Earnings Call Transcript - VEEV Q1 2022

Operator, Operator

Greetings and thank you for joining us for Veeva Systems' first quarter results for fiscal 2022. All participants are currently in listen-only mode. After the presentations, we will have a question-and-answer session. I will now turn the call over to Ato Garrett, Senior Director of Investor Relations. Please proceed.

Ato Garrett, Senior Director, Investor Relations

Good afternoon, and welcome to Veeva’s fiscal 2022 first quarter earnings conference call for the quarter ended April 30, 2021. As a reminder, we posted prepared remarks on Veeva’s Investor Relations website just after 1:00 p.m. Pacific today. We hope you’ve had a chance to read them before the call. Today’s call will be primarily used for Q&A. With me today for Q&A are Peter Gassner, our Chief Executive Officer; Brent Bowman, our Chief Financial Officer; and Paul Shawah, EVP, Strategy. During the course of this call, we may make forward-looking statements regarding trends, our strategies and the anticipated performance of the business. These forward-looking statements will be based on our current views and expectations and are subject to various risks and uncertainties. Our actual results may differ materially. Please refer to the risks listed in our earnings release and on the risk factors included in our most recent filing on Form 10-K. Forward-looking statements made during the call are being made as of today, May 27, 2021, based on the facts available to us today. If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise forward-looking statements. We may discuss our guidance on today’s call but we will not provide any further guidance or updates on our performance during the quarter, unless we do so in a public forum. On the call, we may also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today’s earnings release and in the supplemental investor presentation, both of which are available on our website. With that, thank you for joining us, and I will turn the call over to Peter.

Peter Gassner, CEO

Thank you, Ato, and welcome to the call, everyone. We had an outstanding Q1 with results well ahead of guidance due to significant outperformance in Development Cloud and continued strength in Commercial Cloud. Total revenue in the quarter was $434 million, up 29% year-over-year, with subscription revenue up 26% to $341 million. Non-GAAP operating income was $181 million or 42% of total revenue. You will find further details about the quarter in our prepared remarks posted on our website at 1 Pacific today. At this point, I would like to open up the call to questions for Brent, Paul, or myself.

Operator, Operator

And your first question comes from Brian Peterson with Raymond James.

Brian Peterson, Analyst

Congrats on the really strong results. So, obviously, we saw acceleration in the Vault services revenue. I know this has come up in the past. But Brent, how do I think about the Vault services as an indicator of what’s going on in the broader business? Is that a future indicator or coincident? Just trying to help me frame that a little bit.

Brent Bowman, CFO

Yes. Thanks, Brian. Yes. So, services in general is not a good leading indicator, I would say. One thing to keep in mind is just there’s a lot of variability in services revenue. And why is that? Different products have different service requirements and customers have different needs based on their in-house capabilities. But what I will say is we’re very pleased with the overall service business, the strength that we saw on the development side and broadly.

Brian Peterson, Analyst

Got it. Okay. And just maybe on the Quality strength, I know we heard that as that an area of last quarter. Peter or Paul, I don’t know who wants to take that but just what you’re seeing in terms of the Quality product and how that’s really ramping up with customers? Thanks, guys.

Paul Shawah, EVP, Strategy

Yes. Thanks, Brian. This is Paul. Yes, we did have another strong quarter overall in Quality, really broadly across Development Cloud and in Quality in particular. And I guess, I’d start at the highest level, the unified vision that we have in Development Cloud is working, and Quality is just a perfect example where we’re bringing together documentation with quality management with training, and they’re all progressing really, really well. Customers are buying into that overall vision, and then they’re rolling out and kind of driving that vision over time. So, we had really strong performance in QualityDocs and really in all of the areas. And companies are looking to modernize in the Quality space, and they’re looking at Veeva to be that partner to help them there. So, we’re really pleased with our progress.

Operator, Operator

And your next question comes from the line of Donald Hooker with KeyBanc Capital Markets.

Donald Hooker, Analyst

Just like to hear maybe a little bit more, if you would all share with us some of your thoughts around the pharma sales force globally. It seems like from the prepared comments, you’re walking back some of your concerns or maybe pushing them out. Can you just maybe expand on your thinking there?

