SharpSpring, Inc.
Q4 2016 Earnings Call Transcript

Published: 16 Mar 2017

[Operator:]

Good afternoon. Welcome to SharpSpring’s Fourth Quarter and Full Year 2016 Earnings Conference Call. My name is Doug and I will be your operator this afternoon. 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 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 would like to turn the call over to SharpSpring’s CEO, Rick Carlson. Sir, 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 fourth quarter and full year ending December 31, 2016, a copy of which is available in the Investor Relations section of our website. 2016 was a pivotal year for SharpSpring. We entered the period as essentially three distinct businesses, but merged as a leaner, more focused and stronger organization with a unified strategy supported by the rapid growth of our marketing automation platform. Like any great year, however, 2016 was not without its challenges. As we mentioned in our prior call, we experienced considerable distractions during 2016, including the sale of our SMTP e-mail relay business, the GraphicMail customer migration and the closure of a major office to improve efficiencies. As we will discuss later on in this call, the former GraphicMail customer base continued to experience higher than anticipated attrition, which resulted in our top line being lower than projected. That being said, our core marketing automation revenue is continuing onward at a fast pace which is a testament to our business model and the sustained growth of the marketing automation industry. After adding 213 new customers, we finished the year with 1,139 agency partners and over 5,250 businesses on our platform, which is a huge benchmark for our company, especially given the fact that we have accomplished all of this in under 3 years. In fact, we were recently ranked on Deloitte Technology’s Fast 500 as one of the fastest growing technology companies in North America. This is truly a remarkable accomplishment and something we will strive to build upon day in and day out. Our aim going forward is to continue the significant growth by ramping up our marketing campaigns, implementing new business development initiatives and bolstering our R&D to further enhance our solutions, user experience and product features. Before I provide further commentary on our operations and initiatives as well as our outlook for 2017, I will turn the call over to our CFO, Ed Lawton, who will walk us through the financials for Q4 and the full year 2016. Ed?

[Ed Lawton:]

