Great. Okay, we'll get going. Hi, my name is Steve Tusa. I'm the electrical equipment and multi-industry analyst at J.P. Morgan. Wondering why I'm here. I've taken on a bit of an expanded role covering some of these industrial software names, including PTC today. We have Ansys coming tomorrow, and I also cover Autodesk. Today we're very happy to have CEO of PTC, Jim Heppelmann, with us. As usual, we'll do a little fireside chat here, and then we'll open it up for Q&A a little later. There's also an ability to, you know, provide some questions on the event center website if you'd like me to, you know, handle those. With that, Jim, thanks so much for being here. I think for more of the generalist crowd in the room, maybe just discuss the high level, you know, macro drivers of why CAD, PLM, and then, you know, the expansion into-. Yep. ALM, which you highlighted at LiveWorx last week, what the drivers are there, why that's so exciting, why that can be kind of an above average growth story from a market perspective over time? Sure. Just real quick at a very high level, we're in a category of software called product lifecycle management, and that's both a broad category, and then sometimes within that broad category, there's a subcategory also called product lifecycle management. It's confusing sometimes. Yes. Basically, the life cycle of a product, say, an MRI machine in the hospital, is it's engineered, and that can take months or sometimes years. It's manufactured, that can take days or weeks, and then it's used by the customer and serviced and supported for decades. Engineer, manufacture, service. PTC has a set of products, about nine brands, that are used across the engineering, manufacturing, and service phase. Some of the things that make us different is we have a, you know, computer-aided design product called Creo. We have a kind of best-in-class product lifecycle management. That is the system of record for the digital product called Windchill. We have IoT solutions that are used both in the factory and out in the field. We recently acquired a company called ServiceMax, which does the service solution. Along the way, we also acquired a company called Codebeamer, which is for software. It turns out that more and more of the bill of materials of, say, an MRI machine or anything like it, is made up of software. We also have best-in-class tools for managing the software and the software development process for the software that combines with the hardware to make the product. I think we're unique in the field of ALM, SLM, best in class with Windchill. Creo is quite great. We have a SaaS strategy that's also quite a growth driver. You know, our industry is historically on-premise industry, and now the industry is kinda waking up to SaaS, and PTC is leading the charge to take the industry there. That's interesting from a growth standpoint because, whereas an on-premise seat of software might just hypothetically cost $1 per year, that same seat of software delivered as SaaS would be $2 per year. There's quite a growth opportunity associated with selling seats as SaaS, but also going back into the customer base and converting on-premise seats to SaaS seats of the same software and getting the uplift as well. One last thing is our business model's different than most of the companies we're compared to. Most of the companies we're compared to still have a large mix of perpetual software. We PTC are about 92% software, of which 98% is recurring subscriptions, whether they're on-premise or SaaS, either way, recurring subscriptions. That's a growthier model, a much more resilient model, and it's really helped the company perform well, even, when some of our peers have struggled a little bit in the recent macro time frames. Let's talk about that SaaS transition you guys are going through. Usually the term transition is thrown out for a software company. It's immediately people step back, and they're worried about it. This one looks very accretive, unlike prior transitions. You guys introduced Creo+ at LiveWorx last week. Maybe talk about how that launch, what you maybe learned from Windchill+, which is well underway at this stage of the game, how you may apply that to Creo+, and how the expansion of that, you know, may end up looking a little bit different and how that can accelerate this SaaS strategy. Yeah, the conversion or business model transition, we previously did perpetual to subscription, and that valley of death associated with that was painful, but it's well behind us now. 100% done with that. So the transition from on-premise to SaaS is just upside. Deals just become bigger. There's no downside, no accounting, no deferral of anything. So it is accretive. We launched our first main product there called Windchill+, the plus version of Windchill, last May, about a year ago. Then just last week you were there, we launched the Creo+ version of the CAD product. These things are a little bit apples and oranges. Windchill's a central enterprise information management system, big database in the sky, if you will. Creo+ is really a desktop application downloaded and managed from the cloud. What did we learn? Well, I think the key thing is, you know, our industry is excited about SaaS, but really needs to get educated a lot. We knew it would take a while to educate them. Of course, last week's LiveWorx event, our big customer event, which we hadn't been able to have due to COVID for a number of years. We had it last week. Attendance was great. We were really able to show our customers, what does it take to take your on-premise system and bring it to the cloud, and to talk about the value proposition, the extra features, functions, capability that you get as well. We're off