Altair Engineering Inc.
Q4 2021 Earnings Call Transcript

Published: 26 Feb 2022

[Operator:]

Good day. And thank you for sending by. Welcome to the Altair Fourth Quarter 2021 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dave Simon, Chief Administrative Officer of Altair. Please go ahead.

[Dave Simon:]

Good afternoon. Welcome, and thank you for attending Altair's earnings conference call for the fourth quarter and full year 2021 ended December 31, 2021. I'm Dave Simon, Chief Administrative Officer of Altair. And with me on the call are Jim Scapa, Founder Chairman and CEO; and Matt Brown, Chief Financial Officer. After market closed today, we issued a press release with details regarding our fourth quarter and full year 2021 performance and guidance for the first quarter and full year 2022, which can be accessed on the Investor Relations section of our website at investor.altair.com. This call is being recorded, and a replay will be available on the IR section of our website following the conclusion of this call. During today's call, we will make statements related to our business that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from our expectations. These risks are summarized in the press release that we issued earlier today. For a further discussion of the material risks and other important factors that could affect our actual results, please refer to those contained in our quarterly and annual reports filed with the SEC as well as other documents that we have filed or may file from time to time. During the course of today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release. Finally, at times in our prepared comments or responses to your questions, we may offer metrics that are incremental to our usual presentation to provide greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future. With that, let me turn the call over to Jim for his prepared remarks. Jim?

[Jim Scapa:]

Thank you, Dave. And welcome to everyone on the call. Today, I will discuss our strong results for 2021, the recent acquisitions of World Programming and, some additional awards the company received and the overall momentum we are experiencing early in 2022. Altair had an excellent fourth quarter and full year 2021 with all of our key numbers for Q4 and full year coming in above our guidance ranges. Our vision for driving smarter decisions with computational science and artificial intelligence is resonating with customers. Our products continue to gain market share, and we are expanding our footprint across all verticals. Total revenue for Q4 2021 was $140.8 million, including software product revenue of $122.4 million. Adjusted EBITDA for the quarter was $24 million, representing a 17% adjusted EBITDA margin. Total revenue for the full year 2021 grew 13.2% to $532.2 million compared to $469.9 million in 2020, and software product revenue for the full year 2021 grew 15.8% to $453.7 million compared to $391.7 million in 2020. Software product revenue for 2021 represented 85.3% of total revenue compared to 83.4% during 2020. And our recurring software license rate remained high at 92% for the year. Adjusted EBITDA for the full year of 2021 was $85.3 million, representing growth of 49% compared to $57.3 million in 2020. Free cash flow grew 100% in 2021 to $53.8 million from $26.8 million in 2020. Our adjusted EBITDA margin for the full year of 2021 grew to 16%, a significant improvement over adjusted EBITDA of 12% in 2020. In December of 2021, Altair acquired World Programming, a UK-based technology company, specializing in data analytics software used by many of the world's leading companies. World Programming brings great technology to Altair as well as a world-class team of mathematicians, statisticians, data scientists, programmers and thought leaders. World Programming's platform, WPS Analytics, supports development and execution of software applications written in popular languages such as Python or SQL and the SaaS language, including the ability to develop, compile and execute millions of models built using the SaaS language. LEPS Analytics will be incorporated into Altair's data analytics solutions suite and available under Altair Units. WPS Analytics technology integrated into the powerful low-code Altair solution creates a strong and unique offering to address the requirements within enterprises, programming data scientists and business analysts including the ability to develop, compile and interpret SaaS language programs. WPS Hub, combined with Altera's MLOps environment, will make it straightforward and simple the productionized machine learning models, programs written in the language of SaaS and modern data analytics applications. The acquisition of World Programming aligns with Altair's open architecture philosophy, giving customers easy access to technologies in a flexible and intuitive environment. We see the acquisition as a significant opportunity to help companies transition to modern open solutions and languages, while preserving significant investments made, developing critical enterprise business applications in the SaaS language and leverage the best elements of this older technology. As Altair broadens our data analytics offering under the Altair Units business model, we believe customers will increasingly appreciate the value we deliver, and Altair will grow to be a very significant player in this market. We recently announced the acquisition of Cassini, a next-generation cloud native platform for Industry 4.0. Cassini's technology manages the entire product life cycle from concept to customer through four key product pillars

