BlackBerry Limited

Good afternoon and welcome to the BlackBerry third quarter fiscal year 2023 results conference call. My name is Matt and I will be your conference moderator for today's call. During the presentation, all participants will be in a listen only mode. We will be facilitating a brief question and answer session towards the end of the conference. Should you need assistance during the call, please signal a conference specialist by pressing star zero. As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Tim Foote, Vice President of BlackBerry Investor Relations. Please go ahead.

Thank you, Matt. Good afternoon and welcome to BlackBerry's third quarter fiscal 2023 earnings conference call. With me on the call today are Executive Chair and Chief Executive Officer John Chen and Chief Financial Officer Steve Ray. After I read our cautionary note regarding forward-looking statements, John will provide a business update and Steve will review the financial results. We will then open the call for a brief Q&A session. This call is available to the general public via call-in numbers and via webcast in the investor information section at blackberry.com. A replay will also be available on the blackberry.com website. Some of the statements we'll be making today constitute forward-looking statements and are made pursuant to the safe harbour provisions of applicable US and Canadian securities laws. We'll indicate forward-looking statements by using words such as expect, will, should, model, intend, believe, and similar expressions. Forward-looking statements are based on estimates and assumptions made by the company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the company believes are relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward-looking statements. These factors include the risk factors that are discussed in the company's annual filings and MD&A. You should not place undue reliance on the company's forward-looking statements. Any forward-looking statements are made only as of today and the company has no intention and undertakes no obligation to update or revise any of them, except as required by law. As is customary during the call, John and Steve will reference non-GAAP numbers in their summary of our quarterly results. For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release published earlier today. which is available on the Edgar, Cedar, and BlackBerry.com websites. And with that, I'll turn the call over to John. Thanks, Tim.

