SharpSpring, Inc.
Q3 2016 Earnings Call Transcript

Published: 9 Nov 2016

[Operator:]

Good afternoon and welcome to SharpSpring’s Third Quarter 2016 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 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 will be recorded and made available for replay via a link available in the Investor Relations section of the company’s website at www.investors.sharpspring.com. Now I will turn the call over to SharpSpring’s CEO, Rick Carlson. Thank you Mr. Carlson, please proceed.

[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 third quarter ended September 30, 2016, a copy of which is available in the Investor Relations section of our website. As you can see from our earnings release, Q3 marked another solid quarter for SharpSpring. We experienced double digit growth in our top line driven largely by a 101% increase in revenue from our flagship marketing automation platform, which grew to a record $2.5 million. The growth we’ve been able to achieve over the last several quarters is because of our ability to consistently add new digital marketing agencies and businesses onto our robust marketing automation platform. This is demonstrated again during Q3 by the 30% increase in the number of new customers added of 244 bringing the total number of customers on our flagship platform to over 1,300. At the end of the quarter we had 1,050 agency partners and over 4,750 businesses using SharpSpring. These results were achieved despite considerable distraction in the proceedings with the divestiture of the SMTP business unit and a significant product migration. We believe this speaks not only to the capability of our sales team, but also to the strong demand for our cost attrition and easy to use marketing automation platform. Now before I comment further on our operational progress and provide our outlook for the balance of this year and next, I’d like to turn the call over to our CFO, Ed Lawton, who will walk us through the financials for Q3. Afterwards I’ll return to provide more insight into our operational progress, key initiatives and outlook for the year. Ed?

[Ed Lawton:]

Thank you, Rick. Turning to our financial results for the third quarter ended September 30, 2016. Excluding the SMTP business that we sold last quarter our revenue increased 26% to $3 million from $2.4 million in the same year ago period. The improvement was driven by the continued strong revenue growth from our flagship SharpSpring marketing automation platform which generated a record $2.5 million or 83% of our total revenue during the quarter. This was up 101% from $1.25 million in Q3 of last year. As expected, the growth in revenue from our SharpSpring marketing automation platform was offset by lower revenue from our traditional email marketing offerings. For Q3 SharpSpring Mail+ revenue totaled approximately $500,000. The decrease in SharpSpring Mail+ revenue was primarily due to expected high attrition levels experienced from the planned migration of GraphicMail customers onto our SharpSpring platform which we successfully completed in Q2. Additionally this customer base was in decline prior to the migration effort as we decided to terminate some of GraphicMail’s lower quality centers and eliminate the white label relationships that GraphicMail serviced due to changes in our business plans. Foreign currency rates have also impacted our revenues year-over-year in recent periods with the decline of $37,000 experienced in Q3. Our gross profit increased 6% to $1.7 million or 58% of total revenue from $1.6 million or 69% of total revenue in Q3 of last year. While our gross profit was up, the decrease in gross margin reflects a lower gross margin for our higher growth SharpSpring product which has become a much larger percent of our overall business as we invested in resources to support the current and future growth of our core product. Additionally we added infrastructure costs during the first half of this year related to the GraphicMail migration. Turning to our operating expenses, for the third quarter of 2016 our operating expenses decreased 5% to $3.6 million from $3.8 million in Q3 of last year. The decrease was due to the earn out liability adjustment recorded last year as well as lower severance cost and reseller fees offset by higher margin program costs, recruiting fees, office costs and general business growth. Our GAAP net loss from continuing operations was $1.2 million or $0.15 per share. This is an improvement from a GAAP net loss from continuing operations of $1.6 million or $0.24 per share in Q3 of 2015. Turning to our non-GAAP measures, our adjusted EBITDA loss which we define as earnings before interest, taxes, depreciation, amortization, non-cash stock based compensation, acquisition related charges and restructuring expenses for the third quarter of 2016 totaled $1 million. This compared to an adjusted EBITDA loss of $813,000 in the same year ago period. During Q3 our adjusted EBITDA was negatively impacted by a few items such as the recruiting fees we incurred for our CMO and one-time cost related to the closing of our office in South Africa and the move into our new corporate headquarters in Gainesville, Florida. Our core net loss which excludes amortization, acquisition related costs, stock compensation expenses and restructuring expenses while adjusting for taxes for the third quarter of 2016 totaled $693,000 or $0.08 core net loss per share. This was down slightly from a core net loss of $662,000 or $0.10 core net loss per share in Q3 of last year. Turning to our expectations for Q4, we currently project revenues of $3.3 million with 100% of the growth over Q3 coming from our SharpSpring product. On the profit side we continue to invest in our SharpSpring platform in order to grow and expand our customer base. With these additional investments and our SAS revenue model we projected an adjusted EBITDA loss of around $1 million for Q4. However, looking forward to next year we will take incremental steps to our profitability with a goal of nearing or achieving breakeven adjusted EBITDA in Q4 of 2017 depending on future growth opportunities that we have at that time. For more detail on our adjusted EBITDA and core net income metrics please see the reconciliation to GAAP terms included in the supplementary tables of our earnings release. Turning to our balance sheet, we’re $11.6 million in unrestricted cash and cash equivalents at the end of the quarter down from $15.3 million at the end of the prior quarter reflecting a $2.6 million tax payment during Q3 related to the sale of the SMTP business and higher capital expenditures related to our new headquarters office. We continue to expect our cash on hand to be adequate to fund our operations as we move closer to EBITDA profitability. 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 Q3 as well as our outlook for Q4 and 2017. Rick?

