Edgio Inc (EGIO) 2015 Q3 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Limelight Networks 2015 third quarter financial results conference call. (Operator Instructions) I will now turn your call over to Sajid Malhotra, Limelight's Chief Strategy Officer.

Thank you, Chelsea. Good afternoon and thank you for joining the Limelight Network's third quarter 2015 financial results conference call. This call is being recorded on November 3, 2015, and will be archived on our website for approximately 10 days. Let me start by quickly covering the Safe Harbor.

We'd like to remind everyone that we will be making forward-looking statements on this call. Forward-looking statements are all statements that are not strictly statements of historical fact, such as our outlook for Q4 and the full-year of 2015 and beyond, our priorities, our operational plans, and business strategies. Actual results could differ materially from those contemplated by our forward-looking statements and reported results should not be considered as an indication of future performance.

For more information, please refer to the risk factors discussed in our periodic filings, including our most recent annual report on Form 10-K. The forward-looking statements on this call are based on information available to us as of today's date and we disclaim any obligation to update any forward-looking statements, except as required by law.

I'm joined today by Bob Lento, our Chief Executive Officer, and Pete Perrone, our Chief Financial Officer. We will be available during the Q&A session at the end of our prepared remarks. I would now like to turn the call over to Bob Lento.

Thanks, Sajid, and good afternoon. Earlier today we delivered our third quarter results. Evident in these results is the progress we've made, work that remains and the opportunity that lies ahead of us.

Revenue in the quarter was up 8%, a significant improvement over the 9% decline in revenues period over period a year ago. Excluding Netflix revenues in the prior year quarter, and the impact of currency, revenue was up 14%. Our network resilience performance and throughput are up and we delivered record levels of traffic volume.

Operating expenses as a percent of revenue have essentially been flat. We just completed our fall customer satisfaction survey and our net promoter score continues to improve significantly. Since we started the Voice of the Customer program in 2013, our NPS score have improved by over 60 points. For these reasons and many more, I'd like to take a moment and thank our employees for their hard work and dedication.

Even with this progress, there's a lot of work ahead of us. First, we were consistently improving our financial performance, driven by increasing revenue and improvements in our gross margin. In the third quarter, gross margin took a step back compared to the sequential and prior-year quarter. Let me explain why and also why I believe this will correct in Q4.

In the prior year period, we had $1.2 million of tail revenue from Netflix, with very little cost associated with that. Also, you may recall we had a $1.1 million non-recurring credit with one of our collocation providers. Both of these items make the year-over-year comparison difficult. At the same time, consistent with our comments during the second quarter conference call, we forward priced a couple of large customer contracts.

The committed revenue dollars and volumes pushed pricing with these customers to levels that have impacted gross margins and slowed sequential revenue growth to some extent. For these contracts in the near-term, we have better visibility, price stability and much higher volumes. Importantly, we can take cost out over the life of these contracts. As we take costs out and maintain these prices, we expect to recover from the early hit we have taken to margins.

This was a business decision, and we based it on our ability to take costs out over time. I am confident with these actions we will return to meaningful gross margin expansion in the business.

We continue to see very healthy trends in the market, and clearly we've caught up with industry growth rates. We've emphasized growth to this point, and we will now shift our emphasis to profitability. Demand is healthy, customers want our solutions and value our CDN capacity across our targeted use cases, delivery of software, gaming, video and live streaming. We firmly believe demand from new and existing customers will continue to increase.

In mid-August, the US Court of Appeals for the Federal Circuit issued its opinion reversing a previous decision that Limelight was not liable for direct infringement in our longstanding patent case with Akamai. We are disappointed that this outcome isn't aligned with recent rulings in our favor and are awaiting a ruling on our pending cross appeal. We plan to continue to vigorously defend our position in the event that the pending appeal does not dispose the case in our favor.

We believe that the range of reasonably possible financial outcomes of the dispute could be anywhere between $0 and $76 million. While we are unsure of the timing of the ultimate outcome of this case, we believe an adverse final determination requiring payment by us at the upper end of that range is not likely to occur in the next 12 months.

Because of the potential liability associated with the pending dispute, we have expanded our sources of liquidity. Specifically, we recently finalized a $25 million revolving bank line. We've also entered into a vendor financing agreement to fund a portion of our infrastructure upgrade and expansion plans.

