Ladies and gentlemen, thank you for standing by and welcome to the Altium investor call. At this time, all participants are just in a listen-only mode. Following the presentation, there will be some time for a question and answer session today for investors. To ask a question today, you'll just need to press star one on your telephone. Just please be advised that today's call is being recorded. Without further ado, I'll hand the conference over to your first speaker for today, Chairman Sam Weiss. Thank you, and please go ahead, Sam. Thank you very much. Welcome, everyone, and welcome to the Altium investor call to share details of our vision for electronic industry transformation and our strategy for value creation. Joining me today is our Chief Executive, Aram Mirkazemi, who is in our headquarters in La Jolla, California. Our Chief Financial Officer, Martin Ive, who is with me in Chatswood in Sydney. During the call, Aram will demonstrate why Altium is uniquely positioned within the global electronics design and manufacturing industry. How our cloud platform, Altium 365, and our industry partner platform, Nexar, connects the electronics value chain from beginning to end. Altium management will reiterate their commitment to the achievement of the Altium aspirational 2025 financial goals of revenue of $500 million and 100,000 subscribers. I will address why the Altium Board of Directors recently rejected an unsolicited acquisition offer from Autodesk, Incorporation. Our CFO, Martin Ive, will provide a brief trading update at the end of the call. Please note as a reminder, today's call and the question and answer section at the end may include forward-looking statements regarding Altium products, its future operations, or its financial performance. Any such statements are based on current assumptions by Altium management and are subject to risk and uncertainty that may cause actual events and results to differ materially. Please note that all numbers are in US dollars unless specified otherwise. This call will be recorded and will be made available on our website later today. I'd now like to introduce Chief Executive Officer of Altium Limited, Aram Mirkazemi. Thank you, Sam, and good morning, everyone. As someone who is passionate about Altium and our journey of transformation, given the circumstances that we're in, I feel it is important for me to share with you details of Altium's transformative vision and our strategy for value creation. I also would like to share with you why Altium is a unique asset in the industry. I'm speaking to you today as Altium CEO, but also as a significant shareholder myself. Since I returned back to Altium in 2010, the company has gone from trading at less than $1 to now trade in the 30+ range. I believe that if Altium can continue to execute on its growth strategy, a lot more shareholder value will be created. This is why I support the Altium board position to reject Autodesk's first and only offer of $38.50. I have a deep conviction that Altium is uniquely positioned in the engineering software industry, and that it can execute on its strategy of transformation through dominance to deliver unprecedented value to its shareholders. Delivering value for our shareholders has been a hallmark of Altium. I'm proud to say that through extremely focused execution, we have delivered an industry-leading performance with eight consecutive years of double-digit revenue growth and expanding margins. Altium has established a history of setting and achieving long-term strategic goals and financial targets. In 2014, we set ourselves an aspirational goal of $100 million in revenue to demonstrate that Altium can perform with potential to lead the industry. We overachieved and delivered $110 million in 2017. In 2016, we set ourselves the aspirational goal of $200 million in revenue to claim market leadership. With three months to go, analysts' consensus pointed to a revenue target of around $210 million. Sadly, with COVID going rampant, we fell short at the end of FY 2020. In 2019, we set ourselves the aspirational goal of $500 million in revenue and 100,000 subscribers to claim market dominance as a prerequisite for industry transformation. I'm sure that we will achieve this goal by 2025 in the same way that we did the ones in the past. It's never easy, given our past performances, we are confident to back ourselves. These aspirational goals are strategic in nature, we never lose sight of our true north, and that is value creation for our shareholders. We have been highly focused on delivering value at every stage of our strategy, which has been the underpinning of the success of our journey from market leadership to industry transformation through dominance. In this phase of our journey, we are targeting 100,000 active subscribers to compel chief industry stakeholders to support our vision for industry transformation. The key component of our strategy in this next phase of our journey is our new cloud platform, Altium 365, which is driving our pursuit to unify and to align the electronics industry. Our cloud-based integration platform, Nexar, which is supporting our desire for partnering and building a digital ecosystem, is critical for industry transformation. What I would like to say next is perhaps the most important part of my presentation, and that is why strategic partners are interested in Altium. Why is it that this block of land is so highly sought after in the engineering software industry? First, it is critically important to recognize that electronics sit at the heart of all smart products. By way of example, something that is very topical, NASA's Mars Ingenuity helicopter, which has to function independently on a distant planet, I'm proud to say that its electronics were designed using Altium software. The second critical thing is to appreciate the significance of the electronics industry in the bigger context of the engineering world. To demonstrate this, industry research shows that electronics are responsible for 40% of a new car's total cost. This is most significant, with electronics being part of a car's central information display, engine control system, anti-lock brake systems, transmission sensors, radar, audio system, and self-driving, to name but a few. Through Altium's