Q2 2024 Radware Ltd Earnings Call
Speaker Change: [music].
Operator: Hello, and welcome to the Radware conference call discussing second quarter 2024 results.
Hello, and welcome to the Raspberry Conference call discussing second quarter 2024 results. Thank you all for holding you will have the opportunity to ask a question to you. Our speakers later on in the Q&A session. If you'd like to ask a question later that time you can.
Operator: Thank you all for holding.
Operator: You will have the opportunity to ask questions to our speakers later on in the Q&A session. If you'd like to ask a question later, that time, you can press star one on your telephone keypad.
Operator: You will have the opportunity to ask questions to our speakers later on in the Q&A session. If you'd like to ask a question at that time, you can press star 1 on your telephone keypad. As a reminder, this conference is being recorded July 31st, 2024. I would now like to turn this call over to Yisca Erez, Director of Investor Relations at Radware. Please go ahead.
Press Star one on your telephone keypad as a reminder, this conference is being recorded July 31st 'twenty 'twenty four I would now like to turn this call over to you Scott is.
Operator: As a reminder, this conference is being recorded July 31, 2024.
Yisca Erez: I would now like to turn this call over to Yisca Erez, Director of Investor Relations at Radware. Please go ahead.
Scott: Director of Investor Relations at Radware. Please go ahead.
Yisca Erez: Thank you, operator. Good morning, everyone, and welcome to Radware's second quarter 2024 earnings conference call. Janie Mead today, a Roy Zisapel, president and chief executive officer, and Guy Avidan, chief financial officer.
Scott: Thank you operator, and good morning, everyone and welcome to evaluate second quarter of 2024 earnings Conference call. Joining me today are really disappears, President and Chief Executive Officer, and go evidenced Chief Financial Officer.
Yisca Erez: A copy of today's press release and financial statements, as well as the investor kit for the second quarter, are available in the Investor Relations section of our website. During today's call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. These forward-looking statements are subjective; various risks and uncertainties, and actual results could differ materially from Radware's current focus and estimate. A factor that could cause or contribute to such differences include, but are not limited to, impacts from changing or severe global economic conditions, the COVID-19 pandemic, general business conditions and our ability to address changes in our industry, changes in demand for products, the timing in the amount of orders, and other risks, details from time to time in Radware's filing.
Yisca Erez: A copy of today's press release and financial statements, as well as the investor kit for the second quarter, is available in the investor relations section of our website. During today's call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company.
Speaker Change: A copy of today's press release and financial statements as well as the Investor Kit for the second quarter are available in the Investor Relations section of our website.
Speaker Change: During today's call when they make projections or other forward looking statements regarding future events or the future financial performance of the company.
Speaker Change: Forward looking statements are subject to various risks and uncertainties and actual results could differ materially from what is current forecast and estimates.
Speaker Change: Factors that could cause or contribute to such differences include but are not staying with you too.
Speaker Change: In fact, some changing course seafood global economy conditions, the COVID-19, pandemic and general business conditions, and our ability to address changes in our industry.
Speaker Change: Changes in demand for products, the timing of the amount of orders and other risks detailed from time to time in filings.
Yisca Erez: We refer you to the documents the company files and furnishes from time to time with the SEC, specifically the company's last analog report on Form 20-F as filed on March 18, 2024. We undertake no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date of such statement is made.
Speaker Change: We refer you to the documents the company filed just furnishes from time to time with the SEC specifically the company's annual report on form 20-F as filed in March 18 2024.
Speaker Change: Undertakes no commitment to revise or update any forward looking statements in order to reflect events or circumstances. After the date of such statement is made.
Roy Zisapel: I will now turn this call to Roy DeSapel. Thank you, Iska, and thank you all for joining us today. We ended the second quarter of 2024 with revenues of $67 million, the non-GAAP earnings per share of 20 cents, both exceeding the high end of our guidance. These results were driven by our cloud security business, which cloud they are growing 19% of the year. Strong acceptance of our defense pro-X data protection and continued op-ex cost control also contributed to our performance. We generated $23 million of cash flow from operations in the second quarter, and $44 million in the first half of 2024.
Speaker Change: I will now turn the call twice this opinion.
Speaker Change: Thank you Scott and thank you all for joining us today.
We ended the second quarter of 2024 with revenues of $67 million, the non-GAAP, earning per share of <unk>.
Speaker Change: Both exceeding the high end of our guidance.
Yisca Erez: These results were driven by our cloud security business, with cloud ARR growing 19% year-over-year. To address these challenges, customers need AI-powered protection. In other words, to fight crime with AI.
Speaker Change: These results were driven by our cloud security business with cloud growing 19% year over year.
Speaker Change: Strong acceptance of our defensible ex Ddos protection and continued continued opex cost control also contributed to our performance.
Speaker Change: We generated $23 million of cash flow from operations in the second quarter and $44 million in the first half of 2024.
Roy Zisapel: During the first six months of this year, cyber attacks continued to rise in numbers, scale, and complexity. Network layer, DDoS attack, the customer increased double digits, and with DDoS attacks in particular continued to climb quadrupling over the second half of 2020. Research was influenced by geopolitical conflict and international events, like the EU Parliament elections, Euro 2024, and the Paris Olympics. With more attackers using generative AI and AI enabled the attackers to accelerate time to attack and attack progression, organizations worldwide say significantly greater risks to business operations. To address these challenges, customers need AI-powered protection; in other words, to fight AI with AI.
Speaker Change: During the first six months of the fear of cyber attacks continues to rise number scale and complexity.
Speaker Change: Network layer Ddos attack this estimate increased double digits and web Ddos attacks in particular continued to decline quadrupling over the second half of 2020.
Speaker Change: This surge was influenced by geopolitical conflict.
Speaker Change: National Defense.
Speaker Change: Parliament elections, Euro 2024, and the very big gains.
Speaker Change: With more of the factors using generative AI and AI enabled attack tools.
Speaker Change: Salary tanks that can affect progression.
Speaker Change: <unk> worldwide stay significantly greater risks to their business operations.
Speaker Change: To address these challenges customer need AI powered fiction.
Speaker Change: In other words to fight AI with AI.
