Crexendo, Inc. (CXDO) Q2 2022 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Crexendo Second Quarter 2022 Earnings Call. At this time, all participants have been placed in a listen-only mode and the floor will be for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Steven Mihaylo. Sir, the floor is yours.

Thank you. Good afternoon. I'm Steve Mihaylo, Chairman and CEO of Crexendo. I want to welcome all of you to Crexendo's Q2 2022 conference call. On the call with me today are Doug Gaylor, our President and COO; Ron Vincent, our CFO; Jon Brinton, our CRO; Anand Buch, our CSO; and Jeff Korn, our General Counsel. I'm going to ask Jeff to read our safe harbor statement. After that, I will give some brief comments. Ron will provide more detail on the numbers. Doug will provide a business and sales update, and then we'll open the call up to questions. Jeff, would you please read the safe harbor statement?

Yes, sir. I want to take this opportunity to remind listeners that this call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. All statements made in this conference call, other than statements of historical fact, are forward-looking statements. Forward-looking statements include, but are not limited to, words such as believe, expect, anticipate, estimate, will and other similar statements of expectation identifying forward-looking statements. Investors should be aware that any forward-looking statements are based on assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed here today. Those risk factors are explained in the detail of the Company's filings with the Securities and Exchange Commission, including the Form 10-K for fiscal year ended December 31, 2021, and the Form 10-Qs as filed. Crexendo does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason. I'd now like to turn the call back to Steve. Steve?

Thank you, Jeff. I'm very pleased with the Q2 results. It shows strong growth and continued acceptance of both our software solutions division and cloud telecommunication services division. Considering that we are still facing macro and massive economic headwinds that I discussed last quarter, the results are very, very and really extraordinary. 53% year-over-year increase in revenue is a very positive metric. Yet we continue to maintain profitability, both on a non-GAAP and an adjusted EBITDA basis is also quite impressive. All the trends look very good to me. The Company operates as one company. The employees from both sides of the business work together in our overriding goal, and that is to provide the best services in the industry. You have heard me say this before, and it is not an empty slogan, but we love our customers and go out of our way to do the best for them every single day. I believe that Crexendo will continue to keep innovating and keep providing the very best services to our clients, all which I am convinced will continue to accelerate our growth. With that said, we can still improve. We are managing the business very carefully. We stress fundamentals, sales process, margin, managing expenses and margins. That is something we do every day. It makes a better business to increase its shareholder value. This is a simple business 101, but often gets forgotten. So I remind the team regularly to manage the business, the product play. I am proud that we have carefully built the business, and we'll continue to do so. We have not run up sustainable -- unsustainable debt which with current rising interest rates is crippling many of our competitors and businesses. We will also stress process and careful strategic management. The results I am convinced will continue to impress. I have very high expectations for our future, and I am convinced we will impress our customers. Most importantly, we will convince -- we will impress our shareholders with our steady and sustainable results. We have grown the business the right way, and we will continue doing that. My confidence is boosted by the fact that we have won numerous awards lately. Perhaps the most impressive is our being awarded the number one high performance in G2.com's Summer 2022 Grid Report for VOIP providers. The award is particularly gratifying as the only ranking from verified customers. This shows the efforts of our people. I'm convinced that this will continue to grow the business, both organically and with accretive acquisitions that we are carefully monitoring. With that, I'll turn the call over to Ron. Ron?

