Earnings Transcript for TMV.DE - Q4 Fiscal Year 2021

Operator: Welcome to the conference call of TeamViewer AG. At our customers’ request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. May now I hand you over to Robert Hildebrandt from Investor Relations who will lead you through this conference. Please go ahead.

Robert Hildebrandt: Good morning and welcome to the TeamViewer Fourth Quarter and Full Year 2021 Results. In a minute Oliver Steil, CEO of TeamViewer and Stefan Gaiser, our CFO will take you through the business and financial update with the 2021 highlights. As always, we will conclude today’s call with the Q&A following the presentation. Before we start, a little housekeeping exercise for today, I would like to remind you of the note on the forward-looking statements that you find on page two of the presentation. Let me now hand over to Oliver.

Oliver Steil: Thank you, Robert. Good morning. Thank you all for joining today. We are pleased to take you through the team, your fourth quarter and full year 2021 results. I will start with an update on our business followed by Stefan who will present our financials and as always, we will conclude today's close Q&A following the presentation. Before we dive into the fourth quarter and full year business update, I'd like to take a step back from our perspective 2021 was marked by several strategically important decisions which we made to foster TeamViewer future growth, but also have caught by a few challenges, which we clearly had to acknowledge. We have however, been working hard to address these. And we remain committed to continue that path and also create value for our shareholders as demonstrated by our announcement this morning, and the progress we made in Q4. Hence, we are pleased with the conclusion of the financial year as we fully delivered against our revised guidance and further strengthen the foundation for long-term profitable growth. And we will show you detailed overview of all those KPIs later in the presentation. With record growth rates, our enterprise business has again proven to be a strong driver. With the acquisition of Upskill and Viscopic, both leading players in the dynamic Augmented Reality industry. We further strengthened and diversified our solutions portfolio, and at the same time, also our footprint in the United States. In addition, we initiated several new major strategic partnerships. In our SMB business, we successfully retained a significant part of the customers that we won during the pandemic. We further improved our churn rate throughout the year and increase the ASP. Finally, we made major progress on our improvement program ReMax which we will update you on later in more detail as well. Our strong development in 2021 combined with our highly attractive cash profile opens up venues for further value generation for our shareholders in the future. We revised our capital allocation and announced this morning a share buyback program of up to EUR 300 million or a maximum of 20 million shares which is equivalent to nearly 10% of our outstanding shares. This should be completed within 2022. Stefan will walk you through the details of this program in a moment. If we go to the next slide Q4 and the fiscal year 2021. At a glance, let me summarize some highlights of the fourth quarter and also the entire financial year. First of all, we increased total billings by 19% year-on-year to EUR 548 million with accelerating billings growth in the fourth quarter. With a clear focus on cost containment, we were also able to maintain high profitability and to achieve margins ahead of our revised guidance. With a growth rate of 75% and billings of almost EUR 100 million in the last 12 months. The enterprise business is now clearly a substantial growth engine of TeamViewer. At the end of ‘21, the enterprise business accounted for 17% of total billings. In addition, we increased our net retention rates in the fourth quarter significantly to 105% after a notable dip in the first half of 2021 with net retention rate of around mid-90s. And this leaves TeamViewer with an average net retention rate of 98% over the past 12 months, underlying our success in building lasting customer relationships. At the same time, our subscriber churn rates further improved to 14% compared to 15.1% in 2020. This confirms our ability to retain the strong intake of customers, which we won from the COVID-19 pull forward demands in the previous year. At year end, we counted 627,000 subscribers, which is an increase of 7% compared to 2020, or roughly 43,000 more subscribers. And furthermore, our financial profile remains very strong with again lower leverage rate. Now let's look at 2021 in more depth. First of all, I would like to give you an overview of how the two businesses have developed in 2021. Before we then take a closer look at both the enterprise and SMB separately and in detail. Coming to enterprise, as a reminder, we define enterprise customers as those with invoice billings across all products and services of at least EUR 10,000 within the last 12-month. Customers who exceed or fall below that threshold are reallocated then accordingly. And as you can see, on the left hand side, our total company billings increased year-on-year by EUR 88 million to EUR 548 in 2021. And although our SMB business still contributed most of this absolute growth, the enterprise business is rapidly becoming more material. It contributed only 26% of the overall growth in 2020. And now almost half of the growth in 2021. This underpins our success in building a leading enterprise business that is delivering strong and sustainable growth. The chart on the right hand side shows additional proof the enterprise business achieved high billings growth rate throughout 2021 and actually accelerated nicely during the year after somewhat slower start due to the COVID retention and right sizing issues in the first quarter of 2021. For the year as a whole, the enterprise business grew by 75%. The SMB business also grew nicely in the fourth quarter with 9% and 12% for the year respectively. Let's not forget that our SMB business serves as a very attractive funnel for the enterprise business and we have been extremely successful in converting SMB customers into enterprise customers. And this is obviously to the disadvantage of the reported SMB growth. As mentioned before, I would like to give you more detailed insight into our dynamically growing enterprise business in the next few slides. Slide 7 now, I will start with development of the number of our customers. In the past 12 months, the number of enterprise customers grew by 44% to now 2,712, particularly in the fourth quarter in line with the usual seasonality for enterprise software companies, we were able to make further strong gains and almost double our growth average. This was driven by the strong execution of our pipeline at the end of the year. In addition, we won new customers through acquisition of Upskill and Viscopic, both of which have been added to our Augmented Reality platform frontline and now complete our fully integrated offering. We now count a well balanced mix of use cases across manage connectivity and operational workflows in our portfolio, some of which I will show on the following slides. But before we get to some of the use cases, I would like to present the development of billings in the enterprise business, not only the amount of enterprise customers increase, but also our enterprise billings. Up 75% in 2021, we were able to grow the enterprise business to nearly EUR 100 million. And this corresponds to more than a five fold increase compared to for example, around EUR 17 million in 2019. The success is also due to the fact that we were able to increase the size of the contract with the respective customers last year as can be seen on the right hand side. Our annual contract value bucket above EUR 200,000 increased by eight percentage points compared to 2020. And our smallest bucket EUR 10,000 to EUR 50,000 ACV contracts declined by 11 percentage points. So really seeing a shift there. We were able to achieve this positive development primarily through our successful up and cross-selling, our success in building lasting customer relationships and the acquisition of multiple new high profile strategic partnerships with leading businesses in their respective industries. On the next slide, you can see the importance of strategic partnerships for our business. SAP and Google Cloud were among the highlights in 2021, underlining our strong value proposition in the enterprise business. In addition to that we partner with existing multinational technology partners such as Vuzix, realware or NSF. Those strategic partnerships are a major driver for our long-term growth. The reason for this is twofold. They help us to accelerate our expansion into various strategically relevant, verticals, industries. And these partnerships are a great opportunity to join forces with those third parties and leverage our sales reach globally. With that, let's have a brief look at some example use case of our product to begin with. The great success is clearly our collaboration with NSF International. I've just mentioned NSF International on the partnership slide. Let me elaborate a bit more on what we do together. NSF is a leading global food safety organization, we have closed a commercial agreement with them. And we are now jointly improving in marketing and Augmented Reality solution to digitalize the food industry. This solution is based on our enterprise AR platform frontline, and guides workers step by step to the food production process. It is voice for AI controlled and therefore really 100% hands free. As you can imagine this a game changer for the food industry, which is with its very strict hygiene regulations. The solution we have with NSF is already fully operational. And it is used for example by global fast food restaurant chain. What I want to highlight here is that this solution is enhanced with artificial intelligence capabilities. So the software can detect for example, if the workers are wearing and changing their hygiene gloves, we are convinced that this will further contribute to more safety in the global industry and adjacent industries. On slide 11, let me demonstrate another