QuinStreet Inc (QNST) 2010 Q3 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the QuinStreet Fiscal Third Quarter 2010 Conference Call. During today's presentation, all parties will be in a listen only mode and following the presentation, the conference will open for questions.

(Operator Instructions)

And, now, I'd like to turn the call over to Erica Abrams. Please go ahead, ma'am.

Thank you, and good afternoon, ladies and gentlemen.

Thank you for joining us today as we report QuinStreet's fiscal third quarter and nine months financial results. This call is being simultaneously Webcast on the IR section of the Company's Website at quinstreet.com.

Joining me on the call today are Doug Valenti, CEO, and Ken Hahn, CFO of QuinStreet.

Before we get started, I would like to remind you that the following discussion contains forward-looking statements that involve risks and uncertainties, and that QuinStreet's actual results may vary materially from those discussed here.

These risks and uncertainties are discussed in our most recent SEC reports -- notably, the Company's prospectus, filed pursuant to rule 424B with the SEC of February 11, 2010.

Forward-looking statements are based on current expectations, and the Company does not intend to, and undertakes no duty to update this information to reflect future events or circumstances.

In addition, we have a large number of investor events planned in the upcoming two months, and welcome the opportunity to give investors a deeper understanding of QuinStreet. Management will present at the Jeffries Internet Conference, the JPMorgan TMT Conference, the Needham Internet Conference, the BMO Advertising and Marketing Services Conference, the RBC Technology, Media and Communications Conference, the CS One-on-One Conference, and the BofA Mid Conference. Management will also conduct non-deal road shows in major cities in the US and Europe.

And, now, I will turn the call over to Doug, the CEO, of QuinStreet. Doug?

Thank you, Erica. Hello, everyone. Thank you for joining us today.

Let me start by saying that we had a very good fiscal third quarter; our first reported quarter, of course, as a public company. We're pleased with our financial performance. Total revenue was $90.8 million. That's up 30% over the same quarter in 2009.

Adjusted EBITDA margin was 20%, consistent with our annual target, and inclusive of significant operating investments and future growth and capabilities. We saw growth and progress across the business, broadening and deepening our footprint and our capabilities, and expanding our capacity for future growth; all important, of course, given that we were still so early in the pursuit of such an enormous opportunity.

We are new to the public market. And I know there are folks on the line that really have not met us yet. So let me quickly remind you of our strategy.

We are one of the largest Internet marketing-and-media companies in the world. We've gotten big by delivering measurable results and attractive ROI to our clients, typically in the form of qualified inquiries, leads or clicks.

We focus vertically on large verticals, where offerings are information-intensive and high-value. We are a clear leader in education and financial services, and we have an earlier, but already substantial and growing presence in home services, medical and B-to-B.

Our primary competitive advantages are our ability to deliver measurable marketing results to our clients attractively, consistently, and at scale, first and foremost; number two, our large, targeted media portfolio, including owned-and-operated sites, as well as partnerships with hundreds of third-party publishers; three, our vertical depth, which allows better insight and more expertise about visitors and clients, and enables us to get higher monetization rates and media yields; and, fourth, our industry-leading technology platform -- a huge focus and big advantage for us.

We spent well over $100 million in engineering costs to date, building our technologies. And we continue to invest heavily in their development and in their deployment across the business.

Now, turning back to Q3 performance -- as I indicated, we saw good growth across the business. Total revenue was up 30% versus last year. Education revenue, excluding the effects of a previously disclosed change in online-marketing strategy of one of our largest education clients, was up 23% year over year. If we include that client, education was down about 1%. Financial services revenue grew 70%. And growth in our other, newer, verticals was 64%.

The operating drivers of growth in included increases in our media footprint and traffic, and increases in yield on media, and revenue from existing clients. We also saw smaller, but still meaningful, benefits from improved pricing and revenue from new clients.

We are excited about the growth in progress across the business and about the big long-term opportunities still ahead in all of our verticals, including, by the way, education. There is still much to be done in the education vertical in terms of building and yielding media, broadening our client base, and gaining more share of our clients' budgets.

Now, I talked about the growth in education, excluding a large client. One of our largest education clients changed their marketing strategy about six months ago, and hired a new advertising agency. Those changes have reduced their marketing spend with us. Our relationship with that client and their agency remains productive, and we expect them to continue to be an important client for us into the future. We think we represent an important channel of new-student inquiries for them for the long term.

