Digital Turbine, Inc. (APPS) Q4 2018 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Digital Turbine Fiscal Fourth Quarter and Fiscal Year 2018 Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brian Bartholomew, Senior Vice President of Capital Markets and Strategy. Please go ahead.

Thank you. Good afternoon and welcome to the Digital Turbine fourth quarter and fiscal 2018 earnings conference call. Joining me on the call today to discuss our results are Bill Stone, CEO and Barrett Garrison, our CFO. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. These forward-looking statements are based on our current assumptions, expectations and beliefs, including projected operating metrics, future products and services, anticipated market demand and other forward-looking topics. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. Except as required by law, we undertake no obligation to update any forward-looking statements. For a discussion of the risk factors that could cause our actual results to differ materially from those contemplated by our forward-looking statements, please refer to the documents we file with the Securities and Exchange Commission. Also, during this call, we will discuss certain non-GAAP measures of our performance. Non-GAAP measures are not substitutes for GAAP measures. Please refer to today’s press release for important information about the limitations of using non-GAAP measures as well as reconciliations of these non-GAAP financial results to the most comparable GAAP measures. Lastly, before I turn the call over to Bill, I want to quickly remind everyone that we will be hosting an Analyst Day, next Thursday, June 21 at the 4 Seasons in Midtown, New York. Many of you have already registered for the event and I would encourage others that have an interest in attending. To reach out to me directly on my e-mail address provided in today’s earnings release. I think it will prove to be a highly insightful event where investors will have the chance to hear real world testimonials directly from our partners and customers and get to a see a series of new product demonstrations as part of today’s presentations. So I hope to see a lot of you there. Now, without further ado, it’s my pleasure to turn the call over to Mr. Bill Stone.