attractive use case of our products; our productive collaboration with the Ford Motor Company. We provide extensive state-of-the-art Augmented Reality reports to Ford Diagnostics team, which must go through complex technical issues when checking vehicles. Therefore, our solution were rolled out across more than 400 Ford dealers worldwide, who now have the capabilities to solve problems more efficiently and accurately using Augmented Reality remote support. Another very different example, use case, which I want to show is our cooperation with Erste Bank, Austria, which is one of the largest banking groups in Central and Eastern Europe, together with TeamViewer, as the bank enables its customers to visit so to say a virtual branch. That means that clients can consult the personal banking advisor who then can via video call have the client to put together online forms, upload documents and so on. On the service level of this digital service is similar to the one in the real branches. I think this case a great example of our customer engagement software team who are engaged that has been added to our portfolio through the acquisition of Xaleon on also in early 2021. The last great example of how to use our solution is shown on slide 13; recently, we started working with ABB, one of the world's leading global technology companies with our software, ABB provides remote support for their clients who heavily use connected devices such as robots and industrial machines. And furthermore, another goal of ABB is to standardize the global remote IT support across all global divisions, TeamViewer is ABB partner of choice to achieve this goal. Our enterprise connectivity suite tender is just the right solution because it delivers a stable, highly secure cross country connectivity, both internally and externally. These four examples demonstrate the breadth of use cases for all products across the wide range of different sectors and industries. This is one of the aspects that make us confident about our enterprise business. We come to the SMB business page 14. And take a look closer look there. Overall, we recorded the growth of 12% year-on-year in SMB amounting to billings of EUR 455 million, and several factors contributed to this growth. Firstly, part of the growth stems from higher volumes with existing customers as a result of our continued cross and upselling as well as winning new customers at higher prices. This can be seen in our ACV bucket split, our largest ACV bucket EUR 1,500 to EUR 10,000 showed the most dynamic growth in the last two years with an increase of almost 10 percentage points. Secondly, we can see in the upper right corner that we were able to steadily increase our ASP again after a dip in the second quarter. In the fourth quarter of 2021, the ASP counted EUR 728 and thirdly we improved our SMB churn rates by almost one percentage points to 14.1% in Q4, compared to Q4, 2020. And again, SMB business is very attractive funnel for our enterprise business, more than EUR 10 million of the incremental enterprise billings in 2021, are actually coming from former SMB customers. As shown on the chart in the bottom right, we counted 624,000 SMB subscribers at the end of fiscal year 2021, which is 42,000 or 7%, up from last year. In the fourth quarter, however, the number of subscribers remained essentially flat. Because of our decision to suspend free to paid monetization campaigns to further develop our ecosystem, I’ll come to that later. As we started into 2022, we intend to continue the suspension of free to paid monetization campaigns. And this should nurture our free user ecosystem, but will at the same time increase the seasonality of our subscriber goals with the majority of growth weighted to the second half of the year. We are confident that we will achieve our 30,000 to 50,000 subscriber growth target in the year ahead. TeamViewer’s strong focus on further developing existing SMB customers and the growing relative importance of enterprise customers will further diminish the relevance of subscriber growth as a KPI for measuring future growth at TeamViewer. What are the use cases behind the SMB growth, we see similar use cases as for larger enterprises, maybe with the exception of operational workflows created on our frontline platform, which are more biased towards enterprise. Overall, it's a well balanced mix of use cases clearly with a strong presence within remote access and control of all sorts of equipment and devices including access and control of non IT equipment. The digitalization around operational technology and their use cases also applies for SMBs. We cover IT management including monitoring of IT environment, patch management endpoint protection, we obviously also cover remote work use cases. And in addition, we offer customer engagement solutions as well as solutions for the education sector. So very comprehensive portfolio for the SMB business as well. If we go to the next slide. Let me change gear provide an update on our ecosystem, for user ecosystem as we committed to do at the capital market state. Free ecosystem was one of the larger drivers of the SMB growth in the past, especially in 2019, and 2020. And not so much in 2021 anymore. Due to increase monetization as well as more competition at the low end, our ecosystem has been declining in line with our update at the CMD we want to stabilize the ecosystem again, and ideally reignite growth. So here's the status on slide 16. As you can see, installations of our software has increased again, albeit only slightly, but this is clearly encouraging. Also, the number of monthly active devices has stabilized again, the one indicator which is still in expected decline is the number of yearly active devices. This is for us not really surprising, as we need to bear in mind that the number of 283 million includes a significant number of devices active during severe lockdown restrictions, especially the fourth quarter of 2020, and then the first quarter of 2021. And as those devices now roll off from the LTM count, we expect slight further decrease before that number will stabilize. That being said, the more current indicators like installs and monthly active devices are essentially stable, the ecosystem number will also become less meaningful as we work to more use cases which are not necessarily fully reflected on our ecosystem, such as, for example our AR solutions. Now let's look at our strategic sponsoring activities. As you all know, investing in the TeamViewer brand and increasing marketing efforts to showcase our extended product portfolio has been an important focus for us. To broaden our solution awareness across all customer segments, we signed to partnerships with football club Manchester United and the Formula One and the Formula E racing teams of Mercedes. And we have two partners with this to boost our brand awareness globally really. Both brands truly global provide an unrivaled reach and marketing for TeamViewer. With Manchester United we have already achieved more than 11.7 billion impressions of our logo since the partnership officially started mid last year. And regarding Mercedes, we had nearly 800 million video views featuring our logo on their channels, and we are able to reach a global TV audience of more than 1.5 billion Formula One viewers. You can see some more figures really impressive figures on our two major sponsorships on slide 17. From our perspective, our sports sponsoring teams are a strategic lever for TeamViewer as they are providing unrivaled global brand exposure, you can see how impressive these numbers are. And you can probably imagine, that much higher spend is needed in traditional marketing activities to reach these numbers of exposure. And finally, as you can see on the right, we use our sports partnership also to develop joint use cases of our technology in action. With that, we can then clearly demonstrate the value our software solutions can add at the different steps of the value chain for different businesses. That really applies to all industries in one way or the other and the sports clubs are showcases for that. Therefore, we can leverage our sports engagement beyond pure branding and logo impressions. But use these joint use cases and success stories as reference for other potential customers. And then of course, combine it with all other elements of the branding partnership. With the next slide. That comes to our internal improvement, which is also discussed and announced through the Capital Markets Day which is called, the program called ReMax. It’s on slide 18. We called -- we launched this program to address some of the issues we faced in 2021. Since then, we've already made substantial progress in terms of execution, and successfully reaccelerated some of the growth initiatives to better balance billings and cost growth. Let me briefly highlight some improvements, which we made since announcing our ReMax program. We thanks our core product team, and we reallocated resources to this area away from non-focus products. This will also bear fruit in new UI/UX update forthcoming which is on track to be released early second quarter so very shortly. Within ReMax, we also introduced the taskforce to upgrade our website and digital marketing. Also, we made quite some progress regarding initiatives with short-term billings impact the new organization has settled in very well. And we conducted for the first time in two years physical leadership kick off with most of our senior leaders. It's just happened 10 days ago, and very important to be together in one room again. Lastly, as already announced, we strengthen the expertise of senior management and implemented some major cost reductions to better balance cost and billing scores. And as you can see, on the slide, we have been successful in temporarily reducing our headcount through effective regrouping, and outstanding at around 1470. Summing up, I'm strongly convinced that we are well on track with pushing TeamViewer ahead, following a sustainable and profitable growth trajectory, our efforts have already started to pay off, and I'm confident that we will see many more positive developments in the future. With that, I would like to hand over to my colleague Stefan who will walk you through the financials in more detail.