There is also continuing discussion about Neg Reg, the Department of Education Regulatory Change Process under way, and regarding the for-profit education industry and its potential effects on the industry and on us. And, there, we don't have much new news to report.

Nothing we have learned to date has changed our risk assessment of Neg Reg, as communicated during the road show. We do not believe that Neg Reg will have a significant negative effect on our education business. We believe the for-profit-education industry will remain vibrant for the long term, and will likely emerge even stronger and more sustainable as a result of anticipated regulatory changes.

We also believe that QuinStreet will remain an important source of research and program information on the Internet for prospective students and, therefore, an important channel of high-quality prospective-student inquiries to existing and new clients in education for the long term.

To summarize, we are pleased with the results in the quarter, and about the progress we made building our capabilities and capacity for future growth. We look forward to our new life as a public company. It gives us the resources to even better serve our online visitors and our clients, and it helps us fund continued, ambitious pursuit of our extraordinarily large long-term business opportunity.

We appreciate the support of our new shareholders, and we will work hard to continue to earn that support.

Now, Ken will review the financials with you in more detail.

Overall, it was an excellent quarter, with $90.8 million total revenue, with 30% top-line growth. Let me tell you about our performance in each of our client verticals.

Our education client vertical was, in total, essentially flat, at $38.1 million. We saw reduced volume with a client undergoing a previously disclosed change in their online-marketing strategy. Excluding that client, as Doug mentioned, our education-client vertical grew 23% this quarter, as compared to the fiscal Q3 2009. So, obviously, we saw good growth within a majority of our education clients. We believe that the education-client vertical continues to represent an attractive growth market for us for a long time to come.

Our financial-services client vertical grew 70%, to $41.7 million, reflecting nice execution in a vertical where consumers are seeking information, and clients are moving more marketing spend online. This quarter, we grew each of the markets which we are pursuing in financial services. These include insurance, mortgage, credit cards, and deposit accounts.

Our other client verticals grew 64% to $10.9 million. As you know, these verticals include B-to-B, home services and medical health. Each of these client verticals grew on a year-over-year basis. This quarter, no individual client represented greater than 10% of our total quarterly revenue, reflecting our evolution as a clear leader in multiple client verticals.

Adjusted EBITDA for the third quarter was $18.3 million, and adjusted-EBITDA margin was 20%, consistent with our annual fiscal target and inclusive of continued significant investment in future growth. I want to remind you that one of our key financial strategies is to target 20% adjusted EBITDA for the fiscal year, and maximize sustainable top-line growth within that bound.

We believe that this is the right strategy for us as a leader in an early, large, and high-growth market. Our costs of sales represent all of the costs used to produce our measured marketing results, including people and media. I'll remind you again that our key financial targets include EBITDA margin and revenue growth. We trade off costs between cost of sales and operating costs in our efforts to achieve that 20% EBITDA margin target, while investing in growth opportunities.

Our cost of sales was $66.3 million in the third fiscal quarter, versus $46.8 million in the year-ago quarter. Within cost of sales, media costs increased $12.8 million. Personnel costs, including stock-based compensation increased $4.2 million. And amortization of intangibles increased $900,000.

Moving on to operating costs, product-development costs were $5.3 million in the third fiscal quarter, versus $3.5 million in the year-ago quarter. Essentially, all of the increase relates to additional personnel costs. We continue to highlight technology as a strategic focus, and we continue to invest in technology that we believe expands our competitive advantage. As you might know, more than a third of our employees are engaged in technical and engineering roles.

Sales-and-marketing costs were $4.6 million from third fiscal quarter, versus $3.6 million in the year-ago quarter. The majority of the increase relates to additional personnel costs. General and administrative costs were $4.5 million in the third fiscal quarter, versus $2.9 million in the year-ago quarter, reflecting those increased costs typically associated with being a public company.

It is important to note that we've incorporated the additional public-company spending interoperating model; and our long-term annual EBITDA target of 20% remains the same, as it has for eight years now -- another indication of the scale we are achieving in the model.

Interest income and expense were, of course, affected by our financing activities during the quarter. I'll provide you some additional detail so that you know how we are planning to manage these items.

