Hello, and welcome to the Vita Coco Company's First Quarter 2024 Earnings Conference Call. My name is Stephen. I'll be coordinating your call today. Following prepared remarks, we will open the call to your questions with instructions to be given at that time. I'd now like to hand the call over to John Mills with ICR.

Thank you, and welcome to the Vita Coco Company First Quarter 2024 Earnings Results Conference Call. Today's call is being recorded. With us are Mr. Mike Kirban, Executive Chairman, Martin Roper, Chief Executive Officer; and Corey Baker, Chief Financial Officer. By now, everyone should have access to the Company's fourth quarter earnings release issued earlier today. This information is available on the Investor Relations section of the Vita Coco Company's website. Certain comments made on this call, including forward-looking statements, which are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a more detailed discussion of the risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Also, during the call, we will use some non-GAAP financial measures as we describe the business performance. The SEC filings as well as the earnings press release and supplementary earnings presentation provide reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures and are available on the website as well. And with that, it is my pleasure to turn the call over to Mike Kirban, our Co-Founder and Executive Chairman.

Thanks, John, and good morning, everyone. Thank you for joining us today to discuss our first quarter 2024 financial results and our commercial plans and improved performance expectations for 2024. I want to start by thanking all of our colleagues across the globe for their continued incredible performance and for their commitment to the Vita Coco Company and to our mission of creating ethical, sustainable better-for-you beverages that uplift our communities and do right by our planet. Our first quarter results reflect that our strategies are working and that our customer relationships are as strong as ever. Our priorities of driving growth in the coconut water category and initiatives to grow our share of the category are visible in the healthy retail scans in our major markets. In the first quarter, according to Circana, the Vita Coco brand grew 9% in the U.S. and in the U.K., the Vita Coco brand grew 16%. In addition to strong branded retail growth, we're experiencing strong growth in private label coconut water volume, which validates our strategy in private label and allows us to play in the value space as well as maintain our dominant position in premium coconut water. Our first quarter net sales were in line with our expectations with the gap of branded shipments to scans due to the timing of promotions and cycling of opportunistic promotional activity in 2023, which Martin will comment on more fully. Our priorities for 2024 remain the same as those we communicated in our year-end results. We aim for our coconut water business to grow volume in line with the category growth of mid- to high single digits, with the continuing transition out of a key private label oil relationship providing a headwind, offsetting expected strong coconut water growth. Our commercial initiatives around Vita Coco Multipacks, Vita Coco Farmers Organic, and Vita Coco Juice continue to perform very well as seen in U.S. Circana scans that we highlighted in our investor deck, which was posted to our Investor Relations website today. We have also invested in growing our core business in the away-from-home channel, which is an underpenetrated area for us. We've recently assembled a larger, more experienced food service team, which we hope will allow us to deliver greater penetration in this channel. I'm excited about the progress we're making in new areas to grow our business over the long term. We recently launched Power Lift in the New York City area and are happy to see it in our local bodegas and to be able to sample and promote it in our home market. This is back to my roots of hustling the streets, and I'm reminded of not only how hard it is, but also how fun it is, and how successful we have been historically with this approach. Our New York team is certainly enjoying building this brand the old-fashioned way. We also recently launched Vita Coco Treats, a delicious and refreshing beverage that is a further exploration of where our brand can go. The launch is initially exclusive to Target, and although it is too early to tell what velocity will be, we're very excited about the early scan results. While these two initiatives are not expected to be material to our 2024 results, the results to date give us confidence that our innovation approach should help us meet our long-term growth algorithm for branded net sales of mid-teens percentages, building on the long-term health of the coconut water category. Our international business remains healthy with strong performance in Europe, led by the U.K., offset by weaker shipments in Asia as in-market inventory levels were drawn down. We intend to increase our investment in Europe, particularly in Germany and the Benelux region to gain share of the category there and to help expand the category growth, which is still in its early stages of development. On top of the strong business performance, we just released our third impact report, which we believe does a terrific job of laying out where we are and what we are focused on from the sustainability and social impact perspective. I'm really happy that we are maintaining our momentum, and with the creation of the Vita Coco Community Foundation announced last week, we will be able to solicit support from our customers and suppliers to potentially further our efforts in these areas. Twenty years after launching Vita Coco, coconut water remains one of the fastest-growing beverage categories, both in the U.S. and the U.K., and Vita Coco is the #1 brand. We are well positioned to lead and grow the category in these markets and to grow our share further through a combination of branded and private label growth, in addition to the opportunities that we see in less developed markets that have populations that match our consumer profile. I believe that we are in a stronger position than we've ever been to accelerate our growth. And now I'll turn the call over to our Chief Executive Officer, Martin Roper.

