Good afternoon, ladies and gentlemen. Thank you for joining Atlassian's earnings conference call for the third quarter of fiscal 2018. As a reminder, this conference call is being recorded and will be available for replay from the investor relations section of Atlassian's website following this call. I will now hand the call over to Ian Lee, Atlassian's Head of Investor Relations.
Good afternoon and welcome to Atlassian's third quarter fiscal 2018 earnings conference call. On the call today we have Atlassian's co-founders and CEOs, Scott Farquhar and Mike Cannon-Brookes, our Chief Financial Officer, James Beer, and our President, Jay Simons. Earlier today, we issued a press release and a shareholder letter with our financial results and commentary for our third quarter of fiscal year 2018. These items are also posted on the investor relations section of Atlassian's website at investors.atlassian.com. On our IR website, there's also an accompanying presentation and data sheet available. We'll make some brief opening remarks and then spend the rest of the call on Q&A. Statements made on this call include forward-looking statements.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management's beliefs and assumptions only as of date such statements are made. Further information on these and other factors that could affect the company's financial results, including filings we make with the Securities and Exchange Commission from time to time, including the section titled Risk Factors in our most recent Forms 20-F and 6-K. In addition, during today's call, we'll discuss non-IFRS financial measures. These non-IFRS financial measures are an addition to, and a not a substitute for, or superior to measures of financial performance prepared in accordance with IFRS.
There are a number of limitations related to the use of these non-IFRS financial measures versus the nearest IFRS equivalents, they may be different from non-IFRS measures used by other companies. A reconciliation between IFRS and non-IFRS financial measures is available in our earnings release, our shareholder letter, and our updated investor data sheet on our IR website. I will now turn the call over to Mike for his brief opening remarks before we move to Q&A.
Good afternoon. Thanks everyone for joining today. We had a great start to 2018. This quarter, we grew revenue 40% year-over-year and generated over $86 million of free cash flow. We also added 6,587 net new customers, the most we've ever added in a single quarter, and a big step towards our goal of serving the Fortune 500,000. In February, we kicked off the Atlassian Team Tour, where we've been unveiling product updates, sharing the latest in team practices, and discussing the future of teamwork with almost 3,000 users and partners. We've almost completed our tour across 11 cities worldwide, and it's been fantastic to speak directly to customers and hear about the different ways teams are using our products. We'll be making our final stop in Tokyo on May the 23rd. This quarter, we announced the opening of our newest office in Bengaluru, India.
This new location will add to our world-class R&D and customer support centers around the world. As part of our earnings today, we announced two exciting updates to our board of directors. First, we are pleased to announce that Shona Brown has been appointed as the new chair of the board. Shona has been a board member since November 2015 and has been a great mentor to Scott and myself. We are also excited to welcome Sasan Goodarzi of Intuit to our board. Sasan brings with him almost 15 years of experience driving product leadership and growth at Intuit and will be a valuable addition to the board. Finally, we're pleased to have our new CFO, James Beer, on the call with us today. James joined the team in February and will play an important role for Atlassian as we go past $1 billion in annual revenue.
With that, I'll pass the call to the operator for Q&A.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question comes from Alex Kurtz with KeyBanc Capital Markets. Please go ahead.
Yeah, thanks for taking the question, guys. Just Stride, any kind of adoption trends you saw in the quarter? I know it's a new product, and maybe how you see that playing out over the next six months or so.
Thanks, Alex. It's Scott here. Just a reminder for everyone on the call, Stride's our communications product that we built entirely from the ground up to put voice, video, and team chat into one product. As we know, the communication space is this sort of large and nascent space. With Stride, we're still in the early learning mode with our customers, and we don't have good adoption metrics, but we're getting a lot of feedback from our early users.
This is James. I would just add that I don't expect Stride to be a material revenue driver in fiscal 2019.
All right. Thanks, guys.
Okay. The next question comes from Heather Bellini with Goldman Sachs. Please go ahead.
Hi. Thank you. I was just wondering if you could talk a little bit about trends on the deferred revenue side and deal signings. I was wondering if there's anything you could share with us, kind of about the linearity of deferreds in the quarter, and if there's anything you could share with us about how customers maybe might be seeing the price increase in the market. Thank you.
Well, let me start with that. In terms of the deferred revenue, obviously I'm sure you know about the price increases that we announced in August of last year. Some of our customers took advantage to pull forward either their maintenance renewals, in some instances, new business, upgrade business and so forth. So that benefited Q1 and Q2.
