Ladies and gentlemen, thank you for standing by. I'm Hailey, your Chorus Call operator. Welcome, and thank you for joining the Software AG Q3 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. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Senior Vice President of Corporate Development, Robin Colman. Please go ahead. Thank you, Hailey, and good morning, ladies and gentlemen. Welcome to Software AG's Analyst Call and Webcast on the Preliminary Q3 and Nine- Months Results for 2021. Following the release of an ad hoc disclosure on Monday night, this morning, Software AG published the full preliminary results for the reported quarter and the first nine months of 2021, as well as the presentation used in this call. Today's call will start with our CEO, Sanjay Brahmawar, followed by Scott Little, Software AG's CRO, and our CFO, Dr Matthias Heiden. We will try to keep this call to the regular one hour timeframe and cover as many questions as possible. Before we start, here are some housekeeping remarks. This conference call is being 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 also 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. Let me remind you of our safe harbor statements, which is shown at the beginning of the slide presentation and is valid for the entire call. Thank you for your patience. I will now hand over the call to Sanjay Brahmawar, the CEO of Software AG. Thank you, Robin, good morning, everyone, and welcome to our Q3 earnings call. Let me start with a comment on the topic I'm sure will be on your minds today. In Q3, our digital business bookings did not advance at the pace I would've liked. Our growth of 6% was influenced by the timing of a number of subscription and SaaS deals originally planned for Q3, which closed in early October. The main reason for this timing issue was that following investments made in demand generation at the start of the year, it's taken longer than we expected to progress opportunities through our pipeline from initial leads to closed deals. For example, a few deals in our government sector, both in North America and in DACH, didn't close in time for the end of the quarter. Importantly, this is not a systemic challenge. The structural tailwinds driving growth in our markets have not changed. Our product and subscription offerings continue to resonate with the customers, and our sales execution remains strong. These are the fundamental drivers of our transformation, which continue to positively impact P&L in Q3. We have now reported a second consecutive quarter of total revenue and product revenue growth. We've also reported a second consecutive quarter of double-digit product revenue growth in our digital business, the first time we've achieved this in eight years. It takes a huge team effort to transform a company as much as we have in such a short space of time. I'm proud of what we've achieved since the start of Helix and how our team continues to bring us closer to our ultimate destination, a sustainable, profitable growth future for Software AG. Let's turn to the key numbers. We'll start with our digital business. In addition to the Q3 growth just shared, over nine- months, bookings grew 11%. In A&N, our Q3 bookings growth of 2% benefited from the targeted innovation we've delivered through Helix and our 2050+ Program. Scott will provide more detail on this later. Overall, our nine-month A&N bookings growth was 7%. Together, these business line results meant that for the group bookings in Q3 grew 5%. For the nine-month period, group bookings grew 9%. The lead indicators we track continue to give us real confidence about our future revenue growth potential. Digital bookings from subscription and SaaS reached 88% of our digital bookings total. ARR growth was 9% in our digital business and was also 9% overall, and recurring revenue reached 94% of our growing product revenue number. These metrics show how the success of our transformation and the shift to subscription are driving the improving results we are seeing on our P&L. As mentioned a moment ago, digital business product revenue was up 10% year-on-year in Q3 and 6% year-on-year over the nine-month period. Our A&N product revenue also grew 2% year-on-year in Q3 and 7% year-on-year over the first nine- months. Combined, this brought our total product revenue growth to 7% in both Q3 and the nine-month period. This growth, along with 1% growth in our professional services revenue, led to total revenue growth for the third quarter of 6% and 3% over the nine months. Last but not least, operating margin for Q3 came in at 16.8%. This brought our nine-month margin to 19.8%, further demonstrating our ability to grow profitably while continuing to invest in transformation. As we announced on Monday, these results have led us to update our full-year guidance. In A&N, our performance, driven by customers continuing to invest in modernizing their A&N landscapes, has led us to expect better results than was previously the case. For the full year 2021, we now expect A&N bookings growth of between -8% and -12%. In our digital business, we still expect good bookings growth for the year. However, as I mentioned, the pace at which opportunities have moved through our pipeline so far this year has led us to alter our guidance range to growth of between 13% - 17%. The combination of stronger than expected bookings in A&N and solid growth in our digital business recurring revenues means we are maintaining our guidance for product revenue growth of between 0% - 5%, and slightly adjusting our guidance for non-IFRS EBITA margin, which we now expect to land between 17% and 19% for the full year. As we work towards these new full year expectations, we continue to see strong demand for our products in the market. Our execution engine is performing, and as you'll hear, our strategy to land and expand new customers and progress them through our subscription journey is proceeding as we'd like. This is why we're confident we'll deliver these revised goals and why we're maintaining our stated 2023 ambitions today. By now, I hope most of you are familiar with the three levers we are activating to support digital transformation in our client base and achieve our growth targets. One, landing new business to provide a foundation for future expansion of the customer. Two, migrating existing perpetual customers to subscription while driving adoption of new