Good afternoon, everyone, and thanks for joining the call today. This was a quarter where BlackBerry made good progress based on leading indicators for both the IoT and the cyber businesses. BlackBerry beat expectations for both total company revenue and earnings per share. On the IoT side, we saw the business performing very strongly, setting yet another record for design phase revenues. The strategic decision made over five years ago to position QNX as the trusted foundation for high performance edge compute, especially in auto, is really bearing fruit. On the cyber side, in line of what we said last quarter, we saw an improvement in the level of churn that we experienced recently. The investment being made in product and go-to-market continue to drive sequential buildings growth in our cyber business. Let me start my review with the IoT business unit. As mentioned, there was another strong quarter. Revenue was $51 million, a 19% year-over-year increase. Gross margin was 80%. Pre-production revenue, that is revenue for development seats and professional services, set another record. This strength is being driven by significant new design wins. In fact, in the first six months of this fiscal year, BlackBerry added more new royalty backlog than in any prior 12 months period. And that momentum continued this past quarter with wins in a number of verticals, but particularly in the safety-critical auto ADAS, advanced driver assist, and digital carpet domain, where we are significantly gaining market share. The largest win in the quarter includes a win with Aptiv to use the QNX hypervisor and RTOS to power a digital cockpit for European OEM. Other auto wins include a design with Daimler truck, an instrument cluster design win with T01 supplier Morelli, for a leading Japanese automaker and a design with a leading Chinese tier one supplier for an ADAS driver assist module. In the quarter, we secure a total of 24 new design wins with nine in auto and 15 in the general embedded market or GEM. In GEM, we secure design wins within medical, industrial, as well as defense and aerospace. Among the use cases was an autopilot flight-controlled system, a naval combat system, and a retinal surgery robotics, to name just a few. Looking forward, we continue to see a very strong pipeline of upcoming new designs. We believe that we're in a strong position to convert this opportunity into wins, given our recent success rate, our very strong reputation in the market, and of course, the strength of our technology. The industry-wide macro backdrop for auto remains mixed. We see strength in China and India, both significant markets for QNX. On the flip side, we see some tightening in North America and Europe, primarily due to ongoing supply chain and some demand challenges. However, it is important to give this some context. While production volume is an important factor in QNX total revenue, The auto industry's significant shift to the software-defined vehicle and the development program that drives this has enabled us to deliver double-digit revenue growth. This quarter, we made a major product announcement for QNX in the cloud. At the Amazon reInvent conference, AWS announced that QNX will be made available to system developers via their cloud-native virtual engineering workbench. Being able to assess QNX in a cloud greatly reduced the time to market for developers and provide significant addition market reach for BlackBerry. QNX will be accessible by AWS large and growing community of over a million developers across multiple verticals, not just auto. We have very positive feedback from both this demonstration and early SS product make available to selected OEMs and tier ones. We expect to provide more details on the general availability at CES. Moving now to a new and exciting use cases for our CertiCom technology. In the quarter, we deliver a electric vehicle charging station PKI public key infrastructure solution for a leading North America automotive OEM. The solution enables the vehicle and EV charging stations to identify and establish trusted connectivity, as well as allowing OEM to meet the new international standard for secure vehicle-to-grid interfaces. This capability opens a significant opportunity for BlackBerry to secure critical smart city infrastructure in the future. Given the strength of the IoT business, going into Q4, we expect revenue to come in at the high end of the range we provided previously. We are therefore now expected our full-year revenue outlook to be in a range of $205 million to $210 million, which translates to 15% to 18% year-on-year growth. Let me now move to IVY, proof-of-concept trials with customers continuing to progress well. Product development also remained on track with the latest version released last week as planned. We have some significant product demonstration of Ivy this past quarter. Last month at the Bosch Connected World in Berlin, the Ivy platform was running in a Peugeot car and enabling predictive maintenance in car payments and Amazon Alexa virtual assistant applications. Ivy was also shown operating in a cloud at the AWS reInvent conference in Las Vegas, and a developer workshop held there were well attended by OEM and tier ones. Feedback from both events was very positive. We also added a new application from Roadside Telematics to the Ivy ecosystem this quarter. Roadside Telematics is a California-based startup aiming to use sensor data from BlackBerry Ivy to provide automatic notification to 911 emergency service in the event of a crash. Let me now turn to our cybersecurity business. Revenue for the quarter was $106 million. On the sequential basis, billing increased for the second consecutive quarter to $103 million. Gross margin was 57%. AR was $313 million. The dollar-based net retention rate was 84%. In line with our comment last quarter, we see signs that investment in product and people are starting to pay off. The rate of churn seen recently has improved this quarter with an uptick in renewal rates and with it, an improved quarter-over-quarter change in ARR. Turning now a bit to the macro environment. We've seen the same as many other software companies, including those in cybersecurity, in noticing some elongation of sales cycles during the past quarters. Therefore, it is likely that the macro environment will be a headwind for the business in the near term, although we're likely to fare better than most given our heavy skew towards regulated customers, particularly government. Furthermore, cybersecurity still remains an essential purchase. Touching briefly on the OEM market specifically, this past quarter, industry analysts noted increased adoption of UEM solution in regulated environment. In the quarter, despite the macro challenges, we secure a great number of multi-year transactions empiriously. This includes both renewals and account expansions. The customer includes some of those with the highest security needs anywhere in the world, such as multiple agencies in the US Department of Homeland Security, the U.S. Defense Intelligence Agency, and the National Guard. Also, the U.S. Missile Defense Agency, the Pan-European Missile System Company, MBDA, as well as the NATO headquarter, will also approve our BlackBerry Secure Voice solution for official NATO communications. Also, within government, with Shared Service Canada, the U.S. Department of Justice, the FBI, the U.S. Department of Treasury, as well as the U.S. Department of Energy. Outside of North America, we secured business with the Australian Federal Court, the Government of Iceland, the Government of Wales, the Scottish Police, and the German Ministry of Home Affairs. In financial services, we did business with Bank of China, Credit Agricole, Blackstone Investment Management, Singapore DBS Bank, German KFW Bank, as well as the German Federal State Bank. Finally, I'll mention that we continue to win in other verticals too, with examples including Johnson & Johnson, a leading law firm, Sullivan & Cromwell, as well as Swiss and ABB, a leading electric equipment manufacturer. Some of you will hopefully have joined us for our Security Summit at the New York Stock Exchange in October. During the event, we announced the launch of a cyber threat intelligent subscription services that will provide customer with tailored threat briefings. This service will launch in January and the initial response has been positive, particularly from the government agencies. Turning to Outlook, we expect to see improvement in both customer churn and new logo acquisition continuing next quarter. We are not changing our outlook for fiber revenue and billings, but as previously mentioned, Q4 outlooks include some large potential government deals that the team is working hard to close. As always, with larger deal of this nature, timing can be predictable. However, regardless of whether we're able to close these deal in time for Q4 or if they slip in Q1, we expect to deliver a sequential billings growth in a quarter. This would mean sequential billing grows for the third quarter in a row. What's more, we currently expect to see the value of billings in Q4 exceeding revenue. This is a strong leading indicator, and we expect a return to ARR growth in the second half of next fiscal year. Let me now move to licensing. Revenue in the quarter came in higher than expected at $12 million. Gross margin was 67%. In the quarter, we recognized revenue related to royalties from past licensing deals, and they came in stronger than expected. Let me now turn the call over to Steve, who will provide more details on our financials.

