Q4 2020 Earnings Call

Afternoon, Monday, miscellaneous and I'll be your conference operator today.

At this time I would like to welcome everyone to that for a fourth quarter and full year fiscal 2020 <unk> earnings conference call.

All lines have been placed on mute to prevent any background noise.

After the speaker's remarks, there will be a question and answer session.

If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.

If he would like to withdraw your question press the pound Keith Thank you.

I will now turn the call over coaching Huh, Vice President Investor Relations you May begin your conference.

Hey, feeling good afternoon, and welcome to doors fourth quarter and full fiscal year 2020 earnings conference call. Joining me today, our teams, though towards Chief Executive Officer, and other slow Burns Chief Financial Officer.

The purpose of today's call is to provide some color on our fourth quarter and full year results as well provide our financial outlook for the upcoming first quarter fiscal year 2021.

Some of our discussion that responses today will include forward looking statements. So as a reminder, or actual results could differ materially as a result, right. It factors.

You can find information regarding those factors in the earnings release, we issue today and our most recent tend to filing with does he see.

Finally, we'll be referring to several non-GAAP financial measures today and reconciliations to the related GAAP measures are included in our earnings release for a copy of our earnings release links to our SEC filings.

A replay of today's call or to learn more about Laura Please visit our Investor Relations website at Investor Dot Dot com and with that let me turn it over the team.

Thanks, Jim Thank you and welcome to our fourth quarter and our full year earnings call for fiscal Twentytwenty.

Before we get started let me first address the current situation with the krona virus and how it's impacting zora our top priorities in this situation are clear.

Our to keep our employees chase to continue to serve our customers and partners into do our partner preventing the spread of the virus.

In terms of day to day work, we are confident in our ability to continue to deliver our services as usual we run a mission critical system.

For a decade, we continuously developed enhanced Emmy teen or business continuity disaster recovery plans to assure that our business our customers business are able to run smoothly.

Resilient and distribute it infrastructure, we have a global workforce one that is already adopt a remote work in virtual collaboration. So we expect to be able to continue to support our operations 24 by shut in 365.

66 days a year.

We also recognize that we have a larger played a role to play in our communities and are doing our part to minimize any contribution to the spread of the virus I strongly encouraging employees to work from home to practice healthy habits cancel large gatherings and pausing all non essential travel.

We've also made it difficult decision to cancel the in person component.

He also described 2020 conference in order to prioritize the health and safety of our global customers partners employees and everyone who helps put on subscribers. We plan to replace the him personally event with videos in life screen content throughout the year.

Finally give me the Nick the fluid nature of these events, we set up a global response team to closely monitor the developments around included 19 and develop appropriate plans in response to various scenarios as they occur.

Let me time, we plan to stay focused and continue to execute we will continue to create amazing innovations, we will continue to deliver value to our customers and to help the best companies in the world when into subscription economy.

Let's now turn to our quarterly results when I look back at our fourth quarter.

The headline is I'm pleased with our execution this quarter and I feel good about the progress we've made on the recent initiatives we've been talking about for example in Q4.

We saw better when rates improved sales productivity, which resulted in a record bookings quarter any great start for our new Chief revenue Officer Robbie trial.

We grew subscription revenue by 21% year over year to 54.6 million inline with expectations in total revenue of 70.4 million.

We grew the number of customers with ACB value over $100000 to 624, an increase of 38 customers, which is our largest increased in a quarter.

We were recognized once again, it's a market leader for subscription management solutions by yet another third party industry analysts ITC.

We continue to do a consistent job, bringing customers log onto the platform last quarter. We saw 46 go lives, including circles, what are the largest auto distributors in Chile.

Populates the movie theater chain in Mexico, Softbank Robotics, Topcon agriculture, what are the big four audit firms in a global TV golf channel.

Nearly half of our go lives were outside of North America.

No. We also saw that professional services revenues was limited in Q4. This was partially due to timing delays that push services revenues into future quarters, but more importantly, what you're so also starting to see it's always push services work to global system integration partners, which we will talk about later on the call.

Finally, a little over a month ago, we moved into our new office headquarters and debit city, allowing us to combine two offices and relocate to a bigger space to handle the growing needs of our company.

In Q4, we also made really good progress on the initiatives that we talked about in recent quarters. So let me take a moment to first recap why these initiatives are important first our goal remains the same as the market leader in subscription solutions, we see ourselves as a portfolio bet on the entire subscription economy.

