Good afternoon, welcome to the BlackBerry T hird Quarter Fiscal Year 2023 R esults Conference Call. My name is Matt, and I will be your conference moderator for today's call. During the presentation, all participants will be in a listen-only mode. We will be facilitating a brief question and answer session towards the end of the conference. Should you need assistance during the call, please signal a conference specialist by pressing star zero. As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Tim Foote, Vice President of BlackBerry Investor Relations. Please go ahead.
Thank you Matt. Good afternoon, and welcome to BlackBerry's third quarter fiscal 2023 earnings conference call. With me on the call today are Executive Chair and Chief Executive Officer, John Chen, and Chief Financial Officer, Steve Rai. After I read our cautionary note regarding forward-looking statements, John will provide a business update, and Steve will review the financial results. We will then open the call for a brief Q&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. These factors include the risk factors that are discussed in the company's annual filings and MD&A. You should not place undue reliance on the company's forward-looking statements. Any forward-looking statements are made only as of today, and the company has no intention and undertakes no obligation to update or revise any of them, 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 results.
For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release published earlier today, which is available on the EDGAR, SEDAR, and blackberry.com websites. With that, I'll turn the call over to John.
Thanks Tim. Good afternoon everyone and thanks for joining the call today. This was a quarter where BlackBerry made good progress based on leading indicators for both the IoT and the Cyber businesses. BlackBerry beat expectation for both total company revenue and earnings per share. On the IoT side, we saw the business performing very strongly, setting yet another records for design phase revenues. The strategic de-decision made over five years ago to position QNX as the trusted foundation for high-performance edge compute, especially in auto, is really bearing fruit. On the Cyber side, in line of what we said last quarter, we saw an improvement in the level of churn that we experienced recently. The investment being made in product and go-to-market continued to drive sequential billings growth in our Cyber business. Let me start my review with the IoT business unit.
As mentioned, it was another strong quarter. Revenue was $51 million, a 19% year-over-year increase. Gross margin was 80%. Pre-production revenue, that is revenue for developer seat, development seats and professional services, set another record. This strength is being driven by significant new design wins. In fact, in the first six months of this fiscal year, BlackBerry added more new royalty backlog than in any prior 12 months period. That momentum continued this past quarter with wins in a number of verticals, but particularly in the safety critical auto ADAS, advanced driver assist, and digital cockpit domain, where we are significantly gaining market share. The largest win in the quarter includes a win with act with Aptiv to use the QNX Hypervisor and RTOS to power a digital cockpit for a European OEM.
Other auto wins include a design with Daimler Truck, an instrument cluster design win with tier one supplier Marelli, for a leading Japanese automaker, and a design with a leading Chinese tier one supplier for an ADAS driver assist module. In the quarter, we secured a total of 24 new design wins, with nine in auto and 15 in the general embedded market or GEM. In GEM, we secured design wins within medical, industrial, as well as defense and aerospace. Among the use cases was an autopilot flight control system, a naval combat system, and a retinal surgery robotics, to name just a few. Looking forward, we continue to see a very strong pipeline of upcoming new designs.
We believe that we're in a strong position to convert this opportunity into wins given our recent success rate. Our very strong reputation in the market, of course, the strength of our technology. The industry-wide macro backdrop for auto remains mixed. We see strength in China and India, both significant markets for QNX. The flip side, we see some tightening in North America and Europe, primarily due to ongoing supply chain and some demand challenges. It is important to give this some context. While production volume is an important factor in QNX total revenue, the auto industry's significant shift to the software-defined vehicle and the development program that drives this has enabled us to deliver double-digit revenue growth. We made a major product announcement for QNX in the cloud.
At the Amazon re:Invent conference, AWS announced that QNX will be made available to system supply developers via their cloud-native virtual engineering workbench. Being able to access QNX in the cloud greatly reduce the time to market for developers and provide significant additional market reach for BlackBerry. QNX will be accessible by AWS large and growing community of over one million developers across multiple verticals, not just auto. We had very positive feedback from both this demonstration and early access product made available to selected OEMs and tier ones. We expect to provide more details on the general availability at CES. Moving now to a new and exciting use cases for our Certicom technology. In the quarter, we deliver a electric vehicle charging station PKI, public key infrastructure solution for a leading North America automotive OEM.
