NZX Limited (NZX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the NZX Full Year Results Conference Call. [Operator Instructions] I would now like to hand the conference over to Mr. Mark Peterson, CEO. Please go ahead.

Thank you, operator. Good morning, everybody, and welcome to the NZX 2019 Annual Results Call. I am Mark Peterson, as the operator said, and I'm here with Graham Law, NZX' CFO; and Hamish MacDonald, NZX' Head of External Relations. Our approach today is that I'll lead off and take you through the results for the year and outline our perspective on the progress we've made in 2019. Graham will then take you through the financials in more detail. And after that, we're happy to take questions. But before we start, please note the important notice at the front of the Investor Relations pack as that statement applies. You'll recall, we reset our strategy in 2017, and we stated at the time that we would refocus the business around our core markets, we would center our efforts on clients and growth, we'd become much more efficient, and we'd remove the identified barriers to growth, and we'd drive hard on those growth opportunities. 2 years into that plan, we have delivered on the activities that we said we would, and we are now seeing the benefits of this flowing through to our financial result. Turning to Page 4 of the investor presentation where we summarize our results. Firstly, we are very pleased with the results in 2019. Our operating earnings were $31.4 million for the year, up 9.8%. Net profit after tax was $14.6 million, up 25.7% from continuing and discontinued operations. And if we compare only to continuing operations, NPAT lifted by 7.1%. It's also worth noting that our operating margin improved to 45.1%. We will pay a final fully imputed dividend of $0.031 per share, which brings the total dividend for the year to $0.061 per share, again, fully imputed. I'm now talking to Slides 5, 6, 7 and 8. And I want to turn to the proof points that we have previously laid out, and these are our key measures of our strategic delivery and business performance. You can see our growth has come from across the business, and it is building on our first half performance. Capital raised totaled $18.7 billion over the year, which is almost double 2018, with $11 billion coming in the second half. It's great to see this has come across all asset classes: equity, retail debt, wholesale debt and funds. And the revised listing rules have played a key role in unlocking a wider range of listed products. Data & Insights have had a good year with revenues up 10.4% to $12.8 million. The total traded value for the cash market down slightly on last year to just under $38 billion, $19.4 billion of that coming in the second half compared to $18.4 billion coming in the first half. Our dairy derivatives business grew the lots traded by 3.8%. This is lower than we had planned, but it was really a function of much lower physical market price volatility in the second half of the year. We're confident that the underlying users of the market are growing. Our Smartshares business grew to a total of $3.97 billion of funds under management at the end of the year, which is up 36% on the previous year. This translates to just over $1 billion of FUM coming through in the year, of which $476 million was net cash inflows. You may recall that at the half year result, net cash inflows totaled $175 million. Wealth Technologies now looks after $2.3 billion of assets on behalf of clients. But what's more important is that we have completed the rollout of our DIMS functionality and our pre- and post-trade compliance functionality this year and have also secured Hobson Wealth Partners and Saturn Advice as new clients. Alongside these, we also continue to progress with the next phase of Craigs Investment Partners, all of which we hope to have transitioned in 2020. Just highlighting some -- just highlighting further some of the color behind the proof points, new capital totaled -- new capital issued totaled $7.16 billion for the year, which was up 46% on the year before. Retail debt listings totaled $5 billion, with another $1.5 billion of wholesale debt and the balance being the 2 listings -- sorry, the listings of the 2 new equity securities. Secondary capital raised totaled $11.5 billion, which is up 147% on 2018, with $7.9 billion in equity, $1.25 billion in retail debt, $1.1 billion in wholesale debt and $1.3 billion in funds. The overall value of capital raised this year highlights 2 points that are worth noting. Firstly, the market has capacity to support significant issuances. I think that's clear. And secondly, the market is very much there to support business growth across all sectors of the New Zealand economy. And as we mentioned earlier, we saw a good mix of capital raised through 2019. It was great to see Napier Port and Cannasouth come into the market. We feel positive about the pipeline across the asset classes. However, we are