Earnings Call: Q3 2019

Dec 20, 2018

Good morning, and welcome to the BlackBerry Fiscal Year 2019 Third Quarter Results Conference Call. My name is Matthew, and I'll be your conference moderator for today's call. As a reminder, this conference is being recorded for replay purposes. I'd now like to turn the presentation over to our host for today's call, Christopher Lee, Vice President of Finance. Please go ahead. Thank you, Matthew. Welcome to the BlackBerry fiscal year 2019 Q3 results conference call. With me on the call today are Executive Chairman and Chief Executive Officer, John Chen and Chief Financial Officer and Chief Operating Officer, Steve Capelli. After I read our cautionary note regarding forward looking statements, John will provide a business update and Steve will then review the financial results. We will then open the call for a brief Q and A session. This call is available to the general public via call in numbers and via webcast in the Investor Information section at blackberry.com. A replay will also be available on the blackberry.com website. Some of the statements we'll be making today constitute forward looking statements and are made pursuant to the Safe Harbor provisions of applicable U. S. And Canadian securities laws. We'll indicate forward looking statements by using words such as expect, will, should, model, intend, believe and similar expressions. Forward looking statements are based on estimates and assumptions made by the company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors that the company believes are relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward looking statements, including the risk factors that are discussed in the company's annual information form, which is included in our annual report on Form 40F and in our MD and A. You should not place undue reliance on the company's forward looking statements. The company has no intention and undertakes no obligation to update or revise any forward looking statements except as required by law. As is customary during the call, John and Steve will reference non GAAP numbers in their summary of our quarterly and annual results. For a reconciliation between our GAAP and non GAAP numbers, please see the earnings press release and supplement published earlier today. I will now turn the call over to John. Thank you, Christopher. Sorry, Christopher. I didn't know your name Christopher. But anyway, thank you Christopher. Good morning everybody. As Chris stated, I will reference non GAAP number in my summary for our quarterly results. BlackBerry had an exciting 3rd fiscal quarter. First, we exceeded revenue, earnings per share and earnings delivered, sorry, revenue and earnings per share expectation for the quarter. We delivered year over year double digit percentage growth for total software and service revenue, earnings per share as well as free cash flow. We also entered into a definitive agreement to acquire Cylance, an artificial intelligence and cybersecurity leader. This acquisition will be a key investment to accelerate BlackBerry future software and services growth. I will chat more about our acquisition and how it fits into BlackBerry's strategy later on the call. We continue to execute against our fiscal 2019 financial and operating plan. We delivered another good quarter with financial results. We are tracking to achieve the annual financial guidance we shared at the beginning of the year. Let me provide some highlights for the 4th fiscal quarter. Total revenue came in at 228,000,000 dollars Total software and services revenue was $219,000,000 This is a new record quarterly high. Total software and services billing grew year over year. Year to date fiscal 2019 total company software and services billing grew a double digit percentage versus the comparable period last year. Gross margin came in at 76%. Operating income was $27,000,000 positive for the 11th consecutive quarters. Operating margin was 12%, an increase of 4 percentage points from last quarter. This by the way matches the highest operating margin reported by the company since fiscal 2012. EPS came in at $0.05 Total ending cash and investment were $2,400,000,000 Next, I will cover some of the significant highlights by business. First, I start with the BlackBerry Technology Solutions, which includes Embedded Software and Access Tracking. BTS revenue grew 23% year over year. Growth in BTS continued to be driven primarily by BlackBerry QNX, where software development license, services and royalty revenue have all grown double digit percentage year over year. The increase in revenue has been broad based across various different application in both the automotive as well as the general embedded market. We continue to be chosen by customer from around the world and the number of design wins in the quarter increased both sequentially as well as year over year. I will speak about our automotive business since I know you're a lot of you are mostly interested by our activities in that vertical. We have 5 infotainment design wins in the quarter, including a notable win with Aptiv in Asia Pacific. We also had 4 design wins in non infotainment categories like ADAS, instrument cluster and domain controllers. 