Radware Ltd. (RDWR) Q1 2015 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the Q1 2015 Earnings Conference Call. At this time all the participants are in a listen-only mode later we will conduct the question-and-answer session, instructions will be given at that time. [Operator Instructions] As a reminder this call is being recorded. I'd now like to turn the conference over to host Mr. Roy Zisapel, President and CEO. Please go ahead.

Thank you. Good morning everyone and welcome to Radware's first quarter 2015 earnings conference call. Joining me today is Meir Moshe our Chief Financial Officer. Meir will start the call by reviewing the financial results and afterwards, I'll discuss the business highlights of the first quarter results. After my comments, we'll open the discussion for Q&A. Meir?

Thank you, Roy and welcome everyone to our first quarter conference call. First, I would like to review the safe harbor language. During the course of this conference call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are just predictions and that actual events or results may differ materially, including but are not limited to general business conditions and our ability to address changes in our industry, changes in demand for products, the timing and amount of orders and other risks, detailed from time to time in Radware's filings. We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's last Form 20-F filed on April 27, this year. And now ladies and gentlemen, for the financials. Revenues for the first quarter totaled to $57.2 million, representing 12% year-over-year growth. Non-GAAP gross margin remained at 83%, the non-GAAP net income this quarter was $10.5 million or $0.22 per diluted share compared to net income of $7.8 million or $0.17 per share in the first quarter of 2014. GAAP income, $2.2 million of stock based compensation expenses, $350,000 of amortization of intangible assets. $800,000 of litigation costs associate with IP litigation and $630,000 of exchange rates expenses bring the GAAP net income this quarter to $6.5 million or $0.14 per diluted share compared to net income of $4.1 million or $0.09 per diluted share in the first quarter of 2014. Non-GAAP operating expenses reached $36.6 million in the first quarter bringing other non-GAAP operating margin to 19%. The headcount for the end of this quarter was 925 employees. Following the buyback of $19.7 million of this quarter, our overall cash position including cash, short-term and long-term bank deposits and marketable securities amounted to $322 million and we have no debt. Shareholders' equity amounted to $325 million. The revenue is split between regions for this quarter. Americas accounted for 43% of total sales this quarter representing 15% year-over-year growth, EMEA 26% of total sales this quarter, representing 17% year-over-year growth and Asia PAC 31% of total sales this quarter, representing 5% year-over-year growth. Revenues split between carriers and enterprise, enterprise contributed 72% revenues and carriers 28%. In addition, as announced earlier today our board of directors has authorized a new share purchase plan of up to $40 million of our ordinary shares. The plan is for the period of 12 months. Guidance for the second quarter, we expect revenues to range between $58 million to $60 million, gross margin 83%, operating expenses will range between $37 million to $37.5 million, financial income at $1.3 million to $1.4 million, tax rate 13% to 14%, share count 47.5 million shares and non-GAAP EPS to range between to $0.23 to $0.25. As you can see, ladies and gentlemen, we continued our year-over-year double-digit growth and we expect higher and better results in the following quarters of 2015. And now, I would like to turn the call over to Roy.

