Ichor Holdings, Ltd. (ICHR) Q1 2021 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to Ichor's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I would now like to introduce your host for today's conference, Claire McAdams, Investor Relations for Ichor. Please go ahead.

Thank you, operator. Good afternoon and thank you for joining today's First Quarter 2021 Conference Call. As you read our earnings press release and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in our earnings press release, those described in our Annual Report on Form 10-K for fiscal year 2020, and those described in subsequent filings with the SEC. You should consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, we will be providing certain non-GAAP financial measures during this conference call. Our earnings press release and the financial supplement posted to our IR website each provide a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures. On the call with me today are Jeff Andreson, our CEO; and Larry Sparks, our CFO. Jeff will begin with an update on our business and a review of our results and outlook. And then, Larry, will provide additional details of our first quarter results and second quarter guidance. After the prepared remarks, we'll open the line for questions. I'll now turn over the call to Jeff Andreson. Jeff?

Thank you, Claire, and welcome to our Q1 Earnings Call. I hope that all of you and your families are staying healthy and safe. Today, we reported a record revenue quarter for Ichor, another strong quarter of financial results with Q1 revenues and earnings both at the high end of guidance. Revenues of $265 million were up 8% from Q4 and marked our eighth straight quarter of sequential revenue growth. Gross margin increased 30 basis points, operating margin increased 20 basis points, and net income grew by 10% compared to Q4. Our strong operational leverage of our business model and continued improvements in gross margin are evident in our year-over-year EPS growth of 46%. Compared to the same period a year ago, we have increased net income by $10 million on revenue on a revenue increase of $45 million, a net flow through to earnings of 22%. We also had another strong cash flow quarter with free cash flow of $20 million. So far in 2021, the underlying demand for wafer fab equipment or WFE has continued to strengthen. Over the past several weeks, the major players in foundry and logic have provided multi-year visibility into their heightened levels of investments, which will be put in place to support unprecedented levels of demand for semiconductors. At the same time, healthy market conditions in memory sector have led to further improvements in memory capital investments as we progress through the year. As a result, expectations of WFE growth in 2021 have increased steadily since our last earnings call, from about 15% in early February to current expectations of growth in the 25% to 30% range. The strengthening demand environment to date in 2021 is evident in our Q1 results and Q2 guidance, with upticks in demand witnessed among each of our key customers and among each of our business units. Our Q2 revenue guidance is a range of $270 million to $300 million or another 8% in sequential revenue growth at the midpoint. Our visibility remains very good, extending about six months or so, which along with the outlook provided by our customers, provides us with confidence that the second half of 2021 will be stronger than the first half. With widespread expectations of another growth year for WFE in 2022, we appear to be in the second year of a multi-year growth cycle, propelled by the convergence of multiple technology drivers, such as 5G, IoT, AI, and autonomous vehicles, as well as secular growth related to the progression of work from home and high performance computing. Semiconductor industry revenues are breaking out from the historical share of the global electronics market for the first time in 15 years. More recently, domestic semiconductor supply self-sufficiency is adding another layer of investment to these secular drivers. Together, all of these drivers are resulting in increased capital intensity for the semiconductor industry and higher levels of investment in fab technology and capacity. In other words, being an essential supplier to the semiconductor wafer fab equipment market and having a nearly 100% focus on the sometimes cyclical but strong growth industry is a great place to be. With that as a backdrop of our overall outlook for industry growth, I'll now turn to our key strategies to continue to outperform industry growth and in turn deliver strong operating leverage and cash flows. I'll begin with our strategic focus on some of the strongest markets within WFE. The three key markets for our products are etch, deposition, and EUV lithography, all of which are outpacing overall industry growth due to multiple technology drivers. In NAND, the industry is investing in the technology that will take them from 96 layers to 128 layers and beyond that to 256-layer devices. At each step in the process, there is more etch and deposition. You may have heard on a