Q2 2023 AudioCodes Ltd Earnings Call
Greetings. Welcome to Audio Code's second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please Ripley.
please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Roger Tuchin, VP of Investor Relations. You may begin.
Thank you, Holly. Hostlyly call today our Shabtai Alisberg President and Chief Executive Officer and a Rambru Vice President of Finance and Chief Financial Officer. Before we begin, I'd like to remind you that the information provided during this call may contain four looking statements relating to auto codes, business outlook.
future economic performance, product introductions, plans, and objectives related thereto, and statements concerning assumptions made or expectations as to any future events, conditions, performance, or other matters or forward-looking statements as the term is defined under U.S. federal securities law. Forward-looking statements are subject to various risks and uncertainties and other factors that could cause actual results.
to differ materially from those stated in such statements. These risks, uncertainties, and factors include, but are not limited to, the effect of global economic conditions in general and conditions in AudioCodes industry and target markets in particular, shifts in supply and demand, market acceptance of new products and the demand for existing products, the impact of competitive products and pricing on AudioCodes and its customers products and markets.
Timely product and technology development upgrades and the ability to manage changes in market conditions as needed. Possible need for additional financing. The ability to satisfy covenants in the company's loan agreements. Possible disruptions for acquisitions. The ability of audio codes to successfully integrate the products and operations of acquired companies into audio codes business.
possible adverse impact of the COVID-19 pandemic on our business and results of operations and other factors detailed in Autocode's filings with the U.S. Securities and Exchange Commission. Autocode assumes no obligation to update this information. In addition, during the call, Autocode will refer to non-GAAP net income and net income per share. Autocode has provided full reconciliation of the non-GAAP net income and net income per share to net income and net income per share according to GAAP in the press release that is...
Thank you Roger. Good morning and good afternoon everybody.
I would like to welcome all to our second quarter, 2023 conference call. We made this morning, given Iran Baruch, Chief Financial Officer, and Vice President of Finance of Odykodes.
Niran will start off by presenting a financial overview of the Core. I will then review the business highlights and summary for the Core and discuss strengths and developments in our business and industry. We will then turn it into the Q&A session. Niran?
Thank you, Shabday and hello everyone. Before I start my former remarks, I would like to remind everyone that in conjunction with our earnings release this morning, we will post shortly on our investor relations website and earning supplemental deck. On today's call,
We will be referring to both GAAP and non-GAAP financial results. The earnings press release.
that we issued earlier this morning contains a reconciliation of the supplemental, non-gab financial information that I will be discussing on this call.
We will be comparing our second quarter, 2023 results, to the prior quarter, as we believe, it provides a better catch of our financial performance.
Revenue for the second quarter were 60 million and increase of 1.4% over the 59.2 million reported in the first quarter of the current year. Services revenues for the second quarter were 28.5 million accounted for 47.
was $77.7 million compared to $77.6 million as of March 31, 2023.
Revenues by geographical region for the quarter were split as follows.
North America 47%, EMEA 34%, Asia Pacific 13%, and Central and Latin America 6%.
Our top 15 customers represented an aggregate of 55% of our revenues in the second quarter, of which 43% was attributed to our 11 largest distributor. Top results are as follows.
Gross margin for the quarter was 64.1% compared to 61.7% in Q1 2023.
Operating income for the second quarter was 2.3 million or 3.8% of revenues compared to an operating loss of 0.8 million or 1.4% of revenues in Q1 2023. Operating income for the quarter was 1.1 million or 3 cents per day.
non-GAAP results are as follows. non-GAAP gross margin for the quarter was 64.5% compared to 62.1% in Q1 2023.
Long-gap operating income for the second quarter was $5.7 million or 9.5% of revenues.
compared to $2.9 million or 4.9% of revenues in Q1 2023.
non-GAAP net income for the second quarter was 5.1 million or 16.
cents per diluted share compared to 2.7 million or 8 cents per diluted share in Q1 2023.
At the end of June 2023, cash, cash equivalents, bank deposit, marketable securities and financial investment totalled $118.5 million.
Net cash provided by operating activities was 2.2 million for the second quarter of 2023.
Days self-outstanding as of June 30, 2023 were 95 days.
In June 2023, we received court approval in Israel to purchase up to an aggregate amount of $25 million of additional ordinary shares.
