Radware Ltd. (RDWR) Q3 2018 Earnings Report, Transcript and Summary

Good morning. My name is Sharon, and I will be your conference operator today. At this time, I would like to welcome everyone to the Radware's Q3 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Anat Earon-Heilborn, VP IR for Radware, you may begin your conference.

Thank you, Sharon. Good morning, everyone, and welcome to Radware's third quarter 2018 earnings conference call. Joining me today are Roy Zisapel, President and Chief Executive Officer; and Doron Abramovitch, Chief Executive Officer. A copy of today's press release and financial statements as well as the investor kit for the third quarter are available in the Investor Relations section of our website. During today's 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 these statements are just predictions, and we undertake no obligation to update these predictions. 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 the 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 SEC, specifically, the company's last Form 20-F as filed on March 28, 2018. Please note that in November management will participate in the Needham Networking, Communications & Security Conference in New York and the Credit Risk Technology, Media & Telecom Conference in Arizona. In December, management will participate in the Barclays TMT Conference in San Francisco. With that, I will turn the call over to Doron Abramovitch.

Thank you, Anat, and good morning everyone. We reported today another solid quarter with continued revenue growth and a marked increase in profitability. We are on track to achieve our target and have strong confidence in our ability to deliver increased operating leverage as reflected in Q3 results. Revenues for the third quarter were $58.8 million at the high-end of our expectations and up 11% year-over-year. Revenues from the Americas were at the same level as last year and accounted for 45% of total revenues. Revenues from EMEA were up 28% year-over-year and represented 30% of total revenues and revenues from Asia Pacific were up 14% and represented 25% of the total. Once again, the quarterly fluctuations in revenue recognition affected the geographic trends and we therefore believe that the nine month revenue growth gives a better indication of the original trends. For the first three quarters of 2018 revenue from the Americas were up 8% year-over-year, revenues from EMEA were up 27% and revenues from Asia Pacific were up 2% year-over-year. Revenues from the enterprise vertical represented 68% of total revenues and increased 26% from Q3 last year and revenues from the service providers vertical decreased 12% from last year. Cloud subscriptions continue to be the fastest growing type of revenues. Recurring revenues that includes subscription and support represented over 60% of total Q3 and nine months revenues was up from approximately 56% in full year 2017. I will discus now expenses and profit all in non-GAAP terms. Non-GAAP gross margin for the third quarter was 83% compared with 82.1% last year exceeding our guidance, thanks to a favorable product mix. Our non-GAAP operating expenses were $42.4 million at the same level they were in Q3 2017 and below our guidance. Moderate increase in salaries and related expenses and in marketing expenses were offset by a modest benefit from a stronger U.S. dollar compared to last year. Headcount at the end of September was 970 almost at the same level in the last three years. Our non-GAAP operating profit in Q3 2018 was approximately $6.3 million represented at 10.7% margin and up from 2.1% in Q3 2017. Non-GAAP tax rate for this quarter was approximately 14%. Non-GAAP net income was $7.1 million or $0.15 per share diluted well above our guidance for the $0.10 to $0.11 per share and up from net income of $1.8 million or $0.04 per share diluted in Q3 2017. The strong non-GAAP was driven largely by trends in revenue and gross margin, expenses discipline and stable headcount. Turning to cash flow and balance sheet. We ended the third quarter with approximately $382 million in cash and financial investments, up from $367 million last quarter. We generated close to $9 million of operating cash flow in Q3. We ended the quarter with total deferred revenues balance of approximately $151 million, up 8% from September 2017 and below our expectations mostly because of timing of booking and invoicing. October bookings were very strong. And as a result we believe we are back with our normal business model for Q4 and for the full year. And now to our outlook for the first quarter of 2018. We expect Q4 2018 revenues to be between $62 million and $64 million, non-GAAP gross margin to be approximately 82% to 82.5% and non-GAAP operating expenses to be between $44 million and $45 million. We expect tax rate to be approximately 14%. Non-GAAP EPS for Q4 is therefore expected to be between $0.16 and $0.18. I will now turn the call over to Roy.

