Upwork Inc.

Good day and thank you for standing by. Welcome to the Upwork's first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Ms. Denise Garcia with Investor Relations. Please go ahead.

Thank you. Welcome to Upwork's discussion of its first quarter 2021 financial results. Leading the discussion today are Hayden Brown, Upwork's President and Chief Executive Officer, and Jeff McCombs, Upwork's Chief Financial Officer. Following management's prepared remarks, we will be happy to take your questions. But first, I'll review the Safe Harbor Statement. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks, uncertainties, and assumptions. Our actual results could differ materially from expectations reflected in any forward-looking statements. In addition, any statements regarding the current and future impacts of the COVID-19 pandemic on our business and current and future impacts of actions we have taken in response to the COVID-19 pandemic are forward-looking statements and related to matters that are beyond our control and changing rapidly. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our investor relations website, as well as the risks and other important factors discussed in today's press release. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended March 31, 2021, when filed. In addition, reference will be made to non-GAAP financial measures. Information regarding reconciliation of non-GAAP to GAAP measures can be found in the press release that was issued this afternoon on our Investor Relations website at investors.upwork.com. As always, reported figures are rounded unless otherwise noted. Comparisons of the first quarter of 2021 are to the first quarter of 2020. All measures are gapped unless cited as non-gap. The prepared remarks corresponding to the information reviewed on today's conference call will also be available on our investor relations website shortly after the call has concluded. Now I'll turn the call over to Hayden.

