My name is Hamza Fodderwala. I'm a U.S. Software Analyst at Morgan Stanley. With me, I have the pleasure of hosting Cameron Hyzer, Chief Financial Officer of ZoomInfo. I should mention, I'm filling in for my colleague, Elizabeth Porter, who's currently on parental leave, so hopefully I can do her justice. We'll see. But Cameron, thank you so much for joining us. Before I begin, I should mention a brief programming note. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. With that, we'll kick it off. So Cameron, maybe for investors who may be newer to the ZoomInfo story, could you provide maybe just a brief overview of the company or the products and the core value proposition?
Sure, and, thanks for having me. So at ZoomInfo, we provide a platform to sales and marketing teams. We think about that as the go-to-market teams for companies that really helps them operate more effectively and efficiently and digitize their go-to-market motions. We do that with a database of really high-quality information about the companies that B2B teams are selling to, the people that work at those companies, and signals that help those teams determine when's the best time to reach out to someone or how to frame their conversation. And then on top of that, we overlay a number of automation tools to help those teams effectively use those signals, automate their motions, and, and drive a better, you know, more effective and more efficient go-to-market motion.
Got it. Got it. You talked a little bit about the platform. So I think a big investor debate has been sort of the TAM of ZoomInfo. Is it, you know, a digital Rolodex or is it more than that? Can you talk a little bit about how you're expanding to really become that sales automation platform that you spoke about?
Yeah, totally. So, when you think about our largest customers, they really are using ZoomInfo to really power their whole go-to-market motion. That means bringing in signals, using our workflow tools to then you know, automate different motions, whether that's reaching out to a customer, sending them you know, advertising or email campaigns or you know, other things. And, you know, really helping to drive making the salesperson's job you know, easier every day, where they can be more effective and efficient, to drive more and more you know, value for their company. And so, you know, that is the kind of end value. I think there's a spectrum of sophistication among our customers. There's some customers, particularly when they start out, they're using the system more to you know, look up contact information or find out more about their you know, target companies.
But then, as they continue to, you know, mature with us, using more and more of those capabilities to drive, you know, a much more sophisticated go-to-market motion is where we see, you know, many of our customers going. And, you know, at this point, over 80% of our customers use some level of advanced functionality that we offer. So we do have, you know, people moving along that journey as they continue to mature.
Yeah, and speaking of that platform value, deal involved what the customer purchased and, you know, do you think that's repeatable across your customer base?
Yeah, it's entirely repeatable. I think that customer at this point is a top five, you know, customer, not necessarily one of our largest, but or one of our largest, but not the largest. And, you know, that's a software company that's continued to grow. It's obviously a pretty large company. They actually, you know, have reduced seats with us over the past year or so as they've reduced the size of their sales team. So, you know, coming into the quarter, that could have very well been, you know, a downsell with that customer. But they're also looking to invest more into their centralized data infrastructure and really help with the automation of different motions, help with that, you know, data foundation as they start to build more, more AI capabilities.
You know, the kind of upsell portion of that deal was really driven on them taking more data in a kind of API capability in order to, you know, really drive that, you know, back-end operations level and to continue to sophisticate their go-to-market motion.
Got it. So maybe digging a little bit more into the platform expansion. So you've invested heavily, you know, expanding outside of the core, you know, data provider capability into these advanced functionality workflows. Can you talk a little bit about, you know, these different types of use cases? What has been the penetration within your customer base, and maybe one or two use cases that you're seeing a lot of traction in particular?
Yeah. So the areas where we're seeing the most traction tend to be in our Operations OS, which is really the ability to manipulate and route data within the infrastructure of the company, as well as automation capabilities. And so, you know, part of that is the Marketing OS as well, which is a relatively new product, helps people automate their, you know, marketing motions at the end of the day. It's really an account-based marketing tool that allows people to target specific accounts and then drive marketing or social or, you know, other motions off of that. And so, you know, I think that's where we're really seeing the most traction is in those automation capabilities, whether it's Operations OS, or Engage, or Workflows, or, you know, Marketing OS at the end of the day.
... So, you know, you're obviously expanding the solution set. At the same time, there has been a bit of a slowdown in the business over the last 18 months, along with a lot of other software companies. Can you speak to that a little bit and why you see growth sort of stabilizing going forward?
