Guidewire Software, Inc. (GWRE) Earnings Call Transcript & Summary

Hello, everyone. This is Mayank Tandon. I'm the fintech analyst at Needham. I'd like to welcome Mike Rosenbaum, CEO of Guidewire; and also Jeff Cooper, CFO. Thank you both for joining us. Appreciate it.

Hey, thanks for having us. It's great to be here.

Happy to do it.

Excellent. So we're going to do a fireside chat. I'm going to ask Mike and Jeff several questions, and then if the audience does have questions, please type them in, and I'll try to get them in before we wrap up with Mike and Jeff.

Mike, I thought a good place to start would be -- and you talked about this during your earnings call recently, the Connections conference, some of the feedback that you heard from local, I think an in-person event that was good to hear, maybe right before the whole Omicron issue. So if you could share some feedback from customers, how they're looking at cloud adoption, the interest level in Guidewire Cloud, I know it would be a good starting point for investors.

Yes, sure. Thanks. And yes, look, we did have an opportunity to squeeze that in. It was just phenomenal to get back with not just the customers, but also the partners and the overall community at Guidewire. We were in Las Vegas and had more than 1,000 people able to join. And just I would say the overall theme was just very, very positive feedback about our cloud momentum and our cloud progress, and the consistency maybe of the story and the plan and the execution and the feeling that this has clearly evolved from a thing that we plan to do to a thing that we are doing and consistently delivering release over release over release. This Connections event aligned with our Dobson release, which is our fourth cloud release and that really just was the theme of the feedback that I got from customers, with just a lot of confidence in our ability to continually deliver and improve the platform for them.

Mike, in terms of product adoption, what was the real focus among the customers and partners? Was it just broadly around cloud adoption? Or were there specific products and modules and functionality that these customers and partners are really truly focused on?

Yes. I think that it really runs the gamut. There's a pretty significant difference between the different customer sets that we sort of have, right? If you think, we have a very significant number of very mature implementations of Guidewire that are being moved to the cloud. And so that set of customers want to understand operationally how does the Guidewire Cloud platform function, is it mature enough to be able to support them at load and at scale and what other customers have gone to production with cloud implementations. But then there's net new implementations. And so they're more interested in what's the new functionality, how quickly am I going to be able to build new products on the platform with our advanced product designer? And on the claims side, it's how's our autopilot functionality working? And so there's like that area, the customer base is more focused on sort of the net new functionality that's embedded in the cloud versions of our core systems. And then there's also generally a lot of interest more and more in ecosystem partners and insurtechs that we're able to bring into the fold and integrate more effectively into a cloud implementation. So yes, I didn't even touch on the analytics. There's a lot of interest in analytics and making smarter decisions that are connected. So it really runs the gamut. It kind of depends on where the customer is in their life cycle with Guidewire.

Mike, in terms of demand, given again, the Omicron variant and some of the impact on just the economy and sentiment, have you seen any change in decision-making, any sort of pushouts since you last reported? Because at that point, I think you came off a really good quarter, especially in terms of signings on InsuranceSuite. So just curious in terms of what you're hearing from customers in terms of their propensity to move forward on cloud adoption?

We haven't seen any change. And unfortunately, you can tell from Jeff and my fuzzy backgrounds that we're very good at working from home now, along with the rest of the world. So this doesn't seem to have really had any impact at all. We've had some events and customer visits and things shift, just like everybody else has, to remote, and that's unfortunate. But we haven't seen any kind of slowdown. I think people are just taking this in stride and managing through it and working through it. There's a lot of hope that this phase of the pandemic causes us to think of it as a -- what is it, an endemic, just something that we're kind of living through and dealing with as a normal course of business. But it's just, this industry is incredible in how durable it is, how steady it is, how long-term focused it is. Like the one thing that was really a question mark in this whole thing for the industry was can we do these projects in a remote environment, can we instantiate these programs in a remote working mode, and can we continue to make progress on them. And once that was checked off, and it really has been across the board, everybody feels comfortable to building complex software systems and deploying complex software systems using Zoom or whatever environment that we need to use, that works. And ever since that was checked off, it's just been sort of steadily making progress. And so that hasn't really changed for us.

I asked this question of your chief competitor in the Tier 1, Tier 2 category yesterday as well, I'd be interested to get your thoughts. Have you seen the effect of the pandemic in some ways, pull forward demand around cloud adoption? Or is this really a case where it's been an impetus on the part of carriers to move even more aggressively and this is not going to be a tailwind for several years in terms of cloud adoption?

