Ladies and gentlemen, thank you for standing by. I'm Hailey, your Chorus Call operator. Welcome and thank you for joining the Software AG Q2 results call 2021. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. I would now like to turn the conference over to Senior Vice President of Corporate Development, Robin Colman. Please go ahead. Thank you, Hailey. Good morning, ladies and gentlemen. Welcome to Software AG's analyst call and webcast on the preliminary Q2 and half-year results for 2021. This morning, Software AG has published preliminary results for the reported quarter in the first half of 2021, as well as the presentation used on this call. Today's call will start with our CEO, Sanjay Brahmawar, followed by Scott Little, Software AG CRO, and our CFO, Dr. Matthias Heiden. We will try to keep this call in the regular one-hour timeframe and cover as many questions as possible. Before we start, there are some housekeeping remarks. This conference call is also broadcast via the web. You may access the webcast via our investor relations website, and the webcast will display the presentation slides related to this call, and the same slides are available for download on our website. The webcast, including the full call with questions, answers, and the names of questioners, will be recorded and made available for replay later today. Finally, let me remind you of our Safe Harbor statement, which is shown at the beginning of the slide presentation and is valid for the entire call. Thank you for your patience. Now over to Sanjay. Thank you, Robin. Good morning and welcome to our Q2 and first half earnings call. Q2 was a strong quarter. I am extremely proud of the team and what they've achieved. Thanks to the whole organization's effort, we closed out the first half in line with our plan. We have recommitted to our full-year guidance ranges and 2023 ambitions. For me, the most striking aspect of our Q2 delivery is the 10% growth digital business product revenue. This is a major landmark for our transformation and a key contributor to the fact that this is the first time in a long time we've delivered double-digit total revenue growth in a quarter. Sustainable, profitable revenue growth, and digital business revenue growth, is the fundamental rationale for our Helix program. We have worked hard to drive bookings momentum and our subscription shift, confident that these efforts would translate into green shoots of revenue momentum. Q2 shows those first green shoots appearing. We know that the job isn't done yet, but we've taken a big step forward in closing a key transformation loop. We have shown that bookings momentum translates to revenue success. From here, our top line will continue to build as we capitalize on the accelerating trend towards digital transformation and take share in the EUR 28 billion truly connected enterprise opportunity we see by 2024. At our Capital Markets Day, we spoke about building blocks of our future product revenue and building on 2021, how we drive annual product revenue growth of between 10% and 13% between 2022 and 2023. With each passing quarter, we are gathering proof points and building an even clearer path to sustainable, profitable growth future. Let's look over the headline numbers for Q2 and first half. In digital business, q2 bookings growth of 8% was a solid performance. For the first half, bookings growth was 13%. With a solid pipe for second half, and with the revenue growth from subscription and SaaS starting to impact our overall top line, we feel confident in digital business heading into the rest of the year. In A&N, our Q2 performance was very strong, thanks to great execution, along with several large deals which either slipped from Q1 or closed earlier than expected. This drove Q2 bookings growth of 48% and Q2 product revenue growth of 32%. Our half-year return was 8% growth in bookings and 9% growth in product revenue. As a reminder, our expectation remains that A&N performance this year will still stand roughly in line with 2019 levels. For the group, bookings grew 18% in Q2, while product revenue grew 17%. In the first half, bookings growth was 12%, while product revenue grew 6%. Our transformation lead indicators continue to point to future success. Digital bookings from subscription and SaaS were 94% in Q2 and 88% in first half, while ARR growth in digital business was 9%. Recurring revenue reached 94% of the product revenue in Q2 and was 91% for the first half overall. This is above our midterm ambition of between 85% and 90%. This recurring revenue figure is the clearest indicator yet that our growth is being driven by higher quality, more predictable recurring revenue streams. Finally, along with our prudent approach to investment in Helix, the strong revenue results drove operating margin to 28% for Q2 and 21% for first half. Looking behind the numbers, we continue to deliver Helix acceleration through a cultural transformation, pivoting our collective mindset towards growth. Our employee base, enabled with new training and new tools, is delivering results balanced across three business growth levers. Winning new business, driving upside as we migrate existing customers to subscription, and capturing the customer lifetime value potential at the moment of a subscription renewal. 72 new logos is a Q2 record for our business and a 33% increase on Q2 2020. We achieved 140 new logos in first half overall, as we look into the second half, I believe we are tracking to a record new logo year. Our improved ability to hunt in the market gives us real confidence that our new business engine under Scott's leadership will deliver the sustainable growth we're targeting in the coming years. There are a couple of great examples of repeatability in the food services sector I'd like to highlight. We won a great deal with Sodexo, the EUR 22 billion food services and facilities company, and we won another with the nutrition division of Otsuka Pharmaceutical, the multibillion-euro Japanese healthcare company. This latter API management win via webMethods will see us digitize the client's transport operations, simplifying their interactions with staff and helping them reduce the cost and time it takes to deliver crucial information. We've also seen early success with our investment targeting the German Mittelstand, which Scott will discuss later. On migrations, we've continued to shift our customer base towards subscription. This allows us to increase customer lifetime value through the renewal cycle and gain a