I got the honor of, opening up the presentation for the quarterly presentation for Q1. I'm going to do a small introduction on myself, I'm the new director investor relation in Nordic Semiconductor. I'm new in this position, but I've been working in Nordic for 18 years. Been responsible for sales in Asia Pacific. The last 15 years since 2004, I've been stationed in Hong Kong and been working from there.
My job has been to build up the sales channel. I had to find new distributors or find distributors, sign them up, figure out which market segments we should sell in which country, I needed to find out where should we set up new offices in Asia, which country should we have them in? And today, we have more than 23 distributors. Every day, there are several 100 people out selling Nordic in Asia Pacific. And we have 7 offices in Asia, where we have 42 people We had to figure out should we have only salespeople?
Do we need engineers to do support to customers? What type of support do they need? That's another thing. Do they actually need support in China? Do they need to support in Japan?
That's what we have been figuring out, setting in the right person in the right spot. So today, with these 42 people in Asia 7 offices, we are handling I will say handling 80% of the revenue in Nordic. Is not because all the design is done in Asia. It's also, of course, design done in U. S.
In Europe, but production comes to Asia in Greater China. Greater China is being China and Taiwan. And now I'm facing in on IR. I'm going to work very closely with Larsen, the CEO, Paul and Kiena, really looking forward to that. I will work closely and have good contact with the existing investors.
New investors, we are going to focus on that also. And of course, the analysts. So I will I will not do any more presentation. I will be here on the Q I will introduce Sven Thore Larsen as CEO. Please take the stage.
Thank you, Stola. So, as usually I do the business update and Paul do the finances and I come back when we see forward on how things looks for Nordic in the near and a little bit longer future. Q1 highlight, we are continuing to build a very strong position in imputed low energy. Come back to that, we now go through the analysts of the numbers. But our design certification grew by 33% It was actually 102 new designs in Q1 2018.
Now it was 100 and 36 last quarter. We continue to be close to the 40% market share of total reported design wins We are going to keep that position going forward. That's why we are spending a lot of money in developing continue developing Bluetooth beside the LTE products. We had a record high backlog It was driven by Tier 1 customers. It's not our traditional backlog with medium sized small customers in Asia.
This is added on with Tier 1 customers that are contributing to this backlog. Finally, we see some result of all the work we've been doing on Tier 1 customers. And we are continuing focusing on gross margins and keep them above 50%. This quarter, it was actually 51. We are getting certification in all target markets for our cellular LTE.
CE approval is received FCC approval is also received. And we still see that the Semiconductor Industry are impacted by channel inventory adjustment, but also if you look around us in the industry, There are some voices that said that it seems to be maybe correcting a bit and Let's hope that's correct. And we're going to see impact of that in the second half. Our total revenue was very much in line with guidance. We ended up at $52,600,000 As I said earlier, gross margin of 51 percent is always a decrease of 12.6% The important thing is that Bluetooth didn't decrease that decline that much.
It was 2.7% year on year. And revenue is impacted by channel rebalancing. Importantly for us is that we maintain our market share. And Lot of you, we have already discovered that proprietary was quite a bit down, but also if you recall from Q4, in 2018, it was surprisingly up. So I think this is facing the adjustment between quarters.
And we shipped sample of cellular IoT, above $100 $29,000,000 actually, and that is samples to customers. Our backlog at US89 million dollars is 10% up year on year. It's a record backlog. Comparing the margins to last year is up 2.1 points. And if you recall what we've been saying before, we expect that the 52 Series will raise the margin and this is what we see result of today.
Our EBITDA at minus 0.7 It's not what we are striving at, but we have the conditions around us as it is. And it's really linked only to lack of revenue. When revenue will be back where we guide for Q2, things will look totally different. We go very quickly through market, consumer electronics, down 10.6% year on year. Variables traditional Chinese low cost variables, down 25.1.
Building Retail. If you recall, we had a huge design in Building Retail segment this time last year. And this is reflected in the number. Healthcare down 9.2. Others is up 15.6% year on year.
Huge contribution to 3rd party modules over 3rd party module makers and now starting to get the sign wins around the world on their modules. Which are contributing to growth in other segment. So now I hand over to Paul and we go through the numbers.
