MobileIron, Inc.
Q1 2020 Earnings Call Transcript

Published: 29 Apr 2020

[Operator:]

Welcome to the MobileIron First Quarter Fiscal Year 2020 Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. [Operator Instructions]I would now like to turn the conference over to Erik Bylin. Please go ahead.

[Erik Bylin:]

Thank you, operator. Good afternoon, and welcome to MobileIron’s first quarter 2020 financial results conference call. Joining us from the Company are Simon Biddiscombe, CEO; and Scott Hill, CFO.The format of the call will be remarks by Simon, then Scott will provide details on the financials. We’ll then have time for questions. If you’ve not received a copy of today’s press release, please go to MobileIron’s Investor Relations website at investors.mobileiron.com.Today’s conference call contains forward-looking statements that involve risks and uncertainties, including statements regarding MobileIron’s revenue, operating expenses, GAAP and non-GAAP financial metrics, product releases, projections and trends. All of these forward-looking statements are subject to a number of significant risks, uncertainties and assumptions. Actual results could differ materially from the statements made on this call. Please see the Risk Factors section of our SEC filings. All statements made on the call are made as of today. We assume no obligation and do not currently intend to update any such forward-looking statements. If this call is reviewed after today, the information presented during this call may not be current or accurate.With regard to non-GAAP financial metrics, while we believe them to be helpful in understanding MobileIron’s financial performance, they’re not meant to be considered in isolation or as a substitute for comparable GAAP metrics. They should only be read in conjunction with MobileIron’s consolidated financial statements prepared in accordance with GAAP. Reconciliation of the non-GAAP financial metrics to the GAAP metrics can be found in our press release and on the Investor Relations page of our website. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project certain charges and expenses. Unless otherwise stated, results shared today will be non-GAAP.At this time, I would now like to turn the call over to Simon. Please go ahead.

[Simon Biddiscombe:]

