Good day, and thank you for standing by. Welcome to the Altium Full- Year Results Investor Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I'd like to hand the conference over to your first speaker today, Ms. Kim Besharati. Please go ahead. Hello, everyone, and welcome to the Altium investor call. I'm Kim Besharati, Chief of Staff and Head of Investor Relations. Joining me on the call today is our CEO, Aram Mirkazemi, in San Diego and our CFO, Martin Ive. Today, Altium released to the ASX, the company's preliminary financial results for the full-year ending 30 June 2021 and investor presentation, which we will discuss with investors over the next few days. Due to unforeseen delays in the finalization of the annual audit process, amplified by the impact of COVID-19 pandemic in New South Wales, the release of Altium's audited accounts has been delayed. Altium expects the audit process to be completed and its audited results to be released within a week. Altium does not expect there to be any material difference between today's release of unaudited financial statements and the audited financial statements to be released shortly. During this call, Aram and Martin will share details of Altium's strong second half performance to achieve the company's full-year revenue guidance and our positive outlook for fiscal 2022. Please note that as a reminder, today's call and the Q&A section at the end may include forward-looking statements regarding Altium products, its future operations or financial performance. Any such statements are based on current assumptions by Altium management and 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. As mentioned, today's call is being recorded, and it will be made available on our website shortly. I'll now pass over to Aram. Thank you, Kim. Good morning, everyone. Financial year 2021 has certainly been a significant one for Altium. We have pivoted to the cloud through business model and organizational changes, and we have been at the forefront of acquisition interest from a global player. What's more is that this has all taken place during the midst of a global pandemic. It is against that background that I'm very pleased to report that Altium returned to double-digit growth in the second half of fiscal 2021, growing by 16% overall. This is a welcome return to strong growth as expected, and it has supported the achievement of our full-year revenue guidance. I see Altium's second half performance as a bellwether for the company's fiscal 2022 performance. I'm excited to say that fiscal 2022 will be a return to winning for Altium earlier than expected. We have upgraded our revenue expectations from 13% to 18%, to now 16%-20% growth for fiscal 2022. Before I go into too much about fiscal 2022, I would like to take a moment to share my thinking on our fiscal 2021 performance. I was most heartened to see our performance come back strongly in the second half. We benefited from improving macroeconomic conditions, and we bedded down our organizational and business model changes following our pivot to the cloud in September 2020. The U.S. and EMEA both performed strongly in the second half compared with the first half and executed well on our business model transition, producing a record increase in our recurring revenue. Having said that, both the U.S. and EMEA have more work to do to deliver on the promise of our recent restructuring to first get us back to our all-time best and hopefully to go well beyond. I'm happy to report that our Octopart and China businesses delivered very strong performances, and momentum is rebuilding in our core PCB business. I'm also excited to see that the strong adoption of our cloud platform, Altium 365, is further strengthening our market position. We now have close to 13,000 monthly active users and over 6,000 monthly active accounts using Altium 365. The rapid adoption of Altium 365 is delivering benefit to the company and our customers on two fronts. First, Altium 365 is enhancing the value of our maintenance subscription to our customers and delivering a SaaS-like subscription, thereby reducing subscription churn for dominance. The rapid adoption of Altium 365 is catching the attention of the industry and attracting the strategic partners that could help us to accelerate our transformative vision to digitally connect electronic design to the broader engineering ecosystem. Looking ahead to fiscal 2022, as I have said, I believe that Altium will return to winning revenue growth of high teens and close to 20%. We have bedded down our business model and organizational changes and are capitalizing on the pent-up demand accumulated over the past 18 months. Our trading during July and August has been strong with revenue up 75% in these two months and new business up around 40% year- to- date. Conditions for Octopart will remain favorable through fiscal 2022 and beyond. I'm confident that China is back and executing well. All in all, we have a very positive outlook for fiscal 2022. As we move forward, it is our new growth engines that will be powering our performance. This is our dominance engine comprised of our PCB software and Altium 365, and our transformation engine based on our cloud platform, Nexar. Slides 36-38 of our investor presentation highlight the nature and the impact of this transformation on Altium. These two engines have begun to build considerable momentum in our core business. This includes the widespread adoption of Altium Designer beyond its traditional reach, establishing Altium