Q4 2020 Livexlive Media Inc Earnings Call
And welcome to the life by like immediate Q4, 2020, <unk> earnings Conference call.
All participants will be in listen only mode. So do you need assistance. Please open the conference specialist bypassing the Starkey color Vijay route.
After today's presentation, there will be an opportunity to ask a question.
Ask a question you May press Star then one on your Touchtone phone.
Withdraw your question. Please press Star then to please note. This event is being recorded.
I would now like to turn the conference over to Emily Greenstein Investor Relations. Please go ahead.
Thank you good afternoon, and welcome to why buy like media business update and financial results conference call for the company's fourth quarter fiscal year ended March 31st 2020, joining me on today's call I, Rob Alan CEO, and chairman and my Symmedrx CFO.
I would like to remind you that some of these statements made on today's call are forward looking at our based on current expectations forecasts and assumptions and involve risks and uncertainties. These statements include but are not limited to statements regarding the future performance of the company, including expected future financial results and future growth and the business actually.
Results may differ materially from those discussed on this call for a variety of read that please refer to our filings with the FCC for information about factors, which could cause our actual results could differ materially from these forward looking statements, including those described in the Companys and <unk> annual report on form 10-K for the year ended March 30.
First 2020, and the company's other SEC filing.
You will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today and the company's earnings release, which is posted on our Investor Relations website, <unk> IR dot why that five dot com and we encourage you to periodically visit the Companys IR website for important context.
Following discussion, including responses to your question contains time sensitive information and reflects management's views as of the date of this call June 18, 2020, and except as required by law.
Undertake any obligation to update or revise its information after the date on this call.
I'd like to highlight to investors that the call is being recorded we're making it available to investors and the media via webcast a replay will be available on our website in the Investor Relations section shortly following the conclusion of the call.
Additionally, it is the property of the company at any redistribution retransmission or rebroadcast of a call in any form with other companies expressed written consent is strictly prohibited no. Let me turn the call over to Rob Rob.
Thanks, that's probably a good afternoon, everyone. Thanks, everyone for joining us today I want to start by saying, we hope everyone has been able to stay safe.
Help me during these difficult times since we last reported a lot exchange between accommodation of Colgate and the social unrest surrounding racial injustice, there's been a meaningful went back online music industry.
Today, we announced your teeth isn't official.
Well I bought last holiday starting next year, it's important that.
Do you ever come together as community and support each other and line by line is doing just that.
During these unprecedented times when colitis shutdown live music concerts and festivals libel life has become one of the most important go to screening platforms like digital music festivals and performances.
Today, we were full stack live streaming platform the ability to monetize content in multiple ways. The multiple times as cobot shutdown live music events, we quickly in successfully.
Fishing Lubbock slide as the leader in music luxury me in the first step calendar 2020, I'm proud to say, we have already screen more music events, the more people with more artist.
All of calendar 2019.
As an artist worst flopping my life provides odyssey.
So I went to watch now noughties.
Allergy production distribution marketing sponsorship with the ability for the first time that motorcycle class globally across all digital platform problems. We originally launched pay per view.
Exciting and important new initiative for why buy lives, where we will exclusively produce and like screen Carty edge full month pay per view concerts.
We are screaming paper view as a natural extension of our longstanding expertise streaming the largest 10 cold music festivals, the Super bowls of music rock in Rio maybe see jazzman chose to get around the world.
The platform allows slide by lives to structure ready strip share agreements with the artist be a digital tickets.
Dan Chipping digital media bleach.
Merchandise shells and sponsorship.
As live music slowly Realpage will be position is the first and only platform driving sponsorship and ticket sales for both did join lives.
We will be announcing.
In the very near future significant additions to our pay per view lineup. We're proud to say all first smaller banks drove over 8000 tickets at an average of over $20 biotech.
Last quarter, we acquired react pretty much club concert that's more promotion comedy with access to over 250 live events per year, including spring Awakening.
The largest CDM festival in Chicago.
Our next calendar revenue was approximately 15 million.
Although the Todd he acquisition react just prior to cope with it was not part of the plan, we quickly pivoted our management team yeah.
Doing expand the artist outreach team working on digital only music events as opposed to.
Hi, this events, which has worked out extraordinarily well with over 200 aboard 1300 artist script today coming from the Chicago too.
Another recent important milestone was the announcement of our planned acquisition of podcasts one.
We expect to close enough.
I guess, one recorded gross revenues of 27, and a half million in calendar 2019.
Acquisition knobbly rounds out it complements our music video contents that significantly diversified revenue model.
A large advertising going in to complement our existing subscription business.
Currently we inherited herrick podcasts ones.
Spirits advertising to we tripled the size of our current team today.
And maybe most importantly, as we bring podcasts ones chairman and founder Northern pass it onto the lie by lives Senior management team normally consider an icon pioneered the radio business. He was the founder Westwood, one which he built the largest radio network in America with a 40 half billion dollar plus valuation of the public markets.
What I believe to be a testament to the value of why buy back shares norm agreed to an all stock transaction.
Podcasts, one generated a staggering 2.1 billion downloads out anyway. It produces over 350 episodes per week, it's library of over 300 podcasts, including shows from Adam Corolla.
A cold chain spouse stone coax, the Boston Wrestling, Shaquille O'neal Lady Gaga T.I., Mike Tyson.
With the acquisition we have significantly.
Usually our opportunity well sell we cross promote to respect of subscribers advertisers. This sponsors as well as provide a collective artist.
And on Air Count with expanded platform increased their social media and online presence.
Since announcing the planned acquisition, we have already collaborated on to a mutually successful video podcast without it grows podcast one show.
This unique livestream and video stream podcast, Gordon, which has been coined a box yes.
We added the Adams performance. These two favorite artists were stream Toby to win a half million people on this two shows.
It would be looking both to be looking for both new.
Really pay per view concerts as well some existing additions to our world class podcast broadcast line.
In addition, we remain optimistic with respect to additional acquisitions or could add new are complementary revenue verticals.
Why by life today is a different companies and it was six months ago at the time to focus on ways to generate an increased digital traffic today, we are laser focused on monetization.
Bottom line and what has become an enormous traffic an audience and branding of blood.
Our platform now stretches across five.
Fast growing industry segments audio streaming pay per view Oh TJ.
Yes and of course why did on screen.
Each of these segments had the wherewithal to grow as a standalone business as well as be part of an integrated model, where we can monetize the same content.
