Kaleyra, Inc.
Q2 2020 Earnings Call Transcript

Published: 11 Aug 2020

[Operator:]

Good day, everyone. Welcome to the conference call to discuss Kaleyra's Second Quarter Fiscal 2020 Financial Results. At this time, all participants will remain in a listen-only mode, as our call is being recorded. Miss Alison Ziegler of Darrow Associates, you may begin.

[Alison Ziegler:]

Thank you, operator. Welcome to Kaleyra's second quarter fiscal 2020 conference call. Kaleyra released unaudited results for its second quarter ended June 30, 2020, aftermarket today. The press release as well as the replay of today's call can be found on the investor section of the company's website at investors.kaleyra.com. Joining us for today's call for management is Dario Calogero, Founder and Chief Executive Officer and Giacomo Dall'Aglio, the company's Chief Financial Officer. Management is doing this call from different locations today so please bear with us as we transition between speakers and address your questions.

[Dario Calogero:]

Thank you, Alison. And thanks to everyone who has joined us today for our second quarter conference call. These are very difficult times and one of the most challenging periods in our 20-year history. Two of our largest markets were in lockdown for much of the second quarter. However, the adaptability of our employees around the world, who seamlessly began working from home, the flexibility and functionality of our platform, as well as the strength of our customer relationships has enabled Kaleyra to grow revenues year-over-year. Overcoming the impact of COVID-19 revenues were $31.2 million in the second quarter, up 1.1% and above our guidance. Beginning in June and continuing into July, as economies around the world reopened for business, we've seen volumes recover. This has been driven by the increasing penetration of digital payments and an increased number of digital transactions. We believe the worst is behind us and are confident we will see improving revenue growth as we move throughout the year. Longer term, the pandemic is running an increase in the usage and reach of our platform, while simultaneously unlocking new segments, including government and non-government customers in the United States, Europe and Asia Pacific. The CPaaS or communication platform as a service industry continues to offer tremendous potential for growth and Kaleyra is very well-positioned to ride this wave. Being a publicly listed company is opening up for Kaleyra multiple opportunities with large accounts in the United States, including big digital giants, banking curvature and other Fortune 500 customers.

[Giacomo Dall'Aglio:]

Thanks, Dario. For the second quarter ended June 30, 2020, we reported total revenue of $31.2 million. This was up 1.1% from $30.9 million in the second quarter of 2019. Some additional detail includes total revenue benefit from shifting geographical needs and our first mega enterprise U.S. customers. This was partially offset by the client in previous services in Italy related to the credit card usage invoice, particularly in the Indian region related to the taxi service usage during the lockdown related to the COVID-19 pandemic. In the quarter, we process 7 billion messages and 0.5 billion voice calls. As Dario noted starting in June, we began to see an increase in transaction as the economies recover and new contracts are implemented. Gross margin was 14% in the second quarter of 2020. This compares with 19.5% in the second quarter of 2019. This is due to a decrease in either margin, premium service involved during the lockdown related to the COVID-19 pandemic. Operating expenses were $11.9 million Q2 2020 compared with $6.8 million in Q2 2019. These operating expenses include adding nearly 30 employees from the beginning of the year, the majority of which support finance engineering development and global sales $4.8 million in stock-based compensation, $1.8 million of transaction costs and $1.1 million of cost pertaining to public companies compliance, we did not have in Q2 2019. Excluding this cost operating expenses would decrease by $0.8 million compared with adjusted operating expenses of $5 million in the second quarter of 2019. Loss from operation was $7.5 million for the second quarter of 2020 and includes $4.8 million of stock-based compensation, $1.8 million of transaction costs and $1.1 of public company costs I just mentioned. This compared with a loss from operations of $0.8 million in the second quarter of 2019. Net loss was $8.1 million, or $0.39 per share for the second quarter of 2020 compared with a net loss of $1.3 million or $0.12 per share for the second quarter of 2019 when the company was still private. Adjusted EBITDA compatible with the previous year was $0.8 million in the second quarter of 2020 and includes approximately $1.1 million of cost incurred as a public company that we're now recognizing in the second quarter of 2019. With adjusting those cost but including the engineering center as the account increase, adjusted EBITDA would have been negative or $0.3 million and compares to $1.7 million on the second quarter of 2019.

