LivePerson, Inc. (LPSN) Q1 2016 Earnings Report, Transcript and Summary

Good afternoon and welcome to the LivePerson First Quarter 2016 Earnings Call. My name is Lily [indiscernible] and I'll be facilitating the audio portion of today's interactive broadcast. All lines have been placed on mute to prevent any background noise. [Operator Instructions] At this time, I would like to turn the show over to our LivePerson's Founder and CEO, Rob LoCascio, and CFO, Dan Murphy.

Thank you very much. Before we begin, please note that we will make forward-looking statement during today's call, which are predictions, projections or other statement about future results. These statements are based on our current expectations and assumptions as of today and are subject to risks and uncertainties. Actual results may differ materially due to various factors, including those described in today's earnings press release, in the comments made during this conference call and in 10-Ks and 10-Qs and other reports we file from time to time with the SEC. We assume no obligation to update any forward-looking statements. Also, during this call we will discuss certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is included in today's earnings press release which is now available in the Investor Relations section of our Web-site. Now, I will turn the call over to Robert LoCascio.

Thanks, Dan, and thank you for joining LivePerson's first quarter 2016 conference call. We are pleased to report that first quarter revenue and profit were within and above LivePerson's previous issued guidance ranges. Our vision and strategy are starting to intersect with the demands of the market as there has been a lot of public discussion around mobile messaging bots, et cetera, on the context of customer care. The companies like Facebook are reinforcing our vision regarding the inevitability of messaging between brands and consumer. Working closely with Facebook Messenger, LivePerson revealed new integrations with Messenger and chat bots at Facebook's F8 Conference last month. We now provide consumers the ability to message a brand directly when bots fail to deliver successful self-service outcome. A long standing customer of 1-800-Flowers was highlighted as a first adopter of these new capabilities in Mark Zuckerberg's keynote speech. 1-800-Flowers is leveraging the scalability, security and intelligence of LiveEngage and our integration with Messenger to offer hundreds and millions of consumers the option to message the contact center. Zuckerberg echoed our Company's vision on the F8 stage stating that consumers should be able to message a business just they do with their friends and not have to call them. The aggressive promotion of messaging by Facebook and others as a primary means of connection between consumer and business should only help to accelerate our own efforts to fuel mobile adoption across brands. The consumer is already there. According to a recent study by IDC, U.S. smartphone owners spend 84% of their communication time on digital channels such as text and social apps versus only 16% of communication through phone calls. Brands are responding to these industry forces. They are expressing strong interest in aligning with how consumers prefer to connect, which is through digital channels on mobile devices. In fact, in the second quarter, we are set to deploy our first enterprise mobile customer and millions of consumers of this brand will soon have an alternative voice that gives them back their time and delivers a more connected experience. A large telco in EMEA that launched our SMS mobile capabilities in the first quarter is already delivering these benefits to its customers. Impressed by initial outcomes, the brand is promoting SMS in its IVR, on the Web, on Facebook and in-app. This leading brand is now looking to expand our mobile offerings into new lines of business. We plan to launch several new pilots in the coming weeks across mobile channels. One of the great advantages of LiveEngage is the ability to provide a single interface that measures and analyzes all mobile and online customer conversations across digital channels. Those learnings continuously improve the success of our customers' engagement programs. Brands across the globe are increasingly recognizing LivePerson for the strategic impact these capabilities deliver to their business goals and customer relationships. Liberty Global, the largest international cable company with 27 million consumers across 14 countries, signed a seven-figure three-year contract to deploy LiveEngage worldwide. The selection was part of Liberty's new transformative initiative which is tasked with standardizing best practices and best-in-class technologies across all their brands. Orange, a global leader in telecommunication services, replaced a competitive solution with LiveEngage in France last month. Telco immediately saw a meaningful decrease in [held] [ph] time, increased agent satisfaction and materially simplified administration of campaigns and engagement. LiveEngage scalability was key as the platform was initially deployed across multiple geographies and hundreds of agents, and is targeted to power millions of digital conversations each year. In addition, Orange is clearly aligned with our vision for using mobile messaging to transform customer care. Industry peers are also recognizing the strength of LivePerson's position after winning the CODiE for Best Customer Success Management Solution in 2015. LiveEngage has been selected as a CODiE finalist in three categories this year. We're up for Best Sales and Marketing Mobile Application, Best Customer Service Solution, and Best Sales and Marketing Intelligence Solution. Across the board we are making significant progress on the three objectives that will turn our vision into reality and position LivePerson for stronger performance; fueling mobile adoption, upgrade customers to LiveEngage, and proving our operational leverage. The Company saw strong momentum across mobile in the first quarter with mobile chat interactions on LiveEngage increasing 60% sequentially. Nearly 25% of all digital conversation on LiveEngage were mobile in the first quarter, up from 21% in the fourth quarter of 2015 and 18% in the third quarter of 2015. Our momentum also continued on the upgrade front. LivePerson entered the first quarter with 57% of customers on the platform, up from 45% at year-end and 20% a year ago to the quarter. We moved deeper into our midmarket enterprise customer base and began upgrading the first lines of business for many of our largest brands. The data we have seen from these first set of midmarket enterprise customers is that there is a 10% plus increase in usage by the third month. These solid usage trends are similar to those that we reported in 2015 when the LiveEngage base was primarily a small business. The validation of the value added from customers moving up to LiveEngage is remarkable, and a few examples are; hospitality customer saw greater than 20% increase in average order value and a 5% increase in conversion rates just in the first month of its upgrade; a telco customer realized a greater than 50% increase in engagements per hour and a nearly 20% increase in conversions; Fairhaven Health, an online fertility and wellness company, tripled engagements after upgrading by increasing chat usage and adding content to mobile campaigns. Another customer, a global pharma, has been so impressed with LiveEngage that they are now proactively demoing the platform to other internal lines of business. Interaction on LiveEngage platform increased more than 10-fold. The scalability is proven. The largest LiveEngage customer is on track to power 7 million interactions. We remain focused on the upgrading process and we see line of sight to the end of the customers. With large investment in LiveEngage, we're almost, we're halfway through it. Operating expenses were 7% lower in the first quarter. We continue to expect year-over-year margin expansion into our historic 20% plus EBITDA. We're pleased with the significant progress made on our Company objectives in 2016 and we remain focused on upgrading our customers, strengthening retention rates and moving our customers to our vision. As a company, we are excited about the industry transformation that now appears imminent. We expect to lead this shift in customer care and powering brands to meet consumers in the channel of their choice, with communication experience that forges meaningful connections. And with that, I'll turn the call over to Dan, who will first give us our first quarter results and outlook in more detail. Dan?

