Yes, I agree with your thinking. Hard to see much downside either over the next few months or into the medium term. If the share price floated lower for whatever reason, a large repurchase / tender might become more attractive. Over an 18+ month horizon, there are plenty of "value buyers" (Progress Software, HPE, Private Equity) that have paid 4x+ sales for high-retention infrastructure software e.g. MarkLogic, etc. Lots of upside at multiples you outlined with plenty of buyers who'd want the embedded position with blue-chip customers in capital markets and/or best-in-class technology. The company has said they've always had plenty of inbounds on Kx, so will be interesting to see what happens timing wise. Reminds me of Ascential to some extent, where breaking up the company enabled a strategic to come in and pay a big premium for the remaining business.

Yes.  Good price. core business trading at <4x '24 ARR.  Now, they need to execute on KX.  If they do, good upside over next 12 months. 

Great price on the FD sale. Any thoughts on updated value for KX or how this plays out from here?

Kx is primarily a time series database. I’m not sure who you spoke to / where they work but Kx is very well known within most quant firms and capital markets banks. The software is incredible sticky, powers mission critical applications that deliver value well in excess of what they charge, and is lightning fast and powerful with many other potential applications and optionality. Sticky low growth software businesses with mid 90s gross retention sell for 4x+ arr all day long, before you get much into growth potential etc.

I’m sure there is much better software and software businesses. its not so much that im excited about the software as i am about the profile of the stickiness and growth potential of the biz in the context of the valuation (sub 2.5x arr).  That just doesn’t exist in the public markets and when it does it eventually gets taken out. 

rii

What is it that makes everyone so bullish on KX?

I just asked a bunch of machine learning PHDs who specialize in machine learning in finance whether they had ever heard of vector databases. They hadn't.

Then you read things like the MS primer on vector databases and there is no mention of KX.

I don't doubt that the arr multiple is cheap or that lots of big banks have them installed already. Just wondering about some of the bullish anecata here

How do you think about valuation for FD and Kx post report, and how Kx will be received by UK markets if its growing slower?

Sorry for missing the previous question. 

Over time, I think there is a risk that KX’s architectural advantage diminishes.  At present, KDB appears to be somewhat unique (and entrenched) among its peers in its ability to process enormous amounts of data and compare that data with historical datasets in real time.

My view is that this technological advantage may erode over time.

having said that, I believe their position remains quite strong and the company is well positioned to experience accelerated growth by the second half of 2024.

I also continue to believe that KX would attract a lot of strategic interest if the business were put up for sale and that its private market value dwarfs the implied value of KX inside of FD today.  

from nobluff: On the point you and rhianik surfaced about the competitive position and strategic value maybe eroding in 2-3 years, what do you mean? Is there a risk in your view of a competitor ramping into this niche more?

Those points make sense. More sensible focus on specific KX verticals makes sense, even for lower ARR goals. 

On the point you and rhianik surfaced about the competitive position and strategic value maybe eroding in 2-3 years, what do you mean? Is there a risk in your view of a competitor ramping into this niche more? Thanks. 

Agree with both of you.  The corporate management team have done shareholders a great disservice with their ridiculous targets.  The Kx team has been augmented over the past year, but its going to take some time for them to execute and reaccelerate growth.  Very happy to see the split.  I think they should sell both remaining assets.

I am not surprised by the miss.  I expected something at the low end of GBP75-80 million in ARR.  They did a lot of heavy lifting transitioning from "services oriented" ARR sales to repeatable product sales.  That mix shift explains part of this year's weakness.  These cloud partnerships are hard to execute without the proper sales infrastructure and support.  The Kx asset is world class as is the client base.  Kx is a highly strategic asset and we are becoming increasingly convinced that it is better off in the hands of AWS, Azure, Snowflake or some other strategic.  Based on discussions that we have had, the asset is highly valuable for the client base alone.

I am glad they announced the sale of FD though its not enough.  I don't yet know the tax basis of the asset.  Does anyone else know?  I hope to find out on Monday.

I am going to push for them to sell the entire company as a whole or in two pieces.  Three years from now, Kx will not have the same competitive advantage as a product as it enjoys today.  However, today the asset has immense strategic value.

hi Rii136,

We also were surprised at the magnitude of the ARR miss. The commentary around deals getting pushed into FY25 does not explain the magnitude of the move, nor does the slower onboarding/ramp with the CSPs, particularly as it relates to non FS clients. Despite this, it is hard to see how the shares are not still 40-50% base case upside from 1000p even netting off tax for an FD sale and putting a conservative multiple on lower ARR for KX, all while netting off 40m GBP or so for further investment off of the EV. 

