Earnings Call Transcript - BHE Q3 2022

Operator, Operator

Good afternoon, everyone, and welcome to the Benchmark Electronics Incorporated Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Paul Mansky, Investor Relations and Corporate Development. Sir, please go ahead.

Paul Mansky, Investor Relations and Corporate Development

Thank you, Jamie, and thanks everyone for joining us today for Benchmark's third quarter fiscal year 2022 earnings call. Joining me this afternoon are Jeff Benck, CEO and President; and Roop Lakkaraju, CFO. After the market closed today, we issued an earnings release highlighting our financial performance for the third quarter of 2022 and we have prepared a presentation that we’ll reference on this call. The press release and presentation are available online under the Investor Relations section of our website at www.bench.com. This call is being webcast live and a replay will be available online following the call. The company has provided a reconciliation of our GAAP to non-GAAP measures in the earnings release as well as in the appendix of the presentation. Please take a moment to review the forward-looking statements advice on Slide 2 in the presentation. During our call, we will discuss forward-looking information. As a reminder, any of today's remarks that are not statements of historical fact are forward-looking statements, which involve risks and uncertainties, as described in our press release and SEC filings. Actual results may differ materially from these statements, Benchmark undertakes no obligation to update any forward-looking statements. For today's call, Jeff will begin by covering a summary of our third quarter results. Roop will then discuss our detailed financial results, including a cash and balance sheet summary and our fourth quarter 2022 guidance. Jeff will then return to provide more insight on sector demand trends, which we'll be discussing in more detail at our November 8, Investor and Analyst Day event. If you'll please turn to Slide 3, I will turn the call over to Jeff Benck, CEO.

Jeff Benck, CEO

Thank you, Paul. Good afternoon, and thanks to everyone for joining our call today. Hopefully, by now, you've seen our press release and the results for the third quarter 2022, which represented continued execution of our revenue and earnings growth strategy. Revenue of $772 million was up nearly $200 million versus the same quarter last year, with five of our six sectors delivering greater than 35% growth. I'm particularly pleased with our performance in advanced computing, next generation communications, and industrial sectors. At the same time, we again delivered earnings growth greater than revenue with non-GAAP earnings up 46% year-over-year and $0.05 above the midpoint of our guidance. As we said before, Benchmark is clearly benefiting from two key drivers. Our success in capturing new wins over the last several years, which are now ramping in the marketplace, and our existing customer success addressing high growth markets with their innovative products. Roop will share more details on our third quarter results in a minute. Turning to the fourth quarter. We continue to see robust demand across the majority of our market sectors. The midpoint of our guidance positions us to achieve full year revenue growth of around 30% and earnings of $2.11, which would represent year-over-year earnings growth of greater than 55%. We're encouraged by improvements we're seeing in supply chain availability and many commodity areas. However, we still see constraints in some semiconductor families, which continues to limit our production output. I'm proud of the great job our team has done working through these challenges to deliver the results we've provided to you today. We look forward to sharing with you more details on the continued execution of our strategy and longer-term financial targets during our upcoming Analyst Day on November 8 at the NYSE. With that, Roop over to you.

