Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the PTC 2020 Third Quarter Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. I would now turn the call over to Tim Fox, PTC’s Senior Vice President of Investor Relations. Please go ahead.

Thank you, Valerie and good afternoon, everyone. Thank you for joining PTC’s conference call to discuss our third fiscal quarter financial results. On the call today are; Jim Heppelmann, Chief Executive Officer; and Kristian Talvitie, Chief Financial Officer. Before we get started, please note that today’s comments include forward-looking statements including statements regarding future financial guidance. These forward-looking statements are subject to risks and uncertainties and involve factors that could cause actual results to differ materially from those expressed or implied by such statements. Additional information concerning these factors is contained in PTC’s filings with the SEC, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. As a reminder, we will be referring to operating and non-GAAP financial measures during today’s call. Discussion of our operating metrics and items excluded from our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP financial measures are included in our earnings press release and related Form 8-K. Lastly, references to growth rates will be in constant currency, unless otherwise noted. With that, let me turn the call over to Jim.

Thanks, Tim. Good afternoon, everyone and thanks for joining us. I hope you and your families continue to stay safe and well during this crisis. I’d also like to thank the extended global PTC team for their continued hard work and commitment during this time of disruption. Before I jump into a review of our quarter, I’d like to briefly reflect on the Coronavirus crisis, and review the headwinds and tailwinds that’s been creating for our business. In terms of headwinds, we all know that the COVID-driven economic downturn is creating profitability and even business continuity concerns for many companies around the world. Naturally, some of the affected companies are PTC customers and prospects. The second major headwind is the travel bans and work from home requirements, which slows down selling processes and interferes with on-site project work. As a result of these headwinds, we’ve seen pressure on bookings and some purchases get pushed out. Fortunately, to-date, the pressure has been somewhat less than we discussed in our guidance commentary last quarter. Our Q3 bookings were down mid 20% year-over-year, which is slightly better than the expectations we shared of down 30% to 50%. Based on the current forecast, we expect Q4 bookings growth rate to improve sequentially. The impact on renewal rates continues to be muted and we believe our previous guidance, suggesting a modest downtick and renewals remains an accurate assessment. So in aggregate, at this point, we think that the COVID crisis will continue to be a major headwind, but perhaps less so than we guided to last quarter. I’ll remind you, however, that this situation remains very dynamic. And we don’t have a crystal ball to see what lies ahead in the future. Like everybody else, we’d sure like to see a vaccine become widely available.…

Great, thanks, Jim and good afternoon, everyone. Before I review our result, I’d like to note that I’ll be discussing non-GAAP results and guidance, and all growth rate references will be in constant currency. Let me start off with a brief review of our third quarter results, and then spend the balance of the call on our outlook for the remainder of the year. Q3 ARR was $1.21 billion, representing 10% year-over-year growth at constant currency, which was slightly above the guidance commentary we provided last quarter. The upside was driven by solid new ACV bookings, and only modest deterioration in churn which came in essentially in line with our forecast for the quarter. Q3 revenue of $352 million was up 20% year-over-year, driven by 28% recurring revenue growth. As we’ve discussed previously, revenue is impacted by ASC 606 and related business policy changes. Operating margin of 29% increased approximately 1,200 basis points over Q3 ‘19. And lastly, non-GAAP EPS of $0.62 increased almost a 180% year-over-year. Q3 free cash flow of $99 million was ahead of our expectations, driven primarily by the timing of collections, lower than allowed for customer concessions and lower than planned expenses such as travel and the virtual LiveWorx event. I think the key takeaway here is that even in the current macro environment, customers are clearly getting value from our solutions and paying largely on time. Moving on to our balance sheet, following the redemption of the $500 million of 6% senior notes in May, we ended Q3 with $1.1 billion of debt, including $1 billion of senior notes with a weighted average cost of debt of 3.8% and $138 million outstanding on our credit facility. We ended Q3 with cash and marketable securities of $435 million. We believe this is a very attractive…

Thank you. [Operator Instructions] Our first question comes from Matt Hedberg of RBC Capital Markets. Your line is open.

