, everyone, for joining us this morning. My name is Keith Weiss. I run the U.S. Software Research Group here at Morgan Stanley and very pleased to have with us from NortonLifeLock, Vincent Pilette, CEO. So before we sort of dig down into the details, a lot's been happening in NortonLifeLock over the past year. I mean it's safe to say, NortonLifeLock didn't exist at this time last year.

Correct.

So it's a new entity. And can you give us a little bit of your background? Sort of, what you had been doing prior to NortonLifeLock? And what attracted you to the opportunity that you saw at NortonLifeLock to come on board as CEO and take on this challenge?

For sure. So before joining Symantec, I was a 10-year public CFO the last 5 years at Logitech. I always enjoyed companies that have a great balance sheet, a good brand, sometimes a growing market, sometimes a flatter market, but a lot of capacity and capabilities to turn around companies that had been, from an operational perspective, misexecuted, if I can use that word. I invested first in Symantec in 2018 when they announced an investigation from the Audit Committee about certain procedures. By the time they closed that investigations, Starboard -- Peter Feld had joined the Board, investing to the company and they were looking for a new CFO. So knowing a little bit the company from the outside in, I thought that was the right time to join. The day I joined the company, they missed the quarter, back to the misexecution of companies I like, and a new interim CEO came on board, Rick Hill. We put a turnaround plan in place. Everybody was advising to sell the consumer business and fix the enterprise business. So we put a turnaround plan in place, which we presented to the Board and was kind of mildly excited. So we thought we did something wrong, and then realized that, that was only the fifth turnaround plan to turn around that enterprise business. So when a little bit later, Broadcom came up and proposed to buy the Enterprise business, $10.7 billion, for a division that generated $300 million of operating profit, we thought that was a great opportunity for us to get the value today after a risky 3- to 5-year turnaround plan. We then looked at the consumer business -- the consumer division, which started as Endpoint security division, the Norton brand. And then in 2015, '16, bought LifeLock identity protection business and merged those 2 to offer a membership structure to consumers that redefining consumer cybersafety for consumers and realized that, that division was really run for profit inside the company to fund the enterprise turnaround plan. So we thought that by reviving that business, leaders in both markets, the security endpoint and the identity protection, with a long-term vision, was the best output for shareholders. We sold the business in -- almost closed the deal on November 4. At that point in time, we had interviewed a few CEOs from outside to come in, all of which had great vision out there, but we -- the Board and myself, concluded that the best for the company was really to focus on operational execution and realizing the value of the deal we just had made. So I became the CEO in November. And our focus has been on eliminating the stranded cost from the deal of the enterprise and refocusing the consumer business for growth.

Got it. Got it. So before digging deeper into sort of the execution thus far to the transaction, but also sort of the plans on a going-forward basis, I'd love to get your perspective, from like a high level. Like, what does it -- consumer safety mean? Like, what does it mean for the consumer to be safe in today's digital landscape? What's the core offering that you guys are looking to put together today versus what a Norton was offering 5 years ago or a LifeLock, on a stand-alone basis, was offering? What does it mean to provide safety for those consumers today?

Yes. So the first thing that I'm thinking about is, in the physical world, when I think about protection, I think about insurance, understanding where my kids are, making sure that they lock the home, that there is an alarm on the home. And that's a very or very much mature segments of the security -- overall security market. When you think about cyber, there's a lot of activities we do that are unprotected. And if today, the core antivirus on your PC is kind of a commodity and you feel protected. When I look at my daughter, she spend half of her time online. And it ranges from doing her homework on the PC, all the way to watching movies, communicating, having new friends she's never met and many other things. And when I think about all of those things, we are not really thinking about protecting our daughters the same way. She posts picture on Instagram, maybe things that for her reputation, she'll regret 5, 6 years down the line. My son, who is 12 years old, is now at home. There was recently a problem of bullying at school. How do I know all of those things? And I don't feel he's really protected. And so cybersafety, for consumers, is all of those aspects in term of awareness. And then on -- that's one side of the spectrum in term of the long term, then we go and move into the short term. And as a new CEO, I meet with a lot of CEOs in the industry just to bring up my knowledge and understand the competition in the whole environment, and I realize that every company that come from the core, plain antivirus market has moved up, adding new functionalities. And it could be password management and other functionalities. But a lot of them are thinking a term of endpoints. And whether it's an endpoint that's a desktop or a mobile, it's still an endpoint. And the difference with our company having bought LifeLock, we're really thinking about user applications. And it goes from protecting on an endpoint all the way to restoration and maybe even insurance of any damages that your online activities could have caused. And so taking a very broad vision of cybersafety for consumers, I think, is our current approach.