[Matt Brown:]

Thank you, Jim. Hello to everyone on the call. And thank you for joining us. Q4 was another fantastic quarter in what was one of the most successful years in Altair's 37-year history. We continued our streak of beating expectations across the board, notching significant wins on our way to achieving record high revenue and adjusted EBITDA for any fourth quarter in the company's history. Total billings for the quarter were $159.1 million, an increase of 9.0% compared to Q4 2020. Our strength in software billings was once again driven by strong new and expansion opportunities and high retention on our renewal base. We saw growth in all three geographic regions and particular strength in the technology and BFSI verticals. Our data analytics products are continuing to gain traction with growth there outpacing simulation and HPC, which is a trend we saw all year. Services and other billings were in line with expectations, slightly down from Q4 in the prior year. In total, the strength in billings resulted in software product and total revenue exceeding our expectations for the fourth quarter. Software product revenue was $122.4 million, or an increase of 7.7% compared to Q4 2020. Total revenue, which includes services and other revenue, was $140.8 million, or an increase in 5.5% compared to Q4 2020. Our recurring software license rate, which is the percentage of software product billings that are recurring, continues to be strong at approximately 92% for the year. As a reminder, a significant portion of our revenues are billed in currencies other than the U.S. dollar and are, therefore, impacted by changes in FX rates. Relative to Q4 2020, our revenues were unfavorably impacted by changes in FX rates of just over $2 million during the quarter. Non-GAAP gross margin, which excludes stock-based compensation and restructuring expense, was 78.1% in the fourth quarter compared to 76.2% in the prior year, an increase of 190 basis points as our software revenue mix, which carries higher gross margin increased as a percentage of total revenue. Software revenue was 86.9% of total revenue in Q4 2021 compared to 85.1% in the prior year. Over the long term, we continue to expect a general mix shift towards software product revenue as growth there will outpace services and other revenue. Non-GAAP operating expenses, which excludes stock-based compensation, amortization of intangible assets and restructuring charges, were $87.4 million compared to $81.9 million in the year ago period. That year-over-year increase was primarily concentrated in sales and marketing expenses, reflecting increased commissions expense as a result of overperformance on software billings for the year. Adjusted EBITDA in Q4 2021 was $24.0 million or 17.0% of total revenue compared to $21.7 million or 16.3% in the prior year quarter. This increase compared to prior year quarter as well as relative to our expectations was driven by the increase in revenue in the quarter combined with our disciplined spending. It's worth looking back at the entire year on the incredible progress we've made. At the beginning of the year, we laid out a vision to achieve double-digit revenue growth while expanding our adjusted EBITDA margin. Our focus paid off. We invested heavily in product development, bringing the best technology and simulation, high-performance computing, data analytics and artificial intelligence to our customers. And we invested in our sales and marketing motion, elevating our brand awareness in the market. These efforts help drive software product revenue to $453.7 million for the year, an increase of 15.8% compared to 2020. And we achieved total revenue of $532.2 million for the year, an increase of 13.2% compared to 2020. Our non-GAAP gross profit increased $58.1 million or 16.5% to $409.2 million or 76.9% of revenue in 2021 compared to $351.1 million or margin of 74.7% in 2020. In operating expenses, we invested in areas for growth while persistently reducing select other costs. This helped drive adjusted EBITDA to $85.3 million or 16.0%, an increase of 48.8% compared to 2020. This is a 380 basis point increase to our adjusted EBITDA margin compared to 2020. And this increase in profit is driving an increase in free cash flow, which more than doubled year-over-year to $53.8 million, which is freeing up cash to invest in our business and fuel future growth. At the beginning of the year, we set out to grow revenue in the double digits, grow gross profit greater than our growth in revenue and grow adjusted EBITDA greater than our growth in gross profit. And in 2021, that's exactly what we were able to do. Combined with some of the competitive wins Jim mentioned a few minutes ago, several important acquisitions and notable awards 2021 was truly a remarkable year in our history. Turning to the balance sheet. We ended the year with $413.7 million in cash and cash equivalents, a decrease of approximately $42 million from the prior quarter. The quarter-over-quarter decrease is primarily due to approximately $49 million outflow related to our acquisition of WPL, partially offset by approximately $5 million free cash flow. As a reminder, our cash flows throughout the year are seasonal in nature, typically with Q1 being our most significant cash flow quarter, followed by Q2. Let's turn to guidance for Q1 and full year 2022. We've provided detailed guidance tables in our earnings press release including reconciliations to comparable GAAP amount, which was issued after close of market today. For Q1, we are expecting software products in the range of $134 million to $137 million or year-over-year growth of 3.4% to 5.8% and full year 2022 in the range of $496 million to $508 million or year-over-year growth of 9.3% to 12.0%. We expect services and other revenue to be down slightly compared to 2021. As a result, we expect total revenue for Q1 in the range of $152 million to $155 million or year-over-year growth of 1.2% to 3.2% and full year 2022 in the range of $568 million to $582 million or year-over-year growth of 6.7% to 9.4%. Currency changes relative to the prior year are unfavorably impacting year-over-year Q1 total revenue growth by approximately 2 percentage points and unfavorably impacting year-over-year 2022 total revenue growth by approximately 1.25 percentage points. From a cost perspective, we've been successful in our disciplined approach to spending and expect to carry that approach into 2022. For Q1, we expect adjusted EBITDA in the range of $36 million to $38 million or 23.7% to 24.5% of total revenue compared to $37.0 million or 24.6% of total revenue in the year ago period. And for full year 2022, we expect adjusted EBITDA in the range of $96 million to $106 million or 16.9% to 18.2% of total revenue compared to $85.3 million or 16.0% of total revenue in 2021. In January 2022, we satisfied the existing litigation judgment against WPL of $65.9 million, which was the liability we assumed as part of our acquisition. This payment is captured in free cash flow in 2022 and as a result, we are expecting free cash flow in the range of $5 million to $12 million for 2022. We are pleased with our growth in free cash flow from core operations year-over-year, which is benefiting from our overall increase in profitability. As a reminder, our cash flow expectations are sensitive to billings and collection patterns, which fluctuate seasonally. In particular, our historical pattern has shown a free cash inflow in the first half of the year, primarily from collections on billings from Q4 and Q1 and a smaller free cash outflow in the second half of the year. Besides the litigation settlement amount, I just mentioned, we're expecting that pattern to continue this year. In addition, today, we announced our Board of Directors has approved a $50 million share repurchase program. Having this program in place allows us to be nimble and gives us the flexibility to opportunistically return capital to our shareholders, while still focusing on our primary goal of investing in our business to drive growth. We have not committed to specific share volumes or prices and view this program as being a small part of our overall balanced capital allocation strategy. I couldn't be prouder of what this team was able to accomplish in 2021, and I'm extremely excited about what lies ahead. With that, we'd be happy to take your questions. Operator?

