Thank you, Kai. Good morning, ladies and gentlemen. Thank you for joining TeamViewer's earnings call for the third quarter of 2019. With a quick look on the legal notices, I would immediately like to start and hand over to our CEO, Oliver Steil.
Thank you very much. Good morning, everybody. Welcome to our first quarterly remarks after our IPO just recently, end of September. I'm Oliver Steil, CEO of TeamViewer, together with Stefan here, CFO.
Good morning.
Good morning. We'd like to guide you through our earnings, clearly focusing on Q3 and the first nine months. Before I do that, maybe a quick recap on our business model, some highlights. I've just discussed those with many of you, but again, important to see. We focus on delivering connectivity across devices and across the whole enterprise. We have been able to build a network of 340 million active devices by now. That's clearly important for future monetization. We're growing strongly, internally and also from a market perspective. We have a total addressable market of EUR 10 billion last year. This is growing at 24%. This is very important. We've moved the business now to a full subscription model. It's 100% Software as a Service.
We do have low churn, good upsell, which leads to a net retention rate of above 100%, which is, of course, important for future growth. We have reached global scale. We have paying customers in 180 countries, more than 800 employees in 15 offices around the world. All of that supports what we believe a pretty unique economic model. We do have 430,000 paying subscriptions now. We generate gross margins of above 90%. We have a very efficient go-to-market model due to free user monetization that gets us to CLTV to CAC ratio of above 30. All of that then translates ultimately into a very high cash conversion of above 90% and consistent EBITDA margin of above 50%. Stefan is going to go into detail.
If we combine the strong growth that we see at the moment together with the profitability, we believe this is a pretty unique business model that we have in the software space. On that backdrop, let me go to the next page number four, business update. Clearly IPO not long ago. Q3 now in the books, and we're very happy to report that we're on a very good track towards our annual guidance. Q3 has shown a 63% year-over-year billings growth. As you remember, billings is an important KPI for us, so 63% growth. We have continuously a net retention rate above 100%. It's again 103%, which is very important for visibility for future growth. More than 430,000 subscriptions by the end of the third quarter, so very nice customer development.
What is important for us is that we go into the enterprise segment, so we're really trying to address larger customers. We started that one year ago with our Tensor product, and we see that this launch has been very successful. The number of customers that are spending more than EUR 10,000 per year with us has grown by 60% year-over-year, with a net increase of 72 customers compared to the previous quarter. A very good, successful launch of the enterprise segment. The other growth dimension, geographic expansion, we are happy to report that we grow very nicely across all regions, 41% growth in EMEA for the first nine months in our most mature markets. That's very remarkable. We see a continued penetration of the Americas. There we have 60% growth for the first nine months year-over-year, also successful.
We continue to invest in sales force expansion, particularly in APAC in the enterprise segment. Third growth dimension are the use cases. We want to convince customers to use our product across enterprises for more and more use cases. Important in that context is that we introduced the second version of our augmented reality, virtual reality enabled product Pilot 2.0. We also committed to continue to invest into R&D very significantly into the new product roadmap. In order to facilitate that, we have set up a new office in Greece, which would allow us to ramp our R&D headcounts even faster going forward. We've continued to have a very strong financial model. Everything which I discussed before continues to be the case. We've increased our margin by 10 percentage points versus Q3 2018.
We have a three percentage point margin increase versus the first nine months in 2018. Relatively stable cost base on absolute level that will allow for further scale effects, and we have a free cash flow conversion of more than 92%. All in all, a very consistent development in the third quarter compared to the quarters that we have been reporting on before and on the clear track towards our guidance. If we deep dive a little bit into the enterprise segment, go to the next page.
Just to give you some color around this segment, what's happening there, as mentioned before, we grow strongly with our enterprise clients, which is evidenced by the number of customers with ACVs of more than 10K, which increased from 369 in third quarter 2018 to 590 in the third quarter 2019. Just to give you a few deals, top 3 deals in the third quarter. One is the renewal customer that is with us for a longer while. It's a pharmaceutical company, EUR 250,000 renewal. They use TeamViewer for their global internal IT support, so really a global footprint. We had a significant upsell with one of the customers in the automotive sector, more than EUR 100,000. They use TeamViewer now in multiple ways.