[Rick Carlson:]

Thanks Ed. Our key driver of our future growth and financial performance is our increased focus and alignment on our core marketing automation platform. Q3 marks the continuation of that effort following the divestiture of our SMTP relay business unit and the migration of our GraphicMail customer base. These transformative steps not only help to streamline our operation but also added considerable cash to our balance sheet which we will use to grow our flagship product revenues. We’ve kept our core team intact through these steps and have redeployed all of our resources company wise onto our higher growth marketing automation platform to more rapidly capitalize on our opportunities available to us in this multibillion dollar market. During our last earning call we spoke about the very positive long term impacts of these moods but also signaled that Q3 and possibly Q4 would be weaker as our team works through the considerable steps needed to essentially consolidate three companies into one. The sale of SMTP and migration of the GraphicMail user base was no small undertaking for a company of our size and nearly every department in our company to stray. Nevertheless we were able to exceed our expectations for Q3 by securing 244 new SharpSpring customers, a 30% increase over the last year. These additions brought our total customer count to 1,307 at quarter end and propelled us above the 1,000 digital marketing agency customer mark during the quarter. Let me repeat that in a little more than 2.5 years since we launched our platform more than a 1,000 digital marketing agencies have joined SharpSpring. According to our research we’ve now surpassed Marketo, Pardot, ActOn, and all other competitors with the exception of HubSpot spot in this critical market sector and based on our calculation we’ve added agencies that are paced roughly on par with HubSpot this year. Mostly through this large agency network more than 4,750 companies have now adopted SharpSpring for their marketing automation need. Again, all of this has taken place in the little over 2.5 years. While we were able to exceed our expectations for Q3 the fundamentals of our earlier guidance of a weaker Q3 and Q4 have not changed, strain on our business during our efforts to consolidate our business lead to less focus on regeneration and therefore less leads flowing into our pipeline during the late spring and early summer. Having mostly completed these activities and refocused our resources our lead flow has already returned to the growth trajectories we saw prior to our consolidation efforts. With our unexpected over achievement in Q3, we now expect our consolidation efforts to affect Q4 in the form of new customer wins that is we expect new customer wins in Q4 to be consistent with or possibly slightly lower than the levels that we secured in Q3. With consolidation fully realized and our renewed and lead on regeneration effort already paying off we expect another year of strong year-over-year growth in 2017. Turning to some of our exciting product developments we recently collaborated with PieSync, a B2B service that allows users to perform two way contact thinking in real time between their favorite cloud app. We integrated PieSync into our marketing automation platform enabling our customers to extend the power of their marketing technology stats. Using PieSync’s point-and-click interface, SharpSpring customers can build connections with dozens of other cloud-based platforms including Google Contacts, Zendesk, SugarCRM and others without the need for a developer. The automatic contact syncing eliminates the need for manual imports and exports, which helps reduce duplicate contacts and errors. We built SharpSpring to be open and flexible to accommodate the trend towards multiple cloud based app. The integration with PieSync is another example of the ways customers can connect SharpSpring with other applications they have in place, allowing them to focus on strategic initiatives instead of worrying about database management. This customer focused approach is one of the reasons that we’ve been so successful supplanting the incumbent solutions provided by our competitors. Additionally we launched dynamic content functionality during the quarter which allows users to build web pages and emails that adapt to visitors using the data found in their visitor profile. This new functionality can enable marketers to dynamically change the look and feel of an email or web page in real time based on the characteristic of the audience without the need for a developer to be involved. Our success is only possible due to the talent of our team along that line during September we added to our leadership team with the appointment of Andrew Dod as our new Chief Marketing Officer. Andrew brings a wealth of marketing experience to our company more than two decades of experience and strategy, communications and public relation. Our operations are now streamlined and focused on the fast growing marketing automation industry and bringing a seasoned executive with experience working with agencies spearhead of marketing division will enable us to further leverage our sustainable competitive advantages versus our competition and penetrates further in this space. Andrew’s appointment will help us continue securing new customer wins by creating more advocates for our differentiated and scalable platform within the marketing automation space. We look forward to benefiting from the strategic insight and marketing powers to help fill the company moving forward. In summary, the third quarter was strong across the board both in terms of our financial and operational progress. In addition to generating solid revenue and expanding our customer base we made tremendous progress on our plan to elevate our company’s position and market share and rapidly grow it and largely enter marketing automation space. Looking ahead the fundamentals of our business continue to remain solid as we grow. We’re are confident in our ability to further leverage our recently strengthened balance sheet, our 1,000 agency strong distribution network and agency focused business model and industry leading platform to achieve both our near and long term financial goals. Although there is still lot of work to be done, we believe we can become the leading marketing automation provider agency and we’ve laid the foundation in place to propel our growth in a way that’s both meaningful and sustainable. And with that we’re ready to open the call for your questions. Operator, please provide the appropriate instructions.