Thanks, Rob. The key take-away from this call is that we are on track with our primary objective in 2016 with our focus on upgrading the remaining customers to LiveEngage and now have more than half the base on our platform. We are advancing our mobile strategies, evidenced by a 60% quarter-over-quarter increase in LiveEngage and mobile chat interactions. We are also on schedule to deploy in the coming weeks our first enterprise using a purely mobile offering for connecting with consumers. We have kept our cost in check, which is prepping the business for increased profitability with a growth in revenue. With that, I will turn your attention to our first quarter 2016 operating results. Revenue of $55.5 million, at the midpoint of our guidance expectations, with 7% year-over-year decline, primarily reflects the loss of a previously disclosed customer relationship that ended in the second quarter of 2015 and the effect of foreign currency. The Company's customer renewal rate stabilized sequentially in the first quarter and our trailing 12-month customer renewal rate with 83% met our internal expectations. We continue to anticipate returning to a 90% plus customer renewal rate as we convert more customers to LiveEngage. Our trailing 12-month average revenue per enterprise and midmarket customer reached $200,000 in the first quarter of 2016, up from $170,000 in the first quarter of 2015. The trailing 12-month revenue figures are pro forma to exclude contributions from the previously disclosed customer contract that ended in the second quarter of 2015. We signed 84 deals in the first quarter and 20 of those with new enterprise and midmarket brands. The trend we discussed in prior quarters continues with a total deal count narrowing due to sales pipeline that is more heavily weighted to larger, more strategic deals and our near-term focus on upgrading rather than up-selling existing customers. B2B revenue declined 8% to $51.7 million and consumer revenue increased 2% to $3.8 million. The B2B revenue breakdown by industry was, retail at 23%, financial services 21%, telecommunication 17%, technology 10%, and other at 30%. Revenue from our international operations was roughly flat in constant currency in the first quarter and accounted for approximately 32% of total revenue. First quarter GAAP net loss per share of $0.05 was better than previously issued guidance. Adjusted EBITDA per share of $0.08 and breakeven adjusted net income were both within our previously issued guidance ranges. First quarter gross margin was 71.4%. The Company's cash balance including restricted cash decreased to $48.5 million at the end of the first quarter, from $54.2 million at year end of 2015. Cash from operations increased by $2.2 million in the first quarter of 2016 compared with a decline of $7.6 million in the first quarter of 2015. The shift was primarily due to our ability to move more customers to cash payments in advance on annual [borrowings] [ph]. As a result, deferred revenue more than doubled year-over-year to $21.9 million in the first quarter, from $10.2 million a year ago. The Company repurchased approximately 637,000 shares of stock for $3.2 million in the first quarter, and additional $16.9 million remains available under the share repurchase authorization. Capital expenditures totaled $4.5 million, which includes the cost to consolidate offices in Atlanta and data center upgrades. Turning your attention to LivePerson's 2016 outlook, our year-to-date progress has been in line with our guidance and our financial expectations are unchanged. Our detailed financial expectations are as follows; in the second quarter of 2016, we expect revenue of $56 million to $57 million; adjusted EBITDA of $4.5 million to $5.4 million, or $0.08 to $0.10 per share; adjusted net loss of $0.03 to $0.01 per share; and GAAP net loss per share of $0.09 to $0.07. For the full year 2016, our expectations remain unchanged; revenue of $230 million to $235 million, revenue guidance includes the negative foreign currency impact of approximately $1.5 million; adjusted EBITDA of $23 million to $26 million, or $0.40 to $0.45 per share; adjusted net income per share of $0.05 to $0.10; and a GAAP net loss per share of $0.17 to $0.12. We expect to pay cash taxes of between $1 million and $3 million in 2016. Recall however that in 2016 we began applying a standardized 35% tax rate to all non-GAAP add-backs when we calculate adjusted net income. For comparison, the tax rate on non-GAAP add-backs was effectively 0% in 2015. This change has no effect on cash taxes, but accounts for a $0.12 per share increase in our estimated 2016 adjusted taxes as compared to our 2015 actuals. Furthermore, as a percent of revenue for the year, we anticipate gross profit to be approximately 70%, sales and marketing 40%, G&A 15% and R&D 16%. Please refer to LivePerson's earnings release issued earlier today for details on our full year 2016 assumptions. We have also published a supplemental presentation on the Investor Relations page of our Web-site that reviews key points from the earnings call. In the first quarter, we captured efficiencies from past investments and the scalability of LiveEngage, reducing expenses even as we advanced our priorities of upgrading our customer base and fueling mobile adoption. We continue to expect to exit 2016 with a low to mid-teens adjusted EBITDA margin, putting the Company on track to return in subsequent years to our previous peak of 20%-plus adjusted EBITDA margins. Our objectives for the remainder of 2016 are clear. We want to move the majority of our customer base to LiveEngage, which we believe in turn will strengthen our renewal rate, fuel mobile adoption, drive usage and deliver cost efficiencies. Our focus for the rest of the year is on the successful execution of these priorities. With that, I'll open the call to questions. Operator?

