MobileIron's (MOBL) CEO Barry Mainz on Q4 2015 Results - Earnings Call Transcript

| About: MobileIron, Inc. (MOBL)

MobileIron, Inc. (NASDAQ:MOBL)

Q4 2015 Results Earnings Conference Call

February 04, 2016, 04:30 PM ET

Executives

Sam Wilson - IR

Barry Mainz - President and CEO

Simon Biddiscombe - CFO

Vittorio Viarengo - VP of Marketing

Analysts

James Wesman - Raymond James & Associates, Inc.

James Faucette - Morgan Stanley

Mike Lin - Stifel

Robert Breza - Wunderlich Securities

Michael Kim - Imperial Capital

Operator

Welcome to the MobileIron Fourth Quarter 2015 Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be opportunity to ask question. [Operator Instructions]

I’d now like to turn the conference over to Samuel Wilson. Please go ahead.

Sam Wilson

Thank you, operator. Good afternoon and welcome to MobileIron’s fourth quarter 2015 financial results conference call. Joining us from the company are Barry Mainz, CEO; Simon Biddiscombe, CFO; Vittorio Viarengo, VP of Marketing.

The format of the call will be an introduction by Barry, then Simon will provide details on the business and financials. We will then have time for questions. If you have not received a copy of today’s release, please call MobileIron Investor Relations or go to MobileIron’s Investor Relations website at investors.mobileiron.com.

Before I begin the formal remarks, the company advises that today’s conference call contains forward-looking statements that involve risks and uncertainties including but not limited to statements regarding MobileIron's revenue, operating expenses, cost structure, GAAP and non-GAAP financial measures, projected financial results and trends in MobileIron's business.

There are a number of factors that could cause actual results to differ materially from the statements made on this call including but not limited to, our limited operating history, quarterly fluctuations in our operating results, our need to develop new solutions, product defects, customer adoption, competitive pressures, mix shift, our ability to scale, our ability to recruit and retain personnel and the quality of our support services.

Forward-looking statements are subject to a number of significant risks, uncertainties and assumptions as to future events that may not prove accurate. MobileIron’s actual results may differ materially. For a discussion of potential factors that could affect our future results, please refer to our reports on Forms 10-K, 10-Q and 8-K and other filings that are made with the SEC from time to time.

All statements made during this call are being made as of today. If this call is replayed or reviewed after today, the information presented in the call may not contain current or accurate information. MobileIron does not assume any obligation to update any forward-looking statements to reflect events that occur or circumstances that exist after such statements are made today.

In addition, several non-GAAP financial measures will be mentioned on this call. Information relating to the corresponding GAAP measures as well as a reconciliation of the non-GAAP and GAAP measures can be found in our press release on the Investor Relations website or on our 8-K filing with the SEC.

We believe these non-GAAP financial measures are helpful in understanding MobileIron’s past financial performance and its future results, but are not meant to be considered in isolation or is a substitute for comparable GAAP measures and should be read only in conjunction with MobileIron’s consolidated financial statements prepared in accordance with Generally Accepted Accounting Principles.

At this time, I would now like to turn the call over to Barry. Please go ahead, sir.

Barry Mainz

Thank you, Sam and good afternoon. As my first earnings call as CEO of MobileIron, I want to take a few minutes to discuss why I chose to join MobileIron and outline my near-term priority.

I've known MobileIron for several years and have tremendous respect for the position the company has established in the marketplace. At my previous company, we used MobileIron platform to mobilize and secure our core business processes from email to custom applications that greatly increased our employee's productivity.

I've seen the transformative impact derived from making enterprise data and workflows available on devices that employees love both as an individual as well as the business.

As I talk to more MobileIron customers, they continue to tell me that they are gaining a lasting competitive advantage by deploying our technology at the core of their Mobile First journey.

Today most large enterprises have more mobile devices on their network than legacy PC. Modern platforms such as IOS, Android and Windows 10 are increasingly dominating modern computing, a trend that will continue in the years to come.

These operating systems mandate a new approach to security and management, the daily approach that MobileIron has pioneered since its inception. I am thrilled by the opportunity to be part of this revolution and lead the team that will make MobileIron the backbone for security and application for modern end user to get it.

In the weeks and months ahead, I will be spending a great deal of time with global customers, partners and team members, listen to what is working and more importantly understanding where we need to improve. Our recent sales conference allowed me to meet with half the company along with many customers and partners.