Paul Shawah, EVP, Strategy

Yes, sure. I can give you some color on that. This is something we watch and keep an eye on very closely. There’s always some variability up and down every quarter. But, we haven’t seen any of the reductions so far that we’ve talked about, I guess, two quarters ago now. But, having said that, I guess, maybe the context and the color behind that, these are significant changes. The industry hasn’t yet hit a new steady state and stabilized yet in terms of what the field structure is going to look like. So, these are big changes for pharma companies, which is why I think it will take a little bit longer. And I think we’ll start to see that impact closer to the second half of this year and then likely through the end of next year. So, I wouldn’t classify it as a walking back. I classify it more as just happening a little bit more over time.

Donald Hooker, Analyst

In recent quarters, there's been considerable attention on decentralized clinical trials within the CRO sector and the pharmaceutical industry overall. Does this require any additional investment from your side? Is there anything else you might need? Numerous decentralized clinical trial companies are emerging in the market, and I'm curious if this represents a new product area for you or if it aligns with what you already offer. Do you need anything further in this regard?

Peter Gassner, CEO

Yes, decentralized trials, that’s part of what we call digital trials, so that’s moving clinical trials to paperless and patient-centric. Decentralized trials itself refers to, most often, to being able to do parts of the trial process with the patient in the patient’s home, still supervised by a caregiver, but that may be through an in-home nurse, or that may be through a Zoom call, something like that. So, we do have significant technology investment in that area and that will be ongoing. That’s things like MyVeeva for patients, for example. That will fit into decentralized clinical trials. What we’re doing for eConsent, our Site Connect product. And then, we’ll connect that into our Clinical Suite for the sponsor. So, it’s a big opportunity and area of investment. But for us, it could be a bit broader. It’s what we call digital trials.

Donald Hooker, Analyst

Okay. And maybe I’ll just throw one last one in and just kind of one from left field for me. I guess, have you all ever thought about or is there any kind of thought about expanding sort of into more preclinical functionality? Is there any opportunity there? I guess, maybe the argument being with all these more advanced biotherapeutics and cell and gene therapies, is there a greater need to link together workflows perhaps across clinical and preclinical and discovery and all that? Is there sort of an expansion opportunity there for you at some point over time?

Peter Gassner, CEO

Well, this is Peter, and I received a question that was unexpected. You can generally describe that as preclinical. Some might also view it as part of the pharmaceutical research area, which is not our current focus. We monitor it, and while we don’t rule anything out for the future, there is no active investment or product from Veeva in that area at this time. I would say it has a slight connection to our existing products, but we have no plans to pursue it right now. Thank you.

Operator, Operator

And your next question comes from the line of Ken Wong with Guggenheim Partners.

Ken Wong, Analyst

Sorry about that, new button. This is an extension of the last question to some degree. Peter, when we talk to our contacts in the life science industry, a theme that keeps popping up is kind of this past year led to a potential reimagining of clinical workflows, from trials to submission to post production, which could potentially lead to a replatforming for many customers. I guess, how much truth is there in that particular statement, do you think? And then just given your end-to-end stack, is it fair to assume that Veeva would be a potential beneficiary of such a replatforming?

Peter Gassner, CEO

Ken, that’s fair to think that the customers are definitely reimagining things COVID, and across all industries has caused people to think maybe some assumptions that they had in the past were not valid. And so, now, they’re trying to question everything more open to innovation. I think, tremendous downside of COVID in terms of loss of life, increasing mobility, that type of thing. But, it is spurring innovation. Adversity creates innovation. So, that is what’s going on. So, there’s questioning. When we look at replatforming, I think really, what I see from the customers is, yes, reimagining efficiency, digital data investment. And yes, I think we’re getting a slight tailwind from that. Again though, we have a long cycle with our customers. So, it’s not something that you’re going to immediately see but that will be a continued and moderate tailwind for us for the next three, four years, really. And it’s a positive trend when customers look to innovation, because our product footprint is well positioned. We did a lot of things as we moved into digital last year, especially with MyVeeva and the digital trials and Veeva Engage that position us well. So, I think we’re in a good position and a favorable position, Ken.

Ken Wong, Analyst

Got it. Very helpful, Peter. Thanks for the insight. And then, a quick one for you, Paul. Just wondering on Data Cloud, you guys talked about seeing more customer interest there. Any sense if there’s a good amount of pent-up demand for when you guys finally roll out the rest of the prescription data and kind of across U.S. and, to the extent, international at some point?

