Autodesk, Inc. (NASDAQ:ADSK) Barclays Global Technology Conference December 7, 2023 6:05 PM ET
Company Participants
Stephen Hooper – VP of Design and Manufacturing
Simon Mays-Smith – Head of IR
Conference Call Participants
Saket Kalia – Barclays
Saket Kalia
Okay, folks. Well, welcome to the last session of day 2 at the Barclays Conference, and I can truly say we saved the best for last. We’ve got the dream team here from Autodesk. We’ve got Steve Hooper, VP of Design and Manufacturing. And of course, Simon Mays-Smith, Head of Investor Relations. Also have Dan Arlan, the Investor Relations team here in the audience.
We’ve got about 30 minutes together. Let’s take 20 or 25 minutes to do some fireside chatting here with the team, which I know is going to be really fun. And then, listen, as it’s the last session, let’s get a question out here out of the audience. We’ve got a mic right here on the back, would love to keep it interactive and fun. So maybe with all of that, Steve, Simon, thank you so much for taking the time here.
Stephen Hooper
Great.
Question-and-Answer Session
Q – Saket Kalia
Won’t be a conference without all of you.
Maybe just to level set here, Steve, right, because we’ve spent a lot of time together, right, maybe just for the benefit of the audience. Can you just share a little bit about your history with Autodesk, your role at the company, again, for those that aren’t as familiar?
Stephen Hooper
Yes. So I’ve been at Autodesk now for about 20 years. So I’ve worked in a variety of positions. Most recently, I was the Vice President for our Design and Manufacturing Marketing Group. And then over the last 5 years, I’ve led our Product Design and Manufacturing Group for Software Development. So I’m responsible basically for all of the tools in our portfolio that either create engineering and conceptual design information, simulate its behavioral characteristics or help you manufacture it, whether that’s fabrication, subtractive machining or 3D printing.
So my group’s job is to grasp the business requirements of our customers, some of their — I’d say, their macroeconomic drivers and the strategies that they’re pursuing and to codify that in software development requirements and then produce the software that solves their problems.
Saket Kalia
That’s helpful. Well, 20 years or so.
Stephen Hooper
Yes.
Saket Kalia
That’s great. That’s great. Simon, first of all, always great to have you at the Barclays Conference event. Maybe just to level set here again for the group before diving into it with a little bit with Steve. Can you just recap some of the more important points from the last earnings call that you wanted to make sure we knew, again, just so that we’re on the same page?
Simon Mays-Smith
Yes. I guess it was really sort of three things. One is, obviously, beaten raise for this fiscal year across all metrics. Secondly, we were giving a framework of guidance for next year, not full guidance because no sensible company does that in Q3 the previous year, but to sell — get some important stuff off our chest for next year, to make sure people have their heads in the right place and making sure that people were reading full sentences. They didn’t — go and just reading 9%, but reading the full sentence, which was 9% or more on that.
Talking a lot about the new transaction model, which maybe we can talk a bit about later as a sort of the final shift of us going more direct to our customers. And then sort of final thing we look forward to is the sort of the mechanical rebuild in our cash flow over the next 2 years as — from a trough of this year as we make complete the shift from multiyear upfront to multiyear annual.
Saket Kalia
Absolutely, a lot of fun stuff to talk about in there as well. But Steve, maybe to start with you. So much knowledge here in the design and manufacturing space. I’d love to talk a little bit about the competitive backdrop a little bit. And I think we know the other players here in the space, whether it’s Dassault or PTC or Siemens. Where does Autodesk kind of fit into this mix in your view in the manufacturing sort of market? And what do you say — what would you say sort of customer’s point to in your solution when they select Autodesk kind of manufacturing use case? Does that make sense?
Stephen Hooper
Does make sense. I’d say two things off the back. One would be accessibility and then we tend to characterize that as democratization. So I’d say our competitors probably are more enterprise-focused than happening for the last 30 or so years. It’s pretty difficult to come down market from the enterprise. And if you look at the addressable market in the manufacturing space, the lion’s share is in the mid-market.
And so our growth engine really is in the low to mid-market segment of the manufacturing base. Not to say that we don’t serve the enterprise as well. But you’ve seen this happen in cycles previously. So if you think about AutoCAD, when the company was founded, typically, that market was at that time, dominated by a number of large enterprise 2D systems. I used to use one before I worked with Autodesk as an engineer. I actually used the version of Unigraphics, which is now part of Siemens.
