Rambus Inc. (RMBS) Q4 2017 Earnings Report, Transcript and Summary

Welcome to the Rambus Fourth Quarter and FY 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Rahul Mathur, Chief Financial Officer. You may begin your conference.

Thank you, Jessie, and welcome to the Rambus fourth quarter 2017 results conference call. I'm Rahul Mathur, CFO, and on the call with me today is Dr. Ron Black, our President and CEO. The press release for the results that we will be discussing today have been furnished to the SEC on Form 8-K. A replay of this call will be available for the next week at 855-859-2056. You can hear the replay by dialing the toll-free number and then entering ID number 8596527 when you hear the prompt. In addition, we are simultaneously Webcasting this call, and along with the audio we are webcasting slides that we will reference during portions of today's call. So, even if you are joining us via conference call, you may want to access the Webcast with the slide presentation. A replay of this call can be accessed on our Web-site beginning today at 5.00 PM Pacific Time. Our discussion today will contain forward-looking statements regarding our financial guidance for future periods, including Q1 2018 and full-year 2018, prospects, product strategies, timing of expected product launches, demand for existing and newly acquired technologies, potential benefits of our recent acquisitions, the growth opportunities of the various markets we serve, and changes we will experience in our financial reporting due to our adoption of new revenue recognition standards starting in Q1 2018, amongst other things. These statements are subject to risks and uncertainties that are discussed during this call and may be more fully described in the documents we file with the SEC, including our 8-Ks, 10-Qs and 10-Ks. These forward-looking statements may differ materially from our actual results and we are under no obligation to update these statements. In an effort to provide greater clarity in the financials, we are using both GAAP and non-GAAP financial presentation in both our press release and also on this call. We have posted on our Web-site a reconciliation of these non-GAAP financials to the most directly comparable GAAP measures in our press release and our slide presentation. You can see this on our Web-site at rambus.com on the Investor Relations page, under Financial Releases. The order of our call today will be as follows. Ron will start with an overview of the business, I will discuss our financial results including the guidance we issued in today's press release, and then we will end with Q&A. I'll now turn the call over to Ron to provide an overview of the quarter and the year. Ron?