Something we are not sure how to gauge is the impact of the management team - both in setting outrageous targets that are unattainable and in very poor execution as seen in the trading update, when it seems this recent half was supposed to be the inflection point of growth in KX. This hurts the story and the multiple, but how do you think about risks around that? 

Also, has management communicated what the net tax impact in a sale of FD might be? I figure the actual versus our estimates are not material, but I am not sure how to frame this. 

We surveyed FS clients who gave growth in spending projections anywhere from 0%-15%, with the common avg being MSD-HSD in FY25. Non-FS clients suggested higher growth, but the sample size was smaller. In speaking with the company, they recently expressed to us that FS client revenue could still grow 15-20% over a medium term CAGR, but this seems untrue. I think investors have heard one thing and seen another with this team several times, and credibility seems low. 

The only other thing that we saw that could bother people in the release is the EBITDA expectations YoY for KX, but we understand they are investing - the question then becomes, though, when will management manage their opex if the growth continues to disappoint? Having activists involved should help here, but it remains a concern to some investors that they are overextending the cost base with plans for big growth that will never come, only to have to cut back when they have disappointed again.  

Curious to hear others views. 

results materially below guidance (again), which I think surprised no one. The magnitude was a bit bigger (Arr growth of 12% cc) than we’d thought it would be, but still within the range of outcomes, albeit the low end. Fd consulting biz weakened modestly but I don’t think moves the needle much. They did a weird transaction with mrp (merged in in an all share deal) and it seems like worst case it’s costing them 5m to exit (the credit line they extended the merged entity), but we e heard post the merger they plan to sell the asset. So at least we have something crystallized there. 

Probably more important, they’ve committed to divesting fd.  Shareholders in the uk are pissed, and I think the shareholder base has turned over dramatically in such a way that makes it much easier to do the right things with the business going forward.  In the low 9s I have this on about 2x arr depending on what you think fdp is worth.  While 12% is a lot lower arr growth than 30%, you just can’t find a software biz of this quality with this current (and potential) growth and margin potential at anywhere near this price.  Have a call with the company at 9, curious others views / what we may be missing  

Rii

If the company sells the consulting business, what will they do with the cash?

How much of it is required to get to FCF positive level in ~2 years time?

I expect them to be able to get more. We have ~200M in our SOTP. Company made it sound like there was a line of thinking to sell FD even in a tough environment with weak multiples of 7-8x. I wanted to provide my perspective that doing so would be a bad idea. With that said, the end market seems to be improving and I believe there are plenty of buyers for FD, so the point is probably inconsequential.

We are excited about the stock as well. We believe there is a lot of value if they sell the First Derivatives for a good price and the company should run a process to figure out whether they can. We also believe the First Derivatives EBITDA creates a floor in the UK market. If the bids come in low - I don’t think they should sell. Multiples you described of 1.2x+ seem fair. 

You point this out in your response, 2023 was very weak for capital markets activity and IT spending compounded by fx headwinds - which is why it’s declining year over year. AI is a tailwind to Capital Markets IT services - hard to imagine AI disrupting services in the near in highly regulated environments. Many IT services companies are already describing a recovery. Forcing a sale at trough values in a non-distressed, growing business is a bad strategy. Understanding the factors impacting the end market and seeing other players recover is not hope. So in summary, we think running a process makes sense, but they should say no if the bids are low. From your comment of not advocating for 7-8x EBITDA as a transact-able price, especially after netting out taxes, it sounds like you agree.

A bad price for FD risks turning a great situation into a mixed one here IMO. You will be frustrated if you expect the Kx stock to quickly re-rate to a HSD ARR multiple given the expectations for double digit negative cash EBITDA margins for the next couple years, and expect an even greater discount, if Kx misses in the near term or comes off management’s targets. A UK micro cap with negative FCF that is missing expectations is no man’s land with no floor for valuation.

We bought ASCL last year and KCT this summer so are familiar with both of those situations. ASCL management ran a great process and they maximized value of the WGSN business from a fundamental perspective before selling - they did not look for a fire sale price. On KCT, the stock was impacted by technical headwinds in the UK market and ultimately the board needed to respond to a large premium being offered. KCT still seems cheap and the bidding war for the business confirms it. 

