MobileIron, Inc.
Q2 2015 Earnings Call Transcript

Published: 31 Jul 2015

[Operator:]

Welcome to the MobileIron Second Quarter 2015 Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. [Operator Instructions] At this time, I’d like to turn the conference over to Sam Wilson, Head of Investor Relations for MobileIron. Please go ahead, sir.

[Samuel Wilson:]

Thank you, Joe. Good morning and welcome to MobileIron’s second quarter 2015 financial results conference call. Joining us from the company are Bob Tinker, CEO; Simon Biddiscombe, Interim CFO; Vittorio Viarengo, VP of Products. The format of the call will be a business review by Bob, and then Simon will provide details on the financials and other information. We will then have time for questions. If you have not received a copy of today’s release, please call MobileIron Investor Relations or go to MobileIron’s Investor Relations website at investors.mobileiron.com. Before we begin the formal remarks, the company advises that today’s conference call contains forward-looking statements. Forward-looking statements include statements regarding expected revenue, billings, gross margins, operating expenses, operating margins, recurring revenue and other projected financial results, market trends and opportunities, competition, research and development efforts, sales and marketing efforts, new product introductions and our growth strategy. Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented in the call may not contain current or accurate information. Further, certain forward-looking statements are subject to certain risks and uncertainties and are based on assumptions as to future events which may not prove to be accurate. Therefore, actual outcomes and results may differ materially from the expected or forecasted in such forward-looking statements. Information of potential risk factors are detailed in the company’s periodic filings with the SEC including, but not limited to, those risks and uncertainties listed most recently on our Form 10-Q filed on May 4, 2015. MobileIron undertakes no obligation to publicly release any revisions to forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the accuracy of unanticipated events. Our intellectual property case is ongoing. Results for MobileIron’s second quarter may be subject to adjustment depending on possible developments in the case. In addition, several non-GAAP financial measures will be mentioned on this call. Information relating to the corresponding GAAP measures as well as reconciliation of non-GAAP measures and GAAP measures can be found in our press release on the Investor Relations website at investors.mobileiron.com or on our 8-K filing with the SEC. At this time, I would like to turn the call over to Bob. Please go ahead, sir.

[Bob Tinker:]

