Welcome to the N-able second quarter 2024 earnings call. My name is Sam, and I will be coordinating your call today. I will now hand you over to your host, Griffin Gyr, to begin. Griffin, please go ahead. Thanks, operator, and welcome everyone to N-able second quarter 2024 earnings call. With me today are John Pagliuca, N-able's President and CEO, and Tim O'Brien, EVP and CFO. Following our prepared remarks, we will open the line for a question and answer session. This call is being simultaneously webcast on our investor relations website at investors.n-able.com. There, you can also find our earnings press release, which is intended to supplement our prepared remarks during today's call. Certain statements made during this call are forward-looking statements, including those concerning our financial outlook, our market opportunities, and the impact of the global economic environment on our business. These statements are based on currently available information and assumptions, and we undertake no duty to update this information except as required by law. These statements are also subject to a number of risks and uncertainties, including those highlighted in today's earnings release and our filings with the SEC. Additional information concerning these statements and the risks and uncertainties associated with them is highlighted in today's earnings release and in our filings with the SEC. Copies are available from the SEC or on our investor relations website. Furthermore, we will discuss various non-GAAP financial measures on today's call. Unless otherwise specified, when we refer to financial measures, we will be referring to non-GAAP financial measures. A reconciliation of certain GAAP to non-GAAP financial measures discussed on today's call is available on our earnings press release on our investor relations website. Now, I will turn the call over to John. Thank you, Griffin, and welcome to everyone joining us on the call. Today, I will discuss our second quarter results, our progress on top business objectives, and share an update on the market environment and other strategic initiatives. Let's start with our results, where we exceeded the high end of our top and bottom line guidance. Revenue was $119.4 million, growing approximately 13% year-over-year on a reported and on a constant currency basis. Adjusted EBITDA was $46.8 million, representing an adjusted EBITDA margin of 39%. This marks our seventh consecutive quarter operating north of the Rule of 45 on a constant currency revenue growth and adjusted EBITDA basis. Security was a standout theme in the quarter. Small and medium-sized businesses are feeling acute pressure to protect their operations. According to the US Chamber of Commerce Small Business Index Report, 60% of surveyed companies cite cybersecurity as a top concern. Our extensive security portfolio of advanced endpoint detection and response, managed detection and response, password management, and email protection offers the critical protection they deserve. As one testament to our success in delivering enterprise-grade protection to the SMB, we now protect approximately 1.8 million endpoints with our EDR solution. Powerful capabilities and a frictionless buying experience are key to the success. Enabling 1-minute deployment, self-provisioning, and easy configuration across the MSP's multi-tenant environment help this robust security solution seamlessly protect SMBs while saving our MSPs time and money. Our newly launched MDR solution is also resonating. While still in the early innings, MDR is tracking as one of our fastest-growing SKUs at this stage of its life cycle and was a considerable bright spot in the quarter. N-able MDR augments MSP operations, empowering them to provide human eyes on glass without burdening themselves with increased internal staff. This democratizes MSP's ability to add human interpretation to security alerts and incidents. A true game changer. We are confident that we are well-positioned to continue penetrating this fast-growing, multi-billion-dollar MDR market. While stopping an attack is paramount, businesses must also ensure that they have software systems in place to recover data due to a successful cyberattack, natural disaster, unexpected outage, or any event that could cause data loss. Cove, our data protection solution, does just that. With Cove, MSPs can quickly, comprehensively, and affordably restore data and get back to business. Our Microsoft 365 backup solution is now protecting 2.4 million users, and we continue to grow our share in this critical data protection market segment. Security is a priority across organizations. Our quarterly results reflect this paradigm, with data protection and the security product group leading our growth. With rising threat levels and cyber regulatory requirements creating considerable pressure and risk, we are steadfast believers in the long-term demand for security software and are proud to bring MSPs and SMBs the critical protection they deserve, efficiently integrated