Earnings Call: Q4 2020

Feb 24, 2021

Earnings release

Ladies and gentlemen, thank you for standing by, and welcome to the Kneat.com fourth quarter and year-end of December 31st, 2020 update and results conference call. Please be advised that today's conference call is being recorded. Today's call will be hosted by Eddie Ryan, Kneat's CEO, and Hugh Kavanagh, CFO at Kneat. At the conclusion of the formal comments, we will allocate some time to take questions, and we will prioritize questions from sell-side financial analysts. Eddie will begin with his comments, and then Hugh will move on to some financial highlights. Before we begin, I would like to remind you that except for historical information, the comments in today's conference call contain forward-looking statements, including statements regarding Kneat's future financial outlook and financial performance, market growth, the release dates for and benefits from the use of Kneat's solutions, our strategies, and our general business conditions. Any forward-looking statements contained in this presentation are based upon Kneat's historical performance and its current plans, estimates, and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Kneat's expectations as of today. Subsequent events may cause these expectations to change, and Kneat disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including quarterly results and limited operating history, which make it difficult to predict future results. Our expectation for future growth of our revenues, unauthorized access to our customers' data, dependence on revenues from new customers, the rate of adoption of our SaaS model, acceptance of our applications and services by customers, loss of one or more key customers, adverse changes in general economic or market conditions, particularly in the life sciences industry, delays or reductions in information technology spending, particularly in the life sciences industry, including as a result of mergers in the life sciences industry, the development of the market for enterprise cloud services, particularly in the life sciences industry, competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications, and marketing initiatives by our competitors, our ability to manage our growth effectively, and changes in sales that may not be immediately reflected in our results due to the revenue recognition criteria under International Financial Reporting Standards. Further to these risks, these forward-looking statements do not include a full assessment or reflection of the unprecedented impacts of COVID-19 pandemic occurring since the first quarter of 2020 and the ongoing and developing situation resulting in direct global and regional economic impacts. This has resulted in significant economic uncertainty, and even though the company has to date experienced no significant impact to its operations, any potential impact on our future is difficult to understand or measure at this time. Further information on potential risks that could affect actual results will be included in other filings Kneat makes on www.sedar.com. The press release, the MD&A, and the audited consolidated financial statements are all posted on our website. If you wish to receive a copy of any of these documents, please do not hesitate to contact us. Eddie Ryan will now start with his comments. Thank you. Welcome, everybody. I am pleased to report on the progress that our team has made during quarter four and for the full year 2020. This is highlighted by an 88% year-over-year growth in total revenues and a 243% year-over-year growth in SaaS license revenues. Additionally, we continue to see strong growth in our overall annual recurring revenue, which was up 149% year-over-year. It is also pleasing to see that our SaaS license fees now represent 72% of the total license revenue for 2020, compared with 35% for the previous year. The promotion of our SaaS offering is a key strategy for Kneat, and its continued strong growth illustrates how our team continues to execute well on our plans. Our existing customers are expanding into new work processes and new sites, delivering a great opportunity for growth and expansion of our software. Excellent customer references coupled with a strong sales and marketing effort is driving a healthy sales pipeline. We continue to develop our company structure and recently made the senior appointment of Mr. Keith Holmes as Chief Technology Officer. Kneat will benefit from Keith's considerable experience in product strategy and technical leadership as we continue to grow our operations globally. Our R&D team continues to build out our technology, and we are excited by what they are achieving. In addition, we continue to enhance our SaaS delivery model, which is leading to its increased adoption. In spite of COVID-19, we are executing on our plans, and we are very proud of all our team as they do so in a challenging remote environment. It is very satisfying to be helping many of the largest global healthcare companies to digitize and become paperless with some of their critical business processes. As we