Got it. Got it. From my perspective -- when I look at the NortonLifeLock story today, from an investment perspective, it's all about the ability to stabilize the customer base. You've seen 2 quarters of stabilization in terms of this 20 million consumer-customers you have today. If you could continue to keep stable customer base or -- and even sort of grow it on a going-forward basis, I think the stock is a no-brainer from where it is today. But I think there's a inherent investor distrust of that. I think investors are -- or continue to be concerned of that, that degradation of that base. What gives you confidence in the -- confidence and the ability to sustain that base over time? Yes. I guess that's a good question in there.

So first of all, I love when there is distrust from an investor base because it gives us the opportunity to beat your expectations, so please keep being that distrusting body. We -- before we talk about customer count, I have to say that the division, the consumer division, NortonLifeLock operating within Symantec, had the mission of maximizing profit to fund the overall profit commitment of the company where -- when the company was focusing on turning around the enterprise business. As they did that, they did a very good job at improving the ARPU, the average revenue per users, from below $7 per month to now $9 per month or $108 per year, crossing the $100 barrier or psychological barriers. And I think how they did that is by continuously merging the portfolio into a membership and increasing the engagement with the members. So a strong job on that side. In addition to that, there is very strong job in improving retention. We have an average retention rate of about 85%. By cohort and by tenure, it may change, but average for the portfolio, 85%. And you see the industry benchmark in our sector is between 65% and 70%. So very strong achievement there. How did they do that? Same thing. They continuously improve the engagement with the consumers, demonstrating the value we brought to them, to the members, as well as operationally improving the renewal processes. So good job on that one. What we did not do as a division is investing to acquire more customers. And so you saw a slight decline quarter after quarter after quarter of the customer base, about 20 million paying customers today into our membership. When we became a company, we said we're shifting the #1 objective for the company was to return to customer growth. We'll do a good job at continuously improving the ARPU and the retention rate, but that's not the primary objective. And I would acquire more customers even if that means a lower retention rate, a lower ARPU in an aggregate for our portfolio. Obviously, by cohort, it has to continue to improve to demonstrate the value we do. The first investment priority that we've made is returning to the marketing investments that the company had at the time of the acquisition of LifeLock. And returning to that level has enabled us to increase our investment into new marketing avenues like social media, paid search, et cetera, as well as moving our investments -- marketing investments in Europe and Asia where we had really not invested in the past. It takes time to stabilize the marketing awareness. And we've had, as you mentioned, 2 quarters now of customer stabilization, a slight growth sequentially last quarter. It will take still many few quarters, and that's our objective and that's our priority. And the last point I would make when you step back is -- also, we had a decline in customer count. We have 20 million paid customers. That's more than our direct competitors. And that's still a fraction -- if you think about the broader cybersafety for consumers, it's still a fraction of the 7.5 billion human being on earth. And so we still see a lot of potential to continuously push the portfolio by penetrating new adjacent markets. And so second level of investment obviously is to redirect some of the infrastructure savings we are capturing from the separation of -- from the enterprise to put that into a product portfolio investment, which would yield an increased rate of innovation over the next 12 to 36 months.

Got it. On the -- sort of digging down into the customer base. So you talked about this 20 million consumer-customers today. If you just think about the U.S. alone, it's 128 million households. What does your current customer looks like? Is there any kind of commonality in the demographic of your current customer? And just thinking about it from a customer base expansion, are there other parts of that 128 million that seem underpenetrated or sort of low-hanging fruit for NortonLifeLock to be going after?

