Q3 2022 Grid Dynamics Holdings Inc Earnings Call
In the Q3, we witness enhanced budget scrutiny.
Across customer basis, with some retail clients beer more assertive, we expect this trend to persist in Q4.
Meanwhile, the majority of our clients continuing to invest in revenue generating programs, which tend to be more insulated from macro headwinds.
In addition, Q3 revenue also benefited from our new logo business development at based on our current trends in Q4, we expect continued strength from the new logos.
Turning to some additional third quarter segment commentary our technology segment was the largest during the quarter.
And similar to the Q2 some of our largest technology customers continued to ramp aggressively in support of our growth as we expanded into new geographies.
Our financial segment grew healthy as we benefited from new programs tied to wealth management applications.
Lager moment.
In the third quarter, we added several new logos across industries, which included a fortune 500 climate control equipment manufacture at <unk>.
Specialty retail and a large online consumer platform.
Im happy to report that in September we signed new contracts and started engaging with two fortune 50 companies one is a global automotive manufacturer.
And another one is the leading membership on the discount chain.
<unk> revenues from these two customers starting October .
European business expansion.
During the quarter, we made a good progress with our European clients Cyber security is one of our strategic focus areas, we expanded business with a number of cyber security software companies.
In addition.
We witnessed a strong ramp with a global footwear company.
Also continued to scale our business with a large UK based home improvement chain.
And finally, we secured new business with a major Nordic truck manufacturer.
New business pipeline.
We ended the fourth quarter and 2023 with a robust pipeline of new logos and strong demand across our non retail verticals.
On the new logo front.
Witnessing strong momentum and expect a more logos in Q4 than we have done.
Q3 this year.
At some of our new large customer servers, we also witness fast to ramp up as they are willing to scale business more rapidly.
We're expanding our business with an existing programs and we expect to contribute from the meaningfully in 2023.
Partnerships.
Partnerships are increasingly playing an important role in our ability to attract new clients in.
In the Q3, two are new logos wins came through our partnership channel.
We also made progress in our large cloud partners with Microsoft Azure, we would confirm gold status.
AWS, we were recognized as a launch partner for their Etfs deliberate program, which focuses on application modernization across enterprises.
Google Cloud platform.
We have one of the largest number of <unk> and more all the it service providers.
In addition to Hyperscale or cloud partners with strengthen our alliances with SaaS and product companies and digital commerce data and advanced analytics.
M&A.
M&A continues to be an important component of our growth strategy. As a reminder, our M&A focus is on capabilities key customers and deliver locations in early September we successfully concluding raising primary capital one of the key reasons for this race was M&A.
Current pipeline is robust and we are actively exploring multiple acquisition opportunities to expand our capabilities complemented with our geographic expansion strategy.
During the quarter.
Rhythm Amex delivered some notable projects number one.
We're a global technology company, we proposed designed and implemented Snowflake integration drum business intelligence reports on Petabytes of data.
As a result, and users who are provided with enhanced reporting capabilities to drive the company's business and operational decisions.
This solution met all the required data service level agreements for large scale data management and resort previously observed challenges and maintenance capacity and scalability.
For a global technology leader in the cloud space <unk>.
<unk> was a key partner in the development of one of the core <unk> products dedicated to artificial intelligence driven product discovery capabilities.
Great dynamics contribution included end to end worthy engineering of the product and enhanced customer Onboarding tool suite.
The product gives end users at Taylor product discovery experience and dramatically increases conversion through better search and recommendations relevance.
At a leading financial services firm, we help the client to modernize the primary cost 'cause customer portal.
Our solution provides greater flexibility and speeds up integration processes with each business units. The modernized portal provides end users also with a more streamlined experience and highlights financial products and services relevant to their needs.
We're one of the largest manufacturing service company, we develop an intelligent cloud based module with their supply chain management system. This module aggregates information about excessive stock matches against the contractual terms and allow us to generate clean.
<unk> is currently in production and has helped our client and collecting additional revenues.
With that let me turn the call over to our new <unk>.
Who will discuss Q3 in more details.
Thank you Linda and good afternoon, everyone. Our third quarter revenue of $81 2 million exceeded our guidance range of $78 5 million to $80 million and was up four 9% on a sequential basis and 41% on a year over year basis.
During the quarter, our revenue was negatively impacted by the weaker euro and British pound against the U S dollar.
