Corsair Gaming, Inc.

Good afternoon and welcome to Corsair Gaming's third quarter 2024 earnings conference call. As a reminder, today's call is being recorded and your participation implies consent to such recording. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press pound zero on your telephone keypad. With that, I would now like to turn the call over to Ronald Boundean, Corsair's Vice President of Finance and Investor Relations. Thank you, sir. Please begin. Thank

you. Good afternoon, everyone, and thank you for joining us for Corsair's financial results conference call for the third quarter end of September 30th, 2024. On the call today, we have Corsair CEO Andy Paul and CFO Michael Pollard. Andy will review highlights from the quarter. Michael will then review the financials and our outlook. We will then have time for any questions. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results of our company and are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings. Note that until an order 10-2 has been filed, these numbers are preliminary. Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to GAAP financial information, is provided in the press release we issued after the market closed today. With that, I'll now turn the call over to Andy.

Thanks, Ron. In starting this earnings call, I'd like to say that I've rarely been so excited for Corsair's future as I am right now. Our business depends on four fundamental premises. First, the desire and ability of consumers, mostly gamers and creators, to build high-performance gaming PCs and buy peripherals in order to play the latest games or optimize their studio setup. Second, our ability to continuously bring compelling products to the market. Third, our industry partnerships with other parts of the gaming ecosystem, both from hardware manufacturers and game publishers. And lastly, our ability to have partnerships with retail channels, who for most of our brands are where we sell our products. With those things in mind, let's get into some of the details, and then you'll see why I'm so excited. Let's start with the ecosystem. I think we all know that for any sport or pastime, the base platform is very important. Lots of snow brings out skiers, sunshine brings out golfers, mountain bikers, and runners, and great games engage gamers. For the last two years, consumers have not seen many blockbuster games launching, but the recent Call of Duty Black Ops 6 launch in October was an overwhelming hit. Roughly two thirds of our business relies on people building high-end gaming PCs in order to play the latest games at high frame rates. To build such a gaming PC, you need a high-performance CPU from Intel or AMD, and a high-performance GPU from Nvidia or AMD, those in the form of graphics cards from their board partners. The GPU is generally of most importance to gamers, and normally the graphics cards containing these processors are refreshed every two years. This year, however, that cycle extended to two and a half years. Latest industry speculation is that Nvidia will launch new cards in early Q1 2025, perhaps as early as January. This GPU launch, which the industry expects will use the same black wall technology as Nvidia's AI cards, has been eagerly awaited by the gaming enthusiast community. The expectation is that these cards, probably called 50 series, will be able to hit high frame rate gaming at 4K and possibly 8K with ray tracing enabled, supported by AI frame generation for smoother gameplay. I want to stress here that this is industry speculation. Nvidia has not released any launch plans yet, and all partners, including ourselves, are under strict NDA. With that said, we will be showcasing at CES in January a wide portfolio of Corsair components that will be ready to power, cool, and house these new GPUs. You can imagine that with the industry initially expecting this launch to be in second half of 24, and now expecting it in Q1 25, gamers looking to build a very high end system have been holding off building anything for most of this year. So while the unit numbers of components sold for self built PCs are down perhaps 5 to 15% between the different geographies, a large part of the high end market has been absent. And for us, that's resulted in a market that is mostly lower end components where we tend to have lower ASPs and lower margins. We therefore expect a surge of high end gamers to be jumping back into the market in early 2025. What does that mean for Corsair? The expectation would be for the PC gaming components part of our business to show growth in units, ASP and margins. And while we have high market share in these categories already, we would expect our new product launches to increase share further. Switching our attention to peripheral sales, which have a slightly different dynamic and price point, IE 50 to $200 ASP products rather than $2 to $3,000 for gaming PCs, we've done very well this year in terms of growth. In fact, year to date, we have shown 17% growth, which is one in excess of the data we see for recent time growth. But let's look quickly at the longer term market dynamics. The gaming peripheral market has shown good long-term growth over the last five years. In fact, if we use the America's PC gaming headset market as a bellwether, third-party data indicates that there are roughly 80% more headsets sold in 2024 compared to pre-pandemic years. And simple math would suggest that means there are roughly 80% more active PC game players in the market. Now, as we all know, a huge number of new gamers entered the market during COVID lockdowns, and some will have abandoned gaming after a turn to work, but there are still 80% more headsets being sold. And for the first time since the COVID lockdown, we are now seeing the gaming peripheral market are starting to turn from negative -on-year numbers to positive