into our IT management platform. Let's now look at the progress made on our top business objectives. Our product development engine continues to deliver new capabilities. In data protection, we dramatically improved our variable retention capabilities, allowing partners to meet changing legal and compliance requirements. We also further bolstered Cove's PSA integration capability. This PSA integration highlights product usage information, greatly enhancing the ease of billing. These strong value-added capabilities with clear use cases build on our foundational product advantages of cloud-first multi-tenant architecture and favorable cost of ownership. We continue to further Cove's position as a trusted protector of one of enterprise's most critical assets, data. We also made great progress with our RMM platforms. One exciting update is the strengthening of our identity centralization management capabilities. We now offer our partners an automated means of provisioning and deprovisioning users into N-able. This highly requested feature is a powerful time-saving enhancement. MSPs face considerable complexity and often tedious, repetitive process as they manage IT systems for multiple heterogeneous clients. Efficiency-boosting improvements, like identity centralization, are critical for scaling their operations. These product efforts are resonating in the market. N-central, our leading RMM platform, led the way in our new customer acquisition motion, representing four of the top five new customer deals in the quarter. N-central customer lands, it was over 20% year-over-year. A growing number of MSP partner advocates and the strong presence of N-able MSPs on the top third-party MSP industry list gives us confidence that our improvements are meeting the mark. Our mission is to empower MSPs with software that makes IT simpler and safer, and we are delivering. On the go-to-market front, we made key advancements. From a geographic perspective, we invested in our direct sales motion in German markets at the beginning of the year. While we are still in the early part of the investment curve, lead generation has already nearly doubled. With the region representing significant GDP and MSP spending, we believe this investment will have a strong return over the coming months and years. We are also seeing succes s with our Business of Security and Cove, MDR, Disaster Recovery classes. These programs serve the dual purpose of educating customers on our product set and connecting them with MSPs, enabling them to learn from their peers. Strategically pairing a human-in-the-loop approach with efficient digital initiatives is part of our customer engagement model that allows us to profitably access the fragmented SME market, and we believe that our go-beyond technology model is resonating with our partners and prospects. We are also seeing traction with our direct and upmarket customer segments. Internal IT sales continue to grow at a fast clip, and we saw continued success with larger enterprise-focused MSPs. This success reflects both market trends and our operational achievements. From a market perspective, we have seen increasing IT complexity, prompting larger enterprises to outsource portions of their work to specialized mature MSPs. On the operational front, our product innovation expands our appeal across the market. Our recognition on the MES Midmarket 100 stands as a testament to our success in this vector. Now, turning to an update on our long-term contract initiative in the market environment. We entered 2024 with a strategic objective to transform our customer relationship. As the MSP market matures, so have our customer needs. Scaling MSPs prefer operational predictability and stability over consumption-level flexibility. To meet this growing demand and to drive a more predictable commercial relationship for N-able, we ramped up our effort to transition customers from consumption and or month-to-month contracts to annual and multi-year agreements. We began the year with less than 10% of revenue from annual multi-year deals. Now, approximately 40% is from long-term contracts, and we expect most of our revenue will be long-term committed MRR by the end of the year. We believe this initiative cements our position as a strategic partner with our customers' operations and will drive stronger alignment and better long-term economics for both sides. Providing our MSPs predictability drives multiple benefits for N-able. We believe entering into long-term contracts with our customers will help minimize future downward spending fluctuations and support strong growth retention. This initiative also frees up our partner success resources, allowing them to spend more time on symbiotic expansion-focused discussions, which can help drive high cross-sell and net retention. We are confident that long-term contracts are the right strategy for sustained success. That said, there have been near-term negative financial impacts as customers optimize their estates before signing long-term