This is the summary of Q3. Net sales grew by 6% and operating expenses and so on grew by 1% and operating income grew by 30% and operating margin improved 22 from 18%- 22%. 18% was last year. You might remember one year ago in 2020 it increased from 12%- 18% and this year it's 22%. So we are definitely seeing improvement in terms of our operating margin. Now total operating expenses includes the remuneration that is linked to the share price. Because of the share price increase, JPY 16 billion or 24% of our operating margin is what we've posted and pre-GAAP growth is only 1% as you can see at the bottom of the slide. Kevin Simzer will explain the details later, but I would like to share just one comment about consumer business in Japan. In the case of consumer business in Japan, the three-year version sales is as big as a percentage, and the three-year version basically is renewed in advance, and there is a bit of discount that is applied, but we doing that from this quarter, and we want to increase the value added. We have actually increased the price this year. So price increase and also the absence of the discount for the earlier renewal contributed to this, and compared to last year, 7% lower in terms of consumer business in Japan. But it is not really affecting the renewal in this quarter. Renewal is going on toward maturity, so we will go back to the normal renewal rate in this quarter. And consumer business pre-GAAP growth is already being achieved in this current fiscal quarter. As I've explained before, this is a stock option related cost increase or contribution related to the share price booked in JPY 1.4 billion. And adjusted that. After adjusting that, operating income the impact was JPY 16 billion or 42% increase. So not only the sales but also balance of sales and the profit has improved in this fiscal year. Moving on to the third quarter progress. Blue line shows the actual for this year, and the last year's result is shown in red, and you can see it was up and down, but this year there was no extraordinary situation. As you can see in the top right, this year's forecast is expected to be achieved, and this is pre-GAAP sales as well as expenses trend. As I've explained earlier, pre-GAAP number. Business numbers. is impacted by the minus 7% of consumer business in terms of Trend. We are sharing this with investors because we are shifting to subscription business. Rather than the actual sales the ARR represents the situation of the company more accurately, so this is enterprise AI. Some of the details will be explained later. As you can see on this slide, dark blue is a subscription business and you can see the growth is very steady. On the other hand, perpetual license is decreasing in this fiscal quarter. This is minus 9%. Again this is driving the pre-GAAP sales growth. Next is cash flow compared to last year, -48%. The major factors include the factors in the red box, the payment of the income tax in the previous quarter. I explained this and there were some articles in the press as well. Now we have overseas dividends and the claim of the tax. There are some differences in our interpretation and discussion is ongoing. However, we did pay the tax and so this is temporary factor. So the cash flow for fiscal or rather fourth quarter should go back to normal. This is headcount down by 117 people. It's not intentional. The situation is basically the same as in the previous quarter. Reorganization is underway. We are breaking down the silos. Radial Web is what we are calling this new type of organization. And so this is the result of that reorganization and especially technical support. Support is where the reduction is the largest. Technical engineers are integrated with overseas support and some other functions so as to enhance efficiency. This is the trend of cost. There is no particular comment. Again, in the red box above, there is foreign exchange impact and also the increase in the stock price. Stock option-related cost therefore was impacted. These are the two factors for pushing up the cost. Otherwise, the cost has been as you can see here. This is the highlight. The Q3 operating profit was the highest-ever quarterly operating profit. As for subscription business, we continue the double-digit growth and operating margin improvement is continuing. Now let's look at the annual prospect in Q4. There will be large-scale deals to be negotiated so we believe Q4 will be as expected. Therefore, annual expectation is as we have given guidance on, and on the 20th this month we are going to have an IR Day, and it will be online, and therefore we encourage you to take part in that event as well. An email has been sent as invitation. If you have not received that invitation email, please let us know at the IR address that you see down below, ir@trendmicro.com, when you contact us. Of course we will send you an invitation. This is all from me. Thank you very much. Hi everyone, my name is Kevin Simzer and I'm the Chief Operating Officer for Trend Micro. I'm here to give you a Q3 2024 business performance update. If you've been following us at all, you will have seen a ton of activity of us in the market talking about AI. Whether it's us deepening our relationship with