SharpSpring, Inc.
Q1 2017 Earnings Call Transcript

Published: 12 May 2017

[Operator:]

Good afternoon. Welcome to SharpSpring's First Quarter 2017 Earnings Conference Call. Joining us for today's call is 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 will provide the necessary cautions regarding the forward-looking statements made by management during the call. I would like to remind everyone that this call will be recorded and made available for replay via link available in the Investor Relations section of the company's website at www.investors.sharpspring.com. Now I would like to turn the call over to SharpSpring CEO, Rick Carlson. Please go ahead, sir.

[Rick Carlson:]

Welcome everyone and thank you for joining us today. After the market closed, we issued a press release announcing our results for the first quarter ending March 31, 2017, a copy of which is available on the Investor Relations section of our web site. After a significant shift and refocus in the latter half of 2016, the first quarter of 2017 proved some encouraging results for SharpSpring. Our flagship marketing automation platform had its most successful sales month ever in March, and we saw our marketing pipeline strengthen throughout the quarter. As you may remember, during our last few earnings calls, a common theme is centered around our now unified focus on SharpSpring's growing marketing automation platform. This refined focus, included removing all unnecessary distractions, specifically, as it related to the consolidation of our business into one platform and the closure of some non-core offices. And as we have said in the past, we now have all of our resources focused on accelerating the growth of our marketing automation business. During the first quarter, we secured 211 new customers for our flagship marketing automation platform, bringing our total number of agency partners to 1,200. Additionally, the number of businesses on our platform increased to a record 5,650 businesses, which was up 56% from 3,600 businesses at the end of Q1 last year. By building a client base of nearly 6,000 companies, we have been able to increase our brand awareness, as well as expand our position within the marketing automation industry. But before I provide further commentary on our operations and initiatives for this quarter, as well as our outlook for the rest of 2017, I will turn the call to our CFO, Edward Lawton, who will walk us through the financials for the first quarter. Ed?

[Ed Lawton:]

Thank you, Rick. Turning to our financial results for the first quarter ended March 31, 2017. Revenue in the first quarter increased 8% to $3 million from $2.8 million in the same year ago period. The increase was due to continued growth of our flagship marketing automation solution, which increased 57% to $2.85 million in Q1. As expected, this growth was offset by the lower revenue from our legacy GraphicMail customer base offering, which we migrated to our SharpSpring Mail+ product in 2016. For Q1, the revenue from the ex-Graphic customer base, decreased to approximately $178,000 compared to $975,000 in Q1 of last year. As we discussed in our last call, this product did no longer a hindrance to SharpSpring's core market automation business and will generate a small amount of profit for the business, as the customer base declines slowly. Our quarterly gross profit increased 2% to $1.8 million or 58% of total revenue from $1.7 million or 62% of total revenue in Q1 of last year. The decrease in gross margin reflects the lower gross margin of our higher growth SharpSpring product, as we have continued our investment in our hosting infrastructure and support organization, to support the current and future growth of our core product. Although some of these investments are behind us, like any high growth SaaS company, we will continue to feel some margin pressure, as we build our customer base. Turning to our operating expenses; for the first quarter of 2017, our operating expenses increased 11% to $3.8 million from $3.4 million in Q1 of last year. The increase was primarily due to higher sales and marketing team and program costs, plus increases in our R&D and G&A expenses, to support the expansion of our business. Our GAAP net loss from continuing operations for the quarter totaled $1.5 million or $0.18 per share. This compares to a GAAP net loss from continuing operations of $1.2 million or $0.16 per share in Q1 of 2016. Turning to our non-GAAP measures; our adjusted EBITDA loss from continuing operations for the quarter, which we define as earnings before interest, taxes, depreciation, and amortization, non-cash stock based compensation and acquisition related charges, totaled $1.7 million. This compares to an adjusted EBITDA loss from continuing operations of $887,000 in the same year ago period. Our core net loss, which excludes amortization, acquisition related costs and stock based compensation costs, while adjusting for taxes for the first quarter of 2017 totaled $1.2 million or $0.15 core net loss per share, compared to core net loss of $657,000 or $0.09 core net loss per share in Q1 of last year. Although we have the ability to keep our operating expenses relatively consistent with current levels and improve the EBITDA throughout the year, based on some new lifetime value metrics that Rick will talk about momentarily, we will likely make increased investments in our sales and marketing throughout the year and slow our path to profitability. 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. Now, turning to our balance sheet; we had $7.7 million in cash at the end of the quarter, compared to $8.7 million at the end of the prior quarter. We continue to expect our cash on hand and available credit facility to remain an adequate source of funds for our operations, as we execute on our stated objectives. This completes my financial summary. I'd now like to turn the call over to Rick for additional insights into our operational progress in Q1, as well as our outlook for the rest of 2017. Rick?