Thanks, Brian and thanks to all for joining us today. I want to start my remarks with our progress against our stated goal. Our goal has been to build a sustainable and profitable business, while demonstrating solid execution against our strategy. I am pleased to report that we continued our momentum in the March quarter as we delivered $5 million of free cash flow and $2.6 million of adjusted EBITDA for the full fiscal year. This compares to a negative free cash flow of $13 million and an adjusted EBITDA loss of nearly $9 million for the prior fiscal year. I will break out my remarks into four areas: first are some comments about our divestitures; second, we will be closing out the March quarter; thirdly will be some strategic comments about our three growth levers of devices, new products and media; and then we will close out with some current quarter operational updates against those growth levers. First on the divestitures. We announced last month the sale of our advertiser and publisher business and our content pay business in two separate transactions. These transactions were done for two primary purposes. First and most importantly, we did these transactions for strategic focus. We are now 100% focused on one business, not three and our business has strong top line growth, better margins, better operating leverage and fits perfectly with our strategic vision. Second was capital allocation. Specifically, our ability to leverage the proceeds we receive on future gross profits from those transactions will be invested back into our mobile delivery platform business. Barrett will take you through the numbers in his remarks to ensure there is no confusion on how we report, account and communicate the discontinued operations from our continued operations. But what I am excited about is that we are already seeing benefits in our focus as many in our team that we are sharing time managing multiple projects and activities across multiple businesses are now laser focused on our mobile delivery platform business that generates faster growth, better margins and greater operating leverage. Now, to close out March on the operational performance, please note all of my comments will be on our continuing operations, not including any results from our discontinued operations. Our overall revenues were $21 million for the quarter which compares to $11.6 million in the March quarter a year ago or 81% annualized growth. This growth occurred despite disappointing initial sales of a flagship device here in North America against expectations. The growth was driven by improvements in our revenue per device, or RPD, across our base as we have added additional advertisers and slots [indiscernible] devices. In particular, we increased our revenue with our largest carrier partner by 64% year-over-year in the March quarter on a modest 10% year-over-year growth in devices. And in doing so, our quarterly revenue per device with this particular carrier reached an all-time high in the quarter. I believe this speaks strongly to the demand from advertisers and the emergence of contribution from other added platform products that I will discuss later in my remarks. I was also pleased to finish the quarter with $12.7 million of cash on the balance sheet, which compares to $6.9 million in the December quarter, while simultaneously reducing our debt. We always know there is fluctuations in working capital but I am pleased to see our ability to continue to strengthen the balance sheet. I know many want to focus on quarter-to-quarter results, but if we pull the lens back and compare our balance sheet today to our balance sheet both a year ago or even 2 years ago, it is materially improved and I want to give a shout out not just to the full team, but also Barrett and the finance team for doing a great job. Next, let me shift to our growth in the future. The key to exponential growth in any business is the ability to create network effects from a platform. We see this with companies such as Apple, Google, Facebook, Amazon and others that are able to harness end-user growth combined with multiple product and revenue streams once users are engaged with their platform. For us, we see the ability to add end-users via more devices, more products and additional advertiser demand as our three growth levers that will have the ability to create network effects once the software is installed on the device. I will spend more detailed time on these levers at our Analyst Day next week, but did want to share some operational updates against our progress we are seeing in the current June quarter. First on devices. At the end of March, we had 155 million devices with Ignite on them. This is an important metric to help demonstrate scale and network effects from our platform. We continue to add more devices with our existing partners and have signed numerous additional deals in Asia-Pacific with new OEM partners that we anticipate will add many millions of incremental devices over this upcoming year. Our pipeline is very robust as we continue to place some major focus into Asia, where OEMs distribute their devices directly versus through operators like here in the United States. I would encourage investors to pay close attention to our progress against this goal. Secondly is on products. Our strategic focus is growing our primary dynamic install product, but also diversifying with others. 2 years ago, we saw our dynamic install product generating 98% of our O&O revenues. Last year, it was 93% and today it is less than 90%. In other words, while the dynamic install revenues continue to show strong growth, additional products are beginning to contribute additional revenues. To-date in 2018, we have added 3 new products that are now contributing revenue. What I am really excited about is that all 3 of these products are recurring revenue streams for the company versus only able to monetize upon activation of the device. Our first new product launch has been Single-Tap. This has been launched in two ways. First, we have launched our Single-Tap installer directly with the large social media platform and integrated it with a large North American operator. It’s now being deployed across all of their new Android devices. We have also expanded Single-Tap with many other media partners, including an additional social media platform. The overall Single-Tap opportunity is one I continue to be excited about as a potential game-changer, but also one I would encourage patients from investors as we work through a variety of last-mile operational issues. I’d also like to call out our smart folders and post-install action products as they also represent a tremendous opportunity, but most likely are not getting as much attention and focus from analysts and investors. Both of these are, live, across multiple operators here in North America and the early results are encouraging. Our smart folders product organizes applications into a folder on the device and then allows us to make app recommendations to end-users based upon what they are showing interest in. Our post-install product allows customers to increase their engagement in applications they have already downloaded. The early returns are also encouraging with this and we are now in the process of scaling it. We will provide more details on early results, demonstrations and additional color on all of these new products at our Analyst Day next week. And finally, our third growth lever is our media business. We measure our success on this growth via revenue per device. Revenue per device continues to improve as a result of our advertising and media relationships. An encouraging trend is that our year-over-year revenue per device increased 27% here in North America. We are starting to see advertisers such as Yelp, AccuWeather, and eBay as specific examples beginning to share their spend and increase it on platforms like ours versus continuing to expand our spend on platforms like Facebook and Google. These types of macro trends are beginning to see churn up in macro results as Facebook and Google actually saw their share of digital advertising decline in the first quarter of 2018 for the first time. This is another thing we will provide additional color at our Analyst Day next week. I want to conclude my remarks in fiscal ‘18, was the year where our business turned the corner with improvements on focus, profitability and growth. Now, at fiscal ‘19, our business is positioned nicely for the future and my excitement and optimism about where it is continues to 52-week highs. And with that, I will turn it over to Barrett to take you through the numbers.