2 of those wins were for instrument cluster with Danso in North America and with Dalian Eastern Display in Asia Pacific. In addition, after the quarter ended, Lettertech, a Canadian startup chose QNX as the operating system for its auto and mobility lidar platform. Lidar stands for light detection and ranging. Lidartech is known for its production of solid state lidar sensor and was recognized for its new innovation at last year's CES or CES this year, CES 2018. On BlackBerry Radar, our asset tracking business, we are making progress quarter over quarter. We added 9 new customers, including Bimbo Bakeries USA, Clyde Camp, Trucking and Madison. We also received repeat orders from 6 existing customers including Flexovan. A word on our licensing business. Our licensing business continues to perform well. We have a robust pipeline. We intend to close these licensing opportunity while building a point on our recurring revenue base of $40,000,000 to $50,000,000 per quarter. Next, I will discuss our enterprise software business. We achieved 7% sequential revenue growth this quarter. This represents our 2nd consecutive quarter of sequential growth revenue growth after implementing ASC 606 in the 1st fiscal quarter of 2019, which move more of our enterprise software and services revenue to a more ratable model. In the quarter, the standout performers was our government business. Some of our notable wins include the Defense Intelligence Agency, the Federal Emergency Management Agency, FEMA, the IRS, the Internal Revenue Services, the Transportation and Security Administration, the TSA the U. S. Air Force as well as U. S. Marine Corps. Our authority to operate has increased from 6 U. S. Government agencies last quarter to 8 agencies this quarter, including the U. S. Agency For International Development as well as the Department of Energy in the United States. Our BlackBerry FatRamp cloud user base increased by 20% from last quarter to approximately 1,200,000 users. Additionally, we saw increased demand for subscription to the UEM content suite from existing customer. The content suite provides customer with our highest level of security and includes secure document collaboration, which is BlackBerry Work Space and the Digital Rights Management. Some brief comments on Sparks. As you are aware, Spark is a platform we are developing to secure communication and collaboration amount or smart endpoints. Spark brings together all our technology assets and capabilities on a single end to end platform. We believe there are many significant opportunities for Spark to address in the world where endpoints are hyper connected and as well as intelligent, but also requiring absolute data privacy and security. So one such opportunity is the smart city and intelligent transportation systems. You see evidence of our vision and leadership with our recent announcement of a security credential management system, simple as SCMS, that will allow vehicle and infrastructure to exchange information in a trustworthy and private manner using our digital certificates technology. We believe BlackBerry can be at the foundation of smart city in the future autonomous vehicle world, and it's necessary too. Last month, we announced entering into a definitive agreement to acquire Cylance. As I mentioned on our November call, the acquisition will provide BlackBerry with additional cybersecurity capabilities with state of the art AI, artificial intelligence and as well as machine learning technology. These cybersecurity capabilities will fit nicely with everything we do from today with UEM and QNX and to our future, which including the Spark. And is consistent with the long term strategic strategy we share with you throughout the fiscal year. Our customers should be excited because our combination will bring complementary technology from cryptology to NOx to AI and know how that will allow BlackBerry to offer what we believe is the most secure end to end data and communication platform. We will go into more details on the technology as well as the use cases at our Analyst Day next April. Before I turn the call over to Steve, let me provide you with a quick update on the acquisition process. We have already received the HSR antitrust clearance. We actually received this early. Our joint voluntary notice has been filed with CFIUS. We anticipate receiving comments by the end of January 2019 and should be closed shortly after. I will now turn the call over to Steve to provide some more details about our financial results and our quarterly performance. Steve? Thank you, John. My comments on our financial performance for the fiscal quarter will be in non GAAP terms unless specified otherwise. We delivered 3rd quarter non GAAP total company revenue of 228,000,000 dollars and GAAP total company revenue of $226,000,000 I will break down revenue shortly. 3rd quarter total company gross margin was 76%. Our non GAAP gross margin includes software deferred revenue acquired but not recognized of $2,000,000 and excludes stock compensation expense of 1,000,000 Operating expenses of $146,000,000 were down 3% sequentially as we continue to maintain financial discipline by optimizing our resources, becoming more efficient and improving our bottom line. Our non GAAP operating expenses exclude $20,000,000 in amortization of acquired intangibles, dollars 14,000,000 in stock comp expense, dollars 1,000,000 in restructuring charges and a benefit of $69,000,000 related to the fair value adjustment on the debentures. Non GAAP operating income was $27,000,000 and non GAAP net income was $28,000,000 Non GAAP EPS was $0.05 in the Q3. Our adjusted EBITDA was $44,000,000 this quarter excluding the non GAAP adjustments