Finally, earlier in the fourth quarter, we took action to reduce our workforce and decrease other costs. This will allow us to become profitable on an accelerated basis and at lower revenue levels.

Together, these actions will allow us to continue to invest in the business and serve our customers the way we want to and the way they expect us too, even at the upper end of the range of an adverse legal outcome.

During the quarter we hit a few milestones and successes that I'd like to share. First, I'm proud to say that once again during this quarter, we had a record breaking traffic day, month and quarter. If you remember, Q1 and Q2 both saw record breaking traffic for those quarters. In this third quarter, we achieved a new record for both peak bandwidth and petabytes delivered. In addition, we've delivered for some marquee customers, including very large global software updates, new releases of online games and very visible live streaming events.

In September we participated at the IBC show in Amsterdam, where we launched enhancements to the Limelight Orchestrate solution for media and broadcasters. This cloud-based integrated end-to-end workflow solution makes it easy for organizations to manage, publish and deliver live and on-demand video content. The new features enable better control of cash content, improved performance of long tail content, convert live content automatically to popular mobile formats and ensure up time and availability of video delivery websites.

This solution empowers broadcasters and media content owners to deliver broadcast quality video to online audiences globally and was well received by our customers, the press and industry analysts.

We've heard and talked a lot about the health of the industry and the growth potential. Let me talk about a few of our recent wins that are illustrative of the new business models and the applicability of our solutions to industry needs.

Our new wins include an over-the-top content provider based in the US, providing over 200 channels in 13 languages, choosing Limelight to deliver their content. An airline based in the Philippines chose Limelight to deliver their main website and their booking site. A large global retailer based in the UK chose Limelight's security services to protect their content and website. A US based online platform for video storytelling chose Limelight delivery, along with our MMD live functionality to enable them to live stream to multiple devices with broadcast quality.

We are pleased with these customers and many others like them chose Limelight for their business needs, and we continue to work hard to exceed their expectations. As I've mentioned before, we want customers for life. We work hard to support customers and enable their growth and I'm proud of the relationship that our team has built with all of our customers.

As I've said in our calls earlier this year, our priorities for 2015 remain unchanged. We remain focused on our customers, improving operations, reducing customer churn and employee turnover and delivering key product functionality, all while maximizing internal cost efficiency.

Customer satisfaction was, is and will remain our top priority. To these and in light of recent events, we've added cash flow generation as a top priority. If 2015 is recognized for our return to revenue growth, I want 2016 to be the year that we begin to generate cash. We will discuss all of this and more when we discuss our fourth quarter and full-year results early in 2016.

As for guidance, we are leaving in place the revenue guidance of between $170 million and $174 million for the full-year and tightening the non-GAAP net loss range of between $0.10 and $0.14 per share for 2015.

Gross margin should improve by over 200 basis points in the fourth quarter over fourth quarter 2014. Capital expenditure expectations remain unchanged at between $22 million and $26 million for the year. And while early, we believe 2016 revenue will be in the range of $180 million to $195 million with non-GAAP earnings per share of between negative $0.05 and positive $0.05 per share.

With that, I'll turn the call over to Pete to discuss this quarter's financial performance in greater detail.

Thanks, Bob. Third quarter 2015 revenue was $42 million, cash gross margin was 49.8% and adjusted EBITDA was approximately $300,000. During the third quarter of 2014, revenue from Netflix was $1.2 million. We had no Netflix revenue in the third quarter of 2015.

Revenue was negatively impacted by foreign currency fluctuations of approximately $1 million year-over-year, and $200,000 sequentially. Excluding Netflix, our revenue increased by 11% year-over-year, and adjusting for currency changes, increased 14%, compared to Q3 2014. Sequentially, our revenue decreased 4%, after adjusting for currency changes.

In Q3, international revenue accounted for 42% of total revenue and approximately 18% of our third quarter revenue was in non-US dollar-denominated currencies. APAC results were particularly strong, and were led by the adoption of our global solutions by consumer electronics companies based in this region.

Our core delivery volume was again at record levels in the third quarter of 2015, with our largest software and gaming customers peak traffic levels growing at extremely high rates versus a year ago, and even sequentially. Our customer mix shift towards higher volume customers continued this quarter, consistent with our comments last quarter. And this shift, and the two contracts Bob mentioned in his remarks drove average selling price down at higher than historical rates during the third quarter.