particularly attuned and focused on bringing new companies to the equity market. We are talking to a number of companies exploring coming to the market. And interestingly, they are looking to utilize a range of methods of listing. These include reverse listings, direct or compliance listings and the traditional IPO mechanisms. These pathways to market were highlighted in the Capital Markets 2029 report, and we're actively addressing the recommendations that were attributed to NZX. Turning to secondary trading. You'll recall, we had to make some significant changes to align pricing and the rule set to encourage growth in liquidity and in particular on-market liquidity. Our liquidity levels are obviously impacted by market conditions, the number of listed entities, the reporting rules and the quantum of index rebalances. And if you look through these numbers to core liquidity levels, we are beginning to see signs of growth. This is coming from participants altering their business models alongside attracting new flow. [ Cheeses ] is a great example of this where under the previous NZX fee structure, their business would not be possible. They have now attracted a significant active trading customer base, which in the second half represented 11% of all total -- of total trades. On-screen activity has continued to lift to 54.3% over the year. And for the month of December in 2019, the level of on-market activity reached 61.5%. We're well progressed with our trading system upgrade. The benefit of this project is more than just a typical software upgrade. The real value to the market will be in the new trading functionality, which includes self-match prevention and a midpoint order book, which we are expecting to assist further in the growth of liquidity and particularly on-market liquidity levels. We are pleased to welcome BNP Paribas Securities Services Australia as a depository participant. And in doing so, BNP can now offer its custody clients the ability to hold stock in our depository, which enhances market efficiency. We also now have $3.5 billion of New Zealand listed equity securities in our depository, which is up 382% on 2018. We're also seeing interest from other possible depository participants. Data & Insights. It's a continuation of a growth story across terminals, mostly retail at this point and licensing. Feeding data into non-display applications continues to be a serious growth opportunity for us. Funds Management. I've mentioned the overall FUM growth for the year, but it is worth drawing your attention to the mix. Superannuation now totals $1.6 billion, up just under 25%. KiwiSaver has gone through $1 billion, which is up just under 30%. And our ETF products now total $1.3 billion, which is up 60% on last year. The underpinning -- underpinning this growth is a mix of our key wins: member number growth, new money being invested and positive market returns. We have also invested into some significant opportunities as they have been uncovered. Our superannuation opportunities with iwi groups in the 2 Pacific islands Nauru and Tonga are great examples of innovation from this business, alongside delivering 8 new iShare products in conjunction with BlackRock, which include 5 ESG funds. We made significant progress in our operational transformation, and at the same time, we are excited about the depth and experience of some new personnel that have joined the team. Moving to Wealth Technologies. We articulated to the market that our objective was to win a new client in 2019. We have won Hobson Wealth and Saturn Advice, along with progressing with the second phase of Craigs. 2020 is all about migrating these customers' business onto our platform, which once delivered will be a major step change for our Wealth Technologies business. Before handing off to Graham, just a few comments on our people and culture. Notwithstanding the pressure the team has been under to deliver on our objectives, we continue to lift our staff engagement score across the business. We now sit comfortably in the top 1/3 of all corporates and are closing in on the top 25%. The latest score makes the seventh successive survey where improvement has occurred, and participation across the business was the highest ever at 94%. I have mentioned the lift in capability and experience that the Smartshares team has received over the year. We also welcome to the team new leaders for HR, communications, marketing and some key IT leadership roles. We welcome Sarah Minhinnick to the organization next week to lead our Issuer Relationships team. I'm excited about the capability that we are building across the business. And myself and the broader leadership group continue to focus setting clear direction, having customers and growth at the front of our minds, carefully prioritizing activity, and we strive to offer our diverse group of staff the ability and environment to deliver and succeed. I'll now hand over to Graham to take us through the numbers in more detail.

