Criteo S.A.
Q2 2017 Earnings Call Transcript

Published: 3 Aug 2017

[Operator:]

Good morning and welcome to the Criteo Second Quarter 2017 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Edouard Lassalle, Vice President and Head of Investor Relations. Please go ahead.

[Edouard Lassalle:]

Thank you, Andrew and good morning everyone. Welcome to the conference call on Criteo's Q2 2017 earnings. With us today are Eric Eichmann, CEO; and Benoit Fouilland, Chief Financial Officer. During the course of this call, management will make forward-looking statements. These may include projected financial results or operating metrics, business strategies, anticipated future products and services, anticipated investment and expansion plans, anticipated market demand or opportunities, and other forward-looking statements. These statements are subject to various risks, uncertainties and assumptions. Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements. We do not undertake any obligation to update any forward-looking statements contained herein except as required by law. In addition, reported results should not be considered as an indication of future performance. Also we will discuss non-GAAP measures of our performance. Definitions of such metrics and the reconciliation to the most directly comparable GAAP financial measures were provided in our earnings release published earlier today. Lastly, unless otherwise stated, all growth comparisons made in the course of this call are against the same period in the prior year. With that, let me now turn the call over to Eric Eichmann, Criteo's Chief Executive Officer.

[Eric Eichmann:]

Thank you, Edouard and good morning everyone. I am happy to report another strong quarter of profitable growth for Criteo. Before I talk about this quarter's performance, I'd like to say a few words about Criteo's vision in a disrupted commerce landscape where retailers and brands face a number of evolving threats and opportunities. There is no doubt that shopper behavior has changed dramatically. Empowered with a wealth of information online and offline and leveraging the power of mobile devices, shoppers expect seamless and relevant marketing experiences at each phase of the purchase journey. As marketers try to profitability meet shoppers expectations, they are faced with many challenges. Most retailers and brands do not have the technology capabilities to fully organize and activate the abundant data they collect online and offline. They also lack scale to reach and engage consumers online. Legacy physical stores and their associated economics are perceived as a liability limiting financial investment flexibility and online growth. Finally, the use of multiple devices under -- the use of multiple devices by shoppers on their path to purchase makes it hard to reach shoppers and provide them a seamless experience. We intend to help marketers overcome these challenges by building the highest performing and open commerce marketing ecosystem that connects shoppers to the things they want to buy. Our mission is to deliver performance at scale to the retailers and brands who participate in our open and trusted ecosystem. Commerce marketing is the category of marketing that directly drives sales and profits unlike other forms of marketing that rely on objectives such as awareness, reach and engagement. We power the Criteo Commerce Marketing Ecosystem with purpose-built machine learning and a network of tens of thousands of retailers, brands and publishers. Four key pillars support our ecosystem; number one, granular and actionable data that provides shopper intent and purchase history from over 15,000 commerce partners; number two, integrated commerce marketing technology that enables unparalleled shopper engagement through targeted personalized marketing; number three, publisher scale that maximizes performance and reach across the shoppers' online journey reducing dependence on walled gardens while embracing them; and number four, large pooled assets built through collaborations and data sharing among participants in our ecosystem. These powerful pooled assets include the Criteo User Device Graph which connects user identities across devices and environments, the Criteo Shopper Product Graph which maps the shoppers' intent and purchasing across retailers in our ecosystem, and the Criteo Measurement Network which enables measurement attribution for brands across our many retail partners. Openness, transparency, security and fairness are cornerstones of our commerce marketing ecosystem where every participant gets more than what they contribute. Brands and retailers get measurable results as they profitably target, acquire, re-engage and convert customers online and in stores and retailers monetize their site inventory while brands measure sales with comprehensive attribution across retail partners. We believe now is the time for retailers to level the playing field with the largest e-commerce players over online data, technology and scale. It is also time for brands to more actively participate in driving online sales with retailers helping them with additional traffic and advertising revenue streams. And for both retailers and brands, it's time to leapfrog ahead by activating offline data to leverage omni channel advantages. In summary, we intend to build the highest performing and open commerce marketing ecosystem for retailers and brands. Our massive pool of shopper data, large scale networks and world-class performance-driven technology make us the ideal commerce marketing partner in this highly dynamic market. Turning to Q2 results, for 15 consecutive quarters, we have exceeded Revenue ex-TAC and adjusted EBITDA guidance. At constant currency, we grew Revenue ex-TAC 34% to $220 million and Adjusted EBITDA 42% to $54 million. Same-client Revenue ex-TAC growth accelerated to 17% at constant currency. Better technology and a broader supply network drove increased client spend at constant ROI. Having 78% of our business driven by clients with uncapped budgets enabled this elastic spend. Again this quarter, we performed well across the entire business. We deliver on our innovation road map both in the core technology and in new products. We further expanded and improved our access to inventory and we added many new clients across regions, sizes and products. Starting with innovation, I want to highlight three areas, the engine, Criteo User Device Graph, and new product initiatives. Within the engine, we provided -- we improved overall performance by approximately 5%, mainly by adding 10 new variables into our bidding and creative layers. Some of these variables focus on users' long term engagement with the sites and apps of our clients. Criteo User Device Graph further grew in scale and efficiency. 3/4 of our clients share CRM data with us and we continue to augment their data set with third party data. 76% of our Revenue ex TAC now comes from users matched in the graph, a 9 percentage point increase over the prior quarter. Using the Criteo interface, clients can now see an average 10% more post click sales on devices or in environments different from where the click was generated. In addition, the graph bridges web browsers where shoppers search for products and apps where users spend time and see ads, driving growth in app inventory supply. We are testing three new product initiatives with promising results