Many different times in many different worse.
Like the major League media networks, we can now produce screen curated original premium content, having added new monetization features for artists, including pay per view virtual ticketing virtual merchandise subscription digital doors and tipping.
Mhm, numerous new and potentially significant revenue opportunities, we now squarely focused on driving revenue positive EBITDA.
Since April or paid sponsorship has tripled across our platform and we have wide screen over 30, why music events was 16 million views versus 70 million total last year featuring more than a thousand of the biggest shortage in the world.
Including Selena Gomez Liz's, John Legend Technology, French, Montana Green day, Little babies thing geisha.
Our management team aboard a loaded with industry leaders, who have built one executed and exited.
Multibillion dollar companies.
Waterborne numerous important management additions is our president and my partner government Mccormick Jeremy joined led by lives in July 2000, Nike, We previously Randy or wells Global as global President where is the key player in helping.
You sell AOL to rising 40, ethylene quieted that he was head of digital for Viacom's Music group were Yelp MPB build the user base of over 100 million followers, we feel we're falling right most footsteps.
We also added Bridget Baker to aboard.
Outbound CNBC Bridget was previously president of content distribution of Nbcuniversal. She is involved in acquisitions integrations toady over $50 billion, including Bravo, Telemundo bendy, Universal oxygen Comcast and as you hear more and more about distribution you did hear more more opportunities.
Chris expand our technicals across those distributors around the world.
As I said 2020 was a transformative year for why Bella we're focused on the following four pillars.
[noise] original content.
Programming subscription pay per view advertising and sponsorship.
Starting off with original programming.
We created a wonderful kind franchise called my by lot presents which is my home to yours, we showcased amazing artists like cases, Kaiser and broke baby Banksy discovery of Amazing artist, we introduced a new premium product as well.
Plug and play which allows artist <unk>, a large screen kit, which allowed artistic instantly plug into its platform and simulcasts to all why buy lives properties.
As well as to the auto <unk>.
Home pages on the social media as well as to Facebook, Instagram Twitter and Twitch.
We also expanded a uniquely exciting partnership with Sinclair and start.
The largest regional sports network.
As AD supported screening service allows us to produce a slate of original program at the newly launched music channels and slower start the channel will feature a life zone in the future, which started will spots where key events supporting our goal and acquiring acquiring audiences across platforms.
Lives Zone is our sports center music or Red Zone, right all affected news platform.
Well, we like to refer as the Sports Center music franchise has increased traffic in its significantly expanded our original programming slate.
More than ever lives always help when pop culture artists and fans together.
Sport fashion music, we sports and we'll continue to grow and you'll see more and more partnerships across a wide world combining together with a lot about life.
My body line continues to extend distribution partnerships and BTB deals around the globe.
We have had an amazing eight year relationship with Tesla as many of you know we're an exclusive partner.
Whereby lives pre installed and every new Tesla car sold in America Tesla is running production up and our partners remain strong.
We also in 85 automobiles as well as across major carriers, but rise in sprint and T mobile.
And as we publicly said previously.
We're very close to expanding our offerings to the rest of the globe and expanding our partnerships.
With the labels and the publishes globally to be able to to be able to handle in service customers b to b customers around the world.
We have apps of course, Roku, Apple TV and Amazon fire have partnered with Youtube Facebook Twitch, Twitter 10 cents.
Yeah, we motion.
As well as a global screaming up across 40 million Samsung Pvs.
So many ways to monetize our content through these various distribution channels of course 35 platforms, we have the ability to use.
Basically the same talking over and over again book audio and video with mobile carriers automobiles and OLTP can monetize.
The same talking over and over again.
Sponsorship side, we're bringing brands.
Bands and fans together.
With companies like T Samsung and likewise key partners sponsorships of tripled in recent months, including significant national sponsors.
Now what the term to what we've accomplished since April 1st and what lies ahead in 2021.
We expect to collaborate.
With additional high profit profile celebrities in the future across all the pop culture.
Adding to a lineup of shocking T I and Adam cool well be across podcasting bought casting music. So we'd have gone well continue to speak expand those relationships and bringing deeper into the lie by life family.
A big part of our strategy is building podcasting bypass franchises with highly recognizable names their existing fan bases loyal listeners.
<unk>.
We produced and aired.
I won't franchise.
Our coach Sheller, you see a rock in Rio digital.
Called music Lips, a global life. She festival featuring 130 artists, we partnered with tick Tock and a number of incredible artist unite a global village with music, we really flip the switch with this one streaming artist performances from the living rooms backyard rooftops Coresite in private studios.
Festival broke all of our streaming records with an unbelievable 50 million views and 179 countries <unk> garnered a groundbreaking 5 billion video views on tick tock with an average of over 200000 concurrent users during the entire 48 hours screen.
That's a larger audience.
And Coachella, where do you see a rock in Rio has had a live event.
In addition, after the enormous success of music lives, we launched a subsequent franchise called music was on.
A weekly multi John are screaming series, where artists promoters and cross post across their social accounts before and during why performances drive audiences were averaging over a million viewers every Friday night.
A couple of weeks ago, we partnered with global Superstar DJ cargo to live stream is virtual our vessel.
Debuted its new Amble album, and Garden 5 million views. The lineup was amazing SAP Brown, Chelsea Caitlyn, Jimmy Buffett, One Republic, and we showed a broke <unk>.
<unk> Kobin 1.0, as we slowly come out of.
This very difficult time, one Republic performed for the first time inside of the theater.
We continue to extend our footprint with our Iheart partnership, including recent events just as Elvis Duran stayed home ball and rise at New York Just last night last last month, we extended our life screaming partnership through 2022, which include.
More than 25 events.
We have exclusive international rights to distribute their top events, the Iheart music Festival and Iheartradio jingle ball.
We are the first copy ever crossover Lliving digital.
Which we've been doing so fourq last four years by streaming rock in Rio and other than that that's globally.
Going forward, we're actually putting on live events.
Like lie by lot present present with a digital element. Our next stop is going to be ticketed eventually venues with paper viewing ticketing digital the aggregation of the most exclusive pop culture music event and the ability to not only lunch channels with a full slate of original content, but also produce.
And own eventually quick franchises and drive new revenue streams has created a new new and unique opportunity for sponsorship and advertising to reach millennials.
Distribution sponsorship.
Advancing strategic distribution partnerships and sponsored remains a key priority.