Well, hey, guys. Thanks for taking my questions. Hey, guys. Glad you’re all doing well. And it’s great to hear your voices again. Jim, I think what really is intriguing me and I started to dig into it a lot in some of the work that we’ve been doing is, you guys leveraging Atlas, which I think is obviously one of the crown jewels of odd shape. You noted in your prepared remarks working on a SaaS version of Creo and Windchill and you said, you know, it’s still an ongoing process. I’m just wondering, could you provide a bit more detail on there and how you think about the timeline for that rollout? And how, you know, existing customers might leverage a SaaS version of Creo and Windchill?

Yeah. Well, Matt, good catch there. Because, you know, I think it really is ultimately a very large opportunity. But let me be clear, it’s kind of a mid to long-term thing, because we’re really looking at doing kind of a major redevelopment of those properties onto this platform. And You know, the key thing for us would be to optimize for compatibility and continuity. So I sort of – I have an analogy I’ve shared internally many times and probably help with investors as well. You know, if you think of Google Docs, it’s a completely fresh thought, fresh look at, let’s say, Office Productivity Suite. Meanwhile, you had Microsoft Office, which was on-prem. But Microsoft came out with Office 365, which was SaaS, and companies like PTC might have been thinking about whether or not we should go to Google Docs. I mean, many, many do, and particularly new companies, but as companies who have been using Office forever, really do prioritize compatibility of data and user experience, but we like to have SaaS. So you could imagine we could build a product that looks a lot like Creo. But it runs in the cloud and is multi-tenant, but you open up your same old files and you go right back to work with the same old user interface, much like you did with Office 365. Meanwhile, Onshape’s over here are more like Google Docs, unbridled, unconstrained innovation, no legacy, trying to invent the next generation of application. So I think Onshape fights the fight against competitors and Atlas allows Creo and Windchill to bring their customer base with. Again, it’ll take us, I’m going to say a couple of years to do this. You know, I partly tell you, because it’s part of our commitment, I really…

Thanks a lot, Jim.

Thank you. Our next question comes from Saket Kalia of Barclays. Your line is open.

Hey, Saket.

Hey guys, thanks. Hey, Jim. Hey, Kristian, thanks for taking my question here. Jim, I actually maybe want to pick up on that last item that you just mentioned with Windchill and just PLM broadly. You know, can you just talk about that strength in PLM, ARR? You know, is it related to that digital transformation? You talked about a secular wave and PLM again? Is it market share gains? And how do you sort of think about that going forward?

Yeah, I think, you know, when I talk to my sales team, and when I spend a lot of time with customers, I think that, you know, in the past PLM followed CAD around, now it’s starting to follow digital transformation initiatives. And what really happens there is, industrial companies say, how could we think about, you know, taken ourselves through a digital transformation that didn’t involve digital product data, you know, being under control and well managed and so forth. So I think like the Navy example, it’s got nothing to do actually with engineering. It’s about a model driven, you know, operation and support paradigm. And it’s got nothing to do with following CAD around. It’s really about how do you use that data to transform the way products are operated and serviced and supported, you know, during the lifecycle out in the field. And that’s a great example of the kind of initiatives we’re hearing more and more about, as people saying that product data could be useful for a lot more than engineering. And if we want to try to do that, you know, this digital threat discussion, reuse it for manufacturing, reuse it for service, potentially use it for sales and marketing. If we want to do that, we got to get it under better control. And Windchill excels at that, you know, it’s already a SaaS and web-based system. And it differentiates well, you know, every single Magic Quadrant report you’ve seen in years Windchill’s way up front, in terms of its, you know, competitiveness, let's say. And I just think that digital transformation has become a real driver.

Got it, makes sense. Thanks, guys.

Thank you. Our next question comes from Andrew DeGasperi of Berenberg. Your line is open.

Thanks for – hi, how are you? Maybe just one or two questions. The first on Q4 ARR, I was just wondering in terms of the makeup of that guidance. Can you maybe elaborate a little bit how much of that is based on ramp deals versus brand new booking?

Well, as we’ve said numerous times before, we’re not getting into the specifics around that just but we do have a fair amount of visibility into the ARR. Again, it’s our largest bookings quarter of the year, which does make it a little bit harder to call around the – you know, the line of start dates and how much is actually going to come in this ramp deal. But from a fundamental, you know, how much business are we selling out to the market perspective, I think we feel pretty good about the, you know, about the prospects for Q4. And we feel good about the, you know, the ranges we’ve put out with those caveats.

