8x8 Inc (EGHT) 2010 Q4 法說會逐字稿

Good day ladies and gentlemen, and thank you for standing by. Welcome to the fourth quarter 2010 8x8, Incorporated earnings conference call. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference may be recorded.

Now I would like to turn the program over to our speaker, Joan Citelli, Director of Corporate Communications. Ma'am, please go ahead. Thank you and welcome everyone to our call. Today I am joined by 8x8's Chief Executive Officer and Chairman of the Board, Bryan Martin, and 8x8's President and Chief Financial Officer, Dan Weirich, to discuss our results for 8x8's fourth fiscal quarter and full fiscal year ended March 31, 2010. If you have not yet seen today's financial results, the press release is available on the Investors tab of 8x8's website at www.8x8.com. Following our comments there will be an opportunity for questions.

Before I turn the call over to Bryan, I would like to remind all participants that during this conference call any forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals including financial guidance and similar expressions, including without limitation expressions using the terminology may, will, believe, expect, plan, anticipates, predicts, forecasts, and expressions which otherwise request something other than historical fact, are intended to identify forward-looking statements. These forward-looking statements involve a number of risks and uncertainties including factors discussed in the Risk Factors sections of our Annual Report on Form 10-K, and our quarterly reports on Form 10-Q, and in our other SEC filings and Company releases.

Our actual results may differ materially from any forward-looking statements due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements, in order to reflect events or circumstances that may arise after this conference call, except as required by law. Please note that management will be continuing our corporate practice of not offering or providing any forward-looking guidance on the Company's financial results, forecasts, or similar future expectations. And your cooperation is appreciated in not asking any questions in this regard. Thank you.

And with that, I will turn the call over to Bryan Martin, Chief Executive Officer and Chairman of the Board of 8x8.

Thank you Joan, and good afternoon everyone. 8x8 performed well in its core business customer segment in the fourth fiscal quarter of 2010 ended March 31. Compared to the same period last year, revenue from business customers increased by 25%, and sequentially quarter-over-quarter revenue from business customers increased by 6%. For the entire fiscal year ended March 31, revenue from business customers was $48.7 million, with a revenue run rate for Q4 FY 2010 business revenue annualized of $53.8 million.

For those of you that have followed our story for more than a year, you will recall that we started a practice on March 1 2009, to subsidies the equipment to increase the conversion rate on our leads. We continued this practice throughout fiscal 2010. This resulted in a decline in product revenue in 2010 compared to 2009, because we sold the equipment for less than we did in the prior year. The reason we did this was to lower our overall costs of acquisition by significantly increasing the conversion rate of our leads generated by advertising dollars, which is a sunk cost once the money is spent. To illustrate the improvement in the past year, we have added a new line of information to our selected operating statistics table, which you will find in today's press release called Service Revenue from Business Customers.

Service revenue from business customers is revenue from business customers less product revenue from business customers. Between fiscal 2009 and 2010, service revenue from business customers grew by $9.5 million, compared to $9 million between fiscal 2008 and 2009. This growth occurred amidst the largest recession in the past 70 years, and during a period when our cancellations for economic related reasons, or businesses that were going out of business, increased by 50% relative to the historic norm.

The year-over-year growth rates by quarter for service revenue from business customers for Q1, Q2, Q3 and Q4 of 2010 were 21%, 27%, 29%, and 31% respectively. Service revenue from business customers grew by $1.7 million, $2.2 million, $2.6 million, and $2.9 million between the same periods. Since this revenue is mostly recurring, it provides a strong base from which we can build our business as we layer on new business customers. New monthly recurring revenue sold in Q4 2010 was a record $606,000 compared to $527,000 in Q3, and $472,000 in the same period a year ago.

In the fourth quarter, business customers represented 85% of total revenue, compared with 68% in the same period a year ago. Also encouraging was the fact that we saw cancellations from our small business customers going out of business moderate back to 41% of total cancellations, the best showing in three quarters. The 27% sequential decline of revenue from our residential customer segment continued at roughly the same order of magnitude as recent quarters. 8x8 posted its ninth profitable quarter out of the last ten with net income of $1.1 million, which resulted in $3.9 million of total net income for the entire fiscal year. We posted net income in every quarter of fiscal year 2010.