Thank you, Meir. We're pleased with the results of our first quarter demonstrating consistent growth in both revenues and profitability. We continue to execute on our strategy with the following key points. First, continue to be very focused on providing a comprehensive integrated solution for data center application delivery and security. Second, lead innovation in the market, as it relates to data center attack mitigation, secure hybrid cloud and SDN, NFV application for secure networking. Third, we've increased our market footprint through traditional channels OEMs and alliances, as well as cloud and CDN channels. The first quarter was very busy for us in terms of the new product in solution introduction clearly demonstrating our progress in executing our strategy. I will cover some of the key announcements later on in remarks however the new defense for high end attack mitigation platform, our latest addition to our cloud security offering, the Cloud WAF. Our announced integration of both application security and application delivery with Cisco ACI and our alliance with Lockheed Martin, around cyber security are all significant examples of the progress we made. On the business side the Americas continued to grow with double digit growth as there are lower growth rate than we’ve experienced in the past. We continue to see North American revenues growing above market growth in 2015 which will be the fourth year in a row of strong market share expansion in this market. In the past quarter, we did not perform in South America which weighted down the overall performance of the Americas. EMEA posted very good performance and we continue to deliver our execution thee is improving and are encouraged by the results especially given the foreign exchange headwinds. One of the announcements we made was the integration of our Alteon and Defense Pro that’s into Cisco ACI. This integration to Cisco ACI fabric provides our customers with a fully automated ADC and DDoS service controlled and managed by Cisco application policy for structure controller. We’re seeing high level of interest from Cisco customers on this integrated solution and are expanding the used cases we can serve together with Cisco. Furthermore Cisco press release from yesterday on ACI and PCI compliance mention Radware as one of the six security ecosystem partner alongside Symantec, Inter Security and Check Point. On the product front, we believe a very important and existing announcement for us was the release of our new high end attack integration platform. The new DefensePro platforms offer up to 300 gig of mitigation capacity and handles 230 million packet per second of attack traffic while allowing to customers to enjoy the widest range of datacenter cyber attract defence in the industry. Beyond being the fastest and most scalable mitigation platform in the industry to the first dedicated attack mitigation product to offer 100 gigabit interfaces. We’re specifically design this platform for multitenant environment providing the ability to support up to 1,000 active policy of tenant with separate processing capabilities and reporting for each one. The new DefensePro is an excellent answer to address fast growing volumetric attack sizes, while at the same time its enables our [daily] customers to monetize their investment in security through our managed cyber protection service for their customers. We’re seeing a lot of interest in the market from carriers and cloud providers on monetizing these services. A good example is our latest announcement from BlackMesh. In the past BlackMesh which is our hosting and cloud provider implemented various chosen techniques to repeal attacks such as access controllers, cashing, filtering, et cetera. Despite these efforts they still experience service degradation as well as downtime that last between 45 to 60 minutes during each cyber-attack. Our attack mitigation system proved again its superiority in blocking live attacks without customer downtime. The strengths of the solution comes from our patent protected real time behavioral signature technology that detects and mitigate emerging network attacks, all without the need for human intervention and without blocking legitimate user traffic. Our security algorithms are far superior to the thresholds that limits our competition users, as the primary means to detect and block attacks, a method that is prone to false-positives by design and require constant manual intervention. Another important announcement was our hybrid cloud web application firewall. As part of our strategy to expand our cloud services we relieved a new cloud security offering that provides always on, WAF, IPS and DDoS protection for our customers. As integration to the Cloud continues and expand companies today faced the more distributed network infrastructure. This transition of web-based applications to the cloud requires organizations to protect their applications both on premise and in the Cloud. Our new offering the Hybrid Cloud WAF service is an industry first that provides fully managed enterprise grade web application, firewall, IPS and DDoS that protects both on premise and cloud-based applications using the single technology. In addition and leveraging the strength of our attack integration system our Hybrid Cloud WAF takes advantage of our auto policy and behavioral security technology dramatically reducing the amount of human intervention required to provide the effective cloud security. In the first quarter we saw record booking from our cloud and product subscription offerings. We believe we are progressing well on creating a new stream for Radware, complimenting and expanding our existing product and maintenance revenue stream. On the ADC side, we announced our LinkProof NG, a new enterprise gateway solution that extends service level assurance for on-premise and cloud application access over the WAN or internet connectivity. The LinkProof NG builds on the success of our patent protected LinkProof family of multi-homing load balances that allow our customers to ensure 24x7 availability of the WAN connectivity with optimized performance for accessing enterprise and cloud application. Our NG family of Alteon ADC switches provides full application SLA insurance, by offering dedicated virtual ADC instances per application, complete isolation between instances and innovative application services such as FastView application acceleration and APM application performance monitoring, these services which are offered and subscription services are further expanding the potential revenue stream of our offering. To summarize, we continue to execute in our strategy, we continue to deliver innovative solution for a constantly evolving cyber security landscape and evolving datacenter requirements. And we continue to steadily grow our revenue and profitability. We believe that our strong focus on cyber security and cloud solutions will enable us to continue these trends throughout 2015. Before concluding I'd like to also thank our customers and partners for their continuous support and trust, I'd like to thank the Radware team for all their efforts and commitment in growing our business. With that, I'd like to open the discussion for Q&A.

Thank you. [Operator Instructions] And our first question comes from the line of Alex Henderson with Needham. Please go ahead.