That was $20,000 or $30,000 a seat plus another $10,000 of hardware. And then AutoCAD came out, $3,000 sits on a PC Windows box, a fraction of the price, an order of magnitude cheaper. It was considered Toy CAD at the time. It was considered low end bottom of the market. And typically, what we see is through every cyclical disruption in our industry, the disruptor has started at the low end of the market, matured and moved up. It’s classic innovators dilemma.
I don’t think I can think of a market, maybe others can. But I can’t think of many markets where the high end comes down successfully into the mid-market usually the lower end. And when I say low end, I mean democratized accessible software moving up. So I’d say most of our customer’s kind of rely on us to furnish that high-end capability at a price point that’s affordable, but it needs to be out of the box, self-serve, easy-to-use, fun-to-use and that typically is where we sit in the market.
I think some others have been successful at that in the past, but those products were mainly developed before the people that use them today were born, which is kind of unusual for software. So most of our customers now are of a younger generation and expect more intuitive products. And that’s something we aim to meet.
Saket Kalia
Absolutely. So democratization with AutoCAD, and I’m sure we’re going to talk about democratization with Fusion as well…
Stephen Hooper
Absolutely.
Saket Kalia
Which we’ll definitely touch on. But maybe just to follow up on that point around competition, it feels admire Autodesk and, frankly, some other competitors as well, have talked about sort of just a competitive opportunity around SolidWorks, right, which, as we know, is owned by itself. Maybe for you, Steve. Can we just talk about why now is perceived to be such a right time, right, to potentially displace? And why do we think Autodesk can maybe gain some disproportionate share as part of that?
Stephen Hooper
I think there’s lots of reasons. So software products have a natural product life cycle. And when a product gets to the end of its product life cycle, it tends to blow and it tends to try and defend the price point. It’s got based on additional functionality that many people don’t actually necessitate. I think that possibly is one source of challenge that particular product faces.
I think the [indiscernible] itself recognizes that and has tried to make changes, but in trying to make changes and unveil new technology. They’ve undermined confidence in their current solutions, and they’ve caused a lot of confusion for their existing user base, who I think fill a little disenfranchised, that’s certainly what people that are new to us would tell you. So I think that’s one potential source of dissatisfaction, which creates a competitive share shift opportunity.
For me, I actually pretend to prefer to focus on the value that we can deliver, not undermining our competition’s position. For me, the value that we can deliver that you cannot deliver on a desktop product is generative AI and automation. Now generative AI, everyone is going to say it’s admire climbing up the top of its hype cycle. I’m not so much interested in generative AI specifically as the automation capabilities it delivers.
And that’s something we’ve been focused on now for 10 to 12 years. So you’ll recollect back in 2011, moving to the cloud, everyone told us we were crazy. No one is going to proceed to the cloud. No one is going to want a subscription model. You’re going to lose all your customers. People started to attain moving to the cloud delivered a lot of substantial benefits, but they associate them with what I would call first order benefits, which are things admire collaboration and connectivity, which is great in a supply chain. It’s even better in a pandemic, it’s awesome.
But it’s not the end goal. The end goal is to get to automation. To get there, you have to centralize and proceed data to the cloud, but you also have to proceed all the compute capabilities to the cloud. Once you’ve done that, you’ve got unique data and high volume with the services necessary to edit it where you can train models and deliver automations. They don’t have to be generative AI models. They can be procedural, they can be typical machine learning AI models. In all those cases, though, you can create terrific value that you can’t create in an isolated legacy desktop product.
And that for me is one of the things I think our customers are waking up to. So I think the pandemic accelerated some of that because of the connectivity and remote collaboration. The next wave of that disruption will be the automation capabilities we can deliver with things admire generative AI.
Saket Kalia
Yes, absolutely. Simon, maybe for you. I mean just picking up on Steve talking about the cloud. You made an interesting comparison to the 3 clouds that Autodesk is building to what another great company Intuit did years ago. Maybe you could just sort of differentiate and contrast what we’re doing here at Autodesk versus what they did to sort of furnish some comparability across businesses that were both well familiar with?
Simon Mays-Smith
Yes. So just put that in context, if you sort of look at the external representation, sort of customer-facing representation, which Steve has just been talking about, so can you use sort of something admire Salesforce an analogy for that, which is sort of industry clouds with us building capability and services on it, our customers integrating and building capabilities and service on it, our channel partners building capabilities and service and then having third-party providers providing capabilities and service on it.