Yes. So you mentions 128 million households. I mentioned 7.5 human being -- billion. So that just show you that we're still fairly underpenetrated. Even if you sum all of our competitors and all the paid customers, it's still a fraction of what total available market would be in term of that unit count, whether it's households or human being. And we need to continue to drive the awareness of what cybersafety means for consumer, continue to push the value of the portfolio. Again, if you think about the basic, plain antivirus say, "What would I pay for that?" But if you continue to increase the value and go into eliminating many of the pain points on new devices like password management, but in your life like managing your kids, et cetera, you still have a vast amount of growth. The cohorts today, it's still in all the cohorts, call it, like 45 years and older. But as the boundaries, the new frontier of security being basically the privacy, it becomes more and more important. I think you've seen more and more opportunities. Providing of course that innovation and new products, we need to address some of those new needs. My daughter again, 14 years old, posts everything online, doesn't really care right now about privacy. Although she starts to worry about Uber security and many other things, but it's very small. I'm sure the first time she'll apply, 18 years old, and people will surf on social media and say, "Oh, you're the girl that did this or that." She'll worry. And so reputation management and many other things will continue to be, in my mind, the next big view to transform. So make it practical, moving from the older cohorts to the younger cohorts. How do you do that? You need to explore new markets like the gaming markets. Other markets where you have younger cohorts can have needs and mainly go from the parents to the kids. So the next cohort is really the family and the family offering.

Right. Got it. I think an interesting part of sort of the evolution of the story, and this even precedes you, is moving Norton and NortonLifeLock away from a relationship between sort of the software and individual machine to the software and a user or a software in the household and in the family. I think your core customer is like a guy like me, who has a family, is worried about someone's stealing my identity, worried about what my daughter is doing online, kind of acting as the IT guy of the organization. Can you talk to me about how sort of that membership concept helps to sort of shift the focal point from an endpoint or a PC to sort of a user- or a household-type perspective?

And that definitely preceded me. I give credit to Greg Clark, who did a brilliant move by buying LifeLock in the middle of doing many things in enterprise and integrating Blue Coat. He saw that opportunity to accelerate the move from a end point device software to much more of a user case, offering a broader portfolio and redefining that cybersafety, if you want. Part of that vision was to develop this membership and different level of membership, and you could subscribe for that. And then part of that membership, you would have access to many new functionalities. And when we launched Dark Web Monitoring, then you get Dark Web Monitoring. For the highest level premium, you get everything that's in our portfolio, including the connected family for a certain number of family. Our view, I think we are at the beginning of that. When you look at the road ahead in term of integrating all of those functionalities, we're only at the early stage. In term of penetration, we're at the early stage. And then the last point I would make is the membership is kind of the vision, but you will never fully replace also selling an individual product, if there is an individual product that a consumer would want.

Got it. And if we can take the kind of the other side of that equation, now that the story is less dependent on end point, a couple of values go down. Like, one, does that change the competitive dynamic at all in terms of what's the dollar you're really trying to go after? So does it make, say, the Windows Defender less of a competitor because that's just about AV on the endpoint? Or -- so I guess that's question #1. Like how -- what does it do to the dynamic when we're not talking about an endpoint solution anymore?

Yes. So every market has a life cycle, right? And if you take the plain antivirus, obviously that's kind of a commoditized view, and you have Microsoft Defender and a few others that are there in that market. Your OS itself is more secured than it was 10 years ago. 10 years ago, it was maybe the strong point for antivirus. And everyone in that industry obviously has moved up, adding incremental functionalities, multidevices, multi to mobile, multi-OS. And then your function, I mentioned password management. There are others tracking you there. I mean sure, you have your cookies management in -- or -- to your endpoint. And then when you pass the endpoint, you get really in touch with the users. What is the user case from prevention to restoration all the way to insurance to restore or repay the damages of course when it happens? And I think we are moving along that line. Every competitors is talking about moving from that plan that is up, and they are in different stage. I think again the acquisition of LifeLock for us has enabled the division to really think differently in term of total dollars. If you look at antivirus from third party today, it's a $5 billion to $6 billion market. It's a flat market. As soon as you move into the identity market, it's still U.S.-centric, it's another $4 billion to $5 billion market, nice, growing 5%. If you think about some of the privacy element, although privacy is not well-defined as the market, but there are some markets in that overall broad area, you have another few billions, they're very fragmented and early stage. When you think about connected -- connecting new life and managing through AI softwares, anti-bullying behaviors and others, that's not even a defined market today. So the opportunity, if you want, in front of us is pretty big.

Got it. Got it. And then digging in on that, it -- since it's not as much about the endpoint as it was historically, how do you view OEM relationships? OEM relationships used to be the primary avenue that all the endpoint vendors -- all the AV vendors used to get new customers on board. Would those ever be attractive to NortonLifeLock as an avenue just -- to try and grow the customer base? Or is that relationship just too strained now?

