Thank you for standing by, welcome to the Altium Limited full 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 the number one on your telephone keypad. I would now like to hand the conference over to your first speaker today, Kim Besharati. Please go ahead. Thank you. Good afternoon, 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 in Sydney today is our CEO, Aram Mirkazemi, our Chairman, Sam Weiss, Interim CFO, Richard Leon, and President Sergey Kostinsky. Today, Altium released to the ASX the company's financial results for the full year ended 30 June 2023, 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 business and financial performance for Altium for the full year fiscal 2023, and our positive outlook for fiscal 2024. Aram will share insight as to how we are performing while transforming both within Altium and the electronics industry. He will explain our performance on three fronts of transformation from mid-market to Enterprise and beyond the PCB design software market to reach the broader electronics industry. Richard will provide a deep dive into some of the slides in our investor presentation that demonstrate our strong financial and business performance over the past 12 months. Please note, as a reminder, today's call and the Q&A section at the end may include some forward-looking statements regarding Altium products, its future operations or 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. Today's call is being recorded and will be made available on our website. I will now pass over to Aram. Thank you, Kim, and hello, everyone. Altium delivered strong results in FY23, with over 19% revenue growth and over 20% growth in EBITDA. Our performance across all business metrics in the Americas led the way to deliver a strong overall result. Americas delivered stellar performance with 32.3% growth in revenue, 17% growth in new software licenses, 10% growth in total subscriptions, and 22% growth in Average Subscription Seat Value. What's more, Americas has performed strongly in terms of new license volume that is consistent with its historical long-term growth. Americas' historical performance can be seen in Slide 7 of the investor presentation. The Americas have delivered consistent growth in new license sales over the decade, with license volumes growing at a 12% CAGR over this time period. I'm pleased to report that our design software annual recurring revenue grew by 32% to $147.2 million in FY23, and our Average Subscription Seat Value grew by 22% to reach $2,408. EMEA also delivered a strong performance, with design software revenue growing by 19.8%, 23.6% in EUR, with 10.5% growth in subscriptions and 21% growth in Average Subscription Seat Value. During recent years, our historical seat volume growth in EMEA and the Americas have been paired with a substantial improvement in product mix, with the strong adoption of Pro and Enterprise-level capabilities to accelerate our revenue growth. I regard this transformation change in our mid-market as the first front of transformation, where our cloud platform, Altium 365, is dramatically improving our potential for further value creation for our customers by changing the nature of our product portfolio from being standalone desktop software to connected, cloud-based, and integrated with our design platform for the broader industry. On this front, I'm pleased to say that we are moving out of the transformation zone and beginning to enter the performance zone. On a more critical front of transformation, where our cloud platform is playing a key role, I'm pleased to report that we are gaining significant traction in the Enterprise market. Altium 365 is proving to be a game changer for our prospects of succeeding with large Enterprise customers in the high end of the market. We recently closed a significant multi-million dollar, multi-year sale to Renesas Electronics Corporation, a global semiconductor provider, who have decided to standardize on Altium design software with the view to streamline their go-to- market and customer engagement, leveraging Altium 365. Further to the transformational impact of Altium 365 on our Enterprise go-to- market in the high end. We are entering the performance zone through the scaling of our Enterprise sales organization. Altium's unique electronic data and lifecycle management offerings, combined with our cloud platform, is increasingly being viewed as the platform of choice for the future of electronics by modern Enterprises. In financial year 2023, our E nterprise sales grew by 143%, from $13.7 million to $33.3 million in revenue. That's more than doubling our Enterprise revenue. We closed large multimillion-dollar deals with customers such as Tesla, SpaceX, Texas Instruments, Bosch, Acuity, and Xylem, and many other significant deals with leading brands such as Mercedes-Benz, Meta, Amazon, Rivian, Lockheed, Volvo, TE Connectivity, Magna, iRobot, Hitachi, Infineon, and Thales. These Enterprise accounts, and many more, provide us with plenty of opportunity to grow our Enterprise business in years to come. Success in the Enterprise market is critical for our pursuit of market dominance. We have been investing in building what we refer to as industry solutions on our cloud platform that are unique and specific to the electronics industry. Our first industry solution, Designed to Win, is targeting the semiconductor industry to improve their go-to-market effectiveness. This industry solution is based on Altium's unique assets of Altium Designer, Octopart, and Altium 