contract value multiplier when we migrate. This multiplier continued to average around 1.4x in Q2. A Q2 example is Woolworths. This large Australian supermarket chain and webMethods customer has now expanded into hybrid integration with webMethods.io as we beat competition from MuleSoft and Informatica to secure the iPaaS elements of a new agreement. Through the deal, we'll integrate Woolworth's hybrid multi-Cloud architecture and help it become more data-oriented. This is another co-selling success from our partnership with Microsoft, which continues to go from strength to strength. Finally, on renewals, we are starting to secure deals which show the potential of this revenue stream from 2022 onwards. During Q2, we won a significant renewal with a large Dutch global investment bank for ARIS Cloud as we enable it to deal more effectively with the huge demand on its data processing capability. Across renewals, we have a number of early examples of good net retention rates for digital business. with our renewal cohort building into 2022 and 2023, these examples indicate the scale of customer lifetime value opportunity ahead of us. Our business growth is underpinned by the work taking place across our transformation pillars: focus, execution, and team. In each pillar, we are seeing clear links between investments made and returns achieved. In focus and execution, we continue to invest behind innovations that help our sales organization convert leads in the field to wins on the board. We're often asked two questions. One, which parts of our product portfolio are driving growth? Two, which customer problems do our products solve? The answer to the question one is simple. We are seeing strong growth in product families that help customers transform into truly connected enterprises. This is a key area in which our independence, the breadth of our offer, and the quality of our self-serve data and analytics tools differentiate us from our peers. In Q2, indeed over the first half, our iPaaS product bookings increased triple digits, delivering multi-million EUR bookings growth. Our IoT analytics family and our API management platform also grew in strong double digits. In business transformation, we saw strong growth as companies continued to invest in digitalization in response to COVID. Here, great product experiences like our new in-product customer onboarding process for ARIS SaaS helped us drive our process mining and process analysis offerings to good double-digit growth. Our ARIS products were also recognized in Everest Group's assessment of the best process mining vendors, where we ranked just behind leader Celonis, but ahead of other players like Signavio. The answer to the second question is simple, too. Our mission-critical products help customers streamline and digitize their operations in the way that best suits them. For example, the continuous stream of innovation in TrendMiner was a key driver behind a fantastic upsell secured with the large French specialty chemicals business, Arkema. Our ability to blend Cloud and on-premise solutions was a major factor in Rolls-Royce's Submarine division choosing our hybrid integration platform over Boomi. Our solution was something they couldn't find anywhere else. Our A&N 2050+ program also continues to help customers combine A&N's huge processing power with the benefits of lower total cost of ownership via the Cloud. During Q2, the State of Washington Department of Retirement Systems successfully migrated its A&N applications to Azure. This lighthouse project represents a significant and repeatable use case in modernizing A&N, showing customers that they can retain massive data crunching power and run completely in the Cloud. Notably, Washington DRS is the first of seven clients signed up for this transition to go live. In IoT, Cumulocity won a great new logo with Pacific Hoists. In this use case, we will help Pacific Hoists, the Australian listing, digitize its safety processes and enable live condition monitoring for its equipment. We will also deliver use-based servicing and provide real-time access to data. This will extend the life of the company's assets while making its operations more economical and safer. The impact of our innovations is best viewed through the lens of our customers and peers. Gartner's Peer Insights portal, which carries reviews submitted by industry users, gives Cumulocity an average rating of 4.6 out of 5, and 90% of reviewers recommended the platform. Our webMethods API Gateway and webMethods.io iPaaS platform both have an average score of 4.8, making all three among the top-ranked platforms in their field. This transparent feedback mechanism is becoming increasingly important in Gartner's assessment methodology and also an important shop window for potential customers. This powerful feedback gives us confidence to keep bringing a continuous stream of innovation to market. For example, in Q2, Cumulocity introduced its thin-edge.io product, enabling connectivity for resource-constrained IoT devices and control boards used in electronics. TrendMiner also introduced Data Scientist in the Loop, which enables subject matter experts and data scientists to collaborate on advanced analytics, including predictive quality and predictive maintenance. All this innovation, combined with excellent customer service, drove our product NPS to +57 at the end of Q2, in line with the record high we achieved in Q3 2020. We also continue to explore ways of attacking more of our total addressable market through our string-of-pearls M&A strategy. We are assessing opportunities to add product innovation and Go-To-Market enhancements, which will help us augment our existing platform and drive accelerated future growth. Finally, in our team pillar, we have been working hard to strengthen and build resilience across our whole organization. Since the start of Helix, we've welcomed amazing talent and new colleagues, like our new CMO, Dawn Colossi, and our new APJ leader, Nicolas Betbeder-Matibet, have helped us seamlessly manage recent change in the business. Today, I'd like to share how our investment in existing talent is providing strong leadership succession, leadership which will be crucial as our transformation accelerates out of 2021. I'm very happy to announce that Scott Little and Dr. Benno Quade will hold new roles in our organization as of 1 August, joining me and my board colleagues to form an extended management team. Scott Little will become Chief Revenue Officer, and Benno Quade will