Thanks, Mike, and good morning, everyone. We are very pleased with our strong start to 2024. We achieved net sales growth of 2% in the first quarter of 2024, driven by both Vita Coco coconut water and private label coconut water growth. This growth was achieved on top of the first quarter in Vita Coco Coconut Water sales growth, which was up 17% reported in 2023, benefiting from some opportunistic brand promotional amounts. Importantly, the net sales results were in line with our expectations when we laid out our full year guidance. Our first quarter gross margins were exceptional, benefiting from lower transportation costs and branded pricing effects where promotional cadence was reduced relative to prior years. Gross margins also benefited from the decline in the importance of the private label oil business, which traditionally operated on significantly lower margins. As expected, our net sales performance was hampered slightly by increased transit times for ocean lanes going around Africa, delayed product arrivals, and servicing strong private label coconut water demand ahead of retailer forecast has been challenging. Both these effects have resulted in lower than optimum inventory levels and less than profitable service lanes. We are working to rebuild our inventory in the market to more normal levels. But given the length of our supply chain, this will not occur until later this year. The strong private label coconut water demand that we are seeing is, we believe, partially driven by the slightly larger price gaps to branded than at this time last year and by consumers shifting to channels with a higher penetration of private label coconut water availability. From a cost perspective, our finished goods are in line with expectations, but we have seen elevated ocean freight rates ahead of 2023 levels, mainly due to the diversion of shipping away from the Gulf. These costs started in ocean shipments early this year but appear to have already peaked and are now in slow decline. The rates we are seeing today remain within the underlying assumptions provided in our guidance. Our current approach to ocean freight is to negotiate spot rates monthly on most routes with limited commitments to longer-term contracts where we need to guarantee capacity on certain lanes. We are prepared to enter into longer-term ocean freight agreements if we see competitive offers. We have entered into new supply contracts and extensions of existing contracts to support our growing capacity needs and our plans for 2025 and are in discussions on potential additional supply as we remain positive about the long-term growth that is in front of us. With that, I will turn the call over to Corey Baker, our Chief Financial Officer.

