TechTarget - Earnings Call - Q3 2020

Transcript

Operator (participant)

Good afternoon and welcome to the TechTarget Q3 2020 Earnings Release Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would like to turn the conference over to Mr. Charlie Rennick, General Counsel. Please go ahead.

Charlie Rennick (General Counsel)

Thank you, Ashley, and good afternoon. Joining me here today are Greg Strakosch, our Executive Chairman, Mike Cotoia, our Chief Executive Officer, and Dan Noreck, our CFO. Before turning the call over to Greg, I'd like to note that some of us are joining you today remotely, and I would like to remind everyone on the call of our earnings release process. As previously announced, in order to provide you with an update on the business in advance of the call, we posted our shareholder letter on the investor relations section of our website and furnished it on an 8-K. Following Greg's introductory remarks, the management team will be available to answer your questions. Any statements made today by TechTarget that are not factual may be considered forward-looking statements. These forward-looking statements are based on assumptions and are not guarantees of our future performance.

Actual results may differ materially from our forecast. Please refer to our risk factors in our annual report on Form 10-K and our quarterly reports on Form 10-Q filed with the SEC. These statements speak only as of the date of this call, and TechTarget undertakes no obligation to update them. We may also refer to financial measures not prepared in accordance with GAAP. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures accompanies our shareholder letter. With that, I'll turn the call over to Greg.

Greg Strakosch (Executive Chairman)

Great. Thank you, Charlie. We are seeing a clear re-acceleration in our business, as evidenced by us beating our guidance in Q3 and our forecasting almost 20% revenue growth in Q4. For Q3 2020, revenue grew 7% to $36.2 million. Adjusted EBITDA grew 12% to $12.5 million. Adjusted EBITDA margin was 35%, up from 33% in Q3 2019. Long-term contracts represented 35% of revenue in the quarter. Adjusted Free Cash Flow was $9.6 million, representing 77% of adjusted EBITDA. For Q4 2020, we expect revenues to be between $42 million and $43 million. We expect adjusted EBITDA to be between $15.6 million and $16.4 million. We are optimistic about the future as we believe we are in the early innings of a very large opportunity as our customers focus on making a strategic transition to making their sales and marketing organizations data-driven.

We are cautiously optimistic that the re-acceleration we are seeing as we close the year will continue into 2021. I will now open the call for questions.

Operator (participant)

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Your first question comes from Jason Kreyer with Craig-Hallum. Please go ahead.

Jason Kreyer (Senior Research Analyst)

Hey, gentlemen. Good afternoon. Wondering if you can just spend a little bit of time walking through some of the enhancements that you've pushed out with the new prospecting product? And then, is that completely rolled out to everyone, or is that more of something that's going to be scaled out over time? And then, I guess my follow-up there would be just on the pricing increases that you've implemented, just wondering if you've gotten any pushback there or if people are seeing the incremental value in the platform?

Mike Cotoia (CEO)

Great. Hey, Jason. Excuse me. It's Mike. In terms of the enhancements, we're really excited about what we just rolled out for Priority Engine. I would say our September release was the largest update and rollout since the inception of the product. And let me just step back. When we talked about Priority Engine in the past, we really had a strong focus on working with corporate marketers. And marketers have a very specific use case or several use cases. They may have an ABM strategy, a nurture strategy. They want to build their database. There's a one-to-many type of approach. One of the things that we did in our September rollout was we updated the user interface, and we really made it focused on sales use cases. And that was very key.

Again, stepping back to the marketing side, we have account intelligence and account insights that we rank every week, week over week, day over day, and it allows our marketers to target these accounts. And within those accounts, you have the active prospects who are the actual opt-in users. What we launched was prospect-level intelligence in September. And with that user interface, which I'll dive into in a minute, along with that active prospect user-level intelligence, this is really enabling and empowering our sales teams within our customers to understand the intent signals at the individual active prospect level. They can help rank and prioritize within their own territories. So now, if I'm a salesperson, I have two views, and I can toggle back and forth.

I can look at my territory each day or each week and look at the list of accounts and rank them and prioritize them and mobilize my selling efforts or calling efforts. But then I can quickly tab over and rank and prioritize the individual active prospects within my territory. And I can create a call list immediately. So, for example, Mike Cotoia inside of Gillette may be the most active prospect in my territory, but Jason Kreyer inside of Craig-Hallum Capital Group could be number two. So it really enables better call, better sales interaction, and better insights. The other thing that we're really focused on is that we've had a tighter integration, and that's a big focus for us in our customers' workflow. We've done a really good job on the marketing side, and we're really making good penetration on the sales side.