Our cash balance at March 31 was $18.1 million, with no debt. As Dan will detail in a minute, our net income and ARPU numbers in the fourth quarter were slightly impacted by approximately $70,000 of credits that were issued to business customers as a result of our service outage on January 12th. Legal discussions with the non-affiliated entity which caused this outage are continuing.

You will recall that we launched our new suite of Unified Communications services, which we call Virtual Office Pro on January 20th. As of March 31, we had 4,348 net new subscriptions to these new services, each with a recurring ARPU in excess of $20 per month. Sales of Virtual Office Pro remain strong, and we are readying the 2.0 release of these important software services. While Unified Communications offerings have been prevalent in the headlines from suppliers such as Avaya and Cisco, we have found that our services are orders or magnitude less expensive to install and to use on an ongoing basis, than competitive offerings with the same feature sets.

Our customers continue to be amazed at the total cost of ownership of 8x8's unified communication services over other competitive offerings in the market. Our unified communications offering is the only true software-as-a-service cloud-based unified communications offering for businesses. All others require a server client model.

On March 31, our direct sales team employed 61 quota carrying sales people, and we have formed a new enterprise and government sales team, currently consisting of six full-time employees. I am pleased to see a lot more efficiency resulting from reduced head count in our new sales organizations, restructured to focus separately on landing new accounts and the account management of existing customer accounts, those with a focus on upselling these existing accounts new additional services and obtaining referrals.

Before I turn the call over to Dan I want to discuss several items which occurred after the end of the fiscal year, which I believe will have positive impacts on our current fiscal year. First in April 2010, 8x8 sold its European subsidiary to a new startup in Los Altos, California called Stonyfish. We also invested $250,000 cash, and a nonexclusive license to certain 8x8 technology in the new venture, which will result in 8x8 having a 17% ownership stake in Stonyfish after its initial round of financing. Divesting our European operations in France will save 8x8 approximately $700,000 annually, while we retain a stake in the entity which has acquired it for potential future upside. All 8x8 research and development activities will remain at the Company's Sunnyvale, California headquarters under the leadership of 8x8 Chief Technology Officer, Ramprakash Narayanaswamy.

Secondly in May of 2010 8x8 acquired Central Host, a Los Gatos, California company providing managed hosting services, and private cloud-based computing solutions to business customers. Central Host managed hosting services enable business customers to reduce costs, and gain performance and reliability advantages by eliminating in-house ownership of server equipment and costly information technology systems management resources. Central Host's cloud-based services support a wide variety of hosted applications and services via high quality data center space on the West and East Coasts, a 24x7 operations staff, state-of-the-art server resources, and systems management experts. Central Host currently operates three data centers in Silicon Valley and one data center in New York City.

I think that is lot of our investors are not aware that 8x8 already manages these types of identical server operations internally, in order to provide our hosted business communications services. We expect to realize cost savings from the synergies between Central Host's cost of service drivers and 8x8's. By productizing our existing server management function using Central Host's proven business model, we will create a new revenue opportunity with our existing and future customers. Importantly 8x8 has proven its ability to upsell its existing customer base, with the release of its unified communication service, which has become a nearly $1 million annual business in less than three months. 8x8 will leverage the infrastructure create to launch Unified Communications, to also upsell managed hosting to our business customers.

In addition, the economics of upselling managed hosting to current and future customers are very favorable, because there is no incremental cost of acquisition, making the upsell 100% accretive to reducing the payback period on new business customer acquisitions. Central Host customers are currently paying on average more than $2,000 per month in recurring revenue for managed hosting and private cloud computing services. Central Host has a current annual revenue run rate of approximately $1.2 million, and we anticipate that the integrated entity will produce operating margins of approximately 25% at this revenue level.

Many of Central Host's existing customers are high tech Silicon Valley startups, financial companies, and media companies. We believe these represent our ideal target company for Virtual Office communications services. Central Host also specializes in migrating customers away from a shared utility cloud-based platform that they have outgrown, for either performance reasons, or who have a need to the payment card industry, or PCI-compliant, in a private secure environment for Ecommerce and credit card processing transactions. The integration of Central Host with 8x8s operations is now largely complete, and we are off to the races to offer these new complementary services to the businesses we speak to each and every day. We believe that 8x8's brand and proven customer service and sales operations will be able to rapidly expand the reach and service levels of the Central Host service offerings.