recent earnings call that it's mostly etch and deposition equipment that's required to continue to fill these taller stacks. Similarly, with DRAM, as we go from 1Y to the 1Z node and then to 1-alpha and 1-beta, there is more of a need for etch and deposition, and we are the leading provider fluid delivery subsystems into these markets. In logic, transitions to 5 nanometers and 3 nanometers require more complex geometries and more precise control of fluid delivery. There has also been an increase in the number of gases used for technology advancements in both logic, as well as DRAM over the past several years. In each case, as these geometries become more complex, this drives the need for faster etch rates, better material selectivity, and more precise control of the processes. The key takeaway as it relates to Ichor is that these advanced technology nodes are requiring more etch and deposition intensity, and especially in the case of logic and DRAM, more fluid delivery content per system. Our other key market is EUV lithography, which is growing at rates well exceeding overall industry growth. Annual system shipments are expected to continue to increase at strong double-digit growth rates for the foreseeable future and as such we are witnessing steady increases in our EUV gas delivery sales run rate each year. In total, each of these key technology transitions across all three device types is driving increased opportunity for all three of our key markets. This is a key driver for our revenue growth outperforming the overall industry and our increased share of WFE from 0.9% five years ago to 1.5% in 2020, or more than a 70% increase in our share of industry spend. Our increasing share of WFEs is also due to our continued market share gains and the complementary and accretive acquisition that further enable the expansion of our product offerings and global customer footprint. Before I update you on the progress we are making in our next generation gas panel product development program and our other product and regional growth initiatives, I'd like to update you on our capacity plans. As I noted earlier, we are in the second year of a multi-year growth cycle, with leading industry OEMs and analysts forecasting another year of growth in 2022. Given this outlook and to support the success in our new product initiatives, we are already or are actively adding capacity in our gas panel integration, machining and weldment businesses. On our last call, we highlighted that our CapEx expenditures this year would be above our typical range of 1% to 2% of revenues and be in the range of 2% to 3% for 2021. These investments in capacity will enable Ichor to achieve quarterly revenue run rates in excess of $400 million. Now, I'll update you on the progress the team has made on our strategy to leverage our engineering capabilities and IP portfolio to develop new products that will result in longer-term expansion of our share of our served markets, as well as drive the operating model towards increased levels of profitability. We have made very good progress over the last quarter with our proprietary next-generation gas delivery solution and we'll ship our first beta unit in late May. In the third quarter, we expect to ship a beta unit liquid delivery module to a North American customer. We expect the qualification period to extend through this year with first revenues occurring in 2022. Additionally, we're in the final stages of completing two precision machining part qualifications in the second quarter and expect to see first revenues in the third quarter. These qualifications will increase both our proprietary content on a gas panel and will be margin accretive. As I noted earlier, we are in the final stages of increasing capacity in both our Minnesota and Mexico machining operations to support the revenue associated with these two qualifications. In our geographic expansion initiatives, we continue to have active dialog with several of the major OEMs in Asia, but the COVID-related impacts continue to limit travel and customer visits, resulting in delay in the qualification of our liquid delivery systems at a Korean customer. But this is still a very large opportunity for us, and as we move past these limitations, we will be putting on a full-court press. In summary, the team did a phenomenal job ramping the business once again in Q1 to address the historic levels of demand from our customers and delivered a record revenue quarter for Ichor. Our second quarter revenue guidance indicates our expectation for continued sequential growth above Q1 and year-over-year growth of 22% to 35% versus Q2 of last year. At the midpoint of Q2 guidance, the first half 2021 is expected to grow 24% from the first half of 2020 and be up 16% from the very strong second half of 2020. We are also driving continued incremental improvements in gross margin and operating margin as we are steadfastly focused on making meaningful progress towards our target model and a continued very healthy business environment, which brings us to Larry's discussion of our financial performance and further details on our outlook. Larry?

