Fastly, Inc. Q1 FY2021 Earnings Call

Good afternoon. My name is Christian, and I will be your conference operator today. I would like to welcome everyone to the Fastly First Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent background noise. After the speakers’ remarks, there will be a question-and-answer session. I would now like to turn the conference over to your host, Ms. Maria Lukens, Vice President of Investor Relations. Please go ahead.

Hi, everyone. Thank you for joining our first quarter 2021 earnings call. We have Fastly CEO, Joshua Bixby; and CFO, Adriel Lares, with us today. Before we start, I want to remind everyone about the usual format of our call. We published a shareholder letter on our Investor Relations website and with the SEC about an hour ago. Since the letter provides a lot of details, we'll make some brief opening remarks and reserve the rest of the time for your questions. During this call, we will be making forward-looking statements, including statements related to the expected performance of our business, future financial results, strategy, long-term growth and overall future prospects. These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or implied during the call. Please take a look at our filings with the SEC and our Q1 2021 shareholder letter for a discussion of the factors that could cause our results to differ. Also, note that the forward-looking statements on this call are based on information available to us as of today's date. We disclaim any obligation to update any forward-looking statements, except as required by law. Also, during this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call is being webcast and will be archived on our website shortly afterwards. With that, I'll turn the call over to Joshua.

Thanks, Maria. Hi, everyone, and thanks for joining us today. We had another outstanding quarter, delivering 35% year-over-year top line growth with revenues of nearly $85 million. We are now over a year into the pandemic, and digital transformation is showing no signs of slowing. In fact, it's accelerating, and we believe we are at the start of a new era. We are innovating and building the delivery, edge computing and security products necessary to accelerate the digital capability of every organization in the world. Fastly makes your online experience everywhere around the world fast and secure. Unlike Q2 of 2020, which was extraordinary in many ways, 2021 appears to be more in line with our historical trends. Typically, we signed new customers in Q1 and Q2, which then ramp on our platform in the latter half of the year. Historically, usage expansion on the platform is slower in Q2 as people tend to spend more time outside and less time on devices. This year, we believe this effect will be somewhat exaggerated as the world begins to reopen. Despite the challenging year-over-year comparison, we remain confident in our continued growth. If you take a long-term view, you'll note that we're exiting Q1 and subsequently guiding Q2 at a CAGR of over 35% from Q1 and Q2 of 2019, which continues to exceed our expectations from the time of our IPO. Our current guidance reflects continued growth and is more in line with our seasonal trends, where Q2 is roughly flat with Q1, followed by an uptick in growth in the second half of the year, as indicated by our increased revenue outlook for full year 2021. This quarter, thanks in part to the integration of Signal Sciences and the tremendous leadership and sense of urgency we have seen from Brett as our new Chief Revenue Officer, we saw significant cross-sell and joint selling opportunities as demonstrated by customer wins across multiple verticals. In less than two quarters since the closing of the Signal Sciences acquisition, we've made it possible for customers to purchase Fastly and Signal Sciences offerings on a single unified contract, simplifying the ordering process and shortening sales cycles. Additionally, we are very pleased with the continued maturity of computed edge, which continues to drive customer interest as well as produce major operational efficiencies in our product development. Our customers have communicated to us that a key difference of the platform is our position and technology to support privacy. Privacy is core to who we are, and we view it as inseparable from security. The most tangible benefit of securing the enterprise is to ensure the privacy of their customers. The intersection of edge compute, security and privacy is ripe for innovation. By making user security and privacy a core focus of our efforts, we can provide more benefits to a wider array of customers around the world. All of these things fueled strong demand in the beginning of 2021. Our total customer count, excluding Signal Sciences, increased to 2,207, up from 2,084 in Q4 2020. And enterprise customers increased to 336, up from 324 in Q4 2020. We saw several customer wins across high-tech, e-commerce, digital publishing, financial services, cryptocurrency and healthcare, including human security, a leading bot mitigation provider relied on by many of the Internet's largest advertising platforms or enterprises, a leading provider of multilayered network switches and software-defined networking solutions and a leading automotive insurance SaaS provider, among others. In addition to generating new customer demand, we continue to execute on our land and expand strategy among existing customers with average enterprise customer spend increasing to $800,000, up from $782,000 in the prior quarter and another strong dollar-based net expansion rate of 139%. We believe our edge cloud platform, which seamlessly combines delivery, edge computing and security presents a tremendous market opportunity, and we will continue to invest in it to position our company for future growth. Before I turn it over to Adriel to go over the financials, I'd like to take a moment to address some news we shared in our press release and shareholder letter, that Adriel will be stepping down from his role as CFO after five years of service. Adriel will continue in his role as CFO for a transition period, during which we expect to appoint a successor and for a period of time after as an adviser to ensure a smooth transition. On behalf of the entire Board and management team, Adriel, you will be greatly missed, and we wish you the best of luck in your future endeavors. We're also deeply appreciative that you will remain with Fastly to help facilitate a smooth leadership transition. Now I'll turn it over to Adriel to go over the financials.