I think that the biggest COVID-related theme that I have heard, and I think in the long run, is beneficial to Guidewire and the rest of the companies trying to drive this modernization in the insurance industry, is digital, right? Everybody has assessed where are they on their digital road map, what's the digital experience that they're providing to agents and customers, and are they set up to be able to take advantage of the opportunity, respond to the competitive threats, respond to the new channel opportunities that exist in the overall ecosystem in the market. And so everyone has done that assessment. And to the degree that, that causes them to think that modernization makes sense, that cloud makes sense tied to that modernization. I think it's net beneficial to everybody. But it's not the sort of thing. These programs are so complicated, so big, so monumental. The decision for an insurance company that it has changed the priority list maybe, what a company is looking at. But it hasn't been something that's going to cause sort of a very quick change in terms of the demand environment for core systems. It's net beneficial and we'll point to COVID as a positive thing, but it's sort of something that's going to play out over a number of years as opposed to 1 or 2 quarters.

All right. Maybe shifting gears a little bit, and there's been some recent news around sales leadership changes. So I would love to get your thoughts around the departure of your head of sales and then, of course, last week, you hired John Mullen as a Chief Revenue Officer. Maybe some thoughts around what his role will be and sort of any other changes within the sales organization to drive that growth over time?

Well, I couldn't be more excited about John joining our company. we're -- this is just a -- we are very, very lucky to be able to recruit him. And I think that he was -- from his perspective, I can't wait for him to be able to speak to this directly, but very, very excited about the potential prospects, the future at Guidewire. This is somebody with multi-decades experience working, just specifically with Guidewire and generally with the insurance industry and generally with the financial services industry overall, some of you take a real strategic perspective to how Guidewire can change the equation strategically for our customer base. And that sort of experience that he has is really going to be net beneficial for our company. So super, super excited about it. In terms of -- I wouldn't read too much into this being a change or a pivot for Guidewire. If anything, I would say the focus, I think, that he's going to bring us incrementally and certainly, in terms of augmenting my personal experience in guiding the company, is how do we provide more of a consultative and strategic adviser role to our customer base. As it relates to how are they taking maximum advantage of the core systems, the IT investment that they've made in Guidewire, I think that sometimes companies can get too focused on sort of are we practically executing on the task at hand as in is the system live, has the system replaced the legacy system or success, okay? But then there's this more strategic question that we should be asking. And I think John is going to help us ask and answer that question is, are we taking maximum advantage of the potential that this more agile, more modern, more digital, more smarter system actually allows our customers to think about Guidewire in a different way. So that's the part of it that I'm most excited about. I can't wait for him to join in February.

It's great to hear. Given the extensive experience at Capgemini, does that maybe change your thought process around how you leverage SIs, maybe do more services internally? Or does the model not really change in terms of where you're headed on the services side?

No, I don't want anybody to read anything into that at all. Our strategy, I'm very, very comfortable with our strategy as it relates to our partners in market and the percentage of the overall implementations that Guidewire does. We've worked really, really hard over the past 2 years to ensure that with the acceleration of cloud and cloud sales and cloud implementations, that we are partnering with all of our SI partners on those cloud implementations. That's why every quarter, I'm highlighting how many cloud certified consultants we have because that is really important to the way that we're approaching this. And so John joining, obviously, he comes from that background, but it doesn't imply a shift. It doesn't imply a shift at all. He's really here to give us this sort of single owner over all of our customer-facing roles, customer success, sales and services, and we'll continue to run those in the same way that we have been, just with this different flavor, this different, more strategic consultative approach.

Got it. And then, Mike, in terms of the cloud shift One would think it's pretty obvious why carriers would want to move to the cloud. What is the resistance that you still face within your installed base as to why they would not want to make that shift? If that is the case.