Paul Shawah, EVP, Strategy

Yes. So, we’re certainly focused on the U.S. market at this point. And as you know, our first product in Data Cloud is patient data. We will, as you mentioned, have prescriber and sales data over time. So, the focus right now is patient data. It’s on building the best patient data product and longitudinal patient data and it’s working in the early market. So, we’re really proud of the success and the value that we’re creating for customers in the early market. In terms of pent-up demand, this is a long journey. We’re investing for the long term here. We’re excited about the innovation, and our customers are excited about the innovation we can deliver. But they recognize that this is really a long-term play. So, really for the long haul, and we’re excited about the progress we’ve made so far.

Operator, Operator

And your next question comes from the line of Bhavan Suri with William Blair.

Dylan Becker, Analyst

Great. Thanks, guys. This is Dylan Becker actually on for Bhavan tonight, but congrats on the quarter and I appreciate you taking our question. I guess, first, as we’re seeing kind of an increased willingness here, you noted kind of several customers throughout the quarter looking to standardize across your Clinical Suite and leverage those solutions. It makes a lot of sense to have all of this data across a common platform, right, to accelerate the development. So, I guess, the question is, how should we be thinking about the importance of further standardization, the future driver supporting the cross-sell efforts, especially related to some of the earlier stage offerings, CTMS, CDMS, safety, et cetera?

Peter Gassner, CEO

And Dylan, this is Peter. I’ll take that one. What’s happening is they’re seeking an integrated suite, rather than just standardizing technology, which is beneficial but not the main focus. They want a vendor they can trust, a consistent approach to audits, and a uniform way to handle integrations. The real advantage they're pursuing is common business practices. When we have the clinical operations suite integrated with the Clinical Data Management Suite, it will enable a seamless flow between the two. That’s what excites people. This will provide a long-term competitive edge for Veeva since clinical trial efficiency is crucial for life sciences companies. The core of a life sciences company is getting products approved and brought to market swiftly. So, it’s not just about technology standardization; it’s the smooth business processes they’re after.

Dylan Becker, Analyst

Can you discuss the early traction around the Data Cloud? Since this is also a driver of sustainability in the commercial sector, could you remind us if there is any impact from the recent releases by IQVIA on the Data Cloud segment?

Paul Shawah, EVP, Strategy

There is no impact from IQVIA, despite the noise in the market and their historical competitive behaviors. This does not affect Data Cloud at all. Data Cloud is our own product, built through unique sourcing and innovation for the market. Therefore, there is no material impact—actually, no impact at all—on Data Cloud.

Operator, Operator

And your next question comes from the line of Stephanie Davis with SVB Leerink.

Stephanie Davis, Analyst

Thank you for taking my question, guys. And congratulations on a very strong quarter. We’ve seen a pretty meaningful uptick in funding for health tech companies that compete with the Vault related products. So, I love your early take on how you’re thinking about these players. Should we think of them as more pure-play competitors that are just subscale, or is there a potential partnership and integration that maybe increase the value of Vault as a platform?

Peter Gassner, CEO

Hey Stephanie, this is Peter. Yes, absolutely, the early health tech market is currently saturated with capital, which has resulted in many new entrants. However, this influx of funding often leads to a higher number of lower-quality entrants. Many of these newcomers will compete in areas relevant to our applications, which I believe is beneficial for the industry as a whole. It will enhance Veeva’s competitive edge and drive product innovation. Additionally, some of these companies will likely become partners and will integrate well with the Vault platform, especially those that are smaller and have more practical approaches. Larger, well-funded companies tend to chase bigger market opportunities, but I see this competition as healthy. It might be challenging for them because pharmaceutical companies prefer long-term partnerships rather than quick, temporary solutions. Overall, I see this trend positively for Veeva.

Stephanie Davis, Analyst

Well, continuing on that thought of the less funded players and probably the most likely partners, how do you think about M&A for growing in that space?

Peter Gassner, CEO

Yes. M&A, I would say not different in that space versus other places that we’ve been in. We would look for M&A for growth. So, where we can get a seed of something that will really either help the industry overall and thereby help Veeva. You saw that with Zinc, right, we completed that acquisition or completed the migration of those customers with the acquisition five years ago, completed that. That was good for the industry, brought their DNA into Veeva, made our products better. You would see what we did with Crossix. We bought Crossix. They had a certain asset. We’re leveraging that asset and bringing them to Data Cloud. So, that’s what we would look for. We look for a seed of innovation that we can grow.

