Q2 2022 Inuvo Inc Earnings Call
[music].
Please standby we're about to begin.
Good day, everyone and welcome to the <unk> incorporated second quarter 2022 financial results conference call.
Today's call is being recorded.
And now at this time I'd like to turn the call over to Natalya Rudman of Crescendo Communications. Please go ahead.
Thank you April and good morning, I'd like to thank everyone for joining us today or the new low second quarter 2022 a shareholder a big call today's new lows, Chief Executive Officer, Richard Howe, and Chief Financial Officer, Wally Ruiz will be your presenters on the call. We would also like to remind our shareholders.
Or that we are filing our 10-Q with the Securities and Exchange Commission today before we begin I'm going to review the company's Safe Harbor statement. The statements. In this conference call that are not descriptions of historical facts are forward looking statements relating to future events and as such all forward looking statements are made pursuant to the Securities Litigation Reform Act of 1995.
Looking statements are subject to risks and uncertainties and actual results may differ materially when used in this call. The words anticipate could enable estimate intend.
I believe potential will should project and similar expressions as they relate to the New law, Inc. Are as such forward looking statements.
Unless there's a washington, they're all forward looking statements involve risks and uncertainties, which may cause actual results to differ from those anticipated.
At this time.
And other risks are more fully described in her new role as public filings with the U S Securities and Exchange Commission, which can be reviewed at www dot at SEC Gov. The company makes no commitment to disclose any revisions to forward looking statements or any facts events or circumstances. After the date hereof that bear upon forward looking statements. In addition, today's discussion.
We'll include references to non-GAAP measures. The company believes that such information provides an additional measurement and consistent.
Historical comparison of its performance regardless of alleviation of the non-GAAP measures.
Directly comparable GAAP measures is available in today's news release, all looks like.
With that I'll now turn the call over to.
Richard.
<unk>.
Thank you and Italia and thanks, everyone for joining us here today.
We had another exceptionally strong quarter, where for the three months ended June 30th 2022 we delivered $22 7 million in revenue.
Which was up 79% year over year.
Our trailing 12 month year over year growth rate now stands at an impressive 72%.
And we have delivered approximately a 15% compounded quarterly growth rate.
Over the last two year period between the second quarter of 2020 and Q2 of 2022.
As you know in new boat provides digital advertising technology and services across channels.
Our valid click platform principally serves advertising within the search and social channels.
While the intent key principally served within the programmatic channels.
Both platforms experienced significant growth in the second quarter with the intensity and valid click up roughly 197%.
And 44%, respectively digitally year over year.
The social and search related revenues from valid click represent roughly 62% of revenues.
While the programmatic revenues associated with the intent to represent 38%.
The company's top three clients accounted for approximately 27, 4%.
97, 2%.
And 13, 6% overall revenue respectively.
The second quarter was seasonally higher than is typical.
The second and third quarter period within advertising tend to be difficult to predict.
There is variability year over year in both the timelines associated with advertiser budgets for the year.
Typically occurring in the first quarter.
And there is some inconsistency in consumer purchasing behavior because of the summer months.
Typically in Q3.
We believe this variability has been compounded this year due to various uncertainties related to the economic environment.
This seasonality tends to lead to years, where sometimes the second quarter is higher than the third quarter and sometimes the opposite sequentially.
Gross margins remained healthy in the second quarter at roughly 59%.
Adjusted EBITDA was a loss of roughly $100000.
There were extenuating circumstances associated with expenses in the quarter that while we will discuss in his review of the financials.
The company's core strategy remains a growth oriented strategy.
As we have messaged on previous calls we believe the.
The industry, we serve is not prepared for the implications of a consumer privacy led future.
We're consumer data is no longer available to facilitate behavioral targeting of advertising.
Most of and advertisers return on advertising spend is related to the use of this data.
Currently.
Approximately 75%.
The media purchase opportunities within the open web.
Or do not have a consumer cookie I D.
Or that Cookie I E does not persist the next day and as a result.
It is no longer target a bull.
Google does not need to kill the cookie, the consumer with VPN and incognito tools and the other browser developers have already done that.
We believe two things are occurring because of this new reality.
First.
The existing incumbent advertising technology and data companies are convincing their clients to use a variation on the existing consumer based methods.
The industry is referring to this as a first party cookie solution.
But those companies or.
There are hundreds of millions sometimes billions of dollars have been invested in the various technologies and data that support. This approach. This is the only way to preserve those past investments.