and running, and I think the Windchill conversion is starting to show some good momentum. The Creo, of course, is just getting started, but it's actually a simpler conversion as well, so I think it'll get traction faster. Maybe talk about why it may be simple, and also, as you went through this process, with Windchill, maybe some realizations along the way, perhaps some surprises for you? Well, let me deal with the second part. I don't think we're surprised. I mean, we had said from the beginning that it's a growth tailwind, but it'll take the shape of an S-curve, which means it takes a little bit of time to get going and then should accelerate, and then many years later would tail off. We said that because, you know, it's a project to move your system from on-premise to the cloud. It's a project that has to be planned, it costs money, it takes time and resources, therefore, has to be justified, which means a sales cycle. We knew we'd have to run sales cycles with Windchill+. We did that quite successfully. We have hundreds of such opportunities in the pipeline right now being worked. you know, a few across the finish line and a few kinda headed that way. With Creo+, though, it's a lot easier because we're not moving all the software to the cloud. We're allowing people to kind of have a refreshed download like Microsoft Office works. If you use Excel, PowerPoint, Word, and you went to Office 365, it's kinda similar to the old Office, but now centrally managed, as a SaaS offering. Just different technological architectures, being pursued just given the nature of the products, one being a central database, the other one being a desk top application. Are you seeing adoption at certain customers, whether it's by size or by vertical? I know we discussed a little bit at the event last week that government customers maybe are. Yeah. a little bit further down the pipe on that. How do you expect to kind of the phasing when you look at, you know, small, medium size versus large or any kind of vertical that may be more interested in converting and accepting? Yeah. I think there's very broad interest and then pockets where it's harder. Almost let me pick on the places it's harder. Defense companies, for example, aren't that excited about moving their data to the cloud. To the extent they're going to, they have a lot of, you know, special considerations. We've deprioritized them, kind of said that's a later phase. China, you know, Chinese companies aren't allowed to use American cloud solutions, period. We'd need a whole different strategy, and therefore, we've de-emphasized that a little bit. Everywhere else, and by everywhere else, I mean retail, general industrial, automotive, aerospace, commercial, these companies are very interested in not owning the software, just using it. You know, I like to say when you go to plug in your iPhone to charge it, you wanna plug your charger into the outlet. You don't wanna have to know how the power plant on the other side is operating and how to upgrade it and so forth. You just want the electricity, you don't want the power plant. That's what our customers are saying. We wanna use the software, but we don't wanna do the care and feeding for these complex systems. PTC, if you could keep that or if we could give it back to you, that'd be great because we're just looking for the benefits. Can you provide some of the ultimately, as you look out, some of the bridge to that ARR growth that you've highlighted over the next several years? What are some of the more important factors? Obviously, the SaaS transition is one of those. Is there anything around, you know, price and volume that you expect to change as this progresses? I mean, I think if we were to bridge, PTC's been growing 13%, 14%, 15% organically, and this year you can add another 10 points or 11 points on top of that for acquired growth. If you look at the organic piece, I'd say the number one thing is expansions. Our software, we tend to get a initial implementation. The customer wants to try it out, and then they expand it and expand it and expand it. The number one driver of growth is expansions. Number two would be cross-sell. We have 9 brands, and we're always selling the second product to the customer who bought the first one, and then we're selling the third product after they bought 2 and so forth. We're very good at that and frankly have built these products that way. A third thing would probably be new logos. We're out winning new deals. Our products are very competitive. Now, a lot of times, the new logo win is small and then expands from there. The fourth thing then would be price increases. You know, obviously, we've been through an inflationary period here where we could get away with quite aggressive price increases, and people expected that actually. If you take SaaS, because of the S-curve shape, I'd say it's not a big driver of growth looking backwards. It's not a huge driver right now, but it's starting to show up. I think as we look forward into 2024, 2025, 2026, it should become a real driver, a real tailwind for growth. It'll move up that list of kinda growth drivers that I just went through. Exactly how fast, you know, we've taken a fairly conservative view so as to not get ahead of ourselves, but it should definitely be a growth driver that would either lift the growth rate of the company or offset other factors, macro or otherwise, that might be slowing us down. It would appear you guys are taking a bit of market share. Can you maybe discuss how you feel you're positioned versus your big competitors in these two areas? You know, there's a couple that stand out that are public companies that comment all the time, Siemens, Dassault, Autodesk has, you know, a