deals. Turning to the market, as MSPs continue to scale and strive for operational excellence, they remain cost diligent and face tight customer budgets. The endpoint security space is also maturing. Although these factors have weighed on our growth this year, our channel checks with MSPs remain positive, and MSPs continue to provide mission-critical IT and security services to hundreds of thousands of organizations globally. Customers continue to grow their business with N-able, with our bookings up 20% year-over-year. And while we navigate short term, our focus is on investing and executing with rigor to drive enterprise value over the long term. Our gaze is fixed on two clear objectives. One top objective is modernizing our IT management platform. Modernization efforts have already delivered a new cloud management capabilities, core performance upgrades, and a streamlined user experience. We believe that continuing to execute the strategic focus area will allow us to capture a broader and deeper slice of the expanding SME IT estate and propel our growth. Another objective is deepening our presence in security. Protection and resilience are paramount to customers, and security and cloud backup spending are generally projected to grow faster than broader IT budgets. We believe Cove, MDR, and our powerful IT management platform, which is tailored to MSP's unique needs, positions us to win in these attractive growth categories. With that, I would like to turn the call over to Tim to discuss our financial results and outlook, and then I'll circle back for some closing remarks. Tim? Thank you, John, and thank you all for joining us today. Our second quarter results were strong, exceeding guidance on the top and bottom lines. SMEs and MSPs continue to rely on our IT management, data protection, and security solutions to produce critical business outcomes, with data protection and security leading our growth in the quarter. For our second quarter results, total revenue was $119.4 million, representing approximately 13% year-over-year growth on a reported and constant currency basis. Subscription revenue was $117.4 million, representing approximately 14% year-over-year growth on a reported and constant currency basis. Other revenue, which consists primarily of revenue from the sale of maintenance services associated with the historical sales of perpetual licenses and revenue from professional services, was $2 million. We ended the quarter with 2,094 partners contributing $50,000 or more of ARR, which is up approximately 1% year-over-year. Partners with over $50,000 of ARR now represent approximately 56% of our total ARR, up from approximately 55% a year ago. Dollar-based net revenue retention, which is calculated on a trailing twelve-month basis, was approximately 108%, or 106% on a constant currency basis. As a reminder, our pricing and packaging changes, coupled with rationalization related to our long-term contract initiative, began materially impacting net revenue retention starting in the second quarter. Turning to profit and margins, note that unless otherwise stated, all references to profit measures and expenses are calculated on a Non-GAAP basis and exclude the items outlined in the GAAP to Non-GAAP reconciliations provided in today's press release. Second quarter gross margin was 84.7%, compared to 84.8% in the same period in 2023. Second quarter Adjusted EBITDA was $46.8 million, up approximately 34% year-over-year, representing approximately 39% Adjusted EBITDA margin. Unlevered free cash flow was $35.5 million in the second quarter. CapEx, inclusive of $1.9 million of capitalized software development costs, was $5.1 million, or 4.3% of revenue. Non-GAAP earnings per share was $0.14 in the quarter, based on 187 million weighted average diluted shares. We ended the quarter with approximately $158 million of cash and an outstanding loan principal balance of approximately $340 million, representing net leverage of approximately 1.1x. Approximately 46% of our revenue was outside of North America in the quarter. Before turning to our financial outlook, I will give commentary on our second quarter results. Revenue was above the high end of our guidance range. Our performance was driven by steady demand, a positive FX impact of approximately $500,000 relative to expectations, and a positive net impact from our long-term contract initiative. The net effect of our long-term contract initiative in the quarter reflects a positive impact from accelerated revenue recognition in accordance with ASC 606, triggered by the signing of long-term contracts, partially offset by the spend rationalization from some customers that John mentioned. About 15% of our ARR is on-premise in nature, and ASC 606 accounting standards call for a portion of on-premise revenue in long-term contracts to be recognized as a lump sum in the month the contract begins, with the remainder recognized ratably over the contract term. This results in an increased amount of in-period revenue recognized from customers that transition from month-to-month arrangements to long-term contracts. 