SharpSpring, Inc.
Q1 2018 Earnings Call Transcript

Published: 12 May 2018

[Operator:]

Good afternoon. Welcome to SharpSpring's First Quarter 2018 Earnings Conference Call. Joining us for today's call are SharpSpring's CEO, Rick Carlson; and CFO, Ed Lawton. Following their remarks, we will open up the call for your questions. Then before we conclude today's call, I'll provide the necessary cautions regarding the forward-looking statements made by management during this call. I would like to remind everyone that this call is being recorded and made available for replay via a link available in the Investor Relations section of the company's website at investors.sharpspring.com. Now I would like to turn the call over to SharpSpring's CEO, Rick Carlson. Sir, please proceed.

[Rich Carlson:]

Welcome, everyone, and thank you for joining us today. After the market close, we issued a press release announcing our results for the first quarter ended March 31, 2018, a copy of the press release is available in the Investor Relations section of our website. The first quarter marked a solid start to the year for SharpSpring and put us in firm positioning to execute against our company goals for the rest of 2018. Plus notably in Q1, we achieved a record $4.2 million in total revenue, which represents a 38% increase over the prior quarter. This growth was driven by the continued expansion of our flagship marketing automation platform, which posted revenue improvement of 43% when compared to Q1 of last year. This quarter, we were also successfully able to bring on 223 new customers, which are up over the prior year. What makes this number more encouraging is the fact that it was accomplished in the phase of seasonality and price increase-related headwinds during the period. To date, SharpSpring has over 1,400 agency partners and nearly 7,000 businesses using its marketing automation platform. We feel that this user base is just the beginning as we continue to make headway within the largely untapped marketing automation industry. To that end, we also recently announced an $8 million financing that has significantly enhanced our balance sheet and will allow us to continue to be aggressive in pursuing the large greenfield opportunity ahead. Finally, we also added to our leadership team this quarter with the additions of Jeffrey Imm, as our new COO and Dan Allen to our Board of Directors; we brought on people that will enable us to reach the next level in our long-term growth strategy. In a minute, I'll come back online to further elaborate on some of these developments and to provide an outlook for the rest of the year. But before I do, I'd like to turn the call over to our CFO, Ed Lawton, who will walk us through the financial results for the quarter. Ed?

[Ed Lawton:]