Thanks, Mark. Starting on Slide 10. The table summarizes the income statement for the year ended December 2019. There are a couple of comparability points to note. Firstly, the December 2018 numbers have been fully restated for the adoption of the new accounting standard, NZ IFRS 16, on leases. The NZ IFRS 16 changes resulted in the operating lease expense, which is mainly property leases for us, being reclassified to a right-of-use asset, which is then depreciated by the depreciation expense and also a lease liability, which includes an interest unwind by the interest expense. The details of this change can be seen in the financial statements in Note 5. Secondly, the Funds Management operating model for Smartshares changed in October 2018 to align with the Smartshares -- sorry, the SuperLife operating model. Since then, fund expenses have been paid directly by the funds, and we receive fund management revenue net of fund expenses. Consequently, the income statement for the year ended December 2018 is not comparable to that ended December 2019. And on Slide 13, I show the adjustments to achieve a like-for-like comparison. This comparison shows that for continuing operations, operating revenue has increased 7.9% and operating expenses have increased 6.4%, with operating earnings being up 9.8%. A detailed management commentary by division is provided in Appendix 1 of this presentation. I'll focus on the group level for the remainder of the presentation. The nonoperating expenses include an increase in interest expense arising from the subordinated note that we issued in June 2018 and an increase in amortization arising from the November 2018 Wealth Technology core platform commencing its amortization. As a result, the continuing operations net profit after tax is up 7.1%, with the full net profit after tax being 25.7% higher than Q2 2018, including the discontinued operations. Moving to Slide 11. The graph shows both the operating earnings from continuing operations relative to the last 6 years and the operating margin, which has increased to 45.1% due to the increased profitability and the Funds Management operating model change. The waterfall on Slide 12 highlights the more significant movements in operating revenue and operating expenses relative to 2018. For operating revenue, it's increased in all areas except trading and clearing fees, which is partly as a result of last year's strategic fee decision, which had the objective of growing the market. For operating expenses, they have increased in personnel costs. This reflects, firstly, a full year period of the new roles created through 2018 to drive strategy or increase capability, for example, in cybersecurity, dairy derivatives, index fees and marketing; secondly, a new role to address last year's FMA annual Market Operator Obligations Review; thirdly, the addition of Smartshares sales resources; and finally, the addition of operational resources in the Wealth Technologies business as we prepare to migrate new clients. The marketing costs have increased as a result of the Smartshares business increasing its marketing efforts to focus a drive on obtaining cash flows and also undertaking a brand refresh, which will be launched in 2020. Additionally, the corporate marketing costs relate to the cost of the 150-year celebrations and the NZX book. These cost increases have been partially offset by a reduction in the IT costs being the realization of efficiency gains from prior year projects. Slides 13 to 15 provide some detail on the operating earnings from continuing activities. As I noted earlier, the Funds Management operating model for Smartshares changed in October 2018 to align with the SuperLife operating model. Since then, the funds expenses were paid directly by the funds, and we received the Funds Management revenue net of funds expenses. The table on the right-hand side of Slide 13 adjusts the 2018 total operating revenue and total operating expenses to provide comparability. And the analyses on Slides 14 and 15 are on a comparability basis. The high-level impacts on operating revenue are noted on Slide 14. For Issuer Relationships, the largest factors are that the annual listing fees have been positively impacted by the overall growth in market capitalization. For primary listings, there has been a high level of retail and wholesale debt listings, which are at a relatively lower fee rate. For secondary issuances, there has been a high level of equity raised, which are at a relatively higher fee rate. And then the increase in consultancy and development revenue arises from the focus on the electricity market consulting activities, which we have been adopting ever since the completion of the energy market software upgrade in 2018. For secondary markets, the biggest impact is from the trading and clearing pricing changes, which were implemented in October 2018 and, as anticipated, have improved market liquidity and attracted new participants, such as charities, that will over time deliver growth. Additionally, revenue has been impacted by both the trading value at -- the total value traded and cleared being 1% lower than in 2019 and by trading patterns in the first half of 2019 which showed large peaks across index rebalance periods and low turnover in between. This resulted in our trading fees cap being hit more often and a lower average fee under the clearing fee tiered structure. We have -- as a result, we updated our fee structure from 1 July 2019 to address these changing patterns. And as an example, increasing the trade fee cap level resulted in the uncaptured trading value reducing from 17.3% in the first half of 2019 to 7.9% in the second half of 2019. For Data & Insights, the sales execution processes have improved, driving an increase in