Thank you, Joshua. I appreciate the kind words, and good afternoon, everyone. As Joshua mentioned, we had a strong first quarter, building up the continued demand trends we saw in 2020 as companies remain focused on their digital transformation. Before I go through the numbers, I want to again point out, as I mentioned last quarter, that the contribution of Signal Sciences has been consolidated into our first quarter financial information. So the revenue and margin numbers I'm about to give include Signal Sciences. We have provided separate Fastly and Signal Sciences customer metrics in the shareholder letter this quarter. We intend to begin reporting consolidated customer metrics later in 2021. This quarter, we generated nearly $85 million in revenue, net at a $1.5 million deferred revenue write-down associated with the acquisition of Signal Sciences, representing 35% year-over-year growth. We believe our edge cloud platform, complemented by Signal Sciences security offerings provide a vast market opportunity, and we will continue to invest in the business to accelerate our expansion and position ourselves for further success. Our gross margin for the quarter reflects this focus and the additional scale and recent acquisition of Signal Sciences. GAAP gross margin was 55.8% for the quarter compared to 56.7% in the same quarter a year ago, which reflects investments for additional scale and the recent acquisition of Signal Sciences, among other factors. Non-GAAP gross margin, which excludes stock-based compensation and intangible amortization expenses of 60.1% for the quarter, reflecting continued year-over-year improvement, up from 57.6% in the same quarter last year. As we have always said, our gross margin will continue to be impacted by the timing of personnel and infrastructure investments and seasonal usage by customers on our platform, but we remain confident in our ability to deliver long-term leverage on an annual basis. In terms of the balance sheet, we ended the quarter with $1.1 billion in cash, restricted cash and investments. As a reminder, in March, we took advantage of favorable market conditions to issue $949 million in aggregate principal amount of 0% convertible senior notes due in 2026 and a private offering. This new capital solidifies our strong financial position and provides us the flexibility to take full advantage of the opportunities ahead. As we continue to see strong demand for our edge cloud and security offerings, our focus remains on innovating and investing in our platform for further growth in 2021 and beyond. Our Q2 and full year 2021 outlook reflects our strong top line growth momentum, our strategic investments in security and edge computing, and the incremental expense for the Signal Sciences acquisition. Consistent with prior years, we based our revenue guidance on the visibility that we have today. And given our usage-based business model, we expect to get additional visibility as the year progresses. Beginning with the second quarter, we expect revenue in the range of $84 million to $87 million. Non-GAAP operating loss in the range of negative $22 million to negative $18 million. Non-GAAP net loss per share in the range of negative $0.19 to negative $0.16. For the full year 2021, we've increased our revenue guidance range to $380 million to $390 million, from $375 million to $380 million. We maintained non-GAAP operating loss in the range of negative $50 million to negative $40 million and non-GAAP net loss per share in the range of negative $0.44 to negative $0.35. And finally, before we begin Q&A, I just would say that I'm grateful to Artur for bringing me to Fastly and allowing me the privilege of shepherding Fastly from pre-IPO to a public company, to one of the premier companies leading the charge, to the future of the Internet. I'm going to be here for a while still, and I look forward to continuing to work with Joshua, Artur and the rest of the Fastly team as we keep expanding our offerings and delivering on our edge cloud platform. With that, I'll turn it back to the operator to take your questions.

Your first question is from Jonathan Ho from William Blair. Your line is open.

