Welcome to the Vivid Seats Q1 2022 Earnings Conference Call. My name is Richard, and I'll be your operator for today's call. As a reminder, the conference is being recorded. I will now turn the call over to Kate Copouls, Head of Investor Relations. Ms. Copouls, you may begin.

Good morning, and welcome to Vivid Seats First Quarter 2022 Earnings Conference Call. I am Kate Copouls, Head of Investor Relations at Vivid Seats. Joining me today to discuss Vivid Seats' results are Stan Chia, Chief Executive Officer; and Larry Fey, Chief Financial Officer. By now, everyone should have access to the company's first quarter earnings press release filed earlier this morning. We have also provided supplemental earnings slides. The press release and earnings slides are available on the Investor Relations page of Vivid Seats' website at investors.vividseats.com. During the course of this call, management may make forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to the risks and uncertainties as described in the company's earnings press release and other filings with the SEC. On today's call, we will refer to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures that we believe provide useful information for our investors. You will find a historical reconciliation of adjusted EBITDA and adjusted EBITDA margin to the corresponding GAAP measure in the earnings press release, supplemental earnings slides and other filings with the SEC. And now I would like to turn the call over to Stan.

Good morning, everyone, and thank you for joining us today. I'm excited to speak with you about our strong record-setting first quarter and the continued momentum we are seeing across our business. In the first quarter of 2022, we achieved our highest ever Q1 Marketplace gross order value (GOV) and revenues. The results we delivered in the first quarter demonstrate growing consumer demand over the last year and our outpaced performance in that environment. Fans are eager to attend live events, and we are well positioned to capitalize on that demand. As such, we have raised our 2022 guidance. Today, I'll share an update on the progress we made in the first quarter and discuss how we are continuing to position Vivid Seats to win as a differentiated technology marketplace with multiple products and platforms that facilitate engaging and memorable experiences for fans. Then I'll turn it over to Larry to share our financial results in more detail. Heading into this quarter, we were well positioned after finishing 2021 with record revenue in each of the second, third, and fourth quarters as live events rapidly return. I'm proud of our team, which continued delivering excellent results in the first quarter of 2022, including $742 million in Marketplace gross order value or GOV, $131 million in revenues, and $21 million in adjusted EBITDA. As a technology platform and marketplace, we sit at the intersection of supply and demand. From this vantage point, in Q1, we continue to see the strong and growing consumer demand that we saw in the fourth quarter. And it's been exciting to witness the energy of fans connecting with each other and their favorite artists or sports teams through live event experiences. During March Madness, we saw the most in-demand college basketball single-game ticket that we've ever tracked with Duke versus UNC. And in advance of the fall 2022 football season, we've seen excitement from consumers building since early March when our website traffic spiked with fans looking for tickets even without an NFL schedule. Additionally, even with the MLB season delay, we're seeing much stronger demand for baseball tickets compared to 2019, which was the last baseball season not impacted by the pandemic. It's clear that there is a strong drive from consumers for connection, and we are seeing the fulfillment of this desire happen through live experiences, which is reflected in purchasing patterns. Specifically, the percentage of concert ticket orders for more than 4 tickets has increased since pre-pandemic 2019. As consumers continue to seek out this kind of connection, we remain committed to empowering and enabling these moments. We are also seeing success with the investments we've made in our marketplace that continue to bring differentiated value to our customers, whether they are fans or sellers. For fans, our superior technology powers a marketplace that delivers an extensive breadth and depth of tickets at a competitive value along with an industry-leading rewards program. On the seller side, our superior technology powers SkyBox, the leading ERP for sellers. And both sides are supported by our excellent customer service as recognized by Newsweek for the