Netgear, Inc. Q3 FY2025 Earnings Call

Ladies and gentlemen, thank you for being here. I would now like to hand the conference over to Erik Bylin. Please proceed, sir.

Thank you, operator. Good afternoon, and welcome to NETGEAR's Third Quarter of 2025 Financial Results Conference Call. Joining us for the company are Mr. CJ Prober, CEO; and Mr. Bryan Murray, CFO. The format of the call will start with commentary on the business provided by CJ, followed by a review of the financials for the third quarter and guidance for the fourth quarter provided by Bryan. We'll then have time for any questions. If you've not received a copy of today's release, please visit NETGEAR's Investor Relations website at www.netgear.com. Before we begin the formal remarks, we advise you that today's conference call contains forward-looking statements. Forward-looking statements include statements regarding expected revenue, gross and operating margins, expenses, tax expenses and future business outlook. Actual results or trends could differ materially from those contemplated by these forward-looking statements. For more information, please refer to the risk factors discussed in NETGEAR's periodic filings with the SEC, including the most recent Form 10-Q. Any forward-looking statements that we make on this call are based on assumptions as of today, and NETGEAR undertakes no obligation to update these statements as a result of new information or future events, except as required by law. In addition, several non-GAAP financial measures will be mentioned on this call. A reconciliation of the non-GAAP to GAAP measures can be found in today's press release on our Investor Relations website. At this time, I would now like to turn the call over to CJ.