The court approval also permits us to declare a dividend of any part of this amount. The approval is valid through December 27, 2023.
We declare the cash dividend of 18 cents per share.
Regarding headcount, as discussed last quarter, we undertook actions to reduce headcount to better align our cost structure to the current business environment. These measures were partially reflected in our second quarter headcount figures, ending the quarter with 946 employees, down from 978 in the first quarter. We expect full amount of headcount reduction and associated cost saving to be reflected in our third quarter.
Just last quarter, we undertook actions to reduce ad count to better align our cost structure to the current business environment. These measures were partially reflected in our second quarter ad count figures, ending the quarter with 946 employees, down from 978 in the first quarter. We expect full amount of ad count reduction and associated cost saving to be reflected in our third quarter.
Now, to providing an update on our guidance, we reiterate our guidance for revenues for 2023 to be in the range of 240 million to 250 million. We now raising our guidance for non-GAAP diluted earnings per share to be in the range of 55 cents.
to 70 cents compared to the original range of 50 cents to 70 cents.
I will now turn the call back over to Shabtai.
Thank you, Niran. I'm pleased to report second quarter of 2023 results with meaningful business activity improvement relative to the prior core in our key strategic areas.
We executed well in a challenging macro environment, with key growth engines, namely Microsoft, customer experience, and Voice AI growing nicely. We've also seen bookings experiencing measurable improvements relative to the last quarter. Importantly, core business leading indicators, such as pipeline, remain robust. Microsoft Mechanics
and we saw relative stabilization in non-core alliance, such as the service provider and IP forms, which were the alliance contributing the most to the drop in the revenue in the first score of 2023.
These factors, coupled with incremental OPEX savings from cost-cutting actions announced last quarter, provide us with increasing confidence to deliver on our commitment of delivering significant improvements in operating leverage over the rest of 2023 and beyond.
We made good progress in our enterprise business, now reaching 88% of our company revenue.
Microsoft related business in the core grew 12 percent year over year and 16 percent sequentially. Core to this growth was Microsoft Teams business, which grew 18 percent year over year.
Strong ongoing momentum of forward because live managed services continued, with annual recurring revenue exiting the core at 40 million and growing over 60% year over year.
Live total contract value generated in the second quarter grew 75% over the previous quarter.
strong live performance to date, puts us on track to achieve our target of 46 to 50 million.
objective for 2023, representing approximately 50 percent year-over-year growth. Zoom-related business grew over 20 percent year-over-year. We also executed well in our customer experience in conversational AI business with CX delivering seven percent growth year-over-year. Overall,
Talking about broad-based improvement in business trends that we saw in second core, it is clearly a validation of the strong competitive mode that we have built in our voice business. Even in the tight budget environment that we are in, enterprises continue to turn to industry leaders such as AudiCoD for voice connectivity services, unified communication, and customer experience sectors. What best exemplifies the competitive differentiation we have in our software and services solution is our recent live cloud, hosted pro contract, win.
with a tier one service provider. This deal enables migration of the carriers and customers to next-gen UC platforms, starting initially with Microsoft Teams PSC invoice, and then to other leading UC platform over time.
As a reminder, LiveCloud Pro is a white-label audio code solution consisting of managed SBC service along with service delivery portal for value as voice services such as contact center, recording, interaction analytics.
of meetings for enterprises tenants and user management. He put it to know that this carrier has conducted a thorough competitive bake-off process of deleting SBCE vendors in the market before deciding to synthesize another code solution.
Why did we come out on top? We won based on our best-in-class voice connectivity SAS solution in our broad portfolio of devices.
software application and services that is the
alike have a strong preference for reducing complexity in our unique end-to-end unified communication customer experience platform approach provides us with a significant leg up on our competition. While the initial value of this contract award size is small, the long-term revenue opportunity is large. As one, this carrier operates in a market that is the very early stage of cloud transformation. And second, significant absolute potential for our broader portfolio voice solutions. We are grateful for this trust that this tier one carrier is placing us.
as well as others that have made our live and live cloud managed services offering a rousing success. We look forward to providing ongoing updates on the progress in our long-term transformation to software and services revenue stream.