last three years. These factors collectively give us the confidence that we truly have a right to win. We are not alone in this belief. Recent sentiment from both fans and sellers alike, who have used our product or our frequent ticket buyers show that our efforts have earned us some of the industry's highest Net Promoter Scores. We've seen this reflected in both the data we track as well as independent sources where we had the highest recommendation percentage among peers. As a growing and innovative technology company with validated customer sentiment, brand awareness is an important pillar for us to build upon our momentum and draw more users onto our platform. Alongside our brand investments, we will also continue to invest in performance marketing channels to further grow our Marketplace GOV. Amplifying our message to maximize awareness of what differentiates us continues to be an opportunity that we believe will have long-term benefits. While we are still early in these efforts and live events are a low frequency category, we ultimately believe strategic investments here will drive lifetime customer value through acquisition efficiency and retention benefits. That said, we view the return on investment profile as a J curve with at least several quarters before results appear in our margin profile. We also continue to innovate, evolve, and expand our offerings to engage with and reach new live event fans. As I said last quarter, user engagement within our product ecosystem remains central to our long-term strategy. We continue to quickly grow users of Betcha, our daily fantasy sports app. And those users are highly engaged, continuing to place more than 10 entries per month on average. Also, we have started surfacing cross-platform content and are pleased to note that customers who are active on both the Vivid Seats and Betcha platforms play more frequently, place larger entries, and deposit more than those who solely use the Betcha app. Betcha is currently in a hyper-growth phase off a small base, and we are investing in infrastructure to scale our offering. While our core business remains a live events marketplace, we view Betcha as TAM additive. And the high overlap between sports fans' interests in live events and daily fantasy sports will allow us to leverage profitable customer acquisition and drive increased engagement through a more relevant and differentiated platform ecosystem. While we continue to make progress building and integrating our products and brand, we are still early in unlocking Betcha's potential and remain excited about its future prospects. We are also leveraging partnerships that amplify brand awareness while delivering incremental reach and revenue. We will continue to drive brand efforts with category-endemic leaders, who reach a significant share of the live event-going population. And we have seen our year-to-date GOV generated by key brand partners outpaced 2019 by a wide margin. With our long-time partner ESPN, we recently launched Hot Ticket, a Vivid Seats branded and exclusive segment that spotlights the most in-demand matchups across all mediums, audio, digital, and television. Additionally, in March, we strengthened our partnership with Capital One with the launch of Capital One Entertainment, a new ticketing platform for Capital One Rewards cardholders. Built and powered by Vivid Seats, this digital-first booking experience unlocks exclusive access to unforgettable experiences across sports, music, and more for Capital One Rewards cardholders. We created this new experience by leveraging our marketplace inventory, technology, fulfillment, and customer service capability. We will continue to seek out mutually beneficial partnerships in our existing ecosystem as well as in other categories that improve the experience for our customers while leveraging our existing brand, traffic, and reputation. Before I turn the call over to Larry, I wanted to congratulate and thank both Riva Bakal, who has been promoted to the new role of Chief Product and Strategy Officer; and Ted Pickus, who has been promoted to Chief Accounting Officer, for their dedication and leadership. Both Riva and Ted are tremendous proven leaders who have been integral to Vivid Seats' success over the past few years. As we continue to invest in talent and support our proven leaders, these promotions were natural choices. All of us at Vivid Seats are proud of their accomplishments and privileged to work alongside them. And I'm confident that their talents will continue to move our business forward and deliver shareholder value. Again, congratulations and a sincere thanks to both Riva and Ted. With that, I will turn it over to Larry.