Stefan Gaiser: Thank you, Oliver. Hi, good morning also, from my side, quickly summarizing the financial highlights, top line, bottom line and cash flow. So total billings, I mean, obviously, you've seen the numbers increase by constant currencies, sorry, increased 17%, measured in constant currencies in Q4, and 20% for the full year. So delivering the high-teens growth, clearly due to very strong enterprise growth, as well as a nice contribution from SMB driven primarily by increased volume and higher ASPs with existing customers. IFRS revenues grew 9% and 10%, for Q4, and for the full year respectively. I think as you know, the revenue growth rate has been below billings growth rate due to the base effect from the discontinued perpetual license business model. And during 2020, we still recognized roughly EUR 46 million of previous perpetual license sales. And obviously, this figure now came down to only around EUR 2.6 million in 2021. And that means it depresses our reported revenue growth. Now that being said, this effect will finally fully disappear in 2022. So billings growth and revenue growth will be much, much more in line. If we take a look at the revenues from the subscription model only, they grew 16% in the fourth quarter and 22% in ’21 overall. So again, much more in line with our reported billings growth, so going forward, I think the picture would be much clearer than. Looking at profitability, we came out at the high end of our pre-release numbers with EUR 257 million adjusted EBITDA or a 47% margin, clearly very attractive margin overall, despite our significant investments in future growth. That being said, clearly, we acknowledge that our margins are obviously down compared to an exceptionally profitable year 2020, which had all the tailwind from COVID-19. Moving on to cash flows, I think very strong set of numbers, very pleased to report the level of free cash flow, which increased in the last quarter to EUR 68 million, all up at 21%. And for the full year 2021, levered free cash flow decreased slightly by 5%. Obviously reflecting the slightly lower adjusted EBITDA but overall still a very strong conversion. Now, let's take a look at our billing composition on the next slides. Obviously, an important breakdown. I think Q4 was quite remarkable for two reasons. A, the net retention rate increased quite nicely, as you can see on the graph on the left hand side, retained billings in the fourth quarter amounted to EUR 133 million, reflecting a net retention rate of 105%. This is in fact one of the highest numbers we have reached. Also, new billings contributed well to our overall growth, two quarters in a row, we achieve now 2 million of new billings, and this is despite the absence of free user monetization. Looking at the yearend total, we gained 94 million of new billings, which was obviously below the 2020, Covid-19 peak figure, but still a very solid number. Taking a look at subscribers, increase of 10%. I think those numbers are well known to you over the year, but basically essentially flat in the fourth quarter. This is primarily due to the suspension of the free to paid monetization campaigns, which we stopped entirely during the third quarter. And our subscriber base, therefore slightly decreased by net 1,000 subscribers during the fourth quarter, which was pretty much in line with our estimates, I think you heard Oliver talk about the continued pause of this monetization, and therefore subscriber growth will be more biased towards the second half of 2022. But despite no subscriber growth, we were able to grow our billings in the fourth quarter by 17%. And please remember that the bookend of our subscribers ASP can be EUR 200 at the low end, but it can also be more than EUR 1 million in the enterprise business. So very different bookings in terms of ASPs. Slide 22 clearly an important measure to reflect the stickiness of our customer base. The quality performance of the net retention rate showed, as I said a strong improvement in the fourth quarter coming up to 105% and therefore pushing the overall net retention rate for the full year to 98%. As you know, that's been quite a roller coaster year in terms of net retention rate and its development. As we explained before, the one-time effects of right sizing of the COVID customers triggered the strong decrease, especially in the first six months. And then we saw a subsequent increase again in Q3 and now in Q4, up to 105%. So very strong development, I would say. And despite the low on that subscriber number in Q4 new billing slightly went up to EUR 20 million. This is a good achievement. Frankly, most of those new billings relate to more sticky enterprise customers with deeper embedded use cases, such as AR or augment enterprise connectivity like ABB, as Oliver mentioned. And again, as we have not run free user monetization anymore. I also believe that the customer cohort which we won lately, might turn out to be stickier than the ones from other quarters where we have new billings, more bias towards low ASP which tend to have a higher churn rate than a year later. Let's take a look at geographical performance on slide 23. In terms of region performance, fourth quarter billings growth was especially strong in the APAC region. That's good to see nearly representing one of our key growth regions, bit of tough year for APAC overall, but with a very strong finish. As you might remember, Q4 last year was actually not that strong in APAC so they also benefited from a lower base. However, did really saw very good improvements, especially compared against Q3. Q4 billings of EUR 30 million, roughly representing 30% year-on-year growth, very strong. You also saw that we have a new leader, Sojung Lee. She's joins us as the new person in APAC in December. And I think with her we won clearly a very proven enterprise software expert with significant knowledge in those important market wise, so very happy to have her on board. Let's move on to the Americas. Billings in the fourth quarter grew by 24%, also benefiting from some currency tailwinds as the US dollar strengthens. Growth in the Americas actually was clearly biased towards enterprise very strong pipeline conversion there. I think Pat Nagle who joined us in May timeframe clearly put together a very strong team and contributed quite nicely there. EMEA contributed billings of EUR 86 million, up 60% I think Americas performance especially driven by the enterprise sales, and EMEA recorded good SMB results and also strong pipeline conversion but less strong than Americans overall. So let's move on to the cost structure on the next slide. Overall, clearly, the business remains very scalable, despite our strong push into adjacent markets, and the even stronger push into our enterprise business. With around 93%, our gross profit margin remained comfortably above 90%, actually even improving slightly compared to last year, to really showing that our infrastructure efficiently scales with a steadily growing business. And that's even take into account that we further expand into the enterprise business with larger deals and more complex use cases. And now let's take a look at our OpEx functions, clearly in line with our key growth initiatives, significant investments occurred, as you're all aware, especially in the marketing area. Now reflecting the full impact of the marketing partnership since Q3, that's pretty much a flat line expense. So each quarter, pretty much the same amount to be expense for those partnerships. But also in sales and marketing and R&D, we invested strongly but generally speaking much more in line with billings growth. And then net debt expenses also came down to 2.5% and 2.9% in the full year, I think that has now been a very consistent development that all bad debt expenses came down and expected to improve slightly going forward as well as we become a more enterprise based business. Moving on to cash generation. Clearly, a continuous highlight of TeamViewer, we continued to enjoy strong cash flow, and actually very high cash conversion. Full year pretax cash flow from operating activities was clearly impacted by the investment into the brand equity, sorry, into the brand equity partnerships. But that being said, levered free cash flow in the fourth quarter, actually EUR 68 million up 20% or 21%, very strong cash conversion in the fourth quarter, and also actually benefiting from lower capex and interest payments. As you can see, for the full year, levered free cash flow slightly decreased, obviously reflecting the marketing partnerships, and the slightly lower EBITDA. That being said, we achieved a cash conversion rate of 61% of adjusted EBITDA, I think, overall, very strong. And actually, I would like to point out that our CapEx and interest payments, both nearly half, so quite significant improvements there. And I expect them to stay at those lower levels going forward. And clearly, that means this healthy cash flow adds to an already strong liquidity position, as you can see in the next chart, I would like to take a step back here. Quickly, I think there was the lingering question out there about our capital structure. And I think we wanted to respond to that today. So at the time of the IPO, the company actually had a leverage of about 3.5x EBITDA, I think clearly, since then we've generated significant amount of cash, and deliver pretty fast now to 1.3x, two developments contributing to that, obviously, this is driven by our continuously increased adjusted EBITDA on one hand, and on the other hand, we consistently generated significant amount of free cash flows. And if you add this together, we have now a cash position of EUR 550 million at the year end of 2022. And a net debt position of EUR 327 million. In Q1 of the last year, actually, we'll also use the chance to strengthen the balance sheets and secured long-term really attractive financing with the promissory note of EUR 400 million, which we concluded by the end of Q1, 2021. And as you can see, at the bottom of the slide, our financing structure is very solid and long-term secured with no refinancing needs for the next two to three years. So overall, I think a very solid balance sheet. And therefore, now we have set ourselves sustainable year and leverage target of roughly 1.5x adjusted EBITDA. I think this target is derived from well balanced and long-term secured financing structure and obviously takes into account our contingency strong cash flow generation. So wrapping it up on the next slide, quickly highlighting the cash profile of TeamViewer. Clearly, as a technology company, we traditionally have low CapEx, and I think that CapEx saw some peak during the last couple of years, but has now come down substantially and will remain at those levels for the foreseeable future. We also had and will continue to have relatively low taxes, the left significant amount of taxes to carry forward of our effective tax cash rate remains pretty low. That remains the case for the next two years. And obviously, we are able to achieve and generate significant adjusted EBITDA margins even with the significant impact of the marketing and brand investments, we retained margins comfortably in the mid-40 percentage or 47% for the last year. So finally, we consistently maintained a strong cash flow, and I think the profitable growth in the enterprise as well as the SMB business in combination with our now well balanced billings and cost growth will further boost cash generation going forward. And if you sum all of this up, I think TeamViewer clearly has a highly attractive financial profile. And this financial profile and strong position obviously, helps us now and enables us to create value for our shareholders, basically on a new level, which leads me to the share buyback program. This program has been in discussion for a while and now we wanted to update you what we want to do going forward. So let's move on to next slide. I think we talked about enough about our capabilities to deliver and our strong liquidity position. And therefore, we have decided to initiate a share buyback program with a volume of EUR 300 million or pretty much 10% of our shares. That's obviously fully in line with the authorities granted by our shareholders in the AGM in 2019. Obviously, we also released an ad hoc announcement this morning. The program is scheduled to start tomorrow is also expected to be completed within the fiscal year 2022. Obviously, the whole buyback program will be carried out in accordance with EU regulations and other applicable rules and so forth. Important to note, the vast majority of the shares will be cancelled, and therefore the share count of the company will be reduced accordingly. So roughly by 10%. I think this should clearly demonstrate the confidence of us in the strong outlook of the business and our commitment to shareholder value creation by now allowing shareholders to participate in the success of TeamViewer. And with the remaining EUR 200 million of cash, we still have adequate financial flexibility and firepower to execute on our close initiatives, I think overall a very strong position to be in. Let's move on and conclude my presentation with the outlook for 2022. Clearly, as you heard Oliver talk, we expect continuing demand for solutions over the coming quarters. The global mega trends are still well intact, and will continue to support our growth trajectory in 2022. I think the continued implementation of the method measures which we talked about and updated you today will further positively impact this development. And I think against this background, we continue to target high-teens billings growth and expect billings in the range of EUR 630 million to EUR 650 million euro for the current fiscal year. And revenue is expected to increase in the mid-teens to EUR 565 million to EUR 580 million. Adjusted EBITDA margin is expected to be between 45% and 47%. And furthermore, clearly we all expect operating cash flow to increase again compared to 2021. About a mid-term outlook, this remains unchanged as well, we see the mentioned growth rates for billings and revenue, as well as an improvement of our adjusted EBITDA margin going forward. And with that, I would hand back to Oliver.

