All right, awesome. Well, welcome everybody to day two of the Citi Global Technology Conference. I'm Steve Enders, part of the software research team here at Citi. With us for this session, we have Mark Barrenechea from OpenText. Mark, thank you so much for being here.
Pleasure.
I think you wanted to start it off with some opening comments?
Yes, it'd be great. Thank you, and great to be in New York City, and great to be with the Citi team. I wanna start with, we're a growth company, and we've purchased Micro Focus to open up new paths for growth for the company. We're investing in our direct sales organization. We'll soon have full coverage of the Global 10,000, which is a very rare and unique franchise of how to sell an enterprise software.
We've opened up a new mid-market opportunity with the acquisition of Carbonite and Zix, and it's still a very young opportunity for us in the mid-market, and it's real, it's not the small businesses that we're necessarily interested in, but the mid-market, which is a big GDP driver here in the U.S. We have a new OpenText partner network.
We're very focused on kind of the top of the pyramid with partnerships with Google, AWS, Microsoft, SAP, Salesforce, Oracle, Accenture, and TCS, and we've upped our engineering commitment up to 16% of revenue. We're here to explore new value paths for growth. We're in cybersecurity of scale. We have a new developer platform with our acquisition, an API business, an IoT business, and soon AI, and I'm sure we will get to AI, which we intend to play our role in it, which is significant. We're also building the world's most important and valued information management company. This is a $200 billion TAM with our acquisition of Micro Focus.
We're in six strategic domains. In our view, it is the highest profits in software, in this domain, in information management and, and transformative catalysts, cloud, security, business networks, cybersecurity, information management, which is the basis for, for AI. And if you just allow me, I just want to quickly touch on our four key value drivers: cloud growth, margin expansion, free cash flow expansion, and our capital strategy.
On our cloud growth, we're a growth company, and we've been investing in growth. In fiscal 2021, our cloud grew organically 1.8%. In fiscal 2022, our cloud organically grew 3.6%. Last year, our cloud organically grew revenue 3.9%. This year we have projections up to 4% on a much higher base, right?
This is on a $1.7 billion base of that growth percent. We don't have any AI revenues yet in the model, and we have very low Micro Focus contribution. So there's positive pressure on that. And our FY 2026 aspirations, our North Star, our North Star for the business, is organic cloud growth of 7%-9%. Organic cloud revenue growth of 7%-9%. And on this math, that is a two billion plus, two billion plus cloud revenue company growing organically up to 9%, and a $5 billion ARR business growing overall up to 4%. We are a growth company. On free cash flow, we've historically operated with a low 20s yield.
If you look from the business from fiscal 2021 to fiscal 2022, over that 10-year period, our free cash flow yield, for every dollar of revenue, we generated $0.22 of free cash flow. We're gonna operate in the mid to high teens this year as we work through our acquisition expense, but we expect to return in fiscal 2024 to fiscal 2026, our North Star back into the low twenties and generate $1.5 billion+ of free cash flow. Margin expansion, should have done that before free cash flow. Our targets for this year are 36%-38%. Our North Star for FY 2026 is 38%-40% Adjusted EBITDA. Those numbers are still without the benefit of us using our own AI.
We use our own automation software and gotten great benefit. We will use our own AI software and great benefit. So just in summary, for my introductory remarks, and Steve, looking forward to getting to your Q&A, we're a growth company, and we have changed our operating system for growth. We are known of being an M&A consolidator. That is our history and past. Our future is a new operating system for organic growth at OpenText.
And I think we're in a very unique position to capture this $200 billion information management market. These are transformative markets. You know, we're gonna return Micro Focus to organic growth this year and exceed the $2.3 billion baseline. We expect our cloud growth rate to double to between here and FY 2026.
Again, FY 2026, our North Star. We expect our free cash flow to double between here and our North Star in FY 2026, while expanding margins, while expanding our capital return, and having a new AI opportunity for us. So that North Star for us of fiscal 2026 is, you know, up to $6.4 billion in revenues or 80% ARR, $5 billion ARR business, 7%-9% cloud organic growth, 38%-40% Adjusted EBITDA, and doubling our cash flow, and we remain committed to getting the present value for that North Star. So thanks for giving me a few minutes to provide a bit of an intro.