On a constant currency basis, our revenue growth on a sequential and year over year basis was five 8% and 43, 1% respectively.
Better than expected revenue in the quarter was driven by strong demand from our large technology customers and revenue contributions from recent logo wins.
TMT, our largest vertical represented 32, 4% of our third quarter revenues and grew 12, 6% on a sequential basis and 49, 7% on a year over year basis.
We witnessed strength across our customer base with some of our largest technology customers.
Where we grew business across existing and new programs.
During the third quarter retain our second largest vertical represented 31, 1% of our revenues and decreased <unk>.
8% on a sequential basis and grew 38, 3% on a year over year basis. The sequential decline was largely driven by some customers who are more cautious in spending with the ongoing macro concerns.
We expect these concerns to persist in Q4 at some of these customers.
Here are the details of the revenue mix of other verticals, our CPG and manufacturing represented 19, 8% of our revenue in the third quarter and decreased <unk>.
2% on a sequential basis and grew 43, 3% on a year over year basis.
Slight decline on a sequential basis came from the decline at some customers and this was offset by growth at our largest CPG customers.
Finance represented seven 5% of revenue increased 23% on a sequential basis and grew 16.3.
<unk>, 3% on a year over year basis on a sequential basis, we witnessed growth across most of our customers tied to financial services banking and insurance and finally, the other segment represented nine 2% of our third quarter revenue and was up one 1% on a sequential basis.
We exited third quarter with a total headcount of 3746 down from 3763 employees in the second quarter of 2022 and up from 2884 in the third quarter of 2021.
The head count reduction was driven by a couple of factors.
First.
And a company wide level, we streamlined our engineering bench.
In the quarter, our pace of hiring moderated to align with demand.
That said, our average billable head count increased on a sequential basis in the third quarter over the second quarter and this partially contributed to the increase in revenue.
At the end of the third quarter of 2022, our total U S had commerce 322, or 9% of our of the company's total head count.
And remained on the same level compared to the second quarter of 2022.
And down from 11% on a year ago quarter, the year over year decline as a percentage of the total head count was largely driven by greater mix of non U S head count our non U S headcount, which we sometimes refer to as offshore located in central and Eastern Europe , UK and Netherlands in Mexico and other locations was 3424.
Our 91% of our total head count.
In the third quarter revenues from our top five and top 10 customers were 44, 5% and 61.
And 1% respectively.
In the second quarter, our top five and top 10 customer concentration was 44, 2% and 62% respectively and during the same period, a year ago, our top five and top 10 customer concentration was 42% and 58, 2% respectively.
During the quarter, we had a total of 200 customers down from 208 customers in the second quarter and 215 customers in the year ago quarter. The sequential decline in our customers was largely driven by our commercial business, our docks, which we acquired in December 2020, as a reminder, we.
Only count the revenue generating customers in the quarter and do not include customers or enacted during the quarter.
Moving to the income statement, our GAAP gross profit during the quarter was $32 7 million or 43% up from $28 9 million or 37, 3% in the second quarter of 2022 and up from $25 3 million or 43, 6% in the ear.
In the quarter.
On a non-GAAP basis, our gross profit was $33 million or 47% up from $29 1 million or <unk> 37, 7% in the second quarter of 2022.
And up from $25 4 million or 43, 9% in the year ago quarter.
The sequential increase in gross margin as a percentage of revenue was driven by a combination of third quarter seasonality with more working days and favorable FX trends with the stronger dollar.
non-GAAP EBITDA during the third quarter that excluded stock based compensation depreciation and amortization expenses related to geographic reorganization transaction and other related costs was $17 1 million or 21, 1% of revenue up from $13.
$3 million or 17, two person in the second quarter of 2022 and up from $12 5 million or 21, 6% in the year ago quarter.
The sequential increase in EBITDA, both in terms of dollars and percentage of revenue was due to a combination of higher levels of revenue flattish.
Flattish operating expenses and favorable FX trends.
Our GAAP net loss in the third quarter totaled $6 7 million or a loss of 10.
Based on a share count of 69 million shares compared to the second quarter loss of $13 2 million or 20.
Per share based on 67 million shares and a loss of $5 million.
Our <unk>.
Per share based on 63 million shares in the year ago quarter.
