PDF Solutions, Inc. (PDFS) Q3 2019 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. And welcome to the PDF Solutions, Inc. conference call to discuss its financial results for the third quarter ended Monday, September 30, 2019. [Operator instructions] As a reminder, this conference is being recorded. If you have not yet received a copy of the corresponding press release, it has been posted to PDF’s website at www.pdf.com. Some of the statements that will be made in the course of this conference are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding PDF’s future financial results and performance, growth rates and demand for its solutions. PDF’s actual results could differ materially. You should refer to the section entitled risk factors on PDF’s annual report on Form 10-K for the fiscal year ended December 31, 2018, and similar disclosures and subsequent SEC filings. The forward-looking statements and risks stated in this conference call are based on the information available to PDF today. PDF assumes no obligation to update them. Now I’d like to introduce John Kibarian, PDF’s President and Chief Executive Officer; and Christine Russell, PDF’s Chief Financial Officer. Mr. Kibarian, please go ahead.

Thank you, and welcome, everyone. If you’ve not already seen our earnings press release and management report presentation for the third quarter, please go to the Investors section of our website, where each has been posted. Our results in the third quarter showed continued progress towards our objective to be the provider of choice for end-to-end analytics and manufacturing controls to the semiconductor and electronics industry. Our results reveal the ongoing evolution from being important to our customers in ramping leading-edge logic nodes to being even more valuable for controlling quality, reliability, yield and operational effectiveness across the lifetime of semiconductor production. This is leading to a growing customer base. In the past, our focus on ramping leading-edge logic resulted in only a handful of customers driving the majority of our revenue. This caused our business to be tied closely to the investment cycle on leading-edge logic. Our business is now driven by analytics, and we have over 130 customers that make everything from leading-edge logic to high-voltage discretes, mixed signal, memory and systems. The emphasis on analytics has grown our available market and will create a more predictable results from PDF. With more than 50% of total revenue in the third quarter coming from analytics-based deals and another strong bookings quarter, primarily for analytics-based products, PDF Solutions continues its strategic evolution to be the provider of choice for end-to-end analytics and manufacturing controls to the semiconductor and electronics industry. For the customers and analysts that attended our combined Exensio users’ conference in 2019 Analyst Day, our progress on the evolution was clear. We had professionals from over 50 companies attend and 11 papers presented by our customers. We also presented our perspective of the industry dynamics and our product development road map to meet our customers’ growing requirements. Our users’ presentations showed the value of end-to-end analytics, the benefit of PDF Exensio platform architecture, and the operational efficiencies and productivity gains achieved from embracing manufacturing 4.0 by deploying Exensio. We characterize the value we bring to the industry as foresight. That is beyond monitoring what is happening in production, Exensio enables users to convert this growing data into useful predictions to prevent fabrication problems. We are uniquely able to do this because our integrated measurement tools, database and analytics software span the whole supply chain, including wafer manufacturers, foundries, OSATs, IDMs, fabless and system houses. Exensio stores over four petabytes of data for the industry and talks bidirectionally with hundreds of different front-end tools, testers, back-end assembly tools from virtually every major equipment manufacturer. Today, Exensio is connected to over 24,000 front-end tools, 8,000 testers and 6,000 back-end tools around the world. This unrivaled connectivity is critical component to making industrial IoT possible in the integrated circuit