SPS Commerce Inc (SPSC) 2014 Q3 法說會逐字稿

Good day, ladies and gentlemen and welcome to the SPS Commerce third-quarter 2014 earnings conference call. (Operator Instructions). As a reminder, I would like to remind you that this call may be recorded. I would now like to introduce your host for today's conference, Nicole Gunderson with Investor Relations. Please go ahead.

Good afternoon, everyone and thank you for joining us on SPS Commerce's third-quarter 2014 conference call. Joining me on the call today is CEO and President, Archie Black and CFO, Kim Nelson. Before turning the call over to the Company, I'll read our Safe Harbor statement. We will make certain statements today, including with respect to our expected financial results, go-to-market strategy and efforts designed to increase our traction and penetration with retailers and other customers. These statements are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially.

Please note that these forward-looking statements reflect our opinions only as of the date of this call and we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Please refer to our SEC filings, as well as our financial results press release for a more detailed description of the risk factors that may affect our results. These documents are available at our website, SPSCommerce.com and at the SEC's website, SEC.gov. In addition, we are providing a historical data sheet for easy reference on our Investor Relations section of our website, SPSCommerce.com.

During our call today, we will discuss adjusted EBITDA financial measures and non-GAAP earnings per share. In our press release and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP and adjusted EBITDA measures, including reconciliations of these measures with comparable GAAP measures. And with that, I will turn the call over to Archie.

Thanks, Nicole and welcome, everyone. We delivered another great quarter. Revenue grew 20% to $32.5 million. Recurring revenue grew 22% and adjusted EBITDA was $4.7 million. Our market opportunity continues to grow as retailers and suppliers increase adoption of omnichannel strategies to better align with consumer demand. SPS' singular focus on the retail ecosystem enables us to clearly differentiate ourselves competitively in terms of our solutions, our engagement models and the business results we delivered for our trading partners. We're pleased with the quarter and feel good about our outlook for the rest of the year.

We are executing successfully across a number of different fronts. Our sales teams continue to add new customers and deepen retailer relationships through the viral nature of our network. We continue to broaden our channel's program enabling us to move upmarket and connect larger suppliers to their trading partners. We're seeing more suppliers and partners integrate to RSX, which enables a quick, one-time integration to our network. For example, zedSuite built a single integration between SAP Business One and our universal network to provide retailers and suppliers the industry's first SPS and SAP certified integration solution. And Oracle partner, Bristlecone, built applications integrating into SPS' universal network as well.

Our analytics suite also continues to fuel growth. We believe the opportunity within analytics is large and growing. More retailers are meeting the demands of their suppliers ensuring point-of-sale data in an effort to stay ahead of the competitive curve and meet consumer demands. The larger suppliers like Nike and Under Armour are driving this evolution using the data to drive greater efficiency and increase sales. We're now seeing the same dynamic with other suppliers as they follow suit and embrace analytics for the same competitive reasons.

For example, Neiman Marcus did not traditionally share point-of-sale data with their suppliers. Burberry, one of their larger suppliers, recognized the benefit of analytics and worked with Neiman Marcus to share their data. Once Neiman Marcus started sharing their data with Burberry, other suppliers who also see analytics as a competitive advantage, like Donna Karan, were then able to purchase analytics to use with Neiman Marcus.

Our larger customers are also driving another dynamic within our network -- international expansion. Recall that our international strategy has been to grow organically using our proven viral model to build out our global network. The pace in which this is happening is accelerating with large global suppliers such as Jardin, adidas, Colombia, Dannon and Under Armour. We'll continue to build our international presence as opportunities emerge. We currently have offices in Beijing, Hong Kong, Melbourne and Sydney and just last month, we announced the expansion of our London office to help serve our current customers in that region.

Outside of organically growing our international customer base, we're also taking advantage of M&A opportunities to help accelerate our leadership position. Last week, we announced the acquisition of Leadtec, which expands our presence in Australia. Leadtec brings key retailer relationships in Australia to the network and approximately 500 customers. We plan to expand our network in Australia as much as we have in North America by running enablement campaigns with these key retailers to feed the lead generation engine. We'll also be able to offer a suite of analytic solutions across Australia's supplier base to help drive greater collaboration with those retailers.