It started with using it for IT support, like in many cases. They now expanded the use of TeamViewer to remotely connect to the production line and to remotely connect to large construction machinery. It is clearly an IoT use case. Last but not least, a new deal with a technology customer, EUR 79,000 in the Americas, who uses TeamViewer for internal IT support, external customer support, and to connect to product lab machinery that they sold with service contracts. Very nice examples of growth in the enterprise. Clearly continues to be a focus area, but we do see good traction there already now. Going to the next page. Just a few performance indicators, billings, cash, EBITDA. As you know, we'd like to report and guide you on these two important metrics because this is also how we run our business operationally day to day.
Stefan will also give you revenues and EBITDA and IFRS numbers. From my perspective, very important to note, Q3, 63% growth year-over-year. First nine months, 45% year-over-year growth on the billing side. Remarkable performance. Cash EBITDA, very nice translation into Cash EBITDA growth from EUR 24 million to EUR 46 million, which is a 95% growth in the quarter. For the first nine months, also 54% growth from EUR 78 million to EUR 120 million. Clearly underlining the scalability of our business model that we have achieved. With this, I will now hand over to Stefan, who will run you through the details of the financials.
Thank you. Good morning, everyone, and especially warm welcome to those dialing in for the U.S. Let me run you through the Q3 financials. Clearly, as you can see from the numbers, our billings growth has nicely accelerated, also in line with what we announced in the prospectus when we saw most of you again, or the last time, mid of September. Our year-to-date billings numbers now amount to EUR 224 million, which represent the 45 percentage point increase versus the nine months in 2018. Q3 billings was very strong with a 60% growth quarter-over-quarter. Let me give you some details regarding the strong growth here and the key drivers behind it. As Oliver mentioned, we saw a continued strong renewal dynamics with a net retention rate of 103%.
That means our gross churn continues to be more than compensated by cross and upsell, clearly underlining the stickiness of our customer base, driven by our strong product portfolio and attractive pricing levels. We clearly saw a very strong subscriber growth in Q3. We have now more than 430,000 subscribers at the end of September, this basically combined the new subscriber growth, combined with the strong net retention rates are the key drivers behind this very strong Q3 performance. Let's take a look at the next slide number nine, the regional breakdown. Actually, very nicely balanced picture. Very strong growth across all regions. Actually, America is continuing to grow at the fastest pace, 60% year-to-date and 75% in Q3.
Primarily a result of early investment in 2018 into significantly larger sales and marketing operations in the Americas, and also very nice and strong execution by the local team. Also EMEA, very strong growth here across all major territories, including the larger home markets like Germany, Austria, Switzerland, also U.K. and Southern Europe. All of those countries performed pretty nicely. We also continue to add sales resources in EMEA with an increased global footprint now mainly for the enterprise and general business across a variety of larger territories in Europe. APAC billings growth is mainly driven by the increased penetration of the local markets. We talked quite extensively during the roadshow about our expanded footprint with new offices in China, Japan and India. I think we are particularly pleased with a few early strategic wins in the enterprise space, both in Japan and China.
That clearly confirms the long-term market potential in those markets. Clearly we are still in a ramp-up phase there in the APAC region. Maybe our next slide. Cash EBITDA development year to date in Q3. The strong billings growth coupled with the scale effects in our very efficient go-to-market model then also led to a very strong growth in cash EBITDA, which is now up to EUR 120 million compared to EUR 78 million we had in 2018, representing an increase of 54%. This is basically due to a couple of factors. Our GP margins improved significantly by more than two percentage points to now 92%. This is driven by scale effects within our customer support and infrastructure team, and also supported by accounting changes, the implementation of IFRS 16, which leads to capitalization of previous operating expenses.
As you can see from our P&L, we continue to invest in all key growth initiatives. We significantly expanded our sales force and marketing resources. You can see sales and marketing spend in absolute terms substantially increased in those regions. We also added much more R&D resources to accelerate the use case expansion through our product offerings, especially around IoT. Within G&A, I think we've been quite clear that we continue to invest into our infrastructure and also ramped up some investments now needed as a public listed entity. Despite all of those significant investments, our total SG&A is now at 39% of billings, slightly less compared to the 40% in the comparable period.