Thank you, John. As usual, my comments on our financial performance for the third quarter will be in non-GAAP terms unless otherwise noted. Total company revenue for the quarter was $169 million, Total company gross margin was 64%. Operating expenses for the third quarter were $137 million. These non-GAAP operating expenses exclude $56 million fair value gain on the convertible debentures, $22 million in amortization of acquired intangibles, and $8 million in stock compensation expense. BlackBerry remains in a targeted investment mode. meaning our capital allocation strategy is for aggressive investment in our IoT business to capitalize on the strong opportunities we see in front of us there and for strategic investments in our cybersecurity business to drive both top line growth as well as deliver profitability. These investments are discretionary and can be eased back if required. This strategy is starting to pay off with IoT winning record levels of new designs and the trajectory of the cyber business improving. Given these investments, we continue to expect manageable EPS loss and cash usage in the near term. The GAAP operating loss for the third quarter was $2 million, and the non-GAAP operating loss was $28 million. Now turning to the balance sheet and cash flow. Total cash, cash equivalents, and investments were $505 million at November 30, 2022, Free cash usage in the quarter before accounting for the settlement of a prior legal case was $22 million. That concludes my comments and I'll turn the call back to John.

Okay. Thank you, Steve. Before we open up the line for Q&A, let me recap on the key messages. We are pleased with the progress made. Sorry. Because I think Steve had missed a few points in his notes. Anyway, we appreciate the progress made by both our core business units this quarter. The IoT business unit continues to deliver strong 19% year-over-year revenue growth, despite a macro headwind. The cybersecurity business unit trajectory is progressing with improved level of churn and increased in multi-year deals as well as new logos. And finally, a quick update on the IP patent portfolio sale. As we said before, there are two main interested parties. I'm pleased to say that tremendous progress has been made with both of them. Catapult, who you know, now has a motivated financing partners lineup and all parties are currently negotiating the final documents. The second party is a large PE firm that doesn't need external financing. They have completed their due diligence and term sheets discussion are well advanced. We obviously will keep you updated as things progress. That concludes my remark. Matt, could you please open the line for Q&A?

Thank you. We will now begin the question and answer session. To ask a question, please press star 1 on your telephone keypad. Please make sure your line is unmuted. Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We request that you limit yourself to one question and one follow-up. And our first question will come from Luke Young with Baird. Please go ahead.

Hi.

Good afternoon. Thanks for taking the question. A couple of questions related to the IoT business. First, John, if you could get any additional color on the subcomponents of your auto software business and IoT. Specifically, if there's anything you'd be able to add on the pre-production parts of that business, of course, but also be interested in any commentary on royalty trends looking forward and how that might lay out over the next few quarters or into next year in terms of launch activity. that you're going to want to cite to in that business. Thank you.

It didn't come across clearly.

Luke? Yeah, so this is Luke from BED. Breaking down IoT revenue, we've obviously said that the pre-production piece is at record levels. Any other comments? I'm guessing around royalties.

Oh, I could tell you a typical year, a typical quarter or year actually, Our general guideline is about 40% of our revenue coming from royalty, 40% coming from developers, seats, as well, professionals. And then, sorry, and then 20% come from more, come from services. That's kind of our rule of thumb. It didn't come across very clear on the microphone.

So, Luke, sorry about that. So, if you could... Perhaps the question, Luke, if I can rephrase is... Is there any color on royalties given the strength that we've seen in design phase, the pre-production phase?

