Q1 2022 Owlet Inc Earnings Call
Good afternoon. Thank you for attending today's outlet Q1 earnings call. My name is to me and I will be your moderator for today's call all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if you would like to add.
Ask a question. Please press star one on your telephone keypad I will now like to pass the conference over to our host Mike Cavanaugh Investor Relations of ICR Westlake. Please go ahead.
Good afternoon, and thank you for joining us today earlier today I'll, let incorporated released financial results for the quarter ended March 31 2022.
The release is currently available on the company's website at investors Dot I'll, let care Dot com.
Curt Workman outlets co founder and Chief Executive Officer, and Kate Skolnik, Chief Financial Officer will host this afternoon's call.
Before we get started I would like to remind everyone that certain matters discussed in today's conference call or answers that maybe given questions asked are forward looking statements that are subject to risks and uncertainties relating to future events and or the future financial performance of the company.
Actual results could differ materially from those anticipated in these forward looking statements.
The risk factors that may affect results are detailed in the Companys. Most recent public filings with the U S Securities and Exchange Commission, including its annual report filed March 22022, and other reports filed with the SEC, which can be found on its website at investors that are with care.
<unk> dot com or on the SEC's website at Www Dot FCC.
The information provided in this conference call speak only as of today's live call.
I'll, let disclaims any intention or obligation except as required by law to update or revise any information financial projections or other forward looking statements, whether because of new information future events or otherwise. Please note that I'll, let will refer to certain non-GAAP financial information on today's call.
Can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures in the company's earnings press release, which is also available on the company's quarter results page.
I'll now turn the call over to Kurt.
Thank you, Mike and good afternoon to all of those joining us today first I want to note the overwhelming support from hundreds of thousands of parents over the past several months.
They have been the voice of al its mission to empower parents with the tools technology and information that they need to deliver care at home.
It's clear that new parents want solutions to help them navigate the incredibly challenging and rewarding stage of early Parenthood.
We cannot imagine a world in the future where every family doesn't have access to basic health sensing technology to monitor their baby at home, where more dedicated than ever to achieving that vision.
Our monitoring system will become the foundation for what we call the connected nursery ecosystem, a suite of products and services that will work together to help parents keep their baby safe healthy and happy.
Outlet is making significant investments toward this vision in 2022 and products like smart grid. Our next generation camera, a membership program and expanded outlet accessories, which will fundamentally change the opportunity to build a longer term relationship with each customer and expand our LTV and 2023.
Additionally, we believe that investments towards regulatory clearances, where needed will accelerate market adoption and penetration, helping make I'll, let the technology platform for every pair.
I'll, let delivered $21 5 billion in revenue during the first quarter, primarily driven by loading in and rebuilding our inventory position with our retail partners, while the dream Sock launched on Allocher Dot Com and then some retailers in January following CES, the full rollout of dream stock happened throughout the quarter with different retailers stocking the shelves each.
Each month of the quarter.
Notably target did not reset in store and Amazon was not at full capacity until the end of March.
Many of our key levers of growth, we're just starting to build throughout the quarter, including baby registries consumer reviews and search rankings.
As a result, we saw sell through levels increased throughout the quarter, but we believe we will realize our full sell through potential as we continue to build our registries reviews and rankings. The best way to characterize Q1 2022 is that we focused on regaining our footing and positioning back in the market and work to reestablish ourselves as the best monitoring solution for parents.
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While we're navigating the short term headwinds of bringing our core products back online it's clear that the long term potential of our dream Socgen Dream do are strong we're seeing consistent increasing satisfaction ratings, both on our net promoter surveys and our Amazon listings signaling that customer satisfaction is coming back on track with previous smart stock levels were also expanding our reach.
<unk> footprint and international presence significantly.
We have a robust roadmap of new features and products as we continue to build our green platform, we intend to add medical device regulatory clearances that we believe could dramatically accelerated option.
I'd like to give an update on these four areas of growth starting with our dream sock and duo penetration in the U S.
We've seen sell through of the dream sock and duo grow double digit month over month for the past three months and.
And the products have already been named best Baby monitor and baby gift from the likes of baby less glamorous buying your brain.
The end of the quarter, 100% of our retail channels and doors were back online with stream products.
In the second quarter of the year, we're now focused on growing sell through all of this continued its strong organic referral was 56% of customers sharing about the product through word of mouth.