Thank you, Rick. Turning to our financial results for the fourth quarter and full year ended December 31, 2016. Revenue for the fourth quarter increased 10% to $2.9 million from $2.6 million in the same year ago period. The improvement was driven by the continued strong performance from our core SharpSpring marketing automation platform, which generated a record $2.7 million or 93% of our total revenue during the quarter. This was up 87% from $1.4 million in Q4 last year. For the full year 2016, revenue increased 26% to $11.5 million from $9.2 million in 2015 after removing the revenues of the SMTP business that we sold in June. We grew our core product revenues by 109% during 2016 compared to last year. The revenue growth from our SharpSpring marketing automation platform was offset by lower revenue from our SharpSpring Mail+ offering, which was migrated from our GraphicMail product during the middle of 2016. For Q4, SharpSpring Mail+ revenue totaled approximately $186,000. As Rick alluded to earlier, we experienced significant attrition to this customer base since the migration of the GraphicMail customers on to the SharpSpring Mail+ platform. A little over one year ago, we made a difficult position to migrate these customers on to our SharpSpring platform. Going forward, it would not be appropriate from many GraphicMail customers due to the more advanced capabilities and options available in the SharpSpring platform. We made this decision to avoid having to support an aging GraphicMail platform that was in decline and not delivering the required profits for the company. Although customer attrition was moderated first giving us hope that we would be able to retain a large portion of customers, customer attrition escalated during the second half of the year. We also had to increase our loans for doubtful accounts the past two quarters as customer balances became uncollectible leading to even more attrition. Mail+ now represents under $1 million of annual revenue or under 8% of total revenues today. We have stopped investing in this product in order to devote 100% of our resources and focus on marketing automation. So, we expect this already small part of our business to slowly decline in future quarters. This ancillary product is now insignificant to our total operations and will not be discussed at length in future quarters. Our quarterly gross profit was $1.7 million or 59% of total revenue this past quarter compared to $1.7 million or 64% of total revenue in Q4 of last year. Gross profit for 2016 was $7 million or 61% of revenue. This was up 10% from $6.4 million in 2015. While our gross profit was up for the year in dollar terms, the decreasing gross margin for both periods reflects a lower gross margin for our higher growth SharpSring product, which has become an increasingly larger part of our overall business. We have invested in our hosting infrastructure and support organization during the year to support the current and future growth of our core product. Although some of these investments are likely behind us, like any high growth SaaS company, we will continue to feel some gross margin pressure as we build our customer base. Turning to our operating expenses, for the fourth quarter of 2016, our operating expenses increased 9% to $4.9 million from $4.5 million in Q4 of last year. The increase for the quarter was primarily due to higher R&D and G&A expenses to support the expansion of our business. Our GAAP net loss from continuing operations for the quarter totaled $2.2 million or a net loss of $0.26 per share. This was an improvement from a GAAP net loss from continuing operations of $4.4 million or a net loss of $0.60 per share in Q4 of 2015. For the full year 2016, our GAAP net loss from continuing operations totaled $5.2 million or a net loss of $0.66 per share. This was an improvement from a GAAP net loss from continuing operations of $9.6 million or a net loss of $1.51 per share last year. 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, amortization, non-cash stock compensation, acquisition-related charges and restructuring expenses totaled $1.2 million. This compares to an adjusted EBITDA loss from continuing operations of $1 million in the same year ago period. During Q4, EBITDA loss is higher than anticipated due primarily to lower SharpSring Mail+ revenue and higher reserves for our uncollectible accounts. Our adjusted EBITDA loss for the full year 2016 totaled $3.8 million. This compares to an adjusted EBITDA loss of $2.9 million in 2015. Our core net loss, which excludes amortization, acquisition-related costs, stock compensation expenses, restructuring expenses, while adjusting the taxes for the fourth quarter of 2016 totaled $851,000 or $0.10 core net loss per share. This was an improvement from a core net loss of $1.1 million or $0.68 core net loss per share in Q4 last year. Our core net loss for all of 2016 totaled $2.5 million or $0.31 core net loss per share. This compares to a core net loss of $2.5 million or $0.40 net loss per share last year. Looking forward, in addition to scaling our core product, we will continue to take incremental steps toward profitable reiterating our goal of nearing breakeven adjusted EBITDA in Q4 of 2017. 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 our earnings release. Turning to our balance sheet, we had $8.7 million of cash at the end of the quarter, which was down from $11.6 million at the end of the prior quarter. During Q4, we paid approximately $1.1 million in taxes associated with the gain on the sale of the SMTP email relay business. We continued to expect our cash on hand and credit facility to remain an adequate source of funds for our operations as we execute on our slated objective and move closer to EBITDA profitability this year. This completes my financial summary. I would now like to turn the call back over to Rick for additional insights into our operational progress in Q4 and 2016 as well as our outlook for 2017. Rick?

[Rick Carlson:]