Thanks, Martin, and good morning, everyone. I will now provide you with some additional details on the first quarter 2024 financial results. I will then discuss the drivers of our improved outlook for the 2024 full fiscal year. For the first quarter of 2024, net sales increased $2 million, or 2% year-over-year, to $112 million, driven by Vita Coco Coconut Water growth of 1% and net sales from private label growth of 6%. On a segment basis, within the Americas, Vita Coco Coconut Water increased net sales by 1% to $70 million, while private label decreased 3% to $24 million as we have started to see the impact of the transition of private label oil. Vita Coco Coconut Water saw a negative 3% volume decline, offset by a 4% net price/mix benefit, while private label increased 4% in volume, which was partially offset by price mix changes driving year-to-date net sales decline of 3%. Our American Vita Coco coconut water scan trends remain very healthy, and we believe our shipments in the quarter reflect the absence of some promotional activity in untracked channels relative to the 2023 same time period, a decrease in DSD inventory levels during the quarter, and timing of shipments to key retailers. For the first quarter 2024, our International segment net sales were up 20%, with Vita Coco coconut water growth of 1%, where strong growth in Europe was partially offset by volume softness in Asia. Private label revenue grew by 93%, which continues to benefit from new business gains at large European retailers. On a quarterly basis, consolidated gross profit was $47 million, up $14 million versus the prior year period. On a percentage basis, gross margins were very strong, 42% in the quarter, an improvement of approximately 1,200 basis points over the 31% reported in Q1 2023. These increases resulted from branded pricing, mix effects within private label products, and decreased global transportation costs. Moving on to operating expenses, first quarter 2024 SG&A costs increased 5% to $28 million, primarily reflecting increased people expenses. Net income attributable to shareholders for the first quarter 2024 was $14 million or $0.24 per diluted share compared to $7 million or $0.12 per diluted share for the prior year. Net income for the quarter benefited from increased gross profit, partially offset by increased SG&A costs, a lower year-on-year impact from unrealized FX derivatives, and higher year-on-year tax expense. Our effective tax rate for the first quarter 2024 was 21%, which was flat to the prior year. First quarter 2024 adjusted EBITDA, our non-GAAP measure, which is defined and reconciled in our press release, was $21 million or 19% of net sales, up from $9 million or 8.2% of net sales in 2023. The increase was primarily due to the gross profit improvements previously discussed. Turning to our balance sheet and cash flow, as of March 31, 2024, we had total cash on hand of $123 million and no debt under our revolving credit facility compared to $133 million of cash and no debt as of December 31, 2023. The decrease in the cash position was due to the net increase of working capital of $20 million and the purchase of treasury shares of $10 million, partially offset by strong net income. Working capital was driven by an $8 million increase in accounts receivable as well as a $4 million decrease in accounts payable and accrued expenses, both are due to the seasonality of customer and vendor payments. Inventory increased by $6 million as the inventory delays, Martin discussed earlier, have resulted in higher inventory in transit to our markets. Based on our year-to-date performance and our confidence in the health of the category and our Vita Coco brand, we are raising our full year guidance. We now expect net sales between $500 million and $510 million, with expected gross margin for the full year of 37% to 39%, delivering adjusted EBITDA of $76 million to $82 million. The guidance reflects our current best assumptions of the marketplace and our global supply chain costs. While we are confident in the underlying strength of our business, we are providing a wider range on EBITDA to reflect some uncertainty on the transportation cost side. We will actively manage our promotional activity to balance our product supply and our pricing, which will allow us to deliver the gross margin guidance while absorbing higher ocean freight costs, which will begin impacting our P&L in Q2. We expect disciplined SG&A spending throughout 2024 with full year SG&A flat to slightly increasing year-on-year. We may adjust our SG&A spending if we see improvements in ocean freight quicker than expected or if we see productive investment opportunities to strengthen the business for the long term. We anticipate our cash balance will remain healthy through the year, allowing us to fund any potential M&A opportunities that emerge, support further share buyback activity, and continue to invest in our business for long-term growth. And with that, I'd like to turn the call back to Martin for his closing remarks.

Thank you, Corey. To close, I'd like to reiterate our confidence in the long-term potential of the Vita Coco company, our ability to build a better beverage platform, and the strength of our Vita Coco brand. We are confident in our ability to navigate the current environment and excited about our key initiatives to drive growth. We have strong brands and a solid balance sheet, and we are well positioned to compete domestically and internationally. Thank you for joining us today and thank you for your interest in the Vita Coco Company. That concludes our first quarter prepared remarks, and we will now take your questions.

Thank you. Our first question comes from the line of Bonnie Herzog of Goldman Sachs.

I had a question on your guidance. You just highlighted some tiny impacts in the quarter on your Vita Coco coconut water. So I guess I wanted to first understand if all of these impacts should unwind in Q2. And then for your full year guidance, what does that imply for Vita Coco water? I think you mentioned you're growing in line with the category or hopefully above. So does your guidance imply high single-digit growth for your branded coconut water for the year?

Yes, Bonnie, great question. Yes, I think we expect the category to grow high single digits, and we would certainly hope that the brand would match category growth very closely. First quarter was challenging with comparisons to last year on branded shipments and sales, largely related to some promotional activity last year that was opportunistic. We had inventory retailers had space, and we took it, which did not reoccur this year. Additionally, it's related to the timing of shipments, as we are in a retailer direct shipment environment, and also, we believe DSD inventory in the U.S. probably was flat to down during the quarter when it typically would build. So a couple of difficult comparisons explain, in our view, the shipment growth number on branded versus the scan growth, which remains very healthy.

Right. So again just to clarify, so that sounds good. So then are you already starting to see that improve, a month into Q2? So you're feeling good about the full year and starting to see shipments more or less match what you're seeing in the scanner data moving forward?

Yes. What I would say is how we've described the update of our guidance, it's based on our year-to-date knowledge.

