PagerDuty, Inc. (PD) Earnings Call Transcript & Summary

Thanks, everyone, for joining us for our next session. My name is Sterling Auty, software analyst here at JPMorgan. Very happy to have with us the management team from PagerDuty: Jennifer Tejada, CEO; Howard Wilson, CFO. Guys, thanks for joining us. I really appreciate it.

Pleasure to be here, Sterling. Thank you so much for having us.

No. You got it. Maybe just to kick us off from a very high level. How has the pandemic impact your business, both positively and negatively?

Yes. It's a great question. And for those of you who may not be familiar with PagerDuty, we're a digital operations management platform. That's really the best way to manage urgent, unpredictable and mission-critical work that's essential to keep your digital services always on. And as we all know, digital operations are now critical to meeting customer expectations, and they need to be done in a really cost-effective way. So PagerDuty leverages signals from the software environment to communicate about issues in real-time and then uses software to automate everything from diagnosis to orchestration across cross functional teams. And that means we can help customers handle incidents that can cost over $0.5 million a minute for a customer. What we saw in the pandemic was the world had to suddenly accelerate their shift to becoming digital-first or digital defaults, however you choose to think about it. And that came with a lot of challenges. They were sort of simple urgent challenges like getting everybody ready to work in a remote environment, which took a lot of hardware effort and networking and security effort on the part of our customers. And then there are also challenges like thinking about how do you deliver your business in a digital-first way? If that's not the way you had been operating in the past. For us, during the early part of the pandemic, that meant some early kind of short-term headwinds for small and medium business. And for industries like travel and hospitality or bricks-and-mortar retail. On the flip side, as the pandemic evolved, then we really saw that digital acceleration take hold and the realization that this is going to last for a long time. That became a game changer for us. And we've seen that turn into long-term tailwinds as customers have accelerated the way they are embracing the cloud, transform their DevOps environment in order to manage the digital operations to underlie all these great customer experiences. And importantly, we've seen as companies are adjusting to the new normal, more of their business or the majority of their business is coming through digital assets, and so that actually bodes very well for us long term. But it's certainly been an unusual and an unprecedented time. And we're thrilled to see reopening happen because we continue to see those tailwinds as markets reopen, given just the diversity of our customer base.

Well, it's excellent. So how's business this quarter? No, I'm just kidding. So just as a reminder to everybody...

Well done, Sterling.

So we're very -- I'm really glad that you guys were able to join us. So the management team -- PagerDuty is actually in their quiet period leading up to earnings. So a lot of the discussion will, obviously, not focus on the current quarter, but just to get a better understanding of kind of the business where you're positioned, the trends that are surrounding it. So that's the reason why I kid. But as you talked about, as we come out of the pandemic, though, we're asking all of our companies, did it create any tough compares because there were some companies that had this big surge in demand that created some tough comparison upcoming quarters. Do you have any of those tough compares caused by the pandemic?

Well, again, in the first few months of the pandemic, we saw a slowdown in directly affected industries. But by Q3, we started to see the effect of those long-term tailwinds as enterprise has started to focus their products to accelerate digital transformation. And that continued into Q4, where companies have adjusted to the new normal. So last quarter, we talked a lot about the ongoing momentum that we were seeing. I -- as I've said in the past, these tailwinds, in my view, are long-term tailwinds. And so we're frankly pretty excited about the future. Generally speaking, something, again, I've said sort of over and over again in the last few quarters. And I think PagerDuty has really established itself as the de facto platform for digital operations. More than 60 of the Fortune 100 now levered PagerDuty for their digital environment, and over 40% of the Fortune 500 are on PagerDuty. So also our shift into enterprise continues to create a lot of success for us.

The one thing -- sorry, the one thing I would add, Sterling, is that because we don't have a consumption-based metric as well. We weren't subject to some of the spikes that other companies saw when they suddenly saw unusually high demand, which was then reflected in consumption metrics. We have a very stable, predictable user-based metric for most of our products. And that means that there is that stability on a go-forward basis.

That makes sense. And just a reminder for those that are attending and watching, you can ask questions by clicking on the Ask a Question button, typing your questions, and they'll be delivered to me digitally. You talked about the shift to the enterprise, but that also brings to mind that you do have in SMB and mid-market exposure as well. How did that kind of play out, as you mentioned, some of the slowdown in the early parts of the pandemic. But as time went on, what did you see in that segment in particular?