become Chief Customer Success Officer. I'm also delighted to announce that Mike Haugen will succeed Scott in taking over as our sales leader for the Americas. These appointments will strengthen our customer focus and reflect the progress of Helix transformation. They will also increase collaboration, flatten hierarchy, and make us even more agile in responding to customer and market needs. Scott served as the Global Head of Sales since the beginning of the year and has shown true strength in executing our Go-To-Market strategy. Benno has been with Software AG for 10 years in various management roles, most recently as the Chief Operating Officer for Go-To-Market. As Chief Customer Success Officer, Benno will lead customer success, renewals, and professional services. Two great leaders who will do great things. Our whole team's physical and mental wellbeing remain front of mind, and like many responsible global businesses, we have been augmenting COVID vaccination drives in countries we call home. We were able to offer vaccinations to colleagues in Germany, Austria, and perhaps most crucially, in India, where more than 600 employees have now received vaccines. We also launched our quarterly Wellness Wednesday program, a one day per quarter dedicated solely to encouraging balance in our people's working lives. It's proving very popular in addition to meeting free Monday, which also remains in place worldwide. Overall, I believe the quarter and first half shows our strategy is working. We continue to deliver on our commitments and are confident as we enter into the second half. I now pass on to Scott to spend a few minutes looking more closely at our progress in sales and our second half pipeline o ver to you, Scott. Thanks, Sanjay, and hello, everyone. It's great to be here talking to you again after what is now around six months in my role. I've been totally focused on sharpening up our sales execution capability, and I'm pleased with the results we've delivered. When we spoke at our Capital Markets Day, I explained that at Software AG, we have an amazing product offering with the power to change the game for our customers and w hen we get into the room, we're executing better than ever. To translate our technology into sustained results, all we needed was to be invited to the dance a little more often. With another half year of hard work behind us, I'm happy to say our plan is working. The evidence of our sales execution proves the point. Through the first half, digital business bookings conversion rate tracked materially ahead of our 2020 average. In the quarter, we saw deal volumes grow in all deal bands from EUR 250,000 through to EUR 1 million+ making us less reliant on single large transactions. This increased execution ability is why I'm so focused on raising our profile and creating new opportunities for our salespeople to convert. Two great examples of the boost we've given our brand in recent months are our North American awareness campaign and the Mittelstand campaign Sanjay mentioned earlier. In our North America campaign, we used customer intent data to target 500 key accounts early in their buying cycle, and we structured digital campaigns to match their online buying preferences and have seen great results. In the first few months, we have seen over 50% of our target accounts engage with us multiple times. This shows our digital-first approach perfectly matches our customers' preferred engagement method. Our goal is to now move this top-of-funnel demand into qualified pipeline for the quarters ahead. In Mittelstand, along with the 18 new deals in these first few months, we've also increased the number of opportunities in our pipeline from 70 in Q1 to over 200 in Q2. As an example of the quality of deal we're winning here, we had a great land-and-expand win with HeyJobs, the talent acquisition platform based in Berlin. Our efforts to expand this agreement after close have seen us double its contract value already as we work with the client to seamlessly integrate its talent sourcing platform with its customer HRIS systems using webMethods.io. Beyond DACH in North America, we've seen good progress in all our other geographies. Our regions have performed in line with their plan, EMEA, in particular, delivered very strong growth. I want to touch on the steady progress we're making with our partner ecosystem. The relationships we're building give us an additional route to market, which helps us access more of our TAM. In the case of partnerships that do not involve co-solution, it offers us an opportunity to lower the cost of sale and lower the cost of customer acquisition. From a demand generation standpoint, we continue to execute well. Our new deal registration capability allows partners to register opportunities in our CRM. This has provided more than EUR 45 million of net new pipeline in the first half. We expect plenty of this to translate into incremental sales. During the first half, we also saw incremental digital bookings from partners make up 13% of digital business total, up from 7% pre-Helix. These bookings come from partner deals registered with us. They are often in accounts we do not sell into directly or where OEMs embed our technology into their own solutions before selling that solution to their end customer. For example, in the quarter, we secured a great OEM win with North America via Adobe and added a total of six new partners to our OEM roster. In addition, our Cloud partners, namely Microsoft and AWS, are also delivering marquee wins. As well as the Woolworths contract you've heard about, we secured two major wins from the growing AWS relationship. One of these was with another major technology player in the Life Sciences space. When you add this to the three med tech deals we've won in the last three quarters, we can see we're making a significant impact with our scalable and repeatable offering in this market segment. With Microsoft supporting in our earlier deals and with this latest engagement with AWS, we can see the benefits of partnering with global Cloud players for these worldwide deployments. Lastly, the increasing returns from our partner-led business are underpinned by the new partner program we launched at the start of the year. This now includes tiers to which we reward our partners with higher incentives in return for higher skill levels and increased demand execution. In general, to date, more than 75% of our existing partners have migrated to the new program, and we expect to transition the majority