Thanks, Bill and good afternoon everyone. As Bill mentioned, we are very pleased with the way fiscal 2018 came together. In the year, we achieved several milestones against our stated objectives. First, the company delivered profitability of $2.6 million in adjusted EBITDA as compared to a loss of $8.9 million in the prior year and delivered $5 million in free cash flow. Secondly, we have strengthened the financial position of our balance sheet exiting the year with $12.7 million in cash while de-leveraging our gross debt position to $7.4 million this year, down from $16 million at the end of fiscal 2017. We also divested of our A&P and Pay businesses enabling greater focus on our O&O growth engine and finally we made important improvements in our controls environment and I am proud to report the company is now fully Sarbanes-Oxley compliant. Before we go into more detailed overview of the numbers, we recently announced the divestiture of our advertising and publisher business and our content pay business that are expected to close later this month. These non-core divestitures are expected to drive greater focus on our higher margin, higher growth O&O business. The results of these businesses are treated as discontinued operations for all periods presented in our financials. And as a result, all shared and corporate costs are allocated to continuing operations. My comments today will refer to results on continuing operations unless otherwise noted. Now, let me turn to the specific financial performance in the quarter. All of our comparisons are on a year-on-year basis unless otherwise noted. Revenue of $21 million in the quarter was up 81%. Growth across devices on the platform and meaningful improvements in revenue contribution per device as Bill outlined were primarily driven from our North American operators drove the results in the quarter. Turning to margins, reporting our business on a continuing ops basis highlights the higher margin profile of our O&O business, where our non-GAAP margin was 36% for both Q4 and the fiscal year 2018. This compares to 38% gross margins for the same quarter in the prior year and 34% for fiscal 2017. While we are excited by the improving margin expansion in the year, margins in the quarter were negatively impacted by a lower mix of high margin licensing revenue, which represented less than 2% of revenue mix in this quarter as compared to over 6% in the same quarter last year. Accelerating revenue growth enabled non-GAAP gross profit dollars to increase by over $3.1 million year-on-year to $7.5 million in the quarter. Let me leave the discussion on margins by noting that while we are pleased with the continued improvement in this area and encouraged about our opportunity to expand margins overall, our gross margin rates can be sensitive to changes in partner mix and revenue types and these fluctuations may vary from quarter-to-quarter. Now, turning to expenses, as I noted earlier, since we are now reporting our divested business under discontinued operations, all of our shared and corporate expenses are being allocated to continuing operations. Total operating expenses for continuing operations for the fourth quarter were $8.2 million compared to $6 million in the prior year quarter. Cash expenses in the quarter were approximately $7.6 million, which were down slightly on a sequential basis and inclusive of investments in our internal controls, growth in personnel resources focused primarily in our sales force as we have continued to reallocate and invest resources towards our O&O business. And lastly, increases in sales and marketing spend in our annual Mobile World Congress event held in February. Also, as a reminder, we typically incur higher accounting and internal controls expenses in the June quarter. For the fiscal year, expenses were $30.9 million, up only 9% over prior year and during the same time our revenue growth was 81% demonstrating the inherent operating leverage in our business. In the quarter, our total adjusted EBITDA inclusive of discontinued operations was a positive $700,000, up from a loss of $700,000 in the fourth quarter of 2017. Adjusted EBITDA for continued operations was breakeven in the quarter as compared to an $800,000 loss in the prior year. For the total fiscal year 2018, we delivered $2.6 million in adjusted EBITDA, including discontinued operations as compared to a loss of $8.9 million in the prior year. Non-GAAP adjusted net loss in the quarter was $600,000 from continuing operations or $0.01 per share loss as compared to a net loss of $1.5 million or $0.02 per share loss in the fourth quarter of 2017. Our GAAP net loss from continuing operations for the fourth quarter was $4.2 million or $0.06 per share based on 75.2 million weighted shares outstanding compared to a net loss of $5.8 million or a $0.09 loss per share for the fiscal fourth quarter of 2017. Included in our GAAP net loss for the quarter is a recorded loss of $1.9 million from the impact of the change in fair value of derivative liabilities resulting from our convertible note which is highly sensitive to the company’s stock price. As a reminder, the derivative liabilities on our balance sheet will fluctuate as our stock price moves and may have a material impact on our reported GAAP financials. Our GAAP net loss, including discontinued ops was $38.4 million or $0.51 per share loss. These results include $34 million impairment on goodwill related to the divested business lines I mentioned earlier. Moving to the balance sheet, we finished the quarter with $12.7 million in cash and generated $6.9 million in positive free cash flow from continuing operations in the quarter at $5.3 million for the fiscal year as compared to a $13 million negative cash flow in the prior fiscal year. As I mentioned at the beginning of my comments, this is a very important milestone for the company against our stated objectives. During the quarter, we benefited from favorable working capital from collections from our seasonally strong December revenue quarter and while these working capital fluctuations can watch over the full year, it is important to point out that seasonality may drive quarterly working capital fluctuations. The leverage on the balance sheet was further reduced in the quarter in addition to reducing the revolving credit by a $0.25 million, $2.9 million of the convertible notes were converted by noteholders in Q4 and the gross principal amount of our original $16 million notes currently stands at $5.7 million at the end of the quarter. As Bill noted, the momentum leading into the New Year has positioned us for a strong fiscal 2019. In that context, we currently expect Q1 revenue of approximately $23 million, representing a projected year-on-year growth greater than 50% and expect positive adjusted EBITDA in the quarter. With that, let me hand it back to the operator to open the call for questions. Operator?

