TechTarget Inc (TTGT) 2008 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the TechTarget First Quarter 2008 Conference Call and Webcast.

My name is [JD], and I will be your coordinator for today.

At this time, all participants are in a listen-only mode.

We will be facilitating a question-and-answer session towards the end of today's conference.

(OPERATOR INSTRUCTIONS)

As a reminder, this conference call is being recorded for replay purposes.

Before the call begins, I would like to remind everyone that during the course of this conference call, TechTarget will make forward-looking statements that may be considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, particularly, its guidance as to future financial results.

Investors are cautioned that such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

These risks include market acceptance of its products and services, relationships with customers, strategic partners and its employees, difficulties in integrating acquired businesses, and changes in economic or regulatory conditions, or other trends affecting Internet advertising and Information Technology industries.

For a description of other risks, the Company encourages you to read the section entitled Risk Factors and its annual report filed on Form 10-K, as well as other filings that are made to the Securities and Exchange Commission.

In addition, its forward-looking statements speak only as of the date of this call and the Company undertakes no obligation to update these forward-looking statements.

TechTarget's policy regarding financial guidance is as follows.

As part of its quarterly earnings call for the quarters Q1 through Q3, it will provide guidance within current in which the call is occurring.

As part of Q4 and the year-end earnings conference call, the Company will provide guidance for both Q1, as well as the full year.

The Company does not intend to update full-year guidance on a quarterly basis or quarterly guidance until the next [scheduled] earnings conference call.

The following members of management will be participating in today's call.

Greg Strakosch, CEO, Chairman, and Co-Founder; Don Hawk, President and Co-Founder; and Eric Sockol, Chief Financial Officer and Treasurer.

I will now turn the call over to Greg Strakosch.

Please proceed.

Thank you.

I am pleased for the fourth quarter in a row since going public that we announced results today that were within our guidance range.

Overall, it was a very strong quarter, as evidenced by our overall revenue growth of 30%, online revenue growth of 38%, and adjusted EBITDA growth of 24%.

In regard to general selling conditions, I get a lot of questions from investors about the macro environment.

IT market growth the last few years has been moderate, in the single digits, so there wasn't a lot of excess that needed to be washed out of the market, as was the case in 2001 and 2002.

Overall, I would say the IT market is steady.

Although there are pockets of low growth, there are also areas of explosive growth that seem to be fairly well insulated from the economy.

Two examples of this are compliance and ROI projects, like server virtualization and data center consolidation.

For example, our online storage business, which is benefiting from the increase in regulations regarding storing, archiving, and retrieving emails and documents, was up more than 100% in the quarter compared to Q1 last year.

Our online data center business, which covers topics like server virtualization, VMware implementations, and data center consolidation grew by almost 100% compared to the same quarter, last year.

Our business model is especially good at capitalizing on specific growth sectors in the IT market.

What we feel is really driving the growth in our business is the unmistakable shift from offline marketing vehicles, such as print advertising, direct mail, and telemarketing, to targeted, online, measurable advertising that delivers strong ROI.

As you would imagine, we are seeing strong growth with our online lead generation products.

But we're also seeing strong growth with our online branding products.

There is still a wide gap between consumption of online media by IT professionals compared to online advertising spending by IT vendors.

Large IT advertisers understand this and are changing their media mix accordingly.

For example, in Q1, the 12 largest IT vendors, as measured by revenue, increased their spending with TechTarget by 45% compared to the same period a year ago.

This is a step in the right direction but it's still very early in the migration.

This is one of the reasons we are so excited about our long-term prospects, as we consider ourselves the main beneficiary of this migration trend in our market.

Moving on to the integration of KnowledgeStorm, we continue to make good progress.

To refresh your memory, the strategy behind the acquisition is that it accelerates the scalability of our business by consolidating our leading competitor in the IT lead gen space, significantly increases our traffic, offers meaningful SCO and SCM benefit, and gives us access to new advertisers.

We may be able to get all these benefits while being able to take out approximately half the expense space of KnowledgeStorm, due to significant synergies in selling and marketing and general and administration.

During the first quarter of 2008, we were able to complete our expense reduction plan, and we are still on schedule to have the rest of the integration done by the end of Q2 '08.

Q1 was the first full quarter in which we had the completely integrated product for sale.

As a reminder, there's no longer a separate TechTarget or KnowledgeStorm white paper offering.