Okay. All right. And then just maybe a second question from me on gross margins. Obviously, very strong in Q1. And of course, you mentioned Q2 is expected to be dragged by some of the recent increases in ocean freight, et cetera. So curious if you could maybe just provide a little bit more color in terms of the magnitude of the headwind? I mean I'm just trying to think about Q2 in the context of maybe even last year, should we assume gross margins in the second quarter? Will they be below last year's gross margin? Or is it just kind of a step back from the really high margins you saw in Q1?

Yes. Bonnie, it's again hard to call quarter-to-quarter. We updated the full year guidance based on what we expect. Q1 was abnormally high with the combination of low ocean freight and no impact yet from higher branded pricing. So we will see that start to step back in the quarter with the highest ocean freight. But the kind of detail quarter-to-quarter is harder to call. That said, we land in that range for the full year of 37% to 39%.

One moment for our next question.

U.S. retail sales for the coconut water category are up 9%, which is very strong. Any details on what you guys are doing to support this type of growth, increased advertisements? Is it benefiting from all the work you've put into the category already, like introducing multipacks? Or are you guys sourcing share from other hydration options? Just any color you could provide would be helpful.

Yes. I think we've spoken about before, we source from multiple categories, right? And that continues as we source from juice. We source from sports drinks, and we source from enhanced waters pretty equally. That continues. We see that continuing and demand is there. We've talked about the fact that coconut water is really mainstreaming and becoming a mainstream category, and we think that is playing out, and that's what we're seeing happening as the category continues to grow and coconut water continues to be the fastest-growing category in the beverage aisle right now.

Yes. I would also add, I think we're seeing a healthy category in most of the major markets that we play in. So the U.K. is growing. We see growth happening from a smaller base in other countries in Europe. So there's certainly, from our perspective, something going on globally in coconut water in mature economies. So that's ongoing. Obviously, our goal is to gain share and to accelerate that growth, and that's how we invest our money. We're very focused on driving new trials, educating consumers, and creating new occasions to sort of both increase household penetration and also increase buying rates. I think all of those efforts show up in our household data as the results we want or showing up there, right: increased household consumption rates. So, we're just going to keep driving that. And hopefully, that maintains this great momentum.

One moment for our next question.

I wanted to first ask about some of the flex on marketing because I think if I think about the biggest driver of incremental sales, it probably has to come from increased communication of use occasions. And it sounds like the extended shipping times and the lower inventory levels maybe limit what you guys can do on the incremental ad spend. Should we think about getting inventories refilled first before you can turn up the volume a little bit more on advertising?

Yes. Demand is there. And right now, it's about building inventory.

Yes, Jim, as we think about the full year, we're going to modulate both on price and promotional cadence, certainly, maybe a little bit of marketing spend on channels that directly generate demand, right, like maybe the e-commerce channels and stuff like that, based on the inventory we have available, either promoting items we have in stock or pulling back a little bit, but that is something we're monitoring closely. Our expectation is that our supply constraints ease sort of towards the middle end of the year, but this is something we're watching closely.

Okay. Great. And then if I can ask you a question on private label. You guys mentioned you see some consumer shift into retail formats that have more private label coconut water. Do you have a sense if those are existing coconut water consumers that are just buying private label in a format with your private label? Or are they shopping in a value concept, but they're actually new to the private label category as a whole? In that case, when economic conditions normalize, that might be an opportunity to get a trade-up from private label into branded?

I think our belief is that those channels where you're typically buying a multipack tend to lend themselves to consumers who are already familiar with the category because it's a multipack purchase. We certainly believe that you can trade consumers up from private label to branded. We look at that as an opportunity, and we think we monitor the price gaps carefully. Long term, we believe it's indicative of the health of the category. Private label in our shipments has sort of helped by both our inventory position relative to other suppliers and the addition of new accounts, particularly on the international side that are generating very strong growth. We certainly recognize that private label volume growth is ahead of branded growth, partially because it's operating at slightly lower price points than this time last year, but it's very healthy. We view it as part of a very healthy category, and we're very happy we're playing in both sides of it.

Yes. I was just going to add some consumers are coming into the category. So the category is increasing households and the brand is increasing households. They're coming through multiple channels, but it's the underlying health of the category that's supporting the growth of both branded and private label.

I appreciate it. I'll hop back in the queue.

One moment for our next question.