And then the internal representation, which is what we’re talking about here, which is our shared platform, which is we call Autodesk Platform Services, is where the Intuit analogy comes in. And I use Intuit because the person who’s done a lot of work on the Intuit platform joined us a couple of years ago. And there’s a bunch of stuff which is interesting about that. We talked all about all of it at our Investor Day in March, and I inspire folks to go and have a look at that.
But there’s a few things that I’d sort of pay attention to as it relates to this conversation. The first one is around sort of common components of the platform and therefore, our ability to share — to engineer more efficiently and with greater velocity and to reduce our technical debt over time. The second thing, which we talked a lot about Autodesk University a few weeks ago, is around data granularity. So moving from big files to granular data, and then you can apply AI and machine learning to that granular data, so you can get all the lot of the benefits that Steve has been talking about.
And then the third thing is around the way that sort of money, the way you communicate with your customers and the way that finances well around the system when we were talking a bunch about that on our Q3 earnings call with the new transaction model, et cetera. So it’s interesting. It generates opportunity for us. It allows us to scale. So long term, some lots of good opportunity from that.
Saket Kalia
Yes, absolutely. Maybe one of those clouds that I want to talk about here, maybe back to you, Steve, is just the Fusion Cloud, right, again, going back to the idea of democratization and making sort of another platform shift. Maybe you could just — I mean could we just talk a little bit about explaining the significance of the proceed to the cloud for the manufacturing industry? I mean those are the competitors that we talked about, they are very far from kind of a cloud journey here. You’ve gotten a head of the curve. Talk to us a little bit about that?
Stephen Hooper
Yes, I mean, we kind of discussed a little bit of it in the last question. So I think first order benefits are, as Simon said, you moved the data to the cloud and you granulize it. So many legacy desktop products deal with proprietary data locked up in a large file format. That has two negatives to it. One, it makes it very difficult for people to work together and access that data together. I bet everyone in this room users admire Microsoft 365 or Google Docs an analogy to that, you all PowerPoints whatever within your own companies.
It’s very difficult to do that if you have a proprietary system whether that is locked up in a file that’s local. You need to be able to granulate the data so you can have concurrent access to it. It also means that if that data model is open, which is not something our competition does, other partners admire Simon said, admire Ansys or admire Cadence can come in and write vertical applications on it, add data to it, read data from it. It can be small, little companies. I met with an AI provider locally who based over in Oakland that does large language model prompt-based features, they can write that into our data model, too, so that we don’t have to build all of that technology ourselves.
So that’s one benefit of moving to the cloud. The obvious one is collaboration connectivity. You can turn the user on within 10 seconds. You don’t have to have an IT administrator infrastructure in your own business to settle this stuff up. It’s flexible. So if you do want to reduce capacity for a period of time, you can turn some stuff off. You can turn it back on. You can basically adjust your infrastructure to suit the demand that you’re meeting in the market.
So I think many of those things are integral benefits of moving to the cloud. I’d say there are other things that are on the horizon, generative AI and all the automation technologies we’re talking about are one of them. You also have access to infinite compute. So most of our simulation services they run in the cloud. You don’t have to have one of these massive workstations tucked away your desk. You can access pretty much infinite compute on AWS’ platform. You could run a crash assess, if you wanted without investing in a massive local high-performance cluster. So those are some of the benefits, I would say.
Saket Kalia
Absolutely, absolutely. I want to shift away from the cloud and talk a little bit about the macro backdrop here, right, which, of course, is always a dynamic situation. In my view, one of the great things about Autodesk’s business is really the diversity of the end markets, whether it’s the A, B, E or the C, if you will, rider manufacturing, of course.
But just given the macro concerns out there, maybe it would be helpful, particularly with all the time that you spent at Autodesk, maybe it’d be helpful to talk about what your business, right, manufacturing has done in prior kind of downturns, right? And maybe now why now the business has seemed quite a bit more resilient, right, then maybe some economic indicators would show?
Stephen Hooper
Yes. I mean in the past, we’ve always enjoyed the benefit of our multiple industries, which obviously diversifies the risk for any one particular vertical. The same manufacturing itself. So many other competitors may have a rich history in aerospace or automotive. So if one of those sub-segments has a problem, they suffer that problem perhaps disproportionately to the rest of the market. So again, our risk is diversified actually within the manufacturing bases. We serve many different segments. We tend to be more horizontal across manufacturing.