Secondly.
And because there is already limited media inventory available to these technologies.
These same incumbents are all expectedly, competing where media placements.
On a consumer cookie I'd pool that is shrinking by the day, which means they are only bidding up the price for each other because of ashamed shrinking cookie supply with constant demand.
And <unk> has no such limitations.
The technical regulatory and consumer issues facing first party solutions suggest that they are challenged from the get go.
Less than 5%.
Of current open web media purchase opportunities are currently targeted bolt in this first party manner.
This solution cannot and will not scale and literally uses a technical work around that allows the continued use of a consumer's data.
Consumers have overwhelmingly told the industry they no longer desire.
As a practical matter this privacy movement has been self evident.
The response from consumers, who use an apple device, where they had been asked if they want their applications to track them.
The vast majority have voted.
The answer is no.
Our opportunity is to take market share during this period, where did your comments continue to use our day.
<unk> technologies.
All aligned with the future and therefore why growth is and remains our number one priority.
We continue to deliver exceptional results for clients within the intent key platform, where in the second quarter, we performed on average 66% better than our clients Kpis.
We ran over 80 open web campaigns in the quarter.
We also put out a press release challenge to the industry in the quarter, while we offered to compete head to head with any company.
Wherein if a newbuild lost it would pay the invoice.
We had no takers.
New customer acquisition was a highlight in Q2.
We expanded further into the automotive consumer package goods financial services political and tourism verticals.
We hired an experienced sales leader in Q1 and have now organized all of our sales and account management under her.
We remain active in our recruiting within this group. So we can meet the opportunities we see before us.
We sponsored a first of its kind conference on artificial intelligence within advertising.
Which took place in New York City and proved to be a huge success based on the number and variety of industry leaders in attendance.
This subject was also top of mind at the Con Leon Advertising Festival, we attended in July .
We have increased our marketing spending in support of our growth oriented focus.
Product development activity continued across both platforms.
Well it is valid quick we added new features and tools that enhance automated.
Analytically based media buying.
Within the search and social channels.
Scaling campaigns, both in numbers and through automation has been an ongoing focus of the valve platform engineering teams.
Within the intent key we launched a new graphical interface to the insights generated by the artificial intelligence that was well received by clients, who can now interact with the information being generated by the AI in real time.
We also started to commercialize a neural network based media mix modeling solution.
Which we expect to make available to clients within the existing reporting dashboard they already use.
As the number of media channels has exploded.
So too has the challenge to figure out how to optimize media spending across those channels.
This is not only a highly nonlinear problem.
But it's also another problem being impacted by the cookie.
Because traditional accounting for attribution between channels.
Involves counting the cookies linked to that channel.
Method also honest last legs.
This sophisticated and AI based approach to the media optimization challenge facing the industry.
We will be yet another significant differentiator for renewable.
Managing multimedia is akin to conducting an orchestra.
You want to turn down the horns section when it sounding a little flat.
The challenge is how to figure out when and by how much it's flat.
This is the problem we figure it out.
I would like to now turn the call over to Wally for a more detailed assessment of our financial performance within the quarter.
Thank you rich.
Good morning, everyone I'll.
I'll recap the financial results for the second quarter of 2022.
As rich mentioned.
<unk> reported revenue of $22 $7 million for the quarter ended June 30th 2022.
That's an increase of 79% compared to $12.6 million reported in the second quarter of the prior year.
Both platforms, serving our multichannel solution valid click and in Turkey <unk>.
Exceeded the prior year.
Valid click revenue exceeded the second quarter of last year by 44% and the intent key revenue exceeded the prior year quarter by approximately 197%, primarily due to new customers expanding their media spend.
Revenue split between the turnkey.
And valid click was 38% and 62% respectively for the second quarter of 2022 and that compares to 23% at 77% respectively for the same period last year.
Our revenue was less concentrated in 2022 than ever before our largest client a retailer represented 27% of our total revenue in the quarter.
The same quarter last year, our largest client was Google and represented 38% of our revenue.
Google remains an important customer and then the second quarter represented 14%.
Of our second quarter revenue.
Gross profit for the second quarter ended June 30th 2022 totaled $13 $4 million as compared to $10 $4 million for the same period last year.
Gross profit margin for the second quarter. This year was 59% and that compares to 82% for the same quarter last year.
The <unk> platform has a lower gross margin than the valley click platform.
But it has a greater overall net margin.