Well, I mean, royalty is pretty much tied to production. The industry auto production, basically, we're proportionally about the same, meaning that we expect what, 85 million cars being built this year. So it's a little, probably about 10, 15% down from previous pre-COVID years. So that gives you some guideline of what the royalty is like.

I'll just leave it there, given the bad connection, and take it offline. Thank you.

Our next question will come from Mike Walkley with Canaccord Genuity. Please go ahead.

Hi, Mike.

Hey, John. Just maybe a follow-up on the IoT question, just based on some of the record level you're seeing for the design phase revenue and particularly in ADAS, as these cars go into production in future years, how should investors think about maybe the magnitude of a royalty per car versus the current infotainment system today?

Yeah. Yeah, that's a good question. So the ARPU, which is you asking basically the ARPU questions, our targeted ARPU remains to be $25 a car. And of course, we're quite a big distance from it. However, if you look at the infotainment world, the infotainment world is now down to probably $1 to $2 a car. But on the other hand, ADAS is probably pushing high single-digit dollars, $8, $9. $7, $8, $9. So that's how, and any newer features, you know, cockpit, clusters, you know, vehicle-to-vehicle communications and stuff, they all have reasonable dollar amount tied to it. Certainly, you know, a factor about the infotainment.

Great. That's helpful. And My follow-up question just on the cybersecurity business and more maybe the endpoint and competitive landscape. I know there's share for silence to gain from like the max season trend micro, but there's several next generation competitors that are pretty price aggressive and they're also talking about elongated deal cycles. So could you kind of update us on what you're seeing and what's giving you that confidence to return to ARR growth in the second half of next year?

Yeah, we have a pretty elaborate model and spreadsheets between the cyber business units and the finance organization of the company. And it looks like that, you know, returning to ARR second half of next year is quite real. I mean, ARR growth, sorry, the over year ARR growth of second half of next year, probably pretty stable in the first half. And that's obviously based on the pipeline we have today. Um, you know, we factor in a little bit of the push out, uh, and, and then of course the renewal of some, you know, the government contract. One, one of our challenges is, um, we have so many government contracts and they typically buy on an annual basis, uh, because that's all the budgets they have. And they, they can only, they, they can only spend what, what they have approved budgets on. Um, so. So that's one thing that we face. But on the other hand, the good news in there is that the government customers are quite steady and stable, and their buying patterns are pretty steady also. Great. Thanks.

Maybe one last question, and I'll pass the line. John, just your thoughts on the macro environment heading into next year. You guys have ample cash on the balance sheet, and if you end up selling the licensing businesses should have more cash on the balance sheet. But as you look into a challenging macro, how are you guys thinking about balancing investment for growth versus preserving free cash flow?

Good questions. Where we are right now, and you listen to what Steve had outlined, we are in a kind of a very careful investment mode. In IoT, we are definitely investing and hiring. We are winning A lot of the deals, I wouldn't say all the deals, but a majority of the deals, particularly in the ADAS world and the cockpit world and the hypervisor world. So we believe the momentum, you know, the kind of the tailwind is there for us and we wanted to capture it. So we will be hiring engineers, we'll be hiring professional services people, we're expanding our sales force, our pilot programs and everything else. On the cyber side, John Giammatteo is balancing the growth of the AR and the billings, balancing that with the profitability. So the growth will, the investment there will still be there, but probably be a little slower and with an eye to the bottom line, given the uncertainty of the macro, as you pointed out. So it's kind of a little bit of a tale of two city here. One is just keep growing because we got the momentum. And the other one is we want to do a more balancing, more guarded growth.

Great. That makes sense. Thanks for taking my questions and happy holidays to everybody on the call.

Yes. Thank you. Same to you.

Our next question will come from Todd Coupland with CIBC. Please go ahead. Hi, Todd.

Hey there, John. Good evening.

Can you hear me okay? Okay.

Yeah. All right. Uh, sounds like, uh, the CIBC, uh, uh, internet mic is, uh, is working fine. Um, I wanted to, um, to ask you, um, um, about first on, first on the cyber business. So you're basically saying flat year on year in the first half with some growth in the, in the, in the second half. Um, How much more work is needed to bring the updated sales team and whatever other new product bundles you're contemplating to actually get to those ranges that you're talking about?

