Greetings, and welcome to the Fair Isaac Corporation quarterly earnings call. During a presentation, all participants will be made listen-only mode. Now, [audio distortion], we'll conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star zero. Conference is being recorded on Thursday, January 28th, 2021. And now I'd like to turn the conference over to Steve Weber. Please go ahead. Thank you. Good afternoon, and thank you for joining FICO's first quarter earnings call. I'm Steve Weber, Vice President of Investor Relations, and I'm joined today by our CEO, Will Lansing, and our CFO, Mike McLaughlin. Today, we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison to the prior quarter in order to facilitate understanding of the run rate of our business. Certain statements made in this presentation may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many uncertainties, including the impact of COVID-19 on macroeconomic conditions and the company's business, operations, and personnel that could cause actual results to differ materially. Information concerning these uncertainties is contained in the company's filings with the SEC, in particular in the risk factors and forward-looking statements portions of such filings. Copies are available from the SEC, from the FICO website, or from our investor relations team. This call will also include statements regarding certain non-GAAP financial measures. Please refer to the company's earnings release and Regulation G schedule issued today for a reconciliation of each of these non-GAAP financial measures to the most comparable GAAP measure. The earnings release and Regulation G schedule are available on the investor relations page of the company's website at fico.com or on the SEC's website at sec.gov. A replay of this webcast will be available through January 28th, 2022. Now I'll turn the call over to Will Lansing. Thanks, Steve, and thank you everyone for joining our first quarter earnings call. As we continue to deal with the effects of the pandemic, we remain focused on the health and safety of our employees. We're still primarily working from home, and most of our offices remain closed. I'm grateful to our dedicated employees who every day show their commitment to FICO and to our customers. On the investor relations section of our website, we've posted some slides that offer financial highlights of our first quarter. I'm pleased to say we started 2021 well as we continue to make progress on our strategic initiatives. We have reported revenues of $312 million, an increase of 5% over the same period last year. We're pleased with that result because we knew we would have headwinds on the software side as we transition toward more ratable recognition of our subscription software license revenues. Our first fiscal quarter is typically our slowest software new business quarter. We delivered $86 million of GAAP net income and GAAP earnings of $2.90 per share, up 57% and 59%, respectively. On a non-GAAP basis, net income was $82 million, up 51%, and earnings per share of $2.74 was up 52% from last year as we reap the benefits of the cost reductions we put in place last year. As we discussed last quarter, some of those savings will be reinvested as we identify opportunities and hire additional individuals in key strategic areas. We continue to deliver free cash flow growth as well. Q1 free cash flow was $75 million, up 39% from last year. I am encouraged by the progress we're making across the business. The decisioning market continues to grow, and we are well- positioned to serve it. In fact, in December, Forrester issued a digital decisioning platform report and named FICO as a leader in the space. The FICO Decision Management Platform was recognized for providing all the tools necessary to manage and deploy digital decisions, which will stand up to the highest standard of regulatory rigor. We've been helping financial institutions make lending decisions for decades. We now bring that same level of automated analytic decisioning to the broader market to help businesses respond quickly to customers' needs and anticipate their future demands. As we migrate more of our business toward a subscription-based model, including SaaS software subscriptions and term license subscriptions for on-prem software, we will see less upfront license revenue than we would have in the past, as the revenue is spread over the term of the deal. Last quarter, we talked about how we would recognize less revenue up front for our on-premise licenses. That change pushed about $9 million of revenue this quarter out to future quarters. This doesn't affect cash flows or total revenues recognized. It does delay the timing of revenues, and over time, will smooth the lumpiness we've historically seen. This change is in line with industry standards. We believe it will provide a more representative, transparent view of the growth trajectory of our business. In our application segment, we delivered $135 million of revenue, down 11% from last year. This was due to a decline in upfront license revenues and, to a lesser extent, professional services revenues. The license revenue was negatively affected by a smaller amount of term licenses up front for renewal in the quarter and the revenue recognition change I mentioned earlier. In our Decision Management segment, we delivered $32 million of revenue, up 4%, despite many of the same issues we described in our application segment. While our license revenue declined versus the previous year, transactional revenues in DMS were up 36%, providing a