previously mentioned. This equates to an adjusted EBITDA margin of 19%. I will now provide a breakdown of our revenue in the quarter. Total software and services revenue was $219,000,000 representing 96% of total revenue and up from 85% compared to a year ago. Total SaaS revenue was $9,000,000 and total handset device revenue was 0. TAF continues to wind down as expected. I will now provide a further breakdown of our software and services revenue in the quarter. Enterprise software accounted for 45%, BlackBerry Technology Solutions accounted for 24% and licensing IP and other accounted for 31%. Please refer to the supplemental table in the press release for the GAAP and non GAAP details. I am pleased to report we continue to make good progress since we implemented ASC 606 at the beginning of the fiscal year. You may recall that we reported an 18% year over year decline in enterprise software and services revenue in Q1. Since Q1, we have achieved sequential growth in Enterprise Software and Services revenue so that the reported year over year decline has improved from 18% in Q1 to 10% in Q2 and 8% in Q3. We experienced the same progressive improvement if we were to account for the Q3 of last year under ASC 606 in the same way this fiscal year. On that basis, enterprise software and services revenue would have experienced approximately 6% growth year over year this quarter. Recurring software and servicing revenue was approximately 79% in the quarter consistent with the definition we have used before implementing ASC 606, which was to exclude perpetual licenses from this calculation because they were recognized upfront. However, with the implementation of ASC 606 in the Q1 of fiscal 2019, any perpetual licenses we enter now are recognized ratably over 4 years. When including these perpetual licenses, recurring revenue would have been approximately 88% this quarter. Now moving on to our balance sheet and working capital performance. Total cash, cash equivalents and investments were $2,400,000,000 which increased by $47,000,000 from August 31, 2018. Our net cash position was $1,800,000,000 at the end of the quarter. Moving to the cash flow statement. Free cash flow before considering the impact of restructuring and legal proceedings was positive $39,000,000 dollars Cash generated in operations was 62,000,000 and capital expenditures were 5,000,000 That concludes my comments. I'll now turn the call back to John to provide our financial outlook. Thank you, Steve. We are reaffirming our fiscal year 2019 financial outlook, which are total company software services billing growth to be double digit, total software services revenue growth to be between 8% to 10%, non GAAP EPS to be positive and we will deliver positive free cash flow for the year. With that, I would like to Matthew, I would like to open this for Q and A. And we will now begin the question and answer session. Our first question today will be from Paul Steep with Scotia Capital Markets. Please go ahead. Hey, Paul. Good morning. Good morning. Steve or John, can you talk a little bit about the IP and Licensing business? John, you mentioned that the base was 40 to 50, but we're wondering, did that step up in the quarter to a higher level? Or was there anything one time or unusual that either moved forward from Q4 into the quarter or we had a new higher baseline? Thank you. I said $40,000,000 to $45,000,000 you added $5,000,000 to it. Our recurring quarterly IP is about $40,000,000 to $45,000,000 It will creep up over time. Yes, there were a one time in the quarter, but I'd like to talk about one time because we as I said earlier, we have a pipeline of licensing deals and we intend to close it. Timing of the close a lot of times are somewhat unpredictable. So we do have a good growth in Q3. No, it did not come in as an expense of Q4. Okay. And then the I just wanted to add to John's comment about the pipeline, which is, while we can't guarantee each and every quarter will be the same, we've been pretty consistent in bringing in revenue above that 40% to 45% number. Okay. The quick follow-up, I guess, John, can you talk a little bit about the ramp up in auto design wins? How we've seen that sort of layer on in the last couple of quarters? You gave us nice detail about new wins. But what I'm thinking back to is wins that you won over the last sort of 18 months, how those are starting to stack into the numbers in terms of non IVI type wins, where you're at in terms of shipping ADAS and non IVI type applications. Happy holidays. Okay. Happy holidays. So gestation period of design wins are long in QNX. But once you get it, it's also a very long tail and quite stable on a quarterly basis. So what we really are experiencing right now, the growth comes from probably something that we have won the design projects that we won about 3 years ago. And so as they are shipping those design embedded into the auto, we're starting to see the royalty flow. So while we're winning like today, we will probably won't see it for 2, 3 years out. It will help create that base. But so as you could see, this is why it was so important to highlight the design wins so that you know that the pipelines are there and the revenue will be coming on a rather predictable way. So that's why we highlighted. And the non and you know that we have a big push on getting beyond IVI, the infotainment. And although IVI, I just caution everybody, is still a very, very good business. We