I think we are net growing the sales force, meaning that sales force size is increasing modestly. Um, and so, um, we don't have to have any mysterious program or, well, a very aggressive program of some sort in order to achieve what I just said. Um, I think, you know, we, we all feel pretty comfortable and the cyber business unit feel comfortable. They'd be able, they'd be able to be frat-ish. in the first half. Only reason that is fresh, by the way, as a reminder, we were expecting growth in the past for the first half. It's because of the so-called elongating sales cycle. So we expect it to be fresh for six months and then pick up again. And that's really a lot more macro driven rather than us having to do some special things. So By and large, I mean, we have a roadmap of technology, but none of the stuff that I talk about, depending on a particular product, think the products are in pretty good shape. We do need to continue to drive the channel, continue to increase the professional services, particularly the MSP. I think those are the two things that needs to happen, but it's part of our plan to make happen anyway. So nothing really special.

That's helpful. And then I had a question on, I guess, the movements on the balance sheet. So I think in the past, the price for the patent licensing business was $600 million. Does that potentially change if the second party comes in? Like if they get into the mix here, is the takeaway that you're going to get to $600 or possibly higher? Or is it just they get there first and they can close the deal. What's the message on that?

Yeah, I'm sorry. I shouldn't comment on it. I know the questions and I understand. Of course, I have the answer. But it's been unfair to both parties while we're negotiating in parallel. So if you don't mind, just hold off on that until we make the announcement. I'm expecting the announcement or the conclusion of this relatively soon. I see.

But the takeaway is that the confidence level with the second party has gone up from the last time we talked about this, where financing was in question to where it's the probability of getting that 600 million has gone up materially with that. And then the other, the initial party getting financing. Yeah.

Again, I can't go into the structure, but the initial party, the confidence level had, you're right, had dramatically gone up.

Okay. Should we take away, given the delay and the two parties here, that the structure that was announced before is potentially open to some adjustments?

Very minor.

I see. Okay. Okay. And then just one follow-up balance sheet question. One of the debentures is due in about a year. Any messaging on paying it down versus refinancing at this point?

I think we're going to pay it down.

The message is pay that down? Okay. All right. Great. Thanks very much.

Our next question will come from Tripp Chowdhury with Global Equities Research. Please go ahead. Hi, Tripp.

Hello, this is still a very good quarter considering the backdrop. Two questions I have. Whenever we are in a recession, the federal government usually opens up their budgets, the budgets increase to offset collapse of the economy. Have you seen any federal government agency or across the globe who may have at least not reduce their budgets and maybe thinking of increasing their budgets yet, or you haven't seen anything like that so far?

Well, it's a mixed bag, Trip. So as far as cyber investment, I have not seen government back away from it, particularly the government that we deal with, which is probably about G7, G25, depending on the level that we're at. Five-eye country, for example. So, no, we have not seen the budget being cut or reduced in IT spending and cyber spending. So that's good news. There are some very selected pockets. NATO spending a little bit more. Germany spending a lot more from an IT defense point of view. And Canadian government... also spend more in supporting Ukraine, for example. So U.S., the money are there a little bit more driven towards the more social program. So it's kind of a, I can't give you a yes or no answer. It kind of depends on the various government that we're keeping very close staff with. But on an overall scale, I haven't seen the government reduce their IT budget yet.

very good second question as we are seeing a lot of new vehicles coming into the market and each one of them have at least two or three features one either the screens are really very big in the vehicle or they have multiple screens do you think that changes the royalty stream for you like if a vehicle say just three years four years back only had one tiny screen Now, on an average, there are three or four screens, front entertainment, rear seat entertainment, overhead entertainment, you name it, video conferencing, just that. Do you think there is a potential to increase some royalties because of the multi-screen approach that is new, at least EV manufacturers are bringing to the market? And that's all for me. Happy holidays to all of you.

Thank you, Triv. Happy holidays to you, too. I don't believe, I mean, I don't know. Multi-screen will bring me more copies. However, there is a trend in software-defined vehicle, either for redundancy purposes or multi-MPU purposes, particularly as the capacity requirement goes up, they are using more copies of QNX.

Very good.

So it is more of an architectural point rather than a display point.

