Cantaloupe, Inc.

Good day and thank you for standing by. Welcome to the Cantaloupe Third Quarter Fiscal Year 2024 Earnings Conference Call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dara Dirks. Please go ahead.

Thank you, operator. Good afternoon, everyone. Welcome to the Cantaloupe Third Quarter Earnings Conference Call. With me on the call today is Ravi Venkatesan, Chief Executive Officer, and Scott Stewart, Chief Financial Officer. Before we begin today's call, we would like to remind you that all statements included in this call, other than statements of historical facts, are forward-looking in nature. Actual results could differ materially from those contemplated by the forward-looking statements because of certain factors including, but not limited to, business, financial markets, and economic conditions. A detailed discussion of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements is included in our filings with the SEC and in the press release issued earlier today. Listeners are cautioned to not place undue reliance on any such forward-looking statements, which reflect management's views only as of the date they are made. Cantaloupe undertakes no obligation to update any forward-looking statements, whether because of new information, future events, or otherwise. This call will also include a discussion of certain non-GAAP financial measures that we believe are useful for, among other things, evaluating cantaloupes operating results. These non-GAAP financial measures are supplemental to and not a substitute for GAAP financial measures such as net income or loss. Details of these non-GAAP financial measures and the presentation of the most directly comparable GAAP financial measures and a reconciliation between those non-GAAP financial measures as well as the most comparable GAAP financial measures can be found in our press release issued this afternoon which has been posted on the investor relations section of our website at www.cantaloupe.com. Excuse me. And with that, I would like to turn the call over to Ravi.