design platform, NEXUS and Concord Pro as the future of enterprise software in the high end of the PCB market. The creation of a digital ecosystem, Nexar, for the electronics industry to connect design to supply chain and manufacturing. Adoption of cloud and Altium 365 as the collaboration platform for PCB design. These areas of momentum are critical for Altium to drive its revenue organically towards our aspirational goal of $500 million, which is a fundamental milestone for the realization of our vision of transformation through dominance. Specifically, we will look to drive our organic growth through our strong Altium 365 adoption to significantly improve our subscription renewal rate. The rollout of our digital sales platform to take our transactional sales global to expand reach to drive additional revenue. Leveraging our digital sales platform to drive incremental revenue from existing customers without the need to discount. Scaling our high-end enterprise sales with Nexus through strategic partnerships to expand TAM within the PCB market and drive significant revenue. Expanding Octopart TAM through Nexar to drive additional revenue. Driving license compliance and bringing recurring revenue in China through Altium China 365. Creating demand for smart manufacturing to scale in revenue with high growth profit margin. Our flight path to AUD 500 million, as we have said in the past, may include some revenue that will come by way of acquisition. In such cases, the intent is to strengthen our growth engines and to build further momentum rather than making acquisitions purely for revenue. Above all, our drive towards dominance requires Altium to win in the high end of the market. Whilst we have been dominating in the strongest possible form in the mainstream in terms of seats and Australian dollars, which strategically is most important, we have not as yet done any real damage in the high end of the market by taking customers away from our competitors. Our competitors have been growing their business in these accounts through selling other tools related to IC simulation, which may have given the impression that some of our competitors are doing okay in the PCB design software market. In slide 10 of our investor presentation, you will see that Altium is the only company that has grown its market share during COVID. The numbers that you see in their financial reports are opaque and does not go into any details. On the other hand, Altium is all about PCB and fully transparent in its comprehensive reporting. Altium's drive for end-to-end dominance is picking up another gear, with Altium being the only PCB company with a digital cloud platform and true intent to build an open digital ecosystem around it. This, combined with strategic partnerships with key industry partners, will enable Altium to remove the last stronghold of our competitors in the high end of the market. Slides 29 to 32 of our investor presentation capture the uniqueness of Altium in the wider engineering ecosystem and the opportunity for strategic partnerships. In recent months, we have accelerated our efforts to transition our revenue from non-recurring to recurring. This was caused by the effect of COVID on a proportion of our customers requiring extended payment terms. While initially we extended payment terms, we subsequently offered term-based licensing as an alternative that served our customers' needs and resulted in acceleration of our recurring revenue. The side effect of this has been a certain amount of headwind on our revenue. This, however, should not be taken out of context. Let me further explain. Altium has been transitioning its business model for quite some time towards recurring revenue. In fact, the process started over a decade ago. Our subscription business, which has been the hallmark of our consistent and predictable growth, has been growing steadily, and in the process, it has been converting our customers with perpetual seats and irregular upgrade cycles to subscription seats with regular yearly renewals. Today, we have over 50,000 seats on subscription and 65% recurring revenue. We believe that this process of transition will be completed by 2025, where we will have over 95% of our revenue, excluding China and developing countries, recurring. We do not expect to receive significantly more headwind than was experienced in fiscal 2021 in the remaining years. Considering our strong second half and our positive outlook of fiscal 2022, and all the effort that is going into our core business and momentum building, my confidence about our flight path to $500 million growing is strong. I see COVID as a glitch that has put a year delay in the achievement of our aspirational target. In the previous cycle, COVID at the end of fiscal 2020 caused us a delay of a year to achieve our $200 million revenue target. We actually reached the $200 million revenue target in fiscal 2021 if we include the annualized revenue of Tasking. You will see this in slide six of our investor presentation that depicts our flight path to $500 million. I believe that COVID will have a similar effect on our 2025 target of $500 million by pushing its achievement out by a year. Beyond dominance, our industry transformation agenda is picking up momentum. I would love to share the progress that we are making with Altimade, our smart manufacturing business. We have achieved our first connection between Altium 365 and our Brooklyn assembly facility, which came online in June 2021. The next phase of Altimade will