Net proceeds from the IPO totaled $138.1 million, after commissions and deal costs. We have these proceeds invested in very conservative and highly liquid funds. And the interest-rate yield on those types of investments in minimal, as you probably know.

On the debt side, we have no immediate plans for paying down our revolving credit line. During the quarter, we incurred additional expense of $200,000, associated with the expansion of our bank-credit facilities to $175 million of capacity. So that amount won't recur next quarter. Our average interest rate on our bank debt was approximately 3%, and is based on LIBOR.

Our effective tax rate was 40% for the quarter, down from 48% for the corresponding prior-year period. The higher-than-usual effective tax rate in the third quarter of fiscal 2009 was driven by a decline in our deferred tax assets due to state tax law changes during that quarter and the release of FIN 48 reserves.

We may well remain at our more recent 44% annual rate for the next year or so, but are looking at a few planning options that could thereafter reduce that rate a couple of points -- all assuming no major tax-code changes, of course.

We note that the EPS computations can be very confusing in the first couple of quarters as a public company, due to IPO shares issued and outstanding for only a portion of the quarter, and the necessity to attribute a portion of that income to the preferred shareholders for the period prior to conversion in the IPO, among other exciting technical details.

For the quarter, our diluted weighted average shares totaled 33,938,000. To help in your models going forward, this figure should be roughly 49 million diluted shares next quarter, and will vary somewhat with stock price.

Our GAAP diluted EPS for the quarter was $0.11, and our adjusted EPS for the quarter was $0.21. We provide adjusted EPS figures for comparability to analysts' consensus figures that many of you track, and we add back two items only -- stock-based compensation and amortization of intangibles, inclusive of tax effect.

On the balance sheet, our cash balance at quarter end was $175 million, reflective, of course, of the IPO, but also due to strong cash provided by operations of close to $14 million. That strong cash performance was partially due to nice DSOs at quarter end of 47 days. We'll expect these in the future to be more typically in the [50s].

Fiscal Q3 free-cash flow was 14% of our quarterly revenue, slightly above our historic trends, due to good working-capital results. Over the last five years, we've seen free-cash flow range from 11% to 13% of revenue, with 12% as a historic average.

To be clear, we don't use free-cash flow as a quarterly or annual operating goal, but think that discussing the average revenue percentage over time is important to investors in understanding our financial model. Aside from taxes, the vast majority of our EBITDA drops down to free-cash flow. The business does not require large amounts of capital expenditures.

I encourage you to review historical operating cash flow, free-cash flow, and normalized free-cash flow in the supplemental data sheets we provide on the Investor Relations section of our Website, a link to which is included in the earnings release. We want you to understand the free-cash-flow generating capacity of the model.

With that, I'll turn the call to the Operator, who will moderate Q&A.

Thank you, sir.

Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions). And our first question comes from the line of Imran Khan with JPMorgan. Please go ahead.

Hi. Thank you. It's Imran from JPMorgan. A couple of questions -- first, finance business grew 70% on a year-over-year basis. Could you give us some sense what's driving that growth, and how should we think about the growth of that vertical a couple of quarters down the road and, maybe, next year?

And, secondly, could you also give us some sense about the operating-cost structure for these different business segments of education versus financial services? How should we think about that? Thank you.

Sure, Imran. Thank you.

We still see a lot of momentum in the financial-services vertical. We're still early. There's enormous capacity. It's a very, very big market. We don't give, as you know, specific guidance about growth in the future, other than long-term. And we certainly don't give it on a vertical-by-vertical basis. But I can tell you that we continue to see good momentum there.

In terms of operating costs, let me just make a general comment about that, because we've -- obviously, our cost of services went down in the quarter versus last quarter and a year ago. And I want to make sure that I remind folks -- and I know, Imran, you already understand this -- but, generally, we don't manage a two-way -- a gross margin, per say. We're pretty comfortable with gross margin anywhere, basically, in the 30s. And it will fluctuate. And fluctuations plus or minus in the 30s are pretty much noise in the system.

Recall, we are really managing to EBITDA and growth. And so what you can -- what caused the cost-of-services number to be higher as a percentage of revenue in this quarter were really kind of four things. And you're going to see these things move around as we go forward. And, sometimes, you'll see us up; sometimes you'll see us down.

But, in general, the mix of business was different. And we did have a higher mix of business, which had an as-attractive contribution margin as the other businesses, but got there with a lower media margin and higher -- but also lower "other" operating costs.