Yes. So you mentioned a few times now, we're not so much depending on the endpoint and all the antivirus, which is true in the story, and you said the story. I want to really still be very clean. That's what I did in every turnaround we've had. We need to have a core. The core is coming from that endpoint, antivirus, right? To be clear, they are still the majority of our revenue. Being good at the core, being very efficient, it drives all the margin on our free cash flow and you penetrate it, and then you build up on that adjacent capabilities, adjacent markets, adjacent offerings, LifeLock was one of them and there will be more. But protecting the core, and we still want to be very good into the core, is important. In the antivirus market, we have about 30% of that market. You have a few other leaders that are of size, and then there's still 40% that's strong many -- amongst many small players. The way we get access in that market, the distribution, at a high level, 3 ways. One is you have a free -- freemium approach. You get for free, and then you get a customer or percentage of your customer base to upgrade. The second one is you partner with the PC or endpoint manufacturers and they preload and then you go and turn around a few or you get direct access to your customer through marketing and you have an e-commerce engine. We're the leader in the e-commerce engine. And we like that because our brand is recognized, we have direct access to the customers. And there is no in-between. In the past, Symantec had the OEM relationship where they moved away from because those are long cycle, 5 to 10 years relationship. They burn cash at the beginning and then they become profitable at the end. And if you have many, then you can stagger them. And so good luck on that. We decided a few years ago to not participate in those OEM deals because we're managing the division for profit. And as I said, if there is a good financial case to make for it, we would not shy away from it. On the other side of the spectrum, free software. We always decide not to go for that because our brand is viewed as premium. We invest a lot in R&D, and we develop innovative solutions. The advantage is the customer knows to pay for our solution. When you're a free software provider, it's always hard to come up with new product and convince your customer that they have now to pay for it versus what they got for free. And that's the challenge. And so we'll always review all potential distribution. There's no sacred cow. But we'll make strategic choice and decide to pick this on many consideration, including the financial considerations.

Got it. And pushing back on that a little bit in terms of the freemium model, there's been some companies out of Europe, like an Avast, that has been very successful with that freemium model, particularly going into geographies that like Brazil or Russia that are perhaps more price-sensitive. You've talked a lot about sort of international expansion, getting to sort of only 25% of your business out in the U.S. Is that a potential avenue that you guys would look at to get into the -- like in different type of economy or right now, it's just off the table as it would be direct-to-consumer marketing is the preferred?

So Avast isn't direct-to-customer, but they do freemium and another approach and us doing marketing and innovation and paid for customers. The goal is still to monetize. And I have to tell you the -- I don't know if it's the freemium model that's successful for Avast, but the management team is very, very strong, operationally focused. I have a lot of respect for what they did. It still requires you, if we want to move a premium brand, to go into a freemium to have a different approach. As we expand internationally, that's why I say we have a membership structure, but we also go single product. So last quarter, we launched [indiscernible] at a lower price point, not free, but a lower price point and trying to learn about some of the emerging market opportunities we could have. Going with the full membership, it may be too early for the development or for the offering in that country at this point in time for where we are in that country. But we -- again, we leave no distribution opportunity outside of our study, and we'll look at all of them. Some will make sense, some will not make sense, and we'll make choices based on that.

Got it. Two quick market questions and then deep dive -- dig into the private portfolio a bit more. Just from sort of a demand perspective, I'd be remiss if I didn't ask about any potential impacts from COVID-19. Some of the big companies like Microsoft is talking about disruptions in their supply chains and getting PCs out there. PCs are still sort of the core of your business. Any sense of disruption in demand trends that you guys are seeing around your business?

I mean the short answer is no. We have no revenue in China, no employee or sick people. I think in China, there's no employee in China. We're not attached to PC shipments. Are we attached to PC? Yes. We still have antivirus revenue in our environment, but actually, that's linked to the 1.6 billion PCs out there, many of which are outdated. So the more outdated you are, the more antivirus you need. So I'm glad that we dragged the life cycle of that installed base, but short answer is no.

Got it. And then on the flip side of the equation, there's been a lot of focus over the past year, 2 years on privacy, particularly with new regulations like GDPR or CCPA in California. Those have to do with consumer privacy. It impacts a lot of spending definitely on compliance and data governance for larger enterprises. Is there any kind of demand impact that you guys have sensed in terms of -- from a consumer side of the equation or more of an awareness and sort of you wanted to do more to protect that privacy as of yet?

