Earnings Call Transcript - SPSC Q4 2024

Operator, Operator

Good day and welcome to the SPS Commerce Q4 2024 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Irmina Blaszczyk. Please go ahead.

Irmina Blaszczyk, IR Representative

Thank you, Nick and good afternoon, everyone and thank you for joining us on SPS Commerce's fourth quarter and full year 2024 conference call. We will make certain statements today, including with respect to our expected financial results, go-to-market strategy and efforts designed to increase our traction and penetration with retailers and other customers. These statements are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to our SEC filings, specifically our Form 10-K as well as our financial results press release for a more detailed description of risk factors that may affect our results. These documents are available at our website, spscommerce.com and at the SEC's website, sec.gov. In addition, we are providing a historical data sheet for easy reference on the Investor Relations section of our website spscommerce.com. During our call today, we will discuss adjusted EBITDA financial measures and non-GAAP income per share. In our press release and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP financial measures, including reconciliations of these measures with comparable GAAP measures. And with that, I will turn the call over to Chad.

Chad Collins, CEO

Thanks, Irmina, and good afternoon, everyone. Thank you for joining us today. SPS Commerce continues to execute its mission to provide the retail industry with solutions to optimize trading partner relationships. We delivered a strong fourth quarter and another year of solid performance. For the full year 2024, revenue grew 19% to $637.8 million. Recurring revenue grew 20% with fulfillment growth of 20% and analytics growth of 8%. In 2024, we added valuable products to our portfolio with the acquisitions of Vision33's SAP Business One integration technology, Traverse Systems and SupplyPike. And on February 7, we announced the closing of our acquisition of Carbon6, which builds on SPS's acquisition of SupplyPike to extend the reach of our network and positions us with clear leadership in revenue recovery solutions, supporting the supplier communities of the two largest global retailers, including the rapidly growing Amazon marketplace. By powering highly collaborative supply chains, SPS builds long-standing partnerships with retailers like Canadian Tire, the number one retail brand in Canada. They engaged with SPS in 2001, driven by the need to support various omnichannel fulfillment models across their network, with more than 20 years of partnership supporting a significant growth trajectory Canadian Tire trusts SPS's retail expertise to help them make the right decisions as they strive for supply chain resilience among evolving retail dynamics. GNC is the world's largest global specialty health and wellness products retailer and one of SPS's long-time customers, operating as both a retailer and supplier. GNC partnered with SPS to automate data exchange across their entire supply chain, improving collaboration with over 1,000 vendors and more than 30 retailers and grocers. In addition, using SPS's analytics solution, GNC shares point-of-sale data to enable its vendors to optimize inventory management and sales strategies. GNC was also a Traverse Systems customer before our acquisition and leverages the platform to gain complete visibility into every part of the purchaser life cycle. They were able to isolate the root causes of problematic shipments and worked with vendors to raise the advanced shipping notice compliance rate from 76% to 92%. This resulted in better visibility into inbound shipments, allowing GNC to improve the time to value of its inventory. BISSELL, a leading manufacturer of home cleaning solutions, uses SupplyPike's automated revenue recovery solutions to consolidate data from retailer portals into a single user-friendly platform. This gave BISSELL the visibility they needed to save millions in disputed deductions across multiple retailers. Having access to the data on one platform also helped BISSELL gain actionable insights into deduction trends across retailers, identify areas for improvement and optimize revenue recovery strategies. Canadian Tire, GNC, and BISSELL are great examples that demonstrate the possibility of wallet share expansion across SPS's supplier network. I would now like to spend a couple of minutes on our growth opportunity. Last year, we committed to providing an updated view of our addressable market. Over the last several months, we worked with a third-party strategy consulting firm to evaluate the size of SPS's market opportunity, taking into consideration our current product portfolio. We identified the applicable industries, determined potential customer count and potential wallet share and we currently estimate our addressable market to be $11.1 billion globally, including $6.5 billion in the U.S. The $11.1 billion TAM equates to approximately 275,000 recurring revenue customers on average spending of about $40,500 per year. As we look at the global market opportunity, we address the needs of all sizes of customers, small, medium, and large. We have included several slides in our investor presentation to demonstrate this updated view of our addressable market. Our expectation is that going forward, we will continue to report the global number of recurring revenue customers and average revenue per user on a quarterly basis and provide the information related to the penetration levels across our customer categories on an annual basis. To summarize, we are pleased with what we have accomplished in 2024. And I'd like to congratulate the SPS Commerce employees for their unwavering commitment to excellence and exceptional understanding of the retail supply chain. With the depth and breadth of solutions we offer today, we are uniquely positioned to support all trading relationships and continue growing our network to move the world of commerce forward. With that, I'll turn it over to Kim to discuss our financial results.