Thanks, Jeff. First, I would like to remind you that the P&L metrics discussed today are non-GAAP measures unless I identify the measure as GAAP based. These measures exclude the impact of share-based compensation expense, amortization of acquired intangible assets, nonrecurring charges, and discrete tax items and adjustments. There is a very helpful schedule summarizing our GAAP and non-GAAP financial results, including the individual line items for non-GAAP operating expenses, such as R&D and SG&A, in the Investors section of our website for reference during this conference call. First quarter revenues were a record $265 million, up 8% from Q4 and up 20% from Q1 of 2020. Business conditions continued to strengthen during the quarter and our operations teams did an excellent job responding to strong customer demand in a challenging operating environment. As a result, we came in at the high end of revenue guidance, achieved a new record revenue quarter, and delivered our eighth straight quarter of sequential revenue growth. We also achieved sequential increases in gross margin, operating margin, and net income. Gross margin for the quarter came in better than forecast at 16.1%, up 30 basis points from Q4 and up 230 basis points from Q1 of 2020. COVID-related costs continue to impact gross margin by about 50 basis points. COVID impacts on gross margin are mostly related to higher costs ensuring the health and safety of our global workforce, and higher freight costs. While these impacts are expected to persist for the foreseeable future, we continue to drive improvements to our gross margins and expect further incremental increases as we progress through 2021. Our key strategies to drive gross margin higher are through incremental cost reduction programs, growing our share within our higher-margin components businesses, and increasing our content of proprietary IP within our products. Operating expenses came in a bit lower than forecast at $15.5 million, which was an increase of 9% from Q4. The sequential increase in operating expenses were primarily due to seasonal increases in payroll taxes, audit and legal costs, as well as an increase in R&D project spending. We expect our quarterly OpEx run rate to increase to the $16 million range for the remainder of 2021, given the incremental audit fees and associated costs related to becoming SOX compliant this year, the additional expenses associated with our new ERP system, and the higher level of R&D spending to support new product development programs. Operating margin of 10.2% improved 20 basis points over Q4 and 300 basis points over Q1 of 2020. This strong flow through and operating leverage is evident in our 46% earnings per share growth over the year-ago period on 20% percent revenue growth, even after accounting for the additional shares from our December stock offering. Interest expense for the quarter declined below $2 million, given the paydown of $30 million of our revolving credit facility. Our tax rate was 13% and our planning rate over the next couple of years continues to be in the range of 11% to 13%, with 2021 expected to be at the high end of that range. With revenues near the high end of guidance and gross margin and operating expenses favorable to forecast, earnings of $0.76 per share were at the high end of the range. Shares outstanding of $28.7 million were above forecast, given the dilutive impact of a higher average stock price in the quarter. Now, I will turn to the balance sheet. We ended the quarter with cash of $243 million, a decrease of $10 million from last quarter. We generated $20 million in free cash flow and used $30 million to pay down our revolver. Total debt declined to $170 million. Our strong cash flows in Q1 were helped by continued favorable days sales outstanding of 37 days, as well as higher inventory turns of 6.4 compared to 6.1 last quarter. In total, our net cash position of $73 million increased by another $22 million in Q1, and compared to Q1 of 2020, we have increased our net cash position by $215 million through equity issuance, strong free cash flows, and debt reduction. We expect continued free cash flow generation in a continued healthy demand environment in 2021. As Jeff mentioned, we are stepping up capacity investments this year to support the strong demand forecast for the next couple of years and expect CapEx to be in the range of 2% to 3% of revenues for 2021. Now, I will turn to our second quarter guidance. With revenue guidance in the range of $270 million to $300 million, our earnings guidance of $0.77 to $0.93 per share reflects an expected gross margin increase of around 20 basis points and operating expenses of approximately $16 million. This equates to an expected increase in operating margin in Q2 for the seventh straight quarter. Interest expense will be down by about $200,000, given the paydown on the revolver. Our tax rate is expected to again be approximately 13%, and our fully diluted share count is expected to be 29.3 million. Operator, we are ready to take questions. Please open the line.

Thank you. [Operator Instructions] One moment please while we poll for questions. The first question is from Quinn Bolton from Needham & Company. Please go ahead.

Hey, Jeff and Larry, congratulations on the nice results and outlook. Jeff, you spent most of your script talking about your efforts to grow faster in WFE. And so, I guess my question is if you think WFE is 25% to 30%, is there any reason why you wouldn't be able to grow faster than that this year? You talked about some need to add capacity, but is there anything that would restrain -- or constrain your growth this year?

No. Our capacity additions, a very large portion of those are going to be in place by mid-year. They -- we started them in late Q4. So there won't be any issues with capacity. Obviously, we've seen WFE expectations continue to rise, and so it's difficult to give you an exact range of our outperformance, but given how levered we are to some of the etch and deposition customers we have, plus EUV, those I think will certainly be growing higher than the overall industry average. So that would tell you that we'll grow above it, plus we'll layer on another amount of meaningful market share gain. So there is nothing that would lead me to believe that we can't once again outperform industry growth.