business as well. Maybe if you could just talk about how you think you're positioned and differentiated versus those guys. Let's take PLM, where the difference is most stark. The PLM industry is generally said to be growing at 8%, and PTC is clipping along in the upper teens. How do you have more than double the growth rate of the industry? First of all, we have a very competitive product, the best-in-class product by far, and we definitely are winning more than our fair share of business. We are taking share. On top of that, we have a recurring business model, and we're being compared to people that don't, and that's worth some meaningful amount of growth. I characterize it as 3 points-5 points of growth right there, simply because it's much easier to grow a recurring model with sticky software than a perpetual model where you sell the big deal and then next year it goes away and you gotta resell another one just to be even again. Another factor would be cloud. You know, we're now about a quarter SaaS across the portfolio. Again, the competitor might get the $1 order, we get the $2 order. Of course, to the extent we convert $1- $2, that's a growth driver as well. Then the other factor is there's a couple of subcategories, ALM and service software, SLM, we call it. You can call it service if you want. These categories are growing much faster than the 8% of the PLM market. We also have a mix within PLM that's growthier. There's a series of factors, and the bottom line is we're not taking as much share as it would appear. We're simply configured differently. Better business model, growthier assets, and we're compared to people who are positioned somewhat differently and, you know, can't deliver from their portfolio the same level of growth we can from ours. What about on the CAD side? It's kind of a similar story on the CAD side. There, the market is growing 6%-7%, and we've been growing 10% or 11%. Again, I would give us that business model advantage. We're, you know, anytime you compare a recurring revenue model to a company doing perpetual, you know, nobody would go through that valley of death if it didn't produce this growth on the other side, right? We're through that valley of death compared to people who aren't. Some who might even be venturing into it, which, you know, hurts their reported growth. I think there again, very competitive product, better business model. The relationship with Ansys is important. That's been a growth tailwind. We embed Ansys technology in our CAD product. That's a key strategy for Ansys as well because they want to shift left, as they say. They want their software to be used not to correct bad designs, but to produce good ones the first time around. In order to produce a good design, you need our software, which is the authoring, and their software, which is the simulation, the checking and validation, if you will, running at the same time together as a single package. We license technology from Ansys, build it into our product and sell it, and that too has been a good growth driver for us. You guys made a pretty bold move with ServiceMax. You presented it last week. I thought, you know, really intuitive, the ALM strategy that you're coming at here. Maybe just talk about how differentiated and I feel forward-looking that strategy really is and how early on you see that manifesting itself in the marketplace. Yeah. If you remember, I said, you know, an MRI machine takes months to years to engineer, days to weeks to build, and it's operated for decades. During that decades of the product life cycle, you need to really be aware of what's going on with the product, what problems are developing, what parts have been changed, what service activities have been done. You might have heard this term as-maintained configuration or as-maintained bill of materials. The actual bill of materials of the product keeps changing as you swap out parts and swap in newer ones, you do software upgrades, whatever. None of the companies in our industry really had nailed this after-sale service activity. Now, ServiceMax specialized in that, so acquiring ServiceMax and bringing it into the PTC portfolio really gives us a full solution for engineering, manufacturing, and service, that, you know, none of our competitors have. I mean, none of them have the service part. They may have, you know, parts of engineering and manufacturing. It's unique, powerful, and creates a lot of value for the end customer. Maybe just talk any early on. I mean, I'm sure you guys in the due diligence investigated what types of cross-selling opportunities there were. Any early examples of, you know, of wins here or where are customers most interested? Where is the path of least resistance to customers coming together and using the full package? Yeah. Well, first, it's interesting to note that about 25% of ServiceMax customers were already PTC customers, having made independent decisions to buy from two different companies because they understand the value of both softwares working together. That's pretty good traction without anybody actually trying to make it happen. Of course, now we're promoting it. Many examples, you know, this MRI machine I picked because ServiceMax has a lot of traction in the medical device industry, and so does PTC, so there's a lot of alignment. That's like the happiest hunting ground because we're both so strong, and we just have to connect the lines together. Got it. Anywhere there's a long life cycle, complex product that's used for years or decades and requires ongoing service, you know, these are complex, highly engineered products, so understanding the design of the product is pretty important when you're trying to service it. Anywhere that happens, we've