The position that gives us the opportunity to deliver 25% to 30% sustained growth over a long period of time.

But what we see these last couple of years is that the subscription economy is no longer just about high growth SaaS companies like zoo workforce, such subscription business models are being adopted by some of the largest companies across multiple industries all around the world.

So for example, you've heard US talk about how we are now powering the connected car initiatives seven at the top 10 auto manufacturers as well as Harley Davidson and now Darko, you've heard us talk about watching t. initiatives large industrial manufacturers like Caterpillar Briggs <unk> Stratton and Stanley Black <unk> Decker, you've also heard us talk about launching enter.

As a service models with over a dozen major utilities around the world like origin energy son in eight you a and centrica.

Back in Q4, 75% of the new logos, we signed on were outside the high Tech vertical. These included a major investment Bank in America, a top international truck manufacturer in aerospace manufacturer one of the biggest pet supplies retail change what does the largest utilities in July.

In one of the world oldest chemical in pharmaceutical companies and one of the world's largest news organizations. In fact today, we have 225 customers who recorded an annual revenue north of a billion dollars.

And these larger enterprises ultimately become great great opportunities for expansion and growth. The good example is SNCF the French railway system. A couple of years ago, we help them launching new must be passed seemed to students and millennial travelers to hit over 100000 people signed up and just the first 90 days it was that feeds.

Big success, but now we're working with them on a huge expansion projects to handle all 100% of their monthly in annual passes. So now we have a national railway system running entirely on Zora.

So this is our model in addition to signing on hyper growth disruptive companies, it's important for us to become the subscription platform of choice for the worlds largest companies and then as their revenue mix shifts more and more to subscriptions. We benefit that's why we believe that when we beach $1 billion and revenue our customer count.

We'll be closer to 2000 companies, then say to 10000.

The last year, we recognize that in order to really capture this large market opportunity we had to make some changes. So specifically we focused on four things first we focused on building a strong strategic sales team well. It takes a more consultative approach. That's why we couldn't be happier to brought onboard Robbie trial, but that's our C.

I wrote in November Robbie has extensive experience since we experienced a proven track record selling to the largest companies as he drove sales for Adobe experience cloud, obviously going to work we've done last year. It continue to invest in the right infrastructure and processes to help us scale predicts predictably with our largest customers second.

We focused on increasing the leverage of our sales team by building stronger alliances with our GSRP partners firms like Pwc, Eli Deloitte, Ivy and essentially capture him and I, who already have a large presence in these larger accounts you've heard us talking about this in recent quarters and this group is now part of Robbie's go to market team.

Actively working with GE or size sourcing deals priming projects and helping our partners built practices around our technology.

Third we focused on expansion by moving from just Piney point billing solution to a broad product footprint anchored by a suite of solutions and this is why retro is so important.

And finally fourth we focused on building a great platform to help our customers customized integrate an extended zohr into their businesses. We announced this in June last year. It we've been really encouraged with the customer usage and adoption, which increasingly stickiness for our products and we're seeing more streamlined deployments for our services.

The transformation from these four initiatives is working I'm really pleased to see the progress we're making in what is really a relatively short period of time for example in the sale side Ravi is already having an impact as I mentioned, the beginning we had our largest bookings quarter ever in Q4, and we're seeing better sales execution in the field, we're still earn.

Moving on to the initial signs are really really positive on the GE aside front, we've tripled the number of deals led by GE aside year over year, we're working on projects with essentially with Centurylink in AI SCPA catch overnight essence, yet where the partners are really taking the lead on the implementation work now.

In mind that as we increasingly leverage our Gs I'd partners, you'll see a shift in the mix of revenue a services revenue will represent less and less moving forward. Now you will see we are reshaping our business increasing leverage in our operating model how that will cover this can greater detail in the financial section and forward looking commentary later on the call.

The product suite side, we continue to make steady progress on customer go Lifestride integrated billing plus retrofit solution, we follow up on our implementation efforts in Q3, and now or operationally live with our integrated solution with Siemens Liveperson Command Alcon unity in a large research firm.

With more to follow in Q1, and finally on the platform side, we continue to see great adoption of our capabilities with now over 200 customers live using our platform tools. The platform is helping these customers orchestrate events in automated manual processes, and it's helping us out with implementation times in wins against you.

