Good afternoon. My name is Julian, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates Q2 2025 Earnings Conference Call. As a reminder, ladies and gentlemen, this call is being recorded today, July 22, 2025. I would now like to introduce you to our host, Mr. Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, you may begin your conference.

Thank you, Julian, and good afternoon, everyone. Welcome to the Manhattan Associates 2025 Second Quarter Earnings Call. I will review our cautionary language and then turn the call over to our Executive Chairman, Eddie Capel, for some brief opening commentary before he hands it off to our President and Chief Executive Officer, Eric Clark. During this call, including the Q&A session, we may make forward-looking statements regarding future events or Manhattan Associates' future financial performance. We caution you that these forward-looking statements involve risks and uncertainties and are not guarantees of future performance, and actual results may differ materially from the projections contained in our forward-looking statements. I refer you to Manhattan Associates' SEC reports for important factors that could cause actual results to differ materially from those in our projections, particularly our annual report on Form 10-K for fiscal year 2024 and the risk factor discussion in that report and any risk factor updates we provide in our subsequent Form 10-Qs. Please note that the turbulent global macro environment could impact our performance and cause actual results to differ materially from our projections. We are under no obligation to update these statements. In addition, our comments include certain non-GAAP financial measures to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules. You'll find reconciliation schedules in the Form 8-K we filed with the SEC earlier today and on our website at manh.com. Now I'll turn the call over to Eddie.

Thanks, Mike, and good afternoon, everyone. It's my pleasure once more to kick things off, and welcome everyone to today's call. Now before we get to the real substance of the update, I'd like to commend Eric on his first 160 days as CEO. The transition really couldn't have been smoother. We've had a very successful Momentum Conference a couple of months ago. You're going to hear about excellent Q2 performance and execution in just a moment, and Eric is making a meaningful and positive impact on our company across the board. Manhattan's fundamentals continue to be strong. And as always, we're innovating at pace, driving success for our customers, employees, and shareholders. With this in mind, the Board and I plan to meet a transition away from all of my remaining executive management responsibilities during the balance of 2025. So beginning on January 1, 2026, my title and role at Manhattan will be Chairman of the Board. I continue, as you would expect, to be as excited as ever about Manhattan's future and the opportunity in front of us. And I look forward to supporting Eric and our global teams in any possible way that I can. So with that, over to Eric.

