Good day. Welcome to the Extreme Networks' First Quarter Fiscal Year 2022 Financial Results Call. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Stanley Kovler, Vice President of Corporate Strategy and Investor Relations. Please go ahead.

Thank you, Norma, and welcome, everyone, to the Extreme Networks' First Quarter 2022 Earnings Conference Call. I'm Stan Kovler, Vice President of Corporate Strategy and Investor Relations. With me today are Extreme Networks' President and CEO, Ed Meyercord; and CFO, Rémi Thomas. We just distributed a press release and filed an 8-K detailing Extreme Networks' financial results for the quarter. For your convenience, a copy of the press release, which includes our GAAP to non-GAAP reconciliations is available in the Investor Relations section of our website at extremenetworks.com. I would like to remind you that during today's call, our discussion may include forward-looking statements about Extreme's future business, financial and operational results, growth expectations and strategies, the impact of the COVID pandemic and challenges in our supply chain as they relate to chip shortages and otherwise. We caution you not to put undue reliance on these forward-looking statements as they involve risks and uncertainties that can cause actual results to differ materially from those anticipated by these statements as described in our risk factors in our 10-K report for the period ending June 30, 2021, filed with the SEC, and any additional risk factors in subsequent 10-Q filings. Any forward-looking statements made on this call reflect our analysis as of today, and we have no plans or duty to update them, except as required by law. Now I will turn the call over to Extreme's President and CEO, Ed Meyercord.

Thank you, Stan, and thank you all for joining us this morning. Q1 was characterized by unprecedented bookings growth and continued double-digit year-over-year revenue growth. Q1 bookings accelerated to 45% year-over-year growth, even higher than the 36% achieved in Q4. This continued strength in demand was evidenced by record 43 customers that booked over $1 million in business with Extreme in Q1, up from 32 in Q4, and our backlog doubled to over $200 million. This marks the third consecutive quarter of double-digit bookings and revenue growth, including the third consecutive quarter of double-digit product revenue growth. Given the demand trends at hand and our backlog, which we expect to grow once again in Q2, we now expect double-digit organic revenue growth in fiscal '22. We further improved our competitive position and according to industry research firm 650 Group, gained 1 point of share in each of the prior 2 quarters in the campus enterprise networking market. In cloud-managed networking, the fastest-growing segment of our industry, we strengthened our competitive position and our 13% market share is larger than the #3 and #4 vendor share combined. Customers are accelerating their investments in digital transformation related to return to work environments that are more flexible and hybrid in nature, supporting our Infinite Enterprise vision. The networking industry is experiencing the highest growth in years, and our growth is accelerated by the fact that we are taking share in this environment. The combination of our leading cloud management solution, universal wired and wireless platforms, our automated campus fabric and simple licensing model provides customers with unparalleled value for their networking needs. We are focused on supporting our customers' increasingly distributed networks in what we call the Infinite Enterprise, where cloud becomes the connective tissue. Given the heightened awareness of our brand, the…

[Operator Instructions] Our first question comes from Alex Henderson with Needham.

Certainly, an outstanding quarter. I was wondering if you could give us a little bit more detail on what you're seeing in terms of your price hikes, the impact on product sales associated with those price hikes? And with, I think, both Cisco and Arista and probably HPL on the positive of what they've done, increasing prices, can you talk about what the competitive price hikes look like? And then on the supply chain side of it, I get with the idea that it's going to peak here in the current period. Are you expecting that you're going to work down the backlog in the guide or are you expecting that the backlog will stay at current levels through the end of the fiscal year in the guide of 10% growth?

This is Ed. And why don't I jump in upfront, Rémi, and I'll let you come in. So as far as the pricing environment, yes, we've seen competitors throughout the industry raising price. What you've seen is a range of about -- on average about 10% to 15%, and we're right in line with what we've done. We took action early and our price increase went into effect on October 1. And so -- but because of the backlog and the way we account, you won't see the benefit of that price increase for us until the second half of our fiscal in Q3 and Q4. As we mentioned in the comments, as Rémi mentioned, this quarter, we are taking up our revenue guide but we expect to build backlog. A lot of that has to do with the strength of demand. We are seeing bookings levels that we haven't seen previously. As I mentioned earlier, we're seeing more and more opportunities, and we're converting on those opportunities, which is driving higher-than-expected demand and bookings growth. And so that is contributing, along with supply chain constraints, to us building backlog again in Q2. Rémi, do you want to add to that? Rémi Thomas: The only thing I would add, Ed, is in the past, when we had price increase in November of 2018 related to the tariff, we saw some of that being discounted because we still wanted to maintain our competitive position, given that this is something that we see at our competitors as well and we basically make sure there's a strong discipline so far, we've seen basically our discounting being held up. And actually, in Q1, we saw an actual reduction in our discounting behavior in the field. So the price hikes are holding up and they're translating to higher ASP and hopefully, higher revenue number once we're able to work through our existing backlog.

