Rush Street Interactive, Inc. Q4 FY2020 Earnings Call

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the RSI Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note that this conference call is being recorded today, March 10, 2021. I will now turn the call over to Kyle Sauers, Chief Financial Officer.

Thank you, operator, and good afternoon. By now everyone should have access to our fourth quarter 2020 earnings release that can be found under the heading Financials Quarterly Results in the Investor section of the RSI website. Some of our comments will be forward-looking statements within the meaning of the Federal Securities Laws. Forward-looking statements are not statements of historical facts and are usually identified by the use of words such as will, expect, should, or other similar phrases and are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We assume no responsibility for updating the forward-looking statements. Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our fourth quarter 2020 earnings release. On the call today, we have Greg Carlin, Chief Executive Officer; and Richard Schwartz, President. We'll first provide some opening remarks and then open the call for questions. With that, I'll turn the call over to Greg.

Thanks, Kyle, and good afternoon everyone. Welcome to our first official earnings call as a public company. Before we start, I would like to thank RSI's incredible team and all of our owners and shareholders whose support has been critical to our transition from private to public company. 2020 was a monumental year for RSI, and 2021 is off to a very strong start. Both RSI and the online gaming industry experienced significant growth in 2020, and we don't see that trend ending anytime soon. With the success of online gaming in markets where it's been legalized, and with state governments looking for new revenue sources, online casino and online sports betting remain front and center during 2021 state legislative sessions. While more states have legalized sports betting than online casino, online casino generates more revenue than sports betting, and we anticipate that many states that have legalized sports betting will consider legalizing online casinos as well, similar to West Virginia. Our experience in New Jersey and Pennsylvania is that the online casino vertical is significantly larger and more profitable than the sports betting vertical. In fact, during 2020, online casino generated three times the revenue of online sports betting in those two states. In 2020, RSI was the second-largest online casino company in the United States. Our goal is to remain a leader in the online casino market, and our business model, including our platform design and our approach to marketing, is driven first and foremost by our deep understanding of casino customers. During 2020, we grew total revenue by 337% to $278 million. We achieved that growth as a private company with modest capital and with a small advertising and promotion expense of $56.5 million. Fourth quarter revenue alone was $100 million, up 28% sequentially, quarter-over-quarter. It also marks the eighth consecutive quarter of sequential revenue growth for Rush Street Interactive. One of the metrics I follow is our average revenue per monthly active user in the U.S. This was $328 during the fourth quarter, and $341 for the full year, up 73% and 53% for the fourth quarter and full year. At all times, we're focused on driving strong unit economics, and we expect further upside long-term as we continue to improve our product offering and fine-tune our marketing strategy. RSI ended 2020 with over $250 million of cash on hand, and if all of our warrants are exercised, our cash will increase by an additional $132 million, giving us significant balance sheet flexibility. We believe we have industry-leading customer acquisition costs and fast payback rates. We plan to increase marketing spend aggressively in 2021 to take advantage of this. In New Jersey, for example, arguably the most competitive online gaming state, we have seen cohorts pay back for marketing spend in approximately six months. Based on this success, we expect our marketing investments will drive meaningful revenue growth and long-term value by accelerating market share gains in all of our markets. I'll now discuss our market entry momentum. Today, we operate online gaming in nine jurisdictions, up from four jurisdictions at the start of 2020. Last year we launched online sports betting in Illinois, Colorado, and Iowa. In January of this year, we launched both online casino and online sports betting in Michigan and online sports betting in Virginia. We're planning to launch an online casino in West Virginia in the second quarter. In addition, we recently announced agreements for market access in Ohio, Maryland, and Missouri, subject to license availability, state law, and regulatory approvals. Our business development team is hard at work on potential market access opportunities across North and South America. In total, we operate today in states representing 21% of the U.S. population, and with our announced market access deals, we can reach more than 35% of the U.S. population. Before going live in new markets, we've begun to use our social casino, which is built on the same platform as our real money gaming platform, as an acquisition tool. This allows us to promote our brand and cost-effectively acquire potential real money customers prior to real money gaming going live in the market. In addition, we've demonstrated the ability to launch quickly in new markets because of our proprietary technology stack, as well as our strong operations team. We launched on the first day in Michigan and Colorado, and we were the first to launch in Illinois and Indiana. In 2021 and beyond, we expect to continue to improve our technology stack and expand our player base. We're far along and excited about the next upgrade cycle to our iPhone sports betting app and the launch of our Android App in the Google Play Store. My colleague Richard Schwartz will describe this later on the call. I'll now share our guidance for 2021, which we're increasing substantially today. We expect full-year 2021 revenues to be between $420 million and $460 million, this is up from our prior guidance of $320 million, and at the midpoint represents growth of approximately 58% year-over-year. This increase reflects our strong Q4 2020 results and anticipated growth in recently opened and existing markets plus the ability to increase investment in what we expect to be highly accretive marketing spend. With our New York Stock Exchange listing and the resulting increase in cash on our balance sheet, we believe we're well-positioned to take advantage of the substantial market opportunity in front of us. We remain focused on growing our existing markets, securing access to new markets, improving our technology stack, and analyzing potential acquisitions. We're excited about the future and the potential upside from investing aggressively in market share gains. We believe our growth curve is just getting started and look forward to executing our plans with confidence. I'll now turn the call over to our President, Richard Schwartz, who will describe our operating metrics in more detail.