Thanks, Erik. We are pleased to share that our team delivered another really strong quarter. Over the past 1.5 years, NETGEAR has embarked on the first phase of a dramatic and comprehensive transformation and the results of everyone's efforts and diligence are coming to fruition. While the seeds of our investment are only beginning to bear fruit in terms of top line expansion, our team's operational acumen is unlocking new ways for us to efficiently capitalize on the opportunities in front of us. We are sincerely excited about the foundation we've built and are confident that our transformation positions us exceedingly well to deliver long-term growth, profitability and shareholder value creation. This quarter's results marked the sixth quarter in a row where NETGEAR has exceeded our revenue and non-GAAP operating margin guidance. The supply chain team kept the pedal to the floor to drive material improvement in our supply position for our managed switches, allowing us to grow revenue for our Enterprise segment almost 16% year-over-year. As a great sign of our strength in this category, ProAV units and ASPs were each up materially year-over-year, contributing to a strong improvement in gross margin, operating margin and net profitability. We came into this year hoping to improve our gross margin from 2024 while sharing that we felt that achieving profitability for the year was unlikely. We're now thrilled to share that not only are we expecting to be non-GAAP profitable for the year, but we expect to deliver non-GAAP positive EPS in each quarter this year. While our focus remains on making the investments needed to drive our transformation and enable long-term profitable growth, this near-term profitability milestone is a sign that our efforts are paying off. In Q3, our profitability resulted from a big improvement in each segment. We once again delivered positive contribution margin and significantly improved gross margin for each business. An increased mix from enterprise, which delivered an all-time high segment gross margin of over 50% led to another record high non-GAAP gross margin for the company of 39.6%, surpassing the record from last quarter by 180 basis points. This enabled us to deliver positive non-GAAP operating income, well above guidance and non-GAAP EPS of $0.12. We were also extremely successful on the capital allocation front, repurchasing $20 million of our common stock at an average price of $24.55 per share in the quarter. We plan to continue to opportunistically return capital to shareholders via share repurchases at a minimum to offset dilution. Before moving on to updates for our business segments, we're excited to share a couple of important updates on our transformation that will allow us to continue to evolve how we position our products and services in the market. First, we launched our new website yesterday, and we encourage you all to check that out. This has been in the works for over a year and reflects our new branding that will serve to more clearly distinguish our consumer and commercial businesses. A key part of this change involves renaming our commercial business from NETGEAR for Business to NETGEAR Enterprise. This is a reflection of the fact that we are delivering reliable enterprise-grade solutions to large customers that include Fortune 500 companies and mission-critical events like the G7 Summit, not to mention many different global Tier 1 music and sporting events. Second, starting in Q4, we will be reporting on 2 segments, NETGEAR Enterprise and NETGEAR Consumer. As we've shared over the past several quarters, our mobile products serve both of these end customers, and the go-forward product strategy is to drive stronger integration of our mobile products into our app and subscription service for consumers on the one hand and into our cloud management and security platform for our enterprise customers on the other. Mobile, of course, remains an important strategic capability that we will leverage to expand both our consumer and enterprise businesses. Bryan will share more details on this in his section. With that context, I'll move on to the business segment updates. Our Enterprise segment again led the way in driving our great results, and we continue to see double-digit demand growth for our best-in-class ProAV managed switches. The NETGEAR team successfully navigated supply chain headwinds to accelerate supply and start to lower our backlog, leading to outperformance in the quarter. While we still believe we'll return to an optimal inventory position in the first quarter, the 16% sequential growth of our managed switch revenue in Q3 reflects better supply and strong end-user demand for these products. We're already a clear leader in the ProAV space and continue to expand our advantages and round out our value proposition by relentlessly growing our ecosystem, notably reaching 500 AV partners this quarter. Further, the AV professional services that launched in the second quarter have garnered positive early traction with blue-chip customers and will be an integral part of expanding our enterprise value proposition and non-device revenue going forward. Essential to achieving this goal is our constant drive to innovate in ways that will improve our differentiation across products, pricing and partners. Much of our headcount growth remains in enterprise as we're building out our software development capabilities. Our new team in Chennai, which is roughly cost neutral due to a simultaneous reduction in outsourced software development capacity, allows us to improve our efficiency, quality and competitive differentiation. With this new and growing team, we're making great strides in improving our device firmware, cloud management and security software offerings. We're also in the process of greatly improving the user experience. And in the coming months, we will be integrating networking and security in a manner that will lead to a unique offering in the industry. We plan to offer networking and security with enterprise-grade reliability delivered by a simple user experience at an affordable price that will make this platform purpose-built for managed service providers and small to medium enterprises. And as a first step to addressing cybersecurity in our target market, earlier this month, we announced a tailored security solution for SMEs based on technology obtained via the acquisition of Exium earlier this year. This exciting new unified solution is the industry's only all-in-one SASE and hybrid firewall platform designed specifically for SMEs and the MSPs that support them. We can now secure remote workers as well as the on-premise networks and combine advanced threat protection, AI-powered Zero Trust network access, web gateway security, SD-WAN and firewall capabilities in a single user-friendly platform. The investments we've made in the enterprise business are clearly beginning to deliver both financial and operational benefits. While we continue to have success in hiring key leaders for the enterprise sales team, we're starting to expand the list of marquee customers we serve. In the most recent quarter, we closed material deals with a Fortune 10 global retailer, Boeing, the South African Parliament, University of Wales and Fox Sports to name a few. Moving on to home networking. While the retail market remains highly competitive, we're continuing to make inroads with our good, better, best strategy. Sequential top line growth came in at roughly 8%, and we once again delivered positive contribution margin in the quarter. Key enablers to this success are the broadening product portfolio, strength in our higher-margin D2C channel, leaner operational execution and growing annual recurring revenue, which reached $37.9 million in the quarter and grew 17.2% year-over-year. Our Orbi 370 mesh product that launched in the quarter is gaining momentum in the market and outperformed our expectations. This is our most affordable WiFi 7 mesh system to date and offers high-end performance and security at an accessible price point, benefits that are clearly resonating with customers. We remain confident in the long-term growth potential of the home networking business and notably saw share growth in WiFi 7 routers and mesh systems in Q3, pointing to NETGEAR's expanding sphere of influence in this part of the market. The mobile segment delivered on our modest top line expectations and with strong demand for our high-end offering, we achieved record non-GAAP gross margins of 31% for this business. Although the service provider channel remains highly competitive, we continue to add new channel partners. For example, we'll be launching the M7 Pro with O2 in the U.K. this quarter. We also have exciting new products coming to market for this segment over the coming months that will expand our addressable market. Over the long term, we expect our strategic capability in delivering mobile products to benefit our consumer and enterprise segments by offering differentiated experiences that are integrated closely with our broader solution for these end markets. So in summary, this quarter was marked by solid execution, and these results underscore the impact of our strategic transformation in building a healthier, more resilient business for the long term. We remain well positioned to be the trusted domestic supplier across our range of products, a true differentiator in this market and remain almost completely exempt from tariffs. We are focusing on the right areas, growing our higher-margin segments, driving operational efficiency and delivering value to our customers. And it's showing in our financial performance thus far, while setting the stage for renewed growth in 2026. With that, I'll turn it over to Bryan.