Thanks, Denise, and thank you all for joining today. I'm pleased to report that first quarter revenue grew 37% year over year to reach $114 million, and first quarter growth services volume grew 41% year over year to reach $787 million, marking our third consecutive quarter of accelerating year over year growth. This year's strong start builds on last year to clearly underscore the rapid acceleration of freelancing adoption by companies big and small across the globe. The pandemic has changed work forever, permanently shattering the biggest impediment to online freelancer adoption, which is prior discomfort with remote work. Regardless of their comfort levels before the pandemic, companies now know they can build and grow their businesses faster and with greater efficiency by incorporating remote talent. Freelancers are joining companies' teams to do critical work that goes beyond old freelancer stereotypes, challenging the traditional notions of who participates in a high-performing workforce. We're in the midst of a tectonic shift in how work gets done, and there's no going back. The new way we work is defined by opportunity, not constraint, flexibility, not restricted by four office walls, and trusted relationships, not rigid employment contracts. As we head down this exciting path, Our goal is to reflect Upwork's critical role in aiding businesses and professionals to push past current misconceptions and limitations to achieve more together. We realize that companies' different working models may necessitate different ways of incorporating freelancers into their workforces. This is why we have focused so intensely on expanding our platform's capabilities to go beyond the talent marketplace with project catalogs, talent scout, and our enterprise suite. The comprehensiveness of our platform is unmatched and delivers what no other company can, a complete ecosystem that empowers companies to work any way they want on Upwork. Despite our strong performance over the past year, we haven't shown a bright enough light yet on our breadth as a core differentiator. That's why we are introducing our industry category today, calling it the work marketplace from now forward. Our strategy remains unchanged, but starting today, we are turning the floodlights on all the ways that companies can work on Upwork because this breadth and depth enables customers to get exactly what they need, exactly how they want it. We will seek to introduce more companies to this incredibly unique value of Upwork and to help those customers leverage the comprehensiveness of our offerings to even more rapidly evolve their Upwork experience from single transactions to strategic engagements. Our goal is to become the always-on solution for all companies of every size hiring and managing freelancers at scale. We are unveiling a new identity and advertising campaign to show companies and freelancers what is truly possible in this new world of work and how Upwork's work marketplace experience can help them achieve more together. I'm so excited by where work is headed and by the unique opportunity Upwork has to enable the entire work marketplace industry. We can see that this journey is already underway through our strong first quarter performance, which I would like to now focus on by discussing the key drivers of our growth. I'll start with new client acquisition. In the first quarter, we grew new clients by 55% year over year, marking our fourth consecutive quarter of accelerating growth rates. We continue to execute with discipline against the marketing strategy we put in place last year. As an example, our SEM performance continued to strengthen quarter over quarter as we were able to increase SEM acquired new clients by 113% in Q1, while meaningfully lowering our cost per acquisition. We are pleased with our client acquisition performance to date, and we see continued runway for further growth and optimization across SEM, SEO, mobile, and international. Next, I'd like to discuss client retention. The strength of our model was evident in the increase in client spend retention from 102% in Q4 2020 to 106% in Q1 2021. the fastest acceleration we have seen in the last five years. As a reminder, this metric measures the spend retention of clients who are with us 13 to 24 months ago. We also saw strong retention in our more recently acquired clients. For example, clients acquired in Q4 2020 increased spend by 9% in Q1 2021. which is also the highest quarter-over-quarter growth in spend retention that we have seen in the last five years. Furthermore, we grew our core clients by more than 7,000, approximately 61% more than the increase we achieved in Q1 2020. Next, I'd like to touch on our sales team, which saw strengthening performance this quarter as the previous quarter's adjustments normalized. Q1 was our strongest quarter ever with respect to the number of new enterprise clients signed, which grew more than 40% quarter over quarter. Sales cycles have also been shortening, with standard deals down significantly to around three months and compliance deals averaging around six months. The number of customers spending more than a million dollars with us over the trailing 12 months was up 15% quarter over quarter, And the number of customers spending over $100,000 in the trailing 12 months was up 27% year over year. Given these strong signals, we're considering increasing investment as early as Q3 2021. I noted earlier how we are focused on helping our clients evolve their experience with Upwork from single transactions to strategic engagements. I'd like to highlight one sales-enabled customer, Digicel. which has gone through this exact transformation, seeing their Upwork engagement expand as they uncovered the true value of our platform. Digicel started with us over a year ago to localize creative ad content for their holiday campaign. Subsequently, as they contemplated a global relaunch of their brand, they realized this would be a highly complex effort requiring talent and coordination across 32 markets. This is where the global depth and breadth of the Upwork offering came to bear. Digicel leveraged Upwork's global talent pool to complete the project, reaping the benefits of the reality that new ways of working have enabled more innovation, fresh ideas, and increased agility. A global Fortune 500 consumer packaged goods company is another example of how companies are increasingly embracing freelancers and leveraging Upwork to get core work done. This company is using freelancers on Upwork to help with product market fit and user engagement through their online channels. The team began using Upwork in June 2020 to help with a simple landing page design, and over the course of several months, engaged a team of freelancers to develop a sophisticated website with integrated online chat, social proofing, and an online library, among other features. The company continues to engage the freelance team as essential partners, providing quick execution of new user engagement ideas and testing the demand for potential new service offerings. These two examples showcase companies discovering that building a virtual talent bench of trusted, highly skilled freelancers empowers them to instantaneously scale up and down their teams, realizing agility and cost efficiency to meet the changing demands of their businesses and prevent their teams from burning out. And professionals working as freelancers are discovering that freelancing empowers them to work on their own terms, giving them more control over when where, for whom, and on what they work. This is a model that is truly a win-win for all parties. It's increasingly becoming evident that organizations that aren't incorporating freelancers into their teams will be at a serious disadvantage to their competitors. All of this translates into a massive opportunity for Upwork. Our focus is clear. Our single strategic priority for 2021 is innovating, scaling, and promoting the work marketplace for the world. I'll now turn the call over to Jeff to discuss our financial results in more detail.

