Q3 2023 AppFolio Inc Earnings Call

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[music].

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Good afternoon. Thank you for standing by and welcome to at Folio Inc's third quarter 2023 financial results Conference call.

Please be advised today's conference is being recorded and a replay will be available on out folios Investor Relations website, I would now like to hand, the conference over to Lori Barker Investor Relations.

Thank you Gigi good afternoon, everyone I'm Lory Barker Investor Relations for <unk>.

And I'd like to thank you for joining us today as we report absolutely as third quarter 2023 financial results.

With me on the call today are Shane Trigg, absolutely as president and CEO and face young gun at Folio as Chief Financial Officer.

This call simultaneously being webcast on the Investor Relations section of our website at Apt Folio, Inc. Dot com.

Before we get started I would like to remind everyone that poly is safe Harbor policy comments made during this conference call and webcast contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

And are subject to risks and uncertainties.

Statement that refers to expectations projections or other characterizations of future events, including financial projections future market conditions, our future product enhancements or development is a forward looking statement.

Probably those actual results could differ materially from those expressed in such forward looking statements for any reason, including those listed in our SEC filings.

Our polyol assumes no obligation to update any such forward looking statements, except as required by law.

For greater detail about risks and uncertainties. Please see our SEC filings, including our Form 10-K for the fiscal year ended December 31, 2022 which has been filed with the SEC on February 19 2023.

In addition, this call includes non-GAAP financial measures reconciliations of these non-GAAP financial measures with the most directly comparable GAAP measures are included in our third quarter earnings release posted on the Investor Relations section of our website.

With that I'd like to turn the call over to Shane Trigg Shane. Please go ahead.

Thanks, Lori and welcome to our third quarter 2023 earnings call.

This quarter, we continued to execute our strategy, while delivering profitable growth I am pleased to report that revenue was up 32% year over year to $165 million and we now serve more than $7 8 million units.

In addition, we improved our margins driving non-GAAP operating margin to 16% and non-GAAP free cash flow margin to 20%.

These results are a reflection of our commitment to delivering industry, leading innovation to our customers while being disciplined operators.

Since our last call, we reduced the size of our team by nearly 9%.

They're just not well difficult.

Better positions us to focus on the real estate industry and efficiently execute the opportunity in front of us.

Our pursuit of profitable growth is in service of our customers because to be the innovative long term partner. They can rely on to power their businesses, we must be a healthy resilient business ourselves.

We are accelerating the pace of our innovation with advancing technology like generally they are delivering on our customers' needs through a wealth of new product functionality and creating exceptional value to help our customers perform through all market conditions and thrive in any environment.

Just last month, we announced new and meaningful ways to leverage our platform at the sold out 11th annual folio customer cultures more than 800 customers representing over representing over $1 4 million units came to customer conference to learn how to put our technology partnerships.

And services to work so they can drive more meaningful outcomes for their businesses.

Customers left the conference with the deeper understanding of how we're innovating to streamline critical workflows that help them operate more efficiently.

What are the most exciting innovations announced at the customer conference stage was realm X, our new conversational interface, leveraging generative AI to let users interact without folio in plain language.

We are currently piloting roadmaps with a select group of customers ahead of its wider availability in 2024.

<unk> has three components, where you referred to has asked.

And teach.

Customers can ask the question they might ask for a report like a rent roll.

Can ask questions like what's your vendors are available for maintenance requests.

They can tell realm extra do something for them like drafting an email to residents requesting vendor quotes.

And they can teach roadmap a common workflow automating it to their teams can focus on higher value work like building resident relationships and driving business performance.

Our early investments in AI is paying off.

Last quarter, we talked about the about helpfully around representing our full suite of AI capabilities.

Traditional AI models, we use in capabilities like smart Bill entry to new generative AI models employed and rollbacks.

Now at a point, where 85% of customers using one or more.

More of rolls capabilities more than twice the adoption, we saw just one year ago.

Going forward the generative AI powered real next will increase efficiency for our customers by eliminating repetitive tasks freeing teams to focus on what matters people and performance.

We ran shipped recently surveyed more than 2300 U S property management company employees, an overwhelming 88% agreed that technology makes their job easier, indicating that almost one third of their typical workweek could be optimized for streamlined through technology.