Well, our dollar-based net retention in Q4 increased to 121%, up from 119% in Q3. And a driver of this was the strength we saw in the enterprise sector, which posted dollar-based net retention above 125%. That said, our business has been very resilient, and retention has always been a strength for PagerDuty. Our teams have really worked hard to truly partner with our customers, including SMBs as everyone sort of navigated the pandemic together. We were sort of led with empathy and focused on long-term relationships as opposed to sort of short-term business needs. And what we're seeing now is some signs, some green shoots of SMBs and other industries that were particularly impacted by the pandemic starting to pick up again. The other thing we did was launch a freemium product last summer, which has enabled our small business customers to still engage in the platform for small products or important projects. And that's also really helped us to grow our new account base on the platform as well.

That's great. So with that, how is the mix? So in other words, how much of the business is in maybe that SMB? And how much has evolved into that mid-market and enterprise?

Howard, do you want to take that one?

Yes, sure. So today, we have roughly 20% as of Q4, 20% of our revenue coming from SMB and 80% from mid-market and enterprise. The enterprise component is above 50% of our overall. So that gives you an idea of mix. And we've certainly seen an increasing trend to more of our business coming from the enterprise and the upper end of mid market.

Excellent. You talked about the freemium as a bit of a change in go-to-market, but the one event that stands out in my mind was, at the end of 2019, you brought in Dave Justice, and how has he changed kind of the go-to-market from top to bottom?

I, both, love and hate this question because I don't want Dave to get a big head. I will tell you, Dave has -- Dave is a fantastic experienced executive. He spent over 15 years at Cisco. He spent several years at Salesforce. He is really -- and yet he started his career banging phones like in SMB. So he really understands the sort of prospecting culture of our business. He's embraced our land and expand motion, which is a little unusual and that we still have a very frictionless land motion across all of our segments, but then we have sales assisted and e-commerce based expansion. And what I'm really proud of is that Dave's up leveled the entire organization. He's really deepened our leadership bench in every theater and every part of the business. He's brought a lot of rigor and discipline, which I'm ginormous fan of, I'm kind of an inefficiency geek across the sales process. And he's also driven a new level of sales enablement in lined more with our approach of becoming a value-added adviser to enterprise and mid-market, and so that's great. During the pandemic, I think Dave was able to profoundly impact the organization and really get his team well positioned as we enter the recovery. He's going to continue to assess what the business needs for both growth and scale. And as we continue to invest in very strong leadership across every level, we are hiring. We focus our teams on business value, and that's been a big shift over the last couple of years. But when you look at PagerDuty, our ROI is almost unprecedented, 800% ROI over 3 years of payback in just 2 months, a 63% reduction in incident -- meantime to resolve. So like really solid bankable, quantifiable ROI. So selling ahead of -- with value as opposed to just selling the technology. I think, has been a huge win for the business overall. But Dave still has a lot of work to do. So we're keeping him plenty busy.

Well, usually, I think about when you change out ahead of sales or you start to do something more meaningful like that, it takes 3 quarters for things to kind of settle out and ramp. Would you say that's a fair characteristic? And does that mean that you've kind of hit your full stride with all of the changes?

I will -- you'll never hear me say we've hit our full stride because we have so much potential as a business. And we're building a business that's going to last for decades. So what I will say is our culture, I think, enables us to embrace new leaders quickly and sort of leverage their impact earlier. And also because our business is somewhat different. We have this hybrid go-to-market motion. We're also -- we also have experts that -- that work in high velocity. So like our commercial teams have been performing extraordinarily well despite the challenges in SMB and enterprise. And so it's a really nice balance to have a multi-segment business with a very diverse vertical background. And I think the nature of the business also creates a lot of potential for Dave and the team.

All right. Great. I want to shift gears and talk a little bit about some of the product uptake especially of late, it seems like we're starting to see a little bit more traction with some of the advantaged feature adoption like Event Intelligence. Can you give us a sense of how much of the base has kind of moved beyond just being basic on call customers?

