Twilio Inc. (NYSE:TWLO) Goldman Sachs Communacopia & Technology Conference Call September 7, 2023 1:50 PM ET

Company Participants

Jeff Lawson - Co-Founder, Chief Executive Officer and Board Chair

Conference Call Participants

Kasthuri Rangan - Goldman Sachs Group, Inc.

Kasthuri Rangan

First of all, how amazing is this conference? Have you guys been day one, day two, day three is the best. Day three is the best, right? Actually, it is absolutely the best.

Jeff Lawson

You can tell the energy is really high.

Kasthuri Rangan

Well, that doesn't say because we have a fairly quiet audience even when this room is packed, there's no questions, et cetera. So – but the quality of the company is the content has been just off the charts. Jeff, thank you so much for making it to the conference. Really appreciate it.

Question-and-Answer Session

Q - Kasthuri Rangan

You were here last year, and I asked this question, what is the long-term vision of the company? And you haven't really had a very compelling answer. I wonder if that answer has changed. So what is your – what are your goals for the company? What is the strategy? How do you want this company to look like five years from now?

Jeff Lawson

So the goal of the company is unchanged, right? We see the ability for technology to completely change the way companies go about building their relationships with their customers. And now I'd say if anything, that vision for what we can accomplish has been supercharged by all the progress we've seen in generative AI.

So at our conference, just two weeks ago, we really unveiled our vision for how we think GenAI, plus the CDP. So taking all the understanding a company has about its customer as told by all the data pulled into profiles of customers and then audiences of similar customers. And our GenAI can take that and turn it into more powerful, more effective customer engagement and customer communications through every step of the customer journey.

And the end result of combining customer data communications and AI, we believe is going to be companies will be able to build 10x better customer relationships at one-tenth of the cost of today. When you think about these use cases, right, how would that work?

Well, is GenAI able to take a really, like all the data about the customer base that a company has and unlock a 10x more performant marketer? Absolutely, easily. And we laid out that vision, like AI can actually automatically create marketing journeys for the marketer.

In fact, we launched a product called Generative Journeys. You describe to the AI, you say create a journey for customers who haven't bought anything in 30 days and have a thing in their shopping cart and but have bought something at full price at some point in the last year and the favorite color is purple, whatever. And then try to sell them what – and you just describe it like that in English, and it will draw the whole journey, like all the boxes and all the – do this, wait three days, do that. If they did this, do that. It will automatically select the customers that are the best candidates for that campaign. And you just click approve and it starts, oh, and it writes emails too. I mean, this is all possible.

And then once you say like, okay, that's possible. This is literally something we announced two weeks ago. Once it's that possible, once you go from, oh, it takes a minute to do this journey that before it would have been probably weeks going around to the, okay, well, I'll give you the data people to give me the feet of customers, then I got to go to the creative writers, the copywriters, and then the design people and all that. Now you can just do it in like a minute.

Then you start to ask questions of like, okay, well, what's the limiter on how many of those you can have running, right? Because it used to be people's time was the limiter on how many campaigns you could be running at one time. And now you're like, oh, by the way, we also announced a product called Generative Audiences.

So our predictive audiences, where it would basically say, you wake up in the morning and it says, “Hey, we analyzed – AI had analyzed your – all your customer data and realized that there's a propensity for these customers who bought this product and this and this to go buy that product, they're 40% more likely to buy that product, do you want me to create a journey on that?

Yes, okay, Generative Journey created. Like so its something like, okay, AI can have the ideas for the campaigns. AI can actually execute the campaigns. AI can see the full end-to-end of like is this campaign generating sales? And if you feed it gross profit data, is it generating profit? And if yes, great. Do more of it. If no, slow down or stop it. Now you're like, the limiter is if a company typically would have maybe 100 of these campaigns running at a time because human beings had to go to all this work.

In the future, companies going to have millions of these campaigns running simultaneously. The millions of simultaneous campaigns that are constantly coming up and being created and killed and created and killed and AI, measuring their effectiveness and the human beings are going to look at charts and they're going to test hypotheses. If I feed the AI, this data source, does it get better or worse? And so it becomes data science, back to the marketers, right?

So when you ask the question, can the marketing team get 10x better? Minimally, like 100x better is probably more likely. And can they do that at an attempt to cost before easily, right? So that's the vision we put out there. And the same thing, by the way, goes for service and support and presales and a lot of other functions of the company where you're just going to get these 10x outcomes at a tenth of the cost. That's the power of combining the data that a company has about its customer with generative and predictive AI and then all of the channels to go and deliver on that promise to the end customer.

