So much for joining, and delighted to be here with Chuck Boynton, the CFO of Logitech. Chuck, really appreciate you joining us. As you may know, I'm the head of Europe Tech Hardware Research based in London at Goldman Sachs. And just to quickly remind everyone, this is not intended for the media and is an off-the-record discussion. So, perhaps, Chuck, we can just start with a quick recap of results. It'd be great to get a couple of minutes on the most salient points, and then we'll go into Q&A, and leave some time for audience questions at the end.
Sounds great. So, you know, we released results, you know, a month or so ago, and, I'd say, you know, Alex, as you know, and you wrote your recent notes about it, but our quarter was one where the results came in above expectations, but not where we wanted them to be. So it was one of those quarters that I would say was, all in all, quite positive. We brought channel inventory down, on-hand inventory came way down, free cash flow was really strong. Margins came in a little better than we thought, as well as revenue, but not where we wanted to be. Still down significantly year-over-year. So we kind of are. I think the word of the day was cautious optimism on the future, but still... We're still seeing declining results year-over-year, but the rate of decline is improving. So we're not sure we're at the bottom, but we feel like we're on that asymptote to a bottom and then eventual growth.
Makes total sense. And perhaps, can you just, remind us a bit, the kind of high-level demand trends you're seeing? Obviously, we'll go into the segments in more detail, but anything that really stood out?
Yeah, well, everyone knows Logitech is a company and a brand that's been around for a long, long time, and we've really tried to fold these sub-brands under the Logitech brand that, you know, our customers know and love. And we have, you know, three main pillars to our business: gaming and creators. And broadly, on the gaming side, we had a pretty good quarter. You know, we're the market leader in gaming mice. We have a really strong presence in all the peripherals, but we are, you know, huge share in gaming mice, a very profitable business for us. That business is quite strong. I'd say, you know, China was a little, not quite where we thought it would be. China's interesting.
It's a decent-sized market for us, and the results versus a year ago are actually favorable, which is somewhat, you know, interesting. If you look back a year ago, there was more lockdowns, and they were not quite recovered. And so year-over-year, the business looks okay, but the rate of change in China is more on a negative trend than a positive trend. Whereas the rest of the world, generally we're seeing things more favorable. North America and Europe have been quite strong for all the brands, not just gaming and creators. And if you move over to what we call personal workplace solutions, this is our traditional bread and butter of kind of mice, keyboards, webcams, the full kit that people use to be productive in the workforce. That was a great quarter.
I mean, the demand came in a lot stronger than we'd expected, really globally. But China, as I mentioned, was a little weaker, but North America, Europe were quite strong. And then the third kind of pillar would be video conferencing, headsets, kind of the B2B, the enterprise selling, and it was a disappointing quarter there overall. I think. That's a business, Alex, that I feel that it will be a great business, and it's still north of $100 million in a quarter in revenue. It's still good size for us, but it's not really coming back to the level that we had thought, and so we're kind of, well, it's a wait and see of when that's going to return to growth. I think it will.
I think it's more of a, a when, not an if, but it has been. It's still not improving. You've seen results of other competitors have also not had kind of great results. I will say the good news is that our market share is growing. We've got top share, of course, depending on how you measure it, but with the way we tend to look at this, we've got top market share. It's growing a little bit, and so it's really a market issue versus a Logitech issue.
Makes total sense. I guess another question we've had post results, obviously, you issued an update on in terms of guidance. And so people look at next quarter guidance, people look at the guidance for the second half of the fiscal year, and a number have just been asking, you know, to what degree that bakes in conservatism. Just, you know, when they contextualize it versus kind of historic seasonality and so on, looking back the last 10 years or so. So could you kind of help us understand, you know, to what degree is there conservatism there? What kind of informed the way you decided to set the guidance and so on?
Yeah, I mean, I think this has been a recurring kind of question we've been getting from a lot of our investors on: What's the model? I've been with the company now for seven or eight months, so I'm still relatively new. The company a year ago, though, had some significant challenges. I think, you know, missed a couple quarters, had to lower numbers, and so I came in really trying to unpack exactly where is the business. So how do we truly understand this from a unit economic standpoint, global demand? And our kind of religion is sales out is all that really matters. You know, sales in, people can hit, you know, hit sales in numbers, build channel inventory, and that's not good for anyone. So our view is we look at sales out. I look at that data every single week.