Great. Thank you, Eddie. Good afternoon, everyone, and thank you for joining us as we review our record second quarter results and discuss our increased full year 2025 outlook and briefly recap some of the market-leading innovation that we announced at our customer conference just a couple of months ago. Our Q2 results were better than expected as 22% cloud revenue growth drove top-line outperformance and earnings leverage. While the global macro environment remains volatile, for consecutive quarters, our services revenue has slightly outperformed expectations. This execution is encouraging. However, given the inherent flexibility of time and material contracts, coupled with the ongoing tariff and general market uncertainty, we remain cautious on our services revenue growth. Importantly, our business fundamentals are solid, and we remain optimistic about our long-term opportunity. Manhattan's platform is superior and our product portfolio offers best-in-class functionality across the supply chain commerce ecosystem. This is driving a solid pipeline and providing our sales team with numerous opportunities to drive growth including adding new customers, cross-selling our growing unified product portfolio, and converting our on-premise customers to the cloud. All of these sales channels contributed to RPO increasing 26% year-over-year and surpassing the $2 billion milestone at the end of the quarter. Win rates against our top five competitors in the quarter were consistent at over 70%. Like Q1, we once again experienced strength from new customers as more than 70% of our new cloud bookings were generated from net new logos, with new logos representing approximately 35% of our current pipeline. We anticipate bookings from net new logos to revert back to the standard one-third of our bookings over time. From a vertical perspective, our end markets are diverse, and we have healthy established footprints across numerous subsectors, including retail, grocery, food distribution, life sciences, industrial, technology, airlines, third-party logistics, and more. For example, Q2 deals included a global logistics and supply chain company that became a new logo with MAWM and MAO; a grocery wholesaler that became a new logo with MAWM; a global producer, wholesaler, and retailer of luxury goods that converted from on-prem to MAWM; a global beverage and snack provider that became a new logo with MAO; a global automated warehouse services company that became a new logo with MAWM and MATM; and finally, a regional health care system that became a new logo with Manhattan Active Supply Chain Planning and Manhattan Active Scale, as well as a number of others that we closed during the quarter. While the timing of large deals and the mix of bookings will vary on a quarterly basis, we believe our bookings breadth from both new and existing customers over a broad set of industries and across our full product portfolio exemplifies our multiple opportunities for sustainable long-term growth. To accelerate our sales velocity and drive even further share gains within our large addressable market, we're strategically increasing our investment in sales and marketing. I want to share several updates since our last call. First, we promoted Bob Howell to Chief Sales Officer. Bob has been a sales leader at Manhattan for nearly 20 years and has over 25 years of supply chain experience. Bob's knowledge, leadership, and strong execution leading our Americas sales organization makes him ideal for this expanded role. We look forward to Bob bringing his proven disciplined approach to our entire global sales team. Second, we've hired several new sales leaders on the team, including a new strategic sales leader to facilitate executive demand creation, as well as new sales leaders for both POS and TMS. These are two large markets where we have industry-leading solutions and a tremendous runway for market share gains. Third, we've added and will continue to add more feet on the street, including individual sales talent and product specialists. Since our last earnings call, we've hired more sales talent than in any quarter in the past 10 years. Fourth, we've expanded key go-to-market partnerships with Google and Shopify. Announced in May at our user conference, Manhattan solutions are now available on Google Cloud Marketplace. This expanded alliance removes friction and enables customers to more easily procure, deploy, and manage our industry-leading solutions. This sales channel has already hit the ground running. In fact, our largest deal in Q2 was influenced by Google Cloud Marketplace, and we have a growing pipeline of Google Marketplace deals. We're also excited about our expanded partnership with Shopify. The connector app to Manhattan Active Order Management is now available in the Shopify App Store. Several enterprise-class retailers are live on the app as we partner with Shopify to deliver a leading end-to-end commerce solution. We believe this deeper partnership will drive quicker adoption and deployments