So we saw the other side of that effect in Q3, as we saw that pull forward revenue that otherwise would've played out in Q3. The other thing I would mention particularly about Q3 deferred revenue and so forth, is of course, this was the first full quarter of Trello. We've now lapped the acquisition that occurred midway through Q3 this time last year.
anything
In terms of price increases, we very much feel as though the effect is on track as we expected. That's going along very much as planned.
James, could I just ask a follow-up, if I may, about Q4 deferred revenue trends? If the early renewal slightly impacted Q3, should we be expecting that to also have a seasonal impact on Q4 just as we think about setting our models?
Well, I think that pull forward effect is likely to decline as the quarters go by, so I wouldn't want to overstate the effect that you'll likely see in Q4 there. No, I think that will be more in line, if you will, in terms of the run rate around deferred revenue. One of the other factors that we have to think through is obviously the cloud business is growing very fast. You have to think about the mix of whether our customers are electing the annual subscriptions or the monthly subscriptions.
Okay, great. Anything you could share with us on what they are electing? What's the trend in the annual versus monthly?
Well, yeah, it moves around. We're pleased with the response to both. I think what's important is that we've got options out there for our customers. We're really addressing their needs in a variety of different ways.
Thanks. Thank you very much.
Okay, the next question comes from Bhavan Suri with William Blair. Please go ahead.
Hey, guys. Thanks for taking my question. I guess I was going to touch a little bit on Service Desk here. As you've seen customers and partners sort of deploy it, and it's now been a little while, it's been a fast-growing product for a while. Some color and sort of the sizes of deals and sort of, are you starting to see them expand? Touching on a couple cases where we've chatted with partners where you see coexistence with ServiceNow, just sort of an idea of how that exists. Ultimately, do you view that as a potential replacement over time?
Yeah. Hi, Bhavan. It's Mike, I can take that one. As we've said before, JSD, it's growing very quickly. We're very excited about its opportunities in all sorts of fashions inside of enterprises. We do see the growth is both in small and large accounts. Obviously, in the larger accounts, there's a potential to go further afield because just the size of the company is greater, the amount of service opportunities between teams is larger. We do see a correlation with larger businesses obviously moving it into other functions outside of IT. It moves into finance, HR, legal, lots of different teams. Interactive marketing is a particularly popular one. Any team that tries to help other teams as a part of their team's job.
We've disclosed more than 25,000 organizations use Jira Service Desk, and it continues to be one of our largest products alongside Jira Software and Confluence. We do see ServiceNow. We do come up against it occasionally. By far the largest is attacking greenfield opportunities. As a reminder, they target kind of the Forbes Global 2000, and we're the Fortune 500,000. More often than not, you see very happy coexistence in a lot of different ways. They probably see us far more than we see them, I would suspect.
Got it. A quick thought just on product investment. You obviously talked about the new location in Bengaluru. As you look at product investment, R&D spend, I guess, how should we think about sort of the split between sort of optimizing, enhancing existing products and sort of newer stuff you might be working on but maybe you haven't sort of built out? Either gaps in existing product or brand new sort of sets, like Stride. What would that mix be, and how do you think about that sort of on a long term? Thank you.
Bhavan, it's Scott here. One of the things we're really proud of is our investment in R&D and turning that into valuable products for our customers, and we've done that for 15 years, that's not going to change. We're going to continue to invest in R&D because that drives our business more than other competitors or other companies that drive more sales-driven approach. We really lead with R&D, that's not going to change. The relative amount we spend on optimizing and enhancing changes from year to year. I'd say this year with some of our moves to AWS, we've probably spent a bit more on kind of internal re-architecting, which has shown more sort of infrastructure benefits for our customers, reliability, speed, latency, we can put data centers close to our customers, scale. Those types of benefits is what our customers get from those infrastructure investments.
Now that that's happened, we'll be doing more investments in sort of more front-facing user features. It changes from year to year as we listen to customer needs.
Got it. That's really helpful, guys. Thanks so much for taking my questions.
The next question comes from George Iwanyc with Oppenheimer. Please go ahead.
Thank you for taking my question. Impressive new customer additions. Can you give us a sense of where they're coming from, how much from Jira and other products?
Hey, George, this is Jay. We don't break out individual products. I think the story of the customer count was just the business overall was firing on all cylinders. I think especially on the cloud side, all core cloud products drove strong customer adds.