manufacturing. Let me touch on highlights from the third quarter that demonstrate our continued progress. Of the over 80 contracts closed in the quarter, the vast majority for Exensio-based contract. These include contracts for numerous fabless companies, including companies deploying Exensio on the cloud. The fabless companies include a top 30 company, a European start-up company, an existing fabless company that renewed their Exensio licenses. Our retention rate on renewals is over 97%, and the last customer I mentioned is another example of our strong customer retention. We also had IDMs deploying Exensio. In July, I mentioned, we had an IDM who used Exensio analytics across their fabs who benchmarked our test capability and decided on using Exensio both in the fab and test. This contract is signed in Q3. As I discussed earlier, customers value using a single platform across the enterprise for end-to-end analytics. Winning this test business with this customer affirmed our investment in Exensio semantic layer for integrating all data types. Notable other IDM contracts in the quarter include two Exensio IDM deployments, one for a memory company and one for a top 20 semiconductor company. We also signed a contract for Exensio Foundry deployment at a new Asian fab. To give us ability into assembly flow, an increasingly important part of IC manufacturing, we licensed Exensio’s single device traceability to a largest Exensio fabless customer for assembly and packaging operations. In addition to customers seeing the value of using Exensio – I’m sorry, in addition, customers see the value of using Exensio with our unique data, such as our characterization vehicles and DFI. Two such contracts include, a top 10 semiconductor company signed a multimillion dollar plus analytics deal, including our scribe line CV, pdFasTest tester and Exensio for controlling their production of a More-than-Moore nodes, demonstrating the benefits of integrating our unique data with the analytics. The rich and vast data that scribe CV can provide makes this sophisticated in the algorithms in Exensio even more effective. Another leading global semiconductor company signed a multimillion dollar deal for characterization vehicle, which includes CV structures tested with our pdFasTest tester and DFI structures tested with our eProbe and, of course, Exensio analytics. Finally, we continue to have customers interested in our integrated yield ramp. During the quarter, a Chinese foundry signed a multimillion dollar deal for technology development on an advanced node and will deploy a DFI eProbe 150 system as part of that engagement. The activity in the quarter demonstrates the benefits of PDF’s evolution. We have more customer and geographic diversity. We added new customers in the U.S., Europe and Asia this past quarter. We are expanding the number of PDF products and modules that existing customers are deploying. As we showed at Analyst Day, PDF has over 130 customers who are virtually the who’s who in the IT industry. Most of them use some module of Exensio as a point tool. As they are starting to deploy Exensio as a platform, they get the benefits of a single source of data. We showed in our analyst meeting that customers that deploy multiple modules of our solution, in other words, move to platform deployment, are able to get much more value from the system. And as a result, the annual recurring revenue can go up many times. In other words, going from one to two, three or four modules can increase ARR super linearly. This is why PDF is focused on expanding Exensio deployment within our existing customer base. In summary, PDF’s execution on our plan to be the analytics provider to the semiconductor industry is accelerating and is recognized by our customers. As we look to the fourth quarter, we anticipate continued success in converting the pilots we started earlier this year. In particular, we anticipate more pilot cloud deployments converting to production deployments this quarter. Our investment in R&D and cloud capacity in the third and fourth quarter has been prepared for these deployments. We believe that the fourth quarter will be very similar to the third quarter, with continued momentum in our analytics business. Let me now turn the call over to Christine to review the financials. Christine?