Nvidia, whether it's us with a big partnership that we have with Google around sovereign AI cloud, whether it's our own innovation where we've introduced some incredible technology around deepfake detection, a big topic in the market these days. We've made that available to both our enterprise and our consumer customers through our platform. Eva Chen keynoted at Black Hat and finally we announced that we hit this big milestone of over 10,000 enterprise customers, large enterprise customers, running on our Vision One platform. In that same press release, we also announced the fact that we are introducing our Vision One platform to small and medium businesses through MSP partners. A lot of activity in terms of our overall results and performance for the quarter. Really, the star of the show was around margin growth. So incredible work by the entire Trend team in terms of reworking our process and how we operate as a company and realizing a lot of the savings here. We're up at an operating margin of 24% now. Net sales were up 6%. So really feel like we're on track and doing a nice job. We prioritized the operating margin improvement quite high. Where the growth came from was in the enterprise business and specifically around Vision One. You can see that we're doing a great job of attaching Vision One to our installed base accounts and expanding within those customers, up 7% year over year. In consumer, it's exactly the way we laid it out at the start of the year where we're fixated on growing the revenue through ARPU expansion and increasing the overall profitability in the business, and the net sales result were up a very modest 1% globally. This number, this chart shows pre-GAAP numbers in a common currency. To give you an idea of how things performed globally, we did experience some weakness in our consumer business. Overall we made a strategic decision to stop discounting as much on our multi-year contracts with consumers, and that had a noticeable impact on our gross sales and our pre-GAAP numbers. We also experienced some slowdown in our small and medium business, so we didn't get the traction that we had expected, but as I announced earlier, we have a remedy for that. As we see more and more MSP partners having an appetite for our much more feature rich comprehensive cybersecurity platform, and we think that that's going to actually help propel the SMB business forward, and then in the enterprise business we saw some weakness in Europe in particular, so Europe there was a lot of deals that we had lined up in public sector, and like we saw in Q2, we saw the same dynamic in Q3 where those public sector transactions were harder to get across the finish line than in prior years. The experience that we've had. Recurring revenue has been the theme for a while. We're up at $1.6 billion, that's + 4%. And you can see here another view of what I just described. We're getting the growth in the overall enterprise business of +7% up to $1 billion in recurring revenue. Where we saw the weakness was in SMB and consumer, and in both those areas we feel like we've got a way forward in SMB. We're introducing Vision One, and in our consumer business we're doing a lot of stuff around anti-scam, and we feel like that's really going to help to lift off that top, top line performance. If we double click on enterprise. It is a story of a mix shift. We've been moving more and more of our business to subscription business. We love that annual annuity, and you can see that here where that movement continue. We're fixated on our 28,000 large enterprise customers and how we can land our Vision One platform and expand within it large enterprise. You can see here how focused we are at getting Vision One attached to those large enterprise customers. If we look at the recurring revenue by major solution category, we divide it up into these four categories and you can see that where the growth is coming from. We've been doing a really nice job of growing all things security operations center and also in attaching email to that. Our Vision One platform has an email capability module that's built in and can be easily turned on and we're really seeing some good liftoff there. Like I said, overall we're sitting at $1 billion and + 7% year- over-y ear. I really feel good about where we're at today and I feel like it's going to get better. In particular in the network segment. We just introduced some Network Detection and Response capability in our network security offering. And so Vision One now has Network Detection and Response. We also have a massive refresh cycle that we're about to embark on. About half of our appliances that we have deployed are ripe for refresh. So we're in a really good spot to try and leverage that opportunity. From a large enterprise platform perspective. We're fixated on number one sales motion is attach Vision One. You can see we're up to 37% of our customers are now attached. The second sales motion that we have is around module expansion. And you can see here why 46% of our customers today have one module. And you can see the retention rate. As we expand with more modules, our retention rate improves. So too does the ARR impact net to trend. And ultimately the most important thing