Digital Turbine Inc (APPS) 2019 Q3 法說會逐字稿

Good day, and welcome to the Digital Turbine Fiscal 2019 Third Quarter Results Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Brian Bartholomew, Senior Vice President of Capital Markets and Strategy. Please go ahead.

Thank you, Nicole. Good afternoon, and welcome to the Digital Turbine Third Quarter Fiscal 2019 Earnings Conference Call. Joining me on the call today to discuss our results are Bill Stone, CEO; and Barrett Garrison, our CFO.

Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. These forward-looking statements are based on our current assumptions, expectations and beliefs, including projected operating metrics, future products and services, anticipated market demand and other forward-looking topics. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. Except as required by law, we undertake no obligation to update any forward-looking statements. For a discussion of the risk factors that could cause our actual results to differ materially from those contemplated by our forward-looking statements, please refer to the documents we file with the Securities and Exchange Commission.

Also during this call, we will discuss certain non-GAAP measures of our performance. Non-GAAP measures are not substitutes for GAAP measures. Please refer to today's press release for important information about the limitations of using non-GAAP measures as well as reconciliations of these non-GAAP financial results to the most comparable GAAP measures. Now I will turn the call over to Mr. Bill Stone.

Thanks, Brian, and thank you all for joining our call today. Our stated goal has been to build and sustain a profitable growth business. We had a very strong December quarter as the company set all-time records in revenue, gross profit, EBITDA, non-GAAP net income, device installs and revenue per device or RPD on a continued operations basis. And as pleased as I am with the business continuing to set these record milestones, I'm more excited about the opportunities for growth we're seeing in the strategic value of the platform and how we position ourselves for the future.

I'm going to break out my prepared remarks into 3 areas. First, I'll provide some commentary to close off the December quarter; second, I'll provide some real-time operational updates; and finally, I'll end with some commentary about the strategic value of the platform, and how we're positioned for 2019 and beyond.

We finished the December quarter with $30.4 million in revenue, which represents 34% growth compared to the December quarter last year. Our non-GAAP gross margin, which has been an area of focus for us improved to 37% in the quarter, which was an improvement of more than 240 basis points year-over-year. The resulting 43% growth in gross profit along with disciplined cost management enabled us to generate a record $3.8 million in adjusted EBITDA and approximately $2 million in free cash flow for the quarter showcasing the strong operating leverage of our business.

Barrett will provide more specifics on financials. But from an operational perspective, I was very pleased with our revenue per device performance or RPD, which was driven by strong advertiser demand, increased slight configuration for some partners and incremental contribution from newer products. And as many of you have heard me say countless times, RPD is a fundamental health metric of our business.

And in the December quarter, our collective revenue with our 3 largest North American partners grew by 22% compared to the same period last year, despite their total related device unit sales being 14% lower. And this was all due to 42% lift in RPD as our global media team did a fantastic job executing in the December quarter.

I'm also pleased with our growing revenue and gross margin diversification, which was aided in the quarter, by stepped up international growth as well as the launch of a new partner here in United States. In particular, it is worth noting that our international revenues were up approximately 100% year-over-year, including a tripling of revenues with our largest Latin American partner compared to the December quarter last year. These results all showcase the improving diversification of our partner base as our percentage of gross profits coming from places other than our 3 largest U.S. partners grew from 20%, a year ago, to 32% in the December quarter.

And now turning to the forward outlook. I want to provide some commentary and how we're positioned for growth across each of our 3 growth levers. Devices, media demand and new products.

First on devices. I know there's been a lot of negative press surrounding slowing smartphone replacement rates here in the U.S. and other mature smartphone markets driven by disappointing recent results from some high-profile smartphone manufacturers. And while our business model is certainly sensitive to the overall smartphone market, we are not at all fully dependent on it at the current time. But one thing, we're still largely a penetration story and that even with an annualized install rate of greater than 100 million devices. We are still on fewer than 10% of the android smartphones sold globally today.

We are, however, continuing to add key strategic partners to the platform to meaningfully grow this penetration figure in future quarters particularly, on the international front. For example, we're now live and generating revenue with many new partners such as TracFone, Panasonic, Carbon, Intex and others that were not active partners last year. Obviously, our recently announced partnership with Samsung is another extremely promising opportunity for us to significantly expand our global footprint, and I'll address our Samsung partnership in further detail here shortly.

