Earnings Call: Q2 2020

Apr 30, 2020

Please stand by. Good day, and welcome to the Mitek Systems Second Quarter Fiscal 2020 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Todd Curley, MKR Group. Please go ahead, sir. Thank you, operator. Good afternoon, and welcome to Mitek's second quarter fiscal 2020 earnings conference call. With me on today's call are Mitek's CEO, Max Carnekia and CFO, Jeff Davidson. Before I turn the call over to Max and Jeff, I'd like to cover a few quick items. This afternoon, my tech issued a press release announcing its 2nd quarter fiscal 2020 financial results. That release is available on the me's website at mytechsystem.com. This call is being broadcast live over the internet for all interested parties, and the webcast will be archived on the Investor Relations page of the company's website. I wanna remind everyone that on today's call, management will discuss certain factors that are likely to influence, the business going forward. Any factors discussed today that are not historical facts, particularly comments regarding our long term prospects and market opportunities should be considered forward looking statements. These forward looking statements may include comments about the company's plans and expectations of future performance. Forward looking statements are subject to a number of risks and uncertainties which could cause actual results to differ materially. We encourage all of our listeners to review our SEC filings, including our most recent ten k and ten q for a complete description of these risks. Our statements on the call today are made as of April 30th, 2020, and the company undertakes no obligation to revise or update publicly any of the forward looking statements contained herein, whether as a result of new information, future events, changes in expectations, or otherwise. Additionally, throughout this call, we'll be discussing certain non GAAP financial measures. Today's earnings release and the related current report on Form 8 K describe the differences between our non GAAP and GAAP reporting and present the reconciliation between the 2 for the periods reported in the release. With that said, I'll now turn the call over to Mitek's CEO, Max. Thanks, Todd. Good afternoon, everyone. You for joining us today. Jumping right in, as the COVID 19 pandemic continues to unfold, our foremost commitment is to ensure the health and well-being of our employees, their families, and our worldwide community. As such, we have taken all necessary measures to maintain the continuity of our operations and to safely operate at full strength while complying with government mandated stay at home directives. As a modern digital business, we were able to pivot to work from home within one day, and all of our team members continue to be highly effective MyTech is steadfast in our commitment to empower trust and convenience in a digital world. Our identity experts are working 24 by 7 around the globe to ensure that more businesses are enabled to transact that digitally and secure their platforms through easy, fast, and secure identity verification. We've increased human capacity to ensure more agents are available in more locations to support the increasing volumes for high assurance identity verification. We are also partnering with financial institutions as well as the Federal Reserve here in the US to expand usage of mobile check deposit amongst consumers. To sum it up, Our cloud first technology provides a secure environment for both existing and new customers, and now more than ever, our enterprise class expertise products and services are being leveraged. $23,200,000, representing growth of 16 $4,000,000 or $0.13 per diluted share, up 98% year over year and cash flow from operations was $3,200,000. During the quarter we continued to see ongoing positive momentum in the identity verification market. We expanded with our existing customers, particularly in the gig economy segment, and our identity verification solution continues to gain traction with our transactional SaaS revenue growing 38% year over year. We also continue to experience growth from our highly profitable deposits product line with adoption and utilization continuing to increase. While the current environment is certainly challenging and uncertain, The need for fast, secure remote services is magnified. And regardless of where our customers were in their digital transformation journey, The time is now to accelerate. Providing secure digital identity verification isn't just a question of convenience during COVID 19. It's become a necessity for organizations making this urgent shift to digital. Identity verification is the essential digital use case, enabling businesses to onboard more good customers faster in this vital environment. As such, several of our customers escalated their transaction volumes during the quarter. Specifically in the gig economy sector, we saw significant spikes from our home delivery customers. Almost overnight, they went from being a convenience to serving as a lifeline for millions of people following stay at home orders to slow the spread of COVID 19. Now more in demand than ever, my tech is helping these customers bring new shoppers safely on board to meet the increase in demand. 