progress, we are becoming trusted by more and more of the largest global healthcare companies. Our plan for 2021 is to continue to add and deploy new SaaS customers. Expand to new work processes and new sites with our existing customer base and continue to develop the Kneat Gx platform to deliver increasing value for all our customers. This concludes my review and comments. I will now hand over to Hugh, and I will be back for the question and answer session and with my closing statements. Hugh. Thanks, Eddie. For the financial review, please keep in mind that all the numbers I will be discussing are in Canadian dollars. Revenue for the three months ended December 31, 2020, was CAD 2.96 million. This was an increase of 112% from CAD 1.4 million in the same period in 2019. SaaS license fees are a key metric for Kneat. Compared with the fourth quarter of 2019, SaaS license fees of CAD 1.14 million increased by 233%. Total revenue for the year ended 2020 was CAD 7.42 million, which is an increase of 88% from CAD 3.95 million in the previous financial year. This included CAD 2.88 million in SaaS revenues, which increased by 243% from CAD 0.84 million in 2019. The increase in revenue was driven primarily by new customers going live on the platform, existing customers scaling their use of Kneat Gx through the purchase of additional licenses, and the growth of professional services revenue associated with services provided to customers by our larger professional services team. Cost of revenues of CAD 1.36 million for the three months ended December 31, 2020, increased from CAD 0.65 million for the fourth quarter of 2019, and the year ended December 31, 2020, was CAD 4.54 million, an increase from CAD 2.19 million for the year ended December 2019. These increases reflect additional salaries and benefits related to a higher headcount in the professional services team and increased hosting costs associated with the SaaS platform. Gross margins for the three months ended December 31, 2020, was CAD 1.6 million. This is an increase in gross margin from CAD 0.65 million for the same quarter in 2019. The increase in gross margin reflects an increase in revenue, in particular the increase in license revenue and improved professional services margins associated with the increased contribution of recently added team members as they completed training and come up to speed. Net loss for the fourth quarter of 2020 was CAD 1.59 million, compared to a net loss of CAD 1.12 million for the same period in 2019. Kneat has continued to invest in building our team by hiring talented staff across many functions. The impact of increased revenues and gross margins is offset by unfavorable foreign currency movements and additional salaries and benefit costs related to higher headcount on the professional services and R&D teams, as well as increased amortization costs relating to the intangible asset. Finally, some comments on the key performance metric of annualized recurring revenue, ARR, which includes SaaS license fees and maintenance fees. The promotion of our SaaS offering, which adds to our annual recurring revenue base, is a key strategy for Kneat. Progress on this front continues to be reflected in the growth in ARR at December 31, 2020, to CAD 4.8 million, a 149% increase compared to December 31, 2019. More specifically, ARR from SaaS license fees increased by 203% to CAD 3.9 million, and ARR from maintenance fees increased by 39% from December 31, 2019. As a reminder, we have filed our audited consolidated financial statements and MD&A on SEDAR, and they are also available on our website. We are now ready to take questions. To ask a question, please use the hands up feature available in your GoToWebinar control panel. There should be a slide showing the image of the hands up feature in your GoToWebinar control panel now. Once you have selected the hands up icon, I will introduce you, and you can ask your question using the microphone on your computer system. Please note that only attendees with a microphone will be able to ask questions during today's session. I'd also ask that as I introduce people to ask questions, that they might just identify the organization that they represent. Our first question today comes from Gavin Fairweather. Gavin, I bet on you to go now. I think you may be self-muted, Gavin, so you might need- Yeah. We're good. Can you hear me now? Yeah. Good. Okay, great. Yeah, it's Gavin here from Cormark. Thanks for taking my questions. Congrats on the quarter. Maybe Eddie, just to start out, can you just touch on the sales funnel? You've obviously done some great work capturing 10 of the top 20 clients there. I guess I'm just curious if you could speak from a high level to any kind of RFP activity going on or any kind of sales processes going on within those tier ones that you haven't yet captured? Yeah. Hi, Gavin. It's a good question. Yeah. At this point in time, Gavin, we're at the same stage, I would say. We're continuing with a very strong, healthy pipeline. The team continue to execute well on the front end. We expect to continue in the same