Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Synaptics Third Quarter 2014 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Thursday, April 24, 2014. And I would now like to turn the conference over to Jennifer Jarman of The Blueshirt Group. Please go ahead.

Thank you, Katya. Good afternoon, and thank you for joining us today on Synaptics' third quarter fiscal 2014 conference call. This call is also being broadcast live over the web and can be accessed from the Investor Relations section of the company's website at www.synaptics.com. With me on today's call are Rick Bergman, President and CEO; and Kathy Bayless, CFO. In addition to the company’s GAAP results, management will also provide supplementary results on a non-GAAP basis, which excludes share-based compensation charges and certain noncash or nonrecurring items. Please refer to the press release issued after the market closed today for a detailed reconciliation of GAAP and non-GAAP results. Additionally, we would like to remind you that during the course of this conference call, Synaptics will make forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operation, plans, objectives, future performance and business. Although Synaptics believes our estimates and assumptions to be reasonable, they are subject to a number of risks and uncertainties beyond our control and may prove to be inaccurate. Synaptics cautions that actual results may differ materially from any future performance suggested in the company's forward-looking statements. We refer you to the company's current and periodic reports filed with the SEC, including the Synaptics Form 10-K for the fiscal year ended June 29, 2013, for important risk factors that could cause actual results to differ materially from those contained in any forward-looking statement. Synaptics expressly disclaims any obligation to update this forward-looking information. With that, I'll now turn the call over to Rick Bergman. Rick?

Thanks, Jennifer. And I'd like to welcome everyone to today's call. I am very pleased to report top line growth that exceeded our expectations for the quarter. With revenue of approximately $204 million, up 25% year-over-year. In addition, we delivered strong non-GAAP net income towards the high-end of our guidance range of $23.7 million or $0.63 per diluted share. We are very excited to report in the first full quarter since the acquisition of Validity that the fingerprint ID business was accretive a quarter ahead of schedule. In fact, our outlook for the fingerprint business has substantially increased. As a result, you'll notice an increase in the contingent consideration liability for the expected earn-out payments that, despite negatively impacting our GAAP results, is quite positive for the company's growth outlook. With the strength of this business, combined with solid growth in our core touch platforms, we expect to post another stellar quarter in fiscal Q4, with sequential revenue growth on the order of 40%. I will now provide an update on our core markets, then Kathy will review our third quarter results in more detail and provide our current outlook, before opening up the call to your questions. Synaptics' presence at Mobile World Congress in Barcelona drove a significant number of booth tours and productive partner meetings. Recent wins across our focused markets were on display, alongside several exciting next-generation solutions, reinforcing our leadership as the innovator for both touch and fingerprint solutions and affirming our position as the leading human interface solution provider. Our activities included attendance at the Samsung Unpacked event, where the Galaxy S5 was announced. As most of you know, we are proud to verify that the Synaptics ClearTouch technology is being used to drive the touch interface for the industry's highest-profile flagship smartphone. With this…

Thanks Rick. We're very pleased with our March quarter results. As revenue of $204 million represents record revenue for a third quarter period, and exceeded our guidance range. March quarter revenue increased 25% year-over-year and was down less than 1% from our December quarter. The revenue mix for mobile and PC products was approximately 74% and 26%, respectively. Revenue from mobile products was up 44% year-over-year and up 13% from the December quarter and consisted predominantly of revenue from mobile phone applications. We achieved strong mobile phone revenue growth year-over-year, including a substantial ramp of our fingerprint ID product. Fingerprint product revenue, which contributed to both mobile and PC revenue, represented approximately 15% of total revenue in the quarter. Revenue from PC applications was down 9% from the prior year and down 26% sequentially. As we've experienced in past quarters, a portion of the sequential decrease was due to the timing of our sell-in versus sell-through between the December and the seasonally slow March quarter. Despite the continuing weak PC application market, Synaptics continues to lead the market for notebook touchpads and clickpads. Non-GAAP gross margin was down 320 basis points year-over-year and down 50 basis points sequentially at 46.6%. It was impacted by overall product mix, including a substantial ramp of our biometrics solution. The biometrics products are a solution sale, where we supply more components and materials than just the chip. Non-GAAP operating expenses were $66.8 million, up $6.4 million from the prior quarter. The 11% increase in non-GAAP operating expenses was primarily due to a full quarter of personnel-related expense related to our acquisition of Validity Sensors, which closed in November, and our post-acquisition investment in both R&D and customer support to accelerate market adoption of our new fingerprint solution, as well as continued investments in our…

[Operator Instructions] Our first question comes from the line of Rob Stone with Cowen and Company.