This event reinforced my belief that MobileIron has remarkable products and a great team, but at the same time and in certain ways was a victim of this hyper growth.

In the fourth quarter we surpassed 10,500 cumulative customers who have purchased our solutions since 2009. We're really proud that we have now sold over 500 of the Forbes Global 2000 and we just invited to the table this segment of the market we tend to win because larger customers value the depth of our security and enterprise class features plus our willingness to go the extra mile in supporting their needs.

This is particularly true when customers move beyond basic MDM into deploying mobile apps content and when they leverage our ecosystem integration where our offerings are market leaders. As I look at the leadership team to review the company top to bottom, my first priorities are sales, engineering and go-to-market.

Turning specifically to the financial status of the company I reiterate my number one financial objective remains to exit this year cash flow positive. I believe this is an important milestone we need to achieve for our shareholders, customers, partners and employees.

I’m impressed with the work the teams did putting together the 2016 financial plan and I believe that it is reasonable and achievable. Simon will provide all the details in his section.

I’m very excited we are building out leadership team. Today we announced Danny Fields is joining us Senior Vice President of Engineering. Most recently Danny was Group’s Vice President for Oracle Service Cloud.

From Oracle and right now technology Danny has personal experience of shuffling both products and company throughout the growth. He has led large cloud and on-prem Global Software team within complex, higher availability IT environment. He is a superstar. We welcome him aboard.

Our Co Founder Suresh Batchu our current CTO and Vice President of Engineering will continue as our CTO. Suresh has an amazing ability to forecast future customer need and understands evolving technology. This change will allow Suresh more time to drive innovation and incubate new product idea.

I cannot wait to see what Suresh can come with next. My new passion is MobileIron. I’m blown away by the caliber of our customers. I love the product and I’m impressed by the MobileIron team. I am especially excited about our position in the market as the only independent vendor, which makes us focus on one thing, that is turning mobility into an competitive advantage for our customers. Every day I come to work, my conviction grows that there is significant shareholder value to be a lot.

With that said, I’d like to turn the call over to Simon.

Simon Biddiscombe

Thanks Barry and good afternoon. We were very pleased with our financial results in the fourth quarter. We delivered quarterly billings and revenues, but with the highest in the company’s history and both revenue and operating expenses were better than forecast.

As a reminder, our discussion today will focus on non-GAAP financial measures unless otherwise noted. Our press release and website provide a reconciliation of GAAP to non-GAAP financial results.

For the fourth quarter ended December 31, 2015, gross billings were $48.6 million up 15% year-over-year and the reacceleration in growth over the 7% seen in the third quarter.

Our record billings performance was driven by a record number of new seats and average suite prices that were up sequentially in the fourth quarter. Our recurrent billings in the fourth quarter were $31.5 million up 30% year-over-year and were at an annual run rate of more than $120 million.

Recurring billings grew faster than our overall topline billings. We've classified recurring billings as the sum of two categories; subscriptions both term and monthly and also support contracts.

Please see the press release for the exact calculation and description. In all four quarters of 2015 recurring billings were between 65% and 66% of gross billings showing the recurring nature of the business.

With some expanding deals in the fourth quarter and I would like to share a few highlights, importantly, we enjoyed success across multiple verticals and geographies. Founded in 1886 the British based betting and gaming company Ladbrokes placed its first large order with MobileIron. Ladbrokes has over 2,700 betting outlets and 800,000 active online customers.

Jupiter Communications or JCOM, Japan’s largest cable company chose MobileIron over others. A prime consideration was our content security capabilities.

Another new customer Partners HealthCare of Boston according to the Boston Globe in 2008 Partners become Massachusetts' largest private employer and its biggest healthcare provider treating more than a third of the hospital patients in the Boston Metropolitan area. Partners is planning some exciting innovations in patient care and we look forward to being a critical part of their success.

Continuing on the healthcare theme we want to welcome Queensland Health as a new customer. With over 60,000 employees and a total operating budget greater than $10 billion it provides the public health system for the State of Queensland in Australia.

In the fourth quarter we saw a further success in the restaurant sectors by adding Papa John's Pizza. Papa John's is the largest pizza delivery company in the world. Our Government sector continues to shine as added another large win at the Government for the State of Texas.

We expanded with Kimberly-Clark landing a nice order for this long time mobile first customer. Kimberly is an amazing company that is reinventing have businesses being conducted using mobility.