I think those are long-term trends. And definitely, privacy is the new frontier of security, if you want. And that will only open new opportunities, I think. Our brand is known as a trusted brand. And the trust factor is an important one as we continue to look at privacy offerings. So short term, I would say it's going have an immediate impact, but in term of thinking and the evolution of our portfolio, definitely privacy is an opportunity.

Got it. So I wanted to dig into the product portfolio and in particular, the various components of that Norton 360 membership plans. You have sort of separate areas of coverage, if you will, device protection, online privacy enablement, Dark Web Monitoring, identity protection. Is there anything -- is there any one within then that tends to be kind of the lead in terms of bringing new customers on board? Or is it sort of all 4 kind of contributed?

This is the benefit of the membership. It has multiple functionalities. And based on the event that's happening in the market, we have a fast response marketing team that then tweak the marketing message to the event of the time. Early January or end of December, I don't remember, there was a Facebook breach. And immediately, we can tweak about what does it mean for you? Not only tweak for selling more membership, but tweak to educate both our members of today and future members of Norton 360 about the risks of leaks and other things. If there is some issues around data privacy or other kind of things, then we can tweak our marketing around data privacy and those concerns. So fast reaction of your marketing messages is probably the more important one.

Got it. Got it. So in terms of migrating the customer base towards the membership programs, how far are we in terms of the overall installed base, getting on to the membership programs?

We're low double-digit percentages, I think we're not very far yet. And it goes about continuously demonstrating the value, upgrading at time of renewals or when we bring on new customers. Most of the new customers were picking Norton 360 whether it's basic. Then we have 6 level of memberships. So we have the upgrade cycle through the renewals. An average lifetime of our customers for us is over 6 years. That gives us the view on how we're going to continue to increase the value over the tenure.

Correct. Got it. So from an investor perspective, if we're trying to externally monitor the success of getting customers on to the membership plans and getting that upward, it's just customer base and ARPU is the only metric that we should -- we could be thinking?

Actually, I would even make it simpler. Of course, obviously, the measure of success has changed compared August to now. But what I told investor when I became CEO is, the company was managed for profit. ARPU and retention were great metrics. The #1 success metric -- there will be many, but the #1 is that we can grow our customer count. We're bringing new customers on board because they like value. Even if they come at a lower ARPU, the first ARPU for a membership level is the one -- $5 a month, right? So about half of what the average ARPU is. But that gives us the installed base, the awareness and the opportunity then upsell and cross-sell as we move forward. Obviously, the customer acquisition cost, the long-term value of a contract, all of those are operating metrics. We're going to more and more disclose as the division becomes kind of a public company managed solely or focused solely on consumer cybersafety.

Got it. You talked on the recent earnings call and there's this discussion about new marketing initiatives that you guys put into place that helped stabilize and actually grow sequentially the customer base in the most recent quarter. Is it new marketing initiatives in type? Or are you certainly taking a different approach to those marketing initiatives? Or they're just new marketing initiatives because the old management team was so focused on profit, they weren't doing that type of marketing spend to try to generate demand within the market?

Yes. So first of all, out of respect and in due respect for the management team of that division, their objective was clearly to stay to maximize profit. And that doesn't mean cash cowing the profit, it just means investing to maximize the drop-through. And so ARPU and retention were the 2 key metrics, and they've done a very, very strong job on that. As we shifted to increasing customer count, the very simple -- our first request was to go back to the marketing investments of the 2 separate divisions, Norton and LifeLock, at which point in time, I think LifeLock was growing 8% to 10% and Norton was flattish. And we went back to that marketing investment level. The first reaction was to use the current distribution we had and the materials. And so the first view of those investments were in the traditional way. Then we quickly say, "Okay, let's now try to move to more social media or new media side and internationally where we never expanded." So we did that. We're now trying to build fast response team that can adjust on the events happening in the market to market one or multiple functionalities of your membership. And so we're constantly refining, if you want, the degree of sophistication of that marketing engine.

Got it. Got it. So as we think forward in terms of the longer-term plans, we expect to get NortonLifeLock into mid-single-digit growth or higher, but also the overall company, once we get through the restructuring, which we'll dig down into and then this trend of cost back to the 50%-type operating margin standpoint, which isn't too far off of where they're operating NortonLifeLock as -- or NortonLifeLock....

As a division.

As a division. So if we're making increased investments and now focusing on new customer adoption versus just focusing on the margin, how do we get back to that same operating margin? It seems like you want to have your cake and eat it, too.