Sure. So yeah, I think a fair amount of our business is with the early adopters of our platform, which we're really more in, you know, software and technology companies. If you go back to the DiscoverOrg days, we actually focused almost exclusively on profiling the IT departments within large and mid-sized companies, so it's natural that most of our customers were software. When we acquired ZoomInfo, we actually really expanded the addressable market that we could go after because we brought in, you know, quantity technology to kind of merge that with the quality technology that we'd developed at DiscoverOrg. And, you know, really, we're able to go after all sorts of other industries, whether that's retail or transportation logistics, telecommunication, financial services, et cetera.
So, you know, that doesn't kind of change the fact, though, that, like most of our business, we're historically technology businesses and, you know, coming into this year, around 40% of our customers, by revenue, were still in software. You know, software's been a really tough kind of place to be over the last, you know, year to 18 months. A number of companies have seen their growth trajectories change pretty significantly, and obviously, when we're selling into the, you know, sales teams at those companies, that change in trajectory, you know, impacts what they want to buy and how they want to grow. In addition to that, there's been significant pressure on how they think about their margins as a business.
So, you know, particularly in mid-market software, if you were losing 20% to 50% of your revenue, your investors were pushing you to get to something closer to breakeven. You know, that's a, you know, big shift in terms of operating model for a lot of our customers. So we've been working with our customers to kind of work out some of the overbuying that, you know, occurred when, if you go back to 2021 and 2022, there was a lot of free money in the system. Working out that overbuying, you know, resetting to a level where we think that there's, you know, really good foundation to grow with those companies as they, you know, start to reaccelerate their growth is what we're really focused on.
And, you know, at this point, I kinda think of peak negativity as being in the February to March timeframe of 2023. So we have a number of subscriptions that we need to lap that peak negativity and get through this timeframe of, of, you know, potential downsells or, you know, tougher renewals so that we can then, you know, ideally have that opportunity to grow with those companies again.
Speaking of that, I think in Q3, you talked about how you're 90% through the renewals of some of these cohorts that have been subject to that downsell pressure by the end of Q1. So as you sit here today, you know, what is your sort of comfortability around sort of growth stabilizing beyond Q1 next year?
Yeah. So, you know, certainly, again, that concept of lapping peak negativity and even with our long-term contracts, you know, being through 90% of our revenue, having transacted with us between September 2022 and March 2024, makes us feel really good that, you know, again, we wanna be able to kind of reset that foundation. Obviously, we're not all the way through that yet, but, as we get through that and we reset that foundation, it does give us that opportunity to, you know, remove some of the down sell pressure that we've seen over the last, you know, three or four quarters and, you know, start to rebuild with those customers as they start growing again.
And just to clarify, you know, the customers who may be cutting back, is it just a function of seats? Is it functionality? And what are you doing to sort of offset perhaps those seat expansion headwinds?
Yeah. So it is majority seats. Obviously, you know, when people are cutting back seats, they're also looking at other parts of their contract and oftentimes pulling in, you know, some of the additional functionality that they have. Realistically, our focus right now is to really partner with those customers, you know, make sure that they're getting all of the, you know, value out of the platform that they can, and, you know, resetting the relationship in a way where we're not just showing up to kind of sell the next thing.
Mm-hmm.
But really focused on making sure that those customers are driving value for their own organizations, so that as they, you know, start to look into the future and think about, you know, their growth prospects, that they can really lean on the system to, to leverage that going forward.
Yeah. Shifting gears a bit, you know, one of the things that really stands out, particularly someone who might be new to this story, is the really high operating margins. You have over 40% operating margins for ZoomInfo, which is a lot higher than companies at your scale and at your growth profile. What about ZoomInfo's sort of business model enables this?
Yeah. So it's been something that we've obviously focused on, you know, for the entire history of the company. A big part of it is that we're leveraging our own system to drive a more efficient and effective go-to-market motion. We've done that, you know, from the very beginning. You know, I find it interesting that, you know, realistically, most software companies, they're spending sometimes the majority of their operating expense, although usually the plurality of their operating expense, on sales and marketing. You know, that's a big line item for any software company. If you're able to, you know, drive a really effective and efficient go-to-market motion, that can, you know, help support the operating margins of the overall company.
Obviously, you know, just culturally, we're really focused on making sure that that focus on continuing to be 1% better every day, to make sure that we're getting the maximum leverage out of the operating expenses that we're deploying, pervades to other parts of the company, and not just sales and marketing. It really starts with sales and marketing and using our own system to drive that leverage.