I get reporting every week by product line, by country, and it's. And so when we looked at the guidance for the year, we started the year, again, I was relatively new. We only guided the first half, primarily because Q3 is our December quarter. It's the biggest quarter, and it's the most uncertain. And so we put guidance out there that I think people thought was conservative, and I'm okay with that label, that's fine. But it was really. We didn't have great visibility into what the year was gonna look like. We gave first half guidance. We came out and said, either next quarter or the quarter after, we'll provide a full year outlook.
We had a fairly strong first quarter, and so with one quarter behind us, we decided it was the right time to provide a full year outlook. You know, for the second quarter, I can tell you pretty precisely where we're gonna land in Q2 right now with, call it, you know, five or so weeks to go, maybe four weeks to go. I can tell you pretty close where we're gonna land this quarter. What I can't tell you exactly is where the sales out is gonna be. So we provided an outlook range for finishing the first half that we felt really confident about. For the back half, there's still a lot of unknowns.
You know, if you look at right now where the current environment is, you know, there's some FX pressure and with RMB and with the yen, and so there's a little bit of uncertainty of what's happening both in China and in Japan. The demand side looks okay. The category plans that we have in place on the retail side with Best Buy and Amazon, they look good, but we just don't know where the back half's gonna land, so we put out numbers and outlook that we felt were prudent, responsible numbers that we could manage to. We don't think it's... Right now, at this stage, it doesn't. It's not helpful at all to put out stretched targets that we can't meet.
I feel good about where we stand today, but of course, you know, Q3 is our biggest quarter. That's the December quarter. The promo plans are in place, and so I feel like the, you know, the first half, we feel good. The second half is a bit of a wait and see because we just don't know what's gonna happen. The state of the consumer is strong right now, and I think this is the one that I think started the year, we were nervous about what is the state of the consumer with, you know, interest rates going up and, a lot of, you know, kind of fear, uncertainty, and doubt in the market. And the consumer's been pretty strong.
The enterprise has not been that strong, which is unusual because I, you know, I think the enterprise side has been a little bit challenging, but the consumer has been pretty strong, and so we're, I guess, we're cautiously optimistic going into the December quarter. We're seeing the plans right now, and I think we see, you know, we're, we're optimistic, but we're still kind of taking a cautious stance on the back half.
Makes sense. And could the way that you manage inventory and, and so on around some of those big sort of, promotional events, et cetera, could that impact the way seasonality looks? I mean, could you do things differently going forward?
It could. I mean, I think if... When I look at overall the December planning, last year, I was not here, but when I sort of unpacked what happened last year, it was a disappointing December quarter. We had the promotional plans out there, and the, I would say, the promoted items sold through quite strong, and the non-promoted items didn't really sell. So the result was lower unit volume and higher discounts than were planned. So don't repeat that.
Not an ideal combination.
That's the plan, right. And so, you know, those plans are in place, but I think a lot of it's gonna depend on what happens with the Black Friday promotions, what happens with the whole, holiday season. It's primarily a U.S. and European phenomenon, but, you know, the, it is 30% of our annual volumes typically are in the third quarter, so there, that is a big quarter, and the team does the planning. You got to realize that when you're working with Best Buy, and it's... If you, if you go down in the, in the retail stores and look at Best Buy, 'cause and, and I realize that lots of folks shop on Amazon and e-tail and whatnot, and the big, online companies, but if you go into the stores and look, we've done a phenomenal job.
Our presence in the stores is amazing. Our account teams that work with those retailers do a terrific job. That planning starts really in like February. So how much you're gonna sell, what you're gonna promote, what the shelves look like, then you're seeing all that come together right now. So it's quite interesting when you look at our share of space in the stores. It's really good. Promotions are planned, but now it's sort of wait and see what happens with sales out. Channel inventory, you mentioned, that is something super important to me, and what I'm trying really focus on with the company is drive down our inventory levels on-hand, drive down channel inventory, because ultimately, return on invested capital is kind of true north of what matters to us and our customers.
If we can generate better return on invested capital and our customers can, then I think we can have higher gross margins. So this, to me, the end game is really how do you drive improving gross margins? They are not where we want them to be right now. We want to see gross margin expansion. We've outlined our long-term model of 39%-44%. The last quarter, we did hit 39. It had a couple of one-timers that helped us, and we see a little bit of margin pressure into the next couple of quarters, but we are really focused on driving cost reduction to help on the margin side and then effective promotional planning to help on the ASP side, the net ASP to us.