Before I leave the discussion on devices, I want to note a few possible positive catalyst for devices in 2019. The more significant of which is the imminent arrival of 5G here in United States. As we've witnessed with previous network upgrades, we anticipate some incremental demand as smartphone users look to take advantage of the benefits of 5G. It has been publicly reported, it is anticipated that 5G for 2019 will be exclusively on Android with no Apple 5G devices expected in the next 12-plus months. I also want to repeat again that we continue to assess opportunities to extend our platform onto new device types beyond smartphones such as televisions, which would also foster incremental growth.

And now I'll shift to the other key drivers of our business. The main factor that enabled us to more than offset weaker underline smartphone demand in 2018 is a higher advertising yield per device, which leads to a discussion of media demand and new products. And as I mentioned earlier, we are generating substantially higher RPD that has enabled us to grow with our key partners even when device units are down. This explosive RPD growth reflects increased demand for same-store slots from advertisers as well as incremental contributions from newer products such as Single-Tap and Smart Folders as a testament to the value add that we are providing to our advertising clients as well as to our operator and OEM partners.

And on the media side, we continue to grow RPD as we expand our media relationships. Digital Turbine has been #3 distributor of Android applications in United States trailing only Facebook and Google. And I've been pleased with the increasing diversification of the types of applications we're delivering.

And while we're seeing growth in aggregate gaming revenues, as a percentage of total revenues, we're seeing much faster revenue growth from brands and other non-gaming applications such as LinkedIn, Starbucks, eBay, Yelp and many others.

Brand revenues now comprised more than 50% of our overall advertiser demand. I also want to call out here that we're starting to see no visible results from our revenue share arrangements with select advertising partners including Netflix, Yahoo!, Amazon, The Weather Channel and others, are anxious to utilize our platform to scale not only their U.S. user basis but are increasingly looking to our international footprint as an effective means to grow their international users.

These revenue share arrangements and some of our other lifecycle products now constitute approximately 5% of our total revenue and a yield of stream of revenue over the entire life of the device and as such are insensitive to the varying length of smartphone replacement cycles.

On the new product front, while our Single-Tap revenues outside of our social media partner and large U.S. operator integration are not yet material. I am pleased that we're now live with Single-Tap on more than 130 million devices worldwide including 50 million here in United States. It's taken us a lot longer time to get to that scale than we anticipated but now that we're here, it has made signing up demand partners far easier.

Onboarding new demand partners such as Twitter, The Weather Channel, Yelp and others is the top priority of the Single-Tap team, and although the conversion rates continue to perform well with improvements anywhere from 30% to 200% higher compared to non-Single-Tap or a traditional flow through the Google Play Store. The partners needed to see those device volumes to justify the investment of resources on their side. That's now happening and is largely an operational and distribution demand exercise from this point forward to scale.

We also continue to launch more products across more partners including our Wizard out-of-the-box experience, Post-Install Notifications and Smart Folders just to name a few. We're also pleased with the growth tied to our open market and recycle device initiatives that mitigates some of the negative impact of declining new device sales with some operators. 2019 will be about continuing to scale these new products, while also launching our Bring Your Own Device or BYOD product to the market.

Currently, operators don't have a good solution to deliver their branded experiences to their customers when a device is not directly sold by them. In most of the world, this is how devices are distributed, so it's a pain point for them. And as we grow our device base into the hundreds of millions, being able to deliver a customized out-of-the-box experience for operator subscribers is a tremendous market opportunity.

Another attractive opportunity for us will be leveraging our distribution footprint and expanded product set to help our product distribute and promote their considerable in-house media content. And we look forward to sharing more with our investors on this front on future calls.

I now want to spend a few minutes on Samsung. As you recall, we signed a multiyear agreement with Samsung, the world's largest smartphone OEM back in November to meaningfully expand our geographic reach and to better exploit the open market and global mobile operator opportunity worldwide. I've been extremely pleased with the first few months of our partnership, as we are working hand-in-hand with Samsung to carefully formulate specific go-to-market global strategies spanning across multiple continents.