vein. With that, there are always RFPs going on and sales process going on with some of these customers, and that includes a number of those large customers like you said. Okay, great. Maybe just on the SaaS ARR. It was a really nice jump this quarter. It jumped about CAD 900,000. If I look at previous quarters, it being kind of increasing by CAD 500,000 or CAD 600,000 a quarter. Can you just talk to kind of the activity that you're seeing in the base, how many of your clients are expanding, and what you're hearing from your SaaS clients in particular in terms of their rollout plans? Yeah. That's a very good observation there, and it is all about SaaS for us now. We're transitioning our existing customers over to SaaS. That's ongoing. Conversations with those who aren't already transitioned over is ongoing as well. The key dimension to that increased growth was existing customers expanding. We would hopefully see that going forward as a trend in the sense that that's where we expect to see our growth. All the customers that we have in our base are expanding to one extent or another. Some slower, some faster than others. Would it be fair to say, though, that maybe some are really accelerating their pace of expansion, just given that jump in ARR bookings support? Yes. There are some that are going faster than others, Gavin, for sure. That is correct. Okay, I'll lob in one more before I re-queue here. Can you just give us an update on the partner channel? How many partners you now have trained and ready to support customers? Are those partners primarily focused on implementation and support, or are they starting to get to the point where they're getting ready to start selling for you as well? Not selling, but influencing potentially sales through their network and through their sort of referral. These partners fall into a couple of different categories, Gavin. There are a number of them. We're seeing a lot of interest coming through from partners now because of our presence in the marketplace, especially with the big pharma companies. What we're seeing is that there's partners that can use Kneat to help them to deploy their services to the industry. There's partners who can supply people that understand and know how to use Kneat into these big pharma companies where they can now perform consultancy for them. There's partners who can help us to deploy our software as we go forward. I would say that a number of these partners are customers as well in the sense that they are buying licenses to deliver their services. Also, we're seeing big pharma requesting the supply chain to use Kneat when it comes to large capital projects. There's a lot of positivity in that whole area, and it's early days regarding it running at scale. There is a lot of interest. There's a lot of them being trained. I would say we have a couple of people training on the Kneat Academy training almost full time, between training customers, training partners, and training our own internal staff. When you say that partners are buying licenses, so are they kind of acting as ISVs or are they kind of white labeling your platform? I guess I just wanted to dig into that a little bit more. Yeah. Some of the partners will be suppliers in the supply chain, and they will be delivering services such as deploying ERP systems into pharma. They are using Kneat to help them deliver their services, validating, installing, managing the documentation, and testing the software before they go live within the customer. Right on the CSV side. On the CSV side especially, yes. There's other dimensions to it as well, but that would be the key thing. Integrators that are deploying software, they're able to cut back on their man-hours. They're able to save a lot of time. We have a case there that hopefully will come through shortly in a white paper where an integrator is saving a huge amount of money by using Kneat to deploy their services. Okay, great. I'll pass the line and re-queue. Thanks, Gavin. Okay. Thanks, Gavin. Just going to mute you there now. Our next question comes from Martin Toner. Martin, over to you. Hey, guys. Thanks a lot. Can you give us some stats around the increased usage of Kneat University, just to kind of give us a flavor for how that's helping and how that's helping build the pipeline? Yeah. I don't have stats specifically with me right now, Martin, but I would say that, just following on from my answer to Gavin there, that we have some full-time staff doing training. A lot of that is to the supply chain and to the partner channels. To customers also, of course. Yeah, I would say in the last three months, we've seen a marked increase in that, and I expect it's going to keep going that way. The partners vary from sort of smaller partners to medium-sized partners, and also discussions with the larger type integration partners. I know your customers have a lot of cross-functional teams and they're organized globally. I'm just wondering, are there some Kneat users who would work on some product lines that use Kneat and others that don't? Is that a good sort of mechanism for growing