606 treatment drives lumpiness in revenue results, which flows through to our Adjusted EBITDA and will impact revenue and Adjusted EBITDA in future periods. We expect the net positive impact from the long-term contract initiative to be most pronounced in the second quarter and to result in a net positive impact to revenue for the year. Turning to our financial outlook, our guidance accounts for the following elements. First, we are assuming FX rates of 1.08 for the euro and 1.27 for the pound for the remainder of 2024, along with updates to other currencies to more closely reflect the current rate environment. These updated rates drive approximately $1.3 million of positive revenue impacts for the remainder of 2024 relative to our FX assumptions during our May call. Second, our guidance reflects continued success in converting customers to long-term contracts. We anticipate the net revenue impact associated with our long-term contract initiative will be less pronounced in the second half of the year. We anticipate net retention will face moderate near-term pressures to drive long-term benefit. Third, we anticipate operating in an uncertain macro environment. With that in mind, for the third quarter of 2024, we expect total revenue in the range of $114.5 million-$115 million, representing 6%-7% year-over-year growth on a reported basis and approximately 7% growth on a constant currency basis. We expect third quarter Adjusted EBITDA in the range of $39.5 million-$40 million, representing an Adjusted EBITDA margin of 35%. For the full year of 2024, we now expect total revenue of $463 million-$465 million, representing approximately 10% year-over-year growth on a reported and constant currency basis. We are raising our Adjusted EBITDA outlook and now expect full-year Adjusted EBITDA in the range of $165.5 million-$167.5 million, up approximately 16% year-over-year at the midpoint and representing an approximately 36% Adjusted EBITDA margin. While 606 dynamics created shifts within the quarters, we are slightly raising the midpoint of our full-year revenue outlook and profit outlook relative to our last guide. We reiterate that we expect CapEx, which includes capitalized software development costs, will be approximately 5% of total revenue for 2024. We also expect Adjusted EBITDA conversion to unlevered free cash flow to be approximately 64% for the full year. We expect total weighted average diluted shares outstanding of approximately 187-188 million for the third quarter and 187-189 million for the full year. Finally, we expect our non-GAAP tax rate to be approximately 28% in the third quarter and 25% for the full year. In closing, we were pleased with the second quarter and our ability to raise the midpoint of our full-year revenue and Adjusted EBITDA outlook. While we see some transitory pressures, MSP level retention and new customer acquisition have remained steady, which we believe set a strong foundation for future growth. We will aim to make selective growth investments to capture the growing market opportunity, and with our strong profit margins, cash generation, and balance sheet, we also continue to explore avenues for inorganic growth. Now, I will turn it over to John for closing remarks. Thanks, Tim. We believe we've made tremendous progress across the business in the second quarter and have ambitious goals for the second half of the year and beyond. Our view of the long-term opportunity and our growth outlook remains steadfast. With platform modernization and security fueling our product vision, we believe successful tactical execution can meaningfully drive the N-able growth algorithm forward. Primary drivers include our contract initiative and market shift towards larger MSPs to sustain gross retention in the high 80s to low 90s. Successful cross-selling of our expanded product set to drive net retention in the 110% range, and growing the market presence of Cove, both with MSPs and internal IT, coupled with our new MDR solution, to fuel new customer acquisition and contribute an additional mid-single digits of growth. In total, we aim to grow the business in the mid-teens. As the recent global outage demonstrated, IT is needed to keep the world running. We believe that our mission to empower MSPs with leading technology has never been more important, and we are excited to continue to drive successful IT outcomes for businesses across the globe. And with that, we'll open up the line for questions. Operator? Thank you very much. If you would like to ask a question, please press Star followed by one on your telephone keypad now. If you change your mind, please press Star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. We have our first question from Matthew Hedberg, from RBC. Matthew, your line is open. Hey, guys, it's Mike Richards on for Matt. Thanks for taking the question. Maybe you guys could talk more about the optimization you're seeing from