If you combine this with the GP margin improvement, this leads in this nice increase in our overall cash EBITDA and cash EBITDA margins, which are now at 53% versus 50% in the prior year. Moving on to cash flow and leverage. Very strong cash flows. Clearly, our asset-light business model helps us here and with highly scalable platform, most of our cash EBITDA converts very nicely into cash flow, pre-tax free cash flow, which we define as cash EBITDA minus the changes in net working capital minus CapEx. This pre-tax cash flow amounted to EUR 47.8 million in Q3 and nearly EUR 110 million for year to date for the three quarters, and both of those metrics imply a cash conversion of more than 90% and very much in line with our guidance.
CapEx was slightly above EUR 8 million year to date. Therefore, we confirmed the full year guidance of EUR 10 million-EUR 50 million, most likely towards the upper end of that range. 2020 CapEx is expected to remain at those levels due to a pending headquarter move. Afterward, after 2020, CapEx should be in the mid to high single-digit EUR million amount per year. Leverage, as mentioned during the IPO on the roadshow, we expect to significantly deleverage over time. That's exactly what happened. Our net leverage is now down to 3.7 times as at the end of September 2019. Financial debt, gross debt is EUR 621 million, which includes EUR 8 million of operating lease obligations. As you know, together with the IPO, we also refinanced the existing debt facilities, which significantly reduced the weighted interest, which is now down to 4.2%.
Therefore, significantly decreasing the interest charge going forward. We continue to pursue our deleveraging target to be around 3.0 times or 3.1 times at the end of 2019, and then less than 2 times leverage by end of 2020. A few technical accounting topics. Deferred revenues amounted to IFRS revenues amounted to EUR 283 million. Why is that? We continue to see perpetual deferred revenue being rolled off the balance sheet after the transition to subscription has been completed. As you know, this trend will continue for quite some time, while at the same time the deferred revenues from subscription continue to increase in our balance sheet. All of this means that our revenues in 2019 continue to be significantly higher than billings, and our guidance for full year revenues is EUR 386 million-EUR 391 million in IFRS revenues for 2019.
For 2020, we expect this accounting gap to close and revenues to be on a pretty similar level as billings. Afterwards, billings will then, as for all other subscription companies, exceed revenues in the medium term, and revenues would roughly then be 90% of billings going forward. On page 14, I'd like to cover a few specific accounting topics on top of the deferred revenue. First, the IFRS 2 charge share-based compensation of EUR 26 million in Q3. This relates to the incentive structure, which was put in place by the selling shareholder Permira for about 80 employees. I think it's very important to understand that this incentive structure is fully financed and paid for by the selling shareholder, and therefore results in no cash outflow and also has no dilution impact on EPS.
Our share count is 200 million, and that's the diluted share count as well as the nominal share count. No dilution impact for new shareholders. Second, as we announced together with the IPO, we had some IPO-related charges, primarily consisting of an IPO bonus payment, which was paid out in October to all employees, tenure-based, to all employees which are not part of another incentive scheme. This amounted to roughly EUR 7 million, and then roughly EUR 1 million of other IPO-related costs. Both positions are one-off positions and have cash impact, but are backed out when we calculate our cash EBITDA numbers for the quarter. The remaining one-offs are primarily related to external consulting costs for GDPR and compliance implementation, as well as some non-recurring internal reorganization and refinancing-related costs.
All of those charges amounting to a total of EUR 38 million are actually more than offset by the recognition of a deferred tax asset of EUR 59 million, which relates to tax losses carried forward, which we have now capitalized on our balance sheet. Wrapping this up and taking a look at our guidance. Clearly with those Q3 numbers now in the bank, we feel very comfortable about our full year guidance. As you can see on slide.
Which number is it?
15. On the left-hand side, you can see that the fourth quarter is typically our strongest quarter. We typically generate more than 30% of billings in the last quarter. Just to remind ourselves, in Q4 2018, we had already completed our transition to a subscription business. Nearly all of those EUR 75 million in billings in Q4 2018 are now subject to renewal. If you take a look at the right-hand side of that chart, at the 2019 billings breakdown, we feel pretty comfortable with our full year guidance, which basically requires us to achieve EUR 85 million-EUR 95 million in Q4 billings. If you combine our strong historic net retention rate above 100% and expected new billings, we are actually targeting the upper end of the billings guidance.