Thank you, Sam. Good morning and thank you to everyone for joining today’s call. MobileIron delivers mobile security and productivity for the most demanding large and medium-sized enterprise customers around the world. At the end of the second quarter, over 70% of our business came from customers with greater than 1,000 employees. These medium and large enterprise customers value our security and enterprise class features. And for our business, these larger customers provide the greatest economic potential as we drive our business towards cash flow break-even exiting 2016. In just the last few weeks, IDC reported that worldwide PC shipments in the second quarter of 2015 declined by 11.8% year-over-year. It is clear to us that smartphones and tablets are becoming a mainstream enterprise computing platform. And as a result, security needs to evolve accordingly. The traditional security industry has been primarily focused on finding ways to detect new vulnerabilities and protect data on the legacy PC platforms rather than developing products for the new mobile world. Today, the primary reason for hacks or data loss are the vulnerabilities inherent in legacy laptop computing and applications. A mobile architecture greatly reduces the advanced persistent threats and data loss attack surface when paired with the right security. Don’t just ask us. You can ask all the major mobile OS players. They built the modern operating systems with a security model to address the synergies of the past. These modern mobile operating systems depend on a mobile security platform like MobileIron. Even the new laptop OS of Windows 10 which is really a mobile OS with a bigger battery, screen, and keyboard, follows this new mobile model. MobileIron’s architecture that combines our EMM security engine with our secure inline network gateway was purpose-built for this new mobile world. As enterprise data goes mobile, enterprise customers will pay to ensure the enterprise information is secure. Our differentiated platform combines with the secular tailwind, which is what drives our business today and in the future. It is up to us to capitalize on this opportunity in front of us and drive our business to cash flow positive and profitability. I’d like to now turn to our second quarter results and how we are running the business. For the second quarter ending June 30, gross billings were $38.9 million, up 11% year over year. Non-GAAP revenue for the quarter was $34.1 million, up 14% year over year. Recurring billings towards which we are driving the business were $25.1 million, up 36% year over year. And recurring billings as a percentage of gross billings climbed from 53% to 65% year-over-year. Our recurring billings is now over $100 million a year run rate. Now, although gross billings came in at the high end of our guidance range and revenue came in slightly above our guidance, it is clear that we have more work to do to put the company on a growth path that we believe to be achievable. I’d like to share our thoughts about how we’re running the business and the actions we are taking to drive the business forward. First of all, our mindset is to drive growth in the underlying business, manage through the product mix shift to subscription and monthly billings, while controlling expenses so that we achieve our cash flow break-even target of Q4 2016. After our Q1 results, we implemented a series of changes. We have new sales leaders on board in North America and Asia; we also have a search underway for a new worldwide VP of sales. We implemented new sales forecasting process to increase upstream visibility into the mix of perpetual, subscription, and our month-to-month billing types. We updated our customer analytics tooling to provide more visibility into customers who are ready to expand. And finally, on the expense side, we realigned our expenses to better match our billings growth rate. We are targeting expenses in the $45 million to $46 million range. I want to reiterate, our goal of cash- flow positive exiting 2016 is a priority for me and the rest of the management team. To more details on Q2, as we had predicted, we did see some shift in our business back towards perpetual licenses, but not to the levels we saw exiting 2014. New customers continue to show a preference for subscription billing models. As a data point, this trend line is best seen in our MRT, or month to month business, which is growing 59% year-over-year and now makes up 13% of our total billings. And as I mentioned before, our overall billings, recurring billings grew 36% year over year In closing on the second quarter information, AFPs were approximately flat quarter-over-quarter and year-over-year, and our renewal rates were in line with our historical trends of over 90%. Let’s shift gears to our platform and our customers. We recently released version 8.0 of our platform for securing apps, documents and devices. This release includes several innovations I’d like to highlight. We were first to market with visual privacy. Visual privacy allows employers to see what their employees can and cannot access on their mobile devices. This increases trust between end users and IT, which accelerates mobile deployment, especially in BYOD scenarios where privacy is essential to program success. We expanded Tunnel to Android and Windows, which drives our premium package sales. Workers can seamlessly and securely access work apps via a secure micro-tunnel with a single click. We also extended our innovative content security service with a major enhancement that allows IT to separately maintain their own encryption keys for securing enterprise documents that their users store in personal cloud services, like Dropbox and G-Drive. And we expanded our TAM with shipping MobileIron for Windows 10. While we are realistic that it takes some time for Windows 10 smartphones, tablets and laptops to be adopted by the enterprise, Windows 10 is a proof point that future computing follows the mobile model and could represent a significant TAM expansion for our business. On the customer front, we continued to rapidly add customers around the world and now have over 9,000 customers that have purchased our solution. Our second quarter new customer additions continue to be in line with our historical trends. Among many new customers that we added or expanded in Q2, I’d like to thank and welcome Hormel to the MobileIron platform. Hormel, a leading food products company, purchased our platform to secure mobile applications and content. I’d like to also welcome the second largest pharmaceutical company in Japan, Daiichi Sankyo. Daiichi also purchased our platform for similar reasons, to secure apps and content. And continuing our track record of recent positive government trends, we’d like to also welcome the Royal Australian Mint as a new customer. And we would not be surprised if they decided to pay in cash. Each quarter, many hundreds of our customers expand their business with MobileIron. Thanks to Saint-Gobain of France for the large expansion order. Saint-Gobain is a 350-year old global materials company. It has seen a lot of technologies emerge over the years. Saint-Gobain now has over 30,000 mobile devices secured by MobileIron, and it’s soon to roll out Google’s Android For Work. Two quarters ago, we welcomed Continental Automotive as a new customer. Now, we’d like to thank Continental for their significant expand order. Our customers use mobility to transform their business. Sky Broadcasting of Europe is one such company. Sky serves 21 million customers across five countries and employs 31,000 people. After a competitive evaluation, Sky selected MobileIron as their mobile security in their platform. Sky employees around the world now have secure access to corporate e-mail, use in-house and third-party apps, and connect to VPN. Sky built more than 10 corporate apps to streamline fast in the IT, field engineering, and sales teams, as well as to enhance file distribution and browsing for all employees. Sky built an app that allows sales agents to demonstrate the content appearing on Sky in the upcoming months. Another app eliminates the need for sales reps to log sales on paper. Sky field engineers use a mobile app to schedule jobs, run diagnostics, place orders, all while allowing them to present a cutting-edge image to their customers. Sky is a great example of how customers are transforming the business with mobility. Also in Q2, we added to our global network of reseller channels to extend our global reach and gain sales leverage. We recently signed Telefonica as a European reseller partner. With Telefonica, we are pleased to have all the largest European business-to-business mobile operators as channel partners, Telefonica, Deutsche Telecom, Vodafone, and Orange Business Services. Finally, let me comment on some recent recognition for MobileIron. In June, Gartner released the 2015 Magic Quadrant for the EMS sector. We are proud to share that MobileIron was positioned in the Leaders Quadrant for the fifth year in a row and listed furthest to the right as the most visionary. We also believe the commentary in the report recognizes our ability to scale, secure apps, and our track record of customer success. It’s useful to look at how the Magic Quadrant has evolved over time. The number of vendors in the MQ went from 23 back in 2011 to now only 12. This compression directly contradicts the sentiment we sometimes hear regarding expanding competition and commodity market dynamics. We believe the bar in our market is high and the expectations of enterprise customers continue to rise. What does this mean for MobileIron? The future of enterprise security is rapidly evolving towards the mobile security model that we pioneered back in 2009. This puts MobileIron in a strategic position in a big market with no incumbent and a high bar to entry. In conclusion, while we have work to do to reaccelerate our growth, I remain very positive about our market and the business opportunity ahead to create significant shareholder value. Now, let me hand off the call to Simon to cover the Q2 financial results in detail.