Thank you, Santore. I will start going through the operating model performance for Q1 2019. Just a reminder, this is the reported numbers, so we have not adjusted for capitalized, development expenses. And also the implementation of IFRS 16 that has a positive effect of $1,000,000 in Q1. Which will be an ongoing rate for every quarter going forward.
More details on IFRS 16 in the financial report for Q1. With exception of gross margin, due to the 12.6 percentage point reduction in revenue, all our KPIs have a negative trend year over year. You all know that we are investing to capture future growth opportunities, and our cost base is more or less fixed. So in a quarter where revenue goes down not just in Q1, it will have an impact on our KPIs. However, looking at the underlying numbers, you will see that the rates increase in OpEx is less than what you've seen previously.
So we've been able to keep down the spending in the tough quarter for the company. As Antonio mentioned, gross margins at 51% 2.1 percentage points increase. Last year, we sort of fixed most of the yield issues on the 52 So this improvement comes mainly as a result of costs improvements and the customer product mix that we discussed last quarter. Overall, we spent 34.1% on on R and D this quarter compared to 26.3 percent a year ago. Included in the numbers is 2,500,000 of capitalization down point down from 3.3 percent a year ago.
Also, cellular IoT is reducing the amount of capitalization. So we've only capitalized, 1,800,000,000 related to that business. The reason it's going down is that we're now moving from finalizing the hardware to working more on software and certifications, which is not a capitalizable amount. Total short range investment, that's $1,700,000, up from $11,100,000 last year. We are continuing to invest in short range especially to capture a lot of the Tier 1 designs that Santore just mentioned.
So we'll see effect of that here. R and D, cellular IoT, 5.2, up from 4.7, last quarter. A lot of the spending is now related software and certifications and less tape out related expenses. SG and A, 9.6, up from 9.2 a year ago, which is an increase of 4.3%. Most of the IFRS 2016 sorry adjustment of $1,000,000 is included in SG And A as it relates to the buildings and the other fixed assets.
So adjusted for IFRS 16, SG and A is up 15%. EBITDA, as Thore mentioned, impacted by lower revenues, so minus 1.4%. However, if we adjust for the cellular IoT business, the EBITDA margin is 8.5%
in the quarter.
Gross margins, we've during Q1s in continuous run gross margin expansion compared to last year. Expansion of 2.1 percentage points. And Nordic has communicated that we have a long term target for the short range business of a gross margin of 50%. When we start seeing more material revenue on cellular IoT, that the impact of the module production will of course go into the average corporate gross margin. So please remember that.
During the last three quarters, we've been able to maintain this gross margin above 50% This comes, as I mentioned, as a result of improved yield on established products, actually a few new products being introduced right now and cost savings on on our raw material purchases. Compared to last quarter, we're at the same level as, as in Q4. And we're happy with that because the lower revenue will normally result in less gross margin because then adjustments to inventory, etcetera will have a higher negative impact, but we've been able to keep up gross margins. The reason for this is more continued efforts, on cost savings, but also a change in product mix. In this quarter.
Remember also that in Q4, we had positive impacts of volume bonuses. Quarter to quarter fluctuations will be expected going forward, but we are still doing a lot of hard work on improvements to our margin. Cash operating expenses, this time we've adjusted for capitalization and share based compensation, We are able to keep the cost discipline during the quarter. This is obvious because we've reduced cash operating expenses by 6.3 percent quarter over quarter. If we adjust for, IFRS 16 effect, the reduction is 3.2 percentage points.
We have slightly more employees, in Q1 compared to last quarter. However, we do have a positive effect of FX and in general, Q1 has less activity than in Q4. Compared to last year, OpEx is up 6.5%, or adjusted for IFRS 16, 8.6 percent. This increase is driven by new product releases and the headcount growth of, 13.5 percent to just below 7 hundred employees at the end of the quarter. We are continuing to invest to capture future growth, we mentioned before.
Finally, despite negative results, we are maintaining a strong financial position. We had a cash outflow of $6,000,000 in the quarter, operationally, it's actually positive by 1,600,000. Normally in Q1, you will see a positive operational cash flow because accounts receivable do go down in Q1 versus Q4, which also is The effect is this quarter where AR balances was reduced by $3,400,000. In addition, we are focusing a lot on reducing our net working capital. Main focus is of course on accounts receivable and on inventory.