At the same time, we continue to invest into the growth of our ecosystem, and actually want to boost virality with our new product releases, and therefore increasing the monetization potential for the future. Given the significantly higher contribution from renewable billings in Q4 compared to other quarters, year-over-year growth on a relative level will of course be lower than the very strong growth in Q3. Turning to cash EBITDA guidance on page 16. Clearly with this strong billings contribution in Q4, we always expect Q4 cash EBITDA to be the strongest contributor, pretty much in line with prior years. We clearly continue to invest in our future growth potential through additional investments into sales and marketing, and therefore we are targeting the mid-range of our cash EBITDA guidance.
Bottom line on page 17, we fully confirm the 2019 guidance on billings and targeting the upper end of the billings guidance, confirming the revenue guidance and confirming the cash EBITDA level guidance for 2019. I think with that, we would open it up for Q&A.
Dear ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial zero one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. The first question received is from Mohammed Moawalla from Goldman Sachs. Your line is now open, sir. Please go ahead.
Great. Thank you very much, and congratulations on your amazing set of results as a public company. I had two, if I may. Coming back to your guidance for the full year. Thanks for some of the clarity around the seasonality, curious to get from your sense, given the contribution as a percentage of full year seems to be in the low 30s, is I think what your kind of guidance implies. What is the sort of the puts and takes, in terms of the upside case? Is it simply higher sort of new customers, or are you trying to kind of veer to the kind of conservative in that guidance? Secondly, on spending, you talked about sort of higher sales and marketing spending. Can you perhaps, break that down a bit more?
Are you looking to hire more salespeople given some of the success you're seeing in enterprise, or is it more variable spending in things like marketing? If that would be very helpful. Thank you.
Okay. Maybe I start with the second one, the spending, and then Stefan does the guidance piece. On this one, the most extent it's people. It's really investing into enterprise salespeople and inside salespeople pulling recruitment forward, where possible and accelerate. On the discretionary marketing spend, we are very much in line with expectations.
Yeah. Then maybe on Q4 guidance, clearly Q4 has always been the strongest quarter where we see a significant chunk of subscribers renew their contracts. During Q4, we also historically released new products same time this year around, frankly, with Pilot 2.0, and we usually want those products to gain as much virality and use cases or user adoption as possible. That also means that we are running less free to pay campaigns during the fourth quarter, all of this leads to the growth, as you mentioned, in the low thirties in Q4.
Sorry, can I come back, Oliver, on your question? Should we think about going forward kind of incremental revenue upside, you would opportunistically look to kind of invest that away, to sort of expand capacity? Is that as a reasonable assumption?
Yes, I think that's what we always communicated, that when we see an opportunity where we have to have productive salespeople on the ground, in whatever go-to-market, then we will put money to work and hire those people. As always said, we are also cautious in these things, and want to see the productivity first before we scale.
Great. Thank you very much.
The next question received is from Adam Wood from Morgan Stanley. Your line is now open, sir. Please go ahead.
Hi. Good morning, Oliver. Good morning, Stefan, and congratulations from me as well on the IPO and a great set of first results. Maybe just coming, first of all, maybe to clarify on Mo's question around the guidance. I understand completely that with there are a number of renewals, the absolute growth rate in Q4 has to be lower. If we look at the new subscription additions, it looked as if you added around 30, a little bit less than 30 of addition to subscription in Q3. Even if I take the top end of the guidance for Q4, it implies that there's only around 19 or 20 being added into Q4.
Is that conservatism that you want to remain cautious around the amount of new subs that you add, given those free to pay campaigns are gonna be a little bit slower in Q4? Is there any change that we should be aware of in the business that's making you more cautious versus what you saw in the third quarter? That's the first one. Then just secondly, again, on my calculations, if you look at costs for Q4 in the guidance, if I take the midpoint of cash EBITDA and the top end of your billings, it would assume that the billings minus cash EBITDA costs are relatively flat Q4 over Q3. Is that the right way to think about it? Again, can you just clarify around the pace of investment and then how you're hiring on those two things? Thank you.
Yeah, thank you. On the first question on the guidance, it's exactly right the way you describe it. I think as we said also when we had the pre-discussions, we are managing two things here. We're managing our billings performance, and we're managing our ecosystem growth, as we very well understand that a growing ecosystem of free users allows for future monetization. This is always a trade-off that we're managing. Given where we are this time around, given the very strong growth in Q3, I think for the fourth quarter, we have a view on the mix of new additions, free to paid monetization conversions, and the general renewal pace, and all of that together leads to us kind of making the statement around guidance towards the upper end. We also don't want to stretch the ecosystem. That's the right way to think about it.