Kasthuri Rangan

Got it. Two things that come to mind, Jeff. One is, doesn't this lower the barrier to be in AI-driven applications? Because you have data, Salesforce has data, ZoomInfo has data, Adobe has data. All of a sudden, we've gone from these stovepipes of very domain-specific. I do creative really, really well. I do sales and you do CDP and Flex really, really well, too.

Oh, okay. So AI is helping us get into the data and draw these deep insights. So you deliver your spiel, you sound like a marketing automation company, right? So, pros and cons. Does it not lower the barrier for anybody to get in and do this? And what is so unique about the data that Twilio has that [feels like a win to you] (ph)?

Jeff Lawson

If you think about it, like the core of that story is data and the channels and like everything else is like largely automation and a few dashboards. And so what it really comes down to is if every company has access to the same language models, and the language model space is commoditizing rapidly. So I think everyone will have access to language models. That's a no-brainer.

Kasthuri Rangan

Yes.

Jeff Lawson

And so what it comes down to is what proprietary data set does a company bring to bear that is better than, say, their competition? And so there'll be a variety of answers to this question. People have proprietary data, so it's about various things on product or maybe I've got data about some domain specific thing, but every company has customers and every company has customer data.

So the question becomes, how well do you use that customer data to turn it into these AI outcomes? And the – and there isn't the thing – there's no one source of data, right? Because you take all of those – I think you call them stovepipe, so I haven't heard about like, the silos of data that exist among web data, mobile data, e-commerce data, marketing data, purchase data, returns data, I mean, everything you can imagine, but you have to bring it all together in order to unlock this outcome, just having a bunch of separate data streams sitting in different places does not allow humans or AI to have an insight about what would you do for Kash?

What is Kash interested in? What's he all about? You need to take all that data together in order to draw the inferences and make predictions about each person and then cohorts of customers and things like that, that's what the CDP is needed for. And so what the CDP allows companies to do is to tear down all those data silos that are essentially the blocker to getting these AI outcomes. And that's why segment as the leading CDP in the market, both in terms of its capabilities, but also in terms of its market share according to IDC, that gives us the edge of helping customers to create their proprietary data asset here that allows them to unlock this outcome better than their customers.

And you think about the incentive for companies to do this well. But if you can get 10x better outcomes at a tenth of the cost, which I think is directionally what you can get at a minimum, then there'll be so much incentive for customers to get this right.

Kasthuri Rangan

Got it. That puts you in a new category in marketing automation and things that you've noted on that.

Jeff Lawson

It's actually not about marketing automation. It's, like I actually think that all of this comes down to data, basically. But yes, we are in the marketing automation space with our Engage product, which is built on top of segment. We are in the contact center space with Flex, our contact center product, but those are all built around the core of communications and data, which is really the foundational assets that are most important in this story, I believe.

Kasthuri Rangan

Got it. Before I turn it over to Matt, one other thing is when you look at the synergies in this AI world, what are the synergies between the communications business and the applications business? And what are the things that you can – you talked about a data centric view of building these new generative AI applications? What else can you leverage from the communications platform?

Jeff Lawson

Well, every customer that comes to us for communications is coming to us for communications for a use case, right? Think about the text messages you might receive from a company or the phone calls or the emails you might get from a company, right, as the leading platform for voice calls or voice messaging and email. We see customers come to us for contact center use cases, for sales and service, for marketing use cases, for security, like one-time password use cases and for notification use cases. Like, those are the four most prevalent use cases that most companies come to us for.

And so if you think about it, what we've been doing is aligning our stack to enable us to go deeper or really vertical in those areas. For all those contact center use cases that customers come to us for, well, obviously, we have Flex. For all those marketing use cases, they come to us for, we have – but we have engaged for all the one-time password and notifications like we've got our Verify product.

So if you think about it, the way we've built out our product portfolio is to say, if a customer comes and says, “Hey, look, I'm trying to plug Twilio into this use case around verifications�?, then we say, “Okay, well, you can do it yourself. And here's the other APIs, or we've already have that built for you that you can plug in and you can choose.�?

And so for us, the opportunity is to up-sell customers into a solution that solves the problem they're going after versus building it themselves, but still in a very technical way and still in a very API-driven way, And that's the basic interconnect between the raw communication capabilities that we have brought to market. That is a $3.5 billion business for us.