The solution enables the vehicle and EV charging stations to identify and establish trusted connectivity, as well as allowing OEM to meet the new international standard for secure vehicle-to-grid interfaces. These capabilities open a significant opportunity for BlackBerry to secure critical smart city infrastructure in the future. Given the strength of the IoT business going into Q4, we expect revenue to come in at the high end of the range we provided previously. We are therefore now expect our full-year revenue outlook to be in a range of $205 million to $210 million, which translates to 15%-18% year-on-year growth. Let me now move to IVY. Proof of concept trials with customer continue to progress well. Product development also remains on track with the latest version released last week as planned.
We have some significant product demonstration of IVY this past quarter. Last month at the Bosch Connected World in Berlin, the IVY platform was running in a Peugeot car and enabling predictive maintenance, in-car payments, and Amazon Alexa virtual assistant applications. IVY was also shown operating in a cloud at the AWS re:Invent conference in Las Vegas. A developer workshop held there were well attended by OEM and Tier 1s . Feedback from both events was very positive. We also added a new application from Roadside Telematics to the IVY ecosystem this quarter. Roadside Telematics is a California-based startup aiming to use sensor data from BlackBerry IVY to provide automatic notification to 911 emergency service in the event of a crash. Let me now turn to our cybersecurity business. Revenue for the quarter was $106 million.
On the sequential basis, billing increased for the second consecutive quarter to $103 million. Gross margin was 57%. ARR was $313 million. The dollar-based net retention rate was 84%. In line with our comment last quarter, we see signs that investment in product and people are starting to pay off. The rate of churn seen recently has improved this quarter with an uptick in renewal rates, and with it, an improved quarter-over-quarter change in ARR. Turning now a bit to the macro environment. We've seen the same as many other software company, including those in cybersecurity, in noticing some elongation of sales cycles during the past quarters. Therefore, it is likely that the macro environment will be a headwind for the business in the near term.
We're likely to fare better than most, given our heavy skew towards regulated customers, particularly government. Cybersecurity still remains an essential purchase. Touching briefly on the OEM market specifically. This past quarter, industry analysts note an increased adoption of UEM solution in regulated environment. In the quarter, despite the macro challenges, we secure a great number of multi-year transactions than previously. This include both renewals and account expansions. The customer includes some of those with the highest security needs anywhere in the world, such as multiple agency in the U.S. Department of Homeland Security, the U.S. Defense Intelligence Agency, and the National Guard. The U.S. Missile Defense Agency, the Pan-European Missile System company, MBDA, as well as the NATO headquarter, who also approve our BlackBerry Secure Voice solution for official NATO communications.
Also within government were Shared Services Canada, the U.S. Department of Justice, the FBI, the U.S. Department of the Treasury, as well as the U.S. Department of Energy. Outside of the North America, we secured business with the Federal Court of Australia, the government of Iceland, the government of Wales, Police Scotland, and the Federal Ministry of the Interior. In financial services, we did business with Bank of China, Crédit Agricole, Blackstone Investment Management, Singapore DBS Bank, German KfW Bank, as well as the German Federal State Bank. I'll mention that we continue to win in other verticals too, with examples including Johnson & Johnson, a leading law firm, Sullivan & Cromwell, as well as Swiss and ABB, a leading electric equipment manufacturer. Some of you will hopefully have joined us for our security summit at the New York Stock Exchange in October.
During the event, we announced the launch of a cyber threat intelligence subscription services that will provide customer with tailored threat briefings. This service will launch in January. The initial response has been positive, particularly from the government agencies. Turning to outlook. We expect to see improvement in both customer churn and new logo acquisition continuing next quarter. We are not changing our outlook for cyber revenue and billings, but as previously mentioned, Q4 outlooks include some large potential government deals that the team is working hard to close. As always, with larger deal of this nature, timing can be predictable. However, regardless of whether we're able to close these deal in time for Q4 or if they slip in Q1, we expect to deliver a sequential billings growth in the quarter. This would mean sequential billing growth for the third quarter in a row.