[Operator:]

Our first question come line of Gal Munda from Berenberg. You may begin.

[Gal Munda:]

Hey, thank you for taking my question. The first one is just, Jim, you mentioned a lot of enterprise deals and activity over kind of seven figures, more than what you've said in the past. And I was just trying to see if there is a trend – if you are seeing the trend developing where you're becoming more of a partner rather than the tool provider to some of these customers that have been with you for a while. In other words, maybe go across different types of physics, but not just that, also bundling in things like SimSolid and the data side, on the token side when you're kind of thinking about the revenue the works? Thank you.

[Jim Scapa:]

Thanks, Gal. That's a good question. So we are in fact, if you look at the number of deals, large-scale deals that we're doing. There's many, many more. It's constantly increasing. We don't track that as a metric for you, but we track it internally, and the numbers are going very much in the right direction. And it is in fact what you're talking about, we are more strategic and a lot of customers. We are selling the entire portfolio of our solutions not just point solutions typically, and that's a big part of why. So yes, thanks for the nice softball question.

[Gal Munda:]

No. Okay. Just you would expect that to kind of continue going forward as well, I guess, you're saying?

[Jim Scapa:]

I do, yes. I'm very focused on strategic accounts. So yes.

[Gal Munda:]

Right. Right. Right. Yes. As a follow-up, maybe just thinking about, again, the margin progression looks impressive like, like you said, Matt, more than 2 percentage points improvement year-on-year. If we look into next year, you're getting very, very close to your target that you set out for – at the Capital Markets Day. My question here again is if you see that progressing faster than you expected, are you going to be reinvesting in growth? Or do you think you could potentially get there a bit earlier than what you set out in May last year?