across by the end of the year. As we look towards the second half, I'm confident that our pipeline, especially in digital, is in the right place to see us deliver on our full-year objectives. Even though we're just a few weeks in, we've built a very good Q3 foundation. We're driving towards the full year to 2023 and of course, beyond. Matthias, over to you for the financial details. Thanks, Scott, and hello, everyone. Let's now take a closer look at the numbers. During the next few minutes, I will explain the key bookings dynamics from both the quarter and the half year, deep dive on revenue and profit, and touch briefly on a few other financial elements that help complete the picture of our performance so far in 2021. Turning first to bookings. Our overall bookings of EUR 126.6 million in the quarter represent a solid result. This 18% year-on-year growth means that for the first half, we delivered bookings of EUR 215.4 million, up growth of digital business q2 bookings were EUR 86.1 million, representing 8% growth. For the half year, our bookings were EUR 153.5 million, representing growth of 13%. Please also note that digital bookings growth, excluding the maintenance baseline from migrations, was 10% for the Q2, another indicator of the double-digit underlying momentum in growth coming from new business. By deployment model, we continue to see the growing influence of our subscription shift on digital business, in line with the annual development trajectory we shared at the Capital Markets Day. At the halfway stage in the year, subscription bookings represented 68% of digital business bookings and grew 25% year-on-year. Over the same period, SaaS bookings represented 21% of digital business total and grew 22% year-on-year. In A&N, our bookings of EUR 40.6 million were underpinned by superb deal execution and more than 10 large bookings deals both in Germany and in North America, s ome of these were slipped from Q1, and some were in plan for later in the year. Within Q2, we also saw strong uptake of subscription from our A&N customers, with subscription bookings up 63% in the quarter. For the first half, this meant A&N bookings were EUR 61.9 million, up 8% year-on-year. In terms of bookings to revenue conversion rate, year-to-date, 45% of our digital bookings translated to product revenue, right in line with our full-year planning assumption. In A&N, 74% of our first half bookings translated to product revenue. At this stage of the year, this is ahead of our 68% full-year planning assumption, as A&N saw a higher portion of longer-term subscription agreements in Q2 than we have seen in previous quarters. Please also note that our weighted average contract length for subscription at the end of the first half was in line with our full-year expectation of three years. As evidenced by an important renewal with a very large U.S. sports and measurement brand, we're also seeing a large portion of one year contract renewing as multiple-year deals at that first renewal moment. This indicates we are delivering strong customer experience and good time to value with our technology, which is driving customer satisfaction and continued engagement. As we look towards the second half and full-year bookings performance, we expect A&N to show a material year-on-year decline, such that our full-year outlook remains unchanged. This is because the large A&N deals that drove our Q2 performance are no longer in our second half pipeline. Regarding digital business, which is typically weighted towards the second half, the pipeline we have in place, combined with improving sales execution, does give me confidence we will deliver on our stated guidance range for the full year. Digital business product revenue in the Q2 was €113.7 million, up 10% year-on-year. For the first half, digital product revenue of €212.7 million represented growth of 5%. This performance shows our transformation is working. Our digital revenue stream is also increasingly based on subscription and SaaS, with subscription revenue growing 66% and SaaS revenue growing 45% in the first half. This means we have more high quality, highly visible, and highly predictable revenue to rely on each quarter. In the second half, we digital business revenue to continue to grow. In line with the development we shared at our CMD, we will have a higher share of recurring revenue won in prior periods coming through, and we will see conversion from a greater pool of digital bookings given our second half weighted seasonality. A&N product revenue for the Q2 was EUR 67.2 million, giving us growth of 32% year-on-year. This gave us first half A&N product revenue of EUR 114.7 million, 9% growth year-on-year. As with A&N bookings, we expect A&N product revenue to soften materially during the remainder of 2021. These business line dynamics gave us total product revenue for the Q2 of EUR 180.9 million, which represented very strong growth of 17%. Our product revenue for the first half was EUR 327.4 million, or growth of 6%. Our professional services revenue in the Q2 was EUR 37.3 million, and for the half year was EUR 73.9 million. When adjusted for the sale of our Spanish business sold in June last year, growth in our professional services business was a solid 7% in the quarter and 6% in the half. We also did well on profit in professional services, growing our segment result by 24% in the quarter and 67% in the half. Please note the Q2 is the last in which our Spanish business will be present in our prior year comparator base. The combination of product revenue and professional services revenue gave us total revenue for the Q2 of EUR 218.2 million, which represented growth of 10% year-over-year. For the first half overall, this means total revenue was EUR 401.3 million or growth of 1%. Total ARR at the end of Q2 was EUR 539.4 million, which represents growth of 8% year-on-year. ARR from within digital business was EUR 380.3 million or growth of 9% year-on-year. The portion of our ARR from subscription continued to push ahead during the Q2, showing 97% year-on-year growth. The portion from SaaS grew 48% and as expected from the transformation of our existing customer base to subscription, ARR from perpetual maintenance contracts declined 15% year-on-year. Over on the right of the chart, we have our usual representation of recurring revenue, which during the Q2 grew to EUR 169.1 million, showing 19% growth year-on-year. For the half year, that gave us recurring revenue of EUR 298.8 million, representing 13% year-on-year growth