steady, predictable, recurring revenue stream that we believe will continue to grow. We've had a lot of interest in our decisioning platform, and we've sold a number of large deals in the past few quarters. We're working hard to install and get those customers live so we can begin seeing the impacts from those recurring revenues. As I've often said, we're committed to becoming the preeminent platform player in decisioning analytics. This is the strategic focus of our software business. Like I said last quarter, that may mean exiting non-strategic products or services or not signing or renewing low-margin services like project work. Last fall, we sold our FICO Enterprise Security Score business because although we believe in the effectiveness and value of the product, it is off strategy, and we need to remain incredibly focused to maximize the opportunity that's in front of us. In December, we entered into a joint venture with a long-standing partner in China that distributes FICO Scores, and the joint venture will now distribute all software solutions for the China market. Moving forward, this will allow us to serve that market with less infrastructure and therefore better margins. Both this and the ESS deal will have a small near-term negative impact on top-line revenues, but will help our overall margins and again allow us to focus on our overarching strategy. We expect more adjustments to be made to our software business as we make the necessary decisions to pursue our strategic initiatives. On the score side, the business continues to perform very well. Scores were up 26% in the quarter versus the prior year. On the B2B side, revenues were up 20%. There was continued strength in mortgage originations volumes, although normal seasonality meant it wasn't quite as strong as our fourth quarter. Auto originations were relatively flat versus the previous year. We're starting to see signs of cards and other unsecured loans beginning to bounce back as both prescreen and origination activities picked up in that space. As we discussed last quarter, we did institute some price increases across various volume tiers. Those price increases start to feather in during our second quarter, and we can talk more about those impacts when we release the results of our March quarter. On the consumer side, we continue to drive growth. Our B2C revenues were up 40% versus same quarter last year. The growth at myFICO.com is even more impressive, up 69% this quarter versus last year. The recent results of our myFICO business, as well as our partners Experian, demonstrate that savvy consumers want the FICO Score, the scores that lenders use. Finally, as you know, we haven't provided guidance since the middle of our last fiscal year. We're still operating in a marketplace and economy with a great deal of uncertainty and volatility. While our business has been remarkably resilient over the past year, it's still difficult to quantify what macro trends will impact our volumes. While we're confident in our prospects this year, we still believe that there's a wide range of possible outcomes depending on the timing of vaccine rollout and the opening back up of the global economy. As we move through the year, we'll provide more color when we believe it's prudent. I'll have some final comments in a few minutes. First, let me turn the call over to Mike for further financial details. Thanks, Will. Good afternoon, everyone. Today, I'll walk you through our first quarter results in more detail and briefly discuss the impact we're seeing from the restructuring and impairment charges we took in the fall and the revenue recognition assumptions we talked about last quarter. Revenue for the quarter was $312 million, an increase of 5% over the prior year. Our applications revenues were $135 million, down 11% versus the same period last year. This quarterly decrease in revenue was primarily driven by decreased term license revenues. In our decision management software segment, Q1 revenues were $32 million, up 4% over the same period last year. Revenue increase was due to increased SaaS subscription revenue, partially offset by lower license revenues. As Will mentioned, our license revenues are down as we transition to a more ratable subscription revenue model. Last quarter, we explained how we will be recognizing less of our on-premise software deals as upfront license revenue and recognizing more revenue ratably over the term of the deal. In addition to this change, we are also selling more SaaS deals, which further reduces the upfront revenues. Finally, we are also de-emphasizing low-margin, non-strategic professional services engagement, which will likely have a negative near-term impact on professional services bookings and revenues. This is driven by our core strategic goal of selling more high-value recurring revenue software. Turning to our Score segment, revenues were $145 million, up 26% from the same period last year. B2B revenues were up 20% over the same period last year, driven by high volumes in Mortgage originations as well as some unit price increases across our different score categories. B2C revenues were up 40% from the same period last year. Both myFICO.com and B2C partner revenues grew significantly. Scores revenue was down 5% sequentially from Q4, but as a reminder, last quarter had a material one-time royalty true-up that increased reported revenue. This quarter, 80% of total revenues were derived from our Americas region, our EMEA region generated 14%, and the remaining 6% was from Asia Pacific. Recurring revenues derived from transactional