Thank you, Doron. Today we are pleased to report double-digit revenue growth, increased profitability and solid cash generation. Market conditions are favorable. However, we did experienced delays on a few cloud and subscription deals that we expected to close in the third quarter and then ended up closing in October. As a result, we had exceptionally strong bookings in October and we therefore expect the strong fourth quarter. Our focus on availability and security solutions for the private, hybrid, and public cloud addresses our customer needs, and we are well-positioned to be able to address their concerns as they embrace and utilize cloud services. Our offering not only provides broad protection alongside full-solution management services, but also excels in adaptability to various deployment environments and provides flexibility that is particularly critical in periods of transition and expansion. For example, one of our customers, a global SD1 provider who has been experiencing rapid growth, was looking to expand its attack mitigation architecture quickly. As a result, they've decided to evolve from on-network DDoS protection and multiple nodes to a global cloud DDoS protection across tens of locations. This was one of our largest deals in the third quarter in total and a very significant addition to our subscription bookings. Another aspect of the cloud transition is the strength we're seeing in infrastructure-as-a-service, platform-as-a-service, and software-as-a-service providers. It is vital for such customers to protect the shared infrastructure they are using. In order to provide cloud services to thousands of customers, they must ensure that an attack on one customer will not affect all the others. Just to give you some perspective on the scope and scale of these security challenges, one of our customers, a leading infrastructure-as-a-service company, shared with us recently that our appliances blocked more than half a million DDoS attacks over a two-month period, which is six attacks per minute. We have seen much success with this profile of customers over the past couple of years and some of the leading players in this vertical increasing their reliance on our solutions. In the third quarter, we received seven-digit expansion orders from three such customers, including the win we announced a few weeks ago. We continue to invest in our portfolio of cloud and security solutions, and just last month, we announced a new capability for our cloud WAF named application analytics. Expanding our management and visibility plane in our full-layer solution strategy, this capability enables fast and effective response to security events. It does so by applying advanced machine learning and big data algorithms to detect recurring patterns within log data and converting them into actionable user activities, providing visibility, precision, and control over security events. The cloud environment creates new security challenges. We will continue to leverage our advanced algorithms and machine learning cloud-native analytics to introduce more solutions for this environment and expect to expand our offering in the coming quarter with new cloud security solutions. Increasing our market footprint is a top priority, and we strongly believe that third-party relationships are key to delivering growth that is beyond the reach and bandwidth of our direct sales force and traditional channels. Specifically, our relationship with Cisco continues to develop, and we see growth in bookings and increased pipeline as well as stronger engagement, which is now more geographically diverse than it was a quarter or two ago. This is partially thanks to our deeper involvement in activities such as account mapping, customer meeting, pipeline follow-up and so on. Just recently, Cisco was named the leader in 2018 Gartner Magic Quadrant for enterprise network firewalls. Gartner lists the DDoS mitigation capabilities provided by Radware as one of Cisco's firewall strengths and a competitive differentiator. This was incremental in getting Cisco very excited about the Radware partnership. Let me remind you that as of the second quarter, Cisco added our cloud solutions to its reselling portfolio, and indeed, the current pipeline reflects the diversity of the Radware offerings. We continue to be very optimistic about the prospects of this partnership in the long run. In summary, we are pleased with the solid top-line performance and strong improvement in profitability. We are on track to close 2018 on a very positive note. Our unique and evolving solution portfolios strongly position us to benefit from the key long-term trends such as the continued shift of applications to the cloud and the ever-evolving security sets. We're making consistent progress on all aspects of our strategy to ensure our success in the long term. And with that, I will now open the call for Q&A.

[Operator Instructions] Your first question comes from Ittai Kidron with Oppenheimer. Your line is open.

Hi, guys. Congrats on good quarter. Roy, maybe you can just drill down on the delay in the cloud deals. Is there any common denominator here? Is this something of concern, or is it just negotiations took a little bit longer than planned?

I think we're now engaged in larger deals on the cloud front and also in the subscription front on multi-year, multimillion subscription deals, and in these deals, we're seeing a more prolonged, I would say, negotiation, not only around the contract, but across the SLA of the cloud, and so on. In addition, as we go deeper into the security and becoming more and more strategic to our customers, we've seen a couple of deals when they did a cyber risk assessment on us as a company, and so on. So, I don't think there's something out of the ordinary. We will sharpen our execution on that front. We've added, for example, lawyers in Radware, and as I said, we've closed all the majority of these deals already in October, and we feel very good on that angle.