Thanks, Hayden. We are off to a great start to the year, with Q1 results exceeding our expectations on both the top and bottom lines. The business continues to perform strongly across virtually every client-related dimension, from categories to geographies to tenures of clients to acquisition and retention, to sales and marketing. On the talent side, we were also very excited to see the strong year-over-year growth in the number of freelancers who were active in the quarter, which accelerated for the fourth consecutive quarter. Now I will discuss the financial results for the first quarter of 2021 and provide our revenue and EBITDA guidance for the second quarter and updated guidance for the full year 2021, which we included in our earnings release filed earlier today. GSB in the first quarter was $787 million, with strong year-over-year growth of 41%. Revenue grew 37% year-over-year to $114 million in the first quarter. Marketplace revenue for the first quarter was $105 million, reflecting a year-over-year increase of 40%. Managed services revenue grew 6% to $8.9 million for the first quarter. Total core clients grew by approximately 18% year-over-year or 7,000 in the first quarter to 152,000, with gross new core clients in the quarter growing 46% year-over-year and net additions of core clients up 61% year-over-year. Our overall take rate in the first quarter was 14.4%, down from 14.9% in Q1-20 and down slightly from 14.6% in Q4. This decrease was expected and driven primarily by the fact that marketplace revenue grew faster than managed services revenue, which has 100% take rate. Normalizing for this mix shift, our marketplace take rate in the first quarter was 13.5%, down just slightly from 13.6% in Q1-20, driven by the changes to our Connects program, which we implemented in Q4 and are performing well. Marketplace take rate for the quarter was in line with a 13.5% in Q4-20. Non-GAAP gross profit was $83 million for the first quarter, or 73% of revenue, compared to 72% in the first quarter of 2020. Non-GAAP operating expenses for the first quarter were $79 million, representing 70% of revenue, down from 75% in the prior year, with G&A decreasing from 17% to 14%, sales and marketing decreasing from 36% to 34%, R&D remaining flat at 21%, and transaction losses remaining flat at 1%. Non-GAAP net income was $4.2 million in the first quarter of 2021 compared to non-GAAP net loss of $3.6 million in the first quarter of 2020. Our basic and diluted non-GAAP net income per share were $0.03 in the first quarter of 2021 as compared to non-GAAP net loss per share of $0.03 in the first quarter of 2020. Adjusted EBITDA was $6.9 million in the first quarter of 2021, compared to an adjusted EBITDA loss of $1 million in the first quarter of 2020. Now, let's move on to guidance. We are guiding second quarter revenue to between $119 million and $121 million, and are increasing our full-year revenue guidance to between $480 million and $490 million, representing 30% year-over-year growth at the midpoint. We continue to expect GSV growth to be slightly stronger than revenue growth as marketplace revenue will likely go faster than managed services revenue. And due to changes we have made to our connects program, they're driving better liquidity in the marketplace and higher GSV while lowering connect specific revenue. We are bullish about the investment opportunities in front of us and we'll continue funding growth initiatives while closely monitoring our performance to achieve our return thresholds. As such, we expect second quarter EBITDA to be between 2 million and 3 million and are increasing our full year EBITDA guidance to 16 million to 20 million. We also anticipate a 7 million to $8 million G&A expense in Q2, which is an impairment charge we expect to recognize pending the completion of the subleasing of our Santa Clara facility to a third party. This will not be reflected in our EBITDA calculations and as such, is not reflected in our EBITDA guidance. Cash and marketable securities were approximately $170 million at the end of the first quarter. We hope you can all join us for our Virtual Investor Day on June 15th. We look forward to sharing more details about our plans for the future and potentially new metrics, as well as introducing our extended management team.

Thank you. We will now take your questions.

Thank you.

Ladies and gentlemen, if you'd like to ask a question at this time, please press the star, then the one key on your touch-tone telephone. To withdraw your question, press the pound key.

Please stand by while we compile the Q&A roster. Now, first question coming from the line of Marvin Fung with BTIG.

Your line is open.

Great, thank you for taking my questions. My first question is if you could just provide us a little more granularity maybe on how Project Catalog has started. Have you found any surprises compared to your initial expectations? And specifically, do you think that you're seeing any cannibalization from the core marketplace? That'd be great, and I have a follow-up after that.

Sure, Marvin. So the finding on catalog so far, it's definitely still early days, but what we're seeing is this is additive to the business. And certainly it's underscoring the power of our work marketplace strategy because even though this is early, what we're seeing is great signals that customers who are attracted to Upwork based on seeing SCM or other campaigns around catalog are Sometimes they convert for catalog and sometimes actually they end up converting to do talent marketplace as their first project. We're also seeing for existing customers in the talent marketplace that they are responding really well to cross-sell promotions and placements we're doing to educate them that now they can also add on with project catalog as an additional way to transact inside the marketplace. So we're actually seeing a lot of great signs that customers are interested in not just adopting one way of upworking, so to speak, but really are excited at the idea that maybe the interest around catalog might get them in the door, but then the better-fitting offering might be talent marketplace or vice versa. And so giving them more ways to operate within our ecosystem is actually unlocking more engagement, more interest, more spend, more marketing channels for us, et cetera. And so while it's still early, and we certainly have a lot more work to do to really tap into the full potential of this offering, the signs are absolutely there that this is additive to the marketplace as a whole.