Thanks, Dara. Good afternoon, everyone. And thank you for joining us today for our third quarter fiscal year 2024 call. During this quarter, our total revenue increased 13% year over year to $67.9 million. driven by a 20% year-over-year transaction revenue growth and 7% year-over-year subscription revenue growth. More notably, subscription revenue grew 6% sequentially from Q2 to Q3, signaling the reacceleration of that revenue stream. Transaction growth remains strong, driven by improvements to our take rate, as well as continued growth in active devices and average transaction size. Our average revenue per unit increased from $167.52 in Q3 23 to $186 in Q3 24. We've been able to grow ARPU by providing solutions that increase our customers' ability to sell higher ticket items and increase transaction volumes per device and the progress we are making to improve attach rates for our software services. We expect to continue this momentum with new products that we recently launched, like Seed Pick Easy and Seed Analytics, many of which are independent of the sale of equipment. We continue to make progress on expanding our growth margins. Total growth margin for the quarter was 39.6% compared to 37.9% in the same quarter last year. The increase in gross margin was driven by higher margins for both subscription and transaction revenue. Adjusted EBITDA for Q3 was $10.2 million, reflecting continued success with our strategy of expanding operating leverage by driving recurring revenue growth while also optimizing cost of goods sold and controlling operational expenses. I wanted to comment on the trends we've seen in the last three quarters as it relates to the three levers we outlined to expand operating leverage. Number one, transaction revenue growth and margins have overperformed versus our expectations. Number two, subscription revenue growth has underperformed while margins have overperformed. And thirdly, operating expense control has been on target. We remain on track to deliver on the 70% TAGR target for adjusted EBITDA from fiscal year 23 through fiscal year 26, which we outlined at our investor day in December 2022. With activation timelines stabilizing and international pipeline conversion beginning to pick up in earnest, we see subscription revenue re-accelerating in the near term as evidenced by the sequential growth in this quarter. As we look to fiscal year 25, we now believe subscription revenue growth will be north of 15% versus the 20% we've discussed previously, and combined subscription and transaction revenue growth will be north of 18%. We'll share more specific guidance for fiscal year 25, on our Q4 call. While it's taken longer than anticipated, we are starting to see real traction in both EMEA and Latin American expansion. We recently signed a strategic partnership with one of the largest operators in Mexico. This collaboration is currently deploying close to 4,000 devices under our Canal of One program. This partnership marks a major milestone in our Latin America market expansion. In Europe, we have now sold over 1,500 devices across 30 plus customers, the devices being deployed in the UK, Ireland, and Portugal. We are entering Q4 with a robust pipeline in all these markets. Turning to the quarter, we had several exciting new wins, which will continue to drive subscription and transaction revenues. We are accelerating growth in micro-markets and the penetration of seed software with both existing and new customers. Notably, our micro-market business experienced strong year-over-year growth in Q3. Our customers continue to go all-in with Cantaloupe and take advantage of our state-of-the-art micro-market solutions. Dependable vending is an example of a customer who is in the process of converting competitor kiosks onto the Cantaloupe Go platform. This is an existing seed customer who saw the advantages to leveraging Cantaloupe as a single partner to support their growing micromarket business and drive increased savings to their bottom line. We're also seeing customers that leverage Cantaloupe today for seed or micromarkets, converting competitor card readers onto our platform and consolidating their needs with one reliable partner to service their entire business. To this end, Pepsi MidAmerica, an existing seed customer, secured a large number of engaged combo devices, replacing competitor devices. We also onboarded many new customers in the quarter, including AYSV, who went all in with Cantaloupe, signing up for SeedPro, Office, Markets, Delivery, and PickEasy. We also recently partnered with monumental markets and innovative operator in Washington, DC, Virginia, and Maryland to implement our seed markets platform across 500 plus micro market and pantry locations, streamlining operations and enhancing the guest experience for consumers. Craig Kushner, the president of monumental markets stated with seed markets, you literally hit a button and it's done. What once required days of manual work is now accomplished effortlessly, allowing us to reallocate resources towards growth and service excellence. Having everything on one system allows us to move away from static scheduling to dynamic scheduling, which significantly enhances our service levels and drives productivity. Another area of growth is through our channel diversification with both partners and resellers. We recently signed on a new reseller in Canada, AU Natural, who placed their first large order for engaged devices and will serve as a provider to the smaller and mid-sized operators in the Canada market, and be able to provide fast and cost-effective shipping directly within that country. We continue to see strong growth with our BEP, or Blind Enterprise Program partners, with significant micro-market sales in Q3 across multiple state BEP programs. We also recently announced a strategic partnership with Innovative Display Works, or IDW, to become a preferred OEM to manufacture our revolutionary cooler cafe for IDW's customers across the country. This collaboration not only expands the availability of the Cantaloupe Smart Lock Connect technology, but also leverages IDW as a strategic channel partner for our cooler cafe solution. Our next area for focus is innovation with new products and enhancements. I just returned from a week in Dallas where the NAMA show has been taking place. There has been a lot of buzz around our booth where we've been showcasing all our solutions, including the new check point of sale platform and our latest micro market innovations like the new modern kiosk designs and smart coolers leveraging both AI and age verification technology. Our PICeasy integration with Seed software is also now available and is capturing customer interest with signups underway to empower our operators to digitize their warehouse operations. Seed Intelligence is now commercially available as a new add-on facilitating cross systems reporting by integrating data from SEED Pro to derive actionable insights. The adoption of SEED Analytics is also ramping up as operators use this tool to leverage data to grow their business with improved decision making and enhanced productivity. Our acquisition of CHECK and the integration is also going very well. During the quarter, we signed few additional minor league baseball stadiums and are seeing a strong pipeline develop in this exciting sports and entertainment market. As we engage more with customers in these segments, we are receiving very positive feedback. Nick Desrosiers, managing partner at Liberty Sports Group and F&B operator at Mercy One Field said, We are constantly seeking out the best new technology for our venue partners. Our collaboration with Czech significantly upgrades our tech stack, and we are thrilled to work together in delivering amazing fan experiences for all to enjoy. Jason Wright, NFL's Washington Commander, team president, and an existing Czech customer said, we saw significant improvement in key food and beverage metrics, including a reduction in wait times, and an increase in average ticket size, the ordering process was seamless. Guests of all ages were able to order their favorite food with just a few taps. As I touched upon earlier, we are continuing to expand our footprint internationally with thousands of connections across Latin America and Europe now. In addition to the large partnership in Mexico that I mentioned earlier, we recently held our first Cantaloupe Innovation Day in Mexico, with AMS, our Mexican reseller partner, and Exene, a local distributor. We now have secured several agreements with vending operators such as ER Vending, Abril Vending, and Citybox Vending in that geography. In Europe, we continue to make progress in scaling from pilots to full implementation. Notable new customers include Venmar Key, Premier Vending, and Carbon Neutral Vendings. This momentum has continued into Q4. We also continue to see customers placing and purchasing and placing micro markets and smart fridges, including new wins with county local vending, the vending people, new vending, JW vending, and connect vending. We've previously discussed our efforts to expand into adjacent verticals and have recently accelerated our services and cashless acceptance for the amusement sector. We secured Mendota Valley Amusements as a premium reseller to their bar, restaurant, and family fund center partners across the United States. They came on board as a customer in Q3, securing devices for their own local Minneapolis-based regional location, and have now gone all in, buying a significant number of devices to take our solutions to all of their partners across the country. NEM, National Entertainment Network, also continues to expand their footprint with us, adding cashless payments to their fleet of amusement and gaming locations. Beyond all these growth initiatives, we also remain focused on continued optimization of cost of goods sold. As mentioned earlier, we've made significant progress in expanding growth margins through the optimization of COGS, especially in transaction processing and equipment. Equipment margin improved sequentially from 2% last quarter to 7% in Q3, and transaction margin also improved sequentially from 21% to 23%. Lastly, discipline in managing operational expenses remains a priority. In the third quarter, while OPEX was approximately 6 million higher year over year due to a number of one-time items that Scott will discuss, Without these items, OPEX as a percentage of revenue would have been flat to last year in spite of investments in our international expansion. To wrap up, I wanted to highlight our 2024 Micropayment Trends Report, which analyzes payment transaction data from a sample of more than 600,000 cantaloupe card readers on vending machines. Our findings show significant rise in cashless and touchless payments, along with the growth of micro markets in the convenience services industry, revealing a 36% increase in the number of installed micro market locations in 2023. These strong secular tailwinds validate the long-term opportunity of Cantaloupe and will continue to drive our business for years to come. As always, thanks to the entire Cantaloupe team for their hard work in Q3. And with that, Scott will now review our Q3 results in more detail, as well as our updated outlook for fiscal year 24. Scott?

