Dolby Laboratories, Inc.
Q4 2020 Earnings Call Transcript

Published: 12 Nov 2020

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories Conference Call discussing Fiscal Fourth Quarter and Fiscal 2020 Results. During the presentation, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session. As a reminder, this call is being recorded Thursday, November 12, 2020. I'd now like to turn the conference call over to Jason Dea, Director of Investor Relations for Dolby Laboratories. Please go ahead, Jason.

[Jason Dea:]

Good afternoon. Welcome to Dolby Laboratories fourth quarter 2020 earnings conference call. Joining me today are Kevin Yeaman, Dolby Laboratories President and CEO; and Lewis Chew, Executive Vice President and Chief Financial Officer. As a reminder, today's discussion will include forward-looking statements, including our first quarter and second quarter fiscal 2021 outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today. In particular, the extent of the continued impact of COVID-19 on our business remains uncertain at this time. A discussion of these and additional risks and uncertainties can be found in the earnings press release that is issued today under the section captioned, Forward-Looking Statements as well as in the Risk Factors section of our most recent quarterly report on Form 10-Q. Dolby assumes no obligation and does not intend to update any forward-looking statements made during this call as a result of new information or future events. During today's call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in our earnings press release and in the Dolby Laboratories Investor Relations data sheet, on the Investor Relations section of our website. After the content of today's call, Lewis will begin with a recap of Dolby's financial results and provide our first and second quarter 2021 outlook, and Kevin will finish with a discussion of the business. So with that introduction behind us, I will now turn the call over to Lewis.

[Lewis Chew:]

All right. Thank you, Jason, and congratulations in advance for the impending arrival of your second child. So good afternoon, everyone. I hope everyone is doing well. Our Q4 revenue was above our guidance, but we are still down on a year-over-year basis and that reflects the ongoing impact of the pandemic. So let's go through the numbers. Fourth quarter revenue was $271 million compared to $247 million in Q3 and $299 million in Q4 of last year. Our revenue guidance coming into the fourth quarter was a range of $225 million to $255 million. So compared to guidance, revenues were better than what we projected as we had a true-up of about $25 million in the quarter related to Q3 shipments, which was about $15 million higher than the true-up that we had last quarter, and with most of that improvement coming from TVs and set-top boxes, and PCs.

[Kevin Yeaman:]