Yeah. And maybe just to add, Andrew. I mean, clearly, Q4 has forever been a seasonally strong quarter for bookings. And so it’s natural that it would be a seasonally strong quarter for backlog as well. So, you know, we start Q4 with kind of seasonally high backlog. And then we’re going to – and some of that new bookings will land in the quarter and some of it will go back in the backlog. So again, what Kristian saying is, the real risk here is calling the timing of it, because how much of the new bookings lands in backlog versus in the quarter? I mean, that’s actually important to the way we report, although it’s actually not important to the – how well the business is doing. You know, the important thing there is, how much business do we go get? So I’d say seasonally, high. But we don’t really want to get into the details and percentages of it.

That’s helpful. Just quickly on Onshape in terms of the channel, and how much you've essentially leveraged that, I mean, as at this point is it completely out there or is it just a select few that have been able to sell it? And if given the success, would you consider accelerating that process?

Yeah. So it’s a couple of dozen right now, but it’s a couple of dozen of the best ones, biggest investment. So what we did is, we said, you know, we have hundreds and hundreds of channel partners. But you know, there’s definitely a kind of a tail, let’s say to that. So let’s start with the biggest best ones, the ones who are in best position to invest in new sales capacity, because they’re still selling Creo and, and let’s go ramp them up and see how it goes. So we started that last quarter. And by the way, we thought we would do this someday. But COVID convinced us we should do it right now. Because we just saw the pipeline just blossoming. And we said, you know, we just don’t have the capacity to execute on this. And there’s probably a lot more business that we’re not even finding. So, you know, that’s what we’re doing there, we’re taken a couple of dozen of our biggest and best resellers. They’re ramping up incremental new capacity. And they’re selling Onshape kind of into the lower end segment of the market, typically against SolidWorks. And they’re continuing to sell Creo kind of that’s slightly bigger and more sophisticated customers who, you know, for whatever reason really need that more advanced functionality of a higher end product.

Thanks, Jim.

Thank you. Our next question comes from Adam Borg of Stifel. Your line is open.

Hey, guys and thanks for taking – hey, guys thanks for taking the question. Just a real question on OpEx as I think beyond this year, obviously I’m not looking for guidance, but you guys have done a great job this year, you know, limiting OpEx spend. Some of that is one-time in nature, some of that is expense discipline. How should we think about OpEx grows more qualitatively going forward just given the opportunities that you’re talking about and the attraction you’re seeing? I know we’ve talked in the past about OpEx going at half the rate of ARR. I’m just curious if that thinking has changed? Thanks so much.

Yeah, great, Adam. Good, good question. You know, I think as a general rule of thumb, I think that’s the right way to think about it. And that’s, you know, certainly where we, you know, start with our planning process and we’re in the middle of the planning process right now in any given year, we may, you know, flex that up or down. But over the longer-term, that’s definitely the, you know, the starting point. But again, it can fluctuate a little bit depending on timing and opportunities we see in front of us.

Great and maybe just a quick follow-up. Any comments on just recent business trends in July versus what you’re seeing in June? Thanks again.

All I would say is the quarter. You know, I was nervous as we came to the end of the quarter. And it was surprisingly not that stressful. So the quarter ended without a lot of fireworks and without a lot of angst and so forth it was actually quite relaxed. So that just tells me that it didn’t get worse. It probably held together and you know, gives me more confidence looking at the Q4 forecast.

Thanks again.

Thank you, Adam.

Thanks, Adam.

Thank you. Our next question comes with Tyler Radke of Citi. Your line is open.

Hey, thanks for taking my questions. I wanted to ask about the growth business, obviously, the ARR decelerated there and I think, you know, you call out some headwinds as it relates to, you know, selling some of these new IoT deals into customers, you know, where you have to be on site? I guess, how are you thinking about the trajectory of the growth ARR? Is this kind of the trough? And would you expect that to accelerate next quarter with the, you know, just overall ARR expected to reaccelerate? And then, you know, in regions, whether it’s China or Europe, you know, that are further along the reopening. Are you starting to see any signs of those IoT deals starting to pick back up just as things start to reopen? Thank you.

Go ahead.