Roy Zisapel: With that, we are proud to introduce our new lateral-epic AI, which powers our security solutions and infuses AI-powered intelligence and capabilities to all layers of our platform. Leveraging state-of-the-art AI in generative AI algorithms, FKIs designed to significantly improve attack detection and mitigation capabilities and reducing time to resolution. FKIs introduces new AI algorithms, such as cross-module attack correlation, both behavioral algorithms, and automated force-positive auto-correction. It also includes a new API business logic protection algorithm, unlike competitive solutions that rely on task-attacks log-analyses for detection and remediation recommendations. Our AI-powered API protection works automatically, continuously, and in real-time to identify bad actors and block their attacks.
Yisca Erez: With that, we are proud to introduce our new Radware EPIC AI, which powers our security solutions and infuses AI-powered intelligence and capability into all layers of our planet. Epic AI is designed to significantly improve attack detection and mitigation capabilities, as well as reduce time to resume. Epic AI introduces new AI algorithms, such as cross-module attack correlation, both behavioral algorithms, and automated false-positive auto-correction, for Detection and Remediation Recommendations, our AI-powered API protection works automatically, continuously, and in real time to identify bad actors and block their attacks. Radware includes everything that we currently look for in this feature.
Speaker Change: With that we are proud to introduce several new PKI.
Speaker Change: Which powers, our security solutions and infused with AI powered intelligence and capabilities to all layers of our platform.
Speaker Change: Leveraging state of DLT in general.
Speaker Change: <unk> is designed to significantly improve the attack detection and mitigation capabilities.
Speaker Change: Reducing time to resolution.
Speaker Change: I think AI introduces new new algorithms, such as cross module attack correlation both behavioral algorithms and also made its full supposedly Steve auto collection.
Speaker Change: It also includes the new API business logic protection algorithm.
Speaker Change: Unlike competitive solutions that rely on faster tax log analysis for detection and remediation recommendations our AI powered API protection works automatically continuously and in real time to identify bad actors and block their attacks.
Roy Zisapel: For our customers, distance-slacing to optimize protection and significantly faster time to resolve. We are pleased to announce that analysts recognize the strengths of our AI capabilities. In May, GigaOM evaluated the AI protection capabilities of 13 security providers in our space in the 2024 Radar for Application and API Security reports. In the report, GigaOM stated that Radware is the only vendor in this analysis where the top score on the AI-enhanced vulnerability detection criteria. Radware includes everything that we currently look for in this feature. In addition, 2020-24 year inside voice-of-the-customer reports for cloud web application and API protection named as a strong performer, noting that 99% of customers are willing to recommend Radware.
Speaker Change: For our customers disciplined slating to optimize protection and significantly faster time to results.
Speaker Change: We are pleased to announce that analysts recognize the strength of our AI capability.
Speaker Change: In May <unk>.
Speaker Change: Evaluated the AI protection capabilities of 13 security providers in our space.
Speaker Change: In the 'twenty 'twenty four right, though for application and API security folks.
Speaker Change: In the report <unk> stated during.
Speaker Change: The only thing in this analysis.
Speaker Change: Top score on the AI enhanced ability detection.
Rod: Rod will includes everything that we currently look for in the future.
Yisca Erez: In addition, Gartner's 2024 Peer Insight Voice of the Customer report for cloud web application and API protection named us a strong performer, noting that 99% of customers are willing to recommend Radware. To support our growing cloud customer base, we launched a new cloud security service center in Paris. We plan to open three to four additional centers by the end of 2025.
Rod: In addition relative to 2020 for your inside voice of the customer reports for cloud web application and API prediction named US a strong portfolio.
Rod: Noting that 99% of customers are willing to recommend us.
Roy Zisapel: To continue to meet our customers' evolving security and infrastructure needs, we accelerated our pace of innovation. During the second quarter, we added numerous new capabilities to our cloud security platform. We expanded our cloud platform with a DNS as a service capability and with our NOKEY solution for private people, action storage and management. We also introduced a new compliance solution to help organizations easily navigate and streamline the process of meeting PCI DSS for zero required. This new PILA for our cloud application protection service offers customers dedicated controls, extensive usability, and easy-to-access reports. The BCI DSS regulation went into effect on March 31, 2024, and will become mandatory starting March 31, 2025.
Rod: We continue to meet our customers' evolving security and infrastructure needs, we accelerated our pace of innovation.
Rod: During the second quarter, we added numerous new capabilities to our cloud security platform.
Rod: We expanded our cloud platform with DNS as a service capability.
Rod: And with our no key solution for privacy protection storage and management.
Rod: We also introduced a new compliance solution to help organizations easily navigate them streamline the process of meeting PCI.
Rod: Foreseeable requirements.
Rod: This new pillar for our cloud application protection service offers customers dedicated controls.
Rod: Extensive visibility and easy to access reports.
Rod: As PCI DSS regulation went into effect on March 31, 2024, and will become mandatory starting March 31 2025.
Roy Zisapel: To support our growing cloud customer base, we launched a new cloud security service center in Paris. The facility without customers increased resiliency and complied with local data privacy requirements. The launch extends our deed of the web application and application capacity to 15 terabits across more than 50 cloud security service centers worldwide. We plan to open three to four additional centers by the end of 2024. We believe that BCI and the additional modules in our cloud security platform increase the business value our customers extract from our solutions. Going forward, we expect these benefits will generate more traction for our offering, increase our ARR, and enhance platform stickiness.
Rod: To support our growing cloud customer base, we launched a new cloud security service centre in Paris.
Rod: The facility without customers increased resiliency and comply with local data privacy requirements.
Rod: The launch extends our Ddos and web application attack mitigation capacity to 15 therapy across more than 50 cloud security service centers worldwide.
Rod: We plan to open three to four additional centers by the end of 2024.
Rod: We believe that <unk> and the additional module in our cloud security platform increase the business value our customers extract from our solutions.
Yisca Erez: Going forward, we expect these benefits will generate more traction for our offering, increase our ARR, and enhance platform stickiness. In our on-premise security business, we also see encouraging momentum. DefenseProX, with its superior DNS and WebDDoS mitigation capabilities, is gaining strong market traction, with its performance convincing customers of the necessity to upgrade their current infrastructure.
Rod: Going forward, we expect these benefits will generate more traction for our <unk>, three <unk> and enhanced platform stickiness.
Roy Zisapel: In our on-prem security business, we also see encouraging momentum. Defense Pro X, with its superior DNS and web data mitigation capabilities, is gaining strong market traction. For example, we close the multi-million dollar deal with one of the largest stock exchanges in Europe. The customer recognized the need to protect the network and applications from both volumetric and web data attacks. The combination of our new AI powered DNS protection with Defense Pro X performance convinced them of the necessity to upgrade the current infrastructure. Our ability to mitigate its sophisticated layer seven data attacks without the need to hand over certificates was another key motivating factor in their purchasing decision.