The sequential and year over year increase in GAAP net loss was largely due to higher levels of stock based compensation and geographic reorganization costs offset by higher levels of revenue.
On a non-GAAP basis in the third quarter of our <unk>.
non-GAAP net income was $11 million or <unk> 15 per share based on 72 million diluted shares compared to the second quarter of 2022, non-GAAP net income of $8 2 million or <unk> 12 per diluted shares based on 70 million diluted shares and $7 9 million or 11.
<unk> per diluted share based on 69 million diluted shares in the year ago quarter.
The key.
Okay.
Now on the other side if you look at the.
The size of the quarter fourth quarter as you know we tend to see furloughs, we tend to be having fewer billable hours, so youre going to be a little bit seeing some of the headwinds there. So when you look at the revenue Josh and actually extrapolated from Q3 to Q4, you could see.
We're going to have.
To continue maintaining some level of Opex control and the drop in revenue is basically kind of flows through.
Onto the EBITDA front, you could see that but.
But largely the reason for there is.
Is a number of workdays.
And youre going to be seeing some level of conservatism. This.
Terms of some of the other customers.
I just wanted to add Josh that the.
Q3 results.
By and large where was I.
Given the guidance too.
The public when we were heading.
IPO.
More than two five years ago.
42, 40, <unk> and very few companies can accomplish that.
It wasn't <unk>.
Our stretch goal then, but we were hitting a lot of obstacles over time.
The World Normalizes, that's where we wanted to do that we believe will be.
When the time comes to the little bit more stable growth.
I think we just gave an inspiration to the community to show, where we touch remains stable.
Okay.
Alright, Thank you very much.
Thank you Josh Thanks for that question.
Next question comes from the lie of Hawaiian Poddar from Citi. Please go ahead.
Yeah, Hey, guys. Thanks for taking my question.
I want to start by touching on the situation in Ukraine and with the recent Escalations there.
Infrastructure and spilled idiots unplanned blackouts have you seen any headwinds in terms of productivity or utilization out of Ukraine.
Back to your client conversations at all.
Right so.
The short answer is no.
But.
It would be too simple to answer Ryan.
Months and months ahead.
We were preparing for the <unk>.
What is called in eastern Europe , the heating season, right, there's a lot of centralized activities.
We of course did not know about that her units attacks of Russians twice during October would renew in them.
Whole situation, where the infrastructure had been a little bit more stress during the war, we need to be prepared in advance which would have been knock on wood.
Our people are safe.
We are adding more micro offices throughout the country, we actually plan to add up to nine of them just in by the end of November reached are providing even further autonomous control over the power generators water supply.
Supply.
Our Internet connectivity, and then Rob with Starlink and other services Sue.
We have a relatively smaller size of people, it's still the largest location by number but if you look at how we drive our business the dependency of enterprise businesses in parallel has been greatly reduced from the Ukrainian operation. There are some of the you know more.
Of the.
Business acquired from docs and little bit more driven by smaller companies startup companies, who are commercial where we call but by a large we are blessed to be better prepared but you never know what's going to happen in the future today, we're comfortable to say we are in good shape.
Got it that's good to hear.
And then touching on our vertical wells in the retail and GMC vertical in particular.
Brian real like around trends Youre seeing and for retail in particular is the softness youre seeing kind of a industry vertical of steam or is it more kind of clients and stuff like that on C. M C.
Focus on costs or hiring freeze Williams has a bunch of any change trajectories with your with your clients.
Well, we're not immune.
Retail is retail.
As we learned.
While lessons during the early Covid days with such an incredible decline of our relationship for a short period of time with US and department stores, we took it very seriously a majority of our retail customers.
Or not as much dependent on the.
Brick and mortar stores, so they're a little bit less affected that are more efficient and there is a blending to go into the.
Recession mode.
Plus don't forget we're close to the holiday.
Holiday season at the same time.
The usual suspects are putting in <unk>.
Same suspects, where there two years ago with surplus failure of two or three years ago. So there is a sequential decline.
Given by the cost savings, we expect it's going out less some period of time.
But we are compensating then we're stealing other businesses.
And another very important one on retail.
We do again is majority driven by features related to the new generation.
<unk>.
I wouldn't you know found the chest and say what are the most critical supplier we have but in many cases the core team still remains intact, which means gives you more expectations.
Net.
Industry comes back we will rebounds faster.
