Magnite, Inc. Q1 FY2024 Earnings Call

Good day, and welcome to the Magnite First Quarter 2024 Earnings Conference Call. Please note, this event is being recorded. I would now like to hand the call to Nick Kormeluk of Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Magnite's First Quarter 2024 Earnings Conference Call. As a reminder, this conference call is being recorded. Joining me on the call today are Michael Barrett, CEO; and David Day, our CFO. I would like to point out that we have posted financial highlight slides on our Investor Relations website to accompany today's presentation. Before we get started, I will remind you that our prepared remarks and answers to questions will include information that might be considered to be forward-looking statements, including, but not limited to, statements concerning our anticipated financial performance and strategic objectives, including the potential impact of macroeconomic factors on our business. These statements are not guarantees of future performance. They reflect our current views with respect to future events and are based on assumptions and estimates and are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements. A discussion of these and other risks, uncertainties, and assumptions is set forth in the company's periodic reports filed with the SEC, including our first quarter 2024 quarterly report on Form 10-Q and our 2023 annual report on Form 10-K. We undertake no obligation to update forward-looking statements or relevant risks. Our commentary today will include non-GAAP financial measures, including contribution ex-TAC or less traffic acquisition costs, adjusted EBITDA and non-GAAP income per share. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our earnings press release and in the financial highlights deck that is posted on the Investor Relations website. At times, in response to your questions, we may offer additional metrics to provide greater insights into the dynamics of our business. Please be advised that this additional detail may be onetime in nature, and we may or may not provide an update on the future of these metrics. I encourage you to visit our Investor Relations website to access our press release, financial highlights deck, periodic SEC reports and the webcast replay of today's call to learn more about Magnite. I will now turn the call over to Michael. Please go ahead.