Got it. Well, maybe reflecting on this, as I look at your OpEx, clearly, you guys have done a fantastic job in keeping OpEx in check, but your R&D expenses have really been flat for almost two years now, no improvement or increase there. Your sales and marketing also – pretty much almost no year-over-year growth in it. Do you think you're running too light from an operating structure? Do you think you've got the bodies that you need to keep up with the innovation, to keep up with the increased opportunities? Is this not a time to – as you think about into the 2019 period – to start hiring again and kind of beefing up your organization?

At the high level, we agree. We are increasing our sales and marketing in select regions, select verticals, select strategic partners. We definitely have a lot of more customers and potential large deals to work on. I'm expecting some addition to R&D. We feel very good about the innovation track record and getting that part of our business more efficient, and in G&A, we feel all in all good about our level of expense. So we are increasing sales and marketing along with revenues and making sure that there's leverage in the business, like I think we've shown this year, but I agree with you. It's time to add more and grow more.

Got it. And then, lastly for me, on the service provider side, I guess third quarter in a row of year-over-year declines there. I know this business can be lumpy, but is there anything in there that gives you concern, and can you help us kind of better understand the patterns that are in that business?

I think it's lumpy. I don't think we are losing share. I believe some of the large deals also have some revenue recognition clauses attached to it. And, in general, if you look on the company, all the cloud services and the subscriptions – as we've discussed in the last several quarters – are targeting the enterprise market. So, initially, everyone was concerned with the enterprise growth, and we said, just wait. You'll see that through the subscription. The carriers are more CapEx deals, lumpy. We don't read any much to it, and our focus is really growing the cloud and security business, which is predominantly enterprise, and as I've mentioned, SaaS providers, infrastructure-as-a-service providers, and so on.

Got it, very good. All right, good luck, guys.

Next question comes from Joseph Wolf with Barclays. Your line is open.

Thank you. I had a question about the comment you made about deferred revenue growth and then closing that number. Are you implying that the deferred revenue would have been around 15% growth in the quarter if the deals are closed? And, we can think about what the 3Q revenue beat would have been? Have those deals closed or should we not think about it that way?

Hi, Joe. So, as you know we review the trends year-over-year. This is what we are doing and this is what reflects in the business. Overall, this quarter, we had 8% year-over-year growth, which is a bit lower than what we expected because of the trends, but Roy mentioned that there were some – a couple of nice deals that we already won in October that obviously would have changed the trend and go to what we planned to see. So, overall, as I said, October booking was very strong, and we will see in the end of the year if things will be as we expect that the growth base of the deferred revenue will be higher than the revenues.

And, I guess just as a follow-on, Roy mentioned in his answer to some of that push-out as you're referring to larger deals with some of your customers and they take longer to close, does that mean that the deals that were closed are, on average, larger than the deals you closed earlier in the year?

No, not necessarily. I think that Roy implied that it's not as nice as we want, but it's not something especially – it's a common deal that we had. It's not something very unique.

And then, finally, as a follow-up to the prior question or one of your answers with the split of Enterprise versus Services – if I understand this now, are most of your solutions that are going to the cloud customer-driven, or do you also have cloud providers that are using your solutions across their customer base? Can you describe some of the different – whether there are instances of both, and when we – if you sold directly to the cloud provider who offers it across his customer base, would that be a Service Provider sale or would that be an Enterprise sale?

Okay, so in general, we do sell both, meaning we have customers that are infrastructure-as-a-service customers that deploy our systems and will provide the service. Those will still be classified under Carrier and Service Providers. However, software-as-a-service are being classified under Enterprise for us, and even if they use that as part of protecting their application because they're not selling the security service per se, unlike the infrastructure-as-a-service players. And then, as I've mentioned in my previous answer, the vast majority of our cloud service business – meaning when we're selling a cloud service by itself – that goes to Enterprise through regular resellers or OEM partners, and so on.

Okay. So, would your mix of 68% Enterprise then be higher in the cloud?

Of course. Cloud – when we sell cloud services, right, absolutely. The majority goes to Enterprise…

Okay, thank you.

Next question comes from George Notter with Jefferies. Your line is open.