So if I could, so just to be clear, you said you're going to increase backlog. I think you made that comment relative to the December quarter. Are you saying you're expecting to increase backlog again in March and June? Or are you expecting the backlog to hold at the December level through the end of the year or work it down?

Alex, yes, we're expecting to work it down starting in the March quarter.

I'm a little confused by the guide then because if the price increase is 10% to 15%, it's kicking in, in the March and June quarter, and we hold the services line fairly flat, that would imply only 6% to 8% type growth in product sales in the back half of the year to get to it, with 15% in the first 2 quarters. So double digits is a nice number. It's a nice increase, but it doesn't seem to catch for both. I worked down in backlog and a price hike.

Yes. I -- we don't expect to work down all of the backlog, but we expect to start chipping away at the backlog, Alex. I think that's how I would describe it. And then when we say double digits, I don't think -- the double digits is a pretty big range. So I don't think we're thinking 10%. I think we're definitely thinking higher than that in terms of the back half of the year. Yes, I would say over 10% growth, yes.

Our next question comes from Eric Martinuzzi with Lake Street.

So just to be clear, that goes from 10% up to 99%, Ed, is that the case for the double-digit?

Very good, very good.

Okay. I'll go to the lower end of that. Okay. So I wanted to dive down, drill in a little bit deeper. You talked about an increase in your funnel conversion rate. Is that the same thing as an improvement in your win rate?

Yes. What -- there are a few things that are driving it. We talked about the overall up-leveling of Extreme brand as more and more people are turning to cloud. Extreme is showing up on the radar as a cloud leader with #2 market share and one of the fastest-growing players in cloud. So as people are considering cloud networking alternatives, they're looking to Extreme. So we're getting more looks. And as I said before, we're getting more at bats. And then what's happening is that we are seeing a higher conversion rate on those opportunities. So we're winning more in competitive situations for larger projects, and you can see that with the deals over $1 million that we commented on. The other thing that's happening is that the way we're structured to go-to-market is that we have a partner program for our channel partners that has gained a lot of momentum. And we provided a lot more focus on our partners and supporting partners with automation tools, making it easier for partners to position Extreme. And then once again, as partners are hearing about cloud, then partners are turning to Extreme and then we're getting greater wallet share from partners. Given the strength of our cloud offering, the fact that we are end-to-end, the fact that we have this unique cloud-native architecture, which is different from the largest player in the market, that gives us a lot of advantage. And then as people are looking more and more to data as the new currency in cloud, we have unique capabilities as it relates to providing and retaining data for key insights. And so there's real technology differentiation in here as well. So both in competitive projects where Extreme is being invited and we're winning more. And then also in the channel where the channel is waking up and realizing, hey, this is a great time to position Extreme and Extreme is winning here. I'm going to make the bet with Extreme.

Okay. I wanted to better understand the second quarter guidance with regard to the impact from Ipanema. But before we get to that, was there -- what was the revenue impact in the first quarter from Ipanema? I know you closed that very close to the end of Q1. But what was the revenue impact?

Rémi, you want to pick that up? Rémi Thomas: Yes, it was immaterial, Eric. Call it a few hundred thousand dollars. We only consolidated 2 weeks of revenue, and then we have a deferred revenue haircut that was applied to that.

Okay. And then the guidance for Q2, you're talking about a revenue range of $265 million to $280 million. How much of that is Ipanema? And then how is it being treated? Is it for the -- do we have a purchase accounting adjustment here? Or is that a non-GAAP revenue guide? Rémi Thomas: We do, unfortunately. So we expect the contribution of pre-deferred revenue haircut to be slightly less than $5 million. But by the time you apply the deferred revenue haircut, you're looking at a couple of million.