Thank you, Nick. I'm pleased to report that our Q1 results surpassed our top line guidance for contribution ex-TAC across all business lines, especially in CTV, which saw an 18% growth this quarter. Our DV+ business also performed well, achieving a 9% growth in contribution ex-TAC. We've had an excellent start to 2024, particularly in March, and we remain hopeful that these positive trends will persist throughout the year. Our CTV platform continues to excel, benefitting from key drivers. We previously highlighted our platform's capability in live sports, which was evident in its strong performance during NCAA basketball March Madness, underscoring Magnite's value as a monetization partner for this highly sought-after inventory. Our ad serving business, SpringServe, also delivered impressive results from new wins and growing partnerships, remaining a key strategic differentiator for us. Together, SpringServe and our Magnite streaming SSP enable us to offer more than just demand facilitation; we provide a comprehensive solution that includes ad serving, yield monetization, audience capabilities, and tools that enhance the consumer viewing experience while adhering to complex rules on competitive separation and frequency capping. We're also well-integrated into our clients' workflows, making the combined implementation of our ad server and SSP appear more like traditional enterprise software. This integration creates significant loyalty and barriers to entry for competitors. We believe that having the leading streaming-first ad server and the most advanced SSP in one offering gives us a major edge in retaining, expanding, and acquiring new business. We're excited to build on our leadership in the U.S. by expanding SpringServe globally with new international wins and strengthening existing partnerships. Recent wins include collaborations with Titan for the Philips operating system, Barco 1, the Barcelona Football Club streaming app, Altice France, and YTV Japan, a top Japanese broadcaster. Our self-service direct buying platform, ClearLine, continues to gain traction with numerous agencies and brands testing and utilizing it. Notably, we are thrilled to announce an expanded partnership with Mediaocean for an exclusive deal for CTV buying through ClearLine, which handles over $200 billion in total spend and integrates seamlessly with agency and brand linear TV media buying workflows. This partnership enables linear TV buyers to use Mediaocean's planning tool to directly purchase CTV inventory through ClearLine, targeting over a $60 billion U.S. linear TV total addressable market that we aim to convert into CTV ad buys. Additionally, based on feedback from our agency partners, we are actively developing new features and functionalities in Q2 to prepare for live sports events like the Summer Olympics, NFL games, college football, and the Fall elections. Now, looking at the CTV market more broadly, there has been recent attention on DSPs connecting directly to sellers in this space, leading to some concerns about the implications for sell-side platforms like Magnite. However, our viewpoint, supported by data and experience, leaves us feeling optimistic rather than anxious. It's crucial to remember that the idea of direct connections is not new. The Trade Desk introduced OpenPath in plain video just over two years ago, which prompted similar concerns. Regardless, our DV+ business has continued to gain market share and has accelerated our growth year-over-year, which reinforces our confidence. While some large media owners might explore a dual pipeline strategy to increase programmatic demand, we believe differentiated SSPs like Magnite will keep thriving for several reasons. First, it's about value and alignment of incentives. Demand-side platforms inherently prioritize the needs of advertisers and agencies over others, while SSPs like Magnite are designed to ensure the sell-side's success. Everything we do, from daily guidance to the technology we provide for operations like billing, collections, reconciliation, fraud protection, and yield management, is viewed through this lens. Second, we excel in holistic yield management. SSPs are ideally suited to help media owners optimize yield decisions comprehensively, leveraging data and AI insights to maximize revenue across all formats and channels. The more extensive, global, and technically robust the SSP, the more effective it becomes, and Magnite excels in all these areas. Third, a universal and efficient publisher deal environment enhances deal value by allowing broader demand access, as opposed to multiple deal libraries in each connected DSP, which can lead to inefficiencies and data leakage. Fourth, we have the capability to capture demand from a growing number of diverse streaming advertisers. Although we are still in the early stages of CTV advertising, the primary focus has been on capturing linear dollars spent by broadcast advertisers. Currently, only a few DSPs manage this, but the future lies in engaging with over 5,000 advertisers, not just 500. These digital-first advertisers will seek precise targeting and a biddable space, and we will collaborate with multiple DSPs and buying tools. It will be unrealistic for a streaming publisher to connect with all this demand directly without incurring substantial costs with no economic benefit. Such publishers will rely on a technology partner capable of integrating diverse demand seamlessly to ensure optimal yield. Magnite's combination of SSP and ad server positions us as the preferred monetization partner for CTV publishers. Lastly, our unique demand sources, including strategic agency agreements, managed service operations, ClearLine demand, and exclusive partnerships such as with Mediaocean, are crucial for publishers' revenue streams and flow exclusively through our SSP. Additionally, most direct DSP implementations are integrated through SpringServe, either functioning as the primary ad server or as the programmatic layer above third-party ad servers. Thus, while the disintermediation narrative makes for compelling headlines, Magnite continues to participate in the economic landscape effectively. Our strong partnerships with major players like Disney, Roku, Warner Bros Discovery, Paramount, Fox, Samsung, LG, and VIZIO position us well for a valuable long-term role in the growth of the CTV market. We are eager to enter the 2024 upfront season, during which many of these partners will further enhance their programmatic advertising efforts in relation to CTV ad sales. Regarding DV+, our Q1 concluded with a solid 9% growth in revenue ex-TAC. This success stems from our intense focus on buyers, enhancing monetization for sellers, improving performance with AI, and investing in formats like native, audio, podcasting, and digital out-of-home. As many are aware, Google has recently announced another delay in the phase-out of third-party cookies. This news was anticipated, and despite the delay, we will continue testing and collaborating with Google to prepare for the privacy sandbox when it eventually becomes operational. We are confident that we have developed the industry's best technology platform to assist publishers in effectively monetizing their first-party data. We believe that the removal of third-party cookies will significantly strengthen our market stance, as competing SSPs may struggle to support new third-party solutions and lack the scale or strategic proximity to publishers for first-party segment creation. Our DV+ scale is continually expanding as we onboard new publishers, with over 1.2 trillion ad requests processed daily, providing a broad and efficient customized inventory supply for our DSPs and brands to target their desired users. In conclusion, we are excited about the successful business we've cultivated and our excellent start to 2024. We see strong growth prospects for Magnite. With that, I'll hand the call over to David for further details on our financials. David?

