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spk07: Thank you for joining QTERA's first quarter 2021 earnings conference call. After the prepared remarks, there will be a question and answer session. The discussion today includes forward-looking statements. These forward-looking statements reflect management's current forecast or expectation of certain aspects of the company's future business, including but not limited to any financial guidance provided for modeling purposes. Forward-looking statements are based on current information that is by its nature dynamic and subject to change. forward-looking statements include, among others, statements regarding financial guidance, regulatory approvals, productivity improvements, and plans to introduce new products and expand into additional geographies. For words that may identify forward-looking statements, we encourage you to refer to the Safe Harbor Statement in our press release earlier today. All forward-looking statements are subject to risks and uncertainties, including those factors described in the section entitled Risk Factors and are Form 10-K, as filed with the Securities and Exchange Commission, and updated in our Form 10-Q subsequently filed. QTERRA also cautions you not to place undue reliance on forward-looking statements, which speak as of only the date they are made. QTERRA undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances, or to reflect the occurrence of unanticipated events. Future results may differ materially from management's current expectations. In addition, we will discuss non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into QTERRA's ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the reconciliation from GAAP to non-GAAP measures in our earnings release. These non-GAAP financial measures should be considered along with, but not as alternatives to, the operating performance measures prescribed by GAAP. With that, I would like to turn the call over to our CEO, Dave Mowry.
spk05: Thank you, Operator. Today I am joined on the call by Rohan Seth, our Chief Financial Officer. I will begin today's call by providing a brief overview of our first quarter 2021 business results, a high-level summary of our energy-based aesthetic market trends, and a few operational highlights from our first quarter 2021 performance. Rohan will then provide additional details around our financial results and share our outlook for performance over the remainder of 2021. After Rohan finishes, he will turn the call back to me for some final comments before opening the call to questions. Turning first to our first quarter business results. I am pleased with the results delivered during the first quarter, which were driven by the continued execution of our commercial plans, both in North America and internationally. Total revenue for the first quarter 2021 was $49.7 million, an increase of 54% over prior year results. Our first quarter 2021 revenue performance reflected broad-based positive results across nearly every geography and in every product category of our business. Capital equipment sales were strong in the period with 35% growth over prior year, with notable strength in North America, Europe, and Australia and New Zealand. In our energy-based aesthetics, capital sales normally follow a seasonality that declined 20% to 30% from fourth quarter to first quarter. However, during 2021, our capital equipment revenue declined just 6% sequentially from fourth quarter 2020, supporting our belief in the growing recovery in the capital equipment category. Digging a bit deeper into our capital equipment revenue performance, we were pleased to see some resurgence in certain verticals that have been less of a focus of our customers through the work from home and Zoom meeting environments. In particular, body sculpting was sequentially stronger in first quarter 2021 versus fourth quarter 2020, driven by increased customer and patient interest in body sculpting treatments, likely in anticipation of a return to more normalized social and workplace routines. With respect to recurring revenue, we delivered $21.3 million in the first quarter of 2021, representing a growth of 89% over prior year. All three of our recurring revenue categories, including skincare, consumable products, and service, contribute to our strong year-over-year growth performance. With respect to skincare line we distribute in Japan, our revenue grew 17% sequentially over fourth quarter 2020 to $12.3 million and grew 324% over first quarter 2020 prior year period. As we move into the second quarter of 2021, we are crossing over the first anniversary of the heightened marketing and promotional efforts behind the skincare product growth. While we continue to be bullish on the long-term prospects of the skincare business with its low customer concentration, strong reorder rates, and new account acquisition opportunities ahead, we also remain very cautious on the potential for