Stephanie Davis, Analyst

Very helpful. one quick one...

Peter Gassner, CEO

Sorry, I didn’t finish. Sorry…

Stephanie Davis, Analyst

No, no, continue.

Peter Gassner, CEO

Those will often come in the smaller companies actually, those seeds of innovation.

Stephanie Davis, Analyst

Impressive. So, I just have a quick one because I feel like Ato’s done so much work on this. He would kill us if we didn’t at least mention it on the call. Could you just…

Peter Gassner, CEO

He’s a very nice guy. He’s not going to kill anybody.

Stephanie Davis, Analyst

He might so. So, you’ve heard a lot of noise about IQVIA. Could you just give us a refresh on litigation, what the worst-case downside scenario really is in some of the recent announcements?

Peter Gassner, CEO

Yes, there's certainly a lot of noise. IQVIA released a press statement that is quite misleading and part of a disinformation effort. Their anticompetitive behavior creates a situation that actually benefits Veeva because it maintains a restricted data environment. This press release from IQVIA doesn't really address the case; it focuses on a procedural ruling. Our antitrust case is moving forward, and we anticipate a jury trial in 2023. We are confident in our position and expect to win. A victory would enhance choice for the industry and could accelerate the growth of Commercial Cloud, but we will have to wait and see in 2023.

Operator, Operator

And your next question comes from the line of Tom Roderick with Stifel.

Tom Roderick, Analyst

Great. Thank you for taking my questions. Great to hear from you all. Congratulations for the great results. Peter, I’m glad Stephanie just kind of poked at the IQVIA thread there a little bit. And I guess, I wanted to ask a little bit of a different version of that question, which is, what are your customers saying to you about this? This is fairly sort of acrimonious discussions in the public arena between you and a competitor, both of which many, many of your customers use both parties. Are they getting nervous at all that perhaps IQVIA data might not be accessible inside of your CRM systems in the long run, that that could create some issues with respect to your core positioning on that front? I’d love to hear what they’re saying to you. And then, conversely, are they opening up and saying, hey, we really, really do want the choice, and it’s about the time we get this choice. So, I’d love to know which way they’re pushing on that thread.

Peter Gassner, CEO

The customers, in general, do not view this positively. It feels like there are two kids fighting on the lawn; they don't care who started it or why, it's just noise to them. They don't appreciate it. While they generally understand that IQVIA is involved, it still doesn't matter to them. Our customers, who are life sciences companies, are not feeling anxious about IQVIA. They see us, Veeva and IQVIA, as partners supplying the industry. There is no sense of nervousness from them. They know that if IQVIA attempted to restrict their data from entering Veeva CRM, they would find other ways to analyze that data, and they would not appreciate IQVIA’s actions, which could lead to IQVIA losing business. They are not willing to be controlled by IQVIA. What matters to them is choice. For instance, they are very enthusiastic about Data Cloud. They want us to accelerate its development and make it complete faster. Increased choice is always beneficial for Veeva. However, discussions about conflicts in press releases are not positive; more choice is a positive for customers, but talk of lawsuits is never good for them.

Tom Roderick, Analyst

Great. That’s excellent, Peter. I appreciate that. This is a little bit more in the weeds, but Brent, a question for you. I mean, we look at these gross margins and they’re at all-time highs here. Seemingly, no reason why they can’t continue. I guess, the one thing that stood out to me in the prepared remarks was the discussion point that the last Zinc customer has transitioned over to PromoMats. And it just sort of brings to mind anytime you can kind of end-of-life customers on one platform and move them all over to a modernized version, there might be lasting benefits to the gross margin line there. How should we think about other opportunities across the platform outside of that? And is this kind of a high watermark for gross margins or then how do we get higher from here?