Rod: In our on Prem security business, we also see encouraging momentum.
Rod: Defense Pro X with its superior DNS and web Ddos mitigation capabilities is gaining strong market traction.
Rod: For example, we closed a multimillion dollar deal with one of the largest stock exchanges in Europe.
Rod: The customer recognized the need to protect the Netflix and applications for both volumetric and web Ddos attacks.
Speaker Change: The combination of our new AI powered DNS, we'll fix it.
Rod: <unk> performance convince them of the necessity to upgrade their current infrastructure.
Rod: Our ability to mitigate that sophisticated layer seven ddos attacks without the need to handover certificate was another key motivating factor in their purchasing decision.
Roy Zisapel: Defense Pro X also earned us new logos, and a good example is a European insurance institution. The customer was interested in enhancing protection for the services and infrastructure, and defense Pro X provided crucial protection that the incumbent could not offer. This deal was part of a broader Cisco project.
Speaker Change: Defense for AG also in this new logos and a good example is the European insurance institution.
Yisca Erez: The customer was interested in enhancing protection for their services and infrastructure, and Defense 4X provided crucial protection that the incumbent could not offer. This deal was part of a broader Cisco project. Before beginning the financial overview, I'd like to remind you that, unless otherwise indicated, all financial results are non-GAAP. Revenue for the second quarter of 2024 was $67.3 million compared to $65.6 million in the same period of last year. This growth was mainly driven by cloud security business expansion and DefenseProX's success with our carriers and large enterprise customers.
Speaker Change: The customer was interested in enhancing production for their services and infrastructure and defense to X provided crucial protection, but the incumbent could not offer this.
Speaker Change: This deal was part of a broader fiscal project.
Roy Zisapel: In summary, although customer spending patterns have not yet returned to previous levels, we delivered solid results for the second quarter. We are excited about the momentum in our on-prem security business as well as the advancements in our cloud security strategy, particularly with the launch of our new APKI. Looking out into the second half of 2024, we remained focused on accelerating our cloud business and deliver a well-position for future growth and increased profitability.
Speaker Change: In summary, although customer spending patterns have not yet returned to previous levels.
Speaker Change: We delivered solid results for the second quarter.
Speaker Change: We are excited about the momentum in our on Prem security business as well as the advancements in our cloud security strategy.
Speaker Change: <unk> with the launch of our new API.
Speaker Change: Looking out into the second half of 2024, we remain focused on accelerating our cloud business and believe we are well positioned for future growth and increased profitability.
Guy Avidan: With that, I will turn the call over to Guy. Thank you, Roy, and good day, everyone. I'm pleased to provide the analysis of our financial results and his performance for the second quarter of 2024, as well as our outlook for the third quarter of 2024. Before beginning the financial overview, I'd like to remind you that unless otherwise indicated, all financial results are non-GAAP. A full reconciliation of our results on the gap and non-gap basis is available in determining press release issues earlier today, and on the second quarter of 2024 was $67.3 million compared to $65.6 million in the same period of last year.
Speaker Change: With that I will turn the call over to Guy.
Guy: Thank you Roy and good day everyone.
Guy: I'm pleased to provide the analysis of our financial results and business performance for the second quarter of 2024 as.
Guy: As well as our outlook for the third quarter of 2024.
Yisca Erez: The cloud security business expansion is reflected in the 19% year-over-year increase in cloud ARR, although it has not yet returned to previous levels on the original Breakdown. On a 12-month trailing basis, APAC revenue increased 1% year-over-year. I'll now discuss profits and expenses. Operating expenses decreased 6% year-over-year from $52 million to $49 million for the second consecutive quarter, at the low end of our guidance. We are selectively adding investment to accelerate cloud security growth in R&D to increase our technological mode. Yet, we remain dedicated to driving efficiency and EPS growth and diligently managing our expenses. Radware's adjusted EBITDA for the second quarter doubled to $8.3 million, or $11 million excluding the HOX business.
Guy: Before beginning the financial overview I would like to remind you that unless otherwise indicated all financial results are non-GAAP.
Guy: A full reconciliation of our results on a GAAP and non-GAAP basis is available in the earnings press release issued earlier today and on the investors section of our website.
Guy: Revenue for the second quarter of 2024 was $67 $3 million compared to $65 6 million.
Guy: In the same period of last year.
Guy Avidan: This growth was mainly driven by cloud security business expansion and defense projects success with our carriers and large enterprise customers. The cloud security business expansion is reflected in the 19% year of the year increase in cloud ARR, which reached approximately $70 million and accounted for 32% of total ARR in the second quarter of 2024, up from 28% in the same period of 2023. Our total ARR reached approximately $217 million, representing 7% adjusted growth over the same period of last year. Over the past few quarters, we witnessed signs of recovery in customer spending, although it has not yet returned to previous levels.
Guy: This growth was mainly driven by cloud security business expansion and defense <unk> success, with our carriers and large enterprise customers.
Guy: The cloud security business expansion is reflected in the 19% year over year increase in cloud.
Guy: Which reached approximately $70 million and accounted for 32% of total IRR and our second quarter 2024 up from 28% in the same period of 2023.
Guy: Our total IRR reached approximately $217 million.
Guy: Presenting 7% adjusted growth over the same period of last year.
Guy: Although the past few quarters, we've witnessed signs of recovery in customer spending.
Guy: Though it has not yet returned to previous levels.
Guy Avidan: On a regional breakdown, revenue in the Americas in the second quarter of 2024 grew 12% year over year to $30.1 million and accounted for 45% of total revenue. On a 12 months trailing basis, America revenue decreased 10% year over year. America revenue in the second quarter of 2024 was $22.8 million, representing a 1% year-over-year increase and accounted for 34% of total revenue. On a 12 months trailing basis, APA revenue in the second quarter of 2024 was $14.4 million, which represented a decrease of 11% year over year and accounted for 21% of total revenue. On a 12 months trailing basis, APA revenue increased 1% year over year.
Guy: On a regional breakdown.
Guy: Revenue in the Americas in the second quarter of 2024 grew 12% year over year to $31 million.
Guy: It accounted for 45% of slower revenue.