Oliver Steil: Thank you very much, Stefan. Let me close with some final remarks. I think from our perspective 2021 was very remarkable year with some challenges, but also some very strategic decisions, which are very important on the partnership side on the M&A side on the development of the enterprise business, broadening the solution portfolio and the like. So, really significant decisions and steps towards continued profitable growth. So we really believe we have set a clear course and we deliver on this. We have delivered on our updated 2021 guidance, steadily generating high- teen’s growth in combination with strong profitability and very strong cash flows as Stefan pointed out. We are pleased to announce that we will use our strong financial profile to return some of the value that we generate to our shareholders. And the share buyback program we just initiated strongly and clearly underpinned our confidence in our business and the future growth of TeamViewer. This concludes today's presentation, and we now look forward to taking your questions.

Operator: [Operator Instructions] The first question is coming from George Webb at Morgan Stanley.

George Webb: Good morning, Oliver, Stefan. Thanks for taking my questions. I've got a few. So firstly just wants to start on net retention rates, which obviously jumped in Q4 to 105%. Looks like there's a bit of an FX tailwind in there. How are you thinking about constant currency net retention rates across 2022? And what's your latest thoughts around kind of pricing levels on the SMB base? That's the first question. Secondly, just on the enterprise size Q4 good level of net additions, to what extent are those marketing conscious having an impact in Q4, and how sustainable do you view that improved pipeline conversion as you look into 2022? And then just finally small one on the adjusted cost lines, quite a notable step up in R&D in Q4 that looks to be driven by more than just headcount increases. Is anything specific going on there? Thank you.