Thanks, Greg, and good afternoon, everyone. I'll begin by describing our key operating metrics before touching on our geographic presence, our recent Michigan launch, and concluding with an update about our technology advancement. As you shared before, our strategy isn't to have the highest volume players but to focus on quality players who will bet and stay loyal to us for the right reasons and not because, for example, we over-bonus them on a sustainable level. We target players who appreciate the premium user experience that we offer, our leading selection of betting content, and all the little things we do for our users to reduce player friction. Greg highlighted these important data points earlier, but I want to reinforce them because it's really important. Our average revenue per monthly active user in the United States was $328 during the fourth quarter, and $341 for the full year, up 73% and 53% for the fourth quarter and full year 2020. This validates the success of our strategy to attract and retain high-quality players. As importantly, we aim to be efficient with our marketing spend and unit economics and believe that we register, convert, and retain players extremely well relative to many of our peers. In New Jersey, for example, an intensely marketed state where we don't have a land-based casino or retail sportsbook driving new online players to us, we have seen cohorts pay back for marketing spend in approximately six months. Based on our strong unit economics, we believe as we ramp up our marketing spend in 2021 and beyond, we'll continue to show strong returns on marketing spend. RSI will continue to pursue a highly dynamic, data-driven approach to marketing with a focus on acquiring players that we believe will meet our return on investment targets. As such, when we look at entering new markets, we choose to partner with well-known local brands and personalities in combination with national partners that have great local reach in our key markets. An example of this is our partnerships with the Pittsburgh Penguins, the Philadelphia Flyers, and Detroit Pistons. An additional RSI advantage is that our model targets a much broader and more profitable demographic than some of our competitors that rely heavily on the sports betting audience, which skews predominantly male at around 90%. At RSI, by comparison, we focus on the casino player demographic, a category that is more evenly split between male and female players. The benefit of this is clear in that we attract a broader player base. The unit economics of the average casino customer generates approximately five times more gross gaming revenue on the average sports bettor per month. Today, RSI operates online gaming in nine jurisdictions, with a 10th expected to come online in the second quarter with the launch to West Virginia. We operate both online casino and online sports betting in four markets: New Jersey, Pennsylvania, Michigan— which we recently launched in January—and the country of Colombia. We operate online sports betting alone in five markets: Illinois, Indiana, and Colorado in addition to recently commencing online sports betting operations in Virginia and Iowa, and we also operate a retail sportsbook in New York. But if and when legislation passes to enable land-based casinos to offer online gaming, RSI secured one of those licenses. We fully appreciate the importance of quickly adding online casinos to our existing sites in markets where only sports betting is currently authorized. As such, we have key market access partnerships already in place that will enable us to accelerate future online casino market expansion. Specifically, we have market access agreements in place with our partners to provide online casinos in Illinois, Indiana, Iowa, and Virginia, if and when those states authorize the expansion of online casino. We also have previously announced agreements in New York, Ohio, Maryland, and Missouri to provide online sports betting and online casino if and when either or both become authorized in those states, subject to license availability, state law, and regulatory approvals. It's important to note that in terms of potential tax dollars, online casinos represent a significantly more profitable revenue opportunity for the state. In both Pennsylvania and New Jersey in calendar year 2020, for example, online casinos grew to net each state almost three times the tax revenue that sports betting provides. Unsurprisingly, according to Eilers & Krejcik, the potential total addressable market for the online casino market is significantly larger than that of sportsbooks. I next want to take a moment to comment on the exciting launch of both online casino and sports betting in Michigan earlier in this first quarter. The reception and demand in Michigan has exceeded many expectations, and we're pleased by our success so far. We continue to see acceleration in results in Michigan with the average daily casino handle during the first week of March up over 65%, compared to the average we had in January. Market share will not be determined in one month or one quarter, but over the longer term. Our Michigan revenue in less than two months operating is already fast approaching where we are in New Jersey after four and a half years of operations. In fact, our average online casino daily handle in Michigan during the first week of March is already greater than it is in New Jersey over the same time period. We strongly believe that our differentiated player experience will generate player loyalty, as we have seen in other online casino approved states such as New Jersey, where we achieved strong profit contribution of over $10 million for the full year 2020. Even more exciting is the upside opportunity we have in Michigan and other casino markets after we launch our new iOS app in the state later this year. On the product front, we're constantly working on broadening and improving our offerings. Our commitment to user experience and customer service remains a key advantage for RSI, which we believe will continue to benefit us as we look to expand and constantly improve our proprietary platform and enhance how we acquire and retain new customers. On March 1st, the first day made possible by Google, we submitted applications to the Google Play Store for all of our Rivers Android apps. While a timeline for approvals and launch isn't yet determined, we anticipate that we will become one of the first operators in the United States to launch our Android Apps in the Play Store. The availability of our Android app in the Google Play Store will substantially improve the ease of access for Android users to our platform, which should further drive new customers to our platform. We’re also preparing a major upgrade next month to improve the user experience on iOS in all of our sports bet-only markets: Illinois, Iowa, Colorado, and Virginia. In addition, we’re expecting to launch an iOS app in the casino and sports betting markets in the second half of this year, which will also work to expand our customer reach and improve the user experience. That being said, our existing proprietary products in sites without an iOS app available have already proven to stand on their own. In Pennsylvania, for example, we were number one in online gaming revenues in 2020 without having the benefit of an iOS app. The fact that we were able to achieve such impressive results there speaks volumes for the strength of our product, service, and customer retention. Needless to say, the launch of our iOS product in our casino and sports betting market is an exciting prospect for us, as we anticipate it will further improve our acquisition and conversion rates. With that, I'll turn the call back to Kyle.