Kasthuri Rangan

Yes.

Jeff Lawson

And we're the leader in into the next areas that we're taking the company.

Kasthuri Rangan

Yes. I have a macro question for you, and then I'll turn it over to Matt. Our Chief Economist, Jan Hatzius, has been calling for a soft landing and has been great so far. We've reached a point where inflation has come down just about enough and rates seem to be stabilizing. And we've gone through a tumultuous 18-month period, and nobody anticipated that that we have such a massive rate increase and the economy is hung in there and done okay. Everybody's fears of a recession have proven to be sadly maybe for them untrue and the industry has come out, okay. So it's been…

Jeff Lawson

Only things said at banking conferences, sadly.

Kasthuri Rangan

Yes, I know. Yes, sadly. And for the people that made those negative announcements…

Jeff Lawson

Yes, exactly.

Kasthuri Rangan

Happily for us, we have a more sanguine view. Where I'm going with this is if things were to stabilize and we do have a soft landing, we actually call it, we stole Jan's soft landing, we're calling it software landing. That's a Goldman Sachs proprietary thing software landing. Let's say, if you have a software landing and rates modestly come down second half of next year or whatnot, what does calendar 2024 look like? In the event, we don't have this massive instability, we just have a more normal economy that people are less concerned about. What the budgets look like? What does?

Jeff Lawson

Yes. I mean, I don't have the crystal ball. But what I would say is, you've seen over the last 18 months, a lot of companies looking at their investments in a like with more scrutiny asking what's the ROI of the various software products that we've invested in, trying to harmonize those investments and say, Hey, do we have two or three of this category? Maybe we can consolidate down to one or saying, hey, do we have – someone bought this thing? Are they even still here? And are we getting the value out of it?

So you just have those things going on. By the way, those are good things to go, like company should be focusing on that in terms of efficiency. And I think that's what this side of the cycle is actually about. A lot of times it's just kind of clean up from the good times of the last cycle and then the whole thing repeats again.

So for software companies though, I look at what most of the software companies that I think of, I think about the ones that we use, that we're buyers of, I think about the ones of like other folks I know running software companies, I mean software fundamentally makes companies more efficient. Like that's the role that software plays.

Now you actually have to implement them correctly, right? You have to get use out them, but ultimately, software has the ability to make companies better, like I believe that. And so I think what you get back to is more of the upside thinking of, “Hey, if we have this piece of software, is it going to help us drive more market penetration, more competitive wins and put us in a better stance for a longer period of time?�? Because right now, companies are in that retrenching mode. They're thinking about short-term, short -term outcomes.

How do I save some money now, right? Whereas you start to get back to thinking about long-term, oh, if I invest in this, I will see an ROI. And so to me that's what the software landing probably looks like is conversations with customers start to turn back to, “Hey, what's the opportunity to build a really strong, competitive stance for the company?�? Because you're investing in software and now especially because you're investing in AI, how is this going to evolve the competitive dynamics in your market customer? And how can we help you to go win in that world? And I think that's what normalcy will look like again.

Kasthuri Rangan

So Jeff, just pivoting back to generative AI for a moment, we talked about the implications of generative AI on CDP, on marketing campaigns, et cetera. But if we bring that to kind of Flex contact center product, right? Contact center seems like an area that's ripe for disruption with generative AI. So can you talk about some of the announcements coming out of signal, whether it's Flex Unify or Agent Assist and maybe how that may catalyze broader adoption of that product?

Jeff Lawson

Yes. So one of the things that we are preparing for is for the contact center to pretty aggressively turn into an automation platform. Today, contact centers are largely human workflow products, right? So human beings log in and take calls and have to browse all sorts of myriad internal systems to help customers.

And I think the contact center of the future will be much more about managing the automation than it is around actually having human beings have those conversations. We were talking to some industry analysts recently. And I asked the question. I said, how many seats are there globally for the contact center? And the answer was directionally about 20 million. And I said, how many folks? These are the experts. These are the industry analysts. How many folks here believe that that number is going to be more five years from now? How many hands do you think went up? Zero.

Okay. How many of you think it's going to be less? All the hands go up, right? So then the question becomes, okay. So we all agree how much the question is now, how much [indiscernible] half as much, quarter as much? I won't spoil what the hands did in that part of the conversation.