According to one customer conference attendee, Karen Seabrook owner and Realtor, a key realty and property management in Oklahoma City with 500 units on up folio and I quote.

So yeah, there's always thinking ahead, we're so pleased with the new AI integration that will help propel our business.

Our clients will be impressed and we are so excited for the new updates and quote.

We're grateful to all of our customers for choosing to grow their businesses without polio and trusting us with their future.

In addition to announcing where all that we continue delivering innovation that builds engaging and lasting customer relationships. The first of our three strategic pillars and.

In fact in the past year, we have deployed more than 300 features that customers directly requested so our user community demonstrating our commitment to our value that listening to customers is in our DNA.

For owners, we've provided more transparency and on demand access to their property data documents and action items. They.

They could easily see it approved Walker estimates and electronically sign and reference important documents like their management agreement. We're excited about the potential of this innovation to nurture more strategic relationships between property managers and owners.

For residents, we recently upgraded the maintenance intake process.

Maintenance intake now uses AI to triage and get to the root of our residents maintenance issue it.

It helps property management teams quickly identify and understand problems, eliminating the need for follow up and clarification. It speeds up time to resolution.

Many times, we can troubleshoot troubleshoot and resolve problems without requiring a maintenance check to come on site.

Examples like these demonstrate our focus on delivering elevated differentiated experiences that set us and our customers apart in the market.

The second pillar of our strategy is unlocking unit growth by acquiring new customers up market.

Customers are looking for ways to grow occupancy and net operating income in the leasing process.

Through our leasing CRM introduced a customer conference, we give customers visibility into everything that's happening in the leasing funnel, enabling leasing agents to have conversations at the prospect level instead of the property level critical for customers with multifamily properties and onsite teams.

<unk> AI leasing assistant Lisa seamlessly integrates with leasing CRM empowering customers to have complete control over when to engage with potential residents.

Expanding our coverage of additional property types also contributes to our ability to win and retain upmarket customers.

Portable housing is now available as part of our folio property manager plus from project based section eight to Logitech and HUD are fully it has tools for customers.

The need to attract compliance Tomatoes are affordable housing and conventionally units all on one platform.

Jessica <unk> co owner and principle of up holdings with 2300 units across four states on a folio says and I quote before at Folio, where there are a variety of technological solutions.

One of the biggest thing that Ive folio has done for us is bringing all of that under one umbrella.

It is all in our portfolio now.

Sure.

In addition to adding property types, we are powering mixed portfolios by extending the value of our platform to scale with complex operations, while they're built natively or delivered by our integration partners.

Take our new bulk actions functionality.

Instead of completing one move out after another customers can now officially set dates take necessary accounting actions and download disposition letters.

All in one streamlined workflow.

This is important to our up market customers, particularly those with student housing and their portfolio.

Another key component of our strategy is to unlock unit growth upmarket.

Without folio stacks.

With 48 partners and $1 3 million connected units our integration partner ecosystem continues to expand offering customers increased flexibility to integrate their favorite prop tech solution into their workflows, one of our newest partners as Bert I, a leader in digital customer experiences, which offers tools for reputation.

And review management online listings messaging surveys and competitive benchmarking.

This integration will equip connected Apple they are customers with actionable AI powered insights they can use to find and convert more leads.

The third pillar of our strategy is to expand customer adopt adoption about folio property manager plus and our value added services.

In the third quarter, we expanded our customer education program to better help customers and their teams build critical at folio expertise.

These capabilities to empower our customers to quickly adopt and use our products and services leading to more meaningful business outcomes. The expanded program has three components.

First the new and improved our portfolio Academy, a 24 by seven on demand learning center with educational content tailored to ramp new hires quickly assist more experienced employees when they need help with advanced topics.

Second Academy training customized training sessions led by our product team our product experts specifically designed to meet the needs of customers, who require a personalized and immersive learning experience. The third and newest component is academies certifications, which are dedicated.

<unk> got it courses designed to up level and certify our customers have folio expertise.

Our expanded education program aims to provide comprehensive support however, there still may be may be occasions, when our customers need to seek specialized skills outside of their organization.

In such situations finding high quality partners with the right expertise can be challenging we set out to solve this problem by recently launching a folio stock solution partners and network of industry experts ready to help customers achieve their business goals.

Through this new kind of.

We can now offer customers easy access to some of the best accounting and consulting solution providers in the industry.