[noise] light at the gate, we partner with Facebook I feel spend used to lives through music lives through the well this introduced our content to a whole new set of global sense with the addition of back it was as well as a partnership distribution sponsorship with tick tock, we already on track to more than Triple R. sponsored revenue during the June quarter.
This month, we released a new unified audio and video Smart Tvs.
Experience on Samsung TV, Apple TV Roku Amazon fire to follow soon reaching an estimated 90 million monthly active users yeah really offers that one stop destination.
Audio video.
With that I'm going to hand, this off to Mike Symetra I'm, Mike Nike.
Great. Thank you Rob.
We ended our fiscal 2020 with strong results in line with her higher annual financial guidance.
With 38.7 million in revenue.
Adjusted operating loss of 12.6 million record K.P.I. fiscal 2020.
Including 25% <unk> paid subscriber growth year over year live streaming 42 events to over 69 million viewers.
Moreover, we had another record quarter in Q4 thousand 20.
During Q4 revenue of 9.9 billion.
The adjusted operating loss of 2.2 million in contribution margins of two points you like.
Given this is our fiscal 2020 earnings call.
First portion of my prepared remarks will provide commentary on our fiscal 2020 performance.
The latter part on Q4, 2020, <unk> financial results as compared to Q4 2019.
More specifically on fiscal 2020.
Fiscal 2020 consolidated revenue was 38.7 million up 15% year over year from 33.7 million in fiscal 2019.
Due in large part to our paid subscribers year over year.
Offset by a slight decline in our advertising a licensing surfaces.
Ending fiscal 2020 paid subscribers grew to 849000 or by a net credit and 69000 <unk> ending paid subscribers in fiscal 2018.
And its fiscal 2020 with 93% of our revenue from subscription and 7% from advertising and licensing.
Fiscal 2020 contribution margin grew 136% year over year, the 5.9 million as compared to 2.5 million in fiscal 2018.
A year over year improvement, a 3.4 million was driven by the gross or paid subscriber base.
So with margin improvements from our subscription service is approximately 34.2% in fiscal 2020, that's compared to 32.1% in fiscal 2018.
Offsetting this were spending of approximately 7.3 million to livestream produced 42 events in fiscal 2020.
An average of 174000 per event.
And improvement of over 50% year over year.
I comparison.
Got it totaled 8.3 million in fiscal 2018 to produce 24 beds or at an average cost of 345000 purpose.
The year over year improvement or average cost curve. It was largely driven by cost efficiencies realized from the scale of our business coupled with an increasing the number of co sponsored events with partners such as I heard radio.
Heading into fiscal 2020, we expect to realize more cost efficiencies across our life production as we augment.
Two more digital only take or give us.
2014, adjusted operating loss was flat year over year at 12.6, though.
Now I would like to discuss the financial performances in Q4 fiscal 2020 versus 2018.
Q4, 2020 revenue was 9.9 billion.
8% year over year for 9.2 million in Q4 2019.
Through the year over year growth and paid subscribers offset by a slight decline in advertising in licensing which was partially impacted by coated 19, beginning in March 2020.
I will get deeper into revenue drivers along with the coded 19, paralleling impact across our business later in my prepared remarks.
Q4, 2020 contribution margin.
2.2 million was flat year over year, despite an increase in revenue over the same period.
This was largely driven by a onetime correct. He entry booked in Q4 2019 to reduce cost to sales and properly state accrued royalty obligations, but your point 4 million.
As a result of this correcting and entry our subscription business generated approximately 38% contribution margin in Q4 2018.
Excluding this correct and then entry the contribution margin would've been approximately 33.7% or approximating Q4, 2020 contribution margin of 34.7%.
Q4, adjusted operating loss was 2.2 million or slightly higher versus 1.9 billion in Q4 2013.
Driven by higher overall corporate costs of zero point Sixmillion from the addition of new personnel in Q4 2020.
Versus Q4, 2018, including a new president and other initiatives to support the overall growth of the company.
Offset by zero formulary and improvement in music services driven.
By reduced marketing spending in Q4 2020 versus 2018.
In addition, we also capitalize approximately 0.6 million of internally developed software costs in Q4, Q4, 2020 versus 0.9 billion in Q4 2018.
No I would like to discuss the Q4 financial performance across our music operation in corporate divisions.
Turning to music operation.
Our music operations consists of our audio and video services.
Livestream operations, including sales marketing and product development and to a lesser extent certain general and administrative costs.
As I go to discuss our Q4 revenue of 9.8 million was up 8% from 9.2 million or Q4, 2018, largely due to growth across our paid subscribers year over year.
During Q4 or music operations generated 9.2 million subscription revenue as compared to 8.4 million in Q4 2018.
Driving this improvement was a 25% increase and get paid subscribers.
As a reminder, we ended Q4 with 849000 paid subscribers up 169000 from Q4 2018.
The annual net increase in paid subscribers was driven in part by the strength of our PDP consumer driven business, which includes Tesla and also from the increase net additions across our consumer cases subscription services.
Note that during the latter part of March 2020.
The onset of decoded, making a pandemic in the U.S., our subscriber growth began to slow across both our direct to consumer and beauty be partners.
We expect this trend to continue at least through the first quarter fiscal 2000, 2021, which is reflected in our fiscal 2021 guidance.
Q4, 2020 contribution margin of 2.2 line was flat year over year. Despite an increase revenue over the same period largely driven by the previously discussed wartime correcting entry booked in Q4 2019 reduce cost of sales.
During Q4 2014, we incurred approximately 1.2 million in production costs.
It is 14 events at an average cost of approximately 86000 per event.
Representing a 68% improvement any average cost per event when compared to Q4 2018.
As previously discussed we are continuing to route realized cost efficiencies.
Production as we scale, our live events and we foresee this trend continuing through Q1 2020 to 21.
Comparatively we incurred 1.3 million in Q4 2018 to produce I'd life events at an average cost of approximately 268000 per that.
Q4 music operations adjusted operating loss was 1.1 million as compared to 1.5 million in Q4 2018 a.
A year over year increase of zero point for like it was largely driven by lower marketing and operating expenses to support the various person initiative and events in Q4 2020.
Offset by the previously discussed before and in turn around software cost back that caused it.
Hey, Rob can you put put yourself on do you think here in Q4 2020.
Turning to corporate.
Our corporate division principally consists of general and administrative functions, such as executive finance legal and other areas that support the entire company, including any public company driven initiatives and supporting functions.