and a contribution of 91% of our product revenue total. Specifically within digital business, growth over the first half was 9%, while recurring total product revenue from subscription and SaaS grew 89% and 44%. This further validates our view that these contract types will be the key drivers of the long-term growth in our recurring revenue stream. Now, moving from our top line to our cost development. All costs as stated for the Q2 were EUR 168.1 million, a decrease of EUR 4.6 million or 3% on the same period last year. For the first half, stated costs were EUR 335.9 million, down EUR 15.1 million or 4% year-on-year. At first sight, these stated declines may surprise given the level of investment we are making in Helix this year. However, when we account for prior year costs related to our Spanish professional services business, COVID-related reductions in spending on activities like in-person events, and a meaningful lowering effect from FX, costs in the first half would have risen by roughly EUR 15 million. This represents around 50% of this year's expected additional costs related to Helix with investments so far in demand generation to help us uncover more opportunity, customer experience to help us drive greater lifetime value, culture and capabilities that will help make our transformation sticky, and the company's IT and cybersecurity capabilities enabling a modern, secure, hybrid working environment. As communicated at the start of the year, we expect to invest roughly the same amount over the remainder of 2021, while ensuring we align our cost base with the full year guidance we have provided for our non-IFRS EBITDA margin. Ultimately, the combination of higher revenue and slightly lower than expected costs drove our operating margin for the Q2 to 28%, ahead of our expectations, f or the half year, our margin was 21%. Looking towards the full year, the combination of lower second half revenues in A&N and continued investment in Helix will see our full year margin land within the stated guidance corridor of between 16% and 18%. I'll just spend a moment on our balance sheet before we move on to cash flow. I'll keep my remarks short, knowing further detail is available in the presentation you will find online. Our approach to managing our financial footprint means Software AG remains a resilient business with sufficient flexibility in our balance sheet to manage a very broad range of potential up and downside scenarios. Our net cash increased to EUR 232.9 million, giving us the cash we need to pursue our active M&A ambitions and to preserve even further optionality. At our recent AGM, we renewed the authorization we have to pursue share buybacks should we opt to do so. On cash flow, during Q2, our Free Cash Flow was EUR 18.5 million and was EUR 58.2 million for the first half. This performance benefited from our focus on cash collection processes and payment term structuring. This gives me confidence in our ability to deliver strong cash flow in the future, p lease remember, 2021 is our trough cash flow year in our Helix transformation. Our progress matches the trend we shared at our CMD this year, and our cash flow will begin a sustainable return to growth from 2022 onwards. Just one final point to mention. FX in the quarter provided a revenue headwind of EUR 6.4 million in the Q2 and EUR 15.2 million in the first half, due to continued strength of the euro against the US dollar. Based on our revenue mix, all other currencies affected the stated numbers only to a minor degree. That remark concludes my presentation. Before we head over to Q&A, I think it's just worth reiterating a few key points from today's session. First, we had a strong Q2 and first half overall. Our transformation continues to move forward with pace. Second, we have delivered revenue growth in digital business, this is an important achievement that brings us back to the original motivation for Helix: profitable, sustainable growth. And last, we have today reiterated our guidance expectations for the full year 2021. We remain confident in our outlook, and we look forward to driving hard towards our goals in the rest of the year. Thank you for your attention. Now it's time for questions. Thank you, Matthias, Sanjay, and Scott. Ladies and gentlemen, you may now ask your questions. Hailey, please repeat the instructions on how to proceed. Ladies and gentlemen, at this time, we will begin the question and answer session. In the interest of time, please limit yourself to one question only. In case of more questions, please ask them in a second round or call the investor relation teams after the call. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please hit the handset before making your selections. Anyone who has a question may press star followed by one at this time. The first question comes from the line of Sven Merkt of Barclays. Please go ahead. Great. Good morning t hank you for taking my questions. Yeah, I have two please. The first one was, Matthias, it was just around the underlying cost development, and if you could help us to reconcile kind of the EUR 15 million underlying cost increase you spoke to with the limited headcount growth in the first half. The second question was just if there was any pull forward or catch up on digital business side. Great. It's Sanjay i 'll just take the second one, which is about, Sven, about the pull forward on digital business. I mean we feel in terms of Q2, digital business was right in plan. In terms of the booking growth, it was very much aligned with what we had planned for the first half. We didn't see any specific pull forwards, but a very strong performance across our first half and, i f you look into the second half, as Scott mentioned, the pipeline is strong, and so we are confident about the 15%-25% guidance we've given you. I'll pass it on to Matthias to talk about the cost development. Yes. Happy to, Sanjay. Again, as a reminder, you need to strip out the cost base for the professional services business in Spain, which is around EUR 18 million and y ou have somewhere between EUR 5 million and EUR 6 million, one time from last year's traveling due to COVID, and the rest is around EUR 6 million effects. If you do the number crunching and adjustments, you come to the EUR 15 million. That's the first half of the answer t he second half of the answer was you alluded to? where did the money go? given your observation around limited headcount development, at least at first sight? I will give two elements on this answer