They are now one.

In effect, we scrambled the eggs.

The acceptance of our combined product in the marketplace and the renewal rates that we are seeing are meeting our expectations.

It should be noted that at the time we closed the deal, there was less that $900,000 of booked legacy KnowledgeStorm business for Q1.

That translates to less than 4% of Q1 revenue.

The rest of the revenue was sold by our sales team.

As we've said before, we expect to see the full benefits of this acquisition kick in in the second half of the year.

So, in summary, with the fundamental online tailwinds at our back and the IT market steady, we remain very optimistic about 2008, 2009, and beyond.

I will now turn the call over to our CFO, Eric Sockol, for a financial review of Q1.

Thanks, Greg.

It's been a very busy quarter, and I'm pleased to share with you the financial results for Q1 2008.

We're reporting revenues for Q1 of $23.9 million, which represents an increase of 30% over Q1 2007.

Our revenues broken out by individual revenue stream are as follows.

Online revenues of $18.9 million, which is an increase of 38% over Q1 of 2007, and represents 79% of total revenues for the quarter.

Event revenues of $4 million, which is an increase of 36% over Q1 2007, and represents 17% of total revenues for the quarter.

Print revenues of $1 million, which is a decrease of 40% over Q1 2007, and represents only 4% of total revenues for the quarter.

Our customer concentration and renewal rates remained favorable during the quarter.

Our top ten customers represented 30% and no one advertiser represented more than 6% of total revenues.

Our Q1 quarterly customer renewal rate for our top 100 customers was 95%.

Moving onto gross profit for Q1 2008, total gross profit margin increased slightly to 68% compared to 67% for the comparable prior-year quarter.

Regarding our largest revenue stream, online gross profit decreased slightly to 73% compared to 74% in Q1 2007.

The slight decrease in margin is a result of recent site launches, which require upfront editorial costs, as well as an increase during the quarter in video webcast and custom publishing sponsorships, both of which have additional third-party production costs associated with them.

For the quarter, we're reporting $3.6 million in adjusted EBITDA, which represents a 24% increase over the prior-year quarter.

Just to refresh, we define adjusted EBITDA as earnings before interest taxes, depreciation, amortization as further adjusted for stock-based compensation.

For -- our adjusted EBITDA margin for the quarter was 15%, compared with 16% in Q1 2007.

Historically, due to revenue seasonality, Q1 is our smallest revenue quarter, and therefore, our lowest EBITDA margin quarter, as well.

As a reminder, approximately 70% of our annual operating costs are labor-related and front-end loaded, therefore creating a fixed cost structure.

This dynamic, resulting in lower adjusted EBITDA margins in Q1 as a result of the lower revenue base.

Greg will discuss Q2 and annual guidance later, both of which indicate strong EBITDA margins for the respective periods.

Moving on to operating expenses, Q1 2008 total operating expenses, excluding depreciation, amortization, and stock-based compensation, as a percentage of total revenues, was 54% compared to 52% in Q1 2007.

Excluding stock-based compensations, selling and marketing expenses as a percentage of total revenue decreased 1% while product development expenses increased 2% and general and administrative expenses increased 1%.

The decrease in selling and marketing is a result of improved [operating] leverage, the increase in product development is primarily attributable to additional technical resources gained through the acquisition of KnowledgeStorm, and the increase in G&A are primarily associated with the cost of being a public company, which was not the case in Q1 2007.

Regarding expenses not including in adjusted EBITDA, stock-based compensation for Q1 2008 was $2.3 million, compared to $1 million in Q1 2007.

Amortization of intangible assets for Q1 2008 was $1.5 million, compared with $760,000 in Q1 2007.

The increase in amortization is primarily related to the acquisition of KnowledgeStorm in Q4 2007.

Net loss for Q1 2008 was $112,000 compared to net income of $317,000 in Q1 2007.

Loss per diluted share for the quarter was zero compared to net income per diluted share of $0.01 for Q1 2007 on a pro forma basis.

Net income, adjusted for amortization and stock-based compensation as further adjusted for the related income tax impact, was $1.9 million for Q1 2008, which is an increase of 54%, compared to $1.2 million in Q1 2007.

Adjusted net income for the diluted share was $0.04 for Q1 2008, compared to $0.03 in Q1 2007.

In closing, our balance sheet and financial position remain strong.