Thank you, CJ, and thank you, everyone, for joining today's call. We entered the second half of the year, building on the solid momentum we established in the first half. And I'm pleased to share that this marks a sixth consecutive quarter where we exceeded the high end of our guidance ranges for revenue and non-GAAP operating margin. Propelled by the strong demand for our managed switch products within our Enterprise business segment, and enabled by the ongoing operational excellence of our team, we drove sequential top line growth of more than 8%, while attaining non-GAAP gross margin of 39.6%, yet another new all-time high for NETGEAR. These impressive results are undeniable signs of progress as we continue to execute our long-term growth and profitability strategy. For the quarter ended September 28, 2025, revenue was above the high end of our guidance range, coming in at $184.6 million, up 8.2% on a sequential basis and up 0.9% year-over-year. The third quarter's outperformance was once again a result of a strong showing by our higher-margin enterprise segment, benefiting from ASP and unit growth in ProAV managed switch products. The team worked tirelessly to improve supply in the quarter, which enabled a 16% sequential revenue growth for these products and meaningful double-digit growth year-over-year in end-user demand. We also saw all 3 of our businesses delivered positive contribution income for the second consecutive quarter. In Q3, we repurchased $20 million of our shares and ended the quarter with $326.4 million in cash and short-term investments. We delivered $90.8 million of revenue in the Enterprise segment for the third quarter, up 9.9% sequentially and up 15.7% year-over-year, above our expectations. Although we continue to be challenged by supply constraints around certain managed switch products in the enterprise business, the team executed well and was once again able to outperform our forecast for the quarter by working closely with key vendors to navigate these headwinds. Notably, in spite of these supply constraints, the revenue mix of our products from higher-margin enterprise segment continued to climb and grew both sequentially and year-over-year, adding to the corporate margin improvement. We continue to expect modest impact from the supply constraints in Q4 and expect to be back into a healthy supply position in Q1, so we can fully capitalize on the substantial and growing demand. In Q3, the home networking business delivered net revenue of $72.6 million, down 6.6% on a year-over-year basis and up 7.6% sequentially. The U.S. retail market remained extremely competitive, but with the introduction of our entry point WiFi 7 mesh offering in the Orbi 370, we were able to gain share in the WiFi 7 mesh category, and we saw similar share gains in WiFi 7 routers. We have moved past higher cost inventory and continue to benefit from an improved product mix of WiFi 7 offerings, coupled with streamlined channel execution. Revenue for the mobile business in Q3 was $21.1 million, down 20.7% year-over-year, but up 3.3% sequentially. Mobile benefited from an increased adoption of our high-end Nighthawk M7 Pro mobile hotspots in retail. With additional products expected to launch in the coming months, we believe the full benefit of our good, better, best strategy will build over time. Our focus in mobile technology really straddles both consumer and enterprise customers. As such, we will be reporting 2 business segments going forward with products and solutions built on mobile technology being in both businesses. Even though more than 50% of our mobile hotspot products sold through our service provider channel are to commercial end customers, the initial reporting of this revenue will remain in our Consumer business segment. We will continue to supplement reporting of revenue from mobile products sold to service providers and plan to add our cable modem and gateway businesses to this reporting as well since these products also enable services offered by these operators. This revenue call out will allow investors to isolate these declining businesses in their assessment of NETGEAR and our transformation. Now, moving on to an update on our recurring subscriber base. We continue to believe that focusing on increasing our recurring subscriber base is the optimal strategy to add high-margin revenue throughout our business while differentiating our offerings. We have made progress with our initiatives to transform these offerings, successfully moving more customers to our higher ASP Armor Plus offering, which was the driving force in growing our ARR by 17.2% year-over-year, reaching $37.9 million in the quarter. We remain confident we can grow our highly profitable ARR over time, and I'm pleased to share that we exited Q3 with 560,000 recurring subscribers. From this point on, my discussion points will focus on non-GAAP numbers. The reconciliation from GAAP to non-GAAP is detailed in our earnings release distributed earlier today. Non-GAAP gross margin came in at 39.6% in the third quarter of 2025, once again a new record and the fifth consecutive quarter of sequential gross margin expansion. This marked an 850 basis point increase compared to 31.1% in the prior year comparable period and a 180 basis point increase compared to 37.8% in the second quarter of 2025. Our gross margin in the current period benefited from an improved mix of our higher-margin enterprise business, success in moving past older, higher cost inventory, along with other benefits of operating with channel inventory at leaner levels relative to the year ago period. Drilling down to the profitability of our 3 business segments, all 3 segments were profitable on a contribution margin basis for the