disruption in a post-COVID environment. In the first quarter of 2021, our consumer product revenues were $2.9 million, representing growth of 16% over prior year. Our global consumer revenue performance in the first quarter of 2021 was driven by the increased treatment volumes we saw in North America during this period. The third component of our recurring revenue is service. Global service revenue associated with both time and material maintenance or repair fees, as well as the revenue from sale of extended service agreements, with $6.1 million for the first quarter of 2021, representing 5% growth over prior year period. As the size of our active installed base continues to grow, the volume of service calls and service agreements we sell into the market will grow proportionally. Turning now to aesthetic market trends, we have seen that energy-based aesthetic end markets continue to improve. The pace and extent of customer recovery still varies by geography, with regional restrictions having localized impact. As anticipated and consistent with other elective procedures, U.S. energy-based aesthetic treatment volumes were a little lower in January and early February, likely due to the resurgence of the virus in the late fourth quarter of 2020, continuing into the first few weeks of 21. Additionally, we observed some consumer hesitation in the early weeks of first quarter 2021 that our clinician customers attributed to the rollout of COVID-19 vaccines, as some patients elected to defer procedures until they had received the vaccine. U.S. volumes rebounded quickly, absorbing any pent-up demand, improving throughout February and stabilizing in March. With respect to Canada, the other component of our North American business was COVID-19 restrictions remain in place in several areas and are expected to continue through a significant portion of second quarter 2021. In composite, between the U.S. and Canada, treatment volumes closed out first quarter 2021, matching pre-COVID run rates, and we are cautiously optimistic that these pre-COVID energy-based treatment volumes will continue throughout Q2. Despite the impact of COVID-19 resurgence in some of our international geographies, we were generally encouraged by our team's steady execution of their regional plans. These results reflected the slow but continued recovery of several key geographies in the Asia-Pacific region in both direct and indirect markets. In Europe, there are several regions that continue to enforce restrictions to certain social events, groups, activities, and travel. Nevertheless, we are bullish that these regions will continue to recover and headwinds will diminish as we move through the rest of 2021 as vaccination coverage expands. Turning now to operations from the first quarter, there were several positive takeaways worth highlighting from a commercial team's execution. Our direct sales teams turned in a strong performance during the quarter, combining to deliver 54% year-over-year system revenue growth. This type of geographical balanced growth was an area of focus, and I am pleased with these efforts and our collective results. Our first quarter 2021 North American capital equipment sales performance was very encouraging, overcoming the typical first quarter seasonality and posting year-over-year growth of 62% despite some lingering effects of the COVID environment. During the period, we continue to have success in expanding our North American commercial team through the addition of sales reps. To date, I am pleased with both the level of talent that we have been able to attract and the rate of onboarding our sales management team has been able to effectively execute. With respect to our international business, our previous organizational investments in Europe are beginning to bear fruit, with EU capital equipment revenue up 38% over prior year. We have previously shared that improvements were made to upgrade key sales positions and streamline our European commercial structure to place greater emphasis on sales rep development and customer interactions. We are pleased to see the revenue growth associated with these changes are already being reflected in our first quarter 2021 European results. The EU region will continue to be an area of focus for our commercial development activities throughout 2021. In addition to the European success we enjoyed in the first quarter of 2021, we had steady growth and strong contributions from previous investments made in our direct sales teams for both Australia, New Zealand, and Japan. Over the course of first quarter 2021, while delivering positive revenue results across the board, we were able to maintain our focus on people and process and continue our investments into the commercial teams, both domestically and internationally. I am excited to see what our commercial organizations will deliver in the back half of 2021 from these longer-term investments. With that, I'd like to turn the call over to Rohan.
