Good evening. My name is David, and I will be your conference operator today. At this time, I would like to welcome everyone to the 8x8, Inc. Fiscal First Quarter 2021 Earnings Conference Call. I will now turn the call over to Victoria Hyde-Dunn, Head of Investor Relations.

Thank you. Good afternoon, and welcome to 8x8's First Quarter Fiscal 2021 Earnings Conference Call. Joining me today are Vik Verma, Chief Executive Officer; and Samuel Wilson, Chief Financial Officer. During today's call, Vik will begin with business highlights of our first quarter performance. Following this, Sam will provide details on our financial results and guidance. After these prepared remarks, we look forward to taking your questions. Before we get started, just a reminder that our discussion today includes forward-looking statements about 8x8's future financial performance as well as its business product and growth strategies, including the impact of the COVID-19 pandemic. We caution you not to put undue reliance on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements as described in our risk factors in our reports filed with the SEC. Any forward-looking statements made on this call reflect our analysis as of today, and we have no plans or duties to update them. In addition, some financial measures that will be discussed on this call, together with year-over-year comparisons, in some cases, are not prepared in accordance with U.S. generally accepted accounting principles, or GAAP. A reconciliation of non-GAAP measures to the closest comparable GAAP measures is provided with our earnings press release and PowerPoint presentation deck, which are available on our Investor Relations website. With that, let me turn the call over to Vik.

Thank you, Victoria. Good afternoon, everyone, and thank you for joining us today. We continue to experience unprecedented times, and I hope you and your families are staying safe and healthy. Before we begin, I would like to welcome Sam Wilson, our new CFO, to the call. Sam has been part of the 8x8 team for almost three years in various executive leadership roles, including spending the previous six months transforming 8x8's cost structure through self-service and automation initiatives as Chief Customer Officer. Sam has also led our small business in mid-market sales, Professional Services, implementation and customer support functions. As you will see, Sam has quickly come up to speed in the CFO role, and we are pleased to have his financial leadership and operational acumen as we accelerate into a next phase of growth and profitability. And now to today's business. I will focus my remarks on four core topics. First quarter results, go-to-market execution, platform strategy and finally, our path to profitability exiting fiscal 2021. At 8x8, our mission is to help businesses leverage enterprise communications to create the new digital workplace. Business today requires resilient communication systems to support increasingly distributed of fully remote workforces. Now more than ever, cloud communications is fundamentally shaping the new campus, the new work group and the new office. Our team had strong execution against the accelerating cloud transformation opportunity in today's challenging environment. We started our fiscal year 2021 strong with solid service and total revenue growth and improved operating performance, each exceeding the high end of our financial guidance for the first quarter. Total ARR grew 30% year-over-year with consistent performance across our platform offerings. New bookings accelerated to 33% year-over-year, excluding CPaaS. We achieved our second sequential quarter of solid progress toward profitability, beating our bottom line…

Thanks, Vik, and good afternoon. We appreciate you joining us as we report first quarter financial results. I want to echo Vik's comments that I hope you and your families are well and staying safe. I'm excited to be speaking with you this afternoon during my first earnings call as a CFO of 8x8. Thank you to Vik and the Board for having confidence in my abilities. For today's call, I will walk you through our Q1 financial results and then provide guidance for the second quarter and some color on the remainder of the fiscal year. Lastly, I would like to share my initial observations and ongoing priorities over the last 50 days before opening the call to answer your questions. Starting with our first quarter results. We are pleased to have delivered performance that beat our guidance. Overall results were driven by better-than-expected performance from UCaaS, CCaaS and our bundled offerings. Total revenue for the quarter was $121.8 million, an increase of 26% year-over-year and above our $120 million to $121 million guidance. Total revenue was driven by better-than-expected service and Professional Services revenues. Looking specifically at service revenue, we generated $114.2 million, an increase of 27% year-over-year. Please note that service revenue reflects the reclassification action we implemented last quarter and now excludes Professional Services revenue. Including Professional Services revenue, service revenue would have been $118.2 million, an increase of 28% year-over-year. As a reminder, we will not be disclosing the historic reporting of Professional Services after this quarter. Turning to our business metrics. Total ARR was $432 million at quarter end, up 30% year-over-year and solid growth across UCaaS, CCaaS and CPaaS offerings. This growth was driven by our continued movement upmarket to larger enterprises. Channel was also an essential driver behind increasing our reach in…

[Operator Instructions] Your first question comes from the line of Rich Valera with Needham & Company. Your line is open.