Samsung is already a highly valued and supportive partner of ours, and one of the key lessons I've learned in this business is that internal partner sponsorship or platform offerings is a key driver of success and our internal sponsorship is Samsung has been great. Our Samsung relationship is also helping us in a number of international operator accounts, which historically been blocked. And now going forward, our technical integration with Samsung knocks down a key hurdle we've been facing historically with those international operators. We expect that our partnership with Samsung will begin to generate incremental revenue for Digital Turbine over the next few months and very much look forward to updating you on our steady progress going forward.

And finally, before I turn it over to Barrett, I will conclude my comments that the past December quarter that many all-time first for us and our future growth levers of devices, media and new products are all coming together to drive continued profitable growth into 2019.

And with that, this concludes my prepared remarks, and I'll turn it over to Barrett to take you through the numbers.

Thanks, Bill, and good afternoon, everyone. As Bill mentioned, we're very pleased with the results in the quarter, delivering 34% revenue growth, sustainable and expanding profitability with adjusted EBITDA of $3.8 million and non-GAAP net income of $3 million, enabling positive free cash flow generation of $2 million in the quarter.

As a reminder, the results of our divested businesses are treated as discontinued operations for all periods presented in our financials. My comments today will refer to results on continuing operations, unless otherwise noted. Also, all of our comparisons are on a year-over-year basis unless otherwise noted.

Revenue of $30.4 million in the quarter grew at 34%. We continue to experience impressive growth from both our legacy partners plus, as Bill highlighted, contributions from new partners not yet live on the platform this time last year are driving notable growth in the quarter.

Positive trends in RPD yields continue across all regions. With our U.S. market delivering record levels well above $2 -- $2 RPDs and expanding more than 40% over prior year.

Turning to gross profit and margins, revenue growth and expanded margins enabled non-GAAP gross profit dollars to increase by $3.4 million year-over-year to $11.2 million in the quarter.

Non-GAAP margin was 37% in Q3, expanding sequentially from 34% in Q2 of this year, and up from 34% in Q3 of the prior year. Our margin expansion is largely driven by faster-than-expected diversification towards higher-margin partners and continued impressive growth within our open market channel in the quarter. I'm especially pleased with the margin composition of the new revenues coming on to the platform with the gross margins greater than 44% on the incremental revenues generated in the quarter. As I noted previously, our gross margin rates can be sensitive to changes and partner mix and revenue type, which can fluctuate from quarter-to-quarter. We continue to be encouraged about our opportunity expand margins overall as demonstrated by our recent performance. And given our current and expected revenue mix trends, we would anticipate margins at/or slightly positive to Q3 levels over the near term.

We continue to be pleased with the impressive expense scale on the platform. Total operating expenses were $8.2 million compared to $8.9 million in the prior year quarter. Cash expenses in the quarter were $7.4 million compared to $7.8 million in the prior year quarter or a decline of 5%, while revenues grew at a rate of 34%. These results continue to highlight the inherent operating leverage in the business.

I would note, while we're not providing quarterly expense guidance, we expect to continue to make focused investments to support the new partners and products launching on our platform and will continue our seasonal marketing investment in Mobile World Congress in February.

During Q3, adjusted EBITDA was $3.8 million, up from a breakeven levels in Q3 of last year and representing EBITDA margin of approximately 12%. This resulted in a marginal EBITDA conversion rate of almost 50% on incremental revenues year-on-year. This further emphasizes the embedded operating leverage in our business.

Non-GAAP adjusted net income in the quarter was $3 million from continuing operations or a profit $0.04 per share as compared to a net loss of $0.8 million or $0.01 loss per share in the third quarter of 2018. Our GAAP net loss from continuing operations for Q3 was $1.1 million or $0.01 per share loss based on 77.6 million weighted shares outstanding compared to our third quarter of 2018 net loss of $4.8 million or $0.07 per share. Included in our GAAP net income for the quarter is a recorded loss of $3.1 million from the impact of the change in fair value of derivative liabilities resulting from our convertible note, which is highly sensitive to the company's stock price.

As a reminder, the derivative liabilities on our balance sheet will fluctuate as our stock price moves and may have a material impact on our reported GAAP financials.

Moving to the balance sheet. We finished the quarter with $10.1 million in cash and generated $2 million in positive free cash flow from continuing operations in the quarter, up from negative free cash flow $0.8 million in Q3 of last year. I'm also pleased with the results of our working capital position which improved $2.7 million sequentially.