spk03: Thank you, Dave. Before I begin, please note our prepared remarks will focus primarily on non-GAAP results, unless otherwise noted. A reconciliation of GAAP to non-GAAP is included in our earnings release, and we encourage listeners and readers to review our non-GAAP metrics in conjunction with the GAAP results as contained in our earnings release. As the overall volume of our Japanese business continues to grow, the size of contribution associated with Japan warrants a separate reporting line on a go-forward basis. Please reference our attached materials for further detail. I will now go over our results for the first quarter of 2021. Total revenue for the first quarter of 2021 was $49.7 million versus $32.2 million for the same period in 2020. As a reminder, our revenues in 2020 were impacted by the onset of the COVID pandemic. I continue to be impressed by the willingness and determination of our commercial leaders in responding to the challenging market conditions related to the pandemic. Nowhere is it more apparent than in our international segment, which grew 62% in the first quarter, with particularly strong performance in our Australia, New Zealand, Japan, and Europe regions. Not to be outdone, our North America business also grew 45%. These numbers are the results of our continued efforts around the retooling and rebuilding of our commercial organizations and reflect an ongoing steady recovery in our end markets. I'm also pleased to report that recurring revenue defined as consumables, global service, and skincare revenue was 21.3 million in the quarter compared to 11.3 million for the same period last year, representing an 89% growth over prior year. Within recurring revenue, our skincare revenue continues to outpace the market. First quarter revenue of 12.3 million grew 324% on a year-over-year basis. Service revenue grew 5% over last year to $6.1 million as a result of having an increasing number of systems under extended service contracts. Finally, global consumable revenue grew 16% to $2.9 million. Non-GAAP gross profit for the quarter was $28 million with gross margin of 56.4%, representing a 1,060 basis point improvement compared to the same period last year. This large increase was a result of having a larger revenue base to cover lower fixed costs, which was achieved in part due to a concerted effort on the part of our manufacturing leadership and organization to reduce and streamline our overhead costs. Moving to expenses. Sales and marketing expenses for the quarter were $15.1 million compared to $14.8 million for the same period last year on $17.4 million of increased revenue. This additional spending is driven by variable compensation nearly offset by lower fixed comp, pure marketing activities, and reduced T&E expense. Total R&D expenses were up $0.2 million over prior year on clinical spending. Finally, on to G&A expenses. For the first quarter of 2021, G&A expenses were $7.4 million compared to $7.8 million in the same period last year. For the first quarter of 2021, our non-GAAP operating income, also called adjusted EBITDA, was a profit of $4.6 million compared to the loss of $8.3 million for the same period last year. We experienced no material or significant changes to our tax positions. Moving on to the balance sheet, cash and cash equivalents ended the quarter at $164.9 million. This was in large part driven by the issuance of convertible debt in early March, which raised net proceeds of $118 million after $4.2 million of transaction costs and $16.1 million expended towards the purchase of capped call. Our stated intention is to use the remainder for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and strategic transactions. Through the issuance of this convertible debt, we have given ourselves an increased optionality to pursue the best outcomes for our shareholders. We will continue to do so with unrelenting discipline and a firm commitment to putting this capital to use in the best way possible. Before turning the call back to Dave, I would like to provide you with our outlook for the remainder of 2021. Despite regional travel and activity restrictions in several large population centers, We believe that the overall energy-based aesthetic end markets will continue to improve slowly over the course of 2021, fueled by global vaccination processes and incremental treatment volumes over the course of the year. However, with the lingering uncertainties related to COVID-19 from resurgence of the virus in key markets around the world, we intend to remain measured in our approach, and as such, we are choosing not to issue full year 2021 guidance at this time. Regardless of these potential disruptions, we remain steadfast in our commitment to invest in our key value drivers to include our ACME program, other R&D initiatives, and infrastructure in advance of our commercialization of ACME. With that, I will turn the call back over to Dave for some closing remarks.
spk05: Thanks, Rohan. In the first quarter, we achieved broad strength across our business with noteworthy performances from our commercial and operations teams. The operations team, inclusive of our manufacturing team, field service engineers, and technical support staff continue to step forward and deliver meaningful margin expansion results. When combined with our reduced operating expense levels, the increased revenue and expanded margins delivered 12.9 million of increased adjusted EBITDA in the first quarter over prior year period. This type of result provides strong motivation to our team and creates positive momentum for our business going forward. The leadership team and I intend to build upon this momentum, remaining highly focused on executing our vital few initiatives through the remainder of 2021, doing the right things right. The commercial team will continue investing in both people and process as we do work that places the customer at the center of all that we do. The operations teams will continue to focus on expanding gross margins through very directed efforts around labor, material, and fixed overhead reductions, while our R&D, clinical, and regulatory teams work together to deliver innovative products to the market through an increased new product development investment. We remain committed to the execution of our vital few initiatives over the balance of 2021. Our strong start in 21 came from the efforts in the second half of 20 carried forward and executed in the first quarter. These results serve to build confidence that Kutera will have strong performances throughout the rest of 2021, regardless of the remaining pandemic uncertainties that will likely be headwinds for many in this market. Finally, in closing, I'd like to spend a few moments thanking Jason Ritchie for his commitment and service to Kutera. Jason came to Kutera in 2018 as the company's Chief Operating Officer. And when asked by our board of directors, Jason stepped up to serve as the interim CEO, dutifully filling the role until my arrival in July of 2019. Ever since I joined Katerra, Jason has been a strong and willing partner in our efforts to turn this business around and create the future of medical aesthetics. As you might have seen in the press release issued after hours today, Jason will be moving on to a new role. I personally, along with the rest of the Katerra team, wish him the very best and expect that great things will follow him wherever he lands. The company has initiated a retained search for chief commercial officer to fill this vacancy. With that, I'd like to open the call to questions. Operator?