see Altium 365 digitally connect with MacroFab, providing seamless connectivity for Altium 365 customers to a manufacturing environment that comprises 75 electronic manufacturing partners across North America. I believe that this will bring unprecedented scalability to Altimade and set us on a path that makes it possible to have a differentiated user experience more widely available to Altium customers. We expect that our initial service offering will be available in the second half of fiscal 2022. We have launched Nexar to build a digital ecosystem for Altium 365. This is how our industry partners will benefit from access to Altium's vast community of electronic engineers. To date, Nexar has signed up 17 partners such as Arduino, Frontline, Keysight, and Samtec, to name a few. I would like to update you on our pilot initiatives in China with a large Chinese PCB manufacturer to assess the demand and monetization opportunities for Altium 365 China. The first pilot assessing user attraction to Altium 365 China exceeded expectations, as the three-month adoption target of 5,000 users reached 8,000 users of the platform. In China, supply chain intelligence is a highly valued commodity by PCB designers and users of the platform. Altium is leaning into a second pilot to explore monetization opportunities for both Altium 365 and having Chinese PCB manufacturing as partner in the East for Altimade. Finally, I would like to provide an update on our rule of 50 for revenue and margin growth. We anticipate getting back to the rule of 50 a year earlier in fiscal 2022, and to stay with the rule of 50 for the remainder of our flight path to $500 million. The rule of 50 will be calculated using revenue growth and underlying EBITDA as we become more acquisitive following the divestment of Tasking in our drive for transformation. We have highlighted annual recurring revenue, ARR, as it is useful for investors to assess the strength and trajectory of our business. Given the complex rules of revenue recognition, we will provide ARR as a supplemental metric to help better evaluate the annual performance of the business. Over the long term, ARR and revenue lead to similar outcomes. However, there are years where ARR lags revenue growth and other years where ARR leads revenue growth. Altium grew its ARR in fiscal 2021 by 29% and is forecast to grow ARR in the range of 23%-27% in fiscal 2023. You will see a new slide 14, in our investor presentation that focuses on ARR. I will now pass over to Martin. Thank you, Aram. Good morning, everyone. Altium delivered a strong second half performance of 16% overall revenue growth to achieve revenue guidance for the full-year of $191 million, including Tasking and 6% growth for the full-year to $180.2 million on a continuing basis. This is a pleasing result after a slow first half, which was impacted by our pivot to the cloud that involved both business model and organizational changes alongside COVID-19 conditions. As Aram mentioned, we are rebuilding momentum in our core PCB business and still have some work to do. However, our second half performance was considerably better in relative terms in the first half in both the U.S. and EMEA. The months of July and August have been particularly strong months and have continued this upward momentum, which supports our fiscal 2022 financial targets. During FY 2021, Octopart and China were standout performers, growing revenues by 42% and 11%, respectively. Octopart's growth is being buoyed by the shortage in the semiconductor industry, driving up electronic components and part search activity. Offer Clicks, for which we get paid by our distributor customers, finished FY 2021 with six consecutive record-setting months and a total of 16 million clicks, which is an increase of 41% year-over-year. These favorable conditions are expected to continue throughout FY 2022. China recovered strongly in the second half to deliver 47% revenue growth after a slow first half performance to finish the year with double-digit growth. As noted in February, the China license compliance activities focused on mid-tier and large organizations to build pipeline for the second half. This resulted in a significant improvement in the proportion of deals won compared to the previous 12 months. We have continued to monitor the SME segment and see signs that confidence is returning as businesses adapt to the changing conditions. On the new metric of ARR, I am pleased to report that Altium increased its ARR over the course of the year by 29% as we continue to accelerate the transition of our business model from perpetual to term-based and from on-premise to cloud. A significant element of ARR growth during the year is the continuing momentum of customers towards term-based license fees. During fiscal 2021, we sold 1,910 new term-based license seats, compared with approximately 450 in FY 2020. The increasing demand for term-based seats is a positive for our future recurring revenues that had a short-term impact to performance in the U.S. and Europe, with these being the regions in which term-based license seats are becoming more prevalent. Altium subscriber pool grew by a solid 7% to reach 54,394, supporting our pursuit of market dominance and our target of 100,000 subscribers. There was some weakness in our subscription renewal rate in the June quarter. This was related to renewals for customers that had purchased perpetual licenses, particularly upgrades with subscriptions at discounted prices during the height of the pandemic