customers. Like, how has that come in relative to your expectations? Where are you seeing it from customers in terms of your product portfolio? And then, you know, could you quantify that positive impact that you've seen, and was this, like, already contemplated in guidance heading into the quarter? Thanks. Hey, good morning, Mike. This is John. I'll start. I'll ask Tim to add a little bit more color on the second part of your question. Look, I think it's important to make sure that the reason for the strategy and to make sure folks are aligned and understand that. We look at it. We've mentioned to this group and also just to the broader audience that within our base we have an opportunity of about $30 plus per device per month, to really go realize, and we've been realizing about, you know, $3-$4 of that. And part of the strategy is to lock in our customers, give them the predictability, so then we can focus on the expand. The timing of this exercise really is more related to the expansion that we have in our offerings. Now that we've added MDR, and now that we've added additional bits in Cove, with that, you know, that cross-sell opportunity, that white space opportunity growing, we felt the right thing would be to lock in the customers. So it's. I would call it two-thirds offense, where we're really trying to lean in, but also one-third defense. You know, when we go into a customer arrangement that's month to month or consumption-based, we see, you know, fluctuations on what those billings would be. And then, most notably, you know, the MSP market itself, not us, but the MSP market itself, we do see consolidation. And we believe that when we're locking in our customers to two or three years, and there may be consolidation, now we have, N-able has a much better opportunity to remain the technology stack of choice, which is what the MSP usually wants. And so for us, it's also just being able to lock in those customers, focusing in on the growth, and therefore, we can get going on really that expand part of the equation. Because the opportunity, the white space within our base is massive. So that, that's really the big bits. Where we're seeing some of the rationalization, look, I'd say it's a collection of things. I can give you more of an anecdote in that, you know, if a customer might be giving us, you know, $10,000 or $15,000 of monthly recurring revenue that's completely consumption-based, and we're asking them to commit to a 36-month period, you can imagine that, you know, the customer might look for some pricing concessions in exchange for that long-term commitment. So we are seeing it in situations like that, where we're asking the customer to lock in long term, and we're frankly fine with giving them some pricing concessions in exchange for that commitment as a strategic partner. So, we're seeing it in there. And then, just by nature, when you're asking somebody to commit, they're gonna go through their estate and see if there might be some solutions or some devices that they might not necessarily have, if there's some shelfware, quote-unquote, "type of thing" that they might try to realize. There's no really heightened product area, I would say, that's seeing it. It's more about, "Hey, you're asking me to commit to 24, 36 months, 12 months, let me look at my estate and make sure that I'm willing to commit." Because at the end of the day, these SMEs, excuse me, these MSPs are SMEs, and they want to make sure that they're driving their top and bottom line in a responsible manner. So, we expected some of this. Overall, the LTC program has been ahead of the expectation as far as customers wanting to commit, willing to commit, so that gives us a good vote of confidence that we're putting the right products in market. And as a result, I think what ends up happening is we're ahead of that program, and you're seeing a little bit more pull in it related to 606. So, you know, the pull in on 606 is more of a kind of an indicator that the customers are willing to commit, and as a result, we have a more resilient revenue base than we had even six months ago. Great, thanks. And then a quick follow-up, you know, how did linearity shape up in the quarter? You know, was there anything you guys saw from, like, a macro perspective that, you know, things worsened heading out of the quarter into July and maybe now with some of the market volatility and, you know, given some software peers have seen some heightened macro uncertainty? So just some more color on that as well. Sure. The best indicator, as far as, you know, some of the market velocity is with our bookings. And you know, we referenced in the prepared remarks elements of our bookings being up 20%. Overall, both in new customer acquisition and new SKU sales, our bookings were also up north of 20%. So that's a good indicator, again, that as, you know, as late as, you know, this quarter, we're continuing to see our products resonating in the market. Anything to call out within the months? Not really. You know, I'd say, I'd