Hi. This is John Weidemoyer for Jonathan. Thanks for taking my question. First off, for Adriel, anytime the CFO takes a company through an IPO with some new products, congratulations on that and wish you the best of luck in your future endeavors. For Josh, I'd like to ask, can you talk about some of the parameters you're looking for in a replacement?

Sure. Adriel will be a tough act to follow. Over the past few quarters, we have conducted several executive searches, and what has emerged is how attractive Fastly is as a place to work. As Adriel mentioned, the opportunity here is significant. We are looking for someone with knowledge and expertise, particularly someone who has experience with a much larger business. We believe that we are well-positioned for continued growth in the years ahead, and therefore, we need someone who has experienced that kind of growth at scale. This is crucial. Adriel also brought a unique cultural perspective, so we need someone who appreciates Fastly's values and is committed to them. We are definitely looking for someone with extensive experience in the industry. Our previous searches have shown high demand and that many seasoned professionals are eager to join us. We are excited about the possibility of bringing someone new on board, but we will certainly miss Adriel.

Thank you for the information. I'd like to ask you to elaborate on your outlook. Your explanation of how the year will unfold is quite clear, with the second quarter expected to be relatively flat like the first quarter, and then a significant improvement in the second half. However, since you've revised your outlook upwards, I would like to know if anything changed during the quarter. Did the first quarter performance meet your guidance range? Was there any market development or other factors that prompted you to raise your outlook? Is it related to the reopening from COVID or any other marketplace dynamics driving this change? Could you provide more details regarding the adjustment for the full year, despite the expectation of a somewhat flat second quarter compared to the first quarter?

Sure. I'm glad to share more details. I believe this is connected to our traditional business cycle. Throughout the year, customers engage with us, but many of the significant ones tend to make purchasing decisions in the first and second quarters. This enables them to be prepared in the third and especially the fourth quarters, similar to how e-commerce businesses experience a surge at year-end. As the year moves forward, we gain clearer insights. We are witnessing strong customer acquisition, but the quality of those customers is crucial. There are many large opportunities emerging, and we see positive developments in industries that were previously affected by COVID. Additionally, the industries that benefitted from COVID are maintaining their gains as things return to normal. Our global network gives us a unique perspective on what's happening in countries that are reopening. We are able to assess whether these changes are lasting or just temporary boosts from COVID. Overall, we don't see Fastly or most of our customers as solely influenced by COVID; rather, we have a strong sense that the future is promising. As we observe these trends, we share our outlook. Even though the reopening impacts the second quarter, which is an extraordinary period not only due to COVID but also due to specific customer needs, we remain optimistic, and I'm pleased you noticed this sense of optimism in our projections. Adriel, do you have anything to add?

Thank you, Joshua, and Jon, for your supportive comments. I'm definitely going to miss Fastly, but I know there's a lot to look forward to. Regarding the question, I've noticed that 2021 is beginning to resemble previous years more closely, putting 2020 in a category of its own. We are looking back to 2018 and 2019 when we experienced growth in the high 30 percent range, specifically 37.8% and 38.7%. In the last quarter, we reported a DBNER of 139% and churn rates below 1%, which are strong indicators if we continue to grow our customer base as we gain more clarity. As the year progresses, I anticipate gaining even more insight. This fundamental reason is why we felt confident in raising our projections for the year. By the end of the second quarter, we will have a clearer understanding moving forward. At the start of each year, we tend to take a more cautious approach, primarily due to our usage-based model. However, as time goes on and the metrics remain positive, our confidence builds. We're observing our current customer's behaviors, which informs our planning for the latter half of the year. This familiarity gives me the assurance to proceed with our plans.

Okay. That’s very helpful color. Thank you very much. I’ll jump back in the queue.

Your next question is from Tim Horan from Oppenheimer. Your line is open.

Thanks, everyone. To clarify the guidance for the second half, we expect a significant increase, approximately 15% sequential growth between the third and fourth quarters. I understand this could fluctuate in either direction. Are bookings stronger? If so, could you share more details about your confidence and visibility regarding this? What led to the confidence in providing this guidance? Thank you.