We talk a lot about our customer wins and financial services, healthcare and the government because these are large competitive wins, but the Mobile First transformation is happening at all types of businesses.

For example, Reading Football Club will lead with us, founded in 1871 Reading is one of the world’s oldest soccer clubs and yes I know its super bowl season and I wanted to reassure you that we have American football teams with customers also.

Mobile First is about organizations in any vertical of any size who know that by adopting the next generation of secure competing technology they can transform their businesses and drive lasting competitive advantage.

Moving to revenues we report non-GAAP revenues to attain for vendor-specific objective evidence or VSOE and to provide more meaningful period-over-period comparisons. This is the last quarter we will provide non-GAAP revenue as VSOE adjustments will no longer be material.

Non-GAAP revenues were $42.9 million up 17% from the prior year. Breaking their non-GAAP revenues into segments, revenues from perpetual license sales were $15.3 million down 13% year-over-year and that’s the smallest decline we’ve had this year.

Revenue from subscriptions consisting of both term subscriptions and monthly subscriptions or MRC was $14.4 million up 58% year-over-year. New customers continue to show a preference for subscription solutions.

During the quarter MRC revenue, which is part of subscription revenues was $6.6 million up 80% from a year ago. Term subscription revenue was $7.8 million up 43% from a year ago. Revenue from software support and services was $13.2 million up 33% year-over-year. For 2015 we believe our overall renewal rates remain in excess of 90%.

Starting in the third quarter, we began to report revenue from the current sources to go along with billings from recurring sources. Recurring revenue is made up of revenue from subscriptions both term and monthly plus software support contracts. Not included is revenue from perpetual license, professional services and other non-recurring items.

We find the last five quarters of recurring revenue in the supplemental information table at the back of the press release. We believe that recurring revenue reflects combined performance data on seats, contract lengths, mix and renewal ASPs. The rate of growth of our recurring revenues has been highly correlated to the rate of growth of cumulative seats.

Revenue from recurring sources for the fourth quarter was $26 million up 45% year-over-year. This means our subscription and maintenance support was over a $100 million a year run rate recurring business. Non-GAAP gross margin in the fourth quarter was 84.9% which was well above the high end of our 81% to 83% guidance.

This was mainly a function of two factors; revenues coming in higher than expected and tight control of costs. The total non-GAAP operating expenses were $41.8 million for the fourth quarter, well below our $44 million to $46 million guidance range and basically flat year-over-year even as we grew billings and revenues.

There were several factors that caused operating expenses to come in below expectations coming into the quarter. First we settled the good technologies law suites resulting in lower litigating expenses than expected and second, net headcount growth was moderate.

Operating margins were a negative 12.6% significantly better than the negative 24% to negative 28% we had forecasted. This was driven by the revenue coming in higher and expenses lower.

As we've previously stated we believe there is significant leverage in the financial model and that our fourth quarter performance is an early demonstration of this. Reviewing the bottom line for the fourth quarter, we reported a GAAP net loss of $14.4 million and a non-GAAP net loss of $5.9 million.

GAAP EPS was a loss of $0.18 and non-GAAP EPS was a loss of $0.07. These are based on weighted average basic share count of 80.7 million shares. This is solid progress toward our objective of becoming cash flow positive exiting 2016.

Moving to the balance sheet, we ended the fourth quarter of 2015 with $98.9 million in cash, short term and long term investments, a decrease of $6.3 million from the prior quarter. This is the smallest net cash usage since going public in June 2014.

Deferred revenue was $69.9 million at the end of December versus $54.2 million the prior year. Deferred revenue includes $300,000 related to VSOE as of December 2015 and $2.1 million as of December 2014. Excluding the amounts related to VSOE, the deferred revenue balance grew 34% year-over-year.

DSOs for the fourth quarter of 2015 was 79 days, up four days from last quarter. In general our DSOs were in the 70 to 80 day range and have typically moved up or down based on inter-quarter linearity and some seasonal factors.

After the second quarter of 2015, I had stated that our goal was to reduce the overall cost structure of the business by managing operating expenses and driving efficiency. As the fourth quarter results show, we're making good progress on that path.

We remain focused on the efficiency of our spending with particular emphasis on measuring and improving the ROI on each dollar spend.

Turning now to guidance, as we traditionally state we believe that over time we will continue to see the perpetual licenses shift into subscription licenses and MRC. This shift combined with the timing of large transactions may cause the billings mix to vary in any given quarter.

