Thank you for standing by. Welcome to the Altium Limited half year results investor call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by one on your telephone keypad. I would now like to hand the conference over to Kim Besharati, Chief of Staff. Please go ahead. Good afternoon, everyone. Welcome to the Altium investor call. As mentioned, I'm Kim Besharati, Chief of Staff and Head of Investor Relations. Joining me on the call today in Sydney is our CEO, Aram Mirkazemi, our President, Sergey Kostinsky, and our Interim CFO, Richard Leon. Today, Altium released to the ASX the company's financial results for the half year-ended December 31, 2022, and our investor presentation, which we will discuss with investors over the next few days in Sydney. During this call, we will share details of the strong financial performance for Altium for the half year FY 2023 and our confidence in achieving our full-year guidance. Specifically, Aram will share color as to how we're making great progress toward our goal to dominate the PCB software industry and to transform the global electronics industry, where we intend to bring both the practice and the business of engineering onto our cloud platform, Altium 365. Richard will share details around our financial performance for the half. Please note as a reminder that 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 the current assumptions by Altium management and are subject to risks and uncertainties that may cause actual events and results to differ materially. Please note that all numbers are in US dollars unless specified otherwise. Today's call is being recorded and it will be made available on our website. I will now pass over to Aram. Thank you, Kim. Hello, everyone. Today I'm going to share with you our progress for the first six months of the current financial year and provide insight into what has driven our performance and what is going to underwrite the success of the second half and beyond. Of course, the first and foremost measure of performance for us is revenue and earnings growth. I'm pleased to report that we have done well on both accounts. Revenue grew by 17% on a reported basis and 22% in constant currency terms, and our margin increased to over 36%. With this performance, Altium again demonstrated the robustness of its business and its financial strength. It was a balanced contribution from the two sides of our business. Our design software business contributed 16% growth and our cloud platform business, Octopart, delivered 22% growth. Those businesses combined to move our volume and value levers to deliver sustainable growth, with Octopart compensating for its declining offer clicks from the COVID peak with increased average revenue per click and with our design software increasing average subscription seat price to compensate for the full impact of Altium exits from Russia and the COVID breakdown in China. The revenue growth in our design software business came from a combination of Altium taking advantage of its dominant position in the mid-market and driving volume with unprecedented efficiency and at the same time leveraging the unrivaled value from our cloud platform to encourage customers to move to higher level product capabilities. This unique combination will support the sustained growth of our design software business for years to come. Our dominance in the mid-market has now reached a point where we do not have to do much selling to close sales. Our sales cycle in the mid-market has shortened from historic six to eight weeks to now averaging around three weeks. This translates to a reduction in the cost of sales and allows us to focus on our value proposition for the higher end product capabilities. Our volume performance, both on the number of subscriptions and new licenses, while satisfactory, could have been a whole lot better if we had not divested our 1,000 subscription seats in Russia and the China market had not closed for us in November and December. Our effectiveness to sell our higher product level capabilities is moving forward in leaps and bounds with a two-pronged attack from both the mid-market and Enterprise engagement to drive adoption and revenue growth. What's remarkable is our mid-market customers are moving on to Pro and Enterprise level capabilities through a transactional selling motion, which drives our bottom line. Our Enterprise and Octopart sales teams on the other hand, are combining to leverage our cloud platform and our strong position in the supply chain along with our strategic partners to drive larger strategic sales. This new approach and the unique combination of our volume and value proposition has allowed us to steadily grow our average subscription seat value. The average subscription seat value has now reached $2,304, up from $2,170 at the start of this half. This increase has been driven by the effectiveness of our cloud platform that facilitates the adoption of higher product level capabilities by the mainstream customer and has had little help from price adjustments. I should mention, however, that we made some pricing adjustments in the first half that have just started flowing through. These pricing adjustments are for both perpetual and term-based new licenses in addition to subscription seats. This has had a minimum impact on our revenue in the first half, with a less than 5% impact on the increase of our average subscription seat value. The price adjustment, however, had a short-term negative impact on the number of new licenses sold. Since we started transitioning from perpetual to term-based licensing, we have steadily been increasing our perpetual license price to encourage the adoption of our term-based licensing. In the first half for the first time, our average