Hey, guys. So, I guess the first question I'd like to ask is can you give us some commentary on what the rate of growth was within your security business?

We're not breaking it out still. But if you assume that the ADC market is a single-digit -- mid-single-digit grower and you see our average growth; I think you can see this will growing quite strongly in security.

So reasonable to think it's well over 20%?

I'd guess so given an average of 12 for the company.

Great. And second question, I'm looking at the security, the enterprise service providers split and it seems appeared that the -- you had a pretty tough comp in 1Q and service provider and have -- and even a tougher comp in 2Q. Can you talk a little bit about the relative business opportunity in the service provider space, was that the function of demand conditions or just the comp. I mean your enterprise business is up 19%, very good result, but service provider obviously wasn't.

We have some weakness in service provider in North America. We are obviously given the low number of customers who were dependent and relative large size of orders; we can quite dependent on timing of some orders. In general, we continue to believe there is a great opportunity both for ADC as they move their networks now to NAV concept, LTE, the mobile traffic growth, all those are very strong drivers for ADC as well as on the security side with the -- they definitely need to protect their own network and of course their customers against the large volume attack. So, we're definitely involved in very interesting opportunities in the carrier space and in North America in particular. And in this domain, I believe this number might fluctuate in the coming quarters. I'd not read too much to a single quarter figure in carriers, I'd rather average days for growth 12 months or six months period.

And then third question, can you give us some sense of what the book-to-bill was on the cloud offering, still running in the four to five range?

We're not to giving a book-to-bill, but we're enjoying very strong and we might start to breaking it out in the future quarters, we didn't make our mind yet on this but we feel our booking trends are way over 100% growth year-over-year.

Is it reasonable to say it's consistent with prior quarters?

Yes, it growth is.

Okay and then one last question. The U.S. business or North American business, I guess we hadn't taken into account South America weakness. Can you talk a little bit about how much of a drag in that was and whether you -- I assume you expect that to persist, that wasn't in our thinking -- Can you help us out with the scaling of that?

It's not a big portion of the whole Americas but it was very weak in Q1, which -- by the way, we don't forecast it to persist, although there are currency issues and so on it was I think some execution point from on our end so I guess it weights down 3 to 4 points, out of the total growth maybe if it’s for the normal behavior.

I see. Okay, well, great job in Europe. Thank you.

We have a question from the line of Michael Kim with Imperial Capital. Please go ahead.

Hi. Good afternoon, guys. Just on attack mitigation, are you seeing a shift towards higher end and higher capacity platforms and is that primarily coming from carriers and cloud providers and how is that driving overall deal sizes?

I think we’re definitely seeing some demands for the higher end platform but it’s coming from two areas. First carriers definitely, they are seeing bigger attacks; they want to be in bigger scrubbing centers, so they are gravitating immediately to the bigger boxes. But also enterprises as they need greater networks, to 10 gig as they increase their connectivity, et cetera. They are also -- we’re seeing most of the large enterprise is now looking at 10 gig and above devices at least the large enterprises we are focused on with our direct touch sales team. So definitely we’re seeing and increasing that. If you add to that not only that they are looking for larger boxes we are selling them a more comprehensive attack mitigation solution, meaning not only the mitigation at the edge of the data center but also a cloud service accompanying that, web application firewall and other security capabilities like SSL encryption, decryption with our ADC. So we are seeing the enterprise looking not only on the product or in appliance, a fix for cyber security but for a complete architecture and this definitely driver our deal sizes up and also our strategic position within the account is becoming very, very strong.

Great. And then also can you provide an update on how the progress of Cisco ACI is moving? Any commentary or color you can provide on the integration of ADC and DDoS?

We’ve integrated both with Cisco ACI I think we have now press releases both on the ADC side and on the security side. We’re seeing customers that are deploying the Cisco ACI they are looking or the reason they are deploying it, is that they want to enhance the application services over the network and controlling it in a fully integrated single fame of glass manner and that is what our integration provide them. So what we provide to do datacenter customers are excellent used cases for the power of the ACI architecture and bring it to a reality both from low balancing server from front ending as well as on security. So we are seeing Cisco ACI customers very interested. We are running several [field] seasonal and the list is growing strongly and we are very excited by that. The second point is that we are seeing more interest on I would say traditional Cisco customers that we did not move yet to ACI but given the tight integration and alignment I think they are much more receptive to our solution and hearing the combined story and now our solutions are playing in the Cisco architecture. So we’re definitely encouraged by that. We have very strong reason. This week we’ve received the large win from very famous European airline that we grated Cisco ACI deployment to their hardware. Alteon VADC fully integrated with a new Cisco infrastructure. So we’re definitely seeing good traction there.