Thanks, Robbie. As Robbie mentioned, we delivered another strong quarter. Our 3Q24 revenue was $67.9 million, up 13% year over year. Our combined transaction subscription revenue grew 16%, to $59.2 million during the quarter. This includes $19.2 million of subscription revenue, a year-over-year increase of 7.4%, and $40 million of transaction revenue, an increase of 20% year-over-year. The overall increase in transaction revenue was driven by an increase in our take rate, growth in active devices, and higher average ticket sizes. Subscription revenue growth was largely driven by growth in our Cantaloupe One program and strength in our micromarket solution. As average revenue per unit for ARPU for 3Q24 was $1.86, or $186, up 11% from the prior year period. As a reminder, this is defined as our total subscription and transaction fees for the trailing 12 months divided by average total active devices for the same period. Our equipment revenue was $8.7 million, a decrease of 5% compared to Q3 FY23. This was primarily due to prior year benefiting from the 3G upgrade cycle that is now behind us. While overall equipment revenue was down, we did see an increase in active device growth of 6% year over year. Total gross margin for the quarter was 39.6% compared to 37.9% in the same quarter last year, driven by higher margins in both the subscription and transaction revenue lines. Subscription and transaction revenue margin was 44.4%, versus 42.3% in the prior year. This increase is driven by an improved processing take rate and reduced processing costs. Equipment revenue margin for Q3 FY24 declined to 7.2% from 13.4% in the prior year. The decrease was due to initial ramp-up costs from international expansion. These costs were normalized as our volumes scale. Total operating expenses in Q3 FY24 were $22.6 million compared to $16.2 million in Q3 FY23. This increase was due to expenses related to the check acquisition, including transaction costs, stocks remediation, and last year's $1 million net benefit from insurance settlements. As Robbie mentioned, without these items, OpEx was a percentage of revenue where it had been flat year over year. Net income applicable to common shares for the third quarter was $4.4 million, or $0.06 per share. compared to net income of $6.7 million, or $0.09 per share in the prior period. Adjusted EBITDA was $10.2 million in the third quarter, compared to $10.1 million in the prior year period, an increase of 1%. We ended the third quarter with cash-in-cash equivalents of $50.2 million. Our capital allocation priorities continue to target profitable growth and are specifically focused on driving operational improvements to control effects, expanding our micro-market offerings, and investing in domestic and international go-to-market strategy and product development. Now turning to FY24 guidance. With one quarter remaining of our fiscal year to report, we are tightening and updating our guidance ranges. We now expect total revenue to be between $270 million and $275 million. This is driven by a recalibrated ramp of our international expansion. And we now expect transaction subscription revenue to be between $232 million and $236 million. We expect total U.S. GAAP net income to be between $12 million and $15 million. Based on our progress with improving gross margins for both transaction and subscription revenue and our improved operating leverage overall, we are raising our adjusted EBITDA guidance to a range of $33 million to $36 million. Total operating cash flow is expected to be between $24 million and $28 million. In summary, we have improved profitability throughout the year and achieved meaningful revenue growth. While subscription revenue has grown slower than anticipated, transaction revenue is exceeding expectations and achieving higher profitability rates sooner. With that, we'd like to turn the call back over to the operator for the Q&A session. Operator?