Thank you, Erik, and good afternoon.In my remarks today, I will share how COVID-19 has affected our business, provide a brief overview of our first quarter financial performance, comment on today's acquisition and then share some recent customer successes.To start, I want to touch on how the COVID-19 pandemic has affected MobileIron and how we are helping our customers. First and most importantly, I am thankful that our team is safe and healthy and we remain at full force as a Company. I’m proud of our team for their flexibility and continued efforts, strengthened MobileIron as a company, even in the face of extraordinary adversity.And if anyone ever doubted the relevance, urgency and value of the MobileIron offering to enterprise customers, the coronavirus pandemic has delivered an ambiguous confirmation. Virtual work requires end-to-end security, whether issuing more corporate-owned devices or enabling a BYOD program for employees who are now at home and who need to connect securely and seamlessly to corporate applications. This is exactly what MobileIron reliably delivers.As the dimensions of the pandemic first came into view and remote work was becoming the norm, we assembled our North American and EMEA customer advisory panels composed of some of our largest customers to understand what they were going through and how we could help. We heard two messages very clearly. First, we are central to their efforts to keep their employees connected and secure; and second, MobileIron customers enter this era of virtual work confident in our solutions, because our products just work, an absolute imperative in this environment.We quickly launched our work-from-home campaign, which was centered around enabling a remote workforce globally. The campaign was designed to help both current customers and prospects to support the needs of their employees. As part of this campaign, we made new seats free until mid-June, so enterprises could deploy without delay. In addition, we released content to teach it admins every step of enabling a new remote workforce. In concert with these efforts, we launched a marketing outreach from social to search to webinars to ensure the message that MobileIron supports work-from-home spread rapidly and widely. We currently continue to see a strong reception from these initiatives.In addition, customer by customer, we've checked in with our customers to ensure that they have what they needed for us to support their challenges. Along with staying tightly attuned to the evolving situation, we have and will continue to maintain close contact with our customers and partners to understand how their needs evolve.MobileIron has always had a strong footprint in regulated industries, and we're seeing broader use of our technology across verticals such as financial services, energy, government, and importantly, healthcare. Not only are we enabling work-from-home, but MobileIron technology is being used to enable fundraising, patient care and even to help patients sick with coronavirus to communicate with their families. In one instance, MobileIron teamed up with a channel partner and displayed our innovative spirit in the face of a vital need and turned MobileIron managed Android devices in the hotspots for school district to help underprivileged families access the internet to enable school-from-home.With all said, the shelter-in-place mandates across the globe have disrupted our normal go-to-market activities for some of our ARR drivers. The priorities of IT leaders have clearly shifted. And while in January and February we were having robust conversations about eliminating passwords with zero sign-on and modernizing our customs architectures by moving to the cloud, the focus of IT leaders shifted to ramping a remote workforce. As a result, the realization of certain ARR growth opportunities is delayed until the immediate sense of crisis is replaced by a new normal.Digital transformation within the enterprise immediately accelerates when our customers enable their workforces to be productive, when virtually every interaction is digital. IT leaders have unprecedented influence to drive technologies that enable people to connect. In this environment, I believe MobileIron, a trusted vendor of secured communication between employees and on-premise and cloud services is becoming even more strategically critical.In a new normal, there's a wide industry analyst consensus that IT will enable more employees to work remotely. And as IDC notes, reliable authentication, VPN, data protection and the endpoint management will be highly valued.With our endpoint footprint, it is clear, our lightweight UEM, threat defense and zero sign-on deliver this to the new world. In particular, highly regulated verticals like government, healthcare and financials will be forced to move faster. And these are verticals our solutions thrive in because of our unmatched security posture and certifications.Now, I'll provide an overview of our first quarter results.Revenue in the first quarter was $49.7 million, above the high end of our guidance range and up 3% year-over-year. ARR growth came in at 8.2% for the quarter. We did an excellent job managing spend in Q1, and that produced favorable results in gross margin and operating expenses. With this, we strengthened our balance sheet and added more than $4 million in cash to end the quarter at just under $100 million in cash. We continue to have no debt.Last quarter, we shared how we would accelerate our transition to a subscription-led recurring revenue model. This entails two changes to our business in 2020. We'll stop selling new perpetual licenses as of the end of Q2, and we formally launched our efforts to proactively help customers move their MobileIron capabilities to our cloud solution. Each of these initiatives align with trends we have seen with both our customers and the market at large. It was clearly evident that customer preference has shifted in recent years, increasingly away from perpetual licenses toward our subscription model and in cloud in particular, a pattern also reflected in our revenue and ARR trends. In Q1, our cloud revenue grew 22%, while our perpetual license declined 24%.Additionally, in the first quarter, we saw some promising signs regarding our initiative to support our on-premise maintenance customers and their effort to move to the cloud. This began to slow in March as customers' priorities shifted.Turning now to today's acquisition announcement.I'm very pleased to announce that we have a acquired incapptic Connect, a leader in mobile app release software, which is a critical component of application development and distribution. incapptic was an offering in our marketplace and we saw significant interest in the solution across multiple verticals.incapptic automates the process of validating the app as ready and then publishes the app to the enterprise app catalog and public app stores. The process normally sought with inefficiency in most enterprises.Coupled to MobileIron, an IT department can publish the app with incapptic technology and then leverage UEM to automatically deploy the app to the workforce’s mobile devices for instant use, creating a turnkey solution.From a technology fit and integration to the selling to the same IT buying center’s UEM, this is an extremely synergistic combination, and I'm thrilled to welcome the incapptic team to MobileIron.And with that, I would like to touch on some customer wins in the quarter.I'm pleased to share that we closed a new deal with Avery Dennison, a global leader in materials science and manufacturing, to protect their business data across their numerous mobile devices and apps. A Fortune 500 company with over 30,000 worldwide employees, Avery Dennison selected our cloud, access, and threat defense offerings, fully embracing our zero trust security approach.MobileIron’s ability to offer intelligent authentication and a seamless user experience while keeping important business data secure will enhance their productivity and fundamentally change the way they can work, and fact that MobileIron can play a role in helping this business continue to operate efficiently with the utmost security.It is clear that the ongoing crisis is necessitating the improvement of companies’ technology and mobile infrastructure, and this transition takes -- needs to take place quickly. MobileIron is honored to announce that one of its longtime customers, a prestigious Midwestern medical center that prides itself in providing best-in-class patient care, decided in the quarter to expand their relationship with us. These healthcare workers are fighting on the frontlines to protect the health and safety of the public. And I’m honored that MobileIron is able to assist with this battle. Through our cloud offering, they are able to streamline their clinical communication workflows for the COVID-19 response center by simplifying access to important medical data to iPhone's. I'd like to offer my sincere thanks and gratitude to health workers at the forefront of this pandemic.We're excited to announce that we expanded our long-term relationship with Ball Corporation, a Fortune 500 provider of metal products and then beverage packaging to aerospace. No stranger to MobileIron, Ball has been a customer since 2012, and in Q1 they decided to add access and MTD to strengthen their mobile security posture. For a company with a global workforce over 18,000, they became increasingly aware of the need to secure all of their best-in-breed cloud services, and protect against external threats. Thanks to MobileIron’s streamlined user interface, simple rollout process and our strong mobile threat mitigation capabilities, it was an easy decision for Ball to make. Founded in 1880 and with the rich history, Ball clearly understands the importance of keeping up with the changing times. And I'm honored that MobileIron can help secure their workforce for the next chapter.And finally, we announced the deal with CNP, Spain's National Police Corps. Mission of CNP is to protect Spanish citizens’ rights and freedoms along with their safety. CNP is well aware of the integral role that state-of-the-art mobility solutions play in helping the men and women of the police force carry of their vision. Behind the strength of our MobileIron core product, the only EMM product compliant with Spain’s national security scheme defined by their central intelligence agency, the CNP saw an opportunity to modernize tools used by the national police. This deal speaks volumes about MobileIron’s best-in-breed offerings, and I'm on it that MobileIron can be the cornerstone in CNP’s transition to a modern wave of work.And with that, I'll turn the call over to Scott.