revenue. Terminal royalty audits and backdated licensing revenue increased from $762,000 to just under $1.3 million, reflecting the increased number of audits and the focus on ensuring customers are appropriately licensed up to date. Fund Management revenue continues to grow extremely strongly on a like-for-like basis, with FUM-based revenue up 13.8%, with strong cash flows and market growth driving the FUM up to $3.97 billion. And then member-based revenue is up 6.1% driven by increased investor numbers, up 8.5%. Wealth Technologies revenues have been increased by the foundation client who migrated to the new platform in November 2018. The high-level impacts on operating expenses are noted on Slide 15. Personnel costs have increased due to a combination of wage inflation; short-term contractor resources to, for example, assist with the delivery of the increased energy consulting activity; and the movement in the average FTEs arising from the factors mentioned earlier, being the additional strategic roles created throughout 2018 having a full year period impact, the additional Smartshares sales and onboarding resources and the additional operating resources in Wealth Technologies as we prepare for the migration of new clients. Capitalization of internal development resources mainly relates to the Wealth Technologies development and our trading system upgrade. The capitalized amount has remained comparable to last year. The IT cost savings reflect the ongoing impacts of efficiency gains over the last few years. And as I mentioned earlier, marketing efforts have been focused on the Smartshares Funds Management business, which has assisted in generating additional cash flows, as well as the Smartshares undertaking a brand refresh to be launched in 2020. Additionally, the corporate marketing costs include the cost of the 150-year celebrations and the NZX book. I do note that the related sponsorship for both the 150th-year celebrations and book are recognized in other corporate income. Professional fees that are discretionary have been focused on Smartshares investments for growth, such as the SuperLife Invest unitization, which opens up the wholesale investor market sales channel, the setting up of the BlackRock iShares new ETFs and the extension of the SuperLife Pacific Series to other nations. There are, of course, the ongoing assurance program costs, such as the royalty audit costs and other costs that are proportionate to revenue, such as stock lending and borrowing. Other expenses have moved in line with inflation, and capitalized expenses related to the costs incurred in the expense categories on our internal development programs, i.e., wealth tech and the trading system upgrade. Moving to Slide 16 where the nonoperating income and expenses are summarized. The subordinated note issued in June 2018 increased interest costs. The increase in depreciation and amortization costs related to Wealth Technology platform commencing amortization in November 2018. And the amortization of lease assets has been impacted by IT equipment that is being replaced, being leased rather than owned, and a change in the subleasing arrangements for our excess Wellington office space. The 2018 impairment expense relates to Fundsource, which has now been sold, and the 2018 discontinued operations are the agri businesses' operating results less an impairment of their goodwill and intangibles. Slide 16 summarizes the capital expenditure. Within the core markets, the main project has been the trading system upgrade, which, as Mark has alluded to, will expand market functionality of the trading system. And within the growth businesses, we continue product refinement and extension of the Wealth Technologies core platform as well as preparing for the migration of new clients in 2020. 2020, we'll also see Smartshares replace the front-office system. The balance sheet is noted in Slide 18, and there are 2 key points to note. Cash includes $20 million of risk capital and approximately $3.8 million of what I call quasi-regulatory capital relating to the clearinghouse and the Fund Management businesses' working capital requirements under their licenses or objectives. These balances are not for general use. And also, there is the impact of the implementation of NZ IFRS 16 leases. And that has resulted in the recognition of a right-of-use asset, which, of course, is depreciated, and lease liabilities, which have an interest unwind. Slide 19 summarizes the 2019 cash flows. Operating activities include net interest paid, tax paid and working capital movements. Investing activities reflect capital expenditure, with the prior year including the SuperLife earnout payment of $9.97 million. And financing activities reflect dividends paid net of participation in the dividend reinvestment plan. The prior year includes the 2018 issue of the subordinated note and repayment of bank debt, which resulted in a net $12 million positive cash inflow. Moving to Slide 20. Our fully imputed final dividend is $0.031 per share, which will be paid on the 20th of March. And the dividend reinvestment plan is available for the final dividend, and the shares will be issued at a 1% discount. Slide 21 reits our 2023 aspirational targets and the key deliverables for 2020 on that journey. We specifically note that these are not financial forecasts, which leads me into Slide 22 on our earnings guidance. NZX expects 2020 operating earnings to be in the range of $30.0 million to $33.5 million. I note that this is, of course, subject to the usual market caveats that are listed in the slide and that we have widened our guidance at the lower end to reflect the current uncertainty in the global market. This concludes our presentation. Mark and I are happy to answer any questions you may now have.