As we discussed, it involves several factors. You're correct that it's about anticipating what's ahead. It's the growth among our current customers and numerous significant opportunities that are emerging, which form the basis of our extensive network that prioritizes security and privacy, among other crucial elements. This indeed reinforces our confidence in the prospects we see. Since Brett joined, I have mentioned in the prepared statements that we've observed improved operational rigor and focus. One focal point for us is the emphasis on partnerships, and we're experiencing a resurgence in growth through our channels, which significantly benefits our business. All these factors together contribute to our confidence.

And is compute and edge an important part of that yet? And maybe just any more color on your confidence of computed edge, how differentiated it is longer term from what you're seeing right now?

Yes. Our outlook on the compute market remains strong. To provide some context, our compute offerings are unique. We have technology that operates at scale, is secure, and has been validated by some of the most advanced technical organizations globally, and it's currently available to our customers. This plays a crucial role in their purchasing decisions. Additionally, we are also achieving significant differentiation in security. As we integrate Signal Sciences into our offerings, we are witnessing new qualities where their capabilities combined with ours lead to improved outcomes for customers in terms of visibility, functionality, and ease of use, which are all vital aspects. Therefore, I believe it is the combination of our compute and security capabilities that sets us apart uniquely. We seem to be extending our advantage, especially when compared to legacy competitors.

Your next question is from Jeff Van Rhee from Craig-Hallum Capital Markets.

This is Rudy on for Jeff. I want to kind of circle back to the guide. Just I'm curious with the linearity Q2 to 3 and 4. In past years, excluding 2020, that Q2 to Q3 typically saw a 7% to 8% sequential increase Q3 to Q4, totally mid-teens. I mean if I were to assume a typical 7% or 8%, Q2 to Q3, that would force like a 30% sequential from Q3 to Q4 just to get to the low end of the annual guide. So I'm just curious how you expect that linearity to play out for the rest of the year?

Sure. Adriel, do you want to handle that one?

Yes, absolutely. Yes, you're likely going to see probably stronger growth across both of those two parameters. And the other factor here is clearly just where we still sort of come out in Q2. But overall, just in terms of the visibility of the underlying growth that we see in the customers that we are currently have today, or in some respects are clearly implying sort of a faster growth in the second half of the year that we've experienced so far in the first half of the year. But sort of the submissions of how exactly it's going to sort of play out in Q3 and Q4, I think will remain to be seen, but I think you're definitely going to see a second half growth that's going to be a little bit faster than the first half.

Got it. And then with respect to Signal Sciences, I'm just curious, what you guys have learned right now with respect to kind of the different buying motion? Are you seeing different kind of customers? How is that sales team integrating with the existing sales team? Just any more color you can share on that front?

Sure. Let me start. At the beginning of the year, we completely integrated the sales teams so that everyone at Fastly is now selling the full suite of services. This reflects our belief that delivery and security are closely linked. The emergence of diverse buyer opportunities is prompting us to branch into new buying centers. For instance, we are seeing success in the CECL and security groups that Signal Sciences has managed to engage, and we are capitalizing on that. This expansion is enabling us to enter organizations while we anticipate the larger enterprise sales cycles that might lead to the renewal of significant delivery contracts. Fastly has a history of finding ways to make initial inroads, and we have done this in the delivery sector. We also see genuine opportunities in the security sector. Overall, we are taking a differentiated approach and expanding our customer base, and we experienced substantial growth in the SigSci business, which is exciting.

Great. And then just lastly, if I could. Gross margin, obviously, pretty steep step down from Q4 about 350 basis points. Just what drove that? Was it we've heard some competitors talk about some pricing pressures. And then just how should we think about that from here for the rest of the year?

Sure, Adriel?

Yes, certainly. I mean, I think, first and foremost, we still feel confident that we're going to be able to grow gross margin year-over-year at least 100 basis points. In terms of the sort of the step down, I mean, a few things driving that, primarily, we're doing a few investments as we normally do at the beginning of the year. So we normally see a step down. The other factor is we got some additional investments into our actual infrastructure, into our pop locations that will sort of increase the resiliency of the network better than it already is. And so I think from our standpoint, this is sort of the normal cadence that we experienced, if you look at our CapEx in Q1, it's in the high single digits, and we still expect to be CapEx spend this year to be somewhere in that sort of 13% to 14% range. So from my standpoint, this is all normal. You'll sort of see a normal seasonal sort of downtick here in the first half, and then you'll see it as revenue. And utilization picks up in Q3 and Q4. You'll see that the gross margin drive again. In particular, especially some of the customer wins and now on the enterprise side, there's some joint wins with Signal Sciences. And so I think on that side, I tell given about our sort of future uptick in gross margin as well because the Signal Sciences products are clearly a much greater and accretive gross margin that we had typically.