[Benoit Fouilland:]

Thank you, Eric and good morning everyone. I'm also pleased with the Q2 performance. We delivered accelerating profitable growth and increasing cash flows while investing across the business. Our differentiated business model continues to make our financial profile attractive. I will walk you through the quarterly performance and share our guidance for Q3 and full year 2017. Q2 revenue was $542 million, up 35% at constant currency. Revenue ex-TAC, the key metric we use to monitor business performance grew 34% at constant currency to $220 million. This was driven by accelerating growth in same-client Revenue ex-TAC to 17% at constant currency and the addition of 950 net new clients across regions, sizes and products. Revenue ex-TAC margin was 41% in line with expectations. Compared with guidance assumptions, changes in ForEx had a $2.5 million positive impact on Revenue ex-TAC, mostly driven by the stronger euro. However, compared with the prior year, changes in ForEx represented a headwind of 225 basis points to Revenue ex-TAC growth. On the core product, both Tier 1 and mid-market saw healthy growth in Revenue ex-TAC per client. Moving now to expenses, we decided to refocus our efforts in China on our export business. As a result, we incurred one-time restructuring costs of $3.3 million including $2.5 million related to the early termination of data center contracts and $0.8 million of employee-related expenses. Given the non-recurring nature of such expenses, we elected to disclose them as restructuring costs and to exclude them from Adjusted EBITDA and Adjusted net income. Other cost of revenue comprised of hosting and data costs grew 62% to $33 million, mainly driven by the $2.5 million restructuring charge in China, increased hosting capacity across data centers and additional third-party data to complement our User Device Graph. Operating expenses increased 36% to $174 million including $0.8 million of restructuring costs in China. Headcount-related expenses represented 76% of GAAP OpEx. We added over 110 net new employees, in line with our hiring plan and closed the quarter with 2,700 employees, a 29% year-over-year increase. Non-GAAP operating expenses grew 28% to $148 million. On a non-GAAP basis by function, R&D expenses grew 35% to $36 million, in line with our plans largely driven by the 38% increase in headcount to over 640 employees. Sales and operations expenses grew 33% to $86 million, also in line with our operating plan. This was largely driven by the 27% increase in headcount to 1,600 employees including 110 employees focused on Criteo Sponsored Products. And in Q1 Criteo Sponsored Products accounted for over 1/4 of the growth in sales and operation expenses. Quota-carrying headcount grew 33% to 760 with 2/3 of the growth coming from mid-market. Finally, G&A expenses grew 8% to $27 million while headcount increased to 450 employees. Switching to profitability, Adjusted EBITDA grew 42% at constant currency to $54 million driven by the strong Revenue ex-TAC performance across all regions and sustained operating leverage across the organization. Adjusted EBITDA margin was 25% of Revenue ex-TAC, up over 100 basis points compared with Q2 2016. In line with expectations, Criteo Sponsored Products had a negative contribution to Adjusted EBITDA in the quarter. Excluding the impact of Criteo Sponsored Products, Adjusted EBITDA margin was over 27% of Revenue ex-TAC, an increase of 380 basis points compared to Q2 2016. Q2 profitability remains well in line with our plan for 2017. Financial expense was $2 million, primarily driven by hedging cost on the euro/dollar exchange rate and interest expense related to the funding of the HookLogic acquisition. Net income decreased 44% to $8 million driven by a lower income from operations and higher financial expense. Income from operations, down 26% year-over-year to $13 million, was negatively impacted by three factors