Thank you. Good afternoon and thanks for taking the question. Appreciate you kind of reaffirming the 17% to 18% service revenue growth number. That's a pretty healthy number. It just seems that you would need to see a significant incremental uptick in the service revenue added per quarter relative to what your guidance suggests in the September quarter. So could you just talk us through how you're thinking about that sort of acceleration of incremental add of service revenue in the back half of the year? How should we think about that maybe between the two quarters? And what drives that incremental add?

All right. So this is Sam. I'll take that one, Rich. It's straightforward. It's driven by our modeling and what we have based on our bookings and what is currently in our forecasted model. We gave you the 2Q guidance and the color for the fiscal year. I think what you'll see is a higher growth rate, year-over-year growth rate in the fourth quarter over the third quarter. But we're pretty confident what the model shows right now.

Got it. And then could you just give us any color on what's going on with churn? Last quarter, you gave a fair bit of disclosure there. You talked about your DD&E being below 100% because of sort of accelerated SMB churn or higher SMB churn. Can you talk about how that's trended over the last quarter and how we should think about that going forward?

Yes. I think last quarter, we said that we exited fiscal year 2019 or sorry, fiscal year 2020 with our best churn quarter with the fourth quarter. We did see slightly higher churn in Q1, the quarter we just reported. I think mainly based on COVID, I mean, we did see a little bit of increase in our small business segment. I have to say, though, if you look at the cash flow number, collections were very solid in the quarter. So I think it's very manageable. And right now, everything just feels like it's kind of like on the plan that we're expecting for fiscal 2021. Just one more thing I'll add. And then as you mentioned, the NDR stuff. So I think you said last quarter that overall NDR was less than one, but X Series NDR was significantly over one. And as we migrate customers to X Series, we are seeing those types of numbers hold.

Your next question comes from the line of Ryan MacWilliams with Stephens Inc. Your line is open.

Thanks. Just to piggyback off Rich's question. For the service revenue growth guidance, the 17% to 18% for the full year, you talked about this included 200 bps of COVID-related churn per quarter from the first quarter to third quarter this fiscal year. Can you talk about where that was versus the 200 bps for this quarter? And then going forward, would you consider this like a conservative expectation given the rebound that you saw in end of May and June?

All right. So I'll take those in reverse order. I do consider the forecast conservative. As you can imagine, having a global, diverse base like we have and given the fact that COVID is anything but an easily modelable function, we are trying to be conservative with our guidance to make sure that there's no severe surprises. On in regards to churn, I'm I have the advantage of being the new guy, so I'm really not going to get into giving you churn numbers down to the basis point level. I'll just tell you, it's in line with our expectations. There was nothing surprising in the quarter.

Great. And then one for Vik. Some of my checks have highlighted that the 8x8 Voice for Microsoft Teams seems like an interesting integration. With Teams having over 75 million daily active users at this point, how do you think about the size of that opportunity? And what type of customer do you think this fits best with?

Yes. So it's been quite interesting. So we've actually already got customers deployed on Microsoft Teams, gives you a sense of how quick the uptick was, and it helped us win a couple of very large global deals. What we are finding that the profile of the customer is large, multinational customers with offices all over the world essentially, which need global voice and potentially contact centers. And so that piggybacks very well with the Microsoft Teams experience, which is primarily a collaboration experience. And the thing that makes us truly unique is you don't have to get out of the Microsoft Teams environment. It's completely native. You don't have to download anything from 8x8. It's all very tightly integrated together. We had a couple of very interesting events. I think one of Microsoft's largest distributors in the U.K. has really jumped on it and they had, I think, a webinar, which they said was the highest attended webinar. And then in addition to that, we've had I think just out here, we did a webinar and over 1,000 channel partners signed up for it. So we're seeing good, strong demand. And I think it's going to be a decent growth driver for us.

Our next question comes from the line of Meta Marshall with Morgan Stanley. Your line is open.

Hi. Thanks for the question. This is Karan on for Meta. So the first question would be, so you noted that your X Series transition has progressed ahead of plan. So I guess just wanted to know what kind of incentives you're giving to the channel or to customers to accelerate that transition. And then maybe part two to that question would be, what kind of savings would you bring from just supporting one product?