n umber one, we are in line with our hiring plan and pace S cott is set up nicely for the second half of the year. There has been some attrition, for example, pandemic-related R&D in India. But we are tracking well, and it looks as if we're set up nicely again for the second half of the year. The second element of the answer is, I will need to repoint you to the three buckets shared at CMD. Go-To-Market 50%, 40% R&D, 10% people and culture, t hat still holds true in terms of where the money is going. Sanjay gave a good rundown as to the return on investment in his part. Okay. Thank you. Thank you, Sven. The next question is from the line of Michael Briest of UBS. Please go ahead. Yes. Thank you. A little bit of a follow-up on the headcount issue i n North America, year to date, you're down 3% on headcount, I can't believe that's sort of planned. i mean we know from many other companies that there's a bit of a war for talent going on c an you talk about that? As we think about costs, this is the last year of Helix w e're a lot closer to the end of the year and start of 2022. Sanjay, can you confirm that you are confident that all the building blocks are in place to accelerate next year without any incremental costs around that? Thank you. Hey, Michael Briest, it's Sanjay Brahmawar l et me take the second one, then I'll pass it on to Scott Little to make some comments about our North American sales team. Look, when we started the transformation, we told you in 2019, foundations put in place so m ajor changes in terms of the sales force, major changes in terms of type of profile and, o bviously the big changes we had to do in terms of the product, that investment was done in 2019. However, we came back in 2020 and said that we needed to continue that pace of investment i n fact, we were putting some more money and bringing some investments forward. I believe that those changes that we needed to make to now consistently demonstrate quarter- by- quarter, those are well in place. Of course, as for our midterm plan w e will continue to keep some investment into our product areas because competition is not sitting still. We need to compete effectively on the areas of business transformation, IoT, hybrid integration, API management so t hat will continue. No, I don't believe there are fundamental blocks that are now not addressed and have not been taken care of. Scott, a bit about the U.S. population. Michael, this is Scott. You bring up a very good point w e'll just be straightforward w e have seen some attrition on the sales side in North America from competition. It's a double-edged sword w e're doing well, both in terms of performance and in general with the product w hen you raise your visibility, it makes your people a little more vulnerable. With respect to new hiring, we're on track with new hiring and w e believe we've got the right pipeline of people to fix the attrition in the second half. Again, I reiterate my guidance and my confidence about second half i think we will hit our numbers for second half. And we'll be able to manage through the attrition situation in North America. All right. Thanks for the candor. The next question is from the line of Alastair Nolan of Morgan Stanley. Please go ahead. Morning. Thanks for taking the question. Just two quick ones from me, t he first is for Matthias on, just to get a better understanding on the split between one year and three year in the quarter, i know you mentioned you're seeing a positive trend towards multi-year. Just wanted to see how that compared versus Q2 2020? on that split, because we do know there's favorable revenue recognition on the multi-year deals. The second question, just quickly, would be on ARR i know you gave a little bit of a feel for the kind of components there. It does seem a little bit surprising that that has slowed despite positive momentum elsewhere j ust trying to get a better feel for what exactly is driving that essentially. Thank you. Alastair, thanks for the questions. I will take both questions. I'll start with the second one on ARR. I believe there is three elements to be mindful of. One is, we're growing off a higher base to begin with. Number two, the new logos that we are acquiring, they come on average with a lower ACV. Thirdly, let's not forget that the subscription reset, the migration motion is, and I will use Scott's wording there, double-edged sword in the sense that it does impact ARR, but at the same time, it opens the opportunity for the customer lifetime value journey, of course. On the first question, you know this is one of my favorite questions also already from the last quarter i will try to answer like this because I certainly respect the need to have a closer look, and I also fully understand the revenue recognition remark. Now, overall, the point being that the bookings to transformation products, sorry, the bookings to product revenue transformation ratios I have covered in my scripted part, w e are fully on track with the numbers stated at CMD, and we assume that this holds true for the full year as well. We are a little bit above on A&N and potentially also a little notch above the number that we set at CMD at the end of the year. This will play out over the remainder of the year. Overall, in the contractual portfolio, we have around a third of the subscription contracts that come with one year revenue recognition t hat is as far as I will go. The other piece, though, is let's stay mindful of one aspect, and that is why I have the specific customer examples in my part for everyone. One thing is that the journey starts with either a one-year contract or a contract that contains a termination right. In my example, the one-year contract, when it expired, was extended for three years. Yes, it is true that that had a short-term revenue recognition impact, and you can also see from the Q2 to Q1 comparison that this was slightly in favor of digital business. However, let's not forget one very important aspect of the Helix transformation journey, and that is the customer lifetime journey and the stickiness, the proof point of the stickiness of the products that we sell. I hope that if you connect the dots and take it all together, Alastair, that answers your first question. Yeah, no, perfect. Thank you very much. Thank you. The next question is from the line of Knut Woller of Baader Bank. Please go ahead. Yeah, thank you a ctually, two questions as well t he first one, can you provide an update which percent of the installed base has now been