<unk> gross margin decreases as a turnkey revenue becomes a greater percentage of the total revenue.
In quarters past cost of revenue was predominantly payments to web website publishers and App developers that hosted advertisements that we serve through the valid quick platform, yielding a very high gross margin.
As the programmatic channels associated with the <unk> continue to grow.
They become a larger percent of our revenue and cost of revenue.
<unk> cost of revenue was predominantly payments to advertising exchanges that provides access to a supply of advertising inventory into which we serve on behalf of our clients advertisements using information predicted by the turnkey artificial intelligence.
This is a greater cost than the historical payments, we have been making to publishers associated with Valueclick.
But at the same time on a net basis it is more profitable.
The very high Valley click gross margin also has.
Our high cost of traffic acquisition.
Which is accounted for in operating expenses as a marketing expense.
The turnkey is not burdened with.
Any of those types of expenses traffic acquisition expenses.
Yes.
Our gross margins are also dependent upon the mix of advertising channels, serving the client.
Many of our clients require a multichannel digital media solution.
One of our advantages is the ability to serve highly targeted prescriptive ads across multiple channels, such as video mobile and connected TV linear TV display social search and native.
Each of these channels you will vary in gross margins, depending on supply and demand the optimization of the media mix for clients can vary from client to client and from time to Tyler.
Generally search and social are lower margin channels as we have to work within the walled gardens of the large internet platforms that support these channels.
We have better opportunities for margin expansion and other channels on the open web.
We expect the new boat gross margins for the remainder of the year to be roughly in line with the results of the first and second quarters of this year.
Okay.
Operating expenses were $16 $2 million in the second quarter of 2022 compared to $12 $8 million in the prior year Thats, an increase of $3 $4 million.
The largest component of operating expenses marketing costs.
No as I previously mentioned marketing costs are predominantly traffic acquisition cost associated without with quick.
Marketing costs were $11 billion in the second quarter of this year compared to $8 $2 million in the same quarter last year.
This brings us to the first of two matters that impacted the second quarter.
Within the quarter, we purchased and placed approximately $2 million of media from what the largest at a well known platform provider.
The technologies.
We have for measuring quality of the media, we purchase determined that the media platform provider sent us large volumes of fraudulent fraudulent traffic.
The media platform gave us a credit of approximately $600000 for the fraudulent traffic and as a result, the net amount of $1 $4 million.
The difference between the total amount of $2 million that we purchased versus the credit of $600000.
The net amount of $1 $4 million was absorbed into marketing expense with no corresponding revenue associated with it.
While the media platform provider has acknowledged that.
Fraudulent traffic issue and granted us as partial credit.
We firmly believe we are do a full refund for the for all the fraudulent data.
Media, we had purchased.
And we intend to utilize all the avenues available to us to pursue our claims.
In the meantime, we have held back an equivalent amount of payments.
We owe this platform provider pending resolution.
Yeah.
Going forward, we expect marketing cost as a percent of revenue to continue to decline.
Revenue from the turnkey platform continues to grow and overall share of our new boat revenue relative to valley click.
Compensation expense was $3 $2 million in the second quarter this year compared to $2 $9 million in the prior year, primarily due to higher employee salary cost and higher stock based compensation expense.
Our full time and part time employment was 83 at June 32022, compared to 73 at June 30 of last year.
The majority of the increase in head count occurred within sales sales support and account management for the <unk>.
General and administrative expense increased by $334000 in the second quarter of this year compared to the prior year due to higher bad debt allowance travel and entertainment expense and professional fees partially.
Offset by $269000 of lower amortization expense.
Net interest was income of $3000 in the second quarter of this year compared to $8000 expense in the same quarter last year.
Turning now to other income and expense this brings us to the second matter if that impacted the quarter.
As we disclosed last year, we identified a portion of our cash that would not be needed. During the next 12 months and transferred that cash to a fund manager.
Since the third quarter of last year, we have been reporting unrealized gains as the securities are mark to market at quarter end.
However, with the recent increase in interest rates and the downturn in the stock market.
<unk> Securities reported an unrealized loss at the end of June of approximately $395000.
However, as of last Friday that portfolio that portfolio had regained approximately $300000 in value.
We reported a net loss of $3 $2 million or <unk> <unk> per basic share compared to $2 $4 billion net loss or two cents per basic share in the same quarter last year.
Call. This year's quarter includes a $1 4 billion dollar expense for fraudulent traffic that we expect to receive full reimbursement for <unk>.