What's more, we currently expect to see the value of billings in Q4 exceeding revenue. This is a strong leading indicator. We expect a return to ARR growth in the H2 of next fiscal year. Let me now move to licensing. Revenue in the quarter came in higher than expected at $12 million. Gross margin was 67%. In the quarter, we recognized revenue related to royalties from past licensing deals. They came in stronger than expected. Let me now turn the call over to Steve, who will provide more details on our financials.
Thank you John. As usual, my comments on our financial performance for the third quarter will be in non-GAAP terms unless otherwise noted. Total company revenue for the quarter was $169 million. Total company gross margin was 64%. Operating expenses for the third quarter were $137 million. These non-GAAP operating expenses exclude $56 million fair value gain on the convertible debentures, $22 million in amortization of acquired intangibles, and $8 million in stock compensation expense. BlackBerry remains in a targeted investment mode, meaning our capital allocation strategy is for aggressive investment in our IoT business to capitalize on the strong opportunities we see in front of us there, and for strategic investments in our cybersecurity business to drive both top line growth as well as deliver profitability. These investments are discretionary and can be eased back if required.
This strategy is starting to pay off with IoT winning record levels of new designs and the trajectory of the cyber business improving. Given these investments, we continue to expect manageable EPS loss and cash usage in the near term. The GAAP operating loss for the third quarter was $2 million. The non-GAAP operating loss was $28 million. Turning to the balance sheet and cash flow. Total cash equivalents, and investments were $505 million at November 30th, 2022. Free cash usage in the quarter before accounting for the settlement of a prior legal case was $22 million. That concludes my comments. I'll turn the call back to John.
Okay. All right, thank you Steve. Before we open the line for Q&A, let me recap on the key messages. We are pleased with the progress made. Sorry, because I think Steve had missed a few points in his notes. Anyway, we're pleased with the progress made by both our core business units this quarter. The IoT business unit continues to deliver strong 19% year-over-year revenue growth despite a macro headwind. The cybersecurity business unit trajectory is progressing with improved level of churn and increased in multiyear deals as well as new logos. Finally, a quick update on the IP patent portfolio sale. As we said before, there are two main interested parties. I'm pleased to say that tremendous progress has been made with both of them.
Catapult, who you know, now has a motivated financing partners lined up, and all parties are currently negotiating the final documents. The second party is a large PE firm that doesn't need external financing. They have completed their due diligence and term sheets discussion are well advanced. We obviously will keep you updated as things progress. That concludes my remark. Matt, could you please open the line for Q&A?
Thank you. We will now begin the question and answer session. To ask a question, please press star one on your telephone keypad. Please make sure your line is unmuted. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We request that you limit yourself to one question and one follow-up. Our first question will come from Luke Junk with Baird. Please go ahead.
Hi.
Good afternoon. Thanks for taking the question. a couple questions related to the IoT business. First, John, if you could get any additional color on the subcomponents of your auto software business and IoT. Specifically, if there's anything you'd be able to add on the pre-production parts of that business, of course, but also be interested in any commentary on royalty trends looking forward and how that might lay out over the next few quarters or into next year in terms of launch activity that you have a line of sight to in that business. Thank you.
It didn't come across clearly.
Um, so.
Luke?
Yeah. This is Luke from Baird. Breaking down IoT revenue, where you've obviously said that the pre-production piece is at record levels. Any other comments? I'm guessing around royalties.
I could tell you a typical year. What a typical year, a typical quarter or year actually, in it. Our general guideline is about 40% of our revenue coming from royalty, 40% coming from developers, seats as well, professionals. Sorry, and then 20% come from all, come from services. That's kind of our rule of thumb. That's it didn't come across very clear on the microphone, so Luke, sorry about it. If you could.
Perhaps the question, Luke, if I could rephrase, is there any color on royalties given the strength that we've seen in design phase, the pre-production phase?
Well, I mean, royalty is pretty much tied to production. The industry auto production, basically, we're proportionally about the same. Meaning that, we expect, what? 85 million cars being built this year. It's a little probably about 10%-15% down from previous pre-COVID years. That gives you some guideline of what the royalty is like.
I'll just leave it there, given the bad connection, and take it offline. Thank you.