We are having a very tight, inventory management, which is actually a good achievements because we are building inventory. The
owner in Telingham is what I call smart add ons But the important thing here is you see a combination of short and long range. The only company, semiconductor company globally that has solution for short and long range is Nordic. And here we have the first proof that some customer are going to use that combination. This is a device you can hook on to anything here. It shows a shoe, but if you're out in the woods or worse if you're up in the mountains, and you unfortunately fell, this LTE ship will could send your position to anyone you trusted That's good.
If we go down to the left, helmet sensor here. It's basically specialized, which is a leading company in biking accessories. They make a smart helmet Again, if you are out there and someone, for example, hit you and you get thrown out In the ditch, again, you can call up someone that you trust. Automatically, as soon as you get, any behavior, that's not normal, it will call and send messages. Nice design.
We also see our this is public. We can see some of the Tier 1 customer in China, Xiaomi has used the 52 for the door lock. And then we come to where we have our main investments regarding the last couple of years, long range And in Finland, there is a company called AnnieCare that made a small sensor which they can use on livestock. There's quite a few of rain there in Finland, but there's even more ships in New Zealand. These are products that can have a huge market In the middle, you see what we call smart alarm.
It's a company called Minut, Basically, if there is any disturbance unexpected in your home, it will call up your neighbor or maybe somebody else that you have close by that can just run by your house if you send a message to your phone. These are application that we are I think a cool and they have some volume behind them. But the most cool thing, as I said here, is that you have a product that using both technologies and that we can show 2 announced the signs with LTE Products. We have had a leading and broad position in Bluetooth for quite some time. Is always difficult to maintain such a position.
We've been able to do so despite that there is quite a bit of small Asian companies that eats into the lower end of the market. But it proves that the strategy of having advanced parts, offering things like security it's important. Nordic does have these features in our products. We grew 33% in the sauna registration from the same quarter last year. You haven't seen this slide.
We haven't discussed lighting before. But this is a new segment that Bluetooth has been focusing on for a long time. You heard me talking about Nordic Proprietary Mesh. Nordic was first out offering mesh solution to Bluetooth customers. Why did we do it?
Because we got early engagement into the lighting segment. If you go to this page bluetooth.org and look, you will find a page there sub page where they discuss lighting Look at those customers and try to get some background on these customers and you will be relatively happy, Vincent. Here basically, you just hooked them up pairing and with Nordic Easy Pair because we have NFC. So EasyPay, no wires, save installation costs on top of energy. So Bluetooth org expected to be around 10,000,000,000 to 15,000,000,000 products per year and expect that there'll be 2 to 5 percent of these light sources will be connected, connected, being connected with Bluetooth Mesh in 2020.
So that's an opportunity, which is important for Nordic, and we need to add these new segments to continue to grow to meet our goals. We've been investing this early Unfortunately, things take some time, but now we see that it starts. So go to Bluetooth org and have a look at lighting section. So our strategy when we do this is to find which segments do we believe will grow in years to come. And what we've been seeing is that if you do integrate early, you obviously need a good connectivity you need to have today security because a lot of the application you put Bluetooth in is transferring value information whether it's information about your health or money transactions is information you want to keep secure.
Security is important. And it has to have embedded processing because you do get a lot of information that you calculate and sent on to the cloud. And by doing this, Nordic has been making a platform where we can incorporate different protocol. Remember over 52840, support Bluetooth, thread, seed bead and and proprietary. Basically, we here have 5 different protocols supported in one platform.
If we should have built 5 different products, it will be 5 different R&D runs. And obviously, we see that such a platform is not ideal for all applications. But this give us the maximum footprint in the beginning when we release a product. What we do later is that we do see some customer want even more memory, want even more security, want even more MCU capacity. Obviously, if This segment is large enough, customer is large enough, we do that.
Or we see that the customer don't need all the features and then we basically make a solution that is more optimized for that scenario. It means basically we have scalability across these areas. We make the platform first and then scale according to the market. It's a strategy that we can prove has If you look at our design win ratio, lot of this is on the 52 family. So why shouldn't we do the same on the LTE Obviously, there was no good argument for not doing the same.
So we did exactly the same. Connectivity is important. Reliable connectivity is maybe the most important thing. It should work in all conditions. Security, again, you're going to send the same kind of sensitive data over LTE.