[Scott Hill:]

Thank you, Simon, and good afternoon.Today, we will be discussing non-GAAP financial measures unless otherwise noted. Our press release, Form 8-K and website, investors.mobileiron.com provide a reconciliation of GAAP to non-GAAP financial results.Now, I’ll review the financials.Revenue in the first quarter was $49.7 million for growth of 3% year-over-year and $700,000 above the high end of our guidance range. Revenue was led by cloud, which grew 22% and was almost 40% of total revenue. We continued to see progress in the U.S. where revenue was up 8% year-over-year. We ended the first quarter with ARR of $181 million for growth of 8.2% year-over-year. Our subscription ARR was $115 million, up 15% year-over-year and our maintenance ARR was $65.5 million, down 2% from last year.As a reminder, beginning this quarter, we have moved from reporting the seat renewal rate to dollar-based net retention. We believe this standard SaaS metric is a more complete measure of retention and highlights our success upselling our products into our existing customers. Our dollar-based net retention came in at 103%.Gross margin in the first quarter was 80%, above the high end of our guidance. And operating expenses were $43.7 million, below the low end of our guidance range. Gross margin upside was in part driven by higher than expected sales of perpetual licenses and favorability in operating expenses was largely a result of work-from-home activities. We reported an operating loss of $4 million. Net loss was $4.5 million or a loss of $0.04 on a per share basis.Moving to the balance sheet.We ended the quarter with $99 million in cash and short term investments and have no debt. In the first quarter, cash flow from operations was $7.2 million and we spent $700,000 repurchasing shares. Unearned revenue was $114 million at the end of March, up 11% from $103 million a year ago.And now, I'll discuss our outlook.As Simon mentioned, the work-from-home mandate brought about by COVID-19 caused headwinds to some of our ARR growth drivers beginning in March. Because there is still considerable uncertainty around the timing of a return to a more normal sales environment, we feel it is prudent to withdraw our full year ARR guidance at this time. However, given our strong first quarter results and recurring revenue base, we see no reason at this time to change our original revenue and operating margin guidance for the full year.For the second quarter of 2020, our guidance is as follows

[Operator:]

[Operator Instructions] Your first question comes from Chad Bennett with Craig-Hallum.

[Chad Bennett:]

Great. Thanks for taking my question, guys. And hopefully, everybody's staying healthy. It sounds like it is. Nice job on the quarter, executing in a tough environment. I guess, first for Simon, kind of what are the puts and takes? I mean, in terms of you cite in the press release which you're not the only one that go-to-market activities, you've seen some delays there due to the environment we're in. But also, I mean, you seem like the primary beneficiary of work-from-homes in the state you live in. And, I would think that cloud transition that you guys are heading into, this would only potentially accelerate that. Can you just kind of give me some sense of the puts and takes in terms of how you -- what you're seeing in the pipeline, if anything's changing there?