In Q3 2015, our top 20 customers accounted for approximately 58% of total revenue. These customers continue to grow at a healthy double-digit rate, consistent with our strategy and focus. Our deliver product family continues to account for the vast majority of our revenue and was 77% of our total revenue during the quarter.

GAAP gross margin of 37.8% is down 360 basis points from 41.4% in the prior year quarter. The third quarter of 2014 included a non-recurring credit of $1.1 million received from a collocation provider, which represents 280 basis points of the decline. In connection with record traffic levels, last mile bandwidth expenses grew at a faster rate than revenue increase when compared year over year and sequentially. This increase more than offset decreases in the other cost categories and was the primary contributor to the reduction in cash and GAAP gross margins.

Adjusting for the Q3 24 vendor credit, collocation and other datacenter expenses decreased as compared to Q3 2014 and Q2 2015 as we continue to make progress on rightsizing our footprint and driving efficiencies. These expenses were reduced despite record traffic levels and incurring duplicate charges on certain datacenters and other non-recurring expenses associated with consolidation projects.

GAAP operating expenses were $24.2 million, or 57.4% of our revenue in the third quarter of 2015, an increase of $1.8 million or 8% versus the third quarter of 2014.

R&D expense increased $1.9 million, or 35% year-over-year, primarily due to higher payroll and related costs, as we have added employees to support future product enhancements and increase network resiliency, and also in part to the reorganization that moved approximately $650,000 from cost of goods sold to R&D.

Sales and marketing expense increased by $800,000, or 9%, versus the year-ago quarter, as we have added new sales employees to drive our growth plans. G&A expense decreased by $700,000 year-over-year, primarily related to decreased third party consulting fees.

Compared to Q2 2015, GAAP operating expenses declined slightly as we controlled operating expenses to compensate for lower gross margin levels.

Q2 2015 also included the reversal of a previously accrued legal fee of $1.2 million, so adjusting for this reversal, total GAAP operating expenses declined $1.4 million sequentially.

We had other income of $500,000 in the third quarter of 2015, compared to income of $1.3 million in Q3 2014 and expense of $100,000 in Q2 2015. Fluctuations are primarily driven by changes in foreign currencies.

Adjusted EBITDA was approximately $300,000 in the third quarter of 2015, down from $1.4 million in the third quarter of 2014, and $900,000 last quarter.

On a non-GAAP basis, our net loss was $0.04 per share in the third quarter of 2015 compared to a non-GAAP net loss of $0.02 per share in the third quarter of 2014, and $0.04 per share last quarter.

Moving to the balance sheet, cash and marketable securities were down $5 million sequentially to $70 million as of September 30, 2015. During the quarter, we spent $8.7 million in capital expenditures. Year to date, our CapEx is $20.7 million. Q3 was unusually high, based on timing of some vendor payments.

DSO as of September 30, was 57 days versus 47 days at the end of 2014, and 65 days at the end of the second quarter. Also, as Bob said, we recently finalized a $25 million revolving line of credit with Silicone Valley Bank.

As of September 30, we had approximately 101 million shares outstanding. Total employee count at the end of the quarter was 556, down 7 from the end of the second quarter, and up 47 from the year-ago quarter.

In October, we announced a reduction in force of 44 employees or approximately 8% of our global workforce. These positions were spread across various functions and geographies. With these reductions and other cost reduction initiatives, we expect that our non-GAAP quarterly operating expenses in 2016 will average approximately $20 million versus $22.6 million in Q2 of 2015.

As a reminder, non-GAAP expenses excludes stock-based compensation, patent litigation expenses and amortization of intangibles. We will control operating expenses in line with revenue growth and gross margin in order to achieve our goal of reaching cash flow breakeven in 2016.

With that, let me open the call for your questions.

(Operator Instructions) Michael Turits, Raymond James.

I have two sets of questions. The first is around cash flow and then the second around some of the fundamentals in the pricing and contracts for this year.

On the cash flow issue, you talked about being cash flow breakeven but I assume that's free cash flow as opposed to cash from ops. Maybe you can help us get there, because right now the street's looking for $15 million in EBITDA for next year, using that as a proxy for cash flow from ops and then $23 million in CapEx, so that would be negative. And then (inaudible) I want to ask some fundamental questions about the business too.