[Rick Carlson:]

Thanks Ed. The first quarter was very much about transition for SharpSpring. It signaled the end of an old era, and more importantly, highlighted the beginning stages of our new future, one that is fully focused on marketing automation. In our last call, we shared with you that we had refocused our marketing after a tumultuous 2016 and we were encouraged that we had already seen a significant uptick in our ability to generate leads at the top of the funnel in January. I am pleased to report, that the early success we saw in January, to generate top of the funnel leads, continued throughout the quarter. Due to the length of our marketing and sales process and sales cycle, there is a delay between leads entering our database and the point in which those leads turn into sales. During this sales and marketing cycle, we are encouraging leads that may have entered our database, because they downloaded a piece of content to ask for a demo, schedule and attend that demo, evaluate our product versus the competition, and eventually make a purchase decision. The time it takes for a lead to go through all the stages of this process differs by marketing channel, but is in the neighborhood of 16 to 24 weeks on average, with many sales taking four to 12 months to close, after they initially came in as leads. Throughout SharpSpring's history, we have maintained a very high close rate on attended demos, which are directly related to the leads we are able to generate. So put simply, more leads eventually means more sales that come in over the coming year. As I mentioned in my opening remarks, during Q1, we secured 211 new customers for our flagship platform. While we have reported stronger quarters in the past, what is interesting about Q1, is that it was a very lop-sided, with the quarter beginning with two weaker sales months, as a result of a weak lead gen in 2016, and closing with March, representing the strongest sales month in our history. This was highly encouraging and a strong evidence that the pattern we have seen throughout our history, specifically that more leads result in more demos, and those demos eventually lead to more sales, is holding true across our true marketing channels. While this is highly encouraging, allow me to insert a word of caution here. As I have described the length of our sales cycle is variable in general, it is further variable by marketing channel, and the sales cycle is not fully realized for an entire year or longer. Further, there is a lot of work yet to be done on the build of our funnel techniques. By this, I mean, enhancing our ability to turn more top of the funnel leads into middle of the funnel attended demos. So March was in fact our best sales month and highly encouraging. It does not suggest, nor are we forecasting a meaningful increase in sales in Q2. Instead, we expect up and down months early on, and a gradual increase in sales throughout this year. What it does clearly show, is that our renewed focus on lead generation is in fact clearly beginning to pay off. In addition to the early signs of success we are seeing on the sales and marketing fronts, a renewed focus on our core SaaS marketing automation platform has led us to take a deeper dive into our long term customer behavior patterns and lifetime value. Along this line, at the end of last month, we reported on key SaaS metrics for the first quarter of 2017, namely customer acquisition costs or CAC and lifetime value or LTV. As some of you know, CAC calculates our total cost to acquire a new customer, while LTV, includes the estimated value of each customer -- that each customer will generate, after taking into account estimated cost to support those revenues, customer expansion revenue and customer churn. These calculations used a simplified method of calculating LTV, based on the average growth and attrition rates we are experiencing across all cohorts, new and old. The blended average LTV we cited is way down significantly by newer cohorts, that naturally experience higher churn, while simultaneously, not yet reaching a stage where they become high value agencies with multiple clients on the platform. With the benefit of these added datapoints based on our actual historical customer data, we have some very exciting news to share with you today. Our average estimated lifetime value for new agency customers could be as high as $60,000, which is considerably higher than the LTV released a few weeks ago, based on a simplified calculation method. Using the latest LTV Of $60,000 and our recently published customer acquisition costs of $6,000, our LTV to CAC ratio is obviously 10 to 1. Our 10 to 1 LTV to CAC ratio is well above the high quality benchmark rate of three to one as published by industry experts, and suggests that we should consider expanding our sales and marketing activities, to take advantage of the opportunity to land more of these high value customers. What these numbers reveal on a simpler level, is that SharpSpring is performing amongst the best SaaS businesses in the world, and we have continued acquiring customers at extremely attractive rates, retaining them over the long term, which ultimately generates long term value for our shareholders. Additionally, we initiated a price increase strategy during late Q1, that will raise rates on some of our base of customers that are paying less per license than our current pricing model. Our Q1 price increase impacted about 450 customers and did not have any significant impact on attrition. The impact of these pricing increase and other potential increases that we can employ during the future, will further increase estimated lifetime value figures. We have been very successful building our business, in ways that ensure long term success. While we are excited about improving on these metrics, even our current levels indicate our business fundamentals are exceptional and encourage us to continue investing in sales and marketing and product development, to produce future growth. Our feature set continues to deliver on the needs of the market, and we have only improved on those offerings since time has gone on, while also being able to this additional functionality at a fraction of the price of our competitors. During Q1, we announced an integration with Shutterstock to provide SharpSpring customers with seamless access to Shutterstock's full collection of over 125 million images. Additionally, SharpSpring partnered with Enthusem to provide customers with the ability to modify and personalize Enthusem Direct Mail and Offline marketing campaigns, with SharpSpring's powerful automation and workflow capabilities. This month, we will have launched or are launching a number of pivotal features, including our next generation in-line email editor, a visual workflow builder and enhanced traffic source reporting. These integrations and some upcoming new features will help to further improve our customer retention in the future, which is one of the variables that also will help our long term lifetime customer value. So in summary, Q1 was the first step in our plan for a long term success as a leaner, more capable and more unified company. SharpSpring has exceptional fundamentals at a fast growing multibillion dollar industry, and we are poised to take additional steps forward, as we build on our market share. We are continuing to make clear and marked improvements to our product, by releasing additional features and uniting with other leading technology companies, which we believe will help secure new customers and increase demand for our platform. The result of all these efforts, is that we are now seeing positive momentum build for our product, which we expect to build on through 2017 and beyond. And with that, we are ready to open the call for questions. Operator, please provide the appropriate instructions.