So we'll tag team this one. So the we are not providing incentives to people. Actually, the as you can think about it, this is a company that is 20 to 30 years old. And so we have a customer base stretching back to the early 2000s that have been on various legacy platforms. We've done multiple acquisitions. So accelerating to X Series which, frankly, with all the channel checks we have done, indicated that it's industry-leading NPS and customer satisfaction. What we are finding is we figured out a way to completely automate the process. And so it's a seamless experience for customers where we go in and gather all of the data of usage of the various functions and then literally, over a weekend, the customer comes in, in the morning on Monday, and you're now in a new experience, which is much more integrated, much better user interface, more automation, more self-service, etc., etc. So we're not providing incentives. What we're trying to do is make sure that essentially the two costs remain essentially the same. So there's no real leakage in overall revenue for us, and there's no extra cost for the customer. With regard to the overall cost savings, as you can guess, that is something Sam will address.

So I'll take this one. So right now, I mean, as you can imagine, we just raised the number from 80% to 85%. So we're still expecting, as we go into next calendar year and maybe even next fiscal year, we'll still have people and resources attached to it. Probably as we enter next fiscal year, what we'll do is we'll reassess at that point. And as we finish our migrations, we'll either roll the engineering and the support efforts into high ROI projects or we'll bring it down to the bottom line, whichever seems the right decision at the time.

Got it. And if I could just ask one more. Could you just provide some more detail on your team's partnership and when you think that could contribute meaningfully to revenue?

It's starting to contribute to revenue. I believe there's 100 active deals in the pipeline. It is just another one of the growth drivers for our UC, CC platform business. So we continue to see traction in that. And that, I think, becomes another differentiator for us. So far, so good.

Your next question comes from the line of James Breen with William Blair. Your line is open.

Thanks for taking my question. Just a couple on the sales side. You talked about channel bookings growing 47% year-over-year and 62% of new bookings. How do you think about that over the long term? Where can that go to? Will it be eventually be 80% or so? And then when you look at your breakout of by customer, small, mid and enterprise, are there any [indiscernible] between the gross margins in those businesses across the three different segments?

All right. I'll I guess I'll take these. I'll take both of these. We expect that channel, as a percentage of overall bookings, will continue to trend higher over time. But I want to leave you very clear, that won't be a linear thing, it will be jumpy. A lot of our larger deals, our big 8-year TCV deals, are generally channel-led, and we're working very close to the channel at that point. So there will always be some lumpiness there. But I would expect over time, we're investing in the channel. We're seeing benefits from the channel investment. We love our channel partners, and it's becoming a very virtuous cycle. On the second question, does channel have any real difference in gross margin, I presume, versus direct? The answer is no. Costs to serve those customers is roughly the same. There's a little bit of a difference in sort of economics. But remember, while we may give a channel incentive or compensation with a channel partner to close a deal, they're also providing tremendous value-added services to our end customers that we benefit from the cost savings and it basically equalizes itself out.

Great. Thank you.

Your next question comes from the line of Mike Latimore with Northland Capital Markets. Your line is open.

Yes, thanks. Very nice quarter there. Maybe can you just talk a little bit about bookings flow throughout like the quarter and even in June and July. You obviously were kind of in a fluid environment. Just kind of curious how bookings have played out sort of April, May, June, July time frame? Has it been elevated throughout? Or has it been building throughout? Just some color there would be great.

We have been generally strong throughout. I think April was a little slower and then May and June definitely picked up. But I've been pleased overall by our bookings, and I think particularly the channel. I think one of the refrains you guys have always heard me say is that we're not getting enough at bats. We are now getting a lot about bats, and we thank the channel for that. And I think several of you have done channel checks which are showing that we are being definitely getting more than our share of interest from end-user customers. And so we hope that this trend continues. It seems like it is continuing to where, I think increasingly, we're getting more and more presence in the channel. And we continue to think that, that will give us more and more at bats, which has been, in the past, one of the weaknesses of the company.

And if I'll take the question on the pace of bookings, linearity throughout the quarter was nothing abnormal. I would say it was in the noise level of what we've seen over the last couple of years.