Great. My second question is just, you mentioned a couple of those share gain opportunities, two qualifications for machining in Q2 that starts to contribute to revenue in Q3. Is there any way you could size what that opportunity is?

Well, not specifically and obviously for competitive reasons, but they are significant, I would say, last year we did a pretty good job of adding another fairly large amount of market share gains. We're targeting a very similar amount. Obviously, as the market gets bigger and bigger if those take about the same size or kind of a smaller percentage of the total, but they are still meaningful. What I would tell you is that we've already come out of the gate pretty quickly. Some of the gains that we've had have been, one, the integration assembly side of our business to support some of the growth you're seeing in some of the legacy business out there in the marketplace, and then these other ones will kick-in in the second half as well. And then there is just a number of other ones that are smaller in nature, but we're very, very optimistic about closing these things out and seeing this impact in the second half. And again, our capacity, I would say, entering the year was probably in the $300 million [ph] range, low $300 million [ph], and now we're going to be pushing that up to something over $400 million [ph]. So we have plenty of capacity to support this year's growth and the next several years' growth, in my opinion.

Great. Thank you, I'll get back in the queue.

Thanks.

The next question is from Tom Diffely of D.A. Davidson. Please go ahead.

Yes, good afternoon. Maybe just a quick follow-up on capacity. Jeff, when you look at COVID and how it's restricted some of the employees being in the same place at the same time and then you look at the new facilities and the need to hire specialty welders, how does that play now? Are there difficulties in actually reaching certain capacities or certain headcount in a timely manner?

It's always a challenge to continue to hire, but we've done a really good job. We have a good team and a good network for those particular areas. I think we're doing a pretty good job in the COVID environment and I think it's some of the most advanced welders. I think we've done a pretty good job of hiring some of those and others, we're basically taking a little bit different approach in doing training and things like that, so that -- hiring will not impede us, I don't believe so. Obviously, in Malaysia, we've done a really good job. We've added a lot of capacity there. Their spacing is obviously further apart. It's a bigger operation than some of the US sites that we have today that are a little compressed. But every quarter, they find a way to get more and more out on a productivity basis. So we're pretty pleased with our operational performance.

Okay. Do you think some of the changes you've made from a spacing point of view are going to be maintained post COVID?

That's a good question, Tom. I would hope that we can go back to normality at some particular point in time. We obviously monitor the progress at each of our sites and the communities around them are making with regard to total vaccinations. And so, I think we will go back to a normal stage. It's very difficult to say is that in September, October, January, but once the restrictions are relaxed, we'll go back to the way we did business prior.

Okay, great. And then just follow-up here with a more of a broad-based question. We're in the middle of what appears to be just a super cycle for the foundries, but what do you see the cycle for both the NAND and the DRAM parts of your business?

Well, I think that obviously we went through a long period of time where the NAND business transitioned to vertical from planar, so that's completely done. So now it's just going to grow with bit growth demand. I think as you look at memory demand, it's still -- most people are forecasting somewhere around 30% bit growth that has to be served by something. DRAM -- our outlook for -- that we see for DRAM is probably a little higher percentage growth than NAND, but both of them very sizable growths year-over-year. So we're seeing strength in memory, as well as in foundry and logic.

And then I guess, lastly, any kind of crystal ball look into the memory markets into next year? People are talking about foundry being extendable well into 2022, possibly beyond, but what do you see on the memory front?

Yes, I think when you look at memory, and again, you said crystal ball, so I can't tell you with any precision. But I still think there is some wafer starts or wafer adds going on this year, largely a lot of technology transitions, those will continue and I think you'll see demand in both NAND and DRAM continue to strengthen. We see -- we saw a very healthy 3D NAND environment in the first half, obviously through our Korean operation. So it was pretty strong in Q1 and it's staying strong in Q2.

Great. Thanks, Jeff.

You bet.

The next question is from Patrick Ho from Stifel. Please go ahead.