growing dominance and its innovative approach to the cloud, Altium is leading the electronics industry in a way that makes Altium unique in the engineering software ecosystem. More specifically, Altium software and cloud services provide the unique bridges that connect the product design world to electronic design and subsequently to the electronic supply chain and the manufacturing of electronics products. With the strong early adoption of our cloud platform, we are evolving from our PCB design origins, are now playing an essential and growing role in the design and manufacturing of smart products that spans manufacturability and productivity, research and influence, and component sourcing. All of this effectively means that Altium's products and platform through Altium 365, Nexar, Octopart, are unique bridges that connect electronics to the rest of the engineering world. These unique bridges are indispensable components of digital transformation that is taking place through our product design and manufacturing companies around the world. At the highest end of the product design and manufacturing companies, such as Dassault and Siemens, they require centralized, fully integrated solutions to deliver a singular platform for digital transformation. For other clients, bringing digital transformation to the mainstream through cloud and SaaS offerings is the key strategy. Bringing digital transformation to the masses through long-haul collaboration between design, manufacturing, and supply chain is yet another strategy that is pursued. All of these need to have access to the electronics industry, which is central and economically most significant for manufacturing of smart connected products. I can tell you that in this regard, Altium is unique to the industry, and there is no real alternative. Of course, having created a unique position within the global engineering industry of itself is not enough. We must continue to execute well. I'm absolutely confident that we have both a winning strategy and strong execution capability to realize the promising and even a greater future for Altium. The early adoption of our cloud platform, Altium 365, is most encouraging and continues to surpass our expectations. Today, we have over 13,000 monthly active users and over 6,000 monthly active accounts on Altium 365. However, to succeed, we must execute well and achieve large-scale adoption. At the core of our execution plan are four flywheels for driving large-scale adoption. We have been highly focused on spinning up these four flywheels, which at their early stages take a lot of effort and energy, but once they get going, they will be sights to behold. This same flywheel phenomenon underpins our journey to market leadership through our transactional sales with an awesome operating leverage and performance over many years. These new flywheels will power the execution of our strategy by driving the adoption of our cloud platform with a focus on moving design data and processes onto Altium 365. These flywheels will drive the adoption of our ecosystem with a focus on industry partners and their respective users to connect to Altium 365 via our cloud-based integration platform, Nexar. As these flywheels build up momentum, they will drive further adoption of our design tools with a focus on expanding reach and volume through our new digital sales platform. These flywheels also drive the adoption of our design platform with a focus on the high end of the market through our NEXUS product. Our move to the cloud and growing adoption by our customers is changing our traditional maintenance subscription to become more SaaS-like revenue as our customers move their design activities onto Altium 365. We estimate that by 2025, our recurring revenue will rise from around 60% today to be 80% or more. We are also seeing continued demand for term-based licensing, which Martin will speak to later in the call. Altium 365 and Nexar will provide unique opportunities for direct monetization. While this is not our focus in the short term, as large-scale adoption remains our singular focus, in time, a range of direct monetization opportunities will come from business models such as premium services similar to Amazon Prime or transaction fees similar to Airbnb. We just need to be patient and focus on larger scale adoption. One other benefit of our cloud-first strategy is its natural promotion of term-based licensing for software tools. We have had a great response from our customers in adopting the cloud, and that is facilitating our business model transition in a way that is natural and not forced. Our business model transition to term-based licensing is perhaps the biggest value creation event in Altium's history. As demonstrated by a successful number of software companies such as Adobe, Autodesk, and PTC, who have transitioned their software business model to recurring revenue and created a tremendous amount of value for their shareholders. I'm sure that this opportunity for value creation in relation to Altium is not lost on Autodesk. The Altium board and Altium's leadership team is highly focused on executing with intensity and focus to capitalize on the changes that have been made, the opportunity that is before us, and the rising momentum that is coming from Altium 365 from our users, the industry, and strategic partners. With recent events, I know that there have been some commentators who are speculating whether Altium remains committed to its 2025 financial goals. Let me categorically say that we remain firmly committed to achieving our aspirational 2025 goals of $500 million and 100,000 subscribers. One thing that is worth mentioning is that unlike our previous phases of growth, for this next phase, we have shared the flight path with the market. Having moved into the ASX 100, we felt there was a heightened need by the investment community to model Altium's growth trajectory. Since 2020, we have shared our flight path with the market to assist with their modeling. As you all know, with COVID, we adjusted our flight path and introduced pre-vaccine, transition, and post-transition as legs of that flight path. I'm pleased to say that the first leg that ends at the conclusion of this financial year has been successfully completed, as we are on