Microstrategy Inc (MSTR) 2016 Q4 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the MicroStrategy's fourth-quarter 2016 earnings call.

(Operator Instructions)

Now I would like to welcome and turn the call to Mr. Michael Saylor, Chairman, President and CEO.

Hello. This is Michael Saylor. I'm the Chairman, President and CEO of MicroStrategy. I would like to welcome all of you to today's conference call regarding our 2016 fourth-quarter financial results.

I'm here with our CFO, Phong Le. First, I would like to pass the floor over to Phong who is going to read the Safe Harbor statement and make some comments on our results for the fourth quarter.

Thank you, Michael, and good evening, everyone. Various remarks that we may make about our future expectations, plans and prospects may constitute forward-looking statements for purposes of the Safe Harbor Provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in our most recent quarterly report on Form 10-Q, filed with the SEC.

These statements reflect our views only as of today and should not be relied upon as representing our views as of any subsequent date. We anticipate that subsequent events and developments may cause the Company's views to change. While the Company may elect to update these forward-looking statements at some point in the future, the Company specificity disclaims any obligation to do so.

Also, during the course of today's call, we will refer to certain non-GAAP financial measures. There is a reconciliation schedule showing GAAP versus non-GAAP results currently available on our press release issued after the close of market today, which is located on our website at www.microstrategy.com. Turning to our financial results.

Overall, our Q4 financial results were in line with our expectations. We are also pleased with our overall full-year 2016 financial performance. We believe we've made the right investments in sales and marketing, research and development, internal systems and recruiting, retaining and developing our people to start 2017 strong.

At the same time, we continue to build a strong balance sheet. We are optimistic that these actions will help us grow as a Company in 2017. Let's start with more detail on revenues.

Total revenue for Q4 2016 was $140 million, the $3.4 million or 2% decrease year-over-year and an 8% increase quarter-over-quarter. We experienced foreign currency headwinds in Q4 2016, which negatively impacted our revenues by $2.6 million or 2%. Revenue excluding services was $118 million in Q4 2016, a less than 1% decrease year-over-year, with foreign currency changes negatively impacting such revenue by $2.2 million or 2%.

Product license revenue was $38 million in Q4 2016, an 8% decrease year-over-year, with foreign currency exchanges negatively impacting such revenue by $0.8 million or 2%. Our North American business represented 56% of our total product license revenue compared to 51% for the same period in 2015. We saw a $1 million increase in quarter-over-quarter gross deferred product license revenue.

This represents the net effect of new deferred product license contracts partially offset by the recognition of previously deferred product license contracts. Our Q4 product license deferral rate was higher than the same period a year ago, while runoffs were lower than the same period a year ago. We did see a shrink in our large deals, with revenue from deals greater than $1 million of product license revenue growing by 49% year-over-year.

Our subscription services revenue, primarily driven by our cloud customers, was $8 million in Q4 2016, a 3% increase over Q4 2015. Our support revenue was $73 million in Q4 2016, a 3% percent increase year-over-year with foreign currency exchanges negatively impacting such revenue by $1.2 million or 2%. We continue to be pleased with the results of our support business, driven by improving product license bookings and maintenance renewal rates.

Our services revenue was $22 million in Q4 2016 compared to $24 million in Q4 2015. This represents an 11% decrease year-over-year, but at 7% increase quarter-over-quarter, our most substantial sequential increase in over two years. For the full-year 2016, our total revenue was $512 million, a 3% decrease year-over-year.

Revenue excluding services was $429 million, a slight increased year-over-year. This compares to 9% decrease in total revenue from 2014 to 2015 and a 3% decrease in revenue excluding services for 2014 to 2015. Turning to cost, we continue to methodically manage our cost structure while strategically investing in our business.

We've taken significant steps to invest in our recruiting, retention, and employee development efforts. We ended Q4 2016 with 2,133 people an increase of 10% year-over-year and 1% quarter-over-quarter. In Q4, we saw the lowest voluntary turnover rate since our restructuring in 2014.

Different operating expenses were $80 million, an 8% increase year-over-year, and 4% increase quarter-over-quarter. Sales and marketing expenses increased 15% year-over-year with a 14% increase in headcount. Research and development expenses increased 7% year-over-year, with an 11% increase in headcount, and general and administrative expenses decreased 7% year-over-year with a 4% increase in headcount.