Great. One real quick question from me here. Can you give us some color around the currency headwinds, especially as you look in second half and the mix of exposure to the euro, both on revenue and expense.

Okay. Revenue this is actually build in our forecast and on the expense side this quarter, means March quarter we enjoyed about $400,000 benefit the currency specifically the euro went down. And next quarter, the June quarter we plan that currencies are at the same level placed all over the quarter. So there is no further impact from that.

Okay, great. Thank you very much.

We have a question from the line of Jess Lubert with Wells Fargo. Please go ahead.

Hi, this is Mike on for Jess. Hi, Roy and Meir, thanks for taking my question. Can you talk a little bit about the pipeline of large multi-million dollar deals that the company has captured over the last several quarters? How these pipelines have been progressing and is there a reason to believe these deals may drive the business to strengthen during the second half of the year?

So we continue to be engaging very largely not only from the carrier side but also on the enterprise side and so far a closure rate on those deals and our ability to produce relatively quickly is quite satisfying on our end. I don’t think we’ve seen in the last quarter more multimillion dollar deal than used to I would say in Q4, Q3 last year, but definitely if you look at year ago or two years ago we definitely see significant growth in the larger deals and not only their dollar value but also the amount of the deals that are running in parallel. I cannot tell you if I see this trend strengthening beyond the current level in second half although we are increasing our sales force and we are increasing our footprint in the market so OEMs and other channel, so hopefully this increased footprint will get us also more visibility. But I cannot tell you now that I see a clear trend on this.

Okay. And then secondly, the company as you talked about the potential of adding another OEM partner, it sounds like you're making some good progress from a technology integration standpoint with Cisco ACI. Just wondering if you could offer any additional updates with respect to the OEM?

We continue to progress on this front and I would expect an official announcement by our partner probably around Q4 at this point of time but we’re progressing well we continue to invest, they continue to invest and we feel it’s a great potential for Radware if deal will execute the way we think it will.

And then we have a question from the line of Ittai Kidron with Oppenheimer. Please go ahead.

Thank you. Roy, can you comment a little bit about Europe with the exchange rate. How did that impact deal flow pricing and things exactly, you did well, but was it your expectation to do even better over there?

So definitely it impacts us. I will split it two period when the euro went from I don’t know 135, 130 to the 120, definitely it didn’t impact us much because between the end customer, the channel and the distributor they were figuring it out given a budget in Euro how to execute the deal. But as the Euro fell below 110 between the end customer budget and our partner exchanged, there was no longer the ability to overcome which is also true to some countries in South America. There is no way to overcome the difference anymore. And then they asked us obviously to participate but our participation is unfortunately not limited to the 120 the 107 or 108 range they’re asking us to participate all the way from the 130, 135 to 107, so definitely obviously we’re not covering all, we are not taking the currency exchange issue enough but we need to sometimes provide a discount, sometimes to provide more content and you can assume it’s anywhere between 5% to 10% in the deals that the budget was pre-allocated in Euro specially that will relate to government segment, to carriers, some financial markets. So definitely I think we could have done even better and we had to align ourselves in some of the deals, but it is what it is.

Can you comment about the share count? I think Meir mentioned that you bought approximately $20 million of shares in the quarter. The share count actually went up quarter-on-quarter, is this the time of the year you had the employee awards? I'm just trying to understand why with all the buyback activity you have share count; it’s still not coming down.

This is from mainly tourism one of them you mentioned this is exercise of options by employees. Number two, this is as the share price going up the share count is going up as well. So, it’s reflected to those factors.

Okay and then lastly from me, can you give us an update on your, the negotiations with the OEM progress over there, the level of optimism, that this is still on track to be concluded at a time frame you think it should be concluded?

There is no negotiation anymore we concluded the agreement it’s now the execution.

Yes, well, when will it go live in the market, I mean?

So as I said I would expect the announcement in Q4 by the partner and obviously the time line is their time line and their go to market with the offering, but I would expect it to start in Q4.