[Operator:]

[Operator Instructions] The first question comes from Douglas Anmuth of JPMorgan. Please go ahead.

[Douglas Anmuth:]

First, just wanted to ask you about the open commerce marketing platform. Eric, if you could just talk a little bit more about how you envision this actually working going forward and when we should think about it rolling out more just in terms of timing? And then secondly, just on Apple and the ad tracker blocker, you mentioned the -- factoring that in a little bit into the 4Q guide, can you just talk about what else do you know about the product and how it will be implemented versus when it was announced about two months ago? Thanks.

[Eric Eichmann:]

All right, great. Thank you, Doug, great question. So on the open commerce marketing ecosystem, it is a very exciting initiative for us and what sort of made us realize how strong and how powerful the data that we are collecting and sort of using for our partners was the onboarding rates that we're getting on CRM using the User Device Graph that became equivalent to the largest online players out there that have similar solutions. I think we have elements of it now already. So this is an ongoing effort. It's not a one-time we're going to launch the open commerce marketing platform. We have some elements of it. So obviously the fact that we have a user graph and we can now propose things like app installs, CRM onboarding, Store-to-web retargeting are all based on some of the pooled assets. If you think about what we're doing on the Criteo Sponsored Products side which is allowing brands to be able to place ads on a network of retail sites and then use the -- what we call the Criteo Measurement Network or the ability to see how those ads have an impact on different retailers in terms of driving sales. That's very unique, right. You don't have that offline and so that's a part of the ecosystem. The intent over time is obviously to make this a very powerful ecosystem that can rival some of the large e-commerce platforms and some of the numbers speak to it. For example, on an annual basis, we see about $550 billion in online sales from the partners that we work with. So that rivals very well against some of the sales that companies like Amazon would see -almost twice as much - and we see not just the history of the sales, but also intent that comes before then and so the intent really is to make sure that this ecosystem is a strong one so that when a consumer is looking for product, is looking to buy, it ends up being part of this ecosystem as opposed to sort of being in another ecosystem and not coming out of it and obviously this is -- we've talked about some of the products that we've had, the data is an important element of it, being able to sort of, if you will, take all the data from retailers and make sense out of it across retailers is a key initiative and creates a very big moat once we sort of finish with that. So an ongoing process and I think as we go through the next few years, we'll be announcing more products and the impact of this commerce marketing ecosystem. Very important also and this is the last point on this, we're very much focused on performance. We're focused on driving sales and profitability. So this is not about sort of doing branding or anything like that. So it continues to be very much focused on helping retailers drive profitable growth. So that's on the open commerce marketing platform. The ITP announcement from Apple, there's still quite a bit of question marks on our side and I think many people if you think about cookies and the broader impact that they have on not just sort of the ability to serve targeted ads, but in general on the user experience, there's the possibility that if sort of implemented wrongly, you can actually break a number of things that are very important to a consumer. So take an example -- for example opt-outs from different experiences will have to be re-asked of consumers every once and then -- because you forget basically who the cookie was that opted out. There's some for example large publishers that use third parties to authenticate the use of their services. And so within the broad definition that was given by Apple that would break too. So -- because these things are so critical to how things operate today, I think it's very hard to know exactly how Apple is going to be implementing it because I'm sure that there is no -- no intent to break things that are dear to consumers. We believe at the same time that obviously consumer privacy and making sure that consumers are in control of their experience is paramount. And one of the things that we can see happening is as you know IDFA is the identifier by excellence on the Apple app devices or of the app environment. If that were an identifier that could be used across all environments including Safari, that would be great -- then -- and you could actually provide control and the ability for users to turn on and off in a single place that identifier. And so I think those would be potential ways of solving what I believe Apple is trying to do with -- which we support, which is the control that consumers should have around their privacy, but today we don't have good information about exactly how it's being done. Now from our perspective, there's a number of ways to store data that do not rely necessarily on cookies being passed to us and so we're examining different possibilities to make sure that we have a continuation of service, but that uncertainty obviously -- and uncertainty around Q4 retail in particular with the sort of different patterns that we've seen in the past few years has made us more cautious about Q4.