[MattBrown:]

Yes. Thanks, Gal. So, you're right. I think we are well on our way to our goal of 20% exiting 2023. But if you kind of look at how we've progressed, we've been really careful about not trying to get to ahead of profit and sacrificing growth. So, we wanted to be really, really balanced and investing in our technology and in our sales motion. And so, from that perspective, if you kind of look at the midpoint of the guide to about 17.6% EBITDA for 2022. That is about two-thirds of the way through where we started at 12.2% on our way to 20%. And so, we feel good about that. Two-thirds of the way through being two years out of the three – on our way to a three-year plan, we may – as we move along, we may continue to adapt and adjust and there's a chance that we save a little bit extra for the bottom line. But I do think we want to make sure that we're continuing to invest for the long-term. We want to be around for a nice long time.

[Gal Munda:]

That makes a lot of sense.

[Jim Scapa:]

Thank you.

[Gal Munda:]

I will let other ask the question. Congrats on a great quarter. Thank you.

[Jim Scapa:]

Thank you.

[Operator:]

Our next question will come from the line of Jackson Ader from JPMorgan. You may begin.

[Jackson Ader:]

Great. Hey guys thanks for taking my question. The first one is for Jim on the Crash and Impact segment. So, I think you mentioned Radioss kind of becoming – gaining some real traction in rail. I'm just curious, what's the underlying reason why your solver there would be a stronger fit for rail rather than maybe in automotive? And then relatedly, how big is the rail vertical within that entire Crash and Impact solver market?

[Jim Scapa:]

So, I actually don't know the answer to the size of rail, but I mean it's obviously quite a bit smaller. It's still significant when you go outside the U.S., it's an important sector, and we've managed to capture it. I think more of it is related to relationships and all of that because we have a very strong footprint across all the products that we have. In the world of simulation, there's – these are sticky markets. And so, the tools used for Crash and Impact have been in place and they don't tend to change a whole lot in the automotive sector. They are – there is opportunities to do some changing. We've been very successful in China, for example, where it's a little bit more greenfield or it's been more greenfield in the Crash and Impact sector. But the Radioss product is a superb product, very strong in electronics, for example, very strong in a number of different areas and obviously, very strong in automotive as well. But in rail, we managed to get a strong position. We understand the applications that they're doing there, and we have good relationships.

[Jackson Ader:]

Okay. Great. And then a follow-up on the acquisitions for Matt. Number one, I mean, obviously, I assume that this litigation was known when you made the acquisition of WPL. But was that – how did that factor into, I guess, the overall purchase price, number one? And then number two, just simply how much do you expect those recent acquisitions to contribute to revenue in 2022?

[Matt Brown:]

Yes. Thanks, Jackson. So yes, absolutely did know the litigation liability when we made the acquisition that was accredit our purchase price. Yes. It was just a function of the accounting. It just so happens that when this liability is acquired and then the cash movement goes against that liability. The cash flow is flowing through cash from operating activities rather than where you might expect to see it in finance activities from an acquisition perspective. And so, it was built into our model and our deal thesis. And when you sort of adjust for that out of free cash flow, you end up with free cash flow at a range of $71 million to $78 million, which is year-on-year growth of 32% to 45%. So, it's more sort of a normalized free cash flow guide. With respect to the acquisitions and revenue that we're expecting into 2022, we're not giving precise numbers, but WPL historically had revenues in the $19 million or so range. And so, it's not extremely significant to our full year guide. It represents a couple of percentage points. We expect that as we invest in that business and ramp that up, we'll potentially get to see some growth in future years. But we're not expecting to see growth from that number into 2022.

[Jim Scapa:]

And if I can just add to that, we – Jackson, we do see the, and I think Matt mentioned it in his remarks earlier, data analytics is growing very, very fast for us. If you look at simulation, HPC and data analytics, data analytics is a pretty fast growth market for us overall. So WPL and their technology just fits within that space.

[Jackson Ader:]

Okay. Great. And then on the Cassini side, the other acquisition contribution?