We've spent years laying a foundation to capture the opportunity we see. Because of the viral nature of our network, the more we expand, the more value we provide to the retail ecosystem overall, which in turn drives the great momentum across our business. We have a huge opportunity in front of us. Our focus in retail has established SPS as industry experts among retailers and suppliers and we're excited about our market leadership position that continues to expand across the globe. We'll continue to innovate around the platform, expand our network and take advantage of the omnichannel trends that are providing tailwinds to our growth. And now I'll turn it over to Kim.

Thanks, Archie. As Archie mentioned, we had a great third quarter. Revenue for the quarter was $32.5 million, a 20% increase over Q3 of last year and represented our 55th consecutive quarter of revenue growth. Recurring revenue grew 22% year-over-year. The total number of recurring revenue customers increased 9% year-over-year to approximately 21,200. Wallet share increased 12% to approximately 5,600. Total operating expenses for the quarter were $21.2 million and represented 65% of revenue. Adjusted EBITDA was $4.7 million compared to $3.6 million in Q3 of last year. We ended the quarter with total cash of $141 million.

Now turning to guidance, which includes the impact of the Leadtec acquisition discussed on our October 13 call. For the fourth quarter of 2014, we expect total revenue to be in the range of $34.3 million to $34.8 million. We expect adjusted EBITDA to be in the range of $4 million to $4.3 million. We expect fully diluted earnings per share to be in the range of breakeven to $0.01 with fully diluted weighted average shares outstanding of approximately 16.9 million shares. We expect non-GAAP diluted earnings per share to be in the range of $0.13 to $0.14 with stock-based compensation expense of approximately $1.4 million and amortization expense of approximately $800,000.

Please remember the Q4 guidance includes the impact of the Leadtec acquisition, including a one-time $400,000 other expense in Q4 due to taxes owed on the Leadtec acquisition. For the full year, we expect revenue to be in the range of $126.8 million to $127.3 million. We expect adjusted EBITDA to be in the range of $17.1 million to $17.4 million. We expect fully diluted earnings per share to be in the range of $0.11 to $0.12. We expect fully diluted weighted average shares outstanding of approximately 16.9 million shares. We expect non-GAAP diluted earnings per share to be in the range of $0.60 to $0.61 with stock-based compensation expense of approximately $5.5 million. We expect amortization expense for the year to be approximately $2.9 million. You should continue to model a 40% effective tax rate calculated on a GAAP pretax net earnings.

Before I turn the call over to Q&A, for modeling purposes for 2015, investors should model approximately 14% adjusted EBITDA margin taking into account the Leadtec acquisition being accretive starting in Q4 of 2015. As we look out toward next year, our philosophy remains the same and we expect to invest any additional upside back into the business. With that, I'd like to open the call to questions.

(Operator Instructions). Michael Huang, Needham & Company.

Thanks very much. Hey, guys, just quick questions for you. First of all, with respect to what you're seeing on the enablement campaign front, wondering if you can share with us what percentage of campaigns that you are running right now are multiproduct in nature and could you share at the highest level what you're seeing directionally in terms of conversion rates on those campaigns that you're running?

Yes, I would say probably half of our enablement campaigns are multiproduct and the conversion rates I would say on the integration front are very consistent with what they've been in the past. The larger suppliers still tend to test and certify. The smaller suppliers are easier sell cycles, quicker sell cycles and end up being recurring revenue.

On the analytics side, it's very different because the key strategic suppliers, the top let's say 50 to 75 suppliers for that retailer tend to become recurring revenue customers at a clip of -- at a much higher clip and then of the smaller suppliers, those suppliers that the retailers are not as engaged with, tend to be at significantly lower conversion, but the money is actually in the larger suppliers. So I think that's been relatively consistent. I would probably tell you that the enablement conversion rates on the analytics has probably slightly ticked up.

Great. That's good to hear. And then just remind us again, in terms of seasonality for when you're running an enablement campaign, does that change at all when you're doing multiproduct? Is seasonality any less pronounced with respect to when you're running these campaigns as you're doing multiproducts?

The seasonality really isn't impacted by the multiproduct. What I'd say -- what we've seen over the years is Q4, although we run enablement campaigns in Q4, historically, we run less in Q4 due to the holiday season. So that trend you'd expect to continue to see. Outside of that, when I look at sort of Q1, Q2, Q3 mix of enablement campaigns and timing of that, that really is not impacted due to the multiproduct nature of them.