1 of our customers in Europe who is a leading provider of digital identities also experienced exponential growth in traffic volumes due to their service being the gateway to access government services such as COVID 19 benefits. Increased demand for online banking as well as insurance and lending also contributed to transactional growth in the quarter. At the same time, we saw a slowdown in travel and hospitality sectors, with slower than normal transaction volumes as a result of the pandemic. As we look forward from a revenue perspective, we are currently receiving a benefit in our identity business from some of our existing customers who are experiencing significantly more traffic as a result of the current environment. But at this point, it is impossible to predict what impact COVID 19 will have on our current customers and our pipeline of potential new customers. These are serious times and there are a large swath of the economy that are being affected and our customers are not excluded. Near term, it may be a bumpy road as we weather the economy, but internally, we are continuing to focus on execution. We are not pulling back on our investments to grow our business. It is more important now than ever to companies looking to digitize their businesses. However, we are proceeding cautiously to preserve our business, our bottom line, and our resources. Turning to our deposit solutions, If there ever was a time when mobile check deposit was essential, it is now. As the economic impact payment checks begin to circulate consumers will use mobile check deposits many for the very first time. This use case may even be a can catalyst for digital or mobile banking adoption. Banks are investing significant resources to enable their customers through mobile and digital channels, And as they do this, mobile check deposit continues to increase. We remain the clear leader in this regard with over 7000 financial organizations using our products. We are proud of our mobile deposit offering and its ability to assist people in this time of need. As I noted last quarter, USAA filed a lost 2 lawsuits in Texas against Wells Fargo for patent infringement related to remote deposit systems. And the juries in those cases returned verdicts in favor of USAA. The court is still considering post trial motions in those cases that could overturn the verdicts or result in new trials. In the event Wells Fargo is unsuccessful in overturning the verdicts or obtaining new trials, the two cases will be to appeal to the US Court of Appeals for the Federal Circuit. In addition, the US Patent Office is currently reviewing the validity of several of the patents at issue in the Wells Fargo cases. Final resolution of those issues may be over a year away. Also, as I noted last quarter, my tech filed an action in California seeking declaratory relief that Mitek's products do not infringe the patented issued in the Wells Fargo and the 1st Wells Fargo's lawsuit. In January, USAA filed a motion to dismiss or transfer our action to the Eastern District of Texas, and we opposed that motion. Recently, the California court ruled that this action should be heard in Eastern District of Texas. As such, we intend to vigorously prosecute our case in this new venue as Mitek invented all of its core technology, and we believe our products do not infringe on any USAA patents. Today, we are we also filed a petition with the US patent office, challenging the validity of the only patent debt issue in the 1st Wells Fargo lawsuit that is not already subject to challenge filed by Wells Fargo. We expect a preliminary decision on whether this challenge will be instituted in about 6 months. In closing, we are pleased with our results, which include record revenue and significantly improved profitability. I'm proud to lead the Mitek workforce who have rallied without questions to deliver the technology, products, and services that customers need and value during these extraordinary times. This is a seminal moment that Mitek has been created to enable. We have the teams, the vision, the technology, and a market need of a solution that Mitek is uniquely positioned to deliver. Together, this amounts to a significant opportunity for our employees and shareholders. Now I'll turn the call over to Jeff to discuss the financial results in more detail. Following Jeff's remarks, we'll open the call up to questions. Jeff, please go ahead. Thanks, Max, and thank you everyone for joining us this afternoon. Let's start with the Q2 revenue and operating results. For the second quarter of fiscal 2020, Mitek generated record q 2 revenue of 23,200,000 a 16% increase year over year. Software and hardware revenue was $11,500,000, an increase of 8% year over year. Services and other revenue, which includes transactional fast revenue, maintenance, and consulting services, was $11,700,000 for the quarter, an increase of 25% over Q2 last year. This increase is due to growth in transactional SaaS revenue, which increased 38% year over year, $7,400,000. For Q2, deposits revenue increased 13 percent to $14,600,000 and revenue for identity verification increased 21 percent to $8,600,000. We delivered strong software and hardware gross margins of 92 percent for the quarter. Gross margin on services and other revenue was 80% for the quarter, up from 78% in Q2 last year. Total gross margin for the quarter was 86%, up from 85% last year. Total GAAP operating expenses, including cost of revenue, were $22,100,000 compared to $21,600,000 in Q2 last year. This increase is primarily due to investments in operations to grow expenses in our Paris operations as a result of the restructuring announced in July 2019, and a decline in acquisition related costs and expenses. Sales and marketing expenses for the quarter were 7 R and D expenses were $4,800,000 compared to $5,300,000 last year. And our G and A expenses were $5,200,000 compared to $4,800,000 a year ago. GAAP net income for the quarter was 900,000 or $0.02 per diluted share. Our diluted share count