Yes. The issue is not -- yes, it is 100% obvious that they should and will do this. The question is when, okay? And the equation of figuring out when is very complicated. It has to do with where we are on our maturity curve, how many references do we have that match the specific requirements that, that customer is looking for. What priorities do they have internally, externally, strategically, do they have the right team in place in order to execute something like this. It also has to do with the rest of their IT landscape. Just yesterday, I was looking at a list. We have one of our top cloud customers, and I was reviewing with the team the list of integrations that are supported by the Guidewire Cloud implementation, and we got down to 3 digits in the spreadsheet. And I was like, this is pretty amazing how complex the environment is that Guidewire is operating. And so when a customer thinks about, hey, I want to get to cloud, I want to get to the faster release cycle, I want to get to the more functionality that you guys are providing, all the benefits to my company, the question is when exactly is the right time to take on that project in conjunction with all these other variables. And so that's the kind of conversation that we are having when you -- when we talk about pipeline, when we talk about our deal velocity, it's very complicated planning cycles that these customers go through in order to make that -- the decision of the optimal time for them and hopefully sometimes for us, but mostly for them, when does it make sense for them to do this. But I keep saying this, there are 0 customers that say, this doesn't make sense. This is illogical. This is not what I want. It's the complete opposite. It's just a question of when does it make sense for them to do that.

Given that scenario, Mike, where do you think you are in terms of the cloud transition within the installed base? Clearly, you've had great success in terms of new wins, and that's showing up in the ARR metrics. But where are we in that life cycle of converting these existing customers to the cloud?

We're no longer in the first inning for sure, but we are still steadily working through that customer base. I mean I think one of the most, I don't know, important aspects of Guidewire as it relates to strategic value of the company and maybe financial value of the company, a role that we can play is our customer base and ensuring that we can successfully migrate that customer base to the cloud as seamlessly as possible and in a net -- in a way that's beneficial to us, but also very importantly, beneficial to them and also helps create this cloud ecosystem for the whole industry. We're still in the early days of that transition. We've been very, very successful with cloud, but there's a lot of opportunity that remains in front of us. And I just keep -- maybe a story thinking back to my answer on Connections, I keep every day, every cycle, every quarter, becoming more and more confident and more and more positive that we are headed in the right direction, we are making the progress that we need in order to move every single one of those customers over to Guidewire Cloud. And I'm conscious of this. I'm trying -- so I talk to people all the time about, hey, can you make that happen faster? Not necessarily. We kind of want that to happen at the exact optimal pace, right, that makes sense for customers and makes sense for us, ensures that every single one of these programs is successful, in a very -- like I keep saying, they're very complicated and we need to make the right investments in order to ensure that they're all successful. We preserve and transition that customer base smoothly. So making very, very positive progress and we'll continue to do that. One of the statistics we talked about at Connections was when you look at InsuranceNow and InsuranceSuite and just by count, we're now at 25% of the customer base by count on the cloud journey with us it's a phenomenal milestone. But my next line is we're not going to wait -- we're not going rest until it's 100%, but we're making good steady progress.

And just quickly to add to that metric. I mean, what we talked about at Analyst Day is while we're at around 25% of the overall customer base, we're at 40% of the overall ARR is now coming from our cloud products before the Analyst Day. And our expectation is, as we move through this year, we'll get to that around 50% threshold, where cloud is driving half the -- more than half of our ARR.

Right. And then this is both applicable to your existing customers and new wins. Are you finding these customers buying the entire core now from Guidewire? Or is it still a case where they might do Guidewire Policy, but then go with, say, Duck Creek claims or Insurity. Just curious on what the thought process is within the customer base around the entire core with one provider?

Yes. So I would say that very often, we'll see customers making these decisions independently. But we are also very often seeing customers make these -- make that decision sort of holistically. And we've certainly seen circumstances in deals where there was sort of one component of the core system in play and the conversation around Guidewire Cloud and the full suite was net beneficial to us, where the decision turned into a full suite decision, a full suite migration to the cloud. That value proposition of one platform, one vendor, one common approach to integration, data, analytics, customization is net beneficial to Guidewire and sort of resonates with a significant percentage of the market. But it's not universal. And so there are customers that are sort of looking at these things independently and making those decisions independently. And we're open. So we'll work in a variety of different environments that's just necessary for -- it's a necessary requirement for the Suite side of our business. And so you do see a mix. But real -- I would go back to sort of positive signal in a couple of circumstances, especially with big carriers, where the suite approach in that cloud transformation was beneficial to us.

Mike and Jeff, what has been the uptake of additional products within these cloud customers in terms of where they are versus where your customers were when they were a term license customer? If you know what I mean? Are they buying more products today when they're on the cloud, like where a cloud versus when they were a term license customer? Any metrics you can share around that? More like land and expand, is there more of that playing out in a cloud deployment versus in a license deployment?