I know you're probably not ready to break this out by subsegment in terms of the contribution by Validity, but Rick could you provide us any color in terms of some sense of the number of customers or number of different SKUs that are now active in fingerprint biometrics? It sounds like maybe both the PC and mobile parts of the ID business are growing?

I'd say, certainly, exciting growth period for biometrics businesses, we took a fairly substantial risk back in November with a sizable acquisition for us, and it's very encouraging to see the adoption of our solutions and the adoption of fingerprint across the industry. In terms of the ones I can talk about, obviously, they are the announced ones. So the Samsung and Huawei are the 2 phones that we're in, and then every notebook PC uses our fingerprint solution as well. And for the most part, we're engaged with, I would say, just about every OEM on solutions, of varying types of fingerprint solutions that will start to roll out more in the middle of the year to, obviously, then a year from now depending on the timeframe of the various OEMs and the type of solution they're implementing.

Okay. And my follow-up question is on area sensors as opposed to swipe sensors. I think in the past, you said sometime in the second half of the calendar year, you expected products to be shipping with area sensors, is that still the timeline?

Yes, we're executing right on schedule with those products, and we expect to see solutions out there in the latter part of the year, yes.

So the ramp up in the June quarter continues to be swipe sensors?

For the most part, yes. There's more in production with the swipe sensors at this point.

Our next question comes from the line of Andrew Huang with Sterne Agee.

I was just curious if you can give us any color on what your exposure was in the quarter to China handset makers?

China handset makers, we've had that question for a few quarters now. So we have been looking -- we've been talking about our growth in China, and as far as the contribution of the China domestic handset makers, it's been growing. It grew -- it's up to about low-teens right now. So it continues to track. As a percentage of our revenue, it keeps growing as our revenue grows overall.

Okay. And I guess the follow-on question to that would be, when I look at your June quarter revenue guidance, should I assume that there are some fingerprint sensors in there with Chinese handset OEMs or not?

Rob, at this point, we're not going to illuminate where we're getting specific success with our fingerprint sensors. Just to say that we're -- I'll say again to, similar to Rob's question, we're seeing broad-based interest in all regions of the world for our solutions.

Our next question comes from the line of John Vinh with Pacific Crest Securities.

Just a follow-up question on the area sensor. Rick, you said you expect that to start ramping at the end of the year. Can you may be further elaborate, have you secured any design wins for area fingerprint sensors at this point in time?

Well, in this business, we've learned there's no such thing as a design win, so you'd see it sitting on a shelf somewhere. So I don't really want to confirm anything, other than there's been very strong interest in our touch sensor at this point for fingerprint solutions. And it's clearly a trend in the industry.

Okay. And then can you update us your view -- we're another quarter into this, in terms of what you're seeing in terms of customer interest on fingerprint area versus swipe sensors. Is there still more interest in area sensors? And do you expect the market to move more heavily towards area sensors in the back or do you expect it to be more evenly distributed?

Well, since we're 100% swipe now, we certainly expect to see the trend more towards touch. So a part of that is, as well, what's the continued interest in swipe? It still brings a number of advantages. It's going to be a lower-cost solution. In addition, you can actually fit it in a smaller form factor as well. So you could imagine that today's implementations are either on the back of phone or in the case of Samsung is on the front of the phone. But you could also start to imagine OEMs might want to put it on the side of the phone. And at that point, you're only have a couple of millimeters to play with. And it's really hard or impossible to have a touch sensor at that point. And that's where swipe would be more appropriate type of implementation. So clearly, there's a trend to move towards touch, but we expect to see swipe sensors for many years ahead.

Got it. And then my last question, and then I'll get back in the queue is, it sounds like the mix of biometrics is having an impact on your gross margin mix going forward. Kathy, I was wondering, you mentioned that you ship more than just sensors to your customers, are you doing the module packaging? And that's what's impacting kind of the gross margin there? We've also been hearing about some initial yield issues on the fingerprint side, if you could elaborate that would be great.