was 42,000,000 shares compared to 38,900,000 shares a year ago. As a reminder, our earnings release includes a reconciliation between GAAP and non GAAP net income. We believe non GAAP net income provides a useful measure of the company's operating results by excluding acquisition related costs and expenses, stock comp expense, litigation expenses, and the related tax impacts of these items. Non GAAP net income for Q2 increased to $5,400,000 or $0.13 per diluted share compared to $2,700,000 or $0.07 a year ago. Our non GAAP adjustments included 2,300,000 of stock comp expense, 1,600,000 of acquisition related costs and expenses, and 561,000 of litigation expenses for the quarter. Turning to the balance sheet. We generated $3,200,000 in cash flow from operations during the quarter, bringing our total cash and investments to $42,500,000 at March 31st. Our accounts receivable balance of $13,700,000 represents a DSO of 52 days. As part of the share buyback program we announced in December, we repurchased approximately 137,000 shares during the quarter at an average purchase price of $7.33 per share. This leads roughly $9,000,000 remaining of the $10,000,000 buyback program which runs through December 2020. Given the current global pandemic, our board is opted to put the repurchase activity on hold for the time being. Now moving to guidance for the remainder of fiscal 2020. Mitek is withdrawing its previously provided guidance for this fiscal year ending September 30, 2020 due to the uncertainty of the full impact of the COVID-nineteen pandemic on the economy, our customers and provide. Operator, that concludes our remarks. And our first question is from Mike Grondahl with North Northland Securities. Please go ahead. Yeah. Thanks guys and congratulations on the quarter. Could you talk a little bit about the new customer funnel for mobile ID and kind of what you're seeing there? In this environment? Hey, Mike. It's Max. Yeah, thanks for the positive comments. Yeah, I think we we've been building that pipeline, for the six quarters I've been with the business. We've been retooling a number of things within the organization and the go to market is a big part of that, both our message, how we position, and then in the course of the last 3 or 4 quarters as as, you know, those efforts have taken root. We've made a lot of, additions to the team. Team, you know, powerful additions to the team by way of personnel, providing their new sales leaders at the beginning of the calendar year this year. For the Identity U. S. Business, really made some big strides in Europe, about half of our Identity business comes from the EU. So in in that regard, I feel good about the opportunities. I think the unknown and one of the things you heard in Jeff's remarks there is, you know, just what does this mean? What is the pandemic and the shutdown and just the slowdown in overall consumer spending and big unemployment numbers that we're seeing? What does this mean? To those opportunities and more importantly to the businesses that we have with those opportunities. So I don't know if that provides the color you're looking for, but that's probably as smart as we are far into it. Got it. And, in the mobile ID business, How much of that would you say is online? And what piece of it is sort of offline? At a physical location. Have you broken that Could you pull on that a little bit? Sure. With your mobile ID product, how much of it could be done from someone's living room go into a physical store and use Well, it's, it could be 100 100% done remotely, right, from a mobile device? We do have use cases, let's give you an example, a bank, a retail bank location, a branch, where when you set up an account, typically you provide your documents and they take your documents and make some of that But that's a very, very small part of our business. The overwhelming majority of the use cases, both the current transaction volumes that we're seeing as well as the pipeline we just talked about over 95 percent of those use cases are wrapped around the idea that you're doing that remotely? Got it. Okay. Thank you. And our next question is from BRAVEN Suri With William Blair. Please go ahead. Hey, guys. Can you hear me okay? Yeah. Great. Thanks for taking my question and, a nice job. I guess I just wanna touch a little bit on on the current environment. We've obviously seen, through conversations with CIO that it's gonna accelerate, especially coming out of it, the idea of digital transformation, things like that. But but you're kind of at the forefront of some of this, right? So if you think about mobile check deposit, and the idea of, doing this remotely, you think for all sorts of processes, whether it's stuff with DocuSign or things like that. I guess I'd love to understand sort of how those conversations are progressing. You talk a little bit about pipeline, but a little more color in terms of sort of what do you think this is going to drive transformation in your go to market, especially with a new, SUV of sales? Yeah. Sure. I think it's, you know, trying to strike the balance between what you're pointing out, Revan, which is, you know, if you're a bank and you don't have if you don't have the ability to onboard new customers through a mobile device or digitally, expecting somebody to come down to a branch today is just it's not impossible, but it's highly unlikely. And I'll use a couple of examples. Awesome. We're balancing that against, you know, these, you know, what's happening with the economy, what is that, what is that due to folks? How much credit card use is there going to be in short term? How much buying is