Guy: On a 12 month trailing basis America revenue decreased 10% year over year.
Guy: EMEA revenue in the second quarter of 2024, it was $22 $8 million, representing 1% year over year increase and accounted for 34% of total revenue.
Guy: On a 12 month trailing basis, EMEA revenue decreased 9% year over year.
Guy: APAC revenue in the second quarter of 2024 was $14 $4 million, which.
Guy: <unk>, a decrease of 11% year over year and accounted for 21% of total revenue.
Guy: On a 12 month trailing basis, APAC revenue increased 1% year over year.
Guy Avidan: I'll now discuss profits and expenses. Gross margin in Q2 2024 was 82.2%, approximately similar to 82.3% in the same period of 2023. Operating expenses decreased 6% year over year from $52 million to $49 million for the second consecutive quarter at the lower end of our guidance. Operating income reached $6.3 million compared to $1.9 million in the same period of last year. We are selectively adding investment to accelerate cloud security growth in R&D to increase our technology mode, go to market, and infrastructure. Yet, we remain dedicated to driving efficiency and EPS growth, and diligently managing our expenses.
Guy: I'll now discuss profits and expenses.
Guy: Gross margin in Q2, 2024 was 82, 2% approximately similar to 82, 3% in the same period of 2023.
Guy: Operating expenses decreased 6% year over year from 52 million to $49 million for the second consecutive quarter at the lower end of our guidance.
Guy: Operating income reached $6 3 million compared to one 9 million in the same period of last year.
Guy: We are selectively adding investment to accelerate cloud security growth in R&D to increase our technology moat.
Guy: Go to market and infrastructure.
Guy: Yet, we remain dedicated to driving efficiency and EPS growth and diligently managing our expenses.
Guy Avidan: Radware's adjusted EBDA for the second quarter has doubled to $8.3 million, or $11 million excluding the Hawks' business, compared to $4.1 million, or $6.8 million excluding the Hawks' business in the same period of last year. Financial income was $4.1 million in the second quarter. The tax rate for the second quarter in 2024 was 15.4% compared to 14.8% in the same period of last year. We expect the tax rate to remain approximately the same next quarter. That income in the second quarter nearly doubled to $8.8 million as compared to $4.5 million in the same period last year.
Guy: <unk> adjusted EBITDA for the second quarter has doubled to $8 $3 million or $11 million, excluding the <unk> business.
Guy: Compared to $4 $1 million or $6 8 million, excluding the <unk> business.
Guy: In the same period of last year.
Guy: Financial income was $4 1 million in the second quarter.
Guy: The tax rate for the second quarter in 2024 was 15, 4% compared to 14, 8% in the same period of last year.
Guy: We expect the tax rate to remain at approximately the same next quarter.
Guy Avidan: The loaded earnings per share for Q2 2024 doubled to 20 cents versus 10 cents we had in Q2 2023.
Guy Avidan: Turning to the cash flow statement and the balance sheet. Cash flow from operation in Q2 2024 was $23 million compared to cash flow from operation of $4.9 million in the same period of last year. This brings cash flow from operation year-to-date to $44.2 million. Improvement in the cash flow form operation is mainly attributed to the increase in net income, along with strong billing performance in the second quarter of 2024. As of June 30, 2024, approximately $66 million remained in our shared purchase plan. We ended the second quarter with approximately 397 million in cash, cash equivalent, tax deposit, and marketable securities.
Yisca Erez: Turning to the cash flow statement and the balance sheet, cash flow form operation in Q2 2024 was $23 million compared to cash flow form operation of $4.9 million in the same period of last year. Cash, Cash Equivalent, Bank Deposit, and Marketable Securities.
Speaker Change: We do not share purchase plan.
Guy: We ended the second quarter was approximately 397 million in cash cash equivalents bank deposits and marketable securities.
Guy Avidan: I'll conclude my remarks with guidance. We have tacked total revenue for the third quarter of 2024 to be in the range of $67.5 million to $69 million. We expect Q3 2024 non-GAAP operating expenses to be between $49.5 million to $50.5 million. We expect Q3 2024 non-GAAP diluted net earnings per share to be between 19 and 21 cents.
Guy: I'll conclude my remarks with guidance.
Guy: We expect total revenue for the third quarter of 2024 to be in the range of 67, and a half to $69 million.
Yisca Erez: $69 million. Forty-nine and a half. $50.5 million. I'll now turn the call over to the operator for questions. Operator, please.
Guy: We expect Q3 2024, non-GAAP operating expenses to be between.
Guy: For the nine and a half to $55 million.
Guy: We expect Q3 2024, non-GAAP diluted net earnings per share to be between.
Guy: 19 and 21.
Operator: I'll now turn the call over to the operator for questions. Operator, please. We are now opening the floor for question-and-answer session. If you'd like to ask a question, please press star one.
Speaker Change: I'll now turn the call over to the operator for questions operator. Please.
Guy: Okay.
Operator: We are now opening the floor for a question and answer session. If you'd like to ask a question, please press star 1. Our first question comes from Alex Henderson from Needham. Your line is now open. Good.
Speaker Change: We are now opening the floor for a question and answer session. If you'd like to ask a question. Please press star one.
Alex Henderson: Our first question comes from Alex Henderson from Needham. Your line is now open. Great. Thanks. And let me just express my hope that everybody's safe and healthy at Radware and in your family. at least.
Speaker Change: Our first question comes from Alex Henderson from Morgan.
Speaker Change: Line is now open.
Alexander Henderson: Great. Thanks.
Speaker Change: Let me just express my hope that everybody is safe and healthy.
Speaker Change: At Radware and your families.
Alexander Henderson: I wanted to just hit the first question around the signs of recovery that you indicated. Can you dive into a little bit more what signs you're seeing? Improved closure rates, larger deal sizes, stronger pipeline, what are those signs of recovery that you mentioned?
Roy Zisapel: I wanted to just hit the first question around the signs of recovery that you indicated. Can you dive into a little bit more? What signs you're seeing? Is it improved closure rates? Is it larger deal sizes? Is it a stronger pipeline? What are those signs of recovery that you mentioned?
Alexander Henderson: I wanted to just hit the first question around the signs of recovery that you you indicated.
Speaker Change: Can you dive into a little bit more.
Speaker Change: Whats signs youre seeing is it.
Speaker Change: Proved closure rates is it larger deal sizes.