Thank you, Steve. Good afternoon, everyone. I'll start with some financial highlights for the second quarter of 2022. Our total revenue for the second quarter increased 53% to $8.8 million compared to $5.8 million for the second quarter of the prior year. Our service revenue for the second quarter increased 5% to $4.6 million compared to $4.3 million for the second quarter of the prior year. Our software solutions revenue for the second quarter increased 256% to $3.6 million compared to $1 million for the second quarter of the prior year. I'll remind everyone for comparison purposes, the three months ended June 30, 2021, only includes one month of activity from our June 1, 2021 acquisition date of the software solutions segment. Product revenue for the second quarter increased 57% to $692,000 as compared to $440,000 for the second quarter of the prior year. Gross margins were as follows: telecom services, 68%; software solutions, 67%; product, 46%; and our overall consolidated gross margin was 66%. Operating expenses for the second quarter increased 38% to $9.7 million compared to $7 million for the second quarter of the prior year. Same comment for comparison purposes, the prior quarter only includes one month of the software solutions segment operating expenses. The Company reported a net loss of $896,000 for the second quarter or a $0.04 loss per basic and diluted common share compared to a net loss of $1 million or $0.05 loss per basic and diluted share for the second quarter of the prior year. On a non-GAAP basis, we reported earnings of $512,000 for the second quarter and $0.02 per basic and diluted common share as compared to non-GAAP net income of only $37,000 and breakeven on a basic and common share for the second quarter of the prior year. Our EBITDA loss for the second quarter was $232,000 compared to $983,000 loss for the second quarter of the prior year. Our adjusted EBITDA for the second quarter increased $626,000 as compared to a loss of $153,000 for the second quarter of the prior year. So very positive increases there. Now I'll highlight some highlights for the six-month period. Total revenue for the six months ended June 30 increased 65% to $17 million compared to $10.3 million for the same period of the prior year. Our service revenue for the six-month period increased 6% to $9 million compared to $8.5 million for the same period of the prior year. Our software solutions revenue for the six-month period increased 578% to $6.9 million compared to $1.1 million for the same period of the prior year. And for comparison purposes, just to remind you, that our software solutions was only included from the acquisition dated June 1, 2021. Product revenue for the six months ended June 30 increased 47% to $1.2 million as compared to $808,000 for the same period of the prior year. Operating expenses for the six-month period increased 56% to $19.2 million compared to $12.4 million due to the software solutions segment only having one month of operating expenses from the prior period. The Company reported a net loss of $2.1 million for the six months ended June 30, 2022, or $0.09 loss per basic and diluted common share as compared to a net loss of $1.7 million or $0.09 loss per basic and diluted share for the same period in the prior year. On a non-GAAP basis, we reported income of $917,000 for the six months ended June 30, 2022, or $0.04 basic and diluted common share as compared to non-GAAP net income of $345,000 or $0.02 per basic and diluted common share for the same period of the prior year. EBITDA loss of $1 million for the six-month period compared to a loss of $1.7 million for the same period of the prior year. Adjusted EBITDA earnings of $928,000 for the six-month period as compared to $92,000 for the same period of the prior year. Total cash and cash equivalents at June 30 was $4.9 million compared to $7.5 million at December 31, 2021. Cash used for operating activities for the six-month period was $2.6 million compared to $224,000 used for the same period of the prior year. Cash used for investing activities for the six-month period was $40,000 compared to $10.5 million used in the same period of the prior year. Cash used for financing activities for the six-month period was $20,000 compared to cash used for investing activities of $966,000 for the same period of the prior year. With that, I'll turn it over to Doug Gaylor, our President and COO, for additional comments on sales operations.