Terrific. And my follow-up, just wanted to drill a little deeper on the great wallet retention spend metric. What do you attribute that to? Are clients expanding into more categories? Are they just raising the size of their projects? Any additional insight into that would be great. Thank you. Marvin, were you asking about client spend retention? Yes, sorry, yes, that's client spend retention, yes.

Yeah, absolutely. We saw the really quick acceleration from the 102% to 106%, which is the fastest, I think, in the last five years or so, and probably even longer going back before then. And as we've mentioned in the past, one of the dynamics with that metric is that it's fairly lagging in nature. So as the momentum that we've been seeing over the last five quarters or so has built, it's continued to put that upward pressure on the metric. And we think a lot of that comes from both the really strong execution that the team is doing across product and marketing in particular, and also the fundamental changes that are happening in terms of client behaviors where they're understanding the benefits of putting independent talent at the heart of their strategy. And, you know, we're seeing that across, as we mentioned, virtually every dimension. So every category has accelerated. Every tenure of cohort has accelerated in terms of year over year growth. The spend for clients has gone up and the client retention has gone up, which then yields nice benefits from a marketing perspective where that increases the LTV, And we've had great efficiencies from a marketing perspective where we're able to bring down our tax, which then allows us to invest more in our performance marketing dollars. So all around, just a great story.

Great. Thanks, Hayden and Jeff. Congrats on the quarter. Thank you. Thanks.

Our next question coming from the lineup, Nick Jones with Citi. Your line is open. Thank you.

Great. Thanks for taking the questions. I guess first, can you just expand a little bit on the work marketplace announcement today? You know what? Maybe it's not totally clear to me, I guess, on how this will change the experience, I guess, for like a business who's using the platform. So if you could expand a little bit on kind of, you know, what kind of improvement you expect this to add to the experience. And then I have a follow-up. Thanks.

Sure, Nick. So it's really clear from our Q1 results that our current strategy is winning, and we're not changing the strategy that we've been executing on since I became the CEO. But we are launching this work marketplace to really define our category and raise awareness around the breadth of our offering, which really addresses all the ways that clients and freelancers seek to work together on Upwork. And the research that we've done over the last few quarters has made it apparent that that this breadth as a differentiating factor on our platform is not well understood. People too often think that Upwork is only about really small gig projects or only about large complex project work and they don't really understand that they can do both and more on our platform. So it was time to really shine a light on the fact that they can do all of these things on our platform because we understand that there is a big awareness gap in the market that we need to close to reach our full potential and really unlock that full trillion-dollar TAM that we're going after. So building awareness for our category and the solution is really how we plan to become this always-on solution that really is part of the dynamic workforce strategy that companies of every size are utilizing to stay competitive. So it's not shifting our strategy. It's really educating the market around the full breadth and potential that exists on Upwork for them to stay competitive.

Got it. That's helpful. Thank you. And then on SEM and SEO, really great improvement here that, you know, each quarter, you know, how much of this is a function of there's just more impressions, like people are searching the category more versus improved, you know, SEM bid strategies, you know, bidding on the right keywords, Things like that or a little bit of both. I guess I'm trying to understand how much more room there is from here to see continued improvement. Thanks.

Yeah. There's absolutely a benefit from both overall market conditions and significant benefit from bidding strategies back in infrastructure, international expansion, moving into having a broader mobile strategy. and the team has executed incredibly well of rolling all that stuff out at a moment in time where there's more interest and opportunity to capture that demand. And as such, the numbers are, are really great. As, as we mentioned, the client starts from SEM are up over a hundred percent. And while doing that, we were able to bring down our cost per acquisition, meaningfully allowing us to significantly increase our spend. So it's a, It is that combination of really, really strong execution across the team combined with good market conditions.

Great. Thank you.

And as a reminder, ladies and gentlemen, to ask a question, please press star 1 on your touch-tone telephone. And our next question coming from the lineup, Brad Till with Jefferies, your line is open.