Thank you, John. Most of you will have seen our financials in our earnings release. In addition, we posted a management report in the Investor Relations section of our website. The report has financials and comments regarding the results of PDF for the quarter. So I’ll focus my comments in a few key areas. All of the financial results that we provide on this call are on a non-GAAP basis, which excludes stock-based compensation, amortization of intangibles and onetime and restructuring charges. Please refer to our press release for our GAAP results and GAAP to non-GAAP reconciliation. As a reminder, to those of you who were at our Analyst Day on October 15 or listened via the webcast, starting with our fourth quarter and year-end financial results, we will begin reporting our revenue as analytics and IYR. Analytics reporting will comprise our Exensio software and DFI as well as subscription-based vehicles. IYR reporting will include our integrated yield ramp offering and the associated royalties or gainshare. We believe this presentation will provide you better insight into our business and the path ahead in the coming years. While we’re not explicitly reporting along these lines in this third quarter, we’ll provide details where available. Third quarter revenue of $21.9 million was up just under 7% sequentially. In general, revenue progressed as we anticipated, as our model continues to evolve toward analytics. Revenue, primarily from Exensio software and DFI, which we will report as analytics revenue going forward, grew 6% quarter-over-quarter. Analytics continues to exceed 70% of our total solutions revenues. Our efforts and investments revolve around driving the growth of analytics. So this revenue performance demonstrates that our investments are yielding results. As it relates to the third quarter, revenue from IYR engagements benefited from closing a large deal that allowed us to recognize over $2 million in revenue on a percent of completion basis. We’ll continue to be very selective and strategic in generating future IYR business that can contribute to our top and bottom line results. Gainshare royalties were lower in the quarter compared to Q2 due to lower customer shipments. As mentioned on previous occasions, gainshare is lumpy and is dependent on the volume shipments of our customers. Although we expect to generate gainshare revenue for a number of years going forward, looking ahead to Q4 and beyond, our expectation for gainshare revenue will be a gradual decrease as we focus on our analytics business. With analytics revenue now the predominant component of our solutions revenue, we’re benefiting from the increasing annual recurring revenue that provides better visibility looking forward. For the quarter, annual recurring revenue accounted for just over 50% of solutions revenue. Sequentially, ARR grew by close to 12% quarter-over-quarter. We have seen a continuous trend in increasing ARR as a percent of solutions revenue going back to 2014 when it was just 15%. Another benefit resulting from our analytics offering is that it can be deployed to a broader market than our traditional foundry customer base as more and more systems companies look to design and produce their own chips. We’re a global company. We’re not dependent on any one geographic location. Today, we have significantly diversified our customer base with more than 100 different customers accounting for nearly 50% of year-to-date 2019 revenue. In 2019, customers who represent 5% or less of revenue accounted for over 45% of our revenue as contrasted with 20% in 2014. This attribute somewhat derisk the potential for significant disruptions due to geopolitical issues. Now let’s turn to cost of sales and gross margin. Non-GAAP gross margins were 64% during the third quarter compared to 52% in the year-ago third quarter. On a dollar basis, Q3 gross margins were $14.1 million compared to the same period a year ago, which was $10.5 million. Non-GAAP cost of sales was $7.8 million compared to $6.9 million in the prior quarter. The increase in cost was related not only to higher revenue, but the depreciation of the eProbe 250, which is located at a major Asia foundry. This is the first full quarter that the eProbe 250 was in service at the customer site. During the quarter, we further expanded our capability to deliver our services via the cloud. And as a result, we experienced higher costs related to these cloud services. We expect our cloud deployment to continue to grow. These factors, combined with 20% quarter-over-quarter lower gainshare revenue, which is a 100% gross margin, resulted in total non-GAAP gross margin for the quarter of 64%. Recognizing that gainshare revenue is variable as we continue to build the revenue contribution from software subscription sales, we expect gross margins to expand. Ultimately, we expect to achieve our target margins, which are over 70%. Now let’s look at operating expenses, which were flattish sequentially at $12.4 million. R&D expense increased by approximately $900,000 quarter-over-quarter, offset by $1.1 million SG&A decrease for a net reduction in operating expense of just over $200,000. The additional R&D spend was for new hires and analytics, eProbe contractor expense and associated depreciation expense as we build out the newest generation of EB machines for DFI. In addition, as previously mentioned, we invested in the cloud services for our SaaS offerings. SG&A benefited from a reduction in presales expenses as several of our presales projects turned into deals. Legal fees were also reduced as we successfully addressed some collections issues. Going forward, we expect sales and marketing expenses to increase as we participate in more industry events and host customer events globally. An example of this investment was the Analyst User Conference we held in October. So turning to the bottom line, we posted non-GAAP net profit of $1.6 million, up over 50% from the prior quarter. Non-GAAP earnings per share in the quarter was $0.05. Shares outstanding for the second quarter – pardon me, shares outstanding for Q3 were 32.4 million, which reflects our share repurchase during the quarter of 161,000 shares. Now we’ll turn our attention to the balance sheet. Cash at the end of the quarter was $100.3 million, an increase of $13.5 million from the prior quarter, and we have no debt. Our strong balance sheet provides a solid foundation for opportunistically executing acquisitions and funding organic growth. During the quarter, we successfully collected millions of dollars from a significantly delinquent customer who we had discussed last quarter. We’ve made changes to our credit policy that will not permit an outstanding AR past due amount of this magnitude to build up again. We also continued our stock buyback program and repurchased $2 million of our shares during the quarter. We generated more than $19 million of cash from operations with a notable source, as I just mentioned, being collections from a significantly past due customer. We also received significant payments from other customers that have been held up due to administrative issues that we resolved. We expect continued growth in our analytics bookings and expect IYR deals to continue to be lumpy quarter-over-quarter. So there may be quarters where the growth in analytics is offset by declines in gainshare or revenue for IYR. That concludes my remarks, and we’ll now turn the call over to the operator for any questions. Operator?