Thanks Ed. During our last two earnings calls, we discussed the possibility of a weaker Q4 as our team continued to face multiple hurdles, most notability migrating GraphicMail customers to SharpSpring Mail+ and selling the SMTP business unit, which resulted in essentially consolidating three companies into one. As a result of these distractions, we expected and forecasted our regeneration and new customer wins to be impacted. Our new customer wins in Q3 were somewhat higher than we anticipated, but as predicted in Q4 we regressed at a level of initial assumptions. Additionally, we had higher than expected attrition rate of the legacy GaphicMail customers from SharpSpring Mail platform which further affected our financials for the quarter. The attrition of GraphicMail customers was expected and forecasted but ultimately reached higher levels than we had hoped. Despite this painful turnover the issue is now essentially behind us as revenues from these GrahphicMail customers have already declined to relatively insignificant levels. On a more positive note, we feel confident about our ability to improve the profitability of these customers as a result of this customers’ migration even with reduced revenue levels. It also means we are completely free to focus on SharpSpring marketing automation which has been and remains the core goal of our business. We now have all of our resources allocated to our marketing automation business and we will be better positioned to generate more revenue and cash flow from a more reliable and longer standing customer base. The marketing automation market remains the multibillion dollar opportunity in front of us and we continued to be uniquely positioned to win in this market. With 2016 behind us, we are already seeing the results of renewed focus on lead generation activities in the form of a market increase in lead flow in Q1. On the key – one of the key new strategies we implemented recently with hiring business development representatives or BDRs to help with our more focused sales approach. In the past, the majority of our sales efforts and follow-up dealt with prospects who specifically requested a demonstration of our platform, with our sales efforts focused exclusively on these types of leads the rest of our inbound prospects were handled in more or less an automated fashion. With the addition of the BDR job function to our sales process, we doubled the human outreach to prospective new customers. Combined with our marketing automation capabilities levered by SharpSpring in-house, we can effectively work all leads in a cost effective and efficient manner generating more leads demo re-class and attended demos over the long-term. Because we have a very high percentage of conversion once we demonstrate SharpSpring platform to a perspective customer, we believe this new and proactive go-to-market approach will complement our current strategy and enable us to drive increased customers wins in the coming quarters. In addition to the investments we are making in sales and marketing, we are continuing to invest in R&D both in increasing the size of our staff and introducing new features and enhancements to our platform. In fact we doubled the number of developers working on the platform during 2016, reaffirming our commitment to supplemental SharpSpring’s differentiated pricing and agency market strategy with continuous innovations to ensure we can build on our progress of gaining market share. Our added R&D resources are already working on filling what we view as the last significant hold in our product offering, social media management as well as working on a host of new innovated features that will help us to further differentiate SharpSpring in the marketplace. One of the enhancements we have recently launched is integrating Shutterstock, the world’s leading stock photo provider into our marketing automation platform. Now, our customers are able to preview and purchase any of Shutterstock, nearly 125 million images directly through the SharpSpring platform, whether they are working on a landing page and email or any other form of marketing. We are really excited about this partnership as it adds to the tremendous value of our offering and it enables us to become even stickier with our customers. Partially because of the product improvements we have made and the growing stickiness of the platform, we felt like we have justified and increased price as a way to gain operating leverage. As many of you know, we have always been priced well below our closest competitors with very similar functionalities and continue to be committed to the idea that quality SMB software need not be prohibitively expensive. As we created new tools including our landing page builder, dynamic content functionality, advance search and partnership integrations, we have also selectively rolled out a price increase to our customer base. We implemented this price increase in a way that mitigated the risk of customer attrition and so far had minimal negative customer feedback. Our customers focused approach remains at the core of our growth strategy and we are committed to providing a superior service at a fraction of the price when compared to our competitors. Finally, I would like to thank one of our departing directors, Vadim Yasinovsky for his many contributions and guidance while serving on SharpSpring’s board. Vadim’s dry wit and sense of humor and most of all, his insight and practical operational advice will be missed. As we announced in the press release at the end of year, Vadim’s departure coincided with the introduction of Steve Huey to the Board who has an impressive track record of creating significant long-term shareholder value for the company since being involved with. Additionally, we are in the process of increasing the size of our Board from five to seven members and encouraged by the promising candidates, who we are evaluating, some of which were introduced by our major shareholders. Although, we have covered a lot of ground as an organization up to now, our focus is to scale our business to new highs and become the preeminent provider of marketing automation solutions. This enhancement to our corporate governance and strategic guidance is an important step in the company’s development cycle. In summary, we are very pleased with how the company performed over 2016 despite facing considerable distractions along the way will include the revenues of our core marketing automation products, 109% year-over-year. We have also successfully removed literally all of the major operational distractions from our business including selling the SMTP business unit, migrating the GraphicMail customer base, landing down that entire code base, closing a 50% South African based office and consolidating our operations in our new Gainesville, Florida headquarters. We have refocused the company and increased our investment in the areas where we see the greatest growth or taking advantage of opportunities to enhance operational efficiencies as they arise. We have entered 2017 with a completely clean slate with a leaner and more focused than we ever had. Our goal for 2017 is to significantly grow our top line, expand our customer base and increase our market shareholders within the multi-billion dollar marketing automation industry. And we feel confident that we will do so. And with that we are ready to open the call for your questions. Operator, please provide the appropriate instructions.