Speaker Change: And stronger pipeline, what whats what are those signs of recovery.
Speaker Change: You mentioned.
Speaker Change: Yes.
Roy Zisapel: Thanks a lot, Alex.
Yisca Erez: Thanks a lot, Alex. So, I would distinguish between two types of offerings we have. On the cloud security platform, we've seen all along strong momentum, and strong growth.
Speaker Change: Thanks, a lot Alex so.
Roy Zisapel: I would distinguish between two types of offerings we have. At the cloud security platform, we've seen all along strong momentum, strong growth, and it's evident also this corner where we saw weakness in the past and it's still not back to normal, as we've noted, is mainly on the large capex deals, the on-prem ones. We're starting to see what we think is a bit of acceleration in the momentum of those deals, obviously some closures. I talked on some of them, especially on the defense projects. We are seeing even the heightened security challenges as well as this new platform in refresh cycle.
Speaker Change: I would distinguish between two types of offerings, we have in the cloud security platform, we've seen all along strong momentum.
Speaker Change: Loan growth.
Speaker Change: And <unk> this quarter.
Speaker Change: We saw weakness in the past and it's still not back to normal as we as we've noted is mainly on the large capex deals.
Speaker Change: The on Prem ones.
Speaker Change: We're starting to see what we think is a bit of acceleration in the momentum of those deals obviously some closures.
Speaker Change: On some of them, especially on the defense Blinks, we are seeing given the heightened security challenges as well as this new platform and refresh cycle, we are starting to see cluster closure rates very strong pipeline.
Roy Zisapel: We are starting to see cluster closure rates, very strong pipeline, much more activity. We still need to monitor how quickly we translate that to revenues, but definitely we see a pickup also on the on-prem side of our business.
Speaker Change: Much more activity.
Speaker Change: We still need to monitor how quickly we translate that to revenue, but definitely we see a pickup also on the own brand side of our business.
Speaker Change: Thanks.
Roy Zisapel: If you could address the partnership revenue streams and specifically what you're seeing in terms of visibility there, that would be very helpful. Thanks. Our OEM partners continue to know if I look on them together to execute well. For the quota, it's still in the very high level of our performance. We see strong opportunities and actually better partnership with both. I think also here we're seeing them, for example, adding more of our cloud security solutions to their customer base. We're seeing them adopting our new defense for X, etc. So they are aligned with all the innovation and new capabilities we're bringing.
Operator: If you could address the partnership revenue streams and...
Speaker Change: If you could address the partnership revenue streams and <unk>.
Speaker Change: Specifically.
Speaker Change: What youre seeing in terms of visibility there.
Speaker Change: Very helpful. Thanks.
Speaker Change: Yeah.
Speaker Change: <unk> continued to know if I look at them.
Speaker Change: To execute well for the quarter, it's still in the very high level of our of our performance, we see strong opportunities.
Speaker Change: The better partnership with both so I think also here.
Speaker Change: We're seeing them for example, adding more of our cloud security solutions to their customer base, we're seeing.
Roy Zisapel: They're exposing all of that in the price list, spot numbers, self-training, webinars, and so on.
Roy Zisapel: So definitely I think that's at least for now in a record level, and we believe there's obviously much more potential. The potential with those two partners is immense for us, and we're starting to get more traction.
Roy Zisapel: Great. I'll see the floor. Thanks.
Chris Rimer: Our next question comes from Chris Rimer from Barclays.
Chris Rimer: Your line is now open. Hi. Congratulations on the strong results, and thanks for taking my questions. First off, I wanted to ask about operating expenses. Considering the last few quarters, we've seen some nice decreases in the strict cost management you've been talking about.
Chris Reimer: Hi, congratulations on the strong results and thanks for taking my questions. First off, I wanted to ask about operating expenses. Considering the last few quarters, we've seen some nice decreases in the strict cost management you've been talking about. How should we be looking at that playing out for the rest of the year, and might we see continued declines, or is this going to level off at some point?
Guy Avidan: How should we be looking at that playing out towards the rest of the year, and might we see continued declines, or is this going to level off the template? So, we already mentioned it. We are not really planning to continue the decline on the country, where we may see some increase, and we're seeing a lot of opportunities in go-to-market. We think we have a great opportunity to open the gap from competition regarding dimension, FPKI, generative AI products, and the like. So, OptX will probably continue to grow slightly.
Chris Reimer: So OPEX will probably continue to grow slightly.
Speaker Change: We'll probably continue to grow slightly.
Guy Avidan: Guy, guy, and the growth, the growth in the Americas on this quarter.
Operator: got it got it um and the growth the the growth in the Americas on this quarter What kind of
Speaker Change: Got it got it.
Speaker Change: And.
Speaker Change: The growth the growth in the.
Speaker Change: Americas on this quarter.
Guy Avidan: Can you give any color around that? What was that growth stemming from? Was that new customers? Was that specific closures that you managed on the quarter, just in terms of how that is those that growth there?
Speaker Change: Can you give any color around that.
Speaker Change: <unk>.
Speaker Change: What kind of.
Speaker Change: What was it that but what was that growth stemming from a was that.
Speaker Change: New customers was that.
Speaker Change: Specific closures that you managed on on the quarter just in terms of of how that how that is is built that that growth there.
Guy Avidan: Yeah, so first, you know, we had nice growth discourse in revenues, and it's always nice to speak about growth. But I want to remind everyone that the way we look on a territorial or a region is more on a 12-month period. We think it's normalizes for some, I would say, ups and downs we might have because of OptX projects such as on a 12-months, it's clearly we still have work to do on the Americas. In general, you know, we saw very good business from actually existing customers there with long comics to our solutions. And we do see America as a significant place; we can improve our results.
Speaker Change: Yeah.
Speaker Change: So first to know.
Speaker Change: Nice growth this quarter in revenues and it's always nice to speak about growth but.
Speaker Change: I want to remind everyone that the way we look on a theory, though euro region is more on a 12 month periods with things you'd say, it's normalizes for some.
Speaker Change: I would say ups and downs, we might have because of capex projects et cetera. So on a 12 months. It's clearly we still have work to do on the Americas in general even though we saw very good business for them actually existing customers do with our with local mix through our solutions.
Speaker Change: And we do see Americas has a significant place we can improve our results. So we believe there's a significant upside in the Americas. Some of the investments that guy alluded to are obviously focused on that region.