Great, okay. Then last question for me, Archie, as you're thinking about the TAM and the number of suppliers that you have as targets as you expand globally, could you just remind us how you're thinking about the number of targets out there given the fact that you're much more than just North America now?

Yes, in North America, I think we have pretty good databases and we have pretty good accounts because we have over 50,000 customers when you count the testing and certification customers where we know a lot about that business and we know at least one of their retailers and we believe that number, really suppliers that we can go after, to be approximately 100,000.

I think globally we don't have quite as good a handle on the number, but I believe it's at least another 100,000. So at least 200,000 suppliers. And again, as a reminder, we have traditionally gone after the smaller suppliers. So although we have 20,000 customers, very few have multiproduct and they tend to be on the smaller end of the 200,000. So we have an incredible amount of room in front of us.

Great. Thanks so much.

Scott Berg, Northland Capital.

Hi, Archie and Kim. Congrats on a good quarter. Archie, really quick on the international push, saw the investments that you're making in London, obviously the acquisition of Leadtec. How should we start thinking about your investments on that international scale? It looks like you're getting a little bit more aggressive with some of those. Do we see a little bit more of a push than a pull specifically in Europe or is it still going to be more of a pull in nature maybe over the next 12 to 24 months?

I think, Scott, we're really using the viral nature of our network and it is true. As we're getting larger suppliers, they do work with more global retailers. They're working with their retailers in Europe and they're expecting that we are able to work with their retailers across the globe. So we really are using that network and the acceleration in the larger suppliers is accelerating the need to go overseas and then the opportunity to go overseas. So it's both an opportunity and a threat is the way I look at it and I think we can do it very, very efficiently.

Okay. I guess as you look specifically in Europe at the number of retailers in that geography that you really should potentially have, say the top, I don't know, 50% or 60%, whatever the right number is, how penetrated are you with connections to those today would you say?

Well, on the integration side, we're in the early phases and on the analytics side, they're actually behind where we are in North America, which is in the very, very early stages. A very small percentage of those retailers are actually sharing point-of-sales data. So just like North America, the opportunity is there and that is being driven by the larger suppliers helping SPS Commerce go after and work with those larger retailers and the retailers in Europe.

Great. And then I guess the last question for me then is, Kim, as we look at the acquisition moving forward here in Q4, I believe Leadtec's gross margins are a little bit lower than your own. How should we think about modeling those gross margins, whether it's in Q4 or in 2015?

Sure. What I would say is you are correct that their gross margins are lower than our gross margins. So for probably about the next year, you would expect that the combined gross margins will come down slightly because of that, but nothing has changed relative to our long-term expectations on gross margins. Just for the next basically I'd say year, similar to what you saw with Edifice, the first sort of year once we acquired Edifice, that had sort of a short-term negative impact to gross margins. You'd assume a short-term negative impact as well, but then longer-term nothing has changed relative to our long-term expectations of mid-70%s for gross margin.

Great. That's all I have. I'll jump in the queue. Thank you.

Matt Pfau, William Blair.

Hi, guys. Thanks for taking my questions. The first one on the announcement that you had this quarter with your partner that made the integration with the RSX solution and Oracle product, how does that help you sign larger customers and are there other partners out there that are currently working on solutions similar to this to help you guys further move up market?

Well, there's two aspects of that particular partnership. One is their willingness and ability to bring their customer base to the SPS Commerce network. So that's just a pure lead generation. The second piece is they are working with their partners to make it easier and the barriers lower to be able to integrate to SPS Commerce, which allows them to have our large network at their disposal. So I think it's both. It's both the ease of implementation and it's also a revenue generator from a lead generation.

Got it. And then the follow-up on the previous questions about the international investments that you're making, so are we to understand that the office that you recently opened in London is more to serve your existing customers that are pushing you into the UK and Europe rather than a further push to maybe build out a bigger direct salesforce in those markets and target customers more directly there?

Yes, it is to service the current customers. Again, those customers are looking to have us assist them to work with their European retailers, for example, to get point-of-sale data from their key retailers. So there's not going to be a cold calling per se from the sales people; they are supporting our larger global suppliers.