and before we introduced term-based licenses. Conversely, we saw the strength in the renewal rate amongst those who have adopted Altium 365 to the point of virtually no churn. This trend, as it continues, will significantly enhance our capacity to achieve $500 million target and 95% recurring revenue, excluding China and developing countries. Nexus had a challenging year, down by 5% for the full-year to $14.7 million, mainly affected by COVID in the first half. Nexus did, however, return to growth in the second half and closed a significant deal of AUD 1.8 million. Most importantly, Nexus now has the capability to be hosted on the Altium 365 platform, which will remove some of the obstacles for adoption and for scale. Altium achieved a 100% increase in cash balance to AUD 191.5 million because of improved operating cash flows and the sale of Tasking. Operating cash flow was up 9% to AUD 61.7 million. Altium increased its dividend to AUD 0.40 for the full-year, up 3% from last year, with a final dividend of AUD 0.21. In terms of operating expenses, Altium has been focused on investment in its cloud platform. This has included the aggressive recruitment of engineers to support our cloud platform, CAD software, and Nexar products and their rapid development, which contributed AUD 1.7 million of the increase in R&D expenses during fiscal 2021. Sales and marketing expenses grew by 10% to AUD 58 million. This was largely due to additional investments in the Nexar and Octopart business development organization and the expansion of the professional hire and sales channel. Removing the impact of one-off costs, operating costs grew by 5%. One-off costs included the following: AUD 2.3 million for the unsuccessful acquisition bid for Supplyframe Inc., which was acquired by Siemens. A AUD 1.4 million write-back for the termination of the SOLIDWORKS contracts. The positive forfeiture of contingent consideration related to the Gumstix acquisition after participants did not meet service period obligations for AUD 2.5 million. Restructuring costs related to the sales bifurcation and Netflix moment organizational changes for AUD 0.5 million. Altium's EBITDA declined by 3% to $60 million, resulting in an EBITDA margin of 33.3%. This was an underlying EBITDA margin of 36.1%. Net profit after tax increased by 79% to $35.3 million. The effective tax rate has reduced to 26%. The prior year tax expense included a one-time impact of $16.4 million due to the revaluation of deferred tax assets and liabilities in the United States to reflect a lower effective future tax rate resulting from the FDII rules. We completed the divestment of our Tasking business in February 2021 for $100 million and successfully achieved an additional $10 million earn-out for the total gross proceeds of $110 million. The divestment of our Tasking business allows our focus to be single-minded on driving our cloud adoption and building out capabilities for our cloud platform, Altium 365, both organically and through M&A. Additionally, in the second half, Altium made a financial investment of $3 million in MacroFab. MacroFab is a U.S.-based smart manufacturing enterprise based in Houston, Texas, with digital access to 75 factories in the U.S. for the manufacturing of printed circuit boards. As Aram mentioned, this will bring scalability to Altium with our initial offering to customers to be available in the second half of fiscal 2022. In conclusion, our outlook for fiscal 2022 is very positive, and we're committed to achieving revenue of $209 million to $217 million, which equates to 16%-20% growth. Underlying EBITDA margin of 34%-36% and ARR growth of between 23% and 27%. This wraps up the formal part of this call, and I'll now pass over to Q&A. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Garry Sherriff from RBC. Please ask your question. Good morning, Aram, Martin, Kim. Thank you for taking my questions. First question, mainly just in relation to the discounting that you did during FY 2021. Do you believe that might have assisted with some pull forward of orders for the second half performance and also into 2022? I guess the question is: Do you foresee any risk around higher churn or permanently lower pricing of some of those contracts which were signed in 2021 mature over the next 12 months? Hi, Garry. We actually discounted much less during the second half of FY 2021 compared to the previous year. We actually saw an increase in our realized price, particularly with perpetual licenses, through the full-year of around 22% outside of China. That increased second half of FY 2021 to second half of FY 2020 by around 35%. The level of discounting that we did significantly reduced. We believe that one of the factors was the introduction of term-based licensing, which enabled some more price-conscious customers to have a lower entry point to Altium Designer. I think particularly with the start that we've had to FY 2022, I don't believe we brought forward any demand, which I think was a slight issue at the end of FY 2020. I don't see that that's been repeated. Understood. Maybe if you could help me just try and understand. Maybe talk to your pitch and execution plans for getting competitors to integrate with Altium's open digital cloud platform. I'm trying to figure out how you would incentivize your competitors to want to integrate with your open platform. I assume from their viewpoint that they might view it as jeopardizing their existing customer relationships by integrating with you. I'm just trying to