Many of our more technology-driven clicks businesses have that model. They're very attractive businesses. They're very highly technology-levered. We love those businesses. And they're every bit as attractive to an EBITDA margin as our other businesses that might have a higher media margin, but much higher "other" operating costs.

We also had a higher amount of revenue in the quarter from newer verticals. And, as you know, we aggressively invest in developing media -- and, sometimes, to the extent on taking losses on that media -- as we develop a new vertical, to make sure that we can build future capabilities and learn what we can do for clients, and to serve clients while we increase our yield and increase our match rates. So there is that.

The third component was depreciation and amortization from the past couple of years, and the acquisitions we've made. Those numbers you're seeing get allocated to the cost-of-services items on -- in a higher basis, because they're just higher numbers. And the last is increase of the allocation of stock-based compensation to cost-of-services components.

Recall, we have a lot of personnel in cost of services, unlike other companies. We apply the cost of everybody that has to do with generating that dollar of revenue into the cost-of-services line. So we tend to look like we have a higher cost-of-services number than other folks, but structurally, we have the same cost structure. We just happen to be a little bit more conservative in the way we talk about accounting, and the allocation more technically of accounting. And, obviously, the business has a lot of capacity in it.

So that's the story on operating-expense structures, and what I can tell you about financial services.

Got it. Thank you very much.

Sure. Thank you, Imran.

Thank you. And our next question comes from the line of John Blackledge with Credit Suisse. Please go ahead.

Thanks -- just a couple of questions. On the financial-services side -- it was up about 28% sequentially. So I was just wondering if you could just give us a little more color in terms of where -- what were the drivers? Was insurance strong again? How was mortgage, credit cards? And, then, I have a follow-up on the education side.

Sure. We -- as Ken said, we saw growth in all of the financial-services verticals that we're pursuing, John -- and we saw good growth in all of those financial-services verticals.

The -- it was a little bit softer in credit cards and deposit accounts, although we're seeing good -- it looks like new life there. Those have both been somewhat depressed by the lack of securitization in credit cards, and by the easy money Fed window and deposit accounts. But we're -- we are seeing, because of -- I think, because we better penetrated clients, and maybe for some macroeconomic reasons which, of course, we're not able to really ascertain -- some good life there.

And so, as Ken said, we saw good growth in all of that -- particularly in our -- and we have clicks businesses across all of those businesses. We saw good growth in the clicks businesses and all of those businesses. But we also saw good growth in leads.

So it was pretty widespread. And it was really driven by just fundamentally having more clients and some better media presence and better yield in that media. And, hopefully, a little bit -- the wind that's been in our face is shifting, at least as far as -- we're seeing small signs of that in the more challenged verticals -- but growth in all of those.

Yes, that's great. Yes, the growth was fantastic. And, then, just on the education side -- if you can, give us an idea when the declines in [VRY] spending may dissipate. Is that an early kind of fiscal '11 type of timing? And, then, to that point, revenue growth of clients extra VRY has increased about 20% -- or over 20% -- year over year, year to date.

Could we expect that type of growth to continue into the fourth quarter, and then into fiscal '11? Thanks.

Sure. In terms of any specific clients, we don't -- let me just say this to make sure you understand how we think about it.

In general, our policy is not to name clients unless we're forced to by regulations -- like, if they're over 10%. Now that we don't have over 10%, we don't -- we won't -- you'll find that we won't name clients, with very rare exception. We don't think that's fair to the clients. And they certainly didn't ask us to do that; although, the client we're talking about has been unbelievably fair to us about this, and tolerant.

But in terms of the spending with the large client that we did previously disclose, we lap that -- the big significant drop in that client spending -- we lapped that around November by -- for comparable purposes. As far as downside from here -- really, still, somewhat uncertain. They're still working through a new strategy. We've seen stabilization at our -- at the current point, for a number of months.

We have a productive relationship. We're hopeful that this will sustain. We're fearful that there could be downside from here. But, certainly, we don't believe that that would be nearly as dramatic as we've seen to this point.

That's how we think about it. I think that's kind of as much as I know, and as much as we can tell you.

In terms of the -- we have a lot of momentum with the rest of our education business, with a lot of demand from clients, and a lot of opportunity to execute better to meet that demand. So I'm pretty -- as you know, and as I've said -- you've heard me say before -- we believe that education is a good double-digit grower for us for many, many years to come. And I still believe that, and we're still seeing that.