Stefan Gaiser: Yes, thanks George, so I’ll start with NRR really also very pleased with that development thing in NRR portfolios at 98%, fourth quarter, 105%. You pointed out, yes, there was some currency tailwind, probably two percentage points, I guess, in the fourth quarter, for the year as a whole pretty much unaffected by constant currencies. How do I see that going to 2022? Obviously, we've made this guidance now assuming roughly stable currency rates, what we currently see, and I would expect some slight improvements in net retention rate, I think it's a bit early to give precise guidance. But as you know, especially in the first six months, we've seen a negative effect of all of the right sizing and downsizing from the COVID customers. And that was quite a drag on our NRR. That being said in the second half, we recovered quite significantly. So it's a good trend. And I would expect, clearly that overall we continue to improve our NRR for the full year, which was like at 98%. But bear with us, I think it's a bit too early to give precise guidance there. And then thinking about pricing power and SMB space, I think we've now been able, again, to show a nice increase in ASP within the SMB space. This is driven by two factors, a, obviously continues upsell into the install base, more use cases, more embedded products, cross-selling activities scale going on. So it's a well balanced mix of more use cases and some price increases which you push through. And I do think the price environment is actually pretty stable. So I don't see any indications that this will change, even at the low end. At the marketing partnerships, the impact in the fourth quarter. Look, I mean, obviously significant impact on the P&L I think Oliver talked about in his presentation, what we see in terms of brand equity and the positive impact there. It did not really influence the top line meaningful in the fourth quarter. It's also not what we expected frankly, yes, we always say this as a long term investment. But really from a brand perspective, very pleased with what we're seeing. Pipeline conversion, I think that's what's the fourth part of your question, overall very happy. What we've seen in the fourth quarter. I mean, clearly, the fourth quarter for the enterprise business is show time. And I think especially the Americas team converted their pipeline very well. Strong pipeline build and pipeline conversion. In EMEA also good pipeline conversion. So overall, very pleased with what we've been seeing. But obviously, it's also the fourth quarter. And it's important to see that pipeline conversion the fourth quarter. As you would expect now, obviously some of the pipeline needs to be rebuilt, right. So all other enterprise software companies out there as well.

Oliver Steil: And last question was around cost line R&D, anything special in the fourth quarter? No.

Stefan Gaiser: Not really. I think it's the full impact of the acquisitions, which we've done. Yes, that's about it. But going forward, its growth will be slower.

Operator: The next questions come from James Goodman at Barclays.

James Goodman : Great, good morning. Thanks very much. And particularly for the extra disclosure around the SMB business as well. A couple of questions from me. Firstly, just on the headcount side, if I look at Q4, there's been a meaningful sort of reduction in the sales and the marketing lines there presumably around the right sizing. So really just wondered if you could talk a little bit about your plans in terms of headcount into 2022. Are you expecting any impact from that lower sales headcount? And how are you finding employee attrition and the sort of general environment around employees, given the changes and movements last year? And then just secondly, I guess a slightly broader question on the outlook for ‘22 nearly half of the growth this year from SMB versus enterprise. So just wondered if rule of thumb you're expecting something similar in this year. And then in terms of seasonality there as well, I think a sort of a flatter set of comps than we've had previously but still a little bit of residual strength in Q1 from that COVID period two years ago. So would it be fair to say that you'd expect growth to be stronger in the sort of Q2 to Q4 part of the year? Thank you.

Oliver Steil: Hi, James. Thanks. So just for your first question on headcount, yes, we had a headcount freeze, as you can see from the numbers after the very strong intake, right, that's really just the freeze, no meaningful reduction. And especially, there's no meaningful headcount reduction in sales and marketing. So this is -- these are two areas where we're investing. So there's regrouping underneath the heart, so to say, but all-in-all, we have a strong salesforce trend, strong marketing support, and that's not going to impact the growth and the initiatives for this year.

Stefan Gaiser: Yes, I think, then in terms of your rule of thumb, yes, I mean, obviously, we don't give guidance between for SMB and enterprise growth. But generally speaking, the way how we see that is not a bad approach, frankly. Yes, and therefore, equal to I mean, SMB grows 10% or above for getting to 12% growth. That's obviously the target, which we gave ourselves at the CMD. We're not quite there yet. But obviously, we put in place lots of measures to improve our SMB performance. And I think if we expect equal weighting of enterprise incremental growth, and SMB incremental growth that's a good rule of thumb. And seasonality, yes, you're right, I would always expect a moderately biased seasonality towards the second half. A, we continue to post modernization free users, as we talked about, that still the case. So we don't use any of that for the time being. And then obviously, enterprise pipeline rebuild, and converting, obviously, is also biased as for most other enterprise software companies more towards the second half.

James Goodman : Okay, thank you. Oliver just may be coming back, just on the employee side, just a little bit more detail. I mean, just around the general environment, it's clearly a topic across the space at the moment, just in terms of attrition versus wage inflation versus finding the right people and anything to add around that.

Oliver Steil: Yes. Good point, clearly, we see that there is significant kind of competition for workforce across all markets, I think started in the US. And now it's also reached Europe, and APAC was always very difficult to find high caliber people, and certainly we've used the regrouping exercise to also think about adjustments there in terms of kind of increasing salaries and making adjustments for the people that are high talent, and we want to keep going forward and then on reductions in some places where we felt we are not in the best possible position. So it's getting harder. Absolutely. I think we have an attractive compensation system. We provide significant opportunities. And we have an eye on that. I wouldn't say that we have difficulty finding people. Intuition has gone up in some areas, but also honestly speaking during the ReMax program, part of it was also say me wanted, so to say. So we were actually quite happy to have the opportunity to regroup in some places in some departments globally. So all-in-all, I would feel well under control, but it's getting tougher for sure.

Operator: The next question is coming from Mohammed Moawalla at Goldman Sachs.

Mohammed Moawalla: Great, thank you. Good morning, Oliver and Stefan. A couple for me. First of all, just Stefan, you made the comment around Q4 being show time for the enterprise salesforce, but the pipeline having had to be rebuilt. I just curious to get your sense on kind of the visibility of this business, because it's obviously been very Q4 loaded over the last couple of years. I mean, the overlay enterprise and IT spending environment, from everyone you hear is pretty robust. So I'm just curious what you can do around kind of driving more consistency here, both around kind of pipeline built, but are you also seeing any progress or evidence around some of the larger deals? And is that sort of baked into your expectations or not? And then secondly, just again, back on enterprise in terms of execution can you maybe talk us through any sort of changes you have made to sort of make the existing execution a bit more kind of consistent on the side as well. Thank you.

Stefan Gaiser: Sure. So enterprise visibility, yes. When I say it's show time clearly, I mean, as you know, enterprise business as always been biased towards the fourth quarter, whether we like it or not, it's just affecting the enterprise software industry. I think what we've seen here is a good build of the pipeline, especially in the Americas, when Pat joined us. She put together a new team. I think that team, also with existing talent actually produced a very good pipeline and then converted really strong in to fourth quarter. And I think this was a progress across all use cases. And across all deal sizes in the US. I think in EMEA, we are slightly behind; there was leadership change a bit later in the year in the fourth quarter. And I think the pipeline bid in the EMEA region, as we expressed in the third quarter was not as strong as in the US. But they converted also very nicely, yes, overall speaking, I think what's good to see from my perspective, is that the pipeline we have now build together with our key partners like SAP, or Google and the likes is increasing. That's nice. Also pretty much centered the newer use cases, which tend to have larger ticket sizes. But clearly those partners, like I mentioned, they are also very much biased towards Q3 and Q4, right towards the end of the year when they convert a pipeline, but overall happy with what we see, as you would expect going into new year, there is some carryover from pipeline, which hasn't been closed, which we can close and disclose early on. But fundamentally, obviously, you need to rebuild the enterprise pipeline, but happy with what we've been seeing here. In terms of execution. Look, I think it's all about being close towards the deals and closely towards -- closely dimension to enterprise team, I think that's what we've been doing over the last few months, always by Patty and Jan, who manages the EMEA enterprise team. And also Sojung, I think, generally speaking, we are much closer to our -- closer monitoring our enterprise development, sales productivity. And that makes me confident that we have it in place to deliver on our 2022 numbers.