Yeah, sure. Tyler, good question. You know, again, you know I think that the demand environment still remains a little bit challenging out there. So we’re mindful of that. That said, echoing Jim’s comments earlier, we do have committed backlog, if you will, of ARR coming into Q4, so we would actually expect to see fairly solid ARR performance for the growth business in Q4, just given some of that visibility that we have. Over the longer-term, you know, start looking into next year. I think that part’s still open.

Yeah. And let me, maybe just say in Q4, you know, Q4 is always for us, a seasonally strong quarter. You know, we have a hockey stick in Q4. And we’re telling you, we expect Q4 to be down less year-over-year than Q3 was, which means they’re going to go a good step up. And it’s not possible to achieve a good step up in bookings without IoT playing a major role. So there’s a lot of IoT business in our Q4 forecast, certainly a sequential step up. And at the same time, you know, we feel like we’re applying some conservatism there. So what I would say, Kristian said there’s problems in the demand environment, I’d actually say there’s problems in the closing environment, because the demand is high. And so what we need to do in Q4 is called the right close rate. And I think in any case, we’re going to have a sequential step up that’s quite interesting, you know, in the IoT business, and therefore, this probably would be the trough in the in the growth rate of the growth business, ARR growth rate.

Right and then are you just seeing any type of demand differences in regions that are opening up faster than others?

Well, we have seen China, as an example, has continued to accelerate, which is, you know, good. That’s both a function I think of their economy opening back up a little bit as well as, you know, our subscription model. Customers getting more comfortable with the subscription model in that region as well. You know, I think on a geo basis, we are looking for continued strong performance in Europe and Americas as well, but on a, you know, growth percentage, I think APAC would be the leader.

Okay, thanks.

Thank you.

Thank you. Our next question comes from Jay Vleeschhouwer of Griffin Securities. Your line is open.

Thank you, good evening. Hey, Jim, let me start with you on a technology question referring back to LiveWorx last month, the most valuable part of the conference so the various roadmap sessions for the various products, and was good to see that you’re right hearing to the release cadences, particularly for Windchill and of course for Creo. The question I have is, when you think about the upcoming releases that it just hit in December and June next year, what do you think will be the most incremental or catalytic, new features and capabilities, I’m highlighting PLM, because that’s where I think a lot of the flux is technologically and in terms of the end markets. So when you think about that, what do you think could be the drivers? And then additionally, how are you thinking about the incremental effect possibly of the new Creo ANSYS simulation product for the higher end product that coming out with in the fall?

Yeah, let me take the second question first. I mean, there’s two things simultaneously happening in our relationship with ANSYS. One is, we’ve seen a nice pickup in the first wave of the Creo simulation live. And then as you point out, we’re coming out with another wave of capability around the mainstream simulation suite that is called ANSYS AIM. So, you know, while we’re getting momentum, we’re also now going to broaden the portfolio. And I think we’re optimistic about that. You know, PTC does have some capacity to sell simulation, we just decided we’d rather sell with ANSYS then against them. So I think we have a best-in-class simulation suite now within our CAD environment. And there’s customers certainly are interested in that. So I think that ANSYS partnership will continue to gain traction accordingly. And then, you know, on this Windchill thing, I do think there’s two big things we’re working on right now. And without getting deep in the details, responding to this digital transformation moment, is one of them. And then, although it won’t ship in the near-term, you know, beginning to think about how do you go to a multi-tenant SaaS version or Windchill. We do sell Windchill and SaaS today, but it’s single tenant. And what that means is that we don’t have all the upgrades – all the benefits of regular upgrades, you know, every three weeks, the whole basis is upgraded and so forth. But we’d like to go tackle that problem. We’d like to do I because it represents incrementally more value to the customer. And it represents incrementally more value of the PTC. I mean, frankly, less wasted energy by everybody. Now, in the meantime, some of the things we are working on is even while it remains single tenant SaaS, we could do a lot to make the cost of ownership lower, which would benefit PTC when we provided the SaaS and benefit all those, all those customers who take it as on-premise. So I’d say again, those two things more related to responding to digital transformation moment. And that includes integration with IoT and integration with the Vuforia Suite and stuff like that. And then, you know, preparing both tactically and strategically for a better SaaS future.