Thank you, Lewis, and thank you everybody for joining us today. I want to focus my comments on three main areas today. I will start by highlighting our continued progress, increasing the number of Dolby Vision and Dolby Atmos experiences around the world. I'll then spend a few minutes on the changes we have made in our cinema and conferencing hardware business to adjust to the evolving conditions in certain markets. And then I will share some thoughts on the exciting opportunity for Dolby to address a new world of content through our developer platform and related initiatives. Before we move on, I do want to take a moment to thank our employees for their dedication and creativity. In a year where we all face challenges and disruptions, they have continued to bring more Dolby experiences to more people around the world, and they are the driving force behind the Dolby magic. Let me start with the Dolby Vision and Dolby Atmos ecosystem that continues to grow. With the launch of iPhone 12, consumers are now able to see the benefits of Dolby Vision when they record video and share it. We are excited about the opportunity to support this ecosystem so the Dolby Vision content can be enjoyed on social media, video sharing sites, and more. This will vastly expand the content that can be enjoyed in Dolby Vision, adding more reasons for devices and services to adopt our technology and creating new opportunities for Dolby. During 2020, we continue to grow the presence of Dolby Vision and Dolby Atmos across the many ways that people enjoy movie and TV content. At the beginning of the year, we saw the launches of Disney+ and Apple TV+ with the combined Dolby experience. Google Play, Showtime and PBS all began streaming Dolby as in this year. In this quarter, Watcher a streaming service in Korea began supporting content in Dolby Vision and Dolby Atmos. The momentum of Dolby Vision and Dolby Atmos within movie and TV content continues to drive and expanding the lineup of devices within the home. The adoption of Dolby Vision and Dolby Atmos within 4K TV shipments grew significantly year-over-year. Our partners like TCL, Sony, Panasonic and Skyworth added support for the Dolby Vision and Dolby Atmos experience deeper within their TV lineups and have also broadened the global reach of their offerings, including this year in India. Xiaomi launched their first TV that supports Dolby Vision and Dolby Atmos just this year. And we continue to bring new innovations to market, like Dolby Vision IQ, which optimizes the picture on your TV by adjusting to the surrounding line and to the type of content they viewed. Our continued innovation brings new value to our partners and consumers and adds to the reasons for deeper adoption. Dolby Vision and Dolby Atmos continue to grow across a broader range of devices. Apple recently began enabling support for Dolby Atmos to the HomePod. Earlier this year, Sonos launched its first Dolby Atmos product with the Sonos Arc and Roku began supporting Dolby Vision and Dolby Atmos with the Roku Ultra. We are also beginning to see increasing adoption of the combined experience within set-top boxes, including the latest offerings from Free in France and Deutsche Telekom in Germany. Within Mobile and PC, Apple highlights the adoption of the Dolby Vision and Dolby Atmos playback with support throughout their iPad MacBook and iPhone lineups. We also have strong additional adoption of Dolby Atmos within the latest flagship mobile phones from Samsung, OPPO and Sony. Lenovo launched several new PCs that support the combined experience and Dell began shipping Dolby Vision enabled PCs earlier this year. We see significant growth opportunities within both Mobile and PC as we gain new wins, drive deeper adoption within our partners’ device lineups and expand the types of content that can be enjoyed with Dolby Vision and Dolby Atmos. In the same way, the Dolby Vision and Dolby Atmos enabled great movie and TV content. We see a significant opportunity to create immersive experiences within music and gaming. These are important forms of entertainment that expand our current value proposition and grow the number of devices that can benefit from the Dolby experience. Let me start with music. A year ago, we launched Dolby Atmos for music with Amazon Music HD and the Amazon Echo Studio. The music in Dolby experience has been met with deep and passionate engagement from artists, for example, those that we highlighted in the stories from Lizzo, Post Malone, Coldplay and J Balvin. Tidal became the second streaming service to support Dolby Atmos Music, enabling millions of Dolby Atmos devices within mobile and in the home. Our increasing presence in music will create opportunities to grow adoption in mobile automotive, smart speakers and headphones. In gaming, Microsoft announced their new Xbox to be the first gaming console to support the combined Dolby Vision and Dolby Atmos experience for gaming. We are also seeing a growing number of gaming PCs adopted Dolby experience, including new products from Lenovo and ASUS this year. As we grow the presence of Dolby Vision and Dolby Atmos within gaming content, we add to the value proposition for broader adoption within PCs, gaming consoles and mobile phones. Our momentum for Dolby Vision and Dolby Atmos across content, services and devices is strong and at the same time, we still see much of the opportunity to add events. We continue to grow our presence throughout devices within the home, and we made it even earlier stages of adoption within mobile and PC. We are focused on accelerating that adoption by increasing the amount of content and by broadening our presence in categories like music and gaming. Let me shift now to talk about the areas where we have made some changes to adjust to the evolving conditions in certain markets. The cinema environment remains challenging as the time of recovery is uncertain and the landscape is evolving. As Lewis discussed, we have made some adjustments to operations and manufacturing here to reflect a lower outlook for demand. At the same time, we remain confident that studios will continue to create great content that audiences will continue to want to experience these movies in the cinema and that they will take out the best experiences. Let me spend just a few moments on Dolby Voice. We entered the communication space with the goal of enabling higher quality and more natural meeting experiences. Our value proposition of enabling higher quality interactions remains as strong and relevant as ever and we see significant opportunities to broaden the reach of our technologies. As we move forward, we are winding down the sales of our conferencing hardware to focus all of our efforts on the larger opportunity to enable the Dolby Voice experience through our enterprise partners and our developer platform. And that brings me to the opportunity to bring the Dolby experience to the vast and growing amount of content that are a part of our everyday lives from user-generated content to social media and casual entertainment to everyday virtual interactions. Today, developers can access our technology through Dolby.io to improve media and interactivity within their applications. We have seen growing engagement from developers across a variety of industries and use cases from improving audio quality and podcast, media production and online marketplace videos to enabling interactivity and online education, social media, and live streaming applications. This quarter, we began partnering with SoundCloud to enable artists to improve the quality of their tracks using our mastering APIs and have seen nearly 200,000 tracks mastered through their APIs in the few months since launch. We are also working to integrate our media APIs onto the box platform this quarter to enable their customers to enhance content with our media APIs right within the box experience. Additionally, we recently enabled our interactivity APIs to include the benefits of Dolby Voice and has drawn strong engagement from developers . As we look ahead, we will continue to expand our offerings to address more audio and video features. For example, now that consumers can create Dolby Vision with the iPhone 12. We see opportunities to support content platforms seeking to make the most of this expanding world of Dolby Vision content. While we are just at the beginning of these new opportunities, we are learning quickly from our early engagement with developers and evolving our offering to bring the Dolby experience to everyday applications and services. So to wrap up, the momentum of Dolby Vision and Dolby Atmos with movies and TV content is strong as our partners continue to bring new devices and services to market. Our opportunity remains ahead of us and we are enabling more content experiences in music and gaming that can accelerate the adoption across device categories. Consumers can now capture and edit in Dolby Vision for the first time, expanding the Dolby experiences into the growing world of user-generated content. And we are excited by the opportunity to bring the Dolby experience to new use cases and industries through our developer platform. All of this gives us confidence in our ability to drive revenue and earnings growth into the future. I look forward to updating you next quarter. And with that, I will turn it over to Q&A.