Lastly, in late April 8x8 launched a new advertising campaign in the greater San Francisco Bay area, targeting radio, direct mail, print and display advertising channels, to give greater reach to our marketing efforts to business customers. The radio campaign has been well received in Silicon Valley, where we have heard from numerous constituents that they are aware of our increased advertising presence. The radio ads can be heard on 8x8's website or throughout the San Francisco Bay area. We have budgeted approximately $1.2 million towards these new mass media efforts over the next six months, and I look forward to updating you on our progress towards accelerating new business customer sales from these efforts in our next quarterly call.

With that I am going turn the call over to Dan Weirich, the Company's President and Chief Financial Officer, who will walk you through our detailed financial results, and provide additional information regarding our business. Dan?

Thank you, Bryan. I am pleased to announce $3.9 million, or $0.06 per share, of net income in 2010. This is an improvement of $6.4 million, or $0.10 per share, compared to fiscal 2009. We ended 2010 with working capital and stockholder's equity of $11.3 million and $13.3 million,compared to $7.4 million and $9 million at the end of 2009.

Our strong balance sheet and track record of increasing our cash balance quarter after quarter, give us the confidence to begin deploying the capital we have built up over the past three years. We ended 2010 with 20,428 business customers, compared to 16,013 a year ago. Gross margins were 68% in the fourth quarter, with service margins of 77%, and product margins of negative 43%. Average monthly service revenue per business customer was $204 in the March quarter.

On January 12 during the middle of the business day, our network was entirely disrupted by a Tier 1 internet service provider for approximately four hours. The Tier 1 internet service provider is not a vendor of 8x8 for the services that disrupted our network. We compensated our customers with approximately $70,000 of credit that we can directly attribute to the outage. These credits reduced our average revenue per business customer by $1, from $205 to $204. The credits given are only the most tangible direct costs associated to the outage.

Our customer support expense was approximately $150,000 greater in the fourth quarter than the third quarter, due to overtime hours and high telephone bills to handle the extremely high call volumes we experienced in our contact centers. In addition we incurred more than $30,000 of legal expense related to this matter in the quarter. Our churn increased from 2.4% in the third quarter, to 2.7% in the fourth quarter. We attribute a significant portion of the increase in churn to the outage.

On a more positive note, services sold per new business customer reached a record high of 10.4, compared to 8 in the same period a year ago. The average number of services per business customer for our entire customer base was 7.5 in the March quarter, compared to 6.6 in the same period a year ago. We are seeing continued adoption of our services by businesses that are larger than our historical norm.

Business service gross and contribution margins remained strong at 82% and 63% respectively. Cost of acquisition was $723 per business customer in the March quarter, compared to $785 in the same period a year ago. The Company's $1.1 million in net income includes $22,000 of stock compensation expense, and a $216,000 noncash benefit to account for the change in the fair value of our warrant liab holding. Depreciation during the quarter was $224,000. Capital expenditures for the fourth quarter were $123,000, and the entire year was $1.1 million.

We expect the transaction expenses for the sale by 8x8 Europe SARL, and the acquisition of Central Host Incorporated to be less than $100,000 in the first quarter of 2011. As of March 31, 2010, total shares outstanding were 63.2 million, and total shares fully diluted were 75 million. The warrant shares related to the $216,000 noncash gain have a strike price of $3, and an expiration date in December 2010.

That concludes my prepared remarks, and I will now turn the call back over to Bryan.

Thank you, Dan. For your reference and convenience we have posted a transcript of our prepared remarks on the Events and Presentation section of 8x8's Investor website that you can reach at Investors.8x8.com. We will now be happy to take any questions you may have. Operator, please open the line for any questions.

Thank you, sir. (Operator Instructions). Our first question in queue comes from Mike Crawford with B. Riley & Company. Your line is open.

Thank you. First question relates to the Virtual Office Pro, so that is a great uptake on the unified communications in the first 2.5 months or so. What has the trend been in the ensuing six or seven weeks since the quarter ended?

Mike, this is Dan. It has continued at the rate that we were seeing in the roughly 70 days of the fourth quarter that we were selling it. So it has been selling very well for the six weeks since the quarter ended.

Okay. And similar, Dan, what about, business sign-ups, churn, et cetera, on the Virtual Office this quarter?

