Rapid7, Inc. Q4 FY2023 Earnings Call

Good evening. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Rapid7 Fourth Quarter Earnings Conference Call. I would now like to turn the conference over to Elizabeth Chwalk, Director of Investor Relations. Elizabeth, you may begin.

Thank you, operator, and good afternoon, everyone. We appreciate you joining us today to discuss Rapid7's fourth quarter and full year 2023 financial and operating results in addition to our financial outlook for the first quarter and full fiscal year 2024. With me on the call today are Corey Thomas, our CEO; and Tim Adams, our CFO. We have distributed our earnings press release over the wire, and it is now posted on our website at investors.rapid7.com, along with the updated company presentation and financial metrics file. This call is being broadcast live via webcast, and following the call, an audio replay will be available at investors.rapid7.com. During this call, we may make statements related to our business that are considered forward-looking under federal securities laws. These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements related to the company's positioning, strategy, business plans, restructuring plans, and financial guidance for the first quarter and full year 2024 and the assumptions underlying such goals and guidance. These forward-looking statements are based on our current expectations and beliefs and on information currently available to us. Actual outcomes and results may differ materially from the future results expressed or implied in these statements due to a number of risks and uncertainties, including those contained in our most recent quarterly report on Form 10-Q filed on November 6, 2023, and in the subsequent reports that we filed with the SEC. The information provided on this conference call should be considered in light of such risks. Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements, and the reported results should not be considered as an indication of future performance. Rapid7 does not assume any obligation to update the information presented on this conference call, except to the extent required by applicable law. Our commentary today will primarily be in non-GAAP terms and reconciliations between our historical GAAP and non-GAAP results can be found in today's earnings press release and on our website at investors.rapid7.com. At times in our prepared remarks or in responses to your questions, we may offer incremental metrics to provide greater insight into the dynamics of our business or our quarterly results. Please be advised that this additional detail may be onetime in nature, and we may or may not update these metrics in the future. With that, I'd like to turn the call over to our CEO, Corey Thomas. Corey?