Marketers and sales leverage data in different ways. As I mentioned earlier, a marketer's approach is a one-to-many, maybe an account-based marketing strategy, a nurture strategy. A rep works in his or her territory and has weekly call lists and has their own workflow. Typically, it's within Salesforce. We have the Visualforce tab and integration into Salesforce. Now, as I'm a rep, I can see all the intent and the insights at the individual active prospect level and at the account level while I'm in my workflow. If I've identified a new contact that's not in my current territory inside of Salesforce, I can click to add that contact seamlessly. Really building a cohesive and easy-to-use workflow for both marketing and sales has always been on our roadmap. I would say the September release has been really, really impactful.

Just to give you some additional stats, which we talked about in the shareholder letter, we've seen our page views within Priority Engine increase by 80% since the beginning of the year. What I mean by that is our customers are on their Priority Engine, and we track all their usage. The portal interactions from people who have self-identified as sales professionals within our customers is up 40% since the September launch. We're pretty bullish on that, and we're going to continue. We have a roadmap as part of your second question of additional features and functionality. A lot of it will focus on leveraging our customers' first-party data along with our data. We have other key engagement offerings that we're going to be integrating into this as well.

So we have a very robust product development roadmap strategy, and you'll see that come out in the first half of 2021 and continue moving forward. In terms of the pricing, we've built a lot of features and functionalities for our customers. And as I mentioned, the new user interface, the integration in Salesforce, some of the active prospect individual intelligence that we provide, we have not had pushback on the pricing so far. So we see that as a positive sign going into 2021.

Jason Kreyer (Senior Research Analyst)

Perfect. A lot of good color there. Just one more from me. Wondering if you can unpack some of the commentary from the letter. You said that subscription offers kind of - sorry, subscriptions offer more resilient or predictable model in the downturn. But then we've kind of seen the Priority Engine growth slow the last two quarters. So I'm just wondering if you can kind of unpack those two statements and give some more color on that.

Mike Cotoia (CEO)

Yeah. Okay. I think I want to break that down into two things. When we take a look at the overall enterprise IT environment, let's take this back five, six, 10 years ago where a lot of our customers were selling, let's call it traditional hardware: servers, storage, networks. Today, when you take a look at what our customers are selling to their customers, there's a big shift to digital transformation. Their customers have to move towards a digital-ready environment no matter who they are now. And that benefits our customers because it's no longer just selling a point-in-time product where they're, I don't want to dump and run and move on. They're selling an ongoing solution. So for our customers, they have some visibility because IT has sort of moved away from a discretionary type of spend to more of a continuous business type of investment.

So for us, we look at it and say our customers have better visibility into it. They've transitioned their business to meet and align with some of the current-day needs in terms of IT and line-of-business types of solutions, and it provides less volatility. Again, if I roll the clock back five, six, seven, eight years ago, if we were going through this pandemic and most of our customers were selling hardware, their business would drop significantly, and that would have a trickle effect on us. Now, how does that relate to Priority Engine in our business? Because you're right. We have a subscription business, and we have non-subscription business. I think when you enter into a pandemic, which we've entered into, the first product, the product that will have the most impact on that is Priority Engine.

And when I talk about that, it really focuses around net new customer acquisition and renewals. So if you have a net new customer, it might be a smaller customer, they may not be ready to commit to an annual or a multi-year deal. If I'm another customer and I'm up for renewal and I'm trying to navigate through this pandemic, I may not want to commit to another year or annual deal. But what we're seeing is those customers not leave TechTarget. They are shifting towards our other products. Remember, our model has been in place for 21 years, right? We are at the hub of our business. We are a publisher of relevant content to help enterprise IT and line-of-business professionals research upcoming projects. We are a trusted resource. We have a great relationship with our audience because there is a pure give for the get.