Thank you. As a reminder, to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will take our first question. Your first question comes from the line of Chris Kennedy from William Blair. Please go ahead. Your line is open.

Good afternoon. Thanks for taking the question. The guidance implies a nice snapback and acceleration in the subscription and transaction revenue growth in the fourth quarter. Can you talk about the key drivers there?

Good afternoon, Chris. Thanks for the question. Yeah, the key drivers are we've seen a stabilization in the activation timeline. as a result of several initiatives, including adding more installers and providing more training to our customers so that they can be more efficient in accelerating those activations. So that's one step. And a ramp up in international expansion where several projects have gone from pilot to now more full-scale implementations. In addition to that, we've also seen strong growth in transaction side with a mixed shift from lower ticket items to higher ticket items and micro markets becoming a bigger part of the equation.

Very helpful. And then you talked about subscription and revenue growth of over 15% in fiscal 2025. When you think about that, how does that align with your long-term fiscal 2026 goals of margin improvement, what have you?

So when we outlined our strategy with kind of a three-year time horizon, we had articulated a target of 20% subscription growth rate year over year. And we acknowledge that that has performed lower than our original expectation, while the transaction revenue growth rate and margins have performed better than our original expectation. The purpose of both the subscription revenue growth and targeting it that way, as well as working on the cost of goods sold on the transaction revenue growth rate was to get to a CAGR of 70% on the EBITDA over a three year period. The good news is that we are still on target for that, although one of the levels have performed better and the other one has performed less than we expected. So this now reflects the recalibrated ramp on the subscription revenue growth rate, We are comfortable in articulating where it will land for fiscal year 25. We have to do a lot more work before articulating where it will land in fiscal year 26.

Great. Thanks for taking the questions.

Thank you. We will take our next question. Your next question comes from the line of Josh Nichols from B Reilly. Please go ahead. Your line is open.

Yeah, thanks for taking my question. And just to dive in, the gross margins have really shown a lot of upside relative to expectations, which is a little bit surprising just because usually the subscription revenue, right, is the stuff that has by far the highest contribution margin. I'm just curious, like, if you think subscription growth is going to be accelerating from the current levels to, say, 15 plus percent, as you kind of talked about, Wouldn't that imply that as long as you're able to hold like transaction margins around these levels that you could see some further nice step ups in the overall margin for subscription and transaction revenue? Is that like a fair assessment for how you're thinking about the fourth quarter and next year?

I think it's a fair assessment. I'll give you my perspective and I'd love to have Scott add on to that as well. The real reason Why it isn't, hey, here are three steps up is because, remember, we are also now continuing to aggressively expand into two new geographies with Europe and Latin America. And by the way, we'll have a phase two of international expansion follow shortly thereafter. So as you get into newer markets, for a period of time as we ramp the transaction volumes, the margins are lower. And then once we get to economies of scale, then the margins start kicking in.

No, that's exactly right, Robbie. As we look to expand that, I think within the next year, margins on equipment and transaction might be a little bit depressed from where they currently are right now, but not much, maybe half the percentage point or so on the transaction margin side. But we do expect that to rebound back as we start building those economies and scales.