[Operator Instructions] Your first question comes from Richard Baldry from ROTH Capital. Richard, your line is open.

Curious on your customer migration effort, if there is any consistent trend of the customers that are actually choosing to drop off and not move over to the LiveEngage platform, whether it's geographic vertical, sort of their strategic high-margin/low-margin, anything to think about so we kind of understand where that lives?

We haven't had anyone that didn't want to convert yet. So whoever is converting, they've got dates and they are going across. So we haven't had someone say, I don't want to convert or I'm leaving because of LiveEngage.

Your next question comes from Jeff Van Rhee from Craig Hallum.

Couple of questions, maybe first just on the pace of signings and when we see the customer counts, you talked about the deals getting a little larger and obviously you're focused on migrations as well, but just two questions along those lines, bookings versus expectations and then retention of say your upper 50% in terms of performing salespeople thus far, any changes in churn in the sale set?

So bookings versus expectation, we did what we expected from a bookings perspective. We knew going into this, we were focused on migrating customers. And Jeff, as you know, a good portion of our bookings come from existing customers and a small portion from new customers. So we are where we expected. And then as far as churn in the sales organization, we've got the people that are part of the group and have been consistently part of the group. There is no significant churn that I'm aware of related to the group and we've actually brought back a couple of people that have left us in the past and rejoined.

