Q3 2022 Clearwater Analytics Holdings Inc Earnings Call
In captivity.
Pure analytics won the top award at the.
2022 U S capture of the New awards and the software solution category.
In addition to external success, we care deeply about the performance and development of our people.
This year, we are proud to share that we grew our workforce by approximately 20%.
As we continue to hire around the globe.
We are dedicated to making investments in people related programs that help make clearwater and engaging viibryd and rewarding place to work.
Overall, we are proud of our continued momentum and our many accomplishments in Q3.
Before returning with a few closing thoughts.
I would now like to hand, the call over to our Chief Financial Officer, Jim Cox to provide more details on our third quarter financial performance as well as updated guidance for our fourth quarter and full year 2022.
Thank you Sandy and thank you all for joining us it is gratifying to report our Q3 results.
Despite the continued downturn in the market prices in both equity and fixed income securities. During September we delivered 19% revenue growth exceeding our guidance range by $1 6 billion. These results reflect our continuing focus on execution.
In a challenging environment.
As a testament to the market leading capabilities of our solution.
We were able to partially offset market headwinds with the execution of price increases and a new base plus pricing model and presently we have rolled out these changes to 49% of our annualized recurring revenue run rate.
We reported $18 8 million of EBITDA missing our guidance by $200000 due in part to $700000 in additional commission expense from our strong bookings and price increases.
Moving now to detail about our third quarter financial results.
Please note that our results will be discussed on a non-GAAP or adjusted basis, unless otherwise noted.
As of September 32022, annualized recurring revenue or <unk> reached $303 6 million.
A $46 5 million increase over September 32021.
Representing an $18 one increase year over year again.
Due primarily to continued strong new client acquisition and additional asset loading onto our platform from existing clients.
The increase in annualized recurring revenue was partially offset by the decreases in client asset on the platform.
Faulting from decreases in fixed income and equity security prices during the first nine months of 2022.
This resulted in a 5% reduction in the growth of our annualized recurring revenue.
That revenue retention was 103%, which is a decrease from the 104 on June 30.
The new pricing construct has partially offset the decrease which is resulted from the downturn in both equity and fixed income market.
Although net revenue retention was impacted by these market changes.
<unk> revenue retention remained consistent at 98% for the 15th consecutive quarter.
Gross profit in the quarter.
It was $57 3 million and gross margin came in at 74, 8%.
Gross margin continues to be resilient as we continue to execute on operations for new client growth, including our investment in international markets.
As a result, we expect gross margin to remain at a similar level in.
In the fourth quarter.
Research and development expenses in the quarter were $19 9 billion or 26% of revenue an increase of $1 9 million from Q2 as we successfully grew our R&D head count by 39 people in the third quarter.
These additional R&D headcount will augment our initiatives with additional.
Additional functionality for alternative investments like Clearwater Lps.
And incremental international GAAP reporting.
Sales and marketing expenses in the quarter were $10 $2 million.
Or 13, 3% of revenue up 30 basis points year over year as we hosted Clearwater connect in person in September .
General and administrative expenses in the quarter were $8 4 million or 10, 9% of revenue up 70 basis points year over year as we continue to annualize the impact of incremental public company costs.
<unk> from our initial public offering last September .
Adjusted EBITDA in the quarter was $18 8 million or 25% of revenue an increase of $1 $8 million over Q3 2021.
Below operating expenses on our GAAP income statement Youll see that we incurred $2 $6 million in tax receivable agreement expense in Q3.
These expenses are incurred in lieu of tax expense when we utilized tax deductions subject to our tax receivable agreement or TRA.
Absence, the utilization of tax losses and reduction.
We would be projected to have taxable income in 2022, primarily because of capitalization of R&D expenses and less stock based compensation tax deduction than our stock based compensation expense.
Absent the up sea structure and tax receivable agreement.
Income tax expense would have increased by $3 1 million and the PRA would be zero. So the PRA is effectively reducing these nonoperating expenses.
About $5 million.
Now, let's turn to the balance sheet and cash flow.
We ended the quarter with $291 $5 million of cash cash equivalents and short term investments.
$51 1 million and total debt, resulting in net cash holdings of approximately $240 million.
In connection with the jump technology acquisition, we will be utilizing approximately $75 million in.
In the fourth quarter free cash flow in the third quarter was $12 $8 million, reflecting a conversion of EBITDA to free cash flow at 68%.