[Operator:]

Thank you, ladies and gentlemen. Your first question comes from Steven Frankel with Colliers.

[Steven Frankel:]

Good afternoon, and thanks for the opportunity. Kevin, I want you to talk a little bit about the Dolby.io opportunity. Maybe tell us a little bit about the go-to-market approach and specifically around voice. How do you take voice, which has so much promise embedded into some higher volume applications, where it can really make a difference to the consumer?

[Kevin Yeaman:]

Thanks, Steve. Yes, we're really excited about the opportunity to improve so many different types of experiences, including the Dolby Voice. And in terms of how we're bringing it to market, we are first focused on our engagement with developers. We've brought a lot of people on board who have a lot of experience doing that, knowing them with the teams that we have that understand how to apply our technology and expertise to improve media and interaction experiences. So it really is about reaching out to developers, growing that community, bringing them to our platform, make it easy for them to understand how they can employ these technologies, and then also learning from them to then evolve our offerings and bring to bear more of our expertise and more of our IP portfolio to solve new challenges. And of course, over the last six months, our product teams have had the opportunity to engage with a lot of potential developers and customers relative to deploying these technologies. As it relates to Dolby Voice, it's about the interactivity that we experienced in our apps and services every day, and so that runs across telehealth, online education. We see opportunities in that where entertainment needs communications to work in areas like in the future. We're talking to people about areas like social media or live streaming platforms where people want to introduce interactivity. These are all areas that we see opportunities to bring Dolby Voice to life through the developer platform.

[Steven Frankel:]

And your existing partners like BlueJeans, should we expect them to adopt the software approach as well, so even without your hardware you can get that same experience?

[Kevin Yeaman:]

They do that today, Steve. So BlueJeans has the Dolby Voice service integrated into their full platform. So you do not require the Dolby hardware to get that experience, and we continue to work with BlueJeans and consumers. BlueJeans customers will continue to enjoy the Dolby Voice experience when they're participating over their mobile devices and their PCs like so many of us are doing for so many hours a day.

[Steven Frankel:]

Great. And you didn’t mention anything about gaming, given the two new platforms just hitting the market, both of which are sold out. Have you seen that in the numbers in the September quarter, or is that coming in the December quarter?

[Kevin Yeaman:]

Coming, we're about to go through a refresh cycle. I didn’t touch on it briefly Steve, but I'm sure you're aware, Xbox is supporting Dolby Vision and Dolby Atmos for gaming and we're really excited about that. And so, yes, of course, where – the refresh cycle is something that is likely to benefit us in the coming – these couple of quarters. And gaming is a big area of focus for us across the globe. Certainly, we're focused on making that Xbox experience so successful and a bit of an ecosystem of content as possible. But beyond that, we believe that we can add value in mobile gaming and other areas.

[Steven Frankel:]

And then just one last one. Where do you think your market share is today in Dolby Vision in 4K TVs, given that what you're talking about the phenomenon and new geographies and more modest?

[Kevin Yeaman:]

Yes. The - so first of all, Steve, I will say the data is still coming in on that, because, of course, we will get our Q4 reports in the coming weeks and the industry analysts are not quite – well, maybe it’s not possible, they're not fully adapted to this uncertain environment. So the numbers are still coming in. But we're confident that we are going to end up somewhere between 15% and 20% Dolby Vision to 4K TVs and that 4K TVs are probably coming in this last fiscal year for us at somewhere just over 50% of the market.