And those particular retail.
Got it thanks again.
Thank you.
Thank you Ryan.
Next question comes from Maggie Nolan from William Blair. Please go ahead.
Hi, Thank you.
Maybe to follow up on that last topic, a little box can you talk about how your retail client base comparison channel what it maybe looked like a couple of years ago in terms of any notable differences in the type of clients that youre working with now what type of projects that you're working on.
Yes.
You know us quite well by now and you've been in constant communications shoe the.
The critical path client relationship on the retail comes from the.
I seen logistics supply chain management, some key data analytics the factors areas of efficiencies on that rebalancing supply price optimization et cetera et cetera. So those are key areas of our relationship.
When it comes to.
General distribution declines, we actually while reducing overall revenue from the <unk>.
<unk> on the retail we brought a number of plants both in the U S and in Europe .
These clients tend to be more modernized in terms of their relationship or minimizing the impact for example of very painful layoffs right. So during the Covid time.
We had to shut down the stores. So the massive number of people had to let go some employers employees of the retailers.
Yeah.
Again, the distribution is different.
Focus of the product is different.
Other thing.
You've noticed again, it's some subtlety, but I think it's notable.
We have a fewer.
S based employees.
Good in batteries, but with retailers in particular, we started with a lower cost.
And it comes from near shoring, such as Mexico, and Jamaica, but it's also offshore and we're adding Indian couldn't change into that so we're not only prepared from the client base doubled product base, but from the cost efficiency when we relate to the retailer airplanes.
That's very helpful. Thanks, and then.
My follow up question is just can you elaborate a little bit on what you can streamline the engineering bench at <unk> and then are these efforts going to continue into the coming quarters.
Yes.
Yeah.
Some of the bench.
Related to the transition from huge Q2 Q3, when we exited Russia, who is kind of catch up some of those trials. So there was one area.
The other area is that.
We tend to look at again.
Our bench with the skill sets, which we project to be less relevant.
For the risk.
The recession time should be more efficient.
But at the same time, we have an incredible investment.
Injured in Georgia programs, so everywhere across all the countries, obviously, including Ukraine.
Others.
We signed University partnership with NGL ready and in Mexico.
Of course bullet for minor Armenia.
The other investments, which we do quite a bit.
We believe it's a perfect storm for us to continue to invest into the R&D.
Into the sales and development.
Subject matter expertise there is much more upfront preparation for our innovation proposals. So one thing, which I mentioned in the remarks, but I think it's very important to reiterate in answering the first question was you know as our clients come to the time where winner take it all.
I think on our peer group it also relevant for our business, so having a stronger more efficient front end organization with more customer consultancy capability architecture capabilities just.
Adding like life Sciences, and pharma just keep coming in so it's a great. It's a great now Andrew we had one big customer in order to customers is growing.
Quite a quite a.
Acceleration that's affected so when you look at the total head count that's one thing.
The other one which is not noticeable here, but it's also relevant there was some.
The commercial clients from the former docs, which hit some headcounts.
We.
We had to replace or reduce because there were less relevant several.
Several customers, which we decided not to continue relationship mutually because we were virtually.
Renaissance of the old pre acquisition time.
Which made no sense for both parties. So if you look at the <unk>.
Billable influence and relevant bench, because actually it has grown but if you look at overall, we see a modestly.
That's really helpful. Thank you and congrats.
Thank you so much.
Thank you Maggie.
Next question comes from <unk> Chen from kicking Oregon.
Okay.
Thanks for taking my question.
So limit like the war.
Projects that typically get any like like.
And I can maintain vertical all other verticals given the macro environment.
What's your line of sight, maybe based on the past experience when stuff got delayed but your line of sight on.
Bank clients come back with those projects typically like how much of a lag our relationship we can say that in terms of like the one that gets delayed.
Moving on.
Somewhat February so there are some.
Some few notably the clients, which may be moving.
Not as material most of them happens more temporary so.
We get we get ourselves into conversation with the senior leadership because obviously.
We want to make sure not only.
And as discontinued.
Our project will be continued because we can't guarantee to keep the bank just in waves to the <unk> return rates too as I mentioned earlier.
Please.
Most of the time negotiated a core team.
And they understand from the past.
Recessions and declines is very critical to maintain continues and thats, what we provide but then in some cases.
We find alternative brunches.