I mean, anytime you have very high operating margins, I imagine that introduces a lot of competition. So, you know, what is it about ZoomInfo that differentiates itself from, let's say, a software company like Salesforce, right? Which is kind of in that sales automation space, or HubSpot or what have you.
Yeah, I mean, I think that what we really focus on is a really high-quality data asset that our customers can leverage to really get the most value out of their folks. Realistically, you know, I think that there are a lot of companies out there that are pure software companies, and I think that those software has that opportunity to deliver a lot of value. But when you're talking about really making the world a better place for salespeople, having information about the companies that they're selling to, the signals around those companies in terms of when you should be interacting with them or how you should frame your message, and the, you know, people that work at those companies, really helps to drive a ton of leverage, and that becomes a, you know, an interesting value proposition.
And frankly, you know, it's hard to get to really high-quality data and really high-quality insights, and that's where we've focused all of our efforts and where we really differentiate between versus other software vendors that are out there.
Got it. Speaking of data, you know, generative AI obviously has been a big theme this year and going into next year as well. How is ZoomInfo leveraging all this rich data that they have to offer, you know, applications to their customers that could help them be even more productive?
Yeah. So, you know, AI is obviously a really exciting opportunity for us, particularly when you think about some of the capabilities that we've already added on in terms of meeting summaries and follow-up emails that, you know, you can kind of generate out of the system. And, you know, we'll continue to drive more and more, you know, leveraging of the insights and signals that we're generating in order to in order to help our kind of customers, and AI is a key component to that. But I actually think that that's, you know, maybe the smaller opportunity relative to many of our largest customers, really focusing on their data infrastructure in order to leverage AI, you know, in bigger ways.
And so that's where we see a number of our, you know, million-dollar-plus customers and other large customers really starting to take on more data as a service and Operations OS, so that they can help drive a, you know, overall AI motion within their companies.
Got it. One question, then I'll open up to the audience for any questions as well. You talked a little bit about how software and sort of the tech vertical, I think it represents 35% of your business now, I think down from 40% previously. What other verticals are you seeing, you know, more demand in, and do you think that mix, you know, goes down over time?
Yeah. So it's really any other businesses that are selling to other businesses: financial services, business services, transportation and logistics, telecommunications, you know, healthcare and pharmaceuticals, retail, manufacturing. You know, all of those are continuing to do really well for us in terms of other verticals outside of the technology space. And so I, I do think that in the long term, I'd expect, you know, the contribution from any particular vertical to get closer and closer to that vertical's contribution to overall, you know, call it B2B GDP.
Got it. Any questions from the audience? Oh, we have one here.
Yeah, I'm curious-
Oh, wait, just wait for the mic. Sorry.
I'm curious if you're able to monetize AI in specific SKUs, or does it just improve the platform overall? Or, or just maybe talk about AI and how it expands the amount you can charge the customer.
Yeah. So, you know, certainly some of our SKUs, where it's the kind of more advanced, you know, SKU or higher level SKU that incorporates AI, that allows us to get more, more folks up into those SKUs, to drive better monetization. And, you know, a big part of it is just driving a better customer experience, which will obviously increase our, our retention as we go forward. So those are the kind of primary areas that we're seeing today, but certainly the pull from customers investing in AI and needing high-quality information to kind of feed those engines is, is another area where we're really excited about, you know, the future with respect to AI and how, you know, being really the only platform that has those high-quality, you know, data and insights to help drive them is really important.
Any other questions? Maybe on the AI topic, I mean, clearly, you know, a company with 40% operating margins, you know, you're already very profitable. But in what ways are you leveraging AI internally to, you know, make yourself even more efficient?
... Yeah, so certainly there are Copilot pilot areas where we're leveraging AI and, you know, things like R&D to help drive more efficiency out of the team and help, you know, further widen that moat of capabilities that we're able to offer customers. You know, historically, we've always leveraged AI and machine learning in a really big way to drive quality at scale across the entire database, and we'll continue to invest in that. There are more and more opportunities, and then certainly, you know, within the sales and marketing team, we're often piloting the first kind of AI capabilities that we're gonna put into the system with our team to help drive, you know, more and more efficiency from a sales and marketing perspective as well.
Yeah. I think you also called out some sales efficiency hurdles from increased time spent by reps on renewals. Can you talk a little bit about what steps the company has taken to improve that, and what you're seeing in terms of sales productivity trends going forward?