Yourself projects to summarize we executed well in Q4 to close out the year, we're making good progress against the initiatives are important for the up market opportunity. We are seeing now given our deal cycles I expect much of the business momentum to happen in the back half of this upcoming year in setting us up for subscription.

Revenue growth rates growth rates, improving to the mid twentys by sometime next fiscal year.

We have a great opportunity ahead of us filled with strong market demand.

Focused enterprise strategy and industry, leading products, leading to durable growth for many many years to come I could not be more excited about our future.

Now before I turn the call over to Tyler for one final time.

I wanted to take this moment to truly thank him.

Tyler.

Thank you for joining me so early on as my partner in helping builds were to where we are today.

Back then we were small private company with less than 100 employees and today, we're a publicly traded company with over 1200 Ceos around the world I.

I know everyone at the company's grateful for your countless contributions in helping us create the subscription economy. After a decade with US we wish you the best I wish you the best in ticking on a new challenge and we are truly excited for you in your future you will always be.

So Tyler.

Let me turn it over to you.

Thanks, Tim and thank yous, and certainly for the kind words in the great journey, we've had together.

I have some personal words that I want to cover Dan.

For now, let's just go through an order numbers and performance.

So we delivered another quarter of healthy subscription revenue growth of 21% and had our highest quarterly billings number ever representing 25% year over year growth.

We met our non-GAAP operating loss target of negative 10.5 million.

Let's start with our key operating metrics and then I'll discuss the transaction volume processed on our platform in the quarter.

We had a lot of new logo activity in the quarter, resulting in account at 624 customers with over 100000 ACB at the ended the period.

This is a net adds 38 from the prior quarter and our highest increase ever.

This customer group now represents 90% of our annual recurring revenue as it continues the trend to becoming a larger part of our business and this quarter as CR ROE Robbie's team did a really good job of 90, new logos and customers to close out the year.

Turning to expansions and Upsells are our dollar based retention ended at 104% slightly down from the prior quarter as we had expected.

As a reminder, this is a trailing 12 month metric. So we continue to feel the impact of the lower up so and down sell dynamics from earlier in the year.

The lack of cross sell activity far rat pro product continued to impact this number in Q4.

We also saw a slight uptick in customer churn arising from customer business. So you are in M&A.

We've already made some adjustments to our go to market structure to improve our overall upsell execution and reduced.

As such we expect this metric to be near similar levels for the next quarter with real improvements showing in the second half of the fiscal year.

As you know our transaction volume metric can fluctuate quarterly so looking at a trailing 12 months basis, our transaction volume grew 29%.

For the quarter, our systems process $13.1 billion of transaction volumes through our billing product representing 21% year over year gross.

Keep in mind Q4 was a tougher compares last year's number included a large customer who once all of their volume onto the system that quarter, resulting in 56% growth last year.

Now, let's look at our financial results.

Subscription revenue grew 21% and inline with our expectations.

As a reminder, we had a onetime benefit of 1.3 million in subscription revenue in Q3, which impacts quarter over quarter growth.

Professional services revenue decreased 14% year over year. There are few things at play here, both onetime and as a broader trend.

First we had a large project under milestone based contract where while the project is going well key expected milestones are pushed into future quarters second as we've highlighted in previous calls we've had a focus to shift more of our services work to GSK partners as they are playing a larger role in our implementations Tim talked about this trend earlier in this call.

Our professional services revenue will continue to reflect this change and not growth the same rate a subscription revenue.

You'll see this when I cover our guidance for next year.

Looking at our Q4 margins total non-GAAP gross margin was 58% similar to the prior quarter.

We maintained a healthy non-GAAP subscription gross margin 77%.

Non-GAAP professional services gross margin was negative 11% driven by the lower revenue levels.

With lower utilization levels, and our plans to shift more services work to our partners, we decreased our cost structure and professional services through rich resource transfers and reductions.

Non-GAAP operating loss was 10.5 million inline with our expectations as we continue to do a diligent job matching our expenses to our revenue growth.

We're actively managing our ongoing operating costs, while making the right investments in our go to market product initiatives to support sustainable long term growth for the business.

In Q4 sales efficiency indicator guy or growth efficiency index ticked up to 2.3 as we had indicated on the last earnings call. This metric is calculated by dividing our trailing 12 months non-GAAP sales and marketing expense of 97.1 million by the year over year increase in trailing 12 month subscription revenue of 41.7.