Thanks, Rahul, and good afternoon everyone. We delivered a solid fourth quarter and strong year for 2017 overall. I'm excited by the progress we are making across all of our businesses as we maintain our growth trajectory for the data center and mobile edge markets, making data faster and safer. From a financial perspective, in Q4 we delivered revenues of $101.9 million, up 4% year-over-year, and our non-GAAP diluted net income per share was $0.19. For the full year, revenue was $393.1 million, up 17% year-over-year. We performed well in 2017 with strong execution in our product groups, demonstrated leadership on strategic programs, and continued licensing of our broad IP portfolio. We signed multiple licensing deals in 2017 and just announced a license agreement with Marvell covering our patented memory, SerDes and securities technologies. 2017 was a positive year for our Memory and Interface Division in both chips and IP cores, and demonstrated our ongoing leadership with the introduction of the industry's first production release of the DDR4 non-volatile register clock driver for NVDIMMs as well as the industry's first silicon-proven server DIMM buffer chipset capable of achieving the speeds [expected] [ph] for next-generation DDR5. We believe these were important achievements as they enable us to drive the ecosystem faster than competition and are leading indicators of success, since first-movers in prior generations have gained a disproportionate market share by being first. They also strengthen our position in DDR4 buffer chips with approximately double the number of OEM and cloud customer qualifications across the Broadwell and Skylake platforms versus 2016, which we expect to lead to significant revenue growth this year. Moving to IP cores, the product team continued to make progress with both commercial traction and product availability over the course of the year with a 25% increase year-over-year in new customer design wins across our SerDes and memory PHYs, expansion of our ecosystem relationships with Samsung and GLOBALFOUNDRIES into new process geometries, and addition of our 56G SerDes in high-bandwidth memory Gen2, that's HBM2 PHY, complementing our already broad portfolio of IP cores for the data center and networking applications. In addition, just last week we announced our GDDR6 memory PHY which is gaining tremendous interest for high-performance applications like artificial intelligence, automotive and networking. It was also announced that the PHY will be part of a comprehensive solution with Micron, Northwest Logic and Avery Design. As the only IP vendor currently developing a broadly available PHY, we are opening up the high-speed capabilities of GDDR6's exciting applications outside of graphics, such as crypto mining, machine learning, and advanced driver assistance systems. Turning now to our Security Division, which consists of our cryptography, ticketing and mobile payment groups, we continued to build strong momentum in marketplace relevance and product adoption. Announced earlier this January, we were part of a research team of world-class security experts that identified two wide-reaching CPU vulnerabilities called Meltdown and Spectre. Discovered as part of our development work for secure compute solutions, Meltdown and Spectre highlight the need for chip security by design with controlled secure processing that does not depend on general purpose computing. They also reinforce the value of solutions like our CryptoManager platform that take a hardware based approach to ensure fundamental chip security with hardware root-of-trust to manage secure relationships and identity throughout the lifecycle of an SoC. Following the launch of the CryptoManager IoT Security Service earlier this year, we continued to gain commercial traction for the broad CryptoManager platform with design wins and deployments of the CryptoManager Infrastructure at Softbank and its subsidiaries, Cybertrust Japan and Miracle Linux for automotive and IoT applications. We also had ecosystem engagements with STMicroelectronics and Synopsis and we announced our first customer for CryptoManager IoT Security Service with Cybertrust Japan. At CES, Cybertrust and Mitsufuji demonstrated its secure bio-monitoring with our platform. In ticketing, we accelerated our position in secure mobile ticketing with the launch of our Host Card Emulation or HCE Ticket Wallet Service and white-label mobile application. By integrating the proven technologies from our payments team, we are able to deliver a first of its kind solution to U.K. transport that enables travelers to securely buy and download tickets directly to their smartphone and then tap through the existing gates at the station. Currently deployed as part of an upcoming pilot on the Glasgow Subway, the transition to mobile ticketing brought us from an infrastructure security provider to one that touches the end customer. Finally, for our payments team, there is ongoing traction for our tokenization solutions with four commercial implementations in 2017 with financial institution customers for the securitization of payment cards in support of the rollout of Apple Pay, Android Pay, and Samsung Pay. Each implementation levered our proven Token Service Provider software to replace traditional primary account numbers with temporary unique identifiers called payment tokens for increased protection. With global trends shifting to support new payment methods like peer-to-peer, fast payments and automated clearing house or ACH, we see growing demand that bring the security benefits of tokenization beyond traditional mobile payments. With that, our Unified Payment Platform, or UPP, which was launched in the first quarter of 2017 to enable bank-level security and tokenization for the retail scan-and-go experience, brings us closer to the consumer and shifts the business model from one-time infrastructure software sales to ongoing revenue per transaction delivered in a SaaS model. We continue to attract global interest and are currently engaged with a major retail customer in Asia Pacific to integrate and deploy the Unified Payment Platform into their digital payment system leveraging our tokenization technology to bring security together with the convenience of scan-and-go and real-time loyalty redemption for customers. In closing, Q4 and 2017 at large were strong. We continue to execute and are gaining traction with our products and services while establishing and expanding partnership agreements with industry leaders to expand our reach. As we look forward to the rest of 2018 and beyond, we have partnered once again with the Global Semiconductor Alliance on a think piece which can be downloaded from the GSA Web-site. The piece examines the monetization of semiconductors and the potential of new markets and downstream revenue opportunities in new silicon-to-services model that spans the data center to the mobile edge. Keeping an eye toward these evolving dynamics, we continue to invest in and execute on programs that position the Company as a market leader and drive profitable growth across our businesses. With that, I'll turn the call over to Rahul to discuss the quarterly financial results.