You need to process a lot of data so you have to embed the processing. What does this tell you over here is basically lot of common on these platforms. And that's why it's so good for Nordic at the position now where we have 2 different products we're making, we can still share very much of the same platform. We don't need we can share the cost on 2 platforms. So we did worldwide seller bank coverage.
The first product, we have substantial amount of own memory to gain low power operation. And enable mass scale adoption by integrating and certifying functionality needed for most applications. We don't want to lose out online application. So we are focused obviously on system cost. I mean, but remember, we are making the IC only The rest is outsourced to our partner Corvo, which are doing the module.
So, important thing for us going forward is basically how are we going to meet the total market because high end low end. And we have shown this production status previously, we had the launch in December. We said we were public sampling hardware and LTE M software. Important here is that the hardware is basically the same, but it's a software that configure the product. And the 9160 is what we call the full blown LTE ship.
It has LTM Narubana IoT and GPS. Basically, we see some of our early Customers have used competitors where they have LTE. I have to have one product with LTM for certain region. And we'll have to make another product with LTE narrowband IoT for a second area. Because U.
S. Is basically doing LTM and Asia is basically narrowband IoT. And then if I also want to have and grab the position, they need to have an external GPS component. We put all into one product. And this third one product will basically be in production in June.
We've been sampling since December, but now it's going to be in full production in June. The 9160, which we call CEBA is the LTM only, And basically now in May, we do have production of hardware and sampling product and we'll be basically in full production going forward. The SEA, it's a narrowband IoT, is publicly stamping, and I will be in production in June. So basically, we are shipping variants, samples to all customers But June, we basically can do production shipment. It's maybe 28 days behind our original schedule, but it's on schedule if you think that we've been doing this for 4 years.
So do we have any interest from customers on We had obviously some few customers calls because our support calls because we had pre sampled quite a bit of customers. But in Q1, 12% of the engagement from our support team means assisting on design wins, we'll spend on LTE customers, 12%. If you go back to 20 10, 11, I may went out with the DLE products for the first time. It would have been unheard of 12% after a quarter of release. We have much less customer calls and support.
So this is far ahead of ANE introduction decision. And we also spend a lot of efforts to train local support in the different markets, today, we have an organization that can support customer globally on LTE Projects. And obviously, we need to have that because seller IoT is Nordic's next growth driver. And I showed this slide last quarter, but still is an important slide. This market is growing.
Analyst around the globe Believe so, we see so. So keep in mind, this is our next growth driver. So the guidance for Q2, we expect the revenue to be in the range from $69,000,000 to $74,000,000. There is continued uncertainty related to trade tensions. And it results in reduced growth rates, a quarter ahead of us or we're in.
But the important here is that we had a solid backlog. And the backlog is basically very heavily impacted by Tier 1 new customers. We are continue to optimize production and expect to keep the 50 And as Paul said, we've been delaying some of the new equipment to build up our labs, but that will come in next quarter. So we expect the CapEx of around 5 to USD 6,000,000 in Q2. But the cool thing now is that our FA failure analyst lab at Vinschomian It's very soon running.
The test equipment we have made bought in Oulu is working and functional And we are in a much better stage now to support our customers and go to certifications because of all the equipment we bought. So that ends the presentation. Any questions, yeah, we have one stall and Paul. Could you please come up?
Thank you. So Kristofer here from DNB Markets. Just starting on the gross margin target, you stated obviously the gross margin target for for the short range business, but it would be great if you could also just remind us of your gross margin target for the cellular IoT business as well is supposed to be a bit lower, but how much lower are you expecting that to be?
We expect it to be lower. That's correct because it's a module where we have 3rd party components onto the module. So obviously there is a stacked margin challenge. So the important thing for us is that the mixed margin will be targeted around 50 and it will be below 50 on the LTE target.
There will still be about 40%?
Absolutely. It depends, from application to application from customer to customer.
Yes. Great. And then continuing on LCE, there are obviously a lot of different price points out there in the market and in some simple applications in the LTE space, so for example, in China now, you could get chips for or modules for $3. So if you could just extrapolate for, sorry, elaborate on the pricing on your NBLT only offering and the LTM on the offering?
Consider a car. If you're going to make Volvo run as fast as a Porsche, you need to do modification. And this is exactly the same. With modules. It's the bill of material, the total cost of the PCB that counts for our customers.