[Steven Frankel:]

All right. Thank you, Kevin.

[Operator:]

We’ll take our next question from Ralph Schackart with William Blair.

[Ralph Schackart:]

Good evening. First question on the true-up that you called out in the quarter, less than 25 months, a little bit larger than the normal. If you could talk about maybe 15 higher than expected. Any more color on that as 606 are affecting the true-up this quarter?

[Lewis Chew:]

Sure. And we've been very transparent about this even before we launched 606 that we’re going to have this. First of all, I'll reassure you that our processes is very solid, applied very consistently. And the biggest piece of that bump in true-up was new data that we got in on some of the key TAM in the markets we work on were higher than what had been published at the TAM at the time we did the estimate and that was across several different categories. So, of course, we flow that right through and that affects the number of units that our customers report, because I think I've talked about this in the past that our technique uses interpolation, where we use multiple data points, customer inputs, market share data points and also TAM data. And so the biggest thing driving that uptick in the true-up was an uptick in the TAM data versus what we had been through the estimate for Q…

[Ralph Schackart:]

Okay. And then we get a lot of questions on the opportunity for I/O, there’s obviously a lot of excitement around, it sounds like you're making great progress in the quarter. Anyway that sort of give us a sense of how to frame this opportunity and put some numbers around it in a range of – that’s very wide. And if not, just sort of like maybe the building blocks, how to think of potential size on it?

[Kevin Yeaman:]

Yes. Obviously, Ralph, let me back up. But we’re - we do think this is a big opportunity. And for a very long time, I've said that we believe we can improve any audio visual experience and this is what gives us the opportunity to expand that Dolby experience far beyond our traditional realms. We're about six months in. And so right now, what we're focused on is engagement with developers. As I think, we have a number of – growing number of initial customers that are out there using the platform. And we definitely look forward to providing more data as we go forward here. But we're excited about the customers that we're engaged with and that are coming on right now.

[Ralph Schackart:]

All right. Great. One more, Kevin. Just if you can kind of take a step back and envision that post-COVID world, but hopefully we get too sooner rather than later. Maybe just some updated thoughts on your kind of long-term goal to march back to double-digit growth. We are sort of confident around that prior statement that you've talked about before?

[Kevin Yeaman:]

Yes. Well, I feel I'm really pleased with our portfolio of growth opportunities. And I think on the Dolby Vision and Dolby Atmos portfolios, we talked about – we probably have the strongest progress in the living room for movies and TV. I mean as we just talked about that puts us at about 15% to 20% attached to 4K TVs really even earlier stage with PCs and mobile devices. And we do believe that this focus on additional forms of content, gaming, music now are the key to really opening up those opportunities for us. And I think that with Apple embracing the ability to capture, share, edit, content in Dolby Vision, I think that just is the best testament to how the Dolby experience can apply far beyond even those more traditional forms of content. So that's a big growth area. And then as we talked about – we’re just talking about Dolby.io. So we’re really excited about the ability to serve those new markets and new industries, unlocking the creativity of developers with the decades of experience and technology we have in making for the best high quality media and interactions. And so we do see that as another significant growth opportunity.

[Ralph Schackart:]

Great. Thanks, Kevin. Thanks, Lewis.

[Operator:]

Our next question comes from Paul Chung with JPMorgan.

[Paul Chung:]

Hi guys. Thanks for taking my questions. So just on your guidance, as you – timing of contracts with one of your largest customers just shifting into F1Q from F2Q, so are we going to see better relative performance in PCs and Mobile in 1Q?

[Lewis Chew:]

Well, I stopped sort of giving a breakdown by market because those tend to move around, but yes, this year we do see more of that timing of contracts issue affecting us in Q1 versus last year's in Q2, but for the first half as a whole, it tends to be relatively similar. I should remind you too, that as we roll on as each year goes along, we do get additional customers and get more penetration. So it's not necessarily the same items every year. It's just something we have to live with now under 606. But yes, to your question, Paul, clearly this year, we see a little bit more of that benefit from the timing of contract issue falling into Q1 versus Q2 than it did last year, where it fell more into Q2 versus Q1.

[Paul Chung:]

Okay. And then secondly, can you talk about the Dolby Vision recording capability on the iPhone? You got a lot of good air time during the event, which is great exposure there. So is there incremental revenue associated with this feature and are you getting interest from other prominent OEMs kind of looking at this?