Alli, 

I'm glad you brought this up.  

In my view, the real risk here is if the board doesn't do anything. You sell when you can, not when you have to.  By that time it's too late.  Look what happened with MRP - it's essentially worthless now.

The FD business has decelerated the last two years and it's now declining year over year. Some of this is cyclical to your point, but the business is subscale and doesn't appear to be well positioned (in the context of the existing structure) for the long term given competitive dynamics. There is also a real element of technological risk - i.e. AI is not a friend to subscale consulting businesses. 

As far as math goes, 1.2x EV/sales is not 7x-8x EBITDA;  it works out to 12x EBITDA based on management's margin targets for this year. A 1.0x EV/sales multiple would similarly equate to roughly 10x EBITDA.  It's also worth noting that every incremental 0.1x revenue multiple is worth only GBP18 million or 63p per share in incremental value. Even an extreme bull case sales multiple of 1.5x revenue only yields roughly GBP2/share in incremental value compared with a 1.2x transaction multiple. GBP2 / share is material but it's immaterial relative to the value that can be created by freeing KX from this holding company structure.  Hoping for higher FD valuations or FD revenues down the road is not a strategy.  

The opportunity cost of waiting is very real for KX (and FD for that matter). The world is not standing still and the current structure impedes the company's ability to hire world class talent at KX (particularly in sales) to match the perceived quality of the product.  People want to be compensated in equity directly tied to their business. It's not rocket science. That is not going to change unless the holding company structure is collapsed.  Even with moderate growth assumptions (i.e. 25% CAGR vs management's forward target CAGR of 45%) and reasonably conservative target multiple (5x ARR) assumptions, KX alone is worth GBP1 billion (GBP33 per share)  in 3 years (YE C2026).  This math excludes FD which we think is worth another GBP6-7 per share today.  

According to the GS Financial Conditions Index, November represented the largest easing of US financial conditions in 40 years, and December is turning out to be much of the same.  These developments are materially positive for sellers of assets.  If you begin a sales process now, it still takes upwards of six months to get a deal done. If you don't sell FD now, when do you? The board timing is turning out to be potentially great - IF and only if they go through and sell FD. 

We just saw Kin + Carta transact for 1.35x revenue.  We believe FD is similarly challenged long term and that a sale is in the best interests of FDP LN shareholders and FD / KX employees.  Below are the comments of management/board of Kin + Carta from the initial October 18th press release.  I believe they are equally applicable to FD.

Whilst the Board continues to believe Kin + Carta is strategically positioned to benefit from the DX (i.e. Digital Transformation) market opportunity, it also recognises there are several challenges in achieving its standalone strategy.

Within the context of the DX competitor landscape, Kin + Carta is a relatively small-scale player. In order to compete successfully in the future, the Board believes that Kin + Carta will need to expand its capabilities, resources and access to capital in a way which is challenging to achieve on a standalone basis. Additionally, as seen over the last 12 months, there continue to be significant market headwinds across the DX industry driven by hesitance among enterprise clients to commit to large programmes of work in the current macro environment, which impacts Kin + Carta's future new business growth. This in turn has resulted in significant volatility in the Company's financial performance, share price, and ability to execute on its strategy. Finally, whilst Kin + Carta has successfully grown its client base in recent years, it remains relatively concentrated such that any 'churn' within this revenue base can have a material impact on the profitability of the Kin + Carta Group, given the size of the business today.

As a result, the Board acknowledges the benefits of Kin + Carta being a private company supported by Apax and from Apax's significant experience in supporting and growing global digital consulting businesses.

A sale of FD at 1.2x revenue F2023 revenue (C23) would allow us to create residual KX at roughly 1x C2024 ARR (using our GBP100 million estimate).  This would make KX the cheapest software company (of any meaningful revenue scale) in the western world.  A moderate post-transaction tender could create material incremental shareholder value. 

We have been in touch with management and the board and have been clear in expressing our views. Hope this helps. 

Selling today, if only trough multiples of 7-8x are available vs 11-12x+ in the future, feels like a sure way to get the stock up in 1 year but leave a lot of value on the table over 2-3 years.

Shareholders would be giving up 4 turns of EBITDA plus 3pts of margin i.e. doubling the value of First Derivatives or half the company’s market cap. At the bottom end of the range, most of the proceeds from a sale today would need to stay on balance sheet, not used for accretive repurchase. If they can get 200M and use 100M for repurchase, great; but why run a fire sale for a growing asset at trough multiples and trough margins?

