Q3 2024 System1 Inc Earnings Call
to update any forward-looking statements as set as required by law.
Our discussion today will include non-GAAP financial measures, including adjusted EBITDA and adjusted gross profit.
These non-GAP measures should be considered in addition to and not as a substitute for or in isolation from our GAP results. Historical performance and future estimates provided during this call exclude results from total security.
Information regarding our non-GAAP financial measures, including a reconciliation of our non-GAAP financial measures to our most comparable historical GAAP financial measures, may be found on our investor relations website.
Speaker Change: I would now like to turn the conference call over to System Once Co-Founder and Chief Executive Officer, Michael Blend.
Michael Blend: Thanks, Kyle. Good afternoon, everyone, and thanks for joining us on our Q3 2024 System 1 Earnings Call.
Michael Blend: Despite a mixed quarter with respect to the overall advertising marketplace, we delivered a strong quarter with many positives, including exceeding the high end of guidance on EBITDA.
Michael Blend: System 1 delivered almost $89 million dollars of revenue and $38 million dollars of gross profit. Adjusted EBITDA came in at $10.3 million dollars.
Michael Blend: These results were driven by the continuation of the trends we discussed last quarter. Our owned and operated products continue to perform well, with revenue up 16% sequentially from the second quarter.
Michael Blend: As a reminder, our owned and operated products are our businesses which have organic users and they are not heavily reliant on System 1 spending marketing dollars for their growth.
Michael Blend: Our largest owned and operated products are Starpage, our private search engine, MapQuest, our mapping solution that competes with Google and Apple Maps, and Coupon Follow, our promo code website that enables consumers to get great deals while they shop.
Michael Blend: Now, in contrast to the growth in these products, our marketing-driven business lines continue to see the effects of significant choppiness with our largest advertising partner, which is Google.
Michael Blend: Now while Google's overall advertising business is doing fine, the specific area of Google we partner with, which is called their Search Partner Network, has underperformed the rest of the Google business.
Michael Blend: Because we are closely tied to the Search Partner Network, choppiness within this business line at Google has translated into underperformance on our marketing-driven businesses.
Michael Blend: That said, and I'll go into this later, we are optimistic that our businesses tied to Google will return to growth in 2025.
Michael Blend: On the technology side, we continue to see returns from our continued investment in our RAMP platform as we integrate AI deeply into RAMP. We were able to create and launch new marketing campaigns faster and more efficiently, and our product and engineering teams are moving faster than ever.
Michael Blend: And on our expense side, our focus on reducing OPEX continues, and we're having a positive impact with OPEX decreasing 5% sequentially.
Michael Blend: Alright, let's get into some of the business details, starting with our owned and operated businesses.
Michael Blend: In Q3 International revenue represented 35% of owned and operated revenue compared to 24% in Q3 of 2023.
Michael Blend: The <unk> RPM between RPI and CPI in Q3 was one three <unk> or 59% compared to one point for sensor 55% in Q2.
Michael Blend: Overall I am pleased that we're able to scale our international efforts quite a bit but unfortunately this was offset by a decline in our domestic marketing driven businesses.
Michael Blend: In Q3, we launched over 12000, new marketing campaigns and over 50% increase from Q1 of this year the.
The investments in ramp are paying off and enabling us to greatly increase our launch throughput with campaign launches increasing every quarter this year.
Michael Blend: As I mentioned, our <unk> products continue to perform really well and in Q3 generated approximately 29% of total <unk> revenue and 75% of our <unk> gross profit.
Michael Blend: Coupons follow has continued to have a strong year. Following a series of Google search algorithm updates that started in may and that benefited the promo code and couponing sites with the best technology.
Michael Blend: In Q3 coupon follow experienced a 47% sequential and a 108% year over year increase in organic sessions to its website.
Michael Blend: And the number of users of our promo code browser extension has more than doubled.
Michael Blend: Start page, our private search engine continues to execute well and grew user sessions, 22% year over year.
Michael Blend: In addition, we recently completed the rollout of our private browser app by launching the Android version, which joins our OS version, our iOS version, we rolled out in Q2.
Michael Blend: So far we are seeing significant downloads and engagement with more than 200000 downloads across Android and iOS.
Michael Blend: And our map crest, we saw 15% growth year over year end user sessions and recently have seen the highest usage of our map quest mapping service since we acquired the business in 2019.
Michael Blend: I should add a little perspective to this accomplishment when we acquired Mac press from Horizon in 2019. It was a 23 year old brand and serious decline.