Got you. Okay. Congrats on the quarter and the outlook.

Our next question comes from Dave Kang of B. Riley.

Nice quarter. I guess the first question is regarding -- on the supply chain constraints. How much of your revenue in fiscal first quarter was impacted by supply chain or component shortages? And how much are you baking into your fiscal second quarter guide?

Dave, Rémi, I'll start off. Dave, I think that the telltale sign is that we built $100 million of incremental backlog in the quarter. So moving from just over $100 million to just over $200 million, I think, shows the magnitude of, A, the booking strength on the demand side of the equation, then also the constraints on the supply chain side. So with that kind of backlog, again, going into this quarter, we're seeing the strength of demand continue. So that's driving higher-than-expected bookings. And then we remain backlog constrained. What I will -- supply chain constraint. What I will say is that, it was a year ago that our key chipset vendor stretched lead times to a year. And so it created a window for us where we had to work very aggressively and tactically with suppliers and specifically with Broadcom to line up secures ship dates for this quarter specifically. Rémi mentioned that this is the peak in terms of expedite fees and what we see as higher shipping expenses, etc. And we believe that to be the case. So we believe that with the revenue guidance we have, that we are still building backlog but then we see that easing as we go into the March and June quarters. As it relates to March and June, at this point, we're back to the annual ordering cycle. This is where we were, where we placed orders a year ago, and we have much better visibility to the delivery from the Broadcom perspective. Broadcom then becomes for us the important anchor in driving the supply chain. And now, we're actually working with secondary and tertiary vendors and supplying other components and parts working with our ODMs to bring in that supply to help in the production line. Rémi, any other specifics? Anything you want to add? Rémi Thomas: No, no. I think you highlighted the key point, which is that backlog increased $100 million. Obviously, we always have product constraint and customer constraint in every quarter. So under even normal circumstance, we'd never be able to ship that $100 million. So that's the order of magnitude of the impact of supply chain constraints on our revenue.

Got it. Regarding you calling fiscal second quarter bottom in terms of the supply chain impact. Have -- should lead times stop stretching and prices stop raising -- rising? Is that why you're thinking fiscal second quarter to be the bottom? And then regarding fiscal second half, should we -- with you guys raising prices start to kick in, should we expect gross margin to be back to 60% level? How should we think about second half gross margin?

Yes. Dave, so we -- yes, we do expect to snap back on the gross margin side in the second half of the year. And it's the confluence of what you mentioned, supply chain. This is the quarter where all of our products are being expedited, and we're paying very high fees to expedite supplies. The other thing is we're going right into the holiday season and shipping has been constrained. Everything is being shipped by air. We expect that to start to loosen and to have more competitive options as we go through the holiday season into March. So on the cost side of the equation, we'll have the benefit of reduced expedite fees as well as reduced shipping and transportation fees that kick in, in March and carry through into June. And then the same thing is true on the pricing side of the equation. With pricing, we have to run through backlog and then we start to realize the benefit of the price increase, we start realizing that price increase benefit in March. So you have the effect of higher pricing and you have the effect of lower cost that start coming into play in that March quarter. And then we'll have the full effect of that as we move through to June and then September quarters.

Our next question comes from Christian Schwab with Craig-Hallum Group.

Congrats on the solid execution in the quarter. Can you give us an update -- maybe I missed it, but can you give us an update on where you stood from product availability and backlog outlook for Wi-Fi 6 and your current thoughts on the migration to it?

Yes. I think -- I mean, Christian, thank you. And yes, the Wi-Fi 6 becomes, in those chipsets are part of our constraint. One of the things that I would say that we have done and we get credit from our distributors for doing it well is setting very realistic expectations for customers and for orders. Our supply chain teams work very close and tactically with our field, specifically on opportunities. And so depending on what the opportunity is, we will prioritize a large, important strategic account. The reception to Wi-Fi 6, we see Wi-Fi 6 as being a game changer in terms of what it does, in terms of opening up spectrum and providing new capabilities. If you ask our Wi-Fi product team and PLM team, they'll say in the last 10 to 15 years, that this is truly a cycle that's a game-changing differentiator. And as we mentioned, we were first to market there. So we think demand will pick up very quickly. And then Wi-Fi 6 is constrained, I would say, similar to the rest of our portfolio. But we will expect to see that ramp up significantly in the second half of the year.