Thanks Ron. I'd like to begin with our financial results for the quarter and I'll touch on some highlights for the year. Let me start with some highlights on Slide 7. As Ron mentioned, we had a solid quarter. We delivered revenue growth of 4% year-over-year, up 3% from Q3 and better than our typical seasonality of up 2%. We delivered non-GAAP EPS at the midpoint of our range by executing on our growth initiatives while continuing our investments in our business. We are also pleased with our results for fiscal 2017. Revenue was $393.1 million, up 17% year-over-year. The increase in revenue was due to execution on the acquisitions we made in 2016 and continued strength in our licensing business. We also delivered $117.4 million of cash from operations in 2017, our strongest result since 2010. To drive long-term growth, we continue to leverage our high-margin historic businesses to fuel growth in adjacent areas where we have strong technical and market expertise, with a focus on memory and security. Now let me walk you through some revenue details on Slide 8. Revenue for the fourth quarter was $101.9 million, above the midpoint of guidance we provided of $98 million to $104 million. We have a diversified revenue stream that supports our long-term growth and our Q4 revenue performance was due to strength in our licensing growth. Our licensing business continues to perform well, is the foundation of our success, and is core to our initiatives in both our memory and security businesses. Going into additional detail, our Memory and Interface revenue was $73.9 million, Security was $23.8 million, and our Lighting and Display Technology revenue was $4.2 million. Year-over-year, MID revenue grew by 8% and our Security Division grew by 3%. Let me walk you through our non-GAAP income statement on Slide 9. Along with our solid revenue performance in Q4, we once again met our profitability targets. Cost of revenue plus operating expenses, or what we refer to as total operating expenses, for the quarter came in at $68.4 million. We ended the quarter with headcount of 819, flat from 818 in the previous quarter. Over the course of 2018, we expect to invest in headcount to support our growth initiative in our memory and security businesses. Stronger revenue and operating expenses led to operating income of $33.5 million. We incurred $0.3 million of incremental interest expense related to the convertible notes we issued midway through Q4. This was offset by incremental interest income related to a higher return on our cash portfolio. After adjusting for non-cash interest expense on our convertible notes, this resulted in non-GAAP interest and other expenses for the fourth quarter of $0.9 million, down from Q3. Using an assumed flat rate of 35% for non-GAAP pre-tax income, non-GAAP net income for the quarter was $21.2 million or $0.19 a share at the midpoint of our guidance. Now, let me turn to our balance sheet details on Slide 10. Cash, cash equivalents and marketable securities totaled $329.4 million, up $145.7 million from [prior] [ph] quarter. This was due primarily to the $172.5 million in convertible notes we issued which resulted in net cash proceeds of $159.6 million after expenses, sale of warrants, and the cost of call option we issued in conjunction with the notes. These convertible notes carry an interest rate of 1.375% and mature on February 1, 2023. We purchased a 60% capped call and these notes will only become dilutive to our shareholders once our stock price reaches $23.30. We used proceeds to extinguish $56.8 million of the $138 million convertible notes due in Q3 of 2018. Cash also increased due to $59.8 million of cash from operations, reflecting the strong collections we anticipated in Q4. For the full year of 2017, cash from operations was $117.4 million, again our strongest result since 2010. This is a strength of ours and we expect to maintain our ability to generate cash from operations in 2018. This will also be an important metric to monitor on an annual basis as we implement ASC 606. Fourth quarter CapEx was $3.9 million and depreciation was $3.3 million. In 2017, we made numerous capital investments to help fuel our growth, specifically at some of our international facilities and for our chip program. As a result, we had $9.4 million of CapEx for the year, in line with our expectation. Correspondingly, we had depreciation of $13.3 million for the [year] [ph]. Looking forward, I expect roughly $4 million of CapEx for the first quarter and roughly $9 million for the full year of 2018. I also expect depreciation of roughly $3.5 million per quarter in 2018. Overall, we have a strong balance sheet with limited debt and expect to continue to generate strong cash from operations in the future. Now, let me turn to our guidance for the first quarter on Slide 11. As a reminder, our forward-looking guidance reflects our best estimate at this point in time and our actual results could differ materially from what I'm about to review. Effective January 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers in Accounting Standards Codification Topic 606, or what we refer to as ASC 606. This supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, or ASC 605. As we have publicly discussed over the past many months, we expect the adoption of ASC 606 to materially impact the timing of revenue recognition for our fixed-fee intellectual property licensing arrangements. We do not expect the adoption of ASC 606 to have a material impact on our other revenue streams, cash flow from operations, or the underlying financial position of our Company. In order to provide additional insight into our business, we have also been providing information on licensing billings, which is an operational metric that reflects amounts invoiced to our patent and technology licensing customers during the period. The only difference between licensing billings and royalty revenue under ASC 605 is timing, as we don't always recognize revenue the same quarter we