there going to be, remotely. So kind of back to your question, in this current relevant example I can use is when you think about Italy and just being kind of the center of the storm, you know, a month ago, and we we've got customers in Italy that banking customers in the lawn and, the folks who have basically signed up that are in the middle of implementation. And we were being urged by those customers and our partners, the implementation partners we have to help accelerate those implementations because there was absolutely no way because the lockdown was so severe. There was no way is no way for Italian Banking to go to a branch. And so the ability to actually use mobile verify, to to validate somebody's identity, even if they're an existing customer, with somebody like a a buddy bank, you know, just the ability for them to, you know, validate a transaction over a certain threshold of euros Right? The transaction over a a €1000, you're gonna do another revalidation using the government issued identity cards. Those are the examples of the acceleration, just a simple one in a really hot zone relative to the pandemic. Jeff, anything you'd add to that? You know, all I'd add is, you know, the way I view this longer term, this just really reinforces the need and for us opportunity for identification services for every business that needs to transact digitally. So longer term, this is you know, all, beneficial to to what my tech's trying to do. Near term, obviously, there's gonna be bumps as, you know, companies, whether they were in our pipeline or, you know, looking to to do something figure out the impact of the pandemic on their business and what kind of projects they're able to take forward. The great thing is everything we're delivering well, most of everything we deliver, I think, is towards helping companies get more revenue and sign up more customers. So it's, you know, it's important for businesses to be able to do that. It's all good things in in favor of identity. Verification. So maybe let me ask a more direct question, and Jeff, you know me along that nicely know me well. I guess I'm surprised you wouldn't see an acceleration in the business given people have got stimulus checks that are, you know, some are being deposed directly, but there's there's a whole bunch of checks being cut. There's more stuff being signed electronically. There's more of these sort of online transactions. And so help me reconcile that idea. And I understand people are making decisions slowly, but but you're embedded in 3000 plus banks. Those banks are seeing more check deposits, etcetera. And then, obviously, you've got sort of a recurring business that's growing nicely. But you pull guidance. So so put those together, or if you if you just help me clarify that, that'd be really helpful. Yeah. So I'll take on the identity, and then I'll let, Jeff talk about the deposits a little bit to where the check model works there. I think, you know, everything you just said, Bhavan, is is a 100% correct. I think that's a great hypothesis and now it's just a matter of when does that hypothesis play out? Does does that take, you know, 30 days? Does that take 3 months? Does that take 9 months for us to to get to that place. And, you know, we're bullish, and optimistic that it'll be sooner than later, but just in the last 45 days and completely, you know, their mind boggling is to, the rate of change things took place without absolute zero visibility as to what was happening. On the identity side, yes, we're watching these these projects accelerate. Some of the examples I just used. I can come back and let let Jeff talk about deposits, but you're also doing that into the piece of huge unemployment claims and the bottom falling out of the economy at least for some period of time. I think we're we're trying to balance being responsible with, you know, the optimism we have for the longer term wind in the sales that this ultimately helps, you know, helps accelerate. Jeff, why don't you talk about the deposits a little bit? Yeah. On the deposit side, we definitely expect to see an increase of volume usage due to the, or the government checks that'll be sent out or or being sent out. That definitely will flow through the network. But, you know, Bhavan, keep in mind the way that whole business works, right? The all of our customers purchase upfront large blocks. And so the usage will need to flow through that, but then I imagine they'll come back and be repurchasing. Probably we'll see some of that repurchases come sooner. So that's definitely favorable for our business. You know, it it is a one we hopefully it's a one time thing that the government issued issuing all these checks. But that's a, that'll be a one time thing that we will definitely benefit from. On the other hand, you know, during this, you know, troubling economy, there's probably gonna be a decline in checks that are written. Just due to people having less money, but also there'll be less payroll checks due to unemployment. So there's kind of a balance there We expect, you know, real positive on on deposit usage, but there are other factors in there as well. Got it. No. That's really helpful. One last one for me. Just you're expecting a ruling on a debt collector judgment could say Northern California, Texas. Just love to understand how that's going and when we expect the update. Has the time find for the legal stuff being extended because of COVID and kind of maybe an update on Milestone. So I I know there's a couple of questions buried in there, but sort of an update on the process this COVID extended and then sort of milestones that us and investors