internally at your customers? Yeah. In that situation, I'm just trying to understand the question fully. Do you mean, Martin, where one site may be using Kneat and other sites may not be at this particular point in time on a different line or something to that effect? Is it? Right. Yeah, you could have employees who touch multiple sites based on the way the firms are organized. Yeah, absolutely. I think this is very much a global solution. It's a single instance, and the beauty about Kneat is when you install on your first process or your first line or your first application, then you can expand to multiple applications and multiple processes and multiple lines. But a lot of the people who are part of the overall quality infrastructure could be overseeing multiple different sites and multiple processes, and that discipline across multiple sites. That's part of our growth strategy, is the expansion of Kneat, the land and expand methodology for the platform. Super. Thank you. Last question from me. Can you remind us about how we should model gross margins for SaaS in order to kind of help model gross margin overall going forward? Yeah. The gross margin for SaaS has gone up in the back end of last year, and that's due to the fact that our professional services, we're not hiring as aggressively in professional services. We would have spent ahead in that area. As the sales go up, we're achieving more with our professional services team, more sales. The other thing to say is that the people when they start, they're not up to speed straight away, it takes a bit of time, and as they get up to speed, they become more chargeable and all of that. Can I-- Yeah. Sorry. I was going to add, Eddie. In terms of that specific SaaS, Martin, I anticipate that we will be achieving normal sort of gross margins for the industry into the 70s% for sure as we start to scale, et cetera. Overall gross margins will tend to trend in that direction as the ratio of SaaS revenue to professional services revenue, that ratio moves more strongly in favor of the SaaS revenues over time. Our professional services revenue will probably grow a lot less quickly than our SaaS revenue. Hence sort of the trending towards normal SaaS margins, industry SaaS margins. Just to add to that, Martin, the other thing is that for the business as a whole versus the SaaS aspect of it, everything is fast going to SaaS. A lot of the on-prem stuff will be sort of moving out over the next couple of years. Okay, great. Thanks. Hey, one last question on R&D. I think growth rate year-over-year was around 50%. Is that a good number going forward? Can you give us just a little bit of color there? Again, I would say regarding R&D, we've spent ahead on that. We've created the asset. Obviously, we still have to continue developing it out towards its vision, but the R&D will not go up as fast as it has been going up relative to the revenues either. You'll see a net improvement in the overall margins as well. Yeah. I suppose the additional comment I would make there is, while the team may not grow as fast, there's obviously, we're depreciating the intangible asset, and that's part of the increase that you've seen over the last year. Okay, great. Super. Thanks, guys. Congrats on great numbers. Thanks, Martin. Thanks very much, Martin. Our next question comes from Christian Sgro. Christian, over to you. Hi, Eddie. Hi, Hugh. This is Christian Sgro at Eight Capital. Wanted to follow up on Martin's questioning there. It sounds like the professional services and R&D teams are fully staffed or approaching fully staffed, including those two teams in sales and marketing. Where would you say Kneat is going to add headcount through 2021? Or would you say one or more of those groups are fully staffed and ready for the opportunity? Yeah, that's a good question, Christian. I would say yes, you're right. The first thing to say that the professional services and R&D are in a good place. There will be some hiring there. I think there'll be an analysis of how fast we can grow within our TAM and how we can deliver to the customers. I think we'll be obviously looking at sales and marketing from that perspective as well. I think you will see some additions in the sales and marketing area going forward. Perfect. One more question from me. It seems globally we're seeing a prolonged impact from the pandemic, and we're all learning to work with the situation with the new normal. Is there any change to Kneat's go-to-market strategy or? Sales efforts, partner development, given the situation with COVID is fluid, and wondering what your thoughts are there. Yeah. The question there, Christian, is I guess how is COVID affecting us and in the longer term and all parts of the business. I think it's fair to say that we're doing very well with COVID. We're operating very well, challenging at times, of course, but the team is working very well. The customer, they are pushing on with their digitization programs. If anything, it's a renewed effort to digitize all aspects of their business because they're seeing where digitization is helping in this