365. This first industry solution is being developed in partnership with Renesas and is foundational for our other industry solutions that are yet to come. In that regard, we are working on Intelligent by Design industry solution through partnership with Renesas and Ansys, which aims to improve time to market for the automotive industry, and Compliant by Design, in partnership with Hexagon, a large Swedish high-tech manufacturing company, which aims to improve compliance and sustainability in electronics. These industry solutions, centered on electronics, will be the bedrock for building Altium's growing presence in the Enterprise high end of the market. So far, I have outlined how our cloud-first strategy is transforming our business in the mid-market and our engagement with larger Enterprises. The third front of transformation is related to Altium moving beyond the PCB design software market and offering our cloud platform to broader audiences in the electronics industry. To go beyond our traditional PCB design software and into the broader electronics and engineering industry, we are actively working to bring business apps onto Altium 365. In addition, connecting Octopart to Altium 365 is bringing the two worlds of electronics design and the supply chain industry together, and giving rise to a new class of users and customers beyond PCB designers for monetization opportunities. Additionally, as we connect Octopart to Altium Designer to create a transformative outcome for the industry, we are investing in bolt-on capabilities through M&A that will enhance the value proposition and reach of Octopart. I would like to provide an update on our strong and continuing Altium 365 adoption, which has a strong and growing viral effect. I'm pleased to report that Altium 365 adoption grew by 54% to over 36,700 monthly active users, and grew by 42% to over 12,500 monthly active accounts in August, year-on-year. What is most pleasing is the growing network effect of Altium 365, which brings in nontraditional users of Altium software onto this platform. This can be seen in Slide 17 of the investor presentation, with the ratio of active users to active accounts nearly doubling since we launched the platform. As I mentioned on our last investor call in February, 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 will continue to indirectly monetize the platform through the first two fronts of transformation that I have described, and will not charge a joining fee for users to ensure that the viral effect of the platform will continue to grow. We are continuing to widen the gap with our competitors and their attempts at cloud platforms, and we want this gap to further widen to ensure our competitive advantage will further reinforce our unique strategy of market dominance and industry transformation. As mentioned, we are actively working to bring higher-level business capabilities onto our cloud platform, and beginning to explore ways to directly monetize these through a SaaS selling motion. This ties in with our third front of transformation. We have already integrated a number of critical business capabilities that will enhance security, as well as supply chain intelligence applications and core capabilities related to electronics lifecycle management.... We have made a number of significant new hires for our go-to-market team for direct monetization of these higher business capabilities, overseen by our new GM of Cloud, Ananth Avva, who has a wealth of experience in Silicon Valley SaaS companies. While I expect significant revenue contribution by FY26 from these efforts, where we would have scaled our capacity, we are currently focusing on capability build, and as such, it will be a slow revenue climb in FY24. Having focused on fronts of transformation in the Western world, I would now like to turn to China, where I see potentially a fourth front of transformation through deployment of our cloud platform in China. As can be seen from our FY23 results, Altium's traditional licensed compliance business in China, post-pandemic, is going through a slow recovery. This has been partly due to Altium pulling out its management resources from China during COVID. Now we are restoring focus and reversing the downward trend. As part of a new initiative, we are actively working to leverage our Altium 365 cloud platform in China, to move China customers from perpetual license compliance, initially to term-based licensing, and ultimately to SaaS, as customers begin to adopt our cloud platform in China. To fully execute on this front of transformation, we are exploring the possibility of working collaboratively with our key industry partners in China. This effort is in its early days, I will keep the market updated with our progress. I would now like to say a few words about Octopart and its performance in the second half of FY23. As can be seen in Slide 16 of the investor presentation, the traffic in the second half dropped by 5%, which is a much smaller amount than the first half, which was a drop in traffic of 20%. What's notable, despite the 5% drop in traffic, the revenue grew in the second half compared to the first half. This is directly related to Octopart's growing value proposition, as measured by the strong growth in average revenue per click. We further grew average revenue per click by 14% to AUD 2.23 in the second half, and anticipate continued growth based on the investment that we are making in Octopart. Turning now to our outlook and market guidance for FY24. We have a number