bill our customers. As you can see in the supplemental information we have provided on Slide 18 of our earnings deck and also in our press release, on an annual basis licensing billings closely correlates with what we reported as royalty revenue under ASC 605 given this timing [indiscernible]. We'll continue to provide licensing billings as another operational metric to help our investors understand the underlying performance of our Company. In order to provide our investors and analysts additional transparency, we are also providing financial outlook as if we were still under ASC 605 as well as ASC 606 during this transition period. We believe that providing this additional disclosure in the short term will help our stakeholders understand the impact of the change in revenue recognition standards, especially given the material difference expected in the timing of revenue recognition for our fixed-fee licensing arrangements as mentioned above. Of course, please note that the presentation under ASC 605 is not a substitute for the new ASC 606 revenue recognition standard under GAAP. Additionally, as we had said in the past, our Lighting Division is an adjacent business and we would be open to all strategic options including selling it to someone who could leverage the technology better. Recently, as I mentioned last month or earlier this month, we didn't renew our supply agreement with our largest light guide customer due to some unfavorable terms. As of the end of last year, we are no longer supplying our largest customer light guides. To be clear, none of our memory or security customers are impacted by this decision. We have historically been breakeven in our Lighting business. However, because we did not renew our supply agreement with our largest light guide customer, our lowered revenue would cause the business to be unprofitable. We do not intend to run an unprofitable business and are therefore excluding this business from our outlook in Q1. As this business has been roughly breakeven for us, this does not impact our outlook on profitability, though it does reduce our revenue outlook by roughly $18 million year-over-year and roughly $4 million for the first quarter of 2018. With that said, under the new ASC 606 revenue standard and excluding our Lighting business, we expect revenue in the first quarter between $41 million and $47 million. This represents $21 million to $27 million of royalty revenue and roughly $20 million from product, contract and other revenue. Under the ASC 605 revenue standard, and again excluding our Lighting business, we would've expected revenue in the first quarter between $94 million and $100 million. This represents $74 million to $80 million of royalty revenue and no material difference between product revenue, contract and other revenue between ASC 606 and ASC 605. We expect Q1 non-GAAP total operating expenses, which include COGS, to be between $63 and $67 million, down from Q4 primarily due to the exclusion of Lighting, offset by a seasonal increase in statutory payroll expenses. Over the course of 2018, I expect we will keep operating expenses roughly flat as revenue grows, providing leverage to our financial model. I expect total operating expenses, which include COGS, related to our buffer chip business to grow through the year as we ship more product. We are targeting $35 million to $40 million in buffer chip revenue in 2018. Under the new ASC 606 revenue standard, non-GAAP operating loss for the first quarter is expected to be between $16 million and $26 million. We expect roughly $2 million in non-GAAP interest and other income and expense. This includes $600,000 of interest expense related to the 2023 notes and another $200,000 related to the remaining [indiscernible]. Based on the new tax legislation passed at the end of December, we expect our pro forma tax rate to drop to roughly 24%. The 24% is higher slightly than the new statutory rate of 21%, primarily due to higher tax rates in our foreign jurisdiction. As a reminder, we pay roughly $20 million of cash taxes each year, driven primarily by our licensing agreements with our partners in Korea. Based on a 24% tax rate, we expect a GAAP benefit of between $4 million and $7 million from taxes in Q1. We expect our Q1 share count to be roughly 110 million basic shares outstanding. This leads you to between $0.12 and $0.19 of non-GAAP loss per share per quarter. Under the ASC 605 revenue standard, using the same pro forma assumptions for expenses and other income and expenses, $6 million to $9 million for taxes assuming a 24% rate and 114 million fully diluted share count, under ASC 605 we would expect between $19 million and $27 million of non-GAAP net income and between $0.17 and $0.23 of non-GAAP earnings per share for the quarter. Looking ahead to 2018, while we do not issue annual guidance, as we look at consensus estimates from our sell-side analysts, we were comfortable with the current consensus estimates for growth for 2018 as reported under ASC 605 prior to the new revenue recognition rules and excluding our Lighting Division. Again, under ASC 605, I would've expected our top line in Q2 2018 to be flat to slightly down from Q1, better than our typical 5% seasonal decline. Based on the revised pro forma tax rate of 24%, consensus estimates for our non-GAAP earnings for 2018 under ASC 605 would have approximated $0.85 per share. Let me finish with the summary on Slide 12. As I look at the year, we are proud of the solid performance by our team and the progress we continue to make across all of our businesses, delivering continued growth in our data center and mobile edge markets. Over the course of the year, we've made our numbers delivering profitable growth and strong cash from operations, made changes to improve our operating margins, and we are very well-positioned for continued success as we head into fiscal 2018. With that, I'll turn the call back to our operator to begin Q&A. Jessie, could we please have our first question?