I'm really pleased with the traction that we've gotten with our digital ops offering, really driven by our developer-centric response and management. You'll hear a lot of companies talk about incident management, but most of them are doing things the old way include ticketing systems, which developers don't respond well to. We enable our developers to swarm virtually onto something, very quickly, knock it over by figuring out. Is it an important event? Is it -- are many events related to one another? Or is this something distinctly unique that we need to work on across teams. So by broadening our AIOps solution with a number of significant enhancements like Service Directory or visibility into change events, change drives, most incidents, frankly. And service dependencies, we also have been able to offer more bidirectional chat features and Teams and Zoom, which means employees can get the benefit of PagerDuty without context switching from the collaboration environment they're in. And the ARR from our event intelligence offering grew almost 160% over the previous year in Q4, which we're super proud of. The uptake of the digital operations SKU has also been incredibly strong with ARR doubling year-over-year in Q4 and accounting for just over 20% of total ARR at the end of last fiscal year. And finally, I'd say, we're really pleased to see the growth in customers using us for new use cases. My vision for PagerDuty since I arrived, has been to leverage PagerDuty as the platform that manages real-time work across the organization. And in Q4, we saw a 56% year-over-year growth in security users and 40% growth in customer service users. And we need sort of think about that transition, that's meaningful for us and something that we're really excited about.

So with some of these advanced features, I think investors have a tough time understanding where PagerDuty stops and some of the other solutions that are out there might start. So maybe help us understand that? And what are some of the technologies because integrations always seem to have been a strong part. So what are those kind of key integrations?

Yes. In my view, integrations are the gateway to dynamic workflow. I think we sort of undermine ourselves, what we call them integrations because that's actually products, right? And we've always approached our integration ecosystem as a really key competitive advantage or remote in a product. And when you think about it, we delivered now over 550 powerful integrations that enable our customers to connect PagerDuty to almost anything in their digital ecosystem. And that means they can consume digital signals from something, whether it's hardware or software-driven, a ticketing platform, a monitoring environment and observability platform. Or on the back end, either deploying PagerDuty into chat and collaboration, which I've talked about, back in the ticketing systems to drive longer cycle actions. And also leveraging to the security, the threat stack, et cetera. And so one way to think about our integration ecosystem is, it is the largest independent neutral integration environment out there in the market, which enables us to sort of sit as a superset across all these other environments and make sure that we can connect machine data, which is increasing at a velocity, I couldn't imagine 5 years ago, to the right people in an organization. And then what you've seen us do in the last 2 years is start to really automate more and more of the diagnosis and resolution. And so that's really exciting. When you think about some of the integrations that are super important, we built integrations to Zendesk and Salesforce, thinking there might be something to this customer service opportunity, and we're seeing this evolution of customer service operations. Kind of happen as a result of that, where a customer service agent is dealing with inbound complaints or issues from customers, but has no ability to match those to maybe a technical or digital problem that's going on in the business. Now with PagerDuty, you can without leaving your Zendesk or your Salesforce environment. And so -- and that's really important because time matters. We're talking about incidents that caused bad PR, incidents that stock revenue transactions, incidents that cause customers to leave and go to a competitive application or a competitive platform. So one of the things that's always been really important to PagerDuty is, it's the seconds that matter. The last thing I'll say about our integration ecosystem is, I think the neutrality of the way we're designed is super important because we don't have a single customer that's ever going to choose a single observability environment or a single monitoring environment or a single problem management system because you are dealing with hardware, software, automation, think about the diversity of the challenges, the real-time challenges our customers have across verticals. And so that neutrality, I think, is also really important and been a great strength for us. The last thing I would say that makes -- that's important about our integration ecosystem. It's not just the partnerships that we have with those environments, but the ease of use that it creates and the interoperability it creates for teams that manage these digital ecosystems inside their companies. You can be up and running with PagerDuty integrated to ten to hundreds of your environments and solutions within your environment in minutes. There is -- that is a huge competitive advantage for us. It makes us very different from the more traditional antiquated environments that were built around CMDBs and hardware footprints, frankly, of the past. And it's 100% cloud native, super easy to use, which also helps to kind of drive that ubiquity that we're talking about across other use cases in the business.

So you guys streamlined and made some pricing changes, not too long ago. How is that driving some of this advanced feature adoption? What kind of response did you see for those changes?