And we have a question from the line of Joseph Wolf with Barclays. Please go ahead.

Hey guys, this is [Brian Farren] on for Joe. I just wanted to actually ask about the buyback and sort of how you're prioritizing it versus M&A potential. Are you guys seeing any interesting deals of security and kind of how large of a deal would you kind of consider in the security space to boost your position and sort of focus the business on the security segment?

We’re looking on M&A in general, I would not limit it to the security area specifically and we are looking for deals that will make business impact on the company. We rather speaking in terms of the business impacted in dollar value. Having said that, you can see our track record in acquisitions. We’re very conservative and we’re looking for very strong ROI for our shareholders and not only on a, I’d say high flying technology, our acquisition that it will be questionable -- how can we translate that to revenue and profit. So within this high level guidance are obviously very attractive in the market. We think we have a very good platform that we can leverage given that we find the right candidate for an acquisition and we are active in that front.

Okay, great. And then just on DDoS, is your strongest vertical still in financials? And if so, also where is there kind of the significant growth potential on that? Thanks.

Our largest segment is carriers for the whole company. Then we have financial, government and online as the next segments, across security also we’re seeing those four segments as the prime segments for our business.

We have question from the line of Rohit Chopra with Buckingham Research Group. Please go ahead.

Thanks very much. Meir and Roy, couple of questions. One, last quarter you ramped some investments to work on that OEM, that’s now a Q4 event. Has the bulk of the work been done there or is there more to do? And then the second question is, just an update on CheckPoint and whether that is meeting expectations or does that require additional work in the channel, what’s actually happening with CheckPoint?

We continue to invest in the OEM activity and also you can see from past quarter we constantly increase our investment back in the business as the revenues are growing, but definitely we are, I would say way in our investment in the joint development and all of that you already seeing in the numbers. Regarding CheckPoint we continue to be satisfied with the revenues and the opportunities in large customers that we are winning together with them. There is definitely room for improvement and we are working on that for example there is now a CheckPoint experience event in Europe, in Amsterdam our things there presenting together with CheckPoint the joint solution so we are constantly trying to improve the channel penetration, the customer penetration but so far we are progressing well with this OEM partner.

Roy, can I ask you a quick follow-up just -- the bulk of your comments when you speak were related to security. I know Alex asked about growth rates for the business, but is there any way to start providing some type of clearer metrics around security, perhaps deal sizes. What areas that you’re growing in or even just some type of rough split on a yearly basis. Is there anything you can do going forward?

Yes, we are looking how to give more visibility around that. Just regard Alex’s question, Alex asked me on the subscription revenues which is relating to our cloud offering or product subscriptions and those are not including all our, obviously, security revenues which is the vast majority we feel today is comprised of our appliances business be them physical or mutual. So I just want to make sure my answer on this point was clear to you all. But I hear you and we get this feedback and we are thinking what will be the right metric or right metrics to share.

Thanks, Roy.

[Operator Instructions] We do have a question from the line of Catharine Trebnick with Dougherty & Company. Please go ahead.

Thank you for taking my question. Could you talk a little bit about your, how you plan to get to 15% year-over-year growth and what things it would take to get to overall 15% year-over-year growth? Thanks.

Okay. Currently we’re guiding where we feel the business is, we finished Q1 with a 12% and we’ve provided guidance for Q2. Obviously, we are looking all the time both organically and inorganically to accelerate our growth rate. There are opportunities organically and I mention some of the channel expansion that we are working on, I mentioned some of our new solution for their opportunities there but at this point I would like to be very specific to our guidance and the middle point of our guidance that we came out in Q1 and that’s where I would like everyone to look at the most probable case. Going forward and on top of that we’re obviously trying all the initiatives I’ve mentioned to accelerate beyond that given that we were in 12% in Q1 and given also our performance the last year you can see that shifting accelerating to 15% is not out of scope but at this point I rather stick to the guidance we’ve provided.

Okay, that's fair. And then the other question is, when you recently announced the relationship with Cisco that it was an integrated ADC and security, were there other vendors that were in contention for this and why were you selected above anybody else?