of our OMS and POS solutions. Now let's turn to some brief updates on our products. First, I'd like to provide an update on Agentic AI. Earlier this year at Momentum, we provided some exciting updates on our existing AI capabilities in Manhattan Assist and Manhattan Active Maven. We've also announced new capabilities in our forthcoming agent platform. Starting with Manhattan Assist, we've now serviced hundreds of thousands of inquiries from customers across the globe, spanning all Manhattan Active platform applications. For multiple quarters, customers have been receiving high-quality responses to questions regarding application capabilities. More importantly, Manhattan Assist is providing detailed guidance on how to best configure applications like Warehouse, Transportation, and Order Management to drive optimal business outcomes. More recently, we've added the ability for customers to upload their own operational documentation for Manhattan Assist to provide answers which reflect each customer's operational preferences. Customers are uploading content, including training documents, process flows, and annotated screenshots. Armed with this additional information, Assist Now enables associates to ask questions about customer-specific distribution centers or store operations. We believe this set of new capabilities expands the user pool for Assist and commensurately expands the value it creates across our customers each day. But we didn't stop there. At Momentum, we also announced our next big step forward with Agentic AI. Starting this fall, each Manhattan Active platform application will include purpose-built agents for each app's respective roles and personas. These agents will intelligently automate and optimize processes, allowing associates to be faster and far more effective. For example, our labor optimization agent will recommend real-time reassignment of associates in the DC based on upcoming workload and historical productivity at the associate level. For years, DC managers have found it challenging to dynamically balance department-level capacity with fulfillment demand, and we think Agentic AI offers a unique path forward for finally solving this difficult problem. In the store, associates can receive detailed selling guidance in real-time. When a store associate is actively selling, our store selling agent will provide personalized selling guidance based on the customer's omnichannel transaction history and the items they're purchasing at that moment. In between customer visits, the agent will provide selling insights to store associates, including highlighting what items or styles are currently selling well, either online or in other stores in their area. Right now, we're actively collaborating with store operations leaders from across our point-of-sale customer base to hone these use cases in advance of our release later this year. But I believe the most exciting part of our AI story is the agent foundry. In addition to these out-of-the-box agents within each application, Manhattan Active Agent Foundry enables our customers to build their own agents within our platform. Foundry will provide customers the freedom to define the scope and capability of the agents they want their associates to use. Customers can either start with an existing Manhattan agent and provide tweaks of their own, or they can create an agent completely from scratch using our library of APIs. Finally, Foundry also provides the ability to interact with other agents, including agents outside of the Manhattan Active platform through our native support of both agent-to-agent and model context protocol. The excitement we heard from our customers after our AI announcements at Momentum was overwhelming, and we're excited to get these base agents and the agent foundry into the hands of our customers later this year. On a different note, I'm happy to share that we continue to see exceptional cross-sell results when it comes to our unified product platform. Our functional and technical unification message continues to resonate with customers of all sizes across geographies and across industries. Over the past five quarters, roughly 80% of our customers that bought MATM also bought or had previously purchased MAWM. Our customers are truly experiencing the value of unification. The cross-sell results that we've seen since launching Manhattan Active Supply Chain Execution have far exceeded what we were able to achieve with our prior platform. We continue to double down on this investment strategy with an engineering team focused solely on building unified functional advantages. We also recently launched a product council dedicated to serving our unified customers because we know the best way to innovate is to co-create alongside the world-class supply chain practitioners in our customer base. That concludes my business update. Next, Dennis will provide you with an update on our financial performance and outlook, and then I'll close our prepared remarks with a brief summary before we move to Q&A.