For Kristian, how do you think the contribution from your partners, the total number, so to say that you get from them might evolve? If it’s x today? Where do you think it might be 2, 3, 5 years from now and Microsoft has been very vocal in just the last couple of months about their commitment to the manufacturing market. They highlighted you. There are multiple use cases they’re increasingly looking at, generally, but with what you do as well tied in. So when you think about all your partners, how does that footprint or ecosystem, whatever you want to call it proportionally, become more important to you?

Yeah, well, great question, Jay. I think that the, you know, the partner economy is extremely important to PTC. And, you know, that includes the more traditional partners as well as some of the more strategic as we call them alliances we’ve had recently –

And that’s the role in the global system integrators.

Global system integrators, but you know, again, Rockwell, Microsoft, you know, ANSYS as well. And so, you know, as we look out over multiple years, you know, I think that there is, you know, historically, let me say it this way, historically, the channel contribution has been, you know, mid 20s to kind of 30% of PTC’s overall business and as we look out over multiple years, we think that the opportunity for that is, you know, certainly to push, you know, the high 30s, approaching 40% of the, you know, approaching 40% of the business, you know, over a period of time.

Thank you.

Thank you, Jim.

Thank you. Our next question comes from Andrew Obin of Bank of America. Your line is open.

Hey, thanks a lot. Just a question on Onshape. You know, you guys sort of highlighted that revenue in the quarter was in line with expectations. We’ve been hearing through channel checks that actually COVID locked down the fact that everybody works from home are actually stimulated a lot of demand for the product, a lot of interest. Do you see sort of the growth trajectory for Onshape being meaningfully impacted post-COVID of the next several quarters that we can notice from the outside?

Yeah, my view, Andrew is that two things are happening simultaneously. Some deals are being blocked, because companies are themselves in crisis mode and that tends to be larger deals. So there’s a headwind for sure, slowing actually down. But then is this tailwind, bringing in more deals that would not have, if not for COVID, probably wouldn’t have been in the forecast, meaning people are talking to us about because of COVID, I’m talking to you. And so we think right now, the headwinds and the tailwinds are cancelling each other out. And we’re basically on plan. However, we think at some point, when the economic fear subsides a little bit. I mean, companies going out of business, don’t buy any software from anybody. But when they stop worrying about going out of business, and they start thinking about going back to business, then we think there’s just the tailwind. And so the real answer is that, PTC has far more confidence in the future of Onshape than with the day we pulled the trigger on the acquisition nine months ago, we just feel like it was a great move both as a CAD tool, and then really something special in terms of this Atlas architecture that’s going to help us in many ways.

I mean just a follow-up question on-site access. Do you see any material improvement in July over June?

Again, our quarter is back-end loaded, okay. So we don’t close near as much business in June as we do in July. So for us, the risk would be that we didn’t close the business in July, but we did. Actually we landed our forecast came in above the guidance range we gave you. And so to us, July was certainly not worse than June and potentially better, because a back end quarter close more or less as expected.

Thank you very much.

Thank you. Our next question comes from Ken Wong of Guggenheim Securities. Your line is open.

Great. Thanks for taking my question. Just one for you, Jim, you touched on this Navy deal potentially $25 million 5 years out from now, I guess how should we be thinking about the potential slope of that transaction from a ramp perspective? And then as we think about other areas of defense, is it fair to assume that this is something that could potentially map over to kind of other departments?

Yeah, okay those are both good questions. So first on the slope, let me just be clear, what we have is a pre-negotiated set of annual expansion options. We’re not calling it a ramp, because they’re not committed, they’re options. Okay, so think of it like a ramp, but without the commitment, therefore, none of it’s in backlog, none of it’s in ARR, none of that stuff. It’s just out there. But they’re pre-negotiated and it’s a pretty steady ramp that would get us from the initial deal, which by the way, the Navy disclosed some information on this. So I’ll tell you, they disclosed that they had set aside $97 million for this contract. And they also disclosed that the first order was a little over $3 million. So think that we got a $3 million ACV order and there’s a series of additional orders, if you added them all together over all the years, you know, plus a little bit of services gets you to that $97 million, they’ve set aside for us. Now, again, just to be clear, we – the project needs to go well or you could imagine scenarios where we don’t get that full ramp. Now, your second question.