is so too does the security of the customer themselves. We're doing a better job of stopping threat actors when they get a more comprehensive view of their overall enterprise. Here's three examples and you can see it. The first example is in the U.S. and all three of these examples are existing customers. This existing customer, we were helping them with protecting all of their servers in their physical data center plus their cloud infrastructure. They were really disappointed with the CrowdStrike issue that came up where they had the pattern failure and how long it took them to recover. They were upset with the fact that actually they had a small breach and that that breach came in on the endpoint and that that wasn't detected. So we ended up winning the endpoint business as well. So a really nice expansion for $936,000. The one in the middle is in our Asia Pacific, Middle East and Africa region. Another expansion, and this was an existing customer of ours. And in this particular case, the existing customer needed help from a security operations center standpoint. They needed help from a 7x24. They wanted some help from an incident response preparing standpoint. So they picked up our services package, our services module that we can attach to Vision One and then finally the last one in Europe, an existing customer were protecting both their servers and their endpoints and they wanted to get a more comprehensive view. They took an Attack Surface Risk Management view of the world. This is where the real power of all of our AI that we have is embedded, and we can get an incredible view, including predicting where potential threats could come from. They picked up our ASRM and our network capability as well as adding services, so three examples where customers expand it across the globe. From a consumer standpoint, growth was modest at 1%, but we continue to focus in on these alternate channels. The mobile channel revenue for us continues to grow at very healthy double digits, up 25% year over year. We saw that working on alternate devices. That's also a big thing for us as we expand beyond protecting just the endpoint, up 55%, and we're also doing a nice job of doing what we said, increasing the overall ARPU. The key takeaways. We feel like on the enterprise side we have exactly the platform that we need. We're not only recognized by our customers, which is the most important thing, we're recognized by industry analysts as having the market leading offering and really doing a nice job of landing it within our installed base and expanding. We're fixated on a balanced performance. Yes, driving operating margin improvements is really, really important for us, but also driving that sustainable growth engine on the top line. And we're working our way towards that as we get all the pieces in place. And then finally, as you've already seen this year, we're fixated on driving shareholder value, increasing those returns. We already executed on that this year. Thank you very much. Look forward to the questions that you might have. Hi, thank you. Thank you for your patience. I would like to give you the business update of Japan for the third quarter. We have Enterprise, SMB and then consumer. We have these different segments in Japan and already the two previous presenters spoke about a lot of this. As for the enterprise business in Japan, we have about 7,000 companies as targets and then for the SMB about 700,000 companies. So we are really focused on our targets in terms of our activities. So I would like to explain these three focus areas starting with enterprise business. Enterprise. With respect to ARR year growth of 9%, the growth rate is similar to that of the rest of the world. Especially, new sales was up 33% year on year, so this was growing very fast, very solid. Out of this, I know that Vision One was a little bit late to start in Japan. Compared to the rest of the world, the number is still a little bit smaller. Vision One sales is now 27% out of their new sales, which means that it is growing very nicely. Vision One customers' growth now, there are 7,000 companies, and we have many small ones in Japan. We only have 18.1% attach rate, which is slower than the rest of the world. But if you go to the very large enterprise segment, the attachment rate is higher than 50% and we are beginning to see some growth in smaller enterprises as well. The average spending is also increasing very steadily. Average spending per customer is definitely increasing because of the popularity or attachment of Vision One promoting the use of various services. Then I would like to move on to SMB. The number of SaaS endpoint customers is growing steadily and it's been growing steadily, especially through managed service partners. We are providing the new services called XDR services as an add on and so we are providing that to the existing customers. This started from around the end of last year and every quarter it has been showing progress and compared to Q2 we saw a growth of 33%. We're seeing a very rapid. Growth. For the SMBs. There are companies that seek a very high level security prevention or security measures, and also in the west and other companies, AI adopters and others are joining the