Thank you, Ms. Russell. [Operator instructions] Our first question comes from Christian Schwab from Craig-Hallum Capital. Your line is now open. Pardon me, Christian. Your line is now open. Please check your mute button.

Sorry, I did. Sorry about that. I was saying congratulations on the large collections during the quarter. My question has to do with IYR deal that you announced in China. I know you’ve had some debate and a while ago, we were really optimistic that, so that could be barge. And then we kind of decided we didn’t know. And then wondering if you could give us an update on the opportunity for IYR in China, as well as, if there was a typical gainshare arrangement with that as well?

Yes. Chris, thank you for the question. We have seen continued interest, particularly in this last, I’d say, three or four months of advanced notes in China. We know the number of foundries being – existing foundries and new foundries, with activities in 14-nanometer and below. This was the customer, we’ve had in the past that we’ve had a good response with. They are completing their previous node and are just about getting to volume and other starting the next node. The contracts with them in the past have had gainshare associated with them. This is a startup contract that we anticipate gainshare with it as it continues. We are, as Christine said in her prepared remarks, we’re being very careful about the margin – gross margins on the upfront part of the business. Because still, the volumes have been very slow to materialize there. And we do believe that while over the long-term, on a five-year horizon, volumes will materialize over a short-term, it’s difficult to say. The gainshare contracts typically are between five and 10 years in China for us. So, we anticipate seeing gainshare out of these contracts. It’s just very hard to forecast them in the short-term. So, we thought it wise to take a little bit more on the gross margin upfront and manage it that way. And we’ll look at it on a case-by-case basis. There are a number of foundries being started that, it’s questionable though long-term viability.

Great. How many customers do you have in China?

Well, I don’t know, we would have to get back to on that, Christian, but it’s a – there’s a handful, not significant. And then there’s a number of smaller ones. I think, overall, China is a meaningful part of our revenue on the order of 20%.

Great. Thank you. Congratulations on a solid quarter. No other questions. Thank you.

Thank you. [Operator instructions] Our next question is from Gus Richard from Northland. Your line is now open.

Hi. Thanks for taking the questions. Just on the placement of the new eProbe 250. I was wondering if you could give us any updates on your expectation on getting more of those into the market.

Yes. So thanks, Gus. So this – as I – the one we announced this quarter was actually 150 that we put shift in Q3 and installed, and is up and running now. We are preparing to be able to ship a 250, probably at the end of this year or into next year. Probably – and that would be our second 250 in the field. We have a handful of 150s in the field now at this point in two or three.

Okay. And the customer in China that’s taking the $250 million. Is this an addition for that customer? I’m sorry, 150.

No. This is a new tool for – it’s a new customer for DFI.

Okay. Got it. I understand. And then just on the analytics business, do you expect the bookings momentum that you recognized in the third quarter to sustain itself into the fourth quarter at similar levels?

Yes, we do. We are not – if you listen to Christine’s prepared remarks, the difference between the ARR revenue and analytics, and the total revenue and analytics, there are a lot of pilots that have been ongoing, where we’re doing test deployments on the cloud. We’ve been getting very positive feedback for the customers that attended our user conference. One of our larger fabless customers made a presentation of the conclusion of their benchmarks, which for the very largest files, just ingesting data; it comes to on the close of 26 times faster than an on-premise deployment with a conventional relational database. So, those pilots are concluding quite nicely, and we anticipate continued conversions of those in the fourth quarter, not into Q1. And there’s new pilots starting up, right, there’s a continual flow of them.

Okay. That’s it for me.

Thank you. Our next question is from Tom Diffely from D.A. Davidson. Your line is now open.

Yes. Good afternoon. Another question on the 250. If a customer was to order a system, how long – what is your manufacturing lead time, how long would it take for you to ship and install a tool at their facility.

Yes. Tom, it’s fairly variable right now, because we have two in our lab for really development, and we are assembling a fourth one, which we expect to be finished at the end of this year, beginning of next year. Once we’re out of that and then it takes a number of months, even though we have the parts for additional machines or some of the parts. When you get out beyond that number, then it actually starts picking upwards of the year. So in the short-term, it’s not a big deal; in the medium-term, it’s a bigger deal. But just like earlier this year, we ordered some parts, long lead items to manage that down. We tried to manage our risk reward by judiciously ordering long lead items to balance the upside versus our cash outlay.

Okay. And do your customers give you fairly good visibility into the timing of projected orders?