I got it. I got it. I got it. Very nice. And then from the same token, I think if we go from 5G to 6G, the royalty stream, because of more use cases and more QNX copies and redundancy and resiliency, we may directionally see per vehicle royalties to directionally go up rather than go down.

Oh, yeah, I don't see. I mean, there are two points to it. Number one, we have not seen the royalty of QNX going to go down anytime soon. In fact, more copy expected per car and the revenue should have gone, should go up. In addition to that, don't forget we have IV behind it, which are when the capacity goes up, you know, our usage of IV also goes up. So, Wait till that get into production. And I'm hopeful that that will bring us also a good revenue stream.

Excellent. Excellent. Thank you very much. We look forward to seeing you all at the CES conference.

Thank you.

Our next question will come from Paul Treiber with RBC Capital Markets. Please go ahead.

Hi, Paul. Hi there, John. Just hoping you can speak to on a cyber business, the mechanics around NDR, you know, which declined sequentially versus your comment on improved churn. You know, can you speak to some of the moving parts there and then specifically, can you, can you break out churn or the trends there in terms of UEM versus EPP?

Good, good, good question. So In general, as we have indicated in the beginning of the year, the churn is coming from the UEM-based small-medium enterprise. We have seen that as a consistent scheme, consistent theme, but that has slowed down now quite a bit. At least the last quarter, we have seen the slowing. In fact, we are seeing... the bigger deal going a little bit more multi-year with us. I think UEM is now definitely stabilized. It's also being viewed more strategic by the market. And Gartner actually recently wrote a note on it. And we are seeing the same thing. Customers are starting to see to treat UEM rather than a price item. It's now starting to look at it a little bit more strategically, particularly on the cybersecurity side as a factor of the cybersecurity. The last quarter, something has happened that causes the infrastructure, mobile infrastructures management and endpoint management to be relooked at in importance. You probably know this, obviously. A number of banks in the United States has been fined for using messaging technology that are not the most secure or archivable. I think that forces all the bank CIOs starting to look at the completeness of their infrastructure. So obviously the UEM is a technology that been around for a long time. This is not just Blackberry UEM, other established player UEM also, obviously. So I'm answering your question in a kind of a long roundabout way. The churn, slowdown, still kind of contained within the SMB and the UEM space. And as I said, we see a slowdown. We haven't seen it anywhere else. We definitely have not seen it on EPP. EPP seems to be holding its own.

It's helpful to understand that. Just on your point about the settlement with the banks, I mean, does it seem like when you look at banking or regulated industries, it seems like there's a shift away from bring your own device to corporate-owned devices. Do you see that in other industries other than just banking? And then how do you see that, relatively speaking, helping BlackBerry from a product positioning or from a competitive position?

So when the banks go to corporate issued, they are typically looking at high level of security and archivability, and that's where our strain comes in. So we're known to be the most secure mobile platform that exists. And I think there's not a lot of debates over that in the industry. So that helped us a lot. And as far as I'm seeing in the industry, maybe different government branches and law enforcement, I have not seen other major verticals that go to corporate issue device or at least swing back from a BYOD to a corporate issue devices.

Okay. Thank you for taking the questions and happy holidays.

I would like to turn the call back over to John Chen, Executive Chair and CEO of BlackBerry, for closing remarks.

Okay. Well, thank you. Thank you, operator. As we pointed out, BlackBerry will be at CES in Las Vegas, where we'll have a number of exciting announcements and demonstrations by our IoT business, including the IV running in a Jeep Cherokee. On the 5th of January, BlackBerry will be co-hosting a Software-Defined Vehicle Award with MotorTran, a leading auto industry analyst. In fact, if you guys want to get in there, I don't know whether we could, we have tickets, but please contact him. There's a big event on the fifth evening in Vegas. The award recognized those who have made outstanding contributions to the automotive industry through software. I know there has been a 1919 award. So, The following day, by the way, which is the 6th, at 1 p.m. Pacific time, we will be hosting a hybrid investor Q&A session with management at the booth. This event will be streamed, and investors will be able to hear details about the exciting new developments. Please make sure you register for the stream on blackberry.com slash investor webpage. Thank you all again for joining today's call, especially those of you on the East Coast, where I know it's getting late. I hope all of you and family have a happy and safe holidays, and see you next year.

This concludes today's call. Thank you for your participation. You may now disconnect.