In a recent survey 93% of parents reported peace of mind with the Dream Sock, which is on par with the metrics, we saw around smart stock with.
We've continued to introduce new dream product features to parents improving the baseline net promoter score every month with Amazon reviews for our dream Sock and do a climbing to $4 143 stars already so most of the most notable features and enhancements include an even smarter sleep algorithm.
10 times, more responsive and 11% more accurate than when it was first released at.
At the end of March we rolled out an app update that included the display of average oxygen in the dream App to help give parents, a more complete view and understanding of baby's sleep.
Dream Socgen Dream duo users will also get access to a brand new feature around predictive sleep in the third quarter.
It's a completely personalized sleep tool that helps parents take the guesswork out of getting their baby the rest they need.
Parents will receive personalized prompts when their baby needs to go to sleep based on baby's age time slept in their prior nap and how long it's been since they slapped.
This new feature is automated for parents and adapt with baby as parents build routines and schedules.
By continuing to add more features to the dream platform al It is becoming ingrained part of the parenting journey, we see consistent App engagements every day and we're exploring additional revenue opportunities like membership that would further enhance this.
The second key growth area, we're focusing on as a business is expanding our ecosystem with our robust product roadmap and several commercial launches approaching first our new sleepwear accessories, the outlet dream sleeper and dream sleeper with the Swaddle will debut later this year in a survey of our customers, 73% said they would purchase a sleeper from outlet.
In Q3 of this year the I'll, let cam two will launch globally bolstering the existing 10 ADP HD video with next generation of artificial intelligence and machine learning to accurately decipher sounds from the nursery and detect when babies crying.
So parents know when their baby needs them.
We will also use that data to store important video clips throughout the day, so that you never Miss a moment.
Also part of our product roadmap for the outlet connected nursery ecosystem is our smart crib. Our team is making phenomenal progress on the development of the outlet smart crib, which will be an anchor for the ecosystem.
We recently brought parents into our office and presented a outlet crib prototypes alongside other infant bet options currently on the market and.
70% of parents, there said they preferred the I'll, let crib over the various other smartcard choices we presented.
Lastly, we continue in our research and development of the outlet pregnancy band wearable monitor for expected mothers. After a successful beta test last year and following continued conversations with FDA, we have a stronger understanding of the opportunity consumer fit and market needs. As a result, we are working towards an FDA cleared medical device.
Other than a consumer wellness version. So we can offer a more robust feature set that we believe will provide the best experience for expectant moms.
The wearable pregnancy monitor is just one of the medical devices team is working on is the third key area of growth for our business in the U S. We continue in conversations with FDA as we work towards medical device submissions for both a prescription only version of the song for use with sick babies under the care of a physician and an over the counter version of the Sox heart rate and oxygen.
Vacation features for healthy children.
We have a strong health care team, leading these efforts with experience from top health care companies like Philips GE and Kaiser Permanente, we continue to meet with FDA regarding our submissions and we believe we're on track to submit for the prescription only version of the stock in the summer and the over the counter stock notifications following that.
Outside of the U S. We are pleased with our progress towards filing for the U K and CE marks in the UK and Europe as well as our health, Canada filing as we recently obtained both our ISO 13, 45 and M D SAP certifications.
Our fourth area of growth is international expansion.
2021 was a banner year for Allied as we expanded sales of our core products and nearly a dozen countries in Europe. This year, we plan to focus on increasing penetration in those markets.
Our overall international revenue grew by over 100% year over year accounting for 13% of our total revenue in the first quarter of 2020 to some highlights from our international efforts include significant retail expansion in the U K with Harrods foods inquiries and doubling the number of Skus carried by John Lewis, We are now a major pharmacies consumer electronics and <unk>.
Apartment stores in addition to baby retailers across Europe .
The smart stock was rated a top baby monitor by layperson.
The top French newspaper as well as best Baby monitor gift and the independent large daily newspaper in the UK.
We are very pleased with this international growth and our ear to continue expanding and growing in these markets. Nearly every day, we hear from parents around the globe sharing their outlet experience. Our mission is to get outlet technology to every baby and every family and international expansion is an integral part of our mission.
So part of this is our advocacy and charitable work, where we partner with dozens of parent led nonprofit organizations to provide outlet products to families in need in March in collaboration with many of these nonprofit groups. We were able to donate 650 outlet monitors to Ukrainian refugees that had fled to parts of Europe .