But this is an area where I actually think the fact that Flex is a more nascent business for us is actually a benefit, because if Flex were a substantial part of our revenue today, we probably have a lot of conflict. And I think a lot of SaaS companies have a lot of conflict, will have a lot of conflict around AI. Because if you're a SaaS company that's monetizing per seat, and you're not going to tell your customers, “Hey, I think, we're going to make your people that buy our seats like, we're going to make them 10% more productive and the future is going to be glorious.�? In fact, the reality is a lot of AI will make it so you need fewer to those people.

Maybe 10% fewer, maybe 50% fewer, right, that's the context. And that's every SaaS category, basically with seat license. And so the question is, if companies have built their business model on seats, they're going to get disrupted because they will be hesitant to deploy that technology that requires you to have half as many seats. But that's what the technology will enable. And so disruptors are going to be able to come in and say, guess what? I can offer you technology that means you need half as many seats in a way that the incumbents will be hesitant to do.

And so I think that'll be true in the contact center as well. And so we are very focused on automation. We are very focused on bringing together the customer data together with those communications channels because again, I think this largely becomes much more of a data and a data science problem versus a how do I manage a thousand people sitting in cubicles problem. And then, bring the data together with, of course, knowledge about the company and its policies and all that, those are the foundations of that automation.

And you can see we launched this vision two weeks ago with CustomerAI, which basically said, “Look, if you're trying to build AI that is going to serve customers, whether it's in a pre-sales context, whether it is in a support context, whether it's in any of these contacts, the key ingredients here are going to be one, an LLM that has the ability to reason. And that is the amazing thing about the language models that we see today.

Like that's the thing that changed in the last give or take year is you now have computers that can reason their way through hard problems. That's why I think this is not hype. This is truly going to be an innovation that is roughly the scale of the Internet in terms of impact on the humanity. Because for the first time ever, we've built a machine that can reason.

And when you look at some of the problems people have asked LLMs to solve and you watch it work its way through how to solve this problem, you're like, that is reasoning. We don't know how it works. But we also don't know how these work either. So it's the same mystery to us, but nonetheless, the outcome is pretty darn similar.

Kasthuri Rangan

Yes. So, Jeff, I think the common thread in this discussion has been just the massive productivity unlock across all these different categories that Twilio plays in. So I guess, how do you think about pricing for this productivity improvement?

Jeff Lawson

So I think what you're going to do is like clearly move away from per seat pricing. So the only product that we have that does have the option of per seat pricing is Flex. And I think that's just a pricing model for us and for anyone who's smart will go away. And you'll price it more on probably on like on a conversation basis like think about segment, the way we price it today is on monthly tracked users.

So it scales to how big a customer is your customer base. That's roughly speaking how much work we're going to do on your behalf. It's also roughly equivalent to how much value you're going to get out of our solution. And I think you end up with models that look more like that, which is like the more conversations you have, the more you're going to pay us, right? The more data that's involved in those conversations, perhaps more you'll pay us because more compute going on to infer things about that customer to do some smarter things. So maybe there's levers that you turn on and off to make that conversation smarter and those are features essentially you pay more or less for. But it's not going to be a per seat kind of basis.

Kasthuri Rangan

That's very interesting. And maybe we take it back to fundamentals for a moment. You guys initiated revenue growth targets for 15% to 25% from fiscal 2025 to 2027. And right now the company I think is expected to grow less than 10% this year, right? So can help for bridge for the audience kind of how you expect to get back to that kind of 20% midpoint over the next couple of years.

Jeff Lawson

Yes. So there's two ways of – not two ways, two facets of the answer. One of the things that we're doing and then the other is like more macro, right? So I'll start with the things that we're doing. What we are very focused on, number one, is scaling and getting the go-to-market machine for Flex and Segment to a scale that is like a humming machine.

As we've told everyone in the past, we combined our sales teams in early 2022, which was a mistake. And so we've kind of had to unwind that decision and reconstitute the independent selling machines for Flex and for Segment. So that's been a painful mistake, but I think largely the work is behind us in terms of the foundational work of hiring the sales team, getting butts and seats, enabling them. And now we're – we've got a largely enabled sales team and now it's a matter of building pipe and closing deals.

For comms, what we are focused on is going out there winning design wins. So that's when a customer decides to use Twilio and is going to bake us into a product as well as taking share from other competitors.

And in terms of Twilio having leveraged the last the last era of growth to go have the largest customer base, the best balance sheet, the best products, and the most revenue, like that puts us in a great position that now we're on the other side of like the – of the cycle to go win market share because we're the strongest company in our competitive set.