And free cash flow included $1 9 million of capital expenditures.
Focusing now on guidance for the fourth quarter of 2022.
We expect revenues to be in the range of $79 3 million to $81 3 million this quarter.
This guidance assumes asset prices at September level.
And approximately $1 million and revenues from the jumped technology acquisition.
We expect the fourth quarter adjusted EBITDA to be in the range of $22 2 million to $23 two.
With adjusted EBITDA margin is expected to be higher than the third quarter of 2022.
For the full year 2022.
We are increasing our revenue guidance, which is now expected to be in the range of $300 million to $302 million, representing approximately 19% to 20% year over year growth.
We expect adjusted EBITDA to be in the range of $79 million to $80 million.
The guidance, we provided previously for all other measures remains unchanged.
To summarize.
In the third quarter, we continued to win large new logo clients and expand into new geographies and adjacent market, including our announced pending acquisition of <unk> technology.
In addition, we are very satisfied with our progress transitioning our clients to the new pricing construct.
We look forward to further updating you on our progress on future calls with that I'll turn it over to sandy to provide some closing thoughts.
Thank you Jim.
We're all very happy with Q3.
Not only because of solid execution within the quarter, but how it sets us up for Q4.
And calendar year 2023.
Our continued progress in booking.
And selling to clients of all sizes across a variety of industries.
Coupled with the continued success in transitioning our commercial contracting and pricing model.
Have improved the quality of our business and allowed us to execute with confidence.
Investing in the strategic acquisition of jumped technology will allow us to continue to innovate for our clients and prospects increasingly complex speaks.
While expanding our mission to now being able to serve the full investment management lifecycle.
And eventually.
Revolutionize the world of investing.
With that let me turn it to the operator for questions.
Thank you.
I would like to ask a question. Please press star followed by one on your telephone keypad if.
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The first question for today's call comes from the line of James Faucette from Morgan Stanley . Please go ahead. Your line is now open.
Hey, guys, it's Michael <unk> on for James Thanks for taking our questions.
I just wanted to try to get a little bit more color on where the pricing conversation stand. So I guess, if you could today what percentage of clients and what percentage of total revenue are live on the new pricing model and how do you sort of envisioning envision that trending throughout the balance of 'twenty two.
Hey, Michael Thanks, so much.
This is Jim.
As Sandeep mentioned.
<unk>, 49%.
Our annualized recurring run rate.
Is on the new model.
Or in the new commercial.
Construct.
And we expect approximately 80%.
Of that to be done by the end of the year, that's all on a revenue basis.
For context, when we announced this program in Q2, we talked about waves, which was more of a client count.
And.
And so in Q.
You recall, Michael we had three ways.
We talked about how in Q2, we had communications with 61%.
Wave one.
That number has gone up to 81%.
At the end of Q3.
And then wave three which obviously is our largest and most sophisticated clients that was only a 10% when we spoke before.
And we're up to 39% there so.
So that's a reasonable proxy for some kind of a blend of the client account, but the overall kind of.
Kind of impacted revenue number is 49% and expect that to continue to grow throughout the end of the year.
It's Andy do you want to give a little color just one more thing Michael is that when you say, 49% of declines we have signed the contract with the new contract. It doesn't mean those are fully applicable yet right.
So they are going to be applicable towards the end of the year and the video of next year. So yes. So I just want to make sure you understood that nuance.
Got it that makes a lot of sense I appreciate that and then maybe maybe on John I. Appreciate you guys hosting a call on the acquisition announcement, maybe just quickly on.
Aside from the clear geographical diversification benefits, maybe if I just think back.
A couple of months ago to the IPO process.
<unk> and Oems capabilities, Werent really front and center right. So I guess, how do you sort of think about.
John allow.
Allowing you to sort of more meaningfully or more quickly penetrate.
What could be a relatively difficult asset management environment today.
Thank you for asking that but let me try and explain how we see it.
BMS and ointments by itself was not attractive and frankly would not be attractive even today.
But what happens is when you look at some insurance clients. They are starting to manage the order book.
So, let's imagine the loan book and the other accounting with us than to Additionally, get BMS limits from us because of very good add on and a very good cross sell if you will so that was 1.2 wells Michael that.
Some part of the asset management industry. When you think about hedge funds private banks family offices.