I'm grateful to work with so many like minded groups with the same mission of delivering peace of mind.
We believe these key four areas are huge opportunities for outlet both in 2022 and beyond.
Setting the foundation for an ecosystem this year, which we believe will open up significant long term opportunities. We recently added several new team members to further support and lead all at Albert Lee joined in April as Chief legal officer, bringing with him more than two decades as health care and FDA regulatory expertise for medical products companies like Abbott and Zimmer following.
His tenure with Mattel and price Waterhouse Coopers Nate you came on board in the first quarter as our senior Vice President and Chief Accounting Officer.
We added Matthias Kozak as general manager of our new APAC region.
Matthias has extensive international experience with from top brands like Adidas and Maui Jim.
Thank you for your continued support of valid in our mission and I look forward to sharing more updates on our future calls I'll now turn this call over to Kate.
Thank you and good afternoon, everyone.
Our first quarter results were encouraging during this period there were four main operational objective outlet achieved.
Number one domestic launch of our dreams, Sac and dream to our products.
To sell into all of our major retail channels online and in store and re listing with Amazon, while growing and Michelle December sales momentum with all that in mind.
Number three establish a successful return to vendor process.
Domestic smart stack and do a product returns to rework to dream Pak Indra in dealer inventory and number four manage our working capital operating expenses and existing cash position effectively.
Turning to Q1 result.
He wasn't gross billings the promotions I'm reserves or approximately 26 million as compared to 25 million kind of same period last year.
The 5% year over year increase in gross billings reflect our continued international growth.
Domestically, we work closely with our retailers to launch our dream line of products throughout the quarter.
As of the end of March we achieved initial phone shipment with all of our key retail partners. However, some of the retailers are not fully utilized for online and in store sell through until the end of March.
Q1 product promotions and discounts were $1 4 million compared to $1 7 million for the same period last year.
Return adjustments for Q1, 2022, or 3 million 11, 7% of gross billing.
This compares to Q1 2021 return adjustment of $1 2 million or 8% of course Kelly.
The increase in return reserves in Q1, 2022 really to the named Dream product launches, where consumer return rates were higher at the beginning of the quarter and initial launch and improve dramatically as we moved through the quarter.
Looking ahead, we expect rates will stabilize as parents continue to better understand the new value proposition and the dream product.
Q1, net revenues were 21 5 billion, including the impact of adjustments that just promotions discounts and other allowances.
This compares to net revenues and $21 9 million in Q1, 'twenty one are relatively flat.
Within this international revenue was approximately 13% of total revenue more than double our prior year's first quarter International revenue.
Cost of goods sold in Q1 was $12 8 million and gross profit was $8 8 million.
Our gross margin was impacted by macro inflationary pressures or several discrete items in the quarter.
Q1 gross margin was 47%.
Our Q1 margin, including a significant impact from cost inflation.
Sending roughly half of the decline in gross margin year over year.
Other significant drivers included higher adjustment CRO returned to rework costs associated with return to vendor owned inventory.
Operating expenses for the first quarter, 2022, or $30 5 million compared to $15 9 million for the same period in 2021.
The increase in year over year operating expenses was primarily for planned increases in spending.
Associated with the scaling of the business and higher marketing spend.
Operating loss and net loss for the first quarter of 2022 were approximately 22 million and 29 million respectively.
As compared with 3 million operating loss in <unk>.
Net loss for the same period in 2021.
Q1, adjusted EBITDA loss was $18 million compared to adjusted EBITDA gain of 100000 for the same period in 2021.
Turning to the balance sheet cash and cash equivalents as of March 31, 2022, or approximately 69 million.
Effectively support entering launch inventory and repositioning with our retailers during the first quarter.
Significant amount of capital must be utilized on the balance sheet.
Our receivable balance grew both reflecting the timing of sell in shipments in the quarter along with the disruption that we're turning it down your activity occurring in some cases several opinions with initial drain products selling.
Inventory levels during the quarter as we execute our plans to rework inventory received back from retailers into dream products, particularly as a lot of the rework activity was later in March we.
We expect that in future quarters.
Increase the need for working capital usage until we work through the inventory on hand.
As a significant portion of the inventory is now memory came from our retail partners, we're actively working with them to normalize our receivable position.