Roop Lakkaraju, CFO

Thank you, Jeff, and good afternoon. Please turn to Slide 5 for our revenue by market sector. Total Benchmark revenue was $772 million in Q3, which is 6% higher sequentially and 35% higher year-over-year. Medical revenues for the third quarter were flat sequentially and increased 41% year-over-year due to growth with existing customers and new program ramps. Semi-Cap revenues increased 7% sequentially and increased 39% year-over-year. Demand levels throughout 2022 have remained high for complex precision machining and large electromechanical assembly services. A&D revenues for the third quarter decreased 4% sequentially and 14% year-over-year due to supply chain constraints with certain programs. Industrials revenue for the third quarter was down 2% sequentially due to material constraints and up 44% year-over-year from demand improvements from energy-related products building infrastructure and LiDAR solutions. Turning to our traditional markets. We continue to focus on higher value subsectors within compute and telco that of high-performance computing and next-generation networking respectively. Computing was up 38% sequentially and 67% year-over-year from the ramp-up of high-performance computing programs. In the telco sector, revenues were up 20% sequentially and 52% year-over-year from continued demand strength and new ramps for broadband infrastructure. In the third quarter, our top 10 customers represented 53% of sales. Please turn to Slide 6. Our GAAP earnings per share for the quarter was $0.53, which represents 130% growth on a year-over-year basis. Our GAAP results included restructuring and other one-time costs totaling $1.3 million related to the closure of our previously announced site in Moorpark, California, and other smaller restructuring activities through our global network. For Q3, our non-GAAP gross margin of 8.6% inclusive of supply chain premiums improved 50 basis points sequentially due to higher revenue, better absorption, and a reduction in supply chain premiums. Our SG&A was $38.7 million, up sequentially due primarily to higher variable compensation and continued investment in IT infrastructure. Non-GAAP operating margin was 3.6%; excluding the impact of supply chain premiums, our operating margin is 4%. In Q3 2022, our non-GAAP effective tax rate was 19.4%, which is as forecasted. Non-GAAP EPS was $0.57 for the quarter, which is $0.05 higher than the midpoint of our Q3 guidance and 14% higher sequentially. Please turn to Slide 7. We have shown the effects of supply chain premiums on a trended basis over the last seven quarters on the slide for comparison. In Q3 2022, we incurred approximately $74 million. Sequentially, this number decreased by $17 million, but on a year-over-year basis increased $48 million due to the challenging supply chain environment. The magnitude of these premiums are temporary in nature, and as the supply chain environment requires fewer premiums to be paid, this cost recovery revenue will decrease. Excluding supply chain premiums, our revenue in the third quarter of 2022 is $698 million, a sequential increase of $61 million or 10% growth and a year-over-year increase of $152 million or 28% growth. As discussed, gross and operating margins are diluted by this pass-through revenue, while gross profit, operating profit, and EPS are unaffected. Please turn to Slide 8. Non-GAAP ROIC in the third quarter was 9.8%, a 20 basis point increase sequentially and a 200 basis point improvement year-over-year. In the period between Q1 2021 to Q3 2022, ROIC has grown by 53% as a result of 53% revenue growth and 137% operating income growth. Turning to Slide 9 to review our cash conversion cycle performance. Our cash conversion cycle days were 79 in the third quarter compared to 77 days in Q2, with the increase primarily due to higher inventory days offset by higher customer advanced deposit base. Our customer advanced deposits grew $38 million sequentially or 22% higher. Please turn to Slide 10 for an update on liquidity and capital resources. We used $31 million of cash in operations and invested $10 million in CapEx. We expect to spend $45 million to $55 million on CapEx in 2022. In Q4, we anticipate generating $15 million to $25 million of cash flow from operations as we consume inventory. As a reminder, the majority of our inventory primarily consists of raw components to support our growing EMS demand. In fiscal year 2023, we expect to generate positive cash flow from operations and free cash flow. Our cash balance was $249 million at September 30. As of September 30, we had $131 million outstanding on our term loan, $170 million outstanding borrowings against our revolver, and had $280 million available on our revolver. Turning to Slide 11 to review our capital allocation activity. In Q3, we paid cash dividends of $5.8 million. As of September 30, we had approximately $155 million remaining in our existing share repurchase authorization. We will evaluate share repurchases opportunistically while considering market conditions in the fourth quarter of 2022. Please turn to Slide 12 for review our fourth quarter 2022 guidance. We expect revenue to range from $760 million to $800 million, which at the midpoint represents a 23% year-over-year growth. The revenue range comprehends supply chain premiums of approximately $55 million. We expect that our gross margin will be between 9% to 9.2% for Q4 due to strong revenue growth and continued improving absorption. SG&A will range between $37.8 million and $40.8 million or approximately $39 million at the midpoint. Implied in our guidance is a 4.1% non-GAAP operating margin for modeling purposes. The guidance provided does exclude the impact of amortization of tangible assets and estimated restructuring and other costs. We expect to incur restructuring and other non-recurring costs in Q4 of approximately $800,000 to $1 million. The costs relate to continued activities associated with previously announced site closures. Our non-GAAP diluted earnings per share is expected to be in the range of $0.58 to $0.62 or a midpoint of $0.60. Other expenses net is expected to be $5.4 million, which is primarily interest expense. We expect that for Q4, our non-GAAP effective tax rate will be between 18% and 20%. The expected weighted average shares for Q4 are approximately $35.4 million. Finally, from a cash flow perspective, we anticipate generating positive cash from operations in the period. And with that, I'll turn the call back to you, Jeff.