Kim Nelson, CFO

Thanks, Chad. We had a great fourth quarter of 2024. Revenue was $170.9 million, an 18% increase over Q4 of last year. Recurring revenue grew 19% year-over-year. Adjusted EBITDA increased 18% to $49.6 million. For the year, revenue was $637.8 million, a 19% increase and recurring revenue grew 20%. The total number of recurring revenue customers increased to approximately 45,350 and wallet share increased to approximately $13,300. Adjusted EBITDA grew 18% to $186.6 million. We ended the year with total cash and investments of $241 million. Now turning to guidance. For the first quarter of 2025, we expect revenue to be in the range of $178.5 million to $180 million which represents approximately 19% to 20% year-over-year growth. We expect adjusted EBITDA to be in the range of $49.5 million to $50.5 million. We expect fully diluted earnings per share to be in the range of $0.39 to $0.41, with fully diluted weighted average shares outstanding of approximately 38.7 million shares. We expect non-GAAP diluted income per share to be in the range of $0.80 to $0.84, with stock-based compensation expense of approximately $15 million, depreciation expense of approximately $5.4 million, and amortization expense of approximately $9.2 million. For the full year 2025, we expect revenue to be in the range of $758 million to $763 million, representing approximately 19% to 20% growth over 2024. We expect adjusted EBITDA to be in the range of $227.5 million to $231 million, representing growth of approximately 22% to 24% over 2024. We expect fully diluted earnings per share to be in the range of $1.93 to $1.99, with fully diluted weighted average shares outstanding of approximately 38.9 million shares. We expect non-GAAP diluted income per share to be in the range of $3.78 to $3.84, with stock-based compensation expense of approximately $63 million, depreciation expense of approximately $23.5 million, and amortization expense for the year of approximately $39.8 million. For the year, you should model approximately a 30% effective tax rate calculated on GAAP pretax net earnings. In summary, SPS Commerce delivered strong fourth quarter and full year 2024 performance. We believe that SPS' leading retail network and competitive product portfolio position us well to consistently deliver on our target revenue growth and adjusted EBITDA profile which remain unchanged. With that, I'd like to open the call to questions.

Operator, Operator

And your first question today will come from George Kurosawa with Citi.

George Kurosawa, Analyst

Chad, Kim, maybe just to start on this new TAM analysis you guys have rolled out here. It seems like relative to the prior analysis, the big needle mover here was quite a significant step-up in wallet share. I'm curious if you could just talk us through what kind of underpins this new view. I mean, obviously, you have expanded the products but kind of any color on how you guys came up with this number?

Chad Collins, CEO

Yes, sure, George. So we did a quite extensive set of work over the last several months. You'll recall, in our last earnings call, we made a commitment to deliver an updated view on the opportunity sometime in 2025. And so I'm pleased that we're able to do that here on this call. Working with this top-tier strategy consulting firm in partnership, we identified all the industries applicable for suppliers in our network. We determined the total population of potential customers and then applied some reasonable addressability factors to bring those numbers down. Then what we did is we looked at our product portfolio and the distribution of our customers in three size buckets: small, medium, and large, assessing the potential average revenue per customer based on current spending levels with certain customers and how addressable the product portfolio is into each one of those sizes. That resulted in a significant step-up in two areas. First, the total potential customers was much larger than our previously stated potential customer count. Secondly, as you noted, we observed a sizable step-up in the potential wallet share with each of the customers. I think that wallet share, in particular, is something that we validated quite closely. It's important to point out that in each of these small, medium, and large buckets, we already have existing customers that exceed our target wallet share. So that gives us confidence that we can bring some of our existing customers up to the target over time and take advantage of this market opportunity.