So, as these folks, what we've seen over the last six months during navigating this pandemic, we've seen a big increase in lead generation and other data product customers coming in. And our goal on that is we will make sure we service these guys well. They view us as a trusted solution. We will then transition that into an integrated online campaign and ultimately take these new customers when there's more clarity and visibility in the market to an annual long-term data subscription model. And I would say during that, I mean, our long-term revenue was 35%. I think we're holding pretty strong. I know we're up single digits on that. But being able to do that, capture the money in our other areas, and then have a plan to get all these new customers into long-term subscriptions bodes well for us in the future.

Jason Kreyer (Senior Research Analyst)

Got it. Thanks for all the color. Much appreciated.

Mike Cotoia (CEO)

You bet.

Operator (participant)

The next question comes from Ryan Meyers with Lake Street Capital Partners. Please go ahead.

Ryan Meyers (Senior Research Analyst)

Again, thanks for taking my question. So revenue came in above your guys' guidance. So my first question is, what would you attribute most of that revenue be to? Is it higher than expected spend from your global top 10, or any color there would be helpful?

Mike Cotoia (CEO)

Yeah. So we break down, Ryan. So we take a look at our customer mix. And as you see, our global top 10, we actually did see a little bit of an increase quarter over quarter, but they are down about 15% from previous years. All other customers are up 17% and 11% respectively. Where we saw this, we continued to see really good movement and acceleration in our international efforts. And that's across all regions. We have offices throughout EMEA as well as Latin America, and we also sell into APAC. And there's a couple of things that are accelerating the growth there. Number one, our model, which has been in place for 21 years as a publisher, has a very consistent opt-in compliance approved methodology for our registered members.

And there's a lot of privacy and compliance regulations that you've all heard about, whether it's GDPR, CCPA, CPRA that just came out in California. Having an opt-in database for your membership is critical right now as we navigate through that. So I think we've become, again, a trusted solution. Secondly, we're seeing throughout those regions, as well as now in North America, a transition of face-to-face event budget moving into online. So you see that heavily. It's prevalent in EMEA and APAC, as well as in North America. I don't think that shift is. I think that the face-to-face event business is going to change forever. I mean, I'm not saying it's going to go away. There should be some business that comes back. But what customers are doing, they're accelerating their digital strategy. Our customers are.

We may capture those with a lot of, I'll say, content syndication, content marketing, lead generation efforts because they understand that they still need to get in front of their prospects and their existing customers through digital methodologies and digital programs. They understand the TechTarget model of really investing heavily in content through our editorial investments, growing these communities, having active members who are opt-in registered members. We're seeing a big increase in our lead gen revenue in those quarterly or semi-annual campaigns. I'll go back to what I spoke to Jason about earlier. This increase in net new customers provides a good opportunity for us because as they work with us on these lead gen campaigns, we then have a playbook, a game plan to integrate them into other offerings that we do and ultimately bring them into a long-term data subscription.

So that's where we're seeing most of the growth. In international, as you can see, our business is up 30%. We feel good going into Q4, as you can see by the guidance, and hopefully that continues some growth in 2021.

Ryan Meyers (Senior Research Analyst)

Okay. That's helpful. And then last one for me. So you said in today's prepared remarks that you continue to see smaller customers hesitant to commit to the longer contracts. And I know you called that out last quarter. Have you guys seen any sequential improvement in this area?

Mike Cotoia (CEO)

Yeah. I would say it's modest, but nothing to really improve on. If you look back at this when we reported on Q2, that was right at the beginning of this. It was almost a lot of these companies just stopped - not stopped, but really froze and had to really assess their budget. A lot of these small companies are VC-backed firms. They're looking to cash flow, they're hiring a lot of people, and they had to navigate it. I think people are starting to see - customers are starting to see that there is still a lot of uncertainty out there, but the world did not end. And they have to stay in front of their prospects and customers. So we're seeing some of those folks through our product, through our offerings, continue to sign up for some longer-term deals.

But if not, we want to capture them through our other deals and then transition them into long-term data subscriptions.

Ryan Meyers (Senior Research Analyst)

Great. Thank you.

Mike Cotoia (CEO)

You're welcome.

Operator (participant)

Your next question comes from Marco Rodriguez with Stonegate Capital Markets. Please go ahead.

Marco Rodriguez (Director of Research and Senior Analyst)

Good afternoon, guys. Thank you for taking my questions. Just wanted to maybe see what your thoughts were in terms of the guidance and the impact of parts of Europe that seem to be kind of getting ready to go down into some form of a lockdown again. How are you guys kind of thinking about that and its particular impact in Q4?