So just to clarify on that, the first two years are in that 3, 3.5 –

Okay, first two years and then 3.5, right. Fair enough. So two years upfront and then a series of expansion options. Thanks, Kristian. Now, first of all, the Navy doesn't only have ships, they have airplanes. And so there’s Nav Sea, which is the deal we want and there’s there's Nav Air and it’s completely logical that the Navy would use the same system for the airplanes and that would, you know, potentially double it. But then absolutely, we’re going to go pitch the same story to every other branch of the military who operates all these assets and really see if we can't get others to follow so. We think we have something special there. But you know, we’re not going to call anything right now other than put that in the category of the digital transformation tailwind for PLM, because this is not engineering in CAD, it’s digital product models under configuration management, for purposes of operations and support.

Got it, well thanks for the detail. And actually maybe a follow-on, I guess beyond defense. I mean, it sounds like this is something that could potentially map out to kind of other end markets. Is that a fair statement? Or is this very defense-specific?

No, no, no it’s not defense-specific at all. In fact, they’re deploying commercial off-the-shelf software that we actually developed for initially for non-defense customers. So we’re certainly engaged in similar discussions with other customers. And in fact, if you go to the LiveWorx event two years ago, some of you might remember, I was doing a configuration managed augmented reality inspection procedure against the Volvo truck engine. That’s actually the same story, just a particular use case of it. So this definitely could go elsewhere. It’s just of course these military commands operate such large numbers of assets of such high value that they’re you know, really, really interesting if you can win them.

Great. Thanks a lot, guys.

Thank you.

Thank you. And our final question comes from Rich Valera of Needham & Company. Your line is open.

Thank you. Thanks for fitting me in. Jim, a question for you on IoT. If you can put aside the logistical issues with deployment right now, I just wanted to get your sense of where that product is and its lifestyle – lifecycle in terms of adoption. And the things you’ve done specifically to facilitate adoption to reduce the friction and getting customers to adopt it. I know you just rolled out kind of insights as a service, which I think is one of the things in that sort of ilk. And you’ve also been working on sort of, I think, more templates to make it maybe more shrink wrapped and less customizable. But if you could just talk us through where that product is in its lifecycle and if you think there’s kind of an inflection somewhere down the road as you all these things sort of coalesce to make it more of a final product, as opposed to, you know, custom deployment.

Yeah, and I think that’s a great question, Rich, because I think the product has matured quite a bit as a great platform to develop and run IoT business applications, okay. But what we’d like to do is have more than pre-developed exactly as you said. We’d like it to be a solution in a way that has the platform in the background if you want it, but you’d really rather buy the solution. You know, I kind of in the industry example that’s a bit dated would be like salesforce.com and force.com. You know what I mean? Like force.com is there, if you bought salesforce.com, but most people really would focus on the CRM system or what have you. So just thinking about that for a minute, we’d like to have more value-oriented, outcome-based solutions that are ready to go. And that’s been a big focus at PTC, we hired a new executive to run that about a year ago now, Craig Melrose you know, a longtime McKinsey manufacturing expert. And so the reason I really like Craig is, he looks at it from a value standpoint. Hey, Mr. customer, what problems do you have? And what value could be created by solving those problems? And then we want to come and say, we have a solution that does exactly that. Let’s not talk about developing anything, it’s ready to go. So that’s what we’re aiming for. Again, I think at the platform level, we now have a very mature system and really we’re focusing now on the solutions. This factory insight as a service is a down payment. But I think you know, in the next one and even two years, you’re going to see us roll out a whole series of very interesting solutions that will change the way we sell. We’ll go back to selling Enterprise Solutions built around the concept of IoT as opposed to an IoT platform you could use to build the Enterprise Solutions, which is kind of the world we’ve been coming from.

That makes sense. Thanks for that clarification, Jim.

Thanks, Rich.

Thank you. Ladies and gentlemen, that does conclude our Q&A portion. I’d like to turn this call back over to Tim for any closing remarks.

Thanks, Valerie. And again, thank you, everyone for joining us today. We will be participating in a number of virtual events coming up this quarter. You can find all the details on our investor website. We look forward to seeing you on the conference circuit in the coming months and again, thank you for your interest in PTC and we all hope you have a great evening. Take care.

Thank you.

Ladies and gentlemen, this does conclude today’s conference. Thank you for participating. You may all disconnect. Have a great day.