Which only further helps our customers succeed on our platform.

Inspires expanded use and adoption.

In summary, we are pleased with our continued strategic execution, and resulting profitable revenue growth in the third quarter.

Thank you to our customers partners and team members, who helped make the customer conference a huge success.

We remain focused on creating exceptional value the power the future of the real estate industry and sets our customers apart from the rest.

I will now hand, it over to face yet.

Thank you Shane the third quarter demonstrating success in our focus on achieving profitable revenue growth.

Revenue growth of 32% year over year to $165 million and generate free cash flow amounting to 23% of revenue.

Our solutions revenue was $39 $8 million in Q3, and 17% year over year increase driven by new customers and that Theres No total units on platform along with continued adoption of <unk> property manager plus and.

And the third quarter, we manage approximately seven 8 million units from 19418 customers compared to $7 1 million units from 18109 customers yeah.

This represents a 7% increase in customers and a 10% increase in ending unit.

So value added services revenue in Q3, 39% year over year to 123 by $2 million. This growth in our payments business was a result of increased online rent payments adoption and higher volume run transactions paid using.

Debit or credit card and our decision to stop.

E check fees. Additionally.

Additionally, with mitigation and screening grew in line with our seasonal Q3 expectations.

Oh Q3 results demonstrate our ability to grow profitably in spite of macroeconomic conditions.

Our innovation and reach from property managers to investors and owners to vendors and residence makes us resilient turning to spending we exited the quarter with 1683 employees, which is a decline of 4%.

Third quarter of 2022, and this includes the 149 employees that will impact that from a previously announced reduction in force as Jay mentioned earlier, the mid quarter restructuring uptake on the fact that all areas of the business and while difficult aligns our structure of that strategy.

To empower our employees to better serve our customers.

non-GAAP cost of revenue exclusive of depreciation and amortization was 36% of revenue compared to 40% in the third quarter of last year.

Turning now to non-GAAP operating expenses.

Year over year dollar increase in operating expenses for Q3 is primarily due to employee costs associated with retaining talent, particularly in specialized areas such as R&D.

As a percent of revenue combined sales and marketing R&D and G&A fell to 44% in the third quarter of 2023 from 52% in the third quarter of 2022, he led to growth in revenue and a multi quarter focus on operational efficiency.

And marketing expenses as a percentage of our revenue.

Decreased from 19% in the prior year to 15% this year.

R&D expenses as a percentage of revenue was 20% in both the third quarter of this year and last year G&A.

G&A expenses as a percentage of revenue decreased from 13% in the prior year to 10% this quarter.

Overall, our non-GAAP operating margin in the third quarter of this year improved to 16, 1% compared to three 7% in the third quarter of last year free cash flow. This quarter was 23% compared to nine 5% in the same quarter last year.

I'm pleased to be increasing our projected full year 2023 revenue guidance range to 608 million to $612 million.

The midpoint of this range represents a full year growth rate of 29%.

We expect that full year 2023 cost of revenue exclusive of depreciation and amortization will be higher than Q3 2023.

The foundation of our revenue due to a normalization of product mixes and then all the other edits ever since revenue.

Tiny tiny three ending head count is projected to be below two.

2022 ending head count.

As a result of improving operational efficiencies and the increase to our revenue guidance. We are increasing our full year non-GAAP operating margin expectation to 10.5% to 11% of revenue and free cash flow is projected to grow to 10, a turn and a half 211.5%.

Unknown Executive: Good afternoon. Thank you for standing by. And welcome to AppFolio Inc. AppFolio Inc. 3rd quarter, 2023 Financial Results Conference call. Please be advised today's conference is being recorded. And a replay will be available on AppFolio's Investor Relations website.

Our revenue basic weighted average shares outstanding are expected to be approximately three 6 million shares for the full year in summary third quarter results are an excellent example of how absolutely our focus on delivering profitable growth and industry leading innovation.

Lori Barker: I would now like to hand the conference over to Lori Barker, Investor Relations. Thank you, Gigi.

Lori Barker: Good afternoon, everyone. I'm Lori Barker, Investor Relations for AppFolio. And I'd like to thank you for joining us today as we report AppFolio's 3rd quarter, 2023 Financial Results.

Now looking forward to sharing more information and seeing many of you in person or virtually during November 14th Investor meeting.