[Operator:]

Thank you. Ladies and gentlemen, at this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Eric Martinuzzi from Lake Street Capital Markets. Please proceed with your question.

[Eric Martinuzzi:]

Thanks. I do have some questions about the ongoing business, but I do want to lead off with kind of a backward looking question with regards to GraphicMail, 2.5 years ago and I know it predates your time Rick, but this was a company that we spent $5 million on a mix of cash and equity and it was at a $4 million annual revenue run-rate in 2014. I just find it just such a dramatic decline down to less than $200,000 last quarter and basically de minimis from here on out. Can you address strategically what do we get for a $5 million investment? Obviously, we are retiring the brand when we have closed out to Africa, but is there any positive takeaways is what I am looking for I guess?

[Rick Carlson:]

Yes, fair question. As you point out, it wasn’t part of the company at the time that acquisition was made. And so I wasn’t entirely – I wasn’t here for the underlying rationale for that decision. I do think that at the time it appeared that the company could buy some revenues in an inexpensive way and that acquisition was done in conjunction essentially to those who have been long time investors in conjunction with the SharpSpring acquisition. The original intent has been explained to me was to capitalize on a country partner network that GraphicMail had built over time. I was here for most of the time that GraphicMail was really part of the business and so I can tell you that from an outside perspective and then eventually as the CEO as we got in under the covers and looked at that business more closely, the country partner network was simply unable to sell the SharpSpring platform and that business was already kind of in decline and was not growing. And so hindsight being what it is I don’t think that, that was – that clearly, I mean, it wasn’t the best acquisition and I am not sure anybody would do it again, because we weren’t able to capitalize on that country partner network. And there are host of reasons around that the contracts didn’t incentivize growth beyond lifestyle businesses for these country partners and I could give an extended answer on all the reasons why. But I think it’s probably safe to say that nobody on our side would do that again. And I also think giving credit where credits do that the company made a good acquisition with SharpSpring at the same time. It’s simply that the marriage of these three companies and trying to melt them together into a larger company was not successful. So, we made a decision a year ago, a 1.5 year ago something like that implies a tough decision really to migrate the GraphicMail customers we thought about whether we could sell that business, we looked at another couple of options and we made the decision to migrate those customers. Our hope was that we would keep half of those customers and buy that time the business had already dropped to below $4 million I believe by the time we migrated – made the decision to migrate those customers. And so we knew we would have some heavy attrition from that user base, but the company has long since made a decision to focus exclusively on marketing automation and simply wanted to migrate these customers in order to preserve revenue. We did so. And simply because of the complexity of our platform and the functionality compared to a consumer oriented $40 e-mail product and the fact that these country partners have essentially been shutdown and they often provided high levels of support to these very small clients, we saw greater attrition from that group than we would like. The good news about all of this is that it’s over. And while all of that was going on, we were able to grow our marketing automation business a 109%. So, I think that’s pretty much the story, not a fantastic acquisition, but there was a good acquisition that took place at the same time and all of this migration has still allowed us to grow SharpSpring and not affect the core business in a way that it could have.

[Eric Martinuzzi:]

Okay. And as a transition the hand off from GraphicMail we fumbled a bit on here into the Mail+ product, when you say, you are deemphasizing Mail+, I was not deemphasizing it in my own my model, I was modeling about $2 million in 2017. Given the less than $200,000 in Q4, what’s the right way to think about that revenue segment for the coming year? Do we zero that out? Is that just something Q4 annualized?

[Rick Carlson:]

Yes. I mean I would look at something similar to Q4 annualized. I do want to say that we have been extremely clear call after call that the entire focus of the business is on the marketing automation market. And we created a product called Mail+ largely to house this user base of GraphicMail customers that was 90% of the reason we created Mail+. We had some thoughts that maybe we could also offer this to our agency partners, which we do and that there is some adoption there. But we did this in order to house the GraphicMail customers similar to some of the business models challenges that we saw when we got under the hood with GraphicMail. There is an entirely different code base and we were really forced with do we want to be two companies and maintain two bases or do we want to migrate these customers over and swallow our medicine right now and that’s the choice we made, but we have always been focused on marketing automation. I think the discrepancy between the number that you had in your model and what we are seeing now is greater attrition than even we had hoped in that particular product. But again that product was always I think something that we have talked about as being a container for lack of a better term for the GraphicMail customer base rather than something strategic since we have been 100% focused on marketing automation for some time.