Yeah. So from a sales efficiency perspective on the new side, it's actually been reasonably stable. Obviously, it's a harder world out there, so you see that come in a little. The bigger impact to the environment has been on the, you know, on our existing customers. And so we've focused a lot on, you know, creating new, a new renewal team just to help people get through, like, a base level renewals. We focused a lot on expanding our enterprise focus with respect to our customers and in many cases, verticalizing some of the teams so that they're able to have those deeper conversations with customers as well.
And, you know, certainly, you know, we're always focused on where we can deliver more value, whether that's from a training perspective or, you know, getting people's integration set up more in a better way. So those things also, you know, help to drive retention, particularly as we move forward with those customers.
Yeah. On the verticalization point, you know, you talked about how you wanna expand into the other B2B verticals. Is there an evolution of the go-to-market strategy that has to take place? You talked about vertical selling. Is there gonna be a more of a channel component, and what does that mean for, let's say, profitability longer term?
Yeah. You know, I think it's interesting we talk about expanding into that space, but, you know, it's roughly two-thirds of our revenue, so it's already an $800+ million business. It's not a kinda small thing that we're looking to expand, but certainly we're very under-penetrated in those areas, so there's a lot of opportunity to continue to grow, and certainly, you know, verticalization is a key component of that and one that we focus on. You know, we'll bring on more channel partners as we continue to grow as well, which, that's something that we historically have not focused on, so it's a bit of a newer motion for us. But those things are all important to continuing to drive that growth.
Today, just roughly, you know, when you think about your existing customers, I know there's some downsell pressure in one of the cohorts, but think about growth going forward. How much of that is coming from expansion within the base versus net new?
Yeah. So yeah, I think we've seen historically that net new does continue to drive growth, and I think that's true within, you know, the current time frame as well. And a big part of that is just how under-penetrated we are with respect to, you know, those overall markets. But, you know, I think when I think about the growth algorithm long term, you know, we've seen gross retention hold in relatively well in this environment. So our customers, you know, continue to use these platforms, but some of them, you know, on a reduced basis, just based on where they are. We've seen that net upsell, you know, contract significantly, and I think that's the area that we'd like to see that, you know, get back to expansion.
A big part of that is the kind of boat anchor that we have from downsells that we're looking to, you know, work through that and get to the point where we can get back to a net upsell level. Historically, you know, even before, you know, 2020, you know, in 2018 and 2019 as examples, like, net retention was in that, you know, single digits above 100% level. So love to get back to that level where we see our existing customers contributing single digits, maybe even, you know, close to double digits of, you know, kind of baseline growth. And then given that we're so under-penetrated, continuing to drive new customers to get us back up into teens level, maybe even low twenties level of growth in the long term in a, yeah, more stabilized environment.
Generally, what happens to growth and net retention when a customer does, you know, buy multiple products or the broader platform vision with ZoomInfo?
Yeah, certainly, you know, as our customers get more sophisticated, they do tend to have higher levels of net retention, so they continue to invest more. Obviously, it's you know, more integrated into their environment, so it's harder to kinda take out. So both gross retention and net retention are improved as customers are using more and more of the functionality.
Yeah. And, you know, ZoomInfo obviously in an enviable position, given very high, you know, 40% plus operating margins. When you think about growth versus margins going forward, you know, is it gonna be more margin expansion, more focused on growth, and sort of stabilizing that top of the funnel going into next year?
Yeah. You know, I think that we are focused on getting Net Retention back into a level that we feel is, you know, healthier for the business and therefore, I think more focused on, you know, that growth. Realistically, we have a business that, like all software businesses and data businesses, has a fair amount of operating leverage inherent in the model. So, you know, lower levels of growth, that operating leverage becomes less, you know, less apparent. And obviously, as we get growth back into, you know, back up, working through this time frame, we'll be able to, you know, realize more of that operating leverage going forward.
Got it. Maybe just last question on, you know, cap allocation. You've deployed, I think, $160 million of your $600 million buyback authorization as of Q3. Can you talk just high level about your capital allocation strategy? Is it gonna be more buyback focused, more tuck in M&A? How do you think about that going forward?