There are some more critical area and our customers would like to achieve in the workplace.
If you look into from the Big Fissure perspective, we're still a fairly small company.
It is one of the very key clients.
You guys.
Our good and well be good across all your geographies one of the big conventions area of discussion.
Of them, it's India.
Does your two Sigma will be shifted to the right in other words, the stretch denim deviation or the value of our people we will remain to be much more technically sophisticated regardless of the locations. So that gives us a little bit of leverage with our clients and of course, there are many more color points I will.
Be able to provide by the end of Q4, because there are some discussions to undertake it when we are entering this difficult for the industry period.
A bit more.
Consequently, the way yesterday I was privileged to be in a small conference.
Sure.
Distinguish leader.
Jamie Diamond.
And a small group of people, who was saying that regardless all the world challenges United States has probably been more shielded one because we owe that to ourselves.
Spend money, which we built into our savings accounts more than ever and with other people need to cover the debt with a $1 each earn recovery the depth that we have.
It's very much resonates with my thinking about how we approach our business.
And then second.
For our tech vertical it was great to see like the vertical being so strong despite.
All of those needs, though around hiring phase layoffs.
Some of the large tech companies.
How should we think about like the defensiveness of the working for your technology clients like the nature of work that you do.
Is that driving towards that's relevant for clients.
Or is that like just the type of projects like.
That's changing within that vertical maybe youre doing more cost saving projects for them instead of maybe digital transformation in the past like what's driving strong growth in tech and how definitive that kind of productivity.
Yes.
I don't want to anger big customer tumors that I'm going to go into a lot of details.
They are probably going to read the transcripts as well so I'm not going to say my guys are the best.
That's correct.
We have very high capability global team. The most important part I know there there are some of the.
Other earnings calls in the past few days.
Some.
Most of them.
I don't see the usage of cost savings from the <unk> credits.
Of course, the cost saving is there, but it's all about mainstream operational capabilities. So when I talk about one of the largest customers. There is a lot of articles where the.
The <unk> handsets are produced and how it would work and what's the supply chain logistic. We've been we're proud of those kind of elements.
So.
I'm very humbled, we have elevated.
<unk> two very senior level people to amendment scary when you get to the front of this.
Very large decision made a multimillion dollar project, but they take it seriously because again, we are objectively contributing to very strategic elements and those elements are growing.
So I would not say we are in a defensive develop equipment for the cost savings I think are again driving the key elements witness testing.
Areas, which today relates to the manufacturing supply chain logistics is their e-commerce.
Optimization areas and Thats, just what we do so digital is still there, which we can talk forever what elements.
Are involved but I believe very bullish that this.
Despite all these challenges our core value remains to be earned.
<unk>.
Thank you.
Okay.
Thank you.
Next next question comes from the life from Bryan Bergin from Cowen.
Please go ahead.
Hi, guys good afternoon, and thank you.
So yeah, good strong momentum here in the new logos that you're citing there I'm curious are the priorities of these new clients the programs that youre engaged with them is it any different with these new engagements relative to your existing base as it relates to efficiency programs versus those typical growth in revenue generation assets.
Net brand the disadvantage to be later in the queue right.
Yes.
I tried to answer this question already several times.
But I know, where it's coming from and I respect that I think.
The efficiency portion.
Beyond the revenue generation.
Ways, how revenue is being generated for some of those notable clients are very different I would not divulge into the specifics because it's very sensitive to their speed.
Civic strategies, but I have to assure you what they are asking us to do is revolutionary different crowd from power they generate the business before don't get called by very senior leadership to provide services for something.
Linear because they are playing Joe suppliers of doing this so it's it's really truly aligned when we've done in some other businesses as well.
Okay and then.
Just talk about current visibility in the business that you have is it any different right now versus a typical year.
At this stage of the year any early indications as you think beyond <unk> any guideposts.
Yeah, Yeah been prepared so that you already asked this question through my earlier conference today right.
I could ask Neil to repeat the question, we see the growth of the return to profitability in the <unk>.
Sorry.
The increased revenue starting second half of next year would be the pleasure is and so <unk> not to say that to you, but we see similar trends.
In terms of the Q4, you have noticed we came up with a very modest decline from Q3 into Q4.
Sequentially.
It's a bit unusual for us.
And the reason we've done it in because you will there is a little bit of a variance of visibility.
