Greeting, and welcome to the Chegg, Inc. First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a remainder, this conference is being recorded. I would now like to turn the conference call over to your host, Mr. Dave Borders, General Counsel of Chegg. Thank you, sir. You may begin.

Good afternoon. Thanks for joining Chegg’s first quarter 2016 conference call. On today’s call are Dan Rosensweig, Chairman and CEO; and Andy Brown, Chief Financial Officer. In terms of structure, Dan will open with the discussion of Chegg’s business, and Andy will follow with a review of our operating results, and our outlook for the first quarter and fiscal year-end 2016. A copy of our press release along with our investor presentation is available at our Investor Relations website investor.chegg.com. A replay of this call will also be available on our website. We routinely post information on our website and intend to make important announcements on our media center website at chegg.com/mediacenter. We encourage you to make use of these resources. Before we begin, I would like to point out that during the course of this call, we will make forward-looking statements regarding future events, including the future financial performance of the Company. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. We caution you to consider the important factors that could cause actual results to differ materially from those in the forward-looking statements. In particular, we refer you to the cautionary language included in today’s earnings release, and the risk factors described in Chegg’s annual report on Form 10-K filed with the Securities and Exchange Commission on March 4, 2016, as well as our other filings with the SEC. Any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both the GAAP and non-GAAP financial measures. Our GAAP results and GAAP to non-GAAP reconciliations can be found in our earnings press release. Now, I’ll turn the call over to Dan.

Good afternoon. Thank you for joining today’s call. Chegg is off to a terrific start in 2016, as we’re seeing great momentum, particularly in our subscription services. On top of the strong quarter, we are very excited about the acquisition of Imagine Easy Solutions, a global online writing tools company that adds another premier student-first service along with millions of new users to Chegg’s student hub. On today’s call, we will provide an overview of the trends of higher education and their impact on Chegg, walk you through the user engagement highlights of the strong quarter, provide a strategic and financial details of our acquisition of Imagine Easy, and of course Andy will review our Q1 financial highlights, update you on the final steps in our transition to an all-digital business through our textbook partnership with Ingram, and explain our increased guidance for the year, which is based on a combination of positive trends and the addition of Imagine Easy. Today also happens to be decision for the incoming class of 2020, and we see this class as an inflection point, marking a shift to a new generation of self-directed students who increasingly take learning into their own hands. The ubiquity of technology, the unsustainable economics of obtaining a college degree, the $1.3 trillion in student loan debt, and the consistently poor outcome have all put pressure on a system that has little changed in 200 years. These trends are not new but we feel this class and the students who will come after them are decidedly different. Consider that, incoming college freshmen were mostly born in 1998, the same year as Google. They have literally grown up with the internet and have seen consumer service after consumer service become more affordable, more convenient, more personalized, and more relevant, everything…

Thanks Dan and good afternoon, everyone. My comments today are on a non-GAAP basis, as I discuss our financial performance and our outlook for the second quarter and full year 2016. I’ll also be discussing certain items that can be viewed on the investor presentation that is posted on our IR website. First, let me say that I share Dan’s enthusiasm in welcoming Imagine Easy to the Chegg family of student-first services. This is our largest acquisition to-date; it will add to our 2016 revenues and EBITDA, making it accretive right away. But, before I go over the specifics of the transaction, let me first discuss our Q1 performance. We started 2016 with momentum, particularly in our subscription services. Revenue on adjusted EBITDA for Q1 came in at the higher end of our expectations. Pro forma revenues grew to $46.8 million while Chegg Services revenues grew to $25.6 million, growing nearly 30% year-over-year when you would just to exclude revenue from Chegg deals of nearly $3 million, a service we discontinued at the Q1 of last year. As a remainder, pro forma revenue assumes completion of print textbook ownership to a partner Ingram, where we’ve recognized a commission on each transaction versus 100% of the transaction value. This is how our GAAP revenue will look once the transition is completed at the end of this year. As such, we believe this is a better way for investors to measure our performance. Gross margins were also higher than expected at 41.6% in Q1, primarily due to strong Chegg Study performance where most of the incremental revenue goes straight to the gross margin line because of relatively fixed cost structure. Our operating expenses were in line with our expectations, resulting in an EBITDA loss of approximately $0.5 million, which was at the…

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from Douglas Anmuth from J.P. Morgan. Please go ahead.