We're early in the 2016 planning, first of all, so we kind of gave a preview into that. With respect to your specific question, although we didn't give specific guidance on CapEx, we expect it to be lower than 2015. And we're going to modulate it based on what we see in growth, but I would expect it to be even lower than the number you just cited. But not (multiple speakers).

Lower than the $23 million.

Correct.

So just to be clear, you are talking about free cash flow breakeven next year.

We're talking about EBITDA minus CapEx.

Yes, we are talking about free cash flow.

And then can you just discuss two things fundamentally? What would this forward pricing these contracts -- so in other words, you said -- it sounds like you signed some large deals that were just at really -- it sounded like cut rate pricing and not as profitable, but you'll grow into that in terms of scaling it. And then other question was about this comment about bandwidth pricing expenses growing faster than rev. So those were two things that sounded pretty unusual.

Let me take the first part, Michael. In terms of the contracts we signed, they are in the range of 12 to 18 months long. And we modeled them based on us completing -- well, we'll never be complete, but making a big dent into our infrastructure cost reduction plans. And over the life of the contract, we view them as being good for our business, knowing that it will take us a while to get to those collocation reduction expenses.

So in the initial term of those contracts, the profitability may not look great, but in looking at the overall contract and especially the back half of the contract, we felt that it was a good business decision to sign those.

And then the comment, Pete, that you made about this quarter, the impact of gross margins or bandwidth expenses growing faster than rev. I mean why? Typically we hope that it would be the other way around.

Yes, I think on a quarterly basis one can sneak ahead of the other. And I think over the long term we want them to march together. In this quarter, in light of what we just discussed with the contracts and the average selling price, we weren't able to decrease our average cost on the bandwidth side at the same rate. And we expect that to recover over the coming quarters.

So that was a function of those two contracts in particular that did that.

That was the lion's share of the change.

And is that why revenue actually decreased sequentially? You've had revenue going up sequentially.

Yes, so as we said we had another record volume quarter. And also as we said, our average price came down. So in large part it was due to that dynamic.

On those two contracts.

Yes.

Jonathan Charbonneau, Cowen and Company.

Obviously you just noted you had another record quarter for traffic volumes. Can you maybe talk a little bit about the levels of traffic you're currently expecting within 2016 guidance? And how much traffic are you currently expecting to come from OTT next year?

Let me start. We model out our traffic profile by customer. And some customers are, in terms of what they're providing, in terms of their product in the market, it's multiple types of services. So I don't know that we specifically are carving out OTT.

We've talked about this a little bit in that we see OTT as a trend that's positive for us and for our industry. We don't see any dramatic rise. We haven't had it so far this year, nor do we see it over the next coming quarters. But we do think it will contribute over time to the increase in traffic that we deliver. But we don't specifically model out just OTT in our 2016 plans.

And in terms of volume, we are anticipating that volume of traffic is going to grow in excess of revenue growth as we will see continued reduction in ASP, which I think is obviously good for customers, but good for the industry as it helps support new and larger uses of our CDN for different use cases. So I think traffic will continue to exceed the growth of revenue.

(Operator Instructions) Sameet Sinha, B. Riley.

A couple of questions. You mentioned that you signed a couple of large deals and this gives you increased visibility into your revenue. Is there a way to quantify how much of your revenues you have visibility into as you go into the future quarters and how this is compared to the visibility you had previously?

Secondly, in just as a follow-on to that, in terms of how you get the cost to scale because of this increased visibility, can you tell us a little more how that works, what are the specific components of your cost structure that benefit from that increased visibility? And then I have a follow-up question.

I'll just make a quick comment then allow Pete answer the majority of that.

In terms of increased visibility, it really comes in two forms. One is contractual in that the contractual minimums are higher than we've previously had. But also, we are a larger and therefore more important partner to those companies and therefore we're working much more closely with them around their forecasts and we'll know what percentage of that that we're getting.

So some of it is contractually guaranteed and some of it is just knowing in more detail their plans. And then in terms of what percentages, we really don't get into that in terms of projecting that out on these calls. But Pete, why don't you --?

Overall with respect to just what the committed revenue is versus what the overage, in very round numbers it's approximately 50% for us in total. And so we won't comment specifically with respect to these contracts, but I think that ratio will persist in the near-term.