group so to speak, and so there will be positive add-ons and the sales per company per customer is increasing, and also Kevin also touched on email in the SMB segment. When Microsoft email or other emails are used, threats can come through emails, and so phishing mail training service or email training service has been developed and we are actually providing this gateway product replacement with Vision One Email and Collaboration Security because this is easier to market and sell, and so that has been very positive. And finally for consumers in the domestic Japanese market beyond device security is of course being offered. Sales ratio has reached 27%. Especially the new product, Scam Call Block, was launched in August and it also addresses deepfake, and recently on a daily basis we have 500 new users, so on a daily basis we see increasing users. Of course this is a monthly charge and therefore it will not be reflected immediately. However, for sure there will be increase. And. We actually work with police agencies. We will collaborate with the database that the police agencies have in the different regions that they cover, and also so NTT Yellow Pages or phone books is another thing that we collaborate on so that scam calls can be blocked and it's not antivirus product but rather there are new problems that the consumers have in the security area. Therefore we're addressing that concern on the part of the consumers and for the corporate users, well, actually I did mention that we discontinued this early renewal discounts and as a result the unit price has gone up and maybe some of the customers were a little confused or perplexed and didn't renew the contracts. However, it's not that we lost our customers, but rather it is just a matter of time gap, so to speak. They will come back and as Mahendra mentioned earlier, so it's not that we lost our customers but rather the discontinuation of the discount and also unit price being higher may have actually confused users. But they will come back, they are still our customers. And Intel AMD AI enabled PCs have been released. And so now in the market we see AI enabled PCs and therefore software can cope with AI PCs and it is gradually increasing in the Japanese market as well. And for security awareness I mentioned the police agencies. There are 47 prefectures in Japan and we're collaborating with the respective police agencies of the different prefectures. And so we are engaged in the awareness campaign and also we serve as the Metropolitan Police Department Special Fraud Prevention Advisor in Tokyo. All employees are going through the advisor training so that everyone can become advisor in this area. It's not antivirus that we see as threats these days. Therefore, I mentioned local governments such as Niiza City, Saitama Prefecture, University, among others. What I'm trying to show here is the different kind of partnership than in the past that we are engaged in so that we can have awareness campaigns to let people know of these new types of concern. Thank you very much. This concludes my presentation. Thank you. Ueno from the securities. I have two simple questions. Page 25 of the presentation says that North America pre-GAAP after FX adjustment is down by 4% in terms of revenue. Is this because of large deals or as you try to drill down with your strategy, are you struggling to acquire customers or is it the stopping or slowing down because of a price hike? What is the factor behind this - 4% on pre-GAAP on page 25? That's my first question. Kevin maybe. Kevin. Yeah, I'll take that one. This is Kevin Simzer. Generally speaking, and Mahendra mentioned this. We much prefer. It makes a lot more sense for us to think of us as an ARR company. I think those numbers are much more reflective of where things are going. And the reason why I say that is the pre-GAAP numbers are moving around quite a bit as we go through this transformation and we get the different pieces in place. We had a massive, massive positive quarter + 40% growth in Q1 of this year in that region. And so it's been rather lumpy. We feel like we will land with double digit growth in that region by the time we finish the year. And it's just dynamics of how the deals are falling. I hope that makes sense. Perspective. I understand. Now, Omikawa-san, you explained that you stopped the discount and there is maybe fencing in terms of a contract renewal with your customers. So discount, how much was the discount that was removed? I'm sorry I didn't explain it enough. So for early renewal or maybe six months in advance, we do give discount and it's not a dynamic discount. I just remove that system. So it's just two to three months. It's not a big impact. So it is not the price cut. You're talking about early renewal. Yes, we were asking people to renew six months in advance for discount and we were expecting them to renew at the same time as usual, but they didn't in Q3. But once the actual renewal time comes, they are renewing even without the discount. Oh, I see, I understand. So on an annual basis without the discount, this means that. It doesn't mean that the price is really going up. You're just talking about the six-month marketing impact. Yes, that's correct. So retention