Great. And then on contact center, just the growth was phenomenal this quarter. Is that a result of kind of COVID-19 environment? Or is that just kind of sales cycles coming to close for you guys?

Actually, both. I mean one of the things that is pretty unique is as you know, we have all made the bet that we are all about the platform, which is unified communication and contact center. And until about one year, one and half years ago, we would always lead with unified communication and then drag in the contact center. That trend has started to reverse. And particularly now, because of our ability to rapidly deploy contact centers, we're seeing a lot of very big deals in contact centers. I think we made reference to, I think, the city of Manchester. Let's just say that there were others that were of similar size that also went with our contact center. LetsGetChecked deployed a contact center in 10 days. So I think part of the reason that you have seen a big surge in growth of contact center is the fact that, in essence, now people want a rapidly deployable contact center. And right after that, they pulled in UCaaS, but it is all about the platform.

Okay. Thank you.

Your next question comes from the line of Tim Horan with Oppenheimer. Your line is open.

Thanks, guys. Can you maybe just talk about the pace of bookings in July? It just seems like you're very, very well positioned as companies are putting the cloud communications. I'm just a little surprised it's not kind of building on itself at this point, given the initial shock of the economy.

I hear your question loud and clear, but I'm sorry, we can't comment on July quarter. I the best I can tell you is there's no surprises in July, everything is as expected, and we factored everything into our guidance. But this is an earnings call on the June quarter.

Great. And then maybe can you just talk about the VAR opportunity? Kind of where are you with developing that? And what the competition looks like out there for VARs at this point?

Yes. No, I'll take that one on. And actually, we continue to feel very good about it in the sense that two sets of VAR opportunities, as you know, the CloudFuel opportunity, which is the ScanSource, Poly umbrella, and we're seeing more and more Avaya resellers joining that. I think we talked about Allegiant Technology, which was the cloud partner of the year for Avaya in 2019, and they are basically standardized on this we're seeing we've already seen our first few deals on that close, and we are now starting to see the pipeline start to build quite considerably. Similarly in the U.K., as you know, we have a VAR relationship with Virgin Media, and they're they've got a lot of public sector exposure, and we're starting to see quite a bit of pipeline develop there as well. In addition, in the U.K., as you know, we have VAR relationships with Charterhouse, Computacenter as well as Softcat. And those also are continuing to expand. So we view VAR as the a very unique way to go after the installed base, where we're able to go to folks that are used to selling in a particular way and enable them to sell in the exact same way. And so far, so good.

Your next question comes from the line of Matt VanVliet with BTIG. Your line is open.

Yeah, hi. Thanks for taking my question. I guess looking at sort of the average deal size and revenue per customer, it started to tick down a little bit here in the Enterprise and even the Mid-Market this quarter. But we're hearing a lot more attach rate on bundled deals and overall X Series growing as a percentage of bookings mix, with the latter two sort of implying that you should see larger deal sizes. Maybe just help us reconcile kind of the strong growth in channel and enterprise overall with those metrics ticking down just a little bit overall?

Yes. I'll take this one. I mean I it's a fair question, but I think let's just kind of put it in context, right? Over the last four quarters, we've been between $40,000 $39,000 and $42,000 in the mid-market, and $166,000 to $174,000. Yes, it ticked down a little bit. I think it's a combination of we saw a very good deal volume, but customers are a little bit more cautious right now about placing very large orders through the system given the COVID environment. So we are seeing a little bit more of a land-and-expand type of philosophy instead of a larger order upfront. But in terms of deal velocity, we had a record number of active channel partners and all those other kinds of things. So your second part of your question was around channel. I think we're very positive there. I wouldn't read anything into the average revenue per customer segment. I think it was just a little bit of noise around the marketplace.

Yes. And then, I guess, specifically in the channel, our checks indicate that you guys are certainly present in a lot more deals, much like what you've been talking about. Curious though what I guess, from here, what's or how do you get the most mindshare or start winning mindshare of four channel partners to select you as their lead package instead of some of your competitors that maybe they've been working with longer, have a larger book of business overall?

So our channel checks indicate and I think several of you guys have done similar channel checks, and we've seen some consulting reports as well that X Series, when surveyed within the channel community, is viewed to have the best NPS and overall customer satisfaction and the most comprehensive offering of anybody else out there. And so what we have seen is success begets success. It's very simple. And so you're starting to see channel partners win bigger and bigger deals using our product. And you're seeing I mean, we talked about that 8-figure TCV deal. And so the more deals that they win with us and the more deals that allow them to make sure that it's differentiated with our X Series for some of the other activities that we have, such as Microsoft Teams, etc., we're seeing that they're offering more and more of our deals. Sam?