figure out, A, what's in it for them? B, how do you get them to actually do that? Garry, this is Aram. If you speaking about our competitors in terms of the PLM and MCAD and CAE companies, these are significant companies, and all of them see Altium completely complementary to their offerings, cloud offerings. For example, Fusion 360 from Autodesk and Altium 365, they are highly compatible, and they are complementary. The same applies to Dassault's 3DEXPERIENCE and PTC's Atlas and so on. From that perspective, it's almost hand in glove, the relationship between Altium 365 and Nexar and our partners' offerings. For example, think of it like our system being CRM system in a business world, and there is the accounting system. You find that CRM and accounting system are part of backbone of a business, and you see the same thing applied to the engineering world. Electronics and the platforms that those companies have, highly compatible. As far as our direct PCB competitors are concerned, we very much welcome their customers and users to come onto our platform because our platform is open. We do not have any restrictions or closeness, and we believe that those customers prefer an open platform. We're actually set up pretty well. When you say that the direct PCB competitors to you, again, trying to figure out how do you get them to want to come across and, I guess, integrate or work with you? It's really their customers that got to come across. We don't need another PCB partner to come across. The partners we're talking about that we want to come across, and there are many of them, are about electronic design and realization beyond PCB. The three companies, Zuken, Mentor, and Cadence, their customers are welcome to come onto our system as ours is open. I don't think anytime soon, Cadence or Zuken or Mentor will be wanting to come on. Having said that, we already have got a partnership with Siemens around their Teamcenter PLM. We're doing a CoDesigner for their NX. It's actually beyond layout and PCB. It's about product design and manufacturing, that electronics is a central part now. Those tribal mindsets are a thing of the past. All these companies wanting to connect to electronics and Altium 365 and Nexar is the best that there is in town. Okay, last couple of questions I've got. One to do with the tax dispute with the ATO. It seems as though in your accounts that you're now talking about the ATO asserting quite a big potential tax liability. In your accounts, that they're talking anywhere from $16 million to almost $120 million. Could you give us a bit more insight in terms of timing around that and what you think the realistic tax liability could be? Look, it's really not about the past. It's an issue between ATO and IRS. As you know, Altium, some 10 years ago, moved its operations out of Australia, and we are now domiciled in the U.S. for over five, six years. This is all about future tax revenue, and it's an issue between ATO and IRS. The things of the past, the years that we're under audit, tax has been collected on that as we have paid all our profits in terms of dividends to the Australian shareholders, and they paid full tax on that. This is really a matter that is about future, and we're going along with the dance, I guess. We've got the best legal team and the best advisors, and we're going to vigorously fight against anything that makes us pay twice to the U.S. and also Australia. We don't expect to pay AUD 0.01. Okay. Just the last question. I know, the previous CFO, Joe, was moved late last year from CFO to the new role as the EVP of Corporate Development and External Affairs to grow the 365 market opportunity. I notice in your accounts, he's now filed a legal claim against you, so clearly he's not with Altium anymore. Just wondering what's happened there, given he'd been with the business for a while and was moved to a corporate development role, and what exactly is this legal claim that he's launched against Altium? The legal claim, as you stated there, has got to do with the timing of his last tranche of shares, and that was due in August as per agreements that he had signed. He basically left before that, and the board is not obligated to pay his shares. It's just simple as that. Okay. Thank you. Is that role of EVP corporate development, is that still open? Has that been replaced? What's going on with that particular role? We're hiring new talent. For this next phase, we definitely are very acquisitive in that sense. This is a big area for us, and we're looking forward to bringing new blood and the next level players. Okay. Thanks very much for your time. No worries, Garry. Your next question comes from the line of Lucy Huang from Bank of America. Please ask your question. Thank you. Good morning, Aram, Martin, and team. I just have three questions. Firstly, in terms of the EBITDA margin guidance for FY 2022, for 34%-36%, just wondering where the incremental investment is likely to be in, which product initiatives, et cetera. Secondly, if you can talk through the strategy moving forward with Altium. You mentioned that you're going to make a new acquisition in second half of 2022. Just with manufacturing, is Altium now looking to actually perform the manufacturing process? Just want some color around the strategy of that business moving forward. Thirdly, you mentioned that Altium has sold 1,910 new term-based licenses this year. What does this bring your term-based license subscription number to? Thank you. In terms of the margin guidance and