realized price for each new perpetual license reached $7,000. This is quite high by our historical standards. As a result, in the short term, this has kept the number of new licenses sold flat in Americas and EMEA. This, in addition to the impact of China and Russia, reflect our drop in the total number of new licenses sold in the first half. For our cloud platform business, the value and volume levers have a different dynamic. Volume is driven primarily by external market forces, which had a huge spike during COVID as the extreme demand for electronic products and the decoupling of the US and China economies put strain on the supply chain. On the other hand, the value lever, as indicated by the average revenue per click, has got a long economic runway that indicates that Altium has hardly scratched the surface of potential revenue growth. Compared to Octopart, other aggregator and search platforms such as those in real estate, car sales, travel and the like, receive a much greater reward for the value of the economic impact that they deliver within their industries. I believe that Octopart has a lot left in its value lever that will drive our Octopart revenue well beyond its current levels. For us to get to the same level of reward for our aggregation and search capabilities within the electronics parts industry, we need to move Octopart from the second level in the industry value chain below distribution to the top of the industry value creation in electronics supply chain. This will allow us to fully realize the economic potential for Octopart. Our strategy for this is to fully deploy and unleash Altium 365 to bring the design world into the front and center of the supply chain, and as a consequence, position Octopart at the top of the industry value chain. Before elaborating further on this, let me first tell you about Altium 365 itself and how we have progressed in the first six months of this financial year. With Altium 365, we have continued to drive a strong adoption amongst PCB designers, and as of this month, we have over 33,500 monthly active users, up 36% and over 12,000 monthly active accounts, up 29% since August last year. This progress is very pleasing and I expect it to continue. We are now setting our sights to bring a new class of users onto Altium 365 that come from a different segment of the industry. This class is the most critical class, as these are professionals who are in the supply chain and are at the heart of procurement processes, and hence at the heart of the realization of electronics hardware. Many of them are regular visitors to Octopart's website and number in hundreds of thousands. We are developing capabilities within Altium 365 that make it particularly appealing to procurement professionals. We believe we are not far from a point in time when we can pitch Altium 365 directly to the supply chain community through our Octopart website without any reliance on our popular design software brand and its value proposition. This will mean that we will be able to create a true network effect on Altium 365 by having two distinct classes of users within the industry operating on the same platform, which is critical for transformation. It will also ensure that our competitors can never catch up with us. As with all cloud platforms with network effect, the winner takes all. To bolster this effort, we intend to augment our existing positional strengths with carefully selected M&A targets to make the Altium 365 value proposition even more attractive to supply chain professionals. To that end, we recently appointed a new head of M&A who is part of our executive team in San Diego. I would now like to say a few words about the progress that we are making with the direct monetization of Altium 365. Our approach to monetization divides the value proposition of Altium 365 into the two categories of the platform itself and the higher-level business capabilities that run on that same platform. We intend to monetize the platform as a service with capacity-based monetization and the higher-level business capabilities with the SaaS business model monetization approach. We are currently preparing to enter a pilot phase on both approaches to determine optimal pricing for value to both Altium and its customers. The platform monetization will be of particular significance in the higher end of the market as it is increasingly attracting industry partners. We are working with strategic partners to explore and exploit opportunities in the form of industry solutions for electronics. This includes large strategic partners in the semiconductor space, in simulation, and digital manufacturing. I should also add that while this is exciting and full of potential to bring our enterprise sales, strategic partnership, and cloud monetization together into a synergistic endeavor, I do not want to give the impression that we are there yet, but I will be sure to keep you informed of our progress. Another point that I would like to make is that the mid-market monetization of Altium 365 will be slightly staggered and is not dependent on our enterprise and platform monetization. It will lead with the high-end first to achieve optimal monetization and then to be followed by the mid-market. What I covered so far is an indication of some of the progress that we have made in the first half that I believe is significant and that I wanted to share with you. I would now like to turn to how we intend to deliver on the second half and beyond. As I mentioned in August, demand for electronics continues to grow. Emerging trends such as 5G communication, electrification of cars, autonomous driving, industrial IoT, AI and data science, mobile devices, and the general demand for smart connected products