Brent Bowman, CFO

Yes. I mean, thanks for the question. Yes, this was an outstanding quarter, obviously, from an op margin perspective, the highest op margin quarter that we’ve had to date. And how I think about it is, we’re in growth mode right now. We’re continuing to invest for customer success. And we’re aggressively hiring specifically in the products, sales, and services area. Business consulting is a focus area. So, we think that will pay off long term from a growth perspective. There are some other things that are in play regarding our gross margin, as you look out during the course of fiscal year ‘22. We do expect travel to return to some level of normalization. There’s services utilization that was running at an all-time high this quarter as well. So, there’s a lot of things that happened in Q1 that drove the high op margin percentage. So, all-in-all, pleased with it. Great opportunity to continue to get leverage out of the model as we continue to sell the Vault product space as well.

Operator, Operator

And your next question comes from the line of Brad Sills with Bank of America.

Sherry Guo, Analyst

Hi. This is Sherry on for Brad. Congratulations on a great quarter. I wanted to ask about the outside of life sciences opportunity. You touched a little bit on your prepared remarks. But, can you maybe provide some updates on where you are today and where you are in terms of building out that go-to-market organization? Thank you.

Peter Gassner, CEO

Hi Sherry, this is Peter. Yes, we’re on track with outside of life sciences there. We’re focused on consumer goods and consumer packaged goods and chemicals. Maybe to add some customers and expand in existing customers, we believe we’re on track to sort of in the $100 million, bringing the business for 2025. So, we’re on track for that. I’m really pleased with the customer success, and that’s what’s fueling our business there. So, all is going well outside of life sciences.

Sherry Guo, Analyst

Got you. And then, are you seeing any changes in the app tech for like event services businesses or physicians world as COVID headwinds start to dissipate?

Paul Shawah, EVP, Strategy

Yes, we are beginning to see a return in demand. I would describe the demand for digital events as increasing, and this has been building for some time. We have concentrated our efforts on supporting customers with their digital events. Additionally, we are noticing a slight rise in in-person events as companies consider reopening and resuming face-to-face interactions. I expect this demand to persist moving forward. The positive aspect is that we are committed to supporting both digital and in-person events, depending on customer preferences.

Operator, Operator

And your next question comes from the line of Stan Zlotsky with Morgan Stanley.

Stan Zlotsky, Analyst

I wanted to switch to billings for a moment, which has shown a very strong start to the year. Is there anything in billings that we should be aware of, such as any one-time factors in the quarter? How does the strong start in billings influence your overall confidence in the increase of the billings guidance for the full year?

Brent Bowman, CFO

Yes. Thanks, Dan. Yes. So, in Q1, we had outstanding billings result growing at 26%. There were no one-time items in the quarter to note that that was a tailwind or a headwind to that number. So, that definitely formed a good portion of our guide as we looked out for the year. So, good broad-based strength with Dev Cloud and Services both contributing nicely. I would say in the beat, probably about two-thirds of that was on the subscription side and about a third in services. So overall, really good contributions to the billings growth rate.

Stan Zlotsky, Analyst

Got it, perfect. And I wanted to just go back to one of the earlier questions around the headcount, the overall reduction in headcount across the healthcare and the pharmaceutical sales industry. How does that inform your thinking around Commercial Cloud growth for the remainder of this year?

Paul Shawah, EVP, Strategy

Yes. So, the reductions have not a meaningful impact on the rest of this fiscal year. We’ve accounted for that into our modeling already. So, we don’t anticipate any material impact one way or the other. It’s already accounted for in our guidance. And typically, those kinds of things, whether we saw a smaller or a larger reduction, one, we’ve modeled the name; and two, those things tend to play out over time, based on renewal cycles. So, really no change there.

Stan Zlotsky, Analyst

I was trying to express that while there may be potential headcount reductions in the latter half of this year, which could affect you and your long-term strategic annual contract, is there a possibility that we could see an increase in the Commercial Cloud subscription revenue if those cuts don't happen, as you've mentioned in the last few quarters?

Brent Bowman, CFO

Yes. So, Stan, it’s Brent. So, for the fiscal year, so in my prepared remarks, I mentioned it. So, we didn’t see any increase in the reductions in Q1. And we do expect that to increase in the second half of the year. And that increase, in fact, is included in our guide. So, we contemplated that into the second half of fiscal year ‘22.

Operator, Operator

Your next question comes from the line of Sterling Auty with JPMorgan Chase & Company.

Drew Glaeser, Analyst

Hey. This is Drew on for Sterling. You mentioned the return to travel and normalization of some of the operating expenditures. Are there any cost savings that you think are sustainable in the model after the post-COVID environment?