[Operator:]

The next question comes from Mark Kelley of Citigroup. Please go ahead.

[Mark Kelley:]

First one, I just want to follow up on Doug's question about ITP, I know obviously, way too early, we don't know the impact, but just curious if you have anything kind of baked into your Q3 guide given that it rolls out mid-quarter. And then second, any way for us to frame the impact from CSP. I know you added 40 new clients, you talked about some of the OpEx impact there, but any way for us to think about the ex-CSP growth would be helpful.

[Benoit Fouilland:]

Maybe -- Benoit speaking, maybe for the Q3 guidance, yes, we've taken into consideration the rollout on 15th of September that is what is expected. Obviously, given the rollout at the very end of the quarter this is a very minimal impact that has been factored in the guidance.

[Eric Eichmann:]

And on CSP, so we're super excited about CSP, it's opened up as we expected and that was part of the rationale of the acquisition, a number of relationships with brands that we did not have before and allows us to also talk about the commerce marketing acquisition, something that has been very well received by brands and the process this year and what we're trying to achieve with CSP is a couple of things, expand the business, continue to make sure that it continues on its great run of growth in the U.S. and expanding into new countries in Europe and importantly also integrate the technology. So we want to have one platform that works that sort of powered by Criteo and that work we estimate it to be about 18 months. And so we're in the middle of that work, that general work sort of doesn't allow you to have many new features that we have planned, come out very early on. We're seeing great success in the U.S., we continue to expand the business as you know. Criteo Sponsored Products is much more sensitive to seasonality. We depend a lot more on Q4 as a business. So we're preparing very much for a successful Q4 and then we have expanded into four countries in Europe and now we have the Criteo team -- the Criteo field team fully sort of engaged in driving this growth and so we are in the U.K., France, Germany and The Netherlands. The first order of business with CSP in those countries is to secure the supply side, which in this case in this business is retailers. So that's what we're doing and we're making good progress on that and that will be sort of one of the key drivers for growth in particular in 2018 and beyond.

[Operator:]

The next question comes from Heath Terry of Goldman Sachs. Please go ahead.

[Heath Terry:]

You mentioned the progress that you're having in your header bidding initiatives. One of the potential outcomes that you had mentioned early on in this -- this process was actually starting to see traffic acquisition costs coming down as you got better data and we're better able to take advantage of your position in the market. I'm wondering if that's still something that you feel is likely whether or not you're seeing that in certain parts of the header bidding process already. And then I guess just one on the FX notes that you gave, you mentioned that you're using the first 9 months exchange rate for 3Q. Given where spot rates are now, would that suggest that there's actually -- if spot rates hold, that there's actually a benefit to your guidance given -- given that we're above where the first 9 month average would imply.

[Eric Eichmann:]

Great, thank you, Mark. Let me just take quickly header bidding and I'll pass it on to Benoit to complete header bidding and then talk about foreign exchange. So we're super excited about header bidding. The reception from publishers around the world has been overwhelmingly positive. What we're seeing is that we're getting -- the best metric we use to see how well this technology is adding value is yield and that ultimately is how much money -- how much more money we spend with that publisher and that's between 20% and 40% and so that comes in the form of -- in different forms

[Benoit Fouilland:]

Just to cover your question with respect to traffic acquisition costs. In fact, if you look at the CPMs, we are seeing a slight decrease, 5% year-on-year of CPM at constant currency obviously. So we see some of the benefits that we were anticipating in terms of CPM flowing through the business there. So with respect to FX, yes thanks for picking up the fact that we are using year-to-date rates. So this is part of the mechanics of how we compute FX is we always -- you look at year-to-date rates. This year-to-date rate that we disclosed in the earning release in fact anticipate a rate just on the quarter of 1.15 EUR/dollar, so 0.85 roughly] to the -- if you take the USD/euro. So we are much, much, much closer in terms of spot rates -- closer to the spot rate if you look just at the quarterly view, but the way we compute the rate is always on the year-to-date view.