where we expect cost growth, we do expect to continue investing in the cloud platform. There'll be a level of investment there, which is something that we have done consistently over the last two years. The other area of investment, which we started during FY 2021, is in the kind of higher-end sales channel. That's an area that Aram talked to earlier where we haven't really made a dent yet, but we need to increase the level of the resources that we have in that area. I think one of the things just to note in terms of high-end sales and the investment there, the payback period will be slightly longer than we would get when we normally increase investment in our transactional sales, because the sales cycles are much longer. You would expect the impact of that to be felt in the latter part of FY 2022 from a revenue perspective and then going through into FY 2023. Maybe I can, Lucy, answer the question about Altium. Last two or three years, we've been very much focused on the manufacturing or supply side of the equation as far as connecting design to manufacturing is concerned. We've got our own facility in Brooklyn, which essentially we use as the lab and building out the system and the platform. We've been talking to partners, and we've got our head around that pretty good. With the investment in MacroFab, we now have capacity in the sense that that side of the equation, we're good with that. We do not intend to do manufacturing ourselves. Through MacroFab, we would be connecting to the capacity that is out there and connecting that capacity to the Altium 365 platform. The side that is now set perfectly for us to play is the go-to-market and the customer side of the equation. Now we've got significant number of customers on Altium 365, and Altium 365 now reached a level of acceptance and reliability and traction that is perfect for us to do the go-to-market. We're focused on that, and we're hoping in the second half, we would have our first go-to-market event for Altimade. That's the Altimade. There was a third question. Yeah, Martin, yeah. Sorry, the number of, or the proportion of licenses that are on the subscriber for the term base is around 8%. I'm sorry, could you repeat that? I missed that. It's around 8%. Okay. It's increased from around 5%, just under 5% last year. Wonderful. Thank you. Thanks, guys. Your next question comes from the line of Siraj Ahmed from Citi. Please ask your question. Thanks. I have three questions as well. The first one, Aram, can you just repeat the start to FY 2022? I think you said revenue is up 25% year-over-year in July and August. If so, is it driven by TBLs or perpetuals? Just keen to understand whether the price increase in perpetuals had an impact on sales. I'll start, Martin, and then you can elaborate on that. From my perspective, we're kind of back to our normal business. Our June was a very strong month. As Martin said, we usually in the April while we would run some promotions and so on. This time we did not do that. Given also TBL, we did really well in June. June the year before was a strong June. Now July and August, they're really strong. To me, that's business coming back to its normal state. I don't want to celebrate too early because July and August were low bars last year. They were at the middle of pandemic, and the bars were low. Business returning back to normal. We're not back all the way in terms of producing our best or all-time best, but things are looking good. Yeah. Siraj, I think, as we talked about earlier, we didn't significantly discount towards the end of the financial year. I think that's one of the things that has helped the good start in July and August, in terms of both volumes and the price being supported. That's across both perpetual and term-based licenses. Then also in the Octopart business as well. Got it. Second one. Aram, on the $500 million target, it sounds like you're looking for a higher contribution from the high end now. I think previously you had said 10%-20% on net sales. Is that fair that you're looking for higher contribution? On that, some of the competitors talking about having integrated offerings, right? That's key to cracking the high end. From that perspective, can we understand how you can start doing that as well or crack that market? Sure. With the high end, as Martin mentioned, our focus is really 2025. For 2025, that is essentially a greenfield to us. It's even referred to as a TAM expansion, because in the high end, it's not quite accessible to us in the way that the rest of the market is. For FY 2022, we're going to be making some investments, we don't expect to get a whole lot of return on that, nor do we expect that our 2022 financial year, the needle moving whole lot by our high-end sales. Our organic growth to that $500 million, the high end is going to play a big part, particularly out in 2024, 2025 as we bring the strategic partnerships to a state of fruition. Last one, just looking at the active users and active accounts for 36 5, it looks like it's stepped down from your last disclosure as of 1st June. A little bit surprising, just want to understand what's happened there? It's not. Our metrics are going up. I'm not sure exactly how you're comparing it to. I think If you look at quarter, Siraj, you're going on that daily measure. This is 1st of August, I think the slight downward is caused by most Europeans being away from work during their summer. This is now, which is end of August, it's coming back up. That number is ticking up. You will see in the