Thanks, Ron. We had a very strong quarterly performance in Q2. Our non-GAAP earnings continued to improve with $512,000 or $0.02 per share and strong revenue numbers of $8.84 million that represented a 53% increase over Q2 of 2021. As we celebrated the one-year anniversary of our acquisition of NetSapiens in June, I could not be more pleased with how well the two organizations have come together. We have realized strong synergies, combining the two companies and are positioned well for continued growth and top and bottom line improvements. Our organic growth of 10% year-to-date on the cloud telecom segment in line with our strong software solutions contributions, highlight why we were so confident that the combination of our two companies to create the fastest-growing UCaaS platform in North America with such a great marriage. After our first year of marriage, I can tell you the honeymoon is still going great as evident by our recent $2.5 million end user milestone announcement as well as our multiple third-party awards that we have received for our product offerings and services over the last few months. Our backlog is strong -- very strong at $42.2 million at the end of Q2. Our backlog number includes the software solutions backlog amounts as well as our Crexendo direct customers and represents a 54% increase of our backlog number for Q2 of 2021. We had very strong bookings for the quarter in the software solutions segment as we continue to add new UCaaS licensees that utilize our platform to run their business. Our pipeline for new licensees continues to be strong, and we have had a great amount of interest in our platform at two recent industry conferences that we attended during Q2, further reinforcing the high demand for our platform, while we see major challenges appearing for some of our competitors like Avaya, Mitel, 8x8 and others. Our Crexendo licensees are seeing strong growth with the rapid migration of businesses to the cloud, and we benefit from that with additional session purchases as they grow. We continue to develop new applications and new solutions to further monetize these additional services from Crexendo to help drive even more organic growth in the software solutions segment. We are excited to announce our version 43 software release on our platform that was released during Q2 and provides many new and requested features. We are also excited with our pending release of our new contact center -- Crexendo Contact Center as a Service with omnichannel customer engagement, chatbots and automations that are perfectly designed for larger call center applications. We previously announced that as part of our announcement with Mavenir and are excited about that release that will be happening this quarter. We are always evaluating similar partnerships that will increase the functionality and offerings for our platform and add to our revenue streams. We continue to differentiate ourselves in our software solutions segment of our two largest competitors, Cisco's BroadSoft and Microsoft's Metaswitch. Our model gives us significant pricing advantages over our competitors, and we now have over 210 licensees using our platform and are very excited about the prospects we have in our funnel to continue adding new licensees. Our master agent partnerships with groups like Telecom Consulting Group and OTG Consulting are starting to get traction. We expect to produce strong sales and pipeline growth from both of those organizations. We're also very optimistic about the sales growth predictions from these partnerships. Our Crexendo VIP offering that has 100% uptime guarantee along with the lifetime warranty on our Crexendo phones continues to grow as we onboarded a record amount of new customer logos on the platform in Q2. We continue to add new and larger agent partners to the program and are excited about the opportunities in the funnel that these new agent partners are bringing to the table. As I mentioned, the synergies that our combined organizations are recognizing in regards to personnel and processes has created a very strong Crexendo. Our sales and marketing teams have all been performing well under the direction of our CRO, Jon Brinton. The consolidation of all of our accounting personnel under Ron Vincent has been very smooth. Our engineering and development and quality assurance teams are working seamlessly together under our CTO, David Wang, and benefiting from the additional resources and talent that the combined teams now possess. Our operations and support teams are excelling and handling all of our direct and indirect customer relationships, and I am very pleased with how our two organizations have come together, and I'm very excited about our go-forward plans to continue to grow our organization. As we have previously mentioned, the amortization of intangible assets and stock comp expenses have us managing the business based on our non-GAAP earnings. And I'm very pleased that we generated non-GAAP earnings of $0.02 per basic common share for the quarter and feel that is a strong proof that our combined organization continues to leverage the opportunity we have to grow and succeed. I'm extremely thankful to our fantastic team of Crexendo employees that have come together with a tremendous amount of hard work and effort to make this a successful combination. We believe we will continue to see more efficiencies and cost synergies as we continue our growth. I'm very excited about the future direction and opportunity for Crexendo. The demand for our product offerings is high, and our solutions are strong, and that positions us extremely well for the future. We will continue delivering the best UCaaS offerings in the industry to our customers, our licensees and partners and are committed to delivering the best returns for our shareholders. I will now turn it back over to Steve for any further comments.

No. I think you've covered everything between you and Ron, Doug. I'm going to open it up for questions now. Mike?

[Operator Instructions] Our first question comes from Griffin Boss from B. Riley Securities.

So first for me, I was curious if you guys could give us an update on how churn is looking, given it spiked up a few quarters ago? Just any color there would be helpful.

Well, I can tell you this, it's down. I'm going to let Ron Vincent fill in the blanks.

Yes. Thank you, Steve. Yes, we have -- as we predicted, we see improvement, we have. And we were trending about the 1.25% per month, and that's come down and we're down to 75 basis points, 0.75% on a monthly average. So very good improvement over the year-end numbers.

Great. That's great to hear. And then, yes, so next, just any color on how the customer migration process is progressing to the NetSapiens platform?

I'm going to let Doug handle that one, Griffin.

Yes. Griffin, that's coming along very nicely. We've probably got about 25% of our accounts migrated over. It's a full process. We don't have to migrate them over. So we're handling it very gingerly because there's a lot of details in migrating from one platform to the other. So it's just a slow and steady migration process. On top of that, all new customers are being onboarded onto the VIP platform. So it's -- everything is going extremely, extremely smooth. We've got our engineering team working on scripts to allow us to do some of that migration a little faster, and that's coming along extremely well as well. So I couldn't be more pleased with how the migrations are coming along and how strong the VIP platform is on handling all of our new customers that we're adding to the platform.