Got it. And in those markets, does it make any sense to make an acquisition like you made with Leadtec in Australia to immediately expand your presence out there and your network connections that you have?

I would say that just talking about our M&A strategy in general is we believe we can get to our end goals through organic efforts and we think we have the wherewithal. We'll continue to look for acquisitions. If there are leaders such as Leadtec that are willing to sell at reasonable prices, then we're always interested in acquisitions. But we don't feel that we're in a position to not be able to succeed if we don't have an acquisition.

The other thing I would point out is the more success you have in a geography, the easier it is to make an acquisition. So one of the things that helped us significantly in the acquisition of Leadtec is we were in the Australian market. We were competing, we did know the marketplace and we were able to assess the Leadtec asset before we even engaged in conversations. So I think that's also very valuable.

Got it. Thanks for taking my questions, guys.

Jeff Houston, Barrington Research.

Hi, thanks for taking my questions. To start with, I wonder if you could talk a bit about how you expect Leadtec to affect the number of recurring revenue customers and wallet share, these two metrics, next quarter. I imagine the number of customers will go up at least 500 plus organic growth and wallet share, I imagine that Leadtec had a lower ASP, but I'm just trying to get a sense of how much it will reduce overall growth of wallet share.

Sure. So as it relates to those metrics, when we report our results, we will give them on a consolidated basis. We'll also tell you what those numbers were organically, similar to what we've done with prior acquisitions. But just to give you a sense of what to anticipate, you should expect there's approximately 500 customers that we've acquired through the Leadtec acquisition and their ASP was actually higher than ours due to the size of their customer and mix of customers. So on a consolidated basis, it will impact the number a little bit positive. So less than $100 -- it will impact it roughly less than $100 consolidated but in a positive manner, not a negative manner.

Great, great. Then separately, thinking about the potential to cross-sell the intelligence products to Leadtec clients, is that something you're going to look at to do now or are you going to wait until after the integration is complete and then following on that, does the product need to be augmented any to reach clients in foreign markets, retailers and suppliers?

I'll deal with the product. We believe that we have a product that's ready to go to market today and we have brought it to market globally. So we believe we're prepared. Obviously, there's always enhancements we continue to make to products, but we believe we have a product that's ready to go to market. We will begin immediately having conversations about analytics, both with current suppliers, but also with their key retailers about the value of sharing that data and how we can make that easier and how we can run enablement campaigns for them. So the retailer relationships I view as very, very critical and a huge part of the asset that we purchased. Obviously, the 500 customers is also a nice start to taking marketshare, but the retailer relationships were probably the most key for us.

And then the potential to cross-sell, are you going to wait till after the integration is done or will you start doing that right away?

No, we have the ability -- the sales reps have the ability to those customers to start selling our product as of October 14.

Got it, great. Okay, thank you.

Tom Roderick, Stifel.

Hey, guys, good afternoon. So Archie, let me ask you a high-level question here. You've got a lot of retailers and a lot of your partners talking about the whole omnichannel theme. I'm curious, after we're kind of well into a year of hearing people talk about this, how is it impacting your sales cycles and close rates on the ground and what you're seeing from a new bookings perspective out there?

Well, it's hard to just put a straight number on it, but the conversations, the fact that retailers and suppliers are changing is just a huge -- it's a huge advantage because the reality is we have a better product, it's a cloud-based multitenant product to bring to the marketplace. However, the reality is, if somebody does business with six or seven retailers a day and their environment is static, there's no change, although we can promise a 50% to 75% lower total cost of ownership, better stability and everything else, they're not going to change. But as retailers are changing their rulebooks, they're adding new rulebooks, they're adding suppliers, that just -- it just becomes another straw in the camel's back to be able to really go after that sales cycle. It's hard to quantify, but it's definitely very impactful.

Got it. That's helpful. Kim, how are you thinking about the sales headcount additions? Can you give us a number where you ended this quarter and how we ought to think about your desire to continue investing in that line over the next several quarters?

We exited the quarter with 219 salespeople, so it was up about nine sequentially. Our philosophy remains the same. Our desire is to continue to add as many salespeople as we can while still hitting our adjusted EBITDA margin expectations. So no change in philosophy, sequentially added nine this quarter.

Okay, and Kim, one question for clarification just on the non-GAAP guidance. You talked about $400,000 in an other expense, one-time other expense from the Leadtec acquisition. Is that included in your non-GAAP guidance or is that just an element of the GAAP guidance?