Oh, this quarter?

Yes.

It is very consistent with what we have done in the prior quarters. We have been adding over the last couple of years between 2,700, 2,600 and 2,900 in gross customers and that is kind of what we are on pace for this period.

Okay. Great. And then with residential decline has masked in recent years the fairly impressive growth of Virtual Office, so I think it looks like, I mean what was it, 15% of revenues last quarter, looks like it will probably be 10% of revenues tops next year, is that an accurate estimate?

Correct, yes.

And then could you just talk a little bit more about this Central Host acquisition? I am sorry, they have four different data centers right now, and you have some, and I think in the past you have talked about on one hand wanting to consolidate data centers, and on another hand wanting to spread out at least in terms of geographically to reduce the risk. What is it going to look like going forward?

We have a lot of data centers now, Mike. This is Bryan. We came into the, from our side, at 8x8 we have currently three data centers, they are all right here in Silicon Valley. Central Host has three data centers in Silicon Valley. One of those is common to one of our data centers, so we both knew where each other's equipment was, and probably past each other in the man trap getting into and out of those data centers.

Central Host also has one data center that is on 8th Avenue in New York City, and they primarily set that up in order to service some finance kind of companies out there, hedge funds that are running like their Nirvana platform, hosted on these servers, and also there is some kind of Washington DC-based media companies, that a lot of their readership is based either in Washington DC or New York City, and they had a requirement for an East Coast presence. We need to do a little bit of work.

Some of the leases that Central Host has are actually up in June, and so we will be probably between June and December of this year kind of rationalizing and consolidating that, and taking advantage of the different pricings that both companies have locked in right now. But we still have as a goal here to eliminate, especially as we sell to these government and large enterprise customers, we need to eliminate the geographical liability we have to the earthquake faults up here in northern California, and so as part of this consolidation, we will certainly be achieving that geographical diversity as well.

Okay, thanks, Bryan. This week there was also this acquisition that Google made of Global IP Solutions, a Swedish company they are paying like 5 times revenues for.

Yes. I saw your note on the valuation, and I heartily agree with the sentiments.

Apparently one of the attractions is some HD audio and video. That is not too different from what you offer with Virtual Meeting, is it not?

That is right. The Kodak technology, which is kind of the telecommunications term, for what GIPS was a provider of, is one of the components in this larger umbrella of different services that we sell. We rolled out High Definition voice a couple of quarters ago. All of our new services are provisioned with High Definition voice provision by default. We also support, it is High Definition from a Kodak sense, in the sense that it is running like the latest compression, video compression protocols in our Virtual Meeting product. If you were to join on our Virtual Meeting service, and turn on your web cam, you would have High Definition video capabilities there as well.

I think it is probably, my read on it is, it is just more kind of consolidation in the industry. I think the smaller companies, again, are kind of defensively positioning themselves given the current funding environment, and certainly getting bought by Google is a very defensive position. We like to see the valuations, and we were glad to see that Google had to announce the valuation, because we normally don't get to see what they paid, and I like the revenue ratios just like you did.

Thank you. Final question relates to where you are competing in the small office, home office space, I mean increasingly you have maybe not increasingly, but to some extent, you had some success selling to slightly bigger enterprises where you are almost bumping up against Cisco and Avaya, and now you even have this dedicated enterprise sales force. What are the dynamics there, and did you have any larger customer wins in the past quarter? Thank you.

We are clearly winning business there. I visited, one of the first customers we took the principal of Central Host in to meet is a company that actually has got worldwide offices, but their Palo Alto office has 70 phones, and so that makes them a pretty large monthly ARPU kind of customer for us. We took our managed hosting offer up there, to meet the Director of IT, and the conversations went very well. We are seeing a lot of synergies there.

I think it is interesting because I think the advantage we have with the current product positioning is our voice services were built with the small business owner in mind, but we are finding to the extent that a large enterprise has distributed employees and offices and locations, our small business product is a great fit for that. The dynamics are a little different, the sales cycle is obviously much longer. It is an in-person sale. A lot of times we are having to respond to a formal request for proposal or request for bid, and then get into a long negotiating cycle with a purchasing department. We have to win over the mind share of the IT department or CEO, whoever is making that decision.