Our next question comes from the line of Paul Silverstein with Cowen.

Ed and Rémi, I apologize if I missed it, but did you all say anything about the new wireless products contribution and what you're expecting for the ramp, giving us an uptick? Rémi Thomas: The contribution in terms of bookings has been strong, Paul. However, wireless is somewhat more constrained than wired. So the contribution to our revenue this quarter was down in the low to mid-20s as opposed to the high 20s in past quarters. As far as bookings are concerned, wireless and wired are on the same growth trajectory of -- in excess of 50%, as I highlighted in my -- year-over-year, in my introductory comments.

Rémi, shame on me, I think I used poor language. I was actually referring to the new platforms, one of which you've got a relationship with, one of the big U.S. carriers and the other one on, what you're selling into an OEM.

You're talking about service provider.

Yes, thank you. Apologies, I don't know where my mind is. Rémi Thomas: No problem at all. So I would say that actually, this -- this was one of -- this was the stronger growth. I mean, there's one vertical that did better in terms of the year-over-year growth, and that would be our sports and entertainment, but that was from a favorable comparison basis because it was minimal a year ago. Service provider business was up 68% on a year-over-year basis in terms of bookings and accounted for slightly more than -- around 6% of total bookings this quarter. So strong contribution, which was driven by the combination of the 2 things you mentioned, Paul, which is the relationship we have with a large U.S. service provider and a large telco equipment maker based in Europe.

And Rémi, if I could add. Paul, just to provide a little bit more color. So the deployment on the Packet Broker side, which is our visibility manager, that has been largely in test mode. And that is -- that deployment schedule begins in earnest in the first calendar quarter, and then we expect that to ramp throughout calendar '22. And then as it relates to our OEM partner and the growth of our 5G solution. What's interesting, a few things have happened there. There were 2 different alternatives for telecom service providers that they support. They had an NFVI solution, and then they had a cloud-native infrastructure solution. Really 2 alternatives for telecom service providers to choose from. In the case of the cloud-native solution, we are the single sole source vendor. And what has happened during the quarter is that they have now shifted, so all of -- they moved away from NFVI as a competitive solution, and everyone is embracing that cloud-native infrastructure solution, which bodes well for us considering that's 100% Extreme. So what we're seeing now is we've had good news, you'll hear more coming from us, but some very large carriers are starting to begin deployments there. And we're expecting, again, this to ramp as well as we've called out in calendar '22. So there's the shift to cloud-native and really, that's where we shine in terms of our fabric automation and then what we're able to do on the infrastructure services side for them.

Rémi, if I was more alert, perhaps I could do the math myself, but I'm hoping you'll make it easy for me. And also so I don't make a mistake. What was it -- what was service provider as a percentage of bookings in the preceding quarter? You said it was 6% this quarter? What was it the quarter before? Rémi Thomas: It was 8% in Q4. The [ business now and the EMI ] business. And it was 5% a year ago.

5% a year ago. Perfect. Guys, I trust the answer is nothing, but let me ask the question, which is, other than supply chain, which doesn't appear to be all that impacted as impacted or as perhaps one would have thought. What are the risks? What do you worry about? What could go wrong over the next 12 months from here?

Yes. Paul, I think, the big one for us really is supply chain. This is where, fortunately, we have a strategic relationship with Broadcom. They work with us, and they have been very, very supportive to us. And as I mentioned earlier, we're now engaging with Tier 2 and Tier 3 suppliers who normally, we wouldn't engage with. So it's a very tactical exercise with us working supply and supply chain. And I would say for us, that's number one. The second thing for us is that we're rolling out new software services. So we mentioned the growth in what is our pilot license X IQ Pilot. We are moving quickly and in the first half of fiscal '22, we're going to be rolling out our first Extreme branded SD-WAN and SD branch solutions. And we're really excited about that, but we are standing up a brand-new back office for SaaS. We are standing up a customer success and lifecycle management platform. These things are new to manage the full customer experience. And I would say, this is where there's a huge amount of investment and focus at Extreme because we see an opportunity to drive software subscription revenue from services. And the first service is this SD-WAN service that we'll be rolling out. We're a bit ahead of schedule in terms of how we're progressing from the rollout. We're starting in Europe. We're turning up RDCs in the U.S. and then we'll be launching globally in the first half of calendar '22, Extreme branded SD-WAN capabilities that I talked about. I would say right now, this is a new growth factor for us. We are excited about it, and there's a lot of energy. So there's a lot of attention inside Extreme being focused on software and then adding new software licenses on top of our base core XIQ Pilot licenses. And so this is where -- I would say, these are things that keep us up at night because we're really focused and excited about driving this new growth opportunity and driving increased recurring revenue at Extreme.