innovation. Three, capturing the significant upside potential in customer lifetime value at the point of subscription renewal. As an example of our new business success, we secured Liebherr, one of the largest construction machine manufacturers in the world, as a new customer. Liebherr is now using Cumulocity IoT and analytics to integrate and analyze the data they generate from their earth-moving machines, supporting asset tracking and asset health monitoring. I can give you a sense of the future lifetime value potential with Liebherr by looking at previous IoT and analytics new logo win with Arkema in 2019. This was originally a one year, five figure bookings contract. On its first annual renewal, we increased its value by about 30%. On its second annual renewal, we secured a three year subscription agreement with a significant increase in bookings value to a high six digit engagement. During Q3, we also built on our Q2's migration success, maintaining our average migration multiplier of 1.4x. Partnering with Microsoft, we delivered a very large migration for DHL Express. DHL was a long-standing customer, which, through Helix, we now have migrated to subscription. The investments that we've made in product innovation have seen DHL expand its webMethods integration relationship with us. In combining this extension with its use of our IoT products, DHL is well on its way to becoming a truly connected enterprise. With only around 17% of our digital business perpetual maintenance base having been migrated to subscription, we have many more value creation examples like DHL ahead of us. When this agreement comes up for renewal in 2024, we will have the opportunity to increase contract value substantially, just as we did in Q3 with the renewal of Airbus Defence and Space. This included an upsell of more ARIS capacity and will build on major business process simplification project. Our innovation will help make Airbus approach more user-centric, promote compliance, and deliver all-round business value by enabling continuous improvement. We can only use these growth levers because of our relentless focus to focus our product set, sharpen our execution, and embolden and empower our team. The cumulative power of this activity is driving our momentum and our success. In our focus and execution pillars, our success in delivering regular innovation to the market is helping us win new customers, drive growth, and cement our technology leadership. On new customer wins, our iPaaS, API management, and Analytics areas have led the way in helping us win new customers. We delivered 66 new logos in the third quarter, representing 40% growth year-on-year. This takes our year-to-date new logo total to 206, which is 31% ahead of this time last year. These numbers show we are on track for the significant acceleration in new customer acquisition I mentioned in Q2. On growth, year-to-date bookings in each of these areas have also grown in the high double digits. On technology leadership, in the space of a few weeks during the third quarter, we were named a leader in Forrester's iPaaS and Industrial IoT waves. Here, we're the only company among eight providers to receive top scores in the current offering categories. During Q3, we were also recognized as a leader in Gartner's Magic Quadrant for Industrial IoT, as well as its Magic Quadrant for API Management for the fourth consecutive year. These results both reflect and help drive very high customer satisfaction, demonstrated by our Q3 product NPS score of +56. NPS scores at this level indicate the strength of our product and service experience and give me real confidence in our ability to deliver the value-added renewals we've spoken out before. Looking ahead, we expect to deliver similar impact with more recent innovations. Specific examples from Q3 include the introduction of a webMethods connector for ARIS Process Mining, which enables out-of-the-box integration with an insight from more than 300 systems like ERP, Salesforce, and Workday. We also delivered a new data hub for webMethods, which is helping customers access real-time insights on their integration data, enabling live business decision-making, which increases efficiency. In IoT and analytics, which produced strong double-digit growth in the quarter, we announced an exciting new app to automate the calculation of overall equipment effectiveness for manufacturing customers. Developed alongside our ADAMOS partners, this uses sensor data to produce equipment performance reports, previously a painstaking and costly manual process, in minutes. In our team pillar, we continue to build a culture and capability which will be the foundation of our future success. We are staying close to our people as our transformation accelerates, launching the third instance of our global employee survey in Q3 of this year. We maintained our high participation rate at more than 80% this year, showing our workforce is engaged, aligned, and highly motivated as we drive towards our 2023 ambitions and beyond. We'll update you on the results in our next call. We've also been working hard to help our people adjust to the new hybrid working environment with a focus on enabling collaboration across the globe. In Q4 of this year, we'll host our first global Tech Interrupt innovation event that colleagues from across the business will work together and bring their new product ideas to the table. In the previous iterations, this event has brought new ideas like webMethods AppMesh to our attention, and has since gone on to deliver real commercial success. We are very excited to see what comes out of this year's event. Very importantly, diversity, equity, and inclusion remains a vital aspect of our work to put the people in our business first and help them flourish. We now have 24 DE&I ambassadors helping us to bring the fullest range of people and ideas to the development of our business. All of this activity is helping to motivate our people and give their activity with Software AG real purpose. I'd like to really thank them all for their efforts during Q3 and for their commitment this year. I'll now pass across to Scott, who I'm happy to say is here with us today in Darmstadt. He'll give some extra clarity around our digital business momentum on A&N and on our pipeline confidence. Before I do, I'd just reiterate the point I made up front. If I step back for a moment, I see the range of activity