Roy Zisapel: So we believe there's a significant upside in the Americas; some of the investments that Guy alluded to are obviously focused on that region. As we mentioned, it's going to be a first growth in revenues and then expenses, but definitely we see America as a place we can accelerate growth in.
Speaker Change: As we mentioned.
Speaker Change: It's going to be.
Speaker Change: The growth in revenues and expenses, but definitely we see Americas has a place within the accelerated growth theme.
Chris Rimer: Okay, thank you. That's it for me. Thank you.
Operator: Guy, thank you; that's it for me.
Speaker Change: Got it. Thank you that's it for me.
Speaker Change: Thank you.
George Notter: Our next question comes from George Nauter from Jeffries.
George Charles Notter: Our next question comes from George Notter from Jeffreys. Your line is now open.
Speaker Change: Our next question comes from George Notter from Jefferies. Your line is now open.
George Notter: Your line is now open. Hey, thanks a lot, guys. I want to ask some questions about the Defense Pro X refresh cycle. I think it really started an earnest; I think earlier this year, but I'm curious about what kind of traction you guys are getting. Any metrics you can give us on pacing of the rollout, maybe the mixture of Defense Pro X relative to historical Defense Pro appliances. Any more sense you can give us on the progress there would be interesting.
George Charles Notter: Hey, thanks a lot, guys. I want to ask some questions about the Defense Pro X refresh cycle. I think it really started in earnest earlier this year, but I'm curious about what kind of traction you guys are getting, any metrics you can give us on the pacing of the rollout, maybe the mix of Defense Pro X relative to historical Defense Pro appliances. Any more sense you can give us on the progress there would be interesting.
George Charles Notter: Hey, Thanks, a lot guys I wanted to ask some questions about the defense Pro X refresh cycle.
George Charles Notter: I think it really started in earnest I think earlier this year, but I'm curious about what kind of traction you guys are getting.
Speaker Change: Any metrics you can give us on on pacing of the rollout.
George Charles Notter: Maybe the mixture of defense proactive relative to historical defense pro appliances or any more sense you can give us on the progress there would be interesting. Thanks.
Roy Zisapel: Thanks. Yeah, so I think you're right. The risk of contribution started at the beginning to one and now more into two. The main indicators we see are very strong growth in pipelines and strong engagement also with our very large costs. for customers. The reason for that is on federal aspects. First, like every appliance-rich cycle, customers would need to move over the next two, three years from the announcement that took place a year ago. So obviously, if time comes, more and more customers are pushed there. But that's what I would say is the smaller part of the story.
George Charles Notter: Okay.
Speaker Change: Yeah. So.
Speaker Change: I think youre right. The real contribution started the beat in Q1 and now more in Q2.
Speaker Change: The main indicators, we feel very strong growth in pipeline.
Speaker Change: And strong engagement also.
Speaker Change: These are very large customers.
Guy Avidan: The reason for that is several aspects. First, like every appliance refresh cycle, customers would need to move over the next two, three years from the announcement that took place a year ago. So obviously, as time comes, more and more customers are pushed there. But that's, I would say, is the smaller part of the story.
Speaker Change: The reason for that is.
Speaker Change: On several aspects first like Italy.
Speaker Change: <unk> follicular cycle customers.
Speaker Change: It would need to move over the next two three years from announcement that took place a year ago. So obviously as time has gone more and more customers are.
Speaker Change: Our push there, but that's I would say is the smaller part of the story.
Roy Zisapel: The bigger part is that in defense for X, we have a battery of new algorithms. I mentioned the DNS; I mentioned the WebDLS that are very critical to block existing attacks, waves that we're seeing now. Obviously, when we developed all these algorithms, we were looking forward to what actors might be able to do or where the market is going. And what we are seeing now, we are seeing waves of such attacks that defense for X is unique in its capabilities to block. For example, web layer DLS attacks without the need to open the encrypted traffic.
Guy Avidan: The bigger part is that in Defense 4X, we have a battery of new algorithms. I mentioned DNS, I mentioned the web DLS, that are very critical to block existing attack waves that we're seeing now. Obviously, when we developed all these algorithms, we were looking forward to what hackers might be able to do or where the market was going. And what we are seeing now, we're seeing waves of such attacks that Defense Pro X is unique in its capabilities to block, for example, web layer DDoS attacks without the need to open the encrypted traffic.
Speaker Change: Bigger part is that in defense Forex, we have a battery of new algorithms I mentioned, the DNS I mentioned the web DNS.
Speaker Change: Are very critical.
Speaker Change: To block existing attacks waves that we're seeing now obviously when we've developed all these algorithms we were looking forward towards that might be able to do or the market is going and what we're seeing now we're seeing waves of such attacks that defense Brexit is unique in its capability.
Speaker Change: These two block for example, web layer ddos attacks without the need to open the encrypted traffic that's of significance.
Guy Avidan: That's a significant advancement that we have, or all the complicated DNS attacks. So, many of our large customers are starting to see or experience these attacks on the infrastructure, and there's obviously a clear need to protect defense products, which is the best answer for that. So the attack landscape and our ability to do that is a very strong contributor. And the third one is that in DefenseProX, we have our new, custom designed FPGA that is providing 3 to 4x performance improvements across many parameters.
Roy Zisapel: That's a significant advancement that we have, or all the complicated DNS attacks. So many of our large customers are starting to see or experience these attacks on the infrastructure. And there's obviously a clear need to protect. Defense for X is the best answer for that. So the attack landscape and our ability to do that is a very strong contributor. And the third one is that in defense for X, we have our new own designed FPGAs that are providing three to four X performance improvements across many parameters. It's not only packet per second sessions; maybe traffic, ability to challenge the attackers.
Speaker Change: The advancement that we have or all the complicated DNS effects. So many of our large customers are starting to see or experience. These attacks on the infrastructure and there's obviously a clear need to protect defense products.
Speaker Change: Is the best answer for that so the attack landscape and our ability to do that is a very strong.
Speaker Change: <unk> contributed in the third one is that in defense brakes, we have.
Speaker Change: Our new one designed fpga's.
Speaker Change: That are providing three to four X performance.
Speaker Change: <unk> across many parameters, it's not only packet per second sessions midday trough peak ability to challenge doctors, it's basically wireless speed on 800 gig in any platform that the that we use the FPGA for so that capacity increases matches what.