Yes. I can maybe take that, Jen. I think one of the things, we -- before we introduce those pricing changes, we did do a fairly detailed survey of our customer and prospect base. And so that led us down this path of a relatively simple lineup of plans for customers today. The feedback from customers has been overwhelmingly positive in terms of -- it's much easier for them to see how they move from our team plan to our business plan to the digital operations plan and understanding the different value for components associated with those. And I think the piece that's most striking to me is that if we look at our digital operations plan, that contains the most advanced features of our products, whether that's the ability to visualize change events, looking at service dependencies, benefiting from the full event intelligence stack that we have. And we've seen a real shift into that plan. And as Jen mentioned, as of the end of Q4, the digital operations plan, which represents most of our new product investments was more than 20% of our ARR. So we definitely have seen, in a very short period of time, the shift of customers into that plan. And this also aligns up with the fact that we are dealing more and more with large enterprises running mission-critical environments we need to have the best and latest technology to be able to manage their environment.

Excellent. And when we think about -- actually, let me take a question here from an investor. They want to know how does PagerDuty continue to differentiate in a market where you have a number of competitors as well as are there solutions from public cloud vendors are even open source that start to have an impact?

Yes. I'll take that, Sterling. It's a great question. I mean, we created this category, starting with on-call automation and then moving into Modern Incident Response where we leverage machine learning and AI, then intelligence, AIOps, Analytics and more recently, customer service and customer support. And our moat has always been driven by a few different things as there have been competitors really since day 1, and none of them have been able to make significant traction or progress because, one, we've built the most resilient, scalable platform in the marketplace, and it's proven in the largest enterprises in the world under what we saw as unprecedented traffic last year. So traffic was up on our platform significantly last year, and we actually saw our teams improve their mean time to respond in that environment. And we deliver $49 as a sort of guarantee to our customers as well, which is, again, kind of unprecedented. And that's not just for website availability, that's for throughput of events and notifications. The second thing is that integration ecosystem. There is no one that comes close to being as interoperable as we are to other things. So they'll hear people talk about offering an on-call solution or an escalation policy somewhere, et cetera, but it's not as easy to build as ours is. It doesn't work as well. There's a lot of configuration required, systems integration support because it doesn't come out of the box with all the ease of use features that we've built into the product from day 1. Third is customer trust. I mean you look at our retention rates, and there's a new competitor kind of every time you turn around. In any kind of fast-growing tech category, and our customers don't leave because we become essential infrastructure through both of our integrations, but also the fact that our customers get the benefit of 12 years of data on the platform. And that data drives our Event Intelligence capability. It drives people orchestration. So we know who their communities are and what those teams do and where critical work needs to go. We understand workflows they've worked and workflows that haven't. And there's a lot of people that think PagerDuty is just big on-call tool. I mean, imagine being in the middle of a mission-critical incident and PagerDuty is serving up recommendations of what you should do, who you should engage as a result of pattern matching, the current event you're experiencing to an older event or a previous event that has already been resolved, like how much value that can create and quickly resolving that incident, again, when time's costing you maybe $0.5 million a minute. The last thing I would say is we have continued to upgrade and innovate on the platform and drive new services and new features, and you now see that in our ability to cross-sell and upsell our customers. And nobody has been able to demonstrate the movement into enterprise. And yet, I'm excited because most of our lands are still greenfield, right? So I see strength in our win rates. But at the same time, look, I'm kind of soak because most of the time, we're still replacing a spreadsheet or like a manual process or a calling list, et cetera, and with the acquisition of Rundeck, we also have a new land motion. So we used to sort of start with on-call and then add new products. Over the last year, we've seen people start with digital ops. So they're starting with a full -- more full-featured platform. And now with Rundeck, which provides runbook automation, we can start with runbook -- Rundeck and then add a PagerDuty. And so that's created some versatility in the land motion as well.

Can you give maybe...

And I think -- sorry, I was just going to say the thing I would add to that as well is that with Rundeck, our ability to go from detection to order remediation is unparalleled. There's no -- none of our competition can even dream of doing that.

Well, and that's why I was going to follow on and just say, give an example. So when you talk about that automation, I don't think a lot of investors really understand what that means.