target or close enough to our guided range. With the second leg, we must get into double-digit revenue growth, which our second half performance this year is encouraging as we have now returned back to double-digit revenue growth. The key is the third leg starting from FY 2023, where we need to get into the 20-plus growth rate to make up for the lost momentum from COVID and the effect of pivot to the cloud. That is when we need those flywheels to be running with full force. There is also an M&A component to our flight path. As you know, M&A comprises 10%-20% of our flight path to $500 million. I would like to remind everyone that M&A is for strategic purposes in the same way that our divestment of TASKING was for a strategic move rather than keeping it as a mere cost to support our path to the AUD 500 million. There is one more thing that may not have been obvious for this leg of our journey, and that is the significance of a strategic partnership with a big engineering software brand such as Dassault, ANSYS, PTC, and Autodesk. Not only is this relevant to reaching our AUD 500 million, it is also necessary for our end-to-end market dominance that is a prerequisite for transformation. There lies Altium's dilemma, and that's why we are here today. As with all strategic partners who are important for Altium's success, our partnership begins by focusing on value creation for the customer. Once the enormity of the opportunity is revealed, it turns to M&A discussion, and the conversation moves to value creation for respective shareholders. This is where we are with Autodesk now. Based on the above, and in recognition of Altium's unique position in the industry, any M&A activity by a single strategic partner would, in my view, need to include a significant premium in recognition of the scarcity of this asset and the opportunity cost for shareholder value creation for both with other strategic partners. My personal view, which I feel strongly about, given the uniqueness of Altium and its position in the industry, is a strategic investment by the strategic partner in Altium as an alternative path that can overcome some of the challenges mentioned and deliver the most value creation path for Altium shareholders. This, however, is ultimately a matter for our shareholders to decide. Before I pass over to Sam, I hope that I have been able to share with you my excitement about Altium's future, why I believe that we are uniquely positioned within the engineering ecosystem, and our confidence that we have the right strategy and the ability to successfully execute to create a truly special future for our shareholders. I will now hand over to our chairman, Sam. Thank you, Aram. As the chairman of Altium, and as a longtime significant shareholder in the company, I'm pleased to share with you my thinking and that of the board of directors about the unique value of Altium. As Aram has well articulated, Altium is ideally positioned to transform the global electronics industry. Our Altium 365 Nexar platform is gaining strong adoption, and it is well on its way to becoming an open marketplace for the design and manufacture of printed circuit boards. It delivers a fully transparent view of the PCB creation process from the point that an engineer first has an idea for an electronics product, to the sourcing of the parts for that printed circuit board, to the fabrication of it with open access for all interested parties, whether they are engineers in allied fields or suppliers, purchasing agents, or manufacturers. In this way, Altium 365 Nexar is different from the digital platforms of other large software engineering companies, whose principal benefit is to bring a suite of tools from a single owner to a customer. The opportunity for Altium to establish Altium Designer as the PCB design tool of choice for all engineers, from those working on their own to the teams of engineers building sophisticated electronics products such as automobiles or airplanes at the world's largest companies, and to create Altium 365 as the manufacturing platform for the electronics industry, is very rare indeed, and we believe is deserving of support, especially when both Altium Designer and Altium 365 are built upon the strong foundation of our industry-leading position in PCB design software. That position of strength in software design, as Aram outlined earlier, also has considerable upside potential as we move from the market leader to the de facto standard for PCB design tools. The Altium board of directors recently received an expression of interest in the form of an unsolicited offer from Autodesk, Inc. to acquire our company. We have long thought of Autodesk as one of the great engineering companies in the world, and one for whom we have the utmost respect. Our management team and their counterparts at Autodesk have had a series of discussions for some time about how our two companies could collaborate and form a partnership that reflected our similar visions for the future of engineering software. When those conversations very recently changed to one about an acquisition of Altium, we were quite respectful of Autodesk, and we gave them an opportunity to engage directly with us about the value of Altium. Having said that, the Altium board does not believe that the unsolicited offer of $38.60 per share reflects the value of Altium and its potential in both PCB design software and in the Altium 365 Nexar platform, and therefore is not in the interest of our shareholders to pursue at the current price. However, we believe that we have an open and honest working relationship with the CEO and President of Autodesk. We will continue to engage with him about the value of Altium. We also appreciate that the multiples offered by Autodesk in their proposal are high by industry standards, but we maintain that they do not recognize the underlying value in our company. In fact, we believe that Autodesk also recognizes the future value of the Altium software and platform, and that their offer to acquire the company is in some part a reflection of their own conviction of the value that they can extract as the owner of Altium. Of course, as a public company, we are always mindful of shareholder value, and we have no preconceived resistance to an acquisition of