HUYA Inc.

Hello, ladies and gentlemen. Thank you for standing by for the 2020 Third Quarter Earnings Conference Call for Huya Inc. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I'll now turn the call over to Ms. Dana Chen, Company Investor Relations. Please go ahead.

Hello, everyone, and welcome to Huya's 2020 Third Quarter Earnings Conference Call. The company's financial and operational results were issued earlier today and are posted online. You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website in a few hours. Participants on today's call will be Mr. Long Jie Dong, Chief Executive Officer of Huya, and Ms. Catherine Liu, Chief Financial Officer. Management will begin with prepared remarks and the call will conclude with a Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Security Litigation Reform Act of 1995, forward-looking statements involving hearing risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as well as the U.S. SEC. The company does not assume any obligation to update any forward-looking statements except as required under accessible law. So please also note that we have earnings fresh release and this conference call includes discussions of unnotated gap financial information as well as unnotated non-gap financial measures. where press release contains the reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our CEO, Mr. Longjie Dong. Please go ahead.

Hello, everyone. Thank you for joining our conference call today. We achieved solid results this quarter, and excitingly, the investments we have made in content, products, and the services are continuing to drive the growth of Huya's businesses and user communities. In Q3, our total revenues grew by 24% year-over-year to RMB 2.8 billion, while our gross profit increased by 53% year-over-year to RMB 621 million. keeping us in a strong position to fund our future growth and capture the opportunities ahead. Despite a relatively shorter summer vacation period due to the impact of COVID-19 in China, the average MAUs of Huya life still grew to 173 million in Q3, a net addition of over 4 million from last quarter and up 18% year-over-year. Additionally, an average of over 25 million users each month during the quarter watched Huya's livestreaming content across Tencent and other third-party platforms, nearly double last quarter. All together, we provided our compelling content to close to an average of 200 million users every month in Q3. The growth was mostly driven by the increase in esports tournaments, as well as a deeper cooperation with Tencent. Our live streaming content was broadcasted in Tencent, whereas products such as QQ Mobile, WeGame, WeChat, Game Center, and LOL Game. Specifically, our live streaming content related to the QQ Celebrity All-Star Tournament attracted a large number of users to watch in QQ Mobile. Our mobile MLs of real life reached 74 percent, a million in Q3, representing a year-over-year growth of 16 percent, but slightly lower than last quarter because of the relatively shorter summer vacation period and a higher base for the first half of the year due to the impact of COVID-19. Our Wuya Live app's next month retention rate continuously stabilized at over 70% in Q3. Our success in delivering solid financial results and continuous user growth underscores our capabilities in driven monetization and user engagement. Our thriving community reflects our team's continuous efforts, along with deeper cooperation with Tencent, to enrich content and make our products and services more innovative and attractive, delivering even greater value to ensure a supervised user experience. In September, we upgraded our VR live app to the 8.0 version, featuring novel functions such as live events, instant playback, on-the-fly video clip generation and sharing, smart AI assistance, and a real-time monitoring panel. functions, users are allowed to choose any specific time interval within a live streaming event to replay. Mark the eSports event highlights and generate video clips from live streams to share with friends. Furthermore, there is a smart assistant on top of the app featuring AI-enabled interactions to enhance user viewing experience. Meanwhile, our technology cooperation with Tencent also allowed us to create a real-time monitoring panel for esports tournament broadcasting. With this new panel, our hardcore viewers could obtain more information on the tournament and better analyze the game playing status. We believe these upgrades represent an exciting opportunity to innovate, provide new experience for our users, and grow our user base. In October, we formed a joint lab with the intent to carry out joint technology efforts in various fields, such as AI security applications. irregular activity detection, data security, and data annotation. We believe we can work together to improve AI-driven compliance on the platform and improve the health of the industry. Since we launched our open platform for third-party application developers, in November last year, we have empowered a growing number of third-party developers to develop tools to be used in Huya's products, mainly to improve interactions between broadcasters and users. It's been almost a year now, and we are glad that there have been around 160 tools developed and over 300,000 broadcasters have used these tools by end of Q3. We are confident our open platform will develop the interactions between broadcasters and the users with innovative and dynamic features. During the most recent LOL Awards, 2020, that was concluded end of October, we introduced new features and functions to help make the S10 broadcasting on Huya more innovative, immersive, and game-integrated. In addition to our upgraded 8.0 app, we also provide users high performance definition and latency-free viewing experience in 4K. We introduced a virtual broadcaster fully to interact with real-person broadcasters and viewers to improve experience. We also launched a Tencent-supported S10 live viewer passport. Having this viewer Passport, users of Huya will be able to gain awarded badges, game accessory items, or game skins within LOL once they have completed certain engagement activities during tournament viewing on Huya, such as sending bullet checks, virtual gifting, or viewing time. Lastly, I would like to share some of my thoughts on the ongoing merger with Douyu. On October 12, 2020, we announced with Douyu that we are entered into a merger agreement where we plan to acquire all the outstanding shares of Douyu through a stock-for-stock merger. Once the merger is effective, each ordinary share of Douyu will be exchanged for 7.3 class A ordinary shares of Huya, and each Douyu ADS will be exchanged for 0.73 Huya ADS. If the merger is completed, the shareholders of Huya and Douyu will each hold approximately 50% of the shares of the combined company on a fully diluted basis. Concurrent with the merger, Douyu will buy Tangian Esports from Tencent for $500 million. We believe the potential by nation will allow us to build on our complementary strengths, achieve significant synergies, and create more value. By joining together with Douyu and Kenji's professional team, we are solidifying our dedication to the pursuit of constructing a comprehensive online guest for game and esports-related content. With that, I will now turn the call over to our CFO, Katherine, to share her insights on the operating metrics and the financial details. Katherine, please go ahead.