[Operator Instructions] The first question comes from Mike Malouf with Craig-Hallum Capital Group. Please go ahead.

Hey, thanks a lot for taking my questions guys.

Thanks, Michael.

One of the things that I get asked a lot is about the Verizon contract you guys are, I think at the later stages of getting signed and with, I think, over 50% of your business with Verizon, a lot of eyes on that. Can you give us a sense of, how that’s going and how should we think about that as we look out into fiscal ‘19?

Yes. Sure, Mike. Yes, I don’t have anything to report today on that and obviously we are not going to comment on any one specific contract until we have something to announce. What I will say though is that we are pleased to have Roy Chestnutt who just recently joined our board as the former Chief Strategy Officer and Head of M&A at Verizon. So he has been a great addition to our board. Also, we have got some great relationships. They are in continuous – you have heard some of my remarks about some of the impressive performance it’s put up. So, we feel good about things. They are a great partner of ours and stay tuned for our future announcements regarding them.

Okay, great. And then was there any Single-Tap business, it didn’t sound like it, because it was really small on the licensing side, but was there any Single-Tap business in the March quarter?

There was very little bit as it is associated with the large social media company and the large North American operator, but I would call that de minimis as it relates to the March quarter.

Okay. And then when you take a look at expanding beyond the first carrier, have you gotten any visibility with regards to expanding Single-Tap into other carriers?

Yes, we are actually live with Single-Tap across multiple carriers today and we are in the process, is right, there was some last mile issues as we have to go carrier by carrier and OEM by OEM, each one has a little bit different nuance and characteristics in terms of getting it integrated into their environment. So we are working through those right now, but yes, we are already live today with multiple.

Okay, great. And then just the last question, I don’t want to steal a lot of thunder from your Analyst Day coming up, but could you give us just a little bit more color on the Asia opportunity and how you see that playing out in 2019?

Yes. One of the things I think it’s important for investors to note is that how people buy devices here in the United States is different than how they buy them in the rest of the world and we view those devices where people just go into their carrier store and pickup SIM cards, we call it, open market. And the vast majority of the devices, let’s call it, 800 million are sold in that way outside the United States, it’s a material number. So, our ability to do go direct deals with those OEMs and whether they are in Korea or China or India or even some other places is really key to expanding that $155 million device number that we quoted in our March in our press release. So, a major focus area on that and obviously you can multiply those devices times, some revenue per device assumption and those incremental devices would obviously generate incremental revenue for the company. So that’s a major focus area for us.

Okay, great. That’s helpful. That’s all for me and I will see you next week.

Great. Thanks, Mike.

Your next question comes from Darren Aftahi with ROTH Capital Partners. Please go ahead.

Hi, guys. Thanks for taking my questions. Congrats on the quarter. Nice cash flow, nice to see that. I just want to start, Bill, to your comments about Asia, are there any limitations with your software platform to potentially work with somebody like a Tencent, where it’s not a app per se, but it’s a mini program? And then I have got a couple of follow-ups.

Yes. So we actually have a deal with Tencent today where we actually distribute some Tencent applications outside of China. So they are actually a customer of ours and as they are looking to expand and scale outside of China, I think they see our platform as a potential catalyst for growth for them. So that’s a tremendous opportunity, but we are not embedding Ignite on their platform, but rather they are embedding their software into ours. So, it’s the other way around.

Got it. Understood. That’s helpful. I think last quarter you mentioned a couple of stats and I want to follow-up on those. Could you talk about the percentage of addressable devices that are now enabled with Single-Tap?