previous period, 12 months, there are some, like Christmas, it goes down. I think around the same time last year in July and early August, there was a bit of a slowdown, but then it ticks up. That helps. Thanks Aram. That makes sense. No worries. Your next question comes from the line of Roger Samuel from Jefferies. Please ask your question. Well, hi, morning all. I've got three questions as well. You previously disclosed the flight path every year to your FY 2025 guidance. Now with the new guidance to FY 2026, what are your thoughts around the flight path? Are you still expecting some acceleration in the financial year 2024, 2025? Are you sort of walking away from the EBITDA margin of around 40%, given your commentary around the margin floor of 34%? Roger, the thing is with the divestment of Tasking, the margin impact of that divestment hasn't come through, hasn't quite come out of the wash yet. The revenue, obviously it has, and it's very easy to follow. Tasking wasn't a complete standalone business. It was fully integrated into Altium. It takes a while for that to wash through. Right now, we're not making a statement about our EBITDA margin at the end of 2025. Like I said, 34% and a CAGR of 20%, greater than 20%. It gives you a rule of 50 for a company that is going after the big vision and transformation. I don't think it gets better than that. Okay. My next question is on your tax rate going forward, given all these tax disputes that we just talk about, what should we expect in terms of tax rates going forward? Yeah. There are a couple of uncertainties with the change in administration in the U.S. We do expect that there'll be some changes in tax legislation in the U.S. that may impact tax rates going forward. We expect the tax rate to be in the 23%-26% range for the foreseeable future, unless we do see any U.S. tax changes. The U.S. is the domicile where we see the majority of our tax paid, and so any changes in U.S. tax rates, obviously, will have a significant flow-on impact for the group rate. Okay. My last one, just on your partnerships around Nexar and Altium 365. You mentioned about key clients for one of the key partners, which is great. What would actually bring to the table? Can they actually introduce their customers to Altium to use 365 or perhaps Nexar? I think it, first and foremost, will bring a great level of productivity to the whole process of designing smart products and manufacture them. The impact of that is going to be very significant for most our customers and their customers. I'm sure we won't have trouble monetizing that when the value is delivered, and the impact is felt. We're focusing on getting the users and customers onto the cloud platform. That's the main focus for us, and demonstrate the value of this new platform. From there on, it's a stone's throw to get to the software that you're referring to. Okay, great. Thank you. Your next question comes from the line of Paul Mason from E&P. Please ask your question. Hi, guys. Three from me. The first one, I was just hoping you could clarify the Slide 10 around market share. Is that revenue or is that users? It's revenue. Okay, great. Just the next one. You've made a couple of attempts at pretty significant acquisitions with Supplyframe recently, and then Arena Solutions by the sounds of it as well last calendar year. Can you maybe talk about why you're not looking at just taking your margins down and trying to build a product like those instead of trying to buy them? Well, you know Supplyframe and Octopart are the only two assets in the industry that connect the design through search to the supply chain. Whilst Octopart is the leading search by both revenue and performance, Supplyframe was going to give us a complete hold in this area and for our purposes, it would've expedited, accelerated our journey. We went really after it hard. You can see, we put everything in. We were against a large competitor and we actually got there, and we got the word that we've got it, and then there was only one issue remaining, and that was to clarify the funding in Australia and Australian laws and so on. Goldman Sachs was behind us, and they gave all the assurances needed. The owners of Supplyframe still wanted to get additional assurances and didn't know the Australian laws around capital raise. That opened up the window, just the door just wide enough for our competitor to come in. Essentially, we could not compete against their assurance as far as the cash was concerned. That was a miss. We did well. Many people said, "You don't have a chance." We came that close to having it. Of all competitors, Siemens is one that I don't know ending up with Supplyframe. Okay. That's a great answer on the first part. The second part was more about, as well then, so with Arena Solutions, which is a capability that I don't think you guys have something in your current offering that sort of matches that. Have you guys thought about trying to just build that yourself, and sort of not worry about trying to maintain margins over the short term and just go all in on product strategy? Well, this Supplyframe, Altium and Octopart, they've got a strong leaning towards the designers. Supplyframe provides the same functionality, leaning towards manufacturers and procurement people, which are the other side of the river, if you like. The functionality is the same, so it's really the user base that we were interested in. We don't have a direct access to manufacturing people and supply chain people who work in these