Great. Okay. And then last one for me. I know you guys mentioned in the prepared remarks you're always evaluating new partners to add to your ecosystem. Just curious if there was anything else you can give us in terms of the M&A pipeline? Anything you guys are seeing or actively pursuing right now? Or anything along those lines?

Well, we're always working on M&A. And because of the accounting rules and the SEC rules that requires that we do an audit. And with that, I can tell you that, that slowed us up significantly.

The pipeline is rich with opportunities out there, and we've got numerous discussions happening. And so we're excited about where those opportunities may lead us.

Anybody we have discussions with us is under NDA, so we can't give any more detail than we've already given.

We now have Bruce Goldfarb from Lake Street Capital.

Congratulations on the great results.

I'm glad somebody has noticed. We're pretty excited about the result.

Fantastic and churn down and you're growing.

We are. We grow a little bit faster if there was some for the SEC and the AICPA. Anyway, go ahead. And I'm sorry. I'm just frustrated.

How is NetSapiens pipeline looking for the second half of the year?

I'm going to let Anand Buch handle that one and Doug.

Sure. Yes, I can -- I'm happy to jump in, and then we can have our CRO comment as well as, Jon Brinton. Yes, we continue to see kind of the existing -- the partner base that we have, the license fees continue to grow at an aggregate rate faster than the existing service providers in the market. And so that in itself creates both opportunities both in the existing pipeline for growth in terms of upgrades of existing capacity upgrades. So that looks pretty healthy and pretty solid. And then as Doug pointed out, we continue to see new logos coming in, in addition to both in North America and quite a bit of increase internationally as well. So Jon, I don't know if you want to comment on that as well?

Yes. I would say, Bruce, the pipeline is strong. The nice thing that we're seeing is of the customers that we're talking to and the partners that we're adding. Many of them are choosing to assist -- have us host the solution for them. As you know, part of our go-to-market strategy is that they can build and deploy it in their own infrastructure or deploy it in ours. So many of them are having us actually host the solution for them. And then about 1/3 of the new licensees that we've added to the software solutions portfolio are also choosing our subscription licensing model, which will help us grow our recurring revenue more rapidly over time. So we continue to see strong pipeline and good results in the period.

I might also add, Bruce, that we're taking business away from Microsoft. We've always taken business away from Cisco, but now we're starting to take business away from Microsoft, and that's because we love our customers, and we take better care of them. And we've got a white glove service. And for those of you that are listening out there that might be a potential customer, we'd love to include you in that love fest.

It explains your success.

I'm excited.

Yes. My last question is, is there any change in competitor behavior like winning an 8x8, regarding their reseller transfer bounties and they're trying to take your customers away even their sales are at risk.

No. Look, we all compete with each other. The fact that Vonage went to Ericsson and the fact that RingCentral and 8x8 are struggling because of all of the debt they have is helping us. But I'm going to let Doug fill that in.

Yes. I think it's still a very competitive environment. But we have seen some of those exorbitant bonuses dwindling some. So I think as you look at some of our competitors that are maybe under a little bit more of a cash crunch. I think that they're realizing that they've got to start showing better bottom line improvements. And so some of those incentives are lessening. So we continue to play our game plan, and it's been very, very successful. So with the recent announcements of layoffs at RingCentral and Avaya and Mitel, and we continue to see our competition twirling, and we're trying to take advantage of that as much as we can by just continuing to work our game plan, which is a very strong game plan.

And let me point out one other little factor here. We have no debt other than that on our building and a little bit of acquisition. But that said, our competitors are grounding in that.

Makes you a lot better positioned. Congrats again on the fantastic quarter. And that's all my questions.

We now have Chris Sakai from Singular Research.

I just had a question, I guess, my first one. It looks like you guys have a gross margin improvement of about 8%. I just wanted -- I know last quarter, you mentioned that some expenses that was considered cost of goods sold has been moved to R&D expense. I just wanted to know how much of the improvement was because of that? And how much was it not organic?

Well, let me first point out that Ron Vincent will give you all the details here in a second. But one of the things that I harp on a lot to all of our managers is the fact that we need to cut expenses. And we've identified a whole bunch of low-hanging fruit, which you're going to see over the next couple of quarters, we're going to improve. Having said that, I'm going to turn it over to Ron.

Chris, the majority of that improvement in our margin was related to refining our analysis on the team members and their performance on the development of our software products. And -- but we completed that analysis and review of the guidance and we made the reclassification to proper classify those individuals as R&D work on our software platform. So the majority of the margin increase there that we recognized during the quarter was that reclassification.