Yeah. So certainly, you know, we're here to kind of be the best capital allocators that we can, and certainly in the current environment, we feel that we're trading at a level that's well below the intrinsic value for the, for the stock, and therefore, we are gonna continue to be aggressive about buying back stock in this environment. Realistically, we're deploying more cash to buy back stock than we're generating in a particular quarter right now at these levels. Going forward, you know, it is dependent on kind of where the stock's trading relative to the, to that intrinsic value level that we see in the growth of the business, and therefore, you know, we'll continue to, you know, monitor that, decide where to go.
You know, I think we're interested in M&A, but realistically, there's not a lot of things that we think we're missing in terms of delivering value to the customers with respect to what we're doing. So it's not like we're focusing on, like, trying to find specific features or other things. And, you know, if I can buy back, you know, really the leader in the industry at 11 or 12 times cash flow, yeah, I'd much rather do that. It makes the bar really high to think about, you know, other M&A to do.
We have 30 seconds left, actually. Maybe one thing that you're particularly excited about for next year. Obviously, it seems like there's gonna be stabilization beyond Q1 based on your guidance, but, one thing you're particularly excited about, a new product or whatever, going in 2024.
Yeah, I think, you know, I think the couple things that we're really excited about are continuing to focus on the enterprise and to really drive value with those large customers. We are rolling out a PLG, kind of a self-service motion for smaller customers, so that we can push more and more of our high-value resources to, you know, those customers that are really digging in with the platform and generating a ton of value. And, you know, I think as we continue to move forward, you know, things that are more automation and AI-driven. So, like, when we think about what we call, like, signal to—signal to action, you know, capabilities within the platform, those, I think, will be really exciting over the next, you know, few quarters and year.
All right. Cameron, thank you so much for your time.
Yeah, absolutely.
Appreciate it.
Thank you very much.
Thank you for everyone joining.
All right. Well, welcome, everybody. I'd like to welcome everyone to this morning's fireside chat with Universal Display Corporation. Joining me on stage today is Brian Millard, Chief Financial Officer. Brian, welcome.
Thank you. Great to be here.
Yeah. Do you want to maybe do a quick intro and safe harbor?
Sure. Yeah, so just a quick safe harbor housekeeping. So I may make some forward-looking statements today as part of my remarks. Our actual results may differ from those, those statements. We would encourage everyone to look at the company's SEC filings prior to making any investment decisions. So as a quick introduction about the company, for those of you that aren't familiar with Universal Display Corporation, we've been around for nearly 30 years. We are a key innovator in the OLED material space.
We make phosphorescent emitters, is really our core business, and that's both selling phosphorescent emitters, and that's the layer that actually gives off the light in an OLED display, as well as we license our intellectual property to customers who use that in making their OLED displays.
Awesome. So, Brian, jumping right in, you know, one of the questions you always get: What's the status on, commercial phosphorescent blue? You know, it's gonna be a major power saver when it comes to market. So what can you tell us about the commercialization of that, and when we can expect to see that come to market?
Yeah. So as background, we have red and green material, phosphorescent material, that we have commercialized to date, and that's, you know, being used in OLED displays, you know, worldwide by our customers. Phosphorescent blue material, no one has brought to market, and we have been inventing phosphorescent blue material for a number of years now.... and we believe we're very close to having commercial material available in 2024. So we expect to have commercial material that meets those specifications in 2024. We continue to see improvements in the performance of our material, each, each generation of them. We've continued to see also increased interest in sampling from our customers of that material. So through September of this year, we had $4.3 million of sales.
That's, you know, not in and of itself a massive number, but it's, you know, clearly a positive trend that we see moving forward as our customers continue to, you know, increase their interest in the material, purchasing it in increased development quantities so they can perform experiments on their end. I think it's just continued evidence that we remain on the track to have commercial material available in 2024.
How should we think about the longer term revenue opportunity there?
Yeah. So I think there's one. I think the benefits of phosphorescent b lue are, it's expected to increase the display's energy efficiency by 25%. So that energy efficiency unlocks a lot of opportunity for our customers to be able to increase the energy efficiency of the displays they sell to the end OEMs. That energy efficiency can be applied in a number of ways, whether that be longer lifetime of the device on a single battery charge, maybe a smaller battery, or other, you know, power-consuming features being able to be put into the device. And on a long-term basis, we think that, you know, phosphorescent blue really should replace fluorescent blue. There's no reason why, when phosphorescent blue is available, someone would wanna continue to use a fluorescent approach. So we think it has a lot of opportunity in the years ahead.