Before turning to detailed business segment discussions, let's quickly shift to profitability
Our second core 2023 non-GAAP earning per share was $0.16 in the core, exceeding our internal budget. We estimate roughly half of the earnings upside to the higher known.
gap gross margins and the balance to the lower OPEX in the core.
The second core non-GAAP gross margin was 64.5%, which improved from 62.1% in the previous core driven primarily by more favorable product mix.
The second quarter OPEX was 33 million, down from 33.9 million in the prior quarter, with a decline of triple to earlier than expected implementation of the cost-cutting measures announced last quarter.
Regarding ad count accordingly, we ended the quarter with ad count of 946 full-time employees down from 978 employees in first quarter.
We expect our OPEX to continue to step down to 32 million in 3rd quarter 2011.
down approximately 2 million from the first quarter 2023 levels.
On the guidance front, as Niran already stated, we are rate writing our 2023 revenue guidance.
while we adjust our non-GAAP earning per share guidance to 55 to 70 cents to reflect better than expected second core earning results.
This outlook builds in continued conservative enterprise spending environment and our previously announced cost optimizations. Now to specific business line operations. First is the Microsoft Business.
Microsoft Business increased 12 percent year-over-year in the second quarter which compares with down 3 percent in the first quarter.
That's a very nice improvement. In terms of second core Microsoft Business, Teams increased 18 percent year-over-year and 20 percent sequentially, while Skype for Business was done over 50 percent year-over-year and 33 percent sequentially. We are now towards the end of the transition of Microsoft Business from Skype for Business to Teams.
And as such, the negative impact from Sky Forbiddens' decline over the past three and a half years becomes negligible going forward.
Microsoft Business has shown strengths mainly in North America and Asia Pacific, while roughly flat in the near.
In terms of bookings of new Microsoft business, we continue to see stronger performance in 2023 compared to 2022. Hence, the greater number of sizable live deals that we close in second quarter. North America and Asia Pacific, while the Mian region remains subdued.
Overall, we added 282 new Teams accounts in the core, up from 250 accounts in the first core.
On its earning call last week, Microsoft disclosed over 17 million PSTN users, representing 45 percent growth year-over-year. The hosting stream of Teams PSTN voice ads in a tightly enterprise budget environment, further underscores the value proposition of adding Teams phone.
to the overall team's experience. Importantly, the 17 million-plus PSN users represent just a fraction of the overall 300 million teams.
users, monthly active users, providing us with ample multi-year runway to drive ongoing penetration gain.
One key area for us in the Microsoft business is the Teams Live deals, which represent each a high total contract value. I'm glad to inform that in the second quarter, we were able to sign close to 10 accounts with a total contract value of above half a million.
roughly half a million to a million, which helps to build for us a very stable growing backlog of monthly recurring revenues for the next 36 months and beyond.
Now to our contact center business.
The contact center business grew 7% year-over-year in the core and shrank in North America and Asia Pacific. After several cores of lumpiness in this area, we believe we may be approaching an inflection point in CX bookings growth and more so in live CX deals.
Live CX deals show great potential for the future as they relate to the migration of mega contact center accounts from legacy on-prem vendors onto new cloud-based contact center implementation. And the need to substantially transform and switch the voice access network between different CX vendors.
as a result of an on-prem to cloud migration disruption. Underlying this growing confidence is the maturation of the deals within healthy pipeline built over the past 12 months consisting of core SBC, VOCA CIC, entry-level Microsoft Teams.
Contact Center solution and other voice AI application opportunities.
I would like to give you an example of a recent LiveCX contract we signed with the Tier 1 Global System Integrator in support of a multinational logistics firm. We believe that this deal brings to bear the broad capabilities of the LiveCX and conversational AI portfolio. The
Just a brief background, this large global customer intense to migrate over a multi-year period, tens of thousands of contact center agents.
spread over 200 locations in over 100 countries from a large incumbent on-prem contact center vendor to a CCAS vendor.
All the codes were selected as the SVC vendor of choice for the following reasons.
One, our SBC-mandated service saves the customer a variable time and costly internal IT resources that are required for such a large complex migration project.
Second, our custom designed business continuity solution leveraging our vocal conversation IVR, SmartApp, compliance recording and WebRTC client. In the event of a salvage outage in the cloud solution.