Thank you, Stan. I am proud to present our financial results for yet another record-breaking quarter as our marketplace flywheel continues to perform. As Stan mentioned, we achieved our highest Q1 Marketplace GOV and Revenue ever in the first quarter of 2022 despite the impact of unexpectedly high cancellations. These results speak to the underlying strength in the demand environment and give us the confidence to raise our 2022 GOV and revenue guidance early in the year. First quarter Marketplace GOV, marketplace orders, and revenues were all well above pre-COVID levels from Q1 2019, which we view as the most relevant comparison period given the severe impact of COVID during Q1 of 2020 and 2021. Our record Q1 Marketplace GOV was driven by increases in both marketplace orders and average order size. Average order size was $368 for the quarter, which represents a 12% increase to 2019 levels. We have included average order size by quarter from 2019 to Q1 of this year in the appendix of our earnings presentation to provide additional historical context given the heightened average order size volatility experienced in 2020 and 2021 due to COVID. We have historically seen average order size grow 3% to 4% annually. Similar to Q1 Marketplace GOV, Q1 revenues of $131 million were up substantially compared to both 2019 and 2021. Our peak rate, which we calculate by dividing our marketplace revenues by our Marketplace GOV, was approximately 15% in Q1. While we reported rate was lower than in Q4, our underlying take rates remain largely consistent with historical levels when considering the impact of our loyalty program, which is accounted for as a contract to revenue, and other adjustments such as cancellation-related charges and chargebacks, which were elevated in Q1. The higher-than-expected cancellations in Q1 were comprised of a mix of both COVID and non-COVID-related items. The Omicron variant impact on cancellations in Q1 was largely confined to January and reduced substantially upon the reduction of case counts. Subsequent to Omicron, there were several significant cancellations not related to COVID, including the MLB lockout, Celine Dion, and Foo Fighters. These non-COVID-related cancellations accounted for roughly half of the cancellations in the quarter. In the first quarter, we generated $21 million of adjusted EBITDA and a 16% adjusted EBITDA margin. We continued our investments into our brands, Betcha and our public company infrastructure while also positioning our business to support higher GOV after running very lean during the pandemic. We believe we have now rightsized our G&A cost base at a more sustainable run rate. Our EBITDA in the quarter was also impacted by the previously noted higher-than-expected cancellation-related items. Specifically, canceled GOV in Q1 2022 was 4.5% of pre-canceled GOV, which compares to 1% in 2019. When an event is canceled, we refund customers and receive the ticket cost back from sellers but generally do not recover other expenses such as marketing. As such, our adjusted EBITDA would have been roughly $4 million higher with an adjusted EBITDA margin roughly 300 basis points higher had cancellations been consistent with 2019 levels. In February, we completed a refinancing that further reduced our debt balance and interest expense. This refinancing reduced our debt principal outstanding to $275 million, extended our debt through 2029, reduced our interest rates, and provided us with a $100 million undrawn revolving credit facility. We generated $24 million of cash from operations in Q1 and ended the quarter with $314 million of cash and $39 million of net cash on hand. In an environment of rising interest rates, we are well situated as a growth company that also has a long track record of profitability and strong cash flow conversion. We will deploy our cash and balance sheet to compete and also consider M&A for synergistic opportunities and further enhancing the product and technology that power our flywheel. Following robust demand in Q1, coupled with the MLB lockout resolution, which includes the full 2022 schedule, we are raising our 2022 financial guidance. We now anticipate 2022 Marketplace GOV to be in the range of $2.8 billion to $3.05 billion, representing 22% year-over-year growth at the midpoint. We are also raising our 2022 revenue guidance to the range of $520 million to $555 million, equivalent to 21% year-over-year growth at the midpoint. Due to the cancellation headwinds experienced in Q1, we are maintaining our EBITDA guidance at $110 million to $115 million. Our adjusted EBITDA guidance continues to reflect investment in our brand, investments to scale our daily fantasy sports offering, and the build-out of our public company infrastructure. Relative to 2019, the aggregate spend in these categories collectively represents $33 million of incremental expense. Our robust cash flow generation allows us to pursue multiple exciting growth levers in our core as well as TAM additive areas such as Betcha. We continue to believe our adjusted EBITDA margins will be at or above 30% in the long term as we reap the benefits of these near-term investments. Even in 2022, as our full-year guidance implies, we do expect margins to improve from the first quarter as cancellations trend back toward historical levels. I'd like to contextualize our strong Q1 performance and our now higher 2022 guidance within the broader macroeconomic environment and specifically within the live events environment. Our marketplace is a barometer of supply and demand, and order momentum through Q1 is suggestive of a healthy environment. We believe our business has built-in protections against inflation, as higher ticket prices will result in more GOV and because our revenue is based on a percentage take rate, higher revenues. Most of our costs are variable, and we anticipate they would broadly move in response to inflation in a similar manner as our GOV and revenues. We are aware of the broad concerns regarding the macroeconomic environment and how that may impact consumer discretionary spending. I'd first like to confirm that our business is geographically focused in North America, and we do not have meaningful exposure to any of Ukraine, Russia, or China. More broadly, our record volume for the past four quarters indicates demand momentum in the short term, and secular trends that are in our favor as we look further out. While the potential impacts of a recession would depend on specific facts and circumstances, the combination of secular tailwinds favoring experiences over goods, coupled with consumers being deprived of live events during the pandemic, gives us confidence in continued strong demand across our categories. On the supply side, artists are eager to tour again post-pandemic as touring provides as much as 90% of artist income. We are seeing event capacity added for 2022 and hearing encouraging commentary around supply in 2023 and beyond.