But just so you're aware of it, Chris, we are going to get better.

Okay. Right, you're saying that was the 7% range last quarter?

Yes. I think that's still in the targeted range, and I think we're well on our way and to giving the resales numbers here in the next few quarters.

All right. And then with the full and the subscription revenue, how much is onetime and how much is recurring?

So on the software solutions side, for the quarter, about 74% was recurring and 26% was onetime revenue. And we break that down in our footnotes. So, yes.

Okay. Great. And then how was the Mavenir partnership going? I know you said it was going to start right in the last month of the quarter. How did that go?

Yes, Chris, this is Jon Brinton. So in -- there's two sides to the partnership. So in the last quarter, Mavenir launched their solution that was built on our UCaaS platform. So they're a platform customer for us in the software solutions division. And then as far as our commercial rollout of their CCaaS product, we're actually doing that in the next couple of weeks around the beginning of September for our commercial rollout of that offer. So we have some lighthouse partners that had been in preview with us on that product, and we're deploying that in our own product to offer within this quarter. So things are going great. It's actually gotten excellent feedback from the channel partners that we've kind of socialized and done some of the preview work with, and we're very excited about getting us in the market.

We now hear from [Edward Gilmore], who is a private investor.

Congratulations on the great quarter and growth there. Just a couple of quick questions from me. I was curious, I think it was Doug that mentioned still kind of in the honeymoon phase since the acquisition. And I was curious if kind of given that remark, if you still see any opportunities for continued consolidation and cost savings from the merger and acquisitions of the two companies?

The short answer is, yes, and the longest -- I'm going to turn it over to Doug and all my other guys on this call.

Yes, absolutely. Thanks, Ed. I appreciate you joining the call. Yes, there's still some opportunities there as leases come up and things expire, we're taking advantage of that. We've recognized a lot of synergies and a lot of cost savings already and still have a lot on our list. When we put the two companies together, we had a hit list of probably about 60 or 70 priority action items, and we're very pleased with our progress there. The majority of those have been completed successfully, and we've recognized those synergies and those cost savings, but there's still some left. I mean we've got some lease space opportunities that come up over the next couple of months, and we're evaluating those options. And we anticipate seeing significant savings on reallocating that once we get those contracts renegotiated in some of those things identified. So they're all on our hit list, and we continue to check them off on our check list, and we're extremely pleased with where we are right now and know there's still a lot more opportunity for us to continue benefiting each other as the organization continues to grow.

One of the things you have to remember, Edward, is that we're in the cloud telecommunications business, and that's the mobility business. And even though we save a little bit of money, we add productivity to our customers that's unbelievable if they're using the product correctly. And we are starting to see some of those benefits in our own business as well, and we will continue to see those benefits. So what Doug said is so true, but it's only going to get better and better from here on.

Okay. Great. And then next question, again, tremendous top line growth with the increase in the revenues there. Do you see that as kind of a step shift where that's going to be continued to see the incremental lift will continue to subsequent quarters? And then also, do you see any expectations around like top line growth from that as a percentage of quarter-over-quarter that you might be able to give some color on?

Look, we've continued this state now for two or three quarters, and I'll restate it. We expect to get approximately 20% -- 15% to 25% from organic growth and 15% to 25% from acquisitions. This is not our first rodeo. The Company that we all were involved in we had plenty of acquisitions. And like I said, as we get bigger and bigger, they're going to be easier and easier. With that, I'm going to turn it over to Doug to give his color -- comment.

Yes, I think that the momentum that we saw from Q1 to Q2, I think will continue. We've got a strong pipeline and has been extremely confident on what the second half of the year looks like. So we're, again, continuing to execute on our game plan. We've got lots of good opportunities in the pipeline. Our operations team is doing a great job of getting these jobs implemented, so we can take them through revenue. So again, we don't give forward guidance, but I feel really confident that we're executing our game plan exactly the way we should be.

And then just one last quick question for me. Any commentary you're kind of anything good share on the sales force and cost opportunities between NetSapiens and Crexendo? Just are you seeing any -- are you seeing that the lift and are your expectations being met there as far as being customers from each side being able to use the other company services and vice versa?