Thanks, Eric. Our Manhattan global teams continue to execute well in a challenging macro environment. For the quarter, we delivered a better-than-expected financial performance on the top and bottom lines. This includes solid results across RPO bookings, cloud revenue growth, gross and operating margin expansion as well as free cash flow generation. FX volatility persists. In Q2, it was a 1-point tailwind to year-over-year total revenue growth but did not have a material impact on first-half revenue growth. FX was also a $29 million tailwind to sequential RPO growth and a $28 million tailwind to year-over-year RPO growth. Now turning to our Q2 results, which were better than expected regardless of FX movements. Our growth rates are reported on a year-over-year basis unless otherwise stated. For the quarter, total revenue was $272 million, up 3%. Cloud revenue increased 22% to $100 million, and services revenue declined 6% to $129 million. Both were a bit better than expected. As previously discussed, the year-over-year decline in services revenue reflects customer budgetary constraints that shifted services work to future periods. As Eric highlighted, given the uncertain macro environment and the inherent flexibility of time and material contracts, we remain cautious on our services revenue growth. We ended Q2 with RPO of $2.01 billion, up 26% compared to the prior year and 6% sequentially. The solid Q2 performance was driven by strength in new customers and a healthy contribution from existing customers. Our average contract duration remains at 5.5 to 6 years. Like Q1, some customers are electing longer ramp timelines. While the full contract is noncancelable, we believe the current macro environment has resulted in some customers taking a more conservative approach to the implementation timeline of their contracts. Accordingly, we expect 38% of RPO to be recognized as revenue over the next 24 months. As we've previously stated, our teams are focused on accelerating the adoption of our products, and our contracts always allow customers to amend their timeline for quicker deployments, but not slower ones. Adjusted operating profit was $101 million with an adjusted operating margin of 37.1%. This is up 210 basis points year-over-year. Our performance was driven by strong cloud revenue growth, combined with operating leverage as our cloud business continues to scale. Turning to earnings per share, we delivered Q2 adjusted earnings per share of $1.31, up 11%, and GAAP earnings per share of $0.93, up 9%. Moving to cash, operating cash flow increased 1% to a solid $74 million. Note, our Q2 growth rate was adversely impacted by strong cash collections in the year-ago period. This resulted in a 26% free cash flow margin and a 38% adjusted EBITDA margin, with the difference due to the cash taxes paid in the quarter. Year-to-date, our operating cash flow is up 17% to $149 million. Regarding the balance sheet, deferred revenue increased 16% to $300 million. We ended the quarter with $231 million in cash and no debt. In the quarter, we leveraged our strong cash position and invested $50 million in share repurchases, resulting in $150 million in buybacks year-to-date. Additionally, our Board has approved the replenishment of our $100 million share repurchase authority. Now on to our updated 2025 guidance. Our long-term and long-standing financial objective is to deliver sustainable double-digit top-line growth and top-quartile operating margins benchmarked against enterprise software comps. These are drivers to our best-in-class return on invested capital as we maintain a balanced investment approach to growth and profitability. As noted on prior earnings calls, our goal is to update our RPO outlook on an annual basis. Year-to-date, FX has been about a $42 million tailwind to RPO. Removing this impact, we are entering the second half of the year tracking to the high end of our guidance. Additionally, as previously discussed, our bookings performance is impacted by the number and relative value of large deals we close in any quarter, which can potentially cause lumpiness or nonlinear bookings throughout the year. As discussed earlier on this call, the macro environment remains uncertain. Clarity on external variables remains limited. Given our strong first-half performance and second-half visibility, we are raising our full-year total revenue, operating margin, and EPS outlook. This guidance is also provided in our earnings release. Regarding FX, it is about a $4 million tailwind to second-half revenue from guidance we provided in late April. For RPO, we continue to target $2.11 billion to $2.15 billion, excluding FX movements. For total revenue, we expect $1.071 billion to $1.075 billion with a $1.073 billion midpoint comparing favorably to our prior outlook due to our first-half outperformance. For Q3, we continue to target total revenue of $270 million to $272 million, accounting for retail peak seasonality. For Q4, we continue to target a midpoint of $267 million. For adjusted operating margin, we are increasing the midpoint to 35% from our prior midpoint of 33.25%. At the midpoint, we are targeting Q3 adjusted operating margin of 35%, and accounting for retail peak seasonality about 33.2% in Q4. Our full-year adjusted earnings per share at the midpoint is increasing by $0.21 to $4.80, up from our prior midpoint of $4.59, and includes our annual tax rate increasing to 22.5%, up from 21%, which represents an $0.08 headwind to the second half of the year. The increase in our tax rate is related to an increase in tax reserves caused by the acceleration of our domestic R&D cost deductions under the July 4 U.S. tax law change. This change will also lower our cash taxes paid and likely benefit operating cash flow by approximately $30 million in 2025. On a quarterly basis, we are targeting a Q3 tax rate of 25% and earnings per share of $1.17 and accounting for retail peak seasonality and a tax rate of 22.5%, $1.13 in Q4. For GAAP EPS, our range is increasing to $3.23 to $3.31. For Q3, we are targeting GAAP EPS of $0.77. Here are some additional details on our 2025 outlook. For the full year 2025 on our first-half outperformance, our cloud revenue midpoint upticks to $408.5 million, on a quarterly basis we continue to assume $104.5 million in Q3 and $109 million in Q4. For services, we continue to expect a midpoint of $497 million. On a quarterly basis, this assumes $127 million in Q3 and accounting for retail peak seasonality, $120 million in Q4. For maintenance, our midpoint increases to $128 million or a 7% decline on attrition to the cloud. On a quarterly basis, we expect Q3 $32 million and Q4 $29 million. Finally, we expect our diluted share count to be 61.3 million shares, which assumes no buyback activity. In summary, a solid Q2 performance by the Manhattan global team.