Your next question is from Robert Majek from Raymond James.

Great. Best of luck, Adriel. It's always a pleasure working with you. Two questions, if I can. One, you touched on it, but maybe you could just quantify how should we think about the level of year-over-year CDN traffic growth in Q2 and for the remainder of the year? And what's embedded in your guidance as we start to exit COVID and you start to face some pretty tough prior year comparisons? And two, can you give us some color on the revenue contribution from Signal Sciences in Q1 and/or the implied contribution in Q2 guiding? If you can't share specifics, just any further general color on how quickly that product portfolio is ramping would be helpful.

Sure, why don't I take the traffic question and Adriel, why don't you take the SigSci question? I think traffic has grown. It continues to grow. We continue to see a nice pace of that growth. There's nothing that is unexpected in that. And I think that speaks to our confidence when we look at the world moving back into normality in Q3, Q4. We certainly see that continuing. I think that's outlined and projected in our assumptions around guidance. We're pleased with the growth. And it's important and it's strong. Adriel, why don't you take the SigSci question?

Yes, happen to. So I was around approximately 10% of revenue in Q1. And in terms of growth rates, it grew approximately the mid-teens kind of on 15% quarter-over-quarter. So that business still continues to grow nicely. And as I've mentioned, in answer earlier before, there's some great cross-sell results that we've had and also in the pipe. There's just a lot of business that is really being generated from the top of the funnel perspective on the security side. It's nice to see, and I think it's where we think the world is going. So having one of the best products out there, I think, is a win for Fastly. And again, also thank you for the kind of words. Much appreciated.

Your next question is from James Fish from Piper Sandler.

Adriel, I'll miss working with you here. But maybe just going back on that last question, Obviously, you guys have talked about it being revenue off the balance sheet for Signal Sciences, but there's new term licenses and new SaaS licenses. What did you see this quarter? And what do you expect kind of next quarter? Is most of the business generated from new and upsell or renewals and maintenance at this point for Signal Sciences?

Adriel?

Yes. I mean, Jim, definitely. I would definitely see you out there regardless. But I think we're still expecting Signal Sciences to be in that sort of 10% range. I think given the growth rates that we're seeing, we're still - we're bullish. And I think what we're trying to really encourage more is sort of the cross-selling and the co-selling because it does also bring on new opportunities for us to sell sort of the Fastly advantage delivery part of the business. So I think from our standpoint, things look good. I think that's what's leading to not only the results we just saw in Q1, but also just the general bulletins that we have for the rest of the year.

You may have noticed in the letter, you would have seen the 8 enterprise customer new wins from SigSci over the quarter. Again, that's an indication of the future of where we're going to continue to see and ramp up.

Yes, absolutely, Josh. It's a good environment for it. The guidance for Q2 and the full year is certainly a tough comparison for Q2. What are you expecting in terms of flat to low single-digit organic growth in Q2? Again, it's a tough comparison, but this brings our net revenue retention down to around 100%. Looking at the guide for the second half of the year, we have some large events like the Olympics and other significant sporting occasions. To what extent does the guidance factor in the impact of these events and some of the market share gains from one of the largest streaming providers we have acquired?

Sure, Adriel, why don't you take the guide side, and I'll come in on the traffic side?

For the second half of the year, there isn't a specific event driving the revenue like there might be in a typical quarter. What you see in the guidance for the second half is largely based on the enterprise customers we recently acquired in Q1, as well as our existing customers and their plans. We are effectively deepening our relationships with these customers, which gives us confidence. There isn't a singular event influencing this guidance; it reflects a general increase we have experienced before. We're returning to the seasonal trends we've observed in our business, with the exception of Q2 of last year. Indeed, 2020 serves as the low point for comparison when looking at Q2 of 2021. After that point, based on our discussions from Q3 of last year, we anticipate upward trends that align with our business as the comparison issues will ease after Q2.