They tend to buy in.
Integrated end to end platform right and we obviously did not have the front end.
Having jump allows us to bring that capability not just in Europe , where previous here to the U S. So those those things made a difference the other big one Michael was around performance.
They have a really good performance module, which is often more.
Separately or in conjunction with the new order platform.
And so while we all already do performance. This gives us enhanced performance and it's something which we think a number of our current clients with bi.
Lastly.
They do really good work with unit linked funds.
And as a matter of fact, it is market leading in Europe .
This is a capability we had between limited capability.
Using jump we can go back with <unk> funds.
Sales to our current client base and prospects. So we think.
Really really nicely and Thats why we looked pretty hard I think to get it done as reasonably quickly as we could.
Got it thanks Sandeep thanks, Jim.
Okay.
Thank you.
Today's question today comes from the line of Pizza Heckmann from D. A Davidson. Please go ahead. Your line is now open.
Good afternoon, gentlemen, thanks for taking the question just on jump.
Correct me, if I'm wrong, but I think.
On the deal call you had given US 2021 revenue and talked a little bit about the growth rates and now we've got a little bit of shifting FX, but.
Just ballpark in terms of revenue and margins on an annualized basis.
For 2023 are you prepared to give that in today's call.
So I think what we've provided Peter was.
Approximately $1 million in Q4.
Okay.
The reason why we gave it to approximately.
We just don't know when exactly we're going to close the transaction in the fourth quarter. We're very confident we will close it in the fourth quarter.
As we look forward historically, they've had that kind of call it roughly $12 million and they've been growing nicely.
Our run rate on an IRS basis.
So if we assume that the kind of consistent you could you can kind of build to the growth.
I think we're reluctant to give specific guidance.
<unk> jumped until we actually close the transaction and do that work. So I think we'll be fulsome in providing you.
Kind of that and be an explicit in our 2023 guide.
As it relates to how much junk will grow what is or otherwise.
<unk> organic growth in 2023.
Okay.
We'll have to follow up on that then and in terms of when you talked about 500 basis point headwind to net revenue retention in the quarter. There was the cumulative effect from the <unk>.
First three core I mean really the trailing four quarters, but.
The impact from market action.
That is the cumulative effect of that market action over that period of time, yes now.
I think we.
Believe that that impact would have been more significant.
Had we not modified the commercial construct and so.
What youre seeing is the actor contract impact.
After contract changes impact.
Of that market.
Peter if I could just add to that.
Look we think that when you just look at what we are delivering this year is 19% to 20% growth year on year with this 5% headwind.
I think we just do the math you can see that the business had been.
Absolutely as robust as you would expect right now thats not a good enough answer so what we have done is obviously welcome.
On the client contracts and so we expect this volatility.
We essentially mitigated next year.
Below that below capacity, 5% youll see that the business itself is performing really really well.
So that's the point, we're trying to make.
Okay.
That's very clear.
And just lastly.
Remind me, but I think.
The jump clients only small handful were also already Clearwater clients correct.
A very very small handful you would say that.
The client count was roughly 70.
In French in French speaking geography.
Yes.
Interesting about that is that you are really going to a geography, where we were.
Not represent deliberate hall and gives you the 70 clients. So you've got immediate presence in the market, which it takes a while.
So that's a chunk of our setup.
Check so many boxes.
Right right, Okay I appreciate it.
Thank you thanks.
Thank you.
The next question today comes from the line of Richie Deloria from RBC. Please go ahead. Your line is now open.
Wonderful thanks, guys. So much for taking my questions and appreciate all the incremental color on today's call.
First I wanted to go back to the user conference. So when we're talking to customers out there one of the things that they seem to really like about Clearwater was their ability to shape the roadmap and the fact that you listen to their feedback over time.
Would be curious having hosted this conference after.
Period of not doing it because of Covid was there anything that you saw in terms of feedback from customers that really stood out to you either in terms of your current products or kind of.
Future products features functionality that you'd want to discuss and then I've got a quick follow up.
Sure I think that.
What was great Rishi and by the way thanks for coming out and.
By the way all of your welcome at our client conference hopefully youll be clients by that.
As well, but.
So I think that there was great alignment amongst all of the clients around kind of where the roadmap is going what we're doing to see the tangible benefits that folks were seeing was.