And maybe if I could add just one more thing. Look, every channel partner has economics at heart, right? And the fact that we offer a combo product with contact center allows a higher per-seat cost for a lot of their transactions. Contact center is becoming instrumental in these platform and UCaaS plus CCaaS deals. And the fact that we have them together, we offer functionality that leverages both sides of the house, is fantastic. And now that we've got true mindshare and sustained momentum in the channel, I think it's, as Vik said, just success begets success.

And I think to add to that, I think you saw the number of channel partners has increased quite materially for us. And so the number of active channel partners keeps growing. I think it was 813, I think, in Q1 a year ago. And right now, I think it's 1,092. So you're starting to see, again, a level of momentum pick up as people are look to get more and more success with our products in the marketplace.

Our next question from the line of Charlie Erlikh with Baird. Your line is open.

I'm hoping you can just talk about maybe the traffic levels on your network over the past couple of months and, I guess, March. Did traffic levels increase at all maybe in March and April? And I'm wondering if since then that kind of leveled off to normalized levels or they've maybe remained elevated.

So I'm going to break that into two pieces. I'm going to break it into the CPaaS side and the more traditional telephony side, contact center side. So what we saw in the telephony, contact center, UCaaS side was definitely a situation where it was a tale of two cities, healthcare, government, SLED, etc., all increased usage, all ramping really quickly, offset a little bit by lowered usage in retail, hospitality, those types of COVID-related. And I would say net, it was down flat to down slightly. Also on the CPaaS side, because of our presence, our strong presence in some of the ride-sharing, next-generation type of companies in Asia, we did see a decline in usage. A lot of that then has reversed itself as economies start opening back up, right? So starting in May, June, we then saw usage pick up particularly in retail and some of these other segments, back to levels that we saw in January, February. And we have seen solid trends in July, as I mentioned in the script, in our CPaaS business picking back up. We lost no customers in that space, just usage. As ride sharing and some of those things start to pick back up, we start to see that increase. So I really don't want to draw too big of a conclusion because it has been a tale of two cities depending on what the vertical was.

Your next question comes from the line of Andrew King with Colliers Securities. Your line is open.

Hi, guys. Thanks for taking my question. So just on the 15 CPaaS that you mentioned that you closed, how many of those were outside of the APAC region? And then also, given the fast ramp that you've had on the CloudFuel and the Virgin Media strategic partnerships, do you see any further investments given your initial expectations than what you had? If you can just talk on that, that would be great.

So the CPaaS part, we closed over a dozen, I think is the term I used in my earnings call, in the U.K. And we closed, I think, our first few in the U.S. So we're starting to see quite a bit of interest and very healthy interest in pipeline for CPaaS outside of Asia Pacific, which is exactly one of the reasons why we made this acquisition. I think the second part of the question I'm sorry. Could you repeat the second part of your question?

Yes. Can you just talk about your expectations on further investments in your strategic partnerships, given their fast ramps?

Just I guess the clarification is on the VAR side, I mean, we have a number of strategic partnerships across the company. So I'm just trying to get some clarity.

Yes. Can you focus on the Virgin Media partnership and then also the CloudFuel partnership?

Okay. Got it. So on the VAR side. Got it. So let's put it this way. On Virgin, well into the ramp, fully funded, we're moving forward, solid road map in place, deals already in the pipeline. Really impressed with Virgin as a partner. They are world-class. And it's been, so far, just fantastic working with that those guys and really like it a lot. Much the same for CloudFuel. So once again, fully funded, road map in place. As Vik mentioned, signing up VAR partners, deals in the pipeline, revenue produced there. That's just a matter of scaling it right now. We have everything in place, just really effectively on both sides of the house. The early innings are done and now is just scale it. And the deals are with both partners are there to scale the operations.

[Operator Instructions] Your next question comes from the line of George Sutton with Craig-Hallum. Your line is open.