First, just on Imagine Easy, can you guys talk a little bit about just the mix of revenues here in terms of subscription and advertising? And if it’s fair to think about the seasonality in this business is similar to your existing business? And then secondly, Dan, if you could talk more about Chegg Tutors. And it sounds like you’ve made some good progress on the demand supply imbalance that you had last quarter. If you could elaborate on that a little bit and talk about some of the steps that you’ve taken there and how you’re thinking about that going forward? Thanks.

Imagine Easy, we’re incredibly excited about its additive in every category, it adds millions of students in reach, it adds upside to the revenue, it adds greater EBITDA, it’s in line with our growth rates of our newer business. I mean it’s a home run for Chegg shareholders. And so, we couldn’t be more excited. The revenue mix today is a combination, as we said, of advertising and subscription, more adds than subscription. As we go forward over the next couple of years and we invest in the product itself, we imagine that balance will get more 50-50 and then over time, we’ll see which one works out best. We don’t really have a goal one way or the other because the advertising on Imagine Easy is actually quite good; it gets very high CPM. It continues to grow because the targetability towards the students, the age, the location, all those things are extraordinarily powerful. So, we like both of the businesses. And it’s not a subscription business where you pay to not get the ad. So, it’s always going to have ads because they work extraordinarily well in a programmatic marketplace as people bid really high for them because the sessions are really long. But you can imagine over the next three years, we’ll invest more in the subscription side of the business because they don’t really have the capability and the technology to do that. So, it was nascent for them. But over time, so it gets closer to 50-50 but right now it’s significantly more ads than subscription. But the usage is insane in terms of the volume that people use, the number of sessions; it goes down to middle school all the way through high school. So, this expands our reach. So, our ability to markets…

And then just as a follow up on the advertising piece for Imagine Easy. Can you just clarify, is that all third-party and programmatic sales? And then I assume that it’s more heavily desktop than it is mobile, but may be you can just clarify that too?

It is more programmatic, so there is no sales team that goes to sell out into the world because the volume of inventory is so much and the session times are so long that the programmatic guys each bid for access to the inventory. They also have a world class team and it’s from my old back of knowing this from Yahoo! and other places, a world class team that actually has been able to get the CPMs, CPMs up every quarter and they have been doing this for a bunch of years now. And so, we are really excited about it. Then, we’ll get to add Chegg inventory to it. So, it’s just going to get bigger over the next couple of years. And as from programmatic advertising, it’s very profitable. So, this is a big one for us.

Our next question comes from Alex Paris for Barrington Research. Please go ahead.

This is Chris Howe filling in for Alex Paris. I just had a question just around Imagine Easy, specifically wondering if you can provide any additional color on the potential cross-selling opportunities it presents across subject matters.

Yes, it’s a great question and one of the primary reasons that we wanted to acquire. So, when we use the independent comp scores and other things, it says it adds over 3 million new students to the Chegg network that we didn’t have before; the internal logs suggest it’s even much higher. So, imagine having students that are both younger as well as in college and knowing when they are online, whey they are working, what they are working on and the ability to integrate in both Chegg Study and Chegg Tutors directly into Imagine Easy services right now. So, one of the things that I mentioned on the call was three of the topics that people used for Chegg Tutors for, writing is one of the top ten subject matters, students just do not know how to write and they need help. So, the ability to cross-sell between all of our learning services is precisely how we’re building Chegg. That’s why we pointed out that over half of the customers coming to tutors right now come from the Chegg network and particularly Chegg Study, so they don’t cannibalize each other, they’re additive. So, you can imagine starting early next year, when a student is working on any of the writing products, if they need help, there’ll be a tutor, they can click on right away or if somebody is working on classes that require writing and we know in it’s from inside a Chegg Study or the textbook that they buy will be able to drive directly to it. So, we think we can drive the business faster and more profitable, even though the business is growing at our current rates today. So, we think the cross-sell is one of the primary upside benefit as well as getting younger, deeper into high school and even into middle school balance. So, lots of opportunities for Chegg and to go ahead and go forward and grow faster.

Our next question comes from Corey Greendale from First Analysis. Please go ahead.