Oliver Steil: And I would also say that, of course, what you call make execution more consistent. I mean, if I turn it around, the inconsistency is, of course, also due to the fact that we see really many positive movements. I mean we see a move over the last quarter towards larger deal sizes, we see regional moves, we enter new verticals, which we haven't been present before we did the acquisitions, to add Augmented Reality. So all of this is getting up larger project outsize deals at certain points in time plus, on top now we have the partnerships which we launching with SAP and Google. So I would say, in a way a good problem to have because the share of new business to recurring renewal business is still very high. And then of course, that is torts the picture here and there a little bit. But with the overall growth way the track record, you see, except for the COVID quarters, I think it's impressive. So therefore, I wouldn't call it an inconsistency is the growth -- growing pains, so to say, of a business, which is really gaining speed.

Mohammed Moawalla: Okay, that's great. And if I could fit one more in on the SMB side, there was obviously kind of the deceleration in the consequentially the subscribers, but maybe Oliver, could you update us on the kind of state of the competitive landscape? Has there been any sort of remain as competitive at the kind of very low end? And I know, you talked about kind of stabilization and gradual improvement. Just curious to get your perspective.

Oliver Steil: Yes, I think pretty much unchanged, I would say as we had discussed the COVID wave has really brought in a number of new competitors, winning customers and trying to get customers and subscribers at the lower end. So this is a numbers game, not ASP game so to say. These are small ticket sizes. And I think we can do many things there, what we did in the past clearly is we had a good portion of the subscriber growth through conversion of free users. We converted quite a few of them in the COVID aftermath. We felt now it's time to probably better ring fence our user base more don't monetize too much. Let them be on the platform and use our products and get to know other use cases. That's what we have implemented in Q3 and also in Q4. And that's what we expect. So I wouldn't say there is no change in the competitive landscape. I think we have discussed it multiple times. But it's more like we take a more aggressive stance maybe which is okay, let people stay on the platform and don't monetize them. Because we don't really need these extra subscribers to prevent significant growth for the moment and if you kind of take that 30,000 to 50,000 subscriber edition guidance. This is something which we can do at a later stage if we need to and want to.

Operator: The next question is coming from Stacy Pollard at JPMorgan.

Stacy Pollard: Hi, thank you very much. Maybe some quick follow ups for me just digging in on that last comments around SMBs. And the subs we saw a little bit of drop from Q4 to Q3 is that -- when you talk about competition are you mostly competing on price? Because the products are somewhat similar and commoditized at that low end? Or are you somehow grabbing customers because of features or function? Or is that where the competitive landscape is like to really understand what the features are? And then second question, are you able to broadly quantify the impact from the strategic partnerships with SAP and Google as you think ahead, so say what portion of growth you'd expect them to contribute? Either in 2022, or at some point in the future? And sorry, final question, re-capital allocation, is the share buyback now the priority focus? And how are you thinking of M&A? Maybe not as much plan for 2022? Or do you see more opportunities?

Oliver Steil: Yes, maybe I’ll start with the competition point, I think if you get to the entry level, where you think about working from home, one computer connecting to another computer, where it's very hard to differentiate on features, because you effectively connecting to manage IT equipment pieces, that's the other competition, I would say is more on price. And we are, we have an attractive offer, which we call TeamViewer remote access, which is for this individual user situation. And in some markets, this is competitively priced, and others it’s may be a bit too high. But it's also not the key focus for us. So we haven't been reacting on this a lot. What we focus on is feature richness and quality of connectivity to all kinds of devices across all operating systems reliability, performance, global footprint. In order for this to be really relevant, you have to be a professional service provider using the product day-in day-out, in very different use case situations where you don't want to have a breakdown or a non-connection, and you want to have security. So this is, I would say the bifurcation. If there's focus on features and connectivity, resilience and reliability, then we win if it’s purely single person connecting, we are under price pressure, we tend to be not as competitive enough. That's why we basically given it for free at the moment, which we always said, if you remember the IPO, we said the free product is the best protection against low end competition. We haven't played that card over the last 24 months, but now we do.

Stefan Gaiser: And then maybe on the strategic partnerships, I mean, recapping 2021, I mean, obviously those have been closed and signed, towards the end of the summer, we didn’t expect significant contribution 2021. Despite that, there was strong momentum in pipeline builds especially in the Americas, I think we are well connected there with the team. We already closed a few smaller deals together with SAP, which is good to see. Also, Google support our scale in some larger deals, also very strong contribution down through indirect relationship support, I would say. So overall, very pleased with the momentum, which we've seen now, it's obviously all about increasing and building the pipeline and started converting the same in the second half. I think it's a bit too early to quantify the full impact, frankly, but obviously, those strategic partnerships, open up avenues for significant growth in the enterprise space. I mean, last year, we did EUR 40 million of incremental billings in the enterprise business roughly, I think it doesn't take a whole lot to mention that successful SAP partnerships and Google partnerships can contribute meaningfully to those numbers.

Oliver Steil: I mean, the overall logic is that there's a complete new set of solutions, which are more and more adopted, which are based on the Augmented Reality platform. So really supporting other workers and employees which are not in the office environment, but which are outside the office environments or call them frontline workers or industrial workers or service technicians, whatever. I mean is the clear trend to bring more IT, more software more support, outside of the IT headquarter into these functional areas. And the nice thing is that I think we all aligned with this opportunity. So clearly. I mean, like Google, like others, but also Google. They want to increase their cloud consumption by new types of services that can be provided across the enterprise. Somebody like SAP really extending the proposition from ERP warehouse management to frontline worker support, our software come into play sometimes and this is integration some professional services needed, which is then tapping into the traditional top network that is doing software implementation. So I think a good group of companies coming around that opportunity, and that's why we're so positive about this future perspective.

Stefan Gaiser: And then maybe on the share buyback and M&A. Look, I think the key question for us was, how are we dealing with a significant cash position we build up over last couple of years? Leverage down 1.3x. So that's -- this enables us to do this share buyback. But that being said, I would feel very comfortable to take up leverage again, if the right target comes our way. Do you think we have the financial firepower and the flexibility in our balance sheet to pursue M&A? That's not immediately on the horizon, absolutely not. But we still maintain significant firepower to pursue M&A.

Operator: The next question is coming from Hannes Leitner at UBS.