growth. So our expectation here is for our peripherals and creator segment to continue to grow well in the next few years. In terms of consumer spending, which is probably more of a concern for $2,000 gaming PCs rather than $100 peripherals, we saw some very encouraging recent data where Amazon reported record Prime Day sales overall, and we witnessed stronger hardware gaming sales during Amazon Prime period this year compared to the previous years. The retailers in general also appear to be encouraged by this data, and so we saw very good bookings activity in October as our channels start to lean in on inventory, both for the holiday period and also for the expected Nvidia GPU launch. In summary, we feel better about consumer spending activity now than we felt for a while. Let's move on to products. We've launched some very exciting products recently. Our flagship headset, the Virtuoso Max, with a price point of $329, is off to a great start and has encouraging reviews. We launched several small form factor keyboards, some with programmable hall effect switches that can offer desirable features such as rapid trigger and flash tap. We launched our Corsair custom lab where consumers can customize their desktop with peripherals offered in multiple patterns and genres. At Elgato, we also introduced our Stream Deck Studio that is powered by BitFocus software, a hyper customizable control service for pro broadcast systems. This solution will simplify complex workflows and will enable Elgato to enter a completely new part of the market. And we did not stop there. In September, we completed the acquisition of Fanatec who is generally recognized as the leading brand for high-end components which are used in racing simulators. More on that later. Moving on to partnerships, both from an industry and retail standpoint, we have several very significant things to report. First, we are very proud to be selected as the exclusive launch partner for the Activision Call of Duty Black Ops 6 title. This is a multi-year, multi-product Call of Duty partnership, which will involve a strong collaboration on marketing activations and branded products. For the Black Ops 6 launch, we showcased Call of Duty themed products from many of our product lines which are now available on our websites. According to Microsoft, last week's launch of Black Ops 6 was the biggest Call of Duty release ever, setting a record for day one players, as well as Game Pass subscribers ads on launch day. And unit sales on PlayStation Steam were also up 60% year over year. Lastly, we are also very pleased to report that we will have products in Apple stores for the holidays. You will see more on this when the launch occurs. We continue to perform well at our biggest retailers, which in the US are Best Buy and Amazon. And we continue to make progress with retail expansion on a worldwide basis. Let me now give you some more details on our recent Fanatec acquisition. This is a company that has been a leading provider of high-end sim racing components for many years. In fact, the company is roughly 30 years old, same age as Corsair. Like many companies in our industry, the surge from COVID lockdown and resulting dip after resulted in excess inventory for most of them, but for Fanatec, it really stretched their financials. And unfortunately, at the same time, they decided to build a new very expensive headquarters. All of this led to excessive losses, excessive debt, and finally the banks took over. And we ended up buying the company out of insolvency. To give you some perspective on size, the sim racing market is roughly $1 billion and growing fast, according to industry data. And Fanatec's revenue in 2023 was in excess of 100 million euros, almost all of it coming from their direct consumer website. With the sim community, uncertain of Fanatec's business health while going through insolvency, maintaining revenue became challenging. However, since the acquisition, we've been working quickly with the team there to put the Corsair business processes and systems in place so that we can stimulate and manage further growth and deliver great customer support. We anticipate that the integration process will take us roughly two quarters. The team at Fanatec is now very encouraged. They have a great team of product experts to bring world-class sim racing products to market. And now with Corsair backing, we are confident that this team will shine. We expect to add roughly $20 million of Fanatec revenue to our Q4 2024 numbers. And while it's too early to talk about 2025 numbers, we do expect to get them back to a growth path and back to a very profitable business. We expect to be able to grow Fanatec in several ways. First, channel expansion where it makes sense. We do have many interested partners at the moment. Second, we can add to their lineup some sim racing products that Corsair independently developed. And last, with our other complimentary product lines, we can offer complete solutions. All sim racing setups either need a PC or console to power the game and monitor and peripherals to view and control the setup. We have also seen quite a few professional sim racing setups using Stream Deck as a control panel. Overall, as I said at the beginning, I am very encouraged about our immediate future based on all these things mentioned. And with inflation steadily coming down, we would expect further growth as consumer spending confidence increases. This year, our EBITDA will end up at only 3% to 4%. This is not what we expect moving forward. And with the growth expected from our peripherals and components segment and from Fanatec, we should see EBITDA levels at double that for 2025. The post-COVID lockdown period has not been an easy one for us to forecast. And we hope from here on out, the gamer and creator markets will return to consistent growth. Now over to Michael.