[Operator:]

[Operator Instructions]. Our first question comes from Louie Toma with Craig-Hallum. Please proceed with your question.

[Louie Toma:]

Hi guys. Thanks for taking my call. Just had a couple of questions; I guess first of all, you said that you ended Q1 with the strongest month ever, so March was the strongest month you have had in terms of new customer adds. And I am just wondering, because for the quarter, you were at 211; that implies that January and February were pretty weak, but I am more curious about how April looks? And does this mean that you should get back -- do you expect to get back to the 250 new customers range in the coming quarters or what is your thoughts or updates on that?

[Rick Carlson:]

Yeah, sure. Thanks Louie. Always great to talk to you. In fact January and February were our weak months, and weak months that we forecasted for the last two earnings calls. So we talked about January being the uptick in lead flow, as we refocused and March is really, I think pretty strong evidence that we will -- that we are on the right path here, and that the things that we talked about implementing from a marketing perspective are in fact paying off. At the same time, as we just discussed, the sales from the leads that come in, really kind of come in three, four months later and really take out -- they continue to come in over the course of the next year, with even stragglers going beyond that. So while we are -- I can answer your question directly and say yes, we absolutely feel like we will be getting up to those levels and hopefully beyond those levels in future quarters. In this next quarter, we feel as though we are kind of -- we are going to have some -- it will be a little bit of a mixed bag up and down and should have a performance fairly in line with or slight -- maybe slightly improved upon what we did in Q1. Is that clear? Does that answer your question?

[Louie Toma:]

Yeah, that makes sense. So have you seen a deceleration in new customer adds since the end of March, as we are month and a half into the next quarter almost?

[Rick Carlson:]

Yeah. I think that every month is kind of a different month, just because of the way our channels worked. And so, I wouldn't want to comment on April sales for fear that might make you too optimistic or too pessimistic. It's too much variability within a single month with our business model, and as it currently stands. So again, on a quarterly basis, I think we have probably given some pretty good guidance here today, in terms of what we are expecting for Q2, as well as feeling confident that we will be able to get back to the levels where we were, and hopefully move beyond those levels, as the year progresses and beyond.