Thank you very much, and congrats on the really nice quarter and outlook. Jeff, maybe first for you. I know it's hard to discuss exact specifics about your customers, but given you work on the development of next-generation gas delivery and fluid delivery systems, how -- I guess, on the collaborative effort side of things, your customers are coming up with new tools over the next several years as well. How much of your work is in timing with those new tool introductions so you can, I guess, catch the inflections that they're trying to catch as well?

Yes, I would say -- I have to be careful in discussions about timing and things like that, but obviously, to get a new type of platform or product qualified, you definitely have to connect with a transition, either a revision of the tool or a new tool. So most of these will be connected to newer tools. But having said that, a couple of our engagements are things where the tools, we're not looking for a new platform, a revision instead.

Great. And maybe as my follow-up question for Larry, given some of the new capacity that's coming online in the second half of the year and the continued improvements you're going to see on gross margins, how are you balancing some of the -- I guess, the cost structure from the standpoint of a lot of times new facility ramps and new capacity ramps tend to have lower margins just because you have some duplicate costs you're adding people in. How are you balancing that to get the higher gross margins or the gross margins' growth through the year?

Thanks, Patrick. I think the first thing is, for many of these sites, the investments we're making are very linked to the incremental revenue expectations in the short term. So as we're adding equipment, that equipment will be put into service very quickly and start delivering revenue almost immediately. So I think, in general, we look at and we obviously have to keep capacity just ahead of what the customers need. We're doing that, and I think we'll continue to watch when we bring these things online, but we have a pretty good sense of visibility over the next six months. So I think our ability to match the addition of the capacity and the timing of that capacity with the revenue, which will then offset any cost increase, I think we've got a pretty good sense of visibility to that and can manage through it.

Yes, and I tell you, Patrick, I would just add to that that when we add capacity to support some of the machining opportunities, that's our highest gross margin product as you guys know, so that would still drive incremental accretive margins, and then over time, obviously, they were getting better. So that helps as well as just the mix of where we're adding the capacity.

Great. Thank you very much.

You bet.

The next question is from Craig Ellis from B. Riley Securities. Please go ahead.

Yes, thanks for taking the question, and guys, congratulations on the strong execution. So Jeff, I wanted to start with just a follow-up to some of your prepared remarks on 2Q Q-on-Q and second half half-on-half growth, so real helpful. The clarification was on what you see in the second half. Can you provide any color on how large the half-on-half growth would be, or alternatively whether or not you've got the visibility down to see if you would have sequential growth in both the third quarter or the fourth quarter that's in fact not yet clear?

Yes, no, I would say, as we look at it, I don't want to give the indication that there is a big step function from front half to back half. I do think that it's not unreasonable to think about sequential growth through the end of the year that each quarter will be a little bit larger than the next quarter. And depending on how things shift around, that can change, but I don't think we'll see a smaller second half, I think we have confidence in that. The timing and the visibility that we're getting is pretty good. I think the communication with our customers and their outlook has improved greatly through this period of pandemic and ramp working very well together. So I think that you will probably see sequential growth, but I couldn't make an absolute commitment to that today, but that's what we see.

That's helpful. And then, I just wanted to ask a longer-term question before I flip over to Larry. The longer-term question is this. So it was helpful to see the example of five-year share gain within WFE from 0.9% to 1.5%. So if we did that same thing over the next five years in terms of the percent increase, we'd be at 2.5% of WFE at a time when I think most people would expect about 100 billion or plus or minus, so that would imply $2.5 billion in revenue potential. The question is this. If the business were to execute to that level of five-year growth, what would you need from M&A to get there and how is the M&A funnel looking at this point?

Yes, we definitely would need M&A to get there, because when you look at the 0.9% to 1.5%, we added two or three acquisitions of significance during that period of time, as well as continued to build out kind of our organic product lines and gain some share. So there will be an M&A component if we were to do that, for sure. The pipeline, I think the pipeline is pretty good right now. Obviously, when you get to these kind of valuation levels, there are people that decide that it's time to sell a business. It's always hard to get exactly what you want. Things are active. I couldn't update you beyond that, but we're putting a lot of focus, at least myself and a few of my key staff, on looking for opportunities that fit with our longer-term strategy of building a higher component of IP products into our business that we have today. So other than that, I couldn't be more specific, Craig.