For the first quarter of 2016 we expect billings to be in the range of $40 million to $43 million, up 10% to 18% year-over-year. We're projecting a revenue range of $38 million to $40 million, up 16% to 22% year-over-year.

We expect non-GAAP gross margins to be approximately 82% to 83%. We're expecting that non-GAAP operating expenses will be in the range of $42 million to $44 million. Basic share expenses should be roughly 83 million shares.

Turning to the full year 2016, as of today, we expect to grow billings by approximately 10% to 20% or billing of $180 million to $200 million. The low end is driven by a larger shift to subscription, while the upper end is a more subtle shift to subscription.

We remind investors that the long term value of subscription is higher than perpetual plus support. So we believe the shift subscription in the long term benefit shareholders.

Based on this billings range, revenue should be in a range of $160 million to $180 million for growth of 8% to 22%. As in 2015 we expect recurring revenue to grow significantly faster than overall revenue growth.

Additionally, we remain committed to turning cash flow positive in the fourth quarter of 2016 and continue to believe that operating margins will be in the range of approximately a negative 12% at that time.

In closing, I am very pleased with our performance with the fourth quarter billings and revenue being the highest in the company's history. Further, we witnessed a reacceleration of topline growth on a year-over-year basis. These results were delivered on top of changes in cost structure we achieved in the second half of 2015 further demonstrating the leverage that exists in our model.

As a reminder, the GAAP to non-GAAP reconciliation, disclosures and risk information can be found in our earnings press release or our 8-K filed with the SEC this afternoon and these forecasts are being made as of today.

Operator, we're ready for questions.

Question-and-Answer Session

Operator

We'll now begin the question-and-answer session. [Operator Instructions] First question comes from Michael Turits of Raymond James. Please go ahead.

James Wesman

Hey guys, good afternoon. It's James Wesman filling in for Michael. Barry…

Barry Mainz

Good afternoon.

James Wesman

Yeah Barry, since you've been on for about a month, can you give us your initial impression of the company's sales organization? I know you talked briefly in your prepared remarks, but any changes you might anticipate into the overall go-to-market strategy of MobileIron that's coming on?

Barry Mainz

Yeah, thanks James for the question. So first I got to join the sales kick off where I got to address over half of the sales force or half the company and all the sales force personally. I got to tell you I was really, really impressed.

In addition to that, we have an SC organization that is second to none with the technical pre sales folks and really think that this is part of the crown jewels of the organization and you're going to continue spending and making go-to-market more efficient to help our sales folks show up more often.

James Wesman

Great. And then Simon just a quick housekeeping question, in the fourth quarter, how much was the good litigation expense for OpEx just so we can get an idea about OpEx ex perpetual?

Simon Biddiscombe

Yeah James it was $1.3 million in the quarter.

James Wesman

And just to be clear, you're not expecting any litigation expense from this in 1Q of 2016 right. Those are all…

Simon Biddiscombe

That's correct. There is no expectation of litigation expense as associated with good technologies at any point moving forward.

James Wesman

Right. Thank you guys.

Barry Mainz

Thanks.

Operator

[Operator Instructions] The next question comes from James Faucette of Morgan Stanley. Please go ahead.

James Faucette

Thanks a lot. Just a couple of questions if I could. First from a -- I guess from a mix standpoint it seems like that you continue to indicate that there was an increasing preference for subscription versus perpetual license.

Is that becoming more predictable for you or should we anticipate that there could still be some swings in that and at what point do you think you can reach your predictability on that mix first?

Second question I had is we're still targeting cash flow breakeven later in 2016. Once we cross over that and get close to or at earnings breakeven, how should we be thinking about the pace of margin expansion and I guess the associated free cash flow? Those are my two key questions, thanks.

Barry Mainz

Thanks James. I do have Simon answer those questions.

Simon Biddiscombe

So James as it relates to the mix, at the revenue level, the mix was actually fairly consistent throughout 2015. So it was roughly a third, a third, a third between perpetual subscription more services in each of the quarter.

Perpetual typically does pick up just a little in the fourth quarter and that's exactly what it did taken that number closer to 35%, but we had a very predictable revenue mix over the course of the quarter.

As we said in the prepared remarks, there is no date that your customers are expressing a preference for subscription and monthly transactions and as we've thought about providing the guidance for the current quarter and then also for 2016 we have built in as I said an assumption around migration away from perpetual toward those subscription billing models in the range that we provided.