[music].

Now, let's take into billings and free cash flow.

As we mentioned we had a strong quarter for calculated subscription billings of 74.5 million, representing 25% growth year over year.

This was primarily the result of strong sales efforts in Q4.

We're also helped by early renewal activity and higher annual mix each contributing approximately two percentage points as you know quarterly billings can fluctuate so looking over the full fiscal year subscription billings growth was 23%.

Given the quarterly fluctuations and some of the early renewal activity. We saw in Q4 subscription billings growth may come in slightly lower than our subscription revenue growth in Q1.

For the full year, we expect subscription billings to grow slightly faster than subscription revenue and mostly driven by the second half of the year.

Turning to cash flow.

We once again did a good job of managing our expense base and showed improvement as free cash flow was negative 4.5 million in the quarter and ahead of our expectations. There are few things to note.

Total Capex spend was 8.5 million was 6.4 million of that related to facility spend for the headquarters.

This was offset by 4.8 million and reimbursements, which are recorded in our operating cash flow, resulting in a net impact of negative 1.6 million to free cash flow for facility spend.

Also had a shift in payment timing of 4.1 going into Q1 related to headquarter facility spec.

Excluding the facility spend free cash flow would have been negative 2.9, right I'm pleased to say that we performed well in terms of free cash flow for the quarter.

Looking ahead, we expect free cash flow to be approximately negative 8 million in Q1, which includes the 4.1 million timing shift for facilities Capex from Q4, and some replacement equipment related to the move.

We expect full year free cash flow to be better than negative 22 million.

Additionally, we plan to be at a cash flow breakeven run rate by the final quarter of this year.

This was a commitment we made to our shareholders. When we became a public company two years ago and while we've not reached the revenue levels that we originally planned we believe it's important that we manage our business accordingly to deliver on this promise.

We ended the quarter with 171.9 million in cash and cash equivalents remain fully funded against our current operating profit.

Lastly, our fully diluted share count as of the ended the quarter January 31, 2020 was approximately 126 million using the treasury stock method.

Now, let's move to our outlook and guidance.

As a reminder, we have strategic initiatives this year to shift more about professional services work toward GSK partners, which means we're investing time and resources to develop deeper relationships with them.

These efforts will result in lower professional services revenue expectations for the year over time, we knew that this will also result in superior margin structure and create more efficiencies for our business.

Now for our guidance numbers for Q1 and fiscal 21.

For Q1, we're currently expecting total revenue of 70.5 million to 73 million.

Subscription revenue of 55.5 million to 56.5.

Non-GAAP operating loss of 12 million to 10.5 million.

Non-GAAP net loss per share of 11 cents to 10 cents, assuming a weighted average shares outstanding of approximately 114.6 million.

For the full year fiscal year 21, we're currently expecting total revenue of 300 million to 307 million.

Subscription revenue of $239 million to 243 million or.

Non-GAAP operating loss of 33 million to 28 million.

Non-GAAP net loss per share of 29 cents to 25 cents, assuming weighted average shares outstanding of approximately 116.7 bye.

With a transformational changes we've made we expect our begins to show acceleration than the second half of this year with improving revenue growth rates toward the end of year.

In terms of the impact of the current a virus, we all realize our near term macroeconomic uncertainties.

We have not made any specific adjustments to our guidance at this time, but as Tim mentioned, we are working to understand how this may impact our business and recognize that this is a dynamic situation that we are monitoring closely.

If I add onto more personal news.

After being a part of his work for the past 10 years I've decided to pursue new challenge at another company starting in April.

Incredibly proud of the company, we built here I feel the teams we have in place our best in class.

I feel good about the progress we made in our business transformation over the past year.

Teens.

Your leadership and vision has helped shape the subscription economy.

Division you painted out to dinner with me 10 years ago is not only come to fruition, but denso faster and wider than anyone could have expected.

As evidenced by our Q4 performance I think those wars better positioned than any other company to continue to be the leader in helping companies go through the subscription journey.

Zohr will always be a special place and I'm incredibly thankful to my team the Ceos directors and shareholders. As this has been a journey for life.

Tina I am most grateful for you, bringing me on this journey and Trust me to go through this journey with you.

I have all the confidence in Zurich and the team here to continue being the leader and subscription management and realizing division of the subscription company.

And with that we're happy to take your questions operator.