and success across our business, which gives me full confidence in our plan. Yes, we experienced delays in our Digital Business during Q3, big picture, the fundamentals driving us forward, our market opportunity, our leading product set, and our ability to execute remain firmly in place. Scott, over to you. Thank you, Sanjay, and hello, everyone. It is great to be here to layer on a few points of detail from within the sales organization. The first thing to say is that I share Sanjay's view of our third quarter digital business booking results. It was not as strong as I would have wanted, but we understand the pipeline progression challenges, and we are resolving them. The key challenge has been how to progress new land and expand opportunities at a pace we can predict with as much accuracy as we can for deals with existing customers. In the latter case, we have the relationships in place, we understand the customer's process, and our sales organization is experienced in delivering this kind of deal. Gaining the level of familiarity required to support the progression of pipeline opportunities with new customers requires a different approach that we are still scaling. Specifically, we are now focused on being more programmatic in how we progress such opportunities through our pipeline. We're creating more repeatable sales plays for our mid-market teams, like those already having a very positive impact on our Mittelstand focus. We are streamlining our contracting vehicles to reduce complexity. We have recently launched a new prepackaged professional services offerings. These offerings, aligned to our repeatable sales plays, enable us to move customers, especially new customers, to a buying decision in a faster and more predictable manner. As Sanjay said, in Q3, we also had a specific challenge related to the timing of some of our government deals, both in North America and in DACH. The reason for these delays were really about leadership changes on our side and less about the competitive situation with the end client. These deals weren't lost, and some of them have now been closed in Q4. We continue to invest behind new heads, and we're attracting really good talent to our business. The reality right now is our hiring pace is good. New hires in sales are actually 38% ahead of Q2, and combined with a slowdown in sales attrition, overall sales and marketing FTEs have increased sequentially by 29. The other side of the story is that although we have been successful in stabilizing the number of people moving away from our business, especially in North America, demand for talent in our market right now is extremely high. Despite the new joiners, this dynamic has made it hard to grow our teams as quickly as we'd have liked to this point. To me, what matters most is that looking ahead, I'm confident we're going to have the team we need to reach our goals. There are two main reasons for this. First is that we do continue to invest to get the right people. We've been strong in this area, and I expect that to continue. The second is that historically, our sales teams have had to do everything for their clients. As renewals ramp up and our customer success teams take on the customer renewals element of our engagement process, more of our direct sales capacity will be freed up to hunt new business. Final thing to note is that while we have absorbed much of the cost of that renewal activity, we haven't yet seen much of the benefit, which as you know, really starts to kick in from 2022 onwards. Importantly, our execution of well-qualified sales opportunities in Q3 was good. We can see this in our digital business win rate, which was actually ahead of prior year quarter. We're continuing to beat competition in the local marketplace. During Q3, we beat PTC to an IoT contract with Dubai Electricity and Water Authority. Along with our partner, Altea, we beat Boomi for an iPaaS agreement with Galileo Global Education Italia, a leading group of Italian schools. Galileo is using webMethods to build an app for 20,000 students around the world, ensuring its ability to educate and inform in our new hybrid working and learning environment. We also saw more early signs of success from some of our most important first-half investments, our programs to raise profile in DACH Mittelstand and in target accounts in North America. In our North America campaign, we've seen promising engagement from more than 90% of our 500 major accounts we targeted with this activity, and around 10% have converted into tangible pipeline opportunities. This first contact-to-pipeline conversion rate is much higher than we would expect without such a targeted approach. As mentioned, we do expect most of this demand to translate into booking success in 2022. Our focus on the DACH Mittelstand has also seen us close 35 new deals cumulatively yielding multimillion EUR in bookings. Our pipeline is increasing all the time and now includes more than 300 opportunities on a rolling four-quarter basis. More than 75% of those opportunities come from net new customers, which is very exciting in the context of the land and expand journey Sanjay was outlining earlier. Currently, 63% of our deals are closed with the new subscription pricing and packaging we built through Helix. This standardization has had a significant impact on our deal velocity and our ability to land new customers. Far, around a quarter of DACH Mittelstand deals have actually closed within a 90-day window. One of these was an excellent business transformation win with the Klinikum Lippe, one of the largest municipal hospitals in Germany. This deal was closed in just 25 days, the customer already plans to expand the use of our technology in additional sites. We'll be making greater use of these dedicated and repeatable plays to accelerate our sales cycles, both in DACH as well as the rest of the company in 2022 and beyond. Looking at the important route to market provided by our partners. Incremental digital bookings from partners made up 13% of our year-to-date total at the end of Q3. These bookings come from partner deals registered with us. They are often in customer accounts we do not sell into directly, or where OEMs embed our technology into their own solutions before selling to their customers. This contribution is more than double what we saw for Helix. I'm very pleased with how well our channel is supporting our growth. The new