And some of what we're seeing, somewhat ironically, from Neg Reg, are clients wanting to do more business with us, and being willing to pay higher prices for inquiries to certain programs that are likely to be less affected by Neg Reg. And that was as, again, discussed on the road show.

It's not surprising that, with the Department of Education having concerns about folks selling too hard or putting students into programs that they don't fit -- that clients are looking to do business with folks like QuinStreet, who allow students to match better based on content and fit, and don't incentivize and don't do any of the other things. So that, when they arrive at the enrollment counselor's desk, they don't require so much selling to close; hopefully, they've already sold themselves.

So we're seeing that dynamic. I think we'll continue to see that dynamic. I think it's very rational. I think it's reasonable.

Let me also comment on the economy, because this is a point that's -- I know, again -- John, I know you get this, and the other analysts get this -- but folks not familiar with our business would have no reason to understand.

But as the economy improves, it's likely that demand for high-quality leads is going to go up, which sounds counterintuitive. But, remember, when the economy is soft, our clients get a lot of free inquiries from the "unemployment lines." As the economy tightens, that call center needs to get filled with leads; and if you're not getting -- or inquiries. And if you're not getting as many free, then you need to pay for more. And that's just a -- kind of a fundamental structural description of how things work.

So we're hopeful that the economy will improve, because it's in everybody's interest. And we're particularly hopeful, here at QuinStreet, because, as the economy improves, historically, that means that high-quality leads are in greater demand at higher prices.

That's great -- very helpful. Thank you.

Sure. Thank you, John.

Thank you. And our next question comes from the line of Justin Post with Bank of America Merrill Lynch. Please go ahead.

Thank you. Can you give us -- a few question. Can you give us some detail on underlying quantity of leads in the education vertical; and, then, maybe why -- I know it's hard to do on a one-quarter basis -- but why you can't replace the spending with the one client with the other clients on a one-for-one basis, and how long that transition might take? Thank you.

Sure. We kind of are replacing it, because, again, we were somewhat flat, and we grew 23%. And so they've been replaced by other clients. What it kind of does is it eats up growth, because it's hard to make it all up immediately. But we've made it up pretty quickly.

But it does -- there are a couple of things going on, though. It does take some reconfiguring, of course, of the placement of the clients and the placements of the clients with -- on our Websites -- so, within our technologies and our networks. And that is a process that's relatively fast, but certainly is not immediate. So it takes time to take placements from a client that may reduce their spend, and put the right other clients in that placement. And that has been going on. And it does take time, but it -- we're doing that as rapidly as we can. But it certainly isn't done completely.

The other factor, of course, is that when we do that, we need to make sure that we're replacing it with clients and demand from clients that are an equally good fit for the student. Otherwise, we diminish the quality of the outcomes for the clients. And that's not in our long-term interest.

So sometimes it's a matter of, "We have a lot of demand, but we don't have the demands, precisely, for that program, in that [geo]." And we have to go and spend the time to go and either sign clients if we don't already have them, or work with those clients to get budget they may have allocated elsewhere. And, sometimes, that budget shift for them, to us, takes time because they have it committed elsewhere.

So it's pretty mechanical. And I wish it was more immediate. But it's just kind of a fundamental change in the system -- change with the client, sign up with the client. But, as you've seen, we've pretty much replaced it. What it's done, though, is it's eaten up our overall education growth. If you -- if we did not have the job with this client, our overall company growth would be 38% or 39%, by the way, year over year. The effect, this time, dropped it all the way to 30%. But it's still 30%. And, again, 23% with clients, except that one in education.

And, then, on lead volumes -- you also asked, Justin -- as you probably remember, we don't disclose those specifically. However, the one thing we will talk about in MDA is pricing, which has been fairly constant for a couple of years now.

Okay. A couple other questions -- are you seeing your traffic costs go up? And your cost of sales -- I know you own a lot of your own properties, but maybe some of the traffic sourcing is going higher -- and, then, one more follow-up.

We are not seeing our traffic costs go up. It's -- there's nothing structural going on there. They're pretty stable. They've been pretty stable for a while now. So, no, we're not seeing that. And what was -- there was a second part of that? Was that --?