Altium. However, we believe it should be at the point and at a price that reflects the unique value of Altium as a company and its demonstrated and future wealth creation potential. I'd like to now introduce Martin Ive, Chief Financial Officer of Altium. Thank you, Sam, and good morning, everyone. It is pleasing to see that momentum is returning to Altium's business with a stronger second half. After a slow first half due to COVID impacts and our pivot to the cloud, the full year is likely to be at the low end of our guidance range. We anticipate that for fiscal 2021 revenue to be at or slightly below the low end of guidance of $190 million-$195 million. EBITDA margin is expected to be at the low end of the guided range of 37%-39% on an underlying basis, excluding M&A costs and the write-back of a SOLIDWORKS minimum contractual amount due to the termination of the contract. Altium's renewal business is performing strongly. Octopart is set for a record performance, and our China business is also delivering a very solid second-half performance. We continue to observe an increase in demand for term-based licenses, which is a positive for future recurring revenue, with a much larger portion of new licenses sold in Q4 being term-based. The increase in new term-based license sales has been at the expense of new perpetual license sales, particularly in North America and Europe. As Aram mentioned, Altium's adoption of its cloud platform, Altium 365, is performing strongly, with over 13,100 monthly active users and over 6,300 monthly active accounts. I'll now hand over for Q&A. Ladies and gentlemen, we'll begin that question and answer session. Just a reminder, this question and answer session is just for investors only. If you'd like to ask a question, you can just press star one on your telephone and then just wait for your name to be announced. Just lastly, if you need to cancel your request at any time, you can just press the pound or the hash key. Your first question today comes from the line of Lucy Huang from the Bank of America. Please ask your question, Lucy. Good morning, everyone, and thanks for taking questions and hosting this call. I have two questions. Firstly, are you able to talk through kind of manufacturing in the Nexar ecosystem and what's the progress like in terms of getting interest from manufacturing partners or how many have signed up to this solution on the manufacturing side? Secondly, are you able to talk to Altium 365 Pro? You have begun to monetize that package. Are you able to give us some color as to how many subscribers are now taking on this additional or paying for this additional product? Thirdly, you mentioned that the third and fourth quarter have seen a higher take-up of the term-based license. Just wondering if you can give some color as to what proportion of the base is now sitting on a term-based versus a normal subscription. Thanks. Thank you, Lucy. This is Sam. I’m going to try to use an American term, be the quarterback in terms of handling the question. The first two questions were about our platform, firstly about manufacturing partners and progress there, and the second was about the monetization of Altium 365 Pro, if I understood you correctly. Aram will address those. For an update on our progress on term-based licensing in the second half, Martin Ive will make a few comments. Aram, if you could talk about the platform. Thanks. Thanks, Sam, and thanks, Lucy. With the manufacturing supply chain ecosystem, that is essentially the end game for Altium 365. There's a lot of work going into that in America, in China, and also now in Europe. We have made some investment in a very promising company that some of you might have seen. Press release around that, which essentially brings elastic manufacturing. That has been a big step for us because that's a component that has to be done. The main thing for us is the customer, and being able to present this to customers on 365 in a way that they would prefer it's Altium's way of manufacturing, which we actually call Altimade. We are set to raise curtain on that in January 2022, and we're going through the last miles. Now, in China also, we're making good progress, but that's probably a more China-centric answer. It's a different ecosystem, if you like, but we're making good progress there as well. I'll ask Martin to answer the second question. Sure. Lucy, in terms of the pro-level subscription, we have around 2,000 seats that are under a pro-level subscription, that's approximately 4% of the total subscriber base. Just in terms of term-based licenses, this is relating to outside of China. China is pretty much all perpetual licenses. Outside of China, with new license sales, we saw about 33% of those being term-based in Q3, it's around 45%-50% so far in Q4. Although we would expect that to change somewhat in the last two weeks of the quarter. That may well change by the time we report numbers in August. Thank you, Martin. So I just had a- Go ahead, Lucy. I just had a follow-up question for Aram in relation to manufacturing. Am I able to clarify that right now the vision is to direct customers ultimately onto Altimade over time as the preferred partner for actual manufacturing and the PCBs rather than third parties? Yes. That is the intention. Great. Thank you. Thanks, guys. Thank you, Lucy. Okay. Your next question comes from the line of Quinn Pierson from Credit Suisse. Please ask your question, Quinn. Hi, good morning. A couple for me. Maybe firstly, in the prepared remarks, I think I heard mentioned that a strategic investment might make a bit of sense from a shareholder perspective. Could you maybe just elaborate on that comment, what kind of forms might make sense, i.e. minority or majority investment? Would that potentially be an exclusive arrangement with a potential partner? If you could just elaborate on what might make sense in that area, that would be great, please. Thank you, Quinn. I'll ask Aram to comment on that because that was in his section. Firstly, I think we should make it clear, if we haven't already, that we enjoy very positive relationships with all of the large engineering software companies that are in the broader industry that enable customers to build electronics partnerships. Particularly since we have