Jeff Benck, CEO

Thanks, Roop. Please turn to Slide 14. Before I go into our sector outlook, I wanted to highlight some wins we secured in the September quarter. Once again, we saw good balance across our focus sectors, reflecting the diversity of complex projects that we take on to help customers navigate through the product lifecycle and accelerate time to market to realize their product vision. In Semi-Cap, we continue to grow existing customers while adding new customers into the portfolio. This past quarter, we secured new manufacturing and engineering wins for wafer surface conditioning, advanced process control, and automated vacuum cure tools. Reflecting on our diversification, I'd like to highlight a recent press release regarding our expanding partnership with Yield Engineering Systems, where we are helping them transfer the manufacturing of their flagship product line to Malaysia, as well as providing engineering and manufacturing support for an upcoming wet process system in the Phoenix area. 2022 has been a great year for new program awards in the Semi-Cap space and we look forward to converting those to revenue in 2023 and beyond. In Medical, we continue to be awarded critical medical device and life science programs with the addition of manufacturing programs for a novel ophthalmology ultrasound system that's designed for imaging and biometry of the eye. We also received a manufacturing award for a new automatic external defibrillator. Finally, our medical design team won a project for a unique cardiology treatment platform. In Industrials, sustainability is at the core of our initiatives and we extend that focus to customers who share that vision, particularly in the areas of clean energy, energy efficiency, and automation. In the past quarter, we won a manufacturing program for a power inverter going into an advanced energy storage system. We also extended our relationship with an existing customer who focuses on solutions that accelerate electrification, where we will manufacture industrial drives, power, and control systems. Within engineering, we're partnering with an innovative company to help design autonomous mobile robots for the healthcare, hospitality, and manufacturing industries. In the A&D sector, within aviation, we are also seeing new win momentum for a new program where we are designing communication systems for the emerging commercial drone or UAV market. Within defense, we also saw solid growth in the quarter, recording manufacturing wins for aviation radar, artillery pilot controls, and high-speed RF next-generation radars. In advanced computing and communications, wins include LTE/5G smart coverage solutions and a high-volume fully automated manufacturing win for RF filters. Expanding on our HPC business, we won an additional project with a longtime existing computing OEM. Now turning to Slide 15. I'll provide some color on expected demand trends by sector for the fourth quarter. As mentioned, we are cognizant of the recession risk and inflation's potential impact on the broader economy. However, we believe the transformation work we accomplished over the last few years has provided us with greater diversity and stability. Coupled with the minimal exposure to consumer-centric markets, demand indicators across the majority of our sectors remain robust in Q4 and into 2023. In Semi-Cap, revenues have grown double-digit year-on-year for 12 consecutive quarters. While we expect Q4 to again grow double-digits year-on-year, industry demand is expected to soften in the near future due to memory market weakness, new China restrictions, and supply constraint rebalancing. Thankfully, the strength in new program wins and diversification of our customer base will enable us to help offset this industry-level weakness. Longer term, we remain bullish on the sector given our customer win momentum, strong secular drivers related to semiconductor proliferation, and the investment in new domestic manufacturing aided in part by the CHIPS Act. In our Medical sector, we again delivered strong growth with Q3 improving 41% year-over-year. We certainly could have shipped more, but it is one of our most supply chain impacted sectors with long qualification cycles required and redesigns to provide alternative component selection that limited our ability to meet upside. We expect Q4 performance to be similar to Q3 sequentially with strong double-digit year-on-year growth. In Industrials, September quarter revenue grew over 40% versus the prior year, demonstrating another strong performance. For Q4, we expect Industrial to be consistent with September quarter. We see a good balance between demand for existing products such as test and measurement devices, and new program ramps in advanced LiDAR applications, energy management systems, and industrial robotics as growth catalysts over the next several quarters. Moving to the A&D sector outlook. Q3 performance was in line with our expectations, as supply chain challenges continue to be acutely felt in this sector. As our recent design wins begin to ramp in the coming quarters, we expect further recovery next year. Within telco, the September quarter once again performed well, with 20% sequential and greater than 50% annual growth reported in the period. We continue to be encouraged by the growth prospects supported by ramping broadband infrastructure wins and government programs aimed to enable broadband from anywhere. Finally, in advanced computing, we continue to help build some of the largest and most sophisticated high-performance computing systems in the world, including the current effort underway on a new supercomputer platform that will contribute to the next few quarters' performance in this sector. Let's now turn to Slide 16. Back in the fall of 2020, we laid out our midterm model for the company, which we committed to achieving by the time we exit 2022. We've made steady progress on these goals and excluding the effect of pass-through revenue associated with supply chain premiums, I'm pleased to say we met or exceeded each of our targets in Q3. Furthermore, at the midpoint of guidance for Q4, we are poised to exceed our targets for the full year. This would include revenue growth excluding premiums of greater than 20% with non-GAAP gross margin of 9.6% at the high end of our target range. Operating expense is well within the range, and non-GAAP operating margin of 3.9% for the year is above the high end of the range. If we were to exclude stock-based compensation like many of our peers, our non-GAAP operating margin for the year is expected to be greater than 4.5%. In summary, if you turn to Slide 17, demand among our target sectors continues to be robust, and we are helped by our diversified strategic focus. Our strategy to pick leading companies and partner with them on their innovative products is paying off, positioning us to potentially deliver 56% non-GAAP earnings growth in 2022. Looking forward to 2023, we believe this strategy, our portfolio, and continued pipeline of new customer wins positions us to grow faster than the market. We look forward to sharing more with you at our Analyst Day in a couple of weeks. With that, I'll now turn the call over to the operator to conduct our Q&A session.