To see that kind of come to fruition in a timely way was compelling for that but one thing that I think really knock our socks off and this is nascent and we don't even talk about it yet with investors, but it is the opportunity that.
With the $5 nine trillion in assets flowing through our platform provides that to provide insights to.
Our clients even on an in an optimized way I think we shared that in a few different sessions. Some smaller session. Some broader session. Just a sprinkling of some of the insights once you start applying machine learning and artificial intelligence.
It's a really exciting opportunity and to hear the reaction from clients.
How useful and how they could see how it could work even without us even imagine and that.
Co innovation with them on that sort of an opportunity was to me personally really excited sandeep.
One other thing I think we saw a lot of issue was.
Clients continue to be under pressure.
So there continues to be under pressure to manage cost more aggressively to do more so we got a lot of requests about what else can clean water to.
In adjacent spaces to really improve the operation So a lot of interest in our roadmap.
Sort of.
Frankly, just relief that we're going to continue to invest in our platform to make it better and sort of address more of their problems.
Comfort.
We obviously enjoy meeting people, but just having customers get here that validate what we are doing and frankly changed somewhat what we were doing.
It was really really good.
Great that's really helpful.
And then one for Jim.
Maybe specifically so you talked about wanting to get 80% of.
Kind of the revenue base on the new subscription model by the end of the year.
Is that kind of happens and you slowly get closer and closer to that 100% would you consider.
Yeah.
Producing or highlighting our poe as a more relevant disclosure since it will be more upfront and more contracting rather than on the variable.
Based.
Pricing model.
Let me walk you through what.
But the pieces of the new commercial construct are just so that everybody's baseline on that so that folks understand that so the first piece is.
Our base model, which really reflects call it call it add on.
Annual fee.
Which by the way.
We we would move to that RPI view, if we were actually doing that annual billing upfront, but presently we continue to build monthly under that but it's an annual fixed fee.
Based on the full <unk> that the client has on their current book of business. So Thats step one so we've set kind of a base mark for that.
Then secondly, there continues to be that element of our scaling of the fee based on the growth.
The clients business tick.
Typically thats through their AUM balances.
The third piece is that we've really drawn a box about what core Clearwater is enabling us to sell separate modules discretely and then lastly, there is a annual increase.
That base fee to continue to drive that through.
And so I would say.
We see we will.
As we continue to evolve.
One more thing I'll say I'll call back.
For our new clients.
I think the acceptance of this model.
<unk> been incredibly hot.
That's been terrific as well as with our.
Going back to our existing clients.
So as we move to that final staff.
Invoicing that annual base fee annually in advance that would be when we would pivot to that <unk>.
Model.
Got it that's really helpful really appreciate the thorough answer thanks, thanks, so much Jim.
Thank you.
Thank you.
The next question today comes from the line of Camille Mccarthy from William Blair. Please go ahead. Your line is now open.
Hi, everyone. Thanks for taking my question.
Just first on the pricing model.
The strong progress there I just want to follow up on.
How the wave three is progressing can you provide maybe some more color on how you approach. These more complex conversations how the change is being received by the larger customers and where are you seeing the most pushback if any given the favorable pricing in this market with the existing model.
So I'm going to say thank you for the question.
I don't think we see real pushback I think literally.
Almost to a client the clients have been receptive.
Engaged with us, but it does take longer.
When you talk about the lease with clients the numbers enrolled are obviously higher.
And therefore, there is resistance to getting it done and it takes a while so that's how I would characterize it.
You have seen any difference in.
In.
The constructive nature of the conversation, we just have it usually takes longer.
Two months.
The market is something where we see.
And I think the acceptance in corporate and insurance is is almost universal and.
In asset management.
A little more time to kind of walk through that with them.
Yes.
That's helpful and good to hear and.
And if I could just follow up on a question on Europe can you update us on how demand is trending there in what countries have you seen the most traction and have you seen any changes in customer conversations in recent months.
Yes.
You also Europe .
Just have a really strong pipeline I think we disclosed that 15% of revenue now.
Is international so that's huge from last year. If you remember so we've been really successful with Europe . We are very bullish on Europe frankly, the acquisition of jump in Europe is a little bit testimony to the fact that we think we can grow really quickly. It just takes a while to set up these offices.
Hire all the people.
That's why the acquisition of <unk>.
So we continue to expect that.
Okay.