[Dario Calogero:]

Thanks, Giacomo. The future is very bright for Kaleyra. Looking out to the second half of the year, we are at a very significant inflection point. Kaleyra is uniquely positioned to help enterprises communicate with their customers in expanded ways, and take advantage of the growing opportunities the pandemic has created in the already fast-growing CPaaS market. Whether it's voice messaging, push notification or email enterprises communication continues to get more and more digital and Kaleyra is ideally positioned to benefit from the growth. For the third quarter, we anticipate reporting revenues of at least $36 million, which would represent at least 15% sequential growth and result in a record revenue quarter for Kaleyra.

[Operator:]

The first question comes from Mike Latimore from Northland Capital Markets. Please go ahead.

[Mike Latimore:]

Great, thanks. Congratulations on all the great results there. So, Dario, you mentioned five customer wins. Do you expect all of them to start generating revenue in the third quarter, and then maybe talk a little bit about kind of why you won them was it quality of service and regional exposure? Any color on that would be great.

[Dario Calogero:]

Thank you, Mike. Well, since we have been listed in November, we amalgamated Kaleyra as a trustworthy vendor on a global basis for big digital giants and for our customers in general. After you won the deal with the big digital social media back in February, our companies accepted to use Kaleyra services in multiple geographies. One of the strengths of Kaleyra is to be a global player with a global footprint. So basically most of these large over the top customers are using Kaleyra to deliver traffic to multiple geographies internationally, in Asia Pacific and in Europe, and in Africa as well. They will provide additional revenues during the third quarter and I believe that what really made the difference is the fact that we are now a public company and this is creating value platform for multiple over the top large international accounts that use our services.

[Mike Latimore:]

Right. Then with this kind of work from anywhere engaged from anywhere environment that sort of emerging given COVID-19. It seems like there's the potential for new use cases and services to be in demand. Are you seeing particularly among your Italian and Indian customers, new use cases new demand for new services emerge?

[Dario Calogero:]

Oh, yes, of course. What happened this March is that multiple larger non-government organizations, including Red Cross, informational and similar entities started using mobile telephone and mobile communication to engage with volunteers and donors worldwide and COVID-19 being a perfect storm created also the burning platform for those organizations to take advantage of the platform services to close the gap and to bridge the distance with their own. This is happening also from government institution, for instance, in India, we are providing an interesting service which is like a triage for suspect COVID-19 patient that instead of showing up at the hospital, they can call in the service with a number that we provided together with other technology providers and we bridge this communication with medical doctors that volunteer across India to assess and qualify the need for those patients to go to the hospital. This is a good example of government initiatives that we have done for government institutions.

[Mike Latimore:]

Great. And it's just very last question on gross margin. As you look to the third and fourth quarter, I'm guessing you have some of your core regions and premium services growing and then you have new customers coming online and has natural seasonality. So how should we think about gross margin third, fourth quarter?

[Dario Calogero:]

Is definitely improving, in general, and the seasonality considering the way the contracts with operators are shaped. In the second half, we generally have a better profitability at the gross margin level and at an EBITDA level. Last year, we recorded about 80% of the EBITDA in the second half and this is going to happen again in 2020. In the first half, definitely we had an impact for COVID-19 due to the very severe lockdown we had in Italy and India. Now, this is releasing and already starting from July we start seeing volume up and also high margin services like SMS premium in Italy and voice in India taking off again. So I'm quite positive about the increase of gross margin profile in the second half.

[Mike Latimore:]

Thanks a lot. Good luck.

[Operator:]

Thank you. The next question comes from Lance Vitanza from Cowen. Please go ahead.

[Lance Vitanza:]

Hey, guys, thanks very much, and congratulations on quarter. I wanted to start to maybe go into a little bit more detail to follow up on Mike's questions regarding some of the new customer wins. Could you talk a little bit more, not just about whether or not the revenue is going to be coming in the third quarter, but I guess I'm just trying to get a better sense for the pace at which that revenue ramps up. Is that something where we should expect a six to 12 month period before we hit either the normalized revenue contribution from these new customers for or is it more you turn the spigot on day one and what you see is going to be what you get on a run-rate basis? Then I have some other questions as well, but maybe you could start there.