of the customer is still the same. So we are going back to the traditional Q1, Q2 kind of flow. I understand. Thank you very much. I would like to add some explanation. Single-year version renewal, we want to reduce that. In other words, in terms of absolute amount, three-year version and the price increase version and the value added that will build up to a certain sizable number. And the one-year version being renewed every year. Well, as Kevin said and I said, ARR is important. If it's three years, then on a prior basis it will go up. But if it's renewed on an annualized basis, it's easier for the customers to buy. And also the high renewal rate can be maintained and that will make the overall sales more healthy. So. Going forward maybe we will move to monthly payment which might be even more desirable. That's very clear. Thank you very much. Thank you. Thank you very much. I would like to unmute the next person to ask a question. I could just add. I just wanted to add one other thing around the pre-GAAP question if I could. Yeah, go ahead. Okay. I mentioned that the pre-GAAP numbers are moving around, and I thought maybe I could give you an example which would help with that. Both Mahendra and I talked about it in our presentation, and that is we're in this mode by design where we're moving more and more of our business from those perpetual licenses to subscription licenses. That has a really big impact up and down on the pre-GAAP numbers. That's why. That's another example. That's an example and one of the reasons why we're really trying to be so focused in on our ARR numbers because that perpetual to subscription mix change that's going on, it causes a really big impact on those pre-GAAP numbers. I'll leave it at that. Thank you. Thank you very much for that. I'd like to invite the next person to ask the question. Yes. From Morgan Stanley MUFG. Can you hear me? Yes, thank you. Kevin added some comments. But for APAC, the pre-GAAP growth of APAC is less, I think diminishing and this time was + 6% if I understand correctly. I thought APAC was an area where you had a lot of momentum. However, how do you see the current status and the prospect going forward? Please? Yeah, so the Asia Pacific, Mediterranean, Middle East and Africa region, that entire region, you are right. It has been a really big growth region for us over the last seven or eight years. We've been consistently driving double digit growth and we see that continuing. It's a very, very strong. We have in most countries either the number one or number two market share and we see that continuing in particular in Southeast Asia. We see lots of opportunity still and in the Middle East where that has been massive growth for us. So that will continue. And again this is another example where the pre-GAAP numbers don't necessarily reflect the reality. We've got a lot of movement happening with those perpetual licenses. Our perpetual licenses. Actually the amount of total perpetual licenses that we did in Q3 was down 11%. We're driving a lot of subscription revenue now and that has a big impact on those Pre-GAAP numbers. We don't disclose gross sales but the gross sales numbers have been double digits in that region for many years. Thank you very much. I have one more question related to something that you touched on. It's to active customer accounts, subscription and perpetual in Q3 or at the end of Q3, if you can share with us the actual numbers. I would appreciate that. Let me comment on this. This slide has been disclosed since Q2. We don't disclose it for Q3 because total. Well, actually about 500,000 is included and as Kevin's material referred to subscription business, about 30,000 I think. And so that business is growing and the total number is it only 500,000 or 400,000-490,000 you might ask. We don't really see that as an important question. I just don't want you to misunderstand. That's why we didn't include that in the material. About 30,000 customers. Maybe Kevin can answer that question. About. Sorry, what was the question on the 30,000? No, my point was that his question was that the total number of customer count we have not disclosed this time, and my point was that the total number of customers, the 500,000 or so, was not very material. We don't look at it, and we are looking at the 30,000 or the 28,000 we refer to, and so if you want to have some color on what's going on there, I already explained that 500,000 we don't look at and that's why we removed that slide, but we can comment on it, so we break our enterprise business down into two parts. One is small enterprise, which are companies with 500 seats and below. The other is large enterprise, which are 500 seats and above, so that's how we think of the world. The majority, two thirds, of the business comes from the large enterprise. That's the 28,000 large enterprise customers that we have. That is the one that we are the most fixated on right now. That's what's driving the growth. We are attaching Vision One, our market leading platform, and we are expanding with additional modules in those 28,000 enterprise customers. You're going to start to see us actually expand into even more new logos as we go into 2020. But for right now we've been very