are driving demand for electronics and our software. As for our business, the tailwinds and headwinds that I mentioned in August remain the same for the most part. The headwind associated with Altium business model transition from perpetual licensing to term-based licensing is subsiding as the pool of term-based licensing is growing in size and with its recurring revenue countering the drop in our perpetual license revenue. Another headwind is related to our digital sales and its effectiveness with respect to scale. While digital sales have had great success in creating efficiency and therefore paving the way for scalability, its effectiveness to convert opportunities that require deeper engagement remains work in progress. I expect that we will begin to make headway in the second half with our continued drive to bring effectiveness to our digital sales. Our tailwinds, on the other hand, are pretty strong and include Altium 365 increasing the attractiveness of Altium's design software even further, resulting in greater demand and greater competitive advantage. Altium's design platform with advanced data and process management capabilities continues to gain mainstream adoption, which is resulting in higher revenue per seat. Octopart will continue to leverage its dominant electronic parts search position and drive higher realized value. What is important to note about Altium's tailwinds and headwinds is that our tailwinds are coming from our competitive advantage and our aggressive pursuit of our strategy of dominance and transformation, and as such, are expected to grow stronger in time. By contrast, our headwinds that I have described are temporary in nature, and we are already at the back end of their impact. In addition, the decoupling of the US and China economies and China's rapid recovery from its COVID breakdown and return to a normal business environment creates new opportunities for us in China. We expect our second half performance in China to be much improved compared to our first half. With conditions improving, we are putting particular focus on China in the second half to restart and to reinvent its engine as a key contributor to our aspirational financial targets for dominance and transformation. In conclusion, I would like to say I'm pleased with our first half performance. I believe that we are building real momentum in our software business and bringing transformational impact through our cloud business. I'm confident about our second half and believe that we will achieve our full-year revenue and margin guidance, and I have great optimism about our business in the next three years. I will now hand over to Richard. Thank you, Aram, and good afternoon, everyone. Thank you for joining us today. I will move through these financial slides relatively quickly, as I'm sure people would like to participate in the Q&A at the end of the session. Altium has delivered another impressive financial performance for the first half of 2023. Our key financial metrics of revenue and earnings growth gives us the conviction to commit to our full-year guidance in a challenging business environment. Let's start on slide 11, where we continue with a more streamlined two part business strategy for design software, which is digital and Enterprise, and cloud platform, which is SaaS monetization and seller pays revenue from Octopart and Nexar. As we did in the 2022 full-year, we continue with applying a warm yellow color spectrum to denote our design software business and a cool blue color spectrum for our cloud platform business. For the first half FY 2023, Altium delivered group revenue of $119.5 million, up 17% from the previous corresponding period. Both design software and cloud platforms revenue grew. Our design software business performed strongly, growing revenue by 16% to $91.6 million, an incredible effort by the team who had to overcome significant currency headwinds we experienced this half. For context, design software on a constant currency basis would have been $96.9 million or 22% increase on pcp. Our cloud platform revenue was up 21% to $27.9 million, and our sticky recurring revenue increased from 74% to now near 80% of total revenue and was assisted by further migration to term-based licenses. Standard design software on slide 12 shows how each of our regions fared. As foreshadowed, China performed below expectation as it continued to feel the lingering effects of drastic lockdowns. The rest of the world was flat, with sales growth in India somewhat compensating for our exit from Russia. As for our major regions, Americas revenue was up 25% to $39.1, and EMEA, whilst the slide shows 21% in US dollars, was up by 29% in local currency to EUR 33.1 million. On to slide 13, we speak to the simplified nomenclature of our design software products renamed to Standard and the higher value, higher level offerings of Professional and Enterprise. This page is quite telling in that the quality of our design software revenue growth is enhanced by the take-up of our mainstream customers who have adopted our pro-level platform capabilities, with revenue up 83% to $17 million. Our Enterprise sales performed well, with revenues up to $12.7 million for the half. Standard revenue dropped slightly, partly driven by the migration to Pro as well as the modest performance by China as previously shared. Looking now to our annualized recurring revenue, ARR, on slide 14. Our design software ARR grew 15.5% to $133.7 million when compared to the previous corresponding period. This slide closely mimics the previous half year revenue slide by product. ARR is a key metric for Altium that provides the focus of our sales efforts to achieve volume and value gains, as well as the transition from perpetual to