Strong growth there I think introduced we've added 30, new logos in Europe .
Only about 30, new logos there so the unknown.
Going on as well as we think it could have also a little bit excited that we had.
<unk>. This is one of the larger insurers in Asia.
So we're really excited we got.
First client in Australia.
And.
This was good with the team there it is with them calling in so we really we think all of the international business is going quite well.
Okay, that's great to hear and I appreciate the color. Thanks again.
Thank you.
Okay.
Thank you.
The next question today comes from the line of Ella Smith from J P. Morgan Chase. Please go ahead. Your line is now open.
Hi, Thanks, so much for taking my question. My first question. So your revenue guidance would imply about 19% growth year over year would you say this increase is mostly due to new client acquisition versus pricing and would it be possible that your overall client count is actually north of 90% year over year by yearend.
So we're definitely growing from new client acquisition and we are also growing from asset from.
From clients.
Adding assets to the platform and so.
As we have kind of evolved as a company we continue to go up market.
And so as you see our total client count.
Ryan is going up nicely it is not going up 19%, but when you start looking at our clients that are larger than $100 and larger than 250000 larger than $1 million, which we disclose on an annual basis Youll see that those are those are ticking up.
And as you start to see the share of clients that are those larger clients youll see that operate.
That is really the mechanism to drive that 19% growth.
That's very clear. Thank you, we will be planning and for NASA.
Yes, because we like 'twenty more than 19, I think you're guiding to 90 million. So.
So we're not ready to concede the 20th weather yet.
Great very clear thank you.
My second question pertains to the jump acquisition I believe during the call in September you referred to in Ifr's discrepancy due to licensing I was wondering if you have any updates about the accounting nuances associated with the acquisition.
Yes, we're continuing to work through that with them as we move to U S GAAP and obviously.
And as we kind of.
Bring the jump solution into the cloud consistent with what Clearwater does that <unk> gap diminishes over time, but we're just still working through that as we work through the closing process and I think we'll be able to give you a full full debrief of that after Q4 once we've clubs.
Great. Thank you both very much I appreciate it.
Thank you.
Thank you.
The next question today comes from the line of Michael children from Wells Fargo. Please go ahead. Your line is now open.
Okay, great great. Thanks, I appreciate you taking the questions I mean, the retention rates are seem to be stabilizing here or at least the net revenue retention number is close to what you saw last quarter. You are clearly holding strong on gross retention rates yet again.
Is it fair to expect the net revenue retention too mostly stabilize around these levels given the gap is closing between where the gross numbers.
How does the transition that you're embarking on impact the expected trajectory there if at all.
Yes, I think that's a great great point.
And.
So I do think that we have.
Frankly, I think short of any Barry.
Impactful macroeconomic event I think I think we've seen the bottom and I think we would.
When you think of all the additional modules, we have and you think of the jump acquisition coming to fruition Theres a lot of levers we have to pull to start too.
Move that net revenue retention number.
North.
As we kind of look through.
This problem.
Yes.
I would absolutely expect all of these contract changes.
Turning to work on and have worked on to start to have an impact in Q4 towards the latter part of Q4 and the beginning of.
Next quarter, so we absolutely expect that number to improve.
And all.
Well, obviously barring something screens happening.
Yes.
We have been stabilized, but we are not happy with the number and we think it's going to be north of that.
Understood that makes sense just on the <unk>.
<unk> Youre, taking the top line up a touch on the beat issue, there's a little bit of a jump.
Assumed in there as well on the EBITDA, just sort of the fine tuning versus that number.
Moving up a touch in tandem with the top line is that mostly tied to jump as well or are there other impacts for us to just be mindful of.
The EBITDA side.
I just want to assume EBITDA no. We don't have anything of jump in there just a jump exactly of closing and all that is hard to forecast, but I'd like Jim said, we expect to close in Q4. So then the question of what's going on with EBITDA.
Revenue is sort of on plan and frankly, our ability to manage it as high because we believe investing in people.
Really the bulk of it. So then the question is how quickly do you want to ramp up our operations teams out in Asia and Europe .
That is really what this is about where we are with EBITDA. In Q3 is about we don't want to go any further below this number. So if we look at our Q4 guidance. It is meaningfully higher and we expect to do better than where we are and this is what we had said Michael last year that we like this about 25% or lower.
And.
Given at $24 seven that we expect to come right back to.