Mike Cotoia (CEO)

Great. Thanks, Marco. I mean, this is we experienced this in Q2, right? A lot of folks started having a lockdown across the globe and in Europe as well. They announced a recent lockdown throughout a lot of Europe right now as the cases go up. In terms of how we predicted, I mean, we are still seeing our customers who had previously allocated and budgeted for face-to-face events, they still have a need to get in front of their customers and their prospects. And they're looking to leverage, and all of our customers are trying to look to leverage the right data to help transition their sales and marketing efforts. I think this whole face-to-face shift, face-to-face event shift where field marketers would allocate most of their budget was allocated towards events is now being allocated towards online, digital, data-driven. So we still have healthy projections for EMEA in Q4.

Obviously, there's some uncertainty. I mean, but as you can see, we provided some relatively almost, as Greg mentioned in the shareholder letter, almost 20% growth overall, and that's growing across all regions, including EMEA.

Ryan Meyers (Senior Research Analyst)

That's helpful. And then how should we think about that international business as it relates to sort of mix of your offerings there, whether it's the movement from event to digital Priority Engine and kind of branding? How should we be thinking about that?

Mike Cotoia (CEO)

Yeah. I would say I still think the international markets tend to drag a little bit behind the U.S. markets in terms of marketing campaigns and services and leverage intent and leveraging purchase intent for their marketing and sales transformation. Or I'd say right now, with the COVID and the pandemic situation, I think it's accelerating a lot of these movements across the board right now. And people are going to reassess everything that they're looking at. So if I am the CEO or the CFO of a company and I get through 2020 and I say, "What about one of our customers?" And I say, "Gosh, you know what? I navigated through this. In 2019, I spent X amount of dollars in events.

But in 2020, I was able to navigate and I spent X minus 70%." I think that they're going to end up putting those budgets towards online to help scale, drive continuous interaction. And even if it starts with lead generation and content marketing offerings integrated with some of the brand solutions, at the end of the day, our customers are really focused on leveraging the right intent throughout their marketing and sales cycles when they're in market. So I think Priority Engine plays a really good place in that as we start transitioning folks from events to content syndication, from content syndication to integrated online solutions, from integrated online intent-driven solutions to Priority Engine integrated campaigns. So I think it bodes well. Obviously, we'll know more in the next 90 days as we finish the year and we talk to you guys in February on this.

But I don't have a crystal ball, but I think this plays well for us in the long term.

Ryan Meyers (Senior Research Analyst)

Got it. And last quick question, kind of a high-level question here. One of your competitors recently announced an acquisition of a company that provides sort of an AI-powered buyer intent data solution. So I wanted to maybe share your thoughts on that technology and also how you might be thinking about this from a competitive standpoint?

Mike Cotoia (CEO)

Yeah. I mean, in that competitor, that was their, we're talking about the same competitor. I think you're talking about, is it ZoomInfo?

Ryan Meyers (Senior Research Analyst)

Yeah. Yeah.

Mike Cotoia (CEO)

Yeah. So they acquired a company, a small company that talked about AI-powered real-time intent. That was their supplier before. So they acquired the supply. I think that's probably a smart move on their part, but I don't think it changes the offering. And when I take a look at it, they do a really good job around contacts and cleansing their contacts. If you take a look at what we're doing with it, what we have is what we call real and observed first-party purchase intent. You have to start with investing in content. We are 100% focused on the enterprise IT market. We have the right engagements coming in where we know which people are looking at which vendor content or which editorial content or peer-to-peer content. We're doing a search on a very specific technology segment within a very specific region. That's real.

It's very difficult to leverage things like third-party cookies or bidstream data. There's a lot of questions about that. It's only at the account level, and you really don't want to muddy the waters on that. So our approach is being very transparent. Number one, as I mentioned, we focus on providing the right engagement signals, the intent signals, and we get that because of our content investment. And we're the largest place on the web where enterprise IT vendors publish their content through their marketing efforts. And we know 100%, or we know and we deliver 100% transparency. I can tell you those active buyers were on one of our 146 enterprise IT community websites. I can tell you what articles they read. I can tell you what vendors' white papers they downloaded, what webcasts they viewed, what search terms they had.