partner program I mentioned at the half has also been successful with pretty much all of our active partners now part of the new program. Importantly, during Q3, we saw excellent results on some of our OEM relationships, which help us lower our cost of sale and customer acquisition. During the quarter, we extended our partnership with NTT, which has now adopted Cumulocity as part of its own global IoT solution, supporting its expansion outside of Japan. I'll touch on A&N and expand a little on Sanjay's earlier comments. Listen, A&N is an incredible product. Its customer base relies on it and provides us with some fantastic relationships. A&N's current customers make up nearly all of its market opportunity. It's not realistic to believe we'll grow significantly beyond this group. I want to explain the three factors driving A&N's success and the clear reasons why the runway for each of these is limited. The first factor is what we call freedom for legacy. This is partly about enabling the integration of A&N data from other customer systems, and it is partly about giving customers a more modern, user-friendly experience with their A&N technology. We've updated A&N's interfaces and the way its customers interact with the product across the board. When this technology has been introduced to the customer base, there will be little further work to be done for them in this area. Second factor is around innovations like zIIP offloading, which is highly valuable to those who've already invested in zIIP, but really not available to those who haven't. The third is our support for cloud migration, which can only be adopted by the part of the A&N customer base that is running Linux. This technology can help them significantly reduce their cost of ownership and provides us with a great cross-sell opportunity for our integration business. That group also is finite. While we are lifting our expectations this year for A&N, we still don't forecast a sustained acceleration in A&N performance over the long term. Now, finally, just a word on our Q4 pipeline and in 2022 before I hand to Matthias. On Q4, overall, I feel we're in a good place to meet our revised guidance as we enter what is seasonally our strongest quarter. We've already made good progress on the opportunities with existing clients where we have the relationships and the knowledge to get them over the line. We're also crystal clear on the new business we need to convert in Q4, and I am confident that the quarter's most important customer opportunities will exit the funnel well. As we start to look beyond this year into 2022, we have quality pipeline in place, and we'll continue to focus on progressing those opportunities through the pipe using the levers I covered earlier. I am confident in our ability to deliver on this goal, and I believe we're in the right shape to keep driving growth forward. Matthias, over to you. 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 the quarter, look closely at the good progress we're making on both revenue and profit, and summarize the remaining pieces of the financial story from a busy Q3. First, bookings. Our overall bookings of EUR 107.2 million in the third quarter is a solid result. This represents 5% year-on-year growth and means that for the nine-month period, we delivered bookings of EUR 322.6 million or growth of 9%. In our Digital Business, third quarter bookings were EUR 87.8 million, representing 6% growth. For the nine-month period, our Digital Business bookings were EUR 241.2 million, showing growth of 11%. By deployment model, we continue to see our Digital bookings growth driven by our subscription shift. Subscription bookings grew 35% in Q3 and 28% in the nine-month period. In Q3, our SaaS deal count was up year-on-year as we progressed the land and expand journey with a number of new customers. Bookings declined by 13%, mainly due to the timing of those deals mentioned by Sanjay and Scott earlier. Over the nine- months, SaaS bookings within our digital business grew 6%. For subscription deals, our year-to-date weighted average contract term remains around the three-year mark. In A&N, third quarter bookings were EUR 19.4 million, representing 2.5% growth. For the nine-month period, A&N bookings were EUR 81.4 million, showing growth of 7%. In terms of bookings to revenue conversion rates after nine- months, we continue to track to 45% of our full year digital bookings translating to product revenue. For A&N, we now expect roughly 72% of our bookings to translate to product revenue. While our Digital ratio is in line with the planning assumption we gave at our February Capital Markets Day, our A&N translation ratio remains a little ahead of our 68% assumption we shared at the same time. This is because we continue to see a higher portion of longer-term subscription agreements than we expected at the start of the year. Now, looking at product revenue itself. In the Digital Business, third quarter product revenue was a strong EUR 113.6 million, representing 10% growth year-over-year. Pleasingly, all of our four product business units grew product revenue in Q3. For the nine-month period, our Digital product revenue was EUR 326.2 million, which represents growth of 6%. In A&N, product revenue for the third quarter was EUR 48.5 million, which represents growth of 2%. For the nine- months, we delivered A&N product revenue of EUR 163.2 million or 7% growth. The combination of digital business and A&N product revenue gave us group product revenue for Q3 of EUR 162 million or 7% year-on-year growth. For the nine-month period, our product revenue of €489.4 million represented 7% growth. Our professional services business continues to contribute well to our results. Importantly, this quarter was the first in which we no longer have our Spanish professional services business in our comparator base. With this element of our transformation behind us, you can now see the benefits in our PS business results. Revenue during the third quarter grew 1% and was more profitable than was previously the case. Adjusted for the sale of our Spanish business, growth was 2% across the nine-month period. We delivered a profit margin in our PS business of 15.2% and 17.6% across the third quarter and nine-month periods respectively. Together, our product revenue and our professional services revenue gave us total revenue of EUR 198 million for Q3 and EUR 599.3 million for the