fixated on the 28,000 enterprise customers in the small enterprise. The bigger number of customers but the smaller dollar value, the bigger number of customers. That is very, very through a channel and in particular it's a managed services channel. And we're super excited because on October 14th we just introduced our market-leading Vision One platform to those SMB partners and we feel that's actually going to enable those MSP partners to help grow their revenue. We will also be able to recruit more new partners which will recruit more customers. So that's our strategy around our two. Different. Segments within the enterprise, large and small enterprise. That answered the question, Tanaka-san. Yes, thank you very much. Let me add one more thing if I may add. I think it's not just Mr. Tanaka but others might have wondered why it is no longer disclosed. You might wonder that something is not disclosed because it's inconvenient on the part of the company. Well, maybe that was the background for the question initially, but as was explained in the past, the subscription number or the perpetual license customer number, the total number of customers at one time it served as an important KPI benchmark. That those days are over. Large enterprises, approximately 30,000. We are really focusing now on increasing of the ARPU with these major large enterprises and therefore the continuation of the disclosure of that total number of customers may be even misleading. That's why we discontinued showing that and we actually kept that disclosed for about half a year because we didn't want to cause any unnecessary confusion. However, we have further discussion and we were able to see that without disclosing this we wouldn't have misunderstanding so we discontinued disclosing that. And Large Enterprise ARR is what we are really focusing on and it's more of a key indicator. And so the total number of customers is no longer the key numbers that matches what we are prioritizing and focusing on. So that's why we decided that from this quarter we will not disclose that number of the customers in total. I hope you understand. I just wanted to give you the back end story. Okay, thank you very much. This is not a question but. Large. Enterprise 28,000 companies that you're focusing on. I understand that part but those other parts that you're not really focusing on, the subscription accounts for example, that phenomena of declining there, is it related to lack of satisfaction on the part of the existing customers? I was just simply wondering if that would be the reason for this decline. But thank you very much for answering my question. Thank you. Moving on to the next question. I will unmute the next person. Please wait for a moment. Yes, we can. I have a question. First half pre-GAAP and deferred revenue. I see some negative numbers of declines. I understand that you're shifting to ARR and business mix is changing and this is probably expressive of that. But looking at the second half, do you think the trend will be similar to the negative growth in the United States and European APAC also not growing as much as it used to like double digit and also deferred revenue by region will continue to stay in the negative growth territory. Is that the correct expectation? I want to understand what will happen in the fourth quarter and the second half and I'm wondering if this trend will continue into the first half of the next fiscal year as well. Vision One ARR I know you are shifting but how do we interpret that and adjustment period may continue for 2/4 consecutively or maybe 3/4 consecutively. We cannot really tell that. From the information that you have disclosed, it looks like the business is actually shrinking or decelerating. If we just look at the pre-GAAP and deferred revenue, it is actually difficult for us to read what is going on just looking at the ARR data. So we don't have enough information to be able to read the story. Can you please explain whether this trend will continue into the fourth quarter and also the first half of next fiscal year? Thank you. Kevin, you want to comment on that? I'll definitely take the pre-GAAP. Mahendra, maybe you can comment on that. Yeah, yeah, that's a great question. And the short answer is no, we did not envision Q4 being the same as Q3. I think like we were trying to explain, maybe we didn't do a good job but we've been going through a transformation process internally and that's involved a lot of different functions inside Trend. We really were fixated on getting our operating expenses in line and we feel like we've done a fantastic job, quite a nice job of actually doing that. We know we have the platform in place. We know we're getting recognition from industry analysts and from our customers that it's market leading. So we feel like we have everything in place that we need. From what we can tell based on the pipeline that we have, Q4 pre-GAAP. It's why we feel confident in our guidance, the pre-GAAP numbers will recover. We will see some very good improvement. We'll see improvement in Europe where we have a lot of business lined up. EMEA will continue to be strong and there's a lot of opportunity that we have in America. So we feel really good about where we're