George Kurosawa, Analyst

Okay. Really interesting. I appreciate the color. I wanted to ask about your pipeline of enablement campaigns. I know you guys have done some work on improving your visibility into what that pipeline looks like. If you could just talk about how we're set up today? And if there's any kind of color you can give on what that pipeline looks like in terms of how it informs the mix of net new logos versus wallet share for 2025?

Kim Nelson, CFO

Sure, George. When we look at 2025, we feel really good about the opportunity we see with our community enablement campaigns. To your point, there's more visibility closer in than out later in the year. But at this point, when we look at that visibility for this upcoming quarter, Q1, we do see that the customer count versus wallet share will probably be similar to what we experienced in Q4. So we still see a lot of opportunity to grow both customer count as well as wallet share based on the pipeline we see in the community, but the mix from customer versus wallet share is likely closer to what we experienced in Q4.

Operator, Operator

Your next question today will come from Dylan Becker with William Blair.

Dylan Becker, Analyst

I appreciate the TAM analysis. It seems there is significant potential across both customer segments and spending capacity. If we consider that the long tail is primarily SMB-focused, how should we approach the unit economics and prioritization within those segments? Chad, you mentioned that larger customers tend to spend more, as opposed to a larger number of smaller customers who might have limited opportunities for additional products.

Chad Collins, CEO

Yes, sure. Great question, Dylan. In summary, we found opportunities in each of the small, medium, and large customer size categories for a substantial amount of continued addressable customer count in each of those. It's important to understand that our business model and the customer buying dynamics do follow different patterns. At the small size and slightly into the medium, we are most likely to attract new customers through our community enablement programs that we run with the retailers. We find, especially on the small side, that it's often their first entrance into these types of digital connections, so it's a bit more greenfield. For large customers, there are fewer total potentials compared to the small segment, but the wallet share potential is higher. These larger customers are typically on a replacement cycle, and this is where our channel go-to-market strategy fits in because it allows us to gain access when there are ERP or supply chain system changes, a logical time to transition from their older on-premise systems to our cloud-based network approach.

Dylan Becker, Analyst

Got it. That's very helpful. Maybe, Chad, sticking with you, too, when we were out at NRF, obviously, there's been more of this emphasis on traceability, at least in the grocery segment to some extent but maybe that proliferates to other end markets as well. How should we think about kind of traceability mandates impacting fulfillment and tracking, and the focus on inventory management layering into the fold of some of these supplier networks?

Chad Collins, CEO

Yes. Sure. Anytime there's a government-mandated traceability requirement, we typically see an increased need for collaboration between supplying and buying organizations. In particular, there's been an increased focus on traceability for food safety, which has driven incremental interest in connecting the traceability dots from the suppliers to the buying organizations.

Operator, Operator

And your next question today will come from Lachlan Brown with Redburn Atlantic.

Lachlan Brown, Analyst

Given the fluidity of tariff announcements over the last few weeks but also given the uncertainty leading into it, what are you seeing in terms of your customer base? Does this drive the need for your customers to set up more digital connections with SPS? And also, do you see much risk of your customers dropping connections that have better international exposure?

Chad Collins, CEO

Yes. Typically, in any period of uncertainty, we see an increased need for collaboration between suppliers and retailers to avoid potential supply chain disruptions. The general theme is that supply chain uncertainty can actually benefit these types of investments. If the uncertainty relates to spending levels or potential demand environments, we are somewhat insulated from the effects that larger ticket purchases may experience since what we do is mission-critical for suppliers to fulfill orders from retailers, and our solutions usually involve smaller ticket prices compared to many other applications. Thus, we don't face many of the macro headwinds that could impact other supply chain applications.

Lachlan Brown, Analyst

That's very clear. And with Amazon being one of your larger retail partners, the announcement that UPS is significantly cutting back its Amazon package delivery by mid-2026. Are you expecting any impact? And does this change anything in the Carbon6 strategy?

Chad Collins, CEO

We don't expect any impact there. The majority of the third-party Amazon fulfillment from the Amazon marketplace appears to have sufficient capacity within the Amazon parcel network and their fulfilled by Amazon service, which most of our third-party sellers utilize. So we don't anticipate any disruption.

Operator, Operator

And your next question today will come from Parker Lane with Stifel.