Well, what we sell is, it's the solution itself, right? It's not just the chip. So it's a chip plus the flex sensor. So again, it's more than just a chip. There's additional materials that come into play. And so I think as we've talked about before, the biometrics product, I mean, their -- when you look at a mobile product or just a chip-based solution, they're about 50. These particular solutions are right around our -- the corporate, what we're running from a corporate average standpoint, and our PC modules are below that. So that's basically what we're doing, no major change really in what we're selling from a solution standpoint.

Our next question comes from the line of Osten Bernardez with Cross Research.

Just to begin, would you be able to give us an update as to what your current LTS contribution is -- large touchscreen and whether that's on track with what you guided towards during your Analyst Day?

Sure. We still haven't -- we haven't broken out large touchscreens yet, and -- but it has been moving up, as we talked about at Analyst Day last year. Large touchscreens was probably playing around 5% of total revenue. And it's been ticking up as a percentage of revenue, but it's still not quite 10%. But it's on track for what we talked about at Analyst Day for this year, where we said we expect it to double or triple.

Got it. And then with respect to your mobile display interface ASPs, would you be able to give us some color in terms of how they are trending on the year-over-year basis and what you're expecting on that to do in the June quarter?

Well, I'll talk about the broader trends and Kathy to illuminate the shorter-term trend. The broader trend is similar to the message we've given in past calls, which is, with a given segment of the market, the ASPs actually kind of hold in there. So our higher-end ASPs for the flagship phones continues to be interesting. However, of course, the market is -- there's more growth in the lower end. So from an overall perspective, of course, as we participate more and more in the low-end and mid-range, that makes our ASPs go down a bit. But we aren't seeing broad-based degradation of ASPs across every segment.

Yes. So just to reiterate Rick's point. I mean, it's really, our blended average ASP is trending down because of the fact that we have a broader mix of mid-range and lower end solutions as we go forward.

Our next question comes from the line of Jeff Schreiner with Feltl and Company.

Rick, I'd like to come back to be the touch-based fingerprint sensors real quickly. Has Synaptics sampled touch-based fingerprint sensors at this time?

Yes, absolutely. We actually showed samples back at CES.

Okay, that's what I though. I just wanted to make sure that I was correct. And then, look, just as a follow-on to that really, are these kind of touch sensor ASPs going to be dramatically different than what you are seeing for the smaller form factor type swipe? We've heard ASP ranges as high as $6 to $8. I mean, is that where we should be thinking about as these solutions start to roll out?

Well, it goes back to Kathy's statement a little bit. It depends what level you're talking about. There's the chip ASP and then there's the sensor. And that can either be a flex or can be actually a BGA type of packaging solution. We offer both. And then, there's actually the entire module, for example, in the Samsung phone, there's the whole -- the button itself. People tend to mix those 3 together at times. We tend to be in that middle category, where we're selling both the chip and some type of sensor. So the ASPs you gave are well above what we would expect to see for an area sensor. It's a rough ballpark that we've given it for the chip-plus sensor around $2-ish for a swipe type of solution, and roughly double that for an area sensor. Of course, that will go down over time, in the coming months and years.

Okay. And just quickly from me, I wanted to clarify with Kathy, and it's my last question here. Is all of fingerprint, including PCs, now in mobile? No longer doing PC and mobile as the types of businesses that you kind of had described before?

Just one second, one of my colleagues pointed out that I made a misstatement. I think it was Rob's question at the very beginning, when I said fingerprint solutions that were in production. I meant to say HTC phone, apparently I said Huawei. We were talking a lot about China, and it must have just done a bit slip there. So we're in production with HTC and Samsung fingerprint solutions. So sorry, sorry for interrupting, go ahead Kathy.

What was the question again?

Yes, no problem. Are we doing all fingerprints now, mobile and PC, in mobile?

No, we are still in the broad categories of mobile. That would include the fingerprint solution in mobile products. And in PC, that includes fingerprint for PC. So the number that I gave broadly -- the 15% of total revenue, I mean, that's a combination of all of the solutions, the mobile solutions and PC solutions.

Our next question comes from the line of Rajvindra Gill with Needham & Company.