Thanks, Andy. And good afternoon, everyone. This quarter was typical as it started slowly during the traditional vacation months of July and August and then accelerated in September. Our gaming and streaming business continued to grow year over year with strong margins. But we continue to see a shift towards lower end of our components product offerings as our end customers deferred building higher end systems. These products tend to have lower margins which impacted Q3 results. We took cost savings actions during the quarter and will continue to be prudent in our spending plans so we can drive improved profitability while investing in areas that would drive our long-term growth. In terms of the specifics, Q3 2024 net revenue was $304.2 million compared to $363.2 million in Q3 2023. For the first nine months of 2024, net revenue was $902.8 million from $1 billion in the year ago period. European markets contributed .4% of our Q3 2024 revenues compared to 33% in Q2 2024. While the APAC region was .3% of our Q3 2024 revenues compared to .9% in Q2 2024. Turning now to our segments. The gamer and creator peripheral segment contributed $102 million of net revenue during the third quarter compared to $90.4 million in Q3 2023. For the first nine months of 2024, gamer and creator peripheral segment revenue was $303.2 million compared to $258.1 million for the first nine months of 2023. The gaming components and system segment contributed $202.2 million of net revenue during the third quarter from $272.8 million in Q3 2023. Memory products contributed $97 million in Q3 2024 compared to $131.7 million in Q3 2023. For the first nine months of 2024, gaming components and system segment revenue decreased to $599.6 million from $784.5 million in the first nine months of 2023. With revenue from memory products decreasing to $303.6 million from $371.9 million. Overall gross profit in the third quarter was $69.7 million compared to $89.4 million in Q3 2023. Reflecting the lower revenue level and generally lower gross margins in our components and systems business. Gross margin decreased to .9% compared to .6% in Q3 2023. Overall gross profit decreased to $219.4 million for the first nine months of 2024 compared to $257.6 million in the first nine months of 2023. Gross profit in the gamer and creator peripheral segment was $39 million compared to $29.9 million in Q3 2023. Gross margin was .3% compared to .1% in Q3 2023. We continue to be pleased to see the rebound in this business and believe we're on track for further improvements while higher sales volume continues. The gaming components and system segment gross profit was $30.6 million compared to $59.4 million in Q3 2023. Reflecting the lower sales volume. Gross margin was .1% compared to .8% in Q3 2023. Our memory products gross margins in this segment were .7% for the third quarter compared to 16% in Q3 2023. Third quarter SG&A expenses were $74.1 million compared to $74 million in Q3 2023. Third quarter R&D expenses were $16.5 million compared to $16.1 million in Q3 2023. This reflects our investments in support of our expanded product line and new areas including mobile controllers and sim racing. Our cost reduction efforts restarted in July 2024 which included a planned reduction of approximately 100 employees. It's expected to generate between $1 million and $2 million of cost savings per quarter starting in Q4 and extending into next year. We remain committed to controlling operating expenses while continuing to support growth in our overall business. Gap operating loss in the third quarter of 2024 was $20.9 million compared to a gap operating loss of $0.8 million in Q3 2023. Third quarter adjusted operating income was $2.4 million compared to adjusted operating income of $19.6 million in Q3 2023. Adjusted operating income was $14 million for the nine months of 2024 compared to $53.6 million in the first nine months of 2023. Third quarter net loss attributable to common shareholders was $58.4 million or 56 cents per diluted share as compared to a net loss of $3.1 million or three cents per diluted share in Q3 2023. This includes the effect of net $32.5 million non-cash charge from evaluation allowance on deferred tax assets. On an adjusted basis, third quarter net loss was $30.3 million or 29 cents per diluted share compared to an adjusted net income of $13.4 million or 13 cents per diluted share in Q3 2023. For the first nine months of 2024, adjusted net loss was $27.6 million or 27 cents per diluted share compared to an adjusted net income of $35.1 million or 33 cents per share in the first nine months of 2023. The 2024 results include the effect of the tax valuation allowance. Finally, third quarter adjusted EBITDA was $4.8 million compared to $23 million for Q3 2023. For the first nine months of 2024, adjusted EBITDA was $21.6 million compared to $61.3 million in the year ago period. Turning now to our balance sheet. We ended Q3 with a cash balance including restricted cash of $61.6 million. We continue to maintain a healthy balance sheet with sufficient cash to fund the development of our expanding product portfolio. We further reduced inventory during the third quarter due before the effect of the acquired Fanatec inventory. And we expect to again further reduce inventory in Q4. Under a normal cash cycle, we expect these efforts should result in increased cash generation starting in Q1 2025. We ended Q3 with $177.8 million of debt at face value and our $100 million working capital revolver remains undrawn and fully available. Overall, we expect liquidity to remain excellent for the rest of 2024, allowing us to be flexible as opportunities present themselves. Corsair updated its financial outlook for the full year 2024. The company continues to expect revenue to improve through 2024 with a further improvement in adjusted EBITDA led by an additional improvement in margin, stabilized shipping costs and continued tight operating expense controls. The company reiterated its expectations for revenue for the full year 2024 to be in the range of $1.25 billion to $1.35 billion, including approximately $20 million of EBITDA neutral revenue in Q4 2024 from its recent Fanatec acquisition. Adjusted operating income is now expected to be in the range of $28 million to $43 million compared to $48 million to $63 million previously. Adjusted EBITDA is now expected to be in the range of $40 million to $55 million compared to $60 million to $75 million previously. With that, we're now happy to open the call for questions. Operator, will you please open up the call for Q&A?