And I guess with the percent of the base that is migrating over to LiveEngage, and particularly those that are a bit more mature, you've talked about the increased interactions and a lot of other metrics that are reflecting increased usage of the platform. Can you translate that at all into some sense of revenue uplift for people that have been around six months, 12 months? Obviously, I think if I recall the pricing, you will reflect the increased usage on a trailing basis. Maybe you can just give me some sense of how the usage translates into potential increased revenue from customers that are on LiveEngage on some sort of annualized basis?

So, Jeff, the way that our contracts work, they are usually annual related contracts and we're not trying to move people around a renewal date, we're actually moving them over mid-contract. So we are seeing an increase in usage and many of our midmarket or enterprise customers are on annual versus monthly usage gap. So as they move over, we are absolutely seeing an increase in usage on these customers and the adoption of mobile is strong as well, but you won't see that start to hit the revenue until future periods when they either come up for renewal or they need to actually make an adjustment on an up-sell in their contract.

But I guess at this point, even if they aren't up for renewals, you've got somebody that's been on six or nine months, maybe approaching 12 months, you don't have enough of a sample just to say, it looks like on an annualized basis we'd see this kind of uplift?

We do and that's something that we look at on a regular basis. And again, just recall, the migration, it was mostly small-business customers that we started with and I would see increased usage from those small-business customers. And then on the midmarket and enterprise, we started renewing those midmarket customers, and some of the ones that have been on LiveEngage platform longer than others, you can see we increased the usage over time, and our expectation over time that we would expect to see a correlation to revenue.

Your next question comes from Mike Latimore from Northland Capital Markets.

I think Daniel said one of your goals for the year was to get the majority of customers over LiveEngage. I guess in your slide, it looks like you're kind of already there I believe. So I think are we talking closer to, I don't know, 75% by year-end?

I mean, listen, the key is to move as many customers as we possibly can over to LiveEngage platform, and one of the things Rob talked about in the script was we have got enterprise customers that may have multiple lines of business. And so when we migrate those customers or migrating a first line of business, and we don't count that as a customer migration until we move all of the business around the LiveEngage platform. So we run after the small-business customers, a good number of customers, maybe not a lot of revenue, now we are really focused on the midmarket and enterprise guys and moving those over. So we're at 57% so far through the first quarter and our goal is to get more over as we continue throughout the year, and our expectation is that we'll be above that 75% range.

We'll finish the small businesses, finishing in the next two months or so. So we are done with small business and now we're focused – midmarket has been moving for a while and then enterprise is going, so we are not focused on those two, but I would say above 75% is obviously where we are trying to go. The other thing is, there's a cost structure of supporting the old platform and we know it's a different cost structure than we have for the new one. So we want to move 100% of the customers over obviously so that we can get the benefits of that and the benefits of the scale and the technology in LiveEngage. And then LiveEngage is obviously focused on our vision of mobile and being mobile-first. So it's sort of like, get them moved, get them into the vision. So we want everyone across. And the customers love the product. The ones that are on it where they are greenfield or they are the existing customers, when they go on it, it's a great product. And it took three years to develop, but it's working quite well, and they automatically move to getting more usage. Especially around mobile, they can go from zero to like 16% to 20% when they move. And so, it gives them a lot of abilities to focus on where their consumers are today.

Okay. And then are there any key features you want to add to LiveEngage to maybe make it more amenable to some of the very big customers or certain verticals or do you feel like the future there kind of as-needed?

It's pretty rich right now and it's got a lot in it. So there's not too much, I mean there's a lot to build. We have a roadmap for the next 18 months that's already locked down. There's a lot going-on on the mobile side. There is a lot going on with the bots side now with the stuff we're doing with Facebook and integration of bots and stuff like that. Now co-browsing all that basic stuff is in the platform across, everybody has access to it. So there are some unique things that we'll deliver around the mobile side. We won't talk about them today, but as we get them out into the market, we'll talk more and more about the mobile features I think.

And just last on CAO, Contact At Once!, how is that trending relative to your expectation?