Thank you, Dennis. We're really pleased with our better-than-expected second quarter and first half results. As we've stated, the global macro environment remains challenging. However, we're optimistic about our business fundamentals and our growth opportunity. We believe our industry-leading unified cloud platform positions Manhattan as the clear choice for modern supply chain commerce solutions. Thank you, everyone, for joining the call, and thank you to the Manhattan team for their dedication and execution. That concludes our prepared remarks, and we'd be happy to take questions.

And our first question comes from the line of Terrell Tillman with Truist Securities.

Nice to see these results. So good job on that. Two questions. First question is on the supply chain unification. It resonated at the Momentum event that I attended. I think you all showed a bunch of logos in terms of combined TM and WM transactions. I mean, maybe easier said than done, but is there anything you can programmatically now do to even put more kind of gas on the fire here in terms of whether it's tuning the products better together? Is it go-to-market investments, maybe AI fuses them better together? Just what can you do on your own, in your controllables, to even drive more of these unification deals? And then I had a follow-up.

Yes. Great. Thank you, Terry. Love the question. As I mentioned in my prepared remarks, we're truly doubling down on our investment in unification, and we're doing that in several ways. We've created an engineering team that's focused solely on building these unified functional advantages. We want to make that even bigger and clearer why it makes sense to leverage our unified platform. We've also engaged our customers by creating this product council that's dedicated to serving these unified customers to really find out directly from them what they're looking for, what they need, and to co-innovate and co-create. Sales and awareness is a big part of that as well. One common theme I heard at Momentum this year was that customers articulated how unification was a compelling strategy. A year ago, customers believed in it, but this year, it came to life. There were customers on stage telling their stories of how it increased efficiency, ROI, and created strategic advantages for them. We're seeing our customers buy in. Also, to your point, MAWM and TMS are probably leading the way; we've more than doubled our unification logos in that area year-over-year, and we've also seen many unification logos leveraging MAO and supply chain planning and POS. So there's great optimism, and we're continuing to lean in and invest here around unification.

That's great. My follow-up question is on cloud subscription revenue. It picked up a bit in terms of the growth rate compared to the first quarter, so that was nice to see. It does look like you have this large balance of RPO. I guess that supports going forward visibility. But I would love an update on the confidence level in sustaining 20% growth beyond just the next quarter or two. Just anything you can share on that subscription revenue visibility.

Yes. When we originally provided the multiyear metric of sustained multiyear 20% growth, we said we weren't going to update that metric every quarter. However, I can tell you we do remain confident. We have a large booked business in RPO, which gives us good visibility, particularly for the second half and next year. Our bookings and pipeline continue to be solid. Our total addressable market (TAM) is expanding. As I mentioned, we're making changes to accelerate sales velocity, including specialization around products, renewals, conversions, strengthening partnerships, and adding sales talent. A significant factor in maintaining that 20+-percent growth is the renewal cycle, which starts to pick up pace next year, particularly with our Manhattan Active Warehouse Management. As each contract progresses, the dollars move from RPO to subscription revenue. By the end of a contract, there's no RPO left, and when we renew, it refreshes that RPO at a higher level for a number of reasons. We've ramped customers through the initial years of the contract, and we have opportunities for cross-sell during renewals. This leads to higher RPO and higher subscription revenue. We're actively working with customers to find opportunities to move faster in their implementations, which also grows our subscription revenue faster. We see plenty of levers to help drive this success.

Eric, just four different go-to-market investment areas you walked through. I appreciate some of these take time to become productive and revenue-enhancing. But maybe you could go into a bit more just qualitative detail on what you think is possible through enhanced specialists and new hires. And quantitatively, if you had to put a number on it, I understand, given Terry's question, 20% growth in cloud subs that was intended to be a multiyear target. But do you really think if some of these go-to-market investments pay off, we're thinking about a number beyond the 20% level?

Yes. Thank you for the question. We're not making changes to that long-term projection, but we are significantly improving what we're doing in sales and go-to-market. These are low-risk changes that can yield relatively quick impacts; some quicker than others. Bob Howell, who I mentioned, is taking over as Chief Sales Officer. He's been with us for 20 years, and he's worked closely on significant deals in Europe and APAC. This gives him the opportunity to leverage successful strategies from the Americas in other parts of the world. Some of the changes we're implementing with partnerships with Google, Shopify, etc., are already yielding returns. The product specialization is essential, and we've brought in new leaders for POS and TMS who have strong market experience. They will help us enhance our market awareness in those segments quickly.

I wanted to ask about the RPO bookings, which were much better this quarter than last quarter. I'm curious if you can parcel out how much is customers acclimating to the macro versus Manhattan works of pipeline sometimes for a while and opportunities come together in a period. Do you think it was just the pipeline opportunities you had going into this period that were conducive to better RPO activity?

I think a significant part of it was solid execution by our sales team. From a macro perspective, some uncertainty has abated, and customers are adapting to moving forward with some uncertainty. Just like we are managing through it, our customers are as well. The pipeline was strong heading into Q2, and we expect solid pipeline performance in the second half. Interestingly, our last three bookings quarters have been our best three bookings quarters ever, all during a changing, if not challenging macro environment. Our team continues to perform well, and we have a product the market wants.

On the strong quarter. I wanted to hit on maintenance. That was a little bit higher than I had expected this quarter. Are you seeing some of your existing on-premise customers kind of renew for longer? And can we get an update on where we stand on the status of that on-premise to cloud migration for WMS?