The Central Host managed hosting services and their private cloud services, equally serviced both the very tiny business, the small start ups, and these larger enterprise customers, that have similar managed hosting needs, and similar needs to kind of outsource that IT functionality in the current environment, where everyone is trying to pinch their IT budgets to the bone. We think we have got an offer on both voice and managed hosting that applies to both classes of customers.

I think the dynamics of selling to each class is kind of the same, that the smaller businesses are two to four week sales cycle, and the larger businesses is kind of a multiple month sales cycle, but the payback dynamics, both the number of months for the customer to break even and start saving money, and the number of months for us to generate a return on our investment, in terms of getting that customer sold and provisioned, are almost identical in what we are looking at, except for the fact that we end up with a much larger customer obviously paying much larger monthly ARPU.

Okay. Thank you.

You are welcome. Thanks, Mike.

Thank you, sir. Our next question in queue comes from Mike Latimore with Northland Securities. Your line is now open.

This is [Ian Kelson] in for Mike today. Getting back to the Central Host. The 25% operating margins you think you can generate, how quickly can you get there? Is that by December, or when do we see those?

In the month of May, the operating margins on that business are in excess of 25%.

Okay.

But it a business that we are going to be investing in. We need to hire some sales people, a couple of system administrators to scale this more aggressively. The company has roughly 50 customers, and it is something that we could exceed that number in a pretty quick manner. It is a business that we will be investing in, but I think at a steady state of a growth mode, you could predict 25% operating margins there.

Okay. If you look at the new customer adds, the larger customers, I don't know, call it 25-plus people, how is that turning as a percentage of new adds?

We don't break out the percentage of customers that have 25 lines or above as a percentage of new adds. If you saw the figure from my section of the script, the average lines of services per new customers is 10.4, which is up 8 from a year ago. The customers overall are just getting bigger, and when I say bigger, it is like ten line businesses, but also in the 25 to 50 to 100 line businesses as well.

Sure. And then getting back to some of the new marketing efforts we know you guys have been going through, any way to quantify just initially what you are seeing from that, in terms of new leads, or anything along those levels? Any sort of detail you can give us there?

You are echoing exactly what I heard from my Board yesterday. We went live in the San Francisco market on April 21st, and we really are just at the beginning phases of rolling this campaign out. I stated that we have allocated about a $1.2 million budget over a six month campaign, and so I can tell you two things that I have noticed.

One is that I know that we are hitting our demographic here, because I go to a Little League game and all of the moms of the other teammates that have their own small businesses, come up to me and let me know that they have heard the ad. I go to a party and everyone says that they heard the ad. I mention it at the bagel shop, and the bagel shop owner has heard the ad. I know we are getting the right demographic, and they tell me that they hear the ads a lot. I think we have got the frequency about right.

We have looked at initial data on our website traffic from San Francisco Bay area destinations, and we have seen a lift in that. We still haven't seen the sales follow through, nor would we expect to at this point. We did a business radio campaign in Austin several years ago. I think we ran the campaign for about three months, at which point we still hadn't seen very many sales. We pulled the campaign at the end of month three, and then in months four, five and six I started seeing the sales roll in from that campaign. Our expectation is that we are going to have run this thing for the six months, and then look at it in the aggregate, and see if it is a sustainable model that we can replicate in other markets. I think it is just too early to comment on it yet, given all of that data.

Sure, okay. My final question here and then I am done, on the full unified communications suite, what percentage of new customers are signing up for it? Versus customers coming from your already installed base?

Yes. It is approximately 25% of new customers of subscribing to the service.

Who take at least one subscription.

Great, thanks, guys.

Thank you.

Thank you.

Thank you. (Operator Instructions). Next question in queue comes from Anthony Marchese with Monarch Capital. Your line is now open.

Anthony?

Pardon me. Anthony, your line is open, please check the mute button on your phone. Alright. Our next question in queue comes from Patrick Lin with Primarius Capital. Please go ahead. Your line is now open.

Hi, guys. Congratulations on making this transition here from mostly residential. Can you give me a little bit more update and clarity on, number one, what exactly does the Virtual Office Pro do, in terms of, I know you talked about how you can turn some of these iPods into phones without having to use a separate phone line. And then second question is, if you could give a little bit more update on what you think the investor reactions have been so far with you guys getting the story out, and what your plans are for the future?