And in the CCAS platform, incoming calls would be seamlessly diverted to our solution, to our system, thereby ensuring service continuity.
Third, having this extra layer of insurance is of paramount importance to this customer and is key factor in its decision to move to a CKS platform. Note our custom-built architecture has been approved by the corporate division of the customer and could be purchased at individual contact center site levels.
This contract carries a multiyear deployment schedule and upon full ramp, annual recurring revenue is expected to reach 1 million without accounting for incremental revenues associated with expected uptake for our business continuity service.
Now to services. Services accounted for 47.5% of revenue and grew 2.7% year-over-year compared to 10.8% in the previous quarter with the deceleration in growth rate primarily related to timing of professional
Notably, our professional services booking remains strong, up 18% in the core, implying healthy growth over the balance of the year.
What has fueled our ongoing momentum in services is primarily our live subscription business, which ended second quarter at 40 million ARR, up from over 36 million last quarter. Additionally, we ended the quarter with total contract value for our live subscription signed from inception of this program.
exceeding $120 million, up from over $110 million last quarter, providing us with an increasing level of revenue visibility.
At this stage, the backlog of managed services is now over.
projects recurring revenue grows steadily and has shown growth of well over 50% in the second quarter. We expect strong momentum in live services to continue in 2023 and beyond and rate our annual recurring revenue target of 46 to 50 million by the end of 2023.
Now to Voice AI. Voice AI business grew over 15% year over year.
As presented already in the past, we have identified the potential of applying AI technologies to the world of voice back in 2018 when we established the voice AI group.
now employing close to 100 R&D employees, and which have since engaged in the development of technology and solutions for several advanced AI applications.
What's unique in these major investments of ours is the fact that this is, in a sense, a departure from our traditional world of voice networking and connectivity to a new world of voice application, which are based on software and application.
going to be suffering services and should. We have since developed several applications, one of which we announced yesterday, Vocca Conversational Interaction Center, which is an AI-first CCAS solution, and which we targeted to grow into meaningful new business line for us, which will generate tens of millions of dollars in the next couple of years.
In fact, adding Vocaciace to our already existing business of SBC and live CX services, and adding in the future, in the future a new evolving application of interactive analytics. We believe we are creating a very strong second lag.
of the CX business side by side with our successful business of voice solutions for the Unified Communication as a Service line.
VOCA Conversational Interactive Center, or entry-level Microsoft Teams native AI First Contact Center, is garnering significant customer interest in 2023. Its enterprises are increasingly looking to leverage Teams for true consolidation of UCAS and C-CAS. As announced yesterday, VOCA CAC is now officially certified by Microsoft Office Word conceptual bar. Welcome everyone.
made a good progress on other lines will touch them immediately.
So let's talk about the different lines. Let's talk about Voice AI Connect. This is a connectivity service supporting voice bots use cases such as virtual agents and agent assist. Voice AI Connect made good progress in the core. Second core bookings nearly doubled from first core by expansion purchases by multiple customers.
which speaks for the efficacy of our solutions and the growing adoption of conversational AI particularly amongst large enterprises.
VOCA, CAC, we have contracts awards nearly doubled sequentially in the quarter and credit opportunities pipeline remain robust growing over three times on a year-by-year basis.
What has been fueling our burger in success here is a strong position in team voice ecosystem giving us an attractive install base from which we can upsell or entry level C-Case solution. And that price customer increasingly look to leverage teams for both.
consolidated UC and CX environments. Now let's mention meeting insights. This is our meeting room solution.
Basically, we have completed the integration of GPD 4, making officially available to end customers productivity enhancement services, such as auto generating, meeting summary, outline and action items, leveraging the power of generative AI. We are not stopping there as we are making investment to build new products to drive more.
To wrap up, we have executed well in a challenging macro environment with key growth engine in our core business, namely Microsoft Customer Experience and Voice AI bookings experiencing measurable improvements relative to the last quarter. Simply, core business leading indicators such as pipeline remain robust.
while non-core service providers and IP fund business lines seem to have stabilized. These failures, coupled with incremental OPEX savings from cost-cutting actions, announced last quarter, provide us with increasing confidence in our ability to deliver on our commitment of delivering significant improvements in operating leverage over the rise of 2023 and beyond.
With that, I would like to turn the call back to the operator for the Q&A session.