Thank you, Mr. Dong, and hello, everyone. Following Mr. Dong's remarks, I will start from the updates on content enrichment and diversification. In Q3, we broadcasted 119 third-party esports tournaments, among which the top tournaments included LOL Worlds 2020, LPL 2020 Summer, HOK World Champion Cup, LCK, and KPL Fall 2020. Total viewership for these tournaments reached a historical high of around 785 million. in the third quarter, representing 40% year-over-year growth. On the front of our self-produced content, we organized 34 esports tournaments and entertainment shows and generated a total viewership of 100 million, representing 32% year-over-year growth. Following its success last quarter, we asked Destiny Cup Season 7 maintained its growth momentum and brought in more users than last season. Additionally, Huya All-Star Cup Summer 2020 also performed well and built itself a signature event for Peacekeeper Elite on Huya's platform. On the entertainment PGC show side, Godlike Season 5, a longstanding World of Warcraft game show, All Star Idol Academy, a talent show, and Huya Kung Fu Carnival Season Two, a mixed martial arts competition, were the top performing shows as we continued our dedicated steps in the non-game entertainment content. Talking about the traffic in this quarter, our average MAUs increased by 18% year over year to record high of 173 million. and average mobile MAUs reached over 74 million, representing an increase of 16% year-over-year. The paying users for RealLive increased by 13% year-over-year to 6 million in third quarter, but decreased slightly compared with 6.2 million in the second quarter. The number of our paying users is typically directly associated with the number of our mobile MAUs. The fluctuation in our mobile MAUs this quarter, which was due to the shortened summer vacation period from the COVID-19 impact, resulted in the quarterly fluctuation in our paying users. The live streaming revenue per paying user for Huya Live remained strong and increased both year over year and quarter over quarter. For our overseas business, we achieved over 30 million MAUs in the third quarter. the better the expected growth was mostly because we introduced more esports tournaments, attracted more broadcasters, and deepened our relationship with local game developers. Next, I will walk you through our financial highlights. In Q3, our total net revenues grew by 24% year-over-year to over RMB 2.8 billion. Our live streaming revenues increased by 23% year-over-year to close to RMB 2.7 billion in Q3. The growth was primarily due to the increased number of paying users and the increase in revenue per paying user, both of which have expanded. Advertising and other revenues increased by 45% year-over-year to close to RMB 158 million in the third quarter, primarily driven by the increasing and diversifying number of advertisers. Our profitability continued to improve this quarter, given the leverage we have in bandwidth cost and our operational efficiency. Our non-GAAP growth margin improved to 22.7% compared with 18.3% in Q3 2019. Our non-GAAP operating margin was 11.8% compared with 6.5% in Q3 last year. And our non-GAAP net margin was 12.8% compared with 9.1% in Q3 last year. Now let me move on to our financial details. Cost of revenues increased by 18% to RMB 2.2 billion for Q3, primarily attributable to the increase in revenue sharing fees and content costs, as well as personnel-related costs. Revenue sharing fees and content costs increased by 21% to RMB 1.8 billion in the third quarter, primarily due to the increase in revenue sharing fees in relation to higher live streaming revenues and increased spending in content creators, esports, and self-produced content. The year-over-year increase was partially offset by benefits from economies of scale. Bandwidth costs decreased by 1.4% to RMB 208 million for the third quarter, primarily due to improved management in bandwidth costs and continued technology enhancement efforts. Growth profit increased by 53% to RMB 621 million for the third quarter, and growth margin increased to 22% for the third quarter. Research and development expenses increased by 35% to RMB 183 million for the third quarter, mainly attributable to increase the personnel related expenses. Sales and marketing expenses increased by 18% to RMB 144 million for the third quarter. The increase was primarily attributable to the increased marketing expenses in the summer to promote the company's content, product services, and brand name, as well as increased personnel related expenses. General and administrative expenses increased by 23% to RMB 119 million in the third quarter, mainly due to the increased professional fees associated with the company's ongoing merger process with Douyu. Operating income increased by 249% to RMB 223 million for the third quarter, and operating margin increased to 7.9% for the third quarter. Non-GAAP operating income, which excludes share-based compensation expenses, increased by 125% to RMB $331 million for the third quarter. And then the non-GAAP operating margins increased to 11.8%. Income tax expenses increased by 82% to RMB $51 million for the third quarter. Net income attributable to Huya Inc. increased by 105% to RMB 253 million for the third quarter. Non-GAAP net income attributable to Huya Inc., which excludes share-based compensation expenses, increased by 75% to RMB 361 million for Q3. Diluted net income per ADS was RMB 1.05, and non-GAAP diluted net income per ABS was RMB 1.5 in the third quarter. As of September 30, 2020, the company had cash and cash-approval short-term deposits and short-term investments of RMB 10.8 billion. Along with the merger announcement that Mr. Do mentioned earlier, our board of directors also approved a cash dividend in aggregate amount of U.S. dollar 200 million to be paid on or around the date of the closing of the merger to the holders of ordinary shares of Huya, including the holders of ADS, Huya ADS holders. As of the business, as of the close of the business on certain record date after the date when the required Douyu shareholders approval is obtained, and prior to the closing of the merger. Such record date and payment date will be designated by the authorized officer and will be announced in due course. Here's another update that just happened today. We obtained the usage right today to a piece of land with an area of approximately 29,258 square meters in Boshan City, Guangdong Province. through a public auction. The company's winning bid price was approximately RMB $310 million. The company intends to develop office space on the land in order to accommodate future workforce expansion and reduce the long-term operating costs and expenses. With that, I would now like to open the call to your questions.

Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, please press star 1 on your telephone and wait for a name to be announced. To cancel, you can also press the pound or hash key. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. And our first question comes from the line of Thomas Chong of Jefferies. Please go ahead.

晚上好,谢谢管理层接受我的提问。 我的问题主要是关于2021年的展望。 管理层可以分享一下如果是从东呼数收入还有盈利方面呢, 我们对明年的预期大概会是怎么样的? 然後還有就是我們跟騰訊跟鮑魚的血統效應, 從戰略方面也可以分享一下。 Thanks management for taking my questions. My question is more about the 2021 outlook, in particular in terms of the user growth, revenue and profitability trend, as well as how we should think about the synergies with Tencent. If there's any color at this stage, thank you.

Thank you, Thomas. I will answer your questions. Currently, we are still in the process of the ongoing merger, and we expect the merger could be possibly completed in the first half of next year. At this stage, it's still too early for us to tell the quantitative impact of the merger. So, I think, you know, we probably would not be able to give you quantitative measures on this. But for the big direction, we still intend to grow our users and explore new monetization opportunities and grow revenues and also improve our operational efficiencies. In terms of the potential synergies, with Douyu and Penguin, we think there are several directions that could generate synergies such as leveraging our content over a larger user base to attract users and also to develop new products and together explore new monetization opportunities. and also to achieve some operational efficiencies. Thank you.