Thanks, Michael. We are pleased to have a strong start to 2024 with CTV and DV+ contribution ex-TAC significantly beating the high end of our guidance. We also reported an adjusted EBITDA margin of 19% for the quarter, which is above the high end of our guidance range. Total revenue for Q1 was $149 million, up 15% from Q1 2023. Contribution ex-TAC was $131 million, up 12%. CTV contribution ex-TAC was $55 million, up 18% year-over-year, which significantly exceeded our guidance range. The strong contribution from live sports, including better-than-expected March Madness results as well as continued growth in ad serving were significant drivers of CTV. Our CTV outperformance was entirely driven by our programmatic offerings with managed service down slightly year-over-year. DV+ contribution ex-TAC was $76 million, an increase from $70 million or up 9% compared to the first quarter last year. Our contribution ex-TAC mix for Q1 was 42% CTV, 41% mobile, and 17% desktop. From a vertical perspective, automotive, financial, and food and beverage were our strongest performing categories. Categories that did not perform as well included entertainment, home and garden, and technology. Total operating expenses, which include cost of revenue for the first quarter, were $163 million, a decrease from $231 million in the same period last year. A primary driver of the decrease was the result of the SpotX acquired intangible assets that became fully amortized in the third quarter of last year. Adjusted EBITDA operating expense for the first quarter was $106 million at the low end of our guidance range. The increase from $93 million last year was driven by higher cloud computing expenses, planned event and travel-related expenses, including our full company off-site in Q1, as well as personnel-related costs driven by annual merit increases and payroll tax resets. Net loss was $18 million for the quarter compared to a net loss for the first quarter of 2023 of $99 million. Adjusted EBITDA was $25 million, and adjusted EBITDA margin was 19% for the quarter, which compares to $23 million and a margin of 20% last year. As a reminder, we calculate adjusted EBITDA margin as a percentage of contribution ex-TAC. GAAP loss per basic and diluted share was $0.13 for the first quarter of 2024, compared to a loss of $0.73 for the first quarter of 2023. Non-GAAP earnings per share in the first quarter of 2024 was $0.05 compared to $0.04 reported last year. The reconciliations to non-GAAP income and non-GAAP earnings per share are included with our Q1 results press release. Our cash balance at the end of Q1 was $253 million, a decrease from $326 million at the end of the fourth quarter. The decrease was due to typical seasonality in our business. Capital expenditures, including both purchases of property and equipment and capitalized internally used software development costs, were $15 million for the quarter. Operating cash flow, which we define as adjusted EBITDA less CapEx, was $10 million for the quarter. Our net interest expense for the quarter was $8 million. As we announced last quarter, we successfully refinanced our credit facilities in Q1, which stabilizes our capital structure for the foreseeable future. Our net leverage was 1.7x at the end of Q1 due to the same typical cash seasonality I mentioned earlier. We expect to see net leverage improvements in future quarters this year and expect a net leverage ratio of 1x or less by the end of the year. I will now share our expectations for the second quarter and full year. For the second quarter, we expect contribution ex-TAC to be in the range of $142 million to $146 million. Contribution ex-TAC attributable to CTV to be in the range of $59 million to $61 million, comprised of double-digit programmatic CTV growth partially offset by lower managed service contribution, which is going up against a strong comp in Q2 2023. Contribution ex-TAC attributable to DV+ to be in the range of $83 million to $85 million, and adjusted EBITDA operating expenses to be between $101 million and $103 million, which implies adjusted EBITDA margin of approximately 30% for Q2 at the midpoint. For the full year, we are raising both top and bottom line guidance. We're raising contribution ex-TAC to grow at least 10%, with CTV to grow faster than DV+. Adjusted EBITDA margin is now expected to expand 100 to 150 basis points over 2023, and we're increasing our expected adjusted EBITDA growth to the mid-teens, up from double digits previously, with even higher growth in free cash flow and total CapEx to be in the mid- to high-$40 million range, including PP&E and capitalized software. We're off to a great start in 2024 and are very encouraged by the recovery in our CTV growth. We're excited about the opportunities ahead of us and look forward to continued strong programmatic CTV performance.

And our first question comes from Shyam Patil of Susquehanna.

Congrats on a really strong result there. I had a couple of questions. Michael, you talked in your prepared remarks about CTV benefiting from strength in ad serving. I was wondering if you could talk a little bit more about that and just opportunities to expand ad serving going forward? And then also, I guess, second question on ClearLine, you talked about the Mediaocean partnership and the ClearLine integration. Can you just talk about, I guess, for that partnership and then just kind of ClearLine overall, just how you think about the contribution from this over time.