[Louie Toma:]

Makes sense. Okay, thank you. And of the 211 customers, can you give us a breakdown of how many were domestic, how many were international?

[Rick Carlson:]

Off the top of my head, I'd say -- let me think about that. I would guess, roughly 15% of those customers were international. We are focused now on North America and yeah that's probably a little bit higher than that. Maybe 20% were international, but we are focused on North America and we are expecting to have an ever increasing percentage of our new sales coming from North America.

[Louie Toma:]

Got it. Thank you. And Ed, just quickly, you mentioned how much cash you have. Can you give us an update on how much cash you will spend, before you get to breakeven? And give us an update on your expectations on when you expect to get to breakeven? Thank you. And that's all I have. Thanks guys.

[Ed Lawton:]

Yeah sure. Hey Louie. The cash that we had at the end of the quarter was $7.7 million, and we expect to use some of that through EBITDA and you know, as Rick talked about, invest a little bit heavier in sales and marketing and slow the path to profitability throughout the rest of the year that we had originally planned. And so at this point, we are not pointing a time that will reach breakeven. I think it will depend on the future usage of cash and how effective the marketing programs are, that we are going to be exploring over the next upcoming few months.

[Rick Carlson:]

Ed, just to add to that answer, just in case another question doesn't afford me the opportunity to address this, I haven't done the math on this, but I am fairly certain we could strip down the business right down and be profitable today. We have got a really healthy SaaS business here, and so what we are excited about, is this opportunity to land customers that we feel like are worth $60,000 or more moving forward for a very-very reasonable customer costs. And so what we are going to do, is take a look at, what we feel like we can -- how many of these we feel like we can add, without dipping too much into our cash reserves and putting ourselves in a situation where we necessarily need to raise money. But trying to be aggressive to take advantage of these opportunities. So I do want to make it very clear, that we are in a position where we could be profitable today, and that's simply a matter of how much of this opportunity did we want to take advantage of, in terms of landing these higher value clients over the long term.

[Louie Toma:]

Got it. Thank you guys. I appreciate it.

[Rick Carlson:]

Thanks.

[Operator:]

Thank you. Our next question comes from Eric Martinuzzi with Lake Street Capital. Please proceed with your question.

[Eric Martinuzzi:]

Thanks. Just curious, was it -- you had finally gotten the chance to take a breather and digest some of the data that you had been gathering what was there or something, kind of a board mandate to dive in and do the analytics on the LTV and the CAC that has made May 11, 2016 the moment when you decide to press the accelerator on the sales and marketing?

[Rick Carlson:]

Neither answer -- neither of those choices. We have kind of an interesting business model that's a little bit different than most other -- well, I think in just about any other marketing automation platform that's out there. And that is that, when we talk about adding agencies, we are really adding resellers. And so if I can compare that to HubSpot or Marketo or any of the other players out there, when they add a client to the platform. Generally speaking, their expansion revenues, they are going to expand with the size of their customer at a certain rate, and they may be able to take on an added service here, there, and maybe that customer turns from $2,000 a month to $2,500 or $3,000 a month over time. In our case, the dynamics are really wildly different. We are acquiring -- we don't think of them as resellers, but ultimately, they bring their clients on to the platform, and that takes time, and historically, we have offered a five pack of licenses, and so, our early cohorts were only just beginning to add licenses, so the people -- we have only been doing this for about three years, and it's our early cohorts, maybe the first six of them, the first six months that we were doing this. These guys were highly encouraged at the growth rates that we are seeing from these guys now, as it takes them a little bit of time, to get up to speed, to learn the platform, to learn how to sell it, to bring it to their customers and to work through that initial five pack. For those reasons, we really just didn't feel we were -- this has always been a part of our business model, and something that we understood. But seeing is believing, and we are only just getting the data that gives us the courage to say, hey, this is real, these are excellent lifetime values, in line with what we had hoped, when we started this business, and we are seeing that with enough cohorts, now that where we can really say with confidence, that this is in fact the pattern that we are seeing. And we are seeing the later cohorts, the ones that joined us last year, following very-very similar patterns. The last thing I will add to that, is that we made a decision last year in the summer to -- for only a three pack of licenses, and so we are seeing the businesses that have signed up under that program, from call it July of last year forward, reach expansion revenue in a much -- in a quicker fashion of all six to nine months earlier. They are also paying more per license. So I wouldn't attribute our kind of arriving at these conclusions to either of the reasons you described, but rather, wanting to be cautious and wanting to make sure that these cohorts are behaving in the way that we expected them to and there is a little bit of backloading that's going on, as we -- that's what I am trying to describe, where it takes a while for these guys to move through a higher attrition phase at the beginning, and then the remaining ones to really hit the accelerator, in terms of their expansion revenue with us.