Note that our general/administrative expenses were favorably impacted by a reversal in Q4 2016 of a $3.4 million accrual that was taken in Q1 2016. For the full-year 2016, we increased sales and marketing expenses 7% year-over-year, we decreased research and development expenses excluding capitalized software development costs by 2% and decreased general/administrative expenses by 2%.

We our overall pleased with our strategic investments and filling out our sales channels worldwide, increasing our business development and marketing capabilities, and recruiting top-notch engineers into our technology team. At the same time, we continue to closely manage our overhead expenses while increasing productivity.

Net income from operations was $37 million in Q4 2016 and an operating margin of 26%. This represents a 20% decrease in operating income from the same period a year ago. Our net income was $31 million in Q4 2016, a decrease of 20% from the same period a year ago and a 17% increase quarter-over-quarter.

Diluted earnings per share was $2.69 in Q4 2016 compared to $3.38 the same period a year ago. We had cash, cash equivalents and short-term investments of $589 million at the end of Q4 2016 and continue to have no debt. Net cash provided by operating activities for the 12 months ended at December 31, 2016 was $111 million, compared to $150 million during the same period a year ago.

Turning to 2017, we are optimistic about our prospects for growing overall revenue. We're starting to see benefits from the investments we've made to improve our product and build out our processes. Our marketing efforts, including Jump Start and Desktop campaigns have solid results, with over 6,000 class days delivered and 65,000 unique downloads to date, respectively.

We've also made significant efforts to recruit, develop and retain our people. As a result of the speed and scale of improvements we made in our business, we expect continued quarterly unevenness in our financial metrics. But we're optimistic that our changes will put us on a path to organic profitable growth in 2017.

Now I'd like to turn it back to Michael Saylor.

Thanks, Phong. I would like to share a few thoughts on my views of 2016 and the year in review and then I will speak about our prospects in 2017.

With regard to 2016, I believe we made a number of strides forward in the business. We strengthened our product offering through a series of feature releases each quarter and we also delivered a platform release mid-year, which provided a stable platform for our customers to migrate from 9 to 10 on and that resulted in superior scalability, stability, and deployability on our platform and I believe it's been well received.

We extended our product offerings in 2016. On the Desktop, we improved our Desktop product dramatically in functionality as the year progressed, and as Phong pointed out, we got to the point where we had 60,000-plus downloads of the product and we see this as a great tool for us to make entrees in the Desktop analytics space and bring more people into the MicroStrategy ecosystem.

We also improved our mobile offering in 2016, incorporating support for version 10 dashboards into our mobile product, improving functionality for off-line, online access and parity between Android and iOS devices and I have anecdotally heard from many of our customers that they are pleased with the improvements we made in the product and it's made it much more deployable. I think we've position ourselves well for a continued growth in mobile going forward.

We improved our cloud offering in 2016, moving from what was really a package of techniques that we sold as a service at the beginning of the year, to the point where we actually have a set of deployment tools, administrative tools, and management tools that we can distribute to our customers so that they can deploy our platform on the AWS cloud themselves without our assistance. We believe we made good strides in moving from cloud as a service to cloud as a product in 2016.

We dramatically improved our Usher offering in 2016, incorporating additional functionality for fast data, badge access to devices, improved communications functionality and mobile application functionality as well. And so, in each of those four areas, our product offering and our value proposition was materially extended. In 2016, we also upgraded our team.

We added new executives in the sales function, the marketing function, the IT function, the technology function, services, support, education, and finance and we strengthened our middle management layer in a meaningful fashion. We also added to overall headcount to the tune of about 10%, as Phong has pointed out, and we improved morale amongst all the employees in the Company and we decreased attrition at the same time. And we are pleased with these developments.

In 2016, we improved our relationships with our customers. We implemented new account management programs and new customer success programs that resulted in many, many constructive actions in order to improve our customer relationships that did and will result in higher renewal rates and greater customer satisfaction and greater customer deployment of our software.

We implemented a new customer validation support program, sending our professionals on-site in order to validate our platform and that was a big success with our customers and I got much positive feedback with regard to that. We upgraded our support management programs and we have solid new leadership in our customer support function and the result was a dramatic decrease in outstanding cases and also the time to close cases. In our own customer success process, we implement health checks and we collected many thousands of these health checks and we monitor them and we've observed customer satisfaction ratings moving up as the year progressed in a meaningful fashion, and we are happy about that.