[Simon Biddiscombe:]

Sure. Thanks for the kind remarks. And I hope you are all safe and healthy as well. Yes. Look, as I said in my prepared remarks, virtual work, work-from-home, remote employees, however you want to characterize it, requires end-to-end security, and that's exactly what we deliver. And customers have been relying on us for years to make them successful. And they're relying on us more today than ever before as it relates to driving those remote workforce initiatives. And they know they can trust us as it relates to delivering for them.Our technology is more strategically critical than it has been an extended period. And that's especially appropriate, as you pointed out, Chad, for the UEM set of capabilities. So, that UEM capability becomes that much more critical component in enabling a remote workforce. And the UEM business was ahead of plan in Q1, and we expect it to be ahead of plan in Q2 as well.And then, additionally, we’re actually pleased with the programs we’re running, the very specific campaigns associated with work-from-home and the fact that that generates an incremental pipeline that will contribute, not only in the near-term but in the long-term as well.So, now, to your specific question relative to the cloud component. The vast majority of our new logos are on the cloud platforms. But, if you think about our existing customer base, there is still a tremendous amount of that that is on a maintenance agreement and an on-prem solution in many instances. And as those customers expand, we're obviously not going to see an ARR uptick beyond the maintenance component, but we will continue to see more perpetual license from that set of customers.Where I'm more concerned is as it relates to those kinds of transformational initiatives that our customers have begun embarking on, where we're starting to see them slow down. Every CIO I talk to, every significant customer’s focused on enabling remote workers and making sure that the experience the worker has as they're at home or in their remote location is as perfect as it possibly can be. And we've got customers who are asking us to actually slow down the release of the new versions of the UEM set because they want to guarantee there will be no disruptions to their employees and their work-from-home experiences. So, it's a combination of things.The biggest drivers in ARR in the back half of the year that we talked about previously, core to cloud transitions and on-prem cloud transitions. And then, the zero sign--on technologies. Yes, those initiatives are certainly getting pushed as our customers are more focused on driving the work-from-home scenarios. But UEM has certainly benefited from that. But the biggest part of the installed base is obviously on-prem and driving maintenance and driving [Technical Difficulty].

[Chad Bennett:]

Okay. Maybe a couple of quick ones for me after that. I know, Scott mentioned I think fairly decent performance out of the U.S. team. Can you just comment on EMEA, and if we're seeing any kind of improved execution there? Obviously, it's a challenging environment in Europe right now. But, are we seeing any improvement out of the EMEA team?

[Scott Hill:]

So, the EMEA is sort of pretty much similar situation to what we have. We haven't seen improvements. Obviously, we had slight growth for the quarter in terms of revenue standpoint, but the situation in EMEA has largely been the same in terms of its potential performance.

[Chad Bennett:]

And then, last one for Scott. Scott, it's good to see the dollar and net expansion metric come out. I guess, in terms of -- I know you don't want to kind of look backward looking on that metric. But, if we think about the core UEM product and then the upsell of the other two major products, MTD and access, would you expect that net expansion number of 103 to improve from where it is or is there some risks that in the current environment, the churn aspect of that number is more of a headwind? Thanks.

[Scott Hill:]

Yes. Thanks, Chad. It's really -- that number is a function of both, our -- kind of our core UEM business, which as Simon highlighted is exceeding our expectations at this point; and the upsell products that we have in cloud, which are the ones that are being challenged in terms of the timing. So, my expectation is that that metric will track ARR. And as we guided Q2 ARR, it's down slightly from what we have midpoint of guidance is down slightly from what we had in Q1.

[Operator:]

The next question comes from Raimo Lenschow with Barclays. Please go ahead.

[Raimo Lenschow:]

The first question I had is like, if you think about like ARR guidance versus revenue guidance, can you talk us through that? Because the ARR shifted to kind of the more steady number versus like because it's all predictable revenue. So, you moved that, but could you kind of keep the revenue -- can you talk a little bit about your thinking and your dynamic there? And then, Scott, like operating cash flow Q1 was really strong. Can you just kind of call it a little bit of what you saw in Q1 and what it means for the rest of the year? Thank you.

[Scott Hill:]

Sure. So, let me take first stab at both of those. So, first off on ARR versus revenue question. So, revenue obviously picks up our one-time revenue that we have, which is primarily perpetual license. And as we talked about, kind of the strength we see in UEM relative to our expectations, revenue is a beneficiary of that. The second thing is revenue obviously is a function of the deferred revenue that we have coming off the balance sheet from our subscriptions that we booked over the last 12 months. And so, all of that carries forward into the second half of the year with basically a bit of a momentum that we've had here, both in terms of UEM and what we've done in the past.ARR on the other hand is more -- obviously, it's driven largely by subscriptions and our cloud business. Our cloud business has those upsell products, the transformational offerings that Simon mentioned. And so, those are the ones that we have, I guess, a bit more concern for regarding the timing of when those come to be. So, that is the dynamic between those two metrics.In terms of cash flow from the quarter, yes, it was strong. It's seasonally strong in Q1 as a result of the business we book in Q4. And we just had relatively good quarter in terms of collections on that particular front. That was a strength.