[Eric Martinuzzi:]

Got it. Okay. And speaking of marketing automation that number for Q4 certainly revenue wise was – came in pretty much where I know you have got good visibility there given the SaaS nature of that revenue stream. A year ago we saw pretty substantial step up from Q4 to Q1 in the SharpSpring marketing automation revenue. Obviously, we didn’t have as big of a build of new customers in Q4 as you guys would have liked. Is that business roughly $300,000 to $400,000 sequential increase a year ago. I am assuming it’s something less than that, but is that revenue line item up sequentially in March versus December?

[Rick Carlson:]

We definitely expect a step up in revenue from Q1 – from Q4 to Q1 and we see that improving throughout the year. As we discussed just now on the call and in previous calls, one of the other kind of difficult things about the decision we made to migrate these customers and some of the other moves that we made selling the SMTP business unit is there was some distraction despite our very best efforts to keep all of our focus on marketing automation. So, we had seen some weaker lead flow, but we are extremely excited about being totally focused now. And as I just alluded to we have already seen an increase in lead flow in Q1. So, we do see – we expect to see a modest, but a step up from Q4 levels and then continuing growth throughout the rest of the year with marketing automation.

[Eric Martinuzzi:]

Understand. Okay. And then last one for me you talked about this increase in lead flow, have you done anything different in Q1 or planned to do anything different everything from agency outreach, events, conferences, what’s different about your go-to-market strategy or is it kind of just more of the same for 2017?

[Rick Carlson:]

Yes. Boy, I can be known for long answers and this is an area where if I am not careful, I can give a long answer to too long an answer, but the answer is kind of yes, across the board we have applied a tremendous – a lot more pressure. We have gotten that focus back that I talked about loosing I mean for those people that have been on a lot of these calls with us and are long time investors, I think we have spent some time talking about the difficulties of migrating an entire company’s user base over to a new product and creating that product and conveying those things that took a lot out of our marketing efforts given the attrition rates that we saw was probably the wrong move, but again hindsight being 2020. We have regained that focus in late Q4 and this quarter and are seeing just from the focus alone and having all of our efforts pointed towards marketing automation that’s made a difference. I alluded to adding our BDR function and more sales pressure as well. Historically, the company has only ever worked on leads where a prospect or a lead has raised their hand and said they are interested in a demo of our platform. That typically is about 10% of the leads that we generate, maybe 15% of the leads that we generate kind of out of the gate say, I want a demo or a platform and we have used our own tool to nurture the rest of those leads with marketing. We have now added a function, business development representatives that make outbound calls and try to initiate conversations and content and so forth being sent to these leads such that we can get higher percentage of those folks that haven’t initially raised their hand for a demo, said they wanted the demo as well and gotten those folks on the demo as well, excuse me. So that’s just tip of the iceberg stuff. We found new channels where we have hired an SEO firm and a paper click firm, we are doing site optimization, it’s just really across the board we have got a focus that we haven’t had in truth probably since our company was acquired by SMTP a couple of years ago. So if you are hearing some excitement and some enthusiasm about our business in the long-term, it’s because of that renewed focus and the results that we are seeing from that lead gen side.

[Eric Martinuzzi:]

Okay. Well, we will stay tuned looking forward to the financial results of those more focused efforts here?

[Rick Carlson:]

Hi. Thanks so much. I appreciate it as always.

[Ed Lawton:]

Thanks Eric.

[Operator:]

[Operator Instructions] Our next question comes from the line of Louie Toma with Craig-Hallum. Please proceed with your question.

[Louie Toma:]

Hi guys. Thanks for taking my call. I just have a couple of questions. First Rick, I was wondering if you could talk a little bit about the levers to drive growth and I guess I know you mentioned in the last question, but I am trying to understand what your capacity is, I know last and I will say capacity I am sorry, in terms of new customers on a quarterly basis, last year you had a couple of quarters where you were ended 250 customers additions range and I am wondering when you look at the numbers [indiscernible] you haven’t placed, you mentioned you started incorporating business development route, can you talk about given your current structure what your capacity is and how you plan to bill that out over time based on your expectations for new customer add?