[Simon Biddiscombe:]

Thanks, Bob, and good morning, everyone. We were pleased with our second quarter financial results, delivering the high end of our billings guidance, slightly exceeding our revenue guidance, and, through financial discipline, delivering lower than expected operating expenses. In my commentary, I will begin by providing additional details on our performance for the second quarter of 2015 and will conclude with our outlook for the third quarter and beyond. Our discussion will primarily focus non-GAAP financial measures. Our press release and website provide a reconciliation of GAAP to non-GAAP financial results. Bob has already covered the billings total for the second quarter in detail in his prepared remarks. So, starting with non-GAAP revenues, they break down as follows

[Operator:]

[Operator Instructions] The first question today comes from Raimo Lenschow with Barclays.

[Raimo Lenschow:]

Let’s start with what you see in terms of demand environment out there. We obviously saw numbers from Citrix. We saw numbers from VMWare. We saw growth rates in there. Can you kind of compare and contrast your results to them, please?

[Bob Tinker:]

If you look at our demand environment, over the past quarter we saw a similar number of net new customers that we won relative to past quarters. If we look at those new customers from a demand perspective, they are increasingly demanding cloud and our subscription billing services. Now, the one comment I would make is that if you look at our existing customers, one of the things we are seeing is lengthening sales cycles on some of our large expand orders. And when we talk to customers about that, there is two primary reasons underneath that. One is that mobility is increasingly a C-suite topic, and the second one is there are a lot of technology changes going on right now in the market, such as Android For Work, Windows 10 and cloud, where customers want to make sure that they’re taking a look at those technologies as part of their expand orders with MobileIron. Now, I would add to that, Raimo, that overall our most recent data shows that we are holding share, with revenue growing at 14% because that embeds a mix shift that underneath, which our organic growth is higher. Now, that being said, we should be doing better and I think we would say VMWare did a nice job over the last quarter and we congratulate them for that.

[Operator:]

The next question is from Michael Turits with Raymond James.

[Michael Turits:]

Good to see the stabilization, and I like the focus on expenses and clarity around cash flow. Appreciate it. Any comment at all on the competitive environment, in particular, any sign of Microsoft with EMS starting to pop up here? And then also, as the shifts in mix and demand moves towards cloud, do you feel like you’re getting the same level of win rates as you have been previously?

[Bob Tinker:]

In terms of the competitive environment, we have not seen changes to the competitive environment. We basically see VMWare in most of the deals. With regard to Microsoft, they would be the other one that we do occasionally see. EMS is Microsoft’s package that includes Azure Active Directory, and I think it’s important to separate that EMS package, which includes InTune from InTune itself. When we go up head-to-head against InTune, we generally win.

[Michael Turits:]

And then, how are you doing – go ahead, sorry.

[Bob Tinker:]

Your second question was around cloud. So we have great cloud products. As more and more customers move to cloud, that drive our billings towards subscription, but we’re not seeing any change in win rate, and we continue to see the same dynamics around that, as well.