Yes. That's a great question. I mean, one of my favorite examples is often -- and we talked about this even 2 years ago on the road show, there are so many -- if you just -- it's just -- imagine your iPhone, let's use the human being example, right, as opposed to a complex enterprise example. In your iPhone, if you're not careful, every app on your iPhone -- and you have now probably 300, 400 apps in your iPhone, every app in your iPhone can send you alerts, right? And everybody turns more than half of those off because that's just so noisy to constantly beginning text messages from every stupid app you ever downloaded, right? And oftentimes, you're downloading app for one thing, one time, never to be seen again, but you forget to delete that app. And it's going to keep sending you alerts. That's the way monitoring works. Like think about every piece of architecture in your environment can send you an individual alert. Then you've got monitoring environments that are sitting on top of those. And they're consolidating some of that and they're sending alerts. And then you've got observability players that are sending alerts, et cetera. So there's more and more noise coming at the human beings in an organization, not less. The first thing we do is capture all of those alerts consolidate them and correlate them, the ones that matter. So as I mentioned before, we can see that 100 alerts that might go separately to 10 different teams are actually one incident that should go to 4 or 6 people. That's the first point of automation, right? Then it gets to that team and event intelligence helps us -- help that team understand the issues associated with that event. Which services are affected? Who are the owners of those services? Is this an event that has happened in the past that we have a resolution or know what it's for? And then you can take that another step further. Is there a runbook that you can run, which is basically like click a radio button and go to resolve that incident because we know it's worked before or we've leveraged it in the past. And it's right there at your fingertip. What I just described happens in a few minutes, right, as opposed -- so like when you think about that, like in a traditional organization, isn't using PagerDuty, the first step, just figuring out who's the team that's going to resolve this often takes an hour, right? Now most of our customers on the platform, their mean time to acknowledge has fallen under an hour, like well under an hour. And their mean time to resolve is getting better every year. But I would tell you that often that's limited to a couple of teams, devs tend to lead the way. The developers are very savvy they choose their SaaS tools. They trust automation to some extent, they don't like a lot of black box automation, which is why you can click into our runbooks and C-scripts and understand what's going to happen. But they're leveraging this because they don't want to do the manual work of trying to figure out how things are related. The second thing they're doing is they're really driving this revolution of this movement towards service ownership. I build it, I ship it. I own it. Instead of throwing it over the wall to a bunch of folks sitting in a network operations center, manually escalating things. So we automate what the traditional centralized network operations center did. And that frees up the devs to do the work they love to do, which is to create and build. And I think that's really important. I'm super excited about the auto remediation. Efforts that have come through Rundeck, because in our mind and what our customers tell us is that's a version of safe self-healing they've never had before connected into this incident response. And I'm also really excited about our change management capabilities. So when someone pushes a change, it's often very hard for teams across the organization to know that, that was the cause of an incident. So we capture those changes so very quickly, you can surface. That was actually a change, roll back that change, you'll get back to stable. Now make some changes and then deploy the changes that you made back into your CICD environment, so you know where you're going next. Again, all that's happening in a few minutes, not a half hour, not 2 hours or not waiting for a ticket to flow through a system. You're not waiting for a static process to work.

But I think one of the things that you mentioned previously is so important because when I hear all of that capability, especially event intelligence and even the digital DevOps portion, I would think that maybe you're forcing the user to live inside of a PagerDuty app. So how does -- because you've got customer support debt, you got all these different parts of the business. So how do they actually -- how does the end user in these very disparate areas interact with PagerDuty?

I think that's 1 of the unifying features of PagerDuty. It's that you can leverage the power of PagerDuty inside the platform you're already in, whether you're in ServiceNow or Salesforce or Zendesk or Slack or Zoom or Teams, right? You don't have to leave to get the power of PagerDuty. And we -- every event, every opportunity we have, we're announcing new features inside of chat, for incidents. So it makes those investments that you've already made in those tools, more -- higher -- increases on the returns on those investments. And it enables teams to work faster. That's where some of the speed comes from. So the old-age of like -- I have to own the customer and the -- I have to be the platform for all things. That's just not the way the world works before. And if you look at most modern companies, the number of SaaS apps for employees is going up at a very crazy rate. Because employees expect their tool change just work together, right? And so we're -- that's why our integration ecosystem and our API environment is so important because that sort of just happens. Like it's -- you don't need to call Deloitte to come in and hook everything up like you did in the old days, or like you do with older antiquated platforms. Like you can -- you're just using API keys, and it's very fast.

Awesome. Another question came in from investors. What have you learned from your experience with a relatively new freemium offering?

How much time do you have? I mean...

We've got 5.5 minutes. Go.

I'm going to let Howard take this. And I want to give Howard some credit, like Howard is sort of wizard behind a lot of our pricing, which is unusual, I think, for a CFO, but he spends a lot of time in product and product strategy. And freemium something he's been very passionate about since the very beginning because he could see the sort of unusual and kind of splendid nature of e-commerce and how that works with our customers. So Howard, why don't you take that one?