Thank you, Rick. Turning to our financial results for the first quarter ended March 31, 2018. Our total revenue in the first quarter increased 38% to $4.2 million from $3 million in Q1 of last year. Our flagship SharpSpring marketing automation solution grew by 43% to $4.1 million compared to $2.8 million last year. Our gross margin in the first quarter of 2018 increased to 67% from 58% last year. In dollar terms, gross profit increased 59% to $2.8 million from $1.8 million in Q1 of last year. Over the past few years, we have invested in our hosting infrastructure and support organization to reinforce the current and future growth of our product. As I mentioned last quarter, we are continuing to add more revenues onto the platform, which has created some leverage in our operating model through improved gross margins. In the future, we expect to continue to see margin expansion as we move forward and layer more revenues onto our platform. We expect gross margins in Q2 to be consistent with Q1 and then gradually trend upward during 2018 to about 70% by the end of 2018. Turning to our operating expenses. For the first quarter of 2018, our operating expenses increased 28% to $4.9 million from $3.7 million in Q1 of last year. The increase was due primarily to increased investments in sales and marketing initiatives. Our GAAP net loss from continuing operations for the first quarter totaled $2.1 million or $0.24 per share. This loss was an increase from a GAAP net loss from continuing operations of $1.4 million or $0.16 per share in Q1 of 2017. On the balance sheet, we had $12.3 million in cash at the end of the quarter compared to $5.4 million at the end of the prior quarter. The increase in our cash position was due to an $8 million convertible notes offering with a group managed by existing institutional investors. The notes represent a major investment by a group of sophisticated investors, who wanted to invest more in the company and participate in the upside ahead of us. From our standpoint, we were able to raise significant growth capital while also minimizing dilution for current shareholders. The notes are convertible at $7.50, which is about a 50% premium compared to the price of our stock when the deal was negotiated. There is a 5% coupon that will be paid in the form of additional convertible notes. The notes mature in five years, but we have the ability to extend the notes for up to 18 months at maturity. For more information regarding this transaction, please consult the related press release on our Investor Relations website as well as the associated Form 8-K filed with the SEC. And one other note related to cash, based on our current assessment, we are also expecting a cash tax refund related to the use of NOL carrybacks in the amount of $1.7 million during the middle of this year. Looking at our non-GAAP measures, our adjusted EBITDA loss for the quarter, which we defined as earnings before interest, taxes, depreciation, amortizations, noncash stock-based compensation, restructuring expenses, acquisition-related charges and intangible impairments totaled $1.65 million. This compares to an adjusted EBITDA loss of $1.6 million in the same year-ago period. We continue to invest in new sales and marketing programs designed to drive continued growth and invest in our development team to develop and launch new features on the platform. Our core net loss, which excludes amortization, acquisition-related costs, restructuring expenses and stock compensation expenses while adjusting for taxes for the first quarter of 2018 totaled $1.7 million or $0.20 core net loss per share, an increase from a core net loss of $1.1 million or $0.14 core net loss per share in Q1 of last year. For more details on our adjusted EBITDA and core net income metrics, please see the reconciliation to GAAP terms included in the supplementary tables of today's earnings release. Moving on to our SaaS metrics. During Q1, our customer acquisition costs increased from prior periods due to timing and marketing spend compared to when new sales come in. As a reminder, our calculation of reported customer acquisition costs for Q1 of 2018 is the sum of all of our sales and marketing costs from Q4 of 2017 divided by the new wins from Q1 of 2018, resulting in customer acquisition cost of $8,676 for Q1. Using the prior quarter cost, provides a better estimate of our customer acquisition cost to account for some of the average sales and marketing time line we experience. However, this measurement is still imperfect, because marketing spend in one quarter impacts the deals we win in many future quarters. This dynamic has a larger impact on our calculation when we have larger shifts in our sales and marketing spending, which has occurred over the past few quarters. While we do experience fluctuations in this metric from quarter-to-quarter, we are confident that our customer acquisition cost will normalize around $7,500 and that we can consistently acquire customers at attractive all win rates that will deliver a significant lifetime value for the business in the future. Moving on to attrition. During Q1, we saw a significant improvement in our net revenue attrition -- net revenue retention, due probably to added customer charges associated with new platform functionality, we actually experienced net expansion from our customers over the quarter. That is to say that the expansion revenues from our continuing customers more than offset the lost revenues from the logo attrition that we experienced. Going forward, we expect this metric to hover around 1% net revenue attrition for the remainder of 2018. Based on our historical customer dataset, we expect the lifetime value of these new customers to be approximately $50,000 for agency customers and approximately $40,000 for all customers on a blended basis. These values reflect the benefit of the company on a discounted basis after reducing for gross margin cost to support the customers on the platform. Based on these figures, our expected lifetime value to customer acquisition cost ratio continues to be compelling. I'd also like to take a minute to discuss two housekeeping items before turning the call back over to Rick. First, we secured an extension of our existing credit facility increasing the term about 2 years to March 21, 2020. We feel that having a credit facility in place provides flexibility and follows good management practice. Second, we recently signed a lease for a new headquarters office in Gainesville. This new construction building will provide us additional office space for our growing staff and will help us recruit talented individuals to the company to drive future results. We're excited to move into this new space when the build out is complete near the start of Q4. This completes my financial summary. I'd now like to turn the call back over to Rick, for additional insights into our operational progress in Q1 as well as our outlook for the rest of 2018. Rick?

[Rich Carlson:]