[music] for corporate adjusted operating loss was 1.1 million as compared to 0.5 million Q4 2018.
The increase was largely due to higher personnel costs, coupled with higher overall professional fees to support the various growth initiatives throughout fiscal 2020.
Now I would like to discuss the trends for operating expenses year over year.
Excluding noncash stock based compensation amortization expense depreciation and certain nonrecurring operating expenses of 5.7 million in Q4 2020.
6.6 million in Q4 2018 shoot for 2020 operating expenses were 4.4 million, which were slightly higher versus Q4, 2018, a 4.1, though.
The Q4 increase was largely due to 0.5 million higher corporate general expenses. The result of increased personnel and professional fees, coupled with a decrease in zero point Threemillion and internally developed software capitalization offset by the previous heat and discuss near a point 4 million an improvement in music services, partly due to lower mark.
Cutting expenses.
Turning to our balance sheet.
We ended Q4 2020 with cash restricted cash of 12.4 million slightly down from ending cash unrestricted cash of 13.9 million at Q4 2018.
A year over year jury decrease was largely driven by net proceeds from financing a 5.8 billion offset by net cash outflows from operations at 4.9 million and investing activities at 2.4 million per year.
The year to date net cash usage from operations is largely driven by early our adjusted operating loss offset by net cost savings in our working capital driven principally by active management of our payables throughout fiscal 2020.
Now I would like.
To update you on a few additional items.
In May 2040, we acquired podcast one.
As a reminder, podcasts what is one of the leading leaders and podcasting producing more than 300 podcast per week generating over 2 billion downloads annually.
Okay older Your 2000.
19 revenues were 27.5 million, Chris really driven off of advertiser.
Assuming we acquired podcast one effective April 1st 2018 pro forma revenue for the entire fiscal 2020 would've been approximately 66 million.
Historically podcasts world as was growing its top line at 20% per year gross margins were slightly better than our subscription services, which are mid 30% today.
We acquired podcast one with the issuance of approximately 5.5 million shares and expect to close sometime in July which is three quarters of our fiscal year.
We are excited to have northern pass joined our team who also become our third largest shareholder upon closing the acquisition.
As of March 31st 2020, we had approximately 167000 warrants outstanding and approximately 4.2 million or potential common stock underlying our secured debentures and unsecured convertible notes.
We ended the quarter with approximately 59 million common shares outstanding.
In April 2020, we obtained a $1.99 billion award under the SBH Paycheck protection program.
Which we plan to file for 100% forgiveness in Q2 2021.
As of today, we have a total of $8.9 million unsecured convertible debentures outstanding.
Lastly, we amended our credit agreement our secured debenture holders in Q4 2020.
As a result of this amendment we required to.
Full year fiscal 2021 guidance is as follows.
Please note. This includes three quarters of the impact from podcast one assuming a plan acquisition closes on July one 2020.
Revenue of 61 to 67 million.
Representing a 65% increase year over year at the midpoint.
With a mix of advertising revenue to be between 35% to 40% of our consolidated fiscal 2021.
Annualized contribution margin of 30% to 35% of our revenue.
Improvement over 100% year over year versus fiscal 2019.
The adjusted operating loss of 2.5 to 5 million.
Representing a 70% improvement year over year at the midpoint.
With this we are forecasting our combined music services segment to be profitable in fiscal 2021 with only the corporate overhead adjusted loss between four to 5 million.
Capital expenditures, which principally include internally capitalized labor costs in the range of three and a half the 5 million.
And our expectation to live stream over 100 music festivals and events, an increase of over 140% year over year.
Now I would like to provide some color in guidance on Q1 2021.
Q1 will include one a full quarter impacted covert 19, which include the loss of over $8 million and forecasted topline revenue.
Pruning all live on premise music events, such as sprinkled such as our spring Awakening festival in up to 50% declines in our programmatic advertising revenue.
Two volatility and ending subscribers given the current lockdown on production initiatives within some of our larger customers. We do not expect adding subscribers to grow substantially in Q1, 2000, 2021 as compared to historical growth.
And three management led caution as savings initiatives in Q1, including payroll and operating expense reductions totaling approximately $1.5 million savings in Q1 2021.
Factoring all all this we expect the following in Q1 2001.
Revenue between 10.4 to 10.7 billion, representing an increase of 10% year over year at the midpoint.
And adjusted operating loss between 0.20 point 5 million, an improvement of over 4.2 million or 92% year over year at the midpoint.
Up to 40 live events and 70 million live U.S matching what we did for the entire fiscal 2018 in sponsorship in excess of $1 million revenue or three times greater than any quarter since our existence.
Lastly, I would like to conclude with some final thoughts.
Fiscal 2020 to 21 will be the turning point in our evolution.
Showing massive financial progress diversification in our revenue mix and radical improvement in our bottom line cost structure.
We are laser focused on strong pathways towards growth and profitability and execution.
That concludes my prepared remarks, I would like to turn it over to Rob to final thoughts and then we can open the line up for today.
Rob.
Hey, guys.
To wrap up the fiscal 2020 was a year of incredible growth and progress for line by line.
Cobot is proving to be a massive accelerating for streaming.
Goldman Sachs.
Recently raised their estimates on the back of faster than expected pain screaming adoption and now expect extremely market to grow.
Over 12% choose to reach 75 billion by 2030.
As well as global paid subscribers exceeds 1.2 billion in 2030.
Libel our platform is perfectly positioned in the center of the storm of the music ecosystem with audio live events streaming live events pay per view podcasting and over the top.
Along with production. We believe these present five enormous opportunities to create both substantial revenue and shareholder value.
We've created a screening music and content stack. Unlike any other companies with audio video lighting physic, social sharing distribution physical and transactional.
Thus far growth has largely been based on subscription mis revenue.
We were principally focused on generating traffic an audience and building brand awareness now we are focused purely on monetization driving revenue and generating cash flow.
We are adding a meaningful advertising component, we podcast one and the scalable traffic is now tracking national sponsors next year, we expect 40% of our revenues approximately to come from advertising sponsorship ticketing with the remaining being subscription.
At the core.
We are technology company.
With a world class management team that enables audience to get the best suit mouse anyone oil we've built the competitive mode with great technology, new monetization patch ownership of key assets.
In a large subscriber base.
Fantastic Global partners.
Original programming and Curations and the lowest cost of content I've ever seen at under $20000 per hour for AAA content.