[Operator Instructions] Your first question comes from Suji Desilva with ROTH Capital. Your line is open.

Nice job on the progress here. I just want to clarify on the accounting change, Rahul. You're reporting as of 605 for what it might be for the first quarter. How long do you plan to do that and is it the expectation to get a licensing number to help us kind of as that drops off, is that the way to think about it?

So, I'd like to do it for the transition period of at least a year. I think that will certainly help our investors and analysts understand what's actually happening in our business. Once you have a little more time to go through our press release, we've actually broken out what we expect for royalty revenue under 605 separately. And what we've also done is given you some what we think our licensing billings are going to be as well, and I think that's another operational metric that will help you understand the underlying performance of our business.

Okay, that is helpful. Now switching over to the segments here, can you talk about the memory and the tech business and what we might think about as year-over-year opportunity here and what that might do for gross margin? I know that comes in at a lower margin to your traditional businesses. So it would be helpful to understand the potential impact there.

So I think Ron has already talked about some of the growth opportunities we have in our memory business, both on the IP side as well as cores as well as from the buffer chip side. From a margin perspective, our IP and cores are very high margin. IP is almost 100%, cores is of course something similar. Our buffer chips are actually closer to about a 50% gross margin, and those are actually pretty good chip margins. I've worked in many companies and I have discussed over years where 50% would be a great aspirational target. But we have about 50% buffer chip margin. Now, the way I look at it is that our business for the buffer chip is already built. We have our engineering teams, we have marketing teams, we have the design team, the sales team, et cetera. So, incremental revenue maybe at 50% gross margin, but I expect it to be 40% plus incremental operating margin because our infrastructure is already there. So, as we grow revenue from a buffer chip perspective, even though it may be slightly dilutive to our overall gross margin to the Company, I expect it to help us get to our 37% to 40% operating margin target that we had under ASC 605.

Okay, great. That's helpful color. And then on the Security side of the business, can you talk about how the business, the revenue tracks from here in terms of gross? Should we expect the customers you have now the licensing will continue, will it be new customers that will layer on there to drive growth, will there be some per-use incremental revenues to boost that further, just to understand how Security revenue tracks here with ticketing and payment and so forth?

Absolutely. What you saw from 2015 to 2016 to 2017 is very strong growth in our Security business overall. I think we did about $76 million in 2016 and almost $97 million in 2017. I'd expect another 10% to 15% top line growth in our Security business over 2018 and I think that's driven by a combination of some of the initiatives that Ron talked about. One of the things that we note in our Security business is we have several different revenue models. So, in many cases we continue to use the license model we have. In other cases we have more of a pay-as-you-go. In some cases customers have an upfront. And in some of the solutions we have on the Security side, you'll see almost like SaaS model. So, there's a lot of different revenue models, different things in the pipeline, but we still expect continued strong growth in our security.

Okay, great. And my last question, perhaps for Ron, Meltdown and Spectre headline that started the year off here can you just help us understand how Rambus' technology might have kind of helped the situation? I understand data was being dumped in the instruction cycle to try to just process a pipeline of instructions. Just help us understand how Rambus technology would help there and if the realization of these holes create potential opportunity for you guys? Thanks.

On the CryptoManager platform, we have hardware root-of-trust that we develop and we also partnered with Synopsis for their hardware root-of-trust and also with STMicroelectronics. So our focus has been on the key management, and especially moving to a SaaS type recurring revenue model. But that doesn't mean we didn't continue to invest in extending the roadmap for this type of CryptoManager cores. I think it's been public for a while that we've been working with SiFive and RISC, which we think is an outstanding platform. And in development of our solution to do secure processing with a design to be secure from the start, we found this problem, specifically on branch prediction. So, we've been designing around this for a while on our future products. So, this is something that won't be a problem for what we introduce into the future. And in the existing products with CryptoManager, of course it's hardware root-of-trust but it's not a microprocessor it’s small state machine, so it doesn't have that problem. So, we were part of figuring this out quite a while ago as part of this design, and rest assured that Rambus will not be having this problem when we offer secure processing solutions in the near future.