We had a small reduction in our debt levels in the quarter, as they were about $200,000 in conversions on our convertible notes during the quarter. And the gross principal amount of our original $16 million notes ended at $4.7 million at quarter end. We had an additional $3 million in conversions on these notes since the end of the December quarter, bringing our current balance at today's date down to approximately $1.7 million.

It's worth highlighting that as we compare our balance sheet now to levels at the same time last year, there have been significant progress across all health metrics including working capital levels, a more than $4 million reduction in debt levels and an increase of over $3 million in our cash balance.

Further, underscoring the continued progress as we focus to bolster our balance sheet. With the combination of our growth and free cash flows and a vastly strengthen balance sheet, I'm very pleased with the company's financial profile at this stage and excited about our position to execute on both our near-term operational plans and our broader strategic-growth objectives.

Before I turn to our business outlook, I wanted to provide an update related to the SEC matter tied to internal controls. As disclosed in our 10-Q, this matter has been finalized and settled with the SEC. The company is appreciative to have this matter closed. And as a reminder, the company is fully SOX compliant, internal controls environment will continue to be an imperative and integral part of the company.

Now let me turn to our outlook. We currently expect full year fiscal 2019 revenue to grow to between $102.5 million and $103.5 million and expect full year adjusted EBITDA to grow to between $7.3 million and $7.8 million.

With that, let me hand it back to the operator to open the call for questions. Operator?

(Operator Instructions) Our first question comes from Mike Malouf of Craig-Hallum.

If I could start off just a little bit on the x dynamic installed on that revenue portion. Can you break that out a little bit more for us and just give us a little bit more color on what's going on there? It sounds like Single-Tap is starting to wrap and you have open market, but a little bit of color there and then particularly, on the gross margin within that x dynamic install section?

Yes, sure, Mike, this is Bill. Yes, so we saw a number of things in the quarter. First is, we saw improvements in advertiser demands and advertisers willing to pay high rate. So our revenue per slide went up, which is clearly a positive.

Secondly, with some partners we saw increased slot configurations for the holidays which I tend to like to do and that's obviously, an incremental revenue driver for the business as well.

And then finally, we saw a contribution of new products, so you'll start to see new contributions from things like Single-Tap, things like our Smart Folders, our notifications et cetera, a year ago in the December quarter, were basically year 0 or negligible.

So those are kind of the 3 drivers that drove the increased revenue. And then diversification of the partner mix, is really what help accrete the gross margin. So we're starting to see the international growth, the open market growth, the recycle devices growth, all be contributors there to our numbers. And then also contributing to that as more of the recurring revenues as we do some of these rev-shared agreements. So in other words, devices that may have been sold many, many months ago continuing to drive our revenue for us because we're on a revenue share basis. So those are really your drivers that help have us be on the top line and some material improvements in the terms of gross profit.

Okay, great, that's helpful. And then as you look out into the rest of the calendar year, specifically on addressing new carrier partners. Do you think they're going to come mostly from the Samsung relationship? Or do you actually have some that are maybe in the pipeline that are outside that relationship?

Yes, so I think what you see from us is really twofold. You're going to see new partners. There will be new OEM partners that, you know, currently we haven't announced yet, so that's independent of the Samsung relationship.

And then secondly, on the operator side, I think what you'll see is now that the majority of those operator device sales, especially in overseas markets are Samsung and we're integrated with them that knocks a big hurdle down for us.

So now for the other OEM relationships, whether those are manufacturers like Sony or LG or Huawei or whoever happens to be. We would go with our standard solution not the Samsung one. So from an operator perspective, they can now just do business with Digital Turbine and cover their entire device lineup where historically Samsung had been blocking them and now that we're integrated with Samsung that's no longer a blocker. So that's something we've got a lot of optimism about right now especially as it relates to operators in Europe and Latin America.

Our next question comes from Darren Aftahi of Roth Capital Partners.

Just a couple, if I may. First, you referenced, I guess, partner in your prepared remarks, and I guess and then in PR. If you kind of indulge us, perhaps what kind of partner that is? My second question is, Bill, to your comments about the recurring piece of your business. I know you said it was 5%. How much of that derivation is coming from domestic-based operations for those businesses versus international? And then how does the pipeline for those existing recurring customers look and new customers? And then I've got a follow-up on.