at and that the pre-GAAP numbers will in fact allow us to hit the guidance that we have out there. Is that okay? Yes, thank you. And in addition, balance of deferred revenue. One of the reasons why this is going down is accounting process. So anything exceeding one year, AR and deferred revenue are offset against each other. Do you have anything to add? I'm sure that Sato-san understands already, but just to make sure, I would like to explain once again what I have just said before. Accounts receivable, there is a big impact of FX as well. So on page 27 of the presentation, you can see that there is a big decline of deferred revenue. But. 13 billion or more is coming from the FX rate difference between beginning and closing of the term. So it looks like it's going down. But even accounting for that still the number is smaller. I think that is a question Sato-san, if that is a question, the explanation given is well, looking at constant exchange rates still I think the decline is quite apparent. Pre-GAAP number is negative so deferred revenue ends up being negative as a result and this combination until the switch over completes internally, I was wondering if this trend will continue in the fourth quarter. That was my question. Yes. And based on that there are a couple of things I would like to say. This is Q- on- Q not Y- on- Y. So Q- on- Q volume decline but Pre-GAAP is increasing. Sometimes this happens. So we need to account for seasonality as well, and unless there is a major event, this is not a major factor. So that's one thing. Another thing is more practical, and as was explained during today's earnings call, discount was applied to multi-year contract, and we are now trying to change them into single-year contracts as much as possible, which will bring down the pre-GAAP number and of course the amount posted for deferred revenue. This more as well. So three-year contract converting into single-year contract. As we continue to see this shift, then we will see smaller additions to deferred revenue. So deferred revenue is down, sales is down, pre-GAAP is down. If everything's down, then your concern will be justified. But revenue is increasing. ARR is still increasing. So that just means that the contract shifting from three years to single-year. Oh, I see, I see. So three-year contract to single-year contract. This switch is happening especially in Japan. It's not limited to Japan. So it had a generally big impact. Yes. So although they don't want to stop the contract, they want to change into single contract so that they can minimize the expenditure one of expenditure just to confirm. So three-year contract at the time of renewal. Do you think this trend of shift it will continue for about 12 months? Shift from a three-year to single-year contract, will this continue for about one year? Because in public sector in Japan I understand there are many customers on three-year contract. So in the month of March, let's say there's a lot of renewals and a lot of them will be shifting from three-year to single-year and all of those shifts are concentrated in March. Then your third quarter numbers will look weaker. Will that be a correct understanding? Public sector is unique in that way. In private sector there is no such restriction for pre-GAAP. The numbers may look worse with a single year but the revenue itself will go up instead. So I think you need to look at both numbers to make the judgment. I understand. Thank you. That's all from me. Thank you very much. I will unmute the person asking the question. Next. Securities, I have two questions. We already had some discussion about pre-GAAP now. So considering what you have just explained, you're in a transition, you are restructuring. The marketing strategies are different and perpetual licensing, well it's going to be shifted more to the subscription customers. You're focusing more on the larger enterprises because they would push up the ARPU. So I think it's been going on for about one year now. So I think things will turn out to be better. So the steady state after the improvement is made is what I'm trying to understand. The current ARR I think 7% plus for the large enterprise customers and SMEs 1% consumer 1% on a dollar basis I think the total is maybe 4% increase now. So on a dollar basis 4% increase in the revenue is something that we should be expecting. Pre-GAAP, of course, will fluctuate and deferred revenue. It's not so clear what it really shows. But ARR is what you think will be useful in the forecasting sales. So 4% is correct expectation and also so U.S. ARR when you look at it doesn't seem to be increasing much. 4% or for a large enterprise is 7%. But on a per region basis how do they look like? Maybe you don't disclose that. Maybe the numbers are not that mature yet. I think you said something to the effect in the past, but it's about time that you give us some hint as to the region specifically numbers of ARR. So that's my first question. One of the things that we didn't want to confuse things on this call, at least I didn't want to. One of the things that you will see us start to do more and more is separate the two businesses. Our consumer business and our enterprise business. Now what you see in our