A couple of things we've commented on, and then you can fill in here. But is what is the likelihood, and we just talked about it a bit in terms of in the cloud context are insurers more likely to buy the full suite than buying in a modular fashion. And I think the jury is still out on that. Some of the early data we saw was clearly more skewed towards full suite. But also, I think some of the early cloud activity has been a bit more on the lower end of the market or kind of Tier 3 segment of the market, which I think is more inclined to buy full suite in general. So as we start to see Tier 1 activity, it will be interesting to see how that plays out. We used to talk a lot about the attach rates of our digital and data products. In the cloud context, a lot of that is being much more natively bundled into how we think about selling cloud. So we've moved a little bit away from talking about those attach rates. But we are seeing healthy usage of both our data components and digital components in the cloud context.

Yes. I -- my only, I guess, comment here is we're very much in the land phase of the Guidewire Cloud product and company transformation, and the expand phase is we are setting ourselves up for that. But I don't -- I'm not too focused on the expand phase right now. So I'm very interested in landing as many of these cloud customers as possible. And I think when I think about Guidewire strategically, that's the real -- that's the most important thing is getting that critical mass of cloud customers instantiated, all in a common system, all of the common framework, all with common access to marketplace of insurtech add-ons, whether it's data analytics or more efficiency and convenience related functionality from our ecosystem. That's where we are right now. And I think we're setting ourselves up for expand opportunities down the line, but it's much more focused on the land part of this right now.

And that might be a good segue to Dobson, I know it's early days, but if you can talk about the strategy around that? Like how is that going to eventually play out in your mind? And then also in the context of the recent acquisition of HazardHub, how does that sort of fit in with the sort of expansion phase within the customer base?

Okay, sure. Look, again, Dobson is just the fourth release in a consistent cycle and the most important thing, I kind of said this in my -- I guess, the professional keynote that I gave at Connections, it's not so much the little individual features or the big individual features that are embedded in each release. It's the consistent delivery every 6 months of a product release. Can't underestimate how transformational it is for our company and for our customers that we switched the whole cadence of the engineering product development organization from every couple of years to every 6 months, and in some cases, even more continually just updating the service constantly, okay? Things that I'm particularly excited about, Advanced Product Designer, completely have reinvented the way that you instantiate an insurance product on the platform. We launched the capability for us to build and deploy and share across the customer base, these product definitions so that you can go to the marketplace and you can get a product definition directly from the marketplace and instantiate it in your instance to Guidewire and you're up and running. And customers have been blown away with how fast they can launch new lines of business on the cloud instance of PolicyCenter. So that was really exciting. We also announced a significant milestone for our integration framework, a new approach to defining the events that trigger API calls and receiving the API calls back from wherever you're trying to take Guidewire to and just making that easier and more fluid, such that the work necessary to do an integration to an external source is just much more -- much reduced, and that's very, very positive. The other side of it is, each release, we expect to announce, what we call a solution. Think of it as a packaged offering that enables you to launch a new line of business on top of InsuranceSuite faster than you could before. So a release ago, we launched something for usage-based insurance, so that you can get up and running on usage-based insurance with Guidewire quickly. In this time, we launched a support for what's called Micro-BOP or business owner policy. So small business support on the system to launch that new line of business. And that's kind of aligned to what we see from the market is like there's a lot of -- there's a recognition that there's a business opportunity for BOP, business owner policy, small business support. So we want to make it easier and faster for carriers to get up and running with those things quickly. And so Dobson sort of brought both of those things. And like I said, what I'm excited about is just the consistent evolution of the product and getting customers to that latest release, will just allow them to tap into that innovation we're delivering more effectively.

Shifting gears to international. One thing we hear from other software players in this market and from the SIs, is that Europe, in particular, and just the rest of the world doesn't seem to be that ready to move to the cloud, at least as aggressively as customers in North America. When do you agree with that assessment? And if that is the case, how do you attack the international market over time?