have won some really big ones in most recently. And auto costs now have IBI, it's kind of standard now. So I wouldn't think IBI is that not as good as a piece of business. Thank you. Yes. Our next question comes from the line of Todd Coupland with CIBC. Your line is open. Hi Todd. Hi, yes. Good morning. Good morning. One clarification and one question if I could. Okay. So on IP licensing, there was some I might have missed this, so I apologize if I did. There was some discussion in the press that you had signed a licensing deal with Nokia. Was that contributing this quarter in the higher revenue? Yes. Okay. And is that finished now? Finish. I'd say no cure are finished for the time being. Yes, I don't understand the word finish. We obviously So what I mean is, does it represent everything that you signed with Nokia up until now? I don't want to go through the details in terms of the transaction itself. But I think in terms of future revenue, I would not see future revenue in the short term from Nokia, correct. Okay. Unless we have new licensing agreement. So Nokia and us could also work on new licensing. That's not precluded. Just background for the question. I think there were some things written in the press where people were thinking it was sort of a plus $100,000,000 opportunity and there was a few things in the quarter that would have made up to $68,000,000 So that was the background for the question. Yes. Don't believe what is written out there. Yes. Yes. Second question. So I want to ask you about competition in device management. Is there any change in market share with what appears to have been a rise in Microsoft's position in some of the market research firms and Magic Quadrants that are out there in the past year. Just wondering how you're stacking up against that? We've had some investors ask this competitive question now with a little bit stronger push from market. To us, a little bit different, because we're concentrated on regulated industry and we're concentrated on federal and federal meaning governments, I shouldn't say federal, governments around the world, 5, 5, G7 and so forth. So we concentrated on that and we're concentrated on banking and finance, where security is the number security and compliance are the number one ingredient or number one requirement. So we don't see as much on the lower end or the mid range deal, yes, you could see Microsoft PD, pretty aggressive in that space. We still maintain our number 2 position in market share according to IDC most recent publication. We don't expect to obviously, there are competition, but we expect to at least hold that position. And longer term, if the acquisition of Cylance goes through, that may help us further our platform for UEM as well. Okay. Thank you so much. Okay. Thank you. Our next question comes from the line of Gus Papageorgiou with Macquarie. Your line is open. Hey, guys. Hi, Gus. Hi, Gus. What's happening with the auto market? Well, since you're asking. I was going to ask you about that question. Question. I just wanted to maybe ask for a little more color on BTS and some nice growth there, up 23% year over year. But I'm wondering if you could kind of segment kind of IEI growth versus growth in the other software modules and maybe what we're seeing there and as you're looking forward, should we kind of assume IEI is flat and what kind of growth rate would you expect for the kind of other software modules in that line of business? Well, no, when we talk about design wins, all these ADAS, clusters, instrumentation, hypervisors, all those wins are good wins. They are all design wins. So technically speaking, you're not really seeing the revenue in the numbers that we're reporting today, but only to the exception of maybe some development seats and some professional services, but those are not a high number. So the IVI, non IVI growth is pretty split, as you could see that we have 9 design wins, 5 in infotainment, 4 in ADAS and cluster area. So we're making progress pretty much across the board. So I mean, if I understand correctly then, is it fair to say that your II is actually growing pretty well and that we shouldn't assume that it's flat? And I guess I saw cost scrambling, it's because you're just you have the design wins and the seats, once these other programs go into volume, should we see a huge a big ramp then? And what kind of timing can we expect? Yes. But timing to be expected is usually 2, 3 years, as you know the business quite well. And let me describe this this way. Remember a couple of quarters ago I said, 3, 4 years ago, our platform is probably running about $20,000,000 or so a quarter. Right now, we're running at close to $50,000,000 a quarter. And so and that was a result of all the design wins 3, 4 years ago. When people keep asking me, when I told people that we have good design wins and they say, well, where's the beef, right? Where's the revenue? And now we're showing you the revenue of the design wins that we have in 2, 3 years out. So the next step up of that you should start seeing probably not immediately, about a year out maybe, you could start seeing the next plateau reach. So and that's how that's the nature of this particular business. The good thing again, what I want to emphasize is, once you started to have revenue coming, the flow is not only predictable and is ramping slightly over the life cycle, it's a long flow, it's a long tail. Great. Thank you very much. Sure. Our next