[Raimo Lenschow:]

Yes, okay.

[Simon Biddiscombe:]

Raimo, I'm going to add one thing to it, because I understand the concern about the one-time revenue and the lack of predictability that that can have at times. Don't forget, we have said we're going to stop selling perpetual on June 30th. So, my expectation for one-time perpetual revenue after June 30th, is essentially zero in the back half of the year. So, you take away a lot of what caused the historical variability by not having it in the plan for the back half.

[Operator:]

Your next question comes from Scott Searle with Roth Capital. Please go ahead.

[Scott Searle:]

Good afternoon. Thanks for taking my questions. Nice job on the quarter, nice job on the outlook. It's good to hear you guys are doing well as well. Hey, Simon, just to dig in a little bit more on the work-from-home opportunity. Could you take us through what that does to the opportunity in terms of pricing, number of devices that are covered, and also in terms of how that backlog is building? Now, you said you won't be billing until June. So, what kind of a pipeline of incremental subscriptions you have that's building our work-from-home market?

[Simon Biddiscombe:]

Yes. So, let's start with the highest level question, Scott, which is what is the penetration rate and how are we seeing that change at this point in time. Right? So, if you look historically, we will -- most recently, we said that the penetration rate of our technologies into our existing installed base of customers is somewhere in the 40% to 45% range. So, of the employees and our customers, 40% to 45%, were using MobileIron technology. So, there's significant upside opportunity associated with that set of customers, as we move forward.Now, we've got certain assumptions around what that penetration is going to be. But, it's -- even today, it's too early to know exactly how that's going to play. We want more and more data points around how our customers are going to continue to use our technology as we move forward. Part of the it is -- part of the subset of customers is using the technology essentially for free, until June 15th at this point in time. If you're an existing customer, you are able to ramp back without necessarily coming back to us. Now, and if you're on cloud, we can see it; if you're on the on-prem product, we can't necessarily see if you've added more devices to the technology and so on.So, there's still significant upside associated with penetration that we can achieve in the installed base. Okay? And then, the programs themselves, based on what I know from the specific opportunities that we're tracking on a day to day basis, offer significant upside, both in the installed base, but also with new logos as well. There's a big piece of the work from home campaign pipeline that’s in new logos at this point in time. And that's primary cloud, and primarily, obviously subscription at that point in time.

[Scott Searle:]

Got you. And Simon, but the ARPUs with that should be going up as well. Is that correct? Because you have an attach rate of additional services beyond just basic UEM? You have access…

[Simon Biddiscombe:]

Yes. Unless you've got a really basic email or any kind of use case, the likelihood is you're buying something more than just our most basic set of capabilities. You're buying something like our Platinum bundle, and then you've got upsells associated with threat and the zero sign-on access based technologies in addition to that as well. So, yes, we're not seeing any ASP challenges at this point in time. That’s for sure, Scott.

[Scott Searle:]

Got you. And just quickly on the acquisition, incapptic. It sounds like you're able to build out your ecosystem there a little bit more and basically accelerate throughput in terms of bringing in and expanding that ecosystem and applications to marketplace. How big was it? Can you give us some financial metrics around it or number of employees or something just to provide a little color? Thank you.

[Simon Biddiscombe:]

Yes. No issue. So, it's a classic example of a technology tuck-in. It's going to cost us $6 million. That's a very small amount of the total cash in the Company that will be put to work for incapptic. And as I said in my prepared remarks, what incapptic does actually automate the process of validating apps and making sure that they get published into the various different apps those that are necessary. Now, we've always been part of that process, Scott. If you're publishing into an enterprise app store, AppConnect, our app wrapping technology is often a part of how companies did that. And this technology that incapptic has sits highly adjacent to that specific capability.So, if you think about it now, you get an app from an internal development team or you get it from an app design studio, whoever it may be, and then it falls on IT’s desk to make sure that there is app sanity, it's not maintaining -- personally identifying information and so on. You’ve got the app signing process, you've got the app wrapping process, you’ve got security processes and then you've got to deploy it. And what the incapptic solution does is allow that -- the orchestration of that in a much cleaner way than you otherwise could. Okay? So, it's a very adjacent technology, classic technology tuck-in, great example of something we're going to be able to take to our existing customer base. And we've already closed the deal under the arrangement.The second part of your question, I'm not going to talk about how much revenues is presumed as de minimis at this point in time. In terms of the number of people, it's about 15 people in total that we'll be bringing into the organization.