term-based license. This segues nicely onto the next slide on 15. For those that may be new to Altium, this slide shows the relationship between ARR and subscription seats. The graph on the left side combines our ARR with the number of subscriber seats, from this we derive our average subscription seat value. In other words, our annualized recurring revenue of $133.7 million divided by our subscription pool of some 58,000 to arrive at an average subscription seat value of $2,304. This represents an increase of 11% compared to the previous half year. On slide 16 speak to new seats sold during the period, including all Standard, Pro and Enterprise. As Aram mentioned, we are seeing the impact of COVID lockdowns in China and the exit from Russia, as well as the short-term impact of price adjustments to new seats. To design software active license pool that continues to grow on slide 17. Aside from noting that we have surpassed 100,000 active licenses, the highlight here is the increase of fully adopted cloud license to 15,700 as of February, up by 21.7% since August. Rolling on to slide 18 to our subscription pool, and as we have traditionally shown, the waterfall split between developed and developing countries. The change in product mix is positive as more mainstream users are gravitating to our on-cloud platform offerings. Also good to see was an improved performance with several successful upgrade rejoin campaigns during the half, and our renewal rates continue to be strong. As we foreshadowed in August, we anticipated offer click volumes for Octopart on slide 19 would decrease from the highs of the extreme spike from the supply chain strain that Aram mentioned earlier. For the first half, Octopart received 13.8 million clicks when compared to 17.3 million clicks for the previous six months ending June 2022. In spite of this, we improved our average revenue per click to enable us to deliver half year revenue of $27 million. I'd like to point out this page is an accounting view of at the transactional level. Aram earlier spoke to the more critical demand for the value potential in Octopart and how we see this will benefit us in the coming halves with the potential in increasing the average revenue per click significantly. Adoption of Altium 365 is covered in slide 20. Monthly active accounts and monthly active users continue to grow. As Aram mentioned, grow over 33,500 active users and over 12,000 active accounts in early February 2023. Whilst this is not shown on the slide, the ratio is now 2.8. The significance of this is that new and different users, such as mechanical engineers, procurement managers, et cetera, are active on the platform, thereby expanding total users beyond our traditional user base. This is a major part of our dominance and transformation strategy. Onto our financials. Our operating expenses on slide 21. Operating expenses, the difference between our revenue and EBITDA increased by 13% to $76.2 million compared to the previous period. As mentioned, our reported EBITDA was 36.2%, up from 34.1% one year earlier. Note, we amended the first half 2022 bar to correct the allocation of expenses into the right categories to be consistent with other periods, including full-year presentations. With this done, R&D increases for this half were driven by higher cloud infrastructure costs associated with increases in Altium 365 adoption. We also incurred costs related to our withdrawal in Russia. Sales saw a modest increase in costs when compared to the previous corresponding period, which we attribute to our improvement in digital sales efficiency and also delivering, enabling us to deliver reduced sales cycles. Having said this, we acknowledge we have open positions to fill in both sales and R&D, or what we call internally product and go to market, and are working hard on the recruitment front. As for G&A, we added much needed corporate capabilities and will continue to pursue this drive to fill capability gaps in our pursuit of breakthrough and transformation. We also incurred additional costs related in our defense of the tax audit with the Australian Taxation Office. I'd like to speak to our dispute against the Australian Taxation Office. While details have been provided in our 4D under the contingent liabilities note, we have conviction in our belief this is the correct treatment, and it is supported by our professional advisors and external legal counsel believing we have a strong case. We are of the view that the Australian Taxation Office has not considered all relevant facts, and this is given expression in that the amended assessments we have received have an effective tax rate of 65% of our worldwide income. Altium will continue to challenge and take this matter to the Federal Court. To slide 22, Altium continues to have a strong balance sheet with cash balance up 3% to $205 million and zero debt. Moving quickly to the next slide on 23, where the cash generative nature of Altium's business, underpinned by growing recurring revenues, allowed us to declare an interim dividend of AUD 0.25 or 19% increase. Free cash flow stayed at the same level of $32.9 million, compared with $32.8 million at the previous period, with higher cash receipts from customers offset by tax and supplier payments. Cash conversion remained strong and stable, demonstrating the quality of our revenue and improving operating leverage. Onto my final slide on 24, and in summary. Altium delivered another period of resilient top-line growth with revenues of $119.5 million, up 17% despite currency headwinds. This was achieved through the following Altium qualities. Increased uptake of our higher value, higher level Pro and Enterprise capabilities. Realization of higher subscription seat value. Faster than expected business model transition from perpetual licenses to term-based licenses. Recurring revenue now representing 79% of total revenue, improving our annualized recurring revenue. Active designer software licenses surpassing 100,000, improving Octopart average revenue per click. Altium's uncompromising commitment to real cash earnings culminated with underlying the EBITDA margin improving to 36.2%. This positive momentum going into the second half provides us with conviction to reaffirm our guidance for FY 2023. This wraps up the formal part of the call, now I will pass to Q&A. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Bob Chen with JPMorgan. Please go ahead. Afternoon, guys. Just a few questions from me. Just in terms of subscriber growth for the business, I think there were some comments there. You're expecting sort of 60K subscribers by the year-end, so it does imply some acceleration from here. When we look at your 2026 targets, it implies even more acceleration over the next couple of years. What gives you confidence that you can sort of achieve that sub growth rate? Thanks for that question, Bob. Guess right now, we've got this headwind that is happening because of the macroeconomic conditions around, for example, Russia and China both. If you look at our subs pool on the page on the slide, 18, there is a drag that was caused by Russia and also because of China couldn't renew their subscriptions. Well, with Russia is a one-off thing. We essentially dropped over 1,000 seats that it's gone. We exited from Russia, so we're not gonna worry about that. That drag isn't gonna stay with us. In terms of our second half getting to 60,000, we're confident about that. We also believe that our cloud platform is the fundamental driver of our software subscription, because without it, you wouldn't be able to connect to our cloud platform. Our volume is a key factor. As I said in my formal remark, that is the area that we need to be able to scale with our new digital sales. I believe that, you know, we will be able to pick up the run rate beyond the second half and get into that zone to get us to the range of 75,000-90,000 for $500 million. I believe 100,000 still is a distinct possibility. We just got to get out of this last two or three years where we've gone with the cloud. A lot of changes in our organization, a lot of changes outside. They're settling now, and we're getting into a nice rhythm. The run chase is on, and we're gonna get there. Okay, great. Maybe just on the Octopart business, obviously a pretty pleasing lift in that cost per click. How are you sort of thinking about that going into the second half? I mean, that number you provide looks like an average number. Is there a sort of exit number that you can sort of provide on your CPC? There isn't an exit number that we can provide, but essentially this is how we view the balance between volume and value with Octopart. You know, our Octopart business run generally by us bringing traffic and forwarding them to our partners. The way that the traffic gets monetized is highly sensitive in the way that we negotiate the contract. You can see that the offer clicks. That is not a measure of volume of traffic. That's a measure of our monetization of that traffic. You will see that if that drops too suddenly, because of the contractual obligations of our partners, our value kicks up in the way it did. We try to moderate those two and grow them consistently. The concept is very similar to our design software, the value and volume, of course different, but there is a relationship between the two. In the second half, we're gonna bring the offer clicks up through try to do that through a better monetization, a more effective monetization under the conditions that they're in. Okay, great. Just a final one for me, just in terms of designer price rises, how should we think about the cadence or regularity of price rises across the suite going forward? I think it's been our policy to steadily increase our perpetual license seat price over time, rather than essentially not making it available like some other CAD companies done that. We have believed that it should be available, but that we definitely encourage our customers to go with term-based licensing. We are not going to further increase our prices this year. The as I mentioned again in my formal section, the effect of pricing is to encourage people to go term-based licensing, but we also responded to inflationary forces environment. That's not going to be something that we're going to do on a regular basis. Hopefully the inflation will come down soon, and we'll all be out of this situation. Great. Thanks, guys. Thank you. Your next question comes from Nicholas Basile with CLSA. Please go ahead. Good afternoon, Aram and team. Just two questions from me. Just the first question, you talked a little bit about the impact of Russia losing 1,000 seats. Are you able to give us a bit more detail on the impact either in revenue or EBITDA terms? Secondly, you talked a little bit about there being a softer macro. How should we think about that impacting, I guess, those click volumes or perhaps the subscriber growth in the second half relative to the first half? With Russia, our revenue from Russia would have been around $3 million and plus. We pretty much have lost all that revenue and that had a quite a strong portion that was subscription and incrementally adding seats, and that would grow the pool and it would grow that revenue. We essentially lost that in the first half this year when we did not renew any of those licenses and exited Russia. That's the content for that. The volume drive, we're getting to our 60,000 for the second half. We're pretty confident about that. It's mostly