Guy Avidan: It's not only packets per second, sessions, LED traffic, ability to challenge attackers. It's basically wire speed on 800 gigabits per second in any platform that we use the FPGA for. So that capacity increase matches what our customers experience in their networks that are scaling in session transactions, significantly better performance, and as a result, price performance, very strong capabilities in attack protection that are critical for those large customers and the research cycle. We think that all of that together is coming together this year; maybe last year we saw less of these attacks, this year with more attacks, more time on the timeline, bigger capacities that are needed, a bit maybe better budget environment. All of that is really driving what we see as a strong opportunity.
Roy Zisapel: It's basically wire speed on 800 gig in any platform that will use the FPGAs. So that capacity increases, matches what our customer experience in their networks that are scaling in sessions and actions. So significantly better performance, and as a result, price performance, very strong capabilities in attack protection that are critical to those large customers and the research cycle. We think that all of that together is coming together this year, maybe last year. We'll see less of that attack, this year with more attacks, more time on the timeline, bigger capacity that are needed, a bit maybe better budget environment. All of that is really driving what we see as a strong opportunity for us.
Speaker Change: Our customer experience in the metrics that those scaling insertion transaction so <unk>.
Speaker Change: Significantly better performance and as a result price performance very strong capabilities and attack protection that are critical for those large customers and the repair cycle, we think that all of that together.
Speaker Change: Is coming together the field, maybe lastly, we've seen less of that attacks do you feel with more attacks more time on the on the timeline biggest capacities that are needed a bit maybe better budget environment all of that is really driving.
Speaker Change: What we see as a strong opportunity for us.
George Notter: Got it.
Speaker Change: Got it and then what's the mix of defense Pro X in terms of your appliance shipments this quarter relative to the historical products.
Roy Zisapel: And then what's the mix of Defense Pro X in terms of your appliance shipments as a quarter relative to the historical products? We're not really disclosing this matrix.
George Notter: Fair enough.
Roy Zisapel: And then the other one I had was just on the Epic AI capability. Can you just remind me how you guys are monetizing? That is now in your cloud scrubbing services. Is that now embedded in DefensePro X? Box.
Roy Zisapel: I'd love to hear more about the monetization there and how you're going to mark it with it. Okay, so this framework of AI capabilities is going to spend all our solutions, the on-prem and the cloud. The initial instances of that is taking place in the cloud security modules for API boards, WAF, and DDoS, as well as in the Defense Pro-X application protection. Additional modules like the cross-correlation, AI and the AI SOC agent, the predictive SOC, will be across all our solutions, and you're going to see announcements in the coming year. So we see that as impacting all our solutions. Obviously, initially will benefit that in DPX and cloud, but going forward is going to be significant improvement to all our security benefits as an add-on layer to all our existing revenues.
Guy Avidan: Okay, so this framework of AI capabilities is going to span all our solutions, on-premises and in the cloud. The initial instances of that are taking place in the cloud security modules for API, bots, WAF, and DDoS, as well as in the DefenseProX application protection. Additional modules like the cross-correlation AI and the AI SOC agent, the predictive SOC, will be across all our solutions, and you're going to see announcements in the coming years.
Guy Avidan: So we see that it's impacting all our solutions. Obviously, initially, we'll benefit from it in DPX and cloud, but going forward, it's going to be a significant improvement to all our security benefits as an add-on layer, all our existing leverage.
Roy Zisapel: Are you guys charging for that on an a la carte basis, or is it rolled into the existing API bot DDoS software capabilities? It depends on the capability. So first, it only appears in our highest bundle. So it drives bundle adoption to what we call Complete to start with.
Guy Avidan: Got it. Are you guys charging for that on an a la carte basis, or is that rolled into the existing API bot DDoS software capability?
Speaker Change: Our software capabilities.
Guy Avidan: It depends on the capability. At first, it only appears in our highest..., in our highest bundle, so it drives bundle adoption to what we call complete, to start with. Second, the predictive SOC, the AI SOC, is going to be charged separately as well. So it's both about moving customers to the higher end of the packages plus add-on modules for everything that is across multi-module or cross-correlation or management or AI SOC and so on.
Speaker Change: It depends it depends on the capability. So firstly it is.
Speaker Change: With only a few of us in our highest.
Speaker Change: In our highest bundles so he drives bundle adoption to what we call complete.
Speaker Change: To start with second.
Roy Zisapel: Second, the predictive SOC, the AI SOC, is going to be charged separately as well. So it's also moving customers to the higher end of the packages plus add-on modules for everything that is across multi-module or cross-correlation or management or AI SOC and SOC.
Speaker Change: <unk>, so the ISO who is going to be charged separately as well. So it's both on moving customers to the higher end of the packages plus add on modules for everything that is across multi module or cross correlation or managed demands or AI <unk> console.
George Notter: Okay, thank you very much. Appreciate it.
Operator: Great. Okay. Thank you very much. I appreciate it.
Speaker Change: Okay. Okay. Thank you very much appreciate it.
Alex Henderson: Thank you. Our next question comes from Alex Henderson. For me, Dan.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Alex Henderson from Needham. Your line is now open.
Guy Avidan: Your line is now open. Great. I was hoping you could talk a little bit about the expansion of your cloud data center or CAPEX plans and where we are in terms of that rollout and how much further you think you need to go. What's the cash use or CAPEX expenditures look like? We mentioned earlier that we expect to increase the number of locations between three to four throughout the year. CAPEX will grow a little bit more than it was this quarter, which was close to one million. So we think it's going to be closer to two million for quarter.
Alexander Henderson: Great I was hoping you could talk a little bit about the expansion of your.
Speaker Change: Cloud.
Speaker Change: Yes.
Speaker Change: Data center.
Speaker Change: Oh Capex plans and.
Speaker Change: And where we are in terms of that rollout and how much further you think you need to go.
Speaker Change: What's the cash use.
Speaker Change: Our capex expenditures look like.
Speaker Change: So we mentioned earlier that we expect to increase number of location.
Speaker Change: Between three to four.
Yisca Erez: throughout the year. CapEx will grow a little bit more than it was this quarter. Close to 1 million, so we... That's going to be the impact. Based on demand, based on new locations, this number could grow in 2025.
Speaker Change: Throughout the year.
Speaker Change: Capex will grow a little bit more than it was this quarter, which was close to $1 million that we.
Speaker Change: I think it's going to be closer to $2 million per quarter.