So in ACI specifically it’s an open architecture so they are integrating with many vendors. We are not the only vendor in ADC there are other vendors in ADC. But we are the only vendor in ADC and security so we are providing a complete solution. In security specifically as mentioned, there are other vendors they’ve mentioned in the press release yesterday six vendors, we are the only one in DDoS and Attack Mitigation. So I think we have uniqueness in several aspects one is the comprehensive integration which is very important, load balancing, acceleration and security for data center that’s one, second being the only one in Attack Mitigation and third I think we have also advantage in the way we’ve integrated how deep the integration goes, how well the use cases work and so on.

So how meaningful do you think that the revenue from Cisco could be in the next 12 months?

Okay, ACI is not revenues from Cisco.

Right I know it's your product. I'm just saying how meaningful of revenues can you achieve through the partnership?

Okay, so we think Cisco ACI push -- the major push they’re going is data centers. And assuming that’s the case, we believe that we’re going to see many customers migrating their current network, their current data centers to an ACI infrastructure. When they do that, they can continue to use their current load balancing or security devices as they were but then they don’t leverage the investments that they’ve done in ACI. The question is how many of the Cisco customers will insist on leveraging ACI versus just run it as a regular switch. And I believe Cisco is pushing them for complete ACI leverage. In that case, I think that opens up a complete operating cycle in data centers and for that I believe we are well positioned to grow faster than the overall market. There is the lot of if still, it still very early in the Cisco ACI lifecycle I think the last call they’ve mentioned 2,500 customers worldwide some using it as a legacy switch and some as a complete ACI architecture. But we’ll definitely already involved in I think over 20 proof of concept and engagements around ACI. So we’re definitely seeing that as a driver at least of interest and PLC activity with large customers.

Okay one final question. Are you working with VMware on the same thing, the NFX?

We announced already, full installations on this one, we’re already GI with that.

All right any opportunities there and I'll seat the floor.

It’s still an alliance, we’re seeing less customers in NFX than we’re seeing currently at Cisco ACI; but that might change also.

We have a question from the line of Alex Henderson, Needham & Company. Please go ahead.

Yeah. Actually two questions, both on pretty much the same subject, which is the geographic play. Can you just talk about the APAC business, it’s kind of continuing softness there, still a function of the weakness in China with better results in Japan and other geographies offsetting the declines or weakness in China. And then you made a comment earlier about you expected the South American business weakness. You don't expect that to persist. I was wondering what makes you think that.

Regarding Asia Pacific it was -- we’re still not growing at the rate that we expect to grow. It’s the combination of China weakness and not enough strength offsetting it from the other markets. Regarding South America, I think our performance was very bad this quarter I cannot see it’s going dramatically lower than where it was and even coming back to what we normally were booking even without a lot of growth we’ll obviously contribute some to the Americas.

I guess, what I don't understand is, do you mean sequentially or you are talking about year-over-year. I would think the year-over-year, the South America, would still persist as a headwind even if it comes back a little bit from the depressed levels of 1Q. Is that -- I'm just trying to get some clarity on what you mean.

So, I think in Q1 it took us back, the growth rates because of the lack of performance both year-over-year and quarter-over-quarter. If it comes back to normal even not fast growing 30%,40% like what our average 20%,25% like what our average on the complete Americas if it just come to flat performance it already will expose more growth in the U.S. and the Canada market.

Okay. I got it. And then the China stuff is that starting to diminish? I mean, it's been going on for a long time, has it started to diminish to a size where it's becoming a less and less, and small enough drag that it ceases to be an offset to improvements in these other geographies or are we going to be looking at that persistent all year long, at similar kind of mid-single digit rates because of that pressure?

I don't know, if it will clear itself this year. At this point I think that’s the most probable -- we're not satisfied with this, but in terms of guidance that's I'd says the most probable assumption.

And one last question on the geographies. Could you just remind me what you said about what you expect in Europe, do you expect a continuation of the strong results or the results to moderate?

We believe we can continue to grow nicely, we're not taking the current growth rate and guiding for that but we're definitely seeing continued improvement there. So, we definitely see, if two years ago it was drag last year we didn't know, it was not a double-digit -- now this year, we feel confident that we can do double-digit. I'm not sure that's we can repeat Q1 performance, although we have very strong momentum there.

[Operator Instructions] I don't see any other participants in line. No other question at this point. Please continue.

Okay. Thank you very much everyone for attending and have a great day.