Yes. It's important to note that in Q2 of last year, we had our largest customer contributing significantly to our revenue. If we adjust for that and also consider SigSci, we are still experiencing over 20% growth in the quarter. This growth is happening despite the COVID lockdowns, which kept us all at home for three months, a situation we are not facing now. Therefore, if you consider this, it indicates a confident outlook for growth in this quarter and into the latter part of the year.

Your next question is from Tyler Radke from Citi.

Just first a follow-up on Jim's question. Just on the net retention rate down at, I think, 107% down from 130% a year ago. Maybe just help me understand kind of the drivers of that? And is this just something that you expect to kind of recover as you get into the back half of the year? And as comps normalize, maybe just help put a little bit more color around that net revenue retention number?

Sure. Adriel, do you want to take that one?

Yes, Tyler. I think the thing that we point to and we sort of published both metrics, but if you take a look at the LTM version of the NRR, that came in at 133%, which is, again, was slightly down from Q4, which was at 136.5%. And I think that because the traditional NRR, which is sort of a SaaS-based metric, which eventually we will have a greater component of within Fastly. That one measures just 1 month, whereas the LTM version coal tries to take a bit of the seasonality, which is why we sort of referenced the dev, et cetera, et cetera. So I think the LTM version is a better one to look at, whereas the NRR, although we will make sure we publish is to make sure you have that metric, we'll bounce around a little bit more than normal.

Okay. And then a follow-up just on computed edge. I know you talked a little bit about it in the prepared remarks with some of the momentum, and I think there was a reference to a new customer in that investor letter. But kind of curious, number one, are there certain verticals that you're seeing the momentum, the strongest there? And what's kind of the timing in terms of when you would really expect that to be a piece of the business that you'd be ready to disclose?

Yes, we have definitely observed a significant increase in e-commerce. We're also noticing substantial growth in security, as illustrated by the example of human security being used to enhance safety measures. Security is a rapidly evolving field that necessitates advanced technology to stay ahead of those looking to exploit vulnerabilities. Those are two key markets. We're seeing some exciting applications in the IoT sector as well. We have consistently stated that this year, 2021, will showcase key examples, while 2022 will see a significant impact on revenue. My view on this hasn’t changed. One aspect that may not be widely recognized about our business is that our customers are actively utilizing compute. They are writing code at the edge, primarily in VCL; however, this is beginning to shift to the programming languages of their choosing. Overall, our customers depend on us for edge computing capabilities. This applies to nearly all of our enterprise clients and many others below the enterprise level. The concept of bringing code is not new for our customers. What is new is their ability to write it in preferred languages and to extend beyond the current functionalities of our VCL product. However, it's important to recognize that our customers are indeed writing code. This has been a key differentiator for Fastly in the past and will continue to be in the future.

Your next question is from Brad Reback from Stifel.

Josh, with $1 billion of cash now on the balance sheet roughly, what's the appetite for future M&A?

Yes, we raised that money with future opportunities in mind. We remain deeply engaged in the ecosystem. Fastly has not significantly grown over its 10-year history, and we just celebrated that anniversary, so congratulations to everyone. Our growth has not relied on continuous mergers and acquisitions. What you observed with the Signal Sciences deal reflects the qualities we will seek in future opportunities: top-tier technology, outstanding people, and a genuine alignment with our customers' needs. We plan to be selective in this area while still searching for opportunities. That deal was a unique asset, and we will keep an eye out for similar unique assets. If something arises that meets our specific criteria, which are quite stringent, we could consider acting. It provides us with a fantastic opportunity, and we will see what the future holds in this regard.

There are no further questions at this time. Mr. Bixby, I'll turn the call over back to you.

Before we sign off, I want to take a quick moment to acknowledge Fastly's 10-year anniversary as a company, a huge milestone that marks our many achievements together. Reminiscing on the past decade, we take pride in having led with our values, served our customers, safeguarded our culture and remain remarkably agile in the face of rapid change. Given all that we've accomplished, I'm extremely confident in the growing demand for Fastly in the future of our business, which is guided by our ambitious product vision and unchanged commitments to a fast, secure, private and reliable Internet for all. I look forward to what lies ahead for us this year. Adriel and I hope to connect with many of you in the upcoming investor conferences. Thank you.

This concludes today's conference call. Thank you for your participation, and have a wonderful day.