Large scale live music events will not come back needs for this year.
Yes, and perhaps even till the middle of next year.
We have reached a pivotal moment in the music industry streaming numbers are comping those of television broadcast in order succumbing to help us navigate the new world recognizing that we have the tools creative ability and great partners. During the time of on precedent could change.
My by lives is well positioned to win not only today's new normal of music, but when live music comes back it's going to come back bigger than ever to pass rules would turn bigger than ever.
We have radically improved our revenue Miss.
And profitable outlook.
We are still just the beginning stages of our story is X the intend to grow both organically and through M&A stay tune to lie by lives.
And stay healthy.
We look forward to do any questions anyone has thank you very much.
We will now begin the question answer session ask the question you May Press Star then one on year Touchtone phone.
We are using speakerphone, please pick up your handset before pressing the keys.
Withdraw your question you can press Star then too.
Our first question today comes from Ron Josey with JMP Securities.
Great. Thanks for taking the question, maybe two for Rob and one for Mike on just guidance. So Robert the 60 million live used since April 1st I'm wondering if you can impact those are talk little bit more about those viewers are they new to the platform and our home how often are they coming back given the franchises that you have.
Offer with music lives on and everything else. So that's question one on just the $60 million my views. How often are these users coming back in are they knew and then you mentioned also Rob international expansion with a partner.
You just talk about maybe any insight on timing or how we might sort of understand the potential benefits of going international there. So thats two for Robin then Mike just on guidance I'm very helpful for the details on the full year in one Q.
Just help us understand a little bit more on how you view.
Advertising and sponsorship revenues sub revenue and then how react to present sort of is included in that and and given podcast ones included in guidance.
Any reason why that wouldn't close.
And then lastly, you know it looks like.
I'm sorry for the long question, but looks like edge adjusted operating loss.
Is much hot as much lower in one Q, but then.
I guess it last sort of gets higher if you will as a year goes on so talk about why and then any insights on why cash with restricted cash coming up long question, but great to see the momentum here and hopefully you can help there. Thank you.
So lot of lot of questions in one I guess ill start with I'll start with the audience right. So the audience on the mix of the audience is really unique in that the costs. We continue to as we talk about Ron from day one.
Most of our traffic is going to come from the artist themselves. So because record across all John mentioned music.
Right and we also from Selena Gomez to two to the Rolling stones. During this during this quarter right you're going to see traffic from many different demographics. So.
It's been staggering the $60 million is exciting enough, but the 5 billion effectively engagements, which is kids hash tag it and putting a live by live video our brand is getting some real recognition our brand is getting out there. The inbound calls you know as you know we've been we've been chopping wood and breaking Brechtian last four years imbalances.
Coming in and it's really exciting to see the opportunities there and I think you can see more and more of those convert to three subscribers paid subscribers as I said, we sold 8000 tickets and pay per view, we didn't do any marketing Adams. Our first first one of it you're going to see going forward you can see and on a weekly basis going to see as monetize that traffic now there is.
So that's how it is really exciting on the podcast sites Norman Maven jump in here in a minute yeah. I think it was on a plane. So unfortunately I think its claims late we just trying to try to join here as well the deals closing imminently the company's already integrating right. We've already done Adam Corolla, where we've taken adequate alone. We added is to favorite music Sars.
So think of taking a podcasts now turning it to revive casts a podcast via radio show a broadcast via TV show and I'll just take into like a variety show like Jimmy Kimmel, SATA and live we've added those elements to it that really excited in the sponsors are really excited about it.
Mr. Goodyear third one line Gibbs.
The third there was most important.
Hello. This weird you mentioned international was curious how that does it but but then Mike I want to make sure. There's time on just the guidance and unpacking that and just the cash.
This is a critical question on the international wins, what we we told the street is we'll have the the licenses either either by acquisition or internally.
You know Cherry Golden Mike double.
Have done these licenses many times right, Mike Glenn Napster impressively, Randy versus digital and Jerry with CFO want to music. So we have the white people doing this they've done it so many times times I own bizarre previously. So this is an interesting time and intriguing time that we did say there'll be an acquisition that is clearly a very shortly.
Guy So one of those will give us those global licenses and Ron I I know, we head is going with that we think theres a massive opportunity that as you look at spot applies numbers and Netflix.
All of our revenues today.
Subscription side coming to us as we add those licenses as you know those companies 50% of their revenues coming overseas. So we think thats a huge growth opportunity for the company very shortly.
Great. Thank you Rob.
Okay. Thanks, Hey, Ron how are you.
So in terms of guidance and I wrote down your questions I'll try to go in order here.
So you are asking a little bit for the mixes advertising subscription or react how do we think about that I mean, what I previously said that 30% to 35% of our revenue will come from advertising that's can be some combination of podcast one.
On the news new sort of sponsorship.
Thats coming off our platform and there is some cobot impact in terms of our historical programmatic advertising. We've said it will be a little bit of decline there.
As far as reacts I mean, we're the government is basically shut down live events, so our forecast doesn't assume.
Any lighter that's going to come to fruition. This year. So any event that does open up.
Create some additional revenue opportunity, but at least for the foreseeable future in this fiscal year and we obviously that happening.
On podcast, one were anticipated to close in sometime in July.
And we feel very confident.
On on that date, so I don't think anything is going to move variability there.
As far as Q1 in terms of.
The adjusted operating loss as I mentioned before we instituted cost savings in the beginning of the quarter.
That totaled about 1.5 million.
Those are connecting recurring on those cost savings were instituted.
Largely as result of the uncertainty of covert 19 on they included payroll reductions for both Robin myself substantial that went throughout the entire quarter.
And the including some operating expenses and et cetera that we were able to negotiate down.
Those aren't necessarily permanent almond, so youre getting an arbitrary benefit as about 1.5 million in the period that makes us.
It does thank you.
Okay, and then on the cash.
As I mentioned before.
The.
Negotiated.
New terms with our existing lenders.
Which included covenants kind of going forward financial covenants.
As a result of that negotiation, we put up six and a half million of our cash into a restricted cash.
But fundamentally this isn't in a different with how we were operating because there was always a minimum cash requirement at 6.5 million.
Throughout the entire fiscal 2020.
Thats Super helpful. Thanks, guys. Appreciate it yeah you bet.
Our next question comes from Thomas Forte with da Davidson.
Yes.