So at the low end of the range for billings there is a greater assumption around the amount of subscription and both monthly and term subscription and then at the higher end of the range of slightly less over the shift.

So over the course of the last year, clearly it's been more predictable, last nine months more so than the first quarter, but as we look at the business as we sit here today, the key takeaway is really the momentum we have at this point in time. So we're pleased with the reacceleration of growth that we saw in the fourth quarter on a quarter to quarter basis.

And to answer your second question as it relates to the cash consumption and first of all we've made good progress in the fourth quarter. The cash consumption the lowest it's been since we became a public company at $6.3 million and actually over the course of the last two quarters, we've taken that number down dramatically from quarter to quarter.

As I think about 2016 and this is point specifically I do want to make, I think we’re going to consume somewhere around the $15 million total cash and I think the low point of cash is probably going to be around $85 million as we work our way through the calendar year that's ahead of us at this point in time and then there is the criticality of being cash flow positive as we exit the year.

We’re not offering a perspective on 2017 and the model for 2017 at this point in time. So I will steer clear offering you a perspective, but I think the leverage and the model looks like at that point in time, but clearly you need to continue to drive the financial performance of the business. We need to continue to prove profitability and we need to continue to accrue cash generation.

James Faucette

Great. And thanks. Just one more follow-up question, it seems like there are a fair number of potentially very large pilots that are -- have been out there for a while. I'm wondering if you can talk to a little bit what you feel like your to-do list is from our feature capabilities standpoint to convert those to top four deployments and how we should think about that progress as we go through 2016? I think some of these products have been out there it seems like for at least a couple of years.

Barry Mainz

I’m going to ask Vittorio answer that question.

Vittorio Viarengo

Hi, James this is Vittorio. We have some of the largest deployment out there and so we think we understand the requirements of the customers when they want to go big and we are ready for those deployments.

James Faucette

Alright, thanks.

Barry Mainz

Thanks James.

Simon Biddiscombe

Thanks James.

Operator

The next question comes from Sanjiv Advani of Stifel. Please go ahead.

Mike Lin

Hi, this is Mike Lin filling in for Sanjiv. The first question I had was on the gross margins, there was a pretty good uptick this quarter, you talked about cost cutting measures, helping to improve your gross margins, just curious if that trend will continue and if you see more upside from cost cutting metrics to improve gross margins.

And then on the flip side, it seems like as your business model transitions to more subscription sales; that should naturally push gross margins down because subscription sales have lower gross margins. So just trying to figure how we should think about gross margins going forward given those two factors that kind of negate each other?

Barry Mainz

I am going to have Simon answer that question.

Simon Biddiscombe

So first of all with regard to the gross margin, actually there was no cost cutting that impacted gross margin as such if I that look at the cost of revenues over the course of last few quarters.

Cost of revenues was actually increased quarter-on-quarter even as we’ve been able to deliver improved gross margins essentially four quarters in a row. So that is happening as a result of the activities that we undertook in the second part of last year to drive a greater efficiency in our cost of revenue functions within the organization.

So when I think about our customer success organization, technical support, when I think about with technical operations and so, we’ve done a tremendous amount of work not to cut cost because we are spending more but to make sure that every dollar is more efficiently spent then it historically was. So that's the first part of the answer.

The second part of the answer relates to gross margins associated with subscription versus perpetual, ask the question again. I want to make sure I understand exactly what you were getting?

Mike Lin

It seems like as the product mix shift towards more subscription revenue because subscription revenue has lower gross margins that they should pressure gross margins overall down for the company right?

Simon Biddiscombe

Not necessarily. It doesn’t -- subscription type models, it doesn’t necessarily impact to ours. It would to the extent that I've got -- you got to be careful with the billon and revenues, okay that’s ultimately answer.

You got to be careful how you think about the impact of billings versus the impact of revenues because in a revenue transaction I’m either picking up a perpetual license and then maintenance contracts or I am picking up term subscriptions spread over time okay.

So our gross margin impact associated with the shift to subscription does occur as it relates to a subscription transaction versus a perpetual transaction. We do see some mix shift associated with that but frankly, for us it’s by making sure that we protect the ASPs of every seat that we sell into the market and maximize the gross margins associated with that transaction.

Mike Lin

Okay. And just one more follow-up question on competition. Do you see any change in the competitive environment is pressure from larger competitors who want all their products, is that affecting sales, has there been any change in that competitive dynamic?