So if you want to make a huge PCB, lot of efforts you can go for a low cost module and make all the surrounding support electronics yourself or actually spend hours in the garage with the Volvo, or you can go straight into the Porsche and drive fast. So we make the development time shorter and we make the product more reliable. It adds value And obviously with value, it comes some cost others because we have to use this cost to get able to bring this value to customer.
Hi. I can appreciate that strategy, but to be more directly, you just elaborate on how much lower ASP will be on these LTM and MBRT only products if the top one is $15, how much lower is?
We are not doing First of all, we'll be able to do price negotiation and price information unless we have a project. So, important thing is this is up to the customer's volume up to the customer application and what could the customer actually carry off costs to be successful. So this is evaluation we do with customers, but obviously it will be a lower cost on the simplest modules.
Okay. Only two more for me. Thank you. So on you guide on Q2, but for the remainder quarters of the year, is there anything that's suggesting we should not expect just regular seasonality sequentially going forward?
No. I think that's the correct estimation.
Great. And finally, on LTM, you previously stated that in your current sampling program with lead customers, you have multiple customers that if they choose your product, they will single handedly take the business to breakeven. Can you give an update on those customers? Are they still in the mix? Have some of them decided to use our product, anything there to give some confidence to shareholders?
We like to give as much confidence share it as much as possible. And yes, beside those, we sampled before Q1. We did sample a total value of $129,000,000 $129,000,000 in Q1 and these are mix of new and existing customers. And yes, some of our customers were even on the chart here today that basically just were a sample customer, last quarter.
I'm the operator, this is Kepler Cheuvreux. Just a quick follow-up for me. Sorry. So And we are seeing Huawei in China among the leaders, on the NB IoT. I think they say that they're targeting 100,000,000 modules shipped in 2019 versus 15 this year.
And obviously at a volvo price tag versus the Porsche, but do you expect there to be a significantly large markets for high end, are you expecting to sort of do a long tail, high end segment effort?
I understand your question, but I'm going to answer a little difference. I think the important thing here is that we are optimizing the development cost and the bill of material by offering a complete module So if you go to those customers that basically think they get a lower cost product with a lower cost module is overdrawn to educate them of time to market, ease of design and total bill of material. When you do this exercise and remember, most of our customers are really intelligent smart people. That can view these calculations. And we are bringing a value with not adding cost to the solution.
When it comes to you mentioned Huawei, Huawei is an operator. The customers that is over target customer is Fireway's customer that have a product that cook up to their base stations. And that's where you're going to see the volume. It's not really with operators. Even though the operators today are sort of announcing different modules on the web page.
That's not where the high volume will come. It will come from customers that come to use the different operators network.
Final question for me. How worried are you? About the 2nd, 3rd generation competitors from Sequans, Qualcomm,
I'm always worried about competition, and that's what makes Nordic good. We should always expect a better product from competitor next quarter. That's why we also are doing even better in our next generation. And there will be a race. Maybe someone have seen the value of what we are doing and might come up with a product, but we are not sitting still.
We are developing the next generation of products.
Thanks.
Hi, Doctor. Johnson Arctic. On Coppet, there's dialogue recently announced more advanced due to Smart Chip with a stronger processor than your Bluetooth SmartShip, M33, as you are using in your seller and the RAS 91. Just do you see a change from dialogue here, or do you expect this to have an impact?
I think, dialogue, like all other competitors in this market have understood what we've been talking here about having advanced feature because that's what the market require. More computational power, more security, more support. And the same applies to We also make new BLE parks. So it will always be a window where we might not have the all the technical specification on the top end, but the total solution from Nordic is still undoubtable the ultimate solution.
Yeah, but the outlook's new chip has even stronger processor than your Yes.
It all comes to the total solution with software support with other features that we do have. And yes, for a moment, it might be, but it's not on the market. And when it comes to the market, Maybe we can show something that is even a leap ahead of what they have And that's the race you see in all semiconductor companies in the different segments.
Thank you. And on your Q2 guiding. Can you give any more color on this split? What do you expect on the split between proprietary or Bluetooth Smart going into next quarter?
We saw a relatively large drop in proprietary in Q1. And that was related to a high shipment in Q4. I think this come to equal out and we're going to see normalized relationship between BLE and Proprietary.
Thanks, Irene from SEB. Just a quick question on the CapEx and that you move that. Are you further away then on cellular, than you were at the q 4 presentation, you know, since the reason was that, you want to invest in lab equipment, etcetera?