Remember the number in the quarter, number between quarters are going to move around a bit from quarter to quarter, obviously we're super proud of the result of both the adds and the quarter and just the future expansion opportunity that gives us. Remember, it's still a drop in the bucket on the way to the Fortune 500,000, which is what we're chasing.
Okay. Trello looks like it's continuing to see good adoption with new users. Can you give us a sense about how the cross-selling is going with that, or have you started to do that and the monetization opportunities?
Sure. I can take that one down here in Sydney. As we mentioned in the shareholder letter, we just passed the one-year mark of the closing of the acquisition of Trello. I can honestly say that no one on the team has been more excited than we are now about Trello. We continue to get more excited quarter on quarter about the potential and opportunities of Trello. As we've said a number of times now, our focus to date has been just allowing it to continue its impressive momentum and user growth. The user base continues to grow quickly as Trello spreads around the world. With regards to monetization, we certainly aren't rushing into cross-selling it to our existing base. We're looking to do what makes the most sense for the businesses.
You can expect to see it continue to come closer and closer to the family as it continues to grow by itself. We previously mentioned that we expect Trello to contribute $20 million of the revenue in FY 2018. We expect to meet or exceed that at the moment, we're well on target. We haven't been standing still with Trello, I suppose, is the other important point to make. As we noticed last quarter, we introduced Trello into the Japanese market, as well as partnerships with a whole series of local companies. We continued to use our strengths at Atlassian to take Trello to places it couldn't have got to by itself. As we mentioned, we passed 1 million users now in four different countries individually. In the U.S., Brazil, U.K. and France.
I think Trello demonstrates our ability to successfully do acquisitions and to grow the product family, to maintain those acquisitions and their momentum. We'll continue to do what we've done historically, which is to bring a family closer together over time.
All right. Last question from me. On the tax rate, how should we look at that as we look forward to FY 2019?
Well, in terms of the tax rate, I think Murray has probably described to you in the past how, under IFRS, our tax rate is calculated in each of the geographic entities in which we operate. Based on the mix of income and the mix of deductions that are appropriate to take in each of those geographic entities, that can move the rate around from quarter to quarter, more so than you would see under the GAAP approach. That was, in fact, how things played out in Q3. Q3 benefited. I would expect that to somewhat reverse out in Q4. I'm comfortable with what I've seen in terms of the overall tax rate for fiscal year 18. We don't guide yet for fiscal 19. We'll get back to you with that, with more color around that story in a quarter or so's time.
All right. Thank you.
Okay. The next question comes from Gregg Moskowitz with Cowen and Company. Please go ahead.
Okay. Thank you very much, and apologies for the background noise. Jay, how did data center subscription do this quarter relative to your expectations?
Hey, Gregg. I hope you're on hands-free. It was great. We're happy with the performance. Performed in line with what we expected, continues to be a really important and large expansion opportunity for us into bigger enterprise organizations on the server side. I think nothing special really to highlight outside of there's really good momentum in the data center business. It's still an early product line with, I think, a lot of room for growth, and we're pleased with how it performed.
Okay. Thanks. James, you spoke about pull forward into Q1 and Q2, and the company had noted that previously as well. Since this was the first quarter with the maintenance price increase in effect, just wondering if you saw any change with respect to in-period maintenance renewal rates?
No, in terms of renewal rates, again, we're very comfortable with the customer reaction to the price increase initiatives generally. In Q3, obviously, yes, the new maintenance rates went into effect at the start of the quarter. Obviously others had, in essence, locked in that lower pricing. We'll have those older prices in place for a number of quarters for a portion of our customer base.
Okay. Thank you.
Okay. The next question comes from Sanjit Singh with Morgan Stanley. Please go ahead.
Thank you for taking the question, and welcome, James. Nice to have you on board. Maybe I wanted to start off a little bit on some of the model dynamics. James, I wonder if you can remind us, as we move more to subscription, I think 80% of new product sales are now cloud. What impact does that have on the model, particularly when we're thinking about top-line revenue growth?
Well, as we continue to develop very strong momentum around cloud, but not only cloud, as Jay was just mentioning, the data center products as well. They're both accounted for in the subscription line. We're seeing very strong growth rates there.