nine-month period. This means total revenue grew 6% in Q3 and 3% over the first nine- months of the year. Total ARR at the end of Q3 was EUR 555 million, which is 9% growth over this time last year. ARR from within our digital business, which is driving our overall total, was EUR 392.9 million, also 9% up year-on-year. Like our bookings growth, our ARR continues to be driven by our subscription shift. Our subscription ARR grew 83% at the end of Q3, while our SaaS ARR grew 40% year-on-year. You can see on the chart that our recurring revenue stream is continuing to build strongly. In Q3, recurring revenue grew 14% to EUR 151.9 million, now representing 94% of our product total. Across the nine-month period, this performance gave us recurring revenue of EUR 450.7 million, representing 13% growth year-over-year. Recurring revenue over this period represented 92% of our product revenue total, which is once again above our midterm ambition. We shouldn't lose sight of how important this predictable, high-quality revenue will be to our future success. Turning now to our cost development. Total costs for the third quarter were EUR 173.5 million, an 8% increase on this time last year. For the nine-month period, total costs were EUR 509.4 million, a 1% stated decrease year-over-year. As you will remember, in the first half earnings call, I explained that to reach a more appropriate year-over-year comparator base to assess incremental investments, we should adjust our prior year cost base for elements associated with our professional services business, COVID-related travel, and FX. After nine- months, this adjustment amounts to roughly EUR 27 million. When adjusted for that EUR 27 million, our nine-month 2021 cost base of EUR 509.4 million therefore indicates an increase of around EUR 25 million on last year. This means we are approaching the EUR 30 million-EUR 40 million Helix investment corridor for 2021, which we announced at our Capital Markets Day. Along with the sales and go-to-market investment in initiatives like our Mittelstand focus in Q3, we have continued to modernize our R&D organization to drive sustained productivity improvement, and we have also continued to invest in our people and culture. On the R&D side, we have now moved the majority of our support process from a disparate landscape of systems to a single platform. We have also completed the first phase rollout of a new subscription business management system in DACH. This program will soon be rolled out across the whole business to ensure we can run our growing subscription business at real scale. Linked to this, on the people side, we continue to grow our customer success organization, which now includes more than 50 people. The new headcount will drive the sales capacity increase that Scott was mentioning earlier. With more customer success people focused on renewals, our account executives will be able to spend more time hunting new business. Overall, while we continue to invest in line with our plan, our stronger than anticipated product revenue performance drove operating margin to 19.8% for the nine-month period. In Q3, our operating margin was 16.8%. As usual, I'll just touch on our balance sheet before moving on to our cash flow results from the period. We remain a financially resilient business, which has the flexibility it needs to pursue its ambitions and protect itself against potential risk. Our net cash increased to EUR 249.7 million at the end of September 2021. Free cash flow during Q3 was EUR 15.4 million and benefited from improvements in our cash collection processes and our focus on payment terms management. This success marks the technical impact of our transformation on cash flow during the quarter, which will continue until we begin the exit from our cash flow trough next year. Over the nine-month period to the end of September 2021, free cash flow was EUR 73.7 million. Finally, despite a small benefit of EUR 1.6 million in the third quarter, FX provided a revenue headwind of EUR 13.7 million in the nine-month period due to year-to-date 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. Now it's time for me to wrap up. A few things I would like to reiterate before we close. Firstly, our journey towards sustainable, profitable growth remains on track. We are on target for a solid finish to the year, and our 2023 ambitions remain in place. Secondly, the Q3 result in our digital business bookings was not a systemic issue. Our true momentum remains strong, and we continue to deliver the market impact we need to drive accelerated future growth. Finally, it is encouraging to see our return to product revenue growth continue. Ultimately, it is sustained profitable growth that will prove the success of our transformation. Thank you for listening. Now it's time for your questions. Thank you, Matthias. 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'll 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 team 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 set the handset before making your selections. Anyone who has a question may press star followed by one at this time. The first question is from the line of Stacy Pollard of J.P. Morgan. Please go ahead. Thanks very much. I did have multiple questions, but I will just ask one and then jump back in the queue if it doesn't get asked, the other ones. I guess the first one, my question would be, you talked about the setback on digital bookings. Scott spoke about some of the things that you're doing to correct those pipeline progression challenges. That was very interesting. Can you also talk about how quickly that will recover? You said it was not a systemic issue, that sounds like 2022 and onwards, you'd definitely still be targeting that 15% - 25% range for digital bookings. Is that correct, the way to think about it? Yeah. Hi, Stacy. It's Sanjay. Look, I would say, the demand generation that we initiated at the beginning of this year, that really kicked off very well. We've been putting that demand into the top of the funnel. As Scott talked about, all the actions we are doing now to make sure that that new business demand, we are more predictable in terms of how much time we take to be able to close that. That's the kind of challenge that we're working on. It's getting better because we learn more as this new business becomes a proper habit and a DNA in the company. In the past, if you remember, we've