Our next question will come from Mike Walkley with Canaccord Genuity. Please go ahead.
Hi Mike.
Hey John. Just maybe a follow-up on the IoT question. Just based on, you know, some of the record level you're seeing for the design phase revenue, and particularly in ADAS. You know, as these cars go into production in future years, you know, how should investors think about maybe the magnitude of royalty per car versus, you know, current infotainment system today?
Yeah. That's a good question. The ARPU, which is you asking basically the ARPU questions. You know, our targeted ARPU remains to be $25 a car. Of course, we're quite a big distance from it. However, if you look at the infotainment world, the infotainment world now down to probably $1-$2 a car. On the other hand, you know, ADAS is probably pushing high single-digit dollars, $8, $9, $7, $8, $9. That's how. Any newer features, you know, cockpit, clusters, you know, vehicle-to-vehicle communications and stuff, they all have reasonable dollar amount tied to it. Certainly, a factor above the infotainment.
Great. That's helpful. My follow-up question just on the cybersecurity business and, you know, more maybe the endpoint and competitive landscape. You know, I know there's share for Cylance to gain from like the McAfee, Trend Micro, but you know, there's several next generation competitors that are pretty price aggressive and they're also talking about elongated deal cycles. Could you kinda update us on what you're seeing and what's giving you that confidence to return to ARR growth in the H2 of next year?
Yeah. We have a pretty elaborate model and spreadsheets between the Cyber business units and the finance organization of the company. It looks like that, you know, returning to ARR H2 of next year is quite real. I mean, ARR growth, sorry. Year-over-year ARR growth for H2 of next year. Probably pretty stable in the H1. That's obviously based on the pipeline we have today. You know, we factor in a little bit of the push out, and then of course, the renewal of some of, you know, the government contract. One of our challenges is, we have so many government contracts, and they typically buy on an annual basis, because that's all the budgets they have, and they can only spend what they have approved budgets on.
That's one thing that we faces. On the other hand, the good news in there is that the government customers are quite steady and stable, and their buying patterns are pretty steady also.
Great. Thanks. Maybe one last question, I'll pass the line. John, just your thoughts on the macro environment heading into next year. You guys have ample cash on the balance sheet, if you end up selling the Licensing businesses should have more cash on the balance sheet. As you look into a challenging macro, how are you guys thinking about balancing investment for growth versus, you know, preserving free cash flow?
Good questions. Where we are right now, and you listen to what Steve had outlined it, we are in a kind of a very careful investment mode. In IoT, we are definitely investing and hiring. We are winning a lot of the deals, I wouldn't say all the deals, but a majority of the deals, particularly in the ADAS world, and the cockpit world, in the hypervisor world. We believe the momentum, you know, the kind of the tailwind is there for us, and we wanted to capture it. We will be hiring engineers, we'll be hiring professional services people, we're expanding our sales force, pilot programs and everything else.
On the cyber side, you know, John Giamatteo is balancing the growth of the ARR or, and, and the billings, balancing that with the profitability. The investment there will still be there, but probably it'll be a little slower, and with an eye to the bottom line, given the uncertainty of the macro, as you pointed out. It's kind of a little bit of a tale of two city here. One is just keep growing, because we got the momentum, and the other one is we want to do a more balancing, more guarded growth.
Great. That makes sense. Thanks for taking my questions and happy holidays to everybody on the call.
Yes. Thank you.
That's cool.
Same to you.
Our next question will come from Todd Coupland with CIBC. Please go ahead.
Hi Todd.
Hey there John. Good evening.
Good evening.
Can you hear me okay?
Yeah.
All right. Sounds like the CIBC internet mic is working fine. I wanted to ask you about first on the cyber business. You're basically saying flat year-over-year in the H1 with some growth in the H2. How much more work is needed to bring the updated sales team and whatever other new product bundles you're contemplating to actually get to those ranges that you're talking about?
I think we are net growing the sales force, meaning that our sales force size is increasing modestly. So we don't have to have any mysterious program or a very aggressive program of some sort in order to achieve what I just said. I think, you know, we all feel pretty comfortable and the Cybersecurity Business Unit feel comfortable. They'll be able to be flattish in the H1. Only reason that that is flattish, by the way, as a reminder, we were expecting growth in the past for the H1. It's because of the so-called elongating sales cycle. So we expect it to be flattish for 6 months and then pick up again. That's really a lot more macro-driven rather than us having to do some special things.