Guy Avidan: That's going to be the impact. Based on demand, based on new locations, this number can grow in 2025. And as you're looking at the coverage, where are you relative to the coverage that you think you need given your current scale?
Speaker Change: That's going to be the impact.
Speaker Change: Based on demand based on the new location.
Speaker Change: Number can grow in 2025.
Yisca Erez: And as you're looking at the coverage, how much, where are you relative to the coverage that you think you need given your current scale? Uh... you know it's just it's just a
Speaker Change: And as as Youre looking at the coverage.
Speaker Change: Now how much.
Speaker Change: Or are you relative to the coverage that you think you need given.
Speaker Change: Given your current scale.
Roy Zisapel: Is this a three, four, or five-year process to continue to build out the geographies? I think overall, for the global market, we are well-carbonated. What we're doing now, we're adding in, I would say, specific countries, additional capabilities based on partnership or local regulation. So, I think the scale of the platform is 15 terabits. I think it's doing very well. As we mentioned, we're 50 locations worldwide, so let us see more covering already all the between countries pretty well, but we do see opportunities, especially with partnership or remote countries, et cetera, to extend the cloud business and through those local ports.
Speaker Change: Is this just to say.
Speaker Change: 345 year process.
Speaker Change: To continue to build it build out.
Speaker Change: <unk>.
Yisca Erez: I think overall, for the global market, we are well covered. What we're doing now is adding in, I would say, specific countries, additional capabilities based on partnership or local regulation. So I think the scale of the platform, at 15 terabits, I think it's doing very well.
Speaker Change: Yes.
Speaker Change: I think overall for the global market, we are well covered what we're doing now we're adding I would say specific countries additional capabilities based on both a cheap local regulation. So I think the scale of the platform with 15 therapy.
Speaker Change: It's doing very well as we've mentioned, we're 50 locations worldwide too.
Yisca Erez: As we've mentioned, we have 50 locations worldwide, so let's assume we're already covering all the G20 countries pretty well. But we do see opportunities, especially with partnership or remote countries, et cetera, to extend the cloud business through those local POPs. And then we do that.
Speaker Change: A few more recovering already OLED between countries pretty well, but we do see opportunities, especially with partnership or remote countries et cetera.
Speaker Change: The cloud business.
Speaker Change: Through those local pumps and then we we do that as Scott mentioned I think of our Hawaii overall.
Roy Zisapel: And then we do that, as Guy mentioned. I think our ROI overall on those ports is we scale the customer very, very good, so it's a very good business decision. But we do that obviously with partners, and when we have that business, the global network, I think, is built well.
Yisca Erez: As Guy mentioned, I think our ROI overall on those POPs, as we scale the customer there, is very, very good. So it's a very good business decision, but we do that, obviously, with partners. And when we have that business, the global network, I think, is built well.
Scott: On the books as we scaled the customer.
Yisca Erez: Very good so it's a very good business decision, but we do that obviously with partners and when we have that business. The global network I think is built well.
Yisca Erez: If I look at the cloud, you know, growth, it actually decelerated a couple of percentage points. Can you talk a little bit about why that's the case, and do you expect it to reaccelerate?
Roy Zisapel: If I look at the cloud growth, it actually decelerated a couple of percentage points. Can you talk a little bit about why that's the case, and do you expect it to re-accelerate? Yeah, I think we definitely wanted to re-accelerate, and as you see, we're investing both in locations that you alluded to, but also in capabilities and modules. I've mentioned the DNS as a service, I mentioned the no key, I mentioned the PCI DSS compliance as well as strengthening the platform. So, obviously, we have programs in the company. I think we can accelerate it; we're investing more in that. It's a strong world's opportunity. We want to go back first to where we were, and let's see how we end the yield, but that's definitely where we are heading.
Speaker Change: If I look at the cloud.
Speaker Change: No.
Speaker Change: Growth.
Speaker Change: It actually decelerated a couple of percentage points.
Speaker Change: Can you talk a little bit about why that's the case and do you expect it to Reaccelerate.
Speaker Change: Yeah.
Yisca Erez: Yeah, I think we definitely wanted to re-accelerate, and as you see, we're investing. Obviously, we have programs in the company. I think we can accelerate that. And we're investing more in that. It's a strong growth opportunity.
Speaker Change: Yes, I think we definitely wanted to Reaccelerate and as you can see we're investing.
Speaker Change: Both in locations that you alluded to but also in capability for modules.
Speaker Change: I've mentioned, the DNS as a service I mentioned and no key I mentioned, the PCI DSS compliance as well as strengthening the platform.
Speaker Change: So obviously, we have programs in the company I think we've been accelerated.
Speaker Change: And we're investing more in that it's a strong growth opportunity. We wanted to go back to where we were in.
Yisca Erez: We want to go back first to where we were. And let's see how we end the year. But that's definitely where we are heading.
Speaker Change: Let's see how we ended the year.
Speaker Change: But thats definitely.
Speaker Change: Where we are heading.
Yisca Erez: So should we think about it as a 20 to 25 percent type of growth business over the longer term?
Roy Zisapel: So should we think about it as a 20 to 25% type of growth business longer term? That's how we think about it, and we need to get back to it.
Speaker Change: So should we think about it as a $20 to 25% type gross business longer term.
Yisca Erez: That's how we think about it, and we need to get back there.
Speaker Change: That's how we think about it and we need to get it back.
Alex Henderson: Okay, thanks.
Speaker Change: Okay. Thanks.
Speaker Change: Yeah.
Roy Zisapel: Here, we are now concluding our question and answer session.
Operator: Thank you. We are now concluding our question and answer session. I'd now like to hand the floor back over to Roy Zisapel for final remarks.
Speaker Change: We are now we are now concluded our question and answer session I would now like to hand back over to <unk> for final remarks.
Roy Zisapel: I'd now like to hand back over to Roy Zisapeau for final remarks. Thank you, everyone, and have a great day. Thank you for attending today's call.
Roy Zisapel: Thank you, everyone, and have a great day.
<unk>: Thank you, everyone and have a great day.
Operator: Thank you for attending today's call. You may now disconnect. Have a wonderful day.
Speaker Change: Thank you for attending today's call you may now disconnect have a wonderful day.
Operator: You may now disconnect. Have a wonderful day.
Operator: Please wait; the conference will begin shortly. Thank you.
Operator: Please wait; the conference will begin shortly.
Speaker Change: Please wait the conference will begin shortly.
Speaker Change: Okay.
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