migrated to subscriptions? Secondly, you cited that the pipeline for DB is encouraging for the second half. Can you provide here some more color with regards to pipeline coverage and also whether there are some larger transactions here? In the pipe that you expect to be basically turned into revenues in the second half. Thank you. Hi, Knut. The first one, Matthias will take and t he second one, Scott will give you a feedback on the pipeline. I'm sorry i was just getting to the right number a pologies, Knut, y ou might recall that, I think actually it was Scott at CMD, who talked about the 10% conversion that we had at that point. The runway we were still left with. If we apply that to where we stand today, so far we have migrated roughly but 14%, 1/4 of our potential maintenance base, of our staffing base beginning of 2020, if that helps. This is Scott. I'll take the pipeline and transaction question, Knut. Pipeline-wise, we're tracking approximately where we would expect to be, which is roughly three times pipeline expectations for second half. As always, we do have large transactions in every quarter that we would expect to close. I would say no more, no less than we normally do. You add that with really good execution in the first half, that's what gives me confidence that we're on track to deliver second half in general. Knut, I hope that helps. Yeah. Thank you, guys. The next question is from Stacy Pollard of J.P. Morgan. Please go ahead. Thanks. Just a little bit of follow-up on the digital, given that you sounded very confident in good acceleration of digital bookings in second half, can we also now assume a more stable digital revenue growth each quarter? You kind of mentioned that bookings are showing up into revenues in a more consistent pattern m aybe just some thoughts there. Second one, you mentioned active M&A ambition. Can you maybe talk a bit about that? What areas? size? timing? et cetera. Hi, Stacy. It's Sanjay l et me take the second one, M&A, and then Matthias will cover the first one. Stacy, as we said, also when I was mentioning in my piece that we are now really definitely looking consistently in terms of areas in products and innovations where we can increase our TAM significantly. Of course, we're not in a rush, and we want to make sure that when we take the step, it is one that fits very well into the strategy, particularly in the areas of focus that we have established, but also it fits well into the Go-To-Market that would allow us to really leverage and accelerate and capture that additional TAM. Just simply, hunting and process is going very well w e are in good shape. But also we are not in a rush, w e want to make the right choice and decision here. Matthias, over to you. Yeah, happy to take the question digital business product revenue. We have reached the milestone at the half-year mark to enter positive territory, i think that goes hand-in-hand with our confidence as to the full year, important milestone for the Helix transformation. However, if you do the math, and I just want to manage expectations accordingly, if you do the math across the second half of the year, and you know our overall product revenue guidance, which includes both, of course, digital business and A&N, we cannot exclude that along the way, there might be fluctuations, y et, we are relatively confident around positive product revenue development digital business going forward, which I believe we also commented on in the script part. If I may make a housekeeping remark for everybody, first of all, our sincere apologies for the technical glitch. There was nothing we could do on this end, and I'm quick to underline this was not due to Software AG technology, to avoid any misunderstanding. What we would certainly like to offer, because Q&A is always of great importance to us, we are happy to take two more participants on with questions. For those of you who can stay on, we really appreciate that a gain, apologies, w e totally understand this is a very busy day for many of you. The next question comes from the line of Gautam Pillai of Goldman Sachs. Please go ahead. Great. Thanks for taking my questions. Just a follow-up on the digital bookings growth. It does imply a significant acceleration into the second half, to come into the guidance window. Scott did talk about some of the drivers there p erhaps, can you also provide an update on the pipeline coverage you're seeing both in DBP and perhaps in the IoT business, if possible? Secondly, on the cost development, Matthias, you provided a lot of kind of interesting color there. Obviously, your gross margins are increasing post the Spanish services divestment. Is there a kind of an element of conservatism? in maintaining that margin guidance into the second half? If you can provide some color on that'd be great. Thank you. Gautam, could you just repeat the last part of the second question? Did you ask about conservatism with regard to spending in the second half of the year? Conservatism on the margin guidance itself. Yes. Yeah. I understand. So who do we- I'll take the first one, just in terms of what is driving the digital booking to the, you know Gautam Hi, it's Sanjay. First of all, we are seeing great traction, as I mentioned in MarEast, around our iPaaS, API management, our IoT self-service analytics, but also significant uptake onto our process mining and ARIS like innovation that we've brought through t hese areas are really kind of driving the pull in terms of the digital bookings. We can see that. Scott will mention about the pipeline, but we can see that in strong opportunities, specific opportunities that we have along the second half list of customers. That's what's driving the demand S cott, do you want to mention about the pipeline a bit? I'll just add, Gautam h i t hank you, w hen I made the comment about 5.3x with the pipeline, that is specifically digital business. we don't typically need the same kind of pipeline coverage in our A&N business. So 3x is where we're sitting for the second half, and that's around digital business. in terms of reflection, it's pretty well-balanced. I will say, in a surprising way, but a good surprising way, we've seen a significant bump in our ARIS and Alfabet pipeline, specifically around our SaaS deployment, i t seems to be a hot topic right now. You can see that a little bit in the market with Celonis and the Signavio SAP situation w e're benefiting from that as well. That takes us to the second question on cost development or rather, on the margin