internal in terms of us optimizing our resources between the value drive and volume drive. We have been very open to the market from three years ago. We said that we want to change our transactional sales in such a way that we have referred to it as having that out of the loop, so we can do it efficiently so that we can drive volume efficiently. Now, we've done that, and you can see that we're matching previous years' volumes without having salespeople involved, which is great. We've reduced the sales cycle from six to eight weeks, down to three weeks. This is all great, but we've got to go beyond our traditional levels and increase the run rate, and I'm sure it will come. We're also putting a lot of our focus on the value sales that you see for Pro and our Enterprise-level capabilities. We're selling them and that's all revenue, and it's all going to the bottom line. The system's working well. It's just that digitization of our transactional sales, not all parts of our transactional sales are digitizable equally. Certain parts, we've got to put more efforts. For example, to just give you a sense of that, if your business has been operating for 10 years with software from our competitors and you want to switch to Altium, not because you didn't know about Altium, and you found out about Altium and switched. You've been wanting to switch to Altium for some time. You need our support for the transition as opposed to the decision to buy. Our new digital sales is not as effective in providing support for customers such as the ones that I mentioned to transition across. They will work it out. It's just that, you know, they have to work it out themselves. We try to bring automation and certain capabilities that will facilitate that. We're not gonna put high-end salespeople to engage with them for just helping them cross the street. They already made decision. We don't need to actually put sales dollars for that. That is more of a support question. We're gonna be able to get that as well. The volume, I know that you guys wanna be focused on the volume. The volume is born out of the strategy of going with digital sales, and we're doing fine with the volume, but we need to pick up the run rate and that shall come. Okay, great. One other one, if I can squeeze one in quickly, just on the currency headwinds. You called it out, I think, for Europe, can Richard perhaps provide any context to the rest of the world segment and the sort of more overall impact of that across the business? Sure, Nick. You know, roughly about a third of our revenue is invoiced in non-USD dollars. The two main culprits that contributed to the headwind were EUR, that was about 22%, and GBP, which is about 5%, and then a mixture of other currencies. Okay, great. Thanks very much. You're welcome. Thank you. Your next question comes from Kane Hannan with Goldman Sachs. Please go ahead. Hey, guys. Just three from me as well, please. Ask them in turn if that's all right. Maybe just starting the step up in Altium 365 users and accounts in February, it's quite a big gap higher. Just talk about what drove that step up in February. You know, is there any sort of noise in February that obviously isn't captured in the previous quarterly data points? And then in terms of the, you know, the commentary around beta trials and the like coming soon, I mean, is that really a revenue story in FY 2024, or you don't think, you know, we should think about commercializing it into the FY 2024 numbers? The first question, it's got a very simple explanation. We found that at the end of each period, that is December or June, there is a decline in activities on our Altium 365. The way we calculate active monthly users, active monthly accounts, they get impacted by the slowdown at the end of period. This is particularly marked in December, you also, like June, you see that the summer holiday for Europeans come up and there's a slowdown in activities. What happens in the subsequent months, that is January to December and it's more July and August. It's more August in the second half where Europeans come back and the business has this spike. Essentially it goes flat and has a big jump in February, and that's exactly what happened. The way we presented this chart in the past, it would have shown that quite easily. Now with the quarterly presentation, you see the charts are averaged out, but then we call that February, so you can see what the February activities are. That's for that. As far as the monetization of Altium 365 is concerned, we are building a great base on Altium 365. There are thousands of companies on it now. There are thousands, tens of thousands now, active users on it. It's very important for us to get its monetization right in a way that it's fair to our customers and fair to us. That is directly related to the economic impact of Altium 365 on our customers. Whilst Altium 365 is great for users in terms of their productivities and their convenience, if you like, because they've got everything on the cloud, and they can do a lot, and they can collaborate. Its real impact is on the organization. It's real economic impact is on the organization that that user is in. We wanna make sure that we don't shortchange ourselves by trying to get the monetization on the user and in some ways become penny-wise and pound-foolish. We're gonna start from the pound, and the penny will take care of itself. To that end, as I said again in my formal part, is that we're going to stagger the user monetization until we achieve optimum monetization from an Enterprise. Now that I cannot give you a time scan for that. Obviously, for the 2026 target, we need to bring the monetization of 365 in to get to our $500 million. The answer would have to be in time for us