Parker Lane, Analyst

Chad, after doing this new TAM analysis and getting a more granular view of small, medium, and large potential targets for the business, is that changing any of the philosophy around go-to-market or informing the way you're allocating resources this year?

Chad Collins, CEO

No, I’d say if anything, it gave us more conviction in the approaches that we're using. As I highlighted earlier, we’re convinced that the community enablement go-to-market strategy is an excellent way to catch these available suppliers that we don't yet have as SPS customers through those enablement programs, and our channel go-to-market strategy particularly fits with those in a replacement cycle. Thus, having completed this analysis, we feel even more confident that our overall go-to-market motions are the right ones to tackle this opportunity.

Parker Lane, Analyst

Got it. And obviously, we're still pretty early here with SupplyPike and Carbon6 just closing. But when you think about the addition of new retailers to those networks versus just leaning in on what you have there today, how much of a priority is that here in 2025 as you hit the ground running?

Chad Collins, CEO

We're definitely focused on continuing to drive those businesses, as they show healthy growth. We get significant benefits from our acquisition strategy by bringing in additional customers that meet our ideal customer profile. On both SupplyPike and Carbon6, while not every customer will be applicable, a good portion will be, potentially for our fulfillment and analytics product. We believe getting those cross-selling motions in place can help us expand wallet share with customers coming from the SPS side, as well as the acquired customers from SupplyPike and Carbon6.

Operator, Operator

And your next question today will come from Joe Vruwink with Baird.

Joe Vruwink, Analyst

Great. If I strip out Carbon6 from the guidance, it looks like the implied organic revenue growth rate is approaching 10% or 11% through 2025. Just wondering if you can help reconcile some of the year-over-year moderation. How much might simply be a function of the new customer acquisition that already took place in 2024, but obviously that has a bearing on 2025 results? Is there any conservatism on retail macro? I know you just addressed that, but maybe any additional hedging there or other things you had called out in your planning approach?

Kim Nelson, CFO

Sure, Joe. Our expectations reflect our growth target as a company, which we've set as 15% or greater on an annual basis. The guidance we just provided for 2025 is well within that stated goal. Regarding how we arrived at these numbers, we do look at what we anticipate will occur in 2025. We assess opportunities with our existing customers. We look at our community enablement pipeline and consider what's happening overall in the retail environment. Again, we don't tend to be a great bellwether for that, but we do evaluate the potential impacts on our products like fulfillment and analytics. Overall, our approach to determining this annual guidance aligns closely with how we've approached this in prior years.

Joe Vruwink, Analyst

Okay. On the wallet share moving from the old $25,000 to the new almost $41,000, would you say the amount saw an uplift in each of the customer segments: small, medium, and large? And is a lot of that uplift a function of some of the acquired solution areas? Or how much would the wallet share number have gone up if you just kind of appreciate what the business has ended up seeing since the TAM definition was created and just fulfillment being so much more applicable in the supply base?

Chad Collins, CEO

Yes. The largest driver of the wallet share increase across all three segments has been the opportunity to increase trading partner connections for the fulfillment product. We can look at existing customers where we do have good penetration in each of the three size categories of trading partner connections and demonstrate how that elevates average revenue per customer significantly, especially in medium and large. Additionally, you will see some effect from the broader product portfolio, such as analytics and the revenue recovery piece of fulfillment that contribute more in medium and large. However, the most significant factor remains the opportunity we have to drive more trading partner connections per customer.

Operator, Operator

Your next question today will come from William Jellison with D.A. Davidson.

William Jellison, Analyst

I have two that I'd like to ask, the first for Chad and a second for Kim. Chad, to start out with you. I'm curious with the customer portion of the new TAM, what impact did adding European geographies after establishing the beachhead with TIE Kinetix have on the way you sized the total customer opportunity?

Chad Collins, CEO

Yes. The outside U.S. portion of the total addressable market approach has been rather consistent between the two methodologies that we used, one many years ago and one now. I would say there is an increase in outside U.S. potential customer count, but it's largely in proportion to the increase we found from our deep dive diligence surrounding total customer population in the small, medium, and large categories. It wasn't driven by us now having a presence in the go-to-market in Europe since we've always viewed the market globally.