395000 dollar unrealized loss on marketable securities.
Neither of these two expenses diminished cash.
So we did recognize an expense we did not and shall not pay the invoices for the fraudulent media.
Okay.
Net income in this year's quarter also includes $1 $3 million of noncash depreciation amortization.
And stock compensation.
Okay.
The adjusted EBITDA loss for the quarter ended June 32022 was $142000 compared to a loss of $965000 last year.
On June 30th 2022, we had cash and cash equivalents in marketable securities.
Proximately $8 $4 million at a net working capital of $8 $9 million.
In addition, we have a 5 million dollar working working capital line of credit, which we currently have no outstanding balance on it.
We maintained that simple cap structure with almost $120 million 120 million common shares outstanding.
A $5 1 million employee restricted restricted stock units outstanding through an equity incentive plan and 300000 warrants to purchase common stock.
With that I'd like to turn the call back over to rich for closing remarks.
Thanks, Wally at 75% year over year growth in the first quarter and now 79% in the second quarter. We've had a very strong first half of 2022.
Our trailing 12 month growth rate now stands at 72%.
And our.
Two year compound quarterly growth rate is now at 15%.
Well, we had an adjusted EBITDA loss of $100000 in the second quarter.
We continue to develop and deploy artificial intelligence based innovations that serve to further the gap between our capabilities and those of our competitors.
But for the most part appear to be doubling down on existing methods and technologies.
Our balance sheet remained strong enough to accommodate the working capital needs of the growing business and as a result, we have no immediate plans to raise capital.
With that I will now turn it over to the operator for questions April .
Thank you if you would like to ask a question simply press the star key followed by the digit one on your telephone keypad also if you're using a speaker phone. Please make sure. Your mute function is turned off to a lighter signals, which are equipment. Once again press star one at this time.
We will pause for a moment.
Bryan King singer of Alliance Global Partners has that first question.
Hey, good morning, guys and thanks for taking my questions.
My first question.
Jay you successfully articulated why.
Older technologies.
<unk> technologies out there, we'll have difficulty in the new world of privacy lives and lack thereof cookies.
Although you've talked about in the past maybe you could do.
Maybe it would be helpful for you to articulate at a high level how in turnkey is able to bypass this.
So called first party data.
And be so successful.
Yeah.
Yes, Brian .
Clearly, we're talking about artificial intelligence here. So you know the answer to the question. Unfortunately is a complicated one.
One.
Conventional technologies or based on identity and we have no such construct.
We built the technology from the get go to not be dependent upon figuring out who someone is who the person is.
The only information our technology needs to achieve its objective is actually the the contents of the internet and maybe more specifically when it's trying to make a decision about placing an AD on our pages the content on the page.
The AD was available to be purchased.
And in a nutshell the brain if you will behind the technology has this ability to understand the relationship between every concept in the human lexicon and every other concept and what that allows us to do is actually open up opportunities for ad placements.
Against.
And objective in a way that's never been done before in large part because of the construct and constraint of using people as the center of the data.
That's the best I can do it in.
Whether in two minutes.
So basically it's information and.
<unk> based as opposed to people based where are you searching what are you searching as opposed to Oh.
What page are you I know none of that.
None of that Bryan I should make that clear because those are behavioral elements, we don't care about what you're searching for why you're searching for again the only thing our technology needs is that is the key.
Content of a page that's available in free leaf there to read it.
Maybe said a different way, while our technology is not.
Textual in the classic sense of the way AD Tech knows contextual it is.
Contextually based in the sense that it needs.
And does read the.
The information that's available, but no none of those behavioral things that you're mentioning are necessary in our technology, which is why is the technology is so powerful.
And ready for this new future right.
Well the growth in 10 key has been super over the last six quarters.
Really the adoption of the execution.
AD spending has picked up a bit and solid so I don't want it.
Okay. It hasnt, but if I exclude the sequential period from the fourth quarter of 2021 to the first quarter of 2020.
<unk>.
<unk> got Gary sequential growth slow now you've talked about the uncertainty into Q3 Q economic uncertainty so.
And maybe it would be helpful to understand the dynamics into queue that maybe saw a.
Slower sequential growth and you've enjoyed for so long as it's a larger law of large numbers is it changing economy.
Maybe any detail would help.
Provide some context to that.
Well as you pointed out it's hard to say that Theres anything amiss. When you know when we had a 79% year over year growth rate.