Thanks, Richard. Turning to our financial results, we posted fourth quarter revenue of $100 million, which brings our total 2020 revenue to $278.5 million. Our adjusted EBITDA loss for the fourth quarter of 2020 was $1.3 million, which brings our full-year 2020 adjusted EBITDA to a positive $4.4 million. Our adjusted EBITDA for the fourth quarter and full-year periods of 2020 and 2019 removes the effects of share-based compensation, the change in fair value of the earn-out liability, and the one-time payment from an affiliated casino partner which occurred in the third quarter of 2020. As such, our cost of revenue was $72.1 million during the fourth quarter, or 72% of revenue, up from $16.6 million a year ago, and for the full-year 2020, cost of revenue adjusted for the one-time affiliated casino payment was $199.9 million, also 72% of revenue, compared to $32.9 million for the full-year of 2019. Advertising and promotions expense was $23.1 million during the fourth quarter of 2020, compared to $8.7 million in the year-ago quarter, and $56.5 million for the full-year 2020 compared to $28.3 million a year ago. G&A adjusted for share-based compensation was $6.2 million for the fourth quarter of 2020 compared to $3.8 million a year ago, and $17.7 million for the full-year 2020 compared to $10.2 million a year ago. As was previously mentioned, our public listing was completed on December 29 of 2020, and we ended the year with $255 million of unrestricted cash on the balance sheet with no debt. On February 22, we announced the redemption of our publicly held warrants. Holders have until March 24 to exercise their warrants at the exercise price of $11.50 per share. The public warrants are exercisable for an aggregate of 11.5 million shares of Class A common stock, representing $132.25 million in total potential cash proceeds to RSI. With the proceeds from the warrant redemption, RSI would have over $375 million in cash on its balance sheet. The business combination anticipated warrant redemption proceeds puts us in a strong position to execute on our strategy, launch quickly in new markets when available, and increase spending on marketing to attract new players. As Greg mentioned, with this being our first earnings call as a public company, we're increasing our 2021 guidance to full-year revenue range of between $420 million and $460 million, or $440 million at the midpoint. This is up significantly from the $320 million that we anticipated earlier in 2020, and this increase reflects all the positive trends we see in the business that we've been talking about today, and includes only those markets where we’re live today and presumes that the professional income or sports calendars occur as currently planned for the year. And while we aren't offering additional line item guidance beyond revenue, as you've heard several times on the call today, we expect to significantly increase our marketing spend in 2021 and at a faster percentage rate than revenue growth as we invest in attracting new players in both our new and existing markets. As such, we also expect a loss at the adjusted EBITDA line, and with that, operator, we’ll open the line for questions.