of tailwinds that will continue to support our strong performance in FY24. Our design software business in both the mid-market and at the Enterprise level, is performing well. Our mid-market is benefiting from the digitization of our transactional sales platform for highly efficient and effective go-to-market, while continuing to leverage our cloud platform to deliver Enterprise-level capabilities to our mid-market customers. Our Enterprise business, scaling with Altium 365, being a draw card for our Enterprise engagement, and our industry solutions, while still early days, are looking highly promising. With our expanded leadership team, with new GMs in place and a performant digital sales and cloud platform, I expect the strong results achieved by the Americas in FY23 to continue in FY24. Further, I expect this performance to extend to EMEA and to other Western and industrialized regions in time. Our pursuit of market dominance is being carefully executed with an optimal balance between value and volume. We invested significantly in the last two years to build capabilities on the value side, resulting in a strong growth in Average Subscription Seat Value and demonstrating our pricing power. We are now restoring capacity and management focus for a strong volume push, which has been our historic strength. I expect to pick up a gear as we lean into financial year 2024 and strive for 10% to 15% growth in our total subscription pool. This means we could be breaking into 70,000 subscribers by the financial year end. While our design software business is well and truly in the performance zone, our Octopart business will be in the transformation zone in financial year 2024. We are investing in deepening the value proposition and expanding the reach of Octopart. While we anticipate some headwinds to remain in the first half of FY24 for Octopart, we are increasing our reach through localization efforts in non-English speaking regions, improving the quality of data for power users of Octopart, integrating Octopart to Altium 365, and pursuing bolt-on acquisitions. We expect a solid performance from Octopart in FY24, while it's still in the transformation zone. For FY24, we are guiding to a total revenue between $315 million-$325 million, which represents 20%-23% revenue growth. Of this, $250 million-$250 million for the design software business, which represents 23%-26% growth. And $65 million-$70 million for cloud platform, which is comprised of Octopart and Smart Manufacturing, and represents 8%-16% growth. In addition, we are guiding to underlying EBITDA margin of 35%-37%. At the top of this guidance, we will be achieving the Rule of 60, but otherwise in the high 50s, which is a rare and remarkable achievement by any company. Finally, I would like to reiterate that we are firmly committed to our long-term aspirational targets in financial year 2026 of $500 million in revenue, 38%-40% in underlying EBITDA margin, and 100,000 software seats on subscription. With our design software business entering the performance zone with much renewed potential, we are seeing a clearer path to 100,000 seats on subscriptions. I will now hand over to Richard to share color around our financial performance in financial year 2023, and to specifically share how we are making strong returns on our investments to drive sustainable long-term financial performance. Richard? Thank you, Aram, and good evening, everyone. FY23 was another outstanding year for Altium, reasserting our ability to deliver impressive year-on-year financial performance. Beginning on Slide 11, our two divisions of design software and cloud platform together delivered group revenue of $263.3 million, up 19% from previous corresponding period. Both design software and cloud platform revenues grew. Our design software business performed strongly, growing revenue by 20% to $203 million, an incredible effort by the team, who had to overcome the significant currency headwind we experienced during the year. For context, design software, on a constant currency basis, would have been $209.6 million, or near 24% increase. Our cloud platform revenue was up 17% to $60.3 million. The positive trend of sticky recurring revenue mix increasing to 77% of total revenue, up from 75%, was supported by the continued migration to term-based licenses. Before we consider the next few slides, we have some useful data that will demonstrate and support our growing strength. In order to have the next slides be gentle on the eye, but not too busy with numbers, we have a data summary at the back on Slide 47 for those that really want to dive into the details. Staying with design software, on Slide 12, we show how each of our regions fared. China performed below expectation as it continues to feel the lingering effects of severe lockdowns. Rest of the world was flat, with sales growth in India compensating slightly for our exit from Russia. By far, the highlights were our major regions. Americas revenue up 32% to $92 million. EMEA up 24% in local currency to EUR 68.6 million compared to last year. As shared earlier by Aram, when he spoke to the Americas track record of growth over the 10-year period, these two preeminent regions represent just over 80% of revenue and subscriber seats, and nearly 90% of annual recurring revenue, which segues into Slide 13. If I may, I will take a moment to explain a change to this business metric and how we'll report on this going forward. We have adopted a more simplified approach in determining ARR by taking all open