[Operator:]

[Operator Instruction] Our first question comes from the line of Eric Martinuzzi with Lake Street Capital Markets, please go ahead.

[Eric Martinuzzi:]

Congratulations on the strong quarter there in Q3 despite all these distraction. Just to know obviously the good growth at SharpSpring continues into Q4 based on the outlook it looks another 95%, 100% growth there, just on the SharpSpring Mail both side, given the flat revenue between Q2 and Q3 and the implied outlook for Q4 we’re still talking about a double digit decline there, when do you expect that business to trough or maybe potentially grow sequentially?

[Rick Carlson:]

Well, we think about the Mail+ business as a secondary business and certainly not our primary focus. The entire company is focused on our marketing automation platform, we’ve extended the ability for our agency partners to add Mail+ customers to their instances of SharpSpring and we’re excited about that because what that means is that an agency partner of ours can add a customer to SharpSpring Mail+ instead of choosing a tool like Mail or constant contact when their customers are not yet ready for full marketing automation. We’re just seeing the beginnings of that adoption from our agency network and I think it’s a little bit too early to kind of model that out. On the foot side we’re really not working towards becoming the next Mail as an example, we’re not focused on entering the email market spending our dollars there because we think the opportunity in the marketing automation space as well as our positioning is a much better opportunity for us. So, we think we’re through the major attrition that we had predicted ahead of task with the migration of GraphicMail customers onto the Mail+ platform, so we think we’re largely through that but little bit difficult to kind of model out exactly where the trough might be. But hopefully those will be points help you understand how we’re thinking about Mail+.

[Eric Martinuzzi:]

Okay that’s helpful. On the adjusted EBITDA I think primarily you’re picking up, you got about a 10% growth expectation here for Q4 and the top line and yet we’re talking the flat adjusted EBITDA loss where is the investment happening in the business?

[Rick Carlson:]

We’re really investing in sales and marketing and it’s development in R&D that’s effectively, we feel like there is a very large opportunity in front of us, we feel likely we’ve got lots of opportunity to compete with the larger players that are in the space and most of the dollars are spent on sales and marketing. On the development side we’ve got some really innovative things that we recently launched and some ideas with product improvement moving forward to keep on pace with the competition as well as maybe some pretty unique things that we’re bringing to the table as well. So it should continue to really a lot more of the thing continue to investment in sales and marketing and in development to support the platform itself. The thing that I can say that the difference then really last year, the year before is that all of our resources are focused on marketing automation now, so we’re not dividing these things amongst three companies now and that feels pretty good.