December was Q4 lows.
Again, we're still a smaller company with a big company.
<unk> and are enrolling this holiday season may make an impact so I'm not implying that our number reserve way too conservative there are somewhat conservative.
I believe that there would be some fight for.
Sure.
Battlefield four the ground.
Yes.
I learn high Enel.
Wanted to just maybe drill into utilization.
Is it in the current quarter, what does the trend line, you're expecting given maybe some of the moderation in demand and then I guess, what I'm really getting at is when do we see hiring ramp back up.
In terms of when you see demand start to improve how much sooner do you have to start ramping up recruiting to be able to meet that demand. So maybe a couple of questions sort of all lumped in around utilization and recruiting plans.
Let me answer the easy part.
Thank you.
<unk> struggled with the numbers right. So.
The recruiting the room has not been flooring.
It's just been.
Modified in terms of the regional strategy.
There are areas, where we continue to push very hard with the group one of the notable example is India. The contractually people are required to stay for several months before the.
They can change the the jump to those offers are being made.
So those places we definitely.
Continue to push for.
Expedite its rollout.
Rollout all of there is another good example of this because we believe that.
Tom or early part of next year, we'll see that kind of a.
The churn and then we need to ramp very quickly.
And I don't want to run.
The intelligence that we need to prep people with very high technical level of training, so you'll see a little bit of this gap because we are not only hiring reached insurers, but we are planning for the bench now as we become bigger needs to become more intelligent because my inspiration is going to have a significant increase of the revenue.
The company, so we need to play a little bit our long passes throes right so to catch them.
<unk>.
The zone of your competitors, so we need to run.
<unk>.
New capabilities. So the bottom line, we have not slowed down on the strategic hiring were not slowing down on the training of the people you just see the Sim re adjustment of the workforce so to see and of course. The another thing is we are much more competitive with scaling of hiring so we can hire on the <unk>.
Various locations there before we will be adding new countries again I wanted to save some sensations and three months was two boards, but we blend and way ahead of the time in various locations as well, but now the yet so as yours. So make when it comes to utilization this quarter it trended up relative to last.
Operator.
Third condensate did talk about the billable head count going up and we talked about the pension numbers. So a lot of moving parts.
Net net our utilization window.
Got it.
And then maybe just turning to the supply side, given that again that seems to be some moderation in demand that does tend to ease some of the supply pressures. So could you just talk about where attrition is today your expectations around that and do you think wage inflation might also start to maybe ease a little bit which should help profitability in the face of maybe slightly slowing demand.
<unk>.
Again, it's interesting.
If you look at the.
The cyclical behavior during the Q3 and starting in Q4.
Demand is not flooring.
<unk> is continuing to be strong the on X. Some of the existing business. There is some softness right. So there is kind of a REIT.
Relocation of assets right now.
And that's even more difficult task than just flipped slight growth. So we're doing well in terms of the.
The supply.
Attrition is probably one of the lowest level of the volunteer attrition as we experienced.
Again.
In certain regions there comfort region, we're helping people tremendously theres no reason for people to run.
In other regions that people would anticipate some of the sources and some other places where a limited new bids with a very well newly hired every advance leadership team. So people are kind of looking to us to see and we're going to be any different from the other employees. So.
Do you have any color on that.
So.
Overall, I feel very comfortable at this point.
So from a number of point of view, we're not going to quote it but.
To me <unk>.
And Terry a wind down.
Last couple of quarters, obviously, we had some involuntary component as we moved out of some places but.
As Leonard Pointe.
It was a nice drop from a voluntary point of view this book.
Great. Thank you so much for taking my questions.
Thank you Benjamin.
Thank you Mike.
At this point and we have no more questions in the queue.
Okay Paul.
Q&A session for today.
I will now pass the call back to that earnings for the closing comments.
Okay.
Thank you everybody for joining us on our call today.
Our solid results and performance.
Our company's strong value to customers and incredible resilience.
Our track record of successfully delivering large and complex projects and our reputation as a high end engineering provider is driving our growth.
I'm confident that in the course of 'twenty to 'twenty three we will continue to see strong momentum as the company continues to expand our relationship with global enterprise customers to look forward could you mean, you a business update early next year.
Ladies and gentlemen, this concludes today's conference call. Thank you so much for participating you may now disconnect.