Is now the right time to sell FD? Would be concerned if the company feels rushed to sell the business for 7-8x EBITDA with 11% margins in a weak capital markets environment vs 10-12x at 13-15% margins in the future.

They have no capital constraints if they don’t sell FD. With all that said, I am hopeful that the recent drop in interest rates benefits the capital markets and the KCT LN process indicates there is adequate demand for small cap consulting services despite FD being capital markets focused.

Thanks for the writeup byronval and cobia72 for his initial writeup in 2021.  I was also writing this up but byronval beat me to the punch.  I completely agree with Rii136’s comments regarding guidance (too aggressive but doesn’t matter at this valuation) and KX product quality being unrivaled.  Incremental thoughts from my writeup are below:

Material Value Unlocking Catalyst Ahead for a Substantially Undervalued SaaS Business

On October 24, 2023, concurrent with announcing disappointing first half F2024 (February) interim results, FDP Technologies announced that it was taking the initial step to explore a structural separation of the First Derivative (FD) consulting business and KX, the high growth SaaS business.  The stock sold off 33% on the news, and we believe the market is missing the forest for the trees.  While we are hopeful that the board will begin a sales process for FD in the near term, the company has only committed to announce a decision no later than publication of F24 results in late May.  We are hopeful that the Board will decide to sell FD, leaving KX as an essentially pure play SaaS business.

While there are risks, we believe the current set up is extremely favorable, and the situation reminds of a smaller cap version of what has played out at Ascential PLC (ASCL LN) so far this year – except we believe the upside potential in FDP LN shares is considerably higher.  We believe there is a credible case for near-term upside of 125% to 200% based on a 1x EV/sales transaction multiple for FD (recent transaction multiples are consistent with or above this level) and a valuation range of 7x-10x our F2024 (Feb) ARR estimate of GBP80 million (below management’s guidance of GBP88 million, reflecting 35% growth.)

Some Additional KX Comments

I do not have too much to add to Rii136’s excellent commentary.

KX’s database product kdb+ offers a combination of scale, speed and cost efficiency which appears to be unique in the market.  kdb+ is one of the fastest, if not the fastest, time series databases in the world.  It can ingest and process massive amounts of data in real time at a fraction of the cost of most competing product offerings.  kdb+ is widely entrenched in the financial services industry, where it is used for data intensive and time sensitive applications (i.e. algorithmic trading.) 

I have attended numerous customer / partner events over the past year and spoken to many customers and partners.  The universal feedback is that no database delivers the combination of speed and cost efficiency of kdb+.  I highly recommend watching KX’s recent investor event.  The event provides a base overview of the technology, competitive positioning of the product, a sense of management quality, and some decent customer commentary.

KX’s recent deceleration to 15% ARR growth in the first half of F2024 (February) reflects the time required to ramp up the partner channel, efforts to put in place more repeatable sales processes under CEO Ashok Reddy, and a continued focus on transitioning to a more scalable product-led business model that relies less on customized service offerings.  There was some churn in 1H:24 but we believe that churn among long-term clients is negligible.  Like Rii136, we believe there is an opportunity to materially expand KX’s ARR in financial services as the company laps certain legacy contracts and sells its newer offerings into existing customers and new logos.  Over the intermediate term, we believe NRR can get to and potentially exceed 120%.

Importantly, we expect to see an acceleration in KX ARR growth in the second half of F2024 (i.e. calendar 2023) and expect ARR to end the year at around GBP80 (management guidance is GBP88 million), which would make KX a $100 million SaaS business.  I believe ARR can grow 25% in C2024 (F2025) to reach GBP100 million (management guidance implies GBP128 million).  As KX builds out more use cases beyond financial services in the coming months, it will become easier for its channel partners to sell KX.  We expect ARR to see a more meaningful ARR acceleration in the second half of calendar 2024.

KX has been building out a strong partner network through partnerships with Azure, AWS, Google Cloud, Snowflake, Databricks (we believe), OEMs (AMAT, Syneos, etc.) and global system integrators.

Notable customers include: Citadel, Goldman Sachs, Morgan Stanley, Merrill Lynch, J.P. Morgan, State Street, Deutsche Bank, IEX, Securities Exchange Commission, Millennium, Syneos.