Michael Blend: And on the Internet. It is highly unusual and very difficult to resuscitate, a brand and bring about to life or.
Michael Blend: Our <unk> team has not only injected new life back into map Quest, we're seeing record usage days and are rolling out new innovative products, such as our new private maps app.
Michael Blend: Overall, our organic products gives us a significant hedge against the recent volatility we have seen in our marketing driven O&M business.
Michael Blend: Because this business had been so choppy the last several quarters I thought it would be useful to get into more detail about as to the causes.
Michael Blend: At the highest level, our marketing driven businesses are driven by two factors the cost of buying traffic on our buy side and the amounts we received from monetizing that traffic with advertisers on our sell side.
Michael Blend: For the last four quarters, or so or by site costs at our traffic sources like meta Google and programmatic display networks have been relatively stable and in some cases, increasing as the overall marketing is the overall advertising market rebounds, our.
Michael Blend: Our integration of AI and our ramp platform has enabled us to scale our campaign launches on the buy side.
Michael Blend: And our bidding algorithms have become increasingly sophisticated.
Michael Blend: I am really pleased with all the work we've done to scale our buy side efforts.
Michael Blend: Now in contrast, the sell side has been the route of almost all of our marketing business related issues.
Michael Blend: To understand those issues, it's important to remember that much of our sell side revenues derived from Google and specifically the Google search partner network I referred to as S. P N.
Michael Blend: The SPN is comprised of non Google owned websites and search engines. This show, Google advertising and its distinct from Google Dot com or Youtube or other Google properties.
Michael Blend: Google specifically calls out the SPN segment and its earnings.
Michael Blend: And if you look at the Googles financial results, which I'm sure. Many of you do you will see that SPN has remained largely flat while the rest of the Google business has climbed.
Speaker Change: SP system, one is a very large participant in the SPN via our publishing network and much of our marketing revenues generated by purchasing advertising on AD networks, like meta and sending that traffic to advertisers via the SPN.
Speaker Change: Our core issue related to the SPN is that we have seen large fluctuations in a Google pays us for traffic we send to the SPN.
Speaker Change: Now there are several reasons for this but the most important one is that Google has been making significant efforts to improve conversions for advertisers who advertise on the SPN.
Speaker Change: These efforts include policy changes improved screening of traffic quality and significant product improvements there.
Speaker Change: The efforts are critical to maintaining the health of the ecosystem because of traffic that flows through SPN house to convert for advertisers who advertise on the network.
Speaker Change: While Google regularly make pricing adjustments and product changes to ensure high quality high traffic quality.
Speaker Change: Its efforts have ramped up considerably in the past year.
Speaker Change: Our system wide applause google's efforts and is one of Google's largest and highest quality partners. We have been at the forefront of working with Google to improve the quality of the SPN.
Unfortunately, as Google Rolls out product updates designed to improve the overall network quality. The immediate effect is volatility that impacts all partners, including system wide.
Speaker Change: Now as the cadence of the product updates has increased it has been challenging even for the higher quality partners like system, one to keep pace and adjust.
Speaker Change: Now Fortunately all of these efforts appear to be having the desired effect of increasing traffic quality, which in turn means that advertisers will benefit more which ultimately ultimately will increase advertising rates paid by advertisers in the long term.
Speaker Change: Now as the Google search partner network rebounds, we believe system, one is well positioned to benefit with.
Speaker Change: We've invested heavily in ramp, including leveraging AI and machine learning processes for real time traffic quality detection and.
Speaker Change: In addition, we have always worked closely with our network partners to make sure that we are preserving advertiser trust, while maintaining a quality user experience and.
Speaker Change: In short the more Google focuses on its efforts to maximize value to consumers and advertisers the more system one will benefit.
Speaker Change: Now moving on to our partner network business.
Speaker Change: Partner network revenues was $18 million and adjusted gross profit was $13 million revenue decreased 17% year over year, but was up 5% sequentially.
Speaker Change: Adjusted gross profit decreased 5% year over year and 3% sequentially.
Speaker Change: Total sessions were $2 3 billion up 159% year over year and up 13% sequentially.
Speaker Change: Partner network, Rps declined 68% year over year, and 7% quarter over quarter, the higher sessions and lower Rps were driven by the same trends that we saw in our <unk> marketing business.
Speaker Change: Lower domestic pricing in a bigger mix shift to international markets.
Speaker Change: In Q3 average revenue per partner increased 7% versus the second quarter.