We've always approached this with the view that our customers will convert to cloud when they are ready. We have had strong bookings from new logos for two consecutive quarters, which will ultimately drive more growth opportunities. That said, we are looking at conversion opportunities more aggressively to create more cloud subscription revenue and services revenue. About 20% of our on-prem customers have initiated the conversion to the cloud. We continue to close conversions and have a pipeline of conversions to complete over the next several years.

And maybe just a follow-up. I know ERP migrations have gotten a lot of talk kind of industry-wide. As you see that strength in net new, is that a big factor in what's driving new customers to Manhattan or maybe some commonality on what you're seeing on the net new side?

Yes. The ERP remains a tailwind for us. As companies make decisions on ERP and compare what they have to offer with our solutions, the changes necessary for ERP create opportunities for supply chain upgrades. We're consistently seeing this effect generating a favorable pipeline.

Congrats. Appreciate it. Maybe, Eric, sticking on one of those prior topics. Around the idea of conversion momentum, but also on the new logo side. I wonder if you could contextualize some of the efficiency gains you're seeing around kind of delivery and implementation, what you can do to make that process easier and faster? And maybe if that is a TAM unlock in and of itself as it has historically been viewed as a heavy implementation, if that allows you to go maybe more down market into Tier 2 and what that TAM unlock could potentially look like?

Yes, great question. This is something we spoke about at Momentum as well. Our team leverages automation and AI to reduce implementation timelines, the need for extensions, and the hours required to create an extension. There are numerous examples of where we're diminishing timelines and costs during deployments. This indeed broadens our TAM. Increasing speed and reducing complexity will encourage customers to migrate and convert from on-prem to the cloud. Our customers responded positively to this, understanding that these changes get them to their ROI more quickly.

We've talked about kind of the pace and productivity, the expectations on sales hiring, and where you think about segmenting that out. But if we were to step back and contemplate the renewal cycle in fiscal '26, could you draw any parallels from your prior experiences in how you navigate that renewal opportunity and what that can contextualize from a potential upsell, obviously, unification cross-selling dynamic as well?

Yes. It's not dissimilar from the cycle at ServiceNow, when ServiceNow exceeded $1 billion and went through significant renew cycles. Our team will focus on ensuring that we maximize opportunities at renewals, not just for renewals but driving growth within those customers. We are proactively measuring renewals 18 months out to prepare for cross-selling and upselling conversations.

Maybe as it relates to the macro backdrop, can you talk about linearity in the quarter? Did things improve as the quarter progressed? And any comments on how things are trending so far into July?

I wouldn't say there was anything material to note in terms of improvements throughout the quarter or even in July. Typically, in our business, Q3 has been seasonally weaker while Q4 is stronger. We'll see if that plays out, but regarding the macro, nothing significant.

On this 2026, 2027 renewal cycle that you're gearing up for, when do you anticipate that to kick in, with your significant book of business coming back to the table? How do you think about success relative to renewals you've seen previously?

It's not going to hit all at once; it increases a bit every quarter. It can sneak up if you're unprepared. We're making a clear effort to adjust our structure, comp plans, and team around it, measuring it 18 months out to ensure we're ready and maximizing opportunities.

Nice job on the RPO print. Eric, given that things seem to be settling down a bit since Liberation Day, what's your observation around sentiment from CIOs on large WMS or TMS upgrades or expansions? Are these initiatives being crowded out by other priorities since Liberation Day?

Liberation Day was another prompt for CIOs and boards to view this software as mission-critical. Forward-leaning companies are investing in supply chain as a differentiator for strategic advantages. We're not seeing large customers looking to cut costs here, but care is taken with rollout cycles, which allows for more flexibility in spending.

I appreciate your earlier comments on go-to-market investments. What can we expect on the marketing front for the rest of the year?

We are in a period of change. I believe a quarter from now, we can share more on what that looks like. However, we have an open search for a Chief Marketing Officer and have made it clear we want to invest and enhance market awareness.

With that, there are no further questions at this time. I'd like to turn the call back to Eric Clark for closing remarks.

Thank you very much. We appreciate everyone joining and appreciate all the questions. Bottom line, we're pleased with our solid quarter, exceeding expectations with great new logo performance and margin expansion. I'm personally excited about the go-to-market changes, the impact Bob will have, and the Agentic AI's effects on our business in the second half and beyond.

Great. Thank you. Everyone, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.