That's a great question. The $400,000 expense negatively impacts EPS, as well as non-GAAP EPS. Our definition of non-GAAP EPS is simply net income and then we only add back amortization and stock-based comp. So that $400,000 expense in essence sort of negatively hurts that non-GAAP EPS number.

Perfect. That's helpful. Thank you very much.

Richard Davis, Canaccord.

Thanks. I'll try to ask as good a question as Tom because he's far more handsome than I am. Archie, when you think of cloud, EDI, the two questions that I get sometimes from people is like where do the edges of your functionality end and others begin? So for example, does it make sense for you to get into payments or -- you have plenty of room in your existing space; I understand that. But just kind of think about -- if you can just kind of help us think about how this business evolves over the next year or two or three. Thanks.

Yes, so the way we look at the business is on a couple fold. One, when we look at what we should aspire to want to do and what we should aspire not to want to do. Anything that enables multiple parties to transact business and there are multiple parties involved in the retail ecosystem using a SaaS solution, overall, long term, we think that's a viable solution set for SPS Commerce. Anything that is going to be a one-party solution set, warehouse management systems, etc. that SAP and NetSuite and others will probably at some point have in their stack SPS Commerce should avoid. So anything that's multiparty we should be involved in over time.

And then the follow-up would be are there accounts that you're in alongside say a managed service provider who might be providing a van or something like that, are you in those accounts, whether it's GSX or whomever and are you side-by-side with them and have you been able to gain share in those customers? I presume the answer is yes, but maybe how have you done so and those kinds of things? Thanks.

So I would look at it very differently from the supplier and the retailer side. From the supplier standpoint, yes, but typically if they're bringing us in, it's a phaseout of a managed service or in-house EDI and it's a transition to SPS Commerce usually as part of the sales cycle that is a determined timeframe. From the retailer's standpoint, many of our large accounts do their own -- have their own staff that does their own EDI. They have a van, they have a translator and they do it in-house. But what we do is we're able to do the entire enablement for them.

So somebody like a Loblaws, who we've talked about and I would guess about half of our retailers that we get all the leads from, we exist side-by-side. The key is that we are able to efficiently run enablement campaigns and then we're actually interested in the largest suppliers and the smallest suppliers and that's one of the things that allows us to run effective enablement campaigns.

The other thing is being a leader in this space, you touch more of their suppliers than anybody else that usually gives you a leg up. But many of the large retailers we will be sitting side-by-side with a managed service. The reality is our retail sales teams, if that customer like a Loblaws does want to move that business to SPS Commerce, we're obviously interested in it, but that's the last 10% of revenue. The 90% of the opportunity is within enablement. So the sales reps aren't spending an inordinate amount of time trying to convince them that they need to move that part of the business to SPS Commerce. If they have a need and they have a desire, obviously, we'd like to take the last 10% of revenue, but the 90% is where the money is made for us.

Got it. Okay, cool. Thank you so much.

Pat Walravens, JMP Securities.

Hey, it's Pete Lowry in for Pat. Maybe can you talk about your recent acquisition and maybe how that international expansion is different from some of your other international expansions say in Europe?

Well, obviously, we've been attacking the Australian market in a very similar manner to how we have been approaching the European market. We have used our viral network to build into those countries and to really land and expand very similar to what we've done in North America. Obviously, the smaller suppliers tend not to be global. Larger suppliers tend to be more global. So as we've moved upstream, we're seeing more appetite from our suppliers to go global. So I think our approach in Australia was very similar to our approach in Europe and again, just to reiterate, one of the things we were able to see being in the marketplace and competing is we saw a very strong leader in Leadtec and consequently, we approached them and they -- we were able to work out a deal that they found worthwhile, but wasn't -- we're not willing to overpay in those circumstances.

Okay, great. Thank you.

(Operator Instructions). Jeff Van Rhee, Craig-Hallum.

Thanks, guys. Archie, just I guess a couple questions for you. In terms of the move up market, how has it changed in the last -- if you look back 12 months ago, 24 months ago, how has the point at which you intersect some of the legacy solutions changed in the respect of the size of the supplier that you might be fighting over? Just talk a little bit about how that friction point has morphed over time.