Yes. So, Keith mentioned a lot of numbers and things in that question, including the mid or higher growth rate. So first for now, we said, "Hey, after the transition of this deal, we'll grow about low single digits. In the long term, we're shooting for mid-single digits." Comparing where the market is and the competition growing, that's a very non-ambitious target, and that's probably why you mentioned higher for me. We definitely have higher objectives in sight as we develop our plans.

[ It's not going to be that ] easy for you.

Yes. No, no. Of course. At the time, as the company was driven for profit, the operating margin was on the path of 53% to 55% operating profit margin. That is 53% in the first quarter of this fiscal year. And so we targeted about 3 points of margin to put into marketing investment, which we knew would have the biggest or the short-term ROI that we'd be looking for. As we did that, we -- also, we directed about 3 percentage point of revenues that were tied into infrastructure costs, like G&A was above 8% of revenue and 3% of that into new product and products, including R&D product management, which would have longer-term returns. Those investments initiatives enable us to say with reasonable confidence that we will be growing at that mid -- or low to mid-single-digit growth rate. We don't feel we need to increase or decrease the operating margin there as -- to get to 50%, we actually lowered the margin. And we feel good about where we are today in term of that target. Many questions investor ask me, say, "How do you pick 50%, why not 45%?" And my point is, first, let's learn how to walk. And by walking, I would say, grow up our current market potential, this 3% to 5% or low to mid-single-digit. If we are -- see a path to grow at high single digit, which, today, I would have zero credibility to tell you, we will trade off happily some point of margin if it means incremental [ growth ] or incremental EPS. So again, a little bit like the distribution, we're not married to a certain model. But it has to go hand-in-hand. If we invest more, it has to be for a higher growth rate than the one we've committed to.

Got it. We have about 3 minutes left, but I want to make sure we touch on the stranded costs and the restructurings that have been going through. When the deal first closed, you talked about $1.5 billion in stranded costs. That's come down subsequently. Can you talk about, one, sort of how you've been able to sort of take that overall level of stranded costs down? And two, where we are in terms of executing to sort of clearing that off of the income statement?

Yes. So first, before I answer your question, I do want to make an observation. Not too long ago, 3 to 6 months ago, every one of you, every investor, collectively defined, were telling me, "Oh, you guys can't get anything right. This -- selling the enterprise business is a mistake." And the stock was trading at about 8x EPS on a forecasted basis, right? Then we start to deliver, returning the cash to shareholders, started to eliminate the stranded costs. And the stock went up and trading at maybe 12x EPS, maybe where it is today. And thinking, "Oh, maybe if you execute right and maybe you'll get the stranded costs out." I do want to congratulate you because it's probably the first meeting I have with the investment community where we spent 98% of our discussions on the product, opportunity and future growth because I think we have a tremendous opportunity. And we've earned the right with the last quarter, and hopefully next quarter, to demonstrate that we will deliver on what we committed to, and eliminating stranded costs is nothing more easier when the business has been sold, meaning there is no more revenue to support. So we had $1.5 billion of stranded costs estimated, no revenue to support anymore. It was only a matter of time to execution or eliminations. We reduced the time by about 3 months. And we also convinced Broadcom to use and take on more to support their business, which means that they repaid some of the costs used, and that has enabled us to drive an estimated stranded cost, $1.5 billion, down to now about less than $1 billion on the run rate from time of closing the deal to the last deal being eliminated.

Got it. Got it. Excellent. And so one last question I'm going to try to sneak in. There is a remaining relationship between you guys and Broadcom, some shared R&D, some shared kind of distribution. How's that been working out so far? How's Broadcom been as a partner in terms of enabling that both sort of the security, information and if you go back and forth?

Yes. So very good. As you know, Broadcom is targeting the top of the enterprise customers. We're focusing on only on consumers. I see them as our big brother, if you want. They're sharing data. There is a perpetual license agreement to share data, our consumer endpoint and what they see. And we share data, and we share some of this engine world. You mentioned R&D is really targeting -- targeted on that view. It's working as well as you would imagine, sometimes there's some escalations. Tom, the CFO of Broadcom, myself, have a direct line discussions. We have still discussion with Art and his team. And there's a lot of engagement to resolve issues as they come up, but it's working well.

Excellent. Well, unfortunately, that takes us to the end of our allotted time slot. But thank you very much, Vincent, for joining us.

Thanks, Keith. Yes. Thank you, guys.