got a great connection. Are you looking to displace competitors, or is this just more kind of content from the existing customers? Yeah. In the service space, it's mostly homegrown software. Okay. Especially for these, what we call asset intensive. You know, just real quick, there's two kinds of service. One that's asset intensive, one that's not. Not asset intensive would be like if you, your home internet isn't working, and you call Verizon, and they send somebody out with a truck. The person driving that truck doesn't really need to know anything about you or your equipment because it's all commodity stuff, and if the cable modem doesn't work, they're just gonna throw it away and install a new one that they have in the truck already anyway. It's probably even a newer generation. Now that MRI, nobody's gonna throw that MRI away. By the way, if it's down, that means we didn't get today's appointments done. We had to cancel them all, and we can't reschedule them tomorrow because we got a full book of appointments tomorrow and the next day and the next day and the next day. This equipment when it goes down, is a big problem. In order to fix it, you have to have a technician that's qualified, you have to have the right parts on the truck, you have to have the right tools and the right software versions, whatever it might take, and you need to know a lot about the asset. There could be two MRI machines sitting side by side that are actually quite different, even though visually they might look the same. In terms of the parts they would need and so forth, they could be quite different. That is what ServiceMax excels at. Most of the time when customers don't have ServiceMax, they have Custom Homegrown Software. When you think about the growth opportunity there, what do you see as far as organic? Then how much can this, you know, combination add from a top? I know you're not assuming revenue synergies per se in the near term, but like, how much can the cross-selling add to that? Yeah. I mean, the expectation we set was that, post-acquisition on an organic basis, the ServiceMax software would grow mid-teens, and that as the selling synergies layered in, that would take it to upper teens or, you know, potentially a two handle. This is a business that comes in at the same growth level more or less as the company, and should over time, you know, prove accretive to growth. Obviously a hot topic, not only in technology but in the, you know, slower growth industrial companies I cover. AI, generative design, maybe talk about how you guys are positioned on that front and what you're seeing early on. It wasn't a big topic of the show last week. It was more of a sidebar. Yeah. Maybe discuss how that influences PTC. Yeah. I mean, PTC already has 3 applications of AI in the market. 1 is around computer vision to recognize an object in the real world in a camera based on the CAD models for such object. Keep in mind, we can configure the CAD models many different ways, so we can recognize many different configurations of the physical object. I'll spare you how that happens. It's very interesting though. The 2nd thing is our IoT software that collects telemetry, from example, medical devices at hospitals or clinics. It's studying that telemetry saying, is there a message here? You know, predictive analytics to try to anticipate problems and head them off before they become down, you know, failures. The 3rd is actually generative design in 3D. There's lots of buzz of course about ChatGPT. What's cool about ChatGPT is that it's easy. You provide text in, and it gives you text out. Might be software code coming out, might be written works, whatever. We have a technology that you provide a framing of a problem in 3D, and it provides you a full solution back in 3D to actually design the 3D parts for you. You might say, for example, "Here's the space I have to work with. Keep the part in within these boundaries. It needs to interface to these two bolts over here and to this bearing over here, and it's gonna have to carry a load of, you know, however, whatever force you wanna put on it. I want it to be made out of plastic, aluminum, steel, titanium, whatever, and I want it to be 3D printed or castable or whatever. You give it the parameters, and then it says, "Okay, here's the perfect design." It's really pretty spectacular because it comes up with designs that few people would have thought of actually, sort of like ChatGPT in 3D. I mean, at what stage is this product, and are you seeing a decent amount of interest? I mean, how long have you had something like this? Yeah, we've had this product in the market for at least three years. You know, it's not quite as democratic today because anybody can try ChatGPT, you just need a web browser. Whereas most of you, I'd have to explain how to model something up in 3D for you to try that. One of the things we are doing is putting ChatGPT in our Onshape software, which is used by millions of students and has a free version that everybody else could try to sort of democratize access to 3D generative technology so that a lot more people can try it and come up to speed. So far the results are meaningful. They're not transformational. I'd like to up it a little bit by improving the democratic level of accessibility to the software. Are there risks related to this technology? No. I mean, today it's a combination of AI and physics. You know, the risk would be we generate a bad design, the design fails, but we're double-checking the design with simulation, and that brings me back to the Ansys partnership. We're working more and more of the Ansys codes in there as well. You know, the other type of risk with this sort of generative AI is intellectual property