Hey, thanks. It’s Ken Wang on for Corey. First of all, congratulations on a good quarter. So, just thinking about Imagine Easy, may be this is going a little bit off of the prior question but to what level does any overlap exists between current Chegg users and Imagine Easy? I know that there was a mention of 3 million students that Chegg didn’t have before, there may be more upside to that, but just trying to get a handle on whether there are any areas overlap right now.

Well, there is always going to be areas of overlap because Chegg’s reach was so high into the college market where we reached well over 50% of all college students anyway, but that doesn’t necessarily mean that were monetizing them from one of our services. So, we look at it as additive to reach and additive in terms of the ability to drive traffic across each of the subject matters and then ultimately the ability to grow internationally, because there’s a lot of international students as well. So, the number I gave you is just domestic growth. Where we’ll be most additive initially will be in high school because pretty much all high school students use it. But any college student, any [indiscernible] student, any college student that has to write is likely on Imagine Easy, one of their products and services, it’s extraordinary popular, so you can go and survey any college or high school student you want. So, there’s inevitably going to be overlap. We think that the independent folks that like their comp scores, they say it’s 3 million just in the month of March alone, which is like a 35% or 40% increase; we think it’s actually bigger, based on internal log. But we’ll learn more; I’m we’ve only owned it for 24 hours. So, we’ll learn more, shortly; but we think this is just giant upside.

And then do know what split is? So, you mentioned middle school students, you mentioned high school students and then obviously college students as well. Do, you know is it primarily high school students that are on Imagine Easy or is it mix of three?

Well, it’s more high school and college than it is middle school. But, we mentioned in the prepared remarks that research shows that the younger you are, the more inclined you are to use online services for leaning than offline. And so, we imagine it’s going to get just deeper down into the middle school area going forward without us having to do much about it because the word of mouth is ridiculous. Just look at the numbers that I’ve cited earlier in the call. But, it’s primarily any college student who has the right is likely using it. It gets recommended by professors. And any high school student that is thinking about going to college is likely using it. So, we don’t have the breakdown yet but it’s not going to matter which is just going to grow in both categories and it’s already large in each one.

And maybe just one last one from me. In terms of user growth, is it pretty much just in line what you’re seeing for Chegg Services as a whole?

Well, it’s hard to know because at the moment, you don’t necessarily have to register. But their user growth is minimally in line with Chegg growth. They are growing more outside the U.S. than we are but in the U.S. they’re growing similarly, maybe a little faster because the word of mouth on it is so high and so much of the service is free at this point. But growth is not the issue. We’re pretty close to covering so much of the college market right now that it won’t be about adding more after this acquisition, it will be about monetizing more. And this is a great way to be able to do it by adding really valuable service. The majority of students for non-economic reasons that don’t get through college is because they are not proficient in writing. And colleges do not have enough money, enough resources, enough tutors, enough teachers to be able to help them, we can. And that’s what makes us really awesome.

Our next question comes from Brian Fitzgerald from Jefferies. Please go ahead.

This is John [ph] on for Fitz, thanks for taking my question. Last quarter, you guys noted that there were some headwinds in e-textbooks. Just curious how that part of the business played out during the first quarter? And then, maybe just more generally, how did the overall textbook pricing environment look like in Q1 and the start of Q2? Thanks guys.

So, when you look at the textbook business, it pretty much played out as we had anticipated. And as you can imagine, when we had the call in February, pretty much all of it -- most of the textbook side of the business was complete because most of the volume as of January, maybe as a little bit of tail over into February. So, pretty much as expected, both from a pricing standpoint and what the trends that we saw in e-textbooks in the second half of last year.

Our next question comes from Mike Olson from Piper Jaffray. Please go ahead.

You mentioned a strong subscriber number of 750,000; I think it was Chegg Services subscribers in Q1. Do you have like a comparative number or either year-over-year sequential that you can share relative to that 750,000? And then outside of the core Chegg Study offerings, which are the other services would you say -- I know it’s hard to pick, but as far as just the ones that have the most near-term revenue contribution potential, which you’re more excited about?