Sure. No, that was great, Mark. Maybe we can just dig into a little bit on those drivers of growth that you're talking about here.
Sure.
You know, I think, think about the, the portfolio you have. I mean, pretty wide-ranging, a lot of areas that you have focus on. I guess, as you think about that, what will it, what parts of the portfolio, what will it take to, to be able to get to those growth targets that you're, you're outlining here?
Yeah, I'll start with our content platform. You know, we, we've been the market leaders in content management, including Documentum. We have the global 10,000, thousands of companies who have housed a decade of content in our platform. And certainly digital was a driver to get to the platform. Cloud was a driver. COVID was a driver to get to the platform. AI is now a driver of, you know, companies have invested in information management for almost 20 years, and we house the automation and some very large data sets.
So companies are now, when we're working with a variety of them, to how to, you know, apply new language models, new algorithms, to not just kinda complete their automation, but unlock the value in their data.
In some of the use cases are governance, risk management. We have a blueprint customer who has three million contracts in one of our platforms and is looking for off-balance sheet liability, looking for the revenue clauses that vendors are not providing with. We have someone in a regulated manufacturing who is looking to speed up the ability to provide information to regulatory authorities. So content management, no doubt. We also see an opportunity in Service Management and Service Experience and Cybersecurity. I'd put those three top of the list.
Okay. All right. That, that, that's great. I know you're talking about, you know, I think, pretty much doubling the growth rate in cloud to get there, and.
Yeah, 4%- 9%.
Yeah. So I guess, as we think about that portfolio and the transition you're going through with Project Titanium, and everything going on there, I guess what gives you the confidence to be able to hit that number and to accelerate both the growth rate in revenue and in cloud bookings?
Yeah, and, so I'll separate revenue and, you know, bookings as an early indicator, and I started on revenue 'cause it's the number, right?
Yeah.
So, well, we'll start with Titanium delivered SaaS capabilities. So we deliver our platform Off cloud, Public Cloud, Private Cloud, API cloud. And with Titanium, Titanium was all about content management, experience management, and having our SaaS products at equal functionality. So, we've done that. So that's now, we've been at Titanium for almost 11 quarters. It's now delivered for public SaaS and ECM, and Box is our competitor in that SaaS market, very squarely. And we're doing very well with that SaaS offering.
Second is, we're getting traction in our API business as well, and we have all the new Micro Focus products coming on for Private Cloud.
And then after that, the Public Cloud, and in October, our first Aviators for AI. So we have the richest pipeline, the richest pipeline of product offerings that we've ever had, and they're all cloud-based. So that gives us the confidence to speak to doubling, a great acceleration and doubling of our cloud revenue growth rate.
In terms of bookings, right, which is an earlier indicator, we think we need to hit 15%, you know, plus, to make those revenue growth numbers. In Q4, we ended with a cloud growth rate of a bookings rate of 12%. And so coming into the year, we can see the pipeline and the products and the activity that gives us the confidence of the 15% for the year.
Okay. All right, that that's helpful context there. You mentioned Aviator in there, and so I do wanna talk about the AI strategy.
Sure
And everything that you're doing today. I guess maybe can you, first of all, just touch on where the portfolio sits today? I know you've talked before about, you know, Magellan and IDOL and Vertica, and all those things.
Yep
Combining to help kinda support it. But yeah, where do things stand now with OpenText AI and Aviator and what's new from what you've announced in the past couple of months?
Yeah, it's gonna be, it's gonna be an exciting set of quarters from OpenText. We are our automation, and I'm gonna make a distinction, and I know, you know, there's lots of ways to describe AI today. And I'll give you my version of it, right? You have the world of automation, and we've built a near six billion-dollar company in automation, and we're gonna keep automating, right? Automate, automate, automate. And our automation captures big data sets. Our content cloud captures big data sets, contracts, employee experience, supply chains, orders, invoices.