Total active partners decreased slightly from Q2 to approximately 290 partners at the end of Q3, we had 58 scaled partners in line with second quarter, we consider platform customer to be a scaled partner when they are generating at least $50000 of revenue per quarter on Ram.
Speaker Change: Unlike our O&M marketing business, our partner network is dependent on the strength and steadiness of the Google search partner network, and therefore are subject to the same dynamics I outlined above <unk>.
Speaker Change: Similar to our <unk> marketing business as the SPN rebounds, and pricing increases we expect that growth in our partner network will follow.
Speaker Change: Overall, I'm really pleased with our performance in the third quarter.
Speaker Change: Our team has been executing well certain parts of our business are exceeding our expectations and.
Speaker Change: And we are well positioned for growth in the areas that remain challenge once ESPN studies.
Speaker Change: Our product and engineering teams are executing well.
Speaker Change: We're doing more with fewer people and we remained highly focused on controlling opex.
We arent, yet where we want to be but things are moving in the right direction.
Speaker Change: In light of the ongoing volatility in the marketplace that I highlighted earlier in my comments.
Speaker Change: We've decided to not provide guidance for Q4 at this time.
Speaker Change: If we see improvements in stability, we may revisit the possibility of offering guidance later in the quarter.
Speaker Change: As I close my section of the call as always I would like to remind you that management is the largest shareholder group in system, one and our interests are very aligned with yours.
Speaker Change: As our business gets back into growth mode. We're excited to have you along for the ride.
Speaker Change: I'd now how things out the treaty discuss our quarterly results in more detail.
Thanks, a lot treaty take it away.
Michael Blend: Thanks, Michael.
Speaker Change: Overall, we are very pleased with our third quarter financial results, where he came in at or above the high end of our guidance for all of our key financial metrics with the highlight being our $10 $3 million of adjusted EBITDA, representing year over year growth of 28% and quarter over quarter growth of 4% now onto our operating results.
Speaker Change: Q3 revenue was $88 8 million, representing a 1% year over year increase and a sequential decline of 6% rep.
Speaker Change: Revenue was $800000 above the high end of our Q3 revenue guidance range that we provided in August.
Speaker Change: Owned and operated advertising revenue was $70 8 million up 7% year over year, but down 9% sequentially. Our owned and operated results were primarily driven by our products businesses, which generated $20 7 million of revenue up 31% year over year and 16% sequentially.
Speaker Change: <unk> revenue was $18 million down 17% year over year, but up 5% sequentially.
Speaker Change: Adjusted gross profit was $37 $7 million up 1% year over year and down 3% sequentially.
Speaker Change: Adjusted gross profit was above the midpoint of guidance by 700000.
Revenue less advertising spend for our owned and operated advertising segment declined 4% sequentially to $26 4 million specifically for our owned and operated product businesses revenue less advertising spend was $20 million up 35% year over year and 16% sequentially.
Speaker Change: Network revenue less agency fees was $13 1 million down, 3% from Q2 and down 15% sequentially.
Speaker Change: Owned and operated cost recessionary revenue per session were both down sequentially to two <unk> and three <unk> respectively.
Speaker Change: On the network advertising business Rps was a penny per session most.
Speaker Change: Most importantly, total sessions processed by ramp in the most recent quarter was $4 4 billion up 142% year over year and 8% sequentially.
Speaker Change: In general this quarter made it apparent how the diversity of our business lines are a real asset to the overall business.
As the organic nature of our products businesses served as a strong bulwark against the choppiness of the paid advertising markets.
Speaker Change: While we have seen significant volatility out our marketing driven businesses, resulting from sell side product and policy updates our core product utilities, such as mapping private search and coupons of promo codes provide us the opportunity to sidestep. This volatility continue to attract users that we can then monetize which also allows our ramp platform to <unk>.
Speaker Change: To generate gross profit and adjusted EBITDA for the company.
Speaker Change: On to operating expenses and EBITDA.
Speaker Change: In Q3 operating expenses net of add backs were $27 3 million down $1 5 million quarter over quarter and down $1 $8 million year over year as I stated continuously throughout this year, we've been working hard to reduce our operating expense structure over the last year and we expect to continue to drive sequential cost savings on a quarterly basis for the <unk>.
Speaker Change: Seeable future adjusted.
Speaker Change: Adjusted EBITDA was $10 3 million in Q3 versus $8 1 million in the same quarter last year.