Hi, guys. Thanks very much. I guess I wanted to ask about the gross margin performance this quarter. I mean you guys have been really locked in historically at this sort of low 82% range, and it's not a massive jump-up. I get it. But, I guess I'm just curious about the favorable product mix that drove that improvement. Was that more Cisco OEM revenue? Was that an increased mix of SSL-based defense pro hardware? Can you just tell us what’s going on there?

At the high level, I think there are three main drivers: one, the more we recognize from Cisco, yes, gross margins are going up; second is the more we sell cloud services on top of the same size of infrastructure, our gross margin is going up; and third is the more subscriptions we sell, product subscriptions, feeds, et cetera, those tend to be, obviously, very high gross margins for us. So, when Doron mentioned favorite mix, those are the parameters.

Got it. Is it fair to say that those trends should likely continue going forward and that gross margin line should continue to drift up? Is that a possibility?

Yeah, George. As Roy said, if we will continue with the trend of these three strong elements, then yes, but for the next few quarters, we were a bit more cautious because there are other aspects, such as the region aspect and other things in terms of the cloud infrastructure, so I would give the 82% to 83% in the next few quarters.

Got it, okay. And then, I also wanted to ask about – you guys have talked in the past about a new OEM relationship that you hope to announce this year. I'd just be curious about where you are in terms of developing that relationship and when you might announce it.

So, we've executed it and it's already in execution. We rely on the public announcement on our partner, and hopefully they would do it this quarter. It should be aligned with their product introductions. But we've done our part and we've started to recognize some revenues from that deal.

Got it, super, okay. And then, last thing – if I go back about a year, you guys announced a new DefensePro hardware that supported SSL, and I know that new hardware came in at significantly higher price points. I guess I was just trying to understand what kind of mix shift you're seeing from the older DefensePro platform to the newer DefensePro platform. Is that mix shift really happening?

Yes, the new – you're absolutely right. The new DefensePro hardware has two flavors, one with the integrated SSL capability in it and one without. We are seeing – especially in Enterprise online SaaS providers – strong takeout of this platform for obvious reasons. Their traffic is encrypted and they need to protect it. In the Carrier market, other segments where they're unable in any case to open the encrypted traffic of their customers, they're sticking to the regular flavors. Obviously, when they take the SSL-based platforms, our revenues are higher and our gross margin is improving, but there's a split that depends on the customer vertical, on the appetite to take it or not.

Great, okay. I'll pass it on. Thanks very much.

Your next question comes from Alex Henderson with Needham and Company. Your line is open.

Thanks. So, there's been a lot of movement in the WAF and DDoS space, particularly with Imperva going private, and it looks like several of the Cloudflare/Fastlys of the world are poised to come out into the sunshine. So, given that environment, how is that impacting your business? Is it causing any acceleration in the business as a result of some of these transactions? Are you benefiting from it? Second, on the same lines, we've been hearing that Arbor is continuing to struggle. Are you seeing clear share gains against them? If you could give us some background on those two, I'd be appreciative.

Yeah, so – I think on some of the deals – Imperva going private and so on, I think time will tell how much it disrupts their business, if at all. But, in the cloud WAF, we feel very comfortable with our solution. Doron mentioned our cloud services are growing very, very strong, new customer takeout – all the business parameters, I think, are at record highs in this business. I mentioned the analytics. I think it's a great addition, very differentiated, really taking thousands of events that you get, protecting your web application, and really provides you with a clear view of the top 10 or 20 attack campaigns you need to watch. So, those capabilities are highly disruptive to the way customers today use and consume WAF capabilities, and we think we just need to continue to execute. We have now Cisco and Checkpoint carrying it as well. We just need to continue with our plan, and I think we will do very well. Regarding the what I would say DDoS Enterprise and the DDoS Carrier space, we do believe and that trend continues that we are taking share from Arbor, and my parameter for that is our entrance into accounts that Arbor was the incumbent and we'd never been there in the Carrier space, and that trend continues. Every quarter, there's several new wins for us, but we're penetrating these customers, and once we're in, obviously, we're looking to become – if we're not the prime, to become the prime, and definitely take the capacity additions. So, across the securities business, we feel very well positioned.