[Operator:]

The next question comes from Tom Champion of Cowen. Please go ahead.

[Tom Champion:]

I'm curious if you could discuss the competitive environment and if you received any contribution from the wind down of TellApart. Also if you could just spend a little time talking about the progress in the search business, any comments there would be helpful. Thank you.

[Eric Eichmann:]

Great, thank you, Tom, those are great questions. So on the competitive environment, just in general what we see is a more favorable environment from -- for us. The example you gave TellApart is just another example in a sort of long list of folks that were in the business that have exited or sold out to other companies which do not sort of emphasize or were focused on our business which made it more positive. So all in all, we're not seeing really a -- we're seeing if anything a clearer environment from that perspective. TellApart being something that Twitter is not investing in going forward has created opportunities with clients that we're obviously talking to and we so we think that's an opportunity, mostly U.S. based opportunity. Outside of the U.S. and the news that we just discussed, no real change in the competitive environment. I think again just a fact that we have got into the scale that we have and we have made improvements to the technology, have made it very hard for people to sort of compete and so in many markets we're really the biggest and the most successful player with very few others competing. So that's on the competitive environment. On the search environment, we continue to test. We now have over 100 clients working with us on search and we're seeing good client additions. I think one of the things we talked about in the prior quarters is the ability to test our solution against established solutions and having key protocols that allow you to do that in a very sort of pragmatic and reliable way. We're still sort of -- we had talked also about Google providing such functionality. They had mentioned to us that it could come in the second half of the year. We're still sort of waiting. Obviously, we're not Google, so we don't know the specifics of it. The general sense is that it's obviously -- this is one of the key things that we're waiting to see to further accelerate the business, but obviously we're making good progress in terms of client addition and it's helping us test the product in a much fuller way in the market. We also mentioned at the beginning of the year, we remain on that guidance that the search business was going to be immaterial to the numbers in 2017, just 1% to 2% of the number and so that hasn't changed.

[Operator:]

The next question comes from Matthew Thornton of SunTrust. Please go ahead.

[Matthew Thornton:]

I guess first thinking about the fourth quarter beyond the Apple ITP issue, Eric, you talked about some changing seasonal patterns. I'm wondering if you can kind of expand on that a little bit. And then secondly, talking about the Direct Bidder, do you have any sense yet as to what percentage of revenue that product would be applicable to and do you have any sense as to your position and that product's position when you think about client side header bidder, header bidding and the wrapper versus server side header bidding. Any color there would be great, thanks.

[Eric Eichmann:]

Great, thank you, Matthew. So on Q4, beyond ITP, one of the things that you guys probably have seen in the news is the changing face of retail, right and you've seen sort of many, many retailers sort of close stores and be even more sort of challenging situations. And so one of the questions is how much will retail in general grow outside of sort of some of the large ecommerce platforms. And that's just a general question we expected not to dramatically change patterns but that's -- that's always been a question and what we've seen over the last 2 years is if you take 3 years ago we had incredible concentration that happened during the Black Friday and the week after and more of taper down of what happened the weeks after leading to Christmas, the year sort of -- 2 years after, it was much more of a sort of spread out holiday shopping season. And last year we had a very strong season throughout and so we can't identify one single pattern coming out of the 3 years which does tell you and this is one thing that we're seeing, too, is that shoppers are sort of much more in control and sort of their behavior is changing as technology is allowing them to take more control. And so that's -- that's one of the things, there's no reason to think that it's going to be more positive or more negative at this stage, but there is just, it's harder to -- to look at it and sort of pinpoint exactly what's going to happen, which is why we're being a bit more cautious. On the Direct Bidder, we were going after all sort of publishers that we work with. Obviously, we're going after the biggest ones first. We believe that something around half of the inventory that we work on applies to header bidding maybe -- maybe half to 60% or something like that. So that gives you a sense for it. What we're seeing in the market is that server to server is not gaining a lot of traction today. It's something that could in the future one of the limitations there is just time to react and then that creates sort of a bit more sort of pressure on the publishers, but if that were a trend, it wouldn't be difficult for us to have a solution on header bidding. We -- our solution in header bidding by the way is a number of technology implementations either directly connecting to a wrapper like Index, which is generally the majority of the implementations that we're doing now or being the wrapper ourselves. So we're very flexible in terms of how the publisher wants to approach header bidding and ultimately what matters to the publishers, what matters most is the ability to have more money flow into their coffers, if you will. So very exciting opportunity for us. We keep on being not just excited, but seeing publishers sort of sign up for it across the world.