Operator, Operator

Ladies and gentlemen, at this time we will begin the Q&A session. Please follow operator instructions. And our first question today comes from Jaeson Schmidt from Lake Street. Please go ahead with your question.

Jaeson Schmidt, Analyst

Hey, guys. Thanks for taking my questions. Jeff, just want to follow-up on your commentary on the Semi-Cap space. I know you do expect an eventual softening just given the dynamics you outlined. But just curious if you guys are already seeing signs of things slowing down a bit?

Jeff Benck, CEO

Yeah. Thanks, Jaeson. Good to have you on the call and thanks for the question. Of course, we've seen a lot of the announcements by not only customers but others in the space about the predicted trend towards reduced front-end wafer fab equipment spending next year. We're not immune to that. We certainly see it. But we also had a really strong year of new wins in 2022. In fact, I'd rate it as one of the top two sectors for new wins. Many of those will start contributing in ‘23 and beyond to the continued revenue there. Additionally, we have been diversifying across our customer base, which helps overcome downward pressure. That being said, our fourth quarter guidance is strong and as we look into next year, we feel well positioned to keep doing well in that segment. However, we do not anticipate the kinds of growth rates we have previously seen because the overall industry seems a little softer and more uncertain. Some of that is related to the memory side. I will mention that we're somewhat higher biased toward logic, so we tend to work more on logic tools. Although we do have some memory-related business, but that's how we view the situation. We're still optimistic regarding the long-term secular trends and believe the investments we've made will yield significant dividends, particularly over the next few years.

Jaeson Schmidt, Analyst

Okay. That's helpful. And I know Jeff, when you joined, a big initiative was to really focus on providing engineering design services besides just manufacturing. I know you guys don't break out kind of your wins based on those categories anymore. But how much of the growth recently do you think is attributed to expanding your services for your customers beyond just the underlying demand trends?

Jeff Benck, CEO

One thing we track, Jaeson, is the attach rate of wins to EMS opportunities to ensure we are not just doing manufacturing, but also how we help build or engineer a test system or assist with product design. I'm pleased to report that in the third quarter, we saw over a 75% attach rate to those deals. So there’s a strong contribution there. As you've noticed, our overall business is growing quite rapidly. So while I won't say that engineering is outpacing growth, both segments are expanding and contributing to the total number. We haven't typically broken it out because engineering is still a small part of the total, but it certainly aids in our success and why clients choose us, as we can be more of a one-stop shop and assist them at any point in the product lifecycle. We're putting more energy into product realization, taking concepts and helping them through design or potentially redesigns to free up alternative parts to assist with supply chain challenges or delivering end-to-end solutions. We feel optimistic about our engineering business, but the current growth trajectory means we must continue to expand our capabilities.

Jaeson Schmidt, Analyst

Got it. And then just the last one from me and I'll jump back into the queue. How should we think about your traditional markets, specifically computing and telco? I know you've made a strategic focus on certain programs here. And obviously, 2022 has seen significant growth from a standpoint. However, do you view this growth as reflective more of the underlying demand trends or is this more indicative of your team's greater focus on right programs? I'm just trying to gauge the sustainability of these two segments.