Our Experience platform captures customer interactivity. Our business network captures supply chain transactions and how companies map to each other in very complex worlds. Our developer platform captures testing and coding strategies. Our IT platform captures service management and IT assets. These are very large data sets. So our automation is in a place to capture big data sets, very critical data sets. So we've introduced our Aviator platform, which is Vertica, IDOL, and Magellan together.
And just like in the automation world, we have metadata engines that take data, data, you know, data and turn into metadata and make it useful. On the AI side, we have our own platform that will be readily available, low cost, lightweight, that vectorizes data and makes that operational data immediately available to a language model. We will adopt. We have a different view of the world, where on the automation side, we orchestrated information.
We have one document, make it available in Google, Salesforce, SAP, our software. On the AI side, I think there's gonna be 1,000 language models, and they're gonna be highly specialized. There won't be one model from Google and one model from Microsoft. That's a little self-serving.
There'll be there will be 1,000 specialized model, one for agriculture, one for ocean climate, you know, one for make it personal, oncology and blood cancers, right? So there, there is gonna be lots that we're gonna provide that orchestration. We're gonna have an open platform to help customers bring in, the language models. That's sort of the tech stack.
On top of that, each of our business clouds will have an Aviator for AI. On content, again, we're working right now on a blueprint customer to take three million legal contracts and be able to turn that into metadata, vectorize it. We're using actually an open-source language model, T5, which is good enough for this exercise, to show me to produce all the precise contracts of exposure in there. So our Business Network Aviator will transform the supply chain. We have 500,000 connections living in our supply chain platform.
We've cracked the code of how to use generative AI to allow a supply chain to change a supplier in a day in a complex world. Imagine a world's leading manufacturer connecting to Argentina cocoa, and that... You know, how do you do banking, regulatory, tax filings, electronic invoicing, be able to flow, commerce, transportation, bills of lading? That can take 100 days. We think we can generate that within a day or two.
And once we're able to do that, the world of supply chain flexibility and experimentation at scale. We'll use our Developer Aviator to generate testing scripts and to generate a code to accelerate. So the next step up is aviators for each of our business clouds: Content, Experience, Developer, and the big one for ITOM is all Level 1 support. We're going GA next quarter, excuse me, in October 2023.4 with our first wave of aviators, and the other one is a Aviator Assist. So Level 1 support will be radicalized. Then the next piece on top of that is we see the opportunity to reinvent search.
So, you know, we have all these graphical user interfaces, so we're gonna be introducing Aviator Search, which goes across all our applications, all our interfaces, to be able to ask questions of the data, right? You know, instead of searching for bicycle, red, this is, "I have a three-mile commute uphill, need bicycle." And then you can go: "Well, I want... You know, tell me about electronic versus push." So it's a whole new way to interface with your data. So, Aviator stack, Business Cloud Aviators, and a new way to do search, and we begin shipping in 23.4, which is October.
Oh, it's exciting!
Yeah.
I'm sure we'll hear a lot more about it at your upcoming conference as well.
Absolutely.
So, I do wanna talk about customer pilots with AI.
Yeah
And maybe what are kind of the early, you know, the early feedback you're getting from clients, 'cause there's a lot of marketing noise out there in AI.
Yeah
Land right now. So how are customers thinking about it, and how does OpenText you know, really differentiate out there with, with AI?
Well, let me just start with, it's real, right? And there's no doubt we're in this, you know, Gartner early, you know, traditional hype cycle, trough of disillusionment, you know, a value realization, then steady state. So there's no doubt there's a just a lot of, you know, bits on the airwaves about it. You know, for us, you know, we see very specific use cases, and customers aren't ready yet to kinda jump in and make a big investment.
Yep.
They see the consumer side, right? So some of the large enterprise players haven't even priced their platform pieces at scale. So what we're hearing from our customers, and it's universal, universal across our customers, they all have an interest in starting a journey, starting experimentation. They all know their data, they all know what they want to achieve, they all know their top three use cases, and they're very hungry to find skills. They're hungry to find a lightweight, low-cost way to experiment. So I think we're gonna get into. We're beyond this phase of what is it? How can it help?