In 2016, we upgraded our internal information systems. Migrating to a cloud implementation of Office 365, implementing SharePoint as the common portal to the Company, migrating large numbers of our employees onto the sales force architecture and implementing service cloud for case management tightly integrated into our sales and account management activities in the force.com architecture.

And we began to adopt MicroStrategy 10 dashboard technology, which we only just released with version 10 and we started building v10 dashboards for many of our business processes and deploying them broadly throughout the Company, embracing our own technology in order to drive MicroStrategy efficiencies forward. In 2016, we implemented a number of new global corporate programs that resulted in improved coordination around the Company and more transparency and agility. In sales, we implemented business development sales planning, account planning, global alliances, services, integration, and sales and engagement programs changes, and in many cases, installing new leadership, upgrading the methodologies, improving the tempo and the effectiveness of those programs.

In marketing, we rolled out an upgraded set of field marketing, digital marketing, product marketing and telemarketing programs. In technology, we upgraded our product development, product management, quality assurance, and advanced technology programs. In service, we refined our support management, engagement management, customer success service delivery and customer education programs.

And in incorporate, we polished our business planning programs, our employee performance programs, employee development, recruiting, and the like programs in order to improve effectiveness across the board. Finally, we rolled out three new successful marketing programs in 2016. One of them, the symposium series, was scaled up from about 15 symposiums to 70 symposiums in 2016 and that's proven to be a big success in attracting customers and prospects and integrating -- delivering our message into the field, and integrating our field message back into corporate.

We also rolled out our Desktop, our free standalone Desktop program and, as Phong pointed out, we've had a tremendous number of downloads of that and it's opened doors for us. We implemented a free education program called Jump Start, which has been very popular and it's well received by our customer base. And so I think we have a lot to be happy about in 2016.

As I look at the beginning-of-the-year status of the Company, as we entered 2017, we are coming off of two strong years of financial performance and if we were to measure and evaluate operating results based upon operating income or operating cash flows, I believe these are the two best years in the history of the firm and so they were very, very strong years in terms of operating income and cash flow and they materially improved our balance sheet and gave us a good degree of momentum going into 2017.

I think we have done a decent job managing costs and the capital structure. We've maintained our share counts at controlled levels and, even though we have been building our headcount, we've controlled cost in a number of areas, like G&A expenses, in order to create an opportunity for us to grow as we look forward to 2017.

I'm pleased with the cash generation of the Company and I'm pleased with the balance sheet and I think that this is viewed as an asset by most of the customers that I speak with and our partners and having a strong balance sheet I think is a very helpful for us. It sends the message that we are committed long-term in the industry and that our customers can make long-term commitments to our platform.

We enter the year 2017 the most focus that I can remember the Company being in 20 years. We are single-minded in our focus on the MicroStrategy platform as the unified platform for analytics and mobility. So starting the year off with a strong balance sheet, strong operating performance, a single platform and these metrics of customer satisfaction moving in the right direction, and employee satisfaction, I think it gives us an auspicious beginning to the year.

As we look at 2017 and our plans and outlook, our plan for 2017 is, first of all, to focus upon our compelling technology solutions. We believe that we have a very compelling enterprise analytics solution and we had some very strong high-quality deals with companies in 2016 and even in the fourth quarter where it was pretty clear that they were very competitive and we were chosen because we had the best enterprise analytics offering and I believe that there's still lots of growth available in the enterprise analytics solution space.

We are also going to be driving the enterprise cloud message because we have got some good references there. We've have some good competitive wins and we are very pleased with the way that our tool set is evolving and we can put this tool set in the hands of our partners and our customers to drive enterprise cloud.

In my meetings with customers, I have anecdotally asked them about their agenda for 2017 and one of the more popular things I hear is they are interested in deploying mobile applications and so we are going to focus upon enterprise mobile in 2017 as our third niche tech solution area and we've made great strides there.

And we have got a very credible offering, in fact, we believe the best-in-class and then finally, our last tech solution is enterprise big data and we see lots of our existing customers and prospects looking to do something with big data and they want to do that without sacrificing enterprise scalability and security and maintainability. So our solutions focus is right there: enterprise, analytics, cloud, mobility and big data.