Thank you.

Thank you for the questions. Next question comes from the line of Vincent Yu of Needham & Co. Please go ahead.

Thank you for taking my question. This question is about the contest strategy. How should we think about who has content strategy going forward, especially after the merger? Will we see a shift from our current gaming plus pen entertainment content offering? Second question is the user's willingness to pay if we're Wondering do we see any change in our top paying user cohorts or for the user cohort in different categories like for gaming and for other entertainment category. Are we seeing any change after like considering the COVID has mostly like only China. 中文說一下就是兩個問題 一個是關於虎牙的這個我們 .

. .

. . Especially with the current situation with the COVID-19 pandemic, what changes do you expect to see?

Thank you. Okay, let me answer the first question. What are our plans for the next year? First, we may need to improve the layout of the game console. In addition to the game live stream, we also hope to make video games, community games, game media, game tools, and so on. This is the whole family of games. The most important thing is video games. We have actually spent a lot of time studying video games and doing preliminary layout. Overall, we think it is relatively promising. . . . . This advantage will be relatively more obvious than before. Although we also know that the gaming live broadcast industry, even if we merge, it is still a very competitive industry. But from the point of view of Huya Douyu, we actually think that next year we hope to be able to integrate the quality content of the two companies. Yes, and then be able to use this quality content and use this merger to increase the size of the audience. Okay, I will translate for Mr. Dong.

Regarding your first question for our content strategy next year, actually there are several respects to talk about. First one is that what we are aiming to do currently is we would like to construct a one-stop shopping concept for building up a gaming content related family bucket. So not only do what we are good at, game live streaming, but also to include game videos, and game community, and game related tools, adding that in total to our content and services offerings bucket. so that viewers and the users can have a one-stop shopping experience on our platform. And secondly, specifically on the video strategy map here, actually we have been doing our own research and road mapping for the video business. And we have confidence that in two years, in the next two years, we will make the user base of our video business to a considerable level. And my last point about the potential combination and its impact onto our content strategy is that actually the two platforms, each of them has a very good pool of content quality. And the content are actually – complimentary to each other as each of us has its own competitive advantages. And in the year of 2021, what we are targeting at is to better consolidate the content offerings on each platform and leverage the quality content to better serve the game developers, the broadcasters, the talent agencies as well as the users, just so that game live streaming can play a better role across the industry value chain. So that's for your first question. Winston, I will answer your second question in terms of paying users. As you can see, in the third quarter, our paying users has increased both year over year and quarter over quarter. I think generally we are soon recovering from after the COVID-19 has went down in China. We will still continue to enrich our content and improve our monetization opportunities to increase our APU. But of course, as you mentioned, different content categories have different APU. And also there is seasonality for our APU. So generally in the first quarter, our APU would be relatively lower due to the spring festival. And in the fourth quarter, typically the APU would be higher given the annual monetization event. Hope I answered your questions.

Thank you. Thank you for the question. Next question will come from the line of Binnie Wong of HSBC. Please go ahead.

Hello. Good evening, management. My question is actually on the overseas, right, overseas users on the Nemo TV. And then if you look at this quarter versus last quarter, you also added 3 million net ad, which I think is actually achieving that 30 million target a quarter earlier than you might expect earlier. So if we look at it this way, what are the things that, or maybe what are some of the strategies or user acquisitions that you have done this quarter to achieve this $30 million level? And also, what are some of the synergies that you might see with W overseas in the future?

Thank you. Okay, let me answer the overseas question. The growth of overseas users, China China China China China China. China. China. China. China. . . . . . And as for the cooperation with Douyu, because to be frank, whether it's Huya or Douyu, we are actually overseas. We are currently relatively early. So I think the cooperation between the two of us is far greater than competition. So I think if we merge, our cooperation with Huya and Douyu overseas will be very smooth.

Okay, thank you.