You make a split between SaaS customers that are not providing WAF as a service, but using it as a technology for them, or DDoS’s protection for their own application that they're delivering – as they service to the customer, and the cloud service players that are using WAF and DDoS services and reselling that as a service. If you were to take the two of those and aggregate them, are we in a solid double-digit portion of your revenues from those two categories as a single unit?

Yeah, I don't want to break that, but if you look at my remarks, I mentioned the three seven-digit deals in this segment. Maybe those are not the only deals we've done, so I think you can get into the magnitude of the numbers we're doing there.

And then, one more question. Back on the Cisco situation, you sound like you're considerably more optimistic and less frustrated with the long timeline. Have we seen any meaningful revenues yet? And can you talk about whether it's bigger than a breadbox at some point down the line, how should we be thinking about actually getting some revenue in, and some profitability in and some gross margin impact in?

I don't want to speak about the exact numbers, but are more optimistic. I think they're starting to be much more vocal and visible in the firewall market. I think they started it in their new fiscal year in July. And, we definitely see more field activity of their salesforce around firepower and refresh campaigns for the firewalls, and as a result, much more engagement with us. So, we are optimistic, the business trends are good from booking to pipeline to meetings and so on, and our forecast is for that business to grow significantly.

One last question, if I could. So, it seems pretty clear to me that there's an interesting confluence coming down the pike with 5G really driving significant improvements in edge capacities, and simultaneously, with the Internet of Things coming on strong, can you talk a little bit about how that impacts edge compute and how that then impacts demand for DDoS, demand for WAF services, and the like?

So I think around 5G and the new use cases it enables, there are many, many security opportunities. There are opportunities to protect the network itself, from the EPC to the edge cloud and so on, so that's I would say around the providers itself. The magnitude of this security problem is significantly higher given the amount of these new types of data centers that are being – that are popping up across the network. So, you're talking hundreds or thousands of small data centers that need security. Then, across the use case of IoT, there are whole sets of new security issues, from DDoS to web security to anti-bot and so on, and those can be towards the provider as well as to the end customer. So, we're seeing a magnitude – it's early on. We're seeing a magnitude of opportunities. We think we are well-positioned given our Nokia relationship, and our Cisco relationship, and other relationships that we are investing in, and we think that would be a growth opportunity. I don't think it's a 2019, but it's definitely very strong on our radar in R&D.

So, one last question, if I could. Looking at the Akamai results, they talk a lot about the top five customers in the CDN space pushing out into the edge, and they actually break out the decline in that business, which I think is down to 6% of their revenues from high double digits over the last couple of years, and then, very strong growth in the rest of the market, which is growing 15%, 20% clip for them. Clearly, as Google and Amazon and people like that start pushing out to doing CDN at the edge, they need a lot of these services. Can you talk about whether they're using their traditional, more white-label-oriented approach to it, or are these customers that become opportunities for you guys, and have you had any luck cracking them? They seem to be becoming a more important piece in the CDN space.

I don't want to go into the specifics of these specific customers, and CDN by itself is not also our prime focus. However, some of those mega players are starting to see security problems that require a more specialized approach, and I think they're becoming much more open to partner with specialized vendors than I would say before. So, I think those opportunities around the whole spectrum. It's being driven by the complexity of the attacks, by the frequency, by the evolution of the hackers, by the fact that the motivation – the sponsors are starting from government baddies, to financial crime, to activists, and it's hard even for the strongest company out there to do it alone against these forces. So, I think there's many opportunities. Especially as we develop more advanced algorithms, more machine learning, more analytics, the value that we bring is becoming very, very differentiated.

Next question comes from Mark Kelleher with D.A. Davidson. Your line is open.

Great, thanks for taking the questions. Just to go back a little bit to the OEM questions, I know you don't want to get specific on Cisco, but if we had Cisco and Checkpoint and your new OEM that you're recognizing revenue – if we put that together as a bucket, is OEM revenue over 10% of revenue?

We're not breaking this number, unfortunately.

Okay. How about deferred – sorry, how about last quarter, you told us about 60% of revenue was coming from annuity-based offerings? What's your view now as to your percent of revenue that you have that type of visibility on?

Hi, Mark. So, I mentioned it's above 60% and growing. Last year, it was 56%, before that, 48%. So, I believe that the 60% is something that you can rely on in the next few quarters.

Okay. And, is there any 10% customers in the quarter?