Thanks, Ed. As I highlighted earlier, the first quarter was a great start to the year. We continue to execute against our goals posting record revenue, bolstering our balance sheet and accelerating sales and marketing initiatives to build our pipeline and acquire new customers at a more rapid pace. Moving forward, our focus in 2018 is on building for the future to systematically scale our business and accelerate growth. We've already seen the positive effects of our increased sales and marketing spend over the latter half of 2017, which is why we committed to further expand new program as well as to strategically invest and further advancements to our platforms. I want to take a minute here to more fully explain the rationale behind our decision. As Ed mentioned earlier, SharpSpring's LTV to CAC ratios remained amongst the best in the industry meaning that our cost to acquire a customer is very well in relation to our overall lifetime value that customers could provide to SharpSpring. And looking at these numbers and after already realizing the direct benefits of these in a short-term increase in sales and marketing spend, the decision to accelerate spending was clear. In making this decision now, we will optimize our ability to set the company on a long-term growth trajectory for many years to come. In short, we chose to put our foot on the gas and think long-term. Our $8 million financing strengthens our balance sheet and allows us to continue focusing our efforts on accelerating customer acquisitions and increasing revenue growth. But this financing also allows us to do a few more things. On a general level, it allows us to continue to make improvements to our platform to some of which I will mention in a minute. But it also allows us to continue to invest in additional leadership resources to drive our future growth. Most recently, we announced the appointment of Daniel Allen, to our Board of Directors. Dan brings a wealth of financial and capital markets experience as well as deep insight into software companies and SaaS business models to our company. We look forward to his contributions and guidance as we continue to expand SharpSpring's footprint in the marketing automation space. Although, and related, Dan's appointment happens to coincide with the departure of 2 current board members, Roy Olivier and Rens Troost, both of whom will not stand for reelection in the coming year. On behalf of our board, I would like to thank Roy and Rens for their service and assistance in bringing us to this pivotal point in our development. We wish them continued success when they devote their full time and attention to their respective day-to-day endeavors. Another recent leadership move was to bring on Jeff Imm, as SharpSpring's COO, which we did in February. Since joining, Jeff has quickly immersed himself in the business and has started to drive the improvements to the team and company we were expecting. Jeff's primary goals are to increase lifetime value of our customer base by improving attrition and increasing customer expansion over time. Jeff and his team have been developing strategies to fend off attrition with new programs to address customers and to explore new programs design for at-risk customers and to explore new programs to expand licenses with healthy customers. Although the impacts of his efforts in these areas will develop over time, we are thrilled with the improvements he is making and are looking forward to seeing the long-term benefits of his efforts. I'll now take a minute to highlight some of the major platform improvements we have made recently that have us and our customers most excited. First, an update on our social media management tools that we launched in January. As of today, over 2,300 individual companies or roughly a third of the companies on our platform have created at least 1 social profile and sent a combined 34,000 social posts through the SharpSpring platform. The vast majority of this group has taken place in just the last four months since we launched the feature. This has been the most successful launch in the company's history and the feedback from customers has been both extremely enthusiastic and very positive. As a reminder, SharpSpring Social media tools are included in the standard license cost of SharpSpring and these features serve to extend the value and utility of our platform for our agency partners and their clients. We also introduced a version 2 of our sales oriented e-mail functionality that we call Smart Mail. Smart Mail is a sales focus tool that is included in our CRM and enables users to send pre-bill marketing approved e-mail directly to leads in SharpSpring making it easier for sales teams to send powerful and personalized e-mails that convert. Additionally, with smart e-mail, the sales teams are notified when recipients open, click or otherwise engage with Smart Mail e-mails. Smart Mail also facilitates a better exchange from marketing teams to sales teams by organizing e-mail through tags, allowing sales team to quickly and efficiently locate the e-mails they need to send. Put simply, Smart Mail enables marketing teams to collaborate with sales teams on messaging and communications and allow sales teams to more efficiently and effectively communicate with their prospects in their funnel. We have also made updates and improvements to our e-mail designer including greatly improved drag-and-drop and inline functionality as well as added element blocks and layout styles in global styling. As these examples illustrate, we are constantly implementing new features to our platform both proactively and as a result of listening to the needs and requests of our customers. The designing of some of those enhancements, SharpSpring is recently recognized as a top marketing automation software for 2018 by TrustRadius, a prominent B2B software technology review platform. The TrustRadius Top Rated Awards are unique, because they are determined solely based on customer sentiments and measured by user satisfaction scores. Reviews were contributed mainly by users at marketing and advertising agencies and the small business sector. Among the most commonly cited reasons for choosing SharpSpring for our great value and the ability to introduce SharpSpring to market to as well as on behalf of an agency's clients. These positive reviews reflect our focus on enabling our customers to grow their businesses and improve their ROI. We give every business that use the SharpSpring a very powerful opportunity, the opportunity to communicate more effectively, drive more leads and sales to their business and focus on the highest-value initiatives all are the fraction of the cost of our competitors. Looking ahead, as we progress further in 2018, our pipeline is larger than ever -- than it's ever been and we are building momentum that will benefit us in both the short term and long term. Our product has never been more capable and in many ways exceeds the capabilities of some of our largest competitors and does so at a hugely disruptive price point. Similarly, our staff and management teams have never been more capable and combined with the new lease we've signed that increases our overall square footage and gives us necessary room to grow as we move forward. We're in a prime position to capitalize on that tremendous opportunity now in front of us. And with that, we're ready to open the call for your questions. Operator, please provide the appropriate instructions.