I'd like to turn the call back to the operator for the Q&A session. Operator.
Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
You may press star 2 if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys. One moment while we poll for questions.
Your first question for today is coming from Mason Marion at Jeffries.
Thanks for taking the questions. So I want to start on product revenues. Can you further elaborate what's driving the continued declines here and then how are your inventory levels within the channels and how does that inventory dynamic look for the back half of the year?
Okay, that's good to hear. And for my second one, I'm interested in the VOCA Contact Center Solution with Teams. Can you just tell us more about this product? What's the size of this opportunity that you believe you're attacking? And then what kind of customers is this targeted towards? You're focusing on SMBs, mid-market, enterprises. Right. Right, so basically VOCA CAC targets entry-level CCA solution. We basically target both customer experience and enterprise experience agents. If you think about desk that would be used in IT environments.
HR desk, sales, travel desk, legal, etc. It would be very useful. Usually we target in the initial phase a level of kinds of agents. However, the product is designed at this stage to be able to answer with customers that have up to, let's say, 500 customers.
travel desk, legal, etc. It would be very useful. Usually we target in the initial phase a level of tens of agents. However, the product is designed at this stage to be able to answer with customers that have up to, let's say, 500 agencies.
Okay, I understand. Thanks for taking my questions. Your next question is coming from Ryan MacWilliams with Barclays.
Did you see any of those deals closed in the second quarter? So we are actually already active in this market. And we've, as I've mentioned on our call, we already have, you know, the booking, growing, the subscription in the first half of the year. We definitely look, we just deliver the, you know, 80, well, we just find it.
close to a million with a large US-based organization. And we are fairly competitive. We get all kinds of indications that we are able to replace known and incumbent players.
due to the fact that the solution is very advanced, native to the Microsoft Azure and Teams environment. Once we are able to consolidate U-CAS and C-CAS in a single solution, that seems to be quite attractive to the customer base that intends to use Teams.
as it's a UC platform. Got it, thanks. That's all from me back in the queue.
Sure. Your next question for today is coming from Greg Burns with Sidoti & Co.
Morning.
The large service provider that is going to be deploying using you for Teams live, can you just talk about
That opportunity and that channel is at the first, large service provider, using you in that capacity and what the pipeline of maybe other.
Other opportunities look like to you there.
Yes. Actually, we're talking about a derivative of the live services which we called Teams Live Cloud. Live Cloud target service providers that typically will sell the live services to their own business customers. We already have a pack of more than 50.
such service provider, although some are smaller in size. We are active in that area for the past 18 months, already on generating monthly revenue in the order of a few hundreds of thousands of dollars. And basically the idea if you take a name in the first year or second year,
service provider, each of them would be basically looking to empower its business customers with the you to do that.
with live services, you know, wide-glob services from us. And it should grow. I mean, we're just in the first innings of that product, but quite advanced. The product, by the way, supports not only Teams, but also, you know, will support, you know, shortly also Zoom solution and...
probably also web-ex solution. So all in all, it's the only true multi-platform solution out there that should be able to get on board fairly quickly smaller accounts into a very powerful UC service. And then the improvement you saw on the Microsoft.
with maybe projects that were delayed, what's the market environment?
look like they're around Microsoft and then...
Looking forward should we just expect the growth of Microsoft now just to line up with teams at this point. Thanks.
Sure, yes, well the environment really, you know, we saw improvement in the second quarter. I think, you know, the question that hoover in the first quarter, whether we're going into a recession or not, I think in the second quarter that went a bit away. So businesses are willing to invest more moving forward with their projects.
So all in all, yeah, regarding the split between teams and Sky for Benz, yes, we are glad to say that We are really at the end of the decline in Sky for Benz, which you know hurt the team growth. So yeah going forward
the main business is teams and it's growing nicely. I would expect that business to continue to grow in the range of 15 to 20 percent year over year.
Okay, thanks. And then just lastly, how much revenue you are generating from your Voice AI suite of products now and how much do you expect that to grow this year?
So I think I gave some numbers in the past. Last year we did close to 6 million. We plan this year to grow at least 50%, but as no...
several for application or maturing this year. We do expect even larger growth to start next year. So next year I would count on a 50 to 70% growth. All in all, we have just to give you an idea, we have four different areas of growth.