We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from George Wang of Barclays. Please go ahead.

Oh, hey, guys. Thanks for taking my question. I have two quick ones. Just firstly, can you kind of double-click on EBITDA margin improvement plan just to secure any particular levers you guys might be targeting near term in terms of the path returning to high single digit EBITDA margin improvement plan? EBITDA margin, just kind of for any sort of measures, you can gain more color just in terms of profitability going forward.

Well, George, there's a couple of things, right? We've got a big year coming up for us with game launches and technology launches. That will drive sales of higher margin, higher SP products. So that's the first thing. The second thing is that we're continuing to grow our peripheral business, and we expect that to continue next year. Now, our peripheral business, as you know, is much higher 40% gross margin product lines compared to our much lower margin memory and components. That has continued to grow over the years. In fact, we are now, for this year, making more gross margin from our peripherals group than our components and memory. And we actually, even with the rebound of the memory and components group next year, we expect that to continue. So that is the biggest leverage because that mix will drive our overall margin up. Do you want to make any comments on the costs and things? The

only other thing is just, we've already covered our operating expenses at the lower revenue level this year. So as our revenue goes up and we generate more total gross profit dollars, more of that will fall to the bottom line as well.

Okay, great. Just a quick follow up if I can. Just maybe we can take a step back. Maybe you can talk about just general consumer demand versus the three months ago, just any notable changes. Also, as it relates to GPU refresh for early next year, just additional data points we could be looking out for in the interim. Just any kind of high-level thoughts on the industry trends there. Thanks.

Well, I think there's a couple of things to talk about. One's short-term, one's long-term. So short-term, you probably heard from Amazon, they announced record Prime Day. We also had record Prime Day and I think we were the leader in the gaming space in terms of growth. So what does that mean? We saw leading up to Prime Day, resale data that was slightly under last year, immediately popped above in Prime and we're seeing that continue to go up. Now I think what that means is that shoppers are there and they wanna buy gaming gear. They're a little bit more price conscious and that's what you'd expect in a inflationary environment. But as that eases, I think people are now getting more, more able to shop. And I think we also saw, as I mentioned in my notes, that since Prime Day, the retail channel has been very much more confident and so we're seeing really good bookings as they get ready for the holiday season and for Q1. So I think the whole retail channel in general is feeling good about consumer sentiment. The other thing I'd say at a much more macro level is that we are now four and a half years from lockdown and so we're over the historical refresh periods and I'm pretty sure that we're gonna see a lot of refreshes going on where now people have peripherals and graphics cards that are just too old to keep up with current requirements.