Thank you. Vik, as we always try to be looking from the outside, trying to understand the breakdown of some of your spend, here's what I've concluded, and I wondered if you could correct me where I'm wrong. It looks like you're doing less search spend. It looks like you're doing less branding spend. It looks like you're ramping up a referral program. And it looks like you're spending quite a bit more on the channel, which is obviously working. Is that a fairly representative breakdown of the changes that you've been making on the marketing and spending side?

Vik, I'm going to take this one since I'm deep in the spending side. So at a macro level, I sort of roughly agree with what you're saying. I think what we're very focused on, on the areas that you just cited is optimization. So what we're really focused on is maximizing each dollar spend. You really focused on marketing with your question, so we're very focused right now on maximizing each dollar of marketing spend to both pipeline creation and closed one deals. And we've got very good analytics in place now, and we've got enough bats in place now to really drive that optimization process. It's why you saw a substantial improvement in sales and marketing spend quarter-on-quarter, and it's why you're seeing a substantial improvement in operating margin year-over-year, even as we grew R&D.

And George, I'll add to that one because I think you brought this up before. We made a very significant investment over the last year or so in our martech stack. And the whole purpose of that was in the past because we had a lack of brand recognition and our martech stack was pretty historic. We needed to really ramp that up, and we're starting to see that we can get a lot of customer acquisition costs down because people are coming on to our website, we're able to do a lot more interesting campaigns and tailor it to different people, drift, etc. So that's one aspect of it. And second, in addition to that, what we are seeing is the whole evolution of the Meetings product has done a great job of increasing our level of brand awareness. And then finally, what we're starting to see is e-commerce is also another one that we are kind of driving costs down into the system. We've now got three very credible on-ramps onto our product. As you know, we've got the unified communication and contact center; we've got CPaaS, which includes our Video Meetings, API; and we've got e-commerce. And then as I said, coupled with a brand-new martech stack, we're able to really start to drive much more efficiency into the system.

Great. That's helpful. One other thing, the accounting geek side of me needs to ask, Sam, you mentioned you're starting to build contracts in advance of contract delivery, can you just kind of explain the thought process behind that?

Yes. So I mean we're as we SaaS-sify the business even more, we're basically moving I think more commonly referred to as prepaid. But it's not really prepaid. But like most SaaS businesses, we're starting to build 12 months annual prepaid for our contracts. And I think that was something that we historically haven't done, and it's why we have to have a working capital balance. I'd very much like to get us to a pure SaaS company where we can have either a 0 or negative working capital balance and become more capital-efficient over time. I think it's doable. I think it's achievable. We've started the plans in place, and we're already seeing the results. It's why we expect that we don't need to raise any capital at all to become free cash flow positive and why we think the balance sheet is in a very good position right now.

Your next question comes from the line of Ryan Koontz of Rosenblatt Securities. Your line is open.

Hi. Thanks. I want to circle back to your contact center comments and the great metrics so far. How do you what's your kind of strategy as you approach this market? Are you more of a disruptor here from a pricing perspective, coming in against bigger legacy incumbents? Can you maybe talk about that a little bit? Appreciate it.

So I'm very proud of the work that the team has done in completely revamping our contact center over the last three, four years. But what we really are about is a platform business. So what we've got is one platform where we've got contact center, unified communication, video conferencing, chat, all with an underlying layer of analytics. So what that allows us to do is mix and match for different customers. Some customers lead with contact center, and what we're seeing is we can win some very big deals with contact center. Manchester City comes to mind. There were two very large state governments that basically went with our contact center in the U.S. Manchester City's sister city over in the U.K. that also competes with them on the U.K. Premier League, went with us on the contact center. So you're starting to see contact center become a way that we lead into the business, and then it brings in unified communication as a very differentiated asset into the mix. So on the whole, what we are able to do is we're able to provide the entire platform for a significant cost advantage. And Sam, you may want to jump in.

I just want to add maybe one more small thing. When you talk about legacy providers, I have a tendency to think of the really high-end guys, and that's not where we're focused. We're not focused at the 5,000, 10,000 contact center agent market. There's a very large mid-market opportunity where they want someone else running the infrastructure. They want someone else providing all the features and functionality. And especially when we can spread that across CPaaS and UCaaS, it becomes a very compelling value proposition for that mid-market segment.

And there are no further questions at this time. Ladies and gentlemen this concludes today’s conference call. Thank you for participating. You may now disconnect.