By and large, I mean, we have a roadmap of technology, none of the stuff that I talk about depending on a particular product. Think the products are in pretty good shape. We do need to continue to drive the channel, continue to increase the professional services, particularly the MSP. I think those are the two things that needs to happen, it's part of our plan to make happen anyway. Nothing really special.
Okay. That's helpful. I had a question on, I guess, the movements on the balance sheet. I think in the past, the price for the patent licensing business was $600 million. Does that potentially change if the second party comes in? Like, if they get into the mix here, is the takeaway that you're gonna get to $600 or possibly higher? Or is it just they get there first and they can close the deal? What's the message on that?
I'm sorry, I shouldn't comment on it. I know the questions and I understand. Of course, I have the answer, but that's when unfair to both parties while we're negotiating in parallel. If you don't mind, just hold off for that until we made the announcement. I'm expecting the announcement or the conclusion of this relatively soon.
I see. The takeaway is that the confidence level with the second party has gone up from the last time we talked about this, where financing was in question, to where the probability of getting that $600 million has gone up materially with that and then the other, the initial party getting financing. Is that?
Yes.
Is that the message?
The, a gain, I can't go into the structure, but the initial party, the confidence level had, you're right, had dramatically gone up.
Okay. Should we take away, given the delay and the two parties here, that the structure that was announced before is potentially open to some adjustments?
Very minor.
I see. Okay. Okay. Just sort of one follow-up balance sheet question. One of the debentures is due in about a year. Any messaging on paying it down versus refinancing at this point?
I think we're gonna pay it down.
The message is pay that down? Okay. All right, great. Thanks very much.
Sure.
Our next question will come from Trip Chowdhry with Global Equities Research. Please go ahead.
Hi Trip.
Hello. This is still a very good quarter considering the backdrop. Two questions I have. Whenever we are in a recession, the federal government usually opens up their budget. The budgets increase.
Mm-hmm.
To offset the collapse of the economy. Have you seen any federal government agency or across the globe who may have at least not reduced their budgets and may be thinking of increasing their budgets yet, or you haven't seen anything like that so far?
Well, it's a mixed bag, Trip. As far as cyber investment, I have not seen government back away from it. Particularly the government that we deal with, which is probably about G7, G25, depending on the level that we're at. Five Eyes country, for example. No, we have not seen the budget being cut or reduced in IT spending and cyber spending, so that's good news. There are some very selective pockets. NATO spending a little bit more. Germany is spending a lot more from an IT defense point of view. Canadian government also spend more in supporting Ukraine, for example. U.S., the money are there, a little bit more driven towards the more social program. It's kind of a.
I can't give you a yes or no answer. It kind of depends on the various government that we're keeping very close tab with. And on the overall scale, I haven't seen the government reduce their IT budget yet.
Very good. second question, as, we are seeing a lot of new vehicles coming into the market, and each one of them have at least two or three features. One, either the screens are really very big in the vehicle or they have multiple screens. Do you think that changes the royalty stream for you? Like if a vehicle, say, just three years, four years back only had 1 tiny screen, now on an average, there are three or four screens, front entertainment, rear seat entertainment, overhead entertainment, you name it.
Mm-hmm.
Video conferencing, just that. Do you think there is a potential to increase some royalties because of the multi-screen approach that is new, at least EV manufacturers are bringing to the market? That's all from me.
I mean.
Happy holidays to all of you.
Thank you Trip. Happy holidays to you too. I don't believe. I mean, I don't know. I multi-screen will bring me more copies. However, there is a trend in software-defined vehicle, either for redundancy purposes or multi MPU purposes, particularly as the capacity requirement goes up, they are using more copies of QNX.
Very good.
It is more of an architectural point rather than a display point.
I got it, I got it. I got it. Very nice.
Thank you.
From the same token, I think if we go from 5G- 6G, the royalty stream, because of more use cases and more QNX copies and redundancy and resiliency, we may directionally see per vehicle royalties to directionally go up rather than go down.