[Eric Martinuzzi:]

Certainly. No, that is -- I could do the math on a 10-to-1 lifetime value versus the customer acquisition cost. So more of that is a good thing, and I certainly agree with the decision to pursue it. But I do want to be able to kind of financially model it. You talked about, given an outlook here for Q2, the way I understand that, is that you expect to be roughly flat on a revenue for the June quarter versus the first quarter. Is that similar revenue mix here? We had about $2.8 million of SharpSpring in Q1, and about $200,000 of the Mail+ leftovers. I would assume, Mail+ attributable -- trite [ph] a little bit in SharpSpring increases a little bit sequentially. Is that a fair assumption?

[Rick Carlson:]

Yes it is. Yes. We expect layering on -- go ahead Ed.

[Ed Lawton:]

Yeah, I was just going to comment that, I think the notes about being flat into next quarter or roughly flat that Rick was referring to, was on the sales side and not on the revenue side. So talking about new customer wins, we are not predicting a steep increase quarter-over-quarter into Q2. But revenue should pick up, as our new customers are added in, offset that by some attrition to our earlier customers, and some expansion from the base of customers that we have.

[Eric Martinuzzi:]

Okay. I think I thought I had it, now I am not sure I do. Just total revenue, you do expect to be flat sequentially, or you do expect to be up sequentially?

[Ed Lawton:]

We expect to take a step forward sequentially. So up sequentially on revenue, on the new wins, on the logos that we are bringing in the door, we expect that number to be sequentially in line to up a little bit from the Q1 number.

[Eric Martinuzzi:]

Yes. Makes sense. Okay, and then just kind of -- I followed larger SaaS companies and there is an expression I have heard, called kind of a rule of 40, where the growth in bookings plus an EBITDA or an adjusted operating margin equals 40. Do you guys have any kind of rule of thumb that you are shooting for here over a two or three year horizon?

[Rick Carlson:]

Sounds like you're talking about the quick ratio, is that -- if we are on the same page there?

[Eric Martinuzzi:]

No. Quick ratio would be more of an accounting term. Maybe there is a lexicon that I am not familiar with on the SaaS side other than this one that I have heard. It's balancing -- hey, we are not going to drive it into the ground on the profitability side, just to do the sales grab. It's kind of a responsible growth, but it's a growing market, wonderful return on LTV versus CAC, so let's go after it. But still having a little bit of margin over the longer term?

[Rick Carlson:]

I don't know if I can point to some magic number or that would summarize my thoughts. But I think I could give you a better idea of our thoughts. We are very excited about how these agency partners are behaving across more than 30 cohorts now, we are really seeing some exciting stuff that means that these guys are doing what we had always hoped that they would do, when we started this business. And that is leading us to CAC to LTV ratio, currently of 10. So the math for us is that, we can certainly -- and we are not growing it -- on top of that, I will acknowledge that we are not growing new sales at rates that we were, not long ago, and then the combination of those two things as well is having roughly $8 million in the bank, affords us the opportunity to really go out there and see if we can acquire more of these customers moving forward. Now counterbalancing that are the needs to -- you go out there and you are too aggressive with it, we may have to raise money and so forth, and that's not something that we are excited about doing, and not something where we are considering to be clear at this time. So it's really a matter of what we think we can go out there and do, while keeping our CAC ratios very-very healthy in a 7-to-1, 5-to-1 and how many sales we can layer on there, looking at the opportunities in front of us from a marketing side, of which we think there are many to land a lot more agencies. But we don't talk about the product as much on these calls, but the product has never been more competitive and in better shape than we are doing, we are launching some things this month, including a visual workflow builder that should position us in the future, and we are starting to get some brand awareness and things. So really looking to capitalize on land and customers that are worth $60,000 plus for $6,000, to $10,000 or $12,000, we will do that all day long, if we feel like those opportunities are in front of us. We are never going to be in a situation where we are buying customers that aren't profitable. So we think there is plenty room on the CAC to LTV ratio to be more aggressive, and grow at a faster rate, and we are looking forward to doing that, but we are not going to be foolish about it.