And I think you don't look over the last two years, that's why I provided this number at my conference note I mean, we've seen a 15%.
Quarterly compounded growth rate for the company and a lot of that is on.
On the back of the programmatic channels I E. The turnkey, but I think it is important to recognize and I keep re emphasizing this in my communications that managing digital media for client now means you have to manage across channels and the search social channels, they're not going away.
I mean, these large platforms, you know, notably Google on the search side, the dominant platform and to a lesser extent being in and others.
And then of course Facebook on the social side these are platforms.
That clients want to use and should be using.
And they're going to remain to be a big part of the overall mix of the media relative to the open web based.
Advertising channels.
So I don't know that you can't look at it in any individual period quarter to quarter, specifically as it relates to my statements about Q2 and Q3.
The real issue in the third quarter always is about July and August September probably most notably September .
September is almost always a large month.
Because youre heading into the the <unk>.
Call it the money months for advertisers.
Just very difficult to predict.
Actually July and August with all of the consumer vacation schedules and whatnot.
And that's why I made the point, which makes it hard to predict Q2, and Q3 relative to one another in any given period.
Okay. So I wanted to touch on the intent key kpis.
Sure.
<unk>.
Well, it's something we talk about the last several quarters. So and maybe you can talk about new logo wins, you made a comment that the pace of new logos per month remain consistent.
In the second quarter, and thus far in the third quarter compared to the previous few quarters is it slower and then maybe campaign sizes are you seeing.
Those increased as well.
We're seeing budgets increase.
With that said I think the economic environment. We're in we do see our clients starting to think about whether or not.
We are in are headed for a recession, but we don't yet see them Act.
Acting on it I guess they are like the rest of US you know, we're not quite sure what's going on we are increasing.
Or would you reduce unemployment with jobs, but yet at the same time, we've got high interest rates.
Thank you shrinking GDP, so we're not quite sure it's an anomaly so.
So our clients are thinking about it just like we are but we're not really seeing the actions are that the actions would normally be reduced marketing spend.
It's hard for us to measure anything.
With the kind of growth we had relative to some other period when we werent growing this much with <unk>, which as I pointed out is now a two year period. All I can say is we continue to add new clients and I said it on the call. We have added some CPG and political and automotive clients in travel clients.
And we do see.
You know not among all of our clients, but we do see our clients generally adding budget.
In the clients that we have.
We've taken on.
Great that's great to hear last question.
I have for now is you mentioned your largest customer was a retail customer so I assume that's in turnkey search.
What percent of revenue ways Ah that customer in the second quarter of 2021 and kind of wanted to see what they're generating in terms of the growth and then maybe can you give us a sense. If there is any other concentration in turnkey itself. Thank you.
I don't believe we give client base.
Numbers like that Brian and I don't think we're going to start on this call.
I would say this though.
To the best of my knowledge I'd have to go back and check, but I think the client in question.
Did actually <unk>.
Grow although wallet you can probably maybe he knows that maybe it doesn't I don't want to be held to that because I'm not sure. If they don't have the numbers in front of me I have to go look at them in there.
Periods that you are asking for and then I'm sorry, Brian what was the other question. There was another question in there, but I wanted to ask I'm just trying to understand yeah. I was trying to understand if there's other concentration in turnkey R. R.
Inside and turnkey customer obviously is the largest are there another one or two or three that make up a big percentage of it in <unk> revenue.
Yes, Theres a couple of them.
I think it's like any other business.
I've ever been a part of developing that's at this stage in this stage for US means what I guess $22 7 million in a quarter.
Yes.
There's a handful of three or four or five customers who.
Are the let's call it the.
70, 30, or 60 40 of the revenue split.
Okay. Thanks Ryan.
I can tell you that the.
The large retailer.
[noise] came on since the second quarter of last year.
So it's.
So they went from zero to 'twenty to 'twenty when you gave the numbers.
You're at a 27% of revenue rubber at wise.
Yeah, that's right.
Right well great okay. Thank.
Thank you.
Thanks, Brian .
Yeah.
As a reminder, if you would like to ask a question Press Star then one on your telephone keypad and again that's to ask a question I'll make a comment star one.
We will now move on to Geoff Banta Rd of Maxim.
Great Good morning, guys.
Did you see the strong result, thanks.
My question.
So as I said, great top line results.
Strength in crossville clicking in turnkey.
Question on the gross margin result, which was ahead of my expectation.