[Eric Martinuzzi:]

And last question kind of gross margin oriented, did it take a step down here, you talked about some of the investments in the platform that you’ve made what’s the expectation for gross margin in Q4, could we potentially see some of those investments leveraged in Q4 or is it best to use similar gross margin assumptions in Q4 that we saw in Q3?

[Ed Lawton:]

I think we would be able to improve that by a couple of points Eric, so if we’re at about 58% gross profit now I think we might see something around 60% to 61% over the next couple of quarters and then take some incremental steps after that. But we’re investing in our support team, in our hosting infrastructure spill and keep that percent in the low 60s for the next couple of quarters.

[Eric Martinuzzi:]

Okay. Thanks for taking my questions and congrats again on the strong quarter.

[Rick Carlson:]

Thanks Eric, I appreciate it.

[Operator:]

And our next question comes from the line of Louie Toma with Craig-Hallum, please go ahead.

[Louie Toma:]

Hi guys, congratulations on a nice quarter and continued progress. I just had a couple of questions, I was wondering if you could help me understand the different dynamic between the US customers and internationals. It seems like the international customers have been growing much faster than the US and if you could just talk a little about what's driving that and what your expectations are going forward. Thanks.

[Rick Carlson:]

Well, sure, I don’t know that that will continue in the future, I should say. As well as we will be focussing our sales and marketing efforts on North America. We did in early last year, localized the product into nine different languages and it turns out that there is a lot of people looking for an affordable powerful marketing automation solution in Europe as well. And frankly, with the traction that we've been able to gain through some of the connections that we picked up through the GraphicMail acquisition, we've been able to penetrate some of the European countries pretty well. We've got a pretty good footprint in the UK and other parts of Europe as well, surprisingly a little bit in South Africa with that being GraphicMail's home territory if you will. So, that has, that's been a welcome surprise to us again with the product being localized in the nine different languages. We are well positioned to take on those customers. But we will be spending our marketing resources and our sales will be focussed on North America largely. So, I would expect that we would see a greater percentage coming from US companies, although again we do seem to be picking up seen in some other territories as well.

[Louie Toma:]

And just two more questions. Can you talk about what was driving this year, increased this quarter? It looks like a little bit of a bump from Q2. And the second question is I don’t know if you've mentioned what your turn rate was for the quarter, could you just give us that please?

[Rick Carlson:]

Well, the second one's a little bit easier question to answer than the first one. I always find it difficult to try to predict with the market will do.

[Louie Toma:]

I was talking about the share count, not the share price.

[Rick Carlson:]

Oh, I'm sorry, I misunderstood the question. Well, then I'm going to let Ed answer the first one. But in any case the second question is chiefly 3% is what we'd averaged and so we've been really steadily pressing that attrition rate down. We expect to continue to do so gradually years, our systems and supports and everything really across the company matures. So, we've been making steady progress on that. Last quarter it was around 2.3% on a monthly attrition rate. Ed, you want to take the first part?

[Ed Lawton:]

Yes, sure. So, the increase in the share count will be was really the weighted average effect of some of the issuances that we did in the middle of Q2. So, we issued the biggest one was the SharpSpring earn-out shares that we issued in the middle of the quarter in Q2. And then that came into the Q3 calculation as 100% weighting. So, that was the biggest increase quarter-over-quarter.

[Louie Toma:]

And then going forward to the share count, the much more in line with what they currently are?

[Ed Lawton:]

Yes. Now, that were done with those issuances. We are not expecting any major increases in share count and might pick up a little bit quarter-over-quarter with some option exercises and miscellaneous things like that but nothing major.

[Louie Toma:]

Right. Thanks, guys.

[Ed Lawton:]

Thanks, Louie.

[Rick Carlson:]

Thanks Louie, we appreciate it.

[Operator:]

[Operator Instructions] Now our next question comes from the line of Scott Billeadeau with Walrus Partners. Please go ahead.