Good afternoon and thank you to everyone joining us on today's call. Rapid7 had a strong close to 2023, ending the year with $806 million in ARR, growing 13% over the prior year while delivering revenue, operating income, and free cash flow above our guided ranges. Sustained customer demand for our platform offerings anchored by our detection and response and cloud security solutions and improvements in execution supported a strong top-line finish to the year. At the same time, our focus on operating efficiency and streamlining our cost structure drove $84 million of free cash flow in the year, exceeding our target and reflecting nearly 500 basis points of free cash flow margin expansion over the prior year. As we look back at the last year, there are a few highlights that stand out. First, we continue to drive product innovation across our Insight platform. We further elevated our market-leading capabilities and our compelling customer value proposition with advancements in areas like AI-driven cloud anomaly detection. We exited the year with a scaled security operations platform that expands over their fragmented attack surface, covering strategic workloads across detection response, cloud native security or CNAPP, and vulnerability management. Secondly, our sales force successfully reoriented towards our platform consolidation solutions to meet customers' most pressing needs, while navigating larger and longer deal cycles with conversion rates that improved as the year went on. Our package offerings gained steady traction throughout 2023 and now constitute roughly $100 million in ARR driven by a healthy contribution from both landing new customers and upgrading existing customers. We have reflected the deal size and conversion dynamics of our growing package mix into our forward expectations for seasonality given the onboard success of our consolidation value proposition. Lastly, we rightsized our cost structure to build a foundation for efficient growth. This was a critical initial step that positions us to be able to drive efficient growth in our business over time. A great example of our progress in 2023 is illustrated by a new customer win in the fourth quarter. A publicly traded media company with a mature security program was extensively evaluating new solutions and looking to consolidate multiple vendors across their security operations center or SOC. The large and complex nature of the company's digital footprint and their lean team, combined with Rapid7's ability to work better together with their endpoint provider, made us stand out against legacy SIEM competitors. This customer chose Rapid7 for three main reasons: the breadth of our cloud-native platform, our ability to consolidate critical capabilities across multiple SecOps categories, including SIEM or XDR and VM, and lastly, our ease of adoption and integrations with other security vendors. We displaced a competitor with our Managed Direct Complete consolidated offering, securing a multiyear deal worth over $0.5 million in ARR. We believe the progress we made in 2023 sets us up well to win market share, accelerate growth, and be a leading security platform consolidator in the next few years. Looking forward, we see 2024 as a critical year to accelerate our platform differentiation by driving focused investments to lead in mainstream cloud security adoption, drive security productivity with AI, and extend our service and partner ecosystem to deliver sustainable and efficient growth going forward. We are delivering this strategic execution against a backdrop of stable, yet noisy demand environment. Amidst this backdrop, we are leaning into our areas of strategic focus in building our security operations platform for acceleration. We're investing and innovating in areas where we see substantial demand over a multiyear horizon and where there is a clear opportunity to elevate our customer value proposition and the services ecosystem that supports it. We are making deliberate investments to build the strongest managed SOC ecosystem and deliver a leading data platform that contextualizes risk across a fragmented complex environment. Here are the four key areas where we are focused on and investing in as we build our leadership position in the extended SOC. The first is on integrating and contextualizing more data across the digital attack surface, particularly as security teams are managing data across traditional and cloud environments. Ease of consolidation of data on our Insight platform allows customers to apply the best operational context to their security programs. The breadth and quality of our platform features are strong, and our internal SOC has years of expertise and data to better understand the attacker. In 2024, we're focused on elevating the customer experience with a better, more integrated Rapid7 technology platform to support fragmented IT environments. The second area of investment will be around driving cloud security adoption within mainstream enterprises. As security programs mature, lean teams with significant resource constraints increasingly need to secure their cloud environments. We believe the majority of cloud security buyers in the coming years will look different from the typical buyer we've historically seen. We are focused on delivering CNAPP solutions that are simple to use, affordable, and integrated into our broader security operations platform. Additionally, our packaging and distribution are being fine-tuned for our mainstream enterprise customers. We are also extending our capabilities, building on the solid traction in cloud security posture management to be a leader in cloud detection and response. The third area of focus is the use of AI for improving security operations. Our AI-powered SOC continues to drive our leadership in managed detection response, one of the areas of highest growth in customer demand within security operations. We are focused on using machine learning and large language models or LLMs to improve our SecOps coverage and detection in multiple areas, including anomalous activity monitoring, analyst workflows, and quality assurance. In addition, we are working on leveraging LLMs to drive efficiency and accelerate response times. We are building and refining these capabilities inside our SOC and manage delivery ecosystem to help get product innovations to market faster, and we'll continue to expand on these AI capabilities with a focus on productivity and efficiency, all while safeguarding our customers' data. Lastly, we will be investing in our services and partner ecosystem with an emphasis on growing key channel relationships, accelerating our MSSP partnerships, and increasingly engaging with customers in marketplaces like AWS. As we look out at the rest of the year, Rapid7 has a compelling opportunity to build better, more connected customer experiences across our platform. We believe that the foundational work we're doing will position us to drive market share gains and higher durable growth over the medium to long term. At the same time, we're focused on optimizing for efficient growth and remain laser-focused on scaling free cash flow. Consistent with our previous commentary, we expect to generate at least $160 million in free cash flow in 2024. Looking towards our overall financial outlook for the year. As we process a healthy finish to 2023, balanced with our expectation for a continuation of the recent stable demand backdrop, we remain focused on providing a high confidence range for our 2024 financial outlook, which Tim will detail in his remarks. We are focused on making deliberate platform and services investments to reaccelerate and drive durable, long-term growth. We are optimizing around our technology and distribution channels, which we believe will position us for the best multiyear growth outlook. With that, thank you for joining us on the call today. I will now turn the call over to our CFO, Tim Adams, to share additional detail on our financial results and outlook.