should be Okay. So the the next milestone obviously is this, this CJ action that's that's now going to be, contended in the Eastern district. From a timing perspective, I think it's it's natural to have expected that over the course of the last 45, 60 days. Days. The wheels of justice that normally grind along, it's probably a little slower just because of, or everything we've already talked about and we're all experiencing personally, but, it hasn't stopped. And so the timeline remains largely the same. Gotcha. Thank you guys. I appreciate it. Please go ahead. Hi, thank you for taking my question. Max, starting with you, you know, I apologize. I jumped on the call a little bit late. So, you may have covered this in your earlier prepared remarks. I was wondering if you just review what the company is doing The COVID, disruptions. Hey, Mark. From a cost containment perspective, I think we're being conservative expect in the course of the next month 2 or 3. But from From a spend perspective, well, I think we're being judicious and we've hopefully established our reputation as good stewards. We're not pulling anything back. You know, we were able to We said in the beginning of the call, we were able we're a modern digital business. Every ops. We've been highly secure VPN environment. We've been We announced work from home. The next, you know, people took their laptops, you know, You know, went home and the next day got up and went to work, you know, at my kitchen table. And continue to be conservative both in the We continue to invest and we continue to grow, both sides of this business. Jeff, anything you'd add to that? In this work from home environment? With respect to the sales organization and ID, has there been a shift in focus getting your existing customers to buy more of your more of your product, more of your solutions? Yes, I wouldn't refer to that as a shift In focus, I think we actually have a dual focus at the beginning of our fiscal year. Split the team. We basically took what had been a all purpose go to market team and separated, you know, kind of new business from expansion within the hundreds of customers that we have on the identity side. And I think that was a natural outgrowth of on the tier 1 and tier 2 existing customers and announced we had in the in the select segments of the market for new identity that we've been after and those those segments are the financial services It's a natural progression for us, natural evolution for us. Okay, great. And then, Jeff, bringing you into here. Despite operating margins being up significantly year over year, cash flow from operations was down this quarter. I was just wondering if you could run through some of the puts and takes in cash flow this quarter. Sure. I guess the most unusual thing in the quarter for cash is we spent about a $1,000,000 on a stock repurchase. But other than that, the changes, you know, affecting the cash flow from operations number are really just, accounts receivable a little higher at the end of the quarter and we pay down to payables. So, nothing going on in there other than just minor working capital changes, really. And then that's the buyback, which I don't know if you caught that on the call. Okay. Great. Thank you. That's all for me. Thanks. And our next question comes from Allen Klee with National Securities Corporation. Please go ahead. Yes. Hi. My first question was, I just wasn't sure if I caught something right. When you talked about what the revenue growth rates were for identity verification. And then for, deposit imaging, did I thought I heard 21% in 13%. Were were those the numbers? Yeah. That's correct. Deposits was up 13% and ID was up 21%. Okay. Wonderful. Then Do you have a general sense of what percent of your revenue revenue you get from segments that that that are, kind of what you pointed to, like hospitality and travel and any other areas that are the kind of the obvious ones of, that might get impacted? You know, we don't publicly break that out. I would say our exposure to travel and hospitality lower side, we have a couple of customers that are of nice size, but we don't have of like numerous customers. Travel and hospitality. We've we've spoken to you before about Airbnb being a customer of ours and As you can imagine, their business, you know, I'm took a pretty big that would have probably been the biggest impact for us there. It would have been the transactions. I think Alan, just to add on to what Jeff's saying, We did that acquisition of ICar 3 or 4 years ago, and that's that hardware line you see in our income statement and most of that hardware in the Mediterranean. And I don't know those numbers off the top of my head, Jeff. They're Yeah. There is exposure there as well. They're they're used in those house. If you look at your business of, like, how it's been doing in April compared to March. What can you tell us? Our q 2 results, and I don't think we're gonna sit here and try to pontificate. Provide information around what's happening in April. We'll do that in our Q3 earnings. Okay. It is and then my last question is On the checking side, you you talked about kind of some of the pluses and minuses. Can you give us a sense of maybe what percent of the revenues in that segment come from payroll checks? I actually have more deposited, but we don't really see you know, if they're payroll checks or if they're small business or if they're large business, any of those things. And I really couldn't answer that one for you. And as a reminder, That is star 1. If you would like to with Roth Capital Partners, please go ahead. On the check volume side, you maybe