and maintenance sources for the quarter represented 81% of total revenues. Consulting and implementation services revenues were 13% of total revenues, and license revenues were 6% of total revenues. SaaS software revenues, not including related professional services revenues, were $60 million for the quarter, up 4% from the previous year. Q1 bookings totaled $68 million, down 39% from the previous year. Those bookings generated $9 million of current period revenues, a 13% yield. SaaS bookings were $20 million for the quarter, down 45% from the previous year. Professional services bookings of $16 million were down 61% from last year. Our fiscal first quarter bookings are generally lower each year, particularly after a strong quarter like we delivered last quarter, and our quarterly bookings can be quite volatile from quarter- to- quarter. We feel good about the bookings outlook for the rest of the fiscal year, despite the relatively light bookings in Q1. It is important to note that we do expect bookings to trend lower overall as a result of our de-emphasis of professional services sale and the somewhat shorter term length of typical SaaS contracts. As we discussed last quarter, we have shifted the sales of our on-premise software away from the sale of separate license and maintenance components to subscriptions that include both the rights to use the software and ongoing maintenance. This quarter, we adjusted our revenue recognition to be consistent with this change and industry standards for software subscription sales. This change results in less upfront revenue recognized in the quarter we signed the subscription contract and more revenue from that contract recognized ratably during the term of the subscription. This quarter, the impact of this change was an in-quarter reduction of revenue of approximately $9 million. Those are revenues that would've been claimed this quarter under the old sales model and will now be recognized over the term of the contract. As a reminder, this will not have an impact on our quarterly cash flows or the total revenue recognized from software license sales over the term of each subscription contract. Our operating expenses totaled $218 million this quarter, compared to $289 million in the prior quarter. The current quarter included a $7 million gain on sale of product line assets, and the prior quarter included $42 million of restructuring and impairment charges. Excluding those one-time charges, expenses were down $22 million due to decreased commission expenses associated with lower revenue, reduced incentive expenses, and cost savings resulting from the restructuring actions we took last September. Compared to Q1 2020, operating expenses before one-time events were down $14 million due to decreased marketing expenses resulting from a large customer event held in Q1 2020, lower travel and entertainment expense, and cost savings resulting from our Q4 2020 restructuring. We do expect expenses to step up somewhat in the coming quarters, as we gradually redeploy the restructuring savings to add strategic headcount, primarily related to the development of our Decision Management Platform software. Our non-GAAP operating margin, as shown on our Reg G schedule, was 36% for the quarter, a margin expansion of 900 basis points from the same period last year. GAAP net income this quarter was $86 million, up 57% from the prior year quarter, and included a gain of about $7 million from the sale of our ESS technology and our JV agreement in China. Our non-GAAP net income was $82 million for the quarter, up 51% from the same quarter last year. The effective tax rate for the quarter was 2%, including $19 million of reduced tax expense from excess tax benefits. We expect our FY 2021 recurring tax rate to be approximately 26%-27%. We expect the net effective tax rate for the year to be about 19%. Free cash flow for the quarter was $75 million compared to $54 million in the same period last year, an increase of 39%. For the trailing four quarters, free cash flow was $364 million. Turning to the balance sheet, at the end of the quarter, we had $145 million in cash, down $13 million from last quarter. Our total debt now stands at $881 million, with a weighted average interest rate of 4.2%. Finally, return of capital. We bought back 101,000 shares in the fourth quarter at an average price of $494 per share. At the end of December, we had about $175 million remaining on the board of purchase authorization and continue to view share repurchases as an attractive use of cash. With that, I'll turn it back over to Will for his closing thoughts. Thanks, Mike. As I said in my opening remarks, we remain focused on building out our platform and taking it to an ever-expanding marketplace. We will continue to invest at levels we think are appropriate to make the most of our incredible opportunity. Of course, we'll continue to innovate and make the most of our incredible FICO Scores asset. I'll now turn the call over to Steve for Q&A. Thanks, Will. This concludes our prepared remarks. We're now ready to take your questions. Operator, please open the lines. Thank you. If you'd like to register for a question, please press the one followed by the four on your telephone, and you will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by three. Once again, that's one-four to register for a question. One brief moment for the first question. Our first question is from Surinder Thind from Jefferies. Please go ahead. Your line is open. Good afternoon, gentlemen. My first question is actually on the Scores business. If