Your first question comes from Jed Kelly from Oppenheimer.

Great, thanks for taking my questions. Just one on the guidance, just what gave you the confidence to sort of do the increase in the sales and marketing? And then Kyle, could you provide like a quarterly cadence on how we should view the guidance? And can you give us any sort of guidance around what you're expecting for EBITDA loss this year?

Yes, so maybe I'll start with the revenue guide, and the cadence and then let Greg or Richard talk about just the confidence of continuing to build on the marketing increase. So I'd say on the revenue guide, just to think about how we're going at it from a high level, we're expecting to grow our revenue year-over-year in all the markets that we're live today. We obviously have a set of assumptions for each market, thinks about the impact of how that growth looks like, building some variability for the pace of returns, from the marketing investments that we're really excited about. And there's just a ton of growth momentum in the market as a whole. And we're going to fuel that with our increased marketing effort. And that's going to, as we've said, several times here, it's going to accelerate our customer acquisition, we want to take advantage of that. If you think about Illinois, where we did not have a full-year contribution last year. So that's exciting for us to add that additional revenue on Pennsylvania, New Jersey should still be nice growth drivers for us. And then we've already talked a little bit about Michigan and while it takes a little while for these new states to ramp up, we’re really excited about how that'll contribute in ‘21 as the year goes on, just kind of thinking about where we were in Q4, and walking that forward into the start of 2021 in Q1, Q4 had a really good sports calendar, which was helpful with a little higher hold percentage in Q4 than we might have expected otherwise. So I just factor that into your thinking in terms of the cadence as we jump into Q1. But it gives us a lot of confidence about the range, and then in seasonality or cadence throughout the year without putting it into percentages by quarter. In general, we'd expect revenue to grow throughout the year. We've got new markets coming online, got a lot of exciting things happening. So I'd expect it to just kind of build as the year goes on.

And then on Michigan, pretty interesting. Just on the March KPIs. Do you know how your growth compared relative to the overall industry in Michigan?

No, we haven't seen that data yet. I think the only numbers released out of Michigan were for the month of January, which was the first 10 days. And it's hard to predict trends from 10 days of the launch just based on promotional expenses and everything else.

All right. And then just one more for me. On the New York State agreement you did with Penn, I guess it was sort of you gave them access to New York; you got access, I think, in three other states. If New York adopted a single skin per casino, would your skin override the Penn skin?

When you say our skin, the RSI skin, yes, RSI has the first skin in New York and Penn has the second skin.

Got it. Thank you, and congrats on the results.

Thanks.

Your next question comes from Ryan Sigdahl from Craig-Hallum Capital.

Good afternoon, guys. Congrats on the results, as well as the guidance.

Thank you, Ryan.

Just want to dig in helpful on the sequential commentary on guidance. Kyle, as we sit at $100 million in Q4, realized there's some unique things in Q4, it implies kind of minimal sequential growth throughout the year, despite two new states in Q1, West Virginia, Q2 coming online, et cetera. So I guess it implies a fairly sizable sequential decline from Q4 to Q1. Is that the right read?