[Operator Instructions] Your first question comes from Jamie Foulkes from Forsyth Barr.

Congratulations on the results. Just a few questions from me, please. The guidance you've given from Wealth Tech says you're likely to target additional new contract wins post the next 12 months. I'm just wondering if you would have a splurge in interest over the next 12 months and do manage to win some contracts prematurely, what kind of resources you have to kind of match this increase of demand and whether there'll be a lag in the time frame from onboarding them. And secondly, just on dairy derivatives, for lots traded, correct me if I'm wrong, you did miss the target of 0.45 for the year and came in 0.36. Clearly, you have confidence the space will open up with new targets of 0.45 to 0.55 for fiscal '20, and you just said you're confident that user base will be growing. So I'm just wondering, what kind of initiatives you are taking to increase speculators into the dairy derivatives market or whether you're putting it more down to just a lower volatility than normal for the year.

Thanks, Jamie. I'll take the first question first. In terms of Wealth Technologies, you were basically running sort of resources or resource levels to largely match or at least be slightly ahead of our current contracts. To the extent that we might have further interest in the business or in the opportunity that was significant, we would have to go to the market and actually hire in for that. We probably have some capacity to do sort of additional migrations for straightforward-type business. But to the extent that we actually got a more complex business, then that would actually require some increased resources. And I guess we'd note there that we would match obviously the investments and the capital -- or the capital -- or the CapEx that would go with the customer wins. Customers typically are pretty understanding of time frames. And generally speaking, the lead-in to do a piece of work before it actually requires developers to actually write codes for their specific functionality, it does take time, and it actually generally fits both parties. So hopefully, that answers the first question.

I'll maybe add a couple of extra comments. The nature of the client -- any new client win would depend -- would drive to a degree the time frame. Large clients, the amount of planning that goes in, the answer to the question is yes, any new client that's large, it will not be to 2020. That allows us to manage our migration resources over a longer time period. The only exception to that would be if the large client is coming off a similar system to a current client who's being migrated and would be prepared to buddy up with any of the new clients in a manner that allows to do -- us to do 2 projects at the same time. But the key thing for us is to manage that pipeline across a number of years when we are discussing with the clients.

And I think, Jamie, the second question, if we could move to that. Dairy derivatives, as I mentioned in my opening, hugely impacted -- in terms of lots traded, hugely impacted by the level of underlying price volatility in the physical market. And then they've just been very, very flat in the second half. But I know from our work that the team do and the relationships that they have with the underlying users of that market that the user base is growing. We know that we've got most of the big processing firms around the globe using the market, and we do know also that the underlying sort of hedge flow providers are getting more and more attracted to it. So we feel good about the use and the connection to the market. And I guess the proof point for that really is when volatility does strike, then generally speaking, we'll be up or through previous record days. And I guess that gives us the confidence to think that we're on to the right thing and that's still the opportunity that we thought it would be over the longer term.

[Operator Instructions] Your next question comes from Jack Crowley from Jarden.

The first question from me, just looking at the quite compelling both market returns and inflows you had in Funds Management and the revenue growth there, but I guess a limited extent to which that dropped through to the bottom line, even kind of backing out those costs around setting up new funds. I guess just interested in a bit of kind of guidance, if you can give it to us, on where you guys are in terms of the costs of setting up to position the wholesale FUM and kind of restructuring and rebranding and, I suppose, kind of collectively resetting that platform for future growth. Should we kind of expect cost to run a kind of double-digit percent-type growth for kind of a couple or a few years to come? Or do you think you've kind of largely done the heavy lifting that's required now?

Okay. Probably taking several different segments there. The fund costs that are now netted off against revenue, undoubtedly, when we set up a new fund or go through a new product setup, there are one-off costs. And the average FUM has increased by about 20% this year, and the revenue net of fund costs has increased by 14%. You can see inherently in there, there's an element of cost of setup that has come through. They are one-off in nature. That said, I would imagine that part of our marketing process is to constantly revise the ETF offering to offer new options to the market to try new stuff by learn fast and fail fast-type approach. There will always be a small element of new issuance costs. In the current year, the main costs have been really truly one-off in the sense that we have finished unitizing and segregating the SuperLife Invest portfolios, which, to answer part of your question, opens up the wholesale market totally because they are 9 multi-rate PIEs, which wholesale investors prefer. So that component is done and is not repeatable. The likes of setting up the Maori language, first we've ever seen, or the translation that -- getting that off is the very first product of its nature in New Zealand, has a certain one-off nature that will not need to be replicated if we go into other iwi groups, et cetera. And likewise, with the extension of the Pacific Island series and the setup of the ETFs with BlackRock, there's some cost associated with it being the first time we have done that. And therefore, they will not need to be replicated wouldn't we extend those particular funds in the future. Additionally, inside funds expenses, we are finalizing the last bit of the operating model in the first quarter. That sees a move in custodian for part of the portfolio, which provides an element of efficiency, and also an in-housing of the cash management, which is linked with the comment on updating the front-office software from a CapEx point of view in 2020. So there are some one-offs in the 2019 number and some efficiency gains to come through in 2020 with regard to the fund expenses element of revenue. With regard to the cost base, certainly, we have invested in more people focused on sales. I think we're at the level that we would want to be for that. We've invested in marketing, and we are seeing a clear link between cash flow and marketing spend. We do it in a stage-gated manner so we will take an investment approach to marketing going forward. I can't give you a specific number because it will be decisions at the time as opposed to, "Here's a checkbook, away you go," type of approach. So there could be more marketing spend certainly in the future particularly as we roll out a new brand. There has been a lot of professional costs associated with the new funds in the setup, which really has similar comments as the fund expense side of setting up a new fund. And likewise, the marketing rebrand has gone through a process to actually arrive at where the rebrand should be. So there's some elements of one-off there that we will continue to invest in this business, and there might be different one-offs in future years. But I wouldn't be necessarily jumping straight to expectation of double-digit percentage growth in the expense growth necessarily. I think it will be monitored and in a stage-gated manner to ensure there is revenue growth that corresponds to it.