Okay, I will translate for Mr. Dong. Regarding your first question on the overseas, yeah, it is noticeable that our overseas MAU user growth in this quarter is actually quite outstanding. And as I spoke last time in the earnings call, what we are focusing on in the overseas market this year is to better improve the ecosystem and to cultivate a better monetization model. So as with the last year's strategy, what we are doing this year is for the channel buy to acquire the new users, we are actually cutting down the cost for that. So given that the channel buy has been cutting down, we still achieved considerable user growth for the overseas business. It actually proved that our strategy to build up an ecosystem to be effective. So going forward, what we will strategically focus on is not only just to focus on a substantial user growth blindly, but more focused to build up and construct a healthy ecosystem. It actually has been the third year for us to develop the overseas business and we are starting to get the sense to understand how we can better build up the business in the overseas market. And what we will focus on in future is the more on constructing a healthy ecosystem and also improve the financial status of the overseas business. And regarding your second question for the potential synergies with Douyu's combination, especially on the overseas market, I think right now, whether it's for Douyu or for Huya, the two parties are actually in a very early stage in terms of exploring the overseas market. What we will do more right now is to focus more on the collaboration rather than to compete with each other. So I would believe the potential combination will create synergies in the overseas business as well.

Sorry, may I just ask a very quick follow-up here? If you look at the margin side, right, like how do you see the overseas when at a certain point that it could become more profitable? And longer term at a steady state, how do you see the overseas business margins compared to domestically?

For your question, I think in October we start to see one single country to achieve sort of relatively break even operating margin side. But we think for the entire overseas business, we probably still need to invest for the next few years because different countries have different, I would say, user behaviors. In some countries, the APU or the paying ratio would be higher than the other countries. So we think that in the next few years, it will still be at investment stage, but as Mr. Dong just mentioned, we will be focusing on building the healthy ecosystem in each country by each country. Thank you.

Thank you. Thank you for the questions. Next question comes from the line of Billy Leung of Haitong International. Please go ahead.

Hello, Manager. Thank you for answering my question. I have two questions. The first question is about our original game, Cloud Gaming. Manager, can you share about our Cloud Gaming's recent development? The second question is about the new product we launched. Can you share about the company's recent development? Is there any update you can share? Let me translate it for you. Thank you, management, for taking my questions. I have two questions. The first one is related to our cloud gaming progress. Can management share any color on our latest developments in this part? And the second question is on our relatively new feature service, the Game Companion. Can management share any latest developments here as well? Thank you.

Let me answer Yunyi's question. This Huya cloud system, the background of the whole technology is developed by Huya itself. Yes, I think this may be different from some companies. So, we actually spent a lot of time on the cloud system, such as the delay, how to adapt to the mobile phone, etc. We actually did a lot of optimization and spent a lot of time. Yes, we have been officially online recently. We have more than 100 games currently. We have looked at the data and the experience of the users. I think the results of the current domestic cloud games are still very good. Because it used to be an internal test, we did not do more promotion. I think in the next period of time, we can try to increase the promotion. Um.

Okay, regarding our first question on cloud gaming, actually what we want to highlight here is that the technology platform of this cloud gaming platform, Yoa, is completely developed by our own R&D personnel. And we have been spending a lot of time and great endeavor has been made to reduce the latency and also optimize users' experience while they are playing the PC Portal games on mobile devices through our ULUX cloud gaming platform. Actually, it was only yesterday that we have officially launched this ULUX. cloud gaming platform after almost four months of beta testing and we have been covered as many as 100 hit game titles right now. And what we are trying to achieve is that to optimize users' switching experience, for example viewing angle switching, just so that they can better play the game seamlessly and smoothly through our cloud gaming platform and optimize their user experiences. As I said earlier, before yesterday the cloud gaming platform was only on beta testing which is why we didn't invest much into promoting this cloud gaming platform. But for now, given that it has been officially launched and can be downloaded through many app stores, we will try to better promote the cloud gaming platform and see if the market is ready for the user base to experience this cutting-edge technology to play games. We believe there is a huge opportunity right ahead for this cloud gaming business, and we will take every effort to realize the cloud gaming opportunities for our own business. But in the short term, probably we'll just wait for a little bit of time to see if the users are ready to massively switch their experiences and to try this programming platform to play games. And Kathleen, we'll take your next question. And for your second question regarding game companion businesses, Our Game Companion business is still experiencing fast growth, especially for our APP Xiao Lu Pei Wan. So we think it's relatively a solid growth for the Game Companion business. However, Game Companion business, because the revenue recognition policy is different virtual casino, we are only recognizing net revenues for game companion business. So even though the chart of the game companion business is pretty significant, but then the revenue contribution is still relatively small. But then the, from the accounting perspective, the game companion business has much higher margins than the, virtual gifting from pure GAAP accounting perspective. Okay, hope this answers your question. Next.