Speaker Change: Adjusted EBITDA came in above the high end of our Q3 guidance range by 300000.
Speaker Change: We are extremely proud of our ability to generate sequential growth in adjusted EBITDA. Despite a slight sequential decline in adjusted gross profit.
Speaker Change: With respect to liquidity, we ended the quarter was $69 1 million of unrestricted cash on our balance sheet.
Speaker Change: And an outstanding balance of $285 million of term loan debt under our credit agreement or.
Speaker Change: Our net leverage at quarter end was approximately seven times.
Speaker Change: Per Michael's earlier comments, given the current volatility in the marketplace, we have decided not to provide financial guidance for the quarter at this time.
The uncertainty in market conditions makes it challenging to offer an accurate outlook, especially during the seasonally strong Q4 <unk>.
However, should we observe a stabilization in the overall market environment and pricing dynamics, we may consider issuing guidance at a later time during the quarter.
Speaker Change: While we remain focused on navigating these conditions in the short term and remain confident in our ability to seize on our long term opportunities. We are committed to achieving financial outcomes that demonstrate our operational success.
Speaker Change: Thank you for joining us today.
Speaker Change: Thank you Judy we're now going to open the line for some questions on the line as Tom Forte from Maxim Group. Tom Go ahead with your question.
Tom Forte: Great. Thanks, So Michael you did an amazing job explaining a lot of the things that are going on so let's start with map quest. What have you done that's enabled you to essentially resurrect brand and what gives you confidence that you can continue to grow it on a go forward basis.
Michael Blend: Yeah, Thanks, Tom and thanks.
Michael Blend: Thanks for joining.
So on Markwest, when we took it over God must have been a more than four or five years ago from horizon.
Michael Blend: It was really a brand declined Verizon was in investing in it wasn't adding features to it wasn't making the mapping better.
Speaker Change: All the color.
Speaker Change: Nuts, and bolts blocking and tackling you need to keep in consumer brand going when.
Speaker Change: When we took it over we essentially took over the technology to take US a couple of years to move it onto our technology stack and then really basically just started adding features to it that we thought our customers would like.
Speaker Change: We added a lot more weather call points of interest so a lot more descriptions about about places people are trying to travel to.
Speaker Change: And we switched technology providers over to here.
Speaker Change: We've got a lot of other data sources that we've been adding to it.
Speaker Change: Proving the mobile apps that people use truly all the things that will bring customers on board and a lot of that has resulted in more direct users coming but also more people finding us through search engines as well and people are going and typing and addresses and Mac quest is showing up because it's such a such a well known brand in such a good experience.
Speaker Change: Going forward time, we well, we just we just launched.
Speaker Change: Our new private mapping App. So you can now.
Speaker Change: Unlike using things like Google maps, and Apple maps that gather a lot of your data you can now.
Speaker Change: Driving the places you want and privacy and no more no where you're going but things like that where we're going to start rolling out subscription postulated a map quest.
Speaker Change: And it's all paying off this.
Speaker Change: This quarter, we've had a few weeks ago, our highest traffic day ever since we acquired the brand from Verizon So I.
Speaker Change: I guess just to summarize we're just doing what we always do when we buy companies, which has made the products better.
Speaker Change: And then my next question is on the industry itself.
Speaker Change: Did a wonderful job, explaining what's going on with kind of a specific Google product.
Speaker Change: Does it help you essentially that the digital advertising market there should be a lot less emphasis now that the elections behind us.
Speaker Change: And that sort of thing so I know that you are withholding guidance.
Speaker Change: Due to a lack of visibility in the AD market, but is it beneficial to you that advertisers are essentially focus more on <unk>.
Speaker Change: <unk> and services and less on candidates.
Speaker Change: Yes, so specifically where the election being over should help us on the buy side several of them are buying ads on places like Facebook, we're competing with every advertiser out there and the more election focus advertising spend that comes onboard. It's just more advertising competition without pulls back it all kind of look like a more normal market.
Speaker Change: <unk>.
Speaker Change: And so we would expect to pay.
Speaker Change: Pay a little bit lower pricing, we havent seen it having the data in the last day or so so I can't tell you for sure, but I would suspect that we'll see pricing kind of normalize a little bit from the burst over the last.
Speaker Change: Four to six weeks.
Speaker Change: The specific reason why we're withholding guidance did not not really volatility in the overall advertising market, but specifically the next six to seven weeks are really were.
Speaker Change: You would expect to see a couple of things happen.