[Dario Calogero:]

Thank you, Lance. This is a very good question. Large accounts in general, have a ramp-up period before they get in full-fledge volume, but this is not lasting long. Is lasting between four to six weeks. We observe that every time we launch a new customer, it takes like one month before he gets in volume. And when he gets in volume, also we'll get the pricing point on the sourcing side on the supply side. So very long, four to six weeks before you're getting volume; so we expect already in the third quarter volumes and revenues coming from those new customers.

[Lance Vitanza:]

Okay. And then there's relative to at least our expectations. You're doing better in terms of new customer wins. That's helping on the revenue side. It's obviously putting some pressure on gross margin in the near term. But I'm wondering, what should we assume for sort of like a steady-state, longer term, gross margin potential? I'm thinking when you're at scale, and then also when you're no longer incurring the additional new customer startup expenses and this may be more of a theoretical question than anything else because hopefully, you're always going to be adding new customers. But if we were to think about it, without the dilution from the new customer startup expenses, what kind of gross margins would you expect in this business?

[Dario Calogero:]

Well, in general, the gross margin is the result of multiple factors. Not all the product lines have the same gross margin. The one that is getting the most significant cost of goods sold is SMS. But as long as we launch new services using IP, like voice or software, we will manage to widen our gross margin because the mix of the product will change. Also, the customer mix is going to change in because we have about 72% of our revenues in second quarter coming from the top 30 customer out of 3,000 that we serve but we are launching Kaleyra Cloud which is aimed at small-medium enterprises in the second half and this will change the mix of customers and smaller customer accounts with a much wider gross margin. So this will be another mean to widen the gross margin going forward.

[Lance Vitanza:]

Okay. And then, the new customer wins have been mostly in the media OTT side scrape, how is it coming penetrating the U.S. financial institutional market -- financial institutions? I know that we've talked about this in the past. It's a long sales cycle, but have you been continuing to make progress there?

[Dario Calogero:]

We're continuing to make progress there. I think that in the third quarter will announce at least one new deal with a large circuit, credit card plastic car circuit. We are already working with them and I believe we will start seeing revenues starting in the third quarter. Again, large accounts in banking and financial services and long sales cycles. We launched k-lab back in May. Now we are in August. So in three months, it's very short time to deliver and accomplish but we are on the right track and we see a lot of traction because the competencies and experiences that Kaleyra is providing with this k-lab team is impressive and very well received and accepted by the customers.

[Lance Vitanza:]

Sorry about that my phone was stuck. One last question for me if I can, and that is on Slide 18, I believe it is you basically give some detail around the volume of messages and voice calls, obviously down quite a bit in the second quarter. Can you provide any kind of update on those metrics in terms of how close to pre-COVID levels, amongst your existing customers would you say that we are as we sit here today, roughly halfway through the third quarter?

[Dario Calogero:]

Again, good question. Maybe Giacomo can help me in answer to this question. In general, what I'd say that starting from July, we were back to normal in Italy for banking and financial services. Starting from July we are recovering on voice in India. Especially due to a larger e-commerce platform which is using our voice services. Previously they were using only messaging. Giacomo, could you add some more color to the last question?

[Giacomo Dall'Aglio:]

Yes starting from July we see very good recovery in Italy and from the end of July also in India. So, we project that we give a guidance of revenues of $36 million and this is the high quarter ever in Kaleyra so we are recovering volume and revenues.

[Lance Vitanza:]

Great. Okay, thanks. That's actually very helpful. I appreciate it.

[Operator:]

Thank you. The next question comes from Tim Horan of Oppenheimer. Please go ahead.

[Tim Horan:]

Thanks, guys. Can you give us just maybe more color on like k-lab and the positive feedback from financial institutions? What do they like about what you're doing? How does that going to compare to what they're doing now? Maybe do you have the right go to market strategy there? Do you have the right salespeople and right sell support in that market right now or do you have to invest a little bit more there?

[Dario Calogero:]

Sure. Okay. Thank you. Hi. So basically, selling mobile banking services to large financial institution is a strategic faith. So it's not like off the shelf product placement. It's advisory, helping them in defining and designing new services on loyalty programs, on notification on transactional events on anti-fraud protection and security. We have an incredible experience in this in Europe and Europe is much advanced on banking and mobile banking. And we are now providing this knowledge and expertise with this k-lab team which is made and populated by senior executive with multiple times of experience in the industry. And we are in talks with about 50 prospects and we're already working with one of them that unfortunately doesn't allow us to disclose the name so I can't be more exclusive on this. We see a lot of traction because these be in the United States one of the cheapest player is security, compliance and integration first. Top of mine, wise we are like this. That's what we have been doing over the last 20 years in Italy and in Europe. We know exactly how to handle this and we know how to help them in designing the new services, so that's what's going on now although they take some time. Also, COVID and lockdown and work from home practices didn't help much but we are now managing to speed up the process and I'm very, very positive about themselves of k-lab going forward. Second half will be amazing.