to be able to have a defining impact, if you like, on our revenue runways. Perfect. Then maybe just on the churn side of things, following the price rise that went in. Have you seen any impact on your churn in the subsequent months that we should be thinking about in that second half outlook? You know, I think you were talking about 100 net adds in the, you know, in the month of January, and you can sort of back that out. How do I think about the churn in the second half? There has been a little bit of a churn. If you look at our Americas, we've developed pool. We were just above 90% in the past or close to it. We just dropped by 1 percentage point. I believe it's a combination of the macroeconomic conditions, inflationary environment, and everyone's in, and our increased prices. I believe that will come back up. It's always the case that, in our industry from back a long time ago, whenever there is a price change of that kind, you have an immediate response, and then it goes back to where it was before. It's opposite to commodity like petrol and things like that initially everybody pays at the at the petrol station, whatever the price is, but then after a few months, you desire to ride your bike and not use your car as often. In the professional world that they're in, is the opposite. It slows down some decisions for a little while, but then it comes back up to the level that it was before, and everything would normalize after that. Perfect. Just one last quick one. I think the Nexar cost base was down about $1 million, sort of in this half. Just remind us how to think about, you know, the Nexar cost base, whether they need to step up in the second half to drive that, you know, improved cost per click or things I should be thinking about? I think what we're seeing here is, you know, we're looking to invest in Nexar. Nexar contains Octopart. There are a couple of things that we're very keen to get going. I think I mentioned in my section that we have a number of open headcounts that we wanna fill. There are a lot of activities that we wanna start investing in. Is that your question there? I think so just the cost base, for Nexar seem to go backwards a million in half. Just trying to understand those comments around investing versus, I suppose, the numbers going backwards, but that's all right. In Nexar there is a component of manufacturing. Whilst we generate a modest revenue out of there, you know, the cost of sales that we used to incur have, we've found more efficiencies out of that, so that's probably what you're seeing. Perfect. Cheers. Thank you. Thank you. Your next question comes from Lucy Huang with UBS. Please go ahead. Good afternoon, Aram and Richard. Thanks for taking questions. I've got three as well. Just firstly, following from Kane's question on the recent price increase, just wondering if you can also give us some color as to whether the price increase has impacted, I guess, the number of new subscribers that are taking on Standard versus Pro subscription. Just wondering if we are seeing more customers taking on say the cheaper Standard versus Pro compared to the first half. Well, if I can tackle that. We don't really have hard evidence on how our adjustments or our price increases have impacted the adoption of Standard versus Pro versus Enterprise. I can't really give a definitive answer to that. Generally, you find that, you know, in some of the charts you find that the Standard is not growing like Pro and Enterprise. That's mostly because there are customers within those buckets that move up to Pro and Enterprise. The Standard in those charts is not indicative of the Standard appeal has gone down. It's just many customers in those buckets. I mean, there's still tens of thousands in the Standard bucket, there are customers who are moving across. That might give an impression that the appeal for Pro and Enterprise are greater than the Standard, I don't believe so. I believe the price will affect them, uniformly. Yes, wonderful. Just secondly, you guys mentioned that sales cycles have been reducing due to digitization of transactional sales. I guess, how do you see that sales as a percentage of sales, of revenue, percentage, normalizing? Where could it come down to? I think it's improved from 32% to 27% this half. We are investing in our Enterprise and Value sales. As I mentioned, we are dominant in the mid-market, and we've got an incredible brand and strength in terms of pricing power. Where we have to increase our effectiveness and strength is in the Value sales and in the Enterprise. We will be essentially taking the money out of the mid-market, so to speak, and putting it into the higher end and behind our value drive. I don't expect our cost of sales to actually go down or expenses related to sales. The key thing, we didn't want it to grow in disproportionately. If you look at 2018, 2019, our sales expenses grew disproportionately relative to other parts of our business. Now I believe it will kind of, you know, stay stable, and hopefully will come down. Certainly we want to be as aggressive as we can be in the Enterprise sales and therefore, I don't expect it to go down. Understood. Just one last one on Octopart. Are you able to give us some more color on how you are growing, CPC? Is there a risk that distributors, kind of fall off the platform if CPC, grow too fast? No. The octoclicks and CPC, they are very much interrelated in these contracts. They are not independent variables because the contract size is negotiated in such a way that assumes a certain amount of volume of traffic and assumes a certain kind of quality of that traffic and the impact that it has on the customer. None of our contracts on Octopart will have this fall out and scar, so to