Thanks. And then just looking as a follow-up here, as it was kind of mentioned, there's a very nice step up in the growth trajectory across subscription, but also transaction fee, revenue, and hardware as well, too, candidly. For the fourth quarter, I'm just curious in terms of the visibility. We're over a month into the quarter. Have a lot of these orders already been placed? You said you've been transitioning from pilots into full scale implementation. I'm just curious the confidence you have in achieving that big step up in the visibility based on the pipeline that you talked about.

A high level of confidence. I think the reason we were very excited to share some concrete numbers on international as part of this call was, you know, quite frankly, it's new and for a lot of our investors, I think the international expansion was perceived as one of the areas of risk with respect to this company and our future growth. And so I'm glad to report that we have crossed thousands of connections in both Latin America and in Europe. So everybody knows that the planes of the runway and rapidly climbing towards cruising altitude.

appreciate that um and then last question for me i'm just going to ask because i know it's been a point that's kind of been talked about in more detail previously um you had you had talked about some installation bottlenecks i know that you've hired some people and done a lot of work on that front have you brought the timelines for installation back down to that like four to six week type average or i'm just curious with the ramp up domestically but also abroad what you're expecting

So, no, we have not been able to bring them back down. We have been able to stabilize and hold them at kind of the, I would say, 12-week range. And based on all the data that I've looked at and that we've analyzed, we think we will sustain it at this level. We don't think in the near future we'll be able to shrink it back down. And that's really just driven by, you know, continued severe labor shortages that exist. And while we can do a lot with technology, and we have done a lot with technology in accelerating those, at some point you run into a point of diminishing returns. So we think we'll hold and sustain. We are not optimistic about being able to shrink those timelines back down.

Understood.

Got it. Thank you. I'll have that back in the queue.

Thank you.

Thank you. We will take our next question. And your next question comes from the line of Gary Prestofino from Barrington Research. Please go ahead. Your line is open.

Hi, Scott. Hi, Robbie. Hey, a couple of questions here. First of all, on the transaction side, it's exceeding expectations. Is that a lot of that driven by the micro market business and that you get higher ticket prices there? Or have you been able to, because you've increased your volumes, been able to negotiate better terms with some of the card networks?

It's a combination. The micro markets becoming a bigger part of the equation has definitely helped. Even in cases like vending, the types of products that are sold through those channels have changed. I mean, now you have vending machines that are dispensing cupcakes and pizza and headphones and cosmetics instead of just, you know, snacks and beverages. So that's helped. Some of our other verticals like amusement, et cetera, have had also higher ticket items. So all that. So the product mix is shifting favorably. That's one aspect. And, yes, we've been able to do optimization on the transaction processing cost. which, you know, both in combination, but it's not one side of the equation. You know, it's kind of both of those sides.

And I'll add to that a little bit too, Gary. So if you look across the past four quarters, our take rate has increased quarter over quarter, and that's intentional. We've done a lot of work with our sales folks and those who are entering in new contracts to make sure that we're keeping as high of a take rate as possible.

Okay. And then I jumped on the call a little bit late, and I know there was a lot of talk about the international expansion and what's going on there. In the U.S. market, in terms of your seed software platform, your total software platform, and even particular remote price change, can you just address how that shook out in the quarter and if there's still a healthy appetite on the part of operators to want to have this software to maximize their own profitability?

Yeah, and that's why I mentioned, you know, part of the nice thing about our business and what I'm seeing as our future is our dependency on selling hardware widgets and installing them to grow the revenue per unit continues to diminish as the attach rate on software add-ons has been healthy. So that's how we've been able to grow the ARPU so aggressively is by, you know, all these add-on software products. So, yeah, feed penetration within our base has continued to grow at a healthy rate. Remote price changes continue to grow at a healthy rate and so have some of the newer products, which I mentioned, like Seed Analytics, Intelligent, Easy, etc. So, the exciting thing is, both on the transaction processing side, through mixed shift in products and ticket sizes, as well as on the software side, We've now identified and executed on vectors of growth that are independent of selling new equipment. Thank you.

Thank you. We will take our next question. Your next question comes from the line of George Sutton from Craig Hellam Capital Group. Please go ahead. Your line is open.