Speaker Change: The buy side will go up so our costs on buying traffic should go up because people, there's a burst of advertising activity.
Related to the holiday season.
Speaker Change: And then on the sell side. So we're pretty confident we'll see some some increased costs on the buy side typically what would happen is we'll offset that with increased better pricing on the sell side when we're selling to Google because of Google search partner network has been pretty volatile as I outlined in my remarks, we're not.
Speaker Change: We don't have 100% confidence that we'll see that increase.
Speaker Change: Then we would expect so far everything looks okay, but because the next six weeks or so important and we thought it would be more prudent to kind of not promise any numbers until we had pretty good idea what they were going to be.
Speaker Change: Alright. So then last one for me and I'm going to hand, it off to Dan So rare.
Speaker Change: <unk> is our amazing technology, you're early in leveraging artificial intelligence I was curious as many adjustments to ramp.
Speaker Change: Make it more effective today than maybe it was last quarter or last year.
Speaker Change: So the pace of our product improvements, we're making to ramp is pretty remarkable.
Speaker Change: I know that a lot of company has been talking about AI. It's really that's been the buzzword for the past year year and a half.
Speaker Change: As I mentioned that earlier some of the early use cases for AI.
Speaker Change: <unk> been really really effective and been in the advertising space. So we talk a lot about being able to create better content using AI, which we have been able to do.
We are using.
We're using it to create our content within it with editors looking over the results and making sure that what we're publishing its truthful and authentic.
Speaker Change: But then on the advertising creative side the ability to produce.
Speaker Change: Entertaining engaging ads that people will click on.
Speaker Change: Gone up dramatically.
Speaker Change: Bye.
Speaker Change: Least in order of magnitude on our side in terms of ease of producing those and it's going to.
Speaker Change: There've been a couple of orders of magnitude.
Speaker Change: So yes to answer your question since last quarter, Yeah, we've been making continual improvements in the in the platform and.
Speaker Change: However, I expect every quarter over the next year or two we're going to see dramatic improvements. So so.
Speaker Change: Our platform is much better.
Speaker Change: Much more automated much more scalable, we're not yet seeing in our numbers, primarily because of the reasons I outlined in the earlier remarks.
Speaker Change: Great. Thanks, Michel Thanks, Judy and good luck in the fourth quarter.
Speaker Change: Thank you thanks, John Thanks for joining.
Speaker Change: The next question is from Dan hurdles from a bench benchmark company. Dan go ahead with your question.
Dan Hurdles: Hope you guys can hear me.
Dan Hurdles: Hey, guys doing.
Dan Hurdles: Obviously crazy.
Dan Hurdles: So I'm going to try Michael to ask my best here.
Speaker Change: Hopefully not go over something you've already said, but.
Speaker Change: Couple of things I wanted to actually follow up on one of Tom's questions.
Speaker Change: Given the change in administration, a im curious if you have an opinion on.
Speaker Change: I know there havent been remedies, yet in the AD Tech trial, but I'm curious what you think that might mean for kind of Google on the ecosystem.
Speaker Change: And then secondarily.
Speaker Change: There's a view that there might be I don't know, let's call. It a reinvigorated lower end of the consumer given.
Speaker Change: The recent change in administration as well and so what that might mean, either for AD spend and <unk> four.
Speaker Change: Kind of couponing as we head into the holiday period.
Speaker Change: So okay, a few questions in there that thanks for joining appreciate it always good to talk with you.
Speaker Change: So I can't really speak to what would happen and what's going to happen on consumer spending it's kind of hard to tell.
Speaker Change: I don't really know I don't think anybody knows what will happen with the potential change in administration.
Speaker Change: I've seen a lot of speculation what could happen to interest rates going up or down.
Speaker Change:
Speaker Change: But I don't want to speculate anything there specifically as it related to kind of a lot of the ongoing antitrust trials.
Speaker Change: That the change in administration could have a pretty big effect on that I'm not I'm not an expert in this area but.
Speaker Change: My understanding is that.
Speaker Change: A lot of that the groups, which are broadly antitrust trials against Google and some of the other large technology.
Speaker Change: Companies.
Speaker Change: Potentially you're going to see a less less focus on antitrust.
Speaker Change: There's been some speculation on that as well as far as it relates to Google specifically again, I don't really know what's going on behind the scenes I don't think anybody does.
Speaker Change: I guess my understanding was that the new administration has been a little bit antagonistic to Google.