As of March 31, 2008, our cash and short-term investments totaled $60.4 million, and our bank debt was $5.3 million.

This wraps up my review of the financial results.

And, at this time, I'll turn the call over to Don.

Thanks, Eric.

As Greg mentioned, we're reporting a very solid quarter today, despite the macroeconomic environment.

In light of that, I think it's worth updating you on some recent developments related to some of the factors that we discussed previously that have allowed us to maintain significant growth in this environment.

The first is our approach to market segmentation.

As we've discussed previously, the highly targeted nature of our portfolio's sites and the content that we provide there allows us to maximize our revenue opportunity against areas of enterprise IT that are in high demand, regardless of the macroeconomic outlook.

Greg mentioned that our storage and our data center media groups are great examples of this.

In these two markets, in particular, we have dramatically expanded our sponsorship offerings for vendors that want to align themselves with very specific topics, such as archiving strategies or managing large-scale virtualized environments.

These contextual alignment sponsorships allow vendors to maximize both branding and lead generation by associating their content and their messaging with very specific editorial coverage.

Across the network, we saw a significant year-over-year increase in our sales of these types of programs, separate from the strong growth in our core lead generation offerings based on white papers and webcasts.

As sales demand increases against these very specific topics, we continue to be opportunistic with regard to new site launches that will increase our ability to drive revenue against these issues.

As an example, since our last call, we've launched two new sites that further segment storage, which is our highest demand area right now, into the sub-markets that have demonstrated the greatest amount of both user and advertiser demand.

In addition to our recently launched UK storage site that we discussed last quarter, we've now launched two additional new sites in the storage market.

One, Search Data Backup, focuses on the exploding interest in data backup that's being primarily driven by compliance requirements.

And the other, Search SMB Storage, covers the unique storage needs of small- to mid-size businesses.

These sites, as well as the five new site launches we discussed on the last call, will start to contribute to our top line growth in the second half of 2008.

Another factor that provides us with strong growth in a challenging economy is the leadership position we've established for ourselves with regard to targeted lead generation, which tends to have some level of resistance against cutbacks and overall marketing budgets.

Our acquisition and successful integration of KnowledgeStorm has helped us further our lead in this area.

Greg spoke about the success we've had in executing on our cost reduction and integration plans.

But we're also seeing early success on the sales front.

Our new flex ROI offering is meeting its objective of broadening our advertiser base.

The number of orders for white paper-related programs increased by over 60% in Q1 '08 versus the first quarter of last year.

We've brought in a significant number of new customers that haven't previously done business with either TechTarget nor with KnowledgeStorm.

We're also seeing success with the KnowledgeStorm customers that we inherited through the acquisition.

We've retained KnowledgeStorm's largest customers as they've come up for renewal, and [have] begun to have success in expanding the programs of KnowledgeStorm-specific advertisers.

This base of customers previously only purchased content syndications from KnowledgeStorm, and our objective here is to expand their programs to include the additional promotional and sponsorship elements that were the core of our preexisting offering.

We've always been well-diversified with regard to our online product offerings, and that diversification is another factor that helps drive our growth.

In Q1, besides the strong growth in white papers and contextual alignment sponsorships that I discussed, we also saw significant year-over-year increase in demand for our display advertising offerings.

This is being driven primarily by our largest advertisers.

We've made a concerted effort to emphasize the breadth, the reach, and the overall purchasing power of our network-wide audience to these large national advertisers, and that effort is beginning to pay dividends.

Additionally, our recent focus on video and podcasts has resulted in high growth in our webcast offering.

An increasing number of our advertisers are taking advantage of integrated programs that make their information available through multiple distribution vehicles.

For example, a single program that combines the use of full-length video, a short podcast, and a white paper.

This allows our users to consume the content in the format that's most convenient for them and dramatically expands the reach for the advertiser.

Finally, we continue to invest in our audience development efforts.

Our most effective source of new member acquisition continues to be our targeted content, which fuels our search engine optimization efforts.

In addition to continuing our investment in editorial to support our sites and plan launches, we are making good process with ITKnowledgeExchange.com, the user-generated content site that we launched in October of last year.

The site has generated thousands of content contributions since inception, and it's one of the fastest growing sources of search-based traffic within our network of sites.

We're also increasing our investment in search engine marketing to assist in member acquisition and in traffic generation against these targeted topics.