In summary, Q1 was an important transitional product court in the U S for all that.
We achieved our top business priority and it's taken many of the necessary steps towards building a stronger global business for outlet in 2022 and beyond.
Looking ahead like most companies, we have seen increased inflationary cost pressures in our business related to supply chain and transportation and going to uncertainty with pandemic concerns and cost increases for wages and company administration.
Women within this uncertain macro backdrop as Curt discussed Q2 will be a continued period of every positioning about outlets domestic business with focus on driving the first full quarter of retail South Korea, and the dream product line and further reestablishing our market presence after being out of the marketplace last year due to the FDA warning letter.
Sure.
And it turns out won't get retailers were elevated in Q1 compared to last year, primarily reflecting timing of initial sell in and sell through the green products domestically.
Inventory South Korea for the second quarter driven by promotional days.
Mothers day, and partners day and online retail.
For Q2, we anticipate achieving revenues in the range of $23 million to $25 million.
With regard to the gross margin and operating margin. We expect the headwinds we saw in the first quarter to continue in the second quarter, including macro inflationary pressures and returned inventory we work hard.
With regard to returning inventory, we anticipate that we will be substantially complete with inventory we work by the end of the second quarter.
Our long term core and growth objectives remain intact, including growing our connected nursery market penetration domestically and internationally.
Executing our vision for the future of the connected nursery market, you're targeting investments in product innovation and expand the lifetime value of our customers.
And focusing on developing medical places.
Obtaining marketing authorization in the U S C.
Global markets where required.
Yes.
Operator, let's open it up for questions.
Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to turn that question. Please press star followed by two again to ask a question Press Star one as a reminder, if you are using a speaker phone. Please remember it.
To pick up your handset before asking a question, we'll pause briefly ask questions are registered.
The first question is from the line of Charles <unk> with Cowen Your line is open.
Yes, thanks for taking the questions guys.
Okay just wanted to just.
Just clarify when you talk about this.
Inventory reworked the 3 million that that's what you're referring to in the Contra revenue account that you talked about last quarter is that right.
The 3 million that we're talking about.
Is on is on the return reserve so that we talked about gross billing and then we increased our return reserves. So we've talked about year over year.
That's about a million and a half more than we had in the year prior.
Because it's a new product launch so when you talk about that kind of gross to net.
A little bit more than we would've had last year. If you were doing a year over year comparison.
And we just wanted to okay and that's helpful.
For Ya.
No that's helpful, but that's separate from the inventory the rework related to the.
The FDA.
Okay can you talk.
No.
How much was that impact in the quarter.
The reward activity, yeah or was there any impact in the quarter from there could you you made mentioned that youre going to be done with that by the second quarter or is there was there any impact to net revenue this quarter.
Right. So what we talked about is that we're about 80% of the way through of the reworks activity and really what we're talking about there. When you look at weed type thought that we had or we.
We had made a liability adjustment and when you look on the balance sheet of what's moved into inventory, that's where you can see the pit adjustment and what we have in inventories that we've said that we brought in approximately.
75% to 80% of the returned to the vendor.
A product that we think is out there until we probably have a little bit more to go in Q2, but then after that we think that that activity is primarily behind us.
So if I look at the balance sheet from December and then the balance and then the balance sheet here presented.
Difference would be what impacted the quarters is that a fair.
Approximation, yes.
Yeah Okay.
And then my last question.
Maybe can you talk about the competitive landscape are you seeing it right now.
Obviously, when you guys introduced the smart sock.
Years ago.
Not a lot of competition I would say in terms of really advanced baby monitoring, we're starting to see new entrants in the market, particularly not in a wearable per se, but in you know.
Cameras monitors that you know is it using a computer vision and being able to detect motion.
Temperature et cetera.
Out of wearable Porce part two can you talk about how this market's developing and you see our place in it.
Yes, Thanks, Charles I would actually say that early on there was a lot more innovation there was quite a quite a few more competitors coming to market in this space and I think I'll, let emerged as the clear leader in our category, where we are seeing is more kind of connected.
Cameras coming to market in.
In the Baby monitor section, which is obviously competitive to our camera but.
Nothing compared to what we are able to offer with the dream sock and the features that we have around dream socs that are.
That are kind of the next generation of sleep monitoring. So we are seeing some more entrants on the camera side there's.