Ed, would you all mind if I squeeze in 2 more? Apologies to you and others on the call. But I've got 2 other quick questions I was hoping to ask.

Yes, I think Stan's letting you roll.

I greatly appreciate it, guys. First off, and again, I apologize if you already said this, but how much of the incremental growth is a function of new customer additions? How much is a function of deeper penetration of the existing customer base?

Yes. It's a combination of both. What I would say is this quarter, we have seen an uptick in what we would call new customer logos. And I'd say that's being driven by the channel for one. We are attracting new channel partners, and we are, I think, getting more wallet share with people in the channel realizing I can position Extreme and win with Extreme here. So I think that's one of the big drivers of new logos for us. And then in competitive situations, as I mentioned before, the brand awareness of Extreme has gone up. And so people are more aware because it's known in the industry that we're clearly the #2 in cloud networking. That's a secular trend in our industry, where more and more people are going to be moving. As you look at networking and the confluence of networking and cloud and then more security and more services being delivered at the edge of the network, all of a sudden Extreme is in a leadership position and a strong place. So we are getting more inquiry. And so it's a combination of, I think, the brand recognition, our stronger competitive position in the industry, specifically with cloud as one and then what's happening in the channel, which is driving higher than normal new logo activity at Extreme.

All right. Last one from me. Rémi, I appreciate that the price increases are obviously going to help as they roll your peers. But I'm curious, what -- given that -- the commentary hasn't been uniform, but quite a number of your peers have referenced deteriorating supply chain environment with both the breadth of products, inputs, including some of it is expanding and the degree of price hikes and expedite fees and freight costs having stepped up dramatically. I'm curious what underlies your belief that this quarter will be the peak and why you're not also seeing things get worse? Rémi Thomas: Because, Paul, we operate very closely to large suppliers, namely, Broadcom, and we get good visibility in terms of the POs that we place with them, their commitment dates and the cost of the expedite fees associated with these Pos. And so when we look at what's expected for Q2 and then Q3 and Q4, we do anticipate that we'll see a decline. And at the same time, we're going to get more of the benefit from the price actions that we just took. As Ed mentioned earlier, for the backlog, which was booked at the prior pricing to wash through. And once that's the case, you're basically selling in at the new price, and you'll see the full benefit of that in Q3 and Q4. There's going to be some impact in Q2, but not big enough to offset the impact of expedite fees and freight costs, whereas as of Q3 gets better and Q4 gets even better. So it's really the timing of the actions we're taking and the full impact versus the timing of those expedite fees that we're paying. And actually, the peak of the expedite fees is expected to be in Q2.

Our next follow-up is from Alex Henderson with Needham.

I actually wanted to talk a little bit about something that Paul just brought up but in a slightly different context. Clearly, with the price hike kicking in on October 1, customers are incented to buy before the price side kicks in. So I guess part of the question is, to what extent do you think that, that's happened? And second, are you expecting to build a similar amount of backlog in the December quarter, given that's the peak of the supply constraints as you did this quarter? And then I've got a follow-up on that relative to duration of the orders. Is there any sense of how much of this is -- just extending the time line that the orders are stretching out across?

Sure, Alex. Well, we watch this very closely. And we've got -- it's interesting because we have an analytics tool. It's called Clari, it sits on top of Salesforce, and we have incredible analytics today around the pipeline and around funnels. So we can see opportunities to get created in quarter, opportunities to get that slip and move out. And we are all over this every week. So we've got very good visibility to the opportunities as they come in. There's no doubt that when we raise price, that there are going to be people that would pull it in order to take advantage of a lower price. That's for sure. And in this environment, maybe demand would come earlier than usual because people are aware of what's going on with supply chain. And so they would see -- they would want to establish full position, if you will, to try to get in front. All that said, we have done a fair amount of price increases. If you look at tariffs along the way, etc. Yes, I would say, as far as that's concerned, we would say kind of normal behavior. The one thing that we look at is the health of the next quarter. Anytime if business is getting pulled in, you worry about, is there going to be a dip in bookings in the following subsequent quarter? And what I can say is that our funnel and the funnel of opportunities remains very strong for the December quarter. And that's where -- that's what gives us the confidence. We don't have an exact measurement of what percentage got pulled in. That said, we look to the next quarter of December at the opportunities and also what our bottoms-up field teams are calling at the AE level, at the RD level, the BP level, etc. And the calls remain very firm, and the funnel is there. So from our perspective, we don't see this as kind of a one-and-done phenomenon this quarter.