They did well. They [indiscernible], the automotive vertical is doing really well. There are some exciting deals in there. They are starting to pick up on the housing side, even outside of – we had started with one large aggregator, now they're moving into one or two others. So they are really doing good as a team. The consumer team did good. Even small business had its best, sort of like its best month on net adds. Usage in the small-business segment was up because of the LiveEngage platform and there's extra billing there. So those parts are going quite well. Obviously the enterprise now is where we're focused on moving that across and getting that to the next level, but the other pieces in the company are doing quite well. Even consumer did well also.

Your next question comes from Mark Schapp from Benchmark.

Robert, in your prepared remarks you provided some metrics around your mobile chat, I think for example, mobile interactions were up 60% in LiveEngage. Nonetheless, I didn't catch all those. I was wondering if you could just go through those metrics one more time.

Let me get those here. For the Company, we had 60% – I'll just read it. The Company saw strong momentum across the first quarter. Interactions of LiveEngage were up 60% sequentially. And then nearly 25% of all digital conversation on LiveEngage were mobile in the first quarter, up from 21% in the fourth quarter and 18% in the third quarter.

Okay, great. And then as you start to move the bulk of all your customers, what looks like the bulk of your customers are on LiveEngage now, could you just review one more time how you're going to be increasing your wallet share from your customer base? A lot of that I know has to do with your usage-based payment model.

The mobile obviously is one of the biggest strategies because it's really attacking the 800 number and the call center and voice, where chat at its best, we're doing about 10% of interactions come from chat, we think with mobile we can take a larger share of the 90% that's left over in the voice category. So we're very focused on the mobile side and attacking that. Obviously, there's other things like content and content targeting which is being used, but mobile is the focus of the platform and really where we're putting a lot of the efforts.

Your next question comes from Glenn Mattson from lightning.

Just curious on the migration, last quarter you mentioned that almost everyone at this point has had firm date set up for when they're going to convert over if they haven't already. As you get closer to those dates as they come along the year, are you seeing any pushback or any people getting cold feet at the last minute and just kind of kicking the can down the road at all, or any color on that?

You're going to have a little bit of pushback sometimes and maybe four weeks off or eight weeks, but so far, the customers that we have down with timeframes are excited to go and they've had allocated resources. So we're pretty much on their timeframe and ours, but so far it looks very good.

All right. And the 83% customer retention rate, can you remind us what that was last quarter and any forecast for when that number would bottom and start turning back up?

So, last quarter was 84%, Glenn. We stabilized and we actually had a slight uptick in Q1 over Q4. So, our stated goal has been to get over 90%. And this is a trailing 12-month metric. So when you take out one quarter and add another quarter, you have a little bit of movement, but we think we're trending in the right direction and we're encouraged by Q1. It has met our internal expectations and we are focused now on Q2 and executing in Q2.

Okay, great. Thanks. Good luck, guys.

Your next question comes from Brian Schwartz from Oppenheimer.

This is [indiscernible] for Brian Schwartz. First question on the consumer revenue segment, it looked like this is the first time it's grown in I think a couple of quarters here. Just maybe a bit of color on what contributed to that consumer segment returning to growth, and is that return to growth in the consumer segment something that's sustainable for the remainder of the year?

I hate to be a broken record but they created a mobile app and launched their own mobile app and get experts on the mobile device, and so that's what's actually been fueling their growth. It looks pretty good right now. So we have to see how it plays out, but their mobile app they put out there is getting good use and there's good excitement about it. But I think I'd like to see another quarter, but I feel good about what we're seeing right now.

Got it, thanks. And then last quarter you talked about a couple of good bookings customers that happened in the third quarter or fourth quarter of last year looking to make a meaningful impact in the second quarter. Were those on track to go live in the second quarter, maybe an update on those customers?

The one that's the mobile only customer is on track, and I [can't] [ph] think of the other one, they are both on track. They got notched from around the room, so yes, they are both on track.

Great, thank you. And then maybe a question for Dan or Rob, just trying to think about the international opportunity here with your disrupting the 800 number, internationally is that opportunity the same, I mean is the customer or a consumer interaction with brands out there, is it pretty similar to where you see in North America, or maybe it's a little bit different where maybe even the LiveEngage platform offers an even better engagement channel for those types of consumers?