[Operator:]

[Operator Instructions] Our first question comes from Eric Martinuzzi with Lake Street Capital Markets. Please go ahead.

[Eric Martinuzzi:]

Thanks for taking my questions, congratulations on Q1, that's terrific start to the year and I got a lot of balls in the air but it's good to see them revenue number right of the gate just feel so strong which lead to first question, I'm actually revising the model as we speak given the outperformance in Q1, is it safe to assume that with that we'll verbal across the subsequent quarters, in other words, will get an increase in the SharpSpring, I guess the total revenue of anywhere from $200,000 to $300,000 sequentially?

[EdLawton:]

Eric, that's safe to assume that we would be stepping up from where we are in Q1 into the future quarters. Yes.

[Eric Martinuzzi:]

Okay. I did see where I was probably off the most in my model for Q1 was the operating -- the sales and marketing expense, obviously you guys were tweaking that throughout the quarter. And I know the goal here is customer acquisition. This is more of an operating expense-related question. Does that also -- are you going to be kind of keeping it about the same level here on the operating expense for Q2?

[Ed Lawton:]

We have ramped up some spending on the sales and marketing side primarily and also on the R&D side. So we've been hiring engineers and investing on the product side as well. We would anticipate those costs growing quarter-to-quarter and offsetting the revenue growth and so we'd be projecting a slight increase to EBITDA as a loss for Q2 and then some improvements in the second half of the year to EBITDA.

[Eric Martinuzzi:]

Okay. And then just on the personnel side, obviously you have a Chief Operating Officer now, Rich. This is something that -- a luxury that you may be -- this is something that -- always there are things that you deal with the business, but you highlighted too earlier as in particular and I was just wondering the kind of a resume review for Jeff's expertise in that area when it comes to improving the customer retention as well as increasing the install base footprint. Can you talk to those two items just with regard to his background?

[Rich Carlson:]

I sure can, Eric. So Jeff is -- he is a SaaS veteran. He has been working in the employee scheduling space for his last couple of companies and maybe doing just exactly what we're asking of him to do here. So he spent some time with the company called Time Management as an example and as a SaaS business, he's focusing on just exactly the same things. Now that we've got a sizable customer base, it is at least important to our revenues to control net revenue attrition and signed expansion opportunities and lower logo attrition as it is to acquire new customers. Obviously both are very, very important, but if there's a new company without customers, you need to focus on customer acquisition. Now we've got a nice user base to work with expansion, revenues on -- and Jeff's already making an impact. He also has quite a bit of sales background as well. He did a lot of that work at a company called When I Work, which is a company that he left to join SharpSpring. So it's also gratifying that we are now a company where there's -- we really had an opportunity to have some highly-skilled, really impressive candidates who want to work here at SharpSpring. And that's only a recent development as we've gotten scale, improved out our business model; the performance has been what it has been. So we are really happy to have Jeff on board and he is -- as we mentioned in our remarks, he is already making an impact. We've gone in and looked at our user base and identified pockets of different types of agencies with different challenges and different opportunities for expansion within the agency and we're now really at the beginning of that process, working with those guys to identify the right opportunities and build the programs around them.

[Eric Martinuzzi:]

Okay. One last one for me on the housekeeping side. You do have the $8 million convertible note now. Do you have an estimate for the interest expense for Q2?

[Ed Lawton:]

We do have 5% coupon, so it'll be a pretty straight calculation based on the $8 million and then it will compound annually as we get further into the future.

[Eric Martinuzzi:]

Okay. And that's -- is it correct, it's not a cash payment?

[Ed Lawton:]

That's correct. It's non cash. It'll be -- we're going to issue additional convertible notes for the interest payments.

[Operator:]

Our next question comes from Mike Malouf with Craig-Hallum. Please go ahead.

[Michael Malouf:]

Great, thanks for taking my question, and let me say congratulations as well, its nice quarter. I wanted to get, maybe a little bit of color on as you look at this increased marketing spend and certainly the more robust products that you have, how long do you think it will take to get to that $7,500 customer acquisition cost?