[Michael Turits:]

And then just one mechanical question. It seemed as, if my calculations are right, that subscription billings may have gone down sequentially. Am I right on that and then [indiscernible]?

[Bob Tinker:]

I’ll let Simon take that one.

[Simon Biddiscombe:]

We don’t actually provide you the detail of a subscription billings number, so we’ll steer clear of providing that number on the call.

[Operator:]

The next question is from Mark Sue with RBC Capital Markets.

[Unverified Analyst:]

Bob, this is [Amit] on behalf of Mark Sue. There’s a lot of investments in the platform integration with OS partners. Are you finding that customers are willing to pay for the innovation? Maybe we could just talk about the percentage of new seats that are gold and platinum customers versus maybe comparing that with the install base.

[Bob Tinker:]

Thank you for that question. It’s a great one, because inside our customers, we’re seeing two core dynamics. One is that they’re increasingly using multiple different operating systems, iOS, Android and then Windows. The second dynamic we’re seeing inside our customers is that their requirements are becoming more sophisticated. And as a result, they’re increasingly buying, and paying for, our gold and platinum packages that include security and management for applications, content and our advanced features like per-app VPN or Tunnel. So, yes, we believe the investments that we’ve been making in R&D is yielding an impact not just in continuing our win rate, but also driving a better pricing environment for our business. And that I believe is backed up when we talk about the attach rates of our net new premium services, such as our gold and platinum bundle, continue to be very high.

[Unverified Analyst:]

And just considering the calendar 2015 billings is lowered, I guess to clarify, that’s mostly related to MRC. And we don’t see – there’s limited visibility there. So maybe you could just talk about historically what you’ve seen in terms of churn rates for monthly contracts and is the mix for the MRC contracts changing in terms of are you seeing more enterprises leverage the carrier channel to implement their EMM solutions, or is it mostly SMB?

[Bob Tinker:]

Let me pull that apart and tackle each one those. So from a billings perspective, when we took a look at the guidance for the rest of the year, what we do see as part of our improved forecasting process that we implemented over the last several months, that we do see the mix of subscription and MRC being higher and more like that we saw in Q1. That’s first part of your question. The second part of your question was around churn. Our renewal rates, as we reported are high, over 90%. And when you look at the different types of ways we sell perpetual, subscription, and our month-to-month contract, in particular the month-to-month contracts, there’s no long term commitment. However, we do not see a significantly different renewal rate for customers that buy that way. I think that’s important because fundamentally renewal rates are driven by customer satisfaction with the product, and our capabilities and their use of it, not by the terms of the contract. And we believe we wouldn’t see any reason for that changing. The third piece which is in terms of the carriers, the mobile operators are an important channel to us. We have many of them around the world. The carriers do tend to sell the month-to-month billing model. Now, in terms of providing a more granularity about how that portion of the business evolves specifically, that’s not something we break out differently.

[Operator:]

The next question is from Karl Keirstead with Deutsche Bank.

[Karl Keirstead:]

Bob, I’ve got just a question on the license performance during the quarter. On the Q1 call, you had first flagged these delays in the license space seat expansion and had mentioned that some of those deals did in fact close in April. So I just wanted to ask you, did they close in April, but then on other deals you saw delays? Maybe a little color on how that played out in the quarter relative to your comments on the Q1 call.

[Bob Tinker:]

So if you look at the Q1 deals that we had talked about in our Q1 call, yes, actually a big chunk of them did close. Some of them did not, but a big chunk of them did. The second piece is what I mentioned on this call which is that as we talk to customers, one dynamic we are seeing as they deployed more sophisticated and evaluate larger deployments, that we are seeing some signals of extended sales cycles for those larger expand orders. So as you might expect, that’s rippling through and that’s the reason that we are continuing to hold our guidance where it is.

[Karl Keirstead:]

And then if I could ask a follow-up to yourself or to Simon, you’ve mentioned a few times on the call about an increased focus on OpEx. But if I look at your 3Q non-GAAP OpEx guide, at the midpoint, you’re projecting 17% growth in OpEx, which is a growth that exceeds both your revenue growth and your projected billings growth. So at first glance, it’s not obvious actually where the benefit is from this increased focus on OpEx. So maybe if you don’t mind just helping us understand exactly where are you cutting OpEx and when should we start seeing it flow through to your guide?