[Operator:]

Okay, was there a follow up Mr. Thornton?

[Matthew Thornton:]

No.

[Operator:]

Okay, thank you. And I believe there's time for one more question, is that correct?

[Eric Eichmann:]

Correct.

[Operator:]

We have a question from Richard Kramer of Arete Research. Please go ahead.

[Richard Kramer:]

I'll promise not to ask about Apple again. 2 questions if I may. First, I'd like to hear a bit more about how you think about the growth in advertisers and headcount certainly over the next sort of 12, 18, 24 months. Can you talk about whether you're going to at some point face a sort of strategic choice about trying to onboard and add another 1,000 clients every quarter or really focus on some of those Tier 1 accounts where maybe you'd be able to see a substantially larger wallet share especially since you've widened out the product portfolio quite a bit. And then maybe also could you give us a quick comment, we're all trying to understand some of the caution that's baked in the guidance. Is there some aspect in your European business of company's compliance with Euro GDPR which seems to be moving at a very uneven pace across various sectors and is that factoring into your thoughts because where other than the Apple business, many of the other trends seem to be moving rather or not different direction than your guidance. Thanks.

[Eric Eichmann:]

Okay, thank you for that question. So on the growth in advertisers, just as a sort of background information that we've talked about in mid-market, we're still low in penetrating the mid-market segment. And so even in the largest geographies, we still -- what we believe to be a third or less penetration and worldwide we're about 20%, 25% penetration and so that continues to be a big opportunity and the opportunity there is really to sign more clients given the competitive dynamics where in many cases the only -- for sure the best choice for people to do retargeting. That will continue to be an area that will continue to grow and so we continue to grow our sort of Boston and Barcelona offices and so my expectation is that, that will continue to happen. On the Tier 1 side and just in general in the business, with all these new solutions that we're adding and these conversations that we're having in particular around CSP and then onboarding and with very large retailers that have a very strong physical presence, with the announcement of Whole Foods being acquired by Amazon, it's woken up a lot of these retailers to how they can leverage their offline assets to drive online sales and to have a better presence and so I talked about sort of store-to-web retargeting, that something that we're sort of -- we're starting to work on and we have beta sort of programs with some retailers. And so we expect that beyond the core retargeting business where we continue to find opportunities to grow the Rev ex-TAC, same-client Rev ex-TAC, we'll also have new revenue streams that will drive and some relationships on the Tier 1 side where we've had a hard time getting in with the pure sort of retargeting business based on now a broader portfolio of products, we think it's going to be easier to come in and sort of have those conversations. And we're already seeing, we can now talk to sort of SVPs and CMOs about our full set solution versus before, it was harder to get into the C-Suite on the marketing side. I don't know Benoit if you want to make a quick comment on the guidance and how we see sort of numbers for advertisers.

[Benoit Fouilland:]

I mean -- on the guidance, you didn mention GDPR, we don't -- we don't foresee an impact of GDPR in this quarter, certainly not, neither in Q4. I mean there is still a lot of uncertainty on exactly how GDPR would be implemented. I think there is a long way from our perspective to foresee an impact. This is more something that we will look at potentially for 2018 and beyond. So this is not contributing to our view of Q4 -- our view of Q4, I mean the two key factors as we said, the fact that we are seeing a very fast evolving pattern in retail, a tough compare to be honest with last year where we had a remarkably strong holiday season in Q4. So given the changing environment, and obviously the ITP environment that we just discussed. That's what leads to caution, nothing other than that.

[Operator:]

This concludes our question-and-answer session. I would like to turn the conference back over to Edouard Lassalle for any closing remarks.

[Edouard Lassalle:]

Thanks, Andrew. I guess we want to thank everyone for attending the Criteo call today. Friederike and myself will be available if you have any follow-up questions. Have a great day, thank you.

[Operator:]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.