guidance there. I think we have covered digital business part sufficiently enough around what we expect for the second half. With that said, let's remind ourselves of the A&N element. If you think back to the guidance and we explained the mechanics, what we have sold in Q2, I cannot sell in the second half of the year. That means that that goes hand-in-hand with a drop in contribution from A&N, which also impacts the margin. I believe it was Michael Briest who asked Sanjay Brahmawar about the building blocks, will they be in place until the end of the year so that we can accelerate in 2022? If I had answered the question, I would have obviously given it the CFO spin and would have come back to the EUR 15 million. That is exactly what we need to invest to have those building blocks in place. The way I would like you to think about it in rough terms as to the distribution across the quarters is six and nine. Around six in the Q3. Sorry y eah, in the Q3 and around nine in the Q4. If we sum that all up, yes, we are confident that we will make it into the guidance corridor, and we feel we have the levers under control to manage that. But i don't think necessarily that right now, as of this day in July, that we should be talking about conservatism with regard to the margin guidance. We can return to this question at the end of Q3, and then I'll be happy to give you an update. Thank you, Matthias c an I take and squeeze in one more there? I think a follow-up to the earlier question about digital revenue growth. You did comment that it's going to be a bit up and down on a quarterly. In a full quarter rolling basis, is it fair to assume that you basically need close to 100% in terms of target in 2023? Is that still the assumption which we should work with? Gautam, it was very faint and broke up a little bit with you at the end. Could you just repeat that last portion of your question? You said digital business revenue fluctuation, and then we lost you from there. Just talking about the digital revenue growth. I think Matthias commented that it's going to be volatile on a quarterly basis, which is understandable. On a quarter basis, is it fair to assume that you should be at a high single digit to low double-digit revenue growth pace in digital revenues to get to the EUR 1 billion target by 2023? Thank you for repeating it. With regards to this, I would point you back to what we shared at the CMD a ll i meant to explain is that we shouldn't extrapolate first half into second half just like that. Of course, we are a little back-end loaded at the end of the day in DBP, but o n this, you can just stick to what we shared at CMD with regards to 2022 and 2023 in terms digital business CAGR. I hope that that was what you actually asked, Gautam. Yeah. Thanks so much. Okay. Thank you. Thanks, Gautam l adies and gentlemen, we have time just for one more, as Matthias said. Hailey, could you open up the line just for the final question, please? The final question is from the line of Martin Jungfleisch of Kepler Cheuvreux. Please go ahead. Yes, hi g ood morning t hanks for taking my questions i have two, if I may as well. The first one is on your 2023 ambition. You said that digital bookings growth, excluding the maintenance migration, was 10% in Q2, and I assume it's probably flattish when accounting for renewals. In order to meet the EUR 1 billion sales ambition, how much growth does actually need to come from new customers or upselling in your view? and can you potentially get close to that EUR 1 billion target by just migrating the existing base as you get that 40% or more uplift in revenues? The second question is on your cost base again. Given the rather flattish cost development first half, would you still expect cost growth to peak this year as you pointed out at the CMD earlier this year? That is it. Thank you. I will start with the second question. At the risk of becoming repetitive, cost development was not flattish. That is why I explained the EUR 15 million investment and how you get to the EUR 15 million if you strip out. We did invest in the first half. I just said or explained how to think about the second half of the year, where we will add another EUR 15 million that gives you the EUR 30 million overall, which would be back in line with the EUR 30 million-EUR 40 million, in terms of investment volume that we shared at CMD going into the year. With that said, we stand by what we said, that this should be the investment peak. That does not mean that we will not invest in the future. What we did say, and we also stand by that, is that we will invest at a lower pace w e will become more efficient and as product revenue will continue to grow, that will take us towards our 2023 ambition. Give me a moment to return to your first question, which was, as far as I recall, related to new business and how much would be needed in terms of the contribution to get to 2023. On that, we don't strive for a certain portion of new business, but want to increase the share on a midterm basis. With that said, we need to ensure that in any case, the sales capacity, so Scott and his troops are focused on this as well as the execution of the steadily increasing renewal base. If you like, it is an interplay of the two elements that we will just need to balance out. Right now, I think the trajectory is promising on new business and new logo business. It is increasing w e see the returns from both DACH Mittelstand and the North America campaign, and we closely monitor how we convert this into tangible business. And we also showed how this works with regards to land and expand. Obviously what we land and expand or what we land, whichever way you look at it, then gives you the renewal foundation, the portion for the future. That we will carefully balance out, w e have updated you on the growing importance of renewals, but as a last comment, and again also as a reminder, given the three year average duration, 2019, 2022, 2020, 2023, the importance of renewals, including positive net retention target, truly kicks in from 2022 onwards. Okay. That's helpful. Thank you. Thank you, Martin. Appreciate it. Thank you, Matthias, and thank you everybody for your time today and apologies, as mentioned, for the slight technical hiccup in the middle. If there are any further questions, feel free to drop a note to the IR team, but with that, I wish you all a wonderful summer and holiday, and we'll speak to you in the early autumn. Thank you. Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.