We are going to build and amplify our marketing campaigns in 2017 in order to drive this message further and louder. Our symposium series will expand from 70 events to 100 events and we will focus and polish those symposiums to get even more productivity out of them. We will continue with our free Desktop campaign and we think if we run it for the entire four quarters, we should see an increase in downloads and, again, more prospects and leads coming into our system.

We will run the entire Jump Start program for four quarters and based upon the success of the last quarter, we believe that that'll continue to be very popular and a door-opener for us. We're going to increase the volume on our digital marketing so that the MicroStrategy brand in the messages is louder and seen more places. And we've built up our teleprospecting team in 2016. They're larger, they're better integrated and we expect to drive more results and better results in 2017 using that team.

The third prong of our plan in 2017, or after solutions and marketing, is to improve our sales execution and we will deliver some new products to market in 2017, new client products, new server products, new gateway and driver products. These are new software items that our sales team will be able to sell to customers and we believe that those new products will provide us with opportunities. We are going to sharpen and deliver new expert services in 2017 and we believe these will be our new items for us to sell in our marketplace.

We're going to hone our sales techniques, upgrading our tools, our methods and our training to be more precise and more agile. And we're going to integrate some programs that drive closer coordination between our field sales organization, our professional services organization, our technical support organization, and our marketing organization and we believe that those things will drive better sales execution.

And fourth, we are going to continue to upgrade our underlying systems and our operational procedures in 2017. We are rolling out a new project management system, FinancialForce will be upgrading the MicroStrategy community platform in order to encourage more participation and a better output. We will continue with our campaign to distribute MicroStrategy version 10 dashboards throughout our enterprise and tie them into every single process.

We are going to move forward with our own internal cloud migration and we're moving all MicroStrategy operations off of our data centers and we're moving them to the AWS cloud at a more rapid rate than ever before. And we think that these things are going to give us more options and more agility. So with that, I would like to go ahead and open the floor for questions.

(Operator Instructions)

Abhey Lamba, Mizuho Securities.

Thank you. Thanks for all the color on your initiatives in 2017, Mike. Can you drill upon the impact of this free download version that you started? When should we start seeing some revenues starting to flow from the pipeline you're generating there?

I think that our expectations with regard to free download is that it's going to generate more leads and open more prospects for us. We're going to use that in order to build our pipeline and funnel. As you know, sales cycles in this industry run anywhere from six to nines month. So as we build our pipeline, I think we will see revenues flow from those leads in a normal, expected enterprise time frame.

Got it.

Phong, you mentioned we should expect growth in 2017. Should it be more uniform through the year, or could there be a chance of some chopping along the way? Is there a comment for total revenue, or can we see license revenues also grow in 2017?

I think, Abhey, you saw in 2016 quite a bit of choppiness as we started to rev up the growth engine. I think it's likely to be expected that we will still continue to see choppiness in 2017, especially as the nature of the work that we do and the deals that we sell are so big. Obviously, as our pipeline fills up and we get more large volume deals and small volume deals to pad the choppiness, it will get better over time. The comment as far as growth in general was in regards to overall revenue growth.

Got it. My last question is your hiring this quarter was much more moderate versus the prior three quarters. Is it just a function of this being the fourth quarter, or are you taking a more prudent approach on expenses as you head into 2017? That's it for me, and congratulations on a good quarter.

As it relates to hiring in Q4, we do have some seasonality with our hiring, as a lot of our hiring happens at the campus level in the US and internationally. So we tend to see spikes in Q1 and Q3 as a result of that. There is nothing as it relates to the slowdown in Q4 that I would say I would relate a general slowdown overall.

Thank you.

Jobin Mathew, Deutsche Bank.

Congrats on the quarter. Thanks for taking my question. This is Jobin on behalf of Karl Keirstead.

Just from the license revenues, obviously, I thought this was a good quarter where deferred revenues were up 9%. Support revenues showed a slight acceleration. Headcount was great, but license sales was down 8% despite this being a seasonally strong fourth quarter.

Do you guys have any comments there? Did you guys benefit from any additional pick-up than normal in the third quarter? Is that a reason why fourth-quarter licenses maybe came a little behind where we were expecting, or was this really in-line with your expectation?