Hi, thank you. This is John Bion for Brentel. I had two questions. One on investment in go-to-market. Wondering how you're changing that at all this year, especially toward the enterprise, and whether you had any sales reorg or quota changes. And then on the enterprise clients, just wondering about their behavior, how that has changed now that we're more than a year since the onset of COVID. I mean, Is the way that they're using our product changed meaningfully at all? Any more categories that have emerged? Thank you.

Sure, I'll start. With respect to the sales side and the enterprise side, as you mentioned, maybe take a step back. You asked first about go-to-market. So we've seen an increase in sales marketing spend in line with probably overall revenue growth rates. which was driven by more of an expansion in our marketing spend than our sales spend for all the reasons that we've talked about in the past, which is that we made the changes to our sales force in Q4 of last year and have been rolling those out in the end of Q4 and the first quarter. And the team has done a great job of doing it. It really hasn't been that long since those changes were made and the numbers that Hayden mentioned on the call. we're extremely pleased with. They had a 40% quarter of a quarter improvement in terms of the number of deals that they closed. Sales cycles are shortening. The number of our large spenders is increasing materially. And so we feel good that we've now, we're in a good position with respect to the unit economics at the scale that we're at. And really now we want to turn our attention to how do we scale that in an operationally balanced manner And so we're considering increasing investments there as early as Q3, as Hayden mentioned. And we see a significant opportunity there, just want to be balanced in terms of how we do it. With respect to the second question on overall client behavior, I guess I'd say if I'll start with enterprise client behavior, I'll hit a few tactics and maybe Hayden can add in. Clients, throughout the pandemic, clearly any misconceptions that clients had about their inability to grow and build their businesses with a remote workforce have been fundamentally altered. They now see that this is a way that they can absolutely take their company to the next level and deal with all sorts of dynamics that hardships and rapid expansions impose on their companies. And so during this period, we've seen across the broader business increase in retention rates, increase in spend per clients. And we've seen that across virtually, when you look beyond enterprise, virtually every category of the business. So it's not that it's simply happening in web mobile software development or sales and marketing or design and creative. but really across the board in every category. Anything to add to that?

I'd add, I think the numbers are really reflecting a broader narrative that we're hearing as we talk to CEOs and other executives who are universally just much more open-minded and curious than ever before about finding new solutions to old problems. And the two problems that they have constantly been banging their heads against the wall about are How do they compete in the war for talent and take advantage now of the remote work skills they've gained to compete for talent in this new world of work that they're finding themselves in? And the second old problem they've had that now they're trying to find new solutions for are getting more out of their teams without burning them out. And how do they increase efficiency and agility in their businesses without burning everyone out and kind of getting into a problem there? And so... Those two challenges really converge at Upwork where we offer them access to talent that they absolutely need and a path to augmenting their workforce strategy that is absolutely critical with our work marketplace offering in a way that kind of unlocks all of these things that are problems that they had before the pandemic, problems they're facing today, problems they know they will face going forward even after the pandemic is behind them. So we're having a lot of success right now as evidenced in our numbers with these conversations and with the kind of evolved mindsets of so many executives who are trying to solve these problems with new tools like Upwork.

Very helpful. Thank you.

Our next question coming from the lineup.

Welcome, Thomas, with people. Your line is open.

Hi, Hayden and Jeff. Just a question on the the advertising and marketing around the rebranding campaign. I think the release mentions some broadcast and video spots along with other supporting channels. Are you sharing how much incremental investment you're anticipating to put behind this campaign to the extent that it's worth noting? And is this reflected in the updated EBITDA guidance would assume so but just want to ask and then is there a level of payback on this that investors should be thinking about? Or are we more focused on, you know, awareness and branding at this point?

Great, thanks for the question. So we're not disclosing the amount right now we are looking to, you know, growing our awareness of Upwork of our brand of the value proposition to to our clients and freelancers. is critical. We see a significant opportunity and this is an important way to do that. We're not disclosing the specific numbers. It is obviously reflected in our guidance. We absolutely are staying close to the performance. Clearly, these are not all performance marketing dollars, but we'll be looking at what is the return that we're getting across every dimension that we possibly can and and would love to find opportunities to continue to grow that awareness in doing so in a financially prudent manner. And we'll continue to look for those opportunities in the future, but it is all reflected in both the Q2 and full-year guidance we provide.