Hannes Leitner: Yes, thank you for having me on, as always, a couple of follow up questions, maybe on Stacy’s questions, just to add here in regards to your conducted M&A, can you talk us through about the contribution for Q4? And then also how the kind of now is a total group, for example, the AR mixed reality have contributed to enterprise feelings, to get a better sense of the performance. And then maybe just a follow up because you mentioned enterprise has been reshuffling in Europe, is that anything related with Ubimax and with the management? And then just the second topic would be to discuss margins. Q4 has been quite, seen quite healthy margins. 2022 guidance shows a little bit less confidence in it. Maybe you can talk us what is the over and near term and the mid-term margin trajectory, as enterprise ramps up philosophically, you should have the higher costs attached. So how do you, if you plan to offset that moving part? Thank you.

Stefan Gaiser: Yes, so it -- just the first part, the first views.

Oliver Steil: And so yes, so lets’ -- the first part was about the M&A that we did the contribution in the fourth quarter, and the AR contribution, and the likes and the reshuffle. So maybe I go first and then. So I think the way to think about it is that we have fully integrated Ubimax, Upskill and Viscopic into our product management, R&D and also go-to-market and sales, obviously, sales was more coming from the TeamViewer side, not so much from these smaller companies. So significant contribution from AI. If you look at the enterprise in total currently, Stefan can comment on the numbers but I think important is the go forward pipeline. And as we see it in most regions, I would say that there's somewhat like a split 50

Stefan Gaiser: Yes, and maybe just on Ubimax because I think all of those three founders play a pivot, a very important role within the organization, sort of Oliver just mentioned, and obviously they have very strong enterprise background. So great to have them on board and it's good to see that their roles have actually increased in importance. In terms of margins, yes, Oliver is absolutely right. Now, look, I think enterprise is close to 20%. And there was always the question is going to be diluted. And it's not, it hasn't been. If you would leave out the marketing partnership effect on our P&L, it would still be at mid-50s roughly, right. So despite enterprise business, growing on nearly doubling in last year, we would have been able to keep our margins at very high level. So I think, from my perspective, no diluted impact. Why is that? Look, there's no significant professional services, it’s lend and expense, taking SMB customers and converting them into larger customers. That's a big driver as well. And I don't think it's going to change going forward. Now, in terms of marching, you express it as having less confidence. I don't think so frankly, I think, frankly, in 2021, we did -- we over delivered against the guidance we gave ourselves was 44% to 46%. Now, we came out at 47%. I think we said at the time of the Capital Markets Day, we want to improve margins, again, as we exit 2022. And now I think we've achieved that goal a bit earlier in 2021. And I think the margin guidance we gave ourselves 45% to 47% is a good margin target and it's not diluted. Clearly, we should bear in mind that in 2021, the first quarter didn't have the impact of the marketing partnerships, we set margin of around 60%. But obviously, that's not repeatable anymore. And that's the biggest reason for a potential adjustment of our margins. But as you pointed also out in the fourth quarter, which is 44% margin. So very good. Now we have the cost re-implemented, as Oliver mentioned order cost pause, as Oliver mentioned, and that should help us to get the margin sort of 45% to 47% level.

Hannes Leitner: Okay, thank you, just in regards to the cost freeze, exist on the implied OpEx increase, it suggested during have OpEx increasing demands and percent this year. So in line with the top line. So that's why the ReMax program should actually mitigate this. And that's why I suggested the conservatism. And then the last word is from the enterprise on the acquisition. So you're saying that there's almost no contribution from Upskill and Viscopic in Q4? Thank you.

Oliver Steil: Yes, look, Viscopic was a small startup which we acquired. So it was immaterial and the same with Upskill. Yes, I mean, that's hardly material contributions from that.

Hannes Leitner: So it also goes which you've seen pretty much organic growth.

Oliver Steil: Exactly, if that is what you're after. Technology bucket right, they are part of the solution portfolio, but you cannot strip out. They don't -- they didn't come with billings, which are now absorbed and would kind of devalue the organic growth performance. That's absolutely not the case.

Stefan Gaiser: And, Hannes, maybe just quickly on the cost growth. I mean, obviously, the growth compared to 2021 is predominantly the full year impact of the marketing partnerships, right, that has started in the second quarter, mid half the charge more or less, and since Q3, it's fully expense in the P&L. But obviously now going into Q1, you will see a significant increase compared to Q1 last year, but the run rate is now stable if you compare Q3, Q4, it's a pretty stable runway.

Operator: The next question is coming from Gustav Froberg at Berenberg.

Gustav Froberg: Thank you for taking mine as well. Good morning. And I just have three quick ones, hopefully, and two on capital allocation and the share buyback program. I was hoping you could just give us some more color there on how you reached the decision to reach there or to go for a share buyback program and how we should view was it effectively a return of cash to shareholders via share buybacks versus the company's reinvestment opportunities and the maturity of the business. So just one question on the deliberations you made when arriving at that decision versus investing in yourself via M&A or organically. Then a question on the shares you would like to cancel. So why would you not consider using more of the bought back shares as acquisition currency? And then the third question on costs; you mentioned during the CMD that you would like to start capitalizing sales costs. Could you please remind us what you expect the impact may be in 2022?

Stefan Gaiser: Yes. First off on the share buyback decision, look, I think that was a quite an intense discussion over the last quarter frankly, since IPO the company there was the question already back then, what are you going to do with the significant cash you're going to generate our next couple of years? I think now, with a leverage of 1.3x we had to answer the question. And then obviously, we deliberated and conducted quite some intense reviews about balance sheet structure. And what is a reasonable balance sheet for us what gives us still enough headroom to invest into the business. And we feel anything below a leverage of 1.5x this then allows us the opportunity to return cash to shareholders through a share buyback. And I think that's what the level of which we have already achieved. However, I think and that's the good news, it does not eat into our reinvestment opportunities at all, I think we still have very strong financial firepower to pursue M&A. I would feel comfortable anytime to increase the leverage again, if the right target comes our way. So I think this actually now gives us opportunity, the share buyback to let shareholders participate in the cash regenerate, but at the same time does not eat into our future M&A plans.

Oliver Steil: Yes. I think maybe for my side to add to this. I think the thinking process is, a, M&A is not on the list short term, I think we clearly committed at Capital Market Day that it's all about organic performance. We revised our guidance, we revised our mid-term plans, we gave details around value creation in enterprise and SMB, and it's about delivering on this in the short term. So therefore, no immediate thoughts on M&A, number one. Number two, if we were to do M&A, it's either at the later stage, it's either tuck-in M&A which we have very successfully done with ReMax, Upskill and Viscopic in the past, and the current share buyback program leaves all the opportunity and flexibility to do so if that would come along. The only limitation would be if there is a mega M&A and then we anyway in a different game and need to think about different measures because then the capital we have wouldn't be enough. And that's totally not on the rise at the moment. So therefore we feel, we felt after quite some discussions with investors over time we should do this now because it's a good timing and we don't need the funds.

Stefan Gaiser: And then in terms of why cancel, not keep them for M&A currency. Look, I think it's just straight up to cancel them. We can obviously if we pursue M&A re-issue shares, I think, technically, the big difference frankly but I just tried up to cancel them now for the time being.