Great, great, thank you.

Our next question comes from Aaron Lee from Macquarie. Please go ahead.

Hey, good afternoon, thanks for taking my question. With regard to your updated guidance, can you unpack for us how much of the change was related to your third quarter performance versus a change in expectations for fourth quarter and on the latter, what are the major drivers of that change just given some of your comments around the solid bookings activity from October? Thank you.

Yeah, most of it was a Q3 shortfall. We acted as you saw for Q2 at a pretty slow pace and that continued in July and August. So it really wasn't until September that it started picking up and there wasn't enough to pull the quarter up to the level we had expected. So most of it comes from Q3. There may be a little bit of conservatism in the Q4 numbers because we left Q3 a little lower than we wanted. So there is a little bit of effect in Q4 but most of it's from the Q3 shortfall. Gotcha, okay. Most of the shortfall was in gross margin percentage in the components and systems. So even with revenue not too far off of what we were expecting after a decent September, it was in lower margin and lower cost components and that brought the total margin dollars down. Gotcha,

okay.

Aaron, let me add one thought to that. I also think in Q3, we had two pieces of information come in. One was the Nvidia launch, which everyone was expecting was gonna be at the end of the year, suddenly realized that it's probably more likely gonna be Q1. So I think that caused the channel to be a bit apprehensive. We also saw generally in the middle of the year, the retailers being a bit wary of inventory. And so that started to flip in Q4. I think people are a lot more confident. So that means distributors and retailers buying a little less inventory than planned in Q2 and a little more towards the end of Q3 and Q4. Sorry, Q3 to Q4, yeah. Does that make sense?

Understood, yep, that makes sense. Thank you for that. And as a quick follow-up, wanted to talk about your Stream Deck. Can you just update us on the Stream Deck marketplace and where the trends there have been like? And what are your expectations around the marketplace becoming a more material revenue stream in 2025? Thank you.

So the marketplace has well over a million accounts now, growing very fast, that's the first thing. We historically have used the marketplace as a free app marketplace. We started about a year ago to allow third parties to charge but mostly it's free. So the download numbers are absolutely enormous. But mostly free. We have got two thoughts here. One is that the number of free downloads actually drives Stream Deck hardware revenue. And so we've actually seen since we launched the marketplace a good growth in Stream Deck units sold. And then the second thought is that at some point we'll be able to start charging for very compelling apps as well. So I think at the moment we're still in the very early stages where the revenue from software sales is fairly insignificant, but it's certainly driving growth in hardware sales.

Okay, thank you. Appreciate all the color.

Our next question comes from Drew Crum from Stiefel.

Yeah, thanks, you guys. Good afternoon. I think you suggested 2025 would be a rebound year for the components and memory businesses with the anticipation of the new GPU serving as a catalyst. 2023 was the last year that featured the launch of new chips and it really helped segment performance. Is 23 the type of sales threshold we should anticipate for the segment when looking ahead to next year? I'm just trying to understand the magnitude of a recovery we should look for next year. And then I have a follow-up.

Well, that's a billion dollar question, right? Here's the way I would think about it. What's different is that 23 was still very early after COVID. So we have to realize now we've got our backward looking glasses on that there was a lot of pull forward in COVID years. In other words, a lot of people built gaming PCs and bought peripherals in 20 and 21 that then caused them not to do that in 22 or 23. So imagine you've got a certain amount of the market pulled for one or two years. So in 22, obviously there was a massive over inventory and demand went down because people had already bought and built everything. There was still some of that hanging over in 23. So while the early adopters were grabbing the new cards, a big chunk of the market had already built machines. We typically see about an average of two cycles for people to upgrade. So in other words, people with 40 series cards were upgrading 20 series cards. And we'd expect in the 50 series cards launched next year, people to upgrade the 30 series. So that's why we think now that the COVID or let's say the ripples from the COVID surge are kind of over and we should see more steady growth now from here on out.