Barry Mainz

Yeah, I will handle that one. A couple things, one I have lot of experience past live bundling product into larger transaction and we start very complicated technology and focuses absolutely key but don’t confuse bundling and selling.

I think that this requires focus to sell. I've also had on the flip side a lot of experience with competing against large bundle and the reality as is that when you're focused, this market speed wins, speed absolutely wins and having to focus on what we do is key.

So, I think that this could be an advantage to us as we have a very dedicated sales force and go-to-market engine to win the deal and win the business.

Mike Lin

Okay. Great. Thank you.

Operator

The next question comes from Robert Breza of Wunderlich Securities. Please go ahead.

Robert Breza

Hi guys. Congratulations on a good quarter. Barry, as you think about our sales organization going in FY '16, Simon put up some good numbers and talked a little bit about working influence to variation between the models at the high-end and low-end.

When you look at getting sales force productivities versus subscription revenue, how are you thinking about the opportunity between that partners et cetera. Just curious what can influence the key internals plan from a partner productivity perspective?

Barry Mainz

Well Robert if I think I understand your question I’ll be stated here. Is your question hey how are we going to leverage the ecosystem to make the go to market more efficient and what other things we would be doing is that your question.

Robert Breza

That’s a good summary.

Barry Mainz

Okay, so a couple things. One I'll talk about just our investment in the channel. We're investing heavily in the channel in North America to help scale and increase our coverage model or we can actually show up.

We find that when we show up in front of customers we typically win. We have absolutely the best product and as I mentioned before and on my script that I have experience with all products. I can tell you, if we can show up we'll win.

The second piece is we’re spending money in just making the go-to-market piece more efficient lead to field and making sure that we increase the velocity and getting those suspect and prospect out to the field and in particularly North America and I believe that’s going to help us quite a bit.

Robert Breza

And Simon. Just you referenced the one-third model mix, from a sales force compensation perspective on the expense side, is it equal or is it safe to say that the incentives are equal across the different perpetual subscription models, et cetera, or how should we think about expenses relative to the revenue reconciliation.

Barry Mainz

Yeah, so I’m not going to go into the details of the comp plan. What I would say is that we want our sales organization to be able to deliver the solution to the customer in whatever format the customer wishes to buy it without the compensation scheme forcing one decision or another on the customer part, okay.

So the critical part for us is making sure the customer is able to buy in the model they want to buy and making sure that we aligned the compensation to the maximum extent possible behind that.

Robert Breza

Okay. Thanks guys.

Barry Mainz

Thanks. Welcome.

Operator

The next question comes from Michael Kim of Imperial Capital. Please go ahead.

Michael Kim

Hi, good afternoon guys. In your third script you talked about a number of new logos added in the quarter, can you talk a little about the selling motion and whether these are competitively re-bounce and how your win rate compared with the historical performance.

Barry Mainz

I’ll give that question over to Vittorio.

Vittorio Viarengo

So we haven’t seen a change in the competitive dynamics. Well we invited to the deal, we like our chances of winning the deals and the way we look at the market is really boil down to the three leaders and much more we see out there.

Michael Kim

And then you talked about a sequential increase in pricing. Do you see that as sustainable and what are some of the puts and driving that expansion?

Barry Mainz

Simon why don't you take this one?

Simon Biddiscombe

So actually the expansion, you got to go back to Q3. So if you remember in Q3, we specifically said that we had seen a decrease in ASPs associated with a large U.S. federal government transaction and then associated with a large deal in China. So we had actually seen an ASP contraction in Q3.

The good news is the recovery we saw was very strong in the fourth quarter in ASP. So that was the point we were trying to make, but we've seen a recovery from where it would be in Q3.

Michael Kim

And was the ASPs in 4Q similar to what you were seeing in the earlier part of the year?

Simon Biddiscombe

So we don't give them at that level of granularity. I think the right way to answer is ASP is not causing us any constipation at this point in time.

Michael Kim

Okay. Very good. Thank you.

Simon Biddiscombe

Thank you.

Operator

This concludes the time allocated for questions. I would like to turn the conference back over to Samuel Wilson for any closing remarks.

Sam Wilson

Thank you, everyone. Thank you for joining us today. Just if anybody needs a replay, it's available at 1877-870-5176 and the replay pin number is 117239. It will be available from this afternoon through March 4. Thank you very much.

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