contracts, including our growing pool of multi-year term-based license contracts, net of any non-recurring revenues, such as perpetual license or training, and annualizing this. Compared with our previous more complicated approach that contained multiple variables. The genesis for this business metric was to monitor the growth in our Average Subscription Seat Value, ASSV. Growth in this metric will reflect our pricing power, migration from perpetual to term-based, and delivering higher level pro and Enterprise capability to the mid-marke t. We have an appendix at the back of this deck, included a slide that applies our previous methodology for comparison. To the slide itself, our design software, ARR highlights, are the Americas growing its ARR by 34% to $72.5 million, and EMEA up over 33% to $58 million, with growth of Average Subscription Seat Value at 22% and 21%, respectively. Much of this growth is attributed to the continued take-up of our higher level offerings in Professional and Enterprise, driving up our ASSV. The key takeout here is momentum for the Americas and EMEA is returning and bodes well for our flight path and future revenue growth. Onto Slide 14. This validates the return of momentum in Americas and EMEA, with around 10% net growth of subscriber seats in each region during 2023. A significant turnaround when considering the annual seats on subscription growth in the prior two years, were around 6% for each of these regions. As for our emerging regions, with the exit from Russia now behind us and seeing early signs of business momentum returning in China, we anticipate subscriber seat growth for the group will hit the early digits, double digits from FY24. Another call-out here on this slide is product mix, as the take-up of Professional and Enterprise-level platform capabilities continue. Slide 15 looks at our new seats acquired during the year. Aside from the standout Americas, returning to its pre-COVID growth trends, EMEA applied itself to focus on rejoins during FY23 and achieved a strong subscription growth, though not for new licenses. Under the new leadership of our newly appointed general manager of design software, together with further investments in restoring focus in this region, we are confident an optimal balance of value on the higher end of the market, as in higher ASSV, and volume, that is new seats at the lower end of the mid-market, will result in improved license growth, higher average subscriber seats value, and ARR for 24 and beyond. Similar to the previous slide, the other noteworthy highlight is the growing momentum of new license, leaning more towards Professional and Enterprise-level platform capabilities. Looking at these charts and the darker shades, especially Americas and EMEA, one can discern, of those purchasing new license, a near doubling of pro and Enterprise take-up from the previous years. This momentum has driven time-based subscription to 48%, up from 34% in the previous year, and 22% in FY21. A final comment before moving on to our cloud platform. The success and return of momentum of our design software business was underpinned by our investments in the digitization of transactional sales process. This is delivering greater efficiencies and operating leverage, which in turn allows us to invest in further growth and in capacity and capability. On to slide 16. Our cloud platform division, in particular Octopart, as you can see on the right-hand side, click volumes declined from the heights of supply chain challenges in 2022, though still well above pre-2021 levels. The left-hand side demonstrates that our ability to grow revenue per click by some 32% since 2019, contributed to revenue growth of $60.3 million, up by 17%. Staying with our cloud platform, adoption of Altium 365 is covered in Slide 17. Monthly active accounts and monthly active users continue to grow, with over 36,700 active users and over 12,500 active accounts as at August 2023, resulting in a ratio of active users to active accounts just over 2.9. These upward trends in cloud platform adoption, we feel, will be critical to our Enterprise penetration, as Aram shared earlier. On to our financials. Firstly, our operating expenses on Slide 18. Operating expenses, the difference between our revenue and EBITDA, increased by 18.7% to AUD 160 million compared to the previous period. Much of this investment is already generating a payback with our revenue growth of 19% this year. However, its full impact will be felt in the next financial year. As mentioned, we hired several high caliber leaders, including a General Manager for each of our design software, and cloud platform divisions, a Chief Commercial Officer, as well as a head of M&A. We're committed to continue to invest in pursuit of the opportunities directly in front of us. Notwithstanding these investments in laying the groundwork for future growth, our reported EBITDA continues to be among the highest in our industry and continues to be strong. Slide 19, our balance sheet closed for the year with cash flat at AUD 201 million, after payment of AUD 27 million in the disputed ATO matter and also AUD 45 million in dividends. Altium has zero debts. Moving along to Slide 20, where the cash generative nature of Altium's business, underpinned by growing recurring revenues, allowed us to declare a final dividend of AUD 0.29, bringing the FY23 dividend to AUD 0.54 or a 15% increase compared to the previous period. Our free cash flow metric was hindered by the disputed ATO payment that would have otherwise