developed Altium 365, those conversations about collaboration and partnership have intensified because, as we said, we want to make Altium 365 open for anyone who is interested in building electronics products. Those conversations sometimes lead to really an open conversation about whether making a strategic investment in Altium would or wouldn't make sense for one of those industry partners. Aram might comment on that from his perspective. Okay. Slide 14 is a good slide to refer to in terms of the commercial significance of partnership. In that slide, you see these three levels, and it's really important to appreciate the significance of this for the whole industry and the opportunity for value creation for Altium shareholders. With regard to the high end of the market, the partnership and its commercial context is to deliver a centralized, fully integrated solution to deliver a singular platform for digital transformation. You see it at the top. For the mainstream, bringing digital transformation to the mainstream through cloud and SaaS solutions. That's for the mainstream, and that's orthogonal to a singular platform. That second one is more of an open platform ecosystem play. The third one is bringing digital transformation to the masses through long-haul collaboration between design, manufacturing, and supply chain. The key to recognize here is that these three dimensions are orthogonal. They are not competing. Each dimension has got bona fide legitimate customers that can benefit in the electronic sense from this integration and connection. All those are value creation opportunities. If Altium just goes with one in an exclusive way, it is true that our true north are shareholders, but customers are also stakeholders. There are many customers who'll be deprived of those others. It essentially means the value creation for our shareholders will be limited to only a segment of the market. Logically, and this is my personal view, and I mentioned this, that this is ultimately a decision that has to be made by Altium shareholders, but I have a logical perspective on this. The perfect scenario is that if Altium could actually serve all the customers so that they can all access these bridges onto the electronics platform. The key thing is that such a relationship has to be commercial and significant in that way for the benefit of serving the customer. I hope I have answered your question. That's helpful. Thank you. I guess following along to that, can you maybe elaborate on, I guess, a little bit more detail what a partnership with some of these large EDA companies might look like? I guess my question, what I'm coming at this from is, if Altium has aspirations to build a key platform and build out an ecosystem, but these other EDA companies have equal aspirations to have, I guess, control eyeballs, control customers, and build out their own platform. I guess my question is what might these partnerships look like more from a commercial arrangement perspective, such that everyone feels like they're winning? Related to that, the Dassault opportunity or partnership didn't quite work out, I think maybe related to this type of friction. I guess why do we think partnerships with some of these other players will work out better? Sorry for the long question there, but any comments on that would be helpful. I understand that question. Sam, if I can answer that question. Yeah. Please do. There's a slide number 12, and this addresses this question. Industry solutions are moving to the cloud and giving rise to a system of ecosystems. This is really important. System of ecosystems, not a singular ecosystem, a system of ecosystems. Very much in the same way the internet was a system of networks rather than replacing any of the existing networks. That's the key. You can see Office, which was the king of desktop integration, it has transitioned to Office 365, where you have Atlassian, where you have Slack, where you have Box and Salesforce and Azure, and it's not bound to the Windows platform. This system of ecosystems is the future of engineering software, as there are so many verticals that we saw there is no way that one platform can actually serve all of them for mainstream. I appreciate that for the very high end, maybe for Boeing and Airbus, a singular platform is necessary. For the majority of companies, there needs to be a system of ecosystems. In that regard, desktop will remain in the cloud, and that requires unbundling on the desktop and rebundling on the cloud. Just think of our world the same way you see Atlassian doing Slack, Box, Google Drive. Systems of ecosystems. That's helpful. I guess just lastly from me, just on more short-term trading considerations. In the December half, you called out there was about a AUD 1 million revenue headwind from mix shift to term licenses. It looks like that mix shift is accelerating. I can see with some of your pricing changes with term licenses on discounts, a perpetual price rise coming. It looks like you're trying to accelerate that shift. Is there any, I guess, guidance you could provide in terms of how to be thinking about the annual revenue headwind for the next couple periods from that mix shift? Thanks. Thank you, Quinn. Martin will comment on the mix of our license sales. Sure. Thanks, Sam. Quinn, we would expect the second half impact will be somewhere in the $3 million-$4 million range, albeit we've still got two weeks of the quarter left to go, and as you know, they're generally the busiest two weeks of the year. We still want to proceed from a licensing perspective in giving customers choice as to whether they use perpetual or term-based licensing, which makes it difficult to call out a specific number, in terms of what a headwind may be in the short term as more customers pick up term-based licenses. Our view is that this is an extremely positive thing in the longer term as that recurring revenue base grows over years two and three of the customer's life cycle. While there may be a short-term headwind, we feel that the benefit from customers moving to that recurring revenue stream is much more beneficial. Thank you, Martin. Thank you. Thank you very much, Quinn. Okay, your next question comes from the line of Siraj Ahmed from Citi. Please ask your question, Siraj. Hi. Thanks, Aram