[Rick Carlson:]

Well, like a lot of businesses, I think our capacity is set by the – more by the number of leads that we are able to generate. Then it is size of our sales team. Our sales team is a throughput mechanism and what I mean by that is we will hire additional sales people as the leads come through. But once the sales person closes a deal, they are turned over to our on-boarding and support teams for long-term management. So our sales team is not a good indicator. I wouldn’t say in terms of it being some sort of capacity limit on our ability to sell. Our ability to generate more sales on a monthly basis is tied directly to our ability to generate leads and more specifically to turn those leads into attended demos. We have had and continue to have a very, very high close rate. That close rate on an attended demo has not gone down, really since we have started the business, in fact it’s gone up. The fundamentals of our business are only getting stronger. And when I say fundamentals of our business, I mean our feature set as it matches market need, we have only ever gotten a stronger product, we continue to have to be able to sell that much stronger product than we have in the past at a price point that’s a tiny fraction what our competitors are offering it at. And so we – if we can get somebody on a demo, we generally close that sale. And so we are getting a lot – we are getting a significant up-tick in the number of leads that we have returning to levels and going beyond the levels that we saw before we spent this last year working on migrating customers and selling business units and so on and so forth. So we are very excited about it. I hope I am answering your question Louie, but I would really think about lead flow as the governor for our sales. And I think the last thing I will say rather than the size of our sales teams or some other constricting factor. And I would say that we are still a very small company in a multi-billion dollar market and are continuing to get little-by-little brand awareness, especially in the agency market. But with the footprint of 5,200 plus companies by the end of last year and more today, we are getting brand awareness and finding – seeing benefits from that. Finding companies that are finding us and so we expect the sales to return to previous levels and move beyond over the course of the coming quarters.

[Louie Toma:]

And when you think about increasing your brand awareness are a driving lead generation, is that the biggest factor is increasing your brand awareness and getting the name out there, so people actively search for you or you come up higher on search results, they get people to want the demo, I mean is that the main thing that drives lead generation?

[Rick Carlson:]

Well, there is I mean I don’t – it’s not so esoteric as it’s just brand awareness in general. No, where there is a lot of tactics that we are using that are kind of bread and butter in down marketing tactics, content generation, passing those, distributing that content through various syndication channels and distribution channels to get that content out there. I will just give you an example. We have a 2017 vendor comparison guide that is a great source of leads for us simply because it shows that we are feature comparable rated as high or higher by consumers and users as anybody else out there and we are a tiny fraction of the cost. So we take that comparison guide and get that in front of as many peoples as we possibly can through all sorts of means from paper click to search engine optimization where people find it naturally to third-party distribution channels and third-party websites, etcetera. So we are getting a heck of a lot smarter about that creating new marketing partnerships that are working for us. So there is a lot of very tactical measurable efforts going on over here that have us confident at the up-tick in lead flow that we have been able to accomplish is Q1 is going to continue moving forward.

[Louie Toma:]

Got it. Thank you. And just quickly, given your current cash from, what do you expect to have for cash by the end of Q4?

[Ed Lawton:]

We still feel confident Louie that we will have enough cash on hand to last just until we get to breakeven. That number might be in the $4 million to $5 million range by the end of the year based on what we are seeing today, but we feel like that will be adequate and again we do have a lot of credit in place as well.

[Louie Toma:]

Got it. That’s all I have. Thank you, guys.

[Ed Lawton:]

Thanks, Louie.

[Rick Carlson:]

Thanks, Louie.

[Operator:]

[Operator Instructions] There are no further questions in the queue. I would like to hand the call back over to Mr. Carlson for closing comments.

[Rick Carlson:]

Hey, thank you for joining us on the call today. I especially want to thank our employees and partners and 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 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 later 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, management 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 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 for SharpSpring’s fourth quarter and full year 2016 earnings conference call. You may now disconnect.