Great. Thanks for taking my question I had two then I wanted to get back into queue. So the one with two questions I want to ask versus the ones I get asked most often by investors. How are you able to pivot your strategy. So quickly and then what's the worldwide festivals and your strategy when they return in fall.
Yes, so great Craig's question, Tom I mean reality is is we have it really had to pivot tremendously from our core strategy, which was always to deliver digital festivals right. When they started from a live event. We delivered digitally right. We've been able to do is elegantly well be able to.
And enhance our team with the Chicago team, we acquired reacting remember, we only acquired that's a $2 million of junior debt right and that subsidiary we took that team we folded in them with the rest of artists teams, we've been able to secure more talent than we've ever been able to secure.
So it's really exciting to see and again, we've had over 1200 Odyssey. This year, so far versus the 275, we had last year, so four or five times in mountain, it's just going to keep growing and I think this was this is an inflection point that Rome wasn't built in a day and lifespan like this was built I'm not sure they would fully believe.
In this before coded right now to actually realizing the staggering audiences that these are describing as you probably read led this week Bts did a pay per view that drove $20 million revenues. This isn't going away and so I highlight that because as we move to live music enormous huge vandalised music I love attending live music rights.
But I'm also a big believe alive this will come back bigger than ever half a billion millennials attend and Jim why is it 10 music festivals and two thirds of the World goes live music events. So it's going to come back to matter a time when it comes back and excited to see that Coachella announced that they can come back hopefully if everything goes well in April, but thats still long time.
The way and when it comes back we should there you know really with the catcher's Mitt.
Our well costs were a full 360 play from our own live events to our amazing partnerships with live nation like we announced today with June teeth, with so proud to be doing this together with them or partnerships with Iheart, which we just expanded so lucky SPM did in sports we've maintained our independence, we maintained our relationships.
With the only once in the world that are doing this is a day job. There's some people sitting out there in playing with the constant for being competitor, but we have a at least a four year head start.
I think you see really difficult when and where the truly completeness and if you believe in that authenticity around music. We've now can comfortably say that we've created entire channel our platform around authentic live music and I Hope you all get an opportunity to see lives zone or all the components of that debts tie and very much to our business plan.
In the us enemies.
Thanks, Rob I'll get back in queue for more questions.
Okay.
Our next question comes from Laura Martin with Needham Intel.
Hi, guys. Thanks for taking my question.
Loss, how are you at that time, great I'd like you to parse for me help me understand that so I love the sort of Ics loading new revenue streams basis, then great growth drivers that you're talking about Rob coupled with these words that.
We're going to focus on monetization first and foremost wall Street always love that all of which makes me feel like this should be a strong double digit grower.
And then but now might give us any guidance any status while pro forma last year. It was 56 million announced going to be 61 million, that's a 9% grower.
Yeah like rotate to me So tell me what it takes to get this company to 20% revenue growth or more at rising free cash flow is it just hope it needs to and we need to have more AD revenue, which is higher margin like how do I get the numbers to match the storytelling.
Monetization focus on a rapidly expanding revenue.
Like stream base.
Sure.
Value.
Let me start with it Mike I'll give you a 40000 feet Laura Great question right, So Mike and I don't know if everyone hurdle said that operationally right separate from the corporate overhead fly the business now moving into EBITDA positive today right. So that you really exciting really exciting because last year was $12 million to $15 million and.
We lived up we've been building the brand we've been building traffic lights, we couldn't even really start to think about monetization you'll have talked about this lot lower we didn't start to higher Salesforce until December and then three months later, yeah, Toby right well now we've got a massive salesforce, we podcast one rights and now you have a massive opportunity in terms of revenue so well.
Those guidance it you're looking at those previously right. We bought react that was $15 million revenues were counting that is zero today right because the I'm not smart enough to predict what day live streaming is going to open, but let's hope that some component of that piece. While this business comes back second is we're not can't be any component of.
The rocket Reos Bdcs and so on that we've had massive partners in distributors, including 10 cents MTV International and major sponsors and Kieran Samsung we can't count on that because you know the first we've heard of anybody, albeit coach Shellers next April.
So we want to be very very cautious and conscientious in that side and then last but not leases. When you look at those numbers remember podcast. One is we're only county, we're not closing right until July 1st let's call. It ties we closed out why you're only going to get because we're at March 30, Onest, you only going to get.
Eight nine months of the of their revenues.
Does that help.
Excellent answer Mike do you have anything on that.
And then I think you hit it on that but there is co that impact across our business I mean, certainly some of our larger OEM providers like Tesla.
Our impacted and on top of that Rob mentioned.
React.
We are anticipating upwards of 15 million plus in rabbit.
That is.
Kind of put on the sidelines and enter advertising that this is having a little bit at a challenge from a programmatic perspective.
So when you take that and you look at podcasts, one as you know coming in for 89 months of the or not the full year, we actually are growing at plus 20%. According to your excess.
Okay. That's a great answer my other question is hidden assets one of the things Wall Street Undervalue with human capital and you just profit 77 year old.
Juggernaut impact on your board and he is a third largest shareholder. So he is aligned with public shareholder interest could you walk through maybe he's on the call, but maybe it's better for you talk about it. So you can Bragg could you talk about what hidden asset value. He brings in a deal making business like ours that wall Street is probably missing and what can't ways, you can add value specifically.
The income statement, either revenue or lowering costs for you.
Well I think I think you start were born in that is I speak to norm, probably seven or eight times a day right. Why this call is happening from getting taxed to him. So we've already proven even before we close the deal that we could put the number one podcasts are in history that wanted to get a slick records and be able to take that and combined pop culture of podcast.
Right, you know sort of radio show to be a TV show and add music to at sites and more and more of that is coming right. You just sort of today, we just announced deal which killed O'neil Shaquille O'neal podcasts are on our platform will now he's doing a major event with us in a couple of weeks rights do you see a lot of that crossover and then between our teams relationships right.
It's fantastic abnormal nereus relationships.
The agencies, the managers and celebrities themselves why is great and.
I Love that Norman is is when you talk about radio guys know Karmazin Bob Pittman. These guys. You just did just machines at selling right.
A lot of people were upset with me that I'd start selling earlier, but I never thought I had enough to sell yet right and I wouldn't get enough for that I would discount the value will be getting because we didn't upsell Champ why we built this we built this entire platform and $35 million rights. So having norm in there right lifetime I place Guy is a huge huge addition to Tim.
The company and he is actively engaged on on a daily basis.