Thank you, Corey. Good afternoon, everyone, and thank you for joining us on the call today. Before I turn to the results, a quick reminder that except for revenue, all financial results we will discuss today are non-GAAP financial measures unless otherwise stated. Additionally, reconciliations between our GAAP and non-GAAP results can be found in our earnings press release. Rapid7 ended the year with $806 million in ARR, growing 13% over the prior year. Growth was led by healthy customer demand for our integrated security operations platform and supported by expansion and innovation in our detection and response and cloud security capabilities. We saw strong traction as our consolidated offerings ramp throughout the year with improving sales conversion rates as the combined value and efficacy of our solutions increasingly resonate with mainstream enterprise customers. ASPs increased as we benefited from larger deals tied to our package offerings. We saw roughly balanced contributions from new and existing customers throughout the year, with particular strength in cross-selling to our existing base. These dynamics speak to the effectiveness of our technology and our strong value proposition as customers consolidate across our Insight platform. Our customer base grew 5% year-over-year to end 2023 with over 11,500 customers globally. ARR per customer grew 7% over the prior year to approximately $70,000 at year-end. Full year revenue of $778 million grew 14% over the prior year and exceeded the high end of our guidance range. Product revenue also grew 14% over the prior year to a full year total of $740 million. Our commitment to profitable growth, including the changes we made to our cost structure in August, drove meaningful expansion in operating income and free cash flow, and we exceeded our guided ranges on both metrics for the year. We delivered $102 million of operating income which represents full year margin expansion of over 800 basis points. We generated $84 million of free cash flow, which reflects an 11% free cash flow margin for the year. Now turning to our fourth quarter results. Total Q4 revenue of $205 million was up 11% over the prior year and above the high end of our guidance. Product revenue grew 13% year-over-year to $195 million, while professional services declined 10% to $10 million as we actively deemphasized certain lower-value services. Our international revenue grew 21% over the prior year and represented 23% of total revenue for the fourth quarter, while North America revenue grew 9% and represented 77% of total revenue. Product gross margin was 76% in the quarter and total gross margin for the quarter was 74%, both in line with the prior year. Operating expenses in the fourth quarter reflect changes to the cost structure starting in the third quarter of 2023. Sales and marketing expense declined 5% year-over-year and represented 32% of revenue, down from 38% in the prior year. R&D expense was slightly lower than the prior year and represented 16% of revenue, down from 18%, while G&A represented 6% of revenue, down from 8% in the prior year. All in all, fourth quarter operating income of $41 million was better than our guidance and represented a 20% operating margin exiting the year. Our adjusted EBITDA was $48 million in the quarter and net income per share was $0.72. Moving to our balance sheet and cash flow. We ended the year with cash, cash equivalents, and investments of $439 million compared to $373 million at the end of Q3 2023. We delivered better-than-expected fourth quarter cash flow from operations on higher operating profitability, which helped drive over $60 million of free cash flow in the quarter. This brings us to our guidance for this year. As we enter 2024, we assume a relatively stable macroeconomic backdrop and customer spending environment, consistent with the back half of 2023. This assumption informs our high-confidence growth outlook for ARR this year. For the full year 2024, we expect ending total ARR of $885 million to $895 million, which represents growth of 10% to 11%. As Corey shared earlier, this range reflects our strategy to focus this year on deliberate investments for more efficient, durable, medium- to long-term growth. In terms of seasonality, as deal sizes get larger and reflect a scaling contribution from the success of our platform and packaged deals, our new ARR linearity assumptions for the full year reflects slightly stronger seasonality with a naturally lower contribution in the first quarter. Turning to the income statement; we expect total revenue for the full year to be in the range of $848 million to $856 million, representing growth of 9% to 10%. As we continue to focus on these strategic areas of our business, we expect product revenues to grow slightly faster than this range, offset in part by professional services revenue which we expect to decline to approximately $30 million for the full year. On profitability measures, we anticipate strong growth in operating income which we expect to be in the range of $150 million to $158 million for the full year, implying operating margin expansion of roughly 500 basis points. We expect net income per share to be in the range of $2.10 to $2.21 based on an estimated 75.1 million diluted weighted average shares outstanding. For full year 2024, we expect to generate at least $160 million in free cash flow. This implies roughly 800 basis points of free cash flow margin expansion. In terms of free cash flow seasonality, we expect a modest contribution in the first quarter, driven by a number of cash expenses that are concentrated early in the year, including the FY '23 bonus payments and timing of tax payments. We would then anticipate a notable ramp in free cash flow in the second quarter. Moving to quarterly guidance; for the first quarter of 2024, we expect total revenue in the range of $203 million to $205 million, representing year-over-year growth of 11% to 12%. We expect non-GAAP operating income for the first quarter in the range of $37 million to $39 million and non-GAAP net income per share of $0.52 to $0.55, which is based on 74.4 million diluted weighted average shares outstanding. We made important progress in 2023 across product innovation, go-to-market improvements, and rightsizing our cost structure. This year, we have a compelling opportunity to build on that foundation to position ourselves for reacceleration and share gains in the next few years. Thank you for taking the time to join us on the call today. And now we will open the call for questions.