say overall, what we're seeing are customers really just really making sure that they're double-checking more their the price. The demand is there. Our MSPs are in high demand. All the channel checks support that the MSPs are continuing to be in high demand because they're providing a mission-critical service to their SMEs, and those SMEs are quite resilient, right? These SMEs, for the most part, they're in healthcare, they're in the financial institutions, some are even in you know, state and local government. So they're in recession resilient and I would say overall resilient SME markets. But that being said, those SMEs are double-checking to make sure that they're getting their best value. And we're seeing MSPs, you know, making sure that they're paying their right price for things like endpoint security, as an example. Great. Thanks, guys. Congrats. Thank you very much. Our next question comes from Jason Ader from William Blair. Jason, your line is now open. Yeah, thank you. Good morning, guys. On the bookings up 20%, I just want to understand, is that some of the annual shift that's going on there? Because if you're gonna do a multi-year or 36-month, that's gonna really help the bookings number. Is that, is that a factor in why that bookings was so strong? Morning, Jason. Great question. I'm glad you asked this so that we could clarify. So the way that we define our bookings are, is the annual contract value, so the value of, of the 12 months. So frankly, even if it was a multi-year deal, we wouldn't be counting that way. So this is, this is, purely the annual contract value from the first 12 months, and of our, of our new customer acquisition. So, new landed customers to enable, and then new SKU. So if, you know, if you were a N-central customer and, you made the right decision to, to now go and consume Cove, that would be a new SKU. And so, it, it excludes anything or, or any type of multi-year type of, you know, shenanigans, I'd say. It's all one year, 12 months. Okay. All right. That's, that's helpful clarification. And then, I guess it's—I'm just trying to reconcile the, you know, the bookings data with the guidance, you know, for the second half, which is, you know, under 10% growth. So how, how do you help us reconcile that delta? Hey, Jason, it's Tim. Couple of things. One we've spoken to before. One is the growth over the pricing and packaging changes that we spoke to last quarter, the last couple of quarters. And last quarter, we referenced, that's about a 2.5-3-point headwind in quarter two through four this year, and that'll carry into Q1 of next year as well. And you know, some of the transitory headwinds really carry for four quarters. And so that's part of that equation. That's not part of our bookings. What's also not part of our bookings is any of that rationalization that John spoke to as customers have been moving into these long-term contracts. So those two things combined are what I would say, dragging the year-over-year performance that's factored into our guidance in the second half of the year versus the bookings component. So, you know, we're really trying to highlight that the fundamentals of the business are very strong. Our MSP dollar retention is in line with the last three quarters. Bookings are strong, you know, up 20% year-over-year. We just have a couple of those transitory headwinds that will carry with us through the second half of this year and into the early part of 2025. But post that, you know, we'll grow through those transitory headwinds. We'll have, you know, the thesis and the benefit of really focusing on cross-selling into these long-term customers, long-term committed customers, through the second half of this year and into next year and beyond, to drive, you know, what we believe is growth acceleration, you know, in 2025, but more acutely in the second half. All right. And just a quick, two-part follow-up. First is, are other vendors in the market also moving to annual from monthly, or are you guys unique there? And then secondly, why wouldn't you see more in period rev rec in the second half, like you did in Q2, tied to that, shift from monthly to annual? Sure. I'll maybe take the first one, you can take our second one. So yes, we are seeing competitors. In fact, a little bit of this, I mentioned the two-thirds offense and the one-third defense. You know, our competitors, by and large, are locking in customers to multi-year deals, actually. So in some ways, we're playing a little bit more catch up. It's also a very good indicator. As the MSPs mature, as they're getting larger, there's a willingness and actually, I would say even a propensity to lock in the customer contracts for longer term, much more akin to an enterprise type of procurement relationship. So we are seeing the other larger players in the space do the long-term bit. And I can pass it over to Tim on the second part. Yeah, and Jason, on some of the dynamics of the rev rec, as some of the revenue is accelerated or it becomes more lumpy on upfront