The acquisition of KnowledgeStorm has brought considerable expertise on this front.

KnowledgeStorm had established a core competency against SEM, running over a million keywords per month at very cost-effective cost per clicks in a sophisticated long tail strategy that supported its lead generation objectives.

We're beginning to extend this capability to other areas of the business, such as member acquisition and support of the sponsorship programs.

With that, I'll turn the call back over to Greg for a review of our guidance for Q2 and the full year 2008.

Great.

Thank you.

In the second quarter of 2008, we expect revenues to be between $30.4 million and $31.6 million, and adjusted EBITDA to be between $8.6 million and $9.4 million.

We are reaffirming our guidance for 2008.

We still expect revenues to be between $118 million and $122 million.

We still expect adjusted EBITDA to be between $33 million and $35 million.

Before I open the call up for questions, I'd like to make a general comment on some of the analysts' projections.

In general, they are in line with Company guidance on an annual basis, but their quarterly forecasts do not appear to reflect the seasonal quarterly pattern of our business.

Specifically, they tend to be more aggressive in Q2 and more conservative in the second half of the year.

And we will now be glad to take your questions.

(OPERATOR INSTRUCTIONS)

Your first question will be from the line of David Joseph of Morgan Stanley.

Please proceed.

Yes, hi.

I've got just two quick questions.

My first question is actually related to what Greg just mentioned.

It looks like you are forecasting a pretty significant improvement in EBITDA margins for the second half of the year, maybe from about 23%, if I look at the midpoint of your guidance, from about 23% to 31%.

I know that there is seasonal strength there, but on a year-over-year basis, that's even a big move, and I just wanted to get a sense of what's behind that.

At the same time, you are seeing -- your guidance implies a deceleration in revenue growth from the first half to the second half, which makes sense -- but just from the law of large numbers, but you're also, I guess, talking about expecting to see some real synergies from KnowledgeStorm to come to play at that point.

And I'm just wondering if you're being a little bit conservative on that front.

The second question, just really quickly, why did gross margins decline in the online business, year-over-year?

Thank you.

Dave, this is Eric.

I just want to make sure I've got your questions [properly].

You had mentioned about EBITDA.

Was that what you were speaking to, David, in the second half?

That's correct.

I mean, if I'm looking at the midpoint of your guidance, it looks like it's increasing in the second half to about 31% roughly from about 23% in the first half.

So it's first half, 23%, second half, 31%, whereas revenue is going from roughly about 28%, year-over-year growth in the first half, to about 26%, according to my math.

Well, a couple things here to note, and this is consistent with what we've communicated both on the February call, as what Greg's just communicated.

As we communicated when we acquired KnowledgeStorm, we expect the integration to be completed by the end of Q2 and that is very much on track.

We're very pleased on the way that we've done the expense side, as well as the acceptance in the marketplace on the product offering.

And in the second half, we believe we're going to see a lot of the synergies.

And, as we mentioned, one of the reasons we bought KnowledgeStorm is because there's a lot of leverage on the bottom line.

So that's consistent with what we've been communicating and we're expecting that.

Also, I think it's important to understand that Q1 is our lowest quarter, historically, from an EBITDA perspective.

I mean, last year it was 16%, this year, it's 15%.

If you go back even further than that, it was closer to 10%, and that's really because of our model.

70% of our costs are labor.

They're all front-end loaded, and the revenue is less in Q1.

One reason for that is the events business is smaller in Q1 because of the seasonality.

So that's not an unusual relationship to have the second half to have the EBITDA higher than the first half and --.

Eric, just a quick follow-up to that though, is that 28% -- I believe 28% is the midpoint of your guidance in EBITDA margin for the second quarter.

That's lower than what it was this time last year, which I think was about 31%.

Right, and some of that, David, is because part of the KnowledgeStorm, we have brought on some additional technical resources.

Those types of resources had some great expertise in SEO and SEM, and we're going to realize on EBITDA the benefit of that in the second half.

So we've got some additional operating costs.

When you look at it, year on year, primarily the KnowledgeStorm, I mean, I can go into some more detail even further if you want after the call.

But, I mean, that -- primarily, the increase there is because of the additional technical costs of KnowledgeStorm.

Great.

Now I want to make sure -- your second question, I think, was on the revenue side?

On the online side, where it seems that gross margins declined, year-over-year, slightly but -- .