Super helpful, and I think, Chuck, you talked about consumer, pretty good. Enterprise, not so good, and that's pretty consistent with, you know, some of the data points we've been hearing in the last kind of month or two. So I guess that kind of begs the question: How should we be thinking about video conferencing for the balance of this year? Obviously, that's supposed to be the growth driver, gross margin accretive, and so on. So what are you seeing there? It feels like that's been sort of more challenging. So what do you expect for the balance of the fiscal year? And then, how do you think about the kind of growth and opportunity as we go into future fiscal years?
Well, Alex, I love the video business. I just have a lot of passion for it. I think that it does so many great things on many levels, you know, for the environment, less travel, more connectivity... But it's been quite disappointing. I think it's a matter, as I mentioned, it's a matter of kind of when this is gonna turn, not if. The question is kind of what are the barriers right now? I think the, you know, the numbers that get floated is there's some 40-ish million conference rooms to sell into. We have two new product launches that are happening right now, that even with the market not recovering and the, and the overall, demand side improving, we have two new products that should be really helpful.
One is called Sight, and it's a category, it's a product that no one else has. It sits in the middle of the conference room table. It pairs with our Rally Bar and then represents those around the table with a full frame on Zoom or Teams or any of the video conferencing players. And so what that does is it provides equal representation for those in the back of the room or the side, with those that are in front, near the camera. It's an add-on to our existing portfolio that is gonna be shipping imminently, and it has a MSRP around $2,000, so it should help improve the ASP per room.
All the customer feedback so far has been quite positive, that this is something that you need to have for a medium to large conference room. On the small huddle room side, we had a gap in our portfolio, and now we've came out with Rally Bar Mini that's a gap, was a gap in the portfolio that should address a very large segment of huddle rooms. That will help. However, to get this thing turned around, I think a few things have to happen structurally. One is companies are trying to figure out what does return to office look like? And I think what we saw right post-pandemic, we saw the market really accelerate the buying cycles.
Oh, everyone's coming back now, I'm gonna re-outfit all my rooms." If you look at the history of kind of what conference rooms have looked like, early in the day, they were. You'd go meet in person, they were only in-person meetings. People would travel to meet in the conference room. Then, you know, Polycom and Cisco came out with their iconic star phones, and every conference room had a phone, and we all had bridge numbers. And okay, two are in the office, two are in another office, here's the bridge line. And I remember vividly early in my career, like, if you had one of those in your office, you'd made it. That was like. That was it. And now that's all being replaced with video, but these conference rooms are still not fully enabled, and the question is, why?
Well, it started post-pandemic of IT shops and real estate groups outfitting their rooms, and people weren't coming back, so they stopped, they paused. And I think right now, people are still trying to figure out what is the future state? "I've got a bunch of empty offices in my real estate portfolio. I'm gonna, you know, restructure, maybe, consolidate." And until they figure out what their plans are gonna be, they're not doing the full office rebuild and fit out of the modern video solutions. So you're still seeing, you know, Zoom and Teams activations grow. The market is there, the TAM is there, but so far, the sales are still kind of below expectations.
Now, if you combine all the players, it's still a decent-sized business, but it doesn't have the high growth rates that the independent research firms have published or that- where we believe it will. So I think this 10-year run is in front of us, and for us, it's really important because those are the highest margin products in our portfolio. And we've invested a lot in sales and marketing and go-to-market. Prior to when I joined, the company made a big bet, one of those was building out a direct sales force. We spend a lot of money on SG&A to run this B2B sales force, and that's one I think it's kind of. It's, I think it's a matter of you know, when that's gonna happen, not if.
Makes sense. And I think we've also heard about market share gains. Can you just sort of help us understand and unpick, you know, which of the dynamics you just mentioned play into that? Are there any other factors to bear in mind?
Well, there are. I mean, certainly, the video category specifically, there's a lot of competition. Competition's great. It drives innovation, it drives change. It's a big market, though. It can support many, many players. You know, we'd like to be number one. Certainly, you know, Cisco, with WebEx and their hardware, had market leadership, and they owned the category. As you know, Zoom kind of disrupted the market with the cloud, technologies, and then, you know, Microsoft kind of pivoted from Skype for Business to Teams. That has really kind of changed the whole dynamic significantly, and you've seen companies respond. I'm proud that Logitech was kind of the first mover. We were kind of the ones that first came in at scale with cloud-connected, you know, devices.