presentations is that we disclose the four regions that we have and it includes both the consumer and the enterprise business in each one of those regions. As of the IR conference that Mahendra announced, we will be making a more clearer separation between those two businesses so that you can get a lot more visibility into the performance of each on its own. So you will start to see that as of the IR conference next week. So you'll see that will be coming. Like I said, in terms of your question around the, I think it was specifically around the Americas. We do feel confident that we're going to finish with double digits in the Americas for the year. It has not worked out every quarter but in Q1 we were plus 40% in the U.S. so it was very, very strong in Q1 and then a little softer in Q2 and Q3. But we feel like there's a strong performance that we're going to see in Q4. So you will see the double digit growth for the year. Okay, so ARR 4% so the number in the positive is expected to grow at least for the U.S. Well, consumer business is large in the Japanese market. So when you think about the growth rate in Japan, it might be less. But this 4%, if it were the overall percentage growth, then you expect growth and growth rate will go and especially U.S. will improve. Is that the right expectation that we should have? Yeah, from an ARR perspective, you know, we laid out our Road to 2027 and in that Road to 2027, we said that we're targeting 8%-10% net sales growth. That's what we're moving our way. That's what we're transforming our way towards. And 2025 will be an improvement over 2024. We're moving our way towards that consistent, repeatable, subscription based, very predictable ARR growth in the 8%-10% range. That's what we're moving towards. All right, thank you very much. Sorry to go into the details that Mr. Omikawa talked about. Japanese ARR eight or nine I think. Think you mentioned that's Japanese yen basis or US dollar basis? No, it is of course yen basis. Enterprise was discussed on the Japanese yen basis. Okay. Enterprise you said was eight. Was it? Was it not nine? Nine, yes. Including consumers. Maybe not. Yeah, we're looking at them separately. Okay, I understand. I have a second question. Top line. It's a little concerning worry. Some, a little bit. But on the other hand you have profit, a lot of profit. You have reduced cost. That's one reason I believe. But cost management going forward, expense control. One year ago you said that it will be rather flat. But maybe the revenue or rather the next sales is getting a little sluggish. But sales will grow and then costs will be diminished. And then if that's the case on a quarter basis, maybe a profit of JPY 15 billion is what you can expect. Or maybe JPY 16 billion excluding the stock option related costs is what you can expect. But if it's not a one-time thing and you reduce the cost, maybe you can expect op of more than JPY 16 billion going forward. It's what you can expect. And OP guidance was about JPY 50 billion plus. That is so JPY 15 billion-JPY 60 billion per quarter average. If it's bigger, then it should be above JPY 60 billion but approaching JPY 70 billion. Next year next term. Can we think like that cost operation again? You will continue with this trend of suppressing cost and putting more emphasis on profit, is that correct? Point. There's one caution I would like to mention for us. Fluctuation of the stock price is one thing, but also there are things that are linked to sales. In the second and the fourth quarter there are certain things that are affected. So fourth quarter and operating profits relates to the bonus payments. I cannot really say anything about that yet. But sales and operating profit will, you know, it's not that the performance being low, it would be impacted negatively. No. So I think the rest can be discussed by Kevin about sales. Yeah, I was trying to pick up on the question and I wasn't sure if it was about Q4 or if you were trying to ask about 2025. And I think Mahendra was summing up Q4 where seasonally, it's a very big top line quarter for us seasonally. And it also means that we pick up some additional operating expenses around sales, sales related expenses. But we feel like the operating margin of 20% for the end of the year, that's what we set out and targeted and that's what we will deliver on. We laid out in our road to 2027 still more operating margin improvement. So that will be our plan for 2025 to continue to improve our overall effectiveness as we go at the market. So we will improve our overall operating margin going into 2025. We will reveal that in Q1 when we release our annual results for 2024. We'll give guidance for that. Okay. Given the actual capability that you have, the Q3 margin is based on your true capabilities. So profit of JPY 15 billion or JPY 16 billion rather is realized on a quarter basis. So OP for next year's quarter can be larger. I'm talking about next year. Of course we are going to make the announcement in February next year. So as Kevin mentioned, we have this roadmap to 2027. We believe that we're on track towards that and of course operating profit margin improvement is something that we will continue next year. Okay, thank you very much.