shown an improvement of 11.6% in free cash flow. Quickly onto Slide 21. To summarize FY23 financial metrics, in a year we invested for future growth, Altium delivered another year of notable top-line growth, up 19.2% to $263 million, together with an industry-leading EBITDA margin of 36.5%. An enviable combination that well exceeds the industry norm of Rule of 40, or the Rule of 50 as it relates to Altium, and puts us into the elite level of performance in the tech industry. As for earnings, Altium produced EBITDA of $96 million, up 20%, and net profit after tax of $66.3 million, also up nearly 20%. Moving on to Section 3, our presentation in relation to our growth metrics and business drivers. Slide 23 lists the macro trends that we spoke to last year. This slide has not changed, as all remain valid and exciting. We believe the growth achieved this year and future growth is driven by the realization of these trends, and we are the beneficiaries of executing our strategy. Slide 24, to add more color to Aram's outlook message, a significant tailwind for us is the convergence of our cloud-first strategy and gaining traction in the Enterprise market. The example that Aram spoke to, amongst other notable names, was Renesas, who we believe are archetypical of those businesses that realize their future success is in being connected to a cloud-based design platform with Enterprise capabilities. Another tailwind we will ride, and an example of investments paying off, is the digitization of our software transaction sales organization, bringing with it efficiency, allowing us to invest and still deliver strong margin. No business is immune from headwinds. Ours relate to the traditional long-standing license compliance business in China. Our strategy, as Aram alluded to, is to transition from perpetual into term-based model and ultimately to SaaS. The other headwind, as I mentioned previously, lies with Octopart and the normalization of traffic volume post the pandemic. We will address this by building a stronger value proposition to drive up higher average revenue per click. To Slide 25, where I would like to spend a bit more time on the growth metrics for design software. As we shared with our financial results earlier, we are seeing momentum returning in growing our subscription pool. With our cornerstone regions of Americas and EMEA, each delivering circa 10% growth in subscriber seats. As mentioned, the rest of the world issues associated with our exit from Russia is behind us, and early signs of China business returning to normal is promising. Aram mentioned we are targeting subscription seat growth of between 10%-15% for FY24, of our current 61,100 subscriber seats. This, coupled with a growing Average Subscription Seat Value through the continued migration to term-based licenses and adoption of higher value offerings, plus maintaining non-recurring revenue within $55 million-$60 million, gives us the confidence to provide an outlook for design software of delivering between $250 million and $255 million in FY24. This combination of volume seat growth, together with growing average subscriber seat value, will push our annual recurring revenue higher each year. Slide 26 brings us back to Octopart business. This slide illustrates while traffic volume has fallen, but still above pre-pandemic levels, our ability to offer stronger value proposition allows us to achieve improving average revenue per click. Which brings me to my final Slide 27, and our outlook on EBITDA. Firstly, operating leverage. The higher price and margin for design software seats on subscription, as evidenced by the mid-market adopting Enterprise-level capabilities. This is also driving subscription growth and operating leverage. Digitization of transactional sales processes is delivering great efficiencies, allowing us to invest and maintain a strong margin while delivering top-line growth. As for investments, further investments in Altium 365 cloud capabilities, and as Aram mentioned already, having a positive impact on our mid-market business and a game changer for our Enterprise business at the high end of the market. To service the Enterprise opportunities, we'll invest to scale Enterprise sales capacity to deliver industry solutions for Enterprise verticals, and we will further deepen the value proposition and reach of Octopart, as well as expand the Altium leadership in the US. All this and maintaining our strong EBITDA. This wraps up our formal part of the call, and I will now pass on 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. Hey, afternoon, guys. Just a few questions from me. You know, obviously, over the past 2 years, we've seen a pretty meaningful uplift in your average subscription seat price. I mean, looking at your sort of guidance into 2024 sort of implies another sort of further lift into the next year. Like, how do you think about your customers' appetite to sort of take on the price increases that we've seen for the last 2 years? Hi, Bob. First thing I'd say is that these are not price increases, they're higher level capabilities we're delivering to the mid-market. From a Standard to our pro level and from a Standard to Enterprise, is in fact far greater value that is delivered to the customer than the price differences suggest. The drive behind our Average Subscription Seat Value is driven by the higher level capabilities being delivered, and therefore we're charging higher. Also, the transition from perpetual licensing to term-based licensing, which we have had the headwind