Okay, and I appreciate that, Jeff. And one follow-up, if I can. Is that a U.S.-focused program? Will that be U.S.-focused spend, particularly around branding? Are there other kind of key markets you're thinking about and then in hand with that? Could you maybe update us on just how you're thinking about the international strategy, just a general update, but also how you're thinking about gaining market share in some of the large international markets where you might be relatively even less penetrated? Thanks.

Yeah, our focus right now is on the U.S. because we still feel like we have a ton of runway in the U.S. and we're trying to unlock the U.S. market, but we're also doing some global and international advertising as well. Predominantly, places that are English-speaking is a big focus for us because, you know, today that's where our website is focused on kind of still unlocking that opportunity, but we have seen a lot of traction with English-speaking folks globally, even in non-U.S. and non-English-speaking markets traditionally. So our marketing focus is distributed with a heavy focus on the U.S. right now and a lot of runway in other markets over the next couple of years.

Okay. Thanks, Hayley.

Now next question coming from Delana. I'm Joseph with JPM Securities. Your line is open.

Great. Thanks for taking the question. Hi, Hayden. Hi, Jeff. I wanted to ask maybe a little bit more on just two things, really. The growth that you're seeing in GSV, Jeff, can you just talk about revenue visibility as more clients come on, the 2020 cohort spends more, and basically just repeats buying? I know you talked about that earlier on the call, but just any insights on visibility going forward would be helpful. And then on Project Catalog, I know we're early and you had comments earlier on, But maybe, Hayden, it would be great to maybe hear a little bit more about are you seeing any sort of integration between you try out Project Catalog and more users are using other services on Upwork or graduating up to Upwork or anything along those lines between the two services? Thank you.

Sure. Thanks, Ron. I'll start with the revenue visibility question. So as you know, our client spend retention has been historically around 100% and has been trending upwards, which indicates good visibility into what our future performance will be based upon prior cohort spends. And our forecasts are absolutely based at the cohort sort of level. You know, we look at the retention curves of each of those cohorts. We forecast out what sort of acquisition we think will come in. And so we have good, good, confidence in the numbers that we provide, with the caveat around that being that, obviously, these are periods of dramatic change in customer behavior, which introduces new volatility or higher volatility into the forecasting than we otherwise would have. We think all of these changes have great long-term benefits for the business, where customers will be using remote freelancing platforms like ours much more so than they did in the past. and trying to predict what exactly they're going to do in the next quarter can be a bit trickier, but we feel good with our assumptions and the guidance that we have and all that's reflected in the updated guidance.

To your question around project catalog, we're definitely seeing some early signs around those graduation opportunities between existing talent marketplace offerings and people wanting to then go on and buy project catalogs But I'd say it's still really early in the sense that there's so many pathways, Ron, that we haven't even built out yet. So the first phase of Project Catalog has been around building the basics of the experience, building out SEM programs to educate and convert users into those experiences, and that's been kind of phase one. There's still a lot of runway for us to integrate Project Catalog into many more of the existing work marketplace experiences that we have. And so I think we've seen great signals that customers are doing some of that behavior, want to do even more of that behavior, and there's so many touch points between existing experiences and the talent marketplace side, for example, and more of the integration opportunities for Project Catalog. So there's really a ton of runway for us still, and it's been incredible to see the execution by our team in identifying those, building those out, building the roadmap for further integration of those different types of opportunities over time. So I'd say we're still in inning zero or inning one of a really exciting pathway of innovating on that solution. And we've gotten so many exciting ideas as well from customers, both freelancers and clients who are saying, hey, here's how I want to do these things together. Here's how I would love to work across different parts of the work marketplace that you at Upwork have. And I think that's, again, been a really exciting sign for us that we're exactly on the right path and the strategy is being validated, that people really want to participate in multiple of these ways of upworking. It's not about just doing one. So we're building these things as fast as we can to really live into customers' expectations around how they want to do this.

Thanks, guys. Very helpful. Thanks, Ron.

And that's all the time we have for questions today. Ladies and gentlemen, that's our conference for today. Thank you for your participation. You may now disconnect.