and Martin. I have three questions. Just the first one, can you give us an update on Autodesk? Not regarding the bid, but just more on strategic partnership side, given they're an important player in the ecosystem, where that's standing? Thank you, Ahmed. In the call, we, I think, well canvassed our view of the acquisition. Aram has been across the discussions at the management level in terms of collaboration, and he can share a brief update on the status of that. Siraj, this is Aram. On the slide 14, I see Fusion 360. I see Fusion 360 as quite promising for the masses of engineers. It's very popular. It's something that Altium is very attracted towards and connecting Altium 365 Nexar to Fusion 360 and their Forge, which is equivalent of Nexar, is exciting. We've been working on that. Essentially, in my view, the transformational scenario is going to be most resonant with Fusion 360. They have done really well. I have a lot of respect for Fusion 360 platform. I believe our Altium 365 and Nexar is a perfect match with Fusion 360 in the pursuit of transformation. One thing that is also worth mentioning is that they have always viewed that their customers and their users do not design things, they make things. Their legendary CEO, Carl Bass, that it was his mantra that our users don't design things, they make things. For them, merging conversion design and make is a big thing. Maybe even bigger than our vision of connecting design to manufacturing floor. You can see that these two can now be so resonant. Of course, that is the thesis for the partnership, and there's a great deal of excitement around that. Okay. With respect to the discussions are ongoing. Aram, just because of the bid, has that now stopped somewhat? Between Autodesk Fusion and Altium 365, they're so close and compatible in terms of they're like hand in glove. I'm pretty sure that the connection is going to be made one way or another. Of course, because of the situation we're in, we just have to deal with it. I very much hope that Autodesk, regardless of the outcome and the decision that'll be made by the board and our shareholders, will continue to collaborate with us. If it ended up being with Autodesk, I very much look forward to pursuing this transformational journey, which, to be honest, is most exciting part of Altium. Got it. Aram, the three other logos in there, what about the partnerships with them? Can you just weigh the discussions on that? Well, in bringing transformation to the mainstream, there are so many large companies that they're not electronics centric like John Deere, Caterpillar, and so forth, but they do require electronics, and they need to have digital transformation to go through this last mile into the electronics. PTC is a perfect partner for us for that. With ANSYS, the perfect partner for us to get into the advanced electronics as their simulation tools are world best. Of course, the 3DEXPERIENCE has a track record of our view about the significance of that, and there are many circumstances, or if not all, that 3DEXPERIENCE will be the right partner for us. Got it. The second thing, just on the trading update, maybe this one's for Martin Ive, but just on the weakness in U.S., that's a bit of a surprise given the economy's opened up. Can you touch on that? Secondly, are you assuming that there's a pickup in perpetual license in the next two weeks when you give the guidance update? Yeah. Just to clarify regarding the U.S. comments, they're around the switch to term licensing. Whilst the number of perpetual licenses may have reduced from last year, this is because customers are choosing to switch to term-based licensing, and that's really what's driven any change in the U.S. We expect over the next two weeks to have a switch more to perpetual license sales. As you're aware, there's been a promotion on term-based licenses over the last couple of months, which ends tomorrow or today in Asia, and Friday in the U.S., tomorrow. We expect that we will see a ramp-up in perpetual license sales over the next two weeks as we close out the quarter. Martin, just to clarify, you're saying the license sales in the U.S. are doing okay. It's just that the mix has been perpetual and PD versus DFRSS? correct. Okay. Last thing from me, just on M&A. On your own M&A, Aram, can you give an update on that because that's part of your FY 2025 targets? Yes. As I said, M&A is a component of our flight path and is strategic in nature. For us, now that we've got this ecosystem feeling all opened up in supply chain, in manufacturing. Like you see in slide 15, Altium is not going to get into factories and so on, but there is a layer that sits between factory floor and the customer in terms of all the things that need to happen in between a factory and a customer getting this product. We have been looking at various opportunities. There was one that we came markedly close, and we put every bit of our effort into it a month ago at Adventure Siemens. Yeah, now the field has opened up, and that's something that we're definitely very active on it. Again, like we remind, that this is not for revenue. This is a strategic reason. You can see that we divested TASKING for strategic reasons. We could have kept it to prop our path to $500 million, we didn't. We're very true to ourselves, and M&A is again a key part of our growth strategy. Thanks, Aram. Thank you, Siraj. Okay. Your next question just comes from the line of Roger Samuel from Jefferies. Please ask your question, Roger. Hi, guys. Thanks for taking my questions. First one is just going back to your slide 20. You've got a pie chart there showing the mix of the software business excluding Nexar revenue in first half fiscal 2021. I'm just wondering if you can tell us what the Nexar revenue was in first half 2021, and what sort of proportion of revenue do you expect to come from Nexar going forward? Thank you. Go ahead, Aram. As I said in the former part of this presentation, our focus is singularly on the adoption of our cloud platform. Direct monetization of our platform in time will come. We just need to be patient, as we don't want to lose a kingdom for a horse. There are examples there, Siraj. Premium services, just like Amazon Prime, transaction fees, and manufacturing, just like