[Scott Billeadeau:]

Hi, guys. I'm wondering if you could lay out just obviously you're investing in the business which probably means sales, support and hosting. I'm wondering if you could give us a feel how many sales guys you have, where is the end game or what's the thought process there. And then how to support, to support follow of do you have some matrix that you'll kind of invest in the supporting. And it's hosting more of a chunky thing where to you got to add some and then you use it up and then you add some. Just maybe give us some feel for those buckets?

[Rick Carlson:]

I'll, sure I'll take that Ed. The let me start with the last part first. Know our hosting and that work is anything but chunky. Actually we're we use largely we use Google's infrastructure and it's very much a scalable infrastructure that allows us to move things up in a smooth fashion as we add customers. So, actually moved to Googles and thing we had to talk too much about over the last year. But we've been doing some of that work in the background, then are very happy with that progress because it provides some reliability of scalability that we needed earlier the year. With regard to sales, the way our organisation is set up, our sales team is really works on new opportunities each and every month and so the size of the sales team we currently have I think nine commission sales people that sales team turns over the accounts to our account management support teams and our on-boarding teams that really is our support organization that grows over time as our customer base grows not our sales organization. So they have some highly trained, highly compensated sales people, but those people are always working on closing the next few deals. So that team does not grow linearly with our customer base, but the support team does. The support team we got a real solid process in place. We have organized our support department into seven different groups that specialize in different parts of the application and we grow those teams to make sure that we can meet our SLAs that we provide to our customers. Typically we add, it depends on the department, but we add support people for call it every 40 customers, 40 accounts that we have. I should say not customers, 40 companies using the platform. As you know we have companies that use the product through agency partners, so I am talking about those companies when I talking about support people.

[Unidentified analyst:]

And then, another question on the sales team so obviously they are going out trying to get the next agency customer, but then to a certain extent if the agency customer, the agency driving more penetration for you, what is that mix or how do you get them to sell this for you or obviously make their business sticky that's one of the reason they like to do, but may be just refresh me a little bit on that?

[Rick Carlson:]

Sure, yes, excellent question. We almost never see an agency join us without at least one customer in mind, in fact, it’s probably single largest objection, people don't object to we generally don't lose deals to competitors. They certainly don't object to better pricing or feature set is pretty solid. So typically when somebody doesn't sign up with it then I need a customer first. And so, they come on with their first customer and they come on really wanting to build their business around marketing automation to encourage sales enablement and sell through our marketing department works with our agency partners to supply them with rebrand of materials, pricing guides, how to guide materials, case studies, also estimate materials that they can use to bring on their customers, but they come in with the mindset although we don't treat an agency partners or reseller, they come in with a mindset generally speaking that they are going to build their business around marketing automation because they are excited about the stickiness that marketing automation provides with their relationships with their customers as well as the opportunity for them to build monthly recurring revenue and additional services with those same clients. So I hope that gives you an idea how it all kind of works.

[Unidentified analyst:]

All right, thanks guys, I appreciate it.

[Rick Carlson:]

Thank you so much, I appreciate it.

[Operator:]

Our next question comes from the line of George melas with MKH Management, please go ahead.

[George Melas:]

Hi, good afternoon guys. Could you remind me ask a little bit about the model, about the customer acquisition cost and then how that flows, you primarily recruit agencies and they of course recruit their own customers. Can you walk me through the financial model against that?

[Rick Carlson:]

Sure, our customer acquisition are amongst the lowest in the entire market. We typically are in the $4,500 to $5,000 fully big baked customer acquisition costs range and that fluctuates based on our resource mix at the time and the types of activities that we’re using. Our lifetime value of a customer is roughly hovers from just South or North of $30,000 based on our current attrition rate than our expected growth in customer revenues from a customer that's already on the platform. So you can see we've got a pretty healthy SAP business that we're excited about growing looking forward.

[George Melas:]

And the 30,000 that refers to an agency customer, is that right?

[Rick Carlson:]

It does and that represents roughly 85% of our revenues I believe it just don't go beyond that I want to look. I am giving you that number off the top of my head. But that's correct it turns out the direct users that work with us are of the similar lifetime value. We charge quite a bit more for a direct user to work with us directly rather than through an agency partner and so say those customers have a similar lifetime value.

[George Melas:]

Okay great. And in terms of the agency customers, can you provide some kind of sense that how many have web -- one or two customers, how many have five, how many have 10, or more. Just so I try to understand the penetrating within this?