Oh, okay.

Sure, sure.

Again, if we're looking at Q1, as I mentioned, it went from 74 to 73, and that decrease in the quarter, again, Q1 is a relatively small -- is the smallest quarter so you can have more of a flux with a couple hundred thousand, here or there, and that's really a function of two things.

One, we had some site launches, and we have [to hire the] editorial costs up front before we realize the revenue associated with the site because we obviously have to have the content before we can draw the advertisers.

And the other piece is, is that we launched during the quarter video webcast, which is being well received, and there are some additional production costs with that, that slightly bring down the margin from, for example, a non-video webcast.

And also during the quarter, we had some additional custom publishing sponsorships which, again, have a third-party production cost associated with it.

So the last two points is why it would be down, year-over-year, by you know, from 75 to 73?

Yes, or 74 and changed to 73, yes.

Okay.

Yes.

And was there a third question, too, David?

Just a quick follow-up, because this is what we were trying to get to on the second question is, you're talking about not really seeing any kind of economic impact and it makes sense.

[Your] lead gen, you're very visible, very measurable, but I just want to make sure you're not necessarily seeing anything in terms of shorter term commitments, lower revenue per program, or even less programs at this point.

Yes.

No, Dave.

This is Greg.

We're not seeing any changes in that.

So, and those things that Eric was really talking about before are very normal in the business in terms of the Q, the second half versus the first half comparisons.

Those happen every year in our business.

But we're not seeing any contraction in terms of length of deals, so we're not -- all things are very positive on that front.

And, Dave, we're also still comfortable with 40% online revenue growth, so I think that also speaks to what we're seeing in the marketplace.

Okay, great.

Thanks.

Your next question will be from the line of Doug Anmuth of Lehman Brothers.

Please proceed.

Great.

Thank you.

Two questions.

The first one just on specific media segments.

I know you talked a little bit about server virtualization and data consolidation.

Can you give us a little bit more color on some of the potentially larger segments, windows, security, maybe even vertical software in terms of ballparking the growth rates there?

And then, secondly, just following up on David's question regarding the macro environment, you're not really seeing any change in terms of anything on the advertising side.

But, obviously, later in the year, there's clearly some dependence on the product launches, as well.

Is there any change that you're seeing when you look out, six to nine months, in terms of product launches from your advertisers?

Thank you.

So in terms of those different areas, obviously, the storage and the data center are growing very, very rapidly.

The other areas, there's really no headline.

It's kind of what we've been seeing and what we've been expecting, so there's no surprises there.

And then in terms of our advertisers, in terms of product launches, that's the oxygen of the IT market is to always be launching new products.

So these companies are still doing -- [their R&D] that's [doing] on a regular basis, and they're still having conversations with us about launching new product and everyone is under pressure to accelerate product launches.

So we're not seeing any, we're not hearing anything from people, talking about any slowdowns in that area.

Okay, good.

Thank you.

Your next question will be from the line of Mark May of Needham and Company.

Please proceed.

Thanks for taking my questions.

I really just had two.

I wonder if you could add -- I know you talked to this a little bit in your prepared remarks, but add some more color to the drivers of revenue growth in the period?

If you could, maybe talk to it from a perspective of volume versus price, or maybe talk about it from the perspective of average rev spend per active advertiser.

I wonder if there's any other ways that you could sort of talk about the drivers of growth?

And the second question has to do with competition.

There's always activity in the marketplace, but more news recently about things happening at IDG, and you've got ZD coming out of bankruptcy and some things like this.

So have you seen any impact on the competitive front?

If any of these competitors start to gain more traction, what impact would you think that would have on your business, if any?

Mark, this is Don.

I'll take the first and I'll let Greg take the second one.

So with regard to additional specific metrics around drivers of growth, I don't know if I'll be able to help you on that front, but let me see if I can talk to it, at least at a high level.

And, really, the way we present it in our prepared remarks is a pretty accurate way to look at it.

With the way that our business is set up, we're very well-positioned to take advantage of areas in the enterprise IT space that are hot.

Right?

And, right now, those hot areas are very much in the storage space and they're in the data center virtualization space.

So when you look at overall drivers of revenue, I think the first place to look is, all right, what are the areas within the enterprise IT space where they're spending going on kind of regardless of what the overall economic condition is, and what does TechTarget's portfolio look like, related to those areas?