Airbnb. We just can't get ahead of ourselves. It's absolutely important. We're putting everything in to get the cloud adoption. Our cloud adoption is really, really impressive in the engineering world. Engineering world is not like Facebook or Instagram that you can just adopt it over two clicks. You have to spend weeks to actually move your whole design project onto the cloud. That's where the money is. That's where the value creation is for customers. We're going to stay focused on that. Roger, this is Martin. I think the point on that slide is that it excludes the Octopart revenue from the first half. Okay, got you. Yep. All right. My second question is just on your guidance from now until FY 2025. Your margin for the next two or three years is still around that, call it 36%-39% margin. I'm just wondering how comfortable you are with that margin forecast, given that you need to work harder to sell more term-based licenses. I imagine you need to market the product a lot harder to more users. Martin, I'm going to respond to Roger. Yeah. One of the points that Aram raised during the call was around spinning up the flywheels, and one of those is the digital sales channel. Our thinking is as more of our products and service moves to the cloud, that we would have the benefit of that digital sales channel flywheel, which would reduce the cost of selling versus an enterprise sales channel or our traditional transactional sales channels. When you look at companies like Atlassian, much more of their business is conducted online, whether that's through the actual platform itself or without the need for a heavy sales involvement. That's something that we see as customers adopt the cloud, and they're able to go through a self-service process rather than deal in a large-scale engagement with a sales channel. Okay. All right. Just a quick one on FY 2025 target and 100,000 subscribers. Is that organic number to get to $345 million to $423 million, or does the 100,000 subscribers correspond to the $500 million in revenue? Thank you, Roger. You're asking whether there's a correlation of the 100,000 subscribers to $500 million or whether the number of subscribers will be lower if the revenue was at $420, Roger? Yeah, that's right. Yep. Mm-hmm. The 100,000 corresponds to the range that we provide around that $400 million number. The additional revenue, as we've discussed, would potentially come from M&A. Now, that may bring additional subscribers to the platform. The 100,000 is related to that range as opposed to the $500 million. Okay, gotcha. Thank you. Thank you, Roger. Okay, we have another question from Paul Mason from E&P. Please ask your question, Paul. Hey, guys. I just had three. The first one is just a clarifying point on the guidance. The write-back of the SOLIDWORKS minimum contractual amount. Is that a one-time gain that you're excluding or is that an expense that you're excluding? I wasn't that quite clear. Sure. That's a one-time expense that we're excluding. Great. Thank you. In terms of your Altium 365 user adoption, I just wondered if you could give us a bit of color on sort of the mix that are Altium Designer subscribers or license holders versus people that are sort of sitting in the ecosystem, given if you want it to be sort of a central collaboration platform. Is it mainly coming from the subscribers purchasing alongside or taking up alongside Designer or are you starting to see manufacturers collaborate with your Designer audience? Thank you. It's mainly Altium Designer customers, and they're the most important ones. They're the ones we focused on because without them, other participants would not be attracted to go onto the platform. There are quite a number of mechanical designers that are actually connecting. Many of them actually are excited by the fact that through Altium 365, they can have a completely different experience in connecting to their ECAD colleagues in ECAD systems. There are collaborations beyond just PCB designers. Our focus and the main participants are Altium PCB designers at this stage. Okay, great. Just the last question from me was just a bit sort of a clarifying comment. You guys have talked sort of around this a bit. Apologies for sort of revisiting it. On sort of slide 11 and then also on slide 13, you're very clearly placing Altium 365 in a completely separate field from, say, Dassault's 3DEXPERIENCE WORKS and sort of by implication, Autodesk Forge products, which are sort of also collaboration platforms. Is your vision that basically Altium 365 doesn't actually go head to head with those collaboration platforms? They literally just sit side by side and there's different forms of collaboration going on in each of those platforms, and they're both required to exist side by side for the transformation of the industry? Do you regard those platforms as things that you sort of need to win an audience against? Maybe if you could expand on that. Thanks, Paul. Aram, do you want to comment on that? Yes. It's absolutely the case that these ecosystems, these platforms, are complementary. I would say that they are 99.9% complementary. I don't really even know that 0.1% what it is that would make them overlapping. This is not collaboration in the regular, for example, Atlassian collaboration is, which is teamwork. This is computer-aided collaboration. We call it model-based collaboration, which means that collaboration happens at the model level. With engineering work, there is an incredible complexity associated with models. Now, electronic models are entirely different to mechanical models, entirely different to simulation models. Collaboration happens in the context of a model. It's version control, there's trade. It's an entirely different world to the concept of collaboration or social collaboration. Think of social collaboration like graphics design. Think of model-based collaboration like CAD. They superficially look the same because there's lines and rectangles and squares, but they're entirely different, and the difference is the fact that it's model-based. It changes the nature of the game almost as much as when CAD was introduced back in the '80s. No overlap at all. They're completely complementary. Okay. Thank you. Appreciate it. Thanks, Paul. Okay, we have another question from