we were to look at the B2C revenues, if my math is correct, they were roughly flat quarter-over-quarter. Can you provide a little bit of color there? If we look back over the past few quarters, there had been a significant acceleration each quarter in the revenues, and I thought that was a bit of a subscription-based business. If you can just help me understand the, what appears to be a sudden slowdown in new signings, or if there's an offset where there are new signings offset by certain individuals just canceling subscriptions. I'm not sure I follow the question. For your B2B revenues, if my math is correct, they were unchanged quarter-over-quarter. Can you provide a little bit of color? Because if we look at the previous quarters, there was significant acceleration each quarter on a sequential basis, and that didn't appear to occur this quarter. That's right. It didn't occur this quarter. Mike, go ahead. I can jump in with some specifics. B2C revenues were up quarter-over-quarter, but not a lot. Call it $1 million. If you look back to Q4 to Q1 a year ago, it was kind of the same factor. There is some seasonality Q4 to Q1, and the year-over-year compare continues to be very strong. You're right, the quarter-over-quarter additions just were not as large as they were in the last two quarters, particularly. It's worth adding that there was a settlement in the prior quarter. I understood on the B2B part, understood. Maybe as my follow-up question on the software side of the business, it seems like there's a change in strategy to maybe focus more on the sales of SaaS products versus on-premise. Is that a little bit of a change from our previous discussions or the way, because I thought the margins in the two businesses were relatively the same, and that the thought was is that from a planned perspective, that it was going to be a significant amount of time before the transition in your business occurred in that. Are you guys looking to accelerate that? From a strategy standpoint, we don't emphasize the one business over the other. We really try to do what's appropriate for the customer. You know, while we love the characteristics of SaaS business, where appropriate, we will absolutely do license on-prem deals. We don't really favor one over the other. Okay. Thank you. We have a question from Manav Patnaik with Barclays. Please go ahead. Your line's open. Good afternoon. Good evening, I guess. Just on the software piece, firstly, you know, the, the fraud licenses, I guess the decline there, it sounds like most of that is because you're not renewing lower margin services. I was just hoping to get an example of what that is, 'cause I would imagine anything in fraud is probably valuable and, you know, worth sticking with. Maybe you can just help us how that decision works. Mike, you have a view on that? Yeah, sure. And- Yeah, Manav. If you look at the license itself, you know, as we said, I'm gonna not just address fraud here because it's probably, you know, a bigger question, is that we're down about $15 million year-over-year from license sales. As we said, about $9 million of that was purely related to the revenue recognition sale. It was also a quarter where we had less license renewals available to renew. You followed us long enough, you know that that can be very lumpy. You know, in Q3 we had another low quarter of last year, but Q2 was high. It just goes up and down, we can only renew that which is available. It was a low renewal quarter, not that we missed renewals or people didn't renew, there just didn't many that came up for renewal. The rest of it is just normal volatility, and Q1 is particularly volatile because it's typically our smallest quarter. It, you know, can have the highest standard deviation. The services per se wouldn't hit that fraud, you know, license line. It wouldn't hit the total fraud business. You know, an example of a services engagement that we would de-emphasize would be some managed services that we perform for some of our customers, where we're helping them run the application on an ongoing basis. You know, it's. We do it well, it's a good service, but it's not strategic, and so we're not emphasizing that. We're also engineering our products to be less professional services intensive when they are installed so that we can reduce the total dollars that our customers need to spend to install the product. You know, those are two examples of how and why professional services are, we expect are going to be trending downward over time. Got it. You know, Will, your comments around, you know, early signs of card marketing, prospecting, et cetera, picking up, I was hoping you could elaborate a little bit there on, you know, which particular areas perhaps and, you know, how we should I guess, that probably just ties to the reopening. Just curious what you were seeing there? Well, I think it is just that. I mean, we, you know, what we're seeing is the decline from a year earlier is not as great as it was. You know, while we clearly have a long way to go to kind of recover former volumes, the trend is in the right direction. We're seeing early signs of life. Got it. Just one last one for me. myfico.com, I mean, I think I understand, you know, why that's doing so well because of the market macro out there. Are you guys doing anything really differently in that business to push that growth to, I think you said it was 69% this quarter? Yes. You know, are we set up for a big fall basically somewhere down the road? Hard to say. I would say that it's a combination of us doing things differently