Just a question, Kathy on the OpEx. You're mentioning that it's increasing kind of sequentially. As we do kind of the math, it seems like the OpEx is up about $6 million, $7 million quarter-over-quarter. Should we be expecting that type of an increase in OpEx on a sequential basis? Or is it going to kind of taper off? If you could maybe provide some OpEx insight going forward, it would be helpful.

Sure Raji. The -- if you look at the OpEx in the March quarter, I mean, the biggest reason for the increase in the March quarter was the fact that we had Validity for an entire quarter versus December, when we only had them from November forward. So that was -- we picked up a full quarter of Validity in the March quarter. Going forward, I would say that the absolute number will be lower than what we saw last quarter.

Okay. And in terms of the, Rick, the applications for fingerprint technology, I was wondering if you could elaborate on what are those that are being developed by the industry in addition to just the unlocking of the phone? And how is the ecosystem being developed in order to spur this technology across more and more devices?

Great question, Raji. Certainly, it's exciting to announce flagship phones that are utilizing our solution. But in some ways, what's been really exciting over the last month or 2 is to see how far and how quickly the ecosystem is moving forward. There is, as you mentioned, there's the unlocking in the phone, the convenience factor there. But more importantly, we want to see a whole security and payment system out there. So the FIDO Alliance has just gained tremendous momentum. And that's where we're putting most of our support behind, is how can we create an industry consortium that's seamless to the end-users, so that if you want to make a purchase or some type of banking movement, then you can do that very securely with a fingerprint type or other authentication type of solution. So the fact that you saw, as an example, just this week Samsung and ARM jumping into the FIDO Alliance as board members is really a strong indication of how much momentum that this has across, with the industry's leading core processor provider and the world's largest smartphone provider coming on board. We're tremendously excited as one of the first places to start with applications.

Yes, and just last question, Kathy, in terms of cash. End of the quarter was $391.5 million. So obviously, some of that cash is going to be used to pay out the Validity folks based on the earn-outs. Is there any other kind of usage of cash going forward?

Raji, we look at cash, basically, the same way that we always have. So we're still looking at investing in the business. As you said, paying the earn-out payments. So based upon our increased outlook, the -- our likelihood of paying a much higher earn-out payment is definitely out there. And we still have many initiatives and process looking at for additional strategic opportunities. And there's still opportunistic share backs in our view as well.

Our next question comes from the line of Charlie Anderson with Dougherty & Company.

I just had a couple of housekeeping questions. Number one, your largest customer, 10% customer, what's the percent of revenue?

Yes, we had one 10% customer, and it was 32%.

32%. And then on the PC, I wondered if you could help us with, maybe what the contribution was in that segment for fingerprint? I don't know if you're willing to segment that. And then just in general, noticing that, that's down even with fingerprint, just some of the dynamics that are going in the PC, and then what are you thinking going into June there, in terms of embedded in your guidance?

The biometric sits, the biometrics had a pretty steady run rate. It's really kind of a few million dollars, around $5 million. And as far as PC in general and the dynamics there, I mean, the general market trends for PC this year, in calendar '14, is it's still -- the market is still looking like it's down some. We've been doing very well in PC, if you look at our 3 quarters to date, I mean, we're -- we're flat to up slightly. So really, there is just dynamics for us in the quarter-to-quarter sell-in, sell-through.

Our next question comes from the line of Kevin Cassidy with Stifel, Nicolaus.

This is Dean Grumlose calling in for Kevin. Regarding your fingerprint recognition, and seeing the expectation that this technology will ramp very quickly in the market. Could you lay out some expectation of what you believe what may be a reasonable share for Synaptics perhaps in terms of the difficulty of doing this or your time advantage. Basically, are you seeing much competition in this area so far?

Yes, Dean. Again, a great question, we certainly are seeing competition out there. Competition only makes us stronger and better. And I think we've proven that we're quite capable of competing out in the marketplace. When we acquired Validity back in November, we made it very clear that our goal was to be the clear #1 provider in this space, and that goal is unshaken. So we're continuing to march forward. As I mentioned in my prepared remarks, I believe we have commanding share, basically 100% in the notebook segment right now. And then as you look in the mobile segment, it's very high as well, obviously, fueled by the great design win that we had on the Samsung Galaxy S5. And we plan to continue to go from there.

In the area of the ThinTouch keyboard, could you provide some outline of when this may start to contribute substantial revenue and what kind of design pipeline you may have at this time? Anything you're able to offer is helpful.