[Kevin Yeaman:]

Yes. So again, we couldn't be more thrilled to have Apple embraced Dolby Vision for capture and sharing of content. And obviously we're not going to get into the specific economics of our relationship with Apple, but I think it does a couple of things for us. One, it again is an amazing example of how Dolby can apply far beyond movies, TV, and even gaming and music. Secondly, yes, we do think it opens up over time the opportunity to bring that experience to a broader audience. And then third, we think in a world of a large and growing ecosystem of Dolby Vision content in these new areas that there could be some interesting opportunities in some of our newer initiatives to help people get the most out of that content.

[Paul Chung:]

Great. Thanks guys. Great job.

[Lewis Chew:]

All right, Paul. Thanks.

[Operator:]

We’ll take our next question from Eric Wold with B. Riley Securities.

[Eric Wold:]

Thank you. Good afternoon, guys. A couple of questions to follow-up on kind of always the conversation around Dolby.io. I know it's early, six months in, and not going to talking about guidance. Is there were – maybe frame kind of what the average deal size or user size could look like? Or you're trying to think about what the best way to think about the revenue ramp as you gain penetration, or is it going to be just so many smaller user's revenue flow just that’s not the right way to think about it?

[Kevin Yeaman:]

Well, as you said, it's early, but I think we can already see that there will be a pretty broad distribution, right. There will be customers that are certainly in historical Dolby standards are – might be lower per customer. But I think there's also some opportunities to have some reasonably large customers. It's all going be about their scale and their use case. So right now we're seeing early adoption are in areas like improving recorded audio in a number of use cases like SoundCloud, podcasts, is online platform for the automobile industry for those looking to digitize. So people do videos of the car they are selling and we clean up that audio for them. So for those customers, the value proposition is a better quality experience. In some cases, saving them time and money on what they were doing to clean it up. And so the revenue potential is very much a function of the delivery of services and the same is true on the interactivity side. And many of our customers are just kind of they're getting there on top and have the potential to grow quite a lot more from where they're today.

[Eric Wold:]

And then, last question, obviously this question you get all the time with a $1.2 billion in cash and no debt and seemingly very strong free cash flow trends do continue. At what point obviously there's a need to put that to you to bring home your pocket, but what's the – that kind of need to be using in some manners, obviously you are buying back stock, but there's clearly a limit there to agree. Do acquisitions come more into play, or just nothing really inside that can really make a dent in that?

[Lewis Chew:]

Well, first of all, we regularly review our capital allocation and as you point out, we have also returned cash buybacks and a recurring dividend. I would say that we're always looking for potential acquisitions that could accelerate our business, historically that's tended to be that you might think of as technology tuck-ins. And I think as we go into new areas, that will also open up new opportunities for us to consider. But we'll make those decisions based on where we see opportunities to accelerate and expand the opportunities that were in pursuit off.

[Eric Wold:]

Got it. Thank you, guys.

[Lewis Chew:]

Okay. Eric, thanks.

[Operator:]

Our next question comes from Jim Goss with Barrington Research.

[James Goss:]

Thanks. A couple more things on the iPhone 12 capability with the vision capture. Are you thinking that capability is sufficient for the device we use more for professional content and that – maybe it might be over to some extent for regular consumers? And also to the extent that you are pretty important to this, potentially to the iPhone 12 sales, do you think Apple is going to use Dolby Vision as one of the marketing capabilities that it's going to be pushing given what they did do in their own show?

[Lewis Chew:]

They could run an ad, Kevin.

[Kevin Yeaman:]

Yes. Thanks Jim. So yes, one of the ads Apple has been running besides those and I've seen it on sports does in fact highlight the ability to take professional quality video in Dolby Vision. And so to answer your question, it's both, I mean, there are – many of the – many themes that you've seen in movies actually have been – many of them even shot with an iPhone. So the iPhone is a professional device and a consumer device and Dolby Vision brings out the best for both. So it's also a great way to capturing content. I mean, we've been trying it and it's amazing. And it looks more real and like what you experience. And so today you can – I know at a you can use it in the photos app. You could use it in iMovie, you can use it in the Clips. So we look forward to supporting clubbing out the ecosystem of apps and services that can support it both for professional use and for consumers.

[James Goss:]

Okay. And I think that most is included on the phones also can headphones do hooked up to them and take advantage of the Atmos capabilities or do they have to be a specially produced headphones?