remote environment. That's very true of Kneat, and we've been told that by our customers. I think we would miss, I think, face-to-face in the sales process to some extent. It's the same for everyone, I suppose, and competitors as well. I'm very happy with the way things are going. There's upsides to it in the sense we can sometimes get more done, but we still do miss that sort of marketing piece and the sales piece, especially at trade shows and stuff like that. We have to put out greater effort online, I think, regarding the sales process and stuff, but it's not negatively impacting us at this point in time. Yeah, that sounds good. Q4 shows that the team has been able to work through it, and so we all miss the face-to-face interaction, so hopefully that returns soon. That's all the questions from me. Thanks for taking my questions. Thanks, Christian. Thanks, Christian. The next question comes from the line of Rob Gough. Rob, over to you. Thank you very much for taking my question, and once again, congratulations on the quarter. In the past, you've talked about your addressable market with your existing clients. Perhaps could you refresh us on that and any changes in that view in terms of the timing of realization or the potential scope that you are currently seeing? Yeah. Thanks, Rob. The addressable market hasn't changed much. We're still working within that whole validations, commissioning, qualification space, which is a subset of overall quality in the organization. Within that space there, validation umbrella, there's a total addressable market of $600 million in US dollars annual recurring revenue. Within that, there's probably up to, we're seeing more processes within there that the customers are now using our product for, and they're configuring more solutions on it. If I was talking to you six months ago, I might've been saying there's typically 6 or 7 processes. Now I'm seeing maybe 10, maybe more, and potential for more. They're not adjacent, they're in the validation space because there's different variations of validation, but they're different processes. Every time you go to a different process, it's a new user group, so it is the opportunities for expansion to multiple processes. Obviously expansion to multiple sites. Not a lot has changed from that perspective. Our focus is on the validation space, Rob, within that. Within that, there's anywhere between 10-15 processes that we can address, work processes, at this point in time. Thank you. Perhaps a subset of that, when you look at the SaaS revenue growth of the quarter, is there any way of diving into it and saying or attributing it to new customers, legacy customers, either through broader adoption of services or through deeper penetration? There's a bit of both there. It's expansion of customers. It's a little related to Gavin earlier on. It's expansion of existing customers, and it's also adding on new customers that are going live after maybe being added on, maybe signed a contract four or five months previously, and then they go live within that quarter. It's a combination of both. Very good. If I may, one last one, and it's also a follow-up on question of R&D levels, where you did say that the pace of growth seen in the quarter would moderate. Any additional color that you might provide in terms of the more modest growth anticipated on the R&D levels? Yeah. I suppose we've been adding a lot of R&D over the last year, Rob, and personnel, and we still need to add more there over time, but it won't be as aggressively as we have been. A lot of these people are now delivering to the velocity, and we're going to leverage that into the future. I'm sure there will be more add-ons, but not as steep as we have been doing. Certainly, we'll look relatively flat compared to revenues. Awesome. Thank you. Thanks, Rob. Gavin, I see that you still have your hand up there, so I don't know if that's from the last time, or you have another question? No, just a couple follow-ons from me. I was hoping you could touch a little bit on kind of the tier two and tier three market segment. I mean, obviously you started out in the tier one space. Can you speak about kind of the readiness of the product and the readiness of Kneat and the readiness of channel to begin to go down market and really start to gain some adoption and clients in those lower tiers of the market? Yeah. The history is big pharma focused on the top tiers. Albeit we have added on some smaller customers as well. We are getting better at delivering our technology, our professional services team and all that are quicker, faster, and our technology is improving all the time. It's easier to get it consumed by the customer. The combination of technology and the channels and more activity in sales and marketing is seen as the way to go down the market on the smaller customers. Now, we made a lot of strides in that, and that's a combination of these things being enabled together. It is happening. We are moving down tier now as we speak, and we are adding on smaller customers that can give good revenues per annum and are not as difficult