versus over time, it does take away from revenue in future periods. So all the success we had in the first half of 2024 on getting, you know, customers committed into these long-term contracts has pulled revenue into, you know, the first and more acutely, the second quarter. And, you know, that takes some revenue out of Q3 and Q4 for the rest of the year. So like, we Right, but why wouldn't you see more- [crosstalk] Gave some customer there. Why wouldn't you see more? If you're, if you're converting more customers to annual, why wouldn't you see more of that 606 impact in the next- We will, but, so Q1 and Q2 did not have the headwinds from us committing customers prior to those quarters. So we really initiated this, you know, we really started this initiative at the beginning of the year, so there were no real headwinds in Q1 when we started this. There were minimal headwinds in Q2, where we saw, you know, I would say, a bigger portion of ARR committed in that period. Q3 and Q4 now have a bigger tax on them because of the success in Q1 and Q2. Q1 and Q2 do not have the same tax that Q3 and Q4 have from a dynamics. We have baked in, and we have it soon that we continue to commit customers into that fashion, but it's offsetting some of the revenue that was pulled forward into Q1 and Q2 from the success that we had there. Got it. Thanks. Thank you very much. Our next question comes from Brian Essex from J.P. Morgan. Brian, your line is now open. Hi, this is Charlotte on for Brian. Thank you so much for taking the question. Quick question on the net dollar retention rate. I know you mentioned some headwinds associated with the pricing and packaging. Can you give us an extent of, like, how much the headwind is expected to hit that in future periods? And at what point do we expect it to, I guess, maybe go back to the 110 level or above? Like, at what point should be normalized? What do you have factored into guidance? Thank you. Yeah, absolutely. Yeah, I'll reiterate some of the color I gave previously on, you know, some of the transitory headwinds we have on the net revenue retention for the second half of the year, and will be parts of the beginning parts of 2025 as well. About 2.5-3 points is related to some of the pricing and packaging changes that we mentioned last quarter, coupled with the impact from some of the rationalization we've seen from the long-term contract initiative that we've implemented. So, in terms of timing and the impact, I expect that impact to carry through the second half of this year and into Q1 and Q2 of 2025. I would expect a more normalized, dollar-based net revenue retention rate in the second half of 2025. Thank you. Thank you very much. Our next question comes from Mike Cikos from Needham. Mike, your line is now open. Hey, guys. Thanks for taking the questions here. Maybe just to continue on that point for a second, if we think about those headwinds, is there a way... Like, should we expect the headwinds to be most acute in 3Q and then abate thereafter, or should this be like a mounting pressure where it'll actually be the biggest headwind by the time we get to Q2 of next year? Like, how do you think about the, the slope of this as it plays out? I would expect it to be steady on how we do the math on our retention rate is a trailing 12-month average. I would expect additional pressure that we mentioned in the prepared remarks on the dollar-based net revenue retention rate. But from a velocity standpoint, I would expect it to be gradually, you know, steady to gradually improving as we kind of chart through the end of 2024 and into 2025. Okay. Thank you for that. And I guess the other question, I know last quarter, we were talking about this as well, as far as the shift to annual commitments. I just wanted to see with the first six months under our belts now, what is the feedback that you're receiving? Like, do they understand the reason for this push? And I, I would think so if John is saying that this seems like it's a little bit more of a catch-up versus other players or competitors out there, but also trying to be cognizant of some of the pain out there, just given people are trying to preserve capital in what is this uncertain macro we find ourselves in. Hey, Mike, it's John. Look, the customers, it's actually resonating quite well. I think the customers appreciate the level of predictability. We're giving them, you know. By the way, we're also, unlike our competitors, our competitors kind of forced a lot of this on their customer base. We elected not to force this and make it an option. And so I should make that clear. And so I think our customer base appreciated the optionality that this afforded them. And effectively, the option was, hey, look, if you're going to stay, you know, consumption-based or month to month, there will be a steady stream of price increases. If you're looking to commit and provide that stability to us, that will be that will turn into better economics for you, that will turn into better predictability to