I would say in the last downturn, we did benefit, obviously, from the various industry verticals we had going in and out of that cycle at different stages. This time around, obviously, we’re in a subscription model. And so that subscription model, I mean, it’s a fantastic thing. Not only does it give you a more predictable business, it also gives you a more resilient business in a time admire this.
So I also think you got to think about it from a customer’s benefit perspective. So they have the benefit. The perceived benefit to them is that they can turn software services on and off more flexibly. In a downturn economic cycle, it actually works in our favor. We would adopt it, not fear it. Any customer that’s looking to save cost or incorporate more flexibility in their IT infrastructure has a much better opportunity of doing that with us than some of these other high-cost solutions that are pretty much fixed.
They’re pretty hard infrastructures to change in the back dynamically. It takes maybe 3 years to execute them. And if you’re going to upscale or downscale them, it takes another 2 years to do it. The flexibility that we can offer assures our customer more resilience in the downturn. It also means that they have the value of operating on that data in the cloud. And if they want to proceed off of our platform, they’re going to lose that value.
And so I think that kind of subscription entitlement combined with the value of cloud data capabilities means that we’re much more of a critical partner to a customer, which makes us less likely to be deprecated through an economic downturn.
Saket Kalia
Yes, absolutely. Simon, maybe we can segue over to you with some more financial questions because it was just — I think one of the biggest things coming out of the last call was just this new agency model, right, that more direct relationship with the customer. Can you just maybe recap a little bit? And why that’s so important to Autodesk strategically?
Simon Mays-Smith
Yes. So we’ve been over multiple years, making a transition from a model which was essentially designed to ship CDs across the globe 30 years ago to a model where we have a modern SaaS relationship. So part of that is around the way you price, where you’re moving from a perpetual license to subscription. Part of it is moving from multiyear upfront to multiyear annual, which we were doing a couple of years ago.
And then this is kind of the final big piece where you have moved from a what’s called a 2-tier distribution model with a distributor and a retailer to a direct and what’s called an agency model where you have a direct billing relationship with your customer. So really, it’s around — and then once you have a direct billing relationship with your customer, that enables a whole of other good stuff, which I’ll come on to in a second.
So that’s a sort of macro context. And the reason why you don’t do all three of those things at the same time is because they’re big rocks. And if you do them at the same time and something goes wrong, then you’ve got some business continuity issues potentially. So you have to sequence them and do them sequentially rather than at the same time.
So in terms of what this will do, it will proceed us from a sort of 2-tier distribution market with what’s called a buy-sell model, where we essentially sell our product to the discounter list to our channel partners and then they sell less of a discount to their customers, which means we don’t set the price of our products unlike almost any other company to our customers. It’s our channel partners who do.
So one of the things that will happen is that we will proceed to what’s called an agency model where we will set the price of the product to the customer. And then our channel partners will then contend based on the value of the services that they’re offering rather than the amount of the discount that they’re giving away to the end market. So that’s one of the things.
The second thing is that we will be in-sourcing some of the services that are being provided by the distributor. So we’ve built our own billing platform, on which we are channel partners and our customers will sit. And so we will then start servicing directly and providing those services, which historically been provided by our distributor. And what the benefit we’ll get from that other than having some efficiency savings from that process, we think there’s really two things as it relates to the customer.
The first one is for the first time, we will be able to see both usage data and purchasing behavior within the customer base, and we think that will show up wide space within our customers where there’s opportunity for us. And secondly, it will make it easier for our customers to purchase our products. So they’re using a channel partner today, and they want to use AutoCAD, they have to go the channel partner, get a proposal, et cetera, and that can take time. Whereas with the new model, they just have to hit a button and they’ll have it available to them immediately. And we think that means that they will get more of the products that they want to consume.
Saket Kalia
Right. Feels admire generally, it just removes some friction from the sales process, right? And it gives a lot more visibility into how customers are using the tools?
Simon Mays-Smith
Yes. And what it will do for us is it will also proceed all of our sales and marketing dollars into one place, and we’ve essentially been in two places. One in pre-revenue and one in the operating cost. And then by moving it into one place, we think we’ll then be able to — having it all in one place, we can improve it as well going forward.
Saket Kalia
So great segue into the next question I think that Debbie gave a good bit of guidance just on how to think about, what the transition could do to the income statement and cash flow. Could you just remind us what she said just on the impact to revenue, not quantitatively, right, but just qualitatively, the impact to revenue, the impact to operating profit and then margin free cash flow?