Got it, that's helpful. And then Andy, can you comment on your channel inventory heading into the holidays? I think you mentioned healthier booking trends that you're seeing across your ecosystem and then the dynamics with retailers, maybe less willing to take on more stock back in two queue but more willing to get a little more aggressive heading into four queue. Where are you positioned going into the holidays?

Well, we're still in the middle of the rebound. I'd say if you looked at the middle of the year, we were under inventory compared to our plans, which obviously means that our sell out was a little higher than our sell in. And that's now starting to reverse. So I think all the retailers have now realized that it's time to lean in and everyone's getting signals that it's gonna be a strong Christmas, especially after the prime day activity. And all the people that are selling enthusiastic gear for the people building gaming PCs are also realizing it's gonna be a big year because the rumors, I'll say rumors because obviously Nvidia hasn't announced it directly but the rumors are that Nvidia will launch all four top cards early in the year. So if it's called 50 series, which you expect it is 50, 90, 50, 80, 50, 70, 50, 60, all very quickly. So there's gonna be a card at all price ranges that will be expensive obviously but for all price ranges early in the year. So I think this is gonna be a little different than 23 for a lot of those reasons. Now, the other thing for us to remember is that as I said earlier, we're now getting more gross margin out of our peripherals group than our memory and components group. And we do expect on a macro level that the peripherals market firstly grows faster. It's much less prone to economic issues because spending a hundred or $200 on a peripheral is much easier than building a two or $3,000 PC. And the overall market in general is going faster because there's more gamers that are coming to the market, that are teenagers that can afford to buy a peripheral than can build a very expensive gaming PC. So we expect that market to continue to grow and we continue to grow within that, both organically as well as with acquisition. And our plans, we're not planning to do all these acquisitions that we've done already and then stop. What we're finding is there's a lot of companies around with revenues in this $50 to $100 million level, which really have a tough time getting traction in the market because there's billion dollar players there. So there's a lot of options we have for acquisition and we're planning to continue to do them. And where we focus is high gross margin, mostly direct to consumer. And that will just continue to add to our gross margin of that division. So expect the peripheral segment to grow faster in general than the components in memory, even though the components in memory group should have a healthy rebound next year.

Got it, okay, thanks guys.

As a reminder, if you have a question, please press star then one. Our next question comes from Colin Sebastian from Baird. Please go ahead.

Hey guys, this is Colin Lilliat on for Colin Sebastian. And so just beyond waiting for the broader product refresh cycle for chips and PC builds, what gives you confidence in the underlying demands within the industry? And then second question, you guys did the mobile controller as well as the racing simulation this year, kind of as a key focus. So is there any more details on product development pipeline for 2025 and then any specific categories that are gonna be in focus? Thank you.

Well, we're trying to focus on everything at the same time, right? But look, starting with sim racing, that's a big market with very few players in it, mostly small. The only big player really is Logitech. Then there's a lot of enthusiast companies. We bought the biggest one, biggest enthusiast player. One of the things that we realized is that there's a big market there for complete systems. And that's right now being serviced by a lot of very small integrators. And we're gonna hope to really add to that because remember, we make monitors, we make gaming PCs, we make chassis. So we make the whole solution. And this is very different from the industry as it was before. So I think we're gonna make a big impact there. I'm all very excited about that. The other parts of the business, I mean, the Stream Deck and the Elgato portfolio is very powerful. We just launched into a new B2B business where we're hitting up all the professional broadcast booths. A lot of them have been experimenting with Stream Deck. And so we actually made a Stream Deck specially for them when we've launched that at some of the broadcast shows and tremendously popular. So I think that's an additional part of the business that's gonna grow. And then lastly, our overall peripheral section or segment, which makes the traditional peripherals, gaming headsets, keyboards and mice, is really doing very well. We've got a magnificent portfolio of new products that have just arrived. Some of those we mentioned, they're gonna be taken up on the Apple Store. But I think we're really hitting that market in full force now, getting the right products out at the right time.

Okay, great, thank you.

This concludes our question and answer session. I would like to turn the conference back over to Mr. Andy Paul for any closing remarks.

Thank you everyone for joining us on the call today and for continued support. If you have any follow-up questions, please contact our Investor Relations Department. We look forward to updating you next quarter. Thank you and have a good evening.

Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.