because we're always trying to do things that run the business better. We've got a crack team there that is constantly experimenting and innovating, to, you know, to improve the business. That said, obviously, we're benefiting from the fact that, you know, we have so many consumers who are increasingly focused on their scores. Their FICO credit score, and they come to myFICO. We're an obvious place to come. We don't promote it nearly as much as partners like Experian, but consumers find us, and we do some of our own marketing ourselves. I'd say it's both things. It's, you know, we are benefiting from the environment we're in, where consumers are more focused than ever, and I don't know how long that lasts. I think it could last a long time, but we don't know. We're also benefiting from excellent execution from the team. All right. Thank you. We have a question from Kyle Peterson from Needham. Please go ahead, your line's open. Hey, good afternoon, guys. Thanks for taking the question. Just wanted to touch a little bit on, you know, the expense and margin trajectory. Appreciate, you know, some of the color you guys mentioned on kind of reinvesting some of that as we go here. I mean, is it fair to think that, you know, some of the labor costs and savings you guys had this quarter will eventually be redeployed, and maybe some of the savings on facilities are kind of more permanent? You know, how should we think about, you know, the cadence and the level of this reinvestment? Maybe I'll just take a quick stab at that. Mike, you can give your view. Some of those labor savings will absolutely be redeployed into areas that are more strategic. We're, you know, we have a very healthy investment in our FICO Decision Management Platform. Some of the savings will be redeployed there. I think that on the facilities and some of the travel reduction expenses that, you know, that are COVID- related, some of that's gonna persist. I think some of that becomes permanent. Obviously, travel, some amount of travel will resume, but I think we've all learned how to do business with less travel than we had before. I mean, I'm sure our experience is not unique. We've become a Zoom Video company. I mean, we had it before COVID outbreak, now it's a way of doing business. I would think that even when everything comes back, we won't see our travel expense, you know, at the same kind of levels. I'd add to that, Kyle, that we also, when everything comes back, won't see our real estate and facilities expense go back to the same level. Those restructuring actions and footprint reductions are, you know, you can consider them to be permanent. On the labor side, yes, we are redeploying, as we've talked about, some of the savings back into, particularly, engineering talent for our platform products. And we're not guiding particularly exactly how that's gonna move. We did say last quarter, and I continue to feel comfortable with. If you look at the full fiscal year, we expect our operating expenses to be, you know, flat to up a little bit, call it low single-digit percentages. We are still comfortable with that, with that directionally. Got it. That's helpful. I guess just a little bit, I had a follow-up on the gross margins. Seems like you guys are, you know, kind of strategically exiting some lower margin businesses, especially on the services side. I mean, should that lead to, you know, maybe a slight upward bias to gross margins over time? I realize, yes, some of that'll be kind of mix- driven between Scores and software, but all else equal, just wanna get any color that you guys could provide on, you know, the gross margin impact on de-emphasizing services in some of these other businesses. I don't think we have a lot of color. Go ahead, Mike. I was just gonna say your math, your math directionally is right. All else equal, if we deliver less professional services, it's gonna have a positive impact on gross margin, no question. You know, the mix matters for sure. You know, our professional services margins, gross margins are in line with what you would see at other well-run enterprise software companies that have in-house professional services, and those margins are a lot lower than what typical software margins are. Okay. That's helpful. Thanks, guys. Good quarter. Our next question is from Ashish Sabadra with Deutsche Bank. Please go ahead, your line's open. Thanks for taking my question. I just wanted to ask a broader question about the platform strategy. Last quarter, you talked about some good traction on that front. I was just wondering if you would provide any update on any other customer conversations. How should we think about the FICO Studio, how's that coming along and the Open API strategy? Thanks. The FICO Studio strategy is coming along just fine. We're on track. We have a quarterly release cycle, every quarter we make improvements. The API strategy is very much in place. We're very focused on it. We're obviously using the APIs internally today, we're in the process of turning those outward, and documenting them so that others can use them. I actually think that the bigger hurdle for us will be around building a partner ecosystem that can leverage those APIs. You know, getting the APIs out there is not something that we worry about. I think building an ecosystem takes a bit more work. That's very helpful color. Maybe just a follow-up question on the fraud piece, the fraud solution piece. With this work from home, there's definitely increased traction for fraud and digital identity solutions. You're seeing increased demand in the