problems. Like we're very hesitant to let our software engineers use Copilot, for example, to develop software code for fear that that code might actually embed copyrighted code that belongs to somebody else or it might embed malware that it learned from somebody else or whatever. It's important with our generative technology that we're not transferring intellectual property. In general, we're not, and we're double-checking everything with physics, you know, so a unique solution generally, you're gonna generate a unique solution. I'm gonna take one from online here. Are the strong deferred ARR bookings you've been talking about reflected in RPO? It looks like the dollars of RPO accelerated. Is that perhaps a more important metric with the deferred nature of bookings than just the, you know, reported bookings growth that you guys talk about at a high level on the call? Yeah. Let me say PTC does not talk much about RPO due to 606 noise. It's just not a super meaningful metric for us. The point is, when we book an order, if the order is immediately active or part of it is immediately active, that goes into ARR. The part that's not immediately active goes into deferred ARR, just sitting on the shelf waiting until time passes, and it kicks into place. For example, if a customer gave us a contract for $1 million, that in the second year grew to $2 million, in the third year grew to $3 million, and that whole $6 million was committed, we'd have $1 million, then a year later it would grow to $2 million, and the third year it would grow to $3 million. That's how that whole mechanism works. We don't provide complete transparency to it, and it'd be very hard to reverse engineer from RPO, you know, what deferred ARR is. It's just the 606 noise of recognizing upfront things that, you know, really are deferred. I think the genesis of that question really is the great bookings debate that's had, you know, that dominates the Q&A in every single call. Yeah. That I've been on. It is kind of funny because most companies don't even talk about bookings, and a lot of them don't even break out organic versus one of your favorites, doesn't even break out organic versus all-in. I think people go down a lot of levels with us and then try to reverse engineer from GAAP metrics and stuff what's going on. Bottom line is this, last year we had a record year for bookings. We've set an expectation that on an organic basis, we'll be relatively flat with that, you know, given the challenging economy and some slowdown in the SMB part of our business here and there. Nonetheless flat with a record year on the bookings front. Churn is phenomenally good, meaning we set an expectation that maybe churn would get worse, actually it got better, which is kind of what we thought would happen, but we're allowing for a macro surprise there that didn't happen. On top of that, we have the inorganic bookings, this Codebeamer ALM acquisition. We've been clear that's just doing exceptionally well. Pile on top of that, the ServiceMax. We'll definitely for the year, we'll have record high bookings, record low churn, and ARR growth somewhere in the low to mid-20s and free cash flow growth somewhere in the low 40s is what it looks like right now. As far as just the macro tone, I know it wasn't a big point of discussion last week, really more of a focus on the technology, which was great. What are you hearing from customers, whether you're walking the hall here talking to people or, you know, at the customer event last week? Yeah. Where are people's minds at when it comes to macro? Well, I think for the last 3 quarters we've talked about, and I mentioned it here, some softness in SMB, pockets of SMB. Counterbalanced by real strength in some areas. You know, one of our biggest verticals was aerospace and defense, and that's a very, very good business to be in right now. We have customers with names like Lockheed Martin and Raytheon or RTX that are really just on fire right now, and they're ramping their business up, and that requires more software and so forth. Automotive is pretty hot, in particular ALM in automotive because of all the software that's coming into automobiles. Industrial is generally pretty strong. The pockets of weakness... For example, we have this Arena software that's largely sold to high-tech startups. High-tech startups are being told to hoard their cash because you can't do an IPO, you don't wanna raise a down round, and you can't really borrow money at these rates. Just like slow down your burn rate. That slowed us down a little bit, but it's really just a fairly small pocket that's maybe slowed our bookings growth a little bit, but not that significantly given kind of the overall circumstances, for example, where the PMI is at right now. What is that like, the SMB side, the 10% of your business? Uh- 15%? Yeah. I'd say our resellers are generally viewed as 30% of our business. Now they don't only sell to SMBs, and we have some other... let's call it 25%. Okay. Got it. Any questions in the audience? We have a bit of time left here. Okay. You mentioned the strong cash growth, and I think you guys were visionaries, if I can use that term On cost and cash. Maybe talk about the drivers of your margins and what are your plans... You guys really slowed actually, I mean, for a tech company to barely grow headcount is a big deal, that happened last year. As you look out, are you kind of back on the normal path of headcount additions? Maybe just talk about that a lot. Yeah. Well, maybe. You know, Steve, I've been the CEO, I'm in my 13th year right now, and during that timeframe, our margins have gone from 13% to coming up on 40%. There's been a lot of margin expansion. I think Christian and I are kindred souls