Yes. So, we will give a lot more color on this one for next week. Right now, we view the addressable market for Single-Tap would be a subset of the 155 million devices that we have already got live today. As I mentioned, we kind of have to go operator-by-operator to get those implemented and deployed. We are now in the low 8 figures of devices that have Single-Tap already turned on and live today, and that’s getting bigger and bigger each day. So I would say that we are doing it at scale, but we are nowhere near the scale that we anticipate being over the upcoming quarters.

Great. And then on the mix of constituents that are actually using Single-Tap among publishers, operators, OEMs etcetera, can you give any sense for – if there is SKU or one of those verticals was kind of over-indexing versus the other? And then my last question though one with the divestitures, are there any kind of legacy cost drag on the business and then second social media platform that you said is using Single-Tap today, is that a North American based or outside North America? Thank you.

Yes, sure. So I will take the Single-Tap questions and I will turn it over to Barrett for your questions on the costs, on the divestitures. Yes, as it relates to Single-Tap right now, we are live with it’s another North American company it’s not outside North America. Yes, as far as results, we are getting into lot more color next week at Analyst Day, because one of the things that you have to keep in mind is that we will see variances in performance, not just based on type of device or geography meaning India versus here in the United States for example, but we will also see variance in performance depending upon what type of ad unit is, so whether it’s a video or interstitial or banner or what have you, we are seeing differences in performance in conversion rates on those things. We will talk about again some numbers next week on that. But really, this is kind of the place in the evolution of how we fine-tune the model and it reminds me a lot of when we started the dynamic install business with Verizon many years ago and we learned that gaming apps and certain phones perform this way, but travel apps perform this way and so on and so forth. And we have gotten a lot smarter on that over time and we are in that same learning curve and process right now with Single-Tap.

Yes. And Darren to your question around cost drags, once we close on the transactions there will be some wind down activities. I think about those as in a period of months as we cost, for example, largely kind of G&A office wind down and some hosting costs that will be winding down over a period of few months.

Got it. Thank you.

The next question comes from Sameet Sinha with B. Riley FBR. Please go ahead.

Yes, thank you very much. Couple of questions here. So if I look at 25 million devices added during the quarter, but your revenue per device went down, I can understand you are coming off a seasonally very strong quarter, but what I wanted to kind of get an impression was as you look on your current contracts and you look out the rest of the year, is that $20 million plus sort of additions every quarter kind of the standard and that’s how we should be modeling it and obviously making assumptions around RPD? And second question I have is you highlighted smart folders and another product as kind of the new products that are gaining as a percentage of the overall revenue, can you tell us just maybe spend a minute, talk about those new products with the functionalities over there and how it’s been marketed and what’s the value proposition? Thank you.

Yes. Sure. So, let me take the second part of that question, Sameet and I will turn it over to Barrett to talk about how to think about modeling the device forecast going forward. Yes, as it relates to the new products, so we are live with our smart folders products against multiple carriers, I will talk about AT&T as a specific example when you get your phone from AT&T out of the box rather than scrolling through screening after screening of apps that many of us have in our smart folders, we could organize those apps into different categories. AT&T chose to put games in those categories. So we will organize all the games into one folder that would be on your home screen of your phone and then within that folder then we create different recommendations for additional games or future games that will be tied to the types that you already have on your device and then it’s just Single-Tap to download those two devices, so you don’t need to go to the Google PlayStore, so no friction for the end consumer. And those gaming companies will pay us whether that’s paid on a CPI basis or we can cut into a CPP basis either way then we will work those with the gaming providers and then share that revenue back with AT&T. The exciting thing about that is that it’s ongoing for the life of the device. So, if you download a game in month 1, month 6, month 12, that would be three separate revenue events for us. So, we have seen early results have been encouraging on that and you were fine-tuning the product to platform and so on, but we are live with multiple operators across that. And then our other was post-install actions where just creating additional engagement from customers, we all have apps in our phones and we have downloaded, sometimes we don’t engage with all of them on a daily basis and get through there, but they can add value, but there is some event or whether it’s where you are, what time of year it is or what have you, so our notifications platform creates a nice lift in engagement for the end-user, provide a NIM value and then we are able to generate revenue from that increased engagement from the advertiser and share it back with the operator. So the early returns on that have been something we are quite excited about and now we are just working through scaling issues. So as far as devices, I will turn it over to Barrett.