Initially, USB devices, you know, the camera solutions, the video bars that were USB, and then with Android operating system built in, so you could run with Tap, and now we've expanded that portfolio with many different items, and we've seen ASPs per room grow. You've seen a lot of share changes with Neat and DTEN and my prior company, Poly, et cetera. So it's a space where there's a lot of room for continued innovation, and but it's a big and will be, I think, growing market, and so there's formidable competition.
Brilliant. And I think you talked about the consumer side and how that was maybe a relative bright spot relative to expectations. So I'd love to talk a bit about gaming. You know, how do you think about that for the balance of the year, number one? Number two, how do you think about dynamics in China, perhaps playing into that? And I guess number three, you know, there's the notion of sort of consoles proliferating this year, perhaps some of the supply constraints, which were an issue last year and are now less of an issue. How do you put those together, and what kind of picture do you see in the coming quarters?
Yeah, the gaming category is a great category. This is a really cool business. My, my, it's my kids' favorite business, but it's a really cool business. The, you know, it's a little challenging 'cause some of the products, the margins are not that great, so you gotta be super careful what you're promoting and what you're not promoting. Generally, as you look at gaming, it's about new product introductions, NPIs. We are really, really good at NPIs, and we're really, really good at retail and managing retail, whether it's online or in-store. So our teams, both on the sales and go-to-market side, as well as the product side, are best-in-class. Now, you look broadly across market share for the company, we've got, call it, 15, 16 categories across our company that we compete in. We're number one market share in 11 or 12 of those 15 categories, so we think that's a good place to be. Gaming itself, you've got many different categories. For example, console headsets, really crowded, lots of competitors.
We've got a couple new products coming out that I think will help, maybe gain some share back, where we've lost a little bit of share 'cause the product portfolio was aging a little bit. You know, one of my favorites, you know, Formula One steering wheels, you know, simulation sports, that was a phenomenal franchise with Drive to Survive, and everyone was buying the console or the steering wheel business. That was a great business. It's come down a little bit, but we still have top share there. Gaming mice, obviously, and keyboards, we have a really strong position, and today we announced a couple of new products.
There's some really cool new pro line products, and these are, like, really good ASPs, like a, you know, $200 keyboards, $180 mice. I mean, these are really, you know, professional level for those that really care about that technology and that response time. We've got, you know, market-leading products. And then if you look adjacent to gaming, the creator business, we have this whole business, the creator economy, the software business, the SaaS business, and Streamlabs, where a lot of the leading kind of influencers and podcasters and YouTubers use our technology to manage their creative content. And we recently acquired a company called Loupedeck that's super interesting, where we're gonna create next-gen keyboards, a console where you can customize and program, where each key can be digitally changed.
You think about if you're a gamer and you wanna have a separate keyboard with, like, hotkeys. Think of like a TV production studio, how they have the ability to change the camera position or the lighting very quickly. You can do that with a separate keyboard. These will be really good margin, kinda cutting-edge technology, next-gen tech. The same thing for the business user. Think of if you're an Adobe, you know, Creative Suite user or Photoshop, you have the ability to not have to program your own hotkeys with macros. You can predetermine those with a kit, and each key shows up to be able to do things like cropping or adjusting lighting or editing video. Really, really cool stuff across that, not just gaming, but gaming and creators. And I mentioned the branding. Everyone loves the Logitech brand.
It's revered. It's been around for a long time. People trust it. They know it. They love it. We've got other brands, like Blue Microphones or Astro, and we're bringing those into the Logitech brand to kinda draft off that brand equity that we have, that I really think will be helpful. And we've cut our marketing budgets radically since the pandemic when revenue grew, like, 70-ish%. You know, we did a Super Bowl ad. All- we've cut all that spending, but the brand equity is so strong that that's really, I think, really helping us win and maintain that top market share.