marketplace. TransUnion and Equifax also announced certain products, and Equifax announced Kount acquisition as well. I was just wondering if you can just talk about the demand that you're seeing in the marketplace, but also talk about the competitive environment for Falcon. Obviously, Falcon is the market leader there on the financial side, but any change in the competitive environment there? Thanks. We're not seeing tremendous changes. I mean, Falcon is very much still the market leader, and we're still selling Falcon in all its forms. We know we're not really seeing a difference there. I wouldn't say that demand is way up, nor is it down for Falcon. What we are doing in the fraud space is also looking at some I would call it less traditional fraud opportunities for us and leveraging the Decision Management Platform for them. Some of the lower cost, you know, not as heavy duty as Falcon, but some of the other kinds of fraud solutions will be coming on the platform. That's very helpful. Thanks. Our next question is from Jeffrey Meuler with Baird. Please go ahead. Yeah, thank you. Hello, everyone. Will, I know that you said you're gonna give us more detail next quarter on how the calendar 2021 special pricing in B2B scores is feathering in, but just hoping you can confirm that four weeks in, the execution of the special pricing implementation is going smoothly and as planned? Everything is going as smoothly as expected. Everything's going as planned. you know, it really happens later. We'll talk about it later. Fair enough. Then, on software, any more perspective you can provide on license and maintenance? I understand what's going on from transaction and maintenance. I understand what's going on from a license perspective, but for transaction and maintenance applications down year-over-year, and I know that's not usually a huge area of growth, but it was down. In DMS, it was, I guess, modest growth by DMS standards against what mathematically looks like not too tough of a comp. Yeah. Mike, do you wanna take that? A lot of the... that is a category that is more usage- driven than fixed minimum- driven. It's not entirely usage by name. And we did see some usage fluctuations this quarter in some of our products, some of which would be, you know, would seem to be related to the macro, like we saw some less usage of our origination solutions in a couple of spots. And then there's normal variability in usage of things like fraud. Again, some of that may be macro-related, as less credit card transactions are being processed, and so forth. There's not, there's not a big story there. Again, I think the, you know, the big, you know, the bigger swing was the, just the license number overall, which was impacted, as I described, by the RevRec change and just the, you know, the normal Q1, combined with just lower renewals being available. Got it. Will, sorry to ask you to repeat yourself, but the mortgage comment in your prepared remarks, was it just that Mortgage is seasonally a smaller percentage of the mix this quarter? Uh- The, the, uh, the mor- Yeah. Go ahead, Will. I was just gonna say it's Mortgage is holding up fine, actually. You know, for now, it looks right. Right. I guess Equifax reported that mortgage inquiries should actually accelerate a little bit this quarter, and I thought you had a comment that, you know, something related to Mortgage, almost like it was a lesser benefit than I just didn't know if that was just seasonal mix or what you were saying, and maybe I just misheard you. No, I don't, maybe I need to go consult my notes. I think that, you know, we don't really opine on kind of the future mortgage. You're better off looking to the bureaus and their forecasts than to us because we're kind of a lagging indicator on that. What we see, at least what we're seeing right now, is strong mortgage. Yep. Gotcha. Thank you. Once again, if you'd like to register for a question, please press the one followed by the four on your telephone. We have a question from Brett Huff with Stephens Inc. Please go ahead. Your line is open. Good afternoon, Will, Mike, and Steve. I hope you're all safe. Thanks for taking the question. Two bigger picture ones. We've been watching DMS for a long time and still think it's a really important long-term strategic product. I think, Will, you talked about, you know, your commitment to that. Last quarter, we had, I think, a big Brazilian bank that kind of went enterprise on that. Anything in the pipeline similar to that or conversations that you can, you know, give us anecdotally, any sort of signs that this wave is starting to build a little bit? Yeah. I think it's too early to talk about specifics, but we have a lot of DMS opportunities in the pipeline. There is interest from large finance institutions. Yeah, you know, without being able to get into specifics right now, I would say that it is consuming a lot of our sales activity. That's helpful. The second question is on margins. I know that we've been working through sort of enhancing our tech kind of infrastructure and then spending a lot of money on DMS and some of the SaaSification, if you will, the platform solution. I know that we've talked about the potential margin benefit from that, but I know we're kind of running in a little bit to the RevRec change and some other things, maybe exiting some businesses. Can you sort of give us a sense this year and next year, not numbers, but just how we should think about margin benefits and headwinds as we look to see the business start, you know, expanding margins, maybe a little more