[Simon Biddiscombe:]

If you look at where we expected the operating expense structure for the business to be coming into Q2, we provided you guidance and said we expected somewhere between $49.5 million and $51 million. And then subsequent to providing that guidance, there was a tremendous amount of work done within the organization in recognition that the growth trajectory wasn’t what we’d expected it to be. We reduced sales and marketing expense with reductions in both headcount and program spending. We selectively chose hiring across other departments. We put a giant squeeze on what I would characterize as discretionary spend at that point. So in Q2 you saw us make progress relative to the guidance. And now what we’re telling you is as we look at Q3, we’re seeing another $2 million decrease in operating expenses in the midpoint. And [indiscernible] is the fact that we need to continue to invest in R&D, as Bob said in his prepared remarks, and as we talked about in some of the Q&A here, we have to continue to bring innovative new products to market. There’s tremendous amount going on in the environment at this point in time and we need to be responsive to that. And therefore, R&D will continue to pick up from where we have it at this point in time. On the sales and marketing side, we clearly need to continue to sharpen our pencils. As Bob said, we’ve got new leadership in both North America and APJ. We’ve certainly restructured certain headcount within the context of North American market. So we see that sales and marketing line sitting somewhere around $25 million, $26 million. And then on the G&A side, we’ll continue to make sure that we drive the cost structure in the right direction. So much though it may not appear that it is specifically aligned to the billings guidance that we provided, I will assure you there is no lack of focus or understanding of the importance of driving cost out of the business and bringing our model in line with the objectives that we set at the analyst day and recognizing the importance of cash flow break even in the fourth quarter of 2016.

[Operator:]

The next question is from Heather Bellini with Goldman Sachs.

[Heather Bellini:]

I’m just trying to, I guess, parse the comment about the end market demand and the competitive advantages MobileIron has and the Gartner Magic Quadrant with revenue growth rates that continue to decelerate more significantly than certainly what you were talking about when you went public and six months ago. And I’m trying to get a sense of, one, is it because people are concerned about your cash burn rate being as high as it is, given your revenue growth rate? Are you starting to get more questions about that? And two, are people starting to buy as one of the reasons for these pushouts and delays that you were just talking about with Karl, due to the fact that a lot of your existing customers have big VMWare relationships, if these are becoming more CIO-type decisions, are they entertaining, more often than not, buying from a suite provider that they already have a really good relationship about where they don’t have to worry about the cash burn trajectory?

[Bob Tinker:]

So in terms of conversations with customers, when they make decisions about what product they buy and decisions about which products and platforms to expand with, they’re much more focused on the technology product. I don’t really get questions in sales calls about our financials. We occasionally do get questions about our stock price, but typically people look at our balance sheet and feel comfortable. The second question is, is part of the slowdown in, slowdown is a wrong word to characterize it, is part of the extended sales cycles on expand orders due to customers looking at other platforms, the answer is typically not. Now, I can’t say that it’s not happening occasionally. But when a customer buys a platform like MobileIron, they tend to expand with a platform like MobileIron. It’s very sticky, it’s very unusual to see customers switch from one platform to another. So we don’t think that that is a contributing factor. The major contributing factor we see is really the rate of change in the technology market around Android 4, Windows 10, Office 365, cloud is causing customers to do more robust and deeper technology evaluations, which we think is a good thing in the long run. I’m sure there are some customers maybe chatting with Microsoft and maybe affecting our sales cycles a little bit, but that’s not the predominant factor.

[Operator:]

The next question is from James Faucette with Morgan Stanley.

[James Faucette:]

Most of my questions have been answered, but I wanted to dig in a little bit into the operational improvements that you’ve made particularly since the beginning of the year and wondering if you can give a little bit of color now with retrospect and benefit of hindsight, what kind of caught you off guard in the first quarter in that swing between perpetual and term, and then that seemed to come back, but yet you’re still talking about the trend being away from perpetual. Just trying to get a little bit of color as to how you feel like now that you’ve had the opportunity to examine things. And then wanted to also dig in a little bit on the billings outlook. If you’re looking at not as much, or more coming through the month-to-month component and not as much through some of these other longer-term contracts, how does that impact your visibility into upsell opportunities and the like as we start to look forward into 2016 and beyond?