spk08: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Matt O'Brien with Piper Sandler.
spk06: Please go ahead. Hi, this is Karine. I'm from Matt. Thanks for taking the questions and best of luck to Jason. So starting off, historically your split of recurring and capital sales was like 30-70, last quarter 40-60, this quarter a little over 40, and you've mentioned getting closer to 50-50. Are you moving along with that this year? Are we going to hit that breakout this year, or when do we expect to see that type of breakout going forward?
spk05: Well, thanks, Corrine. I'm glad you could join the call. Give our best to Matt. I think the split you see is probably driven in part from our growth in consumables and skincare, but it is also somewhat driven by some of the decline in our capital sales as a result of the COVID environment that we've seen. So I want to be careful not to take a lap on kind of the suppression of our capital sales. I would expect that capital sales continue to grow, especially in the back half of this year. And we may revert a little bit on the current balance and to the upper 30s, but it's not going to drift all the way back. And I feel very good about our recurring revenue streams. We feel very bullish about those. But I think the recovery of our capital business in the back half may create a little bit of overshadow to that.
spk06: Great. Thank you. That's really helpful. And then one more for us. With the skin care margins, a little bit lower, what sort of things do you have in place to offset that headwind as you work towards your long-term margin goals?
spk05: Yeah, it's a great question. I'm going to start, and then I'm going to kick it over to Rohan if he has some additional points he'd like to make. I think I'm going to talk more specifically about skin care, and maybe Rohan can talk more globally about our margin expansion. With skin care, we're working very aggressively and actively with the manufacturer to evaluate what we can do to take out of some of our logistics costs and some of our handling expenses, as well as negotiate in the best possible way to improve our pricing and then ultimately the profit margin that we generate. And we'll be working through the course of the next several months. in hopes of getting and landing in a spot that's less dilutive to the overall margin. So we're active in looking at that, and we'll be able to hopefully see some benefit from those activities. Ryan, you want to talk about margins in general?
spk03: Yeah. And, you know, thanks a lot, Dave. So I'd say, first of all, you know, some of the results of our efforts over the past several quarters are kind of bearing fruit already and that was evidenced in the results and the numbers that we put forth in Q1. I'd say with the faster than expected growth in our skincare business, it delays by a little bit our previously communicated outlook on margin. But that being said, the skincare business continues to increase our conviction in bottom line profitability. I feel really good about where adjusted EBITDA ended up this quarter and where it's trending towards.
spk08: Thank you.
spk03: Great.
spk08: Next question, Chris Cooley with Stevens. Please go ahead.
spk02: Good afternoon and thanks for taking the questions here. Just for us maybe at the outset, and I apologize if you cover this in your prepared remarks, But is there any update just in terms of your thoughts on the timing of when we can either see data or get a more formal update as it pertains to the new product cadence and more specifically the acne offering? And then just as a second kind of follow-up, I'll just ask them here in succession. You know, again, really impressive what you all did on the adjusted EBITDA line on a year-over-year basis this quarter. Just curious a little bit as we see that rise in capital going forward in the back half of the year that you just alluded to, any concerns there that you'd have pressure on your ability to generate, you know, strong year-over-year growth and adjusted EBITDA as maybe you get a little bit of pressure at the gross margin line or you think you're realizing some operating synergies there that would more than offset that? Thanks so much. Thank you.
spk05: Hey, thanks, Chris. Great questions. I'll take the first one, and maybe Rohan can speak more specifically to the trends on bottom line and margin again. So in regard to ACNI, look, I think we've said an awful lot about ACNI. We've made sure that investors understand the level of our investment and conviction with ACNI, and we continue to be exceptionally bullish with the results and the progress our team has made. Nevertheless, we find that the more we disclose, the more we help and inform other people of where we are and what's happening. And I think, really, in our minds, we've given enough at this point, and when it's time to give more, we will do so. I would say that we are continuing to execute our plan. There's been no change to our plan, and we just find that giving more data just is not necessarily in our best interest at this time.