in the first two or three years, but they're turning into tailwind as we accumulate a greater mass of term-based licensing. This is going to continue. You can see in those four slides that we have in the financial section those darker shades, there is still a long runway, and on top of us adding volume. We expect the volume and value continue, and it has very little to do with price increases. Okay, got that. Then, you're still talking about 10%-15% increase in that subscription pool. I mean, I guess, you know, apart from the market in the Americas and Europe sort of improving, like what, what are you doing on your end to get better adoption of your software? Last year, we invested in a whole layer of management in our design software. We have appointed a global GM for design software. We have appointed a Chief Commercial Officer. We recently appointed a Regional GM for Europe. This layer of management's critical for us to be able to have this optimal balance between volume and value. The value side of our business in the mid-market is at the higher end of the mid-market, and requires new capabilities, which we've been building the last two and three years, and we've demonstrated that through the Average Subscription Seat Value growing. Then the other side, which is volume, is really the lower end of the mid-market that requires capacity and focus management. Now, we're going to be able to have the two sides focused on and executed on, and I expect us to just same as pre-COVID, we will be driving this business in the mid-market, and you can see it in Slide 7 with Americas. The trend over the last 10 years, you can see it there, and we're gonna continue with that trend, both in America and hopefully soon in EMEA as well. Okay, great. Just a final one on Octopart. I mean, obviously, the clicks have been down and visitation's down, but your CPC continues to go up, and you've been talking about, you know, creating more value to your customers, and that's what's allowed you to push prices up. I guess, if volumes are sort of coming down, does that make it more difficult to push or sort of drive further value or get further price increases in that business? Well, the, the value is related to, what we're offering to our partners, and volume, of course, is, the amount of traffic we're receiving. With the value we are offering is constantly is growing. We're developing partnership. We're adding additional data, that is for the power users. We're also looking to invest in areas outside the English-speaking world for localization in a way that we can drive volume and value in markets that are not fully focused in the past. And we're also developing technologies in integration between Octopart and Altium 365. As I mentioned, we're also investing in bolt-on acquisitions. All these deepen the value proposition of Octopart, which is, is a, is a strategic aspect of our transformation and are expected to have a first half, which, which is probably going to be not so strong. Our second half in FY24, I expect to see stronger performance from Octopart. In FY25 and 26, we will see the real fruits of our efforts in those two years in Octopart. Great. Thanks, Aram. No worries. Thank you. Your next question comes from Garry Sherriff with RBC. Please go ahead. Yeah. Hi, Aram and Richard. Two questions, one on Altium 365 and the other one on Enterprise. You had a nice uplift in the active users and accounts for Altium 365. Can you maybe give us a sense when you plan on starting to charge users for the Altium 365 product? I mean, are we talking FY25, FY26? And, if so, can you maybe give us a sense of the likely price range that you think users would see as valuable? Hi, Garry. Just on that point, as I mentioned, in February, and I also reaffirmed that, we see two sides or two layers to monetization of Altium 365. One is the platform itself, and one is the higher level capabilities on that platform. We're going to be monetizing on the higher level capabilities, but we're going to not charge a joining fee for users to come onto this platform. This is really important for us because we're gonna focus on going beyond PCB design software market. The customers or users who come onto our platform, we normally don't have access to them if they're not around PCB design, and we wanna make sure that viral effect continues, and hence, we're not going to be charging a joining fee. However, on the higher level, capabilities, like around security, data intelligence, lifecycle management, we are developing a SaaS team. It's a strong team, and they have started the process of monetization. As I said, in FY24, I don't expect it to be a steep climb, but the pipelines that's being built is impressive. Are expected to actually then rapidly grow in 2025 and 2026, which we will, of course, update the market on those. Okay. Got you. Thank you. With Enterprise, I mean, we caught up with Cadence in the US recently, and they also flagged really strong industry conditions in that Enterprise segment. Do you envisage or, or are you seeing any competitive response from Cadence as yet, as you build into that Enterprise space? Well, Cadence is a very large company. They're very strong in silicon design, and 90% plus business of Cadence comes from very small, relatively to Altium, small number of customers that are focused on chip design. In the mid-market, we don't see any particular aggressive posture from Cadence. They are, you know, very respected companies, and they've got their user base in the mid-market. We feel pretty