Jeff Benck, CEO

We're going to elaborate more on this during the Analyst Day, but let me give you a preview. We have narrowed our focus on advanced computing to high-performance computing platforms. We are building some of the largest and most sophisticated boards, addressing complex cooling systems and intricate compute mechanisms. From a margin perspective, the value-added in this area is significant; it does not resemble the traditional commodity compute business. Similarly, if you look at telco, we are involved in next-generation networking infrastructure. Rather than building set-top boxes, we focus on sophisticated RF infrastructure. While traditional markets may be a larger part of the total revenue this quarter, this doesn’t concern us as we are no longer enduring the margin drag associated with low-margin compute projects, as we have opted not to renew those contracts. We’ve restructured our priorities, ensuring we are targeting the right programs and fostering sustainability. We may adjust the way we communicate this evolution in the upcoming year, but we are indeed securing the right programs and believe that the growth is sustainable.

Jaeson Schmidt, Analyst

Okay. That's helpful. Thanks a lot, guys.

Roop Lakkaraju, CFO

Thanks, Jaeson.

Operator, Operator

Our next question comes from Steven Fox from Fox Advisors. Please go ahead with your question.

Steven Fox, Analyst

Hi. Good afternoon. First question I had was on the supply chain. I'm just looking at the numbers you provided in terms of the premiums and margins, etc. It looks like maybe the supply chain was a little incrementally tougher for you guys. I'm not sure if I'm reading that right, but can you just dig into how compared to last quarter? And anything that you would call out as easing versus how tough it's going to be into next year? And then I had a follow-up.

Jeff Benck, CEO

Yeah, Steve. Thanks for the question. I'll start out on that. Supply chain premiums came in lower sequentially than the second quarter, which we were happy about. They were also slightly higher than what we initially forecasted. This really speaks to the continued constraints in certain areas of the market. We're seeing improvements in various categories, but some constraints remain. It's important to note that these supply chain premiums are not broad-based across our entire portfolio; rather, they are limited to a few customers in select sectors. However, I wouldn’t say supply chain issues are more severe than what we faced in Q2. In fact, I’m pleased with the progress we’ve made in facilitating revenue growth and shipping the products we have. While we’ve seen improvements in several categories of components, memory is more readily available now, likely due to softness in consumer demand. Nonetheless, there are still critical semiconductors that are gating our production output and preventing us from completing critical builds. We hope to see continued improvement, but we anticipate that these constraints will persist even through the fourth quarter.

Steven Fox, Analyst

Great. That's really helpful. And then just back on the Semi-Cap market for you guys. Given the CHIP curves put in place by the Biden administration, is there any near-term impact that we should see related to who you're building for, and how does this affect you directly or indirectly this quarter or next quarter?

Jeff Benck, CEO

Regarding the Biden CHIPS Act, I think you will not see a significant impact this quarter or next. There’s a lag effect in terms of the appropriation of funds. For us, we support the semiconductor capital equipment that once construction on these sites is finished, these entities will need wafer fab equipment to produce semiconductors. Hence, the benefits from the CHIPS Act will not be recognized until later. That said, we continue to win new contracts related to next-generation tools, and we are involved across a broad spectrum of technologies in the sector. While some customers may face impacts due to memory market fluctuations, those working on advanced semiconductor technologies aren’t facing weakness, and our business there continues to be strong.

Steven Fox, Analyst

That's helpful. I guess what I was also trying to get at was the near-term impact of U.S. semiconductor companies being instructed to halt servicing Chinese customers. Is that something that could adversely affect you in the near term, especially in the fourth quarter?

Jeff Benck, CEO

That's a good question, and the recent restrictions by the U.S. are quite broad-reaching and sudden. Many of our OEM partners are assessing the implications, including licensing requirements. There is potential for near-term risks, even as we head into the fourth quarter, which we contemplated in our guidance. However, the diversity of our portfolio mitigates some of this risk. It is crucial to note that we do not manufacture our semiconductor equipment in China, hence that aspect does not pose a risk for us. The primary concern remains if customer demand shifts due to these restrictions.

Steven Fox, Analyst

Great. That's all super helpful. Thank you.

Jeff Benck, CEO

Sure.

Operator, Operator

Our next question comes from Jim Ricchiuti from Needham and Company. Please go ahead with your question.