Great. Helpful. Thanks guys.

Your next question comes from Gary Mobley with Benchmark. Your line is open.

Thanks for supplying all the information, a lot of stuff to digest here. On the Lighting side of the business, what are the long-term plans for this business? Is there a possible exit of the business in the form of a sale?

Yes, absolutely. I think we've been direct that this was an adjacent business for many years. I don't think I remember talking about it on the conference call for years. We were happy with its performance as long as it was in a breakeven state, and of course we were willing to manage some transitions as we looked at things. But once the existing contract didn't make sense, we moved into a model to either sell or close the business, something that's really not core to Rambus anymore. So, anything is available, but now that we've been open with this, obviously this is a short fuse because other customers that we were developing, we had to explain the situation to them, literally as we speak.

Okay. And I believe your main competitor in buffer chips last week reported their DDR5 clock and I'm just curious, from a competitive standpoint how you stand relative to this main competitor in having product available in the marketplace?

So, I think as you know there's an RCD the clock and then there's a DB chip, a data buffer. What we were specific about in our announcement, it was both of those, which is significant because the DB is more difficult of the two chips to complete. And we announced this several months ago. So, we feel of course it's going to be a tough race, IDT is sure a very good competitor, but I feel like we're significantly ahead. And the most important thing is, was in the prepared remarks, if you recall, I think it was in PHY for DDR2 and DDR3 was first and had disproportionate market share than IDT was first on DDR4 and had disproportionate market share, and now hopefully we are executing to be first on DDR5 and we'll garner disproportionate market share over time of course.

Okay, keep your fingers crossed. Rahul, can you walk through under ASC 606 what is left in revenue recognition for the most part?

Sure. So, under ASC 606, what's left in revenue recognition is I would not expect any changes to our product revenue or our contractor or other revenue. So, as I mentioned, I think we expect those to be about $20 million for us in 2018. The other thing that's left is any revenue we have from a royalty perspective or an IP perspective, that is unit based. As you know, many of our licensing agreements are fixed-fee. Now that's provided a lot of benefit to us for many years because of predictability and because of the strong cash flow. In some cases we do have royalty base which are unit based, royalties that come in, and those we would still recognize ratably under 606. But a substantial portion of our revenue under the fixed-fee arrangement, we no longer recognize under 606. But you and I have talked about several times, Gary, this actually doesn't change our cash flow or the underlying health of our business. It's just going to be a little bit challenging I think on the short-term just from the reporting perspective.

Got you. Okay. That is it for me. Thank you.

The next question comes from Atif Malik with Citigroup. Your line is open.

Ron, can you just talk about the timing of the revenues for DDR5, is it still calendar year 2019 story or could it be pulled into this year? Then I have a follow-up for Rahul.

I think DDR5, 2019 is the early part and then ramps in 2020 and 2021. These are not short-term revenue productions.

Okay. And Rahul, what'd driving better than seasonal demand in March, and also if you can provide corresponding number for last year for memory buffer chip? You mentioned $35 million to $40 million in sales for this year.

Sure. So, your question is, what's driving better than seasonal in Q1, and I think it's generally a little bit across the board. Certainly you are seeing an opportunity for us on license side and you're certainly seeing an opportunity for us on the security side as well. Now if I look at quarter to quarter, I could see opportunities for us just really across the board in terms of what's there. So it really is that stable base of licensing plus a little bit of health in some of the other groups that we have. I think you could even see a little bit of growth in Q1 from buffer chip than what we had in Q4. What was the second part of your question, Atif?

You provided a number of $35 million to $40 million for buffer chip this year. I just want to know what the number was for last year for buffer chips.

For 2017, our buffer chip revenue was about $21 million. So we'd see about $35 million to $40 million. As Ron mentioned earlier, what gives us faith in growth here is really the design win momentum we had. We've had about double the number of design wins we had year-over-year and I think that corresponds well in terms of the overall revenue forecast.

Thank you.

At this time there are no further questions. This concludes the question-and-answer session. I will turn the call back to Ron.

Thank you everyone. As you can see, we continue to demonstrate our leadership and execution across our products to deliver profitable growth all across the Company. Thank you for your continued interest and time. Have a very nice evening.

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