Your first question is from Hamza Fodderwala at Morgan Stanley.

Seems like a lot of opportunities for consolidation within security operations among your customer base. I'm curious, can you talk a little bit more about how you're working with some of your strategic services partners to help drive some of that consolidation and how you're offering perhaps some of your own services as well to augment and complement what your partners are offering too?

It's a great point, Hamza. Most customers right now are trying to figure out how to deal with the twin factors enhancing security programs that have to be improved. We talked about the security backlog of demand, need for talent, need for projects and the fact that they have to do it on a budget. One of the things that we're looking to do is to consolidate their security programs but to do it in a way to drive more efficiency. That requires partners and talent on that. We are actively building out our managed services partner ecosystem. Our partner ecosystem in general, which is a big area of focus, includes partners that can provide cost-effective services to our customers that allow them to upgrade their security programs along the way. We are incredibly attractive to partners because we allow them to look at the landscape across the SIEM and XDR as well as cloud security and additional vulnerability management. So they can look at both the overall attack surface and risk side of the equation as well as the detection and response side of the equation. That's attractive to partners. We're also working on this near and dear to our partners' heart is the ability to process more and more of the alerts that come in from other security products. I would just say it's a very big focus that we have, both with our partners and ourselves. We do have services offering and NDR services internally inside of Rapid7. But our focus is an ecosystem approach to tackle this problem that customers are demanding.

Your next question comes from the line of Matt Hedberg from RBC Capital Markets.

This is Anushtha on for Matt Hedberg. Can you talk a little bit more about the assumptions embedded in the 2024 guidance as it relates to the conversion rates, the net new pipeline as well as the macro environment?

Yes. At a high level, I have to say, we think the macro environment is fairly stable. We're optimistic. As we did our restructuring last year, we oriented around how we can deliver the best long-term free cash flow growth, which is the intersection of ARR growth, which, again, we want to drop share and win share over the medium term and be a share leader in ARR growth, and as well as margin expansion. Those are the two factors that we see as driving free cash flow growth strategy. To your question about how we think about guidance and alignment, we're really on that strategy that we outlined in the second half of the year of saying we want to make sure we have very, very high confidence and conviction that we can hit targets that are outlined, but also ensure we can exceed one or more of the targets. If the market gets a little bit incrementally noisy, then we can focus more on market expansion, which is an effective way to drive free cash flow expansion. So we really think about guidance as a setup to make sure we can both hit and exceed those targets under different circumstances with the trade-off between margin expansion and free cash flow growth. We always want to focus on market share, but we don't control the market.

Your next question comes from the line of Saket Kalia from Barclays.

Tim, maybe my first one for you, a great expense control for next year to drive that free cash flow guide. Maybe the question is, how are you thinking about billings growth as part of that free cash flow equation? I know ARR is the focus, but there seems to be a lot of confidence there. But any thoughts on how to model billings versus that ARR guide as we think about those contributors to free cash flow?

Yes, Saket, thanks for the question. Generally, you would think of billings and ARR growth rates being very similar. There is a minor exception for 2024, which I mentioned in my prepared comments; we expect our professional services revenue to be down modestly in '24 compared to '23. So that gives you a minor headwind to billings relative to ARR growth, but they're pretty tightly aligned with that one exception.

Got it. Corey, if I could squeeze in a follow-up for you. Really balanced growth in ARR here in '23 between customer growth and ARR per customer. But it's that latter one I want to focus on just the ARR per customer and just the success and scale that you're seeing with packages. Maybe the question is, what are some of the non-VM products that you're finding customers are using the most? Obviously, they get offered a lot of the products as part of those packages. Which are the products that you find that they're using the most as they adopt those packages?