There's nothing else in the business, where I would say you should be aware of that significantly changes. It's a way of how we balance these two target functions.
This is Stefan. With regards to cost in Q4 or Q3, cost of EUR 38 million actually included a larger sales compensation payout, given the very strong new subscriber growth, especially around in Q3. Essentially modeling our operating expense for the Q4 flat is about right. Yeah. Maybe on the subscriber growth numbers, the 400K you mentioned or the 30K increase, that's actually only referring from August to September because I think, what we announced is the 400K subscriber was the number as at the end of August when we updated the prospectus. At the end of H1, the subscribers were actually 370-ish. We roughly added 60K of new subscribers during Q3.
Perfect. Thank you very much.
The next question received is from James Goodman from Barclays. Your line is now open. Please go ahead, sir.
Good morning, gentlemen. Thank you very much. For 2020, I think you guided to growth, previously around the same level as 2019. If we look at the Q4 exit rate, it is implied to be a touch below that. I guess perhaps conservatism as questioned previously on this call. Perhaps you could also give us some comfort just around the implications for 2020 and I'm also looking at the year-on-year growth that we've seen during the quarters. I think 24% in Q1, 51% in Q2, Q3 very strong again. Would you expect less quarterly variance in the year-on-year growth rates in 2020, given we are at a more mature stage now in the transition? Then my other question was just a clarification on the regions. I'd expected a bigger divergence actually between EMEA and Asia growth.
I think we were expecting Asia to accelerate, which it has, but EMEA to be a little lower. Is that developing as you expected from a regional perspective? Thank you.
Yep. Let me take this one. On 2020, I think it's a bit too early to talk about 2020 guidance, but we feel overall very comfortable with the billings numbers, which are out there. Then maybe with regards to the quarterly volatility, I think you're absolutely right, that this was pretty volatile in 2019. That's also reflecting that 2018 was significantly impacted by our transition to subscription business. Some of the comparable prior year numbers include a significant amount of perpetual license sales still, and that's why as we grow out now of this transition, you see an acceleration in growth. Clearly with Q4 being the most important quarter and the large contribution of renewals, growth naturally will be less than in other quarters.
Maybe with regards to the regional breakdown, I think we are very pleased with the overall contribution, especially by the Americas, which is, as I said, a very strong quarter and a very strong execution. APAC is just basically in the prior years, on the comparable period still had a significant amount of perpetual license sales, and the Americas, as you might remember, moved to subscription model much earlier. Underlying growth in APAC still significantly impacted by perpetual license sales. That being said, Q3 in the prior year, APAC was very strong. Growth is a bit more volatile in the APAC region. Clearly we are still in the ramp-up phase, but overall we've been very pleased with the contribution, especially around some of the strategic deals in Japan and China.
That's great. Thanks a lot.
The next question is from John King from Bank of America Merrill Lynch. Your line is now open, sir. Please go ahead.
Good morning. Thanks for taking the questions. Just a couple on the enterprise business, please. What kind of margins do you think that business will generate in the medium to long term now you've had a little bit more data? What are you solving for when you're adding headcount? I guess perhaps you can just explain a little bit the dynamics there. I assume obviously with an enterprise business, there's a bit of a lag period in terms of getting to that margin, perhaps you can address that, but also where you think it will end out. If you could just give us some insights into who you're actually competing with on the enterprise side there, that would be useful. Thank you.
Okay. It's Oliver. I take those questions. Start with the competition maybe. It's a very diverse. Often no other company. Really, if you think about it, when we talk about enterprise, we talk about the Tensor product, which comes with these additional functionalities. We talk about new use cases that often have to do with remote management of IT, IoT equipment. We think about Pilot, the augmented reality product, which is then often bundled into a Tensor license or so. There's a large variety of use cases, which is a good thing, which is exactly what we want. Naturally, then we run into very different competition, and sometimes no competition.
That could be in one particular case, it could be competing with BeyondTrust on a more classical IT support remote access piece, where customers move away from on-prem and consider full cloud native solutions, and then we are in a good position there. It could be IT management players like the SolarWinds, Kaseya, and the likes, which are out there. It could also that we replace LogMeIn. We also quote against LogMeIn sometimes, but not that often. The majority of discussions when we go through our pipeline for the fourth quarter, for example, is non-competitive situations where customers are trying and embarking on a change of their business processes and then evaluate internal solutions and just generally solutions to be able to do more remotely.