Thanks, Larry. In conclusion, Vivid Seats continued to break records this quarter, and I'm truly excited about the momentum we are seeing in our business. We remain confident in our long-term business outlook. And as we look to the future, we believe that our differentiated offering, superior cost structure, exceptional leadership team, and scale will allow us to continue to drive meaningful growth and capitalize on opportunities that drive value for shareholders. And with that, operator, I will open it up for questions.

Operator Instructions. Our first question on line comes from Mr. Ralph Schackart from William Blair.

First question, just in terms of brand investment and increased investments in performance marketing, Stan, I think you talked about on the call, can you maybe just give us some perspective on how you're seeing those returns in both categories? You talked about the ROI profile as a J-curve, but maybe just sort of give us a sense of kind of return on that spend and what you're seeing. And then I have a follow-up.

Yes, sure. Ralph, yes, I think first and foremost, as we continue to invest in brand and product, and as we shared, I think we're seeing our efforts really resonate with consumers. Across the board, all of our sources tell us that I think our investments there are yielding in the largest percentage of consumers recommending us. And we're really excited about all those Net Promoter Score increases. As we then look through, I think, where we're seeing some of the impacts of the brand, I think one of the more exciting components as we look at the NBA, NHL season that just ended. I think we've seen upwards of a 10% increase in repeat rates, which I think are a combination of our brand and rewards programs working effectively. And then certainly on the performance marketing side, as we continue to invest in all things marketing, we expect that to ripple through those efforts as well.

Great. Maybe just if you could talk to more recent kind of quarter-to-date performance. Obviously, people want to get out again now that restrictions are lifted. But how do you think about that in context of increasing variants? Are you seeing cancellations at all? Or how is that maybe impacting the business?

Yes. Obviously, I think I was looking at everything, we look for safety first among consumers. But as we see trends, and I point back at current quarter, all commentary around the industry, we continue to see a lot of bullishness in the space, fans wanting to get out there, our average order size, as we talked about, higher than historical growth rates as I think demand continues to outpace supply. And perhaps one other industry to look at is travel; I think you also look at how much are people traveling to get to events. And we've seen fans now traveling almost more than 20 miles more than they used to in order to get to an event. So I think overall, we continue to see largely a lot of excitement from consumers and willingness to go to events.

And then, Ralph, I know there was a good amount of mention around the cancellations in Q1 and how they were higher than we expected, largely on the back of non-COVID-related items. I think we can say that, while we don't want to jinx it, as we sit here about halfway into Q2, we've seen a very meaningful reduction in cancellations to date in Q2.

First, in terms of demand here remains pretty strong, and you sort of touched on this a little bit, but could you talk about what's sort of embedded in your guidance from the macro standpoint including elevated gas prices, consumer spending, and possibly new COVID variants?

Yes. As we established our guidance, it was during the early stages of inflation, when there was a stronger belief that the transitory factors would continue. At that time, our perspective did not account for the most recent developments, which suggest inflation may be more persistent and could lead to rising interest rates. However, overall, the situation in our category appears to be quite resilient. We have not observed a significant impact on demand or consumer behavior that aligns with what others have mentioned. While this is not a guarantee that things won't change, we are currently seeing consistent demand trends similar to those we observed when developing the guidance.

Got it. That's very helpful. And then secondly, can you maybe just talk about how attendance and pricing have been trending for some of the marquee Q2 sporting events like the NBA playoffs, NHL playoffs, Masters, NCAA, etc.?

Yes. Sure, Maria. I think NCAA, I mean, maybe I'll start there. That was one. When we looked at that, pretty incredible across the season, I think a lot of renewed interest. I think some of the marquee things we've talked about there, that final Duke home game, I think we saw prices there rivaling Super Bowl prices, right? So I think it's such a strong group. And certainly, when we look at the actual tournaments under the same lens of how much is demand outpacing supply, we certainly saw that to be the strongest tournament we've ever seen. And what you look at really more recently, perhaps this past weekend, I think with F1 in Miami, we've seen F1 sales and certainly with a lot of renewed interest in the category tripling what that has been historically on the platform and average order size there north of $3,500. So I think we continue to see some of the marquee events, as you mentioned, draw a lot of strong interest from crowds and fans out there.