So we grow our customer base there. We grow our customer base on both sides. Those are the things that we're working on now in terms of our go-to-market. The flip side is the macro economy because as we've talked about, a usage-based model has a great tailwind during a growth period, but unfortunately has a headwind during the economic not growth period that we're in, I guess, it's not a recession.

The slowdown, whatever the flip side is that's between like awesome times and a recession. And so it's a headwind for us now. For communications, a usage-based model means that like if our customers are just doing less business, less transactions in their businesses that typically would mean like less communications.

So I told the story on one of our earnings calls that I bought the new Zelda video game from Best Buy. And I got a text message that said, “Hey, your order is ready to come, pick it up, right? So as an example, if fewer people are buying things because they have less disposable income, then there will just be fewer text messages sent because there's fewer things bought. In the same way that people are taking less vacations or whatever, less consumer activity equals less communications.

In segment, there's also a little bit of that dynamic, too, because we monetize it in Monthly Tracked Users, MTUs. And so – and that includes, by the way, anonymous users. So people who land on the website and are clicking around, right, that's interesting data for a company, because one – at some point, that might turn into a tracked user and you want to know all the activity they did. But if marketers are spending less on, say, SEM, to drive people to that website, and we know a lot of marketing budgets have been pulled back during last year, well then there's less users to track. And so at renewals, companies have right-sized those contracts to the now monthly tracked users that they're seeing. So that's the headwind we face.

So on the macro side, the tailwind is as economic activity picks up, we don't have to do much and you start to see the growth kick in again as more economic activity happens, as marketers spend more, and more people on the website or just more transactions are occurring, you see more in the communications side. And the thing that we are well positioned for is to capitalize on that growth without having to spend more. Because we have reduced the size of the company during this cycle pretty substantially, about 27% overall from our height, through two rounds of reductions in force. We've got a really great cost structure in place now, and we can deliver on that growth without having to invest much at all, if anything, into the foundation of the company.

And so what you'll see is as that growth kicks in from a macro standpoint, we can drop a lot of gross profit to the bottom line. And that's what's really exciting about the – what the future holds in terms of things that are in our control and then a little bit of the macro side. And so look, I think that if we hit a really horrible recession, I think that could be an impediment to us to reaching those medium-term targets, but I don't think anyone is calling for that. And so I feel confident that we can hit those medium-term targets.

Kasthuri Rangan

So from your perspective, like where are we in terms of usage trends? Are you starting to see stability kind of coming out of 2Q relative to where we were in 1Q or even a couple of quarters back? Can you share some context around where you think we are in terms of that?

Jeff Lawson

Yes. In the early stages of this side of the economic cycle, we saw the usage patterns just deviate from where they had been historically. So our predictions about, hey, what do we think our usage is going to be? They weren't materializing because there were fewer transactions going on, fewer like all the macro stuff going on. And when we talked earlier this year about stabilization of volumes, what that meant is that we weren't seeing degradation. In fact, our models were accurately predicting the usage trends that we were seeing. And so that was the stabilization.

And I think that now what we're seeing is both the effect of some – I wouldn't say like macro is like changing materially day-to-day, but I think generally speaking, you're probably seeing the economists say like, yes, there is a stabilization. It's not kind of the lot of things are up to question like they were maybe a year ago. So there's stabilization going. And then you say our go-to-market efforts of winning market share, winning new customers, et cetera, has the ability to grow our usage volumes and the revenue as a result.

Kasthuri Rangan

I want to jump in one thing. So on that very topic, Jeff, you're calling for – at least you expressed optimism that bookings can accelerate in the second half of the year. Is that based on the stability, the economy stability? What are the leading indicators you're seeing in your business that give you confidence that we can show – exit on a strong note this year?

Jeff Lawson

Yes. And just for clarity, I'm not trying to make any guidance around bookings because I don't think that's something we've ever guided to. But what I will say is like I think we're seeing some of the buying hesitation early in the year as like those dynamics are changing a little bit. I wouldn't say it's like a wildly different market. But I think we're seeing some more positive signals in terms of like early signs of pipe generation and things like that. I think generative AI is certainly a tailwind of this whole thing because despite the fact that customers are still rightly focused on ROI and being good stewards of their capital, they all know that AI is going to change their industries and change their companies. Now exactly how and when, everyone is trying to figure it out.