That's real and observed intent and engagement signals that will help power and transition our customers' sales and marketing efforts to become better data-driven and drive more opportunities early in their sales cycle.

Ryan Meyers (Senior Research Analyst)

Got it. Very helpful. Appreciate your time, guys.

Mike Cotoia (CEO)

You're welcome.

Operator (participant)

Your next question comes from Aaron Kessler with Raymond James. Please go ahead.

Aaron Kessler (Managing Director)

Great. Thanks for the questions. First, maybe just on the Q4 revenue guidance, I believe it implies about 17%-19% growth, obviously a big acceleration from Q3. Can you expand a little bit on this, just how much this might be the shift from events, as you talked about, price increases, the new sales offering, normalization of IT spend, etc.?

Mike Cotoia (CEO)

Sure. Yeah. I think, first of all, some of it is being driven by the shift from events to online. No doubt about it. And we're seeing that internationally as well as in North America. I also think there's some catch-up, some pent-up budget with our customers. Our reps are very close to our customers. They've been very close throughout this entire pandemic. We've had the conversations with our customers. As they look to shift, they may have reduced their, or eliminated their event budget, but they kept some of that budget within their coffers to make sure that they can leverage it if the world didn't end. Our conversations have been pretty good right now where they have end-of-the-year budget. They want to use it. They want to look at it, whether it's through content marketing, content syndication, lead gen efforts.

Conversations we're having with our clients are TechTarget viewed as a trusted resource. We know if we can't get to our customers or prospects in a face-to-face event setting, we absolutely know who we trust to get to them online and digitally and through intent offerings. So I think you're going to see a lot of that end-of-the-year flush come our way. Those are the conversations we're having on it. And I don't think you'll see the price increase. You might see a little of that now, but a lot of that you'll see in 2021 and 2022.

Aaron Kessler (Managing Director)

Got it. Okay. Great. Just maybe a quick question on the additional sales features that you've added to Priority Engine. How should we think about how much this expands the TAM? And then kind of is there a go-to-market strategy to try to expand your relationships with the businesses? And then maybe it'd be good to get some color on how many salespeople were using this versus marketing people previously as well. Thanks.

Mike Cotoia (CEO)

Yeah. In terms of expanding the TAM, I think we still have a lot of runway with our marketing focus. Marketers are still in the early innings of transitioning and leveraging data to transition their efforts. There are a lot of different data signals out there. I always refer to our data as very clean, very transparent, so we're still going to continue to focus within our marketing base. Our customers have several different use cases on the marketing side. They also have offices across the globe. We have a lot of runway of if somebody signs up for a U.S. license, we want them to sign up for a LatAm license, France, Germany, England, APAC, and break it down by countries, and we have a really good roadmap on that.

In terms of increasing it to the sales use case, that's important to us because marketing has a lot of focus on getting the right data and driving the engagement and marketing their solutions and their company, and they want to make sure that they bridge the gap from what they're doing and make a bridge over to sales, so sales is using that same data to understand what the campaign's going on, can really mobilize and prioritize and make this impactful, so I think we're very focused on making sure that we have a very easy-to-use sales application here, which is much different than the marketing application. A lot of it will focus on some of our integration strategy into Salesforce. We have hired some folks to help out and train the sales teams within our customers.

Our marketers love that because if their sales teams are leveraging and seeing success out of what marketing is investing in terms of Priority Engine, that only makes everybody happy. We shifted to next year. Part of this upsell is a seat license. You have more sales reps using it. You're going to have more revenue on the seat license. I mentioned in the shareholder letter, we've seen a 40% increase in people that have identified themselves as a sales title within our customers using the portal since September. Over the last 30 days, we've seen a big success on that and a big growth on that. We're going to continue that. That's a big focus.

So I think it provides opportunity on both expanding your TAM, expanding relationships that we have within our organizations, and connect the dots between marketing, sales, inside sales, outside sales, field marketing, so we feel we're in a pretty good position on that.

Aaron Kessler (Managing Director)

Great. Maybe just quickly, I think in the shareholder letter you mentioned Priority Engine page views increased about 80% since the beginning of the year. Is that a mark of big acceleration from what you were seeing maybe in 2019?