confident in the mid-market. Of course, we would like to be more competitive against Cadence in the higher end. We have been doing a lot of work that can't be seen, but I expect us to do better in the Enterprise against Cadence in years to come. The momentum is building up. In the mid-market, it's really hard to beat Altium and the high-end Renesas and our focus on this unique industry solutions Designed to Win, Compliant by Design, Intelligent by Design. These are things that we're offering, and they're board-centric, PCB-centric, and I think we're gonna be more competitive against Cadence in the higher end of the market. Okay. Thanks, Aram. Appreciate it. Thank you. No worries. Thank you. Your next question comes from Lucy Huang with UBS. Please go ahead. Good afternoon, Aram and Richard. I've got three questions as well. Firstly, just in relation to that guide of $55 million-$60 million of non-recurring revenues coming through FY24, just wondering, the rationale behind, I guess, still pushing or expecting revenues from the perpetual license model, given we are trying to transition to term? Hi, Lucy. You know, FY23, we did just over AUD 56 million in perpetual. You know, we're, we're investing in emerging regions, so we feel, you know, some of these regions will, will start off initially with perpetual. Our kind of client mix, there, there will always be a certain range of people that would want perpetual licenses. That's, that's how we formulate the target range of 55-60. Okay. No, that makes sense. Then just secondly, on Enterprise as well, given you announced some new deals with Tesla SpaceX, I'm just wondering, who are you winning these deals from? Any color on the competitive landscape there? You know, with Tesla, Tesla is our market account. We were with Tesla when they were a start-up, and that has just grown larger and larger. Now, with many of these modern digital high tech-based companies, they do silicon design, they do board design, they're involved with all different aspects of high tech. You know, Cadence would be also present in Tesla. All the board levels, the majority of work that happen around board design, Altium is their tool of choice. In some companies we have displaced competitors, but generally, it will turn into a coexistence for a period, because once the company switches to Altium, they can't just completely walk away from all the designs they've done in the prior years. They're gonna continue for a little while, and we hope that in time, they will entirely switch to Altium. Yeah. No, understood. Then just my last question on, a follow-up to the kind of Altium 365. Just wondering, because you're expecting ramp-up in FY25 to FY26, any color you can share on the amount of contribution you are expecting from 365 by FY26? It's early days. We'll definitely provide an update February next year. You know, we have in February, in our aspirational targets and pursuit of that, we had a simple high-level indication of what we expect to get from direct monetization of Altium 365. We're still expecting within that range, although our design software is performing better than expected at that time. It's less than what we were expecting, but still around $50 million is expected to come from direct monetization of Altium 365. Wonderful. Thanks so much. Thank you. Your next question comes from Kane Hannan with Goldman Sachs. Please go ahead. Hey, guys. Maybe just the subscriber growth and obviously expecting that to improve to 10-15%. I think it was around 9% this year, ex Russia. Just interested, is that pretty broad-based across the businesses and geographies, or is there anything worth calling out that sort of drives that acceleration? How much of it relates to the improved churn you guys did in the second half? Continuing on next year. Hi, hi, Kane. As, as far as our renewal rates, our renewal rates are being maintained at a very high level in both the Americas and EMEA. The 10% increase overall, you know, I, I think, you know, in, in the slide we're showing as a group 7.5%, but that, that includes, you know, these, these tailwinds as far as China and rest of the world. But, you know, we believe they're out, and that was a 2.5% drag overall. This is where we feel confident that a 10%-15% improvement in FY25 is achievable. You know, I think when we look at our first half, second half, the second half certainly was more performant as far as both renewals and new licensee acquisitions. Yep, I think that's helpful. Then just thinking about your Standard subscribers, they've also been declining since 2021, you know, as, as they're being upsold. I mean, do you have line of sight to stabilizing those subs, or do you still think there's a multi-year decline ahead as you continue to upsell them? You know, one of the things you can see in America is that people go straight to Pro. Like, they don't go to Standard and to Pro. You can see new licenses. When you look at America, it's got Pro and Enterprise, nearly half of new licenses. This is in, in many ways saying to us that Pro is going to be the Standard in future. With all the business apps and additional layers that we're adding, Standard is going to be seen as underpowered in future. We, we really wanna focus on these additional layers in Pro and Enterprise. Of course, Standard will be kept, but that's not the metric that we would want to see grow. We want Pro and Enterprise, and as said, Pro is the new Standard. Yep, perfect. Just off the part, and then I know you made those comments before, but around the