At this time I would like to remind everyone to press star one if he would like to ask a question.

First question comes from the line of question Marin from Goldman Sachs.

Hey, Thanks, so much for taking my question.

Let me personally just wanted to ask about rent from another reason, but keep customers last quarter that you talked about going live this quarter.

See anything you can say more about other customer wins, there and how we should think about that impacting your models. We go throughout the year because I know in particular, you talked about that acceleration in the back half. Thanks.

Yeah. So.

As you know we've been on this journey to deliver the integration between these two products and and that has gone well over the last few quarters and so we're under deployments deployments going well, which started into the new fiscal year. If you will pass the Q4 go lives and so now customers really.

Coming live and giving US just increased confidence that the integration is solid and we do expect to turned back on the up sell motion.

That's great and then yes here at least the shape of the year.

Okay.

I think an acceleration in the back half and I think one of them.

Yes.

Got a speed bumps in the quarter was was it was churn if they get a customer churn picking up a bit. So can you just talked maybe keep our question talk a bit more about what caused that that churn and then also.

Your visibility and confidence he ended acceleration in the back half and what implicitly are sitting for churn there. Thanks.

Yes.

We flagged is it was it was a minor uptick it was really do we had a couple of customers are required by larger companies right. These larger companies might have in another solution and we have a really really sticky product in general, but sometimes a larger companies do decide to move the systems onto onto their own internal.

Items. There's also a couple business failures to me. Some of these builds failures are the ones that you actually seen in the press and so it was really just just a confluence of some of those events, but we feel really good about position because of the core product is fundamentally a very very sticky product.

Great all.

And all the best Tyler and I hear your new opportunities. Thanks, so much.

Yes, absolutely thanks, Chris.

And your next question comes from the line of Brent Thill from Jefferies.

Hi, This is loves soda on for Brian So.

Thank you alone.

Yeah, Hey team having to.

Just wanted to ask a quick question on Corona virus, maybe the macroeconomic impact I know that given part of your pricing is based on transaction volume.

Let's say there was an impact macroeconomic impact and transaction volumes were to slow down you do you guys have any comments on how that would impact.

Revenues going forward.

Yeah, I think love I think.

This is such a new state for us for so many of us right and.

Those of us around 2008 trillion remember market, gyrations, but but but they've grown a virus thing is going to be something new.

We have customers.

Where you can see that that this is actually helping them.

Right more people staying home more people actually subscription services, but we have the other factors well and so I think I think it's just too early to tell I think what we're focused on right now is making sure that we continue to.

To execute the company right. We continue to serve our customers rate were feel really good about our ability to obviously keep the service up and running right. That's not really impacted so we want to make sure that as we shift to moving more employees at home. The good news is already distributed workforce to good use as we've already adopted a lot of the technologies that companies are using.

This is certainly a situation that we're monitoring along with everybody else just so just because it's so new.

But it got it and congrats Tyler on.

New role I'm, just wondering I mean in terms of the transition.

Yeah.

I know you have someone sitting in.

For for the near term, but I guess, how far along that you and the search and.

How soon can we expect sort of news for new CFO.

Yes, I'll go ahead and feel that the good news is Tyler has built an amazing team.

Incredibly strong leaders and so we will be creating a and office of the CFO. That's led by one.

The leaders, we're fortunate that Ken Goldman who has been a major advisor to US there for a number of years had been on the board. Since 2017. He will continue to play a very strong rolling we have.

Retained.

Leading.

Search firm to really help us running right process right, whether it's an internal candidate an external candidate we want to make sure we wouldn't run the right process and just get a fantastic leader to step into the tethered big shoes.

Got it yep.

That's all from me, Congrats Tyler and I'll pass.

Thanks, a lot.

And your next question comes from the line of Terry Koala from first kind of life.

Hey, good afternoon, and thanks for taking my questions I'm wondering if you could talk a little bit about in the quarter and then moving forward, whether you saw any elongation of of the sales cycle or material changes in Europe in your close rates.

Well when I look into Q4, we actually saw on our win rates improving our sales productivity numbers improved and so we feel fairly bullish about the business at the question is really related to.

What's going on right now.

At the travel bans and so and so forth I think it's two new I think we're all taking your day by day.

Great. Thank you.

Your next question comes from the line up and slot ski from Morgan Stanley.

Hey, guys.

Can you hear me okay.

Yep.

Okay Alright perfect.