To some extent, yes, but I mean, I think that’s still something that’s an evolving thing for us. I wouldn’t say it’s great at this point. We’re still working on that.

Okay. And then looking at the old historical gainshare business, how long is the tail for the 14-nanometer work that you had done a few years ago? And have you seen any new activity with the existing customers working on the older nodes, different flavor of an older node?

Yes. So that’s – I can’t answer that question. It’s a couple-part question. So first part is, we have 14-nanometer contracts set in, in the next couple of years, and we had one that go out into the remainder of this decade. So, I’m – really, for the next decade, the 2020s all through 2029. So, there’s a variety of them. And particularly, as you get out into the mid-20s, most of the leading-edge contracts that are left will be primarily in China. For the More-than-Moore nodes that’s really one of the ones of the contracts I described this quarter, which was prescribed vehicle, the tester and Exensio for controlling our More-than-Moore technology. That’s really been picking the CV technology and converting it to a subscription, because what the customer wants to do there is test every wafer with the described capability and make a control and Materials Review Board control decision on the fly. So, it’s really leveraging the real-time capability of Exensio, but extremely headfast testing capability of the CVi test vehicle on the tester. So, for our customers that are existing – have been longtime customers that are interested in using our vehicles from technologies that are already in production, we’ve moved from a time to volume to access to the data model. I think in our Analyst Day, Christine had a chart on that, just saying, selling time to volume to selling access to data. And that contract that we signed last quarter was an example of that. We actually had on our user conference, a couple of customers that showed the benefit of using a combination of vehicles and Exensio on what they will to do from a production control standpoint. So, we’re starting to see more and more traction that way, but that’s showing up in our analytics line.

Okay. And then so if I read your comments about past the mid-20s, China becomes a bigger portion. Does that mean you have a fairly good string of gainshare through the mid-20s?

Yes, I’d say it’s always very difficult for us to forecast out. Over the next couple of years, we feel pretty good about gainshare. As you start getting out into the like, 2022, 2023, 2024 timeframe, you got to start believing in China at some point. And like I said, when Christian asked the question, we do really believe that our Chinese customers will go to volume. But the geopolitical world is quite choppy, and it’s difficult to see how that really – what really happens over the long term, when did that go.

Okay. And then finally, have you seen any – or had any conversations that might restrict what you can do or provide to your Chinese customers?

No. None whatsoever.

Okay. So, the technology that you’re providing is not considered...

Yes. So, for most – I mean, the biggest issue is done around fabless and system company from the U.S. government standpoint, but our Exensio product is developed outside the United States and not subject to U.S. export restrictions. We have – what’s developed here in the States, predominantly developed here in states is our electrical test capability and our DFI machines, and those are primarily provided to foundries, for which none of them have been put on our restriction list for us yet.

Okay, great. That’s good to hear. Thank you very much.

Thank you. Our next question is from Jon Tanwanteng from CJS Securities. Your line is now open.

Hey, guys. Congrats on the great cash performance. How much of these solutions – how much of the solutions revenue in the quarter was catch-up recognition from the client you’re in dispute with and collected the cash from?

None. That was just the cash balance sheet, not on the...

It was only cash. Okay. Great. Okay. And then can you, John, clarify what you said in your outlook for Q4? You said it would look pretty similar. Was that referring to the total, just revenue and profitability? Or are we talking just about analytics or solutions, which portion did you mean?

That was just overall bookings expected this elevated level to continue into Q4. In terms of how you convert bookings into revenue, there’s always many pieces there. And I guess, kind of above my paygrade, and this is the finances we’ve done. But from a booking standpoint, I usually comment on the customer activity and Christine comments on the revenue and profits. From a bookings activity, I think we see it to remain quite strong. I suspect that means small improvements in the overall analytics revenue. When you look at gainshare, it’s always choppier to understand how that’s going to progress quarter-over-quarter.

Yes. And what I will add to that is that, as you saw at our webcast for the Analyst Day, while the analytics revenue is increasing, sometimes that increase can be masked or hidden by the decline in the IYR business. So, I think John’s comments are overall for a quarter with similar bookings, kind of similar everything.