to probably get them live. Do you think that your win rates down market will be kind of the same, or is there a wider variety of competitors? It's a more competitive space as you start to go down. Yes. I think you're right in that there could be additional solutions that can give an element of value to the lower tiers. Then depending within those lower tiers, how sensitive they are to pricing and that, there can be variations. I don't see any reason why leveraging our success and our reference ability, there's a tendency for even the smaller ones to want to follow suit of where the big ones are. I think it'll be very positive for us. Okay, great. Then just lastly from me, just a different spin on the R&D front. Are any new kind of releases coming up and any kind of new features and functionality that you're going to bring out to the market that you'd like to highlight? No, I would say that we're constantly building the platform towards its vision, and increasing the addressable market size by adding on key features that are applicable to multiple sort of markets and maybe adjacent markets in parallel. It's a market platform, and we're developing it to be better, quicker, and easier to consume all the time. I think it's just standard development from that perspective. Some features here and there that customers are asking for that will enable them to maybe scale a bit better. The challenge always is to make sure we bring what's applicable to multiple customers as opposed to individual, smaller number of customers. Got it. That makes sense. Thanks for answering my questions. Thanks, Kevin. Thanks, Kevin. Martin Toner, actually, you still have your hand up. I don't know if that's you have further questions or just haven't taken the hand down. Okay. Thank you very much. The next question comes from the line of Maurice St-Jean. You might identify the organization that you're representing. Go ahead with your question, Maurice. Yes, I'm with Jan King Consulting in Canada. I'd like to talk, Eddie, a little more about your land and expand strategy. Specifically, originally, I think you were getting sort of in the middle of these large organizations. What I'd like to know is, what degree of visibility you've now attained in the top tier of these large global organizations. Has top management really been able to see what you've been able to do for them? The second part of my question would be, now that you've gotten some good coverage, and congratulations by the way, with some of these top-tier organizations, I wonder if you could maybe give us a bit of visibility on what their expansion plans are for the product. I know it'll differ from company to company, and then within the company's division by division. Can you give us a little bit of visibility on how aggressive their expansion plans are globally across their companies? Yeah, that's a good question, Maurice. Thanks for that. The land and expand is really what it's all about for Kneat. Kneat is a platform that's designed to be able to where the customer can satisfy many applications within the regulated space, especially the validation space. As I spoke about earlier, there's anywhere between 10 and 15 sub-processes within that validation space that Kneat's applicable to. Traditionally, we'll enter for one or two key areas, and then once the customer has it live on the first site or the first one or two sites, then they'll expand that out to the other sites. Expanding to other sites is just about training the users on the new sites and then expanding multiple processes, which is do the next process on the platform. The beauty about Kneat is that, once you've got the platform in, it's very easy to add on new processes. Customers can even do that themselves, or they can leverage our channels, or they can leverage our own professional services team, which traditionally has been the way we worked with them. There's a huge opportunity for land and expand. In actual fact, when we talk about our base, we talk about a very strong ARR potential in that base, which is north of $40 million in annual recurring revenue in US dollars in the top seven big pharma companies. That's looking at the land and expand aspect of it. When we started out, Maurice, it was like getting anywhere at all costs. I remember the first customer. We were a team of 25 people, and it took us a year and a half to get that first customer where they actually decided they'd pay money for us, right? Really what happened there was the product was so good and so easy to use and satisfied business needs so well that the users and we just kept doing pilot after pilot, trying to work our way in there. The users became so hooked on it, they just told us, and the manager ultimately, they pretty much gave him an ultimatum and said, "You got to buy Kneat because it's solving a problem. No one else does it as effectively as Kneat does." That's how we started. That was coming in at the engineering level, working your way up, and eventually, probably reluctantly from their perspective, getting them to buy from a small company with 25 people. As