you. And so I think overall, giving them the optionality is really resonating with the customer base, and then we can put our work and our collective focus on helping them grow their business, expand their services. That's been the other thing. A lot of these conversations unearth an opportunity. When we're having conversations about their 2- or 3-year tech stack, what they're trying to do, their goals over the long term, it's unearthing additional Cove opportunities. It's unearthing additional MDR opportunities. So we're locking in. They're looking at us as that strategic partner, and now we can focus on driving their business forward. So overall, I believe the tone is resonating. It's differentiated from what some of the other folks in the market have done, and I think it's been appreciated. Great. Thank you, guys. Thank you very much. As a reminder, to ask any further questions, please press Star, followed by One on your telephone keypad now. We have a follow-up question from Jason Ader from William Blair. Jason, your line is now open. Oh, hey, hey again. I thought I would ask a sort of zoom out question for you, John, just on this MSP space. Do you have a sense of how much of the SMB IT market has shifted to kind of the MSP model and approach versus, you know, running their own IT internally? And do you think a weak macro backdrop actually slows down or speeds up the trend, which obviously has been towards MSPs and outsourced IT? But, I think it would help investors- Sure [crosstalk] to just frame where we are in the market, you know, in terms of, SMB IT shift to the MSP model. Sure. So, ultimately, you know, small medium business, mid-size, mid-size companies, large Fortune 500 companies, they're all left with the choice, and that choice is: How do I best monitor, manage, and protect my assets? What we're finding, Jason, is that more and more of those enterprises are saying it's more cost-effective to let someone who's specializing on this to actually provide part of it. What we're seeing is more and more, midmarket and larger companies using MSPs to augment. And so the TAM in which the MSPs are actually servicing are growing because, you know, Fortune 1000 companies, midmarket companies, are now looking to MSP to do part of that. Why? Because it's getting harder, right? Everyone is struggling with a very low unemployment rate for IT professionals and security professionals. So they're looking to MSPs to help with part of their stack. That could be patching, that could be with a security service, like an MDR offering, that can be with a backup disaster recovery offering. So by and large, we're seeing the demand for these MSPs to go to a further market. I've been in this industry now for over 11 years, and when I started, MSPs were primarily servicing the VSB, you know, companies that were 50 employees and under. MSPs are now servicing, you know, Fortune 1000 companies. And what's also happening is that these MSPs are growing up. MSPs are now publicly traded. MSPs are now part of you know, several billion-dollar enterprises. As a result of their maturity, of their scale, they're now able to service larger and larger enterprises. So these provide tailwinds overall to the industry, and that's what has us confident in the long-term tailwind of the MSP space. The service that these folks provide are mission-critical, and if you're a CIO or a CISO of a mid-sized company or a large company, now with the level of maturity and the tools that, you know, companies like N-able provide, they now can rely on MSPs as a nice augment, a cost-effective augment. To your other point, you know, if you're a CISO or a CIO of a midmarket company, and you're faced with budget pressures from your CFO or your CEO, this augment play is a good way to offload maybe some of the higher labor costs if you were to do it yourself. And so I believe actually it's a nice play for midmarket companies, for larger companies, to take a step back and say, "Hey, where can I outsource some of my costs, some of my labor, and do so in a cost-effective, number one, and but number two, in a lot of ways, more secure manner?" And so our technology allows for this co-managed play, where an internal IT department can have eyes on glass, the same eyes on glass that the MSP can have. So it gives the internal IT department the transparency that they want, but it saves them some of the cost because it's relying on that MSP to provide some of that labor and the expertise. Which is why I believe overall, for a bunch of factors, you know, it's very much a recession-resilient industry. Helpful. Thank you. Thank you very much. As a final reminder, to ask any further questions, please press Star followed by One on your telephone keypad now. We have no further questions. I will now hand over back to John for closing remarks. John? Thank you, operator, and thank you all for joining us today. Looking forward to talking to you next quarter. That concludes today's call. Thank you for joining. You may now disconnect your lines.