second quarter in a row and each grew their contribution margin by at least 440 basis points year-over-year. This is the truest indicator of the operational changes we've made over the last 6 quarters and the stellar execution of the team. Enterprise gross margin was 51%, up 630 basis points year-over-year, matching its highest level ever, led again by strong demand for our ProAV managed switches, driven by strong demand for our Nighthawk M7 Pro mobile hotspots, the mobile segment experienced the largest improvement in segment gross margin expansion year-over-year, growing 1,270 basis points to 31%. The Home Networking segment was aided by our improved mix of WiFi 7 products, the move into lower-cost inventory, strength in our higher-margin direct-to-consumer channel, which grew to approximately 15% of sales, improving our gross margin for this business by 590 basis points year-over-year to 27.7%. Total Q3 non-GAAP operating expenses came in at $69.2 million, up 25.1% year-over-year and up 5.4% sequentially as we had some one-time expenses related to moving our headquarters, and we continued our strategic hiring plans. We saw an increase in facility-related costs due to moving our new San Jose headquarters in Q3, but we expect this cost to normalize. Our headcount was 753 at the end of the quarter, up from 707 in Q2. As a reminder, we conducted a reorganization in January to enact approximately $20 million in annual savings and are reinvesting those savings in the areas of the business that we expect will deliver the best growth and profitability. This is reflected in the sequential operating expense and headcount increase, most notably within our enterprise business. Our non-GAAP R&D expense for the third quarter was 11.7% of net revenue as compared to 11% of net revenue in the prior year comparable period and 11.6% of net revenue in the second quarter of 2025. To continue our technology and product leadership, we are committed to continued investment in R&D. I'm pleased that we delivered non-GAAP profitability above the high end of our guidance range, enabled by improved top line led by enterprise growth and compounded by gross margin improvement. Our Q3 non-GAAP operating income was $3.8 million, resulting in non-GAAP operating margin of 2.1%, an improvement of 120 basis points compared to the year ago period and an improvement of 280 basis points compared to the prior quarter. As a reminder, the prior year period included a $10.9 million benefit from a legal fee adjustment relating to the favorable settlement of a legal matter. Our non-GAAP tax expense was approximately $3.4 million in the third quarter of 2025. Looking at the bottom line for Q3, we reported non-GAAP net income of approximately $3.5 million, resulting in a non-GAAP income of $0.12 per share. Turning to the balance sheet. We ended the third quarter of 2025 with $326.4 million in cash and short-term investments, down $37.1 million from the prior quarter due largely to $20 million in stock repurchases and changes in working capital. During the quarter, $7.4 million of cash was used by operations, which brings our total cash provided by operations over the trailing 12 months to $3.6 million. We used $9.7 million in purchase of property and equipment during the quarter, elevated from normal levels relating to improvements to our new corporate headquarters, which brings our total cash used for capital expenditures over the trailing 12 months to $17.1 million. In Q3, we spent $20 million to repurchase approximately 815,000 shares of NETGEAR common stock at an average price of $24.55 per share. We have approximately 2 million shares reserved in our current authorization, and our fully diluted share count is approximately 29.8 million shares as of the end of the third quarter. We're committed to returning value to our shareholders and plan to continue to opportunistically repurchase shares in future periods. I'll now cover our outlook for the fourth quarter of 2025. Within enterprise, end-user demand for our ProAV line of managed switches is expected to remain strong. And although we expect to continue to make improvements in our supply position, we continue to face supply headwinds, which may limit our ability to capture the full top line potential of this growing business. On the home networking side, we are seeing signs of the benefit of our broader product portfolio to address the market. On the mobile side, we expect revenue to be in line with Q3 as we await our new product introductions to round out the portfolio, which we don't expect to yield benefits until next year. Accordingly, we expect fourth quarter net revenue to be in the range of $170 million to $185 million. In the fourth quarter, we expect our operating expenses to be slightly reduced with our facilities costs normalizing now that we have transitioned into our new corporate headquarters with some offset as we further ramp our planned investments. We're focused on in-sourcing software development capabilities and enhancing our go-to-market capabilities supporting our enterprise business. Additionally, we expect a headwind to our gross margin of about 150 basis points, mainly related to the rising cost of memory as several of the large suppliers in this space have exited the DDR4 market. Accordingly, we expect our fourth quarter GAAP operating margin to be in the range of negative 7.3% to negative 4.3%, and non-GAAP operating margin to be in the range of negative 2% to 1%. Our GAAP tax expense is expected to be in the range of a benefit of $500,000 to an expense of $500,000. And our non-GAAP tax expense is expected to be in the range of $500,000 to $1.5 million for the fourth quarter of 2025. And with that, we can now open it up for questions.