We're sort of in the early adopter, how do I experiment and take my first one or two use cases, you know, make $500,000-$1 million investments before I make that five-year $20 million investment to really radicalize the process? So we're in this interesting phase where customers are eager to experiment, they know where they want to experiment, and they're looking for private, trusted, low-cost ways to kind of prove out a thesis.
Okay.
Yeah.
All right.
That's sort of what we're gearing towards. Our Aviators are lightweight, very directed, and gonna help customers experiment.
Okay. I do wanna keep this interactive and engaging, so if there are questions in the room, we wanna make sure that we're able to get to those. So yeah, raise your hand. We have in the back here.
Thanks very much for taking the question. I just wanted to ask about capital allocation and your de-leveraging plans following your Micro Focus acquisition. I think you've guided to, is it $800 million-$900 million in free cash flow for the year?
Yeah, that's correct, for this year.
I know you tripled the dividend, more than tripled the dividend, so I feel like that kind of eats up all of that free cash flow, right? So I just wanna kinda understand the de-leveraging path going forward. Is it all just driven by EBITDA growth, or will there be a component of debt repayment in there? Kinda how you're thinking about that.
Yeah, sure thing. So, we've committed to getting under 3x leverage over eight quarters. And, we've set a marker of a minimum payment per quarter of $175 million, just a minimum payment. And we've made our, kind of, you know, first two debt pay downs. Our revolver will be clear, clearly fully paid off this quarter, we'll begin to pay down the TLB. So committed to eight quarters to get under 3x leverage. Minimum $175 million debt repayment per quarter. We have a target of $800 million-$900 million of free cash flow this year.
Our capital return strategy has always been taking 20% of our free cash flow, trailing 12 months free cash flow, and return it as a dividend. We didn't change our dividend policy through the acquisition. Don't need to change it, given the high profitability of the business, so we continue to return. As you see, we're gonna grow from $600 some odd million to up to $900 million of free cash flow this year.
Our EBITDA is gonna expand. We're gonna work, we're gonna kinda complete our acquisition expense, and then our North Star goes up significantly with FY 2026 free cash flow of $1.5 billion. By the end of FY 2025, we should be under 3x leverage, minimum payment of $175.
And then we get into a high flexible capital model with high cash flow of $1.5 billion, which will give us the opportunity to do more significant investments in the business. Give us the opportunity to look at, do we continue with the dividend strategy or get back to our buyback? Or continue to do M&A, that would only add to high growth for us in the cloud, right? We are a growth company in the cloud, and if we're gonna do M&A, it's gotta add to our, to our growth strategy of cloud and, and, and ARR. So that's sort of our, our path over the next one to two years. Thank you.
Okay, great. Maybe continuing on, you know, just go back to the AI discussion for a second, and then we'll move on from there. But.
I don't mean to interrupt you. There was one other question in there.
Okay
T hat I didn't get to, which is what differentiates us?
Yeah.
Right? I see four things at least. One is, we own the automation that creates the important data. You know, we're not here to just be AI for AI, right? The AI has to live with our automation. We automate a contract process, we store millions of contracts, we learn from the data, we build better automation. We automate, manage large amounts of data, the better the data, the better the automation. Now comes along, and we see that as operational data, and in some processes, there's Experience, like in commerce and customer interactivity. I call this, like, Operational Data and Experience Data.
The first is we own the automation. The data lives inside of OpenText. When we integrate to Salesforce, I use Salesforce at OpenText. All my quotes, all my contracts, all my invoices live in OpenText, extended ECM. When you, when we integrate, when customers integrate to Salesforce, Google, SAP, others, the data lives in OpenText.