been focusing more on maintenance and harvesting the customer relationship. That's number one. Why I don't see this as systemic, and Scott neither, is because we see the demand moving into the first half of into 2022. As we get sharper with the execution and the time duration, we see conversion because our execution rates and our conversion rates are really high. They're getting better every quarter. That's kind of the reason why we are confident. As we get our hands around this new business conversion, we are able to continue. First and foremost, we reconfirmed the midterm goals this morning, so that should tell you about our level of confidence. A large portion of our midterm development is premised on existing relationship migrations and renewals also. We demonstrated our strength on migrations. You see we continue the 1.4 multiplier. This conversion rate is really strong. The renewals, again, we spoke about this in Q2 also. Our success in renewing and upselling is also demonstrating well. Now on the new business, we land these new logos, which have grown now 40% Q- on- Q, year-on-year for the quarter. We are now working on compressing this time span. Those are the reasons, Stacy. Thank you. The next question is from the line of Gautam Pillai of Goldman Sachs. Please go ahead. Great. Thanks so much. Actually a follow-up to the earlier question, the comments made by Scott in the prepared remarks. Are you happy with your sales organization from a headcount standpoint right now? Given the competition for talent, are there incremental investments required to hire and retain people? Also on the new logos, very impressive growth in new logos. From a financial standpoint, when should we start to see these new logos contributing more meaningfully to bookings growth? Thank you. Over to you, Scott. Yeah. Thanks for the question. Am I happy with my sales organization? I'm very happy with my sales organization. In general, they had an incredible execution this quarter, good conversion, and good predictability for most of the business. Yes, I'm very happy with them. Am I happy with the current staffing level? Well, no. We still have work to do there, and it's not a function of our recruiting process. It's not a function of our ambition or our energy. It's for every one we bring in, sometimes we see one go out. That's the bad news. The good news is, as we came through Q3, we've seen the attrition piece of it stabilize, especially in North America. Our assumption is that if we hold with the stabilized attrition where we at today, and we continue to ramp the recruiting engine through Q4 and into Q1, I have confidence that we'll get to the staffing level that we want. I do have a little bit more work to do there. Yeah. Gautam had another question about the new logos. Do you just want to talk about when we start seeing the results of the new logos? Yeah. The results of new logos in terms of the land, you see it in the numbers in the growth. It's typically a minimum 12 months, in some cases, two years process to take them from the initial land through kind of the medium size expand to really the big business commitment and three-year commitment. You saw that with the Arkema example. That would tell us as we put this in place, we should start seeing the first fruits of that in 2022, but the vast majority of it happen for us in 2023. That would be the timing on my view. Got it. Thanks very much. The next question is from the line of Michael Briest of UBS. Please go ahead. Yes. Thank you. Sanjay or Scott, I guess, Scott, you said that July was good, so you had that confidence over Q3. It sounds like October saw a lot of the slippage close. Can you give us any idea if those deals had happened as planned, what Q3 growth rates in DBP orders would have looked like? Obviously you have trimmed the full year guidance, so why have you taken that more cautious view? Is it just because you haven't got this visibility around new pipeline so much? Apologies, a short follow-up from Matthias. Just on renewals, EUR 55 million year to date, what are you expecting for Q4? What are you expecting for 2022? Thanks. While Matthias gets his numbers together, I'll go ahead and answer the first part. Yeah. First and foremost, we did have a very strong start to July. I would characterize what happened in the business as pretty compartmentalized. It was in the North American government business, and specifically the Fed business, where we had some deals slip at the end of the quarter. As you know, that's the end of the fiscal year for the U.S. government. It's kind of a crazy time, and when you're trying to get new business off the table, sometimes timing is unpredictable. I'll add that we've just recently hired a new leader for that business. Our long-term leader from about 14 years retired, left the business in May. We now have a leader in place, but during that close of quarter period, we didn't have a leader in place. It was being managed by the team as it was. In a couple of those cases, you can't replace 14 years worth of relationships. That prior leader, great guy, in many instances, was able to reach in at the end of a quarter, and while not affect the overall process, at least drive it a little bit with senior leadership. We lost some of those relationships, which we've now replaced. That new leader actually started mid-October. On the doc side, it was a combination, metrics-wise, top six deals in terms of size that we didn't close in October that we expected. Three of them were for the government business. It was a varied set of issues, kind of similar. I don't know if you noticed, we did lose our doc leader. Alvin left in the middle of the quarter. The guy that I put in place to manage it, good guy, enterprise commercial guy, he didn't have those same relationships that we could then reach into on the government side of the business when we needed it. The reverse is, he had great relationships on the enterprise side of the house where he came from, and he's the guy that actually led the close of that big DHL deal. He'd been on the DHL team for years and years, solid performance. I would really boil it down to those two situations, which I think we've fixed clearly with a new leader in the government business in North America. Then in the deal slate profile for Q4, we post some of those government deals, and more importantly, the deal slate for Q4 is much more skewed to