This is Francois on behalf of Stephen Ju. I know it’s still early, but could you provide an update on the details and planned product integration with Betcha? What insights have you gained so far? Also, what cross-promotion or revenue synergy opportunities do you see for the future?

Sure. Thanks for the question. Look, we remain really excited about the Betcha opportunities. As I think the fan base and both in terms of the product offerings and the increased ability to learn more about customer interest through the platform continue to be really compelling reasons for us to invest and to think about integration in the right way. When you look at what we've done, you can clearly see if you look into the Betcha product that we've enabled single sign-on capability, meaning you can actually log into the Betcha app with your Vivid Seats login, which then allows us a lot of insight and the ability to understand interest again across multiple platforms. When you look at what we've been able to test, and I alluded to this in the prepared remarks, we continue to see users who are using both of our products today result in a much more engaged user across the platform, right? Whether they're playing more, whether they're depositing more, we're continuing to see that user engagement across that, which continues to fuel bullishness on our side as we move forward with integration across the product and brand.

Got it. And then just one follow-up on I think the revamp of the website and the app has been a key initiative. So can you talk about kind of what kind of directional improvements you may be seeing so far in terms of engagement or retention? I know you mentioned the 10% increase in repeat rates, but was that from the revamp of the website and app? Yes, just general improvements you're seeing as you roll out these changes.

Yes, sure. I think all of these things work together, right, as you look at our investments around brand, product, improved web, improved rewards program. I think the stat I shared earlier is one of all those things working together where we've seen repeat rates in two sports categories increase double digits from where they've been historically. I think it's something we're very excited about. The other thing I'd point you to, as we think about all of these investments collectively, is our ability to become somewhat of a discovery channel for users. And as we talked about, we've seen traffic coming to our website around NFL even before a scheduled release, right? So I think to us, I think again that's a fantastic sign of people coming to us and using us as a discovery channel, learning about the brand and subsequently at the right time converting over when there's a transaction. So I think all those things are a great culmination of all the efforts that we put into investing behind our product and our brand.

And I might add one thing. As part of the new web rollout, there's both the front-end difference but then also some back-end improvements that allow us to iterate more quickly, run more A/B tests, etc. And while that's an ongoing process and a benefit that will bear fruit over subsequent quarters and years, we've already seen in the first few months after we were live a number of those experiments yield meaningful improvements in click-through rates, as you start tracking through our funnel. And so we're very excited about what that back-end enhancement will enable in terms of new enhancements to the front end.

This is Dave Peterson filling in for Shweta this morning. I have a quick question following up on the earlier demand question. How much visibility do you have into demand trends for the year? What do you see as leading indicators of demand?

Yes. I think we can certainly look to a few different elements. As you think about the marketplace, there's an intersection of supply and demand. And so step one is verifying that you have supply and ideally growing supply. And I think we feel quite good that those indicators have been and remain quite strong, and the duration of that strength seems to be extending, not shortening. And generally speaking, that supply particularly in areas where there's variability like concerts, where they don't need to go on tour, will only come online if there's a belief that there's ample demand for it. So while it's certainly difficult to prognosticate on how people are going to feel six months from now, I think all of the indicators that you can see with some historical lag continue to remain positive. And then what we're seeing in the performance that we spoke to for the quarter, certainly, demand was robust throughout that period. So the real-time feedback was strong as well. So other than the theoretical concerns around shouldn't higher gas prices have an impact, shouldn't decrease in stock prices have an impact? Other than that quantification, we are not seeing or have anything that we can point to that would suggest a meaningful shift downward.

Great. And just to kind of follow up on that, for the quarter, any particular region or vertical live sports, concerts, or theater that you could call out in Q1 that came in stronger than expected?

Yes, we had a strong quarter for concerts, which aligns with what Live Nation is reporting about a very strong calendar for Q2 and Q3, along with a lighter calendar for Q1. They postponed some events due to ongoing COVID concerns, giving themselves more time. Additionally, there is a backlog of events from previous years that are now scheduled for 2022, with many concert artists eager to hit the road this year. The summer is the peak concert season, so we expect to see increased ticket purchases in Q1 as people plan for summer shows. We did notice that strength in concerts during the quarter.