Simon Mays-Smith
Yes. So it’s really math, which is, if you look at our revenue, we essentially report net revenue and that is comprises of gross revenue, which is the effective price, which the customer pays, less the what’s called contra revenue, which is the amount we pay our channel partners. And the net of that is the net revenue, which is what we report. Under the new model, we will report gross revenue. The contra payments will proceed from pre-revenue to sales and marketing costs. So what will mechanically happen is we will have higher revenues, we will have higher costs, but profit dollars will stay about the same, which means mechanically that our margin percent will be lower.
Saket Kalia
Right. So it’s really just geography.
Simon Mays-Smith
Correct, correct.
Saket Kalia
Got it. Got it. That’s helpful. And no change to free cash flow as well, right?
Simon Mays-Smith
Correct. And then as I said, as we then improve that, that will then create opportunities to better profit dollars and cash flow dollars over time.
Saket Kalia
Got it. Understood. Understood. How long should it take for this transition to take place? I mean that seems admire a big undertaking, a global business here, of course. How do you think about timing? And to the extent you can disclose, I mean, what’s the total revenue opportunity that we could be going after? What could that contra revenue sort of contribute once this is sort of all said and done?
Simon Mays-Smith
So we’ll talk a bit more about that probably in February when we give full year guidance, and I’ll explain why, which is we’ve essentially been testing this model for some time for 18 months. So we started off with a single product and a new product, so very simple. So low volumes with a single product called Flex. We then told you in Q2 that we were testing in Australia, and that assess started about 2, 3 weeks ago. And essentially what we’re doing there is we’re testing it on two dimensions. One is around breadth. We’re substantially testing all of our products. And then the second one is volume. Australia obviously has more volume in Flex. So that’s beginning to assess two additional dimensions.
Depending on how that assess goes, we will know how much more engineering we need to do, if any, before we then proceed on to regional tests. And simplistically, there are two types of regional tests. So for example, America, where you have a massive volume assess because it’s big, but single language, single jurisdiction. In Europe, you have a volume assess, but it also has a bunch of other dimensions around different countries, different languages, different legal systems, different currencies as well. So those are different dimensions of complexity.
So we have to make sure that the billing system can handle all of these different dimensions of complexity. So because we don’t know yet whether it can, that will establish the speed of the rollout of the transition. And then the second thing to grasp is that when we transition a region from the date, we don’t transition immediately all of the old revenue that’s already been put on the balance sheet and billings.
We only recognize the incremental, the new business and the new renewals as they come through over time. So what will happen is it will bleed in and build the effect over time that transition from the contra revenue — from contra into the operating costs will essentially bleed in over time. What that means is that the — whatever the impact is in fiscal ’25, it will be begin in ’26 and bigger in ’27. It’s almost admire a subscription stack building in it over time.
Saket Kalia
Sure, absolutely. So maybe we’ll dovetail that — sort of dovetail into the sort of preliminary outlook that we talked about for next year, which is 9% plus, right, revenue growth? Maybe a couple of questions there just on this agency model. One of the questions that I had coming out of the earnings call, I’m sure you did as well was well, was, it’s 9% plus, and you’re getting a benefit from this agency model. The real growth profile is much lower. Talk to us about why that may not be correct?
Simon Mays-Smith
Well, I think really sort of two things. As I said, we said 9% or more. We didn’t say 9%. So that doesn’t preclude an outcome that is within the 10% to 15% range that we’ve talked about on average now, but that was an average of over time range that we talked about at Investor Day. But the second thing is to grasp which we talked about on the call, which is qualitatively what is going into the 9% or more statement, which is some headwinds from the pace of new business growth this year, which has been slower consistent but slower than it was last year. And that’s partly because of the economic cycle, and it’s partly because of noneconomic factors.
So an example of that, noneconomic factors, you can actually see in our P&L this year with our APAC growth has been slower, and that’s because China lockdown last year, which means we’ve got less business coming off the balance sheet through the P&L through our APAC business this year. So this year, we’ve had the right to strike, and that will have an impact on the new business in the media and entertainment business, and that will have an impact on revenue growth next year. So there are both cyclical and noncyclical reasons why a new product business accelerates and decelerates.
The second one we’ve already talked about, which is the impact — well, I’ll actually come back to that. Second headwind is FX. Again, we haven’t quantified it, but we hedge our revenues. And so — and FX has been moving around quite a bit. But from what we know today and where rates are, we expect to have a headwind as well next year.