[Kevin Yeaman:]

Well for Atmos playback, the iPhone supports iPhone playback, so to say, AirPods Pro. If you're asking about capture, we don't yet have capture, but there's always negative.

[James Goss:]

One other thing on the Dolby Cinema installations, China has actually recovered a lot more quickly because of the lockdown capabilities they had. Are you seeing any pick up in the potential for installations to go on there versus various ways which are behind in this spread?

[Kevin Yeaman:]

Yes. Well, we certainly had more discussion – engagement in China, recently we had in many other parts of the world because as you say, they are opened and they've actually had some really good weeks with local titles. So I would say of the parts of the world where we would still see some nearer to an activity in that regard. Yes, China would be among that list. But overall, certainly we expect a lower pace of deployment for Dolby Cinemas screenings and equipment through the – until we get to the other side of this recovery. But yes, China is definitely one of the markets that stand out as being better than the others.

[James Goss:]

Does the vaccine news finally create any higher degree of conversation with the parties you're dealing with for either of U.S. or Europe or elsewhere to create that light at the end of the tunnel where you can start talking again?

[Kevin Yeaman:]

Well, I talk to partners in all of the markets that I think none of us know when the industry is going to recover. I mean, obviously most of our screens are actually open, but of course, attendance is affected by the attendance restrictions and the time of the title. So, yes, I think that any news that could help with seeing that light at the end of the tunnel obviously is great. But I think most of all we do believe that studios are keep creating great movies and that there are audiences that are going to want to see to see the best experiences. We just can't right now predict any better than anybody else when we're going to – when that day is going to come.

[James Goss:]

Okay. Thank you.

[Lewis Chew:]

Thanks, Jim.

[Operator:]

And we'll take our next question from Ivan Feinseth with Tigress Financial Partners.

[Ivan Feinseth:]

Thank you for taking my call and congratulations on the great results in a difficult time. Did you start to work with Apple early on for the designing the iPhone 12 to incorporate Dolby Vision? And is there some things that are unique to the iPhone 12 that allow it to be in? Or will you be able to work with other phone manufacturers as well? And we’ll see this soon in some other brands.

[Kevin Yeaman:]

Well, we have a longstanding relationship with Apple and they support Dolby Vision and Dolby Atmos playback throughout their all ecosystem. And so yes, we've been working with them for some time to bring this experience to life. And our first focus is on making it a successful ecosystem. I mean, one thing, of course, that is true in Apple, is that they have all of the apps and the services and the devices and the entire ecosystem to bring an experience like this to life at scale. So job number one for us is to help them make that as successful as it could possibly be and to open up that ecosystem to other apps and services. And then from there, yes, so the time was certainly give an opportunity for this to be something that opens up new opportunities for us

[Ivan Feinseth:]

With other phone manufacturers as well.

[Kevin Yeaman:]

Right.

[Ivan Feinseth:]

Also in your decision to get out of a conferencing, you mean just the conferencing hardware you're still going to focus on implementing Dolby Voice into other conferencing products?

[Kevin Yeaman:]

That's right. We're still supporting our enterprise communications partners or winding down the sale of the digital hardware for comp insurance.

[Ivan Feinseth:]

And with the cash you have, when you think about acquisitions, is there any specific direction you envision like that you could extend your brand to continue?

[Kevin Yeaman:]

Well, I think what we've been doing for the day has been in addition to expanding the presence of Dolby Vision, Dolby, Atmos across our existing categories. We see opportunities in new forms of content in gaming and music. But with Dolby.io, we are extending into all the ways in which we enjoy media and interactivity experiences. So when we think about acquisitions, it's through that lens. Are there opportunities that could accelerate or expand our opportunity? We don't look at it like we have this capital, so we need to go to an acquisition. And that's something that we're always – we're obviously like any company, we’re always looking at the opportunities that come our way.

[Ivan Feinseth:]

Thank you very much, and good luck going forward.

[Kevin Yeaman:]

Thank you.

[Operator:]

It appears we have no further questions. I'd like to turn the conference back to Kevin Yeaman for any additional or closing remarks.

[Kevin Yeaman:]

Thank you everybody for joining us today. Thanks for the questions. And we look forward to updating you on our progress. Have a great day.

[Operator:]

That does conclude today's conference. We thank you for your participation. You may now disconnect.