So we own the automation, we own the data. We also have our Private Cloud. Our customers are adamant that they're not gonna donate their data, their secret sauce, into some public domain, and they're not gonna trust these outside-the-firewall models for drug therapies, drug therapeutics, their most corporate sensitive contracts. So I think the third piece is our trusted aspects. Also, you know, it's not getting a lot of talk, but a lot of the early work for us is, you know, how do you apply security and identity into that data?
Because not all employees should be able to see all data that lives on the transactional side, on the automation side or the AI side. So I think trust and security is a differentiator. And we're gonna own our underlying vectorization technology, which is really important. We own our metadata technology, we're gonna own the vectorization technology. Those are things, some of the things that differentiate us.
Okay. Yep. Very clear. Thank you.
Yeah, on the Micro Focus acquisition, you said you're gonna be returning it back to growth. Because I think previously it was kind of a melting ice cube, and you were always rolling up assets, and you know, they were h ave to.
Yeah.
Yep.
Yep, so, we're being very clear as we come into fiscal 2024, after owning the products for five months, that we'll return them to organic growth. We expect to beat the $2.3 billion baseline for the business here in FY 2026. A variety of things. The first is the renewals business. The business was operating in the low 80s. We ended fiscal 2023 in the mid-80s. We'll end FY 2024 in the high 80s, and getting into FY 2025, we'd expect to operate in the 90s. We've done a variety of things. The highest correlation to a customer sat in renewals is a compelling roadmap, right?
Dear customer, where do you wanna get, you know, where dear customer, where you need to go in 2, 3, 4, 5 years, show me the roadmap to get there. So we published a... We had a lot of time to work on our roadmap, and when we closed the acquisition, we published the cloud strategy and cloud deliverables for Micro Focus. Second is their organization design was an account executive got paid on everything that got sold into an account, whether they delivered it or not. So renewals, PS, a cloud, license, whatever got sold into an account, that AE got paid on. We don't work that way.
So we took the renewals out of the field and put it into a centralized team, like we've always done, and the account executive only gets paid on what they sell into an account. So we call that unstacking. We sorta unstacked. So now, that account executive, they got 100 for what value they bring to the account.
We applied our renewals processes, which are world-class and upper quartile to the renewals business. And customers are excited. They like where the company landed. They know who OpenText is. They know how we, how we've rolled through many acquisitions, so the engagement is very high. So first, on getting Micro Focus back to organic growth was the renewals business, and our work is pretty well done.
We're now just going through the renewal cycles on that, and we will see the benefit of that this year in the P&L. The second piece is cloudification of the product line. We did this for many companies we acquired, of being able to transform them from Offc loud to Private Cloud. Documentum being one of the largest ones that we've done. We're doing the same thing for Micro Focus products. ITOM, AMC, ADM, Cybersecurity.
We're Private Cloud experts, and that's a big deal for these product lines, and we've accelerated their SaaS roadmap. So the combination of those things, pipeline, AE stability, client engagement, pipeline of offerings, show a clear sign to returning them to organic growth in fiscal 2024.
You also mentioned that, you're shifting your business model, from the past, and, you know, you're changing it going forward.
Yeah.
Maybe you can... What do you guys look like three to five years from now?
Yep. Yeah, our operating system for growth in the past has been M&A. That's not our new operating system, and that's not our go forward operating system. We purchased Micro Focus to be new paths for organic growth. And so our previous operating system for growth, which served us well, was M&A driven.
Our future operating system for growth is core engineering, product innovation, organic cloud growth. I'd point you to our North Star, which is fiscal 2026. That delivers a company of between $6.2 billion-$6.4 billion in total revenues. Cloud organic revenue growth, 7%-9%. Total company organic growth, up to 4%. Adjusted EBITDA, 38%-40%, and free cash flow yield in the low 20s percent of revenue, or $1.5 billion plus. That's our North Star. That's what the company looks like as we get our organic engine going. Yep.
I guess maybe building on the Micro Focus part of it, I guess how is the cross-sell at this point between.
Sure
The core OpenText and what's coming in with Micro Focus, and how does that kinda build upon the improvement of renewals at this point?