Could there by something that we're not seeing in the numbers which would suggest there could more licenses from the Washington upgrade cycle to come in next year?

Hello, Jobin. As far as just the overall revenue trend, the outcome in Q4 was about what we expected, not significantly higher and not significantly lower. So we thought of it as a reasonably good product license revenue quarter. We had a pretty tough comp versus Q4 of last year. As you know, we had a extremely strong Q4 of last year, buoyed by a variety of deals across the board.

We also had a very good improvement in overall revenue in Q4 as a result of a pick-up on the deferred revenue side. We saw the opposite effect this year in Q4. I wouldn't attribute that to anything other than the nature of some of the deals we saw. So if you were to back out into more of a bookings number, it actually looked a lot more flat than the product license revenue did.

As far as the Version 10 buying cycle, I wouldn't relate anything that occurred in Q4 to that. We are still seeing great traction in Version 10 and MicroStrategy 10 overall.

Got it. In terms of your comments for next year, I know you said you guys are planning for revenue growth. But what are your margin expectations? Can you hold operating margins steady in 2017 at the levels of 2016?

I think the goal, as we have been managing the business today, is to try to grow our costs with our revenue growth. I think what you saw in 2016 was revenue was flat to down a little bit. 2016 was an investment year, where we were putting more costs into business to really get us on a trajectory for growth in 2017.

As we go into 2017, the overall objective is to grow cost in line with revenues and try to keep our margins generally flat or within the range that we've talked about, which is that 20% to 30% range, which we think overall is strong for an enterprise software company.

Got it. In terms of your services revenues now beginning to come back, is that a function of more implementations happening? Is that a function of you guys hiring for more training people? What's driving that? Is that hiring in expectation of more demand, or is that demand-led pickup in services revenues?

I think, Jobin, as you look at the overall big picture of services revenues, all the way from 2014 to now, we have been focusing on higher margin, higher bill rate services. As a result, we've started to swap out some of our lower bill rate, lower margin work, some of our subcontractor work. That was really a two-year evolution.

Along the way also, we were much more focused on the product license business and growing that and developing that. The consulting business was an area that we knew the growth would follow with the growth in the product license area. So we did see from Q3 to Q4 starting to see that flatten out, the decline in the business overall. We do hope to see that flattening out be, if you will, the bottom of the curve.

Okay. Thank you. Thanks again.

Tyler Radke, Citi.

Good evening. I was hoping that you could touch on the overall execution in Q4.

Phong, you mentioned that large deals were up, I think, over 70% year over year. But obviously, licensed revenue was down. So could you just walk us through the puts and takes on overall execution?

Yes, I think overall execution was good, Tyler. We did have some great deals, over $1 million, that we were very pleased with, with some very large institutions across many different industries. I wouldn't say anything execution wise is noteworthy. There were not any significant flip deals that were any different than any other particular quarter.

We did have slightly higher deferral rates as a result of the nature of some of our deals that took place. But I wouldn't consider that an execution miss or an execution issue. It's just sort of the lumpy nature of some of the deals that we end up doing in Q4. So I think the execution of sales in general continues to improve for the organization. We like where we ended up in Q4 from a product bookings perspective.

Got it. And then on the cloud business, you guys talked a lot about that this quarter. It just sounds like there's a lot of excitement, particularly around the AWS product. But if I look at your subscription revenue which, I believe, is the correct line item to be looking at to measure the traction, that actually decelerated from Q3 and only increased sequentially a little bit. So just wondering how we should be thinking about performance of that business and if that's the right line to look at.

Overall, with the cloud business, and I think Mike has mentioned this, we started to retool the business, focused on AWS in 2015. We started to roll out a lot better cloud tools to spin up environments and to allow our customers to start to self-serve on cloud, which we're pretty excited about. We think it's pretty strategic in the business overall.

As far as the deceleration that you are seeing overall in our subscription business, I wouldn't note that as anything specific about the cloud business. If you look at it on a full-year basis year over year, we saw a 10% increase in subscription services revenue, which we're pretty happy with as far as traction for our cloud business. 10%, I would say, is pretty strong. We would love to see that on the product license side too, and I think we have a platform that we can really grow into into 2017.

Then last question on Usher. Can you comment on how the Q4 performance was there? Any major wins?