organizations of our customers. We have access to the designers, which is our side. We wanted to get a foothold on the other side through Supplyframe, and that was the purpose. It wasn't product capabilities and such that pulled our interest in Supplyframe. Okay. That's all from me. Thanks. Your next question comes from the line of Elise Kennedy from Jarden. Please ask your question. Thanks, guys. I've just got three quick questions. Firstly, on China, it looked as though that had a pretty good growth in the last half, particularly. I'm curious to know what role that business or that geographic segment plays in your aspirational targets looking forward and how that's changed over time. The second question is just around NEXUS. You talked about putting more costs back into that business to really get a foothold of that market. Is that just in relation to the sales side, or is there also some R&D capability that you require to really tap into that high-end customer? The last question is just around the relationships with Dassault. If you can give an update as to termination of SOLIDWORKS, but where that relationship sits going forward. All right. The first question about China. China's significance for Altium is high. They have always been a big part of our business. We have got a tremendous amount of presence in China in terms of electronics. Virtually all users in China use our software. We do not count on China beyond its current weight with respect to our $500 million flight path and that pursuit of that aspirational goal. We do have high aspirations around China, particularly around Altium 365, that if users in China see value in Altium 365, it can change the game for us in China. From that perspective, China is not going to be carrying more weight than it has done in the past. As far as high-end sales concerned, this is entirely scaling out our enterprise sales. We've got the product, the platform, there is no R&D issues here at all. It's scaling our enterprise sales in such a way that it will not be a drag on our EBITDA. We are highly efficient in the mainstream in terms of the operating leverage that we have. We want to make sure that our enterprise sales will have the same operating leverage. That's the key for us. We're not simply going to enterprise like classic enterprise companies. We're very mindful that that won't turn into a drag on our EBITDA. Now, as far as Dassault is concerned, as I mentioned before, it's really a resetting of our relationship, and the heart of it is how we can have Altium 365 and Nexus, which are our cloud platform, connected to their 3DEXPERIENCE and platform. They have been very open and have been very much respectful of the relationship. The old chapter, we have to close that. We did that, and the new chapter is about cloud and Altium is more of a peer to that 3DEXPERIENCE than a component of it. I expected that relationship to go well in the next phase. Great. Thank you. Your next question comes from the line of Josh Kannourakis from Barrenjoey. Please ask your question. Hi, Aram, Martin, and Kim. I'll be very quick, and I just got on the call, so apologies if this question's been asked, but I just want to ask on Octopart, a significant step change there. I'd love to hear what you've seen in terms of engagement levels. You've given some quick data, but in terms of the number of customers that are recurring on the platform, any other details you can give and just some context around how you're seeing that as a start to this year as well. With Octopart, obviously, is doing really well. Because of the supply chain disruptions and the higher level of activities in all organizations and manufacturers. Octopart's traffic, you see in one of the slides, has dramatically gone up. Octopart now is in the center of our Nexar platform, which really changes the game in the sense that Octopart is not just a search, it's right in our ecosystem platform, Nexar, and we believe that the opportunities for monetization are now much greater. There are many partners attracted to our Octopart services, and we believe that this is going to increase the attractiveness of our platform. Octopart already monetizes out of its traffic in a very strong way, and I believe that selling motion or that mindset is going to drive revenue for us in Nexar. I see Nexar and Octopart as a very strong combination, and that's working well. Got it. No, that's great. I'll wrap it up there. Thanks. There are no further questions at this time. I would then like to hand the conference back to Mr. Aram Mirkazemi for any closing remarks. Please continue. Thank you. In conclusion, with a strong second half performance, we have an optimistic view of fiscal 2022. We are upgrading our revenue expectations to return to our strong pre-COVID growth of 16%-20% earlier than expected, which is even more significant when you consider our business model transition and our move to the cloud. We expect our ARR growth to be 23%-27% in fiscal 2022, and are on track to have 90% of our Altium revenue to be recurring by 2025, ex China and developing countries. Our focus in fiscal 2022 will be to continue with our cloud adoption and to scale our high-end professional sales through strategic partnerships for significant TAM expansion within the PCB market. With growth coming back earlier than expected and the rising popularity of Altium 365 driving strategic interest in Altium, our confidence in our $500 million revenue target is high. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.