I mean if we start over in Asia, you've got a mobile-first world. So they are early sort of mentally there about how mobile should work and mobile engagement. Europe is pretty similar to the U.S. And so we pretty much see like, if you look at it, there's an even bucket of pipeline building in each of the big regions that we have, our offices and in our sales operations and partners. So I feel pretty good. Right now we're very focused on the telco space and I'd like to see that we bring up some large telcos in each region around the vision within the next quarter or two. So that's kind of where our focus is. But Europe is actually I think quite different even now in the last two years, there's a lot more aggressive competitive behavior and companies there are being very innovative even against their U.S. counterparts. So I feel very good about what I see globally right now.

Your next question comes from Craig Nankervis from First Analysis.

Most of my questions have been asked actually. I wasn't clear, I mean you made a variety of comments about the migration in Q1. Did you actually say, did the quantity that you wanted to migrate in Q1, did that play out versus your plan, unless if you really said that or not, and I'm curious about that?

Yes, it actually did play out. We're at 57% of the number of customers as of the end of the first quarter. So, yes, that did play out to our expectations, and we stated we want to get the majority over, and I think there was an earlier question, our target is to move better than 75% of our customer base over and we are working diligently in Q1 and Q2 and Q3 on the mid-markets and enterprises.

Is there any particular lumpiness amongst the quarters coming ahead for migrations, or that may not be a good question, but I'm curious how – is there a crucial period for you that you want to get past that will make you feel like you're going to achieve your goal for the year or is that sort of not necessarily the case?

No, our goal right now is, we're trying to space them out to the best of our ability in the best way we possibly can. The only thing that would come up a little bit in this Q4, just that October, late October or early November timeframe, where customers want to lock things down. So our goal is to make as much progress as we can Q1, Q2 and Q3 knowing that that potential lockdown of [indiscernible] from our customers will happen in that late October or early November timeframe.

I think we're trying to bring as many as we can. Obviously it's the focus, right. So we know, once we move everyone to LiveEngage, then we get to sort of – we have a new company in many ways. We're very focused on accelerating that, but as to our balancing bookings and stuff like that, but the focus and number one goal is to get everyone on it, because once they are on it, we know we got a very stable base, a committed customer and then they can grow into the vision. So if we can accelerate it, we'll put more into it. It's just we're moving as quick as we can.

Okay. And then just thinking about Q4 as you were mentioning, I don't remember if there is particular seasonality to your enterprise renewals. Obviously for some enterprises, it can be Q4. Is that a dynamic that you also would have to balance there to the end of the year versus getting the migrations or is that not necessarily a factor?

Our renewals are pretty well spaced out throughout the year but Q4 is a little bit heavier than Q3 and Q2. So it is a little bit of a balancing act, but as we talked about it a little bit earlier in one of the comments earlier, our goal is to upgrade these customers mid-contract, not to do it on a renewal date. So that is our goal and that's what we're really focused on.

You have a follow-up from Jeff Van Rhee from Craig Hallum.

Just one. So the target, 75% migrated end of year, are you able to hazard a guess or give us even an outline of how you think about the dollar migration? I mean at what point would it be reasonable to think you'd have AV percentage of the dollars migrated? Obviously that goes to the revenues are top-heavy, you get into the meat of your enterprise guys. Just sort of trying to logically map out when you hug your thinking about when you cross that threshold with respect to dollars as opposed to just customer count.

Jeff, that's a very good question, one we look at internally quite a bit and the measure of course we use internally. So as we move throughout the year and we have stated that we're going after the larger customers in Q1, Q2 and Q3, starting with mid-markets and going to the enterprises. So I'm not ready to give a timeframe or an actual percentage, sorry, on revenue, but obviously to get north of that 75%, a good number of our customers, our larger customers will be in that bucket. The second piece, and this is an important one, is if I have a financial services company, it's known as one company, maybe at a parent level, but we might be in 10 lines of business. And our goal is to move over those lines of business onto the LiveEngage platform. So that may not count as a customer count but may have an impact on revenue. So it's an important distinction to make as we're doing our analysis and counting internally and obviously reporting to you guys externally. But the key here in 2016 is to get as much revenue onto the LiveEngage platform as possible. We spent 2015 moving the small-business customers over, getting some learnings, understanding the product and forming a product roadmap, and as we into 2016, it's a focus on midmarket and enterprise customers, and those customers generate obviously a decent chunk of our revenue.

Okay, got it. Thanks.

There are no questions at this time.

Thank you for joining our Q1 call and we'll see you on the next quarter. Thank you.

This does conclude today's conference call. You may now disconnect.