My question was just on the multipack rollout. I wanted to hear maybe some context from you guys on performance so far, whether that's been meeting expectations. We're seeing some good trends in the Circana measured channel data, but I wanted to hear from you guys how the multipack rollout has been and any distribution gains to come this year and next regarding that.

Yes. I think we're very happy with the progress of the multipacks and the impact both on our business and our share, given that we're one of the few brands that offers multipacks in food and mass. We've seen, obviously, very good wins. Those wins at the size of those wins are sort of laid out in the investor deck. I think it's fair to say that we hope for more distribution this year, although some of the retail sectors are a little delayed. So it's a little unclear when that's going to be delivered, but we're optimistic that the velocity of those items and the profitability of those items for retailers justify closing the ACV gaps we have on those items relative to our singles. So we're going to keep hammering away at that. We've presented that we do expect some wins as the resets happen; it's just too early to know exactly when those are going to get completed.

One moment for our next question.

I want to circle back on multipacks. A quick question here. The absolute contribution in the quarter for your slides was a little bit less than the run rate last year. Wondering were multipacks in particular as part of the broader picture impacted by some of the promotional timing and inventory issues that you spoke about. And then on the private label side, you've spoken in the past about private label as being a door opener for your branded business. We're probably coming on a year now of pretty robust private label growth. And just wondering what you're seeing in terms of if private label is helping unlock some branded customers?

Yes. On the multipack question, I think we're happy with the trends and the contribution of multipacks to our business. We certainly have some supply challenges on a couple of the multipacks, which is probably limiting retail execution. We alluded to, I think, on the call that we moved the major distributor incentive out of Q1 to later in the year. That would reduce the retail execution and promotional activity that might help the scan numbers. So when you look at the scan numbers, we're not worried in any shape or form. It reflects all of these things and is indicative of a healthy category; we think a very healthy brand. As Corey mentioned, all the household numbers we have showed good year-on-year trends. As it relates to private label, our private label business is very healthy. We've gained accounts that have opened doors for us, mostly in the European markets, and we're making good progress with our brand in those markets, too. I think our remarks touched on Germany being an exciting opportunity beyond just the U.K. Each of these markets is at different stages of coconut water development. The U.K. is potentially ahead of where Germany, France, and Spain are. But our private label business for us in Mainland Europe is opening some doors and the branded sales trends are encouraging.

One moment for our next question.

Just wanted to follow up on the juice cans. That at least in convenience, the ACV build has been a little bit slower than we might have expected. Can you just give a sense of what some of the challenges are there? And is there a way for it to break through? Or what should we expect looking ahead a little bit?

So I think as we've said before, building distribution and convenience is a long, slow, hard game. We launched nationally last year and made good progress. However, some of that distribution doesn't stick for reasons that may be related to quality distribution or other factors, leading to a bit of churn. The fact that it's still growing is a positive for us, certainly impacted a little by the distributor incentives that I previously mentioned because we didn't have a big push. But the actual scan data is very, very healthy. Juice cans are up 34% in the quarter, indicating velocity is starting to build, and that gives us a lot of confidence. We're going to keep pushing, but it’s going to be a long, slow build.

No, that's helpful color. And just one more back on multipacks. We see the breakdown on Slide 9, which is really helpful of what drove growth. But some of that, obviously, in this quarter had some promo shifts or different things that might have impacted it. Can you just give a sense from an incrementality perspective, the consumer behavior on multipacks; it seems like it's driving more occasions? Is it that simple? How does the consumer interact with it? You've got the base business obviously holding up, but where do multipacks go from here in terms of the sustainability of the kind of growth that it's been doing?

Yes. I think generally, it's a larger purchase, and therefore, it sits within the more high-volume coconut water consumers. It provides them a better shopping experience plus a value opportunity because there is a slight discount. When we launched them, the discount was much bigger than it is today, but we've been able to close that and still maintain these velocities. We think it helps grow the category and have more coconut water in people's homes because there’s less chance of being out. It's all positive. We've talked about before that it's probably a two-year plan to close all the distribution gaps; with some of the delays in resets, it might now take three years, but we'll see how that goes this summer. We feel very good about it. Our read on it from a supply planning perspective is we need to expand our ability to produce them. So we're working hard on that.

Over time, there will be new multipacks coming into the system, also different formats and different flavors. These types of things will continue to build. One other thing on behavior: we believe it is bringing more product into the home, which is increasing the number of users in each home for the many different occasions that we continue to educate consumers on for using coconut.