When we go and present what TeamViewer can do and kind of the ability of TeamViewer to connect IoT devices, non-office equipment, office equipment, then we often in very good discussions, quite often greenfield. Naturally in enterprise, the competition is extremely diverse. That's also what makes it interesting because it shows us that we are discussing multiple use cases across the enterprise. To your other questions on the margin, I think it's too early to tell, frankly, how exactly the margin will play out. What we are solving for, I think that's the right way to look at it. We look at our business model in total, growth and profitability, and that's clearly something which we want to achieve in a business mix across the whole business. Enterprise, of course, has to contribute very significantly to that.
It's too early to tell how it will play out because we have very different effects. On the one hand, we hire enterprise sales account people, which is an upfront invest. Clearly, it's too early to show the full gross profit or gross margin. Gross margin, yes, but not margin after sales cost to come through because we have upfront invest. These people are building pipeline, and it takes them a while to convert this pipeline. That's a margin depression on the one end. On the other end, we have a significant upricing and margin creation where inside sales people that historically have been selling products around EUR 3-EUR 5,000 per year are now able to win Tensor deals above EUR 10,000, sometimes even above EUR 20,000 with the same people, the same sales cost, which is a huge margin contributor.
The mix of that is actually at the moment playing out very favorable despite the fact that we are investing upfront in enterprise. I think we will need to see how that develops, but we feel very comfortable that over time, enterprise will show the same margin profile than the rest of the business.
Okay. If I could just confirm then, you're not worried that somehow you would need to throttle the growth in enterprise to look after the margin at the group level? You don't think it's gonna come to that?
No, not at all.
Thank you.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press 01 on your telephone keypad now. The next question received is from Stephan Klepp from Commerzbank. Your line is now open, please go ahead.
Yeah, good morning, gentlemen. Stephan from Commerzbank. You had 60,000 new subscribers, and if I take your net retention rate of 103%, that gives me more or less an annual subscription of less than EUR 500, just softly under EUR 500. Can you talk about the granularity of those 60,000 new subscribers? Can you talk about what kind of models they went for, modules they went for, and what is the DNA of those clients, more or less?
Yeah. Clearly. The subscribers numbers or the ASP per subscriber, it's significantly impacted by business mix. For example, we have products which cater more towards the need of single professional users, SOHOs, or smaller enterprises like our remote access product, which sells for EUR 200-300 on a yearly basis. That being said, at the same time, we are closing larger contracts, as Oliver mentioned at the beginning of his section, within the enterprise segment, where one single subscription contract might amount to EUR 100 or more than EUR 100,000 or more. There is a significant business mix in our subscriber ASPs.
Is it then right to assume, while the mix is so important, that you probably converted in the Q2 and Q3 more of those small SOHOs and, let's say, small enterprises towards your platform to become paying subscribers? Or is it another driver behind the strong growth there?
No, you're right, but we will clearly always add more subscribers in absolute amount than a large enterprise because there's just Sorry, more subscribers in the smaller enterprise space because there's just much more of those companies out there than large international corporate.
Sure.
Yeah.
Okay
It's the natural customer journey also, right? If you look at our funnel and the ecosystem, we have a large group of free users, and then it's the free to paid conversion that gets the high volume in. Over time, once we know the customer, we know which customer to develop, cross-sell, offer more products, and develop into a larger ticket sizes. That, say, has always been a very natural development since inception of the company. People buying add-on channels, additional capacity, now in the other products, more seed, more use cases. That's implicit in our business model.
Okay, understood. If I just go back to your IPO prospectus and the trading statement there. You basically said you had better data on resellers, and that's why you could convert many clients to become new subscribers. Can you talk about that better data, better grip on reseller data that you mentioned there?
I think what we meant with that sentence is that now we are also in much more granular discussions with our resellers and better understand the end user data behind it. That's what we are saying. Doesn't relate to any conversion of that or doesn't relate to any improved business with the resellers. It's a key part of us, of our business. We continue to invest into the general business, and as such, our discussions become more granular, and we better understand the end user data behind the resellers.
Okay. Thank you so much, guys.
As there are no further questions, I hand back to Mr. Hildebrandt for the conclusion.
Thank you very much for your attendance. As there are no further questions, we would like to finish the call. Thank you. Goodbye.
Thank you. Bye.
Thank you. Bye-bye. Thanks.