Oliver Steil: As it's not on the short term, alright I think well then.

Stefan Gaiser: And then sales commission, your last point, yes, we started capitalizing some of those around EUR 3 million in the fourth quarter, and I expect going to 2022 that will be in the mid-single digit million range. So probably EUR 5 to EUR 7 million on a yearly basis.

Operator: The next question coming from Gianmarco Conti at Deutsche Bank.

Gianmarco Conti: Yes. Hi, there. And just a few follow ups and for me too and I have three questions. Just the first one, could you perhaps share on your FY 21 base? What is the percentage of billings that comes from AR and IoT? And sort of what is the customer counter relation there? And the second question is if you could share some data, I know you've previously spoken on a CMD about IT versus OT use cases. How does that looking in the fourth quarter? And how are you thinking about the trends progressing into FY22? If you're still seeing potentially more of OT use cases versus IT and how you're measuring that. And the final one is just on sort of a clarification. I wanted to understand whether your enterprise billings, I saw that you've converted sort of EUR 12 million from the SMB. And I was wondering, out of the H1 remaining, how much came from retain versus new wins. And how does the new wins in enterprise compared to the previous years? Thank you.

Stefan Gaiser: Yes, so on the AR side of things, I think we disclose at the Capital Market Day that on ATM basis operational workflows billings were around EUR 13 million, 13 and that is substantially increased in the fourth quarter as you would expect, an also highlighting some of the use cases Oliver mentioned which included our front end solutions.

Stefan Gaiser: So overall still obviously relatively small, but it's a part of new billings, especially in the enterprise business becoming increasingly important. Also mentioning the partnerships with Google and SAP that's obviously right now at this point in time, predominantly focusing on those use cases. And then thinking about IT OT use case split, predominantly more bias towards OT especially, obviously the frontline solutions as well, or the whole AR suite, I think probably going back a year one and a half years ago, was roughly split, I'd say 50% OT 50% IT use cases or mains connectivity use cases. If I take a look at the pipeline today, it's probably rather two thirds OT frontline led use cases and one third of the field probably have an IT use case scenario to it as well. I think overall, it's well balanced, frankly. And it should see and has seen a significant, larger increase towards our newer products, which is very encouraging.

Oliver Steil: I suppose it's also important to notice, I mean, most large customer situations have a mix somewhat, there's either, they stopped with – in IT and then have the plan to move into more parts of the organization and connect more devices or the other way around. Clear question, how do we measure this? I think the honest answer is that we have in the CRM, of course, we have a clear understanding of what the customers do. But we don't measure it with a single KPI because we try it in the past. And there is kind of specifics on connectivity and the likes but ultimately the only thing that has to engage with customers and understand what they're doing. And that's not a call it quantitative measure which we which we're following or managing, it's really not so relevant, importance is that we sell more use cases to larger organizations.

Stefan Gaiser: And then lastly on the enterprise new billings, significant amount of incremental billings and enterprise came in from new customer wins. Obviously, we have a strong net retention rate in the enterprise business overall, it's 105% for the fourth quarter, you can image for the enterprise was significantly higher. But even that being said, we still had a very good intake of new enterprise customers in the fourth quarter as you would expect, as well.

Gianmarco Conti: Right. And just quick follow up. And are you saying that the free paid campaign and you are you're sort of blocking it, even in the long term, like even in the future? Or is it something that you might revisit and sort of say if growth expectations on exactly what you want them to be?

Oliver Steil: No, I think the, yes, good question, I think the past had always shown the past meaning before this whole COVID disruption, the past had always shown that it makes sense to convert some of the free users into paying customers in a given market, but then don't do anything for a while. Now, we have done very little in Q3, nothing in Q4. And as we said before, likely, the same will be Q1, Q2. But let's see. But that's the current planning. And then, most likely, we will do some monetization again, towards the second half of the year in selective market. And let's see what the contribution is. We feel very comfortable with this 30,000 to 50,000 new subscribers, which we want to grow, part of it will come from free to paid likely part of it will come from voluntary purchases, through other initiatives. So this is the way we look at it at the moment. Of course, if we see significant other traction in other parts of the business, and we can suspend it even longer than we'd likely do so. But that's out to be discussed later during the year.

Gianmarco Conti: Right. Just one last one to consider in on my previous question around new wins in enterprise, are you not able to pin a number or quantify the percentage of enterprise billings that arrive from new customers not number attained or converted from SMB?

Stefan Gaiser: Look, I think that's something which we don't want to do at this point in time. I think the important step at CMD was to give precise color around those two different segments, SMB and enterprise. But I think that's it for the time being. Yes, I think it was going forward, we might change this. But at this point in time, we focus on providing overall billing split between SMB and enterprise.

Oliver Steil: And it's also not at this point, I know, I mean, later in future might be more relevant. But at the moment, we have so many customers where there is a contact and there's a license in our SMB base and whether you call that a new logo, despite the fact that maybe there is a few EUR 1,000 license there, I think this is such a significant move upwards. And then there's a few customers that come in completely new as new logos was a big ticket. But I think at the moment, I would say it really doesn't matter that much later when we have more of these large logos and we talk more about upsell development and cross-selling and we have maybe at some point depleted the number of large organizations is our subscriber base, that will be a different topic. But at the moment, that's just not the operational reality at the moment.

Operator: The next question is coming from Victor Cheng at Bank of America.

Victor Cheng: Hi, thanks for taking the question too from my side. Just to follow up on the net subscriber additions, can you provide a bit more color on how we should think about it? Particularly for Q1, Q2, is the target of 30,000 to 50,000 net new additions achievable in 2022? Or should we expect it to be a bit closer to the lower end? And then second question on the free user base. Are you able to break down the yearly active devices by device types? And how that has evolved over time, as IoT become a bigger part of these devices? And if so does that imply the free base traditional device actually have shrunk a bit more? Thank you.

Oliver Steil: So I'd say net additions as we said 30,000 to 50,000 is the range of net additions we want to do and we can confirm that probably weighted towards the second half, as I said, Q1, Q2, probably suspended free to paid campaigns. So wouldn't expect significant net adds in these two quarters from today's perspective. For user base breakdown, though, that we wouldn't go to that detail. We have different metrics around the free user base, of course, but I think that's nothing which we would want to disclose. And also, device type is an interesting, but of course, if you look at the just the sheer number of hundreds of millions of active devices, most of them are one way or the other Windows or Android operating system. So breaking that out by device type at the moment is not that relevant.

Stefan Gaiser: The device type we can't do anyway. The only thing is operating systems right running on that. But as I said, this is not really meaningful, because obviously Microsoft is pretty dominant.

Oliver Steil: You can do Android, you can do mobile Android versions and but not so meaningful. There are no more questions at the moment. For closing remarks, and it is back to the speakers.

Oliver Steil: Okay. Yes. Thanks for the questions. And looking forward to talking again soon then. Thank you.

Stefan Gaiser: Thanks, bye.

Oliver Steil: Good day, cheers, bye.

Operator: Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.