He has a more favorable channel mix and channel mix, because I know gross margins.
Depending on that channel mix.
Alright.
By channel.
Platform service now so just wondering what that what that kind of mix wasn't what was that the result did that drive gross margin up better than I would've expected or.
Or is it more just because of the high margin market.
Yes, we got.
Actually being turnkey.
Did.
Did better in gross margin in the second quarter to show improvement.
But what you are looking at is as a result of the mix between the VAT like click and then turnkey revenue.
It's a mix of the business.
And as I had mentioned in prior calls.
You should expect that that trend to continue as the key becomes a larger portion of the total revenue for for Novo.
But but in.
In turnkey itself actually did see some improvement in the second quarter.
Great Great I appreciate the color there.
Rich you mentioned Youre seeing.
Budget increase but.
Don't necessarily seem to customers the end customers.
The increase in budget quite yet.
Maybe for the turnkey project revenue physically are you seeing newly turnkey customer orders coming in.
Harmony in the second quarter, and then you know.
Are you expecting that budget to be acted on and drive increased turnkey order here in the back half of the year.
I'm, assuming yes, but maybe I'm.
Much I'm not sure like on this potential.
The potential. Thank you orders do you think are on the sidelines just waiting for the trigger to be bold.
There's lots of.
Call it variables at play here and answering this question adequately.
So I'll start with the first of them look the changes occurring in the industry is creating.
Some demand for our technology and that would be irrespective of any seasonality or budget or other issues.
I think you know the smarter companies on the planet, who recognize this challenge in this space in the industry.
Starting to.
Look for solutions that can address those challenges. So we have that tailwind if you will behind us pushing us forward.
The.
Economics.
Of the of the of.
The U S G.
GDP and whether or not we're in a recession or not I don't we have no control over that.
Comment for.
Or that was more about what we see is like a lot of us people are.
Aware that there could be an issue, but they're not necessarily seeing it day to day yet.
So they are thinking about it and talking about it but it doesn't seem to be impacting.
At least the baseline for the amount of budget that they've allocated.
To us whether or not that will change I don't know.
All I can say is at this point.
We're not seeing.
Dose.
Anomic concerns impacting us they could in Q3 and Q4 I guess, we'll all find out as we progress.
Got it that's helpful color and then.
Maybe another one for Wally.
On the operating expense doesn't pointed out increased quite a bit.
But mostly because this fraudulent data from those large immediate customer it sounds like you expect a full refund of about $1 4 million for that and then just looking at the back half of 'twenty three.
Murphy can cost will look similar to last year.
Or maybe a little bit of growth on that last year. Just wondering if you could give the marketing expense.
Ah, yes marketing expense.
We as a dollar amount.
We do expect it to to increase yes.
But not <unk>.
As significantly as we saw in the prior year and 2021.
But yes.
As a dollar amount.
Yes, we do expect it to increase quarter for the next couple of quarters.
Okay, and then just I might add.
If I could just add a statement onto wally's.
When we do talk about marketing expenses, we do tend to.
Fragment that a little bit.
Of course, the lion's share of our marketing expenses are related to the.
The purchase of media within social and search.
But there is another component.
Marketing that we spend dollars on in any given year and that's the marketing of our own company.
And we have increased that spending.
I don't know.
Materially as the word but significantly it was never a big number and so relatively speaking, it's a big number a year over year.
I'm not sure what it is Wally and I am not sure I don't know, if we disclose that or not but I know, it's going to be around $1 million or something for the year, which is a lot more than we spent in prior years and we've done that.
In large part so that we can get our brand out there.
This company that has a solution to the problem facing the industry because.
We're not well recognized yet in an industry that spends three or $400 billion a year.
Okay understood I appreciate the added color there go.
Go ahead, one yeah Jack Jack.
As a percent of revenue.
It will continue to.
Be lower but the dollar amount will increase.
Modestly.
For the reasons Rich just mentioned.
Yeah.
Okay got it I appreciate the added color gentlemen.
The top line you can throw at us.
Pretty robust rate.
Thank you.
At this time. It appears there are no further questions I will turn the call back over to Richard for any additional or closing comments.
Okay. Thank you April and of course as always I want to thank everyone, who joined US today on the call and we appreciate your continued interest in our company.
And that does conclude today's call. Thank you all for your participation you may now disconnect.
Okay.
Okay.
[music].
Sure.
[music].
Yeah.
Okay.
Yeah.
[music].
Okay.
[music].