So, again, we have leadership positions in both those spaces.

That's the first thing I'd direct your attention to.

Certainly, with regard to this year, in particular, this integration of KnowledgeStorm and what happens with the KnowledgeStorm base of customers is another important revenue driver for us.

And, as I said in my remarks there, we look at that at a couple of different levels.

Number one, the large spenders at KnowledgeStorm, how we're doing with those guys and, as I said, we're doing a good job of retaining that business as it comes up for renewal.

We're also looking for that base of KnowledgeStorm customers that did not do business with us previously, meaning they only did business with KnowledgeStorm, how are we doing on expanding those folks' programs?

And, again, that's been a big area of emphasis for us and we're seeing some early success on that front.

And then, a third area with regard to this KnowledgeStorm acquisition, is customers that are brand new to both of us, and we're particularly excited about the opportunities that this acquisition has opened up for us in that front, because it gave us a very good offering for smaller customers that hadn't been able to do business with us previously.

And, again, we're seeing some very good traction on that front, as well.

So, again, I direct you to the overall areas of interest from advertisers within enterprise IT, kind of what are the hot areas, and again, on a revenue-driver front, also direct you to the KnowledgeStorm accounts.

I think those are the most useful things that we look at internally in terms of 2008 revenue drivers.

With that, I'll let Greg handle the competition.

Yes.

So in terms of the traditional media companies in the IT space, we continue to gain share, so we continue to have the advantage of being very targeted, up to 50 websites.

They continue to be broad.

We continue to really have a very strong position in lead gen.

They tend to just do branding.

So one of the things that they've been talking about, there's been some press reports recently, they've been able to shift their revenue from print to online, but with very little overall revenue growth.

So they're doing a good job of maintaining the -- much less revenue than they had five years ago, but in terms of growing that and gaining share, we're still obviously growing much, much faster and gaining share.

And we have a much larger customer base.

They have -- our sense is they have much more customer concentration than we have.

So, really, nothing new there.

We're continuing to gain share in a pretty dramatic way.

And your next question will come from the line of Jim Friedland of Cowen and Company.

Please proceed.

Hi.

Kevin Kopelman in for Jim.

He's actually on another call.

I wanted to ask about how -- just kind of all of your new sites that you've launched over the last year have been doing?

If there are any, in particular, that stand out as having really gained a lot of traction, or if you could give us any metrics on users or anything else related to some of the new sites.

And then, just a sense of what -- maybe kind of what percentage of revenues those could account for in a year or two out, or what that looks like.

Thanks.

Okay.

This is Don.

I'll take that one.

So with regard to the sites that we've launched recently, the last call we talked about five new site launches.

This call, we're talking about two new site launches.

I believe there was one or two previous to the last earnings call that we did.

So these site launches, they're off to the start that we would've expected.

We have some that are exceeding expectations.

We have some that are kind of right at expectations.

I would caution there to say that for new site launches, there's really two or three quarters out before you get a good sense, for most of the new site launches, two or three quarters out before you get a good sense as to what their ultimate kind of revenue contribution is going to look like.

So for most of the site launches we've talked about, it's really, it's too early for us to say, definitively, what those are going to look like in the timeframe that you're asking about.

But we're happy with our progress in all of those.

Certainly, we did a launch of a site called SearchVMware related to this virtualization trend that we're talking about on today's call and that has been a good kind of fast grower in the early stages here.

Our launch of the SearchTelecom site that we did late last year has also been a good area of strength for us.

We're happy with that.

But, overall, these sites, as a group, won't start to be material revenue contributors until the latter half of this year going into early next year, and really couldn't break those out for you in terms of a percentage of overall revenue for 2009.

Okay, thanks.

And is there any way you can give us an update, what does the acquisition pipeline look like?

In terms of acquisitions, we're always -- our strategy is to be very opportunistic.

So we look at a lot of things.

Very few things meet our criteria of having enough potential scale, growth, and being available at a reasonable price.

So it's real hard to forecast at what rate those will come, but just that it is part of our strategy and we'll continue to be opportunistic.

Okay, thanks.

And there are no more questions at this time.

I'll turn the call back over to Greg Strakosch for closing remarks.

Great.

Well, thank you, everybody, for joining us today and we'll be speaking to you next quarter.

Thank you for your participation in today's conference.

This concludes our presentation and you may now disconnect.

Have a great day.