Lori Barker: With me on the call today are Shane Trigg, AppFolio's President and CEO and Facing Goon AppFolio's Chief Financial Officer. This call is simultaneously being broadcast on the Investor Relations section of our website at appfolioinc.com. Before we get started, I would like to remind everyone at appfolio safe harbor policy comments made during this conference call and webcast contain board looking statements within the meaning of the private securities litigation reform act of 1995 and are subject to risks and uncertainties.

Thank you all for joining us today, and we look forward to seeing you soon operator. This concludes today's call.

This concludes today's conference call. Thank you for participating you may now disconnect.

Lori Barker: Any statement that refers to expectations, projections or other characterizations of future events, including financial projections, future market conditions. Or future product enhancements or development is a forward looking statement. Appfolio's actual results could differ materially from those expressed in such forward looking statements for any reason, including those listed in our SEC filings. Appfolio assumes no obligation to update any such forward looking statements except as required by law. For greater detail about risks and uncertainties, please see our SEC filings, including our form 10K for the fiscal year in December 31, 2022, which has been filed with the SEC on February 9, 2023.

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Lori Barker: In addition, this call includes non-gap financial measures, reconciliations of these non-gap financial measures with most directly comparable gap measures are included in our third quarter earnings release posted on the Investor Relations section of our website.

Shane Trigg: With that, I'd like to turn the call over to Shane Trigg. Shane, please go ahead.

Shane Trigg: Thanks, Laurie, and welcome to our third quarter 2023 earnings call. This quarter we continued to execute our strategy while delivering profitable growth. I'm pleased to report that revenue was up 32% year-over-year to $165 million, and we now serve more than 7.8 million units. In addition, we improved our margins, driving non-gap operating margins to 16% and non-gap free cash flow margin to 20%. These results are a reflection of our commitment to delivering industry-leading innovation to our customers while being disciplined operators.

Shane Trigg: Since our last call, we reduced the size of our team by nearly 9%, a decision that, while difficult, better positions us to focus on the real estate industry and efficiently execute the opportunity in front of us. Our pursuit of profitable growth is in service of our customers because to be the innovative long-term partner, they can rely on the power of their businesses. We must be a healthy, resilient business ourselves. We are accelerating the pace of our innovation with advancing technology like generative AI, delivering on our customers needs through a wealth of new product functionality and creating exceptional value to help our customers perform through all market conditions and thrive in any environment.

Shane Trigg: Just last month, we announced new and meaningful ways to leverage our platform at the sold-out 11th annual AppFolio Customer Conference. More than 800 customers representing over 1.4 million units came to customer conference to learn how to put our technology, partnerships and services to work so they can drive more meaningful outcomes for their businesses. Customers left the conference with a deeper understanding of how we're innovating to streamline critical workflows and help them operate more efficiently.

Shane Trigg: One of the most exciting innovations announced at the customer conference stage was RealmX. Our new conversational, interface leveraging generative AI to let users interact with AppFolio in plain language. We are currently piloting RealmX with a select group of customers ahead of its wider availability in 2024.

Shane Trigg: RealmX has three components we refer to as ask, tell, and teach. Customers can ask RealmX the question. They might ask for a report like a rent role or can ask questions like which vendors are available for a maintenance request. They can tell RealmX to do something for them like drafting an email to residents or requesting vendor quotes. And they can teach RealmX a common workflow automating so their teams can focus on higher value work like building resident relationships in driving business performance. Our early investment in AI is paying off.

Shane Trigg: Last quarter, we talked about AppFolio Realm representing our full suite of AI capabilities. From traditional AI models, we use in capabilities like Smart Bill Entry to new generative AI models employed in RealmX. We're now at a point where 85% of customers using one or more of Realm's capabilities more than twice the adoption we saw just one year ago. Going forward, the generative AI power of RealmX will increase efficiency for our customers by eliminating repetitive tasks, freeing teams to focus on what matters, people, and performance.

Shane Trigg: We recently surveyed more than 2,300 U.S, property management company employees. An overwhelming 88% agreed that technology makes their job easier, indicating that almost one third of their typical work week could be optimized for streamlined through technology. According to one customer conference attendee, Karen C. Brook, owner and realtor at key realty and property management in Oklahoma City with 500 units on AppFolio and I quote, AppFolio is always thinking ahead. We are so pleased with the new AI integration that will help propel our business to the future. Our clients will be impressed and we are so excited for the new updates.