Well, I think it's less that there's a resistance and more that it's just maybe a year or 2 years behind where the U.S. was -- where the U.S. market was. The conversations with international customers, European customers, it has -- the anxiety there is not about cloud, right? The same logic applies. They understand the logic, they understand the efficiency. They understand the SaaS model is a better model. And it's just a question of where are they on the maturity curve and ready to execute on that program. But we've got a lot of success in Europe. We've had a lot of success in Australia and New Zealand with cloud programs. And I fully expect that as those projects and programs are live and in production and the maturity of this has proven out that you're going to see the same pattern that we saw in the U.S., where the demand curve starts to accelerate. There's nothing about the mindset or the regulatory environment or anything that causes me to be worried that there's something fundamentally different. It's just that where are they on that time line.

Mike, on that note, would you need to rely more on your SI partners to scale internationally, especially in Europe? And then how important is local knowledge and local regulation, understanding key to scaling internationally? So does that make M&A even more important for you over time?

I agree with everything you said. I'm not sure that M&A is necessary. Local knowledge, local content, as we call it, the ability to support the specific integration requirements associated with specific lines of business in each geography, is critical. And we've made a big investment there. We have a team that focuses on this, whether it's Germany or Italy or Australia, like that is focused on the specific regional country level requirements for specific lines of business. We have to be able to support that to win that business. I think in general, one way to think about Guidewire is that we are taking a product-centric approach to serving the property casualty insurance industry, okay? We are not taking a services approach. We are not just doing an implementation to suit whatever business requirements that particular company has at that particular time. We're taking a product-centric approach. And the real benefit of that to each of our customers is going to play out over years, right? But if you think about the choices that an individual company has, hey, am I going to go with that services specific point-in-time solution or are you going to go with Guidewire that is a different -- slightly different approach and relies probably on some local expertise in terms of the system implementation that's going to be done around making Guidewire work. But then, over time till forever, is constantly evolving and improving and evolving and improving and enabling me to differentiate myself, launch new lines of business faster, augment my claims processes and become more efficient over time, be smarter with the analytics approaches that I'm taking. The difference there is, I think, stark and will be seen as we go forward. So that's our approach internationally. I don't think M&A is necessary to win and successfully execute. But there is this necessity to invest in the specific regional functionality necessary to win these deals and make sure these customers are successful.

Turning to topic -- competition rather. I was going to ask you, when it comes down to a Tier 1, Tier 2 here in North America, is it really a battle between Guidewire and Duck Creek? And then when you go down market, are you competing with the likes of Sapiens, Majesco, Insurity? Any ones I'm missing? And then, I guess, tied to that question is, are customers still apt to building it from the ground up with their SI partners? Or is that sort of off the table now in a cloud deployment world? Sorry, a lot of different thoughts in there, but wanted to get your takeaways on just competition in general.

Yes. We're definitely not the only company in the market. You guys are probably well aware of the competition. I look at things as there better be competition in a software market, otherwise, it's not a real market, okay? I really like our chances. I like our strategy. I like the position that we're in. I think that we are particularly suited to the top-tier customers and companies in the world, with our platform. And with the -- I call it the sort of no compromise approach to a cloud-based system, anything that they need to do in order to win, in order to compete successfully and serve their customers effectively, Guidewire is going to support them. And the culture of the company is tuned to that sort of no compromise focus on success. But we're not the only vendor out there competing. Certainly, there's much more competition in the sort of Tier 5, Tier 4, Tier 3 segments to the market, because I think it is just a bit easier to build a solution that fits the needs of that customer base. But we fiercely compete in that segment of the market as well and have been very, very happy with the momentum of our InsuranceNow product over the past couple of years and had some real notable wins and real notable successes. And I think as we see the synergy between the InsuranceSuite part of our business and the InsuranceNow part of our business, leveraging analytics and leveraging the Guidewire Cloud platform, I feel really great about our ability to compete across the board.

The only thing I would add to your final question, Mayank, is on around the services led, building out bespoke systems. We don't really see that in North America at all. I think the big pockets of Continental Europe, where you still see that sort of activity and some of the extend regions in Asia where you still see that. I think then that's kind of what Mike is getting to is those parts of the market maybe a couple of years behind because our view is that the trends are going towards packaged software solutions versus trying to build out to support and maintain a custom bespoke system.