We don't break it as well. The answer is no, but we don't break customers like this.

No, 10%, okay. And, you're generating some good cash. Any thoughts on uses of cash?

Yeah. We continue to look for acquisitions in the market to broaden our portfolio. We're working very actively on that, and we will obviously advise you when we come to a conclusion.

Okay, thanks.

Your next question comes from Alex Frankiewicz from Berenberg. Your line is open.

Hi, thanks for taking my question. I just had a question on accelerating growth. So, 11% top-line growth on the back of a tough comp is pretty impressive. As security – which I believe is growing a bit faster than legacy business – becomes a larger part of the business, do you see any potential for revenue acceleration? Do you see any upside to the 9% long-term target?

At this point, I think we will keep the target as is. But, we see, of course, strong growth in booking in security. A lot of those revenue recognition is being deferred over the time of the contract, but overall, we feel comfortable with the current guidance we've provided, and probably after the end of 2018, we will address with any updated guidance we might have.

Okay, thanks. And then, do you give any rough split or estimation between legacy business versus security business in terms of revenues?

We don't.

Okay. And then, just in terms of gross margin expansion, over the next few quarters and years, how much of that do you expect to come from capacity utilization in the cloud in terms of scrubbing capacity?

We continue to build fast our cloud infrastructure. Some of our very large customers require data centers in their country. As the contracts are growing and capacity is growing, we're adding capacity across the world. So, we are not yet at the point that I can tell you buildout is finished, and now it's just the utilization. However, as I mentioned in the gross margin point, when we sell more and more services on the same node, obviously – even if we need to add capacity, obviously, our gross margins there are improving. So, we're definitely in buildout still. We are bringing, as I mentioned in my notes, new cloud security services to market, and we're building infrastructure for them as well. So, we're very active still on that end.

Okay, perfect. And then, last question for me: In terms of your OEM partnerships with the likes of Checkpoint, Cisco, Nokia, and the new one you announced, how would you rank those in terms of order of importance? How material do you expect those to be over the next couple of quarters and years? Is there one or two that will stand out?

I would say all my sons, right? We love them all. We feel each one of them has a unique capability to substantially grow with us, and we're working with each partner on that – on these opportunities. I think Nokia is a great partner for the Carrier market, very unique in their capabilities to deliver complicated solutions. Cisco, obviously, with their broad presence from small/medium enterprise, to government, to carriers. And, Checkpoint, very strong in the channel, mid and large enterprises, so very security focused. I don't want to specifically name the fourth one and its uniqueness or specialization, but you should assume it's also giving us another set of coverage that complements our go-to-market. So, we feel strongly about these partnerships, all have continued to develop, and we believe there's high potential there.

Okay, perfect. Thank you so much.

Your next question comes from Zack Turcotte with Dougherty. Your line is open.

Hi, guys. Zack on for Catharine Trebnick. So, first, just want to dive into the growth in EMEA real quickly. I know it fluctuates quarterly, but 27% year to date is pretty significant. So, with recent Service Provider weakness probably dragging down the Americas' growth rate a little bit, is the EMEA region a particular focus for you, or are there specific go-to-market strategies that have been driving that growth?

I think all of our regions are executing basically the same playbooks across the world. We've done recently very good success in EMEA, especially in broadening our security and cloud offerings, and we look for that to continue while we think the other regions can accelerate. I think the potential is there, and that's our goal.

Got it. And then, I know you talked quite a bit about the OEM relationships, but just wondering if you have any sort of update on Nokia in the last quarter, or if you feel this could sort of help rejuvenate the Service Provider business going forward over the next few quarters.

We continue to be active with them on specific carrier RFPs across the world, and there's continued wins, and I think broadening the customers we're serving. They're one of our key ways to penetrate new Carrier accounts, following on the question about Arbor and so on. They're very effective in helping us penetrating these customers because Arbor is the incumbent, but we come with very trusted partners, like Cisco or Nokia, to the account, and that allows us more easily to focus the discussion on the technology benefits we bring. So, I think very important for our carrier strategy for DDoS market share, we're happy with this partnership.

Great, thanks.

At this time, I will turn the call over to the presenters.

Okay, thank you very much for the call, and have a great day.

This concludes today's conference call. You may now disconnect.