[Scott Searle:]

Okay, great. And lastly, if I could, just on the zero trust front. It sounds like, given the current climate, things slide a little bit to the right in terms of deployment and timeline. Could you just give us your broad-based thoughts on when we should expect to see and hear a little bit more about that? And thanks, and I'm glad you guys are -- it sounds like you're healthy and safe and continue to do so. Thanks.

[Simon Biddiscombe:]

Yes. What I don't want to give you the impression, Scott, is that we're not aggressively continuing to develop. We are moving ahead 100% on everything we're doing around zero sign-on, devices identity at this point in time. Customers are a little slower responding to it at this point in time. So, we'll update you again in 90 days, obviously, on the progress that you've seen. We've actually had some milestones over the course of the last few months. We've got customers using the newest features of zero sign-on, including some things associated with Mac as opposed to iOS and Android devices and so on. So, we've got some new features that customers have started to adopt. But, we'll update you in 90 days on what we're seeing from an overall trajectory perspective.

[Operator:]

Your next question comes from Robert Majek with Raymond James. Please go ahead.

[Robert Majek:]

Good to hear everyone is well and healthy. And congrats on the solid results this quarter. Simon, could you just help us understand any potential expansion within your existing customer base or customers going to you and materially adding licenses right now in this COVID work-from-home environment? And if so, are these longer term contracts or are you offering shorter term contracts? And how was your pricing strategy on these new seats, perhaps relative -- different perhaps relative to what you might have charged prior to COVID?

[Simon Biddiscombe:]

Yes. There's no -- I'll do the second piece first and then I'll do the first piece. So, there's no change in pricing strategy at this point in time relative to pre-COVID and post-COVID, other than the fact that in order to get customers onto the platform and able to enable their workforces quickly, we made the product free for the period of through June the 15th. Right? So, we made the product free just to get people move in, make it easy for everybody to get their workforces at home, safe and secure and so on.In terms of -- ask me the first part again, Robert. It was penetration, right? What are we seeing in pipeline and so on?

[Robert Majek:]

Yes. Are you seeing that pickup right now?

[Simon Biddiscombe:]

Yes. We are, absolutely. No. We absolutely are. And that’s at the heart of the performance of the UEM business and the guiding Q2 specifically is the fact that we're starting to see customers continue to expand their footprint with our technology. And, as I said, it's especially relevant in highly regulated industries, your industry, what we’re seeing in government, what we’re seeing in healthcare and so on. Those are the customers who -- when they move to a remote work, have to make sure that information is secure. And that's where we're seeing the greatest opportunity at this point in time.

[Robert Majek:]

Thanks, Simon. Just one more for me. Are customers asking for concessions for perhaps price cuts, better payment terms or reduction in volume agreements, how are you handling those requests, and how may that impact cash flow for you this year?

[Simon Biddiscombe:]

So, I'm going to -- I'm actually going to say, I haven't seen it, Robert. But, I'm going to ask Scott as well. Scott sees more of the tactical details behind transactions. I don't think, we've seen it, Scott.

[Scott Hill:]

No, we haven't. Our working capital ratios in Q1 were consistent with history. We've had a few one-off requests for some flexibility around payment terms. But, it has been pretty much ad hoc.

[Simon Biddiscombe:]

What I would add though, Robert, is we're very cognizant of -- by vertical where our revenue streams are, where our receivables are, and so on. And while this business has always been strongest in highly regulated industries and government and so on, we do have customers that fall into verticals that are going to be under pressure. We don't have much in aerospace, for example, we don't have much in hospitality. But, we’ve got retail as part of the customer base. That's certainly going to be in some form of pressure in the near-term and so on. So, we're very cognizant of the fact as a part of the revenue stream that may have not only collectability issues associated with it, but no questions about long-term sustainability of some of these businesses.

[Operator:]

There are no further telephonic questions at this time. I'll turn the call back Simon Biddiscombe for closing remarks.

[Simon Biddiscombe:]

Well, thank you for attending today's call. We hope that you all remain safe and healthy, given this very difficult time. And we look forward to updating you on our progress again next quarter. Thank you again for attending. Bye, bye.

[Operator:]

This concludes today's conference call. Thank you for joining. You may now disconnect.