Yes. I think we have two segments for a reason. I mean, the software solutions segment sells our platform to our licensees out there. And so that's a different strategy than our direct sales force and our direct agents selling to end user customers, but benefits in how we go to market in both areas. And so we've got our user group meeting coming up in October, which will have a high majority of our licensees there. And so a lot of that focus this year is going to be on sales and marketing and how they can help grow their business. And so we're going to implement a lot of or suggest a lot of great ideas that have worked on our direct side to help them out in growing their businesses. And the IP platform is our platform that we got through the software solutions acquisition. And so that's our platform going forward on our direct applications. And so it offers more functionality, more efficiencies out there with 100% uptime guarantee and our lifetime warranties. It's being received extremely, extremely well out there in the industry. So I'm very pleased with how the sales initiatives are going. They are two separate sales focuses. And so Jon has done a great job of keeping both teams focused on what's important to them. When we do these trade shows, if somebody comes up to us at one of these trade shows, and they're more of an agent than a platform licensee, we've got the best of both worlds because we can handle their needs with whatever they're looking for. So if they're looking for their own platform, great, we've got it. If they're looking for us to host their own platform, great, we've got that too. And if they aren't ready for a platform yet, they just want to sell our solutions on a revenue share basis, great, we've got that solution as well. Jon, any color you want to add to that?

I would just add to kind of amplify what Doug said is that it's a diverse go-to-market strategy. The important thing is for partners at the end of the day, we get the partner the option that works best for their business model. So we have two or three different on-ramps that partners can take to experience our technology. The beauty of it is all of the -- everything that happens is on one platform with one R&D stream, one investment stream and then that we can continue to develop over time. So we're looking to add additional capabilities to that. And as we look at additional capabilities, which is a big part of what Anand is doing, along with me as we look at potential partnerships, we're always looking at how we deliver that content to both our platform licensees and the software solutions division and our partners or end customers in our telecom services division. So I think the ability to have two or three routes to market with the same revenue opportunity is part of what really creates the efficiency here.

And one of the things you have to remember, Edward, is we have four distinct channels that we operate through. Our software solutions division sells licensees. Those licensees, they sometimes sell to the end user, and they also sell through white label customers. We sell a little bit of white label stuff, but we're mostly concentrating when I say that telecom division is mostly concentrating on the end user. And there, again, we have two different channels we sell through. We sell through our direct, which is about 10 salespeople, and we sell through a whole bunch of partners, which have multiple salespeople and there's over 200 of them. And we cover everything, and I think our competitors probably only cover a portion of that. So we're just getting started.

Our next questioner is Michael Kaufman with MK Investments.

Steve and Doug, I want to congratulate you and the team for another great quarter. One of the things that would be helpful is that we talked about early on that there's an opportunity and somebody else mentioned it for a 70%-plus gross margin in the business, and it would be helpful to have kind of an economic horizon where you show what the expense to revenue ratios of the key metrics are going forward so that investors could get a handle on where you think you're going long term because I know you're in the transient state now with a major acquisition and integration and everything else, so it would be helpful if we can start putting down some road maps where we see -- where we would like to go and how we're really getting there soon? That's the only thought that would be helpful for me.

As time goes on, we're going to get more and more granular with our reporting. Right now, we report what's required, and we'll probably go the extra mile starting next year. So that's just in a couple of months from now. But yes, we're working on margins. We're working on expenses, and we're working on revenue, and you're going to start seeing real results here quickly.

All right. I know the Company is in great hands. And I just thank everybody for all their assets and keep it growing.

You bet. We'll grow. We're not going to fall asleep on the job.

[Operator Instructions] Sir, there appears to be no further questions in the queue at this time. Do you have any closing comments you'd like to finish it?

I do have a few closing comments, Mike. And one of the things I want to tell all of the people on this call and to everyone else that happens to replay this call, we are just getting started, and it's going to get better and better from here on out. I know it's been a long time in the incoming. But in answer to that, it's because of all of the hoops and regulation and everything else that we have to jump through. But it's going to get bigger. I mean, as we get bigger, it's going to get better. And just hang in there. Nobody is falling asleep on the job, and we're not going to either. With that, I'm going to wish you all a good evening and hope that everyone is here for the next call because it will be better. And we look forward to talking to you on the Q3 call. Take care, and good evening.

Thank you, everybody.

Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.