Mike Cotoia (CEO)

Yeah. So it's a lot that is, yeah. So page views grew 80% from the beginning of the year. That's an increase from the previous year. We didn't report what the previous year was. We're seeing marketers more engaged on that, different use cases, other people on the marketing team, some channel applications within our customer side for channel marketing. So we're seeing that. What we really want to make sure we highlight. So that's important because we want people not only to visit it once and use it once. It's got to be part of their workflow. And that's been important for us with the marketing side. We learned a lot as we developed what we were doing in our strategy around making marketers have marketers be very sticky inside of Priority Engine.

And we applied those learnings to our sales use cases in the user interface and the integration into Salesforce and into our customers' workflow. And we're looking to expand upon that as well. So the impressive number, I think, is when we finally launched this upgrade in September on the sales use case that we saw a 40% increase in people that have identified themselves as sales, not only going into the tool but with repeat users and visitors using it multiple times. And we track all that data every day and every week. So I think there's a good opportunity there as well.

Aaron Kessler (Managing Director)

Got it. That's helpful. Thank you.

Mike Cotoia (CEO)

You're welcome.

Operator (participant)

Again, if you have a question, please press star then one. Your next question comes from Allen Klee with National Securities Corp. Please go ahead.

Allen Klee (Managing Director and Senior Equity Research Analyst)

Good evening. I wanted to focus on looking at 3Q versus 4Q, what you're thinking about, and a few things related to that. One, with the international, I heard you say that there's more people buying, but they're not buying Priority Engine as much. It's more of your other products. And how do we get to feeling confident that that's sustainable? And then also with your global top 10 customers, you had said in the letter that they're up sequentially in the third quarter, and it says that you expected them to be up for the fourth quarter. Does that mean that in the fourth quarter, you expect them to be up year-over-year?

Mike Cotoia (CEO)

Yep. Good question, so let me step back on the international side. I said at the beginning, the international business is really doing well across all phases. We're seeing good growth in Priority Engine, but we're also seeing good growth on the lead gen side, so our customers, I think one of the questions was, if you have these small customers and they're hesitant coming on, what will they do? In terms of international business, our Priority Engine numbers were up well. They drove the growth on the international side for the company overall, so we will continue to see success on that because, Allen, I look at each of those regions, whether it's APAC, America, or Latin America, they lag behind the United States in terms of transition on the technology side and on the marketing side. They are starting to see an acceleration.

So again, Priority Engine across all of our content marketing initiatives have done very well internationally throughout the last couple of quarters. I would say the only thing that hasn't grown would be our branding. But that typically comes from our top 10 global customers. And whenever there's a pullback, they will pull back on their brand investment. But again, our brand revenue is typically between 10%-14% of our overall revenue. It's nice revenue to have, but it's not the revenue that we're focused on in terms of the overall long-term focus of the business. In terms of the global 10, I expect it to be both in Q4. Sequentially, we expect them to grow, and we do expect them to grow year-over-year. We are seeing some penetration with some of these accounts. We are looking at some nice long-term deals with some of these accounts.

The one thing I will remind you is I never want to be reliant on these accounts. They're a good portion of our business, but today they represent about 20% of our overall business. 10 years ago, they represented close to 40% of our business. So if there was ever a pullback in a market like we could see now or there was a recession, that would have a material impact on us. Today, we have much better customer concentration spread across the global 10 and all others. And that bodes well for us, not only short-term and long-term. And you've been covering us for a while. You've known that that's been a pretty big initiative for us to keep that around the 20% total customer share.

Allen Klee (Managing Director and Senior Equity Research Analyst)

Thank you. And last question. I thought I heard you say that you thought that the price increase from Priority Engine we would really see in 2021 and 2022. But did that, or maybe I misheard that. Did the price increase mostly go in in September, or does it get kind of over time it goes in with different customers?

Mike Cotoia (CEO)

It goes in when customers are renewing or they start signing up for an annual subscription. So even if we got some customers that signed up now, which we have, they would only recognize one quarter of that full annual subscription for the price increase. You'll see it was we had the November, December as people buy new annual or renew or buy new annual subscriptions. Because it's ratably recognized, you're going to see that over the 12 months and just where we are in the calendar year. We only have two months left, three months left. So you'll see most of that revenue in 2021.

Allen Klee (Managing Director and Senior Equity Research Analyst)

Okay. Thank you. Good job.

Mike Cotoia (CEO)

Thank you.

Operator (participant)

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.