Yes, sure, Shyam. So on the ad serving front, yes, it's two stories. Ad serving itself has just so far exceeded expectations. If you recall, when we acquired SpotX, we had the option to be able to buy SpringServe at the time. And it came with a kind of expectation of performance and everything that we thought of on the top range of performance, it's so far exceeded. So it's growing incredibly fast through same-store sales and also through new customer adoption. It really is the rare choice for digital-first streaming companies. Obviously, the broadcasters have been at online video for a long time, and FreeWheel has a very good position in that market. But if you look at the OEMs, you look at fast services, you look at virtual MVPDs, all of these guys, SpringServe is the server of choice. So as a standalone, SpringServe is excelling, but the secret sauce here is SpringServe in combination with our SSP. So as the year goes on, you're going to see one unified login; clients that don't use SpringServe will have access to SpringServe tools, clients that have SpringServe will have access to the SSP. And we think that, in addition to just being a stickier relationship with publishers, having the two together will drive superior monetization. So we couldn't be more excited about the prospects going forward and with the results to date with SpringServe. As it relates to ClearLine, we are very excited about the Mediaocean relationship. As you know, their software sits at all the major agencies. Everyone uses it. They use it for planning, for linear, and increasingly, they're using it to process insertion orders to send over to those very same broadcasters for their streaming service. And the need there is to automate that, to make that more programmatic. And so we think that there's a real opportunity here partnering with our partners at Mediaocean to really shift the market and the way they think about transacting publisher-sold deals that used to be insertion that can now be processed programmatically with targeting, etc. So really excited about that. Obviously, very early days, but we rushed to get this partnership in place so that it's there for the upfront. And I think that we're very excited about the timing there. As to the prospects of ClearLine, I think we've been very realistic that it will be a modest revenue generator in the near future. But we think that providing this kind of buy-side alternative for certain types of buyers, whether they're extremely fee-sensitive or not needing to have the full suite of DSP services. We think it's going to be very attractive and will continue to invest in it and put resources against it.

The next question comes from Laura Martin of Needham.

I want to offer my congratulations. I have two questions, Michael. First, Roku mentioned experiencing a decline in cost per thousand pricing due to competition from Netflix and possibly Amazon Prime Video, which is causing an oversupply. My question is whether you observe a difference in cost per thousand pricing within the connected TV market between TV OEMs like Roku, LG, and Samsung and traditional broadcasters. If there is a difference, are there differing trends, or does the entire connected TV market move in unison? That's my first question.

Yes, we analyze it in a comprehensive way, but we also assess it by specific groups. There are differences in CPMs between the broadcaster group and the OEMs, and it is clear that CPMs are higher for broadcasters like Netflix and lower for OEMs. This gap has not really increased in recent quarters. We have noticed some price declines, especially since Netflix launched at a very high price that likely wasn’t sustainable. That price has come down. Overall, while we have seen a slight decrease in CPMs, it is a very minor decline and certainly not the significant drop that some analysts have suggested. Such a drastic decrease has not happened.

Super interesting and helpful. Next week, we're entering the upfront market with $19 billion in spend. What is your gut feeling about the other side of the upfront market once all the new deals are signed by August? How much will programmatic advertising be this year compared to previous years? Do you think we're at a tipping point where many more programmatic deals will be signed in this year's upfront? What's your perspective on that?

I do, Laura, and I think that what we'll see the majority of that will still be the publisher sold directly with the premium guys. They'll be more biddable, but not the majority of it by any stretch. And so our ad spend growth rate continues to be relatively strong with these guys, and most of that is publisher sold deals. And I think you're going to just see more and more of that because that's what buyers want.

The next question comes from Jason Kreyer of Craig-Hallum.

Michael, I appreciate the time you spent on direct connection. Just curious, if we look at that looking forward over the next 3 to 5 years, what does the dialogue look like on direct connection? Do those still exist? Do they maybe just exist for a few of the largest buyers and few are the largest publishers? Or maybe what is your thought on the evolution there?

It's a great call. I mean, I think not trying to be too self-serving that I think that CTV is quite different. And the point we tried to make about the deal library area is that it's really tough and inefficient for a publisher to create deal libraries in every DSP; that's the role of the SSP, right? You create the deal library in one location, and every buyer knows where to go to get it. So I think that there's that element. There is an element of risk for a publisher. If they haven't done it before, it can be costly. It requires engineering talent to do. So I think based upon those broader challenges, I don't think this is for everyone. I think that those who have the technical ability to do so will sample this because who wouldn't want incremental demand? But I do think the vast majority of dollars that would be flowing into CTV will flow through pipes like ours because of the reasons that we alluded to in the script today.