On what you asked about scaling out the costs, really there's the two major components in third party spending. One is bandwidth for the last mile, that we commented on that we slipped behind a little bit in this quarter. And we expect to make up that ground and continue to decrease unit cost, which is just part of the industry.

And on the datacenter piece, we are working hard on that. I think the results in this quarter show the progress there that despite increased traffic levels we actually reduced expenses on a year-on-year basis while we also had duplicate expenses. So it's actually we're pleased with the progress on the datacenter side. And that in particular is pretty early with us right-sizing our footprint and getting cost efficiencies to increase gross margin as we head into 2016.

One follow-on question. So Akamai obviously on their call they mentioned that traffic volumes at some of their customers is declining because of really it's market forces depending on their requirements this particular quarter. Any parts -- is that are we seeing an increase in traffic volumes across the industry? And if yes, then what are the next couple of trends that could lead to the inflection point?

I think we're in a little different position in the market than Akamai, given their size. I mean I think they, I don't want to speak for them, but I think they talk to the fact that several of their larger customers were moving from exclusive contracts with Akamai to non-exclusive and taking some of the business in-house I think is what they specifically said.

And so for us, given where we are, when those customers do that, that's an opportunity for us because they're not taking all of the business in-house. And so if it's no longer an exclusive contract, then we have the opportunity to get a portion of that business. And while it may be true that they're taking some portion in-house, the portion that is now available to us to be earned through performance is higher than it was before.

So in terms of where Limelight sits, we believe that traffic will continue to grow for us. I do agree with what they said about traffic being a little lumpy, and therefore every -- from quarter to quarter not everything is always going to just be up sequentially and year-over-year, but I think in general the trend for Limelight is pretty clear that as we continue to perform for our customers, as evidenced by the increase in our net promoter score, we have the opportunity to be rewarded with the additional traffic, despite the trends that Akamai is seeing, because I think they're just in a whole different position than we are.

Kevin Smithen, Macquarie, Analyst

This is Will, filling in for Kevin. Thanks for the question. I was wondering if you could provide some color on the impact of the headcount reduction in terms of where the majority of these cost savings are coming from, whether it's on R&D side, sales, just general corporate. And what kind of impact that had on the midpoint of 2016 guidance? And then I have a follow-up.

I'll let Pete speak to the guidance part of that question. I'll answer the first part. The cuts were spread across the business. Clearly R&D and sales are two of our bigger areas with respect to headcount. But I'd also remind you that this year we took on some big projects that won't get repeated next year.

So for example, we but a new billing system in place that is going to complete this quarter. And so we will not be doing that again next year. And there's not another project of that size that will replace it. We had a major datacenter move this year that took us until the end of September to complete.

So there are some unique things that we took on this year that won't repeat again in 2016. And so what we don't want to do is leave you with the impression that we are dramatically reducing the roadmap for our products or support of our products. We're trying to be more choice-full about where in the market we can succeed. And so that was some of the changes on the sales side. Which products we're going to aggressively invest in. And then additionally, some major projects this year that won't repeat next year.

In short, if I look at the number of major projects this year, we still have some stuff to do next year, but there will be fewer projects next year of that size than there were this year. And overall, we've just placed generating cash as a much higher priority, not that it hasn't always been a priority, but it's risen up to the top of that list -- to the list in terms of importance -- in terms of 2016 guidance. Pete, I don't know if you have a comment on that.

Yes, I guess on the numbers on where the cost reductions were, so the number that I gave on a non-GAAP basis for operating expenses gives you a sense of what we expect operating expenses to be in 2016. And that was a majority of the overall reductions we made. So there are definitely some savings in the cost of good sold with respect to personnel and other expenses there. But the majority of it was in operating expenses that we gave you some specific guidance on.

And then I was just wondering on the types of contracts that you were discussing. I think there are two of them. Is this something that we should expect to become more commonplace going forward with new or existing customers? And I was just kind of curious what made these customers or these specific scenarios ideal candidates for this forward structure?

I think the answer going forward is there may be some opportunities to do this. There are none on the horizon and these situations were a little bit unique in that they're customers where we've had fairly long history with them, but we've been a very, very small player in the mix. We have the opportunity to step into a larger position in terms of being a strategic supplier to them and we took advantage of that.