Brent Bowman, CFO

Yes. So, I’ll talk about fiscal year ‘22 and what we’re seeing a bit. So, we’re seeing travel start to return to normalization. And that’s going to progress starting in the next couple of months as we work through the balance of the year. I believe that advance will largely be virtual for the balance of the fiscal year ‘22. All of that’s been contemplated in our guide, and that’s why I explicitly stated about 175 bps of tailwind. Over time, how much of that will be permanent, time will tell. I don’t feel confident with the information at hand to give you a number on that.

Operator, Operator

And next question comes from the line of Chris Merwin with Goldman Sachs.

Kevin Kumar, Analyst

Hi. Kevin here on for Chris. Thanks for taking my questions. Curious on Engage. It sounds like that was a tailwind to growth in the quarter. How penetrated is that product across the CRM customer base today and how should we think about the runway there?

Paul Shawah, EVP, Strategy

Yes, this is Paul. We discussed last quarter that we are about 60% penetrated in the overall Engage market. If you consider the larger Engage opportunity, we have captured approximately 60% of that market. We anticipate continued growth in Engage, returning to its previous state. There was a notable increase in Q4 due to the conversion, but moving forward, we expect growth to normalize over time.

Kevin Kumar, Analyst

Got it. And then, given the recent investments in headcount, curious about customer adoption, of the Crossix. Thanks.

Paul Shawah, EVP, Strategy

Yes. So, Crossix is generally independent of the kinds of reductions that you’re seeing. I would say that there is an overall shift to companies operating more digitally and trying to reach customers in new and different ways. And fundamentally, Crossix’ business is based on supporting media and advertising and marketing, which is digital. So, we saw good strength this quarter in Crossix and we anticipate that strength will continue going forward.

Operator, Operator

And your next question comes from the line of Ryan MacDonald with Needham.

Ryan MacDonald, Analyst

Hi. Thanks for taking my question. And I apologize if it’s repeated. I dead dropped temporarily here. But, I wanted to ask on the prepared remarks about the commentary around Veeva Link and the Business Consulting services. I think it’s been an interesting dynamic that the comment around it is doubling year-over-year in terms of consulting. It’s not the first time we’ve heard that and it seems to be an emerging trend. Peter, I’d be curious just to hear your thoughts on what do you think is causing sort of this increased reliance on consulting services from customers. And how does this change your view, if at all, on how the component of service as a percent of total revenue and how that grows going forward?

Peter Gassner, CEO

In terms of revenue percentages and future growth, I do not anticipate any significant changes. The consulting business is expanding, but it remains a small segment of our overall business, which primarily consists of subscriptions and professional services. Consulting offers higher-value services that focus on business processes rather than just software implementation. While it is growing, it will never constitute the largest portion of Veeva. However, it complements our offerings well. As we introduce multiple products, the demand for consulting will increase. Consulting is valuable for integrating the business processes required during system implementations, such as those in clinical, regulatory, commercial, and medical areas. This is where significant value lies, especially when redesigning business processes, roles, and responsibilities. While it is essential, I see it as an enhancement rather than the main focus.

Operator, Operator

Your next question comes from the line of Tyler Radke with Citi.

Unidentified Analyst, Analyst

Congratulations on the strong results. I have a quick question regarding the trend we're seeing with more customers adopting the full suite, particularly in the last quarter and the current one in Quality and Regulatory, including new customers in the Commercial Cloud. I would like to know how this trend compares to your initial expectations and what implications we might see moving forward. Thank you.

Peter Gassner, CEO

Yes. The full suite can happen also on the R&D side and the Commercial side. Generally, that will be with smaller biotechs because they’re nimble; they don’t have existing infrastructure. They want to get started in a very-modernized way and they just go along with Veeva. So, I expect that trend to continue sort of as it is, maybe accelerate a bit in the small biotechs. But, that’s not really so applicable to our large enterprises because they have lots of people, lots of processes and they have to pick the parts that they optimize.

Operator, Operator

That concludes all questions at this time. I would like to turn this call back over to Peter for closing remarks.

Peter Gassner, CEO

All right. Thank you, everyone, for joining today’s call. I’d like to thank our customers for their continued partnership and our employees for their commitment to customer success. Thank you.

Operator, Operator

This concludes today’s conference call. Thank you for your participation. You may now disconnect.