Yes, so apologies, Darren. The first part of your question, where you said partners, I'm not sure I was following you. Could you provide a little bit more color there?

I think you referenced a new partner not plural and I think...

Yes, that was TracFone. Yes, TracFone.

Okay. Got it, got, okay.

Yes. And then -- yes, as far as the recurring revenues go. This is a big deal. This is something that we've been focused on as a company as we started to see live over the entire -- in terms of over the entire device, a customer holds the device versus just out-of-the-box. And so now what we're seeing is a year ago that was 0, now it's roughly 5% of our revenues. The vast majority of it but not all of that is here in the United States. But let's say, is probably north of 80% of it but not north of 95% of it, just to give you a range. But we're seeing that growth becoming more material for our business and that's something that we put a focused effort on over the past 12 months and it starting to bear fruit for us. And as we start to see more and more open-market devices and by open-market devices, I mean a device that may have ignite on with a certain operator and then it gets shipped overseas or gets put onto another operator. Those things get recycled through the system. Those recurring revenue streams become more and more material for us. So that's something we're excited about. It also drives accretive gross margins for the business and somewhat insulates us from any potential macro headwind that go from device slowdown.

Great. Just 2 more, if I may. I think in the past you guys have, kind of, broken out growth in dynamic installed business, the preload and then kind of new product. I'm curious what those perspective growth rate or in revenue composition. And then at CES, there's a pretty big push for android as an operating system on TVs, I know you hinted at the expansion of the platform beyond handsets. I mean, how real of an opportunity is -- this something that's months away, years away or there's something that's kind of more near term for Digital Turbine?

Yes, sure. Yes, first, I'll take the TVs, and then I'll turn it over to Barrett in terms of some of the product revenue breakouts. As far as the TV, we've seen a lot of inbound interest rate right now. And I think that we're going to start to seeing a lot more competition for entrenched cable and pay-TV providers. And whether that comes from 5G or other over-the-top solutions and Android televisions, something that has a tremendous amount of energy in the marketplace right now.

But I think in terms of how all of those applications and how all that content is going to be distributed and moved around between the device and the television within the television and so on. We've received a lot of interest on how we can add some value there. Since it really is just in a effect, that Android stick with HDMI into a very big screen. So it's something we're familiar with how to manage that.

So I don't see it as something that will show up in March or June quarter results. But I do see it as something that is strategic for us and very complementary and can further deepen our relationships with our existing partners that are very much looking at this space. And as far as product period, I'll turn it over to Barrett.

Yes, Darren, to your question around the nondynamic install performance. We've seen a lot of success in those new products, revenue levels have been basically on pace with Q2.

So Q3 to Q2, similar pace of revenues, which are up considerable year-on-year, where we had very little those products in the market Q3 at this time last year.

Our next question comes from Sameet Sinha of B. Riley FBR.

Yes, couple of questions. Bill, I guess, since RPD is a strong driver of growth. Can you talk to us where do you see a ceiling? What sort of RPD could -- eventually you could get to based on your portfolio that you have right now? Secondly, just on Single-Tap. You said, of course, a number of devices up pretty significantly. But you mentioned operational and distribution demand exercised here. Can you elaborate on that a little bit and talk about how this could work and who some of the players in the ecosystem are? And lastly, just looking at fourth quarter revenue guide in a given kind of inline despite third quarter beat, this full 12% sequential decline is steeper than we had anticipated and partly what we've seen historically. So if you could just talk to us qualitatively about what sort of assumptions are you making? That will be helpful.