Yes. Look, the big driver or one of the biggest drivers, I would just say, is detection response, which is we shared last year. It is a scaled business. It has very healthy growth rates, but it also has a lot of late customer demands. It is a must-have. We've always said that's what we like about that business. It's a must-do, must-have business. People have to be able to monitor attacks in their environment. It's not to say that the exposure or attack surface management is not valuable. We think it’s incredibly valuable. In fact, we're continuing to focus on that area of growth. In some ways, our strategy is to be a market adoption leader in the vulnerability exposure and attack surface management areas because that really sets us up well to ensure we provide value on the attack surface response to our customers overall. But from a raw dollars perspective, it's clearly detection response generating the dollars. Even though we're focused on having broad distribution on our overall risk management and exposure management solutions.

Your next question comes from the line of Jonathan Ho from William Blair.

I just wanted to follow up on Saket's question and maybe delve a little bit deeper into your guidance for 2024. Is there a way for you to maybe break out for us what you expect at a high level or just directionally in terms of the growth rates for traditional VM detection and response as well as the cloud side of things as well?

Thank you for the question. It's challenging to break that down distinctly because, as we consolidate our platform offerings, virtual machine features are integrated into all platforms. We have strong confidence in our growth guidance, which is based on the ongoing trends we are observing. I believe there is potential for further growth. We can position our cloud security solutions in a more mainstream capacity, although we are not accounting for that in our projections for this year. Instead, we see it as a significant growth factor over several years. We anticipate similar progress to what we achieved last year. The cloud security market is substantial, transitioning from niche providers to mainstream offerings, which is something I mentioned earlier. This transition could also provide some upside this year. A crucial element is our ongoing advancements in detection and response, which we expect to maintain. We see potential in emerging areas, although they are not included in our current assumptions. Our guidance is based on what we can observe and our strong confidence in those metrics.

The only thing I would add, as you mentioned in your prepared comments, is we're really seeing the market adopt these packages and it's resonating well with customers. It's over $100 million of ARR, and they were introduced roughly about a year ago. We're really starting to see that traction, which gives you a larger ASP per customer.

Your next question comes from the line of Rob Owens from Piper Sandler.

Corey, I was hoping you could maybe drill down into that commentary about driving more cloud security in a mainstream environment and exactly what you're implying there. And number 2 for me is just around customer count and looking at the 11,500, but obviously, have seen declining customer counts over the last couple of years in terms of either net new or year-over-year growth. What's the catalyst to get that moving again? Is it the partner network? Is it maturation of the sales force in terms of selling the platform? Just what's going to get that moving?

Yes. I think both of those are important. On the first question, when we think about mainstream cloud, we had direct access when we started in the cloud. We have a very healthy cloud business and a growing cloud business. We’re accelerating our investment in the cloud because we've found that the early adopters of cloud security technologies were cloud security specialist teams. These specialist teams were not the main security teams focused solely on cloud security. If you think about the mainstream enterprise, they need security as part of their core. It has to be integrated, highly functional, easily accessible, and should keep bringing results. They have adopted cloud security progressively, and we see it as a massively untapped market. We're looking to invest in simplifying and assessing risk, detection, and response in cloud environments as part of overall security operations. Now regarding customer count, I think we have plenty of space to grow customer count. However, I want to grow it strategically. The customer count volume from years past had many transactional sales in it. I actually like the 11,500 customer count because we've made a much more strategic base that allows us to achieve our total addressable market and material ARR per customer. Going forward, we expect that to continue to increase. We will grow the customer base, and sales productivity and ARR per sales rep are expected to improve this year. Our focus on that partner ecosystem is critical; we believe we are ready and equipped, and we have a compelling portfolio.

Your next question comes from the line of Gregg Moskowitz from Mizuho.

This is Mike on for Gregg. Perhaps a follow-up to Rob. You mentioned last quarter that following the restructuring, you really zeroed in on your installed base. Did that focus continue with the same intensity this quarter? Or have you recalibrated back to your traditional approach with respect to new logos and expansion business?

I would say that, look, we are in noisy markets. It's actually straightforward to tighten and focus on your installed base. I think that bias hasn't changed. We are looking to expand the installed base because our ASPs are growing, and the package consolidation is successful. Instead of forcing it, we're being very thoughtful about our distribution and how we drive that with partners. Our near-term goal is to take market share and drive growth, and our investments this year will be focused on partnerships and distribution, growing at a higher rate than our direct sales force.

Your next question comes from the line of Adam Tindle from Raymond James.