[Tim Horan:]

Good luck. Then could you give a little bit more just at a high level how new customer bookings are going and sales and baby both existing customers and just adding new customers on? Has that process vetted by COVID, has that kind of started to pick up and maybe how does it compare to pre COVID?

[Dario Calogero:]

Well, obviously the ways of working changed significantly over the last few months. All of us, we are having different experiences. No more one to one face to face meetings, a lot of voice calls and video calls. Obviously, the whole system is adjusting to this new normal. With large accounts, what's happening is that basically, the COVID-19 has created the burning platform for them to accelerate the process of getting transformed, digitally transformed to bridge the distance with their audiences and their customers. Also a lot of online services transactional online services require strong customer authentication to make sure that the login and they're trying to do the protections are the ones that are allowed and are entitled to do that. One of the things that is definitely bulling is the strong customer authentication, the one-time password, pin code and this kind of thing. This is just the beginning because basically this thing is getting more and more conversational adding some, like secret sauce of artificial intelligence, natural language processing, we will see an improvement in the design of services that will change the way brands interact with their audiences and their customers during the transaction and also asked to say sponsored services, customer care and these kind of things. That's why I think, like many other industry peers and research analysts that at the end of the day, the pandemic has been a bad thing for the society and the economies but definitely is fueling the development of the CPaaS space.

[Tim Horan:]

Great. And then lastly, can we get a little bit more color on the gross margins for the second half of the year? Last year, you were in just a 21% range from gross margin to the second half of the year. You've been more down 14% for the first half, and the vines are pretty close to being back to where we were, but then I know you have a lot of new contracts that are initially close margin dilutive. Any kind of little bit more color on the second half? I know they'll be up but can they compare to last year second half and that 20%, 21% type range or should we look for something in between 14% and 20%?

[Dario Calogero:]

I will let Giacomo answer to this question more specifically, but I want you to consider also that notwithstanding the decreasing gross margin the company is still profitable and is generating cash flow, which means that now all the proceeds that we have raised with the primary and with that over $50 million will be used for investment because we do not burn cash. We are still cash positive and we'll keep on making money. So Giacomo, could you please answer to the question that relates to the gross margin in the second half?

[Giacomo Dall'Aglio:]

I think we'll be in the middle between 14% and 21% of last year. I think with the recovery of premium and voice can increase the gross margin from the first half. Of course, also, as you know, we have seasonality on time contracts and sourcing contracts that are on a cumulative basis yearly. So as much as you send message lets you pay. So in the second half we can trigger some level and we have a better price. But, of course, we have to consider also the stock top of the new big contrast in the connectivity and the enterprise sector. So I think we will be in the middle of the 14% and 21%.

[Tim Horan:]

Thank you very much.

[Operator:]

Thank you. The next question comes from Allen Klee from National Security Corp. Please go ahead.

[Allen Klee:]

Yes, hello. If we look at your operating expenses and what they've been running out in the first quarter and second quarter of 2022, with the exception of the $1.8 million of onetime costs in this quarter, is that a reasonable run rate going forward for the second half?

[Dario Calogero:]

Again, I would like Giacomo to address this question. One thing that I would like to say is that in the comparison between 2020 and 2019, we better keep in mind that in 2019 Kaleyra was still a private company. So now is varying a number of compliances and costs that are related to the status of a public company that were not acquired and recognized in the second quarter of 2019. So the comparison between 2020 and 2019 might be misleading also for this reason. If you could please rephrase the question for the benefit of Giacomo.

[Allen Klee:]

If we look at operating expenses this quarter, if you exclude the $1.8 million of transactional expenses, is that a reasonable run rate for where operating expenses will be in the third and fourth quarter?

[Giacomo Dall'Aglio:]

Yes, as I said we add almost 30 new employees in the first half so we can have a little increase in the cost of labor, but I think we'd be not very, very different.