[Bob Tinker:]

So retrospectively thinking about mix and what caught us off guard in Q1, the big operational improvement we made there was around our forecasting process. And specifically, improving our forecasting process to see deals further upstream and identify what billing types that they’re going to come in as, perpetual, term subscription, or month-to-month, that’s further up the pipeline, so we could do a better job of forecasting. That is the thing that I wish we had done a better job of, so that we didn’t get caught off guard in Q1. That also relates to the billings outlook, which is now that we actually have that improved forecasting process that we’ll look further upstream is the mix. That’s what gives us the data to look and say we believe as we enter the back half of the year that the mix will continue to head towards the recurring billing types of subscription and MRC, which we love in the long run and we’re definitely trying to drive our business that way. But that visibility from the forecasting process is what is the major ingredient to our billings outlook. The last part of your question, how does that impact visibility into expand orders? It doesn’t. Mix doesn’t affect visibility of expand orders. As I mentioned, we’ve improved our tooling to understand which customers are – how far along in your deployments and maybe right for an expand order and at the same time, that’s actually a major function that our sales team provides is working with our customers and our channel partners to identify which customers are ready to expand. It does not have any other effect on expansion.

[Operator:]

The next question is from Michael Kim with Imperial Capital.

[Michael Kim:]

A couple areas. First, if you could provide an update on the status of litigation with Good? I think it was essentially on trial, maybe a commentary around legal expenses. I think you also mentioned that it would probably likely be lower here in the third quarter. And then I have a follow-up.

[Simon Biddiscombe:]

You’re absolutely right. This is Simon. The trial is ongoing. We’re clearly not in a position where we can provide any commentary on that at this point in time. As it relates to the expense, yeah, we provided you with the expense number for Q2 very specifically and we do expect that to tick down in Q3. We didn’t provide you with the precise dollars on that. But clearly, we can’t comment too much on any of that at this point in time.

[Michael Kim:]

And then turning back to the business with Windows 10, maybe you could comment on the opportunities you see for there. Are you significantly investing in some new offerings to enhance the platform, and any marketing programs around that?

[Bob Tinker:]

As the product platform recently shipped our support for Windows 10, the reason why that matters is that Windows 10, as I mentioned earlier, fundamentally is really a mobile operating system with a battery, screen and keyboard, and will, we believe, drive demand for MobileIron platform in the future. And to give you a sense for how the world has changed, in our worldwide user conference in June, Microsoft was on stage with us to announce and share just how Windows 10 plugs into the EMM security and management model. Our customers are asking us and very interested in Windows 10, particularly at least in the near term around the tablet side of that. And we see that our capability to deliver security and management across the different platforms, including Windows 10, will continue to drive demand in the future and we’re excited about Windows 10, as they can expansion opportunity for us as next generation laptops and desktops fold into our operating model.

[Operator:]

The next question is from Robert Breza with Wunderlich Securities.

[Robert Breza:]

Bob, just a quick question. As you talked about adding some of the new leadership on the sales side, can you give us a framework of how you’re thinking before you have the new head of sales, the VP worldwide head of sales hired, also an update regarding other management changes?

[Bob Tinker:]

First part of that, we’re pleased to have new leadership on board in North America and APJ. As I mentioned before, search in underway for the worldwide VP of sales. If you look at how we’re thinking about that, we’re continuing to execute, drive the business, win new customers, expand new customers. And if you look at the profile of the search, we’re looking for somebody that’s built a sales regime from a $150 million a year to well beyond. And we’re pleased with the pipeline of candidates we’re getting a chance to look at.

[Operator:]

[Operator Instructions] There is a follow up question from Michael Turits with Raymond James.

[Michael Turits:]

Obviously, the revenue is being impacted by the shift to billings and MRC, which tend to a trend line, and you mentioned that the 14% was not as high as what you called your organic rate. So do you have any rough estimate of how much of a hit to, you might think is your organic rate you’re taking from the mix shift?

[Simon Biddiscombe:]

It’s a great question. It’s not something that we share.

[Operator:]

There are no more questions at this time. I’ll turn the conference back over to Sam Wilson.

[Samuel Wilson:]

Thank you everyone for joining us today. There will be a replay available starting in a couple of hours at 877-870-5176877-870-5176 or 858-384-5517858-384-5517 FREE through September 30, 2015. The PIN number required is 90730. Thank you everyone.

[Operator:]

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