Okay, thanks, Patrick. This is Bryan. Virtual Office Pro is an umbrella term that we use to describe a bundle of different individual services, that are sold as one common subscription for typically $20 to $25 per seat per month, and it number one, enables you to extend the functionalities of your Virtual Office IP telephone, to both any Flash-enabled web browser or to the Apple iPhone, iPod, iTouch, iPad family. And the reason we have separate interfaces there is Apple doesn't like Flash, and we built all of these technologies that work with the web browsers in Flash.

When I say you extend the functionality of the phone. It means you can place and receive calls. You can check your voice mails, you can see whether you have voice mails. You can record your calls, and we provide a hosted recording and storage facility, where we give you 35 hours of recording included in that $20 a month price. You also get access to unlimited use of our Virtual Meeting service, which is the web collaboration kind of meeting. We are running that today for investors that have joined us via that service.

It gives you the same functionality you can get with something like Cisco Webex, or go-to-meeting, it also gives you remote desktop control of distant PCs, so there is a product in the market that is called GoToMyPC, which essentially that same functionality is available as well. And then we also roll in eFax, we integrate all of your chat clients across your enterprise in a common chat interface. We let your manage your voice mails and your received faxes, and so forth. It knows your Outlook password, it integrates, all of your contacts are automatically imported into it. It just becomes a much more efficient way to a choose when and where and how you are going receive your place or receive your telephone calls, your faxes, your voice mails, and so forth.

I made a comment that there has been a lot of unified communications news and press releases in =the last couple of quarters, and it is a very hotly marketed topic these days. We have seen quotes from some of the larger PBX manufacturers, and in order to get your switch upgraded, and pay $500 a seat for a license, and then you still have the OpEx costs on the monthly total ownership. We are offering something for $20 a month. I don't see anything else out there that delivers the functionality we have got at this price point, and our customers are very enthusiastic about it.

We have got some customers who say that is the main reason they are signing up for the service is to get access to VO Pro. In terms of the investor story, I don't know that I have a good update right now, only because this is the one quarter, where because it is year end, we are getting our K ready for file. Our numbers have been kind of stale for a while. We were at three investor conferences, and one entrepreneurship conference in Santa Clara, making presentations last week, and I was still having to show investors my 12/31 numbers. So I am glad, we are going to be a B. Riley next week down in Santa Monica. And we are eager to go there with a fresh presentation and a new update, and will probably be in a better position to chat with you about what the investor reactions are, after we actually talk to some of them next week.

Terrific, thank you.

Okay. Thanks, Patrick.

Thank you, Patrick. (Operator Instructions). Our next question in queue comes from Anthony Marchese with Monarch Capital Your line is now open.

Hi, sorry about the technical difficulty earlier. Question for you with respect to your residential division. Have you guys given any thought to perhaps divesting it, or obviously selling it to someone, because it is clearly not a central part of the story, and obviously masking what I think is exceptional growth in every other part of the business?

Thanks Anthony, this is Bryan. So a couple of years ago, it was December of 2006 when we made the decision to just focus all of our marketing efforts on the business side of the house, and we did look at different ways to sell off or divest the residential customers back at that time, and we couldn't find any takers at kind of the valuation we thought that base was worth. The base has obviously gotten very small. We are below $1 million a month in recurring billings at this point, and we have actually taken a fresh look at potentially selling that off to some service providers, that in 2006 we frankly didn't approach, because number one, some of them didn't exist back then, and number two, they were probably too small at the time to be able to talk about the type of transition we were envisioning back then.

But with the base now down at its current size I think it could be quite attractive to some of these service providers. We are actively engaged in very preliminary discussions with several providers, about how to structure a transaction where we would move those customers off to the service provider, and that would kind of enable the growth numbers on the top line, to come through from our business space. We are pursuing that, and hopefully have some sort of update on that soon.

Great, thank.

Thank you.

At this time I'm show nothing more questions in the queue. I would like to turn the call back over to you, Bryan.

Thank you very much. And thank you everybody for joining us today. Again, if you are not already a customer of one or more of our services, I encourage you to sign up and look at our services, and you can get a lot of information about that at www.8x8.com,or you can call us at 866-TRY-VoIP. Go ahead, operator.

Thank you, sir. Ladies and gentlemen, this does conclude today's program. Thank you for your participation, and have a wonderful day. Attendees, you may now disconnect.