I'll tell you what, I apologize I mentally missed that segment of your question. I don't think that's going to succeed in the long run. I just don't see any way. You could make an argument that if you take a packaged software approach or you build your own equitable, we could argue which one's better. But there's nobody's going to be able to build your own and keep up with a SaaS platform like Guidewire, right, that's constantly evolving and improving and evolving and improving and upgraded and upgraded and upgraded. I mean the difference in what you're going to be able to achieve with custom build versus relying on a vendor like Guidewire to evolve this thing for the next 20 years alongside you, it's impossible to keep up. And so the -- I think that is at play in the way -- when I hear people talk to me about, hey, here's why we really chose you guys is because you're the partner for the next 20 years, and we know that it's going to keep -- we're going to be able to continue to innovate and outpace our competition because we're relying on the innovation you're delivering to us in the core and not having to focus on that. I just think the cloud clearly distinguishes this distinction -- or distinguishes this, it's an interesting way to say it, it differentiates this distinction pretty dramatically.

That makes a ton of sense. I know we only have a few minutes left. So maybe I'll turn to the question we do often get from investors, and I'm sure you do as well. Jeff, in terms of margins, that seems to be the -- I think the main issue for the stock. I think people understand the model transition. Can you just walk us through what are the investments that you have to make in these cloud deployments? And just in general, that is maybe putting a damper on the margins in the short term? And then what is the road map to get to those targets that you laid out at the Analyst Day recently?

So my Zoom froze for a second. So I missed the first half of your question. I certainly caught the second half of your question. So we have been...

I was just saying the issue for the stock seems to be more margin related. What are the investments that are putting a damper on margins and then the road map to get to your targets over time?

Yes. So we've made very significant investments in building out our cloud operations function in order to support both our current and future cloud customers. This was a measured decision to invest aggressively to build that team out and then leverage that team over time. We feel very confident in how we've attacked that and that we're going to start to see significant leverage on those headcount investments as our Guidewire Cloud platform is much more cloud native and can be managed in a much more efficient fashion. So we're starting to see the benefits of Guidewire Cloud Platform, the new releases we do every 6 months and the scalability of how we operate the system, so that's really positive. And that is aligned with kind of how we laid out the vision for the long-term model and kind of how we expect to get to our target margins. And so you're going to see a shift, and we've kind of laid this out a bit in the Analyst Day, that a lot of our COGS that support cloud customers in the early days are headcount driven. But over time, that headcount attach is going to decline. Now there's always going to be the cloud infrastructure costs as customers start hitting the platform and using the platform in a material way. We did have a little bit of a surprise in Q1, we hit a point in time where we looked at our AWS bill and realized that we needed to build in some more controls and other activities to ensure that we're being efficient with our overall AWS spend. So we are seeing a bit more cloud infrastructure expense this year. But as the team has tackled that problem, and we have a tiger team working on it, and I'm feeling increasingly confident that we can get to the same run rate that I was originally modeling in our long-term plan. And so it shouldn't have any sort of long-term impacts in terms of how we think about achieving the margin targets that we set out at our Analyst Day.

Jeff, the only benchmark I have, an investor had maybe is, Duck Creek on subscription margins. So one would think that eventually Guidewire's subscription margin should be similar or well within the range of where Duck Creek is, is that fair? And that just a question of scale and getting to that point when you're...

Yes. I mean I'm a little bit less familiar with what their margins are currently. But in terms of what we've outlined, getting above 70% gross margin is how we think about it. I mean, there -- the investments that we have been making has -- and our strategy has been one that is -- we want -- we have this no customer left behind mentality, and a lot of our customers have invested very significantly in their on-prem implementations of Guidewire. And so -- that -- those are challenging projects and then taking over what they've done on-prem, making sure that will migrate smoothly to our cloud and that the capabilities that exist on-prem will be there for them in the cloud context is a big part of the initial investment. If you look at kind of a greenfield customer who's coming online, 100% SaaS right from the get-go, they can -- we can usually get those customers up and running much quicker and at a higher margin from day 1. The other thing that's going on is that some of the accounting dynamics when we have a migration customer. They end up needing to use the term license software for a period of time. And so we end up allocating part of the total contract value to term license revenue and away from -- we're still investing in them as a full cloud customer, even though we're not getting the full revenue contribution. So that also has an impact on some of the margin dynamics for migration customers. So there's a variety of things. But as we think about kind of reaching those longer-term targets that we've outlined, that are consistent with other SaaS vendors, we still feel very good about our ability to get to those levels.

This is great. I think we're getting close to our time, but I really appreciate Mike and Jeff for sharing the Guidewire story and answering my questions. Thank you for attending the conference once again.

No, thanks for having us. Happy to do it.

Yes. Thanks a lot. Really appreciate it.

Thanks.