speak, nature about them. It's both a good thing and maybe not such a good thing because, you know, it is a ceiling effectively that exists, which means that as much as we like to go above it's not straightforward to go above it in the short term. But also it means there's a floor that you don't fall off it like that. It's both blessing and curse at the same time. We're working hard on this, effective, what we call effective monetization of Octopart's traffic. I believe that generally we're going to be heading in the right direction in that area. Wonderful. Thank you so much. Thank you. Your next question comes from Josh Kannourakis with Barrenjoey. Please go ahead. Hi, Rob. Can you hear me okay? Yes. How are you, Josh? Very well, thank you. Very well. First question, just on the pricing impacts, maybe if Alf or Richard could answer this one. You mentioned less than 5%, 10% impact in the first half, but it was back-end weighted. How should we think about some of the tailwind into the second half, in terms of ARPU and broken subscription? Josh, I'll just give you my thoughts on that. The first half essentially did not pick up any lift from price adjustments because by the time that it went through and was rolled out, like all the subscribers that were re-renewing the first half, they got their quotes well ahead of time and two or three months ahead. Essentially they got the old price. It's really the second half where subscribers will be paying us the new price, and we expect to see the impact in the second half. Again, we don't expect this to be significant in terms of, you know, getting us to our numbers. Certainly would help to counter the kind of things we've had like FX and certain other aspects of our business that are related to macroeconomic stuff. We think the second half is gonna, it's gonna have its impact, but not that this is gonna be driving our numbers second half. It's just gonna counter some of the things that I mentioned, and that's exactly what it's meant to do. Got it. No, that's great. Just in terms of, you know, the Enterprise result as well, that was obviously pretty strong. In terms of the model, you've talked about trying to optimize that sales model and some of the challenges in that segment of the market. How far do you think you are in terms of getting that model where you want it to be? Is there further, you know, efficiency or optimization to come from that business? You know, the key part, Josh, is that we have got now our mid-market combining its forces with our enterprise sales to go after larger customers, which is essentially selling Pro-level subscription and Enterprise-level capabilities transactionally from the bottom end. From the top end, we are now kind of going a lot harder on the strategic sales engagement, which would allow us to have both aspects. We do the numbers on the high end in terms of engagement with customers through our mid-market resources, which we call it value drive. That has been made possible by our mid-market not focusing on selling the volume and putting its resources on that. That is really changing our fortunes on the higher end. I believe both in terms of the value, but also volume in the high end, we're going to do well because of these two pronged attacks. One from the mid-market beginning it and one from the enterprise. The enterprise is now, it's gearing up to be more enterprise-like rather than a solution selling. We're definitely setting ourselves up to have a strong drive on the value in an enterprise sense, since. Got it. No, that's great. Just very quick one, final one. You mentioned selling to non-PCB design users. Can we talk about what sort of price point that would be at? Would that be at a similar price point to others, or would there be a different sort of model or consumption model used in terms of either the platform, in terms of designer aspects for manufacturing or potentially the Octopart platform as well? You know, think of this, Josh, like, you know, with Google, when they introduced Google Maps, they just put a link on top of their search page, and then the rest is history. Very much like us, have some similar experiences as that by putting, Just imagine Altium 365, a simple link is put above the search box in Octopart. If you go to Octopart, there is not a single mention of Altium on that website throughout. There will be a link there, and the hundreds of thousands of professionals in this industry who frequent that, they're going to discover Altium 365. In terms of monetization of that, we're going to monetize the organizations from which those users come from rather than the user themselves in the way of who our major target is. We will be also targeting the user at the level of our PCB designers. They're just users. They've got to pay for their utilization of the platform. It's the organization that that user is operating receives the much greater economic impact from Altium 365 than individual users within that organization will get. We'll be monetizing on both fronts. First, we'll be focusing on monetization from the organization, but soon after, we will have the user monetization also rolled in. Great. Thanks, Aram. Look forward to catching up soon. Thank you. That's all the time we have for our question and answer session. Please contact Kim Besharati for any questions that may not have been answered. I'll now hand back to Mr. Mirkazemi for closing remarks. All right. Well, thank you. Once again, I would like to say thank you for all your support. We appreciate your confidence in our team. We will continue to do our very best to create and to deliver value to our shareholders. Thank you and goodbye. That does conclude our conference for today. Thank you for participating. You may now disconnect.