Well, I'd say it's been an evolution and so it hasn't been a big change in one quarter over another, but it's been an evolution and obviously, we think we have a superior business model at all size levels. So on the integration side, it's been an evolution. What's interesting, as we've sold more analytics, the analytics sweet spot is actually on the mid-size and larger suppliers because those are the first to adapt to wanting to get the data.

So I would say it's both on integration moving upstream, but then also selling more and more analytics that is focused on the larger suppliers, especially in the enablement campaigns. So in a typical enablement campaign, from an integration, the recurring revenue customers will tend to be the smaller suppliers, but on the analytics side, the recurring revenue customers will typically be the larger suppliers because those are the key strategic relationships for the retailers.

How have those -- obviously, with your growth and your success and the viral nature of the model, and all the sort of attractive characteristics of your model, how have the legacy players adapted? How are they selling against you? Would you see them coming back? What's the pitch and how has that evolved if you would?

I think the pitch tends to be fairly much the same and they're resting on their laurels, but the real key is most of the legacy guys have built out a managed service. That's what they call it; they call it managed service. The term managed service to me means I'm taking software, I'm putting it in some data center and I'm going to run it for you. That's not a multitenant software as a service solution set that gives you all of the advantages of reliability, of ease to implement, total cost of ownership. It's just changing the burden from one party to another and changing the financial model. But, again, against those solution sets, we have a competitive advantage. And then on the analytics side, we leave them completely behind.

And then the third part, on the legacy providers, the laser focus we have on retail ecosystem and that we've spent all of our time building solution sets for the retailers, the suppliers, the sourcing companies, the 3PLs for them is a huge competitive advantage that I don't even know how to -- I can't overstate how important that is that we live and breathe their world from all aspects of the retail ecosystem.

Got it. Okay and then I guess just lastly just touch on -- you had talked over time fairly steadily and even more emphatically about the accelerating intensity around dropshipping as a pain point that was really driving change events and people were trying to figure out how to adapt. Is that still front and center as the primary pain point or has it been sort of surpassed by something else that really drives action?

I think for retailers they realize they need to be truly omnichannel retailers at some point if they're going to compete with the likes of Amazon and some of them are farther along the curve than others. Very few are where I would consider to be in a position where they're done, but most of them are in the very, very early stages of really becoming truly omnichannel, truly becoming endless aisle, truly working with their suppliers in a manner of deciding day by day what should be dropshipped, what should be held within the distribution center and what should be sold in the stores. That's an evolution that some of the retailers are farther ahead than others and some are just starting on this -- just starting on their journey.

Got it. Thank you.

Pat Walravens, JMP.

Oh, great, thank you. Pete for Pat. Hey, you guys had a lot of questions on this call. I think it's a record. Kim, did you address -- did I miss it -- did you address 2015 and how we should think about the top-line growth?

As it relates to top-line growth, no. We will give our guidance for the full year on our next conference call. I did, however, talk about 2015 as it relates to what expectations should be for the EBITDA margins.

Yes, I caught that. What key points should we think about then in terms of 2015? What should we be thinking about?

Well, I think you would be --

For the top line.

I think you would expect a continuation. You know how our business has performed over the quarters and the years and you would expect to look at that and say -- you would expect the Company to have a nice continuation of continuing to add revenue while we go after a multibillion dollar opportunity.

And then, Archie, you guys had your conference in New York in October. How did that go and what did it do for lead gen?

Well, I think out of awareness those that attended really found that we're helping them think about how they're going to change their business, how they're going to approach omnichannel and obviously, it just gives us time to get in front of prospects and customers and a lot of lead generation comes out of our current customers. As their businesses are evolving, the opportunities within our installed base from both a retailer and a supplier base are significant.

So it was -- it's not going to make the quarter, but it was another good event; it was a one-day event that was well attended and I think it just -- what we're seeing is more and more retailers and suppliers are looking for people that have some expertise. And the one thing SPS Commerce brings to these folks is that we are working with hundreds and even thousands of retailers. We're working with tens of thousands of suppliers. We know what works. We know what the other people are achieving and where people are falling down. So we can just give them some real true market perspective about what's really happening, where they stand and how they're going to move the ball forward to accomplish their goals.

Terrific. Thank you very much.

Thank you. This concludes our Q&A session for today. 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.