The other side of that coin is you would expect that our server business that's sold on a license and annual maintenance basis is not growing at that same pace. It's growing nicely. And you particularly see that in our statistics around license revenue. Those were in the single-digit growth numbers this quarter. Just a very clear illustration when you contrast that growth rate to subscription, how customers are moving increasingly to the cloud. In terms of the dynamic, in terms of revenue recognition, obviously subscription taken ratably over the period of the subscription length, whereas that server business has a component, the license component that's taken up front. As that license revenue component is growing at a significantly lesser rate than the subscription, you'll see the overall model trending towards, in essence, a more ratable, predictable type structure.
That's helpful. Maybe in terms of Mike and Scott, just sort of maybe a high-level product question for you. In that project management space, particularly among business teams, whether it's project management or task prioritization, there definitely seems to be just sort of a lot of options for users. What is the central value proposition that you guys are deriving to get customers to use Atlassian versus what seems to be a ton of options out there in the market? Is it the integration back to core Jira, or what's going to funnel that demand onto the Atlassian platform?
Yeah. Good day, mate. I can take that. It's a bit more of a philosophical question than we normally get on earnings calls. There's been project management software for the last 25 years, I would expect there'll continue to be project management software for the next 25 years. Obviously, with Trello and with Jira, specifically Jira Software, and even a little bit with Confluence, you could say that we manage projects in a lot of different ways for teams of knowledge workers, depending on the types of projects that they are running. The more structured your project is, the more you have a larger number of people, very defined workflows, and structured content that you need, the more Jira Software, and to some extent, Jira Service Desk and Jira Core, come to help your project succeed.
The biggest difference between Jira Software and Trello would be around the structuring and the control elements that you get. The larger a business gets, the more structure and control it tends to need in the way that it runs its projects. At the core, though, of both Jira Software and Trello, would be the notion of workflow. It's not as much about managing tasks as you would do as an individual in a task management application you might have on your phone, which is more like to-do items, buy the milk, get the laundry, you tick them off, they're done or not done. Once you get into a team of people collaborating, you need to have great collaboration fundamentals, which Atlassian has baked into our DNA in terms of exchanging information, bringing people into the project, making sure the right people are aware of the right information.
Secondly, you need to have workflow capabilities to be able to move work around, to understand the core work items, the things that need to be done, who's currently responsible for doing them, then connect out, as we do with all of our integrations and marketplace add-ons, to other applications where parts of the work may live. If you look at Jira Software, it connects to probably 50 or more different applications that might store source code or builds or documents or whatever else there is. That's sort of the way that we see project management. Fundamentally, it's about workflow, with the difference with Jira Software and Trello being around structured versus unstructured.
That's super helpful. Maybe the last one for me. In terms of coming off of Project Vertigo, which seems to be pretty successful, there used to be a sort of user cap on your cloud products. I think it was around 2,000 users. With that lid off, in essence, was there any sort of pent-up demand effect that kind of maybe contextualized the strong net new customer add performance, which seemed to come from cloud? Was that sort of the removal of that user limit restriction resulting in any sort of pent-up demand that caused that strong net new customer add performance this quarter?
Sanjit, it's Scott here. We haven't officially removed that 2,000 user limit. We are working with a select number of customers on that, but it's not something that we've lifted broadly. I can't answer that. There is demand from large customers to move. There's a lot of things that they want in that process. Sorry, I couldn't answer that there's a huge pent-up demand. We'll see customers transition from server to cloud over a long period of time. As just a reminder, we're pretty agnostic if people use our server-based products or our cloud-based products. We have a great server and data center business that serves from very small customers to very large customers behind the firewall. Our cloud business will serve very small to very large customers in the cloud. We're really pretty agnostic about that.
Appreciate it. Thank you for your time, guys.
The next question comes from Michael Turits with Raymond James. Please go ahead.
Hey. Good evening, everybody. James, welcome to Atlassian and the calls, great to talk to you again after years of having talked to you since Symantec, welcome.
Yeah. Thank you, Michael.
One question for you on margins. Margins and EPS guide was just slightly below for next quarter. This was a really great year for margin expansion, any thoughts on why we might have been a little bit below The Street? At least philosophically, any thoughts on margin expansion in the next year with The Street looking for just above one point of growth or expansion?