Okay. Great. That's very helpful. And second one from me. Just looking at the 2020 deliverables, and I guess you've got a near $9.5 billion worth of capital raised. And just kind of also just seeing that it's based on 2017 and 2018, which were probably more subdued environment than we saw last year, I guess just interested into kind of why you've referenced back to the kind of 2 and 3 years prior and not 2019 as a base for using -- or as a base for establishing a forecast for 2020. And kind of maybe if there would be, I mean, kind of any color that you could provide on if you did see a similar year to this year in terms of, I guess, there's a reasonable amount of kind of secondary raising activity and kind of wholesale and retail debt issues. What would that kind of have on -- what impact would that have on earnings?

Certainly. If you look at the graph on Slide 5, which shows capital raised, I think this is sort of our talk really around it. But the thinking of why '17, '18 was basically that's when we set our 2023 aspirational targets. And fundamentally, the way we've been thinking is we set those targets based on a 5-year total capital raised, the solid lines and the dotted lines on that graph, the high total and the low total. At that time, I based it on the 2 previous years, and we want to keep that 2023 aspirational target and our earnings guidance consistent with the assumptions that we needed in the 5 years. I understand fully that having had a great year in 2019 may lead us to up that. But at this point, we have not for the purposes of [ stealing ] a 2020 deliverable, which gives you an indication of what we're thinking in this regard when you flow into the earnings guidance. With regard to 2020, if we raised another $18.6 billion or $7 billion above -- if we raised the same amount of capital in the same mix, it would have a significant impact on our earnings basically because this drops straight through to the bottom line. And you can pretty much tell by looking at -- back at 2017, '18 average of what our primary and secondary issuance fees were compared to the 2019, and you'll find that 2019 is up just over $1 million. So if we were to replicate -- what I'm saying is if we were to replicate 2019, we would have maybe $1 million more of revenue in that particular area.

Got it. And is there anything that you're seeing at this point in time, I guess, either throughout the profile of how kind of capital raising activity has evolved in 2019 or what you think the outlook for 2020 is that gives you pause for caution that it might not be as kind of constructive an environment this year?

Coming from me, Jack, on that. We actually -- when we look across sort of equity debt, both retail and wholesale and funds, we're actually quite positive across all of those asset classes. We're hearing -- from an equity point of view, we're hearing a number of companies looking at the market. And as I said in my notes, they're looking at different ways of coming to the market. So -- and we're a little cautious, though, because we don't want to count our chickens just yet because we all know that it could get to the final hour and things change. So that's half the reason why we sort of build assumptions into those guidance numbers, like Graham has suggested. The -- but we do feel good about what's there. The fund side, in particular, we're hearing a number of folks out there who are really considering whether listing their fund products has or makes sense to them, and those conversations are good. So we feel okay about it. We feel okay broadly across the asset classes. And I guess the thing that we're highly tuned to, as we've said earlier, also is just working really hard on those equity listings. But I'm not sure that the outlook for 2020 -- we feel good about it, but it's just hard to know exactly how it will end. That's the long and the short of it.

Got it, yes. Appreciate there's kind of some conservatism necessary in this kind of uncertain transactional-type part of the business. Okay, just a final and hopefully quite a quick one from me. What exactly is non-display usage kind of revenue in the -- there's just a reference to that in the kind of subscription and license revenue line and just kind of wondering exactly what that represents.