Speaker Change: So you might expect that Google won't get a lot of relief there, but on the flip side for.
Speaker Change: All I know.
Speaker Change: B plants, even job cases against Google, So I think until that becomes a little bit more clear its a little tough to speculate I would say that with the change of administration. It does seem pretty it doesn't seem like a bad thing for Google on the antitrust front I want the trial side. The one area that you and I have talked about which I am one.
Speaker Change: Clearly curious to see what happens is.
Speaker Change: I believe the tick tock.
Speaker Change: The takeout band is coming up here in like two or three months.
Speaker Change: And.
Speaker Change: My understanding of that at least within the New administration, there's some conflicting views on whether that should take effect.
Speaker Change: Call correctly that that was a law. This past so I don't actually know.
Speaker Change: The law it can be ignored, but I'll be wildly curious to see what happens related to take off because that would have a pretty dramatic effect on the knot.
Speaker Change: Not really on our business, we don't do a ton of business with Tic Toc domestically.
Speaker Change: On the overall advertising marketplace tictoc, either stays and what goes out youre going to see some pretty dramatic changes.
Speaker Change: Yes.
Speaker Change: And I know it seems kind of higher level, but I just bring it up because you guys tend to thrive and sort of disrupted marketplaces and so to the extent like if we get into December and all of a sudden there's just the vacuum because we're post political and nobody has any idea how much to spend or what to spend it on or if we end up having.
Speaker Change: Changes to the ecosystem.
Speaker Change: How ready you guys to capitalize on that kind of stuff do you anticipate disruption and frankly, Michael I mean, you gave me a good segue into the question I always ask you every call which is it's true you don't do take talk domestically, but you do do it very well internationally and we continue to hear kind of a recovery abroad and so just curious.
Speaker Change: What youre seeing there and how that's impacting the business.
Speaker Change: Yes, so to your first question absolutely when there's disruption in market size, where we thrive and so we would welcome disruption we welcome.
Speaker Change: Advertiser pull that advertising spend pullback from.
Speaker Change: The rest of the advertisers will for sure step in and take advantage of that if it happens.
Speaker Change: On the tick Tock side now we're seeing continued strength internationally.
Speaker Change: Working with them been impressed with the team that we work with there.
Speaker Change: We're big enough advertisers at this point, where we have.
Speaker Change: Large large team from the Ticktock ticktock working with us and we will do all day meetings with them.
Speaker Change: They've been quite responsive on the product side.
Speaker Change: In some cases, we need.
Dan Hurdles: Bespoke technology built for us and they've been great at doing that so we're seeing continued strength there and I don't expect that to change internationally via Tictoc, Yes, and Dan. This is try to get nice talk yet international remains a bright spot for us as well.
Speaker Change: Michael.
Speaker Change: Michael mentioned in his remarks.
Speaker Change: 35% of non owned and operated revenue in Q3 versus 23 or 24% last year. So again to your point an area of real growth for us.
Speaker Change: I'll be at kind of lower Rps's, just given rates internationally versus domestic.
I think Dan you mentioned.
Speaker Change: <unk> and couponing, yes, we would expect that.
Speaker Change: As do we see every year holiday season going to be a strong win for coupon fallout.
Speaker Change: We for sure.
Speaker Change: See a burst of activity that pretty closely mirror shopping trends.
Speaker Change: Domestically where we're.
Speaker Change: <unk> and coupon all of its domestic.
Speaker Change: Yes, we're hearing about a pull forward and the shift to E. Com. This year. So I think that would probably benefit you guys. I guess, we'll see how that plays out.
Speaker Change: I guess I'll, probably leave it there I would love to ask you guys about new product launches and what theyre going to contribute to the P&L, but since we don't have Q4 guide I don't think I'll get much of an answer at this point so.
Speaker Change: I appreciate it thanks for all the color guys and good luck and good job on Q3.
Speaker Change: Thanks, Jay and thanks for joining appreciate it always good to talk with you.
Speaker Change: We know we are now going to turn it back to Michael blend for closing remarks.
Michael Blend: Okay. Thanks, Karl Thanks, everybody for joining.
Michael Blend: Happy that we had a quarter in which we could fulfill our guidance for <unk>.
Michael Blend: All of the investors out there thanks for following us and we look forward to speaking with you next quarter. Thanks again.
Michael Blend: Right.
Michael Blend: [music].
Michael Blend: Okay.
Michael Blend: [music].
Yeah.
Michael Blend: Okay.
Michael Blend: [music].