Shane Trigg: We are grateful to all of our customers for choosing to grow their businesses with AppFolio and trusting us with their future.

Shane Trigg: In addition to announcing Raldex, we continue delivering innovation that builds engaging and lasting customer relationships, the first of our three strategic pillars. In fact, in the past year, we have deployed more than 300 features that customers directly requested through our user community, demonstrating our commitment to our value that listening to customers is in our DNA. For owners, we provided more transparency and on-demand access to their property data, documents and action items.

Shane Trigg: They could easily see and approve worker estimates and electronically sign and reference important documents like their management agreement. We are excited about the potential of this innovation to nurture more strategic relationships between property managers and owners.

Shane Trigg: For residents, we recently upgraded the maintenance intake process. Maintenance intake now uses AI to triage and get to the root of a residence maintenance issue. It helps property management teams quickly identify and understand problems, eliminating the needs for follow-up and clarification and speeds of time to resolution. Many times we can troubleshoot and resolve problems without requiring a maintenance tech to come on site.

Shane Trigg: Examples like these demonstrate our focus on delivering elevated differentiated experiences that set us and our customers apart in the market.

Shane Trigg: The second pillar of our strategy is unlocking you to growth by acquiring new customers up market. Customers are looking for ways to grow occupancy and net operating income in the leasing process. Through our leasing CRM introduced a customer conference, we give customers visibility into everything that's happening in the leasing funnel, enabling leasing agents to have conversations at the prospect level instead of the property level, critical for customers with multi-family properties and on-site teams.

Shane Trigg: Our AI leasing assistant, Lisa, seamlessly integrates with leasing CRM and powering customers to have complete control over when to engage with potential residents. Expanding our coverage of additional property types also contributes to our ability to win and retain up market customers. Affordable housing is now available as part of Affolio Property Manager Plus. From project base section 8 to live tech and HUD, Affolio has tools for customers that need to track compliance and manage their affordable housing and conventional units all on one platform.

Shane Trigg: Jessica Hoff-Bersack, co-owner and principal of upholdings with 2300 units across four states on Affolio says, and I quote, before Affolio, we had a variety of technological solutions. One of the biggest things that Affolio has done for us is bringing all of that under one umbrella. It is all an AppFolio now, end quote. In addition to adding property types, we are powering this portfolio by extending the value of our platform to scale with complex operations whether built natively or delivered by our integration partners.

Shane Trigg: Take our new bulk actions functionality. Instead of completing one move out after another, customers can now efficiently set dates. Take necessary accounting actions and download disposition letters all in one streamline workflow. This is important to our upmarket customers, particularly those with student housing and their portfolio.

Shane Trigg: Another key component of our strategy is the unlocked unit growth upmarket with AppFolio stack. With 48 partners and 1.3 million connected units, our integration partner ecosystem continues to expand, offering customers increased flexibility to integrate their favorite project solutions into their workflows. One of our newest partners is Bird Eye, a leader in digital customer experiences, which offers tools for reputation and review management, online listings, messaging, surveys, and competitive benchmarking. This integration will equip connected AppFolio customers with actionable AI-powered insights they can use to find and convert more leads.

Shane Trigg: The third pillar of our strategy is to expand customer adoption of AppFolio property manager plus and our value added services. In the third quarter, we expanded our customer education program to better health customers and their teams build critical AppFolio expertise. These quickly adopt and use our products and services leading to more meaningful business outcomes.

Shane Trigg: The expanded program has three components. First, the new and improved AppFolio Academy, a 24 by 7 on-demand learning center with educational content tailored to new hires quickly and assist more experienced employees when they need help with advanced topics. Second, Academy training, customized training sessions led by our product, a team of product experts, specifically designed to meet the needs of customers who require a personalized and immersive learning experience. The third and newest component is Academy certifications, which are dedicated, self-guided courses designed up-level and certified are customers' AppFolio expertise. Our expanded education program aims to provide comprehensive support.