I want to go back to the CTV conversation from kind of last summer fall. Obviously, you've had a nice bounce back there in your business. And if we just kind of look over the last 2, 3 quarters, are you just seeing generally better advertising trends that's driven those tailwinds? Are the buckets changing, which is creating a more favorable take rate? Or you did kind of give some detail on managed service, but I'm curious if you can give details on any of those other variables.

Yes, Jason, I believe the main factor is the macro environment, with an improved advertising landscape and increased spending. Compared to our previous discussion about the different categories, such as Magnite managed deals, publisher managed deals, and managed service, there has likely been a slight increase in actual publisher sold deals. As a result, we are seeing a lower take rate for this category, but the volume of deals has significantly increased. Currently, there’s a substantial amount of available inventory, particularly after Amazon Prime added a large quantity to the market last quarter. Buyers still prefer premium brand-name broadcasters and familiar shows, and I don't anticipate any significant changes in this trend in the near future. While our over-performance in March was partly due to managed services, especially around NCAA basketball, I expect the mix of categories to remain stable throughout 2024.

The next question comes from Matt Swanson of RBC Capital Markets.

Yes. And I'll add my congratulations to the team. Maybe if we get David involved here. we haven't had to deal with an improving macro for quite some time. Could you just talk a little bit about what your approach to guidance is with some of the momentum we're seeing in the market?

Yes. I want to clarify that while the macro environment is improving, we wouldn't say it's completely back to normal. Looking at specific sectors, there has been some strength in automotive, with many electric cars needing to be sold. In finance, food and beverage, a lot of consumer packaged goods companies are working to manage support for price increases resulting from inflation. However, we are also noting some weaknesses in technology, which WPP and a few others have mentioned. The entertainment sector hasn't fully bounced back from last year’s strike issues. Therefore, from a guidance perspective, we remain cautiously optimistic. We recognize the improvements we've made and see potential for the future, but cautiously optimistic is the best way to put it. Additionally, we've previously mentioned that managed service can be more volatile than our other business segments. As we look ahead this year, this area will remain an important value add for the company. We had stronger comparisons in the first half of 2023, which makes growth appear less impressive now, though those comparisons will ease in the second half. For managed services specifically, we are adopting a slightly more conservative approach due to the volatility, but we also anticipate some strengthening throughout the rest of the year.

That's really helpful color. And then Michael, also super helpful color when we talked about the direct connections and you kind of outlining your value proposition with those key points. But could you maybe dive a little deeper into Disney specifically? It's a really close relationship. And just maybe talk about kind of the messaging that you've heard from them and just kind of how much it aligns with your view?

Yes. So I mean, we talked a little bit about, I guess, it was our cycle of earnings calls, so this is the first time in our earnings. But the relationship actually has kind of been portrayed as a contraction, where it's actually more of an expansion. We're actually working with them now through our managed service team. We are working with them in political advertising and remain their sole SSP partner. They own their own ad server. So if they were using a commercial ad server, more than likely it would have been a connection through SpringServe into their commercial ad server. But because they own their own ad server, I think they felt as though they had the technical capabilities to do a connection with the two largest DSPs. It's been kind of intimated that it begins and ends there. It's a lengthy process. I had commented earlier about the risk of implementation and the length and the expense of it. They're not going to even lift a finger on the Trade Desk integration until 2025. And so I think it's an experiment. I'd probably do it if I were them because it's been pitched as incremental demand. Why wouldn't you, as a publisher? But I do think they're quite unique in the sense that they do own their ad server and they do have engineers to do these kinds of things. So I think our Disney relationship remains incredibly strong. We are talking about workflow for 2025. And I do think that they're an outlier as it relates to most of the top streaming services.

The next question comes from Zach Cummins of B. Riley FBR.

Congrats on a strong start to the year. I was really hoping you could just further unpack some of the assumptions you're making for CTV business. It obviously seems like some tailwinds from live sports and some easier comps as we go into the second half of the year. But just curious about your approach to CTV specifically as you're guiding for the remainder of this year?

Yes, we remain optimistic about the recovery in the programmatic segment of CTV. The first quarter was exceptionally strong for CTV. As we mentioned, we expect programmatic CTV to grow in double digits, although there will be some declines in the second quarter, particularly in managed services, which will be more pronounced than in the first quarter. Looking ahead, we anticipate continued growth in programmatic CTV, with a boost particularly in the second half of the year from political spending. In previous election cycles, we've mentioned spending levels around $10 million for the company, and if we assume that doubles in the next cycle, most of that would occur in the second half of the year, which is included in our guidance.