I would say he is about as enthusiastic and as I've I've seen in because I've been negotiated this deal with them as you know we've talked about this deal from a senior and a half for them.
He is about as is excited about his business and is excited about the crossover in one of the great parts runoff and on top of the have Henderson salesman rights because he doesn't stop selling everyday is is he also has a army behind them. He's got 12 13, guys mine. We have three people in sales. We just went from three to three four to 15 overnight.
And the energy in the room is pretty spectacular.
Dermot just left town existing with their sales force lied everyone's working together to best they can you recorded some on zoom up.
As you can get together, but the sales forces are really excited and as Mike articulate our sponsorship revenues up I was up is up to react from any quarter before and I think you'll see that continue to grow.
Great answer. Thank you very much that's all I have.
Our next question calculated Bain with Roth capital.
Great. Thank you.
First I was hoping we could dive a little further and to pay per view seems like us to potentially a significant franchise monetizing the near term I was hoping to kind of get an understanding of kind of a typical revenue share maybe margins to live acts and get if you have any data points in terms of backend subscriber monetization I know Rob.
Kind of touched on that but.
Those are become auto free subscribers through ticket buying are you already seeing higher percentage of those moving over to subscribers or is it still a little early to to gauge that.
And it's kind of captain obvious right that.
Very differently and work asked a question Ron ask question, which is how does your traffic convert right. We're just learning how it's going to convert when you get sold into the funnel right, becoming a great. But you know the one thing for sure when you're getting a member of the credit card.
There are a lot closer to your heart right and you sold when they convert when they come in as a subscriber.
Buying it for an average of $20 right in our whole offering right for the year right is only is only 40 $50 you get really excited about what that penetration to be in what percentage could convert if you covered a 20% male digital lightning rod.
Absolutely and on the revenue sharing margins just doing an idea kind of looked at our model nuclear without a little bit.
I'm, sorry, Dave said, one more time.
On the revenue share just again on pay per view my question, Yeah, I can take that Rob. So so hey, Hey, David we're very early stages.
In terms of this model and so.
In terms of revenue share.
As were building there. This is about building in the early stages and it also be very bill adding on the artist.
But just to know me a meaningful amount of economics are going to come to us because not only are we streaming it across our own platform. We're also producing.
So there's different ways in terms of monetizing, but it's still too early to give sort of indicative terms.
Okay. Okay, and then can you speak to podcast one like compensation on the talent from one can can start for you to attract and retain talent you mentioned those some of those towns will become franchises and have a themselves and then im could get a sense as to how advertising revenue and the power.
Cast one.
Entity has held up as cobot hit and are you seeing some pent up dollars in advertising fuel back into that.
If it has declined.
Mike you want to you want to take that yeah, yeah, I'll take that so I mean, certainly theres and advertising impacts across broadcasting in general.
It's not anywhere to the severity like what we're experiencing a programmatic side.
So in my.
Our thought process is that correct. That's one historically was at 20% grower.
That's probably going to be the impact at least what we're saying in the early stages of coated.
That 20, 20%.
So, yes, and that's built into all of our forecast.
Okay and then last question just I guess, just going back just going back that that David David Insurance RMG. A quick question before because I think it's really important question. Yes. We we've we've just again for the first time in the long time, we'll start to get our Mojo back right. So as you know we've converted some of the record labels and publishers.
Going back at 4.5 thousand share restocking that that was impossible to do is a volume picks up in mentioned, we more intriguing I think the same thing is for celebrity talent, We've just announced Nellie Jeremiah why we have nozzles apartment I think you're going to see way more of those partnerships right into the receive them all wanting an equity component still all going to want to drill.
That Kool aid that Docie dray did when he made his money and beach and we're seeing a very very strong reaction and I think you'll see that of course, broadcasted podcasting broadcasting as well as our ambassadorships as artist become more and more engaged and more and more part of our platform more more part of our family as we grow.
Awesome and then just final one and just quickly if you could just spoon feed me I was trying to tease apart the profitability.
Recent guidance.
Are we looking at sort of a sustained profitability or at least EBITDA positive I'm kind of at the end of this fiscal year does that kind of where this is.
If I can kind of think about about lane and simplified pass yet.
Hey, David like the benefit.
Mike Mike, Let me take a 40000 per second.
As we publicly said, we bought slack or two and a half years ago. It was lose it lost $180 million. It never seen a day or profitability, we turn that business extremely profitable right. When we announced the deal for react we said, it's extremely accretive right in terms of revenues and bottom line when we announced podcast one we said the same including.
Balance sheet right. So these are weight easier flight to transform those businesses and turn them and profitable. So no which you could start to look for is and this is way before coded right. This is just more management's expertise and knowledge of both the public markets and probably markets. When we were actually makes the public markets. We made terms.
Nation or traffic, we started to get their audience was there and our brand saw using some recognition we had a slow moving towards more and more get our cost structure in place get economies of scale in place and move towards bottom line numbers.
Got it Okay, and I guess, just congrats on the ramp in new revenue source looking simultaneous improved profitability. Thanks a lot.
Our next question comes from Barry Sine Spartan capital Securities.
Hey, good evening gentlemen.
I wanted to go back Rob to something that you've already touched on and you had in the queue in a which is that six months ago, you were pretty much a exclusively a live events company.
Successfully built a virtual events company to replace your revenue and you hit your numbers, so looking out a year or so from now went live events come back you think they replace the virtual or do you think they build on top of the virtual to now you have a larger company that you would have apps and having built this new virtual business during the past.
[music].
Yeah, I apologize I know my speech, a little bit launch and they've got lost in there, but we've said is we look forward to the day lobbyists comes back in the I've always been enamored with the pay per view market. As you know we've talked about a lot right.
Help start I was hoping you mark to kill that 30 years ago, Lilly going back and boxing announced Magic Johnson, Michael Jordan 30 is it some of huge believer in it so but I do what I believe is out of slide comes back there is any treating combination that as it is very powerful than if you could sell 150000 ticket cynical chello, there's got to be a future.
Tickets you can sell digitally and the same thing if you can shell.
Tickets to a concert whether it's one order some multiple orders.
And just watching Pts last week and watching what we're doing on our platform that we sold over 8000 tickets without any marketing so far to all lightning probably hadn't heard of any of those beds are mostly jam ends I think that there is a brand new revenue stream that is coming here that is not in our guidance today, we have to learn and we got to educate get get smarter.