Shane Trigg: However, there still may be occasions when our customers need to seek specialized skills outside of their organization. In threat situations, finding high quality partners with the right expertise can be challenging. We've set out to solve this problem by recently launching AppFolio stack solution partners, a network of industry experts ready to help customers achieve their business goals. Through this new category, we can now offer customers easy access to some of the best accounting and consulting solution providers in the industry, which only further helps our customers succeed on our platform and inspires expanded use and adoption.

Shane Trigg: In summary, we are pleased with our continued strategic execution and resulting profitable revenue growth in the third quarter. Thank you to our customers, partners and team members who helped make the customer conference a huge success.

Shane Trigg: We remain focused on creating exceptional value that powers the future of the real estate industry and sets our customers apart from the rest.

Fay Goon: I will now hand it over to face you. Thank you, Shane. The third quarter demonstrates success in our focus on achieving profitable revenue growth. We deliver revenue growth of 32% over year to 165.4 million dollars and generate a three cash flow, amounting to 20.3% of revenue. Of course, solutions revenue was 39.8 million dollars in Q3. The 17% year-over-year increase driven by new customers and additional total units on platform along with continued adoption of AppFolio property manager plus.

Fay Goon: At the end of the third quarter, we managed approximately 7.8 million units from 19,418 customers compared to 7.1 million units from 18109 customers a year earlier. This represents a 7% increase in customers and a 10% increase in ending units. For value-relevant services, revenue in Q3 grew 39% year-over-year to 123.2 million dollars. This growth in our payments business was a result of increased online rent payments adoption and higher volume rent transactions paid using a debit or credit card and our decision to stop each of these.

Fay Goon: Additionally, with mitigation and screening grew in line with our seasonal Q3 expectations. Of Q3 results demonstrate our ability to grow profitably in spite of macroeconomic conditions. Our innovation and reach from property managers to investors and owners to vendors and residents makes this resilient. Turning to spending, we exited the quarter with 1,683 employees which is a decline of 4% compared to the third quarter of 2022. This includes 149 employees that will impact it from previously announced reduction in fourth, as Jay mentioned earlier.

Fay Goon: The mid-quarter restructuring of HECOM affected all areas of the business and while difficult aligns our structure with strategy to empower our employees to better serve our customers. Non-gap cost of revenue exclusive of depreciation and amortization was 36% of revenue compared to 40% in the third quarter of last year.

Fay Goon: Turning now to non-gap operating expenses. A year-over-year dollar increase in operating expenses for Q3 is primarily due to employee cause associated with retaining talent, particularly in specialized areas such as R&D. D. As a percent of revenue, combined sales and marketing, R&D, and GNA, fell to 44% in the third quarter of 2023, from 52% in the third quarter of 2022 due to growth in revenue and a multi-quarter focus on operational efficiency. Sales and marketing expenses, as a percentage of revenue, decreased from 19% in the prior year to 15% this year.

Fay Goon: R&D expenses, as a percentage of revenue, were 20% in both the third quarter of this year and last year. Our GNA expenses, as a percentage of revenue, decreased from 13% in the prior year to 10% this quarter. Overall, our non-gap operating margin in the third quarter of this year improves to 16.1% compared to 3.7% in the third quarter of last year. Free cash for this quarter was 20.3% compared to 9.5% in the same quarter last year.

Fay Goon: We are pleased to be increasing our projected full-year 2023 revenue guidance range to $608 million to $612 million. The main point of this range represents a full-year growth rate of 29%. We expect that full-year 2023 cost of revenue, exclusive of depreciation and amortization, will be higher than Q3 2023. As a percentage of revenue, due to a normalization of product mix between our value-edit services revenue, our 2023 ending hate count is projected to be below 2022 ending hate count.

Fay Goon: As a result of improving operational efficiencies and the increase to our revenue guidance, we are increasing our full-year non-gap operating margin expectation to 10.5% to 11% of revenue, and free cash flow is projected to grow to 10% and a half to 11.5% of revenue. Basic related average shares of spending are expected to be approximately $36 million shares for the full-year.

Fay Goon: In summary, third quarter results are an excellent example of how absolute focus on delivering profitable growth and industry innovation.

Fay Goon: We are looking forward to sharing more information and seeing many of you in-person virtually during November 14th interested meeting. Thank you all for joining us today, and we look forward to seeing you soon.

Unknown Executive: Operator, this concludes today's call. This concludes today's conference call. Thank you for participating.

Unknown Executive: You may now disconnect. Thank you.