Understood. And just my one follow-up question is around capital allocation. It's nice to see that you're targeting a net leverage ratio closer to 1x at the end of this year. But as you continue to strengthen the balance sheet, how do you balance thinking of share repurchases versus continuing to pay down debt?

Yes, that's a really good question. First of all, we're excited to be in this position. With the refinancing of our debt and the removal of a springing covenant related to our converts, along with the progress on this net leverage ratio, we have many possibilities ahead of us. We have a $125 million program that could be utilized for convertible note repurchases or share buybacks. Given the current trading conditions for the converts, it doesn’t make sense for us to take them off the market right now, so we are leaning towards considering share repurchases more seriously. While this might not have been a significant option for us in 2023, it is becoming a more important focus, though we will need to evaluate the facts and circumstances as we move forward to decide whether to take action.

The next question comes from Dan Kurnos of The Benchmark Company.

All right. I'll take a stab at this, trying to listen like four calls at once. Michael, it sounds like you guys did another deal, it's small, but with one of the linear players. We know you already have a relationship with Scripps in particular, but it feels like they're all trying to come online, and it's sort of a facilitation of the move to streaming, but also untapped opportunities, a lot of your peers or others aren't going after. So just kind of curious about that particular opportunity. And David, you just kind of mentioned the political aspect that I wanted to get into, but it sounds like a lot of agencies are actually trying to transact political on almost a purely programmatic basis, particularly in the CTV universe. So I guess that could be a boom depending on how many dollars shift there, but just curious if that's what you're seeing and if you're sort of negotiating some of the deals on kind of that premise?

Yes. So yes, Dan, I think local as it relates to streaming is a story that's not well told, and that's on us as much as anyone, and I look forward to talking much more about that because we do have a lot of momentum in that area. We think it's really promising. And I think you're right, it's kind of green space for us in terms of being able to secure a lot of that business and relationships. And as it relates to political, and I'll let David opine, but it's going to be a very backloaded spend. And so anything that we talk about political is kind of conjecture because it hasn't flown yet. And so we think it's going to be big. We have built it into some of the forward-looking guidance. But how big when, who is it going to come from, how much of it's programmatic, it's all very encouraging, but it's still kind of on the comp.

Yes. And we've got a crack political facilitation team in place. So we have very established relationships with those players. And we have tried to take, I think, a fairly modest approach in our guidance. And so to your point, it could create an upside certainly in the latter half of the year.

Our next question comes from Omar Dessouky of Bank of America.

This is Arthur on for Omar. And congrats on strong results. Maybe just a quick follow-up on the Mediaocean partnership. Michael, you talked about automating insertion orders through the ClearLine integration. How should we think about the economic implications of that? Like should we think about higher take rate on these direct deals from your existing customer base? Or is this expected to be something that's also going to drive incremental market share growth because you're offering easier access for these new buyers to execute the deals programmatically?

Yes. So I think the way to think about it is, obviously, there's the take rate that's involved in the transaction that is on the Magnite side. And I would envision that there'll be a buy-side fee associated with using this tool from Mediaocean. So obviously, it's a partnership; there's shared economics on the buy-side piece of it. And then the sell-side piece of it, that's Magnite economics. So I think anything that would flow through it is found money, and it would be accretive in terms of both a take rate and a buy-side fee.

This concludes the question-and-answer session. I'd like to turn the call back over to Michael for any closing remarks.

Thank you, Andrea. I'd also like to say thank you to the Magnite team for delivering a great quarter that exceeded expectations. The performance of our team around the world has established a very solid foundation to build on for the remainder of the year and beyond. We look forward to speaking with many of you at our upcoming investor events. Cannibal will host our post-Q1 virtual investor meetings tomorrow. We will be attending the Needham Conference in New York on May 14 and 15, the B. Riley conference in Beverly Hills on May 22 and 23, and the Craig Hallum Conference in Minneapolis on the 29th. The Evercore conference in New York also on May 29 and the BofA conference in San Francisco on June 5. We will also be participating in meetings with Benchmark in Milwaukee and Chicago on June 11 and 12, and will be in London on June 18. Lastly, Benchmark will be hosting a live from Can webcast on Wednesday, June 19. Have a great evening, and thank you for listening.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.