Okay. Tim, I just wanted to start out with the fiscal '24 guidance, which looks really impressive on profitability. If I look at it, revenue is going to increase about $75 million year-over-year and EBIT up over $50 million year-over-year. So call it a 75% or so contribution margin on that. The question would be, because fiscal '23 had risk and cost control, how you thought about the buildup to drive similar operating leverage in fiscal '24?

Yes, Adam, we try to be very thoughtful when we go into the planning for 2024. A lot of that stems from the actions we took 6 months ago with the restructuring. We really tried to be deliberate at a department level regarding where we're going to make our investments. Corey mentioned some investment in innovation. I would expect R&D to increase slightly as a percentage of revenue. However, we can maintain nice leverage across the board in sales, marketing, and G&A. Based on the way we built the plan for this year, we can double that free cash flow to at least $160 million.

Okay. And quickly, Corey, I wonder how you would reflect on the impact on growth. You added $90 million of net new ARR this year. It looks like guidance implies around $85 million net new ARR next year, so flat to slightly down. What would it take to push to a new level of net new ARR? Do you think you could do so while holding this level of profitability?

We have plenty of growth levers in the business, whether you look at distribution partners or new products and capabilities. If we see the same market momentum and consistency as Q4, and if the market improves, we have the capacity to grow faster. However, our baseline guidance reflects a conservative outlook. We're committed to strong free cash flow growth, which we want to come from higher ARR growth. If the market is tighter, that free cash flow can come from margin expansion, which Tim and our finance team can achieve.

Corey, a question. I wanted to read the ARR outlook and maybe ask you this from a different angle. Stacking up all the advantages you see with package momentum, larger deal sizes, and the rising ASPs, why would we see a deceleration in net new ARR? Can you provide insights into the conservative elements factored into the outlook?

That's a very fair question. First, we expect the market to be noisy. While Q4 was consistent and stable with strong funding, I’m not going to assume that all security projects will get funded. Over the past year, there were periods when security teams were told to slow down investments. I hope that regulatory environments encourage funding. However, we must keep an eye on the pace of funding. We don’t have a demand problem; we need to ensure security funding keeps pace.

We're seeing strong demand from CISOs because they have a backlog of projects, but the CFOs have slowed funding for some of those projects.

Your next question comes from the line of Gray Powell from BTIG.

Yes. That last answer was really thorough, but I did want to ask one follow-up. If I look at net new ARR trends, you bounced back to positive in Q3 and had healthy Q4 results. There's a slight decline implied in the guidance. At what point do you think we might return to positive net add growth? Could that happen in the second half of 2024 or is it more of a 2025 event?

Similar to the last question, I believe we can grow faster if the market is stable and good. We have the capacity to grow, but our focus on free cash flow means we take a conservative approach at the outset. If the market remains stable, we can expect to grow faster.

Your next question comes from the line of Joshua Tilton from Wolfe Research.

This is Patrick on for Josh. Corey, you mentioned that the environment was noisy a few times now. Just wondering if you could unpack that a little bit further. One of your competitors mentioned that the mid-market was strong in the fourth quarter. Curious if you saw any of that outsized strength in the mid-market space or maybe increased competition?

Yes, mid-market was stable and consistent for us and it met or exceeded our expectations. We made adjustments at the beginning of last year, which positively impacted our results. Regarding the 'noisy' environment, when we talk to CISOs and security teams, we see lots of demand, but securing project funding has been the noise. It can fluctuate, and we've seen some positive upticks lately. As for competition, there is a competitive landscape, but we feel good about our positioning.

Your next question comes from the line of Rob Galvin from Stifel.

Corey, last quarter, you spoke of a growing number of longer-term contracts with weighted average deal duration up 20% year-over-year. I'm wondering if you've seen the same trend persist into Q4 and what your expectations are for 2024 on this front?

Yes, it was strong again in Q4. We're really pleased to see contracts being extended beyond 1-year contracts with many 3-year contracts happening both on the new and renewal side.

Yes, this speaks to what we talked about, about us becoming a strategic provider. If you look at the past three years, we have become a very strong strategic security provider, and you can see that reflected in our consolidation offerings and the duration of contracts customers are willing to engage us with.

And that's all the time we have for questions. I will now turn the call back over to Corey Thomas for closing remarks.

Well, thank you all for joining us on the call today, and I wish you all a good evening. Thanks.

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