have some takes, but what's kind of the trend work, maybe in April, you know, versus March. Is that trend still increasing. Second question, has been a massive shift to everything ecommerce. And so I'm curious actually benefits, amongst kind of the ecommerce Is it more on the logistics side? I need an Instacartes of the world, and or are there new opportunities like any Commerce, the reason I asked that is, you know, it's very hard to get a a new cell phone now popping up for you. 3. Usually, I think you gave the number of new ID customers. I'm curious if you have that people may be more reticent to wanna go to ATMs now. So I'm questions. Is there more of an accelerant in conversations that we need to have some of these solutions now in terms of you know, opening up accounts and then doing everything remotely as opposed to seeing the ATM as a as a channel for, transacting. An object. Do you wanna take on the check trends first? Sure. I don't have a complete month yet of check reporting. So I I couldn't really comment about April there. And, JES is, you know, when I look at the checks that were reported in in q 2, it was, you know, usage as we expected in the low teens, like we've been talking about. You know, I really don't know how to predict how many of the government checks will be issued in check form versus direct deposit. You know, we've our team has worked with the Federal Reserve to make sure that the format of the check that they're working. It's gonna work well with mobile deposit. You know? So we're really, you know, looking forward to seeing what comes from that, but I really can't forecast anything on that right now. And and as of April, I have no no way to tell you. Let's see what else is on the ATMs. You know, I don't know that ATMs necessarily impact unless I'm not thinking along the lines you are, but they impact identity. You know, most most of our conversations are know, you don't wanna you can't go to a branch now to deposit a check. Nobody wants to touch an ATM. So the best option is mobile deposit. So It's another thing that's in favor of, you know, encouraging people to use mobile banking, mobile deposit. We think we'll users who haven't done it before. And so we think that that's gonna contribute to, you know, just continued increased adoption by consumers of mobile deposits. So again, favorable, but, you know, being 6 weeks into the pandemic, it's really hard for us to forecast anything, this early. But we do we do feel that it's going to be very positive for the mobile deposit business. Yeah. Likewise, if I pick up on the questions that are more identity related. I think, Darren, right now, what we've seen kind of since the middle of March, maybe even little earlier in March is, more of the reaction to this crisis, what started as a health crisis, which now turned into a global economic crisis. And, you know, the things that we're seeing where volumes are really going up are exactly that, right? The shopping providers, you mentioned mobile phones and Asurion is a good customer, great customer for us in making phone claims if your phone is destroyed or not working or you lose your phone, that kind of thing. We're seeing those volumes increase, got a European customer that basically does identity verification for the UK government for, government services like unemployment, filing. And so, you know, what's another example in the financial services, all those PPP loans, I mean, we we we process thousands of transactions from small mom and pop shops you know, that didn't have merchant banking services when they were filing for PPP loans, which, you know, we're now seeing the second wave of net start spark up based on the increased funding in that program, the SBA. Those are the kinds of examples we've seen so much so far. And I would refer to that as the reaction stage, hopefully, optimistically over the course of the next month or 2. Hopefully, we start get to the place where we start to see the recovery mode. And I think that's back to your some of the questions that we're asked by some of your colleagues and and where you were alluding to for ecommerce and digitization, you know, who wants to go down to a bank and apply for a credit card or apply for a new account. That's just that's a dirty place with a lot of germs and potentially having viruses, right? And, you know, I think we're, I use the example of Italian Banks, but we're seeing that across the board where folks that had these digital automation programs are accelerating those. And that's what we expect to happen I think we should expect that to happen broadly now just a matter of, you know, how long that takes and and how serious folks are around that. Missed anything in there, Jeff? I don't think so. Oh, do you just see, the number of new IT customers in court? Okay. I think we track that now with the resellers for some of the the ICAR solutions that we have. I mean, those numbers are dozens dozens of customers. I think the devil is always in the details as to you mentioned some of our bigger customers in your question. That's taking those dozens dozens and dozens and sifting out who's going to be the next big customer who's going to have those really big volumes. So I think tracking that number is just not that valuable. I don't know that it is helpful. Got it. Thank you. And there are no further questions at this time. I would like to turn it back over to Mr. Chuck Hurley for closing remarks. Thank you, operator, and thank you everyone for joining us today. We look forward to updating you again next quarter. Our call has concluded. Have a wonderful day. This concludes today's call. Thank