Sure. I'll take the RPD and Single-Tap question, and I'll turn it over to Barrett for the fourth quarter guide. As far as ceiling on RPD goes, if you look at where we were a year ago and where we were today and we say that we were up over 40% year-over-year. And that was really driven by 3 things. That was driven by growth of new products that didn't exist, so clearly incremental was driven by improved advertiser demand and it was driven by more slots with certain operators. I do think that the slot configuration does have diminishing returns on it. But the other 2, I see a tremendous ceiling for. And so it's very much our expectation that we'll continue to see revenue per device accrete as we look at that, and I'll call it a same-store sales type of basis as especially, since new products take hold. So that's very much a focus area for us. So I don't think we're near hitting the ceiling of what the opportunity set is for us. However, I will caveat that with -- as we add more and more international devices. The global RPD may go down as you've seen more contribution from international devices. But that doesn't mean that the RPD on kind of same-store sales basis with partners here in the U.S. will go down, we see that continuing to go up. And then as far as Single-Tap goes, yes, I mean we had a chicken or egg problem where the demand partners in some of which I referenced in prepared remarks really wanted to see scale of devices. And then the people that want to put up -- softer on the devices, the operators new OEMs want to see the demand partners. So we finally, worked through that, it took us longer than we'd have liked. And now that we're starting to see the revenues continuing to ramp week-over-week, which is great. But in order to get it to material nature, we've got to really scale in terms of just how we can add more salespeople, more integration, more operational integrations. And there's just some blocking and tackling, if you will, that just got to occur to make that happen. The good news though is that the fundamental premise of Single-Tap is that conversion rates are going to improve versus the traditional Google Play flow. And what we're seeing right now is Single-Tap that -- continues to be encouraging, is the conversion rates continue to look really good, anywhere from 30% to 200% better. So it's going to be a major focus area for us to continue to invest resources here to start making the revenues more material but what our premise was with it is off to a good start. So I'll turn it over to Barrett for the guide.

Yes, Sameet. So your question around the guidance we offered in Q4. So the midpoint of our guide would have revenues for the year just under 40% around 38%, and revenue growth for the quarter close to 27%. One thing to note is we're lapping AT&T and kind of they're getting the material scale this time last year. And so that's one fact that we contemplated the softness in devices, we've contemplated there's a lot of excitement around the new launch of the Samsung. But I think until we see it perform and that product perform well. We have -- we're pretty pleased with the 27% revenue growth in the quarter inherent in our guide. But there's not any other headwinds that you might be unaware of in the quarter.

Our next question comes from Jon Hickman of Ladenburg Thalmann.

Bill, so I just have 1, it sounds like on the international business and you mentioned that one of your partners actually -- international partners was up like tripe digits. Can you talk about American Móvil by any chance of that been -- are things doing better there?

Yes, sure. So America Móvil is really delivering much improved results from where we've seen it from prior quarters. That's really driven by 2 main factors. The first is we've done a better job on our side improving demand and improving our relationships in the regions to bring additional advertisers and bring better rates to the table. And then we've also implemented some technical improvements. There has been a long time in flight that really improve the delivery of the platform. American Móvil uses a different way to deliver applications than some of our -- actually all of our other partners do. And so we had a variety of technical work to do between American Móvil and ourselves and that went into production. And as a result, was able to deliver improved results. So it's a partnership we continue to be enthusiastic about. And I think combined with some of the our other partner announcements, things in the pipeline. We're very bullish on Latin America as we go into 2019.

Okay. And just one more is -- were there any positive surprises in the quarter that you weren't really anticipating that kind of helped things out?

I don't think there was any one single thing. I think, it's just -- from -- I think, from us -- and it was something that we saw in the December quarter. And it's a theme for us as we go into 2019, it's just diversification. We're just starting to see our existing partners continue to perform and continue to grow, which is fantastic. But they're starting to become a lower percentage of the overall story and dynamic install becoming a lowering percentage of the overall story. So the diversification we saw on the quarter from a variety of new partners, a variety of products and so on is really something that's starting to show up in the results now whether that's top line or expanded gross margins or better operating leverage on a platform. Those are certain things that give us a lot of excitement going into this year.

And Barrett, what are you going to do with all this cash you're generating?

I'd say it's a nice problem to have. We like the outlook. We like the fact that we're generating free cash flow and it's becoming a theme, so it's been nice.

(Operator Instructions) Our next question comes from Ilya Grozovsky of National Securities.

Just wanted to follow up and get an actual number. The new product -- what percentage of revenues were they in the quarter?

They were just above 12% in the quarter.

Okay. And the international revenues as a percentage of the overall piece, what was that?

Our domestic business was in the mid-80s, so international would have been close to 15%.

This concludes our question-and-answer session. I would like to turn the conference back over to Bill Stone for any closing remarks.

Yes, thanks, everyone, for joining the call today. We look forward to reporting on our progress against all the points that we made on today's call, and we'll talk to you again, on our fiscal fourth quarter call. Thanks, and have a great night.

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