Your first question comes from the line of Tore Svanberg from Stifel.

Congrats on the continuous progress here. My first question is on the gross margin headwind for the fourth quarter. Is that across the board for each of the 3 segments? Or is this mainly more tied to the enterprise segment?

Yes. Good question. So, the main headwind is coming from the DDR4 memory situation where the largest suppliers in that space have taken their products end of life. And at this point, there are smaller players who are trying to pick up capacity. Memory is in products in each of our businesses. I'd say it's more acutely felt on the home networking side at this point, but it does impact all 3 businesses.

Very good. And when I look at your revenue guidance, it's like a $15 million spread. Could you just talk about some of the puts and takes? What would have to happen for you to get to the higher end of the range versus lower end of the range? And I assume supply is part of it because you obviously have very good backlog visibility. But anything else that you could share with us as far as variability within that guidance range?

Yes, I'll start there, and CJ can certainly chime in as well. Supply is the big factor there. As we've said throughout the year, we're seeing tremendous progress on the managed switch side with the ProAV switches. We are still supply constrained. We are making progress there but really don't believe we'll be in a position to have safety stock in place until Q1 of next year. So that would be one lever. As you saw in Q3, the upside to the quarter that obviously impacted gross margins as well as the top line was that we were able to pull things in ahead of expectations. So that would be one potential lever there. The other thing would certainly be the success of the Q4 holiday promotional period and what happens in the home networking market, I would say, would be another factor to unlocking more towards the upside potential in that revenue guide.

Okay. CJ, I want to start by just acknowledging great progress on the gross margin front and very clear that your leadership and strategy towards pushing more of the enterprise business and quality of the business higher is manifesting itself in results. More recently, we've seen more headlines around TP-Link of late, and we obviously get a lot of investor questions on that. So, I just wanted to start on that subject. It seems like there's a lot of government activity around TP-Link. Just give us your sense of the latest of your understanding there and the potential timeline and opportunity on that.

Yes, sounds good. Recently, Bloomberg reported a significant amount of activity regarding TP-Link, indicating that an initial determination has been completed along with various administrative steps. Since then, I haven't heard much more. However, more broadly, the Senate has just passed the NDAA, which includes a plan to evaluate TP-Link as a Department of Defense-covered company. Additionally, the FCC voted to restrict networking equipment containing components from the Chinese covered list. There is an investigation into TP-Link in Texas, and new developments seem to be coming from Wisconsin as well. With all this activity, I feel more confident that something will happen eventually, although the timing remains uncertain. Our President is currently or soon will be meeting regarding this situation, which reflects the ongoing developments. On a related note, we've observed that customers are increasingly recognizing NETGEAR as a trusted U.S.-based public company, and we're securing significant deals that may have previously eluded us due to this positive perception. The messaging in the market is beneficial for us, and we're enthusiastic about the near-term prospects. Concurrently, there's a lot happening from the administration's side, and we will continue to monitor the situation closely like everyone else.

Got it. Makes sense. And maybe just a follow-up for Bryan. I know you have an Investor Day coming, and I imagine we're going to get a lot more information. I appreciate the detailed guidance for Q4. So, I think we've got a good handle on that. But a number of moving parts that are happening, and I'm trying to unpack when some of these things unwind or how long headwinds persist. Maybe a simple way to ask would just be, as we have to shape our models for 2026 and in particular, for Q1, is there anything that you might just have us be mindful of, whether it's on the margin front or growth front or channel inventory front, just so we can make sure that we're in good shape heading into that Analyst Day and not caught with something that we mismodeled or a surprise.