William Jellison, Analyst

Great. And then, Kim, I was surprised to see the upside on the implied EBITDA margin guide for this year, given that the two acquisitions you closed recently and last year were likely EBITDA margin dilutive in 2025. I'm wondering if there are any details you can provide on the core SPS business that you think will drive either nice expense leverage or cost savings this year?

Kim Nelson, CFO

Sure. The implied EBITDA growth is between 22% to 24% on an annual basis, which is higher than what you saw in 2024. A big driver of that is our expectations for continued improvement in gross margin. This has been an area we've previously discussed, noting that we see opportunities to scale and grow into investments we've made. You started to see a portion of that in '24, and we expect more to come through in '25 and future years. This doesn't mean we lack opportunities for scaling across various line items, but gross margin is one area we expect continued improvement.

Operator, Operator

And your next question today will come from Jeff Van Rhee with Craig Hallum.

Jeff Van Rhee, Analyst

Just a couple remain for me. On the TAM, just one follow-up on the increased potential customer count. It sounds like it's heavily domestic. Is there any real subsegmentation within retail itself as to where those incremental customers, potential customers were found? Were there perhaps subsegments of retail where you don't have a substantial presence?

Chad Collins, CEO

I would state we have some level of presence across all the industries represented. The major difference is that we completed this analysis from the bottom up, looking into every relevant NAICS code applicable for our solution and aggregating that population. Those are noted in the investor presentation if you're interested in seeing them. We applied certain factors for addressability on top of those industries, resulting in quite substantial numbers. Hence, while we're present in the majority of these industries, there may be varying penetration levels within each NAICS code.

Jeff Van Rhee, Analyst

Yes. Okay. All right. And then, Kim, on Carbon6, it's not long since we had the initial acquisition call, but I'm curious if anything has changed regarding revenue and EBITDA expectations for the fiscal year? More specifically, since we just had the acquisition close, do you have any insights on how the $40 million is spread throughout the year, and in particular, seasonality that might put it a bit more back-ended into Q4?

Kim Nelson, CFO

Sure. At the time we announced our intent to acquire Carbon6, we provided expectations of $40 million in revenue for the year, with approximately $5.5 million in adjusted EBITDA. We also estimated about $5.5 million in revenue for Q1 and breakeven in Q1. We have no updates to those figures. Our consolidated overall guidance does factor in those expectations. However, it's worth noting there's no specific seasonality to point to since Carbon6 has a vast number of customers, and different parties sell with Amazon at various times throughout the year. Hence, there isn't a predictable seasonality pattern.

Operator, Operator

Your next question today will come from Quinton Gabrielli with Piper Sandler.

Quinton Gabrielli, Analyst

Chad, maybe for you. You've outlined international expansion as a key driver for SPS to capture more of this Total Addressable Market that you recently defined. Obviously, there will be both organic and inorganic investments. But can you remind us of the current mix regarding enablement campaign contributions from international customers compared to channel? And how do you see that developing moving forward? Is there an opportunity to accelerate or add more enablement campaigns specifically for the international market?

Chad Collins, CEO

When considering our approach for Europe, a significant source of customers comes from U.S. retailers running enablement campaigns where the suppliers are in Europe, which we've managed for years. Additionally, our strategy to run community enablement programs in Europe was established during the integration of TIE Kinetix. We intend to launch this in Europe in 2025. Hence, the channel comprises a third leg of our strategy and will be a focus after initiating community enablement programs in Europe.

Kim Nelson, CFO

Gross margins were fairly resilient here in Q4. However, should we expect this level of gross margin to continue into fiscal '25? Gross margin is best viewed on an annual basis rather than by specific quarters due to inherent noise. However, our statement remains that we see opportunities for continued gross margin improvement, expected to be clearer in '25.

Operator, Operator

Your next question today will come from Mark Schappel with Loop Capital Markets.

Mark Schappel, Analyst

Chad, could you just discuss the key priorities for investments in the coming year?

Chad Collins, CEO

Certainly. First, we continue to invest in scaling and bolstering the resilience of our network as we add customers. We want to ensure we can maintain the high level of transaction processing our customers trust us for. We'll also focus on effectively integrating our 2024 acquisitions and leveraging the cross-selling potential. While we expect a modest contribution in 2025, setting up for sustained cross-selling opportunities in the long-term is our goal. Moreover, we consistently strive to align our sales and marketing prowess to maximize our global market reach, whether it’s securing traction in Europe or enhancing trading partner connections through cross-selling existing customers.