Yeah. So we're taking a very select, a very strategic and select strategy to cross-selling. So it's not 100 products times six domains. The first, the first area of taking some Micro Focus product and going across our install base, the first is enterprise security. So NetIQ and Voltage are now integrated into the Content Suite, Content Cloud, and the Business Network Cloud.
So we finished that integration with 23.3. Our Salesf orce is trained up, and we're bringing basically, identity security, and encryption and tokenization security across the business network and the content world. We think there's a lot of value in being the most secure content provider in the market and the most secure business network, with the combo of Voltage and NetIQ, identity security, as well as tokenization.
The second piece of key integration, which means cross-selling, is taking our AI Aviator platform and having it integrate into each of our market domains. So the Aviator stack of IDOL, of Vertica, and Magellan working with Content, working with Experience, working with the Business Network. And that work will be available in 23.4, in October. So, the first was just get our strategy, get our products integrated, get the release in the market, get our Salesforce trained up, and we're basically 30 days from all of that, and then we'll start selling and winning.
Okay.
Yep.
Maybe going back to earlier comments you had on the growth algorithm. You did talk about security business, you did talk about the MSP business, and both of those from, I think, largely from acquisitions you've made. How are you thinking about, I guess, first of all, how those investments have been post-acquisition? Secondarily, how are you viewing them as part of the growth math going forward?
Sure. I think maybe one piece I would like to touch a little more base on, which I think is in the heart of the question, is our SMB business.
Yeah.
And so we acquired Carbonite, which is really two companies, Carbonite and Webroot. We acquired Zix, which was really, like, three companies, CloudAlly being the one of the larger pieces inside of Zix. So that's given us a really nice base to go after the mid-market. And I don't think we can reach our full potential at OpenText in pursuing the $200 billion TAM if we don't have a mid-market offering.
Going into the mid-market is not just about your product, but how you get there, right? And part of the acquisition was we also acquired a platform. The best way to describe it is like a salesforce.com for mid-market, right? We've built on- we've built, these companies had built, and we've now modernized it, a selling platform for partners. A partner comes to register, they're able to transact. We're able to see, their, that partner's customer's, usage, and that's how the MSP model sort of works. We call the platform internally our El Dorado platform, right? It has a name. It's called the El Dorado platform, the City of Gold.
So we've taken those platforms, we've modernized it into El Dorado, and we're very excited. We're excited to bring. So we've modernized the platform, El Dorado. We're excited to bring more product into it now. We think Voltage has an opportunity there. Debricked, a piece of technology from Micro Focus, our SaaS core platform for content management, kind of Box in the mid-market, will go through El Dorado as well.
So we've been at this for two years. You know, we've been at the enterprise for thirty-two years. We've been in the mid-market for roughly two to three years. And I remain just as optimistic here. Got a great team, got great building blocks, we have a great new platform. It's gonna contribute to our growth, and we're still learning as we go.
Yeah. So we only have about five minutes left here, and, you know, I guess it wouldn't be a tech conference if we didn't ask about what's going on in the macro today and w hat's going on in the deal environment. So, I'll just.
That's right.
I would just leave it there. Like, what's going on out there? How's the macro deal cycles? Just how are you kind of viewing where customer budgets are today?
Yeah, we've been an outlier in how we answer this.
Yeah.
You know, we answer it the following way: that the market and the responses are uneven. It's uneven, right? We're going from cloud growth of, like, 1.5%- 9%. So we're kind of going from, like, little local growth to planetary growth in our Cloud, while other companies are going from galactic growth down to interplanetary growth. So it's uneven, and for us, the demand for our product of information consolidation, information security, is our improved execution, our new growth operating system, our very rich product pipeline.
We're growing and we see our growth expanding. So, we're in highly regulated markets which have dollars to spend. We're in infrastructure places that have dollars to spend. We have a rich install base looking to consolidate and modernize. We have new value streams to unlock their data platforms that they've invested in.
So for OpenText, we factor this into our North Star of FY 20 26 and into our FY 20 24 plan, that's producing the growth numbers that you see. So, we're a bit of an outlier on how we, you know, we talk about. And we're monitoring, of course, the macro, but it's uneven, and for us, it continues to be a bit of a growth driver.