Mark Trevillion from, just an Investor. Please ask your question, Mark. Yes. I'm probably just the plus member of Turning Point. From 2016 to 2018, you ran long-term incentives purely based on EPS growth. In 2019, you went to 50% revenue, 50% EPS. I know in the annual report there was a change just to 100% revenue, the targets will remain the same going forward. I was just wondering whether you're planning to go back to EPS or you're keeping a mixture of revenue and EPS. Thank you, Mark. The change to revenue in fiscal 2020, I'm sure you can appreciate, was because we were completely focused on achieving that revenue goal that we had set in 2016. Typically, we find that our financial discipline means that our margin and revenue tend to go in harmony, and we weren't concerned that we would have any downward pressure on EBITDA or EPS with a focus on revenue. Of course, the intervention of COVID upset the apple cart, so we didn't pay out any incentive compensation as a consequence of that. We are looking at a mixture of, or we have in place a mixture of hurdles for fiscal 2021, which will get revealed after the publication of our accounts. Thank you. Thanks for the question, Mark. Okay, we have another question from Stuart Sona from Blue Ocean Equities. I'll go to you next, Stuart. Pardon me, Stuart, your line's open. You might have yourself on mute. Sorry about that. Sam, Aram, Martin, hello. I was wondering if we could just clarify the accounting treatment of TASKING, which obviously was taken out as a continuing item in the first half accounts, and how that sort of contributes to the guidance on revenue. Thank you, Stuart. Nice to have you with us this morning. As much as I'd like to dive into the intricacies of accounting, I think it's better that I hand this over to Martin. Thank you. Thanks, Sam. Stuart, when we talked about the guidance range post the divestment of TASKING, how we built that was that we would include the pre-divestment revenue for TASKING in the number in the $190-$195. I think the revenue for the first half was just under $10 million, and yes, there was approximately $1 million worth of revenue pre-divestment in the second half. Okay, that's great. What does that mean then, excluding TASKING for the second half? What would the math be? Let's just take $190. We take out $10.6. Take out around 11? Yep. For the full year, and it'll be 1.2, 1.3, I think, for the second half. Yeah. Okay. The $190 includes the first half contribution from TASKING and the $1 million stub in the second half. Yep Excluding TASKING in that guidance, will be approximately $179. Yep. $80 of that being, I think the, was it $89.6, less than $9.6, was roughly $80 in the first half. Really $80 for the first half means that the second half you're looking at $99, which is a great increase on the $80 in the first half. Yep. I think our goal as we went into the second half. The flight path for 2025, in particular, the post-COVID period or the transitionary period, was really to get momentum back into the business. Regardless of whether we hit 190 or 195 or 188, we wanted to just get momentum back into the business, and we feel that is what we've achieved in the second half. That's a considerable jump, really, between the first and the second half, of course, if you use that bottom end of the range. When you talk about momentum, how do you attribute it? We obviously can see that vaccination rates in the U.S. have come up, and there's been a great resumption in mobility in the early months of the calendar year in the U.S. I'm just wondering how you break that down, or is it perhaps more to do with China or perhaps something else? Well, certainly we've seen, as we talked through the call and in the announcement, record growth we're expecting for Altium. We've also seen a good result in China. China, last year, when we're looking on a period-to-period basis, effectively had a washout in Q3 because of the COVID situation last year. Okay. We've also got the benefit in the current year of the push for volume that we had last year in terms of our subscriptions and our subscription renewals. Yeah. Okay. Look, thank you very much. That's great. Stuart, when we go through August and we've finished off Q4, we'll obviously go through region by region in much more detail. Yeah. Cool. That's all I wanted, just a clarification there. That's great. Thanks a lot. Thank you, Stuart. We just have one follow-up question from Quinn Pierson from Credit Suisse. Please ask your question, Quinn. Hi. Thanks. Apologies for the follow-up. I just wanted to clarify. Earlier when you were speaking about Autodesk and the interest they have in Altium and potential partnerships, it certainly came in a way to me that Autodesk Fusion is really the best use case and the best marriage of those assets. Autodesk Fusion does have some PCB capabilities, presumably from their acquisition of EAGLE several years ago now. Could you maybe just help fill in the gaps on where Altium comes in? Is it Altium could then completely replace and upgrade and improve that existing PCB capability? Or is it more about Nexar providing the extension from Altium 365 deeper into the PCB value chain or something else that I'm confused about? Any elaboration there would be appreciated. Thanks. Sam, I could answer that question. This ecosystem and what we're talking about is not really about this PCB tool against the other PCB tool. The game is much bigger. You have Google Drive, you have Box, maybe you have OneDrive. It's a much bigger game than thinking is that PCB A or PCB B. If PCB B is a better PCB tool and people prefer to have it, then so be it. On the cloud, it is true that the best tool wins, but it's not about that. It's about giving the choice to the customer and not have artificial barriers that would prevent them from switching. It goes both ways. Okay. Thank you. Moderator, we'`ve gone considerably over time, so we're going to have to end the Q&A session now. We greatly appreciate the attendance and all of the questions, and we're always available should investors have more questions. Please contact us directly. Thank you, ladies and gentlemen. That does conclude today's conference call. Once again, thank you all for participating today. You may now all disconnect. Thank you.