Oh, yeah. I don't see, I mean, there are two points to it. Number one, we have not seen the royalty of QNX gonna go down at any time soon. In fact, more copy expected per car and it should... The revenue should go up. In addition to that, don't forget we have IVY behind it, which are when the capacity grows, goes up, you know, our usage of IVY also goes up. Wait till that get into production, then I'm hopeful that that will bring us also a good revenue stream.
Excellent. Excellent. Thank you very much. We look forward to seeing you all at the CES conference.
Thank you.
Our next question will come from Paul Treiber with RBC Capital Markets. Please go ahead.
Hi Paul.
Hello. Hi there John.
Yeah.
Just hoping you can speak to, on the cyber business, the mechanics around NDR, you know, which declined sequentially versus your comment on improved churn. You know, can you speak to some of the moving parts there? Then specifically, can you break out churn or the trends there in terms of UEM versus EPP?
Good question. In general, as we have indicated in the beginning of the year, the churn is coming from the UEM base, small, medium enterprise. We have seen that as a consistent scheme or consistent theme, but that has slowed down now quite a bit. Or at least the last quarter we have seen a slowing. In fact, we are seeing the bigger deal going a little bit more multi-year with us. I think UEM is now definitely stabilized. It's also being viewed more strategic by the market. Gartner actually recently wrote a note on it, and we are seeing the same thing.
Customers are starting to see to treat UEM rather than a price item, it's now starting to look at it a little bit more strategically, particularly on the cybersecurity side, as a factor of the cybersecurity. The last quarter, something have happened that causes the infrastructure, mobile infrastructure's management and endpoint management to be re-looked at in importance. You probably know this obviously. A number of banks in the United States has been fined for using, you know, messaging technology that are not the most secure or archivable. I think that forces all the bank CIOs starting to look at the completeness of their infrastructure. Obviously the UEM is a technology that been around for a long time. This is not just BlackBerry UEM, you know, other established player UEM also obviously.
I'm answering your question in a kind of a long roundabout way. The churn slowed down, still kind of contained within the SMB and the UEM space. As I said, we see a slowdown. We haven't seen it anywhere else. We definitely have not seen it on EPP. EPP seems to be holding its own.
That's helpful to understand that. Just on your point about the settlement with the banks. I mean, does it seem like when you look at banking or regulated industries, it seems like there's a shift away from bring your own device to corporate-owned devices?
Mm.
Do you see that in other industries other than just banking? You know, how do you see that, you know, relatively speaking, helping BlackBerry from a product positioning or from a competitive position?
When the banks goes to corporate issued, they are typically looking at high level of security and archivability, and that's where our strength comes in. We're known to be the most secure mobile platform that exists. I think there's not a lot of debates over that in the industry. That help us a lot. As far as I'm seeing in the industry, maybe different government branches and law enforcement. I have not seen other major verticals that go to corporate issue device, or at least swing back from a BYOD to a corporate issue devices.
Okay. Thank you for taking the questions. Happy holidays.
Sure.
I would like to turn the call back over to John Chen, Executive Chair and CEO of BlackBerry, for closing remarks.
Okay. Well, thank you. Thank you, operator. As we pointed out, BlackBerry will be at CES in Las Vegas, where we'll have a number of exciting announcement and demonstration for our IoT business, including the IVY running in a Jeep Cherokee. On the 5th of January, BlackBerry will be co-hosting a software-defined vehicle award with MotorTrend, a leading auto industry analyst. In fact, if you guys wanna get in there, I don't know whether we could have tickets, but please contact Tim. There's a big event on the 5th evening in Vegas. The award recognize those who have made outstanding contributions to the automotive industry through software. I know there has been a 19 award.
The following day, by the way, which is the 6th, at 1:00 P.M. Pacific Time, we will be hosting a hybrid investor Q&A session with management at the booth. This event will be streamed, and investor will be able to hear details about the exciting new developments. Please make sure you register for the stream on blackberry.com/investor webpage. Thank you all again for joining us today's call, especially those of you on the East Coast, where I know it's getting late. I hope all of you and family have a happy and safe holidays. See you next year.
This concludes today's call. Thank you for your participation. You may now disconnect.