[Eric Martinuzzi:]

Speaking of aggressive, the price -- I am just curious to know. You have got 1,200 customers/agencies, the increased pricing on 450. So that's about 38%. Why not implement it across the board?

[Rick Carlson:]

Well customers are current -- this is an interesting datapoint for folks. The average time a customer has been with us, has been just a year. This goes back by the way, perhaps another datapoint for your first question, because we have only been doing this for three years, the average time an agency partner has been with us, has been just a year. So people who have signed up on specific terms, I am not interested in raising rates on somebody three months after they sign up with us, it's not the business we are in. We also really view these partners as just that partners, and they build their business around us. Some of our agency partners have 60, 80 clients on the platform and more, and so when we raise rates, it affects them. So we want to do it with the agencies that are creating value.

[Eric Martinuzzi:]

They would be like -- kind of a year one cohort from the early days of SharpSpring?

[Rick Carlson:]

Sorry, I don't understand the question.

[Eric Martinuzzi:]

This really is cohort, kind of class of 2014 where you have got the price actions taken --

[Rick Carlson:]

No. I'd rather not discuss actually how we increase the prices, but what I would tell you is that we raise the prices on the agency partners that we are seeing the most value in the platform, and we did that strategically, keeping a -- because we wanted to and we were successful in fact in pulling this off in a way that didn't seem to have a measurable attrition, which is obviously something we'd want to pay attention.

[Eric Martinuzzi:]

Yeah. Because I mean, you are spending the R&D dollars to make the platform there much more robust. So it's providing some value.

[Rick Carlson:]

Yeah. And I think we will continue to take a look at that, reevaluate the customers that are getting the most value out of the platform and continue kind of a progressive rollout that's fair to people, who have, again built their business around our platform and looked to stick with us for years to come.

[Eric Martinuzzi:]

Okay. And then last question, you are obviously investing more in sales and marketing, but as you are adding these customers, other parts of your business could potentially be impacted, as far as the headcount, typically in a business like yours, the biggest expense is going to be headcount related. Are there customer support issues, or maybe datacenter issues that we also need to take into consideration?

[Rick Carlson:]

Well, I think we -- it's a fairly -- the way the business is working now, it's not too much of a stair-step function. As we add clients, we don't see heavy investments in IT infrastructure and so forth. We are very cloud based, and we think it's very incremental, the way the business is structured right now. So there will obviously be continued investment to support customers and so forth. But I can't point to very large expenses that are chunky in any way, as a result of our growth at this point. Ed, maybe you have got a thought on a different way to answer that question?

[Ed Lawton:]

No, I completely agree. We do have a base level of infrastructure that we have been working hard on over the last couple of years, to get it to where it is now, which is very leverageable into the future. And so incrementally, as we add new customers, yes there are gearing ratios that we will use for support, resources to be able to field calls and answer questions. But there is no heavy technology costs or incremental resource costs for that matter, that would really drive things up.

[Eric Martinuzzi:]

Okay. Got it. Thanks for taking my questions.

[Ed Lawton:]

Thanks Eric.

[Rick Carlson:]

Thanks Eric.

[Operator:]

[Operator Instructions]. And there are no questions in queue at this time. I would like to turn the call back over to Mr. Carlson for his closing remarks.

[Rick Carlson:]

Well, thank you everyone for joining us on the call today. As always, I want to especially thank our employees, our partners and investors most of all, thank you for the continued support. We look forward to updating you on the 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 responsibilities to revise any forward-looking statements to reflect future events or circumstances. Also note that during this conference call, we made 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 measures of 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 web site. 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 web site. Thank you for joining us for SharpSpring's first quarter 2017 earnings conference call. You may disconnect at this time.