Yes. So, we actually -- it’s 37% growth of paying subscribers year-over-year to the Chegg Service business, which is I think probably the highest in a while. So, Chegg Study has got tremendous momentum right now. That’s our largest; it’s growing extraordinarily fast; it’s got over 85% gross margin; it’s beast and it’s doing really well since we made our investments in it. It improves the Q&A network inside it. I mean I quoted you some of the statistics about 4 million solutions used, 745,000 new questions asked and answered within four hours. It is becoming I think the most popular learning tool that’s not required on college campuses today. So, it is really big and only getting bigger. And so, it’s driving the growth in top line and EBITDA right now. And then Chegg Tutors, we’ve mentioned in the past is our fastest growing business. And so that 750,000 number is a very large number when last year we had 1 million for the year and this was 750,000 in the quarter and that’s because the people that came over from Q4 continue to use it in Q1 and then subscribe it earlier. And that has such a positive impact on our Q1 numbers, which is why we’re on the high end of the range and we beat our EBITDA because it’s really a profitable product. And Chegg Tutors is coming up really fast. So, in Q4, we had a demand issue where we couldn’t eat it on the big days by as much as 50%; that was not the problem in Q1. So Chegg Tutors and Chegg Study are the only two subscription businesses now that we monetize. So that’s 100% of that business. We don’t even have test prep coming on yet; that will come on in the second half this year and we mentioned contribute next year. And then we have Imagine Easy now that will add. So, this is getting really big and really a big contributor on the gross margin line and on EBITDA. So, let me add Andy up here.

So, Mike, you’re asking on the numbers, like Dan said, it’s 37% growth and you can even do the backing into that; it’s a little bit over 550,000 subscribers at the end of Q1 of last year. But probably more importantly is that we saw almost 100,000 subscriber growth in Q1, which is if you think about it, it’s -- the enrollment in what is essentially the second part of the school year is usually lower. So, we saw almost 100,000 student growth in Q1 over Q4, you are asking the sequential information, so really strong growth on our subscription services overall.

And then outside of Imagine Easy, what are you seeing as far as anymore traction of high school students with some of the other services or do you think that’s really not going to change until test prep roll out later in the year?

Well, our former [indiscernible] product are EDU new product that is how we reach over 75% of all high school students to begin with, then we add Imagine Easy which not only helps us reach them but help us reach them live, online when they are learning. That’s the real big advantage. It’s not just the reach, it’s the engagement, the time spent 8 minutes of session. So, we have the ability to communicate with them on a very regular basis over long periods of time which we don’t get to do when you are offline. So that is a very big deal. And then test prep will be additive -- will not only be able to sell to high school students but it’d be additive in terms of our reach. So, we feel in really good shape in the high school market at this point, where three years ago, we were almost zero. So, what a big turnaround!

Our next question comes from Jeff Silber from BMO Capital Markets. Please go ahead.

I just wanted to go back to an earlier question about Imagine Easy. Can you talk to us about the seasonality of the business, if any?

Yes. So, we don’t think a seasonality in quarters, we think a seasonality in halves. And the volume of activity that happens in education is really from the third week in August through the midpoint of May and there it builds from August and goes pretty consistently through all the way through to mid May and then it comes down and then goes up a little bit in the summer time because of summer school and then it comes to the June, July and first two to three weeks of August are pretty much barren periods for everything. So, we have really big seasons August through December and then January through May.

So, what I’m trying to get is try to come up with an annualized number for revenue. As you mentioned the $7 million impact for the next eight months, obviously that includes the summer. Would 12 plus million number be a little bit more accurate on an annualize basis?

Yes, I think that’s a little sporty, Jeff. I think it’s probably when you extrapolate things out; it’s probably in the 10 range and may be 3 to 4 in EBITDA. And like we said earlier, it’s growing at similar rates to what we see in our other businesses and similar gross margin. So that will help you model out a little bit what next year could look like.

And now with this acquisition behind you, what else is missing, if anything from your portfolio? Thanks.