Yes, I think we'll stick to full-year revenue guidance rather than guide into Q1. But I think I go back and think about the comments that we made about Q4 that are probably relevant for us, relevant for the industry is that there was a really good sports calendar and hold percentage in sports for us was a little better than expected. I think I saw that from others as well. So I don't know that I would think about it in exactly those terms. And since we're not guiding to a specific number for Q1, I don't want to say up or down necessarily. But we're obviously very excited about how Q1 is trending relative to what we were doing last year.

And then just on the app, strong performance in Pennsylvania, without an app in Michigan. I guess, what's the timing to get an app live in Michigan? And then secondly on that, why didn't you have one there day one?

I'll take that one, this is Richard. The timing for the casino markets like Michigan and Pennsylvania is the second half of this year. We do have an app for casinos sportsbooks in New Jersey for many years. But Apple had a change of its policy not too long ago, and we decided to revamp our entire app to address their sort of long-term needs of Apple's goals. And so we're now building out the product from scratch essentially the way we want it to be long-term. So we're excited for the development of that path. And we decided to focus on long-term success by investing and building something new, as opposed to trying to leverage something that already existed and may not actually serve the long-term goals of our company.

Good. And then one follow-up on Google. Good to see the application, any thoughts on what are you hearing on timing to get that approved? And then what states can you be live and or can you be in all of them, kind of once you're approved day one?

So there's, we have applied for all the markets that Google's supporting at day one, there are a couple of states, such as Michigan and West Virginia that are not authorized yet to submit an app store. So applications were to go live. So as soon as those are available, we'll be submitting in those markets. But the timelines are a little bit out of our control because there's a back and forth process and approvals that are going through the new processes, and it's not completely on us. But I can tell you that we're very aggressive and staying very focused on making sure we're doing everything we need to be one of the first ones to launch once it's available.

Last question for me, just you mentioned acceleration in marketing spend, any change in thought on promotional spend?

Yes, on promotional spend, we continue to really like to focus on quality players. And we're seeing that our retention in these players is really strong, and we like it they're with us for the right reasons that they're not there because, as we showed in our deck, let's post on our website for Pennsylvania we have bonus under the average market, and players are obviously drawn to the premium experience that we offer. So while we're considering as new markets open and different markets, which are we'll be modifying our strategy in each market, we're just certainly always looking at what the competition is doing. We do believe strongly that it's important that we focus on the experience of the user and not on bonusing players to the extent where perhaps it becomes non-viable longer-term. And then at some point, we have to pull back. We'd rather sort of offer the players the experience they're going to get and retain loyalty on that basis.

We've said this in the past that your experience in the bricks and mortar world is that, higher promotional spend doesn't necessarily lead to increased lifetime value of a customer and does not lead to increased wallet share. So I think that our promotional strategies are consistent with that.

Thanks guys, good luck.

Your next question comes from Stephen Grambling from Goldman Sachs.

Hey, I guess a couple of quick follow-ups. First on the guidance. Can you give us any thoughts around the split between mails and hotmails? And then in terms of what's embedded in the guidance and then what are the guardrails to think about it as it relates to how much you're willing to invest in marketing? And then one quick follow-up on that marketing side, just - can you just remind us of what your target ROIs are as we look to that ramp in marketing and the theoretical benefit to 2022 and beyond?

Yes, I'll begin by noting that I won't provide a specific breakdown of the impact of mails and hotmails on 2021. Regarding marketing expenditures, we haven't offered a precise figure for the year. Our strategy will remain flexible in executing our marketing plans, allowing us to seize available opportunities and ramp up when we see positive outcomes. We previously mentioned that in 2020, our marketing efforts were limited not due to a lack of excellent opportunities to invest and attract additional customers, but rather because of capital constraints, which are no longer an issue. As a result, we anticipate a significant increase in marketing spending in 2021, expecting it to outpace our revenue growth as we invest. Richard or Greg may want to add to this if they wish.