commercial. The place where, in the case of an enterprise leader we have in doc, it's his sweet spot, both in terms of experience with the clients and existing relationships. Hopefully that answers the question. I think Matthias is ready with your numbers question. Yeah. Morning, Michael, and thanks for the question. We expect around EUR 25 million in terms of renewals for the fourth quarter. For 2022, while it is not guidance time today, but you asked for an indication, please treat it as such. We expect the full year number of around EUR 150 million for the full year 2022. Thank you. The next question comes from the line of Allison Noland of Morgan Stanley. Please go ahead. Morning. Thank you for taking my question. Maybe just one on more so on costs and investment. It sounds like some of the returns from the investments you've made this year are taking slightly longer to materialize, and I'm just wondering what that means potentially for the outlook on costs into next year. Obviously, it's not time to set guidance, but is there any commentary you could provide on exactly how you're expecting costs and investment to look into next year? Is there any risk that could be maintained at a slightly elevated level given the return is taking slightly longer to come through? Thank you. I take that question. Morning, Allison. Thanks for the question. The returns are taking a little longer in terms of us having to progress the deals. As Scott was clearly stating in his remarks, we're building the pipeline, we are interacting with the North America target accounts, and we have increased the R&D efficiency that I was touching on in my remarks. When we look ahead, yes, there will be a little bit of, call it rollover of investment into 2022, because on some investments, we already know today we won't have the capacity to execute them this side of 2021. However, with that said, that does not deteriorate the guidance that we have given at Capital Markets Day in terms of cost development for 2022 and beyond. Great. Thank you. Thank you. The next question is from the line of Knut Woller of Baader Bank. Please go ahead. Yeah. Thank you. If I've done the math correctly on getting back on DBP, we would need to see something like a mid-20% acceleration of bookings growth again in the fourth quarter. Trying to get some more color here again on the deal slipped. Can you quantify the effect and also what was closed in terms of volumes now early in Q4 to get here some more comfort with regards to the guided growth acceleration in the quarter? Also briefly on A&N, since you confirmed the midterm targets, do the targets that you communicated at the Capital Markets Day for A&N for 2022, 2023 still hold? Thank you. Hi, Knut. It's Sanjay. Let me take the second one, and then I'll pass it on to Scott, who can talk to you about the strength of the quarter and executing Q4 at a 20% plus digital bookings growth. Look, on A&N, obviously, we are putting a lot of effort in explaining the dynamics of A&N because it's a finite customer base, as you know, Knut. We are exciting this customer base with really good innovation and very targeted innovation that Scott spoke about. This innovation is definitely getting traction, and a bit to our surprise, I would say, we are seeing customers in A&N shift to subscription. Of course, as we shift to subscription, we get the opportunity of adding more and being able to increase the consumption of the customer. However, keeping that in mind, we are quite realistic about the runway in terms of being able to grow the business. I think the forecast that we have made and let's say the outlook that we've given in the Capital Markets Day for the midterm, that's pretty good. That's pretty much where we see A&N progressing. I wouldn't really foresee a dramatic change in that. Let me hand it over to Scott, who can talk about Q4 trends. I'll answer the questions hopefully in order. Thanks for that, Knut. First, your math is right. In order for us to hit the guidance corridor for Q4 and still land on the total year, we got to be in the 20% range to grow bookings on the DBP side in order to hit the guidance. We know that. We feel like we've got the pipeline and the deals in place to get that done. The second question you asked was about where we stand linearity-wise compared to last year. We're actually doing pretty good. Part of that, let's be fair, was the help of stuff that should have landed in September and landed October, but that's okay. We got those deals in the door. We're ahead, today, the 21st, of where we were same time this time in the quarter last year. Predicted linearity for October is ahead of last year's linearity as well. That piece also gives me confidence that we're on the right track. And if I may- Thank you, Scott Round that off, Knut, just quickly. Had we closed those deals in the third quarter, it would've been double-digit solid growth in the third quarter, just to put the volume into perspective. Thank you, Matthias. Is it then fair to assume also since you mentioned that it's predominantly related to the government sector, that these are large volume deals? That's basically what to conclude from your add-on, Matthias. Is that fair to conclude? I'll take that one, Knut. It's a combination. There are some large volume deals there, for sure. There were some medium-sized ones, too, so I don't want to mischaracterize, but it was a combination. In the doc, it was three or four, and in the government business in the U.S., the same thing, three or four. Thank you very much. Sure. As a reminder, if you wish to ask a question, please press star followed by one on your telephone keypad. The next question comes from the line of Sven Merkt of Barclays. Please go ahead. Good morning. Thank you for taking my questions. The first one is a bit of follow-up question on Michael's question. When I'm looking at the ramp in growth for digital next year, can you comment and maybe even quantify to what extent next year's revenues will benefit from renewals, and to what extent you face a headwind from the revenues you pulled forward when you converted maintenance customers into subscriptions? Secondly, the product revenue guidance of 0% - 5% implies a pretty wide range for Q4. You're up now 7% year to date. Is the lower end of this really still realistic? Hi there, Sven. It's Sanjay. I'll take the first one, and I will pass on the second one to Matthias. Listen, in