Well, in terms of the current year, I'd say a couple of things. We did identify some additional opportunities to spend against our various product investment areas. Second thing I'd mention is that we're particularly pleased with the pace with which we're attracting top talent to both our Bengaluru office across multiple functions and the Mountain View office as well. I'm excited about that. In terms of the longer term, as we think about margins, obviously last year, I think at Investor Day, the company committed to continuing to have modest increases in both operating and free cash flow margins over time. We're very fortunate to have such strong market opportunities in front of us, excellent R&D capabilities. We will have more opportunities to invest in ways that will drive very strong returns to our shareholders.
What we'll do is back that up with a robust process of driving accountability within Atlassian for spending wisely. I think that will be a good outcome for shareholders.
Got it. Thanks. I think for Jay, can you give us an update really on how things are going with the channel? Any changes there, whatever particular partners you want to talk about, but including some of the resellers which seem to be expanding? How they are working with some of the personnel inside, including technical account managers, to drive some of the larger deals.
Yeah. Hey, Michael. No material changes. Channel, as you know, has been an important part of the model, important part of Atlassian for the better part of the past decade. Continues to be so, both in terms of reaching new markets geographically, new markets that we're targeting, like as an example, with Jira Service Desk and sort of like the IT landscape, as well as just reaching new customers and then expanding existing ones. They do over-index around larger enterprises, in part because the complexity of expansion, the opportunity for the services and engagement that they offer is larger. I had the opportunity to meet a number of them during the Atlassian Team Tour event that we highlighted. Everyone I spoke with shared positive signals about both the current business and the opportunities that they see in front of them. I would just say all things on it.
Great. Thanks very much.
Okay. The next question comes from Keith Bachman with Bank of Montreal. Please go ahead.
Hi. Many thanks. I also wanted to ask two questions. I was hoping you could give us a little bit of sense about the puts and takes involved in the June quarter guidance. To a previous comment, you said you felt like the pricing increase had manifested itself in the December and March quarters. If I look at the guidance for June, though, you're guiding to even at the top end, 5% sequential growth. In the last two years, June 2016 and June 2017, you grew 8% and 9% sequentially. I was just hoping you could go through what are some of the puts and takes we should consider as we're running through our models related to the June quarter. Thank you. I have a follow-up.
Yeah. Well, as you think about the June quarter, I think it's important to recall that we've now lapped Trello year-over-year. That effect will be-
Yeah, sorry. My comments were sequential, Trello wouldn't really impact that.
In terms of the sequential process, I think, again, you'll see there, similar to one of the answers I gave a little earlier, as you've got cloud and data center continuing to grow very much, but fast, the license revenue line obviously growing at a much, much lower rate than that. You'll see the revenue model orientation become more ratable. The deferred revenue component, in essence, rises somewhat relative to the recognized revenue component. Underlying this, we continue to have strong demand across the product set, and I'm very comfortable with the fundamentals of the top line.
Okay. Thank you. My follow-up question does relate to pricing. You've had a few sets of price increases depending on the category, subscription, maintenance, license, et cetera. At the Analyst Day last year, you talked about you envision annual price increases. I just wanted to see if, is that still the way we should be thinking about the Atlassian model as we look out over the next couple of years, is that price increases will be an annual event? Thank you.
Yeah. One of the things with my sort of outsider lens on, if you will, that I've been really struck by is the remarkable ratio in terms of price to value that Atlassian offers right across its product set. That obviously underpins what has been said in the last year or so about a philosophy of being able to apply annual price increases on the server and cloud side of our businesses. Of course, we'll always be very thoughtful about current market conditions and so forth, but I think that is a part of the model that you should expect to see going forward.
Okay. Many thanks. Congratulations.
Okay. The next question comes from Adam Holt with MoffettNathanson. Please go ahead.
Hi, everyone. I'll also echo the congratulations and welcome for James. James, it's also been a long time, and I'm glad to have you back. Absolutely. I had two questions. In the shareholder letter, you had some nice language and some numbers around Confluence, which I don't think I'd seen for a while, but a lot of detail around how you're extending outside of the core IT organization. I was hoping maybe you could touch on, in general, how the efforts have been to extend outside of IT and really monetize that non-IT opportunity. I had a follow-up for James.
Yeah. Good, mate, I can talk to that one. Look, Confluence has continued to be one of the great success stories of Atlassian over the last decade. Passing 40,000 customers individually, obviously continues to be our second biggest product and grows strongly. It was a good moment to celebrate all the achievements of Confluence in the cloud server and data center realms. It is certainly one of the products that pushes the furthest and the fastest outside of technology teams, and it's continued to do so in terms of marketing, finance, sales, all of the other functions inside of a company. It continues to be our long-term trend as a business, as we highlight in data, in customer examples, and as you see in some of the Confluence parts of the shareholder letter.