No, the lab equipment we're investing on is more long term. Santoli mentioned that the reliability lab is up and running and the test facilities in Finland or up already. So this CapEx is more long term won't have impacts on this this period.
Okay. Great. Thank you. And just another quick one. We touched a bit upon it, and I understand that you probably want some more mileage out of the 52 chip.
But, how far, are you guys away from, you know, a new type of flagship chip is that something that we could, expect within the near or medium term?
We have not announced that we are going to do more flagship IC out of the 52 family. If we're going to keep your voting flagship will be a different family.
Because we haven't come out with any timelines for that.
Thanks.
Yes, Axel from ABG. So, firstly, I just want to follow-up on Henriette question regarding the Q2 guidance. So Centuri said that you expect proprietary to normalize in Q2. And that means that Bluetooth then, should be fairly flattish than year over year basis in Q2 as well. And, that again implies that you don't expect to see any meaningful improvement in Bluetooth in q2 versus Q1 now on a year over year basis.
And given that you have easier comparables with the side winning the design wins in ride sharing in Q3, that seems a little bit conservative.
Have stated in the last sentence in the presentation that we still believe there could be impact from the trade tensions. And we are not taking any bets either or what direction it takes. So we have to use existing, I would say, situation. And just from that think can change, but that's not what we should put in our guidance.
Yes.
But given that you have lower revenue contribution from the ride sharing designs in Q3, shouldn't we expect see a little bit improvement in the Bluetooth growth in Q2?
It very much depends. As I said here, First, this backlog is reflecting new Tier 1 customers' orders to Nordic And if it does that, it also reflects that the old sort of the previous customers are not still placing orders according to what I did last year.
Okay. And to the customer engagement slides, you said 12% of the engagements from cellular. I assume that is on a, say, absolute basis, but, if we were to convert that to a dollar base, slide, would it then be higher than 12% or lower? I know that's difficult to answer, but
That's one of the measurement we are not currently working on in Nordic to see what support rate is converting into dollars. But obviously, as this part is around 10xoble, you will we assume that it will increase potential revenue from each support case.
Okay. And finally, and so you said production in June. You mentioned that in production volume, in volumes in June. Does that, equal to production shipments in, Q3 in volume?
Basically we are able to do volume shipments in Q2. And it's up to customers and we have earlier said that we expect to see some pickup of LTE end of this year. It doesn't change. It's just that we are ready to ship end of this year. Just one more.
So just two quick follow ups. So the first one is on customer concentration. Could you share some color on what was the customer concentration your top 5 customers in the quarter. How much is the biggest customer at this point in time? And also in the backlog, how much of that record backlog is among kind of 1 or 2 top tier 1 customers?
[SPEAKER SRINIVASAN VENKATAKRISHNAN:] Actually, some the ones in the backlog are not on the top 5 customers this quarter. And what
is your biggest customer in terms of share of revenue at the moment in total.
So in proprietary, if it is focused on Bluetooth, it's I don't think the top 10, we will not come up with that number, but it's not very different from the top 10 list that we gave the previous quarters. So was it 30%, 40% in total?
It's much less delta between the top customers now than ever been before we used to have some significant higher than number 2, now we see that we have a concentration more or less on the same, I would say, range, 4 to 5 customers.
Okay. And then last one is more amazing. The question is, I guess, difficult to say anything about revenues for the full year, but in terms of OpEx, the full year that's in your control. So how much do you expect OpEx to be up over the year? How many more employees do you expect to be going out though 2019 compared to last year, for example?
So we haven't guided on that exact number, but if you just look at quarter over quarter. Of course, we added quite a few people last year. So when you look into 2019 versus 2018, you need to take account more people towards the end of 2018. As I also mentioned, we are closely monitoring revenue and OpEx spend so that we are within the KPIs that we've always talked about.
But we also need to have another view on this situation as we are moving into a Tier 1 customer base, that might require even more from Nordic and opportunities is also higher. So this is something we have to evaluate from opportunity to opportunity. It will be very wrong of us to stick to our guidance and not grab on to opportunities that take us to the next level. We are more focused on getting to the next level. Than focusing on OpEx expenses.
Okay. Let's answer all the questions. You guys have a good day and we continue with our Awesome. Thank you all.