Higher number than that.
I appreciate you asking the follow on questions forming sandeep, thanks very much.
Yes.
What will skew for Rupert.
Yes, it's almost like 28% is on the guidance.
27% to 8% so when we saw the $24 7 million.
This amount the number 25, and we like both of them.
We have Clearwater connect.
<unk> had.
Some commission some nuances with.
Commission and we also had some nuances around the vesting of RF skus in the employee tax costs to that which caught.
Caught us out a little bit.
Really understand all that.
We have the ability to manage we think the investing has been fruitful responsible and.
We will continue to but we think Q4 will be.
More.
Possible quarter from an EBIT margin perspective, Michael we thought you would like the fact that we paid higher commissions in the quarter.
Okay.
Yeah.
Yes.
That's also a good point, thanks very much.
Thank you.
Thank you.
As a reminder, if you would like to ask a question. Please press star followed by one on your telephone keypad.
The next question today comes from the line of Brian Schwartz from Oppenheimer. Please go ahead. Your line is now open.
Brian are you on Bryan Your line is now.
You may be muted Brian .
Can you on mute.
Operator can you on mute.
Thank you Brian .
Nab has done.
Someone on mute ma'am of Sky.
Sandeep I wanted to follow up.
Kind of the big logos that you won in the quarter you gave us drivers in your your introductory commentary on.
On those wins, but I was wondering if it's possible to parse that out a little more or rent or rank.
In the sense that when these customers are buying the platform for you.
Is a bigger driver coming from them looking to replace legacy architectures to save money and what is a very tight budget environment that we are heading into.
Versus say the other drivers, which are really more about driving automation in the organization to help increase productivity.
Yes, Thanks, Brian .
We obviously have been very watchful simply because of the news coming out about the economy.
Just every management team I think it would be more workflows. So three things are driving the funnel right now right. The first one is <unk>.
People, who need efficiencies needed now they need it quickly to manage cost better.
Alright, so that is definitely a big segment of the prospect based on the client base, which needs to manage that so thats one.
Second one which is really interesting is.
People are looking at these market dislocations and buying books from other asset owners. So there are lots of acquisitions going on buying books getting into new asset classes.
And people want to do that in a bit of a hardie.
And then it's impossible to go set up a brand new architecture system for that coming to clear what to make some ready nimble we can buy assets in Germany tomorrow.
Assets in mortgages or whatever so there's definitely a class of people who are pushing them back and that seems to be the sole reason we're doing that.
And the third thing is it just risk people from audit committees and literally getting calls moderate some of these things.
We need to get to a risk in order to win.
Windows, Apparantly changing and volatile environment.
So so that drives it is just better control on a day to day management of risk and managing it better and being responsive to the market and so one of those three is what's driving it.
Still have some cases, where people are doing large scale funds financial transformations and advisement.
Sometimes you will have.
Our currently awarded clients go to another.
Our company and saying Wow. This is not the way to do it and they will bring us along.
If you think about these five elements.
I would hazard a vast majority of our prospects would fall into one of these.
Thank you and then one follow up for Jim just thinking about the guidance for Q4.
Is it fair to assume that there is still going be a slight headwind here from the customers that are still on the old pricing plan, we see.
Im sorry, going and then Jim are you factoring in the macro at all.
As you contemplated and initiated the Q4 guidance here today.
<unk>.
Yes, I think we.
When we looked at the Q4 guidance we.
Understood what the perspective of what the fed was going to do and it looked like they did exactly what folks expected them to do.
Today.
And so we did consider that as part of it.
As we as we looked into the guidance.
Thank you for taking my questions.
Thank you take care. Thank you Brett.
Thank you.
There are no further questions registered at this time, so I'd like to pass the conference back over to Sandeep <unk> for closing remarks. Please go ahead.
Let me just wanted to thank you all for your continued interest in Clearwater I think.
We've had a really good.
To date performance I think they've had headwinds, but we're really proud of the continued with Delaware and target.
20% growth rate for the year.
We're excited about that we are very excited also about <unk>.
Being able to make all these contractual changes one booking.
The right amount really throughout the year and really that was really important for calendar year 2023 is that if we had not done that we would continue to be subject to the volatility of the market.
We hope to mitigate that quite a bit. So thank you all are really appreciate your interest and your time. Thank you.
Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect your lines.
Okay.