Yes, sure. So I think what's been most gratifying to us out of -- is what originally started out as a bit of an experiment, was our goal was really not just to have PagerDuty available to anyone, but to make sure we could make it available and attract companies to use us even in our free offering. So our free offering is differentiated and that you can actually do real stuff with our free offering. You can run, sort out real business problems with our pre offering. And what we've seen since we introduced free is that the number of companies using PagerDuty has increased by over 20% as of the end of Q4. So the design around free was to say we have a lot of customers that are maybe in the lower end of the market, SMB, who were originally also hit quite hard by the pandemic, how do we continue to create access for them, but how do we also get in mid-market and enterprise customers? And it's fascinating to see the number of enterprise and mid-market customers that are starting in free, right? So they're getting to no PagerDuty in that mode, and we're seeing good conversion rates as they move into being paying customers. So it's something that we continue to fine-tune and tweak, like I look at these numbers on a weekly basis to see what are the things, the levers that we have, that we can drive. But certainly, it's acting as we anticipated.

And the follow-on to that is, how does -- how do you have to -- or how did you tweak the rest of the sales go-to-market motion to incorporate it? And what kind of financial impact do you envision long-term from this endeavor?

So we looked at it across 2 vectors. First of all, whenever you introduce a free offering you worry about, is there going to be cannibalization? And what was interesting is that we've seen very little in the way of cannibalization. We had previously what I called an almost free plan when we had the start-up plan, $120 a year. So the economic value for us as a company associated with that was low, but it was creating a gating factor, right, for people to actually use our platform. So certainly, that was the one aspect that we looked at. But from the -- when I look at our lifetime value of our customers, it continues to grow every quarter, right? And so getting us -- getting them in early on the PagerDuty platform, letting them start using us with one team and then needing more advanced features. It creates a very natural progression for companies to be able to get to use PagerDuty in a way that is easy and 0 cost at the beginning.

So I want to touch upon competition before we wrap up. And specifically, Everbridge acquisition of xMatters. Where did you traditionally see xMatters in the marketplace?

We don't see xMatters as much anymore. In fact, even before I arrived at PagerDuty. PagerDuty was disrupting xMatters solution because it was on-prem, and it's highly configurable and really difficult to deploy. xMatters then made a transition to the cloud, which hasn't been terribly successful. And they've been really trying to compete as a low-cost provider. More traditionally in central IT, in NOX, et cetera, which are increasingly becoming less and less important as DevOps transformation takes over. So they kind of missed the DevOps transformation wave. And I think that's kind of what led to their exit or their acquisition to Everbridge. So we don't see that much at all.

All right. And then how about the more traditional because we continue to get the questions about the Splunk, [indiscernible], et cetera?

Yes. We've had strong win rates there, and they really haven't changed. Their growth in enterprises become super predictable with 1/3 of our enterprise customers expanding with us in Q4 for, I think, like 8 -- is it 8 consecutive quarters, Howard? And our renewal rates are above 95%. So there's always a lot of noise about competition for us. And I'm just -- my dad and my grandfather had an old saying, "Action shout, words whisper", and so we're just going to keep delivering until people believe we're here to stay.

I like that. That's a great saying. And then as all this -- your go-to-market motion has evolved, how is that balance of land versus expand changed?

Well, it hasn't changed dramatically. I think expansion has always driven a lot of our growth and very consistent expansion engine, really driven by the virality of the product. Our land motion continues to come through e-commerce and be small, and then we're patiently kind of growing customers. As we moved into enterprise, we've seen some larger lands start to evolve because salespeople like to land new logos. But the expansions continue to really drive the business, and that's a cross-sell and upsell has been super important to us. Anything you'd add there, Howard?

I think that's exactly right. And that's why we're particularly pleased with the dollar-based net retention we see in the enterprise, which is above 125%, but still seeing very healthy dollar-based net retention in the other segments, which is an indicator of that expansion motion.

All right. Fantastic. With that, Jennifer, Howard, thank you so much for joining us. We really appreciate it.

Sterling, it's really nice to see you, and we really appreciate how much effort you undertake to really understand the business. Your team really has gotten into us well over the last several years, and just appreciate the partnership. So thank you.

Thank you. I appreciate that. Have a good one.

You, too.

Thanks, Sterling.