[Allen Klee:]

Thank you. And then, could you help us a little bit more on what you said about guidance on adjusted EBITDA? The second half should be around 80% of the full year. The challenge I have with that is in the first half your first two quarters you had negative adjusted EBITDA; so I'm not sure where 80% is. If you could maybe help.

[Giacomo Dall'Aglio:]

What we say is that last year 82% of the adjusted EBITDA was coming from the second half so what we can say, even in this year, the vast majority of the adjusted EBITDA will be coming from the second half and the adjusted EBITDA in the second half will be positive, not negative as the first half. We are expecting a positive -- a much higher adjusted EBITDA than the first half.

[Allen Klee:]

Thank you and could you just help us -- educate us on the India market in terms of where it stands with the pandemic and the outlook for them opening up their economy?

[Dario Calogero:]

Well, India is a complex reality. It's a huge country with 1.3 billion inhabitants, with multiple states and towns, which rank in a range of 12 to 25 million inhabitants. Obviously, when you manage such a large country with such a huge number of inhabitants, you must be careful in terms of containing the pandemic. Also, it's a federal state. So you don't have the same line pretty much like in the United States. You don't have the same line across the board in all the states so you may have maybe New Delhi and Mumbai which are more closed now and you may have other states and other towns which are getting a much better situation. But in general, what the Indians are doing, they're managing very well the impact of the pandemic and if you look at the numbers, the number of cases and the number of death, it's definitely lower than expected considering how complex is the reality of the country. What is happening now in India is that they are opening up progressively and also the economic system have been able to quickly adjust on new digital interaction between citizens and consumer, and the organization, the government and the enterprises. So going forward, I'm pretty positive about the impact of the pandemic over the CPaaS services in India. But it's extremely difficult to follow predictions about the future, because the pandemic is weird, and it's also affecting with the manner the society, the economy. But my feeling and the feeling that we have is that also in India maybe a month later, compared to Italy and Europe, it's improving.

[Allen Klee:]

Thank you so much.

[Operator:]

Thank you. The next question comes from George Sutton from Craig Hallum. Please go ahead.

[George Sutton:]

Thank you, guys. For the benefit of the investors who are on the call and see the stock down 20% or so in the aftermarket, I think it is because the revenue guidance was below where the street was, which is a bit surprising given that we spoke just a handful of weeks ago and established numbers. Could you just discuss your $142 million or better guidance relative to the overall outlook? I think that'd be helpful.

[Dario Calogero:]

Sure, first thing I like to say that the guidance that we gave has being exceeded by the results of the quarter. We are over the guidance. We gave guidance between 30% and 31% and we are a little over 31. Giacomo, could you help me in answering to this question about guidance from George.

[Giacomo Dall'Aglio:]

Yes. What we said is in excess of $142 million and the street consensus is around $145 million so we are very close to consensus of the analysts.

[George Sutton:]

Okay. So there's been nothing in the last handful of weeks that have necessarily change your perspective? This is just your way of guiding is to provide a single point number and potentially an excess and you're not uncomfortable per se with the $145 million consensus?

[Giacomo Dall'Aglio:]

Yes.

[George Sutton:]

Trying to be clear about the meaning. Okay. Thank you.

[Operator:]

Next question comes from Jeff Bernstein from Cowen, please go ahead.

[Jeff Bernstein:]

Hi, Dario and Giacomo. So you said in the press release there's some headwinds from the cost of initial delivery phases. In the conversation, we talked about margins improving as volume scale, but can you just go through the mechanics of what the costs are when you bring on a new customer and if you can split those at all between the scale-up versus other initial costs to whatever extent you could do that would be great?

[Dario Calogero:]

Sure, thank you. Hi, Jeff. In general, when you open up a route to a specific geography where you still don't have volume, cease on the contract, with the operator for the termination of traffic volume base so you get better prices when you get higher volume. In the beginning, you don't add yet the volume but you open up the route and the cost of termination is fairly high compared to the price that you sell the service. As soon as the volume goes up, you get a better price. So you may start with the first few weeks at a very, very lean gross margin. As soon as you get the volume and you start delivering an awful lot of traffic to that specific geography, say Ghana or Nigeria or Cambodia, then you start having a better price on the sourcing side and you keep fixed the price that you have made to the customers and this is why the name the gross margin. So, every ramp-up of the volume on a specific geography come together with a very low gross margin at the beginning, but going forward, it's improving and is getting in the range of the typical conductivity gross margin which is about 50%.