[Matt Brown:]

Yes. No incremental revenue on that acquisition as into the 2022 guide.

[Jackson Ader:]

All right. Thank you.

[Jim Scapa:]

That is a technology and equity hire, if you will.

[Jackson Ader:]

Understood. Got you. All right. Thanks guys.

[Jim Scapa:]

Thank you.

[Operator:]

Thank you. Our next question will come from the line of Blair Abernethy from Rosenblatt Securities. You may begin.

[Blair Abernethy:]

Thank you and nice quarter, guys. Just the – just following on the World Programming, can you just describe, Jim, how you're planning to go-to-market with this now? Obviously, they must have had an existing sales force and so forth. And what sort of the – what's the integration profile looks like with the rest of your products?

[Jim Scapa:]

So, we expect to integrate the products pretty nice when sales teams are already – almost entirely integrated, the development teams are pretty integrated as well. Obviously, it takes a little more time to get everyone comfortable culturally and all that. But it's a very technical culture. It's one that fits easily sort of different than data watch, if you will. This is a pretty easy integration for us. As far as how the products go, they were very, very focused on programmers. So, if you think about data science and an enterprise, you have sort of two different types of users. You have the programmers, data science programmers who are deep down into the guts and writing code. And then you have business analysts that really want to use sort of low-code types of technology that auto-generate code and build out the applications. So, they were probably more focused at the programmers and so they support really well Python and R and SQL programming. And then big differentiator that they have, they have built a compiler or interpreter for the SaaS language. And that's a really nice and very unique piece of technology that is really important because a lot of companies have built a lot of code in SaaS language. And many of these companies want to move to more modern languages, but they have a lot of important code that's still written in the SaaS language. And there's also some great capabilities that you can access. So, they support mix language types of code. It's a really great environment for building all of that. And we see now with the integration of their tools, being able to sort of address both communities and in enterprise programmers and the business analysts with these tools and also support an environment which has a mix of modern codes as well as, if you will some legacy technology that was written in the SaaS language.

[Blair Abernethy:]

Great. That's very helpful. Thank you. Switching gears just a little, Jim, the – can you just give us an update on the – on your channel partner work that you've been doing in 2021, how that's come along? And where are you seeing some – where you're seeing some traction?

[Jim Scapa:]

So, I think that that is making progress. I'd like it to go faster, if I can be really on us. But we – if you look at our numbers, the indirect business is continuing to gain. And more importantly, within the organization every region is much more engaged in working with the partners, supporting the partners. And we think it's going to be really critical to get to that next level as a business. To really get to scale, you have to have an indirect component that's really substantial, and we're really committed to that. So, it's coming. I'd like it to come faster, but I think there was a real progress made last year, and it's really one of our Number 1 priorities for 2022.

[Blair Abernethy:]

Great. Thanks very much.

[Operator:]

Our next question will come from the line of Matt Hedberg from RBC Capital Markets.

[Dan Bergstrom:]

Hey, it's Dan Bergstrom for Matt Hedberg. Thanks for taking question. Jim, maybe another softball for you, I would love to get your updated thoughts around chips in the supply chain and what you're seeing and hearing from customers? You've provided good context around this on the last several calls. Just would love an update what you're seeing as we enter 2022 here?

[Jim Scapa:]

So, I mean, for us, I just don't think it's a very significant impact to be perfectly honest. Actually, the one place where we actually have a sort of direct impact is the other business line, which is that lighting business because there's probably one-year lead time on semiconductor components that when we're ordering them. So that is a pretty big impact. And it gives me a view into what many of my customers are really sort of managing and dealing with, particularly if you have a new line product where you haven't established the supply chains. So, for example, our older line lighting products, we have much less difficulty but newer designs. Newer products where we're establishing those supply chains that's much harder. But again, for Altair in the software business and I suspect for most of my compatriots, I don't think it's a huge impact for us, and we certainly haven't seen that.

[Dan Bergstrom:]

That's great. And then software was really strong again this quarter. I know the strength is broad-based, but are there any particular areas of strength that you could point out or maybe drill down into for us?