You know theres, a new wearable, Matt, but in terms of sort of being on par with our level of sleep tracking and fleet monitoring and sleep quality indicators that we have I think all that is still in a.
You know really strong position and is leading the market in terms of technology.
So does that answer your question Charles anything else you want me to go deeper on.
No no that was helpful and I was just curious how youre seeing sort of the market evolving that's great. Thanks, a lot appreciate it I think it's interesting that this market is I would say finally evolving for Wi Fi.
Where the you know the.
Smart home market has been there for a while and I think that the majority of the innovation that we're seeing happen right. Now is video monitors for babies connecting Wi Fi.
Great I appreciate it thank you.
Thank you Ms Jerry.
The next question is from John Babcock with Bank of America. Your line is open.
Hey, good afternoon, and thanks for taking my questions. The first question I just had you talked about higher return rates on the dream sock much you'd be able to adult into that a little bit more and what you think drove those higher return rates.
Yeah sure so just to clarify that too and Charles's question.
The impact to revenue is that returned in allowances. So what you do is in a in a normal quarter or you just take that as a percentage of revenue we had a new product launch in Q1 with the dream product.
We took a higher reserve is a new product launch we saw slightly higher return rate. When we first launched the product in a little bit with that was I think some consumer confusion when we first launch it with the new the new value prop.
At the very beginning of the product launch we saw that return rate change.
Changing very dramatically as we went through the quarter downwards.
And we've seen that actually continue downwards into a more normalized rate that we saw with our prior product. So we think that that will continue as he mentioned is that the value prop continues to resonate and our NPS scores continue to go up with a new feature set.
But as a as it works we take an average for the quarter. So the average is a little bit hiring two one and our expectation is that it will be.
At a lower rate in the future.
Just out of curiosity, what a teacher or most of the returns hoping for that I guess it didn't exist.
Zack.
It was it was all different so when we when we launched the product.
The difference that we had was that as we as we change the product from smart to dream.
Some of that feature functionality that you rolled out.
Should come in Big Dream applications. Some of the look back applications are.
Hmm.
The way that the the App works and there's some of the new feature that we've come out with since then but its the overall repositioning of the product in the marketplace.
Okay, Yeah, and I would say.
John .
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Yeah, I would just add just to add to that I think any time, we launched a new version of any product generally those first few months you see higher return rates.
The in addition to just to kind of follow up on the feature question. We launched three new features in the Dream Socs in Q1 post launch one of the real time sleep gauge in the App, which is a really cool feature and kind of visually.
It's pretty prominent in the App and helps parents in real time see what sleep kind of state. They're in we made the sleep tracking feature a lot more responsive and then we launched average oxygen display at the end of the quarter as well and I think all three of those features we've seen the.
Satisfaction and ratings improved significantly with each new feature rollout in the quarter.
Okay. Thanks for that and then last question and I'll kind of combine this into two questions. I guess first of all just with regards to your revenue guidance for the quarter, how much visibility do you happen to that and then second of all are you seen any impact in your EMEA.
Countries from this whole, Russia, Ukraine prices does that waned at all on consumers' interest in an hour.
Yeah.
Okay, and I wanted to take that.
Revenue and then I'll take the international Yeah.
Yeah sure.
I think you know as we've talked about I mean, Q1 was a major repositioning for us and we talked about the initial sell in domestically for dream that was an important milestone for our retailers, both online and in stores and that selling happened throughout the period.
Also re listed.
With Amazon very late in Q1, so we were very happy to have all of that activity at the end of Q1.
But it all happened at different times right. So as a consequence of that.
Sell through activity started happening at very different times. So for Q2, what we're really focused on is the sell through activity with all the different retailers yeah.
And what we're expecting is that a lot of that sell through activity is going to correlate with the.
Promotional opportunity is with the different holidays, we had some online events that maybe happening too and so what we believe is that the demand that we're seeing out there as I mentioned that a lot of the new feature functionality, that's resonating with folks yeah, we anticipate that that range of revenue as you know we're we're keeping.
As we start correlating that sell in sell through.
Particularly and then I'll, let Kurt.
Address the overall demand that we're seeing internationally.
The other areas.
Yes.
Yeah, I would just add that you know you're.
Europe is really a bright spot for the company right now we're seeing.
Incredible growth year over year the.