rapidly? Thanks. You know what? The margins, we have pulling and pushing in two directions. The margins are improving because we're getting better on expenses. We're, you know, our mix is changing with less PS. We're reviewing our products and identifying the ones that really aren't contributing enough and are not strategic. We talked about, you know, China and ESS, for example. Set against that is this incredible opportunity that we see with DMP, with the Decision Management Platform. We, you know, we work through year by year what we can afford to spend on investing in it. It's not trivial. Given the market opportunity, we're not gonna shortchange it. I think some of the margin improvement will be consumed by that incremental investment. Which way that goes, I know you're looking for direction. Are margins getting better? Are they getting worse? Are they going sideways? We're just not prepared to say yet. You know, flat is probably a good way to think about it, but I wouldn't, you know, I wouldn't put a lot of stock in that because it could move. It really is, you know, a constant press internally for us to improve margins from an operating standpoint, you know, with cost reduction, with, you know, getting better on COGS, all those kinds of things, while at the same time recognizing that we're not gonna miss this opportunity with the platform. That's really helpful. Thank you, guys. We have a follow-up question from Surinder Thind with Jefferies. Please go ahead. Your line's open. Thank you for the follow-up question. Quick question on kind of the M&A front. You talked a little bit earlier about kind of fine-tuning some of the businesses that you're in and being a little bit more focused. Is there an opportunity for M&A within that, or has anything potentially changed there that we can think about, or any needs that you might have? I don't think a lot has changed. You know that our stance on M&A is we're always open and looking, and we rarely find anything significant that makes sense for us. And the issue, especially given our platform strategy, the issue is that, you know, introducing other businesses with other code bases, you know, that would just have to, you know, be put on a path to be brought into our platform. It is, it's just a little bit complicated and potentially off strategy. While we're always looking, it makes more sense for us at this time to continue to invest organically and build organically. Now, that said, we're always doing small acquisitions, typically talent acquisitions, sometimes small technology acquisitions that fill little gaps. In terms of large acquisitions, you know, I wouldn't hold my breath, but never say never. It could happen, but it, you know, it's not imminent. That's very helpful. One other quick question. There were a lot of questions in kind of the bookings numbers, and you guys provided some color on the seasonality component and how the first fiscal quarter is generally the weakest. Is there anything else? I mean, when I look back, that number was actually the lowest that I have on record for you guys in the past three-plus years. Is there anything there to read into other than just the lumpiness in the sense that maybe clients are hesitating a little bit? Is there maybe a little bit of uncertainty? Like, what are those client dialogues, or is it just clients are waiting for more of the DMS platform? Maybe, if you can talk about the roadmap for the DMS platform over the next year. I'll take a stab at it, and Mike can chime in. I think that the bookings. There are other changes going on. For example, term length has shrunk a bit. That's by design. It's because we would rather have a renewal sooner than have it pushed way out because we think there'll be opportunities to do better down the line. And that's reflected in the sales compensation. It's reflected in the fact that meaning that our salespeople are now compensated on kind of annual recurring revenue as opposed to as opposed to the full bookings value. And that has a natural impact on, you know, on term length. I would say that's one factor. I would also say I'm not sure it's the right I mean, obviously, we've been promoting it as a metric for ourselves for a long time, and we're not gonna stop sharing it. I do think that over time, we have to really start to focus on our business on this kind of an annual recurring basis. Mike, do you wanna add anything to that? I'd say that it doesn't feel like there's a COVID or otherwise systemic hesitancy on the part of customers. You never can tell for sure, the pipeline still feels good. We said we still feel good about the full- year on a new business basis. We came off of the highest ever booking quarters in Q4 into what is seasonally the slowest quarter. It's again, we don't think that what you're thinking about is the case. Time will tell, the indicators we see is that the pipeline continues to look good for the year. That's very helpful. One kind of final question here, just the roadmap for the DMS platform over the next year. Yeah, I'm not sure what we're prepared to disclose about the roadmap. We continue to make progress on Studio, and we continue to work hard against getting the APIs turned outward. I would say those are the big points. Okay. Thank you so much, guys. Thanks a lot. There are no further questions at this time. Thank you. This concludes today's call. Thank you all for joining, and we look forward to speaking with you again soon. Thank you. Have a good day. That concludes today's call. Thank you for participation and please disconnect your line.