About it but the fact that our technology is working I think the ability to monetize through tipping two gifting to pay per view is going to be an enormous business and when one band as $20 million and a day right stay tuned for which come with US because you know we stream the biggest orders in the world right. So if you have the biggest artist and the world where there is a leader with.
Selena Gomez wireless was pts across the board right with Adam on our platform. So if you know that works one Dan can do $20 million in a day, we're still small company.
Hey, purview could be a meaningful piece of our business in a very very near future and I would say stay really close really close the chair because those same artist set of workers before I don't have a form today right. There is no touring there is no page views there has to do with a monetize so because of the the our content team.
Garrett English you ran all of MPV lives. The Curations, we do which not just about about putting on the performance and I think what's going to happen is you're going to start crts do with Chris grounded dnase in order to going to get more creative about it because they have to right experience or just plain from home as you can work trap rights and neither was live streaming from rock in Rio.
The artist have to do something that is unique and I look forward that add to see more and more of it I can't tell you Barry how excited we ought to seek hydro performed from from from really from a lake right and to see one Republic back in a theater. There are no fans know yet right and just like US open, but there's going to be an opportunity that we're going to be able to sell tickets and library.
Okay and sell tickets to to pay per view simultaneously as Fiveg comes right you're going to see even assi enormous whether it's also its own else. The enormous revenues comets tipping we've already seen it from a donation standpoint, which effectively is tipping, but if the charity lightly I heard event PGC they raised $125 million.
Right and shipping so I think there's enormous opportunity and I Love Love Love Love, having credit cards versus people just coming through this in watching music for a minute.
Next question is around advertising revenue.
Thank you have talked about you built an incredible.
Content portfolio, but your advertising revenue to date has been fairly minimal and I know thats not something you really focused on until recently as you said, you're adding a very strong advertising team with podcast one.
How many folks are there have they started to look at the lie by life portfolio in what's their impression how quickly do you think that advertising team can ramp up and monetize what you already bring to the table on that merger.
So I mean numbers given numbers right more salespeople you have right. The better salespeople are better shot you can have an advertising now start from the premise of that podcasting. When he is enormous you'll you'll get an understanding that it's like the people that watch podcast they watch it.
Beginning then like the average average amount of time watches like 40 minutes right.
So.
The excitement that their app that their team has right around selling like music in selling our offering it's very unique I mean, I think I think.
Barry I think this is that inflection point I've gotten beaten up as you know just about every one of your the phones beat me up that and start advertising earlier, but I did want to sell the property and you start to see on Friday nights you. So why Claude be surprised you don't see another appetizer. This weekend right you feeling that momentum right. This is a tough trying to feel momentum.
Or anything, but we feel momentum and we feel excited about where advertisers going so I think stay tuned and you're going to see more key is more samsung's and it always when distributors in the sponsors crossover right by Kieran Facebooks, it's even more exciting because you're giving your traffic as well as as money.
Okay. My last question is around M&A on both this call and your prior calls you've dropped a lot of little to users in about things to come for M&A on the last call you talked about I think you used the word imminent that a transaction was the minute was that podcast, one or kind of Moby Dick.
Still out there waiting to be caught and what is your if you can kind of wrap up all of the comments you've made on M&A and.
Describe to US what is your current M&A posture, what are you looking to add to the portfolio and what kind of financial parameters. One difference now than versus a quarter ago is you have a much stronger.
Equity to use and you're using that for example, with podcast one.
So great question.
The answer is a podcast one was not that acquisition as I said before.
We believe that there is another acquisition that is very close bite and we're super excited about it and it's it's a lot easier than it was before right. So remember in the podcast acquisition, we picked up 27, and a half million dollars revenues and normal became our number three shareholder right Guy in the company, which is France.
Tasigna topic, so and well for going forward that was really tough this market right you're in the middle recorded.
Stock is not doing well during that period now our stock is doing better right. We're not back at our highs we're not in back in the middle of our range for the exciting part is is that people are going to look at our our stock in a very different way in yellow and we're already starting to see it from some of the royalties as I said the publishing the record labels, you're starting to convert again I think.
The same thing applies here, we're going to we're going to close another acquisition very very shortly.
And it's going to be it's going to be a size and it fits right in the flywheel right and I would say again, the imbalance from everyone from acquisitions right acquisition candidates to distributors to artist to managers. The labels previously were young company. We were really kicking tires are right. So there's been a lot of work.
And this is this a big mountain to climb.
We're feeling the strongest without itself about acquisitions, we're feeling the strongest about partnerships and I think you're going to see continue to see people people seem to me in a press release in a row, but there is so good initial powerful this such great events, but I think you're going to see more and more of that and.
Two batteries stay tune and they always plan of speaking I'm very shortly is it's getting more and more exciting by today.
Okay. Thank you very much and.
Unfortunately, we have run out of time in only have time for one more question.
Our final question today will come from Brian Kinstlinger with Alliance global partner.
I made a thank you.
My other questions already been active I, we can ask on the international right.
Is there any benefit included in guidance.
Got more of an acquisition and will that be a big catalyst instead to fiscal and the next fiscal year.
I can answer that one and nothing in our guidance reflects international expansion and or acquisitions.
Great and then the follow up I had in my mind, obviously much shorter here you mentioned.
Being installed in every tax law I think if I heard you correctly.
Does that is that similar internationally to the deal domestically or is that just installed and the purchase or would have to.
Activate and or pay for paid subscription.
So so sorry, Brian. The question is is it pre installed on the Tesla vehicle well and immersed.
In the domestic domestic yet the Greek debt free and it comes with the right. It coming in if you don't take or pays for the premium.
Pays for the I paid membership.
Internationally now that you're going to be installed in every car guys. Tesla is are they going to pay for that subscriber or does it so hubbard car owner have to buying.
Let me take it back to where it Michael let me take us. So so the answer to it is historically.
As we have had a almost perfect partnership.
No cost for acquisition no breakage, no churn right Tesla has tried some things along the way the cash did whether or not you know the car owners are going to pay for it versus test of paying direct built into the built into their their lease or the sale of the cart.
All right.
It looks to us like looks very very positive and very promising as to expanding relationships with Tesla over time, and how that all could play out.
But you can be sure they're going to test right, they're always going to test things along the way.
Yes that help account yeah of course, thank you.
This will conclude our question and answer session as well as today's conference call. Thank you all for joining us on today's call you may now disconnect.