Hey, good afternoon. This is Adam for George. Going back to the recalibration of the international ramp, I was hoping you could share a few details about what you've done from a sales and marketing standpoint to coincide with that recalibration.

So from a sales and marketing perspective, it's been more about what are the right target segments for us kind of initially versus as we've established credibility and we can go and start scaling further. And then where do we need to be more channel partner driven versus direct sales driven versus, you know, marketing and search engine optimization driven. So all that, you know, when you enter new markets, you learn a lot and you, you, you learn a lot by yourself as well as from the experiences of others. Right. So some of our competitors have been in those markets for, for a while and we've learned both from their successes and their mistakes. So all that has gone into what we are calling as a recalibration. And then some of it is just becoming more realistic and informed about our own expectations of the RAM. When we entered the early stages of our Europe expansion, for example, we thought the upgrade cycle from 3G to 4G connections in Europe would be very similar to U.S. where it was basically single cutoff dates from the major carriers. But as we've executed, we've realized that Europe has worked very differently, where every country has a different cutoff date, every carrier in every country has a different cutoff date. So the pressures on customers to upgrade equipment have not been the same as they've been in the U.S. So all that has gone into what we've called a recalibration.

Great, thank you. And then with respect to the Innovation Day in Mexico, could you just kind of share some of the things you learned from hosting that event? And in addition, do you have any other innovation days scheduled in EMEA or FlatM?

Yes, we have a whole pipeline of these types of events, and they are intended to drive more conversations and more intimate demonstrations of our innovation capabilities with prospects and customers. The innovation day in Mexico that I mentioned was with a couple of key partners, AMS, that's our reseller in the Mexican market, as well as Exim is one of their distributors. And that enabled us to share innovations with a number of operators that they serve and that they provide equipment to then add on our solutions to both increase same-store sales and boost operational efficiencies for those customers.

Great. Thanks, guys.

Thank you. We will take our next question. Your next question comes from the line of Mike Latimore from Northland Capital Markets. Please go ahead. Your line is open. Hi.

This is Vijay Devar for Mike Latimore. I think I'll continue with the international expansion discussion. I think you disclosed how many devices there in Mexico and EMEA, but could you tell us how many customers you have overall internationally?

Yeah, I mentioned in the call that in Europe we are now over 30 customers. We have a sizable number of customers in Latin America, so we haven't yet disclosed that there are Latin American market is a little bit more concentrated in terms of a few large players. So for competitive reasons, we are not yet sharing the number of customers, but suffice to say that it's a healthy number. It's smaller than the total number of customers in EMEA, but in a similar kind of age. Okay.

And in terms of the pricing and gross margin in international businesses, how do they compare with those in the U.S.? I mean, the margins and the pricing.

Yes, when you look at the transaction processing rates, it's generally lower over in Europe because you don't have the interchange fees that go along with it. But the margins tend to be a little bit higher, so the cost is significantly less. Overall margins are slightly higher than what we see in the U.S. As we mentioned a little bit before, as we're breaking into the market and building up our volume, We're probably a little bit below margins that we have in the U.S., but as that ramps, then it gets better.

Okay, great. And finally, in terms of the deployment time frame, do you see the time frame shrinking? I mean, how is it? I mean, as you're making this progress in terms of expansion, do you see the deployment time shrinking or just flat?

Yeah, as I mentioned earlier, We think we will sustain the deployment timeline kind of at the same level that they are. That doesn't mean we aren't putting effort in innovations that can help shrink them further, but our confidence level is high in sustaining the current timeline.

Got it. Thank you.

Thank you. I would now like to turn the conference back to management for closing remarks.

Thank you, operator. Thanks to all our investors and everybody listening in for your engagement. I think in summary, what I would like to share is this has been an exciting quarter to be able to come back and report concrete progress and numbers on both the Europe and Latin America front and share the progress we've made with gross margins across all of our revenue streams, while the subscription revenue growth has underperformed our original anticipation, it's been good to kind of put a floor on it and look ahead at fiscal year 25 so our investors know what's coming there. And it's also been nice for our management team to be able to express confidence in the longer term CAGR for EBITDA growth that we had outlined in our investor a year and a half back, and as we are at the midpoint of that kind of three-year journey, to know that we are on track to achieve those goals. With that, I'll turn the call back over to you, Operator.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.