Unidentified Participant, Analyst

Hi. Good afternoon. This is actually Chris on for Jim. In the previous quarter, you had mentioned that approximately $200 million of demand was unfulfilled. How is this trending? Is that dollar amount rolling over quarter-to-quarter? Are you finding that the demand is waiting in the queue as it gets pushed out? Thank you.

Jeff Benck, CEO

So Chris, good to have you on the call. From an unfulfilled demand standpoint, we are still seeing more than $200 million in unfulfilled demand. We have experienced some movement within this amount, so it isn’t the same demand as before. We have fulfilled some prior orders while also replenishing our demand. As we move forward, we anticipate that easing supply chain challenges and constraints will support fulfilling this unfulfilled demand and this condition is considered in our Q4 outlook and our projections for 2023 as well.

Roop Lakkaraju, CFO

One thing, Chris, is that it's been surprisingly durable in the sense that if an order has not been fulfilled, we haven't lost much. I would say a small percentage has been perishable, and we saw that in the prior quarters. As we continue to grow revenue and fulfill more products, we will gradually reduce that unfulfilled demand. However, we haven’t seen a significant loss in those orders. So it carries forward quite well, and we don’t anticipate any changes to this trend.

Unidentified Participant, Analyst

Got it. Very helpful. Are you seeing any signs that consumer softness in the broader economy is improving availability of components like semiconductors on your end? And how much of the inventory is connected with products that are substantially complete but waiting on a critical component like a semiconductor?

Jeff Benck, CEO

Let me address that, and then I'll let Roop provide details about the inventory. That is a good question, and we should clarify this. We are seeing some improvements such as in memory components. The decline in consumer electronics has freed up some capacity, which may help us. However, there’s a caveat: much of what we do is higher mix and lower volume, often involving unique components customized for specific applications. So while there are benefits from broader trends, it's not a perfect one-for-one situation where excess supply can be readily utilized in our production. Therefore, while a few areas are improving, our overall supply challenges remain.

Roop Lakkaraju, CFO

Chris, to touch on the inventory question, let’s consider our overall inventory structure. The majority consists of raw components supporting our EMS sector. Currently, we have a minimal amount in WIP. If we can build it, the customers desire it, and they want it quickly. Our inventory is more about raw materials, and we’re waiting for a few critical components to satisfy the tentative demand.

Unidentified Participant, Analyst

Got it. Thank you very much. In the event of a mild recession, how would you expect that environment to impact the trend of OEMs outsourcing their manufacturing?

Jeff Benck, CEO

In previous downturns, OEMs tend to evaluate their operations closely. They ask whether they are managing efficiently and whether they need all their headcount. This has typically resulted in an uptick in outsourcing during recessionary periods. Critically, more than half of the A&D and medical markets remain unoutsourced, showcasing a significant opportunity for future growth in outsourcing. In contrast, sectors like compute and telco are already predominantly outsourced. Therefore, we believe a recession might further drive interest in outsourcing as OEMs seek more cost-effective production models.

Roop Lakkaraju, CFO

Additionally, as companies struggle to attract talent, OEMs must assess whether they can find skilled workers internally or if they should partner with outsourcing firms. This trend drives the focus on outsourcing for both engineering and manufacturing.

Unidentified Participant, Analyst

Got it. Thanks very much, and congrats on the results this quarter.

Jeff Benck, CEO

Thanks, Chris.

Roop Lakkaraju, CFO

Thanks.

Operator, Operator

Ladies and gentlemen, with that, we will conclude today's question-and-answer session. I'd like to turn the floor back over to Paul Mansky for any closing remarks.

Paul Mansky, Investor Relations and Corporate Development

Thank you, Jamie, and thank you, everyone, for participating in Benchmark's third quarter 2022 earnings call. Before we go, I'd like to remind listeners of a couple of upcoming events. As mentioned previously, we'll be hosting an Investor and Analyst Day at the NYSE on November 8. We'll be back in New York on December 6 and 7, attending the Raymond James Technology Investor Conference, followed by the Sidoti Virtual Small Cap Conference on December 8. Then in January, we look forward to attending the 25th Annual Needham Growth Conference taking place from the 10th through the 12th. With that, thank you again for joining us today, and we look forward to seeing you at one or more events in the coming weeks and months.

Operator, Operator

And ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.