Okay. Well, again, we previously -- let me try to help to shed some light. Previously, we were targeting more towards the tail end of this calendar year to start seeing some revenue. But as actually, we've worked with our ODM and OEM partners out there, it's become clear that it's going to move out a little more in time than that. And we're looking at, as I mentioned in my prepared remarks, we are looking at potentially different models because it's -- frankly, keyboards are a tough, tough business model out there, typically running in the mid-teens from a margin perspective. That's quite a bit different than what Synaptics does and is capable of doing on a sustained basis. So I mentioned licensing looks to be the more promising avenue other than some niche plays that we may make in the keyboard market. But it's not a calendar '14 opportunity for us.

Is it more adoption period or is it cost and pricing or?

Well, it's always a combination. There is usually never one reason. So certainly, cost is a factor that comes into the notebook segment. Just like everywhere else, they're under high pressure from pricing as they try to drive down to the $299 level and potentially even below. The technology, we've been able to get to a state now where it's very exciting. And as we demoed at CES and at Mobile World Congress and elsewhere, we actually have a pretty solid solution now. So we just have to find that right combination in terms of the business model and the right applications where we can be successful with this technology.

Our next question comes from the line of Brett Simpson with Arete Research.

I had a couple questions on fingerprinting. And as we go back to the touch controller days, I mean, in smartphones, we saw quite a big shift from module to chip-only solutions. And I'm wondering, how do you think the fingerprinting market can play out when you get touch or just sensing over the next couple of years. Do you think this is a similar shift, where it's going to be a chip solution that the company sell in smartphones? Or do you think this is going to be a module opportunity? And maybe you can explain why, if you think it's -- if you think fingerprinting is going to be a module offering for Synaptics over time?

No, I would characterize it as, we were using some of the same terms, but it's certainly different in terms of the relative cost and values and so on. From a fingerprint sensor, and that's why I said it's a chip-plus sensor. So you can't really ship the chip without the sensor, it has to be mounted someplace. So it's mounted near the BGA, which then becomes the sensor or in the flex cable, which then becomes the sensor. It's actually an awkward business model to try to disaggregate that. And then the relative cost is a lot different. Back in the old touch days with the module, it could be a $8, $9, $10 sensor with a $1.50 device. Here, the relative values are much different in terms of the chip value versus the flex value, so you don't get that margin stacking that started to happen in the, call it the old days, which was 3 years or 4 years ago.

Maybe just to follow-up on that. I mean, can you just compare what would you sell as a sort of complete module in touch area sensing? And how do you think the chip ASPs might evolve? Because we hear a lot of different numbers from the various disclosure, one against the market as to how do you think a thumb-based chip solution might sell for over time, if there's an incubation play there versus a module and module price? So any numbers you can share with us would be very helpful.

Okay, I understand. It's unfortunate the real challenge because there's a very wide range of potential answers there because it's highly dependent on what the OEM wants from a module perspective. You can certainly see something pretty basic, which would be just, in effect, our sensor with some type of coding on it, to something very elaborate, which potentially the iPhone is in that, the other extreme. And so, it can be from a couple of dollars at or to many dollars at or on top of the basic chip-plus sensor. So in terms of the chip-plus sensor, I kind of gave you a rough range. And that's even pretty rough, because it's highly dependent on exactly what we implement there, but kind of the $2 to $4 to $5 range.

Excellent. And maybe just one final follow-up. In a traditional touch controller business for smartphones, you mentioned that in the flagship market, the high-end ASPs have hang in there quite well, so if we back out the Validity revenues in the June quarter you just guided, if the organic smartphone touch controller business can grow year-on-year or is that going to be relatively sort of flat or give us some direction, if you can on how you think that organic business is going to trend in mobile.

We haven't break -- I mean, Brett, we haven't broken out all the details on Q4, but I think we have very strong expectations for the June quarter, and we're seeing nice growth basically across the product set.

Yes, I think that's an important point to emphasize, not too much year-over-year, but sequential quarter-over-quarter. I want to say it at least one or 2 more times because I'm not sure I'll ever get to say it in my career. 40% sequential growth. So we have a broad range of products. So the laggards are growing 20% sequentially, quarter-over-quarter. As an example, if you want to position it that way. And then obviously, we have some star products that are growing at a much higher rate. But on average, of course, it's 40%. But we're seeing tremendous growth opportunities across all the different products.