Now is the Right Perfect time to Sell FD

FD can be sold today to extraordinarily well capitalized, richly valued buyers while the private market for consulting assets is still strong. 

Large cap and mega cap IT Services/ consulting peers EPAM and Accenture currently trade at robust EV/2024E (calendar year) sales multiples of 3.1x and 3.5x, respectively, and 18.5x and 18x C2024E EBITDA, respectively.

We note that the outlook for FD under the current holding company structure is becoming increasingly uncertain.  FD is a subscale business that would have a much brighter future in the hands of Accenture, PwC, KPMG, EPAM or private equity. 

Private market transactions for consulting services businesses are occurring at healthy valuations of 1x revenue or more.  For example, on October 18th, Apax Partners ($65 billion in AUM) announced that it was acquiring Kin + Carta for GBP223 million or 1.16x trailing revenue.  That initial offer has since been trumped twice – first by Apax itself and this week by BC Partners’ portfolio company Valtech.  The final offer values Kin + Carta at GBP265 million or 1.35x trailing revenue of GBP192 million.  Notably, I believe the disadvantages to FD and its employees (under the current holding company structure) directly mirror those articulated by the management/board of Kin + Carta in the initial October 18th press release.

To highly the undervaluation of KX, if the FD business is sold for GBP178 million – GBP214 million (1.0x-1.2x F2024 revenue), the implied valuation for KX (at the low end of the FD range, net of debt) would be only GBP156 million or 2x our estimate of this year’s ARR (GBP80 million vs. company guidance of GBP88 million.) 

Applying a 7x-10x target ARR multiple, we believe KX is worth GBP560-800 million near term and perhaps GBP700- GBP1 billion in a year (F2025E ARR of GBP100 million.) 

FDP LN’s current market cap is only GBP310 million.  The high end of our scenarios (1.2x revenue for FD and 10x F2025 ARR for KX) suggest that FDP shares could be worth over GBP40 in 12 to 18 months (vs. GBP11 currently), demonstrating the massive mispricing of the KX business today (inside of FDP). 

Risks

While I believe there is an extraordinary sum-of-the-parts valuation discount in FD Technologies’ (FDP) share price, I believe this discount will not be favorably resolved unless the assets are separated.  There is a risk that Board does not move forward.  The company waited too long to sell MRP and now that business is a worthless distraction. 

Risk of FD business fundamentals continuing to deteriorate as a subscale undercapitalized player

Risk of financial conditions re-tightening and financing costs blowing out ($7.6 trillion or 31% of US debt matures within the next 12 months)

Risk that acquirors may not be as richly valued as they are at present if the Board waits

Ongoing opportunity cost of not attracting world class talent (particularly with regard to the sales organization) to KX due to the current obfuscated holding company structure

Risk of recession, which could materially impair FD’s valuation

Opportunity cost of not taking advantage of the undervaluation of KX.  The implied valuation of KX (pro forma for the FD divestiture) is lower than virtually any SaaS company in the western world and 20%-30% of sale proceeds could be used to create very substantial shareholder value through an above-market tender offer.     

Tried to post our write-up for no VIC credit but couldn't, so just excerpting a portion here that refers more just to product stickiness / background on KX.  We think you get very good upside just from believing the core is sticky and growing.  While there is risk to mgmt 35% ARR growth both for this year and LT, we just don't care at this price.

KX Overview / History

FDP’s disclosures have changed substantially over time, making it difficult to piece together the financial performance.  We briefly outline the business and its history below.

KX was founded by Arthur Whitney, a developer at Morgan Stanley who originally built KX for financial trading applications within the firm.  KX is a time-series database that historically was used mostly by capital markets banks that need to analyze stock market and other time series data quickly.  FD built a suite of software products around KX, originally named Delta, which it sold into its capital markets user base.  Seeing potential in KX, FD gradually built up a 20% stake in the software company over the 2000s, before eventually acquiring a further 46% stake for £36M in October 2014, implying a valuation of £77M.[1] Although FD did not report KX revenues at the time, we were able to pull the KX subsidiary filings from Companies House.  In FY14, FD disclosed KX did £8.5M of revenues at net income margins of 40%.  This implies a valuation of 9x revenues. Upon acquiring KX, FD renamed its Delta software products under the KX moniker.  The company also disclosed at the time of acquisition that the KX time series database was the time series database of choice for 9 of the top 10 global investment banks.