in that, you know, whenever we see an opportunity to make some part of the business more efficient, we go after it. What we did, six and eight quarters ago wasn't because we had a crystal ball and could see a bad economy coming. It was really because we saw an opportunity to drive some efficiencies and went after it. Right now, you know, when we did see, let's just say, the overall situation getting a little bit tighter, we were very careful on spending. However, having finished the first half of our fiscal year and pretty good, strong outlook for the back half or, you know, at least a solid outlook, we're spending a little bit more money, hiring a few more people, but still, you know, taking a conservative posture. Our goal is to be the growth leader and the margin leader in our industry. We're pretty much there on growth and closing in on margins. Just wanna run a great company. What do you consider to be kind of a normal level of headcount addition over time? I think the rule of thumb that we use is that we'd like to grow our OpEx at about half the rate we grow ARR. If we grow ARR 14%-15%, we'd grow, you know, OpEx 7%-8%, something like that. That's kind of our calculus, if you will. We plan each year, given the circumstances, much of our business doesn't scale with ARR. I mean, the cost doesn't scale. For example, the number of engineers we put on a product isn't directly related to how much of that product we sold last year or how much we forecast to sell this year. You know, the number of finance people is not related. There are some places where we do scale. For example, headcount in sales might be tied to bookings growth. We might make strategic investments here and there. Of course, we have cloud costs that do scale with ARR. Nonetheless, we feel like this rule of thumb of grow OpEx at half the rate of ARR would keep us expanding margins for some years to come and would keep the free cash flow growth in a very strong position for years to come. It's pretty funny because obviously I have a little bit of a different lens, you know, cyclical for my core group that I covered versus the software guys. I mean, people seem to be worried about the cyclicality of your bookings in your business. When I look at your business with 90% recurring, I mean, it looks like it's, you know. Yeah. almost, I mean, as close to bulletproof as you can get. I think you're right. I mean, the word cyclical really does not apply to PTC. I mean, you can say it, but if you go check the data, it's just not there. We used to be tied to the PMI, and the PMI has been in a, you know, worsening place, for, I don't know, six, eight quarters now, and our business has been quite strong. I think it really is that we have this big book of ARR. We're adding bookings in one side, a small amount of churn in the other. It's a great business model. You know, to stop growing, actually bookings would have to be less than churned. Right now bookings are a multiple higher than churn. It would have to get very, very, very bad for us to not grow, and it's inconceivable that that would happen even in a very difficult macro environment. It'd have to get much, much, much worse than it is right now. Even if that scenario happened, we of course would cut costs. I think our view is, we're gonna have strong growth on the top line and bottom line for years to come, somewhat independent of the economy. I mean, a good economy is helpful, but even in a bad economy, we're gonna keep the top line and bottom line growing. Sorry. Yeah. We have a question up front here. We just need the mic to come up. Sorry. Just give us 5 seconds here. Sure. Thank you. You mentioned churn. What is your churn? What's the cause of it? I would imagine it's come down quite a bit as you've moved from On-Prem to in the cloud over time. Yeah. Our gross churn is around 5 percentage points, gross churn, so not including upsell and so forth. The main driver of that is some of our products are less mature and more cutting-edge new technologies with higher churn rates. Our core business is actually significantly better than 5%. When you average in, for example, let's say augmented reality technology, they get more customers kicking tires and trying stuff, and maybe they didn't quite get it right. Anyway, across the portfolio, it's about 5%. Some newer products, more than 5. Some more mature products, much less than 5. I'll repeat it in the mic if it's not working. The Ansys partnership seems pretty significant to you. As you kind of think through your ecosystem, you know, whether it's in factory automation, PLCs, et cetera, or wherever, where do you think the other significant kind of ecosystem partnership opportunities are that are as impactful as Ansys, just on a more broad-... Yeah. Well, in the. kind of vertical. In the factory space, we do have a partnership with Rockwell Automation. Keep in mind that in the, you know, the manufacturing part of our product lifecycle, one of our competitors is Siemens. Siemens has a massive industrial automation business. We went out and recruited Rockwell as a PTC partner to give us a big brother, if you will, with expertise, complementary products, everything else, distribution capabilities, customer base. That was the other place. I know we're running out of time here. Real quick, the other place is Salesforce. You know, the ServiceMax software runs on the Salesforce cloud. We have kind of a natural partnership blossoming there too, where every time we get an order, you know, we're basically paying them some royalties for the runtime cloud that's underneath it. Microsoft is the other key partner, you know, our hyperscaler in the background. Great. I think we're out of time. Jim, thanks a lot. Yeah. Thanks, Steve.