terms of revenue growth, so renewals growth and the impact of these renewals for next year, we see that quite strong. The way we look at it, we don't see this as maintenance, just moving maintenance across. We are actually really shifting the customer to a customer lifetime value. This is a very important shift in the company because in the past we were very dependent on a customer to just renew that maintenance and possibly have a small amount of increase that might come through the annual. Now we're talking totally different, because the moment we shift a customer to subscription, we assign a customer success agent, a customer success manager to that, and our professional services people are attached to be able to make sure that the customer deploys and can use the software. As we move along the journey, we're able to then influence them with other capabilities, with cross-sell, up-sell in that same product portfolio. Therefore, this gives us confidence that the maintenance that has shifted now into the renewal, that they come up for renewals in 2022, 2023, we have a very strong opportunity of that net churn being above the current 104% that we are already achieving. This gives me that confidence there. I think the other thing is the success rate in converting the maintenance customers also tells us that the customers are really appreciating the new innovation that we are bringing to them. This innovation is resonating. The product is sticky, as you know. If you're able to create the right value, we are able to get them across. I'll pass it on to Matthias about the product. Morning, Sven. Thanks for the question on product revenue guidance and the seemingly wide range. Why did we choose that range? It's a question of two things mainly. One is the deal mix projection. We foresee more SaaS elements, plus a softer landing on A&N that sort of takes us down back into that range. To give you an indication, we feel very comfortable with the middle of that range and are likely to land north of that, because we see some positive elements at the same time. To give you one example of positive trends in net retention, that gives us a little bit of upside at this point in time. Hopefully, that is helpful to navigate how we get into the range and where we are likely to land. Okay. That's clear. Just maybe quick follow-up on the maintenance conversion. Do you expect to convert roughly the same amount of DB customers next year as you did this year? Listen, we are right now at about 17%, as you know, and the pace is actually quite good. I think we will continue this pace next year also. I don't know what we will end up by the end of Q4, but I guess if we can help extrapolate that's probably the same pace we will expect in 2022 also, Sven. Okay. Thank you. Sure. Just to jump in, considering the time, we've probably got time for one more question. Haley, could you open the line for the final question, please? The final question is a follow-up from the line of Michael Briest of UBS. Please go ahead. Thank you. Thanks for squeezing me in again. Can we get a sense on the mix of one and three-year subscription? I was a little unclear on why the SaaS bookings were weaker. Was there a particular product line, again, geography? Was it the federal and that government stuff? Could you talk about the SaaS issues and how you expect that to develop in Q4 next year? Thanks. Sure, Michael. I think Matthias will take the first one, which is around the mix of one and three, and then Scott, you can give a comment around why the SaaS is. Yeah I can start with the SaaS comment. Yeah, a portion of those deals that we were expecting, Michael, at the end of Q3, were SaaS. That explains part of the booking delta in Q3. It also explains why we're being a little conservative about the mix on product because we saw more of those SaaS deals fall into the Q4 pipeline than we frankly expected. Good problem. No issues with product, no issues with customer adoption, really just a timing issue of those deals. It's really exciting actually for us, in the government space in the U.S., because we worked really hard for a long time to get our products cloud ready and then supported with all the certifications that are required for us to deliver those products in the cloud. We continue to make progress, add new modules, new functionality to that capability, and that's only going to help us in the future. It is a new deployment style for that space. In one case, it's not only a new deployment, but also a new customer, and it just took us a little longer to get it through the knothole than we were expecting. Hopefully, that answers your question. Matthias? Yeah. Happy to take the question on revenue or bookings to revenue, which it ultimately was about. You came via the contractual structures, Michael. Allow me to start by sort of pointing everyone back to what I said about the bookings to product revenue conversion, and that we're fully on target for the digital business with the percentage that I stated, which also indicates that this is not influenced by contractual structures. With that said, because you know I don't like to go into all of these contractual structures because I think it is distracting, allow me to take one moment to explain how the subscription mechanics, and that is the root cause, drove the digital business revenue in the third quarter despite the seemingly weaker bookings growth. The subscription mechanics behind the revenue growth were a mid-single digit contribution from three-year deals from last year that were signed with an annual termination right that sort of gave us revenue again in the third quarter of this year. We have the subscription contract maintenance piece, and we have the scaling of SaaS. With that, I mean SaaS revenues from contracts signed earlier in the year now unfolding, for lack of a better term, on the P&L. That should help to explain the revenue development beyond the contractual structures, because that is exactly in line with the conversion rate stated at CMD. Okay, thanks. I'll go away and think about that. Thanks. Thank you. Okay, I think we have that, ladies and gentlemen. I wish you all a very good weekend and a new year, and we'll speak to you all soon. Thank you. Thank you. Thank you. Ladies and gentlemen, the conference is now concluded and you may disconnect your telephones. Thank you for joining and have a pleasant day. Goodbye.