[Jeff Bernstein:]

Got you, okay. And so, is -- are you -- you are opening up new geographies for all kinds of customers or are they really for these new customers that you're bringing on, that -- which is a little bit of a new experience for you?

[Dario Calogero:]

Well, there are customers that are worldwide players, there are companies that have global footprint delivering practice to 191, 195 geographies in the world. All of them they need to be sourced, and we are selectively serving them on sounds to see these geographies. Obviously, reason win-win situation when you start delivery for customer A traffic to this geography X; then you are the customer B which is willing to deliver traffic on the same geography X. And you enjoy a better margin because you get much more volume on that specific geography. Although these are geographies where we are incumbent, we are very strong; like Italy, India, Philippines, Malaysia, Indonesia, and there are geographies where we are newbies like in Africa, in Ghana, in Nigeria. And to open up a new route, you need to pay a ticket, and the ticket that you pay is that initially we get lower margin; then when you have volume, you get better margin.

[Jeff Bernstein:]

Got you. Understand. Okay. And so as you potentially add other customers who are desirous of the same routes, you won't see the same level of dilution headwind at the beginning of the contracts; those will come in at…

[Dario Calogero:]

Exactly, exactly.

[Jeff Bernstein:]

That's great.

[Dario Calogero:]

It's a metrics; it's a metrics where the cost of termination is the same across the board for every customer. So the more you add customers to that specific route and that specific geography, the higher the volume, the better the price and better the margin.

[Jeff Bernstein:]

Great, fantastic. And I just wanted to follow-up on one other thing; you were talking about k-lab and how you're helping customers and sort of the value-added wrapped around the pure messaging, and that you've had a lot of experience now in Europe with more financial services related applications, security, etcetera. And that you feel that that is a differentiator versus other U.S. kinds of players or players from other parts of the world that have not been compliant with the kind of requirements that are issued in the European financial services market?

[Dario Calogero:]

That's right, that's absolutely right. I believe that we bring an expertise and knowledge which has been built over the last 15 years in banking, financial services, credit card issuing and acquiring. And we are now exporting these expertise to the United States by the mean of k-lab as a trigger to engage with the customer and help them in designing their services to becoming more effective and more efficient in the mobile communication with their audiences. Most of the services are related to anti-fraud protection, but we are also working on loyalty, we are working on alert notification on status of the account, most of the traffic of payment cause due to COVID ramp-up of e-commerce has been related to prepaid plastic card. Prepaid plastic cards have typical issues like you better understand in advance that you are running out of credit on the card, and you better refill the card; and we are handling notification on such an event to make sure that the customer knows in advance that next month their Netflix subscription would be dead because your card doesn't have enough balance, so we send a notification to let the customer know -- the cardholder know that they better refill the card, not to lose the subscription of their favorite video provider like Netflix, is an example.

[Jeff Bernstein:]

Got you. Understand. All right. And then my last question; in the U.S. consortium of the carriers are investing in this CCMI for new risk -- rich messaging platform; I guess the same thing is happening with three carriers in Japan. How are you guys thinking about the these RCS kinds of platforms? Are you going to sort of take your customers there or are you going to wait for customers to be looking to get involved on those platforms?

[Dario Calogero:]

We are working closely with CCMI and with Google on RCS, we already delivered significant new services on verified SMS, which is a new way of certifying that the sender is an authorized sender of the message. We are -- we have done a trial in India, and we are working now with them to -- try to anticipate not to follow the opportunities on RCS. RCS, it has been around for years, for many, many years; now it sounds like it's getting real with the backing of Google and the mobile network operators that are willing to take advantage of RCS as the new breach mean of interacting with customer, which is the next-generation of SMS. And Kaleyra is positioned to work together with all of them on this.

[Jeff Bernstein:]

Got you. Thanks so much.

[Dario Calogero:]

You're most welcome.

[Operator:]

Thank you. This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Dario Calogero for any closing remarks.

[Dario Calogero:]

So, thank you very much, operator. And thank you, all, for joining today's call and for your continued support. We look very much forward to speaking with you again when we'll report our fiscal third quarter results in November. Please feel free to reach out Kaleyra for anything, and our Investor Relations team is always available to provide any answer to any questions that you may have. Thank you, ladies and gentleman, and talk to you soon.

[Operator:]

Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.