From a quantity perspective, today, right now, our red to green material usually has a roughly 2 green to 1 red ratio in a display. And we think that in the future, when we have a Phosphorescent Blue, the quantities of our phosphorescent blue should be very similar to the quantities of our green today. So in a future kind of ratio, you'd expect that to be 2 green, 2 blue, and 1 red. And so there's a real significant opportunity there from a quantity perspective as blue gets introduced, as well as from a price perspective, we don't really have an answer yet on that. We don't have pricing set for blue with any of our customers, so we need to go through that process and conversation with each of them as we approach the commercial launch.
Makes sense. Well, let's dive in now into kind of the end markets. You know, there's been rumors that, you know, we'll start to see OLEDs in different IT systems, tablets, laptops. You know, what can you tell us about the adoption of the technology in some of those end markets?
Yeah. So there's really, you know, kind of a number of different segments that we focus on. You know, smartphones are right now about 50% penetrated with OLEDs. So globally, about 50% of, of smartphones sold have OLED displays. Televisions are right around 3% penetrated, and then the opportunity that we see, as you mentioned, is this IT market, which is tablets, laptops, and monitors. And currently, that penetration rate's sitting around 2%, so clearly a lot of room to grow. And next year, there's, you know, an expectation that a number of leading OEMs are gonna introduce OLED displays into their tablet series.
And we think that that's gonna kind of kick off a multiyear adoption cycle of IT OLED into IT products, and that's beneficial, one, I think just based on the fact that we're sitting at such a low penetration today at 2%, as well as the fact that those displays are larger in terms of square inches. So from our material consumption perspective, that's a great opportunity for, you know, our material to be able to cover larger display sizes and a lot of room to grow. And a lot of analysts, you know, our customers, have also recently estimated that in the next five years, that 2% penetration rate is likely to go up to something like 10, probably over a five-year period.
And so that's a lot of opportunity for us based on the penetration rate growth as well as the size of those displays.
And so kind of following on that, in the IT market, obviously, IT devices have a longer lifespan than smartphones, and so that might open up an opportunity for a different type of technology, which is OLED Tandem. Can you talk about what tandem technology is and-
Sure
... the opportunity there?
Yeah. So tandem is an approach that a number of our customers are looking at, and their customers, as it relates to the IT market. And what that really is, is having two emissive layers in the OLED display. And so the reason, as you said, is lifetime. So if you think about an IT product, whether that's a laptop or a tablet, where there's a white background on for a significant portion of the day, those pixels are on for, you know, the entirety of that white background being on. Your laptop, your iPad right there has a white background right now. And so to make sure that the display can last an appropriate lifetime, having two emissive layers helps address that concern.
From our perspective, that's an incremental material opportunity, because if you think about having two layers of our material compared to one, that's clearly more material to cover that surface area. We think that there's... It's somewhere between probably 1.5 to 2 times the material, because the thickness of each of those layers may not be equivalent to the single-stack approach that we have today. It's clearly an exciting trend and one that I think we're very happy to see come to market.
Very cool. Well, another exciting trend, there's now a lot of smartphone manufacturers coming out with foldable devices. Probably the TikTok effect, people wanting to flip up their camera-
Yeah
-and take a video of themselves. So can you talk about what, OLED, how OLED plays in the foldable device category and, you know, what we could see out of that emerging opportunity?
Yeah. So OLEDs are really the form factor for the technology for foldable displays. You know, OLEDs are inherently rollable, foldable, stretchable. So the ability to have, you know, foldable is only because of an OLED. And as you said, a lot of, you know, leading manufacturers, Samsung, as well as a number of Chinese phone manufacturers, have started to introduce foldable smartphones. There's also foldable tablets that are being evaluated to come to market. And we think that those have a lot of opportunity because they're great for people that want to, you know... You know, you're working maybe in a small environment, you want just a single layer, but if you wanna fold open your tablet, and you have more space, gives you more surface area.
Larger displays, clearly beneficial for our business, having more square inches to cover with our material. It's something that a lot of our customers are focusing a lot of time on, both in foldable as well as some of our customers are also looking at stretchable displays, which is another form factor that we see a lot of opportunity for.
Wow! So I hadn't heard about the stretchable ones yet. That's cool. So, another topic you highlighted during earnings was the automotive market. Can you talk about, you know, what are some of the trends in the automotive market and why people-