Stan, Larry, congrats on the quarter. All right, so first question then a follow-up. So how do you think about when you have excess sales like you did in the quarter and choosing between reinvesting back in the business from a technology standpoint or incremental marketing spend or letting it flow through to the bottom line?

Tom, thanks for the question. I think for us, our long-term strategy has guided us on this, right, which is to make sure that as we continue investing, we see tangible returns over the right horizon for us. As we continue to see, I'd say the leading indicators to our investments across the marketing and product front, they've all been rather strong, right. We've talked about if you start from how our investments in product resonate with consumers and sellers, I think the data is out there, right. Whether it's our data or independent sources, I think all of those investments are yielding higher satisfaction among that group. And then the question becomes is that satisfaction translating into monetizable value for us. And as we look at increased repeat rates, as we look at the ability to continue to outperform on driving customers and GOV into our ecosystem, I think those all look like great long-term investments for us where we continue to have confidence in that. And so I think as we continue to invest, I’d point to all of the signs remaining extremely encouraging that we are making investments in the right areas. I think the strength of our core business further allows us the ability to do that, right. As you look at a business that has always been structurally profitable and where we're able to convert over 100% of free cash, I think that allows us a lot of the ability to invest in the things that yield long-term results for us and our shareholders.

I would add one thing, Tom. I think a lot of folks out there having to change their stripes in reaction to a palpable shift in the market and its view on profitability. I think we have the fortune of having long been focused on profitability all the way back to when the business was founded, but through the private equity ownership. And so there is already built into the DNA a view that every project has to stand on its own from an ROI standpoint. If it's not working, you stop it. If it is working, you put more fuel on it. So no real shift to our posture relative to historical.

Yes, I appreciate the question, Tom. I always enjoy when Larry highlights his private equity background, which helps us maintain a disciplined approach. Regarding the area you mentioned, the key for us in making investments is identifying complementary opportunities where we can generate synergy with our existing assets. A great example of this is Betcha, as its consumer base aligns well with ours. The signals of increased consumer interest in the product excite us. Additionally, the fact that it's additive to our total addressable market is another positive aspect. These principles—synergy, consumer value, engagement, and being TAM additive—will continue to inform our decisions, both for organic and inorganic growth. As we evaluate inorganic opportunities and consider the build versus buy decision, we are in a strong position with a robust balance sheet and effective cost structure, allowing us to accelerate our efforts when opportunities arise.

Stan, you touched on this in your prepared remarks, but I thought the Net Promoter Score data was really interesting. Are there a couple of key issues that you could really point to that's driving that delta especially on the seller side between Vivid and the rest of the competition? And I have an unrelated follow-up after.

Sure. Andrew, thanks for the question there. I think if we look at it, if you start on the sell side, I think it just comes back to product and service. I think Vivid's origins, I think with two tremendous founders with lots of experience in the sell side of the business, I think our product and our service strategy. Again, as truly a marketplace with two sides, we've never forgotten that we have customers on each side of the equation. And when you look at what we've done in terms of investing across our SkyBox platform, which continues to be the leading ERP with new features, better data, and better integrations to allow sellers to grow and run their businesses independently, I think it's no surprise that the investments we've put there on top of, I would say, customer service and customer experience. We've certainly invested across that space as well. When you hear about our investments in our customer service, that certainly extends to the seller side. And so I think you see that difference certainly reflect in the seller sentiment on the NPS side. As you look on to the fan side of the equation, I think all the things we've been investing in for the past two to three years are truly coming to light and resonating, again, with folks who have actually used the product and are familiar with us and our frequent ticket buyers. Our investment in customer service is recognized as one of the best, and our rewards program is coming through as a clearly differentiated offering. The discovery elements across our enhanced web and app product also contribute to the ecosystem across the buy side and the sell side, where the differentiated features are translating into more value for our constituents. That truly, I think, is reflected in the NPS scores that we see across the category.

Yes, I believe we had a fairly unique experience moving forward with the Foo Fighters, as they and Celine Dion are both top performers. Together with MLD, they were similarly sized, and these three accounted for about half of the cancellations. Therefore, you can estimate a meaningful tour size in the range of $6 million to $7 million of gross overall value, depending on the number of shows and cancellations. I think that's a reasonable assumption for that arena style.

Thanks, everyone, for joining us today to discuss our record first quarter. This concludes our call. Have a great day.

And thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.