Makes total sense. You talked about content creation, and I think you mentioned there some of the more high-end things, you're sort of involved in, but it'd be great to get your sense on the sort of fundamentals of the market. I mean, we look at sort of PCs, for example. We had one of the major OEMs in the last week talking about stabilization, and actually, they guided their revenues for the next quarter, meaningfully better than people thought. So if we think about sort of those peripherals, keyboards, mice, et cetera, to what degree do you think we're out of the woods on that side of things? Do you think we're kind of in a more stabilization phase at this point?
Well, I think so. I mean, there's always been the question of, you know, how linked is our business to the PC business? Yes, it's correlated, but it's not perfectly correlated.
Sure.
If someone buys a new laptop and they're replacing an old laptop, then the PC kind of attach rate, the peripheral attach rate may not be super high. What we saw in the pandemic, though, was super interesting, and that was people went from office to home overnight, and they had nothing. They had a laptop. They bought whatever they could: a headset, could be a gaming headset. They bought any kind of any mouse they could find. People were sold out. It was just a phenomenal period of time for peripheral sales. Then, they go back to the office, and they realize, you know, what they have is not sufficient.
The TAM really expanded during the post-pandemic, not necessarily because of faster refresh rates, but because now I'm gonna work from home two days a week, and I'm gonna work in the office, you know, two or three days a week. Now I need two kits. I need two webcams, I need two mice, I need two laptops, and you have this innovation happening, where people are seeing, "That headset I had just was not that good. I want a better headset that I can wear all day, better sound quality. I want a better webcam. I want a 4K. I don't want my old 1080p," you know, my ... And so that whole kind of upgrade is happening, and so that, our PWS business is doing really well right now.
I know, you know, realize that HP came out with, you know, a little challenging results, and Dell kind of had a phenomenal quarter. That's not the leading indicator. I think, you know, we want them to do well. It's good when the ecosystem does well, but what we're finding is innovation on mice, keyboards, working with, you know, the large players, is it's been super helpful to us, and that traditional core business for ours is just it's in a really good place right now, and we're seeing, you know, last quarter, the results were better than we expected, and I think we're optimistic that our core of our company, mice, keyboards, webcams, the peripheral systems around the worker, that's just been a really good, strong point for us.
Could you expand a bit on sort of what gives you confidence in the sustainability of growth there? Because obviously you've had some quite nice growth rates.
Well, but remember that it's still down from a year ago. I mean, so I think, you know, just again, we didn't... I don't wanna sound too optimistic because I think we're in a position here where the year-over-year results are still negative. It's not like we're, you know, up 10% from prior year. You know, we're still these are still, you know, we're down, but the comps become a little bit easier through the back half of the year, and the rate of change overall as a company, we're kind of getting to that asymptote. And so I kinda feel like, yeah, we're still seeing negative results versus year ago, but the comps are getting a little easier, and the rate of change is declining. So I, you know, I don't know when the growth is gonna happen, but I feel like we're at least in a position that things are improving or becoming less bad, if that's a word.
I see. No, that's, that's very well put, and I'd like to leave some time just for an audience question or two at the end, but perhaps we could touch base on margins. I think you mentioned the sort of long-term target, and it'd be great to just decompose a bit the kind of different drivers that are gonna let you get there. I think perhaps more immediately, if we look at the second half of the fiscal year, there are probably some puts and takes there, some things that were perhaps drags, which may be now reverse a bit, but equally, I think you talked about FX and some other things to be aware of. Maybe we can kind of talk short term and longer term on margins.
Yeah. So if you unpack margins and you kind of look by category, you've got different margin profiles. You know, video is, you know, very high margins, I mean, relatively speaking, from above average anyways, and some of the gaming products are lower. And so there, there's a range in between of the different categories. So mix does have a big impact, and so that is a headwind right now because video is underperforming to our expectations. So that is a, I think it's a future tailwind. It's a short-term headwind. What's in our control is cost reduction, so we've done a really good job of driving costs down. Part of that's been just the market, freight, you know, it's like shipping. Shipping rates have come way down, because of component availability.
We're putting stuff on the water versus in the air. That, that mix, everyone's getting that benefit. That's helped us. This last quarter, we had a couple one-timers that, that won't repeat, that were, you know, relatively small, but helped improve the margins. So I think about this year, I think, you know, we, we had, you know, 39% margins last quarter. We're probably in the 38s as we, as we sort of, guided last quarter. So I think we're seeing a little bit of pressure in the near term, but then when you think about four to six quarters out, we have cost reduction from material cost reduction. Us negotiating design for engineering, design for manufacturing, it's in our control.