[Rich Carlson:]

Well I want to say that we are already there, and so maybe I could provide some clarity on our in-line comments. We've discussed this in past earnings calls as well. The calculation of CAC for SharpSpring was a little -- it's imperfect in the sense that the marketing spend that we spend in any given quarter does not generate the sales in the very next quarter, which is what the calculation implies. Instead, that marketing spend continues to pay dividends in multiple quarters moving forward. So it is -- any increase in marketing spend will temporarily drive up the CAC numbers that we report on an earnings call like this one. When we know on a cohort basis that the CAC that we are delivering -- the actual CAC that we are delivering on a fully-baked cohort looking backwards is significantly better. So we measure our business on a cohort basis and understand based on the number of leads we're generating, the number of demos and so forth. Essentially, what CAC will be -- on a cohort basis, we can get a good estimate of that shortly after a month closes and we are confident that the CAC that we've generated with this last quarter is actually already performing at that $7,500 or less range. Does that make sense?

[Michael Malouf:]

Yes, I mean, I guess, that's another way of saying that we should expect some pretty dramatic increases in the new customer count given that comment.

[Rich Carlson:]

Well, I think that we're going to continue to acquire customers at -- in -- with a CAC in range of the $6,500 to $7,500 CAC range and the pace at which we intend to add those customers is built on the marketing dollars that we spend. The point I was trying to make is that you spend the money in this quarter and the sales are going to come in -- some of them will come in, in the current quarter, some will come in the next, but just as likely, they're going to influence a quarter out and even some following into several quarters out. So there's kind of a lag where your customer acquisition cost look higher as reported by the previous marketing spend versus the net -- the current marketing -- sales -- current quarter sales. There's always kind of a lag as you're ramping up sales that last for a couple of quarters. But yes, we intend to put the dollars to good use. We don't expect to increase our CAC based on what we've been delivering and we think there's a lot of opportunity up in front of us, which is value for money.

[Michael Malouf:]

Okay. Great. And then we also saw a nice increase in the average quarterly revenue per customer and I imagine that was in part due to the price increase. Was there anything else that impacted that besides the price increase? And should we expect that to trend up over the next few quarters? Or is that sort of another level that we've reached because of the price increase?

[Rich Carlson:]

Let's say, the majority of it had to do with the price increase, but we're continually expanding our customers, I should say, are continually expanding their -- the number of licenses that they're using. And so there's a general upward trajectory of license -- of the relationship with each agency with us. But I'd say that we definitely got a bump this quarter due to the price increase and that's more of a kind of a new level that's carried forward versus an ever-increasing level. We haven't changed the slope of the line.

[Michael Malouf:]

Okay. And then just a final question for me. Can you talk a little bit about competitive environment out there? How it has changed over the last couple of years and where you guys think you fit relative to some of the other competitors that you run across all the time?

[Rich Carlson:]

Yes, it's I think remarkably stable. I think we, generally speaking, are competing with the same competitors that we've competed with since we launched the product four years ago. The Hootsuite -- excuse me, the HubSpot, Act-On and Pardot and those folks, there's been a couple of new entrants to the marketplace. ActiveCampaign is doing a really nice job as an example, but 90% of the time we're bumping into the people that we've always bumped into. And so we're not seeing a host of new entrants. It's just so many barriers to entering for a marketing automation platform with really, at this point, 10 or 12 products that are rolled into 1 and are integrated deeply and so we don't see a lot of new competitors coming into play. The one thing I would add that has changed, I think radically, was our ability to compete with those incumbents. We are having lunched Social now a really complete marketing automation platform for the first time in our history. And as we alluded to, I don't know if anybody caught this, but I said in some ways, we actually really outperformed our competitors and so SharpSpring has gone to great lengths to really truly integrate these different feature sets into a unified platform versus some of our competitors have made acquisitions and really put an independent application behind a single sign-on platform and unified billing, but otherwise independent application. So for the first time, we are not playing catch-up I think on major functionality and people are really responding to the platform. The other thing I would say is we're getting a little bit of -- we're still very small, but especially given our agency market, people know who SharpSpring is now and is evidenced by our TrustRadius award or our reviews on or any of the other review sites. And so more of the people that are coming to our demos and talking with our sales organization are aware of who SharpSpring is. And so those are the 2 things I would point to that have changed over time, but we're really competing with the same competitors. We just think we're more -- we're better armed to do so.