No, that was it. And, then, what was the contribution from acquisitions in the quarter?

Sure. We didn't -- we only spent -- of the $6.9 million that show up on kind of the acquisition line in the financial statements, $4.5 million was for -- was a deferred payment for a previous acquisition. So we really only spent about $2.5 million in the quarter on new acquisitions. Again, we don't -- we don't measure, on an ongoing basis, all of the contribution from acquisitions and -- because, as you know, we don't really buy revenue. We tend to buy assets and then generate revenue off of them. It's quite an exercise for us. So we don't want to get to the point where we have to go through that exercise every time.

But I can tell you that the organic growth represented about the same amount of our total growth as it did in the first half of the year. And the largest contribution from acquisitions came from Internet.com, which -- and that, by the way -- by far and away the largest contribution from an acquisition in the quarter was Internet.com. And they were about $3.6 million in the quarter.

And, for clarity, that's been the only relatively large deal we've done in the last year. So we've been spanning back.

Well, great. Thank you. I appreciate it.

Sure.

Yes.

(Operator Instructions). And our next question comes from the line of Mark May with Needham & Company. Please go ahead.

Hi. Thanks for taking my questions. The first one is -- I guess outside of what I would consider a reset by that one education customer, the growth in the other education clients certainly does not reflect a market that is "mature."

So the question is, "What is the rank order of the drivers of the growth for this -- for the core part of your education vertical?" Is it -- would you rank order them the addition of new customers, QuinStreet gaining greater share of the customer budget, or just overall marketing budget growth in the industry as a whole? And, then, I had one follow-up, if I could.

Sure, Mark. Thanks. Gosh, if I had to force rank them, I'd say the number-one drive will be continued development of our media footprint -- in growing high-quality media that we can yield into high-quality inquiries for our clients. So that'd be number one. So, in other words, if I've got more high-quality inquiries, I've got places to sell them. And, you're right. There's -- we are nowhere near maturity in the education industry for this marketplace. And I don't see it in front of us anywhere, either.

The next in the order would be -- as we develop the media, there's a lag between developing those high-quality sources and wielding them and, then, as I said before, getting access to the budget, either because it's allocated elsewhere or they haven't shifted it from other programs yet, or they haven't created it yet, because they haven't been able to find a place to spend the marketing dollars effectively.

So the second would be getting more budget, most typically, from existing clients. But we are seeing very dramatic growth right now from pools of new clients that we haven't served in the past. As you know, we've been pretty dependent on a few large education clients for most of our life. And we are much more aggressively, now, expanding that footprint and expanding that client base.

So I would put that kind of -- new-client budgets -- as a pretty close number three to number two. So those would be my -- that'd be my rank order.

Great, thanks. That's good color. And, then, the second question is -- I believe that Ken said that all of your verticals grew year over year in the quarter. That would include, I assume, home services. That would mark, if I'm not mistaken, a turnaround in that business. So do you see that as some light at the end of the tunnel here, in the home-services vertical, which has, obviously, been impacted by the macro environment?

Yes. And, thank you for asking. We have been through a -- because -- and it was very highly impacted by the economy. We've had one of our most senior and best operating executives focused on restructuring that business for about the last year. And he has -- as typical with him, he's done a phenomenal job. And that -- and we are seeing very solid performance out of that business.

Not only, by the way, we are seeing renewed growth and new-client interest and better results, but the margins have about tripled from where they were probably this time last year, in terms of the contribution margins from that business, and are now competitive, by the way, with our more mature verticals in terms of his -- in terms -- at the kind of contribution level that we look at.

So that business is doing better. I would say it's not going to be a fast-grower again, in the near term, as far as we can tell, just because it remains constrained economically. But it's growing again. And it's growing very profitably again. And it's well structured to the current environment, and positioned that we can -- as we see more -- or get more wind at our backs, we'll be able to ramp that business, I think, pretty effectively, so -- and very good progress, by the way, with some very large clients, which is particularly exciting because, again, we are very, very early in the penetration of those clients and of those budgets. Did we lose Mark?

Looks like he's still connected. Mr. May, your line is still open. All right, well, ladies and gentlemen, there are no further questions in the queue. So this does conclude the QuinStreet Fiscal Third Quarter 2010 Conference Call. (Operator Instructions). Thank you for your participation and you may now disconnect.