It's helpful, it's real helpful. Thanks, Jeff. Larry, flipping over to you, so I think on the last call you mentioned the potential for gross margins to rise through the year. I think it was somewhere around 20 basis points, plus or minus, but is the expectation still that we can go up through the year, or is there anything happening with the capacity that comes on that year [ph] that would mute some of the gross margin expansion when we exit the year?

Yes, I think we're still in the range of 20 basis points a quarter. We do have line of sight on some of our cost reduction programs. Union City in Q2 will help us as we're finishing -- closing that site. And as Jeff mentioned, some of the new product wins that we see, that will add to the components -- higher percentage of components business, which is accretive to our margins. We do have COVID and we are seeing some of the effects of freight cost increases that other companies have mentioned. That's impacting us as well. So, as WFE grows, we do have the mix that we deal with gas panels and trying to look at how that grows relative to the component side of the business. But right now, we're pretty confident that we can do the 20 basis points pretty much quarter-on-quarter for the foreseeable future.

That's great. And then lastly from me before I hop back in the queue, nice job paying down the term loan, $30 million, and some other debt reduction on top of that. The question is this. What should our expectation be in the second calendar quarter, and then any color on further debt reduction for the back half of the year? Thanks, Larry.

Yes, I think that maybe I'll take it.

Sure.

I mean, obviously, we would like to do some accretive M&A. So, obviously we -- right now, our EBITDA multiple is, I don't know, around 1.5 --

1.3.

1.3, comfortable level of debt, down quite down quite a bit. So if accretive M&A doesn't come around, we'll revisit it again. If you remember, in Q2 of last year, most companies were drawing down on revolvers just as a business continuity, in case anything more difficult than it was, but -- so we paid that all back this quarter and its -- rates are down, leverage level is in good shape. So we prefer to continue to just go R&D, CapEx and accretive M&A, and then once we get through that, then we'll revisit our debt level.

Makes sense. Thanks, Jeff. Thanks, Larry.

You bet.

Thanks.

The next question is from Krish Sankar of Cowen and Company. Please go ahead.

Yes, thanks for taking question, and a couple of them for Jeff or Larry. First one, I'm just trying to figure out, where do you think your customer inventory levels are? Do you think are they building inventory right now, or doing all the component [ph] or are you guys far away from the supply chain that you can't see it?

I would tell you that in the gas panel side of the business, there is not inventory stocking. Generally in these types of ramps, we're kind of running pretty full out. So I don't think there's much there. We've seen some growth in level of consignment inventory that we carry on -- the weldments and consignment or precision machining, but it's not a really big number. As Larry talked about, our inventory turns in a rising environment, sometimes you see those actually go down, ours actually went up. So I don't think that we're being impacted by an inventory build. I think we're seeing kind of a natural flow of demand.

Got it, Jeff, that's helpful. And then on the gas delivery side, I understand, usually your customers have very little inventory because it's customized. If I remember right, the cycle times were four to six weeks in the past. What are the cycle times today? Are they at similar levels or they've increased?

You said --

Lead times.

Our lead times?

Cycle times.

Yes, it's four weeks for everything but the EUV unit, which is more like five months or something like that in total lead time from order to delivery. We ship ahead of our customers, but -- and our lead time on that is not five months to build it, obviously, but it goes in about five months before a revenue tool, and I would say about a month that goes in before revenue tools from our process tool customers. And our cycle times probably range from a month to a couple of weeks.

Got it. And then a final question. How much was AMAT, DRAM, ASML, as a percentage of your revenue?

Yes, we don't -- yes, Krish, we don't provide that on a quarterly basis. But I wouldn't think it was -- all I would tell you is it's no drastic change from what you probably can see in our 10-K from last year.

All right. Thank you. Thank you, Jeff. Thanks, Larry.

Yes, thanks.

This concludes the question-and-answer session. I would like to turn the call back over to Jeff Andreson for closing remarks.

Thank you for joining us on our call this quarter. I'd like to thank our employees, suppliers, and customers for their support and strong execution in this historic demand environment for the semiconductor industry. We look forward to updating you again on our next earnings call in early August. In the meantime, we hope to see you at one of our virtual investor conferences in Q2, including the annual technology conferences hosted by Cowen, Needham, and Stifel, as well as the CEO Summit in June. Operator, that concludes our call.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.