[Jim Scapa:]

I mean I think it's the obvious areas. We do – first of all, it is really across all regions, all three regions with really strong growth actually. Data analytics is stronger in the U.S. because it's – we spent more time with that, but we are investing to take it more and more overseas, and I think that's going to shift. The WPL business has a lot of overseas component, and I think that's going to help. Technology and defense and off-road are pretty strong particular markets for us, but auto and aero are still growing very substantially actually. So, it is really across the board. Sorry that boring answer.

[Dan Bergstrom:]

No. It's great to hear. Thank you.

[Jim Scapa:]

Thank you.

[Operator:]

Our next question will come from the line of Ken Wong from Guggenheim. You may begin.

[Unidentified Analyst:]

This is Nancy on for Ken. Thanks for taking the question and congrats on the quarter. Two questions from me. So, services, you guided just slightly down next year. So, wondering how we can think about that business going forward in fiscal 2022 and beyond? In the out years, if there's any dynamics we should be aware of as we build our models? And then secondly, as we look at first quarter, was there any kind of meaningful pull-forward activity in 4Q to be aware of? Thanks.

[Jim Scapa:]

I'll let Matt take that.

[Matt Brown:]

Yes. Yes, happy to take that. So, when we look at our services and other business, you really have to kind of get underneath it. And it's the CES business that we're seeing struggle a bit as we head into 2022. There's still a little bit of a hangover from COVID actually, so we're seeing an impact there, particularly in Q1. As we make our way through the year, it starts to level off a bit and get a bit better. But we do expect, at least in the long term that that business is going to come back around and continue to grow in the sort of low- to mid-single-digit range. Software-related services that's included in that services and other is actually doing pretty well. So, it's really kind of CES that's bringing that overall bucket down. And I forgot your follow-up question. I apologize. Can you...

[Unidentified Analyst:]

That was helpful. Was there any pull-forward activity in 4Q?

[Matt Brown:]

Right. No, there wasn't any substantial pull-forward activity. When we're heading down into the year and the end of the quarter, you can't always predict when deals are going to close. But we did not see any meaningful activity crossing quarters at least outside of norm.

[Operator:]

And our next question comes from the line of Bhavan Suri from William Blair. You may begin.

[Dylan Becker:]

Hey guys, it's Dylan on for Bhavan. I appreciate you squeezing us in here and congrats on the strong quarter and into the year. Maybe a two-parter and so we've seen you guys kind of offer up some of the, I think, the PCB design capabilities for free here with some new users. It sounds like that's being kind of viewed favorably and giving a broader opportunity maybe with some of the less technical design-focused engineers. Are you thinking at all about potentially expanding that functionality, offering kind of maybe other tools across the platform with this more kind of like premium-based approach as an additional way to onboard some of these users? And then maybe for Matt, as a follow-on to that, is there any kind of metrics or anything you could share around adoption or usage of the free solution? And how maybe some of those conversions has trended as well? Thanks guys.

[Jim Scapa:]

So, I mean, strategy around the – and you're talking about the LTM free solution that we've put out in the market, there's a lot of interest. So that is super positive. It's way too early to sort of measure that at this point. But we are trying to grow the visibility of our offering. And we think there's a lot of value in what we're offering there. And so yes, I mean it's a strategy to get visibility. It's a strategy to get some new users, a very large community and we expect to see a good deal of traction there. We're seeing a lot of traction also for the solution in large enterprise customers sort of separate from the LTM freemium now. And the whole offering for PCB continues to sort of evolve and we're feeling really good about it.

[Matt Brown:]

Yes. As far as tracking metrics, it is just too early. We're excited about the opportunity, and we do think it's a really promising market. And honestly, in all likelihood, it's probably not something that we're going to be providing metrics on in the future. But at this point, it is really just too early.

[Dylan Becker:]

Great. Thanks, guys, for seeing us in. Congrats again on the quarter.

[Jim Scapa:]

Thank you.

[Matt Brown:]

Thank you.

[Operator:]

And I'm not showing any further questions in the queue. I'd like to turn the call back over to Jim Scapa for any closing remarks.

[Jim Scapa:]

Really just want to express appreciation to my team, great year. Matt, first year as CFO, did a fantastic job, and really everyone else on my team did as well. And also, appreciation to the support from all the industrial community as well. So, thanks, everyone. Looking forward, very, very excited about the future. I feel like we're in a great place. So, thank you.

[Operator:]

And this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.