Everyone is trying to say, what are the things I should be investing in that are going to bear fruit? Which are the things that maybe are too early or there's probably going to be hucksters like in the AI world, just like they were in Bitcoin and everything else, like every trend brings that. And so they're trying to sort through, okay, what's real and what is maybe speculative. But they know GenAI is going to change. And so that is the nature of every conversation I'm having with customers now.

And the way we are positioning, what we do is, look, it is very early in the buying cycles for AI. No doubt about it. I don't think – I think there are some exceptions, but I think largely speaking, AI is not turning into revenue for software companies yet.

Kasthuri Rangan

Do you think it will?

Jeff Lawson

Oh, absolutely.

Kasthuri Rangan

Okay.

Jeff Lawson

Because I think the incentive to invest in these use cases is going to be so high. I'll tell you a story. Like we just made it through our migration in our communications side of our business with 10DLC migration, which is an obscure thing that, sadly, investors in Twilio had to understand. But it's like we are migrating from basically a world where every sender on the network was kind of unknown and anonymous to a world where everybody is known, which is actually really good for all of us as consumers in reducing spam and fraud and all sorts of bad things that can happen on the network.

This is a painful process because everyone had to register their campaigns to be able to keep sending text messages. So it was a very painful effort. We deployed AI in some of the later stages of getting these campaigns approved that did the work of hundreds of people that were spending months working on it. Did that work in like minutes, right? I mean that's probably 1,000x productivity increase for Twilio. And when you look at these outcomes, you're like, “Wow, like it is astounding�?. And so now you start to think about rolling ahead to other situations that our customers are in. where they are just throwing manual work at problems that could be automated to get a 1,000% increase in productivity. Those use cases, you can't ignore that, right?

Kasthuri Rangan

Yes. Does that lead to contraction in employment or it just makes us more productive and do things faster or quicker and enjoy better quality of life?

Jeff Lawson

I mean, look, the comparison that I typically make rightly or wrongly is to the industrial revolution when you suddenly got an abundance of physical labor, right? And a lot of people said, well, what's going to happen? If you need 100 people to run the firm today and now there's a thing called a tractor, like what's going to happen? Well, clearly, farms are running in a much more efficient way. We're able to feed billions of people that we couldn't feed prior to the industrial revolution. And people have moved on to other professions. And so the farming industry is much more efficient now, you would say, and as well as able to fulfill the needs of humanity much better.

And so I think there'll be similar transitions that go on. I don't know exactly where and I'm not going to pretend to have the answers about exactly how it's going to work out, although I suspect that there's a lot of parallels from history that will be analogous in a similar way that you look at how computers made people more productive in their work, and productivity led to a stronger economy, just more economic output from humanity. I think you'll see the same thing here.

Kasthuri Rangan

Bill McDermott was here yesterday. He's always bullish, but he's been – for the right reasons, right? He believes that IT spending next year will be faster growth rate than what we saw this year. I guess you know, everything that's gone through. I mean do you have any thought on that? It seems like this whole stability theme, especially with rates start to come down, we're not economists. You're not, I'm not either. But if things start to stabilize, maybe we unfreeze some of the budgets that have come under so much scrutiny. Do you think there's a possibility that next year could be a better year overall for software?

Jeff Lawson

Well, you know what's interesting is this. Somebody actually asked me in the session just before I came down here, they said, “If people are going to invest in AI, where is that budget going to come from? Like who's going to be the loser in that story?�? And I thought about it for a second, because it actually wasn't something I've necessarily thought about in the past, but it did strike me that I don't think there needs to be a loser in that story. Because if you get as much efficiency gain as I think companies can get with AI, the ROI and the speed of that ROI pays for itself.

And so you don't have to have a loser. There is some amount of upfront investment, but it's just going to pay back so quickly that naturally you get that notion of like efficiency gain and the software industry can return to growth if we're able – and that's the big hit, if we're able to deliver on that efficiency gain. And so I think that there will be certain areas where we'll be able to deliver on that pretty quickly, and then other areas will probably take more time.

Kasthuri Rangan

Yes. So with that, I think, 19 seconds away. Thank you so much, Jeff, for coming to our conference. Really appreciate it. And I hope you have a productive day. And thank you for our clients for your participation in this call.

Jeff Lawson

Thank you. Thanks, everybody.

Kasthuri Rangan

Third day is the best day. Yes. Let's finish it up on a very high note. Thank you so much.