Team has done a great job of really not only building a great team there, but working with each country specifically to build good marketing programs for each of the geographies. We mentioned the midwife recommendation, we recently got the expansion into into boots and expansion in John Lewis and expansion in Harrods, so that the business.
Is growing really well there and we're seeing strong consumer demand and I do think there was a little bit of softness, especially kind of at the peak of.
Some of the news around the war in Ukraine, So, but overall the business is strong.
Right.
Alright, great. Thank you.
Got it.
Okay.
Thank you Mr Baca.
Again to ask a question press Star Guang and.
The next question is from Jim Suva with.
Citigroup Your line is open.
Thank you our question for Kurt about strategy.
You mentioned that you're launching the pregnancy band with working with the FDA for that as opposed to call. It a health device path.
What's the reasoning behind that is that you always plan to do that or did the FDA kind of tell you Hey, we're going to view this as a help device and not I'm, sorry, as a medical device or not health advisor I'm, just kind of curious about that path because the other devices you've taken the other route going as more of a health device rather than the F. D. A.
Help them approved device.
Yeah.
Yeah. Thanks for the question Jim.
No I would say that in Q4, as we're having discussions with the FDA around the stock.
We were proactive and discussing band with them as well because it's in a similar vein and we were able to get to a point with the agency, where we had a clear path for launching a wellness device, but there were a certain features that we wanted to make sure were included at launch and.
Felt like that the best approach and in a recommendation from the FDA was to seek clearance on those features prior to launch. So we did we did changed strategy a little bit with that product and have decided to just.
Just completely embraced the medical pathway and get clearance prior to launching it.
Okay that makes sense and again.
You mentioned, if I heard right you are planning to submit for that in the summer time or did I get that mixed up with a different comment.
Yeah. So the the babies that which is the prescription version of the sock is what we're anticipating submitting this summer.
We don't we haven't announced the timeline for the submission of bad yet.
Okay Gotcha.
Relatively getting.
Are you relatively getting close to that or are these things. So complicated we're looking at kind of beyond this calendar year. If you can give any commentary for that I, just don't know about the longevity of that detailed process.
Yeah, I think where we're still in conversations about exactly what we're gonna put in a submission with the FDA. So we will have more information in future calls.
Okay Gotcha, and then a question for Kate Okay, you may have.
Comment about cash flow was impacted by the reworking of the recalled products that you returned.
Just shift over from a medical to more of a health packaging, which makes sense and you mentioned that was a headwind and challenge for working capital in the March corner does that mean that in the June quarter, we should be thinking about cash flow materially changing because it kind of I'm going to say on.
On wraps itself reverses itself or can you help us a little more clarity about what you were referring to about that working capital comment that you gave on your prepared comments.
So a lot of the activity cameras to staging.
Our process with the retailers.
Bringing back the inventory that they had in terms of smart.
The duo product, bringing that back in house to rework her dream sock entering duo and then reworking that as inventory and then getting product back out to the retailers and so a lot of that affected.
Not only the process of getting it back into our company, but also then as you can imagine accounts receivable.
And that whole process as far as selling in and selling through them as we work with our customers. So it's taking a little bit.
Of uptime.
To get that all work through but we think that we're about 80% of the way done then we will be able to kind of settle out with.
Those customers I think in Q2, we should be mostly done and then I think we'll have more back to that flow that we've usually had where we sell in and then we have that kind of normal payment cycle with them.
But it's just kind of taken a little bit of patience and everybody who's been on a little bit of a different cycles. So that's why you see some of it.
Just thought would've been tied up in some of the numbers on the balance sheet and the cash flow, but all expected in Q1 and to be honest to get through a lot of that in a short period of time has been put a lot of effort in that the retailer side and our side. So we're really happy where we are but we also expect to be mostly done.
By the end of this quarter.
Thank you both for the clarifications, it's extremely useful thank you.
Okay.
Thank you Mr. Suva.
That is all the time, we have for questions I will now turn the conference over to Kirk for any closing remarks.
Yeah, I just want to thank everybody for joining today, Thank you Charles and Jim and John for the questions.
Thank everybody for supporting outlet as we're working to innovate and solve real needs for parents and want to thank our team and our customers for all the support we've seen over the last few months. So thank you have a great day.
That concludes the our Q1 earnings call. Thank you for your participation you may now disconnect your lines.
Uh huh.
Uh huh.
Yeah.