Thank you for the question. So our next question comes from the line of, sorry, we have lost the other request. I'll just proceed to take the next questions from Daniel Chen of J.P. Morgan. Please go ahead.

Hey, what's up, what's up, what's up? Uh, I have two questions. The first one is on what do management think are the key opportunities in game streaming and the short video industry in the next two to three years in the product side and also on the monetization side. The second one is on competition. So what's our key competitive advantage against Yes, let me answer this first.

Compared to B2B and fast players, I think B2B's situation is relatively clear. Overall, I think it's basically over with this game live broadcast. So you can see that we think the impact of B2B on Huya Douyu in the game live broadcast should not be very big. Right, this is the first one. The second one is about the speed. Although the speed has been announced recently, but I think what I hope everyone can pay attention to is the data we see internally. In fact, we can see the speed year by year. In fact, the actual impact on the industry is not as big as we thought. But of course we understand that it is very big. So we . . . This will be a little bit more and then like a fast hand, there will be more platform rules. Yes, I think this place may be a big difference. So from this point of view, you see that since the history of Huya, our link between the union and the anchor has always been a advantage of Huya. Yes, we have always been able to work very well with our partners, such as the union. You want to do it, right? You want to do it, right? You want to do it, right? You want to do it, right?

Okay, regarding your question on the competitive landscape using the entrance of Kaishou and Bilibili, I will start with the competition with Bilibili. I think for Bilibili itself, the growth brought by transforming their VTubers to the broadcasters has already come to an end, which is why we think the global impact to the traditional players of the game live streaming industry is quite limited. And facing the competition is quite short. I think from what we have monitored internally, especially on the year-over-year growth, I think their impact to the game live streaming business is also not so big, especially thinking about that, yes, of course, they are huge, but the impact and the relevance is quite different. Here is Huya's point facing this quite short competition. What we are doing right now, especially on the game live streaming side is that we focus more on the content, building up the content library proactively. Well, quite so. The short form business kind of operations are focusing more constructing a community kind of ecosystem that they have their decentralized policies for running the operations. So historically, what we are good at is that Huya has been in a very good alliance with the industry players such as the talent agencies and the broadcasters. And this has been our advantage, especially facing quite short competition. I think we can leverage this kind of collaboration with industry players to better improve the operating efficiency to drive user growth and to improve our monetization capabilities. That's it.

Thank you for the questions. In the interest of time, the last question comes from the line of .

Please go ahead. . I will translate myself. Thanks management for taking my question. My first question is about League of Legends S10. Can you share any... color on traffic engagement to our platform and what's the drag to our growth margin for quarter. And secondly, on regulatory changes in place, especially on live streaming's new rule and impact you can share with us. Thank you.

Thank you, Lei. As to the S-10, we have noticed that the the user bought by S-10 compared to last year has increased, but then the incremental, I think the growth in this year was relatively lower compared to last year. And for S-10, because most of the S-10 was hold in the fourth quarter, So the costs for the S-10 would be mostly recognized in the fourth quarter, which will have some impact on our gross margins compared to the third quarter. And as to your second question in terms of the authorities' policies or guidelines, We are cooperating with the government and we understand some authorities or government are trying to implement new guidelines. We are actively discussing with the government and of course when the actual guideline is going to be issued, we will be cooperating and be in compliance with the guidelines. So we think if the guidelines is going to be issued, then we will then value the impact of the business at that time. But we believe that the government or authorities are trying to help the live broadcasting to better roll in the long term. So we don't think the impact for our business would be long term. Thank you.

Thank you very much. I would like to turn the call back over to the company for closing remarks.

All right. Thank you all for joining our earnings conference call today. And if you have further questions, feel free to reach out to IR at FOIA.com. And we look forward to speaking with you in the next quarter. Thank you. Bye-bye.

Ladies and gentlemen, this concludes this conference call. You may now disconnect your lines. Thank you.