And I think the other thing that is very exciting is, if you look at the comments that we made, as well as core business basically is, right now, it's not -- it's basically achieving more than the 20% -- more than the 21% than -- that we achieved in fiscal '13 that we laid out at the beginning of the fiscal year. And Validity is basically -- and the fingerprint products are topping it up even more. So a very successful year.

I mean, is there any guidance you can give us? I mean, you've done a great job in the flagship part of the market. And we can see there's been a shift. All of the growth are going to be low-end smartphones. Can you give us sort of relative market share, if you're willing to split the business up between flagship and low-end? I mean, where do you guys sit, when you sort of sit back and look at the overall accounts there? Where do you sit in the flagship market position and the market share? And how should we think about Synaptics in the lower-priced categories?

Yes. Brett, thanks a lot again for the question. And as we've mentioned, it's a real challenge to get our market shares in these various businesses, and then when you break it down into segments. So we kind of circled our financial Analyst Day in August is when we shed light once a year and have all our marketing and sales people do their best job to gather all those facts into one place. So here, we'll just be able to do broad strokes. And the broad strokes are very high share in the high-end part of the marketplace. Obviously, excluding Apple in our analysis. And then, as we kind of move down, our share becomes relatively lower, thereafter. We are making strides in that low-end and mid-range. Really, the display integration is what's opening the door for us there. We've made -- it's been a several year investment, as you now. And it's good to see the volume really started to kick in, in our March quarter, in terms of the number of solutions actually getting out to our OEM partners and then, of course, going out to end users.

[Operator Instructions] Our next question comes from the line of Liwen Zhang with Blaylock.

I have one question on gross margin to follow on John Vinh's question. So looking at your computer and the mobile mix for the March quarter, it was pretty similar to, I believe, your September quarter. And so what I don't understand is, look at the delta between these 2 gross margin. And is it fair to conclude that fingerprint solution is more toward to your low-end of corporate average gross margin range?

Yes. I mean, Liwen, as I mentioned before, the biometric fingerprint solutions, they're more at the average gross corporate gross margin that we're at. And if we go back a couple of quarters we're also -- the statement around what we've been doing as far as penetrating further in the market. So again, quarter-on-quarter, if from a mix standpoint, we continue to have very, very strong share in the premium side of the smartphone market, but we also are continuing to grow the number of solutions in the mid-range and the lower-end. So again, as we progress, there is some mix movement within the mobile side of the business, and now we're pulling up -- pulling in the biometrics products as well.

Okay. So despite a lower ASP for mid- to low-end smartphones, so the gross margin for the solutions for mid- to low-end also is less than for the high-end, is that fair to say that?

Yes, we said that for a while. So with premium is great, with very nice gross margin. And as you get to the mid- and the lower-end, we do give up a few points.

Our next question is a follow-up question from the line of Andrew Huang with Sterne Agee.

There's a lot of -- been a lot of talk about fingerprint sensors and then the transition from swipe to area. I was just curious from a gross margin perspective, is there any difference between those 2?

There's no baseline reason why there would be a difference, Andrew. I mentioned the type of sensors. You can use both in either an area or a swipe type of sensor and both have a touch controller. So over time, potentially, as swipe will move, as I mentioned, more to lower-end phones a year or 2 years from now, you could expect that natural trend to occur, but nothing in the next several quarters. That would suggest a different margin profile.

Great, and then my follow-up was on ThinTouch. Obviously, there's a lot of value of having a thin keyboard for, let's say, a tablet cover, and there's also a lot of value in having a thin keyboard for a notebook. So I'm just curious, like based on your best guess, where do you think your first design win would be in?

Well, we pointed to a few areas of value. You kind of hit on one of them, which is tablet covers, and then the other one is retractable type of keyboards, which you simply can't do with a traditional keyboard.

And this concludes our question-and-answer session. I'd like to turn the conference back over to management for closing remarks.

All right. Well, thank you. We obviously had another exciting quarter, and it looks like we're in the midst of even more excitement this quarter. So I'd like to thank everybody for joining us, and I look forward to updating you next quarter.

Thank you, ladies and gentlemen. This does conclude our conference for today. Thank you for your participation. You may now disconnect.