FX, we can't really control, but there is, you know, a lot of our costs are, you know, relatively known, and we do we have taken prices up when there's been, you know, cost pressures with FX. But, you know, today there's a little bit of headwinds with, you know, Japan and China, as I mentioned. You know, you compare it to a year ago, it's a headwind. We're not counting on FX to kind of help or hurt because generally, it's just that's not something you can control, and then the other lever is discounting. So I kind of look at it like product mix, cost reduction, and discounting and promotions.
That's the recipe, and so with that, we feel, you know, like we can get to a range where we're, you know, 40-ish in, you know, four to six quarters. It's not a big gap from where we are today. Then you say, well, you have an outline model or a long-term financial model of 39-44. Well, to get to the 44, that product mix, video needs to come back. You know, there's a few things that have to happen to get to the higher end of that range, but I think the lower end of that range, we were there last quarter. I think we can get back to there in four to six quarters with those things that we can control.
Excellent. I think we've got five minutes left. Just like to open it up to the floor in case anyone had a question. Sure.
Thank you. Just if we go back to the guidance question, I mean, I guess listening to you, I came away going, I still think the guidance is very conservative. But in terms of timing for upgrade, that would probably only come post Q3 once you actually see the December quarter itself, so we wouldn't see anything before that?
You're saying to upgrade, update guide?
If you were gonna update guidance, upgrade or make any adjustments?
Well, I think we'll look at it again. We'll look at it every quarter, right? So we'll look at it when we do our earnings call after the September quarter end and see if it, you know, if we should make a change to the model. It depends on how things, you know, sort out. You realize, though, that, you know, the December quarter is our biggest quarter and what I really am thinking, focused on is I don't want to end Q4 with a lot of channel inventory, the March quarter.
Okay.
Because effectively, if you've got a bunch of channel inventory or on-hand inventory in the March quarter, you're probably gonna hold a lot of that in both the June and the September quarter until you get back to the seasonality. And so if the consumer is strong and December is strong, then Q1 will start. Sorry, we'll start Q4 with lean channel inventory. We'll have a normal sell-in in Q4. If the December quarter is not to expectations, then we're gonna not sell in as much in Q4, burn down the channel inventory to a low, reasonable level. And so I think in the past, you know, we maybe carried more channel inventory in Q4 because it wasn't selling out in Q3, and so I think that kind of had hurt the results.
This year, if you'll recall, we did a material reduction in channel inventory, and I'm really proud of that. The company. We've really focused on lean manufacturing, lean on-hand inventory, lean channel inventory, and that's showing up in the results right now. It showed up with better results in last quarter than we'd expected, primarily because we focused on that, on keeping those costs down.
Thank you.
We've got time to squeeze in one more question. If anyone wants... Otherwise, I'll chip in with one final question. Obviously, Logitech, very cash-generative business, well-capitalized. You've done a bunch of deals in the past, ranging from Jaybird to Astro, Loupedeck more recently, and other deals. After sort of seven months, how do you feel about the scope to do M&A? How do you think about the philosophy for the company going forward in that regard?
Yeah, I mean, I think we are in a great position. We've got a, you know, really strong balance sheet, you know, $1 billion and change in cash, no debt. We had a great cash quarter last quarter. I would say the capital allocation model is, first we pay a dividend, and that, you know, we will continue to pay a dividend. The excess cash, we will primarily focus on M&A, and then the cash that we don't use, we will return to shareholders via buybacks, and that model, it's worked incredibly well for us. With an interim CEO right now, we're not likely to do, you know, a big M&A deal with an interim CEO. I think that would be irresponsible, so, you know, but we will continue to do small deals for sure.
Once we have a you know a CEO in place and he or she is at the helm then we'll consider doing you know more deals or bigger deals. But I'd say right now you know we're going to be conservative. We've always had a very high bar. We look at hundreds and hundreds of companies. I'm proud of the deals that we've done. The Loupedeck deal, as an example, is a relatively small tuck-in technology acquisition. I would expect more of that until we have a permanent CEO in place who you know will with me personally sign off on these deals and whatnot. So I'd say more of the same as the last quarter until we can have our new leadership in place.
Brilliant. Well, Chuck, thank you so much for your time.
Alex, thank you for coming over here, and good to see you. Thank you all for joining us today.