One thing I’d just add on the EBITDA is it adds almost as much EBITDA as we earned all of last year. So, this is really accretive to us in terms of the impact it has and on cash flow by the way because it’s a high cash generator also. So, I think for our shareholders, we’re adding substantial amount of EBITDA with growth on top of what our core business is doing. So, all that is really good. And the other question is what else would we add to our portfolio? So, we’ve been very patient where we really haven’t bought anything for nearly two years. So, we’ve been spending a lot of time organically now on careers and on test prep. So, we don’t imagine -- I mean if a n opportunity like this one comes up again where we can get accretive to everything and ad, reach and brand and engagement and revenue and profits, we would continue to doing it, but there are other topics we mentioned in the past. Math is probably one of the biggest ones, but we feel very comfortable with a hand we have right now for a while. But if we see an opportunity like this one, we would certainly take a serious look at it, but math is probably the one after test prep, which is organic and which we expect to make an impact next year and careers. So, that’s really how we’re thinking about it right now.

Our next question comes from Aaron Kessler from Raymond James. Please go ahead.

Couple of questions, first, Andy, do you still have the print versus non-print breakdown? I may have missed this. Second, just on the Chegg Tutors revenues, I think last quarter you mentioned that the revenues were impacted a little bit by the mismatch. Any -- with match rate improving in Q1, revenues trend back to where your thought that would be, and just any updates on advertising services growth concept, what type of growth rates we should expect there?

So, Aaron, as far as the print versus non-print, we focused and we changed our reporting to required materials which includes e-textbooks and all of the print and Chegg Services which is all our subscription services and our learning services. So that’s the reporting that we’re going to be doing, going forward. So, as you shouldn’t expect us be doing print versus non-print, it’s not relevant for our business today, it may be was at one point in time but today, it’s required materials and Chegg services.

And as it relates to the tutor question, which is what the demand and the impact on revenue. So, we mentioned that tutors is our faster growing business. And what’s exciting is on-demand learning is not something that really was ever available in college. So, people always associate tutors with high school and below and subject matter and test prep, and we capture all that. But the real growth, and it’s extraordinary growth is in the college market where we’re seeing on demand for subjects three that I’ve mentioned on the call, but obviously then there is finance and accounting and statistics and physics and all of these amazing subjects. So, we’re very comfortable with our guidance. As Andy said, we’re bringing up the midpoint of our range because we have a tail of two halves. So, we really can’t talk much about the second half at this point but the first half looks terrific to us. And what I would say is we’re seeing record days in tutoring across the board right now to the very different scenario than what we saw in Q4.

And last question I’ve got on advertising solutions, just trying to understand the growth which we’re looking for there?

We’ve not broken that out deliberately because one of the things -- so many of our businesses are still new and nascent, and we’re learning a lot about them and their seasonality and their growth rates and the subscription businesses are really taking off right now. The ad businesses are growing similarly to what they have in the past and we don’t expect much of a change for that until sometime in the future. We’re investing a lot in the EDU business right now and the platform and the ability to help colleges understand, not just the name they acquired from us but all the names and lifetime value of those names. So, we don’t expect much change in that business. And we’ve said in the past that it’s 70-30; I would say it’s probably, even though advertising is growing at the rate we would hoped, subscription businesses are growing so much faster that that probably that spread will increase. Again Chegg Study and Tutors are really the core to growth right now and they are doing really well.

Our next question comes from Matt Blazei from Lakestreet Capital Markets. Please go ahead.

Most of my questions have been asked, but I wanted to just clarify a little bit; obviously there is some pretty large contingency payments here with the acquisition. Could you give us some high level view of how those contingency payments are going to be achieved?

When we structured the deal we wanted to make sure it was super shareholder friendly and we believe we have done that as far as spreading up the payments for the better part of three years. There is two contingencies, and it kind of wraps up together. One is a performance contingency, which really revolves around the performance of the business this year and the second component is time based over three years. And part of that is we want to hit their numbers and we actually beat them, we want the two founders who are fabulous to run the business for a period of time. So, those are the contingent payments like you said, super shareholders friendly paid out over three years.

And so, you can think about it is all performance based which is they need to hit a number this year and then they need to be here in order to collect the money that we would pay them. And one of the great things is because it’s profitable because it kicks off cash flow that we’re able to earn cash from it to help pay for it. So, it’s really shareholder friendly deal.

So, at the end of the day, assuming they do these things which is not right -- the momentum is all in their favor the actual price is closer to $60 million…

If they stay all three years and they hit their numbers, then it would be $60 million and we could do it all cash or if we want to, we can do part of it stock that’s 100% our choice. But the great thing is it kicks off cash which helps finance that $18 million contingency payment. So, it finances its own self, so it’s a really great deal.