Mark Schappel, Analyst

Regarding analytics, the 8% growth this year was down from about 10% over the past two years. Can you discuss the factors influencing analytics growth this year and what expectations we should have moving forward?

Kim Nelson, CFO

The analytics product remains valuable and essential for our customers. However, it is prone to sensitivity depending on retail environment dynamics. The 8% growth we saw compared to the prior year's 10% correlates with uncertainties in the retail macro. For 2025, we expect somewhat similar growth rates to 2024, while still recognizing significant long-term potential for this product. Nevertheless, this segment experiences more fluctuations based on macro factors.

Operator, Operator

Your next question today will come from Ian Black with Needham & Company.

Unidentified Analyst, Analyst

This is Ian Black on for Scott Berg. With the addition of Carbon6's marketplace solution, should we expect higher customer additions in 2025, even with a similar fulfillment mix on campaigns?

Kim Nelson, CFO

Ian, regarding Carbon6, we projected around 6,500 customers as a result of the acquisition, significantly higher than our usual customer additions. Most of these will come from the third-party marketplace side of Amazon sellers. Therefore, with the acquisition finalized in Q1, we'd expect to see a considerable uptick in customer additions, though it’s worth noting that given the lower price point, we might see a corresponding decrease in wallet share by about $1,000.

Unidentified Analyst, Analyst

Given the company's current growth rate, should we be seeing an additional 3 million to 4 million customer additions in Q2 through Q4 from Carbon6?

Kim Nelson, CFO

It's likely premature to specify anticipated customer additions for Carbon6. With the acquisition just closed, providing that specificity may not be appropriate. However, we have accounted for our revenue expectations in our guidance, and we'll continue to provide insights regarding customer count and wallet share in each quarter.

Operator, Operator

And your next question today will come from Nehal Chokshi with Northland Capital Markets.

Nehal Chokshi, Analyst

And I see the updated slide deck with detailed insights on the new TAM breakup. However, I have a question related to it. How big is the Amazon-only supplier community in terms of your potential customer count?

Kim Nelson, CFO

In the updated number, the approximately 275,000 takes into account the first-party side, not the third-party market.

Nehal Chokshi, Analyst

And how big is that first-party side?

Kim Nelson, CFO

That would be captured in our overall view of what that product offering or revenue recovery is. At the time we announced the SupplyPike acquisition, we provided an opportunity assessment of about $750 million in the U.S. We were able to validate that, recognizing globally, it's a bit higher. So that has been factored in.

Chad Collins, CEO

What was not included is that the first-party revenue recovery is integrated into our TAM analysis. At the time of our TAM analysis commencement, we had already acquired SupplyPike and incorporated that share of the market. We estimate there are over 200,000 Amazon third-party sellers generating at least 1 million in GMV on the Amazon Marketplace, providing a sense of the market size.

Nehal Chokshi, Analyst

Got it. That could represent a significant incremental TAM there?

Chad Collins, CEO

Yes. However, the average revenue per customer among third-party sellers is considerably lower compared to the potential average revenue for first-party sellers, where we could potentially offer fulfillment, analytics, and revenue recovery services, all tailored to them.

Nehal Chokshi, Analyst

As well as many more connections per customer?

Chad Collins, CEO

Correct.

Nehal Chokshi, Analyst

Okay. All right. And then regarding the new TAM analysis on Pages 13 and 15. You noted earlier that you have customers exceeding that $40,500 threshold, which is less than 10% of the customer base, but quite a significant figure. Of those 10% of customers in that range, what percentage are actually in the small-sized company bucket?

Chad Collins, CEO

The best way to review that is to look at Slides 13 and 15 together. On Slide 13, the distribution of customers fits within each size category: small, medium, and large. You can take the small size information from Slide 15 and overlay that distribution displayed on 13. The generality here is that the underlying distribution remains similar across the three size groups.

Operator, Operator

This will conclude today's question-and-answer session as well as the conference call. Thank you for attending today's presentation. You may now disconnect your lines and have a great day.