[Operator:]

Our next question comes from George Melas with MKH Management. Please go ahead.

[George Kyriazi:]

Hi, good afternoon, guys. Congrats on the top line. Ed, you talked about sort of -- I think you talked about $1 retention ratio being positive, which is fantastic. How does that rise helped by the price increase? And then you also talked about sort of the net revenue attrition you expect to be roughly 1% per quarter, which is a massive improvement over previous metrics that were 2.3%, 2.5%. Can you provide a little bit more color on that?

[Rich Carlson:]

Let me jump on that one, Ed, because I'm just so excited about this particular topic. And thank you George for asking that.

[George Kyriazi:]

Yes, I am totally excited about it too, that's why I bring it up.

[Rich Carlson:]

Yes, it's -- look, we have -- that's exactly right. So the price increases helped us a little bit this last quarter, but it was fun for an entire quarter to be -- to have our attrition -- net loss revenue attrition completely offset by our expansion revenue. We talk a lot about logo attrition. We report those numbers and because we're in the small business segment, we lose -- from a logo perspective; we lose high 2s percent, low 3% each month in terms of logo attrition. So call it -- just call it right around 3% logo attrition. We feel like there's headway that we can make there. We can certainly create barriers to sales and only take the top agencies that have the best opportunity to stick around and lower logo attrition, but that's really not our strategy. We want to bring on agencies that have a shot at working with us and expanding and we're willing to take some logo attrition on the front and in order to capture the relationships that are available to us. But what's been -- actually been happening is that we have been acquiring customers that stick around and expand and as the user base gets older and more established, our individual agencies go through a period of high attrition. But after 6 months or a year, they kind of decide that, hey, I want to stick around and then they start expanding and adding clients onto the platform. And so the simple math is that as time goes on, we have a larger and larger user base or agency base that has been with us for a longer period of time through that high attrition period and now they are in the lower attrition period and high expansion period. So we've cut -- we've seen -- mostly as a function of just that dynamic, we've seen our net revenue attrition drop from 2% -- north of 2% down to, we feel like, it's going to be hovering around 1% in terms of the net revenue attrition dollar -- dollar attrition. And eventually, we expect that we'll have quarters like the one we just had. We're not forecasting that for this year, but we feel like we'll eventually get to a spot where we will have net revenue expansion essentially. And so we are excited about that. Of course, we're also continually improving our processes, our on boarding process to minimize logo attrition. I spoke a little bit about brining Jeff on board and what he is focused on, he's the guy in our organization that's going to be turning his dials for us. And we feel like we are just getting started with that process. But that's right; we expect about 1% attrition on a net revenue basis for the rest of the year.

[George Kyriazi:]

That's a -- it's a massive improvement to the model.

[Rich Carlson:]

Ed, anything to add on that?

[Ed Lawton:]

I don't.

[Operator:]

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Carlson, for his closing remarks.

[Rich Carlson:]

I just as always want to thank, everybody. I appreciate you taking the time to join us for today's call. I especially want to thank our employees, our partners, our new investors and old investors. I appreciate you all. So thank you so much and we look forward to updating you on our next call. Operator?

[Operator:]

Before we conclude today's call, I would like to provide SharpSpring's safe harbor statement that includes important cautions regarding forward-looking statements made during this call. During today's call, there were forward-looking statements made regarding future events, including SharpSpring's future financial performance. These statements reflect the company's current views with respect to future events. These forward-looking statements involve known and unknown risks, uncertainties and other factors, including those discussed under the heading Risk Factors and elsewhere in the company's latest annual report on Form 10-K and quarterly reports on Form 10-Q, that may cause actual results, performance or achievements to be materially different from any future results, performances or achievements anticipated or implied by these forward-looking statements. The company does not undertake any responsibility to revise any forward-looking statements to reflect future events or circumstances. Also note that during this conference call, we may make reference to adjusted EBITDA, core net income or loss and core net income or loss per share, which are non-GAAP financial measures presented as supplemental measurements of the company's performance. A reconciliation of net income or loss to non-GAAP measures is included for your reference in the financial section of the earnings press release and made available on the company's website. Finally, I would like to remind everyone that a recording of today's call will be available for replay via a link available in the Investors section of the company's website. Thank you for joining us today for SharpSpring's First Quarter 2018 Earnings Conference Call. You may now disconnect.