So a couple of questions from my end.

First on.

Just the way you think about guidance for next year I realize everything is still still really new but as far as how you approach the you're guiding setting methodology.

Between Tyler, leaving and all the uncertainty out there.

Did you consider potentially maybe a widening out the ranges.

For your guidance.

Beyond typical in order to account for the uncertainty or maybe you know just.

Tweaking some of the close rate assumptions or at least maybe the timing of those of those.

Deal closings.

Hey, sensitized I'll take that one I mean, when you look at the kind of macroeconomic environment right now krona buyers and all that we said we haven't actually taking into account any changes based on that because it is too early in the team mention for Q1, you know what we'll look at those sales cycles I think in general, though if you look at what we've been talking about.

We made a lot of changes last year as we brought Robbie onboard the execution was really really positive in Q4, but it does take time for everything to filter through and we said I think a lot of the changes and the execution, you'll see it in the numbers coming in the back half of the year. So.

We give guidance based on our best picture of the business today I, we haven't changed that.

Going into this year based on what we see.

Got it got it okay and just similarly on.

On the implementation side of the business from services business, considering that you guys do have a fairly heavy lift from an implementation standpoint, how are you guys thinking about getting getting customers up and running.

With that with some of the travel restrictions around getting people on site to do the work.

Yeah.

I would say we've looked at that pretty deeply across the entire parts of the company in terms of making sure that we can continue to serve our customers whether that's on the technology operations side, certainly on the sales side the engineering side.

You know, there's two parts of the world that that's during the current versus earlier and we've had a love experience, making sure that that.

Working how does impact productivity, bringing customers live is the same thing we already do actually a lot of that work.

Absolutely.

Right, there's certainly upfront and the blueprint phase that we're looking at.

So let's make sure we can do that we have a fairly good methodology. It that's what's allowed us to really have a consistent pace of customer go lives.

That knowledge, it's pretty well documented in right now where the process of making sure that we're training up or partners and educating them. So that we continue to get levers leveraging the organization, but at the top level. Your question is is we don't think that working in home is going to slow us down in terms of our ability to deliver for our customers.

Got it and maybe just and I am I apologies. If this ready was was asked and you guys answered, but I'm just jumping between a couple of calls, but when you think about.

Growth potentially accelerating into into the mid Twentys by fiscal 20 to one of the puts and takes two to get there is that some maybe a slippage out of this this year, maybe you know some of our longer deal cycles out of this last year closing in a next year or is there something when you more fundamentals.

We're seeing in the pipeline.

No no there isn't really fundamentally.

We believe that we're in a fantastic market rates, it's a long term market none of the fundamental stories intact, what we're really trying to to make sure we emphasized as more and more the subscription economy marketplace is not just these these fast growing disruptive companies rate. The these companies.

Zoom employer cyto too that we referenced.

We're just seeing a lot of traditional companies outside of high Tech.

Moving to the space and so the initiatives that were really executing our to make sure that we continue to land.

These large company logos that ultimately provide incredible expansion potential and so we highlighted the SNCF example, as a couple who started working with two years ago.

I had an amazing launch that that there was a huge success and now the shifting the entire business over two to two to us and so those initiatives in Robbie being 90 days into two to the role.

Having a say look Q4 and the performance we saw shows that the thesis of the marketplaces Intacta shows that we continue to have the strong technology lead.

The sales cycle it shows the value of strong sales leadership.

But you know Robbie's also new we're entering a new fiscal year and we want to make sure right. There is time for for all the initiatives to really take hold and so it makes sense really that the leverage in the business momentum that we'll see from these initiatives is really more in the back half the year it'll show up in revenue numbers right given the subscription base.

Business model.

The middle next year.

If you look at that what we really kind of worked on this past year and we argue we paid the price for.

Which was kind of go to market leadership uncertainty.

Yeah, our rep pro and billing integration right and really starting to put together our partner focus.

We invested throw out six months, we're starting to see the light.

Some of these things, it's still going to take some time, but these are things that give us confidence as we move forward that.

The hardest parts are behind us.

Got it very helpful. Thank you guys.

And once again, if you would like to ask a question. Please press star one on your telephone keypad.

That's star and the number one.

And there are no further questions at this time.

Great. Thank you so much for joining us and we'll talk to you next time. Thank you.

Good bye.

And this concludes today's conference call.

Thank you for your participation.

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