[Rick Carlson:]

Sure, I think what we’ve said, as we've got about a 1,000 digital agencies right now, we've got about 4,750 customers on the marketing automation platforms, so you can kind do the math there in terms of your averages. What we're seeing is that’s changing all the time, we're seeing that customers are, agency partners are adding their fourth and fifth customer with every passing months. And so, we see those guys working through an initial pack of licenses that they buy when they sign up with us in the beginning as their paid licenses. I think our largest agency right now has something like 80 clients on the platform which has to be a record, I am not sure that anybody else given their price point has an agency like that but that's an outlier for us as well to be very clear. So we – but that gives you an idea of kind of what's possible with our pricing model in this agency networks. So I will point out that we also changed our pricing. We used to have five packs, the initial five packs was $500 and so an agency signed up with us was able to have five licenses in other words put five companies on the platform for $500 a month before purchasing their next license for their sixth customer. We've have lowered that effectively increasing our cost by 50%, agencies over the last few months have been signing up at $500 a month, but only getting three licenses and so those agencies are moving through those initial packs more quickly and then they pay $150 per license above that initial pack. And so we're seeing that as the mix of agencies who signed up under the new pricing program, changes we’re seeing essentially last what I would call inventory in terms of packs available and so we're kind of excited about that as the months and years go by. We expect these customers, these agencies to be becoming increasingly more valuable to us.

[George Melas:]

Great, and that the one you signed before the price changed a grandfathered in the old pricing scheme?

[Rick Carlson:]

So far we've not raised any pricing on them except for some outlier situation that is correct.

[George Melas:]

Okay, great. Thank you very much.

[Rick Carlson:]

Thank you so much. I appreciate it George.

[Operator:]

Our next question is a follow up from Mr. Scott [Indiscernible], please go ahead sir.

[Unidentified Analyst:]

Just back on pricing certainly given your, this is obviously an attractive price point relative to peers, what is your thought process on pricing overtime is it still run, get as many on and then use the levered labor, what's your thought process?

[Rick Carlson:]

Well, I definitely would say that we feel like we are in a land graph situation and the ideas that we have been able to put 4,750 clients on the platform, we are approaching 5,000 companies using the platform and really just over two-and-a-half years is something we’re very excited about. I think you exactly the term you used, but using the levered labor I think that what we're seeing is some pretty exciting growth simply because agencies trust us, they build their business around us and they grow by adding clients to the platform, so we tend to grow the value of our agencies without having to increase prices on them. And I think there is also with a large user based company using the platform. There is all sources of opportunities to provide additional services to each of those companies. We really are a core piece of technology to the companies that use us. They effectively run their sales and marketing of course we’ve built in CRM or we integrate with the CRM that they are using in a pretty substantial way, such that we feel like we will be with the company that adopt SharpSpring for quite a while and I think that presents plenty of opportunities for us to provide additional services at additional cost of them without raising the cost on the core product. It doesn't mean we never will, but right now we certainly feel like there is an opportunity here a land graph situation, we feel like our pricing is something that’s allowed us to capitalize on word of mouth and experience the growth that we’re experiencing.

[Unidentified Analyst:]

Alright, thanks guys.

[Rick Carlson:]

Thanks a bunch. I appreciate it, thanks.

[Operator:]

Alright, this does conclude our question and answer session. If your question was not taken, you may contact SharpSpring’s investor relations team at [e-mail]. I now like to turn the conference back over to Mr. Carlson for any closing remarks. Mr. Carlson please go ahead.

[Rick Carlson:]

Thanks everyone for joining us today. As always I especially want to thank your employees, our partners and our investors for their continued support. 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 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 company's current views with no 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 later annual report on Form 10K and quarterly reports on Form 10Q that may cause actual results, performance or achievements to be materially different from any future results, performances or achievement anticipated or implied by these forward-looking statement. The company does not undertake to take any responsibility to revise any forward-looking statements to reflect future events or circumstances. Also note that during this conference call we may make references 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 the company's performance. Reconciliation of net income or loss to non-GAAP measures as 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 investor's section of the company's website. Thank you again for joining us on today's SharpSpring's third quarter 2016 earnings conference call and you may now disconnect your lines. Have a wonderful rest of the day.