One moment for our next question.

I was wondering if you could provide a bit more color on the private label price gaps kind of versus your branded products and how you've seen that change. You've talked a bit about that earlier on the call, but I was wondering if you could provide more color on the quantum there and how you plan to respond, if at all.

Sure. What we've said historically is that private label pricing tends to track COGS costs, right? And so it swings as costs move, and there's a lag on that. So I think when we look at where we are today, current private label to branded price gap seems to us to be appropriate and pretty much mirrors where they were pre-COVID. We think we're back to a more normalized price gap situation. You may remember during COVID, we did not move the branded pricing much, but the private label COGS would have moved quite a bit. We think we're back to normal. We're still lapping a period from last year, and the gaps were a little tighter. We expect that by the end of Q2 or Q3, we'll start to normalize in the year-on-year comparison. Some of the growth of private label is that, but it's also due to channel shifting and the fact that we've gained accounts. It's a combination of all things. In total, we expect long-term private label and branded to grow at pretty similar rates.

As a reminder, our next question comes from the line of Eric Des Lauriers of Craig-Hallum Capital Group.

First for me, on ocean freight. Could you comment on your mix of spot versus futures contracts for shipments here? And then maybe how you expect that to evolve for the rest of the year? Also related, I think last call you talked about increasing supply that's coming from Brazil. Obviously, that's a longer-term initiative with Brazil being where ocean freights are least expensive for you guys to the U.S. Could you just provide some commentary on how that process is going? Maybe quantify that impact for us?

Sure. On the ocean freight side, our position regarding coverage on contracts remains pretty much what it was last time we spoke. We have not entered into what we would regard as long-term ocean freight contracts, which we typically think about at 12 months. We continue to operate on the spot market. But as we talked about last time, it does not necessarily reflect what you're seeing on the index; we're basically in a situation where month by month, we are communicating with carriers to say, 'Hey, we have 200 containers to go from A to B, what's your price?' and we're bidding them off against each other. This has resulted in rates that are below what are recorded spots and competitive for us. We have entered into shorter-term arrangements on certain lanes where we need to guarantee capacity, particularly at ports. However, we remain under-contracted on a forward basis because long-term proposals have looked unreasonable given what we think overall pricing will be over the next 12 months. We still believe we are in an overcapacity situation and that we are better operating as we are rather than committing to long-term contracts at higher rates. As for increasing supply from Brazil or elsewhere, our objective is to expand our supply in all regions. You might see that we announced deals in the Philippines over the last few weeks to expand supply there, and we're looking at new supply partnerships in other regions to prepare for continued demand.

And as for increasing supply from Brazil or anywhere, our objective is to expand our supply in all regions.

That's helpful. And then just last question for me on innovation and new use occasions. You mentioned the exclusive new drink at Target. Is this something that you expect to remain exclusive with Target? Might this expand to other retailers or channels? Should we see something similar to this partnership with Target elsewhere? Additionally, touching on the usage occasion of coconut water as an alcohol mixer, you partnered with Diageo last year. Can you comment on plans for this year regarding that partnership?

Yes. So we are really excited about the initial results of Vita Coco Treats, but it's early. We're looking at a new occasion for consumers, essentially using a coconut milk beverage as a kind of mid-afternoon treat. Initial scan results at Target are great and probably better than we anticipated. We are excited about looking at it and continuing to expand it over time. As for Vita Coco as a cocktail mixer, that's something we've been working on for two years. It has become a significant part of our communications. We're putting efforts into making sure bars and restaurants choose Vita Coco for cocktails, and we’re seeing that happen more frequently.

One moment for our next question.

Just a quick follow-up. In terms of the top-line guidance increase, was that attributable just to private label, branded, or both? Any color on that would be helpful.

It's both, Eric. It's us taking a look at the underlying health of the business, the year-to-date performance, and trying to give you the best information on where we expect the year to land.

Thank you. I am showing no further questions at this time. I would now like to turn it back to Martin Roper for closing remarks.

Thanks, Stephen. I'd like to thank you all for joining our Q1 earnings call, and we look forward to talking to you when we report our Q2 earnings. Thanks very much.

Thank you for your participation in today's conference. This concludes the program, and you may now disconnect.