stronger second half, is that when you're seeing volumes, I suppose, returning to growth in the second half? Or just interested, if you could talk about, you know, your volume expectations? We're expecting the second half to have an uptick of volume. The first half, we expect it to be the, the, the bottoming of that traffic flow. As you could see in, in our slides, there was 20% from second half last year to first half this year, and there was only 5% drop in the second half. We expect minimal effect in the first half. All the works that we've done with the localization of Octopart, we are investing in certain partnerships that will allow us to deliver a greater data accuracy for power users of Octopart. We're working on the integration of 365 and Octopart. We're investing on bolt-on M&A for Octopart and 365. We will expect second half to be the beginning of the upswing, and 2025 and 2026, when we will be hopefully seeing the same effect going from transformation to performance mode, which we've seen with our mid-market and recently with Enterprise. This is the third front that I'm, I'm expecting for us for this transformational move of having Octopart and 365 connected to, to not only drive their value up significantly, but also, we're going to be getting more volume of traffic. Thank you very much, guys. Thank you. Your next question comes from Nicholas Basile with CLSA. Please go ahead. Hello, Aram and team. Just probably two questions from me. The first one on, I guess, the Pro and Enterprise segments. I think in the past, you were sort of cautious on the ability to capture more Enterprise sales due to product gaps existing. Just interested if you can kind of give us an update in terms of, where, if any, product gaps still exist, and if there are any roadblocks to, to further adoption in terms of the feedback you get from customers. Obviously, you called out quite a few large Enterprise customer wins, so what are they perhaps, I guess, seeing in a product relative to those that are still holdouts? The second one on Octopart. Just interested if you could perhaps expand on the comments you made around the significance of further integration with Altium 365. Cheers. Okay, the first question, there isn't really a product gap. It's our product is not only competitive, but combined with our cloud platform, has got such a unique value proposition for Enterprises that makes us, be honest, the platform of choice for future of electronics hardware design. Our go-to- market on the Enterprise, that's the area that we've been investing the last few years. Maybe five years ago, we started investing in this whole area, and we have now built capabilities within Altium that delivers enterprise-grade capability in terms of deployment and implementation of our platform, that's part of the go-to- market. 'Cause, you know, when you've got platform and you've got product, you've got to still be able to actually deliver that to an Enterprise. We've got that capability, this year we had nearly 200 deals that we have signed, and that's a lot of capacity compared to where we were 2 or 3 years ago. That part is now on the scaling side. There is a layer above that, which is Enterprise capabilities that pertain to the enhancement of enterprise-wide productivity, that is something that we're hoping that our SaaS go-to- market to deliver, which is going beyond the PCB designers, bringing other professionals into the equations and monetizing them. That is a significant new front for us and very promising. The third part, which is very exciting, Renesas was a very exciting opportunity that we closed, is related to what we say, business transformation, where the partner will actually fundamentally change certain aspects of their business, in the case of semiconductor industry, their go-to- market. That is new for us. We're excited. We've got our Chief Commercial Officer, Marc Boonen, who is the forefront of that. We have Ted Pawela, another executive. That is again, go-to- market, is strategic partnership. We're actually feeling pretty confident on these three fronts. The first front, as we said, is in performance zone. The second and third are very promising, still in transformation zone, but I expect in the next two or three years, those things is gonna be going from strength to strength. As for your question about Octopart, that area is very very promising because you've got supply chain professionals with procurement and 101 things related to matters that we all heard about in the last two or three years, about supply chain and managing your supply and so forth, in electronics is a big deal. Having that done in the context of design early. Now, there are a lot of things with developing. There are capabilities that we refer to them as business capabilities, but they are extremely attractive. We're getting really good feedback on them. We're running pilot projects to make sure that areas we're addressing are prioritized in terms of investment making. We will be talking about that third front quite a bit in our next outing. Okay, thanks very much, Aram. Cheers. Thank you. That's all the time we have for our question and answer session. I'll now hand back to Mr. Mirkazemi for closing remarks. Thank you. Once again, thank you for all your support. We appreciate your confidence in Altium, and we will continue to do our very best to create and to deliver value to our shareholders. Thank you, everybody. That does conclude our conference for today. Thank you for participating. You may now disconnect.