We continue to land strongly in software, in IT departments, in companies, and continue to grow across the enterprise into all teams. Alongside that, continuing to land also a little bit more broadly. If you think of something like Trello, it lands sort of all over the map, even going as far as home teams and different forms of cross-company collaboration. We continue to see that as an important part of our model, is the strength to be able to land in certain types of teams, and then having the product depth and breadth to be able to expand across an organization to all types of teams.
For James, the perpetual number, the license number in the quarter was a little shy of consensus. I wanted to know, did you all hit your number internally in the quarter? How should we think about the quarter-on-quarter in license, so we, as an analyst community, make sure that we get that right going into the next quarter, so we're more in line with your thinking? Thanks.
On the perpetual license line, also just going back to one of my earlier answers, as we think about the pull forward effect that we saw of activity into the first half of the year as customers look to get ahead of price increases. Certainly the primary effect there would have been around customers renewing maintenance contracts and so forth, but there was also a certain element of customers bringing forward new purchases, upgrades to current installations and so forth. Obviously, that would have helped the license revenue line in the first half of the year. That dragged some of that activity out of Q3, and to some effect, I think we'll see that in Q4 as well, although I would expect that effect to dampen out as time goes by.
Great. Thank you.
The next question comes from John DiFucci with Jefferies. Please go ahead.
Hey, guys. Zach Lountzis for John. Jay, there was some helpful comments you gave on the data center trends earlier. Within there, are there any updates on how Atlassian Stack is doing? I remember a few quarters ago you said over 50% of customers with 500 or more users have three or more products, which I guess helped drive the creation of this discounted suite. What are your thoughts on offering something similar for cloud specifically? Thanks.
Yeah. Hey, Zach. You shouldn't consider Stack to be a material driver of data center growth. It's really offered as a simpler packaging of multiple products at a nominal discount for a company that's going to basically swallow the blue pill and take all of them all at once. It's going to be rare, but it's there for customers to remove friction if they want to do that, to basically do it easier. I think the more common pattern is a customer is going to adopt Jira data center when they're ready to do it, Confluence data center when they're ready to do it, Jira Service Desk data center when they're ready to do it, and those might be at different times. It's there.
It removes friction for them when they want to do it, I'd focus sort of overall on the growth of the data center business on whole.
Okay.
Which is good.
Sure. Thank you.
Okay. Again, if you have a question, please press star then one. The next question comes from Pat Walravens with JMP Securities. Please go ahead.
Oh, great. Thank you for taking the question. I appreciate it. James, welcome, and forgive me for beating a dead horse here, and it's just too much to say, but should we expect the perpetual license rate to decelerate? From Q3 into Q4?
Well, we don't get that granular in terms of the guidance thought process. I think the core trend here is that more and more of our customers are choosing cloud as the way in which they want to consume our products. I would expect that that will continue. When you add to that the fact that many of our larger customers on the server side of our business are choosing to deploy our data center products, and both data center and cloud are a part of the subscription revenue line, then I think it's reasonable to infer that there's going to be a lesser proportion as time goes by, going through the license revenue line. That said, though, that's still a very important and robust part of our business.
That's very helpful. Thank you. Scott, bigger picture, I just noticed in the letter you talk about how you're transitioning from the Chair of the Board role, and I was super impressed by the academic background of your successor, but I was just wondering why you feel like this is the time for that.
Yes, Pat, look, Mike and I have always surrounded ourselves with the best people we can in order to grow this business, whether that is the Board, and I think we have a very impressive Board for all of our Board members, or the management team we have. We can't do this alone, and we really want the best people in the world to help us along that. Having Shona as the Chair will free up my time to be more detailed and involved in the business, also provide the opportunity for Mike and I to sort of enhance our learning from her and for her to have a better opportunity to help out the business. I'm very excited by that. Mike and I have never sort of coveted the Chair position from any sort of ego perspective or anything like that.
It's really about just getting the right people around us to make a successful company.
Okay, great. Thank you very much.
Okay, this concludes our question and answer session. I would like to turn the conference back over to the management team for any closing remarks.
It's Scott here. I just want to say thanks, everyone, for joining the call, and we appreciate your time and look forward to keeping you updated on our progress.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.