Then, Mike, I didn't hear you mention Usher as a key focus area for 2017. Maybe I just missed it. But can you talk about what your expectations are for the product into next year and if any of your investment plans there have changed? Thank you.

Well, I think Usher remains a developmental business for us, and so it's a earlier stage. But in fact, it's been folded into our enterprise mobility offering. So when I say we're going to focus on enterprise mobility in 2017, I include Usher as one of the drivers because Usher includes a couple of really nice mobile capabilities that our customers are enthusiastic about.

I think that our enterprise mobile business in 2017 will be benefited from Usher. At some point, we will probably want to break out some of the results. But right now, I think we are satisfied with the supporting role that it's playing, driving our mobile initiatives.

Greg McDowell, JMP Securities.

Great. Thank you so much. Hello, guys.

Phong, one question for you, and then I have one follow-up question. You mentioned a $3.6 million reversal of an accrual, and I think that was on the other income line. Could you just give us a little more detail on what that reversal was?

Yes. If you look back at our Q1 financial statements, we go into some detail about the accrual. You could find the details there, Greg.

Okay. Then I noticed that maintenance grew at close to 3%. I think that was the fastest growth rate in a couple of years. I was just wondering if there was something different about what you are doing with your maintenance agreements, whether renewal rates are going up or you're upping pricing a little bit. I was just wondering if you could talk about maintenance and sort of how sustainable this year-over-year growth rate is as we get into 2017. Thanks.

If you look at our overall maintenance business, and then Mike mentioned a lot of process improvements we put in place. So we have a customer success or customer support process that we have now in place that's really our sales team, our support team and our finance teams working together in conjunction to focus on the maintenance business.

It's, I would say, a complete revamp of how we handle the business. So we're pretty happy with the way that has improved the business overall. It's a combination of things. It's better tech support; it's consistent health checks that we do on a quarterly basis with our customers; it's collaboration and communication between our support folks and our customer success folks and our sales teams; it's holding to increases in rates on a year-over-year basis that we've often allowed ourselves to negotiate out, and so it's really across the board.

And then obviously the product has gotten better too. That's made our customers more satisfied. As Mike mentioned, our customer satisfaction scores have increased significantly when you look at fourth quarter of last year to fourth quarter this year. We've gotten back to renewal rates that we believe are industry-leading and what MicroStrategy is used to, and I think that should continue in 2017.

Great. That's helpful. Thank you.

Frank Sparacino, First Analysis.

Phong, I just wanted to go back to the reversal comment. That $3.4 million should be added back onto the G&A line. So exiting the year, G&A is more $17.5 million sort of expense rate?

That correct. Yes.

Then, Mike, just to go back to your comments around your conversations with clients. MicroStrategy has been pushing on the mobile front for a long time and been very successful there. I guess what I'm trying to figure out is what's new incremental there that is a business that you can monetize?

How do you generate new revenue from some of these new mobile initiatives that you're talking about? Is there anything else in those conversations with clients that stands out to you around spending as it relates to MicroStrategy or just BI in general?

Yes, good questions. First of all, our enterprise mobility, offering is a number of things. Partly it's the MicroStrategy mobile analytics clients, and partly it's the MicroStrategy Badge and the MicroStrategy Usher mobile app. So there are different clients, and we license them independently. So as customers increase the number of mobile clients they deploy, then there is a revenue opportunity for us.

We expect that our broader deployment of mobile may actually drive some additional server modules in 2017 and beyond that will be rolling out. So I think that that's another opportunity for us. Of course as customers deploy mobile applications, they normally deploy more apps to more users. So it either drives capacity licensing or named user licensing, as they get more prolific.

In a lunch I had with about 18 customers just last week, I went around the table and I asked them what their most exciting initiatives for project rollouts were in 2017. Fully three-quarters of them all said they're rolling out mobile applications on our platform, and they're very excited about it. So I think that we have been offering mobile for a while. In 2017, I sense that the mobile wave is stronger than it has been in previous years. I also believe that we have a better offering and a broader offering, so I think these are all auspicious signs.

Thank you, guys.

Ladies and gentlemen, this concludes our Q&A session. I would like to turn the call back to Michael Saylor for any final remarks.

I would like to thank everybody for your support, and we look forward to seeing you again in three months. All the best for the new year. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program and you may all disconnect. Have a wonderful day.