Yes. So, just a little bit more color on that, Jon. So, if you look at Q3 over Q2, Q2 had a $7 million gainshare quarter; and Q3, I think, was $5.7 million or something like that. Yes, we still grew the overall revenue in spite of that headwind, right, partly because of the strong analytics business. We expect strong analytics business, again, this year – this coming quarter. Of course, we have less visibility on how the gainshare works out.

Okay. Fair enough and thank you for the color. John, can you comment on the – and this is just announced today, so maybe, a bit early, but the new semiconductor investment fund in China. And kind of how did that flow through to you the first time around? I know you saw a benefit, most of it in your solutions business. Could something similar happen to you, again, and how would it actually show up in either gainshare or solutions or analytics or IYR at this time around?

Yes, it’s really – that’s a great point to bring out. Yes, we are familiar with the second fund, and we do believe that will improve overall the semiconductor activity in China. And as a result, we expect to participate in it. Again, it’s focused on manufacturing. And we have a lot – we’ve seen already a lot of discussions with newer companies, some of that are being started that are creating new foundry-type businesses. And we expect that’s going to create an opportunity for us. We also, this past week on the 28, had a user conference in Shanghai, where we had over a 100 users from 50 companies attend. And we announced Exensio on the cloud, primarily using Ali Cloud for the very long tail of fabless customers, right? Today, depending on who you talk to, there are somewhere between 1,500 and 6,000 fabless entities. We don’t believe the big fund so much age those companies that are getting money from other places, not so much the big fund. But the big fund is creating an ecosystem of manufacturing and test and assembly in China that those companies are going to enjoy. And we had tremendous response to that conference, not quite as large as our conference here in San Jose, but our conference in San Jose pulled from around the world. It was meaningfully close in just one city. And so we have a number of activities going on. We’re including a premium version of Exensio on the cloud for the very smallest customers to capture that long tail of fabless entities, and we think that also supports over a longer period, our foundry customers there in China. We think the largest challenge for our foundry customers after building and bringing up technology is really working out the kind of the hiccups between the fabless product and the technology yielding. And there, we think PDF is quite helpful for that as we’ve seen in many places. And also, it could be helpful and then even just marketing their capability to their customers.

Okay, great. That was really helpful. Final one for me, Christine, just the – you mentioned the increased expenses and then John, maybe, I think you touched on this too, for doing events like that and the conference here in the States. How should we model that in terms of what those actually cost you? And there are companies that do annual conferences, and they’re pretty predictable. I’m just wondering how we should figure? How many of these are you doing, how much that will increase your marketing expense play?

Yes. I think you should figure that we will be increasing SG&A, certainly by several hundreds of thousand dollars in future quarters as we deploy our marketing events as we reach out to technical conferences, do white papers. So, we have a full press marketing presence now.

Okay. And is that from the run rate in Q3? Or should we be using some other base to get to...

That would be from the run rate in Q3.

Okay. Got it. Thank you.

Thank you. Our next question is from Gus Richard from Northland. Your line is now open.

Jon discussed the first part of it. Let me ask the second part of it. And thinking about R&D expenses moving forward, it had a pretty big step-up sequentially. Should we be thinking about that running flat or sequentially and just any color for next year would be helpful.

Yes. Since we do have the expenses in R&D in Q3, for the Amazon Web Services, and for other analytics-related hires, I think you should think about that going forward as kind of flattish?

Okay, okay. And for next year, sort of a similar year-on-year increase, maybe in dollar terms versus 2019 over 2018?

Yes, I think that’s – we’re working on our 2020 model. As we get out to Q4, we’ll probably communicate a little bit more about that. If you just look at overall 2019 versus 2018, we actually took spending down, but we did increase some line items. We increased the R&D right line item, and we increased the SG&A line item. We took down cost of sales quite a bit. We’re going to go through and re-plan all of this. And then I think as we get through this quarter, our strategy meeting is always in December with our board. Our operating planning meeting is really basically happening over the next six weeks. We’re being a lot more thoughtful in giving you folks, guidance as we get out through this year than right now. For sure, different items, they’re going to go up, but some things are going to come down. And as you know about us, we’re very mindful about our costs.

Got it. Thank you so much.

Thank you. At this time, I’m showing no further questions. I would like to turn the call back over to Mr. Kibarian for closing remarks.

Thank you, everyone, for joining us on this call. We look forward to talking with you again soon. Bye.

Ladies and gentlemen, this concludes the program. Thank you for joining us today.