Okay. I do want to ask about the, again, like, Micro Focus financial integration. You do have the North Star out there for fiscal 2026. I guess, how should we think about how much is being put to work to help modernize the portfolio, help Cloudify it, help SaaSify it? And what should kind of the glide path look like to kind of reach those EBITDA and free cash flow targets that you've talked about?
Yeah, fiscal 2024 is a big year for us, right? As you can see, it's y ou know, we're done on the people side: benefits, comp, compensation. All, all that was, was integrated very early on. We started fiscal 2024 united as one company.
Yeah.
You know, our year started July 1. It's been a very high energy, high engagement, very low turnover, very rich, engagement environment, for July 1. We still have our systems to integrate and, for us, it's easy. The destination is our mothership systems, right? We thank Micro Focus for their $1.5 billion investment in their systems, and we're gonna throw them away. And they're just gonna integrate into the OpenText platforms. That's how we integrate and have scaled. So this year is a little higher cash outlay.
As we do our legal entity rationalization, complete our systems work, and we've reprioritized our R&D budget. You know, we're between 14%-16% this year. That's you know, rough math, depending where your estimate is. In your bull case, it might be a little higher, but call it roughly $1 billion investment, a $1 billion investment in R&D this year.
So they didn't have a spending problem. They didn't have a spending challenge, they had a prioritization challenge. So our plan is based on a very significant reprioritization that we've done of that 14%-16% R&D investment. So we can deliver all our objectives, Wave One of Aviators, with the 14%-16% R&D spend.
Okay. Only have a couple of minutes left, so I want to see if there's any questions in the room here, and make sure we can get to them before and make sure we're getting to them. No. I do want to ask on, I think you made an acquisition a couple of weeks ago with KineMatik. I guess, what does that bring to the portfolio, and I guess, how does this kind of change your appetite with M&A? I know you're digesting Micro Focus, so that's probably still very top of mind.
Sure.
Like, any kind of view on how you're viewing M&A today?
Yeah, I mean, KineMatik is a company that, well, we call them a SolEx partner. They built their solution on top of our APIs, and what they do is content and collaboration management for regulated manufacturing. That's what they do. Whether it's biotech, whether it's chip and micro technologies, nuclear energy, they do collaboration management, content management for that regulated manufacturing. You know, how do you interface to a government and provide all the necessary, you know, regs and processes?
How do you have certain manufacturing techniques in QMS? So they built a wonderful solution. We had won a couple customers together. They were a small sales organization, ready to go in the Private Cloud, and so we were able to purchase them, and we're going to put them on a global stage.
Okay.
We're going to put them on a global stage for biotech, microprocessing, and in the energy industry. We'll drive cloud organic growth from that. So, yes, we are open to those very kind of focused strategic acquisitions that will be accretive to revenue and particularly ARR.
Okay.
Right.
Yep. Final, final question here. Your conference coming up next month, how should we be thinking about that, expectations going into it, and yeah, what's the early preview look like there?
Yeah, I think, I think we have a press release out this morning. If it's not, it'll be out soon, just outlining the conference and our speakers. Look, we have a very applied AI conference, and it's gonna be two days to talk about, you know, applied AI techniques and technologies into the enterprise. We think, you know, biotech is one of the big areas where we all should be living longer.
Education, we all should be getting smarter. Climate, top of the list. So we're gonna have the UN leader for sustainability goals in AI. We have David Wallace-Wells speak about climate and AI. We're gonna have a couple of AI experts of how to get started. So we're in full preparing mode. We'll, we'll be announcing our first Aviators, 23.4. We'll be providing demonstrations, customers, industry luminaries. We'll introduce our pricing, in the conference as well. And, it's gonna be exciting a few days.
Great! Well, we're looking forward to it. Mark, want to thank you so much for being here today.
Thank you.
And want to thank everybody in the room for attending as well.
Thank you very much. Thank you. Thanks.