What I'll add is that we focus very heavily on our payback for each market in different markets at different payback goals based on what product categories are allowed and different tax rates in different markets. But we at a high level, we really focus very heavily on our net revenues and a percentage of marketing as a percentage of our net revenues. And as one can look at our model, this last year, we spent over $15 million on marketing, and we ended up with a very strong and very low percentage of marketing budget spent relative to our net revenue. So we have an opportunity, as Kyle mentioned, to substantially increase that marketing spend to get much more substantial marketing budgets flowing now that we have confidence that our unit economics are performing well. And it can justify a larger marketing spend.

And just a very quick clarification. So with that ramp, I guess the expectation would be that we would see customer acquisition first and potentially some additional ramp in that spending in the next year or thereafter?

In terms of timing, we're beginning and have been applying a larger marketing spend, and as others in the industry, of course, when you increase marketing spend in the current quarter, you typically will see the benefit in subsequent quarters and years. So that is going to take some time to ramp up. But the key is to increase spend, acquire a higher quantity of players, and hopefully keep it very quality and targeted as well.

The next question comes from Mike Hickey from Benchmark Company.

Hey, Greg, Richard, Kyle, congrats guys. First quarter, great results, great guide. Thanks for taking my questions. I guess the first one back to Michigan here just sort of curious on the, I realize this is just 10 days of results. Obviously, you've seen more than we have. I think one of the surprises maybe for some, certainly for us, was the success of sportsbooks like DraftKings and FanDuel in terms of share within the online casino market. Just sort of curious, your thoughts there on the competitiveness of those sportsbooks in casino. And the second part of that is I'm hearing that at least one of them is also sort of making their own games and having a lot of success. And I think you guys have really identified that on the casino side, your app is sort of differentiated and provides a lot of value. I'm just sort of curious what you're seeing on the competitiveness as some of your peers' games, and a quick follow-up. Thanks guys.

Rich, do you want to take that one?

Sure. On the first question about the sportsbook brands' performance in New Jersey, of course we've seen some data points showing that 40% to 60% of the fantasy databases converts to sports betting. So certainly there's a head start for some companies having in terms of very fancy databases and, in some cases, land-based casino databases at very large Detroit casinos that in past years have generated many multiples of hundreds of millions of dollars of database value. So we truly started from scratch in that market. But ultimately, we think that the growth is strong, and as we indicated, we're seeing some very, very fast growth in that market. But I would say that a lot of the players that may convert from sports betting will be playing table games, where of course we will have that as well. But we also, in addition to it, have a lot of online flap play, which really is exciting for our business because that's a big part of our growth engine. In terms of the games, we actually sort of pioneered that concept several years ago. We did create a couple of our own Blackjack games in New Jersey. And in fact, it's a top-performing random number generator game in that market for table games for us is our own game. So we definitely advocate for your own content. But of course, it has to be of a higher quality than you can get from third-parties. Otherwise, you're offering players to play an inferior product potentially because it's yours. We'd rather make sure that we offer content that is really world-class. And so there are opportunities for us to bring additional content that we're looking at, as something that we continue to explore.

Thanks, the second question is on Illinois. Obviously, you guys have had a lot of success there initially. It looks like during Q4, you may have swapped some share with FanDuel. But obviously still strong performance. Now we're seeing Barstool, I think, enter the market maybe tomorrow, or definitely near-term, can you just speak to sort of the competitive scenario you're seeing in Illinois on the sports bet side? And then also you talked a lot about sort of making some enhancements or improvements, maybe innovation on your sports betting app. Just curious if you think that will be beneficial in regaining some share in Illinois?

I can take that. So we do think it'll be beneficial in Illinois and actually all the markets where we are going to launch with our upgraded iOS sportsbook app. But as far as Barstool launching in the market, we think it's still early days of Illinois; you're going to see tremendous growth in the sports betting market this year. We still think we'll maintain our share. And if you look at our customer in Illinois, it generally skews a little bit older. And if you look at our average betting per customer, it's higher than the other operators. So we think we're positioned a little differently than Barstool's and some of the other competitors. So, I mean, but we do think it will grow the market when they launch.

All right, thanks guys. Best of luck.

That was our last question. I'll turn the call back over to Greg Carlin for closing remarks.

Thanks everybody for joining our first quarterly call. We look forward to providing an update on our continued progress when we report our first-quarter results in May. Thanks.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.