And next question comes from Mitch Bartlett from Craig-Hallum. Please go ahead.

My questions also has been covered a bit, but maybe if I can have you go back, Dan, and just talk about in the answer to Michael I think question about Chegg Study and Chegg Tutors the growth rate there that 37% very impressive. But I just want to -- if you could talk more about how that is doing. Tutors could be growing still rapidly with a smaller ARPU; the Study’s growth rate could be much lower. So, I am just trying to flush that out a little bit and understand what the potential is over the next several years if the penetration is still great right now.

So, great question. So, we don’t think we’re anywhere near the penetration level of what Chegg Study can do. And although we don’t break out the numbers, just some color on it is Chegg Study is growing as fast this year as it did last year. So, we don’t see a slowdown in that business. The reason is because we’re now up to 21,000 ISBNs. And the Q&A network which no one else on the planet has is so good and so robust; I think we said 4 million solutions, 745,000 new questions in the quarter. So, you can see students are beginning to depend on it. When we originally got, it was textbook specific but now it’s not only the text books it’s subject matter beyond what textbooks we have because of the Q&A network. So, we used to think about it as about -- because most of it is stem, we used to think about it as about 6 million people major in STEM and another 6 million people take STEM related classes. So, the TAM would be 12 million. Then we said alright, let’s discount it down to 9, but we are seeing that TAM is getting bigger now because the subject matters are growing outside of just textbooks, same as what’s happening in Tutors by the way. They’re coming to Chegg to learn all of their subjects. So, we don’t think we’re anywhere near penetration. And I think the fact that the business is growing as fast this year as it did last year is an indication of that. Chegg study has become something really special. And I think if you look at any research or ask any student about it, three years ago when we went public, the whole category of digital for us was like $20 million and now it’s -- even before the acquisition of Imagine Easy, it’s going to be in the 120, that’s all growth that’s coming now and primarily from Chegg Study and Tutors. By the way, Tutors ARPU will actually be higher than Chegg Study because they stay on a longer. But that’s a business that’s not yet at scale, and when it gets to scale, it’s gross profit margins will be over 50%. And so, those two things together are just really huge opportunities. Then, you add writing on which is the single biggest category that is not class specific in, and we think those three together are just really, really, really big. We’re as you can tell, probably most enthusiastic we’ve been because we see the momentum.

And just to review again on the writing, advertising, primarily based advertising business right now, you see the potential of investing in subscription based services that might be more directed towards the college audience?

Well, yes, right, that’s exactly right because we’re not really targeting things towards parents have to pay; we’re targeting them where the students themselves have to pay and that’s more college related. So, right now, each of the services has a subscription component. That subscription component doing very well, but that’s not really been their strength. They don’t know how to price them; they don’t have any data do any of the testing; they haven’t been able to necessarily make the investment into them to be able to expand the number of services available. We think we can do that and grow it faster they have been growing it and produce more EBITDA, even though we’re investing, and that is because of the ability to use the synergies between the two. So yes, that’s exactly correct but there is no urgency about making the subscription business grow substantially faster right now because the ad business is doing very, very well and only gets bigger as we get more audience.

[Operator Instructions] And if there are no further questions, I’d like to turn the floor back over to Mr. Rosensweig for any closing remarks.

Thank you, everybody for joining us. As we said, we are off to really probably the best start we’ve had to a calendar year. Our subscription businesses are really driving forward in the addition of Imagine Easy is accretive in every category from reach to engagement, to revenue, to EBITDA. So as we come to the conclusion of the transition from a textbook rental company to an online pure digital learning company, which happens at the end of this year, we think you will see really special opportunities from Chegg going forward. And we couldn’t be more excited and we couldn’t be more excited about Neal and Darshan joining our company. And the other thing, I’d be remiss, many of you know, Bill Campbell he was my mentor and Chegg’s mentor. And without Bill, Chegg would not have been able to survive the transition and be the driving company that it is today. And so I just want to make sure that we thank Bill for everything that he’s done for us, for me, for all the people that he’s touched. And we’ll talk to you guys next quarter. Thank you very much for joining the call.

Thank you. This concludes today’s teleconference. Thank you for your participation. You may disconnect your lines at this time.