Certainly. I'll start by saying that we're thrilled and you kind of started your questions with this, that we're thrilled with the progress we've made on the transformation thus far and the unlocking of incremental gross margin performance on the business that certainly is putting us ahead of our plans. You may recall at the start of the year, we came in, we didn't think we would be profitable in 2025. And certainly, year-to-date, we're there. And you can see by the guide where we expect the full year to shape up there. There are certainly a lot of additional opportunities ahead of us. And as we've said, we are very much focused on driving towards long-term sustainable profitable growth. These things will require investments. We've made some investments this year. We obviously took some aggressive actions to strip out $20 million of annual cost to help fund some of those, but we still have additional investments to go here to really get this business to where we think it can get to. If I look at like if I look at the public estimates that are out there for next year, I think they're fairly reasonable when it comes to both the top line and the operating income side of things. And again, that's largely we do have investments that we need to continue to put into the business. Shorter-term or more near term, I should say, Q1, I would reiterate there is seasonality in the consumer side of the business. And while enterprise has gotten to about 50% of the mix, the other 50% is subject to some of those seasonal fluctuations. So Q1 seasonality typically off of the Q4 period, the markets would be down in the mid-teen percentage-wise. Certainly, that will impact top line leverage in the first part of the year. But as I said before, I think the public estimates that are out there for the full year 2026 are reasonable at this point.

Okay. And the mid-teens is just for the consumer side of the business, not for...

Correct. Yes, it's for the consumer side. Enterprise is not a seasonal business for us today.

First off, I wanted to ask about your considerable progress in growing your distributor channel for NETGEAR Enterprise. Is that correct? I was wondering if you could talk more about what's happening in the channel, what is attracting their interest in NETGEAR, and what feedback you’re receiving from them?

Yes, great question, Jay, and it's nice to see you on the call. I want to clarify that when we discuss our ProAV ecosystem partners and their growth, we're referring to the product integrations we're making with the broader AV ecosystem to enhance our product leadership and simplify the deployment of complex IP-based AV networks. I mention this to ensure it's clear, but we are also heavily focused on the enterprise side of our channel. We have several transformational initiatives coming to market, and our overall goal is to make NETGEAR the easiest company to partner with. We are launching a new partner program next week, on November 4, via webcast. Additionally, we have launched a new website as part of this partner program, and we will be introducing a new partner portal. We are closely monitoring the health of our channel, expanding our business with channel partners, and helping them work more seamlessly with NETGEAR. This is a significant aspect of our enterprise transformation, and we are excited about the progress we've made. To sum it up, I spent a week on the East Coast recently with both existing and potential customers, and their feedback has been very encouraging regarding our product strategy and our evolution in go-to-market capabilities. It's validating to receive this feedback directly from them.

Got it. That sounds great. Let me just follow up real quick. As you went through your prepared remarks, you mentioned several new product launches across all business units. Could you walk us through when we might expect new products over the next year? It doesn't have to be specific dates, just an idea of how to think about the upcoming product launches.

Yes, it's a good question. Philosophically, I don't like to talk about new products coming to market until we've actually launched them. We will be teasing out some stuff at Investor Day. And I think we're going to see you there at least on the webcast. So, I definitely tune into that. But across the board, we are innovating for our end customers and have both kind of new devices coming to market. But most importantly, our focus is on innovating on the software side, driving differentiation via software. And part of this change that we highlighted in the call of making mobile more of a horizontal capability is we have a strong belief that that's combining our mobile products with what we've previously been calling our home networking products allows us to drive a lot of differentiation in terms of having a single app, a single subscription with all of those products connected in one experience. And similarly, on the enterprise side, bringing our mobile products into our Insight Cloud management platform into our security experiences is quite differentiated. So, what you're going to see from us going forward is we've really got a consumer platform, an enterprise platform. And anything we launch is going to be connected into one of those for consumers on the one hand or our commercial customers on the other.

I look forward to seeing you in person at the Analyst Day.

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

Just a final shout out to the NETGEAR team. Really proud of the work that we've done to date on the transformation. And a little plug for our Investor Day. We've got exciting things to share. We're going to have some demos. I know many of the people on this call are committed to joining, but space is limited. So if you're interested in coming to New York on November 17, let us know, and we look forward to seeing you there.

This concludes today's conference call. You may now disconnect.