question comes from the line of Daniel Chan with TD Securities. Your line is open. Hi. Good morning. Good morning. Just wondering if you had a chance to talk to some of your existing customers about Cylance and if you could provide us with any early feedback you're getting from them? Yes. So first of all, we are really not supposed to talk about this before our hospital Rodino was cleared, which is antitrust. So we haven't really talked to a lot of customers in detail of how it's going to work, but we now could start doing that in some form now. But the early indication from the customers of a very high interest, They all wanted to know how it gets to the mobility and how we could use the technology in the auto. We have good conversation, good discussion. That's good to hear. I just want to switch gears to the enterprise software side. Steve, you talked about how you're making improvements there and your year over year that's showing up in your year over year. Just wondering if you guys can give us some indication of how your customers and your direct sales team is adapting to the sale of more subscription licenses perpetual. Is that where it needs to be now or is there still more work to be done? Well, it's an ongoing process. The sales force is still adjusting to the subscription. But I wanted to tell everybody that we don't really have that big a sales force issue to deal with because our compensation plans for the salespeople had no difference whether it's subscription or because we count people on billings. So there's no difference on how we take revenue. And so I wouldn't be concerned about that. Yes. The major difference is, as you know, is a not just perpetual to subscription, but just the fact that you can't change your quarter results in the final week of a quarter. So what you have to do is the rhythm has to be week to week day to day, week to week as opposed to month to month. And so that's a change. That's a change, yes. Right. That's a change, but not right. That's a change. That change is we're still working that. Yes, it is, clearly. Okay. But if you're compensating your team on billings, is it fair to say that they're more likely to get a larger or to chase a larger multiyear deal than a one time perpetual license? No. We still like a 2 or 3 year subscription deal. That's what we're asking every people to do. And a perpetual license would always be higher dollar value. So you know what I'm getting at, Dan? Yes. No, I but my thinking is after the 2 to 3 years are done from the subscription license, then they have an opportunity to renew that that's better the sales guy over the long term, isn't it? Correct. And better for the company, which is why we chose that path. Absolutely. Okay. Thank you. Okay. Our next question comes from the line of Steven Fox with Cross Research. Your line is open. Thanks. Hi, good morning. Good morning. Couple of questions on the relationship with Aptiv, which you highlighted with these 5 infotainment wins in Asia. My understanding is you've had a partnership on the autonomous driving side for better part of the year, but this is certain types of programs? Can you just sort of expand on that as well? Thanks. Yes. I certain types of programs? Can you just sort of expand on that as well? Thanks. Yes. That particular one is they're using us as their platform. So it will eventually map into multiple customers. They obviously have customers in mind already, but they will invest. So we do have a relationship with them on autonomous platform, but we also have a relationship with them, as you can see, on connected cars. And the win in Asia was for a platform that's for a single OEM or is it multiple OEMs? In this particular instance, it's 1 single OEM. Okay, great. And then just broadly speaking, when you think about working with some of the Tier 1s, is there certain criteria you're looking at in terms of how it most benefits you guys? Or is there a number of Tier 1s that you can find attractive no matter what? Thanks. We like to work with every Tier 1, every Tier 1, every integrator. So I don't think we have an established profile of a Tier 1. Obviously, they need to have a good enough technology background and channel because we don't want them to misuse our technology. Sometimes, some Tier 1 require our help to integrate the technology and that's when our professional services work comes in. Our next question comes from the line of Paul Treiber with RBC Capital Markets. Your line is open. Hey, Paul. Hey, thanks very much and good morning. Sure. Good morning. Great. My line is working today. Could you clarify on the billings growth, I think I heard earlier that it was double digit year to date, but then it was just an increase year over year. Is that right? And then if so, what for this quarter, what led to the change? To the change? Yes. Well, so the quarter as a total company, our billings growth was single digit. However, we still stay on track for double digit for the year for the company. And we're really dealing with, I think, more or less the law of small numbers as opposed to anything significant in the market. Okay. So just the quarterly ebbs and flows, and you didn't see any macro changes or anything in the quarter that would give you any reason to be concerned? No, no, not yet. And then secondly, just in regards to the enterprise software business, a couple of months ago, you announced a partnership with Check Point. Could you provide an update there