spk03: And I'll address the question on adjusting with Dr. S. So I'd say, look, we feel really good about the sustainability of the results that we're delivering and will deliver for the rest of this year. I feel like we're achieving a little bit of scale and all of the efforts that we've made over the past four to five quarters are bearing fruit. That being said, As the year progresses, you know, we will use some of these resources to accelerate efforts on things such as ACME, possibly ERP, and continue to reinvest in the best ideas that are available to us, which are all internal, as best as we can see right now.
spk02: Thank you.
spk08: Next question, John Block with Stiefel. Please go ahead.
spk01: Great. Thanks, guys. Good afternoon. Nice quarter, Dave and Rowan. I guess first question, Dave, you started with, you know, what normally is the case in aesthetics is capital down 20% to 30% from that 4Q to 1Q, and you well outperformed. I guess... What's also usual in aesthetics is for that step up, 1Q to 2Q. And I'm just curious, because of the big outperformance that you had from 4Q to 1Q, as we think about our models, and I know you don't want to give specifics, but should we still think the norm occurs? In other words, are you still growing capital, call it, from 1Q to 2Q, despite what looks like a very impressive 1Q number?
spk05: Yeah. By the way, John, I appreciate the question, and I appreciate bringing the clarity here. I don't think we're going to see quite the same seasonality, and this is just my opinion in digging into this and talking with some of our sales leaders. I don't think we're going to see quite the same seasonality step up in capital in Q2. I think, you know, the performance we saw in Q1 might have pulled forward very, you know, in terms of how aggressive our teams were in the marketplace during Q1. You know, we're certainly going at this thing with a vengeance to drive another sequential improvement, but I think, frankly, it's probably not going to be of the same magnitude. We have seen seasonality flow from Q1 to Q2 because of that performance. I am, you know, at this point very thoughtful that we should see sequential improvement, but I don't think it's going to be of a nature that I'm willing to guide to at this point.
spk01: Okay, fair enough. And then, you know, Rowan, maybe a quick two-parter for you, and then I'll end with just a higher level question. But when we think about gross margins, it seemed to be in your talk track, and also I believe in the press release, do we think about them moving higher throughout the year? Like you said, the success in skincare might, you know, put a little bit of a cap on it, but do we still think about, you know, call it sequential improvement off that 1Q21 gross margin number, and the follow-up, the two-parter is What about skin care? I mean, every time I ask about it and you say, don't take that as the current run rate, and yet it moves higher, is this finally the time that we think somewhere between maybe that 4Q and 1Q might be the right run rate for skin care? And then I've got one more.
spk03: Yeah. So I'll address the question on margin. I'd say... Yes, I'd say as the business continues to scale, we'll continue to see some expansion in gross margin. I'd say, you know, skincare will be a headwind. Whether we like it or not, it's there. That being said, it is a profitable business for us. It does help us on the adjusted EBITDA side. While it may be dilutive for us on a gross margin perspective, it's a good business for us. We appreciate having it. So I'll turn it over to Dave to talk us through where he sees skin care leveling out.
spk05: Yeah, you know, John, it's a little bit problematic for us because, you know, as you know and probably everyone on the call recognizes, Japan's kind of still in a travel lockdown situation. and for the most part has been, you know, while operating, not operating at full capacity, and a lot of folks in Japan have probably augmented their skincare regimen by using topicals. We're about to kind of see how that plays out as restrictions start to lift in Japan on travel, although Tokyo is still in shutdown. So we'll see. Our fear is that there's some degree of of growth that we've seen as a result of just the COVID environment itself. While we think we've got broad base and customers and we've got good reorder rates, you know, we think we have some hedge there, but I'm not so sure that the current run rate is the real run rate in a post-COVID environment. And that's what we continue to kind of be hesitant to get in front of. That said, you know, we like the way we've set this business up, and we like the fact that it's being effectively promoted across a broad customer base. And I think, you know, we don't see it reverting back to a pre-COVID number for us, but probably settling in somewhere kind of in the mid-range of what we've seen since the pickup.