I've mentioned Voice AI Connect, which is already selling in several millions a year. We just started out with Meeting Insight. We do have SmartApp, which is a compliant solution. We have the VOCA CIC, which again shows a very strong ramp up in bookings.
And we will plan on adding interaction analytics going forward. So as I've mentioned on the call, we believe that...
this many different activities in the CX, the customer experience market will definitely help us grow conversational AI rapidly over the next years.
Okay, great. Thank you.
Sure.
Your next question is coming from Ryan Coons at Needleman Company.
Thanks for the question. Just a clarification on my interpretation as we think about the live subscription, 40 million ARR and new product revenue at 30 million, is it fair to interpret that, that the transition from license to subscription for new footprint going out the door right now is?
is that for assessment?
Pretty much, yes. At this stage, I think we have gone pretty upward with our live subscription. I believe that in terms of bookings, that's close to 25% of our overall Teams business.
That's great. And then circling back to contact centers, can you update us on any of your strategic kind of partner developments in this space?
be it some of the big players like Genesis and Five9 or any of the pure C-Cast players, including Amazon, Progress, with their – any updates on your kind of strategic plans with your contact center partners would be helpful. Thank you.
So yeah, actually we enjoy quite a success in the second core. We won and I've described we won a multi million dollar deal of you know seven, eight years with a large system integrator moving a large logistic company.
from an on-prem vendor who seems to be losing steam into a cloud contact center solution, or, you know,
of Fame is our voice capabilities. We, well, providing a solution to a fairly complex voice network that may include 200 different sites in 100 different countries, different locations, different.
That's definitely a difficult task and yes, I think that capability of ours has not gone undiscovered by some of the large contacts and names that you have mentioned. So yes, we do have a fairly close discussion with some of these.
partners that see us as a strong partner who can help them in solving all kinds of issues. I've mentioned business continuity solution, switching and first mile solution. So yes, we are in a very strong position to help them in solving problems.
discussion with players in the field. Thanks very much. Appreciate it.
in the field.
Your next question is coming from Tal Leany at Bank of America. Hey, I hope you can hear me. Hello.
I want to ask you about the environment in the context of last quarter Microsoft was weaker, this quarter Microsoft is better.
Does it mean that the environment is getting better, meaning the visibility has improved or any better signed deals? Did they work through inventories? Kind of when you look at last quarter, that was pretty dire, and this quarter when you look beneath the surface, you can see some signs of, I don't know if it's stability or even some growth.
So I've mentioned that we feel second quarter was better in terms of the overall environment and willingness, I would say, of management of corporations to start spending more on modernizing their communication and collaboration.
Team Fuses we have overall worldwide 300 million. Voice have been applied to less than 20 million at this stage. I mean Team Stone. So there's a huge, huge runaway in front of us. And I think that once the climate is better.
economically, we do see the environment better. So yeah, we see it quite stable and we build on further growth in coming quires and years. Now, there is expected acceleration in the second half. Is it?
based on contracts you already have or is it just normal seasonality? I'm trying to understand the risk in the acceleration. Well so far we have not met any such risk. You know if you take our annual recurring revenue you know which basically tells you
That is the most important parameter for us. We're stepping fairly steadily, you know, just like any ARR solution that grows. We grew 100% a year, then declined to 80. This year we will grow 60%. We're talking about, you know, tens of thousands of people, and we're talking about tens of thousands of people
of different projects. All you know, the statistics are there, the coverage is nice. By the way, one very important thing is that we are starting to see, as I mentioned on the call, some very high total contract value projects, which could range from 1 million to 3 million of
One of the problems we have in the industry is two things. Number one is channel inventory, that companies just bought too much. And number two is too much backlog. So even when you see growth, it's coming from backlog, it's not coming from orders. Can you refer to these two things? Yeah, actually we have been on the opposite side of defense, right? I mean, in the first quarter we...
In the second half, we will see, at least for us, you know, more orders that would use to fill up those inventories. Got it, thank you. Sure. We have reached the end of the question and answer session, and I will now turn the call back to Shabtai for closing remarks. Thank you, operator. I would like to thank everyone who attended our conference call today. On the heels of good second quarter, and with more focused planning and better control of expenses for the rest of 2023.