you move on, we began to add on big customers as we moved along, and we began to get maturity. The belief that this product really does work, because we were attacking a space that was traditionally paper. I mean, our biggest competitor is the hybrid paper-driven doc management system, right? They began to say, "Well, there is a solution here that can go end-to-end digitized, can go paperless all the way." They said they began to treat it as a mature product. Over time, we began to see customers taking a senior view of it and a joined-up view and then becoming more of a top-down. We still enter companies through the center, but we don't enter any customer now without it being a corporate decision. They don't buy enterprise softwares at a site level at all. Maybe in the past 10 years ago, you might get away with that, but that doesn't happen anymore. It's all centralized. It is always a central decision. Sometimes the top door might be just waiting to see how things work out with the users on the ground and stuff like that before they say, "Okay, now this is ready to be scaled out." There's companies coming in and saying, "No, we're going top-down all the way. Get a big team on it and push it out." We got different variations of that. What I would say, Maurice St-Jean, is it's heading towards the top-down approach with more of the customers now. I think the digital transformation and the market drivers are very compelling. The data integrity aspect of managing all their regulated data and regulated documents. Today, they just can't trust data integrity, and they're being audited for that reason by the FDA and the like. At the end of the day, the drivers are huge. Digitization has become the buzzword. COVID is reinforcing that business continuity. I'm really seeing a top-down approach evolving. It's already there in some places, and it is evolving more and more. It's a long way of answering your question, Maurice. I hope I got it all there. What kind of visibility are you getting from them on the aggressiveness of their expansion plans? Yeah, I think most customers. A proper, serious RFP generally now is detailing how they want it to be achieved. They're typically saying, "We want to get across 12 sites in two years," this type of thing, right? It is a top-down approach from that perspective. It may change a little bit when you get in, variations of it. The visibility is they want reports. They want to see the metrics. Top management, I'm seeing in some customers, want to see the dashboards coming out of Kneat to understand are their facilities in a state of control globally. The visibility is there now. Okay, good. I spent years in corporate banking working with these industries, so I know how they should be reacting to your product. I also worked with the FDA and regulators in the U.S., essentially. Just out of interest, what kind of reaction are you getting from the regulators who are getting these reports? Well, I suppose the key thing is the regulators don't tell the customer to use any tool or any system, right? They just have to make sure that they are compliant with the regulations that they are overseeing. The customer can use paper all day long if they want to, right? As long as they can produce that regulatory record time and time again for 30 years if necessary, right? They can do everything in compliance with the regulations and show that everything is documented, and there's data integrity running through it. They don't do that. Well- When the regulator comes. Sorry. When the regulator comes to audit them, they will ask for a record, and now today, the audits are happening in the Kneat system where the customer is actually just going straight to that record and being able to show it to the regulator there and then. What we're hearing back is that the regulators are very impressed with the Kneat system, and that they really like what they're seeing. Now, that's as far as I know on that front right now. Okay. Very good. Thank you, Maurice. Thank you. Thank you. That concludes today's question and answer session. I would now like to turn back to Eddie for his closing remarks. Eddie. Okay. Excuse me there one minute now while I find that document I have there someplace. Okay. Okay. In summary, we're very pleased with the progress we have made in the fourth quarter and for the full year 2020. We're very proud of the Kneat team as they continue to develop quality compliance software, continue to win and scale top-tier customers, and continue to provide excellent end-to-end customer service. At Kneat, it gives us great pleasure to be trusted by some of the largest global healthcare companies to support them in their mission to bring their life-enhancing and life-saving therapies to their customers. We're very proud of the relationships we're building with these global companies. Before I finish, thanks to our shareholders, our partners, and our team for their ongoing support and belief in what we do. We look forward to the journey ahead, and thank you for your attention. Thank you. That ends today's call. Thank you for your participation.