So A, there are very few companies out there that have as much traffic to deliver as these companies do. It was a great opportunity for us to solidify ourselves into a much larger and strategic position within these customers. And lastly, as I said before, we believe that over time they can be accretive to us and we were willing to take a short-term hit, if you will, in order to have the opportunity to grow with these customers. And that's part of why we believe that we can increase gross margin in Q4 and throughout 2016.

(Operator Instructions) Michael Turits, Raymond James.

Again, sorry, on the big contracts. But that is a question that comes up in your mind is whether or not to get these contracts, to get the visibility that you'd like, to cut pricing this way, whether that's a result of greater competitive pressure in the environment or not. Otherwise, why would you need to go outside of what we normally think of the kind of normal pricing parameters?

I think from the standpoint of these contracts, I think pro forma for what we want to accomplish in our cost infrastructure, these are good contracts.

I guess to ask it another way, does the competitive environment seem tougher than it was? Because again, just (inaudible) kind of simple about it. You think about tougher pricing when a competitor's competition is higher.

And when I make that statement, I'm obviously talking about a longer time horizon than 2015 for us to accomplish these things. I'll let -- so just to close that off, but I'll let Bob comment on his observations on the competitive environment.

My sense is that the competition has been at these prices for this type of volume. It?s the first opportunity we've had to really take on big volume and they've maybe in some cases have had a longer period of time to adjust their cost infrastructure to this. And so as Pete said, as we continue with our collocation rationalization plans, and start to get the benefit of those costs, bring our bandwidth in line, which happens over time.

These contracts clearly are step function changes and our bandwidth contracts are coming due throughout the year. And so this is a little bit of an unusual situation. I don't think we're for these customers that we're setting dramatically different price points in the marketplace. And we're just stepping up to what it takes to win this type of volume with these types of customers.

And then just on the spending side, the capital spending side, obviously it's clear that you had the unusual product tax period in the mid $20 millions for CapEx for this year. Just kind of really roughly in the prior three years, you were around $18 million in CapEx, more like 11% of revenues instead of 14%. Is that roughly the level that we should think about you getting back to?

I think low teens is a normal level.

(Multiple speakers) millions of dollars in CapEx or low teens as a percentage rate?

No. low teens percentage of revenue, sorry.

Low teens as a percentage of revenue.

And one follow-up comment to that is one of the things we've learned in 2015 is that we can increase capacity through software engineering, which is something Limelight in previous years admittedly have not paid a lot of attention to. And so part of the go-forward guidance and reduction in CapEx spend is the simple fact that we will do less of those projects that required CapEx as sort of one-time projects. But we also plan to get capacity increases through software engineering through our R&D spend and we haven't done a lot of that in the past and we believe, based on the evidence we have in 2015, that that can be very helpful going forward as well.

Kevin Smithen, Macquarie.

This is Will with a follow-up. I was just wondering if you were noticing any trends as it relates to the types of traffic increasing or decreasing overall amongst your top customers. If there is anything specific that was interesting versus the volumes of last year that were primarily just in the CDN space overall driven by video streaming and some one off events in software downloads. Is there anything that's changed this year or that you're seeing moving forward?

If you look across our three main use cases, software delivery and I put the gaming in there, what we're seeing is a trend continue that the updates are more frequent, the games -- files themselves in general are larger and the number of devices that are out there continues to grow. And so that's driving that growth.

Video on demand clearly continues to grow and to your point about anything interesting going on, I mean we're starting to see different formats get favored over others. So for example, we're probably doing more dash today than we've ever done in the past, so there's some changing of the delivery format that's going on, which may be interesting to some.

And in Live, I think there we're starting to see people, companies experiment with that in ways we haven't seen before. So a good example that was well publicized was the Yahoo! Internet only delivery of the NFL game in London last month. We participated in that, not exclusively, to be clear, but we participated in that. And that was obviously a first-time event for Yahoo!, for NFL and largely seen as a success. And so that being true, likely to see more of that in the future than not.

And so we're starting to see based on the quality, general performance and availability of Internet and CDNs in general, more experimentation going on for things like that. And that I would say would maybe be a little different.

And the last thing I would say is that across Live VOD and software delivery we're definitely seeing different price points, given different performance requirements.

I'm showing no further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.