In FY17, FD negotiated to buy in the remainder of KX it didn’t already own (34.8%) for £41M, or an implied valuation of £118M. Since FY17, KX has grown maintenance + subscription revenues at a 16% CAGR.

Source: Company reports. February year end.

Based on KX disclosures and conversations with formers and customers, we believe KX is a sticky software solution.  KX’s Delta products have been used within banks for many years and power mission-critical applications with high costs of failure and high costs of switching.  Likewise, we believe the core KX time series database power many of the most important trading functions of a capital markets base.  We believe 38 of the 40 largest investment banks use KX to power their pre-trade & post-trade analytics and algo capabilities across equities, futures, FX and options trading.  It is also used by many of the largest global exchanges and regulators, including the SEC.  A former executive shared with us an anecdote from a conversation with a large Capital Markets customer about what would happen if KX went down:

“To give you some quantum, we transacted $17B of trades on your tech today, if KX goes down [our bank’s trading capability] goes down.” – Top 5 capital markets bank customer, December 2023.

We believe KX’s entrenched position in capital markets is why they’ve been able to attract partners like AWS and Azure to co-develop and co-sell KX in the cloud:

 “KX is a giant in a niche space. Every Capital Markets desk on the sell side uses it as well as many hedge funds – the entire industry depends on them. That is the primary reason we started working with KX… despite having our own time series DB”. -- AWS Head of Global Financial Services Partner Technology, November 2023:

Popular software review site G2 has entirely 4 or 5 star reviews of KX, mostly written by Capital Markets developers.  Some reviews are excerpted below:

"I work with the biggest dataset on the street, namely US Equity Options market data feeds…There is no other way my team could perform our data ingestion, derived analytics and overnight calibration in sufficient time if we did not have KX” – Verified Capital Markets User (June 2023)

“KX real-time data processing capabilities have been unparalleled, enabling us to make swift, data-driven decisions in the dynamic capital markets landscape.  KX is the de-facto technology for real-time analytics. –Verified Capital Markets User (August 2023)

Revenue Uplift from License to Subscription Transition and Movement of KX Workloads to the Cloud

Historically, most legacy financial services customers of Kdb consumed it on premise under perpetual license with maintenance contracts.  Each perpetual license was priced on a “per core” basis, which refers to the amount of compute power utilized running KX applications.  We believe in an effort to juice revenues several years ago to make quarters, KX effectively sold “unlimited” perpetual licenses to large investment banks in exchange for a few million of one-time revenue and maintenance revenue that on average is about $500k/yr.  We believe these customers are largely responsible for the roughly $16M in maintenance revenue KX had as of a couple years ago.

We believe KX created new products in Kdb Insights and Kdb Insights Enterprise predominately to have something new to sell these banks where KX was essentially “sold out”.  The main functional benefits of these new products are the ability to code KX in Python as well as better performance if KX is hosted in the cloud.  In short, we believe KX is able to achieve a 4x uplift to revenues over 4 years from on-prem KX customers moving their KX workloads to the cloud.  We believe this opportunity alone is roughly $16M a year over the next 3 years.

The ecosystem here is important to understand – we believe KX workloads have very large amounts of storage associated with them.  Even though a bank may only be paying $500k/yr in maintenance to KX, the total cost of ownership of KX typically includes tens of millions of dollars in associated storage and data center costs, as well as a handful of very expensive KDB developers.  By shifting to KDB insights, we believe capital markets customers can typically reduce associated storage / data costs by millions of dollars a year while still generating tens of millions of dollars of revenues for the cloud service providers like Azure and AWS.  The net result is that banks want to migrate their KX workloads to the cloud, the CSPs want these workloads, and we believe the 4x uplift that KX can get over several years as part of adoption of KDB Insight Enterprise pales in comparison to the cost savings of the bank.  Additionally, because of the revenue opportunity for the CSPs with KX workloads, they are eager to work with and co-sell KX solutions.

KX also prices most of its products on a usage-based model, based on how much compute power is required to run the analyses powered by KX.  The more data that is consumed, stored, and analyzed, the more KX is paid.  While it’s hard to quantify, we believe growing usage of time-series databases should provide a several percentage point tailwind to revenues and net revenue retention as use cases continue to grow for Kdb products.

rii

I would encourage you to hijack the thread!

Also agree that the company seems set up to miss ARR. What interesting dynamics do you see in ARR? Do you think ARR will continue to decel?