spk00: Okay.
spk01: Very helpful. And last one for me, a little bit higher level. Dave, you've got the improved balance sheet. The aesthetics market is clearly coming back. The market is even moving to body where you guys have a really good portfolio. Maybe talk to us if you use this as an opportunity to accelerate the rep hires even more. If you wanted to do that, does that get thrown off a little bit with Jason's departure? What are some of the characteristics or wants that you have when you think about onboarding someone in Jason's place? Thanks, guys.
spk05: Well, Jason's a hard position to backfill just because of his drive and his commitment to excellence. And I think, you know, that's certainly something that we'll miss here. That said, I do think we have to get a little deeper into the commercial organization, and we have to get a lot more hands-on as we build it out, especially in light and in view of a future acne component. So, what we don't want to do is get super aggressive with adding people then finding that we have to create some degree of restructuring or reorganization as acne launches. So, we're trying to be very thoughtful around what's the future state and how do we bridge from now till that point. So, I think that's a very big deal. I think the other thing I would share is when I think about backfilling with a chief commercial officer, you know, my view is that this person has to have some varying skills. I want them to have certainly some aesthetic understanding and some experience, maybe even a capital market as well. But I think it's also important that they come with some clinical understanding. As we think about some of the shifts in this business, We've seen greater and greater, you know, kind of requirements for clinical data and clinical support, especially as we get into more of the medical conditions that we intend to treat. So I think it's a tall order. We're already underway with it, but it's a tall order. But I think we'll have success in finding somebody that can help us drive and move the needle.
spk01: Great. That's a good call. Thanks, guys.
spk08: Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question comes from Anthony Vendetti with Maxim Group. Please go ahead.
spk04: Thanks. Most of my questions have been answered. But maybe, Dave, I know you said you didn't want to speak or provide an update on the acne treatment laser. But has that Has the timeline shifted at all, or is the timeline still the same from last quarter when you discussed the overall timeline for getting approval and then launching it commercially?
spk05: I appreciate the market's interest in this product. I want to be very cautious because by answering your question, I'm actually giving I'm reaffirming. I've said I'm not going to say more, Anthony. I would tell you that we haven't changed our opinion, we haven't changed our view of the product, and we continue to drive with great efficiency towards what we think will be the future commercialization date and time. So all I would do is confirm to you that we haven't fundamentally seen any change that drives or changes our view on, number one, the size of the market, the capabilities that we have to affect the market, or the model that we would probably, you know, I guess from my perspective, be moving towards. So that's the best I think I can do.
spk04: Okay, and then just lastly, maybe a more higher level, it seems like most practices have obviously reopened at this point. Maybe some of the medical spas might be some of the only exceptions, but even most of them are, I think, reopened. Would you say there's a pent-up demand for capital equipment? Or has that demand been just coming back slowly over the last couple of quarters?
spk05: Yeah, I think you're right. A lot of places have opened and several people have added capital equipment. Our view has long been and continues to be that we're going to see probably the greatest appetite increase in the second half of this year. I think we have to not only get through the vaccination processes, But we have to get some stability. I mean, I think everyone's probably aware that there's some new challenges in Michigan now on resurgence of the virus. So we want to be very thoughtful that we haven't quite outrun this yet. And I think a lot of people are getting a little ahead of themselves and getting overly excited. We're trying to be measured and thoughtful around this and make sure that we don't get over our ski tips in terms of what we say and how we say it. That said, we're very pleased with the results we've delivered in the markets and in the environments that we're playing in, and we don't want anybody to interpret that we aren't thinking that we're doing well in those markets. We just aren't sure and certainly aren't in control over the full expansion and the full recovery of the economy.
spk04: Okay. Thank you. Appreciate it.
spk08: I would like to turn the floor over to Dave Mowry for closing remarks.
spk05: Thank you, Operator. We appreciate everyone's interest in the continuing of the following the Keterra story. We're very pleased with our results, very excited about our future, and we'll continue to make the investments we think necessary to drive what we believe to be a transformative event in this company's history. With that, I'll leave you and look forward to talking with you and updating you next quarter. Thank you.
spk08: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.
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