And then the third thing is the absence of the true-up revenues that we’ve had. So back in 2020 bunch of our customers who are predicting future usage of large enterprise customers and they predicted cautiously because of the pandemic. And so they’ve had to buy extra tokens this year at the end of their contracts, and that — that’s a one-off which won’t recur next year, right? And so that creates a bit of a headwind for us next year. So those are all headwinds. And then in terms of tailwinds, we’ll get some tailwind from the new transaction model as we report gross revenue rather than net revenue as well.
Saket Kalia
Absolutely. And really, the speed of that will dictate…
Simon Mays-Smith
[Multiple speakers], yes, correct.
Saket Kalia
Yes, absolutely. Absolutely. We’ve got three or four minutes left here. I’m going to shift to free cash flow and maybe one or two last questions here. Any questions here from the audience before I proceed over. Maybe Simon back to you. I mean — so we talked about revenue. We talked about sort of the change in geography. The other thing we talked about in the last earnings call was just the path, right, around free cash flow normalization right? And we said that really wasn’t going to be very much of a linear path or there was some sort of considerations for this year compared to next year. Can you just remind us how we should be thinking about that? And also what is really the North Star, right, on kind of what normalized free cash flow looks admire in terms of rules and such?
Simon Mays-Smith
Yes. So starting at the end is that we’ve gone through a model of transitioning from multiyear contracts that are typically 3-year contracts where we’ve been paid upfront. So let’s say that’s a 3-year contract for $1 a year that will be getting paid $3 in the year 1, $0 in year 2, $0 in year 3. To a contract where we’re doing signing multiyear contracts be getting paid annually, so $1 a year. So — and we made that transition on March 28 for the vast majority of our business, the emerging markets business.
And so at the beginning of this year. So what it means is this year, we have a big drag on our free cash flow relative to last year because we were essentially trading $3 last year, $1 this year. And that may sound terrible except when you start looking forward because next year, what will happen is the ’24 cohort — the fiscal ’24 cohort, which the calendar ’23 cohort, we’ve got January year-end, we’ll come back and pay us the second dollar of their contract and the fiscal ’25 cohort will pay us the first dollar of their contract.
And then the following year in fiscal ’26, the ’24 cohort pays the third dollar of their contract. The ’25 cohort pays the second dollar of their contract and the ’26 cohort pays the first dollar of their contract, and you see magically then we rebuilt that $3 of that subscription stack. So that’s mechanically what’s happening underneath. We said the path would be nonlinear. And the reason we said the path will be nonlinear is that we had about $200 million of cash flow in our first quarter, which came from the old model.
So that makes this year’s cash flow not comparable with next years. And so what we’re saying — what we said last 2 weeks ago is that you need — if you want to differentiate this year’s cash flow with next year’s cash flow, you need to take out that $200 million from this year’s cash flow, and that will make this year’s cash flow comparable with next year. And what you can see from that is that we’ll see pretty good growth.
Saket Kalia
Got it. Got it. Well, maybe in the last minute that we’ve got, I mean, just the natural last question. You’re generating such nice cash is just capital allocation. You don’t talk to us a little bit about how Autodesk has thought about capital allocation and how that might change down the road, if at all?
Simon Mays-Smith
So we have, hopefully, a pretty clear and pretty normal capital allocation framework, which is to invest organically to — investor acquisition and to buy back shares to offset dilution. We’ve been applying that framework flexibly.
So for example, over the last year or 2, we’ve changed the way that we buy back shares from buying in-year dilution only. And as the share price has come down, we’ve been buying forward the dilution, so essentially buying back future years’ dilution as well. And the reason for that is that the reduction in the share price has enabled us to buy back shares below the cost that we’ve been issuing them to our employees.
Saket Kalia
That’s opportunistic.
Simon Mays-Smith
So — opportunistic. So as a corporate finance trade, that makes sense for us to do every day of the week. There’s also been an issue which is the valuation. Asset prices have reset in many parts of the world because of higher interest rates. But in some areas, they haven’t. But particularly in certain parts of tech, forces of higher interest rates and the realization that has an impact on value takes time to come through. But at some point, that will change as well, and we expect to have the opportunities there too.
Saket Kalia
Got it. Got it. Well, I think that’s about all the time that we have left here. Steve, Simon, thanks so much for the time. This was really educational and really learned a lot.
Simon Mays-Smith
Great.
Saket Kalia
Thanks a lot, yes.
Stephen Hooper
Thanks.
Simon Mays-Smith
Thanks, Saket. Good to see you.
Saket Kalia
Thanks.