So the question of do you think that you will also continue to build backlog at a similar rate during the fourth quarter, calendar fiscal second quarter?

I don't think we expect to build backlog by $100 million. And I would say that, that was unique to this quarter. But we do expect to build backlog. We will be net-net higher -- we'll net-net have a book-to-bill over 1.

And any comment about the duration of the orders that are going into the backlog? As an example, Juniper talked about $1 billion increase in backlog and I don't remember the percentage, but I think it was a 30% increase in backlog, but only 15% increase in backlog, if adjusted for duration. Are you seeing a similar situation where you're seeing orders further into the future, and therefore, there's a duration stretch?

Yes. We measure customer constraints as well as product constraints. And we don't see -- we do not see a meaningful change in our customer constraint. In other words, the customer is placing an order for future delivery outside of the quarter. So our duration is a lot shorter, maybe than Juniper's or other customers. And so we would rarely see an order that's out there longer than 6 months.

Okay. One last question, and I'll leave the floor. The top 4 verticals, the SP, government, health care, education, I was surprised that your focus is much more around enterprise campus now. I would have thought the enterprise would have been stronger. Can you talk a little bit about enterprise as an aggregate as opposed to the service provider, government and education market?

Well, when we say government, we are referring to enterprise, Alex. So we -- that's -- government customers are campus enterprise customers for us. And so that was the big one. There, we're not talking about -- we're not zeroing in on federal government, for example.

Can you just talk about the enterprise environment, excluding government, service provider and health care and in education? The aggregate, was that consistent with the increase?

I mean, yes. And that's what we're seeing, and it's consistent with what we're seeing as enterprise customers are -- everybody continues to think about the -- what is the new environment. And people are -- enterprise customers are looking to support a more distributed environment where they can support a more flexible workforce. I think it's fair to say people have learned from COVID, people -- our customers realized that they could be more effective than they thought in an environment where workers are remote. And more and more of our customers are looking at supporting end users in a hybrid fashion, wherever they are, if they're at home or if they're in the office, wherever they are. And that's -- it's how we talk about the Infinite Enterprise because the edge of the network is moving away from the corporate office but they still want to deliver a consistent user experience wherever the user is. And that's the significance of the Ipanema acquisition for us in terms of being able to deliver cloud-based application performance management, routing, security, etc., etc. And so that's what's happening on the infrastructure side. We've seen strong investment and we've seen this acceleration of digital transformation that you hear about all the time as people are considering the new normal here. Rémi Thomas: And if I can just add. Sorry, Alex. We typically are not a huge player in the carpeted enterprise, if that's what you're alluding to, Alex, but it's captured in 2 segments, enterprise outside of our verticals like health care, retail, etc. It's captured in manufacturing, which is up high single digits year-over-year and accounts for slightly less than 10% of revenue and what we call other industry verticals, and that was up 33% year-over-year and represented about 18% of total bookings. So to Ed's point, it was a healthy trend. But as you know, that's not necessarily our main focus when it comes to verticals.

Well, yes. But on the other side of that coin, that's where you have opportunity to penetrate, that's great. That's what I was looking for.

I'm currently showing no further questions in the queue at this time. I'd like to hand the conference back over to Mr. Ed Meyercord for any closing comments.

Thank you, Norma, and we're up on the hour. So thank you to everybody who could join us on the call today. We want to shout out to Extreme employees for an incredible effort during a difficult quarter, for delivering excellent results. We also want to shout out to our channel partners and our customers out there. We wish everyone good health in this environment. We will remind everyone that we will be attending the Needham, Credit Suisse and Cowen conferences this upcoming quarter, and we hope to see you there. Thanks, everybody, and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.