in terms of how that's rolling out? And then also can you explain how that partnership would also fit into like the BlackBerry post silence? Okay. Well, that's a great question. That's a good question. So we at that time, we have we announced actually 3, not at the same time, but 3 MTD partner, the Mobile Threat Detection partners and Check Point is one of them. The other 2 are Lookout and Simperium. From what I could check-in the market, Lookout and Checkpoints are quite active with us. And Lookout, we have won a number of deals and Checkpoint, we have quite a bit of pipelines there. So things are looking good. But as to the after check after Cylance integrate, Cylance, of course, we're going to port over the endpoint protection prediction technology. And hopefully, that we could work with Locale and Simparion and Checkpoint on extending what they have to offer. So, I think we could, because it's a similar market, but slightly different technology. Okay. I see. Just lastly on ESS, enterprise software, how do we think about the seasonality of revenue going into Q4 in light of 606? Well, Q4 was our biggest perpetual license quarter last year. So you have a little bit of a change there. And I would still expect a sequential of I won't tell you whether it will be the same rate as we've done in Q2 Q1 to Q2 and Q2 to Q3, but I will still expect an uptick. Yes. We'll see sequential growth in revenue from Q3. We also will see the 606 damping effect also goes down as we continue to make progress. Like Steve had mentioned earlier, we went from minus 18 year over year to minus 10 to minus 8. It should be better than that. And just so I fully understand, even with 606, there's still some license revenue that you would take on an upfront basis? Yes. So how it works is as follows. As long as we have delivered all of the services at the time, we can take the revenue. Let me give you an example. So you could have a situation where a singular product is being sold as opposed to the Suite. And obviously in that space we have a product at SecuSmart, which is different functionality than our normal UEM. So we do have some components that will have the immediacy of revenue. But then that's not high. But it isn't. That's not high. And you can tell it's not high because when we factor in the recurring revenue at the high 80 rate, small numbers. Yes. Those are small number. I mean, it is true, like Steve said, that those condition does exist, but it's not high numbers. Okay. Go ahead, Matthew. Our next question comes from the line of Trip Chaudhry with Global Equity Research. Your line is open. Hey, Trip. Thank you. Again, very exciting numbers here. John, 2 questions on Cylance. We were at Amazon AWS Conference. I can tell you the acquisition you have made is fundamentally a game changer for the whole industry. I was wondering, currently based on your comments, you seem to be focused on making sure Cylance integrates and works well with your existing products. The impression I got from talking to various people at the AWS conference was Cylance by itself has a multi $1,000,000,000 opportunity in competitive replacements of old generation security products in the industry because this the company you acquired literally is a game changer because the machine learning algorithms precision is above 80%, probably the highest in the industry. I was wondering, do you think it will make sense to just keep Cylance segmental revenue separate so that we can monitor the impact Cylance is having under BlackBerry? Very good, Joe. Great question. First of all, I think you know me for a very long time. I'm trying to be a little bit more conservative without having seen an entire integration plan. No doubt Cylance itself is a high growth entity in their own business. And no doubt they are the standout on the EPP protection using AI technology and they are highly competitive against replacing the old signature based technology, which are Symantec and McAfee. And so those are very exciting opportunity. I'm not I'm still pursuing those opportunity, obviously. What I wanted to explain to the shareholder is not something that we added to a number of things we're already doing. It's complementary to what we're doing. And in addition to the opportunity they could explore in the whole cybersecurity world, which is obviously multi, multi, multi $1,000,000,000 marketplace. So we have not I have not decided on the organization going forward. We will keep them as a separate business unit, for sure. That is that has been decided. And so once we decided what the organization going forward, we will then adjust the reporting of that. And I could hear your point, and we'll most likely can't guarantee you, most likely we'll keep Cylance reporting as a separate line. Beautiful. Congratulations on exceptional execution. Thank you. Happy holidays to you. Okay. No further questions or not. Okay. Good. Thank you. All right. Thank you, Matthew. Okay. Thank you very much for everybody's time today. I'd like to wish you all a very happy season a happy holiday season. And we look forward to seeing you in Vegas, Las Vegas for the CES in January, early January. And I also want to remind everybody, don't forget to put on your calendar to come talk to us when our Analyst Day in April at San Ramon, California, where the weather is a lot better than Toronto. Thank you all very much and have a great holiday. Bye. Thank you. This concludes today's call. Thank you for your