Yes. So Sameet, just to be clear and make sure we understand as far as device growth what we are seeing is in the mid 20s to low 20s millions of new devices coming on to the platform. And what drives that growth beyond where we are today or what can impact that growth is obviously new launches of new flagship devices as well as new partners coming on to the platform and their timing of which they launch devices. But we expect that number to continue to grow and it has grown over time, but just to make sure we are clear – we are in the kind of low to mid 20 million devices on to the platform each quarter.

Fair enough. Thank you very much.

The next question comes from Jon Hickman with Ladenburg Thalmann. Please go ahead.

Thanks for taking my questions. Barrett, could you tell us what the fully diluted share count would be if all your notes got converted?

I can’t. So we excited close to $76 million at the end of the quarter. And there is about $5 million, a little over $5 million or notes outstanding and those would covert at a – if they were to convert at a $1.36 which is a convert price, we are in the $4 million range from the incremental there plus we have about $4 million in warrants that could be exercised. So, in addition to the 9 million related to the notes plus the 76 million we have outstanding that would bring into the total inclusive of the convertible notes.

So, are the warrants also like $1.36 or a range around there?

Yes, that’s correct. They have the same effective price as the notes themselves.

So those would bring in $1.36 which if they got exercised?

That’s right. They would bring in inflow of cash.

Okay. So then I’d like to go back to the question about cost, so as you kind of finish the transition here on these discontinued operations, can we expect some more dollars come out of your operating expenses?

You will see a reduction in the company’s total overall expenses obviously as we wind down these two businesses and those transitioned to new owners. We won’t maintain those costs. Those will be reported in discontinued ops. And then you will begin to see that net of the gross profit sharing that is part of the agreements which will be inflows to the company which will flow into discontinued ops.

So can you put a dollar amount on that over the course of the year?

Yes. So, I think we are not giving guidance on the contribution from those, but what I can’t say is that they are both 3-year contracts they are not in significant amounts of dollars and they are intended to replace the amount of contribution, the businesses we are generating when we own the assets and we like to think and expect that it will be a positive free cash flow over the course of the agreements.

So I am sorry, I am not so concerned about the contribution, I am concerned about the reduction in costs that go along with that?

The reduction in cost relating to do so.

In operating cost, yes. So over the course of the year you are going to save another $1 million or what’s – can you put any parameters around that?

Yes. So you would have seen once you have a chance to dig into the K, you will see that the costs related to these businesses are in the range of $1 million to $1.5 million a quarter. And so there will be a little bit of cost drag, but eventually those costs will come out of the business completely.

Okay, thank you. That’s it for me.

Thanks, Jon.

[Operator Instructions] The next question comes from Ilya Grozovsky with National Securities. Please go ahead.

Thanks. I think you had said it, but just I didn’t catch it, the percentage of revenues from the three new products, did you give out a number?

Yes, that’s actually first, it’s for the three new products plus some other ones like our wizard product that we have with AT&T and Motorola, our licensee product that we have with some operators outside the United States and earlier the point was there is a couple of years ago we are at 98% of our revenue was dynamic and then it’s gone to 93% and now it’s in the 80s. So we have seen even though the overall revenues growing up. So we are seeing those other products starting to contribute more to the bottom line.

Okay, great. And then given the divestitures, what’s the headcount look like now?

Yes. So we reported in the K I believe we are close to 150. There will be further transitions as the two agreements and transactions close.

Okay, great. And then finally so you guys obviously gave guidance for Q1 for the June quarter which ends in roughly 2 weeks, what are your thoughts on the fiscal 2019 number and you guys used to give out an annual number I believe at the end of the previous year, so that would be I think down, what are your initial thoughts?

Yes. So first, we have when we guided to the quarter, there is a lot of activity with the divestitures in those activities. We like the growth outlook that we have. And we think that – we think that we have got a good beat on the June quarter. And we will continue to evaluate our position on giving annual guidance over the next few quarters.

Okay, thanks.

This concludes our question-and-answer session. I would like to turn the conference back over to Bill Stone for any closing remarks.

Great. Thank you, everyone for joining the call today. We look forward to reporting on our progress against all the points made on today’s call and hopefully we will see many of you next week at our Analyst Day in New York and we will talk again on our next earnings call for our first quarter results for fiscal ‘19. Thanks and have a great night.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.